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Business Studies · Oct / Nov 2024 · Paper 21 · Question 1

0450

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  • 1(a)[8]

    Explain four reasons why a business might remain small. Award 1 mark for each suitable reason (max 4). Award a maximum of 1 additional mark for each explanation of why a business remains small. There are no application marks for this question. Suitable reasons might include:

    The product / service is specialised / may be personal / customised – not suitable for production on a large scale / produced using job production
    Market size – doesn’t have a large market / maybe niche market / sales are low / lack of demand
    Owner’s choice / owner’s preference / owner’s objective – to keep a work life balance / less stress / less pressure / satisfied with current business performance
    Easier to manage / control – owner makes decisions himself/herself / may not have the skills to manage a larger business
    Owner knows all the employees – personal relationship / paternalistic style / easier communication
    Lack of finance / fewer options of finance for a small business
    Maintaining close customer relations – wishes to maintain customer loyalty / face-to-face customer service
    Not willing to take many / additional risks – does not want more responsibility
    Market dominated by large business / many competitors – restricting growth / sales For example: The product is specialised (1)

    and therefore is not suitable to be produced on a large scale (1).

  • 1(b)[12]

    Consider the following three roles of packaging for CC’s products. Which role is most important for CC? Justify your answer.

    Protecting the product
    Promoting the brand image
    Providing information about the product Level Description Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of two or more roles. Well-justified conclusion. Candidates discussing three roles, in context and with a well-justified conclusion, including why the alternative roles were 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 role. Judgement with some justification / some evaluation of choice made. Candidates discussing two or more roles in detail and applying these 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 roles with little / no explanation. Simple judgement with limited justification/limited evaluation of choice made. Candidates outlining the three roles in context should be rewarded with the top marks in the band. 1–4 No creditable response. Relevant points might include: Protecting the product
    Cookies can easily break – delivered to customer in damaged state if packaging not suitable which could reduce the reputation for CC’s high- quality products – leading to lower sales
    Needs to ensure the product stays fresh and best quality – to be consumed in a good condition and not deteriorated in any way / no germs/bacteria – keeps customers loyal to CC and maintains sales
    May prevent damage when being transported/stored – may lead to increased costs as products have to be replaced Promoting the brand image
    Appendix 1 is an advert showing cookies are of high quality and has a recognised logo – consumers will see the logo and associate the packaging with CC’s products helping to advertise the cookies to other potential customers when they see the packaging
    Colour on the packaging can be used to associate the logo with the product – make the product easily identifiable on shelves and stand out from competing products Providing information about the product
    The ingredients can be listed on the packaging – in case customers need to know about allergies – prevents customers from falling ill when consuming the cookies – stops CC getting a bad reputation for selling products that can cause illness
    Information about the fresh ingredients may be a legal requirement – stops CC from being prosecuted and being fined Conclusion Justification might include:
    Protecting the products is the most important role of packaging as they are breakable and perishable. The packaging needs to prevent the product being damaged or CC’s reputation for high-quality products will be ruined. Promotion of a brand image is less important as advertising can do this and providing information is only important once the product is considered for buying, so unless the product is being looked at in the first place, then the information will not affect sales.
    Promoting the brand image is important as if customers are not attracted to CC’s products in its shop in the city centre, then the other two roles of packaging will not be relevant.
    Providing information is most important because otherwise if a customer has food allergies and the information is not provided on the packaging then the customer may become ill. CC could be fined and get a bad reputation.
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