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.”

The regional manager of Grocery Town suggests that the pricing policy at their Oak City stores should be changed to a ‘high-low’ pricing policy as the same pricing policy has brought in high profits for their stores in Elm City. However, the arguer fails to provide crucial evidence that can draw similarities between the situations in Elm City and Oak City for making the argument sound convincing enough. Therefore, the argument fails to persuade the reader that this change of the pricing policy will prove to be profitable in Oak City.

A major lacuna in the given argument is that the arguer fails to address other factors that could have influenced the rise in profits in the Grocery Town store situated in Elm city. It is likely that there are no major competitors for the Grocery Town store in its vicinity. Therefore, the store enjoys monopoly in the market of the area where it is located. Moreover, it is likely that the store stocks products that are in high demand. For instance, as it is located near a residential area, it caters for common household goods and people come to the store for all their daily requirements. This is evident from the fact that the sales of the store are on the rise as the residential area in its vicinity nears full occupancy. These factors would override the ‘high-low’ pricing policy when it comes to affecting the sales at the store. Since the ‘high-low’ pricing policy is itself questionable as the sole reason behind the high profits made by the store in Elm City, it would be highly unreasonable to assume that implementing the same policy for the stores in Oak City would ensure high profits.

The arguer provides no information related to the situation in the vicinity of the Grocery Town stores in Oak City. Moreover, the reader needs to know the location of the residential development which is being planned in Oak City and its proximity to the stores in order to be convinced that the residential development will make a difference to the sales at the stores. It is likely that the residential area being developed is quite far from the Grocery Town stores in Oak City. It is unlikely that people will travel long distances just to make purchases from these stores. Moreover, there is a likelihood of stores of competitors being situated closer to the area where the residential development is being planned. Therefore, it is unlikely that the residential development would make a significant difference to the sales at the Grocery Town stores located in Oak City. On the other hand, the current ‘everyday low prices’ policy seems to be a better option for attracting the crowds to the stores as the arguer has not been able to establish the contribution of the weekly heavy discounts in increasing the sales at the stores. Additionally, the ‘everyday low prices’ policy might succeed in weaning the customers away from the competitor stores.

The argument could have been bolstered by providing additional information that confirmed the ‘high-low’ pricing policy as the sole reason behind the success of the Grocery Town store in Elm City. Moreover, the arguer needs to present data pertaining to the competition being faced by the Grocery Town stores in Oak City in the form of other grocery stores. The pricing policy of the Grocery Town stores in Oak City will have to be determined keeping in mind the pricing policies of its competitors. In conclusion, the recommendation made by Grocery Town’s regional manager is not well supported. The evidence presented by the arguer does little to substantiate the argument and therefore, it appears highly unconvincing and unjustifiable.