Mark Scheme (Results)

Winter 2010

GCE

GCE Business Studies/Economics and Business (6BS01/6EB01/01)

Unit 1: Developing New Business Ideas

Edexcel Limited. Registered in England and Wales No. 4496750

Registered Office: One90 High Holborn, London WC1V 7BH
Edexcel is one of the leading examining and awarding bodies in the UK and throughout the
world. We provide a wide range of qualifications including academic, vocational, occupational
and specific programmes for employers.
Through a network of UK and overseas offices, Edexcel’s centres receive the support they need
to help them deliver their education and training programmes to learners.
For further information, please call our GCE line on 0844 576 0025, our GCSE team on 0844 576
0027, or visit our website at www.edexcel.com.

If you have any subject specific questions about the content of this Mark
Scheme that require the help of a subject specialist, you may find our Ask
The Expert email service helpful.

Ask The Expert can be accessed online at the following link:

http://www.edexcel.com/Aboutus/contact-us/

January 2010
Publications Code US022672
All the material in this publication is copyright
© Edexcel Ltd 2009
 January 2010 Unit 1 Section A Mark Scheme

NB up to 2 marks out of 3 may be gained for part (b) if part (a) is incorrect.

Maximum 2 marks for explaining why distracters are incorrect.

Question Question Marks

Number
1. (a) Which of the following is an example of a fixed cost?

Answer – Rent (A) 1

1. (b) - Fixed costs do not vary with output (1 mark); in the short
term (1 mark), which is the case with rent (1 mark)
- Wages of waiting staff, electricity bills and stock will all 1-3
vary with output in a restaurant (1 mark) which will
therefore affect hours worked, energy used and supplies of
food used (1 mark)

Any acceptable answer which shows selective (Total 4)

knowledge/application and/or development

2. (a) Which of the following is the average variable cost per meal for
Aroma Italia at the break-even level of output?
Answer – £10 (A) 1
2. (b) Explain your answer (show all your workings)

- Defines average variable cost or break-even OR 1-3 marks

Uses a correct formula, e.g. FC/Output = contribution OR
(total revenue – FC)/output = variable cost OR
break-even = FC/contribution OR selling price – contribution
= average variable cost (1 mark) (Total 4)
(Knowledge must be shown for 1 mark)
- Applies data, i.e. 120/60 = 2 (1 mark application), then
12-2/? = 10 (1 mark application)
- Or 720-120=600/60=10 (2 marks)

NB DO NOT accept 120/12=10 (not strictly applied)

3. (a) To be a stakeholder in a small business like Aroma Italia, it is

necessary to
Answer – be affected by the business in some way (D) 1
3. (b) Explain your answer (show all your workings)

- Stakeholders are people who have a vested interest in a 1-3 marks

businesses operations (1 mark)
- they can be internal or external (1 mark)
- for example employees or customers (1 mark),
- so A, B and C are only limited examples of stakeholders
whereas D includes all three (1 mark) (Total 4)
4. (a) The retail price of Apple iPods fell, on average, by 50% between
2007 and 2009. The most likely explanation for this was:

Answer – price of substitutes fell (C) 1

4. (b) Explain why this answer is correct

NB Any knowledge of demand and supply should gain 1 mark. 1-3

- Demand is the amount that consumers are willing to buy at
a given price
- Retail price is the amount paid by the consumer (1 mark)
- Knowledge of substitutes (1 mark)
- Need to stay competitive (1 mark) (Total 4)
- Development of the above (1 mark)
- Explanation as to why any distracter is incorrect (1 mark),
e.g. D – would increase costs, no reason to reduce price.

Any acceptable answer which shows selective

knowledge/application and/or development

NB up to 2 marks out of 3 may be gained for part (b) if part (a) is

incorrect.

Maximum 2 marks for explaining why distracters are incorrect.

5. (a) Which of the following is not a market segment for the above
businesses?

Answer – Homebase stores (C) 1

5. (b) Explain why this answer is correct

- Market segmentation is how you classify people within a

market according to age, gender, lifestyle, etc (1 mark)
- Market segments share same characteristics, e.g. same age
bracket (1 mark)
- DIY enthusiasts, landlords and electricians will probably get
supplies from B&Q/Jewson because of a regular need (1
mark)
- but Homebase stores is a retailer/distribution 1-3 marks
channel/competitor of DIY products, not a type of buyer (1
mark) (Total 4)

Any acceptable answer which shows selective

knowledge/application and/or development

6. (a) Which of the following is least likely to be a factor which directly

affects the supply of a product or service?
Answer – Fashion, Tastes and Preferences (B) 1
6. (b) Explain why this answer is correct

- Supply is the amount a producer provides at a given price 1-3 marks

(1)
 - This is a demand factor (1 mark) because it relates to the
consumer in the market (1 mark)
- Changes in interest rates or wages affect costs of production
(1 mark) which is a supply factor because they affect the
business directly (1 mark)
- Similarly the innovative design team is part of the
production process (1 mark) which will therefore affect the
supply of a firm (1 mark)
(Total 4)
Any acceptable answer which shows selective
knowledge/application and/or development

7. (a) Which of the following is also an example of a source of secondary

research for a new business?
Answer – Market intelligence reports (B) 1
7. (b) Explain why this answer is correct

- Interviews, visits and customer surveys are primary research 1-3 marks
methods (1 mark) because the data is being collected first
hand in these cases by the user (1 mark) who will have been
able to find out specific information (1 mark)
- Market intelligence reports have been compiled by a market
research company before hand (1 mark) for publication for
ease of use/save time by a third party (1 mark) and not
specifically for a business (1 mark).

Any acceptable answer which shows selective

knowledge/application and or development (Total 4)
8. (a) Yasmina’s decision might best be described as a trade-off because
Answer – she was forced to choose between two jobs (C)
1
8. (b) Explain your answer

- A trade off is when one choice is sacrificed in terms of 1-3 marks

another (1 mark)
- which in this case was self-employment for employment (1
mark)
- because Yasmina would not be able to do both, because of
the hours/commitment involved (1 mark)
- although she now sells products this is part of trading not
trade-off (1 mark)

Any acceptable answer which shows selective

knowledge/application and or development (Total 4)
 January 2010 Unit 1 Section B Mark Scheme

Question Question
Number
9. Mike Watson, the Community Manager at Morris Brown CLC, 6 Marks
prepared the business plan.

Briefly give two reasons to explain why Mike might have prepared
a business plan .
Answer Mark
Knowledge 2, Application 2, Analysis 2

Knowledge: up to 2 marks are available for showing knowledge, e.g. 1-2

by candidates defining a business plan as a document designed to
provide information about a business proposal relating to such activities
as marketing and HR, also in order to gain finance, monitor
effectiveness, give direction, etc.

Application: up to 2 marks are available for relating the above to 1-2

Leisure Library, e.g. describing the marketing plans for the LL such as
advertising the service on A Sporting Chance’s website.

Analysis: up to 2 marks are available for the consideration of causes 1-2

for Mike to develop the business plan, e.g. to show potential lenders or
financiers, in this case MBCLC Community Club (accept local council)
why the business might succeed, OR in this case for example to check
that the aims of the LL (e.g. to provide a broad-based activity
portfolio) are being met.

Two reasons needed in the context of LL for full marks (3+3 marks)
Question Question
Number
10. Explain why the primary research findings provided in Evidence B 4 Marks
might be considered as insufficient as a basis for the Morris Brown
CLC developing a leisure library.
Answer Mark
Knowledge 1, Application 1, Analysis 2

Knowledge: up to 1 mark is available for showing knowledge or an 1

understanding of business terms and behaviour e.g. for defining or
describing what is meant by primary research/understanding of
sampling 1

Application: up to 1 mark are available for contextual answers, e.g.

stating that only 100 pupils aged 11-18 were surveyed. 2

Analysis: up to 1 mark is available for expanding on the above by

explaining the limitation of the data, e.g. that only 100 pupils were
asked, which is probably a tenth of the size of a typical secondary
school
A further 1 mark is available for identifying a consequence for the
business, e.g. that is not likely to meet the needs of several thousand
people, including people who are not school pupils (community users –
care homes, nurseries, scout groups)
OR candidates may focus on the actual data in Evidence B and suggest
that not all sports are represented in the chart, or they might question
how the data was collected, e.g. were respondents given free choice of
sports or constrained to the 11 sports identified in which case the
results may be skewed or biased in some way….consequently the
business might waste money on equipment not wanted, e.g. kayaks!
Question Question
Number
11. In his attempts to persuade the Women’s Business Development
Agency to provide a grant to help finance the Leisure Library, Mike
Watson argued that the business would be run as a not-for-profit
social enterprise.

Examine the extent to which the motivational objectives of Mike Watson might
differ from those of a typical private sector entrepreneur. (8 Marks)
Level Mark Descriptor Possible Content
1 1-2 Knowledge: up to 2 marks are e.g. a business which exists for
available for describing what is social purposes, to improve
meant by motivational objectives welfare in society OR for
for a private sector entrepreneur describing what is meant by
motivational objective
2 3-4 Application: up to 2 marks are e.g. a more healthy society is
available for contextualising the likely to be the motivational
response by referring to the LL, objective for the LL manager.

3 5 Analysis: 1 mark is available for e.g. Mike might be driven by an

explaining why Mike’s motivation altruistic stance because he sees
might be different to a ‘regular’ the value of providing sports
profit making enterprise, equipment to the local community
(the ethical stance referred to in
NB Answer does not have to be the Specification).
in context to gain 5 marks
4 6-8 Evaluation: up to 3 marks are e.g. he will still be motivated by
available for providing arguments the desire to succeed and gain
for and against Mike having recognition for his achievements.
different motives to those of a Even though profit might not be at
typical entrepreneur, the core of what Mike wishes to
achieve, nonetheless he will need
to ensure sufficient uptake of the
services in order to provide
NB Evaluation MUST be in revenues to cover costs which may
context to gain 6 marks plus include his wage/salary. Credit
should be given for candidates
who consider the varied motives of
other entrepreneurs.

e.g. because the LL is essentially a

public sector organisation funded
A contextual conclusion should be to some extent by public money
provided to achieve the highest and staffed by public sector
mark of 8 marks workers it is more likely that
social welfare is a motivational
factor for Mike (teachers are
largely altruistic and not so
interested in making lots of
money!)
Question Question
Number
12. Mike Watson has clearly considered that the Leisure Library might
 not have the potential for market growth in the Birmingham area
alone (see Contingency Plan, Evidence A)

Evaluate the likely value to Mike Watson of using market mapping to help examine
other markets in the neighbouring towns. (8 Marks)
Level Mark Descriptor Possible Content
1 1-2 Knowledge: up to 2 marks are the process of identifying where
available for a definition of your product or service fits into a
market mapping market against competitors in
terms of variable characteristics,
such as price and quality
2 3-4 Application: up to 2 marks is e.g. finding out what types of
available for candidates who organisation will be expecting to
clearly contextualise their use the LL for example, nurseries,
responses schools, scout groups, youth clubs,
etc.
3 5 Analysis: 1 mark is available for e.g. to ensure that the LL is used
explaining the possible effects of to meet the market needs in terms
Mike using market mapping, of providing a service that will be
able to meet the needs of local
NB Answer does not have to be organisations such as providing low
in context to gain 5 marks cost rental of kayaks to scout
groups who could not afford to buy
the kayaks themselves, etc.
4 6-8 Evaluation: up to 3 marks are e.g. it is a time-consuming and
available for providing balance to costly exercise which might use up
the answer by perhaps mentioning valuable resources causing an
the negative effects of market opportunity cost, e.g. more kayaks
mapping, or golf equipment could have been
bought by the LL instead of paying
NB Evaluation MUST be in for market research costs
context to gain 6 marks plus
e.g. because the LL is a social
A contextual conclusion should be enterprise it is important that the
provided to achieve the highest maximum number of ‘appropriate’
mark of 8 marks users benefit so it is vital for the
LL management like Mike to
undertake market mapping
research and analysis in order to
maximise the LL use, though it is
likely to prove costly as Mike and
his team probably have little
expert knowledge/skill to do
market mapping – perhaps they
could use the Birmingham Schools
Partnership or Sporting Chance?

Question Question
Number
13. Leisure businesses in the private sector, such as David Lloyd Leisure, are likely to
be
affected more by external economic influences.
 Assess the likely implications for a private sector leisure business such as David
Lloyd Leisure of changes in any two external economic influences. (12 Marks)

NB The question does not read MACROeconomic external influences. Therefore we

should give credit for MICRO economic influences, e.g. changes in costs, prices,
demand, supply, competitors, etc.
Level Mark per Descriptor Possible Content
influenc
e
1 1 Knowledge: up to 1 mark is e.g. local levels of unemployment,
available for simple responses interest rates, taxes, etc.
such as defining what is meant by
external influences or providing
examples

QWC: struggled to use business

terminology or write legibly with
frequent errors in spg and/or weak
style and structure of writing
2 2-3 Application: up to 2 marks are e.g. if unemployment in an area
available for candidates who higher than normal then
clearly contextualise their membership of private health
responses clubs is likely to be low…

QWC: will use some business terms

but the style of writing could be
better/there will be some errors
in spg/the legibility of the text
could be better in places
3 4 Analysis: up to 1 mark is available e.g. if interest rates are increasing
for explaining the positive or then this would affect the cost of
negative effects of an external borrowing so consumers with
influence on a private heath club mortgages or credit card balances
would have less disposable
QWC: candidate will use business income. As a result of higher
terminology well/style of writing credit payments consumers would
is appropriate to the then have less to spend on other
question/good spg items such as leisure so
memberships to private might
fall…
4 5-6 Evaluation: up to 2 marks are a candidate may argue that if the
available for providing balance to Government provided tax relief on
the answer, gym membership then the demand
for gym memberships might
increase as the effective price of
membership would be lower for
consumers…

QWC: candidate uses business a private sector leisure business

terminology precisely and like David Lloyd might be less
effectively/organises their answer affected by external influences
to provide a coherent and fluent such as high levels of
response/ good to excellent unemployment because they may
spelling, punctuation and offer off-peak low price
 grammar. membership to the unemployed….

Unit 1 January 2010

Assessment Objective Mark

Grid

Question Content K/U Application Analysis Evaluate Total Marker

1 1.3.6a 2 1 1 0 4
2 1.3.6c 1 3 0 0 4
3 1.3.3e 3 1 0 0 4
4 1.3.2ab 1 1 1 1 4 E
5 1.3.3b 1 1 1 1 4 E
6 1.3.2ab 1 1 1 1 4 E
7 1.3.3a 2 1 1 0 4
8 1.3.3e 1 1 1 1 4 E
9 1.3.7a 2 2 2 0 6
10 1.3.3a 1 1 2 0 4
11 1.3.1b 2 2 1 3 8 E
12 1.3.3c 2 2 1 3 8 E
13 1.3.4a 2 4 2 4 12 E

Total 21 21 14 14 70
Further copies of this publication are available from
Edexcel Publications, Adamsway, Mansfield, Notts, NG18 4FN
Telephone 01623 467467
Fax 01623 450481
Email publications@linneydirect.com
Order Code US022672 January 2010

For more information on Edexcel qualifications, please visit www.edexcel.com/quals

Edexcel Limited. Registered in England and Wales no.4496750

Registered Office: One90 High Holborn, London, WC1V 7BH