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Mark Scheme (Results)

January 2019

Pearson Edexcel IAS

In Economics (WBS11)
Paper 01 Marketing and People
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January 2019
Publications Code WBS11_01_1901_MS
All the material in this publication is copyright
© Pearson Education Ltd 2019
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General Marking Guidance

• All candidates must receive the same treatment. Examiners

must mark the first candidate in exactly the same way as they
mark the last.
• Mark schemes should be applied positively. Candidates must
be rewarded for what they have shown they can do rather than
penalised for omissions.
• Examiners should mark according to the mark scheme not
according to their perception of where the grade boundaries
may lie.
• There is no ceiling on achievement. All marks on the mark
scheme should be used appropriately.
• All the marks on the mark scheme are designed to be awarded.
Examiners should always award full marks if deserved, i.e. if
the answer matches the mark scheme. Examiners should also
be prepared to award zero marks if the candidate’s response
is not worthy of credit according to the mark scheme.
• Where some judgement is required, mark schemes will
provide the principles by which marks will be awarded and
exemplification may be limited.
• When examiners are in doubt regarding the application of the
mark scheme to a candidate’s response, the team leader must
be consulted.
• Crossed out work should be marked UNLESS the candidate has
replaced it with an alternative response.
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Question Answer Mark

1(a) Knowledge 2

Up to 2 marks for defining the term ‘product portfolio’, e.g.

• The range of products/services (1) that is sold/produced by a
business (1).
(2)

Question Answer Mark

1(b) Knowledge 1, Application 2, Analysis 1

Quantitative skills assessed:

QS2: calculate, use and understand percentages and percentage
changes

Knowledge
1 mark for identifying the formula for YED:
• YED = % change in quantity demanded / % change in income (1)

Application
Up to 2 marks for selecting the correct data:
• -2.0 (1) / (533-520) / 520 x 100 = 2.5% (1)

Analysis
1 mark for calculating YED
• -0.8 (1)

NB If no working is shown award marks as below:

• If answer given is -0.8 award 4 marks

• If answer given is 0.8 award 3 marks
(4)
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Question Answer Mark

1(c) Knowledge 2, Application 2, Analysis 2

Knowledge
Up to 2 marks for defining mass market, e.g.
• A large unsegmented market (1) where mass appeal products are
on sale (1).

OR

For giving two difficulties, e.g.

• High levels of competition (1).
• Lower profit margins than a niche market (1).

Application
Up to 2 marks for answers contextualised to Primark, e.g.
• Primark faces competition from other fashion retailers such as Next
(1).
• Primark sell clothing and other products at low prices (1).

Analysis
Up to 2 marks for reasons / causes / consequences for Primark, e.g.
• Primark must differentiate itself from other brands to be successful
(1).
• Primark must continually try to operate to keep costs low such as
not spending on advertising (1).

NB Cap at 3 marks if only one difficulty is given

(6)
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Question Indicative content

1(d)
Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of
the points that candidates may make but this does not imply that any of these
must be included. Other relevant points must also be credited.

Knowledge, Application, Analysis, Evaluation – indicative content

• Cost plus pricing is a cost-based method for setting the prices of goods and
services and is calculated by adding a mark-up percentage to the cost of the
product.
• It is a simple and quick way of pricing especially when Primark sells a large
portfolio of goods.
• The cost plus method offers a guarantee of a profit if the clothes sell. If
Primark finds that costs are rising, it can take appropriate steps by varying
the price.
• However, this method of pricing does not take into account the actions of
competitors. It may be that Primark could price its goods higher in line with
the prices of its competitors.
• It is often difficult to accurately calculate total costs of producing a product.
Primark source goods from around the world. Labour costs, material costs,
delivery costs, exchange changes will change regularly.

Level Mark Descriptor

0 No rewardable material.
Level 1 1–2 Isolated elements of knowledge and understanding – recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.
Level 2 3–5 Accurate knowledge and understanding.
Applied accurately to the business and its context.
Chains of reasoning are presented, showing cause(s) and/or effect(s)
but may be assertions or incomplete.
An attempt at an assessment is presented that is unbalanced and
unlikely to show the significance of competing arguments.
Level 3 6–8 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Logical chains of reasoning, showing cause(s) and/or effect(s).
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Assessment is balanced, well contextualised, using quantitative and/or

qualitative information, and shows an awareness of competing
arguments/factors.
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Question Indicative content

1(e)
Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of
the points that candidates may make but this does not imply that any of these
must be included. Other relevant points must also be credited.

Knowledge, Application, Analysis, Evaluation – indicative content

• Ethical sourcing is where a business buys materials and products that are
produced using fair working conditions and/or with no negative impact on
the environment.
• The Primark Code of Conduct is a set of ethical principles that suppliers
must commit to. The code states, amongst other things, that child labour
shall not be used.
• It is important to Primark as ‘there is increasing awareness about the
ethics of clothes manufacturing’ and bad publicity could damage the
reputation of Primark and impact its sales.
• Having a reputation for poor ethics could lead to poor sales if consumers
are aware/concerned about the problems.
• Ethical sourcing may lead to improved employee motivation which may
result in improved customer service for Primark’s customers and increased
revenues for the company
• However, sourcing ethically is costly. Paying fair wages for example will
push up the cost of the clothes which may affect Primark’s USP of offering
low prices.
• Ethical sourcing may not be a primary objective or concern of Primark as
they may be more concerned with keeping prices low /achieving higher
market share.
• It is debateable whether consumers are actually concerned with ethical
sourcing or whether they are more concerned with low priced fashion. It
may be, therefore, more important to Primark to keep prices low to
maintain customer loyalty.
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Level Mark Descriptor

0 A completely inaccurate response.
Level 1 1–2 Isolated elements of knowledge and understanding – recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.
Level 2 3–4 Elements of knowledge and understanding, which are applied to the
business example.
Chains of reasoning are presented, but may be assertions or
incomplete.
A generic or superficial assessment is presented.
Level 3 5–7 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Analytical perspectives are presented, with developed chains of
reasoning, showing cause(s) and/or effect(s).
An attempt at an assessment is presented, using quantitative and/or
qualitative information, though unlikely to show the significance of
competing arguments.
Level 4 8–10 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
A coherent and logical chain of reasoning, showing cause(s) and/or
effect(s).
Assessment is balanced, wide ranging and well contextualised, using
quantitative and/or qualitative information and shows an awareness of
competing arguments/factors, leading to a supported judgement.
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Question Answer Mark

2(a) Knowledge 2

Up to 2 marks for defining the term entrepreneur e.g.

• A person who sets up in business (1) and takes risks to
generate a profit (1).
(2)

Question Answer Mark

2(b) Knowledge 1, Application 2, Analysis 1
Quantitative skills assessed:
QS3: construct and interpret a range of standard graphical forms.

Knowledge
1 mark for correctly constructing a supply and demand diagram with
correctly labelled axes as ‘price’ and ‘quantity’ (1)

Application
Up to 2 marks for:
Showing original equilibrium price and quantity (1).
Shifting the supply curve to the left (1).

Analysis
1 mark for showing the new equilibrium and its effect on price
(increasing) and quantity (decreasing) (1).

(4)
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Question Answer Mark

2(c) Knowledge 2, Application 2, Analysis 2

Knowledge
Up to 2 marks for defining demand, e.g.
• The amount of goods and services consumers are willing and able
to buy (1) at a given price at a given time (1)

OR

For stating up to two factors that may impact demand, e.g.

• Changes in trends and fashions (1)
• Price of substitutes (1)

Application
Up to 2 marks for answers contextualised to Innocent, e.g.
• People are becoming more concerned about their health and diets
(1)
• Competition launch lower priced smoothies (1)

Analysis
Up to 2 marks for reasons/causes/consequences for Innocent, e.g.
• If people are more health conscious they are more likely to
increase purchases of smoothies and other healthy drinks (1).
• If competition challenge the market position of Innocent this may
reduce the demand for Innocent smoothies and decrease sales
revenue (1).

NB Cap at 3 marks if only one factor is given

(6)
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Question Indicative content

2(d)
Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of
the points that candidates may make but this does not imply that any of these
must be included. Other relevant points must also be credited.

Knowledge, Application, Analysis, Evaluation – indicative content

• Segmentation is dividing the market into groups of people with similar

attributes or common characteristics.
• Innocent segment the market by demographics and lifestyle-products are
available for younger people as well as those seeking a healthier lifestyle.
• Focusing on specific market segments allows Innocent to tailor products to
meet the particular needs of those customers to increase brand loyalty.
• Market segmentation, helps Innocent to direct advertising and promotion
to specific groups of customers to increase sales.
• However, segmentation increases costs. When a firm attempts to serve
different groups of customers the cost of production rises as well as
research, promotional and distribution costs.
• By focusing on providing healthier food and drinks there is a danger that
this specialisation could lead to problems if consumers change their
purchasing habits significantly.
• The market segments identified may be too small, e.g. Coconut water, and
may not generate sufficient sales to be viable / profitable for the business

Level Mark Descriptor

0 No rewardable material.
Level 1 1–2 Isolated elements of knowledge and understanding – recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.
Level 2 3–5 Accurate knowledge and understanding.
Applied accurately to the business and its context.
Chains of reasoning are presented, showing cause(s) and/or effect(s)
but may be assertions or incomplete.
An attempt at an assessment is presented that is unbalanced, and
unlikely to show the significance of competing arguments.
Level 3 6–8 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Logical chains of reasoning, showing cause(s) and/or effect(s).
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Assessment is balanced, well contextualised, using quantitative and/or

qualitative information and shows an awareness of competing
arguments/factors.
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Question Indicative content

2(e)
Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of
the points that candidates may make but this does not imply that any of these
must be included. Other relevant points must also be credited.

Knowledge, Application, Analysis, Evaluation – indicative content

• Test marketing involves trialling the product in a small area or to a

limited number of users to assess the suitability of a product.
• The smoothies were sold in 10 UK shops to test whether the product
would sell. This allows Innocent to determine the potential success of
their products.
• Innocent are able to gather feedback and make changes to the products
before launching on a larger scale and so preventing costly mistakes.
• Selling in 10 shops enables them to gather sales data to assist with
production planning for potential future demand.
• However, a disadvantage of test marketing is the cost which can be
expensive and time consuming.
• Testing the new products in a limited number of shops may delay the
launch of the product which may mean losing first-mover advantages.
• During test marketing Innocent may run the risk of competitors learning
about their products which may be copied and brought to the market
earlier.
• Results from test marketing may not be conclusive and do not always
predict success. Products that sell locally might not sell well in other
geographical areas. Innocent run the risk that the findings from the test
marketing is not representative of other groups of customers.
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Level Mark Descriptor

0 No rewardable material.
Level 1 1–2 Isolated elements of knowledge and understanding – recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.
Level 2 3–4 Elements of knowledge and understanding, which are applied to the
business example.
Chains of reasoning are presented but may be assertions or
incomplete.
A generic or superficial assessment is presented.
Level 3 5–7 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Analytical perspectives are presented, with developed chains of
reasoning, showing cause(s) and/or effect(s).
An attempt at an assessment is presented, using quantitative and/or
qualitative information, though unlikely to show the significance of
competing arguments.
Level 4 8–10 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
A coherent and logical chain of reasoning, showing cause(s) and/or
effect(s).
Assessment is balanced, wide ranging and well contextualised, using
quantitative and/or qualitative information, and shows an awareness
of competing arguments/factors, leading to a supported judgement.
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Question Indicative content

3
Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance. The indicative content below exemplifies some of
the points that candidates may make but this does not imply that any of these
must be included. Other relevant points must also be credited.

Knowledge, Application, Analysis, Evaluation – indicative content

Internal recruitment

• Internal recruitment is when the business looks to fill a job vacancy from
within the company.
• IKEA are expanding rapidly and is looking for creative, enthusiastic people
who can contribute towards their sales growth.
• It is more cost efficient as the business does not have to advertise the job
externally. This will help IKEA keep costs and prices low to enable them to
remain competitive in the market.
• By recruiting internally, IKEA know the capabilities of the candidate, ie
whether they are creative and enthusiastic and have a better idea of how
they will perform in this new role. Enthusiastic staff may provide better
customer service and boost sales.
• Promoting staff from within the company can be motivating for all
employees who will recognise that their hard work is rewarded and so
increase productivity of the business.
• IKEA will know if the internal candidate is likely to fit the IKEA culture and get
on well with the rest of the team. Good teamwork is required to improve
productivity and customer service.
• However, internal recruitment will not bring fresh ideas or new thinking into
the business. Recruiting internally will create further vacancies which will
eventually need to be filled externally.

External recruitment

• External recruitment is when the business looks to fill the vacancy from
outside of the business.
• May be preferable because IKEA prides itself on creative and innovative
products and recruiting externally may mean there are new ideas or energy
coming into the business.
• Whilst IKEA has 190,000 workers internal recruitment still limits the potential
number of candidates that they can choose from. External recruitment
offers a wider pool of potential talent to choose from.
• However, external recruitment is expensive and a long process and there is
no guarantee you will find the right person to fit in with IKEA’s values.
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• Different job roles will require different skills and IKEA must assess if these
skills can be found internally or whether external recruitment is required.
• IKEA would have to look at the effectiveness of internal and external
recruitment to see historically which candidates have performed the best
and contributed the most to growth.
• IKEA is likely to use a combination of both when recruiting staff depending
on the job requirements. Also when opening a new store they may have no
option but to recruit externally to fill all of the job roles required.

Level Mark Descriptor

0 No rewardable material.
Level 1 1–4 Isolated elements of knowledge and understanding.
Weak or no relevant application of business examples.
An argument may be attempted, but will be generic and fail to connect
causes and/or consequences.
Level 2 5–8 Elements of knowledge and understanding, which are applied to the
business example.
Arguments and chains of reasoning are presented but connections
between causes and/or consequences are incomplete. Attempts to
address the question.
A comparison or judgement may be attempted but it will not
successfully show an awareness of the key features of business
behaviour or business situation.
Level 3 9–14 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Uses developed chains of reasoning, so that causes and/or
consequences are complete, showing an understanding of the
question.
Arguments are well developed.
Quantitative and/or qualitative information is introduced in an attempt
to support judgements, a partial awareness of the validity and/or
significance of competing arguments and may lead to a conclusion.
Level 4 15–20 Accurate and thorough knowledge and understanding, supported
throughout by relevant and effective use of the business
behaviour/context.
Uses well-developed and logical, coherent chains of reasoning,
showing a range of cause and/or effect(s).
Arguments are fully developed.
Quantitative and/or qualitative information is/are used well to support
judgements. A full awareness of the validity and significance of
competing arguments/factors, leading to balanced comparisons,
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judgements and an effective conclusion that proposes a solution

and/or recommendations.
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