Q6 — Justify (9 marks, application)

JJ's Juice Bar is a new smoothie business in Manchester. JJ is considering whether to focus on (a) competing on low price or (b) adding value through a unique selling point. Justify which option JJ should choose. (9 marks)

Mark scheme (Levels 1–9):

• Level 1 (1–3): Knowledge of options; limited application.
• Level 2 (4–6): Application to JJ's; balanced analysis.
• Level 3 (7–9): Justified judgement supported by evidence and analysis from the context.

Indicative content:

• Low-price strategy — appeals to price-sensitive students, competes with supermarkets, but squeezes margins; risky for a start-up with high unit costs on fresh fruit.
• Adding value via USP — e.g., 'fully organic, locally sourced, vegan' positioning allows premium pricing (£5+ per smoothie), builds brand loyalty and differentiates from Costa/Boost.
• Justification — adding value is more sustainable for a small new business as it improves profit margins and avoids price wars with larger chains. JJ should adopt a USP strategy because the Manchester student market includes affluent segments willing to pay more for ethical/quality products. Conclusion: option (b) is the stronger choice.