Deck 11: Small Business Distribution and Location

Question 1

The primary areas for conflict resolution in exporting include nonpayment and contract default issues.

Answer 1

True

Question 2

It is good to opt for distributors when a whole line of products need to be bought or warehoused.

Answer 2

True

Question 3

Guerilla marketing is a form of communication that encourages the customer to act immediately,such as coupons,sales,or contests.

Answer 3

False

Question 4

Small firms are at an advantage when competing on price.

Question 5

Something that is essential to how you live and does not have many substitutes or alternatives is called an elastic product.

Question 6

Exporting is usually expensive,difficult to start,and more risky than licensing,franchising,or joint ventures.

Question 7

Distributors and wholesalers prefer taking on start-up products as there are no setup charges involved.

Question 8

Setting up a short-term lease initially is one of the ways to handle an early termination of business.

Question 9

Access for employees and reasonable cost are critical for businesses with low customer contact.

Question 10

A process layout includes all the ambiance items that might be considered in your business such as wider aisles,deep carpeting,soft music,and indirect lighting.

Question 11

Giveaways,samples,and tastings are all examples of introductory techniques used in sales promotion.

Question 12

E-tailers have high overhead and limited shelf space.

Question 13

Skimming,odd-even pricing,and price lining are three possible pricing strategies available to small businesses.

Question 14

Leasing is an option with a considerably lower initial cash outlay and is often the only feasible choice for new businesses.

Question 15

A direct mail approach needs major inventory investment.

Question 16

The value delivered to the customer is second in order of importance to the pricing decision.

Question 17

Radio advertisements provide both geographic and demographic segmentation of a product or service.

Question 18

Traditionally,manufacturing processes are laid out in one of the two formats: grid layout and free-form layout.

Question 19

Face-to-face meetings with the client are infrequent if the services are provided at the client's location.

Question 20

When pricing your product,the optimum price is the highest price that will produce your desired level of sales in your intended market.

Question 21

Which of the following forms of direct response advertising attracts a large audience and is a good way to demonstrate a product?

A) Television
B) Radio
C) Magazine
D) Billboard

Question 22

Which of the following statements is true of catalogs?

A) Catalogs do not target particular types of consumers.
B) Creating and disseminating catalogs online increases company costs.
C) Most part-time entrepreneurs typically use existing catalogs for their products.
D) Catalogs do not focus on any particular types of products.

Question 23

A(n)_____ refers to a set of goods or services that consists of only one or a few items.

A) in-process inventory
B) macro inventory
C) just-in-time inventory
D) micro inventory

Question 24

Wholesalers and retailers who connect manufacturers to consumers are referred to as _____.

A) traffic generators
B) manufacturing agents
C) distribution channels
D) business franchisors

Question 25

Which of the following direct sales methods is effective for products that need demonstrations or detailed explanations?

A) Industrial sales
B) Door-to-door sales
C) Vending machines
D) Flea market

Question 26

Value benefits come into play when you think about pricing your product.Which of the following statements is not true of value benefits?

A) People will pay more for a product of high quality.
B) The value delivered to the customer is second in order of importance to the pricing decision.
C) Small business are unable to compete on value.
D) The price customers are willing to pay is determined by their perception of value received.

Question 27

When finally setting the actual price of your product or service,there are several contextual factors including your company objectives,your marketing strategy,competition,channels of distribution,and legal and regulatory issues to consider.Which of the following statements is not true when considering these factors?

A) The customer's end price is usually higher than your price due to price escalation.
B) Pricing off a competitor's price is as easy as picking a percent,say 80%,and charging that price for your product or service.
C) Some forms of price discrimination are illegal.
D) Firms that compete on price may experience negative growth.

Question 28

While teaching strategy at Farrell University,Jessica developed an interactive strategy-simulation game to help her students understand its concepts.She found that they were able to grasp the concept much better from the game rather than from reading books.For two years,Jessica used the game to teach students.Eventually she removed possible glitches and perfected the game.She wanted students at other universities to benefit from the simulation.The result was the launch of Simulate Strategy,Inc.Given that Jessica has a very limited budget,which of the following forms of direct mail will be most appropriate for her to adopt?

A) Brochure
B) Direct response advertising
C) E-mail
D) Telemarketing

Question 29

Setting the price for an item relatively low and then charging much higher prices for the expendables it uses is called ________.

A) price lining
B) premium pricing
C) price skimming
D) captive pricing

Question 30

Which of the following forms of direct marketing is the most expensive?

A) Direct sales
B) Telemarketing
C) Direct mail
D) Guerilla marketing

Question 31

Which of the following statements is true of price elasticity?

A) Elastic products have few substitutes and price changes make little difference in demand.
B) Inelastic products have many substitutes and price changes lower demand.
C) Elasticity is the idea that the market's demand for a product or service is sensitive to changes in its price.
D) Gas for your car is an example of an elastic product.

Question 32

Which of the following statements is true of pricing strategy?

A) Small businesses should have smaller prices too.
B) Most consumers decide on a product using price as the number one factor.
C) An entrepreneur's first goal in pricing is to set the price as high as they think they can.
D) Avoid sale prices as they lead to price wars.

Question 33

_____ refers to a method of selling in which catalogs,brochures,letters,videos,and other pieces of marketing materials are shipped straight to customers from which they can mail,call,or e-mail an order.

A) Guerilla marketing
B) Direct sales
C) Contract manufacturing
D) Direct mail

Question 34

In _____,an advertisement is placed in a magazine,newspaper,radio,billboard,or television and includes an order blank with a phone number,e-mail,or snail-mail address with the intent of having customers place immediate orders.

A) telemarketing
B) direct response advertising
C) guerilla marketing
D) direct selling

Question 35

A(n)_____ refers to the practice of purchasing and accepting delivery of inventory only after it has been sold to the final customer.

A) just-in-time inventory
B) macro inventory
C) micro inventory
D) in-process inventory

Question 36

Door-to-door sales and party sales are examples of _____.

A) direct sales
B) telemarketing
C) direct response advertising
D) contract manufacturing

Question 37

Which of the following statements is true of a direct mail approach?

A) It is a challenge to find the right market using this method.
B) It involves major inventory investments.
C) It is seen by most customers as a form of home invasion.
D) It does not need adequate preparation before selling a product.

Question 38

________ is probably the most widely used of the many pricing methods available.

A) Prestige pricing
B) Skimming
C) Partitioned pricing
D) Markup pricing

Question 39

Which of the following is not one of the four key factors considered when determining an optimum price?

A) Value delivered to the customer
B) Supply chain costs
C) Your business strategy and product placement
D) Prices set my competing firms

Question 40

Putting two or more of the same or different products or services together and selling for a price somewhat under the products' individual prices is _________.

A) partitioned pricing
B) product line pricing
C) bundling
D) prestige pricing

Question 41

________ is setting a price at the highest level the market will bear,usually because there is no competition at the time.

A) Premium pricing
B) Skimming
C) Odd-even pricing
D) Partitioned pricing

Question 42

A(n)_____ refers to a middleman business which represents a manufacturer's products or services to other business-to-business middleman firms.

A) retailer
B) wholesaler
C) manufacturer
D) agent

Question 43

Neil places an advertisement for his pastry shop,Neil's Pastries,in the local newspaper.He includes his phone number,website,e-mail address,and postal address in the advertisement so that prospective customers have the option to contact him in the way they feel most comfortable.Neil is a _____.

A) guerilla marketer
B) multichannel marketer
C) telemarketer
D) direct seller

Question 44

A _____ will warehouse products,pack and ship them,and send an automated e-mail to customers to let them know that the product is on its way.

A) contract manufacturer
B) traffic generator
C) sheltered workshop
D) fulfillment center

Question 45

_____ uses agents,export management companies,or export trading companies as intermediaries to handle most of the exporting process.

A) Indirect exporting
B) Freight forwarding
C) Contract manufacturing
D) Direct exporting

Question 46

A(n)_____ is a middleman business which sells to consumers or end-users of a product,typically in single or small quantities.

A) manufacturer
B) agent
C) wholesaler
D) retailer

Question 47

Which of the following international strategies is usually inexpensive,quick to start,easy to change,and less risky than the others?

A) Exporting
B) Joint venture
C) Franchising
D) Licensing

Question 48

In _____,products are sold to foreign buyers or distributors without any intermediaries.

A) indirect exporting
B) freight forwarding
C) contract manufacturing
D) direct exporting

Question 49

_____ uses creative and relatively inexpensive ways such as door-knob hangers,T-shirts,balloons,flyers under windshield wipers to reach customers.

A) Direct mail
B) Guerilla marketing
C) Telemarketing
D) Direct sales

Question 50

Wholesalers,retailers,distributors,agents are commonly referred to as ______.

A) freight forwarders
B) intermediaries
C) born internationals
D) traffic generators

Question 51

________ is a form of communication that encourages the customer to act immediately,such as coupons,sales,or contests.

A) Price lining
B) Traffic generators
C) Sales promotion
D) Price gouging

Question 52

Which of the following statements is true of nondirect distribution?

A) A product's final price is more than the manufacturing cost if intermediaries are involved.
B) An agent sells products to consumers or end-users,typically in small quantities.
C) Distributors and wholesalers tend to take on start-up products due to zero setup charges.
D) A retailer represents a manufacturer's product to other business-to-business middleman firms.

Question 53

Which of the following forms of direct response advertising allows very specific targeting and is appropriate for business-to-business selling?

A) Television
B) Radio
C) Magazine
D) Billboard

Question 54

A(n)_____ is a middleman business which buys and sells to businesses rather than consumers.

A) manufacturer
B) agent
C) wholesaler
D) retailer

Question 55

_____ advertisements provide both geographic and demographic segmentation with a highly distracted audience.

A) Television
B) Radio
C) Magazine
D) Newspaper

Question 56

_______ is an estimation of what a price should be based on information a consumer gathered,such as advice,advertisements,or comparison shopping.

A) An external reference price
B) Perception of value
C) An internal reference price
D) Optimum price

Question 57

Which of the following has low overhead and unlimited shelf space and thereby can afford to take on an unknown firm or product?

A) An e-tailer
B) A wholesaler
C) A retailer
D) An agent

Question 58

While teaching strategy at Farrell University,Jessica developed an interactive strategy-simulation game to inculcate the concept of strategy to her students.She found that they were able to grasp the concept much better from the game rather than from reading books.For two years Jessica used the game to teach students.Eventually she removed possible glitches and perfected the game.She wanted students at other universities to benefit from the simulation.The result was the launch of Simulate Strategy,Inc.Jessica places an advertisement about her product with her e-mail and contact information in the "Chronicle of Higher Education," a leading publication for University professors.Which of the following marketing strategies exemplifies this scenario?

A) Guerilla marketing
B) Telemarketing
C) Direct sales
D) Direct response advertising

Question 59

While teaching strategy at Farrell University,Jessica developed an interactive strategy-simulation game to inculcate the concept of strategy to her students.She found that they were able to grasp the concept much better from the game rather than from reading books.For two years Jessica used the game to teach students.Eventually she removed possible glitches and perfected the game.She wanted students at other universities to benefit from the simulation.The result was the launch of Simulate Strategy,Inc.Some of Jessica's students suggested that she create a website for Simulate Strategy,Inc.Her company is fairly new and opening a website immediately would expose her company to customers from around the world.In this scenario,Simulate Strategy is an example of a _____.

A) freight forwarder
B) born international
C) sheltered workshop
D) contract manufacturer

Question 60

Giveaways,samples,and tastings are examples of ________ techniques used in sales promotion.

A) contest
B) loyalty
C) introductory
D) discounting

Question 61

Which of the following is true of business locations?

A) Target market customers are essential factors for selecting business locations.
B) Most entrepreneurs prefer their business locations to be outside their hometown.
C) The cost of moving a company across town or across the country is cheap.
D) Proximity of competitors does not affect choice of business locations.

Question 62

_____ businesses have diverse operations and three critical site selection considerations: traffic,customer ease,and competition.

A) Home-based
B) Low customer contact
C) E-tailer
D) High customer contact

Question 63

Pest control,lawn services,and carpet cleaning are examples of services at a _____.

A) client's location
B) competitor's location
C) remote location
D) mutually accessible location

Question 64

_____ are specialists in export-related activities including tariff schedules,shipping,insurance,packing,transportation arrangements,customs clearing,and other export details.

A) Born internationals
B) Freight forwarders
C) Contract manufacturers
D) Traffic generators

Question 65

Which of the following is true of payment procedures?

A) A letter of credit can be exercised only with specified shipping documents.
B) Providing credit to customers is a risk to the customers.
C) Up-front cash payment is a risk to the customers.
D) A documentary draft involves only two parties-the company and the customer.

Question 66

Which of the following statements is always true of sales promotions?

A) Sales promotion is one of the major forms for marketing.
B) Sales promotions are expensive and difficult to manage.
C) Sales promotions are not covered under local or state laws.
D) Sales promotions show up in the "Get Customers" portion of the customer development funnel.

Question 67

A _____ is a document issued by a bank that guarantees a buyer's payment for a specified period of time upon compliance with specified terms.

A) documentary draft
B) letter of credit
C) mail order
D) bill of lading

Question 68

Which of the following statements is true of low customer contact businesses?

A) Customer access is relatively important when compared to high customer contact businesses.
B) Some examples of low customer contact businesses are restaurants and dry cleaners.
C) Empowerment zones offer businesses low-cost space and tax advantages.
D) Business incubators are expensive and offer limited small business support services.

Question 69

Sales promotion techniques used to introduce your brand to customers without an immediate call to purchase are _____________ techniques.

A) loyalty
B) discounting
C) contest
D) introductory

Question 70

Which of the following businesses requires a stake in the company and is good for brainstorming with other entrepreneurs?

A) Empowerment zone
B) Manufacturing business
C) Remote location service
D) Business incubator

Question 71

Identify the type of service location in which face-to-face meetings with clients are infrequent.

A) Mutually accessible location
B) Remote location
C) The client's location
D) The competitor's location

Question 72

Which of the following is an example of a high customer contact business?

A) Manufacturing businesses
B) Legal offices
C) Business incubators
D) Remote location services

Question 73

Which of the following statements is true of exporting?

A) Agents and export trading companies are extensively used in direct exporting.
B) Unstable governments and economies are a good market to export goods.
C) Shipping documentation and paperwork are generic to all products and countries.
D) Insurance is essential for export payments to overcome the risk of default.

Question 74

Coupons,rebates,buy-one-get-one promotions,and sales are all forms of _______ techniques used in sales promotion.

A) discounting
B) contest
C) loyalty
D) introductory

Question 75

Which of the following statements is true of service locations?

A) Services at a remote location can be located anywhere in the world.
B) Office cleaning is an example of services at a mutually accessible location.
C) Services at a remote location needs frequent face-to-face client involvement.
D) Services at a mutually accessible location are ideal for home-based businesses.

Question 76

Services at a _____ often have too much specialized equipment to be readily transported and a need for at least some client involvement.

A) client's location
B) competitor's location
C) remote location
D) mutually accessible location

Question 77

A _____ is an example of a low customer contact business.

A) retail establishment
B) medical or legal office
C) restaurant
D) manufacturing business

Question 78

Which of the following can be exercised only when presented with specified shipping records?

A) A documentary draft
B) A letter of credit
C) A mail order
D) A codicil

Question 79

_____ refer to permanent changes made to the location to fit business's needs.

A) Rent defaults
B) Hidden charges
C) Leasehold improvements
D) Signage requirements

Question 80

Which of the following is true of high customer contact businesses?

A) Remote location services are examples of high customer contact businesses.
B) Traffic generators reduce customer traffic to the target market area.
C) Businesses providing a strong contrast to existing competition in the same area increase customer traffic.
D) Customer ease is not critical in high customer contact businesses.