Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
Chapter 7: Testing and Experimenting in Markets
Test Bank
Multiple Choice
1. What phase of design thinking is associated with experimentation?
a. inspiration
b. ideation
c. implementation
d. nonlinearization
2. Why is experimentation required?
a. to meet the requirements of investors and loan officers
b. to strengthen ideas
c. to help with inspiration
d. to form hypotheses
3. Why is experimentation required?
a. to meet the requirements of investors and loan officers
b. to generate ideas that can be used in further business development
c. to make sure that entrepreneurs have the right assumptions about meeting the
demands of potential customers
d. to form hypotheses about customer behavior towards their product or service
4. What is a hypothesis?
a. an assumption tested through experimentation
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
b. a method used to prove or disprove the validity of an idea
c. the process of conducting a research study
d. a widespread belief
5. Which of the following is an important benefit of experimentation?
a. It makes you get out from behind the desk.
b. Assumptions are validated or proven false.
c. It generates new ideas.
d. It generates new business plans.
6. Experiments need to have a clear purpose, be achievable, and generate ______.
a. positive outcomes
b. product ideas
c. reliable results
d. action
7. Before opening his new bakery, Carlos has received numerical ratings for each of his
products from family and friends he has enlisted as tasters. Now Carlos is adding up the
ratings for each variety. What step in the scientific process of experimentation is Carlos
engaged in?
a. asking lots of questions,
b. carrying out background research,
c. developing hypotheses,
d. analyzing the data
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
8. Rather than just gathering data, an experiment matches an outcome to which of the
following?
a. the hypothesis
b. the data collection method
c. the business problem
d. the business opportunity
9. If an experiment outcome indicates that the original hypothesis was incorrect, what
should the entrepreneur do?
a. conduct another experiment
b. adapt the original assumption
c. move forward until there is another assumption to test
d. terminate the product or business concept
10. The first step of the scientific process for an entrepreneur is which of the following?
a. to conduct a thorough Internet search
b. to develop the hypothesis
c. to ask a lot of questions
d. to analyze the data
11. What did the founder of Amazon come to discover that encouraged him to begin the
scientific process?
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
a. He read about the growth of online shopping on the Internet.
b. He read about the huge growth of Internet usage.
c. He read that bookstores were struggling to keep up with the costs of keeping book
inventories.
d. He read that bookstores were experiencing a decline in sales.
12. What was the first step of experimentation that the founder of Amazon began using
the process to assess online business opportunities?
a. He asked questions about shopping behavior and mail order shopping.
b. He browsed the Internet for online shopping sites.
c. He conducted a survey about interest in online shopping.
d. He tested product online, using someone else’s website.
13. Before Carlos opened his new bakery, he baked a variety of sample cupcakes and
cookies to sell at local farmers markets and other local events. Which stage of the
scientific process of experimentation does this represent?
a. asking lots of questions
b. carrying out background research
c. developing hypotheses
d. testing the hypotheses by running experiments
14. As an entrepreneur, one should think like a scientist and ______.
a. act like one as well
b. not put as much time or precision in experiments as a scientist would
c. conduct experiments with more precision since the results will be acted upon
d. use the same methods as a scientist
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
15. In experimentation, an entrepreneur’s goal should be to do which of the following?
a. Use continual iteration to test and shape ideas.
b. Create perfect experiments for perfect outcomes.
c. Use scientific rigor in the testing of his or her products.
d. Use the scientific method sparingly so as to save resources.
16. What is the last step of the scientific process?
a. analyze the data
b. run the experiment
c. assess the results of the data analysis
d. redesign the product or service
17. Anthony is thinking of starting a small hot-dog cart that he will take to the beach
area in San Diego, California. Before starting, he investigates city ordinances and talks
to vendors in the beach area. He also talks to people at the local parks who sell hot
dogs to find out what makes their business successful. Anthony is conducting what
stage of the scientific process?
a. background research
b. experimentation
c. data analysis
d. testing the hypothesis
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
18. Anthony is thinking of starting a small hot dog cart that he will take to the beach area
in San Diego, California. Before starting, he asks an ice cream vendor if he can offer hot
dogs using his stand for a small rental fee. He will only need to use space for one day.
Anthony is conducting what stage of the scientific process ?
a. testing the hypothesis by running an experiment
b. implementation of the plan
c. developing a hypothesis
d. carrying out background research
19. The owner of Amazon.com developed a site for a relatively low cost and offered
books on the site.
What stage of the scientific process was the owner executing by doing this?
a. testing the hypothesis by running an experiment
b. implementation of the plan
c. developing a hypothesis
d. carrying out background research
20. What question is asked when an entrepreneur draws conclusions from the results of
the data analysis?
a. What can be put into charts and graphs?
b. Can the results be communicated?
c. Do the results support the hypothesis?
d. How can the observations be summarized?
21. How should an entrepreneur approach experimentation?
a. invest high levels of time and resources to strictly adhere to the scientific method
b. use quick, low cost methods of experimentation informed by scientific thinking
c. focus on asking lots of questions and ignore the scientific method
Instructor Resource
Neck, Entrepreneurship
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d. rely upon historical data rather than collecting experimental data
22. What hypothesis did Subway marketers make during the 2008 recession?
a. Sales would improve if there were fewer stores.
b. Selling foot-long subs at the reduced price of $5 would increase sales.
c. More foot-long subs would sell if more expensive items were removed from the menu.
d. Subway sales would improve after the recession were over.
23. How did Subway carry out their experiment to test the effect of $5 subs?
a. They lowered the price of the sub throughout the summer of 2008.
b. They tested the price of the sub at selected stores for a limited period of time.
c. They tested the price of the sub at their flagship store.
d. They conducted a survey to see if people would be willing to purchase the $5 sub.
24. The best way to conduct an experiment is to ______.
a. test the product, service, or idea in a controlled environment
b. test the product, service, or idea with family and friends
c. test the product, service, or idea with real customers
d. conduct the experiment in another location where you will not be using “real”
customers
25. In general, how many different types of customers are there?
Instructor Resource
Neck, Entrepreneurship
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a. one
b. three
c. six
d. 10
26. The customers who actually buy, use, and give feedback on your product are called
which of the following?
a. saboteurs
b. end users
c. influencers
d. economic buyers
27. People with a large following who can affect purchasing decisions are called
______.
a. recommenders
b. end users
c. influencers
d. decision makers
28. Customers who have the ability to approve large scale purchases are called which
of the following?
a. recommenders
b. economic buyers
c. decision makers
d. end users
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
29. What is the term for customers who have a high level of authority in their ability to
approve purchases others make due to their high position in the hierarchy?
a. recommenders
b. economic buyers
c. decision makers
d. end users
30. A customer who delays or vetoes the purchasing decision is referred to as which of
the following?
a. influencer
b. decliner
c. negator
d. saboteur
31. Angelina makes all purchases of printers and small computers for her company, a
company that employs over 1000 people. However, all purchases must be approved by
her district vice president. The district vice president would be listed under which of the
following customer types?
a. decision maker
b. saboteur
c. recommender
d. approver
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
32. Which of the following participant right is an ethical requirement when performing an
experiment?
a. the right to informed consent
b. the right to review the results of the experiment
c. the right to be paid
d. none of these
33. How have large businesses traditionally gauged customer tastes and preferences?
a. by analyzing large amounts of historical data
b. by conducting short market experiments
c. by prototyping new concepts
d. by asking employees
34. The main problem with analyzing historical data is that ______.
a. There is never enough of it to provide reliable data.
b. The data collected was for another purpose than that addressed by the current issue.
c. Historical data can provide insight into past behaviors, but may not predict behavior in
new environments.
d. Historical data was gathered on a different market segment.
35. Which of the following is the main problem regarding intuition in the role of decision
making?
a. People tend to lack sufficient experience.
b. It does not provide evidence to support the idea.
c. Few people have good intuition.
d. Intuition is not real and cannot be trusted.
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
36. Why do some organizations discourage experimentation?
a. Their product or service is already optimized.
b. They lack the skills required for experimentation.
c. They no longer have the time to engage in experimentation.
d. They fear failure or incurring short-term loss.
37. Khalil is buying a new phone for his son. What sort of customer is Khalil?
a. A decision maker
b. A saboteur
c. An economic buyer
d. An end user
38. In designing experimentation opportunities, on which of the following should the
entrepreneur focus?
a. partners
b. customers
c. distributors
d. all of these
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
39. What do the authors suggest about using data that was not specifically gathered to
test the hypothesis?
a. It can be discarded as it will not address the issue at hand.
b. It should not be ignored. Keep track of everything.
c. It should be kept if it is positive information.
d. Discard it unless there is a minimum of six pieces of information saying the same
thing.
40. If you were to storyboard the idea for Rent the Runway, which offers rentals of
designer dresses, in what part of the framework would the fact that most women cannot
afford designer clothes fall?
a. The problem
b. The solution
c. The idea
d. The benefit
41. If you were to storyboard the idea for Rent the Runway, which offers rentals of
designer dresses, in what part of the framework would the fact that the rental model
gives many more women the opportunity to wear designer dresses, which they could
have never afforded before, fall??
a. The problem
b. The solution
c. The idea
d. The benefit
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
42. The ability to make connections, expand our knowledge, and become more
innovative is often the result of which of the following?
a. formal in-depth study
b. gaining experience in a particular industry or profession
c. trying out new experiences and learning new skills
d. hours of work in a particular area
43. Taking apart products and putting them together again can be thought of as
experimentation because doing so ______.
a. generates ideas about how we can make our products or services work better
b. gives us important information about how products are made
c. increases creativity as one imagines how to put the parts together again
d. increases general creative capacities that can transfer to other projects
44. A pilot test ______.
a. is a small-scale study conducted to assess the feasibility of a product or service
b. is a study restricted to the field of aviation
c. is a the launch of a single, “solo” product
d. is a prototype of a product
45. A prototype is described as which of the following?
a. a type of customer
b. an initial version of a product or service designed for use in experimentation
c. a type of stakeholder
d. the final finished product
Instructor Resource
Neck, Entrepreneurship
SAGE Publishing, 2018
46. What is necessary for a prototype to be effective?
a. It must be a working model of the product or service.
b. It must communicate what our ideas look like, behave like, and how they work.
c. It must be the same as the model that will be launched at the start of the business.
d. It must include engineering models or, for a service, an operational plan.
47. A high-level view of thoughts and ideas displayed in sequence through drawings,
sketches, or illustrations is called a ______.
a. process flow
b. high view
c. storyboard
d. pictogram
48. A storyboard is classified as what category of business development tools?
a. drawings
b. prototyping
c. beta tests
d. pilots
49. Who is credited with developing the idea of storyboarding?
a. Warner Brothers
b. Walt Disney