Chapter 7—The Marketing Plan
TRUE/FALSE
1. 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.
2. 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.
3. Regardless of the type of business, the consumer-oriented marketing philosophy is the best choice
among the competing alternatives.
4. Because many small business owners have strong production skills, they often attend mostly to the
marketing side of the business to compensate.
5. If an entrepreneur anticipates several target markets, each individual segment must have its own
corresponding customer profile.
6. A detailed analysis of competitors is an important part of a firm’s formal marketing plan.
7. The marketing strategy section provides the most detailed information in a formal marketing plan.
8. It is best to write a marketing plan before collecting marketing research data.
9. Marketing research is defined as the gathering, processing, reporting, and interpreting of marketing
information.
10. Small businesses typically conduct less marketing research than big businesses, partly because they
lack an understanding of the basic marketing research process.
11. Researchers typically achieve higher response rates from mail and telephone surveys than from
personal interviews.
12. Because of the considerable cost, time, and effort, pre-testing is generally considered necessary only in
the case of extensive, complex questionnaires.
13. Personal interview surveys are attractive as a marketing research method because these are
inexpensive to conduct.
14. Small business owners can now buy inexpensive personal computer software that can perform
statistical calculations and generate report-quality graphics.
15. Marketing research is an effective supplement, but not a replacement, for the intuitive judgment of
entrepreneurs.
16. A market is best defined as a geographical area that is of commercial interest to the entrepreneur.
17. 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.
18. 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.
19. 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.
20. Sales forecasts are typically expressed in dollars or units.
21. Because sales forecasts revolve around specific target markets, the market should be defined as
precisely as possible.
22. The forecasting process can be characterized by the point at which the process is started and the nature
of the predicting variable.
23. 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.
24. A chain-ratio method of sales forecasting, or a buildup process, is frequently used for consumer
products forecasting.
25. When prior sales information is available, indirect forecasting is the best method to predict future
sales.
MULTIPLE CHOICE
1. Small business marketing involves a number of activities, including
a.
creating, developing, preparing, communicating, and delivering a bundle of satisfaction to
a target market.
b.
planning for optimal production efficiency.
c.
identifying alternative technologies.
d.
establishing a sales-oriented marketing philosophy.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. In recent years, the emphasis in U.S. businesses has been on
a.
consumers.
b.
production.
c.
sales.
d.
time-honored values.
8. The ____ marketing philosophy is the preferred approach for all businesses.
a.
product-oriented
b.
market-oriented
c.
sales-oriented
d.
consumer-oriented
9. Koldpak has focused principally on the development of revolutionary new ways of containerizing fresh
produce for grocery stores. The firm’s marketing philosophy is
a.
consumer-oriented.
b.
market-oriented.
c.
production-oriented.
d.
sales-oriented.
10. 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
11. 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.
12. 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
13. The decision to produce flavored spring water ice cubes in response to requests from its customers
reflects Norway Ice Company’s ____ marketing philosophy.
a.
production-oriented
b.
sales-oriented
c.
consumer-oriented
d.
response-oriented
14. U.S. businesses have recently shifted their focus toward a ____ orientation.
a.
market
b.
consumer
c.
production
d.
sales
15. 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.
16. 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
17. XYZ Corporation faces little competition for its product and can barely keep up with demand. The
marketing philosopy most likely in place at XYZ is the ____________ philosophy.
a.
production-oriented
b.
sales-oriented
c.
consumer-oriented
d.
efficiency-oriented
18. Bennett left his job as production manager and launched his own company because he was sure his
methods of making the same type 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
19. 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
20. 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.
21. 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.
22. 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.
23. In the analysis of a market, the customer profile should include a
a.
description of consumer weaknesses.
b.
summary of production plans.
c.
a detailed discussion of major customer benefits provided by the product and/or service.
d.
a profile of major markets not targeted.
24. Irene, owner of a small retail shop, is evaluating her customer profile. Which item is the most critical
for her 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
25. 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.
26. 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
27. 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
28. 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.
29. 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.
30. 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
c.
company slogan
d.
company philosophy
31. 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
32. 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.
33. 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
34. 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
35. At a minimum, the price of a product or service must cover:
a.
the owner’s expected return on investment.
b.
the cost of bringing it to customers.
c.
all costs of the business plus the profit margin.
d.
production and distribution costs.
36. At minimum, the price of a product and/or service
a.
must cover the cost of bringing it to market.
b.
must demonstrate a substantial profit.
c.
must be at or below the competition.
d.
must be based exclusively on a break-even analysis.
37. 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.
38. 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.
39. 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.
40. 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.
41. 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.
42. 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.
43. Caution is advised whenrelying on blogs for secondary data because:
a.
bloggers are very opinionated.
b.
information in blogs may not be factually correct.
c.
blogs may be outdated.
d.
blogs may be censored.
44. 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
45. Techniques used to collect primary data are often classified as ____ and ____ methods.
a.
internal/external
b.
observational/questioning
c.
exploratory/descriptive
d.
focus/comprehensive
46. 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