A/S Business Studies Homework 4 Feedback

Innocent Drinks

                                                     

Distinguish between quantitative and qualitative market research. Which method did Innocent use at the music festival? [4]

o  Quantitative research means research using pre-set questions among a large enough sample size to provide statistically valid data

o  Qualitative research is in-depth research into the motivations behind consumer behaviour or attitudes

May involve focus groups…

o  Innocent used quantitative research

o  Why????

o  One simple question with only two possible answers

o  Not an in-depth approach

                

To what extent do you agree with the view that a more in-depth approach to market research would have been appropriate before launching Innocent Drinks? [15]

o  Kn /3 Ap /3 An /5 Ev /4

o  Definition…… of market research

'The process of gathering primary and secondary data on the buying habits, lifestyle, usage and attitudes of actual and potential customers'

o  ‘To what extent’ suggests a two sided approach with your judgements for evaluation marks

o  Arguments in favour of more in-depth approach….

o  Possible arguments against…

o  Conclusion in the context of Innocent

A/S Business Studies Innocent Drinks Homework

Homework for 5th November

Revise 1.5 & 1.1 for a timed question in class after half term.

                                           

Visit:  http://uk.ukwon.eu/innocent-smoothie-makers  or click on the picture above.

1) Distinguish between quantitative and qualitative market research. Which method did Innocent use at the music festival? [4]

2) Assess whether a more in depth approach to market research would have been appropriate before launching Innocent Drinks. [10]                                       

A/S Business Homework for Monday 6th February

BUSINESS MATHS
Homework for Monday 6th February

                                     

AQA Business Studies AS

Numerical Revision Sheet

Unit 1 – Planning and Financing a Business

1) Market growth/decline = Increase/decrease in the size of the market  

                                                --------------------------------- x 100

                                                 Original Market value                                                     

Customer numbers and spending at nightclubs, 2007-09

	2014	2015	2016
Sales volume (no. Of customers)	2600	2200	3000
Sales value (revenue rec’d)	£52000	£48400	£63000

Calculate the percentage decline in both volume and value between 2014 and 2015 (to 1 decimal place).

Calculate the percentage growth in both volume and value between 2015 and 2016 (to 1 decimal place).

2)    Market share =                                  Sales of one product/brand/company             

                   -----------------------------      x 100

                    Total sales in the market                                                   

Nightclub attendances, 2016

Nightclub	No. of customers per week	Market share %
Ali’s	450
Guy and Toni’s	750
St. Elmo’s Fire	1200	40
Stephen Fry experience	600	20
All nightclubs

Calculate the market share for the other 2 nightclubs. All 4 clubs should equal 100%.

3)    Profitability and break even

Formulas needed:

Total revenue = price per unit x quantity of units sold

Profit = total revenue – total cost

Total cost = Fixed cost + Total variable cost

Total variable cost = Variable cost per unit x quantity produced

Complete the following table for Radfast Ltd.

Fixed costs = £4000  Variable cost = £4 per unit    Selling price = £6 per unit

Units of output	Total revenue	Fixed costs	Variable costs	Total costs	Profit
0
1000
2000
3000
4000
5000

           

 4) Break Even =           Fixed costs  

                                                           --------------

                                                  Contribution per unit (selling price per unit – variable cost per unit)

a) Using the above data calculate the break-even point.

b)If the selling price increased by 10% what would be the new break-even point?

c) If the variable costs increased by 15% what would be the new break-even point?

5)    Cash-flow

Formulas:

Net cash flow = cash inflow – cash outflow

Closing bank balance = opening cash balance + net cash flow      

Complete the cash flow forecast in the table based on the following data.

Sales income is expected to be £36000 in month 1 and £40000 in month 2.

Raw materials will cost 25% of the forecast sales income in each month.

Wages will be £ 10700 each month.

Other costs will be £ 12200 in month 1 and £3800 in month 2.   

	Month 1	Month 2
Opening balance	6800
(a) Sales income/total inflows
Raw materials
Wages
Other costs
(b) Total outflows
(a-b) Net cash flow
Closing balance

A/S Business Homework

The Tapas Bar

Hannah and Jonathan discovered the idea of a tapas bar whilst on a business trip to Barcelona.  They both had secure, well-paid jobs working for a leading insurance company.  One evening, their Spanish colleagues had taken them to a tapas bar.  Hannah and Jonathan noticed how popular the bars were with both city workers and tourists and thought that a tapas bar could be successful in their home of Leeds.

When they returned home, Jonathan conducted some secondary research. He found out that the market value for the UK restaurant market was £13.25 billion.  This represented a market growth of 19% in the past four years.  Furthermore, he contacted the Leeds Chamber of Commerce, who informed him that the Leeds economy was one of the fastest growing in the UK.

Hannah interviewed some of her work colleagues regarding the idea of a tapas bar. Their response was enthusiastic as they were always looking for ‘something different’ either for lunch or in the evening.

Hannah and Jonathan were convinced that their idea could be a success, so they contacted their local bank.  They spoke to a small business advisor who discussed with them what to include in their business plan.  She also recommended that the business should be a private limited company (ltd).

Hannah and Jonathan planned to spend £200,000 on the tapas bar.  They would contribute £30,000 from their own savings and borrowed the remaining £170,000 from the bank, using their home as security for the loan.

A location was chosen near the Corn Exchange in Leeds city centre.  Although the rent was expensive, there were plenty of restaurants nearby and the location was accessible for both shoppers and city workers.  Hannah’s research led them to believe that an average customer would spend £20.  She estimated that the variable costs per customer would be £10 and the weekly fixed costs £2,000.

The small business advisor had recommended that Hannah and Jonathan needed to set a budget.  Jonathan used Hannah’s primary research findings, combined with some population statistics from the Leeds Chamber of Commerce to calculate the expected income.  To calculate his expenditure, he obtained some cost data from a friend who ran an internet café.

Hannah and Jonathan gave up their jobs and hired a full-time chef and two part-time waitresses.  Despite all their planning, the business struggled during its first weeks of trading.  A rival tapas bar had opened a month earlier and had captured the market.  As a consequence, the business was earning insufficient revenue to cover its costs.  Consequently, the figures for their budget were wildly inaccurate.  Furthermore, one of their suppliers proved to be unreliable, which meant that on many occasions a full menu could not be offered.  Whilst conducting his research, Jonathan had discovered that one in every two restaurant start-ups fail – was the tapas bar heading the same way?

1.    The UK restaurant market is worth £13.25 bn. If it is expected to grow by 5% next year calculate its market value. [4]

2.    To what extent do you think a good location for Hannah and Jonathan’s restaurant is likely to guarantee business success? [15]

The Tapas Bar - Homework Feedback

To what extent do you think a good location for Hannah’s and Jonathan’s restaurant is likely to guarantee business success. [15]

What should your answer look like?

• Definition
• 2 / 3 substantial paragraphs explaining why the right location is important. (In the context of the Tapas Bar)
• 2 / 3 substantial paragraphs explaining why other factors are important.  (In the context of the Tapas Bar)
• A concluding paragraph. (In the context of the Tapas Bar)

Always start with a definition:

Business location involves (in this case) the physical premises where trading occurs.

Sample paragraph:

A key to the success of the Tapas Bar is an accessible location. The fact that they decided to locate close to the city centre meant that city workers and shoppers would not have to walk far to the restaurant.

↓

This is important because the Tapas Bar is very likely to rely on passing trade. Customers are not likely to walk for miles and so being close to the city centre will increase the number of potential customers.

↓

Being close to a number of other restaurants may make their chosen location a lunchtime or evening ‘destination’ for those wishing to eat out. This is important to the Tapas Bar because high ‘footfall’ in an area is key to attracting customers. If Hannah and Jonathan ensure that the restaurant looks welcoming they should benefit from hungry workers or shoppers visiting the area.

Conclusion:

In this paragraph you explain that location is obviously important but is not the sole factor to determine the success of a restaurant. Other factors that you might mention include the quality of the food, the customer service, reputation or even cleanliness.

A/S Business Studies Homework 3 Feedback

Dave's Health Food Shop

4] Dave’s bank manager believes that the identification of a market niche will increase Dave’s chances of success. To what extent do you agree with this view? (15 marks)

Always start with a definition:

Niche marketing is a strategy based on identifying and filling relatively small market segments.

In this case Dave Murphy wanting to set up a health food shop in Westleigh.

What should a good answer 'look like'?

1. Opening brief paragraph with a definition.

2. Two substantial paragraphs giving the advantages of Dave opening in this niche market.

3. Two substantial paragraphs giving disadvantages.

4. Concluding paragraph with your judgement.

Example paragraph:

If Dave successfully identifies a niche market for health food in Westleigh he may secure a solid market position.↓

↓

This is because consumers see his health food shop as the original and superior. This will be especially true if Dave has spent time building up a base of loyal customers.

↓

This is important for Dave because if others see the success of the business they may be tempted to open a rival store. With Dave having a solid reputation, regular customers and a recognised position in the community the rival company is very likely to struggle to gain market share.

↓

A consequence of this is that Dave has the opportunity to grow the business with less risk because of the lack of competition.

Your turn:

A second benefit of targeting a niche market is that customers may be willing to pay a price premium for a more exclusive product.

Can you add three arrows?

Concluding paragraph:

In conclusion I feel that the most important point is.............

This is because...................