Business Studies · May / June 2026 · Paper 11 · Question 4

0450

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TRC manufactures fruit smoothies in country X. Many of the ingredients used, including mangoes and strawberries, are imported. TRC will be affected by a depreciation in the exchange rate of country X. TRC is always developing new products. The marketing manager has to decide on suitable packaging for these new products. She also knows it is important that businesses respond to environmental pressures. 4

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4(a)[2]
Define ‘exchange rate depreciation’. Award 2 marks for a full definition. Award 1 mark for a partial definition.
A currency’s value falls against another currency [2]
Value of the currency goes down with respect to another (currency) [2]
Partial definition e.g.
Currency is weaker/falls [1]
Can buy less with currency [1]
2 For 2 marks must first show that there is a fall in value and this is in relation to another currency not money. Do not accept:
Exchange rate falls between countries
Numerical examples
4(b)[2]
Identify two reasons why a business might import raw materials. Award 1 mark for each relevant reason (max 2). Points might include:
Lower prices/cheaper (cost of materials) [k]
Wider choice/variety [k]
Products may not be available in own country [k]
Better quality [k]
Purchasing from ethical supplier [k]
Purchasing from environmentally friendly supplier [k] Other appropriate responses should be credited. 2 Only award the first two responses given.
4(c)[4]
Outline two benefits to TRC of developing new products. Award 1 mark for each relevant benefit (max 2). Award 1 mark for each relevant reference to this business (max 2). Points might include:
Increase sales / expand in existing markets/increase customer loyalty/ attract new customers [k] of smoothies [app]
Provide competitive advantage/unique selling point [k] which can feature on the packaging [app]
Enter new markets [k] by changing the ingredients [app]
Spread risk/diversification [k]
Can charge a high price [k]
Improves brand image/improved reputation [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:
smoothies
Ingredients/fruit/mangoes/ strawberries or related words e.g. flavours
Imported
Packaging
Environmental pressures
Depreciation/exchange rate Other appropriate examples can be credited.
4(d)[6]
Explain two roles of packaging for TRC. Award 1 mark for identification of each relevant role (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:
Protect the product / keep product fresh/safe / helps ensure quality [k] of its ingredients [app] to reduce wastage/ increasing repeat purchases [an]
(Promote) brand image/reputation/differentiate it from other products/ help recognition [k] of its smoothies [app] leading to brand loyalty/increased sales [an]
Add value/appear higher quality [k] may allow them to set higher price [an] for its new product [app]
Help advertise/attract customers [k] increase revenue/increase market share [an]
Carry information about the product / meet legal requirements [k]
Ease of storage/display [k]
Ease of transport [k]
Make the product easy/convenient to use [k] 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:
smoothies
Ingredients/ fruit/ mangoes/ strawberries or related words e.g. flavour/ nutritional information
(Developing a) new product
Environmental pressures
Imported
Exchange rates Other appropriate examples can be credited. Notes:
Accept brand image/sales as either [k] or [an] but not both.
4(e)[6]
Explain two reasons why a business might respond to environmental pressures. Which reason is likely to be the most important? 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 justified decision about which reason is likely to be the most important. Points might include:
Avoid pressure group action/boycotts/if don’t respond will lose sales or loyalty [k] which may damage brand image [an]
Protect reputation/brand image [k] which can increase sales [an] AND/OR increase/maintain customer loyalty [an]
Respond to changing customer demands [k] helps the business remain competitive [an]
Attract/maintain sales [k] to maintain/increase revenue [an]
Differentiate from competitors [k] which can allow them to increase price [an]
Avoid possible legal action/fines/gain tax breaks/legal requirement [k] which could increase costs [an]
Meet business objectives [k] Other appropriate responses should be credited. Justification might include: One benefit is that it allows the business to avoid pressure group action [k] which may damage brand image [an]. It could also help differentiate the business from its competitors [k] which could allow them to set higher prices [an]. Avoiding pressure group action is likely to be most important reason because a bad reputation is likely to lead to fewer sales [eval] and customers may not be willing to buy the products whatever the price set [eval]. 6 This is a generic question so there are no marks for application. To access evaluation must discuss two relevant reasons. For evaluation to be awarded justification will usually follow on from relevant analysis of points. Notes:
Some points could be awarded as [k] or [an], but only award once e.g. brand image, sales.
Some analysis can be awarded for different points, but only once.
Award only once ‘don’t respond will lose sales’ or ‘if do respond will attract sales’ Accept as [an] only:
May attract workers
May attract investors Do not award:
Ways to respond to environmental pressures
Avoid being closed down
Ethical issues
Taxation/taxes on their own
Cheaper

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