| Date | November 2018 | Marks available | 4 | Reference code | 18N.1.SL.TZ0.2 |
| Level | Standard level | Paper | Paper 1 | Time zone | Time zone 0 |
| Command term | Describe | Question number | 2 | Adapted from | N/A |
Question
Refer to the As Fair As case study (SL/HL paper 1 Nov 2018).
Describe two external stakeholders of AFA, other than customers.
Refer to the As Fair As case study (SL/HL paper 1 Nov 2018).
With reference to AFA, explain the importance of branding.
Markscheme
External stakeholders include:
- customers (not allowable for this question)
- suppliers – originally nervous about supplying Sam’s new business. Need to conform to fair trade principles. Could include mystery shopper if it is clear that this is not an employee
- government – for taxes, data etc. Includes a Companies House role for proper accounts. Could include trading standards for ethics. Could include licensing issues. No evidence as to whether government wants to encourage fair trade or not.
- banks and other creditors – at times AFA needs finance for expansion
- special interest groups/pressure groups, eg charities, NGOs, pressure groups – there is a fair trade movement (no need to use terms like special interest groups)
- the community – little evidence in case so not a good one to choose to get context mark
- competitors – supermarkets also stock fair trade products.
- possible external sources of finance.
N.B.: Shareholders are NOT external.
Mark as 2 + 2.
Award [1] for each correct element identified and [1] for a description of how that feature relates to AFA. Award a maximum of [2] per element.
Refer to Paper 1 markbands for May 2016 forward, available under the "Your tests" tab > supplemental materials.
The importance of branding to AFA can be classified in a number of areas:
- competition: branding can be used to differentiate eg from supermarkets.
- USP: AFA seeks to be the only dedicated fair trade store. Branding can enhance this USP
- pricing: A well-developed brand can help AFA set premium prices, helping profits which need improving.
The importance can be developed through:
- the need to attract customers (eg, to the new stores)
- the need to encourage repeat purchases, eg through brand loyalty.
Accept any other relevant explanation.
Marks should be allocated according to the paper 1 markbands for May 2016 forward, section A.
Award a maximum of [3] for a theoretical answer, often a pre-prepared textbook answer
Award a maximum of [5] if the explanation is mainly descriptive, but in context.
