Chapter 3 - The Global Environment - Smartbook & Quiz

_______ refers to how the value of one country's currency changes in relation to the value of other currencies.

Currency fluctuation

Which of the following statements regarding currency fluctuations is true?

Currency fluctuations can provide marketing opportunities whether a currency is appreciating or depreciating.

Which of the following statements is true about the economic factors that affect marketing?

The amount consumers spend is often based on their confidence in the stability of their future income.

Economic conditions impact customers' willingness and ability to buy products.

True Explanation: Since economic conditions impact customers' willingness and ability to buy products, firms must create, communicate, and deliver value in a way that's appropriate for the current economic climate.

The North American Free Trade Agreement (NAFTA) sought to _______ barriers to both trade and investment among participating countries.

eliminate

The vote for increased sales tax revenue that helped to fund the Bricktown development is an example of which type of environmental factor?

political Explanation: The campaign to get voters to pass a tax increase to develop Bricktown is an example of a political factor than impacted RedPin and other businesses in the area

A marketer that utilizes social media to help a nonprofit organization secure funding and register volunteers is aware of the _______ factor that can impact marketing campaigns.

technological

Palo and Clarita were walking downtown when Palo suddenly received an electronic coupon for an Italian restaurant that was located just up the street. This illustrates how _______ can change the way firms market to consumers.

technology

Which of the following items are demographic characteristics?

- Age - Ethnicity - Gender

Which of the following characterize baby boomers?

- Baby boomers represent the wealthiest generation in U.S. history. - Baby boomers are individuals born between 1946 and 1964. - Baby boomers are retiring at a rate of 10,000 per day.

Which of the following are technological advancements that have helped small business reach consumers around the globe?

- The ability to track shipments around the globe - The development of company websites - Tools such as Google Translate

As noted in your text, the term "millennials" refers to individuals who were born between _______.

1978 and the late twentieth century

During the recession that began in December of 2007, Americans reduced their overall charitable giving by approximately _______ percent from levels prior to the recession.

20

Consider the following statements to determine which one accurately describes the concept of consumer ethnocentrism.

A belief by residents of a country that it is inappropriate or immoral to purchase foreign-made goods or services

Legal

A new bill that passes through congress that limits the amount of advertising that can be aired during children's programming.

Which of the following is true of recession?

A recession decreases consumer confidence.

China

Advertising that all products sold are made in the home country since citizens of this country have very high levels of consumer ethnocentrism.

The Dominican Republic-Central America Free Trade Agreement is an international agreement that eliminated tariffs, reduced nontariff barriers, and facilitated investment among _______, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic.

Costa Rica

Based on her scan of the external factors that would impact her small business, how did Erin Brewer promote the local culture at RedPin?

By the items she offered on her menu

Political

Candidates for public office criticizing an entertainment company for producing violent movies.

DR-CAFTA is a trade agreement for countries in _______.

Central America

_______ are characteristics of human populations, such as age, gender, ethnicity, and education level, that can be used to identify consumer markets.

Demographics

Saudi Arabia

Developing a non-alcoholic beverage for young adults since the sale of alcohol is forbidden in this country.

_______ competition is also called brand competition or category competition.

Direct

_______ competition refers to a situation in which products that perform the same function compete against each other in a market.

Direct

_______ income is best defined as the amount of spending money available to households after paying taxes.

Disposable or net

Which of the following statements is true about the economic factors in a marketing environment?

Economic factors influence almost every marketing decision a firm makes.

The _______ _______ is an economic, political, and monetary union of 28 European nations. Its formation sought to reduce barriers to the free trade of goods, services, and finances among member countries.

European Union (EU)

Because they do not generate a profit, nonprofit organizations do not need to scan the external marketing environment.

False Explanation: Environmental scanning for a nonprofit organization presents challenges that for profit businesses do not face. Nonprofit marketers must convince donors to support the mission of the organization without receiving any direct benefits.

Millennials are also known as _______.

Generation Y

Where is the World Trade Organization (WTO) headquartered?

Geneva, Switzerland

_______ is best defined as the market value of all officially recognized final goods and services produced within a country in a given period.

Gross domestic product (GDP)

_______ measures the overall size and health of an economy.

Gross domestic product (GDP)

Which of the following countries is a member of the Central America Free Trade Agreement (CAFTA)?

Guatemala

Which of the following increases a nation's purchasing capability?

Increase in the proportion of middle-income households of the nation

Sociocultural

Increasing numbers of parents begin staying home so that they can homeschool their children.

_______ competition is a process in which products provide alternative solutions to the same market.

Indirect

Economic

Interest rates for home mortgages increase making it more difficult for some consumers to get loans.

Metro FM and Star are radio stations in direct competition with each other. The target audience for both radio stations is the same, with most of the stations' income coming from commercials. Which of the following strategies can Star use to differentiate its services from Metro FM?

It can offer content that is not available on Metro FM. Explanation: In this scenario, for Star to succeed, it should differentiate its services from substitutes in ways that add value to the customer's listening experience. It can do this by offering specific content that is not available on any substitute product.

What was the purpose of the Wheeler-Lea Act of 1938?

It made deceptive and misleading advertising illegal.

According to your text, if a marketer wanted to gauge a country's purchasing power, which of the following would provide the most reliable result?

Its income distribution

Changes to the tax incentive element as it pertains to charitable donations is part of which external factor affecting the marketing environment for nonprofit organizations?

Legal

Brazil

Marketing a new energy drink featuring Portuguese-speaking soccer players as endorsers.

India

Marketing chicken-based products since religious customs in many parts of this country forbid the eating of beef.

The World Trade Organization formed under the _______ Agreement.

Marrakech

_______ is a member of the North American Free Trade Agreement (NAFTA) along with the United States and Canada.

Mexico

Identify a member country of the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA).

Nicaragua

The higher percentage of U.S. exports to Canada and Mexico rather than to other individual countries can be attributed to the

North American Free Trade Agreement. Explanation: The North American Free Trade Agreement (NAFTA) established a free trade zone among the United States, Canada, and Mexico. Its goal was to eliminate barriers to trade and investment among the three countries.

Of the external marketing factors listed in your text, which one is most likely at play if legislation is passed that will ban the sale of a product to certain age groups?

Political

Because it receives a substantial portion of its funding from state legislatures, which of the following industries was hit particularly hard due to the recession that began in late 2007?

Public universities

_______ was implemented on January 1, 1994 and affected tariffs on exports between the United States, Canada, and Mexico.

The North American Free Trade Agreement (NAFTA)

Which of the following is also known as the Advertising Act?

The Wheeler-Lea Act (1938)

Technological

The ability to watch the television channels you pay for at home on your tablet computer.

What is the relationship between purchasing power and inflation?

Purchasing power decreases with rising inflation. Explanation: When the general price level rises, each unit of currency (e.g., each U.S. dollar) buys fewer goods and services. Consequently, inflation also reflects erosion in the purchasing power of money. Purchasing power is the amount of goods and services that can be purchased for a specific amount of money.

United States

Selling DVR technology because the majority of this country's residents have televisions with DVR capability.

Identify the correct statement about the nonprofit marketing environment.

Social media gives nonprofit organizations substantial advantages when it comes to conducting charity campaigns.

While shopping for a new computer, Jake uses an app on his cell phone to compare the price that various stores are charging for the computer he is interested in. What external factor affecting the marketing environment does this represent?

Technological

Demographic

The number of college graduates in the United States rises to an all-time high.

Which of the following is a goal of the North American Free Trade Agreement (NAFTA)?

To eliminate barriers to trade and investment among the participating countries

Marketers are particularly attracted to countries with a growing middle class.

True Explanation: A nation's purchasing capability tends to increase as the proportion of middle-income households increase.

The political climate in a democratized country can change the direction of government policy quickly and impact how marketers position their products.

True Explanation: This is True. For example, if public outrage on an issue (such as violent video games being marketed to teenagers) leads to legislation being passed that would ban the sale of products to certain age groups, marketers would have to adjust how to position those products in the marketplace.

Today, technology enables small businesses to reach customers across the globe.

True Explanation: Today, technological advancements in the area of web development, global shipping and use of the Internet, enables small businesses to reach customers across the globe.

Which of the following scenarios exemplifies the concept of indirect competition?

Two products provide alternate solutions to the same market

The _____ authorizes the Federal Trade Commission to restrict unfair or deceptive acts.

Wheeler-Lea Amendment (also called the Advertising Act) Explanation: The Wheeler-Lea Amendment authorizes the Federal Trade Commission to restrict unfair or deceptive acts. It broadened the Federal Trade Commission's powers to include protection of consumers from false advertising practices.

Which of the following economic situations would most likely have a negative effect on a nonprofit organization's ability to secure funding?

When a country is facing an economic recession

Which group of consumers now accounts for 85% of all consumer purchases in the United States?

Women

The _______ has 162 members representing more than 97 percent of the world's population, and over 20 observer nations, most of which are seeking membership.

World Trade Organization

Yvette heard on the news that the price of groceries is expected to rise by 10% this year. As such, the amount of groceries she can purchase for $25 will decrease by that same 10%. This is an example of _______.

a decrease in purchasing power

Vince feels that his paycheck doesn't go as far as it used to. He used to be able to save money each month, but now finds that after he pays for food, gas, and housing he barely has any money left. Vince is experiencing _______.

a reduction in his purchasing power

The generation of children born between 1946 and 1964 are collectively referred to as _______.

baby boomers

Which pair of products can be regarded as substitute products?

butter and margarine Explanation: Butter and margarine are substitute products. Substitute products are goods and services that perform very similar functions and can be used in place of one another.

If the economy of a country contracts and people lose jobs

consumer confidence decreases. Explanation: Consumers purchase more when consumer confidence is high because they feel more secure in their jobs. If the economy contracts and people lose jobs, consumer confidence decreases, leading to more saving and less spending.

A recession occurs when a nation's GDP

declines for two or more consecutive quarters. Explanation: A recession occurs when GDP declines for two or more consecutive quarters. The U.S. recession that began in December 2007 was characterized as such because GDP declined in both 2008 and 2009.

Each month when Jason receives his paycheck, he sees the total amount of money he earned less the amount that was taken out for paying taxes. This leftover amount of money is referred to as _______ income.

disposable or net

The act of monitoring developments outside of a firm's control with the goal of detecting and responding to threats and opportunities is referred to as _______.

environmental scanning

When Erin Brewer decided to explore launching a small business, she analyzed the external factors that would impact her company. Monitoring developments outside of a firm's control with the goal of detecting and responding to threats and opportunities is referred to as _______.

environmental scanning

Inflation is an increase in the _______.

general level of prices of products in an economy over a period of time

When the general price level rises, each unit of currency buys _______

goods and services.

What is the most common gauge of the overall expansion or contraction of an economy?

gross domestic product Explanation: Gross domestic product (GDP) measures the overall size and health of an economy. Overall GDP is the most common gauge of the overall expansion or contraction of an economy.

The competitive environment for nonprofit funding has _______ in recent years.

increased dramatically

Each of the following external environmental factors impact RedPin

increased menu options Explanation: Menu choices are a product choice internal to RedPin. Economic, legal, and demographic factors are all critical elements of RedPin's external marketing environment.

In many developed nations, including the United States, France, Germany, and China, consumer ethnocentrism is _______.

increasing

New laws and regulations are among the _______ factors impacting nonprofit organizations.

legal

RedPin develops marketing strategies based on all of the following demographic factors except

local unemployment rate Explanation: The local unemployment rate is an economic factor, while age, education, and gender are all demographic factors

Factors outside of a firm such as political, technological, or legal forces that affect the firm's ability to meet its marketing goals are all part of the _______.

marketing environment

Which of the following are not direct or indirect competition for RedPin?

municipal government Explanation: Virtually every type of bowling alley, restaurant, nightclub, or facility for hosting children's birthday parties represents either direct or indirect competition for RedPin. Municipal governments would not be competition for RedPin.

The six major external factors that influence the marketing environment of a firm are: economic, demographic, sociocultural, technological, legal and _______.

political

Indirect competition occurs when

products provide alternative solutions to the same market. Explanation: In addition to direct competition, companies also face indirect competition. Indirect competition occurs when products provide alternative solutions to the same market.

Marketers are attracted to countries with a growing middle class because a nation's

purchasing capability tends to increase as the proportion of middle-income households increases. Explanation: Marketers are particularly attracted to countries with a growing middle class, since a nation's purchasing capability tends to increase as the proportion of middle-income households increases. For example, income growth in developing nations in Asia and Latin America is likely to stimulate world trade as more of their residents move into the middle class.

A _______ occurs when overall gross domestic product (GDP) declines for two or more consecutive quarters.

recession

A country has a GDP of $23 million during the first quarter of 2019. During the next two quarters, it records a GDP of $21 million and $20.5 million, respectively. This trend can be classified as a(n)

recession. Explanation: This trend can be classified as a recession. A recession occurs when GDP declines for two or more consecutive quarters.

The recession led to political pressure to _______ federal, state and municipal budgets.

reduce

One goal of the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) is to _______.

reduce nontariff trade barriers

The European Union has created a single European market by _______.

reducing barriers to the free trade of goods and finances among member countries

As an external marketing factor, the term _______ factors refers to the combination of social and cultural factors that affect individual development.

sociocultural

Which strategy caters to the sociocultural factor of busier families in America?

the launch of online ticket-booking options Explanation: The launch of online ticket-booking options is an example of a strategy that caters to the sociocultural factor of busier families in America. Sociocultural factors refer to the combination of social and cultural factors that affect individual development. The new sociocultural reality of busier families has created opportunities for firms to offer new kinds of value.

One of the biggest sociocultural changes in the United States over the past half century has been _______.

the shift from a nation of primarily one-income families to one in which two-income families predominate

Because it can impact the success of the firm's marketing strategy, marketing professionals continually scan and analyze a firm's external environment in order to detect and respond to _______.

the threats and opportunities facing the firm

Typically, consumers purchase more when _______.

they are confident and feel more secure in their jobs

The marketing decisions of a firm are influenced by the fact that today, _______.

women take on the role of decision maker across a large, expanding variety of products