41) A small business determines the cost of providing a product or service and then adds a given
percentage to it based on the level of profit determined to be appropriate. This is called
A) the loss leader strategy.
B) setting the pricing floor.
C) cost-plus pricing.
D) bootstrap marketing.
42) In the context of pricing models, a ________ is a product or service that is sold at a
nonoperating loss to simply get customers in the store.
A) loss leader
B) keystone
C) core product
D) marginal product
43) Marshmallow Systems is a start-up equipment manufacturer, and its main product is a
smartphone. The firm sells the smartphone at cost, that is, the price is exactly the actual cost of
production. The firm’s intention behind pricing the phone this way is to build its customer base. In
the context of pricing models, the strategy used by Marshmallow Systems is the
A) predatory pricing strategy.
B) pricing floor strategy.
C) cost-plus pricing strategy.
D) loss leader strategy.
44) In determining a pricing model, it is advisable for a business that is just starting out to
A) price its products at a premium to develop a reputation for high quality.
B) offer a great value for the money charged to build a customer base.
C) avoid accounting for its staff’s experience in the price of the services it offers.
D) attempt to reach as wide a customer base as possible.
45) In establishing pricing, there are several caveats that a small business person should consider.
Which of the following represents such caveats?
A) Do you want to offer a quantity discount?
B) What is the actual price charged for a product or service?
C) How to offer an even greater value for the money charged in order to build a customer base?
D) All of these
46) Promotion is the means by which businesses make their product or service known to potential
customers. Which of the following is the most commonly used form of promotion?
A) The Internet
B) Radio advertisements
C) Television advertisements
D) All of these
47) Promoting a product or service is considered to be a part of
A) operations.
B) managing.
C) marketing.
D) planning.
48) ________ are strictly financial agreements in which a business pays for some outputs, such as
radio advertisements.
A) Pure promotions
B) Mixed-model promotions
C) Hybrid-model promotions
D) Virtually free promotions
49) ________ cost something but also have an element of community support.
A) Pure promotions
B) Mixed-model promotions
C) Hybrid-model promotions
D) Virtually free promotions
50) ________ have very limited financial costs but have time-commitment requirements from
individuals in the firm.
A) Pure promotions
B) Mixed-model promotions
C) Hybrid-model promotions
D) Virtually free promotions
51) ________ are events established around a particular theme where businesses are allowed to set
up booths in order to promote their goods or services.
A) Trade shows
B) Marketing fairs
C) Television shows
D) Opportunity fairs
52) A small business can promote itself by sponsoring
A) school activities.
B) sports activities.
C) fundraising activities.
D) all of these.
53) Marketing efforts that require little capital are called ________.
A) hybrid promotions
B) mixed-model promotions
C) bootstrap marketing
D) pure promotions
54) ________ refers to the individuals who build and maintain relationships with customers.
A) Sales management
B) Marketing management
C) Consumer-oriented marketing
D) Management philosophy
55) In the context of determining pricing models, identify an accurate statement about pricing a
service.
A) Unlike pricing models for products, pricing models for services do not have to account for costs
of distribution or delivery.
B) The value of a service can easily be determined based on the number of independent service
providers on the market.
C) When pricing a service, inputs such as education and experience should not be reflected in its
cost.
D) Pricing can be used as an effective tool for controlling the number of customers a service
provider must handle.
56) A(n) ________ distributor is a sales representative for a variety of products.
A) industry
B) multi-segmented
C) independent
D) market
57) A(n) ________ refers to independent salespeople with a variety of experiences and contacts
that work for firms for a given period of time.
A) contract sales force
B) market sales force
C) independent sales force
D) consumer sales force
58) The critical part of using a mail order catalog is identifying the
A) zip code.
B) customers.
C) industry.
D) demographics.
59) A major difficulty of operating a mail order catalog is the handling of
A) credit cards.
B) primary data.
C) call center employees.
D) wrong addresses.
60) SevenStar Inc. hires a team of salespeople from another organization to sell its products. These
salespeople come with a variety of expertise in identifying customers and selling products. The
team works with SevenStar Inc. for one year, and in this time, it boosts sales figures for the
company by almost 150 percent. In the context of sales management, the people hired by
SevenStar Inc. are most likely
A) a customer service team.
B) from an advertising agency.
C) a contract sales force.
D) organizational growth consultants.
61) All of the following represent issues that need to be considered in sales management EXCEPT
A) What image will the sales force represent?
B) What would be the cost of the final product that is sold to the customers?
C) How much information will be collected on each customer?
D) What will the business do with the information collected about customers?
62) Which one of the following methods does NOT require an extensive understanding of
geographic location?
A) Virtually free promotion
B) Independent sales force
C) Mixed promotion
D) Pure promotion
63) A(n) ________ is developed by a business to specify who the best customers are and how they
might be attracted to the company.
64) ________ is a term for all the efforts made to increase the visibility and placement of business
information on the Web.
65) ________ is pricing in which an entrepreneur initially determines his or her cost structure and
then determines what profit margin is desired and adds that to the cost.
66) ________ is a business model that is based on providing all or most of the business value
electronically and remotely.
67) The ________ is the lowest amount that can be charged for a product or service while still
making a minimal profit.
68) ________ is the means by which a small business becomes known to potential customers.
69) What is a marketing plan? Briefly describe the difficulties faced by small firms in developing
marketing plans, as well as one potential solution.
70) When the target population is identified, what questions should a small business owner try to
answer?
71) Define cost-plus pricing and give an example.
72) Define pure promotions and list five examples.
73) List and define the three basic types of promotions, and provide an example for each.
74) Define and briefly describe a contract sales force.
75) What are the four methods of distribution that do not require an extensive understanding of
geographic location because they may be selling an industrial product that has the potential for a
nationwide distribution?