FTT is a social enterprise. It sells its high quality fair-trade coffee beans to retailers in country P. Being ethical is important to FTT. It provides local people with information about micro-finance and skills so they can then start growing beans for FTT to sell for them. FTT wants to start exporting coffee beans as its market research shows increasing demand for coffee in other countries. FTT's managers will have to decide on an appropriate pricing method to use when selling the coffee beans in other countries.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2018). The mark or mark type is shown in brackets.

1. [2] Good knowledge: an organisation which has social objectives as well as trying to make a profit
2. [1] Some understanding not all about profit OR profit is not only objective OR an organization which has social objectives OR aims to benefit society
3. [2] Good knowledge: small amounts of capital loaned to entrepreneurs [1] in countries where finance is difficult to obtain [+ 1]
4. [2] OR small loans [1] to people not traditionally served by banks [1]
5. [2] OR loan to poor people [1] not traditionally served by banks [1]
6. [1] Some understanding small loans
7. [1] OR identifies a feature such as not given by big banks
8. [1] OR help people who can't afford a loan
9. [1] OR loans given to poor people
10. [1] Wrong sample size [k]
11. [1] as may only have asked local people [app]
12. [1] Information may be out of date [k]
13. [1] so may not like same types/blends of coffee [app]
14. [1] How carefully sample drawn up OR characteristics of people asked [k]
15. [1] cannot just ask people interested in ethical goods [app]
16. [1] Way questions asked by interviewer [k]
17. [1] Poorly written questions OR questions not relevant [k]
18. [1] Who carried out the research [k]
19. [1] Dishonest opinions OR people say what they think you want to hear [k]
20. [1] Good image OR good reputation OR customer loyalty [k]
21. [1] so customers willing to pay high prices [an]
22. [1] for fair trade coffee [app]
23. [1] Higher demand OR sales OR enter new market [k]
24. [1] which can help increase revenue [an]
25. [1] when selling in other countries [app]
26. [1] Help recruit OR retain OR motivate workers [k]
27. [1] in this social enterprise [app]
28. [1] Investors more likely to invest [k]
29. [1] making it easier for others to obtain micro-finance [app]
30. [1] Better supplier relations [k]
31. [1] so able to get best beans [app]
32. [1] Less opposition from pressure groups [k]
33. [1] Price skimming [k]
34. [1] which will reinforce brand image [an]
35. [1] for its high quality product [app]
36. [1] so consumers will pay high prices [an]
37. [1] Competitive pricing [k]
38. [1] so the price should not stop people buying its products [an]
39. [1] so less likely to lose market share [an]
40. [1] for its coffee beans [app]
41. [1] Cost plus pricing [k]
42. [1] as ingredients are high quality [app]
43. [1] making sure they can make a profit for each item sold [an]
44. [1] and is easy to calculate [an]
45. [1] Penetration pricing [k]
46. [1] (as low price) is more affordable for customers [an]
47. [1] but would lower profit margin [an]
48. [1] Promotional pricing [k]
49. [1] but can only be used for a short period of time [an]