Quiz 12: Small-Business-Marketing-Product

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

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

At the heart of the marketing mix is promotion.

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

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

Product augmentations are additions made to create a unique product.

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

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

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

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

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.

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

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

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

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

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

Price is the only factor to consider when purchasing inventory.

The first step in the purchasing process is investigating suppliers.

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

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

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

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.

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

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

A mutual dependence is created when using a single supplier.

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

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

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

Managing inventory can be compared to a balancing act.

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.

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

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

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

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

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

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

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

Obsolescence refers to products becoming outdated or out of fashion.

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

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

Every business incurs both holding and ordering costs.

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

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

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

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

According to the Chapter 12 opener,MIT professor Don Sadoway and his grad assistant developed renewable energy product which A) demonstrated that not all innovations are successful B) can make coal to be environmental friendly C) was a shameful exploitation of investors who have good intentions but little knowledge. D) attracted the interest of Bill Gates

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

The ____ includes product,place,price,and promotion. A) Operations concept B) Production concept C) Marketing mix D) Financial mix

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

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

Which of the following is not a level of product satisfaction? A) Generic product B) Core benefit C) Provided product D) Augmented product

There are ____ levels of product satisfaction. A) Three B) Four C) Five D) Six

A marketer's job is managing products through which of the following? A) Production B) Packaging C) Distribution D) The entire life cycle

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

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

Changing the perception that customers have of a product is called A) Repositioning B) Repackaging C) Reneging D) Reprising

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

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

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

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

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

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

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

____ 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

____ 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

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.

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

The final step in the purchasing process is A) Completing an order B) Selecting suppliers C) Placing an order D) Inspecting an order

The make-or-buy decision largely rests on the availability and quality of A) Competitors B) Suppliers C) Customers D) Employees

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

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

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

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

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

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

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

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

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

____ is the most apparent cost of inventory. A) Shrinkage B) Ordering costs C) Financing D) Holding costs

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

____ refers to inventory that has been purchased but is not fit for sale due to damage or deterioration. A) Obsolescence B) Theft C) Spoilage D) Abuse

____ becomes a problem for businesses in which styles,tastes,or technologies change quickly. A) Shrinkage B) Obsolescence C) Holding costs D) Financing

If ____ were the only inventory expense,a business would want to order as few items at a time as possible. A) Ordering costs B) Holding costs C) Shrinkage D) Financing costs

If ____ were the only inventory expense,a business would want to order as many items at a time as possible. A) Financing costs B) Holding costs C) Shrinkage D) Ordering costs

Maintaining a balance between ____ and ____ is part of the difficult job of controlling inventory. A) Ordering costs,holding costs B) Storage costs,holding costs C) Inventory costs,ordering costs D) Shrinkage costs,spoilage costs

Ordering costs tend to be ____ costs. A) Per-piece B) Variable C) Fixed D) Long-term

____ begins with determining when inventory restocking is needed and how much inventory should be ordered. A) Controlling inventory B) Selling inventory C) Pricing inventory D) Inventory cycle

The period of time that begins when an item is at its highest desired stocking level,continues as the item is used or sold,and ends when the item is replenished is known as A) Dead time B) Inventory cycle C) Lead time D) Shelf life

The time when a business needs to restock inventory is known as the ____. A) Reorder quantity B) Inventory cycle C) Reorder point D) Lead time

The amount of an item that needs to be ordered is known as which of the following? A) Reorder quantity B) Inventory cycle C) Reorder point D) Lead time

Benjamin Wilson is the Distribution Manager of a small coffee company.He has found that about four percent of total inventory is lost due to product theft or spoilage.This is referred to as inventory A) Obsolescence B) Shrinkage C) Dismissal D) Deadstock

Inventory represents about ____ percent of a manufacturing firm's capital. A) 5 B) 10 C) 25 D) 50

Sally owns and operates an in-home daycare business,where she is the only employee.She provides all meals and snacks to the kids that she takes care of.What type of food inventory control method should she adopt? A) Electronic data interchange B) Just-in-time control C) Economic order quantity D) Visual control

The period of time from order placement until goods are received is known as which of the following? A) Dead time B) Order time C) Lead time D) Inventory cycle

Small businesses with a narrow selection of items can get by with a/an ____ method of inventory control. A) Economic order quantity B) Visual control C) ABC classification D) Electronic data interchange

____ is a traditional method of inventory control that minimizes total inventory costs by balancing annual ordering costs and annual holding costs for an item. A) Visual control B) Reorder point and reorder quantity C) Economic order quantity (EOQ) D) ABC classification

The basic economic order quantity model assumes all but which of the following? A) Volume discounts cannot be taken. B) Annual demand can be accurately predicted. C) Average inventory level is equal to maximum inventory level minus minimum inventory level divided by two. D) Average inventory level is equal to minimum inventory level minus maximum inventory level divided by two.

A shoe business meets the qualifications for using the economic order quantity (EOQ)model.The business sells 20,000 pairs of shoes per year.Ordering costs for supplies are $12 per order.Holding costs are $0.96 per pair of shoes per year.What is the EOQ for this business? A) 500 B) 708 C) 1,667 D) 19,200

A small businesses owner that sells little red wagons meets the qualifications outlined in the economic order quantity (EOQ)model.His store sells 800 little red wagons per year.When he orders little red wagons from his supplier,his ordering costs amount to $15.The little red wagons cost the owner $1.00 per wagon per year to hold in inventory.What is the owner's EOQ,and how many times per year should he order little red wagons from his supplier? A) 155 and 6 B) 253 and 3 C) 90 and 9 D) 190 and 4

A widget store sells 12,000 widgets per year and meets the qualifications outlined in the economic order quantity (EOQ)model.Ordering costs for widgets are $14 per order and holding costs are $0.50 per widget per year.How many orders per year should this business make? A) 12 B) 13 C) 14 D) 15

A store sells 10,000 bags of dried fruit products per year.Ordering costs for supplies amount to $12.50 per order,and holding costs amount to $0.55 per bag per month.What would the economic order quantity (EOQ)be for this business? A) 190 B) 195 C) 200 D) 205

The inventory system that classifies items based on the total dollar volume of sales that each item generates is known as which of the following? A) Economic order quantity B) ABC classification C) Electronic data interchange D) Reorder point and quantity

ABC classification is an inventory control method that classifies items based on A) Visual control B) How badly it is needed C) Alphabetical name of the items D) Dollar volume of sales each generates

Items that generate the highest dollar volume should be placed in which category under the ABC classification? A) A B) B C) C D) D

The use of ____ will make monitoring inventory under the ABC classification quick and easy. A) Several inventory employees B) Television cameras C) Computer databases D) Electronic data interchange

An electronic means of inventory control known as electronic data interchange is made possible through which of the following? A) Bar codes B) Many employees C) Telephones D) Cash registers

A ____ allows the business to know how many items are in stock at any given time. A) Hand counting inventory system B) Perpetual inventory system C) Kanban D) Demand-flow inventory system

Which of the following inventory control systems can be beneficial to both the supplier and the customer,even if the two are separated by distances across the globe? A) ABC classification B) Economic order quantity C) Electronic data interchange D) Visual control

The inventory system that has supplies arriving as close to the time they are needed as possible is known as A) Perpetual inventory system B) Virtual inventory system C) Electronic data interchange inventory system D) Just-in-time inventory system

Just-in-time inventory is most effective when A) It is the only system used. B) It is part of an overall philosophy. C) It is used only part of the time. D) It is structured around marketing only.

In order for just-in-time to be effective,all but which of the following must occur? A) It needs to be a part of an overall philosophy. B) Continuous improvement needs to be the goal of all employees. C) Accurate forecasting of demand and production must occur. D) Projected forecasts of demand and production are sufficient.

What type of inventory control system could eliminate the need for supermarket checkout completely? A) Radio-frequency identification B) UPC barcode identification C) Materials requirements planning D) Just-in-time control

For "just-in-case" inventory control,which of the following is true? A) Small orders and frequent deliveries are the norm B) The objective is to find the lowest possible price C) There is less emphasis on paperwork D) Delivery times and quantities are often changed with direct communication

Just-in-time inventory control systems are a ____ type of system based on actual customer demand. A) Push B) Pull C) Stand-alone D) Preceding

Materials requirements planning inventory control systems are a ____ type of system based on estimated demand. A) Push B) Pull C) Stand-alone D) Preceding

Materials requirements planning relies on ____ to coordinate product orders,raw materials in stock,and the production sequence. A) Employees B) A materials manager C) Computers D) Sales

Materials requirements planning is an inventory management technique for use when ____ for some materials depends on the ____ for other materials. A) Supply,demand B) Supply,supply C) Demand,supply D) Demand,demand

An advanced control system for inventory that has evolved from materials requirements planning is which of the following? A) IRP B) ARP C) MRPII D) DRP

Manufacturing resource planning II coordinates ____ with all other functions of a business,such as marketing,accounting,and engineering. A) Production management B) Sales management C) Financial management D) Inventory management

Describe the four components of the marketing mix.

According to marketing consultants Booz,Allen & Hamilton,name at least four new-product categories.

Describe at least four best practices that successful companies adopt to gain product competitive advantage.

Discuss two primary concerns when selecting a supplier.

Explain the Pareto rule.

Discuss the fact that managing inventory is a balancing act that affects all businesses.

Compare and contrast economic order quantity and just-in-time as inventory control methods.