2018 Paper 2 MS

INTERNATIONAL
GCSE
BUSINESS
(9225/2)
Mark scheme
Paper 2: Influences of marketing and finance on business activity
Specimen 2018
Copyright © 2018 Oxford International AQA Examinations and its licensors. All rights reserved.
MARK SCHEME – INTERNATIONAL GCSE BUSINESS (9225/2)
Mark schemes are prepared by the lead assessment writer and considered, together with the relevant
questions, by a panel of subject teachers. This mark scheme includes any amendments made at the
standardisation events which all associates participate in and is the scheme which was used by them
in this examination. The standardisation process ensures that the mark scheme covers the students’
responses to questions and that every associate understands and applies it in the same, correct way.
As preparation for standardisation each associate analyses a number of students’ scripts. Alternative
answers not already covered by the mark scheme are discussed and legislated for. If, after the
standardisation process, associates encounter unusual answers which have not been raised they are
required to refer these to the lead assessment writer.
It must be stressed that a mark scheme is a working document, in many cases further developed and
expanded on the basis of students’ reactions to a particular paper. Assumptions about future mark
schemes on the basis of one year’s document should be avoided; whilst the guiding principles of
assessment remain constant, details will change, depending on the content of a particular
examination paper.
International GCSE Business mark scheme

How to mark
Aims
When you are marking your allocation of scripts your main aims should be to:
• recognise and identify the achievements of students
• place students in the appropriate mark band and in the appropriate part of that mark band (high, low,
middle) for each assessment objective
• record your judgements with brief notes, annotations and comments that are relevant to the mark
scheme and make it clear to other examiners how you have arrived at the numerical mark awarded
for each Assessment Objective
• ensure comparability of assessment for all students, regardless of question or examiner.
Approach
It is important to be open-minded and positive when marking scripts.
The specification recognises the variety of experiences and knowledge that students will have. It
encourages them to study Business in a way that is relevant to them. The questions have been designed
to give them opportunities to discuss what they have found out about Business. It is important to assess
the quality of what the student offers.
Assessment Objectives
This component requires students to:
AO1: Demonstrate knowledge and understanding of business concepts and issues.
AO2: Apply knowledge and understanding of business concepts and issues to a variety of contexts.
AO3: Analyse and evaluate business information and issues to demonstrate understanding of business
activity, make judgements and draw conclusions.
Levels of response marking instructions

These levels of response mark schemes are broken down into levels, each of which has descriptors.
The descriptors for the level show the performance characteristics of the level.
Having familiarised yourself with the descriptors and indicative content, read through the answer and
annotate it (as instructed below) to identify the qualities that are being looked for and that it shows. You
can now check the levels and award a mark.
Copyright © 2018 Oxford International AQA Examinations and its licensors. All rights reserved. 3
Step 1 Determine a level

Start at the lowest level of the mark scheme and use it as a ladder to see whether the answer meets the
descriptors for that level. The descriptors for the level indicate the different qualities that might be seen in
the student’s answer for that level. If it meets all the descriptors for the lowest level then go to the next
one and decide if it meets this level, and so on, until you have a match between the level descriptors and
the answer. With practice and familiarity you will find that for better answers you will be able to skip
through the lower levels of the mark scheme quickly.
When assigning a level you should look at the overall quality of the answer and not look to pick holes in
small and specific parts of the answer where the student has not performed quite as well as the rest. If
the answer covers different aspects of different levels of the mark scheme you should use a best fit
approach for defining the level and then use the variability of the response to help decide the mark within
the level; eg if the response fulfils most but not all of level 3 with a small amount of level 4 material, it
would be placed in level 3 but be awarded a mark near the top of the level because of the level 4
content.
Step 2 Determine a mark

Once you have assigned a level you need to decide on the mark.
It is often best to start in the middle of the level’s mark range and then check and adjust. If there is a lot
of indicative content fully identifiable in the work you need to give the highest mark in the level. If only
some is identifiable or it is only partially fulfilled, then give the lower mark.
The exemplar materials used during standardisation will also help. There will be an answer in the
standardising materials that will correspond with each level of the mark scheme. This answer will have
been awarded a mark by the lead examiner. You can compare the student’s answer with the example to
determine if it is of the same standard, better or worse than the example. You can then use this to
allocate a mark for the answer based on the lead examiner’s mark on the example.
You may well need to read back through the answer as you apply the mark scheme to clarify points and
assure yourself that the level and the mark are appropriate.
In addition to the generic descriptors (presented in bold text), paper-specific indicative descriptors
(presented in plain text) are provided as a guide for examiners. These are not intended to be exhaustive
and you must credit other valid points.
An answer that contains nothing of relevance to the question must be awarded no marks.
Examiners are required to assign each of the student’s responses to the most appropriate level
according to its overall quality, then allocate a single mark within the level. When deciding upon a mark
in a level examiners should bear in mind the relative weightings of the assessment objectives (see page
22) and be careful not to over/under credit a particular skill. This will be exemplified and reinforced as
part of examiner training.
Specimen responses
Specimen responses are included to help clarify the way in which the mark scheme will be applied. It
should be noted however, that such responses are not meant to be definitive, nor intended to represent
a very good answer to a particular question. The nature of the subject means that there are often far
more acceptable responses to a particular question than could reasonably be listed in the mark scheme.
The specimen responses represent what is probably going to be the most likely answer to the questions
and illustrate where marks are awarded and levels of response reached. Teachers are advised against
using the content or structure of these specimen responses to tutor students in how to answer similar
questions, as identical marks can be achieved in a variety of different ways.
Annotating scripts
You should write a summative comment at the end for each assessment objective and indicate the
marks for each assessment objective being tested at the end of the answer in the margin in sequence.
It is vital that the way you arrive at a mark should be recorded on the script. This will help you with
making accurate judgements and it will help any subsequent markers to identify how you are thinking.
Please do not write negative comments about students’ work or their alleged aptitudes; this is
unprofessional and it impedes a positive marking approach.
Section A Total for this section: 15 marks
Question Part Marking guidance Total marks
01 Which one of the following is a type of loan? 1
Answer: B (Mortgage) AO1=1
02 What type of costs remain the same even if levels of output 1

change?
Answer: A (Fixed Costs) AO1=1
03 Which one of the following is not a factor of production? 1
Answer: B (Overdraft) AO2=1
04 Businesses that buy products from manufacturers and then sell 1

them on to retailers are known as?
Answer: D (Wholesalers) AO1=1
05 Changing the marketing mix to try to increase the demand for a 1

product which is in decline is known as what?
Answer: A (An Extension Strategy) AO1=1
06 Which one of the following is most likely to occur if a 1

manufacturing business becomes more environmentally
responsible?
Answer: C (Its reputation will improve) AO1=1
07 Give two methods that a country’s government might use to 4

encourage entrepreneurs to start small businesses. Explain how
each would help the entrepreneur.
AO1=2
One mark for identifying a correct method, plus one mark for AO2=2
offering some explanation or development.
Possible answers include:

• Providing training for would-be entrepreneurs
• Provide start-up loans to entrepreneurs
• Encourage schools/colleges to provide courses on enterprise
• Offering low rent premises etc
• Providing business advice and support
Specimen Response
The government could get schools to give enterprise lessons. (1)
This might get students to become entrepreneurs even if they
hadn’t thought of doing so before. (1)
08 Define the term Opportunity Cost. 2
Possible answers include: AO1=2
• The cost of the next best alternative

• What has to be forgone to have a particular thing
Specimen Response
It is what you have to give up to have something else (1) such as
going bowling means you give up going to the cinema. (1)
09 A business has fixed costs of US$ 5,000 and variable costs of 3

US$ 3 per item. The price of each item is US$ 7.
AO1=1
Calculate how many items the business needs to sell to reach AO2=2
its break-even point.
Show your calculations.
5000/(7-3) = 5000/4 = 1250 items
1 mark for showing calculation of contribution (7-3, or 4

shown)
1 mark for dividing into 5000
3 marks for correct answer
10 1 Identify and explain two benefits that the local builders receive by 4
buying their building materials in a competitive timber market.
Possible answers include: AO1=2

• Prices should be cheaper AO2=2
• Better customer service
• More encouragement to offer new products.
Specimen Response
It would mean prices would be cheaper (1) because timber
merchants have to lower prices to attract customers from other
merchants. (1)
Section B Total for this section: 41 marks

10 2 Identify and explain two reasons why having a good cash flow 4
would be important to Khashab.
One mark for identifying a reason, plus one mark for offering AO1=2
some explanation or development in the context. (2x2) AO2=2
• It allows Khashab to pay its own supplies/employees, etc.

• Saves having to extend its overdraft with subsequent
costs or find other liquid funding method.
Specimen Response
It means Khashab will have enough money to pay its debts. (1)
If it didn’t have enough cash available it would have to take out
an expensive overdraft. (1)
10 3 Using the information in Item B, calculate the payback period, 3

in years and months, if Khashab were to buy the new machine.
Outlay = 40,000 OMR

Cost savings = 15,000 OMR each year AO1=1
Payback period = 40,000/15,000 = 2 2/3 years AO2=2
= 2 years 8 months
1 mark for showing 40,000/15,000

2 marks for giving the answer 2 2/3 years
3 marks for correct answer – 2 years 8 months.
10 4 Explain how the fall in the profits in 2017 might affect Khashab’s 6
shareholders.
AO2=3
Possible areas to consider: AO3=3
• They will probably see a fall in dividends.
• Long term security of the business is undermined
• Value of shareholding will fall.
• Would find it harder to replace worn-out machinery.
• Makes it more difficult to expand – retain profits.
Specimen Response
Lower profits mean the shareholders will probably get lower
dividends. This may cause them to want to sell their shares
because they could get a better return elsewhere. This would put
pressure on the share price causing it to fall and lowering the
value of the shares the shareholders own.
Alternatively Khashab may decide to reduce the amount of

retained profit going back into the business. This would allow
the shareholders to keep the level of dividends that they expect.
It would mean though that the company has less money to invest
into the business, which would reduce its ability to expand in the
future. Less investment would very likely result in future profits
going down, which makes the situation even worse for the
shareholders in the long term.
Level 3 response
Examiners are reminded that AO2 and AO3 are regarded as interdependent. When deciding on a mark
all should be considered together using the best fit approach. In doing so, examiners should bear in mind
the relative weightings of the Assessment Objectives. Due to the greater number of marks available for
AO3, answers at level 3 will have a greater depth of analysis (AO3) but may show similar levels of
application of knowledge and understanding (AO2) to a level 2 answer.
Level Description Marks

3 Detailed understanding and application of the topics 5–6
• Applies knowledge and understanding to the context sufficiently, AO2
throughout the answer.
• A sound and detailed understanding of business concepts and issues. AO1
2 Sound understanding and application of the topics 3–4
• Applies knowledge and understanding to the context sufficiently, in AO2
most areas.
• A sound understanding of business concepts and issues, but the AO1
answer lacks detail.
1 Basic understanding and application of the topics 1–2
• Knowledge and understanding is applied to the context, but may be AO2
fragmented.
• Understanding of business concepts and issues is simplistic. AO1
0 Nothing worthy of credit.

10 5 Using Figure 1 analyse how Khashab’s financial performance 6
might change in 2018 if its prices are reduced to match those
of its competitors. AO2=2
AO3=4
• Reduction in prices may stimulate growth in sales as new
prices would more closely match competitors.
• Price rise might reduce profit made on each sale.
• Would be unsure if competitors would reduce their prices
even further resulting in a price war with profits falling.
• Might improve customer loyalty brought about by being
longer established that the competitors so might increase
sales.
Specimen Response
Lowering prices might cause Khashab’s sales revenue to fall
as they are getting a lower price for each item they sell. This
would cause profits to fall unless they could find a way of
lowering their costs by a similar amount to the fall in revenue.

Khashab has been established longer than its competitors.
This might mean they get a lot more customers it their prices
are lowered to become the same as their competitors’.
Profits might actually rise, though, if the lower prices attract

customers from their competitors. They could be making less
profit on each item but because they are selling more items the
overall profit would rise.
Level 3 response

3 Detailed analysis of topics based on the context 5–6
• Business areas are analysed in depth. AO3 x2
• Applies knowledge and understanding to the context sufficiently,
2 Sound analysis of topics based on the context 3–4
• Business areas are partially analysed. AO3
most areas.
1 Basic analysis of topics based on the context 1–2
• Analysis of business areas is simplistic. AO3
fragmented.

10 6 Analyse how Khashab could be affected if the exchange 6
value of the Omani rial falls against the euro.
AO2=2
AO3=4
• Imports of timber would increase in price.
• Could result in further fall in profits.
• Khashab would need to decide whether to raise its prices.
• May look to sell timber abroad if other exchange rates are
strengthened.
Specimen Response
If the rial falls it will become more expensive for Khashab to
buy timber from its European suppliers. This could cause its
profits to fall if it was unable to pass on the increase in costs
to its customers, which is unlikely as Khashab is already

having problems competing with other timber businesses
locally.
The higher value of the euro might cause Khashab to look

elsewhere for its supplies of wood. If other currencies’ values
have stayed the same it might be more worthwhile to trade
with non-euro countries.
It is possible that the European suppliers are willing to lower

their prices so that the amount Omanis pay remain the same
and so Khashab will not be affected. This would depend if
Oman is a major customer of the timber merchants and they
do not want to lose valuable customers.
Level 3 response

most areas.
fragmented.

10 7 Recommend to Khashab whether it would help its financial 12
situation if it reduced the three months’ credit it gives to its
customers.
AO2=4
Give a clear supported recommendation using Items A, B and AO3=8
C to support your arguments.
Areas for consideration:

• Could help with the cash flow problems but customers could
go elsewhere.
• It would reduce costs of overdraft helping to raise profits.
• There is a tradition of having this level of credit – it might be
very hard to change it. Could alienate customers and have
a negative effect on finances.
• There has been some streamlining of indirect costs – this
might have a better long term effect on lowering costs.
the relative weightings of the Assessment Objectives. More weight should therefore be given to AO3
than AO2.

4 Detailed analysis and evaluation of topics based on the context 10–12
• Coherent line of reasoning followed, which is sustained, relevant and
substantiated. There is a focused conclusion that is fully justified and AO3
follows clearly from the analysis.
• Business areas are analysed in depth.
• Knowledge and understanding is detailed and appropriately applied AO3
within context. AO2
3 Sound analysis and evaluation 7–9
• Coherent line of reasoning given and the conclusion is appropriate AO3
and related to the preceding analysis.
• Knowledge and understanding is detailed and appropriately applied
within context. AO2
2 Limited attempt made to analyse the topics based on the context 4–6
• Evidence of some line of reasoning, with a conclusion that has
limited justification. AO3
• Analysis of business areas is simplistic.
• Some knowledge and understanding is applied within context. AO3
AO2
1 Basic evaluation of topics but without any real support or analysis 1–3
• A conclusion is present but without any reasoned support.
• No discernible or relevant analysis. AO3
• A clear attempt to apply knowledge and understanding, but context AO3
may be lacking. AO2
0 Nothing worthy of credit
Section C Total for this section: 34 marks

11 1 Fast food catering is an example of a tertiary industry. Explain 2
what is meant by a tertiary industry.
AO1=2
• An industry that provides a service
• In chain after primary and secondary industries
• Examples given, other than catering
Specimen Response
This is an industry that provides a service (1) such as insurance
and retailing. (1)
11 2 Analyse why 17-year old Fred DeLuca might have found it 6

difficult to obtain a bank loan to raise the US$ 1000 needed to
start Subway. AO2=2
AO3=4
Possible areas to consider:
• He was below the age of legal responsibility so was not
accountable for the debt of a bank loan.
• Banks would be reluctant to lend money to someone with no
experience.
• Business idea was novel so no evidence that there was a
market for ‘subs’.
Specimen Response
As a 17-year-old Fred was not responsible for any debts he ran
up so banks could not sue him if he stopped paying them back.
So the banks would not want to lend to such a young person.
Never having run a business before would go against Fred as
he could not demonstrate that he had the skills to make
Subway profitable.
Also, selling sandwiches rather than burgers was a new type of

fast food and didn’t have a track record of success. Banks
would be worried that the business would not take off and lose
money so it would be impossible for them to be paid back.
It seemed that Fred was still at school. The banks would

probably think that the business may close in a year when he
goes to university and would not have had time to allow the
business to take off.
Level 3 response

most areas.
fragmented.

11 3 Identify and explain two ways Subway might have conducted 4
market research in China to find out if it was a suitable location
for its restaurants.
AO1=2
One mark for identifying a way, plus one mark for offering some AO2=2
explanation or development in context. (2x2)

• Secondary research on sales of established fast food
outlets in China (KFC, McDonalds)
• Consumer questionnaires
• Focus groups
Specimen Response
Subway could have got groups of people in different areas of
China together and asked them questions. (1) This method is
good because it allows Subway to quiz them about whether a
Subway would be well received in a particular location. (1)
11 4 Using the information in Items D and E, analyse the benefits to 6
Subway of choosing to open its restaurants in China.
AO2=2
Possible areas to consider: AO3=4
• Large, undeveloped market
• Economic growth in China creating middle class in urban
areas
• Interest in Western products and lifestyles
• Not a saturated market
Specimen Resonse
The fast food industry is saturated in many western countries
which makes it very hard for a business to expand. Even if
more people start going to Subway it may find that other fast
food companies draw them back with special offers. China has
relatively few fast food outlets so there is far more opportunity
to expand without rivals changing their marketing to bring
customers back.
China also has a very large population and an expanding

economy, making it very attractive. Subway wants to target the
wealthy middle class and there is an increasing number of
these people. There will be many entrepreneurs looking to
start a business and as they do not have a long history of
private enterprise, many will want the security of a franchise
where the risk of failure is lower.
Level 3 response
the relative weightings of the Assessment Objectives.

most areas.
fragmented.

11 5 Identify and explain two ways Subway can use social media to 4
promote the brand.
One mark for identifying a way, plus one mark for offering some AO1=2
explanation or development in context. (2x2) AO2=2

• Get subscribers to platforms like Facebook by offering
discount incentive.
• Pay for advertising on Twitter etc.
• Offer money off incentives.
• Provide newsfeeds on new restaurants opening.
Specimen Response
Subway could encourage customers to follow it on Twitter. (1)
This way they could keep them informed about new offers and
changes in the menu as a form of promotion. (1)

11 6 If Subway is to expand within the Chinese market, it needs to 12
compete with other fast food restaurants.
AO2=4
Evaluate whether using price penetration is the best marketing AO3=8
strategy for Subway.
Use the information in Items D, E and F to give reasons for your
judgement.
Areas for consideration:

• Lower initial prices will help as many consumers find the
current pricing too expensive.
• Product might lose its cachet with young urban people if a
mass market is sought.
• Other marketing might be more appropriate, such as
promotion or changing the product to more suit Chinese
tastes.
the relative weightings of the Assessment Objectives. More weight should therefore be given to AO3
than AO2.

4 Detailed analysis and evaluation of topics based on the context 10–12
• Coherent line of reasoning followed, which is sustained, relevant
and substantiated. There is a focused conclusion that is fully AO3
justified and follows clearly from the analysis.
• Business areas are analysed in depth.
• Knowledge and understanding is detailed and appropriately applied AO3
within context. AO2
3 Sound analysis and evaluation 7–9
• Coherent line of reasoning given and the conclusion is appropriate AO3
and related to the preceding analysis.
• Knowledge and understanding is detailed and appropriately applied
within context. AO2
2 Limited attempt made to analyse the topics based on the context 4–6
• Evidence of some line of reasoning, with a conclusion that has
limited justification. AO3
• Analysis of business areas is simplistic.
• Some knowledge and understanding is applied within context. AO3
AO2
1 Basic evaluation of topics but without any real support or 1–3

analysis
• A conclusion is present but without any reasoned support. AO3
• No discernible or relevant analysis. AO3
• A clear attempt to apply knowledge and understanding, but context AO2
may be lacking.
Allocation of marks to Assessment Objectives
AO1 AO2 AO3 Total

01 1 1
02 1 1
03 1 1
04 1 1
05 1 1
06 1 1
07 2 2 4
08 2 2
09 1 2 3
10.1 2 2 4
10.2 2 2 4
10.3 1 2 3
10.4 3 3 6
10.5 2 4 6
10.6 2 4 6
10.7 4 8 12
11.1 2 2
11.2 2 4 6
11.3 2 2 4
11.4 2 4 6
11.5 2 2 4
11.6 4 8 12
Totals 26 32 32 90
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INTERNATIONAL

International GCSE Business mark scheme

Levels of response marking instructions

Step 1 Determine a level

Step 2 Determine a mark

Section A Total for this section: 15 marks

Question Part Marking guidance Total marks

01 Which one of the following is a type of loan? 1

Answer: B (Mortgage) AO1=1

02 What type of costs remain the same even if levels of output 1

Answer: A (Fixed Costs) AO1=1

03 Which one of the following is not a factor of production? 1

Answer: B (Overdraft) AO2=1

04 Businesses that buy products from manufacturers and then sell 1

Answer: D (Wholesalers) AO1=1

05 Changing the marketing mix to try to increase the demand for a 1

Answer: A (An Extension Strategy) AO1=1

06 Which one of the following is most likely to occur if a 1

Answer: C (Its reputation will improve) AO1=1

Question Part Marking guidance Total marks

07 Give two methods that a country’s government might use to 4

Possible answers include:

08 Define the term Opportunity Cost. 2

Possible answers include: AO1=2

• The cost of the next best alternative

Question Part Marking guidance Total marks

09 A business has fixed costs of US$ 5,000 and variable costs of 3

Show your calculations.

5000/(7-3) = 5000/4 = 1250 items

1 mark for showing calculation of contribution (7-3, or 4

Possible answers include: AO1=2

Section B Total for this section: 41 marks

Question Part Marking guidance Total marks

Possible answers include:

• It allows Khashab to pay its own supplies/employees, etc.

10 3 Using the information in Item B, calculate the payback period, 3

Outlay = 40,000 OMR

1 mark for showing 40,000/15,000

Alternatively Khashab may decide to reduce the amount of

Level Description Marks

Question Part Marking guidance Total marks

Question Part Marking guidance Total marks

Profits might actually rise, though, if the lower prices attract

Level Description Marks

Question Part Marking guidance Total marks

to its customers, which is unlikely as Khashab is already

The higher value of the euro might cause Khashab to look

It is possible that the European suppliers are willing to lower

Level Description Marks

Question Part Marking guidance Total marks

Areas for consideration:

Level Description Marks

0 Nothing worthy of credit

Section C Total for this section: 34 marks

Question Part Marking guidance Total marks

11 2 Analyse why 17-year old Fred DeLuca might have found it 6

Also, selling sandwiches rather than burgers was a new type of

It seemed that Fred was still at school. The banks would

Level Description Marks

Question Part Marking guidance Total marks