The Development of Effective Business Innovation (AQA GCSE Design & Technology): Revision Note
Exam code: 8552
Crowdfunding
What is crowdfunding?
Crowdfunding is a way of raising money to develop a new product or service by inviting many people to contribute typically smaller amounts of money through an online platform
Why do designers use crowdfunding?
Designers use crowdfunding to:
raise start-up money to manufacture a product
test whether a product idea is popular
launch a new product with little to no personal financial risk
promote new products through crowdfunding platforms
How does crowdfunding work?
The designer creates a funding page on a crowdfunding platform
The page offers rewards for people who "back" the project
Once a target amount has been reached, the project is funded
"Backers" receive their reward if the designer is successful in manufacturing the product
Advantages and disadvantages of crowdfunding
Advantages | Disadvantages |
|---|---|
Designers can launch new products with less personal financial risk | Projects can fail despite achieving sufficient investment, at the risk of the backers |
The investment model encourages more innovation | Ideas, unless protected, are in the public domain and can be copied |
Examiner Tips and Tricks
Questions on crowdfunding often ask you to evaluate whether it is a good way for a designer to fund a new product.
Remember to consider both sides: the designer benefits from reduced financial risk and market testing, but backers carry the risk if the project fails.
Always relate your answer to the specific product context given in the question.
Virtual marketing & retail
What is virtual marketing and retail?
Virtual marketing and retail refers to the promotion and selling of products online, typically through websites, apps and digital media
What are common examples of virtual marketing and retail?
Websites where products are sold
The use of social media to promote and advertise products
Product marketplaces (e.g. online auction and handmade goods platforms)
Direct marketing to customers through email
Virtual and augmented reality product launches (e.g. products promoted through online gaming platforms)
Why do designers use virtual marketing and retail?
Reach a global audience 24 hours a day, 7 days a week
Remove the cost of a physical store to sell products
Gather customer data and feedback through websites and apps, which can be used to improve the product
Provide up-to-date product offers
Target specific customers using data
How can virtual marketing and retail be challenging for designers?
Cyber security and data protection are at increased risk, which can lead to legal issues if customer data is stolen
Due to low barriers to entry, there can be higher levels of competition
Once a product idea is available globally, businesses can attempt to legally or illegally copy it
Worked Example
Explain two benefits to a designer of using virtual marketing to promote a new product.
[4 marks]
Answer:
Benefit 1: The designer can reach a global audience 24 hours a day [1 mark], which means more potential customers can see and buy the product compared to a physical store with limited opening hours [1 mark].
Benefit 2: The designer can gather customer data and feedback through online platforms [1 mark], which allows them to identify improvements and adapt the product to better meet customer needs [1 mark].
Co-operatives
What is a co-operative?
A co-operative is a business run and owned by its members
Co-operative members can be employees or customers
How is a co-operative different from a typical business?
Every member has an equal share and responsibility for the business
Every member receives an equal share of the profits
Every member has an equal opportunity to vote on how the business is run
Why would a designer set up a co-operative?
It supports ethical and fair practices where everyone benefits
It encourages teamwork and shared responsibility
It can reduce the cost of starting the business
It is suitable for localised production and more sustainable ways of working
Fairtrade
What is Fairtrade?
Fairtrade is a certification system that ensures the people producing products are paid a fair price and protects them from buyers trying to pay less
Why does Fairtrade exist?
Without Fairtrade protection, producers can be pressured into receiving unfair payment for what they produce
Fairtrade ensures producers are better able to maintain safe and ethical working conditions for their workers
Producers with a Fairtrade agreement are less likely to be exploited when market conditions favour buyers (e.g. where there is less demand or an abundance of choice, both of which can reduce prices)
What are the requirements for Fairtrade?
A minimum price the producer will receive for their product
Protected costs which support investment in the producer's community
An agreement to not use harmful or damaging processes during production
An encouragement to act sustainably
Which materials are commonly subject to Fairtrade agreements?
Food such as bananas or cocoa beans (used for chocolate)
Metals such as gold and silver (used for electronics)
Precious stones such as diamonds (used for medical equipment)
Textiles such as cotton (used for clothing)
Examiner Tips and Tricks
Fairtrade is a proper noun when referring to the certification system — always capitalise it.
In the exam, you may be asked to explain how Fairtrade benefits producers in developing countries. Focus on fair pricing, safe working conditions and community investment rather than simply saying "they get paid more".
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