The bar chart in Fig. 2 shows the proportions of retail sales of sports equipment made through the Internet and shops for 2005 and 2010. It also shows a forecast of where sales will be made in 2015. [Figure 2] Use the information in Fig. 2 to help you to answer the following questions.

Mark scheme

Marking points from the official mark scheme (May/June 2012). The mark or mark type is shown in brackets.

1. [1] (a) 90%
2. [6] (b) Level 2 (4-6 marks)
3. Has used the information in Fig. 2 to give a reasoned answer about how Raza should sell her sports equipment in the future. (Award 4 marks max if a reasoned answer is given without the use of the information in Fig. 2.)
4. Raza owns several shops so she should study the performance of each individual shop and possibly close any that are not performing well. Because the forecasted figures for 2015 show retail sales using the Internet are greater than from shops, she should not plan to open any more shops. She should set up a website if she does not already have one or review her existing website so that she can make the most of opportunities for online shopping. She may also have to review her ordering and delivery procedures.
5. However, she should not necessarily believe the percentages presented. The figure of 60% of people shopping on the Internet in 2015 is only a forecasted figure and may not be accurate. The figures do, however, show a steady increase in the percentages of consumers using online shopping from 10% in 2005 to 60% in 2015. The numbers of people shopping for sports equipment online may not be so great as many people may want to view or try the equipment before purchasing such expensive items. She should be constantly reviewing her selling strategies as more data becomes available.
6. Level 1 (1-3 marks)
7. Has commented on how Raza should sell her sports equipment in the future with/without the use of the information in Fig. 2.
8. Raza should concentrate on selling on the Internet. She should set up a website. More people are purchasing on the Internet. She should close some of her shops.
9. [3] (c) Any three points × 1 mark each:
10. ask for the receipt/to prove it was purchased at the shop
11. check over the exercise bicycle to see what is wrong with it (1) make sure telling the truth (1)
12. check documentation such as the guarantee
13. organise for it to be repaired/send back to manufacturer
14. free of charge if under guarantee
15. check that it has not been deliberately broken by the customer
16. apologise if it is faulty
17. replace exercise bike
18. offer refund.
19. Any other relevant point.
20. [1] (d) (i) Any one advantage × 1 mark:
21. increased sales/attract more customers
22. take advantage of impulse buying by customers
23. may provide competitive advantage/edge
24. may mean not holding too much cash on premises – reduced danger of theft.
25. Any other relevant point.
26. [1] (d) (ii) Any one disadvantage × 1 mark:
27. may cause cash flow problems
28. postponement of receiving payment
29. commission deducted by the credit card company (for credit card)
30. possibility of fraud/bad debts
31. extra administrative work e.g. checking credit limits.
32. Any other relevant point.
33. [1] (d) (iii) Any one point × 1 mark:
34. by paying off the amount due on or before the date required for payment.
35. Any other relevant point.
36. [3] (e) (i) Any three points × 1 mark each and up to 2 marks for a well explained point:
37. no interest is payable
38. easily and quickly available
39. no repayment needed
40. no loss of control to a lender
41. do not have to be arranged as with a bank loan
42. no security required
43. less documentation/administration
44. avoids danger of going bankrupt = 0.
45. Any other relevant point.
46. [2] (e) (ii) Any two points × 1 mark each or one well explained point × 2 marks:
47. when she needs finance for a specific project such as buying a vehicle
48. when a large amount of money is involved
49. when she needs finance over a period of some time e.g. several years
50. when interest rates are lower on a loan than an overdraft
51. when she is able to plan her repayments.
52. Any other relevant circumstance.
53. [2] (e) (iii) Any two points × 1 mark each or one well explained point × 2 marks:
54. provide capital
55. not affect the running of the business as not active in the business
56. take a share of the profits so less profit for her.
57. Any other relevant point.