The following appeared in a memo to the board of directors of Bargain Brand Cereals."One year ago we introduced our first product, Bargain Brand breakfast cereal. Our very low prices quickly drew many customers away from the top-selling cereal companies.

The writer of the memo to the board of directors asserts that Bargain Brand Cereals is successful due to its low price on its products; consequently to increase profit, the company needs quickly introduce new products with low-prices. To evaluate the soundness of the author's conclusion we need to take a closer look at assumptions on which the argument is based such as that the low-price is the main factor which lures customers from the rival companies, that repetition of the action will lead to similar success with other products, and that introduction of new low-cost products is the best way to increase company's profitability.

The central assumption of the argument is that Bargain Brand Cereals has become successful due to low-price on its product. However, several possible factors may impact on attractiveness of the company's product. It is essential necessity to know the reason who customers prefer cereals produced by Bargain Brand over its rivals. Despite the fact that price is a significant factor which probably impacts on product's attractiveness, it may not be only one. For instance, if the company does not use any preservatives or any chemical elements to improve taste of the product the buyers may prefer this product over alternative choices. Maybe some medical experts have given a good feedback on the Bargain Brand Cereals on TV show or in mass-media. To learn about actual reasons of success is a basic requirement to preserve its level of selling, consequently, the company may carry out a research which should comprehensively interview people who buy or avoid buying.

Secondly, the author of the argument assume that the company will have success if it will introduce new low-cost product. However, the introduction of new product should be a thoughtful action which require a comprehensive studying of market. For instance, if a company wants to introduce low cost bread. It is possible that the market has already had a product with similar characteristics, in this case, the company may face a stiff competition from the rival company from the beginning. What is more, it is possible the low-price is a main factor which stimulate people buy cereals of the Bargain Brand. However, customers may use alternative criteria for other products, for instance, for dairy products it may be its freshness or per cent of fats, for vegetables the factor perhaps where they were grown and do they organic or not . consequently, to be successful with new product company needs to conduct studies which will give an objective picture of the market and customers' preferences.

In conclusion, the author of the argument asserts that introduction of new product for low-cost by Bargain Brand Cereals will increase its profit, however, as we have demonstrated, the company needs to conduct a serial of researches in order to avoid superfluous expenditures and increase possibility of success with new products
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