An and Bo have a business decorating and furnishing homes and offices. They understand the importance of good communication with suppliers and customers.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2016). The mark or mark type is shown in brackets.

1. [2] (a) (i) 1 mark for each telecommunication service named to a maximum of two services
2. • Telephone/mobile phone/cell phone
3. • Teleconferencing
4. • Videoconferencing
5. • Voicemail/voice call
6. • Fax
7. • Answering machines
8. • Internet
9. • Email
10. • Directory enquiries
11. • Telephone directories
12. • Phone cards
13. • Operator assistance
14. Accept any other relevant points.
15. [2] (ii) 1 mark for naming a suitable postal service and 1 further mark for describing it
16. • Registered post/special delivery (1) used for valuable items (1)
17. • Letter post (1) for sending, e.g. invoices (1)
18. • Parcel post (1) for sending bulky objects (1)
19. • Airmail (1) for sending letters/parcels abroad (1)
20. • Express delivery service (1) used to ensure fast delivery (1)
21. • Recorded delivery (1) when An and Bo need to be sure that the customer has received the communication/used for important items (1)
22. • Bulk posting/direct mail (1) used when An and Bo need to send leaflets to all their customers (1)
23. Accept any other relevant points.
24. [4] (b) (i) Up to 2 marks for each reason explained to a maximum of two reasons
25. • If the business is promoted successfully sales revenue will increase (1) as well as profit (1)
26. • To launch a new product (1) so as to make consumers aware/informed (1) through advertising (1)
27. • Sales promotions can be targeted at particular types of customer (1), e.g. offices (1) or to sell particular products (1), e.g. furniture (1)
28. • Sales promotions may be needed to counter competition/falling sales (1) and retain existing customers (1)
29. • To attract more customers (1) so to enlarge market (1)
30. • To gain competitive edge (1) over other rival stores (1)
31. Accept any other relevant points.
32. [6] (ii) Level 2 (4-6 marks) Has discussed three of the three sales promotions and has given a reasoned recommendation. (If a candidate has discussed only two sales promotions award 4 marks max).
33. Level 1 (1-3 marks) Has commented on one or more sales promotions with/without a recommendation
34. • The first promotion offers a 10% voucher for those spending more than $2000. Mr Allen would qualify for a voucher worth $1000.
35. • The second offers a free dining table of choice for spending over $5000. Mr Allen would qualify for a free dining table.
36. • The third offers two years interest free credit for orders received this year and Mr Allen would qualify as long as he orders this year. If Mr Allen borrows $10000 the interest at 5% would be $1000 over two years.
37. • Unless he intends to finance the whole order he is unlikely to take the free finance.
38. • The $1000 voucher would enable him to spend that on additional items.
39. • The free dining table would be taken if he intended to buy a dining table and if the price was more than $1000.
40. Accept any other relevant points.
41. [2] (c) (i) Up to 2 marks for a good explanation of working capital
42. • Working capital is the finance used (1) for the day-to-day running of the business (1), e.g. for paying wages/buying stock (1)
43. • Current assets minus current liabilities (2)
44. Accept any other relevant points.
45. [4] (ii) Up to 4 marks for explaining the importance of working capital to An and Bo's business
46. • It indicates whether a business can pay its bills (1) as it needs to do this to maintain its cash flow (1) and maintain its reputation (1) and ability to obtain credit/loans (1)
47. • It is essential that An and Bo have enough funds to pay their creditors (1) either from cash in the bank (1) or from an agreed overdraft facility at the bank (1)
48. • If An and Bo expands, increased amounts of stock/goods will be needed (1) which will be paid from working capital (1)
49. • Can be required to meet expenses (1), e.g. repairs (1)
50. • They must ensure that their debtors pay them on time (1) and that there is not too much stock (1) that cannot be quickly sold (1)
51. • A shortage of working capital will lead to difficulty in paying their creditors (1) which means they will stop supplying An and Bo (1) and eventually sue them for the debts (1)
52. Accept any other relevant points.