Review of Chapter 12 and 15

A _____ systematically articulates a business's product, price, distribution, and promotion strategy, and it also clearly identifies the business's target market and competition. A. marketing plan B. balance sheet C. documentary draft D. mission statement

A marketing plan is a systematic written plan of all phases of marketing for a business, including information on the product, price, distribution, and promotion strategy, as well as a clear identification of the target market and competition. At the absolute minimum, a marketing plan will help articulate what a business or an entrepreneur is going to do.

Which of the following is true of an LLC? A. LLCs are the same as partnerships. B. LLCs have a choice of being taxed as either corporations or partnerships. C. LLCs are a legal form of business that have no flexibility regarding taxes. D. LLCs are the same as S-corporations.

B. LLCs have a choice of being taxed as either corporations or partnerships. Limited Liability Companies (LLCs) are a relatively new form of organization whose primary advantage is that owners may easily choose whether to be taxed as corporations or partnerships. Corporations, S-corporations, and partnerships have no choice of tax treatment.

_____ is best defined as the systematic collection and interpretation of data to support future marketing decisions. A. Marketing quotation B. Marketing research C. Marketable security D. Market capitalization

B. Marketing research

A(n) _____ is a legal obligation to pay money in the future. A. equity capital B. stake C. debt D. gift

C. debt A debt is a legal obligation to pay money in the future. Debt can take many forms. A business may borrow money directly from banks, development agencies, governments, or individuals.

A business formed by an individual who is responsible for all debts and claims against the business is called a: A. limited liability company. B. conglomerate. C. partnership. D. sole proprietorship.

D. sole proprietorship. A business formed by a single individual who is responsible for all debts and claims against the business is called a sole proprietorship. Sole proprietorships are not separate from their owners, and thus there is no specific documentation that creates their existence.

The marketing plan is a one-time process that should not be revised once formulated.

FALSE The marketing plan is not a one-time process. It's the basic building block for a business plan and the road map to what one wants to do, but it shouldn't be set in concrete. Successful businesses are constantly tweaking their marketing plan to accommodate necessary adjustments found during evaluation and control reviews, or to reflect new research, changes in the environment, changes in competition, new target markets, new opportunities in promotion, new anything.

A marketing plan is not required if a person plans to use his or her own personal savings and direct marketing. True or False

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.

What are the 4 Ps of Marketing

Product, Promotion, Price and Place

During the start-up phase of a small business the emphasis is on conserving what little cash the new business has. True or False

TRUE During the start-up phase of your business, you will use financial management techniques where the emphasis is on conserving what little cash the new business has.

Identifying competition helps a business get an idea of how crowded a market is. True or False

TRUE Identifying competition does two things for a business. First, it can get an idea of how crowded the market is. The second piece of information identifying competition helps the business find out what its strengths and weaknesses are.

People who buy ownership rights but are not part of the management of the business are known as outside equity investors. True or False

TRUE Outside equity is money from selling part of one's business to people who are not and will not be involved in the management of the business. People who buy ownership rights are considered outside equity investors.

Majority of small business start-ups are funded by bootstrapping. True or False

TRUE The practice of using one's own capital and funds generated by operating the business to finance start-up and growth is generally called bootstrapping. Bootstrapping is how the great majority of small business start-ups are funded.