O-LevelCommerceRetail trade7100/21 · Oct/Nov 2012 · Q420 Marks

Aziz's first job is working for a company that sells computer software by mail order.

(a)(i)Explain the term mail order.[2]
(a)(ii)Explain why the location of this business is not as important as the location of a shop.[3]
(a)(iii)State three reasons why a warehouse is necessary for this mail order business.[3]
(b)'Good communication is important if sales are to increase'. Explain this statement. Do you agree? Give reasons for your answer.[6]
(c)(i)Aziz has no money. The following methods of credit are available to him: hire purchase, credit card, informal credit, extended credit. Which method of credit listed above would be most suitable for him to purchase each of the following items? Give a reason for each of your choices. Clothing from a department store.[2]
(c)(ii)Aziz has no money. The following methods of credit are available to him: hire purchase, credit card, informal credit, extended credit. Which method of credit listed above would be most suitable for him to purchase each of the following items? Give a reason for each of your choices. Food from the shop at the end of the street.[2]
(c)(iii)Aziz has no money. The following methods of credit are available to him: hire purchase, credit card, informal credit, extended credit. Which method of credit listed above would be most suitable for him to purchase each of the following items? Give a reason for each of your choices. A five year-old car.[2]

Mark scheme

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

[2] (a) (i) Any two points x 1 mark each - shopping by post, using catalogues (allow online catalogues), and delivery to the home, any other relevant point
[3] (a) (ii) Any three points x 1 mark each and up to 2 marks for any well developed point – its customers do not visit the premises, its customers may be all over the country/all over the world, they do not need to display their goods to customers, they need large storage areas and it does not matter where this storage is located, any other relevant point including comment on the location of shops
[3] (a) (iii) Any three reasons x 1 mark each - need to store the goods shown in the catalogue, need to hold a large stock, need to have space to fulfil orders/pack the goods, need to have space to deal with returns, need to safeguard their goods/protect from damage/theft (1 mark max), any other relevant point
[6] (b) Level 2 (4-6 marks) Has discussed the statement and has given a reasoned opinion. Good communication is very important in business. It is very important when trying to sell as most markets are very competitive. In order to sell computer software, the company will need to communicate with prospective customers. It may do this by sending a printed catalogue or by using an Internet website where customers can view the products available and buy online. The catalogue and website must be up to date and attractive and also easy to use, otherwise customers will go elsewhere. When a customer places an order, it is important to keep the customer informed of the progress of the order. This can be done by email. If there are problems the customer needs to know. Again this could be done by email or by telephone. Although good communication is important for sales to increase, it is not the only factor. The product needs to be of high quality and at a reasonable price. Delivery needs to be prompt and there needs to be good customer service. I agree that customer service is important but the company and the people it employs like Aziz, need to offer good service overall for sales to increase. Level 1 (1-3 marks) Has commented on the relationship between communication and sales with/without an opinion. Communication is important when selling. People need to understand you. They may telephone you or email you. You need to know the products you are selling. The price needs to be reasonable. Then sales will increase.
[6] (c) For each section award 1 mark for each correct method of credit and 1 mark for the reason NB if the choice is wrong award no marks for the section
[2] (c) (i) credit card - can postpone payment/pay at the end of the month to avoid interest extended credit – may be offered by the department store/if pays at the end of the month will avoid interest/owner as soon as the purchase is made
[2] (c) (ii) informal credit - likely to be known to the shopkeeper/small amount of money involved/can pay when receives salary
[2] (c) (iii) hire purchase – can pay in instalments over a period of time/formal agreement made/can return it if the car proves to be faulty, allow credit card