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     Home >> GMAT >> Essays >> Essay - 88


    The following appeared in a memorandum from the ElectroWares company’s Argument Page numbers marketing department. “Since our company started manufacturing and marketing a deluxe light bulb six months ago, sales of our economy light bulb—and company profits—have decreased significantly. Although the deluxe light bulb sells for 50 percent more than the economy bulb, it lasts twice as long. Therefore, to increase repeat sales and maximize profits, we should discontinue the deluxe light bulb.” Discuss how well reasoned . . . etc.

       In this memorandum ElectroWare’s marketing department reasons that manufacturing and marketing of the company’s deluxe light bulb should be discontinued. The primary factors that influence their decision are a significant decrease in sales of the company’s economy light bulb as well as declining company profits in the six month period following the introduction of the deluxe bulb. Presumably, their line of reasoning is that the introduction of the deluxe bulb is responsible for both of these undesirable outcomes. Unfortunately, the marketing department’s rationale is problematic for several reasons.

    In the first place, the marketing department has engaged in “after this, therefore because of this” reasoning. The only reason offered for the belief that the introduction of the deluxe bulb is responsible for both the decline in sales of the economy bulb and the decline in company profits is the fact that the former preceded the latter. No additional evidence linking these events is provided, thus leaving open the possibility that the event are not causally related but merely correlated. This in turn leaves open the possibility that factors other than the one cited are responsible for the decline in sales of the economy bulb and the decline in company profits.

    In the second place, it is not clear in the memorandum exactly how the decline in sales of the economy bulb is related to the decline in company profits. One possibility is that the decline in profits is a direct consequence of the decline in sales of the economy bulb. Another is that some other factor such as ineffective marketing of the deluxe bulb or the start-up costs associated with the introduction of the deluxe bulb is responsible for the decline in company profits. Until the relationship between the events in question is fully understood it would be folly to act upon the marketing department’s recommendation.

    In conclusion, the marketing department has failed to articulate reasons that are sufficient to justify its recommendation. Specifically, the department has failed to establish a causal link between the introduction of the deluxe bulb and the declines in sales of the economy bulb and company profits. While the introduction of the deluxe bulb may have been a contributing factor in these declines, to strengthen the marketing department’s position various other factors must be examined and ruled out as possible causes of the company’s misfortune.




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