Industry - Answer-is a grouping of businesses that interact in a common environment as part of a value chain or
distribution channel that delivers a particular good.
Market - Answer-is defined by customers, those who pay for the benefits of the product or service.
Primary Market - Answer-Tho...
MGT-420 Exam I Questions with Verified
Answers
Industry - Answer-is a grouping of businesses that interact in a common environment as
part of a value chain or
distribution channel that delivers a particular good.
Market - Answer-is defined by customers, those who pay for the benefits of the product
or service.
Primary Market - Answer-Those customers or markets that have the most need for what
you're offering are called the primary market.
There are two important reasons to study the industry in which your business will
operate. - Answer-1. It represents the business's external environment, and no business
operates independent of its external environment.
2. You need to understand whether you can make a profit in the industry and if that
profit will be significant enough to make the effort to start the business worthwhile.
The data collected should answer the following key questions - Answer-What does the
industry look like? Is the industry growing? Where are the opportunities? How quickly
does the industry adopt new technology? How much do industry companies spend on
research and development? Who are the opinion leaders in the industry? Are there
young, successful firms in the industry? What does the future look like? Are there any
threats to the industry? What are the typical margins in the industry?
Secondary sources - Answer-information to gather background data. Today, Google
search engine or any other as well as Wikipedia.com are great places to get an
introduction to an industry and pick up on some trends by noting what is being talked
about. Journals, trade magazines, industry analysts, government publications, and
annual reports of public corporations—normally available online in a university or
community library—are also excellent starting points;
Primary field data on the industry PG 49 (Textbook) Lists types for reference - Answer-
Put more simply, you need to talk with people in the industry to validate what they have
gathered with their secondary research. Some sources to tap are
The value chain - Answer-consists of all of the companies that contribute to the
development and distribution of products and services coming out of that industry.
economies of scale - Answer-This means that their costs to produce have declined
relative to the price of their goods and services. Typically, economies of scale are found
in more mature industries.
, Brand Loyalty PG 54 - Answer-New entrants to an industry face existing products and
services with loyal customers who are not likely to switch easily to something new.
Capital Requirements PG 54 - Answer-The cost of entering many industries may
include up-front advertising, research and development (R&D), and expenditures for
plant and equipment.
Switching costs for the buyer - Answer-A manufacturing business that has spent a lot of
time and money finding the best supplier for the raw materials it needs to produce its
product will not easily change suppliers because that would mean going through the
whole process again.
Access to distribution channels - Answer-The new venture must persuade established
distribution channel members to accept its new product or service and must prove that it
will be beneficial to distributors to do so and this costs money
Proprietary Factors - Answer-Barriers to entry also include proprietary technology,
products, and processes. Where established firms hold patents on products and
processes that the new venture requires, they have the ability either to keep the new
venture out of the industry or to make it very expensive to enter.
Government - Answer-The government can limit entry to an industry or market through
strict regulation, licensing requirements, and by limiting access to raw materials via laws
or high taxes and to certain locations by means of zoning restrictions.
for a new company, the goals of market research are to - Answer-(1) identify and profile
the first customer; (2) estimate potential demand from that customer; and (3) identify
subsequent customer segments that can be tapped later on to grow the company
Gatekeepers - Answer-are those individuals or companies that hold the key to reaching
particular customers; they control the flow of information. For example, if you want to
sell to the U.S. government, you need to qualify as a government con-tractor through
the appropriate agency, which is the gatekeeper.
Influencers PG 59 - Answer-are people who want to affect the purchase decision and
whose approval is often required before a decision to purchase is made. Physicians are
often considered influencers in decisions about medical device purchases because they
have direct contact with the beneficiary: the patient.
Deciders - Answer-are people who make the final decisions about purchases, usually
for a company and usually based on a budget.
Purchasers - Answer-are those who have the actual authority to buy.
Users - Answer-are the ultimate beneficiaries of the purchase.
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