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O-LevelCommerceAdvertising7100/21 · Oct/Nov 2015 · Q720 Marks

Perry plans to open a café called Perry's Pantry, selling sandwiches, burgers, cakes and drinks. Perry has designed the advertisement shown in Fig. 3. [Figure 3]

  1. (a)(i)Suggest one possible advertising medium for this advertisement.[1]
  2. (a)(ii)Discuss whether or not this advertisement is likely to be successful. Give reasons for your answer.[6]
  3. (b)Perry investigated the possibility of taking a franchise. He decided against it. Explain two possible reasons for his decision.[4]
  4. (c)Explain why Perry will need storage in his café.[4]
  5. (d)Explain why Perry has decided not to offer credit to his customers.[3]
  6. (e)Perry's sandwiches cost him $1 to make. He wants a mark-up of 90%. How much should he charge for his sandwiches? Show your working.[2]

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Mark scheme

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

  1. [1] One mark for flyer/local newspaper/local TV/cinema/internet/board/posters outside the café
  2. [6] Level 2 (4-6 marks)
  3. Candidate has discussed whether or not the advertisement is likely to be successful and has given a reasoned opinion.
  4. (If a candidate has given a one-sided argument, award 4 marks max).
  5. The advertisement is both informative and persuasive. It gives the name of the café and says when it is opening. It does not, however, give any more details such as the location of the café so no one will know where it is. It does not give its times of opening so potential customers will not know when to come. It does not give details of the kinds of food and drinks on offer. The advertisement is persuasive in the sense that it advertises lots of good food. This might tempt people to come to see for themselves especially as there is a sales promotion in the advertisement – the first drink free.
  6. If the advertisement is to compete against the advertising undertaken by other cafes and food and beverage outlets, it may be successful as long as Perry can produce what he is advertising - lots of good food.
  7. We do not know where the advertisement will be placed. If it is outside the café, it might be successful and attract attention. We do not know how large the fonts will be or if the advertisement will be in colour. Although the advertisement has some information, it is unlikely to be successful as some of the important information has been omitted.
  8. NB. The advantages or disadvantages of a particular medium as given in 7(a)(i) above must be accepted.
  9. Level 1 (1-2 marks)
  10. Candidate has commented on whether or not the advertisement is likely to be successful with/without an opinion.
  11. The advertisement gives information. It gives the name of the café. It says when it is opening. It does not say where the café is. The advertisement tries to persuade people. It advertises good food. It gives a special offer of a free drink. The advert might be successful. It will depend on where it is put.
  12. [4] Any two reasons explained × 2 marks each
  13. • He may have been asked to invest too much money (1) and he could not raise that money (1)
  14. • He did not want to be tied to another company (1) and have to obey its rules (1)
  15. • He did not want to make annual royalty payments (1) to the parent company from his turnover (1)
  16. • He did not want to offer the range of products offered by the franchise company (1) but wanted to use a range of suppliers (1)
  17. • He wanted the flexibility of working for himself and making his own decisions
  18. • He wanted to have ownership of a business (1) rather than lease a business opportunity (1)
  19. • He did not want to risk losing franchise (1) due to his errors (1)
  20. Any other relevant reason explained
  21. [4] Any four reasons × 1 mark each or two well-developed points × 2 marks
  22. • To keep his supplies of food and drinks
  23. • To enable him to meet demand (1) and not run out of products (1)
  24. • To keep the ingredients needed to make some of his products
  25. • To protect his supplies (1) from theft/damage (1)
  26. • To keep some of his products refrigerated (1) as they are perishable (1)
  27. • To enable him to buy some of his products at intervals
  28. • Because some of his products are perishable (1) and delivered daily (1)
  29. • So that supplies are not stored in the café or kitchen
  30. • To maintain a tidy appearance
  31. Any other relevant point
  32. [3] Any three points × 1 mark and up to 2 marks for a well-developed point –
  33. • The products he offers are not costly (1)
  34. • People are unlikely to have large bills (1)
  35. • He wants the cash (1) in order to buy further supplies (1)
  36. • He cannot afford bad debts (1) or the paperwork offering credit would create (1)
  37. • Many of his customers prefer to pay with cash (1) or with debit cards (1)
  38. • Other cafes around may not offer credit (1)
  39. Any other relevant point
  40. [2] 90% of $1 = 90c = mark-up (1 mark) $1 + 90c = $1.90 (1 mark)
  41. OFR applies. If a candidate gives the correct answer without working, award full marks.

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About this question

Topic
Advertising, O-Level Commerce (syllabus 7100). Structured question, 20 marks.
Source
O-Level Commerce, Oct/Nov 2015 Paper 2 Variant 1, question 7.

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