This is the EXAM ESSAY TYPE GUIDELINES to be studied in conjunction with the other study materials provided free of charge. Once understood your chances of passing this module is greatly enhanced.
How to answer essay-type questions
In the examination, please read a question carefully – look what was asked. If we
asked to substantiate your answer from the case study – you need to give an example
from the case study, e.g.
Identify and briefly discuss any two market-driven pricing models followed by
Shoprite. [Substantiate your answer from the case study].
Let us followed a few steps:
1) What is the question about? – market-driven pricing models.
2) What do we know/remember about the market-driven pricing models? There are
various market-driven pricing models (write it down for your self – price volume,
market-share, market skimming (will not be used by Shoprite), revenue pricing,
promotion pricing, competitive pricing and cash discounts.
3) How many do we need to identify and discuss? – The question indicates two market-
driven pricing models. Therefore you can choose any two, which apply to Shoprite.
The question stated ‘identify and discuss” this means you need to provide a theory.
Therefore, firstly, you need to identify - Market-share followed by a discussion – market
share approach is also known as penetration pricing which leads to faster market
penetration (mass-market appeal of products).
4) Go back to the question and asked – anything else we needed to do - yes - the
question asked us to substantiate our answer from the case study.
5) Go back to the case study – uses the theory to find an example in the case study.
“Whitley Basson, CEO of Shoprite Holdings believed that Shoprite’s significant
infrastructure investments set them apart from other retailers. As a result, market
penetration was more challenging and costlier for newcomers as they (Shoprite
supermarkets) hold such large market shares”. [Please note, you can use the
sentences form the case study as is, or you can rewrite it in your own words].
6) Go back to the question, anything else we need to do – yes - we need to identify
two market-driven pricing models. Therefore, we need to identify one more market-
driven pricing model. Identify - price volume. Discussion - The willingness of a
supplier to offer quantity discounts also affects the final selling price (to buy in bulk to
receive discounts). Example from the case study. The case study did not directly state
that Shoprite was buying in bulk but stated that they receive rebates from the suppliers.
Rebates could be received for buying in bulk. Therefore, we can conclude that
Shoprite was buying in bulk to receive the rebates. “However, Basson confirmed that
their focus is on price and they aim to retain their low-price leadership in the grocery
retail market. One way of achieving this is by using the rebates; they received from
their suppliers to subsidies price increases”.
7) Go back to the question; did we do what was expected of us? – Yes, our answer
identifies, discussed, and provide an example from the case study.
8) Go to the next question.
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