The following appeared in a memo to the board of directors of Bargain Brand Cereals.
"One year ago we introduced our first product, Bargain Brand breakfast cereal. Our very low prices quickly drew many customers away from the top-selling cereal companies. Although the companies producing the top brands have since tried to compete with us by lowering their prices and although several plan to introduce their own budget brands, not once have we needed to raise our prices to continue making a profit. Given our success in selling cereal, we recommend that Bargain Brand now expand its business and begin marketing other low-priced food products as quickly as possible."
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.
It is recommended from the memo that the Bargain Brand breakfast cereal should expand into other low-priced food to gain competitive advantage from other food companies. However, the suggestion is made from dubious assumptions and does require further examination of other types of information.
First of all, it is pointed out from the memo that the core advantage of Bargain Brand breakfast cereal lies in the low price and most of the new-gained customers are appealed by their low price compared to other cereal brands. However, the price sensitive buying behavior in cereal markets doesn’t mean that other food markets are also dominated by price-sensitive customers. For example, customers of daily soup may care about the taste more than pure price. What I would like to emphasize is that the low price logic can’t be directly applied in other food markets that are still unknown. It is highly possible that other food markets may value food brands, qualities or even nutritions more than price. If that’s the case, the direct application of low price strategy will damage the company’s profit rather than bringing more business. Therefore, more research on other food markets is necessary before claiming a low price strategy to be effective.
Secondly, the memo also stated that competitors who leverage the low-price strategy don’t affect the profitability of Bargain Brand breakfast and assume that the company can survive in other food markets. However, this assumption is problematic in a way that none of the information of competitors in other food markets are being provided. Therefore, it is premature to claim that the company itself will win the price battle when competitors may adopt a totally different competition, such as raise their brand images, or increase the product qualities or even start the membership etc. The major fallacy is that the board of directors wrongly assume that different food markets are similar while the truth is that there may be more diversity than similarity. Hence, the understanding of other food markets as well as the relevant competitors are imperative to evaluate the efficacy of the low-price recommendation.
Last, the low-price cereal was introduced one year ago, and it also requires further examination to understand whether the same success will continue or not. In other words, the board of directors’ assumption that one year's success will last forever can be challenged as well, which indicates the importance of tracking the following development. Only when the success does last, can we finally claim that the low-price strategies are valid in the cereal market and explore the potential markets that are suitable to apply the same strategy.
In conclusion, premature assumptions of same buying behaviors, similar market dynamics, as well as the overconfidence in one year’s success make the recommendation specious.
Comments
e-rater score report
Attribute Value Ideal
Final score: 4.5 out of 6
Category: Good Excellent
No. of Grammatical Errors: 0 2
No. of Spelling Errors: 0 2
No. of Sentences: 17 15
No. of Words: 461 350
No. of Characters: 2385 1500
No. of Different Words: 216 200
Fourth Root of Number of Words: 4.634 4.7
Average Word Length: 5.174 4.6
Word Length SD: 2.752 2.4
No. of Words greater than 5 chars: 169 100
No. of Words greater than 6 chars: 138 80
No. of Words greater than 7 chars: 97 40
No. of Words greater than 8 chars: 71 20
Use of Passive Voice (%): 0 0
Avg. Sentence Length: 27.118 21.0
Sentence Length SD: 12.175 7.5
Use of Discourse Markers (%): 0.941 0.12
Sentence-Text Coherence: 0.396 0.35
Sentence-Para Coherence: 0.613 0.50
Sentence-Sentence Coherence: 0.133 0.07
Number of Paragraphs: 5 5
Grammar and spelling errors:
Line 4, column 1, Rule ID: WHITESPACE_RULE
Message: Possible typo: you repeated a whitespace
Suggestion:
... a low price strategy to be effective. Secondly, the memo also stated that comp...
^^^
Line 5, column 414, Rule ID: PRICE_PRIZE[1]
Message: Did you mean 'prize' (reward)?
Suggestion: prize
...im that the company itself will win the price battle when competitors may adopt a tot...
^^^^^
Transition Words or Phrases used:
also, finally, first, hence, however, if, may, second, secondly, so, still, therefore, well, while, for example, in conclusion, such as, as well as, first of all, in other words
Attributes: Values AverageValues Percentages(Values/AverageValues)% => Comments
Performance on Part of Speech:
To be verbs : 24.0 19.6327345309 122% => OK
Auxiliary verbs: 14.0 12.9520958084 108% => OK
Conjunction : 9.0 11.1786427146 81% => OK
Relative clauses : 21.0 13.6137724551 154% => OK
Pronoun: 28.0 28.8173652695 97% => OK
Preposition: 48.0 55.5748502994 86% => OK
Nominalization: 14.0 16.3942115768 85% => OK
Performance on vocabulary words:
No of characters: 2456.0 2260.96107784 109% => OK
No of words: 459.0 441.139720559 104% => OK
Chars per words: 5.35076252723 5.12650576532 104% => OK
Fourth root words length: 4.62863751936 4.56307096286 101% => OK
Word Length SD: 2.84702528 2.78398813304 102% => OK
Unique words: 221.0 204.123752495 108% => OK
Unique words percentage: 0.481481481481 0.468620217663 103% => OK
syllable_count: 768.6 705.55239521 109% => OK
avg_syllables_per_word: 1.7 1.59920159681 106% => OK
A sentence (or a clause, phrase) starts by:
Pronoun: 5.0 4.96107784431 101% => OK
Article: 8.0 8.76447105788 91% => OK
Subordination: 2.0 2.70958083832 74% => OK
Conjunction: 2.0 1.67365269461 119% => OK
Preposition: 2.0 4.22255489022 47% => More preposition wanted as sentence beginning.
Performance on sentences:
How many sentences: 18.0 19.7664670659 91% => OK
Sentence length: 25.0 22.8473053892 109% => OK
Sentence length SD: 41.0642751228 57.8364921388 71% => OK
Chars per sentence: 136.444444444 119.503703932 114% => OK
Words per sentence: 25.5 23.324526521 109% => OK
Discourse Markers: 9.83333333333 5.70786347227 172% => OK
Paragraphs: 5.0 5.15768463074 97% => OK
Language errors: 2.0 5.25449101796 38% => OK
Sentences with positive sentiment : 13.0 8.20758483034 158% => OK
Sentences with negative sentiment : 4.0 6.88822355289 58% => More negative sentences wanted.
Sentences with neutral sentiment: 1.0 4.67664670659 21% => More facts, knowledge or examples wanted.
What are sentences with positive/Negative/neutral sentiment?
Coherence and Cohesion:
Essay topic to essay body coherence: 0.248543062666 0.218282227539 114% => OK
Sentence topic coherence: 0.0887840961356 0.0743258471296 119% => OK
Sentence topic coherence SD: 0.0843310931804 0.0701772020484 120% => OK
Paragraph topic coherence: 0.143697666611 0.128457276422 112% => OK
Paragraph topic coherence SD: 0.0583815729221 0.0628817314937 93% => OK
Essay readability:
automated_readability_index: 16.5 14.3799401198 115% => OK
flesch_reading_ease: 37.64 48.3550499002 78% => OK
smog_index: 8.8 7.1628742515 123% => OK
flesch_kincaid_grade: 14.2 12.197005988 116% => OK
coleman_liau_index: 14.05 12.5979740519 112% => OK
dale_chall_readability_score: 8.59 8.32208582834 103% => OK
difficult_words: 108.0 98.500998004 110% => OK
linsear_write_formula: 13.5 12.3882235529 109% => OK
gunning_fog: 12.0 11.1389221557 108% => OK
text_standard: 14.0 11.9071856287 118% => OK
What are above readability scores?
---------------------
Rates: 66.67 out of 100
Scores by essay e-grader: 4.0 Out of 6
---------------------
Note: the e-grader does NOT examine the meaning of words and ideas. VIP users will receive further evaluations by advanced module of e-grader and human graders.