Entrepreneurship, 3e (Bamford)
Chapter 11 Marketing
1) John needs to know who his customers are and how they might be attracted to his business. He
needs to create a marketing plan to accomplish this.
2) A marketing plan should identify a company’s market and determine a pricing policy.
3) Instead of trying to reach every individual on the market, a firm should concentrate its
marketing efforts on those individuals most likely to buy its products or services.
4) To maximize profits, a small business owner needs to try to reach as many customers as possible
across a wide geographic area.
5) Small businesses must use their resources efficiently, thus distinguishing them from large
businesses.
6) A loss leader is a product or service that is sold at the lowest possible amount that can be
charged while still making a profit.
7) It is advisable for entrepreneurs to make detailed cost calculations for every product or service
they are selling. Through this effort, they can price their products competitively without sacrificing
their profit margins.
8) When using the cost-plus pricing method, a firm will compare their products or services to
similar products or services already on the market in order to determine what price to charge.
9) The pricing floor is the break-even point or the lowest amount that can be charged for a product
or service while still making a minimal profit.
10) When a business owner calculates the floor cost of a product, he or she excludes marketing
costs from the calculations.
11) Many firms use loss leaders to increase their customer base rather than to generate actual
revenue.
12) Dennis determines that a new blinking slinky toy will cost his firm $3.50 to produce. He adds
20 percent the manufacturing costs and prices the product at $4.20. This is an example of cost-plus
pricing.
13) Pricing a service requires a firm to identify and include the cost of overhead expenses and the
cost of the owner’s experience.
14) As their customer base increases, entrepreneurs should most likely raise prices to limit the
customers coming in.
15) A business built on the Software as a Service model should price its services based on the
experience of its staff.
16) Pure promotion is strictly a financial arrangement in which a company pays for an output such
as radio advertisements.
17) Mixed-model promotions cross television and radio ads for a product.
18) Virtually free promotions have very limited financial cost but have a time-commitment
requirement from individuals in the firm doing the promoting.
19) When an owner designs a signage for his or her business, the goal should be to create a simple
but distinctive sign.
20) During the past 15 years, Web pages have moved from an unorthodox competitive advantage
to an orthodox practice.
21) Virtually free promotions are also known as bootstrap marketing.
22) Search Engine Optimization refers to the efforts made to increase the visibility and placement
of a firm’s information on the Web.
23) Sales management refers to the individuals who build and maintain relationships with
customers.
24) Sales management refers to how the whole sales process is managed.
25) A sales management system starts with the hiring of a sales force.
26) Forecasting sales is not guesswork if the sales manager knows who the customers are.
27) A start-up owner must estimate what percentage of the total market potential might become
customers of the business in a targeted area.
28) In the sales forecasting method that looks at customer demand, the process examines the
market to determine how many individuals are likely to be interested in a firm’s products or
services.
29) Regardless of the products or services it sells, an entrepreneurial business requires an extensive
knowledge of local geography to effectively distribute its products or services to its customers.
30) A contract sales force consists of independent salespeople with a wide range of experiences
and contacts. These salespeople are employees of a company on a contract basis.
31) John needs to know who his customers are and how to attract them. He needs a(n)
A) operation plan.
B) business plan.
C) marketing plan.
D) advertising plan.
32) A marketing plan should include
A) identifying a potential market.
B) establishing a pricing policy.
C) developing promotions.
D) all of these.
33) In the context of creating a marketing plan, a new firm’s marketing efforts need to focus on
A) the activities of its competitors.
B) appealing to everyone.
C) the firm’s mission statement.
D) contemporary marketing trends.
34) As more competitors enter the geographic radius for a business, the radius grows ________.
A) larger
B) smaller
C) stronger
D) weaker
35) What is a marketing plan?
A) A plan developed by a business to hire qualified personnel to develop a marketing plan
B) A plan developed by a business to specify who the customers are and how they will be attracted
to the company
C) A plan developed by a business to specify its mission and strategy
D) A plan developed by a business to specify who its competitors are and how the company will
market its products
36) Which of the following aspects needs to be considered while developing a marketing plan?
A) Determining sales management procedures
B) Specifying the ideal and general target customers
C) Identifying a firm’s market
D) All of these
37) The marketing efforts of a firm need to be clearly identified and defined based on
A) the potential competitors in the market.
B) the business’s mission statement.
C) the ability to effectively promote the company.
D) none of these.
38) Which of the following questions should one try to answer after the target population has been
identified?
A) How many individuals from the target population actually exist within the business’s market
area?
B) What percentage of these individuals is reasonable to try to attract as customers?
C) Do these numbers match with your cash flow projections?
D) All of these
39) In the context of determining pricing models, which of the following best defines cost-plus
pricing?
A) A model in which a desired profit margin is added to the cost of a product as deemed
appropriate
B) A model in which a firm builds its customer base by selling its products at operational losses
C) A model in which a product is sold at as low a price as possible while still generating minimal
profits
D) A model in which promotional tactics are used to improve the visibility of a product in the
market
40) In the context of promotions, ________ is a term for all the efforts made to increase the
visibility and placement of business information on the Web.
A) Software as a Service (SaaS)
B) Search Engine Optimization (SEO)
C) Internet distribution
D) domain management