Chapter 3 MKG 300

When looking for attractive opportunities, a marketing manager for a clothing manufacturer should consider

All the answers are correct. When looking for attractive opportunities, a marketing manager should analyze the firm's producing capability and flexibility, financial strengths, good relations with wholesalers and retailers, and the firm's marketing strengths.

Which of the following statements is true regarding General Electric's (GE) strategic planning grid?

GE may continue to support an existing yellow business but will probably reject a proposal for a new one, as yellow businesses are borderline cases. Yellow businesses are borderline cases—they can go either way. GE may continue to support an existing yellow business, but it will probably reject a proposal for a new one. It simply would not rate high enough on the relevant screening criteria.

Which of the following is true of the economic environment?

It can change rapidly. The economic environment refers to macro-economic factors that affect patterns of consumer and business spending such as national income, economic growth, and inflation. The rise and fall of the economy in general, within certain industries, or in specific parts of the world can have big impacts on what customers buy. Changes in the economic environment can happen rapidly.

Which of the following federal laws passed by the U.S. Congress prohibits fake advertising allowances and limits quantity discounts?

Robinson-Patman Act The Robinson-Patman Act prohibits "fake" advertising allowances and limits quantity discounts.

Which of the following is true of the continuum of environmental sensitivity?

Some products are more adaptable to foreign markets than others and thus may be less risky. Some products are relatively insensitive to the economic and cultural environment in which they are placed. These products may be accepted as is, or they may require a little adaptation to make them suitable for local use.

Which of the following statements is true of the technological environment?

Technology foreshadows breakthrough opportunities. Technology is the application of science to convert an economy's resources to output. Technology affects marketing in two basic ways: it creates opportunities for new products and it creates opportunities for new processes (ways of doing things).

Which of the following is not an example of how the economic environment may affect marketing strategy planning?

The demand for bicycles is increasing because consumers are becoming more health conscious. The economic environment refers to macro-economic factors that affect patterns of consumer and business spending such as national income, economic growth, and inflation. The rise and fall of the economy in general, within certain industries, or in specific parts of the world can have big impacts on what customers buy. Changes in consumer tastes are also important to marketing strategy planning but are not an aspect of the economic environment.

Which of the following is most likely to serve as a firm's mission statement?

We exist to provide customers with the best shopping experience anywhere in cyberspace. A mission statement sets out an organization's basic purpose for being. A good mission statement should focus on a few key goals and should not act as a substitute for more specific objectives. In this example, the mission statement focuses on a key goal rather than embracing everything.

According to the continuum of environmental sensitivity, which of the following products would be least risky to introduce in a foreign market?

an industrial welding machine The continuum of environmental sensitivity suggest that industrial products are relatively insensitive, while consumer products linked to cultural variables are sensitive to international differences.

When machines operate like humans with respect to learning and decision making it is referred to as

artificial intelligence. Many of the fastest growing technologies use artificial intelligence, which refers to having machines operate like humans with respect to learning and decision making. Artificial intelligence is implemented by an intelligent agent, which is a device that observes an environment and acts to achieve a goal.

How might firms increase production flexibility?

avoiding "in house" manufacturing Having large, special-purpose facilities can be an advantage in production, but they limit a firm's flexibility. Instead, contracting with outside producers and avoiding "in-house" manufacturing can increase a firm's production flexibility.

Which of the following is not an element of the external market environment?

direct environment There are four areas of the external market environment: technological, economic, cultural and social, and political and legal. The direct market environment includes customers, the company, and competitors.

Cutbacks in consumer spending and rising inflation are conditions that arise mostly due to factors in the

economic environment. The economic environment refers to macro-economic factors, including national income, economic growth, and inflation, that affect patterns of consumer and business spending. The rise and fall of the economy in general, within certain industries, or in specific parts of the world can have big impacts on what customers buy.

The Consumer Product Safety Commission

has broad power to set safety standards and can impose penalties for violation of these standards. The Consumer Product Safety Act of 1972 set up the Consumer Product Safety Commission. This group has broad power to set safety standards and can impose penalties for failure to meet these standards.

With reference to the measures of national income, gross domestic product (GDP) differs from gross national income (GNI) in that GDP

includes the income earned by foreigners who own resources in a nation, which GNI excludes. There are a variety of different measures of national income. Gross national income (GNI) is a measure that is similar to GDP, but GNI does not include income earned by foreigners who own resources in that nation. By contrast, GDP does include foreign income.

GNI is more useful than GDP when trying to determine the income level of the residents of a given country because GDP

includes the profits of foreign companies, most of which will leave the host country. GDP includes income earned by foreigners who own resources in a nation. This means that a large foreign company can increase the GDP of the country where it produces goods. Normally, however, very little of the resulting income stays with the host country.

To assess their progress against competitors, the maker of computer tablets tracked their portion of the total sales of computer tablets in the United States over the past six months as compared to all computer tablets sold in the United States in the same time period. This is best described as

market share. Often used by marketing managers to assess their progress against competitive rivals, market share is the portion of total sales in a product category accounted for by a particular brand.

When some consumers see the marketing mixes being offered by various firms as being different, but other consumers consider these alternatives to be close substitutes for each other, the competitive situation is described as

monopolistic competition. Most marketing managers in developed economies face monopolistic competition, a situation in which a number of different firms offer marketing mixes that at least some customers see as different. Each competitor tries to gain control (a monopoly) in its own target market, but competition still exists because some customers see the various alternatives as substitutes.

When a large percentage of people are concentrated in urban areas, such as in the United States,

place and promotion decisions are often simplified. Place and promotion decisions are often simplified when a country's people are concentrated in major cities.

Sales and marketing activity in international markets can be blocked by ______, which emphasize a country's interests above all else.

strong feelings of nationalism Nationalism, which places a country's interests above all else, can hinder, and even block, sales and marketing activity in international markets.

Which of the following terms best describes the idea that it is important to meet present needs without compromising the ability of future generations to meet their own needs?

sustainability Many organizations now screen opportunities on sustainability—the idea that it's important to meet present needs without compromising the ability of future generations to meet their own needs. In many lines of business, that is a tall order.

In order to identify potential competitors, it is important to take the viewpoint of _____ when conducting a competitor analysis.

target customers A competitor analysis is an organized approach for evaluating the strengths and weaknesses of competitors' marketing strategies. To identify potential competitors, it is useful to take the viewpoint of target customers. Companies may offer quite different products, but they are competitors if customers see them as offering close substitutes.

Which of the following is not a variable associated with the cultural and social environment?

technological innovation While technological trends may be embraced or rejected for socio-cultural reasons, technological innovation is a variable associated with the technological environment.

What is the purpose of free trade agreements?

to eliminate import and export barriers between countries Free trade agreements remove trade barriers between countries so that imports and exports are not restricted.

A firm may find itself in—or moving toward—pure competition

when customers see the firm's product as having close substitutes. Many product-markets head toward pure competition—or oligopoly—over the long run. In these situations, competitors offer very similar marketing mixes, and customers see the alternatives as close substitutes. When this happens, managers seek a competitive advantage by lowering prices.