,MNE3701 Assignment 4 (COMPLETE ANSWERS)
Semester 2 2024 - DUE 11 October 2024; 100%
TRUSTED Complete, trusted solutions and
explanations.
Having acquired sufficient knowledge and skills on financial
management for small business, you must demonstrate
practical competencies in constructing financial statements and
in conducting feasible financial forecasting. As a new
entrepreneur understanding financial management and
accounting, forms an integral part of running your small
business. In addition, you should also be able to forecast the
financial outcomes that could result from your decision. The
projections of business’s profits, its assets and financial
requirements, and its cash flows are essential in determining
whether your business is economically viable. Having acquired
sufficient knowledge and skills on entrepreneurship and small
business management, you must demonstrate practical
competencies in applying a pricing system and promotional
planning. Think of any business you would like to start and
answer the following questions: QUESTION 1 By using practical
examples, critically discuss how you would applying a pricing
system in your business. (10)
To apply a pricing system in my business, let's imagine I am
starting a small bakery named "Sweet Treats Bakery,"
specializing in custom cakes, pastries, and artisanal bread. The
, pricing system in any business directly impacts its profitability,
market competitiveness, and customer perception. When
establishing a pricing strategy for "Sweet Treats Bakery," I would
consider the following key aspects:
1. Cost-Based Pricing
The foundation of pricing involves understanding all the costs
associated with producing my baked goods. This includes direct
costs such as ingredients (flour, sugar, eggs, etc.) and indirect
costs like rent, utilities, labor, and packaging. The pricing for
each product would be calculated by adding up all these costs
and applying a mark-up to ensure a profit margin.
For example:
The cost to produce one loaf of artisanal bread is R20
(ingredients + labor + utilities). If I apply a 50% mark-up to
cover operational expenses and achieve a profit, I would
price the bread at R30 (R20 + 50% = R30).
2. Market-Oriented Pricing
To stay competitive, I would analyze the pricing of similar
businesses in the local area. For instance, if competitor bakeries
are charging between R28 and R35 for artisanal bread, I would
set my prices within that range. This approach ensures that I
attract price-sensitive customers while remaining competitive.
For premium or unique products like custom cakes, I could
charge higher based on the value perceived by the customer.
For example:
Semester 2 2024 - DUE 11 October 2024; 100%
TRUSTED Complete, trusted solutions and
explanations.
Having acquired sufficient knowledge and skills on financial
management for small business, you must demonstrate
practical competencies in constructing financial statements and
in conducting feasible financial forecasting. As a new
entrepreneur understanding financial management and
accounting, forms an integral part of running your small
business. In addition, you should also be able to forecast the
financial outcomes that could result from your decision. The
projections of business’s profits, its assets and financial
requirements, and its cash flows are essential in determining
whether your business is economically viable. Having acquired
sufficient knowledge and skills on entrepreneurship and small
business management, you must demonstrate practical
competencies in applying a pricing system and promotional
planning. Think of any business you would like to start and
answer the following questions: QUESTION 1 By using practical
examples, critically discuss how you would applying a pricing
system in your business. (10)
To apply a pricing system in my business, let's imagine I am
starting a small bakery named "Sweet Treats Bakery,"
specializing in custom cakes, pastries, and artisanal bread. The
, pricing system in any business directly impacts its profitability,
market competitiveness, and customer perception. When
establishing a pricing strategy for "Sweet Treats Bakery," I would
consider the following key aspects:
1. Cost-Based Pricing
The foundation of pricing involves understanding all the costs
associated with producing my baked goods. This includes direct
costs such as ingredients (flour, sugar, eggs, etc.) and indirect
costs like rent, utilities, labor, and packaging. The pricing for
each product would be calculated by adding up all these costs
and applying a mark-up to ensure a profit margin.
For example:
The cost to produce one loaf of artisanal bread is R20
(ingredients + labor + utilities). If I apply a 50% mark-up to
cover operational expenses and achieve a profit, I would
price the bread at R30 (R20 + 50% = R30).
2. Market-Oriented Pricing
To stay competitive, I would analyze the pricing of similar
businesses in the local area. For instance, if competitor bakeries
are charging between R28 and R35 for artisanal bread, I would
set my prices within that range. This approach ensures that I
attract price-sensitive customers while remaining competitive.
For premium or unique products like custom cakes, I could
charge higher based on the value perceived by the customer.
For example:
