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.

While it is completely true that Bargain Brand Cereal Breakfast have been successful in capturing the market and the main reason attributed to its success being the low price. Other factors such as the quality of the Cereal along with low quality cereal product by other brands may also have been the reason for its success. Thus contemplating the same would happen for other products of the same brand might not hold true,since the success of the said cereal might not have been price only and other factors may have played a role. The success might have been being at the right place at the right time and,a case specific study is required for other products of the brand for the replication of the same success it had with the cereals. Luck if their was might not be always there.

The Bargain Brand cereal breakfast was an instant hit with the consumers can not be only attributed to solely its low price because if that would have been so, the scaled down products from other brands did not affected its profitability as shown in the argument. Had it been the price factor only , the profit would have got affected with other brands foraying in the same segment. Therefore a survey must be undertaken with the Cereals consumer as to what draw them towards it and why they love it so much that they are not moving to other brands with the similar price tag. Answering this question would definitely expand the reason behind the cereal's success.

While the same brand value the Cereal has created for the company might not guarantee the success of other products for the following reason. The products they are thinking of launching say A shake mix, The existing market must be analysed for the same product being offered by other brands and what people's thought about the same. Whether their exist a strong brand for the same product,and if people are willing to try new ones and whether they are satisfied with the existing pricing. Their might be case that the consumers are already satisfied with the price being offered, then we see the low pricing strategy of the Bargain Brand might not take off.

The memo also presents a disturbing analysis of what profit means in terms of business. The company says that they did not needed to raise their price in order to sustain profit even with competitors foraying in the same price range. it does not indicate whether the profits rose, declined or remained stagnant. If the profit declined by say 20% but still above the match point , the growth is getting declined and is a knell , if the trend continues they might start making losses. Hence the argument must present this fact in terms of growth and not profit because 1$ profit is still a profit but not a ideal situation for the company.
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In totality I am not at all convinced the argument because as we have seen it lacks a detailed analysis for the success of the cereals, Also with any new product its planning to launch , case specific study must be conducted as one case might not hold true for other and even if it did , one cannot be certain for sure . Surely Board of directors wont play dice with their business. In summing up their needs to be a analysis of market and then decide what will be the marketing, pricing strategy for the continuation of success.