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John and Martin Quinn are organic farmers in Co - Leaving Cert Business - Question 8 - 2009
Question 8
John and Martin Quinn are organic farmers in Co. Wicklow. They supply organic vegetables and meat to local shops, restaurants and butchers. Their business is expandi... show full transcript
Worked Solution & Example Answer:John and Martin Quinn are organic farmers in Co - Leaving Cert Business - Question 8 - 2009
Step 1
Explain what is meant by 'Channels of Distribution'.
Answer
Channels of Distribution refer to the paths that products take from the producer to the consumer. This may involve several intermediaries, such as wholesalers, agents, and retailers. John and Martin Quinn distribute their organic products to local shops, restaurants, and butchers, illustrating the critical role of distribution channels in reaching end consumers.
Step 2
Step 3
Outline four factors that John and Martin would take into account in setting a suitable price for their products.
Answer
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Production Costs: All production, research, and development costs must be calculated and included in setting the selling price, ensuring that these costs are met over time.
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Competitor Pricing: The price will have to match competitors' prices to remain competitive in the market.
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Demand Level: The level of demand is critical; as demand rises for organic food, they may increase their prices accordingly.
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Government Regulations: Any governmental requirements or taxes on organic products must also be considered when determining the price.
Step 4
Describe two methods to improve their Credit Control system.
Answer
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Credit Checks: Implementing rigorous checks on the creditworthiness of customers to assess their reliability in settling debts.
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Prompt Payment Incentives: Offering discounts for early payments or establishing reminders to encourage timely payment from customers.
Step 5
Outline two benefits of preparing a Cash Flow Forecast.
Answer
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Financial Planning: A Cash Flow Forecast provides a projected view of income and outgoings, which helps in planning the financial needs of the business.
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Decision Making: It assists in making informed decisions by showing future cash positions, enabling the business to address potential shortfalls in advance.
Step 6