Chapter 4 Assessment Trisha Murphy

Chapter 4 Assessment Review all of Chapter 4 (Lessons 4.1 – 4.5) and complete the following assessment. Vocabulary Builder Choose the term that best fits the definition. Write the letter of the answer in the space provided. Some terms may not be use. E 1. A system for collecting, recording, and analyzing information about customers, competitors, goods and services L 2. The individuals or companies that are interested in a particular product or service and are willing and able to pay for it C 3. Competition from a business that makes most of its money selling the same or similar products K 4. Free promotion generated by media coverage J 5. A set of processes—planning, pricing, promoting, distributing, and selling—used to satisfy the needs of customers F 6. Percentage of a market owned by a business B 7. Routes that products and services take from the time they are produced to the time they are consumed A 8. Paid form of communication by a business about a product or service a. advertising b. channels of distribution c. direct competition d. indirect competition e. market research f. market share g. marketing mix h. product mix i. marketing plan j. marketing k. publicity l. target market Review Concepts (from Chapter 4) 9. Why are customers so important to a business? Why is it important to listen to your customers? Customers are important to a business because the money they spend at your business is what keeps the business going. If you do not listen to your customers' needs/wants, they will go to a competitor that will listen to them.

10.Describe the types of primary data market research. What is the purpose of conducting market research?? Surveys are a list of questions to ask customers to find out demographic and psychographic information. Observation is observing places that sell similar products and see what kind of customers purchase those products. Focus groups are in-depth interviews with small numbers of people. This gives the business owner valuable ideas on products or services. The purpose of conducting market research is to find out what your customer base looks like and what products or services they are interested in. 11.Why is it important to identify your direct and indirect competition? It is important to identify your direct and indirect competition so that you have an idea of what they charge for their products or services and how customers react to their prices/service. 12.What topics should you consider when developing your marketing plan? When developing your marketing plan, you should consider what product/service you will offer, who your prospective customers are, if there is a constant demand, how many competitors you have, if you can create a demand for your product or service, and if you can compete effectively in price, quality, and delivery of your product. 13.How do you identify your product mix? You identify your product mix by selecting product features, considering branding, packaging, and labeling, and the position of your products or services. 14.Describe methods of setting prices. When pricing a product, you can choose demand-based pricing, which is determined by how much customers are willing to pay for a product or service. You can also choose cost-based pricing, which is determined by using the wholesale cost of an item as the basis for the price charged. Another option is competition based pricing where the pricing is determined by considering what competitors are charging for the same product or service. When offering a service, you can choose time-based or bundling pricing. Time-based pricing is when you charge for your time. Bundling is when you bundle services under one price, rather than making the customer pay for each individual part of the service. 15.Why should established businesses advertise? Why do new businesses need to advertise? Established businesses should advertise because they may have new products/services. They also want to make sure any customers that do not know about them have a chance to. New businesses need to advertise to get their name out there and showcase their products/services to the customers. 16.How do you choose an advertising medium? You choose an advertising medium based on cost and effectiveness in reaching your target audience. 17.What are the advantages and disadvantages of publicity? The advantages of publicity are that is it free and good publicity can be as helpful as advertising.