Small Business Marketing Ch.6 Full Test Bank

Chapter 6- Small Business Marketing

True/False

1. Relationship marketing emphasizes on selling a product to customers regardless of their satisfaction

Response: See section 6.1

Level: Easy

Learning Objective: Explain the basics of small business marketing

1. The primary purpose of relationship marketing is customer acquisition

Response: See section 6.1

Level: Easy

Learning Objective: Explain the basics of small business marketing

1. Small business marketing has evolved over the years

Response: See section 6.1

Level: Easy

Learning Objective: Explain the basics of small business marketing

1. Anything that a firm offers in the market and is targeted at satisfying customer needs and wants is called a good

Response: See section 6.2

Level: Easy

Learning Objective: Distinguish between products as goods and services

1. When customers buy a car with a warranty, they are buying only a good

Response: See section 6.2

Level: Easy

Learning Objective: Distinguish between products as goods and services

1. Customers order cabs through online apps like Uber. A Cab-ride is a service.

Response: See section 6.2

Level: Easy

Learning Objective: Distinguish between products as goods and services

1. According to the text, a key difference between goods and service is tangibility

Response: See section 6.2

Level: Easy

Learning Objective: Distinguish between products as goods and services

1. The most basic product the firm is offering is an augmented product

Response: See section 6.2

Level: Easy

Learning Objective: Distinguish between products as goods and services

1. According to the text, an augmented product is a product with basic features that differentiate it from the other products offered by the same firm

Response: See section 6.2

Level: Medium

Learning Objective: Distinguish between products as goods and services

1. Selling products only to a captive customer is a good approach for the long-term success of a firm

Response: See section 6.3

Level: Medium

Learning Objective: Recognize different ways in which a small business can attract market attention

1. All contacts in the top of the marketing funnel are those buyers who are ready to purchase your product

Response: See section 6.3.1

Level: Easy

Learning Objective: Recognize different ways in which a small business can attract market attention

1. Small businesses must promote their product to buyers based on the buyers’ stage in a marketing funnel

Response: See section 6.3.1

Level: Medium

Learning Objective: Recognize different ways in which a small business can attract market attention

1. The cost of customer retention is higher than the cost of acquisition

Response: See section 6.3.1

Level: Easy

Learning Objective: Recognize different ways in which a small business can attract market attention

1. The Can-Spam Act of 2003 established federal standards for the use of commercial e-mail

Response: See section 6.3.2

Level: Easy

Learning Objective: Recognize different ways in which a small business can attract market attention

1. When opening a new firm, competition is one of the criteria used to decide its location

Response: See section 6.4

Level: Easy

Learning Objective: Describe the important role of locating your business in the right place

1. Groupon was cofounded by Andrew Mason, Eric Lefkoksky and Brad Keywell

Response: See section 6.4.2

Level: Easy

Learning Objective: Describe the important role of locating your business in the right place

1. Guerilla marketing involves the use of conventional way to promote a product

Response: See section 6.4.2

Level: Easy

Learning Objective: Describe the important role of locating your business in the right place

1. A break-even price is a point at which revenue exceeds costs

Response: See section 6.5

Level: Easy

Learning Objective: Explain why pricing is crucial decision for small businesses

1. Mark-up pricing is also known as penetration pricing

Response: See section 6.5

Level: Easy

Learning Objective: Explain why pricing is crucial decision for small businesses

1. A loss-leader product is a one that is sold at a break-even price so that a firm can recover its cost

Response: See section 6.5

Level: Medium

Learning Objective: Explain why pricing is crucial decision for small businesses

1. Surge-pricing is common in the airline industry

Response: See section 6.5

Level: Easy

Learning Objective: Explain why pricing is crucial decision for small businesses

1. Products for which the demand fluctuates with changing prices are inelastic products

Response: See section 6.5

Level: Easy

Learning Objective: Explain why pricing is crucial decision for small businesses

1. Clothing is an example of an inelastic product

Response: See section 6.5

Level: Easy

Learning Objective: Explain why pricing is crucial decision for small businesses

1. The Price elasticity of demand coefficient equal to one indicates that the demand for a good does not change with any change in price

Response: See section 6.5

Level: Hard

Learning Objective: Explain why pricing is crucial decision for small businesses

1. The Price elasticity of demand coefficient equal to infinity indicates perfectly elastic demand

Response: See section 6.5

Level: Hard

Learning Objective: Explain why pricing is crucial decision for small businesses

Multiple Choice Questions

1. Which of the following must be a goal of good marketing?
2. Customer retention and customer acquisition
3. Customer retention
4. Sell and tell
5. Customer acquisition

Response: See section 6.1

Level: Easy

Learning Objective: Explain the basics of small business marketing

1. Relationship marketing involves all EXCEPT:
2. Customer satisfaction
3. Understanding customer needs
4. Developing beneficial relationships with customers
5. Manager’s hubris

Response: See section 6.1

Level: Easy

Learning Objective: Explain the basics of small business marketing

1. What is NOT true about existing customers?
2. Existing happy customers refer their friends and family
3. The non-financial cost of selling to existing customers is less
4. Existing customers are highly price-sensitive
5. Existing customers appreciate the value proposition offered by firms

Response: See section 6.1

Level: Easy

Learning Objective: Explain the basics of small business marketing

1. Anything that a firm offers in the market and that is targeted at satisfying customer needs and wants is called _______
2. An idea
3. A product
4. A dream
5. A brand

Response: See section 6.2

Level: Easy

Learning Objective: Distinguish between products as goods and services

1. Caroline’s Cleaning Solutions employs people to clean homes, apartments, and new construction. The firm is offering which of the following?
2. An idea
3. A good
4. A service
5. An ingredient

Response: See section 6.2

Level: Easy

Learning Objective: Distinguish between products as goods and services

1. The four elements of services include:
2. Intangibility, perishability, inseparability, heterogeneity
3. Consistency, tangibility, homogeneity, purchase
4. Purchase, consistency, tangibility, heterogeneity
5. Convenience, tangibility, inseparability, heterogeneity

Response: See section 6.2

Level: Easy

Learning Objective: Distinguish between products as goods and services

1. Goods are highly______, whereas services tend to be _______
2. Heterogeneous, homogenous
3. Homogenous, heterogeneous
4. Intangible, homogenous
5. Homogenous, tangible

Response: See section 6.2

Level: Medium

Learning Objective: Distinguish between products as goods and services

1. The three levels of a product include:
2. Intangibility products, perishable products, and heterogeneous products
3. Core goods-services, augmented goods-services, and total goods-services
4. Core goods-services, non augmented goods-services, and goods
5. Intangibility products, perishable products, and homogeneous products

Response: See section 6.2

Level: Medium

Learning Objective: Distinguish between products as goods and services

1. Which of the following buyers are at the top of a marketing funnel?
2. Leads
3. Contacts
4. Prospects
5. Loyal customers

Response: See section 6.3.1

Level: Easy

Learning Objective: Recognize different ways in which a small business can attract market attention

1. _________divides market into smaller portions of people based on their gender, race, race, gender, and age
2. Geographic segmentation
3. Activity segmentation
4. Demographic segmentation
5. Psychographic segmentation

Response: See section 6.3.1

Level: Easy

Learning Objective: Recognize different ways in which a small business can attract market attention

1. Which of the following is NOT an online marketing tool?
2. Email marketing
3. Social media marketing
4. Virtual events
5. Door-to-door marketing

Response: See section 6.3.2

Level: Easy

Learning Objective: Recognize different ways in which a small business can attract market attention

1. What factors influence the location of a business?
2. Competition
3. Customers
4. Costs involved
5. All of the above

Response: See section 6.4

Level: Easy

Learning Objective: Describe the important role of locating your business in the right place

1. Which of the following is NOT a form of advertising?
2. Direct response
3. Direct mail
4. Telemarketing
5. Market penetration

Response: See section 6.4.2

Level: Easy

Learning Objective: Describe the important role of locating your business in the right place

1. Which of the following is a drawback of marketing through coupon or daily deal websites for small businesses?
2. Large market
3. Allows to get rid of excess inventory
4. Lot of competition
5. Easy to manage a coupon or daily deal site

Response: See section 6.4.2

Level: Medium

Learning Objective: Describe the important role of locating your business in the right place

1. Meow Mix, cat food manufacturer, develops the Meow Mix Mobile to cruise around spreading brand awareness on local streets and highways. Meow Mix is pursuing which form of marketing?
2. Guerilla marketing
3. Market segmentation
4. Market penetration
5. Gouging

Response: See section 6.4.2

Level: Medium

Learning Objective: Describe the important role of locating your business in the right place

1. If the total cost-price of a good is $100 and the mark-up percentage is 50%, what is the selling price of a good?
2. $100
3. $110
4. $150
5. $50

Response: See section 6.5

Level: Medium

Learning Objective: Explain why pricing is crucial decision for small businesses

1. _______is selling at a loss to attract customers to new offerings for a specific time period
2. Penetration pricing
3. Mark-up pricing
4. Floor pricing
5. Cost-plus pricing

Response: See section 6.5

Level: Easy

Learning Objective: Explain why pricing is crucial decision for small businesses

1. When the firm adds a profit mark-up to the cost, the pricing is called a ________
2. Surge pricing
3. Mark-up pricing
4. Penetration pricing
5. Competition-based pricing

Response: See section 6.5

Level: Easy

Learning Objective: Explain why pricing is crucial decision for small businesses

1. A product that is sold at a loss to get customers to buy other products from the firm is called a ________
2. Core product
3. Augmented product
4. Loss-leader
5. Cost-plus pricing

Response: See section 6.5

Level: Easy

Learning Objective: Explain why pricing is crucial decision for small businesses

1. The Fech Moving Company, in Virginia, is into cleaning and moving services. To charge for its services, it obtains pricing information from the market and uses the prices of competitors as a benchmark. Which pricing strategy is the Fech Moving Company using?
2. Surge pricing
3. Cost-plus pricing
4. Competition-based pricing
5. Dynamic pricing

Response: See section 6.5

Level: Medium

Learning Objective: Explain why pricing is crucial decision for small businesses

1. Price elasticity of demand refers to:
2. Effect of change in the price on the quantity of demand
3. Price and mark-up profit
4. Supply of an inelastic product
5. Price and competition based pricing

Response: See section 6.5

Level: Medium

Learning Objective: Explain why pricing is crucial decision for small businesses

1. When the price of an elastic product doubles, demand ______, and when the price of an inelastic product increases, demand_______
2. Increases one-fourth, reduces by one-fourth
3. Increases one-third, increases by one-third
4. Reduces by about half, reduces by little
5. increases, reduces by half

Response: See section 6.5

Level: Medium

Learning Objective: Explain why pricing is crucial decision for small businesses

1. The Price elasticity of demand can be mathematically represented as:
2. Percentage change in supply divided by percentage change in demand
3. Percentage change in quantity demanded divided by percentage change in price
4. Percentage change in markup profit divided by percentage change in price
5. Percentage change in demanded divided by percentage change in supply

Response: See section 6.5

Level: Medium

Learning Objective: Explain why pricing is crucial decision for small businesses

1. The Price elasticity of demand coefficient equal to zero indicates:
2. Perfectly elastic demand
3. Unit elastic
4. Perfectly inelastic demand
5. Cross-price elasticity

Response: See section 6.5

Level: Hard

Learning Objective: Explain why pricing is crucial decision for small businesses

1. A grocery store suddenly and unreasonably increases the price of toilet rolls as a response to the COVID lockdown. The firm is indulging in _____practices
2. Price gouging
3. Guerilla marketing
4. Market penetration
5. Cost-plus pricing

Response: See section 6.5

Level: Medium

Learning Objective: Explain why pricing is crucial decision for small businesses