Fizz Ltd is a multiple chain store which specialises in children's clothing.

Mark scheme

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

1. [1] Any one characteristic × 1 mark –
2. • Controlled by head office/consists of many branches/shop layouts are similar/
3. • Bulk buys from suppliers/may have regional distribution centres/
4. • Slow selling lines may be moved to other branches/
5. • Losses made in one branch may be covered by the other branches
6. Any other relevant point
7. [4] Any four points × 1 mark each or two well explained points × 2 marks each –
8. • Can buy in the quantities it requires (1) and so take advantage of economies of scale (1)
9. • Can obtain discounts (1) which it can pass on to its customers as lower prices (1)
10. • Can control the design / quality of what is produced
11. • May be able to have the children's clothing branded with its own brand
12. • Can avoid the costs of using wholesalers (1) and perform its own wholesaling functions (1)
13. • Likely to have own warehouse (1) to store clothes until required for sale (1)
14. Any other relevant point
15. [2] Any two points × 1 mark each or one well explained point × 2 marks
16. • Provides storage (1) from which the branches can be supplied (1)
17. • Enables supplies to be available to meet demand (1)
18. • Protects the goods against damage/theft/weather (1 mark only)
19. • Enables a variety of products to be assembled in one place ready for sale
20. Any other relevant point
21. [4] Any four points × 1 mark each or two well explained points × 2 marks –
22. • It is able to handle different types of payment
23. • It wishes to make payment as easy as possible for customers
24. • It helps to maintain its level of turnover
25. • Accepting a range of payments makes Fizz competitive with other multiples
26. • It may be offering online shopping so needs to accept computerised forms of payment (1) such as credit cards and debit cards (1)
27. • It reduces the amount of cash held on branch premises
28. • A range of transactions, large and small, are made in Fizz's branches daily
29. Any other relevant point
30. [3] Any three points × 1 mark each or up to 2 marks for a well explained point –
31. • Customers may be spending a great amount of money
32. • Some stores may be selling goods not fit for purpose
33. • Some stores may be using misleading advertising
34. • Some stores may be misleading customers about their credit payments
35. • Some stores may be selling unsafe products (1) e.g. faulty electrical equipment (1)
36. • Some stores may be selling goods that might damage consumers' health
37. • Some stores may not be describing their products correctly
38. • Customers need to be able to complain successfully (1) and obtain replacements/refunds (1)
39. Any other relevant point
40. [6] Level 2 (4-6 marks)
41. Candidate has discussed the two methods of selling Fizz Ltd uses and has given a reasoned opinion.
42. (If a candidate has discussed only one method of selling i.e. outlets in town centres or online, award 4 marks max).
43. Fizz Ltd sells through outlets in town centres because many people like to visit these places for their shopping. They like to view the products and the choice offered by shops grouped together before making their decision to buy. They may visit the town centre for a day out, not necessarily with the intention to buy. They may be attracted by the services offered such as restaurants and car parking. Being located in these places raises the profile of Fizz Ltd who, as a multiple chain store, is likely to have outlets in many of these places. Although the costs of leasing and operating these outlets are high, many multiple stores still have profitable outlets there.
44. At the same time it is important for Fizz Ltd to expand its online shopping service. Many customers do not have the time to visit shops and prefer to shop using the Internet. This trend is likely to continue and so Fizz Ltd must maintain an up-to-date website and make sure that the delivery of goods ordered is efficient.
45. Fizz Ltd may, in the long term, have to review the number of outlets it has and concentrate on the most profitable ones. As more and more consumers shop online, it is important that Fizz Ltd puts many of its resources into its e-retailing services.
46. Level 1 (1-3 marks)
47. Candidate has commented on one or both of the methods of selling that Fizz Ltd uses with/without an opinion.
48. Fizz Ltd sells through outlets in town centres. Many people like to visit these places for their shopping. They like to view the products before they buy. These outlets are costly to run. It is also important for Fizz Ltd to expand its online shopping service. Many customers like to shop using the Internet. This will increase. Fizz Ltd must concentrate on this.