Entrepreneurship and Small Business Management, 2e (Mariotti)
Chapter 7 Developing the Right Marketing Mix and Plan
1) Which of the following is one of the four Ps of marketing?
A) Product
B) Population
C) Publicity
D) Profit
Learning Obj.: LO 1
AACSB: Analytical thinking
2) What is the smartest price strategy?
A) Choose a pricing strategy that communicates your competitive advantage.
B) Offer the lowest price that you can afford to offer.
C) Pick a pricing strategy that is different from the competition’s strategy.
D) Change the pricing every quarter.
Learning Obj.: LO 2
AACSB: Analytical thinking
3) Which of the following is not an example of successful branding?
A) A product represents luxury to customers.
B) Customers confuse a business’s logo with that of another business.
C) Customers associate a product with high ethical standards.
D) Customers cannot remember the name of the company.
Learning Obj.: LO 2
AACSB: Reflective thinking
4) When you build a brand, try to focus tightly on one key ________.
A) Benefit
B) Feature
C) Product
D) Customer
Learning Obj.: LO 2
AACSB: Analytical thinking
1
5) Promotion consists of ________.
A) Advertising
B) Publicity
C) Other promotional devices such as discount coupons and giveaways
D) All of the above
Learning Obj.: LO 3
AACSB: Analytical thinking
6) Marketing inspired by a commitment to a social, political or environmental issues is called
________.
A) Philanthropy
B) Cause-related marketing
C) Socially responsible business
D) Environmental marketing
Learning Obj.: LO 4
AACSB: Analytical thinking
7) Why are not-for-profit corporations tax exempt?
A) Because they donate money to foundations
B) Because they use the money they collect to help improve society
C) Because they pay a different form of tax than regular corporations
D) Because they don’t make profits of any kind
Learning Obj.: LO 4
AACSB: Analytical thinking
8) Ford’s Edsel is an example of a product that failed because it lacked ________.
A) Focus
B) Name recognition
C) Competitiveness
D) Imagination
Learning Obj.: LO 2
AACSB: Analytical thinking
2
9) To break even, a business must ________.
A) Sell enough units to cover its fixed costs
B) Sell enough units to cover all its costs
C) Sell enough units to earn a profit
D) Sell enough units to cover its variable costs
Learning Obj.: LO 7
AACSB: Analytical thinking
10) A marketing plan contains all of the following sections except ________.
A) Product/Service
B) Promotion Strategy/Plan
C) Financial Projections
D) Pricing Strategy
Learning Obj.: LO 5
AACSB: Analytical thinking
11) A nonprofit organization that uses donated money to help others is called a ________.
A) Tax exempt
B) Foundation
C) Philanthropy
D) Free enterprise
Learning Obj.: LO 3
AACSB: Analytical thinking
12) Expressing concern for social issues by giving money, time, or advice is called ________.
A) Cause-related marketing
B) Foundation
C) Philanthropy
D) Social enterprise
Learning Obj.: LO 3
AACSB: Analytical thinking
3
13) Which of the following is a way to use cause-related marketing in your business?
A) Advertise that you support a social, political, or environmental cause, without actually giving
any money or time to the cause.
B) Donate a small percentage of your revenue to a cause, but don’t tell anyone.
C) Pay employees to volunteer some time toward community service.
D) None of the above.
Learning Obj.: LO 4
AACSB: Application of knowledge
14) A ________ is an identifying symbol for a product or a business.
A) Brand
B) Logo
C) Trademark
Learning Obj.: LO 2
AACSB: Analytical thinking
15) According to Guerilla Marketing Attack by Jay Levinson, when consumers in the furniture
industry rated factors affecting their purchase decision, ________.
A) Price was by far the most important variable
B) Price was the ninth most important variable
C) Price was not deemed to be a critical or relevant variable in the purchase decision
D) Price was the 25th most important variable
Learning Obj.: LO 2
AACSB: Analytical thinking
16) New entrepreneurs often feel they should sell their product or service at the lowest price they
can afford. However, ________.
A) Sometimes consumers think low price indicates low quality
B) Often consumers are willing to pay higher prices than the entrepreneur will charge
C) Purchasers of luxury goods may want to pay a higher price rather than a lower price
D) All of the above.
Learning Obj.: LO 2
AACSB: Analytical thinking
4
17) Finding a retail site that has more than ample parking, excellent access and walk-in trade
potential is an example of maximizing which of the marketing Ps?
A) Place
B) Price
C) Product
D) Promotion
Learning Obj.: LO 2
AACSB: Analytical thinking
18) ________ is free (non-purchased) mention of your business or brand in newspapers,
magazines, radio or TV.
A) Advertising
B) Publicity
C) Product marketing
D) Promotion
Learning Obj.: LO 3
AACSB: Analytical thinking
19) Bill and Melinda Gates and Warren Buffett have committed millions of dollars to the Bill and
Melinda Gates Foundation, making them among the world’s greatest ________.
A) Tax payers
B) Philanthropists
C) Misogynists
D) Entrepreneurs
Learning Obj.: LO 3
AACSB: Analytical thinking
20) Fixed operating costs ________.
A) Are not included in COGS
B) Are not direct costs of creating each product
C) Include expenses like the power bill and rent
D) All of the above
Learning Obj.: LO 6
AACSB: Analytical thinking
5
21) Any word, name, symbol, or device used by an organization to distinguish its product is a(n)
________.
B) Patent
C) Trademark
D) None of the above
Learning Obj.: LO 2
AACSB: Analytical thinking
22) What is an intangible asset generated when a company does something positive that has
value?
A) Publicity
B) Goodwill
C) Advertising
D) Optimism
Learning Obj.: LO 4
AACSB: Analytical thinking
23) Anna produces custom decorated handbags in San Francisco. She buys 50 plain handbags at
$10 each and embellishes them with beads and paints and sells all of them for $40 each at a fair.
It costs her $5 each for paint and beads. What was her total revenue and COGS (without labor)?
A) $2,000; $250
B) $3,000; $500
C) $2,000; $750
D) $500; $250
Learning Obj.: LO 7
AACSB: Application of knowledge
24) Quentin produces highly specialized widgets at his factory. He sells them for $150 each and
has a gross profit of $100 on each one. His monthly costs are: $5,000 for rent, $1,000 for
utilities, $13,000 for salaries and benefits, $1,000 for insurance, $3,000 for interest on his debt.
How many widgets does he have to sell to cover his fixed costs?
A) 230
B) 2,300
C) 23,000
D) 3,500
Learning Obj.: LO 7
AACSB: Application of knowledge
6