Flora is a self employed personal trainer and she trades as Flora's Fitness (FF). She invested $10000 as start-up capital. She has seen reports showing that keeping fit is becoming a trend in country P. ABC is a national bank with a focus on corporate social responsibility (CSR). Flora thinks there is an opportunity to provide group fitness sessions to employees at ABC's head office. These sessions could include exercises and stretching techniques. She could also offer yoga and other fitness related classes. These sessions would allow ABC to promote itself as a 'healthy employer'. Flora is keen to show the benefits of fitness sessions to ABC. A survey has shown that many employees do not currently visit gyms or fitness centres. High prices and lack of time are given as the most important reasons. She has arranged a meeting with John, the Human Resource Director at ABC. He is interested in offering fitness sessions as a fringe benefit for employees. He has asked Flora to provide a business proposal for the meeting. She plans to provide one session before work and one session at lunchtime five days per week. Flora proposed two pricing strategies (see Table 1.1). Table 1.1 - Proposed pricing strategies Pricing strategy 1 Price per person $5 Maximum 20 people per session Pricing strategy 2 Total price per session $75 Maximum 20 people per session

Mark scheme

Marking points from the official mark scheme (Feb/Mar 2021). The mark or mark type is shown in brackets.

1. [2] A full definition should cover the following: objectives/strategy focused on; economic, social and environmental benefits (people, profit and planets), triple bottom line (at least two)
2. [2] A business which aims to benefit society, the environment as well the owners
3. [2] Economic, social and environmental benefits not just about making profit
4. [1] A partial, vague or unfocused definition
5. [1] An objective to look after the environment
6. [1] Economic, social and environmental benefits
7. [1] Money invested to purchase everything necessary to set-up a business, e.g. machinery
8. [1] Money used to purchase everything necessary to launch a business
9. [1] Example or some other way of showing good understanding. Can be a use of start-up capital or a source.
10. [1] Understanding that it is to launch a business / set-up / seed money
11. [1] Understanding of the concept money invested, used in a business
12. [3] Correct answer (with or without working or $)
13. [2] Correct use of figures
14. [1] Correct formula
15. [$5 × 20 = $100 (per session)]
16. [$100 × 2 = $200 (per day)]
17. [$200 × 5 = $1000 (per week)]
18. [3] Answer = $1000 (accept with or without $)
19. OFR applies
20. Do not reward incorrect answers e.g. $500 or $200 without working.
21. [3] Explanation of one advantage to FF of pricing strategy 2. (APP + APP)
22. [2] Identification of one advantage to FF of pricing strategy 2. (APP)
23. [1] Knowledge of one or more pricing strategies. (K)
24. Possible advantages of pricing strategy 2 include: Guaranteed income no matter how many people Flora would get $75; Helps with cash flow – when Flora is starting the business.
25. [4] Shows understanding of two sources of secondary market information in context (Knowledge and Application)
26. [4] Good analysis of two sources of secondary market information in context (Analysis)
27. [3] Shows understanding of one source of secondary market information in context (Knowledge and Application)
28. [3] Good analysis of one source of secondary market information in context (Analysis)
29. [2] Shows knowledge of two sources of secondary market information with no context (Knowledge and Application)
30. [2] Limited analysis of two sources of secondary market information (Analysis)
31. [1] Shows knowledge of one source of secondary market information with no context (Knowledge and Application)
32. [1] Limited analysis of one source of secondary market information (Analysis)
33. Knowledge and understanding may include: Examples of sources of secondary market information: Reports; Census data; News reports; Magazines; Newspapers; Internet.
34. Application may include: Fitness activities (fitness market is in the question); $10000 start-up capital; ABC is a national bank with a focus on CSR; 'Healthy employer'; Why employees do not go to fitness centres.
35. Analysis may include: Impacts on the business that could arise from the secondary source research; Costs/limitations of the secondary research (out-dated); Benefits of the secondary research (quicker, cheaper etc.)
36. Exemplars: Published reports about keeping fit can provide data on current fitness trends which can influence her work out routines; News reports detailing fitness trends which can be done in lunch hours to meet target market needs.
37. [7] Justified evaluation/judgement based on argument in context (Analysis and Evaluation)
38. [6] Developed evaluation/judgement based on argument in context (Analysis and Evaluation)
39. [5] An evaluative statement/judgement based on argument in context (Analysis and Evaluation)
40. [3-4] Shows understanding of motivating employees in context (Knowledge and Application)
41. [4] Argument(s) based on two benefits of ABC offering employee fitness sessions (Analysis and Evaluation)
42. [3] Argument(s) based on one benefit of ABC offering employee fitness sessions (Analysis and Evaluation)
43. [1-2] Shows knowledge of motivating employees (Knowledge and Application)
44. [2] Limited analysis of two benefits of motivating employees (Analysis and Evaluation)
45. [1] Limited analysis of one benefit of motivating employees (Analysis and Evaluation)
46. Knowledge and understanding may include: Motivation; theory and practice; Fringe benefits and perks; HRM.
47. Application may include: ABC a national bank; ABC - focus on CSR; One session before work and one session at lunchtime; Paid by bank (discount/fringe benefit) for employees; Survey revealed that high prices and lack of time are reasons employees do not go to the gym; Fitness is becoming a trend in country P.
48. Analysis may include: Benefits of fitness sessions to employees; Impact on ABC of fitness session.
49. Evaluation: Extent of the benefit(s) to ABC; Benefit(s) of sessions vs costs to ABC; What the benefit(s) might depend on; number of participating employees, interest from ABC employees, etc.; A judgement over whether fitness sessions are more of a benefit than a cost to ABC; A judgement over which is the most important benefit to ABC.