978-1259912191 Chapter 11 Solutions Manual Part 1

Chapter Eleven: Marketing

Key Terms

Bootstrap marketing: Marketing efforts that require little capital. (LO 11-3)

Contract sales force: Independent salespeople with a wide variety of experiences and

contacts, provided by a company on a contract basis. (LO 11-4)

Cost-plus pricing: Pricing in which the entrepreneur initially determines the cost

structure and then determines what profit margin is desired and adds that to the cost.

(LO 11-2)

Independent representatives: Representatives for a variety of products for a number

of companies in a given domain who try to sell those products. (LO 11-4)

Loss leader: A product or service that is sold at a non-operating loss (that is, the price

only accounts for the actual cost of the product) to simply get customers in the store.

(LO 11-2)

Marketing plan: The plan developed by the entrepreneurial business to specify who the

customers are and how they will be attracted to the company (LO 11-1)

Mixed-model promotions: Promotions that cost something but also have an element

of community support. (LO 11-3)

Pricing floor: The break-even point, or the lowest amount that can be charged for a

product or service while still making a minimal profit. (LO 11-2)

Promotion: The means by which a business advances its product or service. (LO 11-3)

Pure promotions: Promotions that are strictly financial arrangements in which you pay

for some outputs, such as radio advertisements. (LO 11-3)

SaaS (software as a service): This business model is based on providing all or most

of the business value electronically and remotely. (LO 11-2)

Sales management: The methods employed to, and the individuals who build and

maintain relationships with customers. (LO 11-4)

Search Engine Optimization (SEO): A term for all the efforts made to increase the

visibility and placement of business information. (LO 11-3)

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Chapter Eleven: Marketing

Opening Vignette – “Mike Radenbaugh – Red Power Bikes – p. 205

Student responses will vary.

Exercise 1 – p. 210

Student responses will vary.

Exercise 2 – p. 212

Student responses will vary.

Ethical Challenge – p. 214

Student responses will vary.

Exercise 3 – p. 15

Student responses will vary

Review Questions – p. 221

1. Describe the basics of a marketing plan. The marketing plan should identify the

2. What advice would you provide to a potential new business owner about

establishing a marketing plan? The new owner needs a specific plan realizing that

3. What elements are necessary for a target customer profile? The target customer

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Chapter Eleven: Marketing

4. How is a target customer profile used in the operation of a new business? The

5. What are the means by which products or services may be priced? Products can

6. How can a new business leverage free promotions? The new business can use

7. What promotions might a new business use and why? A new business may use

8. In what context might independent sales agents be used? Independent sales

9. How is a contract sales force used in new businesses? Contract sales people

10. Explain how the Web is used by businesses for advertising. Having a web

1. In groups, ask students to create a hypothetical business and develop a simple

marketing strategy. Ask students to develop a mission statement for the business.

Next, ask student to incorporate the marketing efforts of their business into the

mission statement. As a group, present each mission statement and discuss how the

marketing strategy enhances organizational effectiveness. Focus on why the mission

should reveal marketing efforts of the business. (LO 11-1)

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Chapter Eleven: Marketing

2. Define a marketing plan and discuss why marketing plans are critical to the new

small business owner. (LO 11-1)

3. In groups, ask students to decide on a new small business. Next, ask each group to

develop a marketing plan for that new business. Ask the students to include the

target customer, pricing strategy, and the promotion strategy for the new small

business. Ask students to present their plan to the class. (LO 11-1, 11-2, 11-.3, 11-4)

4. In groups, ask students to discuss sales information distribution channels. Explain

when each method of distribution is important to a new small business. List all

possible scenarios, then write on board or flip chart. Discuss each as a class. (LO

11-4)

5. Ask students to discuss the two groups of mixed-model promotions. Ask students to

explain how each group can help the new small business owner expand the

company’s target customer base. (LO 11-3)

6. In groups, have students discuss how they would implement a marketing plan for the

following new small businesses: (LO 11-1, 11-2, 11-3, 11-4)

a. A floral shop

b. A small government contracting firm

c. An e-business that sells web design services

d. A small day care center

7. Ask students to discuss pricing floor. Discuss a scenario when the price of the

estimated marketing expense might change. Discuss how this can impact the

marketing plan. (LO 11-2)

Discussion Questions for Online/Hybrid classes

1. Ask students to summarize the issues that need to be considered in the sales

management process. Specifically, list the seven steps and discuss why they are

important to consider. (LO 11-4)

2. What is a marketing plan? Who should develop it? How does it help the new small

business owner? (LO 11-1)

3. Discuss the four methods of selling that an entrepreneur evaluates for the new small

business. Summarize why each is beneficial and describe when they are appropriate

to use. (LO 11-4)

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Chapter Eleven: Marketing

4. Summarize the cost-plus pricing method. Why is this method of pricing difficult to

implement? (LO 11-2)

5. In reference to cost-plus pricing, discuss the comparison effect. Why do consumers

use it? Provide an example. (LO 11-2)

6. Discuss pure promotion advertising. List the six categories and describe them. (LO

11-3)

7. What are the two groups of mixed promotions? Why are they beneficial to the new

small business owner? (LO 11-3)

8. Summarize the two methods used to estimate sales. What are the advantages and

disadvantages of each of these methods? (LO 11-4)

9. What is a contract sales force? Describe a situation when this distribution channel is

beneficial to a new small business owner. (LO 11-4)

10.Why do the marketing efforts of a firm need to be stated in the mission statement?

(LO 11-1)

Discussion Questions for Online/Hybrid Classes – Responses

1. Ask students to summarize the issues that need to be considered in the

sales management process. Specifically, list the seven steps and discuss

why they are important to consider. (LO 11-4) The seven steps are:

1. How many contact points will the business have with each customer?

2. How will each customer be greeted?

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Chapter Eleven: Marketing

2. What is a marketing plan? Who should develop it? How does it help the

new small business owner? (LO 11-1) A marketing plan is developed by the

3. Discuss the four methods of distribution that an entrepreneur evaluates for

the new small business. Summarize why each is beneficial and describe

when they are appropriate to use. (LO 11-4) The four methods are

4. Summarize the cost-plus pricing method. Why is this method of pricing

difficult to implement? (LO 11-2) In the cost-plus pricing method the

5. In reference to cost-plus pricing, discuss the comparison effect. Why do

consumers use it? Provide an example. (LO 11-2) Many consumers will

6. Discuss pure promotion advertising. List the six categories and describe

them. (LO 11-3) Pure promotion is marketing that is paid for and includes signs,

7. What are the two groups of mixed promotions? Why are they beneficial to

the new small business owner? (LO 11-3) Mixed promotions promote the

8. Summarize the two methods used to estimate sales. What are the

advantages and disadvantages of each of these methods? (LO 11-4)The

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Chapter Eleven: Marketing

9. What is a contract sales force? Describe a situation when this distribution

channel is beneficial to a new small business owner. (LO 11-4) A contract

10.Why do the marketing efforts of a firm need to be stated in the mission

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