158. The following appeared in a memo from the marketing director of Top Dog Pet Stores."Five years ago, Fish Emporium started advertising in the magazine Exotic Pets Monthly. Their stores saw sales increase by 15 percent. The three Fish Emporium stores i

In this memo, the author argues that the increase in the sales of Fish emporium can be directly attributed to their advertising in Exotic Ads and further, if Top Dog follows this approach it too would be able to replicate high profits. This argument clearly overlooks the details of growth and profitability dynamics and therefore does not present a cogent case.

The sales of Fish Emporium have increased over the subsequent years. It is possible that this increase is due to overall improvement in their management and functioning. The demand for fish pets may have themselves improved as people explore newer options for pets against the conventional pets for e.g. Dogs. If this is the case better advertising won’t be able to convince people to get pets from Top Dog. Also, better profits in Gulf city for Fish emporium would simply mean reduced transportation costs for them due to their proximity to the ocean. It is evident that this added demographic advantage would hold no significance for Top Dog.

Even if the Exotic Ads advertising has a positive impact on the sales numbers, it does not warrant the same success for Top Dog. The Exotic Ads may be read by a niche high profile section of the society which is interested in upping their glamorous quotient by buying exotic species of pets that Fish emporium provides. On the other hand, Top Dog may not cater to such readers and market high quality breeds. It would then be a wasted effort. To ensure that the money that Top Dog spends on advertising has desired benefits they should be conscious of the population segment they are targeting.

Irrespective of the above fallacies if Top Dog invests in Exotic Ads they may not reap the desired profits. The additional cost would further dent their profit margin at a time when they already struggling with declining sales. The actual reason for their decreased sales could be inefficient management and unnecessary overheads that are eating into their revenues. They should spend their energy and time on figuring out the exact cause of decline and further, decide a course of action which again has real data to support its merits.