[Sazerac] Argument 8 by Nirvana`

Nirvana`UID: 2720283

8 The following appeared in a memorandum issued by the strategic planning department at Omni Inc.

"Mesa Foods, a manufacturer of snack foods that currently markets its products within a relatively small region of the country, has strong growth potential. Mesa enjoyed a 20 percent increase in profits last year, and its best-selling product, Diabolique Salsa, has had increased sales over each of the past three years. Since Omni Inc. is interested in reaching 14-to-25 year olds, the age group that consumes the most snack food, we should buy Mesa Foods, and concentrate in particular on marketing Diabolique Salsa throughout the country."
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Grounding on the hypothesis that the situation of the small region will happen to the whole country continuously and the confidence that the only product Diabolique Salsa must get success by concentrating in particular on marketing it nationalwidely, the author hastily suggested that it was worth buying entire Mesa Foods. But before this suggestion is adopted, some other alternatives should be taken into account.

Firstly, to expect the increase sales to take place all over the country as well as it did in the small region is a bit too unrealistic for neglecting the differences between the local situation and that of the country. For instance, people from these two parts are perhaps not well matched in tastes. Maybe the people in the region are fond of some flavor that is peppery while the people of the entire land prefer sweet taste overall. Besides, the difference in density of them might also make the author a failure. It is possible that the density of youngsters in the small region who consumes the most snack food is rather densely populated, which may be an exception of the overall population, and hence it is easier for Mesa Foods to carry out the increase in profits in only two or three years based on the large number of potential consumers. Furthermore, whether their best-selling product, Diabolique Salsa, is competitive enough in a larger market should be reconsidered. Joining the nationwide market means having more competitors. When the customers from all over the country have hundreds of choices of snack food, a company must take action to strike their products out of the shelves. Thus, the manufacturer has to work out an advertisement of high-tech, which may cost a lot, or perhaps invest extra money in making prettier packaging to attract the consumers. These actions can really pull the profits down in a long period of time.

Secondly, there is no need to purchase the entire Mesa Foods before we get more products’ information of Mesa Foods or if Omni Inc. only concentrates in particular on marketing Diabolique Salsa. When Omni Inc. is interested in reaching 14-to-25 year olds, the best-selling product of Mesa Foods may be designed to meet the needs for snack foods of under-14 year olds. As a result, Omni Inc. probably has to alter their strategy of marketing Diabolique Salsa or pay extra bills to make the heavier or lighter so as to satisfy the customers they are interested in. Furthermore, whether the products other than Diabolique Salsa sell well should be questioned as it is possible that bad sales indicate poor qualities and perhaps the data given above is exactly telling us something like this. Does it look strange while Mesa enjoyed a 20 percent increase in profits last year, Diabolique Salsa has had increase sales for already three years? The answer may lie in the fact that over the past three years Mesa has continually cancelled manufacturing the other products and divert their emphasis onto Diabolique Salsa, which sells much better. Thus, Omni Inc. have to check the other parts of the products manufactured by Mesa Foods in order to avoid impressing the consumers negatively and hence influence the overall sales of Omni Inc.

To sum up, what the author had issued in the memorandum is still far away from a mature idea. Unless the problems discussed above have been solved and information of Mesa Foods is sufficient to prove it is a fine manufacturer can Omni Inc. put the idea into practice. Furthermore, maybe to hire only one or two of the managers of the department which is in charge of marketing Diaboliqe Salsa instead of purchasing the whole of Mesa Foods can be a suggestion worth mulling over.