Questions for Chapter 6
True/False
1) Marketing is at the heart of an organization because its role is to identify and serve
customers’ needs. (pg. 141)
2) The marketing of products and services are similar. (pg. 142)
3) Customer acquisition and retention are the core processes of marketing. (pg. 142)
4) The scope of marketing ranges only from advertising to promotion. (pg. 142)
5) Many entrepreneurs rely heavily on their cash expenditures to achieve a compelling
image in a noisy marketplace. (pg. 142)
6) New ventures must differentiate their product or service to make its distinctiveness
and value clear to customer. (pg. 142)
7) New ventures cannot survive in competition with larger corporations, since the latter
can spend intimidating sums on marketing research, testing their strategies, or
designing marketing campaigns. (pg. 142)
8) Entrepreneurs frequently stumble in their marketing, because of personal biases and
beliefs. (pg. 143)
9) Marketing helps entrepreneurs acquire resources by selling their ideas to potential
investors and partners. (pg. 143)
10) Intuition, personal expertise and passion are usually enough to fully assess
opportunities in an entrepreneur’s marketplace. (pg. 143)
11) Some types of primary data are very difficult to collect, for instance, with personal
interviews or focus groups. (pg. 144)
12) A segment is a group of customers defined by certain commonalities or characteristics
that may be demographic, psychographic, or behavioral. (pg. 145)
13) Entrepreneurs should not initially consider their resources and capabilities when first
developing their marketing strategies. (pg. 145)
14) Two inexpensive ways to identify the appropriate target market are to pursue multiple
markets or to wait for one to emerge. (pgs. 145-146)
15) Customer value is the difference between total customer benefits and total customer
costs, which are both monetary and nonmonetary. (pg. 148)
16) Unfortunately, product differentiation is important for initial product success but not
for longer-term brand building. (pg. 148)
17) The stages of the product life cycle are introduction, growth, maturity, and introduction
again. (pg. 149)
18) During the introduction phase of the product life cycle, marketers must cultivate
customer loyalty and build the brand. (pg. 149)
19) The cost-based method of pricing is marking up a product based on its cost plus a
desired profit margin. (pg. 151)
20) Perhaps the most important product attribute for entrepreneurs is quality, which serves
as a powerful differentiator and is needed to gain the recommendation of customers.
(pg. 150)
21) Price promotions are short term and use regular price levels as a base from which to
discount. (pg. 151)
22) Distribution is not as problematic for service-based ventures as it is for those that
manufacture goods. (pg. 152)
23) Marketing communications convey messages to the market; messages about the
company’s products and services, as well as about the company itself. (pg. 154)
24) The three primary types of sales promotion are consumer promotions, trade
promotions, and sales force promotions. (pg. 156)
25) Channel partnerships and relationships have important implications for entrepreneurs.
In fact, the channel member with the most power will often prevail in a competitive
market. (pg. 153)
26) Guerrilla marketing consists of activities that are non-traditional, grassroots, and
28) People usually use guerrilla tactics in wide-spread advertising, rather than in personal
selling. (pg. 164)
29) Guerrilla tactics have become increasingly difficult to execute in recent years, because
corporate marketing executives are now employing non-traditional tactics as well and
have much larger budgets at their disposal. (pg. 164)
30) Brand equity is the combined result of brand awareness and brand image. (pg. 166)
31) Brand equity is always a positive influence for your company. (pg. 166)
32) The customer’s actual experience with the brand has a strong effect on brand image.
(pg. 166)
33) Early stage companies often find it necessary to scale up or change focus. (pg. 166)
Multiple Choice
1) In addition to acquiring and retaining customers, marketing spans the boundaries
between___. (pg. 141)
2) Four Ps of marketing includes all of these EXCEPT: (pg. 142)
E. None of the above.
4) It is difficult for small companies to save money on “media buys” because ___. (pgs.
E. None of the above.
5) Entrepreneurs market to which of the following audiences? (pg. 143)
6) Which of the following term describes the collection and analysis of any reliable
information that improves managerial decisions? (pg. 143)
7) Which of the following marketers gather from already published sources like an
industry association study or census reports? (pg. 143)
8) Which of the following marketers collect specifically for a particular purpose through
focus groups, surveys, or experiments? (pg. 143)
9) Studies show that accurate pre-venture market analysis can reduce the failure rates of
new ventures by what percent? (pg. 143)
10) ______ are key marketing dimensions that set the strategic framework. (pg. 145)
E. None of the choices above
11) Customer understanding enables the entrepreneur to ______. (pg. 145)
12) The entrepreneur’s decision on how to segment a market is critical because___. (pg.
146)
13) Positioning describes a company’s offering relative to the product attributes that are
most important to whom? (pg. 146)
14) The core product is______, while the augmented product set of attributes is
peripherally related to it. (pg. 146)
15) The attractiveness of a market segment is related to its size, growth rate, and ___. (pg.
146)
16) While segmentation profiles a company’s customers, what does positioning outline?
E. None of the above
17) A positioning statement has which of the following: (pg. 148)
18) Why must a company continue new product development even after launching a
successful product into the market? (pg. 149)
19) Price discrimination happens when a company charges different prices to different
____ segments. (pg. 151)
20) Price discrimination is a pricing strategy that: (pg. 151)
21) Which of the following most directly affects revenue, profits, and how consumers
perceive a product’s position in the market? (pgs. 150-151)
D. Product
E. None of the above
22) The selection of a company’s key communication tools is determined by: (pg. 154)
23) The communications mix includes: (pg. 154)
24) What type of strategy aims to proactively move the volume of products through the
channel using tools such as trade promotions, trade shows, and personal selling to
distributors? (pg. 155)
D. Product differentiation
E. None of the above
25) Entrepreneurs discover the unique value they deliver by ___. (pg. 161)
26) Which of the following is an approach to Guerrilla Marketing? (pgs. 163-164)
27) Entrepreneurs must obtain information that will allow them to understand consumer
E. Pricing or distribution
28) ______ is the customer’s ability to recognize and recall the brand. (pg. 166)
E. Price reductions
30) Some methods employed to develop a “listening system” include: (pg. 165)
A. Transactional surveys
Zacharakis, A., Corbett, A. & Bygrave (2020) Entrepreneurship, 5th Edition. Hoboken, NJ: Wiley.
31) If a company can cultivate brand equity, what type of price can it expect loyal
customers to pay? (pg. 166)
32) All entrepreneurs face the need for brand building, which is ___. (pg. 166)
1) In your own words, define “marketing”. (pg. 142)
• An organizational function and a set of processes for creating, communicating, and
2) Why is marketing critical for entrepreneurs? (pg. 142)
3) What are the “4 P’s” of marketing, and which activities define them? (pg. 142)
4) Why is the marketing done by entrepreneurs different from marketing done by
established companies? (pgs. 142-143)
Zacharakis, A., Corbett, A. & Bygrave (2020) Entrepreneurship, 5th Edition. Hoboken, NJ: Wiley.
o Not only is market information limited, but decision-making can be
muddled by strong, personal biases and beliefs. Early-stage companies
often stumble in their marketing because of a product focus that is
excessively narrow.
o Entrepreneurs market to multiple audiences: investors, customers,
employees, and business partners. Because none of these bonds is well
established for early stage companies, entrepreneurs must be both customer-
oriented and relationship-oriented.
5) What methods can an entrepreneur leverage to identify the most appropriate
price for his or her product? (pgs. 150-151)
6) What is the difference between price skimming and penetration pricing, and when
will a skimming strategy be best? Why? (pg. 151)
7) Distribution channel strategy includes three types of channel coverage, please
define them. (pg. 153)
• Distribution channel strategy includes three types of channel coverage: intensive,
8) What is guerrilla marketing, and what are the main categories of guerilla
marketing? (pg. 163)
9) Why is defining what guerrilla marketing does easier than defining what it is? (pg.
164)
Guerrilla marketing is heard above the noise in the marketplace and makes a unique impact:
• It makes people talk about the product and the company, in essence, relaying the
10) What are the key skills for managing growth and why? (pgs. 165-166)
11) Describe how an entrepreneur may think about selected primary and secondary
target audiences from a segmented market. (pgs. 145-146)
12) Explain how your marketing listening system and market segmentation are
13) With all the discussion of the disadvantages an entrepreneur faces in marketing
relative to large established companies, what would be some of the advantages?
14) . Describe the role of public relations (PR) in entrepreneurial marketing. (pgs.
156-158)
15) For a rapidly growing company seeking greater growth, a large established
channel partner who wishes to place large orders at high prices would seem like a
great opportunity. What factors could make this a terrible idea for a new venture
that an entrepreneur must first look at? (pg. 153)
to avoid entering into a situation where your channel partners bargaining power is
too great and where you will be unable to cover your fixed costs if they demand a
lower price or volume in the future.