6.1 Name FOUR criteria that are essential for a good advertisement - NSC Consumer Studies - Question 6 - 2016 - Paper 1

Sustainable profitability refers to a small business's ability to maintain a stable level of production and sales without depleting available cash. It indicates that the business can continue to grow and remain viable over the long term, ensuring that it can adapt to changes in the market.

Mark-up is defined as the amount or percentage that is added to the cost price of goods to determine the selling price. This calculation allows a business to cover overhead expenses and ensure a profit margin.

1. To protect the product: Packaging safeguards the product from damage and contamination.
2. To maintain hygiene: Good packaging ensures the product remains clean and hygienic until it reaches the consumer.
3. To attract consumers: A well-designed package acts as a 'silent salesman,' drawing consumers' attention and encouraging them to make a purchase.

Routine or preventative maintenance is crucial for Maya as it helps prevent unexpected breakdowns during production, ensuring continuous workflow. By scheduling maintenance, she reduces the likelihood of repairs and unscheduled downtime, which can lead to production delays. This proactive approach saves costs in the long run by minimizing disruptions to her operations.

Maya fosters good customer relations by paying close attention to her customers' needs and preferences. She ensures that customers have a hands-on experience with fittings, allowing for final adjustments and customization. Additionally, her personable approach, where she serves refreshments during meetings, creates a welcoming atmosphere. This attention to detail and customer feedback helps her refine her offerings and build a loyal customer base.

1. Her natural talent for sewing: Maya's skill set allows her to produce high-quality items, which can attract customers and build a strong reputation.
2. Effective time management: With employees supporting her, she can efficiently manage orders and ensure timely deliveries, enhancing customer satisfaction.
3. Personalized customer service: By attending to individual customer needs, Maya creates a unique shopping experience that encourages customer loyalty and repeat business.

To calculate the selling price of one doughnut, follow these steps:

1. Total cost of production:

   Total costs = Ingredients cost + Other costs

   = R35.00 + R150.00 = R185.00

2. Calculate the mark-up:

   Mark-up = 50% of cost price

   = 0.50 × R185.00 = R92.50

3. Selling price:

   Selling price = Total cost of production + Mark-up

   = R185.00 + R92.50 = R277.50

4. Selling price per doughnut:

   Selling price for one doughnut = R277.50 / 100 = R2.78, rounded to R3.00.

1. Seasonal demand: Variations in school schedules influence doughnut sales as students are less likely to buy on holidays.
2. Market conditions: The peak sports season may increase sales, contrasting with slow months like January.
3. Operational changes: Fluctuations may also arise from changes in costs related to ingredients or fixed expenses affecting overall profitability.