marketing test one Chapter Three

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

Meyers' Sporting Goods, a national chain, has been doing business with Soljur Sports, a manufacturer of skateboards, for several years. Recently, it came to the attention of Meyers' financial director that the average cost per Soljur Sports skateboard had substantially increased over that of the previous year. A corporate attorney was notified and began to look into the situation. The attorney found that Soljur Sports was selling a similar number of skateboards to a competitive chain for $10 less per skateboard. The attorney for Meyers' Sporting Goods immediately filed a complaint with the Federal Trade Commission. 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

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 agencies would most likely have jurisdiction over the problem with lead in the paint of children's toys?

Consumer Product Safety Commission

A new U.S. automobile company, Specialty Motors, was established in 2004. In 2008, a recession caused disposable income to decline, and the annual amount of dollars spent by consumers for automobiles dropped drastically. Specialty Motors faced the problem of trying to determine whether the economy would turn toward prosperity or toward depression. No matter what happened, Specialty Motors was also worried about an impending global steel shortage, which would make a big difference in its future marketing plans. The economy might recover from the recession, but the automobile makers might be forced to ask consumers to curtail consumption just when the hope of a better year was finally in sight. All in all, the future looked dismal for Specialty Motors. Total disposable income is at its lowest during which of the following?

Depression

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

Which of the following attributes of a Toyota Scion would be most appropriate to emphasize in television commercials during an economic recession?

Durability

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.

Which of the following agencies regulates marketing activities the most?

Federal Trade Commission

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

__________ competitors provide very different products that satisfy the same basic customer need.

Generic

In the near future, what subculture will become the second largest group in the United States?

Hispanics

Meyers' Sporting Goods, a national chain, has been doing business with Soljur Sports, a manufacturer of skateboards, for several years. Recently, it came to the attention of Meyers' financial director that the average cost per Soljur Sports skateboard had substantially increased over that of the previous year. A corporate attorney was notified and began to look into the situation. The attorney found that Soljur Sports was selling a similar number of skateboards to a competitive chain for $10 less per skateboard. The attorney for Meyers' Sporting Goods immediately filed a complaint with the Federal Trade Commission. 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.

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

A new U.S. automobile company, Specialty Motors, was established in 2004. In 2008, a recession caused disposable income to decline, and the annual amount of dollars spent by consumers for automobiles dropped drastically. Specialty Motors faced the problem of trying to determine whether the economy would turn toward prosperity or toward depression. No matter what happened, Specialty Motors was also worried about an impending global steel shortage, which would make a big difference in its future marketing plans. The economy might recover from the recession, but the automobile makers might be forced to ask consumers to curtail consumption just when the hope of a better year was finally in sight. All in all, the future looked dismal for Specialty Motors. In what type of competitive structure is Specialty Motors operating?

Monopolistic competition

What national self-regulatory organization screens ads?

National Advertising Review Board

What type of competitive structure exists when just a few sellers control a large portion of the supply of a product?

Oligopoly

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

Which of the following is not a reason that marketers try to maintain good relations with elected political officials?

Political officials can accept direct corporate campaign contributions.

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

Meyers' Sporting Goods, a national chain, has been doing business with Soljur Sports, a manufacturer of skateboards, for several years. Recently, it came to the attention of Meyers' financial director that the average cost per Soljur Sports skateboard had substantially increased over that of the previous year. A corporate attorney was notified and began to look into the situation. The attorney found that Soljur Sports was selling a similar number of skateboards to a competitive chain for $10 less per skateboard. The attorney for Meyers' Sporting Goods immediately filed a complaint with the Federal Trade Commission. 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

Price discrimination is prohibited by the ___________ Act

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.

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.

Which of the following terms refers to consumers' propensity to buy?

Willingness to spend

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

a monopoly

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.

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.

A new U.S. automobile company, Specialty Motors, was established in 2004. In 2008, a recession caused disposable income to decline, and the annual amount of dollars spent by consumers for automobiles dropped drastically. Specialty Motors faced the problem of trying to determine whether the economy would turn toward prosperity or toward depression. No matter what happened, Specialty Motors was also worried about an impending global steel shortage, which would make a big difference in its future marketing plans. The economy might recover from the recession, but the automobile makers might be forced to ask consumers to curtail consumption just when the hope of a better year was finally in sight. All in all, the future looked dismal for Specialty Motors. Although all types of competition will affect Specialty Motors' marketing performance, it will be most concerned about _________ competitors.

brand

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

___________ competitors are the most significant to marketers because buyers see the different products of these firms as direct substitutes for each other.

brand

Environmental scanning means ___________ information about the marketing environment, whereas environmental analysis is concerned with ___________ this information.

collecting; assessing

When marketers define their target market, they establish a set of

competitors

What is the most important factor in distinguishing disposable income from income?

consumer spending

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.

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.

Organizations that provide smoke-free environments or low-fat products 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.

A new U.S. automobile company, Specialty Motors, was established in 2004. In 2008, a recession caused disposable income to decline, and the annual amount of dollars spent by consumers for automobiles dropped drastically. Specialty Motors faced the problem of trying to determine whether the economy would turn toward prosperity or toward depression. No matter what happened, Specialty Motors was also worried about an impending global steel shortage, which would make a big difference in its future marketing plans. The economy might recover from the recession, but the automobile makers might be forced to ask consumers to curtail consumption just when the hope of a better year was finally in sight. All in all, the future looked dismal for Specialty Motors. The income a consumer would use to purchase a Specialty Motors automobile is considered ___________ income.

discretionary

Which category of income are marketers most interested in?

disposable income

Consumerism is a

diverse group of individuals and organizations attempting to protect the rights of consumers.

The rapid adoption of the use of the Internet has resulted in rapid changes such as the increase of distance learning, changing social networks, and concerns such as copyright and privacy issues that the government is focusing on. These effects of technology are collectively known as

dynamics

Nabisco learned that health-conscious consumers preferred lower fat snack and lowercarbohydrate 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

Collecting information from secondary sources such as business, government, trade, and general-interest publications plays an important role in

environmental scanning

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.

The 1990 Nutritional Labeling and Education Act directly prohibits

exaggerated health claims on food packages.

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

The amount of money received through wages, rents, investments, pensions, and subsidies is called

income

A person's buying power is a function of

income, wealth and credit

When using credit to make purchases, consumers are

increasing current buying power at the expense of future buying power.

Meyers' Sporting Goods, a national chain, has been doing business with Soljur Sports, a manufacturer of skateboards, for several years. Recently, it came to the attention of Meyers' financial director that the average cost per Soljur Sports skateboard had substantially increased over that of the previous year. A corporate attorney was notified and began to look into the situation. The attorney found that Soljur Sports was selling a similar number of skateboards to a competitive chain for $10 less per skateboard. The attorney for Meyers' Sporting Goods immediately filed a complaint with the Federal Trade Commission. 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.

Consumer protection legislation deals with all of the following legal concerns except

monopolistic practices.

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 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 four major competitive structures are

oligopolies, monopolies, monopolistic competition, and pure competition

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

Most marketers operate in a competitive environment of either

oligopoly or monopolistic competition.

One way for corporations to attempt to influence the political environment is through

organizing political action committees.

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

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

___________ 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

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 two least common competitive structures at the opposite ends of the continuum are

pure competition and monopolies.

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

Total buying power declines during periods of economic

recession

Consumers begin to become more price and value conscious during periods of

recessions

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

Newsweek enhances its visibility to readers by making its magazine available on the Internet. Newsweek is capitalizing on which environmental force?

technological

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

Companies that compete for the same limited financial resources of the same customers are known as _________ competitors.

total budget

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.

A new U.S. automobile company, Specialty Motors, was established in 2004. In 2008, a recession caused disposable income to decline, and the annual amount of dollars spent by consumers for automobiles dropped drastically. Specialty Motors faced the problem of trying to determine whether the economy would turn toward prosperity or toward depression. No matter what happened, Specialty Motors was also worried about an impending global steel shortage, which would make a big difference in its future marketing plans. The economy might recover from the recession, but the automobile makers might be forced to ask consumers to curtail consumption just when the hope of a better year was finally in sight. All in all, the future looked dismal for Specialty Motors. 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

The accumulation of past income, natural resources, and financial resources is known as

wealth

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