Deck 12: Small Business Marketing: Product

Question 1

The addition of a coffee bar in a campus bookstore would be considered a new product line for the bookstore.

Answer 1

True

Question 2

Product augmentations are additions made to create a unique product.

Answer 2

True

Question 3

Trends like increased global competition and quickly changing customer needs have shortened product life cycles and increased the need for new products.

Answer 3

True

Question 4

T F After a business owner selects a supplier, the next step is to pay the purchasing invoice.

Question 5

The four Ps of the marketing mix are product, price, promotion, and packaging.

Question 6

Advertising should be thought of as the last five seconds of marketing.

Question 7

A sustainable competitive advantage is based on a core competency that the firm does better than others.

Question 8

The most basic level of product satisfaction is the core benefit.

Question 9

All an inventor/entrepreneur needs is a good idea for a new product and companies will gladly pay huge amounts of money to produce it.

Question 10

Price is the only factor to consider when purchasing inventory.

Question 11

Under private label manufacturing a small business can produce a product for another company, like Craftsman under the Sears name.

Question 12

The expected product level of product satisfaction includes the set of attributes and conditions that consumers assume will be present.

Question 13

The ability to offer quality goods at competitive prices depends upon purchasing skills.

Question 14

About 25,000 totally new products are introduced to grocery stores each year.

Question 15

Under a licensing agreement, an inventor generally receives a royalty of about 50 percent of the sale of the product.

Question 16

The marketing mix consists of variables that can be controlled in bringing the product or service to the target market.

Question 17

The first step in the purchasing process is investigating suppliers.

Question 18

Vendor selection should be based upon habit, not systematic analysis.

Question 19

At the heart of the marketing mix is promotion.

Question 20

According to Booz, Allen, & Hamilton classifications, products that have never before been seen and result in entirely new markets are called product positioning.

Question 21

The loss of goods held in inventory due to theft or spoilage is known as holding costs.

Question 22

Managing inventory can be compared to a balancing act.

Question 23

The decision to purchase parts and components or to manufacture them is known as a make-or-buy decision.

Question 24

Time needed to receive inventory from suppliers is an important aspect in many small retail businesses.

Question 25

Expenses related to procuring inventory are referred to as ordering costs.

Question 26

A mutual dependence is created when using a single supplier.

Question 27

The more specialized the needs or the more design features that need to be hidden, the more the business should consider manufacturing its own parts.

Question 28

Shrinkage costs, such as warehouse expenses, are the costs associated with keeping extra goods on hand.

Question 29

Inventory needs for small manufacturers are virtually the same as for small retailers; they just buy different types of inventory.

Question 30

Decreased paperwork causes a significant savings when using a single supplier.

Question 31

Common inventory management techniques for service companies include just-in-time inventory control and materials requirement planning.

Question 32

The 80-20 principle may also be called the majority rule.

Question 33

The Pareto rule states that 80 percent of the firm's revenue will come from 20 percent of the firm's inventory.

Question 34

The number of units on hand at any given times is a common definition for the term "supply".

Question 35

Maintaining inventory has two aspects-the business does not want to run out of supplies or products for the customers, but inventory represents money sitting idly on a shelf.

Question 36

Multiple source suppliers cause increases in savings due to increased competition for contracts between the suppliers.

Question 37

The make-or-buy decision is limited to manufacturing operations or functions.

Question 38

From whom supplies are purchased is as important as what is purchased.

Question 39

The act of counting the goods held in stock is known as inventory.

Question 40

Obsolescence refers to products becoming outdated or out of fashion.

Question 41

The business arrangement in which the inventor of a product grants another business the right to manufacture it in exchange for royalties is called a _____ agreement.

A) Royal
B) Dubious
C) Licensing
D) Paradox

Question 42

According to the Chapter 12 opener, Kirk Hawkins and Steen Strand developed an aircraft that was designed specifically for what type of pilot?

A) Sport pilot
B) Private plane pilot
C) Passenger pilot
D) Shipping pilot

Question 43

Which of the following is not a level of product satisfaction?

A) Generic product
B) Core benefit
C) Provided product
D) Augmented product

Question 44

An inventory cycle lasts from the time the goods are ordered until goods are reordered the next time.

Question 45

A marketer's job is managing products through which of the following?

A) Production
B) Packaging
C) Distribution
D) The entire life cycle

Question 46

ABC classification is an inventory control system that classifies items based on the total dollar volume of sales each generates.

Question 47

In the Reality Check titled "The Fairness of Slotting Fees" what do businesses pay slotting fees for?

A) To get their products delivered via trucking companies
B) To get their products advertised via specific media
C) To get products produced
D) To get products on shelves of grocery stores

Question 48

The steel, plastic, and glass used to manufacture an automobile refers to which level of product satisfaction?

A) Core benefit
B) Generic product
C) Augmented product
D) Value-added product

Question 49

Lou's Luxury Vehicles only sells cars that have satellite-linked navigational systems built into the vehicles. This added feature can best be described as fulfilling which product satisfaction level?

A) Generic product
B) Expected product
C) Fabricated product
D) Augmented product

Question 50

In the Entrepreneurial Snapshot on "Marketing Kings of Furniture", the brothers build a wide base of loyal customers by marketing with _____.

A) Peanuts
B) Shoppertainment
C) Direct Mail
D) Product placement in movies

Question 51

A small business entering into a contractual agreement to manufacture a product under another company's name is called

A) Private label manufacturing
B) Private placement manufacturing
C) Selective placement manufacturing
D) Generic label manufacturing

Question 52

Products that result in entirely new markets are known as

A) New-to-the-world products
B) New product lines
C) Additions to existing product lines
D) Improvements to existing products

Question 53

The WD-40 Company holds an annual "Invent Your Own Use" contest. This contest illustrates that WD-40 falls into which product category?

A) Consumer recognition
B) New use for existing products
C) Market segmentation
D) Regression analysis

Question 54

The ___________ includes product, place, price, and promotion.

A) Operations concept
B) Production concept
C) Marketing mix
D) Financial mix

Question 55

There are __________ levels of product satisfaction.

A) Three
B) Four
C) Five
D) Six

Question 56

Manufacturing resource planning II coordinates inventory management with all other functions of business.

Question 57

Inventory, like cash flow, can make or break a business.

Question 58

Every business incurs both holding and ordering costs.

Question 59

Changing the perception that customers have of a product is called

A) Repositioning
B) Repackaging
C) Reneging
D) Reprising

Question 60

Product refers to

A) Tangible goods only
B) Tangible services only
C) Tangible goods, intangible services, or a combination of both
D) Intangible services only

Question 61

__________ is the most apparent cost of inventory.

A) Shrinkage
B) Ordering costs
C) Financing
D) Holding costs

Question 62

Tom Thornbury, CEO of Softub, created a vendor audit team made up of 10 employees. The team spent from __________ visiting and investigating potential suppliers.

A) One hour to one day
B) Two hours to two days
C) Three hours to three days
D) Four hours to four days

Question 63

__________ can benefit customers by making the product more identifiable and therefore easier to find on a crowded shelf.

A) Packaging
B) Pricing
C) Inventory control
D) Logistics

Question 64

Managing inventory can be compared to which of the following?

A) A balancing act
B) Preparing for a test
C) Driving a bus
D) Lion taming

Question 65

__________can add value to the product, make handling and storage more convenient, reduce spoilage or damage, and make the product more identifiable.

A) Refrigerated warehouses
B) Advertising
C) Augmentation
D) Packaging

Question 66

To be classified as a core competency, a factor should satisfy all of the following criteria except

A) Be applicable across a range of products
B) Be difficult for competitors to duplicate
C) Provide a fundamental value to customers
D) Be the low-cost option for customers

Question 67

Which of the following is not a guideline for evaluating small business purchasing and inventory control?

A) Take advantage of all purchase discounts.
B) Keep track of inventory holding costs.
C) Use maximum quantities or economic ordering quantities.
D) Keep track of optimum average inventory.

Question 68

Arco Industries has a lean management structure, and the company avoids major new investments whenever possible. Arco has adopted which best practice for achieving a product competitive advantage.

A) Leveraging existing capabilities
B) Adding new capabilities
C) Having low overhead
D) Maintaining high employee productivity

Question 69

In establishing a product competitive advantage, which best practice should be adopted by a company in order to spread risk?

A) Leverage existing capabilities
B) Diversify
C) Consolidate
D) Have a good workforce

Question 70

Stewart has owned his own office supply store for ten years. Over time, he has noticed that about one-fifth of his customers - mainly other businesses - make up about 80 percent of total business for the office supply store. This phenomenon is known as

A) The evoked set
B) The Inventory principle
C) The Pareto rule
D) Obsolescence

Question 71

When ordering inventory, all but which of the following should be watched closely?

A) Time of replacement
B) Holding costs
C) Ordering costs
D) Management costs

Question 72

The first step in the purchasing process is which of the following?

A) Investigate suppliers
B) Select suppliers
C) Place an order
D) Recognize the need

Question 73

The Pareto rule establishes that __________ of the revenue will come from __________ of the inventory.

A) 20 percent, 80 percent
B) 40 percent, 60 percent
C) 60 percent, 40 percent
D) 80 percent, 20 percent

Question 74

Factors that should be considered when evaluating vendors should include all but which of the following?

A) Product quality
B) Location
C) Credit terms
D) Employee quality

Question 75

The final step in the purchasing process is

A) Completing an order
B) Selecting suppliers
C) Placing an order
D) Inspecting an order

Question 76

In the Reality Check "Money on the Shelf" Todd Heim, owner of FutureCure, installed a state-of-the-art financial system to better track and control inventory. This system cut inventory costs by what percentage?

A) 25 percent
B) 50 percent
C) 75 percent
D) 100 percent

Question 77

Softub created a __________ in order to keep track of everything the audit team needed to consider in its evaluation.

A) Video
B) Policy handbook
C) Checklist
D) Shorthand system

Question 78

The make-or-buy decision largely rests on the availability and quality of

A) Competitors
B) Suppliers
C) Customers
D) Employees

Question 79

More and more businesses are working toward building

A) A better mousetrap
B) Long-term relationships with fewer suppliers
C) Short-term relationships with more suppliers
D) A system of virtual inventory

Question 80

The advantage of using multiple suppliers is that

A) The business can pick and choose among needed supplies to get the best
B) The competition between the suppliers decreases prices
C) The amount of paperwork is decreased
D) The suppliers will monopolize the supply, increasing the price