Business (AS & A Level) · May / June 2021 · Paper 22 · Question 1

Hot Bubblez (HB) Karen is a sole trader who operates a service business called Hot Bubblez (HB) from her own home. It is a laundry service in town P. Each day Karen spends the morning collecting laundry from customers’ homes. Karen then washes, dries and irons the laundry and then delivers it back to customers’ homes in the evening. She owns two washing machines, two drying machines and one iron. Each batch of washing takes approximately two hours to wash, dry and iron. Karen has completed some market research about which method of laundry households use in town P (see Fig. 1.1). There are 60 000 households in town P. Use a laundry service 20% Do laundry at home 65% Go to a laundry shop (launderette) 15% Fig. 1.1: The percentage of households using each laundry method in town P Karen has 300 households that use HB’s laundry service. Karen would like to employ someone to do the collections and deliveries. Karen has always relied upon customer recommendations to promote HB. However, she has not been able to gain any new customers and she thinks it is time for new promotion methods to be used. She would like to target the hotel laundry market. Table 1.1 shows some data about the local hotel market. Table 1.1: Data about the local hotel market Number of hotels in town P 14 Number of hotels outside town P but within 30 miles of HB 45 Proportion of hotels which have their own laundry service 50% 5 10 15

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