Business (AS & A Level) · Oct / Nov 2024 · Paper 23 · Question 2

Vegan Burger (VB) VB is an established vegan burger chain in country X. Its Unique Selling Point (USP) is high quality, good value vegan meals. Hilda, the Managing Director, grew the business without external investment and within 5 years had 10 restaurants in the north of country X. VB was featured in a documentary exploring successful entrepreneurs in country X. This boosted VB’s national brand awareness. As a result, VB changed its objective from developing brand awareness to increasing market share. VB chose a franchise model to meet this objective. VB sold 25 franchise licenses in country X in 5 years. Two years ago, primary market research indicated pizza was a popular fast food in country X. VB added vegan pizza to its menu. Each pizza oven had a significant capital cost and required on-the-job training of the employees. VB invested in a six-month national television marketing campaign to promote the new menu item. Table 2.1 shows the financial data for producing pizzas. Table 2.1 Financial data for producing pizzas per restaurant ($) Fixed costs per month 1 000 Average variable costs per pizza 2 Average selling price per pizza 6 Vegan pizza has been sold by VB for two years. Tony, the Business Development Manager, provided sales data for these two years. Each restaurant sells on average 500 pizzas and 4500 burgers per month. Tony is worried that Patel’s Pizza, an established pizza franchise, is more popular. Tony has suggested removing pizza from the menu and repurposing the pizza ovens to cook hot desserts such as apple pies that complement the main burger meal. Hilda wants to continue marketing vegan pizza, as vegan food is currently very popular and the brand needs time and more marketing to be successful. 5 10 15 20 25

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