Ch.11 Test Bank Docx Marketing

Entrepreneurship, 3e (Bamford)

Chapter 11 Marketing

1) John needs to know who his customers are and how they might be attracted to his business. He needs to create a marketing plan to accomplish this.

2) A marketing plan should identify a company's market and determine a pricing policy.

3) Instead of trying to reach every individual on the market, a firm should concentrate its marketing efforts on those individuals most likely to buy its products or services.

4) To maximize profits, a small business owner needs to try to reach as many customers as possible across a wide geographic area.

5) Small businesses must use their resources efficiently, thus distinguishing them from large businesses.

6) A loss leader is a product or service that is sold at the lowest possible amount that can be charged while still making a profit.

7) It is advisable for entrepreneurs to make detailed cost calculations for every product or service they are selling. Through this effort, they can price their products competitively without sacrificing their profit margins.

8) When using the cost-plus pricing method, a firm will compare their products or services to similar products or services already on the market in order to determine what price to charge.

9) The pricing floor is the break-even point or the lowest amount that can be charged for a product or service while still making a minimal profit.

10) When a business owner calculates the floor cost of a product, he or she excludes marketing costs from the calculations.

11) Many firms use loss leaders to increase their customer base rather than to generate actual revenue.

12) Dennis determines that a new blinking slinky toy will cost his firm $3.50 to produce. He adds 20 percent the manufacturing costs and prices the product at $4.20. This is an example of cost-plus pricing.

13) Pricing a service requires a firm to identify and include the cost of overhead expenses and the cost of the owner's experience.

14) As their customer base increases, entrepreneurs should most likely raise prices to limit the customers coming in.

15) A business built on the Software as a Service model should price its services based on the experience of its staff.

16) Pure promotion is strictly a financial arrangement in which a company pays for an output such as radio advertisements.

17) Mixed-model promotions cross television and radio ads for a product.

18) Virtually free promotions have very limited financial cost but have a time-commitment requirement from individuals in the firm doing the promoting.

19) When an owner designs a signage for his or her business, the goal should be to create a simple but distinctive sign.

20) During the past 15 years, Web pages have moved from an unorthodox competitive advantage to an orthodox practice.

21) Virtually free promotions are also known as bootstrap marketing.

22) Search Engine Optimization refers to the efforts made to increase the visibility and placement of a firm's information on the Web.

23) Sales management refers to the individuals who build and maintain relationships with customers.

24) Sales management refers to how the whole sales process is managed.

25) A sales management system starts with the hiring of a sales force.

26) Forecasting sales is not guesswork if the sales manager knows who the customers are.

27) A start-up owner must estimate what percentage of the total market potential might become customers of the business in a targeted area.

28) In the sales forecasting method that looks at customer demand, the process examines the market to determine how many individuals are likely to be interested in a firm's products or services.

29) Regardless of the products or services it sells, an entrepreneurial business requires an extensive knowledge of local geography to effectively distribute its products or services to its customers.

30) A contract sales force consists of independent salespeople with a wide range of experiences and contacts. These salespeople are employees of a company on a contract basis.

31) John needs to know who his customers are and how to attract them. He needs a(n)

A) operation plan.

B) business plan.

C) marketing plan.

D) advertising plan.

32) A marketing plan should include

A) identifying a potential market.

B) establishing a pricing policy.

C) developing promotions.

D) all of these.

33) In the context of creating a marketing plan, a new firm's marketing efforts need to focus on

A) the activities of its competitors.

B) appealing to everyone.

C) the firm's mission statement.

D) contemporary marketing trends.

34) As more competitors enter the geographic radius for a business, the radius grows ________.

A) larger

B) smaller

C) stronger

D) weaker

35) What is a marketing plan?

A) A plan developed by a business to hire qualified personnel to develop a marketing plan

B) A plan developed by a business to specify who the customers are and how they will be attracted to the company

C) A plan developed by a business to specify its mission and strategy 

D) A plan developed by a business to specify who its competitors are and how the company will market its products

36) Which of the following aspects needs to be considered while developing a marketing plan?

A) Determining sales management procedures

B) Specifying the ideal and general target customers

C) Identifying a firm's market

D) All of these

37) The marketing efforts of a firm need to be clearly identified and defined based on

A) the potential competitors in the market.

B) the business's mission statement.

C) the ability to effectively promote the company.

D) none of these.

38) Which of the following questions should one try to answer after the target population has been identified?

A) How many individuals from the target population actually exist within the business's market area?

B) What percentage of these individuals is reasonable to try to attract as customers?

C) Do these numbers match with your cash flow projections?

D) All of these

39) In the context of determining pricing models, which of the following best defines cost-plus pricing?

A) A model in which a desired profit margin is added to the cost of a product as deemed appropriate

B) A model in which a firm builds its customer base by selling its products at operational losses

C) A model in which a product is sold at as low a price as possible while still generating minimal profits

D) A model in which promotional tactics are used to improve the visibility of a product in the market

40) In the context of promotions, ________ is a term for all the efforts made to increase the visibility and placement of business information on the Web.

A) Software as a Service (SaaS)

B) Search Engine Optimization (SEO)

C) Internet distribution

D) domain management

41) A small business determines the cost of providing a product or service and then adds a given percentage to it based on the level of profit determined to be appropriate. This is called

A) the loss leader strategy.

B) setting the pricing floor.

C) cost-plus pricing.

D) bootstrap marketing.

42) In the context of pricing models, a ________ is a product or service that is sold at a nonoperating loss to simply get customers in the store.

A) loss leader

B) keystone

C) core product

D) marginal product

43) Marshmallow Systems is a start-up equipment manufacturer, and its main product is a smartphone. The firm sells the smartphone at cost, that is, the price is exactly the actual cost of production. The firm's intention behind pricing the phone this way is to build its customer base. In the context of pricing models, the strategy used by Marshmallow Systems is the

A) predatory pricing strategy.

B) pricing floor strategy.

C) cost-plus pricing strategy.

D) loss leader strategy.

44) In determining a pricing model, it is advisable for a business that is just starting out to

A) price its products at a premium to develop a reputation for high quality.

B) offer a great value for the money charged to build a customer base.

C) avoid accounting for its staff's experience in the price of the services it offers.

D) attempt to reach as wide a customer base as possible.

45) In establishing pricing, there are several caveats that a small business person should consider. Which of the following represents such caveats?

A) Do you want to offer a quantity discount?

B) What is the actual price charged for a product or service?

C) How to offer an even greater value for the money charged in order to build a customer base?

D) All of these

46) Promotion is the means by which businesses make their product or service known to potential customers. Which of the following is the most commonly used form of promotion?

A) The Internet

B) Radio advertisements

C) Television advertisements

D) All of these

47) Promoting a product or service is considered to be a part of

A) operations.

B) managing.

C) marketing.

D) planning.

48) ________ are strictly financial agreements in which a business pays for some outputs, such as radio advertisements.

A) Pure promotions

B) Mixed-model promotions

C) Hybrid-model promotions

D) Virtually free promotions

49) ________ cost something but also have an element of community support.

A) Pure promotions

B) Mixed-model promotions

C) Hybrid-model promotions

D) Virtually free promotions

50) ________ have very limited financial costs but have time-commitment requirements from individuals in the firm.

A) Pure promotions

B) Mixed-model promotions

C) Hybrid-model promotions

D) Virtually free promotions

51) ________ are events established around a particular theme where businesses are allowed to set up booths in order to promote their goods or services.

A) Trade shows

B) Marketing fairs

C) Television shows

D) Opportunity fairs

52) A small business can promote itself by sponsoring

A) school activities.

B) sports activities.

C) fundraising activities.

D) all of these.

53) Marketing efforts that require little capital are called ________.

A) hybrid promotions

B) mixed-model promotions

C) bootstrap marketing

D) pure promotions

54) ________ refers to the individuals who build and maintain relationships with customers.

A) Sales management

B) Marketing management

C) Consumer-oriented marketing

D) Management philosophy

55) In the context of determining pricing models, identify an accurate statement about pricing a service.

A) Unlike pricing models for products, pricing models for services do not have to account for costs of distribution or delivery.

B) The value of a service can easily be determined based on the number of independent service providers on the market.

C) When pricing a service, inputs such as education and experience should not be reflected in its cost.

D) Pricing can be used as an effective tool for controlling the number of customers a service provider must handle.

56) A(n) ________ distributor is a sales representative for a variety of products.

A) industry

B) multi-segmented

C) independent

D) market

57) A(n) ________ refers to independent salespeople with a variety of experiences and contacts that work for firms for a given period of time.

A) contract sales force

B) market sales force

C) independent sales force

D) consumer sales force

58) The critical part of using a mail order catalog is identifying the

A) zip code.

B) customers.

C) industry.

D) demographics.

59) A major difficulty of operating a mail order catalog is the handling of

A) credit cards.

B) primary data.

C) call center employees.

D) wrong addresses.

60) SevenStar Inc. hires a team of salespeople from another organization to sell its products. These salespeople come with a variety of expertise in identifying customers and selling products. The team works with SevenStar Inc. for one year, and in this time, it boosts sales figures for the company by almost 150 percent. In the context of sales management, the people hired by SevenStar Inc. are most likely

A) a customer service team.

B) from an advertising agency.

C) a contract sales force.

D) organizational growth consultants.

61) All of the following represent issues that need to be considered in sales management EXCEPT

A) What image will the sales force represent?

B) What would be the cost of the final product that is sold to the customers?

C) How much information will be collected on each customer?

D) What will the business do with the information collected about customers?

62) Which one of the following methods does NOT require an extensive understanding of geographic location?

A) Virtually free promotion

B) Independent sales force

C) Mixed promotion

D) Pure promotion

63) A(n) ________ is developed by a business to specify who the best customers are and how they might be attracted to the company.

64) ________ is a term for all the efforts made to increase the visibility and placement of business information on the Web.

65) ________ is pricing in which an entrepreneur initially determines his or her cost structure and then determines what profit margin is desired and adds that to the cost.

66) ________ is a business model that is based on providing all or most of the business value electronically and remotely.

67) The ________ is the lowest amount that can be charged for a product or service while still making a minimal profit.

68) ________ is the means by which a small business becomes known to potential customers.

69) What is a marketing plan? Briefly describe the difficulties faced by small firms in developing marketing plans, as well as one potential solution.

70) When the target population is identified, what questions should a small business owner try to answer?

71) Define cost-plus pricing and give an example.

72) Define pure promotions and list five examples.

73) List and define the three basic types of promotions, and provide an example for each.

74) Define and briefly describe a contract sales force.

75) What are the four methods of distribution that do not require an extensive understanding of geographic location because they may be selling an industrial product that has the potential for a nationwide distribution?