Fig. 1.1 shows a country's imports and exports. Use Fig. 1.1 to help you answer the following questions. [Figure 1.1]

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2024). The mark or mark type is shown in brackets.

1. [1] Banking
2. [1] Answer = 27%
3. [1] Containers can be refrigerated / temperature / climate controlled / need for cold storage (1) for perishable foods (1) preserve food / food does not go bad / spoiled / deteriorate / rot (1)
4. [1] Food can be transported in large capacity / big space (1) bulky / large amount of goods (1)
5. [1] Cheap/lower costs / cost effective (1) so prices can be decreased (1) compared to air transport (1)
6. [1] Containers are secure / sealed / locked (1) food kept safe / not opened (1)
7. [1] Protected (1) from weather / theft / damage (1)
8. [1] Food can be transhipped (1) no need for constant packing (1) saves time (1)
9. [1] Food does not need to be warehoused (1) container acts as the warehouse / for storage of goods (1)
10. [1] Containers are loaded / unloaded quickly / easily (1) saves time (1)
11. [1] Yes - provides a permanent / written / record (1) proof (1) for future reference / can refer back to (1) as it is stored (1) enables detailed information to be sent (1) example of information, such as how long will the order take to arrive (1) can be supplemented by visual / numerical information (1) can use attachments (1) one email can be sent to different addresses at once / forwarded to other people (1) direct method (1) less chance of misunderstanding between importer and exporter / clearer explanation of the problem (1) the phone line may be busy / do not want to hang on / avoids automated options (1) telephone signal may be poor/ difficult to understand / distortion (1) telephone would be affected by time-zones (1) telephone has no evidence (1) making communication email is cheaper/quicker (1)
12. [1] No - Telephone is better when the exporter wants to hold a discussion / conversation / talk (1) when a quick / urgent decision / response is needed (1) it is direct / one to one communication (1) message can be conveyed immediately (1) can have an immediate answer / instant feedback/reply (1) when there is no working email/computer / internet is down / may not have internet (1) there may be delays in replying (1) if email not seen / checked (1) emails can be deleted / lost by accident (1) may be seen as junk mail (1) can be impersonal (1) spam emails can clutter up inbox (1)
13. [1] Oil is a non-renewable resource.
14. [1] Tourism is an example of invisible trade.
15. [6] Up to 2 marks for describing overseas agents / exporting goods
16. Up to a further 2 marks for analysing the benefits of using an overseas agent
17. Up to a final 2 marks for evaluating the benefits of using an overseas agent
18. [1] Overseas agents have knowledge and understanding of foreign markets so are well placed to identify and exploit opportunities
19. [1] Overseas agents will find buyers, leading to increased sales
20. [1] Some agents will sell the goods on behalf of their principals
21. [1] Some agents can help with delivery of goods so saving exporters' times
22. [1] Some agents can help with language so improves communication / avoids communication barriers / so no need for exporter to employ a translator
23. [1] Some agents can guarantee payment so avoiding bad debts for the exporter
24. [1] Some agents will help with documentation / customs clearance so reducing the need for the exporter to employ extra staff
25. [1] Some agents can help with finding insurance which helps the exporter to have financial protection
26. [1] Some agents will help with advertising so reduces costs to exporter/exporter does not need to worry about employing an advertising agency
27. [1] Some agents will sell at the best price so the exporter will earn a profit
28. [1] Some agents will have possession of the goods / arrange warehousing so keeping goods safe form theft
29. [1] Overseas agents will have the necessary expertise in what they are selling and what the local consumers are likely to demand as they will have a network of contacts, reducing risk of failure
30. [1] Overseas agents assume responsibility for transporting / customs clearance which saves the exporter time gaining that knowledge and expertise
31. [1] The overseas agent will save a business time / money as there is no need to recruit/ train new employees to travel long distances / provide accommodation as agents will collect payment / making contracts for the business/guaranteeing payment
32. [1] Solves the problem of not being sure whether they will receive payment for goods / some overseas agents guarantee payment so avoiding bad debts
33. [1] Some agents will help with currency exchange saving time / money for the exporter
34. [1] Using an agent allows an exporter to maintain more control over other matters such as final price and brand image compared with the other intermediary option of using a distributor
35. [1] They provide local representation giving trust to local buyers to purchase goods.
36. Evaluation: Much will depend on whether the business has enough resources to have their own export department or are experienced in exporting. Then, an overseas agent might be less needed. However, if the business is first time exporting, or exporting to a new market, it might be better to use an agent so that they can concentrate on other aspects of their business, which may otherwise be neglected.