Chapter 7

A small business spent $10,000 in the past month to acquire new customers and had 1,000 purchases from new customers. What would be the customer acquisition cost (CAC)?

$10

When it comes to market research, what is the minimum number of customers most marketing experts want a business to talk to identify useful trends for products and services?

100

What model is at the core of the lean startup method?

Build-Measure-Learn Feedback Loop

What is a reason for small firms to assume a consumer orientation?

Managers are concerned about long-term survival.

In market analysis, what could be helpful in analyzing the competition?

SWOT analysis

benefit variables

Specific characteristics that distinguish market segments according to the benefits sought

augmented product/service

The basic product and/or service plus any extra or unsolicited benefits to the consumer that may prompt a purchase

Segmentation Variables

The parameters used to distinguish one form of market behavior from another

Which target market strategy is often the chosen strategy of smaller businesses with limited resources?

a single-segment strategy

What are some components a market must have?

accessibility to product/service

What is a segmenting strategy that targets the mass market called?

an unsegmented strategy

What are some common errors businesses make while conducting market research?

asking the wrong questions, assuming the business understands customer needs, misinterpreting what people are saying

A free trial period for a software product is an example of which type of value to customers?

augmented

Which type of sales forecasts are needed for a well-constructed marketing plan?

both short- and long-term

Achieving better vision when purchasing eyeglasses is an example of which type of value to customers?

core

A typical customer is between 29 and 35 years old, married without children, and female. They live in the Midwest region of the U.S. and have an annual income of approximately $70,000. They value family, hard work, and honesty. Which type of information is this?

customer profile

What is the term used to describe potential customers in a target market?

customer profile

Segmenting a market by age, gender, or income uses which type of variables for market segmentation?

demographic

A new small business that makes bath bombs and bath soaps primarily targets women but has also created a line of products geared to teenage girls. The company also knows that partners are likely to purchase the products as gifts. These three groups would be referred to as the firm's what?

market segments

What is the process of locating and describing potential customers called?

marketing analysis

What is the process of gathering, processing, interpreting, and reporting of market information called?

marketing research

Which section of the marketing plan should be the most detailed and is likely subject to the closest scrutiny from potential investors?

marketing strategy

A new company creates a product with just enough features to be usable by customers. The intention is to introduce the product to these customers and gather feedback on the product's future development. Which type of product is this?

minimum viable product

Which type of strategy recognizes different preferences of individual market segments and develops a unique marketing mix for each?

multisegment

What are some of the business areas that uses a sales forecast?

personnel, business planning, production

An entrepreneur has an idea to start a mobile hair salon business. Instead of a brick-and-mortar location that clients come to, the hairstylists would travel to the client's homes. Then, clients would come out to the mobile salon for services. The discussion about how services will be delivered to the business's target market would take place in which section of the marketing strategy?

place

Laws and regulations regarding exports fall under which section of the marketing plan?

place

In which section of the marketing plan are the costs and break-even analysis included?

pricing

What are some areas of strategy the marketing plan should address?

pricing, distribution, promotion

In which section of the marketing plan are warranties and customer service included?

product

The CEO of a new startup believes the product is the most important part of the business and therefore devotes the firm's resources to developing the product most efficiently. Which type of approach does the CEO have?

production

Which section of the marketing plan should describe the entrepreneur's approach to creating customer awareness of the product or service and explain why customers will be motivated to buy?

promotion

Which type of forecasting predicts how much of a product or service can be sold within a given market during a specified time?

sales

A new small business estimates the size of the market for its new product offering is $5 million. The firm estimates it can win 10% of that market in its first year. What is the business attempting to determine?

sales forecast

What are some examples of marketing orientations to running a business?

sales-oriented, consumer-oriented, production-oriented

Which type of variables distinguish one form of market behavior from another?

segmentation