EBM N4 June 2015 | Paper 1

Entrepreneurship and Business Management N4

EBM N4 June 2015 | Paper 1

Question 1

Give ONE word/term for each of the following descriptions.

1.1 They have a higher than normal price to create an image of exclusivity.

Exclusive shops
These are shops that create a premium image through higher prices and exclusivity.

1.2 It distinguishes a product from similar competitive products.

Speciality products
These are products with a distinct identity that stand out from competing products.

1.3 That something that your business should have is unique, and which your competitors do not have.

Competitive advantage
This is the special strength or uniqueness that makes your business stronger than competitors.

1.4 Establish the proportion or number of customers in an area.

Geographic segmentation
This groups customers according to area or location.

1.5 Is appointed by the owner of an existing business enterprise to manage the business.

Intrapreneur
This is a person who manages or drives business activity within an existing enterprise.

1.6 The point at which the total expenditure of the business is equal to the total income.

Break-even point
At this point the business makes neither a profit nor a loss.

1.7 The idea is to gain quick acceptance and extensive distribution in the market.

Penetration
This refers to entering the market quickly and widely, usually to build a customer base fast.

1.8 The cost that you incur prior to opening your doors and making sales provide a cash flow.

Pre-operating costs
These are costs incurred before the business starts trading and making sales.

1.9 Products are purchased only after customers have compared a variety of similar and competitive products.

Shopping product
This is a product customers compare carefully before buying.

1.10 The most common instrument for collecting primary data.

Surveys
Surveys are commonly used to collect information directly from people.

Question 2.1

Indicate whether the following statements are TRUE or FALSE.

2.1.1 Natural resources are classified as an asset of the business.

True
Natural resources can form part of the resources owned or controlled by the business, so they are treated as assets.

2.1.2 Demographic segmentation refers to the areas of residence.

False
Areas of residence relate to geographic segmentation, not demographic segmentation.

2.1.3 Legal-entity requirement is the way your business is registered in terms of the tax authorities and courts of law.

True
This is about the legal registration and recognition of the business.

2.1.4 The remuneration policy is a component of marketing.

False
Remuneration policy relates to payment of employees, not the marketing function.

2.1.5 Shareholders receive dividends after the company announces its profits.

True
Dividends are payments shareholders may receive from declared profits.

2.1.6 A slogan is a clever phrase or sentence that says something good about a product.

True
A slogan is a short memorable phrase used to promote a product or business.

2.1.7 A market is one of the methods of protecting your idea.

False
A market is a place or environment for buying and selling, not a method of protecting an idea.

2.1.8 The trade journals are products for a specific industry or sector.

False
Trade journals are publications or information sources, not products.

2.1.9 People who owe you money are creditors.

False
People who owe the business money are debtors. Creditors are the people the business owes.

2.1.10 Sales scenarios help the financial-feasibility study in a business.

True
Sales scenarios help estimate expected income and therefore support financial feasibility.

Question 2.2

Give THREE reasons why entrepreneurs are unsuccessful. (6)

Management incompetence
Poor management can lead to weak decisions, poor organisation, and business failure.

Lack of experience
Inexperience makes it harder to handle business challenges properly.

Poor financial control
Weak control over money can cause cash-flow problems, overspending, and losses.

Question 2.3

What do the FOUR P’s of marketing stand for? (4)

Price
This is the amount charged for the product or service.

Product
This is the good or service offered to customers.

Promotion
This is how the business communicates and advertises the product.

Place
This is where and how the product is made available to customers.