10 b to be able to compete on price kululacom must

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(10) b To be able to compete on price, Kulula.com must focus considerably on cost. Discuss the following cost based pricing methods (4 marks each) and indicate how each can be applied by Kulula.com (1 mark each). It is expected of you to give reasons even if you think that a certain cost based pricing method cannot be applied by Kulula.com. (i) Cost plus pricing (ii) Pricing according to the experience curve (iii) Pricing according to the break-even analysis (15) [25] Paper total [70]
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MNM3036/201 15 MEMORANDUM Section A Question Correct Alternative 1 3 2 5 3 5 4 4 5 4 6 3 7 5 8 5 9 4 10 4 SECTION B Question 1 a (See section 3.1 in the study guide.) You should have discussed each of the following characteristics of services and indicated in a practical way how these can be applied by Kulula.com. Intangibility Variability Perishability Inseparability Question 1b Please look at the following sections to identify the different applicable pricing options: section 11.4 and section 6.4.2.1 in your study guide. You should have discussed all of them disregarding whether they are applicable in the case of Kulula.com. At the end you have to identify the price strategy followed by Kulula.
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MNM3036/201 16 Question 2a (See sections 8.4.2, 8.4.3 and 8.4.4 in the study guide.) You should have discussed the topics mentioned below by explaining and emphasising the meaning of each and the way each one contributes to the total brand equity. Lastly you should also have discussed the possible practical application of these topics in the situation of Kulula.com. Perceived quality Brand Loyalty Brand associations Question 2b (See section 10.3.1.3 in the study guide.) You should have discussed the importance of each of the components contributing towards the rate-of-return. It was not necessary to mention the formula but if you have used that it, it can earn you a bonus mark. It was also necessary to link the components of the formula practically to the situation of Kulula.com Question 3a (See section 6.2.2 and 6.4.2.2 in the study guide.) You should have mentioned that one of the most important characteristics of the growth phase is of the product life cycle is that the product starts to show strong growth in sales and that this phase is the most profitable of all. The following are the main characteristics of this stage: Increase in competitor numbers Product improvement Increase in intermediary numbers Lower price if price skimming strategy was used in the introductory phase Increase in profits The following four strategies can be used during the growth phase. It was necessary for you to discuss of each strategy and link them to the situation of Kulula.com. Adding new product features Quality improvements Distribution channel additions The addition of new market segments Question 3b You should have discussed the theory of the following three cost based pricing methods (4 marks each) followed by the possible practical application thereof (1 mark each) in the case of Kulula.com: Cost plus pricing (See section 11.1.1 to 11.1.3 in the study guide.) Pricing according to the experience curve (See section 11.1.4 in the study guide.) Pricing according to the break-even analysis (See section 11.1.5 in the study guide.)
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