The following is a memorandum from the sales director to the president of the Healthy-and-Good food company.

“A recent study indicates that Venadial, a new margarine currently produced only in the country of Alta, actually reduces cholesterol levels. Derived from the resin of pine trees, Venadial works by activating a metabolic response that is not yet well understood. However, cholesterol levels fell ten to fifteen percent among participants in the study who consumed Venadial daily, and the risk of heart attack by one-third. In addition, the new margarine is so popular that stores in Alta are unable to keep it on their shelves. Therefore, if our company obtains the exclusive right to sell Venadial internationally, our profits are sure to increase substantially within a very short time.”

The memorandum from the sales director suggests that the Healthy-and-Good food company should obtain exclusive rights to sell the new margarine called Venadial in the international market because it has been found that it reduces cholesterol level and also reduces the risk of heart attack. The health benefits of Venadial have made it extremely popular in Alta where it is produced and thus it will help in increasing the profits of the company. The director, however, is not able to present a convincing argument in his memorandum.

First of all, the sales director himself mentions in the memorandum that the new margarine activates a metabolic response which is not yet well-understood. Hence, the effects that it can have on the health of a person are also not completely known. It is possible that in a longer period of time it proves to be ineffective or even harmful to health. Since the study was made in a limited period of time, we are not sure of its long term effects. Moreover, with the passage of time, new studies are conducted and new facts come to light. It is possible that a study in the present contradicts the results of a study in the past. Therefore, how long the results of this study will remain valid cannot be confirmed.

According to the memorandum, the participants who consumed Venadial daily exhibited better health since ten to fifteen percent showed reduced cholesterol level as well as lesser risk of heart attack. However, a decreased cholesterol level and heart attack risk depends on various other factors as well which have no mention in the memorandum. The cholesterol level of a person depends highly on the lifestyle he lives. It depends upon the overall diet of a person and not on the intake of one particular substance alone. Moreover, there is a great role played by exercise in reducing cholesterol as well as heart attack risks. It is likely that the participants had started exercising on a regular basis which has helped in reducing cholesterol and subsequently reducing heart attack risk. However, the memorandum does not acknowledge the role played by exercising and the lifestyle pattern of the participants.

It can further be argued that given that Venadial is extremely popular in the country of Alta where it is produced, there is no surety of the fact that it will be equally popular internationally. On the contrary, it can prove to be the opposite since the international market is completely different from that of Alta. Moreover, this product will not only have to face international competition but it would require a great amount of publicity to let the world know about its health benefits. This is again an affair that involves a lot of initial investment. Hence, it cannot be said that it will prove profitable to obtain exclusive rights of the margarine because the break-even will be reached after a certain period of time. The company will then take longer than expected to gain profits from the sale of Venadial. If the president of Health-and-Good food company has to agree to the suggestion of the sales director, he must keep in mind the above discussion, which makes the memorandum of the sales director less convincing.