General Certificate of Secondary Education
2010
Business Studies B
Written Paper
[G3702]
Monday 7 June 2010
HIGHER PAPER
FINAL
MARK
SCHEME
Question 1
Marks
1a
A=3
B=2
C=1
1b
Although the question asks for 1 advantage explained you can accept
two statements that are linked :
eg
By expanding by selling franchises they get capital from the start-up
fee (1) and royalties from the franchisees (1)
(1 mark)
(1 mark)
(1 mark)
3
2
The franchisors do not need to raise all the capital to fund the
expansion (1) as this is provided by franchisees (1) buying into the
business
Expansion may be quicker (1) as people can buy into the business
and open up franchises (1)
Can open a large number of outlets (1) without having the
responsibility for running each outlet (1)
Receive a fee from franchises to buy a franchise (1)
Will receive royalties (1) from franchisees.
1c
Not accepting 4 separate points - must be 2 points with
development for 4 marks.
2+2
The franchisor provided training for franchisees (1) on how to run
their franchise (1).
The franchisor provided national advertising (1) so that the
franchisees product is well known by consumers (1).
Franchisee will have a known brand (1) which will be trusted by
consumers (1).
Franchisee will receive supply chain links for equipment and stock
(1).
1d
To get full marks candidates must refer to sales and profits as that is
what the question is asking!
3
As unemployment rises consumers will have less money to spend (1).
Therefore sales of pizzas are likely to fall (1). If sales fall then so will
profits (1).
As people are worse off they may decide to buy pizzas rather than
eating out (1) and therefore M&M sales might actually rise (1) and so
will profits (1).
GCSE G3702 BStd Higher FINAL Mark Scheme 2010
2
Question 1
1e
The number of American tourists should increase (1) as their dollars
now buy more pounds (1).
Marks
2
Also reward “now it’s cheaper for Americans to come to the UK” (1).
Award 1 mark for any sensible use of the figures provided in the
question.
1f
Span of control = the number (amount) (1) of people somebody is in
charge of/has power over/is responsible for (1).
3
Plus 1 mark for an example from the organisation chart.
1g
This is the route (1) through which orders (commands) have to go
through to get to the intended recipient (1).
3
Plus 1 mark for an example from the organisation chart.
Take care not to credit answers which are definitions of hierarchy or
span of control.
GCSE G3702 BStd Higher FINAL Mark Scheme 2010
3
Question 2
Marks
2a
Correct order is: 1 mark for each correct letter (4 marks max)
E, B, A, D
4
2b
Person spec: 1 mark each
B
D
4
2c
Candidates may discuss just one option or both.
Job description: 1 mark each
A
C
4
Candidates can be awarded 2 x 1 marks for explaining the terms
‘off the job’ and ‘on the job’.
On the job training takes place inside the business (1). Off the job
takes place outside the business usually at a training centre / college/
etc (1).
Up to 4 can be awarded for looking at advantages /
disadvantages of both - looking for 4 x 1 points;
eg: On the job - the following are rewardable points : its better as its
cheaper (1) as no travel or course fees need to be paid (1). The
worker gets to train in the place where he/she will work (1). They get
to meet the staff they will work with (1). They get to use the
equipment they will use each day in their job (1). They also get to
deal with customers (1). It allows the manager to see how well they
actually perform when training for the job (1)
eg: Off the job - the following are rewardable points - its better as
you don't want trainees producing pizzas as customers may be
unhappy with the product/service they receive (1). Avoids the
problem of the trainee picking up bad habits that he/she may be
taught in on-the-job training (1). Also means that your staff can get
on with their jobs rather than stopping to train somebody (1).
Trainees are under less pressure and may learn more fully than if its
done on-the-job (1).
Candidates can also be credited if they suggest it depends on the
type of job eg working in the kitchen is more suited to on-the-job but
somebody appointed as a manager might benefit more from off-thejob training.
2d
Any two of (1 mark each)
Dismissal occurs when a worker has done something wrong (1)
Redundancy is not a worker’s fault (1)
Redundant workers may be entitled to redundancy pay (1)
If you are dismissed you do not get any payment (1)
Redundancy – the job is removed not the person (1).
1+1
2e
The three needs being met are:
6x1
Physiological needs (1) as is being paid well above the minimum
wage (1)
Safety and security needs (1) as she has a permanent contract (1)
Love needs (1) as she is part of a team which she enjoys (1)
GCSE G3702 BStd Higher FINAL Mark Scheme 2010
4
Question 3
3a
Marks
2
debentures
overdraft

factoring

leasing
1 mark each
3b
Fixed assets are items owned (1) by a business that usually last more
than 12 months (1).
3
Plus 1 mark for a suitable example eg land, buildings, machinery,
patents, brand names.
3c
If candidate shows correct working for both ratios but then gets both
answers wrong then award 1 mark.
1+1
If candidate simply puts in both right answers with no working still
award 2 marks.
If puts a £ sign before answers and/or ‘m’ after the answers then 1
mark only if both figures are correct.
Current ratio
= 50
=1.25
1 mark
= 0.625
1 mark
40
Acid test ratio
=25
40
GCSE G3702 BStd Higher FINAL Mark Scheme 2010
5
Question 3
3d
Can choose either option as correct / incorrect option.
Marks
3+3
Chosen source = bank loan – no marks for choice.
NOT rewarding for either method statements that say that large
sums of money can be raised this way.
Reasons :
Can be arranged quickly (1).
Can be paid back over a long period (1) from profits made from the
new restaurants (1).
Not chosen = shares – no marks for choice
Shares – takes too long to organise (1), ownership is diluted / may
lose control (1) and shareholders will expect dividends which reduces
retained profits (1), no guarantee that shares will actually sell (1).
Selling shares in the current economic climate may be difficult (1).
OR
Chosen source = shares – no marks for choice
No interest charges (1) so profits are higher (1).
Does not have to be paid back / not in debt (1).
Not chosen = bank loan – no marks for choice
Bank loan – interest charges have to be paid (1) which reduce profits
(1) and it puts the business into debt which if not repaid can result in
bankruptcy (1).
GCSE G3702 BStd Higher FINAL Mark Scheme 2010
6
Question 3
3e
Franchise A is better – 1 mark
Marks
1+6
Franchise B is better – 0 marks
Max of 6 marks for reasons why Franchise A is better.
Max of 3 marks for reasons why Franchise B is better.
Franchise A is better because (max of 6 marks) :
Candidates may quote figures to back up statements but marks
can still be awarded without any figures quoted.
NOT awarding marks for describing changes in overheads as
marks will be gained from the needed comment on net profit
trends.
Sales are growing by are growing faster (1) than those of Franchise
B (1). Can quote figures to back this up but can award marks without
the figures.
Its gross profits are growing each year (1) and are growing faster than
B’s (1).
Its net profits have increased each year (1) whilst B’s net profits have
fallen (1).
Franchise B is better because (max of 3 marks) :
Only awarding 1 mark per statement about each of sales, gross
profits and net profits. No marks for discussing overheads.
Its sales are always higher than sales made by Franchise A (1).
Its Gross profits are bigger each year than Franchise A’s (1).
Its total net profit over the 3 years is greater than that of Franchise .
(1).
GCSE G3702 BStd Higher FINAL Mark Scheme 2010
7
Question 4
4a
Sales should increase / market will expand (1) as customers can
order 24x7/ as easier for customers to place orders(1).
Marks
2+2
Will be able to reach new markets / people that aren’t near to an
M&M outlet(1).
Sales will increase (1) which will lead to an increase in profits (1).
Will get paid straight away (1) and less cash is handled (1).
Less staff needed to take telephone orders (1) which saves the
business money on wages (1).
It will improve their reputation (1).
They will have more satisfied customers (1) which may increase
brand loyalty (1).
NOT awarding marks for general statements about being able to
advertise more/ cheaply on their website but can award 1 mark if they
refer to using the website to make special offers.
4b
Costs of raw materials, wages, rent etc (any 1 for 1 mark). The
higher these are the higher will be the price they need to charge to
make a profit (1) OR If they decide to use high quality ingredients
which are expensive (1) then their range of pizzas will need higher
prices if they are to make a profit (1).
2+2
Need to take into account the prices charged by their rivals (1) if rivals
cut their prices then M&M might need to cut theirs too (1).
In a recession sales may fall (1) so lower prices may be needed to
stimulate sales (1).
Their target market and their income level (1).
A maximum of 1 mark if candidate talks about the size of the pizza
and its toppings eg a 12” pizza will be more expensive than a 9 inch
and one with meat will be more expensive than one with just tomato
on it.
GCSE G3702 BStd Higher FINAL Mark Scheme 2010
8
Question 4
4c
These must be problems that arise selling abroad not selling in UK.
Marks
3x2
Tastes may be different in France (1) so they may need to alter their
recipes /ingredients (1) to suit French tastes.
Different currency (1) – the French use the Euro and changes in the £
- euro exchange rate may affect profitability (1).
Different currency (1) – may lead to increased transactions costs
when euros are converted to £s (1).
Packaging will need to be altered (1) as all the information will need
to be in French (1).
Rules and regulations may be different in France (1) and they may
need to alter their product/ packaging as a result (1).
Will need to find new suppliers of ingredients in France (1).
Business is unknown in France (1) therefore money will need to be
spent on advertising and creating band awareness (1).
Will need to employ staff in the UK that are bi-lingual (1) to deal with
issues that arise with French outlets (1).
Marketing may need to be amended (1) to appeal to French
customers (1).
May need to set up a management structure in France (1) to look
after all the French shops and this will increase costs (1).
NOT awarding ‘increased transport costs’ as the ingredients would
be sourced in France not in the UK.
GCSE G3702 BStd Higher FINAL Mark Scheme 2010
9
Question 4
4d
Can choose either Penetration pricing or Destroyer pricing as chosen
strategy.
Marks
1+3+1+1
Cannot choose Price Skimming as their product is similar to their
rivals.
Chosen strategy – Penetration or destroyer = 1 mark
Reasons :
Penetration – This means they will set prices low prices / prices
below that of its rivals (1) and therefore tempt customers away from
these two companies (1) and once they have their loyalty they can
charge a similar price to their rivals (1).
Destroyer – This strategy involves selling your product at a very low
price to drive your rivals out of business (1). It needs to do this as
there are two established rivals (1).
Once they have been driven out of business it can raise prices (1).
Reasons for not choosing a strategy ;
Price skimming – not appropriate as product is not unique / special
(1) – there are rival products already out there (1).
Destroyer pricing - very risky – may cause a price war (1) or it is
illegal (1), or may give a bad impression in terms of quality for a new
product/ firm (1), not a tactic that should be used by a new business
(1), will cause profits to fall dramatically/ cause large losses in short
run (1).
Penetration pricing - too risky as rivals are bigger (1), may result in
a price war (1) and may force you out of business instead (1).
GCSE G3702 BStd Higher FINAL Mark Scheme 2010
10
Question 5
Marks
5a
1 = Total Revenue or TR– 1 mark (NOT Sales or Total Sales)
2 = Total Costs or TC– 1 mark (NOT costs)
3 = Total Fixed Costs or TFC– 1 mark (NOT costs)
No alternatives accepted AT ALL.
3
5b
10000 – 1 mark (accept 9800 to 10200)
1
5c
£180 000 (1 mark) – £ sign not needed
1
5d
20 000 – accept any answer in the range of £17 000 to £23 000 (1 mark)
1
5e
4 000 (1) – it is 14 000 minus 10 000 (1)
2
5f
Any two of :
 Train them (1) so that they know how to provide good
customer service (1)

Have a system of Quality Assurance /TQM / Quality Circles
(1) where all workers aim to produce a good service (1)

Use Mystery shoppers (1) who will visit stores and check on
the quality of service provided (1)

Supervise/check upon staff service to customers (1)

Provide financial incentives (1) for staff who receive good
reports from mystery shoppers (1)

Have awards such as employee of the month (1) for staff who
provide the best customer service (1)

Get customer feedback (1) and use the results of this to solve
problems / improve the service offered (1)

By ensuring they recruit well suited and capable staff (1).
2+2
Max of 2 marks for suggestions that staff need to be polite, helpful,
provide a fast service, workplace should be clean etc.
GCSE G3702 BStd Higher FINAL Mark Scheme 2010
11
Question 5
5g
Site B is better site – no marks for choice of site.
Many candidates will score 6 – 8 marks on this question as long as
they refer to the data provided.
Marks
4x2
Site B is better because :
Is near a tourist attraction open on Saturdays (1) and market research
suggests that 40% of Saturday sales are from tourists (1)
There are a lot of people working locally (5000) / more than near site
A (1) which will provide a lot of potential customers on weekdays (1)
Is within walking distance of a major shopping centre (1) and market
research suggest shoppers make up 25% of sales on weekdays and
50% on Saturdays. (1)
There aren’t any rival sandwich businesses nearby (1) which is
means they are more likely to get business (1) / unlike site B which
has one from a major chain (1).
NOT rewarding – good transport links / well served by train, tube,
bus etc. as people don’t use these to get to the sandwich shop, they
use them to go to work, go to shopping centres, go to tourist
attractions.
If chooses Site A then a maximum of 3 marks for identifying all or
some of the 3 points below :
There are 1000 workers in factories nearby (1)
The two local schools may provide custom from schoolchildren (1)
They may get a lot of customers from football fans every other
Saturday (1).
GCSE G3702 BStd Higher FINAL Mark Scheme 2010
12