Final 3360 Dr. Bell
Which of the following is an advantage of using an imitative strategy?
It allows business owners to buy existing technologies.
Which of the following is most likely to be an advantage of a start-up?
It begins with a clean slate.
Which of the following is true of imitation?
It does not match the precision or completeness of copying seen in franchising.
A(n) _____ is the business term for the population of customers for a business owner's products or services.
market
A customer group that involves large portions of the population is referred to as a _____.
mass market
An imitative business that competes locally with others in the same industry is referred to as _____.
parallel competition
The purchase of substantially less than 100 percent of a business is called a(n):
buy-in
The fourth step of a small business' strategic planning process involves:
determining the best strategic direction and strategy for the firm
In an imitative strategy, an entrepreneur:
does more or less what others are already doing.
The amount by which sales prices exceed product costs refers to
high margins
Most small businesses are more _____ than _____.
imitative; innovative
An overall strategic approach in which a firm patterns itself on other firms, with the exception of one or two key areas is referred to as _____.
incremental innovation
Market scope is important because:
it helps business owners to decide where to focus their sales and advertising efforts.
The amount for which an asset would sell, less the costs of selling the asset is called:
net realizable value.
Purchases of existing businesses may occur through _____ in which the business is bought over a period of time with money obtained from the business.
Earn-outs
Which of the following is a disadvantage of purchasing an existing business?
Existing managers and employees resisting change
The specific concept that leads to a start-up business usually comes from the _____ of the person starting the business.
Experience
Imitation plus one degree of similarity results in:
patterning a business on existing firms.
The first step of the strategic planning process for a small business is:
reviewing and confirming the goals that define the firm
_____ refers to the size of the market, whereas _____ refers to the geographic range covered by the market.
scale; scope
The primary advantage to a buyout is its:
simplicity
The _____ phase is usually the most difficult time a person will have in business.
start-up
Industry analysis is defined as the technique used to:
study the dynamics and trends of an industry
The ratio of the value of a firm to its annual earnings is called:
the earnings multiple
The price at which a buyer is indifferent about buying or not buying the business is called:
the point of indifference.
Magic number is defined as:
the post-tax income the entrepreneur personally seeks from the business.
The value of a franchise is determined by:
the rights granted
Which of the following is an agreement that provides only the rights to use the franchisor's trade name and/or trademarks?
trade name franchising
A _____ displays characteristics related to the nature of a product or service itself
value benefit
Imitation minus one degree of similarity:
would be the business equivalent of cloning.
Which of the following is most likely to be an advantage of buying an existing business?
Purchasing a business often requires less cash outlay than for creating a start-up.
_____ is an estimate of what an identical asset would cost to be acquired and readied for service
Replacement value
A(n) _____ credit is a credit agreement that allows the borrower to pay all or part of the balance at any time; as the loan balance is paid off, it becomes available to be borrowed again.
Revolving
A start-up cannot:
provide positive cash flows immediately.
In a _____, the buyer seizes control of the business without the permission of all owners.
takeover
Seizing of control of a business by purchasing its stock to be able to select the board of directors refers to a(n):
takeover
Which of the following is commonly used to estimate the value of a business?
Comparable sales of other firms
_____ are the only way a sole proprietorship may be purchased.
Key resource acquisations
The difference between original acquisition cost and the amount of accumulated depreciation is called the:
book value
In the goal step of the strategic planning process, the key is to:
bring together the decisions that underlie the business plan
5 ways to business ownership
1)start a new business 2)buy an existing business 3)Franchising 4)Inherit 5)Hired
If Sarah were to buy an existing business, which of the following disadvantages would you point out?
Difficulty in determining the worth of the business.
Which of the following is most likely to be the best indicator of successful start-ups?
Level of experience of the founders
In _____ executive volunteers contribute their time and energy in assisting start-up and struggling small businesses as a public service.
Mentoring programs
Which of the following statements about family businesses succession is true?
Turning over management authority is not easy for most founders
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
Which of the following would avoid intrafamily strife when the family business is passed down to the next generation?
Allowing each family member who does wish to enter the business to find out and do those functions and activities that he or she does best.
Which of the following is one important advantage of key resource allocation?
As only assets are acquired, a subsequent business, regardless of its legal form, is not responsible for any of the acts or transactions made prior to purchasing the business
Which of the following terms best represents something a business owns that has economic value or is expected to have economic value in the future?
Assets
Which of the following is a financial statement that will be checked during due diligence when buying an existing business?
Balance Sheet
Which of the following is essential to the success of all start-ups?
Building trust in one's "story"
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 franchisor both an up-front fee to obtain the franchise rights and a percentage of gross sales. Which of the following types of franchising does this situation illustrate?
Business format franchising
Which of the following is the primary goal for performing due diligence?
Finding any inefficiencies, unnoticed opportunities, waste, and mismanagement
Standard industrial classification system (SIC) codes have _____ digits
Four
A legal agreement that allows a business to be operated using the name and business procedures of another firm is referred to as a:
Franchise
Which of the following is one of the ways to get into small business management?
Franchising
_____ is the general name for the line of product or service being sold, or the firms in that line of business.
Industry
Which of the following is true for start-ups?
It can provide new, unique products or services that are not available.
Which of the following is a disadvantage of a start-up?
It cannot easily gain revolving credit.
Which of the following is the advantage of knowing the magic number
It helps in evaluating if the proposed business can deliver the desired return.
Which of the following is accomplished by a small business when it secures outside investment?
It indicates a level of belief in the business and the owner.
Which of the following holds true for product distribution franchising?
It provides the franchisee with specific brand named products, which are resold by the franchisee in a specified territory.
Which of the following is true of a blue ocean strategy?
It results in a new product or service.
Which of the following is essential to the success of all start-ups when one uses the "lean" entrepreneurial methods?
Keeping in touch with one's customers
Sam used his management skills to start a loans advising website. He started seeing clients at his home before it grew into a well-established company in the next ten years. Which of the following entrepreneurial methods did he use in the beginning, to reduce the financial risk of his start-up?
Lean method
Which of the following are the two major classification systems that code industries?
NAICS and SIC
Which of the following is an excellent way to find businesses for sale?
Networking
Which of the following is the last step for performing due diligence?
Obtain sufficient capital to purchase and operate the business.
Which of the following types of customers are likely to generate more potential customers than any other type?
Passionate customers
A business that is created by separating parts of an operating business into a separate entity is called a:
Spin-off
Which of the following is a way to start business with established customers?
Spin-off
A new business that has begun from scratch is called a:
Start-up
Which of the following is most likely to increase the odds of start-up successes?
Starting business in a business incubator
_____ is the idea and actions that explain how a firm will make its profits.
Strategy
A combination in which the whole is greater than the sum of its component parts refers to
Synergy
Which of the following statements is true of price skimming?
It is not a long-term strategy for businesses to follow.
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 statements is true of an executive summary
It is the single most widely distributed written description of a business
Which of the following statements is true regarding the entry wedge of supply shortage?
It occurs when a new product is in demand
Which of the following is true of the entry wedge of second sourcing?
It provides a competitive pressure to ensure that suppliers keep providing the best service and prices.
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.
Which of the following terms refers to a paragraph that describes the firm's goals and competitive advantages?
Mission statement
Which of the following is true of the introduction stage of a product?
Most customers are unaware of the offerings.
Which of the following statements is true about products?
Most of the products sold today are combinations of both goods and services
_____ is the amount of money left after deducting the operating expenses of the business
Net Profit
Which of the following is a tactical action?
New distribution channels
Which of the following is a cost benefit?
Organizational practice
_____ 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.
Premium pricing
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
Which of the following pricing practices is the most inappropriate?
Pricing a product, advertised for high quality and prestige, lower than the competition
An item's capability of being touched, seen, tasted, or felt is called _____.
Tangibility
In the context of entry wedges, which of the following is the key benefit of rule changes by the government?
Technology
Which of the following is a key benefit of the entry wedge of customer contracting?
Technology
Which of the following is a value benefit?
Technology
Amounts and schedules for returns, stability of firm, funds use, and investment are most likely to be the major business plan concerns for _____.
family and friend investors
Which of the following is a critical risk to a business?
overlooked competition
A key employee/partner plan is also called a _____ plan.
summary
"WaterVision Cams: Atlanta's Only Underwater Cameras" is an example of a(n) _____.
tagline
A(n) _____ is a memorable catchphrase that captures the key idea of a business, its service, product, or customer.
tagline
The group of people on which a marketer focuses promotion and sales efforts is called a _____.
target market
When a product or service is sold in a limited area, for a limited time, it is referred to as _____.
test marketing
_____ is best described as the process of selling prototype of a product in either a real or simulated market environment.
test marketing
The core product typically includes
the basic description of what a company or a product does
The sales plan of a marketing strategy focuses on:
the day-to-day specifics of how sales are achieved.
In an industry life cycle, the shake-out phase ends when:
the rapid die-off of firms stops.
A good marketing strategy is most likely to focus on:
the sales plan that shows specific ways to secure sales from customers
Value benefits are important because:
they lead to higher prices.
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 _____.
total product
Gross profit is defined as:
what is left after deducting the cost of goods sold.
_____ is best described as the process of making a new product available to consumers
Commercialization
_____ is the particular way a firm implements customer benefits that keeps the firm ahead of other firms in the market.
Competitive Advantage
Which of the following is true of a private placement memo?
It is a complex legal document and should be drafted by a law
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
Which of the following plans is most likely to be useful for demonstrating a new technology or service?
A proof-of-concept Web site
Which of the following statements is true regarding special-purpose plans?
A proof-of-concept Web site asks viewers to provide feedback on the concept.
Which of the following statements is true of a vision statement?
A tagline or a slogan is a good way to present vision statements.
_____ is a strategic action.
Acquiring a competitor
Which of the following types of value benefits is most likely to be offered by a product if it helps the community, a group, the environment, or the world?
Altruism
If Connie gets her family and friends involved as investors, which of the following is most likely to be their concern?
Amounts and schedules for returns
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
Which of the following is most likely to be a major business plan concern for bankers?
Asset or collateral base
_____ is a value benefit that can come from the products or services that a business owner offers, or from his or her firm's reputation.
Brand
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 _____.
Bundling
_____ is the strategy of combining two or more products in one unit and pricing it less than if the units were sold separately
Bundling
A _____ is an organization that provides financial, technical, and managerial help to start-up businesses.
Business incubator
_____ strengthen the local economy by helping create jobs through the establishment of successful small businesses.
Business incubators
Which of the following will be an example of odd-even pricing?
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?
Captive pricing
_____ is described as setting the price for an item relatively low and then charging much higher prices for the expendables it uses.
Captive pricing
In Connie's business plan, which of the following components is most likely to be of interest to Mr. Johnson?
Cash flow and cash cycle
A law firm needs to present a business plan to government officials. Which of the following is most likely to be expected by the officials in the business plan?
Compliance with regulations and laws
Which of the following is the first step for performing due diligence?
Conduct extensive interviews with the sellers of the business.
Which of the following is the second step of a small business' strategic planning process?
Considering the customers and the benefits to offer them
Which of the following statements is true about coupons?
Coupons help customers remember the promoted product favorably.
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.
Which of the following is an example of a generic marketing strategy?
Differentiation
The process of investigating a business to determine its value is called:
Due dilidence
Which of the following is NOT a topic addressed in the executive summary?
Employee code of conduct
Which of the following components gives an overview of the business, its business model, market, expectations, and immediate goals?
Executive summary
Since the café is Connie's first business venture, which of the following risks is most likely to cause Mr. Johnson to evaluate her business plan negatively
Experience deficit
Which of the following statements is true of business plans?
External legitimacy for a firm is best established by creating business plans
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?
External reference price
Which of the following is characteristic of the boom stage in the life cycle of a product?
Firms begin to compete on features and prices.
Which of the following is a generic strategy that targets a portion of the market, called a segment or niche?
Focus strategy
_____ are classic strategies for businesses of all types and they include differentiation, cost, and focus.
Generic Strategies
In which of the following stages is there an explosion of choices in terms of products and services?
Growth stage
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 statements is true of a business plan presentation?
Handouts are mailed or distributed when the business plan changes frequently.
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?
Idea evaluation
Which of the following is the first stage of the new product development process?
Idea generation
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?
Idea screening
Which of the following pricing strategies is considered the most aggressive from the competition point of view?
Indulging in a price war
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.
Inelastic product
Which of the following types of plans describes a company and its product or service to potential customers or suppliers?
Informational plan
Which of the following is most likely to be the key information that joint venture partners seek in a business plan?
Intellectual property protection
_____ is referred to as the extent to which employees, investors, and family members involved in the business know the business's purposes and operations.
Internal understanding
A business plan that provides information to potential licensees is referred to as a(n) _____ plan
Invention
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 an elevator pitch?
Its goal is to sell the idea of a business to another.
Which of the following is a component of the 5-M model?
Mantra
Which of the following terms refers to the amount of profit an entrepreneur incurs, usually stated as a percentage of the total price?
Margin
_____ 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.
Markup pricing
Which of the following is a specialized legal form of business plan crafted by lawyers for the purpose of soliciting formal investments?
Private placement memorandum
Which of the following is a type of informational plan that solicits information on customer interests?
Proof-of-concept Web site
Which of the following terms refers to a special form of informational plan posted on the Internet that provides information or demonstration of a product or service?
Proof-of-concept website
Which of the following is most likely to be included in the title page of a classic business plan
Proprietary statement
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
_____ is typically a source for consumers' internal reference price.
Recollecting previous shopping experiences
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.?
Reference pricing
Which of the following parts of a business plan is focused on creating new products or services and preparing new technologies, ideas, products or services for the firm's market?
Research and Development
Which of the following is the best example for random discounting?
Sale on select merchandise
Which of the following business plans is also called a mini-plan?
Screening plan
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
According to Shepherd, Shanley, and Porter, which of the following is a small business supra-strategy?
Single-mindedness
Which of the following is most likely to be an example for an elastic product?
T-shirts
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 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
Which of the following is a major component of a classic business plan
The financials
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
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
Which of the following statements is true of the company section of a business plan?
The product/service subsection mentions any protection through a proprietary technology.
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 pure services?
They are heterogeneous
Which of the following is the biggest problem with simulated test markets?
They do not always reflect actual buying behavior.
Which of the following is an advantage of picking customer-desired benefits that a business owner's competitors do not offer?
They make the firm stand out from the competition
What is the goal of appendixes?
To provide supporting information that helps detail the key selling points of a plan
A(n) _____ is a very simple 5-10 word sentence or tagline that expresses the fundamental idea or goal of the firm.
Vision statement
Which of the following is the shortest business planning presentation in terms of the length of description?
Vision statement
A perceptual map is
a graphic display which positions products according to their scores on important strategic dimensions.
"Buy one large pizza and get a 25 percent off on the next purchase," is an example of _____.
a loyalty program
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 loyalty program
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
Craftsmanship and customization are examples of:
a supra-strateg
Which of the following is true of a differentiation strategy?
aimed at mass markets
Retrenchment is:
an organizational life cycle stage in which established firms must find new approaches to improve the business.
Price lining
attempt to appeal to several different markets; appeal to the high-, mid-, and low-end market.
By adopting the pricing technique of loss leaders, a firm most likely aims to
attract traffic toward its products.
A(n) _____ typically means the core product plus features that tend to differentiate the product from competition.
augmented product
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 _____.
bait pricing
Captive pricing
base system is sold at a relatively low price, but the expendables it uses are relatively expensive.
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 _____.
bonus-pack pricing
A type of life cycle growth stage marked by a very rapid increase in sales in a relatively short time is called the _____.
boom
A(n) _____ plan is a document designed to detail the major characteristics of a firm—its product or service, its industry, its market, its manner of operating and its financial outcomes with an emphasis on the firm's present and future.
business
In the context of entry wedges, market relinquishment occurs when:
business firms leave a market.
Price discrimination refers to
charging different prices to different groups, usually to attract a different demographic, such as senior citizens' discounts
Differentiation strategy is a type of generic strategy aimed at:
clarifying how one product is unlike another in a mass market.
The _____ section of a classic business plan contains the vision statement, mission statement, objectives, and background of a firm.
company
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(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
cover letter
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 _____.
customary pricing
Growth stage is an industry life cycle stage in which:
customer purchases increase at a dramatic rate.
The market section of a business plan primarily focuses on _____.
customers
Reference pricing refers
displaying two similar products side-by-side in ad or at the store but at different prices, implying the same product is available at a better price.
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
A(n) _____ is an action-oriented description of a business designed to sell the idea of the business to another.
elevator pitch
An opportunity that makes it possible for a new business to gain a foothold in a market is referred to as a(n) _____.
entry wedge
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
In the context of entry wedges, _____ occurs because government agencies, government-sponsored commercial contracts, and many big businesses have policies that provide for quotas for buying from small businesses.
favored purchasing
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
Critical risks, cash flow projection, balance sheet, and start-up costs are included in the _____ section of a classic business plan.
financials
Typically, for a start-up business the financials
give the monthly income and cash flow for the first year
Purchasing a car with a warranty is most likely to be an example of a _____.
good-dominated product
Which of the following is most likely to be a business plan concern for silent partners/angel investors?
growth rate
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
The _____ rate is the percentage of people who buy out of the total population of people approached for the sales of a product or service.
hit
Pure goods are more _____ than pure services.
homogenous
A research process that provides the entrepreneur with key information about other firms in the same line of business as his or her, the current situation and trends is known as:
industry analysis
Changes in competitors, sales and profits in an industry over time are referred to as:
industry dynamics.
Patents and trade secrets are examples of
intangibles
In new product development process, the product development stage typically involves
introducing product prototypes to test markets
The life cycle stage in which a product or service is being invented is known as the _____.
introduction stage
Skimming
is charging the highest price the market will bear.
As a firm gets more experience, it can often work with fewer mistakes and greater efficiencies, thereby lowering costs. This leads to the cost benefit of _____.
learning
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
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 5 M's of the 5-M model are
mantra, mission, measures, method, and mechanics.
In the _____ section of a classic business plan, sales plan, competitive plan, and growth plan are discussed.
market
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.
maturity
The _____ is marked by a stabilization of demand, with firms in the industry moving to stabilize or improve profits through cost strategies.
maturity stage
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 _____.
me-too products
In bonus pack pricing strategy
more than one unit of the same product are combined and sold at a low price.
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.
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.
new entrant
Charging lower prices at certain times to encourage customers to come during slack periods is known as _____.
off-peak pricing
Happy hours in amusement parks, movies, and restaurants are examples of
off-peak pricing
____ plans are designed to be used internally for management purposes.
operational
_____ refers to the highest price of a product that will produce the desired level of sales in the intended market.
optimum price
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 _____.
partitioned 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 _____.
penetration pricing
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
Service or product quality is most likely to be crucial in a business plan for _____.
potential customers
_____ involves introducing a product to potential customers and taking orders for later delivery.
preselling
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
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 _____.
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 _____.
price skimming
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 _____.
prototypes
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 _____.
prototypes
A(n) _____ is a part of a business or business plan that exposes the firm to any kind of loss
risk
Buying in volume usually produces savings. This leads to the cost benefit of _____.
scale savings
A(n) _____ plan gives the basic overview of a firm and a detailed look at the financials
screening
Penetration pricing refers to
setting a low price in order to get market share.
_____ is a type of life cycle stage following a boom in which there is a rapid decrease in the number of firms in an industry.
shake-out
North American industry classification system (NAICS) codes have _____ digits.
six
The primary goal of penetration pricing is to
steal competitors' market share.
Which of the following terms means "let the buyer beware"?
Caveat emptor
Which of the following is most likely to increase the odds of successes for a start-up?
Choosing a business that produces high margins
Which of the following would be a plus point for starting a new business?
Clean slate to begin
_____ provides an organization through which independent businesses may combine resources.
Conversion franchising
_____ analysis is based on the concept that the longer you have to wait to receive money, the less valuable it is right now.
Discounted cash flow
_____ are the cash flows that have been reduced in value because they are to be received in the future.
Discounted cash flows
Which of the following refers to income capitalization?
Dividing projected net income excluding depreciation, interest, and owner draws, by the best return that you could expect to obtain in other investments
_____ are rules of thumb that are commonly used to estimate firm value in relation to some easily observable characteristic of the business.
Heuristics
Which of the following provides a buffer for the mistakes made by a start-up business?
High Margins
The single greatest hurdle to a successful start-up is obtaining and maintaining sufficient cash to support both operations and growth. Which of the following is needed by a successful start-up to overcome this hurdle?
High margins
Which of the following is most likely to be achieved as the result of starting a business with established customers?
Immediate cash flows
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.
Which of the following ensures that a new business will be critically examined by outsiders who have no vested interest in the owners' idea, product, or service?
Securing outside investment
Which of the following is true of niche markets?
They are specific and narrow.
In many franchises the franchiser oversees (or even manages) the selection of location, the construction of facilities, the acquisition and installation of necessary equipment, and the initial inventory with which to open business. Which of the following terms best represents this type of franchising?
Turnkey
Which of the following is a disadvantage of buying a franchise?
You give up control of marketing and operations
Amy plans to open a laundromat with a gym. She got the idea from the laundromat with a bar and game rooms, which she visits regularly. She wants to test her idea by starting out in a small space with the focus on the laundromat and a small space allocated for gym equipments. Amy's idea is an example of _____.
an incremental innovation
A _____ is a narrowly defined segment of the population that is likely to share interests or concerns
niche market
