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EXAM 3 Entrepreneurship
Terms in this set (104)
The process of creating and delivering desired goods and services to customers.
Involves all of the activities associated with winning and retaining loyal customers.
A _______ business plan needs to contain both a financial plan and a marketing plan.
Bootstrap marketing strategies
Are unconventional, low-cost, and creative marketing techniques that allow a small company to realize a greater return from its marketing investment than do larger rivals.
Do not require large amounts of money to be effective - just creativity.
Bootstrap Marketing Plan: Three Objectives
1. Pinpoint the _________ ___________ markets the company will serve.
2. Determine customer __________ and ___________ through market research.
3. Analyze a firm's ___________ _______________ and create a marketing strategy to communicate its value proposition to the target market.
: the vehicle for gathering the information that serves as the foundation for the marketing plan.
Never _________ that a market exists for your company's product or service; prove it!
Market research does _____ have to be time consuming, complex, or expensive to be useful.
the study of important population characteristics, such as age, income, race, and education.
How to Conduct Market Research?
1. __________ the problem.
2. __________ the data.
3. __________ and interpret the data.
4. Draw ____________ and act.
Also, keep an eye on what is going on in the industry/market: track trends.
is the data that has been collected and analyzed by someone other than the researcher.
Firsthand data collection and analysis. Basically, it is whatever you collect on your own.
Unique Selling Proposition
A key customer benefit of a product or service that sets it apart from its competition.
Unique Selling Proposition
Answers key ________________ question: "What's in it for me?"
Consider ___________ or psychological benefits as well as tangible ones.
______________ your USP to your customers often.
The "right" price for a product or service ____________ on the value it provides for a customer.
Value is not ___________________ with low price.
-the price that customers are willing to pay if they understood perfectly the benefits that a product or service delivers for them.
- the price customers are willing to pay for the product or service.
___________ of small businesses: getting into the price wars
begins when one competitor decides that he or she can achieve higher volume instantaneously by lowering prices.
often eradicate companies' profits and scar an industry for years.
Statistics demonstrates that many entrepreneurs cut prices to the point of ______________ just to compete.
A better fit for small companies for several reasons.
The key is to _______________ a company's products and services.
Nonprice Competition is more effective for _________ companies.
Introduction of a New Product Three Goals:
1. Getting the product ____________
2. Maintaining market share as competition grows
3. Earning a profit
(same features as existing products)
(enhancement of existing ones )
introduction at lower price (just a little bit above the cost).
Ideal for: low-priced goods in the market where little opportunity for differentiation exists.
Danger: attracting customers with no brand loyalty.
Setting higher than normal price that covers well above the total product cost.
Benefits: portrays the product as high quality; pricing mistakes are easy to correct.
Life Cycle Pricing
It is variation of a skimming strategy.
Assumes that competition will emerge over time.
Benefit: rapid return of start-up costs
- sets prices that end in odd numbers to create a psychological impression of low prices.
- simplifies pricing function by pricing different products in a product line at different price points, depending on their quality, features, and costs.
- marking down the normal price of a popular item in an attempt to attract more customers who make incidental purchases of other items at regular prices.
- reduction from normal list pricing.
- grouping together several products or services or both into a package that offers customers extra value at a special price.
- setting prices for customers located in different territories because of different transportation costs.
Dynamic (customized) pricing
- a company sets different prices on the same products and services for different customers using the information that it collects about its customers.
- involves selling base product for one price but selling the options or accessories for it at a much higher markup.
Captive product pricing
- selling the product for a low price and charging at a higher price for accessories that accompany it.
- when a company uses revenues from the sale of by-products to be more competitive in pricing the main product.
Suggested retail prices
- when the manufacturers print the suggested retail price on their products or include them on the invoices.
- following the prices that the competitors establish.
- the traditional method of product costing in which all manufacturing and overhead costs are absorbed into the product's total cost.
Variable or direct costing
- a method of product costing that includes in the product's cost only those costs that vary directly with the quantity produced.
Locate business close to __________ you can serve
If your business requires ________________ that are difficult or too expensive to transport, choose a location near the source of those materials
Vary from one state to another
Impact capital requirements for a business
Labor supply needs
Are there enough qualified workers for your business in the area?
Especially relevant for technology-driven businesses
What is the state's attitude towards your kind of business?
Any laws that will negatively impact it?
Some states have more friendly policies than the others.
Speedy, reliable access is important
Total operating costs
A state may offer low utility costs, but its labor costs and taxes may be among the highest in the nation.
The most successful small businesses track a city's population growth
Census data is very important
is a geographic concentration of interconnected companies, specialized suppliers, and service providers that are present in a region.
Compatibility with community
A small company's image must fit in with the character of a town and the need and wants of the residents.
Local laws and regulations
May significantly impact the operations if you are not familiar with them.
Depending on the business ask: Is their an airport? Railroad? How convenient the is the area's access to highways? ...
Many states offer financial _____________ to encourage businesses to create jobs.
Trade area size
- the region from which business can expect to draw customers over a reasonable time span.
- the benefits a company receives by locating near other businesses that sell complementary products and services or that generate high volumes of traffic
- similar businesses located to one another may serve to increase traffic flow to both. This location strategy works well for products for which customers are most likely to comparison shop. (ex. auto dealers)
Degree of competition
Size, location, activity of competitors matter
: areas known for crimes and illegal activities, etc...
Bad _____________ example: a site on which other businesses failed many times.
Index of Retail Saturation (I R S)
- a measure of potential sales per square foot of store space for a given product within a specific trading area.
Reilly's Law of Retail Gravitation
The law estimates the attractiveness of a particular business to potential customers.
Foreign Trade Zone
- is a specially designated area in or near a U.S. customs port of entry that allows resident companies to import materials and components from foreign countries; assemble, process, manufacture, or package them; and then ship the finished product while either reducing or eliminating tariffs and duties (256 FTZs in the US).
Import things without paying money for it
A company located in a foreign trade zone is treated as it is located ____________ the US
Organizations that combine low-cost, flexible rental space with a multitude of support services for their small business residents
Myth 1: If I launch a site, customers will _________ to it.
Reality: about 21 million sites added annually. Getting a site noticed in the crowd has become increasingly ______________. Listing with a popular search engine does not guarantee customers will choose yours.
Myth 2: Online customers are ________ to please.
Experienced online shoppers tend to be unforgiving and will quick-click to another site if their shopping experience is _________ or they cannot find the products and information they want.
- build relationships with other companies, customers, trade associations, online directories, and other Web sites to interact with customers
Myth 3: Making money on the web is easy.
Reality: Attracting customers requires more __________ than ever before.
Myth 4: ___________ is not an important issue.
Myth 5: I don't need a strategy.
An online strategy is _________ to success
Myth 6: The most important part of an e-commerce effort is technology.
Understand the ____________ business first then use technology to develop an online business model that provides customer value in a profitable way.
Myth 7: Customer service is not important.
Study: _____% of online shoppers expect higher levels of customer service than they do offline.
Myth 8: _______ websites are better than simple sites.
Reality: a "more-is-better" mentality does not work today.
Myth 9: It's what's up front that counts.
Reality: Order systems and ___________ are critical
Myth 10: It's too late to get on the ______
Focus on a market niche
Concentrate on a small corner of the market that the giants have overlooked.
Develop a community
The most successful websites are the ones that blend their websites with social media presence.
Helps to connect people with similar interests
Attract visitors by giving away "____________"
Make creative use of e-mail, but avoid becoming a "___________"
Make sure your Web site says "______________"
Go mobile-_______________ web sites
Promote your _____ online and offline.
Use ___________________ tools to attract and retain customers.
Develop an effective ____________________ strategy.
Natural (organic) Listings
- arise as a result of "spiders," powerful programs search engines use to crawl around the Web.
Search Engine Optimization (SEO)
- the process of managing the content, key words, titles, tags, features, and design of a web site so that it appears at near or the top internet search results.
Paid (sponsored) Listings
- short text ads with links to the sponsoring company's Web site.
Product listing ads (PLAs)
- paid adds on Google that show more information, including product images, prices, business name, and a short promotional message, than traditional text ads.
Beware of Click Fraud
Occurs when a company pays for clicks that are generated by someone who has no interest in or intent to purchase its products or services.
- tools that measure a Website's ability to attract customers, generate sales, and keep customers coming back.
Only about _____ of small businesses use web analytics strategically to refashion their websites.
Revenue, # of items sold
Visitor segmentation measurements
(info about customers, return customer/new).
(helps to find what customers are looking for).
(how often customers abandon carts, does the check out go smoothly?).
Virus detection software
- programs that scan computer drives for viruses designed to harm computers and information they contain.
Intrusion detection software
- programs that constantly monitor the activity on a company's network server and should alert if they detect someone breaking into the system or if they detect unusual network activity.
- a combination of hardware and software that allows to have access to the Internet but keeps unauthorized users from entering the a company's network and the programs and data it contains.
Secure Sockets Layer (S S L ) Technology
- an encryption device that secures customer's transaction information as it travels across the Internet.
- online transactions customers dispute.
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