ARG-104

The following memorandum is from the business manager of Happy Pancake House restaurants.

"Butter has now been replaced by margarine in Happy Pancake House restaurants throughout the southwestern United States. Only about 2 percent of customers have complained, indicating that an average of 98 people out of 100 are happy with the change. Furthermore, many servers have reported that a number of customers who ask for butter do not complain when they are given margarine instead. Clearly, either these customers cannot distinguish butter from margarine or they use the term 'butter' to refer to either butter or margarine. Thus, we predict that Happy Pancake House will be able to increase profits dramatically if we extend this cost-saving change to all our restaurants in the southeast and northeast as well."


Write a response in which you discuss what questions would need to be answered in order to decide whether the prediction 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 prediction.


In this memorandum, the writer states that after Happy Pancake House restaurants, in an effort to cut back on expenses, has switched from butter to margarine in their southwestern restaurant locations, there have been few customer complaints, therefore it is recommended that they implement this change in their southeast and northeast restaurant locations in order to increase profitability. Before this change is implemented, however, there are a few questions that should be taken into consideration.


To begin with, the writer of the aforementioned memorandum states that only 2 percent of customers have complained, indicating that 98 percent of the customers are content with the change. A question that needs to be posed in relation to this piece of information is whether or not this 2 percent of dissatisfied customers can accurately portray the dissatisfaction of all of the restaurant’s customers. As the writer states, only 2 percent of customers have complained;however, questions arise when dissatisfied customers who haven't complained are taken into consideration. If there is a significant number of customers who aren't satisfied with the change, but aren’t dissatisfied to an extent where they feel it necessary to verbally complain, should the restaurant chain place faith in the writer’s claim that only 2 percent of the customers are opposed to the change? If more than 2 percent of customers are unhappy with the change but aren’t willing to express said dissatisfaction in a verbal manner, then implementing the above mentioned claim in restaurant locations across the nation without further consideration in respect to their customers may prove to be hasty and ungrounded, the restaurant may, in turn, lose more customers and profit, and the writer’s claim would lose persuasiveness.


Second, even if the 2 percent of customers who asserted their dissatisfaction in the form of verbal complaints is representative of all of the customers dissatisfied with the change from butter to margarine, we still need to ask whether what the waiters and waitresses have been reporting is objective or not. Should we believe the waitstaff’s report that customers are unable to detect a difference between butter and margarine, or should we ask the customers directly before coming to a final decision? If the waitstaff is relaying incorrect information to the owners, and the customers can perceive a difference in between butter and margarine and they’re simply not informing the waitstaff, then the restaurant owner’s final decision would need to be resynchronized in relation to the true opinions of the customers, and the writer’s assumption would lose strength.


Furthermore, even if the customers can discern a difference between butter and margarine, the waitstaff is honestly relaying customer opinions to the company, and all dissatisfaction towards the condiment shift is manifested in the 2 percent statistic provided by the writer, we still must question whether or not a change from butter to margarine would be as accepted by and suited to customers at the other restaurant locations in the southeast and northeast locations. Customers in other parts of the country may have different gastronomic preferences, and they may prefer butter to margarine. In another vein, customers who have never tried margarine before may be wary of a sudden shift from a condiment they once were familiar with, and they, therefore, may not appreciate or support the shift to a foreign substance. If this were to be the case, then the restaurant chain could potentially lose more than they would gain by making a shift from butter to margarine, and the writer’s proposed recommendations would wane.


Lastly, even if customers in other restaurant locations would be willing to accept the change from butter to margarine, we still need to ask whether or not the price of margarine will remain constant in years to come. The restaurant chain’s primary reason behind the change in condiments is to, as noted in the memorandum, avoid the expense of purchasing butter and to increase profitability. While this is a sound source of motivation, prices of butter and margarine are susceptible to change and fluctuation, as prices seldom remain constant over long expanses of time. If after the company introduces margarine in all of their restaurant locations the price of margarine starts to increase at a rate faster, or an increment steeper, than that of butter, or if the price of butter begins to decrease, then the restaurant owners would end up spending more money on margarine than they would have on butter, and the writer’s original claim would be invalidated.


To conclude, although the reasons behind Happy Pancake House’s shift from butter to margarine are economically based, there still remain questions that need to be thoroughly considered and answered before further action is taken, for example customer satisfaction levels, veracity of information relayed by the waitstaff, customer demographic and preferences, and, finally, cost sustainability of margarine. The answers to the above questions will be beneficial to the future success of the restaurant chain.



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