NS is a private limited company set up by Saira and Chantal as a social enterprise. NS sells natural hair care products and focuses on customer (market) orientation. The main aims of Saira and Chantal include donating to local charities and improving gender equality in the workplace. NS began by selling its products to small, independent businesses in country H. NS expanded its range slowly based on customer feedback, specific requests on its blog, and sales data. NS explored additional finance opportunities required for expansion. NS approached John, who owns manufacturing facilities in country H and has significant marketing experience. He invested into NS in return for ownership of one third of the business. John's main aim is to increase long-term profits in order to maximise the return on his investment. In the five years since John's investment, NS has become the market leader in country H for natural hair care products. NS products are now sold in major cosmetic retailers. NS recently analysed its output in 2024 (see Table 1.1). Table 1.1 NS output data for 2024 Units Actual output level 145000 Capacity 150000 Saira and Chantal have decided to employ a Marketing Manager for NS. Fig 1.2 shows an extract from the job advertisement. Marketing Manager • Experience of growing brand awareness and using online channels of distribution. • Using budgets to monitor the performance of marketing campaigns. • Developing and maintaining relationships with external stakeholders. [Figure 1.2]

Mark scheme

Marking points from the official mark scheme (May/June 2025). The mark or mark type is shown in brackets.

1. [1] Identification of a feature may include: Owned by shareholders
2. [1] Identification of a feature may include: Cannot sell shares on the open market / stock market
3. [1] Identification of a feature may include: Sell shares for family/friends
4. [1] Identification of a feature may include: Can raise extra capital by selling shares
5. [1] Identification of a feature may include: Limited liability
6. [1] Identification of a feature may include: Continuity of operations
7. [1] Identification of a feature may include: Legal personality
8. [1] Identification of a feature may include: Incorporation
9. [1 AO1] Knowledge of customer orientation includes: Purchaser/buyer (accept consumer/end-user/target audience); Who they sell to; Demand-based (accept demand) OR Knowledge of orientation, including: Focused on customer/purchaser/buyer/consumer/end-user/market; Customer at the heart/centre; Satisfying their needs; Outward looking approach
10. [2 AO2] Explanation of customer orientation (developed application to NS context): includes putting the customer at the centre of decision making; an example of a customer orientated decision; methods of identifying customer wants/needs, e.g. customer feedback / specific requests on NS's blog / sales data; benefit of customer orientation, e.g. increased customer satisfaction, market leadership
11. [1] Formula: Rate of capacity utilisation = Current output level / Maximum output level × 100
12. [1] Use of correct figures in formula: 145000 / 150000 × 100
13. [1] Correct answer: 96.67(%) or 96.7 or 97
14. [1 AO1] Identification of a disadvantage of high capacity utilisation: Pressure on employees to work at full/near capacity constantly (accept anxiety / stress / need to work overtime)
15. [1 AO1] Identification of a disadvantage of high capacity utilisation: Pressure to keep employees motivated
16. [1 AO1] Identification of a disadvantage of high capacity utilisation: No margin for production errors / scheduling mistakes
17. [1 AO1] Identification of a disadvantage of high capacity utilisation: Cannot accept increased/additional orders
18. [1 AO1] Identification of a disadvantage of high capacity utilisation: No time for maintenance of machinery / machines break down a lot
19. [1 AO1] Identification of a disadvantage of high capacity utilisation: Over-production (accept inventory going off before it can be sold)
20. [1 AO1] Identification of a disadvantage of high capacity utilisation: Low inventory of inputs/raw materials / run out of materials
21. [1 AO1] Identification of a disadvantage of high capacity utilisation: No space left for finished product
22. [1 AO1] Identification of a disadvantage of high capacity utilisation: Not sustainable in the long-term
23. [2 AO2] Explanation of a disadvantage of high capacity utilisation with context (e.g. Pressure on employees to work at full/near capacity constantly – increased employee absenteeism / demotivation / increased labour turnover – reduced productivity long-term)
24. [1 AO1] Identification of a method of selection: Curriculum vitae (CV)
25. [1 AO1] Identification of a method of selection: Résumé
26. [1 AO1] Identification of a method of selection: Application forms
27. [1 AO1] Identification of a method of selection: Interviews
28. [1 AO1] Identification of a method of selection: References
29. [1 AO1] Identification of a method of selection: Testing
30. [1 AO1] Identification of a method of selection: Assessment centres
31. [1 AO1] Identification of a method of selection: Role play
32. [1 AO1] Identification of a method of selection: Presentations
33. [1 AO1] Identification of a method of selection: Appraisal records
34. [1 AO2] Application of selection method to NS for new Marketing Manager (e.g. Market leader for natural hair care)
35. [1 AO2] Application of selection method to NS for new Marketing Manager (e.g. Five years since John's investment)
36. [1 AO2] Application of selection method to NS for new Marketing Manager (e.g. Sold in major retailer)
37. [1 AO2] Application of selection method to NS for new Marketing Manager (e.g. Private limited company operated as a social enterprise)
38. [1 AO2] Application of selection method to NS for new Marketing Manager (e.g. Focuses on customer (market) orientation)
39. [1 AO2] Application of selection method to NS for new Marketing Manager (e.g. Aim to donate to local charities and improving gender equality in the workplace)
40. [1 AO2] Application of selection method to NS for new Marketing Manager (e.g. Expanded its range slowly based on customer feedback, specific requests on its blog, and sales data)
41. [1 AO2] Application of selection method to NS for new Marketing Manager (e.g. NS products are now sold in major cosmetic retailers)
42. [2 AO3] Analysis point: Curriculum vitae shows the applicant has required skills; reduces training costs / increases productivity – increasing profitability
43. [2 AO3] Analysis point: Application forms show required experience; all information is on the form so managers can save time when selecting candidates - this time can be used to make other operational decisions
44. [2 AO3] Analysis point: Interviews show understanding of aims; candidate understands what the business is aiming to achieve to do – which helps the aims to be met
45. [2 AO3] Analysis point: References provide proof of experience; improves customer service leading to customer satisfaction – increased market share
46. [1 AO1] Knowledge of likely reasons for conflict to arise: Aims / objectives / vision / mission
47. [1 AO1] Knowledge of likely reasons for conflict to arise: Idea / suggestions
48. [1 AO1] Knowledge of likely reasons for conflict to arise: Personal disagreements (brought into the workplace)
49. [1 AO1] Knowledge of likely reasons for conflict to arise: Communication
50. [1 AO1] Knowledge of likely reasons for conflict to arise: Speed of expansion
51. [1 AO1] Knowledge of likely reasons for conflict to arise: Cultures
52. [1 AO1] Knowledge of likely reasons for conflict to arise: Leadership styles / power
53. [1 AO1] Knowledge of likely reasons for conflict to arise: Choice of employees
54. [1 AO1] Knowledge of likely reasons for conflict to arise: Part-ownership / loss of control
55. [1 AO1] Knowledge of likely reasons for conflict to arise: Change of business ownership, e.g. move from private limited to public limited company
56. [1 AO1] Knowledge of likely reasons for conflict to arise: Finance
57. [1 AO1] Knowledge of likely reasons for conflict to arise: Personality (clash) / morale
58. [1 AO1] Knowledge of likely reasons for conflict to arise: Experience / job roles
59. [1 AO1] Knowledge of likely reasons for conflict to arise: Location
60. [1 AO2] Application of reasons for conflict to NS (e.g. Market leader for natural hair care)
61. [1 AO2] Application of reasons for conflict to NS (e.g. Five years since John's investment)
62. [1 AO2] Application of reasons for conflict to NS (e.g. Sold in major retailer)
63. [1 AO2] Application of reasons for conflict to NS (e.g. Private limited company operated as a social enterprise)
64. [1 AO2] Application of reasons for conflict to NS (e.g. Focuses on customer (market) orientation)
65. [1 AO2] Application of reasons for conflict to NS (e.g. Aim to donate to local charities and improving gender equality in the workplace)
66. [1 AO2] Application of reasons for conflict to NS (e.g. Use of data from Table 1.1)
67. [1 AO2] Application of reasons for conflict to NS (e.g. NS expanded its range slowly, based on customer feedback, specific requests on its blog, and sales data)
68. [1 AO2] Application of reasons for conflict to NS (e.g. NS products are now sold in major cosmetic retailers)
69. [1 AO2] Application of reasons for conflict to NS (e.g. John's main aim is to increase long-term profits to maximise return on investment)
70. [2 AO3] Analysis point: Aims/objectives; differing objectives may lead to fewer charitable donations – reduce marketing opportunities
71. [2 AO3] Analysis point: Idea/suggestions; longer decision making due to disagreements – competitors launch a new product before NS
72. [2 AO3] Analysis point: Communication; employees are given different instructions by different owners causing employee confusion and productivity reductions – leading to less profits
73. [2 AO3] Analysis point: Speed of expansion; one owner wants quicker expansion which the other owner does not want, leading to inefficiency – reducing profits
74. [2 AO3] Analysis point: Cultures; the culture of the two owners differ leading to inefficiency – increasing costs
75. [2 AO3] Analysis point: Choice of employees; the orientation may be lost leading to poor decision making – less profit
76. [2 AO3] Analysis point: Loss of control; the original owners' aims may not be considered in decision making – reducing customer satisfaction
77. [6 AO4] Evaluation point: Relative importance of aims and objectives – are other issues more important, e.g. potential personal income, the opportunity to take the brand to an international market
78. [6 AO4] Evaluation point: The likely impact on the business's performance / achievement of aims and objectives
79. [6 AO4] Evaluation point: The likely impact on different stakeholders
80. [6 AO4] Evaluation point: A judgement on the most likely reason for conflict between the owners of NS
81. [6 AO4] Evaluation point: The impact of the plan depends on the timescales, future aims and objectives and financial liquidity of PH. After downsizing the amount of revenue generated may not meet shareholder expectations
82. [6 AO4] Evaluation point: Will demand for premium accommodation increase in the future? What are the demands of students?
83. [6 AO4] Evaluation point: Should PH repurpose its accommodation for a different target audience, create a subsidiary brand and grow market share?
84. [6 AO4] Evaluation point: Is market share and size the most important measure of success, or is profitability more important?
85. [6 AO4] Evaluation point: The extension strategy may generate a short-term boost to sales/market share, but will it be sustained in the long-term?
86. [6 AO4] Evaluation point: A judgement on whether the course of action is suitable for PH.