BUS 139 HY1 Spring 2022 VF

Question 1

The ability to enjoy one-on-one contact with customers has always been a competitive advantage for large firms
True or False

Answer 1

false

Question 2

Human resources management of small firms should be identical to large companies but adjust for size. true or false?

Answer 2

false

Question 3

Stacy was pleased when positive comments about her products appeared on a blog but became discouraged when other reviewers panned the same products. Stacy must remember:

Answer 3

business owners cannot absolutely control how their businesses are viewed by consumers

Question 4

Telephone calls and mail surveys are examples of

Answer 4

marketer-initiated contacts

Question 5

40. Entrepreneurs can get management assistance from peers through

a. outside consultants
b. SCORE advisors
c. Volunteer work in the community
d. Networking

Answer 5

d. Networking

Question 6

ESOPs can motivate employees as well as allow for owners to withdraw from a business without having to sell the firm to outsiders.
True or False

Answer 6

true

Question 7

if the cost of shipping the finished product is high, the factory should probably be located near a source of raw materials.
True or False

Answer 7

false

Question 8

Researchers typically achieve higher response rates from mail and telephone surveys than from personal interviews
True or False

Answer 8

False

Question 9

In considering its marketing strategy a new venture will typically concentrate on:

a. mass marketing
b. a multi-segmented market
c. a single-segment approach
d. the internet

Answer 9

a. mass marketing

Question 10

Personal selling is an effective method for promoting toothpaste.
True or False

Answer 10

false

Question 11

Regina is so satisfied with her pharmacist that she refers her friends and colleagues, providing a(n) __________ benefit of maintaining relationships with current customers.

Answer 11

economic

Question 12

Behavioral patterns and values that characterize a group of consumers in a target market are called

Answer 12

cultures

Question 13

A brick-and-mortar store is actually a general term that refers to a retail outlet dealing in building supplies.
True or False

Answer 13

false

Question 14

Score Refers to

Answer 14

A group of retired executives who act as consultants to small firms.

Question 15

Requesting a credit report to establish an applicant’s employment eligibility is illegal according to the Fair Credit Reporting Act
True or False

Answer 15

False

Question 16

Theodore has identified all the buyers in a market's submarkets and then totaled the estimated demand for all the submarkets. Theodore used the: 
A) breakdown process
B) buildup process 
C) chain-ratio method
D) bottom-up method

Answer 16

buildup process

Question 17

Which statement is true about location decisions?

a. Franchisers assist entrepreneurs with location decisions
b. Location decisions have a temporary effect on business operations
c. Location decisions should be made independently of consumer needs
d. The location decision is equally critical to all types of businesses

Answer 17

a. Franchisers assist entrepreneurs with location decisions

Question 18

For the best success, strategic alliance partners should sign contracts with stated expectations and an ¨easy out¨ clause. True or False

Answer 18

true

Question 19

Because B2B success stories generally receive more publicity than B2C ventures, the potential for B2C opportunities are overlooked.
A) True
B) False

Answer 19

B) False

Question 20

Which act applies to any employer of 15 or more people and prohibits discrimination on the basis of race, color, religion, sex, or national origin?
A. Fair Labor Standards Act
B. Civil Rights Act
C. Age Discrimination in Employment Act
D. Immigration Reform and Control Act

Answer 20

B. Civil Rights Act

Question 21

Partners must contribute capital or assets to form a partnership.
True or False

Answer 21

false

Question 22

What determines whether the sales forecasting process is direct or indirect?

Answer 22

The nature of the predicting variable

Question 23

Carla is a loan analyst at the bank. When Cameron applied for a loan, Carla looked at his balance sheet for ______ assets to evaluate a possible loan for his company’s financing.

a. direct and indirect
b. tangible and intangible
c. those founded upon past performances and those depending on future performance
d. industry-specific and firm-specific

Answer 23

b. Tangible and intangible

Question 24

Which organization type results in the business owner having unlimited liability?
A) sole proprietorship 
B) LLC
C) limited partnership
D) corporation

Answer 24

A) sole proprietorship

Question 25

Is the use of an employee stock ownership plan desirable in a small business/. What might lessen such a plan’s effectiveness in motivating employees?

Answer 25

Positives: employees can appreciate the connection between their personal effort and firm success
Negatives: if a firm is in survival mode, ESOP plan may be undesirable; there may be no relationship between individual employee effort and firm performance

Question 26

The harvesting process encompasses more than just selling and leaving a business.
True or False?

Answer 26

True

Question 27

Social networking is an informal communication method that can be controlled by the company through its website.
True or False

Answer 27

False

Question 28

Going public can be beneficial to a firm by helping it

a. create a liquid currency to fund future acquisitions
b. avoid becoming a takeover target in the future
c. erect a shield against the fluctuations of the stock market
d. offer better compensation packages to attract superior management talent

Answer 28

a. create a liquid currency to fund future acquisitions

Question 29

The basic factors that determine how a firm is financed are restricted to the firm’s past economic performance, the nature of its assets, and the personal preferences of the owner(s) with respect to the marketing mix.
True or False.

Answer 29

False

Question 30

while investors always think ahead about how to exit an enterprise, the entrepreneur should focus on daily operational strategies more than the exit strategy.
True or False

Answer 30

false

Question 31

Harlan’s customers have been a little slow in paying their invoices, and he is short on cash to pay his quarterly taxes.

a. sending the late payers to a collection agency
b. factoring
c. putting his late payers on credit hold until they pay up
d. taking out a personal loan to pay the taxes

Answer 31

b. factoring

Question 32

Pat, owner of Pat’s Welding, LLC, would like to let someone else run the day-to-day operations while he continues to draw an income from the business. Because the business is an LLC, Pat will not have to be concerned about:

Answer 32

Double taxation on his income.

Question 33

Using special-purpose equipment in the manufacturing process can result in

Answer 33

greater output per machine hour of operations

Question 34

Define inelastic demand. Give an example of a product for which there is inelastic demand.

Answer 34

inelastic demand is a term that is used to refer to a situation where the demand for an item remains the same, no matter how far its price rises or falls. An example would be gas and its prices

Question 35

Small firms frequently run into problems when:
A) they offer equipment as collateral for a term loan.
B) they under-utilized the equipment purchased with a loan.
C) they overestimate the cash inflows from the equipment purchased with the loan.
D) they fail to match a term loan’s payment terms with the expected cash inflows from the equipment purchased with the loan.

Answer 35

D) they fail to match a term loan’s payment terms with the expected cash inflows from the equipment purchased with the loan.

Question 36

Linda is considering several colleges at which to finish her culinary degree. She is in the _____ stage of the consumer decision-making progress.

Answer 36

Information search and evaluation

Question 37

Define internal rate of return

Answer 37

The internal rate of return is a metric used to estimate the probability of potential investments.

Question 38

What legal form has the smallest percentage of new business?
A) Sole proprietorship 
B) Partnership
C)  C corporation
D) S corporation

Answer 38

C) C corporation

Question 39

A transactional relationship is an association between a business and a customer that begins or ends a purchase or business exchange?
A) True
B) False

Answer 39

A) True

Question 40

Barry’s expectation that employees will complete his requests immediately is typical of ______ leaders.

a. populist
b. general
c. paragon
d. team builder

Answer 40

b. general

Question 41

Define elastic demand. Give an example of a product for which there is elastic demand.

Answer 41

Elastic demand occurs when consumers are responsive to price changes for a good or service. An example of a product that has elastic demand is clothing or housing.

Question 42

Individuals who are launching promising startups need to have a “tolerance for ambiguity”.
A) True
B) False

Answer 42

A) True

Question 43

The use of temporary employees provides management with an introduction to individuals whose performance may justify an offer of permanent employment.
True or False

Answer 43

True

Question 44

What does net present value measure?

Answer 44

Net present value measures the present value of cash flow at the rate of return of your project compared to your initial investment.

Question 45

Describe the four stages of the customer decision-making process.

Answer 45

Need recognition, when a customer realizes there might be a product that could improve their current lifestyle. Information search and evaluation, a customer compares brand and researches products to solve the problem they’ve found. Purchase decision, the customer comes to a final decision on the product they’re looking to buy based on a few different factors including budget and whatnot. Post purchase evaluation, when the customer evaluates how they like the product and the the experience they just paid for, and the company can still have an impact on this part if the customer is upset.

Question 46

Explain the basic ways to manage a business.

Answer 46

Risk control is to prevent, avoid, or reduce risk.

Risk financing involves transfering the risk or retaining risk within the firm.

Question 47

John, a car repair shop owner, is developing the warranty and repair policies for his business. What area of the marketing strategy is he addressing?

a. Promotional plan
b. Product and/or service plan
c. Distribution plan
d. Pricing plan

Answer 47

b. Product and/or service plan

Question 48

For the entrepreneur who is simply tired of the day-to-day operations of the business, slowly withdrawing cash flows over time may require too much patience.
true or false

Answer 48

True

Question 49

Why should an owner of a company plan for eventually harvesting his or her company?

Answer 49

• Preserve employee morale
• Preserve company performance
• Reduces turnover
• Promotes stable performance during transition
• Helps entrepreneur position company for optimal value
• Helps entrepreneur take advantage of opportunity for sale if one arises

Question 50

How do advisory boards differ from boards of directors? Which two would you recommend to a small company owner? Why?

Answer 50

Advisory Boards do not have legal liability to stockholders while Board of directors may be required to attract investment. Board of Directors would be more useful to a small corporation because Board of Directors are there to ensure that the interests of the owners and of the customers are being met.

Question 51

Explain the difference between a multi-segment strategy and a single-segment strategy. Which one is more likey to be a appealing to a small firm? Why?

Answer 51

A multi-segmentation strategy involves approaching two or more homogeneous market segments with a tailor-made strategy for each segment. The single-segmentation strategy targets one segment that the firm believes will be most profitable. The single-segmentation strategy usually allows small firms to use their limited resources more efficiently.

Question 52

List the four sociological influences on consumers that were discussed in this chapter. What is their relevance to consumers behavior?

Answer 52

​Psychological influences include needs, perceptions, moviations, and attitudes. Needs are what makes consumers what to buy a product to satisfy themselves. Perceptions are what makes the consumer find the characteristics in the product. Motivation is what makes the consumers want to buy the product, and motivation is fueled by unsatisfied needs. Attitudes can affect the consumers behaviors, and can encourage or discourage them to buy the product.

Question 53

Anna's new business looks like it can grow quickly and become profitable in its first year. Anna will likely find \_\_\_\_\_ possible sources of financing than those with less potential for growth and profits.
A) Fewer
B) About the same number of
C) More
D) Many more

Answer 53

D) Many more

Question 54

Effective time management requires
A) Firmly established priorities
B) Self-discipline
C) Using a good time management system
D) All of the above are required

Answer 54

D) All of the above are required

Question 55

How do the three most basic forms of organization differ in terms of management control by the owner and sharing of the firm’s profits?

Answer 55

Sole proprietorship is one person with overall management control, partnership is two business partners sharing the control, and c corporation the shareholders have control. With income taxes, sole proprietorship the individual gets taxed, partnership personal partners get taxed. c corp is taxed on business income.

Question 56

Explain the benefits and drawbacks an entrepreneur may find going public.

Answer 56

Benefits: offers liquidity, harvest benefits
Drawbacks: scrutiny of investors and bankers, shift in control of firm management to the investors

Question 57

A promotional mix is influenced by the
A) geography of the market, the promotional budget, and product characteristics.
B) geography of the market, retailer, and product characteristics
C) firms target customers, product characteristics, and budget requirements
D) firms target customers, market size, and product characteristics

Answer 57

A) geography of the market, the promotional budget, and product characteristics.

Question 58

There are no limits to the owner’s personal liability in a sole proprietorship.

Answer 58

True

Question 59

What is the difference between a penetration pricing strategy and a price lining strategy? Under what circumstances would each be used?

Answer 59

he penetration pricing strategy is when businesses offer lower prices initially in order to take away customers from competitors. The price lining strategy is when businesses price their products depending on their quality and value to the customers. The difference between the two is the way they price their products, with one being to use against competitors, and the other being used to lure in customers. The penetration pricing strategy is more defensive, while the other is more offensive. The penetration pricing strategy, for example, could be two different soda brands competing against each other. The price lining strategy, for example, could be used by car companies.

Question 60

Define omnichannel supply chains.

Answer 60

A direct-to-consumer (D2C) business model where all sales channels ranging from online, mobile, telephonic, mail order, self-service, and physical retail establishments are aligned, and fulfillment processes integrated to provide consumers with a seamless shopping experience in alignment with the company’s brand proposition.

Question 61

What types of variables are used for market segmentation? Would a small firm use the same variables as a large business? Why or why not?

Answer 61

Segmentation variables are used to identify particular dimensions of a market. The two basic types of segmentation variables are benefit variables and demographic variables. Since resources are limited and the products and services of a small firm are usually specialized, the use of segmentation variables is more important for small firms than for large businesses.