Question A1 Premier Taxis (PT) is a taxi business in Bradford. PT is owned by two...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Question A1 Premier Taxis (PT) is a taxi business in Bradford. PT is owned by two friends, Christine and Sally, who set up the business as a private limited company in 2015 after both had been made redundant from their public sector jobs. Christine and Sally decided from the very beginning of their business that they would use the fact that they were the only all-female taxi business in Bradford as their unique selling point (USP). In the early days of the business, Christine worked in the small office they had rented in town taking bookings from customers, while Sally did all of the driving. The business soon became extremely popular with customers and the reputation they had quickly established for reliability and competitive pricing meant that they had to recruit additional drivers. PT currently employs five drivers who work a mixture of full and part-time hours. Christine and Sally now share managing customer bookings and drive taxis as and when needed. Many of PT's customers are people travelling to the local airport which is just 15 kilometres away from their town centre office. However, over recent months they have been receiving a number of enquiries from people who want to take a taxi to other UK airports. Christine and Sally see this as an opportunity to expand their business and are considering offering a return taxi journey from Bradford to Birmingham and Manchester Airports. However, if they go ahead with this plan, they will need another vehicle and one which can take larger groups of people and their luggage. Christine has carried out some research and has identified a suitable vehicle for the longer airport journeys. The running costs of this vehicle is shown in Table 1. Table 1: Running Costs of MPV for Longer Airport Journeys Fixed Costs per month (based on 5000kms) Variable Costs per kilometre £1000 £0.20 Sally has carried out primary market research to forecast the monthly demand for taxi jou to Manchester and Birmingham airports. The results of her research are shown in Table 2. Table 2: Research data for Taxi Journeys from Bradford to Birmingham and Manchester Airports Airport Return distance from Bradford (Kms) Birmingham 400 Manchester 170 Forecast average number of return journeys per month (b) 8 10 Competitor prices for same journey PT currently uses cost-plus pricing by adding a profit kilometre. £220 £250 £100 £115 Maximum amount people will pay for return taxi to airport £235 £110 Christine and Sally are keen to promote their new service to existing and potential customers. They also think that offering a 'fixed price' for a return journey to both Birmingham and Manchester Airports will be attractive to potential users of the service. Word Limit: 450 words of 50% to the full cost per (a) Explain the benefits to PT of having a unique selling point (USP). i. Using the information in Table 1 and Table 2 and other information, [3] calculate the price to customers for a return journey to and from Birmingham airport. ii. Using your answer to (b) i. calculate the contribution per return [3] Birmingham airport journey. (c) Analyse methods of promotion PT could use to promote their proposed new taxi service to Manchester and Birmingham Airports. Word Limit: 300 words [4] (d) Evaluate the usefulness of Sally's primary market research in deciding whether PT should expand its services to customers. [8] [12] Question A1 Premier Taxis (PT) is a taxi business in Bradford. PT is owned by two friends, Christine and Sally, who set up the business as a private limited company in 2015 after both had been made redundant from their public sector jobs. Christine and Sally decided from the very beginning of their business that they would use the fact that they were the only all-female taxi business in Bradford as their unique selling point (USP). In the early days of the business, Christine worked in the small office they had rented in town taking bookings from customers, while Sally did all of the driving. The business soon became extremely popular with customers and the reputation they had quickly established for reliability and competitive pricing meant that they had to recruit additional drivers. PT currently employs five drivers who work a mixture of full and part-time hours. Christine and Sally now share managing customer bookings and drive taxis as and when needed. Many of PT's customers are people travelling to the local airport which is just 15 kilometres away from their town centre office. However, over recent months they have been receiving a number of enquiries from people who want to take a taxi to other UK airports. Christine and Sally see this as an opportunity to expand their business and are considering offering a return taxi journey from Bradford to Birmingham and Manchester Airports. However, if they go ahead with this plan, they will need another vehicle and one which can take larger groups of people and their luggage. Christine has carried out some research and has identified a suitable vehicle for the longer airport journeys. The running costs of this vehicle is shown in Table 1. Table 1: Running Costs of MPV for Longer Airport Journeys Fixed Costs per month (based on 5000kms) Variable Costs per kilometre £1000 £0.20 Sally has carried out primary market research to forecast the monthly demand for taxi jou to Manchester and Birmingham airports. The results of her research are shown in Table 2. Table 2: Research data for Taxi Journeys from Bradford to Birmingham and Manchester Airports Airport Return distance from Bradford (Kms) Birmingham 400 Manchester 170 Forecast average number of return journeys per month (b) 8 10 Competitor prices for same journey PT currently uses cost-plus pricing by adding a profit kilometre. £220 £250 £100 £115 Maximum amount people will pay for return taxi to airport £235 £110 Christine and Sally are keen to promote their new service to existing and potential customers. They also think that offering a 'fixed price' for a return journey to both Birmingham and Manchester Airports will be attractive to potential users of the service. Word Limit: 450 words of 50% to the full cost per (a) Explain the benefits to PT of having a unique selling point (USP). i. Using the information in Table 1 and Table 2 and other information, [3] calculate the price to customers for a return journey to and from Birmingham airport. ii. Using your answer to (b) i. calculate the contribution per return [3] Birmingham airport journey. (c) Analyse methods of promotion PT could use to promote their proposed new taxi service to Manchester and Birmingham Airports. Word Limit: 300 words [4] (d) Evaluate the usefulness of Sally's primary market research in deciding whether PT should expand its services to customers. [8] [12]
Expert Answer:
Answer rating: 100% (QA)
A1 a The benefits of having a unique selling point USP for Premier Taxis PT are numerous Firstly it allows the business to stand out from the competition in the local market as they are the only allfe... View the full answer
Related Book For
Corporate Finance and Investment decisions and strategies
ISBN: 978-1292064062
8th edition
Authors: Richard Pike, Bill Neale, Philip Linsley
Posted Date:
Students also viewed these accounting questions
-
Reconsider Prob. 14112E. The office worker who set up the siphoning system purchased a 12-ft-long reel of the plastic tube and wanted to use the whole thing to avoid cutting it in pieces, thinking...
-
Amos Ltd has operated as a private limited company for 80 years. The company is facing increased competition and it has been decided to sell the business as a going concern. The financial situation...
-
A taxi company in a small town has two cabs. Cab A stalls at a red light 25% of the time, while cab B stalls just 10% of the time. A driver randomly selects one of the cars for the first trip of the...
-
Page ranks. Design a graph in which the highest-ranking page has fewer links pointing to it than some other page.
-
Consider the two-period com economy of the text. Suppose that initially the equilibrium has a zero trade deficit. Now, increase the interest rate. Show how the Fisher diagram changes. Will trade...
-
Bricks have weights that have a mean 250 and a standard deviation 4. (a) Suppose X is the weight of a randomly chosen brick. Let Y = c + dX. What are the values of C and d such that Y has a mean 100...
-
Give examples of information systems and automated information systems. How do they differ from each other?
-
The initial proceeds per bond, the size of the issue, the initial maturity of the bond, and the years remaining to maturity are shown in the following table for a number of bonds. In each case the...
-
The total factory overhead for Big Light Company is budgeted for the year at $739,820. Big Light manufactures two different products: night lights and desk lamps. Night lights are budgeted for 19,700...
-
The Harps grocery store chain buys its paper goods (paper towels, toilet paper, tissues) in bulk from one supplier to get a discount. Assume that about once a month it runs out of stock of a few of...
-
Here are summary statistics for randomly selected weights of newborn girls: n=192, x=26.8 hg, s=7.1 hg. Construct a confidence interval estimate of the mean. Use a 90% confidence level. Are these...
-
We sign a contract that calls for a down payment of 3 , 0 0 0 and for payments of 2 5 0 at the end of each month for 6 years. Money is worth 1 2 % compounded monthly. If we miss the first 8...
-
Suppose you are the financial manager of a firm considering the following five projects (expand below to see the five projects). Five Projects Under Construction Five Projects Under Consideration...
-
A 19-year bond with a 11.8 percent semiannual coupon and a $1,000 face value has a nominal yield to maturity of 9.9 percent. The bond currently sells for $1,161.31. The bond, which may be called...
-
Assume that ABC company wants to acquire a new equipment at an initial price of $ 1 0 0 0 with 1 0 years useful life. The equipment's value will be depreciated on a straight - line basis down to a...
-
What is the current yield for a bond with a current price of $1,200, a face value of $1,600, and a coupon rate of 5%? Round your answer to the nearest tenth.
-
What cultural significance do indigenous folk art traditions hold within their respective communities, and how have they evolved over time amidst modernization and globalization?
-
A test car is driven a fixed distance of n miles along a straight highway. (Here n Z+.) The car travels at one mile per hour for the first mile, two miles per hour for the second mile, four miles...
-
Slade plc is a medium-sized UK company with export and import trade links with US companies. The following transactions are due within the next six months. Transactions will be in the currency...
-
Mr Cowdrey runs a manufacturing business. He is considering whether to accept one of two mutually exclusive investment projects and, if so, which one to accept. Each project involves an immediate...
-
Exchange-traded foreign currency option prices for dollar/sterling contracts are shown below: Option prices are in cents per . The current spot exchange rate is $1.9405-$1.9425/. Required Assume that...
-
At the beginning of a duct the nitrogen pressure is \(1.5 \mathrm{bar}\), the stagnation temperature is \(280 \mathrm{~K}\), and the Mach number is 0.80 . After some heat transfer the static pressure...
-
Air enters a constant-area duct with \(M_{1}=2.95\) and \(T_{1}=500^{\circ} \mathrm{R}\). Heat transfer decreases the outlet Mach number to \(M_{2}=1.60\). (a) Compute the exit static and stagnation...
-
A \(50 \times 50 \mathrm{~cm}\) duct is \(10 \mathrm{~m}\) in length. Nitrogen enters at \(M_{1}=3.0\) and leaves at \(M_{2}=1.7\), with \(T_{2}=280 \mathrm{~K}\) and \(p_{2}=7 \times 10^{4}...
Study smarter with the SolutionInn App