The following appeared as part of a plan proposed by an executive of the Easy Credit Company to the president:

“The Easy Credit Company would gain an advantage over competing credit card services if we were to donate a portion of the proceeds from the use of our cards to a well-known environmental organization in exchange for the use of its symbol or logo on our card. Since a recent poll shows that a large percentage of the public is concerned about environmental issues, this policy would attract new customers, increase use among existing customers, and enable us to charge interest rates that are higher than the lowest ones available.”

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. For example, you may need to consider what questionable assumptions underlie the thinking and what alternative explanations or counterexamples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound, and what, if anything, would help you better evaluate its conclusion.

The executive of the Easy Credit Company has devised a brilliantly simple plan to gain an edge in the credit card business. The Easy Credit Company would gain an advantage over competing credit card services if we were to donate a portion of the proceeds from the use of our cards to a well-known environmental organization in exchange for the use of its symbol or logo on our card. Since a recent poll shows that a large percentage of the public is concerned about environmental issues, this policy would attract new customers, increase use among existing customers, and enable us to charge interest rates that are higher than the lowest ones available. With this plan, the Easy Credit Company would appeal to a large segment of the public. As a result, the company would make huge profits and, presumably, move up to the top of the credit card industry

However, there are a number of flaws with the argument. First of all, the claim that a large percentage of the public is concerned about environmental issues is questionable. A poll on an average day might show that people are waffling on the issue of the environment and global warming, but a poll done at the height of the oil spill disaster in the Gulf of Mexico likely would show that people were not concerned about environmental degradation. Furthermore, it does not appear that the executive of the Easy Credit Company has taken the time to investigate what percentage of credit card holders are environmentally conscious. If the company has a brick and mortar store, it would be possible to conduct an informal poll of people who enter or exit the building, but it is unlikely that the company would be able to afford to do this for each of its locations. Furthermore, the company would need to conduct polls at different times of the year. In winter, when most people would be concerned about heating costs, the company might discover that a majority of its customers are not concerned about protecting the environment. If the company were to do a poll in August, when more people would be vacationing and spending money, the company might discover that most people would be more interested in saving as much money as possible. The executive of the Easy Credit Company has not given any thought to the fact that the poll may not reveal what the company needs it to reveal

The second problem with the executive’s plan is that the company has not taken into account the fact that consumers might not be willing to use a credit card with an environmental logo on it. Consumers dislike companies that have a logo that they associate with something negative. When the airline industry was faced with the fallout from a number of plane crashes, several airlines dropped their logos on their planes. In fact, the logos were dropped so fast that new ones had to be created. When the logos returned, consumers had to get used to the new designs. Since the Easy Credit Company’s logo is emblazoned on the credit card that consumers use, any company that decided to use the logo would confuse customers who would never expect a credit card to come from a financial institution that donates part of its profits to protect the environment. Consumers do not like to be confused by companies that place their logo on products that they do not use

The third problem with the Easy Credit Company’s argument is that the company assumes that consumers will immediately switch to a credit card with an environmental logo on it. The executive of the Easy Credit Company has not considered that consumers may want a credit card that does not require them to pay an annual fee for the privilege of using the card. The credit card that the executive of the Easy Credit Company proposes might simply lose its competitive edge

People are loyal to particular brands. If a company makes a change in its logo or marketing policy, consumers may not immediately switch to a credit card with the new logo. In fact, they may try to save money by switching to another credit card. The executive of the Easy Credit Company has not taken into consideration the possibility that the company may lose some of those customers who switched to another credit card. The executive of the Easy Credit Company also has not realized that a company’s profits may diminish if the company charges higher interest rates than it charges its competitors

The fourth problem with the Easy Credit Company’s argument is that the company assumes that other companies will respond to the company’s actions. The Easy Credit Company assumes that other companies will be willing to donate a percentage of the profits from their credit card sales to an environmental organization in exchange for the use of the Easy Credit Company’s logo. However, it is possible that the other companies will not want to become associated with the Easy Credit Company’s policies. Furthermore, it does not appear that the Easy Credit Company has taken into consideration the fact that other organizations may be unwilling to donate part of their profits to environmental causes. For example, if the company makes its profits from credit cards, it may not want to devote any of its profits to environmental causes. If the company earns its profits from selling cars, it may not want to donate part of its profits to environmental organizations. Finally, it does not appear that the executive of the Easy Credit Company has taken into consideration the possibility that other companies may become involved in the credit card market. For example, a company that sells cars might offer credit cards. The executive of the Easy Credit Company has not considered the possibility that another company might develop a credit card that appeals to the same segment of the public as the Easy Credit Company’s card.

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