Business Studies · May / June 2025 · Paper 12 · Question 1

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NFC manufactures shoes using batch production. Quality assurance is used to maintain quality. NFC uses market segmentation. The Marketing Director is reviewing NFC’s product range. He 1 knows there are both benefits and limitations to developing new products. He also knows the promotion of products is important.

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1(a)[2]
Define ‘batch production’. Award 2 marks for a full definition. Award 1 mark for a partial definition.
Where a quantity/group of one product is made, then a quantity of another product will be produced [2]
A whole batch/group moves through the different stages of production together [2]
Partial definition e.g.
Similar items made together/items made in a group/set [1]
Moving together through different stages of production [1]
2 One mark for idea of a group/set of products.
1(b)[2]
Identify two aims of promotion. Award 1 mark for each aim (max 2). Points might include:
To raise awareness/inform/remind people about products/services
To persuade/attract (new) consumers / increase sales/revenue
To create/maintain brand/company image/reputation
Ensure/build customer loyalty/encourage repeat purchases
To introduce new products on to the market
To compete with competitors’ products/differentiate from competitors Other appropriate responses should be credited. 2 Only award the first two responses given.
1(c)[4]
Outline one advantage and one disadvantage to NFC of using quality assurance. Award 1 mark for each relevant advantage/disadvantage (max 2). Award 1 mark for each relevant reference to this business (max 2). Points might include: Advantages:
Errors can be spotted earlier/during production [k] of the shoes [app]
Can motivate employees [k] so may be willing to offer ideas for its product range [app]
No need to recruit quality inspectors [k] Disadvantages:
All (production) workers need training/time/cost to train workers [k] which may take funds away from developing new products [app]
Not all workers are interested/able to spot problems [k] during batch production [app]
May slow down production [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:
Shoes
Batch (production)
Promotion (of products)
Developing new products
Product range
Market segmentation Other appropriate examples can be credited.
1(d)[6]
Explain two benefits to NFC of using market segmentation. 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:
Can design/produce goods to meet specific needs of consumers/know what to produce [k] so that costs/materials are not wasted (producing wrong product) [an] especially as plan to develop new products [app]
Help target advertising/marketing strategies [k] to ensure maximum number of people see the products [an] which is an aim of promotion [app]
Identify gaps in the market/new opportunities [k] for its shoes [app] which can help spread risk [an]
May make marketing expenditure more effective [k] so do not waste money/resources [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:
Shoes
Batch production
Quality assurance
Promotion (of products)
Develop new products Other appropriate examples can be credited. Do not award answers about the benefits of market research.
1(e)[6]
Do you think the benefits of developing new products for a business are greater than the limitations? 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 whether the benefits of developing new products for a business are greater than the limitations. Points might include: Benefits:
Increase demand/customer (base)/sales [k] which may increase revenue/market share [an]
Can help spread risk/diversification [k] if sales fall for one product, this can be offset by sales of another product [an]
Provide competitive advantage/unique selling point (USP) [k] which could increase customer/brand loyalty [an]
Enter new markets [k]
Improve brand recognition/reputation [k] Limitations:
Must produce new/trial products/more raw materials [k] increases costs [an]
Need to carry out market research [k] increases cash outflows [an]
Need to launch/promote/market the new product [k]
Often requires large capital expenditure/cost of new machinery [k]
May need to recruit/train additional employees/specialists [k] Other appropriate responses should be credited. 6 This is a general question so there are no marks for application. To access evaluation must discuss at least one benefit and one limitation. For evaluation to be awarded justification will usually follow on from relevant analysis of points. Guidance Justification might include: New products can help increase potential sales [k] which increases revenue [an]. However, there is a cost of developing new products [k] which increases cash outflows [an]. The benefits of developing new products are greater because the extra revenue gained could cover the additional costs [eval] which can increase the chance of growth/long term survival [eval].

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