The two chains of distribution shown in Fig. 1 may be used by a supermarket chain. [Figure 1] Use Fig. 1 to help you answer the following questions.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2015). The mark or mark type is shown in brackets.

1. [2] Any two points × 1 mark each – A supermarket company that has branches in many parts of a country (1), allow further 1 mark for general features of a supermarket e.g. sells food and household goods
2. Any other relevant point
3. [1] Any one point × 1 mark – • User of goods/services • Buys goods/services • Informs producers about what to produce
4. Any other relevant point
5. [4] Any two services described × 2 marks each –
6. • Purchasing in large quantities (1) so that the manufacturer does not have to deal with retailers in smaller quantities (1)
7. • Bearing the risk (1) of being unable to sell the goods as the wholesaler is buying ahead of demand (1)
8. • Clearing production lines (1) so that production can be ahead of demand (1)
9. • Providing information about the market (1) so the producer can produce goods that are in demand (1)
10. • Providing storage of goods (1) so that the manufacturer is saved storage costs (1)
11. • Making payments to manufacturers (1) so that they can continue production (1)
12. • Some wholesalers may supply raw materials from at home or abroad to manufacturers (1) e.g. cotton, wool, iron ore, wheat (1)
13. • Preparing some goods for sale (1) e.g. tea and coffee blending (1)
14. • Transportation of goods (1)
15. Any other relevant service described.
16. [6] Level 2 (4-6 marks)
17. Candidate has discussed both chains of distribution and has given a reasoned opinion as to which would be more suitable for the supermarket chain.
18. (If a candidate has discussed only one of the chains of distribution, award 4 marks max.)
19. The supermarket chain buys a variety of goods in very large quantities. It is likely to buy many of these goods directly from the producers because it has huge buying power and can negotiate favourable prices which it can then pass on to consumers in prices lower than if it had purchased through wholesalers. It has the capacity to store large quantities in its warehousing – regional distribution centres – and from there supply its supermarket branches to maintain their stock levels. It is also able to carry out many of the functions of a wholesaler using its RDCs such as breaking bulk, clearing suppliers' production lines and ensuring supplies.
20. It is possible that the supermarket chain might purchase some goods through wholesalers. Those goods it requires only in small quantities or imported produce such as fruits might be bought through wholesalers but the bulk of the goods its sells come directly from the producer or manufacturer.
21. Level 1 (1-3 marks)
22. Candidate has commented on one or both chains of distribution and may/may not have shown which is more suitable for the supermarket chain.
23. The supermarket chain buys a variety of goods in very large quantities. It is likely to buy many of these goods directly from the producers. It has huge buying power. It can negotiate low prices. It stores these goods in its regional distribution centres and supplies its supermarkets from there. The supermarket chain might purchase some goods using wholesalers. Most of its goods come directly from producers or manufacturers.
24. [4] Any four points × 1 mark or two well-developed points x 2 marks –
25. • Biscuits are easily broken (1) so the packaging protects them (1)
26. • A number of biscuits need to be grouped together
27. • To prolong their shelf life
28. • For hygiene reasons (1) especially when using self-service (1)
29. • To aid display (1) – the packets can be easily stacked (1)
30. • To enable information to be given on the packaging
31. • To enable branding to take place
32. • To attract customers (1) and make the product recognisable (1)
33. • To encourage impulse buying
34. • To give an impression of better value (1) – gold wrapping looks expensive (1)
35. Any other relevant point
36. [3] Any three actions × 1 mark each –
37. • Take back the biscuits to the shop with the receipt
38. • Ask for a refund
39. • Ask for a replacement
40. • Ask the shop to check on the rest of the stock
41. • Do nothing/eat the biscuits
42. • Ask to see manager
43. Zero marks for sue the shop/go to the police/go to a consumer organisation.
44. Any other relevant point