Cambridge Assessment International Education: Business 9609/21 May/June 2018

Cambridge Assessment International Education
Cambridge International Advanced Subsidiary and Advanced Level
BUSINESS 9609/21
Paper 2 Data Response May/June 2018
MARK SCHEME
Maximum Mark: 60
Published
This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.
Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.
Cambridge International will not enter into discussions about these mark schemes.
Cambridge International is publishing the mark schemes for the May/June 2018 series for most
Cambridge IGCSE™, Cambridge International A and AS Level and Cambridge Pre-U components, and
some Cambridge O Level components.
IGCSE™ is a registered trademark.
This document consists of 17 printed pages.
© UCLES 2018 [Turn over

9609/21 Cambridge International AS/A Level – Mark Scheme May/June 2018
PUBLISHED
Generic Marking Principles
These general marking principles must be applied by all examiners when marking candidate answers.
They should be applied alongside the specific content of the mark scheme or generic level descriptors
for a question. Each question paper and mark scheme will also comply with these marking principles.
GENERIC MARKING PRINCIPLE 1:
Marks must be awarded in line with:
• the specific content of the mark scheme or the generic level descriptors for the question
• the specific skills defined in the mark scheme or in the generic level descriptors for the question
• the standard of response required by a candidate as exemplified by the standardisation scripts.
Marks awarded are always whole marks (not half marks, or other fractions).
Marks must be awarded positively:
• marks are awarded for correct/valid answers, as defined in the mark scheme. However, credit
is given for valid answers which go beyond the scope of the syllabus and mark scheme,
referring to your Team Leader as appropriate
• marks are awarded when candidates clearly demonstrate what they know and can do
• marks are not deducted for errors
• marks are not deducted for omissions
• answers should only be judged on the quality of spelling, punctuation and grammar when these
features are specifically assessed by the question as indicated by the mark scheme. The
meaning, however, should be unambiguous.
Rules must be applied consistently e.g. in situations where candidates have not followed
instructions or in the application of generic level descriptors.
Marks should be awarded using the full range of marks defined in the mark scheme for the question
(however; the use of the full mark range may be limited according to the quality of the candidate
responses seen).
Marks awarded are based solely on the requirements as defined in the mark scheme. Marks should
not be awarded with grade thresholds or grade descriptors in mind.
© UCLES 2018 Page 2 of 17

PUBLISHED
Question Answer Marks
1(a)(i) Define the term ‘cash flow’ (line 10). 2
Knowledge Marks
A correct definition 2
A partial, vague or unfocused definition 1
No creditable content 0
Content
The transfer/movement of money in and out of the business
Exemplar Rationale Mark

The transfer/movement of money in
All areas covered 2
and out of the business
The transfer/receiving of money in of Only one direction covered –
1
the business defining cash inflow
The transfer/spending of money Only one direction covered –
1
within/out of a business defining cash outflow
The movement of money/cash within No reference to direction (in
1
a business and out)
The money made from selling goods No creditable content 0

PUBLISHED
1(a)(ii) Briefly explain the term ‘product portfolio’ (line 2). 3
Award one mark for each point of explanation:
Knowledge Marks
Example or some other way of showing good
C 1
understanding
B Sold by a business 1
A Range/catalogue of products/services 1
Content
A product portfolio is the range of goods and services offered by a business.
The portfolio of products that business sells can be analysed using the product life
cycle.
Exemplar Rationale Marks

The range of goods and services sold
by a business which can be used to All three elements met 3
analyse the best-selling products
The variety of products the company
No C mark 2
has to offer for the people
The amount of different products a Amount is an oblique
2
business sells reference to range
What the company uses to keep track Bod, inferring ‘sold’ by a
1
of all of its products business
The data of a product including price,
opinion, etc.

PUBLISHED
1(b)(i) Using Table 1 and any other relevant data, calculate the price elasticity of demand 4
for bottled water when the price was reduced.
Rationale Marks
Correct answer with or without correct working (minus sign not 4
required)
Correct calculation of % change in QD AND % change in P 3
Formula AND calculation of both actual changes OR correct 2
calculation of % change in QD OR % change in P
Formulae OR correct calculation of both actual changes 1
Content
%
c
h
a
n
g
e
i
n
Q
D
%
c
h
a
n
g
e
i
n
P
Formula:
40 000 − 20 000 20 000

= × 100
QD = 20 000 20 000 = 100%
$0.63 − 20 000 $0.27

= × 100
P= $0.90 $0.90 = –30%
100%
−30% = –3.33
Answer = –3.33
Common incorrect answers
Answer Rationale Marks

Correct final answer, no working
(–)3.33 4
needed
Correct answer, ignore minus, no
3 4
recurring needed
100 and 30 and wrong % change P over % change QD (wrong
3
final answer (0.3) way round)
Formula and 0.27 and Formula and correct calculation of both
2
20 000 actual figures
Correct calculation of both actual
0.27 and 20 000 1
figures
0.9 – 0.63 = 0.27 Calculation of only 1 actual figure 0

PUBLISHED
1(b)(ii) Explain how your answer to 1(b)(i) could be used by CS. 2
Level Knowledge and Application Marks

2 (APP) Explanation of a use of the answer to 1(b)(i) in context 2
1 (K) Identification of a use of PED 1
0 No creditable content 0
Note: Correct use of an incorrect answer to 1(b)(i) should be fully rewarded (own figure
rule – OFR)
Content
• PED is elastic so VC should gain more revenue from the sales discount
• VC should use more sales discount promotions because it shows an elastic
response
ARA and OFR
Answer How it might be used

The sales discount brought in less revenue but increased
0 to (–)1 – Inelastic
sales
The sales discount has not changed revenue but increased
(–)1 – Unit elasticity
sales
The sakes discount brought in more revenue and increased
(–)1 plus (elastic)
sales

PUBLISHED
1(c) Using Table 2 and any other data, recommend which supermarket CS should close. 11
Justify your recommendation.
Knowledge and Analysis and Evaluation

Marks Marks
Application (4 marks) (7 marks)
A justified recommendation based
on a developed argument on the 7
closure of both supermarkets
A developed recommendation
based on a developed argument
6
on the closure of both
supermarkets
Shows understanding of A basic recommendation/
the factors affecting judgement based on a developed
4 5
closure of supermarket A argument on the closure of both
and supermarket B supermarkets
Shows understanding of
Developed argument based on the
the factors affecting
3 closure of supermarket A and 4
closure of supermarket A
supermarket B
or supermarket B
Shows knowledge of two Developed argument based on the
or more reasons for 2 closure of supermarket A or 3
business closure supermarket B
Limited analysis of supermarket A
Shows knowledge of one 2
and supermarket B
reason for business 1
closure Limited analysis of supermarket A
1
or supermarket B

PUBLISHED
1(c) Content: 11
Supermarket A
Pro Con
• Higher Revenue • Higher rent
• Higher Population – bigger • Higher unemployment – lower
customer base level of average income?
• Higher unemployment – lower • Making a loss
employment odds? • Less established so easier to
• Trend is that profit is increasing – close?
will this continue?
• Has it been given enough time to
establish?
Supermarket B
Pro Con
• Lower rent • Lower revenue
• Lower unemployment – higher • Lower population – smaller
level of average income? customer base
• Making a profit • Lower unemployment – higher
• More established – brand level of average income?
recognition in the area • Trend is that profit is decreasing
– will this continue?
• Been open longer – is it possible
to ‘turn it around’.
An example of how an answer could develop and how it should be annotated.
K APP AN ANAN EVAL

However the larger CS should choose
local population SM A (Basic
Supermarket This could
means there might recommendation)
A’s rent is lead to worse
be more long term
$150 000 cash flow in
potential to increase because it has
higher than Supermarket
revenue and more potential to
Supermarket A
balance out cash increase revenue
Low rent B (APP) (AN – LHS)
flow in the future in the longer term
is an (DEV – LHS) (Developed
important
recommendation)
indicator Supermarket The lower
(K) A’s rent of local
$400 000 is population Which means that it however it
$150 000 means that is never likely to be depends on
higher than there is less as profitable as whether SM B’s
Supermarket chance of Supermarket A profit continue to
B’s rent of increasing (DEV – RHS) fall
$250 000 revenue (Justified
(APP APP) (AN – RHS) recommendation)

PUBLISHED
1(d) Analyse how the closure of the supermarket that you have recommended in your 8
answer to 1(c) could affect two stakeholders of SC.
Knowledge and Analysis

Level Marks Marks
Shows understanding of Developed analysis of
the effect of the closure the closure of the
2b 4 4
on two stakeholders of supermarket on two
CS stakeholders of CS
Developed analysis of
the effect of the closure
2a the effect of the closure 3 3
of the supermarket on
on one stakeholder of CS
one stakeholder of CS
Shows knowledge of and
gives one or more Limited analysis of the
1b stakeholder examples 2 effect of closure on two 2
OR two examples of stakeholders
stakeholders
Shows knowledge of
Limited analysis of the
stakeholders (definition)
1a 1 effect of closure on one 1
OR one example of a
stakeholder
stakeholder
Content
Customers – May have to go to another supermarket, or travel further to use CS

Employees – those made redundant in the closed supermarket may be unemployed and
have lower incomes, or may be transferred to another supermarket. Those who are not
made redundant (in other supermarket) may be more motivated (if they feel lucky to be
still working) less motivated (if they worry they are next).
Owners – may have less profit as there are high redundancy costs. May eventually have
higher profits as the business is more efficient.
Managers – may lose their job or be transferred to another supermarket Banks/lenders
– may worry about the future of CS and not lend for any future ventures
Local community – increased unemployment in area of closed supermarket, lower
average income, less choice of supermarket
Government – increased unemployment, lower income tax revenue.
ARA

PUBLISHED
1(d) 8
Examples of Examples of application/ Examples of possible analysis
stakeholders context
Customers Local customers will have May choose an alternative supermarket
to travel further to get to a → which leads to increased travel time
supermarket
Employees Because of high May struggle to find another job →
unemployment in the area Lead to a lower quality of life → affect the
ability to look after their family/pay rent →
lead to less emphasis on children’s
education
Local Supermarkets employ a lot Less tax paid → lowers the overall
government/ of staff amount available for community projects
council → increases taxes or reduction in
services → affects the community
negatively
Suppliers Of bottled water Reduction in demand → increase in
wastage → reduction in employees
needed → increased unemployment in
the local area
Stating ‘employees of supermarket A’ is not enough for app – has to be linked to

e.g. high levels of unemployment, etc.

PUBLISHED
2(a)(i) Define the term ‘retained earnings’ (line 15). 2
Knowledge Marks
A correct definition 2
A partial, vague or unfocused definition 1
Content
A correct definition will include:
• An idea that money has been kept by a business
• An idea that it is profit

The money remaining in the business
Both elements 2
after it subtracts its expenses
No idea of profit/earnings
The money kept by a business 1
element
Idea of keeping within the
Earnings set aside for a later day 1
business (earnings taut)
The profit made by the business An idea of profit 1
The money that the business owner
To vague 0
saved

PUBLISHED
2(a)(ii) Briefly explain the term ‘public limited company’ (line 1) 3
Award one mark for each point of explanation:
Knowledge Marks
C Example or some other way of showing good
1
understanding e.g. Published accounts, LL, etc.
B To the general public/through stock exchange/ 1
A Has shareholders/can sell shares 1
Content
A public limited company has shareholders who can purchase shares through the stock
exchange. It also has limited liability, continuity and a separate legal identify.

Owned by shareholders with limited 3
liability and bought through the stock All points met
exchange
A PLC is a large company that sells 2
A and B
shares to the public.
Has shareholders and has limited 2
A and C
liability
Is owned by the government, has A and C, ignore the 2
shareholders and had limited liability incorrect govt. reference
Has shareholders A only 1
Owned by the government Wrong 0
Is a large company Too vague 0

PUBLISHED
2(b)(i) Calculate VC’s working capital. 2
Rationale Marks
Correct answer with or without working 2
Correct use of figures/formula 1
Content
Current assets – current liabilities
$5m – $4m = $1m
Common answers
Answer Rationale Marks

$1m (with or without $) Correct answer 2
$5m – $4m = $1m Correct answer 2
5–4=1 No need for $ or M 2
$5m – $4m = $6m Correct use but wrong answer 1
Current assets – current liabilities Correct formula 1
$5m + $4m = $6M Incorrect use of figures 0
4/5 × 100 = 0.1 Incorrect formula 0
$4m – $5M = –$1M Incorrect formula 0

PUBLISHED
2(b)(ii) Explain two ways in which VC could improve its working capital. 4
Level Knowledge and Application Marks

2b (APP + Explanation of two ways to improve working capital in
4
APP) context
2a (APP) Explanation of one way to improve working capital in
3
context
1b (KK) Identification of two ways to improve working capital 1
1a (K) Identification of one way to improve working capital 1
Content
Has to refer specifically to a current asset or a current liability (less than 12

months)
Increase current assets:

• Increase cash/money – retain more profit, sell fixed assets, sell shares, negotiate
discounts, find cheaper suppliers etc.
• Increase debtors – only if they are new sales that would not have been cash
sales
• Increase inventory – again only if this does not have a detrimental effect on cash
at the same time
Decrease current liabilities:

• Replace short term debt (overdraft and creditors for example) with long term debt
– will not improve WC if it is paying debt off with cash
Possible context (APP)

• Reduction of Current liabilities from $4m
• Increase in Current assets from $5m
• Increase their stock of veg/cans
• Decrease their trade receivables (debtors) from customers/food retailers
• Increase their trade payables (creditors) from suppliers of veg/cans

PUBLISHED
2(c) Analyse two methods of selection VC could use when choosing a new manager for 8
the factory.
Knowledge and Analysis

Level Marks Marks
Developed analysis of
how VC could use two or
2b 4 two method of selection 4
more methods of
in context
selection
Shows understanding of Developed analysis of
2a how VC could use one 3 one method of selection 3
method of selection in context
Shows knowledge of two Limited analysis of two
1b or more methods of 2 or more methods of 2
selection selection
Shows knowledge of one Limited analysis of one
1a 1 1
method of selection method of selection
Content
• CV/application forms – look for experience in the industry, advantages and
disadvantaged of using CVs. All on paper. Does not bring the candidate to life and
show motivation or finance skills
• Interviews – ask questions that shows knowledge and how the applicant would deal
with situations e.g., employee relations
• Tests – e.g., role play could be used as part of the selection process. This would
have good advantages for VC – can see who has the best inventory management
and finance skills
• Trial period (probation) before formalizing any job offer. Advantages and
disadvantages of this.
ARA
Examples of Examples of
Examples of possible analysis
methods application/context
Minimises the number of
CV/application Identify relevant experience
applicants to be interviewed to
forms of inventory management
those who identify skills
Allows for the selection of
Ask questions relating to
Interviews managers who can explain
employee management
problems or situations
Work based tests of Can select manager with the best
Tests inventory management and demonstrable skills which
finance skills reduces mistakes
Ensures that the manager isn’t
Trial period Trial as factory manager exaggerating the truth and can do
his job

PUBLISHED
2(d) Evaluate the usefulness of the product life cycle to VC when making marketing 11
decisions.
Knowledge and Analysis and Evaluation

Marks Marks
A justified evaluation based on a
developed argument of one or
7
more uses of the Product Life
Cycle in context
A developed evaluation based on a
6
Cycle in context
A basic evaluation based on a
5
Cycle in context
Shows knowledge of the
Developed argument of two or
product life cycle AND
4 more uses of the product life cycle 4
marketing decisions in
in context
context
product life cycle OR Developed argument of one use of
3 3
marketing decisions in the product life cycle in context
context
Limited analysis of two or more
product life cycle AND 2 2
uses of the product life cycle
marketing decisions
Limited analysis of one use of the
product life cycle OR 1 1
product life cycle
marketing decisions
Note: Full marks can be gained from only ONE use of the product life cycle; two
DEV’s must still be awarded (pros and cons)

PUBLISHED
2(d) Content 11
• Can identify the varieties which may require extension strategies (i.e. develop
product)
• Can identify varieties which should be discontinued (in in decline)
• Can identify where promotional spending should be – i.e. on varieties in growth
stage
• Can help to know which pricing strategies to use
• Can help to know which distribution channels to use
• Can help to introduce the new frozen veg into the market
• Can help to manage a large portfolio of varieties/products
An example of how an answer could develop and how it should be annotated.
K APP AN ANAN EVAL

Could The product lifecycle is
identify Which could Which could very important for VC
canned then be influence (Basic
vegetables reformulated promotional recommendation)
in their or rebranded activities
Product mature/ to extend and because it means they
lifecycle is decline their life spending can manage their
the stages phase product lines and
from birth/ maximise revenue
invention Which could (Developed
to death/ Can recommendation)
Which may minimise
decline manage a
result in a the product
large however it depends on
reduction in range and
portfolio of the quality of the
product reduce
canned information gathered
duplication inventory
products (Justified
costs
recommendation)

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Cambridge Assessment International Education

Cambridge International Advanced Subsidiary and Advanced Level

IGCSE™ is a registered trademark.

This document consists of 17 printed pages.

© UCLES 2018 [Turn over

Generic Marking Principles

GENERIC MARKING PRINCIPLE 1:

Marks must be awarded in line with:

GENERIC MARKING PRINCIPLE 2:

GENERIC MARKING PRINCIPLE 3:

Marks must be awarded positively:

GENERIC MARKING PRINCIPLE 4:

GENERIC MARKING PRINCIPLE 5:

GENERIC MARKING PRINCIPLE 6:

© UCLES 2018 Page 2 of 17

Question Answer Marks

1(a)(i) Define the term ‘cash flow’ (line 10). 2

Exemplar Rationale Mark

© UCLES 2018 Page 3 of 17

Question Answer Marks

1(a)(ii) Briefly explain the term ‘product portfolio’ (line 2). 3

Award one mark for each point of explanation:

Exemplar Rationale Marks

© UCLES 2018 Page 4 of 17

Question Answer Marks

40 000 − 20 000 20 000

$0.63 − 20 000 $0.27

Common incorrect answers

Answer Rationale Marks

© UCLES 2018 Page 5 of 17

Question Answer Marks

1(b)(ii) Explain how your answer to 1(b)(i) could be used by CS. 2

Level Knowledge and Application Marks

ARA and OFR

Answer How it might be used

© UCLES 2018 Page 6 of 17

Question Answer Marks

Knowledge and Analysis and Evaluation

© UCLES 2018 Page 7 of 17

Question Answer Marks

An example of how an answer could develop and how it should be annotated.

K APP AN ANAN EVAL

© UCLES 2018 Page 8 of 17

Question Answer Marks

Knowledge and Analysis

Customers – May have to go to another supermarket, or travel further to use CS

© UCLES 2018 Page 9 of 17

Question Answer Marks

Stating ‘employees of supermarket A’ is not enough for app – has to be linked to

© UCLES 2018 Page 10 of 17

Question Answer Marks

2(a)(i) Define the term ‘retained earnings’ (line 15). 2

Exemplar Rationale Marks

© UCLES 2018 Page 11 of 17

Question Answer Marks

2(a)(ii) Briefly explain the term ‘public limited company’ (line 1) 3

Award one mark for each point of explanation:

Exemplar Rationale Marks

© UCLES 2018 Page 12 of 17