Business Studies · May / June 2025 · Paper 11 · Question 2

0450

As printed in the paper

The question as text

NSL is a business based in country X. It manufactures food products including bread and breakfast cereals. NSL uses lean production in its factory. Maintaining quality is important. NSL imports 15% 2 of its raw materials. Changes in country Xls exchange rate can affect businesses which import raw materials. NSLls Marketing Manager knows the business should respond to changes in consumer spending patterns. She is aware that market research can be used to help make business decisions.

Read automatically from the paper; the printed page above is exact.

Show the answer and mark scheme

2(a)[2]
Identify one way each of the following changes in country X’s exchange rate might affect businesses which import materials. Award 1 mark for each way (max 2). Points might include:
Depreciation: Imports dearer/more expensive
Appreciation: Imports cheaper 2 Only award the first two responses given. Do not award answers about the effect on exports.
2(b)[2]
Identify two reasons why consumer spending patterns might change. Award 1 mark for each reason (max 2). Points might include changes in:
Price of product
Price of competitors products/increased competition
Incomes/wages/unemployment/business cycle or examples
Population size/structure/life stage of consumers
Taste/fashion/preferences
Advertising/promotion
Technology
Taxation
Interest rates
Exchange rates
Weather/season Other appropriate responses should be credited. 2 Only award the first two responses given.
2(c)[4]
Outline two reasons why maintaining quality is important for NSL. Award 1 mark for each relevant reason (max 2). Award 1 mark for each relevant reference to this business (max 2). Points might include:
Develop strong brand image / generate good publicity / better reputation [k] for its food [app]
Keep customer loyalty/remain competitive [k] which may help as spending patterns change [app]
Can charge high/premium prices [k] which may help cover any effect of exchange rates [app]
Lower costs/less wastage [k] at the factory [app]
Fewer customer complaints/returns [k]
Attract new customers/increase sales [k]
To meet legal requirements [k] such as food standards [app]
It adds value [k] Other appropriate responses should be credited. 4 To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words are likely to be appropriate for this question:
Food or related words such as ingredients, breakfast cereal, bread
Manufacture
(Consumer) spending patterns change
Factory
Exchange rates
(15% of raw) materials are imported
Lean production Other appropriate examples can be credited.
2(d)[6]
Explain two benefits to NSL of using lean production. Award 1 mark for identification of each relevant benefit (max 2). Award 1 mark for each relevant reference to this business (max 2). Award 1 mark for each relevant explanation (max 2). Points might include:
Fewer mistakes/errors [k] so less rework / lower repair costs / may improve reputation [an] as maintaining quality is important [app]
Less inventory held [k] of imported materials [app] lowering storage costs/amount of working capital [an]
Cut out some processes [k] when making the food [app] which speeds up production / increase productivity [an]
Increase motivation [k] leading to lower absenteeism / reduce labour turnover [an] at the factory [app]
Less waste of time/ materials OR improved efficiency [k]quicker/increased output [an]
Lower (unit) costs [k] improving competitiveness [an] Other appropriate responses should be credited. 6 To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made. The following words are likely to be appropriate for this question:
Food or related words such as ingredients, breakfast cereal, bread
Manufacture
(Consumer) spending patterns change
Factory
Exchange rates
(15% of raw) materials are imported
Maintaining quality Other appropriate examples can be credited. Some points can be awarded as [k] or [an] but only award the same point once e.g. waste, productivity, lower cost
2(e)[6]
Explain two methods of market research a business could use to help make business decisions. Which is likely to be the best method for a manufacturing business to use? Justify your answer. Award up to 2 marks for identification of relevant points. Award up to 2 marks for relevant development of points. Award up to 2 marks for a justified decision as to which is the best method of market research for a manufacturing business to use to make business decisions. Points might include:
Government sources/statistics [k] provide information from a wide number of people [an]
Using internet/online sources [k] which is free / low cost / immediately available [an]
Information from trade associations/journals [k] as specifically about the industry [an]
Market research agency reports [k] can often be expensive/provide detailed information [an]
Questionnaire [k] as provides up-to-date information / specific to the business [an]
Interviews [k] to obtain in depth details/opinions [an]
Survey [k] can reach out to more/large number of people [an]
Focus group [k] as it provides detailed information / allows for follow-up questions [an]
Test marketing [k] so the cost of any problem is limited to a smaller number of products [an]
Observation [k] low cost [an]
Newspapers/magazines [k] Other appropriate responses should be credited. 6 This is a general question so there are no marks for application. Candidates must identify the method of market research to access the knowledge marks not just state primary/secondary. Analysis can refer to an advantage/disadvantage of method. Some development can be used for more point, but only award once. Guidance Justification might include: Government statistics [k] provide information from a wide number of people [an]. A focus group [k] can provide detailed information about consumer tastes [an]. Government statistics are better because they are based on wide samples whereas a focus group is based on a few existing customers so it may not identify what is happening in the market overall so the business may not produce the right product. [eval] [eval]

Practise this paper →

Make a free account to save your answers and see your weak topics and ask the AI why a wrong answer is wrong.