Q&A Hero

Q: Which of the following statements best describes the process of idea screening in new product development? A. It involves specifying the details of each idea's technological feasibility, its cost, how it can be marketed, and its market potential. B. It is the process of selecting the most promising ideas to be further evaluated for feasibility. C. It involves creating the first versions of products called prototypes which are used in further consumer testing. D. It is the process of mass producing a new product so that consumers can avail it.

Q: Which of the following is the first stage of the new product development process? A. Test marketing B. Commercialization C. Feasibility study D. Idea generation

Q: Which of the following statements is true about me-too products? A. For me-too products, steps in new product development process should never be skipped. B. The vast majority of new ideas for small businesses will be me-too products. C. Idea generation is the longest stage in the development of me-too products. D. Testing a me-too product's differential advantage over competition is a wasted effort.

Q: ZestOne Technologies has launched a series of tablet computers that are similar to a competitor's product that already exists in the market. Such products are typically termed as _____. A. me-too products B. prototypes C. augmented products D. complementary goods

Q: Which of the following should be avoided while coming up with a company or brand name considering the possibility of future expansion? A. Selecting a company or brand name that describes the firm or the product B. Using one name for the company and a separate brand name for the products C. Using names that are relatively easy to spell and pronounce D. Selecting a company or brand name that's too narrow

Q: The group of people on which a marketer focuses promotion and sales efforts is called a _____. A. focus group B. target market C. strategic group D. sales pitch

Q: The core product typically includes: A. the basic description of what a company or a product does. B. features of a product that differentiates it from competition. C. what a product means to the customers. D. value and cost benefits customers incur from a product.

Q: A(n) _____ typically means the core product plus features that tend to differentiate the product from competition. A. pure good B. hybrid product C. augmented product D. me-too product

Q: The entire bundle of products, services, and meanings of one's offering; including extras like service, warranty, or delivery, as well as what the product means to the customer refers to _____. A. augmented product B. total product C. hybrid product D. pure good

Q: A service typically exhibits the characteristic of _____ because if it is not used when offered, it cannot be saved for later use. A. perishability B. tangibility C. absorptivity D. homogeneity

Q: The first time Jena visited Blue Corals Inn, a restaurant in her neighborhood, she was delighted with the food and service quality. However, the next time she dined at the same place, the restaurant's food and service seemed to have lost its quality. This scenario best illustrates the _____ characteristic of services. A. perishability B. tangibility C. heterogeneity D. absorptivity

Q: Pure goods are more _____ than pure services. A. perishable B. inconsistent C. inseparable D. homogenous

Q: Which of the following statements is true about pure services? A. They are separable from consumption. B. They are tangible. C. They are heterogeneous. D. They are nonperishable.

Q: Purchasing a car with a warranty is most likely to be an example of a _____. A. pure good B. good-dominated product C. pure service D. hybrid good

Q: An item's capability of being touched, seen, tasted, or felt is called _____. A. tangibility B. legitimacy C. mutuality D. perishability

Q: Which of the following statements is true about products? A. People such as political candidates and celebrities cannot be considered as products. B. Most of the products sold today are combinations of both goods and services. C. Products in terms of goods are generally less homogeneous than services. D. Products in terms of goods are more inseparable from their providers than services.

Q: Even if a competitor matches a sale or offers some other promotion to match one's offering, it's not as aggressive an action as a price war.

Q: For services, referral bonuses are an inefficient tool because the recommendation of a friend or relative is of no importance in purchasing or in trying a new service.

Q: Random discounts shouldn't be too frequent because consumers begin to realize if they stock up in this sales period, they can probably wait until the next sales period.

Q: Price skimming involves setting a price above that of the competition so as to indicate a higher quality or that a product is a status symbol.

Q: It's almost always a good idea for a small firm to try to compete on price.

Q: (p. 288; 290) It's always easier for a business to raise prices than it is to lower them as it will face much less customer dissatisfaction.

Q: Increasing market share usually means pricing toward the low end of the competition in order to take market share from the competition.

Q: Setting prices higher than the competition without providing customers with the perception of receiving greater value will lead to lower overall volume.

Q: Optimum price is the lowest price that will produce the desired level of sales in an intended market.

Q: If a rapid prototyping model can be developed, the molds for manufacturing can be made inexpensively by most modern manufacturers.

Q: Competitors of a company are not a source of business ideas.

Q: The new product development process is likely to be easier for services than for innovative goods.

Q: For me-too products, the stages of new product development are always extensively long.

Q: Marketing and new product experts believe that most of the small business failures could have been avoided by following the new product development (NPD) process.

Q: As a small business adds employees, the importance of its owner increases.

Q: The advantage of separating company name from brand name is that if a product doesn't take off, one can drop the product line with minimal impact to the company image.

Q: The total product is the most general description of a business, and the one which captures the smallest amount of what is special about a business.

Q: The concept of total product includes how customers describe one's good or service.

Q: Services have separability of production and consumption.

Q: A product can include goods, services, and ideas.

Q: Connie decides to open "Connie's Corner Caf" and finds the ideal location for her venture. However, it appears that Connie will have to approach investors or bankers for financial backing. When she talks to her local bank manager, Mr. Johnson, he immediately asks for Connie's business plan. Connie is in trouble because she does not know what a business plan looks like. Which of the following parts of a business plan is focused on creating new products or services and preparing new technologies, ideas, products or services for the firm's market? A. Preselling B. Research and Development C. Test marketing D. Proprietary technology

Q: Sam intends to present a business plan to his potential key employees. The employees would most likely expect to know about the _____ during the presentation. A. compliance monitoring procedure B. intellectual property protection C. asset or collateral base D. long-term prospects

Q: A law firm needs to present a business plan to government officials. Which of the following is most likely to be expected by the officials in the business plan? A. High growth rate B. Compliance with regulations and laws C. Intellectual property protection D. Competitive advantage

Q: Service or product quality is most likely to be crucial in a business plan for _____. A. bankers B. potential customers C. joint venture partners D. angel investors

Q: Which of the following is most likely to be a major business plan concern for bankers? A. Compliance with regulations and laws B. Intellectual property protection C. Asset or collateral base D. Monitoring compliance

Q: Which of the following is most likely to be the key information that joint venture partners seek in a business plan? A. Asset or collateral base B. Cash flow and cash cycle C. Intellectual property protection D. Stability of firm

Q: Which of the following is most likely to be a business plan concern for silent partners/angel investors? A. Growth rate B. Stability of firm C. Asset or collateral base D. Monitoring compliance

Q: Amounts and schedules for returns, stability of firm, funds use, and investment are most likely to be the major business plan concerns for _____. A. joint partner ventures B. silent partners C. government agencies D. family and friend investors

Q: _____ is referred to as the extent to which employees, investors, and family members involved in the business know the business's purposes and operations. A. Internal understanding B. Narrowcasting C. Test marketing D. External legitimacy

Q: The extent to which a small business is taken for granted, accepted, or treated as viable by organizations or people outside the small business is referred to as _____. A. narrowcasting B. external legitimacy C. test marketing D. internal understanding

Q: A(n) _____ plan is a document designed to detail the major characteristics of a firmits product or service, its industry, its market, its manner of operating and its financial outcomes with an emphasis on the firm's present and future. A. screening B. informational C. invention D. business

Q: A business plan presentation remains the same for different audiences.

Q: Overlooked competition is not a critical risk in a business plan.

Q: Every business faces risks in the real world, so every business plan needs to spend some time addressing them.

Q: Operational plans and private placement memos are the only two types of plans that add material to a full business plan.

Q: Informational plan focuses on the market and operationalization of a new invention.

Q: A screening plan provides information on the company, product/service, market, and critical risks to prospective business.

Q: Selling your product or service in a limited area, for a limited time is known as parallel marketing.

Q: When a product or service is truly new to everyone, it is considered a pioneering business.

Q: The goal of appendixes is to provide supporting information that helps detail or support the key selling points of a business plan.

Q: For an existing business, the financials report the last five years of actual data, and then offer ten-year projections for the income, cash flow, and balance sheet.

Q: The financial statements in a business plan include income statements, cash flow, balance sheet, and their respective assumptions.

Q: The goal of the industry section of a business plan is to focus on customerswho they are, what they are like, and how to plan to get or keep the customers.

Q: If a product or service has protection through a proprietary technology, it is mentioned in the product/service subsection of the company section of a business plan.

Q: A securities disclaimer on the title page of a business plan is needed to comply with the Securities and Exchange Commission rulings.

Q: Executive summaries are written in a formal style, suitable for investors, bankers, and lawyers to read.

Q: The elevator pitch is much shorter than a vision statement or tagline.

Q: Research suggests that firms without a business plan are less likely to close down than firms with plans.

Q: In the context of a business plan, product quality, its benefits, service quality, and the competitive advantage are the primary concerns of potential customers.

Q: In the context of a business plan, a firm's responsiveness to customers is a key concern of bankers.

Q: Business plans are essential for external legitimacy and internal understanding.

Q: Explain the key factors that an influential person looks for in a business plan presentation.

Q: Explain the different types of special-purpose plans.

Q: Explain the financial components of a business plan.

Q: Explain the market section of a classic business plan.

Q: Briefly summarize the 5-M Model of business planning.

Q: What is an executive summary? How is it organized into topics?

Q: Differentiate between the vision statement and the mission statement of a business plan presentation.

Q: Briefly describe the five types of business planning presentations.

Q: Identify at least two concerns of the various business plan audiences.

Q: Since the caf is Connie's first business venture, which of the following risks is most likely to cause Mr. Johnson to evaluate her business plan negatively? A. Uncertain sales Experience deficit C. Overlooked competition D. Inadequate payback Experience deficits: Do you (or someone else in your firm) have experience in (a) the line of business, (b) the industry, (c) the locality, (d) managing? Have it, find it, or say how you'll learn it.

Q: Differentiate between strategic actions and tactical actions.

Q: What is an entry wedge? Explain any five of the entry wedges.

Q: What are the different small business supra-strategies?