ARG-070

The following appeared in an e-mail sent by the marketing director of the Classical Shakespeare Theatre of Bardville.

"Over the past ten years, there has been a 20 percent decline in the size of the average audience at Classical Shakespeare Theatre productions. In spite of increased advertising, we are attracting fewer and fewer people to our shows, causing our profits to decrease significantly. We must take action to attract new audience members. The best way to do so is by instituting a 'Shakespeare in the Park' program this summer. Two years ago the nearby Avon Repertory Company started a 'Free Plays in the Park' program, and its profits have increased 10 percent since then. If we start a 'Shakespeare in the Park' program, we can predict that our profits will increase, too."


Write a response in which you discuss what questions would need to be answered in order to decide whether the recommendation is likely to have the predicted result. Be sure to explain how the answers to these questions would help to evaluate the recommendation.


According to the email, the marketing director of the Classical Shakespeare Theatre (CST) of Birdville argues that by initiating a’ Shakespeare in the Park’ program to increase profits. He reached this conclusion because two years earlier, the nearby Avon Repertory Company (ARC) had started a ‘Free Plays in the Park’ program, which had resulted in a 10% increase in profits. Although the author’s argument is reasonable to some extent, there are many questions that need to be answered to evaluate the author’s conclusion more fully.


The first question I am going to ask relates to the real factors that contributed to ARC’s profit increase. Although the author mentions in the email that ARC saw a 10% increase in profits after opening the ‘Free Plays in the Park’ program, the fact that the two events occurred at the same time does not necessarily indicate a causal relationship. There are many other factors that could have contributed to ARC’s profit increase, such as the fact that ARC simply lowered the ticket prices of its regular shows, thus attracting more viewers and thus boosting its profits, rather than relying solely on the free-to-play model. In addition to this, it is also possible that ARC has improved the quality of its shows, resulting in greater word-of-mouth publicity, which in turn saves marketing costs and thus increases profits. Lastly, ARC could also adjust its shows to perform more popular shows, which would also increase revenue for ARC. If either of these scenarios were true, then the author’s conclusion would be weakened. However, if it turns out that ARC did not make other changes while starting the ‘Free Plays in the Park’ program, then we can attribute ARC’s increased profits to the ‘Free Plays in the Park’ program, and the author’s conclusion would be reinforced.


Secondly, even if ARC’s profits did rise because of the ‘Free Plays in the Park’ program, could CST follow ARC’s example and hold plays in the park? More specifically, are local audiences equally receptive to CST and ARC programming? Unfortunately, the answer may be negative. The ARC’s programs themselves may be easy to understand and can easily be appealed to by visitors who visit the park. By contrast, CST’s Shakespeare plays are likely too non-mainstream in comparison to the ARC’s to attract large audiences they do. If this were true, CST following the ARC’s lead and holding free Shakespeare plays in the park would be unfeasible and unnecessary, thus weakening the author’s conclusion. However, if the local audience is highly educated and can easily embrace Shakespeare’s plays, then CST would be justified in following ARC’s example, and therefore the author’s conclusion would be strengthened.


Third, in addition to the questions discussed above, we also need to know if CST’s profits are actually declining. Although the author mentions that the average audience per CST production has declined, has the total number of people declined? If the average number of viewers per show declines, but CST runs more shows, it is possible that the total number of viewers is unchanged or even growing. If that were true, then the author’s conclusion would be weakened. Furthermore, even if CST’s total audience did decline, did profits decline? As we know, a company’s profits are affected by both revenues and costs. From the revenue point of view, even if the total number of viewers decreases, CST can still increase its revenue by raising ticket prices or improving the quality of its programs. In addition, from a cost perspective, CST can reduce its marketing expenses by cutting advertising expenditures and thus increase its profits. If the above scenario is feasible, then ‘Shakespeare in the Park’ as proposed by the author is unnecessary, and the author’s conclusion is weakened. However, if initiating the ‘Shakespeare in the Park’ project is the only solution to increase CST’s profits, the author’s conclusion is strengthened.


In summary, while the author’s recommendation may be valid to some extent, there are many questions regarding his lines of reasoning that require further analysis. The argument could end up being pretty convincing or invalid in the end, depending on the answers to those questions.




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