Nasreen has owned a hairdressing salon for the last five years. She knows that hairdressing is a very competitive market and she is always worried about the survival of her business.

Mark scheme

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

1. [4] (a) 1 mark for stating an action and a further 1 mark for explaining the action, to a maximum of two actions (2 × 2 marks) • Nasreen could consider advertising her salon (1) This could be done by a leaflet drop/or in a local newspaper/The purpose of the advertising would be to inform potential customers about Nasreen's salon/ may be persuade them to visit it (1) • Nasreen could also use salon promotion (1) techniques, such as offering discounts to her customers/to attract customers (1) • Nasreen could also offer a loyalty bonus (1) such as every fourth haircut free (1) • Provide new services (1) e.g. nail polish (1) • Carry out market research (1) find out what customers wants (1) • Develop a website (1) to take online bookings/advertise the salon (1) Accept any other relevant points.
2. [4] (b) 1 mark for each action stated to a maximum of four actions (Any 4 × 1 marks) • Customer must obtain a medical report on her injury • Go to salon/telephone salon to lodge complaint • Customer must produce evidence that the injury was caused by a faulty hairdryer in Nasreen's salon/provide photographs • Make a note of the salon's name/address/hairdresser seen • Customer must follow up original complaint in writing • Customer must try to settle claim amicably/ask for refund/compensation • Complain to the Council/town hall • Contact solicitor • Start legal action/sue if necessary • Do nothing • Do not visit the salon in future • Tell family/friends • Write a bad review on social media/internet Accept any other relevant points.
3. [2] (c) (i) 1 mark for each characteristic identified to a maximum of two characteristics (Any 2 x 1 marks) • The product or service is developed/licensed by the franchisor • Agreement/contract (1) between franchisor and franchisee (1) • The franchisee trades under the name of the franchise/rents or leases the business/sells their goods • The franchisee pays royalties/fees/share of profits • The franchisee follows rules/regulations of franchisor • The franchisee is usually given sole rights in a particular geographical area • The franchisee is given help/training by the franchisor • Local/national advertising carried out by the franchisor • Stock supplied to franchisee by franchisor Accept any other relevant points.
4. [6] (c) (ii) Level 2 (4-6 marks) Has discussed whether or not Nareen should change from being her business to a franchise and has given a reasoned opinion (If a candidate has presented a one-sided argument, award 4 marks max.) Level 1 (1-3 marks) Has made some comments on franchises with/without an opinion • The service of the franchisor is well known and Nasreen will enjoy its good reputation • Nasreen will receive expert assistance from the franchisor • Reduces risk of failure for Nasreen • Some advertising by franchisor at no cost to Nasreen • Supplies from franchisor may be cheaper than on open market • Economies of scale • Loss of control – Nasreen cannot act independently, the policies of the business are those of the franchisor • Payments must be made to the franchisor, usually an up-front fee and an agreed percentage of turnover • Restricted to trade in only franchisor's services and related products Advantages and disadvantages are weighed. Decision relates to Nasreen, her existing business and competition and whether she feels sales revenue will increase and business will become more profitable. Accept any other relevant points.
5. [4] (d) 1 mark for each reason for packaging up to a total of four reasons • To make them attractive to consumers • Easy to identify/recognise goods • To protect the product from damage/deterioration/theft • Information/description of goods shown • To prolong the shelf life/freshness • To enable self-service • Easy to handle • Increase sales/profits • Differentiates goods from others/shows the brand • Helps to advertise • Easy to display • To encourage impulse buying from consumers Accept any other relevant points.