Identify and explain two ways a business plan could have helped Peter when setting up Value Gym.

Mark scheme

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

1. [1] (a) To help gain finance from a bank/other investors/government grants
2. [1] (a) To set objectives/goals/targets
3. [1] (a) To encourage careful planning that will reduce risks of financial failure
4. [1] (a) To be clear how the business is going to operate
5. [1] (a) To identify the human and physical requirements of the business
6. [1] (a) To identify the target market from market research/identify the level of demand for the gym
7. [3] (a) Indicative response: Peter will have written the business plan to help him gain finance. (1) Peter will have taken it to show the bank manager to help persuade him to give VG the loan needed to start the gym. (ap) The business plan will show financial forecasts to show that the business will be able to repay the loan. (1) Therefore after the bank has given Peter the loan he will have the capital he needs to set up the gym and start signing up members. (ap)
8. [1-3] (b) (L1) Outline of the advantages and/or disadvantages of each of the roles of marketing. (Max of 3 marks) E.g. Carry out market research to find out what gym equipment customers want
9. [4-6] (b) (L2) Detailed discussion of the advantages and/or disadvantages of each of the roles of marketing. 1 × L2 explanation can gain 4 marks and a further mark can be awarded for each additional L2 explanation (max 6 marks) E.g. Carry out market research to find out what gym equipment customers want. The right equipment, such as a cross trainer, needs to be purchased so that customer needs are met. However, it can be time consuming and expensive to carry out the market research required to ensure this happens. (Level 2 plus one application mark for answering in the context of the gym and its equipment)
10. [7-10] (b) (L3) For L3 to be awarded there needs to be at least two L2 marks awarded and then a conclusion of the most important role of marketing. 7-8 marks for limited conclusion of the most important role of marketing OR why the other roles are less important. 9-10 marks for well justified conclusion of the most important role of marketing AND why the other roles are less important. Award up to 2 additional marks for relevant application.
11. (b) (Relevant points for Identify customer needs) Carrying out market research to be sure the business delivers the service that customers want; So that they would know what types of equipment customers would wish to use; So they would know what exercise classes customers would wish to attend; So they would know what price customers were willing to pay; So they would know what hours/days the customers would want to use the gym; However, it can be expensive to carry out the market research necessary to identify these needs accurately
12. (b) (Relevant points for Satisfy customer needs) So the gym equipment works correctly to make the customers happy; So the exercise classes are run well to make the customers happy; The customers are content with the prices that are charged; So the opening hours of the gym are convenient for customers' lifestyle; However, Peter may need to buy more gym equipment and/or recruit more personal trainers to work in the gym; However, it can be expensive to maintain the equipment
13. (b) (Relevant points for Build customer relationships) Peter needs VG to retain a good reputation with customers; VG needs to maintain customer loyalty; Customers need to feel like their opinions matter; Customers need to feel valued; However, if customers are dissatisfied they may go to a competitor; However, it may be difficult to satisfy all customers and therefore some may still give the business a bad reputation if unhappy
14. (b) (Possible application marks) Fitness instructor; helps people lose weight and get fit; membership fee for many gyms is monthly; payment each visit to the gym; demand for low-priced gyms; needs to attract more customers to continue to expand the gym; needs to employ 4 personal trainers; 2 receptionists; gym is open 7 days a week; Information from Appendix 1 listing gym equipment.