Anouk is a sole trader. She designs and makes jewellery at home, using hired (rented) equipment. Anouk enjoys selling the jewellery at local markets. Last year her sales revenue increased by $500 to $3000. She plans to use $50 for a marketing budget. Anouk would like to do some primary market research when she has time. Anouk thinks she should have a business partner.

Mark scheme

Marking points from the official mark scheme (May/June 2014). The mark or mark type is shown in brackets.

1. [2] Good knowledge: [2] e.g. a financial plan or forecast for the marketing of a product for a specified period of time
2. [1] Some knowledge: [1] e.g. a financial plan or sum of money put aside for marketing
3. [2] Application [2 × 1] 1 mark per method
4. Methods could include: Questionnaires/survey, interviews, observations, focus group
5. Do not accept marketing agency or field research as these are not appropriate for a small business.
6. [4] Knowledge [2 × 1] – award 1 mark for each relevant advantage
7. Application [2 × 1] - award 1 mark for each relevant different explanation
8. Relevant points might include:
9. • No need to spend a lot of money to buy equipment [k] might be too expensive for a sole trader [app]
10. • Easier to update or change equipment as required [k] if she designs a new piece of jewellery she does not have to buy more equipment [app]
11. • Able to afford the best equipment [k] to help her to make her jewellery more efficiently[app]
12. • If the machine is broken Anouk does not have to pay owner cost of repair [k] as a small business owner she does not have much money [app]
13. • Machinery is only rented when needed [k] so saving space at home [app].
14. Note: Do not accept cheaper or saves costs as these are too vague.
15. [6] Knowledge [2 × 1] – award 1 mark for each disadvantage identified
16. Application [2 × 1] – award 1 mark if relevant reference made to Anouk
17. Analysis [2 × 1] - award 1 mark for each relevant explanation
18. Note: For each reason maximum 3 marks [1k + 1app + 1an].
19. Relevant points might include:
20. • Have to share profits [k] so she might earn less [an] than if she were a sole trader [app]
21. • Share workload: [k] Anouk enjoys doing both designing and selling [app] sharing could lead to conflict [an]
22. • Unlimited liability [k] just like a sole trader [app] Anouk's personal assets are still at risk [an]
23. • Slower decision making [k] as she has to discuss decisions such the marketing budget [app] which could mean she misses sales[an]
24. • They might have different objectives [k] the partner might not want to just sell at markets [app] this could lead to disagreements[an]
25. • Partnership agreements cost time and money [k].
26. [6] Knowledge [2] – award up to 2 marks for identification of relevant points (e.g. advantages or disadvantages of either method)
27. Application [1] – award 1 mark if relevant reference made to Anouk's business
28. Analysis [1] – award 1 mark for relevant development of point(s)
29. Evaluation [2] – justified decision made as to which of the two methods would be most appropriate for Anouk to use.
30. Points include:
31. Advertising in local papers:
32. • Low cost [k] so she will be able to afford this [an] in her $50 budget [app]
33. • Would widen her target audience [k] as many people read newspapers [an]
34. • Not everyone reads newspapers [k] so her target audience might not be aware of her business [an]
35. • Repeat adverts can be expensive [k]. Using up the marketing budget [app].
36. Leaflets:
37. • Easy to distribute to lots of people [k] could widen her possible audience [an] to help increase her sales revenue above $3000 [app]
38. • Can be kept for reference [k] for when people want to buy rings or bracelets as presents [app]
39. • Can be colourful [k] which will attract people's attention [an]
40. • People might see them as junk [k] so throw them away [an].
41. Note: For 6 marks there must be a justified decision as to why it is the best option.