MHR 322 Final Exam #1 Questions with Correct Answers
Flame disk case - ✔✔1. Can provide customers with a solution that other businesses cannot
nearly as well.
2. Wasn't created in response to a known customer need.
• Started in WI, cleaner burning alternative to grilling option
• Easily disposable, low cost
• Getting people to try it was difficult
• Advertised in the wrong section of the store (seasonal section)
--> downside: must pay for factory year round but only makes money during the specific season
--> upside: during the summer, off during the other seasons: good for college students.
• Had technical hurdles with disposable grills
• Aesthetically unappealing
• Experiment ran in Madison based on a sample (in Madison) which is a bias sample compared
to the rest of the US
• Flamedisk was successfully sold to BIC
• Needed big factory in order to be up to code
product acquisition process - ✔✔key to understanding the lifetime value of a customer
1. Come up with a good sample (test) of sales process and who you are selling to → wrong
place if you're a scientist, but right place if you're an entrepreneur
2. Find Persona
paying customer - ✔✔Process to acquire a _____ _____:
• How customers will determine they have a need/opportunity to move away from their status
quo and how to activate customers to feel they have to do something different
• How customers will find out about your product.
• How customers will analyze your product
,• How customers will acquire your product
• How customers will install your product
• How customers will pay for your product
• You don't have a business unless you have a ____ ____
crawl walk run strategy - ✔✔DBE describes a process designed to discover a
sales process that can be standardized
• Sometimes it is necessary to build a product by working with customers using an inefficient
sales strategy (crawl, then walk) before you can pursue a standardized sales process (run)
B2B - ✔✔Most students focus on B2C products instead of ___ products
• ___ have several favorable attributes
• Value proposition is clearer
• Often need is easier to establish
• Sales process is potentially easier (and cheaper)
to standardize
persona - ✔✔an individual (ideal customer) who is a good representation of your product.
• Starts with this one person company understands them completely, works with them and
tunes product around their needs.
• This persona is NOT the entrepreneur
• You need one persona for each market
**Remember, start with only ONE market**
Customer - ✔✔Components of the process to sell products to the _____
• lead generation
• access to influencers
• pre-purchase planning
,• purchasing
• installation
• Factor in any regulations from governmental/quasi-governmental organizations that would
potentially impact your ability to sell your product.
o Outline what regulations you and your ____ are required to fulfill in order for the product to
be sold.
Customer Map - ✔✔Helps to understand the length of the sales cycle
• Builds foundation for the cost of customer care acquisition calculation
• Identifies hidden obstacles that inhibit your ability to sell your product and get paid.
• Helps to show potential leaders and/or investors that you understand the customer's buying
process.
• **Need to include key players from the DMU that will be involved, their influence on the
process, their budget authority (amount and type), how long will it take the complete each
component you identify, and the inputs and outputs of this step.**
length - ✔✔The _____ of the sales cycle is a crucial determinant in how expensive it will be for
you to acquire new customers, and is important to project cash flow accurately
Customer Care Acquisition Calculation - ✔✔You need to reach a point of making more money
from current customers than attracting new customers
• Always costs more than you think to acquire customers.
Decision-making unit (DMU) - ✔✔Decides whether customer will buy your product
• Understanding this group and explicitly mapping out each person's role and interest is of
critical importance not just for the sale, but also much earlier in the process when you are
developing the product and all of its attributes
• Multiple people have to be convinced that your product is worth purchasing.
• To sell successfully, you must identify all of the people who will be involved in the decision to
acquire the product for the end user.
, • Gives insight into what your odds of success are, and how much resource, skill, and time it
takes for a new customer to acquire your product.
champion - ✔✔part of the DMU
• wants the customer to purchase the product. "advocate"
• purchases product offhand
end user - ✔✔part of the DMU
• person who actually uses product to create value.
primary economic buyer - ✔✔part of the DMU
• primary decision maker, everyone looks to them to sign off on purchase
**Usually they control budget**
purchase veto power - ✔✔• In B2B market, this person outranks advocate/end user.
• In consumer market, people rarely have this, but primary influencer(s) may have enough
respect to exert de facto veto.
**Unions/collective bargaining agreements may block purchase of products because of certain
provisions.**
purchasing department - ✔✔handles logistics of the purchase and can be an obstacle.
• Often looks to drive prices down, can try to apply purchasing rules.
• Try to neutralize them, but not to sell to them.
inquiry mode - ✔✔Do this in order to get proper information about the DMU
• If customer believes that your product provides a strong value proposition, the conversation
will flow naturally.
• You should refer back to your previous research to see influences on the persona.
Flame disk case - ✔✔1. Can provide customers with a solution that other businesses cannot
nearly as well.
2. Wasn't created in response to a known customer need.
• Started in WI, cleaner burning alternative to grilling option
• Easily disposable, low cost
• Getting people to try it was difficult
• Advertised in the wrong section of the store (seasonal section)
--> downside: must pay for factory year round but only makes money during the specific season
--> upside: during the summer, off during the other seasons: good for college students.
• Had technical hurdles with disposable grills
• Aesthetically unappealing
• Experiment ran in Madison based on a sample (in Madison) which is a bias sample compared
to the rest of the US
• Flamedisk was successfully sold to BIC
• Needed big factory in order to be up to code
product acquisition process - ✔✔key to understanding the lifetime value of a customer
1. Come up with a good sample (test) of sales process and who you are selling to → wrong
place if you're a scientist, but right place if you're an entrepreneur
2. Find Persona
paying customer - ✔✔Process to acquire a _____ _____:
• How customers will determine they have a need/opportunity to move away from their status
quo and how to activate customers to feel they have to do something different
• How customers will find out about your product.
• How customers will analyze your product
,• How customers will acquire your product
• How customers will install your product
• How customers will pay for your product
• You don't have a business unless you have a ____ ____
crawl walk run strategy - ✔✔DBE describes a process designed to discover a
sales process that can be standardized
• Sometimes it is necessary to build a product by working with customers using an inefficient
sales strategy (crawl, then walk) before you can pursue a standardized sales process (run)
B2B - ✔✔Most students focus on B2C products instead of ___ products
• ___ have several favorable attributes
• Value proposition is clearer
• Often need is easier to establish
• Sales process is potentially easier (and cheaper)
to standardize
persona - ✔✔an individual (ideal customer) who is a good representation of your product.
• Starts with this one person company understands them completely, works with them and
tunes product around their needs.
• This persona is NOT the entrepreneur
• You need one persona for each market
**Remember, start with only ONE market**
Customer - ✔✔Components of the process to sell products to the _____
• lead generation
• access to influencers
• pre-purchase planning
,• purchasing
• installation
• Factor in any regulations from governmental/quasi-governmental organizations that would
potentially impact your ability to sell your product.
o Outline what regulations you and your ____ are required to fulfill in order for the product to
be sold.
Customer Map - ✔✔Helps to understand the length of the sales cycle
• Builds foundation for the cost of customer care acquisition calculation
• Identifies hidden obstacles that inhibit your ability to sell your product and get paid.
• Helps to show potential leaders and/or investors that you understand the customer's buying
process.
• **Need to include key players from the DMU that will be involved, their influence on the
process, their budget authority (amount and type), how long will it take the complete each
component you identify, and the inputs and outputs of this step.**
length - ✔✔The _____ of the sales cycle is a crucial determinant in how expensive it will be for
you to acquire new customers, and is important to project cash flow accurately
Customer Care Acquisition Calculation - ✔✔You need to reach a point of making more money
from current customers than attracting new customers
• Always costs more than you think to acquire customers.
Decision-making unit (DMU) - ✔✔Decides whether customer will buy your product
• Understanding this group and explicitly mapping out each person's role and interest is of
critical importance not just for the sale, but also much earlier in the process when you are
developing the product and all of its attributes
• Multiple people have to be convinced that your product is worth purchasing.
• To sell successfully, you must identify all of the people who will be involved in the decision to
acquire the product for the end user.
, • Gives insight into what your odds of success are, and how much resource, skill, and time it
takes for a new customer to acquire your product.
champion - ✔✔part of the DMU
• wants the customer to purchase the product. "advocate"
• purchases product offhand
end user - ✔✔part of the DMU
• person who actually uses product to create value.
primary economic buyer - ✔✔part of the DMU
• primary decision maker, everyone looks to them to sign off on purchase
**Usually they control budget**
purchase veto power - ✔✔• In B2B market, this person outranks advocate/end user.
• In consumer market, people rarely have this, but primary influencer(s) may have enough
respect to exert de facto veto.
**Unions/collective bargaining agreements may block purchase of products because of certain
provisions.**
purchasing department - ✔✔handles logistics of the purchase and can be an obstacle.
• Often looks to drive prices down, can try to apply purchasing rules.
• Try to neutralize them, but not to sell to them.
inquiry mode - ✔✔Do this in order to get proper information about the DMU
• If customer believes that your product provides a strong value proposition, the conversation
will flow naturally.
• You should refer back to your previous research to see influences on the persona.
