Principles of Finance

DISCLAIMER STATEMENT Contributions of many individuals and from many written resources have collectively made this curriculum guide possible. The major authors, however, do not claim or guarantee that its contents will eliminate acts of malpractice or negligence. The responsibility to adhere to safety standards and best professional practices is the duty of the practitioners, teachers, students, and/or others who apply the contents of this document.

This guide was developed with federal CARL D. PERKINS Career and Technical Education ACT of 2006 funds.

Career and Technical Education North Carolina Department of Public Instruction 6361 Mail Service Center Raleigh, NC 27699-6361

All materials in this guide may be reproduced for educational purposes only.

FOREWORD This curriculum guide, Entrepreneurship I, was adapted to assist teachers in preparing students to meet the North Carolina State Board of Education’s Guiding Mission “that every public school student will graduate from high school, globally competitive for work and postsecondary education and prepared for life in the 21st century.” The course is rigorous and relevant, is based on state and national content standards, and engages technology to teach today’s generation of students. Related business and industry partners have endorsed this course as one that helps to prepare students for high-skill, high-wage, and/or high-demand occupational opportunities. This curriculum guide was adapted from the course titled Principles of Entrepreneurship produced by the MBA Research & Curriculum Center, which is a non-profit (501(c)3) consortium of state education departments.

In this course, students evaluate the concepts of going into business for themselves and working for or operating a small business. Emphasis is on the exploration of feasible ideas of products/services, research procedures, business financing, marketing strategies, and access to resources for starting a small business. Students develop components of a business plan and evaluate startup requirements. English language arts and social studies are reinforced. Work-based learning strategies appropriate include cooperative education, entrepreneurship, internship, mentorship, school-based enterprise, service learning, and job shadowing. Apprenticeship is not available for this course. DECA (an association for Marketing Education students) and Future Business Leaders of America (FBLA) competitive events, community service, and leadership activities provide the opportunity to apply essential standards and workplace readiness skills through authentic experiences.

This course content will enhance the core academic areas of reading, writing, and mathematics. It includes materials and performance assessments that are aligned to the course content. Formative assessments provide continuous feedback to measure student learning throughout the course. A companion classroom assessment bank — aligned, valid, and reliable — is available and provides summative assessments for each essential standard. We trust these significant efforts will guide North Carolina’s teachers in their mission to prepare globally competitive students for a successful, 21st-century life.

ACKNOWLEDGEMENTS Educators representing Business, Finance, & Information Technology and Marketing and Entrepreneurship program areas and business and industry leaders have given a great deal of time and energy to the development of the blueprint and content/teaching outline for this course. Without the collaboration of knowledgeable and committed professionals, it would not be possible to provide current curriculum materials necessary for effective instruction in Business, Finance, & Information Technology and Marketing and Entrepreneurship Education programs. The continual advancement of technology and constant changes in the technology industry make collaboration an essential part of the process of preparing young people to become competent members of the workforce. The following teachers participated in and collaborated during the Piloting of this course:

Pilot Teachers Alyssa R. English-David. W. Butler High School Ashleigh R. Phillips-West Brunswick High School

Project Director Delores P. Ali, Consultant, Marketing and Entrepreneurship Education

State Staff for Marketing and Entrepreneurship Education Delores P. Ali, Consultant, Marketing and Entrepreneurship Education Pam O’Brien-DECA State Adviser Atkins “Trey” Michael-Curriculum Specialist, CTE Carol Short-Curriculum Section Chief, CTE Jo Anne Honeycutt-Director, CTE

Marketing and Entrepreneurship Education Career and Technical Education North Carolina Department of Public Instruction 6358 Mail Services Center, Raleigh, NC 27699-6358

TABLE OF CONTENTS Entrepreneurship I

Entrepreneurship I Curriculum Guide Cover and SBE List Disclaimer Statement Foreword Acknowledgements Table of Contents Course Description ................................................................................................. i Adapted CTE Course Blueprint ............................................................................. ii Post-assessment Specifications ........................................................................... vi Equipment Lists and DPI Facilities Guidelines .................................................... vii Program Area Professional Learning Community (PLC) Moodle…………………viii Formative Assessment………………………………………………………………….ix Internet Policy ...................................................................................................... xi Going Green: A Guide to Using CTE Curriculum for Environment Sustainability ....................................................................... xii Overview of Career and Technical Student Organizations (CTSO) ................... xiii Overview of CTSO-Program Area Specific ........................................................ ivx Integrating CTSO Competitive Events in Classroom Instruction ........................ xvi MBAResearch Curriculum Framework Guide is divided into six sections: Introduction to Course Course Philosophy and Goals Course Descriptions and Learning Outcomes Course Outline Planning Guide Sheets Using Project-Based Learning and Projects Appendices

COURSE DESCRIPTION Entrepreneurship I Course Number: Recommended Maximum Enrollment: Hours of Instruction: Prerequisite:

8716 25 135 (block) 150 (regular) 6621 Marketing OR 8726 Personal Finance OR 8721 Principles of Business and Finance

In this course, students evaluate the concepts of going into business for themselves and working for or operating a small business. Emphasis is on the exploration of feasible ideas of products/services, research procedures, business financing, marketing strategies, and access to resources for starting a small business. Students develop components of a business plan and evaluate startup requirements. English language arts and social studies are reinforced. Work-based learning strategies appropriate include cooperative education, entrepreneurship, internship, mentorship, school-based enterprise, service learning, and job shadowing. Apprenticeship is not available for this course. DECA (an association for Marketing Education students) and Future Business Leaders of America (FBLA) competitive events, community service, and leadership activities provide the opportunity to apply essential standards and workplace readiness skills through authentic experiences. The Entrepreneurship I and II courses can help prepare students for the Assessment of Skills and Knowledge (A*S*K), http://www.askinstitute.org/, credential.

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Career and Technical Education (CTE) Adapted CTE Course Blueprint of Essential Standards and Indicators Business, Finance, and Information Technology Education Marketing and Entrepreneurship Education

8716 Entrepreneurship I Public Schools of North Carolina State Board of Education  Department of Public Instruction Academic Services and Instructional Support Division of Career and Technical Education Delores P. Ali, Project Director Raleigh, North Carolina Summer 2012 Contact [email protected] for more information.

Special thanks to the following educators who developed this Adapted CTE Course Blueprint.

Pilot Teachers Alyssa R. English-David. W. Butler High School Ashleigh R. Phillips-West Brunswick High School

This Adapted CTE Course Blueprint has been reviewed by business and industry representatives for technical content and appropriateness for the industry.

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Adapted CTE Course Blueprint of Essential Standards Essential standards are big, powerful ideas that are necessary and essential for students to know to be successful in a course. Essential standards identify the appropriate verb and cognitive process intended for the student to accomplish. Essential standards provide value throughout a student’s career, in other courses, and translate to the next level of education or world of work. The essential standards use Revised Bloom’s Taxonomy (RBT) category verbs (remember, understand, apply, analyze, evaluate, create) that reflect the overall intended cognitive outcome of the indicators. Each essential standard and indicator reflects the intended level of learning through two dimensions; The Knowledge Dimension is represented with letters A-C, and the Cognitive Process Dimension by numbers 1-6. This document will help teachers plan for curriculum delivery for the course, prepare daily lesson plans, and construct valid formative, benchmark, and summative assessments. Assessment for this course is written at the level of the ESSENTIAL STANDARD and assesses the intended outcome of the sum of its indicators. Curriculum provider is MBA Research & Curriculum Center. For additional information about this blueprint, contact the Division of Career and Technical Education, North Carolina Department of Public Instruction, 6361 Mail Service Center, Raleigh, North Carolina 27699-6361. Reference: Anderson, Lorin W. (Ed.), Krathwohl, David R. (Ed.), et al., A Taxonomy for Learning, Teaching, and Assessing: A Revision of Bloom’s Taxonomy of Educational Objectives, Addison Wesley Longman, Inc., New York, 2001.

Interpretation of Columns on the NCDPI Adapted CTE Course Blueprint No. Heading Column information

1 Essential Std # Unique course identifier and essential standard number.

2 Unit Titles, Essential Standards, and Indicators Statements of unit titles, essential standards per unit, and specific indicators per essential standard. If applicable, includes % for each indicator.

3 Course Weight Shows the relative importance of each unit and essential standard. Course weight is used to help determine the percentage of total class time to be spent on each essential standard.

4 RBT Designation Classification of outcome behavior in essential standards and indicators in Dimensions according to the Revised Bloom’s Taxonomy. Cognitive Process Dimension: 1 Remember 2 Understand 3 Apply 4 Analyze 5 Evaluate 6 Create

Knowledge Dimension: A Factual Knowledge B Conceptual Knowledge C Procedural Knowledge Career and Technical Education conducts all activities and procedures without regard to race, color, creed, national origin, gender, or disability. The responsibility to adhere to safety standards and best professional practices is the duty of the practitioners, teachers, students, and/or others who apply the contents of this document. Career and Technical Student Organizations (CTSO) are an integral part of this curriculum. CTSOs are strategies used to teach course content, develop leadership, citizenship, responsibility, and proficiencies related to workplace needs.

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Adapted CTE Course Blueprint Essential Standards for 8716 Entrepreneurship I (Hours of instruction: 135-180) Essential Std #

Units, Essential Standards, and Indicators (The Learner will be able to:) 1.00 Total Course Weight

A 1.00

ENTREPRENEURSHIP FOUNDATIONS Understand economics, career planning, information management, and communication skills. 1.01 Understand economic systems to be able to recognize the environments in which businesses function. (EC:065) 1.02 Participate in career-planning to enhance job-success potential. (PD:066), (PD:067) 1.03 Acquire information to guide business decision-making. (MN:187) 1.04 Write internal and external business correspondence to convey and obtain information effectively. (CO:040)

2.00

Understand entrepreneurship, product/service management, information management, professional development, emotional intelligence, and operations. 2.01 Employ entrepreneurial discovery strategies to generate feasible ideas for business ventures/products. (EN:001), (EN:002) 2.02 Acquire information to guide business decision-making. (NF:015) 2.03 Employ entrepreneurial discovery strategies to generate feasible ideas for business ventures/products. (EN:003), (EN:004), (EN:005) 2.04 Generate venture/product ideas to contribute to ongoing business success. (PM:127) 2.05 Utilize critical-thinking skills to determine best options/outcomes. (PD:012) 2.06 Employ entrepreneurial discovery strategies to generate feasible ideas for business ventures/products. (EN:006) 2.07 Employ product-mix strategies to meet customer expectations. (PM:130) 2.08 Apply ethics to demonstrate trustworthiness. (EI:091), (EI:075) 2.09 Develop a concept for new business venture to evaluate its success potential. (EN:007), (EN:008) 2.10 Implement expense-control strategies to enhance a business’s financial well-being. (OP:024) 2.11 Develop a concept for new business venture to evaluate its success potential. (EN:009), (EN:010) 2.12 Apply ethics to demonstrate trustworthiness. (EI:092) 2.13 Employ entrepreneurial discovery strategies to generate feasible ideas for business ventures/products. (EN:038)

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Course RBT Weight Designation 100% 54% 8%

B2

28%

B2

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3.00

Understand market planning and business law. 3.01 Develop marketing strategies to guide marketing tactics. (MP:001) 3.02 Select a target market appropriate for venture/product to obtain the best return on marketing investment (ROMI). (MP:003) 3.03 Employ marketing-information to develop a marketing plan. (MP:007), (MP:008) 3.04 Select a target market appropriate for venture/product to obtain the best return on marketing investment (ROMI). (MP:004), (MP:005) 3.05 Employ marketing-information to develop a marketing plan. (MP:009), (MP:010), (MP:012) 3.06 Acquire foundational knowledge of business laws and regulations to understand their nature and scope. (BL:001), (BL:006)

18%

B 4.00

PLANNING AND PREPARING TO MANAGE A SMALL BUSINESS Understand product/service management, strategic management, and channel management. 4.01 Position venture/product to acquire desired business image. (PM:131) 4.02 Utilize planning tools to guide organization’s/department’s activities. (SM:008), (SM:009) 4.03 Acquire a foundational knowledge of product/service management to understand its nature and scope. (PM:001) 4.04 Employ product-mix strategies to meet customer expectations. (PM:003), (PM:006) 4.05 Position venture/product to acquire desired business image. (PM:042) 4.06 Employ product-mix strategies to meet customer expectations. (PM:036) 4.07 Position venture/product to acquire desired business image. (PM:272), (PM:132) 4.08 Acquire foundational knowledge of channel management to understand its role in marketing. (CM:001), (CM:003) 4.09 Manage channel activities to minimize costs and to determine distribution strategies. (CM:010)

46% 21%

B2

5.00

Understand pricing, promotion, and market planning. 5.01 Develop a foundational knowledge of pricing to understand its role in marketing. (PI:001), (PI:002) 5.02 Employ pricing strategies to determine optimal prices. (PI:019), (PI:006), (PI:007) 5.03 Acquire a foundational knowledge of promotion to understand its nature and scope. (PR:001), (PR:002), (PR:003) 5.04 Understand promotional channels used to communicate with targeted audiences. (PR:007) 5.05 Manage promotional activities to maximize return on promotional investments. (PR:097) 5.06 Employ marketing-information to develop a marketing plan. (MP:013), (MP:014), (MP:015), (MP:016), (MP:017), (MP:018)

25%

B2

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POST-ASSESSMENT SPECIFICATIONS The post-assessment will be administered through the Elements Instructional Management System using a third party assessment provided by the MBA Research and Curriculum Center. The post-assessment will be a 100-item multiple choice test. The post-assessment will assess students’ knowledge and skills of the content at the essential standard level as specified on the adapted blueprint. Background Information on Essential Standards Essential standards are big, powerful ideas that are necessary and essential for students to know to be successful in a course. Essential standards identify the appropriate verb and cognitive process intended for the student to accomplish. Essential standards provide value throughout a student’s career, in other courses, and translate to the next level of education or world of work. Assessment for courses developed using the adapted CTE course blueprint is written at the level of the essential standard using one RBT category verb (remember, understand, apply, analyze, evaluate) that reflects the intended outcome of the sum of its indicators. For example, the indicators copied from an industry credential for an essential standard may use an immeasurable verb or may use a verb that is misaligned with the true intent of the indicator. Those verbs would still be used, since they are derived from the credential, but the assessment items would not necessarily reflect the definition of that verb. However, NC CTE will review the items and ensure alignment cognitively at the essential standard level.

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EQUIPMENT LIST, TECHNICAL REQUIREMENTS, and FACILITIES GUIDELINES

Access the equipment list, technical requirements, and facilities guidelines using the following links: Equipment list http://ctpnc.org/cte/equipment/ Technical requirements http://bit.ly/KwN1Lv Facilities guidelines http://www.schoolclearinghouse.org

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COURSE PROFESSIONAL LEARNING COMMUNITY (PLC) MOODLE Please join the Marketing and Entrepreneurship Education Moodle PLC by following these steps: 1. Obtain the Enrollment Key supplied by your local CTE Director or Administrator or from the Program Area Consultant. Program Area Consultants may be reached by email at: [email protected] . 2. Create a LearnNC account by going to this website: http://accounts.learnnc.org  Click on Create an Account (if you have used Moodle in the past, you can use your existing username and password). 

You pick your own username and password.



Enter your email address so that your username and password can be emailed to you.

3. Join the Moodle Class by going to Moodle's website: http://moodle.learnnc.org  Login using your username and password. 

In the upper left corner, click on All Courses.



Click on DPI under the PLC tab.



Click on the course PLC key.



Enter the Enrollment Key supplied by your local CTE Director or Administrator or from the Program Area Consultant. The Program Area Consultant may be reached by email at: [email protected]



Click on Enroll me in this Course

Teachers are encouraged to share ideas and activities in the course PLC and to participate in the discussion forums provided for each essential standard.

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FORMATIVE ASSESSMENT

Frequently Asked Questions Formative Assessment and North Carolina’s Formative Assessment Learning Community’s Online Network (NC FALCON) 1. What is formative assessment? Formative assessment is a process used by teachers and students during instruction that provides feedback to adjust ongoing teaching and learning to improve intended instructional outcomes (CCSSO FAST SCASS, 2006). 2. What is the primary purpose of the formative assessment process? The primary purpose of the formative assessment process is to provide evidence that is used by teachers and students to inform instruction and learning during the teaching/learning process. How does formative assessment fit into North Carolina’s next generation assessment system? North Carolina’s next generation, comprehensive, balanced assessment system includes formative assessment, interim/benchmark assessments, and summative assessments that are aligned to state standards. Formative assessment is an essential component of this system because it forms the foundation of teaching and learning. In contrast to summative assessment, formative assessment is more focused on collaboration in the classroom and identifying learning gaps that can be addressed before end-of-year assessments. Formative assessment should occur in the classroom more often than any other assessment. 3.

4. Are there “formative tests”? The definition that North Carolina has adopted defines formative assessment as a process. With this in mind, there is no such thing as a “formative test.” Formative assessment is regarded as an ongoing process rather than a particular kind of test. 5.

What formative assessment strategies can be implemented during classroom instruction? There are a number of formative assessment strategies that can be implemented during classroom instruction. These range from informal observations and conversations to purposefully planned instructionally embedded techniques designed to elicit evidence of student learning to inform and adjust instruction. See the Collecting and Documenting Evidence professional development module on North Carolina’s Formative Assessment Learning Community’s Online Network (NC FALCON) for additional information on formative assessment strategies. 6.

What resources are available to educators that will provide them with a basic understanding of formative assessment and illustrate the role it may play in a comprehensive, balanced assessment system? The online professional development series modules located on NC FALCON are intended to serve as a primer for teachers wishing to learn more about how formative assessment can impact their instruction and help their students achieve targeted learning goals.

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7. What professional development modules are available to educators on NC FALCON? There are currently five different formative assessment modules in the online professional development series located on NC FALCON. The following is a list and description of the modules:  Importance of Formative Assessment––An introduction to formative assessment and its role in North Carolina’s 21st century balanced assessment system.  Learning Targets and Criteria for Success––An exercise in writing clear learning targets and defining criteria for success to help students answer the question, Where am I going?  Collecting and Documenting Evidence––An exercise in collecting and documenting evidence of learning to help students answer the question, Where am I now?  Analyzing Evidence and Descriptive Feedback––An exercise in analyzing evidence and providing descriptive feedback to help students answer the question, How do I close the gap?  Administrator’s Role in Formative Assessment––An exploration of the administrator’s role in formative assessment, as outlined by the North Carolina Standards for School Executives, and its implementation in the school or district. 8. How much time does it take to complete the modules? The modules and the activities contained within each module have been created so that the series can be completed in approximately seven hours. Approximately forty-five minutes to one hour of computer time is needed for each module. The modules are self-paced; therefore, individual participants control the pace and location of their learning. 9.

Is it better to complete the modules individually or with a school or district learning team? The modules have been designed so that they can be used by individual educators working independently or with a school or district learning team. The NCDPI recommends participants work collaboratively in learning teams. Working together, teachers may assist one another as they complete the modules and practice their formative assessment skills. 10. Is CEU credit available for participants who complete any or all of the NC FALCON modules? At the completion of each module, participants will be able to print a certificate of completion which includes a recommendation for renewal credit or continuing education units (CEUs). Final awarding of CEUs must be approved by the local education agency (LEA). The LEA determines the content area and the number of CEUs granted. 11. How do educators access the modules on NC FALCON? NC FALCON is located at http://center.ncsu.edu/falcon/. For more information about login and password access, please visit the website or contact your LEA/school test coordinator.

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INTERNET POLICY

Career and Technical Education curricula and 21st Century Skills require students to use many technologies, including the Internet. Each school should have an Internet use policy, and all students should sign the school Internet policy prior to beginning any class that uses such technologies. Students who violate the school’s Internet policy must be held accountable for his/her actions and face appropriate consequences deemed necessary by the school in accordance with the school’s policies. Teachers must use extreme caution when assigning Internet activities to students. Teachers must preview sites, which can change daily, prior to ANY activity. If the teacher determines a website used in an activity is inappropriate, or students are not mature enough to behave properly and according to the school’s Internet policy, the teacher should make alternate arrangements for completing the activity.

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GOING GREEN: A GUIDE TO USING CTE CURRICULUM FOR ENVIRONMENTAL SUSTAINABILITY Many of the Instructional Support Materials (ISMs) are developed to help students organize and use the unpacked content relative to the designated Revised Bloom’s Taxonomy (RBT) verb. These are designed to help students study and retain relevant information. Ideally, each ISM would be duplicated and handed to students in class. Realistically, teachers may have to find alternative approaches for implementing the ISMs in the classroom. Teachers may have to “show” what each ISM looks like and rely on students drawing each in either a journal or on paper that is accumulated in a notebook. Consider these alternative approaches for using the Instructional Support Materials in the classroom:  Draw the ISM on the board.  Duplicate the ISM and hand out one per group and collect at the end of class for use in another. To add longevity, consider laminating or using sleeve protectors for each ISM.  Laminate and have students use dry-erase marker pens if they need to write on the ISM. An alternative would be to place the ISM in a sleeve protector and have the students use dry-erase marker pens.  Prepare a transparency of the ISM and show it on an overhead projector.  Display the file in electronic form (PowerPoint or Word) through a digital projector.  Display the file in electronic form on an interactive whiteboard.  Display the file in electronic form via a document camera and digital projector.  Deliver the file electronically via an internal network, Blackboard, Moodle, or secure website. This would provide added benefit to homebound and absent students needing to make up work. Other helpful conservation hints…  Always use both sides of the paper!!  If a student needs to redo an assignment, whenever possible, have the student use a different color pen or pencil and work on the same paper. We hope these ideas will help conserve paper and other valuable resources!

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OVERVIEW OF CAREER AND TECHNICAL STUDENT ORGANIZATIONS (CTSO)

Introduction Career and Technical Student Organizations provide the opportunity for students to connect to business and industry professionals and career options. Additionally, CTSOs motivate students to higher level academic achievement and build interpersonal and employability skills. CTSOs are co-curricular, meaning they complement the state curricula in the classroom and incorporate realistic educational experiences not available through classroom instruction alone. Teachers must coordinate with local CTE directors to enhance the delivery of state curricula through CTSO activities. Through this coordinated effort, teachers improve student achievement on state and national Career and Technical Education (CTE) accountability measures. The Carl D. Perkins Career and Technical Education Act of 2006 allows CTE directors to fund certain CTSO activities as identified in the 2009 NC CTE Fiscal and Policy Guide.

What are CTSOs? The three components of a quality Career and Technical Education program include classroom instruction, workforce readiness and on-the-job training, and Career and Technical Student Organizations. CTSOs have been a part of Career and Technical Education since the passage of the Smith-Hughes Act of 1917. CTSOs are found in middle and high schools and post-secondary institutions throughout the nation and around the world. It is important to realize that CTSOs are not just “clubs”, but instructional tools that work best when integrated into the curricula. CTSOs:      

Support and enhance related school-based and work-based learning, Provide students with skills and knowledge to succeed in the new global economy, Provide career exploration and competence, Provide students with the opportunity to experience competition related to classroom instruction, Encourage students to experience community service projects, and Provide and enhance the development of leadership skills in students.

Carl D. Perkins Career and Technical Education Act of 2006 Defined “The Carl D. Perkins Career and Technical Education Act of 2006 (Public Law 109-270) is the vehicle through which federal support is distributed to states, local school districts, and postsecondary institutions to develop more fully the academic and technical skills of secondary and postsecondary students who elect to enroll in career and technical educations programs.” (Source: CTSO Guide to accessing Federal Perkins Funds, 2008)

What are the benefits of CTSOs?       

Develop meaningful business partnerships Develop school and community leaders Enable students to achieve high academic and occupational standards Enhance student self-esteem and self-confidence Help students to integrate contextual and academic learning Link school-based learning to the real world of work and family Motivate youth to become better students and productive citizens

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Mission Statement The mission of NC DECA is to enhance the co-curricular education of students who have an interest in marketing, management, and entrepreneurship. DECA seeks to help students develop skills and competence for entrepreneurial, finance, hospitality, management, and marketing careers, build selfesteem, experience leadership, and participate in community service. DECA is committed to the advocacy and the growth of business and education partnerships.

What is NC DECA? North Carolina DECA is the premiere student marketing association. NC DECA is a Career and Technical Student Organization that serves students who are either currently enrolled or have successfully completed at least one Marketing Education course. NC DECA is affiliated with the national organization, DECA, Inc. DECA chapters operate in over 4,000 high schools across the U.S., Puerto Rico, Guam and territories, Mexico, Germany and Canada, with over 180,000 members.  DECA programs are co-curricular, meaning programs complement nationally recognized curriculum standards in the classroom and incorporate real-world educational experiences not available through classroom instruction alone.  The high school division of DECA, Inc. is recognized and endorsed by all 50 State Departments of Education and the U.S. Department of Education.  The principles guiding DECA programs are curriculum related career skills, workplace experiences, community service and the development of business leadership capabilities.

DECA as an Integral Part of the Marketing Education Program The three major components of a Marketing Education program include:  Marketing curriculum  Work-based learning experiences  DECA activities DECA is co-curricular and its activities can be used as teaching tools or to reinforce skills. Integrating DECA into the Ma1rketing Education curriculum can be achieved successfully in many ways for meaningful learning experiences.

DECA Student Membership Benefits  DECA supports students define college and career goals and emphasizes the relevance of academic studies.  DECA promotes free enterprise and entrepreneurship and connects the importance of lifelong learning with success.  DECA directly serves Marketing Education students.  DECA develops leadership skills by offering extensive training opportunities.  DECA offers state, national, and international recognition through competition in 38 occupational areas.  DECA, Inc. awards more than $250,000 in scholarships each year.  DECA’s student membership is a reflection of the nation’s student population.

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DECA Benefits from Business and Industry Participation  A 60-member National Advisory Board provides financial resources and active personnel support.  Thousands of business leaders support local DECA chapters as employers, guest speakers, competitive event judges, and sponsors.  Business leaders serve on local advisory committees.  Business involvement aids local, state, and international members.

Competitive Events DECA offers a comprehensive program of competitive events based on the occupational goals of its student membership and on the activities of chapters in high schools and postsecondary institutions. Competitive events offered by DECA Inc. are replicated at the state or provincial association level as well as at the chapter level.

Purposes of DECA Competitive Events         

Contribute to the development of skills necessary for careers in marketing, management, and entrepreneurship Evaluate student achievement of the skills through careful measurement devices (performance indicators) Provide opportunities for student and team recognition Provide constructive avenues for individual or team expression, initiative, and creativity Motivate students to assume responsibility for self-improvement and self-discipline Provide a vehicle for students to demonstrate (via performance indicators) their acquired skills through individual or team activities Assist students in acquiring a realistic self-concept through individual or team activities Help students participate in an environment of cooperation and competition Provide visibility for the educational goals and objectives of Marketing Education

DECA Websites The North Carolina DECA website: The National DECA website:

www.ncdeca.org www.deca.org

Links to Specific Resources  http://www.deca.org/membershipprocessing.html  This walks you through the online membership submission process and provides needed background information.  http://www.deca.org/pdf/FAQs.pdf  This provides answers to common registration questions.  http://www.deca.org/celisting.html  Complete, up-to-date event guidelines.  This includes a list of all of the competitive events and the guidelines for undertaking them.  Sample exams (Only 10 questions for a representative sample of the exam. The actual exams have 100 questions.)  Sample role-plays for each role-play event.  Abbreviated versions of winning written event manuals.  http://www.schoolbasedenterprises.org  Certification, best practices and help for school-based businesses to provide students real-world experience.  www.deca.org/q&a.html  Down-to-earth answers for down-to-earth questions.  http://www.deca.org/advcornerresources.html  http://www.deca.org/pdf/calendar.pdf  Click on a topic to go to that page of calendar material.  http://www.deca.org/pdf/DECAChapterManagement.pdf  Provides basic background information for most aspects of running a chapter.

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INTEGRATING CTSO COMPETITIVE EVENTS IN CLASSROOM INSTRUCTION Co-curricular methodology of integrating curriculum and CTSO competitive events increases opportunities for student achievement. DECA, the CTSO for Marketing and Entrepreneurship Education students, the comprehensive competitive events framework is aligned with the course adapted blueprint indicators and curriculum guide performance elements and performance indicators. Teachers may facilitate competitive events with their students in the co-curricular classroom. For example, if a student is planning to compete in the Principles of Business Management and Administration (PBM) event, the teacher and student may want to become familiar with the guidelines, performance elements (adapted blueprint indicators), and performance indicators for the PBM event. Competitive event guidelines and performance indicators (performance elements listed within selected event document), sample exams, and sample events are available at http://www.deca.org/competitions/highschool/ . A document titled Connecting DECA’s Competitive Events to Curriculum that entails the comprehensive competitive events and curricular structure is available at http://www.deca.org/_docs/college-career-readyattachments/EventstoCurriculum.pdfs .

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8716 Entrepreneurship I MBA Research and Curriculum Center: Principles of Entrepreneurship

A curriculum development project developed and produced by MBA Research and Curriculum Center® ©2012

Contents Section

1 — Introduction to Principles of Entrepreneurship Course Rationale ..................................................................................... 1-2 Premises of the Curriculum...................................................................... 1-3 Business Administration Curriculum ........................................................ 1-3 Curricular Organization ............................................................................ 1-4 Curriculum Planning Levels ..................................................................... 1-6 Curriculum Frameworks ........................................................................... 1-7

2 — Course Philosophy and Goals Philosophy ............................................................................................... 2-2 Student Organization ............................................................................... 2-2 Goals ........................................................................................................ 2-2

3 — Course Description and Learning Outcomes Course ..................................................................................................... 3-2 Program of Study ..................................................................................... 3-2 Credit........................................................................................................ 3-2 Grade Level ............................................................................................. 3-2 Prerequisites ............................................................................................ 3-2 Admission Requirements ......................................................................... 3-2 Student Characteristics ............................................................................ 3-2 Description ............................................................................................... 3-2 Instructional Strategies ............................................................................ 3-2 Standards of Completion ......................................................................... 3-3 Learning Outcomes.................................................................................. 3-4 Specific Learning Objectives ................................................................. 3-10

4 — Course Outline Introduction .............................................................................................. 4-2 Student Ability Level ................................................................................ 4-2 Instructional Time..................................................................................... 4-2 Career-Technical Student Organization .................................................. 4-2 Course Outline ......................................................................................... 4-3

5 — Planning Guide Sheets ............................................................................. 5-1 6 — Using Project-Based Learning and Projects .......................................... 6-1 Appendices

A — Sample Semester Exams for Principles of Entrepreneurship .......... A-1 B — SCANS Competencies and Skills .......................................................... B-1 C — 21st Century Skills ........................................................................... C-1

Introduction to Principles of Entrepreneurship Section 1

Section 1

Course Rationale

Introduction to Principles of Entrepreneurship

Page 1-2

Although entrepreneurship has occurred throughout history, the attention it currently receives has ballooned in recent years due to environmental shifts in the business world: downsizing, outsourcing, mergers, international competition, world markets, and technological innovations. These changes impact the skills, attitudes, and abilities needed for success in today’s workplace—one created by others or by one’s self. Entrepreneurial career opportunities can be found in domestic and international businesses, organizations, offices, and agencies of all types and sizes—both profit and nonprofit. Entrepreneurial start-ups are expected to continue at a consistent, and at times, frantic pace. Since more people that ever before are starting their own businesses, educational institutions, including colleges/universities, community colleges, and high schools, encourage the study of “entrepreneurship” through the addition of entrepreneurship courses, programs of study, and majors. At the high-school level, entrepreneurship is offered through a school’s marketing and/or business department. But, what is entrepreneurship? Its definition varies from source to source. Some focus on development of an entrepreneurial mindset or spirit that would enable students to think creatively, make decisions, and solve problems. Others approach the study of entrepreneurship from the viewpoint of business or product idea creation, while others incorporate small-business management strategies and techniques. Common themes found in its definitions include:  Vision: The ability to see opportunities in problems  Calculated risk taking: Careful determination of whether risks are worth pursuing  Persuasiveness: The ability to convince others of a vision’s viability and potential for success  Aggregation: The pulling together and use of resources to accomplish a vision For curricular purposes, MBAResearch defines entrepreneurship as the process of creating a business vision through calculated risk taking, persuasiveness, and aggregation of resources. Thus, the curriculum will incorporate ideation, business planning, and business operations. Entrepreneurial success hinges on the abilities to recognize opportunities and to act on them. Skills needed for entrepreneurial success include, but are not limited to, determination of customer needs, identification of markets, use of marketing research, identification of sources of capital to finance the business, and management skills.

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Premises of the Curriculum

The Principles of Entrepreneurship curriculum was developed with certain premises in mind. We believe the curriculum should:

Business Administration Curriculum

The business administration curricular structure consists of four tiers of specificity: Business Administration Core, Cluster Core, Pathways, and Specialties. The content of the broad-based Business Administration Core is fundamental to an understanding of business and can be viewed as co-requisites and as prerequisites for the Principles of Entrepreneurship course.

Business Administration Core

The content of the Business Administration Core should be mastered in order for cluster-specific content to have relevance to student learning. There are 13 Business Administration instructional areas: Business Law, Communications, Customer Relations, Economics, Emotional Intelligence, Entrepreneurship, Financial Analysis, Human-Resources Management, Information Management, Marketing, Operations, Professional Development, and Strategic Management.

Cluster Core

The Cluster Core tier represents the skills and knowledge that were identified as common across the Pathways in a cluster. For example, the Marketing Cluster Core is composed of seven instructional areas: Channel Management, MarketingInformation Management, Market Planning, Pricing, Product/Service Management, Promotion, and Selling.

Pathways

The Pathways tier addresses the content of a variety of broad-based occupational opportunities within a cluster. In the Business Management and Administration Cluster, for instance, the skills and knowledge that are common across jobs in management appear in the General Management Pathway.

Specialties

The fourth tier, Specialties, focuses on specific job opportunities that are tied to a pathway. The job opportunities identified in the Specialties require knowledge and skills unique to a product or service. In Marketing, for example, Specialties for the Professional Selling Pathway include pharmaceutical sales, advertising sales, heavy-equipment sales, and medical-equipment sales.

 Encourage students to think critically about the business world  Stress the integration of and articulation with academics such as language arts, mathematics, and social studies  Provide a foundation to support advanced study in entrepreneurship  Enable students to acquire broad understandings of and skills in entrepreneurship  Enable students to understand and use technology to perform entrepreneurial activities  Stress the importance of interpersonal skills in diverse societies  Foster a realistic understanding of business creation and operation  Foster an understanding and appreciation of business ethics  Utilize a variety of types of interactions with the business community

Thus, the business administration curriculum can be viewed as a continuum that begins in the primary grades with career awareness and exploration and continues through postsecondary education with the emphasis becoming more specialized to the learner’s individual interest in business. The graph depicting the relationship among the four tiers is shown in Figure 1.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Figure 1. Relationship of Tiers

Cluster Core

Curricular Organization

Knowledge and Skill Statements

Within each tier, the curricular content has been organized into Knowledge and Skill Statements, Performance Elements, and Performance Indicators. The Knowledge and Skill Statements are broad-based content standards. They identify what students should know and be able to do as a result of instruction in any of the business-related clusters. These statements encapsulate the overarching intent/purpose of a work function. The Knowledge and Skill Statements identified for the Business Administration Core are: Business Law: Understands business’s responsibility to know, abide by, and enforce laws and regulations that affect business operations and transactions Communication Skills: Understands the concepts, strategies, and systems used to obtain and convey ideas and information Customer Relations: Understands the techniques and strategies used to foster positive, ongoing relationships with customers Economics: Understands the economic principles and concepts fundamental to business operations Emotional Intelligence: Understands techniques, strategies, and systems used to foster self-understanding and enhance relationships with others Entrepreneurship: Understands the concepts, processes, and skills associated with identifying new ideas, opportunities, and methods and with creating or starting a new project or venture Financial Analysis: Understands tools, strategies, and systems used to maintain, monitor, control, and plan the use of financial resources Human Resource Management: Understands the tools, techniques, and systems that businesses use to plan, staff, lead, and organize human resources Information Management: Understands tools, strategies, and systems needed to access, process, maintain, evaluate, and disseminate information to assist business decision-making

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Marketing: Understands the tools, techniques, and systems that businesses use to create exchanges and satisfy organizational objectives Operations: Understands the processes and systems implemented to monitor, plan, and control the day-to-day activities required for continued business functioning Professional Development: Understands concepts, tools, and strategies used to explore, obtain, and develop in a business career Strategic Management: Understands tools, techniques, and systems that affect a business’s ability to plan, control, and organize an organization/department

Performance Elements

Each Knowledge and Skill Statement is composed of multiple Performance Elements. These statements are broad-based work or cognitive performances that aid in defining the Knowledge and Skill Statements. The Performance Elements addressed in this course are: Business Law Acquire foundational knowledge of business laws and regulations to understand their nature and scope. Acquire knowledge of business ownership to establish and continue business operations. Communication Skills Write internal and external business correspondence to convey and obtain information effectively. Economics Understand economic systems to be able to recognize the environments in which businesses function. Emotional Intelligence Apply ethics to demonstrate trustworthiness. Entrepreneurship Employ entrepreneurial discovery strategies to generate feasible ideas for business ventures/products. Develop concept for new business venture to evaluate its success potential. Information Management Acquire information to guide business decision-making. Operations Implement expense-control strategies to enhance a business’s financial wellbeing. Professional Development Utilize critical-thinking skills to determine best options/outcomes. Participate in career-planning to enhance job-success potential. Strategic Management Utilize planning tools to guide organization’s/department’s activities. Channel Management Acquire foundational knowledge of channel management to understand its role in marketing. Manage channel activities to minimize costs and to determine distribution strategies.

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Market Planning Develop marketing strategies to guide marketing tactics. Select a target market appropriate for venture/product to obtain the best return on marketing investment (ROMI). Employ marketing-information to develop a marketing plan. Pricing Develop a foundational knowledge of pricing to understand its role in marketing. Employ pricing strategies to determine optimal prices. Product/Service Management Acquire a foundational knowledge of product/service management to understand its nature and scope. Generate venture/product ideas to contribute to ongoing business success. Employ product-mix strategies to meet customer expectations. Position venture/product to acquire desired business image. Promotion Acquire a foundational knowledge of promotion to understand its nature and scope. Understand promotional channels used to communicate with targeted audiences. Manage promotional activities to maximize return on promotional investments.

Performance Indicators

Performance Elements are defined through Performance Indicators that are specific work-based actions—either knowledge or skills. They specify what an individual worker must know or be able to do to achieve the Performance Elements. For example, the Performance Indicators for Channel Management’s Performance Element—Acquire foundational knowledge of channel management to understand its role in marketing—are: Explain the nature and scope of channel management (CM:001, CM LAP 2) (CS) Explain the relationship between customer service and channel management (CM:002) (CS) Explain the nature of channels of distribution (CM:003, CM LAP 1) (CS) Describe the use of technology in the channel management function (CM:004) (CS) Explain legal considerations in channel management (CM:005) (SP) Describe ethical considerations in channel management (CM:006) (SP)

Curriculum Planning Levels

Each performance indicator is assigned to one of six curriculum-planning levels that represent a continuum of instruction ranging from simple to complex. The levels can serve as building blocks for curriculum development in that students should know and be able to perform the performance indicators at one level before tackling more complex skills and knowledge at the next level. The levels can also be used as the basis for developing an unduplicated sequence of instruction for articulation between high school and postsecondary business courses. In these cases, instructors can agree as to how far along the continuum students will advance in high school so that postsecondary instructors can initiate instruction at that point in the continuum. This will enable students to focus on new, more advanced subject matter rather than on content previously mastered. The curriculum-planning level for each performance indicator is referenced on the planning guide sheets found in Section 5. The six curriculum-planning levels are described as follows: Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Prerequisite (PQ)

Content develops employability and job-survival skills and concepts, including work ethics, personal appearance, and general business behavior.

CareerSustaining (CS)

Content develops skills and knowledge needed for continued employment in or study of business based on the application of basic academics and business skills.

Specialist (SP)

Content provides in-depth, solid understanding and skill development in all business functions.

Supervisor (SU)

Content provides the same in-depth, solid understanding and skill development in all business functions as in the specialist curriculum, and in addition, incorporates content that addresses the supervision of people.

Manager (MN)

Content develops strategic decision-making skills in all business functions needed to manage a business or department within an organization.

Owner (ON)

Content develops strategic decision-making skills in all aspects of business that are needed to own and operate a business.

Curriculum Frameworks

In general, a framework is a skeleton structure that supports or encloses something. In education, frameworks are used to support and enclose the curriculum of a discipline by defining the discipline’s main elements, thereby providing a big picture overview of the discipline’s curriculum. They can act as gatekeepers by helping educators and curriculum developers make decisions about what should be addressed or eliminated from consideration in a curriculum. Once educators have determined what content should be addressed, they can use the scaffolding that frameworks provide as a basis around which curricular content is developed, organized, and implemented. Its visual presentation, or schematic, can serve as a communications tool to share with those interested in a discipline. It quickly communicates the main topics or areas of instruction that will be addressed. In the Principles of Entrepreneurship course, nine of the 13 Business Administration Core’s Knowledge and Skills Statements are addressed. The titles for each of the Knowledge and Skill Statements from the entire Business Administration Core are depicted in the schematic in Figure 2. The schematic also shows that the study of business integrates academic concepts from Language Arts, Mathematics, Social Sciences, and Social Studies. The successful application of these academic skills is imperative for obtaining a business career and advancing in business.

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Figure 2: Schematic of Curriculum Framework for the Business Administration Core

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Course Philosophy and Goals Section 2

Section 2

Philosophy

Course Philosophy and Goals

Page 2-2

Principles of Entrepreneurship should introduce students to the dynamic processes involved in opening, managing, and growing a small business. The course should provide core content applicable to all entrepreneurial ventures regardless of the nature of a business’s product. A primary contributor to course success should be the use of and involvement with the local business community. Putting the activities and projects in the context of the local community should make them real to students, thereby creating student interest in the course. To complete the activities and projects, students should use technological business tools. Tools will be recommended; however, the instructor should modify the activity or project so that the most current, available technology can be used. In addition, this course should integrate academic skills such as writing, reading, communication, and research.

Student Organization

A business-oriented student organization should be an integral part of the Principles of Entrepreneurship course. Through membership in a student organization, students should develop respect for education that contributes to competence in the application of entrepreneurial skills. In addition, membership should promote leadership development and an understanding of the responsibilities of citizens in a market economy.

Goals

The broad goals of the Principles of Entrepreneurship course are to accomplish the following:  Reinforce academic skills in such areas as mathematics, communication, reading, and writing  Encourage innovation, creative thought, problem solving, and decision making  Enable students to understand and appreciate entrepreneurship and its significance in business  Enable students to perform critical marketing/business skills  Stress the importance of calculated risk taking  Encourage ongoing planning and analysis throughout a business’s existence  Stimulate student interest in entrepreneurship  Increase student awareness of the increasingly complex business world  Assist students in developing appropriate attitudes about business  Encourage the use of technology in classroom projects  Assist students in enhancing their teamwork skills  Stimulate reflection on processes, performance, and outcomes

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Course Description and Learning Outcomes Section 3

Section 3

Course Description and Learning Outcomes

Page 3-2

Course

Principles of Entrepreneurship

Program of Study

Principles of Entrepreneurship is the fourth technical course in the MBAResearch Entrepreneurship Program of Study.

Credit

One unit

Grade Level

11

Prerequisites

To enroll in Principles of Entrepreneurship, students must have successfully completed Business and Marketing Essentials, which is the tenth-grade technical course in the MBAResearch Entrepreneurship Program of Study. In addition, the two ninth-grade courses in the Entrepreneurship Program of Study—Leadership and Personal Finance—are strongly recommended as prerequisites. Principles of Entrepreneurship moves quickly, briefly reviewing some concepts addressed in Leadership, Personal Finance, and Business and Marketing Essentials. If students have not had those courses, they will need to work individually to obtain a thorough understanding of the reviewed concepts.

Admission Requirements

Admission to the course should be open to all students who are interested in becoming an entrepreneur. Students with special needs should be admitted to the course after an individual educational plan (IEP) has been prepared. The course instructor should have input into the prescription process.

Student Characteristics

Students in Principles of Entrepreneurship represent a cross section of the student body in terms of gender, race, handicap, and academic ability. Students are 16- to 18-years old and have an interest in entrepreneurship.

Description

Principles of Entrepreneurship introduces students to a wide array of entrepreneurial concepts and skills, including the role of entrepreneurship in our economy, entrepreneurial discovery processes, ideation, and preliminary start-up venture planning. Students also develop an appreciation for marketing’s pivotal role in the development and success of a new business. They become acquainted with channel management, pricing, product/service management, and promotion. Students conduct thorough market planning for their ventures: selecting target markets; conducting market, SWOT, and competitive analyses; forecasting sales; setting marketing goals and objectives; selecting marketing metrics; and setting a marketing budget. The capstone activity in the course is the development of detailed marketing plans for students’ start-up businesses.

Instructional Strategies

To encourage immediate excitement about a future in entrepreneurship, Principles of Entrepreneurship utilizes project-based learning for content delivery as well as traditional classroom instructional methods. Throughout the course, students work individually and in teams to conduct primary and secondary research to obtain the necessary knowledge required to plan their own new business ventures. The course content is sequenced to that end in Sections 4 and 5 of the curriculum guide. In addition, two shorter stand-alone projects can be found in Section 6, along with information about using project-based learning as an instructional method.

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Course Description and Learning Outcomes

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A variety of additional instructional strategies should be utilized to deliver instruction effectively. Examples of these instructional strategies include, but are not limited to, small- and large-group activities, discussions, brainstorming, oral and written reports, online research, and community/school interactions. Use of instructional aids such as presentation software programs/transparencies, handouts, videotapes/DVDs, Internet access, CD-ROMs, and guest speakers is recommended.

Standards of Completion

Instructors should use formative and summative tests to evaluate student progress. Objective tests should be used for quizzes and end-of-semester testing. Two sample semester exams, complete with descriptive answer keys, appear in Appendix A. Remedial activities should be planned and provided for students who do not meet the mastery level designated by the instructor. Successful completion of Principles of Entrepreneurship requires mastery of all learning outcomes identified in the course outline.

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Course Description and Learning Outcomes

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Instructional Area

BUSINESS LAW

Performance Element

Acquire foundational knowledge of business laws and regulations to understand their nature and scope.

Performance Indicators

Describe legal issues affecting businesses (BL:001) (SP)

Performance Element

Acquire knowledge of business ownership to establish and continue business operations.

Performance Indicators

Select form of business ownership (BL:006, BL LAP 2) (ON)

Instructional Area

COMMUNICATION SKILLS

Performance Element

Write internal and external business correspondence to convey and obtain information effectively.

Performance Indicators

Write inquiries (CO:040) (CS)

Instructional Area

ECONOMICS

Performance Element

Understand economic systems to be able to recognize the environments in which businesses function.

Performance Indicators

Identify the impact of small business/entrepreneurship on market economies (EC:065) (CS)

Instructional Area

EMOTIONAL INTELLIGENCE

Performance Element

Apply ethics to demonstrate trustworthiness.

Performance Indicators

Assess risks of personal decisions (EI:091) (PQ) Take responsibility for decisions and actions (EI:075) (PQ) Develop tolerance for ambiguity (EI:092) (CS)

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Course Description and Learning Outcomes

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Instructional Area

ENTREPRENEURSHIP

Performance Element

Employ entrepreneurial discovery strategies to generate feasible ideas for business ventures/products.

Performance Indicators

Explain the need for entrepreneurial discovery (EN:001) (ON) Discuss entrepreneurial discovery processes (EN:002) (ON) Assess global trends and opportunities for business ventures/products (EN:003) (ON) Determine opportunities for venture/product creation (EN:004) (ON) Assess opportunities for venture/product creation (EN:005) (ON) Generate venture/product ideas (EN:006) (ON) Determine feasibility of venture/product ideas (EN:038) (ON)

Performance Element

Develop concept for new business venture to evaluate its success potential.

Performance Indicators

Describe entrepreneurial planning considerations (EN:007) (ON) Explain tools used by entrepreneurs for venture planning (EN:008) (ON) Assess start-up requirements (EN:009) (ON) Assess risks associated with venture (EN:010) (ON)

Instructional Area

INFORMATION MANAGEMENT

Performance Element

Acquire information to guide business decision-making.

Performance Indicators

Identify sources of business start-up information (MN:187) (SP) Conduct an environmental scan to obtain business information (NF:015, NF LAP 2) (SP)

Instructional Area

OPERATIONS

Performance Element

Implement expense-control strategies to enhance a business’s financial wellbeing.

Performance Indicators

Explain the nature of overhead/operating costs (OP:024) (SP)

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Course Description and Learning Outcomes

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Instructional Area

PROFESSIONAL DEVELOPMENT

Performance Element

Utilize critical-thinking skills to determine best options/outcomes.

Performance Indicators

Demonstrate appropriate creativity (PD:012, QS LAP 5) (SP)

Performance Element

Participate in career-planning to enhance job-success potential.

Performance Indicators

Explain career opportunities in entrepreneurship (PD:066, PD LAP 4) (CS) Conduct self-assessment to determine entrepreneurial potential (PD:067) (CS)

Instructional Area

STRATEGIC MANAGEMENT

Performance Element

Utilize planning tools to guide organization’s/department’s activities.

Performance Indicators

Develop company goals/objectives (SM:008) (ON) Define business mission (SM:009) (ON)

Instructional Area

CHANNEL MANAGEMENT

Performance Element

Acquire foundational knowledge of channel management to understand its role in marketing.

Performance Indicators

Explain the nature and scope of channel management (CM:001, CM LAP 2) (CS) Explain the nature of channels of distribution (CM:003, CM LAP 1) (CS)

Performance Element

Manage channel activities to minimize costs and to determine distribution strategies.

Performance Indicators

Select channels of distribution (CM:010) (MN)

Instructional Area

MARKET PLANNING

Performance Element

Develop marketing strategies to guide marketing tactics.

Performance Indicators

Explain the concept of marketing strategies (MP:001, MP LAP 2) (CS)

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Course Description and Learning Outcomes

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Instructional Area

MARKET PLANNING (cont’d)

Performance Element

Select a target market appropriate for venture/product to obtain the best return on marketing investment (ROMI).

Performance Indicators

Explain the concept of market and market identification (MP:003; IM LAP 9, MP LAP 3) (CS) Identify market segments (MP:004) (MN) Select a target market (MP:005) (MN)

Performance Element

Employ marketing-information to develop a marketing plan.

Performance Indicators

Explain the nature of marketing plans (MP:007, MP LAP 1) (SP) Explain the role of situation analysis in the marketing planning process (MP:008) (SP) Conduct market analysis (market size, area, potential, etc.) (MP:009) (MN) Conduct SWOT analysis for use in the marketing planning process (MP:010, IM LAP 8) (MN) Conduct competitive analysis (MP:012) (MN) Explain the nature of sales forecasts (MP:013) (SP) Forecast sales for marketing plan (MP:014) (MN) Set marketing goals and objectives (MP:015) (MN) Select marketing metrics (MP:016) (MN) Set marketing budget (MP:017) (MN) Develop marketing plan (MP:018) (MN)

Instructional Area

PRICING

Performance Element

Develop a foundational knowledge of pricing to understand its role in marketing.

Performance Indicators

Explain the nature and scope of the pricing function (PI:001, PI LAP 2) (SP) Explain factors affecting pricing decisions (PI:002, PI LAP 3) (SP)

Performance Element

Employ pricing strategies to determine optimal prices.

Performance Indicators

Determine cost of product (breakeven, ROI, markup) (PI:019) (MN) Calculate break-even point (PI:006, PI LAP 4) (MN) Set prices (PI:007) (MN)

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Course Description and Learning Outcomes

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Instructional Area

PRODUCT/SERVICE MANAGEMENT

Performance Element

Acquire a foundational knowledge of product/service management to understand its nature and scope.

Performance Indicators

Explain the nature and scope of the product/service management function (PM:001, PM LAP 17) (SP)

Performance Element

Generate venture/product ideas to contribute to ongoing business success.

Performance Indicators

Identify methods/techniques to generate a venture/product idea (PM:127, PM LAP 11) (SP)

Performance Element

Employ product-mix strategies to meet customer expectations.

Performance Indicators

Explain the concept of product mix (PM:003, PM LAP 3) (SP) Identify product to fill customer need (PM:130) (MN) Plan product mix (PM:006) (MN) Determine services to provide customers (PM:036) (MN)

Performance Element

Position venture/product to acquire desired business image.

Performance Indicators

Describe factors used by marketers to position ventures/products (PM:042) (SP) Identify company’s unique selling proposition (PM:272) (MN) Choose venture/product name (PM:131) (ON) Select business location (PM:132) (ON)

Instructional Area

PROMOTION

Performance Element

Acquire a foundational knowledge of promotion to understand its nature and scope.

Performance Indicators

Explain the role of promotion as a marketing function (PR:001, PR LAP 2) (CS) Explain the types of promotion (PR:002, PR LAP 4) (CS) Identify the elements of the promotional mix (PR:003, PR LAP 1) (SP)

Performance Element

Understand promotional channels used to communicate with targeted audiences.

Performance Indicators

Explain types of advertising media (PR:007, PR LAP 3) (SP)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 3

Course Description and Learning Outcomes

Instructional Area

PROMOTION (cont’d)

Performance Element

Manage promotional activities to maximize return on promotional investments.

Performance Indicators

Develop promotional plan for a business (PR:097) (MN)

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Section 3

Course Description and Learning Outcomes

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Introduction

To aid with instructional planning, a listing of supporting objectives for each of the performance indicators is provided. The performance indicators are sequenced by instructional area and are not intended to provide instructional sequence for the course. That information is found in Section 4 of the course guide.

Instructional Area

BUSINESS LAW

Performance Indicator and Objectives

Describe legal issues affecting businesses (BL:001) (SP) a. Define the following terms: contract law, sales law, property law, intellectual property and computer law, bankruptcy law, and tax law. b. Identify types of laws that affect businesses. c. Explain the purpose of contract law. d. Describe the purpose of sales law. e. Discuss the purpose of property law to businesses. f. Explain the intent of intellectual property and computer law. g. Describe the purpose of bankruptcy law. h. Explain the purpose of tax law. i. Explain reasons that businesses are regulated.

Performance Indicator and Objectives

Select form of business ownership (BL:006, BL LAP 2) (ON) a. Describe the advantages and disadvantages of sole proprietorships. b. Describe the advantages and disadvantages of partnerships. c. Discuss the advantages and disadvantages of corporations. d. Explain the advantages and disadvantages of hybrid forms of business ownership. e. Explain factors that affect the choice of ownership form. f. Demonstrate procedures for selecting a form of business ownership.

Instructional Area

COMMUNICATION SKILLS

Performance Indicator and Objectives

Write inquiries (CO:040) (CS) a. Define the term inquiries. b. Identify occasions when inquiries are written by businesses. c. Describe the importance of writing inquiries. d. Demonstrate procedures for writing inquiries.

Instructional Area

ECONOMICS

Performance Indicator and Objectives

Identify the impact of small business/entrepreneurship on market economies (EC:065) (CS) a. Define the terms small business and entrepreneurship. b. Explain the relationship between small business and entrepreneurship. c. Describe barriers to small business/entrepreneurial success. d. Discuss reasons for the growth of small business. e. Identify ways that small business has contributed to society.

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Course Description and Learning Outcomes

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Instructional Area

EMOTIONAL INTELLIGENCE

Performance Indicator and Objectives

Assess risks of personal decisions (EI:091) (PQ) a. Define the term risk. b. Explain the importance of assessing risks when making personal decisions. c. Identify types of risks that individuals may face as a result of personal decisions (e.g., human, operational, reputational, financial, etc.). d. Discuss factors impacting risk assessments (e.g., perception, emotions, known information, etc.). e. Describe factors to consider when assessing risks (e.g., time, probability, magnitude, cost vs. benefit, physical distance, personal distance, etc.). f. Identify steps in assessing the risks of personal decisions. g. Demonstrate processes used to assess risks of personal decisions.

Performance Indicator and Objectives

Take responsibility for decisions and actions (EI:075) (PQ) a. Explain benefits of taking responsibility for decisions and actions. b. Describe negative consequences of failing to accept responsibility for decisions and actions. c. Identify behaviors and traits needed to accept responsibility for decisions and actions. d. Identify steps in accepting responsibility for decisions and actions. e. Demonstrate processes used to take responsibility for decisions and actions.

Performance Indicator and Objectives

Develop tolerance for ambiguity (EI:092) (CS) a. Define the terms tolerance and ambiguity. b. Explain the importance of developing a tolerance for ambiguity. c. Describe the role of a tolerance for ambiguity in problem-solving. d. Discuss factors impacting an individual’s ability to develop a tolerance for ambiguity (e.g., self-confidence, optimism, education, career experiences, etc.). e. Identify methods used to develop a tolerance for ambiguity. f. Demonstrate a tolerance for ambiguity.

Instructional Area

ENTREPRENEURSHIP

Performance Indicator and Objectives

Explain the need for entrepreneurial discovery (EN:001) (ON) a. Define the term entrepreneurial discovery. b. Explain the contributions of entrepreneurial discovery to society (e.g., more efficient use of resources, increased productivity, etc.). c. Identify changes that encourage entrepreneurial discovery (e.g., technological changes, political changes, legal changes, regulatory changes, social changes, and demographic changes).

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 3

Course Description and Learning Outcomes

Page 3-12

Instructional Area

ENTREPRENEURSHIP (cont’d)

Performance Indicator and Objectives

Discuss entrepreneurial discovery processes (EN:002) (ON) a. Discuss differences between entrepreneurs and non-entrepreneurs that can aid entrepreneurs in perceiving opportunities (e.g., life experiences, a person’s position in a social network, the nature of the search process a person uses, an individual’s ability to focus on the opportunities, and intelligence). b. Distinguish between scientific discovery (when a physical or technological observation is made) and circumstantial discovery (when an observation is made based on specific knowledge of time, place, or circumstance). c. Describe areas of entrepreneurial discovery (i.e., introduction of a new product or a new quality of product, introduction of a new production method, a new market, a new vendor and/or resource source, and the reorganization of an industry). d. Explain techniques that entrepreneurs can use to recognize opportunities (e.g., analogies, pattern recognition, experiments, simulation of prototypes. reverse engineering, etc.). e. Discuss ways that entrepreneurs try to distinguish themselves from their competitors. f. Discuss stages of entrepreneurial processes (i.e., discovery, evaluation, and exploitation).

Performance Indicator and Objectives

Assess global trends and opportunities for business ventures/products (EN:003) (ON) a. Identify sources of information about global trends and opportunities for business ventures/products (e.g., newspapers, trade publications, research institutes, travel, trade shows, etc.). b. Determine current global trends (e.g., macroeconomic, industry, technological, political, legal, regulatory, social, demographic, etc.) and opportunities for business ventures/products. c. Evaluate the potential of global trends and opportunities for business ventures/products.

Performance Indicator and Objectives

Determine opportunities for venture/product creation (EN:004) (ON) a. Distinguish between outside-in and inside-out analyses used to identify opportunities for business ventures. b. Discuss ways in which work experience can help an entrepreneur to identify opportunities for venture/product creation. c. Describe the impact of educational background on an entrepreneur’s determination of opportunities for venture/product creation. d. Explain the importance of considering personal interests when determining opportunities for venture/product creation. e. Explain ways in which experiences as a retail or industrial customer can be used to identify venture/product opportunities. f. Demonstrate methods used to determine opportunities for venture/product creation.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 3

Course Description and Learning Outcomes

Page 3-13

Instructional Area

ENTREPRENEURSHIP (cont’d)

Performance Indicator and Objectives

Assess opportunities for venture/product creation (EN:005) (ON) a. Discuss the importance of determining if opportunities for venture/product creation address specific unmet needs or problems. b. Explain reasons to analyze the entrepreneur and his/her team when assessing opportunities for venture/product creation. c. Describe reasons to consider needed resources when assessing opportunities for venture/product creation. d. Explain the need to examine market structure when assessing opportunities for venture/product creation. e. Explain the importance of evaluating market timing when assessing opportunities for venture/product creation. f. Discuss techniques that entrepreneurs use to assess venture/product opportunities. g. Demonstrate processes used to assess opportunities for venture/product creation.

Performance Indicator and Objectives

Generate venture/product ideas (EN:006) (ON) a. Identify purposes of idea-generating methods/techniques. b. Discuss advantages/disadvantages of idea-generating methods/techniques. c. Explain the role of a facilitator in generating venture/product ideas. d. List questions to ask to facilitate idea generation. e. Implement methods/techniques to generate venture/product ideas.

Performance Indicator and Objectives

Determine feasibility of venture/product ideas (EN:038) (ON) a. Define the term feasibility study. b. Explain the purpose of conducting a feasibility study. c. Discuss benefits associated with conducting a feasibility study. d. Describe reasons for not conducting a feasibility study. e. Identify market considerations that should be analyzed when conducting a feasibility study. f. Explain technical considerations that should be analyzed when conducting a feasibility study. g. Discuss financial considerations that should be analyzed when conducting a feasibility study. h. Describe organizational/managerial considerations that should be analyzed when conducting a feasibility study. i. Explain competitive considerations that should be analyzed when conducting a feasibility study. j. Discuss characteristics of a well-conducted feasibility study. k. Identify possible courses of action that could be taken following a feasibility study. l. Demonstrate procedures for determining the feasibility of a venture/product idea.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 3

Course Description and Learning Outcomes

Page 3-14

Instructional Area

ENTREPRENEURSHIP (cont’d)

Performance Indicator and Objectives

Describe entrepreneurial planning considerations (EN:007) (ON) a. Distinguish among types of entrepreneurial planning (e.g., strategic, operational, etc.). b. Identify areas of focus during entrepreneurial planning (e.g., operations, finance, law, regulations, etc.). c. Explain issues relating to time commitment that an entrepreneur must consider when planning for the realization of his/her new venture. d. Describe product considerations that impact entrepreneurial planning. e. Discuss operational issues that entrepreneurs must consider when planning their businesses (e.g., method of production, etc.). f. Describe the impact that the proposed size of the business has on entrepreneurial planning. g. Describe common financial considerations that entrepreneurs must address when planning for their new venture/product. h. Explain legal and regulatory issues to consider during entrepreneurial planning. i. Discuss considerations involving competitors and the market that an entrepreneur must focus on when planning his/her new business. j. Explain the importance of flexibility when planning a new business venture.

Performance Indicator and Objectives

Explain tools used by entrepreneurs for venture planning (EN:008) (ON) a. Explain the use of a business plan for venture planning and development. b. Describe ways in which a mission statement can facilitate venture planning. c. Discuss the role of financial forecasting and budgeting in venture planning. d. Identify internal and external analysis tools used for venture planning (e.g., SWOT analysis, market analysis, environmental scan, competitive analysis, sensitivity analysis, etc.). e. Explain the advantages and disadvantages of different strategic planning approaches (e.g., opportunity management approach, milestone planning approach, entrepreneurial strategy matrix, multistage contingency approach, etc.). f. Describe technology used for venture planning (e.g., business planning software, bookkeeping software, budgeting software, financial analysis software, etc.).

Performance Indicator and Objectives

Assess start-up requirements (EN:009) (ON) a. Explain startup cost categories (e.g., cost of sales, professional fees, technology costs, administrative costs, sales and marketing costs, wages and benefits). b. Estimate the cost of sales for the new venture (e.g., inventory, raw materials, equipment, etc.). c. Identify and assess professional fees for the new venture (e.g., legal costs, patents, trademarks, etc.). d. Estimate technology costs for the business start-up (e.g., computer hardware and software, Internet access, printers, servers, etc.). e. Approximate administrative costs for the new business (e.g., insurance, furniture, facility, utilities, business permits/licenses, etc.) f. Assess anticipated sales and marketing costs (e.g., advertising, trade association membership fees, trade show attendance, marketing materials, etc.). g. Estimate overall wages and benefits for the venture’s human resources (e.g., salaries, workers’ compensation, payroll taxes, employee benefits, etc.). Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 3

Instructional Area Performance Indicator and Objectives

Course Description and Learning Outcomes

Page 3-15

ENTREPRENEURSHIP (cont’d) Assess risks associated with venture (EN:010) (ON) a. Identify forms of risk associated with new ventures (e.g., industry risk, market risk, product risk, financial risk, management/decision risk, career risk, emotional risk, etc.). b. Describe types of industry risk (e.g., complex industry, over-served industry, failing industry, difficult suppliers, etc.). c. Explain assorted market risks (e.g., competition, ineffectiveness of marketing model, slow market acceptance, etc.). d. Describe product risks affecting a new venture (e.g., difficulties in transforming idea into market-ready product, etc.). e. Explain financial risks usually associated with start-up ventures (e.g., loss of capital, uncertain income, inflation, economic downturns, changes in interest rates, higher costs, bankruptcy, etc.). f. Explain ways in which a business’s management can create risk for a new venture. g. Describe career risks associated with starting a new business (e.g., unemployment, business failure, etc.). h. Discuss emotional risks that entrepreneurs face (e.g., marital strain, family problems, etc.). i. Demonstrate processes for assessing risks associated with a new venture.

Instructional Area

INFORMATION MANAGEMENT

Performance Indicator and Objectives

Identify sources of business start-up information (MN:187) (SP) a. Explain the value of obtaining business start-up information. b. Describe types of business start-up information. c. Identify government sources of business start-up information. d. Identify online sources of business start-up information. e. Identify professional services that provide assistance with business start-up. f. Identify trade associations/professional organizations that provide business start-up information.

Performance Indicator and Objectives

Conduct an environmental scan to obtain business information (NF:015, NF LAP 2) (SP) a. Define the term environmental scanning. b. Identify environments that businesses should scan to obtain marketing information. c. Discuss the purpose of environmental scanning. d. Discuss factors involved in conducting an environmental scan (e.g., influencing the demand/need for services [and products], the supply of inputs to the project/organization concerned, the competition and collaboration and general policy factors). e. Explain reasons for conducting an environmental scan. f. Describe tools that are used to conduct environmental scans. g. Discuss the use of environmental scans to facilitate management decision making. h. Demonstrate procedures for conducting an environmental scan.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 3

Course Description and Learning Outcomes

Page 3-16

Instructional Area

OPERATIONS

Performance Indicator and Objectives

Explain the nature of overhead/operating costs (OP:024) (SP) a. Define the following terms: operating expenses, fixed costs, variable costs, semi-variable costs, gross profit, and break-even point. b. Identify types of operating costs. c. Distinguish between fixed and variable costs. d. Explain how a business’s operating expenses affect its profit. e. Describe the relationship between operating expenses and budgets. f. Explain how operating expenses affect the selling price of products.

Instructional Area

PROFESSIONAL DEVELOPMENT

Performance Indicator and Objectives

Demonstrate appropriate creativity (PD:012, QS LAP 5) (SP) a. Define the term creativity. b. Identify personal traits commonly associated with creativity. c. Describe ways in which people can demonstrate creativity. d. Describe specific techniques for developing/enhancing creativity. e. Explain how creativity can be applied beneficially to solve problems. f. Apply creativity to situations.

Performance Indicator and Objectives

Explain career opportunities in entrepreneurship (PD:066, PD LAP 4) (CS) a. Distinguish among entrepreneurs, small-business owners, and managers. b. Identify reasons that people pursue careers as entrepreneurs. c. Explain opportunities that aid people in becoming entrepreneurs. d. Describe trends in entrepreneurship. e. Discuss risks and disadvantages associated with entrepreneurship. f. Identify reasons that business start-ups often fail. g. Explain skills needed for entrepreneurial success. h. Discuss reasons that entrepreneurs need to be aware of industry trends and technological developments. i. Identify professional-development opportunities for entrepreneurs.

Performance Indicator and Objectives

Conduct self-assessment to determine entrepreneurial potential (PD:067) (CS) a. Describe personality traits associated with successful entrepreneurs. b. Explain skills needed for entrepreneurial success. c. Demonstrate procedures for assessing entrepreneurial potential.

Instructional Area

STRATEGIC MANAGEMENT

Performance Indicator and Objectives

Develop company goals/objectives (SM:008) (ON) a. Explain the importance of company goals/objectives. b. Describe ways in which company goals/objectives are used. c. Describe the characteristics of effective objectives. d. Demonstrate how to develop company goals/objectives.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 3

Course Description and Learning Outcomes

Page 3-17

Instructional Area

STRATEGIC MANAGEMENT (cont’d)

Performance Indicator and Objectives

Define business mission (SM:009) (ON) a. Explain reasons for creating a mission statement. b. Identify characteristics of successful mission statements. c. Demonstrate procedures for defining a business’s mission.

Instructional Area

CHANNEL MANAGEMENT

Performance Indicator and Objectives

Explain the nature and scope of channel management (CM:001, CM LAP 2) (CS) a. Define the following terms: channel, channel intensity, channel length, distribution patterns, exclusive distribution, selective distribution, and intensive distribution. b. Explain how channel members add value. c. Discuss channel functions (e.g., information, promotion, contact, matching, negotiation, financing, and risk taking). d. Explain key channel tasks (e.g., marketing, packaging, financing, storage, delivery, merchandising, and personal selling). e. Describe when a channel will be most effective. f. Distinguish between horizontal and vertical conflict. g. Describe channel management decisions (i.e., selecting channel members, managing and motivating channel members, and evaluating channel members). h. Explain channel design decisions (i.e., analyzing customer needs, setting channel objectives, identifying major alternatives—types of intermediaries, number of intermediaries, responsibilities of intermediaries). i. Discuss the relationship between the product being distributed and the pattern of distribution it uses.

Performance Indicator and Objectives

Explain the nature of channels of distribution (CM:003, CM LAP 1) (CS) a. Define the following terms: channels of distribution, producer, ultimate consumer, industrial user, middlemen, intermediaries, retailers, wholesalers, agents, direct channels, and indirect channels. b. Identify types of channel members/intermediaries/middlemen. c. Explain the importance of middlemen in the channel of distribution. d. Describe types of channels for consumer goods and services. e. Describe types of channels for industrial goods and services.

Performance Indicator and Objectives

Select channels of distribution (CM:010) (ON) a. Identify factors that affect the choice of channel of distribution. b. Describe how the following factors affect selection of distribution channels: (1) Nature of product (2) Market size and location (3) Access to channel members c. Explain procedures for selecting channels of distribution. d. Demonstrate procedures for selecting channels of distribution.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 3

Course Description and Learning Outcomes

Page 3-18

Instructional Area

MARKET PLANNING

Performance Indicator and Objectives

Explain the concept of marketing strategies (MP:001, MP LAP 2) (CS) a. Define the following terms: marketing mix, product, place, promotion, price, goals, strategies, and tactics. b. Identify the components of the marketing mix. c. Describe the importance of each of the components of the marketing mix. d. Explain the relationship of goals, strategies, and tactics. e. Describe the importance of marketing strategies. f. Explain the factors that may cause marketing strategies to change. g. Explain the importance of strategies in the marketing mix.

Performance Indicator and Objectives

Explain the concept of market and market identification (MP:003; IM LAP 9, MP LAP 3) (CS) a. Define the following terms: market, target market, mass marketing, marketing segments, market segmentation, demographic segmentation, geographic segmentation, psychographic segmentation, and behavioral segmentation. b. Explain the importance of target markets to businesses. c. Describe advantages and disadvantages of mass marketing. d. Describe advantages and disadvantages of using market segments. e. Explain why the use of market segments is increasing. f. Describe demographic characteristics that are analyzed by marketers. g. Explain the value of geographic segmentation. h. Discuss the value of psychographic segmentation. i. Describe types of behavioral segmentation.

Performance Indicator and Objectives

Identify market segments (MP:004) (MN) a. Explain how product competition is used to define a market. b. Describe how types of customers can be used to define a market. c. Discuss the use of geography to define a market. d. Explain the use of production-distribution systems in market definition. e. Explain the purpose of developing a target-market profile. f. Identify objective terms that can be used to profile a target market. g. Discuss market research techniques that can be used to obtain target market information. h. Identify sources that can be accessed to obtain target-market information. i. Develop a target-market profile. j. Demonstrate procedures for identifying market segments.

Performance Indicator and Objectives

Select a target market (MP:005) (MN) a. Explain reasons to evaluate market segments. b. Identify criteria used to assess attractiveness of market segments. c. Describe factors to consider when assessing the fit between a market segment and a company. d. Explain portfolio matrix approaches used to evaluate market attractiveness. e. List information needed to identify total market potential. f. Identify factors that influence market potential. g. Describe information sources that can be accessed to assist in identifying a total potential market. h. Estimate a segment’s market potential. i. Explain the components of a marketing segmentation analysis. j. Describe implications in selecting global target markets. k. Explain procedures for selecting target markets. l. Demonstrate procedures for selecting a target market. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 3

Course Description and Learning Outcomes

Page 3-19

Instructional Area

MARKET PLANNING (cont’d)

Performance Indicator and Objectives

Explain the nature of marketing plans (MP:007, MP LAP 1) (SP) a. Define the terms marketing plan, situation analysis. b. Explain the benefits associated with having a marketing plan. c. Identify the components of marketing plans. d. Describe the purpose of each component of the marketing plan.

Performance Indicator and Objectives

Explain the role of situation analysis in the marketing-planning process (MP:008) (SP) a. Define the terms business opportunity, business threat, business environment, economic development, technological change, economic change, environmental scanning, and environmental monitoring. b. Explain how environmental threats for one company can represent opportunities for another company. c. Discuss the purpose of environmental scanning and monitoring in situation analysis. d. Explain why businesses should evaluate their internal environments in the context of changes occurring in their external environments.

Performance Indicator and Objectives

Conduct market analysis (market size, area, potential, etc.) (MP:009) (MN) a. Explain the importance of market analysis to the marketing-planning process. b. Identify the components of a market analysis. c. Explain the value of using spreadsheets in target segment analysis. d. Demonstrate procedures for conducting a market analysis.

Performance Indicator and Objectives

Conduct SWOT analysis for use in the marketing-planning process (MP:010, IM LAP 8) (MN) a. Define the term SWOT analysis. b. Explain whom to involve in a SWOT analysis. c. Discuss when a SWOT analysis should be conducted. d. Describe the benefits of conducting a SWOT analysis. e. Identify factors that should be considered in a SWOT analysis. f. Explain procedures for conducting a SWOT analysis. g. Demonstrate procedures for conducting a SWOT analysis for use in marketing planning.

Performance Indicator and Objectives

Conduct competitive analysis (MP:012) (MN) a. Explain benefits of preparing a competitive analysis. b. Identify sources of competitive information. c. Describe components of a competitive analysis. d. Demonstrate procedures for conducting a competitive analysis.

Performance Indicator and Objectives

Explain the nature of sales forecasts (MP:013) (SP) a. Define the following terms: sales forecast, qualitative forecasting, and quantitative forecasting. b. Identify items/factors for which sales forecasts can be used. c. Discuss the time frame of sales forecasts. d. Explain factors affecting how far ahead a business should predict sales. e. Distinguish between qualitative and quantitative forecasting methods. f. Describe factors affecting the sales forecast. g. Explain business activities in which sales forecast information is used as a planning tool. h. Explain reasons that not all businesses use sales forecasts. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 3

Course Description and Learning Outcomes

Page 3-20

Instructional Area

MARKET PLANNING (cont’d)

Performance Indicator and Objectives

Forecast sales for marketing plan (MP:014) (MN) a. Define the following terms: sales forecast, top-down approach, bottom-up approach, jury of executive opinion, Delphi technique, sales force composite, and survey of buyer intentions. b. Describe approaches to forecasting sales. c. Discuss methods of forecasting sales. d. Describe advantages and disadvantages associated with each forecasting method. e. Explain factors that should be considered in choosing a forecasting method. f. Describe external factors that affect sales forecasts. g. Explain internal factors that affect sales forecasts. h. Describe procedures for preparing a sales forecast. i. Demonstrate how to forecast sales.

Performance Indicator and Objectives

Set marketing goals and objectives (MP:015) (MN) a. Discuss the purposes of marketing goals and objectives. b. Explain the relationship between marketing goals and overall business goals. c. Describe characteristics of effectively stated marketing objectives. d. Discuss the relationship between marketing goals and marketing strategies. e. Identify questions to ask to assist in setting marketing goals. f. Demonstrate procedures for setting marketing goals and objectives.

Performance Indicator and Objectives

Select marketing metrics (MP:016) (MN) a. Define the following terms: marketing metrics, marketing dashboard, navigational, and evaluative. b. Explain reasons for selecting and using marketing metrics. c. Distinguish between navigational metrics and evaluative metrics. d. Explain key customer-acquisition metrics (e.g., awareness levels, purchasedecision drives, rate of customer acquisition, market share, acquisition costs, etc.). e. Discuss common customer-retention metrics (e.g., retention rate, abandonment rate, brand loyalty, lifetime value [LTV], etc.). f. Describe common product metrics (e.g., usability, satisfaction versus expectations, first-time user experience, awareness, purchase rate, price, profit impact, etc.). g. Describe key financial metrics (e.g., revenue, gross profit, net profit, return on sales [ROS], return on investment [ROI], return on marketing investment [ROMI], etc.). h. Describe common promotional metrics (e.g., reach, frequency, Gross Rating Points [GRPs], impressions, Cost per Thousand [CPM], coupon redemption rates, costs for coupons and rebates, cost per click, accuracy of coverage, media impressions, etc.). i. Explain pricing metrics (e.g., optimal price, price premium, percent good value, etc.). j. Discuss typical metrics criteria (e.g., business relevance, measurability, controllability, reportability, trackability, etc.). k. Explain the importance of quality, rather than quantity, in a marketing dashboard. l. Describe common methods used to select marketing metrics. m. Demonstrate procedures for selecting marketing metrics.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 3

Course Description and Learning Outcomes

Page 3-21

Instructional Area

MARKET PLANNING (cont’d)

Performance Indicator and Objectives

Set marketing budget (MP:017) (MN) a. Discuss the reasons for establishing marketing budgets. b. Describe ways in which marketing budgets can be used. c. Explain considerations in determining how much to spend on marketing. d. Identify techniques for setting marketing budgets. e. List information sources for industry averages to use in setting marketing budgets. f. Explain the need to prioritize marketing activities when setting marketing budgets. g. Demonstrate procedures for setting a marketing budget.

Performance Indicator and Objectives

Develop marketing plan (MP:018) (MN) a. Explain the importance of a marketing plan. b. Describe needed characteristics of a marketing plan’s content. c. Discuss the need for the compatibility of one part of the plan with all other parts. d. Describe process for developing marketing strategies. e. Explain the role of communication in developing a marketing plan. f. Describe the organization of a marketing plan. g. Explain procedures for developing marketing plans. h. Demonstrate procedures for developing marketing plans.

Instructional Area

PRICING

Performance Indicator and Objectives

Explain the nature and scope of the pricing function (PI:001, PI LAP 2) (SP) a. Describe the characteristics of effective pricing. b. Explain what is being priced when prices are set for products. c. List factors that affect a product’s price. d. Describe how pricing affects product decisions. e. Explain how pricing affects place (distribution) decisions. f. Describe how pricing affects promotion decisions. g. Explain pricing objectives.

Performance Indicator and Objectives

Explain factors affecting pricing decisions (PI:002, PI LAP 3) (SP) a. Define the term selling price. b. Distinguish between price and selling price. c. Describe the importance of selling price. d. Identify factors affecting selling price. e. Explain how consumers can affect selling price. f. Describe how government affects selling price. g. Discuss how competition can affect selling price. h. Explain how the nature of a business can affect selling price. i. Identify pricing objectives. j. Explain how pricing objectives affect selling price.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 3

Course Description and Learning Outcomes

Page 3-22

Instructional Area

PRICING (cont’d)

Performance Indicator and Objectives

Determine cost of product (breakeven, ROI, markup) (PI:019) (MN) a. Define the following terms: break-even, ROI, and markup. b. Explain the role of break-even in determining the cost of product. c. Describe the use of ROI in determining the cost of a product. d. Discuss the use of markup in determining the cost of a product. e. Explain factors to consider in determining the cost of a product. f. Demonstrate procedures for determining the cost of a product.

Performance Indicator and Objectives

Calculate break-even point (PI:006, PI LAP 4) (MN) a. Identify examples of fixed expenses. b. List examples of variable expenses. c. Cite examples of mixed/semivariable expenses. d. Explain the importance of break-even in setting prices. e. Calculate the break-even point for a product in units. f. Calculate the break-even point for a product in dollars.

Performance Indicator and Objectives

Set prices (PI:007) (MN) a. Define the following terms: floors, ceilings, and elasticity. b. Describe the importance of determining pricing floors and ceilings. c. Explain process for setting prices. d. Estimate demand for product. e. Implement process for setting prices.

Instructional Area

PRODUCT/SERVICE MANAGEMENT

Performance Indicator and Objectives

Explain the nature and scope of the product/service management function (PM:001, PM LAP 17) (SP) a. Define the term product/service management. b. Explain who is responsible for managing products/services. c. Describe the benefits of product/service managing. d. Describe the phases of product/service managing. e. Describe factors affecting product/service managing. f. Explain the role product/service management plays in marketing.

Performance Indicator and Objectives

Identify methods/techniques to generate a venture/product idea (PM:127, PM LAP 11) (SP) a. Define the terms attribute listing, lateral thinking, analogies, associations, brainstorming, synectics, sketching and doodling, forced questioning, and morphological analysis. b. Explain the role of criticism in idea creation. c. Describe types of brainstorming techniques. d. Distinguish among free association techniques, forced relations techniques, and analytical techniques used to generate business/product ideas. e. Explain sources of business/product ideas. f. Discuss the importance of evaluating a business owner’s strengths when generating business/product ideas. g. Describe pitfalls to idea identification. h. Discuss the importance of generating business/product ideas. i. Explain methods/techniques used to identify business/product ideas. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 3

Course Description and Learning Outcomes

Page 3-23

Instructional Area

PRODUCT/SERVICE MANAGEMENT (cont’d)

Performance Indicator and Objectives

Explain the concept of product mix (PM:003, PM LAP 3) (SP) a. Define the following terms: product mix, product item, product line, width, depth, consistency, expansion, contraction, alteration, trading up, trading down, and positioning. b. Identify ways in which product lines can be organized. c. Describe product mix dimensions. d. Identify reasons that a business would offer a narrow product mix. e. Identify reasons that a business would offer a broad product mix. f. Identify reasons that a business would offer a deep product mix. g. Identify reasons that a business would offer a shallow product mix. h. Explain the importance of a business’s product mix. i. Describe advantages of expansion product-mix strategies. j. Describe disadvantages of expansion product-mix strategies. k. Describe advantages of contraction product-mix strategies. l. Describe disadvantages of contraction product-mix strategies. m. Describe advantages of alteration product-mix strategies. n. Describe disadvantages of alteration product-mix strategies. o. Describe advantages of trading up product-mix strategies. p. Describe disadvantages of trading up product-mix strategies. q. Describe advantages of trading down product-mix strategies. r. Describe disadvantages of trading down product-mix strategies. s. Describe advantages of positioning product-mix strategies. t. Describe disadvantages of positioning product-mix strategies.

Performance Indicator and Objectives

Identify product to fill customer need (PM:130) (MN) a. Describe reasons for understanding a product’s benefits. b. Discuss ways that a business can use knowledge of product benefits in marketing planning. c. Describe techniques for obtaining customer input on product benefits. d. Demonstrate procedures for identifying product/business to fill customer’s needs.

Performance Indicator and Objectives

Plan product mix (PM:006) (MN) a. Describe considerations in selecting product-mix strategies. b. Identify factors that can minimize costs in developing a product mix. c. Explain guidelines for planning a product mix. d. Demonstrate procedures for planning a product mix.

Performance Indicator and Objectives

Determine services to provide customers (PM:036) (MN) a. Identify services that are provided for customers. b. Discuss reasons for providing services for customers. c. Determine the costs associated with providing services for customers. d. Describe steps for determining specific services to provide customers. e. Demonstrate procedures for determining services to provide customers.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 3

Course Description and Learning Outcomes

Page 3-24

Instructional Area

PRODUCT/SERVICE MANAGEMENT (cont’d)

Performance Indicator and Objectives

Describe factors used by marketers to position ventures/products (PM:042) (SP) a. Define the following terms: competitive advantage and positioning. b. Describe the purpose of positioning. c. Explain the relationship between the target market and positioning. d. Discuss the relationship between the competition and positioning. e. Describe types of positioning strategies (e.g., product attributes, benefits, usage occasions, users, competitive, product classes) f. Discuss how marketing mix elements can be differentiated to position ventures/products.

Performance Indicator and Objectives

Identify company’s unique selling proposition (PM:272) (MN) a. Explain the purpose of a business’s Unique Selling Proposition (USP). b. Discuss the importance of always fulfilling a business’s USP. c. List questions to ask to facilitate creation of a business’s USP. d. Explain ways that a business can integrate its USP into its marketing efforts. e. Demonstrate procedures for determining a business’s USP.

Performance Indicator and Objectives

Choose venture/product name (PM:131) (ON) a. Explain the significance of a business’s/product’s name. b. Identify methods for selecting business/product names. c. Describe characteristics frequently associated with successful business/ product names. d. Explain legal considerations in business/product-name selection. e. Demonstrate procedures for choosing a business/product name.

Performance Indicator and Objectives

Select business location (PM:132) (ON) a. Explain the significance of business location to the success of some businesses. b. Identify factors that should influence the choice of business location. c. Discuss legal constraints in business location. d. Identify resources that can assist in selecting a business location. e. Demonstrate procedures for selecting a business location.

Instructional Area

PROMOTION

Performance Indicator and Objectives

Explain the role of promotion as a marketing function (PR:001, PR LAP 2) (CS) a. Define the term promotion. b. List users of promotion. c. Describe the benefits of using promotion. d. Describe the costs associated with the use of promotion. e. Describe types of promotional objectives. f. Discuss the relationship of promotion and marketing.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 3

Course Description and Learning Outcomes

Page 3-25

Instructional Area

PROMOTION (cont’d)

Performance Indicator and Objectives

Explain the types of promotion (PR:002, PR LAP 4) (CS) a. Define the following terms: product promotion, primary product promotion, secondary product promotion, institutional promotion, public service, public relations, and patronage. b. Identify types of product promotion. c. Describe the uses of product promotion. d. Identify types of institutional promotion. e. Describe uses of institutional promotion. f. Discuss the advantages of promotional activities. g. Discuss the disadvantages of promotional activities.

Performance Indicator and Objectives

Identify the elements of the promotional mix (PR:003, PR LAP 1) (SP) a. Define the following terms: promotional mix, advertising, personal selling, publicity and sales promotion. b. Identify the elements of the promotional mix. c. Categorize examples of promotions according to the elements of the promotional mix. d. Describe the importance of the promotional mix. e. Identify factors affecting the promotional mix. f. Describe how the product being sold affects the promotional mix. g. Explain how the product's market affects the promotional mix. h. Discuss how the distribution system affects the promotional mix. i. Explain how the product's company affects the promotional mix.

Performance Indicator and Objectives

Explain types of advertising media (PR:007, PR LAP 3) (SP) a. Define the term advertising media. b. Categorize advertising media. c. Identify types of publications. d. Describe factors on which newspapers vary. e. Categorize types of magazines. f. Describe the two categories of broadcast media. g. Categorize purchase options for television advertising. h. Discuss the difference between local and network advertising. i. Describe types of direct-mail advertising. j. Explain types of Web advertising. k. Identify types of out-of-home media. l. Describe specialty advertising. m. Discuss the use of directory advertising. n. Explain the use of movie theater advertising. o. Describe the use of product placement for advertising. p. Discuss the use of telemarketing for advertising. q. Explain the use of videotapes, DVDs, and CD-ROM advertising. r. Explain trends that are affecting advertising media.

Performance Indicator and Objectives

Develop promotional plan for a business (PR:097) (MN) a. Describe steps in promotional planning. b. Determine components to include in a promotional plan. c. Explain guidelines for developing a promotional plan. d. Demonstrate how to develop a promotional plan.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Course Outline Section 4

Section 4

Introduction

Course Outline

Page 4-2

An outline is provided to identify a recommended instructional sequence/schedule for the course. Principles of Entrepreneurship is process oriented. In effect, it delivers the curriculum through a sequence designed to plan a new business venture. Thus, learning outcomes from various instructional areas are, at times, grouped together as the curricular backbone of the project and activities. These learning outcomes are sequenced in a recommended order of instruction to move students through the business planning process. Although all successful entrepreneurs must possess the knowledge and complete the tasks identified in the course outline, they may address the material in a different sequence than the one presented here. In the real business world, entrepreneurs would address much of the material simultaneously, rather than in a sequential manner. Since the best curriculum is one that has been designed for a specific situation, instructors should examine local considerations when making final curricular decisions. These considerations involve such factors as:

Student Ability Level

Principles of Entrepreneurship was developed with the assumption that students enrolled in the course are average in ability and motivation. If an individual or a class does not meet that assumption, the instructor should modify the curriculum by addressing fewer learning outcomes at a slower pace than that recommended or by adding more general business outcomes to increase the pace.

Instructional Time

The amount of instructional time devoted to each performance indicator will vary. The amount of time should be increased or decreased based on the overall ability level of students and the complexity of the performance indicator, or learning outcome. For example, less time might be spent on career-sustaining performance indicators and more time on specialist-level indicators.

CareerTechnical Student Organization

Use of a co-curricular student organization may affect the sequence of instruction presented in the course outline. The instructor should carefully examine the makeup of competitive events to ensure proper alignment with course content.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 4

Week and Blueprint Indicator

Course Outline

Page 4-3

Performance Indicator

Week 1

1.01

Explain the goals of the Principles of Entrepreneurship course Discuss classroom operations and procedures Discuss the purposes of CTSO and its activities Identify the impact of small business/entrepreneurship on market economies (EC:065) (CS) (pp. 5-4 — 5-5)

Week 2 1.02 1.02

Explain career opportunities in entrepreneurship (PD:066, PD LAP 4) (CS) (pp. 5-6 — 5-8) Conduct self-assessment to determine entrepreneurial potential (PD:067) (CS) (pp. 5-9 — 5-10)

Week 3 1.03 1.04

Identify sources of business start-up information (MN:187) (SP) (pp. 5-11 — 5-12) Write inquiries (CO:040) (CS) (pp. 5-13 — 5-14)

Week 4 2.01 2.01

Explain the need for entrepreneurial discovery (EN:001) (ON) (pp. 5-15 — 5-16) Discuss entrepreneurial discovery processes (EN:002) (ON) (pp. 5-18 — 5-19)

Week 5 2.02 2.03

Conduct an environmental scan to obtain business information (NF:015, NF LAP 2) (SP) (pp. 5-23 — 5-24) Assess global trends and opportunities for business ventures/products (EN:003) (ON) (pp. 5-28 — 5-29)

Week 6 2.03 2.03

Determine opportunities for venture/product creation (EN:004) (ON) (pp. 5-30 — 5-31) Assess opportunities for venture/product creation (EN:005) (ON) (pp. 5-33 — 5-35)

Week 7 2.04 2.05 2.06

Identify methods/techniques to generate a venture/product idea (PM:127, PM LAP 11) (SP) (pp. 5-36 — 5-37) Demonstrate appropriate creativity (PD:012, QS LAP 5) (SP) (pp. 5-38 — 5-39) Generate venture/product ideas (EN:006) (ON) (pp. 5-40 — 5-41)

Week 8 2.07 2.08

Identify venture/product to fill customer need (PM:130) (MN) (pp. 5-42 — 5-43) Assess risks of personal decisions (EI:091) (PQ) (pp. 5-44 — 5-45)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 4

2.08

Course Outline

Page 4-4

Take responsibility for decisions and actions (EI:075) (PQ) (pp. 5-46 — 5-47)

Week 9 2.09 2.09

Describe entrepreneurial planning considerations (EN:007) (ON) (pp. 5-48 — 5-49) Explain tools used by entrepreneurs for venture planning (EN:008) (ON) (pp. 5-50 — 5-51)

Week 10 2.10 2.11

Explain the nature of overhead/operating costs (OP:024) (SP) (pp. 5-52 — 5-53) Assess start-up requirements (EN:009) (ON) (pp. 5-54 — 5-55)

Week 11 2.11 2.12 2.13

Assess risks associated with venture (EN:010) (ON) (pp. 5-60 — 5-61) Develop tolerance for ambiguity (EI:092) (CS) (pp. 5-64 — 5-65) Determine feasibility of venture/product ideas (EN:038) (ON) (pp. 5-66 — 5-67)

Week 12 2.13 3.01 3.02

Determine feasibility of venture/product ideas (EN:038) (ON) [cont’d] (pp. 5-66 — 5-67) Explain the concept of marketing strategies (MP:001, MP LAP 2) (CS) (pp. 5-69 — 5-70) Explain the concept of market and market identification (MP:003; IM LAP 9, MP LAP 3) (CS) (pp. 5-74 — 5-76)

Week 13 3.03 3.03

Explain the nature of marketing plans (MP:007, MP LAP 1) (SP) (pp. 5-81 — 5-82) Explain the role of situation analysis in the marketing planning process (MP:008) (SP) (pp. 5-85 — 5-86)

Week 14 3.04 3.04

Identify market segments (MP:004) (MN) (pp. 5-87 — 5-88) Select a target market (MP:005) (MN) (pp. 5-89 — 5-90)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 4

Course Outline

Page 4-5

Week 15 3.05 3.05

Conduct market analysis (market size, area, potential, etc.) (MP:009) (MN) (pp. 5-91 — 5-92) Conduct SWOT analysis for use in the marketing planning process (MP:010, IM LAP 8) (MN) (pp. 5-93 — 5-94)

Week 16 3.05 3.05

Conduct SWOT analysis for use in the marketing planning process (MP:010, IM LAP 8) (MN) [cont’d] (pp. 5-93 — 5-94) Conduct competitive analysis (MP:012) (MN) (pp. 5-95 — 5-96)

Week 17 3.06 3.06

Describe legal issues affecting businesses (BL:001) (SP) (pp. 5-97 — 5-98) Select form of business ownership (BL:006, BL LAP 2) (ON) (pp. 5-99 — 5-100)

Week 18 4.01

Choose venture/product name (PM:131) (ON) (pp. 5-101 — 5-102) Semester Exam

Week 19 4.02 4.02

Develop company goals/objectives (SM:008) (ON) (pp. 5-103 — 5-104) Define business mission (SM:009) (ON) (pp. 5-105 — 5-106)

Week 20 4.03 4.04

Explain the nature and scope of the product/service management function (PM:001, PM LAP 17) (SP) (pp. 5-107 — 5-108) Explain the concept of product mix (PM:003, PM LAP 3) (SP) (pp. 5-109 — 5-111)

Week 21 4.04

Plan product mix (PM:006) (MN) (pp. 5-112 — 5-113)

Week 22 4.05 4.06

Describe factors used by marketers to position ventures/products (PM:042) (SP) (pp. 5-114 — 5-115) Determine services to provide customers (PM:036) (MN) (pp. 5-119 — 5-120)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 4

Course Outline

Page 4-6

Week 23 4.07 4.07

Identify company’s unique selling proposition (PM:272) (MN) (pp. 5-121 — 5-122) Select business location (PM:132) (ON) (pp. 5-123 — 5-124)

Week 24 4.08 4.08

Explain the nature and scope of channel management (CM:001, CM LAP 2) (CS) (pp. 5-125 — 5-126) Explain the nature of channels of distribution (CM:003, CM LAP 1) (CS) (pp. 5-127 — 5-128)

Week 25 4.08 4.09

Explain the nature of channels of distribution (CM:003, CM LAP 1) (CS) [cont’d] (pp. 5-127 — 5-128) Select channels of distribution (CM:010) (MN) (pp. 5-129 — 5-130)

Week 26 5.01 5.01

Explain the nature and scope of the pricing function (PI:001, PI LAP 2) (SP) (pp. 5-131 — 5-132) Explain factors affecting pricing decisions (PI:002, PI LAP 3) (SP) (pp. 5-133 — 5-134)

Week 27 5.02 5.02

Determine cost of product (breakeven, ROI, markup) (PI:019) (MN) (pp. 5-137 — 5-138) Calculate break-even point (PI:006, PI LAP 4) (MN) (pp. 5-139 — 5-140)

Week 28 5.02 5.02

Calculate break-even point (PI:006, PI LAP 4) (MN) [cont’d] (pp. 5-139 — 5-140) Set prices (PI:007) (MN) (pp. 5-141 — 5-142)

Week 29 5.03 5.03

Explain the role of promotion as a marketing function (PR:001, PR LAP 2) (CS) (pp. 5-143 — 5-144) Explain the types of promotion (PR:002, PR LAP 4) (CS) (pp. 5-145 — 5-146)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 4

Course Outline

Page 4-7

Week 30 5.03 5.04

Identify the elements of the promotional mix (PR:003, PR LAP 1) (SP) (pp. 5-147 — 5-148) Explain types of advertising media (PR:007, PR LAP 3) (SP) (pp. 5-149 — 5-150)

Week 31 5.05

Develop promotional plan for a business (PR:097) (MN) (pp. 5-151 — 5-152)

Week 32 5.06 5.06

Explain the nature of sales forecasts (MP:013) (SP) (pp. 5-156 — 5-157) Forecast sales for marketing plan (MP:014) (MN) (pp. 5-158 — 5-159)

Week 33 5.06 5.06

Set marketing goals and objectives (MP:015) (MN) (pp. 5-167 — 5-168) Select marketing metrics (MP:016) (MN) (pp. 5-169 — 5-171)

Week 34 5.06 5.06

Select marketing metrics (MP:016) (MN) [cont’d] (pp. 5-169 — 5-171) Set marketing budget (MP:017) (MN) (pp. 5-172 — 5-173)

Week 35 5.06

Develop marketing plan (MP:018) (MN) pp. 5-174 — 5-176)

Week 36 5.06

Develop marketing plan (MP:018) (MN) [cont’d] (pp. 5-174 — 5-176) Course Assessment Final Exam

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Planning Guide Sheets Section 5

Section 5

Introduction to the Very Important Planning (VIP) Project

Planning Guide Sheets

Page 5-2

The Very Important Planning (VIP) course-long project is designed to give students an opportunity to develop and apply skills and knowledge needed for entrepreneurial success. For the project, each student is responsible for developing a unique venture/product idea and planning for the actualization of his/her own business. Many of the Performance Activities contained in each Planning Guide Sheet lead students through phases of entrepreneurial discovery, idea identification and refinement, and market planning for a new business startup. Activities pertaining to the students’ future businesses are mandatory. Upon completion of each of these activities, students should insert their work into their individual Very Important Planning (VIP) portfolios. The capstone activity in the Very Important Planning project requires each student to develop a detailed marketing plan for her/his proposed new venture. The marketing plan should include an executive summary; situation analysis; desired target market; marketing goals and objectives; marketing strategies and programs; financial plans; performance and appendices; and appendices. When finished, students are expected to add their marketing plans to their VIP portfolios and file/save their work for safekeeping. Students should continue their business planning—and therefore, add to their portfolios—during a 12th-grade entrepreneurship course. Also, at that time, they should be given the opportunity to actualize their business ventures. Principles of Entrepreneurship is a fast-paced, content-rich course. For that reason, the course developers focused solely on key aspects of entrepreneurship and market planning for a new business. If teachers feel that too much of a gap exists for their particular students to get the big picture of entrepreneurship and planning a business, they need to include additional learning outcomes for their students.

Planning Guide Sheets

For each performance indicator, a planning guide sheet was developed that identifies a Knowledge/Skill Statement (standard), an Instructional Area, a Performance Element (topic), the Performance Indicator, Objectives, a Performance Activity that should be implemented to provide structure to the project, and a listing of Resources. Students should master each of the Performance Indicators either through research conducted on their own or through classroom instruction.

Crosswalks

Each performance indicator has been crosswalked with SCANS competencies and with 21st Century Skills. Information about these two efforts and the learning outcomes they address is found in Appendices B and C respectively.

Performance Activities

Performance Activities are presented throughout the course to provide a framework for the Very Important Planning project. These activities reinforce concepts, practice skills, extend knowledge, and/or assess student performance. Considerations made in developing the activities are as follows:

    

The activities must promote critical thinking, decision-making, and teamwork. A variety of activities must be developed to appeal to different learning and teaching styles and to maintain student interest. The activities must reflect the intent of the performance indicators; e.g., concept-oriented activities should be developed for concept-oriented performance indicators. The activities must enable students to integrate and apply academic content. The activities must encourage the use of technology.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-3

Resources

A variety of resources from various publishers is included for teacher and student use. Efforts were made to reference the most current editions of textbooks. At the time of publication, all URLs were active links.

Briefings

For nine Principles of Entrepreneurship performance indicators, informational notes—referred to as Briefings—have been provided. It is recommended that instructors review and present the Briefings to students in a lecture or discussion format. A topical outline for each Briefing is provided following the appropriate planning guide sheets.

Rubrics

Several rubrics that can be used to evaluate students’ work are provided throughout Section 5 following the appropriate planning guide sheets.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-4

Knowledge/ Skill Statement

Understands the economic principles and concepts fundamental to business operations

Instructional Area

Economics

Performance Element

Understand economic systems to be able to recognize the environments in which businesses function.

Performance Indicator

Identify the impact of small business/entrepreneurship on market economies (EC:065)

Level

Career-sustaining

SCANS

Information 7; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 12

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 2; Critical Thinking and Problem Solving 3; Communication and Collaboration 1; Information Literacy 1

Objectives

a. b. c. d. e.

Performance Activity

Determine what constitutes a “small business” in our economy. Identify local small businesses, and determine ways that the businesses have contributed to society. Write a brief paper about the businesses’ contributions, discuss your findings with the class, and submit your report to your instructor for review.

Define the terms small business and entrepreneurship. Explain the relationship between small business and entrepreneurship. Describe barriers to small business/entrepreneurial success. Discuss reasons for the growth of small business. Identify ways that small business has contributed to society.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 5-12]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 15-16, 19-21). Woodland Hills, CA: Glencoe/McGraw-Hill. Bovée, C.L., Thill, J.V., & Mescon, M.H. (2007). Excellence in business (3rd ed.) [pp. 73, 197-200, 209-211]. Upper Saddle River, NJ: Pearson Prentice Hall. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 732, 744-746, 748]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Gartner, W.B., & Bellamy, M.G. (2009). Creating the enterprise (pp.4-5). Mason, OH: Thomson South-Western. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 4-5]. Mason, OH: Thomson/South-Western. Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (pp. 52, 101, 698-699, 702-703). Woodland Hills, CA: Glencoe/McGraw-Hill. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 4-8, 1417]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 3-4, 5]. Mason, OH: Thomson South-Western. Kurtz, D.L. (2009). Contemporary business (12th ed.) [pp. 146-162, 184-186]. Mason, OH: South-Western Cengage Learning.

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Section 5

Planning Guide Sheets

Page 5-5

Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 6-7, 10-11, 33-35]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 2, 4, 8]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Nickels, W.G., McHugh, J.M., McHugh, S.M. (2008). Understanding business (8th ed.) [pp. 44, 8,148-150,154-155,160-163]. New York: McGraw-Hill. Software/ Online

Blank, S. (2010, November 26). The barriers to entrepreneurship are coming down. Retrieved April 5, 2011, from http://www.businessinsider.com/the-barriers-toentrepreneurship-are-coming-down-2010-11 Hughes, N. (n.d.). Seven barriers to business growth. Retrieved April 5, 2011, from http://www.evancarmichael.com/Business-Coach/740/Seven-Barriers-toBusiness-Growth.html Leebaert, D. (2006, January 3). How small businesses contribute to U.S. economic expansion. Retrieved April 5, 2011, from http://www.america.gov/st/businessenglish/2006/January/20080814223926XJyrreP0.615597.html Mohr, A. (n.d.). Factors affecting economic growth and development. Retrieved April 5, 2011, from http://smallbusiness.chron.com/factors-affecting-economicdevelopment-growth-1517.html QuickMBA.com. (1999-2010). A definition of entrepreneurship. Retrieved April 5, 2011, from http://www.quickmba.com/entre/definition/ Sea, S. (2010, August 20). Entrepreneurship define —entrepreneurship vs small business. Retrieved April 5, 2011, from http://ezinearticles.com/?Entrepreneurship-Defined---Entrepreneur-Vs-SmallBusiness&id=4897485 Shukla, A. (2009, August 22). Top 5 contributions of entrepreneurship in society. Retrieved April 5, 2011, from http://www.paggu.com/entrepreneurship/top-5contributions-of-entrepreneurship-in-society/ SmallBusinessNotes.com. (n.d.). Entrepreneurship spurs economic growth. Retrieved April 5, 2011, from http://www.smallbusinessnotes.com/smallbusiness-resources/entrepreneurism-spurs-economic-growth.html

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Section 5

Planning Guide Sheets

Page 5-6

Knowledge/ Skill Statement

Understands concepts, tools, and strategies used to explore, obtain, and develop in a business career

Instructional Area

Professional Development

Performance Element

Participate in career-planning to enhance job-success potential.

Performance Indicator

Explain career opportunities in entrepreneurship (PD:066, PD LAP 4)

Level

Career-sustaining

SCANS

Information 5; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 12; Personal Qualities 13, 16

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 3; Critical Thinking and Problem Solving 1, 3; Communication and Collaboration 1; Information Literacy 1

Objectives

a. b. c. d. e. f. g. h. i.

Performance Activity

Distinguish among entrepreneurs, small-business owners, and managers. Identify reasons that people pursue careers as entrepreneurs. Explain opportunities that aid people in becoming entrepreneurs. Describe trends in entrepreneurship. Discuss risks and disadvantages associated with entrepreneurship. Identify reasons that business start-ups often fail. Explain skills needed for entrepreneurial success. Discuss reasons that entrepreneurs need to be aware of industry trends and technological developments. Identify professional-development opportunities for entrepreneurs.

With your classmates, form a group of four or five students. In your group, discuss the group members’ interests, talents, and hobbies. Identify and record what you all have in common. Then, with your group, develop a possible business start-up idea that would allow all of you to enjoy or share your interest, talent, or hobby with others. After determining what business you as a group would start, answer the following questions as a group to create an ideal entrepreneur to start the business: a. b. c. d. e. f. g.

What interest does your group have in common? What business start-up idea would allow your group to enjoy or share its interest with others? What personal talents—if any—are needed to start this business? What skills are needed to start the business? What kind of training or education would an entrepreneur need to start the business? What would this entrepreneur’s duties and responsibilities be in starting the business? Where could this entrepreneur go for professional development?

When your group has completed the activity, discuss your answers with the class. After every group in the class has shared its results, discuss the similarities and differences among the groups’ entrepreneurs.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-7

Resources LAP

MBA Research and Curriculum Center. (2009). Own Your Own (Career Opportunities in Entrepreneurship) [LAP: PD-004]. Columbus, OH: Author. MBA Research and Curriculum Center. (2009). Own Your Own (Career Opportunities in Entrepreneurship): Instructor copy [LAP: PD-004]. Columbus, OH: Author.

Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 5-12, 18-19]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 6-7, 21, 30-39, 47). Woodland Hills, CA: Glencoe/McGrawHill. Bovée, C.L., Thill, J.V., & Mescon, M.H. (2007). Excellence in business (3rd ed.) [pp. 199-203, 209-211]. Upper Saddle River, NJ: Pearson Prentice Hall. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 732-736]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (pp. 700-703). Woodland Hills, CA: Glencoe/McGraw-Hill. Gartner, W.B., & Bellamy, M.G. (2009). Creating the enterprise (pp. 3-5, 38-39). Mason, OH: Thomson South-Western. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 9-10, 12-13, 26-42, 48]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 5-6, 8-9, 120-129, 115-165]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 45,19-22, 29-30, 38-42]. Mason, OH: Thomson South-Western. Kurtz, D.L. (2009). Contemporary business (12th ed.) [pp. 184-198]. Mason, OH: South-Western Cengage Learning. Nickels, W.G., McHugh, J.M., McHugh, S.M. (2008). Understanding business (8th ed.) [pp. 150-156, 162-163]. New York: McGraw-Hill. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 7-9, 16]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 8-10, 56-60]. New York: The National Foundation for Teaching Entrepreneurship, Inc.

Software/ Online

Ashbrook, T. (n.d.). Risk in entrepreneurship. Retrieved April 5, 2011, from http://www.entrepreneurship.org/en/resource-center/risk-inentrepreneurship.aspx Clark, R. (2007, June 22). Entrepreneur advantages and disadvantages. Retrieved April 5, 2011, from http://ezinearticles.com/?Entrepreneur-Advantages-andDisadvantages&id=618160 Kirtok, A. (2005, May 19). Successful entrepreneur checklist. Retrieved April 5, 2011, from http://www.smallbusinessarena.com/successful-entrepreneurchecklist/ Martins, A.T. (2009, October 22). 10 causes of business failures you must watch out for. Retrieved April 5, 2011, http://strategicbusinessteam.com/smallbusiness-development-strategy/10-causes-of-business-failure-you-mustwatch-out-for/ Moment, R. (2004, October 28). The 7 traits of an exceptional & successful entrepreneur. Retrieved April 5, 2011, from http://ezinearticles.com/?The-7Traits-of-an-Exceptional-and-Successful-Entrepreneur&id=4889 MBA Research and Curriculum Center. (2009). Own Your Own (Career Opportunities in Entrepreneurship) [LAP: PD-004: Presentation Software]. Columbus, OH: Author. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

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Wang, J., & Ohngren, K. (2010, December). The disrupters: Forces driving change in 2011. Retrieved April 5, 2011, from http://www.entrepreneur.com/trends/index.html Schweitzer, T. (2011, January 27). Eight trends in social entrepreneurship to watch for in 2011. Retrieved April 5, 2011, from: http://dowser.org/eight-trends-insocial-entrepreneurship-to-watch-for-in-2011/ SCORE. (2010). Do you have the mindset and skills to be an entrepreneur? Retrieved April 5, 2011, from http://www.score.org/mindset_skills_entrepreneur.html Spors, K. (2008, September 9). Why small-business owners aren’t always entrepreneurs. Retrieved April 5, 2011, from http://blogs.wsj.com/independentstreet/2008/09/09/why-small-businessowners-arent-always-entrepreneurs/ Stephenson, J. (n.d.). 25 common characteristics of successful entrepreneurs. Retrieved April 5, 2011, from http://www.entrepreneur.com/homebasedbiz/article200730.html ThinkQuest. (n.d.). Pros and cons of entrepreneurship. Retrieved April 5, 2011, from http://library.thinkquest.org/C008486F/iva.htm Watson, G. (2011). DNA of an entrepreneur. Retrieved April 5, 2011, from http://www.dnaofanentrepreneur.com/ Williams, N. (2006, May 29). Small business owners vs inspired entrepreneurs: 10 crucial differences. Retrieved April 5, 2011, from http://www.sabusinesshub.com/section/content.php?SectionId=8&SubsectionI d=12&ContentId=1293

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Planning Guide Sheets

Page 5-9

Knowledge/ Skill Statement

Understands concepts, tools, and strategies used to explore, obtain, and develop in a business career

Instructional Area

Professional Development

Performance Element

Participate in career-planning to enhance job-success potential.

Performance Indicator

Conduct self-assessment to determine entrepreneurial potential (PD:067)

Level

Career-sustaining

SCANS

Information 5; Systems 15; Basic Skills 1-2,5-6; Thinking Skills 12; Personal Qualities 13,16

21st Century Skills

Critical Thinking and Problem Solving 3; Communication and Collaboration 1; Information Literacy 1; Initiative and Self-Direction 1

Objectives

a. b. c.

Performance Activity

Identify a successful entrepreneur and analyze the person’s skills and personality traits. Write a brief paper about the person, providing a rationale as to why the identified traits and skills have facilitated the person’s success. Discuss your paper with a team of three other classmates. From the four team members’ papers, identify the skills and traits that were common among the four entrepreneurs identified. Present the group’s findings to the class.

Describe personality traits associated with successful entrepreneurs. Explain skills needed for entrepreneurial success. Demonstrate procedures for assessing entrepreneurial potential.

Use the Entrepreneur Self-Test at http://www.youronestopcenter.com/entrepreneurtest.php to assess your entrepreneurial potential. Evaluate your results, and identify your areas of strength and those needing additional improvement. Write a brief paper using a word-processing software program discussing actions you plan to take to improve the areas needing improvement. Insert the completed document into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 12-14, 16-17, 25-26]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 32-39). Woodland Hills, CA: Glencoe/McGraw-Hill. Bovée, C.L., Thill, J.V., & Mescon, M.H. (2007). Excellence in business (3rd ed.) [p. 202]. Upper Saddle River, NJ: Pearson Prentice Hall. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 732-735]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (p. 702). Woodland Hills, CA: Glencoe/McGraw-Hill. Gartner, W.B., & Bellamy, M.G. (2009). Creating the enterprise (pp. 33-34, 36, 39, 42-45, 58-59). Mason, OH: Thomson South-Western. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 9-13]. Mason, OH: Thomson/South-Western. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Planning Guide Sheets

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Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 9-12, 1314, 58-73]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 5-8, 30-37]. Mason, OH: Thomson South-Western. Kurtz, D.L. (2009). Contemporary business (12th ed.) [pp. 194-200]. Mason, OH: South-Western Cengage Learning. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 7-9, 16, 21]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 3, 56-60]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Nickels, W.G., McHugh, J.M., McHugh, S.M. (2008). Understanding business (8th ed.) [pp. 151-154]. New York: McGraw-Hill. Software/ Online

Banfield, R. (n.d.). Questions every potential entrepreneur should ask. Retrieved April 7, 2011, from http://www.nettemps.com/careerdev/crossroads/print.htm?id=818 Cohen, D. (n.d.). Key personality traits of an entrepreneur. Retrieved April 7, 2011, from http://globalvations.com/articles/key_personality_traits_of_an_entrepreneur.ht ml DeFiore, C., & DeFiore, S. (n.d.). Traits of the successful entrepreneur. Retrieved April 7, 2011, from http://www.lifetoolsforwomen.com/m/traits-entrepreneur.htm Floyd, R. (2007, April 10). Traits of the best entrepreneurs. Retrieved April 7, 2011, from http://venturebeat.com/2007/04/10/traits-of-the-best-entrepreneurs/ Mentors, Ventures, & Plans. (n.d.). Self-assessment: Is entrepreneurship for me? Retrieved April 7, 2011, from http://www.mvp.cfee.org/en/selfassessisentforme.html SCORE. (2010). Do you have the mindset and skills to be an entrepreneur? Retrieved April 5, 2011, from http://www.score.org/mindset_skills_entrepreneur.html Sifflard, B. (2009, February 5). Are you a “big e” entrepreneur? Do you have an entrepreneur’s vision? Retrieved April 7, 2011, from http://newentrepreneuressentials.com/are-you-an-entrepreneur-do-you-havean-entrepreneurial-vision/ Stephenson, J. (n.d.). 25 common characteristics of successful entrepreneurs. Retrieved April 5, 2011, from http://www.entrepreneur.com/homebasedbiz/article200730.html Zahorsky, D. (n.d.). The 9 personality types of entrepreneurs. Retrieved April 7, 2011, from http://sbinformation.about.com/cs/development/a/personality.htm

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Planning Guide Sheets

Page 5-11

Knowledge/ Skill Statement

Understands tools, strategies, and systems needed to access, process, maintain, evaluate, and disseminate information to assist business decision-making

Instructional Area

Information Management

Performance Element

Acquire information to guide business decision-making.

Performance Indicator

Identify sources of business start-up information (MN:187)

Level

Specialist

SCANS

Information 5-6; Systems 15; Basic Skills 1-3, 5-6; Thinking Skills 8-9; Personal Qualities 16

21st Century Skills

Communication and Collaboration 1; Information Literacy 1; ICT Literacy 1-2

Objectives

a. b. c. d. e. f.

Performance Activity

Use a spreadsheet program or word-processing table to create a matrix containing two or more columns with the headings of “Information Needed” and “Information Sources.” Additional columns can be used for contact information such as phone numbers and addresses. In the first column, identify specific questions that you have or information that you need about entrepreneurship and starting your own business. Locate organizations, government entities, and individuals who could answer your questions and provide you with the information that you need. List their names in the second column, and add their contact information in additional columns for use in the next activity.

Explain the value of obtaining business start-up information. Describe types of business start-up information. Identify government sources of business start-up information. Identify online sources of business start-up information. Identify professional services that provide assistance with business start-up. Identify trade associations/professional organizations that provide business start-up information.

As you develop your VIP portfolio and recognize that you need more assistance, document the type of information that you need help with and who/what can provide the help. Maintain your list of sources of business start-up information throughout the course. When you update the document, print an updated version of it, and insert it into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 247-254]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 55-57,107-108, 351). Woodland Hills, CA: McGraw-Hill Glencoe. Bovée, C.L., Thill, J.V., & Mescon, M.H. (2007). Excellence in business (3rd ed.) [pp. 211-215]. Upper Saddle River, NJ: Pearson Prentice Hall. Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (p. 662). Woodland Hills, CA: Glencoe/McGraw-Hill. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-12

Gartner, W.B., & Bellamy, M.G. (2009). Creating the enterprise (pp.130-132, 145, 147, 181, 212, 356-357). Mason, OH: Thomson South-Western. Greene, C.L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 14, 115-117]. Mason, OH: Thomson South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 32, 158, 172, 188, 196-198, 352-356, 359, 374-378]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 131132, 186, 287]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp.125, 129-130]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 581-585]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Nickels, W.G., McHugh, J.M., McHugh, S.M. (2008). Understanding business (8th ed.) [pp. 159, 168-169]. New York: McGraw-Hill. Software/ Online

Ewing Marion Kauffman Foundation. (2011) Entrepreneurship resource center. Retrieved April 11, 2011, from http://www.entrepreneurship.org/en/ResourceCenter.aspx Greater Medina Chamber of Commerce. (2011). Small business start-up information. Retrieved April 11, 2011, from http://www.medinaohchamber.com/Involvement/Business_Start_Information Library System of Lancaster County. (2011, March 24). Business start-up toolkit. Retrieved April 11, 2011, from http://www.lancasterlibraries.org/lslc/cwp/view.asp?a=3&q=467470 Fasano, A. (2010, April 25). Professional organizations: Is it for me? Retrieved April 11, 2011, from http://powerfulpurpose.com/professional-organizations-is-it-forme Quintessential Careers (n.d.). Entrepreneur and business start-up tolls and resources. Retrieved April 11, 2011, from http://www.quintcareers.com/entrepreneur_resources.html Small Business Success. (n.d.). Give your small business start-up the best chance of success. Retrieved April 11, 2011, from http://www.smallbusinesssuccess.biz/articles_week/small_business_start_up_ success.htm Startup Internet Marketing.(2000-2009). Marketing sources and resources. Retrieved April 11, 2011, from http://www.startupinternetmarketing.com/pagelinks/resources.html United States Department of Labor: Bureau of Labor Statistics. (n.d.). BLS publications. Retrieved April 11, 2011, from http://www.bls.gov/opub/

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Planning Guide Sheets

Page 5-13

Knowledge/ Skill Statement

Understands the concepts, strategies, and systems used to obtain and convey ideas and information

Instructional Area

Communication Skills

Performance Element

Write internal and external business correspondence to convey and obtain information effectively.

Performance Indicator

Write inquiries (CO:040)

Level

Career-sustaining

SCANS

Information 5-8; Systems 15; Basic Skills 1-2; Thinking Skills 12

21st Century Skills

Communication and Collaboration 1

Objectives

a. b. c. d.

Performance Activity

Using the list that you developed in the last activity, write letters of inquiry to four different sources of business start-up information to obtain literature about entrepreneurship and starting your own business. Upon receipt of these materials, insert them into your VIP portfolio.

Define the term inquiries. Identify occasions when inquiries are written by businesses. Describe the importance of writing inquiries. Demonstrate procedures for writing inquiries.

Resources Textbooks

Bovée, C. L., & Thill, J. V. (2008). Business communication today (9th ed.) [pp. 483, 604-605]. Upper Saddle River, NJ: Pearson Prentice Hall. Carey, J.A. (Ed.). (2002). Business letters for busy people (4th ed.) [pp. 27, 118]. Franklin Lakes, NJ: Career Press. Gorman, T. (2005). The complete idiot’s guide to business letters and memos (2nd ed.) [pp. 158-164]. Indianapolis: Alpha Books/Penguin Group. Hyden, J. S., Jordan, A. K., Steinauer, M. H., & Jones, M. J. (2006). Communicating for success (3rd ed.) [pp. 286, 316-317]. Mason, OH: Thomson South-Western. Kimball, C. & Van Gelder, J. (2007). Ultimate book of business letters (pp. 33-68, 115-117, 120-121, 142). Madison, WI: Entrepreneur Press. Lesikar, R.V. & Flatley, M.E. (2005). Basic business communication: Skills for empowering the Internet generation (10th ed.) [pp. 112-119]. New York: McGraw-Hill/Irwin. Locker, K.O. (2006). Business and administrative communication (7th ed.) [pp. 218221]. New York: McGraw-Hill.

Software/ Online

Beare, K. (2011). Business letter writing: Inquiries—Asking for information. Retrieved April 11, 2011, from http://esl.about.com/library/writing/blwrite_make_enquire.htm Foundation Center. (2010). Frequently asked questions: What should be included in a letter of inquiry/intent? Retrieved April 11, 2011, from http://foundationcenter.org/getstarted/faqs/html/letter.html Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Planning Guide Sheets

Page 5-14

Fritz, J. (2011). How to make your letter of inquiry a winner. Retrieved April 11, 2011, from http://nonprofit.about.com/od/fundraising/a/LOI.htm McMurrey, D.A. (n.d.). Chapter 1: Business correspondence—Inquiry letters. Retrieved April 11, 2011, from http://www.gel.ulaval.ca/~poussart/gel64324/McMurrey/texte/inquire.htm WriteExpress. (1996-2011). Inquiry letters. Retrieved April 11, 2011, from http://www.writeexpress.com/inquiry.htm

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Planning Guide Sheets

Page 5-15

Knowledge/ Skill Statement

Understands the concepts, processes, and skills associated with identifying new ideas, opportunities, and methods and with creating or starting a new project or venture

Instructional Area

Entrepreneurship

Performance Element

Employ entrepreneurial discovery strategies to generate feasible ideas for business ventures/products.

Performance Indicator

Explain the need for entrepreneurial discovery (EN:001)

Level

Owner

SCANS

Information 5; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 12

21st Century Skills

Critical Thinking and Problem Solving 1, 3; Communication and Collaboration 1; Information Literacy 1

Objectives

a. b. c.

Performance Activity

Define the term entrepreneurial discovery. Explain the contributions of entrepreneurial discovery to society (e.g., more efficient use of resources, increased productivity, etc.). Identify changes that encourage entrepreneurial discovery (e.g., technological changes, political changes, legal changes, regulatory changes, social changes, and demographic changes).

Note to the Instructor: Review and present the Entrepreneurial Discovery briefing (p. 5-17) to students in a lecture or discussion format. Identify a change occurring in your community that has encouraged entrepreneurial discovery. Determine what type of change it is (e.g., technological, political, legal, social, demographic, etc.), and identify new businesses or products that have been developed in response to that change. Discuss your insights with a classmate, and submit your findings to your instructor for review.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 4, 55-56, 125-127]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (p. 15). Woodland Hills, CA: Glencoe/McGraw-Hill. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [p. 748]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 14-18]. New York: McGraw-Hill Irwin. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 49-60]. Mason, OH: Thomson South-Western. Nickels, W.G., McHugh, J.M., McHugh, S.M. (2008). Understanding business (8th ed.) [p. 150]. New York: McGraw-Hill.

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Software/ Online

Planning Guide Sheets

Page 5-16

Demmert, H., & Klein, D.B. (2004, February 28). Experiment on entrepreneurial discovery: An attempt to demonstrate the conjecture of Hayek and Kirzner. Retrieved April 11, 2011, from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=469721 Eckhardt, J.T. & Shane, S.A. (2003). Opportunities and entrepreneurship. Retrieved April 11, 2011, from http://faculty.weatherhead.case.edu/shane/or/OR2.pdf Leithner, C. (2004, December 15). Entrepreneurship and intelligent investing. Retrieved April 11, 2011, from http://www.quebecoislibre.org/04/041215-5.htm Mitchell, R.K. (1998-2003). New combination. Retrieved April 11, 2011, from http://cvar.venturecapital.org/nvt/Topic_Info/Innovation/New_Combination/new _combination.html Murphy, P.J. (2004). A logic for entrepreneurial discovery. Retrieved April 11, 2011, from http://works.bepress.com/profpjm/21/ Puhakka,V. (2007, March). Effects of opportunity discovery strategies of entrepreneurs on performance of new ventures. Retrieved April 11, 2011, from http://joe.sagepub.com/content/16/1/19.abstract

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Key Points

Briefing: Entrepreneurial Discovery

Page 5-17

Define entrepreneurial discovery. The process of systematically scanning for technological, political and regulatory, social, and demographic changes to discover opportunities to produce new good and services Explain the contributions of entrepreneurial discovery to society.  Entrepreneurs are the mechanism by which our economy turns demand into supply. They recognize consumer wants and see the economic opportunities in satisfying them.  Entrepreneurs are a principal source of venture capital. As part of the process of planning and setting up a new business, entrepreneurs gather resources. Money is one of the most important of these resources. Entrepreneurs usually start with their own funds and then seek out contributions from private investors.  Entrepreneurs provide jobs.  The most successful entrepreneurs change society. In 1976, Steven Jobs and Steven Wozniak set out to create Apple, the first personal computer. In less than five years, they had created a whole industry comprised of hundreds of related businesses and thousands of new jobs. Today it is hard to imagine a workplace without at least one personal computer. Copied from: Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (p. 10). Woodland Hills, CA: Glencoe/McGraw-Hill. Identify changes that encourage entrepreneurial discovery (e.g., technological changes, political and regulatory changes, social changes, and demographic changes).  Any time things change, there is an opportunity for entrepreneurship. We need look no further than the internet to discover that. The internet was a technological change that opened up the door (and is still opening doors) to new ideas such as Facebook, Google, eBay, webcasts, etc.  Ask students to identify ways in which the following types of change have led to entrepreneurial discovery: 1. Political change: election of a new U.S. President 2. Social change: majority of mothers and fathers working outside the home 3. Demographic change: use of Spanish language increasing rapidly in U.S.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-18

Knowledge/ Skill Statement

Understands the concepts, processes, and skills associated with identifying new ideas, opportunities, and methods and with creating or starting a new project or venture

Instructional Area

Entrepreneurship

Performance Element

Employ entrepreneurial discovery strategies to generate feasible ideas for business ventures/products.

Performance Indicator

Discuss entrepreneurial discovery processes (EN:002)

Level

Owner

SCANS

Information 5, 7; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 7, 11-12

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 2, 3; Critical Thinking and Problem Solving Skills 1, 3; Communication; Creativity and Innovation Skills 1, 2, 3

Objectives

a.

b.

c.

d.

e. f.

Performance Activity

Discuss differences between entrepreneurs and non-entrepreneurs that can aid entrepreneurs in perceiving opportunities (e.g., life experiences, a person’s position in a social network, the nature of the search process a person uses, an individual’s ability to focus on the opportunities, and intelligence). Distinguish between scientific discovery (when a physical or technological observation is made) and circumstantial discovery (when an observation is made based on specific knowledge of time, place, or circumstance). Describe areas of entrepreneurial discovery (i.e., introduction of a new product or a new quality of product, introduction of a new production method, a new market, a new vendor and/or resource source, and the reorganization of an industry). Explain techniques that entrepreneurs can use to recognize opportunities (e.g., analogies, pattern recognition, experiments, simulation of prototypes. reverse engineering, etc.). Discuss ways that entrepreneurs try to distinguish themselves from their competitors. Discuss stages of entrepreneurial processes (i.e., discovery, evaluation, and exploitation).

Note to the Instructor: Review and present the Entrepreneurial Discovery Processes briefing (pp. 5-20 and 5-22) to students in a lecture or discussion format. Work in a group with two or three classmates to conduct research to identify five entrepreneurial discoveries and the areas of entrepreneurial discovery for each. Develop a profile of each entrepreneur, and compare their characteristics to determine their shared or similar traits that probably aided them in making the entrepreneurial discovery. Determine the techniques that the entrepreneurs used to recognize the opportunities. Record your findings, and as a group, present them to the class for discussion.

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Planning Guide Sheets

Page 5-19

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 13-14, 52, 55-56, 125-127]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 16, 52-56). Woodland Hills, CA: Glencoe/McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 17-18, 82-92]. Mason, OH: South-Western Cengage Learning. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 22-28, 8083]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 127134, 141]. Mason, OH: Thomson South-Western. Kurtz, D.L. (2009). Contemporary business (12th ed.) [pp. 184-186]. Mason, OH: South-Western Cengage Learning. Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (pp.698699). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 4-5]. Mason, OH: Thomson/South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 5-7, 10-12, 49-50, 52-55, 313]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 2, 4, 80-85]. New York: The National Foundation for Teaching Entrepreneurship, Inc.

Software/ Online

Alvarez, S. and Barney, J. (2006, May). Discovery and creation: Alternative theories of entrepreneurial action. Fisher College of Business Working Paper No. 200601-005. Retrieved April 11, 2011, from http://ssrn.com/abstract=900200 Companys, Y. E. (2007). Strategic entrepreneurs at work: Nature, discovery, and exploitation of entrepreneurial opportunities in Small Business Economics, Vol. 28, No. 4. Retrieved April 11, 2011, from http://ssrn.com/abstract=981322 Eckhardt, J.T. & Shane, S.A. (2003). Opportunities and entrepreneurship. Retrieved April 11, 2011, from http://faculty.weatherhead.case.edu/shane/or/OR2.pdf Leithner, C. (2004, December 15). Entrepreneurship and intelligent investing. Retrieved April 11, 2011, from http://www.quebecoislibre.org/04/041215-5.htm Mitchell, R.K. (1998-2003). New combination. Retrieved March 7, 2011, from http://cvar.venturecapital.org/nvt/Topic_Info/Innovation/New_Combination/new _combination.html Nooteboom, B. (2005, April 25). Entrepreneurial roles along a cycle of discovery [CentER Discussion Paper No. 2005-43]. April 11, 2011, from http://ssrn.com/abstract=706902 Nooteboom, B. (2006, August 6). Stages Of discovery and entrepreneurship [ERIM Report Series Reference No. ERS-2003-028-ORG]. Retrieved April 11, 2011, from http://ssrn.com/abstract=411668 Wayne Brown Institute. (2003). Venture ready report for submitting company. Retrieved April 11, 2011, from http://www.venturecapital.org/vrr/index.htm Yosem, E.; Companys, Y.E.; & McMullen, J.S. (2007, June 20). Strategic entrepreneurs at work: The nature, discovery, and exploitation of entrepreneurial opportunities. Retrieved April 11, 2011, from http://ssrn.com/abstract=981322

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Key Points

Briefing: Entrep. Discovery Processes

Page 5-20

Discuss differences between entrepreneurs and non-entrepreneurs that can aid entrepreneurs in perceiving opportunities. Some characteristics commonly associated with entrepreneurs: 1. commitment and determination 2. leadership 3. opportunity obsession 4. tolerance of risk, ambiguity and uncertainty 5. creativity, self-reliance and ability to adapt 6. motivation to excel (Timmons 1994) 7. social nature Being social is important because “Building a company entails hiring, organizing, and inspiring a collection of people who typically need to get start-up funds from others, to buy things from other people, and, ultimately, flourish or fail together as a result of the ability to sell things to yet another group of people.” Copied from: Byers, T., Kist, H. & Sutton, R.I. (1997, October 27). Characteristics of the Entrepreneur: Social Creatures, Not Solo Heroes. Retrieved April 19, 2011, from http://www.skillcast.co.uk/documents/49.html An entrepreneur also capitalizes on:  Life experiences  Person’s position in a social network  Nature of the search process a person uses  Ability to focus on the opportunities  Intelligence Perhaps most importantly, entrepreneurs also tend to be “entrepreneurially alert.” Are you always looking for new opportunities? If so, then you are more apt to see them when they arise. Distinguish between scientific discovery and circumstantial discovery. Scientific discovery: Occurs when a physical or technological observation is made Circumstantial discovery: Occurs when an observation is made based on specific knowledge of time, place, or circumstance Describe areas of entrepreneurial discovery.     

The introduction of a new good or a new quality of a good The introduction of a new method of production The opening of a new market The conquest of a new source of supply of raw materials or components The reorganization of any industry

Examples:  The introduction of a new product or an improved product: (Most common area of innovation) MP3 player (Be sure to distinguish new invention of the MP3 player from improved MP3 player with a screen)

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Briefing: Entrep. Discovery Processes  





Page 5-21

The introduction of a new method of production: Henry Ford’s invention of the assembly line The opening of a new market: McDonald’s moving into China for the first time (Note that in addition to discovering the new market, it requires an understanding of culture, laws, local buyer preferences and business practices, and a host of contact, communication, and transportation details referred to as "setting up a distribution channel.") The conquest of a new source of supply of raw materials or components: Moving a shoe manufacturer from the U.S. to Mexico to access cheaper labor Finding a new source of oil previously not discovered The reorganization of any industry: Several years ago, the U.S. government believed that one telephone company, Bell, had formed a monopoly. The company was broken up, making the way for new, smaller telephone companies to form.

Explain techniques that entrepreneurs can use to recognize opportunities (e.g., analogies, pattern recognition, experiments, simulation of prototypes. reverse engineering, etc.). Analogies Comparing an unfamiliar abstract idea with an already known mental image. It's like painting a picture in the listener's mind. What the utilization of analogies and comparisons does is to change the frame of reference and to force thinking in new and interesting ways. If a person is only thinking of the problem in its own terms, the number of possible solutions is very limited. By making analogies, and forced comparisons, the opportunities for new and creative solutions are multiplied many times over. Copied from: Hurlbert, W. (2006, March 2). Blog Business World: Analogies: Making the Connection. Retrieved April 12, 2011, from http://blogbusinessworld.blogspot.com/2006/03/analogies-makingconnection.html Pattern recognition Many problems can be diagnosed and remedied in a pattern-recognition mode. Like a doctor looking to diagnose an ailment, look for patterns occurring. For example, if you're always thirsty, you urinate frequently, you're losing weight, and your eyesight is blurry, you have diabetes. Prototype Definition: a 3-dimensional version of your vision Here’s why a prototype is helpful to discovery: 1. It enables you to test and refine the functionality of your design.* Sure, your idea works perfectly in theory. It's not until you start physically creating it that you'll encounter flaws in your thinking. That's why another great reason to develop a prototype is to test the functionality of your idea. You'll never know the design issues and challenges until you begin actually taking your idea from theory to reality.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Briefing: Entrep. Discovery Processes

Page 5-22

2. It makes it possible to test the performance of various materials.* For example, your heart may be set on using metal—until you test it and realize that, say, plastic performs better at a lower cost for your particular application. The prototype stage will help you determine the best materials. 3. It'll help you describe your product more effectively with your team, including your attorney, packaging or marketing expert, engineers and potential business partners.* 4. It will encourage others to take you more seriously. Copied from: Monosoff, T. (2011). Entrepreneur.com. Creating a product prototype. Retrieved April 19, 2011, from http://www.entrepreneur.com/startingabusiness/inventing/inventionscolumnistt amaramonosoff/article80678.html Reverse engineering Definition: examining a completed product with the intent of understanding the technology and process used in its design, manufacture, or operation Copied from: Online Ethics Center. (2006, February 16). Benchmarking and reverse engineering. Retrieved April 19, 2011, from http://www.onlineethics.org/CMS/workplace/workcases/tiethics/benchmarking.aspx#revers Discuss ways that entrepreneurs try to distinguish themselves from their competitors. Determine your product/ideas major selling advantage: what will make a customer buy you and not a competitor? What makes your product different from the competition? This may be a product feature, type of service provided, etc. Discuss stages of entrepreneurial processes.   

Discovery Evaluation Exploitation

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-23

Knowledge/ Skill Statement

Understands the tools, strategies, and systems needed to access, process, maintain, evaluate, and disseminate information to assist business decision-making.

Instructional Area

Information Management

Performance Element

Acquire information to guide business decision-making.

Performance Indicator

Conduct an environmental scan to obtain business information (NF:015, NF LAP 2)

Level

Specialist

SCANS

Information 5-8; Systems 15; Basic Skills 1-3, 5-6; Thinking Skills 8-9, 12

21st Century Skills

Critical Thinking and Problem Solving Skills 1, 3; Information Literacy 1; Communication & Collaboration 1

Objectives

a. b. c. d.

e. f. g. h.

Performance Activity

Define the term environmental scanning. Identify environments that businesses should scan to obtain marketing information. Discuss the purpose of environmental scanning. Discuss factors involved in conducting an environmental scan (e.g., influencing the demand/need for services [and products], the supply of inputs to the project/organization concerned, the competition and collaboration and general policy factors). Explain reasons for conducting an environmental scan. Describe tools that are used to conduct environmental scans. Discuss the use of environmental scans to facilitate management decision making. Demonstrate procedures for conducting an environmental scan.

Note to the Instructor: Review and present the Conducting an Environmental Scan briefing (p. 5-25) to students in a lecture or discussion format. Conduct an environmental scan to identify ways in which economic, legal, political, socioeconomic, global, and technological environments are impacting local businesses. Conduct both primary and secondary research to determine how these different factors are affecting the businesses, as well as how the businesses are responding to those factors. Develop a written report detailing your findings, and insert your report into your VIP portfolio. Review and update your findings quarterly. Note to the Instructor: A rubric suitable for evaluating each student’s environmental scan is provided on pp. 5-26 and 5-27.

Resources LAP

MBAResearch and Curriculum Center. (2010).Get the 411(Conducting Environmental Scans [LAP: NF-002]. Columbus, OH: Author. MBAResearch and Curriculum Center. (2010). Get the 411(Conducting Environmental Scans): Instructor copy [LAP: NF-002]. Columbus, OH: Author.

Textbooks

Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 64-78). New York: McGraw-Hill. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-24

Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 77-78). Mason, OH: South-Western Cengage Learning. Etzel, M.J., Walker, B.J. & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 28-42]. New York: McGraw-Hill/Irwin. Farese, L.S., Kimbrell, G. & Woloszyk, C.A. (2009). Marketing essentials (pp. 30, 84-87). Woodland Hills, CA: Glencoe/McGraw-Hill. Gaspar, J.E., Bierman, L., Kolari, J.W., Hise, R.T., Smith, L.M., Arreola-Risa, A. & Welch, B. (2006). Introduction to business (pp. 165-166). Boston: Houghton Mifflin Company. Gitman, L.J. & McDaniel, C. (2008). The future of business: The essentials (3rd ed.) [pp. 375-376]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 31-32]. New York: McGraw-Hill Irwin. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 56, 60-61]. Mason, OH: Thomson South-Western. Nickels, W.G., McHugh, J.M., McHugh, S.M. (2008). Understanding business (8th ed.) [pp. 358-361]. New York: McGraw-Hill. Soloman, M. R., Marshall, G. W., & Stuart, E. W. (2008). Marketing: Real people, real choices (5th ed.) [p. 44]. Upper Saddle River, NJ: Pearson Prentice Hall Software/ Online

Abels, E. (2002, February/March). Hot topics: Environmental scanning. Retrieved April 11, 2011, from http://www.allbusiness.com/management/912239-1.html Bacal, R. (2002-2010) What is an environmental scan? Retrieved April 11, 2011, from http://www.work911.com/planningmaster/faq/scan.htm Conway, M. (2009). Environmental scanning…what is it and how to do it. Retrieved April 11, 2011, from http://www.slideshare.net/mkconway/environmentalscanning-what-it-is-and-how-to-do-it Cornerstones 4 Kids. (2010). Data collection: Environmental scan. Retrieved April 11, 2011, from http://portal.cornerstones4kids.org/collection/ Docstat.com. (2010). Environmental scan template. Retrieved April 11, 2011, from http://www.docstoc.com/docs/450135/environmental-scan-template/ Humphries, C. (2004, May). Look out! Environmental scanning for associations. Retrieved April 11, 2011, from http://www.axi.ca/tca/may2004/associatearticle_1.shtml Georgia Merit System. (2000-2011). Workforce planning: Environmental scanning. Retrieved April 11, 2011, from http://www.gms.state.ga.us/agencyservices/wfplanning/environment.asp MBAResearch and Curriculum Center. (2010). Get the 411 (Conducting Environmental Scans) [LAP: NF-002: Presentation Software]. Columbus, OH: Author. Morrison, J.L. (2005, March 9). Environmental scanning. Retrieved April 11, 2011, from http://horizon.unc.edu/courses/papers/enviroscan/

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Key Points

Briefing: Conducting an Environmental Scan

Page 5-25

Define environmental scan. An analysis and evaluation process that businesses use to understand their current environment Explain why businesses conduct environmental scans. The aim is to identify trends, gaps, events, developments, and issues that will impact the businesses. Discuss the nature of the end product. The identification of a number of broad factors and issues that will have a significant impact on businesses and their plans for the future Discuss importance of environmental scanning. Aids in anticipating changes Answers the question, “Where are we now?” Provides a starting point for businesses’ planning of goals, objectives, and actions that answer the question, “Where do we want to be?” Identify questions that businesses should ask when conducting an environmental scan. What is the current external environment? What are the implications of these issues for business? What key forces in the business’s environment need to be addressed and which ones are less important? What trends and issues are affecting business? What is the impact of the trends on business? How might the environment change in the future? How will businesses’ decisions and actions influence this environment? How do customers, interest groups, community organizations, agencies or governments impact the environment? What factors are within a business’s control and which are beyond its influence? What could a business do to affect the impact of these factors? Identify sources students might access in conducting an environmental scan. Examples: Interviews with business officers, owners, managers Comments made by business officers, owners, managers National and local newspapers Trade publications Business magazines Websites: Hoover’s, Morningstar, brokerage firms, credible financial sites Observations Research findings Input from professional organizations

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Rubric: Conducting an Environmental Scan Criteria Content The information contained in and communicated by the environmental scan 60 points

Professional

Experienced

Developing

Novice

 Gathered sufficient/current information from a variety of reliable sources.

 Gathered adequate/mostly current information, but sources were somewhat limited.

 Gathered information, but much of it was outdated, and not all sources were reliable.

 Gathered poor quality information.

 Correctly identified relevant, accurate economic information, referencing specific ways this information could impact business.

 With few exceptions, correctly identified relevant, accurate economic information, referencing fairly specific ways this information could impact business.

 Often omitted relevant, accurate economic information or included unimportant information; s/he had trouble referencing ways this information could impact business.

 Was not able to identify relevant, accurate economic information.

 Correctly identified relevant, accurate legal information, referencing specific ways this information could impact business.

 With few exceptions, correctly identified relevant, accurate legal information, referencing fairly specific ways this information could impact business.

 Often omitted relevant, accurate legal information or included unimportant information; s/he had trouble referencing ways this information could impact business.

 Was not able to identify relevant, accurate legal information.

 Correctly identified relevant, accurate social and cultural information, referencing specific ways this information could impact business.

 With few exceptions, correctly identified relevant, accurate social and cultural information, referencing fairly specific ways this information could impact business.

 Often omitted relevant, accurate social and cultural information or included unimportant information; s/he had trouble referencing ways this information could impact business.

 Was not able to identify relevant, accurate social and cultural information.

 Correctly identified relevant, accurate global information, referencing specific ways this information could impact business.

 With few exceptions, correctly identified relevant, accurate global information, referencing fairly specific ways this information could impact business.

 Often omitted relevant, accurate global information or included unimportant information; had trouble referencing ways this information could impact business.

 Was not able to identify relevant, accurate global information.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Page 5-26

Rubric: Conducting an Environmental Scan Criteria

Communication Skills The ability to express oneself so as to be understood by others 25 points

Organization The way in which the information is put together 15 points

Professional

Experienced

Developing

 Correctly identified relevant, accurate technological information, referencing ways this information could impact business.

 With few exceptions, correctly identified relevant, accurate technological information, referencing fairly specific ways this information could impact business.

 Often omitted relevant, accurate technological information or included unimportant information; s/he had trouble referencing ways this information could impact business.

 Was not able to identify relevant, accurate technological information.

 Information was clear and easy to understand.

 Information was clear with only a few items being difficult to understand.

 Information was not clear and took much effort to understand.

 Information was too vague to understand.

 Completed environmental scan was neat, grammatically correct, and error-free.

 Completed environmental scan was neat but contained minor errors.

 Completed environmental scan contained spelling and grammatical errors that were distracting.

 Completed environmental scan was messy, with many errors in spelling and grammar.

 Environmental scan components were clearly identified.

 Environmental scan components were identified, but not always clearly.

 Environmental scan components were identified, but not clearly.

 Environmental scan components were not identified at all.

 Information presented was logical and easy to follow.

 Information presented was generally logical and easy to follow.

 Information presented was sometimes difficult to follow.

 Information was difficult to follow and illogical.

 Supporting documentation was complete and clearly labeled.

 Supporting documentation was clearly labeled, but some items were missing.

 Some supporting documentation was missing, and some was inaccurately labeled.

 Supporting documentation was not provided.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Novice

Page 5-27

Section 5

Planning Guide Sheets

Page 5-28

Knowledge/ Skill Statement

Understands the concepts, processes, and skills associated with identifying new ideas, opportunities, and methods and with creating or starting a new project or venture

Instructional Area

Entrepreneurship

Performance Element

Employ entrepreneurial discovery strategies to generate feasible ideas for business ventures/products.

Performance Indicator

Assess global trends and opportunities for business ventures/products (EN:003)

Level

Owner

SCANS

Information 5, 7; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 7, 12

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 3; Creativity and Innovation 3-4; Critical Thinking and Problem Solving 1, 3-5; Communication and Collaboration 1; Information Literacy 1; ICT Literacy 1-2; Leadership and Responsibility 4

Objectives

a.

b.

c.

Performance Activity

Identify sources of information about global trends and opportunities for business ventures/products (e.g., newspapers, trade publications, research institutes, travel, trade shows, etc.). Determine current global trends (e.g., macroeconomic, industry, technological, political, legal, regulatory, social, demographic, etc.) and opportunities for business ventures/products. Evaluate the potential of global trends and opportunities for business ventures/products.

Conduct research to locate examples of three recent global trends and opportunities for business ventures/products. Prepare and deliver a short presentation to the class explaining the trends and opportunities, and discuss the potential of new business ventures/products resulting from these trends and opportunities. After everyone has made his/her presentation, discuss similarities and differences among the class’s findings. Compile a list of the trends and opportunities that the class identified, and insert it into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [p. 65]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 72-75, 80-83). Woodland Hills, CA: Glencoe/McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 39-41]. Mason, OH: South-Western Cengage Learning. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 202, 217-221). Mason, OH: South-Western Cengage Learning. Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (p. 703). Woodland Hills, CA: Glencoe/McGraw-Hill. Gartner, W.B., & Bellamy, M.G. (2009). Creating the enterprise (pp. 180-181). Mason, OH: Thomson South-Western. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 46-49]. Mason, OH: Thomson/South-Western. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-29

Hisrich, R.D., Peters, M.P., & Shepherd, D.A. (2010). Entrepreneurship (8th ed.) [pp. 96-97]. New York: McGraw-Hill/Irwin. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 15-19]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [p. 135]. Mason, OH: Thomson South-Western. Kuratko, D.G., & Hodgetts, R.M. (2007). Entrepreneurship: Theory, process, practice (7th ed.) [pp. 13-14, 127]. Mason, OH: Thomson South-Western. Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [pp. 117-118, 275-276]. Upper Saddle River, NJ: Prentice-Hall. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 375-382]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [p. 530]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Soloman, M. R., Marshall, G. W., & Stuart, E. W. (2008). Marketing: Real people, real choices (5th ed.) [pp. 76-77, 82-84]. Upper Saddle River, NJ: Pearson Prentice Hall. Software/ Online

Ernst & Young. (n.d.). Tracking global trends: How six key developments are shaping the business world. Retrieved April 12, 2011, from http://www.ey.com/GL/en/Issues/Business-environment/Six-global-trendsshaping-the-business-world Global Trends. (2010). Retrieved April 12, 2011, from http://www.globaltrends.com/ Hornblower, J. (2008, November 18). Identifying venture opportunities. Retrieved April 11, 2011, from http://www.gsb.stanford.edu/ces/teaching/documents/IdentifyingVentureOpport unitiesE323November182008.pdf Poirault, J. & Bream, K. (2010, July 7). Global trends drive business strategies. Retrieved April 11, 2011, http://www2.alcatel-lucent.com/enrich/en/v4i2/globaltrends-drive-business-strategies/ Small Business Going Global.com (2010-2011). Small business opportunities— entering the global arena. Retrieved April 11, 2011, from http://www2.alcatellucent.com/enrich/en/v4i2/global-trends-drive-business-strategies/ Trend Tracker. (2003-2009). Trend: Small business market goes global. Retrieved April 12, 2011, http://trendtracker.blogspot.com/2004/02/trend-small-businessmarket-goes.html Zahorsky, D. (2011). Emerging business trends that will rock the world. Retrieved April 13, 2011, http://sbinformation.about.com/od/bestpractices/a/businesstrends.htm

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-30

Knowledge/ Skill Statement

Understands the concepts, processes, and skills associated with identifying new ideas, opportunities, and methods and with creating or starting a new project or venture

Instructional Area

Entrepreneurship

Performance Element

Employ entrepreneurial discovery strategies to generate feasible ideas for business ventures/products.

Performance Indicator

Determine opportunities for venture/product creation (EN:004)

Level

Owner

SCANS

Information 5; Systems 15, 17; Basic Skills 1-2, 5-6; Thinking Skills 7-9, 12

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 3; Creativity and Innovation 2-4; Critical Thinking and Problem Solving 1, 3-5; Communication and Collaboration 1; Information Literacy 1

Objectives

a. b. c. d. e. f.

Performance Activity

Distinguish between outside-in and inside-out analyses used to identify opportunities for business ventures. Discuss ways in which work experience can help an entrepreneur to identify opportunities for venture/product creation. Describe the impact of educational background on an entrepreneur’s determination of opportunities for venture/product creation. Explain the importance of considering personal interests when determining opportunities for venture/product creation. Explain ways in which experiences as a retail or industrial customer can be used to identify venture/product opportunities. Demonstrate methods used to determine opportunities for venture/product creation.

Use the handout Think, Think, Think! to identify and record several possible opportunities for venture/product creation. Think about what you’ve noticed or learned at work about a particular industry, products, competitors, production methods, etc.; what you do in your free time, including personal interests and hobbies; the frustrations and problems that you have experienced as a customer; complaints and ideas that other people have shared with you; local, regional, national, and international trends and changes that are intriguing to you; and other random thoughts and observations that you have had pertaining to venture/product opportunities. Be sure to consider needs, wants, and obstacles that you or others have had or experienced. After completing the handout, discuss the opportunities for venture/product creation that you identified with a group of classmates. Add to your handout as needed, and insert it into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [p. 56]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 54-56). Woodland Hills, CA: Glencoe/McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 13-14, 39-40, 84-89]. Mason, OH: South-Western Cengage Learning. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-31

Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 48-49, 64). New York: McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 10-11]. Mason, OH: Thomson/South-Western. Hisrich, R.D., Peters, M.P., & Shepherd, D.A. (2010). Entrepreneurship (8th ed.) [pp. 8-9, 67-70, 110-111, 128-130]. New York: McGraw-Hill/Irwin. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 80-84]. New York: McGraw-Hill Irwin. Kuratko, D.G., & Hodgetts, R.M. (2007). Entrepreneurship: Theory, process, practice (7th ed.) [pp. 127, 129-132]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 50-61]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 94-97]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Software/ Online

Hornblower, J. (2008, November 18). Identifying venture opportunities. Retrieved April 13, 2011, from http://www.gsb.stanford.edu/ces/teaching/documents/IdentifyingVentureOpport unitiesE323November182008.pdf Knowledge@Wharton. (2009, November 9). How entrepreneurs identify new business opportunities. Retrieved April 13, 2011, from http://knowledge.wharton.upenn.edu/article.cfm?articleid=2370 Leopold, D. (n.d.). How I became an entrepreneur. Retrieved April 13, 2011, from http://www.teenvestor.com/entrepreneurs/biz_benefits/hobbies.htm Marcus, E. (2010, November 24). Why is entrepreneurial opportunity recognition important? Retrieved April 13, 2011, from http://www.ehow.com/facts_7552570_entrepreneurial-opportunity-recognitionimportant.html McCune, J. (2008, November 2). How to turn your hobby into a successful business. Retrieved April 13, 2011, from http://www.thirdage.com/startingmanaging-a-business/how-to-turn-your-hobbyinto-a-successful-business Utilium Network. (2008, April 14). New venture opportunities. Retrieved April 13, 2011, from http://utilium.com/study_packs/123

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Handout: Think, Think, Think!

Page 5-32

What I’ve Noticed/Learned at Work

What I Do in My Free Time

My Experiences as a Customer

What Other People Have Told Me

Intriguing Changes & Trends

Random Thoughts & Observations

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-33

Knowledge/ Skill Statement

Understands the concepts, processes, and skills associated with identifying new ideas, opportunities, and methods and with creating or starting a new project or venture

Instructional Area

Entrepreneurship

Performance Element

Employ entrepreneurial discovery strategies to generate feasible ideas for business ventures/products.

Performance Indicator

Assess opportunities for venture/product creation (EN:005)

Level

Owner

SCANS

Information 5; Systems 15, 17; Basic Skills 1-2, 5-6; Thinking Skills 8, 12; Personal Qualities 16

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 3; Critical Thinking and Problem Solving 1-5; Communication and Collaboration 1; Information Literacy 1; Initiative and Self-Direction 1; Leadership and Responsibility 4

Objectives

a. b. c. d. e. f. g.

Performance Activity

Discuss the importance of determining if opportunities for venture/product creation address specific unmet needs or problems. Explain reasons to analyze the entrepreneur and his/her team when assessing opportunities for venture/product creation. Describe reasons to consider needed resources when assessing opportunities for venture/product creation. Explain the need to examine market structure when assessing opportunities for venture/product creation. Explain the importance of evaluating market timing when assessing opportunities for venture/product creation. Discuss techniques that entrepreneurs use to assess venture/product opportunities. Demonstrate processes used to assess opportunities for venture/product creation.

Review the venture/product opportunities that you identified on your Think, Think, Think! handout. Use word-processing software to analyze each of the opportunities listed on your handout. For each opportunity for venture/product creation: a. b. c. d. e. f.

Identify the opportunity. Explain what specific unmet need is being addressed. Indicate whether you have the knowledge and skills necessary to pursue the opportunity. Identify resources that would be needed to pursue the opportunity. Discuss the market structure, including industry competitors, that most closely “fits” with the opportunity. Describe whether the timing is right to pursue the opportunity.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-34

Analyze your findings, and identify the opportunity for venture/product creation that you believe would be best to pursue. Use presentation software to explain the opportunity to your classmates, your instructor, or a SCORE representative, and discuss why you feel it is the best opportunity to pursue at this juncture. Obtain their feedback, and make modifications/additions as necessary. Insert your Think, Think, Think! handout, your written document, and your presentation handouts into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 68-69, 253-256]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 19-20, 60, 126-128, 208-209, 344-347). Woodland Hills, CA: Glencoe/McGraw-Hill. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 51-57, 66). New York: McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 46-49, 54-59, 109-110, 446-49, 54-59, 109-110]. Mason, OH: SouthWestern Cengage Learning. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 282-283, 286]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 56-58]. Mason, OH: Thomson/South-Western. Hisrich, R.D., Peters, M.P., & Shepherd, D.A. (2010). Entrepreneurship (8th ed.) [pp. 46-47, 68-72, 116, 129, 195-196]. New York: McGraw-Hill/Irwin. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 158, 186, 198-199, 203-204]. New York: McGraw-Hill Irwin. Kuratko, D.G., & Hodgetts, R.M. (2007). Entrepreneurship: Theory, process, practice (7th ed.) [pp. 424, 358-359]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 50-51, 55, 59-60, 189]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 68-69, 86-87]. New York: The National Foundation for Teaching Entrepreneurship, Inc.

Software/ Online

Ali, S. (n.d.). New product development process: Stage 2. Retrieved April 13, 2011, from http://mgmt280.blogspot.com/2009/12/new-product-developmentprocess-stage-2.html Bertels, T. (n.d.). Using innovation to address unmet customer needs. Retrieved April 13, 2011, from http://www.realinnovation.com/content/c061002a.asp Hornblower, J. (2008, November 18). Identifying venture opportunities. Retrieved April 13,, 2011, from http://www.gsb.stanford.edu/ces/teaching/documents/IdentifyingVentureOpport unitiesE323November182008.pdf Knowledge@Wharton. (2009, November 9). How entrepreneurs identify new business opportunities. Retrieved April 13, 2011, from http://knowledge.wharton.upenn.edu/10000women/article.cfm?articleid=6129 Lucintel. (n.d.). Opportunity screening and analysis. Retrieved April 13, 2011, from http://www.lucintel.com/opportunity_screening.aspx Marcus, E. (2010, November 24). Why is entrepreneurial opportunity recognition important? Retrieved April 13, 2011, from http://www.ehow.com/facts_7552570_entrepreneurial-opportunity-recognitionimportant.html Product screening and market opportunity identification. (n.d.). Retrieved April 13, 2011, from http://webapp.ciat.cgiar.org/africa/pdf/eri_guide2/section_7.pdf Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

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Spaeder, K. (n.d.). How to research your business idea. Retrieved April 13, 2011, from http://www.entrepreneur.com/article/70518-1 Youngleson, J.S. (2009). Screening of new venture opportunities. Retrieved March 8, 2011, from http://mba6601entrepreneurialmanagement.wiki.usfca.edu/file/view/Screening+of+New+Ventu re+Opportunities.pdf

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Planning Guide Sheets

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Knowledge/ Skill Statement

Understands the concepts and processes needed to obtain, develop, maintain, and improve a product or service mix in response to market opportunities

Instructional Area

Product/Service Management

Performance Element

Generate venture/product ideas to contribute to ongoing business success.

Performance Indicator

Identify methods/techniques to generate a venture/product idea (PM:127, PM LAP 11)

Level

Specialist

SCANS

Information 5; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 7-9

21st Century Skills

Critical Thinking & Problem Solving 1,2,4,5; Creativity & Innovation 1,2,3,4

Objectives

a.

b. c. d. e. f. g. h. i.

Performance Activity

Define the terms attribute listing, lateral thinking, analogies, associations, brainstorming, synectics, sketching and doodling, forced questioning, and morphological analysis. Explain the role of criticism in idea creation. Describe types of brainstorming techniques. Distinguish among free association techniques, forced relations techniques, and analytical techniques used to generate business/product ideas. Explain sources of business/product ideas. Discuss the importance of evaluating a business owner’s strengths when generating business/product ideas. Describe pitfalls to idea identification. Discuss the importance of generating business/product ideas. Explain methods/techniques used to identify business/product ideas.

Identify two methods/techniques that you could use to generate venture/product ideas. Record the advantages and disadvantages of each strategy, and explain to a classmate how you plan to implement the methods/techniques. Insert the completed document into your VIP portfolio.

Resources LAP

MBAResearch and Curriculum Center. (2011). Unleash Your Oh! Zone (Idea Generation) [LAP: PM-011]. Columbus, OH: Author. MBAResearch and Curriculum Center. (2011). Unleash Your Oh! Zone (Idea Generation): Instructor copy [LAP: PM-011]. Columbus, OH: Author.

Textbooks

Allen, K.R., & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 50-56). New York: Glencoe/McGraw-Hill. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 48-49). New York: McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [p. 68]. Mason, OH: South-Western Cengage Learning. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (p. 398). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 278-279]. Mason, OH: Thomson/South-Western. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 279-280]. Tinley Park, IL: Goodheart-Willcox Company, Inc. DuBrin, A. (2009). Essentials of management: Instructor’s edition (8th ed.) [pp.174179]. Mason, OH: South-Western Cengage Learning. Etzel, M.J., Walker, B.J., & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 219220].Boston: McGraw-Hill/Irwin. Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (3rd ed.) [pp. 637, 638]. Mission Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 44-45]. Mason, OH: Thomson/South-Western. Griffin, R.W., & Moorhead, G. (2010). Organizational behavior: Managing people and organizations (9th ed.) [pp. 211-213]. Mason, OH: South-Western Cengage Learning. Hisrich, R.D., Peters, M.P., & Shepherd, D.A. (2010). Entrepreneurship (8th ed.) [pp. 100-106]. New York: McGraw-Hill/Irwin Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 87-90, 9798]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 132139]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 16, 52-53]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 3-4, 42-46, 81-82]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Software/ Online

Albo, B. 2008, May 10). Sources for new business ideas. Retrieved April 12, 2011, from http://entrepreneurs.suite101.com/article.cfm/sources_for_new_business_idea s Chua, C. (n.d.). 25 brainstorming techniques. Retrieved April 12, 2011, from http://celestinechua.com/blog/2009/02/25-brainstorming-techniques/ Creatingminds.org. (2002-2010). Tools for creating ideas. Retrieved April 12, 2011, from http://creatingminds.org/tools/tools_ideation.htm MBAResearch and Curriculum Center. (2011). Unleash Your Oh! Zone (Idea generation) [LAP: PM-011—Presentation Software]. Columbus, OH: Author. Mindmapping.com. (2011). What is mind mapping? Retrieved April 12, 2011, from http://www.mindmapping.com/ MindTools.com. (1996-2011). Attribute listing, morphological analysis and matrix analysis: Creating new products and services. Retrieved April 12, 2011, from http://www.mindtools.com/pages/article/newCT_03.htm MindTools.com (1996-2011). Metaphorical thinking: Using comparisons to express ideas and solve problems. Retrieved April 12, 2011, from http://www.mindtools.com/pages/article/newCT_93.htm MindTools.com. (1996-2011). Reverse brainstorming. Retrieved April 12, 2011, from http://www.mindtools.com/pages/article/newCT_96.htm MindTools.com. (1996-2011). Starbursting. Retrieved April 12, 2011, from http://www.mindtools.com/pages/article/newCT_91.htm MindTools.com. (1996-2011). Synectics: A useful backstop creativity process. Retrieved April 12, 2011, from http://www.mindtools.com/pages/article/newCT_99.htm Rucinski, S. (2006, May 24). 7 sources of business ideas. Retrieved April 12, 2011, from http://www.bizinformer.com/50226711/7_sources_of_business_ideas.php

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Knowledge/ Skill Statement

Understands concepts, tools, and strategies used to explore, obtain, and develop in a business career

Instructional Area

Professional Development

Performance Element

Utilize critical-thinking skills to determine best options/outcomes.

Performance Indicator

Demonstrate appropriate creativity (PD:012, QS LAP 5)

Level

Specialist

SCANS

Information 5; Systems 15; Basic Skills 1-2; Thinking Skills 7, 12

21st Century Skills

Creativity & Innovation 1, 2, 4; Communication & Collaboration 1

Objectives

a. b. c. d. e. f.

Performance Activity

Search the Internet for two examples of creativity in business. Record your findings, and discuss them with the class, identifying the impact of the examples on business.

Define the term creativity. Identify personal traits commonly associated with creativity. Describe ways in which people can demonstrate creativity. Describe specific techniques for developing/enhancing creativity. Explain how creativity can be applied beneficially to solve problems. Apply creativity to situations.

Use the Internet, your classmates, and other resources to start thinking about possible venture/product ideas. Generate a list of five or more possibilities, and discuss them with your class. Insert your list into your VIP portfolio.

Resources LAPs

Marketing Education Resource Center. (2005). Beyond the Box [LAP: QS-005]. Columbus, OH: Author. Marketing Education Resource Center. (2005). Beyond the Box: Instructor copy [LAP: QS-005]. Columbus, OH: Author.

Textbooks

Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 50-56). Woodland Hills, CA: Glencoe/McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 76-83]. Mason, OH: South-Western Cengage Learning. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 17-18). Mason, OH: South-Western Cengage Learning. Cheesebro, T., O’Connor, L., & Rios, F. (2007). Communication skills: Preparing for career success (3rd ed.) [pp. 210-213}. Upper Saddle River, NJ: Pearson Prentice Hall. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [p. 280]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Daft, R.L. (2008). The leadership experience (4th ed.) [pp. 459, 461, 463-470]. Mason, OH: Thomson: South-Western. Daft, R.L., & Marcic, D. (2009). Understanding management: Instructor’s edition (6th ed.) [pp. 290-291]. Mason, OH: South-Western Cengage Learning. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Dessler, G., & Varkkey, B. (2009). Human resource management (11th ed.) [p. 476]. New Dehli, India: Dorling Kindersley. DuBrin, A. (2009). Essentials of management: Instructor's edition (8th ed.) [pp. 168174]. Mason, OH: South-Western Cengage Learning. DuBrin, A. (2010). Leadership: Research findings, practice, and skills (6th ed.) [pp. 55, 312-346]. Mason, OH: South-Western Cengage Learning. Hisrich, R.D., Peters, M.P., & Shepherd, D.A. (2010). Entrepreneurship (8th ed.) [pp. 102-106]. New York: McGraw-Hill/Irwin. Ivancevich, J.M., Konopaske, R., & Matteson, M.T. (2008). Organizational behavior and management (8th ed.) [pp. 79-80, 398-400]. New York: McGraw-Hill Irwin. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 87-89, 97]. New York: McGraw-Hill Irwin. Kouzes, J.M. & Posner, B.Z. (2003). The leadership challenge (3rd ed.) [pp. 8-12]. San Francisco, CA: Jossey-Bass. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 34,130-134, 136-140]. Mason, OH: Thomson South-Western. Lussier, R.N., & Achua, C.F. (2010). Leadership: Theory, application, & skill development (4th ed.) [pp. 291, 397, 469-470]. Mason, OH: South-Western Cengage Learning. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 80-83]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Nelson, D.L., & Quick, J.C. (2006). Organizational behavior: Foundations, realities, & challenges (5th ed.) [pp. 176-177, 298-299, 327-329, 331]. Mason, OH: South-Western. Software/ Online

Baumgartner, J. (2008, April 22). To encourage the flow of ideas, remember the three Cs. Retrieved April 12, 2011, from http://www.innovationtools.com/Articles/ArticleDetails.asp?a=313 Cherry, K. (n.d.). How to boost your creativity. Retrieved April 12, 2011, from http://psychology.about.com/od/cognitivepsychology/tp/how-to-boostcreativity.htm Clark, D. (2005, November 13). Creativity. Retrieved April 12, 2011, from http://www.nwlink.com/~donclark/creativity/creativity.html Marketing Education Resource Center. (2005). Beyond the Box [LAP: QS-005: Presentation Software]. Columbus, OH: Author. Eikenberry, K. (2008, February 21). Eight ways to generate more ideas in a group. Retrieved April 12, 2011, from http://www.innovationtools.com/Articles/ArticleDetails.asp?a=300 Mind Tools. (1996-2011). Brainstorming—Generating many radical ideas. Retrieved April 19, 2011, from http://www.mindtools.com/pages/article/newCT_04.htm Naiman, L. (2010). What is creativity? Retrieved April 12, 2011, from http://www.creativityatwork.com/articlesContent/whatis.htm Rowse, D. (2007, May 9). 9 Attitudes of highly creative people. Retrieved April 12, 2011, from http://www.problogger.net/archives/2007/05/09/9-attitudes-ofhighly-creative-people/

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Knowledge/ Skill Statement

Understands the concepts, processes, and skills associated with identifying new ideas, opportunities, and methods and with creating or starting a new project or venture

Instructional Area

Entrepreneurship

Performance Element

Employ entrepreneurial discovery strategies to generate feasible ideas for business ventures/products.

Performance Indicator

Generate venture/product ideas (EN:006)

Level

Owner

SCANS

Information 5-7; Interpersonal 9,12; Systems 15,17; Basic Skills 1-2,5-6; Thinking Skills 7,9,12

21st Century Skills

Critical Thinking & Problem Solving 1,2,4,5; Creativity & Innovation 1,2,3

Objectives

Performance Activity

a. b. c. d. e.

Identify purposes of idea-generating methods/techniques. Discuss advantages/disadvantages of idea-generating methods/techniques. Explain the role of a facilitator in generating venture/product ideas. List questions to ask to facilitate idea generation. Implement methods/techniques to generate venture/product ideas.

Using the methods/techniques selected in an earlier activity, generate as many different venture/product ideas as possible for the opportunity that you assessed and selected previously. Share your ideas with two or three classmates, add to your list as necessary, and insert your list of venture/product ideas into your VIP portfolio.

Resources Textbooks

Allen, K.R., & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 50-56). New York: Glencoe/McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 68, 94]. Mason, OH: South-Western Cengage Learning. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 397-398). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 279-280]. Mason, OH: Thomson/South-Western. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [p. 280]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Etzel, M.J., Walker, B.J., & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 219220].Boston: McGraw-Hill/Irwin. Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (3rd ed.) [pp. 637, 638]. Mission Hills, CA: Glencoe/McGraw-Hill. Hisrich, R.D., Peters, M.P., & Shepherd, D.A. (2010). Entrepreneurship (8th ed.) [pp. 99-101]. New York: McGraw-Hill/Irwin Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [p. 279]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 130140]. Mason, OH: Thomson South-Western. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 50-56, 313]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 42-46, 86-87]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Software/ Online

Bacal, R. (n.d.). The role of the facilitator: Understanding what facilitators really do. Retrieved April 12, 2011, from http://work911.com/articles/facil.htm Brooks, A. (1999-2011). How to generate product ideas. Retrieved April 12, 2011, from http://www.ehow.com/how_4811754_generate-new-product-ideas.html Clarke, S. (2005, December 6). Effective facilitation. Retrieved April 12, 2011, from http://tilz.tearfund.org/Publications/Footsteps+5160/Footsteps+60/Effective+facilitation.htm Cognitiveprocesses.com (2001-2008). Cognitive processes and idea generation. Retrieved April 12, 2011, from http://www.cognitiveprocesses.com/ideageneration.html Diamond, C. (2008, June 8). Facilitating brainstorming sessions: Setting the stage. Retrieved April 12, 2011, from http://ideafacilitators.wordpress.com/2008/06/08/facilitating-brainstormingsessions-setting-the-stage/ Diamond, C. (2008, June 17). Facilitating idea generation—divergence and convergence. Retrieved April 12, 2011, from http://ideafacilitators.wordpress.com/2008/06/17/faciliating-brainstormingsessions-divergence-and-convergence/ Infinite Innovations. (1997-2008). Benefits of brainstorming and techniques for problem solving. Retrieved April 12, 2011, from http://www.brainstorming.co.uk/tutorials/benefitsofbrainstorming.html Phillips, J. (2006, August 7). What’s wrong with idea generation. Retrieved April 12, 2011, from http://innovateonpurpose.blogspot.com/2006/08/whats-wrong-withidea-generation.html Sanjaya, A.K. (n.d.). Discover 11 easy ways to generate product ideas. Retrieved April 12, 2011, from http://www.scribd.com/doc/21444178/Discover-11-EasyWays-To-Generate-Product-Ideas The Arts Institute at Virginia Tech. (2009). Idea generation. Retrieved April 12, 2011, from http://www.soe.vt.edu/IDEAS/Handouts/IdeaGeneration.pdf The Learning Curriculum. (n.d.). Generating and organizing ideas. Retrieved April 12, 2011, from http://www.lib.umd.edu/groups/learning/handouts/genorgideas.pdf Tripod. (n.d.) Problem solving techniques. Retrieved April 12, 2011, from http://eng50411.tripod.com/psolving.htm

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Knowledge/ Skill Statement

Understands the concepts and processes needed to obtain, develop, maintain, and improve a product or service mix in response to market opportunities

Instructional Area

Product/Service Management

Performance Element

Employ product-mix strategies to meet customer expectations.

Performance Indicator

Identify venture/product to fill customer need (PM:130)

Level

Manager

SCANS

Information 5-6; Interpersonal 11; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 12

21st Century Skills

Critical Thinking and Problem Solving 1-5; Communication and Collaboration 1; Information Literacy 1; Leadership and Responsibility 4

Objectives

a. b. c. d.

Performance Activity

Describe reasons for understanding a venture’s/product’s benefits. Discuss ways that a business can use knowledge of venture/product benefits in marketing planning. Describe techniques for obtaining customer input on venture/product benefits. Demonstrate procedures for identifying venture/product to fill customer’s needs.

Using the list that you created in the previous activity, choose three ventures/products that you believe have the most potential to be successful. Discuss the products and/or ventures with several different individuals, including classmates, instructors, family members, neighbors, friends, etc. Determine the venture/product and venture/product benefits that appeal most to them. Create a feature-benefit chart to highlight those benefits. Identify ways that you can use the information in marketing activities. Record the information, and insert it into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 244, 246, 248, 252-253, 255-256, 299-300]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 95-97, 207-208, 282, 493). Woodland Hills, CA: Glencoe/McGraw-Hill. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (p. 66). New York: McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 281-289]. Mason, OH: South-Western Cengage Learning. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 397-398). Mason, OH: South-Western Cengage Learning. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 254-255, 279-280]. Tinley Park, IL: Goodheart-Willcox Company, Inc.

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Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (pp. 262-263, 598, 637). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 111, 131-132, 138-141, 214-215, 300-301]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 191-193]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 297298, 356, 358-359]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 298-299, 308-309]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp.144, 148-149]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Software/ Online

Carpenter, H. (2010, March 24). Three models for applying customer feedback to innovation. Retrieved April 20, 2011, from http://www.cloudave.com/613/threemodels-for-applying-customer-feedback-to-innovation/ eHow.com. (1999-2011). How to identify the critical success factors. Retrieved April 20, 2011, from http://www.ehow.com/how_5195052_identify-critical-successfactors.html Enterprise feedback management. (n.d.). Retrieved April 20, 2011, from http://www.powerhomebiz.com/vol146/customer.htm Goldman, A. ( n.d.). Using customer input for product development. Retrieved April 20, 2011, from http://www.gaebler.com/Using-Customer-Input-for-ProductDevelopment.htm Marketing Donut. (2009-2011). Selling the benefits. Retrieved April 20, 2011, from http://www.marketingdonut.co.uk/marketing/sales/sales-techniques-andnegotiations/selling-the-benefits Qualtrics University. (n.d.). Customer needs analysis. Retrieved April 20, 2011, from http://www.qualtrics.com/university/customer-needs-analysis/ Rodriguez, G. (2004, November 1). 5 questions to help you understand your customer. Retrieved April 20, 2011, from http://www.powerhomebiz.com/vol146/customer.htm The silent partner: Using customer input to design winning products. (2010, December 14). Retrieved April 20, 2011, from http://dev.innovationcentre.ca/wp-content/uploads/2011/03/Designing-WinningProducts-whitepaper.pdf

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Knowledge/ Skill Statement

Understands techniques, strategies, and systems used to foster self-understanding and enhance relationships with others

Instructional Area

Emotional Intelligence

Performance Element

Apply ethics to demonstrate trustworthiness.

Performance Indicator

Assess risks of personal decisions (EI:091)

Level

Prerequisite

SCANS

Information 5; Systems 15-16; Basic Skills 1-3, 5-6; Thinking Skills 7-8, 12; Personal Qualities 13, 16

21st Century Skills

Critical Thinking and Problem Solving 1-3; Communication and Collaboration 1; Information Literacy 1; Flexibility and Adaptability 2; Leadership and Responsibility 3-4

Objectives

a. b. c. d. e. f. g.

Performance Activity

Define the term risk. Explain the importance of assessing risks when making personal decisions. Identify types of risks that individuals may face as a result of personal decisions (e.g., human, operational, reputational, financial, etc.). Discuss factors impacting risk assessments (e.g., perception, emotions, known information, etc.). Describe factors to consider when assessing risks (e.g., time, probability, magnitude, cost vs. benefit, physical distance, personal distance, etc.). Identify steps in assessing the risks of personal decisions. Demonstrate processes used to assess risks of personal decisions.

Reflect, in writing, on a personal decision that you must make. Identify your options, and identify potential risks that you may face as a result of your decision. Explain factors that you must consider while assessing these risks, and then determine if any of these risks are significant enough to prevent you from making a particular choice or taking a certain course of action. Submit your written reflection to your instructor for review.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 10-11, 192-193, 426-430]. Boston: Houghton Mifflin Company Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 20, 30-31, 34, 476-477). Woodland Hills, CA: Glencoe/McGraw-Hill. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 24-25, 53). New York: McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 217-218]. Mason, OH: South-Western Cengage Learning. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 398-403]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (pp. 105, 700-702, 718-719). Woodland Hills, CA: Glencoe/McGraw-Hill. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 13, 70]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 484, 538545]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 8, 29, 34, 38-41, 139, 155, 425]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 463-465]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 31-33, 540-542]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Software/ Online

Bartolomei, K. (n.d.). Business risk assessment. Retrieved April 12, 2011, from http://smallbusiness.chron.com/business-risk-assessment-97.html Duff, V. (2010, December 24). How to assess risk for new business ventures. Retrieved April 12, 2011, from http://www.ehow.com/how_7685156_assessrisks-new-business-ventures.html Hillson, D. & Murray-Webster, R. (2006). Managing risk attitude using emotional literacy. Retrieved March 4, 2011, from http://www.gowerpub.com/pdf/White_papers/Gower_White_Paper_Managing_ Risk_Attitude_Emotional_Literacy.pdf Mind Tools. (1996-2011). Risk analysis: Evaluating and managing the risks that you face. Retrieved March 4, 2011, from http://www.mindtools.com/pages/article/newTMC_07.htm Norton, W.I. & Moore, W.T. (2006). The influence of entrepreneurial risk assessment on venture launch or growth decisions. Retrieved April 12, 2011, from http://www.jstor.org/pss/40229464 Puri, M. & Robinson, D.T. (n.d.). Optimism, risk-taking, and entrepreneurship. Retrieved April 12, 2011, from http://www1.worldbank.org/finance/assets/images/Presentation_by_Manju_Pur i.pdf Risk-based decision making guidelines. (n.d.). Retrieved April 12, 2011, from http://www.au.af.mil/au/awc/awcgate/uscg/rbdm_why.pdf

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Planning Guide Sheets

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Knowledge/ Skill Statement

Understands techniques, strategies, and systems used to foster self-understanding and enhance relationships with others

Instructional Area

Emotional Intelligence

Performance Element

Apply ethics to demonstrate trustworthiness.

Performance Indicator

Take responsibility for decisions and actions (EI:075)

Level

Prerequisite

SCANS

Personal Qualities 13, 16-17; Interpersonal 12; Systems 15; Thinking Skills 12; Basic Skills 1-2; Information 5

21st Century Skills

Leadership & Responsibility 3, 4

Objectives

a. b. c. d. e.

Performance Activity

Explain benefits of taking responsibility for decisions and actions. Describe negative consequences of failing to accept responsibility for decisions and actions. Identify behaviors and traits needed to accept responsibility for decisions and actions. Identify steps in accepting responsibility for decisions and actions. Demonstrate processes used to take responsibility for decisions and actions.

Select and write about someone who has not taken responsibility for her/his decisions and actions. This person might be a celebrity, a politician, a family friend, etc. Explain the person’s decisions and actions and the negative consequences of failing to accept responsibility for what s/he did. Also, identify possible reasons for the person’s lack of responsibility, discuss steps that the person could have taken to take responsibility for his/her actions, and explain how taking responsibility for these decisions and actions could have improved the person’s situation. Finally, discuss reasons why entrepreneurs must take responsibility for their decisions and actions. When finished, share your work with the class.

Resources Textbooks

Jones, G.R., & George, J.M. (2006). Contemporary management (4th ed.) [p. 249]. New York: McGraw-Hill/Irwin. Kimbrell, G., & Vineyard, B.S. (2006). Entering the world of work (p. 283). New York: Glencoe/McGraw-Hill. Kimbrell, G., & Vineyard, B.S. (2006). Succeeding in the world of work (pp. 198201, 205-206). New York: Glencoe/McGraw-Hill. Ludden, L.V. (2003). Job savvy: How to be a success at work (3rd ed.) [p. 111]. Indianapolis: JIST Publishing. Lussier, R.N., & Achua, C.F. (2010). Leadership: Theory, application, & skill development (4th ed.) [p. 307]. Mason, OH: South-Western Cengage Learning. Wallace, H.R., & Masters, L.A. (2006). Personal development for life & work (9th ed.) [pp. 467-468]. Mason, OH: South-Western Cengage Learning. Williams, J.W., & Eggland, S.A. (2005). Human relations for career success (6th ed.) [p.127]. Mason, OH: South-Western Cengage Learning.

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Software/ Online

Planning Guide Sheets

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Antonioni, D. (2003, November-December). Leading with responsibility. Retrieved April 12, 2011, from http://www.entrepreneur.com/tradejournals/article/135285284.html Bostwick, B. (2007, July 26). What happened to being responsible for your actions? Retrieved April 12, 2011, from http://www.associatedcontent.com/article/324636/what_happened_to_being_re sponsible.html?cat=9 Heathfield, S.M. (n.d.). Success in life and work: Take responsibility for your life. Retrieved April 12, 2011, from http://humanresources.about.com/od/success/qt/responsible_s5.htm Klingeman, A. (2007, November 20). Taking responsibility for your actions. Retrieved April 12, 2011, from http://ezinearticles.com/?Taking-Responsibilityfor-Your-Actions&id=842366 Payne, S. (n.d.). Accepting responsibility for your own work. Retrieved April 12, 2011, from http://www.helium.com/items/1587239-accepting-responsibility-foryour-own-work McGuirk, S. (n.d.). Personal responsibility and decision making: The moments of truth. Retrieved April 12, 2011, from http://www.hsc.unt.edu/departments/oasis/documents/personal_decision_maki ng.ppt Messina, J.J. (2009, November 18). Accepting personal responsibility. Retrieved April 12, 2011, from http://www.livestrong.com/article/14698-acceptingpersonal-responsibility/

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Planning Guide Sheets

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Knowledge/ Skill Statement

Understands the concepts, processes, and skills associated with identifying new ideas, opportunities, and methods and with creating or starting a new project or venture

Instructional Area

Entrepreneurship

Performance Element

Develop concept for new business venture to evaluate its success potential.

Performance Indicator

Describe entrepreneurial planning considerations (EN:007)

Level

Owner

SCANS

Information 5; Systems 15, 17; Basic Skills 1-2, 5-6; Thinking Skills 8-9, 12; Personal Qualities 13

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 3; Communication and Collaboration 1; Information Literacy 1

Objectives

a. b. c. d. e. f. g. h. i. j.

Performance Activity

Distinguish among types of entrepreneurial planning (e.g., strategic, operational, etc.). Identify areas of focus during entrepreneurial planning (e.g., operations, finance, law, regulations, etc.). Explain issues relating to time commitment that an entrepreneur must consider when planning for the realization of his/her new venture. Describe product considerations that impact entrepreneurial planning. Discuss operational issues that entrepreneurs must consider when planning their businesses (e.g., method of production, etc.). Describe the impact that the proposed size of the business has on entrepreneurial planning. Describe common financial considerations that entrepreneurs must address when planning for their new venture/product. Explain legal and regulatory issues to consider during entrepreneurial planning. Discuss considerations involving competitors and the market that an entrepreneur must focus on when planning his/her new business. Explain the importance of flexibility when planning a new business venture.

Develop a list of the issues and considerations that you expect to face when planning for your new business venture. Be as specific as possible, and be sure to address time-commitment, product, operational, business size, financial, legal, competitor, and market considerations. When finished, discuss your list with a business partner, a SCORE representative, or classmates who intend to open businesses and/or offer products similar to yours. Obtain their feedback, modify your list as needed, and insert it into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 58-59, 318, 320]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 5, 45, 104-105, 158-161, 307-309, 331, 324-325). Woodland Hills, CA: Glencoe/McGraw-Hill. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 97-99). New York: McGraw-Hill. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Planning Guide Sheets

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Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 344-345, 325-238]. Mason, OH: South-Western Cengage Learning. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 38-42, 60, 8083). Mason, OH: South-Western Cengage Learning. Bovée, C.L., Thill, J.V., & Mescon, M.H. (2007). Excellence in business (3rd ed.) [pp. 203-206, 229-236, 307-308]. Upper Saddle River, NJ: Pearson Prentice Hall. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 114, 144145,156-158, 204-205]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 232-234, 422]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 419426]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 130, 171, 196-197, 445-449]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 192-194]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Nickels, W.G., McHugh, J.M., McHugh, S.M. (2008). Understanding business (8th ed.) [pp. 165-166, 184-188]. New York: McGraw-Hill. Software/ Online

Britton, B. (2010, January 12). Top ten legal issues for entrepreneurs. Retrieved April 12, 2011, from http://www.slideshare.net/bcjb/top-ten-legal-issues-forstartups Cayenne Consulting (2001-2011). Legal resources and issues. Retrieved April 12, 2011, from http://www.caycon.com/resources.php?s=25 Monosoff, T. (2008, May 8). Putting time into your product. Retrieved April 12, 2011, from http://www.entrepreneur.com/startingabusiness/inventing/inventionscolumnistt amaramonosoff/article193646.html Mulligan, R.F. & Lombardo, G.A. (2008, August 20). Entrepreneurial planning in a regulated environment: The U.S. Federal Maritime Commission and the maritime industry. Retrieved April 12, 2011, from http://mises.org/journals/qjae/pdf/qjae11_2_3.pdf Price, J. (2010, September 9). Entrepreneurial planning. Retrieved April 12, 2011, from http://www.managementconsultants.com/content.cfm?Contentalias=enterprene urialplanning Scottish Institute for Enterprise. (2010, January 25). An idea and venture diagnostic aid. Retrieved April 12, 2011, http://www.scribd.com/adobbratzSIE/documents Sherman, A.J. (2011). Business planning: Building an effective business model. Retrieved April 12, 2011, from http://www.entrepreneurship.org/en/resourcecenter/business-planning-building-an-effective-business-model.aspx

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Planning Guide Sheets

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Knowledge/ Skill Statement

Understands the concepts, processes, and skills associated with identifying new ideas, opportunities, and methods and with creating or starting a new project or venture

Instructional Area

Entrepreneurship

Performance Element

Develop concept for new business venture to evaluate its success potential.

Performance Indicator

Explain tools used by entrepreneurs for venture planning (EN:008)

Level

Owner

SCANS

Information 5; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 8, 11-12

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 3; Critical Thinking and Problem Solving 3; Communication and Collaboration 1; Information Literacy 1; ICT Literacy 1; Initiative and Self-Direction 2

Objectives

a. b. c. d.

e.

f.

Performance Activity

Explain the use of a business plan for venture planning and development. Describe ways in which a mission statement can facilitate venture planning. Discuss the role of financial forecasting and budgeting in venture planning. Identify internal and external analysis tools used for venture planning (e.g., SWOT analysis, market analysis, environmental scan, competitive analysis, sensitivity analysis, etc.). Explain the advantages and disadvantages of different strategic planning approaches (e.g., opportunity management approach, milestone planning approach, entrepreneurial strategy matrix, multistage contingency approach, etc.). Describe technology used for venture planning (e.g., business planning software, bookkeeping software, budgeting software, financial analysis software, etc.).

Interview a local entrepreneur to learn what tools s/he currently uses or has used for venture planning. Find out why these tools work well for him/her, and ask for his/her advice regarding which tools you should use to plan your particular venture. Report your findings to the class, and insert your notes into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 64, 178-180, 358-362, 365]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 100-109). Woodland Hills, CA: Glencoe/McGraw-Hill. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 51-54, 87,156-159, 164, 186, 201-203). New York: McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 173-174, 328-219, 325-328]. Mason, OH: South-Western Cengage Learning. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 45-46, A-60 – A-63). Mason, OH: South-Western Cengage Learning. Bovée, C.L., Thill, J.V., & Mescon, M.H. (2007). Excellence in business (3rd ed.) [pp. 203-206, 232, A-47 – A-51]. Upper Saddle River, NJ: Pearson Prentice Hall. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 747-748]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (pp. 2630, 738-744). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 105-117]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 212, 451459]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 295, 349-351, 362, 364, 420-430 534]. Mason, OH: Thomson South-Western. Kurtz, D.L. (2009). Contemporary business (12th ed.) [pp.158, 202-203, 264-266]. Mason, OH: South-Western Cengage Learning. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 117-121, 124, 129, 132-133]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 224, 366, 428, 586-612]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Software/ Online

Berry, T. (2005, June 13). Conducting a market analysis for your business plan. Retrieved April 13, 2011, from http://www.entrepreneur.com/startingabusiness/businessplans/businessplanco achtimberry/article78002.html Entrepreneur Journey. (2011). How to write a mission statement. Retrieved April 13, 2011, from http://www.entrepreneurjourney.com/business-ideas/how-to-writea-mission-statement Entrepreneur.com. (2006, August 1). Competitive analysis. Retrieved April 13, 2011, from http://www.entrepreneur.com/startingabusiness/businessplans/article25756.ht ml Kuratko, D.F. & Audretsch, D.B. (2009, January). Strategic entrepreneurship: Exploring different perspectives of an emerging concept (report). Retrieved April 13, 2011, from http://www.entrepreneur.com/tradejournals/article/192851628_2.html Lussier, R.N., Sonfield, M.C., Corman, J., & McKinney, M. (n.d.). Strategies used by small business entrepreneurs. Retrieved April 13, 2011, from http://www.bsu.edu/mcobwin/majb/uploads/pdf/vol16num1/lussier.pdf McCarren, K. (2010, May 5). Strategic planning tools for business. Retrieved March 13, 2011, from http://www.ehow.com/list_6464289_strategic-planning-toolsbusiness.html McMillan, A., & Hausler, D. (n.d.). Mission and vision statements. Retrieved April 13, 2011, from http://www.enotes.com/management-encyclopedia/missionvision-statements Shahid, B. (2008). Milestones for successful venture planning. Retrieved April 13, 2011, from http://groups.google.com/group/niit_it_and_entrepreneurship_fall_2008/browse _thread/thread/fc776a6e8740fdac Sherman, A.J. (2011). Business planning: Building an effective business model. Retrieved March 10, 2011, from http://www.entrepreneurship.org/en/resourcecenter/business-planning-building-an-effective-business-model.aspx Simmering, M.J. (n.d.). SWOT analysis. Retrieved April 13, 2011, from http://www.enotes.com/management-encyclopedia/swot-analysis

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Planning Guide Sheets

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Knowledge/ Skill Statement

Understands the processes and systems implemented to monitor, plan, and control the day-to-day activities required for continued business functioning

Instructional Area

Operations

Performance Element

Implement expense-control strategies to enhance a business’s financial wellbeing.

Performance Indicator

Explain the nature of overhead/operating costs (OP:024)

Level

Specialist

SCANS

Resources 2; Information 5-7; Systems 15; Basic Skills 1-3; Thinking Skills 12

21st Century Skills

Financial, Economic, Business & Entrepreneurial Literacy 1; Critical Thinking & Problem Solving 1; Communication & Collaboration 1

Objectives

a. b. c. d. e. f.

Performance Activity

Define the following terms: operating expenses, fixed costs, variable costs, semi-variable costs, gross profit, and break-even point. Identify types of operating costs. Distinguish between fixed and variable costs. Explain how a business’s operating expenses affect its profit. Describe the relationship between operating expenses and budgets. Explain how operating expenses affect the selling price of products.

Identify operating expenses that will be associated with your business, and categorize the expenses as fixed, variable, or semi-variable. Participate in a smallgroup discussion to examine the categories and identified expenses. Ask the group to review the information for completeness. Modify the list, if necessary, and insert it into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 362-363, 392-393]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 230, 241, 291-292). Woodland Hills, CA: Glencoe/McGrawHill. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 24, 115-116, 123-124, 250-251). New York: McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 182, 184-185, 298, 307-308, 353, 369-370]. Mason, OH: SouthWestern Cengage Learning. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 614, 620). Mason, OH: South-Western Cengage Learning. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics (2nd ed.) [pp. 746747]. Tinley Park, IL: Goodheart-Willcox. Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (pp. 533, 567, 767). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 63-64, 73, 158, 181, 279, 287, 304]. Mason, OH: Thomson/South-Western.

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Planning Guide Sheets

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Guerrieri, D.J., Haber, F.B., Hoyt, W.B. & Turner, R.E. (2007). Accounting: Realworld applications and connections: First-year course (p. 561). Woodland Hills, CA: McGraw-Hill/Glencoe. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 196, 404405, 418-422]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 313, 315-316, 321-322, 326-327, 337-340]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 205-207, 335-336]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 117, 123-124, 264-269]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Kapoor, J.R., Dlabay, L.R., Hughes, R.J., & Hoyt, W.B. (2005). Business and personal finance (p. 552). Woodland Hills, CA: Glencoe/McGraw-Hill. Price, J.E., Haddock, M.D., & Brock, H.R. (2007). College accounting: Chapters 132 (11th ed.) [pp. 458, 957]. New York: McGraw-Hill/Irwin. Software/ Online

Ashley, M. (2007, October 10). Business operating cost. Retrieved April 12, 2011, from http://www.articlesbase.com/finance-articles/business-operating-cost-230991.html Bankrate.com. (2010). Gross profit margin ratio calculator. Retrieved April 12, 2011, from http://www.bankrate.com/brm/news/biz/bizcalcs/ratiogross.asp Business Owner’s Toolkit. (1995-2011). Fixed and variable expenses. Retrieved April 12, 2011, from http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P06_7510 Clausen, J. (2010, August 18). Accounting 101—net operating profit margin and expense. Retrieved April 12, 2011, from http://www.suite101.com/content/accounting-101--net-operating-profit-marginand-expense-a276048 Harvard ManageMentor. (2007). Budgeting: How to categorize expenses: Fixed and variable costs. Retrieved April 12, 2011, from http://www.nationalcollege.lmmattersonline.com/courses/hmm10/budgeting/fix ed_and_variable_costs.html Liraz Publishing Co. (n.d.). How to cut your expenses. Retrieved April 12, 2011, from http://www.liraz.com/expenses.htm Murray, J. (2009, February 11). What is “overhead” in a small business? Retrieved April 12, 2011, from http://drjeanmeansbusiness.com/overhead-smallbusiness/ Richards, D. (2011). How to do a breakeven analysis. Retrieved April 12, 2011, from http://entrepreneurs.about.com/od/businessplan/a/breakeven.htm Williams, S. (n.d.). How to categorize business expenses. Retrieved April 12, 2011, from http://www.ehow.com/how_5185342_categorize-business-expenses.html

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

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Knowledge/ Skill Statement

Understands the concepts, processes, and skills associated with identifying new ideas, opportunities, and methods and with creating or starting a new project or venture

Instructional Area

Entrepreneurship

Performance Element

Develop concept for new business venture to evaluate its success potential.

Performance Indicator

Assess start-up requirements (EN:009)

Level

Owner

SCANS

Resources 2; Information 5-6, 8; Systems 15; Basic Skills 1-3, 5-6; Thinking Skills 12

21st Century Skills

Critical Thinking and Problem Solving 1-5; Communication and Collaboration 1; Information Literacy 1; ICT Literacy 1-2

Objectives

a.

b. c. d. e. f.

g.

Performance Activity

Explain startup cost categories (e.g., cost of sales, professional fees, technology costs, administrative costs, sales and marketing costs, wages and benefits). Estimate the cost of sales for the new venture (e.g., inventory, raw materials, equipment, etc.). Identify and assess professional fees for the new venture (e.g., legal costs, patents, trademarks, etc.). Estimate technology costs for the business start-up (e.g., computer hardware and software, Internet access, printers, servers, etc.). Approximate administrative costs for the new business (e.g., insurance, furniture, facility, utilities, business permits/licenses, etc.) Assess anticipated sales and marketing costs (e.g., advertising, trade association membership fees, trade show attendance, marketing materials, etc.). Estimate overall wages and benefits for the venture’s human resources (e.g., salaries, workers’ compensation, payroll taxes, employee benefits, etc.).

On the handout At What Cost?, list specific costs of sales, professional fees, technology costs, administrative costs, sales and marketing costs, and overall wages and benefits for your new venture. Estimate each of the costs, and then calculate the estimated subtotal for each cost category. Finally, combine the six subtotals to determine the estimated grand total costs for your new business venture. When finished, compare your list of costs and cost estimates with a classmate. Modify your list and estimates as necessary, and insert the handout in your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 363-365]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 19-20, 63, 420, 459). Woodland Hills, CA: Glencoe/McGrawHill. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 114-115). New York: McGraw-Hill. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Planning Guide Sheets

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Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 181-182, 190, 198]. Mason, OH: South-Western Cengage Learning Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 63-64, 204205, 218, 251, 284, 308, 329-331]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 156, 158, 422-433, 451]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 152,154-155, 472]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 191-194, 206-207, 471]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 17, 117, 587, 177, 269, 595]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Software/ Online

Business Owner’s Toolkit (1995-2011). Advertising and marketing costs. Retrieved April 13 2011, from http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P01_2240 Business Owner’s Toolkit. (1995-2011). Costs of setting up the business. Retrieved April 13, 2011, from http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P01_2200 businessknowhow.com (1999-2010). Business startup cost calculator. Retrieved April 13, 2011, from http://www.businessknowhow.com/startup/startup.htm Hunter, R. (2010, May 31). Types of costs in managerial accounting. Retrieved April 13, 2011, from http://www.brighthub.com/office/finance/articles/72933.aspx Morah, C. (n.d.). Business startup costs: It’s in the details. Retrieved April 13, 2011, from http://www.investopedia.com/articles/pf/09/business-startup-costs.asp Pape Financial Services. (2003, April 15). Estimating the costs of starting a business. Retrieved April 13, 2011, from http://www.papefinancial.com/info/startupcosts.htm Richards, D. (n.d.). Calculating startup costs. Retrieved April 13, 2011, from http://entrepreneurs.about.com/od/gettingstarted/a/startupcosts.htm SmallBusiness.com. (2010, October 5). Starting a small business. Retrieved April 11, 2011, from http://smallbusiness.com/wiki/Starting_a_small_business Webber, A. (2011). Estimating startup costs for a new business. Retrieved April 13, 2011, from http://www.startupnation.com/business-articles/1248/startup-costsnew-business.asp/article.aspx?content_id=1248&PN=startup-costs-newbusiness.asp

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Handout: At What Cost?

Page 5-56

Costs of Sales

Estimated Cost

Subtotal

Professional Fees

Estimated Cost

Subtotal

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Handout: At What Cost?

Page 5-57

Technology Costs

Estimated Cost

Subtotal Administrative Costs

Estimated Cost

Subtotal

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Handout: At What Cost?

Page 5-58

Sales and Marketing Costs

Estimated Cost

Subtotal Overall Wages and Benefits

Estimated Cost

Subtotal

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Handout: At What Cost? Cost Category

Page 5-59

Subtotal

Costs of Sales Professional Fees Technology Costs Administrative Costs Sales and Marketing Costs Overall Wages and Benefits Estimated Grand Total

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-60

Knowledge/ Skill Statement

Understands the concepts, processes, and skills associated with identifying new ideas, opportunities, and methods and with creating or starting a new project or venture

Instructional Area

Entrepreneurship

Performance Element

Develop concept for new business venture to evaluate its success potential.

Performance Indicator

Assess risks associated with venture (EN:010)

Level

Owner

SCANS

Information 5; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 9, 12

21st Century Skills

Critical Thinking and Problem Solving 1-5; Communication and Collaboration 1; Information Literacy 1

Objectives

a.

b. c. d. e.

f. g. h. i.

Performance Activity

Identify forms of risk associated with new ventures (e.g., industry risk, market risk, product risk, financial risk, management/decision risk, career risk, emotional risk, etc.). Describe types of industry risk (e.g., complex industry, over-served industry, failing industry, difficult suppliers, etc.). Explain assorted market risks (e.g., competition, ineffectiveness of marketing model, slow market acceptance, etc.). Describe product risks affecting a new venture (e.g., difficulties in transforming idea into market-ready product, etc.). Explain financial risks usually associated with start-up ventures (e.g., loss of capital, uncertain income, inflation, economic downturns, changes in interest rates, higher costs, bankruptcy, etc.). Explain ways in which a business’s management can create risk for a new venture. Describe career risks associated with starting a new business (e.g., unemployment, business failure, etc.). Discuss emotional risks that entrepreneurs face (e.g., marital strain, family problems, etc.). Demonstrate processes for assessing risks associated with a new venture.

Use the Risky Business handout to identify risks associated with your new business venture, and determine the potential impact that each of the risks could have on you and/or your business. After completing the chart, reflect on the impact that this exercise will have on your choice of business ventures, and identify strategies that you could use to lessen the effect of different risks on your business’s success. When finished, discuss your responses with a business partner, SCORE representative, or your instructor, and record their recommendations. Maintain the handout and recommendations in your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 192-183, 427-434]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 475-493). Woodland Hills, CA: Glencoe/McGraw-Hill. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-61

Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 24-25, 53-54, 311). New York: McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 212, 217-218, 221, 229]. Mason, OH: South-Western Cengage Learning. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 171, 176-177]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 538-567]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 29, 34, 38-39, 155, 425, 472]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 239-242, 309, 386, 464-473]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 540-541]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Software/ Online

Ashbrook, T. (n.d.). Risk in entrepreunership. Retrieved April 14, 2011, from http://www.entrepreneurship.org/en/resource-center/risk-inentrepreneurship.aspx Axelton, K. (n.d.). Startups: Manage your risk with these smart financial steps. Retrieved April 14, 2011, from http://smallbusiness.dnb.com/bankingfinance/personal-finance-personal-debt/12305218-1.html Connected Thinking. (2007, August 13). Business risk assessment. Retrieved April 13, 2011, from http://www.sustainabledevelopment.in/events/pdf/Business_Risk_Assessment. pdf Duff, V. (2010, December 24). How to assess risks for new business ventures. Retrieved April 14, 2011, from http://www.ehow.com/how_7685156_assessrisks-new-business-ventures.html Ebben, J. (2005, March 1). Managing risk in a new venture. Retrieved April 14, 2011, from http://www.inc.com/resources/startup/articles/20050301/risk.html Francis, K.A. (2011). Differences between financial risk and business risk. Retrieved April 14, 2011, from http://smallbusiness.chron.com/differencesbetween-financial-risk-business-risk-4562.html Gilbert, C.G. & Eyring, M. (2010, May). Beating the odds when you launch a new venture. Retrieved April 14, 2011, from http://hbr.org/2010/05/beating-theodds-when-you-launch-a-new-venture/ar/1 Mann, T. (n.d.). Market risk vs. business risk. Retrieved April 14, 2011, from http://www.ehow.com/facts_5980305_market-risk-vs_-business-risk.html Sheikh, U. (2008). 5 steps to manage startup risk. Retrieved April 14, 2011, from http://usmansheikh.wordpress.com/2008/05/20/5-steps-to-manage-startup-risk/

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Handout: Risky Business

Section 5

What Risks Will I Probably Encounter?

Page 5-62

What Is the Potential Impact of Each Risk?

Industry Risks:

Market Risks:

Product Risks:

Financial Risks:

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Handout: Risky Business

Section 5

What Risks Will I Probably Encounter?

Page 5-63

What Is the Potential Impact of Each Risk?

Management Risks:

Career Risks:

Emotional Risks:

What impact will this exercise have on your choice of business ventures? Do you still intend to pursue this opportunity, or are there risks that would prevent this business from being successful? Why?

What strategies, if any, could you use to lessen the effects of different risks on your business’s success?

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-64

Knowledge/ Skill Statement

Understands techniques, strategies, and systems used to foster self-understanding and enhance relationships with others

Instructional Area

Emotional Intelligence

Performance Element Performance Indicator

Develop tolerance for ambiguity (EI:092)

Level

Career-sustaining

SCANS

Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 12; Personal Qualities 16

21st Century Skills

Communication and Collaboration 1; Information Literacy 1; Flexibility and Adaptability 1-2

Objectives

a. b. c. d.

e. f.

Performance Activity

Define the terms tolerance and ambiguity. Explain the importance of developing a tolerance for ambiguity. Describe the role of a tolerance for ambiguity in problem-solving. Discuss factors impacting an individual’s ability to develop a tolerance for ambiguity (e.g., self-confidence, optimism, education, career experiences, etc.). Identify methods used to develop a tolerance for ambiguity. Demonstrate a tolerance for ambiguity.

Interview a business partner or SCORE representative to learn the importance of developing a tolerance for ambiguity in the business world. Ask the individual to give examples of professional situations in which a tolerance for ambiguity is valuable. Also, ask her/him to explain how s/he learned to tolerate ambiguity, and how s/he remains open to ambiguity and possibly even uses it to her/his advantage in business. Discuss your findings with the class.

Resources Textbooks

Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 34-35). Woodland Hills, CA: Glencoe/McGraw-Hill. Dalton, M., Hoyle, D.G., & Watts, M.W. (2006). Human relations (3rd ed.) [p. 244]. Mason, OH: South-Western Cengage Learning. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [p. 34]. Mason, OH: Thomson South-Western. Kuratko, D.G., & Hodgetts, R.M. (2007). Entrepreneurship: Theory, process, practice (7th ed.) [pp.121, 737]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [p. 16]. Mason, OH: Thomson South-Western.

Software/ Online

Action Management Associates, Inc. (n.d.). Ambiguity: The fertile ground of problem solving. Retrieved March 4, 2011, from http://www.actionm.com/articles_ambiguity.aspx Ambiguity Advantage. (2006, April 21). The paradox of ambiguity tolerance and tolerance for diversity. Retrieved April 14, 2011, from http://ambiguityadvantage.blogspot.com/2006/04/paradox-of-ambiguitytolerance-and.html Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-65

American Express. (2009, April 8). Developing a tolerance for ambiguity. Retrieved April 14, 2011, from https://www.openforum.com/ideahub/topics/managing/article/develop-a-tolerance-for-ambiguity-scott-belsky Rigotti, L., Ryan, M., & Vaithianathan, R. (2008, June). Tolerance of ambiguity and entrepreneurial innovation. Retreived April 14, 2011, from http://faculty.fuqua.duke.edu/~rigotti/bio/RRV.pdf Strosaker, G. (2010, January 14). Developing a tolerance for ambiguity. Retrieved April 14, 2011, from http://gregstrosaker.com/2010/01/developing-a-tolerancefor-ambiguity/ Zenasni, F., Besancon, M., & Lubart, T. (n.d.). Creativity and tolerance of ambiguity: An empirical study. Retrieved April 14, 2011, from http://www.psycho.univparis5.fr/IMG/pdf/CreativityandToleranceofAmbiguity.pdf

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-66

Knowledge/ Skill Statement

Understands the concepts, processes, and skills associated with identifying new ideas, opportunities, and methods and with creating or starting a new project or venture

Instructional Area

Entrepreneurship

Performance Element

Employ entrepreneurial discovery strategies to generate feasible ideas for business ventures/products.

Performance Indicator

Determine feasibility of venture/product ideas (EN:038)

Level

Owner

SCANS

Information 5-7; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 7-12

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 2, 3; Critical Thinking and Problem Solving Skills 1, 2, 3; Communication; Information and Media Literacy Skills 2; Creativity and Innovation Skills 2; Contextual Learning Skills

Objectives

a. b. c. d. e. f. g. h. i. j. k. l.

Performance Activity

Define the term feasibility study. Explain the purpose of conducting a feasibility study. Discuss benefits associated with conducting a feasibility study. Describe reasons for not conducting a feasibility study. Identify market considerations that should be analyzed when conducting a feasibility study. Explain technical considerations that should be analyzed when conducting a feasibility study. Discuss financial considerations that should be analyzed when conducting a feasibility study. Describe organizational/managerial considerations that should be analyzed when conducting a feasibility study. Explain competitive considerations that should be analyzed when conducting a feasibility study. Discuss characteristics of a well-conducted feasibility study. Identify possible courses of action that could be taken following a feasibility study. Demonstrate procedures for determining the feasibility of a venture/product idea.

To determine the feasibility of your venture idea, conduct thorough research on your proposed venture and complete the Venture Feasibility Test handout. After completing the venture feasibility test, use presentation software to prepare and present a five-minute slideshow that explains the business venture you have selected, the rationale for your decision, and supporting information and plans that you have developed as a result of your research and completion of the venture feasibility test. Insert your venture feasibility test and presentation notes into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 53, 60-68]. Boston: Houghton Mifflin Company.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-67

Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 60-63, 94-99). Woodland Hills, CA: Glencoe/McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 104-109]. Mason, OH: South-Western Cengage Learning. Gartner, W.B., & Bellamy, M.G. (2009). Creating the enterprise (pp.198-238, 415418). Mason, OH: Thomson South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [92-97, 103116]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 270274, 279-284]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W. & Petty, J.W. (2003). Small business management: An entrepreneurial emphasis (12th ed.) [pp. 41-43]. Mason, OH: Thomson/South-Western. Software/ Online

Borjal, J. (2010, August 3). Conducting a feasibility study. Retrieved April 14, 2011, from http://www.scribd.com/doc/35318235/Conducting-a-Feasibility-Study Hofstrand, D. (2009, October). Ideas assessment and business development process. Retrieved April 14, 2011, from http://www.extension.iastate.edu/AGDM/wholefarm/pdf/c5-02.pdf Hofstrand, D. (2009, November). When to do and how to assess a feasibility study. Retrieved April 14, 2011, from http://www.extension.iastate.edu/AGDM/wholefarm/html/c5-64.html Hofstrand, D. & Holz-Clause, M. (2009, November). Feasibility study outline. Retrieved April 14, 2011, from http://www.extension.iastate.edu/AGDM/wholefarm/html/c5-66.html Hofstrand, D. & Holz-Clause, M. (2009, October). What is a feasibility study? Retrieved April 14, 2011, from http://www.extension.iastate.edu/AGDM/wholefarm/html/c5-65.html Innovation and Entrepreneurship Institute (2006). Feasibility study workbook. Retrieved April 14, 2011, from http://sbm.temple.edu/iei/documents/NewVentureFeasibilityAnalysisWorkbook. doc New venture simulation (2009, Spring). Retrieved April 14, 2011, from http://www.hiram.edu/entrepreneurship/documents/NewVentureSimulationGuid elinesSp09.doc Ontario Catholic School (n.d.). Entrepreneurial studies: Venture planning. Retrieved April 14, 2011, from http://www.curriculum.org/csc/library/profiles/12/html/BDV4CC2.htm (Contains teaching strategies to address selection of business idea) Rebernik, M. & Bradač, B. (n.d.). Module 4: Idea evaluation and techniques. Retrieved April 14, 2011, from http://www.creativetrainer.eu/fileadmin/template/download/module_idea_evaluation_final.pdf Thompson, A. (2005). Business feasibility outline. Retrieved April 14, 2011, from http://bestentrepreneur.murdoch.edu.au/Business_Feasibility_Study_Outline.p df

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Handout: Venture Feasibility Test

Page 5-68

Strategic Alignment—Do you want to do it? 1. How will this business venture create a positive social impact for your community? 2. Will your family, friends, classmates, teacher, and principal(s) support this business choice? 3. Are you willing to take responsibility for seeing that this venture succeeds? Operational—Can you do it? 4. Clearly describe the proposed product or service. 5. How will this venture build on your talents and abilities? 6. Will you be able to produce and deliver the proposed product or service? 7. Will you be able to effectively promote and sell this product to your customers? 8. Do you have the staff you will need to operate this venture? 9. Will this venture idea be feasible from a legal and regulatory perspective? 10. Are there any other barriers or risks that you might have to deal with? 11. How much do you plan to produce? (A rough estimate is okay.) Marketing—Will your customers want to buy it from you? 12. At this point, who do you think your customers will be? 13. How will your customers find this product or service beneficial to them? 14. How could you build a positive reputation and relationship with potential customers? 15. What evidence do you have that customers are interested and willing to pay for this product or service? 16. As far as you know, is the number of potential customers growing or declining each year? 17. What criteria do you think customers will use when selecting this kind of product or service? 18. Who or what do you think would be your competition? 19. What makes your proposed product or service unique? 20. Why would customers choose your product or service versus the competition? Financial—Will it meet your financial goals? 21. At this point, what are your financial goals and/or success criteria for this business venture? 22. What makes you think this venture will meet or exceed these goals? 23. How much will you need to sell in order to meet these goals? (A rough estimate is okay at this point.) 24. What are the start-up costs for this venture, and where do you think the funding will come from? Based on: Larson, R. & Horsnell, A. (2005). Quick feasibility test. Retrieved March 18, 2011, from http://www.museumdistrict.com/Resources/RLA_Quick_Feasibility_Test.pdf

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-69

Knowledge/ Skill Statement

Understands the concepts and strategies utilized to determine and target marketing strategies to a select audience

Instructional Area

Market Planning

Performance Element

Develop marketing strategies to guide marketing tactics.

Performance Indicator

Explain the concept of marketing strategies (MP:001, MP LAP 2)

Level

Career-sustaining

SCANS

Information 5-8; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 8-9, 12

21st Century Skills

Critical Thinking and Problem Solving Skills 1, 3; Communication & Collaboration 1

Objectives

a. b. c. d. e. f. g.

Performance Activity

Define the following terms: marketing mix, product, place, promotion, price, goals, strategies, and tactics. Identify the components of the marketing mix. Describe the importance of each of the components of the marketing mix. Explain the relationship of goals, strategies, and tactics. Describe the importance of marketing strategies. Explain the factors that may cause marketing strategies to change. Explain the importance of strategies in the marketing mix.

Note to the Instructor: Review and present the Marketing Strategies briefing (pp. 5-71 and 5-73) to students in a lecture or discussion format. Imagine that you are the marketing manager for your school’s play or other school activity. Identify strategies that you would use to market the play/activity. Explain why you would use them, and summarize your plan in a brief presentation for the play/activity directors. Conduct research into the marketing strategies used by local businesses that offer products similar to those that you plan to sell. Identify the goals, strategies, and tactics that you believe each firm is using. Find out as much as you can about each firm’s marketing mix, and compare it to the mixes of other firms. Determine whether each marketing mix supports the goals and strategies of its firm. Record your findings, and present your research to the class for discussion. Then, insert your written findings in your VIP portfolio.

Resources LAP

MBAResearch and Curriculum Center. (2011). Pick the Mix (Marketing Strategies) [LAP: MP-002]. Columbus, OH: Author. MBAResearch and Curriculum Center. (2011). Pick the Mix (Marketing Strategies): Instructor copy [LAP: MP-002]. Columbus, OH: Author.

Textbooks

Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 207-215). Woodland Hills, CA: McGraw-Hill/Glencoe. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-70

Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 42-49). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 19-20, 94-97, 220-231]. Mason, OH: Thomson/South-Western. Clark, B.; Sobel, J.; & Basteria, C.G. (2010). Marketing dynamics (2nd ed.) [pp. 2026, 61, 183-185]. Tinley Park, IL: Goodheart-Willcox. Dlabay, L.R., Burrow, J.L., & Kleindl, B. (2009). Intro to business (7th ed.) [p. 239]. Mason, OH: South-Western Cengage Learning. Etzel, M.J.; Walker, B.J.; & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 16-17]. New York: McGraw-Hill/Irwin. Farese, L.S.; Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (pp. 1619). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 214, 237]. Mason, OH: Thomson/South-Western. Grewal, D. & Levy, M. (2008). Marketing (pp. 7-12, 38-41). New York: McGrawHill/Irwin. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 61-67, 142]. Mason, OH: Thomson South-Western. Perreault, W.D., Jr.; Cannon, J.P.; & McCarthy, E.J. (2008). Basic marketing: Marketing strategy planning approach (16th ed.) [pp. 32-40]. New York: McGraw-Hill/Irwin. Workbooks/ Manuals

Burrow, J.L. (2003). Marketing: Business 2000 (pp. 32-36). Mason, OH: SouthWestern/Thomson Learning.

Software/ Online

Cooper, J. (2008, April 6). What factors affect marketing design? Retrieved April 14, 2011, from http://ezinearticles.com/?What-Factors-Affect-MarketingDesign?&id=1229291 Harris, B., Jr. (2003, April 15). “Strategies, missions and goals…oh my!” The importance of getting your planning terminology right. Retrieved April 14, 2011, from http://www.marketingprofs.com/3/harris3.asp?sp=1#split Kyle, B. (2001-2011). 7 ways to improve profit through both long- and short-term strategies. Retrieved April 14, 2011, from http://www.websitemarketingplan.com/small_business/marketingmix.htm MBAResearch and Curriculum Center. (2011). Pick the Mix (Marketing Strategies) [LAP: MP-002: Presentation Software]. Columbus, OH: Author. Marketing mix. (2002-2007). Retrieved April 14, 2011, from http://universityessays.tripod.com/marketing_mix.html Marketing Teacher. (2000-2011). Marketing mix. Retrieved April 14, 2011, from http://marketingteacher.com/Lessons/lesson_marketing_mix.htm Obringer, L.A. (1998-2011). How marketing plans work: Marketing mix strategy. Retreived April 14, 2011, from http://money.howstuffworks.com/marketingplan22.htm Osterberg, L. (2007). Change your small business marketing strategy even if it’s working. Retrieved April 14, 2011, from http://www.sideroad.com/Small_Business_Marketing/small-businessmarketing-strategy.html QuickMBA. (1999-2010). The marketing mix. Retrieved April 14, 2011, from http://www.quickmba.com/marketing/mix/

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Key Points

Briefing: Marketing Strategies

Page 5-71

Explain that for marketers to achieve their desired results, they plan where they need to go and how to get there efficiently. Then, they do what it takes to achieve those results. Discuss that marketers set goals—objectives they plan to fulfill. Explain that they establish a plan of action, or strategy, to meet their goals/ objectives. Explain that strategies are carried out with tactics—the specific actions used to carry out the strategy. Describe the process marketers follow when they plan their strategies. 1. 2. 3. 4. 5. 6. 7.

8.

They find out their company’s overall plan. They figure out specifically where their firm needs to be by a particular date. They write down agreed upon goals—where it is they want to achieve. Example: A restaurant wants to increase this year’s sales by 10% over last year’s sales. They lay out their plan of action—their strategy—to show how they will reach their goal. Example: The restaurant evaluates its many options and decides to add a kids’ menu to increase sales. To be efficient, marketers choose their short-term actions—tactics—to carry out their strategy. The tactics must be in line with their goal/objectives and strategy. Example: Tactics that the restaurant might use: a. Introduce meals which kids like. b. Offer a free ice-cream cone to each child selecting a kids’ meal.

Explain that since they have many options to choose from to reach their goals/objectives, they try to select the best option available to them by considering the following: 1. 2. 3.

How the marketing concept applies to their situation When they want to reach their goal Which resources are on hand

Remind students that business situations change, which requires marketers to look for challenges/opportunities along the way. 1.

2. 3.

Examples: a. Finding out that the company can’t handle distribution on its own b. Hearing about a new product with better features than the one currently offered c. Figuring out that the price is slightly high for customers d. Seeing the company’s ad in the back of the newspaper instead of in the section in which it was expected e. Learning of new government regulations that impact the business f. Watching the economy improve/worsen Marketers must react quickly and accurately to changes to be able to achieve their goals/objectives. They must remain alert to changes in their environment.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Briefing: Marketing Strategies

Page 5-72

Explain that marketers customize their strategies based on their goals/ objectives and environment. They adjust and/or combine strategies to achieve their desired results. Define marketing mix: The combination of the four elements of marketing—product, price, place, and promotion. Discuss the elements of the marketing mix. 1.

Product—the goods, services, or ideas a business will offer its customers a. Marketers conduct research and use their creativity to determine what customers need and how they will meet that need. b. Questions marketers ask to answer the question: (1) Should we offer one product—or more than one? (2) Is the product a good, service, or idea? (3) Does the product have special features? (4) Does the product have multiple uses? (5) What resources are necessary to research and develop the product? (6) What level of quality should be produced or provided? (7) Which brands should be used? (8) How should the product be packaged? (9) How might the product affect the company’s image? (10) How might customers view this product in relation to others? (11) Should the company offer a warranty, maintenance contract, or other support services? c. Marketers have succeeded with the product element when customers view the product as the best solution to their needs.

2.

Price—the amount of money a business asks in exchange for its products a. Marketers must find a good balance between customer value and satisfaction and between company cost and profit. b. Marketers start by determining their pricing objectives: (1) Getting their products into more customers’ hands—might be accomplished by lowering the price (2) Helping customers view the business as distinct from its competitors—might offer something unique (3) Bringing in the amount of income they need/want—involves pricing the product high enough to cover expenses and provide a profit (4) Raising the product’s value in the customer’s eyes—involves getting customers to view the product as higher quality (5) Matching the product’s value with what customers expect to receive—setting prices at the level customers expect c. Marketers also determine how they will accept payment—cash, credit, debit, or check? d. They decide whether they will offer discounts. e. Marketers know they’ve been successful with the price element when customers feel that the benefits they receive outweigh the costs, and the business is bringing in enough revenue to make a profit, while keeping prices low enough to encourage sales.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Briefing: Marketing Strategies

Page 5-73

3.

Place—getting a selected product in the right place at the right time a. Considerations marketers address: (1) Which businesses to buy from (2) When to buy the product (3) How much of the product to order (4) How to protect the product from damage (5) How to store the product until it’s needed (6) Where to make the product available (7) How to get the product where it’s needed (8) How to process customer orders (9) Which businesses to involve in the process (10) How to answer customer questions (11) How to coordinate all the steps involved b. Marketers are successful with the place element when customers can buy a desired product when and where they want.

4.

Promotion—letting customers know the product’s value and its benefits that meet customers’ current needs and refers to the various types of communication that marketers use to inform, persuade, or remind customers about their products a. Seeks a positive response from customers—they buy. b. Types of communication included: (1) Advertising (2) Personal selling (3) Publicity/Public relations (4) Sales promotion c. Factors marketers need to consider to use communication channels effectively: (1) Which messages to send (2) Which media to use (3) When they want messages delivered (4) How often they want messages delivered (5) How to coordinate communication efforts (6) How to evaluate results

Explain that marketers adapt their marketing mix to suit each situation. Discuss how the marketing mix elements are interrelated. 1. 2.

3.

A change to one element affects the other elements Examples: a. Improving product features will probably result in price increases. b. Simplifying the place element will probably result in price decreases. When marketers assemble the mix, they carefully determine which elements to include and to what degree—keeping in mind that the mix words as a unit.

Stress the importance of identifying goals and objectives before identifying strategies and tactics so that marketers know what they are trying to achieve before determining how they’re going to go about it.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-74

Knowledge/ Skill Statement

Understands the concepts and strategies utilized to determine and target marketing strategies to a select audience

Instructional Area

Market Planning

Performance Element

Select a target market appropriate for product/business to obtain the best return on marketing investment (ROMI).

Performance Indicator

Explain the concept of market and market identification (MP:003; IM LAP 9, MP LAP 3)

Level

Career-sustaining

SCANS

Information 5-8; Interpersonal 14; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 8-9, 12

21st Century Skills

Critical Thinking and Problem Solving Skills 1, 3; Communication & Collaboration 1

Objectives

a.

b. c. d. e. f. g. h. i.

Performance Activity

Define the following terms: market, target market, mass marketing, marketing segments, market segmentation, demographic segmentation, geographic segmentation, psychographic segmentation, and behavioral segmentation. Explain the importance of target markets to businesses. Describe advantages and disadvantages of mass marketing. Describe advantages and disadvantages of using market segments. Explain why the use of market segments is increasing. Describe demographic characteristics that are analyzed by marketers. Explain the value of geographic segmentation. Discuss the value of psychographic segmentation. Describe types of behavioral segmentation.

Note to the Instructor: Review and present the Market and Marketing Identification briefing (pp. 5-77 and 5-80) to students in a lecture or discussion format. Create a phrase or description that you would use to promote a new skin cream to the following markets: a. b. c. d. e.

Female athletes Physicians Men over 40 Teenage girls Women in other global regions (e.g., Asia, Europe, Latin America, etc.)

Select a business that offers products similar to those that you plan to sell or provide. Conduct research to determine its target market. Identify five things the business does to appeal to that market. Record your findings, and discuss them with a classmate, identifying additional things the business could do to attract its target market. Insert your findings in your VIP portfolio.

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Section 5

Planning Guide Sheets

Page 5-75

Resources LAP

MBAResearch and Curriculum Center. (2006). Have We Met? (Market Identification) [LAP: IM-009]. Columbus, OH: Author. MBAResearch and Curriculum Center. (2006). Have We Met? (Market Identification): Instructor copy [LAP: IM-009]. Columbus, OH: Author. MBAResearch and Curriculum Center. (2012). Have We Met? (Market Identification) [LAP: MP-003]. Columbus, OH: Author. MBAResearch and Curriculum Center. (2012). Have We Met? (Market Identification): Instructor copy [LAP: MP-003]. Columbus, OH: Author.

Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 243-245]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 118, 125). Woodland Hills, CA: McGraw-Hill/Glencoe. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 222-224). New York: McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 49, 53, 60, 284-285]. Mason, OH: South-Western Cengage Learning. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 182, 287-295, 300). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 166-170, 248]. Mason, OH: Thomson/South-Western. Clark, B.; Sobel, J.; & Basteria, C.G. (2010). Marketing dynamics (2nd ed.) [pp. 5861, 186-190,193-202]. Tinley Park, IL: Goodheart-Willcox. Etzel, M.J.; Walker, B.J.; & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 142-157]. New York: McGraw-Hill/Irwin. Farese, L.S.; Kimbrell, G. & Woloszyk, C.A. (2009). Marketing essentials (pp. 1217, 37-41, 741, 743). Woodland Hills, CA: Glencoe/McGraw-Hill. Grewal, D. & Levy, M. (2008). Marketing (pp. 36-37, 209-222). New York: McGrawHill/Irwin. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 191, 309, 385-387]. New York: McGraw-Hill Irwin. Kuratko, D.G., & Hodgetts, R.M. (2007). Entrepreneurship: Theory, process, practice (7th ed.) [pp. 294-298, 349, 358]. Mason, OH: Thomson SouthWestern. Lamb, C.W., Jr.; Hair, J.F., Jr.; & McDaniel C. (2003). Essentials of marketing (3rd ed.) [pp. 158-161, 163-166, 182-196]. Mason, OH: South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 151-154]. Mason, OH: Thomson South-Western. Perreault, W.D., Jr.; Cannon, J.P.; & McCarthy, E.J. (2008). Basic marketing: Marketing strategy planning approach (16th ed.) [pp. 60-84]. New York: McGraw-Hill/Irwin.

Workbooks/ Manuals

Burrow, J.L. (2003). Marketing: Business 2000 (pp. 33-34). Mason, OH: SouthWestern/Thomson Learning.

Software/ Online

Business Resource Software. (n.d.). Market segmentation. Retrieved April 14, 2011, from http://www.businessplans.org/segment.html BusinessMate. (2009-2010). What is market segmentation analysis? (Market positioning). Retrieved April 14, 2011, from http://www.businessmate.org/Article.php?ArtikelId=206 KnowThis.com. (1998-2010). Targeting markets. Retrieved April 14, 2011, from http://www.knowthis.com/tutorials/principles-of-marketing/targetingmarkets.htm Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

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Lake, L. (2011). Marketing basics for the small business. Retrieved April 14, 2011, from http://marketing.about.com/od/marketingbasics/a/smmktgbasics.htm MBAResearch and Curriculum Center. (2006). Have We Met? (Market Identification) [LAP: IM-009: Presentation Software]. Columbus, OH: Author. MBAResearch and Curriculum Center. (2012). Have We Met? (Market Identification) [LAP: MP-003: Presentation Software]. Columbus, OH: Author. Peppers, D. & Rogers, M. (2005). Mass marketing reaches for customer value. Retrieved April 14, 2011, from http://www.1to1media.com/printview.aspx?ItemID=29127#a1 Tutor2U. (n.d.). Market segmentation—Targeting strategies. Retrieved April 14, 2011, from http://www.tutor2u.net/business/marketing/segmentation-targetingstrategies.html Tutor2U. (n.d.). Market segmentation—Why segment markets? Retrieved April 14, 2011, from http://www.tutor2u.net/business/marketing/segmentation_why.asp

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Key Points

Briefing: Market & Market Identification

Page 5-77

Define the term market. A customer or potential customer who:  has an unfulfilled desire (needs a good or service);  is financially able to satisfy that desire (has the resources to purchase the good or service); and  is willing to satisfy that desire (is willing to purchase the good or service to meet a need). Define the term target market. A particular group of customers that a business seeks to attract; the customers who fall into a particular target market share similar needs and characteristics. Discuss examples of target markets. Explain why target markets are important to businesses. Businesses identify target markets in order to make products that will effectively meet the needs of the targeted customers. Discuss the concept of mass marketing. Mass marketing is designing products and directing marketing activities to appeal to the whole market, which is everyone. Explain the advantages of mass marketing.   

Mass marketing can be used to communicate a broad message to as many customers as possible. Mass marketing allows a business to produce one product for everyone, which is more cost-effective than producing and marketing several products to several target markets. Mass marketing provides the most possibilities for success at the least cost.

Describe disadvantages of mass marketing.  

Mass marketing’s audience is very diverse. Only small percentage of that mass market is likely to purchase the product.

Discuss examples of mass marketing. Explain the concept of market segmentation. Market segmentation uses the division of a total market into smaller, more specific groups. The needs and concerns of each market segment can be met more directly and carefully.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Briefing: Market & Market Identification Discuss advantages of segment marketing.   

Segment marketing is more precise than mass marketing. Segment marketing allows for a finely tuned product, an appropriate price, and ease of distribution for the targeted market segment. Segment marketing encourages effective communication because its message is targeted to a specific market segment.

Describe disadvantages of segment marketing.  

Segment marketing requires more money. Because segment marketing is targeted at a more specific group of people with more specific needs and expectations, the product is often more complex to produce.

Discuss examples of segment marketing. Explain why the use of market segments is increasing. Today’s customers are more discerning with product purchases. Those customers are more educated and less swayed by mass marketing. They want to know how the good or service will benefit them directly. In order to address their concerns more directly, many marketers are turning to segment marketing. There are numerous ways to divide a market into segments. Some of the most common ways to group customers are:    

Demographic Segmentation Geographic Segmentation Behavioral Segmentation Psychographic Segmentation

Describe the concept of demographic segmentation. Demographic segmentation involves dividing a market on the basis of its physical and social characteristics. Demographic characteristics include:     

Gender Origin or heritage Religion Social or economic status Life stage

Ask students how marketers would classify them by gender, origin, religion, etc.

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Section 5

Briefing: Market & Market Identification

Page 5-79

Explain the concept of geographic segmentation. Geographic segmentation is the division of a market on the basis of where consumers are located—grouping customers based on where they live. Geographic segmentation allows marketers to determine customers’ purchase preferences according to things like their climate, their political boundaries, or the population density of their area. Geographic segmentation helps marketers to discover where their markets are located, who their competitors are, and which media will reach their customers. Ask students to give examples of ways to segment a market geographically. Discuss the concept of behavioral segmentation. Marketers use behavioral segmentation to divide a market on the basis of consumers’ response to a product. With this method, marketers look into the cause-and-effect nature of customers’ purchase decisions. What do customers respond to when they buy a particular product? Behavioral segmentation is useful because it lines up with the marketing concept, which uses the customer’s point of view to make marketing decisions. Customers typically ask themselves one or more of the following questions when buying a particular product:     

How will the product benefit me? Am I ready to buy it? When will I use the product? Am I in a comfortable buying pattern? Do I feel loyal to a particular brand?

Ask students if they buy their clothes based on brand name, special occasion, habit—or another reason. Why? Dividing the class up into market segments based on why individual students buy their clothes is an example of behavioral segmentation.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Briefing: Market & Market Identification Describe the concept of psychographic segmentation. Psychographic segmentation is the division of a market on the basis of consumers’ lifestyles and personalities. Psychographic segmentation helps marketers to find out what’s driving their customers to make the choices they do. Customers’ buying decisions are influenced by their:        

Values Motives Attitudes Opinions Interests Activities Personalities Lifestyles

Ask students what motivates them to buy the leisure products they do. If it’s sporting equipment, why did they purchase the item(s) they did?

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Section 5

Planning Guide Sheets

Page 5-81

Knowledge/ Skill Statement

Understands the concepts and strategies utilized to determine and target marketing strategies to a select audience

Instructional Area

Market Planning

Performance Element

Employ marketing-information to develop a marketing plan.

Performance Indicator

Explain the nature of marketing plans (MP:007, MP LAP 1)

Level

Specialist

SCANS

Information 5-8; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 8-9, 12

21st Century Skills

Critical Thinking and Problem Solving Skills 1, 3; Communication & Collaboration 1

Objectives

a. b. c. d.

Performance Activity

Note to the Instructor: Review and present the Marketing Plans briefing (pp. 5-83 and 5-84) to students in a lecture or discussion format.

Define the terms marketing plan, situation analysis. Explain the benefits associated with having a marketing plan. Identify the components of marketing plans. Describe the purpose of each component of the marketing plan.

Participate in a small-group activity to analyze the components of a marketing plan provided by your teacher. Determine its strengths and weaknesses. Recommend ways to improve the plan. Contact a business that offers products similar to those you plan to provide, and obtain a copy of the business’s marketing plan, if possible. Analyze the marketing plan, determine its strengths and weaknesses, and recommend ways to improve the plan. Discuss your findings with a classmate, and submit your work to your instructor for review. Also, insert your findings in your VIP portfolio.

Resources LAP

MBAResearch and Curriculum Center. (2011). A Winning Plan (Nature of Marketing Plans) [LAP: MP-001]. Columbus, OH: Author. MBAResearch and Curriculum Center. (2011). A Winning Plan (Nature of Marketing Plans): Instructor copy [LAP: MP-001]. Columbus, OH: Author.

Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 178-179, 287-296]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 206-215). Woodland Hills, CA: McGraw-Hill/Glencoe. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (220-224, 310). New York: McGraw-Hill. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 60-73). Mason, OH: South-Western Cengage Learning.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Planning Guide Sheets

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Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 238-240]. Mason, OH: Thomson/SouthWestern. Etzel, M.J.; Walker, B.J.; & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 563-567]. New York: McGraw-Hill/Irwin. Farese, L.S.; Kimbrell, G.; & Woloszyk, C.A. (2009). Marketing essentials (pp. 3236). Woodland Hills, CA: Glencoe/McGraw-Hill. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 390-392]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 298302]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp.130, 140-161]. Mason, OH: Thomson South-Western. Perreault, W.D., Jr.; Cannon, J.P.; & McCarthy, E.J. (2008). Basic marketing: Marketing strategy planning approach (16th ed.) [pp. 41-43, 215-218, 588-592]. New York: McGraw-Hill/Irwin. Software/ Online

Fleischner, M. (1999-2011).10 key components of a marketing plan. Retrieved April 14, 2011, from http://www.businessknowhow.com/marketing/marketingplan.htm Introduction to Marketing Planning. (n.d.). Retrieved April 14, 2011, from http://classes.bus.oregonstate.edu/Summer05/ba499/elton/CourseMaterials/Introduction%20to%20Marketing%20Planning .ppt KnowThis.Com. (1998-2011). How to write a marketing plan. Retrieved April 14, 2011, from http://www.knowthis.com/tutorials/principles-of-marketing/how-towrite-a-marketing-plan.htm Lee, L. & Hayes, D. (2007, April 3). Creating a marketing plan. Retrieved April 14, 2011, from http://www.marketingpower.com/ResourceLibrary/Pages/Best%20Practices/Creatin g_a_Marketing_Plan.aspx Marketing Teacher. (2000-2011). Marketing plans—Lesson. Retrieved April 14, 2011, from http://marketingteacher.com/Lessons/lesson_marketing_plan.htm Mazzara, G. (2003, March 18). Why do we need a marketing plan anyway? Retrieved April 14, 2011, from http://www.marketingprofs.com/3/mazzara1.asp?sp=1#split MBAResearch and Curriculum Center. (2011). A Winning Plan (Nature of Marketing plans) [LAP: MP-001: Presentation Software]. Columbus, OH: Author. Milne, G. (2005-2010). Writing the situational analysis for your marketing plan. Retrieved April 14, 2011, from http://www.marketing-plansuccess.com/articles/situation-analysis.php Mplans.com. (1996-2011). Sample marketing plans. Retrieved April 14, 2011, from http://www.mplans.com/spm/index.cfm?a=mc Obringer, L.A. (1998-2011). How marketing plans work. Retrieved April 14, 2011, from http://money.howstuffworks.com/marketing-plan9.htm Palo Alto Software. (1998-2011). Sample marketing plan. Retrieved April 14, 2011, from http://www.morebusiness.com/templates_worksheets/bplans/printpre.brc QuickMBA. (1999-2007). Marketing plan outline. Retrieved April 21, 2010, from http://www.quickmba.com/+marketing/plan/

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Section 5

Key Points

Briefing: Marketing Plans

Page 5-83

Define the term marketing plan.    

A written document that specifies how, where, and to whom a business plans to market its product(s) and/or brand(s). A small business typically creates a one-year marketing plan. Larger business may develop five-year marketing plans. A marketing plan may be part of a more comprehensive business plan.

Explain benefits associated with having a marketing plan.       

Understanding past marketing decisions and outcomes better Understanding target market(s) better Setting goals Planning marketing strategies with more precision Obtaining funding Providing direction for everyone in the organization Tracking progress more effectively

Identify the components of a marketing plan.        

Executive Summary Situation Analysis Desired Target Market Marketing Goals and Objectives Marketing Strategies and Programs Financial Plans Performance and Implementation Appendices

Describe the purposes of each marketing-plan component: Executive summary The executive summary serves as an introduction to the marketing plan and helps the reader to understand the purpose of the marketing plan. It contains a brief overview of the marketing plan and focuses only on the most important points of the plan. Situation analysis The situation analysis is an assessment of where the organization currently stands both internally and externally. To develop this assessment, much analysis must be done: an external analysis, a customer analysis, an internal analysis, and a SWOT analysis. The organization’s product(s), target markets, distribution channels, competitors, finances, strengths, weaknesses, opportunities, and threats must all be considered. Desired target market The marketing plan should include information on the target market the company desires to reach. This section should include a full demographic description of the target market. It should also provide answers to questions about what the target market wants and needs, how the target market will use the company’s product(s), how much the target market will be willing to pay for the product(s), and what message the business wants the target market to hear from the firm’s marketing efforts.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Briefing: Marketing Plans

Page 5-84

Marketing goals and objectives The marketing goals define what the business hopes to accomplish. The marketing objectives, which should be measurable and specific, spell out how to meet those goals. Marketing strategies and programs The marketing strategies and programs component of the marketing plan provides detailed information about the organization’s planned marketing mix (product, price, place, and promotion). Financial plans The financial plans section of the marketing plan provides details on the expected expenses and profits of the plan’s programs. Performance and implementation In this section of the plan, marketers explain their expected results and indicate how the marketing plan’s progress will be measured. This portion also describes potential changes and adjustments that can be made to keep the marketing plan on track. Evaluation and control section The evaluation and control section contains performance standards against which to measure the marketing plan and company performance. This section also provides information on what actions should be taken if the marketing goals and objectives are not met. Appendices The appendices include any charts, graphs, or miscellaneous materials related to the marketing plan.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-85

Knowledge/ Skill Statement

Understands the concepts and strategies utilized to determine and target marketing strategies to a select audience

Instructional Area

Market Planning

Performance Element

Employ marketing-information to develop a marketing plan.

Performance Indicator

Explain the role of situation analysis in the marketing planning process (MP:008)

Level

Specialist

SCANS

Information 5-8; Systems 15; Basic Skills 1-3,5-6; Thinking Skills 9,12

21st Century Skills

Reason Effectively 1; Use Systems Thinking 1; Make Judgments and Decisions 1, 4, 5; Communicate Clearly 1; Access and Evaluate Information 1, 2; Use and Manage Information 1; Apply Technology Effectively 1, 3

Objectives

a.

b. c. d.

Performance Activity

Define the terms business opportunity, business threat, business environment, economic development, technological change, economic change, environmental scanning, and environmental monitoring. Explain how environmental threats for one company can represent opportunities for another company. Discuss the purpose of environmental scanning and monitoring in situation analysis. Explain why businesses should evaluate their internal environments in the context of changes occurring in their external environments.

Identify specific internal and external factors that should be considered in your business’s situation analysis. Then, share your list with a small group of classmates. Using your classmates’ input, finalize the list of factors that will be considered in your business’s situation analysis. Save this list in your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 63-65]. Boston: Houghton Mifflin Company. Burrow, J.L. (2006). Marketing (2nd ed.) [p. 599]. Mason, OH: Thomson SouthWestern. Daft, R.L., & Marcic, D. (2009). Understanding management (6th ed.) [pp. 175-177]. Mason, OH: South-Western Cengage Learning. Farese, L. S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (p. 35). Woodland Hills, CA: McGraw-Hill Glencoe. Grewal, D. & Levy, M. (2009). Marketing (pp. 26-27). New York: McGraw-Hill Irwin. Hill, C.W.L. & Jones, G.R. (2008). Essentials of strategic management: Instructor’s copy (pp. 8-9, 53-73). Boston: Houghton Mifflin Company. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 31-32, 388-389]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 419420]. Mason, OH: Thomson South-Western. Kurtz, D.L. (2009). Contemporary marketing 2009 edition (pp. 45-46, 64-65). Mason, OH: South-Western Cengage Learning. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

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Lamb, C.W., Jr., Hair, J.F., & McDaniel, C. (2003). Essentials of marketing (3rd ed.) [pp. 14-15, 30-31]. Mason, OH: South-Western Thomson Learning. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 56-61]. Mason, OH: Thomson South-Western. Solomon, M.R., Marshall, G.W., & Stuart, E.W. (2008). Marketing: Real people, real choices (5th ed.) [pp. 43-44, 51, 543-549]. Upper Saddle River, NJ: Pearson Prentice Hall. Software/ Online

Business Owner’s Toolkit. (1995-2011). Events outside your control. Retrieved April 14, 2011, from http://www.toolkit.cch.com/text/P02_4360.asp Campus Library. (n.d.). Marketing plan tutorial: Situational analysis. Retrieved April 14, 2011, from http://library.uwb.edu/guides/Tutorials/MarketingTutorial/FramedTutorial.html#II I.%20SituationalAnalysis Day, G.S., & Schoemaker, P. (2006, May 15). Scanning for threats and opportunities. Retrieved April 4, 2011, from http://hbswk.hbs.edu/archive/5329.html Gentry, A. (2010, January 7). How to create a small business marketing plan. Retrieved April 14, 2011, from http://www.suite101.com/content/how-to-createa-small-business-marketing-plan-a186484 MDF. (2005). Environmental scan. Retrieved April 14, 2011, from http://assets.sportanddev.org/downloads/environmental_scan.pdf Milne, G. (2005-2010). Writing the situational analysis for your marketing plan. Retrieved April 14, 2011, from http://www.marketing-plansuccess.com/articles/situation-analysis.php NetMBA.com. (2002-2010). Situation analysis. Retrieved April 14, 2011, from http://www.netmba.com/marketing/situation/ Nowell, D. (2009). Current situation analysis. Retrieved April 14, 2011, from http://www-acad.sheridaninstitute.ca/~nowell/markplan/currsit.htm Situational analysis/Environmental scan. (n.d.). Retrieved April 14, 2011, from http://personnel.ky.gov/NR/rdonlyres/57377746-1706-42D3-8BE26CF96661B562/0/EASPSituationAnalysisOverview.pdf

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-87

Knowledge/ Skill Statement

Understands the concepts and strategies utilized to determine and target marketing strategies to a select audience

Instructional Area

Market Planning

Performance Element

Select a target market appropriate for product/business to obtain the best return on marketing investment (ROMI).

Performance Indicator

Identify market segments (MP:004)

Level

Manager

SCANS

Information 5-8; Systems 15; Basic Skills 1-3, 5-6; Thinking Skills 8,11-12

21st Century Skills

Use Systems Thinking 1; Make Judgments and Decisions 1, 4; Solve Problems 1; Communicate Clearly 1; Access and Evaluate Information 1, 2; Use and Manage Information 1; Analyze Media 1, 2

Objectives

a. b. c. d. e. f. g. h. i. j.

Performance Activity

Explain how product competition is used to define a market. Describe how types of customers can be used to define a market. Discuss the use of geography to define a market. Explain the use of production-distribution systems in market definition. Explain the purpose of developing a target-market profile. Identify objective terms that can be used to profile a target market. Discuss market research techniques that can be used to obtain target market information. Identify sources that can be accessed to obtain target-market information. Develop a target-market profile. Demonstrate procedures for identifying market segments.

Determine who your ideal customer is going to be. After determining who that ideal customer should be, conduct market research to obtain objective information that can be used in creating a target market profile of that customer. Present your profile orally to the class, and obtain feedback from classmates. Insert the selected target market profile into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 63-65]. Boston: Houghton Mifflin Company. Allen, K.A., & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 118-119). Woodland Hills, CA: McGraw-Hill Glencoe. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 166-170, 220-222, 419]. Mason, OH: Thomson South-Western. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics (2nd ed.) [pp. 58-61, 193-202, 216-218]. Tinley Park, IL: Goodheart-Willcox. Farese, L. S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (pp. 1416, 37-41, 743). Woodland Hills, CA: McGraw-Hill Glencoe. Greene, C.L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [p. 133]. Mason, OH: Thomson South-Western. Grewal, D. & Levy, M. (2009). Marketing (pp. 127-135). New York: McGraw-Hill Irwin. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

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Hill, C.W.L. & Jones, G.R. (2008). Essentials of strategic management: Instructor’s copy (pp. 110-111). Boston: Houghton Mifflin Company. Kotler, P. (2003). Marketing management (11th ed.) [pp. 279-298]. Upper Saddle River, NJ: Prentice Hall Pearson Education International. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 31-32]. New York: McGraw-Hill Irwin. Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [pp. 184-194]. Upper Saddle River, NJ: Pearson Prentice Hall. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 419420]. Mason, OH: Thomson South-Western. Kurtz, D.L. (2009). Contemporary marketing 2009 edition (pp. 47-48, 65, 281-300). Mason, OH: South-Western Cengage Learning. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 151-154]. Mason, OH: Thomson South-Western. Mariotti, S. (2006). How to start & operate a small business (10th ed.) [pp. 149-150, 244-247, 249, 592, 597]. New York: The National Foundation for Teaching Entrepreneurship. Solomon, M.R., Marshall, G.W., & Stuart, E.W. (2008). Marketing: Real people, real choices (5th ed.) [pp. 203-218]. Upper Saddle River, NJ: Pearson Prentice Hall. Software/ Online

Abrams, R. (2002, February 20). Getting the dirt on your market. Retrieved April 14, 2011, from http://www.inc.com/articles/2002/02/23903.html Abid, M.A. (2008, September 11). Major levels of market segmentation and bases for segmenting consumer and business markets. Retrieved April 14, 2011, from http://bizcovering.com/marketing-and-advertising/major-levels-of-marketsegmentation-and-bases-for-segmenting-consumer-and-business-markets/ Biz/ed. (2006, September 1). Knowing your customers. Retrieved April 14, 2011, from http://www.bized.co.uk/educators/level2/competition/lesson/customers1.htm Identifying market segments and targets. (n.d.). Retrieved April 14, 2011, from http://www-rohan.sdsu.edu/~renglish/370/notes/chapt09/index.htm MaGee, S. (2003). How to identify a target market and prepare a customer profile. Retrieved April 14, 2011, from http://www.edwardlowe.org/index.elf?page=sserc&function=story&storyid=637 8 Penn State College of Agricultural Sciences. (2009, July 2). Researching your market. Retrieved April 14, 2011 from http://lebanon.extension.psu.edu/Community/ResearchingEnglish.htm Thomas, J.W. (2007). Market segmentation. Retrieved April 14, 2011, from http://www.decisionanalyst.com/publ_art/MarketSegmentation.dai

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Knowledge/ Skill Statement

Understands the concepts and strategies utilized to determine and target marketing strategies to a select audience

Instructional Area

Market Planning

Performance Element

Select a target market appropriate for product/business to obtain the best return on marketing investment (ROMI).

Performance Indicator

Select a target market (MP:005)

Level

Manager

SCANS

Information 5-8; Interpersonal 14; Systems 15; Basic Skills 1-3,5-6; Thinking Skills 8-9,12

21st Century Skills

Make Judgments and Decisions 1, 4; Solve Problems 1; Communicate Clearly 1; Access and Evaluate Information 1, 2; Use and Manage Information 1; Analyze Media 1, 2

Objectives

a. b. c. d. e. f. g. h. i. j. k. l.

Performance Activity

Explain reasons to evaluate market segments. Identify criteria used to assess attractiveness of market segments. Describe factors to consider when assessing the fit between a market segment and a company. Explain portfolio matrix approaches used to evaluate market attractiveness. List information needed to identify total market potential. Identify factors that influence market potential. Describe information sources that can be accessed to assist in identifying a total potential market. Estimate a segment’s market potential. Explain the components of a marketing segmentation analysis. Describe implications in selecting global target markets. Explain procedures for selecting target markets. Demonstrate procedures for selecting a target market.

Determine the market area for your business. Obtain demographic data about the market area by contacting the local chamber of commerce or by visiting such web sites as http://www.census.gov/, http://www.bls.gov/bls/demographics.htm, or http://zipskinny.com/. Determine the number of people in the market area who have similar demographic characteristics. Also, determine their consumption/usage levels. That information can be obtained from your business’s trade association, a university, or the United States Department of Agriculture (for food products). Create a chart depicting the information obtained and present the chart to the class. Obtain your classmates’ input, and if necessary, revise your target market chart. Then, insert it into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 63-65]. Boston: Houghton Mifflin Company. Allen, K.A., & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 118-119). Woodland Hills, CA: McGraw-Hill Glencoe.

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Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 66, 223-224). New York: McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 48-49, 285-287]. Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 169-170, 223, 248, 419]. Mason, OH: Thomson South-Western. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics (2nd ed.) [pp. 183190]. Tinley Park, IL: Goodheart-Willcox. Farese, L. S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (pp. 1416, 38-39, 743). Woodland Hills, CA: McGraw-Hill Glencoe. Greene, C.L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 130-132]. Mason, OH: Thomson South-Western. Grewal, D. & Levy, M. (2009). Marketing (pp. 27-29, 139). New York: McGraw-Hill Irwin. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 387-388]. New York: McGraw-Hill Irwin. Kotler, P. (2003). Marketing management (11th ed.) [pp. 299-303]. Upper Saddle River, NJ: Prentice Hall Pearson Education International. Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [pp. 195-203]. Upper Saddle River, NJ: Pearson Prentice Hall. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 271272]. Mason, OH: Thomson South-Western. Kurtz, D.L. (2009). Contemporary marketing 2009 edition (pp. 47-48, 65, 281-300). Mason, OH: South-Western Cengage Learning. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 154-157]. Mason, OH: Thomson South-Western. Solomon, M.R., Marshall, G.W., & Stuart, E.W. (2008). Marketing: Real people, real choices (5th ed.) [pp. 216-220]. Upper Saddle River, NJ: Pearson Prentice Hall. Software/ Online

Business Owner’s Toolkit. (1995-2011). How to segment your market. Retrieved April 14, 2011, from http://www.toolkit.cch.com/text/p03_1036.asp Business Owner’s Toolkit. (1995-2010). Niche marketing. Retrieved April 14, 2011, from http://www.toolkit.cch.com/text/p03_1035.asp Chew, L.P. (n.d.). Chapter 5 market measurement. Retrieved April 14, 2011, from http://www.umsl.edu/~buslchew/ppt1/BA%20315%20CPT%205%20PPT%5B1 %5D.ppt%206%201.ppt Gainer, M. (n.d.). How to select a target market. Retrieved April 14, 2011, from http://smallbusiness.chron.com/select-target-market-3352.html MaGee, S. (2003). How to identify a target market and prepare a customer profile. Retrieved April 14, 2011, from http://www.edwardlowe.org/index.elf?page=sserc&function=story&storyid=6378 Stowe, T. (2007). Selecting your target market. Retrieved April 14, 2011, from http://www.sideroad.com/Entrepreneur/selecting-target-market.html Werth, P. (2009, August 31). Essential steps to select the target market. Retrieved April 14, 2011, from http://www.populararticles.com/article170843.html Wolfe, K. (2002, March 4). Considering an agritainment enterprise. Retrieved April 14, 2011, from http://www.agecon.uga.edu/~caed/WinterChautauq.pdf

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Knowledge/ Skill Statement

Understands the concepts and strategies utilized to determine and target marketing strategies to a select audience

Instructional Area

Market Planning

Performance Element

Employ marketing-information to develop a marketing plan.

Performance Indicator

Conduct market analysis (market size, area, potential, etc.) (MP:009)

Level

Manager

SCANS

Information 5-8; Systems 15; Technology 19; Basic Skills 1-6; Thinking Skills 8,11

21st Century Skills

Reason Effectively 1; Use Systems Thinking 1; Make Judgments and Decisions 1, 4, 5; Communicate Clearly 1; Access and Evaluate Information 1, 2; Use and Manage Information 1; Apply Technology Effectively 1, 3

Objectives

a. b. c. d.

Performance Activity

Complete sections 1, 2, 3, 6, 7, and 8 of the Virtual Advisor tutorial Conduct a Market Analysis, located at http://www.kutztownsbdc.org/Virtual-Advisor/12Conduct-a-Marketing-Analysis/. As you work your way through the tutorial, create a checklist of the steps needed to complete a market analysis. When finished with the tutorial, print (but don’t complete) the Virtual Advisor’s Conduct a Market Analysis worksheet found at http://www.kutztownsbdc.org/Virtual-Advisor/12-Conduct-aMarketing-Analysis/marketanalysisworksheet.htm. Your checklist and print-out will serve as guides when you conduct your market analysis.

Explain the importance of market analysis to the marketing-planning process. Identify the components of a market analysis. Explain the value of using spreadsheets in target segment analysis. Demonstrate procedures for conducting a market analysis.

Obtain market information to prepare a market analysis of your target market(s). The analysis should include a clear explanation of the market segmentation, target market focus, a market forecast, and a description of each target-market segment (statistics about the number of potential customers, annual growth rate, annual spending, and market value). Key components of the market analysis should include: I. Target segment description II. Target segment’s needs (Why do customers need the product/service?) III. Distribution channels (Where do customers go to obtain product/service?) IV. Buying habits (What factors influence target market to buy?) V. Communication channels (How will you communicate with the customers?) Ask a local business professional or your instructor to review your completed market analyses and to provide feedback on it. Given his/her feedback, create a final draft of your marketing analysis. Insert the completed market analysis into your VIP portfolio.

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Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 243-245]. Boston: Houghton Mifflin Company. Allen, K.A., & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 128-129). Woodland Hills, CA: McGraw-Hill Glencoe. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 66, 223-224). New York: McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 214-215]. Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 244-247, 519]. Mason, OH: Thomson South-Western. Farese, L. S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (pp. 3741, 743). Woodland Hills, CA: McGraw-Hill Glencoe. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 386-387]. New York: McGraw-Hill Irwin. Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [p. 195]. Upper Saddle River, NJ: Pearson Prentice Hall. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 142-144]. Mason, OH: Thomson South-Western. Solomon, M.R., Marshall, G.W., & Stuart, E.W. (2008). Marketing: Real people, real choices (5th ed.) [pp. 216-218]. Upper Saddle River, NJ: Pearson Prentice Hall.

Software/ Online

Berry, T. (2005, June 13). Conducting a market analysis for your business plan. Retrieved April 14, 2011, from http://www.entrepreneur.com/startingabusiness/businessplans/businessplanco achtimberry/article78002.html Edward Lowe Foundation. (2011). How to prepare a market analysis. Retrieved April 14, 2011, from http://www.edwardlowe.org/index.elf?page=sserc&function=story&storyid=635 7 Kutztown University Small Business Development Center. (2011). Conduct a marketing analysis. Retrieved April 14, 2011, from http://www.kutztownsbdc.org/eLearningCourses/sba-analysis.asp Meyer, M.H. (2002). A simple, effective business plan writing guide (Market analysis). Retrieved April 14, 2011, from http://web.cba.neu.edu/~mmeyer/courses/ent3965/businessplan.pdf UK Business Advisors Limited. (2008, June). How to conduct a market analysis for your business. Retrieved April 14, 2011, from http://ukba.co.uk/Jun08.pdf Virtual Advisor Inc. (2009). Conduct a market analysis. Retrieved April 14, 2011, from http://www.vainteractive.com/inbusiness/editorial/sales/ibt/market_analysis.html

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Knowledge/ Skill Statement

Understands the concepts and strategies utilized to determine and target marketing strategies to a select audience

Instructional Area

Market Planning

Performance Element

Employ marketing-information to develop a marketing plan.

Performance Indicator

Conduct SWOT analysis for use in the marketing planning process (MP:010, IM LAP 8)

Level

Manager

SCANS

Information 5-8; Systems 15; Basic Skills 1-2,5-6; Thinking Skills 8-9,12

21st Century Skills

Reason Effectively 1; Use Systems Thinking 1; Make Judgments and Decisions 1, 4, 5; Communicate Clearly 1; Access and Evaluate Information 1, 2; Use and Manage Information 1; Apply Technology Effectively 1, 3

Objectives

a. b. c. d. e. f. g.

Performance Activity

Collaborate with a team of three or four students to conduct a SWOT analysis of a school-based enterprise. Based on the team’s findings, determine the implications for the enterprise. Present an oral report of the analysis and implications to the enterprise’s management team.

Define the term SWOT analysis. Explain whom to involve in a SWOT analysis. Discuss when a SWOT analysis should be conducted. Describe the benefits of conducting a SWOT analysis. Identify factors that should be considered in a SWOT analysis. Explain procedures for conducting a SWOT analysis. Demonstrate procedures for conducting a SWOT analysis for use in marketing planning.

Conduct a SWOT analysis of your business venture. Use your findings to determine the implications for your enterprise. When you are finished with your research and analysis, discuss your results with the class. Insert your SWOT analysis into your VIP portfolio.

Resources LAPs

Marketing Education Resource Center. (2006). Analyze This! [LAP: IM-008]. Columbus, OH: Author. Marketing Education Resource Center. (2006). Analyze This!: Instructor copy [LAP: IM-008]. Columbus, OH: Author.

Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [p. 64]. Boston: Houghton Mifflin Company. Allen, K.A., & Meyer, E.C. (2006). Entrepreneurship and small business management (p. 293). Woodland Hills, CA: McGraw-Hill Glencoe. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics (2nd ed.) [p. 26]. Tinley Park, IL: Goodheart-Willcox. Daft, R.L., & Marcic, D. (2009). Understanding management (6th ed.) [pp. 176-177]. Mason, OH: South-Western Cengage Learning. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Farese, L. S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (pp. 2632). Woodland Hills, CA: McGraw-Hill Glencoe. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [p. 293]. Mason, OH: Thomson/South-Western. Grewal, D. & Levy, M. (2009). Marketing (pp. 26-27). New York: McGraw-Hill Irwin. Hill, C.W.L. & Jones, G.R. (2008). Essentials of strategic management: Instructor’s copy (pp. 8-9, 53-73). Boston: Houghton Mifflin Company. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 201-203]. New York: McGraw-Hill Irwin. Kotler, P. (2003). Marketing management (11th ed.) [pp. 102-104]. Upper Saddle River, NJ: Prentice Hall Pearson Education International. Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [p. 52]. Upper Saddle River, NJ: Pearson Prentice Hall. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 295, 420]. Mason, OH: Thomson South-Western. Kurtz, D.L. (2009). Contemporary marketing 2009 edition (pp. 45-46, 64-65). Mason, OH: South-Western Cengage Learning. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 60-61]. Mason, OH: Thomson South-Western. Mariotti, S. (2006). How to start & operate a small business (10th ed.) [pp. 42, 50, 588]. New York: The National Foundation for Teaching Entrepreneurship. Solomon, M.R., Marshall, G.W., & Stuart, E.W. (2008). Marketing: Real people, real choices (5th ed.) [p. 44]. Upper Saddle River, NJ: Pearson Prentice Hall. Software/ Online

BNET. (2007, July 3). Conducting a SWOT analysis. Retrieved April 14, 2011, from http://www.bnet.com/article/conducting-a-swot-analysis/66478 Business Owner’s Toolkit. (1995-2011). Case study: Life designs architecture. Retrieved April 14, 2011, from http://www.toolkit.cch.com/text/P03_6022.asp Business Owner’s Toolkit. (1995-2011). Strength, weakness, opportunity, threat. Retrieved April 14, 2011, from http://www.toolkit.cch.com/text/p03_6020.asp Chapman, A. (1995-2011). SWOT analysis. Retrieved April 14, 2011, from http://www.businessballs.com/swotanalysisfreetemplate.htm Cloutier, C. (2008-2010). Get the most from your business: Conduct a SWOT analysis. Retrieved April 14, 2011, from http://www.officearrow.com/organization_and_workflow/p2_articleid/869/p142_i d/869/p142_dis/2 Learn to conduct a SWOT analysis. (n.d.). Retrieved April 14, 2011, from http://www.bluewaterinternational.net/bluewater/LearntoConductaSWOTAnalys is.pdf MacNicoll, T. (2010). Doing a SWOT analysis for your company. Retrieved April 14, 2011, http://www.edwardlowe.org/index.elf?page=sserc&storyid=0176&function=story Marketing Education Resource Center. (2006). Analyze This! [LAP: IM-008: Presentation Software]. Columbus, OH: Author. SWOT. (n.d.). Retrieved April 14, 2011, from http://business.nmsu.edu/~dboje/sbc/pages/page3.html

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Knowledge/ Skill Statement

Understands the concepts and strategies utilized to determine and target marketing strategies to a select audience

Instructional Area

Market Planning

Performance Element

Employ marketing-information to develop a marketing plan.

Performance Indicator

Conduct competitive analysis (MP:012)

Level

Manager

SCANS

Information 5-7; Systems 15,17; Basic Skills 1-6; Thinking Skills 7-9

21st Century Skills

Reason Effectively 1; Use Systems Thinking 1; Make Judgments and Decisions 1, 4, 5; Communicate Clearly 1; Access and Evaluate Information 1, 2; Use and Manage Information 1; Apply Technology Effectively 1, 3

Objectives

a. b. c. d.

Performance Activity

Determine your business’s primary and secondary competitors. Write a short report identifying these competitors, the competitors’ product offerings, their strengths and weaknesses, and their position in the market. Specifically address the following themes:

Explain benefits of preparing a competitive analysis. Identify sources of competitive information. Describe components of a competitive analysis. Demonstrate procedures for conducting a competitive analysis.

  

Nature of competition (size, market share, growth potential, capital/ resources, image, marketing strategy, and target markets) Factors customers consider most important in choosing one provider over another Competitors’ strengths and weaknesses compared to those of your business

Participate in a small-group activity to discuss your competitive analysis. Insert the completed competitive analysis into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 60-67, 137-138, 253-256]. Boston: Houghton Mifflin Company. Allen, K.A., & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 104, 126-127). Woodland Hills, CA: McGraw-Hill Glencoe. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 54-57, 68-70, 316-317). New York: McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 12, 106-107, 109, 130]. Mason, OH: South-Western Cengage Learning. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (p. 63). Mason, OH: South-Western Cengage Learning. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 99-100, 115, 180-183, 519, 573-574]. Mason, OH: Thomson South-Western. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [p. 281]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Farese, L. S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (pp. 2930, 742). Woodland Hills, CA: McGraw-Hill Glencoe. Greene, C.L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 143-145]. Mason, OH: Thomson South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [p. 389]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 295, 359]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 57-58]. Mason, OH: Thomson South-Western. Software/ Online

Aware. (2011, January 5). Competitor analysis—A brief guide. Retrieved April 14, 2011, from http://www.marketing-intelligence.co.uk/resources/competitoranalysis.htm Business Link. (n.d.). Conduct a competitor analysis. Retrieved April 14, 2011, from http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId =1074451288 Business Owner’s Toolkit. (1995-2011). Competitive situation. Retrieved April 14, 2011, from http://www.toolkit.cch.com/text/P03_8029.asp FindLaw. (2009, April 2). Competitive analysis. Retrieved April 14, 2011, from http://www.reuters.com/article/SmallBusinessLaw/idUSTRE5314NB20090402 MaGee, S. (2003). How to conduct and prepare a competitive analysis. Retrieved April 14, 2011, from http://www.edwardlowe.org/index.elf?page=sserc&storyid=6354&function=story U.S. Small Business Administration. (n.d.). Marketing plan components: Competitor & issues analysis. Retrieved April 14, 2011, from http://www.sba.gov/smallbusinessplanner/manage/marketandprice/serv_compe titor.html U.S. Small Business Administration. (n.d.). Competitive analysis. Retrieved April 14, 2011, from http://www.sba.gov/smallbusinessplanner/manage/marketandprice/SERV_CO MPANAYLSIS.html Waters, S. (2011). What’s your competitive edge? Retrieved April 14, 2011, from http://retail.about.com/od/competition/a/comp_edge.htm

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Knowledge/ Skill Statement

Understands business’s responsibility to know, abide by, and enforce laws and regulations that affect business operations and transactions

Instructional Area

Business Law

Performance Element

Acquire foundational knowledge of business laws and regulations to understand their nature and scope.

Performance Indicator

Describe legal issues affecting businesses (BL:001)

Level

Specialist

SCANS

Information 5,7; Systems 15; Basic Skills 1-2,5-6; Thinking Skills 12; Personal Qualities 13,17

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 1; Critical Thinking and Problem Solving 1, 3; Communication & Collaboration 1

Objectives

a. b. c. d. e. f. g. h. i.

Performance Activity

Define the following terms: contract law, sales law, property law, intellectual property and computer law, bankruptcy law, and tax law. Identify types of laws that affect businesses. Explain the purpose of contract law. Describe the purpose of sales law. Discuss the purpose of property law to businesses. Explain the intent of intellectual property and computer law. Describe the purpose of bankruptcy law. Explain the purpose of tax law. Explain reasons that businesses are regulated.

Talk with your business partner to find out what the person considers the most pressing legal issue affecting his/her business. Find out how the issue affects business practices. Discuss your findings with the class, comparing differences in responses based on type of business/industry. Conduct research to identify laws that pertain to the type of business that you are interested in starting. Using a spreadsheet software program, create a multi-column spreadsheet with the following headings: a. b. c. d.

Type of Law/Regulation (e.g., sales, intellectual property, tax, etc.) Title of Law/Regulation Impact of Law/Regulation (e.g., what the law/regulation is, how the law/regulation affects your business, etc.) What to Do (i.e., what you must do or not do as a result of the law/regulation)

Discuss your completed list with a student interested in a similar business, and modify the listing as needed. Insert the list into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 142-163]. Boston: Houghton Mifflin Company.

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Allen, K.A., & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 154-161). Woodland Hills, CA: McGraw-Hill Glencoe. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 248-251, 262-267]. Mason, OH: South-Western Cengage Learning. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 139-145). New York: McGraw-Hill. Bovée, C. L., & Thill, J. V. (2008). Business in action (4th ed.) [pp. 380-385]. Upper Saddle River, NJ: Pearson Prentice Hall. Dlabay, L.R., Burrow, J.L., & Kleindl, B. (2009). Intro to business (7th ed.) [pp. 8385]. Mason, OH: South-Western Cengage Learning. Farese, L.S., Kimbrell, G. & Woloszyk, C.A. (2009). Marketing essentials (pp. 84, 125-132, 678-679, 687, 719, 744). Woodland Hills, CA: Glencoe/McGraw-Hill. Ivancevich, J.M. & Duening, T.N. (2007). Business principles, guidelines, and practices (2nd ed.) [pp. 110-131]. Mason, OH: Thomson. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 570-605]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 8990, 178-203]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 37, 195-196, 320322]. Mason, OH: Thomson South-Western. McAdams, T., Neslund, N., & Neslund, K (2007). Law, business, and society (8th ed.) [pp. 210-212, 216-217, 607-610, 708-715]. Boston: McGraw-Hill/Irwin. Rue, L.W. & Byars, L.L. (2006). Business management: Real-world applications & connections (pp. 104-131). Woodland Hills, CA: McGRaw-Hill/Glencoe. Software/ Online

AllBusiness.com. (2011). Contracts & bids. Retrieved April 14, 2011, from http://www.allbusiness.com/legal/contracts-agreements/2976267-1.html AllBusiness.com. (2010). Intellectual property. Retrieved April 14, 2011, from http://www.allbusiness.com/legal/intellectual-property/2976268-1.html Cornell Law School. (2008). Sales law: An overview. April 14, 2011, from http://topics.law.cornell.edu/wex/sales Free Advice. (n.d.). Business bankruptcy information. Retrieved April 14, 2011, from http://bankruptcy-law.freeadvice.com/business_bankruptcy/ Internal Revenue Service. (2011, April 13). Tax information for businesses. Retrieved April 14, 2011, from http://www.irs.gov/businesses/index.html McNamara, C. (n.d.). Legal information for U.S. business organizations. Retrieved April 14, 2010, from http://www.managementhelp.org/legal/legal.htm The ‘Lectric Law Library. (1995-2011). Business law topic areas. Retrieved April 14, 2011, from http://www.lectlaw.com/tbul.html U.S. Small Business Administration. (2009). Business.gov. Retrieved April 14, 2011, from http://www.sba.gov/ World Bank. (2011). Doing business law library. Retrieved April 14, 2011, from http://www.doingbusiness.org/LawLibrary/?economyid=197

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Knowledge/ Skill Statement

Understands business’s responsibility to know, abide by, and enforce laws and regulations that affect business operations and transactions

Instructional Area

Business Law

Performance Element

Acquire knowledge of business ownership to establish and continue business operations.

Performance Indicator

Select form of business ownership (BL:006, BL LAP 2)

Level

Owner

SCANS

Resources 2-3; Information 5-7; Interpersonal 12; Systems 15; Basic Skills 1-2,5-6; Thinking Skills 8,12; Personal Qualities 13

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 3; Critical Thinking and Problem Solving 1-5; Communication and Collaboration 1; Information Literacy 1; Productivity and Accountability 2; Leadership and Responsibility 3-4

Objectives

a. b. c. d. e. f.

Performance Activity

Describe the advantages and disadvantages of sole proprietorships. Describe the advantages and disadvantages of partnerships. Discuss the advantages and disadvantages of corporations. Explain the advantages and disadvantages of hybrid forms of business ownership. Explain factors that affect the choice of ownership form. Demonstrate procedures for selecting a form of business ownership.

Participate in a small-group activity to identify the form of ownership used by five local businesses. Generate a list of reasons why the owners may have chosen those forms of ownership. Discuss the group’s rationale with the class. Using a word-processing software program, write a rationale for the form of ownership that you believe is most appropriate for the business you plan to start. Import a spreadsheet document that summarizes the advantages/disadvantages of your choice. Insert the completed document into your VIP portfolio.

Resources LAP

MBAResearch and Curriculum Center (2011). Taking Care of Business (Select Form of Business Ownership) [LAP: BL-002]. Columbus, OH: Author. MBAResearch and Curriculum Center (2011). Taking Care of Business (Select Form of Business Ownership): Instructor copy [LAP: BL-002]. Columbus, OH: Author.

Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 145, 155-158]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 143, 147). Woodland Hills, CA: Glencoe/McGraw-Hill. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 132-139). New York: McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 241-251, 257-258]. Mason, OH: South-Western Cengage Learning.

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Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 736-741]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (pp. 706711). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 92-97]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 580-586]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp.190199]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 171-176]. Mason, OH: Thomson South-Western. Software/ Online

AllBusiness (1999-2011). Advantages and disadvantages of general partnerships. Retrieved April 14, 2011, from http://www.allbusiness.com/business-planningstructures/business/2513-1.html AllBusiness (1999-2011). Advantages and disadvantages of limited partnerships. Retrieved April 14, 2011, from http://www.allbusiness.com/business-planningstructures/business-structures/2514-1.html AllBusiness (1999-2011). Advantages and disadvantages of c corporations. Retrieved April 14 2011, from http://www.allbusiness.com/businessplanning/business-structures-corporations/2515-1.html AllBusiness (1999-2011). Advantages and disadvantages of S corporations. Retrieved April 14, 2011, from http://www.allbusiness.com/businessplanning/business-structures-corporations/2516-1.html AllBusiness (1999-2011). Advantages and disadvantages of sole proprietorships. Retrieved April 14, 2011, from http://www.allbusiness.com/businessplanning/business-structures-sole-proprietorships/2512-1.html Inc.com. (2011). Know your options: Choosing a corporate form. Retrieved April 19, 2011 from http://www.inc.com/guides/start_biz/20676.html Larson, A. (2010, December). Choosing a form for your business. Retrieved April 19, 2011, from http://www.expertlaw.com/library/business/business_form.html MBAResearch and Curriculum Center (2011). Taking Care of Business (Select Form of Business Ownership) [LAP: BL-002: Presentation Software]. Columbus, OH: Author. Nizbiz.com. (2011). Business structure: Different forms of business ownership. Retrieved April 19, 2011, from http://www.nizbiz.com/business-structuredifferent-forms-of-business-ownership.html Nolo. (2011). Choosing the best ownership structure for your business. Retrieved April 19, 2011, from http://www.nolo.com/legal-encyclopedia/businessownership-structure-choose-best-29618.html Zoldak, A. (2010, July 7). How to select a form of business ownership. Retrieved April 10, 2011, from http://www.ehow.com/how_6708896_select-formbusiness-ownership.html

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Knowledge/ Skill Statement

Understands the concepts and processes needed to obtain, develop, maintain, and improve a product or service mix in response to market opportunities

Instructional Area

Product/Service Management

Performance Element

Position venture/product to acquire desired business image.

Performance Indicator

Choose venture/product name (PM:131)

Level

Owner

SCANS

Information 5-7; Systems 15; Basic Skills 1-2,5-6; Thinking Skills 7-9

21st Century Skills

Creativity and Innovation 1; Critical Thinking and Problem Solving 2-3; Communication and Collaboration 1; Information Literacy 1

Objectives

a. b. c. d. e.

Performance Activity

Explain the significance of a business’s/product’s name. Identify methods for selecting business/product names. Describe characteristics frequently associated with successful business/ product names. Explain legal considerations in business/product-name selection. Demonstrate procedures for choosing a business/product name.

Generate a listing of possible business/product names. Share the listing with a small-group of classmates to obtain their feedback on the names. Choose the name for your business/product, and write a rationale for your choice. Insert the listing, choice, and rationale into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [p. 291]. Boston: Houghton Mifflin Company. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 384-386). Mason, OH: South-Western Cengage Learning. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [p. 263]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (p. 710). Woodland Hills, CA: Glencoe/McGraw-Hill. Gartner, W.B., & Bellamy, M.G. (2009). Creating the enterprise (pp. 144-146). Mason, OH: Thomson South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [p. 579]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [p. 358]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 314-315]. Mason, OH: Thomson South-Western.

Software/ Online

Brand Identity Guru. (n.d.). Brand name development. Retrieved April 20, 2011, from http://www.brandidentityguru.com/brand-name.htm

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Entrepreneur.com. (2011). How to name your business. Retrieved April 20, 2011, from http://www.entrepreneur.com/startingabusiness/startupbasics/namingyourbusin ess/article21774.html Moderandi Inc. (2006-2010). Naming. Retrieved April 20, 2011, from http://www.marketingmo.com/2-create-tools-and-processes/how-to-name-abusiness-product-or-service/ Rocket Watcher. (2010, April 30). How to name your startup. Retrieved April 20, 2011, from http://www.rocketwatcher.com/blog/2010/04/how-to-name-yourstartup.html SBA.gov. (n.d.). How to name a business. Retrieved April 20, 2011, from http://www.sba.gov/content/how-name-business Trimble, S. (2008, January 8). 18 strategies and tools for naming your business or product. Retrieved April 20, 2011, from http://www.marketingprofs.com/articles/2008/2564/18-strategies-and-tools-fornaming-your-business-or-product Volkside. (2011, January 26). How to name your product, service, or startup. Retrieved April 20, 2011, from http://www.volkside.com/2010/06/how-to-nameyour-product-service-or-startup/ WriteExpress. (1996-2011). Naming online. Retrieved April 20, 2011, from http://www.rhymer.com/naming.html

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Knowledge/ Skill Statement

Understands tools, techniques, and systems that affect a business’s ability to plan, control, and organize an organization/department

Instructional Area

Strategic Management

Performance Element

Utilize planning tools to guide organization’s/department’s activities.

Performance Indicator

Develop company goals/objectives (SM:008)

Level

Owner

SCANS

Resources 1-4; Information 5-7; Interpersonal 13; Systems 15; Basic Skills 1-6; Thinking Skills 8-9,12; Personal Qualities 13,17

21st Century Skills

Manage Goals and Time 1; Collaborate with Others 1, 2 & 3; Communicate Clearly 1

Objectives

a. b. c. d.

Performance Activity

Write goals/objectives for your business. Discuss them with a small group of your classmates, examining how realistic the goals/objectives are, how challenging they are, and how well written they are. Revise your goals/objectives based on your classmates’ feedback. Insert your business goals/objectives in your VIP portfolio.

Explain the importance of company goals/objectives. Describe ways in which company goals/objectives are used. Describe the characteristics of effective objectives. Demonstrate how to develop company goals/objectives.

Resources Textbooks

Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 206-208]. Mason, OH: South-Western Cengage Learning. Boone, G. Kurtz, D.L. (2009). Contemporary marketing: 2009 edition (pp. 41-42). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 296, 580-581]. Mason, OH: Thomson South-Western. Daft, R.L., & Marcic, D. (2009). Understanding management: Instructor’s edition (6th ed.) [pp. 154-164]. Mason, OH: South-Western Cengage Learning. Dlabay, L.R., Burrow, J.L., & Kleindl, B. (2009). Intro to business (7th ed.) [p. 116]. Mason, OH: South-Western Cengage Learning. DuBrin, A. (2009). Essentials of management: Instructor’s edition (8th ed.) [pp. 556557]. Mason, OH: South-Western Cengage Learning. Farese, L. S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (pp. 35, 242). Woodland Hills, CA: McGraw-Hill Glencoe. Greene, C.L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 15-17, 111]. Mason, OH: Thomson South-Western. Gibson, J. L., Ivancevich, J. M., Donnelly, J.H., & Konopaske, R. (2003). Organizations: Behavior, structure, processes (11th ed.) [pp. 19-20, 254, 256]. New York: McGraw-Hill/Irwin. Griffin, R.W., & Moorhead, G. (2010). Organizational behavior: Managing people and organizations (9th ed.) [pp. 144-145]. Mason, OH: South-Western Cengage Learning. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Ivancevich, J.M., Konopaske, R., & Matteson, M.T. (2008). Organizational behavior and management (8th ed.) [pp.126-128]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 54, 348, 358, 430]. Mason, OH: Thomson South-Western. Jones, G.R., & George, J.M. (2006). Contemporary management (4th ed.) [pp. 386387]. New York: McGraw-Hill/Irwin. Rue, L.W., & Byars, L.L. (2005). Management: Skills and application (11th ed.) [pp. 132-136]. New York: McGraw-Hill/Irwin. Software/ Online

Asbury, J. (2009, July 13). Evaluating your program - Begin at the beginning with your mission statement, Goals and objectives. Retrieved April 7, 2011, from http://ezinearticles.com/?Evaluating-Your-Program---Begin-at-the-BeginningWith-Your-Mission-Statement,-Goals-and-Objectives&id=2602615 Barker, L. (1999-2011). How to develop business goals and objectives. Retrieved April 7, 2011, from http://www.ehow.com/how_4793182_develop-businessgoals-objectives.html Business Owner’s Toolkit. (1995-2011). How to quantify your goals. Retrieved April 7, 2011, from http://www.toolkit.cch.com/text/p01_0380.asp Jamison, E. (2009, April 24). Goals and objectives - Business goal setting made easy. Retrieved April 7, 2011, from http://ezinearticles.com/?Goals-andObjectives---Business-Goal-Setting-Made-Easy&id=2266186 Marshall, M.I. (2004, September). Defining your business through goals and objectives: First steps for new entrepreneurs. Retrieved April 7, 2011, from http://www.ces.purdue.edu/extmedia/EC/EC-727.pdf Otlacan, O. (2005, March 30). Rules to setting business goals and objectives: Why and how to be SMART. Retrieved April 7, 2011, from http://ezinearticles.com/?Rules-to-Setting-Business-Goals-and-Objectives:Why-and-How-to-be-SMART&id=24276 Purdue University. (n.d.). How do goals and objectives implement my strategy. Retrieved April 7, 2011, from http://www.agecon.purdue.edu/extension/sbpcp/resources/goalsobjectives.ppt SCORE of Delaware. (n.d.). Base your organization on business goals and objectives. Retrieved April 7, 2011, from http://www.scoredelaware.org/index.cfm?fuseaction=trees.pageDetails&p=31716-436

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Knowledge/ Skill Statement

Understands tools, techniques, and systems that affect a business’s ability to plan, control, and organize an organization/department

Instructional Area

Strategic Management

Performance Element

Utilize planning tools to guide organization’s/department’s activities.

Performance Indicator

Define business mission (SM:009)

Level

Owner

SCANS

Information 5; Basic Skills 1-2; Decision Making 8

21st Century Skills

Communicate Clearly 1, 3; Work Creatively with Others 1, 2

Objectives

a. b. c.

Performance Activity

Access the web sites of three businesses that sell/provide products similar to those that your business will provide. Evaluate the mission statements, determining whether they are well crafted and allow for growth of the business. Discuss your observations with a small group of your peers.

Explain reasons for creating a mission statement. Identify characteristics of successful mission statements. Demonstrate procedures for defining a business’s mission.

Write a mission statement for your business. Share it with a classmate, and revise and/or edit as needed. Insert the completed mission statement in your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 27-28]. Boston: Houghton Mifflin Company. Boone, G. & Kurtz, D.L. (2009). Contemporary marketing: 2009 edition (pp. 41-42). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [p. 244]. Mason, OH: Thomson SouthWestern. Daft, R.L., & Marcic, D. (2009). Understanding management: Instructor’s edition (6th ed.) [pp. 66, 158]. Mason, OH: South-Western Cengage Learning. Dlabay, L.R., Burrow, J.L., & Kleindl, B. (2009). Intro to business (7th ed.) [p. 115]. Mason, OH: South-Western Cengage Learning. DuBrin, A. (2009). Essentials of management: Instructor’s edition (8th ed.) [pp. 120, 580]. Mason, OH: South-Western Cengage Learning Farese, L. S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (p. 242). Woodland Hills, CA: McGraw-Hill Glencoe. Grewal, D. & Levy, M. (2009). Marketing (pp. 25-26). New York: McGraw-Hill Irwin. Hill, C.W.L. & Jones, G.R. (2008). Essentials of strategic management: Instructor’s copy (pp. 8, 28-31). Boston: Houghton Mifflin Company. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 216-217]. New York: McGraw-Hill Irwin.

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Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [p. 128]. Mason, OH: Thomson South-Western. Mariotti, S. (2006). How to start & operate a small business (10th ed.) [pp. 230-231, 236, 597]. New York: The National Foundation for Teaching Entrepreneurship. Software/ Online

Baber, L. (2009, August 26). The purpose of a mission statement and why your business needs one. April 13, 2011, from http://ezinearticles.com/?ThePurpose-of-a-Mission-Statement-and-Why-Your-Business-NeedsOne&id=2825898 Birnbaum, B. (2000-2009). Developing your mission statement. Retrieved April 7, 2011, from http://www.birnbaumassociates.com/developing-mission.htm Evans, M. B. (2009, September 2). Your small business' vision and mission statement. Retrieved April 7, 2009, from http://ezinearticles.com/?Your-SmallBusiness-Vision-and-Mission-Statement&id=2862726 Howard, J. (2009, June 30). You and your business - Do you have a mission statement? Retrieved April 7, 2011, from http://ezinearticles.com/?You-andYour-Business---Do-You-Have-a-Mission-Statement?&id=2548085 Lister, L. (2009, February 15). What an entrepreneur can learn from the Rolls Royce mission statement. Retrieved April 7, 2011, from http://ezinearticles.com/?What-an-Entrepreneur-Can-Learn-From-the-RollsRoyce-Mission-Statement&id=1996766 Man on a mission: A blog dedicated to mission statements. (2007, June 18). Retrieved April 7, 2011, from http://manonamission.blogspot.com/ Mason, B. (2009, March 12). Strategic planning - The vision statement vs. the mission statement. Retrieved April 7, 2011, from http://ezinearticles.com/?Strategic-Planning---The-Vision-Statement-Vs-TheMission-Statement&id=2095351 Mitchell, B. (2009, August 2). How to write a high impact mission statement for your business - Tips to consider. Retrieved April 7, 2011, from http://ezinearticles.com/?How-to-Write-a-High-Impact-Mission-Statement-ForYour-Business---Tips-to-Consider&id=2698647 Powers, E. (2009, September 29). Writing a business plan mission statement you can live with. Retrieved April 7, 2011, from http://ezinearticles.com/?Writing-aBusiness-Plan-Mission-Statement-You-Can-Live-With&id=2963972 Smart, N. (2009, September 18). Why have a mission statement? Retrieved April 13, 2011, from http://ezinearticles.com/?Why-Have-a-MissionStatement?&id=2948632

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Knowledge/ Skill Statement

Understands the concepts and processes needed to obtain, develop, maintain, and improve a product or service mix in response to market opportunities

Instructional Area

Product/Service Management

Performance Element

Acquire a foundational knowledge of product/service management to understand its nature and scope.

Performance Indicator

Explain the nature and scope of the product/service management function (PM:001, PM LAP 17)

Level

Specialist

SCANS

Resources 3; Information 5-8; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 12

21st Century Skills

Critical Thinking and Problem Solving Skills 1, 3; Communication 1

Objectives

a. b. c. d. e. f.

Performance Activity

Identify a product that is similar to the good or service that you plan to offer/provide. Conduct research on the product, and write a short report that answers the following questions: a. b. c. d. e.

f.

Define the term product/service management. Explain who is responsible for managing products/services. Describe the benefits of product/service managing. Describe the phases of product/service managing. Describe factors affecting product/service managing. Explain the role product/service management plays in marketing.

What is the product that you chose to research? Is the product a good or a service? If the product is a service, is it a product-related service or a pure service? What factors affect product/service management for this particular product? What information can you learn about how this product was developed? Where did the company obtain it? How long did development take? How much did it cost? How long has it been on the market? How is this product performing currently? If you were its product/service manager, what changes, if any, would you make?

When you have finished, share your findings with your instructor, and insert your report into your VIP portfolio.

Resources LAP

MBAResearch and Curriculum Center. (2009). Rapping Up Products (Nature of Product/service Management) [LAP: PM-017]. Columbus, OH: Author. MBAResearch and Curriculum Center. (2009). Rapping Up Products (Nature of Product/service Management): Instructor copy [LAP: PM-017]. Columbus, OH: Author.

Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 289-292]. Boston: Houghton Mifflin Company.

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Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 207-209, 218-220). Woodland Hills, CA: McGrawHill/Glencoe. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [p. 363]. Mason, OH: South-Western Cengage Learning. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (p. 348). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 6-7, 94-97, 473, 498, 625]. Mason, OH: Thomson/South-Western. Clark, B., Sobel, J., & Basteri C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed,) [pp. 250-259, 277-285]. Tinley Park, IL: Goodheart-Willcox. Farese, L.S.; Kimbrell, G.; & Woloszyk, C.A. (2009). Marketing essentials (pp. 6, 634-647). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 214-215]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 274-278]. New York: McGraw-Hill Irwin. Workbooks/ Manuals

Burrow, J.L. (2003). Marketing: Business 2000 (pp. 5, 62-63). Mason, OH: SouthWestern/Thomson Learning.

Software/ Online

Haines, S. (2004, July 28). Product management and project management: Two functions, two vital roles. Retrieved April 7, 2011,from http://www.aipmm.com/html/newsletter/archives/000034.php KnowThis.com. (1998-2011). Managing products. Retrieved April 7, 2011, from http://www.knowthis.com/tutorials/principles-of-marketing/managingproducts.htm Lancaster, G. (n.d.). Products and services. Retrieved April 7, 2011, from http://www.dagroup.co.uk/index.php?option=com_content&view=article&id=26: product&catid=2:marketing-lectures MBAResearch and Curriculum Center. (2009). Rapping Up Products (Nature of Product/service Management) [LAP: PM-017: Presentation Software]. Columbus, OH: Author. McNamara, C. (n.d.). Product and service development. Retrieved April 7, 2011 from http://www.managementhelp.org/prod_mng/prod_mng.htm Sequent Learning Networks. (2010). Product management resources: Essays and papers. Retrieved April 7, 2011, from http://www.sequentlearning.com/articles.php Sequent Learning Networks. (2008). Product management templates and guides. Retrieved April 7, 2011, from http://www.sequentlearning.com/templates.php

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Knowledge/ Skill Statement

Understands the concepts and processes needed to obtain, develop, maintain, and improve a product or service mix in response to market opportunities

Instructional Area

Product/Service Management

Performance Element

Employ product-mix strategies to meet customer expectations.

Performance Indicator

Explain the concept of product mix (PM:003, PM LAP 3)

Level

Specialist

SCANS

Information 5-8; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 12

21st Century Skills

Critical Thinking and Problem Solving Skills 1, 3; Communication and Collaboration 1

Objectives

a.

b. c. d. e. f. g. h. i. j. k. l. m. n. o. p. q. r. s. t.

Performance Activity

Define the following terms: product mix, product item, product line, width, depth, consistency, expansion, contraction, alteration, trading up, trading down, and positioning. Identify ways in which product lines can be organized. Describe product mix dimensions. Identify reasons that a business would offer a narrow product mix. Identify reasons that a business would offer a broad product mix. Identify reasons that a business would offer a deep product mix. Identify reasons that a business would offer a shallow product mix. Explain the importance of a business’s product mix. Describe advantages of expansion product-mix strategies. Describe disadvantages of expansion product-mix strategies. Describe advantages of contraction product-mix strategies. Describe disadvantages of contraction product-mix strategies. Describe advantages of alteration product-mix strategies. Describe disadvantages of alteration product-mix strategies. Describe advantages of trading up product-mix strategies. Describe disadvantages of trading up product-mix strategies. Describe advantages of trading down product-mix strategies. Describe disadvantages of trading down product-mix strategies. Describe advantages of positioning product-mix strategies. Describe disadvantages of positioning product-mix strategies.

Access a company’s web site to identify its product lines; for each product line, identify product items. (If possible, select a company that offers products similar to those that you intend to offer.) Print the information obtained, and write a one-page report about the company’s product mix and its advantages and disadvantages for the company. Submit your report to your instructor for review. If you were able to evaluate a company offering products similar to your own, insert your report into your VIP portfolio.

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Section 5

Planning Guide Sheets

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Resources LAP

Marketing Education Resource Center. (2009). Mix & Match (Nature of the Product Mix) [LAP: PM-003]. Columbus, OH: Author. Marketing Education Resource Center. (2009). Mix & Match (Nature of the Product Mix): Instructor copy [LAP: PM-003]. Columbus, OH: Author.

Textbooks

Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (p. 209). Woodland Hills, CA: Glencoe/McGraw-Hill. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 302-303, 360363). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 265-271]. Mason, OH: Thomson/SouthWestern. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 302-303, 308-310]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Etzel, M.J.; Walker, B.J.; & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 234-241]. New York: McGraw-Hill/Irwin. Farese, L.S.; Kimbrell, G.; & Woloszyk, C.A. (2009). Marketing essentials (pp. 635-641). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 214-215]. Mason, OH: Thomson/South-Western. Grewal, D. & Levy, M. (2008). Marketing (pp. 271-274). New York: McGrawHill/Irwin. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 275-278]. New York: McGraw-Hill Irwin. Soloman, M. R., Marshall, G. W., & Stuart, E. W. (2008). Marketing: Real people, real choices (5th ed.) [pp. 273-278]. Upper Saddle River, NJ: Pearson Prentice Hall. Lamb, C.W., Jr.; Hair, J.F., Jr.; & McDaniel C. (2003). Essentials of marketing (3rd ed.) [pp. 269-272]. Mason, OH: South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 318-320]. Mason, OH: Thomson South-Western. Perreault, W. D., Cannon, J. P., & McCarthy, E. J. (2008). Basic marketing: A marketing strategy planning approach (16th ed.) [pp. 240-241]. Boston: McGraw-Hill/Irwin.

Software/ Online

Docstoc. (2011). Product mix & product line. Retrieved April 20, 2011, from http://www.docstoc.com/docs/65250968/PRODUCT-MIX-and-PRODUCT-LINE eNotes.com. (2011). Product mix. Retrieved April 20, 2011, from http://www.enotes.com/business-finance-encyclopedia/product-mix Galler, L. (2011). Analyze the product mix just like a bowl of nuts. Retrieved May 2, 2011, from http://ezinearticles.com/?Analyze-the-Product-Mix-Just-Like-aBowl-of-Nuts&id=197887 Gomez, H. (2010, September 24). Top 10 learning questions for setting product strategy—chapter 12. Retrieved April 20, 2011, from http://www.slideshare.net/HenryGomez1/chapter-12-product-strategy-5282955 How Stuff Works. (1999-2011). Positioning. Retrieved May 2, 2011, from http://money.howstuffworks.com/marketing-plan21.htm Idea Todays. (2011, March 21). The product line. Retrieved April 20, 2011, from http://www.ideatodays.com/business/the-product-line.html Marketing Education Resource Center. (2009). Mix & Match (Nature of the Product Mix). [LAP: PM-003: Presentation Software]. Columbus, OH: Author.

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Planning Guide Sheets

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QuickMBA. (1999-2010). Product positioning. Retrieved May 2, 2011, from http://www.quickmba.com/marketing/ries-trout/positioning/ Slideshare.net. (n.d.). Product mix strategies. Retrieved April 20, 2011, from http://www.slideshare.net/hardeep07aug/product-mix-strategies StartupBizHub.com (2011). Product diversification strategy. Retrieved April 20, 2011, from http://www.startupbizhub.com/product-diversification-strategy.htm Suttle, R. (n.d.). What is the meaning of product mix? Retrieved April 20, 2011, from http://smallbusiness.chron.com/meaning-product-mix-3390.html Tutor2u. (n.d.). Marketing presentation: Product mix. Retrieved May 2, 2011, from http://www.tutor2u.net/business/presentations/marketing/productmix/default.ht ml Washington University in St. Louis. (2010). Right mix in product line increases profits for the firm. Retrieved May 2, 2011, from http://newsinfo.wustl.edu/tips/page/normal/176.html

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-112

Knowledge/ Skill Statement

Understands the concepts and processes needed to obtain, develop, maintain, and improve a product or service mix in response to market opportunities

Instructional Area

Product/Service Management

Performance Element

Employ product-mix strategies to meet customer expectations.

Performance Indicator

Plan product mix (PM:006)

Level

Manager

SCANS

Resources 3; Information 5-8; Systems 15; Basic Skills 1-3,5-6; Thinking Skills 7-8,12

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 3; Creativity and Innovation 1-2, 4; Critical Thinking and Problem Solving 1-5; Communication and Collaboration 1; Information Literacy 1; ICT Literacy 1

Objectives

a. b. c. d.

Performance Activity

Analyze the product/service mix of the business in which you work. Identify products that should be added/deleted. Discuss your recommendations with your employer. Report the outcome of your discussions to the class.

Describe considerations in selecting product-mix strategies. Identify factors that can minimize costs in developing a product mix. Explain guidelines for planning a product mix. Demonstrate procedures for planning a product mix.

Identify product(s) and product line(s) that your new business will offer to customers. Then, write a brief report explaining these products and product lines. In the report, also explain factors that impacted your decisions regarding your product mix. Discuss your product mix with a business partner or your instructor. Based on their feedback, modify your product mix plans as necessary. Insert your report into your VIP portfolio.

Resources Textbooks

Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 207- 209, 218-220). Woodland Hills, CA: Glencoe/McGrawHill. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 302-303360363). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 265-271]. Mason, OH: Thomson/SouthWestern. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 302-310]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Etzel, M.J.; Walker, B.J.; & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 234-241]. New York: McGraw-Hill/Irwin. Farese, L.S.; Kimbrell, G.; & Woloszyk, C.A. (2009). Marketing essentials (pp. 635-641). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 214-215]. Mason, OH: Thomson/South-Western. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

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Grewal, D. & Levy, M. (2008). Marketing (pp. 271-274). New York: McGrawHill/Irwin. Hisrich, R.D., Peters, M.P., & Shepherd, D.A. (2010). Entrepreneurship (8th ed.) [pp. 382-383]. New York: McGraw-Hill/Irwin. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 275-278]. New York: McGraw-Hill Irwin. Kuratko, D.G., & Hodgetts, R.M. (2007). Entrepreneurship: Theory, process, practice (7th ed.) [pp.389-391]. Mason, OH: Thomson South-Western. Soloman, M. R., Marshall, G. W., & Stuart, E. W. (2008). Marketing: Real people, real choices (5th ed.) [pp. 273-278]. Upper Saddle River, NJ: Pearson Prentice Hall. Lamb, C.W., Jr.; Hair, J.F., Jr.; & McDaniel C. (2003). Essentials of marketing (3rd ed.) [pp. 269-272]. Mason, OH: South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 318-320]. Mason, OH: Thomson South-Western. Perreault, W. D., Cannon, J. P., & McCarthy, E. J. (2008). Basic marketing: A marketing strategy planning approach (16th ed.) [pp. 240-241]. Boston: McGraw-Hill/Irwin. Software/Online

Acevedo, L. (1999-2011). Product mix strategies. Retrieved April 7, 2011, from http://www.ehow.com/way_5241927_product-mix-strategy.html Galler, L. (2006, May 14). Analyze the product mix just like a bowl of nuts. Retrieved April 7, 2011, from http://ezinearticles.com/?Analyze-the-ProductMix-Just-Like-a-Bowl-of-Nuts&id=197887 Ries, A., & Trout, J. (n.d.).Positioning. Retrieved April 21, 2011, from http://www.quickmba.com/marketing/ries-trout/positioning/ Suttle, R. (n.d.). What is the meaning of product mix? Retrieved April 7, 2011, from http://smallbusiness.chron.com/meaning-product-mix-3390.html Tutor2u. (n.d.). Marketing presentation: Product mix. Retrieved April 7, 2011, from http://www.tutor2u.net/business/presentations/marketing/productmix/default.ht ml Washington University in St. Louis. (2003, May 7). Right mix in product line increases profits for the firm. Retrieved April 7, 2011, from http://news.wustl.edu/news/Pages/176.aspx

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

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Knowledge/ Skill Statement

Understands the concepts and processes needed to obtain, develop, maintain, and improve a product or service mix in response to market opportunities

Instructional Area

Product/Service Management

Performance Element

Position venture/product to acquire desired business image.

Performance Indicator

Describe factors used by marketers to position ventures/products (PM:042)

Level

Specialist

SCANS

Information 5-8; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 7-8, 12

21st Century Skills

Critical Thinking and Problem Solving Skills 1, 3; Communication and Collaboration 1

Objectives

a. b. c. d. e. f.

Performance Activity

Define the following terms: competitive advantage and positioning. Describe the purpose of positioning. Explain the relationship between the target market and positioning. Discuss the relationship between the competition and positioning. Describe types of positioning strategies (e.g., product attributes, benefits, usage occasions, users, competitive, product classes) Discuss how marketing mix elements can be differentiated to position products/businesses.

Note to the Instructor: Review and present the Positioning Products/Services briefing (pp. 5-116 and 5-118) to students in a lecture or discussion format. Select two automobile manufacturers: one offers luxury cars, the other for economy cars. Identify factors that the two companies use to position the cars. Participate in a small-group activity to discuss your responses.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 289-290]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 126, 209). Woodland Hills, CA: McGraw-Hill/Glencoe. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 314-315, 317, 341-342, 363, 365, 369]. Mason, OH: South-Western Cengage Learning Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (p. 232). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 171-174]. Mason, OH: Thomson/SouthWestern. Clark, B.; Sobel, J.; & Basteria, C.G. (2010). Marketing dynamics:Teacher’s edition (2nd ed.) [pp. 268-270]. Tinley Park, IL: Goodheart-Willcox. Etzel, M.J.; Walker, B.J.; & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 157-159, 235-236]. New York: McGraw-Hill/Irwin Farese, L.S.; Kimbrell, G.; & Woloszyk, C.A. (2009). Marketing essentials (pp. 645646). Woodland Hills, CA: Glencoe/McGraw-Hill. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

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Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 214-215]. Mason, OH: Thomson/South-Western. Hisrich, R.D., Peters, M.P., & Shepherd, D.A. (2010). Entrepreneurship (8th ed.) [pp. 67-68, 73]. New York: McGraw-Hill/Irwin. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 202, 274276, 382]. New York: McGraw-Hill Irwin. Kazanjian, K. (2007). Exceeding customer expectations (pp. 27-56). New York: Doubleday. Kuratko, D.G., & Hodgetts, R.M. (2007). Entrepreneurship: Theory, process, practice (7th ed.) [pp. 21-22, 245, 385-386, 389-391]. Mason, OH: Thomson South-Western. Lamb, C.W., Jr.; Hair, J.F., Jr.; & McDaniel C. (2003). Essentials of marketing (3rd ed.) [pp. 201-205]. Mason, OH: South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 130,145, 318-322]. Mason, OH: Thomson South-Western. McKain, S. (2005). What customers really want: How to bridge the gap between what your organizations and what your clients crave. Nashville: Thomas Nelson. Perreault, W.D., Jr.; Cannon, J.P.; & McCarthy, E.J. (2008). Basic marketing: Marketing strategy planning approach (16th ed.) [pp. 48, 54, 81-84]. New York: McGraw-Hill/Irwin. Software/ Online

Jantsch, J. (1999-2010).These simple strategies for positioning your small business are a must. Retrieved April 13, 2011, from http://www.ducttapemarketing.com/strategies_for_positioning.htm KnowThis.com. (1998-2011). Product positioning. Retrieved April 13, 2011 from http://www.knowthis.com/principles-of-marketing-tutorials/targetingmarkets/product-positioning/ Levis, D. (2005). Product positioning—4 differentiation tips. Retrieved April 13, 2011, from http://www.davetalks.com/articles/syndicated/product-positioningdifferentiation-tips.htm Markgraf, B. (n.d.). Lesson 2: Positioning your product or service. Retrieved April 13, 2011, from http://www.suite101.com/lesson.cfm/16709/294 MindTools. (1995-2011).The marketing mix and 4 Ps: Understanding how to position your market offering. Retrieved April 13, 2011, from http://www.mindtools.com/pages/article/newSTR_94.htm Ortyn, A. (2005). Market position, positioning, and profitability! Retrieved April 15, 2011, from http://www.rusmart.com/MANTECbgs/source/Market_Position_Article_Oct_2006.pdf Pellow, B. (2006, June). Differentiate yourself. Retrieved April 15, 2011, from http://digitaloutput.net/content/ContentCT.asp?P=792 QuickMBA (1999-2010). Positioning. Retrieved April 15, 2011, from http://www.quickmba.com/marketing/ries-trout/positioning/ Tutor2u. (n.d.). Strategy—Competitive advantage. Retrieved April 15, 2011, from http://www.tutor2u.net/business/strategy/competitive_advantage.htm

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Key Points

Briefing: Positioning Products/Services

Page 5-116

Define competitive advantage. A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices. Define positioning. Positioning is how your target market defines you in relation to your competitors. Describe the purpose of positioning. The purpose of positioning is to make your product or service stand out in a crowd. Positioning is important because you are competing with all the noise out there competing for your potential customers’ attention. If you can stand out with a unique benefit, you have a chance at getting their attention. Explain that positioning is about how products are perceived in the minds of consumers. Discuss that how a company sees itself and sees its products are not always the way that customers and potential customers view the products. Discuss the relationship between the target market and positioning. When positioning your product/service, it is important to focus on how your target market perceives you. After all, the target market makes up those consumers that are most likely to purchase your product/service. Key tip: you can never make everyone happy, but you must make your target market happy in order to survive. Discuss the relationship between the competition and positioning. 1. 2. 3. 4.

Is our product the first in its market? If not, how are our competitors positioned? Do we have enough money to position our product/service similarly to the market leader and thus take over as the market leader? If not, we must find an unoccupied position in the market that the target market cares about. Example: Target was certainly not the first mass merchandiser, but it was the first to successfully position itself as the “trendy, hip mass merchandiser” in the eyes of its target market.

Describe types of positioning strategies. There are seven positioning strategies that can be pursued: Product Attributes: What are the specific product attributes? Benefits: What are the benefits to the customers? Usage Occasions: When/how can the product be used? Users: Identify a class of users. Against a Competitor: Positioned directly against a competitor. Away from a Competitor: Positioned away from competitor. Product Classes: Compared to different classes of products.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Briefing: Positioning Products/Services

Page 5-117

Discuss how marketing mix elements can be differentiated to position products/businesses. Each of the 4 P’s should be examined as potential tactics for differentiating your product/service and reinforcing its positioning in the minds of the target market. For example, Krispy Kreme doughnuts were originally available to consumers only at Krispy Kreme bakeries. In the early 2000’s, the company decided to alter its distribution (Place) strategy to include supermarkets and gas stations. While that decision radically increased sales potential by making the product available to more consumers, it also changed how the target market perceived the Krispy Kreme brand. (Think about it: do you view a sandwich that you buy at a gas station differently from a sandwich that you purchase at a casual dining restaurant?) The questions below can be used to thoughtfully decide how each element of the 4 P’s is affected by (and can affect) a product/service’s positioning. Product/Service  What does the customer want from the product/service? What needs does it satisfy?  How and where will the customer use it?  How is it differentiated versus your competitors’ products/services? Place     

Price     

Where do buyers look for your product or service? If they look in a store, what kind? A specialist boutique or in a supermarket, or both? Or online? Or direct, via a catalogue? How can you access the right distribution channels? Do you need to use a sales force? Or attend trade fairs? Or make online submissions? Or send samples to catalogue companies? What do your competitors do, and how can you learn from that and/or differentiate what you do from them?

What is the value of the product or service to the buyer? Are there established price points for products or services in this area? Is the customer price sensitive? Will a small decrease in price gain you extra market share? Or will a small increase be indiscernible, and so gain you extra profit margin? What discounts should be offered to trade customers, or to other specific segments of your market? How will your price compare with your competitors?

Promotion  Where and when can you get across your marketing messages to your target market?  Will you reach your audience by advertising in the press, or on TV, or radio, or on billboards? By using direct mail? Through PR? On the Internet?  When is the best time to promote? Is there seasonality in the market? Are there any wider environmental issues that suggest or dictate the timing of your market launch, or the timing of subsequent promotions?  How do your competitors do their promotions? And how does that influence your choice of promotional activity? Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Briefing: Positioning Products/Services

Page 5-118

Positioning activity. Ever wonder about the laundry detergent product category? Why do several companies produce the majority of laundry brands? For example, Procter & Gamble markets Tide, Gain, Era, Cheer, Ivory, and Bold. . . among others. How does P&G differentiate these brands? How many different messages can you develop about laundry detergent? Using the Web and a little research at a retail outlet that sells laundry detergent, conduct an analysis of the P&G brands of laundry detergent. What are the distinguishing features of each brand -- and are they clearly communicated to the consumer? What are the target markets for each brand? Are the positions different enough to avoid cannibalization?

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-119

Knowledge/ Skill Statement

Understands the concepts and processes needed to obtain, develop, maintain, and improve a product or service mix in response to market opportunities

Instructional Area

Product/Service Management

Performance Element

Employ product-mix strategies to meet customer expectations.

Performance Indicator

Determine services to provide customers (PM:036)

Level

Manager

SCANS

Resources 2; Information 5-8; Systems 15; Basic Skills 1-3, 5-6; Thinking Skills 8,12

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 3; Critical Thinking and Problem Solving 1-5; Communication and Collaboration 1; Information Literacy 1; ICT Literacy 1; Productivity and Accountability 1; Leadership and Responsibility 4

Objectives

a. b. c. d. e.

Performance Activity

Participate in a small-group activity to determine services to provide the customers of a school-based enterprise. Prepare a rationale for the group’s choices, and present the recommendations to the class. Compare the groups’ recommendations, and select the best ones to implement.

Identify services that are provided for customers. Discuss reasons for providing services for customers. Determine the costs associated with providing services for customers. Describe steps for determining specific services to provide customers. Demonstrate procedures for determining services to provide customers.

Using an idea-generation technique of your choice, develop a list of possible services to provide to your customers. Then, survey at least five to ten individuals who fit your target market description to learn which services they would most like to receive from a business such as yours. Determine the approximate cost of providing each service that the members of your target market desire. Then, after reviewing the input from your potential customers, the cost of each service, and the feasibility of offering each service, select the services that your business will provide to its customers. Create a chart that specifies each service, its cost, reasons to offer the service, and methods to provide the service to your customers. Discuss your decisions with a business partner, your instructor, or a SCORE representative. Given their feedback, make modifications as necessary. Insert the chart into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [p. 289]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp.182, 193-194, 220, 364, 367-368, 385). Woodland Hills, CA: Glencoe/McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 363-365, 369]. Mason, OH: South-Western Cengage Learning.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

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Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 348-357). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 226, 290-291, 294, 300-301]. Mason, OH: Thomson/South-Western. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 22, 252-254, 620-624]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (pp. 5, 113-114). Woodland Hills, CA: Glencoe/McGraw-Hill. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 274-276, 286-287, 357-358]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 262, 264-265, 294]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 130, 145, 318-319, 445]. Mason, OH: Thomson South-Western. Software/ Online

Business Owner’s Toolkit (2011). Do customers value your uniqueness? Retrieved April 15, 2011, from http://www.toolkit.cch.com/text/p03_1020.asp Factoidz.com. (2008-2011). Types of services. Retrieved April 15, 2011, from http://factoidz.com/types-of-services/ Jones, S.C. (2007, January 27). The real purpose of CRM. Retrieved April 15 2011, from http://www.ducttapemarketing.com/article/articles/237/1/The-RealPurpose-of-CRM/Page1.html Juniper Neworks. (1998-2005). Types of services. April 15, 2011, from http://wwwjnet.juniper.net/techpubs/software/management/sdx/sdx42x/sdx-productoverview/html/services-sessions3.html Stirtz, K. (n.d.). Connect to your customers on their terms. Retrieved April 15, 2011, from http://www.businessknowhow.com/marketing/connect.htm Tutorial-Reports.com. (2005-2007). Types of customer services. Retrieved April 15, 2011, from http://www.tutorial-reports.com/business/outsourcing/cso/types.php Ward, S. (n.d.). 4 ways to provide customer service that outshines your competitors. Retrieved April 15, 2011, from http://sbinfocanada.about.com/cs/marketing/a/shinycustserv.htm

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-121

Knowledge/ Skill Statement

Understands the concepts and processes needed to obtain, develop, maintain, and improve a product or service mix in response to market opportunities

Instructional Area

Product/Service Management

Performance Element

Position venture/product to acquire desired business image.

Performance Indicator

Identify company’s unique selling proposition (PM:272)

Level

Manager

SCANS

Information 5, 7; Systems 15; Basic Skills 1-2,5-6; Thinking Skills 7-8

21st Century Skills

Creativity and Innovation 2; Critical Thinking and Problem Solving 1-5; Communication and Collaboration 1; Information Literacy 1

Objectives

a. b. c. d. e.

Performance Activity

Identify two local businesses that sell the same or similar products to those you plan to sell/provide. Determine how your business is different/unique from the two businesses. Create a USP for your business, and identify ways that you can incorporate it into your marketing efforts. Participate in a small-group activity to discuss your USP with classmates. Insert the USP and your ideas for incorporating it into your marketing efforts into your VIP portfolio.

Explain the purpose of a business’s Unique Selling Proposition (USP). Discuss the importance of always fulfilling a business’s USP. List questions to ask to facilitate creation of a business’s USP. Explain ways that a business can integrate its USP into its marketing efforts. Demonstrate procedures for identifying a business’s USP.

Resources LAPs

Textbooks

Marketing Education Resource Center. (2008). Stand Out (Unique Selling Proposition) [LAP: PM-016]. Columbus, OH: Author. Marketing Education Resource Center. (2008). Stand Out (Unique Selling Proposition): Instructor copy [LAP: PM-016]. Columbus, OH: Author. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (p. 300). Mason, OH: South-Western Cengage Learning. Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [p. 207]. Upper Saddle River, NJ: Prentice-Hall. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [p. 264]. Mason, OH: Thomson South-Western. Kuratko, D.G., & Hodgetts, R.M. (2007). Entrepreneurship: Theory, process, practice (7th ed.) [pp. 212-213, 216]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 19, 45, 232, 236]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Perreault, W. D., Cannon, J. P., & McCarthy, E. J. (2008). Basic marketing: A marketing strategy planning approach (16th ed.) [p. 440]. Boston: McGrawHill/Irwin.

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Soloman, M. R., Marshall, G. W., & Stuart, E. W. (2008). Marketing: Real people, real choices (5th ed.) [p. 388]. Upper Saddle River, NJ: Pearson Prentice Hall. Software/ Online

Business Owner’s Toolkit. (1995-2011). Your unique selling proposition. Retrieved April 18, 2011, from http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P03_1012 DeMenter, S. (n.d.). The abcs of usps. Retrieved April 18, 2011, from http://www.how-to-branding.com/ABCs-USPs.html DiFrisco, M.G. (2009). Your unique selling proposition. Retrieved April 18, 2011, from http://www.how-to-branding.com/Unique-Selling-Proposition.html Housley, S. (n.d.). Unique selling proposition. Retrieved April 15, 2011, from http://www.small-business-software.net/unique-selling-proposition.htm Interactive Marketing Inc. (2002-2010). How to create your "unique selling proposition" (USP) that makes your marketing generate more results. Retrieved April 18, 2011, from http://www.interactivemarketinginc.com/unique-sellingproposition.html Lim, L. (2000-2011). Unique selling proposition (usp)—your competitive advantage. Retrieved April 18, 2011, from http://www.marketingsphere.com/marketingarticles/unique-selling-proposition.html Marketing Education Resource Center. (2008). Stand Out (Unique Selling Proposition) [LAP: PM-016: Presentation Software]. Columbus, OH: Author. Meisenheimer, J. (n.d.). Unique selling proposition. Retrieved April 18, 2011, from http://www.startsellingmore.com/uniquesellingproposition.html Putnam, J.W. (2010, September 12). Why your company needs a unique selling proposition. Retrieved April 18, 2011, from http://www.josephwesley.com/2010/09/12/why-every-company-needs-a-uniqueselling-proposition/ The Economist. (2009, November 18). Unique selling proposition. Retrieved April 15, 2011, from http://www.economist.com/node/14301696

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Knowledge/ Skill Statement

Understands the concepts and processes needed to obtain, develop, maintain, and improve a product or service mix in response to market opportunities

Instructional Area

Product/Service Management

Performance Element

Position venture/product to acquire desired business image.

Performance Indicator

Select business location (PM:132)

Level

Manager

SCANS

Information 5; Systems 15; Basic Skills 1,3,5,6; Thinking Skills 8,10

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 3; Critical Thinking and Problem Solving 1-3; Communication and Collaboration 1; Information Literacy 1; ICT Literacy 1-2

Objectives

a. b. c. d. e.

Performance Activity

Explain the significance of business location to the success of some businesses. Identify factors that should influence the choice of business location. Discuss legal constraints in business location. Identify resources that can assist in selecting a business location. Demonstrate procedures for selecting a business location.

Select four local businesses of interest to you that represent retailing, service, professional, and manufacturing. Determine the location of each of the businesses, and decide what factors influenced each business’s location choice. Participate in a small-group activity to discuss your observations. Imagine that the business you plan to open will be located locally. Choose its location, and write a rationale for your decision. Insert the completed rationale into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 69, 314-320]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 160-161). Woodland Hills, CA: Glencoe/McGraw-Hill. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 53, 92-94, 159-161, 319). New York: McGraw-Hill. Baron, R.A., & Shane, S.A. (2008). Entrepreneurship: A process perspective (2nd ed.) [pp. 212, 215, 221, 229]. Mason, OH: South-Western Cengage Learnin Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 456-457). Mason, OH: South-Western Cengage Learning. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 318-321]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (pp. 741744). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C.L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 188-198]. Mason, OH: Thomson South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 356-367]. New York: McGraw-Hill Irwin. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Longenecker J.G.; Moore, C.W.; Petty, J.W.; & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 187-192, 379-382]. Mason, OH: Thomson South-Western. Software/ Online

AllBusiness.com (1999-2011). Tips on choosing the best business location. Retrieved April 18, 2011, from http://www.allbusiness.com/operations/facilitiesreal-estate-office-leasing/11153-1.html Allen, S. (n.d.). Choosing a location for your business. Retrieved April 18, 2011, from http://entrepreneurs.about.com/od/gettingstarted/a/chooselocation.htm Business Owner’s Toolkit. (1995-2011). Choosing the geographic location. Retrieved April 18, 2011, from http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P01_5290 Diverse Strategies. (2011). Selecting the right location for your business. Retrieved April 18, 2011, from http://www.diversestrategies.com/Business_location.htm Helium.com (2002-2011). Where to locate your business: Factors to consider. Retrieved April 18, 1011, from http://www.helium.com/knowledge/14459-whereto-locate-your-business-factors-to-consider MBFinancial Bank. (2010). Determine where to locate your business. Retrieved April 18, 2011, from http://www.mbfinancial.sbresources.com/SBR_template.cfm?DocNumber=PL07 _0035.htm Pishko, L.S. (n.d.). How to determine where to locate your business. Retrieved April 18, 2011, from http://www.ehow.com/how_5380752_determine-locatebusiness.html Tozzi, J. (2008, December 29). Where to locate your business. Retrieved April 18, 2011, from http://www.businessweek.com/smallbiz/content/dec2008/sb20081229_004920. htm

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Knowledge/ Skill Statement

Understands the concepts and processes needed to identify, select, monitor, and evaluate sales channels

Instructional Area

Channel Management

Performance Element

Acquire foundational knowledge of channel management to understand its role in marketing.

Performance Indicator

Explain the nature and scope of channel management (CM:001, CM LAP 2)

Level

Career-Sustaining

SCANS

Information 5; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 12

21st Century Skills

Critical Thinking and Problem Solving Skills 1, 3; Communication 1

Objectives

a.

b. c. d. e. f. g.

h.

i.

Performance Activity

Define the following terms: channel, channel intensity, channel length, distribution patterns, exclusive distribution, selective distribution, and intensive distribution. Explain how channel members add value. Discuss channel functions (e.g., information, promotion, contact, matching, negotiation, financing, and risk taking). Explain key channel tasks (e.g., marketing, packaging, financing, storage, delivery, merchandising, and personal selling). Describe when a channel will be most effective. Distinguish between horizontal and vertical conflict. Describe channel management decisions (i.e., selecting channel members, managing and motivating channel members, and evaluating channel members). Explain channel design decisions (i.e., analyzing customer needs, setting channel objectives, identifying major alternatives—types of intermediaries, number of intermediaries, responsibilities of intermediaries). Discuss the relationship between the product being distributed and the pattern of distribution it uses.

Identify channel-management activities that occur at local businesses comparable to the venture you plan to open. Record your findings, along with a discussion of similarities and differences in channel-management activities among these businesses, in a brief paper. Submit your report to your instructor for review, and insert the paper into your VIP portfolio.

Resources LAP

MBAResearch and Curriculum Center. (2009). Chart Your Channels (Channel Management) [LAP: CM-002]. Columbus, OH: Author. MBAResearch and Curriculum Center. (2009). Chart Your Channels (Channel Management): Instructor copy [LAP: CM-002]. Columbus, OH: Author.

Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 263-272]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 210-212, 220-222, 336, 355, 359). Woodland Hills, CA: Glencoe/McGraw-Hill. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 422-423, 426430). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 103-104, 342-353]. Mason, OH: Thomson/South-Western. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 328-330, 336-337, 340-342, 345-346]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Dlabay, L.R., Burrow, J.L., & Kleindl, B. (2009). Intro to business (7th ed.) [pp. 237, 250, 252-254]. Mason, OH: South-Western Cengage Learning. Etzel, M.J.; Walker, B.J.; & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 43-44, 377-401]. New York: McGraw-Hill/Irwin. Farese, L.S.; Kimbrell, G.; & Woloszyk, C.A. (2009). Marketing essentials (pp. 444456). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 61, 215-218]. Mason, OH: Thomson/South-Western. Grewal, D. & Levy, M. (2008). Marketing (pp. 411-415). New York: McGraw-Hill Irwin. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 349-351]. New York: McGraw-Hill Irwin. Lamb, C.W., Jr.; Hair, J.F., Jr.; & McDaniel C. (2003) Essentials of marketing (3rd ed.) [pp. 322-325]. Mason, OH: South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 322-326]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 322-323]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Perreault, W.D., Jr.; Cannon, J.P.; & McCarthy, E.J. (2008). Basic marketing: Marketing strategy planning approach (16th ed.) [pp. 290-309]. New York: McGraw-Hill/Irwin. Workbooks/ Manuals

Burrow, J.L. (2003). Marketing: Business 2000 (pp. 88-92). Mason, OH: SouthWestern/Thomson Learning.

Software/ Online

Armstrong, Kotler, & da Silva. (2009). Marketing channels and supply chain management. Retrieved April 18, 2011, from http://www.slideshare.net/kkjjkevin03/9/ Direct and channel marketing and distribution. (n.d.). Retrieved April 18, 2011, from http://www.jpec.org/handouts/jpec122.pdf eNotes. (n.d.). Channels of distribution. Retrieved April 18, 2011, from http://www.enotes.com/business-finance-encyclopedia/channels-distribution Georgetown University—McDonough School of Business. (n.d.). Distribution strategy. Retrieved April 18, 2011, from http://faculty.msb.edu/homak/HomaHelpSite/WebHelp/Distribution_Strategy.ht m Go-To-Market Strategies. (2001-2011). What is channel management anyway? Retrieved April 18, 2011, from http://www.gtmsinc.com/tip_WhatIsChannelMgt.htm MBAResearch and Curriculum Center. (2009). Chart Your Channels (Channel Management) [LAP: CM-002: Presentation Software]. Columbus, OH: Author. Tutor2u. (n.d.). Distribution—Channel strategy. Retrieved April 18, 2011, from http://www.tutor2u.net/business/marketing/distribution_channel_strategy.asp Tutor2u. (n.d.). Distribution—Types of distribution intermediary. Retrieved April 18, 2011, from http://www.tutor2u.net/business/marketing/distribution_intermediaries.asp Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Knowledge/ Skill Statement

Understands the concepts and processes needed to identify, select, monitor, and evaluate sales channels

Instructional Area

Channel Management

Performance Element

Acquire foundational knowledge of channel management to understand its role in marketing.

Performance Indicator

Explain the nature of channels of distribution (CM:003, CM LAP 1)

Level

Career-Sustaining

SCANS

Information 5-8; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 12

21st Century Skills

Critical Thinking and Problem Solving 3; Communication and Collaboration 1

Objectives

a.

b. c. d. e.

Performance Activity

Define the following terms: channels of distribution, producer, ultimate consumer, industrial user, middlemen, intermediaries, retailers, wholesalers, agents, direct channels, and indirect channels. Identify types of channel members/intermediaries/middlemen. Explain the importance of middlemen in the channel of distribution. Describe types of channels for consumer goods and services. Describe types of channels for industrial goods and services.

Select one product that you plan to sell/offer, and chart its possible distribution from the point of production to the final consumer/user. Discuss your chart with your instructor. Insert the distribution chart into your VIP portfolio.

Resources LAP

MBAResearch and Curriculum Center. (2009). Channel It (Channels of Distribution) [LAP: CM-001]. Columbus, OH: Author. MBAResearch and Curriculum Center. (2009). Channel It (Channels of Distribution): Instructor copy [LAP: CM-001]. Columbus, OH: Author.

Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 263-272]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 210-212). Woodland Hills, CA: Glencoe/McGraw-Hill. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 416-420). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 347-363]. Mason, OH: Thomson/South-Western. Clark, B.; Sobel, J.; & Basteria, C.G. (2010). Marketing dynamics:Teacher’s edition (2nd ed.) [pp. 322-328]. Tinley Park, IL: Goodheart-Willcox. Dlabay, L.R., Burrow, J.L., & Kleindl, B. (2009). Intro to business (7th ed.) [pp. 106107, 252-253]. Mason, OH: South-Western Cengage Learning. Etzel, M.J.; Walker, B.J.; & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 378-386]. New York: McGraw-Hill/Irwin. Farese, L.S.; Kimbrell, G.; & Woloszyk, C.A. (2009). Marketing essentials (pp. 444453). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 61, 215-217]. Mason, OH: Thomson/South-Western. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 342, 350]. New York: McGraw-Hill Irwin. Lamb, C.W., Jr.; Hair, J.F., Jr.; & McDaniel C. (2003) Essentials of marketing (3rd ed.) [pp. 314-322]. Mason, OH: South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 323-325]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 20, 323-324]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Perreault, W.D., Jr.; Cannon, J.P.; & McCarthy, E.J. (2008). Basic marketing: Marketing strategy planning approach (16th ed.) [pp. 338-363]. New York: McGraw-Hill/Irwin. Workbooks/ Manuals

Burrow, J.L. (2003). Marketing: Business 2000 (pp. 89-90). Mason, OH: SouthWestern/Thomson Learning.

Software/ Online

Bianco, D.P. (n.d.). Channels of distribution. Retrieved April 18, 2011, from http://www.referenceforbusiness.com/encyclopedia/Ca-Clo/Channels-ofDistribution.html BizHelp24. (2009, August 22). Distribution channels. Retrieved April 18, 2011, from http://www.bizhelp24.com/marketing/distribution-channels.html Lancaster, G, (n.d.). Channels of distribution. Retrieved April 18, 2011, from http://www.dagroup.co.uk/index.php?option=com_content&view=article&id=17:marketingchannels&catid=2:marketing-lectures Marketing Mixx. (2010, October 3). Types of distribution channels. Retrieved April 18, 2011, from http://marketingmixx.com/marketing-basics/41-types-ofdistribution-channels.html Marketing Teacher. (2000-2011). Place, distribution, channel, or intermediary. Retrieved April 18, 2011, from http://marketingteacher.com/Lessons/lesson_place.htm MBAResearch and Curriculum Center. (2009). Channel It (Channels of Distribution) [LAP: CM-001: Presentation Software]. Columbus, OH: Author. Olson, J. (2007, August 26). Types of wholesale distribution and sales channels. Retrieved April 18, 2011, from http://ezinearticles.com/?Types-Of-WholesaleDistribution-And-Sales-Channels&id=704341 University of Delaware. (n.d.). Chapter 15: Class notes. Retrieved April 18, 2011, from http://www.udel.edu/alex/chapt15.html

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Knowledge/ Skill Statement

Understands the concepts and processes needed to identify, select, monitor, and evaluate sales channels

Instructional Area

Channel Management

Performance Element

Manage channel activities to minimize costs and to determine distribution strategies.

Performance Indicator

Select channels of distribution (CM:010)

Level

Manager

SCANS

Resources 3; Information 5-8; Interpersonal 13; Systems 15; Basic Skills 1-3,5-6; Thinking Skills 9,12

21st Century Skills

Use Systems Thinking 1; Make Judgments and Decisions 1, 4; Solve Problems 1; Communicate Clearly 1; Access and Evaluate Information 1, 2; Use and Manage Information 1; Reason Effectively 1

Objectives

a. b.

c. d.

Performance Activity

Identify factors that affect the choice of channel of distribution. Describe how the following factors affect selection of distribution channels: (1) Nature of product (2) Market size and location (3) Access to channel members Explain procedures for selecting channels of distribution. Demonstrate procedures for selecting channels of distribution.

Identify the product(s) that you plan to sell, determine the market size of each, and then select the most appropriate channel(s) of distribution for the product(s). Record your findings in a brief paper providing rationale for your decision. Discuss your recommendations with the class. Insert the paper into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 263-272]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 210-213). Woodland Hills, CA: Glencoe/McGraw-Hill Boone, G. & Kurtz, D.L. (2009). Contemporary marketing 2009 edition (pp. 420426). Mason, OH: South-Western Cengage Learning. Bovée, C.L., Thill, J.V., & Mescon, M.H. (2007). Excellence in business (3rd ed.) [pp. 467-472]. Upper Saddle River, NJ: Pearson Prentice Hall. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics (2nd ed.) [pp. 332326]. Tinley Park, IL: Goodheart-Willcox. Grewal, D. & Levy, M. (2009). Marketing (pp. 30-31). New York: McGraw-Hill Irwin. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 215-218]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 342, 350351]. New York: McGraw-Hill Irwin. Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [pp. 350-351]. Upper Saddle River, NJ: Prentice-Hall.

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Kotler, P., & Keller, K.L. (2005). Marketing management (12th ed.) [pp. 476-486]. New Delhi, India: Prentice-Hall of India. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 323-326]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 323-324]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Solomon, M.R., Marshall, G.W., & Stuart, E.W. (2008). Marketing: Real people, real choices (5th ed.) [pp. 482-489]. Upper Saddle River, NJ: Pearson Prentice Hall. Software/ Online

Business Owner’s Toolkit. (1995-2011). Choosing distribution methods. Retrieved April 18, 2011, from http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P03_6000 Business Owner’s Toolkit. (1995-2011) Costs of distribution channels. Retrieved April 18, 2011, from http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P03_6025 Business Owner’s Toolkit. (1995-2011). Matching distribution to your goals. Retrieved April 18, 2011, from http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P03_6030 Business Owner’s Toolkit. (1995-2010). Prioritizing distribution options. Retrieved September 15, 2010, from http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P03_6040 Business Owner’s Toolkit. (1995-2011).Selecting your distribution channels. Retrieved April 18, 2011, from http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P03_5250 Business Portal of India. (n.d.). Distribution: Channels of distribution. Retrieved April 18, 2011, from http://business.gov.in/manage_business/channels_distribution.php Chapter 15: Managing marketing channels and wholesaling. (n.d.). Retrieved April 18, 2011, from http://www-rohan.sdsu.edu/~renglish/370/notes/chapt15/ Cornell University. (2006). Cutting edge: Distribution. Retrieved April 18, 2011, from http://instruct1.cit.cornell.edu/courses/cuttingedge/distribution/01.htm MacKillop, K. (2009, October 8). Defining the distribution channels for your business startup. Retrieved April 18, 2011, from http://ezinearticles.com/?Defining-theDistribution-Channels-For-Your-Business-Startup&id=3057983

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Knowledge/ Skill Statement

Understands concepts and strategies utilized in determining and adjusting prices to maximize return and meet customers’ perceptions of value

Instructional Area

Pricing

Performance Element

Develop a foundational knowledge of pricing to understand its role in marketing.

Performance Indicator

Explain the nature and scope of the pricing function (PI:001, PI LAP 2)

Level

Specialist

SCANS

Information 5-8; Systems 15; Basic Skills 1-3, 5-6; Thinking Skills 12

21st Century Skills

Critical Thinking and Problem Solving Skills 1, 3; Communication 1

Objectives

a. b. c. d. e. f. g.

Performance Activity

Prepare a brief presentation about the goals of pricing. Target the presentation to the managers and staff of a school-based enterprise or local business. Deliver the presentation.

Describe the characteristics of effective pricing. Explain what is being priced when prices are set for products. List factors that affect a product’s price. Describe how pricing affects product decisions. Explain how pricing affects place (distribution) decisions. Describe how pricing affects promotion decisions. Explain pricing objectives.

Resources LAP

Marketing Education Resource Center. (2008). The Price is Right (Nature of Pricing) [LAP: PI-002]. Columbus, OH: Author. Marketing Education Resource Center. (2008). The Price is Right (Nature of Pricing): Instructor copy [LAP: PI-002]. Columbus, OH: Author.

Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 276-280]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 230-235). Woodland Hills, CA: Glencoe/McGraw-Hill. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 224-226). New York: McGraw-Hill. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 605-610). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 96-97, 180, 378-379, 392-394]. Mason, OH: Thomson/South-Western. Clark, B.; Sobel, J.; & Basteria, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 414-424]. Tinley Park, IL: Goodheart-Willcox. Dlabay, L.R., Burrow, J.L., & Kleindl, B. (2009). Intro to business (7th ed.) [pp. 2526, 238, 250-251]. Mason, OH: South-Western Cengage Learning. Etzel, M.J.; Walker, B.J.; & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 318-330]. New York: McGraw-Hill/Irwin. Farese, L.S.; Kimbrell, G.; & Woloszyk, C.A. (2009). Marketing essentials (pp. 526536). Woodland Hills, CA: Glencoe/McGraw-Hill. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Grewal, D. & Levy, M. (2008). Marketing (pp. 358-361). New York: McGrawHill/Irwin. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 58-61, 218]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 286-296]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 302305]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 332-335]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 70-76, 247]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Perreault, W.D., Jr.; Cannon, J.P.; & McCarthy, E.J. (2008). Basic marketing: Marketing strategy planning approach (16th ed.) [pp. 456-510]. New York: McGraw-Hill/Irwin. Workbooks/ Manuals

Burrow, J.L. (2003). Marketing: Business 2000 (pp. 110-114). Mason, OH: SouthWestern/Thomson Learning.

Software/ Online

Abeysingha, R. (2009, June 13). Factors influencing the pricing decision. Retrieved April 18, 2011, from http://www.articlealley.com/article_934039_15.html GCSE Business Studies for CCEA. (n.d.). Introduction to the marketing mix— pricing. Retrieved April 18, 2011, from http://www.hoddersamplepages.co.uk/pdfs/cceabus6.pdf KnowThis.com (1998-2011). External factors: Competitive and other products. Retrieved April 18, 2011, from http://www.knowthis.com/principles-ofmarketing-tutorials /pricing-decisions/external-factors-competitive-and-related-products/ KnowThis.com. (1998-2011). Importance of price. Retrieved April 18, 2011, from http://www.knowthis.com/tutorials/principles-of-marketing/pricingdecisions/3.htm KnowThis.com. (1998-2011). Pricing decisions. Retrieved April 18, 2011, from http://www.knowthis.com/principles-of-marketing-tutorials/pricing-decisions/ Lancaster, G. (n.d.). Pricing. Received April 18, 2011, from http://www.dagroup.co.uk/index.php?option=com_content&view=article&id=25: pricing&catid=2:marketing-lectures Marketing Education Resource Center. (2008). The Price is Right (Nature of Pricing) [LAP: PI-002: Presentation Software]. Columbus, OH: Author. Marketing Teacher. (2000-2011). Pricing strategies. Retrieved April 18, 2011, from http://marketingteacher.com/Lessons/lesson_pricing.htm NetMBA. (2002-2007). Pricing strategy. Retrieved April 18, 2011, from http://www.netmba.com/marketing/pricing/

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Planning Guide Sheets

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Knowledge/ Skill Statement

Understands concepts and strategies utilized in determining and adjusting prices to maximize return and meet customers’ perceptions of value

Instructional Area

Pricing

Performance Element

Develop a foundational knowledge of pricing to understand its role in marketing.

Performance Indicator

Explain factors affecting pricing decisions (PI:002, PI LAP 3)

Level

Specialist

SCANS

Information 5-8; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 9, 12

21st Century Skills

Critical Thinking and Problem Solving Skills 1, 3; Communication 1

Objectives

a. b. c. d. e. f. g. h. i. j.

Performance Activity

Note to the Instructor: Review and present the Factors Affecting Pricing Decisions briefing (pp. 5-134 and 5-136) to students in a lecture or discussion format.

Define the term selling price. Distinguish between price and selling price. Describe the importance of selling price. Identify factors affecting selling price. Explain how consumers can affect selling price. Describe how government affects selling price. Discuss how competition can affect selling price. Explain how the nature of a business can affect selling price. Identify pricing objectives. Explain how pricing objectives affect selling price.

Given a list of 10 grocery items that can be found in grocery stores, convenience stores, warehouse clubs, etc., determine the price of each product at the locations specified by your teacher. Discuss reasons for the differences in prices at the various locations. Identify factors that will affect your business’s pricing decisions. Record these factors, and keep the listing in your VIP portfolio.

Resources LAP

MBAResearch and Curriculum Center. (2011). Make Cents (Factors Affecting Pricing Decisions) [LAP: PI-003]. Columbus, OH: Author. MBAResearch and Curriculum Center. (2011). Make Cents (Factors Affecting Pricing Decisions): Instructor copy [LAP: PI-003]. Columbus, OH: Author.

Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 276-280]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 230-247). Woodland Hills, CA: McGraw-Hill/Glencoe. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 605-625). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 378, 380-383, 386-389]. Mason, OH: Thomson/South-Western. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

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Clark, B.; Sobel, J.; & Basteria, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 414-424, 430-437]. Tinley Park, IL: Goodheart-Willcox. Dlabay, L.R., Burrow, J.L., & Kleindl, B. (2009). Intro to business (7th ed.) [p. 251]. Mason, OH: South-Western Cengage Learning. Etzel, M.J.; Walker, B.J.; & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 321-327, 336-340, 346-351]. New York: McGraw-Hill/Irwin. Farese, L.S.; Kimbrell, G.; & Woloszyk, C.A. (2009). Marketing essentials (pp. 531-536, 544-556). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 58-61, 218221]. Mason, OH: Thomson/South-Western. Grewal, D. & Levy, M. (2008). Marketing (pp. 375-376). New York: McGrawHill/Irwin. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 287-301]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 302305]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 332-340]. Mason, OH: Thomson South-Western. Lamb, C.W., Jr.; Hair, J.F., Jr.; & McDaniel C. (2003). Essentials of marketing (3rd ed.) [pp. 511-516]. Mason, OH: South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 70-76, 247]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Perreault, W.D., Jr.; Cannon, J.P.; & McCarthy, E.J. (2008). Basic marketing: Marketing strategy planning approach (16th ed.) [pp. 486-511]. New York: McGraw-Hill/Irwin. Workbooks/ Manuals

Burrow, J.L. (2003). Marketing: Business 2000 (pp. 112-114). Mason, OH: SouthWestern/Thomson Learning.

Software/ Online

Business Resource Software, Inc. (1994-2011). Issues affecting price. Retrieved April 18, 2011, from http://www.businessplans.org/Pricing.html Duffield, J. (2009, June 3). Price setting. Retrieved April 18, 2011, from http://ezinearticles.com/?Price-Setting&id=2430546 Hofstrand, D. (2010, March). Setting your price. Retrieved April 18, 2011, from http://www.extension.iastate.edu/agdm/wholefarm/html/c5-17.html KnowThis.com. (1998-2011). Pricing decisions. Retrieved April 18, 2011, from http://www.knowthis.com/tutorials/principles-of-marketing/pricing-decisions.htm Lancaster, G. (n.d.). Pricing. Retrieved April 18, 2011, from http://www.dagroup.co.uk/index.php?option=com_content&view =article&id=25:pricing&catid=2:marketing-lectures MBA Knowledge Base. (2011). Factors to consider when setting prices. Retrieved April 18, 2011, from http://www.mbaknol.com/marketing-management/factorsto-consider-when-setting-prices/ MBAResearch and Curriculum Center. (2011). Make Cents (Factors Affecting Pricing Decisions) [LAP: PI-003: Presentation Software]. Columbus, OH: Author. Slideshare.net (n.d.). Pricing products: Pricing considerations and approaches. Retrieved April 18, 2011, from http://www.slideshare.net/mehmetcihangir/pricing-products-pricingconsiderations-and-approaches-presentation-765073

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Key Points

Briefing: Factors Affecting Pricing Decisions

Page 5-135

Define selling price. The amount a seller charges for a good or service; usually thought of as the dollar figure shown on the price tag of products or quoted as the price of services Identify examples of selling prices. 1. 2. 3. 4. 5. 6. 7.

Dues for an organization’s membership Automobile insurance premium Toll for driving on certain roads College tuition Bus or taxi fare Fee for legal advice or medical attention Salaries of professional athletes

Discuss characteristics associated with selling prices. 1. 2.

They can’t be pulled out of thin air. (Each business must carefully determine and adjust selling prices.) They change. (Example: Gasoline prices fluctuate with the price of crude oil.)

Explain that businesses only keep a portion of the money that customers pay. 1. 2.

Businesses have to pay all the costs associated with the products they sell. They have to pay their operating expenses (e.g., utilities, salaries, lease/rent, etc.).

Describe the importance of selling price. 1. 2.

3.

Businesses and customers use selling price as a way to compare products when making buying decisions. Businesses and customers use selling price as a way to decide how to allocate their money (i.e., since they can’t buy everything they want, they look at selling price to decide which items they can afford). Businesses use selling price to determine the amount of income from sales they’ll receive (i.e., businesses determine how much markup they’ll apply to the cost of products to pay current expenses and to provide for the business’s future growth.)

Explain that pricing objectives and marketing objectives must be compatible. Businesses need to set their marketing objectives first, and then determine the pricing objectives that will most likely help them achieve the marketing objectives. As marketing objectives change, pricing objectives will need to be reviewed and possibly changed. Describe primary categories of pricing objectives. 1.

Sales-oriented objectives Are focused on increasing total income from sales and can be accomplished in two ways: a. Charge low prices to increase the volume of sales so that the business has more total income because it sells more products b. Charge high prices to increase the dollar value of each sale Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Briefing: Factors Affecting Pricing Decisions 2.

Profit-oriented objectives Are focused on creating profit for a business a. Some businesses set prices that result in the greatest amount of profit. b. Other businesses set prices to recover their costs and earn a reasonable profit.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Section 5

Planning Guide Sheets

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Knowledge/ Skill Statement

Understands concepts and strategies utilized in determining and adjusting prices to maximize return and meet customers’ perceptions of value

Instructional Area

Pricing

Performance Element

Employ pricing strategies to determine optimal prices.

Performance Indicator

Determine cost of product (break-even, ROI, markup) (PI:019)

Level

Manager

SCANS

Resources 2; Information 5-8; Systems 15; Basic Skills 1-3,5-6; Thinking Skills 89,12

21st Century Skills

Critical Thinking and Problem Solving 1, 3; Communication and Collaboration 1; Information Literacy 1; ICT Literacy 1-2

Objectives

a. b. c. d. e. f.

Performance Activity

Given a series of products, determine the products’ costs using break-even, ROI, and markup. Compare responses with those of classmates.

Define the following terms: break-even, ROI, and markup. Explain the role of break-even in determining the cost of product. Describe the use of ROI in determining the cost of a product. Discuss the use of markup in determining the cost of a product. Explain factors to consider in determining the cost of a product. Demonstrate procedures for determining the cost of a product.

Determine the costs of your business’s products. Prepare a spreadsheet showing their costs using break-even, ROI, and markup. Insert the completed spreadsheet into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 276-280, 393]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 241-247). Woodland Hills, CA: McGraw-Hill/Glencoe. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 123-124, 224-226). New York: McGraw-Hill. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 605-625). Mason, OH: South-Western Cengage Learning. Clark, B.; Sobel, J.; & Basteria, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 430-437]. Tinley Park, IL: Goodheart-Willcox. Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (p.528529, 533, 545). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 219-221]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 421, 497]. New York: McGraw-Hill Irwin. Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [pp. 288-292]. Upper Saddle River, NJ: Prentice-Hall. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 221, 302-305, 337-340]. Mason, OH: Thomson South-Western. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Planning Guide Sheets

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Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 332-340]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 28, 70-76, 247, 264-269]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Software/ Online

Accounting for Management. (2011). Absorption costing approach to pricing. Retrieved April 18, 2011, from http://www.accountingformanagement.com/absorption_costing_approach_cost _plus_pricing.htm Bizpep Group. (n.d.). Pricing and breakeven analysis. Retrieved April 18, 2011, form http://www.bizpeponline.com/PricingBreakeven.html eHow.com. (2011, February 9). How to calculate a price markup. Retrieved April 18, 2011, from http://www.ehow.com/how_2027243_calculate-price-markup.html eXtension. (2007, January 19). How do I determine a price four my product? Retrieved April 18, 2011, from http://www.extension.org/pages/36693/how-doi-determine-a-price-for-my-productc NetMBA.com. (2002-2010). Pricing strategy. Retrieved April 18, 2011, from http://www.netmba.com/marketing/pricing/ Schmidt, M.J. (2011). Return on investment: What is roi analysis? Retrieved April 18, 2011, from http://www.solutionmatrix.com/return-on-investment.html Ward, S. (2011). Breakeven analysis. Retrieved April 18, 2011, from http://sbinfocanada.about.com/cs/startup/g/breakevenanal.htm

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-139

Knowledge/ Skill Statement

Understands concepts and strategies utilized in determining and adjusting prices to maximize return and meet customers’ perceptions of value

Instructional Area

Pricing

Performance Element

Employ pricing strategies to determine optimal prices.

Performance Indicator

Calculate break-even point (PI:006, PI LAP 4)

Level

Manager

SCANS

Resources 2; Information 5-8; Systems 15; Basic Skills 1-3,5-6; Thinking Skills 89,12

21st Century Skills

Critical Thinking and Problem Solving 1, 3; Communication and Collaboration 1; Information Literacy 1; ICT Literacy 1-2

Objectives

a. b. c. d. e. f.

Performance Activity

Obtain the financial information needed to calculate a school-based enterprise’s break-even point for a product in units and in dollars. Share your findings with the person who gave you the information.

Identify examples of fixed expenses. List examples of variable expenses. Cite examples of mixed/semi-variable expenses. Explain the importance of break-even in setting prices. Calculate the break-even point for a product in units. Calculate the break-even point for a product in dollars.

Gather the financial information necessary to calculate your business’s break-even point for one or more products in units and in dollars. Prepare a graph of the calculation, and insert the completed graph into your VIP portfolio.

Resources LAP

Marketing Education Resource Center (2007). Tipping Point (Calculate Break-even) [LAP: PI-004]. Columbus, OH: Author. Marketing Education Resource Center (2007). Tipping Point (Calculate Breakeven): Instructor’s copy [LAP: PI-004]. Columbus, OH: Author.

Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [p. 393]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 230, 241-242, 459). Woodland Hills, CA: McGrawHill/Glencoe. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 123-124). New York: McGraw-Hill. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 619-622). Mason, OH: South-Western Cengage Learning. Clark, B.; Sobel, J.; & Basteria, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 417, 434-435]. Tinley Park, IL: Goodheart-Willcox. Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (pp. 533, 767). Woodland Hills, CA: Glencoe/McGraw-Hill. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Planning Guide Sheets

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Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 63-64, 220221]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 418, 421]. New York: McGraw-Hill Irwin. Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [pp. 288-292]. Upper Saddle River, NJ: Prentice-Hall. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 326327, 337-340]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 205, 335-336]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 116-126, 264-269]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Software/ Online

AccountingCoach. (20004-2011). Break-even point. Retrieved April 19, 2011, from http://www.accountingcoach.com/online-accounting-course/01Xpg03.html Accounting for Management. (2011). Mixed cost or semi-variable cost. Retrieved April 18, 2011, from http://www.accountingformanagement.com/mixed_costs.htm Accounting for Management. (2011). Traceable and common fixed costs. Retrieved April 18, 2011, from http://www.accountingformanagement.com/traceable_common_fixed_costs.ht m eHow.com (1999-2011). How to calculate a breakeven point in units. Retrieved April 18, 2011, from http://www.ehow.com/how_2363740_calculate-breakevenpoint-units.html Elmblad, S. (n.d.). Fixed expense. Retrieved April 18, 2011, from http://financialsoft.about.com/od/glossaryindexf/g/FixedExpns_def.htm Marketing Education Resource Center (2007). Tipping Point (Calculate Break-even) [LAP: PI-004: Presentation Software]. Columbus, OH: Author. Richards, D. (n.d.). How to do a breakeven analysis. Retrieved April 18, 2011, from http://entrepreneurs.about.com/od/businessplan/a/breakeven.htm SmallBusinessNotes.com. (n.d.). Calculating break-even revenue. Retrieved April 19, 2011, from http://www.smallbusinessnotes.com/marketing-yourbusiness/calculating-break-even-revenue.html The starting point: Calculating break-even. (n.d.). Retrieved April 18, 2011, from http://www.education.ne.gov/BMIT/Curriculum/Pricing_Calculating_Break_Eve n_Points.pdf tutor2u.com. (n.d.). Breakeven. Retrieved April 19, 2011, from http://tutor2u.net/business/gcse/finance_breakeven.htm

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Planning Guide Sheets

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Knowledge/ Skill Statement

Understands concepts and strategies utilized in determining and adjusting prices to maximize return and meet customers’ perceptions of value

Instructional Area

Pricing

Performance Element

Employ pricing strategies to determine optimal prices.

Performance Indicator

Set prices (PI:007)

Level

Manager

SCANS

Resources 2; Information 5-8; Systems 15; Basic Skills 1-3,5-6; Thinking Skills 89,12

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 2; Use Systems Thinking 1; Make Judgments and Decisions 4; Communicate Clearly 1; Access and Evaluate Information 1, 2; Use and Manage Information 1, 2, 3; Apply Technology Effectively 1, 3; Adapt to Change 2; Reason Effectively 1

Objectives

a. b. c. d. e.

Performance Activity

Set prices of products offered for sale in a school-based enterprise, including identification of the products’ floors and ceilings and estimating product demand. Compare your responses with those of other students in the class, discussing the rationale used.

Define the following terms: floors, ceilings, and elasticity. Describe the importance of determining pricing floors and ceilings. Explain process for setting prices. Estimate demand for product. Implement process for setting prices.

Set prices for the goods or services that you plan to sell/offer. Estimate product demand, identify the products’ floors and ceilings, and use a spreadsheet software program to show costs, miscellaneous charges, discounts, profit margin, and final selling prices. After completing your spreadsheet, discuss it with a business partner, classmates, or your instructor. Modify the spreadsheet as needed, based on the feedback that you receive. Insert the completed spreadsheet into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [p. 391]. Boston: Houghton Mifflin Company. Allen, K.A., & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 234-247, 459). Woodland Hills, CA: McGraw-Hill Glencoe. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (p. 225). New York: McGraw-Hill. Boone, G. & Kurtz, D.L. (2009). Contemporary marketing 2009 edition (pp. 618624). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 155, 378-381, 384-393]. Mason, OH: Thomson South-Western.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Planning Guide Sheets

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Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics (2nd ed.) [pp. 435437]. Tinley Park, IL: Goodheart-Willcox. Farese, L. S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (pp. 531536, 545-558, 566-576). Woodland Hills, CA: McGraw-Hill Glencoe. Greene, C.L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 218-221]. Mason, OH: Thomson South-Western. Grewal, D. & Levy, M. (2009). Marketing (pp. 29-30, 224-241). New York: McGrawHill Irwin. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 290-291]. New York: McGraw-Hill Irwin. Kotler, P., & Armstrong, G. (2008). Principles of Marketing (12 ed.) [pp. 291-292]. Upper Saddle River, NJ: Pearson/Prentice Hall. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [p. 303]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 332-336]. Mason, OH: Thomson South-Western. Mariotti, S. (2006). How to start & operate a small business (10th ed.) [pp. 264, 266269]. New York: The National Foundation for Teaching Entrepreneurship. Solomon, M.R., Marshall, G.W., & Stuart, E.W. (2008). Marketing: Real people, real choices (5th ed.) [pp. 338-358]. Upper Saddle River, NJ: Pearson Prentice Hall. Workbooks/ Manuals

Burrow, J.L. (2003). Marketing: Business 2000 (pp. 112-114). Mason, OH: SouthWestern Thomson Learning.

Software/ Online

Berry, T. (2006, January 1). Determining a plan for setting prices. Retrieved April 19, 2011, from http://www.entrepreneur.com/startingabusiness/businessplans/businessplanco achtimberry/article82730.html Business Owner’s Toolkit. (1995-2011). Evaluating your product’s uniqueness. Retrieved April 19, 2011, from http://www.toolkit.cch.com/text/P03_5240.asp Business Owner’s Toolkit. (1995-2010). Pricing your product. Retrieved October 8, 2010, from http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P03_5200 Business Owner’s Toolkit. (1995-2011). Researching product price elasticity. Retrieved April 19, 2011, from http://www.toolkit.cch.com/text/P03_5230.asp Ennico, C. (2003, June 1). Set the right price for your service. Retrieved April 19, 2011, from http://www.entrepreneur.com/money/moneymanagement/pricing/article62382. html Fishman, S. (2011). How much should you charge for your services? Retrieved April 19, 2011, from http://www.nolo.com/legal-encyclopedia/article-30158.html Gingerich, S. (n.d.). Setting prices for services. Retrieved April 19, 2011, from http://www.yebdc.ab.ca/pdf%20files%20for%20download/sueart/sue55.pdf Passewitz, G.R. (n.d.). Pricing. Retrieved April 19, 2011, from http://ohioline.osu.edu/cd-fact/1326.html Pricing. (2004, Spring). Retrieved April 19, 2011, from http://www.slu.edu/Documents/business/eweb/Pricing_Slides.pdf Small Business Notes. (2010). Pricing a product or service. Retrieved April 19, 2011, from http://www.smallbusinessnotes.com/operating/marketing/pricing.html

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Planning Guide Sheets

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Knowledge/ Skill Statement

Understands the concepts and strategies needed to communicate information about products, services, images, and/or ideas to achieve a desired outcome

Instructional Area

Promotion

Performance Element

Acquire a foundational knowledge of promotion to understand its nature and scope.

Performance Indicator

Explain the role of promotion as a marketing function (PR:001, PR LAP 2)

Level

Career-sustaining

SCANS

Information 5-8; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 12

21st Century Skills

Critical Thinking and Problem Solving Skills 1, 3; Communication and Collaboration 1

Objectives

a. b. c. d. e. f.

Performance Activity

Participate in an activity in which the class has been divided into three groups and assigned to one of the following promotional objectives: to inform, to persuade, to remind. Focus on the group’s promotional objective, locating and/or identifying promotional messages targeted at accomplishing the group’s objective. Identify at least four promotional messages for the objective. Present the findings to the class.

Define the term promotion. List users of promotion. Describe the benefits of using promotion. Describe the costs associated with the use of promotion. Describe types of promotional objectives. Discuss the relationship of promotion and marketing.

Resources LAP

MBAResearch and Curriculum Center. (2010). Razzle Dazzle (Promotion) [LAP: PR-002]. Columbus, OH: Author. MBAResearch and Curriculum Center. (2010). Razzle Dazzle (Promotion): Instructor copy [LAP: PR-002]. Columbus, OH: Author.

Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 293-294]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 254-256). Woodland Hills, CA: Glencoe/McGraw-Hill. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (p. 227). New York: McGraw-Hill. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 496-498). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 7, 20, 404-406, 473, 499]. Mason, OH: Thomson/South-Western. Clark, B.; Sobel, J.; & Basteria, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 468-472]. Tinley Park, IL: Goodheart-Willcox. Dlabay, L.R., Burrow, J.L., & Kleindl, B. (2009). Intro to business (7th ed.) [pp. 237238, 255-259]. Mason, OH: South-Western Cengage Learning. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Planning Guide Sheets

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Etzel, M.J.; Walker, B.J.; & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 474-476, 485-486]. New York: McGraw-Hill/Irwin. Farese, L.S.; Kimbrell, G.; & Woloszyk, C.A. (2009). Marketing essentials (pp. 362363). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [p. 222]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 310-314, 328-334]. New York: McGraw-Hill Irwin. Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [pp. 51, 413415, 426-427]. Upper Saddle River, NJ: Prentice-Hall. Lamb, C.W., Jr.; Hair, J.F., Jr.; & McDaniel C. (2003). Essentials of marketing (3rd ed.) [pp. 419-421]. Mason, OH: South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 353-354]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 250, 140]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Perreault, W.D., Jr.; Cannon, J.P.; & McCarthy, E.J. (2008). Basic marketing: Marketing strategy planning approach (16th ed.) [pp. 368-375, 390-391]. New York: McGraw-Hill/Irwin. Workbooks/ Manuals

Burrow, J.L. (2003). Marketing: Business 2000 (pp. 132-134). Mason, OH: SouthWestern/Thomson Learning.

Software/ Online

Hofstrand, D. (2005, January). Promoting your business. Retrieved April 19, 2011, from http://www.extension.iastate.edu/AgDM/wholefarm/html/c5-43.html KnowThis.com. (1998-2011).Objectives of marketing promotions. Retrieved April 19, 2011, from http://www.knowthis.com/tutorials/principles-ofmarketing/promotion-decisions/3.htm KnowThis.com. (1998-2011). Types of promotion objectives. Retrieved April 19, 2011, from http://www.knowthis.com/tutorials/principles-ofmarketing/promotion-decisions/4.htm KnowThis.com. (1998-2011). What is promotion? Retrieved April 19, 2011, from http://www.knowthis.com/tutorials/principles-of-marketing/promotiondecisions/1.htm Lancaster, G. (n.d.). Above- and below-the-line promotion. Retrieved April 19, 2011, from http://www.dagroup.co.uk/index.php?option=com_content&view=article&id=18:thecommunication-mix&catid=2:marketing-lectures MBAResearch and Curriculum Center. (2010). Razzle Dazzle (Promotion) [LAP: PR-002: Presentation Software]. Columbus, OH: Author. Sands, M. (n.d.). What’s the difference between marketing and promotion. Retrieved April 19, 2011, from http://www.dagroup.co.uk/index.php?option=com_content&view=article&id=15&Itemid=3

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-145

Knowledge/ Skill Statement

Understands the concepts and strategies needed to communicate information about products, services, images, and/or ideas to achieve a desired outcome

Instructional Area

Promotion

Performance Element

Acquire a foundational knowledge of promotion to understand its nature and scope.

Performance Indicator

Explain the types of promotion (PR:002, PR LAP 4)

Level

Career-sustaining

SCANS

Information 5-8; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 12

21st Century Skills

Critical Thinking and Problem Solving Skills 1

Objectives

a.

b. c. d. e. f. g.

Performance Activity

Define the following terms: product promotion, primary product promotion, secondary product promotion, institutional promotion, public service, public relations, and patronage. Identify types of product promotion. Describe the uses of product promotion. Identify types of institutional promotion. Describe uses of institutional promotion. Discuss the advantages of promotional activities. Discuss the disadvantages of promotional activities.

Locate examples of institutional and product promotions in magazines, in newspapers, or on the Internet. Affix the promotions to paper, and label each by its type of promotion. Obtain feedback from a classmate. Create a list of different examples of institutional and product promotions that you could use to promote your business. Participate in a small-group discussion to examine your ideas, and add to/subtract from the list based on input from your group members. Create a multi-column table using spreadsheet software in which you create the following headings: a. b. c. d.

Institutional/Product Promotion Idea Purpose Advantages/Disadvantages (of Promotion Idea)

Complete the table, and insert it into your VIP portfolio.

Resources LAP

MBAResearch and Curriculum Center. (2010). Know Your Options (Types of Promotion) [LAP: PR-004]. Columbus, OH: Author. MBAResearch and Curriculum Center. (2010). Know Your Options (Types of Promotion): Instructor copy [LAP: PR-004]. Columbus, OH: Author.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 293-294]. Boston: Houghton Mifflin Company. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 227-229). New York: McGraw-Hill. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 410-415]. Mason, OH: Thomson/SouthWestern. Clark, B.; Sobel, J.; & Basteria, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [p. 473]. Tinley Park, IL: Goodheart-Willcox. Etzel, M.J.; Walker, B.J.; & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 476-477, 525]. New York: McGraw-Hill/Irwin. Farese, L.S.; Kimbrell, G.; & Woloszyk, C.A. (2009). Marketing essentials (pp. 363367). Woodland Hills, CA: Glencoe/McGraw-Hill. Grewal, D. & Levy, M. (2008). Marketing (pp. 491-495). New York: McGrawHill/Irwin. Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [pp. 506-509]. Upper Saddle River, NJ: Prentice-Hall. Lamb, C.W., Jr.; Hair, J.F., Jr.; & McDaniel C. (2003). Essentials of marketing (3rd ed.) [pp. 440-442]. Mason, OH: South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [p. 359]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 140-141]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Perreault, W.D., Jr.; Cannon, J.P.; & McCarthy, E.J. (2008). Basic marketing: Marketing strategy planning approach (16th ed.) [pp. 369-371, 429]. New York: McGraw-Hill/Irwin.

Software/ Online

Edward Lowe Foundation. (2011). How to establish a promotional mix. Retrieved April 19, 2011, from http://edwardlowe.org/index.elf?page=sserc&function=story&storyid=8816 Friedman, H.(2010). Advertising, publicity, and sales promotion. Retrieved April 19, 2011, from http://academic.brooklyn.cuny.edu/economic/friedman/mmadvertising.htm Hofstrand, D. (2005, January). Promoting your business. Retrieved April 21, 2011, from http://www.extension.iastate.edu/AgDM/wholefarm/html/c5-43.html Lancaster, G. (n.d.). Communication mix: Above- and below-the-line promotion. Retrieved April 26, 2011 from http://www.dagroup.co.uk/index.php?option=com_content&view=article&id=18:thecommunication-mix&catid=2:marketing-lectures MBAResearch and Curriculum Center. (2010). Know Your Options (Types of Promotion) [LAP: PR-004: Presentation Software]. Columbus, OH: Author. Promotion is communication. (n.d.). Retrieved April 26, 2011, from http://blue.wths.net/academics/business/Chiakulas/CP-%20Ch.%2036.ppt Promotional mix. (2010). Retrieved April 19, 2011, from http://www.slideshare.net/monikagvt09/promotional-mix-3675309 SmallBusinessNotes.com. (2011). Promotion your business. Retrieved April 19, 2011, http://www.smallbusinessnotes.com/marketing-your-business/promotingyour-business.html

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-147

Knowledge/ Skill Statement

Understands the concepts and strategies needed to communicate information about products, services, images, and/or ideas to achieve a desired outcome

Instructional Area

Promotion

Performance Element

Acquire a foundational knowledge of promotion to understand its nature and scope.

Performance Indicator

Identify the elements of the promotional mix (PR:003, PR LAP 1)

Level

Specialist

SCANS

Information 5-8; Systems 15; Basic Skills 1-2, 5-6; Thinking Skills 12

21st Century Skills

Critical Thinking and Problem Solving Skills 1, 3; Communication and Collaboration 1

Objectives

a. b. c. d. e. f. g. h. i.

Performance Activity

Define the following terms: promotional mix, advertising, personal selling, publicity and sales promotion. Identify the elements of the promotional mix. Categorize examples of promotions according to the elements of the promotional mix. Describe the importance of the promotional mix. Identify factors affecting the promotional mix. Describe how the product being sold affects the promotional mix. Explain how the product's market affects the promotional mix. Discuss how the distribution system affects the promotional mix. Explain how the product's company affects the promotional mix.

Select a business, and identify its promotional mix. Recommend changes to the mix that you feel would help the business to communicate better with its customers. Identify two businesses similar to the one that you are interested in starting. Determine their promotional mix; examine their similarities and differences. Based on your assessment, identify the promotional mix that would be effective for your business. Write a rationale for your selection, identifying the promotional mix and explaining how it is similar to and/or different than that of the two businesses. Insert the listing and rationale into your VIP portfolio.

Resources LAP

MBAResearch and Curriculum Center. (2011). Spread the Word (Promotional Mix) [LAP: PR-001]. Columbus, OH: Author. MBAResearch and Curriculum Center. (2011). Spread the Word (Promotional Mix): Instructor copy [LAP: PR-001]. Columbus, OH: Author.

Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 292-294]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (p. 254). Woodland Hills, CA: Glencoe/McGraw-Hill.

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Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 498-503, 509512). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 416-421]. Mason, OH: Thomson/SouthWestern. Clark, B.; Sobel, J.; & Basteria, C.G. (2010). Marketing dynamics:Teacher’s edition (2nd ed.) [pp. 473, 485-486]. Tinley Park, IL: Goodheart-Willcox. Etzel, M.J.; Walker, B.J.; & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 476-477, 483-488]. New York: McGraw-Hill/Irwin. Farese, L.S.; Kimbrell, G.; & Woloszyk, C.A. (2009). Marketing essentials (pp. 363-368). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [p. 222]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 314, 333334]. New York: McGraw-Hill Irwin. Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [pp. 398-399]. Upper Saddle River, NJ: Prentice-Hall. Kuratko, D.G., & Hodgetts, R.M. (2007). Entrepreneurship: Theory, process, practice (7th ed.) [p. 359]. Mason, OH: Thomson South-Western. Lamb, C.W., Jr.; Hair, J.F., Jr.; & McDaniel C. (2003). Essentials of marketing (3rd ed.) [pp. 411-413, 424-428]. Mason, OH: South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [p. 354]. Mason, OH: Thomson South-Western. Perreault, W.D., Jr.; Cannon, J.P.; & McCarthy, E.J. (2008). Basic marketing: Marketing strategy planning approach (16th ed.) [pp. 37-38, 368-371, 374-375]. New York: McGraw-Hill/Irwin. Workbooks/ Manuals

Burrow, J.L. (2003). Marketing: Business 2000 (pp. 135-150). Mason, OH: SouthWestern/Thomson Learning.

Software/ Online

Bovey, C. (2008, August 10). Marketing mix—top 4 promotion mix tactics. Retrieved April 19, 2011, from http://ezinearticles.com/?Marketing-Mix---Top-4Promotion-Mix-Tactics&id=1398510 Dolak, D. (1999-2010). The marketing communications or promotional mix. Retrieved April 19, 2011, from http://www.davedolak.com/promix.htm Edward Lowe Foundation. (2011). How to establish a promotional mix. Retrieved April 19, 2011, from http://edwardlowe.org/index.elf?page=sserc&function=story&storyid=8816 Hofstrand, D. (2005, January). Promoting your business. Retrieved April 21, 2010, from http://www.extension.iastate.edu/AgDM/wholefarm/html/c5-43.html KnowThis.com. (1998-2011). Types of promotion—Promotion mix. Retrieved April 19, 2011, from http://www.knowthis.com/tutorials/principles-ofmarketing/promotion-decisions/16.htm Lancaster, G. (n.d.). Communication mix: Above- and below-the-line promotion. Retrieved April 19, 2011, from http://www.dagroup.co.uk/index.php?option=com_content&view=article&id=18:thecommunication-mix&catid=2:marketing-lectures Marketing Teacher. (2000-2011). Promotion. Retrieved April 19, 2011, from http://marketingteacher.com/Lessons/lesson_promotion.htm MBAResearch and Curriculum Center. (2011). Know Your Options (Types of Promotion) [LAP: PR-001: Presentation Software]. Columbus, OH: Author. Suttle, R. (2007, January 7). Elements of promotional mix. Retrieved April 19, 2011, from http://www.ehow.com/info_7743387_elements-promotional-mix.html

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-149

Knowledge/ Skill Statement

Understands the concepts and strategies needed to communicate information about products, services, images, and/or ideas to achieve a desired outcome

Instructional Area

Promotion

Performance Element

Understand promotional channels used to communicate with targeted audiences.

Performance Indicator

Explain types of advertising media (PR:007, PR LAP 3)

Level

Specialist

SCANS

Information 5-8; Systems 15; Basic Skills 1-2,5-6; Thinking Skills 12

21st Century Skills

Critical Thinking and Problem Solving Skills 1; Communication and Collaboration 1; Media Literacy 1

Objectives

a. b. c. d. e. f. g. h. i. j. k. l. m. n. o. p. q. r.

Performance Activity

Create a list of print and broadcast media available in your area. Determine how often they are published/broadcast, who their target audiences are, and what type(s) of businesses could benefit from using each medium. Collect examples of their advertisements. Insert the information into your VIP portfolio.

Define the term advertising media. Categorize advertising media. Identify types of publications. Describe factors on which newspapers vary. Categorize types of magazines. Describe the two categories of broadcast media. Categorize purchase options for television advertising. Discuss the difference between local and network advertising. Describe types of direct-mail advertising. Explain types of Web advertising. Identify types of out-of-home media. Describe specialty advertising. Discuss the use of directory advertising. Explain the use of movie theater advertising. Describe the use of product placement for advertising. Discuss the use of telemarketing for advertising. Explain the use of videotapes, DVDs, and CD-ROM advertising. Explain trends that are affecting advertising media.

Resources LAP

Marketing Education Resource Center. (2009). Ad-quipping Your Business (Types of Promotional Media) [LAP: PR-003]. Columbus, OH: Author. Marketing Education Resource Center. (2009). Ad-quipping Your Business (Types of Promotional Media): Instructor copy [LAP: PR-003]. Columbus, OH: Author.

Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [p. 295]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 258-260). Woodland Hills, CA: Glencoe/McGraw-Hill.

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Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 227-229). New York: McGraw-Hill. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (p. 505). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 438, 440-441]. Mason, OH: Thomson/South-Western. Clark, B.; Sobel, J.; & Basteria, C.G. (2010). Marketing dynamics (2nd ed.) [pp. 447448, 474, 500-503, 503-507]. Tinley Park, IL: Goodheart-Willcox. Etzel, M.J.; Walker, B.J.; & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 531-534]. Burr Ridge, IL: McGraw-Hill/Irwin. Farese, L.S.; Kimbrell, G.; & Woloszyk, C.A. (2009) Marketing essentials (3rd ed.) [pp. 401-408]. Woodland Hills, CA: Glencoe. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 223-226]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 314-318]. New York: McGraw-Hill Irwin. Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [pp. 399, 408, 484-493]. Upper Saddle River, NJ: Prentice-Hall. Lamb, C.W., Jr.; Hair, J.F., Jr.; & McDaniel C. (2003) Essentials of marketing (3rd ed.) [pp. 448-452]. Mason, OH: South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 360-369]. Mason, OH: Thomson South-Western. Mariotti, S., & Towle, T. (2006). Entrepreneurship: How to start and operate a small business (10th ed.) [pp. 255-257]. New York: The National Foundation for Teaching Entrepreneurship, Inc. Software/ Online

Business Owner’s Toolkit. (1995-2011). Advertising media. Retrieved April 19, 2011, from http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P03_7031 Encyclopedia of Small Business. (2011). Advertising media—Audio. Retrieved April 19, 2011, from http://www.referenceforbusiness.com/small/A-Bo/AdvertisingMedia-Audio.html Encyclopedia of Small Business. (2011). Advertising media—Informercials. Retrieved April 19, 2011, from http://www.referenceforbusiness.com/small/ABo/Advertising-Media-Infomercials.html Encyclopedia of Small Business. (2011). Advertising media—Print. Retrieved April 19, 2011, from http://www.referenceforbusiness.com/small/A-Bo/AdvertisingMedia-Print.html Encyclopedia of Small Business. (2011). Advertising media—Video. Retrieved April 21, 2011, from http://www.referenceforbusiness.com/small/A-Bo/AdvertisingMedia-Video.html eNotes.com. (2011). Advertising. Retrieved April 21, 2011, from http://www.enotes.com/business-finance-encyclopedia/advertising KnowThis.com. (1998-2011). Trends: Changing media choices. Retrieved April 19, 2011, from http://www.knowthis.com/tutorials/principles-ofmarketing/advertising/10.htm Marketing Education Resource Center. (2009). Ad-quipping Your Business (Types of Promotional Media) [LAP: PR-003: Presentation Software]. Columbus, OH: Author. Petrecca, L. (2006, October 10). Product placement—You can’t escape it. Retrieved April 19, 2011, from http://www.usatoday.com/money/advertising/2006-10-10ad-nauseum-usat_x.htm

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-151

Knowledge/ Skill Statement

Understands the concepts and strategies needed to communicate information about products, services, images, and/or ideas to achieve a desired outcome

Instructional Area

Promotion

Performance Element

Manage promotional activities to maximize return on promotional investments.

Performance Indicator

Develop a promotional plan for a business (PR:097)

Level

Manager

SCANS

Resources 1-2; Information 5-8; Systems 15; Basic Skills 1-3,5-6; Thinking Skills 78,12

21st Century Skills

Creativity and Innovation 1-2, 4; Critical Thinking and Problem Solving 1-5; Communication and Collaboration 1; Information Literacy 1; Media Literacy 1-2; Productivity and Accountability 1; Leadership and Responsibility 4

Objectives

a. b. c. d.

Performance Activity

Imagine that you have decided to open a dance club for teens aged 14-19 in the community. Develop a promotional plan for the dance club. Discuss your promotional plan with a classmate.

Describe steps in promotional planning. Determine components to include in a promotional plan. Explain guidelines for developing a promotional plan. Demonstrate how to develop a promotional plan.

Develop a promotional plan for your business. Work with a business partner, instructor, or SCORE counselor to assess its utility. Modify the promotional plan based on input obtained. Insert the modified promotional plan into your VIP portfolio. Note to the Instructor: A rubric suitable for evaluating each student’s promotional plan is provided on pp. 5-153 and 5-155.

Resources Textbooks

Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 254-256). Woodland Hills, CA: Glencoe/McGraw-Hill. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 418-421]. Mason, OH: Thomson/South-Western. Clow, K.E, & Baack, D. (2010). Integrated advertising, promotion, and marketing communications (4th ed.) [pp. 8-12]. Upper Saddle River, NJ: Prentice Hall. Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [pp. 404-412]. Upper Saddle River, NJ: Prentice-Hall. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp.146, 355]. Mason, OH: Thomson South-Western. O’Guinn, T.C., Allen, C.T., & Semenik, R.J. (2009). Advertising & integrated brand promotion (5th ed.) [pp. 265, 279]. Mason, OH: South-Western Cengage Learning. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Perreault, W. D., Cannon, J. P., & McCarthy, E. J. (2008). Basic marketing: A marketing strategy planning approach (16th ed.) [pp. 382-391]. Boston: McGraw-Hill/Irwin. Soloman, M. R., Marshall, G. W., & Stuart, E. W. (2008). Marketing: Real people, real choices (5th ed.) [p. 387-398, 551]. Upper Saddle River, NJ: Pearson Prentice Hall. Software/ Online

Government of Alberta. (1999-2010). Developing a promotional plan. Retrieved June 7, 2010, from http://www.smallbusinessnotes.com/operating/marketing/promotionplan.html PPAI. (1994-2010). Seven steps to a successful promotional campaign. Retrieved June 7, 2010, from http://www.ppa.org/Buyer/How+Do+I/Develop+A+Promotional+Plan/ Portland Cement Association. (n.d.). D- I-Y Promotion plan: 6 steps to success using a simple promotion plan. Retrieved April 19, 2011, from http://www.cement.org/HOMES/DIY/DIY_Plan_Manual.pdf Sixteen—principles of promotion planning. Retrieved April 19, 2011, from http://fds.oup.com/www.oup.co.uk/pdf/bt/palmer/im16prom.pdf Slideshare.net (n.d.). Promotion and IMC planning and strategy. Retrieved June 7, 2010, from http://www.slideshare.net/dhruvjainonline/imc-planning-strategypresentation SmallBusinessNotes.com (n.d.). Promotion plan. Retrieved April 19, 2011, from http://www.smallbusinessnotes.com/marketing-your-business/promotionplan.html StartUpStudents.com. (2010). 5 steps to a rock solid promotional plan. Retrieved April 19, 2011, from http://www.startupstudents.com/2007/07/23/5-steps-to-arock-solid-promotional-plan/ Stettner, M. (n.d.). How to establish a promotional mix. Retrieved June 7, 2010, from http://www.esmalloffice.com/SBR_template.cfm?DocNumber=PL12_3600.htm Texas Education Agency. (n.d.). Lesson plan—the promotional mix: Describe the seven steps in the promotional planning process. Retrieved June 7, 2010, from http://www.cte.unt.edu/marketing/curriculum/PromoMix/PromoMix_all111008.pdf Waymore, M. (2010). The building blocks of successful integrated marketing communications plan. Retrieved June 7, 2010, from http://hubpages.com/hub/The-Building-Blocks-of-Succesful-IMC-Plan Whitehead, L. (2008, January 1). How to create a promotional plan. Retrieved April 19, 2011, from http://www.adbase.com/Blog/MarketingPlanning/PromotionalPlan Wirth, R. (2010). Integrated marketing communication. Retrieved June 7, 2010, from http://www.entarga.com/mktgplan/imc.htm

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Rubric: Promotional Plan Criteria Content

Professional

Experienced

Developing

Novice



All components were complete and in writing.



All elements of the plan were addressed in writing, but some aspects needed further description.



Most of the plan’s elements were in writing; the missing elements diminished the plan’s effectiveness.



Many of the plan’s components lacked sufficient detail to take action or were missing.



Theme was interesting, creative, and appealed to the senses.



Theme was interesting and creative, but did not appeal to the senses.



The plan used a stock theme and did not appeal to the senses.



Theme was inappropriate for aspects of the plan.



A clear, comprehensive description of the target market was supported by rationale for its selection.



A clear description of the target market was provided but was not supported by rationale.



Description of the target market was difficult to follow/understand.



Description of the target market was too sketchy/vague to be useful.



Promotion strategies were clearly explained for each market segment.



Wordy promotional strategies were provided for each market segment.



Vague promotion strategies were provided for each market segment.



Promotion strategies were missing or lacked sufficient detail to be useful.



All resources needed were clearly identified.



All critical resources were identified.



Some critical resources were not identified.



No needed resources were identified.



The plan clearly, but succinctly, described how promotions supported the business image.



Connections between the plan and the business image were slightly vague.



Plan did not mention how promotion would support the business image.



The promotional plan conflicted with the business image.



Creative activities to implement each promotional strategy clearly identified who, what, when, where, and how.



Activities to implement each strategy were listed but not fully described.



Implementation activities were missing for a few strategies.



Activities to implement promotional strategies were too vague/sketchy to guide implementation or were not included.

The information communicated by the promotional plan 60 points

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Rubric: Promotional Plan Criteria

Appropriateness

Professional

Experienced

Developing

Novice



All needed calculations were computed accurately.



Minor errors in calculation did not affect the plan’s usefulness.



Calculation errors forced minor adjustments in the entire plan.



Calculations contained so many errors that the plan was not useful.



The evaluation plan clearly defined needed measurements and milestones.



Evaluation plan identified measurements and milestones but did not describe them fully.



Evaluation plan identified vague or insufficient measurements and milestones that would make it difficult to evaluate the promotional plan in action.



No evaluation plan was included.



Timeline was realistic.



Timeline for implementation was slightly loose/tight.



Timeline for implementation was too tight to give proper attention to activities or so loose activities seemed unconnected.



Timeline was far too short/ long for reasonable completion of activities, and objectives and strategies were obscure, unchallenging, unreachable, or too loosely related to be effective.



Objectives were clear, measurable, challenging, and reachable.



Objectives were clear, challenging, and measurable, but difficult to reach.



Objectives were stated in measurable terms.



Objectives were unclear and not stated in measurable terms.



Realistic objectives, strategies, and tactics related to and supported the mission and each other.



Realistic objectives, strategies, and tactics were loosely linked to the mission statement and each other.



Objectives, strategies, and tactics were related to each other, but not to the mission statement.



Objectives, strategies, and tactics were too vague to be useful and unrelated to the mission statement.

Suitability, compatibility of one part of the plan with all the others 40 points

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Rubric: Promotional Plan Criteria

Professional

Experienced

Developing

Novice



Resources needed to communicate with the targeted audience were reasonable, realistic, and appropriately allocated to strategies and media.



Resources needed to communicate with the targeted audience were reasonable, and appropriately allocated to strategies but not to media.



Resources needed to communicate with targeted audience seemed under/over estimated with random allocation to strategies and media.



Resources needed to communicate with targeted audience were grossly over/under estimated, with no allocation to strategies or media.



Budget was presented in proper format and complete detail.



Minor errors in budget format and detail did not affect the total package.



Errors in budget format and detail could potentially cause serious budgetary problems.



Budget was difficult to follow due to format and lack of adequate detail.



Selected mix, media, and media vehicles were appropriate for reaching target market and for achieving promotional objectives.



Selected mix, media, and media vehicles were appropriate for reaching large parts of the targeted audience and achieving most promotional objectives.



Selected mix, media, and media vehicles severely limited reaching the targeted market or achieving promotional objectives.



Selected mix, media, and media vehicles were unable to achieve promotional objectives or reach the targeted market.



Promotional tactics supported marketing objectives and were desirable and realistic in relation to the budget.



Promotional tactics supported marketing objectives and were desirable and realistic if there were no unforeseen expenses.



Promotional tactics did not support the marketing objectives or would far exceed the budget.



Promotional tactics were omitted or were not in line with the budget.



Selected promotional activities aligned with and reinforced the company’s image.



Some selected promotional activities aligned with the company’s image.



Selected promotional activities did not relate to the company’s image.



Selected promotional activities created an image at odds with desired image.

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Section 5

Planning Guide Sheets

Page 5-156

Knowledge/ Skill Statement

Understands the concepts, systems, and tools needed to gather, access, synthesize, evaluate, and disseminate information for use in making business decisions

Instructional Area

Market Planning

Performance Element

Employ marketing-information to develop a marketing plan.

Performance Indicator

Explain the nature of sales forecasts (MP:013)

Level

Specialist

SCANS

Resources 2; Information 5-8; Systems 15; Basic Skills 1-3,5-6; Thinking Skills 89,12

21st Century Skills

Critical Thinking & Problem Solving 1,2,3,4,5; Information Literacy 1

Objectives

a. b. c. d. e. f. g. h.

Performance Activity

Define the following terms: sales forecast, qualitative forecasting, and quantitative forecasting. Identify items/factors for which sales forecasts can be used. Discuss the time frame of sales forecasts. Explain factors affecting how far ahead a business should predict sales. Distinguish between qualitative and quantitative forecasting methods. Describe factors affecting the sales forecast. Explain business activities in which sales forecast information is used as a planning tool. Explain reasons that not all businesses use sales forecasts.

Imagine that it is five years in the future, and your new venture has become a successful business. Not too long from now, your busiest season of the year will begin, and it is time to plan accordingly. Your sales forecast will be affected by the need to hire additional personnel, the competition from similar businesses, the increased disposable income of many customers, and growing demand for your newest product. Determine if each of these changes is external or internal, and predict whether each change will increase or decrease your sales forecast amount. Explain your reasoning to a classmate, and insert your findings into your VIP portfolio.

Resources Textbooks

Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 361-362, 392-394). Woodland Hills, CA: Glencoe/McGrawHill. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 232-233). New York: McGraw-Hill. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 267-270). Mason, OH: South-Western Cengage Learning. Burrow, J.L. (2006). Marketing (2nd ed.) [pp. 538-539]. Mason, OH: Thomson/South-Western. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 244-245, 765]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

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Etzel, M.J., Walker, B.J., & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 161-164, 186, 251].Boston: McGraw-Hill/Irwin Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (pp. 35, 599-600, 765, 767). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [p. 37]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 381-382]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [pp. 301, 323-325]. Mason, OH: Thomson South-Western Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 154-155, 336]. Mason, OH: Thomson South-Western. Perreault, W. D., Cannon, J. P., & McCarthy, E. J. (2008). Basic marketing: A marketing strategy planning approach (16th ed.) [pp. 579-584]. Boston: McGraw-Hill/Irwin. Spiro, R.L., Rich, G.A., & Stanton, W.J. (2008). Management of a sales force (12th ed.) [pp. 359-368]. New York, McGraw-Hill Irwin. Tanner, J.F.; Honeycutt, E.D.; & Erffmeyer, R.C. (2009). Sales management: Shaping future sales leaders (pp. 301-309). Upper Saddle River, NJ: Prentice Hall. Software/ Online

Answers.com. (n.d.). Sales forecasts. Retrieved April 19, 2011, from http://www.answers.com/topic/sales-forecast Fastlinksolutions. (n.d.) Sales forecasting. Retrieved April 19, 2011, from http://www.fastlinksolutions.co.uk/calculat.htm Mason, N. (2006, July 26). Forecasting techniques, part 1: Quantitative forecasting. Retrieved April 19, 2011, from http://www.clickz.com/clickz/column/1695851/forecasting-techniques-partquantitative-methods Mason, N. (2006, August 8). Forecasting techniques, part 2: Qualitative forecasting. Retrieved April 19, 2011, from http://www.clickz.com/clickz/column/1700695/forecasting-techniques-partqualitative-methods Morgan, L. (2010, May 15). Factors affecting sales forecasting. Retrieved April 19, 2011, from http://www.ehow.com/list_6518339_factors-affecting-salesforecasting.html tutor2u.net (n.d.). Sales forecasting. Retrieved April19, 2011, from http://tutor2u.net/business/marketing/sales_forecasting.asp Statistical Forecasting. (2006). Importance of sales forecasting. Retrieved April 19, 2011, from http://www.statisticalforecasting.com/importance-salesforecasting.php Virtual Advisor. (2009). Conduct a sales forecast. Retrieved April 19, 2011, from http://www.va-interactive.com/inbusiness/editorial/sales/ibt/sales_fo.html

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-158

Knowledge/ Skill Statement

Understands the concepts, systems, and tools needed to gather, access, synthesize, evaluate, and disseminate information for use in making business decisions

Instructional Area

Market Planning

Performance Element

Employ marketing-information to develop a marketing plan.

Performance Indicator

Forecast sales for marketing plan (MP:014)

Level

Manager

SCANS

Resources 2; Information 5-8; Systems 15; Basic Skills 1-3,5-6; Thinking Skills 89,12

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 2; Reason Effectively 1; Use Systems Thinking 1; Make Judgments and Decisions 1, 4; Solve Problems 1, 2; Communicate Clearly 1; Access and Evaluate Information 1, 2; Use and Manage Information 1, 2, 3; Apply Technology Effectively 1

Objectives

a.

b. c. d. e. f. g. h. i.

Performance Activity

Define the following terms: sales forecast, top-down approach, bottom-up approach, jury of executive opinion, Delphi technique, sales force composite, and survey of buyer intentions. Describe approaches to forecasting sales. Discuss methods of forecasting sales. Describe advantages and disadvantages associated with each forecasting method. Explain factors that should be considered in choosing a forecasting method. Describe external factors that affect sales forecasts. Explain internal factors that affect sales forecasts. Describe procedures for preparing a sales forecast. Demonstrate how to forecast sales.

Note to the Instructor: Review and present the Forecasting Sales briefing (pp. 5-160 to 5-166) to students in a lecture or discussion format. Participate in a small-group activity to forecast sales for a school-based enterprise. Share the group’s forecast with the class. Select an approach for forecasting sales for your business, and forecast sales. Use a software program to create a bar graph depicting forecasted sales for the first 12 months of operation. Discuss your graph with a business professional, and submit it to your instructor for review. Insert your sales forecast into your VIP portfolio.

Resources Textbooks

Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 267-270). Mason, OH: South-Western Cengage Learning. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 156-157]. Mason, OH: Thomson South-Western.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

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Perreault, W. D., Cannon, J. P., & McCarthy, E. J. (2008). Basic marketing: A marketing strategy planning approach (16th ed.) [pp. 585-586]. Boston: McGraw-Hill/Irwin. Spiro, R.L., Rich, G.A., & Stanton, W.J. (2008). Management of a sales force (12th ed.) [pp. 359-368]. New York, McGraw-Hill Irwin. Tanner, J.F.; Honeycutt, E.D.; & Erffmeyer, R.C. (2009). Sales management: Shaping future sales leaders (pp. 301-309). Upper Saddle River, NJ: Prentice Hall. Software/ Online

American-business.org. (n.d.). Sales forecasting. Retrieved April 19, 2011, from http://american-business.org/731-sales-forecasting.html Blair, R. (2008, July 29). Working together: Bottom up and top down forecasting. Retrieved April 19, 2011, from http://www.steelwedge.com/blog/workingtogether-bottom-up-and-top-down-forecasting.html Elliott, T. (n.d.). Three methods of sales forecasting. Retrieved April 19, 2011, from http://sbinfocanada.about.com/od/cashflowmgt/a/salesforecast.htm Management Innovations. (2008, December 11). Methods of sales forecasting. Retrieved April 19, 2011, from http://managementinnovations.wordpress.com/2008/12/11/methods-of-salesforecasting/ Roos, D. (2011). How sales forecasting works. Retrieved June 27, 2011, from http://communication.howstuffworks.com/sales-forecasting.htm Slideshare.net. (n.d.). Chapter 3: Planning, sales forecasting, and budgeting. Retrieved April 19, 2011, from http://www.slideshare.net/itsvineeth209/ch3planning-sales-forecasting-and-budgeting Stellwagen, E. (n.d.) Forecasting 101: Going beyond automatic forecasting — part 3: improving your forecasting with top-down models. Retrieved April 19, 2011, from http://www.forecastpro.com/Trends/forecasting101January2009.html The Houston Chronicle (2011). Methods and techniques of sales forecasting. Retrieved April 19, 2011, from http://smallbusiness.chron.com/methodstechniques-sales-forecasting-4693.html

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Learning the Basics about Sales Forecasts

Briefing: Forecasting Sales

 A sales forecast is a prediction of what a firm’s sales will be during a specific future time period.

 Sales forecasts can be short-term, intermediate, or long-term in nature.  Business managers and owners use sales forecasts frequently when making plans for their businesses. Sales forecasts help them to determine: o o o o o

Approaches to Forecasting

How much to buy What new items to offer How many workers are needed What prices to charge Whether promotion is needed

Before choosing a method for forecasting sales, businesses must decide which forecasting approach to take. These approaches are referred to as the:

 Top-down approach: In this approach, also known as the breakdown



Categories of Forecasting Methods

Page 5-160

approach, the sales forecast is prepared for the company as a whole. Then, the forecast is broken down into forecasts for specific products, salespersons, territories, product lines, departments, etc. Bottom-up approach: In this approach, also know as the build-up approach, the sales forecast is prepared by starting with separate forecasts for specific products, salespersons, territories, etc. Then, these individual forecasts are combined into a forecast for the entire company. For example, a shoe company might gather forecasts for each line of shoes or for each salesperson’s territory and combine the data to forecast sales for the whole company.

Quantitative Forecasting:

 Quantitative methods of forecasting sales are based on the results of gathering 



and analyzing all kinds of numerical market data. Numerical data may come from internal sources such as: o Sales records o Past product/market research o Customer surveys that the company has on hand Numerical data such as economic trends, population changes, consumer spending, and industry forecasts come from external sources such as government reports, business publications, and trade associations.

Qualitative Forecasting:

 Qualitative, or judgmental, forecasting methods are based on expert opinion and personal experience.

 The company prepares its sales forecasts by asking knowledgeable people  

such as experts in the field, sales personnel, customers, and company executives. These individuals base their predictions on what they have seen happen in the past as well as no current observations of the economy or of the industry. This method is especially common when sufficient historical data isn't available, i.e., for a new business or a less-established market environment.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Methods of Forecasting Sales

Briefing: Forecasting Sales

Page 5-161

Quantitative methods: There are many, many different quantitative methods of forecasting sales. Unfortunately, many of these methods are highly sophisticated. For that reason, we are not going to focus on them in this course. Instead, we are going to focus on the qualitative methods that many small- and medium-sized businesses use to forecast sales Qualitative methods:

 Jury of Executive Opinion o

This qualitative method gathers opinions from a group of company executives that meets together to predict sales. o The executives’ predictions are averaged so that the forecast is a composite of their points of view. o Advantages:  Based on reliable, inside opinion  Quick and easy to use o Disadvantages:  Results depend on executives’ skills  All predictions carry equal weight, which is a problem if some executives’ predictions are not as relevant/accurate as others

 Delphi Technique o This method, also called the expert survey, is a variation of the jury of executive opinion.

o It involves company executives and outside experts such as university professors, consultants, or industry analysts.

o It is based on the assumption that several experts can arrive at a better forecast than one.

o In the Delphi method, predictions are made secretly and then averaged

o

o

together. The results of the first poll are sent to the experts, who are asked to respond with a second opinion. The process is repeated until a very narrow, firm median is agreed upon. Advantages:  Can prevent social pressure and groupthink  Can prevent forceful individuals from dominating others  Can prevent time-consuming discussions or arguments  Can gather opinions from those who won’t speak out in groups Disadvantages:  Takes a lot of time to complete multiple rounds of the process  Can be expensive

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Briefing: Forecasting Sales

Page 5-162

 Sales force composite o This method gathers opinions from the sales force. o Each salesperson forecasts his/her sales for a future period. o The sales analyst then adds those forecasts together to get the sales force composite forecast for the period. o Advantages:  Accurate forecasts for individual products (The sales force works directly with customers and understands the demand for certain products.)  Higher sales totals (When the sales force predicts its own sales, sales personnel are more motivated to achieve those numbers.)  Inexpensive to use  Provides detailed information o Disadvantages:  Lacks a long-range view (The sales force may not have enough information about the company’s future plans to accurately predict longterm sales.)  Sales force resentment due to having to take time away from selling to prepare sales forecasts  Forecasts that benefit sales force (A salesperson may forecast sales lower than s/he thinks can be achieved to be sure the forecast is met.)  Survey of buyer intentions o This forecasting method gathers information about consumers’ plans to purchase products. o Analysts ask customers (via telephone, personal contact, or questionnaire) what and how much they intend to purchase in the future. o This information is gathered to create sales estimates for individual products. o Then, these estimates are combined to forecast overall sales for the company. o Advantages:  Reasonably accurate forecasts (The forecasts are based on information received from actual users of the product.)  Easy to control costs (The way in which the surveys are administered is chosen by the company and can be very inexpensive.)  Outside information is available (For example, The Quarterly Summary of Buying Intentions publishes surveys of consumer buying intentions obtained by the U.S. Bureau of the Census.)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Sales Forecasting: The Process

Briefing: Forecasting Sales

Page 5-163

The steps to follow to prepare a sales forecast include: 1. Gather the data that you will use. o

First, look at the past.  Gather sales figures for individual products or product lines and the company’s total sales figures.  Show whether product and overall sales have been increasing or decreasing.  Compare sales by selling periods. Which times of the year usually have the largest total sales?  Show sales trends for individual products. For example, Target would look at sales of shoes separately from sales of lamps.  Compare sales forecasts of years past with actual sales. Have the company’s forecasting techniques worked well or are there modifications to be made?  Note: If a business is new and does not have prior sales data to analyze, forecasters should study the past sales of similar businesses. This information is available from industry publication, government reports, and trade associations.

o

Next, look at what is going on now.  External changes. These are changes occurring outside the business over which the business has no control but could have an affect on the company’s sales (e.g., a new law that restricts the time of day that a restaurant may sell alcoholic beverages). Forecasters must collect information about changes in such areas as: i. The competition. Has the number of competitors increased or decreased? Are there new competitive activities that will affect sales? For example, has a competitor dropped prices? ii. The market. Have your customers (or anything about them) changed? Is the makeup of your trading area changing? For example, has the mall in which your store is located recently lost any stores? iii. The economy. What is the state of the economy in your market? In your state? Nation? The following economic information is useful when preparing sales forecasts: Gross national product, levels of personal income, employment/unemployment numbers, inflation, consumer spending, and total sales.  Internal changes. Changes that are going on within the business are under its control. Sales forecasters should gather data about such types of internal changes as: i. Marketing changes. Have there been changes in your price? Product? Promotional plan? How your product is distributed? ii. Operational changes. Examples of operational changes include enlarging or remodeling a business or adding a parking lot. iii. Staff changes. Has the size of the sales force remained the same? Has management changed?

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Briefing: Forecasting Sales

Page 5-164

2. Determine the amount by which your sales increased or decreased last year. o o

Use the data that you collected to determine your sales for the prior two years. Next, determine the difference between the two years’ sales (i.e., subtract the first year’s sales from last year’s sales; if your answer is positive, your sales increased; if your answer is negative, your sales decreased).

3. Determine the percent of increase or decrease. o

To determine the percent of increase or decrease, divide the amount of sales increase/decrease by the sales for the first year.

4. Add outside predictions of increases in sales for your trading area from positive economic forecasts, population growth, reduced competition, etc. o

For example, if experts are forecasting that the economy and/or population will grow, add the percent of predicted growth to the company’s percent of increase/decrease in sales.

5. Subtract outside predictions of decreases in sales from negative economic forecasts, reductions in population, increased competition, etc. o

For example, if you learn that a new competitor is expected to reduce your sales, subtract the percent of reduction in sales from your company’s percent of increase/decrease in sales.

6. Convert your final forecast percentage into a dollar figure. o o

Multiply the percent of increase/decrease by last year’s sales. If you expect sales to increase, add your answer to last year’s sales. If you expect sales to decrease, subtract your answer from last year’s sales.

Note: Keep in mind that estimating your sales will be an inexact science. Don’t rely too heavily on your projections. If you’re going to err, err on the conservative side. It’s better to be pleasantly surprised by higher than projected sales versus being caught off-guard by lower than predicted sales.

An Example

Let’s develop a sales forecast using the following data: Sales from last year: $1,300,000 Sales from two years ago: $1,550,000 Other data gathered:  The population in the company’s area is forecasted to increase by 0.5%.  The employment rate is forecasted to decrease by 3%.  A new competitor has joined the market and is supported by a heavy advertising campaign. This competitor is expected to take 5% of the company’s sales. Since we already have our data, we can jump right into step two of the sales forecasting process, which is to determine the amount by which sales increased or decreased. To do this, we need to subtract the sales for two years ago from last year’s sales ($1,300,000 - $1,550,000 = -$2 50, 000). Since our answer is negative, our sales decreased by $250,000. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Briefing: Forecasting Sales

Page 5-165

Next, determine the percent of decrease by dividing our answer by the sales for two years ago (-$250,000 / $1,550,000 = -0.16 = -16%). The sales decreased by 16%. Now, we need to add outside predictions of increases in sales to the calculated decrease in sales. In this case, the only outside prediction of a sales increase is a 0.5% increase in population, so our calculation would be -16% + 0.5% = -15.5%. Following this step, we need to subtract the outside predictions of decreases. These predictions are a forecasted 3% decrease in employment and an estimated 5% decrease in sales due to a new competitor (-15.5 % - 3% - 5% = -23.5%). Sales are forecasted to drop by 23.5%. Finally, convert the final forecast percentage into a dollar figure. Multiply the percent of decrease by last year’s sales (23.5% X $1,300,000 = $305,500). Finally, subtract your answer from last year’s sales, since sales are forecasted to decrease ($1,300,000 - $305,500 = $994,500). So, our sales forecast for the coming year is $994,500.

Giving It a Try

Here are two other scenarios for students to work through: Scenario #1 Sales from last year: $105,000 Sales from two years ago: $100,000 Other data gathered:  The economy is expected to grow by 2% in the coming year.  The number of consumers in your trading area is expected to increase by 5%.  A new competitor is expected to reduce your sales by 5%. Scenario #2 Sales from last month: $1,200 Sales from two months ago: $800 Other data gathered:  The number of consumers in your trading area is expected to increase by 2%.  A new competitor is expected to reduce your sales by 8%.

Answer Key

Scenario #1 Sales from last year: $105,000 Sales from two years ago: $100,000 Other data gathered:  The economy is expected to grow by 2% in the coming year.  The number of consumers in your trading area is expected to increase by 5%.  A new competitor is expected to reduce your sales by 5%. First, subtract the sales for two years ago from last year’s sales ($105,000 $100,000 = $5,000). Sales increased by $5,000. Next, determine the percent of increase by dividing our answer by the sales for two years ago ($5,000 / $100,000 = 0.05 = 5%). The sales increased by 5%.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Briefing: Forecasting Sales

Page 5-166

Now, we need to add outside predictions of increases in sales to the calculated increase in sales (5% + 2% + 5% = 12%). Following this step, we need to subtract the outside predictions of decreases (12% - 5% = 7%). Sales are predicted to increase by 7%. Finally, convert the final forecast percentage into a dollar figure. Multiply the percent of increase by last year’s sales (7% X $105,000 = $7,350). Finally, add your answer to last year’s sales, since sales are forecasted to increase ($105,000 + $7,350 = $112,350). Our sales forecast for the coming year is $112,350. Scenario #2 Sales from last month: $1,200 Sales from two months ago: $800 Other data gathered:  The number of consumers in your trading area is expected to increase by 2%.  A new competitor is expected to reduce your sales by 8%. First, subtract the sales for two months ago from last month’s sales ($1,200 - $800 = $400). Sales increased by $400. Next, determine the percent of increase by dividing our answer by the sales for two months ago ($400/ $800 = 0.5 = 50%). The sales increased by 50%. Now, we need to add outside predictions of increases in sales to the calculated increase in sales (50% + 2% = 52%). Following this step, we need to subtract the outside predictions of decreases (52% - 8% = 44%). Sales are predicted to increase by 44%. Finally, convert the final forecast percentage into a dollar figure. Multiply the percent of increase by last month’s sales (44% X $1,200 = $528). Finally, add your answer to last month’s sales, since sales are forecasted to increase ($1,200 + $528 = $1,728). Our sales forecast for the coming month is $1,728.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 5

Planning Guide Sheets

Page 5-167

Knowledge/ Skill Statement

Understands the concepts, systems, and tools needed to gather, access, synthesize, evaluate, and disseminate information for use in making business decisions

Instructional Area

Market Planning

Performance Element

Employ marketing-information to develop a marketing plan.

Performance Indicator

Set marketing goals and objectives (MP:015)

Level

Manager

SCANS

Resources 1; Information 5-7; Systems 15; Basic Skills 1-6; Thinking Skills 8-9

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 3; Critical Thinking and Problem Solving 1-5; Communication and Collaboration 1; Information Literacy 1; Initiative and Self-Direction 4; Productivity and Accountability 1

Objectives

a. b. c. d. e. f.

Performance Activity

Identify broad-based marketing goals for your business, and prepare objectives to support them. Use a word-processing program to record the information. Discuss the marketing goals and objectives with a classmate or with a business partner. Modify them, as needed. Insert the marketing goals and objectives into your VIP portfolio.

Discuss the purposes of marketing goals and objectives. Explain the relationship between marketing goals and overall business goals. Describe characteristics of effectively stated marketing objectives. Discuss the relationship between marketing goals and marketing strategies. Identify questions to ask to assist in setting marketing goals. Demonstrate procedures for setting marketing goals and objectives.

Resources Textbooks

Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 206-207). Woodland Hills, CA: Glencoe/McGraw-Hill. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (p. 64). Mason, OH: South-Western Cengage Learning. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [p. 26]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Etzel, M.J., Walker, B.J., & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 161-164, 186, 251].Boston: McGraw-Hill/Irwin Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (pp. 3435). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 232-235]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 390-391]. New York: McGraw-Hill Irwin. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [p. 302]. Mason, OH: Thomson South-Western Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 154-155, 336]. Mason, OH: Thomson South-Western. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Perreault, W. D., Cannon, J. P., & McCarthy, E. J. (2008). Basic marketing: A marketing strategy planning approach (16th ed.) [pp. 579-584]. Boston: McGraw-Hill/Irwin. Software/ Online

Business Owner’s Toolkit. (1995-2011). Marketing goals and objectives. Retrieved April 19, 2011, from http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P03_8050 Front Page Public Relations. (1989-2011). Creating marketing goals and objectives. Retrieved April 19, 2011, from http://www.frontpagepr.com/marketing/creating_written_internet_marketing_go als_and_objectives.asp Invisible CMO. (n.d.). What’s the difference between goals, objectives, strategy and tactics? Retrieved April 19, 2011, from http://invisiblecmo.com/2009/09/15/whats-the-difference-between-goalsobjectives-strategy-and-tactics/ Oakes, S. (n.d.). How to set marketing objectives easily. Retrieved April 19, 2011, from http://www.m4bmarketing.com/set-marketing-objectives/ SmallBusinessNotes.com. (n.d.). Marketing plan: Marketing objectives and strategies. Retrieved April 18, 2011, from http://www.smallbusinessnotes.com/starting-a-business/marketing-planmarketing-objectives-and-strategies.html The Chartered Institute of Marketing. (n.d.). Write your marketing plan: Your marketing objectives. Retrieved April 19, 2011, from http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1075313260&type= RESOURCES tutor2u. (n.d.). Marketing planning: Setting marketing objectives. Retrieved April 19, 2011, from http://tutor2u.net/business/marketing/planning_setting_objectives.asp

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Knowledge/ Skill Statement

Understands the concepts, systems, and tools needed to gather, access, synthesize, evaluate, and disseminate information for use in making business decisions

Instructional Area

Market Planning

Performance Element

Employ marketing-information to develop a marketing plan.

Performance Indicator

Select marketing metrics (MP:016)

Level

Manager

SCANS

Information 5, 7; Systems 15, 17; Basic Skills 1-3, 5-6; Thinking Skills 8, 12; Personal Qualities 13

21st Century Skills

Critical Thinking and Problem Solving 1-3; Communication and Collaboration 1; Information Literacy 1; Productivity and Accountability 1

Objectives

a. b. c. d.

e. f.

g.

h.

i. j. k. l. m.

Performance Activity

Define the following terms: marketing metrics, marketing dashboard, navigational, and evaluative. Explain reasons for selecting and using marketing metrics. Distinguish between navigational metrics and evaluative metrics. Explain key customer-acquisition metrics (e.g., awareness levels, purchasedecision drives, rate of customer acquisition, market share, acquisition costs, etc.). Discuss common customer-retention metrics (e.g., retention rate, abandonment rate, brand loyalty, lifetime value [LTV], etc.). Describe common product metrics (e.g., usability, satisfaction versus expectations, first-time user experience, awareness, purchase rate, price, profit impact, etc.). Describe key financial metrics (e.g., revenue, gross profit, net profit, return on sales [ROS], return on investment [ROI], return on marketing investment [ROMI], etc.). Describe common promotional metrics (e.g., reach, frequency, Gross Rating Points [GRPs], impressions, Cost per Thousand [CPM], coupon redemption rates, costs for coupons and rebates, cost per click, accuracy of coverage, media impressions, etc.). Explain pricing metrics (e.g., optimal price, price premium, percent good value, etc.). Discuss typical metrics criteria (e.g., business relevance, measurability, controllability, reportability, trackability, etc.). Explain the importance of quality, rather than quantity, in a marketing dashboard. Describe common methods used to select marketing metrics. Demonstrate procedures for selecting marketing metrics.

Interview a marketing manager to find out what marketing metrics s/he uses. Determine the reasons that the measures are preferred and their strengths and weaknesses. Discuss your findings with the class.

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Use a spreadsheet program to create a table containing four columns with the headings of “Metric,” “Construction,” “Cautions,” and “Purpose.” In the first column, identify specific metrics that you will use to evaluate marketing efforts and progress. In the “Construction” column, explain how each metric is calculated or determined. In the “Cautions” column, identify complications, weaknesses, or drawbacks often associated with that particular metric. Finally, in the “Purpose” column, explain the significance of the metric. In other words, explain how that metric can help you, what it can tell you, what it measures, etc. After selecting your marketing metrics, share your work with a business partner, SCORE representative, or your instructor. Explain your marketing metric selections to the individual, and obtain her/his feedback. Modify your table as necessary, and insert it into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 297-299, 388-392]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (p. 113). Woodland Hills, CA: Glencoe/McGraw-Hill. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 245-252). New York: McGraw-Hill. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 250-251, 318, 331, 515-518, 549-552). Mason, OH: South-Western Cengage Learning. Davis, J. (2007). Measuring marketing: 103 key metrics every marketer needs. Hoboken, NJ: John Wiley & Sons. Farris, P.W.; Bendlle, N.T.; Pfeifer, P.E.; & Reibstein, D.J. (2006). Marketing metrics: 50+ metrics every executive should master. Upper Saddle River, NJ: Wharton School Publishing Pearson Education. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp.196, 497498, 519-521]. New York: McGraw-Hill Irwin. Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [pp. 57-58, 438-439, A-12, A-14–A-14]. Upper Saddle River, NJ: Prentice-Hall. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [p. 341]. Mason, OH: Thomson South-Western. Mullins, J.W., Walker, O.C., Jr., & Boyd, H.W., Jr. (2008). Marketing management: A strategic decision-making approach (6th ed.) [pp. 485-493, 495-501]. New York: McGraw-Hill Irwin. Perreault, W. D., Cannon, J. P., & McCarthy, E. J. (2008). Basic marketing: A marketing strategy planning approach (16th ed.) [pp. 527, 533, 540-541, 591, 640-641]. Boston: McGraw-Hill/Irwin. Soloman, M. R., Marshall, G. W., & Stuart, E. W. (2008). Marketing: Real people, real choices (5th ed.) [pp. 48, 54, 59, 132, 165, 193, 316, 365, 387, 389, 412, 417, 422, 448, 457, 460, 521, 541]. Upper Saddle River, NJ: Pearson Prentice Hall.

Software/ Online

Kaiser, N. (2010, April 8). Making your marketing dashboard relevant. Retrieved April 19, 2011, from http://www.npost.com/blog/2010/04/08/making-yourmarketing-dashboard-relevant/ Patterson, L. (2010, June 11). Do your marketing metrics pass the “so-what” test? Retrieved April 19, 2011, from http://www.customerthink.com/blog/do_your_marketing_metrics_pass_the_so _what_test

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Roy, J. (n.d.). Marketing metrics made simple: Advertising metrics. Retrieved April 19, 2011, from http://www.marketing-metrics-made-simple.com/advertisingmetrics.html Roy, J. (n.d.). Marketing metrics made simple: Getting started. Retrieved April 19, 2011, from http://www.marketing-metrics-made-simple.com/gettingstarted.html Roy, J. (n.d.). Marketing metrics made simple: Marketing metrics list. Retrieved April 19, 2011, from http://www.marketing-metrics-madesimple.com/marketing-metrics-list.html Roy, J. (n.d.). Marketing metrics made simple: Measuring what they did. Retrieved April 19, 2011, from http://www.marketing-metrics-made-simple.com/whatthey-did.html Roy, J. (n.d.). Marketing metrics made simple: Measuring what they thought. Retrieved April 19, 2011, from http://www.marketing-metrics-madesimple.com/what-they-thought.html Roy, J. (n.d.). Marketing metrics made simple: PR metrics. Retrieved April 19, 2011, from http://www.marketing-metrics-made-simple.com/pr-metrics.html Roy, J. (n.d.). Marketing metrics made simple: Return on investment (ROI). Retrieved April 19, 2011, from http://www.marketing-metrics-madesimple.com/return-on-investment.html Taylor, S. (2004, November 2). Five fundamentals for useful marketing metrics. Retrieved April 19, 2011, from http://www.marketingprofs.com/articles/2004/1316/five-fundamentals-foruseful-marketing-metrics

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Knowledge/ Skill Statement

Understands the concepts, systems, and tools needed to gather, access, synthesize, evaluate, and disseminate information for use in making business decisions

Instructional Area

Market Planning

Performance Element

Employ marketing-information to develop a marketing plan.

Performance Indicator

Set marketing budget (MP:017)

Level

Manager

SCANS

Resources 2; Information 5-8; Systems 15-16; Technology 18; Basic Skills 1-6; Thinking Skills 8-9; Personal Qualities 13

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 3; Critical Thinking and Problem Solving 1-3, 5; Communication and Collaboration 1; Information Literacy 1; ICT Literacy 1-2; Initiative and Self-Direction 4; Productivity and Accountability 1

Objectives

a. b. c. d. e. f. g.

Performance Activity

Discuss the reasons for establishing marketing budgets. Describe ways in which marketing budgets can be used. Explain considerations in determining how much to spend on marketing. Identify techniques for setting marketing budgets. List information sources for industry averages to use in setting marketing budgets. Explain the need to prioritize marketing activities when setting marketing budgets. Demonstrate procedures for setting a marketing budget.

Evaluate the marketing activities you plan to conduct for your business. Access the website www.BizStats.com or a hardcopy of The Almanac of Business and Financial Ratios by Leo Troy, and determine representative industry ratios for the marketing activities. Use a spreadsheet to set up the marketing budget. Discuss the budget with a business partner, your instructor, or a SCORE representative to determine its viability. Revise the budget, if needed. Insert the completed marketing budget into your VIP portfolio.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [p. 288]. Boston: Houghton Mifflin Company. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (p. 109). New York: McGraw-Hill. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 513-515). Mason, OH: South-Western Cengage Learning. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [p. 422]. New York: McGraw-Hill Irwin. Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [pp. 428, A-9]. Upper Saddle River, NJ: Prentice-Hall. Perreault, W. D., Cannon, J. P., & McCarthy, E. J. (2008). Basic marketing: A marketing strategy planning approach (16th ed.) [p. 591]. Boston: McGrawHill/Irwin. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Soloman, M. R., Marshall, G. W., & Stuart, E. W. (2008). Marketing: Real people, real choices (5th ed.) [pp. 56, 394-396, 412]. Upper Saddle River, NJ: Pearson Prentice Hall. Software/ Online

BusinessKnowledgeSource.com. (2003-2010). How to determine what marketing technique is best for your business. Retrieved April 19, 2011, from http://www.businessknowledgesource.com/marketing/how_to_determine_what _marketing_technique_is_best_for_your_business_025716.html BusinessMarketingPlan.net. (2011). Allocating your marketing budget. Retrieved April 19, 2011, from http://www.businessmarketingplan.net/marketing-planbasics/allocating-your-marketing-budget.html Demand Metric. (2010, February 23). Preparing an accurate marketing budget. Retrieved April 19, 2011, from http://blog.demandmetric.com/2010/02/23/preparing-an-accurate-marketingbudget/ Developing your marketing budget. (n.d.). Retrieved April 19, 2011, from http://www.jpec.org/handouts/jpec32.pdf Hall, A. (n.d.). How to develop a marketing plan budget. Retrieved April 19, 2011, from http://www.ehow.com/how_2334588_develop-marketing-plan-budget.html Hipp, M. (2007, December 6). 9 popular ways to determine your marketing budget. Retrieved April 19, 2011, from http://www.smallfuel.com/blog/entry/popularways-to-determine-your-marketing-budget/ Jacksack, S. (n.d.). Setting a marketing budget. Retrieved April 19, 2011, from http://www.score.org/m_pr_11.html Johnson, H. (2010, September 27). How to build your marketing budget. Retrieved April 19, 2011, from http://www.inc.com/guides/2010/09/how-to-build-yourmarketing-budget.html Schwatz, N.E. (2002-2011). How to design and effective marketing and communications budget (case study). Retrieved April 19, 2011, from http://gettingattention.org/articles/195/planning-budgets/nonprofit-marketingbudget.html Zahn, D. (2006, October 16). Creating a marketing budget. Retrieved April 19, 2011, from http://ezinearticles.com/?Creating-A-Marketing-Budget&id=329481

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Knowledge/ Skill Statement

Understands the concepts, systems, and tools needed to gather, access, synthesize, evaluate, and disseminate information for use in making business decisions

Instructional Area

Market Planning

Performance Element

Employ marketing-information to develop a marketing plan.

Performance Indicator

Develop marketing plan (MP:018)

Level

Manager

SCANS

Resources 2; Information 5-8; Systems 15; Basic Skills 1-3,5-6; Thinking Skills 89,12

21st Century Skills

Financial, Economic, Business and Entrepreneurial Literacy 3; Creativity and Innovation 2; Critical Thinking and Problem Solving 1-5; Communication and Collaboration 1; Information Literacy 1; ICT Literacy 1-2; Initiative and Self-Direction 4; Productivity and Accountability 1; Leadership and Responsibility 1

Objectives

a. b. c. d. e. f. g. h.

Performance Activity

Assume that you are a member of a marketing management team, and the VP of marketing assigns the team an existing product or product line and asks the team to develop a marketing plan focused on market penetration strategies to increase sales of the product in current markets. Develop the plan so that it can be implemented in a two-year time period. Present a written plan, and make an oral presentation to the VP of marketing.

Explain the importance of a marketing plan. Describe needed characteristics of a marketing plan’s content. Discuss the need for the compatibility of one part of the plan with all other parts. Describe process for developing marketing strategies. Explain the role of communication in developing a marketing plan. Describe the organization of a marketing plan. Explain procedures for developing marketing plans. Demonstrate procedures for developing marketing plans.

Develop the best marketing mix for the target market(s) selected for your business. Write a rationale for your decisions. Review the marketing mix with a business partner or SCORE adviser. Use a word-processing program to prepare the final document, and insert it into your VIP portfolio.

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Develop a marketing plan for your business that incorporates the following components: I. II. III. IV. V. VI. VII. VIII.

Executive Summary Situation Analysis Desired Target Market Marketing Goals and Objectives Marketing Strategies and Programs Financial Plans Performance and Implementation Appendices

Budget and forecast data should be created in a spreadsheet program. Share the marketing plan with another student to obtain feedback. Answer questions posed by the student. Insert the completed marketing plan into your VIP portfolio for further use during your 12th-grade entrepreneurship course. Note to the Instructor: A rubric suitable for evaluating each student’s marketing plan is provided on pp. 5-177 and 5-180.

Resources Textbooks

Allen, K.R. (2007). Growing and managing a small business: An entrepreneurial perspective (2nd ed.) [pp. 287-296]. Boston: Houghton Mifflin Company. Allen, K.R. & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 204-227). Woodland Hills, CA: Glencoe/McGraw-Hill. Bamford, C.E., & Bruton, G.D. (2011). Entrepreneurship: A small business approach (pp. 220-224, 310). New York: McGraw-Hill. Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (pp. 60-73). Mason, OH: South-Western Cengage Learning. Clark, B., Sobel, J., & Basteri, C.G. (2010). Marketing dynamics: Teacher’s edition (2nd ed.) [pp. 25-30, 61, 183, 748]. Tinley Park, IL: Goodheart-Willcox Company, Inc. Farese, L. S., Kimbrell, G., & Woloszyk, C. A. (2009). Marketing essentials (pp. 3236, 747-748). Woodland Hills, CA: Glencoe/McGraw-Hill. Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [p. 235]. Mason, OH: Thomson/South-Western. Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 385-392]. New York: McGraw-Hill Irwin. Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [pp. 54, A-1 – A9]. Upper Saddle River, NJ: Prentice-Hall. Kuratko, D.F. (2009). Entrepreneurship: Theory, process, practice (8th ed.) [p. 357]. Mason, OH: Thomson South-Western. Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 130, 140-161]. Mason, OH: Thomson South-Western. Perreault, W. D., Cannon, J. P., & McCarthy, E. J. (2008). Basic marketing: A marketing strategy planning approach (16th ed.) [pp. 41-43, 553-559, 588-592]. Boston: McGraw-Hill/Irwin.

Software/ Online

Banta Corporation. (2004, February). Developing effective multi-channel marketing strategies. Retrieved April 19, 2011, from http://www.thedma.org/whitepapers/MultiChannelMarketingFeb04.pdf

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Cunningham, J.E. (2008, November 6). Business planning : Marketing plan basics. Retrieved April 19, 2011, from http://www.associatedcontent.com/article/1187154/business_planning_marketin g_plan_basics.html Fleishner, M. (n.d.). 10 key components of a marketing plan. Retrieved April 19, 2011, from http://www.businessknowhow.com/marketing/marketing-plan.htm IASWCD. (n.d.). Easy steps for developing a marketing plan. Retrieved April 19, 2011, from http://iaswcd.org/district_tools/pdfs/EasyStepsMarkPlan.pdf KnowThis.com. (1998-2011). Components of the marketing plan. Retrieved April 19, 2011, from http://www.businessknowhow.com/marketing/marketing-plan.htm Murray, J. (n.d.). How do I create a marketing plan for my business start-up? Retrieved April 19, 2011, from http://biztaxlaw.about.com/od/businessstartupsteps/f/marketingplan.htm MyEntre.net. (n.d.). Components of a marketing plan. Retrieved April 19, 2011, from http://www.jpec.org/handouts/jpec33.pdf Myers, R. (n.d.). Elements of a good marketing plan. Retrieved April 19, 2011, from http://www.melissadata.com/enews/marketingadvisor/articles/0902c/1.htm Pierce, K. (2009, November 20). SMB series—7 steps in developing a marketing plan. Retrieved April 19, 2011, from http://onlinebusiness.volusion.com/articles/developing-a-marketing-plan Slideshare.net. (n.d.). Developing marketing strategies and plans. Retrieved April 19, 2011, from http://www.slideshare.net/naveedtaji/developing-marketingstrategies-and-plans

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Rubric: Marketing Plan Criteria Content

Professional

Experienced

Developing

Novice



All components of plan were complete and in writing.



All elements of the plan were addressed in writing, but some aspects needed further description.



Most of the plan’s elements were in writing; the missing elements diminished the plan’s effectiveness.



Many of the plan’s components lacked sufficient detail to take action or were missing.



A clear, comprehensive description of the target market was supported by rationale for its selection.



A clear description of the target market was provided but not supported by rationale for its selection.



Description of the target market was difficult to follow/understand.



Description of the target market was too sketchy/vague to be useful.



Complete, relevant information about strengths, weaknesses, opportunities, and threats was provided.



Most relevant strengths, weaknesses, opportunities, and threats were clearly identified.



Sketchy information was provided about strengths, weaknesses, opportunities, and threats.



Obvious and critical-toaddress strengths, weaknesses, opportunities, and threats were omitted from the plan.



Reasonable, clear product, price, place, and promotion strategies were provided for each market segment.



Appropriate, but wordy, product, price, place, and promotion strategies were provided for each market segment.



Vague, but appropriate, product, price, place, and promotion strategies were provided for each market segment.



Product, price, place, and promotion strategies for many market segments lacked sufficient detail, were unrealistic, or missing.



Resources needed for each strategy were clearly identified.



Most resources were clearly identified.



Some critical resources needed for implementation were not listed.



Resources needed to implement each strategy were too incomplete to be useful or were missing altogether.



Activities to implement each strategy clearly identified who, what, where, and how.



Activities to implement each strategy were listed but not described fully.



Implementation activities were missing for a few strategies.



Activities to implement strategies were too vague/sketchy to guide implementation or were not included.

The information communicated by the marketing plan 40 points

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Rubric: Marketing Plan Criteria

Appropriateness

Professional

Developing

Novice



All needed calculations were computed accurately.



Minor errors in calculation did not affect the plan’s usefulness.



Calculation errors forced minor adjustments to the plan.



Calculations contained so many errors that the plan was not useful.



Evaluation plan clearly defined measurements and milestones.



Evaluation plan identified measurements and milestones but did not describe them fully.



Evaluation plan identified vague or insufficient measurements and milestones that would make it difficult to evaluate the marketing plan in action.



No evaluation plan was included.



Budget figures were realistic for implementing and achieving goals.



Errors in budget figures did not limit implementing and achieving goals.



Budget figures had to be reworked to implement and achieve goals.



Dollar amount of budget was unspecified or was unrealistic for implementing and achieving goals.



Goals/objectives were clear, measurable, challenging, and reachable.



Goals/objectives were clear, challenging, measurable, but difficult to reach.



Goals/objectives were stated in measurable terms.



Goals/objectives were unclear and not stated in measurable terms.



Realistic goals/objectives, strategies, and tactics related to and supported the mission statement and each other.



Realistic goals/objectives, strategies, and tactics were presented that were loosely linked to the mission statement and each other.



Goals/objectives, strategies, and tactics were presented, and their relationship to the mission statement and each other could only be projected.



Sketchy or loose goals/objectives, strategies, and tactics seemed unrelated to the mission statement or each other.



The number of goals was realistic so that strategies and resources could be focused on their achievement.



The number of goals was high/low, but did not diminish the effectiveness of the total plan.



The number of goals was high/low enough to diminish the plan’s effectiveness.



The plan included too many goals to be achievable, or too few to be effective.

Suitability; compatibility of one part of the plan with all other parts 30 points

Experienced

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Rubric: Marketing Plan Criteria

Professional

Experienced

Developing

Novice



Target market was large enough to support projected sales.



Target market was large enough to support projected sales if everything went according to plan.



Size of target market allowed for absolutely no unforeseen problems.



Target market was too small to support projected sales.



Clearly stated evaluation plan provided accurate measurement of the marketing plan.



Clearly stated evaluation plan provided a general measurement of the marketing plan.



Loosely stated evaluation plan indicated how the effectiveness of the marketing plan would be measured.



Evaluation plan was too vague to be useful.



Timeline for implementation was realistic.



Timeline for implementation was slightly loose/tight.



Timeline for implementation was too tight to give proper attention to activities or so loose activities seemed unconnected.



Timeline for implementation of plan was totally unreasonable.



Sales forecast was realistically projected.



Sales forecast seemed slightly ambitious/conservative.



Sales forecast seemed quite ambitious/conservative.



Sales forecast seemed unreasonable in view of the target markets and pricing strategies.

Communication





Ideas were expressed clearly with only a few words being difficult to understand.



Both ideas and words required much effort to understand.



Ability to express oneself so as to be understood by others

Ideas were expressed clearly in language that was easy to understand.

Ideas were vague and elusive, and language was difficult to understand.



Accurate visual aids, including charts and graphs, supported, focused, clarified, and reinforced information given.



Accurate visual aids, including charts and graphs, added some support to the information given.



Visual aids, including charts and graphs, were related to information given but did not clarify or reinforce it.



Visual aids, including charts and graphs, detracted from presentation and raised many questions.

15 points

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Rubric: Marketing Plan Criteria

Organization

Professional

Developing

Novice



Plan was neat, grammatically correct, and error-free.



Plan was neat but contained minor errors that did not detract from total plan.



Plan contained slight smudges, blurred letters, and grammatical errors that were distracting.



Plan was messy, with many errors in spelling and grammar.



Main points were easy to follow and logical with points building on each other.



Main points were generally easy to follow and logical.



Main points were logical but difficult to follow.



Main points were so difficult to follow that their logic could not be determined, or they were illogical.



Sections were clearly identified, and material was easily located.



Sections were clearly identified and only a few items were difficult to locate.



Some sections were not identified, and several items were difficult to locate.



Sections ran together or were not identified, and material was difficult to locate.



Supporting documentation was complete and clearly labeled.



Supporting documentation was clearly labeled, but some items were missing.



Some supporting documentation was missing, and some was inaccurately labeled.



Supporting documentation was not provided.

How the information is put together; the flow of the marketing plan 15 points

Experienced

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Page 5-180

Using Project-Based Learning and Projects Section 6

Section 6

Overview

Using Project-Based Learning

Page 6-2

Project-Based Learning Research Many studies support the outcomes of project-based learning. Some areas that have been investigated include learning content within a relevant context, meeting the needs of different styles of learners, and inquiry as a foundation for life-long learning. Numerous sources for research are cited in this appendix. These sources have been divided into sections identifying where the source was found. Many were on the websites of nonprofit organizations dedicated to project-based learning and/or to educational advancement. Be sure to periodically check these websites (listed at the start of each section) for new research on this up-andcoming field.

Resources

 Compiled by Buck Institute for Education, www.bie.org. Ravitz, J. (2008). Introduction: Summarizing Findings and Looking Ahead to a New Generation of PBL Research. Interdisciplinary Journal of Problem-based Learning, 3(1), 4-11. Available at: http://docs.lib.purdue.edu/ijpbl/vol3/iss1/2/ Walker, Andrew and Leary, Heather (2008). "A Problem Based Learning Meta Analysis: Differences Across Problem Types, Implementation Types, Disciplines, and Assessment Levels,"Interdisciplinary Journal of Problem-based Learning: Vol. 3: Iss. 1, Article 3. Available at: http://docs.lib.purdue.edu/ijpbl/vol3/iss1/3 Strobel, Johannes and van Barneveld, Angela (2008). "When is PBL More Effective? A Meta-synthesis of Meta-analyses Comparing PBL to Conventional Classrooms," Interdisciplinary Journal of Problem-based Learning : Vol. 3: Iss. 1, Article 4. Available at: http://docs.lib.purdue.edu/ijpbl/vol3/iss1/4  Compiled by Novel Approach Consulting Group, www.novelapproachpbl.com. Grant, Michael (2002). Getting a Grip on Project-Based Learning Theory, Cases and Recommendations. Meridien (5):1. Overview:This article examines the theoretical foundations of project-based learning, particularly constructivism and constructionism, and notes the similarities and differences among implementations, including project-based science. Gubels, D, Dochy, F., Van Den Bossche, P., & Segers, M. (2005). Effects of Problem-Based Learning: A Meta-Analysis from the Angle of Assessment. Review of Education Research. (75):1 Overview: This is a rigorous meta-analysis of dozens of studies. While it focuses on assessment in particular, it does provide readers with a few defining principles of PBL. Thomas, John (2000). AutoDesk Research Review White Paper. Overview: This review examines research related to a teaching and learning model popularly referred to as "Project-Based Learning" (PBL). All of the research on ProjectBased Learning has taken place in the past ten years and most of it in just the last few years. Since there is not a large body of PBL research, the review is inclusive rather than selective.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 6

Using Project-Based Learning

Page 6-3

Wolff, Susan (2002). Design Features for Project-Based Learning. Design Share.Com (2002). http://www.designshare.com/Research/Wolff/Project_Learning.htm. Accessed 814-05. Overview: This publication is a condensed version of a doctoral research study by Susan Wolff entitled "Relationships among People and Spaces: Design Features for the Optimal Collaborative, Project-Based Learning Experience." Although the study was directed primarily at the community college level, the findings of the study are pertinent to all levels of education and have implications for physical learning environments for other types of active learning processes. The findings from the study included a synthesis of 32 design features of the physical learning environment that support and enhance collaborative, projectbased learning.

▪ Compiled by Edutopia Staff, http://www.edutopia.org/project-basedlearning-research published 11/1/2001 A growing body of academic research supports the use of project-based learning in schools as a way to engage students, cut absenteeism, boost cooperative learning skills, and improve test scores. Those benefits are enhanced when technology is used in a meaningful way in the projects. Following are synopses of a range of studies on project-based learning: British Math Study A three-year 1997 study (To view this study, you must be a registered user on the Edweek site. Registration is free.) of two British secondary schools -- one that used open-ended projects and one that used more traditional, direct instruction -found striking differences in understanding and standardized achievement data in mathematics. The study by Jo Boaler, now associate professor of education at Stanford University, found that students at the project-based school did better than those at the more traditional school both on math problems requiring analytical or conceptual thought and on those considered rote, that is, those requiring memory of a rule or formula. Three times as many students at the project-based school received the top grade achievable on the national examination in math. Challenge 2000 In a five-year study, researchers at SRI International found that technology-using students in Challenge 2000 Multimedia Project classrooms outperformed nontechnology-using students in communication skills, teamwork, and problem solving. The Center for Learning in Technology researchers, led by Bill Penuel, found increased student engagement, greater responsibility for learning, increased peer collaboration skills, and greater achievement gains by students who had been labeled low achievers. The project conducted a performance assessment designed to measure students' skills in constructing a presentation aimed at a particular audience. Students from Multimedia Project classrooms outperformed comparison classrooms in all three areas scored by researchers and teachers: student content, attention to audience, and design. The Multimedia Project involves completing one to four interdisciplinary multimedia projects a year that integrate real-world issues and practices.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 6

Using Project-Based Learning

Page 6-4

Cognition and Technology Group A 1992 study of 700 students from 11 school districts in Tennessee found that students doing projects using videotaped problems over a three-week period performed better in a number of academic areas later in the school year. The study, by the Cognition and Technology Group at Vanderbilt University, examined student competence in basic math, word problems, planning capabilities, attitudes, and teacher feedback. Students who had experience in the project work performed better in all categories. The study appeared in Educational Psychologist, 27 (3): 291-315. Co-nect A 1999 study by the Center for Research in Educational Policy at the University of Memphis and University of Tennessee at Knoxville found that students using the Co-nect program, which emphasizes project-based learning and technology, improved test scores in all subject areas over a two-year period on the Tennessee Value-Added Assessment System. The Co-nect schools outperformed control schools by 26 percent. Does It Compute? Analyzing data from the math portion of the 1996 National Assessment of Educational Progress test given to students nationwide, Educational Testing Services researcher Harold Wenglinsky found that the effectiveness of computers in the classroom depended on how they were used. In his report, "Does It Compute?" Wenglinsky found that if computers were used for drill or practice, they typically had a negative effect on student achievement. If they were used with realworld applications, such as spreadsheets, or to simulate relationships or changing variables, student achievement increased. Data were drawn from the samples of 6,227 fourth graders and 7,146 eighth graders. Expeditionary Learning Outward Bound Three elementary schools in Dubuque, Iowa, showed significant test score gains after incorporating the Expeditionary Learning Outward Bound (ELOB) program. At ELOB schools, students conduct three-to-six-month-long studies of a single topic with an emphasis on learning by doing. After two years in the program, two of the three schools advanced from "well below average" to "well above the district average" on the Iowa Test of Basic Skills. One elementary school raised its average score from the 39th to the 80th percentile. After four years in the program, student scores were "above the district average in almost every area." Separate analyses showed similar test score gains in ELOB programs in Denver, Boston, and Portland, Maine. Laptops Since 1996, ROCKMAN ET AL, an independent research firm in San Francisco, has studied the impact of widespread use of laptop technology on teaching and learning. The focus of the firm's multiyear studies has been on dozens of public and private K-12 schools participating in a pilot laptop program sponsored jointly by the Microsoft and Toshiba corporations. Through both observation and feedback from laptop-using teachers and students, researchers have documented a shift from lectures and other teacher-centered forms of delivery to lessons that are more collaborative and project-oriented. Teachers, researchers note, become facilitators in project-oriented classrooms, with students increasingly assuming the role of directors of their own learning.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 6

Using Project-Based Learning

Page 6-5

In a 1998 report, researchers note that three-fourths of the teachers who participated in a ROCKMAN ET AL survey reported that project-based instruction had increased since the introduction of the laptops in their classrooms. Among the many reported benefits of this project-based approach to learning are greater student engagement, improved analytic abilities, and a greater likelihood to apply high-order thinking skills. Laptop-using students also performed better on a ROCKMAN ET AL-administered writing examination. The research firm did not, however, identify significant differences in the standardized test scores of laptop-using students. Researchers offered two possible explanations for the lack of significant improvement in this area: 1. Standardized tests are not designed to reflect the types of learning that laptops support. 2. Because the students had been using their laptops for less than two years, it might have been too soon to see noticeable gains in areas that are covered by standardized tests. Successful School Restructuring A five-year study by University of Wisconsin-Madison researchers found that structural school reform works only under certain conditions: 1. Students must be engaged in activities that build on prior knowledge and allow them to apply that knowledge to new situations. 2. Students must use disciplined inquiry. 3. School activities must have value beyond school. In their report, "Successful School Restructuring," the researchers at Wisconsin's Center on Organization and Restructuring of Schools found that even innovative school improvements, such as portfolio assessment and shared decision making, are less effective without accompanying meaningful student assignments based on deep inquiry. Reseachers analyzed data from more than 1,500 elementary, middle, and high schools and conducted field studies in 44 schools in 16 states between 1990 and 1995. Union City, New Jersey School District The Center for Children and Technology at the Education Development Center, Inc., monitored a two-year technology trial that was first implemented in the district in September of 1993. The study found that after multimedia technology was used to support project-based learning, eighth graders in Union City, New Jersey, scored 27 percentage points higher than students from other urban and special needs school districts on statewide tests in reading, math, and writing achievement. The study also found a decrease in absenteeism and an increase in students transferring to the school. Four years earlier, the state had been considering a takeover because Union City failed in 40 of 52 indicators of school effectiveness.

Source: Foundations for the Road Ahead: Project-Based Learning and Information Technologies http://www.iste.org/Content/NavigationMenu/Research/Reports/The_Road_A head_Background_Papers_1997_/Project-Based_Learning.htm#Research Research Supporting Project-Based Learning Project-based learning is a versatile approach to instruction that can readily be used in conjunction with other approaches. Teachers who make extensive use of project-based learning are blending a number of educational ideas—each supported by substantial research. This section contains very brief summaries of some of the areas of educational research that underlie project-based learning.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 6

Using Project-Based Learning

Page 6-6

Constructivism is a widely supported educational theory that rests on the idea that students create their own knowledge in the context of their own experiences (Fosnot, 1996). Constructivism focuses on students being actively engaged in "doing," rather than passively engaged in "receiving" knowledge. Project-based learning can be viewed as one approach to creating learning environments in which students construct personal knowledge. Howard Gardner and David Perkins are the co-directors of Project Zero at Harvard University, a large and long-continuing project that conducts research on ways to improve content, pedagogy, and assessment in education. Howard Gardner's theory of multiple intelligences, first put forth in 1983, supports the need for personalization of schooling (Gardner, 1995). He argues that each person has a number of different types of intelligence. For example, people have musical intelligence, linguistic intelligence, and logical-mathematical intelligence. Through appropriate training and experience, these various intelligences can be enhanced—a person can develop his or her own individual potentials. Gardner strongly supports the use of project-based learning as one approach to creating a learning environment that enhances each student's multiple intelligences. In his 1992 book, Smart Schools, David Perkins analyzes a number of different educational theories and approaches to education. His analysis is strongly supportive of Gardner's theory of multiple intelligences. Perkins' book contains extensive research-based evidence that education can be considerably improved by more explicit and appropriate teaching for transfer, focusing on higher-order cognitive skills, and the use of project-based learning. Inquiry-based learning, or discovery-based learning, often involves hypothesis generation and testing. The emphasis may be on discovering specific facts or on developing a higher-order understanding of the topic and ideas being explored. Students are encouraged to develop curiosity as a habit, and to approach all learning with a disposition toward questioning and systematic investigation. Research indicates that hands-on, inquiry-based instruction is generally more effective than traditional didactic presentation in improving problem solving ability in particular subject domains (Helgeson, 1992, p. 53). Project-based learning often makes use of inquiry-based teaching methods. Project-based learning frequently includes teams of students engaged in cooperative learning and collaborative problem solving as they work to complete a project. Cooperative learning has been shown to be effective in improving academic and social skills; however, successful cooperative learning requires careful organization, and sometimes explicit training in collaboration and communication (Johnson, 1986; Johnson & Johnson, 1989). Project-based learning provides an authentic environment in which teachers can facilitate students increasing their skills in cooperative learning and collaborative problem solving. One can draw a parallel between project-based learning and process writing. Many teachers are familiar with presenting writing as a process, and are aware that the steps of process writing—brainstorming, organizing ideas, developing a draft, obtaining feedback, revising, and publishing—are similar to those required in many other creative projects. In many cases, reports or computer-aided presentations created through process writing constitute a project's final product.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 6

Using Project-Based Learning

Page 6-7

Additional support for project-based learning can be found in the various "standards" reports that have been developed by organizations such as the National Academy of Sciences and the National Council of Teachers of Mathematics. Such reports stress the need for students being engaged in authentic and multidisciplinary tasks—which are hallmarks of many project-based learning environments.

Managing Project Based Learning: Principles from the Field John R. Mergendoller, Ph.D. ([email protected]) Buck Institute for Education 18 Commercial Boulevard Novato, California 94949 Abstract This investigation describes classroom management techniques used by teachers who were expert in the use of project-based learning instructional strategies. The authors interviewed 12 teachers, and subjected their descriptions of classroom practice to a qualitative analysis. Fifty-three classroom management principles emerged, grouped under seven themes and 18 sub-themes. Themes included: Time Management, Getting Started, Establishing a Culture that Stresses Student Self-Management, Managing Student Groups, Working with Others Outside the Classroom, Getting The Most Out of Technological Resources, and Assessing Students and Evaluating Projects. Researchers are encouraged to include the wisdom of experienced teachers in future research on effective classroom practices. For complete article, visit http://www.bie.org

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 6

Introduction to Projects

Projects for Principles of Entrepreneurship

Page 6-8

Instead of using traditional classroom instructional methods (i.e., lectures), teachers can incorporate hands-on projects that become the instructional method through which students acquire understanding of the content. To that end, learning outcomes from various instructional areas are grouped together as the curricular backbone of multiple projects that could be incorporated into the Principles of Entrepreneurship course. Students may address these learning outcomes simultaneously, rather than in the sequential manner occurring in traditional courses. The learning outcomes, therefore, are not specified for coverage during a specific week of the semester, but are tied to projects and can be acquired at any point during the project. In addition to the performance indicators addressed in each project, additional components are included to guide instruction. These components include: Project Title Each project is identified with a project title that captures the intent of the activity. The two projects provided in Section 6 of the Principles of Entrepreneurship course guide are: Marketing Plan Analysis Promo Blitz Overview A short summary of each project is provided. Timeframe A number of weeks for each project is specified to guide teachers in allocating class time for students to master the performance indicators and complete all project activities. The timeframes are flexible to allow teachers leeway with scheduling. Briefings For some topics, instructors should provide mini-lectures, referred to as Briefings. A topical outline for each Briefing is provided with the corresponding planning guide sheet in section 5. Entry Events To catch students’ attention and get them interested in the projects, an entry event has been recommended for each project. When appropriate, alternative ideas are provided for instructors to select what would be of most interest to their students and most feasible to implement at the local level. Driving Questions Each project addresses a “driving question” that encapsulates the purpose of the activity, the problem to be solved, or the question to be answered. Checkpoints These represent the various opportunities for student assessment: deliverables, quizzes, tests, and exams. Instructors should make every effort to adhere to the timeframe specified so that students have adequate time to master the performance indicators associated with projects.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 6

Projects for Principles of Entrepreneurship

Page 6-9

Project Title

Marketing Plan Analysis

Overview

The Marketing Plan Analysis acquaints students with marketing plans, their purposes, and their components. Students will select a marketing plan from http://www.mplans.com and then assess portions of it during this short project. Teams will analyze designated components of the selected marketing plan and answer the questions provided.

Timeframe

1 ½ weeks

Performance Indicators

Students should master the following performance indicators during the project through their research efforts or through briefings, identified with asterisks. The page numbers for the planning guide sheets are cited after each statement.  Explain the concept of marketing strategies (MP:001, MP LAP 2) (CS) (pp. 5-69 – 5-70)*  Explain the concept of market and market identification (MP:003; IM LAP 9, MP LAP 3) (CS) (pp. 5-74 – 5-76)*  Explain the nature of marketing plans (MP:007, MP LAP 1) (SP) (pp. 5-81 – 5-82)*

Briefings

To augment the project, briefings should be provided. Content for the briefings is provided on the page numbers identified after each topic. Topic Marketing Strategies Market & Market Identification Marketing Plans

Entry Event

Driving Question

Briefings pp. 5-71 – 5-73 pp. 5-77 – 5-80 pp. 5-83 – 5-84

Project a blank outline of the United States. Ask students to determine how far it is to Madison. When students start asking questions about which Madison, where the starting point is, etc., point out that it’s important for everyone to know where it is they’re going; otherwise, they won’t know when they’ve arrived. Explain that marketers need to know what their starting point is and where they’re headed, too. Determining these factors is part of the planning that needs to precede every action that marketers take. What and how do marketers plan?

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 6

Checkpoints

Projects for Principles of Entrepreneurship Details

Learning about Marketing Strategies

To help students to begin to understand what marketers plan, deliver the briefing on marketing strategies found on pages 5-71 – 5-73.

Learning about Market Identification

Discuss the idea that money is limited, so it’s crucial that marketers get the most bang for their buck when they develop their strategies. Explain that one way that marketers can do that is by targeting their strategies at the people most likely to buy their products. Deliver the briefing on markets and market identification that appears on pages 5-77 – 5-80.

Learning about and Selecting a Marketing Plan

Explain that marketers formalize their planning in a document known as a marketing plan. Overview the components of a marketing plan that are identified in the briefing on pages 5-83 – 5-84.

Page 6-10

Assessment

Divide the class into groups of four students each, and ask each group to scroll through the listing of sample marketing plans provided on the website http://www.mplans.com to select its favorite type of company whose marketing plan will be used throughout this project. Ask a representative from each group to tell the class which marketing plan was selected by the group. Write the name identified on the board. Record all names selected. Ask students to vote on the marketing plan to be used. Circle the name of the plan with the highest number of votes. Ask each student to print a copy of the selected marketing plan and to put it in a notebook or folder so that they can refer to it again. Discussing a Marketing Plan

Ask students to read the selected marketing plan so that each group can answer the questions found on the Marketing Plan Analysis handout (p. 6-11). Direct the groups to record their answers to the questions on the handout provided and to participate in a class discussion of the questions. When finished, each group should submit their work for review.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Complete/ Incomplete

Section 6

Handout: Marketing Plan Analysis

Page 6-11

Directions: Read the selected marketing plan, and as a group, answer the following questions about the company’s marketing strategies and target market(s), recording your responses in the spaces provided. 1.

What are the strategies the company plans to use that address the 4 Ps? Product

Place

Price

Promotion

2.

How would you change those strategies?

3.

Who is the business’s target market?

5.

How was the target market determined?

6.

What other target markets can you identify for the company?

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 6

Projects for Principles of Entrepreneurship

Page 6-12

Project Title

Promo Blitz

Overview

Promo Blitz acquaints students with types of promotion and the promotional mix. Students will work individually and in teams to examine types of promotion, gather and discuss examples of promotion, and identify the elements of a local business’s promotional mix. In addition, each student will keep a Promo Blitz journal in which to record her/his research throughout the project.

Timeframe

1 ½ weeks

Performance Indicators

Students should master the following performance indicators during the project through their research efforts. The page numbers for the planning guide sheets are cited after each statement.  Explain types of promotion (PR:002, PR LAP 4) (CS) (pp. 5-145 – 5-146)  Identify the elements of the promotional mix (PR:003, PR LAP 1) (CS) (pp. 5-147 – 5-148)  Explain types of advertising media (PR:007, PR LAP 3) (SP) (pp. 5-149 – 5-150)

Briefings

There are no briefings for this project.

Entry Event

Play the Dove Self-Esteem Fund television commercial Evolution for the students. The commercial can be found at http://www.campaignforrealbeauty.com.au/doveself-esteem-fund/default.asp. Explain to students that this commercial won two Grand Prix Cannes Advertising Awards at the International Advertising Festival in 2007. Ask students to talk about why they think that the commercial won two such prestigious awards. Then ask the driving question.

Driving Question

What methods do businesses use to promote their product(s) and themselves?

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 6

Checkpoints

Projects for Principles of Entrepreneurship Details

Page 6-13

Assessment

Advertising Section of the Promo Blitz Journal

Students are required to keep individual Promo Blitz journals in which to record their research on the different types of promotion. The first section of the journal (and the project) is about advertising. The Promo Blitz—Advertising handout (located on page 6-14) explains the first research assignment to the students and indicates individual journal questions that the student should answer after completing his/her research of advertising.

Journal Entry Rubric (pp. 6-17 – 6-18)

Group Discussion of Advertising

After completing her/his research and answering the individual journal questions, each student shares his/her examples of advertisements with his/her group. After all group members have shared, the group should discuss the team question on the Promo Blitz—Advertising handout.

Complete/ Incomplete

Sales Promotion Section of the Promo Blitz Journal

When finished with advertising, the students move on to sales promotion. The Promo Blitz—Sales Promotion handout (located on page 6-15) explains the research assignment to the students and indicates individual journal questions that the student should answer after completing his/her research of sales promotion.

Journal Entry Rubric (pp. 6-17 – 6-18)

Group Discussion of Sales Promotion

After completing her/his research and answering the individual journal questions, each student shares his/her examples of sales promotion with his/her group. After all group members have shared, the group should discuss the team questions on the Promo Blitz—Sales Promotion handout.

Complete/ Incomplete

PR/Publicity Section of the Promo Blitz Journal

When finished with sales promotion, the students move on to public relations/publicity. The Promo Blitz—PR/Publicity handout (located on page 6-16) explains the research assignment to the students and indicates individual journal questions that the student should answer after completing his/her research of public relations/publicity.

Group Discussion of PR/Publicity

After completing her/his research and answering the individual journal questions, each student shares his/her examples of public relations/publicity with his/her group. After all group members have shared, the group should discuss the team questions on the Promo Blitz—PR/Publicity handout.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Journal Entry Rubric (pp. 6-17 – 6-18)

Complete/ Incomplete

Section 6

Directions

Handout: Promo Blitz—Advertising

Page 6-14

Today, the focus of the Promo Blitz is on advertising. Locate an example of advertising from each of the categories of advertising media listed below. If possible, cut out or print the advertisement and paste it in your Promo Blitz journal. (If you cannot physically put the advertisement in your journal, jot down a description of the ad in your journal.) Then answer the following journal questions for each advertisement on the corresponding page of your journal. After everyone in your group has done their individual research and writing, discuss your findings in detail with your teammates. Discuss the team question with your team members as well.

Advertising Media

The categories of advertising media are:  Publications  Broadcast Media  Direct Mail  Web  Out-of-Home Media  Other Media

Individual Journal Questions

1. 2. 3. 4.

Team Question

1. What trends do you think are affecting advertising media? 2. How are word of mouth marketing and direct marketing used in advertising?

What category of advertising media does this advertisement fall into? What specific type of advertising media is this advertisement? Is this an example of institutional or product promotion? If it is product promotion, is it an example of primary or secondary product promotion?

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 6

Directions

Handout: Promo Blitz—Sales Promotion

Page 6-15

Today, the focus of the Promo Blitz is on sales promotion. Locate an example of a sales promotion from each of the categories of sales promotion listed below. If possible, cut out or print the sales promotion and paste it in your Promo Blitz journal. (If you cannot physically put the sales promotion in your journal, jot down a description of it in your journal.) Then answer the following journal questions for each type of sales promotion on the corresponding page of your journal. After everyone in your group has done their individual research and writing, discuss your findings in detail with your teammates. Discuss the team questions with your team members as well.

Sales Promotion

Categories of sales promotion include:  Consumer Sales Promotions  Trade Sales Promotions  Business-to-Business Sales Promotions  Point-of-Purchase (POP) Displays

Individual Journal Questions

1. What category of sales promotion does this example fall into? 2. What specific type of sales promotion is this example?

Team Questions

1. 2. 3. 4. 5. 6.

What are some differences between advertising and sales promotion? Why do businesses use sales promotion? What are similarities and differences between coupons and rebates? How do contests, sweepstakes, and games differ? What trends do you think are affecting sales promotion? How are word of mouth marketing and direct marketing used in sales promotion?

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Section 6

Directions

Handout: Promo Blitz—PR/Publicity

Page 6-16

Today, the focus of the Promo Blitz is on public relations/publicity. Locate an example of a public relations/publicity tool specified in the list below. If possible, print the public relations/publicity tool and paste it in your Promo Blitz journal. (If you cannot physically put the public relations/publicity tool in your journal, jot down a description of it in your journal.) Then answer the following journal questions for each type of public relations/publicity on the corresponding page of your journal. After everyone in your group has done their individual research and writing, discuss your findings in detail with your teammates. Discuss the team questions with your team members as well.

Public Relations/ Publicity

Locate an example of a public relations/publicity tool that:  Communicates with a targeted audiences  Communicates P.R. messages to the media  Uses Internet technology

Individual Journal Questions

1. What is the purpose of this public relations/publicity tool? 2. What specific type of public relations/publicity tool or communication channel is this example?

Team Questions

1. What is the role of public relations/publicity in business? 2. What are some advantages and disadvantages associated with public relations/publicity? 3. How are word of mouth marketing and direct marketing used in public relations/publicity?

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Rubric: Journal Entry Criteria Content Description of different forms of promotion that could be used to inform, remind, or persuade customers

Professional

Experienced

Developing

Novice

 The information sufficiently summarized the issue/topic.

 Overall, the information adequately summarized the topic/issue.

 The information left some gaps in the issue/topic.

 The information failed to summarize the issue/topic.

 Conclusions reached were logical and fully supported by research.

 Conclusions reached were reasonable but lacked supporting documentation in a few cases.

 Conclusions reached were inconsistent in their logic and lacked supporting documentation.

 Questionable conclusions were reached that were not supported by the research.

 The conclusions were based on the most recent documentation available.

 The conclusions were based, overall, on current information.

 The conclusions were based on outdated information that was still relevant.

 The conclusions were based on outdated information that was no longer relevant.

 Ideas were expressed clearly in language that was easy to understand.

 Ideas were expressed clearly with only a few words being difficult to understand.

 Both ideas and words required much effort to understand.

 Ideas were vague and elusive, and language was difficult to understand.

 Report was neat, grammatically correct, and error-free.

 Report was neat but contained minor errors that did not detract from total report.

 Report contained slight smudges, blurred letters, and grammatical errors that were distracting.

 Report was messy, with many errors in spelling and grammar.

40 points

Communication Ability to express oneself so as to be understood by others 30 points

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Page 6-17

Rubric: Journal Entry (cont’d) Criteria Organization How the information is put together; the flow of the journal entry

Professional

Experienced

Developing

Novice

 Main points were easy to follow and logical with points building on each other.

 Main points were generally easy to follow and logical.

 Main points were logical but difficult to follow.

 Main points were so difficult to follow that their logic could not be determined, or they were illogical.

 Sections were clearly identified, and material was easily located.

 Sections were clearly identified and only a few items were difficult to locate.

 Some sections were not identified, and several items were difficult to locate.

 Sections ran together or were not identified, and material was difficult to locate.

 Supporting documentation was complete and clearly labeled.

 Supporting documentation was clearly labeled, but some items were missing.

 Some supporting documentation was missing, and some was inaccurately labeled.

 Supporting documentation was not provided.

30 points

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

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Appendix A Sample Semester Exams for Principles of Entrepreneurship

Semester One Exam 1. A business that fails to protect its employees from unnecessary risk or health hazards on the job may be sued for A. incompetence. C. libel. B. misrepresentation. D. negligence.

BL:001/3.06 2. Which of the following types of laws protects a business's inventions or written works from the unauthorized use by others: A. Income tax C. Consumer protection B. Intellectual property D. Product liability

BL:001/3.06 3. The primary reason that governments regulate business activities is to A. encourage businesses to expand their operations. B. limit the level of competition in the marketplace. C. protect the well-being of individuals and businesses. D. change international trade initiatives.

BL:001/3.06 4. The form of business ownership that can raise money easily is the A. partnership. C. sole proprietorship. B. corporation. D. limited partnership.

BL:006/3.06 5. A major advantage of a sole proprietorship is A. availability of capital. B. ease of start-up.

C. probability of success. D. sharing of decision making.

BL:006/3.06 6. A disadvantage of a general partnership is that each partner A. is liable for the business's losses. B. invests the same amount of capital. C. performs limited management duties. D. has responsibility for preparing the annual report.

BL:006/3.06 7. Which of the following is an example of a written business inquiry: A. A memo outlining an upcoming meeting agenda B. An e-mail requesting vendor pricing and discounts C. A form describing an employee's performance review D. A report summarizing annual financial information

CO:040/1.04 8. When writing a letter of inquiry, when should you identify the purpose of your letter? A. At the beginning of the letter B. After describing your company C. Once the recipient has agreed to meet with you D. After identifying what prompted your inquiry (such as an advertisement)

CO:040/1.04 9. What component is important to include in all types of inquiry letters? A. Contact information C. Project specifications B. Personal qualifications D. Attention-getting title

CO:040/1.04 10. What is one of the main reasons why small businesses are strongly promoted and supported by local government? A. They serve only their local communities. C. They may become a big business. B. They are owned by one person. D. They are important to the economy.

EC:065/1.01

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam 11. Which of the following is most likely to have a negative effect on domestic small-business growth: A. Involuntary tax reductions C. Low interest rates B. Restrictive loan policies D. Slow inflation

EC:065/1.01 12. Which of the following statements is true about entrepreneurship and small business growth: A. Trade regulations have very little effect on small-business growth. B. Many people start entrepreneurial ventures during times of economic recession. C. Small business start-ups are taxed at a higher rate than multinational companies. D. Consumer spending is a primary internal factor that influences entrepreneurial success.

EC:065/1.01 13. Jack, a manager, said to his staff, "I know that many of you think that this is a risky course of action. But, I've decided that we should proceed. If this is successful, it could greatly benefit the company. If it fails, I'll accept the consequences and work to find a new solution." What is Jack doing? A. Requesting that his staff support his decision B. Indicating that he doesn't think he's made a good decision C. Asking his staff to share the blame, if the action fails D. Accepting responsibility for his decision

EI:075/2.08 14. After Porter realized that he processed an order incorrectly, he waited too long to correct the problem. As a result, an incorrect item was shipped to the customer. Now, the customer will need to ship the item back to the warehouse, and Porter's company will need to pay extra charges to have the product returned. This situation illustrates that A. customers are likely to be very angry when employees make mistakes. B. employees should tell their supervisors about all problems as soon as they occur. C. the company has unrealistic expectations about Porter's ability to perform his job. D. an employee's decisions and actions can negatively impact others.

EI:075/2.08 15. What is often a positive result of accepting responsibility for a poor decision? A. You reinforce skeptical attitudes. C. You demonstrate self-importance. B. You control others' opinions. D. You gain others' respect.

EI:075/2.08 16. Entrepreneurial discovery is an important process in a free-enterprise economic system because an entrepreneur or small-business owner can A. satisfy an unmet demand. C. improve economic sanctions. B. form a technological monopoly. D. change legal requirements.

EN:001/2.01 17. Which of the following statements is true about entrepreneurial discovery: A. It ensures that start-up businesses have continuous funding. B. It's an ongoing process that facilitates a business's success rate. C. It provides entrepreneurs with professional development training. D. It's a way to determine the long-term profit that a start-up company can generate.

EN:001/2.01 18. The entrepreneurial discovery process requires knowledge and the recognition of a(n) A. economic crisis. C. market need. B. preventable accident. D. creative observation.

EN:002/2.01 19. Which of the following is an example of a demographic trend that has encouraged entrepreneurial discovery: A. Interest rate fluctuations C. Industry deregulation B. Increased cultural diversity D. Technological advancements

EN:002/2.01

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam 20. Which of the following is a global trend that might encourage an entrepreneur to consider international business opportunities: A. Higher allowances C. Enforceable trade agreements B. Lower tariffs D. Flexible currency rates

EN:003/2.03 21. When determining venture-creation opportunities, entrepreneurs must first A. obtain financing. C. identify staffing needs. B. conduct research. D. select a location.

EN:004/2.03 22. Which of the following processes helps aspiring entrepreneurs generate venture ideas: A. Financial planning C. Goal setting B. Decision making D. Creative thinking

EN:006/2.06 23. When generating ideas for new businesses, entrepreneurs often look for ways to A. rationalize spending. C. solve problems. B. increase liability. D. control outcomes.

EN:006/2.06 24. Which of the following is a characteristic of a well-conducted feasibility study: A. Subjective C. General B. Abbreviated D. Complete

EN:038/2.13 25. The primary purpose of a feasibility study is to answer which of the following questions: A. What are the opportunity costs of this project? B. What technology will be needed for this project? C. Should we proceed with this project? D. Is the business plan valid?

EN:038/2.13 26. An entrepreneur considers venture location and financial needs during the ____________ process. A. distribution C. implementation B. controlling D. planning

EN:007/2.09 27. Which of the following is an operational issue that entrepreneurs must consider when planning their businesses: A. Source of financing C. Production process B. Target market D. Direct competitors

EN:007/2.09 28. Which of the following is a tool that an entrepreneur develops to project sales for a new business venture: A. Marketing objectives C. Promotional budget B. Sales forecast D. Inventory report

EN:008/2.09 29. When planning for her new business, Janine allocates two percent of the company's estimated annual sales to web and newspaper advertising. Janine is developing a A. promotional budget. C. competitive analysis. B. sales report. D. publicity plan.

EN:008/2.09 30. Which of the following statements is true about business start-up requirements: A. Equipment is the least expensive requirement for a start-up business. B. New business owners usually need to register for patent protection. C. Purchasing a franchise is usually easy and inexpensive for start-up business owners. D. The financial needs to start a new business depend on the nature of the venture.

EN:009/2.11

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam 31. Costs of sales for a new manufacturing venture typically include A. trade show attendance, raw materials, and equipment. B. raw materials, equipment, and product inventory. C. trade show attendance, product inventory, and Internet access. D. Internet access, attorney fees, and sales lead lists.

EN:009/2.11 32. One-time start-up costs often include __________ fees. A. shipping and postage C. trade association B. incorporation D. website maintenance

EN:009/2.11 33. Regan is deciding if she is willing to give up a secure position with a well-known company so she can start a home-based business. Which of the following risks is Regan assessing: A. Career C. Physical B. Social D. Financial

EN:010/2.11 34. Emotional risks that many entrepreneurs face include A. marital tension and family problems. C. competition and difficult suppliers. B. unemployment and uncertain income. D. inflation and slow market acceptance.

EN:010/2.11 35. Which of the following sources of start-up information would you recommend to an entrepreneur looking for information about the average start-up and operating costs for a self-serve laundromat: A. Service Corps of Retired Executives C. Local chamber of commerce B. Coin laundry trade association D. Small Business Administration

MN:187/1.03 36. A reliable online source of general business start-up information is A. Wikipedia (www.wikipedia.org/wiki/Entrepreneurship). B. the Project Management Institute (www.pmi.org). C. the Small Business Administration (www.sba.gov). D. the National Retail Federation (www.nrf.com).

MN:187/1.03 37. Alaina needs advice and assistance in starting her new business venture, so she contacted the Service Corps of Retired Executives (SCORE). Jack, a SCORE volunteer, agreed to act as Alaina's guide in the business start-up process. Jack is serving as Alaina's A. intermediary. C. entrepreneur. B. apprentice. D. mentor.

MN:187/1.03 38. Marketing strategies are designed and implemented for the overall purpose of A. changing the image of the business. C. achieving planned goals. B. improving management techniques. D. increasing business profits immediately.

MP:001/3.01 39. Which of the following is a consideration in the place element of marketing: A. Offering warranties or guarantees C. Using sales promotion B. Choosing distribution channels D. Extending credit to customers

MP:001/3.01 40. Which of the following best describes the role of tactics in marketing strategies: A. Road maps C. General goals B. Specific actions D. Adaptable options

MP:001/3.01 41. Companies have been forced to pay more attention to the specific needs of consumers because of A. merchandising. C. automation. B. advertising. D. competition.

MP:003/3.02

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam 42. Procter & Gamble's decision to offer different types of soaps in a wide range of prices is an example of A. direct marketing. C. geographic segmentation. B. market segmentation. D. industrial marketing.

MP:003/3.02 43. When sellers offer one-size-fits-all products that will appeal to most buyers, they are using A. market segmentation. C. mass production. B. mass marketing. D. demographic segmentation.

MP:003/3.02 44. A business identifies a market that shares common characteristics on the basis of where people live and work, which is an example of market identification by __________ segmentation. A. demographic C. ethnicity B. geographic D. values

MP:004/3.04 45. Businesses that segment the market based on psychographics are grouping people according to their A. education. C. marital status. B. lifestyles. D. occupation.

MP:004/3.04 46. Identifying market segments helps a business to develop appropriate A. marketing strategies. C. organizational records. B. economic forecasts. D. leadership styles.

MP:004/3.04 47. When a business selects a target market, the most useful or desirable market segments to the business are those that are measurable and A. accessible. C. concentrated. B. undifferentiated. D. inflexible.

MP:005/3.04 48. Selecting a target market based on very specific criteria that limit the audience to a well-defined segment is an example of A. target auditing. C. income segmenting. B. market planning. D. niche marketing.

MP:005/3.04 49. When the Green Company selected its target market, it decided to ignore the segment differences and generate appeal with one offer. The company is using __________ marketing. A. isolated C. individual B. niche D. mass

MP:005/3.04 50. A marketing plan should outline the specific activities that the business will use to A. evaluate its sales policies. C. meet the needs of its employees. B. increase its buying power. D. achieve its marketing objectives.

MP:007/3.03 51. Which of the following is an important benefit of marketing plans: A. They ensure a yearly profit. C. They help recruit quality employees. B. They develop exciting products. D. They can help obtain funding.

MP:007/3.03 52. Where in a marketing plan would a business discuss how it plans to communicate with its customers? A. Marketing objectives C. Situation analysis B. Marketing strategies and programs D. Executive summary

MP:007/3.03

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam 53. Which of the following is a question that a business should answer about its target market while conducting a situational analysis: A. How are our financing methods affecting our company's growth? B. What are our customers buying? C. Are we operating at peak efficiency? D. Which shipping companies are we using?

MP:008/3.03 54. Which of the following situations presents a business threat to a company: A. A competitor obtains a bank loan for expansion. B. A competitor recalls a defective product. C. The government reduces interest rates. D. Sales for a specific product increase.

MP:008/3.03 55. Which of the following is an external threat that a company might identify while conducting a situation analysis: A. Declining unemployment C. Increasing GDP B. Falling interest rates D. Rising inflation rate

MP:008/3.03 56. Which of the following is a factor that businesses often consider when conducting a market analysis: A. Location of the test market C. Safety of the research process B. Size of the market next year D. Design of the questionnaire

MP:009/3.05 57. One of the purposes of conducting a market analysis is to develop a(n) A. operating budget. C. customer profile. B. distribution plan. D. management team.

MP:009/3.05 58. When a business conducts a market analysis and identifies territories, determines the possible buyers in the territories, and estimates the buyers' purchases, it is evaluating the A. segment's psychographics. C. potential media exposure. B. area's market potential. D. competitors' market share.

MP:009/3.05 59. What is a potential threat a manager might identify in a SWOT analysis? A. Growing government regulation C. Weak market image B. Economy rebounding D. Cost advantages

MP:010/3.05 60. Which of the following questions is it important to ask to determine the business's strengths when conducting a SWOT analysis: A. What economic trends are beneficial to us? C. Where are we making money? B. What are our competitors doing? D. What obstacles do we face?

MP:010/3.05 61. Which of the following is a question that a business might ask when it wants to evaluate its weaknesses: A. What resources do we lack? C. What markets have our competitors missed? B. What is our competition doing? D. What are our assets?

MP:010/3.05 62. One reason why it is often important for businesses to conduct a competitive analysis is to identify A. external threats. C. economic conditions. B. potential vendors. D. future employees.

MP:012/3.05

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam 63. Which of the following is an activity that a business performs when conducting a competitive analysis: A. Sets productivity goals C. Calculates economic data B. Monitors rivals' marketing strategies D. Develops selling procedures

MP:012/3.05 64. One way that a business can learn about its competitors' activities is by A. developing product specifications. C. reviewing secondary data. B. evaluating Intranet efficiencies. D. identifying communication barriers.

MP:012/3.05 65. When conducting an environmental scan, which of the following is an economic factor that a business should consider: A. Consumer spending habits C. Local demographics B. Global trade regulations D. Restricted sales territories

NF:015/2.02 66. Which of the following is a true statement about a business's environment: A. It can be avoided. B. It is always changing. C. It consists of the economy and technology. D. It may not affect the business, depending on the industry.

NF:015/2.02 67. Which of the following is an example of a demographic trend: A. The aging of the population C. Rising interest rates B. Shifting political climates D. A concern for fitness and health

NF:015/2.02 68. Which of the following examples illustrates how environmental factors are interrelated: A. The economy affects what competitors are doing. B. New legislation will be written in the future. C. Low investor confidence heavily impacts financial planners. D. The economy affects banking institutions.

NF:015/2.02 69. In order for a business to generate a profit, its operating costs must be __________ the gross margin. A. equal to C. less than B. greater than D. identical to

OP:024/2.10 70. The costs of operating a business are often called __________ expenses. A. fixed C. variable B. overhead D. markdown

OP:024/2.10 71. Variable expenses increase in direct proportion to the increased rate of A. competition. C. automation. B. production. D. motivation.

OP:024/2.10 72. People who are naturally creative often are A. highly educated. B. physically active.

C. mentally flexible. D. emotionally controlled.

PD:012/2.05 73. Which of the following is usually a characteristic of a creative person: A. Likes to seek out new challenges C. Is patient with other people B. Depends on others D. Prefers working under supervision

PD:012/2.05

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam 74. Which of the following personality traits is often associated with creative people: A. Shunning recognition and praise C. Preferring routine activities B. Exhibiting low energy levels D. Acting independently

PD:012/2.05 75. Home-based businesses are attractive to many people because the businesses generally A. yield higher profit margins. C. have lower start-up costs. B. provide owners a steady income. D. require less technical training.

PD:066/1.02 76. What is a trend that affects the growth of entrepreneurial ventures? A. A rise in consumers' desire for slow-response times B. The shift to an agricultural-based society C. A higher demand for more convenience products D. The reduced need for health care and related services

PD:066/1.02 77. Governments can encourage entrepreneurial development by A. increasing interest rates on loans. C. establishing higher ethical standards. B. deregulating and reducing taxes. D. passing more legislation with strict guidelines.

PD:066/1.02 78. What is a disadvantage of entrepreneurship? A. Fewer resources B. Personal satisfaction

C. Lower taxes D. Uncertain income

PD:066/1.02 79. What behavior is exhibited when an individual recognizes the possibility of an undesirable outcome and continues to work toward a goal? A. Creativity C. Risk taking B. Self-discipline D. Flexibility

PD:066/1.02 80. Which of the following statements is true regarding training for entrepreneurial ventures: A. Once entrepreneurs are educated or trained in their business field, they rarely need further education. B. Most successful entrepreneurs have degrees from four-year colleges or universities. C. The type of training and education that entrepreneurs need depends on the nature of the start-up business. D. Most entrepreneurs must pass state-mandated exams to operate their businesses.

PD:066/1.02 81. Successful entrepreneurs enjoy their work and often start their businesses so that they can share their interests and enthusiasm with others. In other words, successful entrepreneurs have __________ what they do. A. reservations about C. apathy for B. concerns about D. passion for

PD:066/1.02 82. Entrepreneurs often discover business start-up ideas by looking for gaps between what is currently being done and A. how things are being done. C. when changes were last made. B. what was done in the past. D. what needs to be done.

PD:066/1.02 83. Even when times are tough for Caitlin's business venture, she tends to remain positive—she looks at the glass as half full rather than half empty. What characteristic of entrepreneurship is Caitlin exhibiting? A. Organization C. Innovation B. Optimism D. Determination

PD:066/1.02 Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam 84. Which of the following is a financial concern that entrepreneurs often face when starting new businesses: A. Irregular paychecks C. Shorter vacations B. Long working hours D. Lower production standards

PD:066/1.02 85. As a new business owner, Thomas is willing to work long hours, watch his spending, and sacrifice his social life to focus on building his clientele. What entrepreneurial trait is Thomas exhibiting? A. Objectivity C. Organization B. Humility D. Determination

PD:066/1.02 86. Identifying new product opportunities usually requires a person to be A. decisive. C. aware. B. emotional. D. indifferent. PM:87. Jessica's hobby is making jewelry. There is potential to sell her bracelets and earrings on eBay. This is an example of identifying a product opportunity by considering A. demographic changes. C. consumer attitudes. B. business processes. D. personal experiences. PM:88. After a Korean auto manufacturer built a plant in Ames, Iowa, Kwan noticed a substantial growth of Korean residents in the area, many of whom were relocated to Ames to work for the plant. Kwan decided to import Korean goods and sell them in a small Korean specialty store near town. This is an example of a product opportunity resulting from A. advancements in technology. C. differences in priorities. B. changes in travel habits. D. shifts in population ethnicity. PM:89. Market opportunity is often affected by A. methodology. C. rewards. B. location. D. timing. PM:90. The primary goal during the brainstorming process is to A. come up with as many ideas as possible. B. analyze each idea as it is presented. C. rate each idea in relation to one another. D. come up with a set number of ideas within a certain time.

PM:127/2.04 91. Which of the following statements is true regarding the use of group creative-thinking techniques to facilitate the idea-generation process: A. The brainstorming technique usually generates the best ideas. B. Groups are usually more effective when each member uses mind-mapping techniques. C. Group members most often generate new ideas by altering or building upon another idea. D. The Six Thinking Hats technique is generally the most effective idea-generation technique.

PM:127/2.04 92. When using mind mapping to generate product ideas, you begin by writing down the main problem or A. market opportunity. C. primary associations. B. supporting facts. D. situational analysis.

PM:127/2.04

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam 93. The primary responsibilities of the facilitator of a product idea brainstorming session are to compile all of the ideas and A. keep the group on task. C. select the best idea. B. judge the bad ideas. D. evaluate the group's creativity. PM:94. Which of the following is a way that a business can determine if a product will fulfill its target market's needs: A. Observe workers C. Ask the customers B. Distribute promotional materials D. Develop a prospect list

PM:130/2.07 95. A business might take an existing product and alter it to fulfill a specific need for a different A. medium. C. utility. B. product mix. D. target market.

PM:130/2.07 96. Can any brand name be selected and used by a business? A. No, the name must be legally available for use. B. Yes, brand names cannot be owned by a business. C. Yes, a business can use any name it wants to use. D. No, the name must be registered before it can be used. PM:97. One way that a national business chain can make sure that customers will remember its name is to develop a brand name that is A. long and complicated. C. similar to those used by competitors. B. easy to read and pronounce. D. associated with a specific period of time. PM:98. Jean usually says “Good morning!” to Dave when he arrives at work each day. Today, though, Jean didn’t even look up when Dave passed by her desk. Dave should assume that A. Jean is mad at him because he didn’t decorate her desk for her birthday last week. B. their supervisor yelled at Jean for wasting time socializing when she should be working. C. Jean is working so hard on a report for their manager that she didn’t notice Dave when he walked by. D. there must be a reason for Jean’s behavior, but he doesn’t know exactly what that reason is. PM:99. The Roderick Company recently laid off several employees due to declining sales. Now, the company’s management expects the remaining employees to take over responsibilities previously held by the workers who were let go. Unfortunately, management failed to explain who among the staff would be responsible for completing which tasks. The employees’ job responsibilities have become A. ambiguous. C. easy. B. dangerous. D. prestigious. PM:100. Joanna owns a small restaurant. Her unemployed cousin Lewis just asked for a job as a server. Joanna feels sorry for Lewis because he is out of work. Unfortunately, he is rude and condescending. If she hires him, it will be obvious to her other employees that Lewis got the job because he is Joanna’s cousin. If she gives Lewis a job, Joanna faces a good possibility that her employees will A. increase productivity. C. lose respect for her. B. become physically ill. D. share their tips with Lewis. PM:-

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 1. D Negligence. A business might be sued for negligence if it does not take reasonable precautions to protect workers from risks or health hazards on the job. The basis of negligence is that the problems could have been easily avoided if the business had made some minor adjustments. Consequently, businesses usually try to make the workplace as safe as possible in order to avoid being sued for negligence. Misrepresentation involves making unrealistic claims about products. Libel is making false statements that harm an individual's reputation. Incompetence involves not having the skills or abilities necessary to perform satisfactorily. SOURCE: BL:001/3.06 SOURCE: Beatty, J.F., & Samuelson, S.S. (2008). Essentials of business law (3rd ed.) [pp. 143144]. Mason, OH: Thomson/South-Western. 2. B Intellectual property. Intellectual property refers to a person's ideas or formulas, which are intangible by nature and are made tangible through creative expression. To protect a business's inventions, the business would apply for a patent with the government. The government also protects written works with copyrights and symbols (e.g., business logo) with trademarks. If a business determines that another company or person infringes on its intellectual property, the business can file a lawsuit against the company or person. Income tax, consumer protection, and product liability laws do not protect a business's inventions or written works from the unauthorized use by others. SOURCE: BL:001/3.06 SOURCE: Gitman, L.J., & McDaniel C. (2008). The future of business: The essentials (3rd ed.) [pp. 98-99]. Mason, OH: Thomson Higher Education. 3. C Protect the well-being of individuals and businesses. Businesses must follow a variety of government regulations, such as labor laws, environmental laws, and trade regulations. The purpose of regulating business activities is to protect consumers and businesses from unethical behavior and to provide a fair environment in which businesses can compete. In a free-enterprise economic system, regulations encourage competition rather than limit it. Although governments often implement policies that encourage business expansion and change international trade initiatives, these are not primary reasons for regulating business activities. SOURCE: BL:001/3.06 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (pp. 126127). Woodland Hills, CA: Glencoe/McGraw-Hill. 4. B Corporation. One of the major advantages of a corporation as a form of business ownership is that it can raise capital by selling bonds or shares of stock. The owners of a sole proprietorship, limited partnership, or partnership must invest their own capital or be able to qualify for outside loans. SOURCE: BL:006/3.06 SOURCE: BL LAP 2—Taking Care of Business (Select Form of Business Ownership) 5. B Ease of start-up. This kind of ownership has the least red tape. The owner does not have a partner or others to rely on to make decisions. Many new sole proprietorships fail in the first few years. A partnership would combine the financial resources of two or more parties, while a corporation provides the best option for raising capital. SOURCE: BL:006/3.06 SOURCE: BL LAP 2—Taking Care of Business (Select Form of Business Ownership)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 6. A Is liable for the business's losses. In a general partnership, each partner has unlimited liability. Therefore, each partner is liable for the business's losses. An advantage is that the partners share the profits. In a general partnership, each partner may, or may not, invest the same amount of capital. The partners usually share management duties. Corporations, rather than general partnerships, prepare annual reports. SOURCE: BL:006/3.06 SOURCE: BL LAP 2—Taking Care of Business (Select Form of Business Ownership) 7. B An e-mail requesting vendor pricing and discounts. An inquiry is a request for information. Businesses often send e-mails asking or requesting information from other businesses. Some requests might include product pricing, membership eligibility, or shipping dates. A performance review, meeting agenda, and financial report provide business information. The information is not an inquiry unless someone asks for something. SOURCE: CO:040/1.04 SOURCE: Hyden, J.S., Jordan, A.K., Steinauer, M.H., & Jones, M.J. (2006). Communicating for success (3rd ed.) [pp. 285-286]. Mason, OH: Thomson South-Western. 8. A At the beginning of the letter. Inquiries should be direct so that the recipient immediately knows what the inquiry is about. Start with the purpose of the inquiry before describing your company, project, or what prompted the inquiry. Delayed statement of your purpose (whether later in the letter or requesting a separate meeting) makes it more difficult for the recipient to understand the inquiry. SOURCE: CO:040/1.04 SOURCE: Lesikar, R.V. & Flatley, M.E. (2005). Basic business communication: Skills for empowering the Internet generation (10th ed.) [pp. 112-119]. New York: McGrawHill/Irwin. 9. A Contact information. An inquiry is a request for information. Letters of inquiry are requests for information such as job openings with businesses, product specifications, prices, proposals, etc. To respond to an inquiry, the letter recipient must know to whom the information should be sent. Therefore, all inquiry letters should contain contact information—the inquirer's name, telephone number, mailing address, and/or e-mail address. Skills and qualifications might be included in a letter of inquiry that a job seeker sends to a potential employer. Project specifications might be included in a request for proposal. Letters of inquiry do not contain attention-getting titles. SOURCE: CO:040/1.04 SOURCE: WriteExpress Corporation. (n.d.). Write inquiries. Retrieved January 25, 2010, from http://www.writeexpress.com/inquiry.htm 10. D They are important to the economy. Small businesses account for the majority of all businesses. Therefore, they are an extremely important part of the economy. Without small businesses, the economy would not prosper and grow. Small businesses may be owned by one person or several people. SOURCE: EC:065/1.01 SOURCE: Burrow, J.L. (2002). Marketing (pp. 564-565). Mason, OH: South-Western.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 11. B Restrictive loan policies. It is harder for small-business start-ups or entrepreneurial ventures to obtain credit or loans from lending institutions that have tight or restrictive loan policies. This is because lending institutions have finite funds to loan and will loan only to businesses that provide collateral or are less likely to default on their loans. Tax reductions, low interest rates, and slow inflation are favorable circumstances for business growth. SOURCE: EC:065/1.01 SOURCE: Lesonsky, R. (2010, October 7). Are small business loans getting easier to obtain? Retrieved February 14, 2011, from http://smallbiztrends.com/2010/10/are-smallbusiness-loans-getting-easier-to-obtain.html 12. B Many people start entrepreneurial ventures during times of economic recession. During an economic recession, production slows, unemployment rises, and consumer spending tends to decrease. When workers are laid off, they often start home-based or free-lance businesses to earn money. For example, an unemployed advertising account executive might earn money by freelancing as a media buyer for small companies. Leads and referrals may help this displaced worker grow a new, full-time business. Trade regulations and consumer spending are external factors that can affect small-business start-ups and growth. Multinational companies are usually larger than small companies; therefore, they are taxed more than small companies. SOURCE: EC:065/1.01 SOURCE: Sugars, B. (2009, February 25). Top 10 reasons to start a business in a recession. Retrieved October 22, 2010, from http://www.entrepreneur.com/startingabusiness/startupbasics/startupbasicscolumnistbr adsugars/article200342.html 13. D Accepting responsibility for his decision. Because Jack is willing to accept the risks associated with his decision, he is accepting responsibility for the future outcome of a certain course of action. A person who takes responsibility for his/her actions often accepts a certain level of risk, and is willing to admit, learn from, and rectify mistakes. Jack acknowledges risks, but he is not indicating that he believes that he is making a bad decision. Jack is not asking others to accept blame, nor is he requesting that his staff support his decision. SOURCE: EI:075/2.08 SOURCE: McGuirk, S. (n.d.). Personal responsibility and decision making: The moments of truth. Retrieved August 6, 2009, from http://www.hsc.unt.edu/departments/oasis/documents/personal_decision_making.ppt 14. D An employee's decisions and actions can negatively impact others. If Porter had immediately called the shipping department to stop the incorrect order from being shipped, then the customer would not be burdened with the task of returning the item, and the company would not need to pay extra charges to return the product. Customers' satisfaction levels tend to decrease when they receive the incorrect products, and unnecessary return charges hurt the company's bottom line. Therefore, Porter's decision to wait to take action negatively impacts both the customer and the company. Many routine problems can be resolved without involving supervisors. Porter's lapse of judgment in one situation does not mean that he does not have the ability to perform his job well. Customers react differently to problems and inconveniences; therefore, it cannot be assumed that most customers will become very angry—some of them may become slightly annoyed. SOURCE: EI:075/2.08 SOURCE: Payne, S. (n.d.). Accepting responsibility for your own work. Retrieved July 21, 2010 from http://www.helium.com/items/1587239-accepting-responsibility-for-your-own-work

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 15. D You gain others' respect. Most people do not like to make mistakes, but everyone makes them from time to time. It's the way that a person handles a mistake or poor decision that is important. Taking responsibility means admitting the wrongdoing, accepting the consequences of the decision, and trying to do better the next time. When a person admits making a mistake, s/he is likely to gain the respect of others and gain trust. When people do not admit their mistakes or they blame others for mistakes, they are showing that they value their well-being over others, which is demonstrating self-importance. Most people do not trust individuals who do not accept responsibility for their actions or decisions, and are likely to be skeptical about those individuals' true motives. People cannot control others' opinions. SOURCE: EI:075/2.08 SOURCE: Klingeman, A.M. (2007, November 20). Taking responsibility for your actions. Retrieved October 28, 2010, from http://ezinearticles.com/?Taking-Responsibility-forYour-Actions&id=842366 16. A Satisfy an unmet demand. An opportunity is a circumstance that presents itself. Entrepreneurial discovery is the process of detecting and matching product and market opportunities with one another in a manner that satisfies the market and the business. To do that, an entrepreneur or small-business owner must conduct research to discover what the market needs or wants. The entrepreneurial discovery process does not allow an entrepreneur or small-business owner to form a technological monopoly. The process does not affect economic sanctions, and it does not involve changes in legal requirements. SOURCE: EN:001/2.01 SOURCE: Wayne Brown Institute. (2004). Fundamentals of a well-built venture. Retrieved April 27, 2010, from http://www.venturecapital.org/fundamentals.htm 17. B It's an ongoing process that facilitates a business's success rate. Entrepreneurial discovery is the process of detecting and matching product and market opportunities with one another in a manner that satisfies the market and the business. An opportunity is a circumstance that presents itself. A business that continuously looks for product and market opportunities helps the business compete and thrive in the marketplace because it is always looking for new products and new markets. Entrepreneurial discovery does not ensure continuous funding, provide professional development training, or determine long-term profits for businesses. SOURCE: EN:001/2.01 SOURCE: Wayne Brown Institute. (n.d.). The six fundamentals of a well-built venture. Retrieved February 5, 2008, from http://www.venturecapital.org/nvt/parta/newa1.html 18. C Market need. A market need occurs when demand for a product is not met. Entrepreneurial discovery is the process of detecting and matching product and market opportunities with one another in a manner that satisfies the market and the business. For example, there may be a demand for a medication to treat an illness, but because the illness is a new strain, no medication is available. Therefore, a market need exists, and the scientist uses his/her knowledge to invent a medication to treat the illness. Entrepreneurial discovery does not require a preventable accident, economic crisis, or creative observation to begin the process. SOURCE: EN:002/2.01 SOURCE: Wayne Brown Institute. (n.d.). The six fundamentals of a well-built venture. Retrieved May 16, 2007, from http://www.venturecapital.org/nvt/parta/newa1.html

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 19. B Increased cultural diversity. Many forces and trends in the external environment, including demographic changes, macroeconomic changes, technological changes, and political/regulatory changes, impact entrepreneurial discovery. A good example of a demographic change, or a change in the physical and social characteristics of the population, is increased cultural diversity. Many entrepreneurs have used the increased diversity to their advantage by developing businesses that cater to particular ethnic groups within the population. Interest rate fluctuations, industry deregulation, and technological advancements also encourage entrepreneurial discovery, but they are not demographic trends. SOURCE: EN:002/2.01 SOURCE: Meyer, E.C., & Allen, K.R. (2006 ). Entrepreneurship and small business management (pp. 50-53). New York: Glencoe/McGraw-Hill. 20. B Lower tariffs. A business opportunity is a circumstance that presents itself to provide a good or service. 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. Extreme changes in currency rates may influence a businessperson's decision to trade internationally, but currency rates always fluctuate somewhat, which indicates that fluctuations are not a trend. Trade agreements are not enforceable when a country does not want to participate. The reference to higher allowances is too general in nature to consider it a trend. SOURCE: EN:003/2.03 SOURCE: Meyer, E.C., & Allen, K.R. (2006). Entrepreneurship and small business management (pp. 46, 70-75). New York: Glencoe/McGraw-Hill. 21. B Conduct research. A venture opportunity is a circumstance that presents itself as a favorable means of starting a new business. Entrepreneurs often look for venture-creation opportunities by doing research. The research might involve networking, watching trends, or reading journals and reports. After the entrepreneur assesses and screens a venture-opportunity for its potential, s/he would obtain financing, identify staffing needs, and select a location for the business. SOURCE: EN:004/2.03 SOURCE: Greene, C.L. (2006). Entrepreneurship ideas in action (pp. 14-15). Mason, OH: SouthWestern. 22. D Creative thinking. The creative-thinking process is a method for encouraging your own creativity, allowing it to reveal itself to generating unique ideas, approaches, and solutions. An entrepreneur is a person who starts and assumes the risk for a business. Before an entrepreneur can start a venture, s/he must generate an idea for the business, which is done by thinking creatively. The entrepreneur must generate venture ideas before s/he can make decisions, set goals, and plan finances for the venture. SOURCE: EN:006/2.06 SOURCE: Meyer, E.C., & Allen, K.R. (2006). Entrepreneurship and small business management (pp. 50-51). New York: Glencoe/McGraw-Hill.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 23. C Solve problems. An entrepreneur is a person who starts and assumes the risk for a business. Sometimes, entrepreneurs generate ideas for products that may solve a specific problem for a market. Entrepreneurs do not usually look for ways to increase their liability, rationalize their spending, or control outcomes when they are generating business ideas. SOURCE: EN:006/2.06 SOURCE: Katz, J. & Green, R. (2011). Entrepreneurial small business (3rd ed.) [pp. 80-81, 91]. New York: McGraw-Hill Irwin. 24. D Complete. A well-conducted feasibility study is accurate, complete, and relevant. It provides thorough information to address issues associated with venture ideas. The information needs to be specific to the venture ideas under consideration rather than general. The information provided needs to be as objective as possible so that the potential business owner can make informed, unemotional decisions. A pre-feasibility study can be conducted before investing the time and money into a full-blown feasibility study. The pre-feasibility study helps to sort out ideas that are not feasible to pursue. SOURCE: EN:038/2.13 SOURCE: Hofstrand, D. (2006, March). When to do and how to assess a feasibility study. Retrieved September 25, 2007, from http://www.extension.iastate.edu/AGDM/wholefarm/html/c5-64.html 25. C Should we proceed with this project? A feasibility study determines if a project is feasible—doable. If the answer is yes, the project proceeds. Assessing technology needs is one piece of a feasibility study. Opportunity cost is the value of the next best alternative. While other alternatives may be considered, a feasibility study focuses on one idea at a time. If a feasibility study indicates a project should move forward, a business plan would then be written. Prior to a feasibility study, a business plan does not exist, so it cannot be validated. SOURCE: EN:038/2.13 SOURCE: Hofstand, D. (2006, March). When to do and how to assess a feasibility study. Retrieved October 12, 2010 from http://www.extension.iastate.edu/AGDM/wholefarm/html/c5-65.html 26. D Planning. Planning is the management function of deciding what will be done and how it will be accomplished. To increase a venture's success rate, an entrepreneur should develop comprehensive plans for all aspects of the business before taking action. Two factors that an entrepreneur should consider during the planning process are the business's financial needs and the business's location. Controlling is the management function that monitors the work effort. To implement a process is to take action. Distribution is a marketing function that is responsible for moving, storing, locating, and/or transferring ownership of goods and services. SOURCE: EN:007/2.09 SOURCE: Bailey, L.J. (2007). Working (4th ed) [pp. 307-309]. Mason, OH: South-Western Cengage Learning.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 27. C Production process. Entrepreneurs must consider a number of different issues when planning their businesses. Areas of focus during entrepreneurial planning include operations, finance, law, the market, etc. Operational issues involve the day-to-day activities for continued business functioning. For example, an entrepreneur must determine the way in which the business will produce goods or services for customers. The target market and direct competitors are market considerations that entrepreneurs face when planning their new ventures. The source of financing for the business is a financial consideration. SOURCE: EN:007/2.09 SOURCE: Meyer, E.C., & Allen, K.R. (2006). Entrepreneurship and small business management (p. 348). New York: Glencoe/McGraw-Hill. 28. B Sales forecast. An entrepreneur uses many tools to plan a new venture. These tools help an entrepreneur to develop a comprehensive business plan, which includes information about sales. Banks usually require an entrepreneur to provide them with a business plan when applying for a loan. A sales forecast is a prediction of sales over a specific time, usually on a monthly, quarterly, and annual basis. It is important to forecast sales so that the entrepreneur can meet product demand. Marketing objectives are the goals that a firm seeks to reach with its marketing plan. A promotional budget is the amount of money a business plans to spend on promoting its goods and services during a certain time. An inventory report provides information about the company's stock on hand. SOURCE: EN:008/2.09 SOURCE: Meyer, E.C., & Allen, K.R. (2006). Entrepreneurship and small business management (pp. 288-289). New York: Glencoe/McGraw-Hill. 29. A Promotional budget. Promotion is important to new venture owners because they need to let the target audience know that the business has goods and services available for purchase. A promotional budget is the amount of money a business plans to spend on promoting its goods and services during a certain time. Businesses consider historical data and estimated sales to determine how much to spend on promotion. A sales report provides information about a firm's sales volume. A competitive analysis is an evaluation of a competitor's activities. Publicity is any nonpersonal presentation of ideas, goods, or services that is not paid for by the company or individual that benefits or is harmed by it. SOURCE: EN:008/2.09 SOURCE: Meyer, E.C., & Allen, K.R. (2006 ). Entrepreneurship and small business management (pp. 265-270). New York: Glencoe/McGraw-Hill. 30. D The financial needs to start a new business depend on the nature of the venture. The requirements (e.g., time, money) that a person needs to start a business differ and usually depend on the nature of the business. For example, a person who starts a home-based consulting business does not require as much money for the start-up as a restaurant franchisee does. The franchisee needs to lease space or build a facility, purchase kitchen equipment, obtain supplies, hire employees, and pay franchise fees, which can be very expensive. A patent is legal protection that provides an owner the sole rights to an invention or process for a specific time period. Business owners do not always invent goods or processes, so not all of them need to obtain patent protection. SOURCE: EN:009/2.11 SOURCE: Meyer, E.C., & Allen, K.R. (2006 ). Entrepreneurship and small business management (pp. 20-21, 60-61, 97, 99). New York: Glencoe/McGraw-Hill.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 31. B Raw materials, equipment, and product inventory. Costs of sales for a new manufacturing venture typically include raw materials, equipment, product inventory, warehousing, shipping, and packaging. Trade show attendance and sales lead lists fall in the sales and marketing costs category. Attorney fees are a professional expense. Internet access is a technology cost. SOURCE: EN:009/2.11 SOURCE: Webber, A. (2011). Estimating startup costs for a new business. Retrieved March 28, 2011, from http://www.startupnation.com/business-articles/1248/startup-costs-newbusiness.asp/article.aspx?content_id=1248&PN=startup-costs-new-business.asp 32. B Incorporation. Some of the expenses that an entrepreneur must pay during the start-up phase are one-time costs, while other costs are ongoing. An example of a one-time cost is an incorporation fee, which an entrepreneur must pay if s/he chooses to incorporate the new business. Trade association membership fees, shipping and postage costs, and website maintenance are typically routine, ongoing expenses that the business must pay on a regular basis. SOURCE: EN:009/2.11 SOURCE: SmallBusiness.com. (2010, October 5). Starting a small business. Retrieved March 28, 2011, from http://smallbusiness.com/wiki/Starting_a_small_business 33. A Career. When starting a new business, there is always a risk—the possibility of loss or failure. There are different types of risk, such as financial, social, physical, and career. When an entrepreneur leaves a successful career with a reputable company to start a business, there is the risk that the entrepreneur may lose his/her ability to go back to the career if the new venture fails. If a venture fails and the entrepreneur has not kept up with technological advancements, professional development, or licensing credentials, the entrepreneur may find it difficult to resume her/his career. Because starting a business can be time-consuming and stressful, the entrepreneur may experience social risk (loss of close relationships) or physical risk (health issues related to mental stress). Financial risk is the possibility of losing assets. SOURCE: EN:010/2.11 SOURCE: Meyer, E.C., & Allen, K.R. (2006). Entrepreneurship and small business management (pp. 30-31). New York: Glencoe/McGraw-Hill. 34. A Marital tension and family problems. Unfortunately, entrepreneurs face a number of emotional risks, including marital tension and family problems. Starting a new business is time-consuming and emotionally draining. As a result, many entrepreneurs have difficulty dividing their time and attention between their businesses and their families, which can create stress for everyone involved. Other risks that entrepreneurs face include industry risks (e.g., difficult suppliers); market risks (e.g., competition, slow market acceptance); product risks; financial risks (e.g., uncertain income, inflation); management risks; and career risks (e.g., unemployment). SOURCE: EN:010/2.11 SOURCE: Brown, C.M. (2011, February 25). How to prepare your family for entrepreneurship. Retrieved March 28, 2011, from http://www.inc.com/guides/201102/how-to-prepareyour-family-for-entrepreneurship.html

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 35. B Coin laundry trade association. A trade association is a group of persons in the same industry or geographic area who form a society to solve their common problems. Trade associations can often provide entrepreneurs with information about average start-up and operating costs in their industry, as well as trend analyses and technology news. The Service Corps of Retired Executives (SCORE), a local chamber of commerce, and the Small Business Administration are also good sources of business start-up information, but they are unlikely to be able to provide information about start-up and operating costs for a specific industry. SOURCE: MN:187/1.03 SOURCE: Meyer, E.C., & Allen, K.R. (2006). Entrepreneurship and small business management (pp. 107-109). New York: Glencoe/McGraw-Hill. 36. C The Small Business Administration (www.sba.gov). The Small Business Administration (SBA) website is an excellent source of general business start-up information. The SBA is a government agency whose primary purpose is to provide support and assistance to business start-ups and existing small businesses via the agency's website and district offices. The Project Management Institute is a reliable source of information about project management. It serves project managers, not entrepreneurs. The Wikipedia page about entrepreneurship includes a good deal of general business start-up information, but because readers can edit the content, it is not as reliable as information provided by the SBA. The National Retail Federation (NRF) is a trade association serving retailers and industry partners. Any start-up information that the NRF provides would be specific to retail businesses. SOURCE: MN:187/1.03 SOURCE: Greene, C.L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 115-117]. Mason, OH: Thomson/South-Western. 37. D Mentor. A mentor is an experienced worker who can act as a guide to new employees, or in this case, new entrepreneurs. The Service Corps of Retired Executives (SCORE) is a non-profit organization made up of working and retired business executives, owners, and entrepreneurs who donate their time to help entrepreneurs start and grow their businesses. Each of these volunteers serves as a mentor to one or more entrepreneurs in need of help. An apprentice is a union worker who is just beginning in an occupation. An entrepreneur is an individual who assumes the risks of starting and operating a business. In this situation, Alaina is the entrepreneur, not Jack. An intermediary is a channel member operating between the producer and customer to help in the movement of goods and services. SOURCE: MN:187/1.03 SOURCE: SCORE Association. (2010). About SCORE. Retrieved March 25, 2011, from http://www.score.org/explore_score.html 38. C Achieving planned goals. The business's goals and strategies for achieving those goals may change frequently. Changing the business's image, increasing its profits, or improving management techniques might be specific goals at any point in time. SOURCE: MP:001/3.01 SOURCE: MP LAP 2—Pick the Mix (Marketing Strategies)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 39. B Choosing distribution channels. The place element of marketing focuses on considerations in getting the selected product in the right place at the right time. Some of the other place considerations are storage, transportation, inventory handling and control, and choice of specific outlets to offer the products. Sales promotion is an aspect of the promotion element. Extending credit is a consideration of the price element. Warranties and guarantees are considerations in the product element. SOURCE: MP:001/3.01 SOURCE: MP LAP 2—Pick the Mix (Marketing Strategies) 40. B Specific actions. Tactics are the specific actions that a business uses to carry out its marketing strategies. A marketing strategy is the plan of action or road map the business uses to accomplish its marketing goals. Goals are desired outcomes. An option is a choice among two or more alternatives. SOURCE: MP:001/3.01 SOURCE: MP LAP 2—Pick the Mix (Marketing Strategies) 41. D Competition. The rivalry between two or more businesses to attract scarce customer dollars is competition. As competition has increased, companies have been forced to pay more attention to what consumers want, and then meet those needs in order to keep customers and stay in business. Competition has forced companies to identify their markets and meet the specific needs of those markets. Advertising is any paid form of nonpersonal presentation of ideas, images, goods, or services. Merchandising is the process of having the right goods in the right place at the right time in order to make a profit. Automation is the use of robots or other automatic equipment to do certain tasks. SOURCE: MP:003/3.02 SOURCE: IM LAP 9—Have We Met? (Market Identification) 42. B Market segmentation. Market segmentation is the division of a total market into smaller, more specific groups. Each of P & G's soaps is intended to meet the needs of specific markets. Direct marketing involves sending promotional materials directly to customers' homes and businesses. Geographic segmentation is the division of a market on the basis of where people are located. Industrial markets are made up of businesses rather than individuals. SOURCE: MP:003/3.02 SOURCE: IM LAP 9—Have We Met? (Market Identification) 43. B Mass marketing. The goal of mass marketing is to appeal to many types of consumers through one marketing plan. Mass production is the production of a few items in large quantities. Market segmentation is the division of a total market into smaller, more specific groups. Demographic segmentation is the division of a market on the basis of its physical and social characteristics. SOURCE: MP:003/3.02 SOURCE: IM LAP 9—Have We Met? (Market Identification)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 44. B Geographic. A market segment is one of the groups into which the total market is divided. Geographic segmentation is the division of a market on the basis of where consumers are located, such as where they live and work. Demographic segmentation is the division of a market on the basis of its physical and social characteristics, such as age and ethnicity. When dividing a market by considering the consumers' values, the business is using psychographic segmentation. SOURCE: MP:004/3.04 SOURCE: Boone, L.E., & Kurtz, D.L. (2004). Contemporary marketing (11th ed.) [pp. 227-229]. Mason, OH: Thomson/South-Western. 45. B Lifestyles. Lifestyle is the way in which people lead their daily lives, determined by their income, interests, and activities. When businesses group people according to their lifestyles, they are segmenting the market based on psychographics, which is the division of a market on the basis of consumers' lifestyles and personalities. This is an effective way to segment the market because the lifestyle indicates how people spend their time and money. Demographic segmentation is the division of a market on the basis of its physical and social characteristics, such as education, marital status, and occupation. SOURCE: MP:004/3.04 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 39-41). New York: Glencoe/McGraw-Hill. 46. A Marketing strategies. Identifying markets involves dividing the whole market into smaller groups that share common characteristics. When a business identifies different markets, it can then select the group (target market) that is most likely to buy its products. After selecting the target market, the business can develop a plan of action and carry out activities that will appeal to the target market and encourage it to buy its products. Businesses do not identify market segments to develop appropriate economic forecasts, organization records, or leadership styles. SOURCE: MP:004/3.04 SOURCE: Kotler, P., & Armstrong G. (2008). Principles of marketing (12th ed.) [pp. 184-185]. Upper Saddle River, NJ: Prentice-Hall. 47. A Accessible. So that a business can promote and sell products, it must be able to reach its target market, so the market must be accessible. Undifferentiated refers to a marketing strategy in which a business offers one option to the entire segment without considering market segments' differences. Concentrated refers to a tactic in which a business appeals to one or a few small markets with the goal of developing and maintaining customer loyalty. Inflexible means unwilling to adapt, and is not usually a characteristic of a desirable target market. SOURCE: MP:005/3.04 SOURCE: Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [p. 194]. Upper Saddle River, NJ: Prentice-Hall. 48. D Niche marketing. This involves targeting a small segment of the total market that meets specific criteria. The benefit of niche marketing is that it enables businesses to narrow down the market to appeal to those individuals who are most interested in the business or product. This works well for specialized products that do not appeal to the mass market. Selecting a target market based on very specific criteria is not an example of market planning, income segmenting, or target auditing. However, income might be one of the specific criteria that a business uses to limit the audience. SOURCE: MP:005/3.04 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 41). New York: Glencoe/McGraw-Hill. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 49. D Mass. Mass marketing is a strategy in which a business offers one option to the entire segment without considering the market segments' differences. Instead, the business focuses on the common needs of the consumers, and it designs its marketing activities in a way that appeals to the whole market. Concentrated marketing is a strategy in which a business appeals to one or a few small markets with the goal of developing and maintaining customer loyalty. Niche marketing is a form of concentrated marketing that involves tailoring its efforts to appeal to a very narrow market segment. Isolated marketing is a fictitious term. SOURCE: MP:005/3.04 SOURCE: Kotler, P., & Armstrong G. (2008). Principles of marketing (12th ed.) [pp. 195-196]. Upper Saddle River, NJ: Prentice-Hall. 50. D Achieve its marketing objectives. A marketing plan is a written set of procedures or strategies for attracting a target market to the business. It outlines all of the activities that the business plans to use to achieve its marketing objectives. The marketing plan does not outline specific activities that the business will use to increase its buying power, meet the needs of its employees, or evaluate its sales policies. SOURCE: MP:007/3.03 SOURCE: Perreault, W.D., Cannon, J.P., & McCarthy, E.J. (2008). Basic marketing: A marketing strategy planning approach (16th ed.) [pp. 41-42]. Boston: McGraw-Hill/Irwin. 51. D They can help obtain funding. An important benefit of marketing plans is that they can help the marketing team obtain needed funding, either from the company budget or from outside investors. Marketing plans outline important marketing information and strategies; they do not develop products or recruit employees. While they contribute to a firm's success, marketing plans do not necessarily ensure a yearly profit. SOURCE: MP:007/3.03 SOURCE: MP LAP 1—A Winning Plan (Nature of Marketing Plans) 52. B Marketing strategies and programs. The marketing strategies and programs section of the marketing plan covers product, price, place (distribution), and promotion—the four P's of marketing. This section of the plan would cover a business's plans for communicating with its customers. The marketing objectives section of the plan lists the business's goals. The situation analysis is a determination of the business's current marketing situation. The executive summary is an introduction to the marketing plan. SOURCE: MP:007/3.03 SOURCE: MP LAP 1—A Winning Plan (Nature of Marketing Plans) 53. B What are our customers buying? A situation analysis is a determination of a business's current situation and the direction in which the business is headed. A situation analysis evaluates many internal and external factors. The business's customers (target market) are an external factor the business considers when conducting a situation analysis. The business needs to know which products the customers are buying so it can determine if it needs to make product line changes, delete items, add items, etc. Answering questions about financing, efficiency, and shipping companies do not help the business obtain information about its target market. SOURCE: MP:008/3.03 SOURCE: Etzel, M.J., Walker, B.J., & Stanton, W.J. (2007). Marketing (14th ed.) [p. 632]. Boston: McGraw-Hill/Irwin.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 54. A A competitor obtains a bank loan for expansion. A situation analysis is a determination of a company's business situation and the direction in which the company is headed. By examining the current internal and external factors that are affecting the company, it can act on opportunities, as well as take steps to improve its situation when it detects certain threats and weaknesses. If a competitor obtains a bank loan to expand, it means the competitor's business is growing—it could be achieving more sales, which means there is potential for the competitor to take market share from the company. When a competitor must recall a defective product, the company might benefit because recalls can cost a lot of money, jeopardizing the competitor's situation. The company might benefit from its competitor's recall because consumers might buy replacement items from the company. Reduced interest rates could present an opportunity for the business because it can obtain a loan for expansion and pay less interest. There is not enough information to determine if the situation discussing the sales increase relates to the company or to its competitors. SOURCE: MP:008/3.03 SOURCE: Longenecker, J.G., Moore, C.W., & Petty, J.W. (2003). Small business management: An entrepreneurial emphasis (12th ed.) [pp. 42-43]. Cincinnati: Thomson/SouthWestern. 55. D Rising inflation rate. A situation analysis is a determination of a company's current business situation and the direction in which the company is headed. When a company conducts a situation analysis, it evaluates many internal and external factors. Some external factors that a company evaluates are the economic indicators that affect the overall health of the economy, such as the interest rates, the unemployment rate, and the inflation rate. Inflation is the rapid rise in prices. Rising inflation is a threat to a company because customers have less money to spend on the company's products, which can negatively impact its sales. In addition, the company may also need to spend more money for raw materials, which can lower the company's profitability. When interest rates fall, customers are more likely to use credit or obtain loans to purchase goods and services, which may benefit the company. Likewise, an increase in GDP and a decline in unemployment indicate a strong economy in which customers are spending their money, which may positively impact on the company's sales. SOURCE: MP:008/3.03 SOURCE: Soloman, M.R., Marshall, G.W., & Stuart, E.W. (2008). Marketing: Real people, real choices (5th ed.) [pp. 43-44]. Upper Saddle River, NJ: Pearson Prentice Hall. 56. B Size of the market next year. An important factor to consider when conducting a market analysis is the size of the market next year. Businesses need to know if the market is growing or decreasing. For example, if a business sells primarily to senior citizens, it needs to determine the size of that market next year and for several years to come in order to be prepared to meet the needs of that market. If a business's market is decreasing, it needs to know that so it can make changes and try to identify a new market. When conducting a market analysis, businesses do not consider the location of the test market, the safety of the research process, or the design of the questionnaire. SOURCE: MP:009/3.05 SOURCE: Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (p. 300). Mason, OH: South-Western Cengage Learning.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 57. C Customer profile. One reason why businesses analyze a market is to develop a customer profile, or an overview of the characteristics of the target customer. Businesses need to understand their customers in order to develop marketing strategies to attract those customers. Therefore, businesses obtain economic and demographic information about customers during a market analysis to find out who their customers are. Businesses do not conduct a market analysis to develop a distribution plan, an operating budget, or a management team. SOURCE: MP:009/3.05 SOURCE: Meyer, E.C., & Allen, K.R. (2006 ). Entrepreneurship and small business management (pp. 103, 128). New York: Glencoe/McGraw-Hill. 58. B Area's market potential. A market analysis is a study of a particular market segment. The purpose of the market analysis is to determine the level at which the market segment is willing and able to buy the business's products. One aspect of the market analysis addresses the area market potential, which is the number of potential customers and the potential sales volume for a specific area, territory, or location. Psychographics are lifestyle and personality considerations of a market segment. Competitors are the business's rivals. Media exposure refers to the amount of contact the business makes with the target market through the media (e.g., television, radio). Psychographics, competitors, and media exposure are other important considerations when evaluating the overall market potential of a market segment. SOURCE: MP:009/3.05 SOURCE: Kotler, P., & Lane, K. (2006). Marketing management (12th ed.) [pp. 130-131]. Upper Saddle River, NJ: Prentice Hall. 59. A Growing government regulation. Growing government regulation is a potential threat that a SWOT (strengths, weaknesses, opportunities, threats) analysis might identify. A cost advantage is an example of a potential strength. A rebounding economy is an example of potential opportunity. Weak market image is an example of a potential weakness. SOURCE: MP:010/3.05 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (p. 31). Woodland Hills, CA: Glencoe/McGraw-Hill. 60. C Where are we making money? A strength is any resource or capability your business has that can help you gain a competitive advantage in your industry. To discover what your business's strengths are, ask where the business is making money. If a particular location or a specific target market generates significant income, that is a strength that the business can build on to become even more successful. Businesses identify threats by asking what their competitors are doing, and what obstacles they face. Businesses identify possible opportunities by asking what economic trends are beneficial. SOURCE: MP:010/3.05 SOURCE: IM LAP 8—Analyze This! (SWOT Analysis)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 61. A What resources do we lack? A SWOT analysis is a marketing tool that investigates a business's strengths, weaknesses, opportunities, and threats. Conducting a SWOT analysis helps a business determine what it is doing well and where it needs to improve. When examining the business's weaknesses, it should ask itself what resources it lacks. When a business lacks certain resources, it cannot operate efficiently, which reduces its ability to effectively compete in the marketplace. Therefore, it is important for the business to objectively look at its resource shortages and take steps to improve the situation. When the business asks a question about its competitors' activities, it is seeking information about a threat. When a business asks a question about particular markets the competitors have missed, it is examining opportunities. The assets, or things of value that a business has, are its strengths. SOURCE: MP:010/3.05 SOURCE: IM LAP 8—Analyze This! (SWOT Analysis) 62. A External threats. A threat is any unfavorable situation in the environment surrounding a business. Since competitors are rival businesses that seek to attract the same scarce customer dollars, they may be a threat to a business. Therefore, businesses need to analyze and know what their competitors are doing so they can identify possible threats. For example, more competitors entering the same market may be a threat to an existing business. Businesses do not conduct a competitive analysis to identify potential vendors, economic conditions, or future employees. SOURCE: MP:012 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (p. 30). New York: Glencoe/McGraw-Hill. 63. B Monitors rivals' marketing strategies. A competitive analysis involves gathering information about a business's competitors. A business obtains the information by monitoring its competitors' marketing strategies—the activities the competitors use to market their products. The business may look at the competitors' products, web sites, advertisements, and other promotional literature to gather information. Then, the business can summarize and evaluate the information that it collected to determine its competitors' strengths and weaknesses in the marketplace. By knowing its competitors' strengths and weaknesses, the business can take steps to improve its market share, if necessary. A competitive analysis does not involve setting productivity goals, calculating economic data, or developing selling procedures. SOURCE: MP:012/3.05 SOURCE: Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [pp. 516-522]. Upper Saddle River, NJ: Prentice-Hall.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 64. C Reviewing secondary data. By learning about its competitors' markets, products, pricing, and promotional activities, a business can determine its competitors' strengths and weaknesses in the marketplace. By evaluating its competitors' strengths and weaknesses, a business can determine the ways in which it can gain market share. To obtain information about its competitors, the business can collect secondary data, which are information that has been collected for purposes other than the project at hand. Secondary information that the business might review includes its competitors' promotional materials, their products, and industry publications. An Intranet is a business's internal computer network. Because a business does not have direct access to its competitors' Intranet systems, it would be difficult for a business to obtain specific information about the ways in which its competitors' Intranet systems work. Developing product standards will not provide a business with information about a competitor's activities. Communication barriers are problems that interfere with the effective exchange of information. SOURCE: MP:012/3.05 SOURCE: Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [p. 519]. Upper Saddle River, NJ: Prentice-Hall. 65. A Consumer spending habits. An environmental scan is an analysis of external forces that influence a business's success. By examining economic, political, socio-cultural, and technological factors that affect the business, the business can take steps to ward off the threats and to take advantage of the opportunities based on the information that the scan provides. Consumer spending habits are an economic factor that might be a threat or an opportunity. If spending is increasing because the economy is healthy, businesses will be able to increase production and sell more. Global trade regulations are a political factor. Local demographics and restricted sales territories are not economic factors. SOURCE: NF:015/2.02 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 30-32, 84-86). New York: Glencoe/McGraw-Hill. 66. B It is always changing. A business's environment is always in flux. That's why environmental scanning is so important. A business's environment cannot be avoided, and it will affect every business regardless of the industry. It consists of many elements, more than just the economy and technology. SOURCE: NF:015/2.02 SOURCE: NF LAP 2—Get the 411 (Environmental Scanning) 67. A The aging of the population. The aging of the population is a demographic trend since it refers to demographic data (age). Shifting political climates is a governmental or political trend. Rising interest rates is an economic trend. A concern for fitness and health is a social/cultural attitude. SOURCE: NF:015/2.02 SOURCE: NF LAP 2—Get the 411 (Environmental Scanning) 68. A The economy affects what competitors are doing. The economy's effect on the competition is an example of how environmental factors are interrelated, or affecting each other. The economy's effect on banking institutions and low investor confidence's effect on financial planners are examples of how certain environmental factors impact some businesses and industries more than others. New legislation being written is an example of how environmental factors are dynamic. SOURCE: NF:015/2.02 SOURCE: NF LAP 2—Get the 411 (Environmental Scanning)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 69. C Less than. Operating costs are expenditures necessary to keep the business running. Gross margin is the monetary difference between net sales and cost of goods sold. Operating costs are subtracted from gross margin to determine net profit. Consequently, operating costs must be less than the gross margin in order for the business to realize a profit. SOURCE: OP:024/2.10 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 767770). New York: Glencoe/McGraw-Hill. 70. B Overhead. Operating expenses such as rent, maintenance, and managers' salaries are often referred to as overhead. Markdown is a reduction in the retail price of an item. Variable expenses are business expenses that vary in response to changes in sales volume. Fixed expenses are expenses that do not vary in response to changes in sales volume. SOURCE: OP:024/2.10 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 767769). New York: Glencoe/McGraw-Hill. 71. B Production. Variable expenses change in proportion to the number of items produced or sold. The more product that is produced, the more expenses there are for utilities and payroll. Therefore, variable costs increase as production increases. Competition is rivalry between two or more businesses to attract customer dollars. Automation is a production method in which machines do tasks automatically. Motivation is the process of getting employees to strive to achieve management's objectives because they want to achieve them. SOURCE: OP:024/2.10 SOURCE: Sheth, J. & Mittal, B. (2004). Customer behavior: A managerial perspective (2nd ed.) [p. 767]. Mason, OH: South-Western. 72. C Mentally flexible. Creativity relies heavily upon mental flexibility, or the ability to generate unique ideas, approaches, and solutions. Creativity requires original thinking ability, which may be developed through education, but does not require a high level of education. Physical activity may stimulate thinking but is not essential to creativity. Being emotionally controlled could hamper creativity. SOURCE: PD:012/2.05 SOURCE: Meyer, E.C., & Allen, K.R. (2006). Entrepreneurship and small business management (p. 51). New York: Glencoe/McGraw-Hill. 73. A Likes to seek out new challenges. Creativity is the ability to generate unique ideas, approaches, and solutions. Creative people usually demonstrate independent behavior, prefer working with minimal or no supervision, and are often impatient with other people. SOURCE: PD:012/2.05 SOURCE: Meyer, E.C., & Allen, K.R. (2006). Entrepreneurship and small business management (p. 51). New York: Glencoe/McGraw-Hill. 74. D Acting independently. Most creative people prefer working with minimal or no supervision. They also exhibit high energy levels, prefer new experiences and variety, and desire recognition and praise. SOURCE: PD:012/2.05 SOURCE: Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [p. 9]. Mason, OH: Thomson/South-Western. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 75. C Have lower start-up costs. The initial cost of business start-ups depends on a number of variables. One factor that influences start-up expense is work space. Because a home-based business is run from the business owner's residential dwelling, it lowers the cost by not having to rent space or build a facility. Entrepreneurial ventures do not guarantee steady income or higher profit margins. The degree of professional training depends on the type of business the entrepreneur is running. Therefore, it cannot be assumed that most home-based business owners require less technical training. SOURCE: PD:066/1.02 SOURCE: PD LAP 4—Own Your Own (Career Opportunities in Entrepreneurship) 76. C A higher demand for more convenience products. As the world becomes more technologically advanced, people work different hours and some are working longer hours. With this in mind, many people are looking for products that make life easier. For example, a grocery store might offer fully cooked entrees and side dishes. These items require little, if any, preparation for eating. Technological and medical advancements have resulted in people living longer. In addition, a large segment of the population, the Baby Boomers, is reaching retirement age and might require more health care and related services. Therefore, health care needs are not reduced. As a result of technological and other advancements, the world is more fast-paced than in previous generations. Consumers generally want faster service response times, not slower response times. An agricultural-based society depends on farming as a way to meet economic needs. The world has shifted to a technological-based society, not an agricultural-based society. SOURCE: PD:066/1.02 SOURCE: PD LAP 4—Own Your Own (Career Opportunities in Entrepreneurship) 77. B Deregulating and reducing taxes. One way governments can support start-up businesses is to make it easier to conduct business by having fewer rules that restrict trade with other companies or countries. Another way governments can support entrepreneurship is by reducing tax obligations for small-business start-ups. Entrepreneurs can use the tax savings to build the business. Ethical standards refer to the unwritten rules that govern each individual's behavior. Exhibiting ethical behavior might enhance one's chances for success in business but does not necessarily encourage entrepreneurial development. Increased interest rates on loans indicate that the business owner is paying more money to start the company. Some entrepreneurs might not feel that they can afford the loan amount and decide not to start the business. Therefore, higher interest rates do not encourage entrepreneurial growth. Governments that pass laws with strict trade guidelines reduce the ability for free trade, thereby discouraging entrepreneurship. SOURCE: PD:066/1.02 SOURCE: PD LAP 4—Own Your Own (Career Opportunities in Entrepreneurship) 78. D Uncertain income. A start-up business owner is not guaranteed a steady paycheck at a fixed pay rate. Therefore, one disadvantage to entrepreneurship is that entrepreneurs do not know exactly when and how much money will be paid to them by their customers. Personal satisfaction is the positive feeling an individual receives from his/her professional efforts. Personal satisfaction is generally considered an advantage in entrepreneurship. Although tax rates vary, lower taxes are considered an advantage to small-business ownership. Tax rates depend on the type of tax, the geographic location of the business, and the type of business. Technological advancements (e.g., the Internet) have provided entrepreneurs more resources for business ideas, financing, networking, and professional development, which is an advantage for aspiring entrepreneurs. SOURCE: PD:066/1.02 SOURCE: PD LAP 4—Own Your Own (Career Opportunities in Entrepreneurship)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 79. C Risk taking. Risk taking refers to the understanding and acceptance of not knowing the outcome of one's actions or circumstances. Flexibility refers to the ability to adapt to changes as they occur. Self-discipline is the ability to train yourself to act in ways that will further your goals. Creativity is the ability to generate unique ideas, goods, or services. SOURCE: PD:066/1.02 SOURCE: PD LAP 4—Own Your Own (Career Opportunities in Entrepreneurship) 80. C The type of training and education that entrepreneurs need depends on the nature of the start-up business. For example, the owner of a new bed-and-breakfast inn might want to get training in various aspects of the hospitality industry. An entrepreneur who wants to be a self-employed architect needs to have a background in drafting and design. This person should also have a college degree. Many successful entrepreneurs have college degrees, but it cannot be assumed that most of them do. Successful entrepreneurs continue their professional development throughout their careers. Some start-up business owners, such as lawyers, need to pass exams to practice their vocation, but it cannot be assumed that most entrepreneurs do. SOURCE: PD:066/1.02 SOURCE: PD LAP 4—Own Your Own (Career Opportunities in Entrepreneurship) 81. D Passion for. Successful entrepreneurs are all passionate and enthusiastic about what they are doing. They enjoy their work, and they often start their businesses so that they can share their natural talents, interests, or hobbies with others. Successful entrepreneurs do not have concerns or reservations about what they are doing; if they did, they wouldn't have started their businesses in the first place. Entrepreneurs certainly are not apathetic or indifferent about what they are doing; they are dedicated to it. SOURCE: PD:066/1.02 SOURCE: PD LAP 4—Own Your Own (Career Opportunities in Entrepreneurship) 82. D What needs to be done. Successful entrepreneurs look for gaps between what is currently being done and what needs to be done. Entrepreneurs find out what customers want or need that isn't currently available, and then they work to fill that demand or need. Looking for gaps between what is currently being done and what was done in the past will not necessarily provide entrepreneurs with insights or opportunities for innovation. Finding out when changes were last made may help an entrepreneur to determine whether what is currently being done is fairly new or old, but again, it won't necessarily help the entrepreneur to develop new ideas. When looking for gaps, entrepreneurs need to compare “apples with apples.” Comparing what is being done with how it is being done compares “apples with oranges.” SOURCE: PD:066/1.02 SOURCE: PD LAP 4—Own Your Own (Career Opportunities in Entrepreneurship) 83. B Optimism. Successful entrepreneurs possess an optimistic attitude. An optimistic person has a positive outlook on life, and looks for the opportunities to grow, even when s/he experiences challenges and setbacks. Organizational skills involve developing and executing processes or activities in a systematic way. Innovation is the process or ability to develop a new product, process, position, or paradigm. Determination is the drive or willpower to achieve a goal. SOURCE: PD:066/1.02 SOURCE: PD LAP 4—Own Your Own (Career Opportunities in Entrepreneurship)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 84. A Irregular paychecks. Entrepreneurs experience many types of challenges as they start and grow their businesses. A financial concern often involves irregular paychecks or unpredictable income. It often takes a while for a new venture to gain business and earn a profit, so the entrepreneur often doesn't receive income or get paid at regular intervals. Long working hours and shorter vacations are factors related to the entrepreneur's personal commitment to his/her business. Production standards are specifications related to the process of making or producing goods and services. SOURCE: PD:066/1.02 SOURCE: PD LAP 4—Own Your Own (Career Opportunities in Entrepreneurship) 85. D Determination. When entrepreneurs are willing to do what it takes to get their businesses up and running, they are determined to make their ventures successful. Determination involves following through with certain actions that may be difficult or unpleasant—such as the willingness to cut back on spending and a willingness to work long hours—to achieve a desired result. Humility is a lack of pride. Organization involves carrying out activities in systematic ways. Objectivity is openmindedness. SOURCE: PD:066/1.02 SOURCE: PD LAP 4—Own Your Own (Career Opportunities in Entrepreneurship) 86. C Aware. A product opportunity is a favorable circumstance that presents itself to provide a good or service that consumers are willing to buy. People identify product opportunities by being attentive to their surroundings, by being aware. Many product opportunities are realized by observing people in various situations. While people are often emotional, decisive, or indifferent, these qualities do not always help them identify new product opportunities. SOURCE: PM:134 SOURCE: Meyer, E.C., & Allen, K.R. (2006). Entrepreneurship and small business management (p. 51). New York: Glencoe/McGraw-Hill. 87. D Personal experiences. A person's experiences—hobbies, interests, or career—often create product opportunities. A product opportunity is a favorable circumstance that presents itself to provide a good or service that consumers are willing to buy. By selling her jewelry on eBay, Jessica is applying her personal experience (e.g., hobby) to act on a product opportunity. Business processes, consumer attitudes, and demographics are important factors that affect business success, rather than identifying this particular product opportunity. SOURCE: PM:134 SOURCE: Meyer, E.C., & Allen, K.R. (2006). Entrepreneurship and small business management (p. 54). New York: Glencoe/McGraw-Hill. 88. D Shifts in population ethnicity. A product opportunity is a favorable circumstance that presents itself to provide a good or service that customers are willing to buy. Kwan discovered a product opportunity to sell Korean goods when a Korean plant built and relocated Korean workers in his community. Because the number of Korean residents increased, the community experienced changes or shifts in population ethnicity. Kwan's store is a way to meet the unfulfilled needs of a very specific market. The example is not a product opportunity resulting from changes in travel habits, differences in priorities, or advancements in technology. SOURCE: PM:134 SOURCE: Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [p. 55]. Mason, OH: Thomson South-Western.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 89. D Timing. Because market opportunity is dependent on wants, timing is often a factor when considering the level of real market opportunity. For example, when engineers at the Ford Motor Company developed the Edsel car, they thought it was a great idea. However, very few people wanted to buy the car. Location can affect the availability of a product in a certain area but does not necessarily affect the level of demand for the product. Reward is a general term used to describe a positive outcome of a specific situation. Methodology is the manner in which a concept, problem, or idea is approached. SOURCE: PM:134 SOURCE: Hisrich, R.D., Peters, M.P., & Shepherd, D.A. (2010). Entrepreneurship (8th ed.) [p. 46]. New York: McGraw-Hill/Irwin. 90. A Come up with as many ideas as possible. Brainstorming is a creative-thinking technique involving the identification of as many different ideas as possible during a certain time frame. The process involves getting ideas out in an open, nonjudgmental environment. Therefore, rating and analyzing ideas are not primary goals during brainstorming sessions. SOURCE: PM:127/2.04 SOURCE: PM LAP 11—Unleash Your Oh! Zone (Techniques for Generating Ideas) 91. C Group members most often generate new ideas by altering or building upon another idea. When more than one person is involved in the creative-thinking process, different types of ideas are often generated because each member has a unique point of view. Often, one member contributes an idea. When this occurs, another member might come up with another idea based on the original idea. The success of group creative-thinking processes depends on many factors including each member's contribution and the situation requiring idea generation. Therefore, it cannot be assumed that one technique is more effective or generates more ideas than another technique. SOURCE: PM:127/2.04 SOURCE: PM LAP 11—Unleash Your Oh! Zone (Techniques for Generating Ideas) 92. A Market opportunity. When a situation exists to fulfill a market's unmet needs, there is a market opportunity. Entrepreneurs and businesses use creative-thinking techniques during the productdevelopment process, which involves finding ways to take advantage of the market opportunity that presents itself. Mind mapping is a creative-thinking technique that involves generating ideas by making associations. To begin the mind-mapping process, you write the problem or market opportunity in the center of a large sheet of paper. From that starting point, you draw lines to other words or phrases that relate to the main idea (problem, or market opportunity), and continue the process by making associations, which generates ideas and identifies possible solutions. The mind-mapping starting point does not begin by writing down supporting facts or primary associations. A situational analysis is a determination of a firm's current business situation and the direction in which the business is headed. SOURCE: PM:127/2.04 SOURCE: PM LAP 11—Unleash Your Oh! Zone (Techniques for Generating Ideas)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 93. A Keep the group on task. A brainstorming session is a creative-thinking activity that businesses often use to generate product ideas. Many businesses find that it is beneficial to have several employees involved in the process because that helps generate a lot of different ideas. A facilitator is a person who guides the brainstorming session. The facilitator helps the group members keep their focus on task, without interfering with the idea-generation process. The facilitator often takes notes and compiles the ideas on a blackboard or a piece of paper, which provides the group members with a visual reference of the ideas or themes that they are discussing. The facilitator should be objective and not judge the ideas as they are being presented. During the brainstorming session, the facilitator should not evaluate the group's creativity or select the best idea. SOURCE: PM:128 SOURCE: WilyWalnut.com. (2001-2010). Twelve brainstorm rules. Retrieved February 14, 2011, from http://www.wilywalnut.com/brainstorm-rules.html 94. C Ask the customers. To compete in the marketplace, a business must develop or find products that will fulfill its customers' changing needs and wants. One way to determine what the customers want is by asking them. Obtaining customer feedback is a good way for a business to evaluate how it is meeting its customers' needs and what it needs to do to increase customer satisfaction. Distributing promotional materials, observing workers, and developing a prospect list are not activities that necessarily help a business identify products that will fulfill its customers' needs. SOURCE: PM:130/2.07 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2002). Marketing essentials (3rd ed.) [p. 550]. Woodland Hills, CA: Glencoe/McGraw-Hill. 95. D Target market. A target market is a particular group of customers that a business seeks to attract. Sometimes, a business can take an existing good or service and change it so it will fulfill the needs of another target market. For example, some products can be altered to accommodate people with certain disabilities. Product mix is the particular assortment of goods and services that a business offers in order to meet its market's needs and its company's goals. Utility is the usefulness of something. Medium is the message channel that a seller uses to promote a good or service. SOURCE: PM:130/2.07 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2006). Marketing essentials (pp. 640641). New York: Glencoe/McGraw-Hill. 96. A No, the name must be legally available for use. The business needs to make sure the brand name is not the property of another company since it is illegal to use another company's brand name. Brand names can be registered with the federal government in order to protect them, but this is not necessary in order to use a brand name that is legally available. SOURCE: PM:126 SOURCE: PM LAP 10—Building Your Corporate Brand (Corporate Branding) 97. B Easy to read and pronounce. If a chain's brand name is short and easy to read and pronounce, it should be easy for customers to recognize and remember the name. A national chain would want to make sure that its name is memorable because it attracts customers from across the country. The chain wants customers to remember its name and visit other locations. Effective brand names should not be similar to the names used by competitors or long and complicated. Businesses would not have to be associated with a specific period of time in order to be remembered. SOURCE: PM:126 SOURCE: PM LAP 10—Building Your Corporate Brand (Corporate Branding)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester One Exam Key 98. D There must be a reason for Jean’s behavior, but he doesn’t know exactly what that reason is. Successful business people develop a tolerance for ambiguity, which means that they accept that it is implausible for them to know everything all the time or exactly what motivates individuals to act in certain ways. Jean may have been mad at Dave, she may have been working so hard that she didn’t notice him, or she may have been trying to follow their supervisor’s instructions to talk less and work more. It’s difficult to determine exactly why she didn’t speak to him, and Dave shouldn’t jump to conclusions. Instead, as a person who is tolerant of ambiguity, he should either talk with Jean later to find out if something is wrong, or he should just let it go and not worry about why she didn’t say hello. SOURCE: Dalton, M., Hoyle, D.G., & Watts, M.W. (2006). Human relations (3rd ed.) [p. 244]. Mason, OH: South-Western Cengage Learning. 99. A Ambiguous. Something that is ambiguous is uncertain and open to multiple interpretations. Since management did not clearly state who would be responsible for completing each of the tasks previously completed by the employees who were laid off, the remaining employees are unsure what management expects each of them specifically to do. Therefore, their job responsibilities are ambiguous. There is no indication whether the employees’ responsibilities are dangerous, easy, and/or prestigious. SOURCE: Strosaker, G. (2010, January 14). Developing a tolerance for ambiguity. Retrieved March 25, 2011, from http://gregstrosaker.com/2010/01/developing-a-tolerance-forambiguity/ 100. C Lose respect for her. During the decision-making process, it is wise to assess the risks of your decisions. Types of risks that individuals may face as a result of their decisions include human risk (e.g., injury, illness, death); operational risk (e.g., lapses in production, insufficient inventory); reputational risk (e.g., loss of employee respect or confidence, damaged reputation in the market); financial risk (e.g., business failure, loss of financing); etc. If Lewis is rude and condescending to Joanna’s other employees or to the customers, it will be clear to these other employees that he is not qualified to be a server. As a result, there is a good possibility that they will lose respect for Joanna, since it will be obvious that Lewis got the job solely because he is related to her. The employees are not likely to increase their productivity, become physically ill, or share their tips with Lewis. SOURCE: Mind Tools. (1996-2011). Risk analysis: Evaluating and managing the risks that you face. Retrieved March 28, 2011, from http://www.mindtools.com/pages/article/newTMC_07.htm

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Semester Two Exam 1. Channel members should share an equal commitment to the product's A. name. C. quality. B. price. D. packaging.

CM:001/4.08 2. Marketers determine distribution intensity so they can achieve A. ideal market exposure. C. perfect market balance. B. complete market coverage. D. total market saturation.

CM:001/4.08 3. Which of the following products would likely use an exclusive distribution pattern: A. A silk necktie C. A home-decorating magazine B. A gallon of milk D. A large piece of farm machinery

CM:001/4.08 4. A channel task should be performed by the channel member who A. performs it best. C. has the most money. B. has the least money. D. wants to perform it.

CM:001/4.08 5. A large car manufacturer purchases materials that it will use to create parts for automobiles. The car manufacturer is a(n) A. retailer. C. industrial user. B. wholesaler. D. agent.

CM:003/4.08 6. What distribution channel is most often used to distribute consumer goods? A. Producer to wholesaler to retailer to consumer B. Producer to retailer to consumer C. Producer to consumer D. Producer to agent to wholesaler to retailer to consumer

CM:003/4.08 7. A hairstylist cutting a client's hair is an example of a __________ distribution channel. A. producer to agent to consumer C. producer to retailer to consumer B. producer to consumer D. producer to wholesaler to consumer

CM:003/4.08 8. Which of the following is a benefit of channels of distribution: A. Producers must spend more money. B. We can more easily obtain products from all over the world. C. Retailers must spend more money. D. We spend more time looking for products we want.

CM:003/4.08 9. Certain product characteristics often require a business to select intermediaries that have specific A. demands. C. limitations. B. needs. D. capabilities.

CM:010/4.09 10. Which of the following are product factors that a business considers when selecting a channel of distribution: A. Unit value, order size, and complexity C. Perishability, location, and order size B. Complexity, perishability, and unit value D. Location, unit value, and order size

CM:010/4.09 11. The Barker Company is determining which channel of distribution to use by considering the number of potential customers in various geographic regions. The company is focusing on A. market factors. C. product benefits. B. branding issues. D. employees' capabilities.

CM:010/4.09

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam 12. During the distribution channel selection process, a producer should consider an intermediary's services, its availability, and its A. policies. C. origins. B. theories. D. scales.

CM:010/4.09 13. Which of the following should be included in a marketing plan's executive summary: A. The organization's mission statement B. A description of the target market(s) C. The names and numbers of marketing team members D. A SWOT analysis chart

MP:007/3.03 14. Which of the following is often included in a marketing plan's situation analysis: A. A SWOT analysis chart B. Performance standards for implementing the plan C. A list of the proposed strategies and programs D. A list of the company's marketing objectives

MP:007/3.03 15. What section of the marketing plan includes information about expected results? A. Appendix C. Situation analysis B. Performance and implementation D. Desired target market

MP:007/3.03 16. Which of the following items might be included in a marketing plan's appendix: A. The organization's mission statement C. A product photograph B. A list of marketing objectives D. A SWOT analysis chart

MP:007/3.03 17. Which of the following is an example of an external change that could affect a business's sales forecast: A. A new sales rep has been hired to develop the company's territory in Texas. B. The population of a town increases when a new hospital opens in the community. C. The company plans to modify its approach to mailing catalogs to customers. D. A company plans to raise prices on its products.

MP:013/5.06 18. Which of the following individuals would a business be most likely to ask for a prediction of next year's sales: A. Financial planner C. Accounting clerk B. Inventory specialist D. Experienced salesperson

MP:013/5.06 19. In which of the following situations should a business lower its sales forecast for the coming year: A. Population will increase by 5%. C. Prices of raw materials remain steady. B. Major competitor will leave the market. D. Inflation rate is expected to rise 2%.

MP:013/5.06 20. The MSV Company developed a sales forecast by considering the opinions of industry experts. This is an example of which of the following sales-forecasting methods: A. Industrial C. Qualitative B. Conditional D. Quantitative

MP:013/5.06 21. What do businesses often take into consideration when forecasting sales for marketing plans? A. Competitors' market share C. Location of regional territories B. Quotas for salespeople D. Company's profit goals

MP:014/5.06 22. Forecasting sales for marketing plans is important because the forecast is used as a A. type of research. C. method of communication. B. standard of measurement. D. compilation of data.

MP:014/5.06 Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam 23. Which of the following is an example of an effective marketing objective that a business might set: A. Identify new local vendors C. Decrease the level of spending B. Hire additional salespeople D. Increase profits by 6% next year

MP:015/5.06 24. Why is it important for businesses to include specific time frames when setting marketing goals and objectives? A. Allows the business to identify the market C. Guides the business in hiring more staff B. Helps the business predict the future D. Keeps the business focused on the goal

MP:015/5.06 25. By setting marketing objectives, businesses are specifying A. what they want to achieve. C. what price they plan to charge. B. how they intend to make a profit. D. how they intend to advertise.

MP:015/5.06 26. One reason why businesses select marketing metrics is to use them as a(n) A. measurement tool. C. promotional activity. B. operating strategy. D. selling procedure.

MP:016/5.06 27. Businesses often select marketing metrics that will help them compare current market share with A. market potential. C. brand recognition. B. inventory turnover. D. transaction size.

MP:016/5.06 28. The marketing metrics that businesses select should relate directly to the __________ of the marketing plan. A. demographics C. objectives B. organization D. environment

MP:016/5.06 29. What does a business need to consider when developing a marketing budget? A. Cost of performing marketing activities C. Value of spending money on advertising B. Forecasts of future sales figures D. Expense associated with offering credit

MP:017/5.06 30. A primary reason for establishing a marketing budget is that it helps a business to A. reduce tax liability. C. manage depreciation. B. monitor fixed assets. D. control spending.

MP:017/5.06 31. When do businesses usually set the marketing budget? A. Before segmenting customers C. After identifying standards B. Before analyzing markets D. After determining objectives

MP:017/5.06 32. When an business allocates a certain amount of money in relation to the amount of goods and services that it sold the previous year, it is setting its marketing budget by A. using the percentage-of-sales method. B. reviewing industry standards. C. considering its competitors' activities. D. obtaining bids for various marketing activities.

MP:017/5.06 33. The marketing objectives that a business develops for its marketing plan should lead to a(n) A. increase in sales. C. decrease in costs. B. increase in prices. D. decrease in taxes.

MP:018/5.06

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam 34. Why would a manager of a local business keep track of the prices that similar businesses in the area are charging? A. To remain competitive C. To promote an image B. To improve advertising D. To offer new services

PI:001/5.01 35. Which of the following is an example of a business using a flexible pricing policy: A. Establishing prices that are competitive B. Lowering prices during bad economic times C. Setting prices as low as possible D. Charging prices that customers expect to pay

PI:001/5.01 36. When the costs of raw materials increase considerably, a business is likely to A. maintain similar profit margins as its competitors. B. implement a long-term markup pricing policy. C. continue following the same pricing strategies. D. increase the selling price of the product.

PI:001/5.01 37. The price function often influences the place function by determining A. when the product is made. C. how the product is advertised. B. why the product is shipped. D. where the product is sold.

PI:001/5.01 38. Why do some new companies set their selling prices as low as they can? A. To get market share as fast as possible C. To earn a high return on investment B. To eliminate all possible competition D. To quickly make a large profit

PI:002/5.01 39. What is the purpose of sales-oriented pricing objectives? A. To increase the total amount of sales income B. To create profits for the business C. To increase the return on investment D. To guarantee the survival of the business

PI:002/5.01 40. One reason why the target market of a business affects its pricing is because consumers in each target market A. monitor the industry standard. C. prefer products in the growth stage. B. expect a large product mix. D. judge the value of products differently.

PI:002/5.01 41. During which stage of the product life cycle is a business likely to try to stabilize a product's price? A. Expansion C. Obsolescence B. Introductory D. Maturity

PI:002/5.01 42. What is the break-even point in units for a business whose total fixed costs are $325,500, selling price per unit is $18, and variable cost per unit is $15.50? A. 120,250 C. 150,500 B. 130,200 D. 180,550

PI:006/5.02 43. Clyde rented an ice-cream truck in order to earn money for college in the fall. His truck rental is $200 per week and has a yearly license fee of $52. It costs him $200 for 500 ice-cream bars that he plans to sell for $1.10 each. How many ice-cream bars must Clyde sell each week in order to reach the break-even point? A. 360 C. 201 B. 252 D. 288

PI:006/5.02

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam 44. Calculate the break-even point in dollars if a business has total fixed costs of $875,000; the unit selling price is $1,200; and the variable cost per unit is $700. A. $2,700,000 C. $1,200,000 B. $1,500,000 D. $2,100,000

PI:006/5.02 45. A business bought 144 items at $6.50 each and 120 items at $3.75 each. With a 10% off-season discount, the total cost to the business is A. $1,119.27. C. $1,247.40. B. $1,206.93. D. $1,386.00.

PI:019/5.02 46. What is the final cost to the business of a product priced at $40 with a 20% trade discount? A. $35 C. $22 B. $25 D. $32

PI:019/5.02 47. A business determines the final cost of a product purchased for resale by subtracting allowed discounts and transportation charges from the A. list price. C. operating expenses. B. net profit. D. accounts receivable.

PI:019/5.02 48. Businesses should set their selling prices at a level that will A. be lower than that of competitors. C. be equal to the cost of goods. B. cover expected markdowns and expenses. D. ensure a high percent of profit.

PI:007/5.02 49. Which of the following is an appropriate selling price for a product with total costs of $10.00 and a gross margin of $5.00: A. $7.50 C. $10.00 B. $15.00 D. $5.00

PI:007/5.02 50. Establish a selling price from the following information: cost, $8.45; operating expenses, $.50; and profit, $.80. A. $9.25 C. $9.75 B. $8.95 D. $7.15

PI:007/5.02 51. What primary factors do business owners consider when determining the ceiling prices of their products? A. Service fees and competition C. Interest rates and supply B. Promotional efforts and cost D. Consumer perceptions and demand

PI:007/5.02 52. Which of the following does effective product/service management help businesses to do: A. To barter C. To compete B. To prospect D. To recruit

PM:001/4.03 53. When considering a new product for your company, you decide to introduce the product in only three states for a six-month period. This is known as A. product development. C. commercialization. B. feasibility analysis. D. test marketing.

PM:001/4.03 54. Which of the following is a characteristic of pure services: A. Uses plain, inexpensive packaging C. Does not include a tangible product B. Most often uses product-bundling strategies D. Does not include product guarantees

PM:001/4.03

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam 55. Product/service management is a marketing function that involves obtaining, developing, maintaining, and improving a product or service mix in response to A. government oversight. C. market opportunities. B. competitors only. D. CEO wishes.

PM:001/4.03 56. Sandy opened a small business that carries a very wide variety of products of varying qualities at many different prices. Sandy is losing customers who are disappointed with the selection, quality, and quantity of items. What is lacking in Sandy's product mix? A. Consistency C. Depth B. Breadth D. Width

PM:003/4.04 57. Which of the following is an example of a company's using brand extension: A. Coca-Cola adding Caffeine-Free Diet Coke B. Winn-Dixie installing an ATM machine in its stores C. Tyson packaging smaller portions of chicken for the elderly D. Kroger adding Blue Bell ice cream to its frozen foods section

PM:003/4.04 58. Which of the following factors helps a business to determine its product mix: A. Merchandise breadth and depth C. Staple goods and regular goods B. Size and target market D. Seasonal goods and convenience goods

PM:003/4.04 59. To appeal to a target market with slightly different needs, a business decides to add a group of related items to its product mix. This is called a A. service expansion. C. line extension. B. product replacement. D. product enhancement.

PM:003/4.04 60. The product mix that a business decides to offer customers helps to project the business's A. display themes. C. service style. B. sales goals. D. unique image.

PM:006/4.04 61. One way for a business to expand its product mix is by A. monitoring its products' life cycles. C. increasing sales quotas. B. acquiring another company. D. analyzing product width decisions.

PM:006/4.04 62. When a business expands its product mix, its goal is to appeal to A. fewer market segments with fewer product options. B. more market segments with a wider variety of options. C. existing market segments using more promotion. D. select market segments using less promotion.

PM:006/4.04 63. Due to lackluster sales, the Elba Corporation has decided to eliminate several of its product lines. Elba's executives hope that by focusing on fewer product lines, they will see more profit. The Elba Corporation is planning to adjust the _________ of its product mix. A. depth C. width B. length D. height

PM:006/4.04 64. When considering the services to offer customers, a business should determine if a specific service would A. enhance customer-satisfaction levels. C. offend the business's existing competitors. B. increase the amount of customer returns. D. stabilize variable interest rates.

PM:036/4.06 Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam 65. A business is extending its operating hours to accommodate its customers. Which of the following is a business cost associated with this service: A. Higher payroll expenses C. Higher profit margins B. Increased sales volume D. Increased customer satisfaction

PM:036/4.06 66. When a business offers a service that saves time for a customer, its benefit to the customer is A. price. C. consistency. B. convenience. D. quantity.

PM:036/4.06 67. Which of the following is a benefit to businesses of offering customized services to their customers: A. Businesses charge higher prices for customized services, which can lead to higher profit margins. B. Businesses save time by offering customized services to their customers. C. Customized services are also considered to be standardized services. D. By customizing their services, businesses deliver more consistent products to their customers.

PM:036/4.06 68. When a business presents a service to the marketplace by emphasizing its economic value, the business is positioning the product on the basis of its A. benefits. C. features. B. price. D. competitors.

PM:042/4.05 69. A business that emphasizes a product's environmental friendliness is positioning the product by focusing on A. price. C. attributes. B. competition. D. reliability.

PM:042/4.05 70. When a business emphasizes a product's degree of excellence, it is positioning the product by its A. competition. C. market. B. quality. D. skill.

PM:042/4.05 71. If the XOB Company wants to emphasize the advantages of its product in comparison to similar products in the marketplace, it should position its product in relation to A. competitors. C. markets. B. consumers. D. applications.

PM:042/4.05 72. Marketers often condense USPs into short slogans because A. a successful USP is always very short. B. all work team members must memorize them. C. there cannot be product differentiation through any other means. D. customers tend to remember just one thing from an advertisement.

PM:272/4.07 73. If your company cannot fulfill its USP, it will A. go bankrupt. B. spend more money.

C. lose credibility. D. gain business.

PM:272/4.07 74. Before identifying your company's USP, ask yourself if A. you really need one to be successful. C. you already have one without realizing it. B. you can afford the advertising costs. D. there are any successful ones you can copy.

PM:272/4.07

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam 75. To guard your USP from competitors, you should A. repeat it as much as possible. B. print it in a foreign language.

C. make it difficult to understand. D. avoid letting it become public.

PM:272/4.07 76. Which of the following locations would be most appropriate for a small business selling convenience products such as groceries that customers purchase on a regular basis: A. Downtown shopping area C. Regional shopping center B. Neighborhood shopping center D. Super-regional shopping center

PM:132/4.07 77. Businesses receive positive feedback about the effectiveness of their promotional messages when consumers A. see their advertisements. C. visit their competitors. B. ask specific questions. D. buy their products.

PR:001/5.03 78. One of the main goals of promotion in marketing is to A. select media. C. create desire. B. develop a message. D. monitor feedback.

PR:001/5.03 79. An important objective of promotion is to __________ buyers. A. intimidate C. deceive B. inform D. delude

PR:001/5.03 80. Which of the following are internal factors that affect the way a business uses promotional tools: A. Demand and product C. Product and price B. Price and competition D. Place and demand

PR:001/5.03 81. Public-service promotions often are used to inform consumers about __________ issues. A. questionable C. noncontroversial B. controversial D. negative

PR:002/5.03 82. An ad for Kleenex tissues in Ladies Home Journal is an example of what type of advertising? A. Trade C. Product B. Institutional D. Business

PR:002/5.03 83. Which of the following is a use of product promotion: A. Highlighting social or environmental issues B. Informing consumers about product features

C. Recruiting new employees D. Changing attitudes toward the company

PR:002/5.03 84. A company produces an advertisement that informs consumers about its commitment to recycling materials and controlling pollution. This is an example of A. institutional promotion. C. cooperative advertising. B. product promotion. D. personal selling.

PR:002/5.03 85. The use of samples or cents-off coupons on grocery items is an example of A. publicity. C. advertising. B. personal selling. D. sales promotion.

PR:003/5.03 86. The local newspaper ran a story about Amy's Shoe Store and its donation of 100 pairs of shoes to those in need. This act by the local newspaper is an example of A. personal selling. C. advertising. B. sales promotion. D. publicity.

PR:003/5.03 Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam 87. It is appropriate for a business to use personal selling as a key element of the promotional mix when the product is A. in the declining stage of the life cycle. C. very inexpensive. B. highly technical. D. simple to assemble and operate.

PR:003/5.03 88. When a business places a new product on the market, each element of the promotional mix should be designed to A. inform consumers about the existence of the product. B. point out differences among competing products. C. remind customers about the benefits of the product. D. reinforce the company's image.

PR:003/5.03 89. Newspapers and magazines are categorized as __________ media. A. time C. publications B. broadcast D. direct

PR:007/5.04 90. Repeated exposure to the largest, most diverse population of people is a benefit of ___________ advertising. A. out-of-home C. directory B. newspaper D. radio

PR:007/5.04 91. Text-message advertising is most likely to be successful when the ads are A. sent anonymously. B. delivered to the cell-phone numbers of people interested in the product. C. randomly sent to a mass audience of cell-phone subscribers. D. lengthy in nature.

PR:007/5.04 92. Radio commercials are a form of advertising that is transmitted through __________ media. A. print C. web-based B. broadcast D. out-of-home

PR:007/5.04 93. When beginning to develop a promotional plan, it is important for a business to A. compile a list of activities. C. become an active networker. B. decide on its promotional strategy. D. define its promotional goals.

PR:097/5.05 94. Which of the following is an example of a measurable objective that a business might include in its promotional plan: A. Distribute 500 flyers by March 1 C. Tell people about the business B. Design a new flyer D. Run an ad in several newspapers

PR:097/5.05 95. What are the primary elements that businesses should include in a comprehensive promotional plan? A. Media placement specifications and costs B. Sales quotas and advertising run dates C. Product pricing policies and industry analysis D. Competitor analysis and international advertising objectives

PR:097/5.05 96. Which of the following characteristics is descriptive of a meaningful company objective: A. Measurable C. General B. Vague D. Unlimited

SM:008/4.02

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam 97. Which of the following is a reason why managers develop company objectives: A. To identify business purpose C. To solve operating problems B. To forecast sales potential D. To communicate with employees

SM:008/4.02 98. Managers use the broad objectives they develop for a business as the basis for setting A. benefit levels. C. salary ranges. B. performance targets. D. recruitment quotas.

SM:008/4.02 99. An effective mission statement should effectively reflect the business's A. touch points. C. ethics policies. B. specific goals. D. core values.

SM:009/4.02 100. Metrics that gauge the market's buying habits and attitudes relate to the A. brand. C. pricing. B. customer. D. profitability. SM:024/-

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 1. C Quality. Channel members should share an equal commitment to the product's quality. Channels are effective only when channel members share this common goal. Channel members may not have an equal commitment to a product's price, name, or packaging. SOURCE: CM:001/4.08 SOURCE: CM LAP 2—Chart Your Channels (Channel Management) 2. A Ideal market exposure. Marketers determine distribution intensity so they can achieve ideal market exposure—that is, they want to make their product available to each and every customer who might buy it, but they don't want to over-distribute the product and waste money. This condition is not known as complete market coverage or total market saturation—ideal market exposure often does not cover an entire market. It is also not referred to as perfect market balance. SOURCE: CM:001/4.08 SOURCE: CM LAP 2—Chart Your Channels (Channel Management) 3. D A large piece of farm machinery. Exclusive distribution means selling a product through just one middleman in a geographic area. Marketers use this method when they need to maintain tight control over a product. This is why exclusive distribution is often used for specialty products that are technical in nature or require specialized services such as installation or repair. Examples of these products are airplanes and large machinery. Milk and magazines are examples of convenience products, which usually use intensive distribution patterns. A silk necktie is an example of a consumer shopping good, which usually uses a selective distribution pattern. SOURCE: CM:001/4.08 SOURCE: CM LAP 2—Chart Your Channels (Channel Management) 4. A Performs it best. A channel task should be performed by the channel member who performs it best. This allows the channel to be more effective and efficient and benefits all channel members. Channel tasks should not be assigned based on how much money a member has or a level of desire to perform the task. SOURCE: CM:001/4.08 SOURCE: CM LAP 2—Chart Your Channels (Channel Management) 5. C Industrial user. An industrial user is a business that buys materials, services, or goods that will be used to make other goods or which will be used in the operation of the company. A retailer is a business that buys goods and sells them to the final consumer. Agents are intermediaries who assist in the sale of goods but do not take title to them. Wholesalers are intermediaries who buy goods from producers or agents and resell them to other businesses. SOURCE: CM:003/4.08 SOURCE: CM LAP 1—Channel It (Channels of Distribution) 6. A Producer to wholesaler to retailer to consumer. The majority of consumer products are distributed through an indirect channel. Most retailers, such as hotel gift shops, cannot buy the large quantities producers sell, so producers use wholesalers to sell to the smaller retailers. Wholesalers buy large quantities from producers and divide them into smaller units for sale to retailers. SOURCE: CM:003/4.08 SOURCE: CM LAP 1—Channel It (Channels of Distribution)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 7. B Producer to consumer. When a service provider performs an activity for a client (e.g., hairstylists), this is a direct channel of distribution. All of the other alternatives involve one or more intermediaries between the producer and the consumer. These are examples of indirect channels of distribution. SOURCE: CM:003/4.08 SOURCE: CM LAP 1—Channel It (Channels of Distribution) 8. B We can more easily obtain products from all over the world. Channels of distribution allow consumers, industrial users, producers, and other channel intermediaries to save time and money. They also allow us to more easily obtain products from all over the world, since we do not have to travel and search for each individual item we wish to purchase. SOURCE: CM:003/4.08 SOURCE: CM LAP 1—Channel It (Channels of Distribution) 9. D Capabilities. Some products require special handling while moving through the distribution channel. Perishable goods, bulk items, liquids, toxic chemicals, and temperature-sensitive items all require special handling. Therefore, when producers select intermediaries, they must often consider the capabilities of intermediaries to handle such products. When several options are available, the business usually considers its specific needs rather than the intermediary's needs or demands during the channel selection process. The business is not likely to select an intermediary that has limitations, because the intermediary cannot provide the required services. SOURCE: CM:010/4.09 SOURCE: Etzel, M.J., Walker, B.J., & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 381-382]. Boston: McGraw-Hill/Irwin. 10. B Complexity, perishability, and unit value. When a business selects a channel of distribution, it considers many factors, including the type of product that the business is selling. For example, the more complex, perishable, and expensive the product is, the more likely the business will select a short channel of distribution. Order size and location are market considerations. SOURCE: CM:010/4.09 SOURCE: Etzel, M.J., Walker, B.J., & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 390-391]. Boston: McGraw-Hill/Irwin. 11. A Market factors. When a business selects its channels of distribution, it considers market factors, including the geographic location of the target market. If a target market is clustered in a few geographic regions, a business might decide that it would be cost effective and more efficient to sell direct than it would be to sell through several wholesalers. On the other hand, if the target market covers several large geographic regions, the business might use several wholesalers or set up regional sales offices and/or distribution centers. Other market factors that a business considers include the type of market and the average size of an order. Branding issues and product benefits are product factors that the business considers, and employees' capabilities are organizational factors that the business considers. SOURCE: CM:010/4.09 SOURCE: Etzel, M.J., Walker, B.J., & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 390-391]. Boston: McGraw-Hill/Irwin.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 12. A Policies. When a business selects a channel of distribution, it must consider whether it is feasible to use a certain intermediary (i.e., wholesaler, retailer). Some factors that the business must consider include an intermediary's capabilities (e.g., services) and its policies. If the producer's and an intermediary's policies are incompatible, there is likely to be conflict, which can create ongoing relationship problems. Therefore, the producer would want to select another intermediary whose policies align closely to its own policies. The producer would not consider theories, origins, or scales when selecting a channel of distribution. SOURCE: CM:010/4.09 SOURCE: Etzel, M.J., Walker, B.J., & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 390-391]. Boston: McGraw-Hill/Irwin. 13. A The organization's mission statement. The executive summary serves as an introduction to the marketing plan and should include the organizational mission statement. A description of the target market(s) is included in the section for desired target market. The names and numbers of marketing team members are not included in a marketing plan. A SWOT analysis chart is included in the situation analysis section. SOURCE: MP:007/3.03 SOURCE: MP LAP 1—A Winning Plan (Nature of Marketing Plans) 14. A A SWOT analysis chart. A SWOT analysis chart is often included in a marketing plan's situation analysis section. The chart summarizes the company's internal strengths and weaknesses as well as its external opportunities and threats. Performance standards for implementing the plan are listed in the performance and implementation section. A list of proposed strategies and programs can be found in the marketing strategies section. A list of marketing objectives can be found in the marketing objectives and issues section. SOURCE: MP:007/3.03 SOURCE: MP LAP 1—A Winning Plan (Nature of Marketing Plans) 15. B Performance and implementation. The performance and implementation section of a marketing plan details expected results and performance measurements. It also includes the marketing team's plans for adjustments that can be made if progress doesn't occur. The appendix contains charts, graphs, and other miscellaneous items related to the marketing plan. Situation analysis is the determination of the company's current marketing situation. Desired target market is a section that contains demographical information about the customers the company is trying to reach. SOURCE: MP:007/3.03 SOURCE: MP LAP 1—A Winning Plan (Nature of Marketing Plans) 16. C A product photograph. A product photograph might be included in a marketing plan's appendix. The appendix contains charts, graphs, and other miscellaneous items related to the plan. It would not include a list of marketing objectives (those would be in the marketing objectives section), the organization's mission statement (that would be in the executive summary), or a SWOT analysis chart (that would be in the situation analysis). SOURCE: MP:007/3.03 SOURCE: MP LAP 1—A Winning Plan (Nature of Marketing Plans)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 17. B The population of a town increases when a new hospital opens in the community. External changes occur outside the business, and the business has no control over these changes. Examples of external changes that may affect sales forecasts are population changes, economic changes, competitive changes, and market changes. Internal changes, on the other hand, are circumstances that occur within a business over which the business has some degree of control. Such factors would include changes in personnel, promotion, and pricing. SOURCE: MP:013/5.06 SOURCE: Fastlinksolutions. (n.d.). Sales forcasting: Factors that influence sales. Retrieved April 21, 2011, from http://www.fastlinksolutions.co.uk/calculat.htm#factors 18. D Experienced salesperson. Many businesses use qualitative methods of forecasting sales that are based on expert opinion and personal experience. Companies often prepare their sales forecasts by asking knowledgeable individuals, such as experienced salespeople, to state their opinions or predictions. The predictions of sales representatives are based on what they have seen happen in the past as well as on current observations of the economy or of the industry. Inventory specialists help to keep track of the goods a business has on hand. Financial planners help individuals make investments and plan for financial security. Accounting clerks help to maintain a business's routine financial records. These people usually do not have first hand information about sales that would help a business forecast next year's sales. SOURCE: MP:013/5.06 SOURCE: Tanner, J.F., Honeycutt, E.D., & Erffmeyer, R.C. (2009). Sales management: Shaping future sales leaders (p. 303). Upper Saddle River, NJ: Prentice Hall. 19. D Inflation rate is expected to rise 2%. Changes in the economy affect sales and, thus, sales forecasting. When the economy takes a downturn for any reason, such as a 2% rise in inflation, consumers' disposable income is reduced, and sales of consumer products generally decline. A business should consider economic changes when forecasting sales and lower its expectations for the coming year if it thinks consumers will not be able to buy as much of its product as in the past. A business might consider raising its sales forecast if the population will increase by 5% or a major competitor will leave the market. The sales forecast might stay the same if the prices of raw materials remain steady. SOURCE: MP:013/5.06 SOURCE: Fastlinksolutions. (n.d.). Sales forcasting: Factors that influence sales. Retrieved April 21, 2011, from http://www.fastlinksolutions.co.uk/calculat.htm#factors 20. C Qualitative. When a business considers the opinions and personal experience of others to develop its sales forecast, it is using the qualitative sales forecasting method. When the business uses quantitative sales forecasting methods, it uses numerical data to predict future sales. Conditional and industrial are not sales-forecasting methods. SOURCE: MP:013/5.06 SOURCE: Soloman, M.R., Marshall, G.W., & Stuart, E.W. (2008). Marketing: Real people, real choices (5th ed.) [pp. 116-120]. Upper Saddle River, NJ: Pearson Prentice Hall.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 21. A Competitors' market share. Market share is a business's portion of the total industry sales in a specific market. Since one business usually does not have all of the sales in one market, it is important to consider its competitors' market share when forecasting sales. For example, if competitors currently sell to 75% of the market, it would be unrealistic for a business to predict that it could obtain a 50% market share next year. However, the business might increase its sales forecast from 25% of the market to 30% if there were indications that it was becoming more competitive. When forecasting sales for marketing plans, businesses do not consider quotas for salespeople, location of regional territories, or company profit goals. SOURCE: MP:014/5.06 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (pp. 599600). New York: Glencoe/McGraw-Hill. 22. B Standard of measurement. A sales forecast is an integral part of a marketing plan because it estimates sales revenue for a future period of time. An accurate sales forecast is important because businesses often use the forecast as a standard of measurement to evaluate the business's actual performance. Without a forecast, businesses would not be able to evaluate the results of implementing the marketing plan because there was not a specific sales goal to achieve. Businesses use research to develop a sales forecast. The forecast itself is not a method of communication. Data are compiled to develop a sales forecast. SOURCE: MP:014/5.06 SOURCE: Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (p. 267). Mason, OH: South-Western Cengage Learning. 23. D Increase profits by 6% next year. Marketing objectives are the goals a business seeks to reach with the marketing plan. To be effective, marketing objectives should be specific and indicate a certain time period. Increase profits by 6% next year is an effective objective because it clearly states the goal to achieve, which is a 6% increase in profits. It also includes a period of time, which is to achieve that goal next year. Once a business sets a specific objective, it can develop marketing strategies to achieve the objective. Hiring additional salespeople and identifying new local vendors might be strategies a business will develop to achieve the goal. Decreasing the level of spending is not an effective objective because it is not specific and does not state a time period. SOURCE: MP:015/5.06 SOURCE: Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (p. 41). Mason, OH: South-Western Cengage Learning. 24. D Keeps the business focused on the goal. An effective marketing objective should include a specific time period. For example, achieving a 5% increase in sales this year over last year is an effective objective. The business knows that it wants to accomplish this within one year. Now, the business can focus on developing strategies and tactics to achieve the objective. If the objective is vague and doesn't set a time limit, the business does not have a clear goal. Then, it may take years to achieve the objective because the business is not focused on accomplishing it within a specific time period. Including specific time frames does not help the business predict the future, guide the business in hiring more staff, or allow the business to identify the market. SOURCE: MP:015/5.06 SOURCE: Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (p. 41). Mason, OH: South-Western Cengage Learning.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 25. A What they want to achieve. Marketing objectives are the goals a business seeks to reach with its marketing plan. The objectives specify what the business wants to achieve, such as a 5% increase in market share during the next 12 months. Once a business sets its marketing objectives, it develops specific strategies, or plans of action, for achieving the objectives. Marketing objectives do not specify how businesses intend to make a profit, what price they plan to charge, or how they intend to advertise. These factors might be the basis of marketing strategies. SOURCE: MP:015/5.06 SOURCE: Meyer, E.C., & Allen, K.R. (2006). Entrepreneurship and small business management (p. 207). New York: Glencoe/McGraw-Hill. 26. A Measurement tool. Businesses select marketing metrics to use them as a tool to measure or evaluate various aspects of the marketing plan. The metrics are specific to the aspect being measured and are intended to track success. For example, a business might select metrics to measure the effect of certain pricing strategies on sales revenue. Businesses do not select marketing metrics to use them as an operating strategy, a promotional activity, or a selling procedure. SOURCE: MP:016/5.06 SOURCE: Davis, J. (2007). Measuring marketing: 103 key metrics every marketer needs (pp. 35). Hoboken, NJ: John Wiley & Sons. 27. A Market potential. The use of marketing metrics enables businesses to evaluate and measure specific aspects of their marketing plans. One aspect of a plan usually involves a business's current market share because the goal of most marketing plans is to increase market share. Market share is a business's portion of the total industry sales in a specific market. The total industry sales is the market potential. By comparing current market share with market potential, a business will be able to measure the ability of its marketing efforts to increase market share. Businesses do not compare market share with inventory turnover, brand recognition, or transaction size. SOURCE: MP:016/5.06 SOURCE: Davis, J. (2007). Measuring marketing: 103 key metrics every marketer needs (pp. 35). Hoboken, NJ: John Wiley & Sons. 28. C Objectives. The objectives of the marketing plan are the goals a business seeks to reach with its marketing plan. To determine if the goals are reached, a business selects marketing metrics to measure performance. To be effective, these metrics should relate directly to the objectives. For example, if one objective is to increase sales by 5% in six months, one metric should evaluate the results to determine if the goal was achieved. Marketing metrics do not relate directly to the organization, demographics, or environment of the marketing plan. SOURCE: MP:016/5.06 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (pp. 35-36). New York: Glencoe/McGraw-Hill.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 29. A Cost of performing marketing activities. Businesses need to develop budgets to set aside the funds that will be needed to perform marketing activities. Before they can develop budgets, they need to determine the cost of performing those marketing activities. For example, businesses need to consider wages paid to employees and the cost of buying supplies. Once a business calculates all the costs involved, it can develop a budget to fund the marketing activity. It is not effective to develop marketing activities without setting a budget to pay for the activities. Businesses do not consider forecasts of future sales figures, value of spending money on advertising, or the expense associated with offering credit when developing a marketing budget. SOURCE: MP:017/5.06 SOURCE: Burrow, J.L. (2002). Marketing (p. 542). Mason, OH: South-Western. 30. D Control spending. A budget is an estimate of income and expense for a specific time. By predicting income and expense for a certain time, the business can control finances and spending in many areas, including marketing. Assets are anything of value that the business owns. Depreciation is the reduction in value of goods occurring over time. Reducing tax liability is not a primary reason for setting a marketing budget. SOURCE: MP:017/5.06 SOURCE: Clark, B., Sobel, J., & Basteri, C.G. (2006). Marketing dynamics (p. 39). Tinley Park, IL: Goodheart-Willcox. 31. D After determining objectives. Businesses set the marketing budget to allocate sufficient funds to cover the cost of implementing the marketing plan. Before setting the marketing budget, they should determine the marketing objectives. Businesses need to decide what they want to accomplish before they can set aside the funds to achieve those goals. Businesses set the marketing budget after analyzing markets and segmenting customers, but before identifying standards. SOURCE: MP:017/5.06 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (p. 35). New York: Glencoe/McGraw-Hill. 32. A Using the percentage-of-sales method. A budget is an estimate of income and expense for a specific time. A budget helps a business monitor and control its marketing expenses. Businesses consider many factors when setting their marketing budgets—economic conditions, competitors' activities, industry standings, and their own sales histories. Some businesses set their marketing budgets on the basis of sales per unit they sold or sales dollars they generated during a previous timeframe, which is the percentage-of-sales budgeting method. When a business uses the task method to set its marketing budget, it considers all of the internal and external costs associated with the specific marketing activities that it wants to do, which often involves obtaining bids or estimates from vendors that will carry out the activities. SOURCE: MP:017/5.06 SOURCE: Perreault, W.D., Cannon, J.P., & McCarthy, E.J. (2008). Basic marketing: A marketing strategy planning approach (16th ed.) [pp. 390-391]. Boston: McGraw-Hill/Irwin.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 33. A Increase in sales. Marketing objectives are the goals a business seeks to reach with its marketing plan. The overall purpose of developing marketing objectives is to increase sales. If the objectives do not result in an increase in sales, the business should develop different marketing objectives. For example, a goal might be to increase its customer base by 10% in one year, which will lead to an increase in sales. A marketing plan is a set of procedures or strategies for attracting the target customer to a business. Therefore, the marketing objectives focus on customers and sales rather than a decrease in costs, an increase in prices, or a decrease in taxes. SOURCE: MP:018/5.06 SOURCE: Small Business Notes. (n.d.). Marketing plan: Marketing objectives and strategies. Retrieved April 21, 2011, from http://www.smallbusinessnotes.com/planning/marketingplan/marketplanobjectives.html 34. A To remain competitive. Businesses need to be aware of the prices being charged by similar businesses in the area. One business would not want to charge significantly more than its local competitors are charging for similar goods and services. If a business does not monitor what others are charging and sets high prices, it might lose customers because it is not competitive. Businesses do not keep track of the prices that similar businesses are charging in order to improve their advertising, offer new services, or promote an image. However, businesses may follow the lead of their competitors when developing advertising, offering new services, and promoting an image. SOURCE: PI:001/5.01 SOURCE: PI LAP 2—The Price Is Right (Nature of Pricing) 35. B Lowering prices during bad economic times. Because pricing is a tug-of-war, businesses need to be flexible and willing to adjust their prices. These adjustments can be increases or decreases, depending on the circumstances faced by the business. For example, during bad economic times, customers are cautious about how they spend their money. To attract these customers, the business may need to lower its prices. Setting prices as low as possible is often not effective because if the price is lower than expected, the customer may not buy. A competitive pricing policy involves establishing prices that are comparable to those charged by competitors. Charging prices that customers expect to pay is an example of a realistic pricing policy. SOURCE: PI:001/5.01 SOURCE: PI LAP 2—The Price Is Right (Nature of Pricing) 36. D Increase the selling price of the product. Many factors affect a product's price. When the costs of the raw materials to make a product increase, many businesses pass the increase on to the end user by charging a higher selling price. Although a business may change its pricing policies, strategies, and profit margins, these actions are dependent on many factors (e.g., economic conditions, demand) other than the costs of raw materials. SOURCE: PI:001/5.01 SOURCE: PI LAP 2—The Price Is Right (Nature of Pricing)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 37. D Where the product is sold. The place function involves shipping, handling, and storing of items and determining when and where they will be available. Pricing affects the place decision by determining where the product is sold. Products with high prices usually are sold in stores that carry expensive items, while products with low prices often are sold in other types of stores, such as discounters. The price function does not influence the place function by determining why the product is shipped, how the product is advertised, or when the product is made. SOURCE: PI:001/5.01 SOURCE: PI LAP 2—The Price Is Right (Nature of Pricing) 38. A To get market share as fast as possible. Businesses may use selling price to obtain a share of the market, to enlarge the share they already have, or to maintain that share. For example, some new companies set low prices in order to get as much of the market as possible right from the start. They feel that they will benefit over time because the customers who are attracted by the low prices will become regular customers. Because the selling prices are low, the business will not make a large profit or earn a high return on investment. It is illegal for businesses to deliberately set prices so low that they eliminate all competition. SOURCE: PI:002/5.01 SOURCE: PI LAP 3—Make Cents (Factors Affecting Selling Price) 39. A To increase the total amount of sales income. The purpose of sales-oriented pricing objectives is to increase the total amount of income from sales. There are two ways a business can do this. One way is to charge low prices in an effort to increase the volume of sales. The alternative is to charge high prices in an effort to increase the dollar value of its sales. The purpose of profit-oriented pricing objectives are focused on creating profits for the business. Some of the objectives a business might achieve through profit-oriented pricing include survival of the business and return on investment. SOURCE: PI:002/5.01 SOURCE: Witiger.com. Pricing objectives. Retrieved April 21, 2011, from http://www.witiger.com/marketing/pricingobjectives.htm 40. D Judge the value of products differently. The target market of a business affects its pricing because, even in the same market, not all customers see price from the same point of view. Some customers see low price as an indicator of low quality, while others see low price as a bargain. Or, some customers see high price as an indicator of high quality, while others see it as a poor value for the price. Therefore, businesses need to determine what price range will be accepted in their markets. Consumers in each target market do not necessarily expect a large product mix, prefer products in the growth stage, or monitor the industry standard. SOURCE: PI:002/5.01 SOURCE: PI LAP 3—Make Cents (Factors Affecting Selling Price)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 41. D Maturity. The product life cycle refers to the stages that goods and services move from the time they are introduced on the market until the time they are taken off the market. The life cycle of the product affects how it is priced. During the maturity stage of the product's life, the product is firmly in the marketplace, its sales peak, and then sales increase at a slower rate, before beginning to decline. During the maturity stage, the business focuses its efforts on stabilizing prices so it can maintain a share of the market. During the introductory stage, the business usually prices a product higher to enable the business to recover its investment in the new product. As the product enters obsolescence, sellers reduce prices to get rid of it. Expansion is a stage in the business life cycle, not the product life cycle. SOURCE: PI:002/5.01 SOURCE: Etzel, M.J., Walker, B.J., & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 242-243]. Boston: McGraw-Hill/Irwin. 42. B 130,200. To calculate break-even in units, first determine the variable-cost margin by subtracting the variable cost per unit from the selling price per unit ($18.00 - $15.50 = $2.50). Next, divide the total fixed costs by the variable-cost margin to obtain break-even ($325,500 / $2.50 = 130,200). SOURCE: PI:006/5.02 SOURCE: PI LAP 4—Tipping Point (Calculate Break-Even) 43. D 288. To calculate the break-even point in units, determine the weekly fixed costs. In this situation, the fixed costs include the $200 a week truck rental and the $1 a week charge for the license fee. Fixed costs are equal to $201.00 per week ($200 + [$52 ÷ 52] = $201.00). To calculate variable costs, divide the total cost of the ice-cream bars by the number of bars to be sold. Variable costs are equal to $.40 per ice-cream bar ($200 ÷ 500 = $.40). The variable cost margin is equal to the selling price minus the variable costs ($1.10 - $.40 = $.70). Divide the total fixed costs by the variable-cost margin to determine break-even point ($201.00 ÷ $.70 = 287.14 or 288). In order to make his break-even point, Clyde must sell 288 ice-cream bars per week. SOURCE: PI:006/5.02 SOURCE: PI LAP 4—Tipping Point (Calculate Break-Even) 44. D $2,100,000. The break-even point in dollars is calculated by determining the break-even point in units and multiplying that figure by the selling price per unit. In this situation, first determine the variable-cost margin by subtracting the variable cost per unit from the unit selling price ($1,200 $700 = $500). Next, divide the total fixed costs by the variable-cost margin ($875,000 / $500 = 1,750 units). Multiply the number of units by the selling price per unit to obtain break-even point in dollars (1,750 x $1,200 = $2,100,000). SOURCE: PI:006/5.02 SOURCE: PI LAP 4—Tipping Point (Calculate Break-Even) 45. C $1,247.40. First, calculate each of the extensions by multiplying the quantity by the unit price (144 x $6.50 = $936.00; 120 x $3.75 = $450.00). Total the extensions ($936.00 + $450.00 = $1,386.00). Compute the 10% discount by converting the discount rate from a percentage to a decimal by dropping the percent sign and moving the decimal two places to the left (10% = .10) and then multiplying the discount by the extension total ($1,386.00 x .10 = $138.60). Total cost to the business is found by subtracting the discount from the totaled extensions ($1,386.00 - $138.60 = $1,247.40). SOURCE: PI:019/5.02 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (pp. 555556). Woodland Hills, CA: Glencoe/McGraw-Hill. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 46. D $32. A trade discount is a deduction from the list price of goods for performing certain marketing activities. The cost to the purchaser is calculated by multiplying the percent of trade discount by the price and then subtracting the discount amount from the price ($40 x 20% or .20 = $8; $40 - $8 = $32). SOURCE: PI:019/5.02 SOURCE: Meyer, E.C., & Allen, K.R. (2006). Entrepreneurship and small business management (p. 239). New York: Glencoe/McGraw-Hill. 47. A List price. The starting point for determining the final cost of a product to a company is the vendor's list price. From that price, businesses negotiate discounts and transportation charges that are deducted from the published price to arrive at the final cost. Net profit is money remaining after operating expenses are subtracted from gross profit. Operating expenses are expenditures necessary to keep the business running, such as payroll. Accounts receivable are all monies owed to a firm by its customers. SOURCE: PI:019/5.02 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (pp. 555556). Woodland Hills, CA: Glencoe/McGraw-Hill. 48. B Cover expected markdowns and expenses. Businesses can prevent markdowns and expenses from cutting into their net profit by setting prices that include allowances for markdowns and expenses. Setting the original selling price equal to cost would result in a loss for the business. Undercutting competitors' prices may be possible in some cases but is unwise if it reduces profits. Setting prices that will ensure a high profit may result in prices that are too high to foster sales. SOURCE: PI:007/5.02 SOURCE: Burrow, J. (2002). Marketing (pp. 388-389). Mason, OH: South-Western. 49. B $15.00. The selling price of a product should cover the costs of the product as well as providing a profit for the seller. To calculate selling price, add the total costs of the product to the desired gross margin. In this problem, selling price = $10.00 + $5.00 = $15.00. SOURCE: PI:007/5.02 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (pp. 566573). New York: Glencoe/McGraw-Hill. 50. C $9.75. The operating expenses and the profit should be added to the cost to determine the selling price ($8.45 + $.50 + $.80 = $9.75). SOURCE: PI:007/5.02 SOURCE: Longenecker, J.G., Moore, C.W., Petty, J.W., & Palich, L.E. (2006). Small business management: An entrepreneurial emphasis (13th ed.) [pp. 336-337]. Mason, OH: Thomson South-Western.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 51. D Consumer perceptions and demand. A ceiling price refers to the highest price that the business believes that consumers are willing to pay for a product. Many external factors are considered when determining ceiling prices, including demand for the product and consumers' perceptions about the product in terms of need and value. Product costs, supply, and competition are important pricing considerations. Promotional efforts, service fees, and interest rates are not necessarily primary factors that are considered when determining ceiling prices for products. SOURCE: PI:007/5.02 SOURCE: Kotler, P., & Armstrong, G. (2008). Principles of marketing (12th ed.) [pp. 320-323]. Upper Saddle River, NJ: Prentice-Hall. 52. C To compete. Product/Service management helps marketers to compete effectively. Because so many new goods and services are being introduced all the time, competition is fierce in many areas. Effective product/service management helps businesses to be prepared for new goods and services that competitors may develop. It also helps businesses to develop new goods and services of their own so they can stay ahead of competitors. Recruiting is the process of finding workers for a business. Prospecting is the process of identifying and locating potential clients. Bartering is trading or exchanging one item for another. SOURCE: PM:001/4.03 SOURCE: PM LAP 17—Rapping Up Products (Nature of Product/Service Management) 53. D Test marketing. Test marketing involves introducing a new product to a limited market to see what its acceptance will be. Feasibility analysis is examining demand, costs, competition, capital investment needed, and potential profit for a new product. Product development involves testing a working model of the new product, modifying it if needed, and retesting it a number of times. Commercialization is the point at which the product goes into full-scale production, a marketing plan is put in place, service and sales training are done, and the product's life cycle begins. SOURCE: PM:001/4.03 SOURCE: PM LAP 17—Rapping Up Products (Nature of Product/Service Management) 54. C Does not include a tangible product. Services are intangible products that people perform rather than produce, such as a manicure or lawn care. Pure services are groups of services provided to consumers without the involvement of any tangible product. Tangible products rather than intangible products (services) use packaging. Pure services do not always include product guarantees or use product-bundling strategies. SOURCE: PM:001/4.03 SOURCE: PM LAP 17—Rapping Up Products (Nature of Product/Service Management) 55. C Market opportunities. Product/service management is a marketing function that involves obtaining, developing, maintaining, and improving a product or service mix in response to market opportunities. This includes considering what CEOs want and what competitors are doing, as well as following government rules and regulations, but these are not the sole factors involved in product/service management—it considers the market as a whole. SOURCE: PM:001/4.03 SOURCE: PM LAP 17—Rapping Up Products (Nature of Product/Service Management)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 56. A Consistency. The items in the product mix are not closely related in end use, target market, or price range. Sandy has purchased too many different items of varying quality and prices to have consistency. Width and breadth both refer to the number of product lines carried by a company. Sandy has a broad product line. Depth refers to the number of products and the assortment offered. Sandy also has a deep product line because she is buying large quantities of the products. SOURCE: PM:003/4.03 SOURCE: PM LAP 3—Mix and Match (Product Mix) 57. A Coca-Cola adding Caffeine-Free Diet Coke. Brand extension involves using successful brands to introduce new products. Coke added another drink under the Coke name, thereby engaging in brand extension. Packaging smaller portions of chicken for the elderly does not involve adding another product. Selling Blue Bell ice cream is an example of Kroger adding to its product mix. Installing an ATM machine involves adding more services. SOURCE: PM:003/4.04 SOURCE: PM LAP 3—Mix & Match (Nature of Product Mix) 58. B Size and target market. The physical size of a business and its target market help to determine the product mix. Merchandise breadth and depth refers to the number of lines of a product and the quantity of each line. Staple goods and regular goods are the core of a store's merchandise offering. Seasonal goods and convenience goods are goods carried by a store during particular seasons or those that are bought frequently. SOURCE: PM:003/4.04 SOURCE: PM LAP 3—Mix & Match (Nature of Product Mix) 59. C Line extension. The product mix is the particular assortment of goods and services that a business offers in order to meet its market's needs and its company's goals. When a business adds additional items to an existing product line, it is known as a product line extension. When a business develops a new product to take the place of an older product, it is a product replacement. Service expansion is adding additional services. A product enhancement is adding a new feature or benefit to an existing product. SOURCE: PM:003/4.04 SOURCE: PM LAP 3—Mix & Match (Nature of Product Mix) 60. D Unique image. Image is the way something is viewed. Businesses create a certain image in order to appeal to a specific target market. The business's product mix, the assortment of goods and services that it offers, helps to project that image. For example, a business that sells an assortment of expensive, specialty items projects a different image than a business that sells an assortment of factory-seconds, or distressed goods. The product mix reinforces each business's unique image. Sales goals are sales objectives that businesses want to achieve. Businesses often consider sales goals when deciding on a product mix. The product mix does not help to project a business's service style or display themes. SOURCE: PM:006/4.04 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (p. 554). Woodland Hills, CA: Glencoe/McGraw-Hill.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 61. B Acquiring another company. The product mix is the particular assortment of goods and services that a business offers in order to meet the needs of its market(s) and its company goals. To meet the needs of existing customers or to obtain a new segment of the market, a business might decide to expand its product mix by providing additional goods and services. One way to add items to a product mix is by acquiring or purchasing another company. Monitoring products and analyzing decisions are important business activities; however, they do not expand the business's product mix. Sales quotas are specific selling goals for members of a business's sales force and increasing them is not a way to expand the product mix. SOURCE: PM:006/4.04 SOURCE: Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (p. 362). Mason, OH: South-Western Cengage Learning. 62. B More market segments with a wider variety of options. Product mix is the particular assortment of goods and services that a business offers to meet the needs of its market(s) and to achieve its goals. Often, the target market's needs and wants change, so the business must be willing to change its product mix, so it can remain competitive in the marketplace. One change a business might make is to expand its product mix. This strategy involves adding more goods and/or services to its existing product mix in order to appeal to more market segments. When a business reduces the amount of products it offers to its target markets, it is using a contraction strategy. After the business makes decisions about its product mix, it can set its promotional goals. SOURCE: PM:006/4.04 SOURCE: Etzel, M.J., Walker, B.J., & Stanton, W.J. (2007). Marketing (14th ed.) [p. 237]. Boston: McGraw-Hill/Irwin. 63. C Width. Elba is planning to adjust the width of its product mix by reducing the number of product lines that it offers. The length of a product mix is based on the number of different products or brands that the business offers. The depth of a product mix is based on variations in each product that the business offers. The height of a product mix is a fictitious term. SOURCE: PM:006/4.04 SOURCE: Boone, G., & Kurtz, D.L. (2009). Contemporary marketing 2009 (p. 361). Mason, OH: South-Western Cengage Learning. 64. A Enhance customer-satisfaction levels. When a business determines which services to offer its customers, it should consider what its customers want or need. If the business has the available resources (e.g., personnel, financial) to provide the service, the service has the ability to enhance the customers' overall satisfaction levels with the business. When satisfaction levels are high, the business is most likely to gain repeat business. When a customer returns something to the business, s/he is returning something tangible; services are intangible. The business does not consider interest rates when determining which services to offer, nor does it consider whether its competitors find the service offensive. SOURCE: PM:036/4.06 SOURCE: Hoffman, K.D., & Bateson, J. (2006). Services marketing: Concepts, strategies, & cases (3rd ed.) [p. 303]. Mason, OH: Thomson South-Western.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 65. A Higher payroll expenses. When determining the services to provide its customers, a business must consider many factors, such as the nature of the product, the customers' wants, and the costs associated with providing the service. When a business extends its operating hours, it must pay the employees to do the work. Therefore, the cost associated with extending business hours is the payroll expenses. Increased sales volume, higher profit margins, and increased customer satisfaction are benefits associated with providing the service. SOURCE: PM:036/4.06 SOURCE: Lovelock, C., & Wirtz, J. (2007). Services marketing: People, technology, strategy (6th ed.) [pp. 119, 128-129]. Upper Saddle River, NJ: Prentice Hall. 66. B Convenience. When determining the services to provide its customers, a business must consider the nature of the product, the costs associated with the service, and the needs and expectations of the customers. When considering the customers' needs and wants, the business should consider factors such as convenience, price, consistency, and quantity that affect service. If time is a critical consideration, the business should develop services that provide the customers with convenience. Timesaving services include overnight delivery, online ordering options, and extended operating hours. SOURCE: PM:036/4.06 SOURCE: Lovelock, C., & Wirtz, J. (2007). Services marketing: People, technology, strategy (6th ed.) [p. 184]. Upper Saddle River, NJ: Prentice Hall. 67. A Businesses charge higher prices for customized services, which can lead to higher profit margins. Customized services are services that are developed to meet individual customer's needs and wants. Two potential benefits of offering customized services are higher profit margins and greater customer satisfaction. However, offering customized services does not save a business time. In fact, customized services take more time, not less. Standardized services are services that are as homogeneous as possible. Customized services are by definition not standardized services. Therefore, customizing its services does not help a business to deliver more consistent products to its customers. SOURCE: PM:036/4.06 SOURCE: Hoffman, K.D., & Bateson, J. (2006). Services marketing: Concepts, strategies, & cases (3rd ed.) [p. 43]. Mason, OH: Thomson South-Western. 68. B Price. Product positioning is the customer's image or impression of a product as compared to that of competitive products. For example, a business may offer a money-back guarantee for poor performance or it may provide several service options for a low price. These strategies help emphasize the overall value of the product. Benefits are the advantages that the customer receives from using the product. Features are the product's attributes or characteristics. A business competitor is a rival business that seeks to attract the same scarce customer dollars. Some businesses position their products to compete with similar products offered by other (rival) businesses. SOURCE: PM:042/4.05 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (p. 645). Woodland Hills, CA: Glencoe/McGraw-Hill.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 69. C Attributes. Product positioning refers to the image a product has in the marketplace in relation to that of the competition. A business can position a product by emphasizing different product components—price, quality (reliability), competition, and attributes. Attributes are characteristics of the product. Product attributes are important considerations for many market segments. Selecting an environmentally friendly product is important to a target market that believes energy conservation and pollution control are necessary to protect the environment. By emphasizing that the product is environmentally friendly, the business is positioning the product by focusing on its attributes. SOURCE: PM:042/4.05 SOURCE: Etzel, M.J., Walker, B.J., & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 235-236]. Boston: McGraw-Hill/Irwin 70. B Quality. Quality is a product's degree of excellence. A luxury car, a five-star hotel, and designer clothing are often associated with a high degree of excellence. Product durability and price are also factors that people associate with quality. Competition, market, and skill do not always indicate a product's degree of excellence. SOURCE: PM:042/4.05 SOURCE: Etzel, M.J., Walker, B.J., & Stanton, W.J. (2007). Marketing (14th ed.) [pp. 235-236]. Boston: McGraw-Hill/Irwin 71. A Competitors. Competitors are the rivals that seek to attract the same scarce customer dollars. Positioning refers to the ways in which a business creates a certain image of a product in consumers' minds. A company that compares its product's benefits and/or attributes to other companies' products is positioning the product against the competition. For example, suppose the XOB Company offers a product warranty for six months longer than the ROP Company, a business that sells a similar warranted product. When XOB compares its warranty with ROP's warranty through its advertising and selling efforts, it is positioning its product in relation to a competitor. The example is not positioning the product in relation to consumers, markets, or applications. Consumers buy the products. Markets are the various groups of customers that a business wants to attract. Application refers to the way something is used, such as a computer program. SOURCE: PM:042/4.05 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (pp. 645646). Woodland Hills, CA: Glencoe/McGraw-Hill. 72. D Customers tend to remember just one thing from an advertisement. Marketers often condense USPs into short slogans because customers tend to remember just one thing from an advertisement. A short phrase helps to cement the idea of the USP in customers' minds. It is important for all work team members to know the company's USP, although they might not be required to memorize it. Although a USP is helpful with product differentiation, it is not the only means for achieving it. A USP does not necessarily need to be short, but its main message should be able to be captured succinctly. SOURCE: PM:272/4.07 SOURCE: PM LAP 16—Stand Out (Unique Selling Proposition) 73. C Lose credibility. If your company cannot fulfill its USP, it will lose credibility and lose business. It may or may not spend more money or go bankrupt. SOURCE: PM:272/4.07 SOURCE: PM LAP 16—Stand Out (Unique Selling Proposition)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 74. C You already have one without realizing it. Before identifying your company's USP, ask yourself if you already have one without realizing it. If so, and it works, there's no reason to change it; actually, changing it could confuse your customers and hurt your business. However, if the USP is not working, it's time to get started on a new one. Every business needs a good USP to be successful, whether or not it spends a lot of money on advertising. A good USP is one-of-a-kind, not copied from another company. SOURCE: PM:272/4.07 SOURCE: PM LAP 16—Stand Out (Unique Selling Proposition) 75. A Repeat it as much as possible. As soon as they can, your competitors will attempt to neutralize your USP, either by minimizing it or copying it. The more you can take “ownership” of your USP, the better. Use your unique selling proposition in every situation you possibly can, as loud as you possibly can, as long as you possibly can. You don't want to print it in a foreign language, make it difficult to understand, or hide it from the public, or your customers will never hear it. SOURCE: PM:272/4.07 SOURCE: PM LAP 16—Stand Out (Unique Selling Proposition) 76. B Neighborhood shopping center. Customers purchase convenience products such as groceries, gasoline, and medicines on a regular basis—monthly, weekly, and sometimes even daily. Because they shop for convenience products so frequently, customers typically prefer to buy these items at grocery stores, gas stations, and drug stores close to home so that they can devote as little time as necessary to their shopping. Very few people are interested in driving downtown simply to purchase their groceries. Regional shopping centers, usually large shopping areas or malls, serve customers from an entire region. Many customers live too far away from regional shopping centers to go there on a regular basis for convenience products. Super-regional shopping centers are often even further away from home for most customers. Super-regional shopping centers house hundreds of stores and serve a large region or multi-state area. Most small businesses cannot afford the rent at super-regional shopping centers. SOURCE: PM:132/4.07 SOURCE: Greene, C. L. (2006). Entrepreneurship: Ideas in action (3rd ed.) [pp. 188 -191]. Mason, OH: Thomson/South-Western. 77. D Buy their products. The purpose of a promotional message is to tell consumers about certain goods, services, or ideas and persuade them to buy or form an opinion. A business receives positive feedback about the effectiveness of its promotional message when customers buy its products. Customers might ask specific questions, but they are giving positive feedback only when they buy. A business receives negative feedback if consumers buy from a competitor. When consumers see an advertisement, they are receiving a promotional message rather than giving feedback. SOURCE: PR:001/5.03 SOURCE: PR LAP 2—Razzle Dazzle (Nature of Promotion)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 78. C Create desire. Promotion is a marketing function needed to communicate information about goods, services, images, and/or ideas to achieve a desired outcome. In relation to marketing, one of the main goals of promotion is to create desire in people to want to purchase a specific good, service, or event. By communicating information, the marketers hope to attract attention, create desire, and generate sales. Promotion is important because if people do not have the desire, they will not buy. Developing an appropriate message is one step in the promotional process, but it is not a goal. Monitoring feedback from previous promotional efforts will help marketers to make changes to their message to more effectively create desire. Marketers select media to deliver their message. SOURCE: PR:001/5.03 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (pp. 362363). Woodland Hills, CA: Glencoe/McGraw-Hill. 79. B Inform. Many sport/event companies use promotion to inform customers about their products or to show how their goods and services can be used. Promotion should never be used to deceive, delude, or lie to customers in any way. If the customer is intimidated or overwhelmed by promotion, s/he is not likely to buy the good or service. SOURCE: PR:001/5.03 SOURCE: PR LAP 2—Razzle Dazzle (Nature of Promotion) 80. C Product and price. Promotion is a marketing function that communicates information about goods, services, images, and/or ideas to achieve a desired outcome. Internal factors that affect a company's promotional efforts are product, price, and place. Demand and competition are external factors that affect promotion. SOURCE: PR:001/5.03 SOURCE: PR LAP 2—Razzle Dazzle (Nature of Promotion) 81. C Noncontroversial. Public-service promotions inform consumers about noncontroversial issues that are in the public's best interest. Businesses often use public-service promotions to give consumers information that might help them to improve their lives. Examples of noncontroversial issues include wildlife conservation and health habits. Negative, controversial, and questionable issues usually are addressed through public-relations promotions. SOURCE: PR:002/5.03 SOURCE: PR LAP 4—Know Your Options (Types of Promotion) 82. C Product. Product advertising is used to promote goods and services. Institutional advertising promotes a company's image, mission, or philosophy. Wholesalers, dealers, and retailers use trade advertising to obtain greater distribution of their products. Business advertising tends to appear in specialized business publications or journals and is directed to people who buy goods and services for business use. SOURCE: PR:002/5.03 SOURCE: PR LAP 4—Know Your Options (Types of Promotion)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 83. B Informing consumers about product features. Informing consumers about product features is a use of product promotion. Product promotion is an attempt to persuade consumers to buy a particular good or service. It can be used to create consumer awareness of a good or service, inform consumers about product features, encourage interest in and inquiries about a good or service, inform consumers where a product can be purchased, build a reputation for a product, and create excitement and motivate retailers and salespeople. Recruiting new employees, highlighting social or environmental issues, and changing attitudes toward the company are all uses of institutional promotion, not product promotion. SOURCE: PR:002/5.03 SOURCE: PR LAP 4—Know Your Options (Types of Promotion) 84. A Institutional promotion. The primary goal of institutional promotion is to create a certain image of a company in the eyes of consumers. This can be accomplished by informing consumers about the company, its ideas, and its philosophy. Companies often take positions on important issues, such as recycling goods and controlling pollution. Their positions on issues are communicated to the public through institutional promotion. Product promotion involves persuading consumers to buy a particular good or service. Cooperative advertising refers to the funds provided to retailers by the producers of goods to help pay for the retailers' advertising expenses. Personal selling is a marketing function that involves determining customers' needs and wants and aiding customers with their buying decisions. SOURCE: PR:002/5.03 SOURCE: PR LAP 4—Know Your Options (Types of Promotion) 85. D Sales promotion. Sales promotion is promotional activities other than advertising, personal selling, and publicity which stimulate consumer purchases. It is used to supplement advertising and selling efforts. Advertising is any paid form of nonpersonal presentation of ideas, goods, or services. Personal selling is the use of planned, personalized communication in order to influence purchase decisions and to ensure satisfaction. Publicity is nonpersonal promotion which is not paid for by the company or individual which benefits from it. An example would be a newspaper article about the opening of a new business. SOURCE: PR:003/5.03 SOURCE: PR LAP 1—Spread the Word (Nature of Promotional Mix) 86. D Publicity. Publicity is any nonpersonal presentation of ideas, goods, or services that is not paid for by the company or individual that benefits from or is harmed by it. In this case, the newspaper decided to publish the good deed by Amy's Shoe Store. Advertising is any paid form of nonpersonal presentation of ideas, images, goods, or services. Personal selling is the form of promotion that determines client needs and wants and responds through planned, personalized communication that influences purchase decisions and enhances future business opportunities. Sales promotions are promotional activities other than advertising, personal selling, and publicity that stimulate customer purchases. SOURCE: PR:003/5.03 SOURCE: PR LAP 1—Spread the Word (Nature of Promotional Mix)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 87. B Highly technical. The promotional mix is the blend of marketing communication channels that a business uses to send its messages to consumers. The promotional mix includes a combination of advertising, personal selling, sales promotion, and publicity. Personal selling is a promotion channel that determines the client's needs and wants and responds through planned, personalized communication. Businesses most often use personal selling when the products are new, expensive, and/or highly technical. Personal selling is not a promotional mix element that is feasible to use when the product is simple to assemble, it is inexpensive, or when it is in the declining stage of the product life cycle. SOURCE: PR:003/5.03 SOURCE: PR LAP 1—Spread the Word (Nature of Promotional Mix) 88. A Inform consumers about the existence of the product. The promotional mix is the combination or blend of marketing communication channels that business uses to send its messages to consumers. One factor that a business must consider when designing its promotional mix is the stage of the product's life cycle. When a business places a new product on the market, the product is in its introductory stage. During the introductory stage of the product's life cycle, the business focuses its promotional efforts on informing consumers about the existence of a new product. During a product's growth stage, the promotional efforts tend to focus on the differences among competing products. When promotional efforts focus on reminding customers about the product's benefits, the product is in its maturity stage. During the decline stage, the business tends to spend less money on promoting the product and more money on reinforcing the company's image. SOURCE: PR:003/5.03 SOURCE: PR LAP 1—Spread the Word (Nature of Promotional Mix) 89. C Publications. Newspapers and magazines are publications because they are printed on a regular basis. Radio and television are broadcast media because the message is transmitted over the air waves. These two types of broadcast media are also thought of as time media because their advertisements last for only as long as they are on the air. Direct mail is an advertising medium that comes to customers in the form of letters, catalogs, folders, booklets, postcards, and e-mails. SOURCE: PR:007/5.04 SOURCE: PR LAP 3—Ad-quipping Your Business (Types of Advertising Media) 90. A Out-of-home. Certain spots (e.g., bus stations) outside of the home attract a large percentage of people from different backgrounds, thereby providing the perfect opportunity to expose them to a message over and over again. Radio advertisements last for only as long as they are on the air, and they are targeted at a very specific group of listeners. Once people are finished reading newspapers, they typically throw them away. In addition, not as many people read newspapers as drive by public places over and over again. Directory advertising is a great opportunity to appeal to people who are looking for the business's contact information, but rarely is there repeated exposure to an ad. SOURCE: PR:007/5.04 SOURCE: PR LAP 3—Ad-quipping Your Business (Types of Advertising Media)

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 91. B Delivered to the cell-phone numbers of people interested in the product. All ads, regardless of their type, are the most successful when they are targeted at interested people. However, this is especially true with text-message advertising because cell-phone plans are based on a certain minute-usage, which means that customers might become very angry if they end up paying for advertisements they are not interested in. Additionally, it is illegal to send unsolicited commercial text messages. Advertisers must get permission to send text-messages to consumers; therefore, the consumers who receive these text-message ads must be interested since they opted in for the messages. Text-message advertising is done with a minimum number of characters. Otherwise, the messages will be too tedious for the recipient to read. Random, unsolicited cell-phone ads are not much different from spam mail; they are intrusive and a hassle for customers to deal with. To be successful, text-message ads must contain the name of the business or product being advertised. SOURCE: PR:007/5.04 SOURCE: PR LAP 3—Ad-quipping Your Business (Types of Advertising Media) 92. B Broadcast. Broadcast media, which include radio and television, use airwaves to send promotional messages to consumers. Magazine and newspaper ads are forms of print advertising. Web-based advertising communicates messages through the Internet. Out-of-home advertising contains promotional messages that are delivered to consumers when they are away from home. Examples of out-of-home advertising include billboards and transit advertisements found on busses. SOURCE: PR:007/5.04 SOURCE: PR LAP 3—Ad-quipping Your Business (Types of Advertising Media) 93. D Define its promotional goals. A business must define what promotional goals it wants to achieve before it can develop a promotional plan for accomplishing those goals. Once the goals are identified, a business can create the framework for its promotional activities. Promotional strategies are plans of action for achieving promotional goals. Networking involves exchanging information with others for the purpose of professional development. SOURCE: PR:097/5.05 SOURCE: Farese, L.S., Kimbrell, G., & Woloszyk, C.A. (2009). Marketing essentials (p. 364). Woodland Hills, CA: Glencoe/McGraw-Hill. 94. A Distribute 500 flyers by March 1. A measurable objective states what a business wants to do, by when. It has specific deadlines and criteria. The business will be able to measure if the 500 flyers were distributed by the deadline. The other options are not measurable because they are general and do not include specific amounts or deadlines. SOURCE: PR:097/5.05 SOURCE: Wells, W., Burnett, J., & Moriarty, S. (2003). Advertising principles and practice (6th ed.) [pp. 542-544]. Upper Saddle River, NJ: Prentice Hall.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Semester Two Exam Key 95. A Media placement specifications and costs. A comprehensive promotional plan analyzes needs, outlines specific promotional strategies, and defines the tasks that are needed to carry out each promotional activity. Therefore, the promotional plan should always include specific information regarding the timing and placement of promotional activities (e.g., advertising placement, trade shows) and the costs involved to carry out the activities. Advertising run dates or schedules are important to include in the promotional plan. However, sales quotas are usually addressed when management defines sales objectives for specific sales representatives. The industry analysis and the competitor analysis are important elements in the situational analysis. The situational analysis is a determination of a firm's current business situation and the direction in which the business is headed, and is considered a primary element of the promotional plan. Product pricing policies are often a consideration when developing specific promotional plans. However, pricing concepts are usually established and in place before the specifics of the promotional plan are developed. International advertising refers to promotional activities outside of the country. Not all businesses are involved in international markets; therefore, international advertising objectives are not always included in the promotional plan. SOURCE: PR:097/5.05 SOURCE: Meyer, E.C., & Allen, K.R. (2006). Entrepreneurship and small business management (pp. 265-266). New York: Glencoe/McGraw-Hill. 96. A Measurable. Objectives are goals to be reached. Effective objectives are goals that can be measured or evaluated. For example, an objective of 15% market share for the next year contains the measurable value of 15%. In addition, meaningful objectives should be specific rather than vague or general. They should have identifiable limits that are possible to attain. SOURCE: SM:008/4.02 SOURCE: DuBrin, A. (2009). Essentials of management: Instructor's edition (8th ed.) [pp. 116117]. Mason, OH: South-Western Cengage Learning. 97. A To identify business purpose. One of the reasons why managers develop objectives is to identify the purpose of the business. Determining what a business is and intends to do is the basis for all other company decisions. Therefore, managers establish objectives that the business wants to achieve in order to describe the business's purpose and develop strategies to implement that purpose. Managers do not develop company objectives in order to forecast sales potential, communicate with employees, or solve operating problems. SOURCE: SM:008/4.02 SOURCE: DuBrin, A. (2009). Essentials of management: Instructor's edition (8th ed.) [pp. 116117]. Mason, OH: South-Western Cengage Learning. 98. B Performance targets. Managers develop broad objectives for a business, such as operate in a cost-efficient manner or earn a sufficient profit. They use these objectives as the basis for setting performance targets. The performance targets are the specific steps a business follows in order to achieve its main objectives. If the main objective is to earn a sufficient profit, the performance targets might include establishing policies to control spending. A business's broad objectives are not used as the basis for setting benefit levels, salary ranges, or recruitment quotas. SOURCE: SM:008/4.02 SOURCE: DuBrin, A. (2009). Essentials of management: Instructor's edition (8th ed.) [pp. 116117]. Mason, OH: South-Western Cengage Learning.

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Semester Two Exam Key 99. D Core values. A mission statement is a brief summary that defines the purpose of the organization. A mission statement reflects the philosophies, ideologies, beliefs, and priorities of the organization's owner(s)—all of which make up the business's core values. The business's goals, ethics policies, and touch points are based on the business's core values. SOURCE: SM:009/4.02 SOURCE: Performance Solutions. (n.d.). Characteristics of good mission statements. Retrieved April 21, 2011, from http://www.performancesolutions.nc.gov/strategicplanning/1developmvcv/docs/GoodMi ssionStatementCharacteristics.pdf 100. B Customer. Metrics refer to the ways in which a business measures certain elements or characteristics, such as performance, efficiency, etc. A business might want to understand a market segment's buying habits and its attitudes, so it uses customer metrics to measure this type of data. Customer metrics may help the business determine how its products are viewed in the marketplace and may help the business to determine the types of new products to provide a specific market. Product metrics assess brand. Businesses use financial metrics to measure pricing and profitability. SOURCE: SM:024-_ SOURCE: Kotler, P., & Keller, K. L. (2006). Marketing management (12th ed.) [p. 118]. Upper Saddle River, NJ: Prentice-Hall/Pearson Education.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Appendix B SCANS Competencies and Skills

Appendix B

Background

SCANS Competencies and Skills

Page B-2

The Secretary's Commission on Achieving Necessary Skills (SCANS) was established in February 1990 to examine the demands of the workplace and to determine whether the current and future work force is capable of meeting those demands. Commission members included 31 representatives from the nation's schools, businesses, unions and government. The Commission issued its first report, "What Work Requires of Schools," in June 1991. This report told educators and employers what students and workers need to know and be able to do in order to succeed in the workplace. This kind of information is especially vital today, when more than half of our young people leave school without the basic skills required to find and hold a good job. Specifically, the Commission was directed to advise the Secretary of Labor on the type and level of skills required to enter employment. In carrying out this charge, the Commission was asked to: 1.

Define the skills needed for employment;

2.

Propose acceptable levels in those skills;

3.

Suggest effective ways to assess proficiency; and

4.

Develop a strategy to disseminate the findings to the nation's schools, businesses and homes.

The Commission identified two types of skills: competencies and foundations. Competencies are the skills necessary for success in the workplace and are organized into five areas. Foundations are skills and qualities that underlie the competencies. The competencies and foundations are generic—most of them are required for most jobs. The SCANS competencies and foundations are identified and defined on the following pages. The number referenced before each of them relates to the SCANS identified in each planning guide sheet.

Competencies Resources

1

Allocates Time—Selects relevant, goal-related activities; ranks them in order of importance; allocates time to activities; and understands, prepares and follows schedules. Competent performance in allocating time includes properly identifying tasks to be completed; ranking tasks in order of importance; developing and following an effective, workable schedule based on accurate estimates of such things as importance of tasks, time to complete tasks, time available for completion and task deadlines; avoiding wasting time; and accurately evaluating and adjusting a schedule.

2

Allocates Money—Uses or prepares budgets, including making cost and revenue forecasts, keeps detailed records to track budget performance and makes appropriate adjustments. Competent performance in allocating money includes accurately preparing and using a budget according to a consistent and orderly accounting method; accurately calculating future budgetary needs based on projected costs and revenues; accurately tracking the extent to which actual costs and revenues differ from the estimated budget; and taking appropriate and effective actions.

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Appendix B

Information

SCANS Competencies and Skills

Page B-3

3

Allocates Material and Facility Resources—Acquires, stores and distributes materials, supplies, parts, equipment, space or final products in order to make the best use of them. Competent performance in allocating material and facility resources includes carefully planning the steps involved in the acquisition, storage and distribution of resources; safely and efficiently acquiring, transporting or storing them; maintaining them in good condition; and distributing them to the end user.

4

Allocates Human Resources—Assesses knowledge and skills and distributes work accordingly, evaluates performance and provides feedback. Competent performance in allocating human resources includes accurately assessing peoples' knowledge, skills, abilities and potential; identifying present and future workload; making effective matches between individual talents and workload; and actively monitoring performance and providing feedback.

5

Acquires and Evaluates Information—Identifies need for data, obtains them from existing sources or creates them and evaluates their relevance and accuracy. Competently performing the tasks of acquiring data and evaluating information includes analytic questions to determine specific information needs; selecting possible information and evaluating its appropriateness; and determining when new information must be created.

6

Organizes and Maintains Information—Organizes, processes and maintains written or computerized records and other forms of information in a systematic fashion. Competently performing the tasks of organizing and maintaining information includes understanding and organizing information from computer, visual, oral and physical sources in readily accessible formats, such as computerized data bases, spreadsheets, microfiche, video disks, paper files, etc.; when necessary, transforming data into different formats in order to organize them by the application of various methods such as sorting, classifying or more formal methods.

7

Interprets and Communicates Information—Selects and analyzes information and communicates the results to others using oral, written, graphic, pictorial or multi-media methods. Competently performing the tasks of communicating and interpreting information to others includes determining information to be communicated; identifying the best methods to present information (e.g., overheads, handouts); if necessary, converting to desired format and conveying information to others through a variety of means including oral presentation, written communication, etc.

8

Uses Computers to Process Information—Employs computers to acquire, organize, analyze and communicate information. Competently using computers to process information includes entering, modifying, retrieving, storing and verifying data and other information; choosing format for display (e.g., line graphs, bar graphs, tables, pie charts, narrative); and ensuring the accurate conversion of information into the chosen format.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Appendix B

Interpersonal

Systems

SCANS Competencies and Skills

Page B-4

9

Participates as a Member of a Team—Works cooperatively with others and contributes to group with ideas, suggestions and effort. Demonstrating competence in participating as a member of a team includes doing own share of tasks necessary to complete a project; encouraging team members by listening and responding appropriately to their contributions; building on individual team members' strengths; resolving differences for the benefit of the team; taking personal responsibility for accomplishing goals; and responsibly challenging existing procedures, policies or authorities.

10

Teaches Others—Helps others learn. Demonstrating competence in teaching others includes helping others to apply related concepts and theories to tasks through coaching or other means; identifying training needs; conveying job information to allow others to see its applicability and relevance to tasks; and assessing performance and providing constructive feedback/reinforcement.

11

Serves Clients/Customers—Works and communicates with clients and customers to satisfy their expectations. Demonstrating competence in serving clients and customers includes actively listening to customers to avoid misunderstandings and identifying needs; communicating in a positive manner especially when handling complaints or conflict; and efficiently obtaining additional resources to satisfy client needs.

12

Exercises Leadership—Communicates thoughts, feelings and ideas to justify a position; encourages, persuades, convinces or otherwise motivates an individual or groups, including responsibly challenging existing procedures, policies or authority. Demonstrating competence in exercising leadership includes making positive use of the rules/values followed by others; justifying a position logically and appropriately; establishing credibility through competence and integrity; and taking minority viewpoints into consideration.

13

Negotiates to Arrive at a Decision—Works toward an agreement that may involve exchanging specific resources or resolving divergent interests. Demonstrating competence in negotiating to arrive at a decision involves researching opposition and the history of the conflict; setting realistic and attainable goals; presenting facts and arguments; listening to and reflecting on what has been said; clarifying problems and resolving conflicts; adjusting quickly to new facts/ideas; proposing and examining possible options; and making reasonable compromises.

14

Works with Cultural Diversity—Works well with men and women and with a variety of ethnic, social or educational backgrounds. Demonstrating competence in working with cultural diversity involves understanding one's own culture and those of others and how they differ; respecting the rights of others while helping them make cultural adjustments where necessary; basing impressions on individual performance, not on stereotypes; and understanding concerns of members of other ethnic and gender groups.

15

Understands Systems—Knows how social, organizational and technological systems work and operates effectively within them. Demonstrating competence in understanding systems involves knowing how a system's structures relate to goals; responding to the demands of the system/organization; knowing the right people to ask for information and where to get resources; and functioning within the formal and informal codes of the social/organizational system.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Appendix B

Technology

SCANS Competencies and Skills

Page B-5

16

Monitors and Corrects Performance—Distinguishes trends, predicts impact of actions on system operations, diagnoses deviations in the function of a system/organization and takes necessary action to correct performance. Demonstrating competence in monitoring and correcting performance includes identifying trends and gathering needed information about how the system is intended to function; detecting deviations from system's intended purpose; troubleshooting the system; and making changes to the system to rectify system functioning and to ensure quality of product.

17

Improves and Designs Systems—Makes suggestions to modify existing systems to improve products or services and develops new or alternative systems. Demonstrating competence in improving or designing systems involves making suggestions for improving the functioning of the system/organization; recommending alternative system designs based on relevant feedback; and responsibly challenging the status quo to benefit the larger system.

18

Selects Technology—Judges which set of procedures, tools or machines, including computers and their programs, will produce the desired results. Demonstrating competence in selecting technology includes determining desired outcomes and applicable constraints; visualizing the necessary methods and applicable technology; evaluating specifications; and judging which machine or tool will produce the desired results.

19

Applies Technology to Task—Understands the overall intent and the proper procedures for setting up and operating machines, including computers and their programming systems. Demonstrating competence in how to apply technology to task includes understanding how different parts of machines interact and how machines interact with broader production systems; on occasion installing machines including computers; setting up machines or systems of machines efficiently to get desired results; accurately interpreting machine output; and detecting errors from program output.

20

Maintains and Troubleshoots Technology—Prevents, identifies or solves problems in machines, computers and other technologies. Demonstrating competence in maintaining and troubleshooting technology includes identifying, understanding and performing routine preventative maintenance and service on technology; detecting more serious problems; generating workable solutions to correct deviations; and recognizing when to get additional help.

1

Reading—Locates, understands and interprets written information in prose and documents—including manuals, graphs and schedules—to perform tasks; learns from text by determining the main idea or essential message; identifies relevant details, facts and specifications; infers or locates the meaning of unknown or technical vocabulary; judges the accuracy, appropriateness, style and plausibility of reports, proposals or theories of other writers.

Foundation Skills Basic Skills

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Appendix B

Thinking Skills

SCANS Competencies and Skills

Page B-6

2

Writing—Communicates thoughts, ideas, information and messages in writing; records information completely and accurately; composes and creates documents such as letters, directions, manuals, reports, proposals, graphs, flow-charts; uses language, style, organization and format appropriate to the subject matter, purpose and audience; includes supporting documentation and attends to level of detail; and checks, edits and revises for correct information, appropriate emphasis, form, grammar, spelling and punctuation.

3

Arithmetic—Performs basic computations; uses basic numerical concepts such as whole numbers and percentages in practical situations; makes reasonable estimates of arithmetic results without a calculator; and uses tables, graphs, diagrams and charts to obtain or convey quantitative information.

4

Mathematics—Computational skills needed in maintaining records, estimating results, using spreadsheets or applying statistical process.

5

Listening—Receives, attends to, interprets and responds to verbal messages and other cues such as body language in ways that are appropriate to the purpose; for example, to comprehend, to learn, to critically evaluate, to appreciate or to support the speaker.

6

Speaking—Organizes ideas and communicates oral messages appropriate to listeners and situations; participates in conversation, discussion and group presentations; selects an appropriate medium for conveying a message; uses verbal language and other cues such as body language appropriate in style, tone and level of complexity to the audience and the occasion; speaks clearly and communicates a message; understands and responds to listener feedback; and asks questions when needed.

7

Creative Thinking—Uses imagination freely, combines ideas or information in new ways, makes connections between seemingly unrelated ideas and reshapes goals in ways that reveal new possibilities.

8

Decision Making—Specifies goals and constraints, generates alternatives, considers risks and evaluates and chooses best alternative.

9

Problem Solving—Recognizes that a problem exists (i.e., there is a discrepancy between what is and what should or could be); identifies possible reasons for the discrepancy; devises and implements a plan of action to resolve it; evaluates and monitors progress; and revises plan as indicated by findings.

10

Seeing Things in the Mind's Eye—Organizes and processes symbols, pictures, graphs, objects or other information; for example, sees a building from a blueprint; a system's operation from schematics; the flow of work activities from narrative descriptions; or the taste of food from reading a recipe.

11

Knowing How to Learn—Uses efficient learning techniques to acquire and apply new knowledge and skills.

12

Reasoning—Discovers a rule or principle underlying the relationship between two or more objects and applies it in solving a problem. Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Appendix B

Personal Qualities

SCANS Competencies and Skills

Page B-7

13

Responsibility—Exerts a high level of effort and perseverance toward goal attainment; works hard to become excellent at doing tasks by setting high standards, paying attention to details, working well and displaying a high level of concentration even when assigned an unpleasant task; and displays high standards of attendance, punctuality, enthusiasm, vitality and optimism in approaching and completing tasks.

14

Self-Esteem—Believes in own self-worth and maintains a positive view of self.

15

Social—Demonstrates understanding, friendliness, adaptability, empathy and politeness in new and on-going group settings; asserts self in familiar and unfamiliar social situations; relates well to others; responds appropriately as the situation requires; and takes an interest in what others say and do.

16

Self-Management—Assesses own knowledge, skills and abilities accurately; sets well-defined and realistic personal goals; monitors progress toward goal attainment and motivates self through goal achievement; exhibits self-control and responds to feedback unemotionally and non-defensively; and is a "selfstarter."

17

Integrity/Honesty—Chooses ethical courses of action.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Appendix C 21st Century Skills

Appendix C

Overview

21st Century Skills

Page C-2

While the No Child Left Behind Act of 2001 identifies the core subjects as the traditional academic areas, business and education leaders along with policymakers have identified several other significant content areas that they consider critical to educational success in the 21st century. This group known as The Partnership for 21st Century Skills leads the way for including these skills in education. To encourage school districts to address these skills, the group provides the necessary tools and resources schools need to add the skills to the curriculum. The Partnership for 21st Century Skills conducted extensive initial research with thousands of key stakeholders and citizens across the country. The Partnership has identified six elements of 21st century learning:  Core subjects  21st century content  Learning and thinking skills  Information and communications technology literacy  Life skills  21st century assessments

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Appendix C

21st Century Content

21st Century Skills

Page C-3

The Partnership for 21st Century Skills has created the graphic below to summarize their work. The graphic represents both 21st century skills student outcomes (as represented by the arches of the rainbow) and 21st century skills support systems (as represented by the pools at the bottom). The text following the graphic describes the Partnership’s perspective and then lists the student outcomes identified. For the purposes of the Principles of Entrepreneurship crosswalk, numbers have been given to each skill.

Mastery of core subjects and 21st century themes is essential for students in the 21st century. Core subjects include:  English, reading or language arts  World languages  Arts  Mathematics  Economics  Science  Geography  History  Government and Civics In addition to these subjects, we (The Partnership) believe schools must move beyond a focus on basic competency in core subjects to promoting understanding of academic content at much higher levels by weaving 21st century interdisciplinary themes into core subjects:

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Appendix C

21st Century Skills

Page C-4

Global Awareness 1. Using 21st century skills to understand and address global issues 2. Learning from and working collaboratively with individuals representing diverse cultures, religions and lifestyles in a spirit of mutual respect and open dialogue in personal, work and community contexts 3. Understanding other nations and cultures, including the use of non-English languages Financial, Economic, Business and Entrepreneurial Literacy 1. Knowing how to make appropriate personal economic choices 2. Understanding the role of the economy in society 3. Using entrepreneurial skills to enhance workplace productivity and career options Civic Literacy 1. Participating effectively in civic life through knowing how to stay informed and understanding governmental processes 2. Exercising the rights and obligations of citizenship at local, state, national and global levels 3. Understanding the local and global implications of civic decisions Health Literacy 1. Obtaining, interpreting and understanding basic health information and services and using such information and services in ways that are health enhancing 2. Understanding preventive physical and mental health measures, including proper diet, nutrition, exercise, risk avoidance and stress reduction 3. Using available information to make appropriate health-related decisions 4. Establishing and monitoring personal and family health goals 5. Understanding national and international public health and safety issues

Learning and Innovation Skills Learning and innovation skills are increasingly being recognized as the skills that separate students who are prepared for increasingly complex life and work environments in the 21st century, and those who are not. A focus on creativity, critical thinking, communication and collaboration is essential to prepare students for the future.

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Appendix C

21st Century Skills

Page C-5

Creativity & Innovation 1. Demonstrating originality and inventiveness in work 2. Developing, implementing and communicating new ideas to others 3. Being open and responsive to new and diverse perspectives 4. Acting on creative ideas to make a tangible and useful contribution to the domain in which the innovation occurs Critical Thinking & Problem Solving 1. Exercising sound reasoning in understanding 2. Making complex choices and decisions 3. Understanding the interconnections among systems 4. Identifying and asking significant questions that clarify various points of view and lead to better solutions 5. Framing, analyzing and synthesizing information in order to solve problems and answer questions Communication & Collaboration 1. Articulating thoughts and ideas clearly and effectively through speaking and writing 2. Demonstrating ability to work effectively with diverse teams 3. Exercising flexibility and willingness to be helpful in making necessary compromises to accomplish a common goal 4. Assuming shared responsibility for collaborative work

Information, Media and Technology Skills People in the 21st century live in a technology and media-suffused environment, marked by access to an abundance of information, rapid changes in technology tools, and the ability to collaborate and make individual contributions on an unprecedented scale. To be effective in the 21st century, citizens and workers must be able to exhibit a range of functional and critical thinking skills related to information, media and technology. Information Literacy 1. Accessing information efficiently and effectively, evaluating information critically and competently and using information accurately and creatively for the issue or problem at hand 2. Possessing a fundamental understanding of the ethical/legal issues surrounding the access and use of information

Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Appendix C

21st Century Skills

Page C-6

Media Literacy 1. Understanding how media messages are constructed, for what purposes and using which tools, characteristics and conventions. 2. Examining how individuals interpret messages differently, how values and points of view are included or excluded and how media can influence beliefs and behaviors. 3. Possessing a fundamental understanding of the ethical/legal issues surrounding the access and use of information ICT (Information, Communications & Technology) Literacy 1. Using digital technology, communication tools and/or networks appropriately to access, manage, integrate, evaluate, and create information in order to function in a knowledge economy 2. Using technology as a tool to research, organize, evaluate and communicate information, and the possession of a fundamental understanding of the ethical/legal issues surrounding the access and use of information

Life & Career Skills Today’s life and work environments require far more than thinking skills and content knowledge. The ability to navigate the complex life and work environments in the globally competitive information age requires students to pay rigorous attention to developing adequate life and career skills. Flexibility & Adaptability 1. Adapting to varied roles and responsibilities 2. Working effectively in a climate of ambiguity and changing priorities Initiative & Self-Direction 1. Monitoring one’s own understanding and learning needs 2. Going beyond basic mastery of skills and/or curriculum to explore and expand one’s own learning and opportunities to gain expertise 3. Demonstrating initiative to advance skill levels towards a professional level 4. Defining, prioritizing and completing tasks without direct oversight 5. Utilizing time efficiently and managing workload 6. Demonstrating commitment to learning as a lifelong process Social & Cross-Cultural Skills 1. Working appropriately and productively with others 2. Leveraging the collective intelligence of groups when appropriate 3. Bridging cultural differences and using differing perspectives to increase innovation and the quality of work Principles of Entrepreneurship Course Guide © 2012, MBA Research and Curriculum Center®

Appendix C

21st Century Skills

Page C-7

Productivity & Accountability 1. Setting and meeting high standards and goals for delivering quality work on time 2. Demonstrating diligence and a positive work ethic (e.g., being punctual and reliable) Leadership & Responsibility 1. Using interpersonal and problem-solving skills to influence and guide others toward a goal 2. Leveraging strengths of others to accomplish a common goal 3. Demonstrating integrity and ethical behavior 4. Acting responsibly with the interests of the larger community in mind

Source: Partnership for 21st Century Skills. (2009, December). P21 framework definitions. Retrieved March 21, 2011, from http://www.p21.org/documents/P21_Framework_Definitions.pdf

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