Franchising is typically defined as a marketing system revolving around a two-party
legal agreement whereby a franchisor is granted the privilege to conduct business as an
individual owner according to the methods and terms specified by the franchisee.
Personal selling is promotion that is delivered in a one-on-one environment.
An accounting system’s effectiveness rests on a well-designed and well-managed
system of record keeping.
A sole proprietorship must be registered with the state to obtain its legal charter.
Some of the motivations fostering international expansion by small businesses are tried
and true, but new motivations are also emerging as the global economy takes form.
The Internet has been helpful to small firm operations in the United States, but there are
too few customers with Internet access in foreign markets to make this a powerful tool
for going global.
There are no limits on the owner’s personal liability in a sole proprietorship.
You Make the CallSituation 4
Mom’s Monogram is a small firm that manufactures and imprints monogramming
designs for jackets, caps, tee shirts, and other articles of clothing. The business has been
in operation for two years. In the first year, sales reached $50,000. The next year, sales
raced up to $300,000. Pricing of the firm’s services has been based on a straight,
cost-plus approach. Success has spawned plans to double plant size and equipment. The
owners have never spent money on advertising and believe that the expansion will
double sales within the next three years. They plan to continue pricing their services
using markup pricing.
Question 1 What problems may be encountered by this business if it continues to use
markup pricing?
Question 2 How can the firm’s total costs be analyzed to ascertain the appropriate
pricing strategy?
Question 3 What types of discounts might be offered to customers of Mom’s
Monogram? Be specific.
Describe the model of succession in a family business, giving particular attention to its
stages.
A marketer must determine which motivations the consumer will perceive as acceptable
in a given situation.
In estimating promotional expenses, a small business should start by assessing what it
will take to do the job.
A small equipment rental business strives to answer every phone call before the phone
rings three times. This practice is part of the firm’s organizational culture.
Risk management in a small firm is essentially the same as risk management in a large
firm.
The payback period technique shows the number of years it will take to recover the
cash outlay of an investment.
Annie Beiler founded Aunt Annie’s by first developing a better-tasting pretzel and then
building a successful, growing, and profitable business on that foundation.