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ch 15 and 16 assigment (for final)

FALSE

Some entrepreneurs find that maintaining their current levels is sufficient.

all small firms want to grow.
True or False?
TRUE

While growth in sales is perceived as good for business, the owner needs to be prepared for possible changes in personnel demands, operations and management style.

While growth in sales is perceived as good for business, the owner needs to be prepared for possible changes in personnel demands, operations and management style.
True or False?
TRUE

It is important that small firms gain a competitive advantage which cannot be quickly imitated.

It is important that small firms gain a competitive advantage which cannot be quickly imitated.
True or False?
FALSE

The physical development stage involves developing a prototype. Financial considerations are completed in the business analysis stage of new product development.

In the physical development stage of the product development process, new products are analyzed resulting in ideas failing to show possible profitability being discarded.
True or False?
TRUE

Product testing is the last step in the product development process.

Product testing is the last step in the product development process.
True or False?
TRUE

Packaging is a significant tool for increasing the value of the total product by creating a distinctive impression.

Packaging is a significant tool for increasing the value of the total product by creating a distinctive impression.
True or False?
FALSE

Labeling information should go beyond the specified minimum legal requirements. Warranties can be implied or explicit and are not part of labeling.

Labeling information can be limited to the minimum legal requirements as the warranty will cover the information.
True or False?
FALSE

Strategies for the marketing of goods and services are not the same—they differ along a number of dimensions (e.g., tangibility, standardization, and perishability).

Strategies for goods marketing and services marketing are essentially identical.
True or False?
TRUE

Trade dress describes those elements of a firm’s distinctive operating image that are not specifically protected under a trademark, patent, or copyright.

Trade dress describes those elements of a firm’s distinctive operating image that are not specifically protected under a trademark, patent, or copyright.
True or False?
TRUE

To maintain the validity of a patent beyond its normal span of up to 20 years, companies must pay a maintenance fee every four years; otherwise, the patent number is to be removed from the product.

To maintain the validity of a patent beyond its normal span of up to 20 years, companies must pay a maintenance fee every four years; otherwise, the patent number is to be removed from the product.
True or False?
FALSE

The activities involved in physically moving products are called physical distribution or logistics.

Channel management is synonymous with the term logistics.
True or False?
FALSE

Distribution is essential for both tangible and intangible goods.

Distribution is essential for tangible goods, but not for intangible goods.
True or False?
FALSE

Transportation is the main component of physical distribution—additional components include storage, materials handling, delivery terms, and inventory handling.

Physical distribution of products includes only transportation.
True or False?
FALSE

Although fixed and variable costs do not behave in the same way, small businesses often treat them identically—this average pricing approach is thus a dangerous one.

Average pricing is an appropriate pricing approach for small businesses because the method takes into consideration both fixed and variable costs.
True or False?
FALSE

Markup rates are added to a product’s cost to cover expenses, price reductions and profit.

Markup rates should be high enough to cover a product’s cost, cover expenses, any price reductions, and profit.
True or False?
FALSE

Demand typically decreases as price increases, but this is not always the case.

The demand for a product always decreases as its price increases in a break-even analysis.
True or False?
FALSE

Markups may be expressed as a percentage of either cost or the selling price of the product/service.

Markups may be expressed as a percentage of either the firm’s cost or the industry-standard cost.
True or False?
FALSE

Dynamic pricing sets prices higher after gauging a customer’s financial means and desire for the product or service.

Sellers using dynamic pricing set prices based on prices of market leaders.
True or False?
TRUE

Variable pricing strategy occurs where a business sets and advertises a fixed price but gives a discount for reasons such as the customer’s amount purchased.

Variable pricing strategy occurs where a business sets and advertises a fixed price but gives a discount for reasons such as the customer’s amount purchased.
True or False?
FALSE

Break-even analysis may not be as accurate as it seems, so this should be viewed only as a tool for pricing and should not be used by itself to determine the final price. Market characteristics and the firm’s current market strategy should be considered.

Break-even analysis is an accurate tool for pricing because it points directly to the correct price for a given product.
True or False?
FALSE

It is a skimming price strategy that is most practical when there is little threat of short-term competition in the market or when startup costs must be recovered rapidly.

A penetration price strategy is most practical when there is a low threat of short-term competition in the market or when startup costs must be recovered rapidly.
True or False?
TRUE

Pricing based on what the market will bear works only for non-standardized products in markets where there is low competition.

Pricing based on what the market will bear works only for non-standardized products in markets where there is low competition.
True or False?
FALSE

Trade-credit agencies collect credit information on business firms, but not consumers.

Trade-credit agencies collect credit information on business firms and consumers in a given area.
True or False
TRUE

The Consumer Credit Protection Act requires that the finance charge for credit be stated as an annual percentage rate and that creditors specify the procedures used for correcting billing mistakes.

The Consumer Credit Protection Act requires that the finance charge for credit be stated as an annual percentage rate and that creditors specify the procedures used for correcting billing mistakes.
True or False?
FALSE

These are the primary purposes of the federal Consumer Credit Protection Act. The Equal Credit Opportunity Act ensures that all consumers are given an equal chance to obtain credit.

The primary purposes of the Equal Credit Opportunity Act are to inform consumers about terms of a credit agreement and to require creditors to specify how finance charges are computed.
True or False?
planned as growth causes company change.
A small company’s future growth should always be
The increase depends on the company planning before the increase.
What increase in sales percentage will put pressure on a small company personnel and management style of the owners?
A high-growth firm’s need for additional financing may exceed its available resources, even though the venture is profitable.
Which statement is true about company growth?
cost
The fact that Karen, owner of BareBabies,com could not take a vacation due to her business’s triple in size displays a personal _______ to company growth.
According to Clayton Christensen, 93 % of all innovations that eventually became successful started out in the wrong direction.
Which statement is correct concerning the role of innovation for small businesses?
implement previously developed plans for the hidden curves.
When a company’s competitive advantage moves into the decline stage, it should
adjust strategies for changing customer needs before rivals.
High performing companies
before the current strategy has run its course.
To maintain performance, a small business must launch a new competitive advantage
lowered financial risk.
The listed outcomes below are all “fruits” of competitive advantage except
sustainable competitive advantage.
Joe has redesigned an app that helps businesses organize their taxes after a rival gained market share. The IRS and the Society of Certified Public Accountants have said the app meets tax standards. The app would be considered a(n)
idea accumulation
Which stage is the most critical for a product to make it to product testing?
competitor-owned patents.
All of the following sources of new product ideas are within the framework of a formal product development process except
physical product development
Products must be carefully analyzed in terms of financial considerations in the _____ stage of the product development process.
product testing.
Key factors to consider when conducting the business analysis phase of the new product development process include all of the following except the
one to three years may pass before profits are realized.
The business analysis stage of new product development is critical since
Growth
The profit curve is the highest in which stage of the product life cycle?
brand.
A verbal or symbolic means of identifying a product is referred to as a
that are relatively complex to repair.
Warranties are important for products
Market reaction can be easy to predict about logos if the brand name is positive.
Which statement is false concerning logos?
former practices.
Effective evaluation of warranty policies should focus on all of the following except
Don’t leave room for interpretation.
Important rules of logo design include all of the following rules except?
increasing the quality of the total product.
Explicit functions of packaging include all of the following except
brand
iPad is a
brandmark
Judy is opening a small business producing high-quality paper products and decided to place a green pine tree on all product boxes and on the sign outside the facilities, to symbolize the business. At this point, the symbol is an example of a
emphasizing diversification.
A small firm can try to increase sales of an existing product by all of the following except
depth
When a product line has more items, it is has greater
modified product/multiple markets
Furniture Shine is introducing an improved version of its existing wax targeted to owners of antiques. The firm has decided to leave the original wax in the mix aimed towards residential owners. Furniture Shine is employing a _____ product strategy.
single product/multiple markets
Bagels Bagels Bagels, a small breakfast bagel bakery, has expanded into sandwiches for lunch using bagels. They are now employing a _____ product strategy.
70 years
A copyright provides protection for the duration of the creator’s life, plus
as trade dress.
The distinctive operating image of a product, including features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques, can be protected
the symbol ©.
A copyright notice should include
common-law rights do not always justify trademark protection over a generic term.
The United States Patent and Trade Office rejected Microsoft’s 1990 effort to gain exclusive rights to the name Windows. This decision illustrates that
distribution.
Both the physical movement of products and the establishment of intermediary relationships to guide and support the movement of the products are included in
logistics.
The activities of physically moving a product is
pricing structures on the retail level
Which function is not involved in supply chain management?
they perform the distribution function better than the product producer.
Intermediaries exist because
Intermediaries are being used if the customers are widely dispersed.
Recent developments in supply chain management include all of the following except
final assembly.
The scope of physical distribution covers all of the following except
dual distribution.
When a small firm operates with more than one channel of distribution, it is said to be using
an investment.
Small businesses should view distribution costs as
wholesalers
When the channel system uses ____, the storage function is transferred to the intermediary.
a dual distribution channel.
Cooking for Collin, a small manufacturer of holiday cakes, sells its product through independent retailers and mail-order marketing. Cooking for Collin is relying on
private carrier.
Equine Express, a small firm that transports horses both domestically and internationally, flies horses purchased on one of two company-owned planes. Equine Express operates as a
prestige pricing.
A pricing tactic whereby a firm sets a high price to convey an image of high quality or uniqueness is known as
cost and a margin of profit.
A business will not be successful unless it charges a price for its products that covers its total
prestige pricing while avoiding discounting worked best for the company
Jeremy Hitchcock, CEO of Dyn, found that
overhead cost/cost of goods sold
Active Feet, a small manufacturer of shoes, hired an additional vice-president and purchased a barrel of synthetic rubber used to make shoe soles. These two expenses should be considered a(n) ____ and a(n) ____, respectively.
elastic demand
Hollywood Amusement, a small independent movie theater, decreased the price of admission from $10 to $9. Prior to the price decrease, the business sold 1,000 tickets each month. After the price decrease, it experienced ticket sales of 1,500 a month. If the change in sales is attributable only to the change in price, Hollywood Amusement faces ____ for its movie tickets.
break-even analysis
When a small business owner systematically compares various cost and revenue estimates in order to determine the acceptability of alternative prices, ________ is being used.
contribution margin
The difference between the unit selling price and the unit variable costs and expenses is known as the
costs and revenue
Within the framework of a break-even analysis, an examination of ____ is conducted to determine the quantity at which the product, with an assumed price, will generate enough revenue to start earning a profit.
decreases, increases
Demand for a product typically ______ as price ______.
$21
The Golf Global Company sells 1,000 shirts annually at a price of $35 each. If the company’s pricing policies adhere to a 40% markup of selling price, the cost of each shirt is
price lining
What strategy prices products at a lower than normal, long-range market price to gain more rapid market share?
rapidly recover startup costs.
All of the following reasons support implementing a penetration pricing strategy except to
Conducted properly, price determination is an exact science
Which statement is not true with respect to pricing in a small business?
penetration pricing strategy
Chocolate Concoctions, a maker of high end chocolate candies, decided to price its boxes of candies below the long-term market price. The decision was made to increase market share and discourage other firms from entering the chocolate market. Chocolate Concoctions was implementing a
skimming price strategy
Troy Bourbon, a local bourbon distillery, initially sold its product at a premium price of $45 because the company believed consumers would view the bourbon as a prestige item. The company decided that when startup costs had been fully recovered and competition became imminent, the company would reduce the price to $30 which was more expected in the market. The distillery is using a
consumer credit.
Credit granted by retailers to consumers who purchase for personal or family use is referred to as
Capacity
Which “C” defines the customer’s asset conservation?
sustaining long-term sales, even if these exceed the buying power of the customer.
Benefits of credit to sellers include all of the following reasons except
increase
Credit sales ____ the amount of working capital needed by the business doing the selling.
A down payment is normally required.
Which statement is true with respect to installment accounts?
Charged purchases may not exceed the credit limit.
Which statement is true with respect to revolving charge accounts?
A down payment will be required.
Hillary wants to purchase a refrigerator on credit. If she uses an installment plan, what is most likely to occur?
collective establishment credit cards.
The basic types of credit cards include all of the following types except
Installment accounts
Which option is designed for long-term credit?
revolving charge accounts
Handyman Hardware, a small community-based store, offers its consumers the option of using credit. Creditworthy individuals are able to use the “HH Credit Card” for all purchases up to a credit limit of $1,000. Consumers are required to pay at least 20 percent of their outstanding balance at the end of each month. A 2 percent finance charge is assessed on the unpaid balance at the end of each billing cycle. Handyman Hardware is employing ____ in its business.
$1,600
A trade credit bill of $80,000 with terms of sale of 2/5, net 30 means the buyer saves ____ if the bill is paid within the discount period.
$0
How much discount will a buyer receive if the buyer pays a trade credit bill of $60,000 with terms of sale of 2/5, net 30 on the net due date?
an open charge account
Stone Creek Farm sells a special type of hay to horse owners. If the farm allows its customers to have hay delivered and then be billed at a later date, it would be using which type of account?.
require creditors to specify how finance charges are computed.
A primary purpose of the federal Consumer Credit Protection Act is to
Credit bureaus
Which organization is a good source of consumer credit information?
trade-credit agency.
Information Express is a privately owned and operated organization that collects credit information on business firms. After the organization analyzes and evaluates the data, it makes credit ratings available to client companies for a fee. Information Express is a
It depends on the individual account.
CarePair, a small business specializing in making and distributing hospital gowns to medical facilities, recent aging schedule showed an increase in medical facilities who are past due in payment. The facilities who are ____ days should be contacted first for payment.

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