exam 3

If a company raised its price from $100 to $120 and the quantity demanded fell by 40%, the price elasticity of demand for this product is

-2

Which of the following is NOT a dimension of social responsibility and marketing citizenship

Technological

According to the text, marketing ethics refers to principles and standards that define

acceptable conduct in marketing

In a meeting with key personnel, Intel's president speaks to the firm's managers about social responsibility in business today. He suggest that the key to being socially responsible is to

monitor changes and trends in society's values

Anika knows that her company has a formal code of conduct, but she does not see this code being equally and consistently applied to all employees. Anika believes that this sporadic enforcement of the formal code only enhances the _______ for committing unethical acts

opportunity

If Umbro faces a standard demand curve that exists for most products, as it raises the prices of its soccer balls, the

quantity demanded goes down

Socially responsible business practices have provided all of the following benefits except

reducing marketing costs

A _______ orientation helps redefine the marketers' focus by encouraging them to broadly consider those entities most impacted by the marketers' actions. Those entities includes employees, suppliers, regulators, shareholders, customers, and the community

stakeholder

At the breakeven point,

the money a company brings in from selling products equals the amount spent producing the products

Marketing Ethics

refers to principles and standards that define acceptable conduct in marketing

Marginal analysis involves examining

what happens to a firm's costs and revenues when production is changed by one unit.

The most basic principles of marketing ethics are _______ to encourage marketers to conform to society's expectations for conduct

written as laws and regulations

A firm's culture may be expressed informally through

organizational stories

A business that contributes resources to the community to improve the quality of life is taking on a ________

philanthropic

Actions that promote human health and welfare address the _____ dimension of the pyramid of social responsibility

philanthropic

McDonald's suppports and funds Ronald McDonald houses for the families of terminally-ill children to stay in in to be near their loved ones. McDonald's action demonstrates the fulfillment of ______ responsibility

philanthropic

A measure of sensitivity of demand in relation to changes in price is

price elasticity of demand

all of the following are factors that influence the ethical decision-making process except

salary or wages

Which of the following is likely to result in the greatest decrease in ethical risks for an organization?

A well-implemented ethics program and a strong corporate culture

All companies have a responsibility to _____ so they can provide a return on investment to their owners and investors, create jobs for the community, and contribute goods and services to the economy

Be profitable

_______ promote ethical behavior by reducing opportunities for unethical behavior; employees know what is expected of them and what kind of punishment follows if rules are violated

Codes of conduct

According to some environmentalists, what are the three types of products that all products should be reduce to?

Consumables, durable goods, and unsalable

In Europe, companies can voluntarily apply for designation to indicate that their product is less harmful to the environment than competing products. This label is known as the

Eco-label

Which of the following statements best summarizes the perspective that most marketing managers have on unethical behavior?

Most do not believe that unethical conduct will lead to success and refrain from taking unethical opportunities

Which of the following statements about codes of conduct is true?

Most large corporations have formal codes of conduct

Which of the following is most likely to have an inelastic demand curve?

Nonelective surgery

STM Corporation is located in a small city that has limited economic growth at this time. Due to the condition of the local school system, STM contributed $1 million to repair and revive it, stating that STM believed in education for the community. This action would imply that STM is in which level of the pyramid of social responsibility

Philanthropic

Pharmaceutical companies have at times been accused of acting unethically by taking advantage of customers in the area of

Pricing

The effect that coworkers have on the ethical decision-making process depends on a person's exposure to ethical and unethical behavior. Which of the following statement

The more a person is exposed to unethical activity in the organization, the more likely he or she will behave unethically

Ecover, a manufacturer of personal care and beauty products, has a focus on sustainability. It has developed eco-packaging, eliminated many potentially harmful chemicals from its products, and has improved its production systems to reduce waste. What major social responsibility issue is Ecover addressing?

The natural environment

At what point does a firm maximize profit?

The point at which marginal cost equals marginal revenue

Marketers resolve ethical issues based on their experiences and what they learn from others in the organization. The outcome of this learning process depends on _____________________, opportunity for unethical behavior, and exposure to others who behave ethically or unethically.

The strength of personal values

Which of the following statements about codes of conduct is false

They must be detailed enough to take into account many possible situations

Instead of addressing the question _________, many environmentalists and marketers believe the question should be ____

What should we do with our waste?; How can we produce products without waste?

Which of the following statements about price elasticity is false?

When price is raised on a product that has an inelastic demand, then total revenue will decrease

An ethical issue is

an identifiable problem, situation, or opportunity requiring an individual to choose from several actions that must evaluated as right or wrong

A marketing ethics issue likely exists when

an individual or organization must choose from among several actions that must be evaluated as right or wrong.

Suppose managers at Case IH have determined the costs associated with producing combine harvesters are equal to the price that they charge for the combines. This indicates that Case IH is producing at the ____ point

breakeven

Mike is developing a business plan for a new type of bicycle cleat. He is interested in finding the point at which the costs of producing the cleat will equal the revenue earned from selling the product. Mike is interested in finding the

breakeven point

The practice of linking a firm's product marketing to a particular cause on an ongoing or short-term basis is known as

cause-related marketing

The unethical practice of shipping surplus inventory to wholesalers and retailers at an excessive rate, typically before the end of a quarter is called

channel stuffing

Codes of Conducts are also frequently known as

codes of ethics

Eva organized a boycott of a local restaurant because of the owner's obvious prejudical treatment of Latinos. Eva's action would most likely be called ____

consumerism

A set of values, beliefs, goals, norms, and rituals shared by members of an organization is called

corporate culture

What are two common distribution-related ethical issues?

counterfeiting and channel stuffing

A graph of the quantity of products marketers expect to sell at various prices if other factors remain constant is a

demand curve

There will be significant ethical diversity in any one organization because of

different levels of personal ethics

At times, large retailers such as Tesco may be accused of coercion in dealing with intermediaries becuase of the amount of power and control these large companies have over many of their supplieers. This is most potentially a ______-related ethical issue

distribution

For most firms in the United States, demand curves are

downward sloping to the right

The way to deal with ethical issues is proactively

during the strategic planning process

One of the most significant principles of business is that the primary objective of the executive management of a corporate entity is to engage in strategic actions that increase shareholder value. If we think of this objective in terms of the four dimensions of social responsibility it would be part of the

economic dimensions

If Norwegian Cruise Lines increases the price of its seven-day cruise package by 10% and, as a result, experienced a 20% decline in customer bookings, Norwegian's demand would be

elastic

Product-related ethical issues arise when marketers

fail to disclose information to consumers about the risks associated with using a product

Distribution-related ethical issues arise when marketers

force channel intermediaries to behave in a specific manner

Ethical choices in business situations are most often made

jointly in work groups and committees

As far as prices are concerned, environmentalists believe prices should

reflect the direct cost as well as the cost of air, water, and soil used

The owner of Big Jim's Motorcycles is opening a new retail location. Which of the following is most likely to be a fixed cost for Big Jim's Motorcycles?

Building rent

Which of the following statements is false? a. If an ethical or social responsibility issue can withstand open discussion that results in agreement or limited debate, an acceptable solution may exist. b. A company that supports both socially responsible decisions and adheres to a code of conduct is likely to have a positive impact on society. c. If other persons in the organization approve of an activity and it is legal and customary within the industry, chances are that the activity is acceptable from both an ethical and social responsibility perspective. d. Social responsibility and marketing ethics are interrelated. e. Social responsibility and marketing ethics are the same thing and can be used interchangeably.

E

_______ is (are) most likely to improve ethical behavior in a marketing organization

Eliminating unethical individuals and improving the organization's ethical standards

What do environmentalists set as an objective for profitability?

Environmentalism should be made profitable, and companies attempting to protect the environment should not have to compete with those harming it in the marketplace

Which of the following products is most likely to have an inverted C-shaped demand curve?

Eternity perfume

Analisa understands that even small businesses like her local catering business have certain responsibilities to society. She knows that she must abide by the laws that apply to her business and try to make a profit. What are the other obligations Analisa should know about?

Ethical and philanthropic

______ are formalized rules and standards that describe what a company expects of its employees in terms of ethical behavior

Ethics contracts

Which of the following would be consistent with Grayson Manufacturing's understanding of the "bad apple" concept of improving the ethical conduct of salespeople?

Firing unethical salespeople

A potato chip company advertises that its newly launched product can lower cholesterol, although the company cannot provide evidence to substantiate this claim. This situation involves an ethical issue related to which element of the marketing mix?

Promotion

Which of the following is the best example of strategic philanthropy for Office Depot, the large office supply chain?

Providing low-income families with school supplies and computer training

Opportunity provides a pressure that may determine ethical decisions in marketing. Opportunity is best thought of as

a favorable set of conditions that limits barriers or provide rewards

Any constituent who has a claim in some aspect of a company's products, operations, markets, industry, or outcomes is known as a

stakeholder

Consumerism is

the efforts of independent individuals, groups, and organizations to protect the rights of consumers

Hopper Industries determines that for its air compressors the following results are achieved at a price of $250; total costs= $250,000; variable costs per unit = $100; fixed costs = $175,000. GIven these figures, Hopper would break even at _____ units

1167

If product price is $100, average variable cost $40 per unit, and the total fixed costs are $120,000, what is the breakeven point?

2000

The el Rey del Mar Golf Club found that with annual fixed costs of $60,000, its breakeven point is 2000 members when the membership charge is $60 per person per year. What is the variable cost per person for el Rey del Mar?

30

A certain location of Hamish's restaurant has annual fixed costs of $200,000. If an average tab at the restaurant is $60 and the variable costs per tab is $20, how many groups of customers must Hamish's serve per year in order to break even?

5000

Which of the following is true about price competition?

A major advantage of price competition is flexibility

Which of the following is true about breakeven analysis?

At the breakeven point, the firm's sales revenue equals the sum of its fixed and variable costs

Provisions of the Robinson-Patman Act, as well as those of the _____, limit the use of price differentials

Clayton Act

Which of the following is NOT a discount provided to business customers?

Diffferentiated

One way in which marketers can demonstrate social responsibility is through programs in sustainability. Which of the following is not included as a goal of sustainability?

Focusing primarily on the external environment of the company

Which of the following is NOT one of the four objectives that environmentalists believe companies should implement in order to sustain the natural environement?

Force consumers to recycle products

Which of the following is true about nonprice competition?

In nonprice competition, marketeres distinguish their brands with unique product features

What does the demand curve for a prestige product look like?

It forms a curve where the greatest quantity sold comes at a medium price, and the quantities fall as the price increases or decreases

Which of the following is true about price?

It is the only marketing mix variable that can be changed quickly to respond to shifts to demand

Which of the following statements about implementing an ethics and legal compliance program is false?

It rarely needs to be revised

What assumption does breakeven analysis make that limits its overall usefulness?

It relies on demand for a product being inelastic

Which of the following statement is true about the factors that affect pricing decisons?

Marketers should set prices that are consistent with the organization's goals and mission

Brews and 'Cue is a bar with a country and western atmosphere. In addition to the bar, Brews and 'Cue sells barbecue meats, sandwiches, and meals. Woody, the owner of the business, has recently implemented temporary price reductions through clearance sales, discounts, and nightly drink specials. What is Woody most likely trying to do?

Raise cash quickly

Since Viking has decided to use nonprice competition for its upscale appliances, it distinguishes its brand through all but which of the following

Rebates

Which of the following prohibits price discrimination that lessens competition among resellers?

Robinson-Patman Act

The _____ prohibits price fixing among firms in an industry

Sherman Antitrust Act

Which factor is least likely to affect pricing decisions?

Shifting stock values

Which of the folowing acts does NOT directly affect pricing decisions?

Simpson-Marshall Act

Honeybees are disappearing at an alarming rate, and since they pollinate about a third of all foods we eat, it is an important concern. That's why General Mills launched a #BringBacktheBees campaign, which included removing Buzz the bee from packages of Honey Nut Cheerios to increase the awareness of the issue. In addition, it gave away packets of wildflower seeds so that Cheerios lovers could grow flowers for bees. This example illustrates the positive consequences of

Social responsibility

What is the major difference between social responsibility and marketing ethics?

Social responsibility deals with the total effect of marketing decisions on society, whereas marketing ethics relates to individual and group evaluations in marketing situations

Which of the following statements about social responsibility is correct?

Social responsibility refers to a company's obligation to maximize its positive impact and minimize its negative impact on society

Which of the followign statements is true about marginal analysis?

Total cost is the sum of average fixed costs and average variable costs times the quantity produced

What type of discount is given to a business purchaser for performing activities such as transporting, storing, and selling?

Trade

If a firm currently produces 2500 products per month and decides to produce 2501, it will incur

a marginal cost

To gain market share, when Kia first entered the US car market it did so with a comparatively low pricing strategy. One of the negative side effects of making this pricing decision is

a negative impact on consumers' perceptions of quality

Research suggests that a relationships exists between ______ and an organizational climate that supports marketing ethics and social responsibility

a stakeholder orientation

Sara buys a new dress at Marshalls that has a price tag with "Compare at $150.00. Our Price $89.99." This is an example of the use of

an external reference price

Barbara is a marketing consultant who specializes in small businesses. Her current client is very interested in estimating the costs for the coming year, in order to find the breakeven point. Barbara knows this is an important financial statistic because below the breakeven point, the firm is operating

at a loss

The types of prices that appear most in ads are ____, while the types of prices that occur least often in ads are _____ prices

bargain; premium

Del introduces a new voice-activated personal computer that does not require a keyboard. Dell charges the high price of $2500 per unit, thus generating large profits because it has 20% market share. Dell's major problem is in the future will most likely be

competition

Both the Federal Trade Commision Act and the Wheeler-Lea Act prohibit

deceptive pricing

When a customer is considering the purchase of a product in a less-familiar product category, that individual is likely to rely more heavily on

external reference prices

Marketers generally view ______ as the minimum price a product can be sold for

fixed and variable costs

Diamond Pet Foods is a large pet food manufacturer. if the strategic goal for Diamond in the coming year was to ________ in North Amerca, it should use temporary price reductions

gain market share

Companies that incorporate ethics and social responsibility into their strategic plans are likely to experience

improved marketing performance

Three factors that influence the ethical decision-making process in marketing include

individual factors, organizational factors, and opportunity

If Florida Gas and Electric increased its rates by 10% and experienced a 2% reduction in the demand for power, the demand would be

inelastic

A price developed in the consumer's mind through experience with the product is called a(n)

internal reference price

What a price means or what it communicates to customers is called

interpretration

For most products, a(n) ______ relationship exists between the price of a particular product and the quantity demanded

inverse

DoneFast Inc. is a very profitable automobile repair shop. The company is well known for its speedy service and involvement in the community, but it fails to properly dispose of its used oil as outlined in environmental regulations. DoneFast is failing in its ______ responsibilities.

legal

To maintain market share and revenue in an increasingly price-sensitive market, companies have focused on quality, used labor-saving technologies, and used efficient manufacturing processes. These tactics have provided gains in productivity that have translated into ____ for the consumer

lower costs for the company and lower prices

Dunlop managers notice that when the number of tires the company sells increases from 1,000,000 to 1,000,001 total revenue rises $35. The $35 represents the firm's

marginal revenue

If Tom's of Maine wants to maximize profit on its toothpaste, it should operate at the point where

marginal revenue equal marginal costs

The adoption of a strategic focus for fulfilling the economic, legal, ethical, and philanthropic social responsibilities expected by stakeholders is called

marketing citizenship

Because most ethical choices pertaining to marketing decisions are jointly made, an organization must ensure its ______ reflects the organization's values, beliefs, and norms

organizational or corporate culture

Fairmont Austin drops the price of a suite from $264 to $234 per night and experiences a reduction in the quantity of rooms demanded of an average of five per night. This is an indication that suites at this hotel are apparently an example of a(n) ____ product.

prestige

Catherine is out shopping with her friends for the day. While evaluating a decision to purchase a handbag, she says, "People notice when you buy the most expensive brand of a product." Catherine is most likely a _______ consumer.

prestige- sensitive

Buyers who focus on purchasing products that signify prominence and status are

prestige- sensitive buyers

For most consumers, there is an assumed relationsihps between

price and quality

If a company provides price differentials that harm competition by giving one or more buyers a competitive advantage, it is comitting

price discrimination

Dividing the percentage change in quantity demanded by the percentage change in price gives the

price elasticity of demand

To determine the breakeven point in units, divide the fixed costs by

price minus variable costs

Failure to maintain product quality and integrity in production may result in _____ if products are found to be defective

product recalls

The degree to which the price of a product enhances a customer's satisfaction with the purchase experience and with the product after the purchase is part of their

response

Premium-priced products are marketed through

selective or exclusive distribution

If Glad expresses concern that its plaztic bags and storage products are having too great an impact on the pollution of groundwater under landfills, this concern is directly related to the firm's

social responsibility

Companies that are considered to be good corporate citizens and consider the diverse perspectives of different groups affected by their operations are said to have a stakeholder orientation

stakeholder

Being ethically and socially concerned is consistent with meeting the demands of

stakeholders

When marginal cost is equal to marginal revenue, the firm should

stop producing additional units to maximize profits

Ford Motor has frequently extolled its efforts to reduce greenhouse gas emissions from its manufacturing and its products as well as the increased fuel efficiency of its vehicles. This is an example of

sustainability marketing

Various stakeholders and ____ determine the acceptable standards of conduct involving ethics

the organization's ethical climate

Monopolies usually keep their prices at a level that generates a reasonable, but not excessive, return primarily because

they want to avoid government regulations on their pricing

If a product has an inelastic demand and the manufacturer raises its price,

total revenue will increase

Ethical marketing decisions foster ______, which helps build long-term marketing relationships and is a key part of developing customer relationships

trust

While marketing ethics creates ________, philanthropic activities create ________

trust;goodwill

A company trying to position itself as value oriented hsould NOT

use premium pricing for its products

Veronica is shopping for a new pair of atheltic shoes. Since she is concerned about both the price and the quality aspects of a product, Veronica is most likely a _______ consumer

value-conscious

The amount of profit a channel member expects depends on

what the intermediary could earn if it were handling a competing product instead