Applying Business Plans and Descriptive Statistics

Answer Primary market research is the collection of original, first-hand data by a business for its own purpose, ✓ using methods such as surveys, interviews, focus groups or observation. ✓ definition plus examples. The examples secure the second mark.

Step 1 — total the number of reviews 312 + 48 + 15 + 9 + 6 = 390 reviews Step 2 — total the rating points (312 × 5) + (48 × 4) + (15 × 3) + (9 × 2) + (6 × 1) = 1,560 + 192 + 45 + 18 + 6 = 1,821 Step 3 — divide and round 1,821 ÷ 390 = 4.669… Mean rating = 4.7 (1 d.p.) multiply each score by how many reviews gave it. Averaging 5,4,3,2,1 to get 3 is the classic error.

Step 1 — put the prices in order $340,000 / $395,000 / $420,000 / $480,000 Step 2 — with an even number of values, take the middle two $395,000 and $420,000 Step 3 — find the halfway point ($395,000 + $420,000) ÷ 2 = $815,000 ÷ 2 Median price = $407,500 an even number of values has no single middle, so you average the middle two.

Advantage It uses all the data to show how much bookings swing month to month, which would help Selkie plan how many of its four guides it needs across a season rather than staffing to an average. ✓✓ Disadvantage It is more complex to calculate and interpret than a mean, and as a small operator with two boats and four guides, Selkie is unlikely to employ anyone with the statistical skill to use it properly. ✓✓ the second mark in each pair comes from naming the guides and the boats.

Paragraph 1 — define and link A business plan sets out a firm’s objectives, market, operations and financial forecasts. Selkie needs one mainly to support a request for at least $350,000 to buy a larger vessel. Paragraph 2 — first implication, balanced The plan lets the bank judge whether Selkie can repay upwards of $350,000, using eleven years of trading and a 4.7 average rating as evidence of a working business. However, those reviews are self-selected rather than a proper sample, and the corporate market it wants to enter is not one it has ever served. Paragraph 3 — second implication, balanced Writing it forces research Selkie has not yet done, since its current work is limited to its own reviews and four vessel prices. But an effective plan takes time and expertise, and a firm with four guides and two boats may have neither to spare in season. Paragraph 4 — a further chain Its clear mission to be the best small-group operator should make the plan focused. That same mission, though, sits awkwardly with larger corporate groups, and the plan may expose a conflict between growth and what the business is known for. Paragraph 5 — conclusion with limitations Producing the plan is worth it, since the cost is time and the benefit is a decision worth $350,000 or more. The plan will influence the bank rather than decide it, as credit history and how convincingly the owners present the case also matter. The case study does not give Selkie’s past profits or say how large the corporate market is, and both would determine whether the vessel is affordable at all. paragraph 4 is what lifts this: it uses the mission statement against the expansion, which most students miss.