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ESSAY OF THE WEEK |
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Question
The following appeared in the business section of the local newspaper:
The Downtown Merchants' Association reported a 12-percent increase in revenues for the holiday season, compared to last year's sales. The DMA attributed the increase to a new television advertising campaign, which aired commercials in the two weeks prior to the holiday. Based on the success of this year's campaign, the DMA will repeat the campaign next year."
Discuss how well reasoned you find this argument. In your discussion, be sure to analyze the line of reasoning and the use of evidence in the argument.
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| ashish gupta: 12/1/2008 |
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Even though the Downtown Merchants' Association reported a 12-percent increase in revenues for the holiday season, compared to last year's sales, it can not be directly inferred that increase in revenue is only caused due to television advertising campaign as attributed by DMA. DMA should also try to identify other reasons like quality of product, competition in market and response from target user group, increase in no. of users etc. One thing can also be observed that commercialls were aired two weeks prior - this had helped in way that user would become familarized with product and its qualities and waiting for holiday season to purchase such a product.For next year they should survey that advertisement has the same charm as previous year. If there are no other reasons affecting sales than television advertising campaign and campaign can generate same charm and exitment among users then there are more reasons to believe in argument in positive that sales will go up. But if it is not so, then sales for next year is going to affect and it will can go low as expected. |
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| cyril asare: 3/24/2009 |
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There was a 12% increase in sales which is attributed to a television campaign, what is the cost of the campaign, does it form just a margin of the increase in sales profit or more than the sales profit. It its more, depending on the potential of the campaign to rope in more sales, it could be modified or re-strategised. If it forms a fraction of the sales profit it should be continued |
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| William Wallace: 6/18/2009 |
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The Downtown Merchants' Association reported a 12-percent increase in revenues for the holiday season that can be attributed to many factors like increase in requirement for the festive season, reduction in price of the inventories because of plummeted inputs' price etc apart from the marketing strategy followed by the association. Advertisement brings in the customers but at the cost of high expenses involved in marketing. DMA must hence evaluate whether the strategy has resulted in overall increase in net profit or the expenses involved just counterbalanced the increase in revenue before repeating the campaign next year. |
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Reference Essay |
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Based on the information given in the passage, the reader cannot conclude that the advertising campaign was a success. The commercial campaign occurred in the last two weeks of the holiday season. The passage does not define the length of the holiday shopping season, but it is likely to be longer than two weeks. The revenue measurement cited in the article covered the entire holiday season. The link between the advertising campaign and the revenue increase would have been stronger if the article reported a revenue increase over the same period of time in which the commercials aired.
The article does not indicate any other potential factors that may have been responsible for the revenue increase. There may be other reasons for the increased holiday sales, however. The downtown merchants may have carried merchandise that was in demand for the holiday season; the number of downtown merchants may have increased; the downtown merchants may have offered better deals on merchandise; or perhaps the local mall was under construction during the holiday season.
The link between the advertising campaign and the revenue increase may have been stronger if the Downtown Merchants Association had built a mechanism to determine whether or not customers were responding to the ad campaign. For example, if the Downtown Merchants Association had offered a discount on purchases, or complimentary parking if a customer mentioned the television advertisement, the DMA could be more certain that the ad campaign was truly effective.
Based on the information in the passage, the DMA is incorrect to conclude that the advertising campaign was responsible for the increased revenue. In future campaigns, however, the DMA could measure the effectiveness of the campaign using a variety of tools.
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