ARG-055

The following appeared in a memo from the vice president of marketing at Dura-Socks, Inc.

"A recent study of Dura-Socks customers suggests that our company is wasting the money it spends on its patented Endure manufacturing process, which ensures that our socks are strong enough to last for two years. We have always advertised our use of the Endure process, but the new study shows that despite the socks' durability, our customers, on average, actually purchase new Dura-Socks every three months. Furthermore, customers surveyed in our largest market—northeastern United States cities—say that they most value Dura-Socks' stylish appearance and availability in many colors. These findings suggest that we can increase our profits by discontinuing use of the Endure manufacturing process."


Write a response in which you discuss what questions would need to be answered in order to decide whether the recommendation and the argument on which it is based are reasonable. Be sure to explain how the answers to these questions would help to evaluate the recommendation.



In this memo, the author believes that by discontinuing the Endure production method, the profit of the Dura-Sock company can increase. While this may be the case, there are a number of questions regarding his lines of reasoning that requires further analysis. The argument could end up being pretty convincing or invalid in the end, depending on the answers to those questions.


First, the author, based on recent study, believes that consumers, on average, buy socks every three months, and concluded that the durability brought about by the Endure production method is not important to consumers. However, to accurately get a conclusion, we need to question whether the surveyed customers are indeed representative of all customers, especially, whether the respondents were chosen by random sampling. If not, and the respondents were loyal customers who purchase new products from D-S, they will not be able to represent the majority of consumers. At the same time, the study also needs to ensure that the sample size of subjects is large enough. If the sample size is very small, it is likely that there will be some exceptions in results of this study. However, if the above research satisfies the random sampling requirement and the sample size is large enough, the conclusion of this study can be referenced.


Even if the above research subjects are representative of the majority, we still need to know whether buying socks once every three months truly indicates that the durability of socks is not important to customers. We also need to see whether or not socks will be worn again after 3 months. For example, although consumers come to buy socks every three months, they are probably buying new socks for a new season, but seasonal socks can be worn for 2 years. In this case, the durability of socks is an important factor for the consumer when choosing a brand. But if the durability of socks does not matter, the author's argument will be validated.


Meanwhile, the author also cites a survey from a city in the northeast of the United States to further illustrate that durability is not important to consumers. However, However, we still need to know whether the durability of socks is not important to the consumer. For example, consumers are most concerned about color and style, this does not mean, however, that they don’t take durability into consideration. We need to examine the psychological effect the durability of this brand’s socks has on consumers when they are making their selection. If it turns out that the effect durability and style diversity of socks has on consumers is similar, and that both are important characteristics of D-S that consumers pay attention to, then the author's arguments will be weakened. Otherwise, the author’s conclusion will bebolstered.


Of course, even if consumers do not pay much attention to durability, we still need to study the necessity of discontinuing the Endure method. If this process is a necessary part of sock production—which is to say that if the process is stopped, socks won’t be able to be produced—-then even if durability is not crucial to the customer’s decision, it still cannot be stopped for production reasons.


Even if customers do not value the durability of socks, and the Endure production method is not essential to production, we still need to clarify whether or not this discontinuation method can indeed improve profit. For example, stopping advertising for this method does not mean that advertising expenses will be saved, because the company may advertise other characteristics of the socks, which may require a longer period of advertisement. Before a better alternative is found, perhaps the current Endure advertisement scheme is the best solution. However, if there is sufficient evidence to prove that discontinuing the Endure method is really helpful for improving profit, the author's suggestion in the memo would be feasible.


Only after those questions are adequately addressed can we effectively evaluate the author’s argument and reach a logically sound conclusion.


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