Question 1 (Marks: 25)
Q.1.1 Create a fictitious Business/Product idea, follow the instructions below and answer the questions to follow.
- You cannot use an existing Brand or Company. However, the actual product/service offering does not have to be an innovation. For example, you can choose to create a branded bakery as a business.
- If you were required to create a business idea as a task/question in another module/exercise or assessment, you cannot repeat the same product idea for this assessment.
- The questions in this assignment require the business to have a product, therefore the business cannot be a service alone (for example, if you choose a car wash as a business, you must also sell related products).
Q.1.1.1 State the name of the business and explain how the name is linked to the product. (You may research ideas that can be used as a brand name; however, you must adapt those ideas to make it original and you must acknowledge those sources in the reference list). (4)
Q.1.1.2 Description of the main product (and service, if relevant) to be sold.
(Hint: Describe the customer need your product is going to meet and then describe how the product is designed to meet this need.) (3)
Q.1.1.3 Describe your product’s competitive/differential advantage. (Hint: explain specific attributes or offerings that make your product better than the competitors). (3)
Q.1.1.4 Describe the customers targeted by your business, by describing the following about the customer: gender, age groups, geographic regions, and income level: (lower, middle, higher). (5)
Q.1.2 List and describe the impact of any four Macro-Environmental variables on your business. (10)
The questions to follow are based on the business/ product you created in Question 1.1.
Question 2: Selecting the “right” customers (Marks: 20)
Q.2.1 Consider the customers you chose to target as described in Q.1.1.4 above and answer the question to follow:
Select two relevant Behavioural segmentation variables applicable to your product and selected customers. Explain your choice. (4)
Q.2.2 Select a targeting strategy most suitable for your product idea. Explain your choice. (6)
Q.2.3 Select a positioning strategy most suitable for your product idea. Explain your choice. (5)
Q.2.4 There are three types of customer decision-making processes, Real, Impulse and Habitual. Select the type most applicable to your product. Explain your answer. (5)
Question 3: Refining the product decisions (Marks: 20)
Q.3.1 A product has five distinct layers, namely: core, tangible, augmented, potential and the product image. Explain each layer and explain how it applies to your product.
(Hint: when discussing the augmented level, link this level to your answer to
Q.1.1.4: competitive/differential advantage) (15)
Q.3.2 There are several types of packaging to use for a product. Select the packaging best suited to your product and explain your choice. (5)
Question 4: Setting the right price (Marks: 35)
Q.4.1 When introducing a new product to the market, there are two main pricing strategies: Market Skimming or Market Penetration. At the launch of your product, state which pricing strategy you would choose? Explain why it is best suited to your product. (3)
Q.4.2 Explain the six steps of the price setting process, in your own words.
Marks will not be awarded for answers that have not been paraphrased and you may be flagged for plagiarism even if the verbatim answer is referenced. Paraphrasing refers to expression of understanding in your own words. It is not simply substituting words from the original source. (12)
Q.4.3 Write an essay on the following topic:
“Ethical issues when setting prices in South Africa.”
The essay must explain the ethical issues to consider when setting prices in South Africa. Use the rubric on the next page and the mark breakdown below to guide you on how to write your essay. You must use an additional source other than the textbook. To avoid plagiarism, you must paraphrase your answer and reference them correctly. No marks awarded for verbatim answers. (20)
Answers to Above Questions
Answer 1) 1.1: This section of analysis focuses on creating a fictitious business and includes a description on the main product offered by the selected business and the competitive advantage offered to the customers. The target market analysis is also carried out with the objective of evaluating the target customers of the company. Finally an assessment of the external environment impacting the business is also carried out by way of considering the important macro environmental variables. In performing the analysis, the fictitious business as selected is that of selling electronics items and the products include ……
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