Oxford Cambridge and RSA

Tuesday 14 May 2024 – Afternoon

GCSE (9–1) Business
J204/01 Business 1: business activity, marketing and people
Time allowed: 1 hour 30 minutes

You can use:

* 1 3 7 2 5 9 2 0 1 9 *

• a calculator

* J 2 0 4 0 1 *

Please write clearly in black ink. Do not write in the barcodes.

Centre number Candidate number

First name(s)

Last name

INSTRUCTIONS
• Use black ink.
• Write your answer to each question in the space provided. If you need extra space use
the lined pages at the end of this booklet. The question numbers must be clearly shown.
• Answer all the questions.

INFORMATION
• The total mark for this paper is 80.
• The marks for each question are shown in brackets [ ].
• Quality of extended response will be assessed in questions marked with an asterisk (*).
• This document has 20 pages.

ADVICE
• Read each question carefully before you start your answer.

© OCR 2024 [603/0295/1] OCR is an exempt Charity

DC (ST/SG) 334876/4 Turn over
 2
Section A

1 What is a disadvantage of being a sole trader?

A Can only have one employee

B Cannot share business ownership

C Legally required to produce a business plan

D Must pay corporation tax

Your answer B [1]

2 What is a financial method of motivation that a restaurant manager may use?

A An award scheme for the chefs to develop low cost meals

B Introduce profit sharing for the chefs

C Make staff pay for any glasses or plates they break

D Praise staff who suggest how the restaurant could save money

Your answer B [1]

3 What is a benefit to the local community of a nearby carpet factory extending its operating hours?

A A wider choice of carpet designs will be available

B Increased road congestion from more lorries delivering textiles

C More job opportunities will be created

D The business will pay higher taxes

Your answer C [1]

© OCR 2024
 3
4 What is one of the ‘four Ps’ of the marketing mix?

A Penetration

B Place

C Planning

D Profit

Your answer B [1]

5 A clothing designer may choose to flatten its organisational structure to reduce the:

A creativity of its garment designers

B independence of its fabric buyers

C need for innovation and change

D time it takes to respond to changes in fashion

Your answer [1]

D

6 Two brothers are currently unemployed. They decide to set up their own window cleaning
business, trading as a partnership.

What is an entrepreneurial risk for the brothers?

A Cold weather

B Paying taxes

C Poor health

D Slippery ladders

Your answer C [1]

© OCR 2024 Turn over

 4
7 What is not a benefit to a golfing equipment retailer of training its sales assistants?

A To help staff give advice on which golf clubs to buy

B To increase the sales of golf umbrellas and waterproof clothing

C To motivate staff to assist customers who are trying on golf shoes

D To reduce the time it takes to make golf bags and golf trolleys

Your answer D [1]

8 One purpose of marketing at a library is to:

A advertise for an apprentice librarian

B encourage more families to use the library

C provide better training for librarians

D update the library’s stock of books

Your answer B [1]

9 A business has recently changed its main objective from ‘survival’ to ‘growth’.

What would most likely explain this change of objective?

A The business has become too big

B The business has reduced its productivity

C The business is experiencing high demand

D The business needs to lower its costs

Your answer C [1]

© OCR 2024
 5
10 The current position of a product is shown by X on the product lifecycle diagram.

Sales

Time

According to the diagram:

A sales grew rapidly but the product is now in maturity

B sales grew slowly but the product is now in decline

C the product continues to be highly profitable

D the product is experiencing a rapid decline

Your answer A [1]

11 What is a benefit to a patient of receiving communication from their hospital doctor by email
rather than by letter?

A Doctors receive confirmation of receipt when the email is opened

B Emails can contain hyperlinks to further information about treatments

C Emails save money by reducing stationery, printing, and postal costs

D Multiple medical appointments can be sent out at the same time

Your answer B [1]

12 What impacts are a customer boycott most likely to have on a business?

A External growth, reduced profit, increased dividends

B Fewer customers, reduced profit, increased market share

C Improved brand image, more customers, increased profit

D Worsened reputation, lower sales, reduced profit

Your answer D [1]

© OCR 2024 Turn over

 6
13 An independent toy business is seeing fewer potential customers visit its shop.

Which change to its marketing mix may help the business solve this problem?

A Introduce price skimming across the full range of toys

B Offer free superhero stickers and badges to all visitors

C Reduce the number of ‘pre-school toy’ loss leaders offered

D Use digital distribution channels for outdoor toys

Your answer B [1]

14 Two vets agree to combine their practices and operate as one business.

This is an example of a:

A diversification

B horizontal takeover

C merger

D vertical takeover

Your answer C [1]

15 A business with a tall organisational structure will have:

A a high market share

B lots of distribution channels

C multiple layers of authority

D short chains of command

Your answer C [1]

© OCR 2024
 7
BLANK PAGE

PLEASE DO NOT WRITE ON THIS PAGE

© OCR 2024 Turn over

 8
Section B

16

Text 1

J Sainsbury plc (Sainsbury’s)

Sainsbury’s is one of the UK’s largest supermarket chains. Sainsbury’s targets middle to high income
customers nationally. Sainsbury’s is owned by shareholders who have limited liability.

The supermarket industry is very competitive, and marketing promotions are important. An example is
Sainsbury’s price match against similar products sold by Aldi, one of its competitors. Sainsbury’s also
spends a large proportion of its marketing budget on television advertising.

Developing new products is important to remain competitive, as customers are always looking for
something new. Sainsbury’s uses market segmentation to support successful product development.

Sainsbury’s managers believe that good food should be accessible to everyone. They use primary
market research to ensure the business develops products that meet the needs of its customers.

(a) Explain one way that limited liability affects the owners of a company.

Knowledge – 1 Mark
..........................................................................................................................................................
Understanding - 1 Mark
..........................................................................................................................................................

Limited liability is a legal structure that limits the amount of risk a business
..........................................................................................................................................................
owner takes on to the value of their investment in the business. This means
..........................................................................................................................................................
that the owner's personal assets are protected and cannot be used to pay the
business's debts.
..........................................................................................................................................................

..................................................................................................................................................... [2]

(b) Explain three advantages for Sainsbury’s of using television to advertise its products. [6]

1 .......................................................................................................................................................
1.One advantage of using Television for advertising is that it can reach a wider
audience. This supports their target market that is spread out nationally.
..........................................................................................................................................................

..........................................................................................................................................................
2.Television advertising is visual which is useful to the supermarket because it
can show its middle-class customers how good its food looks.
..........................................................................................................................................................

2 .......................................................................................................................................................
3.Sainsbury’s can target customers by carefully choosing the programme to
show the advert.
..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

© OCR 2024
 9

3 .......................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

(c) Analyse one likely reason why Sainsbury’s uses market segmentation when developing new
products.

..........................................................................................................................................................
One reason why Sainsburys uses market segmentation is to satisfy
the wants and needs of their middle to high income customers.
..........................................................................................................................................................
This leads to more sales leading to higher revenues and profits.
..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..................................................................................................................................................... [3]

© OCR 2024 Turn over

 10
(d)
(i) Identify two primary market research methods.

Focus Groups
1 .......................................................................................................................................................

Questionnaires
2 .......................................................................................................................................................
[2]

(ii) Evaluate whether Sainsbury’s should use primary or secondary market research methods in the
future.

..........................................................................................................................................................
Primary market research is when new data is collected by a business for
research purposes. These include focus groups, interviews, questionnaires
..........................................................................................................................................................
and product trials.
..........................................................................................................................................................
Secondary market research is when the business uses data that has
..........................................................................................................................................................
already been collected by another organisation. These include using data
..........................................................................................................................................................
from census, websites, internal data and newspapers and magazines.
Developing new products is important to remain competitive, as customers
..........................................................................................................................................................
are always looking for
something new.
..........................................................................................................................................................

..........................................................................................................................................................
The advantages of Primary market research are that the data is exactly
what the business wants for doing their research into new products and that
..........................................................................................................................................................
the information collected is up to date.
..........................................................................................................................................................

The advantages of secondary market research is that it is cheaper to collect

..........................................................................................................................................................
and that a wide range of data is available.
..........................................................................................................................................................

Overall, I think Sainsburys should use primary market research methods in

..........................................................................................................................................................
the future because the data collected is always up to date and this will help
..........................................................................................................................................................
Sainsburys create new products in the future.
..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..................................................................................................................................................... [7]

© OCR 2024
 11
17

Text 2

C & J Clark International Ltd (Clarks)

Clarks is a successful UK footwear brand with ranges for children, women, and men. Their market
is very competitive. Clarks employs specialist designers who create new shoe styles in response to
fast-changing fashion trends. The designers interpret quantitative data carefully when planning new
shoe styles.

The designers work closely with employees from other functional areas of the business, such as
marketing, finance, and retail, to ensure that the new shoe styles meet customers’ needs profitably.

Clarks works hard to retain its team of designers, as they are central to its success. However, Clarks
sometimes needs to recruit new designers and uses several selection methods to help find the best
person available to fill the vacancy.

(a) State two aspects of employment law that may affect a business.
The business cannot discriminate between employees based on their
1 .......................................................................................................................................................
gender, age, race, religion, disability, ethnicity or sexual orientation.
2 If the business employs somebody, they must have a written contract
.......................................................................................................................................................
with them. [2]

(b) Analyse one advantage for Clarks of interpreting quantitative data when designing new products.

..........................................................................................................................................................
Quantitative data will help the specialist designers to quickly analyse
fashion trends for children’s, women’s and men’s shoes. As the
..........................................................................................................................................................
fashion industry is a very competitive market, Clarks need to ensure
..........................................................................................................................................................
that their new shoe styles meet customers’ need profitably.
..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..................................................................................................................................................... [3]

© OCR 2024 Turn over

 12
(c) Explain three reasons why employee retention is important for Clarks.

[Knowledge 1 + Application 1] X 3
1 .......................................................................................................................................................
One reason why employee retention is important is that retaining skilled
..........................................................................................................................................................
employees is central to the business’s success. Clarks works hard to retain
its team of designers, as they are central to its success.
..........................................................................................................................................................

..........................................................................................................................................................
Another reason why employee retention is important is that if employees
leave, the business has to do recruitment. Recruitment takes time and
2 .......................................................................................................................................................
money. Especially if Clarks want to employ specialist designers who create
..........................................................................................................................................................
new shoe styles, this will take a lot of time and money.
..........................................................................................................................................................
Another reason why employee retention is important is that if employees
..........................................................................................................................................................
leave, the business has to do training, which increases costs for the
business. The designers have to interpret quantitative data carefully when
3 .......................................................................................................................................................
planning new shoe styles. This might not be their specialty so the business
..........................................................................................................................................................
has to run a lot of training for the designers.
..........................................................................................................................................................

..........................................................................................................................................................
[6]

(d)
(i) Analyse one advantage for Clarks of using interviews to select new designers.

[Knowledge 1 + Application 1 + Analysis 1]

..........................................................................................................................................................
One advantage of using interviews is that the business can assess
..........................................................................................................................................................
the candidate's knowledge about the industry. Clarks is a business in
the fashion industry so they can ask the candidates questions about
..........................................................................................................................................................
the fast-changing fashion trends. By doing this, Clarks can judge
..........................................................................................................................................................
where the candidate’s knowledge stands and which department they
can work in.
..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..................................................................................................................................................... [3]

© OCR 2024
 13
(ii) Analyse one advantage for Clarks of using references to select new designers.

..........................................................................................................................................................
[Knowledge 1 + Application 1 + Analysis 1]
References indicate which candidates have had good
..........................................................................................................................................................
teamworking skills with a previous employer.
This is important because the designers will work with
..........................................................................................................................................................
colleagues from other functional areas, potentially increasing
..........................................................................................................................................................
productivity in the workplace.
..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..................................................................................................................................................... [3]

(iii) Recommend whether using interviews or references is likely to be more effective for selecting
new designers. Give a reason for your answer.

..........................................................................................................................................................
Clarks is likely to find interviews more effective because they can
..........................................................................................................................................................
make their own assessment of how the candidate may work with
..........................................................................................................................................................
employees. Whereas a reference provides the opinion of the previous
employer.
..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..................................................................................................................................................... [3]

© OCR 2024 Turn over

 14
18

Text 3

SJ Salon
SJ Salon is a hair salon owned by Sam and Jamila. The business partners met whilst studying
hairdressing at college. The partners’ creativity has helped make the salon very successful. SJ Salon
is currently the only salon in town and uses cost-plus pricing.

Sam and Jamila are qualified hairdressers who work full-time in the salon. Until recently, the partners
employed one part-time and one full-time worker who works 40 hours per week. However, due to
increasing customer demand, two additional part-time employees have recently been recruited.

Sam and Jamila have just found out that a national hairdressing chain is planning to open a new
salon in their town. They are concerned about the impact of this competition. The partners asked 200
current customers to complete a short questionnaire. The results show that:
• 130 of the customers have used SJ Salon since 2019
• 104 of the customers were aware of the national hairdressing chain
• 84 of the customers would consider trying the new hair salon, if its prices were cheaper
• 66 of the customers consider quality of service to be more important than price.

When SJ Salon was set up in 2014, Sam wrote a business plan. He has not written another one
since then, as the business has been profitable. However, Sam now thinks that a new business plan
should be written to help the business succeed against any new competition. Jamila disagrees, as
the original business plan took Sam 30 hours to write. She feels that his time would be better spent
keeping current customers satisfied.

(a) Creativity is one characteristic of an entrepreneur.

Identify one other characteristic of an entrepreneur.

Determination
..................................................................................................................................................... [1]

(b) Analyse two advantages for SJ Salon of using cost-plus pricing. [6]

1 .......................................................................................................................................................
One advantage is that cost-plus pricing will allow SJ Salon to always
make a profit. Since Sam’s original business plan allowed them to use
..........................................................................................................................................................
cost-plus pricing, their business has been profitable since 2014.
..........................................................................................................................................................
Another advantage is that even if the business’s costs increase for
..........................................................................................................................................................
example when labour cost of the
..........................................................................................................................................................
two additional employees is added, they can quickly add the
increased costs to the price of the product. This means that SJ Salon
..........................................................................................................................................................
will never make a loss with cost-plus pricing.
..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

© OCR 2024
 15

2 .......................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

© OCR 2024 Turn over

 16
(c) Sam and Jamila want to improve communication with their employees now that the size of the
workforce has increased. They are considering two methods:
• a weekly team meeting which all employees will be expected to attend
• a weekly email sent to all employees.

(i) Analyse one advantage for SJ Salon of each method of communication. [6]

Weekly team meeting

..........................................................................................................................................................
Knowledge - 1
Analysis - 1
..........................................................................................................................................................
The owners can check everyone understands (1). This will help
..........................................................................................................................................................
increase customer satisfaction (+1), which is very important since
the national hairdresser is about to open a salon in the town (APP).
..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

Weekly email

..........................................................................................................................................................
Knowledge - 1
..........................................................................................................................................................
Analysis -1
..........................................................................................................................................................
The content of the email can be referred back to in the future (1)
..........................................................................................................................................................
which should help improve customer service (+1) to combat the
effect of the new national salon opening (APP).
..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

© OCR 2024
 17
(ii) Recommend whether a weekly meeting or a weekly email would be the more appropriate
method of communication for SJ Salon to use. Give a reason for your answer.

..........................................................................................................................................................
Judgement = 1
Analysis (Contextual) = 2
..........................................................................................................................................................
The company should use a meeting (1). All employees can meet
..........................................................................................................................................................
together once a week helping SJ Salon’s newly enlarged team
work together effectively to satisfy customers. Emails do not
..........................................................................................................................................................
involve any staff interaction so do not help teamworking.
..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..................................................................................................................................................... [3]

© OCR 2024 Turn over

 18
(d)* Evaluate, using the data in Text 3, whether Sam should write a new business plan. [9]

..........................................................................................................................................................
1 mark for knowledge
1..........................................................................................................................................................
mark for understanding
Up to 2 marks for quantitative application*
..........................................................................................................................................................
Up to 2 marks for analysis
..........................................................................................................................................................
Up to 3 marks for evaluation
..........................................................................................................................................................

..........................................................................................................................................................
A business plan is a written document that outlines how the business
will achieve their aims and objectives.
..........................................................................................................................................................
A business plan generally includes six parts: Business idea, Business
..........................................................................................................................................................
Aims, Finance requirements, Market details – customers, Market
Details – Competitors, Operations.
..........................................................................................................................................................

..........................................................................................................................................................
42% of SJ Salon customers would consider trying the new
hairdressing salon if it were cheaper. This is concerning for SJ Salon
..........................................................................................................................................................
because they don’t want to lose their customers.
..........................................................................................................................................................

The advantage of writing the business plan is that the SJ Salon owners
..........................................................................................................................................................
need to identify a Unique Selling Point so that their customers remain
..........................................................................................................................................................
with their business. A disadvantage of writing the business plan is that
..........................................................................................................................................................
it’s very time-consuming and this will lead to a fall in revenue because
they’re spending less time keeping their customers satisfied.
..........................................................................................................................................................

..........................................................................................................................................................
Overall, I think Sam should set time aside and write the new business
plan. Sam and Jamila need to differentiate their business and come up
..........................................................................................................................................................
with ways to attract their customers and prevent their customers from
..........................................................................................................................................................
switching to the new competitor hairdressing business.
..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

..........................................................................................................................................................

END OF QUESTION PAPER

© OCR 2024
 19
EXTRA ANSWER SPACE

If you need extra space use these lined pages. You must write the question numbers clearly in
the margin.

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

© OCR 2024
 20

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

..................................................................................................................................................................

Oxford Cambridge and RSA

Copyright Information
OCR is committed to seeking permission to reproduce all third-party content that it uses in its assessment materials. OCR has attempted to identify and contact all copyright holders
whose work is used in this paper. To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced in the OCR Copyright
Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download from our public website (www.ocr.org.uk) after the live examination series.
If OCR has unwittingly failed to correctly acknowledge or clear any third-party content in this assessment material, OCR will be happy to correct its mistake at the earliest possible
opportunity.
For queries or further information please contact The OCR Copyright Team, The Triangle Building, Shaftesbury Road, Cambridge CB2 8EA.
OCR is part of Cambridge University Press & Assessment, which is itself a department of the University of Cambridge.

© OCR 2024