Mktg 351- Cousley (Ch 3)
Which of the following statements is true?
A recent U.S. Supreme Court decision nullified federal laws that restricted political campaign fund contributions for corporate labor unions.
Jared Bledsoe hires a local landscape firm to plant trees and shrubs in his yard. The firm plants mostly dead plants but refuses to return Jared's money or replace the dead items. Jared's best course of action would be to contact the
Better Business Bureau
Which of the following attributes of a Toyota Scion would be most appropriate to emphasize in television commercials during an economic recession?
Durability
A good example of a government regulatory group at the local level is the Better Business Bureau
F
Disposable income is used to pay taxes, spend, and save
F
Environmental analysis is the process of collecting information about forces in the marketing environment.
F
Firms always adopt and use new technology.
F
If a person has buying power, he or she is influenced only by a product's absolute price
F
Of all the federal regulatory units, the ____________ most heavily influences marketing activities.
Federal Trade Commission (FTC)
In its advertisements, Johnson's Hair Care Products claims that its KLTR-14 gel will restore the hair of bald men. Members of the NARB believe the claim is unsupportable. What action can the NARB take?
File a complaint with the Federal Trade Commission.
In a period of economic recovery, the best marketing strategy for FedEx would be characterized by which of the following features?
Flexibility
Which of the following are the most frequently sentenced organizational crimes?
Fraud and antitrust violations
In the near future, what subculture will become the second largest group in the United States?
Hispanics
Suppose that a customer has a complaint against Meyers Sporting Goods Stores. He files a complaint with the Better Business Bureau. What action could the BBB take against Meyers if the complaint was substantiated and Meyers did not change the offending practice?
Issue a warning to consumers through the local newspaper
What national self-regulatory organization screens ads?
National Advertising Review Board
Price discrimination is prohibited by the ___________ Act.
Robinson-Patman
Wealth enables consumers to gain buying power
T
Wealth is an accumulation of past income and natural and financial resources
T
The tobacco industry in the United States is dominated by three large companies. When any one of these companies changes its price on tobacco products, the other two companies quickly adjust their prices to match it. From these characteristics, the tobacco industry could best be described as
an oligopoly.
___________ competitors are the most significant to marketers because buyers see the different products of these firms as direct substitutes for each other.
brand
According to the textbook, a manager's duties in an environmental analysis include
checking information for accuracy, resolving inconsistencies, and assigning significance to the findings.
Consumerism is a
diverse group of individuals and organizations attempting to protect the rights of consumers.
After Home Depot gathers information related to its marketing environment, it attempts to define current environmental changes and predict future changes. This determines possible opportunities and threats facing the company. It illustrates the process that is called
environmental analysis.
The 1990 Nutritional Labeling and Education Act directly prohibits
exaggerated health claims on food packages.
Consumer protection legislation deals with all of the following legal concerns except
monopolistic practices
The four major competitive structures are
oligopolies, monopolies, monopolistic competition, and pure competition.
Companies that compete for the same limited financial resources of the same customers are known as _________ competitors.
total budget
The accumulation of past income, natural resources, and financial resources is known as
wealth
If Toby Roberts has an income of $30,000, pays $6,000 in rent, $1,200 in utilities, and $5,000 in taxes per year, his disposable income is
$25,000.
The Coca-Cola Company has recognized the significant increase in population diversity within the U.S. soft-drink market. Which one of the following best illustrates the company's integration of this knowledge into its marketing strategy?
Ads featuring Hispanic actors and Tejano music
Which of the following companies would probably be most interested in tracking discretionary income levels?
BMW automobiles
A regular customer of Meyers Sporting Goods feels that some of its advertisements are deceptive. He responded to an ad for sale skateboards one hour after the store opened and found that none were left. Where should he file a complaint?
Better Business Bureau
Which of the following agencies would most likely have jurisdiction over the problem with lead in the paint of children's toys?
Consumer Product Safety Commission
What is the most important factor in distinguishing disposable income from income?
Consumer spending
If the economy recovers in the future and enters the prosperity phase of the economic cycle, what actions should Specialty Motors take?
Develop more distribution outlets and increase promotion
Which category of income are marketers most interested in?
Disposable income
Nabisco learned that health-conscious consumers preferred lower fat snack and lower-carbohydrate foods. At the same time, the firm saw sales of such products slumping and was careful not to launch any new varieties of these products for a while. Which of the following best describes Nabisco's action?
Environmental analysis
Which of the following is an advantage that self-regulatory agencies such as the BBB and the NARB have over governmental laws and regulatory agencies?
Establishment and implementation are usually less expensive.
A monopoly exists when a firm with many potential competitors attempts to develop a marketing strategy to differentiate its products
F
A recession is characterized by extremely high unemployment, very low wages, minimal total disposable income, and lack of consumer confidence in the economy.
F
All marketers interpret laws and regulations conservatively and strictly to avoid violating a vague law.
F
All members of an industry are bound to follow trade association guidelines.
F
An individual's after-tax income is called his or her discretionary income, which is used for spending and/or saving
F
An oligopoly exists when a firm offers a product that has no close substitutes, making the firm the sole source of supply.
F
Changes in values have little effect on people's needs for products
F
Credit increases future buying power.
F
Decreases in taxes lead to decreases in disposable income
F
Personal computers and cellular phones are technology
F
Political forces are beyond the control of marketers, and so they can only react to them
F
Product competitors provide very different products that solve the same problem or satisfy the same basic customer need
F
Pure competition is a common competitive environment
F
Technological changes do not directly affect what, how, when, and where products are marketed
F
The Council of Better Business Bureaus and the FTC make up the National Advertising Review Board (NARB).
F
The Food and Drug Administration influences marketing activities the most.
F
The major forces that make up the consumerism movement are consumer organizations and business organizations.
F
The number of single men and women living alone is declining
F
The proportion of the U.S. population that will be over 65 years of age is expected to decline by the year 2050.
F
Which of the following agencies regulates marketing activities the most?
Federal Trade Commission
Why are marketers interested in consumers' levels of disposable income?
It is a ready source of buying power.
Which of the following provides protection for and regulates brand names, brand marks, trade names, and trademarks?
Lanham Act
In what type of competitive structure is Specialty Motors operating?
Monopolistic competition
Which of the following actions is illegal?
Paying political officials not to enforce a particular law.
Texas rice farmers wish to get their product into the Japanese market but are hindered by a complex maze of regulations imposed by the Japanese government. The farmers are most likely to attempt to influence which aspect of the marketing environment?
Political
Toyota has developed aluminum car bodies that are 100 percent recyclable and light enough to help conserve fuel. What kind of response is this to environmental forces?
Proactive
Suppose that the Soljur Sports company was actually discriminating against Meyer Sporting Goods with its price increase. Which of the following acts prohibits this type of business behavior?
Robinson-Patman
International Office Supplies Wholesaler charges different prices to its various customers without any legal justification. This company is in violation of the
Robinson-Patman Act
Which of the following is not at the generic competitor level for Ford's Expedition sport utility vehicle?
Saturn SKY
In its advertisements for Bud Light beer, Anheuser-Busch has decided to include a statement saying "Know when to say when." This is an example of which one of the following types of regulatory forces affecting marketing efforts?
Self-regulation
Which of the following statements about self-regulatory programs is false?
Self-regulatory guidelines generally are stricter than governmental regulatory programs.
Which of the following acts was enacted to prevent businesses from restraining trade and monopolizing markets?
Sherman Antitrust Act
If all the gas stations in a city collaborated to determine what gas prices should be charged, they would be violating the
Sherman Antitrust Act.
A factor that affects willingness to spend is general economic conditions
T
A recent U.S. Supreme Court decision has nullified federal laws that restrict political campaign fund contributions for corporate labor unions
T
Although numerous regulatory forces arise from governmental sources, nongovernmental regulatory forces may also affect marketing decisions
T
An increasingly diverse cultural base in the United States means that marketers face increasingly diverse consumer markets.
T
An individual can have a high income and very little wealth.
T
Because of overlapping areas of responsibilities of regulatory agencies, confusion and conflict regarding jurisdiction of marketing activities are common.
T
Brand competitors market products with similar features, benefits, and prices to the same customers
T
Economic forces determine the size and strength of demand for products.
T
Environmental analysis helps managers identify potential threats and opportunities linked to environmental changes
T
For a given level of buying power, the larger the family, the greater the willingness to spend.
T
Fraud and antitrust violations are the most frequently sentenced organizational crimes.
T
Governments are big buyers, and the people who hold political offices often determine how much is purchased.
T
If political officials have positive feelings toward particular firms or industries, they are less likely to create or enforce laws and regulations that are unfavorable for business organizations.
T
Many laws that directly influence marketing activities were enacted either to preserve a competitive atmosphere or to protect consumers.
T
Monitoring the competitive environment guides marketers in developing competitive advantages.
T
Numerous self-regulatory programs have been created to stop or stall the development of laws and government regulatory groups that would regulate marketing practices.
T
People have changed their values regarding the permanence of marriage, which in turn has led to an increased emphasis on people being happily married.
T
Political and legal forces in the marketing environment are highly interrelated
T
State and local regulatory agencies usually do not establish and enforce regulations that conflict with the actions of national regulatory agencies.
T
Technological developments have a direct impact on creating and maintaining a marketing mix
T
Technology affects the types of products offered to consumers
T
Technology can help marketers become more productive.
T
Technology is the application of knowledge and tools to solve problems and perform tasks more efficiently.
T
The Sherman Antitrust Act, along with several other laws, is a procompetitive law because it was created to preserve competition
T
The amount of future income already committed to past credit agreements influences one's ability to use more credit.
T
The major source of cultural values is the family.
T
The marketing environment consists of external forces that directly or indirectly influence an organization's acquisition of inputs and generation of outputs
T
The number of firms that control the supply of a product may affect the strength of competition
T
The strength of one's buying power depends partially on the state of the economy
T
The three major components of sociocultural forces are demographic and diversity characteristics, cultural values, and consumerism
T
The total amount of disposable income is affected by the amount of taxes consumers pay.
T
Through technology assessment, managers try to foresee the effects of new products and processes on the firm's operations and on society
T
To achieve their objectives, consumer advocates write letters to companies, lobby government agencies, broadcast public service announcements, and boycott companies whose actions they deem irresponsible.
T
Newsweek enhances its visibility to readers by making its magazine available on the Internet. Newsweek is capitalizing on which environmental force?
Technological
Which of the following regulatory groups is a system of nongovernmental, independent, local regulatory agencies supported by local businesses?
The Better Business Bureau
Which of the following firms would be most likely to have a monopoly for its competitive environment?
TimeWarner Cable TV
Which of the following would represent a brand competitor for Ford's Escape Hybrid sport utility vehicle?
Toyota's Highlander Hybrid
Which of the following industries is most commonly regulated by state regulatory agencies?
Utility companies
Which of the following is the best example of utilizing technology to improve consumer relationships?
Waiters recording orders on handheld computers
When a firm continues to violate what the Better Business Bureau believes to be good business practices, what is one of the main actions the bureau will take?
Warn consumers of the unfair practices.
When PepsiCo takes the information collected through research and attempts to assess and interpret what it means for its soft-drink marketing efforts, PepsiCo is engaged in environmental
analysis.
By the turn of the twentieth century, the population of the United States had shifted to three large racial and ethnic groups. These groups are
blacks, Hispanics, and whites
Companies that market products with similar features, benefits, and prices to the same customer group are known as _________ competitors.
brand
Marketers primarily focus their environmental analysis on ____ competitors.
brand
Specialty Motors views Toyota Corolla and Honda Accord as ______ competitors.
brand
When marketers define their target market, they simultaneously establish a set of
competitiors
A group of protesters carries signs encouraging people to boycott Joe's Market, a small grocery store in an urban area. The protesters claim that Joe's takes unfair advantage of elderly and minority consumers. This protest is part of what we see today as the
consumerism movement.
Organizations that provide smoke-free environments or low-fat products are responding to changes in
cultural values
Many well-known restaurants and corporations are changing to a completely smoke-free environment, and fewer restaurants offer smoking and nonsmoking sections. These firms are responding to changes in
cultural values.
Many health care companies are making adaptations to meet the needs of an aging population as the demand for medical services and products such as diabetes supplies increases. This change in marketing strategy is best explained by a change in
demographics.
Consumer confidence is at a low during periods of
depression
The best approach for a company to take when monitoring its competitors is
developing a system for gathering ongoing information about competitors.
The income a consumer would use to purchase a Specialty Motors automobile is considered ___________ income.
discretionary
Heidi decided to spend some of her saved money on tickets to a Cold Play concert coming to town, and now she is planning on buying a new outfit for the concert. What type of resources is Heidi making decisions about?
discretionary income
Dell Computer collects information about a wide variety of competitive, economic, political, legal and regulatory, technological, and sociocultural forces that affect its marketing activities. This process is called
environmental scanning
XM Radio is concerned about how the increasing use of MP3 players will affect the future sales of its satellite radio service. The company decides to gather information about the changing trends in music access to prepare for this trend. XM Radio's process is called
environmental scanning
To monitor changes in the marketing environment effectively, marketers must engage in
environmental scanning and analysis.
Collecting information from secondary sources such as business, government, trade, and general-interest publications plays an important role in
environmental scanning.
By offering credit and financing through its GMAC division, General Motors is trying to help consumers
expand current buying power at the expense of future buying power.
Discretionary income is associated with all of the following except
food
Due to limited resources, a consumer decided to serve Hawaiian Punch to a New Year's Eve party crowd instead of Korbel champagne. As a result of this action, Korbel and Hawaiian Punch can be viewed as ___________ competitors.
generic
__________ competitors provide very different products that satisfy the same basic customer need.
generic
A person's buying power is a function of
income, wealth, and credit.
The amount of money received through wages, rents, investments, pensions, and subsidies is called
income.
When using credit to make purchases, consumers are
increasing current buying power at the expense of future buying power.
If the Federal Trade Commission believes that Soljur Sporting Goods is acting in violation of the law, the first move for the FTC is to
issue a complaint stating that the business is in violation of the law.
When a firm has many potential competitors and tries to develop a marketing strategy to differentiate its products from the competitors' products, a(n) _______ structure exists in the competitive environment.
monopolistic competition
J. Pitner Clothing is a medium-size specialty men's and women's clothing store in a market with many other specialty stores, department stores, and discounters. It has established a reputation for offering high-quality, fashionable merchandise with quality service. J. Pitner's competitive environment would best be characterized as
monopolistic competition.
Mixed Concrete cannot be shipped farther than twenty-five miles because the concrete might harden in the truck. Citrus County Concrete Company is the only supplier of mixed concrete to customers within a thirty-mile radius. Citrus County Concrete is an example of which one of the following competitive structures?
monopoly
The D-Lite Corporation produces a unique type of light bulb that is used in refrigerator manufacturing. D-Lite is the only maker of this light bulb, and there are no close substitutes for it. In this case, the D-Lite Corporation would be
monopoly
The type of competitive structure that exists in the case where there are almost no substitutes for a product is a(n)
monopoly
What type of competitive structure exists when a firm produces a product that has no close substitutes?
monopoly
The Better Business Bureau is probably the best-known
nongovernmental regulatory group.
Three primary methods of collecting information for environmental scanning are
observation, secondary sources, and marketing research.
The American automobile industry used to be dominated by "The Big Three," including General Motors, Ford, and Chrysler. However, as many more foreign competitors began influencing this market, the American companies had to modify and differentiate their products. The automobile industry moved from a(n) ______ structure to a(n) _______ structure.
oligopolistic; monopolistic competition
What type of competitive structure exists when just a few sellers control a large portion of the supply of a product?
oligopoly
Most marketers operate in a competitive environment of either
oligopoly or monopolistic competition
Textile companies historically face issues concerning the use of child labor in foreign countries and the various regulations created concerning this labor. The type of marketing environment forces executives for these companies are most likely to try to influence are ______ forces.
political
Procompetitive laws are those designed to
preserve competition.
Marketers who attempt to influence and change the various environmental forces have a(n) _____ response to these forces.
proactive
___________ competitors are those that compete in the same product class, but their products have different features, benefits, and prices.
product
Assuming that inflation is low, high buying power characterizes the _____ stage of the business cycle
prosperity
During which stage of the business cycle is unemployment low and total income relatively high?
prosperity
In general, which of the following competitive structures is an organization least likely to operate?
pure competition
The two least common competitive structures at the opposite ends of the continuum are
pure competition and monopolies.
If in an industry, none of the many sellers could influence the price of supply of its products, this industry would be characterized as
pure competition.
The broad nature of technology as it moves through society is referred to as
reach
Although Matt's company engages in environmental scanning and analysis, he feels more comfortable changing his policies and strategies to adapt to environmental forces rather than trying to influence these forces. Matt has a(n) _____ approach to marketing environmental forces.
reactive
Marketers who view political forces as being beyond their control are taking a ___________ response toward these forces.
reactive
Although marketing theory supports the contrary, it is more probable that marketing budgets will be cut during periods of economic
recession
Consumers begin to become more price and value conscious during periods of
recession
Total buying power declines during periods of economic
recession
Consumer confidence and willingness to spend begins to increase during periods of _____, and marketers must remain very flexible to make the necessary adjustments.
recovery
If M&M Mars Candies found a magazine article that provided key information on the television viewing habits of major candy consumer groups, this would be an example of information obtained through environmental
scanning.
The Children's Online Privacy Protection Act prohibits websites and Internet providers from
seeking personal information from children under the age of 13
The Pharmaceutical Research and Manufacturers of America sets guidelines for its member firms to follow regarding the use of unethical practices. Thus, it is engaging in
self-regulation
The strength of a person's "buying power" depends on economic conditions and
size of resources that can be traded in an exchange
People for the Ethical Treatment of Animals (PETA) have demonstrated against the sale of coats made of animal furs. PETA's efforts to change shoppers' attitudes represent a __________ force for fur retailers.
sociocultural
The FTC can issue a cease-and-desist order, which is an injunction to
stop doing whatever caused the complaint.
When Cisco Systems attempts to anticipate the effect of new products and processes on its own innovations, other business organizations, and society in general, the firm is engaging in
technology assessment.
Technology is
the application of knowledge and tools to solve problems and perform tasks more efficiently
More than half of the research of technology created is paid for by
the federal government.
In today's marketing environment, competitors can take on many forms. For example, Diet Coke can be seen as a competitor to Wrigley's Double Mint chewing gum. In this circumstance, these two products are described as ___________ competitors.
total budget
Technology assessment is
trying to foresee the effects of new products and processes on the firm's operation and on society in general.
When Specialty Motors is operating during a recessionary period, its promotion efforts should stress
value and utility.
The textbook suggests that the best approach a firm can take in responding to marketing environmental forces is
variable
Which of the following terms refers to consumers' propensity to buy?
willingness to spend
Although Shelby's income is comfortable, she hesitates to purchase a new car because she is concerned about how poor economic conditions may affect her company and in turn her future employment. Shelby lacks
willingness to spend.
