GRE Essay Topic 789 - 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. " Discuss how well reasoned you find this argument.
This argument is not cogent because the regional manager has assumed that by adapting the ‘high-low’ policy of Elm city
This argument is not cogent because the regional manager has assumed that by adapting the ‘high-low’ policy of Elm city grocery town store they can wax there profit.But there are several reason that lessen the srength of this claim.
Firstly, in this memo the author has mentioned that store is located near the new residential development.So it might be possible that there are no other grocery store in that area,leaving the Grocery Town store as the only choice for residents.And,thus people wait for there weekly specials,so that they can get items in low price.If this is the case then profit of Grocery Town store is the mirage of their ‘high-low’ pricing policy.Therefore there is no base for adopting this strategy by oak city store.
Secondly,the regional manager is concluded from their profit tha people prefer a pricing policy where they can find bargains on specific items.But he has not stated any survey done to certify his assumption.It can be possible that people are baffled of waiting weekand special to get cheap item, and rather they want a sore in which they can find low price gadgets everyday.Thus in the paucity of any data it is difficult to find the inclination of people.
Furthermore,it might be possible that people like the oak city store because of its low-pricing policy and acquiring the ‘high-low’ pricing policy could have a detrimental effect on his sale
Thus, in the paucity of the details the author claim is not strengthful enough.And one cannot assume that by applying the ‘high-low’ pricing policy of grocery town store to oak city store can have the similar effect.