The following was presented as part of a business plan by Apex Corporation.
"To answer the increased demand for artisan coffee, Apex Corporation is releasing a new line of coffee, "Gourmet Select." Apex Corporation will first introduce the coffee into major supermarkets, where it hopes word-of-mouth advertising will sustain sales. After a few months Apex Corp. will run an advertising campaign aimed at television and radio while simultaneously releasing the brand to several major chain restaurants. Based on this strategy, Apex Corporation hopes to make "Gourmet Select" one of the top sellers in the coffee market."
Write a response in which you examine the stated and/or unstated assumptions of the argument. Be sure to explain how the argument depends on these assumptions and what the implications are for the argument if the assumptions prove unwarranted.
The argument presented by Apex Corporation as a business Corporation is rife with logical flaws. There are numerable assumptions that are made by Apex Corporation and if the assumptions fail the argument that Apex Corp. will make "Gourmet Select" one of the top sellers will fall apart.
Initially introducing a new line of coffee where people are allowed to select the flavor of the coffee in a supermarket may seem like a good idea. But what's the guarantee that people will buy Gourmet Select in a supermarket where nobody knows about it. Word-of-mouth advertising doesn't indicate a rise in sales. Bust people who come to supermarket may not even hear about the sales. These sale strategies could have worked for Apex Corporations previously for some other product, but how does it matter here. Gourmet Coffee is a whole different thing.
Secondly, Apex Corporation has an idea of running an advertisement campaign aimed at TV and radio. This hugely depends on the success of the supermarket sales as they're planning to release the brand to several major chain restaurants. Only if the Gourmet Coffee becomes a huge success, major chain restaurants will think about it. In fact, big restaurants and franchises will have their own coffee and why would they have Apex Corporation's store in their restaurant.
We know that there's an increased demand for artisan coffee. What's the assurance that after a few months the same demand continues? There can be something else more demanding than artisan coffee. By the time of advertisement, artisan coffee can lose its buzz. This indicates a time flaw. What's happening now might not happen few months later in a fast paced world like ours. Even if we assume Apex Corporations to release their brands into several major chain restaurants, we don't know if they'll sell. There may be another company with more creative ideas and better coffee. To become a top seller advertising alone is not sufficient. We don't know anything about the feedback from the customers of Apex Corp. and they have assumed their initial supermarket idea to be successful based on no valid premise.
There's a huge gap between successful sales in supermarket to becoming a top seller in the coffee market. If there is initial success for the firm and the demand of artisan coffee declines, there's no use investing in advertisements over television and radio. There are many doubts and fallacies in the business plan of Apex Corporation.
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