59) Time compression management (TCM) involves:
A) speeding new products to market.
B) reducing the administrative time required to fill an order.
C) shortening customer response time in manufacturing and delivery.
D) All of the above
60) Which of the following is not a suggestion for using time compression management (TCM)
to turn speed into a competitive advantage?
A) Instill speed in the company’s culture.
B) Use technology to find shortcuts wherever possible.
C) Pay workers more if they do their jobs the same way- only faster.
D) Set aggressive goals for time reduction and stick to them.
61) To attract potential customers, a ________ can serve multiple business purposes, including
keeping customers updated on new products, enhancing customer service, and promoting the
company.
A) newspaper advertisement.
B) brochure.
C) blog
D) radio promotion
62) The Internet offers entrepreneurs tools to provide existing and potential customers with
meaningful information:
A) in a passive, one-directional manner.
B) for those with advanced high-tech skills.
C) in a complex and difficult-to-manage method.
D) in an interactive rather than passive setting.
63) In addition to treating employees with respect, smart entrepreneurs see customer service as
an investment that builds long-term value for their companies through:
A) listening to customers and providing superior service.
B) setting standards and measuring performance.
C) examining the company’s service cycle and empowering employees.
D) All the above build long-term customer service value.
64) Because they lack the size and financial resources of their larger competitors, small
companies are powerless when it comes to developing effective marketing strategies.
65) Too many marketing plans describe in great detail what an entrepreneur intends to
accomplish and pay little, if any, attention to practical and affordable strategies to achieve those
targets.
66) By using guerrilla marketing strategies-unconventional, low-cost, creative techniques-small
companies can get as much “bang” for their marketing bucks as their larger rivals.
67) The specific group of customers at whom a company aims its goods and services is its target
market.
68) A guerrilla marketing plan should identify a small company’s target customers and describe
how the business will attract and keep them.
69) A “shotgun approach” to marketing is the small business’s secret to competing successfully
with larger rivals and their bigger marketing budgets.
70) An effective marketing program depends on a clear, concise definition of the firm’s target
market.
71) A critical marketing step is to clearly define their target market.
72) The company’s target customer should permeate the entire business, from the merchandise
purchased, in the layout and decor of the store, and on their Web site.
73) The increasing diversity of our population is creating a marketing “threat” to small
businesses because they cannot profitably serve small niches.
74) Small companies that spot demographic trends and act on them early can gain a distinctive
edge in the market.
75) Demographics is the study of important population characteristics such as age, income,
education, race, and others.
76) Market research is a valuable tool for defining the firm’s target market, its needs, and its
potential profitability.
77) Watching the top ten TV shows, seeing the top ten movies, or listening to her children are all
ways a small business owner could conduct market research.
78) To be useful, market research must be structured, formal, and highly sophisticated.
79) Primary research data is less time consuming and less costly to gather than secondary
research data.
80) Secondary research data is less time consuming and less costly to gather than primary
research data.
81) Market research requires a business owner to define the objective, collect data, analyze and
interpret that data, and draw conclusions and act.
82) Small entrepreneurial companies are at a definite disadvantage compared to larger ones when
it comes to conducting market research since it is so expensive.
83) A company has a competitive edge when customers perceive that its products or services are
superior to those of competitors.
84) Branding is communicating a company’s unique selling proposition to its target customers in
a consistent and integrated manner.
85) Because about 20 percent of a typical company’s customers account for about 80 percent of
its sales, a business should focus its resources on keeping its best customers rather than trying to
chase “fair weather” customers who will defect to any better deal that comes along.
86) Customer experience management (CEM) is the process of systematically creating the
optimum experience for their customers every time they interact with the company.
87) Most dissatisfied customers complain about rude or discourteous service to the owner or the
manager.
88) The best way to find out what customers really want and value is to ask them.
89) Giving customers a chance to complain about a problem usually is fruitless; once a business
makes a customer angry, he typically will not buy from that company again under any
circumstances.
90) If given the chance to complain, 95 percent of customers will buy again when a business
handles their complaints promptly and effectively.
91) Truly customer-oriented companies seek to go beyond customer satisfaction, striving for
superior customer service.
92) When an employee in a business treats a customer poorly, that customer usually does not
complain; however, she does tell her “horror story” about that business to more than 10 other
people.
93) Since front-line service workers are not able to predict the causes of customer complaints,
managers must be the ones to identify potential customer service problems.
94) One disadvantage of total quality management (TQM) is that its principles apply only to
manufacturers.
95) If employees are committed to quality, management’s commitment becomes unimportant.
96) It takes much less money and time to keep existing customers than it does to attract new
ones.
97) Because a majority of the average company’s sales come from present customers, few can
afford to alienate any customers.
98) Providing low prices is the most effective way for a small business to attract and maintain a
growing customer base.
99) Total quality management (TQM) works best when it becomes an integral part of a small
company’s strategy and focuses on continuous improvement in the quality the company delivers
to customers.
100) The best way for a small business to ensure quality products is to use quality inspections.
101) Studies have found that customers value convenience and easy access to goods and
services.
102) Adding innovative products and services is important to a companies’ success and small
entrepreneurial companies may be able to respond faster than larger organizations.
103) Most businesses are finding technology provides efficiency and speed in providing a wide
array of services to their customers.
104) The Internet allows creative small business owners to make their companies look as big as
their larger rivals.
105) For many small businesses, nonprice competition-focusing on factors other than price-is a
more effective strategy than trying to beat larger competitors in a price war.
106) Why is it important for small business owners to define clearly their target market(s) as part
of their marketing strategies?
107) Why is it important for small business owners to track demographic trends? How can small
companies become effective trend trackers?
108) Your friend Maria is experiencing declining sales in the business she has owned and
successfully operated for three years. She has asked for your guidance in determining the
course(s) of action she should take. Your recommendation to her is to undertake a marketing
research project. Briefly outline the steps involved in market research. She is concerned that
market research will be too expensive and sophisticated for a small business such as hers. Is this
true? Explain.
109) Describe what is meant by guerrilla marketing. What objectives should a guerrilla
marketing plan accomplish? List at least five guerrilla marketing tactics your small business
might be able to use successfully.
110) Describe why a small business might gain a competitive edge over its rivals by using a
focus on the customer, devotion to quality, paying attention to convenience, concentration on
innovation, dedication to service, and emphasis on speed.
111) Explain the concept of total quality management. How is it different from the quality
inspection of a final product just before being packaged?
112) Why is it important for a small business to keep existing customers satisfied? How can a
company achieve such customer satisfaction?
113) What marketing potential does the Internet offer small business owners?
Mini-Case 8-1: Customers: Key to Success
Lloyd Dixon has owned and operated a small dress shop for the past three years. Each fashion
season, Lloyd attends the apparel shows and he is always very impressed by the glamour and the
hundreds of different manufacturers, all with the merchandise that they say will be this season’s
biggest sellers. Lloyd caters to an older market and baby boomers. He hopes to tap into the
upscale market.
After his first year of operation, Lloyd recognized that some of his merchandise was not selling.
The “inventory close-out sale” did rescue his investment in this merchandise but did not make
him a profit or contribute much to his overhead. Lloyd knew that it was not reasonable to expect
to sell everything you bought, but he was not sure exactly how much of his inventory was
comprised of slow movers. Lloyd believed that when he went into business he knew what
women wanted in dresses. He had always prided himself on having good taste. When he had the
opportunity to open this store, he was confident that he could choose merchandise that would be
well received. In the first three years of operations, sales have not met Lloyd’s expectations.
114) How could Lloyd realistically create a competitive advantage by giving customer service a
focus in his business?
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115) Faith Popcorn offers several ways Lloyd Dixon could collect information about his
customers and competitors. Explain at least five of those ways.
Case 8-2: TQM and TV in Omaha
Nobody who knew Marvin Tollison ever met a man who liked television better. In the Navy, he
had the opportunity to learn a great deal about his trade. When he finished his tour of duty,
Marvin opened a television repair shop back home in Omaha, Nebraska. Over the years the
quality of his workmanship, his fair prices, and his general overall good nature made his business
flourish. Marvin had a way of finding men and women like himself when expansion was needed.
Over 17 years, the business had grown from a one-man shop operating in his garage to a 38-
employee television repair staff that was dispatched to customers by two-way truck radio. Over
the years, the time between a customer’s call and the television repairman getting to the home
had increased to about two days because the repairmen were taking longer with each call. Call–
backs, having to “re-repair” equipment, are up significantly. Marvin wasn’t sure, but he thought
some of his customers were going elsewhere for service.
116) Can Marvin use TQM to develop a competitive edge? If so, what would you recommend he
do?
117) How can Marvin develop “stellar” customer service?