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Dear Business Studies Teacher

Teaching is the greatest act of

optimism …

Colleen Wilcox

We live in turbulent times! Every time we sign in to a Social Media Platform

or open our emails, we read and hear about changes. If it is not a business

bubble that is about to burst, it is a new person entering the news as the

“flavor of the month” or a previous role player being forced out for a variety of

reasons – corruption, incompetence, greed or …

But the one thing that you can rely on that will stay consistent, is the

Consumo Brand. Our products will always meet quality standards and

include all material that your students need to know. Nothing more, nothing

less! Our current grade 12 books include new 2018 topics like Forward,

Backward and Horizontal integration, Fixed Property as an Investment option

and COFESA as an employer organization. These are just some examples

of new topics. We do the work to make sure the books are up to date, so

you don’t have to worry…

Does the book that you prescribed for 2018 contain the new topics in the

2018 syllabus? If not, is it worth the gamble to think “maybe the book will be

compliant in 2019?” To quote a well-known investment brand: “Trust has to

be earned”!

As has been the case with the previous 27 newsletters, we hope

you find this newsletter an interesting and inspirational source of

information!

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A thought and a smile …

https://www.pinterest.ca/pin/573153490069067775/

Download 22 June 2018

https://www.wattpad.com/89045562-smile-%E2%80%A2-good-question-%E2%80%A2 Download 22 June 2018

https://za.pinterest.com/pin/221591244140188125/ Downloaded 23 June 2018

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Critical Thinking Brand stretching is often a big gamble. Many companies have successfully added unrelated

products to a successful brand. Think about the MASTER of brand stretching, Richard

Branson.

From a humble beginning of a student magazine in 1968, to a record shop and recording

Studio in the 1970’s. The 1980’s saw Branson opening Virgin Holidays and Virgin Airline. During the

1990’s Virgin branched out into a radio station, getting involved in cola drinks, selling bridal wear, trying a

hand at make-up sales and Virgin gyms. Since 2000 the brand has ventured into financial services, travel

agencies, Virgin cars, selling underwear, cell phones, hotels and even Virgin Galactic – the first

commercial space tourism company.

And these were not the only ventures that Richard Branson got involved in. You will be surprised to see

what else he tried his hand at. Some of the ventures were very successful, while others failed!

Other companies that attempted Brand stretching, but that failed, included:

Zippo lighters trying to enter the perfume market

Harley Davidson also attempting to enter the perfume business and later trying their hand at

selling cake decorating kits

Colgate toothpaste tried to sell food

Burger King also tried to launch a perfume (what’s with all the perfume?)

Diesel Jeans tried to sell wine

So why did the following brands succeed?

Apple: from computers, to music, to cell phones and to TV

3M: they have over 60 000 products in a variety of categories and you may not even know they

are from 3M. See if you can find 15 different products they make

Some music and even sport celebrities launching make up and perfume products

What’s the secret to success?

An activity:

Ask each learner in the class to write the name of a well-known brand on a card. Make sure there are at

least 10 different brand names recorded. Now ask each learner to write a different product name (e.g.

burger, shoe, lip ice, etc.) on a card.

One learner will draw a brand name from a hat and a different learner will draw a product type. They will

work in pairs and develop a strategy how the Brand can stretch itself to manufacture and sell

the unrelated product.

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Current affairs

New mobile operator Rain takes battle over data prices to

Vodacom, MTN

The data-only network operator that launched mobile services two weeks ago wants to win

over its rivals’ heavy data users

21 JUNE 2018 NICK HEDLEY

The new mobile operator backed by prominent businessmen Patrice Motsepe, Paul Harris

and Michael Jordaan is taking the fight over data prices to sector giants Vodacom and

MTN.

Rain, a data-only network operator that launched mobile services two weeks ago, wanted

to win over its rivals’ heavy data users with a simpler offering and competitive prices, CEO

Willem Roos said.

Amid a decline in traditional voice revenues and public scrutiny over connectivity costs,

data is becoming a major battleground for SA’s telecommunications companies, and the

market is ballooning – Vodacom, MTN, Cell C and Telkom generated a combined R47bn in

data revenues in SA in their financial years ended December and March.

Rain does not offer traditional voice services, but sells data for R50 a gigabyte, while

outside of peak evening hours, its customers can use unlimited data for R250 a month,

according to Roos, the former CEO of Outsurance.

Read more at https://www.businesslive.co.za/bd/companies/telecoms-and-technology/2018-06-21-new-mobile-operator-rain-

takes-battle-over-data-prices-to-vodacom-mtn/ (22 June 2018)

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General Business Article

A different view on pricing

The Price Leader is the dominating supplier of products and / or services in the market. The Price

Leader determines the price of goods or services, because it holds the majority of the market

share. This often leaves the Price Leader's competitors (the followers) with little choice, but to

match the Leader’s prices in a desperate attempt to hold onto their market share. The followers

often lower their prices in the hope of regaining market share.

When followers in the market cut prices to match the price of the Market Leader, it often decreases

the reputation of the follower as a business that provides good quality products and services.

Lowering prices could also signal to customers that the business has previously charged them too

much. This could lead to customers feeling exploited and disillusioned and that could mean the

follower may lose customers and not gain them as was hoped.

When a business cuts prices, it may also force the organisation to operate on a lower budget than

previously. Sacrificing profit margins could lead to lower customer service levels in future.

Another reason for lowering prices could be that the businesses faces possible closure, because it

is no longer profitable due to poor competitive positioning or any number of other reasons. The

businesses may be forced to reduce prices to increase the sale of excess inventory to pay debt.

The Price Leader may decide to respond in a number of ways to a drastic reduction in prices by a

follower. If the Price Leader feels threatened, it will reduce its prices to be below that of the

competitor’s new price level. However, if the Price Leader has been following a pricing strategy

based on “value adding additions” prior to the competitor trying to initiate a price war, the Price

Leader will probably not feel the need to reduce prices in order to keep customers. Customers will

appreciate the brand value and not expect to pay less for a product and / or service that satisfy

their needs.

https://www.entrepreneurshipinabox.com/342/lowering-prices-bad-strategy/

https://www.investopedia.com/terms/p/price-leadership.asp

http://upstreamcommerce.com/blog/2012/06/27/10-important-reasons-low-pricing-bad-business-retailers

https://bizfluent.com/info-10012331-five-reasons-store-mark-down-merchandise-sold.html

https://www.pricingsolutions.com/pricing-blog/how-to-avoid-price-war/

https://economictimes.indiatimes.com/definition/market-leader

https://www.strategy-business.com/article/18881?gko=64116

http://www.driveyoursuccess.com/2010/04/should-your-company-be-a-market-follower-market-leader-or-market-expert.html

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Fast Food Thanks to Tony Timm from Kingswood College for sharing this fantastic article

3/100: The fast-food company with the worst health score

By Georgina Mitchell 27 May 2018

Photo: Craig Sillitoe

Australia's most popular fast-food restaurants need to be more transparent about their nutrition

policies and should commit to reducing salt, sugar and saturated fat, according to a new report

which ranks the retailers based on their public positions on tackling obesity.

The report, released today by Deakin University's Global Obesity Centre, examined the 11

largest fast-food restaurants – which cover about 67 per cent of the market – using publicly

available information, then ranked them based on their policies relating to healthy eating.

A study into Australia's largest fast-food chains has found the majority of companies are not

taking sufficient steps to promote healthy eating.

It found the majority of the restaurants do not identify nutrition and health as being a focus area,

with a sector-wide failure by "quick service restaurants" to disclose what they are doing to

address obesity and nutrition.

The restaurants were given a score out of 100 based on six factors, including policies on

marketing to children, disclosure of nutritional information on menus and online, plans to reduce

"nutrients of concern" such as sugar and saturated fat, and a commitment to health in corporate

strategy.

Subway topped the list with 48/100, with researchers suggesting it could do better by phasing out

free soft drink refills. Domino's Pizza was the bottom of the pack with just 3/100, scoring zero in

each category except for nutrition labelling and transparency in its corporate relationships.

McDonald's, KFC, Nando's, Hungry Jack's, Pizza Hut, Chicken Treat, Red Rooster, Oporto and

Grill'd notched up scores ranging from 10 to 42.

Read more at https://www.smh.com.au/national/nsw/3-100-the-fast-food-company-with-the-worst-health-

score-20180527-p4zhrw.html REMEMBER, this may be Australian stats, but some of these

businesses also trade in South Africa

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Petrol Stations

Ever wondered how the price of Petrol is determined?

Downloaded from https://www.aa.co.za/sites/default/files/aa-pr19-price_of_fuel_breakdown_inland_-

_10_april_2018.pdf 23 June 2018

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In conclusion …

In terms of prices for next year, we are happy to announce that our “Early Bird

Customers” (those ordering and paying a 50% deposit before 30 September 2018),

will pay 2018-prices for their 2019 books. Yes, we will not even increase the prices to

compensate for the 1% increase in VAT that came into effect in April this year. So

use the price list attached and order as soon as possible. This will enable your

school to add a bit of a mark-up and make a profit from the books if you are an “Early

Bird”

At Consumo we firmly believe that we have a winning recipe and we know you believe it too.

We make sure our books are up to date, we do regular monthly newsletters, keep our

website up to date and publish fantastic and useful articles for class discussions on our

Facebook page.

Please keep in touch by giving us your suggestions and feedback. We enjoy hearing from

you and value your expert opinions.

Together we ARE the Business Studies community!

June

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Estie and Zain

The Consumo Team

We believe in “Innovate to Educate and Educate to Innovate”.