Chapter 4

Question 1

Niche Market

Answer 1

A small segment of a large market ignored by other companies

Question 2

Target Marget

Answer 2

A particular group of consumers at which a product or service is aimed.

Question 3

Strategic Market Segmentation

Answer 3

A marketing strategy involves dividing a broad target market into subsets and then designing and implementing strategies to target them.

Question 4

One-to-one Marketing

Answer 4

Learning the profile or details about individual customers to identify which are most valuable to the company. By doing so, the value for the customer can be increased

Question 5

Customer life-time value

Answer 5

Knowing what a customer is likely to spend over time will help the entrepreneur decide what customers are most desirable and how much to invest in keeping them.

Question 6

Just-in-time marketing

Answer 6

Know the purchasing cycle for the product or service, and measure it in months or years. Time the company’s entry into the market to the customer’s purchasing cycle.

Question 7

Demographic segmentation

Answer 7

This methods divides the market into groups based on age, income level, and gender.

Question 8

Business demographics

Answer 8

Government statistics tend to divide businesses by size (in sales or # of employees) and type of industry.

Question 9

Psychographic segmentation

Answer 9

Divides customers into cultural groups, value groups, social sets, or other interesting categories that might be useful for classifying customers

Question 10

Competitive analysis

Answer 10

a critical part of your company marketing plan. With this evaluation, you can establish what makes your product or service unique–and therefore what attributes you play up in order to attract your target market.

Question 11

Positioning

Answer 11

The process of establishing and maintaining a distinctive place in the market for the start-up and/or its products offering

Question 12

Fixed Cost

Answer 12

The overhead for the start-up; the economic cost of running the business even if no products or service are sold (rent, insurance, taxes, salaries, etc.)

Question 13

Variable Cost

Answer 13

The economic cost associated with service for an additional customer (serving an extra hotel guest, making an additional teller transaction at the bank, etc.)

Question 14

Semivariable cost

Answer 14

In between fixed and variable cost, represent expenses that could rise or fall in step wise fashion as the business volume increases or decreases (hiring a part-time employee to work on busy weekends, etc.)

Question 15

Contribution

Answer 15

Difference between variable cost of selling an extra unit of service and the money received from the buyer of that service (tip)

Question 16

Revenue Oriented

Answer 16

The aim is to maximize the surplus of income over expenditures

Question 17

Operations Oriented

Answer 17

Typically, capacity-constrained organizations seek to match supply and demand to ensure optimal use of their productive capacity at any given time (hotels)

Question 18

Patronage Oriented

Answer 18

The aim is to attract customers, even at a loss, typical of grand-opening sales.

Question 19

Direct Salesforce

Answer 19

A group of salespeople who work directly for thr company and are paid either straight salary, salary plus bonus, or straight commission.

Question 20

Sales Agent

Answer 20

Works as a subcontractor to sell products or services. Usually work off of commission

Question 21

Trade Shows

Answer 21

Places to sell and exhibit products

Question 22

Viral Marketing

Answer 22

A term used to describe mechanisms by which customers are triggered and motivated to recommend a product or service to other potential customers.