HERZLIA MIDDLE SCHOOL

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1 NAME TEACHER S COMMENT TEACHER CLASS PARENT S COMMENT MARK PERCENTAGE PARENT S SIGNATURE HERZLIA MIDDLE SCHOOL GRADE 7 ECONOMIC & MANAGEMENT SCIENCES 27 AUGUST 2015 TIME: 50 minutes MARKS: 70 o This paper consists of 10 pages. Please see that you have them all and they have been printed correctly. o Write your answers in the spaces provided on this paper. o In the calculations, show all your working. You may use a calculator.

2 QUESTION ONE: DEFINITIONS Define the following terms: 1.1 CAPITAL (1) 1.2 EXPENSES (1) 1.3 MEDIA (1) 1.4 PROFIT (1) 1.5 MARKET RESEARCH (1) [5] 2

3 QUESTION TWO : MATCH COLUMNS Match column A to column B. Write only the letter from column B next to the relevant number in the Answers column. COLUMN A COLUMN B ANSWERS 2.1 Target Market A A tool used to promote your business Equipment B Product, Price, Place and Promotion Asset C Item of value owned by the business Marketing strategy D An item needed for survival Advertising E Potential customer Cash Float F 2.7 Need G 2.8 Want H 2.9 Informal business I Something you would like to have. Employs less than five people. A business not regulated by the government. Money used to give change to customers Micro-enterprise J Asset [10] 3

4 QUESTION THREE - MARKETING 3.1 Column A contains two forms of advertising media. Column B contains advantages and disadvantages of these forms of advertising media. By writing only the letter, identify one advantage and one disadvantage of each form of media. Column A Media Online Media Broadcast Media Answer Column B Advantages and disadvantages A Very expensive B Easy to avoid C Is able to target specific audience D Reaches a large audience. 3.2 List FOUR ways that a small business can promote itself to its target market: Advert Sales promotion (free samples) Flyers Word of mouth [8] 4

5 QUESTION FOUR 4.1 Complete the following Market Day Income Statement of Two up Traders: (Answer on the income statement) INCOME Nine R8 each Two R15 each 30 1 lip R R2 each 20 Total Income EXPENSES Nine R7 each R5 each Lip R5 each 75 Advertising 5 10 R1 each 10 TOTAL EXPENSES Profit/Loss [5] Has the business made a profit or a loss? (1) Identify three things that this business could have done differently in order to increase their profit: 1. (3) Do you think this business did proper market research? Provide a reason for your answer. (3) 5 [7]

6 QUESTION FIVE Read the newspaper article below and answer the questions that follow Johannesburg - While Small and Medium enterprises had an 80 percent failure rate in the first two years, franchise opportunities were more resilient and offered far greater hope for budding entrepreneurs. Real People CEO, Kenneth Fisher, pointed to the franchise sector as a perfect platform for entrepreneurship, saying the sector in South Africa had a turnover of R128 billion annually, which was 12 percent of GDP. The flourishing franchise sector is set to continue making a major contribution to the economy in Looking ahead Real People is looking to disburse R40 million worth of SME [small to medium enterprises] loans over the 2015/2016 period, Fisher said. To date, as at 31 March 2015, we have already disbursed 24 loans with gross advances of R23.2 million. While in general 80 percent of SMEs fail in the first two years, the failure rate among new franchises provided they are based on a tried and tested model is much lower. Here only 5 to 11 percent of these businesses fail, depending on the economic climate at the time. It therefore understandably provides a much more sustainable model without the entrepreneur having to take any considerable risk. Fisher said that not only was the franchise sector critical to assisting in promoting economic growth, but it also played a major role in job creation. He said there were currently around 550 franchise brands and 30,000 outlets nationally, and that the average fast food franchise employed 50 people, the spin-off, applying a factor of five, would mean that those jobs were supporting 250 people in communities. Similarly, when applying the same factor of five to the overall sector which employs around 500,000 people, the sector in effect supports 2.5 million people in various communities around the country, Fisher added. With a current growth rate of approximately 13 percent per annum and approximately 3200 new franchises starting up each year, Fisher believed what made this sector particularly attractive was that these businesses were based on a proven business model. He said the high failure rate among SMEs was in many cases attributed to the fact that local entrepreneurs lacked the knowledge and skills required to start and successfully sustain a new business. In such cases, we partner with them to provide expert advice as well as training through our College of Entrepreneurship. This year we aim train and mentor at least 355 entrepreneurs, Fisher said. 6

7 QUESTION FIVE 5.1 Kenneth Fisher is the CEO of which organisation? (1) 5.2 What does REAL PEOPLE do? (2) 5.3 What does SME stand for? (1) 5.4 Why does Kenneth Fisher believe that a franchise is a safer option for entrepreneurs? (2) 5.5 Provide two reasons why the franchise sector is important to the South African Economy: (2) 5.6 Identify two challenges faced by entrepreneurs in South Africa that Real People assists with: Lack of training (2) Lack of capital [10] 7

8 QUESTION SIX Analyse the advert below using the method covered in class: 6.1 What does the acronym AIDA stand for? (Write your answers on the table below) 6.2 Use AIDA to analyse the above advert. Write your answers on the table below. 6.1 AIDA 6.2 Analysis Attention Own answer as long as it is relevant Interest Own answer as long as it is relevant Desire Own answer as long as it is relevant Action Own answer as long as it is relevant. 6.3 Is the above advert an example of online or print media? Motivate your answer. [11] 8

9 QUESTION SEVEN Read the case study below and answer the questions that follow: In order to satisfy the needs of his beloved pupils, an enterprising EMS teacher, Mr Collins decided to open a mobile coffee shop at the Herzlia Middle School campus. He purchased two Vespa Ape delivery vans at R each and two industrial coffee machines at R each. He also put an amount of R5000 into the bank account of the business to cover the expenses of the first two months. After a very first successful week, Mr Collins employed his younger brother to sell coffee from a second stall at the Gan Aviv campus near to the middle school. Due to his success Mr Collins was forced to sell coffee until 8:10am, resulting in his being late for both the early morning staff meeting and the first lesson. Much to the dismay of Mevrou Botes. Noticing the new trend amongst pupils, Jill decided to expand her tuck-shop into the coffee market and started selling Nescafe coffee at excellent prices. Mr Collins decided to sell his coffee at R20 a cup. The cost of a cup of coffee was broken down as follows: the cup cost R0,75, a sachet of sugar cost 20 cents, a 250g bag of deluxe coffee cost R40, Mr Collins uses 10g per cup. The milk cost R14 per litre and 100ml is used per cup of coffee. 7.1 Calculate the capital invested by Mr Collins. (1) 7.2 Suggest a creative name for Mr Collins mobile coffee stand: (1) 7.3 Help Mr Collins by doing a SWOT analysis for his mobile coffee stand: (4) 7.4 Calculate the cost of one cup of coffee: (3) [9] 9

10 QUESTION EIGHT Draw an advert for your Market Day stall: Rubric for Advert A 1 I 1 D 1 A 1 Presentation 1 Total 10

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