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Indicate whether the statement is true or false.
1. Because sales forecasts revolve around specific target markets, the market should be defined as precisely as possible.
a. True
b. False
2. The marketing strategy section provides the most detailed information in a formal marketing plan.
a. True
b. False
3. Because of the relatively inconsequential amount of sales conducted by a typical small business, the majority of
entrepreneurs need not be concerned with formulating accurate sales forecasts.
a. True
b. False
4. Determining market potential is the process of locating and investigating buying units that have purchasing power and
needs that can be satisfied with the product and/or service being offered.
a. True
b. False
5. Regardless of the type of business, the consumer-oriented marketing philosophy is the best choice among the
competing alternatives.
a. True
b. False
6. Marketing research is an effective supplement, but not a replacement, for the intuitive judgment of entrepreneurs.
a. True
b. False
7. When prior sales information is available, indirect forecasting is the best method to predict future sales.
a. True
b. False
8. A chain-ratio method of sales forecasting, or a buildup process, is frequently used for consumer products forecasting.
a. True
b. False
9. Researchers typically achieve higher response rates from mail and telephone surveys than from personal interviews.
a. True
b. False
10. It is best to write a marketing plan before collecting marketing research data.
a. True
b. False
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11. When a strategist divides the total market for a product and/or service into groups with similar needs, so that each
group is likely to respond to the same marketing strategy, he or she is engaging in a practice called market segmentation.
a. True
b. False
12. In order to achieve market success, a firm should concentrate on either providing an excellent product and/or service
or devising an insightful marketing strategy.
a. True
b. False
13. Personal interview surveys are attractive as a marketing research method because these are inexpensive to conduct.
a. True
b. False
14. Marketing research is defined as the gathering, processing, reporting, and interpreting of marketing information.
a. True
b. False
15. A market is best defined as a geographical area that is of commercial interest to the entrepreneur.
a. True
b. False
16. Small business owners can now buy inexpensive personal computer software that can perform statistical calculations
and generate report-quality graphics.
a. True
b. False
17. A buildup process requires a small business to identify all potential buyers in a target market’s submarkets and then
combine these estimates to determine the calculated demand.
a. True
b. False
18. Because many small business owners have strong production skills, they often attend mostly to the marketing side of
the business to compensate.
a. True
b. False
19. Small businesses typically conduct less marketing research than big businesses, partly because they lack an
understanding of the basic marketing research process.
a. True
b. False
20. The forecasting process can be characterized by the point at which the process is started and the nature of the
predicting variable.
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a. True
b. False
21. Small business marketing is best defined as the performance of distribution activities that affect the flow of goods and
services from producer to consumer or user.
a. True
b. False
22. Because of the considerable cost, time, and effort, pretesting is generally considered necessary only in the case of
extensive, complex questionnaires.
a. True
b. False
23. If an entrepreneur anticipates several target markets, each individual segment must have its own corresponding
customer profile.
a. True
b. False
24. The most difficult forecasting situation is when an entrepreneur is inexperienced and has a new idea.
a. True
b. False
25. A detailed analysis of competitors is an important part of a firm’s formal marketing plan.
a. True
b. False
26. Sales forecasts are typically expressed in dollars or units.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
27. Nardella has completed her market research but now feels overwhelmed by the large amount of data. It might be
helpful to her to:
a. use a program like Excel to help her interpret the data. b. use a
program like PowerPoint to create a slide show for her investors.
c. hire a consultant to summarize the data. d. work with college
students to sort the data.
28. When Abigail buys salt, the core product and the actual product are:
a. seasoning for her food and the salt itself. b. the salt itself
and seasoning for her food.
c. not related. d. the same.
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29. Miguel is deciding how to get his product to his customers. His options include a fixed location, a mobile location,
working out of his home, and the Internet. Miguel is making the ___________ decision.
a. product b. place
c. price d. promotion
30. People of all backgrounds, occupations, and income levels wear watches but Rolex focuses only on the high-income
portion of the market. Rolex uses a(n) ____________ strategy.
a. mass marketing b. multi-segment
c. unsegmented d. single-segment
31. Forecasting sales for a new venture will be the most difficult when
a. the owner is unfamiliar with quantitative analysis.
b. the owner is unfamiliar with qualitative analysis.
c. the owner is starting another business in a new industry.
d. All of the above are equally difficult.
32. The ____ marketing philosophy is the preferred approach for all businesses.
a. product-oriented
b. market-oriented
c. sales-oriented
d. consumer-oriented
33. Spira Footwear, Inc. produces running and walking shoes with a patented technology. Therefore the company’s
profile should concentrate the most on
a. the features the shoes offer the customer.
b. the uniqueness of the product.
c. the benefits to the customers.
d. All of the above are equally important.
34. Techniques used to collect primary data are often classified as ____ and ____ methods.
a. internal/external
b. observational/questioning
c. exploratory/descriptive
d. focus/comprehensive
35. In the analysis of a market, the customer profile should include a:
a. description of consumer weaknesses.
b. summary of production plans.
c. detailed discussion of major customer benefits provided by the product and/or service.
d. profile of major markets not targeted.
36. Morton sells salt; Domino sells sugar. The best strategy for either of these products would be:
a. the unsegmented strategy. b. the multi-segmented strategy.
c. a differentiated strategy. d. a single-segment strategy
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37. Richard is trying to figure out how many units of his product his new business could reasonably expect to sell in its
first year. Richard is working on the:
a. production schedule. b. marketing research
c. inventory policy. d. sales forecast.
38. The initial step in the marketing research process is to:
a. select a data collection method.
b. identify consumer/business segments of interest.
c. identify informational needs.
d. conduct a preliminary information search.
39. In order to be appropriately considered a market, a group of customers or potential customers must have
a. purchasing power.
b. market power.
c. satisfied needs.
d. correlated needs.
40. In considering its marketing strategy a new venture will typically concentrate on:
a. mass marketing.
b. a multi-segmented market.
c. a single-segment approach.
d. the Internet.
41. Why would a small business conduct less marketing research than a larger, established firm?
a. The entrepreneur can rely on intuition and observations. b.
Marketing research is expensive.
c. Marketing research is not necessary for the start-up business.
d. Data is not generally available for new business ideas.
42. A firm’s marketing mix consists of ____ activities.
a. pricing, promotion, and distribution
b. product, pricing, and promotion
c. product, promotion, and distribution
d. product, pricing, promotion, and distribution
43. Ideas Unlimited is a consulting firm that provided retailers with information about regional sales trends. To estimate
demand in the market for its services, the firm’s marketing department identifies all buyers in each category of retailers
and determines how much business is possible. The market demand estimate is based on the:
a. aggregate forecasting process.
b. breakdown forecasting process.
c. buildup forecasting process.
d. indirect forecasting process.
44. Special consideration should be given to the selection of the ____________ and the logic of this selection should be
explained in the marketing plan.
a. company logo b. company name
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c. company slogan d. company philosophy
45. The description of potential customers in a target market is commonly called a:
a. customer profile.
b. demographic detailing.
c. Simpkins matrix.
d. target picture.
46. The most detailed and scrutinized section of a formal marketing plan is the:
a. competitor analysis.
b. marketing strategy.
c. market analysis.
d. consumer analysis.
47. Adopting a consumer-oriented marketing philosophy is most consistent with:
a. quickly gaining highly profitable market returns.
b. eventually achieving long-term market success.
c. the revenue stabilizing effect of large market shares.
d. focusing on the single most profitable consumer segment.
48. Which source of data would be the least helpful for secondary data use?
a. libraries of higher education
b. the Small Business Administration
c. blogs
d. the Internet
49. Irene, owner of a small retail shop, is evaluating her customer profile. Which item is the most critical for her customer
profile?
a. the financial ratios to see how much her product costs the customer
b. whether the marketing research was completed with primary or secondary information
c. the customer benefits to verify they are consistent with the customer needs
d. the customer demographics to determine new customers
50. The section of the marketing plan which describes the entrepreneur’s approach to creating customer awareness of the
product or service is the:
a. product and/or service section.
b. promotion section.
c. distribution section.
d. pricing section.
51. Marta’s job involves asking shoppers in the mall about their experience with specific products. She works from a list
given to her by the products’ producers. Marta is using the _________ method to gather ____________ data.
a. observational, secondary b. questioning, primary
c. observational, primary d. questioning, secondary
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52. Andrew is considering two models of cars. The size, price, and options are identical. However, one model gets better
gas mileage. This fact would be considered a(n):
a. core product. b. actual product.
c. augmented product. d. ancillary product.
53. Shiloh has begun the sales forecasting procedure with a variable that has a very large scope and then systematically is
working down to the sales forecast. Shiloh is using the:
a. breakdown process.
b. buildup process.
c. chain-linkage method.
d. bottom-up method.
54. XYZ Corporation faces little competition for its product and can barely keep up with demand. The marketing
philosophy most likely in place at XYZ is the ____________ philosophy.
a. production-oriented b. sales-oriented
c. consumer-oriented d. efficiency-oriented
55. Ned was just about ready to begin his market research when an unknown rival launched a similar product in the
market. Ned’s best course of action would be:
a. to go ahead with the research to support future decisions. b. to wait
and see how well the rival’s product sells.
c. to dispense with the research and launch his own product. d. to scrap
his original product idea and come up with something else.
56. What determines whether the sales forecasting process is direct or indirect?
a. the industry orientation of the firm
b. the nature of the predicting variable
c. the ultimate goal of the entrepreneur
d. the marketing philosophy of the company
57. Sheena is using her last three years’ sales to forecast next year’s sales. Sheena is using the _________ method.
a. direct b. indirect
c. variable d. primary
58. Rhoda describes her typical customer as female between the ages of 22 and 35 with at least two years of college and a
household income above $50,000 annually. Rhoda is using _________ to describe her customers.
a. numeric variables b. benefit variables
c. demographic variables d. psychographic variables
59. The consumer-oriented approach to marketing:
a. is just one more business philosophy.
b. focuses on “pushing the product”.
c. recognizes first and foremost the need for attaining production efficiency goals.
d. is the recommended philosophy for all types of businesses.
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60. In her marketing plan, Candace is describing the laws of a foreign country and comments about the exchange rate. It
is likely Candace is considering ______________ as a method of distribution.
a. importation
b. exportation
c. Internet marketing
d. air transport
61. Traditionally, marketing philosophies have been categorized as:
a. consumer-oriented and market-oriented.
b. consumer-oriented, product-oriented, market-oriented, and volume-oriented.
c. consumer-oriented, market-oriented, sales-oriented, and process-oriented.
d. consumer-oriented, production-oriented, and sales-oriented.
62. Allison is gathering information about other producers in her industry for inclusion in the ______________ section of
her marketing plan.
a. market analysis b. marketing research
c. SWOT analysis d. competition
63. The name of a new business should be:
a. simple, memorable, and descriptive of the benefits. b. simple,
memorable, and descriptive of the product.
c. the family name of the founder and descriptive of the product.
d. simple, memorable, and include the name of the founder.
64. Every day, associates of Sewell Motors, a Dallas-based auto retailer, strive to exceed the company’s expectations of
treating the customer as its number one priority. Every action, policy, and ultimate sale is conducted professionally, with
consumers’ needs in mind. Sewell Motors subscribes to the ____ marketing philosophy.
a. consumer-oriented
b. market-oriented
c. sales-oriented
d. product-oriented
65. The price of an item should be:
a. based solely on the break-even analysis. b. less than what
the competition is charging.
c. what purchasers are willing to pay. d. total costs plus a margin
of profit.
66. The market analysis section of the marketing plan should include
a. sales options.
b. a customer profile.
c. a statement of marketing tendencies.
d. a summary of market philosophies.
67. Because he lacks strong forecasting skills, Stan should:
a. become a member of his trade association. b. subscribe to trade journals.
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c. read magazines focused on small businesses. d. all of the above.
68. The areas of marketing strategy that should be addressed within the marketing plan are
a. promotional, pricing, distribution, and product and/or service plans.
b. promotional and pricing plans.
c. promotional and distribution plans.
d. promotional, pricing, and distribution plans.
69. Creators Plus, a modest-size manufacturer of quality crafts, expends considerable resources to ensure that its products
are created in the most efficient manner. According to the owner, distribution and promotion are secondary considerations
to managing an expedient production process. Creators Plus subscribes to the ____ marketing philosophy.
a. process-oriented
b. market-oriented
c. sales-oriented
d. production-oriented
70. A firm’s marketing philosophy determines how strategic marketing activities are used to achieve:
a. efficiency.
b. customer response.
c. desirable thought patterns.
d. business goals.
71. Odessa is writing the marketing plan for her bed and breakfast. She has written that her market includes everyone
from infants to the elderly. This is incorrect because:
a. customers must have purchasing power. b. the elderly are not likely
to have unsatisfied needs.
c. infants cannot write. d. infants do not make buying decisions.
72. In preparing a sales forecast, it is desirable to have forecasts covering the “most likely”, “best case” and “_____ case”
scenarios.
a. rapidly shifting
b. pessimistic
c. predominant
d. worst
73. The risk of being the lower-cost producer of a good or service is:
a. your business will fail more quickly. b. your business will
generate excess cash and will incur higher taxes.
c. your business will have problems keeping up with demand. d.
customers will abandon your business when someone else offers a lower price.
74. Meredith is opening a high end shoe store specializing in designer shoes. Which approach is probably the wisest
strategy for the marketing efforts of this company?
a. Unsegmented strategy since everyone wears shoes.
b. Multi-segment strategy since she could concentrate on persons wanting shoes for different reasons.
c. Single-segment strategy since only women with high disposable incomes would be a prospective customer.
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d. Bi-segment strategy since the company won’t be able to sell to just one segment to survive.
75. John, a car repair shop owner, is developing the warranty and repair policies for his business. What area of the
marketing strategy is he addressing?
a. Promotional plan
b. Product and/or service plan
c. Distribution plan
d. Pricing plan
76. To determine credit card average purchases, managers of Component City Stereo and Appliances reviewed credit card
sales receipts from the previous three months. Managers are conducting marketing research by collecting and analyzing
a. primary data.
b. observational data.
c. questioning data.
d. secondary data.
77. Brenda is creating the marketing plan for her bakery. Many of the recipes she will use were handed down through her
family and she would like to keep them secret. These recipes will be considered:
a. patent-protected. b. copyrighted.
c. intellectual property. d. family heirlooms.
78. Wilson is so confident of the benefits of his product, he is sure people will line up to buy it if only they knew about
it. Wilson will most likely subscribe to the _______________ marketing philosophy.
a. production-oriented b. sales-oriented
c. consumer-oriented d. promotion-oriented
79. Mary, owner of Delany Salsas, is curious to know whether the new packaging for her line of salsas is being noticed by
supermarket consumers. To collect information, she passively watches shopper reactions as they pass by the Delany
Salsas display. Mary is collecting ____ data through ____ methods.
a. secondary/observational
b. primary/questioning
c. primary/observational
d. secondary/questioning
80. Using the number of births in a historical record to predict the number of driver’s licenses issued in subsequent years is
an example of the use of a(n) ____ variable in forecasting.
a. approximating
b. indirect
c. surrogate
d. terminating
81. The _____ method is probably the oldest form of research in existence.
a. questioning
b. secondary research
c. observational
d. interpretive
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82. Marketing research should be viewed as a supplement to, not a replacement for, _____.
a. the observational method.
b. questionnaires.
c. mail surveys.
d. intuitive judgement.
83. A ____ estimates how much of a product and/or service will be purchased within a market over a defined period of
time.
a. market forecast
b. market analysis
c. sales forecast
d. sales analysis
84. Bennett left his job as production manager and launched his own company because he was sure his methods of making
the same type of product would be more profitable and efficient. Bennett is likely to employ the __________ marketing
philosophy.
a. efficiency-oriented b. sales-oriented
c. production-oriented d. consumer-oriented
85. Joel recently opened a neighborhood grocery. He chats briefly with each customer, carefully bags or boxes their
purchases, and offers to load them into the customers’ cars. Joel has learned that:
a. a business provides a bundle of satisfaction to its
customers, not just the product they have bought. b. customer relationships are more important than
profits.
c. how his customers feel is just as important as their
satisfaction with their purchases. d. keeping customers is easier than finding new
ones.
86. Entrepreneurs should base their market assessments, production schedules, inventory policies, and personnel decisions
on:
a. techniques of observation.
b. qualitative analysis.
c. intuition alone.
d. the sales forecast.
87. Paul is a CPA (certified public accountant). He offers a variety of services depending on the needs of his
customers. Some hire him to perform bookkeeping activities; others have him prepare their tax return. Paul’s market is
segmented based on:
a. benefit variables. b. demographic variables.
c. income levels. d. basic needs.
88. Theodore has identified all the buyers in a market’s submarkets and then totaled the estimated demand for all the
submarkets. Theodore used the:
a. breakdown process
b. buildup process
c. chain-ratio method