Business 9609/12 February/March 2024: question paper and mark scheme

Mark scheme

1(a) Define the term quaternary sector. 2 Indicative content Responses may include: AO1 Knowledge and understanding Clear understanding 2 marks • economic activity based on the intellectual or knowledge-based economy • consists of industries providing information services, such as computing, ICT (information and communication technologies), consultancy (offering advice to businesses) and R&D (research, particularly in scientific fields) Partial understanding 1 mark • sector of production • 4th economic sector • subset of tertiary sector • ICT/R&D/computing Accept all valid responses. 1(b) Explain one factor of production needed for business activity. 3 Indicative content Responses may include: AO1 Knowledge and understanding – 1 mark for identifying one factor of production needed for business activity. Use of any factor below as an input into the transformation process • land • labour • capital • enterprise AO2 Application – 2 marks for a developed explanation of one factor of production needed for business activity. 1 mark for a limited explanation of one factor of production needed for business activity. • choosing the location of the business, e.g. for shops, to build a factory, natural resources in the land such as water, oil, fields, woods. Land to fish, grow crops, drill for oil, mine • people that work in the business such as teachers, joiners, builders or doctors. Employees to work in the business, skilled and unskilled, their quality and experience • the money and equipment such as machinery or delivery trucks, used to produce the product or service • set of skills that develops new ways of doing things or new things to do. Ability to be creative and innovative, having an idea of how to use the land, labour and capital to make a profit, to create a business/product which will succeed in the market • start a business/risk taking/new ideas Accept all valid responses.

Mark scheme

2(a) Define the term dismissal. 2 Indicative content Responses may include: AO1 Knowledge and understanding Clear understanding of the term dismissal is worth 2 marks. • the act of removing or terminating the job or contract of employment of an employee • usually means that the termination was done by the employer and not a voluntary action by the employee • employee is dismissed for breaking contract/poor conduct Partial understanding of the term dismissal is worth 1 mark. • dismissal may also be referred to as termination, firing/fired or discharge • employee leaves the business (1) • an employee’s job is lost/finished (1) Accept all valid responses. 2(b) Explain one impact on employees of being trade union members. 3 Indicative content Responses may include: AO1 Knowledge and understanding – 1 mark for identifying one impact on employees of being trade union members. • better working conditions • improved pay • job security • ensure equality • information and support • empowerment • motivation • cost AO2 Application – 2 marks for developed explanation of one impact on employees of being trade union members. 1 mark for limited explanation of one impact on employees of being trade union members. • improved facilities, breaks, lighting, heating, safe and secure working conditions • collective bargaining on behalf of all their members • protect workers against unfair dismissal and equality and equity in how redundancy is carried out • support for people claiming compensation for workplace injuries • provide relevant information regarding established workplace regulations and procedures • involvement in business decisions • Maslow safety and security/social needs • cost of membership/industrial action can result in lost pay Accept all valid responses.

Mark scheme

3(a) Define the term trade receivables. 2 Indicative content Responses may include: AO1 Knowledge and understanding Clear understanding of the term trade receivables is worth 2 marks. • the amount owed by a business’ customers/debtors for products supplied (on credit) but not yet paid for • total amount a company has billed to a customer for goods and services (on credit) delivered but haven’t yet received payment for Partial understanding of the term trade receivables is worth 1 mark. • money owed Accept all valid responses. 3(b) Explain one reason why a business may need finance. 3 Indicative content Responses may include: AO1 Knowledge and understanding – 1 mark for identifying one reason why a business may need finance Reasons why a business may need finance include: • start up a business • grow/expand the business • survive • run the business • working capital • buy capital equipment AO2 Application – 2 marks for developed explanation of one reason why a business may need finance. 1 mark for limited explanation of one reason why a business may need finance. • start-up finance or capital, purchase assets e.g. premises, equipment, machinery, tools, vehicles • pay for market research and promotion to develop product and create demand • need more finance in the early stages before getting established or when facing a crisis • money to start trading, pay staff wages, utility bills and suppliers on time • having funds to pay for additional assets, new machinery, new staff, additional raw materials Accept all valid responses.

Mark scheme

4 Analyse one possible impact on a business of operating at below maximum capacity. 5 Indicative content Responses may include: AO1 Knowledge and understanding – 1 mark for identifying one impact on a business of operating at below maximum capacity Impacts of operating at below maximum capacity include: • low output • wasted resources • not competitive • adaptability • reduced costs AO2 Application – 2 marks for a developed application of one impact on a business of operating at below maximum capacity. 1 mark for limited application of one impact on a business of operating at below maximum capacity. • could produce more output with current resources but isn’t doing so • available resources are not being used fully e.g. workers and machines idle • paying fixed costs in areas which are not being fully used 4 • business is inefficient as resources not fully utilised • able to respond to unexpected increase in demand • buying less inventory AO3 Analysis – 2 marks for developed analysis of one impact on a business of operating at below maximum capacity. 1 mark for limited analysis of one impact on a business of operating at below maximum capacity • if demand exists the business could be earning more revenue and profit • fixed costs are spread over lower level of products so cost advantages are lost • discounts from bulk purchases may not be available so prices may need to increase • payment on fixed costs, resources not being fully used will increase the average costs of production • business will be less competitive in the market than its rivals • business could fail if high costs are not covered by sales of few outputs • take advantage of opportunities with resources which are not being used • need less storage space, might use JIT to reduce costs and waste Accept all valid responses.

Mark scheme

5(a) Analyse two limitations of sampling for a business. 8 There are 8 marks in total for 5(a) – 4 marks for each of the two limitations of sampling for a business: 1 mark for 1 mark for 2 marks for Indicative content Responses may include: AO1 Knowledge and understanding – 1 mark for identifying one limitation of sampling for a business. Limitations of sampling for a business include: • not totally reliable • difficulties in selecting a truly representative sample • sample size may be too small • chance of bias • inadequate knowledge in how to carry out sampling • time-consuming • expensive • dishonesty AO2 Application – 1 mark for application/explanation of one limitation of sampling for a business. • produces unreliable and inaccurate results if not representative of the whole target market • can involve biased selection of entire market when choice is not scientific 5(a) • biased responses due to dishonesty/ignorance/biased questions/lack of understanding by respondents • not all sampling techniques are truly random • requires adequate subject specific knowledge of sampling techniques • involves statistical analysis and calculation of probable error • complexity of selecting samples • pay researchers AO3 Analysis – up to 2 marks for analysis of one limitation. 2 marks for developed analysis of one limitation of sampling for a business L2 or 1 mark for limited analysis of one limitation of sampling for a business L1 • cannot have total confidence in results and can lead to making incorrect conclusions which affect choices made by business • there are several types of sampling methods and choosing the incorrect type will cause errors in results obtained and lead to wrong decisions being made • results from sampling need analysing correctly to apply results to the whole target market, which may involve using a marketing agency if the skills don’t already exist in the business • if the sample size is too small it may save money in the short term but in the long term may be a waste of money • time taken to carry out the market research process slows decision making • opportunity cost of using the money elsewhere in the business Accept all valid responses. 5(b) ‘Promotion is the most important element of the marketing mix for the success of a parcel delivery business.’ 12 Evaluate this view. 2 marks for 2 marks for 2 marks for 6 marks for Indicative content Responses may include: AO1 Knowledge and understanding – 2 marks for developed knowledge and understanding L2 1 mark for limited knowledge and understanding L1 • elements of the marketing mix • specific understanding of promotion AO2 Application – 2 marks for developed application L2 1 mark for limited application L1 • role/activities of parcel delivery business e.g. delivering on time • named business e.g. Amazon, DHL, DPD, Parcelforce, may be a small business AO3 Analysis – 2 marks for developed analysis L2 1 mark for limited analysis L1 • could be B2B or B2C, which affects type of promotion chosen to create more awareness of the business and more sales • could be B2B or B2C, which affects which element(s) of MM are most effective • could look at the benefits and limitations of all elements of MM which could lead to success of the business • may choose to compare those elements of the MM considered to be more applicable to this type of business e.g. price or promotion but can discuss product and place 5(b) • different types of promotion (or any element of the MM) can be carried out at different stages of the product life cycle • this is a service rather than a good therefore this could affect the choice of promotion type or element of MM • this may be an international business and size may play a role in achieving success • candidates may focus on the different types of promotion rather than other parts of the MM, which is a valid response AO4 Evaluation – 6 marks for Developed/Supported judgement in context L3 6 marks Developed/Reasonable evaluative comments in context L3 5 marks Developed/Supported judgement without context L2 4 marks Developed/Reasonable evaluative comments without context L2 3 marks Limited supported judgement L1 2 marks An attempt to balance the arguments/Weak attempt at evaluative comments L1 1 mark A judgment/conclusion is made as to whether promotion is the most important element of the marketing mix for the success of a parcel delivery business. These judgements/conclusions may be made at any point in the essay, not only in a concluding section. • what would be classed as success for this type of business? • would success be increasing number of sales, value of sales, market share? • how important is promotion for this type of business? Would it matter whether the delivery is B2B or B2C? • is the delivery business irrelevant to the product that is contained within the parcel? • what is most important regarding delivery to the customer? Speed, cost, quality of service, security, protection? • which elements of the MM can effectively be used? Candidates may find it difficult to apply all aspects of the MM but it can be done. This could be a differentiating factor in this evaluation. • the choice of the type of promotion or element of the MM may depend on how well known the business already is and what its objectives are. Accept all valid responses.

Mark scheme

6(a) Analyse two barriers to an entrepreneur when starting up a business. 8 8 marks in total for Q6(a): 4 marks for each of the two barriers to an entrepreneur when starting up a business. These 4 marks consist of: 1 mark for 1 mark for 2 marks for Indicative content Responses may include: AO1 Knowledge and understanding – 1 mark for identifying one barrier • identifying business opportunities • obtaining finance • finding a location • competition • building a customer base AO2 Application – 1 mark for application of one barrier • could be based own hobbies, previous experience, ability to carry out market research, franchise opportunity • may have insufficient savings, not aware of sources of finance available, not trading records to present to a bank, poor business plan • working from home could be easiest but premises may be needed for some businesses • difficult to enter a market with established competitors • need to stand out to attract consumers 6(a) AO3 Analysis – up to 2 marks for analysis of each barrier. 2 marks for developed analysis of each barrier L2 1 mark for limited analysis of each barrier L1 • can be easy to start a business on a small scale using own knowledge but the demand for the product may be limited and therefore it can be difficult to earn enough to survive • finance is more difficult to obtain for an entrepreneur than it is for an established business. It is important to have the finance to start the business, perhaps using less traditional sources such as crowd funding or micro finance • whether the entrepreneur can work from home depends on the type of business. A service business such as website designer or having no need to communicate with customers face-to-face e.g. e-commerce can easily be carried out at home and can be cheaper, although there is no separation between work and private life or tensions might arise between other members of the household. Other businesses must have premises with the appropriate equipment such as a hairdresser or retail store • need a product that is unique to enter a new market as established competitors have cost advantages, loyal customers, greater reputation and more money to spend on promotion. • the entrepreneur could provide more personal customer service, knowledgeable pre- and after-sales service, personalised products. Accept all valid responses. 6(b) ‘The most important objective of a public sector energy supplier is the environmental objective.’ 12 Evaluate this view. 2 marks for 2 marks for 2 marks for 6 marks for Indicative content Responses may include: AO1 Knowledge and understanding – 2 marks for developed knowledge and understanding L2 1 mark for limited knowledge and understanding L1 • objectives • public sector • environmental objective AO2 Application – 2 marks for developed application L2 1 mark for limited application L1 • energy supplier • utility e.g. gas, electricity, oil, solar energy, wind power • pollution e.g. air, noise, chemical AO3 Analysis – 2 marks for developed analysis L2 1 mark for limited analysis L1 • objectives may vary in the public sector. Usually equitable provision of merit goods/services • objectives of a public sector business are unlikely to be driven by competition or profit so prices can be kept lower • there is opportunity cost of spending money on each area of provision e.g. education, defence, healthcare • energy supply is important in all countries and to businesses and consumers, so demand is high • a public sector business is funded by the government and is likely to have a national supply network, making it easier to meet the high demand 6(b) • there is the potential for exploitation of the environment e.g. China and coal • public sector may have to meet national/international objectives regarding pollution, renewable fuels, sustainability • the government has many demands on its funding and therefore the service given by a public sector energy supplier could be less efficient e.g. power cuts AO4 Evaluation – 6 marks for Developed/Supported judgement in context L3 6 marks Developed/Reasonable evaluative comments in context L3 5 marks Developed/Supported judgement without context L2 4 marks Developed/Reasonable evaluative comments without context L2 3 marks Limited supported judgement L1 2 marks An attempt to balance the arguments/Weak attempt at evaluative comments L1 1 mark A judgment/conclusion is made as to whether the most important objective of a public sector energy supplier is the environmental objective. These judgements/conclusions may be made at any point in the essay, not only in a concluding section. • there are different sources of energy e.g. some countries are fossil fuel dependent whilst others have the ability to develop new methods e.g. wind, water, solar • how wealthy is the country to develop these sources using the public sector? • does the public sector see energy supply as its most important priority? • is the private sector more likely to thrive where customers are influenced by environmental aspects rather than cost of energy? • how easy is it for the public sector to provide an energy supply at an affordable price e.g. if price of fuel rises, will the government have to subsidise the cost to the consumer to maintain standard of living? • should the most important objective be providing energy to all parts of the country regardless of the opportunity cost? Accept all valid responses.