Marketing
The part of an advertisement that delivers the sales message is the:
a) Element
b) Tagline
c) Layout
d) Body copy
Answer: Body copy
The body copy explains to readers how they will benefit from the product or what the product will do. Body copy is one of the elements, or parts, of an ad. A tag line is a slogan used in an advertisement. The layout is the way in which the elements of an advertisement are put together
Three years ago, Omar made a deposit to a savings account. Each year, Omar has watched as the interest on his initial deposit has grown. He is earning interest on the principal amount plus on the interest earned on the principal. In other words, Omar is earning:
a) Simple interest
b) The present value
c) Compound interest
d) The inflation value
Answer: Compound interest
Compound interest is often referred to as "interest on interest." In this example, Omar is earning compound interest on his original deposit because he is earning interest on the principal plus interest on that interest! If Omar was earning simple interest, he would only be earning interest on the principle amount.
Who typically reviews and approves the guidelines for running a corporation, which is also known as corporate governance policies?
a) The investors
b) The shareholders
c) The management team
d) The board of directors
Answer: The board of directors
A corporation's board of directors is responsible for approving and reviewing the corporate governance policies of the business. These corporate governance policies specify the guidelines and rules by which a corporation is directed and run. Although shareholders, the management team, and the investors are affected by these rules, it is the job of the board to approve and review them.
Why is it important for entrepreneurs to talk with industry experts when developing new business concepts?
a) The industry experts typically provide useful information
b) The industry experts usually improve your management skills
c) The industry experts commonly enhance your confidence
d) The industry experts frequently offer financial support
Answer: The industry experts typically provide useful information
Industry experts have in-depth knowledge about a specific field. Experts often know about the trends, processes, new products, and new technologies that affect the industry. These experts often provide entrepreneurs with useful information as they develop ideas for their new ventures.
Consumers of hospitality products have the right to expect businesses to provide goods and services that:
a) Maintain international requirements.
b) Meet each individual's standards
c) Furnish several amenities
d) Are safe and clean
Answer: Are safe and clean
Hospitality products differ a great deal and include such items as a meal in a restaurant and a sleeping room at a lodging facility. The guests have a right to expect that the facility provides clean linens and disinfected bathrooms. Guests expect that the locks on the doors are adequate to keep them safe from intruders and that measures have been taken to keep guests from tripping over a loose carpet. Guests have the right to expect that the food that they purchase is safe and free from bacteria.
Which of the following is a type of internal marketing information:
a) Public records
b) Sales reports
c) Government databases
d) Industry journals
Answer: Sales reports
Internal marketing information that is useful to businesses includes sales reports and other types of accounting and sales data. The advantage to a business of using internal marketing information is that it is easy to obtain because it is available in-house. Marketing managers can review internal information, such as sales reports, on a regular basis and make adjustments to existing programs based on what the information reveals. For example, if reports indicate that sales are down in certain areas, managers can increase advertising or use other techniques in an attempt to reverse the trend.
Retirement accounts and real estate are examples of:
a) intangible assets
b) garnishments
c) tax shelters
d) derivatives
Answer: Tax shelters
Tax shelters are methods of minimizing taxable income. For example, the government does not tax the income that an employee places in an employer-sponsored retirement program until the employee withdraws the money from his/her account. In other words, this portion of the employee's income is tax-deferred. Homeowners minimize their tax obligation when they write off their interest on their mortgages as tax deductions on their tax returns.
What commonly insured risk would be covered by liability insurance?
a) Theft
b) Flood damage
c) Personal injury
d) Shipment losses
Answer: Personal injury
Liability insurance protects a business against damage suits filed by employees or customers as the result of any personal injuries that might occur on the business's property. Shipment losses, thefts, and flood damage are risks that would be covered by property insurance.
What important factors should a small-business owner consider when deciding if s/he should hire an additional employee?
a) Property taxes and benefits
b) Necessary skills and affordability
c) Screening process and skill set
d) Training needs and attitude
Answer: Necessary skills and affordability
A business owner considers many factors when determining if s/he should hire an employee. An important consideration is the nature of the work that the owner needs to have done. For example, if the owner needs someone to pay bills and mail invoices, s/he would likely hire a person who has bookkeeping skills. The owner must also consider if s/he can afford to pay a full-time or a part-time employee. Hiring a full-time employee is more costly because the person works longer hours, which increases payroll expenses.
The hostess received Mrs. Jones's reservation request for eight people very pleasantly, but she also stated, "The restaurant will only provide one check for parties of eight or more." Mrs. Jones was dissatisfied with this statement. The major area of this customer's complaint concerns the restaurant's:
a) Personnel
b) Prices
c) Product
d) Policy
Answer: Policy
Business-related complaints are often based on a business's number and types of services offered or its policies. Since the hostess was pleasant, the complaint was not caused by restaurant personnel. The group had not yet purchased any products or been charged a price.
What is a promotional activity that governments regulate to maintain a fair environment among competitors in the marketplace?
a) Telemarketing sales
b) Bait-and-switch contests
c) Direct Mail
d) Comparison advertising
Answer: Comparison advertising
A comparison advertisement is a promotional message in which the advertiser pays for a message that compares its product to another company's similar product. The advertiser's intent is to focus on the positive attributes of its product while pointing out negative aspects of its competitor's product. Sometimes, advertisers make false or deceptive statements about the competitors' products, which can negatively impact the competitors' businesses. To help maintain a fair competitive environment, governments often regulate the way businesses can use comparisons in their advertising efforts.
A business's balance sheet lists $2,500 in cash, $6,125 in accounts receivable, $3,775 in inventory, $10,350 in machinery and equipment, and $4,280 in accounts payable. Calculate the business's total assets.
a) $15,225
b) $18,470
c) $22,750
d) $27,030
Answer: $22,750
Total assets include items such as cash, accounts receivable, inventory, machinery and equipment, buildings, land, investments, and interest. Total assets do not include accounts payable, which are considered debts.
Thomas is preparing a report that discusses the factors that are preventing the business from generating the desired profit. He must provide suggestions for improving the business's financial situation in the report. What type of analytical report is Thomas writing?
a) Market analysis
b) Troubleshooting
c) Feasibility
d) Justification
Answer: Troubleshooting
Troubleshooting reports address specific problems and provide recommendations for resolving them. Because Thomas's report addresses financial problems and provides suggestions for overcoming these problems, he is preparing a troubleshooting report.
Which of the following is true regarding enterprise risk management:
a) It only impacts lower-level employees
b) It supports business objectives
c) It is a temporary project
d) It focuses on external risk
Answer: It supports business objectives
Enterprise risk management is a process that involves developing a holistic, overarching risk management plan throughout an organization. Enterprise risk management links risk management to the business's overall goals.
When the Tratiana Resort received a negative review online, the manager was quick to respond in an apologetic manner, offering the customer an upgraded room should s/he choose to visit again. This is an example of:
a) Brand evangelism
b) Poor customer service
c) Guest recovery
d) Product adaptation
Answer: Guest recovery
Guest recovery is the process of turning dissatisfied or angry customers into satisfied customers through quality service. The Tratiana Resort is practicing guest recovery by responding quickly and offering an upgrade to an angry customer.
Salespeople who can effectively explain to customers the unique benefits of their products often are able to:
a) arrange information in useful reference charts
b) develop a definite selling advantage over competitors
c) evaluate individual reactions to presentations
d) point out many physical characteristics
Answer: Develop a definite selling advantage over competitors
Unique or exclusive benefits are advantages that are available only from a certain product or business. If a salesperson's product has one unique or novel feature that can be translated into a benefit desirable to customers, the salesperson has a definite selling advantage over competitors. While explaining the unique benefits of a product, a salesperson should evaluate a customer's reactions and use useful reference charts. Pointing out physical characteristics involves explaining features rather than benefits.
An economic trend that typically precedes an upturn in commodity prices is the __________ for at least a year.
a) Stock market declining
b) Dollar increasing in value
c) Growth of the money supply declining
d) Yield curve levelling out
Answer: Dollar increasing in value
An upturn or increase in commodity prices is typically preceded by a number of economic trends and conditions. These trends include the dollar strengthening, or increasing in value, for at least a year; the stock market increasing and improving for at least a year; the growth of the money supply increasing for at least a year; and the yield curve steepening for at least a year. Growth in employment and industrial production also accompanies an upturn in commodity prices.
A type of business ownership in which one or more of the owners does not have full liability is called a:
a) limited partnership
b) general partnership
c) sole proprietorship
d) service organization
Answer: Limited partnership
In a limited partnership, one or more partners have limited liability in terms of the amount of financial responsibility or the amount of involvement in the business. A sole proprietorship is owned by one person, and the owner has unlimited liability. A service organization is a provider of intangible products, not a type of business ownership. In a general partnership, all partners are liable for the debts or losses of the business.
Which of the following is a global trend that might encourage an entrepreneur to consider international business opportunities:
a) Flexible currency rates
b) Higher allowances
c) Enforceable trade agreements
d) Lower tariffs
Answer: Lower tariffs
Entrepreneurs often find business opportunities by monitoring trends, or the direction in which society is moving. One trend that positively affects international business is the lowering of trade barriers, including tariffs, which are taxes on import and export products. International trade is becoming more affordable and profitable because businesses do not pay as much in tariffs.
The North Ridge Diner is always swamped during the weekends. What could the restaurant do to keep customers from becoming impatient while they wait?
a) Determine which aspect of restaurant operations is slow
b) Give a discount to guests who wait over 30 minutes
c) Alert guests that their tables are ready via text message
d) Check reviews to see how customers feel about the wait time
Answer: Alert guests that their tables are ready via text message
When restaurants are busy, it is important to keep customers entertained to improve their experience. One way to do so is to alert them via text message that their table is ready. That way, customers do not have to sit and wait—they can explore the surrounding area, run errands, etc.
What should marketing researchers first determine when developing a sampling plan for a marketing research project?
a) The size of the group it intends to survey
b) The validity of the information
c) How the researchers should code the responses
d) How to predict the sample group's responses
Answer: The size of the group it intends to survey
A sampling plan is the course of action or blueprint for gathering marketing information from a section of a target market. When a business designs its sampling plan, it must determine the size of the group that it intends to survey and the process that it intends to use to select the participants. Researchers determine the validity of the data after coding and analyzing it, which can only occur after the sample group has been selected and surveyed. Researchers usually assign response codes during the survey-development process. Predicting the sample group's responses is not a necessary action to take when a business develops a sampling plan.
What type of economic indicator are nominal interest rates?
a) Procyclic and coincident
b) Countercyclic and lagging
c) Procyclic and lagging
d) Countercyclic and coincident
Answer: Procyclic and coincident
Nominal interest rates are interest rates that have not been adjusted for inflation. In other words, nominal interest rates include both the real interest rate and inflation. Like inflation, nominal interest rates are procyclic and coincident economic indicators. They move in the same direction as the general economy, and they move at the same time as the general economy. Countercyclical economic indicators, such as the unemployment rate, move in the opposite direction of the economy. Lagging economic indicators change several months after the economy begins to improve or worsen.
When bottlenecks in business processes develop that cause a company to miss deadlines and waste resources, an effective manager would most likely choose to
a) Implement an employee incentive program
b) Invest in quality control
c) Redesign the business processes
d) Speed up production
Answer: Redesign the business processes
When bottlenecks in business processes develop, an effective manager would most likely redesign the business processes to eliminate the bottlenecks. Investing in quality control, implementing an employee incentive program, and/or speeding up production would not eliminate the bottlenecks.
Which of the following venture-harvesting methods usually supports a venture's future growth and facilitates the business owner's exit:
a) Ceasing business operations
b) Initiating a public stock offering
c) Setting up a public trust fund
d) Developing a licensing plan
Answer: Initiating a public stock offering
Venture harvesting is the stage in the entrepreneurial process in which the entrepreneur exits the business and collects (harvests) his/her share of the venture investment. There are many ways to harvest a venture, including closing the business entirely, selling the business to another person or company, keeping the business intact and releasing cash flows, and taking the company "public" through an IPO (initial public offering). IPO means that the entrepreneur is selling stock to the public and giving up control of some or all of the business; over time, the venture becomes a public corporation. By incorporating the business, the owner is selling stock, which generates money so the company can continue and grow.
One of the reasons why a chain of hotels might analyze and interpret the marketing information contained in databases is to:
a) Survey guests
b) Compare variables
c) Tabulate findings
d) Organize products
Answer: Compare variables
A chain of hotels might analyze and interpret the marketing information contained in databases in order to compare several variables that change from property to property. For example, one hotel might be located in an affluent suburb while another one is located in an urban area. The chain might analyze the information in its database concerning both communities in order to make appropriate marketing decisions such as the types of services to offer in each location. Although the chain provides the same types of goods and services to both communities, it needs to analyze data in order to know if the consumers in each community have different wants and needs.