Delivery To You (DTY) DTY is a public limited company in the tertiary sector. DTY delivers packages for businesses in country A. DTY's main customers are large online retail businesses. These businesses pay DTY to deliver products to customers who have purchased them online. DTY has recently published its income statement for 2017 (see Table 1). Table 1: Extract from DTY's income statement for 2017 $m Revenue 45 Cost of sales 30 Gross profit 15 Expenses, interest and tax 10 The Board of Directors decided that retained earnings should be at a high level of 80% of profit for the year. The Board of Directors is keen to expand the business by delivering packages within a new country. This planned expansion will require 10 delivery drivers. To aid the recruitment process, the human resource manager has created a person specification (see Table 2). Table 2: Person specification for a delivery driver Characteristic Essential Desirable Qualifications Driving licence A-Level or high school standard Physical Good eyesight Fit enough to lift heavy packages None Experience None Experience of dealing with customers/consumers Personal qualities Confident Friendly Good communicator There are a number of factors that will determine the country chosen for the expansion. The Board of Directors has asked the marketing manager to carry out some primary and secondary market research so that it is able to make a good decision.

Mark scheme

Marking points from the official mark scheme (May/June 2018). The mark or mark type is shown in brackets.

1. [2] (a)(i) A correct definition
2. [1] (a)(i) A partial, vague or unfocused definition
3. [0] (a)(i) No creditable content
4. (a)(i) Made up of businesses which sell services to consumers.
5. [1] (a)(ii) Award one mark for each point of explanation: Example or some other way of showing good understanding
6. [1] (a)(ii) Explanation of manager/management
7. [1] (a)(ii) Explanation of human resource
8. (a)(ii) Human resources are the workers/labour used within a business
9. (a)(ii) Management requires the planning, co-ordination, organisation, motivation etc. of these human resources
10. [2] (b)(i) Correct answer with or without working
11. [1] (b)(i) Correct use of figures/formula
12. [0] (b)(i) No creditable content
13. (b)(i) 80% of profit for the year
14. (b)(i) $15m – $10m = $5m (profit for the year)
15. (b)(i) $5m × 80% = $4m
16. [4] (b)(ii) Explanation of two effects of a high level of retained profit in context
17. [3] (b)(ii) Explanation of one effect of a high level of retained profit in context
18. [2] (b)(ii) Explanation of two effects of a high level of retained profit
19. [1] (b)(ii) Explanation of one effect of a high level of retained profit
20. [0] (b)(ii) No creditable content
21. (b)(ii) Shareholders may sell their shares (DTY is a PLC) reducing the share price and leading to a potential takeover of DTY
22. (b)(ii) Poor image for DTY – may be seen as a sigh of weakness in the market
23. (b)(ii) Shareholders may expect a bigger dividend in the future
24. (b)(ii) Can afford to expand the business - retained profits will be a source of finance
25. (b)(ii) DTY might avoid taking expensive external finance
26. (b)(ii) Will reduce the gearing of DTY
27. (b)(ii) Can be used to improve cash flow/working capital
28. [4] (c) Shows understanding of how DTY could use two or more methods of recruitment
29. [3] (c) Shows understanding of how DTY could use one method of recruitment
30. [2] (c) Shows knowledge of two or more methods of recruitment
31. [1] (c) Shows knowledge of one method of recruitment
32. [0] (c) No creditable content
33. [4] (c) Good analysis of two method of recruitment in context
34. [3] (c) Good analysis of one method of recruitment in context
35. [2] (c) Limited analysis of two methods of recruitment
36. [1] (c) Limited analysis of one method of recruitment
37. (c) Internal recruitment – unlikely to be possible because of expansion
38. (c) Job advertisements – obvious places such as newspaper. Qualifications are not specialist so could be in mass media
39. (c) Job centres
40. (c) Specialist online job websites
41. (c) Recruitment agency
42. (c) Personal recommendations
43. (c) Social media recruitment
44. (c) Recruitment from schools
45. (c) Direct recruitment – poster in window, advert on vans etc.
46. (c) ARA
47. [7] (d) A justified judgement of the methods of market research DTY could use to decide on locations for expansion
48. [6] (d) A recommendation of the methods of market research DTY could use to decide on locations for expansion
49. [5] (d) A balanced argument (two-sided) that evaluates methods of market research in context
50. [4] (d) Argument (one-sided) based on two methods of market research in context
51. [3] (d) Argument (one-sided) based on one method of market research in context
52. [2] (d) Limited analysis of two methods of market research
53. [1] (d) Limited analysis of one method of market research
54. [0] (d) No creditable content
55. (d) Primary: Surveys
56. (d) Primary: Focus Groups
57. (d) Primary: Interviews
58. (d) Primary: Observation
59. (d) Primary: Field Trials/Testing
60. (d) Secondary: Internal source – accounts, sales figures, inventory figures etc.
61. (d) Secondary: External sources - competitors, government, census data, internet
62. (d) ARA