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Business Studies · Oct / Nov 2025 · Paper 22 · Question 4

0450

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  • 4(a)[8]

    Explain two reasons why high quality is important for FF Award 1 mark for each reason (max 2). Award a maximum of 3 additional marks for each explanation of the reason why high quality is important – one of which must be applied to this context. Reasons might include:

    To establish a brand image – so that customers are encouraged to buy the product – new customers are attracted
    To maintain a good reputation / to not gain a bad reputation – friends and family tell others about the goods/service which may lead to a good/bad reputation – increasing/decreasing sales
    To increase sales / attract more customers – due to customer needs being satisfied by the products supplied
    So that faulty products do not have to be replaced – which would reduce waste / ensures customer safety / avoids legal action
    Able to charge a high price – may lead to higher profit margin / as may increase added value For example: To maintain a good reputation (1)

    because if quality is not good then friends and family will tell others about the product which may lead to a bad reputation (1)

    and sales will be lower (1)

    for the new flower shop (app). Application could include: new shop/third shop;

    2 shops;

    flowers;

    source of finance required for working capital;

    weddings;

    bride/groom;

    ribbons;

    contribute to sustainable development;

    targets a niche market;

    4/8 employees at each shop;

    bride;

    average price paid is $2000;

    supplies purchased each day;

    supplies are fresh;

    uses job production;

    small business;

    marketing mix for the new shop;

    social media reviews.

  • 4(b)[12]

    Using Appendix 3 and other information, consider the following two ways FF could contribute to sustainable development. Which way should Kathryn choose? Justify your answer.

    Buying all flowers from sustainable sources
    Using electricity from renewable sources Level Description Sound application of knowledge and understanding of relevant business concepts using appropriate terminology. Detailed discussion of both ways. Well-justified recommendation. Candidates discussing two ways in detail, in context and with a well-justified recommendation, including why the alternative way 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 way. Judgement with some justification / some evaluation of choices made. Candidates discussing one way 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 ways with little/no explanation. Simple judgement with limited justification / limited evaluation of choices made. Candidates outlining the two ways in context should be rewarded with the top marks in the band. 1–4 No creditable response. Relevant points might include: Advantages Disadvantages Buying all flowers from sustainable sources
    Attract customers who are concerned about the environment if it is included in the advertising – increasing sales
    In the future sustainable sources will still be supplying flowers – more secure source of supply
    Sustainable sources are nearby in Main City which is good for the environment – as transport costs are lower and less polluting
    The average price on wedding flowers is $2000 and customers may not be willing to pay more for sustainably produced flowers – so prices remain the same and profit margins may need to be lower
    Costs increase by 25% for flowers for each average wedding flowers – if prices are raised then may make FF less competitive – losing sales Advantages Disadvantages Using electricity from renewable sources
    Savings of electricity after solar panels bought – $100 per week saving on electricity for each shop
    $5200 per year savings for each shop / $15 600 per year for all 3 shops
    These cost savings will continue into the future – after the installation costs are repaid
    May be able to reduce prices as costs of power are reduced – become more competitive
    High cost to install the solar panels – costs $6000 for each shop
    $18 000 if all 3 shops have solar panels
    May need to take out a loan – interest costs will increase – will increase cash outflow
    Relies on amount of sunlight each day – may be lower at different times of the year / difficult to store the electricity
    Maintenance cost for the solar panels Recommendation Justification may include:
    Kathryn should buy all FF’s flowers from sustainable sources as FF may attract many more customers who are concerned about the environment, and they may be willing to pay a higher price if 25% increased cost of the flowers is passed on to customers. Purchasing solar panels may require taking out a bank loan and this will increase expenses which FF may not be able to afford given FF is opening a new shop and already has to find ways to finance its working capital.
    Kathryn should use renewable energy to provide electricity for FF’s shops. This is an investment that will continue to save $300 each week for the 3 shops in the future and may help to make FF more competitive
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