The following was written as a part of an application for a small-business loan by a group of developers in the city of Monroe.
“Jazz music is extremely popular in the city of Monroe: over 100,000 people attended Monroe’s annual jazz festival last summer, and the highest-rated radio program in Monroe is ‘Jazz Nightly,’ which airs every weeknight. Also, a number of well-known jazz musicians own homes in Monroe. Nevertheless, the nearest jazz club is over an hour away. Given the popularity of jazz in Monroe and a recent nationwide study indicating that the typical jazz fan spends close to $1,000 per year on jazz entertainment, a jazz music club in Monroe would be tremendously profitable.”
Write a response in which you examine the stated and/or unstated assumptions of the argument. Be sure to explain how the argument depends on these assumptions and what the implications are for the argument if the assumptions prove unwarranted.
The developers of Monroe have based their argument for opening a jazz club on the premise that Monroe is an ideal market for such a business. They point to the popularity of jazz music in the city, the fact that out-of-town jazz musicians own homes there, and the popularity of the jazz radio show. This argument has some merit, but it fails to acknowledge a few factors.
If Monroe has such a high demand for jazz music, then surely there are other clubs near the city that cater to that demand. For example, Toronto, Canada, which has a population of 2.5 million, has at least a dozen jazz clubs. Moreover, there are jazz clubs in small towns throughout Canada, such as New Glasgow, Nova Scotia; Cobourg, Ontario; and Petrolia, Ontario. These clubs serve not only local patrons, but patrons from the surrounding area as well. Therefore, Monroe’s developers may be overlooking the potential customer base for their club; if other clubs exist nearby that serve Monroe’s population, then it would be unlikely that residents would drive to a more distant location for jazz entertainment. Furthermore, these clubs may be catering to a more specialized audience than Monroe’s population, further diminishing the likelihood that Monroe’s residents would drive to a more distant location for jazz entertainment.
The developers also claim that jazz musicians who have lived or performed in Monroe are likely to return to the city to perform. However, this seems highly unlikely. After all, these musicians probably heard the jazz music elsewhere, and were impressed by the musicianship and quality of their performances. If they had enjoyed the music, then it is unlikely that they would return to Monroe solely to perform jazz music. Furthermore, other musicians are likely to follow in the footsteps of these musicians, moving to Monroe only to perform jazz music. This diminishes the number of jazz musicians who are likely to return to Monroe to perform. Therefore, the developers’ claim that Monroe is an ideal market for jazz entertainment is flawed.
The developers’ reasoning also ignores the fact that jazz music is not widely popular in the United States. A recent study by Mintel indicated that out of 1,000 Americans, only 27 actually listened to jazz music on a regular basis. Furthermore, only 13% of the population had watched a jazz performance within the previous 30 days. This would suggest that Monroe’s developers should focus their efforts on attracting non-jazz fans. They should also consider offering jazz music as a complement to other types of entertainment. For example, the Detroit Music Hall of Performing Arts offers jazz performances as a special attraction. This would include jazz music performances that appeal to a broader audience, as well as jazz performances that appeal to a more specialized audience. Furthermore, they should consider offering jazz music during special events. For example, a jazz club could open during the week-long Monroe Jazz and Blues Festival, which takes place every July.
The developers’ conclusion fails to take into account another potential problem: may be, Monroe’s developers assume that jazz fans are not price-sensitive. Presumably, these developers believe that jazz fans would not be willing to pay as much to attend a jazz club as they would to attend a club that offered a more diverse range of entertainment. However, this assumption is not necessarily true. Jazz fans may be willing to pay more for a unique experience, as long as the experience meets their needs. For example, jazz musicians charge high prices for their services, and are willing to pay a premium for the experience of performing live. Therefore, the jazz club’s developers should take into consideration the fact that jazz fans may be willing to pay a premium price for the experience of attending a jazz club.
The developers’ argument has a number of flaws. First, it fails to consider the potential competition for the jazz club. If the developers are aware of other clubs that cater to Monroe’s population, or to other audiences, then their argument should be revised accordingly. Second, the developers’ argument assumes that jazz fans are not price-sensitive. However, this assumption is not necessarily true. Jazz fans may be willing to pay more for a unique experience, as long as the experience meets their needs. For example, jazz musicians charge high prices for their services, and are willing to pay a premium for the experience of performing live. Therefore, the jazz club’s developers should take into consideration the fact that jazz fans may be willing to pay a premium price for the experience of attending a jazz club. Although the developers’ argument has merit, it should not be used to back their argument that Monroe is an ideal market for a jazz club.