EBM N4 | Essential Revision Guide 1

EBM N4

Question


Various options are given as possible answers to the following questions. Choose the answer that does not fit

Question:
Characteristics of an entrepreneur:
A. Achievement
B. Energy
C. Occupation

The correct answer is C. Occupation.
Achievement and energy are traits commonly associated with entrepreneurs, as they drive success and motivation. Occupation, however, refers to a job or profession and is not a characteristic of an entrepreneur’s personality or behavior.


Question:
Examples of convenience goods:
A. Staple products
B. Impulse products
C. Shopping products

The correct answer is C. Shopping products.
Staple products (e.g., bread) and impulse products (e.g., candy) are convenience goods purchased frequently with minimal effort. Shopping products (e.g., electronics) require comparison and planning, making them a different category.


Question:
Examples of legal documents:
A. Location of business
B. Legal formalities
C. Taxation

The correct answer is A. Location of business.
Legal formalities (e.g., contracts) and taxation documents are legally binding. The location of a business is a physical attribute, not a document.


Question:
Costs incurred when producing products:
A. Fixed costs
B. Startup costs
C. Variable costs

The correct answer is B. Startup costs.
Fixed costs (e.g., rent) and variable costs (e.g., materials) are ongoing production expenses. Startup costs are one-time initial expenses, not directly tied to ongoing production.


Question:
Methods used to promote a new product in the market:
A. Validation
B. Customer service
C. Demonstration

The correct answer is B. Customer service.
Validation (testing demand) and demonstrations showcase the product. Customer service supports post-purchase satisfaction but doesn’t directly promote the product initially.


Question:
Promotional strategies:
A. Layout
B. Delivery
C. Pricing structure

The correct answer is A. Layout.
Delivery and pricing structure are part of marketing strategy. Layout refers to store design, which is operational, not a promotional tactic.

Question


Briefly discuss the economic importance of an entrepreneur with reference to the South African context.

Entrepreneurs serve as vital drivers of economic development, particularly in South Africa. Below are the important roles entrepreneurs play in the South African Economy:

Entrepreneurs Create Jobs
Entrepreneurs are key drivers of job creation in South Africa’s challenging economic environment. With unemployment rates exceeding 30%, the establishment of new businesses plays a vital role in providing employment opportunities across various sectors. Whether it’s through innovative tech startups in urban centers or local spaza shops in townships, entrepreneurial ventures create jobs in areas where formal employment is scarce. Each new business offers potential livelihoods for individuals and families, helping to alleviate the country’s unemployment crisis.

Entrepreneurs Develop the Country
Entrepreneurs are instrumental in the development and growth of South Africa’s economy. They establish new industries, introduce groundbreaking products and services, and modernize traditional sectors. This process of economic diversification reduces the country’s dependence on commodity-based industries, fostering a more balanced and resilient economy. Through these efforts, entrepreneurs not only help build new industries but also bring essential services to communities that were previously underserved.

Entrepreneurs Give the Country Hope for a Better Future
Beyond their economic contributions, entrepreneurs provide hope for a brighter future. In communities where economic opportunities may seem limited, successful business owners serve as living proof that progress is possible. Their achievements inspire others to pursue entrepreneurial ventures, creating a ripple effect of opportunity and economic activity. This sense of possibility is essential in motivating future generations of business leaders, encouraging them to innovate and contribute to South Africa’s economic growth.

Entrepreneurs Start the Process of Production and Use Labour
Entrepreneurs are at the heart of productive economic activity. By identifying market needs and organizing resources effectively, they kick-start the production process, turning raw materials into valuable goods and services. This process is essential for maximizing the use of labor and capital, particularly in regions where resources are underutilized. Entrepreneurs’ ability to create productive systems lays the groundwork for sustainable economic growth, benefiting communities and driving development.

Entrepreneurs Generate Wealth and a Higher Standard of Living
Entrepreneurs generate wealth that has far-reaching benefits for their communities. Successful businesses not only create personal wealth for owners but also increase tax revenues that contribute to public services and infrastructure. The flow of money within local economies fosters further growth, while competitive markets drive innovation, improve products, and make them more affordable. Over time, entrepreneurial success contributes to lifting communities out of poverty and raising the overall standard of living for all.

Question

Name the personal resources of a successful entrepreneur.

A successful entrepreneur relies on various personal resources to establish and grow a business. These resources provide the foundation for effective decision-making, problem-solving, and business sustainability. The key personal resources of a successful entrepreneur are:

Knowledge and Skill
A successful entrepreneur must possess both industry-specific knowledge and essential business skills. Expertise in their field enables them to make informed decisions and adapt to changing market conditions. In addition, skills such as financial management, marketing, and problem-solving are vital for running operations efficiently. These abilities help entrepreneurs navigate challenges, optimize business processes, and ultimately drive growth and success.

Contacts
Building a strong professional network is a key resource for any entrepreneur. Strong relationships with suppliers, customers, mentors, and other business professionals provide valuable support and open doors to new opportunities. A well-established network not only facilitates business growth but also offers access to resources, advice, and potential collaborations that contribute to the long-term success of the business.

Funds
Access to sufficient financial resources is essential for starting and maintaining a business. Entrepreneurs need adequate capital to cover initial startup costs, manage day-to-day operations, and invest in growth opportunities. In addition, having funds available ensures they can navigate unforeseen challenges, such as economic downturns or unexpected expenses, without jeopardizing the sustainability of the business.

Question.


Name and explain five types of packaging.


Packaging plays a crucial role in product presentation, protection, marketing and also influences purchasing decisions. Below are five types of packaging commonly used by business.
1, Family Packaging.
Family packaging refers to the practice of designing all products within a particular brand or product line to have similar packaging, creating a unified, consistent, and easily recognizable identity. The goal is to ensure that customers can instantly identify the brand across different products.

For example, Coca-Cola offers a variety of beverages, such as Coca-Cola, Diet Coke, and Coca-Cola Zero, all of which use the same logo, color scheme, and bottle shape. This consistent packaging design helps customers quickly identify the brand across different types of drinks.

2, Individual Packaging
Individual packaging is when each product is packaged in a way that makes it stand out from other products, often with unique design features that distinguish it from competitors. This packaging is crafted to be distinctive and eye-catching.
A luxury perfume like Chanel No. 5 comes in a beautifully designed box with exclusive artwork and a distinctive bottle shape. This individual packaging makes the product unique, appealing, and easy to recognize, especially in the crowded fragrance market.

3, Reusable Packaging.
Reusable packaging refers to containers that are designed to be used more than once. After the product has been consumed or used, the packaging can be repurposed for other purposes, promoting sustainability and reducing waste.
Nutella uses glass jars for its spread, which can be reused by consumers for storage, crafts, or as containers for other items. This type of packaging encourages consumers to repurpose the jar instead of discarding it, promoting an environmentally friendly approach.

4, Multiple Packaging.
Multiple packaging involves grouping several individual products together in one package, often to encourage bulk buying, offer a discount, or improve convenience. This type of packaging can benefit both the consumer and the business.
Nestlé may package several KitKat bars together in a single wrapper. This offers convenience for customers looking to purchase multiple bars at once and often provides a discount compared to buying each bar separately, benefiting both consumers and the company.

5, Kaleidoscope Packaging.
Kaleidoscope packaging involves using the image of famous people, celebrities, or athletes on product packaging to attract attention and create demand. This strategy leverages the popularity of celebrities to make the product more appealing to consumers.
For instance, Pepsi has released limited-edition cans featuring the images of celebrities like Beyoncé or Michael Jackson. These celebrity-themed packages generate excitement, attract attention, and help increase sales by associating the product with popular public figures.

Choose ONE term from the list below for each of the following descriptions

Fixed costs; competitive advantage; variable costs; gross profit; selling price; break-even analysis; organising; planning; geographic segmentation;
debtors’ ledger; general ledger; sales promotion; marketing mix; close

Question: Costs that vary every month.

The correct answer is Variable costs. These are costs that change depending on the level of production or sales, such as electricity, raw materials, and wages for hourly workers.

Question: Turnover of the business.

The correct answer is Gross profit. This is the total revenue a business earns after subtracting the cost of goods sold but before deducting other expenses like rent and salaries.

Question: Costs that stay the same.

The correct answer is Fixed costs. These are expenses that do not change, regardless of how much a business produces or sells, such as rent, insurance, and salaries of permanent staff.

Question: Something that a business should have to make it unique.

The correct answer is Competitive advantage. This is a unique feature, product, or service that sets a business apart from its competitors, such as better quality, lower prices, or excellent customer service.

Question: Price at which an item is sold.

The correct answer is Selling price. This is the amount a customer pays for a product or service, which includes the cost of production and a profit margin.

Question: Point where total costs are equal to total expenses.

The correct answer is Break-even analysis. This is the stage where a business earns enough revenue to cover its costs but has not yet made a profit. It helps determine when a business will start making money.

Question: Accounts of all customers who buy on credit.

The correct answer is Debtors’ ledger. This is a record that keeps track of all credit sales made by the business and the amount of money customers owe.

Question: Sponsoring fund-raising activities.

The correct answer is Sales promotion. Businesses use this strategy to increase sales and attract customers by offering discounts, sponsoring events, or giving free samples.

Question: Asking the customer for a decision so that an order can be placed.

The correct answer is Close. In sales, this means finalizing a deal by getting the customer to agree to purchase a product or service.

Question: Number of possible customers in the area you want to serve.

The correct answer is Geographic segmentation. This is a marketing strategy where a business targets potential customers based on their location, such as urban or rural areas.

Question

Market feasibility, Primary data, Strength, Secondary data, Industrial product, Opportunity, Speciality product, Convenience product, Demographic segmentation, Weakness, Market research, Capital investment, Consumer product, Economic growth, Geographic segmentation

Use the terms from the list above to answer the questions below

Question:
________ data is collected from sources such as the internet, research reports, and government statistics instead of being gathered firsthand.
The correct answer is: Secondary data
Businesses and researchers use this type of data when they don’t need to collect new information themselves. Instead, they rely on existing sources like government reports, market research studies, and online databases to analyze trends and make decisions.

Question:
The process of gathering information from customers to help businesses determine if their product or service will succeed is called ________.
The correct answer is: Market feasibility
Before launching a new product or service, businesses conduct this study to assess potential demand, competition, and customer preferences. It helps them avoid costly mistakes by ensuring their idea has a good chance of success.

Question:
Having sufficient financial resources to invest in a business is considered a ________ in terms of business advantages.
The correct answer is: Strength
A strong financial position allows businesses to invest in new opportunities, improve operations, and expand. This gives them a competitive edge, as they can afford better equipment, skilled employees, and high-quality materials.

Question:
Data collected directly from customers through surveys, interviews, or questionnaires is called ________ data.
The correct answer is: Primary data
This is firsthand information gathered straight from the source—customers or potential buyers. Businesses use it to understand customer needs, preferences, and opinions, ensuring that their strategies align with market demand.

Question:
A lack of computer skills that makes it difficult for an employee to perform digital tasks is considered a ________ in business.
The correct answer is: Weakness
In today’s technology-driven world, lacking computer skills can hold businesses back. Employees who struggle with digital tools may slow down productivity, make errors, or miss opportunities to use modern technology efficiently.

Question:
Financial investment from international sources that supports businesses or economic development is known as ________.
The correct answer is: Opportunity
Foreign investments bring new capital, advanced technology, and expertise into a business or economy. This can lead to job creation, economic growth, and access to larger global markets, providing significant benefits.

Question:
Machinery, equipment, and tools used in manufacturing and production processes are classified as ________ products.
The correct answer is: Industrial products
Unlike consumer goods, these are purchased by companies to help them produce other goods or services. Examples include heavy machinery, tools, and factory equipment used in industries like construction and manufacturing.

Question:
A high-end luxury item, such as a sports car, that customers are willing to make an extra effort to buy is called a ________ product.
The correct answer is: Speciality product
These products stand out due to their exclusivity, quality, or brand reputation. Consumers are often loyal to a specific brand and will go to great lengths—traveling long distances or waiting for availability—to purchase them.

Question:
Everyday items like bread and milk, which customers buy frequently with minimal effort, are categorized as ________ products.
The correct answer is: Convenience products
These are essential, low-cost items that people buy regularly without much thought. Since they are widely available and require little decision-making, businesses focus on making them easily accessible in stores and supermarkets.

Question:
Dividing a market based on characteristics such as age, income, and gender is an example of ________.
The correct answer is: Demographic segmentation
This strategy helps businesses target the right audience by understanding customer traits. For example, a company selling luxury watches may focus on high-income individuals, while a brand selling school supplies may target parents and students.