SBM Ch 5-8

You should create your total product or service concept early on. (T/F)

Although there are numerous pricing strategies to use in the beginning, it really doesn't matter since pricing is really guess work. (T/F)

There is no single, perfect method of establishing a promotional budget because it is both an art and a science. (T/F)

Location and distribution are major components of the "place" component. (T/F)

Cause-related marketing is a rather difficult way to work philanthropy into your business. (T/F)

Which of the following is one of the four Ps of marketing? a. population b. publicity c. product d. packaging

What is the smartest price strategy? a. Choose a pricing strategy that incorporates the psychology of pricing. b. Pick a pricing strategy that is different from the competition's strategy. c. Offer the lowest price that you can afford to offer. d. Find the lowest cost products from your suppliers.

Which of the following is not an example of successful branding? a. A product represents luxury to customers. b. Customers associate a product with high ethical standards. c. Customers confuse a business's logo with that of another business. d. Associate your company with a charity.

When you build a brand, try to focus tightly on one key ________. a. feature b. benefit c. product d. product line

Promotion consists of ________. a. other promotional devices such as discount coupons and giveaways b. advertising c. publicity d. all of the above

Why are nonprofit corporations tax exempt? a. because they use the money they collect to help improve society b. because they donate money to foundations c. because they pay a different form of tax than regular corporations d. they are too few in number to matter to the government

To break even, a business must ________. a. sell enough units to cover all its costs b. sell enough units to cover its fixed costs c. sell enough units to earn a profit d. sell enough units to cover variable costs

A __________ is an announcement sent to the media to generate publicity a. press release b. advertising c. sales promotions d. public relations

A press release should answer six questions. Which of the following is not one of the six? a. Who? b. How? c. When? d. Why not?

Expressing concern for social issues by giving money, time, or advice is called ________. a. philanthropy b. cause-related marketing c. foundation d. social responsibility

Which of the following is a role of the marketing plan? a. convincing skeptical investors that your plan has merit b. identifying the target market for the organization c. detailing the advertising plan d. all of the above

Good marketers know that a(n) __________ is the heart of the marketing plan. a. researching suppliers b. sales forecast c. analysis of the market d. price/profit schedule

New entrepreneurs often feel that they should sell their product or service at the lowest price they can afford. However, ________. a. purchasers of luxury goods may want to pay a higher price rather than a lower price b. often consumers are willing to pay higher prices than the entrepreneur will charge c. sometimes consumers think low price indicates low quality d. all of the above

________ is free (nonpurchased) mention of your business or brand in newspapers, magazines, radio, or TV. a. Publicity b. Advertising c. Promotion d. Product marketing

Create a ________ that can be used in all the promotional materials you use to present your business image. a. product and price b. logo and "look" c. marketing message and product message d. none of the above

The essence of selling is teaching. (T/F)

It is not really necessary to prequalify your customer before the sales call since it can be done during the sale. (T/F)

Asking the right questions is optional during a sales call or presentation. (T/F)

A successful business is built upon repeat customers. (T/F)

The Small Business Administration advises salespeople to put the customer first, stay close to the customer, and pay attention to details. (T/F)

If you decide to pay yourself a commission from your business, you will be earning _______. a. a percentage of your business profit b. a percentage of each sale c. a set salary d. a bonus

When you sell, you should always listen carefully to customer complaints because ________. a. it's better to have customers complain to you than to other people b. customers are happier when you listen to them c. they provide invaluable information about how to improve the product or service d. the "buck" stops here

During each sales call you make, you should focus on which question? a. How can I make the customer buy from me? b. What does the customer need? c. How can I convince the customer to ignore his or her objections? d. How do I handle the objections that will be raised?

Here's a rule of thumb that salespeople use: If a customer says "No" during a sales call ________, he or she probably means it. a. four times b. three times c. two times d. once

Which of the following is not an example of customer service? a. Suggest a less expensive product that will meet the customer's need. b. Provide free delivery. c. Keep a customer on hold indefinitely. d. Help customers carry their purchases to their vehicles.

Everything that a business does to keep its customers happy is called ________. a. customer service b. customer appreciation c. postsale service d. customer satisfaction

Information such as customers' e-mail addresses and purchasing history can be stored in a simple computer ________. a. website b. program c. database d. software

Telling the truth about any negative aspect of a product or service usually ________. a. means that you are dishonest b. annoys your customer c. gains your customer's trust d. makes a customer think you are up to something

Customer service after a sale is an investment of time, money, and energy ________. a. that can have a very high return on investment b. that 250 other people will share c. that has no return on investment d. that has a low return on investment

People you think might be receptive to your sales presentation are called ________. a. consumers b. customers c. prospects d. interested parties

The best sales people ________. a. know their product or service b. keep good records and think positively c. know their customers and their field d. all of the above

You will do best if your keep your sales call under ________. a. one minute b. 5 minutes c. 10 minutes d. 20 minutes

Once you make a sale, do not forget to ________. a. say thank you b. give a receipt c. keep good records d. all of the above

An angry customer can make you angry, too. However, it is crucial that ________. a. you ensure you continue to sell your product or service b. you stay calm, ask the customer to explain the situation, and do not interrupt the customer as he or she speaks c. you make your points to the customer d. once the sale is made do not go back to this person

A critical cost for a beginning business is the seed capital. (T/F)

It is wise to keep a reserve equal to one-fourth of the start-up investment. (T/F)

Fixed operating costs can change over time. (T/F)

Inflation is not a problem for most businesses because you can simply raise your prices to compensate. (T/F)

Keeping good records will show how to make a business more profitable, will document business profitability/cash position, and prove that payments have been made. (T/F)

The bedrock principle of business is that it should __________. a. please its customers b. advertise better than its competitors c. earn a profit d. continually improve

Which two categories below are used for business costs? a. materials and labor b. gross and net c. fixed and variable d. cost of goods sold and administrative

Overhead is another term for ________. a. fixed operating costs b. net costs c. seed capital d. administrative costs

Which of the following is not a category of fixed costs? a. rent b. advertising c. capital d. depreciation

Start-up investment is the one-time expense of opening a business. It is also called ________. a. entry cost b. seed capital c. down payment d. beginning capital

A(n) ________ is a model or pattern that serves as an example of how a product would look and operate if it were manufactured. a. prototype b. archetype c. typology d. model

If you sell $2,500 worth of product and pay COGS of $800 and other variable costs of $360, what is your gross profit? a. $1,340 b. $1,700 c. $2,464 d. $2,500

The percentage of value of an asset subtracted each year until the value becomes zero to reflect wear and tear on the asset is called ________. a. depreciation b. inventory c. deductible d. reduction

If a business has total gross profit of $14,720 and total operating costs of $11,500, what is its total profit? a. $3,000 b. $3,220 c. $1,150 d. $0

If a business sells 5,000 units for a total profit of $200,000, what is its profit per unit? a. $50 b. $400 c. $40

Why is it best to pay expenses for your business with a check, not with cash? a. A check can't be traced. b. Cash is easier to lose. c. A check provides written proof of payment. d. It keeps the check printing business and banks in business

________ is the general rise in the price of goods and service in an economy. a. Recession b. Deflation c. Inflation d. Hyperinflation

Business start-up cost information can be obtained from ________. a. competitors b. quotations from vendors c. industry data d. all of the above

The first place to start researching your start-up costs is _________. a. government publications b. business plan models in your industry c. a competent research company d. your own accounting records

The difference between a receipt and an invoice is that the receipt records _________. a. sales b. interest paid c. purchases d. credit transactions

The power of the income statement is that it will tell you whether you are fulfilling the formula of buying low, selling high, and meeting customer needs. (T/F)

The balance sheet equation tells us that assets - liabilities = net profit. (T/F)

Firms are concerned about liquidity, which means the ability to convert inventory into credit sales. (T/F)

Debt ratios show the relationship between debts and equity. (T/F)

Operating-efficiency ratios are important to a business. These include collection-period, debt period, and inventory turnover. (T/F)

Entrepreneurs use a(n) ________ to track assets and liabilities. a. income statement b. cash flow statement c. balance sheet d. profit and loss

The last line of an income statement shows a business's ________. a. gross profit or gross loss b. profit or loss c. net profit or net loss d. gross margin

Which of the following is not something that can be invested? a. energy b. time c. expertise d. money

A business's operating ratios are computed by ________. a. cost of goods sold/sales b. expense/sales c. income/sales d. income/profit

What must balance with assets on the balance sheet? a. liabilities and owner's equity b. net worth and owner's equity c. capital and owner's equity d. liabilities net profit

An income statement shows whether the difference between revenues (sales) and expenses (costs) is a profit or a ________. a. loss b. net profit c. breakeven d. semi-loss

Cash itself or items that could be quickly turned into cash or will be used within one year are called ________. a. liquid assets b. long-term assets c. current assets d. liquid cash

Liabilities that will be paid over a period of more than one year are ________. a. long-term assets b. long-term liabilities c. equity d. none of the above

You can create ________ from your income statement that will help you analyze your business further. a. financial ratios b. asset categories c. comparisons d. none of the above

Examining the ________ monthly can help determine what is doing well or poorly in a business. a. financial ratios b. operating ratios c. income statement d. all of the above

Growth of _______ is a good way to measure company success. a. owner's equity b. cash c. long-term debt d. sales