Deck 4: What Entrepreneurs Need to Know Before They Start: Acquiring and Interpreting Information About Markets Competitors and Government

Question 1

Industry analysis refers to searching out,and understanding,information about whether,and how,a new firm might fit into an existing industry.

Answer 1

True

Question 2

Many aspects of an industry determine how much success a new venture will have. Which of the following traits would make an industry unattractive for an entrepreneur to enter?

A) An industry that is experiencing rapid growth.
B) An industry in which most innovations come from small companies.
C) An industry that is advertising intensive.
D) An industry that is early it its life cycle.
E) All of the above are favorable characteristics.

Answer 2

C

Question 3

A repertory grid can be used to help understand how members of a focus group perceive and evaluate a product.

Answer 3

True

Question 4

In gathering information about a certain market,an entrepreneur gets data from the last census in the United States. This type of data is called primary data.

Question 5

Many new ventures chose to make their company a Subchapter S corporation,but then,if they grow and prosper,switch to regular status.

Question 6

To eligible for the HubSone program,a small business must be located in a historically underutilized business zone,be wholly owned and controlled by U.S.citizens,and draw at least 85 percent of its employees from a HubZone.

Question 7

Secondary data is also known as indirect data.

Question 8

In market research,a perceptual map refers to a way to identify the important things in a product that customers perceive and evaluate.

Question 9

Feasibility analysis helps to answer the question,"Is this idea really viable?"

Question 10

The best way to gather information about whether or not potential customers will buy a new product is to ask them.

Question 11

The first-mover advantage always results in financial success for the business that achieves it.

Question 12

People in a group are making a decision as a group. The members do not want to bring up information that they think is critical of the decision being discussed. This is known as groupthink.

Question 13

Market research frequently can give an entrepreneur very precise information about customers and what they want.

Question 14

Smart entrepreneurs will always be able to anticipate which new products or services will be adopted by customers.

Question 15

Focus groups are made up of at least 50 people who are similar to potential customers and who meet for one to two hours to describe their perceptions of and reactions to relevant products.

Question 16

Before launching a new company,entrepreneurs need to gather basic information that will let them know

A) if their new venture is really feasible.
B) what specific form their new products and services should take.
C) how these products and services can be effectively marketed.
D) A and B only.
E) A, B, and C.

Question 17

Entrepreneurs have had a growing voice in shaping government policy mainly because their contribution to the strength of the economy has been increasingly recognized.

Question 18

Entrepreneurs may seek ways of reducing tax rates by converting capital gains into profits.

Question 19

Research findings show that decisions made by groups are safer and more accurate than decisions made by individuals.

Question 20

The higher the marginal tax rate in the United States,the lower the rate of self-employment.

Question 21

The government designed a program to help minority-owned businesses enter the economic mainstream. It seeks to accomplish this goal by encouraging federal agencies to award a certain percentage of their contracts to what are known as small,disadvantaged businesses. This program is called the

A) Small Business Innovation Program.
B) Business Development Program.
C) Small Business Regulatory Enforcement Fairness Act.
D) OSHA.
E) ADA.

Question 22

Which of the following statements is true about marketing a new product?

A) A company needs to gather information from customers before it gets to the stage of marketing a new product.
B) A company needs to gather information from customers when it gets to the stage of marketing a new product. Collecting it early is inefficient.
C) After the company gets to the stage of marketing a new product, it needs to gather information from potential customers.
D) A company does not need to gather information from customers regarding the marketing of its new product.
E) None of the above statements are true.

Question 23

There are several techniques for obtaining useful marketing information,including

A) customer surveys.
B) perceptual mapping.
C) focus groups.
D) A and C.
E) A, B, and C.

Question 24

In which type of corporation do profits and losses flow through to the shareholders,and they pay any taxes due as individuals,according to their own tax bracket?

A) Subchapter S corporation.
B) Subchapter XY corporation.
C) Regular C corporation.
D) Standardized S corporation.
E) Monitored K corporation.

Question 25

Data that researchers do not collect themselves,but which can still be very useful,is called

A) primary data.
B) secondary data.
C) demographic data.
D) non-priority data.
E) assisting data.

Question 26

Which of the following should an entrepreneur consider before starting a business?

A) Marketing information.
B) Information regarding government regulations.
C) Information regarding various laws that strongly affect all businesses.
D) None of the above are crucial to consider before starting a business.
E) A, B, and C are crucial to consider.

Question 27

The degree to which one political actor coordinates the economic,political,and social activity in a society is called

A) centralization.
B) internal relativity.
C) external relativity.
D) the governmental mix.
E) none of the above.

Question 28

The basic goal of focus groups is to identify the key dimensions along which focus group members perceive and evaluate various products and the best way to reach this objective is through a procedure called

A) mental mapping.
B) repertory grid.
C) consumer preferencing.
D) perceptual identification.
E) None of the above.

Question 29

Special considerations are given to individuals who are considered to be part of a socially and economically disadvantaged group. Persons that are NOT considered a part of a disadvantaged group are

A) African-Americans.
B) Hispanic Americans.
C) Native Americans.
D) Subcontinent-Asian Americans.
E) All of the above ARE considered part of a disadvantaged group.

Question 30

In which type of corporation do profits and losses remain in the company,and the corporation pays taxes on any declared profits?

A) Subchapter S corporation.
B) Subchapter XY corporation.
C) Regular C corporation.
D) Standardized S corporation.
E) Monitored K corporation.

Question 31

Cognitive science indicates that we are all subject to a strong

A) bargaining desire.
B) consumer bias.
C) perceptual mapping.
D) confirmation bias.
E) bargaining bias.

Question 32

Government taxation policies influence the decisions of individual entrepreneurs to found new ventures

A) and often end up inhibiting technological processes.
B) but do not in and of themselves inhibit technological progress.
C) and if the taxes rise too high, entrepreneurs have no way of reducing them.
D) A and C only.
E) none of the above.

Question 33

A type of diagram of potential customers' perceptions,like a map revealing the key dimensions along which they perceive products and evaluate them,is called

A) customer mapping.
B) perceptual mapping.
C) focus group mapping
D) potential mapping.
E) profit mapping.

Question 34

An aspect of the tax code that allows businesses to deduct from earnings a portion of the cost of the equipment on a yearly basis for a set period of time is called

A) tax credit.
B) depreciation.
C) an adverse impact.
D) developmental relief.
E) none of the above.

Question 35

Information on how potential customers will evaluate and react to the products or services entrepreneurs provide,and who these potential customers really are is called

A) consumer prototype.
B) retailers information.
C) marketing information.
D) the entrepreneur's guide.
E) the consumer's guide.

Question 36

Market information is

A) an essential.
B) a luxury.
C) overused.
D) all of the above.
E) B and C.

Question 37

Marketing research is

A) more creativity than logic.
B) more logic than creativity.
C) more art than science.
D) more science than art.
E) B and D.

Question 38

Which of the following will guarantee success?

A) Excellent marketing information.
B) Strong demographic data.
C) Undisputed secondary data.
D) An equal combination of A and C.
E) None of the above.

Question 39

Federal and state governments often offer tax incentives to companies for which,if any,of the following reasons?

A) Locating in certain geographic regions.
B) choosing to renovate and improve older buildings that have been designated as having historical significance.
C) For research and development activities that are directed towards discovering information that is "technological in nature.
D) A, B, and C.
E) None of the above.

Question 40

Policies and regulations that governments adopt strongly affect the fortunes of new ventures. These policies and regulations

A) are almost always ignored by entrepreneurs.
B) make it easier to run new ventures.
C) make it harder to run new ventures.
D) both B and C.
E) A, B, and C.

Question 41

The process which helps an entrepreneur answer the question,"Is this idea for a new business really viable?" is called

A) service analysis.
B) pet fountain analysis.
C) prototype analysis.
D) feasibility analysis.
E) concept analysis.

Question 42

A tool,or process,used to help understand how a customers sees and evaluates a product is known as

A) financial concept.
B) prototype.
C) tax rate code.
D) regulation grid.
E) perceptual map.

Question 43

Say that you have an idea for a new product. Before you start a business to produce it,you want to see if people might actually buy it. You build a prototype of the product and show it to people. By doing this,you are conducting a

A) first-mover test.
B) advantage test.
C) competitor analysis.
D) financial analysis.
E) concept test.

Question 44

A person wants to start a business to capitalize on an idea she has. She begins to gather information about possible customers,existing competitors,government regulations,etc.because she wants to see if her idea for a business makes sense. This is known as

A) feasibility analysis.
B) government analysis.
C) focus group analysis.
D) confirmation bias.
E) moderate analysis.

Question 45

Which of the following would be a factor that can badly distort the interpretation of information?

A) The tendency to accept early favorites.
B) Group polarization.
C) Group think.
D) Tendency to ignore unshared information.
E) All of the above

Question 46

An entrepreneur developed a service for which he believed there was a fairly small,but clearly defined,group of potential customers. He believed that he could design the service to fit those customers very well. This type of customer group is called a

A) first-mover market.
B) niche market.
C) financial market.
D) focus group market.
E) common sense market.

Question 47

When making a decision in a group,sometimes the members of the group will shift toward views that are more extreme than the ones with which they began. This is known as

A) devil's advocate technique.
B) perceptual mapping.
C) secondary data.
D) indirect approach.
E) group polarization.

Question 48

Assume that you are part of a student group that must write a paper for a class. The first part of the project is to state a conclusion about a situation. Several group members have done that,and they have stated their conclusion strongly. You believe just as strongly that the conclusion is in error. However,since most of the other group members have stated their conclusion strongly,you don't want to risk "tearing the group apart." Also,you are now starting to question if you might be "wrong." (In reality,the conclusion stated by the group is in error.) This situation demonstrates

A) the use of a focus group.
B) groupthink.
C) group polarization.
D) devil's advocate technique.
E) confirmation candidates.

Question 49

Which of the following questions could be asked by a potential employer without violating government regulations and laws protecting employees from discrimination?

A) Are you married or single?
B) How would you describe your general physical health?
C) Do you have any religious beliefs that would keep you from working on weekends?
D) Do you have any medical conditions that might interfere with your doing this job?
E) All of the above questions are in violation.

Question 50

List and describe four factors that can badly distort the interpretation of information when making decisions in a group.

Question 51

A group is discussing options so that it can make a decision. One group member has been assigned the role of questioning each option;that is to raise questions about everything that is suggested. This situation demonstrates the use of

A) groupthink.
B) confirmation bias.
C) perceptual mapping.
D) repertory grid analysis.
E) devil's advocate.

Question 52

If someone lodges a complaint against a company with the Equal Employment Opportunity Commission,the burden of proof

A) lies equally with the employer and employee.
B) falls largely on the employer.
C) falls largely of the employee.
D) is often hard to recognize.
E) none of the above.

Question 53

Usually new ventures that directly target a specific market or specific geographic area are more successful than ones that do not focus their efforts and products in this way. Explain why that tends to be true.

Question 54

Discuss several government organizations designed to assist entrepreneurs. What is the goal of each?.

Question 55

In the past,airlines in the United States tended to hire only women,and only if they fit within a range of height and weight. These requirements tended to rule out men and women who did not fit the height and weight limits. Therefore,these hiring requirements resulted in

A) OSHA.
B) adverse impact.
C) American with Disabilities Act.
D) marginal tax rate.
E) lower unemployment rate.

Question 56

Explain the "discovery test."

Question 57

The goal of the HubZone program is to

A) pump new life into economically disadvantaged areas.
B) provide a safe and healthy work environment.
C) help minority-owned businesses enter the economic mainstream.
D) prohibit discrimination against persons with disabilities.
E) Both C and D

Question 58

I am thinking about starting a new business to sell a product that I have developed. Part of what I am thinking about is how the potential customers will use the product. However,since I am quite familiar with the needs that this product will satisfy,I believe that the potential customers will use it the same way that I do. This form of thinking represents the (a)

A) first-mover advantage.
B) confirmation bias.
C) focus group analysis.
D) financial concept.
E) customer survey.

Question 59

Why is it important for entrepreneurs to gather marketing information before starting a new venture and what are some ways of gathering information?