Identify and explain four reasons why customers may prefer to buy fruit and vegetables from Manuel's shop rather than from large supermarkets.

Mark scheme

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

1. Content:
2. • Personal service / local reputation
3. • Business customer relationship / loyalty
4. • Credit given
5. • Proposed /delivery service
6. • Meets the needs of local customers
7. • More convenient / better location
8. • Longer opening hours
9. • Fresh / good quality produce
10. 1 mark for each reason identified plus 1 explanation mark for each reason.
11. 1 knowledge mark + 1 explanation mark (2 marks × 4 reasons)
12. Reason: The shop is more convenient (1 knowledge mark)
13. Explanation: The shop is more convenient (1) as it is located near to the customer's house whereas large supermarkets are located some distance away and will need transport to get there (1 explanation mark).
14. Content (for part b):
15. (i) Buy own truck – use when needed; no delays; cost of running vehicle; cost of buying old vehicle or 12,000 for new truck (19.23 for 4 deliveries a week = ($4000/52)/4).
16. (ii) Pay the supplier a delivery charge – may be expensive if many small deliveries; do not have to pay large amount of capital to purchase vehicle; $80 per week for delivery; not responsible for maintenance and wear and tear.
17. (iii) Rent a truck when needed – only pay when using the vehicle; may be cheaper/more expensive than buying own vehicle – it depends on usage; need to book and pay in advance – may not need it; $200 plus fuel for 4 days a week; not responsible for maintenance and wear and tear.
18. Level 1 – 1 mark for each statement. E.g. Rent a truck when needed – Manuel will only pay when using the truck (1 mark).
19. Level 2 - 5 marks for the first level 2 answer and then one extra mark for each additional level 2 answer up to maximum of 8 marks. E.g. Rent a truck when needed – when renting a truck Manuel will only pay when using the vehicle and so it may be cheaper than buying his own lorry if he doesn't make many journeys. However, if he hires a truck 4 times a week to fetch stock for the shop then it will cost $200 and it may be cheaper to buy his own lorry. He also needs to book the delivery truck in advance to make sure he can hire one and they have not all been booked out. He needs to be organised to do this and he may find he does not need the truck and so wastes money. 5 marks for level 2 answer plus one application mark for mentioning the cost figures and needing to book the delivery truck in advance.
20. Level 3 - Detailed discussion of at least two level 2 answers and then a recommendation at the end which justifies which is the best option to choose compared to the other options.
21. Possible application marks: located on a main road; been in business for 10 years; reference to delivery costs; reference to financial information from Appendix 1; $4000 for old truck or 3 × $4000 for new truck; $20 for delivery; $50 hire charge; wholesale supplier; cash flow problems; sole trader.
22. There may be other examples in context which have not been included here.
23. Application (Level 3): 9-10 marks At least 2 x Level 2 + well justified recommendation as to the best option to choose compared to the other options.
24. Application (Level 2): 5-8 marks Good discussion of advantages/disadvantages of each option OR balanced argument. Some limited judgement shown in recommendation about the best option to choose.
25. Application (Level 1): 1-4 marks Outline of advantages/disadvantages of each option.