Entrepreneurship - Ch 9 Quiz

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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

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

Which of the following will be an example of odd-even pricing?

Buy a T-shirt for $19.89

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.

True or False: Using a single reputable source is adequate when performing secondary analysis.

False

The new product development process is likely to be easier for services than for innovative goods.

____ is best described as the process of selling prototype of a product in either a real or simulated market environment.

Test marketing

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

"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

Marketing data gathered by simple observation - seeing what customers do, rather than asking them is:

ethnographic research.

For me-too products, the stages of new product development are always extensively long.

false

Services have separability of production and consumption.

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 primary goal of penetration pricing is to:

steal competitors' market share.

Which of the following is true of the debt-to-equity ratio?

"If the ratio is greater, it indicates increased business risk."

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 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

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

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.

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

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.

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.

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.

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.

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

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.

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.

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.

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.

_____ 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

_____ 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

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.

Which of the following plans is most likely to be useful for demonstrating a new technology or service?

A proof-of-concept Web site

Differentiation strategies

A type of generic strategy aimed at clarifying how one product is unlike another in a mass market. Page: 201

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

_____ 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 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

_____ 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

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.

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

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

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.

_____ 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

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:

Which of the following is most likely to be a major business plan concern for bankers?

Asset or collateral base

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.

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

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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).

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

_____ 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

________ 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

_____ 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

B. It is the process of selecting the most promising ideas to be further evaluated for feasibility.

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

_____ 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

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

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

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

_____ is the practice of trading goods and services without the use of money.

Barter

"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

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 ways does borrowing help increase potential profits?

By providing capital funds for additional business opportunities

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.

Giveaways, samples, and tastings are examples of ________ techniques used in sales promotion. A. contest B. loyalty C. introductory D. discounting

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.

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.

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

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

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

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

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.

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.

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

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.

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.

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

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.

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.

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

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

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.

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.

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.

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.

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.

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.

_____ 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.

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

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

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 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.

_____ 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

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 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

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

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

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.

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

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.

_____ is a schedule of the amounts and timings of the cash coming into a business.

Cash receipts budget

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 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

Which of the following is an example of a cash equivalent?

Commercial paper

"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

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

A _____ is an example of a low customer contact business. A. retail establishment B. medical or legal office C. restaurant 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

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.

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.

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

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

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.

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

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.

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?

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.

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.

_____ 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

_____ refers to business owners doing what they said they would do. A. Trendiness B. Cognitive dissonance C. Follow-up D. Follow-through

________ 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

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.

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

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

_____ 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

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

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

Pure goods are more _____ than pure services. A. perishable B. inconsistent C. inseparable D. homogenous

D. homogenous

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

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

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

Which of the following is the first step of a business's marketing plan?

Discussing the target market of the business

"Which of the following international strategies is usually inexpensive, quick to start, easy to change, and less risky than the others?"

Exporting

A direct mail approach needs major inventory investment.

A legal obligation to pay money in the future is called equity capital.

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.

Advertising costs are usually based on cost per hundred thousand.

Brochures and flyers are types of promotional novelties.

Disposal value is based on determining the price of either a new asset or a used asset for which there is an organized market.

Distributors and wholesalers prefer taking on start-up products as there are no setup charges involved.

E-tailers have high overhead and limited shelf space.

Exporting is usually expensive, difficult to start, and more risky than licensing, franchising, or joint ventures.

Face-to-face meetings with the client are infrequent if the services are provided at the client's location.

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.

For me-too products, the stages of new product development are always extensively long.

Guerilla marketing is a form of communication that encourages the customer to act immediately, such as coupons, sales, or contests.

If your business is wholesale or retail merchandising, the issues of property, plant, and equipment (PPE) constitute your greatest investments and your greatest costs.

In the U.S., government programs are the number one source for financing small businesses.

Knowing one's personal worth is not important when starting a business.

Personal selling decreases business owners' flexibility in their presentation.

Planning, organizing, and staffing are primarily the responsibility of operations management.

Press relations are a form of communication that encourage the customer to take immediate action.

Services have separability of production and consumption.

Something that is essential to how you live and does not have many substitutes or alternatives is called an elastic product.

The method of advertising is least likely to be used by businesses to convey their message to potential customers.

The process of dividing the market into smaller portions of people that have certain common characteristics is called stereotyping.

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.

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.

When coming up with a new idea in the product development process, the focus is on the pains and gains of customers.

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.

When the fear appeal used by a marketing message is a too strong, it always causes the audience to react positively.

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

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

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

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

Small businesses typically use the strategy of innovativeness rather than imitativeness.

False Page: 186

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

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

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

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

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 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

_____ 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

Which of the following is most likely to be a business plan concern for silent partners/angel investors?

Growth rate

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

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

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

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

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

Which of the following is a component of the AIDA formula that aims to hook people to the press release?

Interest

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.

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

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.

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 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.

"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.

Which of the following is true of an LLC?

LLCs have a choice of being taxed as either corporations or partnerships.

_____ 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?

Mail

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

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 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 statements is true about products?

Most of the products sold today are combinations of both goods and services.

_____ 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

_____ questions provide data that are difficult to tabulate and compare.

Open-ended

_____ plans are designed to be used internally for management purposes.

Operational

Which of the following is a critical risk to a business?

Overlooked competition

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

"Which of the following layouts is most appropriate for low-volume, flexible manufacturing? "

Process layout

Which of the following strategies is central to the process of upselling?

Product expansion

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

Which of the following is a disadvantage of leasing?

Renovation options are limited in a leased property.

_____ 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

Which of the following is a way to collect secondary data?

Researching on the Internet

_____ measure a management's effectiveness in using the invested capital of the business to provide profits.

Return on investments

The first step in preparing a master budget is to prepare a _____ budget.

Sales

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 _____.

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

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.

A product can include goods, services, and ideas.

Access for employees and reasonable cost are critical for businesses with low customer contact.

Advertising is often used to support the corporate identity and value propositions that are established through public relations efforts.

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.

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.

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

Equifax is one of the four primary CRAs in the United States.

Every business faces risks in the real world, so every business plan needs to spend some time addressing them.

Executive summaries are written in a formal style, suitable for investors, bankers, and lawyers to read.

Giveaways, samples, and tastings are all examples of introductory techniques used in sales promotion.

In the context of a business plan, product quality, its benefits, service quality, and the competitive advantage are the primary concerns of potential customers

Intangibility, inseparability, and perishability are the three characteristics of services that impact operations choices and decision making.

Investing in multiple businesses increases the chances of offsetting possible losses incurred from one business.

It is customary for a small business to concentrate its efforts on one target market at the beginning and consider secondary ones later.

It is good to opt for distributors when a whole line of products need to be bought or warehoused.

It is nearly impossible to design a message that will appeal universally or to find media that will reach all consumers.

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.

Money borrowed for the purpose of investment in a business is called debt capital.

Obtaining outside equity financing can only be done if your business is organized as: a partnership, a corporation, or a limited liability company.

One of the policies for managing customer credit requires business owners to maintain constant "aging" of accounts to quickly identify customers who become delinquent.

Operational plans and private placement memos are the only two types of plans that add material to a full business plan.

Payments of profits to the owners of corporations are called dividends.

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

Promotion includes getting the message out to the target market so that they can make decisions about a product or service.

Radio advertisements provide both geographic and demographic segmentation of a product or service.

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.

Skimming, odd-even pricing, and price lining are three possible pricing strategies available to small businesses.

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.

The concept of total product includes how customers describe one's good or service.

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

The financial statements in a business plan include income statements, cash flow, balance sheet, and their respective assumptions.

The majority of small business start-ups are funded by bootstrapping.

The primary areas for conflict resolution in exporting include nonpayment and contract default issues.

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.

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.

The value delivered to the customer is second in order of importance to the pricing decision.

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.

When pricing your product, the optimum price is the highest price that will produce your desired level of sales in your intended market.

Your estimated number of prospective customers multiplied by your hit rate multiplied by the amount of each sale equals your sales forecast.

Your hit rate is how many prospects or leads you need to approach in order to make one sale. Also called the conversion rate.

Which of the following is true of business locations?

Target market customers are essential factors for selecting business locations.

"_____ 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

"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

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

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

"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

more tracked prospects making initial purchases.

The proof of a CRM effort is seen in:

feasibility study

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 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.

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.

"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

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 product can include goods, services, and ideas.

True

Access for employees and reasonable cost are critical for businesses with low customer contact.

True

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

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

Giveaways, samples, and tastings are all examples of introductory techniques used in sales promotion.

True

If a rapid prototyping model can be developed, the molds for manufacturing can be made inexpensively by most modern manufacturers.

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 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 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

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

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

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

Skimming, odd-even pricing, and price lining are three possible pricing strategies available to small businesses.

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

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

The usefulness of the income statement for managing a small business is related to the amount of detail available in the statement.

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: 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

When pricing your product, the optimum price is the highest price that will produce your desired level of sales in your intended market.

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

The new NAICS covers more industries than the SIC.

True. Page: 189

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

Which of the following primary research methods is the least expensive for small businesses?

Using online survey services

Which of the following is the shortest business planning presentation in terms of the length of description?

Vision statement

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?

Market penetration

Which of the following is used when selling to existing customers?

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?

Sales promotion

_____ is a form of communication, such as coupon or contests, which encourages the customer to take immediate action.

"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

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

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

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

Something of value given or pledged as security for payment of a loan is called _____.

collateral

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

"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

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

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

"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

"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

Crowdfunding refers to:

funding a business online through gifts made to the business.

"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

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

Which of the following statements is true regarding the balance sheet?

it's values are considered as historical values.

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

"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

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

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

Training and flexible hours are a part of the _____ strategy used to control money that is expected to leave the firm.

noncash incentive

"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

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

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

"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

"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

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

"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

"A(n) _____ is a middleman business which sells to consumers or end-users of a product, typically in single or small quantities."

retailer

"With regard to marketing research, _____ refers to information already collected for some other purpose than the current problem. "

secondary research

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.

A business formed by an individual who is responsible for all debts and claims against the business is called a

sole proprietorship

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

Industry analysis is defined as the technique used to:

study the dynamics and trends of an industry. Page: 186

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

"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.

The weighted average cost (WAC) refers to:

the expected average future cost of funds.

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

The most common strategy employed by small businesses for handling money shortages is _____.

using personal money

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

The process of determining the effect of price and quantity changes on revenues and expenses refers to:

variance analysis.

"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

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

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

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

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

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.

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.

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.

In the context of a business plan, a firm's responsiveness to customers is a key concern of bankers

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.

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.

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

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 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

"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

Selling your product or service in a limited area, for a limited time is known as parallel marketing.

off-peak pricing

Charging lower prices at certain times to encourage customers to come during slack periods is known as _____.

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.

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.

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

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 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

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

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

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:

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 not true concerning marketing and marketing plans?

Not all business plans have a marketing section.

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

Legal business organizations are artificial entities that exist separately from the owners.

True. Page: 171

It handles problems that crop up after a sale.

Which of the following is true of customer retention?

Indulging in a price war

Which of the following pricing strategies is considered the most aggressive from the competition point of view?

It is not a long-term strategy for businesses to follow.

Which of the following statements is true of price skimming?

Margin

Which of the following terms refers to the amount of profit an entrepreneur incurs, usually stated as a percentage of the total price?

Bundling

_____ is the strategy of combining two or more products in one unit and pricing it less than if the units were sold separately.

feasibility study

"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

"In new product development process, the product development stage typically involves: "

introducing product prototypes to test markets

When conducting primary research and comparing various survey methods, the least expensive method is the:

online survey

"A service typically exhibits the characteristic of _____ because if it is not used when offered, it cannot be saved for later use. "

perishability

"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

A business plan that provides information to potential licensees is referred to as a(n) _____ plan. A. screening B. invention C. operational D. concept

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

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.

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

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.

cognitive dissonance

Doubt that occurs after a purchase has been made is called _____.

A screening plan provides information on the company, product/service, market, and critical risks to prospective business.

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: 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 service typically exhibits the characteristic of _____ because if it is not used when offered, it cannot be saved for later use.

Perishability

Price lining

A product can include goods, services, and ideas.

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 new product development process is likely to be easier for services than for innovative goods.

true

When coming up with a new idea in the product development process, the focus is on the pains and gains of customers. True/False

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