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Essentials of Entrepreneurship and Small Business Management, 9e (Scarborough)
Chapter 9 Building a Powerful Bootstrap Marketing Plan
1) ________ is the process of creating and delivering desired goods and services to customers
and involves all of the activities associated with winning and retaining loyal customers.
A) Marketing
B) Personal selling
C) Promotion
D) Customer service
2) For an entrepreneur, a business plan ________.
A) is of relatively little importance due to the dynamic nature of the marketplace
B) is synonymous with the marketing plan
C) tends to stress how the entrepreneur will operate rather than detailing what (s)he wants to
accomplish
D) contains both a marketing plan and a financial plan
3) The focus of a small company's marketing plan should be on ________.
A) preparing accurate financial forecasts
B) the customer
C) describing how its products or services are superior to those of competitors
D) the competition
4) Small businesses can compete with larger rivals with bigger budgets by employing
unconventional, low-cost creative techniques known as ________.
A) market research
B) astonishing customer service
C) bootstrap marketing strategies
D) psychographics
5) Warren Cassell, owner of Just Books, a very small book store, makes special orders for
customers at no extra charge, provides free gift-wrapping, conducts out-of-print book searches,
offers autographed copies of books, hosts "Meet the Author" breakfasts, and publishes a
newsletter for book lovers. By offering his customers lots of "extras" they do not get at larger
bookstores, Cassell has won a growing base of loyal customers. Cassell is relying on which
marketing strategy?
A) Demographic marketing
B) Transaction selling
C) Individualized marketing
D) Bootstrap marketing
6) Bootstrap marketing is a marketing approach that takes an unconventional, low-cost and
creative approach to marketing that can give ________ a competitive edge over ________
competitors.
A) small companies; larger
B) larger companies; smaller
C) small companies; entrepreneurial
D) entrepreneurs; small
7) Which of the following is not one of the objectives a bootstrap marketing plan should
accomplish?
A) Determine customer needs and wants through market research.
B) Determine how the company will be able to serve all customers.
C) Analyze the firm's competitive advantages and build a marketing strategy around them.
D) Create a marketing mix that meets customer needs and wants.
8) Because they lack the size and financial resources of their larger competitors, small companies
are powerless when it comes to developing effective marketing strategies.
9) 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.
10) The specific group of customers at whom a company aims its good or services is referred to
as a ________.
A) market segmentation
B) bootstrap marketing
C) niche marketing
D) target market
11) Successful marketing requires a business owner to ________.
A) understand target customers' needs, demands, and wants
B) offer customers products and services that will satisfy their needs, demands, and wants
C) provide customers with service, convenience, and value so that they will return
D) All of the above
12) The foundation of every business is ________.
A) its products and services
B) satisfying the customer through a customer-driven marketing strategy
C) doing whatever it takes to earn a profit
D) operating in a socially responsible manner
13) Which of the following statements concerning a company's target market is false?
A) Marketing experts contend that the greatest marketing mistake small companies make is
failing to clearly define the target market to be served.
B) A "shotgun approach" to marketing (trying to appeal to everyone rather than to only a small
market segment) is the most effective way to compete with large companies and their bigger
marketing budgets.
C) Small companies are usually better suited to pinpointing target markets that their larger rivals
overlook or consider too small to be attractive.
D) Most successful small businesses have well-defined portraits of the customers they are trying
to attract.
14) One of the greatest marketing mistakes small businesses make is ________.
A) failing to identify the target market
B) spending too little on advertising
C) underpricing their products and services
D) spending too little on quality improvement
15) By using bootstrap marketing strategies (unconventional, low-cost, creative techniques)
small companies can get as much "bang" for their marketing bucks as their larger rivals.
16) The specific group of customers at whom a company aims its goods and services is its target
market.
17) A bootstrap marketing plan should identify a small company's target customers and describe
how the business will attract and keep them.
18) A "shotgun approach" to marketing is the small business' secret to competing successfully
with larger rivals and their bigger marketing budgets.
19) An effective marketing program depends on a clear, concise definition of the firm's target
market.
20) A critical marketing step is to clearly define their target market.
21) The company's target customer should permeate the entire business, from the merchandise
purchased, to the layout and decor of the store, and on the Web site.
22) Why is it important for small business owners to clearly define their target market(s) as part
of their marketing strategies?
23) Studies of shifting patterns in age, income, education, race, and other population
characteristics are the subject of ________.
A) psychographics
B) demographics
C) sociographics
D) paleontology
24) Tracking ________ patterns can enable entrepreneurs to adjust their strategies accordingly to
better position them to take advantage of the opportunities these trends may create.
A) population
B) demographic
C) weather
D) traffic
25) A common mistake entrepreneurs make is ________.
A) assuming that a market exists for their product or service
B) taking too much time to conduct planning and research
C) conducting informal research
D) conducting online research, which is too impersonal and does not yield accurate information
26) Which of the following statements concerning marketing research is false?
A) Market research is the vehicle for gathering the information that serves as the foundation for
the company's marketing plan, helps avoid costly marketing mistakes, and can uncover unmet
customer needs the business can serve.
B) Market research involves systematically collecting, analyzing, and interpreting data pertaining
to the small company's market, customers, and competitors.
C) Small companies are at a distinct disadvantage compared to larger ones when conducting
market research since it is so expensive.
D) Small businesses cannot afford to miss their target markets and market research can help
them focus their efforts.
27) Which of the following techniques does marketing consultant Faith Popcorn recommend to
small business owners interested in tracking market trends?
A) Hire a top-10 market research firm to track trends for you.
B) Watch what the large corporations in your industry are doing.
C) Read as many current publications as possible.
D) Talk with two to three people at random each week to hear what they are buying and why.
28) Entrepreneurs can find the right match based on trends, their products or services, and the
appropriate target markets through ________.
A) expecting "more of the same" for the future
B) looking back and not forward
C) following their intuition
D) market research
29) Your friend has decided to conduct market research to assist in making informed decisions
for her/his small business. What should you recommend as the first step in the market research
process?
A) Collect data
B) Define the objective
C) Design the research
D) Determine the relevant information
30) An individualized (one-to-one) marketing campaign requires business owners to ________.
A) collect information on their customers, linking their identities to their transactions
B) calculate the long-term value of their customers so they know which ones are most desirable
and most profitable
C) practice "just-in-time marketing" by knowing what their customers' buying cycle is and time
their marketing efforts to coincide with it
D) All of the above
31) Which of the following is not a primary market research source?
A) Customer surveys
B) Focus groups
C) Daily transactions
D) All of the above are sources of primary market research.
32) Which of the following is not a secondary source of market research data?
A) Census data
B) Trade publications
C) Focus groups
D) Magazines
33) A process in which computer software that uses statistical analysis, database technology, and
artificial intelligence finds hidden patterns, trends, and connections in data so that business
owners can make better marketing decisions and predictions about customers' behavior is known
as ________.
A) guerilla marketing
B) data mining
C) individualized marketing
D) total quality management
34) Small companies that spot demographic trends and act on them early can gain a distinctive
edge in the market.
35) Demographics are the study of important population characteristics such as age, income,
education, race, and others.
36) Market research is a valuable tool for defining the firm's target market, its needs, and its
potential profitability.
37) 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.
38) To be useful, market research must be structured, formal, and highly sophisticated.
39) Primary research data is less time consuming and less costly to gather than secondary
research data.
40) Secondary research data is less time consuming and less costly to gather than primary
research data.
41) Market research requires a business owner to define the objective, collect data, analyze and
interpret that data, and draw conclusions and act.
42) Small entrepreneurial companies are at a definite disadvantage compared to larger ones when
it comes to conducting market research since it is so expensive.
43) The best way to find out what customers really want and value is to ask them.
44) Why is it important for small business owners to track demographic trends? How can small
companies become effective trend trackers?
12
45) 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.
Mini-Case 9-1: 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.
46) Faith Popcorn offers several ways Lloyd Dixon could collect information about his
customers and competitors. Explain at least five of those ways.
47) One "natural" advantage small businesses have over large businesses, which can be a
significant competitive advantage, is ________.
A) building a community with customers and connecting with them on an emotional level
B) their ability to conduct market research
C) their lower costs
D) their ability to serve many highly diverse target markets
48) Which of the following bootstrap marketing tactic(s) allow a small company to utilize
relationship marketing successfully?
A) Keep in close contact with customers with "thank you's" and other personal communication
techniques.
B) Organize and sponsor a service or community-oriented project.
C) Launch a loyalty or frequent buyer program.
D) All of the above
49) The marketing approach that is most effective today for a small business is ________.
A) mass marketing
B) market segmentation
C) niche marketing
D) individualized (one-to-one) marketing
50) Which of the following was not identified as one of the bootstrap marketing principles in
your text?
A) Strive to be like everyone else so that your company "fits in."
B) Create an identity for your business.
C) Connect with customers on an emotional level.
D) Do not just sell — entertain.
51) A combination of news covered by the media that boosts sales without having to pay is best
described by the term ________.
A) bootstrap marketing
B) entertailing
C) public relations
D) data mining
52) One of the most effective bootstrap marketing tactics is to create an image of ________ for
the business.
A) uniqueness
B) similarity
C) seriousness
D) All of the above
53) Some of the most successful companies interact with their customers regularly, intentionally,
and purposefully to create meaningful and lasting ________.
A) relationships
B) sales
C) obligations
D) memories
54) A key customer benefit of a product or service that sets it apart from the competition answers
the critical questions every customer asks: "What's in it for me?" and is known as ________.
A) its brand identity
B) the unique selling proposition (USP)
C) total quality management (TQM)
D) branding
55) The unique selling proposition (USP) focuses on ________.
A) a feature that is unlike others found in competing products that answers the question: What is
different?
B) a unique customer benefit that answers the question: What's it in for me?
C) a premier priced product that answers the question: What product offers the highest quality?
D) emulating the most successful products in the industry
56) A ________ is a company's "face" in the marketplace and communicates a key message to
the target market.
A) blog
B) logo
C) unique selling proposition (USP)
D) brand
57) ________ is the process of communicating a company's unique selling proposition to its
target customers in a consistent and integrated manner.
A) Branding
B) Selling
C) Entertailing
D) Marketing
58) Examples of ________ include a presence on Facebook, LinkedIn and Twitter.
A) Web sites
B) blogging
C) social media marketing
D) online advertising
59) ________ can be an effective part of a guerrilla marketing strategy, enabling an entrepreneur
to economically communicate with large numbers of customers.
A) Frequent emails
B) Brand awareness
C) Direct mail
D) Blogging
60) Unlike television ads, uploading a video to YouTube costs ________.
A) a lot
B) nothing
C) less
D) plenty
