Entrepreneurship Midterm
Chapter 1
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Chapter 1 Dynamic
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Chapter 2
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Chapter 2 Dynamic
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Chapter 3
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Chapter 4 Dynamic
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Chapter 5
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Chapter 5 Dynamic
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Chapter 6
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Chapter 6 Dynamic
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A ___________ pricing strategy is one of the most commonly used and easiest to calculate.
A ___________ pricing strategy is one of the most commonly used and easiest to calculate.
Which statement is true of a business plan?
A business plan is used to analyze markets and opportunities in realistic terms before securing financing.
All of the following are true of the marketing plan except:
A marketing plan cannot be a stand-alone document.
Which of the following describes a profit?
A positive gain from operations after all expenses are subtracted.
Essentially, a business plan is _____.
A story of what the business is and what it hope to be
Which of the following is not one of the factors considered for the level of threat of substitute products or services?
Access to distribution channels
In which step of the sales call should you offer discounts or other incentives to customers who help identify other potential customers for you?
Asking for references
_____ is a method that analyzes the underlying value of a business's assets as a basis for negotiating a price.
Asset valuation
What type of entity is formed with the intention of addressing social or other issues, with any profits going back into the organization to support its mission?
A not-for-profit organization
Which of the following is NOT one of the "five roots of opportunity"? A. Inventions of new products or services B. Implementation of new organizational designs C. Problems your business can solve D. Competitive advantages in attributes of importance to customers E. Technological advances that entrepreneurs take from the laboratory to the marketplace
B. Implementation of new organizational designs
Which of the following is a disadvantage of the Internet as an advertising media?
Banner ads feed click-throughs to full ads
If you are an existing, well-established firm within the industry, which of the following forces would you want to be high?
Barriers to entry
Which principle of selling will help a salesperson make a good personal impression?
Be clean and well dressed
Which of the following is the market segment where brand loyalty or responsiveness to price is observed?
Behavioral
_______ distinguishes goods or services through a design, symbol, name, term, or other features.
Brand
A(n) ___________ is a visual representation of a Lean Startup's core business hypotheses.
Business Model Canvas
According to the text, which statement most accurately describes business plans?
Business plans should provide as much detail as possible on how investments will be used.
Which of the following statements about philanthropy is not correct?
Businesses that generate profits can afford to be philanthropic because donations must be monetary.
Joseph Schumpeter described five basic ways that entrepreneurs can find opportunities to create new business? Which of the following is NOT included in Schumpeter's definition? A. Developing a new market for an existing product B. Finding a new supply of resources to produce an old product in a new way C. Carrying on a family business tradition D. Using a new technology to produce a new product E. Using an existing technology to produce a new product
C. Carrying on a family business tradition
Which of the following is NOT a potential benefit of entrepreneurship? A. Control over working conditions B. Control over time C. Dependency D. Control over compensation E. Fulfillment
C. Dependency
Offering a clear and compelling vision for the organization that inspires others to commit to it is referred to as _____. A. collaboration B. ethics C. leadership D. critical thinking E. communication
C. leadership
Which valuation method uses projected future cash flows and the time value of money to determine the worth of a business?
Cash flow valuation
Which section of the business plan identifies the legal form of the business?
Company description
Your business has a reputation for producing high-quality, low-price products at a fast pace. This would be an example of which root of opportunity in the marketplace?
Competitive advantage
Which of Porter's five forces is generally the strongest industry force and is influenced by all other forces?
Competitive rivalry among existing firms
Although not ideal, this method of promotional budgeting entails researching your competitors to determine their level of spending?
Competitive spending method
How can a small business profit from the ideas, suggestions, and complaints of present and former customers?
Conduct a satisfaction survey
Which of the following refers to the cost of the direct labor used plus the cost of delivering a service?
Cost of services sold
Which of the following is/are NOT business-to-business sales promotional tools?
Coupons
_________ refers to company-wide policies, practices, and processes that a business uses with its customers to generate maximum customer satisfaction and optimal profitability.
Customer relationship management
The company-wide policies, practices, and processes that a business uses to manage its interactions with customers to generate maximum customer satisfaction and optimal profitability are best described as:
Customer relationship management (CRM) systems.
In which area of business can a small business outperform its larger competitor?
Customer service
______refers to everything a business does to keep the customer happy.
Customer service
Which of the following is the practice of learning as much about purchasing an existing business as you possibly can before the purchase decision is made? A. Competitive advantage B. Franchising C. Acquisition D. Due diligence E. Exploitation
D. Due diligence
________ is also known as entrepreneurial thinking.
Effectual logic
Which of the following BEST describes breakeven?
Fixed costs are covered by sales but no profit has been made
Business plans should do all of the following except:
Include technical jargon your audience may not understand.
Which type of document summarizes income and expense activity over a specified period and shows net profit or loss?
Income statement
__________—who sellmultiple, non-competing product lines within a specific industry or geographical area— can be used to quickly build a national presence while keeping commission as a variable cost.
Independent sales representatives
Which of the following is a disadvantage of social media marketing?
Requires constant monitoring
Which of the following statements about the "closing the sale" step of the eight-part sales call is true?
Some sales take months or years to close.
Which of the following is not a suggestion for providing excellent customer service?
Suggest a more expensive product to increase sales, even if the customer doesn't need it.
The ability to work well with internal and external stakeholders to achieve business success is reflective of which of the following skills you will develop by utilizing this book?
Teamwork and collaboration
All of the following are secondary research methods except:
Telephone surveys
Which of the following statements about selling is not accurate?
Telling customers about features sells a product.
Which of the following is not a competitive advantage?
Temporarily undercutting a competitor's already low prices.
Which of the following components of the business definition addresses the bundle of tangible products or intangible services along with their benefits?
The offer
According to the text, what is the common mistake made by many inexperienced sales people?
Thinking that an emphasis on product features will sell the product
Which of the following statements is not true about establishing a sales force with internal employees in your own company?
This is the most cost-effective option for creating a sales force.
Which of the following BEST represents the goal of customer relationship management?
To affirm that customer service is an aspect of marketing
What is the essence of good customer service?
To build positive relationships before and after a sale
Which of the following is an example of primary research?
Written surveys
Which of the following statements about the principles of selling is correct?
You should make an appointment.
An entrepreneur who receives a percentage of the value of a sale is being paid ______.
a commission
Which of the following would be considered a "benefit" of a drill?
a hole can be created
A plumber fixing a leak in your home is an example of what?
a intangible service
A brief, written statement that informs customers and employees what an organization's goal is and describes the strategy and tactics to meet it is referred to as ______.
a mission statement
The plan for how an organization or individual intends to outperform competitors is known as ______.
a strategy
Earnings valuation is a method that assesses the firm's value based upon:
a stream of earnings multiplied by an agreed-upon factor or price/earnings ratio.
Which of the following statements is correct regarding ideas and opportunities?
an opportunity has a unique characteristic that distinguishes it from an ordinary idea
Market research should be conducted _______.
before you open your business
All of the following statements about causal logic are true except it is:
best applied in entrepreneurial situations of uncertainty.
A product is all of the following except it:
cannot be touched
Primary research is:
conducted directly on a subject or subjects.
According to Jay Conrad Levinson's study of the furniture industry, ______ is the primary influence on buying patterns.
confidence in the product
The ____________ component of the alternative marketing mix corresponds to the element of place in the original marketing mix.
convenience
The fundamental ethical and moral philosophy and beliefs that form the foundation of the organization and provide broad guidance for all decision making are best described as the organization's:
core values.
If an entrepreneur wants to analyze the cost of producing a tangible item, he or she should look at the ________.
cost of goods sold
The primary roles of the business' marketing plan include all of the following except:
detailing the variable product costs and operational budget.
Before meeting with bankers and other potential investors, entrepreneurs should __.
develop a business plan
When writing a business plan, you should _____.
develop a plan that is unique to your business
A study to assist in making the go/no go decision based on a close examination of product/service, market, industry, and financial data is called a(n) __________.
feasibility analysis
According to the Customer Service Institute, it costs about _____ times as much to attract a new customer as it does to keep an existing one satisfied.
five
A mission statement is all of the following except it:
includes learned behaviors shaped by company leadership.
The income statements included in the financial section of the business plan are a financial document that summarizes:
income and expense activity over a specified period of time.
In a free-market system, ____.
individuals and companies may compete for their own economic gains
The first offering of corporate stock to investors on the open (public) market is referred to as a(n)__________.
initial public offering
Joseph Schumpeter expanded Say's definition of entrepreneurship by suggesting that _____.
innovation is the key to entrepreneurship
Brand spiraling is described as:
integrating a company's conventional offline branding strategy with its Internet strategy to drive traffic to its online sites.
At which stage of the product life cycle is it important to educate the consumer about the product?
introduction
The first stage of the product life cycle is:
introduction
The product life cycle consists of the following four stages that a product or service goes through as it matures in the market:
introduction, growth, maturity, and decline.
Travel Now, a new last-minute travel agency, wants to generate some publicity and provide the "who, what, when, where, why, and how" details of the company. Travel Now should_____.
issue a press release
All of the following statements of industry research are true except:
it focuses on demographics of individual consumers.
All of the following are considerations affecting site location decision except:
labor availability and costs.
Mick Wood is considering buying a firm. Which method of valuation should he consider if he wants to identify the minimum value of the firm?
liquidation value
Instead of posting messages or ads immediately on a social network site, you can ________ for a while by reading messages without participating in the
lurk
If you find a website or newsgroup with a discussion feature, you might consider _____ to get a feel for the group before you post something about your business.
lurking
Generally, what is the optimal location for a retail business?
near the target market
If Joe became an entrepreneur because he lost his job and starting his own business was the best option to provide for his family, he is a(n):
necessity-based entrepreneur.
Process, people, and physical evidence are:
new elements of an extended marketing mix of seven Ps.
According to the text, it is important to write a business plan before starting a business in order to _______.
organize the entrepreneur's thoughts
Offering a product for a lower price during the early stages of the life cycle in order to gain market share is referred to as _____.
penetration pricing
A(n) _____ is something that exists in nature or is made by human beings and can be physically touched.
product
Among the four Ps of marketing, ____ is the item that you actually sell.
product
Something that exists in nature, is human-made, and tangible is best described as a(n)
product
The amount of earnings remaining after all costs are deducted from the income of a business is called ______.
profit
_____ is/are carried out indirectly through existing sources.
secondary research
Research that is carried out indirectly through existing resources is best described as:
secondary research.
The target market is best described as the:
segment of the market you are aiming to serve.
Providing a wider range of choices than your competitors is an example of which of the following factors of competitive advantage?
selection
Which term describes the specific ways in which a business carries out its strategy?
tactics
The cash flow valuation method determines the firm's value based upon:
the future projected cash flows and the time value of money.
Which three elements should be part of a solid business definition?
the offer, the target market, and the production and delivery capability
Which sales person is most likely to succeed?
the one who focuses on the benefits of owning the product
What is opportunity cost?
the value of what must be given up to obtain something else
Michael Porter argues that buyers have the most power when __________.
they are concentrated
Which of Porter's five competitive forces would apply in the following scenario: With the arrival of Netflix and Redbox, offering alternative rental options to customers, video rental stores suddenly saw competition that they had not anticipated.
threat of substitutes
Opportunity cost is the:
value of what must be given up to obtain something else.
Although uncommon, some entrepreneurs pay themselves a _______, which is a fixed rate per hour.
wage
An elevator pitch should be about ________ long.
30 seconds to 2 minutes
Customer service is best described as:
everything a business does to keep the customer happy
Which element of a business plan provides a snapshot of the business?
executive summary
In which stage of the product life cycle do competitors begin to enter the market?
growth
in addition to achieving profitability, social entrepreneurship _______.
has a goal of attaining beneficial returns for society
In addition to achieving profitability, social entrepreneurship _______.
has a goal of attaining beneficial returns for society.
As defined by the Small Business Administration (SBA), a small business:
has fewer than 500 employees and sells less than $5 million annually.
All of the following are common standards for asset valuation except:
historical earnings value.
The economics of one unit of sale calculations reveal:
how much gross profit is being earned on each unit of the product or service that is sold.
Markets may be identified by all of the following characteristics except:
hypothetical
Which of the following is not considered one of the five roots of opportunity in the marketplace for entrepreneurs to exploit?
ideas
When making a sales call, visualizing your product or service fulfilling a need will help you _____.
identify what the customer needs
All of the following statements about economics of one unit are true except:
if one unit of sale is not profitable, the business can still be successful.
All of the following are advantages to social media marketing except:
long shelf-life
Reading messages and getting a feel for discussions on a website, newsgroup, or the like, without participating in the online conversation, refers to _____.
lurking
During a sales call, you should:
make the customer aware of your product or service.
Burger King's "Have It Your Way" campaign is an example of ______.
market positioning
The collection and analysis of data regarding target markets, industries, competitors is defined as:
market research
The collection and analysis of data regarding target markets, industries, and competitors is known as ______.
market research
A __________ is a group of consumers or businesses that have a similar response to a product or service.
market segment
A group of consumers or businesses that have a similar response to a particular type of product or service is called a(n) _______.
market segment
The development and use of strategies for getting a product or service to customers and generating interest in it is referred to as _______.
marketing
Nike's "Just Do It" advertising is an example of ______.
marketing
The product, price, promotion, and place are the "Four Ps" that comprise the:
marketing mix.
Which type of pricing approach uses a predetermined percentage applied to a product's cost to obtain its selling price?
markup
Assume your company sells a high-speed hair dryer. You've been in business for a number of years, but you have noticed that sales have leveled off and the market is very crowded with other manufacturers of similar hair dryers. In the Product Life Cycle, which stage would you be in?
maturity
Promoting brand loyalty becomes essential in the ______ stage of the product life cycle.
maturity
If ABC Solutions Inc. has created a minimal viable product, their intentions are to:
maximize customer feedback and minimize effort.
A company that is constantly matching or undercutting the prices of the competition is using a _______ approach to pricing.
meet-or-beat the competition
A trusted advisor with whom a person forms a developmental partnership through which information, insight, skills, and knowledge are shared to promote personal and/or professional growth is known as a ______.
mentor
A _______ is a concise communication of strategy, including a business definition and an explanation of competitive advantage.
mission
A brief written statement of the organization's goal, along with strategy and tactics for meeting that goal, is referred to as a(n):
mission statement
As compared to typical products, fad products move ______ through the product life cycle.
more quickly
All of the following statements about not-for-profit organizations are true except
not-for-profit organizations accrue profits for investors.
Grouping ________ and customer comments into categories or headings such as price, performance, competition, and support can aid salespeople in turning them into advantages.
objections
If you have established specific, measurable promotional objectives, and set aside a promotional budget to reach these objectives according to your marketing strategy and tactics, you are using the ___________ for establishing a promotional budget.
objective and task method
A company that uses secret shoppers is using ___________ as a research approach.
observation
The simplest way to determine a promotional budget is __________.
percentage of sales
_____ is dealing with customers face-to-face and trying to convince them to make a purchase.
personal selling
the Key Resources section of the Business Model Canvas includes the:
physical, financial, intellectual, and human needs that are critical to making the model function.
Clearly communicating your competitive advantage to your consumer about how your product or service is different from your competitor is best described as:
positioning
Distinguishing a product or service from similar products or services being offered to the same market refers to _______.
positioning
If you are sending an announcement to the media to generate publicity by telling them the "who, what, when, where, why, and how" of a story, you are sending a:
press release.
Sears' product lines of "good, better, best" are examples of the _________ strategy.
price lining
The process of creating graded pricing levels for products is an example of the __________ strategy.
price lining
Research that is conducted directly on one or more specific subjects is referred to as _____ research.
primary
The marketing mix consists of all of the following Ps except:
principle
Advertising, public relations, and direct marketing fall under the __________ component of the marketing mix.
promotion
The use of advertising and publicity to get a marketing message to customers is referred to as _______.
promotion
The people or organizations that may be receptive to your sales pitch are referred to as:
prospects
A green entrepreneurship is best described as a business that:
protects, or prevents harming, the environment.
If a newspaper writes an article about your business, it is _______.
publicity
Which of the following is not one of the considerations or factors that impact a country decision for a business location?
Zoning restrictions
As an entrepreneur, it's important that you view marketing as all of the following except:
a business function that operates separately from other business departments.
A market is defined as a group of people or organizations that are all of the following except:
are not interested in buying a product.
Selling directly with a company sales team means that salespeople:
are your company's employees.
Standards for the __________ valuation method include book value, adjusted book value, liquidation value, and replacement value to determine a firm's value.
asset
Creating a business plan can help you do all of the following except:
avoid ever making any mistakes.
Which of the following are words that are appropriate to use when dealing with customers?
regret
All of the following are suggested headings for grouping objectives into except:
requirements
Establishing a company sales team with your own employees:
requires recruitment of top talent.
If your firm is utilizing the competitive spending method for promotional budgeting, you are likely:
researching your competitors to determine their level of spending.
The environmental analysis portion of the opportunity analysis and research section includes the:
roles of the community, region, nation, and world relative to your business.
The factors that contribute to the ease or difficulty of a new competitor joining an established market is known as _____.
barriers to entry
Expensive legal fees in an established high-technology industry, which contribute to the difficulty new businesses face when attempting to enter the market, are considered to be:
barriers to entry.
A _____ is that which distinguishes goods and services through design, symbol, name, term, or other features.
brand
If you want to drive traffic to your online website by integrating your company's conventional offline branding strategy with you Internet strategy, this is best accomplished through:
brand spiraling.
Calculating the _________ will help a business owner determine if a business can cover the fixed costs with the number of units he or she expects to sell.
breakeven point
All of the following are true about closing the sale except:
broaden the choices the customer must make during closing.
A(n) _____ is a document that thoroughly explains a business idea and how it will be carried out.
business plan
Another name for word-of-mouth marketing is ______.
buzz marketing
Sally is an entrepreneur. She pays herself $65,000 annually in addition to 8% of the total annual sales. Sally is paying herself a:
salary and a commission.
What type of research is carried out indirectly through existing resources?
secondary
All of the following statements about a business plan are true except:
serious investors will still meet with you, even if you don't have a business plan.
Peter Drucker argued that for a business to be considered entrepreneurial it ___.
should exploit changes in the world
The opposite of penetration pricing is the _____________.
skimming pricing strategy
The clear majority of businesses are:
small businesses.
The organization's vision is all of the following except it is:
smaller and more narrow than the organization's mission.
A for-profit enterprise with the dual goals of achieving profitability and attaining social returns is best described as:
social entrepreneurship.
The breakeven point is the moment at which a business has:
sold enough units to equal its fixed costs.
The term for unwanted Internet advertisements or emails is ______.
spam
Using technology to sell should include all of the following except:
spam advertisements or emails.
A unicorn is a:
startup company valued privately or publicly at over $1 billion.
Undercover or deceptive marketing efforts that are intended to appear as if they happened naturally are referred to as ________.
stealth marketing
One of the potential costs of entrepreneurship is:
strain on relationships.
When a logo has been registered with the U.S. Patent and Trademark Office to protect it from being used by others, it becomes a _________.
trademark
When you register a logo with the U.S. government to protect it by being used by others, it is referred to as a(n):
trademark
A value pricing strategy involves:
underscoring product quality while featuring its price.
The basic unit of the product or service sold by a business is referred to as the _____.
unit of sale
Companies like Walmart that assert a "more for less" strategy are using ______ pricing.
value
When a company advertises "more for less" and balances quality and price, the company is using a _____ pricing approach.
value
A pricing strategy that attempts to balance quality and price is known as _____.
value pricing
Which type of social entrepreneurship invests directly in business enterprises with the goal of encouraging entrepreneurial approaches to achieve social impact rather than monetary returns?
venture philanthropy
The __________ for your business paints a picture of the overall view of what you want your organization to become in the future.
vision
The Business Model Canvas is a:
visual representation of a Lean Startup's core business hypotheses.
When it comes to investors, they _____.
will want to see your business plan
Which of the following words or phrases should you use when dealing with customers?
"Consider this"
According to the text, which of the following is the accurate description of how entrepreneurs create a business idea?
Listen; Observe; Analyze
Which customer segment in the Osterwalder-Pigneur Business Model Canvas is composed of all the supplier and customer segments that are served?
Multi-sided markets
Sell More Now is training its salespeople. Today's instruction is on how to make a sales call. Which step in the eight-step sales call method requires listening to and responding to concerns of the customer?
Dealing with objections
According to the text, which of the following is NOT one of the eight steps of a successful sales call?
Development
Which of the following is an example of psychographic market segmentation?
Dividing a population by differences in values, lifestyles, personality traits, and social groups
According to the text, which is the best way to handle customer complaints?
Do not overreact to a negative comment.
Which of the following statements about ideas and opportunities is false?
Every idea is an opportunity.
Which section of the business plan is designed to hook potential investors and encourage them to read the rest of the business plan?
Executive Summary
Which section of the business plan must be compelling and comprehensive, written last, be limited to one to two pages, because it may be the only part that many people read?
Executive summary
Which of the following is generally the strongest force in an industry?
Existing competitive rivalry
Entrepreneurs choose how and when they are paid. If you pay yourself a wage, this is a:
Fixed rate per hour
Which of the following is NOT an example of advertising?
Free mention of an event in a newscast
The economy of the United States is a free-enterprise system, which is described by all of the following except:
Free-market systems are owned and operated by the government
Which of the following statements about the free-market system is false?
Free-market systems are owned and operated by the government.
Which earnings valuation method is likely to establish the upper limit of what a buyer is willing to pay?
Future earnings under new ownership
Which term BEST describes business activities that avoid harm to the environment or help to protect it in some way?
Green entrepreneurship
According to the SBA, which of the following is not one of the five rules about essential components of a successful CRM?
Hire a consulting firm to develop and administer a survey.
Which of the following is NOT a question to ask before making an appointment for a sales call?
How should I advertise the product?
Which type of analysis provides a critical view of industry definition, industry size and growth (or decline), product and industry life cycle, and any current or anticipated legal or regulatory concerns?
Industry analysis
___________ focuses on a segment of business rather than on individual consumers.
Industry research
Which of the following statements is NOT true of customer service?
Investing in customer service is likely to have a low return.
The free-enterprise system impacts entrepreneurs in which of the following ways?
It discourages entrepreneurs who waste resources by driving them out of business
Which of the following statements about institutional advertising is correct?
It is intended to create awareness about the firm and enhance its image.
Understanding the product's features and the benefits they can create is part of which principle of selling?
Know your product or service
What is a hypothesis-driven approach that uses iterative development for business startups to save time and money?
Lean Startup
Which of the following describes a hypothesis-driven approach to business startups that includes iterative development?
Lean startup
Which of the following is a disadvantage of television advertising?
Long lead time
Once a customer is gone, so is any hope that they will purchase from you in the future. Which of the four main costs of losing a customer is this an example of?
Loss of future business.
Which of the following should you avoid during a sales call?
Make the customer buy from you.
Porter's five forces are frequently utilized to conduct which portion of the feasibility analysis?
Market and industry feasibility
Which statement is NOT true of market research?
Market research should only be conducted at the beginning of a venture.
Which of the following best describes the maturity stage of the product life cycle?
Marketing needs to focus on promoting brand loyalty because consumers are knowledgeable about you and your competitors, but growth is stagnant due to market crowding.
Which of the following is one of the five rules the SBA has about essential components of a successful CRM?
Monitor employees' communications periodically.
Which of the following is a secondary research method?
Online searches
Customer relationship management (CRM) consists of all of the following except:
P&L statements.
________ pricing offers a low price during the early stages of a product's life cycle to gain market share.
Penetration
Which method of determining a promotional budget involves spending more when you're selling more?
Percentage of sales
____________ is the first step in the eight-part sales call.
Preparation
Which of the following would be an example of making a good personal impression?
Preparing yourself for physically by being clean and well dressed.
If you conduct 100 interviews with students on your campus, what type of research have you completed?
Primary
_________ advertising is designed to create awareness, interest, purchasing behavior, and post-purchase satisfaction for specific products and services.
Product
According to the text, which type of advertising is more common for small entrepreneurial companies?
Product advertising
A feasibility analysis considers which of the following?
Product/service, market, industry, and financial data
Which of the following is not an example of a primary research method?
Reviewing competitor websites
When you want to learn about your industry, competition, or markets, which type of research is generally best?
Secondary
Which of the following is not one of the three processes described for creating and identifying opportunities?
Seeking out failed competitors and borrowing their ideas.
Which of the following is not recommended for building your own brand?
Select a logo that has been successfully utilized by others in the industry.
__________ is not included in the production and delivery capability element of the business definition.
Selecting a segment of the market
When it comes to selling skills, which of the following is true?
Selling involves teaching customers how product features benefit them.
Which of the following statements about market research is not accurate?
Skipping the step of market research is okay if you need to be first-to-market with your product.
According to the text, which of the following statements is true?
Smart marketers emphasize product benefits instead of features.
This best describes a loss of jobs, which is one of the costs of losing a customer:
The business has downsized due to the significant loss of revenue resulting from lost customers.
Which of the following statements about the costs of securing new customers is correct?
The cost of securing new customers is significantly higher than the costs of keeping repeat customers.
Which of the following factors is the most influential regarding choice of location and distribution systems?
Type of business
Logos are registered with the ________ to protect them from being used by others.
U.S. Patent and Trademark Office
According to the text, which of the following is NOT a guideline for business plans?
Use historical data and reports for your industry.
According to Joseph Schumpeter, this is not one of the ways that entrepreneurs find opportunities to create new businesses.
Using an existing product to sell to mass markets.
A method of calculating the worth of a business by using projected future cash flows and the time value of money is called ______ valuation.
cash flow
According to the text, the ______ method of valuation is less likely to be used for an entrepreneurial venture.
cash flow
Price, location, quality, and reliability are factors for which of the following five roots of opportunity in the marketplace?
competitive advantage
The benefit you can provide to your customers that puts you ahead of your competition, and keeps you there, is your:
competitive advantage
If you attract customers to your business by beating your competitor on price and service in the market, this would be referred to as a(n):
competitive advantage.
A(n) _____ is research that compares an organization with several direct and indirect competitors by name in a manner that is meaningful to targeted customers.
competitive analysis
According to Michael Porter, the degree of ___________ among ___________ is impacted by all industry forces.
competitive rivalry; existing firms
The ___ approach to a promotional budget is often used in highly competitive markets to prevent market-share loss.
competitive spending
The combination of a firm's business definition and its competitive advantage is referred to as its:
competitive strategy.
_________ pricing takes the organization's product cost and adds a desired mark-up.
cost-plus
A ____ is a decision-making process in which the costs of taking an action are compared to the benefits.
cost/benefit analysis
The beliefs, values, and behavioral norms of an organization encompass its:
culture
Which term BEST describes business activities that avoid harm to the environment or help to protect it in some way?
culture
The term for money when it is exchanged internationally is _______.
currency
Everything a business does to keeps its customers happy is referred to as:
customer service.
Another term for population statistics is _______.
demographics
For a product, the COGS includes the cost of:
direct labor used to make the product plus the cost of materials.
A business plan is best described as a(n):
document that thoroughly explains a business idea and how it is intended to be carried out.
A business valuation method that assesses the value of the firm based on a stream of earnings that is multiplied either by an agreed-upon factor (the capitalization factor) or by the price/earnings ratio (for a publicly traded company) is referred to as:
earnings valuation.
_________ refers to the amount of gross profit that is earned on each unit of the product or service a business sells.
economics of one unit of sale
All of the following are factors considered for Porter's "threat of substitutes" force except
economies of scale.
A promotion that combines education and entertainment to make a more lasting impression upon an audience is called _______.
edutainment
A(n) _________ is a person who recognizes an opportunity to start a business that other may not have noticed and acts on it.
entrepreneur
A(n) _________ is someone who recognizes an opportunity to start a business that other people may not have noticed and acts on it.
entrepreneur
_______ are individuals who recognize opportunities and organize and manage a business, assuming the risk for the sake of potential return.
entrepreneurs
A review that addresses the roles of the community, region, nation, or the rest of the world as they relate to a business is called a(n) _______.
environmental analysis
Chapter 3 Dynamic
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Practice exam #1
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According to TARP Worldwide's study of negative word-of-mouth, about _____ of consumers who hear a negative word-of-mouth stop buying the product.
42%
According to the Customer Service Institute, about ___ of a company's business comes from existing customers.
65%
You have been hired to help Buy Now improve its customer service. Some managers at Buy Now are skeptical of the value of investing in customer service. Which of the following facts might convince them that customer service really is important?
About 65% of a company's business comes from existing customers.
ShoesRUs is trying to define its target market for its new running shoe. Which of the following statements is the BEST definition of a target market for the company?
All runners in the United States
Which of the following best describes a problem driven approach to a business opportunity decision process?
An entrepreneur has an idea for a product and searches for a market
If a bakery sells a cupcake for $3.00, has material costs of $0.25 and labor costs of $0.50, which of the following statements is not true?
EOU is $0.75
One of the challenges for entrepreneurs in a free-enterprise system is:
Encouragement of competition between entrepreneurs
Which of the following BEST represents a mission statement?
Our goal is to honor and empower wounded warriors.
Which of the following is NOT one of the traditional four Ps of marketing?
Production
If you are evaluating how funds will be generated through asset sales, licensing, and subscription fees, you are considering this factor of the Business Model Canvas?
Revenue streams
Which of the following is not one of the principles of selling?
Sharing everything you know.
Which of the following is the benefit of establishing a trademark for your product?
To create instant brand recognition
Which of the following is not an example of customer research?
Tour of a competitor facility
Purchasing an existing business is both an art and a science and is best described as a(n):
acquisition
One way to jump-start entry into small business ownership is to purchase a business. Purchasing an existing business is referred to as a(n):
acquisition.
Marketing consists of all of the following except:
documenting strategies for financial success.
If a firm is segmenting its market geographically, it is dividing the population by:
location
A restaurant that advertises a two-for-$25 special that includes an appetizer, two entrees, and a dessert is an example of a(n) _____.
offer
Successful salespeople exhibit all of the following behaviors during sales calls except:
offer solutions early in the call before understanding the problems.
Marketing should do all of the following except:
operate as an isolated business function.
An entrepreneur recognizes ________ where other people see only ________.
opportunity; problems
Booms and Bitner created an extended marketing mix by adding all of the following elements to the traditional four Ps except:
personal communications.
The ________ of a product is its relative place in the customer's mind compared with its competitors.
position
An example format for developing a ___________ statement is (Your business name/brand) is the (competitive industry/ category) that (provides these benefits, or points of difference) to (audience/ target market).
positioning
The goal of ____________ is to distinguish your product or service from others being offered.
positioning
A person or organization that may be receptive to a sales pitch is a ______.
prospect
Which of the following describes the formula for gross profit?
total sales revenue minus total cost of goods sold
Chapter 4
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Which of the following BEST describes a small business? 1. One that supports only private industry 2. one that is run from a home 3. one that includes only locally made products 4. one with fewer than 500 employees 5. one based on strong work ethic and dedication
4. one with fewer than 500 employees
According to the text, which method of asset valuation generally excludes intangible assets?
Adjusted book value
If a company emphasizes paid promotions using media outlets, such as radio and magazines, which type promotion is the company focusing on?
Advertising
According to Michael Porter, which of the following is NOT one of the key aspects of intense rivalry?
An industry experiencing fast growth
Which type of market segmentation involves dividing a population based on a variable such as age or gender?
Demographic
Which of the following terms BEST describes total sales revenue minus total cost of goods sold?
Gross profit
At which stage of the product life cycle are modifications to the design or technology made?
Introduction
Which of the following statements is NOT true of industry research?
It focuses on individual consumers.
Which method of asset valuation establishes a minimum value for a firm?
Liquidation value
A _____ is defined as a business with five or fewer employees, initial capitalization requirements of less than $50,000, and habitual operational involvement of the owner. A. gazelle B. microenterprise C. lifestyle business D. unicorn E. mainstream small firm
Microenterprise
Which of the following are models of a new product that will secure maximum customer feedback with minimal effort?
Minimum viable products
Which of the following is NOT typically found on the cover page of a business plan?
Mission statement
What describes the rate of failure for a new business venture?
One in five new businesses fail within the first eight years
Which type of research should you conduct when you need to ask questions specific to your product?
Primary
Which element of a business definition addresses receiving payment?
Production and delivery capability
Which of the following is NOT a factor that creates competitive advantage?
Profit
The primary methods of calculating the value of a business are ____________.
asset valuation, earnings valuation, and cash flow valuation
The factors that contribute to the ease or difficulty of a new competitor joining an established market are known as _________.
barriers to entry
As compared to its mission, a company's vision is typically ______.
broader and more comprehensive
Money or property owned or used in business is called _____.
capital
A(n) _____ is a financial statement showing cash receipts less cash disbursements for a business over a period of time.
cash flow statemen
When managers plan and create steps towards a specific goal which is based on cause and effect, they are engaging in _____.
causal logic
Employees who actively produce or deliver a product or service are called _______.
direct labor
The relative value of one currency to another is called the _______.
foreign exchange rate
Which term BEST describes business activities that avoid harm to the environment or help to protect it in some way?
green entreprenuership
According to the text, the three ways of looking at earnings valuations are ______.
historical earnings, future earnings under current ownership, and future earnings under new ownership
In which step of a SWOT analysis should an entrepreneur consider external events or circumstance that can help the entrepreneur gain an advantage over the competition?
opportunities
The value of what must be given up in order to obtain something else is called ______.
opportunity cost
Which of the following is NOT one of the factors in the marketing mix?
personnel
What type of payment system is described in the text as a fixed payment made at regular intervals, such as every week or every month?
salary
According to Michael Porter, a supplier has the least power when __________.
substitutes are readily available
Products Unlimited wants to learn more about the marketing strategies and promotion patterns of competitors. What type of research would be the best option for the company?
tracking
A company's _________ refers to the distinctive features and benefits that set the company apart from the competition.
unique selling proposition
A transaction between two parties who willingly agree to trade money for a product or service is referred to as _____ exchange.
voluntary
Market research is the process of finding out all of the following EXCEPT ______.
what the optimal production locations are