Fig. 1.1 shows a flyer sent to local businesses by Cheese4U. PLANNING AN EVENT? WHY NOT GET IN TOUCH WITH CHEESE4U, YOUR LOCAL SPECIALITY STORE? WE OFFER A WIDE SELECTION OF CHEESES INCLUDING HOMEMADE CHEESE PRODUCED ON OUR FARM. USE OUR WEBSITE WWW.CHEESE4U.COM TO CHOOSE FROM OUR RANGE OF CHEESES OR TO CREATE YOUR OWN CHEESEBOARD ON OUR ORDER FORM. WE WILL DELIVER DIRECTLY TO YOUR EVENT BY COURIER. [Figure 1.1 Cheese4U flyer] Use Fig. 1.1 to help you answer the following questions.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2020). The mark or mark type is shown in brackets.

1. [1] Primary / extractive / exhaustive / non-exhaustive / farming
2. [1] Secondary / manufacturing / construction
3. [1] Tertiary / commercial / indirect / direct / retailing.
4. [1] A form that allows a buyer or customer to order from / to order goods from a supplier / for a customer to request goods from the seller / to notify seller of goods required / to know what the buyer wants to buy / gives details of what the buyer wishes to order.
5. [Yes point 1] provides direct door-to-door service
6. [Yes point 2] couriers are flexible / no fixed timetables
7. [Yes point 3] no one else involved in the chain of distribution
8. [Yes point 4] can get to customer quickly / fast / before cheese goes bad / as cheese is a perishable
9. [Yes point 5] as some couriers will have refrigeration units
10. [Yes point 6] customers will be satisfied / pleased with service / creating good impression
11. [Yes point 7] means that the customer does not have to collect / who cannot collect
12. [Yes point 8] will attract customers / increase sales / increase customer loyalty / increases competitive edge
13. [Yes point 9] Cheese4U can concentrate on production
14. [Yes point 10] saves time for customer
15. [Yes point 11] couriers usually cheap to use / compared to other form / example of transport / saves Cheese4U money / on using / hiring their own vehicles / drivers
16. [Yes point 12] couriers do have cold storage / means that the cheese will not go bad.
17. [No point 1] limited by couriers' capacity / space
18. [No point 2] courier may not be available when delivery is required
19. [No point 3] risk of damage / mishandling
20. [No point 4] may not be refrigerated / cheese needs cool temperature / is a perishable good
21. [No point 5] otherwise, could become stale / dry / melt / smell / not fresh / if kept too long before delivery / becoming not safe to eat
22. [No point 6] customers will not be satisfied / pleased with service / creating bad impression
23. [No point 7] couriers will charge delivery fee / some can be expensive to use / adding to Cheese4U costs
24. [No point 8] not suitable for / slow over long distances / example
25. [1] Placing a trademark on a product is called branding.
26. [1] Speciality stores sell one type of product.
27. [1] Goods may not match description / no opportunity to try on, say clothes / misleading images e.g. colour may not match
28. [1] Receive wrong goods / goods that are not ordered
29. [1] Receive damaged goods / goods that are not wanted / fit for purpose
30. [1] Lack of feel / touch of merchandise / difficult to judge quality / may receive poor quality goods
31. [1] Lack of personal attention / no sales assistant advice
32. [1] Lack of shopping experience / not the same through a website
33. [1] Sometimes difficulty in returning goods / e.g. paying for postage
34. [1] May be delay in receiving goods / if online retailer waiting for stock / wanted goods quickly
35. [1] Online store may be hacked / fake website / customer details stolen / identity theft / money taken / goods not delivered
36. [1] May have to pay for delivery / making goods more expensive
37. [1] May be difficult to obtain after-sales service / e.g. for computers
38. [1] Network difficulties / unable to access website / delay in purchasing
39. [Advantages of franchising 1] Cost-effective way to grow the business – Cheese4U will not have to cover the cost of investing in new premises or staff.
40. [Advantages of franchising 2] Additional sales lead to additional profit and if you retain this in Chesse4U, in the long-term, it should have a saleable asset for their future.
41. [Advantages of franchising 3] Costs - each franchisee finances their own franchise outlet. While the franchisee meets all the costs and collects the income, Cheese4U will receive franchise fees and royalties or a mark-up on products sold by the franchisee.
42. [Advantages of franchising 4] Increased capital – Cheese4U benefits from the capital investment of each franchisee.
43. [Advantages of franchising 5] Easier management – the franchisees also run their businesses therefore reducing the management demands placed on Cheese4U.
44. [Advantages of franchising 6] The best franchisees will be highly motivated and have local expertise, making your life easier.
45. [Advantages of franchising 7] Develop the brand - the more franchisees Cheese4U have the better known the brand becomes.
46. [Advantages of franchising 8] Motivated franchisees – franchisees are likely to be more motivated than a manager as they have a vested interest in the success of their business and therefore the success of Cheese4U brand.
47. [Advantages of franchising 9] Purchasing power / economies of scale - a larger business is more secure and additional turnover and profit can provide access to better deals for office equipment, vehicles and other business purchases.
48. [Advantages of franchising 10] Ideas for future success franchisees can contribute fresh ideas for the future success of the Cheese4U brand maybe outlining opportunities that you might not have identified otherwise.
49. [Advantages of franchising 11] Support from others – being a business owner can be isolating so having a franchise network can offer support and advice.
50. [Disadvantages of franchising 1] Needs business model – Cheese4U needs a proven successful business model to attract franchisees
51. [Disadvantages of franchising 2] Not a fix for a failing business – franchising is not a solution to provide injections of capital from other people when a business is in difficulty. Cheese4U should only go down the franchise route if they already have a successful business up and running.
52. [Disadvantages of franchising 3] Costs - franchising your business will involve significant financial investment at the outset in order to get a successful franchise model in place for future growth of the business including investment in preparing legal documents, operations manuals, marketing materials and recruitment.
53. [Disadvantages of franchising 4] Time - franchising will take a lot of time investment especially when initially setting up the franchise model. Cheese4U will also have to take the time to ensure you attract the right franchisees and control what they do.
54. [Disadvantages of franchising 5] Training and support – Cheese4U will have to develop and deliver a range of training and support for your franchisees to successfully sell your brand. Businesses need to have systems and procedures in place that can be copied by most people to run a successful business.
55. [Disadvantages of franchising 6] Reputation - a franchisee may take a course of action that is in their own personal best interests, but which damages the reputation of the franchise as a whole.
56. [Evaluation 1] Franchising Cheese4U will be expensive initially to put a successful franchise model in place and to attract franchisees with specialist knowledge and expertise.
57. [Evaluation 2] It is likely to be difficult for Cheese4U to find appropriate franchisees because of the specialist nature of their business so although it is a good way for a business to expand and receive capital investment, in reality it may not be a suitable solution for Cheese4U as it not well known or might not have a large marketing budget.
58. [Level 3, 7-8 marks] The candidate is able to offer a recommendation with a thorough evaluation of whether (or not) to franchise.
59. [Level 2, 5-6 marks] Candidate offers a satisfactory analysis of the advantages and/or disadvantages of franchising.
60. [Level 1, 1-4 marks] Candidate demonstrates some knowledge and understanding of franchising, with application to Cheese4U.