Entrepreneurship - Exam 1
It can take 3000 ideas to yield one commercially viable product. To increase the odds of finding a good idea, the screening process takes all the thoughts from the ______ step of the entrepreneurial process, and puts them through a ______.
"Feel"; "Check"
Which of the following is true of the debt-to-equity ratio?
"If the ratio is greater, it indicates increased business risk."
Many small businesses experience problems in cash flow management because of the mismatch between the timing of the receipt of cash and the timing of the need to expend cash.
True
Marketing and new product experts believe that most of the small business failures could have been avoided by following the new product development (NPD) process
True
Marketing and new product experts believe that most of the small business failures could have been avoided by following the new product development (NPD) process.
True
Most service providers get business usually through referrals or word-of-mouth.
True
One of the difficulties in understanding and interpreting the income statements is the dispute over when one should recognize revenues
True
One reason why accounting is important to a small business is that it shows how much your business is worth
True
Operational plans and private placement memos are the only two types of plans that add material to a full business plan.
True
Participating in trade shows and trade missions increase international contacts.
True
Payroll records ensure that employment taxes are kept current.
True
Promotion includes getting the message out to the target market so that they can make decisions about a product or service.
True
Radio advertisements provide both geographic and demographic segmentation of a product or service.
True
Sales leads who actually make some sort of effort to learn more about the product, service, or business in anticipation of a possible purchase are known as prospects.
True
The new product development process is likely to be easier for services than for innovative goods.
True
The primary areas for conflict resolution in exporting include nonpayment and contract default issues.
True
The primary reason to acquire and use a computerized accounting system in your business is to ensure the accuracy of your accounting information.
True
A niche market is a narrowly defined segment of the population that is likely to share interests or concerns.
True. Page: 192
In the decline stage, sales and profits of the firms in an industry begin a falling trend.
True. Page: 198
Second sourcing provides customers with greater certainty of supplies or services.
True. Page: 204
Tactical actions are competitive responses with low resource requirements.
True. Page: 205
Patents and trademarks are popular strategic actions for protecting a firm from competition.
True. Page: 206
Business plans are essential for external legitimacy and internal understanding.
True. Page: 216
In the context of a business plan, product quality, its benefits, service quality, and the competitive advantage are the primary concerns of potential customers.
True. Page: 217
Executive summaries are written in a formal style, suitable for investors, bankers, and lawyers to read.
True. Page: 221
If a product or service has protection through a proprietary technology, it is mentioned in the product/service subsection of the company section of a business plan.
True. Page: 228
The financial statements in a business plan include income statements, cash flow, balance sheet, and their respective assumptions.
True. Page: 231
When a product or service is truly new to everyone, it is considered a pioneering business.
True. Page: 233
Operational plans and private placement memos are the only two types of plans that add material to a full business plan.
True. Page: 235
A product can include goods, services, and ideas.
True. Page: 274
The concept of total product includes how customers describe one's good or service.
True. Page: 277
Marketing and new product experts believe that most of the small business failures could have been avoided by following the new product development (NPD) process.
True. Page: 279
If a rapid prototyping model can be developed, the molds for manufacturing can be made inexpensively by most modern manufacturers.
True. Page: 283
Setting prices higher than the competition without providing customers with the perception of receiving greater value will lead to lower overall volume.
True. Page: 288
Random discounts shouldn't be too frequent because consumers begin to realize if they stock up in this sales period, they can probably wait until the next sales period.
True. Page: 296
Even if a competitor matches a sale or offers some other promotion to match one's offering, it's not as aggressive an action as a price war.
True. Page: 300
In creating a marketing plan, a firm typically identifies its competition and understands its strengths and weaknesses in a stage where the firm:
examines its current situation.
The extent to which a small business is taken for granted, accepted, or treated as viable by organizations or people outside the small business is referred to as _____. "
external legitimacy
Expenses are the value given up to obtain something that the owner wants.
false
Exporting is usually expensive, difficult to start, and more risky than licensing, franchising, or joint ventures.
false
For me-too products, the stages of new product development are always extensively long.
false
Personal selling decreases business owners' flexibility in their presentation. true/false
false
Press relations are a form of communication that encourage the customer to take immediate action.
false
Services have separability of production and consumption.
false
Something that is essential to how you live and does not have many substitutes or alternatives is called an elastic product.
false
The close of a sale is the end of the sale.
false
The process of dividing the market into smaller portions of people that have certain common characteristics is called stereotyping. true/false
false
The purchasing process is the term applied to the schedule and the process for setting the schedule for making purchases by an individual or an organization.
false
When coming up with a new idea in the product development process, the focus is on the pains and gains of customers.
false
"The research and development team of Leonide Inc. has generated five different product ideas. All five ideas are being rated against each other on their characteristics such as product uniqueness, idea profitability, protectable intellectual property, and product team quality. Based on their ranking in this stage, only three ideas will make it to the immediate next step which will be the stage of _____. "
feasibility study
The research and development team of Leonide Inc. has generated five different product ideas. All five ideas are being rated against each other on their characteristics such as product uniqueness, idea profitability, protectable intellectual property, and product team quality. Based on their ranking in this stage, only three ideas will make it to the immediate next step which will be the stage of _____.
feasibility study
Formal summaries of the content of an accounting system's records of transactions are called _____.
financial statements
Delays in the movement of money among depositors and banks is referred to as a(n) _____.
float
A _____ is best described as a small group (8 to 20 people) that is asked to meet to discuss a series of questions about a particular product or service
focus group
The _____ is marked by a stabilization of demand, with firms in the industry moving to stabilize or improve profits through cost strategies.
maturity stage Page: 198
"A(n) _____ is a middleman business which sells to consumers or end-users of a product, typically in single or small quantities."
retailer
A(n) _____ is a middleman business which sells to consumers or end-users of a product, typically in single or small quantities.
retailer
The question "On a range of 1 to 10, how would you rate the service in this restaurant?" is an example of a(n) _____.
scalar question
"With regard to marketing research, _____ refers to information already collected for some other purpose than the current problem. "
secondary research
When pricing your product, the optimum price is the highest price that will produce your desired level of sales in your intended market.
true
A _____ displays characteristics related to the nature of a product or service itself.
value benefit. A value benefit displays characteristics related to the nature of the product or service itself. Things like quality, fashion, and reputation are elements that give a product or service value in the eyes of the customer. Page: 195
"When it comes to promoting a small business that is just starting out, spreading the news by _____ is the surest way to build a client base. "
word-of-mouth
Imitation minus one degree of similarity:
would be the business equivalent of cloning. Page: 191
Which of the following pricing practices is the most inappropriate?
"Pricing a product, advertised for high quality and prestige, lower than the competition"
Which of the following elements of the BRIE model represents the desire to start a business? A. Intention B. Boundary C. Exchange D. Resources
A
Which of the following forms of direct response advertising attracts a large audience and is a good way to demonstrate a product? A. Television B. Radio C. Magazine D. Billboard
A
Which of the following gives the particulars on existing customers? A. Contact data B. Performance data C. Product data D. Service data
A
Which of the following has low overhead and unlimited shelf space and thereby can afford to take on an unknown firm or product? A. An e-tailer B. A wholesaler C. A retailer D. An agent
A
Doubt that occurs after a purchase has been made is called _____. A. cognitive dissonance B. customer vector C. segmentation D. trendiness
A. cognitive dissonance
A traditional small business generally has sales of between: A. $100,000 and $1,000,000. B. $100,000 and $200,000. C. $25,000 and $100,000. D. $50,000 and $80,000.
C
A web-based program that uses artificial intelligence techniques to automate tasks such as searches is called a ________. A. hit rate B. mat release C. bot D. funnel
C
A(n) _____ is a middleman business which buys and sells to businesses rather than consumers. A. manufacturer B. agent C. wholesaler D. retailer
C
The rule of thumb for evaluating current ratio is that the minimum acceptable ratio is: A. 3.0. B. 1.0. C. 2.0. D. 4.0.
C
There are two points in the presentation where your listeners will be giving you value. Which of the following are those two points? A. In the contacts you make and the experience you gain. B. In the questions they ask and the contacts you make. C. In the questions they ask and the feedback they give. D. In the feedback they give and the experience you gain.
C
Which of the following statements is true about elastic products?
Customers will respond to price increases for elastic products much more negatively than for inelastic products.
A _____ is an example of a low customer contact business. A. retail establishment B. medical or legal office C. restaurant D. manufacturing business
D
A _____ is an example of a low customer contact business. A. retail establishment B. medical or legal office C. restaurant D. manufacturing business
D
Guerilla marketing is a form of communication that encourages the customer to act immediately, such as coupons, sales, or contests.
F
If your business is wholesale or retail merchandising, the issues of property, plant, and equipment (PPE) constitute your greatest investments and your greatest costs.
F
In the U.S., government programs are the number one source for financing small businesses.
F
In the context of a business plan, a firm's responsiveness to customers is a key concern of bankers
F
Something that is essential to how you live and does not have many substitutes or alternatives is called an elastic product.
F
The U.S. government agency that helps people start small businesses is the U.S. Department of Commerce.
F
The disadvantage of the BRIE model is that it does not mention the management of resources.
F
The method of advertising is least likely to be used by businesses to convey their message to potential customers.
F
The primary focus of corporate entrepreneurship is creating new civic organizations which are financially self-sufficient.
F
The process of dividing the market into smaller portions of people that have certain common characteristics is called stereotyping.
F
The purchasing process is the term applied to the schedule and the process for setting the schedule for making purchases by an individual or an organization.
F
The total product is the most general description of a business, and the one which captures the smallest amount of what is special about a business.
F
Traditional small businesses' schedules are defined by the owners' needs.
F
Truly entrepreneurial businesses are characterized by imitativeness in their products, services, or business models.
F
When a business enters a phase of rapid growth, one of the challenges it faces is that very few sources of money are available to support its growth.
F
When coming up with a new idea in the product development process, the focus is on the pains and gains of customers.
F
When financing with debt, small businesses should first apply for a Small Business Administration guaranteed loan before approaching their own bank as the SBA loans have lower interest rates.
F
In entrepreneurship, every good idea is a viable business opportunity.
False
In the context of a business plan, a firm's responsiveness to customers is a key concern of bankers
False
Personal selling decreases business owners' flexibility in their presentation
False
Press relations are a form of communication that encourage the customer to take immediate action
False
Selling your product or service in a limited area, for a limited time is known as parallel marketing.
False
Services have separability of production and consumption
False
Something that is essential to how you live and does not have many substitutes or alternatives is called an elastic product.
False
Statement of cash flows is also referred to as the statement of financial position.
False
The accounting equation is simply stated as Assets = Liabilities - Owners' Equity.
False
The method of advertising is least likely to be used by businesses to convey their message to potential customers
False
The process of dividing the market into smaller portions of people that have certain common characteristics is called stereotyping.
False
The purchasing process is the term applied to the schedule and the process for setting the schedule for making purchases by an individual or an organization.
False
The relation of product or company capabilities to customer pains and gains is the augmented product you offer your customers.
False
The total product is the most general description of a business, and the one which captures the smallest amount of what is special about a business
False
The total product is the most general description of a business, and the one which captures the smallest amount of what is special about a business.
False
True or False: Using a single reputable source is adequate when performing secondary analysis.
False
Using a single reputable source is adequate when performing secondary analysis.
False
Variable costs decrease if output increases
False
When coming up with a new idea in the product development process, the focus is on the pains and gains of customers.
False
When the fear appeal used by a marketing message is a too strong, it always causes the audience to react positively.
False
When the fear appeal used by a marketing message is a too strong, it always causes the audience to react positively. true/false
False
Small businesses typically use the strategy of innovativeness rather than imitativeness.
False Page: 186
Advertising costs are usually based on cost per hundred thousand.
False (F)
Brochures and flyers are types of promotional novelties.
False (F)
Personal selling decreases business owners' flexibility in their presentation.
False (F)
Press relations are a form of communication that encourage the customer to take immediate action.
False (F)
When the fear appeal used by a marketing message is a too strong, it always causes the audience to react positively.
False (F)
Short-term debts are not transferable to other investors.
False.
The difference between revenue and expense is called sales.
False.
promotional mix.
How much of each message conveyance a business owner uses to sell his or her product as well as his or her objective in using each one is known as:
Which of the following is the first stage of the new product development process?
Idea generation
Serial entrepreneurs Steve Blank and Bob Dorf came up with a more inclusive approach than the standard marketing funnel. Which of the following is not one of the major goals of their new approach?
Identify customers
necessary to capture a desired market share given an anticipated level of
If a business is trying to grow, the right price for its products is one that is:
What is a Multi-channel marketer?
If you include in your classified ad your phone number, your Web site, and your e-mail address, then you are a multi-channel marketer. One customer may pick up the phone. Others will e-mail or browse your Web site. This simply allows your customers to contact you in the way they feel most comfortable.
Which of the following statements is true of an executive summary?
It is the single most widely distributed written description of a business
Which of the following is true of accounting equation?
It is used to place records into understandable categories that are useful for managing a business.
Which of the following is a characteristic feature of a message for a target market?
It must contain the elements of a product's value proposition.
"In the context of accounting functions, which of the following is true of accounts receivable?"
It records provision of credit to customers.
In the context of accounting functions, which of the following is true of accounts receivable?
It records provision of credit to customers.
Which of the following statements is true of an elevator pitch?
Its goal is to sell the idea of a business to another.
_____ ratios measure the business's ability to pay debts and expenses that are due in the current accounting period.
Liquidity
Which of the following survey methods has the lowest return rate and does not allow for much flexibility?
A. creative destruction** B. service distortion C. innovative disruption D. crowdsourcing
Mandarin In Town, a Chinese restaurant, opened recently in Burnsville, Minnesota. People form all over the town flocked to Mandarin to find out how good it was. This gave a big boost to the restaurants initial business, but it caused the other restaurants in the area to loose business temporarily. The way in which Mandarin In Town hurt existing restaurants in Burnsville is an example of:
Which of the following statements is true regarding the 5-M model?
Measures are business goals defined in terms of sales, market share, employment, locations, profits, growth, etc."
True
One of the major challenges identified for family businesses is role conflict
_____ questions provide data that are difficult to tabulate and compare.
Open-ended
_____ is the most used item on the income statement.
Operating income
_____ plans are designed to be used internally for management purposes.
Operational
False
Small businesses focus on effectiveness, whereas high-growth ventures focus on efficiency
One of the policies for managing customer credit requires business owners to maintain constant "aging" of accounts to quickly identify customers who become delinquent.
T
One unusual ability found in the entrepreneurs Gaglio and Katz studied was that many of them can come up with new ideas given nearly any combination of resources.
T
One way you can try to practice the business of innovation is to invite someone you never included before to a meeting at which you are solving a problem or searching for a new opportunity.
T
Operational plans and private placement memos are the only two types of plans that add material to a full business plan.
T
Payments of profits to the owners of corporations are called dividends.
T
People who buy ownership rights but are not part of the management of the business are known as outside equity investors.
T
Promotion includes getting the message out to the target market so that they can make decisions about a product or service.
T
Radio advertisements provide both geographic and demographic segmentation of a product or service.
T
Sales leads who actually make some sort of effort to learn more about the product, service, or business in anticipation of a possible purchase are known as prospects.
T
Skimming, odd-even pricing, and price lining are three possible pricing strategies available to small businesses.
T
Advertising is often used to support the corporate identity and value propositions that are established through public relations efforts.
True
Cash flow statements can be either direct statements or indirect statements
True
Cash-to-cash cycle is also referred to as operating cycle.
True
Currency is the most common form of cash.
True
Every business faces risks in the real world, so every business plan needs to spend some time addressing them
True
Executive summaries are written in a formal style, suitable for investors, bankers, and lawyers to read.
True
Follow-up refers to the contacts you periodically make with customers in order to remind them of your business, and your interest in their business.
True
Giveaways, samples, and tastings are all examples of introductory techniques used in sales promotion.
True
If you have started a business, or are doing a business where you do not expect to prepare a full business plan, a stand-alone marketing plan might be useful.
True
In crafting a feasibility study, the goal is to assess if the idea can be profitably brought to market.
True
In the context of a business plan, product quality, its benefits, service quality, and the competitive advantage are the primary concerns of potential customers.
True
It is customary for a small business to concentrate its efforts on one target market at the beginning and consider secondary ones later
True
It is customary for a small business to concentrate its efforts on one target market at the beginning and consider secondary ones later.
True
It is good to opt for distributors when a whole line of products need to be bought or warehoused.
True
It is nearly impossible to design a message that will appeal universally or to find media that will reach all consumers.
True
Liquidity is a measure of the ability of a business to meet both short-term and long-term obligations
True
Distributors and wholesalers prefer taking on start-up products as there are no setup charges involved.
false
Which of the following best exemplifies personality segmentation?
"Shoe Soul, Inc. segments its shoes as adventure shoes, limited edition shoes, and couture shoes."
Which of the following statements is true of the financials section of a business plan?
"The assumptions subsection explains computations, inclusion or exclusion of items, and any other special considerations."
Financial accounting is primarily intended for:
"bankers, investors, and regulators."
The manufacturing costs incurred by Fred's Prints, a firm selling custom-designed T-shirts, are $10 per T-shirt, and the selling and distribution costs incurred are 6$ per T-shirt. To this total cost of $16, Fred adds a profit of $4 on each T-shirt and sells the T-shirt at $20. The markup here would be _____.
$4. Markup refers to the amount an entrepreneur adds to costs to provide a profit. Page: 286
As a new entrepreneur, Anthony's magic number for 2013 is $42,000. If the current tax rate for his business is 30 percent, calculate the amount that Anthony's firm would need to sell for him to get his magic number.
$60,000 The formula to calculate the pretax income is as follows: Pretax income = (The desired post-tax income)/(1 − Tax percentage rate) Page: 188
Licensee
A firm that obtains the rights to use a particular piece of intellectual property.
Which of the following is a characteristic of a small business? A. Source of funding is primarily other people's money B. Focus is on efficiency C. Professionalized approach to human resource D. Delegation is essential
B
_____ refer to permanent changes made to the location to fit business's needs. A. Rent defaults B. Hidden charges C. Leasehold improvements D. Signage requirements
C. Leasehold improvements
A(n) _____ is a nonprofit organization or institution that provides business services by using handicapped or rehabilitated workers. A. contract manufacturer B. e-tailer C. sheltered workshop D. fulfillment center
C. sheltered workshop
_____ is a schedule of the amounts and timings of the cash coming into a business.
Cash receipts budget
off-peak pricing
Charging lower prices at certain times to encourage customers to come during slack periods is known as _____.
A(n) _____ is a middleman business which sells to consumers or end-users of a product, typically in single or small quantities. A. manufacturer B. agent C. wholesaler D. retailer
D
Business owners can figure how to better target ads or promotions to particular types of customers if: A. they track sales of their competitors. B. they identify the defects in their products. C. they use the diversification strategy rather than the product expansion strategy. D. they link sales and purchase basis to the type of customer.
D. they link sales and purchase basis to the type of customer.
Exporting is usually expensive, difficult to start, and more risky than licensing, franchising, or joint ventures.
F
Face-to-face meetings with the client are infrequent if the services are provided at the client's location.
F
Selling your product or service in a limited area, for a limited time is known as parallel marketing.
False. Selling your product or service in a limited area, for a limited time is known as test marketing. Page: 234
Competitors of a company are not a source of business ideas.
False. Sources of business ideas include end users, customers, salespeople, market research, and competitors. Page: 279
The close of a sale is the end of the sale.
False. the close is not the end of the sale. The important objective of follow-up is to make customers feel at ease.
False
Gathering resources for a business is easier during economic recessions that during economic boom times
Identify the layout that is very efficient and organized but lacks some visual impact.
Grid layout
Which of the following is a component of the AIDA formula that aims to hook people to the press release?
Interest
_____ activities include the acquisition and disposal of property, plant, equipment, and investment securities of other firms.
Investing
"_____ is a strategy whose goal is growth, based on selling in areas or to groups previously not served by the business. "
Market expansion
Which of the following statements is not true concerning marketing and marketing plans?
Not all business plans have a marketing section.
Which of the following is a critical risk to a business?
Overlooked competition
False
Pricing is not seen as a challenge by part-time businesses
"Which of the following layouts is most appropriate for low-volume, flexible manufacturing? "
Process layout
The first step in preparing a master budget is to prepare a _____ budget.
Sales
Your estimated number of prospective customers multiplied by your hit rate multiplied by the amount of each sale equals your sales forecast.
T
Which of the following is the key to customer relationship management (CRM)?
The data on current or prospective customers
Which of the following is a difficulty that arises in understanding and interpreting the income statements?
There are disputes over when to recognize revenues.
Which of the following statements is true about pure services?
They are heterogeneous.
True
Universalism is an ethical model that suggests people get their ideas of right and wrong from their family, religion, education, community and culture
A crisis in which there is a shortage of cash for expanding a business after an exponential increase in sales is termed _____
growth trap
"An organization, usually associated with universities, that supports start-up technology businesses by providing inexpensive office space, a variety of support services, and resources is called a(n) _____."
incubator
The sales at Pizza Power have lately been declining due to a new Chinese restaurant in the same neighborhood. This is typically known as _____.
indirect competition
"In new product development process, the product development stage typically involves: "
introducing product prototypes to test markets
The difference between assets and liabilities of a business is called its:
owners' equity.
"Tammy is talented at craft but lacks the cash flow management skills required to run a business. She opens a store, Tammy's Craft Corner, with the help of her son David a business major who would manage the budgets and expenses of the business. Tammy buys her craft materials on credit from her supplier but clears all her debts at the end of every month. The amount that Tammy owes her supplier is referred to as _____."
payables
"A service typically exhibits the characteristic of _____ because if it is not used when offered, it cannot be saved for later use. "
perishability
When a product or service is new to the industry or is itself creating a new industry, it is referred to as a(n) _____ business.
pioneering
A start-up cannot:
provide positive cash flows immediately. A start-up will require significant time to become established and provide positive cash flows. An established business or franchise has built-in customers to provide immediate cash inflows. Page: 158
People who receive a promotional impression and who give some thought to buying the product are referred to as _____.
sales leads.
The most common strategy employed by small businesses for handling money shortages is _____.
using personal money
The process of determining the effect of price and quantity changes on revenues and expenses refers to:
variance analysis.
Putting two or more of the same or different products or services together and selling for a price somewhat under the products' individual prices is _________.
- partitioned pricing - paired pricing - product line pricing - prestige pricing Correct - None of the above
Chapter 12
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Chapter 13
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Chapter 14
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A _____ is a concession which covers the time while you prepare your location prior to opening. A. rent-free use period B. leasehold improvement C. construction allowance D. hidden charge
A
Doubt that occurs after a purchase has been made is called _____. A. cognitive dissonance B. customer vector C. segmentation D. trendiness
A
In innovation-driven economies: A. entrepreneurship levels are in the middle range. B. entrepreneurship levels are very high. C. entrepreneurship levels are lower compared to factor-driven economies. D. entrepreneurship is not given any consideration.
A
In which of the following stages of personal selling does an entrepreneur collect background information before selling the actual product or service? A. Prospect and evaluate B. Prepare C. Present D. Close
A
Lifestyle firms, traditional small businesses, and high-performing small businesses are often called _____. A. main street businesses B. Wall Street businesses C. high-growth ventures D. universal businesses
A
Pest control, lawn services, and carpet cleaning are examples of services at a _____. A. client's location B. competitor's location C. remote location D. mutually accessible location
A
When writing your elevator pitch, remember that elevator pitches have four success factors. Which of the following is not one of those success factors? A. The length. B. The purpose. C. The delivery. D. The hook.
A
Which of the following is not one of the primary criteria for a small business's record keeping system? A. The ability to outsource the task. B. The timeliness of reports. C. The security of data. D. Understandability to the manager of the business.
A
Which of the following is true of a high-performing small business? A. It often grows through multiple locations. B. It aims to achieve growth rates of 25 percent or more a year. C. It has sales of more than $1 million. D. It has low levels of professionalization.
A
Which of the following statements is true of service locations? A. Services at a remote location can be located anywhere in the world. B. Office cleaning is an example of services at a mutually accessible location. C. Services at a remote location needs frequent face-to-face client involvement. D. Services at a mutually accessible location are ideal for home-based businesses.
A
Which of the following terms refers to the activities used to establish and promote a favorable opinion by the media? A. Press relations B. Word-of-mouth communications C. Sales promotions D. Ambush marketing
A
_____ is a strategy whose goal is growth, based on selling more of the firm's product or service to the existing customer base. A. Market penetration B. Product expansion C. Market expansion D. Diversification
A
Differentiation strategies
A type of generic strategy aimed at clarifying how one product is unlike another in a mass market. Page: 201
A. covenant B. easement C. variance** D. business pass
A(n) _____ is a premission from a government organization to act differently than what the laws state
_____ refers to the contacts business owners periodically make with customers in order to remind them of their business, and their interest in customers' business. A. Follow-up B. Customer service C. Follow-through D. Mat release
A. Follow-up
Which of the following statements is true of a direct mail approach? A. It is a challenge to find the right market using this method. B. It involves major inventory investments. C. It is seen by most customers as a form of home invasion. D. It does not need adequate preparation before selling a product.
A. It is a challenge to find the right market using this method.
Diversification is a strategy whose goal is growth, based on:
Adding new products or services to the firm's existing collection of offerings.
According to the BRIE model, which of the following sets a firm off from the buying or selling or bartering done casually by nonmerchants? A. Resources B. Boundary C. Intention D. Exchange
B
Eddie, the owner of a fast-food joint, finds that he spends far lesser when he bakes breads in dozens than when he bakes two or three loafs at a time. This idea of Eddie's is similar to the concept of: A. break-even point. B. economy of scale. C. economy of scope. D. monopoly.
B
Neil places an advertisement for his pastry shop, Neil's Pastries, in the local newspaper. He includes his phone number, website, e-mail address, and postal address in the advertisement so that prospective customers have the option to contact him in the way they feel most comfortable. Neil is a _____. A. guerilla marketer B. multichannel marketer C. telemarketer D. direct seller
B
When finally setting the actual price of your product or service, there are several contextual factors including your company objectives, your marketing strategy, competition, channels of distribution, and legal and regulatory issues to consider. Which of the following statements is not true when considering these factors? A. The customer's end price is usually higher than your price due to price escalation. B. Pricing off a competitor's price is as easy as picking a percent, say 80%, and charging that price for your product or service. C. Some forms of price discrimination are illegal. D. Firms that compete on price may experience negative growth.
B
Which of the following forms of direct marketing is the most expensive? A. Direct sales B. Telemarketing C. Direct mail D. Guerilla marketing
B
Which of the following is used when selling more of the firm's product or services to existing customers? A. Market expansion B. Market penetration C. Diversification D. Vertical integration
B
Which of the following statements best describes the process of idea screening in new product development? A. It involves specifying the details of each idea's technological feasibility, its cost, how it can be marketed, and its market potential. B. It is the process of selecting the most promising ideas to be further evaluated for feasibility. C. It involves creating the first versions of products called prototypes which are used in further consumer testing. D. It is the process of mass producing a new product so that consumers can avail it.
B
Which of the following terms refers to a concept in public importance which alludes to the degree to which the issue is immediate in its impact? A. Proximity B. Currency C. Power D. Cultural resonance
B
_____ is a form of direct response advertising that reaches local people but does not permit a lot of details. A. Radio B. Billboard C. Magazine D. Newspaper
B. Billboard
_____ is the strategy of combining two or more products in one unit and pricing it less than if the units were sold separately. A. Skimming B. Bundling C. Premium pricing D. Price signaling
B. Bundling
Which of the following is a modern form of direct mail? A. Catalogs and brochures B. Direct faxing and e-mailing C. Sales letters and mail orders D. Postcards and leaflets
B. Direct faxing and e-mailing
Which of the following direct sales methods is effective for products that need demonstrations or detailed explanations? A. Industrial sales B. Door-to-door sales C. Vending machines D. Flea market
B. Door-to-door sales
_____ advertisements provide both geographic and demographic segmentation with a highly distracted audience. A. Television B. Radio C. Magazine D. Newspaper
B. Radio
what are open-ended questions best for?
Best used for gathering preliminary information.
Which of the following businesses requires a stake in the company and is good for brainstorming with other entrepreneurs?
Business incubator
Which of the following will be an example of odd-even pricing?
Buy a T-shirt for $19.89
A person who becomes an owner by inheriting or getting a stake in a family business is known as a _____. A. founder B. franchisor C. heir D. serial entrepreneur
C
Product expansion is a strategy whose goal is growth, based on: A. selling more of the firm's product or service to the existing customer base. B. selling in areas or to groups previously not served by the business. C. selling existing customers a product or service they have never bought before. D. adding new products or services to the firm's existing collection of offerings. Product expansion is a strategy whose goal is growth, based on selling existing customers a product or service they have never bought before.
C
Putting two or more of the same or different products or services together and selling for a price somewhat under the products' individual prices is _________. A. partitioned pricing B. product line pricing C. bundling D. prestige pricing
C
What is the goal of appendixes? A. To inform customers and partners about a firm and its products B. To establish marketing strategies and identify major competitors C. To provide supporting information that helps detail the key selling points of a plan D. To explain the growth plan and competitive strategies
C
Which of the following rewards refer to the money made from owning a business? A. Growth rewards B. Flexibility rewards C. Income rewards D. Performance rewards
C
Which of the following statements is true of pricing strategy? A. Small businesses should have smaller prices too. B. Most consumers decide on a product using price as the number one factor. C. An entrepreneur's first goal in pricing is to set the price as high as they think they can. D. Avoid sale prices as they lead to price wars.
C
_____ is an aspect of entrepreneurship that refers to doing the most work with the fewest resources. A. Innovation B. Creation C. Efficiency D. Customer-focus
C
_____ refer to permanent changes made to the location to fit business's needs. A. Rent defaults B. Hidden charges C. Leasehold improvements D. Signage requirements
C
_____ is often used to support the corporate identity and value propositions that are established through public relations efforts. A. Personal selling B. A corporate newsletter C. Advertising D. A press kit
C. Advertising
Raven has been researching for product ideas by interacting with children, young mothers, and by carefully studying the competitors' toys. This has helped her generate several ideas. Which of the following is most likely to be the next step for Raven? A. Test marketing B. Product development C. Idea screening D. Commercialization
C. Idea screening
_____ is the process of dividing the market into smaller portions of people who have certain common characteristics. A. Target optimization B. Market penetration C. Segmentation D. Market recognition
C. Segmentation
Which of the following is an example of sales promotion? A. Tara's Attire adds kids clothing to its existing range of clothes. B. Sammy Jams advertises about its new jam through billboards. C. Treats Today gives away samples of its new healthy donuts for free. D. Yen Yoga passes out flyers to advertise about a new yoga center in the Holmesville.
C. Treats Today gives away samples of its new healthy donuts for free.
A(n) _____ is a middleman business which buys and sells to businesses rather than consumers. A. manufacturer B. agent C. wholesaler D. retailer
C. wholesaler
Which of the following statements is not true of a product in the decline stage of the product life cycle?
Characteristics of the decline stage differ for each product.
Which of the following is an example of a cash equivalent?
Commercial paper
What term refers to a concept in public importance which alludes to the degree to which the issue is immediate in its impact?
Currency
What term refers to a concept in public importance which alludes to the degree to which the issue is immediate in its impact?
Currency.
_____ is a reward universally mentioned by entrepreneurs. A. Industry recognition B. Peer admiration C. Political power D. Work flexibility
D
Which of the following businesses requires a stake in the company and is good for brainstorming with other entrepreneurs? A. Empowerment zone B. Manufacturing business C. Remote location service D. Business incubator
D. Business incubator
Which of the following statements is true about elastic products? A. An elastic product does not have many substitutes or alternatives. B. A change in price of elastic products makes very little difference in quantity purchased. C. During economic bad times businesses that sell inelastic products close down more often than those that sell elastic products. D. Customers will respond to price increases for elastic products much more negatively than for inelastic products.
D. Customers will respond to price increases for elastic products much more negatively than for inelastic products.
_____ refers to a method of selling in which catalogs, brochures, letters, videos, and other pieces of marketing materials are shipped straight to customers from which they can mail, call, or e-mail an order. A. Guerilla marketing B. Direct sales C. Contract manufacturing D. Direct mail
D. Direct mail
While teaching strategy at Farrell University, Jessica developed an interactive strategy-simulation game to inculcate the concept of strategy to her students. She found that they were able to grasp the concept much better from the game rather than from reading books. For two years Jessica used the game to teach students. Eventually she removed possible glitches and perfected the game. She wanted students at other universities to benefit from the simulation. The result was the launch of Simulate Strategy, Inc. Jessica places an advertisement about her product with her e-mail and contact information in the "Chronicle of Higher Education," a leading publication for University professors. Which of the following marketing strategies exemplifies this scenario? A. Guerilla marketing B. Telemarketing C. Direct sales D. Direct response advertising
D. Direct response advertising
Which of the following forms of direct mail is the least expensive? A. Catalog B. Sales letter C. Leaflet D. E-mail
D. E-mail
Which of the following terms refers to an estimation of what a price should be based on information gathered by a customer from sources such as advice, advertisements, or comparison shopping? A. Mark-up price B. Budget-based price C. Augmented price D. External reference price
D. External reference price
_____ refers to business owners doing what they said they would do. A. Trendiness B. Cognitive dissonance C. Follow-up D. Follow-through
D. Follow-through
_____ businesses have diverse operations and three critical site selection considerations: traffic, customer ease, and competition. A. Home-based B. Low customer contact C. E-tailer D. High customer contact
D. High customer contact
Which of the following is the first stage of the new product development process? A. Test marketing B. Commercialization C. Feasibility study D. Idea generation
D. Idea generation
Which of the following is true of promotional novelties? A. They explain the competitive strategies of the company to the readers. B. They must be large enough to read by passing traffic. C. They include stories of customers whose problems were solved. D. They are given to key customers or as gifts to employees.
D. They are given to key customers or as gifts to employees.
Trendiness refers to: A. a concept in public interest which alludes to events with a broad appeal within the market or population. B. a concept in public recognition which alludes to the impact level of the issue being discussed. C. a concept in public interest which alludes to the graphic interest held by an event. D. a concept in public recognition which alludes to the fit of the topic to current fashion or public interest.
D. a concept in public recognition which alludes to the fit of the topic to current fashion or public interest.
A(n) _____ refers to a middleman business which represents a manufacturer's products or services to other business-to-business middleman firms. A. retailer B. wholesaler C. manufacturer D. agent
D. agent
Shoe Pica Inc., a retailer of shoes, advertises that it is selling a particular type of jogging shoes at a very low price of $50. These shoes are kept at the end of the store and before reaching those shoes, customers have to walk by all the other shoes that have many more features and better quality. Several times, this causes the consumers to buy other better brands even though they are costlier that the one advertised. This is a typical example for _____. A. captive pricing B. partitioned pricing C. price lining D. bait pricing
D. bait pricing
At Sea Shell Diner, a burger costs $4, and a pack of two cookies costs $2. The diner also offers a combo meal consisting of the burger and cookies at $5. This pricing strategy is an example of _____. A. prestige pricing B. price lining C. off-peak pricing D. bundling
D. bundling
An inconsistency between experience and belief refers to: A. value proposition. B. segmentation. C. trendiness. D. cognitive dissonance.
D. cognitive dissonance.
Pure goods are more _____ than pure services. A. perishable B. inconsistent C. inseparable D. homogenous
D. homogenous
Josh, an electronics retailer, noticed that the e-commerce business was booming. He started an online shopping website to take advantage of this surge in business. As a result, his business attracted more customers from all across the country. This reflects Josh's:
Entrepreneurial alertness
"Which of the following international strategies is usually inexpensive, quick to start, easy to change, and less risky than the others?"
Exporting
"C" in the creativity tool SCAMPER stands for copy.
F
"S" in the creativity tool SCAMPER stands for summarize
F
A screening plan provides information on the company, product/service, market, and critical risks to prospective business.
F
According to research, start-up entrepreneurs felt most confident about obtaining start-up capital.
F
According to the feasibility study outline, entering into a franchise agreement, partnerships, distributorships, etc., should be discussed in the business idea section.
F
Advertising costs are usually based on cost per hundred thousand.
F
Knowing one's personal worth is not important when starting a business.
F
Ninety percent of all new businesses fail within two years.
F
On the question of what came first for new businesses, according to PSED, a majority of entrepreneurs indicated that business idea and the decision to start a business were simultaneous.
F
Personal selling decreases business owners' flexibility in their presentation.
F
Planning, organizing, and staffing are primarily the responsibility of operations management.
F
Preparation and correlation are two stages of the creative process, according to Graham Wallas.
F
Press relations are a form of communication that encourage the customer to take immediate action.
F
Research suggests that the first good idea entrepreneurs come up with is always the best.
F
Self-employed persons are not referred to as entrepreneurs.
F
Selling your product or service in a limited area, for a limited time is known as parallel marketing.
F
Services have separability of production and consumption.
F
Small businesses focus on effectiveness, whereas high-growth ventures focus on efficiency.
F
Small businesses start small but are intended to grow rapidly, often requiring a team of partners.
F
Small-scale entrepreneurs are only allowed to trade in sale of goods and not in trades of service.
F
When the fear appeal used by a marketing message is a too strong, it always causes the audience to react positively.
F
The method of advertising is least likely to be used by businesses to convey their message to potential customers.
F (False)
The process of dividing the market into smaller portions of people that have certain common characteristics is called stereotyping.
F (False)
"S" in the creativity tool SCAMPER stands for summarize.
False
A direct mail approach needs major inventory investment
False
A screening plan provides information on the company, product/service, market, and critical risks to prospective business
False
Advertising costs are usually based on cost per hundred thousand
False
An entrepreneur's first goal in pricing is to set the price as high as they think they can.
False
Brochures and flyers are types of promotional novelties
False
Distributors and wholesalers prefer taking on start-up products as there are no setup charges involved
False
During the introduction stage a product's life cycle and from a marketing standpoint, the more innovative the product, the quicker the sales.
False
E-tailers have high overhead and limited shelf space
False
Expendables are necessarily fixed costs
False
Exporting is usually expensive, difficult to start, and more risky than licensing, franchising, or joint ventures
False
Face-to-face meetings with the client are infrequent if the services are provided at the client's location.
False
Financial accounting is forward-looking and attempts to predict the results of management decisions.
False
Financial flexibility of a business is a matter of judgment, whereas financial strength is an objective assessment.
False
For me-too products, the stages of new product development are always extensively long.
False
Formal summaries of the content of an accounting system's records of transactions are called financial instruments.
False
Guerilla marketing is a form of communication that encourages the customer to act immediately, such as coupons, sales, or contests
False
Guerilla marketing is a form of communication that encourages the customer to act immediately, such as coupons, sales, or contests.
False
True or False: Competitors of a company are not a source of business ideas.
False
True or False: Services have separability of production and consumption.
False
True or False: The relation of product or company capabilities to customer pains and gains is the augmented product you offer your customers.
False
A start-up usually can easily gain revolving credit from suppliers and financial institutions.
False. A start-up usually cannot easily gain revolving credit from suppliers and financial institutions. Page: 159
A buyout refers to starting a business from scratch.
False. The purchase of substantially all of an existing business is called a buyout. Page: 157
A. licensing laws B. public utility laws C. property laws D. zoning laws
Government specifications for acceptable use of land and buildings in particular areas are called:
what are business plan concerns for silent partners/angel investors?
Growth rate, market, business team, and amounts and schedules.
"_____ uses creative and relatively inexpensive ways such as door-knob hangers, T-shirts, balloons, flyers under windshield wipers to reach customers."
Guerilla marketing
True
Habit-based planners don't plan, and they don't even tend to react to changes in their environments
Which of the following is the best example for price discrimination?
Half price for children below five years in adventure parks
Which of the following is the best example for price discrimination?
Half price for children below five years in adventure parks. Price discrimination refers to charging different prices to different groups, usually to attract a different demographic, such as senior citizens' discounts. Page: 295
"_____ businesses have diverse operations and three critical site selection considerations: traffic, customer ease, and competition. "
High customer contact
True
High-growth ventures and big businesses generally do not succeed without small businesses offering supporting services
Keeping in mind the budget constraints of a small business and the need to cover customers all over the world, which of the following is the most appropriate way to conduct a survey?
Internet. Internet surveys are gaining in popularity and have the advantage of being able to collect data from a large geographic area inexpensively.
Which of the following is true of advertising? A. It works if people recall an ad even though it did not have a positive impact on them. B. It involves presentation of a company's image. C. It is the least likely to be used by businesses to convey their message to potential customers. D. It works if an ad's impression is positive even if people do not recall it. E. All of the above F. None of the above
It involves presentation of a company's image.
Which of the following is true of managerial accounting?
It is forward-looking in nature.
Which of the following statements is true about the focus group method of market research?
It is led by a moderator who is skilled to ask questions the right way.
Which of the following statements best describes the process of idea screening in new product development?
It is the process of selecting the most promising ideas to be further evaluated for feasibility.
Which of the following is true of an LLC?
LLCs have a choice of being taxed as either corporations or partnerships.
Which of the following forms of direct response advertising allows very specific targeting and is appropriate for business-to-business selling?
Magazine
The 5 M's of the 5-M model are?
Mantra, mission, measures, method, and mechanics. Page: 223
_____ is a strategy whose goal is growth, based on selling in areas or to groups previously not served by the business.
Market expansion
_____ is a strategy whose goal is growth, based on selling more of the firm's product or service to the existing customer base.
Market penetration
Which of the following terms refers to a rule of thumb about how many prospective customers it takes to find one who will actually make a purchase?
Marketing funnel
Which of the following statements is true about products?
Most of the products sold today are combinations of both goods and services.
True
Most small businesses- even part-time ones- need to have a website regardless of whether or not they use it for actual sales
_____ analysis is based on the concept that a dollar to be received right now has more utility than does a dollar to be received at some time in the future.
Net present value
_____ is the amount of money left after deducting the operating expenses of the business.
Net profit. Page: 199
Which of the following is a technique used by a small business to increase cash inflows?
Offering discounts for prompt payment
True
One of the major issues identified for late career entrepreneurs is keeping personal finances out of the business.
True
One of the ways to practice the business of innovation is to invite someone, who was never included before, to a meeting for solving a problem
A service typically exhibits the characteristic of _____ because if it is not used when offered, it cannot be saved for later use.
Perishability
_____ is a category of marketing research that is best defined as the new information collected to solve a problem at hand or answer current questions.
Primary research.
Which of the following strategies is central to the process of upselling?
Product expansion
_____ refers to amounts that are owed to a business for merchandise that was sold on credit.
Receivables
Opportunity Recognition
Refers to searching and capturing new ideas that lead to business opportunities.
Which of the following is a disadvantage of leasing?
Renovation options are limited in a leased property.
Which of the following is a way to collect secondary data?
Researching on the Internet
Price lining
Saffron Spas Inc. has two membership schemes meant to attract different customer segments. The executive membership program priced at $1000 allows for unlimited usage of the services available in the spa chain up to a year. The premium membership program priced at $700 allows for limited usage of the spa services up to a year. According to this information, which of the following pricing strategies is adopted by Saffron Spas Inc.?
A. The market and its size** B. The extent of IP protection for the idea C. The initial set of customers D. The royalty that the product is likely to generate
Sandra has a product idea. She has researched about all the competing products and the companies that produce them. The research helps Sandra to address which of the following aspects of the I2P analysis?
Which of the following should be avoided while coming up with a company or brand name considering the possibility of future expansion?
Selecting a company or brand name that's too narrow. Selecting a company or brand name that's too narrow might not work when a firm plans to grow or expand. Page: 278
Which of the following statements is true of service locations?
Services at a remote location can be located anywhere in the world.
bonus-pack pricing
Shop Sure Inc. sells five bars of bathing soap for the price of four and three bottles of room freshener for the price of two. This is an example of _____.
true
Skimming, odd-even pricing, and price lining are three possible pricing strategies available to small businesses. true/false
A. imitative in nature** B. characterized by the novelty of their products C. the same as high-growth ventures D. not affected by market fluctuations
Small businesses are usually:
Which of the following statements is not true of the product life cycle?
Stages in the product life cycle are not similar to those of the firm's life cycle.
A lease is simply a rental agreement that specifies a minimum period of time for which one must make rental payments.
T
A product can include goods, services, and ideas.
T
Access for employees and reasonable cost are critical for businesses with low customer contact.
T
Equifax is one of the four primary CRAs in the United States.
T
Investing in multiple businesses increases the chances of offsetting possible losses incurred from one business.
T
It is customary for a small business to concentrate its efforts on one target market at the beginning and consider secondary ones later.
T
Advertising is often used to support the corporate identity and value propositions that are established through public relations efforts.
T (True)
It is customary for a small business to concentrate its efforts on one target market at the beginning and consider secondary ones later.
T (True)
Promotion includes getting the message out to the target market so that they can make decisions about a product or service.
T (True)
True
Taking an idea and offering a way to do something slightly better than it is done presently is a bit imitative and an incremental strategy
A. imitative strategy B. incremental strategy** C. status quo strategy D. innovative strategy
Taking an idea and offering a way to do something slightly better than it is done presently refers to a(n):
Which of the following is true of business locations?
Target market customers are essential factors for selecting business locations.
____ is best described as the process of selling prototype of a product in either a real or simulated market environment.
Test marketing
A. union B. government C. competitor D. owner**
The ____ is the most important element of social capital to customers and supporters of a business, such as bankers, lawyers and suppliers
"EnviroAir Inc. was featured in newspapers for its contribution toward sustainable environment. Also, the company distributed brochures to prospective customers to inform them about the company products. Which of the following sections should carry the press release and brochures in EnviroAir's business plan? "
The appendixes
"Which of the following sections of a classic business plan mentions the legal and hierarchical structures, key personnel, related service providers, and business location? "
The organization
true
The primary areas for conflict resolution in exporting include nonpayment and contract default issues. true/false
The steps in Blank and Dorf's "Get Customers" funnel are awareness, interest, consideration, and purchase. Here, consideration refers to:
The process of getting into the prospective customer's final list of brands of products or services they may purchase.
more tracked prospects making initial purchases.
The proof of a CRM effort is seen in:
Which of the following is an example of sales promotion?
Treats Today gives away samples of its new healthy donuts for free.
The value delivered to the customer is second in order of importance to the pricing decision.
Tru
A cash budget is the essential starting point for all financial and accounting considerations in a small business.
True
A product can include goods, services, and ideas.
True
If a rapid prototyping model can be developed, the molds for manufacturing can be made inexpensively by most modern manufacturers.
True
Skimming, odd-even pricing, and price lining are three possible pricing strategies available to small businesses.
True
Succinct messages make a business clear to potential clients and customers.
True
The business model canvas and the classic feasibility study produce very different results.
True
The concept of total product includes how customers describe one's good or service.
True
The final goal for developing and testing your value proposition is how it stacks up against and will compete against the other offering available to your customers
True
The final goal for developing and testing your value proposition is how it stacks up against and will compete against the other offering available to your customers.
True
The financial statements in a business plan include income statements, cash flow, balance sheet, and their respective assumptions.
True
Your hit rate is how many prospects or leads you need to approach in order to make one sale. Also called the conversion rate.
True (T)
Which of the following primary research methods is the least expensive for small businesses?
Using online survey services
_____ offer the flexibility of having a product available around the clock and at convenient locations.
Vending machines. Vending machines aren't appropriate for every product, but they do offer the flexibility of having your product available around the clock and at convenient locations for your customers.
_____ is an electronic equivalent of word-of-mouth advertising.
Viral marketing
Which of the following is the shortest business planning presentation in terms of the length of description?
Vision statement
A. Sarah works a full-time day job as a waitress and then runs a part-time baby-sitting service at night B. Cathy, who does computer repairs, drops hints to customers about having an office downtown when she actually works part-time from her home C. Jenson misses his deadlines at his full-time day job because he works late nights as a part-time music producer** D. Ken uses the money he gets from his full-time job as a chef to run his part-time business of graphic designing
Which of following best describes conflict of interest?
A. Promotion focus** B. Effectuation focus C. Prevention focus
Which of the following approaches yields better results in dynamic and uncertain environments or industries?
A. Government penalty** B. Loss of reputation C. Loss of employee morale D. Customer defection
Which of the following business costs of ethical failures causes the least damage?
They give more information about a firm and its products than business cards.
Which of the following is a characteristic feature of brochures and flyers?
A. Public companies B. Government enterprises C. Family businesses** D. International assignments
Which of the following is a major economic force, employing 58 percent of America's total workforce?
Harry Howard, a successful real estate broker, has established his own real estate company in western Pennsylvania. He has on-the-job experience working at a real estate company where he had a whole staff supporting brokers' work. Now on his own, with two secretaries, Harry is building his dream of owning and growing his own business. He wants to mainly focus on middle-to-upper-income homeowners and is exploring what type of promotional material he needs to have. Which of the following would be the fastest way for Harry to build his client base?
Word-of-mouth
Which of the following is usually the first technique an entrepreneur uses to get customers?
Word-of-mouth
The "going concern" concept states that:
a successful business will stay in business.
A financial plan for the future based on a single level of operations is called a(n):
budget.
Entrepreneurs can use the AIDA formula to write press releases well. In this AIDA formula, "D" stands for _____.
desire. Entrepreneurs can use the AIDA (attention, interest, desire, and action) formula to write press releases well.
Wholesalers and retailers who connect manufacturers to consumers are referred to as _____.
distribution channels.
A direct mail approach needs major inventory investment.
false
Which of the following statements is true regarding the balance sheet?
it's values are considered as historical values.
Training and flexible hours are a part of the _____ strategy used to control money that is expected to leave the firm.
noncash incentive
A business formed by an individual who is responsible for all debts and claims against the business is called a
sole proprietorship
The new product development process is likely to be easier for services than for innovative goods.
true
Door-to-door sales and party sales are examples of _____. A. direct sales B. telemarketing C. direct response advertising D. contract manufacturing
A
A. $100,000 and $1,000,000 B. $100,000 and $200,000 C. $25,000 and $100,000** D. $50,000 and $80,000
A traditional small business generally has sales of between:
_____ uses agents, export management companies, or export trading companies as intermediaries to handle most of the exporting process. A. Indirect exporting B. Freight forwarding C. Contract manufacturing D. Direct exporting
A. Indirect exporting
_____ refers to selling goods or services to consumers without intermediaries, typically to select customer groups and typically with tracking of the results. A. Nondirect distribution B. Direct marketing C. Benchmarking D. Contract manufacturing
B. Direct marketing
Value benefits come into play when you think about pricing your product. Which of the following statements is not true of value benefits? A. People will pay more for a product of high quality. B. The value delivered to the customer is second in order of importance to the pricing decision. C. Small business are unable to compete on value. D. The price customers are willing to pay is determined by their perception of value received.
C
Which of the following statements is true of price elasticity? A. Elastic products have few substitutes and price changes make little difference in demand. B. Inelastic products have many substitutes and price changes lower demand. C. Elasticity is the idea that the market's demand for a product or service is sensitive to changes in its price. D. Gas for your car is an example of an elastic product.
C
_____ involves contacting customers via telephone for the express purpose of selling a product or service. A. Telecasting B. Guerilla marketing C. Telemarketing D. Teleprocessing
C. Telemarketing
_____ refers to a method of selling in which catalogs, brochures, letters, videos, and other pieces of marketing materials are shipped straight to customers from which they can mail, call, or e-mail an order. A. Guerilla marketing B. Direct sales C. Contract manufacturing D. Direct mail
D
Services at a _____ often have too much specialized equipment to be readily transported and a need for at least some client involvement. A. client's location B. competitor's location C. remote location D. mutually accessible location
D. mutually accessible location
Which of the following statements is true of price elasticity?
Elasticity is the idea that the market's demand for a product or service is sensitive to changes in its price.
A typical I 2 P analysis consists of a one-page response to eight questions—four about the product, three about the process, and one about the people.
F
Entrepreneurs are exclusively found in farming-related occupations.
F
High-growth ventures are also known as main street businesses.
F
Research suggests that the first good idea entrepreneurs come up with is always the best.
False
Small firms are at an advantage when competing on price.
False
Taking an idea and offering a way to do something slightly better than it is done presently is an imitative strategy.
False
The SCAMPER tool is effective for solving problems only in traditional ways.
False
Gabriel has a product idea of a device which he believes will help people manage their daily chores, hence making their lives easier. He is unsure if the device is actually a feasible product but shares the idea with his boss and coworkers anyway. Gabriel is positive his device will get a fair review. He has offered other ideas in the past and one was now a viable product for the company. Which of the four ideas for making a creative business culture best describes Gabriel's company?
Positively reinforce ideas.
When finally setting the actual price of your product or service, there are several contextual factors including your company objectives, your marketing strategy, competition, channels of distribution, and legal and regulatory issues to consider. Which of the following statements is not true when considering these factors?
Pricing off a competitor's price is as easy as picking a percent, say 80%, and charging that price for your product or service.
________ is setting a price at the highest level the market will bear, usually because there is no competition at the time.
Skimming
A license is a legal agreement granting you rights to use a particular piece of intellectual property.
T
According to entrepreneurs in PSED, work experience was the number one source of ideas for their business.
T
Alex Osborne, a pioneer in the field of creativity, coined the word brainstorming.
T
Lifestyle or part-time firms typically provide enough profit or salary to supplement an income but usually not enough on which to live.
T
Search and capture of new ideas that lead to business opportunities is called opportunity recognition.
T
A. Small Business Administration** B. U.S. Department of Business Development C. U.S. Department of Commerce D. U.S. Entrepreneurial Administration
The _____ is a U.S. government agency that helps people start a business and also provides them support and advocacy.
Which of the following is the idea trigger for the "substitute" cue of the SCAMPER tool?
The opportunities that come as a result of replacing something that already exists
One of the ways to practice the business of innovation is to invite someone who was never included before in a meeting for solving a problem.
True
Setting up a short-term lease initially is one of the ways to handle an early termination of business.
True
True or False: The SCAMPER tool is effective for solving problems in a creative way.
True
True or False: The business model canvas and the classic feasibility study produce very different results.
True
True or False: The text outlines five major pitfalls that business owners can become victim to when trying to become more innovative; obeying nonexistent rules is one of those pitfalls.
True
When pricing your product, the optimum price is the highest price that will produce your desired level of sales in your intended market.
True
True
Using low-cost or free techniques to minimize cost of doing business is referred to as bootstrapping
A. It starts small and grows very rapidly to become a big business B. It represents about 20 percent of all businesses C. It typically has sales of $25,000 a year or less** D. It aims to achieve growth rates of 25 percent or more a year
Which of the following is a characteristic of a lifestyle firm?
A. It is often a one-site business** B. It follows a continuous growth curve C. It generally has sales between $100,000 and $1,000,000 depending on the industry
Which of the following is a characteristic of a traditional small business?
A. For a small business, the preferred funding source is other people's money, whereas for a high-growth venture, it is the owner's own money B. For a small business, the personal control preference is to involve others, whereas a high-growth venture prefers to retain autonomy C. A small business focuses on effectiveness, whereas a high-growth venture focuses on efficiency D. A small business grows when necessary, whereas a high-growth venture grows when possible**
Which of the following is a difference between a small business and a high-growth venture?
A. Its preferred funding source is other people's money B. It sells more when it is facing bankruptcy C. It considers sales as more important than marketing** D. It focuses more on effectiveness than on efficiency
Which of the following is true of a small business?
Josh, an electronics retailer, noticed that the e-commerce business was booming. He started an online shopping website to take advantage of this surge in business. As a result, his business attracted more customers from all across the country. This reflects Josh's:
entrepreneurial alertness.
Giveaways, samples, and tastings are examples of ________ techniques used in sales promotion.
introductory
A(n) _____ refers to a set of goods or services that consists of only one or a few items.
micro inventory
Radio advertisements provide both geographic and demographic segmentation of a product or service.
true
The value delivered to the customer is second in order of importance to the pricing decision.
true
Which of the following statements is true of service locations? A. Services at a remote location can be located anywhere in the world. B. Office cleaning is an example of services at a mutually accessible location. C. Services at a remote location needs frequent face-to-face client involvement. D. Services at a mutually accessible location are ideal for home-based businesses.
A. Services at a remote location can be located anywhere in the world.
Hobbies cannot be turned into successful businesses.
F
People who receive a promotional impression and who give some thought to buying the product are referred to as _____. A. sales leads B. qualified leads C. prospects D. target segments
A
Segmenting a market _____ involves dividing it into different segments in terms of cities or neighborhoods. A. geographically B. economically C. demographically D. culturally
A
When a marketer mentions the key points about his or her product or service in as few and as memorable words as possible, the resulting message is known as the _____ message. A. succinct B. core C. primary D. elementary
A
Which of the following statements is true of a direct mail approach? A. It is a challenge to find the right market using this method. B. It involves major inventory investments. C. It is seen by most customers as a form of home invasion. D. It does not need adequate preparation before selling a product.
A
Which of the following statements is true of nondirect distribution?
A product's final price is more than the manufacturing cost if intermediaries are involved.
When finally setting the actual price of your product or service, there are several contextual factors including your company objectives, your marketing strategy, competition, channels of distribution, and legal and regulatory issues to consider. Which of the following statements is not true when considering these factors? A. The customer's end price is usually higher than your price due to price escalation. B. Pricing off a competitor's price is as easy as picking a percent, say 80%, and charging that price for your product or service. C. Some forms of price discrimination are illegal. D. Firms that compete on price may experience negative growth.
B
Which of the following direct sales methods is effective for products that need demonstrations or detailed explanations? A. Industrial sales B. Door-to-door sales C. Vending machines D. Flea market
B
Which of the following is a characteristic feature of a message for a target market? A. It is repeated less often. B. It must contain the elements of a product's value proposition. C. It must be abstract. D. It must always be distinctive from target customers.
B
Which of the following is not one of the four key factors considered when determining an optimum price? A. Value delivered to the customer B. Supply chain costs C. Your business strategy and product placement D. Prices set my competing firms
B
Identify the type of service location in which face-to-face meetings with clients are infrequent. A. Mutually accessible location B. Remote location C. The client's location D. The competitor's location
B. Remote location
Dividing the market into different segments by income, age, or religion constitutes segmenting the market _____. A. geographically B. economically C. demographically D. culturally
C
Which of the following terms refers to a rule of thumb about how many prospective customers it takes to find one who will actually make a purchase? A. Lead qualification B. Value proposition C. Marketing funnel D. Segmentation
C
Wholesalers and retailers who connect manufacturers to consumers are referred to as _____. A. traffic generators B. manufacturing agents C. distribution channels D. business franchisors
C
_____ is the process of dividing the market into smaller portions of people who have certain common characteristics. A. Target optimization B. Market penetration C. Segmentation D. Market recognition
C
A clothing company that divides its market using characteristics of clothing such as practical, stylish, or for a particular sport, etc., is segmenting the market _____. A. demographically B. economically C. geographically D. by benefits sought
D
_____ refers to a method of selling in which catalogs, brochures, letters, videos, and other pieces of marketing materials are shipped straight to customers from which they can mail, call, or e-mail an order.
Direct mail
In entrepreneurship, every good idea is a viable business opportunity.
F
The text outlines five major pitfalls that business owners can become victim to when trying to become more innovative, but obeying nonexistent rules is not one of those pitfalls.
False
There are only a few good business models available for the new entrepreneur.
False
Traditionally, manufacturing processes are laid out in one of the two formats: grid layout and free-form layout.
False
True or False: Correlation is one of the four steps in the process for organizing creative thinking developed by Graham Wallas.
False
True or False: Research suggests that the first good idea entrepreneurs come up with is always the best.
False
Putting two or more of the same or different products or services together and selling for a price somewhat under the products' individual prices is _________.
bundling
Chapter 11
...
The difference between revenue and expense is called sales.
...
The goal of appendixes is to provide supporting information that helps detail or support the key selling points of a business plan.
??
A customer role that describes a person in an organization who is responsible for choosing which product or service will be obtained is the __________. A. decision maker B. purchaser C. end user D. influencer
A
A nation where the major forces for jobs, revenues, and taxes come from farming or extractive industries like forestry, mining, or oil production is a(n): A. factor-driven economy. B. efficiency-driven economy. C. innovation-driven economy. D. competency-driven economy.
A
A(n) _____ refers to the practice of purchasing and accepting delivery of inventory only after it has been sold to the final customer. A. just-in-time inventory B. macro inventory C. micro inventory D. in-process inventory
A
According to the BRIE model, which of the following is an element that is necessary to start a business? A. Boundary B. Recognition C. Efficiency D. Income
A
According to the Panel Study of Entrepreneurial Dynamics (PSED), when an entrepreneur comes up with the idea from others, the single greatest idea source is from: A. discussions with friends and family. B. discussions with potential or existing customers. C. discussions with existing suppliers or distributors. D. discussions with potential or existing investors or lenders.
A
Coupons, rebates, buy-one-get-one promotions, and sales are all forms of _______ techniques used in sales promotion. A. discounting B. contest C. loyalty D. introductory
A
Due to which of the following characteristics a news story is most likely to get public recognition? A. Trendiness B. Cultural resonance C. Power D. Currency
A
Due to which of the following characteristics a news story is most likely to grab public interest? A. Cultural resonance B. Issue recognition C. Trendiness D. Proximity
A
Entrepreneurs can use the AIDA formula to write press releases well. In this AIDA formula, "D" stands for _____. A. Desire B. Dominance C. Development D. Distance
A
Financing a business online through the collective involvement of others who provide donations, loans, or investments is referred to as _____. A. crowdfunding B. bootstrapping C. microfinancing D. crowdsourcing
A
Small business owners' unique selling points (also known as benefits) that customers can expect from your goods or services, including benefits that differentiate your offering from those of the competition is known as: A. value proposition. B. long-term value. C. tangibility. D. total product.
A
Harry Howard, a successful real estate broker, has established his own real estate company in western Pennsylvania. He has on-the-job experience working at a real estate company where he had a whole staff supporting brokers' work. Now on his own, with two secretaries, Harry is building his dream of owning and growing his own business. He wants to mainly focus on middle-to-upper-income homeowners and is exploring what type of promotional material he needs to have. Which of the following would be the fastest way for Harry to build his client base? A. Word-of-mouth B. Full-scale advertising C. Personal selling D. Sales promotion
A
How much of each message conveyance a business owner uses to sell his or her product as well as his or her objective in using each one is known as: A. promotional mix. B. marketing mix. C. AIDA. D. CRM.
A
Identify the managerial accounting technique which looks at the fixed and variable costs of a business to arrive at a number of unit sales to maximize gains. A. Cost-volume-profit analysis B. Marginal revenue costs analysis C. Break even analysis D. Cash flow analysis
A
In Connie's business plan, which of the following components is most likely to be of interest to Mr. Johnson? A. Cash flow and cash cycle B. Growth rate C. Competitive advantage D. Amounts and schedules for returns
A
In efficiency-driven economies: A. entrepreneurship levels are in the middle range. B. entrepreneurship levels are very high. C. entrepreneurship levels are very low. D. entrepreneurship is not given any consideration.
A
Key chains, pens, coffee mugs, or embossed briefcases are examples of _____. A. promotional novelties B. signs C. flyers D. marketing kits
A
Mandarin In Town, a Chinese restaurant, opened recently in Burnsville, Minnesota. People from all over the town flocked to Mandarin to find out how good it was. This gave a big boost to the restaurant's initial business, but it caused the other restaurants in the area to lose business temporarily. The way in which Mandarin in Town hurt existing restaurants in Burnsville is an example of: A. creative destruction. B. service distortion. C. innovative disruption. D. crowdsourcing.
A
Small businesses are usually: A. imitative in nature. B. characterized by the novelty of their products. C. the same as high-growth ventures. D. not affected by market fluctuations.
A
Social entrepreneurship primarily involves a person or group: A. creating new charitable and civic organizations which are financially self-sufficient. B. bringing new products or services to market. C. owning their own for-profit business. D. revitalizing government agencies.
A
The _____ is a U.S. government agency that helps people start a business and also provides them support and advocacy. A. Small Business Administration B. U.S. Department of Business Development C. U.S. Department of Commerce D. U.S. Entrepreneurial Administration
A
The _____ layout has aisles running from the front of the store to the back like the typical grocery, discount, or convenience store. A. grid B. free-form C. process D. production line
A
The ability of business owners to structure their lives in the way that best suits their needs refers to: A. flexibility rewards. B. family rewards. C. growth rewards. D. wealth rewards.
A
The form of entrepreneurship in which a person or group own their own for-profit business is referred to as: A. independent entrepreneurship. B. social entrepreneurship. C. public entrepreneurship. D. corporate entrepreneurship.
A
The steps in Blank and Dorf's "Get Customers" funnel are awareness, interest, consideration, and purchase. Here, consideration refers to: A. the process of getting into the prospective customer's final list of brands of products or services they may purchase. B. the process of prospective customers taking some action to learn more about the product or service you offer. C. the process of getting your message out as much as you can to your target market. D. the end of the initial promotional funnel.
A
The steps in Blank and Dorf's "Get Customers" funnel are awareness, interest, consideration, and purchase. Here, consideration refers to: A. the process of getting into the prospective customer's final list of brands of products or services they may purchase. B. the process of prospective customers taking some action to learn more about the product or service you offer. C. the process of getting your message out as much as you can to your target market. D. the end of the initial promotional funnel.
A
The term for measures or metrics that identify the outcomes that are most important to the success of a business are known as _____. A. key performance indicators B. brand promise C. issue recognition D. impressions
A
When considering the service life cycle, which of the following statements is not true? A. It can be more difficult to extend the life cycle of a service over that of a product. B. Services go through the same four stages of the life cycle. C. New services will take a little time to attract customers. D. Initial advertising efforts will be to educate your clients about the service.
A
Which of the following can be exercised only when presented with specified shipping records? A. A documentary draft B. A letter of credit C. A mail order D. A codicil
A
Which of the following can be exercised only when presented with specified shipping records? A. A documentary draft B. A letter of credit C. A mail order D. A codicil
A
Which of the following describes the significance of an overall growth strategy? A. It represents a driver of the variety of entrepreneurship. B. It allows for one small business enterprise to incorporate in multiple states at the same time. C. It provides the owner a stake in the family business. D. It helps buyers to get familiar with new products.
A
Which of the following international strategies is usually inexpensive, quick to start, easy to change, and less risky than the others? A. Exporting B. Joint venture C. Franchising D. Licensing
A
Which of the following is a characteristic of a traditional small business? A. It is often a one-site business. B. It follows a continuous growth curve. C. It defines its schedules based on the owner's needs. D. It generally has sales between $100,000 and $1,000,000 depending on the industry.
A
Which of the following is most likely to be true of signs as a form of advertising? A. They must be large enough to read by passing traffic. B. They generally contain the balance sheet of the company. C. They describe the competitive strategies of the company. D. They include stories of customers whose problems were solved.
A
Which of the following is the most frequently occurring element of the BRIE model? A. Intention B. Boundary C. Exchange D. Resources
A
Which of the following is true of a part-time firm? A. It starts small and stays very small. B. It has a continuous growth. C. Its success is defined by annual profits of $1,000,000. D. It aims to achieve growth rates of 25 percent or more a year.
A
Which of the following is true of business locations? A. Target market customers are essential factors for selecting business locations. B. Most entrepreneurs prefer their business locations to be outside their hometown. C. The cost of moving a company across town or across the country is cheap. D. Proximity of competitors does not affect choice of business locations.
A
Which of the following is true of theories based on the bounded rationality models? A. It assumes that people are inefficient processors of information. B. It assumes that people use complete information and incomplete analyses to make decisions. C. It assumes that people have unlimited abilities to obtain and process information. D. It assumes that the human mind is fundamentally irrational.
A
Which of the following layouts is most appropriate for low-volume, flexible manufacturing? A. Process layout B. Production line layout C. Free-form layout D. Grid layout
A
Which of the following statements is always true of sales promotions? A. Sales promotion is one of the major forms for marketing. B. Sales promotions are expensive and difficult to manage. C. Sales promotions are not covered under local or state laws. D. Sales promotions show up in the "Get Customers" portion of the customer development funnel.
A
Which of the following statements is true of nondirect distribution? A. A product's final price is more than the manufacturing cost if intermediaries are involved. B. An agent sells products to consumers or end-users, typically in small quantities. C. Distributors and wholesalers tend to take on start-up products due to zero setup charges. D. A retailer represents a manufacturer's product to other business-to-business middleman firms.
A
Which of the following statements is true of nondirect distribution? A. A product's final price is more than the manufacturing cost if intermediaries are involved. B. An agent sells products to consumers or end-users, typically in small quantities. C. Distributors and wholesalers tend to take on start-up products due to zero setup charges. D. A retailer represents a manufacturer's product to other business-to-business middleman firms.
A
Which of the following statements is true of sales forecasting? A. In many cases, the best sales forecast you can come up with is an educated guess. B. It is better to have a high sales projection initially and adjust as actual sales happen. C. Using traditional retailers and distributors does not change the price you set at the factory. D. Ignore your capacity when identifying your potential market as you will not be serving the entire potential market.
A
Which of the following statements is true of sales forecasting? A. In many cases, the best sales forecast you can come up with is an educated guess. B. It is better to have a high sales projection initially and adjust as actual sales happen. C. Using traditional retailers and distributors does not change the price you set at the factory. D. Ignore your capacity when identifying your potential market as you will not be serving the entire potential market.
A
_____ is a strategy whose goal is growth, based on selling more of the firm's product or service to the existing customer base. A. Market penetration B. Product expansion C. Market expansion D. Diversification
A
_____ is a type of CRM report that segments by customer or customer group on purchases or dates of purchase. A. Customer vector B. Sales report C. Customer service D. Interim report
A
_____ is a type of CRM report that segments by customer or customer group on purchases or dates of purchase. A. Customer vector B. Sales report C. Customer service D. Interim report
A
_____ is an electronic equivalent of word-of-mouth advertising. A. Viral marketing B. Ambush marketing C. Sales promotion D. Trendiness
A
_____ is the segment or segments a business owner selects to concentrate his or her marketing efforts. A. Target market B. Qualified market C. Customer vector D. Optimized market
A
_____ uses agents, export management companies, or export trading companies as intermediaries to handle most of the exporting process. A. Indirect exporting B. Freight forwarding C. Contract manufacturing D. Direct exporting
A
_______ is an estimation of what a price should be based on information a consumer gathered, such as advice, advertisements, or comparison shopping. A. An external reference price B. Perception of value C. An internal reference price D. Optimum price
A
refers to the contacts business owners periodically make with customers in order to remind them of their business, and their interest in customers' business. A. Follow-up B. Customer service C. Follow-through D. Mat release
A
Which of the following statements is true about products? Choose all that apply. A. Most of the products sold today are combinations of both goods and services. B. Products in terms of goods are more inseparable from their providers than services. C. Products in terms of goods are generally less homogeneous than services. D. People such as political candidates and celebrities can be considered as products. E. All of the above F. None of the above
A and D
Trendiness refers to:
A concept in public recognition which alludes to the fit of the topic to current fashion or public interest.
A. its employees dress in casual attire to work B. its service standards are bench marked by competitors** C. it refuses to use outdated technology D. it uses common technologies of the industry
A firm will be recognized for its industry leadership-product-based legitimacy and reputation, typically when:
A. factor-driven economy B. efficiency-driven economy** C. innovation-driven economy D. effectiveness-driven economy
A nation where industralization is the major force providing jobs, revenues and taxes, and where minimizing costs while maximizing productivity is a major goal is a(n):
Which of the following plans is most likely to be useful for demonstrating a new technology or service?
A proof-of-concept Web site
False
A situation that occurs when businesses have founders or owners who are passionate about only one or two of the key business functions, such as sales, operations, accouting, finance, or human resources is known as expert business professionalization
Which of the following can be exercised only when presented with specified shipping records? A. A documentary draft B. A letter of credit C. A mail order D. A codicil
A. A documentary draft
Which of the following statements is true of nondirect distribution? A. A product's final price is more than the manufacturing cost if intermediaries are involved. B. An agent sells products to consumers or end-users, typically in small quantities. C. Distributors and wholesalers tend to take on start-up products due to zero setup charges. D. A retailer represents a manufacturer's product to other business-to-business middleman firms.
A. A product's final price is more than the manufacturing cost if intermediaries are involved.
Which of the following has low overhead and unlimited shelf space and thereby can afford to take on an unknown firm or product? A. An e-tailer B. A wholesaler C. A retailer D. An agent
A. An e-tailer
Which of the following will be an example of odd-even pricing? A. Buy a T-shirt for $19.89. B. Buy four sandwiches and take the fifth one for free. C. For purchases above $20 get a gift worth $5. D. Market price is $25 and our price is $22.
A. Buy a T-shirt for $19.89.
Ivory Isles Resort sets a low base price of $250 for its rooms. This appears to be a great bargain for vacationers looking for resorts in the 5-star segment. However, the customers have to pay additional charges for using services such as the casino, spa, hot pool, gym, and the lounge. According to this information, which of the following pricing strategies is used by Ivory Isles? A. Captive pricing B. Odd-even pricing C. Going-rate pricing D. Multipack pricing
A. Captive pricing
_____ is best described as the process of making a new product available to consumers. A. Commercialization B. Factoring C. Pilot testing D. Liquidation
A. Commercialization
Which of the following gives the particulars on existing customers? A. Contact data B. Performance data C. Product data D. Service data
A. Contact data
Due to which of the following characteristics a news story is most likely to grab public interest? A. Cultural resonance B. Issue recognition C. Trendiness D. Proximity
A. Cultural resonance
_____ is a type of CRM report that segments by customer or customer group on purchases or dates of purchase. A. Customer vector B. Sales report C. Customer service D. Interim report
A. Customer vector
Which of the following international strategies is usually inexpensive, quick to start, easy to change, and less risky than the others? A. Exporting B. Joint venture C. Franchising D. Licensing
A. Exporting
_____ is a strategy whose goal is growth, based on selling more of the firm's product or service to the existing customer base. A. Market penetration B. Product expansion C. Market expansion D. Diversification
A. Market penetration
_____ is a price-setting method where an amount is added to the cost of a product to set the retail price and provide a profit. A. Markup pricing B. Marginal pricing C. Internal reference pricing D. Differential pricing
A. Markup pricing
Which of the following terms refers to the activities used to establish and promote a favorable opinion by the media? A. Press relations B. Word-of-mouth communications C. Sales promotions D. Ambush marketing
A. Press relations
Which of the following pricing practices is the most inappropriate? A. Pricing a product, advertised for high quality and prestige, lower than the competition B. Lowering prices during happy hour, hence discriminating against those who work during that time period C. Lowering prices to capture maximum market share as the patent for a product approaches its termination D. Pricing a product low when a business is operating below capacity
A. Pricing a product, advertised for high quality and prestige, lower than the competition
Which of the following layouts is most appropriate for low-volume, flexible manufacturing? A. Process layout B. Production line layout C. Free-form layout D. Grid layout
A. Process layout
In which of the following stages of personal selling does an entrepreneur collect background information before selling the actual product or service? A. Prospect and evaluate B. Prepare C. Present D. Close
A. Prospect and evaluate
Which of the following is most likely to be an example of a good-dominated product? A. Purchasing a sewing machine with a warranty B. Leasing a sewing machine C. Hiring the services of a tailor D. Renting a sewing machine
A. Purchasing a sewing machine with a warranty
_____ is the segment or segments a business owner selects to concentrate his or her marketing efforts. A. Target market B. Qualified market C. Customer vector D. Optimized market
A. Target market
Pest control, lawn services, and carpet cleaning are examples of services at a _____. A. client's location B. competitor's location C. remote location D. mutually accessible location
A. client's location
Which of the following is true of business locations? A. Target market customers are essential factors for selecting business locations. B. Most entrepreneurs prefer their business locations to be outside their hometown. C. The cost of moving a company across town or across the country is cheap. D. Proximity of competitors does not affect choice of business locations.
A. Target market customers are essential factors for selecting business locations.
Which of the following forms of direct response advertising attracts a large audience and is a good way to demonstrate a product? A. Television B. Radio C. Magazine D. Billboard
A. Television
_____ is best described as the process of selling prototype of a product in either a real or simulated market environment. A. Test marketing B. Moonlighting C. Bootstrapping D. Commercialization
A. Test marketing
Which of the following is most likely to be true of signs as a form of advertising? A. They must be large enough to read by passing traffic. B. They generally contain the balance sheet of the company. C. They describe the competitive strategies of the company. D. They include stories of customers whose problems were solved.
A. They must be large enough to read by passing traffic.
_____ refer to other businesses that bring customers to a target market area. A. Traffic generators B. Freight forwarders C. Fulfillment centers D. Contract manufacturers
A. Traffic generators
Due to which of the following characteristics a news story is most likely to get public recognition? A. Trendiness B. Cultural resonance C. Power D. Currency
A. Trendiness
_____ is an electronic equivalent of word-of-mouth advertising. A. Viral marketing B. Ambush marketing C. Sales promotion D. Trendiness
A. Viral marketing
Harry Howard, a successful real estate broker, has established his own real estate company in western Pennsylvania. He has on-the-job experience working at a real estate company where he had a whole staff supporting brokers' work. Now on his own, with two secretaries, Harry is building his dream of owning and growing his own business. He wants to mainly focus on middle-to-upper-income homeowners and is exploring what type of promotional material he needs to have. Which of the following would be the fastest way for Harry to build his client base? A. Word-of-mouth B. Full-scale advertising C. Personal selling D. Sales promotion
A. Word-of-mouth
Soul pine café issues a card to each new customer on which every purchase is stamped, and when a customer completes nine purchases, he or she gets the tenth service for free. This is a typical example of _____. A. a loyalty program B. price lining C. price bundling D. going rate pricing
A. a loyalty program
By adopting the pricing technique of loss leaders, a firm most likely aims to: A. attract traffic toward its products. B. imply superior quality to a competitor. C. signal that its products are a status symbol. D. reward repeat customers.
A. attract traffic toward its products.
Which of the following ways does borrowing help increase potential profits?
By providing capital funds for additional business opportunities
When an existing firm with the correct production capabilities makes your product for you, it is referred to as _____. A. contract manufacturing B. a sheltered workshop C. e-tailing D. freight forwarding
A. contract manufacturing
Door-to-door sales and party sales are examples of _____. A. direct sales B. telemarketing C. direct response advertising D. contract manufacturing
A. direct sales
Segmenting a market _____ involves dividing it into different segments in terms of cities or neighborhoods. A. geographically B. economically C. demographically D. culturally
A. geographically
The _____ layout has aisles running from the front of the store to the back like the typical grocery, discount, or convenience store. A. grid B. free-form C. process D. production line
A. grid
A(n) _____ refers to having only sufficient amount of products on the shelves to meet immediate purchases and usually requires frequent shipment from the supplier. A. just-in-time inventory B. macro inventory C. micro inventory D. in-process inventory
A. just-in-time inventory
A news release that is typeset and thus may be photographically reproduced for inclusion in a newspaper is known as a _____. A. mat release B. brochure C. sales packet D. press kit
A. mat release
ZestOne Technologies has launched a series of tablet computers that are similar to a competitor's product that already exists in the market. Such products are typically termed as _____. A. me-too products B. prototypes C. augmented products D. complementary goods
A. me-too products
A(n) _____ allows specific geographic segmentation. A. newspaper B. magazine C. e-mail D. video
A. newspaper
Charging lower prices at certain times to encourage customers to come during slack periods is known as _____. A. off-peak pricing B. price gouging C. price lining D. odd-even pricing
A. off-peak pricing
If the toy products are initially sold at an extremely low price that just covers the costs in order to get competitors' market share, then this pricing strategy would be known as _____. A. penetration pricing B. price signaling C. price skimming D. partitioned pricing
A. penetration pricing
A service typically exhibits the characteristic of _____ because if it is not used when offered, it cannot be saved for later use. A. perishability B. tangibility C. absorptivity D. homogeneity
A. perishability
How much of each message conveyance a business owner uses to sell his or her product as well as his or her objective in using each one is known as: A. promotional mix. B. marketing mix. C. AIDA. D. CRM.
A. promotional mix.
Key chains, pens, coffee mugs, or embossed briefcases are examples of _____. A. promotional novelties B. signs C. flyers D. marketing kits
A. promotional novelties
For me-too products, the stages of new product development are always extensively long.
F
Customer loyalty programs focus on developing a strategy that is based on: A. selling more of the firm's product or service to the existing customer base. B. selling in areas or to groups previously not served by the business. C. selling existing customers a product or service they have never bought before. D. adding new products or services to the firm's existing collection of offerings.
A. selling more of the firm's product or service to the existing customer base.
The primary goal of penetration pricing is to: A. steal competitors' market share. B. imply that a product is a status symbol. C. reward repeat and loyal customers. D. attract the low-, mid-, and high-end customers.
A. steal competitors' market share.
An item's capability of being touched, seen, tasted, or felt is called _____. A. tangibility B. legitimacy C. mutuality D. perishability
A. tangibility
The core product typically includes: A. the basic description of what a company or a product does. B. features of a product that differentiates it from competition. C. what a product means to the customers. D. value and cost benefits customers incur from a product.
A. the basic description of what a company or a product does.
When it comes to promoting a small business that is just starting out, spreading the news by _____ is the surest way to build a client base. A. word-of-mouth B. full-scale advertising C. personal selling D. sales promotion
A. word-of-mouth
true
Access for employees and reasonable cost are critical for businesses with low customer contact. true/false
A. Preparation B. Illumination ** C. Incubation D. Verification
According to Graham Wallas' description of the creative process, ideas begin to flow in which of the following stages?
A. Preparation B. Illumination** C. Incubation D. Verification
According to Graham Wallas' description of the creative process, ideas begin to flow in which of the following stages?
A. the decision to start a business came first B. the business idea came first** C. the idea and decision were simultaneous D. starting a business is a loss-making proposition
According to a majority of entrepreneurs in the Panel Study of Entrepreneurial Dynamics (PSED), a majority of entrepreneurs indicated that:
A. Discussion with potential investors B. Education and expertise C. Family and friends D. Work experience**
According to a majority of entrepreneurs in the Panel Study of Entrepreneurial Dynamics (PSED), which of the following is the most frequently mentioned source of business ideas?
A. adaptation B. magnification C. substitution **
According to the SCAMPER tool, a feature that allows customers to order directly from a Web site rather than visiting a store is an example of:
_____ is an accounting method which assigns costs based on the different types of work a business does in order to sell a particular product or service.
Activity-based cost estimates
A. pay-off B. royalty** C. lump sum payment D. payout
Adam owns a software development company. he and his team developed and licensed new software that could help many organizations strengthen their web security. Any organization that wishes to use Adam's licensed software would most likely have to pay him in the form of a(n) _______
A. it tends to be either semi-permanent ones or movable ones B. it needs to be built in places where there is less foot or vehicle traffic** C. it can be quickly established D. it does not require a lot of investment in inventory
All of the following are success factors to "retail stands" EXCEPT:
A. cutting your personal and business expenses B. seeing if you can get things which you need for free C. seeing if you can substitute a lower-cost alternative before you buy D. borrowing heavily from banks while keeping your money untouched**
All of the following are the key aspects of bootstrapping EXCEPT:
Which of the following is true regarding the components of a business plan?
An executive summary gives more detail about the business than the vision or mission statements or elevator pitch.
cognitive dissonance.
An inconsistency between experience and belief refers to:
False
As discussed in lecture, compromise is considered the most appropriate and usually the best choice to resolve conflicts
False
As the owner of a business, quickly admitting that the firm is in trouble indicates a lack of accountability
Which of the following is most likely to be a major business plan concern for bankers?
Asset or collateral base
Which of the following strategies is used by a business to decrease cash outflows?
Avoiding the wastage of resources
A _____ is a document issued by a bank that guarantees a buyer's payment for a specified period of time upon compliance with specified terms. A. documentary draft B. letter of credit C. mail order D. bill of lading
B
A business plan that provides information to potential licensees is referred to as a(n) _____ plan. A. screening B. invention C. operational D. concept
B
A business run by the individual who owns it is referred to as a(n) _____. A. franchise B. owner-managed firm C. professionally-owned business D. novelty firm
B
A financial plan for the future based on a single level of operations is called a(n): A. balance sheet. B. budget. C. income statement. D. statement of cash flows.
B
A nation where industrialization is the major force providing jobs, revenues and taxes, and where minimizing costs while maximizing productivity is a major goal is a(n): A. factor-driven economy. B. efficiency-driven economy. C. innovation-driven economy. D. effectiveness-driven economy.
B
A(n) _____ is a one-page document on letterhead that introduces the business plan and owner to the recipient and indicates why the recipient is being asked to read the plan. A. executive summary B. cover letter C. appendix D. title page
B
In the case of existing customers, _____ gives the information on the date and type of contact, since in many sales situations, it can take repeated contacts before a sale is made. A. channel data B. performance data C. intercommunication data D. sales data
B
Effectuation refers to: A. the degree of attention a target market pays to an idea or organization. B. an approach used to create alternatives in uncertain environments. C. transforming a high-growth venture into a small business. D. a process of a person becoming an owner by inheriting or getting a stake in a family business.
B
From an entrepreneur's perspective, marketing is all about connecting your customer to your product or service. The first step in this process is: A. connecting the two through price. B. connecting the two through the value proposition. C. connecting the two through promotion. D. connecting the two through product placement.
B
Greg has a press release for his new product that he wants to broadcast on television. His press release has a good story and visuals. It also includes content that illustrates broad cultural themes. Which of the following is Greg most likely to generate through the press release? A. Public recognition B. Public interest C. Public importance D. Issue recognition
B
High-growth ventures: A. use imitation as their metastrategy. B. start small but are intended to grow rapidly. C. cannot include a team of partners. D. do not delegate tasks.
B
Identify the type of service location in which face-to-face meetings with clients are infrequent. A. Mutually accessible location B. Remote location C. The client's location D. The competitor's location
B
In _____, an advertisement is placed in a magazine, newspaper, radio, billboard, or television and includes an order blank with a phone number, e-mail, or snail-mail address with the intent of having customers place immediate orders. A. telemarketing B. direct response advertising C. guerilla marketing D. direct selling
B
In a _____ layout, the store is laid out in sections with aisles that angle or meander through the store. A. production line B. free-form C. grid D. process
B
In factor-driven economies: A. entrepreneurship levels are in the middle range. B. entrepreneurship levels are very high. C. entrepreneurship levels are very low. D. entrepreneurship is not given any consideration.
B
In personal selling, _____ means cleaning up the list to remove potential clients that are unable or unlikely to buy a business owner's product. A. prospecting B. prequalifying C. polarizing D. closing
B
John owns a small business that does computer servicing. Which of the following would represent boundary as mentioned in the BRIE model in John's computer servicing business? A. The employees that work under John B. The office in which John works C. The money earned by John from the business D. The desire to expand the business to writing software
B
Marcie works at a public library and she is responsible for purchasing all audiobooks for the library. Marcie reads reviews of the titles from the available monthly circulars, choosing the titles she would like to add to the collection. Marcie then sends the order to the technical services department where Linda places the order. In this case Linda is playing the customer role of _________. A. decision maker B. purchaser C. influencer D. end user
B
Proximity refers to: A. a concept in public interest which alludes to events with a broad appeal within the market or population. B. a concept in public recognition which alludes to how closet the issue being discussed is to you, your family or business. C. a concept in public interest which alludes to the graphic interest held by an event. D. a concept in public recognition which alludes to the fit of the topic to current fashion or public interest.
B
Small businesses differ from high-growth ventures in that in small businesses: A. the focus is on effectiveness rather than efficiency. B. the preferred source of funding is the owner's own money rather than other people's money. C. the delegation of responsibilities is easy and necessary rather than difficult. D. the metastrategy is for novelty rather than imitation.
B
The number of prospects or leads you need to approach in order to make one sale if your _______. A. organic traffic B. conversion rate C. proximity D. customer vector
B
The process of determining the effect of price and quantity changes on revenues and expenses refers to: A. accounting analysis. B. variance analysis. C. pro forma budgeting. D. financial flexibility.
B
The proof of a CRM effort is seen in: A. high levels of cognitive dissonance in customers. B. more tracked prospects making initial purchases. C. low levels of customer loyalty in new customers. D. high levels of inconsistency among customers in terms of experience and belief.
B
The way that newly created goods, services, or firms hurt existing goods, services, or firms is referred to as: A. benchmarking. B. creative destruction. C. service distortion. D. crowdsourcing.
B
Tina runs her consultancy business from her home. Working from home allows her to set her own schedule and take time off at her convenience so that she can be with her family. The fact that Tina gets more time with her family can be categorized as ______ reward. A. income B. flexibility C. growth D. credit
B
Which of the following is a characteristic feature of sales packets? A. They are usually large enough to read by passing traffic. B. They provide potential customers an education in a firm's product or service. C. They generally consist of pens or small calendars which are printed with the name and slogan of the company. D. They are generally hand-written.
B
Which of the following is a characteristic feature of sales packets? A. They are usually large enough to read by passing traffic. B. They provide potential customers an education in a firm's product or service. C. They generally consist of pens or small calendars which are printed with the name and slogan of the company. D. They are generally hand-written.
B
Which of the following is a myth about small businesses? A. That failed entrepreneurs can succeed if they try again B. That a small business will never have enough financing C. That students have skills to start small businesses D. That small businesses can start during recession
B
Which of the following is a reward universally mentioned by entrepreneurs? A. Peer admiration B. Personal growth C. Political power D. Industry recognition
B
Which of the following is a type of informational plan that solicits information on customer interests? A. Invention plan B. Proof-of-concept website C. Private placement memorandum D. Operational plan
B
Which of the following is an example of a high customer contact business? A. Manufacturing businesses B. Legal offices C. Business incubators D. Remote location services
B
_____ advertisements provide both geographic and demographic segmentation with a highly distracted audience. A. Television B. Radio C. Magazine D. Newspaper
B
Which of the following is true of a high-growth venture? A. It considers sales as more important than marketing. B. Its metastrategy is novelty. C. It focuses more on efficiency than on effectiveness. D. It does not allow for easy delegation of work or responsibilities.
B
Which of the following is true of a private placement memo? A. It provides information to potential licensees. B. It is a complex legal document and should be drafted by a lawyer. C. It is a special form of informational plan posted on the Internet. D. It is designed to be used internally for management purposes.
B
Which of the following is true of cognitive dissonance? A. It is the consistency between experience and belief. B. It happens frequently especially with more expensive items. C. It almost always happens with purchases that are not considered risky. D. It is a doubt that occurs before making a purchase.
B
Which of the following is true of financial statements? A. The customization of financial reports is illegal in all states. B. The overall content and form of financial statements have been made standard by long usage. C. Bankers and investors are typically new and unacquainted with standard financial statements. D. The differences unique to each industry cannot be represented accurately in financial statements.
B
Which of the following is true of leasing issues? A. Landlords do not have the right to move a business elsewhere at their discretion. B. It costs more to limit the landlord's ability to lease to competing businesses. C. It is irrelevant to look for stores in a landlord's property that match your business hours. D. There are no penalties or problems for rent default.
B
Which of the following is true of leasing issues? A. Landlords do not have the right to move a business elsewhere at their discretion. B. It costs more to limit the landlord's ability to lease to competing businesses. C. It is irrelevant to look for stores in a landlord's property that match your business hours. D. There are no penalties or problems for rent default.
B
Which of the following is true of the growth of a typical traditional small business? A. It tends to quickly level off after the owners operate long enough to learn the basics of making money. B.It levels off after operations settle into a consistent, money-making pattern generating income to provide a living for the owner. C. It grows at rates between 5 to 15 percent a year. D. It grows at rates of 25 percent or more a year.
B
Which of the following provides potential customers an education in a firm's product or service, including stories of customers' whose problems were solved, an FAQ list, as well as a page on the products or services, and a page on the business owner and his or her firm? A. Promotional novelties B. Sales packets C. Business cards D. Brochures
B
Which of the following sets of numbers are the three you need to arrive at your sales forecast? A. Potential Market, hit rate, and cost of sale B. Prospective Customers, hit rate, and sale amount C. Prospective Customers, hit rate, and cost of sale D. Potential Market, hit rate and sale amount
B
Which of the following statements is not true of the product life cycle? A. There are four stages to the product life cycle. B. Stages in the product life cycle are not similar to those of the firm's life cycle. C. Not all products survive the introduction phase of the product life cycle. D. Most small businesses can only afford to launch a product on a small scale.
B
Which of the following statements is true of an elevator pitch? A. It is shorter than a vision statement or tagline. B. Its goal is to sell the idea of a business to another. C. It does not sound like a sales pitch. D. It is a summary of the business, its business models, and immediate goals.
B
Which of the following statements is true of business plans? A. Firms without a business plan are less likely to close down than firms with plans. B. External legitimacy for a firm is best established by creating business plans. C. Typically, the higher-performing firms in any industry tend to be those who do not have any business plan. D. Having a business plan guarantees higher profits.
B
Which of the following statements is true of the company section of a business plan? A. The overall description of the business financials forms the core part of this section. B. The product/service subsection mentions any protection through a proprietary technology. C. The company background subsection includes information about the pilot sales efforts and the floor plans. D. The tagline and elevator pitch of the business form the subsections of company description.
B
Which of the following statements is true of the target market? A. Your Total Available Market (TAM) represents the customers that you think would be interested in your particular product or service. B. Your target market is the same as your Serviceable Obtainable Market (SOM). C. Your Penetrated Market (PM) is your target market divided by your actual number of customers. D. Your Serviceable Available Market (SAM) is never the same as your Total Available Market (TAM).
B
Which of the following terms refers to a concept in public importance which alludes to the degree to which the issue is immediate in its impact? A. Proximity B. Currency C. Power D. Cultural resonance
B
Which of the following types of entrepreneurship typically concentrates on innovation and customer- focus among all aspects of entrepreneurship? A. Public entrepreneurship B. Corporate entrepreneurship C. Independent entrepreneurship D. Social entrepreneurship
B
While closing a sales call, when a sales person says "I'll just need your credit card for payment," he is using the sales closing technique of _____. A. try-before-you-buy close B. assumptive close C. chances-are close D. urgency close
B
While teaching strategy at Farrell University, Jessica developed an interactive strategy-simulation game to inculcate the concept of strategy to her students. She found that they were able to grasp the concept much better from the game rather than from reading books. For two years Jessica used the game to teach students. Eventually she removed possible glitches and perfected the game. She wanted students at other universities to benefit from the simulation. The result was the launch of Simulate Strategy, Inc. Some of Jessica's students suggested that she create a website for Simulate Strategy, Inc. Her company is fairly new and opening a website immediately would expose her company to customers from around the world. In this scenario, Simulate Strategy is an example of a _____. A. freight forwarder B. born international C. sheltered workshop D. contract manufacturer
B
Wholesalers, retailers, distributors, agents are commonly referred to as ______. A. freight forwarders B. intermediaries C. born internationals D. traffic generators
B
_____ are specialists in export-related activities including tariff schedules, shipping, insurance, packing, transportation arrangements, customs clearing, and other export details. A. Born internationals B. Freight forwarders C. Contract manufacturers D. Traffic generators
B
_____ are the smallest full-time business. A. High-performing small businesses B. Traditional small businesses C. High-growth ventures D. Lifestyle businesses
B
_____ are the terms included in the hidden portions of a web page which are used by search engines to describe a website and evaluate its focus and category placement. A. Domain names B. Keywords C. Search terms D. Embeds
B
_____ is a strategy whose goal is growth, based on selling in areas or to groups previously not served by the business. A. Market penetration B. Market expansion C. Product expansion D. Diversification
B
_____ is a strategy whose goal is growth, based on selling in areas or to groups previously not served by the business. A. Market penetration B. Market expansion C. Product expansion D. Diversification
B
_____ is an aspect of entrepreneurship which looks at a new thing or a new way of doing things. A. Customer-focus B. Innovation C. Creation D. Efficiency
B
_____ uses creative and relatively inexpensive ways such as door-knob hangers, T-shirts, balloons, flyers under windshield wipers to reach customers. A. Direct mail B. Guerilla marketing C. Telemarketing D. Direct sales
B
________ is setting a price at the highest level the market will bear, usually because there is no competition at the time. A. Premium pricing B. Skimming C. Odd-even pricing D. Partitioned pricing
B
________ is setting a price at the highest level the market will bear, usually because there is no competition at the time. A. Premium pricing B. Skimming C. Odd-even pricing D. Partitioned pricing
B
_____ are specialists in export-related activities including tariff schedules, shipping, insurance, packing, transportation arrangements, customs clearing, and other export details. A. Born internationals B. Freight forwarders C. Contract manufacturers D. Traffic generators
B. Freight forwarders
_____ uses creative and relatively inexpensive ways such as door-knob hangers, T-shirts, balloons, flyers under windshield wipers to reach customers. A. Direct mail B. Guerilla marketing C. Telemarketing D. Direct sales
B. Guerilla marketing
While closing a sales call, when a sales person says "I'll just need your credit card for payment," he is using the sales closing technique of _____. A. try-before-you-buy close B. assumptive close C. chances-are close D. urgency close
B. assumptive close
Which of the following is true of leasing issues? A. Landlords do not have the right to move a business elsewhere at their discretion. B. It costs more to limit the landlord's ability to lease to competing businesses. C. It is irrelevant to look for stores in a landlord's property that match your business hours. D. There are no penalties or problems for rent default.
B. It costs more to limit the landlord's ability to lease to competing businesses.
Which of the following is true of cognitive dissonance? A. It is the consistency between experience and belief. B. It happens frequently especially with more expensive items. C. It almost always happens with purchases that are not considered risky. D. It is a doubt that occurs before making a purchase.
B. It happens frequently especially with more expensive items.
Which of the following statements best describes the process of idea screening in new product development? A. It involves specifying the details of each idea's technological feasibility, its cost, how it can be marketed, and its market potential. B. It is the process of selecting the most promising ideas to be further evaluated for feasibility. C. It involves creating the first versions of products called prototypes which are used in further consumer testing. D. It is the process of mass producing a new product so that consumers can avail it.
B. It is the process of selecting the most promising ideas to be further evaluated for feasibility.
Which of the following is a characteristic feature of a message for a target market? A. It is repeated less often. B. It must contain the elements of a product's value proposition. C. It must be abstract. D. It must always be distinctive from target customers.
B. It must contain the elements of a product's value proposition.
_____ are the terms included in the hidden portions of a web page which are used by search engines to describe a website and evaluate its focus and category placement. A. Domain names B. Keywords C. Search terms D. Embeds
B. Keywords
Which of the following is an example of a high customer contact business? A. Manufacturing businesses B. Legal offices C. Business incubators D. Remote location services
B. Legal offices
Which of the following terms refers to the amount of profit an entrepreneur incurs, usually stated as a percentage of the total price? A. Capital B. Margin C. Debt D. Harvest
B. Margin
_____ is a strategy whose goal is growth, based on selling in areas or to groups previously not served by the business. A. Market penetration B. Market expansion C. Product expansion D. Diversification
B. Market expansion
Which of the following is used when selling to existing customers? A. Market expansion B. Market penetration C. Diversification D. Vertical integration
B. Market penetration
The proof of a CRM effort is seen in: A. high levels of cognitive dissonance in customers. B. more tracked prospects making initial purchases. C. low levels of customer loyalty in new customers. D. high levels of inconsistency among customers in terms of experience and belief.
B. more tracked prospects making initial purchases.
Which of the following statements is true about products? A. People such as political candidates and celebrities cannot be considered as products. B. Most of the products sold today are combinations of both goods and services. C. Products in terms of goods are generally less homogeneous than services. D. Products in terms of goods are more inseparable from their providers than services.
B. Most of the products sold today are combinations of both goods and services.
_____ refers to setting a price above that of the competition so as to indicate a higher quality or that a product is a status symbol. A. Penetration pricing B. Premium pricing C. Limit pricing D. Bait pricing
B. Premium pricing
Greg has a press release for his new product that he wants to broadcast on television. His press release has a good story and visuals. It also includes content that illustrates broad cultural themes. Which of the following is Greg most likely to generate through the press release? A. Public recognition B. Public interest C. Public importance D. Issue recognition
B. Public interest
Which of the following provides potential customers an education in a firm's product or service, including stories of customers' whose problems were solved, an FAQ list, as well as a page on the products or services, and a page on the business owner and his or her firm? A. Promotional novelties B. Sales packets C. Business cards D. Brochures
B. Sales packets
Which of the following forms of direct marketing is the most expensive? A. Direct sales B. Telemarketing C. Direct mail D. Guerilla marketing
B. Telemarketing
Which of the following is a characteristic feature of sales packets? A. They are usually large enough to read by passing traffic. B. They provide potential customers an education in a firm's product or service. C. They generally consist of pens or small calendars which are printed with the name and slogan of the company. D. They are generally hand-written.
B. They provide potential customers an education in a firm's product or service.
Which of the following terms refers to small business owners' unique selling points that will be used to differentiate their products and/or services from those of the competition? A. Sales lead B. Value proposition C. Trendiness D. Segmentation
B. Value proposition
Proximity refers to: A. a concept in public interest which alludes to events with a broad appeal within the market or population. B. a concept in public recognition which alludes to the impact level of the issue being discussed. C. a concept in public interest which alludes to the graphic interest held by an event. D. a concept in public recognition which alludes to the fit of the topic to current fashion or public interest.
B. a concept in public recognition which alludes to the impact level of the issue being discussed.
While teaching strategy at Farrell University, Jessica developed an interactive strategy-simulation game to inculcate the concept of strategy to her students. She found that they were able to grasp the concept much better from the game rather than from reading books. For two years Jessica used the game to teach students. Eventually she removed possible glitches and perfected the game. She wanted students at other universities to benefit from the simulation. The result was the launch of Simulate Strategy, Inc. Some of Jessica's students suggested that she create a Web site for Simulate Strategy, Inc. Her company is fairly new and opening a Web site immediately would expose her company to customers from around the world. In this scenario, Simulate Strategy is an example of a _____. A. freight forwarder B. born international C. sheltered workshop D. contract manufacturer
B. born international
The prices of chewing gums, candy bars are traditionally fixed at 50 cents; this limits the industry from raising its prices beyond a certain level. This pricing is an example of _____. A. odd-even pricing B. customary pricing C. premium pricing D. reference pricing
B. customary pricing
In _____, an advertisement is placed in a magazine, newspaper, radio, billboard, or television and includes an order blank with a phone number, e-mail, or snail-mail address, using which customers can place immediate orders. A. telemarketing B. direct response advertising C. guerilla marketing D. direct selling
B. direct response advertising
In a _____ layout, the store is laid out in sections with aisles that angle or meander through the store. A. production line B. free-form C. grid D. process
B. free-form
Purchasing a car with a warranty is most likely to be an example of a _____. A. pure good B. good-dominated product C. pure service D. hybrid good
B. good-dominated product
Wholesalers, retailers, distributors, agents are commonly referred to as ______. A. freight forwarders B. intermediaries C. born internationals D. traffic generators
B. intermediaries
A _____ is a document issued by a bank that guarantees a buyer's payment for a specified period of time upon compliance with specified terms. A. documentary draft B. letter of credit C. mail order D. bill of lading
B. letter of credit
The strategy of pricing toward the low end of the competition in order to take market share from the competition becomes most popular as a product reaches the _____ phase of the product life cycle. A. growth B. maturity C. decline D. introduction
B. maturity
In bonus pack pricing strategy: A. lower prices are charged at certain times to encourage customers to come during slack periods. B. more than one unit of the same product are combined and sold at a low price. C. products are sold at different price points to attract the low-, mid-, and high-end customers. D. the base item is sold at a low price and the necessary supplies are sold for a high price.
B. more than one unit of the same product are combined and sold at a low price.
Happy hours in amusement parks, movies, and restaurants are examples of _____. A. prestige pricing B. off-peak pricing C. loyalty programs D. random discounting
B. off-peak pricing
In the case of existing customers, _____ gives the information on the date and type of contact, since in many sales situations, it can take repeated contacts before a sale is made. A. channel data B. performance data C. intercommunication data D. sales data
B. performance data
In personal selling, _____ means cleaning up the list to remove potential clients that are unable or unlikely to buy a business owner's product. A. prospecting B. prequalifying C. polarizing D. closing
B. prequalifying
While developing a new product, in the product development stage, the first versions of products are used in further consumer testing. These first versions of products are called _____. A. pure goods B. prototypes C. me-too products D. hybrids
B. prototypes
The group of people on which a marketer focuses promotion and sales efforts is called a _____. A. focus group B. target market C. strategic group D. sales pitch
B. target market
The entire bundle of products, services, and meanings of one's offering; including extras like service, warranty, or delivery, as well as what the product means to the customer refers to _____. A. augmented product B. total product C. hybrid product D. pure good
B. total product
_____ is the practice of trading goods and services without the use of money.
Barter
False
Being a small business makes managing organizational culture harder than in larger businesses
"The Kent Automobile Company segments its cars as sports cars, safety cars, capacity cars, and premium cars based on the gains or the utility consumers seek. Which of the following segmentation types has the Kent Automobile Company adopted?"
Benefit
A McDonald's franchise includes the right to use McDonald's many trade names, specifications of the product to be sold, operating methods, marketing plan, and national advertising. Franchisees pay to the franchiser both an up-front fee to obtain the franchise rights and a percentage of gross sales. what type of franchising does this situation illustrate?
Business format franchising. Page: 173
Aaron, a businessman, has a method of keeping track of accounts receivable by sorting them into groups of those that are 30, 60, 90, and over 90 days past due. Which of the following actions will the collection agency which buys the delinquent account from Aaron do? A. Collect the entire amount owed and return it to Aaron. B. Sell it back to Aaron after collecting the entire amount owed. C. Collect the entire amount owed and keep all the money it obtains. D. Take mild actions and collect a token amount.
C
According to the BRIE model, which of the following falls under the boundary category? A. The financial resources of a company B. The desire to start a business C. An e-mail address of the company D. A product or service offered by the company
C
According to the U.S. Small Business Administration, small businesses generate _____ times the number of patents per employee than do big businesses. A. 35.5 B. 2.5 C. 16.5 D. 50.5
C
Anna helps brides-to-be choose wedding gowns that best suit their requirements and budget, and also helps them with where they can find the right dress. She has made her home her virtual office; she does not require external financing. Anna is using _____ to run her small business. A. crowdfunding B. franchising C. bootstrapping D. crowdsourcing
C
Due to which of the following characteristics a news story is most likely to get public importance? A. Trendiness B. Proximity C. Currency D. Cultural resonance
C
Giveaways, samples, and tastings are examples of ________ techniques used in sales promotion. A. contest B. loyalty C. introductory D. discounting
C
Giveaways, samples, and tastings are examples of ________ techniques used in sales promotion. A. contest B. loyalty C. introductory D. discounting
C
Identify the layout that is very efficient and organized but lacks some visual impact. A. Production line layout B. Process layout C. Grid layout D. Free-form layout
C
If business owners track sales by purchase basis: A. they can minimize the cognitive dissonance experienced by their customers. B. they can predict the performance of their competitors. C. they can easily decide which marketing efforts to continue. D. they can find the defects in their products.
C
In terms of new jobs, which of the following is true of a small business? A. It does not employ people looking for part-time work. B. It is of no importance to existing jobs. C. It offers jobs to people with atypical work histories. D. It pays taxes on behalf of the people it hires.
C
In the BRIE model, a business name or government registration, a phone or e-mail address dedicated to the business, or a specific location for the firm in a home, commercial space, or on the Internet represents: A. exchange. B. resource. C. boundary. D. intention.
C
Innovation-driven economies: A. are those where entrepreneurship becomes a key way to build the middle class. B. are nations where industrialization is becoming the major force providing jobs, revenues, and taxes. C. are focused on high-value-added manufacturing but are marked by a very large service sector. D. are those where entrepreneurship is essential to build personal wealth and break the cycle of low-wage jobs.
C
Lenders use operating income as: A. a measure of how well management achieved sales. B. an indication of future sales. C. a measure of how much debt a business can support. D. an indication of a business's ability to control costs.
C
Marketing data gathered by simple observation - seeing what customers do, rather than asking them is: A. secondary research. B. a focus group. C. ethnographic research. D. branching.
C
Mentions of a company or products in the media for which a firm did not pay is referred to as _____. A. buzz marketing B. sales promotion C. free ink D. viral marketing
C
Putting two or more of the same or different products or services together and selling for a price somewhat under the products' individual prices is _________. A. partitioned pricing B. product line pricing C. bundling D. prestige pricing
C
Sales promotion techniques used to introduce your brand to customers without an immediate call to purchase are _____________ techniques. A. loyalty B. discounting C. contest D. introductory
C
Sales promotion techniques used to introduce your brand to customers without an immediate call to purchase are _____________ techniques. A. loyalty B. discounting C. contest D. introductory
C
Serial entrepreneurs Steve Blank and Bob Dorf came up with a more inclusive approach than the standard marketing funnel. Which of the following is not one of the major goals of their new approach? A. Grow customers B. Get customers C. Identify customers D. Keep customers
C
Serial entrepreneurs Steve Blank and Bob Dorf came up with a more inclusive approach than the standard marketing funnel. Which of the following is not one of the major goals of their new approach? A. Grow customers B. Get customers C. Identify customers D. Keep customers
C
The makers of baby wipes began advertising their products for adult use, for everyone's use. This is an example of a product during which stage of the product life cycle? A. The decline stage B. The introduction stage C. The maturity stage D. The growth stage
C
Which of the following aspects of entrepreneurship refers to being in-tune with one's market? A. Efficiency B. Creation C. Customer-focus D. Growth
C
Which of the following categories does the majority of small businesses fall under? A. High-growth ventures B. High-performing small businesses C. Lifetime/Part-time firms D. Traditional small business
C
Which of the following forms of direct response advertising allows very specific targeting and is appropriate for business-to-business selling? A. Television B. Radio C. Magazine D. Billboard
C
Which of the following forms of direct response advertising allows very specific targeting and is appropriate for business-to-business selling? A. Television B. Radio C. Magazine D. Billboard
C
Which of the following is a characteristic feature of brochures and flyers? A. They contain the annual balance sheet of the company. B. They include stories of customers whose problems were solved. C. They give more information about a firm and its products than business cards. D. They provide word-of-mouth advertising.
C
Which of the following is a characteristic of a high-growth venture? A. It pursues low levels of professionalization. B. It levels off after operations settle into a consistent, money-making pattern. C. It aims to achieve growth rates of 25 percent or more a year. D. Its success is defined by sales of between $100,000 and $1,000,000 annually.
C
Which of the following is a characteristic of a lifestyle firm? A. It starts small and grows very rapidly to become a big business. B. It represents about 20 percent of all businesses. C. It typically has sales of $25,000 a year or less. D. It aims to achieve growth rates of 25 percent or more a year.
C
Which of the following is a component of the AIDA formula that aims to hook people to the press release? A. Action B. Desire C. Interest D. Attitude
C
Which of the following is a difficulty that arises in understanding and interpreting the income statements? A. There is difficulty deciding whether to report the revenues. B. There is difficulty deciding what should be considered as expenses. C. There are disputes over when to recognize revenues. D. There are disputes over the preferred tax rate to incorporate.
C
Which of the following is a reward that is rarely mentioned by entrepreneurs? A. To have a chance to build great wealth B. To have greater flexibility for personal and family life C. To continue a family tradition D. To develop an idea for a product
C
Which of the following is an advantage of personal selling? A. It helps in easily establishing and promoting a favorable opinion by the media. B. It helps business owners in generating finance for their business. C. It allows business owners to find out the buyers' main concerns and address them. D. It increases business owners' publicity.
C
Which of the following is an advantage of personal selling? A. It helps in easily establishing and promoting a favorable opinion by the media. B. It helps business owners in generating finance for their business. C. It allows business owners to find out the buyers' main concerns and address them. D. It increases business owners' publicity.
C
Which of the following is most likely to be the key information that joint venture partners seek in a business plan? A. Asset or collateral base B. Cash flow and cash cycle C. Intellectual property protection D. Stability of firm
C
Which of the following is the key to customer relationship management (CRM)? A. Displaying accurate financial records in annual reports B. Educating customers about a new product or service C. The data on current or prospective customers D. The press release and press kit
C
Which of the following is true of a small business? A. Its preferred funding source is other people's money. B. It sells more when it is facing bankruptcy. C. It considers sales as more important than marketing. D. It focuses more on effectiveness than on efficiency.
C
Which of the following is true of a traditional small business? A. It is usually a multi-site business. B. It generally has sales between $100,000 and $1,000,000 depending on the industry. C. It defines its schedules based on customer needs. D. It follows a continuous growth curve.
C
Which of the following is true of customer retention? A. It focuses on increasing customers' cognitive dissonance. B. It focuses on satisfying prospective customers to make a sale successful. C. It handles problems that crop up after a sale. D. The CRM aspect of customer retention is based on short-term monitoring of customers.
C
Which of the following is true of customer retention? A. It focuses on increasing customers' cognitive dissonance. B. It focuses on satisfying prospective customers to make a sale successful. C. It handles problems that crop up after a sale.
C
Which of the following is true of follow-up? A. It increases cognitive dissonance in customers. B. It is typically done only once after a sale. C. Electronic approaches to follow-up dramatically lower the cost of marketing efforts. D. It refers to business owners doing what they said they would do.
C
Which of the following is true of follow-up? A. It increases cognitive dissonance in customers. B. It is typically done only once after a sale. C. Electronic approaches to follow-up dramatically lower the cost of marketing efforts. D. It refers to business owners doing what they said they would do.
C
Which of the following is true of high customer contact businesses? A. Remote location services are examples of high customer contact businesses. B. Traffic generators reduce customer traffic to the target market area. C. Businesses providing a strong contrast to existing competition in the same area increase customer traffic. D. Customer ease is not critical in high customer contact businesses.
C
Which of the following is true of payment procedures? A. A letter of credit can be exercised only with specified shipping documents. B. Providing credit to customers is a risk to the customers. C. Up-front cash payment is a risk to the customers. D. A documentary draft involves only two parties—the company and the customer.
C
Which of the following layouts is more typically found in upscale department stores? A. Grid layout B. Production line layout C. Free-form layout D. Process layout
C
Which of the following layouts is more typically found in upscale department stores? A. Grid layout B. Production line layout C. Free-form layout D. Process layout
C
Which of the following reconciles the net increase or decrease with the beginning cash balance and the ending cash balance? A. Net effect of foreign exchange rates B. Noncash investing and financing C. Net change in cash balance D. Noncash operating activities
C
Which of the following statements about handling an early termination is true? A. The bailout clause does not help in handling easy terminations if sales do not meet an agreed-to level. B. It is good to set up a long-term lease initially. C. A "cap" or limit on how long to continue paying rent aids in easy lease termination. D. If business falters, there is no obligation to continue paying monthly rent.
C
Which of the following statements is not true of a product in the decline stage of the product life cycle? A. One reason for the decline of a product may come from the introduction of new technology. B. Some products' decline is permanent. C. Characteristics of the decline stage differ for each product. D. One reason for the decline of a product may be caused by a shift in consumer preferences.
C
Which of the following statements is not true of creating a customer profile? A. The process for a start-up should begin with face-to-face interviews with potential customers. B. It should be typically applied at the decline stage of the product life cycle Analyze the results of interviews by first looking at the problems your interviewees were trying to solve. C. The goal of these interviews is to get as many responses as possible. D. The hardest part of preparing the interview is figuring out what the problem context is.
C
Which of the following statements is true of a business plan presentation? A. Typically, a business plan presentation does not follow the content of a business plan. B. The content of a business plan presentation remains the same for different audiences. C. Handouts are mailed or distributed when the business plan changes frequently. D. Listeners check presentations for the content and not for the professionalism and passion of the presenter.
C
Legal business organizations are artificial entities that exist separately from the owners.
True. Page: 171
Which of the following statements is true of a vision statement? A. An overview of a business and its immediate goals form a vision statement. B. A vision statement describes a firm's goal and its competitive advantages. C. A tagline or a slogan is a good way to present vision statements. D. A vision statement gives more detail about a business than an executive summary.
C
Which of the following statements is true of an executive summary? A. It is written in an informal style for investors and lawyers. B. It gives fewer details about the business than an elevator pitch. C. It is the single most widely distributed written description of a business. D. It is typically put at the end of a business plan.
C
Which of the following statements is true of catalogs? A. Catalogs do not target particular types of consumers. B. Creating and disseminating catalogs online increases company costs. C. Most part-time entrepreneurs typically use existing catalogs for their products. D. Catalogs do not focus on any particular types of products.
C
Which of the following statements is true of low customer contact businesses? A. Customer access is relatively important when compared to high customer contact businesses. B. Some examples of low customer contact businesses are restaurants and dry cleaners. C. Empowerment zones offer businesses low-cost space and tax advantages. D. Business incubators are expensive and offer limited small business support services.
C
Which of the following statements is true of low customer contact businesses? A. Customer access is relatively important when compared to high customer contact businesses. B. Some examples of low customer contact businesses are restaurants and dry cleaners. C. Empowerment zones offer businesses low-cost space and tax advantages. D. Business incubators are expensive and offer limited small business support services.
C
Which of the following statements is true of marketing research? A. Marketing research can falls into one of three categories. B. Marketing research can verify the size of the potential market but does not tell you where potential customers are likely to shop. C. Marketing research can tell you what customers consider a reasonable price. D. Marketing research cannot verify the size of the potential market.
C
Which of the following statements is true of the financial statements and reports found in a business plan? A. The financial statements include the balance sheet, cash flow, and expense accounts. B. The assumptions accompanying the financial statements are not as important as other components of the financials. C. For all types of business plans, a set of financial reports or projections are the central component of the Appendix. D. The assumptions are simply what you assume will happen in the first year.
C
While teaching strategy at Farrell University, Jessica developed an interactive strategy-simulation game to help her students understand its concepts. She found that they were able to grasp the concept much better from the game rather than from reading books. For two years, Jessica used the game to teach students. Eventually she removed possible glitches and perfected the game. She wanted students at other universities to benefit from the simulation. The result was the launch of Simulate Strategy, Inc. Given that Jessica has a very limited budget, which of the following forms of direct mail will be most appropriate for her to adopt? A. Brochure B. Direct response advertising C. E-mail D. Telemarketing
C
_____ are usually produced for pennies in quantity. A. Sales packets B. Signs C. Promotional novelties D. Marketing kits
C
_____ is often used to support the corporate identity and value propositions that are established through public relations efforts. A. Personal selling B. A corporate newsletter C. Advertising D. A press kit
C
_____ is the degree of attention a target market pays to an idea or organization. A. Crowdfunding B. Effectuation C. Mindshare D. Crowdfunding
C
_____ tend to level off after success defined by sales of between $100,000 and $1,000,000, depending on the industry. A. Lifestyle firms B. Traditional small businesses C. High-performing small businesses D. High-growth ventures
C
________ is a form of communication that encourages the customer to act immediately, such as coupons, sales, or contests. A. Price lining B. Traffic generators C. Sales promotion D. Price gouging
C
ruly entrepreneurial businesses are characterized by: A. the franchise they are associated with. B. the degree to which their products are imitative. C. the novelty in their products, services, or business models. D. the ease with which their product is accepted by the buyers.
C
Which of the following statements about handling an early termination is true? A. The bailout clause doesn't not help in handling easy terminations if sales do not meet an agreed-to level. B. It is good to set up a long-term lease initially. C. A "cap" or limit on how long to continue paying rent aids in easy lease termination. D. If business falters, there is no obligation to continue paying monthly rent.
C. A "cap" or limit on how long to continue paying rent aids in easy lease termination.
Which of the following is true of high customer contact businesses? A. Remote location services are examples of high customer contact businesses. B. Traffic generators reduce customer traffic to the target market area. C. Businesses providing a strong contrast to existing competition in the same area increase customer traffic. D. Customer ease is not critical in high customer contact businesses.
C. Businesses providing a strong contrast to existing competition in the same area increase customer traffic.
_____ is described as setting the price for an item relatively low and then charging much higher prices for the expendables it uses. A. Bait pricing B. External reference pricing C. Captive pricing D. Odd-even pricing
C. Captive pricing
Which of the following statements is true about coupons? A. Coupons are delivered more through the Internet than in newspapers. B. Coupons fail to serve an advertising purpose. C. Coupons help customers remember the promoted product favorably. D. Coupons are ineffective in attracting people to try new products.
C. Coupons help customers remember the promoted product favorably.
Due to which of the following characteristics a news story is most likely to get public importance? A. Trendiness B. Proximity C. Currency D. Cultural resonance
C. Currency
While teaching strategy at Farrell University, Jessica developed an interactive strategy-simulation game to help her students understand its concepts. She found that they were able to grasp the concept much better from the game rather than from reading books. For two years, Jessica used the game to teach students. Eventually she removed possible glitches and perfected the game. She wanted students at other universities to benefit from the simulation. The result was the launch of Simulate Strategy, Inc. Given that Jessica has a very limited budget, which of the following forms of direct mail will be most appropriate for her to adopt? A. Brochure B. Direct response advertising C. E-mail D. Telemarketing
C. E-mail
Which of the following is true of follow-up? A. It increases cognitive dissonance in customers. B. It is typically done only once after a sale. C. Electronic approaches to follow-up dramatically lower the cost of marketing efforts. D. It refers to business owners doing what they said they would do.
C. Electronic approaches to follow-up dramatically lower the cost of marketing efforts.
Which of the following layouts is more typically found in upscale department stores? A. Grid layout B. Production line layout C. Free-form layout D. Process layout
C. Free-form layout
Which of the following stages of new product development typically involves specifying the details of each idea's technological feasibility, its cost, how it can be marketed, and its market potential? A. Idea generation B. Market introduction C. Idea evaluation D. Test marketing
C. Idea evaluation
Which of the following pricing strategies is considered the most aggressive from the competition point of view? A. Offering a sale on merchandise B. Offering a rebate or a discount coupon to promote a product C. Indulging in a price war D. Pricing a product higher than the industry average
C. Indulging in a price war
Which of the following is a component of the AIDA formula that aims to hook people to the press release? A. Action B. Desire C. Interest D. Attitude
C. Interest
Which of the following statements is true of telemarketing? A. Outbound telemarketing is the result of direct response advertising. B. It is the least expensive form of direct marketing. C. It is found to be a very annoying form of marketing to most customers. D. Inbound telemarketing involves the company calling customers.
C. It is found to be a very annoying form of marketing to most customers.
Which of the following statements is true of price skimming? A. It should be followed when there are many substitutes for a product. B. It should be typically applied at the decline stage of the product life cycle. C. It is not a long-term strategy for businesses to follow. D. It helps establish a barrier to the entry of competitors.
C. It is not a long-term strategy for businesses to follow.
Which of the following forms of direct response advertising allows very specific targeting and is appropriate for business-to-business selling? A. Television B. Radio C. Magazine D. Billboard
C. Magazine
Which of the following terms refers to a rule of thumb about how many prospective customers it takes to find one who will actually make a purchase? A. Lead qualification B. Value proposition C. Marketing funnel D. Segmentation
C. Marketing funnel
Which of the following statements is true of catalogs? A. Catalogs do not target particular types of consumers. B. Creating and disseminating catalogs online increases company costs. C. Most part-time entrepreneurs typically use existing catalogs for their products. D. Catalogs do not focus on any particular types of products.
C. Most part-time entrepreneurs typically use existing catalogs for their products.
_____ refers to the highest price of a product that will produce the desired level of sales in the intended market. A. Marginal price B. External reference price C. Optimum price D. Reserve price
C. Optimum price
Which of the following strategies is central to the process of upselling? A. Market penetration B. Market expansion C. Product expansion D. Diversification
C. Product expansion
_____ are usually produced for pennies in quantity. A. Sales packets B. Signs C. Promotional novelties D. Marketing kits
C. Promotional novelties
Shop Sure Inc. sells five bars of bathing soap for the price of four and three bottles of room freshener for the price of two. This is an example of _____. A. price skimming B. premium pricing C. bonus-pack pricing D. price signaling
C. bonus-pack pricing
Blue Moss Inc. ensures that its detergent brand "Pure Plus" is always placed next to competitors' detergents in supermarkets. This is a strategy the company uses to imply that the same quality product is available at a better bargain. Which of the following pricing strategies is being used by Blue Moss Inc.? A. Price signaling B. Price skimming C. Reference pricing D. Customary pricing
C. Reference pricing
Which of the following is most likely to be an example for an elastic product? A. Staple foods B. Gasoline C. T-shirts D. Basic utilities
C. T-shirts
Which of the following is the key to customer relationship management (CRM)? A. Displaying accurate financial records in annual reports B. Educating customers about a new product or service C. The data on current or prospective customers D. The press release and press kit
C. The data on current or prospective customers
Which of the following statements is true about pure services? A. They are separable from consumption. B. They are tangible. C. They are heterogeneous. D. They are nonperishable.
C. They are heterogeneous
Which of the following is the biggest problem with simulated test markets? A. They cannot be computer-generated. B. They make it easy for competitors to "steal" one's ideas. C. They do not always reflect actual buying behavior. D. They can be used only in the commercialization stage and not in the product development stage.
C. They do not always reflect actual buying behavior
Which of the following is a characteristic feature of brochures and flyers? A. They contain the annual balance sheet of the company. B. They include stories of customers whose problems were solved. C. They give more information about a firm and its products than business cards. D. They provide word-of-mouth advertising.
C. They give more information about a firm and its products than business cards.
Which of the following is true of payment procedures? A. A letter of credit can be exercised only with specified shipping documents. B. Providing credit to customers is a risk to the customers. C. Up-front cash payment is a risk to the customers. D. A documentary draft involves only two parties—the company and the customer.
C. Up-front cash payment is a risk to the customers.
A(n) _____ typically means the core product plus features that tend to differentiate the product from competition. A. pure good B. hybrid product C. augmented product D. me-too product
C. augmented product
The new NAICS covers more industries than the SIC.
True. Page: 189
A(n) _____ refers to a new firm that opens a Web site immediately, thus being exposed to customers from around the world. A. freight forwarder B. sheltered workshop C. born international D. contract manufacturer
C. born international
A _____ is a form of direct mail. A. door-to-door sale B. party sale C. brochure D. vending machine
C. brochure
Dividing the market into different segments by income, age, or religion constitutes segmenting the market _____. A. geographically B. economically C. demographically D. culturally
C. demographically
The research and development team of Leonide Inc. has generated five different product ideas. All five ideas are being rated against each other on their characteristics such as product uniqueness, idea profitability, protectable intellectual property, and product team quality. Based on their ranking in this stage, only three ideas will make it to the immediate next step which will be the stage of _____. A. idea generation B. commercialization C. feasibility study D. market introduction
C. feasibility study
Mentions of a company or products in the media for which a firm did not pay is referred to as _____. A. buzz marketing B. sales promotion C. free ink D. viral marketing
C. free ink
The first time Jena visited Blue Corals Inn, a restaurant in her neighborhood, she was delighted with the food and service quality. However, the next time she dined at the same place, the restaurant's food and service seemed to have lost its quality. This scenario best illustrates the _____ characteristic of services. A. perishability B. tangibility C. heterogeneity D. absorptivity
C. heterogeneity
In new product development process, the product development stage typically involves: A. testing the feasibility of product ideas. B. creating a marketing plan for the final product. C. introducing product prototypes to test markets. D. commercializing the new product.
C. introducing product prototypes to test markets.
In _____, several different outlets such as a website, direct mail, and traditional retailing are used to reach customers. A. guerilla marketing B. Internet marketing C. multichannel marketing D. direct sales
C. multichannel marketing
Harry ordered a television online for $800, he was asked to pay $100 toward shipping charges, $50 as installation charges, and another $100 for extended warranty. This example best illustrates _____. A. bait pricing B. internal reference pricing C. partitioned pricing D. multipack pricing
C. partitioned pricing
Product expansion is a strategy whose goal is growth, based on: A. selling more of the firm's product or service to the existing customer base. B. selling in areas or to groups previously not served by the business. C. selling existing customers a product or service they have never bought before. D. adding new products or services to the firm's existing collection of offerings.
C. selling existing customers a product or service they have never bought before.
Penetration pricing refers to: A. charging the absolute highest possible price due to inelastic demand. B. charging different prices to different groups to attract a different demographic. C. setting a low price in order to get market share. D. setting a high price to imply that a product is a status symbol.
C. setting a low price in order to get market share.
If business owners track sales by purchase basis: A. they can minimize the cognitive dissonance experienced by their customers. B. they can predict the performance of their competitors. C. they can easily decide which marketing efforts to continue. D. they can find the defects in their products.
C. they can easily decide which marketing efforts to continue.
"Ivory Isles Resort sets a low base price of $250 for its rooms. This appears to be a great bargain for vacationers looking for resorts in the 5-star segment. However, the customers have to pay additional charges for using services such as the casino, spa, hot pool, gym, and the lounge. According to this information, which of the following pricing strategies is used by Ivory Isles? "
Captive pricing
Which of the following is most likely to increase the odds of successes for a start-up?
Choosing a business that produces high margins. High margins, the amount by which sales prices exceed product costs, provide a buffer for lots of mistakes. The single greatest hurdle to a successful start-up is obtaining and maintaining sufficient cash to support both operations and growth. Page: 161
"Tammy has just opened a donut shop called The Rabbit Hole. Given that The Rabbit Hole is in its start-up phase, which of these would be Tammy's immediate financial management need?"
Conserving what little money the business has
A. benchmarking B. bootstrapping C. outsourcing** D. licensing
Contracting with people or companies outside one's business to get work done for the business is known as:
what are the cost benifits
Cost benefits include: lower costs, scale savings, scope savings, learning, and organizational practices. Page: 196
Identify the managerial accounting technique which looks at the fixed and variable costs of a business to arrive at a number of unit sales to maximize gains.
Cost-volume-profit analysis
_____ is a type of CRM report that segments by customer or customer group on purchases or dates of purchase.
Customer vector
A _____ will warehouse products, pack and ship them, and send an automated e-mail to customers to let them know that the product is on its way. A. contract manufacturer B. traffic generator C. sheltered workshop D. fulfillment center
D
A business owned by an individual or a little group is referred to as a(n): A. corporate chain. B. conglomerate. C. concern. D. independent small business.
D
A(n) _____ refers to a middleman business which represents a manufacturer's products or services to other business-to-business middleman firms. A. retailer B. wholesaler C. manufacturer D. agent
D
A(n) _____ refers to a set of goods or services that consists of only one or a few items. A. in-process inventory B. macro inventory C. just-in-time inventory D. micro inventory
D
A(n) _____ refers to a set of goods or services that consists of only one or a few items. A. in-process inventory B. macro inventory C. just-in-time inventory D. micro inventory
D
According to the BRIE model, _____ sets up a business as a firm. A. intention B. exchange C. franchise D. boundary
D
According to the BRIE model, which of the following is true of a resource? A. It includes a business name or government registration. B. It refers to moving goods or services to others for money. C. It is the most frequently occurring element of the BRIE model. D. It includes the product or service to be offered.
D
An inconsistency between experience and belief refers to: A. value proposition. B. segmentation. C. trendiness. D. cognitive dissonance.
D
Bootstrapping refers to: A. funding a business online through the collective involvement of others who provide loans. B. buying, renting, or leasing a prepackaged business from another company. C. inheriting or being given a stake in a family business. D. using low-cost or free techniques to minimize the cost of doing business.
D
Business owners can figure how to better target ads or promotions to particular types of customers if: A. they track sales of their competitors. B. they identify the defects in their products. C. they use the diversification strategy rather than the product expansion strategy. D. they link sales and purchase basis to the type of customer.
D
Business owners can figure how to better target ads or promotions to particular types of customers if: A. they track sales of their competitors. B. they identify the defects in their products. C. they use the diversification strategy rather than the product expansion strategy. D. they link sales and purchase basis to the type of customer.
D
Closing a sale refers to: A. asking for a referral from a prospective customer. B. being turned down by a prospective customer. C. delaying the decision to make a new product. D. obtaining a commitment from the customer.
D
Diversification is a strategy whose goal is growth, based on: A. selling more of the firm's product or service to the existing customer base. B. selling in areas or to groups previously not served by the business. C. selling existing customers a product or service they have never bought before. D. adding new products or services to the firm's existing collection of offerings.
D
Diversification is a strategy whose goal is growth, based on: A. selling more of the firm's product or service to the existing customer base. B. selling in areas or to groups previously not served by the business. C. selling existing customers a product or service they have never bought before. D. adding new products or services to the firm's existing collection of offerings.
D
High-growth ventures differ from small businesses in that in high-growth ventures: A. the focus is on efficiency rather than effectiveness. B. the preferred source of funding is the owner's own money rather than other people's money. C. the human resource system is personalized rather than professionalized. D. the limitation of growth is dictated by market response rather than the owner's loss of control.
D
If Connie gets her family and friends involved as investors, which of the following is most likely to be their concern? A. Cash flow and cash cycle B. Intellectual property protection C. Monitoring compliance D. Amounts and schedules for returns
D
In _____, products are sold to foreign buyers or distributors without any intermediaries. A. indirect exporting B. freight forwarding C. contract manufacturing D. direct exporting
D
In a _____ layout, material flows in on one side of the operation and continues to the other end of the operation. A. free-form B. process C. grid D. production line
D
In lifestyle firms: A. success is defined by sales of between $100,000 and $1,000,000. B. schedules are defined by customer needs. C. the income generated usually provides a living for the owner and family. D. growth tends to quickly level off.
D
In personal selling, _____ means finding out about the clients before approaching them. A. evaluation B. closing C. prospecting D. preparation
D
Paying for a local organization's needs in exchange for recognition is referred to as _____. A. publicity B. donation C. personal selling D. sponsorship
D
Putting together a list of prospective clients is called _____. A. preparing B. presenting C. formulating D. prospecting
D
Services at a _____ often have too much specialized equipment to be readily transported and a need for at least some client involvement. A. client's location B. competitor's location C. remote location D. mutually accessible location
D
Setting the price for an item relatively low and then charging much higher prices for the expendables it uses is called ________. A. price lining B. premium pricing C. price skimming D. captive pricing
D
The primary purpose of managerial accounting is to ________. A. help managers perform the control function B. aid in staffing decisions C. make manager's lives easier D. support good decision making
D
The sales plan of a marketing strategy focuses on: A. the longer-term partnerships to be sought. B. the new markets to be pursued. C. the ways to leverage a firm's assets. D. the day-to-day specifics of how sales are achieved.
D
Trendiness refers to: A. a concept in public interest which alludes to events with a broad appeal within the market or population. B. a concept in public recognition which alludes to how close the issue being discussed is to you, your family or business. C. a concept in public interest which alludes to the graphic interest held by an event. D. a concept in public recognition which alludes to the fit of the topic to current fashion or public interest.
D
Trendiness refers to: A. a concept in public interest which alludes to events with a broad appeal within the market or population. B. a concept in public recognition which alludes to how close the issue being discussed is to you, your family or business. C. a concept in public interest which alludes to the graphic interest held by an event. D. a concept in public recognition which alludes to the fit of the topic to current fashion or public interest.
D
Virtual instant global entrepreneurship refers to: A. the transformation of a high-growth venture into a small business. B. a person becoming an owner by inheriting or getting a stake in a family business. C. the way that newly created goods, services, or firms hurt existing goods, services, or firms. D. a process that uses the Internet to quickly create businesses with a worldwide reach.
D
When your product or service already exists but your firm is the first of its kind in your market, it is considered a(n) _____ business. A. entry-level B. pioneering C. substitutive D. new entrant
D
Which of the following businesses requires a stake in the company and is good for brainstorming with other entrepreneurs? A. Empowerment zone B. Manufacturing business C. Remote location service D. Business incubator
D
Which of the following businesses requires a stake in the company and is good for brainstorming with other entrepreneurs? A. Empowerment zone B. Manufacturing business C. Remote location service D. Business incubator
D
Which of the following is a difference between a small business and a high-growth venture? A For a small business, the preferred funding source is other people's money, whereas for a high-growth venture, it is the owner's own money. B For a small business, the personal control preference is to involve others, whereas a high-growth venture prefers to retain autonomy. C. A small business focuses on effectiveness, whereas a high-growth venture focuses on efficiency. D. A small business grows when necessary, whereas a high-growth venture grows when possible.
D
Which of the following is a disadvantage of leasing? A. It requires a considerably high initial cash outlay than building or buying. B. It is expensive than building or buying a property that are of the same value. C. Lease expenses are not deductible business expenses. D. Renovation options are limited in a leased property.
D
Which of the following is a disadvantage of leasing? A. It requires a considerably high initial cash outlay than building or buying. B. It is expensive than building or buying a property that are of the same value. C. Lease expenses are not deductible business expenses. D. Renovation options are limited in a leased property.
D
Which of the following is an attribute of a high-growth venture? A. Its preferred funding source is the owner's own money. B. Its metastrategy is imitation. C. It grows when necessary. D. It considers delegation essential.
D
A _____ budget is also referred to as a master budget.
comprehensive
Which of the following is most likely to be true regarding customer vector? A. It considerably increases cognitive dissonance. B. It makes it difficult to decide which marketing efforts to continue or expand. C. It helps marketers in identifying prospective customers. D. It helps entrepreneurs decide how to operate several key aspects of their marketing efforts.
D
Which of the following is not one of the three tests of the approach when crafting a customer-focused value proposition? A. How many customer pains can you solve? B. How many customer gains can you provide? C. How closely does your product or service fit the customer's job? D. How does your price compare to competitors' prices?
D
Which of the following is not something a manager needs in order to make good decisions? A. Methods to help compare alternatives. B. Efficient ways to condense information so it is understandable. C. Good information. D. A good support system.
D
Which of the following is true of a franchise? A. It is the international term for all small businesses. B. It is a type of novelty organization. C. It is an organization that provides loans to start small businesses. D. It is a prepackaged business bought, rented, or leased from a company.
D
Which of the following is true of advertising? A. It is the least likely to be used by businesses to convey their message to potential customers. B. It works if an ad's impression is positive even if people do not recall it. C. It works if people recall an ad even though it did not have a positive impact on them. D. It involves presentation of a company's image.
D
Which of the following is true of corporate entrepreneurship? A. It involves the creation of self-sustaining charitable and civic organizations. B. It involves revitalizing government agencies. C. It is a form of entrepreneurship in which people own their own for-profit business. D. It involves bringing new products or services to a market.
D
Which of the following is true of personal selling? A. It involves activities used to establish and promote a favorable opinion by the media. B. It does not allow you to find out the buyers' main concerns. C. It involves entering into a joint venture with a competitor. D. It allows a business owner to be flexible in his or her presentation.
D
Which of the following is true of promotional novelties? A. They explain the competitive strategies of the company to the readers. B. They must be large enough to read by passing traffic. C. They include stories of customers whose problems were solved. D. They are given to key customers or as gifts to employees.
D
Which of the following is true of social entrepreneurship? A. It usually has a lot of funding. B. It creates organizations which are usually financially dependent on other firms. C. It cannot be initiated by a for-profit company. D. It does not include innovation as a key element.
D
________ is probably the most widely used of the many pricing methods available. A. Prestige pricing B. Skimming C. Partitioned pricing D. Markup pricing
D
A _____ is a concession which covers the time while you prepare your location prior to opening.
rent-free use period.
Which of the following statements is not true concerning marketing and marketing plans? A. For start-ups, marketing plans help define how the firm will build its brand and relationship with customers. B. When building your marketing plan, there is low-cost help available in several ways. C. For established businesses, a marketing plan helps the company maintain customer relationships. D. Not all business plans have a marketing section.
D
Which of the following statements is not true of target customers? A. Target customers are described in terms of demographics. B. What target customers are looking for should be based on discussions with potential customers. C. Hopefully the desires of your target customers closely match the value benefits your product offers. D. Usually you only have one type of target customer.
D
Which of the following statements is true of exporting? A. Agents and export trading companies are extensively used in direct exporting. B. Unstable governments and economies are a good market to export goods. C. Shipping documentation and paperwork are generic to all products and countries. D. Insurance is essential for export payments to overcome the risk of default.
D
While teaching strategy at Farrell University, Jessica developed an interactive strategy-simulation game to inculcate the concept of strategy to her students. She found that they were able to grasp the concept much better from the game rather than from reading books. For two years Jessica used the game to teach students. Eventually she removed possible glitches and perfected the game. She wanted students at other universities to benefit from the simulation. The result was the launch of Simulate Strategy, Inc. Jessica places an advertisement about her product with her e-mail and contact information in the "Chronicle of Higher Education," a leading publication for University professors. Which of the following marketing strategies exemplifies this scenario? A. Guerilla marketing B. Telemarketing C. Direct sales D. Direct response advertising
D
_____ businesses have diverse operations and three critical site selection considerations: traffic, customer ease, and competition. A. Home-based B. Low customer contact C. E-tailer D. High customer contact
D
_____ is an accounting method which assigns costs based on the different types of work a business does in order to sell a particular product or service. A. Differential revenues and expenses B. Net present value analysis C. Cost-volume-profit analysis D. Activity-based cost estimates
D
_____ refers to business owners doing what they said they would do. A. Trendiness B. Cognitive dissonance C. Follow-up D. Follow-through
D
_____ refers to business owners doing what they said they would do. A. Trendiness B. Cognitive dissonance C. Follow-up D. Follow-through
D
_____ rewards are those which people get from facing and beating or learning from challenges. A. Recognition B. Flexibility C. Income D. Growth
D
________ information and reports are used when planning, organizing, staffing, directing, and controlling. A. Variance analysis B. Financial accounting C. Cost-volume-profit analysis D. Managerial accounting
D
Which of the following statements is true of exporting? A. Agents and export trading companies are extensively used in direct exporting. B. Unstable governments and economies are a good market to export goods. C. Shipping documentation and paperwork are generic to all products and countries. D. Insurance is essential for export payments to overcome the risk of default.
D. Insurance is essential for export payments to overcome the risk of default.
Which of the following is true of personal selling? A. It involves activities used to establish and promote a favorable opinion by the media. B. It does not allow you to find out the buyers' main concerns. C. It involves entering into a joint venture with a competitor. D. It allows a business owner to be flexible in his or her presentation.
D. It allows a business owner to be flexible in his or her presentation.
Which of the following is most likely to be true regarding customer vector? A. It considerably increases cognitive dissonance. B. It makes it difficult to decide which marketing efforts to continue or expand. C. It helps marketers in identifying prospective customers. D. It helps entrepreneurs decide how to operate several key aspects of their marketing efforts.
D. It helps entrepreneurs decide how to operate several key aspects of their marketing efforts.
Which of the following is true of advertising? A. It is the least likely to be used by businesses to convey their message to potential customers. B. It works if an ad's impression is positive even if people do not recall it. C. It works if people recall an ad even though it did not have a positive impact on them. D. It involves presentation of a company's image.
D. It involves presentation of a company's image.
_____ is typically a source for consumers' internal reference price. A. Researching on the Internet B. Taking advice from friends and family C. Looking at competitive ads D. Recollecting previous shopping experiences
D. Recollecting previous shopping experiences
Which of the following is the best example for random discounting? A. Christmas sale B. Back-to-school sale C. Happy hours in movies D. Sale on select merchandise
D. Sale on select merchandise
In _____, products are sold to foreign buyers or distributors without any intermediaries. A. indirect exporting B. freight forwarding C. contract manufacturing D. direct exporting
D. direct exporting
Given the fact that there are several substitutes available for Tinkle Toys' products, these Tinkle Toys' products are most likely to fall under the category of _____. A. inelastic products B. pure services C. hybrid goods D. elastic products
D. elastic products
A _____ will warehouse products, pack and ship them, and send an automated e-mail to customers to let them know that the product is on its way. A. contract manufacturer B. traffic generator C. sheltered workshop D. fulfillment center
D. fulfillment center
A(n) _____ is best defined as a product for which there are few substitutes and for which a change in price makes very little difference in quantity purchased. A. pure good B. augmented product C. prototype D. inelastic product
D. inelastic product
A _____ is an example of a low customer contact business. A. retail establishment B. medical or legal office C. restaurant D. manufacturing business
D. manufacturing business
A(n) _____ refers to a set of goods or services that consists of only one or a few items. A. in-process inventory B. macro inventory C. just-in-time inventory D. micro inventory
D. micro inventory
Closing a sale refers to: A. asking for a referral from a prospective customer. B. being turned down by a prospective customer. C. delaying the decision to make a new product. D. obtaining a commitment from the customer.
D. obtaining a commitment from the customer.
Flying Ross Inc., a maker of world-renowned wristwatches, makes watches for three different customer segments. Timepieces under the Gold series are priced extremely high to cater to the high-end market, watches under the Pioneer series cater to the mid-end market, and those under the Marvella series are priced low in order to capture the low-end market. This strategy of setting three price points is typically referred to as _____. A. partitioned pricing B. captive pricing C. price gouging D. price lining
D. price lining
Turquoise Innovations Inc. has introduced a unique software that has no competition in the market. The company has incurred huge research and development costs in order to commercialize this software. Several business firms have been waiting for the release of this product as it saves their cost of outsourcing finance functions. Hence, the best pricing strategy this product will be _____. A. penetration pricing B. going rate pricing C. limit pricing D. price skimming
D. price skimming
In a _____ layout, material flows in on one side of the operation and continues to the other end of the operation. A. free-form B. process C. grid D. production line
D. production line
Putting together a list of prospective clients is called _____. A. preparing B. presenting C. formulating D. prospecting
D. prospecting
Raven created the sample versions of her toy products and tested them in kindergartens and play parks. These sample versions of the toys are referred to as _____. A. hybrids B. pure goods C. me-too products D. prototypes
D. prototypes
Paying for a local organization's needs in exchange for recognition is referred to as _____. A. publicity B. donation C. personal selling D. sponsorship
D. sponsorship
Which of the following is the first step of a business's marketing plan?
Discussing the target market of the business
false
Distributors and wholesalers prefer taking on start-up products as there are no setup charges involved. true/false
Which of the following direct sales methods is effective for products that need demonstrations or detailed explanations?
Door-to-door sales
Which of the following direct sales methods is effective for products that need demonstrations or detailed explanations?
Door-to-door sales.
cognitive dissonance
Doubt that occurs after a purchase has been made is called _____.
What is true of follow-up?
Electronic approaches to follow-up dramatically lower the cost of marketing efforts.
For a small business, the amount and type of inventory held for resale is not important because the supply of inventory and demand of customers can be matched at all times.
F
what statement is true of low customer contact businesses?
Empowerment zones offer businesses low-cost space and tax advantages. Generally low customer contact businesses are manufacturing businesses, the headquarters of client location-based services, or remote location services. Customer access is relatively unimportant. Empowerment zones offer businesses low-cost space and tax advantages for locating there. In addition to relatively low cost space, business incubators offer a multitude of small business support services.
A direct mail approach needs major inventory investment.
F
A legal obligation to pay money in the future is called equity capital.
F
A process is what a business does when it takes some raw material and converts it into a valuable output. This does not apply to service businesses.
F
Brochures and flyers are types of promotional novelties.
F
Customers generally view a new company negatively if it imitates established companies and practices in the industry.
F
Disposal value is based on determining the price of either a new asset or a used asset for which there is an organized market.
F
Distributors and wholesalers prefer taking on start-up products as there are no setup charges involved.
F
E-tailers have high overhead and limited shelf space.
F
Entrepreneurship levels are very high in efficiency-driven economies.
F
Feasibility studies consist of careful investigation of four primary areas: the product/service, the industry and market, profitability, and the plan for future action.
F
Flexibility rewards refer to the money made from owning a business.
F
An undifferentiated marketing strategy is used when a firm targets one particular segment on which to focus all its efforts.
False. A concentrated strategy is used when a firm chooses one particular segment on which to focus all its efforts. Entrepreneurs often are able to locate a particular niche that the larger companies ignore, and by focusing their efforts on them, are able to do extremely well.
A screening plan provides information on the company, product/service, market, and critical risks to prospective business.
False. A screening plan, also called a mini-plan, gives the basic overview of the firm and a detailed look at the financials. It is the key employee/partner plan which provides information on the company, product/service, market, and critical risks to prospective business. Page: 234
A start-up always immediately provides positive cash flows.
False. A start-up will require significant time to become established and provide positive cash flows. An established business or franchise has built-in customers to provide immediate cash inflows. Page: 158
The absolute lowest price that a buyer would be willing to pay is called the 'point of indifference' in the negotiation process.
False. Along the way you, as the buyer, should have decided on the absolute highest price that you would be willing to pay. That highest price is called your point of indifference in the negotiation process. Page: 170
Generally, benefits do not influence a firm's strategy process.
False. Benefits drive a firm's offering to its customers and influence every part of the strategy process. Page: 195
Doing business in a different location other than the hometown is comparatively less expensive.
False. Doing business in your hometown may be perfectly appropriate; however, the cost of moving a company—whether across town or across the country—can be very expensive. It pays to plan ahead.
The elevator pitch is much shorter than a vision statement or tagline.
False. Elevator pitch is a 30-second, 100 words or less, action-oriented description of a business designed to sell the idea of the business to another. It is longer than a vision statement or tagline. Page: 219
Exporting is usually expensive, difficult to start, and more risky than licensing, franchising, or joint ventures.
False. Entrepreneurs have available to them the same options as large companies including wholly owned subsidiaries, joint ventures, licensing, franchising, and exporting. Exporting is usually inexpensive, quick to start, easy to change, and less risky than other ventures.
Formal summaries of the content of an accounting system's records of transactions are called financial instruments.
False. Formal summaries of the content of an accounting system's records of transactions are called financial statements.
For small businesses, professional management is an issue of education, titles, and credentials.
False. In the terms of small business, professional management is not an issue of education, titles, or credentials. Page: 179
Direct competition refers to a strategy where companies provide alternatives that are dissimilar to a firm's product/service that consumers might choose to meet a similar need.
False. Indirect competition refers to a strategy where companies provide alternatives that are dissimilar to a firm's product/service that consumers might choose to meet a similar need.
It's almost always a good idea for a small firm to try to compete on price.
False. It's almost always a bad idea for a small firm to try to compete on price. Competing on price may lead to a price war in which a small firm just doesn't have the staying power of a big firm. Lower prices are "throwing away" profit that small businesses really need. They can signal the customers that the product isn't as high quality as that of the competitors'. Page: 293
Financial accounting is forward-looking and attempts to predict the results of management decisions.
False. Managerial accounting is forward-looking and attempts to predict the results of management decisions.
One technique to increase cash inflow is to offer discounts for delayed payments.
False. One of the five proven techniques to increase cash inflows includes offering discounts for prompt payment.
Press relations are a form of communication that encourage the customer to take immediate action.
False. Press relations are those activities that business owners do to influence or increase media coverage of their business. Media include newspapers, magazines, websites, blogs, radio, and television.
Brochures and flyers are types of promotional novelties.
False. Promotional novelties range from key chains, pens, and coffee mugs to more expensive embossed briefcases and the like.
The process of dividing the market into smaller portions of people that have certain common characteristics is called stereotyping.
False. Segmentation is the process of dividing the market into smaller portions of people who have certain common characteristics.
Among surveys, in-personsurvey tends to be the least expensive method, with telephone coming in second, and mail the most expensive.
False. Survey questions may be written, asked in person or asked on the telephone. In person tends to be the most expensive method, with telephone coming in second, and mail the least expensive
In person survey has the lowest return rate and does not allow for much flexibility when compared to mail or telephone surveys.
False. Survey questions may be written, asked in person or asked on the telephone. In person tends to be the most expensive method, with telephone coming in second, and mail the least expensive. On the other hand, mail has the lowest return rate and does not allow for much flexibility.
The bank available balance and the bank ledger balance will always show the same value.
False. The bank available balance is the sum of money that has actually been received and paid out of a depositor's account. The bank available balance can vary significantly from the ledger balance.
The total product is the most general description of a business, and the one which captures the smallest amount of what is special about a business.
False. The core product is the most general description of a business, and the one which captures the smallest amount of what is special about a business. Page: 277
The supra-strategy of a classic imitator small business start-up is single-mindedness.
False. The supra-strategy of a classic imitator small business start-up includes craftsmanship and formula facilities. Page: 203
Hiring marketing research firms is a much more inexpensive option than online surveys for small businesses.
False. There are marketing research firms that could conduct primary research for businesses, but the cost—usually several tens of thousands of dollars—tends to put it out of reach for small businesses. A much more reasonable option is an online survey.
A marketing plan is not required if a person plans to use his or her own personal savings and direct marketing.
False. To convince a bank or private investor to loan money or a store or distributor to carry your product, as an entrepreneur, you need more than just "gut instinct." Even if people plan to use their own personal savings and direct marketing, they're going to need some way to determine whether they are accomplishing their goals, something to make sure they're on the right path.
All money is considered currency, but all currency is not considered money.
False. While all currency is money, all money is not currency.
Joe is planning a new mobile restaurant business. He wants to convert an antique bus into a sit-down restaurant with a service window allowing him to serve people within the bus and walk-ups who want to get their food and take it home. Joe is performing some research into his project and is looking at the overall business idea, the product/service, the industry and market, financial projections (profitability), and the plan for the future action. Joe is performing a(n) ___________.
Feasibility Study
_____ is an indicator of the business's ability to manage cash flows so that the company has the fiscal ability to respond appropriately if an unexpected opportunity or problem arises.
Financial flexibility
A. crowdfunding** B. bootstrapping C. microfinancing
Financing a business online through the collective involvement of others who provide donations, loans or investments is referred to as ____.
Which of the following accounting functions focuses the most on automatically calculating and accumulating depreciation?
Fixed asset accounting
_____ refers to business owners doing what they said they would do.
Follow-through
true
Giveaways, samples, and tastings are all examples of introductory techniques used in sales promotion. true/false
Which of the following is most likely to be a business plan concern for silent partners/angel investors?
Growth rate
Which of the following is most likely to be achieved as the result of starting a business with established customers?
Immediate cash flows. When you start with established customers, you know that you will immediately have cash inflows. Page: 162
Five
In class we discussed the ____ choices when one is involved in conflict
A. opening B. promoting C. auctioning D. closing**
In door-to-door selling, ______ refers to getting the customer to agree to buy
What statement is true of sales forecasting?
In many cases, the best sales forecast you can come up with is an educated guess.
Which of the following statements is true of sales forecasting?
In many cases, the best sales forecast you can come up with is an educated guess.
A. exchange B. resource** C. boundary D. intention
In the BRIE model, a business name or government registration, a phone or email address dedicated to the business, or a specific location for the firm in a home, commercial space, or on the internet represents:
key information that joint venture partners seek in a business plan?
Include intellectual property protection, fit between the firms, competitive advantage, benefits and R&D. Page: 217
Which of the following statements lists revenues and expenses and shows the amount of profit a business makes for a specified period of time?
Income statement
Entrepreneurial Alertness
Is a special set of observational and thinking skills that help entrepreneurs identify good opportunities.
Which of the following best exemplifies close-ended questions?
Is this your first visit to the spa?
Which of the following is true of personal selling?
It allows a business owner to be flexible in his or her presentation.
What is an advantage of personal selling?
It allows business owners to find out the buyers' main concerns and address them.
what is an advantage of personal selling?
It allows business owners to find out the buyers' main concerns and address them.
Which of the following is true of theories based on the bounded rationality models?
It assumes that people are inefficient processors of information.
When considering the service life cycle, which of the following statements is not true?
It can be more difficult to extend the life cycle of a service over that of a product.
Which of the following statements is true of a mission statement?
It describes the major competitive advantages of a firm.
Which of the following statements is true of a mission statement?
It describes the major competitive advantages of a firm. The mission statement is a paragraph that describes the firm's goals and competitive advantages. The best mission statements are simple, short, and direct and it rarely discusses profits. Page: 219
What is true of customer retention?
It handles problems that crop up after a sale.
Which of the following is true of cognitive dissonance?
It happens frequently especially with more expensive items
Which of the following is true of advertising?
It involves presentation of a company's image.
Saffron Spas Inc. has two membership schemes meant to attract different customer segments. The executive membership program priced at $1000 allows for unlimited usage of the services available in the spa chain up to a year. The premium membership program priced at $700 allows for limited usage of the spa services up to a year. According to this information, which of the following pricing strategies is adopted by Saffron Spas Inc.?
Price lining. Price lining is an attempt to appeal to several different markets. In this situation, one might have three models of a product or service price to appeal to the high-, mid-, and low-end market. Page: 295
What would happen when a small business that is growing becomes too great to be handled alone by an individual owner?
Professional managers are hired to share the management load. As small businesses grow, the requirements of managing them increase proportionately. If a business grows large enough, no matter how experienced or talented a business owner is, eventually the demands of managing will become too great to be handled alone. At this point, one of two things happens: (1) the business starts to decline, or (2) professional managers are hired to share the management load. Page: 179
"Which of the following terms indicates that a product or service is being kept as a trade secret or is protected legally using patents, trademarks, copyright, or service mark? "
Proprietary technology
Which of the following is most likely to be an example of a good-dominated product?
Purchasing a sewing machine with a warranty
what is a disadvantage of leasing?
Renovation options are limited in a leased property. Leasing is an option with a considerably lower initial cash outlay, and it is often the only feasible choice for new businesses. One of the main downsides of leasing is that you are usually limited in the renovations you can do.
_____ is an estimate of what an identical asset would cost to be acquired and readied for service.
Replacement value. Replacement value is an estimate of what an identical asset would cost to be acquired and readied for service. Net realizable value is usually significantly less than the replacement value of any specific asset. Page: 169
_____ measure a management's effectiveness in using the invested capital of the business to provide profits.
Return on investments
_____ is a form of communication, such as coupon or contests, which encourages the customer to take immediate action.
Sales promotion.
False
The purpose of the dress code is to give students practice dressing for success
A. sponsored link** B. embedded placement C. trackback submitter D. benchmarking
Smith and Roden Enterprises (SRE), a law firm, paid a leading search engine to put their company's website at the top of the search engine's search list. This form of advertising used by SRE for promotion of their firm is known as ____.
A. doubtful debt B. goodwill** C. bequest D. excise duty
Social capital is the major component of what accountants call ____, and it can be found on business's balance sheet
Which of the following is a way to start business with established customers?
Spin-off. You can start your new business as a spin-off from your current employer's business. Page: 162
Advertising is often used to support the corporate identity and value propositions that are established through public relations efforts.
T
All capital assets cause you to incur four costs over time: (1) the cost of acquiring the asset, (2) the cost of owning the asset, (3) the cost of operating the asset, and (4) the cost of disposing of the asset.
T
An arm's length transaction is a business deal where the parties have a prior relation or affiliation, but where the business is conducted as if they were unrelated.
T
During the start-up phase of a small business the emphasis is on conserving what little cash the new business has.
T
Every business faces risks in the real world, so every business plan needs to spend some time addressing them.
T
Executive summaries are written in a formal style, suitable for investors, bankers, and lawyers to read.
T
Flexibility rewards are the most rapidly growing type of reward.
T
Giveaways, samples, and tastings are all examples of introductory techniques used in sales promotion.
T
High-growth ventures and big businesses generally do not succeed without small businesses offering supporting services.
T
In the BRIE model, exchange refers to moving resources, goods, or services to others, in exchange for money or other resources.
T
In the context of a business plan, product quality, its benefits, service quality, and the competitive advantage are the primary concerns of potential customers
T
Intangibility, inseparability, and perishability are the three characteristics of services that impact operations choices and decision making.
T
It is good to opt for distributors when a whole line of products need to be bought or warehoused.
T
It is nearly impossible to design a message that will appeal universally or to find media that will reach all consumers.
T
Marketing and new product experts believe that most of the small business failures could have been avoided by following the new product development (NPD) process.
T
Money borrowed for the purpose of investment in a business is called debt capital.
T
Obtaining outside equity financing can only be done if your business is organized as: a partnership, a corporation, or a limited liability company.
T
One of the key elements of the BRIE model is a person's intentions to start a business.
T
One of the pitfalls small business owners can fall into is to fail to build a company culture that encourages new ideas and embraces change.
T
The SBIR and the STTR programs require that every U.S. agency that makes research grants provide a minimum of 2 percent of its grant budget to small businesses, as defined by the SBA.
T
The concept of total product includes how customers describe one's good or service.
T
The final goal for developing and testing your value proposition is how it stacks up against and will compete against the other offering available to your customers
T
The financial statements in a business plan include income statements, cash flow, balance sheet, and their respective assumptions.
T
The majority of small business start-ups are funded by bootstrapping.
T
The most frequently occurring element of the BRIE model is intention.
T
The new product development process is likely to be easier for services than for innovative goods.
T
The primary areas for conflict resolution in exporting include nonpayment and contract default issues.
T
The time value of money is the concept that a dollar received today is worth much more than is a dollar to be received at some time in the future.
T
The total cost of keeping inventory is the sum of the cost to buy the inventory, the cost to store, protect, and maintain inventory, and the cost of making an order to purchase inventory.
T
The value delivered to the customer is second in order of importance to the pricing decision.
T
Using low-cost or free techniques to minimize cost of doing business is referred to as bootstrapping.
T
When pitching your business plan to an influential person they are likely looking at your passion for the business; your expertise about the business and the plan; how professional you are in your work; and how easy it would be to work with you.
T
When pricing your product, the optimum price is the highest price that will produce your desired level of sales in your intended market.
T
With the many sales and service businesses built using the Internet, a low-cost, low-risk approach for testing feasibility exists using the concept of a pilot test.
T
Your hit rate is how many prospects or leads you need to approach in order to make one sale. Also called the conversion rate.
T
"_____ is provided by state and local governments, primarily to encourage specific activities that are expected to improve the blighted areas or provide additional employment.
Tax abatement
Which of the following is a value benefit?
Technology. Technology is a value benefit. Firms can offer state-of-the-art or leading-edge technology, technology that others do not have, or technology that automates or simplifies tasks or that meets industry standards. Page: 196
_____ is best described as the process of selling prototype of a product in either a real or simulated market environment.
Test marketing
Juan has an accounting philosophy according to which he keeps the loans borrowed from the business separate from the loans he takes from banks for his own purposes. Which of the following basic accounting concepts is reflected in Juan's accounting philosophy?
The business entity idea
A. choosing an ethical philosophy to help make choices B. defining the moral dimensions of a problem** C. generating a variety of alternatives to handle a problem D. creating a feedback loop to check the progress of a solution
The first step in the LaRue Hosmer's model for ethical decision making is:
A. to create additional value for customers through great products and services B. to create outlets for employees to bring out new ideas C. to assess if a business idea can be profitably brought to market** D. to assess how well a preliminary run of a business works and what problems it might have.
The goal of a feasibility study is:
Which of the following statements is true of the market section of a business plan?
The growth plan talks about markets to be pursued and ways to leverage the firm's assets.
The makers of baby wipes began advertising their products for adult use, for everyone's use. This is an example of a product during which stage of the product life cycle?
The maturity stage
A. Illumination rate B. Frame rate C. Conversion rate** D. Pilot test
The measure of how many visitors to a Web site actually make a purchase is known as
what is customer retention?
The name for the general approach to keeping customers is called customer retention (CM). There are two major elements to CM. One is handling problems that crop up after a sale, and the other called customer relationship management (CRM).
feasibility study
The research and development team of Leonide Inc. has generated five different product ideas. All five ideas are being rated against each other on their characteristics such as product uniqueness, idea profitability, protectable intellectual property, and product team quality. Based on their ranking in this stage, only three ideas will make it to the immediate next step which will be the stage of _____.
False
The slowest growing sector of all U.S. businesses is women-owned businesses
maturity
The strategy of pricing toward the low end of the competition in order to take market share from the competition becomes most popular as a product reaches the _____ phase of the product life cycle.
Which of the following statements is true about me-too products?
The vast majority of new ideas for small businesses will be me-too products.
Which of the following statements is true about me-too products?
The vast majority of new ideas for small businesses will be me-too products. Most businesses are imitative in nature, so the vast majority of new ideas for small businesses will be me-too products. Page: 279
Which of the following statements is true about fixed costs?
They are unaffected by changes in output.
Which of the following is an advantage of using open-ended questions?
They help find new niches and perfect a product before it is introduced.
Business owners can figure how to better target ads or promotions to particular types of customers if:
They link sales and purchase basis to the type of customer.
What is a characteristic feature of sales packets?
They provide potential customers an education in a firm's product or service.
Advertising costs are usually based on cost per?
Thousand.
"Mr. Hill, who runs a key-chain manufacturing unit, buys raw materials from his supplier during the first week of every month. The supplier's policy states that all payments need to be cleared within 50 days of buying the materials. This schedule ensures that Mr. Hill gets an extended period to make payments thus controlling when the payment is made. Which of the following strategies is Mr. Hill using to control cash outflow?"
Timing the purchase
A. income B. flexibility** C. growth D. credit
Tina runs her consultancy business from her home. Working from home allows her to set her own schedule and take time off at her convenience so that she can be with her family. The fact that Tina gets more time with her family can be categorized as ____ reward.
A. planning to stay in business B. protecting their investment C. talking about the crisis to their people D. planning only after the crisis has occurred**
To help and prepare small businesses to handle crisis, owners should avoid:
Which of the following is a reason for a business to do accounting?
To produce information that is useful for managing a business
Access for employees and reasonable cost are critical for businesses with low customer contact.
True
The term "value proposition" refers to small business owners' unique selling points that will be used to differentiate their products and/or services from those of the competition.
True
The usefulness of the income statement for managing a small business is related to the amount of detail available in the statement.
True
There are three typical locations for services: at a client's location, at a mutually accessible location, and at the firm's location.
True
To ensure your accounting information is accurate, reliable, and useful, the accounting system you choose should easily and efficiently maintain an internal "audit trail".
True
True or False: A license is a legal agreement that grants rights to use a particular piece of intellectual property.
True
True or False: Search and capture of new ideas that lead to business opportunities is called opportunity recognition.
True
True or False: The final goal for developing and testing your value proposition is how it stacks up against and will compete against the other offering available to your customers.
True
True or False: The results from primary research are extremely current, but it can often take somewhat more time and money to gather it.
True
True or False: There can be more than one target market.
True
Variance analysis is the process of determining the effect of price and quantity changes on revenues and expenses.
True
When pitching your business plan to an influential person they are likely looking at your passion for the business; your expertise about the business and the plan; how professional you are in your work; and how easy it would be to work with you.
True
While services go through the same four stages of a product life cycle, it can be somewhat easier to extend the life cycle and to virtually eliminate the decline stage of a service. True/False
True
Your estimated number of prospective customers multiplied by your hit rate multiplied by the amount of each sale equals your sales forecast.
True
Your hit rate is how many prospects or leads you need to approach in order to make one sale. Also called the conversion rate.
True
It is nearly impossible to design a message that will appeal universally or to find media that will reach all consumers.
True (T)
Sales leads who actually make some sort of effort to learn more about the product, service, or business in anticipation of a possible purchase are known as prospects.
True (T)
Your estimated number of prospective customers multiplied by your hit rate multiplied by the amount of each sale equals your sales forecast.
True (T)
A vending machine is a form of direct sales method.
True.
Accounting equation: The statement that assets equal liabilities plus owners' equity (assets = liabilities + owners' equity)
True.
An "as is" property is one which has problems and the landlord tries to push you to accept the property "as is." A compliant property is one which is in compliance with all applicable laws, rules, and regulations.
True.
Creating and distributing a catalog online saves the cost of printing and mailing.
True.
Expendables are often variable costs. Expendables (also called indirect materials) are products used in the sales, manufacturing, or delivery that are not part of the finished product.
True.
Factoring is a method of borrowing against receivables.
True.
Follow-up refers to the contacts you periodically make with customers in order to remind them of your business, and your interest in their business.
True.
If a businessis able to create a prestige image in its customer's mind, it can charge much higher prices than the going rate.
True.
It is customary for a small business to concentrate its efforts on one target market at the beginning and consider secondary ones later.
True.
It is good to opt for distributors when a whole line of products need to be bought or warehoused but you cannot afford to do so yourself.
True.
It is much easier to compare groups and to statistically analyze data with close-ended questions than it is with open-ended questions.
True.
Managerial accounting is both a source of information that is used in decision making and a methodology to reduce the complexity of the information used to make a decision. By definition, managerial accounting deals with only financial information. By limiting the information being considered to financial concerns, the complexity of the alternatives is reduced.
True.
Market segmentation is the process of dividing the market into groups that have somewhat homogeneous needs for a product or service.
True.
One of the difficulties in understanding and interpreting the income statements is the dispute over when one should recognize revenues.
True.
Sales leads who actually make some sort of effort to learn more about the product, service, or business in anticipation of a possible purchase are known as prospects.
True.
The easiest payment procedure for a company is to require up-front cash payment prior to shipment or credit card. This eliminates the company's risk, but puts the customer at risk. Providing credit to your customers reverses the risk, and puts it all on the company.
True.
The easiest way to find selling prices for products these days is on the Internet.
True.
The first step in budgeting is to make a forecast of your future sales.
True. From the sales forecast, and from your knowledge of cost behaviors, collections, payments, and expenses, a complete business plan will be developed.
Franchising a new business is one of the ways to business ownership.
True. Page: 156
A start-up can be kept small deliberately to limit the magnitude of possible losses.
True. Page: 157
Properly performing due diligence minimizes the risk of failure and maximizes the probability of success by identifying the strengths and weaknesses of the business.
True. Page: 167
Buy-ins can be made in any form of business.
True. Page: 171
A. Ken uses the money he gets from his full-time job as a chef to run his part-time business of graphic designing B. Mandy uses her employer's client list from her full-time job as a house painter to get customers for her own part-time house painting business** C. Cathy, who does computer repairs, lies to customers about having an office downtown when she actually works part-time from her home. D. Jenson misses his deadlines at his full-time day job because he works late nights as a part-time music producer
Which of the following best describes cannibalizing?
A. Peer admiration B. Personal growth** C. Political Power D. Industry recognition
Which of the following is a reward universally mentioned by entrepreneurs?
A. it helps entrepreneurs to come up with alternative solution** B. It helps entrepreneurs to generate more royalty than any other method C. It gives IP protection to products and services D. It helps entrepreneurs to avoid governmental taxes and liabilities
Which of the following is an advantage of the SCAMPER tool?
A. Apathy B. Professionalization C. Perseverance** D. Cognition
Which of the following is best thought of as a type of learned optimism in successful entrepreneurs?
Target market customers are essential factors for selecting business locations
Which of the following is true of business locations?
It handles problems that crop up after a sale.
Which of the following is true of customer retention?
A. It allows entrepreneurs to launch a formal search for opportunities B. It allows entrepreneurs to notice things that have been overlooked** C. It gives entrepreneurs the experience required to start a small business D. It is an approach that allows entrepreneurs to do more or less what others do
Which of the following is true of entrepreneurial alertness?
Market penetration
Which of the following is used when selling to existing customers?
A. Comprehensive planners B. Habit-based planners** C. Opportunistic planners D. Critical-point planners
Which of the following kinds of planners generally tend to do very poorly in business, even if they do manage to get their firms started?
A. Corporation B. Limited liability company C. Sole proprietorship D. Partnership**
Which of the following legal forms of business is typically considered the least legitimate and vulnerable?
Indulging in a price war
Which of the following pricing strategies is considered the most aggressive from the competition point of view?
A. Availability of different consignment stores and auctions B. Long amount of time before payouts** C. Full-time sales with only a part-time involvement from the owner D. High setup costs
Which of the following represents a disadvantage of the consignment approach?
A. They are expensive because of their membership costs B. They offer better personal connections than face-to-face networks C. They are often fast and easy to develop**
Which of the following statements is true about electronic social networks?
It is not a long-term strategy for businesses to follow.
Which of the following statements is true of price skimming?
A. Social capital cannot be found on a business's balance sheet B. The less of social capital a firm has, the greater the value of the firm C. Social capital is capital in the same sense that cash or land can be** D. Small businesses high in social capital are treated less fairly by regulators.
Which of the following statements is true of social capital?
Marketing funnel
Which of the following terms refers to a rule of thumb about how many prospective customers it takes to find one who will actually make a purchase?
Value proposition
Which of the following terms refers to small business owners' unique selling points that will be used to differentiate their products and/or services from those of the competition?
Margin
Which of the following terms refers to the amount of profit an entrepreneur incurs, usually stated as a percentage of the total price?
The RBI screen consists of asking yourself five questions to help you screen entrepreneurial ideas. Which of the following is NOT one of those five questions?
Who are your competitors?
A. Conversion rate B. Pilot test** C. Incubation period D. Commercialization
____ refers to a preliminary run of a business, sales efforts, program, or Web site with the goal of assessing how well the overall approach works and what problems it might have.
A. Cognitive resonance B. Mutuality C. Ethical dilemma** D. Effectuation
____ refers to a situation where a person's values are in conflict, making it unclear whether a particular decision is the right thing to do
A. Opportunity charging B. Entrepreneurial alertness C. Opportunity recognition** D. Opportunity encryption
____ refers to searching and capturing new ideas that lead to business opportunities
A. Lifestyle firms B. Traditional small businesses C. High-performing small businesses** D. High-growth ventures
____ tend to level off after success defined by sales of between $100,000 and $1,000,000 depending on the industry
Sales promotion
_____ is a form of communication, such as coupon or contests, which encourages the customer to take immediate action.
Bundling
_____ is the strategy of combining two or more products in one unit and pricing it less than if the units were sold separately.
A. Trade magazines** B. Scholarly journals C. Popular press magazines D. Academic journals
_____ target specific industries and professions
markup price
________ is probably the most widely used of the many pricing methods available.
"Buy one large pizza and get a 25 percent off on the next purchase," is an example of _____.
a loyalty program. Loyalty programs are intended to tie customers to one's business. Most often, these take the form of a card on which each purchase is stamped, and when a certain number of purchases or visits have occurred, the customer gets a free service, a discount, or a gift. Page: 297
Chain Shop.com runs on a membership business model, in which an existing member gets a 20 percent rebate if he or she introduces or invites a potential customer to the site. This rebate gets activated once the new member makes a purchase on the site. This is an example of _____.
a referral discount Page: 298
Diversification is a strategy whose goal is growth, based on:
adding new products or services to the firm's existing collection of offerings
The information that the account holder knows about his or her account, but the bank does not know, includes:
any deposits the holder has made after bank closing.
A(n) _____ typically means the core product plus features that tend to differentiate the product from competition.
augmented product
"Orion Inc. was started as a small organization with five employees. After the first year's profits were made, the owners decided to invest the profits in expanding the business. This is an example of financing the business using _____.
bootstrapping
By using multiple screens of questions in online surveys, respondents can select the screen they will see based on their responses to an earlier question. In Internet survey terms, this is known as _____.
branching
In the context of entry wedges, market relinquishment occurs when:
business firms leave a market. Page: 204
The purchase of substantially less than 100 percent of a business is called a(n):
buy-in. One basic way that a business may be bought is you may buy in, by acquiring some, but not all of the ownership. Page: 170
"A clothing company that divides its market using characteristics of clothing such as practical, stylish, or for a particular sport, etc., is segmenting the market _____. "
by benefits sought
A clothing company that divides its market using characteristics of clothing such as practical, stylish, or for a particular sport, etc., is segmenting the market _____.
by benefits sought
Money that is immediately available to be spent is called _____
cash
Debt investments that mature in less than three months are an example of _____.
cash equivalents
Cash that can be obtained by selling the products and services of a business and collecting cash from customers is called:
cash flow from operations.
"Tammy is talented at craft but lacks the cash flow management skills required to run a business. She opens a store, Tammy's Craft Corner, with the help of her son David a business major. Jane purchases a picture frame from Tammy using a credit card. She notices a crack in the frame and returns it to Tammy. Jane contacts the credit card service provider for a refund. The credit card company removes the sale amount from Tammy's account which is referred to as a(n) _____. "
charge back
A reduction in the bank account of a merchant by a credit card company is termed _____.
charge back
An entity that processes checks and electronic fund transfers for banks and other financial organizations is called a _____.
clearinghouse
Something of value given or pledged as security for payment of a loan is called _____.
collateral
What is Direct Competition?
companies that make a similar product or provide a similar service.
The _____ section of a classic business plan contains the vision statement, mission statement, objectives, and background of a firm.
company. The company section of a business plan contains the vision statement, mission statement, objectives, and company background with product, service, and industry description. Page: 225
A(n) _____ plan provides information on the company, product/service, market, and critical risks to prospective business or marketing partners or to prospective key employees.
concept. A key employee/partner plan provides information on the company, product/service, market, and critical risks to prospective business or marketing partners or to prospective key employees. It is also called a summary plan, concept plan, or idea plan. Page: 235
"When an existing firm with the correct production capabilities makes your product for you, it is referred to as _____. "
contract manufacturing
"A legal ""artificial"" entity that is formed by filing specific documents with a state government is called a _____."
corporation
The quantity of items sold times the price expected to be paid for each product is the calculation used for the:
cost of goods sold budget.
"For a business to factor receivables, the _____ must have good credit ratings."
customers
Hugh starts his own animation company by borrowing funds from his parents. His parents tell him that he can repay them when the business is generating profits. This is an example of _____.
deferral
Checking and savings accounts are the most common forms of _____.
demand deposits
"Dividing the market into different segments by income, age, or religion constitutes segmenting the market _____. "
demographically
"Tammy is talented at craft but lacks the cash flow management skills required to run a business. She opens a store, Tammy's Craft Corner, with the help of her son David a business major who manages the budgets and expenses of the business. Tammy receives a bulk order from a customer to make 100 paper roses for Valentine's Day. She charges 20 percent of the total sales price in advance and promises to deliver the order within 30 days. The advance payment that Tammy receives for the order before delivering the product is called _____. "
deposit and progress payment
Regular and systematic reduction in income that transfers asset value to expense over time is called _____.
depreciation
"Love Polka Inc., a clothing brand, realized after a market research that the clothing needs of pregnant women and new mothers were not met adequately. Hence, it launched the first ever maternity-based store in the market under the brand name Maternity and More. Thus, the company, by tapping a marginally served market, has typically gained _____. "
differential advantage
Investing in multiple investments of differing risk profiles for the purpose of reducing overall investment risk is called _____.
diversification
"Given the fact that there are several substitutes available for Tinkle Toys' products, these Tinkle Toys' products are most likely to fall under the category of _____. "
elastic products
Money contributed to businesses in return for part ownership of the business is called a(n) _____.
equity capital
"A manufacturing company is planning to test market its new product, a shampoo. It has tied up with a retailer to research on the product's packaging. The retailer has hired students as interns to observe customers' reactions toward the new shampoo in its stores. All of the research is conducted without directly interacting with the customers. This is a typical example of _____."
ethnographic research
Marketing data gathered by simple observation - seeing what customers do, rather than asking them is:
ethnographic research.
"Myro Labs, Inc. has organized for a formal discussion between 12 potential customers to test a new drug product's packaging and pricing. The company's marketing head has been carefully questioning the participants in order to effectively bring out their reactions toward the new product. This is a typical example of a(n) _____."
focus group research
Naomi had always been complimented for her excellent cooking skills. Hence, she decided to commercialize this ability by starting a restaurant. Before starting the restaurant, she invited a few friends and neighbors over for dinner to taste her dishes and provide feedback that she could incorporate in her business venture. This is a typical example of conducting an informal _____.
focus group research.
Crowdfunding refers to:
funding a business online through gifts made to the business.
Using methods to appear to be paying bills on time, when in fact the cash outflow is being delayed or avoided is called _____.
gaming the payment process
"E and C Inc. produces two categories of woolen clothes under the brand names ""extreme"" and ""cool."" The brand ""extreme"" is sold in areas that have harsh winters, and the brand ""cool"" is sold in areas that have warm summers. This is a typical example of _____ segmentation."
geographic
Typically, for a start-up business the financials:
give the monthly income and cash flow for the first year. For an existing business, the financials report the last two years of actual data, and then offer three-year projections for the income, cash flow, and balance sheet. For a start-up business, the tradition is to offer three years of data projections. In either case, income and cash flow are given monthly for the first year, quarterly for the second year, and annually for the third and any later years. Page: 231
"The emphasis of financial management during the _____ phase is to obtain increasing amounts of cash inflows to pay for added inventory, productive assets, and employees."
growth
"The first time Jena visited Blue Corals Inn, a restaurant in her neighborhood, she was delighted with the food and service quality. However, the next time she dined at the same place, the restaurant's food and service seemed to have lost its quality. This scenario best illustrates the _____ characteristic of services. "
heterogeneity
A _____ is a document issued by a bank that guarantees a buyer's payment for a specified period of time upon compliance with specified terms.
letter of credit
Sam intends to present a business plan to his potential key employees. The employees would most likely expect to know about the _____ during the presentation.
long-term prospects
Sam intends to present a business plan to his potential key employees. The employees would most likely expect to know about the _____ during the presentation.
long-term prospects. Stability of firm, growth, and long-term prospects are the major concerns expected by key employees in a business plan. Page: 217
Smart Home, a retailer for consumer electronics, sells a reputed brand's desktops at near cost price. These desktops are located at the end of the store so that the customers notice the other products in the store before they pick the desktop. As a result the sales of printers, USB devices, web cameras, and other electronic products in the store have increased. This is an example for _____ pricing technique.
loss leaders. The pricing technique of loss leaders involves selling a name brand at or near cost in order to attract traffic to a retailer. Page: 295
A(n) _____ is the business term for the population of customers for a business owner's products or services.
market. A market is the business term for the population of customers for a product or service. If entrepreneurs know their market inside and out, they are likely to know much of the key information for how to be successful in their line of business. Page: 192
Which of the following terms refers to a rule of thumb about how many prospective customers it takes to find one who will actually make a purchase?
marketing funnel
"Mark has a brilliant business idea that he intends to explain to a venture capitalist. However, the venture capitalist agrees to invest in Mark's idea provided he prepares a report that explains the product, price, distribution, and promotion strategy. The venture capitalist also wants Mark to include an analysis of the existing competition and to clearly indicate his target customers in the report. Mark has been typically asked to prepare a _____ by the venture capitalist."
marketing plan
"Skygull, Inc. is planning to launch a new generation of cell phones. Being the first entrant in this market makes it difficult for the company to decide the means to reach its potential customers, the advertising medium to use, and the optimum price for each cell phone. Skygull, Inc. can best tackle this problem by conducting _____."
marketing research
If a business is trying to grow, the right price for its products is one that is:
necessary to capture a desired market share given an anticipated level of sales volume. If a person is trying to make his or her business grow, or if the person is at the point that he or she is preparing to exit the business, the right price is the one necessary to capture a desired market share or to meet a specific profit target, given an anticipated level of sales volume. Page: 288
When conducting primary research and comparing various survey methods, the least expensive method is the:
online survey
"The time required for a business to acquire resources, convert them into a product, sell the product, and receive cash from the sale is referred as the _____ cycle of a business."
operating
Activities involved in producing and selling goods and services are called _____ activities.
operating
The ratio of debt to equity that provides the maximum level of profits is called _____
optimum capital structure
"While most cosmetic brands sell their products in specialty stores or departmental stores, Snowbird Inc. is the only cosmetic brand that uses direct marketing as a means to reach its customers. However, it prices its products close to that of its competitors. Hence, the company has carved a differential advantage typically in terms of its _____ strategy."
place
In personal selling, _____ means finding out about the clients before approaching them.
preparation. The process of personal selling includes prospect and evaluate, prepare, present, close, and follow-up. Preparation means finding out about the clients before approaching them.
"If a firm is able to create a premium image in its customer's mind by offering a custom product or extra service, it should typically claim _____ as its pricing strategy and use it as a differential advantage. "
prestige pricing
Zoruski Inc., a manufacturer of leather furniture, is facing problems with pricing its products in the Asian market. Due to the presence of several middlemen in its distribution channel, the prices of furniture rise up to three times from what they are sold at in the home market. This problem faced by Zoruski Inc. is typically referred to as _____.
price escalation. If a business is using a traditional retailer, its product may go through several middlemen before getting on the shelf. The end price to the customer might be four times from what the business got. This is called price escalation. Page: 290
"Turquoise Innovations Inc. has introduced a unique software that has no competition in the market. The company has incurred huge research and development costs in order to commercialize this software. Several business firms have been waiting for the release of this product as it saves their cost of outsourcing finance functions. Hence, the best pricing strategy this product will be _____. "
price skimming
What does a Dichotomous Question mean?
questions that have only two possible choices.
"Susan, who is a florist, purchases her flowers on credit. Lucy, a customer, takes eight bouquets and promises to pay Susan within two weeks. The amount that Lucy owes Susan is termed _____."
receivables
Customer loyalty programs focus on developing a strategy that is based on:
selling more of the firm's product or service to the existing customer base.
The _____ phase is usually the most difficult time a person will have in business.
start-up. The start-up phase is usually the most difficult time you will have in business. You are required to make myriad decisions concerning location, product, target market, promotion, sales, and all the facets of starting and operating a business. Page: 160
The primary goal of penetration pricing is to:
steal competitors' market share.
Industry analysis is defined as the technique used to:
study the dynamics and trends of an industry. Page: 186
When a marketer mentions the key points about his or her product or service in as few and as memorable words as possible, the resulting message is known as the _____ message.
succinct.
A(n) _____ is a memorable catchphrase that captures the key idea of a business, its service, product, or customer.
tagline.
"WaterVision Cams: Atlanta's Only Underwater Cameras" is an example of a(n) _____.
tagline. Page: 218
In a _____, the buyer seizes control of the business without the permission of all owners.
takeover. A takeover comprises purchasing enough of the target business's stock to gain control of the board of directors of the business Page: 172
The group of people on which a marketer focuses promotion and sales efforts is called a _____.
target market
_____ is the segment or segments a business owner selects to concentrate his or her marketing efforts.
target market
"The information that the bank knows about an account, but is not known by the account holder, includes:"
the amount of any direct payments made in the account by the account holder's customers.
"Tammy is talented at craft but lacks the cash flow management skills required to run a business. She opens a store, Tammy's Craft Corner, with the help of her son David a business major who manages the budgets and expenses of the business. David prepares the quarterly budget and maintains a company book for recording all transactions. The company book balance that David regularly updates is the sum of:"
the cash inflows and cash outflows recorded in the firm's accounting records.
When coming up with a new idea in the product development process, the focus is on the pains and gains of customers. True/False
true
Tammy is talented at craft but lacks the cash flow management skills required to run a business. She opens a store, Tammy's Craft Corner, with the help of her son David—a business major—who manages the budgets and expenses of the business. David prepares the quarterly budget and maintains a company book for recording all transactions. The company book balance that David regularly updates is the sum of:
the cash inflows and cash outflows recorded in the firm's accounting records.
The weighted average cost (WAC) refers to:
the expected average future cost of funds.
An implication of the bounded rationality models of management is that
the more information available to be included into the decision process, the less efficient that process will be
The number one source of financing for small businesses is from _____.
the owners themselves
A good marketing strategy is most likely to focus on:
the sales plan that shows specific ways to secure sales from customers.
Business owners can figure how to better target ads or promotions to particular types of customers if:
they link sales and purchase basis to the type of customer.
Breakeven point is the point at which:
total costs equal gross revenue.
Percentage of concession in gross invoice amounts provided to encourage prompt payment are called _____.
trade discounts
A product can include goods, services, and ideas.
true
It costs five times as much to get a purchase from a new customer compared to an existing one. true/false
true
It is good to opt for distributors when a whole line of products need to be bought or warehoused.
true
The 4 P's of marketing are Product, Price, Promotion, and Placement. True/False
true
The concept of total product includes how customers describe one's good or service.
true
The final goal for developing and testing your value proposition is how it stacks up against and will compete against the other offering available to your customers.
true
The proof of a customer relationship management effort is seen in higher levels of customer loyalty in existing customers. true/false
true
