Business Studies · May / June 2022 · Paper 21 · Question 3
0450
As printed in the paper
Show the answer and mark scheme
3(a)[8]
Explain four ways Yasin can advertise MB’s products. Award 1 mark for each appropriate way (maximum of four). Award a maximum of 1 additional mark for each explanation in context. Relevant ways might include:
Local radio – as the bakery attracts only local people so many potential customers may hear the advertLocal newspaper/magazine – as a voucher could be included for money off breadPosters – in the window of the bakery shop to attract customers passing byLeaflets/fliers – can be handed out in the local town centre so that potential customers will know the location of the shop as it is newSocial media – emphasise that he uses imported ingredientsPackaging/carrier bags – emphasise the ethical image of the businessWebsite/online/internet – so if consumers are searching for local shops that sell bread so it can give information of the products and location of the shopBillboards – can be placed in busy areas of the local town directing them to the bakery locationSponsorship – local sports team may have shirts with the MB name to raise awareness of the bakeryWord-of-mouth – existing customers recommend good bread/tasty bread to their friends and family For example: Leaflets (1)can be handed out in the local town centre and to raise awareness of where the bakery shop is located (app). Application could include: bread;
bakery;
cakes;
bakery shop;
uses imported ingredients;
ethical image;
ingredients;
fresh products;
sustainable packaging;
consumed by all age groups.
3(b)[12]
Consider the two options outlined in Appendix 2. Which option should Yasin choose? Justify your answer using appropriate calculations. Level Description Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of both options. Well-justified recommendation. Candidates discussing both options in detail, in context and with a well-justified recommendation including why the alternative option was rejected should be rewarded with the top marks in the band. 9–12 Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of at least one option. Judgement with some justification / some evaluation of choice made. Candidates discussing at least one option in detail and applying it to the case should be rewarded with the top marks in the band. 5–8 Limited application of knowledge and understanding of relevant business concepts. Limited ability to discuss the options with little/no explanation. Simple judgement with limited justification / limited evaluation of choice made. Candidates outlining both options in context should be rewarded with the top marks in the band. 1–4 No creditable response. Relevant points might include: Option 1 – small cupcakes
Sales are higher by 3900 per month (L1)Total cost is $5000 per month (L1)Total revenue $8000 per month (L1)Profit per month is $ 3000, $1000 more than Option 2 (L2)Break-even output 2000 cupcakes a month (L2)Forecast margin of safety is 2000 per month (L2) Option 2 – large birthday cakesTotal revenue $6000 (L1)Total cost is $4000 per month (L1)Profit per month is $2000 (L2)Break-even output 60 large birthday cakes a month (L2)Forecast margin of safety is 40 per month (L2) Recommendation Justification might include:Option 1 is the better one to choose as it has the higher profit by $1000 than Option 2 and a higher margin of safety (as a proportion of sales). Option 2 may have a higher predicted growth of sales, but this is only a forecast and may not happen. It is better to choose the more certain higher profit now than the possibility of higher sales later.Option 2 is better than Option 1 as the gross profit margin is 8.33% higher. However, the future growth of sales is forecast to be higher and may lead to higher profits in the future.
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