Year 10 Paper 4: Ideas and Markets
Enterprise and entrepreneurship, spotting a business opportunity, business aims and objectives, the marketing mix and external influences on business.
Year 10 here means a typical teaching order, not a syllabus rule. No exam board defines what belongs to Year 10, and schools sequence the course differently. Check it against your own scheme of work before using it to decide what a class has covered.
Questions
Question 1 [2 marks]
Spotting a Business Opportunity
State two examples of primary market research a new sandwich shop could use to find out what customers want.
Question 2 [2 marks]
Enterprise and Entrepreneurship
State two reasons why a new business might fail within its first year of trading.
Question 3 [3 marks]
Spotting a Business Opportunity
A new hairdressing salon wants information specific to its own local area rather than relying only on published national reports.
Explain one advantage to the salon of using primary market research rather than secondary market research.
Question 4 [3 marks]
External Influences on Business
Explain one effect an economic boom, when the economy is growing strongly and consumer confidence is high, is likely to have on a business selling non-essential luxury goods.
Question 5 [3 marks]
The Marketing Mix
Explain one reason why a new skincare brand might use social media influencers to promote its product rather than television advertising.
Question 6 [3 marks]
Business Aims and Objectives
Explain one reason why a new charity shop might set a survival objective, even though it does not aim to make a profit for owners.
Question 7 [4 marks]
The Marketing Mix
A furniture company sells only through its own website, with no physical shops.
Explain two advantages to the company of using online distribution rather than selling through shops.
Question 8 [4 marks]
Business Aims and Objectives
A family-run bakery has grown steadily for five years.
Explain two reasons why the owners might now set an objective of growth rather than survival.
Question 9 [4 marks]
The Marketing Mix
A soft drinks brand always prices its product at 1.99 pounds rather than 2.00 pounds.
Explain two reasons why the brand uses this psychological pricing.
Question 10 [4 marks]
Spotting a Business Opportunity
A new gym is deciding how to segment its target market.
Explain two ways the gym could segment its customers to help target its marketing.
Question 11 [4 marks]
External Influences on Business
A UK clothing retailer imports most of its stock from overseas, priced in US dollars.
The value of the pound falls sharply against the dollar.
Explain two effects this fall in the exchange rate could have on the retailer.
Question 12 [4 marks]
Enterprise and Entrepreneurship
A mobile pizza van owner is turning away customers at busy times and is deciding whether to use her savings to buy a second, larger van.
Explain two risks to the owner of using her savings to buy the second van.
Question 13 [5 marks]
Spotting a Business Opportunity
A new gym sends a questionnaire to 400 potential customers, and 92 of them respond.
Calculate the response rate as a percentage, and explain one way the gym could try to increase this response rate.
Question 14 [5 marks]
Enterprise and Entrepreneurship
A candle maker buys 6 pounds of wax and wick to make a scented candle, then sells the finished candle for 21 pounds.
Calculate the value the candle maker has added to the raw materials, calculate this added value as a percentage of the material cost, and explain one factor of production the candle maker has used to create this value.
Question 15 [6 marks]
Business Aims and Objectives
A dental practice has always set patient care quality as its main objective, spending more time per appointment than most competitors and therefore seeing fewer patients per day.
A business consultant recommends switching to a profit-maximisation objective by shortening appointments to see more patients.
Evaluate whether the dental practice should switch to a profit-maximisation objective as recommended.
Question 16 [6 marks]
The Marketing Mix
A children's clothing brand has always sold exclusively through independent boutique shops.
It is considering also selling through a large national supermarket chain, which would mean significantly lower prices per item to meet the supermarket's bulk-buying terms.
Evaluate whether the brand should start selling through the supermarket chain.
Question 17 [6 marks]
External Influences on Business
The government introduces a new 10 percent tariff, an import tax, on a type of imported fabric a clothing manufacturer relies on, significantly raising its material costs.
Evaluate the likely impact of this tariff on the clothing manufacturer.
Question 18 [6 marks]
Business Aims and Objectives
A successful independent bookshop is considering opening two new branches at once to pursue rapid growth, using most of its cash reserves to fund the expansion.
Evaluate whether the bookshop should prioritise this rapid growth objective over protecting its cash reserves.
Question 19 [6 marks]
Enterprise and Entrepreneurship
A new entrepreneur is deciding how to source ingredients for a small chocolate business. Fair trade ingredients cost more but guarantee a fair price to overseas farmers; the cheaper alternative does not.
Evaluate whether the entrepreneur should choose the more expensive fair trade ingredients.
Model solutions
| Question 1[2 marks] | |
|---|---|
| Answer or working | Marks |
| a valid example, such as a questionnaire or survey of potential customers | B1 |
| a second valid example, such as a focus group or observation of a rival shop | B1 |
| Final answer: Any two of: questionnaires, surveys, focus groups, observation, sampling | |
| Question 2[2 marks] | |
|---|---|
| Answer or working | Marks |
| a valid reason, such as running out of cash | B1 |
| a second valid reason, such as a lack of demand for the product, strong competition, or poor planning | B1 |
| Final answer: Any two of: running out of cash, lack of demand, poor planning, strong competition, lack of management experience | |
| Question 3[3 marks] | |
|---|---|
| Answer or working | Marks |
| identifying an advantage, such as the data being collected specifically for the salon's own purpose | B1 |
| developing it, such as it directly answering questions about the salon's own local customers, which a national report cannot | B1 |
| concluding that this makes the findings more relevant and useful for the salon's own decisions | B1 |
| Final answer: Primary research is collected specifically for the salon's own purpose, giving relevant, up-to-date information about its own local customers that a national report cannot | |
| Question 4[3 marks] | |
|---|---|
| Answer or working | Marks |
| identifying that consumer confidence and income tend to rise during a boom | B1 |
| developing this, such as customers being more willing to spend on non-essential, luxury items rather than only essentials | B1 |
| concluding that this is likely to increase the business's sales revenue and profit during the boom | B1 |
| Final answer: Rising consumer confidence and income during a boom make customers more willing to spend on non-essential luxury items, increasing the business's sales revenue and profit | |
| Question 5[3 marks] | |
|---|---|
| Answer or working | Marks |
| identifying that influencer marketing costs far less than television advertising | B1 |
| developing this, such as reaching a targeted audience who already follow and trust that influencer, suiting the brand's likely younger target market | B1 |
| concluding that this gives good value for a new business's likely limited marketing budget | B1 |
| Final answer: Influencer marketing costs far less than television advertising and reaches a targeted, already-engaged audience, giving good value for a new business's limited marketing budget | |
| Question 6[3 marks] | |
|---|---|
| Answer or working | Marks |
| identifying that even a not-for-profit needs enough income to cover its running costs, such as rent and staff | B1 |
| developing this, such as being unable to continue any charitable work at all if it has to close | B1 |
| concluding that staying open is the top priority before it can help more people or expand | B1 |
| Final answer: Even a not-for-profit needs to cover its running costs to avoid closing, so staying open is the priority before it can help more people or expand | |
| Question 7[4 marks] | |
|---|---|
| Answer or working | Marks |
| identifying an advantage, such as lower costs from not paying shop rent, rates or shop staff | B1 |
| developing it, such as being able to offer lower prices or keep more profit per sale | B1 |
| identifying a second advantage, such as reaching a wider, potentially national or international, customer base | B1 |
| developing it, such as customers not being limited to those who can visit a physical location, increasing potential sales | B1 |
| Final answer: Two developed advantages, such as lower costs than running shops, and access to a wider customer base not limited by location | |
| Question 8[4 marks] | |
|---|---|
| Answer or working | Marks |
| identifying a reason, such as the business now being established with a reliable, loyal customer base | B1 |
| developing it, such as being able to use stable income to invest in expansion, such as a second shop, rather than needing to focus on basic costs | B1 |
| identifying a second reason, such as growth increasing market share or bringing economies of scale | B1 |
| developing it, such as lowering the average cost per unit and increasing profit as ingredients are bought in greater bulk | B1 |
| Final answer: Two developed reasons, such as an established, reliable customer base allowing investment in expansion, and growth bringing economies of scale that lower average costs | |
| Question 9[4 marks] | |
|---|---|
| Answer or working | Marks |
| identifying that customers perceive 1.99 as noticeably cheaper than 2.00, even though the actual difference is only 1 penny | B1 |
| developing it, such as customers tending to focus on the first digit, so the price seems to be under 2 pounds rather than about 2 pounds | B1 |
| identifying a second reason, such as the precise price appearing more carefully calculated | B1 |
| developing it, such as this making the product seem better value than a competitor's rounded price, encouraging customers to choose it | B1 |
| Final answer: Two developed reasons, such as customers perceiving 1.99 as noticeably cheaper due to the first digit, and a precise price appearing more carefully calculated and better value than a round price | |
| Question 10[4 marks] | |
|---|---|
| Answer or working | Marks |
| identifying a segmentation method, such as age | B1 |
| developing it, such as offering different class types or pricing for younger adults compared with older members | B1 |
| identifying a second method, such as income or socio-economic group | B1 |
| developing it, such as setting membership prices and payment plans that suit that group's disposable income | B1 |
| Final answer: Two developed methods, such as segmenting by age to vary class types and pricing, and by income to set membership prices and payment plans | |
| Question 11[4 marks] | |
|---|---|
| Answer or working | Marks |
| identifying an effect, such as the pound cost of importing stock rising, since more pounds are needed to buy the same amount of dollars | B1 |
| developing it, such as this squeezing the retailer's profit margin unless it raises its UK selling prices | B1 |
| identifying a second effect, such as demand from UK customers falling if prices are raised to compensate | B1 |
| developing it, such as this being especially likely if competitors who source stock differently do not need to raise prices by as much | B1 |
| Final answer: Two developed effects, such as a higher pound cost of imported stock squeezing margins, and a possible fall in demand if prices are raised to compensate | |
| Question 12[4 marks] | |
|---|---|
| Answer or working | Marks |
| identifying a risk, such as using up her entire savings safety net | B1 |
| developing it, such as having nothing to fall back on if the business then has a difficult period | B1 |
| identifying a second risk, such as the new van's running costs continuing even if it is not fully used | B1 |
| developing it, such as demand for the extra capacity being uncertain, so the second van could sit idle and lose money rather than earn it | B1 |
| Final answer: Two developed risks, such as losing her cash safety net, and the new van's costs continuing even if demand for it turns out lower than hoped | |
| Question 13[5 marks] | |
|---|---|
| Answer or working | Marks |
| dividing 92 by 400 | M1 |
| multiplying the result by 100 | M1 |
| a response rate of 23 percent | A1 |
| a valid method to increase the response rate, such as offering a small incentive or shortening the questionnaire | B1 |
| developing it, such as explaining that people are more willing to complete a quick survey or one offering a reward | B1 |
| Final answer: Response rate = 23 percent; a method such as offering a small incentive or shortening the questionnaire could increase how many people respond | |
| Question 14[5 marks] | |
|---|---|
| Answer or working | Marks |
| value added = 21 minus 6 | M1 |
| 15 pounds | A1 |
| dividing 15 by 6 and multiplying by 100 | M1 |
| 250 percent | A1 |
| identifying a factor of production used, such as labour, the maker's own time and skill, or capital, such as moulds | B1 |
| Final answer: Value added = 15 pounds, 250 percent of the material cost; this used the maker's own labour and capital such as moulds | |
| Question 15[6 marks] | |
|---|---|
| Answer or working | Marks |
| a point in favour, such as shorter appointments allowing more patients to be seen each day, increasing revenue and profit | B1 |
| developing it, such as this funding investment in new equipment or higher staff pay | B1 |
| a point against, such as the quality of care falling with less time per patient | B1 |
| developing it, such as existing patients who value the current thorough approach leaving for a competitor, damaging reputation long-term | B1 |
| a further factor, such as whether some efficiency could be found without cutting quality, for example better appointment scheduling | B1 |
| a justified conclusion weighing the short-term profit gain against the long-term risk to care quality and reputation | B1 |
| Final answer: A justified judgement weighing the short-term profit gain from seeing more patients against the long-term risk to care quality and reputation, considering whether efficiency could be found without cutting quality | |
| Question 16[6 marks] | |
|---|---|
| Answer or working | Marks |
| a point in favour, such as reaching a much larger number of potential customers than the boutiques alone | B1 |
| developing it, such as significantly increasing total sales volume and national brand awareness | B1 |
| a point against, such as the lower prices required by the supermarket reducing the profit margin on every item sold that way | B1 |
| developing it, such as this also risking making the brand seem less premium or exclusive, harming its image with existing boutique customers | B1 |
| a further factor, such as whether the extra volume would make up for the lower margin, or whether the boutique range could be kept separate and premium | B1 |
| a justified conclusion weighing wider reach and volume against lower margins and the risk to the brand's premium image | B1 |
| Final answer: A justified judgement weighing the much wider reach and volume from the supermarket against the lower margin per item and the risk to the brand's premium image with existing boutique customers | |
| Question 17[6 marks] | |
|---|---|
| Answer or working | Marks |
| identifying a negative impact, such as the tariff raising the cost of the imported fabric, directly increasing cost of sales | B1 |
| developing it, such as squeezing profit margin unless the manufacturer raises its own prices, risking losing price-sensitive customers | B1 |
| identifying a positive or adaptive impact, such as switching to a domestic fabric supplier to avoid the tariff altogether | B1 |
| developing it, such as a domestic supplier possibly charging more anyway, or being unable to match the needed quality or volume, so the saving may not fully materialise | B1 |
| a further point, such as how large a share of total costs this fabric represents, and how quickly an alternative source could realistically be found | B1 |
| a justified overall conclusion on whether the impact is likely to be more positive or negative, based on how easily an alternative source can be found | B1 |
| Final answer: A justified judgement weighing the higher cost of continuing to import the fabric under the tariff against the possibility, and practicality, of switching to a domestic supplier instead | |
| Question 18[6 marks] | |
|---|---|
| Answer or working | Marks |
| a point in favour of growth, such as opening two branches at once building market presence and revenue more quickly than opening one at a time | B1 |
| developing it, such as this potentially bringing greater brand recognition and economies of scale sooner | B1 |
| a point against, such as using most of its cash reserves leaving little buffer if the new branches are slower to become profitable than expected | B1 |
| developing it, such as this risking a cash flow crisis that could threaten even the original, successful branch | B1 |
| a further factor, such as whether a slower, one-branch-at-a-time approach could achieve similar growth with much less risk | B1 |
| a justified conclusion on whether the growth objective is worth the risk to the business's cash position and survival | B1 |
| Final answer: A justified judgement weighing the faster growth and market presence from opening two branches at once against the cash flow risk of using most reserves, and whether a more cautious approach could achieve similar growth more safely | |
| Question 19[6 marks] | |
|---|---|
| Answer or working | Marks |
| a point in favour of fair trade, such as appealing to increasingly ethically-conscious customers, who may pay a premium price | B1 |
| developing it, such as this building a positive brand image that can be used in marketing to stand out from competitors | B1 |
| a point against, such as the higher ingredient cost reducing profit margins, especially while the business is new and has little cash | B1 |
| developing it, such as this being a particular risk if not enough customers are willing to pay the higher price the costs require | B1 |
| a further factor, such as the entrepreneur's own personal values and long-term brand strategy, not just short-term cost | B1 |
| a justified conclusion on whether the ethical and marketing benefits are likely to outweigh the higher cost for this new business | B1 |
| Final answer: A justified judgement weighing the ethical appeal and brand-building benefit of fair trade sourcing against its higher cost and the risk to profit margins for a new, cash-limited business | |