Chapter 3: Marketing

Your career advisor is strongly encouraging you to seek a job in the health care sector. He or she explains that demand for health care services is almost certain to increase because of factors in the social-cultural environment. Which of the following factors does he or she cite? a. Consumers are getting older. b. Health care technology is improving. c. Unemployment is decreasing. d. Laws are more favorable to health care institutions.

A

The legal and regulatory forces in the marketing environment consist primarily of laws that are enforced by a variety of agencies operating at the federal, state, and local levels of government. Which of the following laws and agencies is (are) incorrectly linked to an area of regulatory responsibility? a. The CPSA sets standards for business-to-business products. b. The EPA is responsible for regulating the impact of business activities on natural resources. c. The FDA prohibits adulteration of food, drugs, and additives. d. The FTC is responsible for regulating the fairness and honesty of business practices

A, C

Marketers must continually acquire information about trends, events, and societal dynamics occurring in the marketing environment outside of the firm in order to identify and interpret potential positive and negative forces that may impact the firm's marketing strategies. The following statements provide examples of trends related to environmental forces. Which of these examples is correct? a. Greater concern for privacy and personal information collection is related to social forces. b. Advances in biotechnology, cosmetic surgery, and cancer drugs are related to technological forces. c. China's emergence as a world leader in manufacturing is related to demographic forces. d. Decline in smoking and tobacco use throughout the world is related to economic forces. e. China's emergence as a world leader in manufacturing is related to social forces

B

Pom Wonderful advertised that drinking their pomegranate juice daily could prevent heart disease and other medical conditions. What regulatory force would be responsible for stopping Pom Wonderful's false advertising claims? a. The Better Business Bureau (BBB), a self-regulatory group b. The Federal Trade Commission (FTC), a government regulatory group c. The National Advertising Division (NAD), a government regulatory group d. The Consumer Product Safety Commission, a self-regulatory group

B

You own an expensive restaurant and have a thriving business until the economic recession hits. Sales immediately plummet as your diners disappear. Some friends argue that a big advertising campaign focused on the quality of your food would bring the customers back, but you don't agree. Choose the statement(s) you'd use to accurately explain your point of view. a. Disparities between the rich and poor grow during recessions. b. During a recession, consumers are more likely to respond to discount deals than to ads touting the quality of a purchase that isn't a necessity. c. Consumers are eager to spend during a recession to help stimulate the economy. d. During a recession, consumers limit expenditures on items that aren't necessary, like restaurant meals.

B,D

You just got hired by the Federal Trade Commission, and you're the envy of all your friends. You feel good when you overhear your roommate describe your new job to another student. However, in his enthusiasm, he made a couple of mistakes. Which of the following points about the FTC did your roommate get wrong? a. The FTC has more power over marketing activities than any other federal agency. b. The FTC sets safety standards for consumer products. c. The FTC goes after false and deceptive advertisers. d. The FTC operates at the state level as well as the federal level. e. Because of its enormous power, the FTC is known informally as the Federal Power Commission.

B,D,E

If a clothing manufacturer knowingly outsourced production of its products to foreign factories with poor working conditions, it would: a. not be economically responsible. b. be philanthropically responsible. c. not be ethically responsible. d. be ethically responsible.

C

Venmo is a mobile application that enables people to send and receive money for free as long as they have a bank account, supported debit card, or a Venmo balance to fund payments. Venmo also allows the use of credit cards for a fee. To ensure security, the company uses bank-grade security systems and data encryption to prevent unauthorized transactions or access to personal information. Venmo operates as a mobile wallet, and though it provides services comparable to Western Union and PayPal, it can be managed through smartphones, thus appealing to a wide audience of retailers and others who depend on efficient money exchange. In an analysis of Venmo for your marketing class, you argue that it exemplifies how technological change creates marketing opportunities. What is the core of your argument? a. Technology enables companies to respond more effectively to new regulations. b. Technology always makes business less complex. c. Technological change often enables companies to greatly improve customer service. d. Technology has reduced competition in the marketplace for most industries. e. Like Venmo, the best technological advances are uniquely suited to the existing economic environment.

C

You work for an automobile manufacturing company whose sales have been low as a result of the economic downturn. Company executives are strategizing as to how to stimulate sales. Which of the following steps should they take to improve business? a. Increase prices and offer fewer promotions. b. Decrease prices and offer fewer promotions. c. Decrease prices and offer more promotions. d. Increase prices and offer more promotions. e. Decrease prices and eliminate promotions.

C

In 2003, Wal-Mart began using RFID chips to help monitor inventory. The company also required its top 100 suppliers to include RFID chips on pallets being delivered to Wal-Mart stores. Wal-Mart hoped that the addition of this technology could help them create a more efficient supply chain and better track inventory levels of everything from tools to toys to food items. A benefit of RFID chips is that they don't require line of sight to be "read." The technology allows for entire pallets of inventory to be scanned at one time, replacing a time-consuming task of scanning products individually or entering products into inventory systems manually. Some disadvantages of RFID chips are that they are easily removed from items and metal and liquids can interfere with scanning.If Wal-Mart required suppliers to attach RFID chips to individual items, instead of at the pallet level, then this technology would allow Wal-Mart to: a. prevent thefts by employees and customers. b. scan entire truckloads of inventory by having trucks pass through a giant scanner at the loading dock. c. require additional employees to scan products in order to update inventory. d. implement automatic reordering of inventory when it reaches a specified level.

D

Marketers must continually assess changes in the competition and make changes in their own competitive strategy because the competitive environment often determines success or failure of a product. Which of the steps below can a marketer for a large retail discount store (e.g., Target, Walmart, Sears) implement as part of the store's competitive strategy as children are headed back to school? Choose the step that you think will be most profitable. a. Move the annual home goods White Sale from January to September. b. Restrict the use of coupons and coupon codes to online shopping so that customers don't clog in-store checkout lines. c. Offer a discount to parents who bring in their child's first-quarter report card. d. Run Early Bird Special discounts on end-of-summer weekends for local school supply lists, toiletries, and clothing. e. Run a Buy One, Get One Half-Price end-of-summer sandals and swimsuits campaign on local television stations.

D

Marketing ethics and social responsibility are important to the success of marketing strategies. Marketing ethics defines the principles and standards that define acceptable conduct in marketing. Which of the following decisions is not related to marketing ethics? a. The firm's sales manager tends to overlook a salesperson's questionable sales tactics because her sales results are high. b. A decision has to be made to begin labeling your company's potato chips as natural, even though they are no healthier than the average potato chip. c. A decision needs to be made to determine how much a salesperson can spend on entertainment for customers. d. The Director of Marketing wants to withdraw a product because it is no longer profitable or competitive. e. The Director of Marketing wants to put the word organic on the new packaging label because it is a buzzword, but the product is not organic.

D

The pyramid of corporate social responsibility states that there are four dimensions of social responsibility: economic, legal, ethical, and philanthropic. The socially responsible marketer accepts different responsibilities for each of these dimensions in terms of how she carries out her marketing activities. You have been asked to make a presentation to management that will highlight your company's ethical responsibilities. Which of the following topics do you plan to discuss? a. It is important to provide assistance to private and public educational institutions. b. It is important to perform in a manner consistent with maximizing earnings per share. c. It is important to perform in a manner consistent with expectations of government and law. d. It is important to recognize that corporate integrity and behavior go beyond mere compliance with laws and regulations. e. It is important to maintain a high level of operating efficiency.

D

Your company just attended a symposium on sustainability; and as company president, you are interested in raising the level of social responsibility in all that the company does, whether manufacturing goods, marketing, or offering services that improve the lives of individuals in the communities you serve. Which of the following steps can your company take to ensure that its practices are socially responsible? a. Sell your company to a huge multinational conglomerate and allow it to outsource jobs that were previously done by locals. b. Continue to package products and ship customer orders in plastic because it is a cheaper option. c. Invest in companies overseas that employ child laborers in order to cut expenses associated with manufacturing. d. Eliminate the use of paper-based circulars and rely solely on Web-based and social marketing strategies to promote products. e. Test new products on rabbits, guinea pigs, and mice rather than conducting long-term trials on human beings or chimpanzees

D

Marketers must pay attention to changes in sociocultural forces in order to send effective marketing messages to their target market. Sociocultural forces occur incrementally, making it easy to miss the shift until it is fully integrated. These can include a change in population characteristics such as age, gender, ethnicity, income, education, and marital and parental status. The degree to which these changes take place determines the amount of diversity present in a particular market, which, in turn results in different consumer buying behaviors. Cultural values affect the way people think about and make purchases, and largely result from one's family. Consumerism is a movement to protect consumers' rights, whose values can be heard from individuals, organizations, or groups. Which of the following statements provides a correct example of consumerism? a. Consumers have shifted back to cooking meals together as a form of socializing, but still crave convenience, so some companies are offering direct mail meal prep boxes. b. As more people migrate to the United States, some marketers are shifting their product offerings and marketing messages to appeal to the values of new consumers. c. A company decides to make a sponsorship deal with a popular older celebrity in order to appeal to the aging characteristic of its consumers. d. A company decides to offer an all-natural, locally sourced, organic version of their most popular product offerings due to a change in consumer demand. e. A snack and beverage company is reacting to consumer complaints about high sugar content in their products.

E

You are the head of the corporate acquisitions team at a major biotech company in Atlanta, Georgia. Your team has identified a couple of attractive acquisition targets that you would like to recommend to the Board of Directors for consideration. However, before you make a recommendation, you want to make sure that none of the acquisitions will raise any regulatory issues. In order to evaluate all potential regulatory issues, which one of the following analytical actions should you have your team complete prior to making any recommendations? a. A thorough analysis of the provisions of the Wheeler-Lea Act b. A thorough analysis of the provisions of the Consumer Product Safety Act c. A thorough analysis of the provisions of the Robinson-Patman Act d. A thorough analysis of the provisions of the Telecommunications Act e. A thorough analysis of the provisions of the Celler-Kefauver Act, the Clayton Act, and the Sherman Antitrust Act

E

Fill in the blanks with the word(s) from the drop-down list that would best complete the passages: Vendors who sell essentially identical products or services are known as a firm's ____. Businesses compete indirectly when they produce goods and services that are ____ for those of another business. Dick's Donut Shop faced ____competition when a Dunkin Donuts franchise opened across the street. Jan was planning to take her kids to Disney World, but decided instead to book a family-oriented cruise on Carnival Cruise Lines. The competition between Disney World and Carnival Cruise Lines is ____ .

direct competition, substitutable, direct, indirect

Fill in the blanks with the word(s) from the drop-down list that would best complete the passages: Marketing ____ refers to a marketer's standards of conduct and ____. ____is probably the most regulated aspect of marketing strategy. The question of channel control may pose a serious _____ issue.

ethics, values, Pricing, ethical

The marketer cares very much about what people think, how they feel, what they believe, and how they live. Without this knowledge, marketing strategies will be destined for failure. The marketer must stay tuned in to the sociocultural forces in the marketing environment because these are the forces that will assist the marketer in understanding what people think, how they feel, what they believe, and how they live. The following passages describe some aspects of sociocultural forces. Fill in the blanks with the word(s) that best complete(s) each passage. Consumerism exerts legal, ____ , and economic pressures on businesses. Changes in a population's _____characteristics, like age and ethnicity, help define individual behavior. A major marketer of rice offers a range of varieties to satisfy the distinctive tastes of Chinese, Japanese, and Vietnamese consumers. By catering to its different Asian buyers, the marketer is demonstrating sensitivity to ____ diversity.

moral, demographic, cultural

The state of the macroeconomic environment has a significant impact on consumers' willingness and ability to purchase goods and services offered by companies. For example, when the macroeconomic environment is contracting (i.e., in recession), consumers may have difficulty finding jobs and earning money to fund their purchases. On the other hand, when the macroeconomic environment is expanding (i.e., GDP is growing), consumers are typically more confident about their personal finances and more willing to spend on goods and services. Fill in the blanks with the word from the drop-down list that would best complete the passages: To qualify as a recession, a period of economic contraction must last at least ____ months. When the economy slows, marketers are more likely to succeed with products that are ____rather than _____. People might think that _____is good for consumers because prices fall. However, this condition ultimately hurts the economy by causing ____ . During a recession, consumers' buying power normally ____ .

six, valued-priced, premium-priced, deflation, layoffs, decreases