YOGO is a new business which Amelia has just set up using Government support. YOGO makes a range of sweets (candy) targeted at adults. It is a niche market. Amelia has been looking at the marketing part of her business plan. She has to decide which pricing method to use. Amelia is spending a lot of money on packaging. She did not do any primary market research as she thinks she can use secondary data to make decisions. She believes that all adults like sweets.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2016). The mark or mark type is shown in brackets.

1. [1] reduce unemployment
2. [1] increase competition
3. [1] increase output
4. [1] benefit society
5. [1] small businesses can grow
6. [1] cash flow forecast
7. [1] location
8. [1] human resources plan
9. [1] production details
10. [1] business aims
11. [1] penetration pricing [k] as need to get people to try her sweets [app]
12. [1] price skimming [k] as it's a niche market [app]
13. [1] cost plus pricing [k] as likely to have large set up costs [app]
14. [1] competitive pricing [k]
15. [1] promotional pricing [k]
16. [1] psychological pricing [k]
17. [1] List ingredients [k] as it's a food product [app] must state what it contains to avoid legal action [an]
18. [1] Promotion/to attract customers [k] to buy[an] from the new business [app]
19. [1] Inform [k] customers about its flavours [app] so people know what is in its products [an]
20. [1] Protection/keep item fresh [k] so the sweets are not damaged [app] otherwise products might be wasted [an]
21. [1] Boost brand image/impression of high quality [k] as it is a niche market [app] which can help increase sales/revenue [an]
22. [1] Easier to store/transport [k]
23. [1] It is expensive [k] spends a lot on packaging [app] therefore may not be able to afford it [an]
24. [1] It is time consuming [k] she has already done secondary research [app] so how much more can she find out [an]
25. [1] Collect precise information[k] on sweets [app] so that she can produce the most appropriate products[an]
26. [1] Secondary data may be outdated [k] [app]Needs might have changed [an]
27. [1] Help better target promotion/in pricing decisions [k] especially as new business [app]