Entre2 ASK Practice Exam Part 4 (#38-50)

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When planning a business's product mix, the business must make decisions about components such as the product line, packaging, and

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brand development.

Answer explanation

Brand development. Product mix is the particular assortment of goods and services that a business offers. A business must consider many things about the product mix including the product line, which is a group of related items in the product mix. The business must also consider how to package the products and how to develop the product brand. Brand refers to the combined impressions and experiences associated with a particular company or its products. A tag line is a slogan a business uses in an advertisement. Publicity is any nonpersonal presentation of ideas or products that is not paid for by the company or individual that benefits from or is harmed by it. Credit terms are policies regarding the arrangement by which businesses or individuals can purchase now and pay later.

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When a business charges high prices for luxury items, it is using a positioning strategy that emphasizes

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product quality.

Answer explanation

Product quality. Positioning is a product-mix strategy in which a business creates a certain image or impression of a product in the minds of consumers. One type of product-mix strategy uses quality and price to position its products in the marketplace. By charging high prices for luxury or upscale products, the business is emphasizing the product's quality. If the business wanted to emphasize value to consumers, it would use low prices to position the product. Place utility is the usefulness created by making sure that the goods and services are available at the place where they are needed or wanted by consumers. Product seasonality refers to goods and services (e.g., snow shovels) that consumers need or want during a certain time or under certain circumstances. Seasonal intensity is not a common positioning strategy that businesses use to create an upscale image for a product.

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To prevent others from using its brand logo, a business should

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obtain trademark protection.

Answer explanation

Obtain trademark protection. To protect the integrity of its brand, a business should obtain trademark protection from the government to deter others from using the logo without the business's authorization. A business that wants to seek legal protection of an invention or process applies for a patent from the government. A domain name is a business's web address, which is registered through authorized organizations or businesses. A licensing charter is a fictitious term.

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Which component of a promotional plan addresses exactly how a business will achieve its goals? Options: Situation analysis, Budget, Strategy, Evaluation

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Strategy

Answer explanation

Strategy. A promotional plan is the framework for the promotional activities of a business. The promotional plan includes several components. The strategy component provides information as to exactly how the business will achieve its established goals. The budget component outlines the financial resources the business will need to carry out the promotional activities. The situation analysis is a determination about the company's current business situation and the direction in which the business is headed. A promotional plan's evaluation component provides information about how the business will determine if its promotional activities are successful.

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Which of the following is a true statement regarding quality management and the environment: Creating quality products is usually harmful to the environment. Organizations should regard environmental issues above customer satisfaction. Environmental issues have little to no impact on quality management. Quality-management plans should create environmentally sustainable processes and products.

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Quality-management plans should create environmentally sustainable processes and products.

Answer explanation

Quality-management plans should create environmentally sustainable processes and products. Customers and businesses are aware of the need to preserve and protect the environment. Many organizations consider this one of their social responsibilities, and customers expect them to do their part. Quality management should include plans to create environmentally sustainable processes and products. Creating quality products does not need to be harmful to the environment. However, businesses should keep customer satisfaction as their top priority.

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The general purpose of managerial planning is to

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provide direction.

Answer explanation

Provide direction. Planning is the management function of deciding what will be done and how it will be accomplished. The planning process provides direction by establishing goals for all business activities, which might include generating ideas, creating something capable of satisfying needs and wants (utility), and making a positive impact on society.

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The staffing function is different from the organizing function because staffing is

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continuous.

Answer explanation

Continuous. The staffing function is different from the organizing function because staffing is continuous. It's always taking place within the organization, whereas organizing may take place just one time. Staffing is not optional—businesses need human resources to operate. Organizing lays the foundation for staffing. Neither function is more important than the other.

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Which of the following is an example of a broad objective that top management might develop for a business: Sponsor a charitable event, Increase profitability, Replace damaged equipment, Purchase promotional advertising

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Increase profitability

Answer explanation

Increase profitability. Broad objectives are long-term goals that a business hopes to achieve. Top management usually develops broad objectives that a business plans to accomplish over a period of time. Increasing profitability is an example of a broad objective because it doesn't specify a certain percentage of increase to achieve during a designated time period. Sponsoring charitable events, purchasing promotional advertising, and replacing damaged equipment are examples of specific objectives that might be developed by lower level management.

Front

Which of the following questions does the company description section of a business plan answer:
What is your business's marketing plan?
What is the general outlook for your industry?
Where is the business located?
What will you charge for your products?

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Where is the business located?

Answer explanation

Where is the business located? The company description includes information about the business's location. The market analysis section contains information about the general industry outlook. The business's marketing plan is outlined in the strategy and implementation section. How much you will charge for your products is discussed in the product(s) offered section.

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What is the percent of increase in net profit from last year to this year if a business had a net profit of $35,500 on sales of $270,000 last year and a net profit of $50,000 on sales of $330,000 this year?

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2%

Answer explanation

2%. Businesses compare their operating results from year to year to determine if their net profit is increasing, decreasing, or staying the same. In this example, first calculate last year's percent of net profit based on sales by dividing the amount of net profit by total sales ($35,500 / $270,000 = 0.131 or 13%). Then, calculate this year's percent of net profit based on sales ($50,000 / $330,000 = 0.151 or 15%). To determine the percent of increase from last year to this year, subtract last year's percent from this year's percent (15% - 13% = 2%).