The following appeared as part of a promotional campaign to sell advertising space in the Daily Gazette to grocery stores in the Marston area:
“Advertising the reduced price of selected grocery items in the Daily Gazette will help you increase your sales. Consider the results of a study conducted last month. Thirty sale items from a store in downtown Marston were advertised in The Gazette for four days. Each time one or more of the 30 items was purchased, clerks asked whether the shopper had read the ad. Two-thirds of the 200 shoppers asked answered in the affirmative. Furthermore, more than half the customers who answered in the affirmative spent over $100 at the store.”
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.
For argument’s sake, let’s assume that store A has 30 items in their store that they would like to advertise to shoppers. For the sake of argument, let’s also assume that store A’s average sale is $100. Finally, let’s assume that store A knows that they normally advertise a ‘special’ for one day only, and that 50% of those shoppers who respond to the ad have spent more than $100. Does advertising the ‘special’ for three days four days out of the week help increase sales? Perhaps, but it might not increase sales as much as advertised. The assumption is misleading, because even if all of the 30 items in the list are purchased, store A will still only receive $300 worth of sales. Therefore, the ad will not likely drive additional sales. Instead, store A is counting on people to buy off-list items. For the 30-item list, maybe only two of the items will be purchased, which would still yield only $60. Therefore, if store A spends $500 for the 30-item ad, they will only receive $150 in additional sales. That is, a 25% increase in sales. This is well below the 50% increase in sales that store A would be hoping for, if the ad were to drive shoppers to buy off-list items. But even if the ad does drive shoppers to buy off-list items, there is no guarantee that the off-list items will be purchased
Maybe the ad is ineffective because it lacks focus. A shopper looking for a daily special might be overwhelmed by the list of 30 items. They might not even read the list. Therefore, they will not be able to decide whether to buy any of the items listed. Alternatively, shoppers will be reluctant to buy off-list items because the items may not be in stock. In that case, store A will receive no credit for the sale, or for the sale receipt
Perhaps the ad is ineffective because it only advertises the ‘special’ for one day. Again, the shopper might be overwhelmed by the list and refuse to try to read the entire ad. Or they will be reluctant to buy off-list items, because there is no guarantee that the items will be in stock. In that case, store A will not receive credit for the sale, or for the sale receipt
Finally, the ad is ineffective because all of the items are not discounted. Discounting is a common sales technique; however, not all items should be discounted. Some items are sold at a high price because they cannot sell at a lower price, or they are seasonal. For example, apples may be in season, and there is no reason to discount them. Even when an item is discounted, it does not mean that shoppers will buy more. The shoppers who are responding to the ad are probably only interested in the 30 items on the list. Therefore, the ad is ineffective because it only advertises the ‘special’ for one day
There are many factors to consider in advertising. When advertising, store owners must consider who the customers are, what the items they sell are, how to present their ads, and what the advertisements should say. Without considering these factors, store owners may make decisions based on assumptions that may or may not be true.