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argument 116
The following appeared in a memo from Grocery Town's regional manager.
'The new Grocery Town store in Elm City, located near a new residential development, has a 'high-low' pricing policy where average prices are relatively high, but deep discounts are offered on some items in weekly specials. This store has been showing increased profits every month as the nearby residential development gets closer to full capacity. It follows that people prefer a pricing policy where they can find bargains on specific items. Since there is a new residential development planned in Oak City, we should change the pricing policy at all of our Oak City stores from our current 'everyday low prices' policy to a 'high-low' policy. This will increase the profits at all of our stores in Oak City.'
In this memo, the author suggests that Grocery Town should change the pricing policy at all of the Oak City stores from current "everyday low prices" policy to a "high-low" policy. To support his conclusion, the arguer reports that a new Grocery Town store in Elm City , which has carried out the "high-low" policy, has been proved to be successful. This argument is flawed in several aspects.
To begin with, I should point out that the arguer does not provide clear evidence to show that the so-called "high-low" policy in Elm City has proved to be successful. The arguer fails to provide more details about the store in Elm City. Therefore when "high-low" pricing policy has not been carried out, whether stores in Elm City were not so profitable is unknown. It is also mentioned that residential development near the shop is increasing but is getting closer to full capacity, therefore when it gets to full capacity may the store will not be so profitable as before. Also, the arguer falsely assumes that people prefer the "high-low" policy. It is entirely possible that customers are more interested in other aspects, such as the quality of goods. In addition, the arguer does not inform me whether other stores in Elm City are also more profitable than before. Therefore it is unconvincing to conclude that the "high-low" pricing policy is popular among consumers.
The arguer also fails to take into account the possible differences between Elm City and Oak City. For instance, maybe most of the residents in Elm City earn not so much, due to the development of local economy or some other reasons. Therefore when go shopping, they are more interested in the price and would like cheap ones, especially everyday goods. So it is no wonder "high-low" pricing policy can be successful in Elm City. While in Oak City, it is possible that most of local consumers are at a high life level and therefore they are more concerning about the quality of goods. Under such circumstance, the "high-low" policy is not likely to be practical.
Finally, even if "high-low" policy is feasible, it is fallacious to conclude that all the stores in Oak City should change current pricing policy . The arguer does not provide the overall profits of the stores in Oak City, so whether other stores are not so profitable and need a change in pricing policy is unknown. Another problem is that in Oak City, customers in different areas may have different characters. Therefore the "high-low" policy may be successful in some stores but in other ones, it is not so profitable as the current "everyday low prices" pricing policy. Without more details and thorough consideration, it is unfair to require all the stores in Oak City to change the current pricing policy.
In sum, the arguer's advice mentioned in the memo is incredible. To better substantiate it, the arguer should first provide clear information to convince me that "high-low" price policy is indeed a success in Elm City. He should also take into account the character of consumers in Oak City and therefore to decide whether current pricing policy needs changing. And if a change is really needed, he should also find out whether it should be carried out in all the stores in Oak City. |
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