ch 15 and 16 assigment (for final) – Flashcards
Unlock all answers in this set
Unlock answersquestion
FALSE Some entrepreneurs find that maintaining their current levels is sufficient.
answer
all small firms want to grow. True or False?
question
TRUE While growth in sales is perceived as good for business, the owner needs to be prepared for possible changes in personnel demands, operations and management style.
answer
While growth in sales is perceived as good for business, the owner needs to be prepared for possible changes in personnel demands, operations and management style. True or False?
question
TRUE It is important that small firms gain a competitive advantage which cannot be quickly imitated.
answer
It is important that small firms gain a competitive advantage which cannot be quickly imitated. True or False?
question
FALSE The physical development stage involves developing a prototype. Financial considerations are completed in the business analysis stage of new product development.
answer
In the physical development stage of the product development process, new products are analyzed resulting in ideas failing to show possible profitability being discarded. True or False?
question
TRUE Product testing is the last step in the product development process.
answer
Product testing is the last step in the product development process. True or False?
question
TRUE Packaging is a significant tool for increasing the value of the total product by creating a distinctive impression.
answer
Packaging is a significant tool for increasing the value of the total product by creating a distinctive impression. True or False?
question
FALSE Labeling information should go beyond the specified minimum legal requirements. Warranties can be implied or explicit and are not part of labeling.
answer
Labeling information can be limited to the minimum legal requirements as the warranty will cover the information. True or False?
question
FALSE Strategies for the marketing of goods and services are not the same—they differ along a number of dimensions (e.g., tangibility, standardization, and perishability).
answer
Strategies for goods marketing and services marketing are essentially identical. True or False?
question
TRUE Trade dress describes those elements of a firm's distinctive operating image that are not specifically protected under a trademark, patent, or copyright.
answer
Trade dress describes those elements of a firm's distinctive operating image that are not specifically protected under a trademark, patent, or copyright. True or False?
question
TRUE To maintain the validity of a patent beyond its normal span of up to 20 years, companies must pay a maintenance fee every four years; otherwise, the patent number is to be removed from the product.
answer
To maintain the validity of a patent beyond its normal span of up to 20 years, companies must pay a maintenance fee every four years; otherwise, the patent number is to be removed from the product. True or False?
question
FALSE The activities involved in physically moving products are called physical distribution or logistics.
answer
Channel management is synonymous with the term logistics. True or False?
question
FALSE Distribution is essential for both tangible and intangible goods.
answer
Distribution is essential for tangible goods, but not for intangible goods. True or False?
question
FALSE Transportation is the main component of physical distribution—additional components include storage, materials handling, delivery terms, and inventory handling.
answer
Physical distribution of products includes only transportation. True or False?
question
FALSE Although fixed and variable costs do not behave in the same way, small businesses often treat them identically—this average pricing approach is thus a dangerous one.
answer
Average pricing is an appropriate pricing approach for small businesses because the method takes into consideration both fixed and variable costs. True or False?
question
FALSE Markup rates are added to a product's cost to cover expenses, price reductions and profit.
answer
Markup rates should be high enough to cover a product's cost, cover expenses, any price reductions, and profit. True or False?
question
FALSE Demand typically decreases as price increases, but this is not always the case.
answer
The demand for a product always decreases as its price increases in a break-even analysis. True or False?
question
FALSE Markups may be expressed as a percentage of either cost or the selling price of the product/service.
answer
Markups may be expressed as a percentage of either the firm's cost or the industry-standard cost. True or False?
question
FALSE Dynamic pricing sets prices higher after gauging a customer's financial means and desire for the product or service.
answer
Sellers using dynamic pricing set prices based on prices of market leaders. True or False?
question
TRUE Variable pricing strategy occurs where a business sets and advertises a fixed price but gives a discount for reasons such as the customer's amount purchased.
answer
Variable pricing strategy occurs where a business sets and advertises a fixed price but gives a discount for reasons such as the customer's amount purchased. True or False?
question
FALSE Break-even analysis may not be as accurate as it seems, so this should be viewed only as a tool for pricing and should not be used by itself to determine the final price. Market characteristics and the firm's current market strategy should be considered.
answer
Break-even analysis is an accurate tool for pricing because it points directly to the correct price for a given product. True or False?
question
FALSE It is a skimming price strategy that is most practical when there is little threat of short-term competition in the market or when startup costs must be recovered rapidly.
answer
A penetration price strategy is most practical when there is a low threat of short-term competition in the market or when startup costs must be recovered rapidly. True or False?
question
TRUE Pricing based on what the market will bear works only for non-standardized products in markets where there is low competition.
answer
Pricing based on what the market will bear works only for non-standardized products in markets where there is low competition. True or False?
question
FALSE Trade-credit agencies collect credit information on business firms, but not consumers.
answer
Trade-credit agencies collect credit information on business firms and consumers in a given area. True or False
question
TRUE The Consumer Credit Protection Act requires that the finance charge for credit be stated as an annual percentage rate and that creditors specify the procedures used for correcting billing mistakes.
answer
The Consumer Credit Protection Act requires that the finance charge for credit be stated as an annual percentage rate and that creditors specify the procedures used for correcting billing mistakes. True or False?
question
FALSE These are the primary purposes of the federal Consumer Credit Protection Act. The Equal Credit Opportunity Act ensures that all consumers are given an equal chance to obtain credit.
answer
The primary purposes of the Equal Credit Opportunity Act are to inform consumers about terms of a credit agreement and to require creditors to specify how finance charges are computed. True or False?
question
planned as growth causes company change.
answer
A small company's future growth should always be
question
The increase depends on the company planning before the increase.
answer
What increase in sales percentage will put pressure on a small company personnel and management style of the owners?
question
A high-growth firm's need for additional financing may exceed its available resources, even though the venture is profitable.
answer
Which statement is true about company growth?
question
cost
answer
The fact that Karen, owner of BareBabies,com could not take a vacation due to her business's triple in size displays a personal _______ to company growth.
question
According to Clayton Christensen, 93 % of all innovations that eventually became successful started out in the wrong direction.
answer
Which statement is correct concerning the role of innovation for small businesses?
question
implement previously developed plans for the hidden curves.
answer
When a company's competitive advantage moves into the decline stage, it should
question
adjust strategies for changing customer needs before rivals.
answer
High performing companies
question
before the current strategy has run its course.
answer
To maintain performance, a small business must launch a new competitive advantage
question
lowered financial risk.
answer
The listed outcomes below are all "fruits" of competitive advantage except
question
sustainable competitive advantage.
answer
Joe has redesigned an app that helps businesses organize their taxes after a rival gained market share. The IRS and the Society of Certified Public Accountants have said the app meets tax standards. The app would be considered a(n)
question
idea accumulation
answer
Which stage is the most critical for a product to make it to product testing?
question
competitor-owned patents.
answer
All of the following sources of new product ideas are within the framework of a formal product development process except
question
physical product development
answer
Products must be carefully analyzed in terms of financial considerations in the _____ stage of the product development process.
question
product testing.
answer
Key factors to consider when conducting the business analysis phase of the new product development process include all of the following except the
question
one to three years may pass before profits are realized.
answer
The business analysis stage of new product development is critical since
question
Growth
answer
The profit curve is the highest in which stage of the product life cycle?
question
brand.
answer
A verbal or symbolic means of identifying a product is referred to as a
question
that are relatively complex to repair.
answer
Warranties are important for products
question
Market reaction can be easy to predict about logos if the brand name is positive.
answer
Which statement is false concerning logos?
question
former practices.
answer
Effective evaluation of warranty policies should focus on all of the following except
question
Don't leave room for interpretation.
answer
Important rules of logo design include all of the following rules except?
question
increasing the quality of the total product.
answer
Explicit functions of packaging include all of the following except
question
brand
answer
iPad is a
question
brandmark
answer
Judy is opening a small business producing high-quality paper products and decided to place a green pine tree on all product boxes and on the sign outside the facilities, to symbolize the business. At this point, the symbol is an example of a
question
emphasizing diversification.
answer
A small firm can try to increase sales of an existing product by all of the following except
question
depth
answer
When a product line has more items, it is has greater
question
modified product/multiple markets
answer
Furniture Shine is introducing an improved version of its existing wax targeted to owners of antiques. The firm has decided to leave the original wax in the mix aimed towards residential owners. Furniture Shine is employing a _____ product strategy.
question
single product/multiple markets
answer
Bagels Bagels Bagels, a small breakfast bagel bakery, has expanded into sandwiches for lunch using bagels. They are now employing a _____ product strategy.
question
70 years
answer
A copyright provides protection for the duration of the creator's life, plus
question
as trade dress.
answer
The distinctive operating image of a product, including features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques, can be protected
question
the symbol ©.
answer
A copyright notice should include
question
common-law rights do not always justify trademark protection over a generic term.
answer
The United States Patent and Trade Office rejected Microsoft's 1990 effort to gain exclusive rights to the name Windows. This decision illustrates that
question
distribution.
answer
Both the physical movement of products and the establishment of intermediary relationships to guide and support the movement of the products are included in
question
logistics.
answer
The activities of physically moving a product is
question
pricing structures on the retail level
answer
Which function is not involved in supply chain management?
question
they perform the distribution function better than the product producer.
answer
Intermediaries exist because
question
Intermediaries are being used if the customers are widely dispersed.
answer
Recent developments in supply chain management include all of the following except
question
final assembly.
answer
The scope of physical distribution covers all of the following except
question
dual distribution.
answer
When a small firm operates with more than one channel of distribution, it is said to be using
question
an investment.
answer
Small businesses should view distribution costs as
question
wholesalers
answer
When the channel system uses ____, the storage function is transferred to the intermediary.
question
a dual distribution channel.
answer
Cooking for Collin, a small manufacturer of holiday cakes, sells its product through independent retailers and mail-order marketing. Cooking for Collin is relying on
question
private carrier.
answer
Equine Express, a small firm that transports horses both domestically and internationally, flies horses purchased on one of two company-owned planes. Equine Express operates as a
question
prestige pricing.
answer
A pricing tactic whereby a firm sets a high price to convey an image of high quality or uniqueness is known as
question
cost and a margin of profit.
answer
A business will not be successful unless it charges a price for its products that covers its total
question
prestige pricing while avoiding discounting worked best for the company
answer
Jeremy Hitchcock, CEO of Dyn, found that
question
overhead cost/cost of goods sold
answer
Active Feet, a small manufacturer of shoes, hired an additional vice-president and purchased a barrel of synthetic rubber used to make shoe soles. These two expenses should be considered a(n) ____ and a(n) ____, respectively.
question
elastic demand
answer
Hollywood Amusement, a small independent movie theater, decreased the price of admission from $10 to $9. Prior to the price decrease, the business sold 1,000 tickets each month. After the price decrease, it experienced ticket sales of 1,500 a month. If the change in sales is attributable only to the change in price, Hollywood Amusement faces ____ for its movie tickets.
question
break-even analysis
answer
When a small business owner systematically compares various cost and revenue estimates in order to determine the acceptability of alternative prices, ________ is being used.
question
contribution margin
answer
The difference between the unit selling price and the unit variable costs and expenses is known as the
question
costs and revenue
answer
Within the framework of a break-even analysis, an examination of ____ is conducted to determine the quantity at which the product, with an assumed price, will generate enough revenue to start earning a profit.
question
decreases, increases
answer
Demand for a product typically ______ as price ______.
question
$21
answer
The Golf Global Company sells 1,000 shirts annually at a price of $35 each. If the company's pricing policies adhere to a 40% markup of selling price, the cost of each shirt is
question
price lining
answer
What strategy prices products at a lower than normal, long-range market price to gain more rapid market share?
question
rapidly recover startup costs.
answer
All of the following reasons support implementing a penetration pricing strategy except to
question
Conducted properly, price determination is an exact science
answer
Which statement is not true with respect to pricing in a small business?
question
penetration pricing strategy
answer
Chocolate Concoctions, a maker of high end chocolate candies, decided to price its boxes of candies below the long-term market price. The decision was made to increase market share and discourage other firms from entering the chocolate market. Chocolate Concoctions was implementing a
question
skimming price strategy
answer
Troy Bourbon, a local bourbon distillery, initially sold its product at a premium price of $45 because the company believed consumers would view the bourbon as a prestige item. The company decided that when startup costs had been fully recovered and competition became imminent, the company would reduce the price to $30 which was more expected in the market. The distillery is using a
question
consumer credit.
answer
Credit granted by retailers to consumers who purchase for personal or family use is referred to as
question
Capacity
answer
Which "C" defines the customer's asset conservation?
question
sustaining long-term sales, even if these exceed the buying power of the customer.
answer
Benefits of credit to sellers include all of the following reasons except
question
increase
answer
Credit sales ____ the amount of working capital needed by the business doing the selling.
question
A down payment is normally required.
answer
Which statement is true with respect to installment accounts?
question
Charged purchases may not exceed the credit limit.
answer
Which statement is true with respect to revolving charge accounts?
question
A down payment will be required.
answer
Hillary wants to purchase a refrigerator on credit. If she uses an installment plan, what is most likely to occur?
question
collective establishment credit cards.
answer
The basic types of credit cards include all of the following types except
question
Installment accounts
answer
Which option is designed for long-term credit?
question
revolving charge accounts
answer
Handyman Hardware, a small community-based store, offers its consumers the option of using credit. Creditworthy individuals are able to use the "HH Credit Card" for all purchases up to a credit limit of $1,000. Consumers are required to pay at least 20 percent of their outstanding balance at the end of each month. A 2 percent finance charge is assessed on the unpaid balance at the end of each billing cycle. Handyman Hardware is employing ____ in its business.
question
$1,600
answer
A trade credit bill of $80,000 with terms of sale of 2/5, net 30 means the buyer saves ____ if the bill is paid within the discount period.
question
$0
answer
How much discount will a buyer receive if the buyer pays a trade credit bill of $60,000 with terms of sale of 2/5, net 30 on the net due date?
question
an open charge account
answer
Stone Creek Farm sells a special type of hay to horse owners. If the farm allows its customers to have hay delivered and then be billed at a later date, it would be using which type of account?.
question
require creditors to specify how finance charges are computed.
answer
A primary purpose of the federal Consumer Credit Protection Act is to
question
Credit bureaus
answer
Which organization is a good source of consumer credit information?
question
trade-credit agency.
answer
Information Express is a privately owned and operated organization that collects credit information on business firms. After the organization analyzes and evaluates the data, it makes credit ratings available to client companies for a fee. Information Express is a
question
It depends on the individual account.
answer
CarePair, a small business specializing in making and distributing hospital gowns to medical facilities, recent aging schedule showed an increase in medical facilities who are past due in payment. The facilities who are ____ days should be contacted first for payment.
