Chapter 8 The Marketing Plan
True/False Questions
1. When preparing the industry analysis section of the business plan, using secondary
sources is not appropriate.
Answer: False Page: 235 Difficulty: Medium
2. Marketing research involves the gathering of information in order to determine who
will buy the product and what the most effective promotion strategy would be.
Answer: True Page: 236 Difficulty: Medium
3. An effective way to begin defining the purpose of a marketing plan, is to make a list of
all sources of information needed to prepare the marketing plan.
Answer: Falses Page: 237 Difficulty: Medium
4. Marketing information that already exists is called primary data.
Answer: False Page: 237 Difficulty: Easy
5. The Internet is a good source for primary information, but does not provide many
secondary sources.
Answer: False Page: 237 Difficulty: Medium
6. Private data sources, such as Reuter's Business Insights and Dun & Bradstreet's
Million Dollar Directory, are a low-cost secondary data source.
Answer: False Page: 237 Difficulty: Hard
7. The simplest approach to gathering primary information is by developing a
questionnaire.
Answer: False Page: 237 Difficulty: Medium
8. Focus groups are an informal method for gathering in-depth marketing information.
Answer: True Page: 240 Difficulty: Medium
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Chapter 8 The Marketing Plan
9. Focus groups should be led by the entrepreneur.
Answer: False Page: 240 Difficulty: Medium
10. Management needs to look at the marketing plan as a guide for implementing
marketing decision making and not as a generalized, superficial document.
Answer: True Page: 241 Difficulty: Medium
11. A marketing plan need not provide for the use of existing resources, allocation of all
equipment, financial resources, and human resources, since this is part of a production
plan.
Answer: False Page: 241 Difficulty: Hard
12. The marketing system identifies the major interacting components, both internal and
external to the firm.
Answer: True Page: 242 Difficulty: Medium
13. The management team and the venture's company mission are examples of internal
environmental factors.
Answer: True Page: 243 Difficulty: Easy
14. The marketing mix consists of the following variables: external environmental factors,
internal environmental factors, and marketing strategy.
Answer: False Page: 244 Difficulty: Medium
15. The situation analysis describes past and present business achievements of the new
venture.
Answer: True Page: 245 Difficulty: Medium
16. The process of dividing the market into smaller homogeneous groups is called market
segmentation.
Answer: True Page: 246 Difficulty: Easy
17. It is a good idea to have several marketing goals, since it provides a better clarity to
the entrepreneur.
Answer: False Page: 248 Difficulty: Hard
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Hisrich, Entrepreneurship, Seventh Edition
Chapter 8 The Marketing Plan
18. All marketing goals and objectives should be quantifiable in physical units, time units,
or price units.
Answer: False Page: 248 Difficulty: Medium
19. When making decisions about pricing strategy, the entrepreneur should consider only
costs directly associated with the product and ignore overhead.
Answer: False Page: 249 Difficulty: Medium
20. When products cannot be easily differentiated, the entrepreneur is forced to charge a
lower price than the competition.
Answer: False Page: 251 Difficulty: Medium
21. It is harder to charge a high price if the company operates in a nondifferentiated
product market.
Answer: True Page: 251 Difficulty: Medium
22. The final price of a product or service is the sum of total cost plus profit margin.
Answer: True Page: 251 Difficulty: Easy
23. Direct marketing is a channel of distribution that is too expensive for most
entrepreneurs to use.
Answer: False Page: 251 Difficulty: Medium
24. Middlemen such as wholesalers have lower distribution costs because they operate
with economies of scale.
Answer: True Page: 251 Difficulty: Easy
25. Manufacturer's agents take title to products and resell them.
Answer: False Page: 251-252 Difficulty: Medium
26. Promotion using television is less expensive than promotion using the Internet and
direct mail.
Answer: False Page: 252-253 Difficulty: Medium
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Chapter 8 The Marketing Plan
27. The marketing plan is not meant to be a commitment by the entrepreneur to a specific
strategy.
Answer: False Page: 254 Difficulty: Medium
28. Unrealistic goals are a common reason for failure of the marketing plan.
Answer: True Page: 255 Difficulty: Easy
Multiple Choice Questions
29. Which of the following statements is (are) not true?
A) Primary focus of an industry analysis is to provide sufficient knowledge of the
environment that can affect marketing strategy decision-making.
B) Industry analysis needs to be conducted using only primary research data.
C) Industry analysis begins with the broadest-based assessment of environmental and
industry trends.
D) The information-seeking process of industry analysis is known as an upside-down
pyramid.
Answer: B Page: 235 Difficulty: Easy
30. _____ is the process of gathering information in order to determine who will buy the
product and what is the most appropriate distribution channel.
A) Market segmentation
B) Marketing research
C) Market mixing
D) Marketing planning
Answer: B Page: 236 Difficulty: Medium
31. Marketing research begins with:
A) definition of objectives or purpose.
B) setting the advertising budget.
C) identifying direct marketing strategy.
D) collecting a list of primary and secondary sources of information.
Answer: A Page: 236 Difficulty: Medium
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Hisrich, Entrepreneurship, Seventh Edition
Chapter 8 The Marketing Plan
32. Information that already exists is called:
A) marketing data.
B) primary data.
C) secondary data.
D) target data.
Answer: C Page: 237 Difficulty: Medium
33. Observation, interviewing, and focus groups are examples of collecting:
A) marketing data.
B) primary data.
C) secondary data.
D) target data.
Answer: B Page: 237 Difficulty: Medium
34. The most common approach to gathering primary information is:
A) observation.
B) focus groups.
C) experimentation.
D) interviewing.
Answer: D Page: 238 Difficulty: Medium
35. Focus groups:
A) should be led by the entrepreneur.
B) consist of 20 to 30 potential customers.
C) are an informal method of gathering market information.
D) discuss information in a formal and standardized procedure.
Answer: C Page: 240 Difficulty: Medium
36. The _________ is the written statement of marketing objectives, strategies, and
activities to be followed in the business plan.
A) marketing plan
B) marketing mix
C) marketing system
D) marketing structure
Answer: A Page: 242 Difficulty: Medium
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Chapter 8 The Marketing Plan
37. The major interacting components that enable a firm to successfully provide products
to the marketplace are called the:
A) marketing plan.
B) marketing mix.
C) marketing system.
D) marketing structure.
Answer: C Page: 242 Difficulty: Hard
38. Generally speaking, entrepreneurs see the external environment as:
A) uncontrollable.
B) marginally influential.
C) largely influential.
D) predictable.
Answer: A Page: 242 Difficulty: Medium
39. Which of the following is an internal environmental variable?
A) The economy
B) Technology
C) Industry demand
D) Financial resources
Answer: D Page: 243 Difficulty: Medium
40. Financial resources and the management team are both examples of the:
A) external environment.
B) marketing mix decision variables.
C) feedback system.
D) internal environment.
Answer: D Page: 243 Difficulty: Medium
41. The four variables that affect short-term marketing decisions are referred to as the:
A) marketing mix.
B) market segment.
C) marketing plan.
D) marketing system.
Answer: A Page: 244 Difficulty: Medium
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Chapter 8 The Marketing Plan
42. The marketing mix consists of:
A) product, price, research, and promotion.
B) product, research, distribution, and promotion.
C) product, price, distribution, and promotion.
D) product, price, distribution, and research.
Answer: C Page: 244 Difficulty: Medium
43. The __________ is the specific group of potential customers toward which a venture
aims its marketing plan.
A) external environmental factor
B) target market
C) channel of distribution
D) consumer market
Answer: B Page: 245 Difficulty: Medium
44. Market segmentation is the process of:
A) dividing the market into smaller homogeneous groups.
B) describing market conditions.
C) presenting future opportunities.
D) exploring new market opportunities.
Answer: A Page: 246 Difficulty: Medium
45. Once the marketing goals and objectives have been established, the entrepreneur can
begin to develop the __________ and __________ to achieve them.
A) marketing plan, industry analysis
B) marketing mix, consumer research
C) marketing strategy, action plan
D) market research, industry analysis
Answer: C Page: 248 Difficulty: Medium
46. In establishing goals and objectives, it is important to:
A) quantify all aspects of the goals.
B) limit the number of goals to 1 or 2.
C) set standards that are ideal.
D) measure it for control purposes.
Answer: B Page: 248 Difficulty: Hard
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Chapter 8 The Marketing Plan
47. Which of the following is (are) not a key element in the pricing strategy?
A) Cost
B) Margin or markup
C) Competition
D) Distribution
Answer: D Page: 249-250 Difficulty: Easy
48. When products cannot be easily differentiated:
A) a higher price can be charged.
B) a skimming price strategy is appropriate.
C) there is little room for price variations from the competition.
D) the lowest possible price must be charged.
Answer: C Page: 251 Difficulty: Hard
49. The _________ element of the marketing mix involves decisions as to what is the
most appropriate channel.
A) product
B) price
C) distribution
D) promotion
Answer: C Page: 251 Difficulty: Easy
50. Manufacturer's representatives are marketing middlemen that:
A) are paid a commission when a sale is made.
B) take physical possession of the product.
C) work exclusively for the entrepreneur.
D) take title and physical possession of the product.
Answer: A Page: 252 Difficulty: Medium
51. Business-to-business marketing involves:
A) sales to households for personal consumption.
B) a more direct channel of distribution than consumer markets.
C) selling products such as household furniture.
D) selling products and services through certified representatives.
Answer: B Page: 253 Difficulty: Medium
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Chapter 8 The Marketing Plan
52. Which of the following is true of implementing a market plan?
A) It is meant to be a tentative plan by the entrepreneur to a specific strategy.
B) It need not be assigned to an individual for coordinating and implementing the
plan.
C) It is a formality that serves as a superficial document to outside financial
supporters or suppliers.
D) It is a commitment to make adjustments as needed or dictated by market
conditions.
Answer: D Page: 254 Difficulty: Medium
53. If the entrepreneur is constantly faced with significant changes in the marketing
strategy, then it is likely that:
A) there is insufficient monitoring of the plan.
B) the business marketing effort does not support the strategy.
C) the plan was not prepared properly.
D) there have been too many external factors that were difficult to predict.
Answer: C Page: 255 Difficulty: Medium
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