Mr. Crump and Mr. Shearing wanted to set up a catering business

providing food for parties and special occasions. Both of them were

good cooks and had worked for several years in the kitchens of

successful restaurants. However, they had never run their own

business before, and knew that they had to do some market research

before they got started. They also knew that the marketing mix they

used was going to be important in terms of making sure customers

knew about their business, booked and enjoyed the experience.

They were a bit nervous about all these new things to think about

but were desperate to make it a success. The only problem was that

by the time they had rented the premises to use as a base and

invested in equipment there would not be much money left over for

the marketing. Also, they had to decide on the price to charge for

their services. Mr. Crump and Mr. Shearing had already looked at

the prices other catering companies were charging.

Mr. Crump felt their food was going to be much better and thought

they might be able to charge customers 10% more than their

competitors. Mr. Shearing wasn't sure and felt they might make a

higher profit with a lower price. Mr. Crump felt they needed to raise

money somehow so they could do more market research.