Marketing Ch.3
T/F: Stringent product regulations have helped to lower research costs and decrease time between new product ideas and their introduction to the market.
False
T/F: The Consumer Product Safety Commission has created complex regulations for testing new drugs before they are sold to the public.
False
T/F: The Office Depot Foundation serves its financial publics through a variety of programs.
False
T/F: The least significant demographic trend in the United States is the changing age structure of the population.
False
T/F: The most important actors in a company's microenvironment are its competitors.
False
Monfax Corporation insures manufacturers, distributors, and consumers against the loss or damage of goods during transportation after a purchase or sale. In this case, Monfax is an example of a ________.
Financial intermediary
Which generational group is characterized as the most educated and the least materialistic?
Generation X
Which generational group consists of the kid, teen, and tween markets?
Generation Z
Which generational group is most comfortable using digital technologies?
Generation Z
Volunteers belong to a company's ________ publics.
Internal
The ________ environment is perhaps the most dramatic force shaping the destiny of individuals and offering exciting opportunities for marketers.
Technological
The migration trend towards micropolitan and suburban areas has caused a shift in where people work. This has resulted in a rapid increase in the number of people who ________.
Telecommute
Which of the following is an example of a media public?
Television station
Which of the following is most likely a true statement about generational groups in the United States?
The Generation Xers are the most educated generation to date
Discuss how an increased educational level in the United States has affected the American household and how marketers have responded to these changes.
The U.S. population is becoming better educated. The rising number of educated professionals will affect not just what people buy but also how they buy. Job growth is now strongest for professional workers and weakest for manufacturing workers. The number of working women has also increased greatly, growing from under 40 percent of the U.S. workforce in the late 1950s to 69 percent today. American women now make up 40 percent of primary family breadwinners. Among households made up of married couples with children, 60 percent are dual-income households; only the husband works in 28.5%. Meanwhile, more men are staying home with their children and managing the household while their wives go to work. The significant number of women in the workforce has spawned the child day-care business and increased the consumption of career-oriented women's clothing, convenience foods, financial services, and time-saving services.
Discuss the social and ethical concerns that the boom in digital technology has created for marketers.
The boom in Internet marketing has created a new set of social and ethical issues. Critics worry most about online privacy issues. There has been an explosion in the amount of personal digital data available. Users, themselves, supply some of it. They voluntarily place highly private information on social networking sites, such as Facebook or LinkedIn, or on genealogy sites that are easily searched by anyone with a computer or a smartphone. However, much of the information is systematically developed by businesses seeking to learn more about their customers, often without consumers realizing that they are under the microscope. Legitimate businesses track consumers' Internet browsing and buying behavior and collect, analyze, and share digital data from every move consumers make at their online sites. Critics worry that these companies may now know too much and might use digital data to take unfair advantage of consumers. Although most companies fully disclose their Internet privacy policies and most try to use data to benefit their customers, abuses do occur.
Ursa Martin, a book publisher, has decided to work with Hope in Children, a charity foundation that helps feed and educate children in poor countries. Ursa Martin has decided that a percentage of revenue from every book it sells will go to the charity. The books are marketed by conveying this message to customers. Which of the following marketing techniques describes Ursa Martin's association with Hope in Children?
cause-related marketing
Companies have responded to consumers' back-to-basics sensibility in their lifestyle and spending patterns through ________.
Value marketing
Which of the following is most likely a true statement about diversity in the United States?
Various ethnic groups mix together but also retain their cultural differences.
Which of the following illustrates the changing composition of the American family?
an increase in the number of non-family households
Which of the following is most likely categorized as a business market?
firms that buy goods and services for further processing
Reseller markets consist of ________.
firms that buy goods and services to sell at a profit
Which of the following has resulted from the increased educational levels of the U.S. population?
greater job growth for professional workers
Which of the following represents a change in the technological environment of a marketing firm?
increased use of RFID systems to track products
Large companies like P&G, Walmart, and Allstate have designed specialty products and promotions to target a previously untapped market that has grown substantially in recent years. They are appealing to ________.
the LGBT community
Which of the following are examples of internal publics of a company?
the managers, board of directors, and workers of the company
Which of the following generational groups account for a third of the U.S. population but half of all consumer spending?
Baby boomer
Which of the following is an example of a local public?
A community organization that addresses welfare issues in its neighborhood
Which of the following is part of the microenvironment of a company's marketing environment?
A just-in-time inventory system used by the company when making purchase decisions
How do the different types of publics influence a company's marketing environment?
A public is any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives. Financial publics: This group influences the company's ability to obtain funds. Banks, investment analysts, and stockholders are the major financial publics. Media publics: This group carries news, features, editorial opinions, and other content. It includes newspapers, magazines, television stations, and blogs and other social media. Government publics: Management must take government developments into account. Marketers must often consult the company's lawyers on issues of product safety, truth in advertising, and other matters. Citizen-action publics: A company's marketing decisions may be questioned by consumer organizations, environmental groups, minority groups, and others. Its public relations department can help it stay in touch with consumer and citizen groups. Local publics: This group includes neighborhood residents and community organizations. Large companies usually create departments and programs that deal with local community issues and provide community support. General public: A company needs to be concerned about the general public's attitude toward its products and activities. The public's image of the company affects its buying behavior. Internal publics: This group includes workers, managers, volunteers, and the board of directors.
Diversity goes beyond ethnic heritage. Discuss the factors that have influenced the emergence of the lesbian, gay, bisexual, or transgender (LGBT) community and how marketers have responded. Provide examples to illustrate your response.
As a result of TV shows such as Modern Family, movies like Brokeback Mountain and The Perks of Being a Wallflower, and openly gay celebrities and public figures, the LGBT community has increasingly emerged in the public eye. According to one estimate, the 6 to 7 percent of U.S. adults who identify themselves as lesbian, gay, bisexual, or transgender (LGBT) have buying power of more than $830 billion. Numerous media like Viacom's MTV Networks now provide companies with access to this market. Brands in a wide range of industries are now targeting the LGBT community with gay-specific ads and marketing efforts — from Amazon, American Airlines, Allstate, and Apple to luxury jewelry retailer Tiffany. For example, Allstate recently ran an "Everyone deserves to be in good hands" campaign with ads featuring same-sex couples and the hashtag #OutHoldingHands. Brands ranging from Axe to Tiffany have sponsored similar ads. American Airlines has a dedicated LGBT "Rainbow Team," sponsors gay and lesbian community events, and offers a special Web site (www.aa.com/rainbow), Facebook pages, and Twitter feed featuring LGBT-oriented travel deals, information, and discussion. The airline's focus on gay consumers has earned it double-digit revenue growth from the LGBT community each year for more than a decade.
To which of the following generational groups do zoomers belong?
Baby boomer
Secure is a financial services and insurance company. The company's most profitable division is one that sells the Secure Future Plan. The Secure Future Plan targets customers who are entering retirement and want long-term savings so they can remain financially independent in the later years of their life. The marketing team at Secure has most likely targeted the plan at ________.
Baby boomers
Which of the following is most likely true about business legislation?
Business laws that are enforced by government agencies have a major impact on a company's marketing performance.
Dextora Technologies manufactures microprocessors and caters exclusively to private manufacturers that produce high-end computers. Which type of market does Dextora directly target?
Business market
P&G "Tide Loads of Hope" program provides mobile laundromats and loads of clean laundry to families in disaster-stricken areas. This is an example of ________ marketing.
Cause-related
A consumer advocacy group challenges a firm's decision to build a new warehouse in a small community. The advocacy group is an example of a ________ public.
Citizen-action
Kelstone Developers is planning to build a new shopping mall that would require the partial acquisition of a nearby public park. Walking Green, an environmental group, challenges the plan citing environmental destruction. In response to the demands of Walking Green, Kelstone Developers promises to build a huge park-like walkway around the mall. Walking Green is an example of a(n) ________ in this scenario.
Citizen-action public
What is environmental sustainability? How does it affect the marketing environment? Provide examples to illustrate your response.
Concern for the natural environment has spawned the so-called green movement. Today, enlightened companies go beyond what government regulations dictate. They are developing strategies and practices that support environmental sustainability — an effort to create a world economy that the planet can support indefinitely. Environmental sustainability means meeting present needs without compromising the ability of future generations to meet their needs. Many companies are responding to consumer demands with more environmentally responsible products. Others are developing recyclable or biodegradable packaging, recycled materials and components, better pollution controls, and more energy-efficient operations. For example, Timberland's mission is about more than just making rugged, high-quality boots, shoes, clothes, and other outdoor gear. The brand is about doing everything it can to reduce the environmental footprint of its products and processes. More and more, these companies are recognizing the link between a healthy ecology and a healthy economy. They are learning that environmentally responsible actions also mean good business.
________ markets consist of individuals and households that buy goods and services for personal use.
Consumer
Which of the following is most likely true about people's beliefs and values?
Core beliefs and values have a high degree of persistence.
According to the text, ________ are the most important actors in a company's microenvironment.
Customers
T/F: People's orientation to their society does not impact their consumption patterns and attitudes toward the marketplace.
False
________ is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics.
Demography
Changes in variables, such as income, cost of living, interest rates, and savings and borrowing patterns most likely reflect changes in the ________ environment of a company.
Economic
The citizen-action publics in a company's marketing environment include ________.
Environmental groups
T/F: A customer buys a can of Pepsi from a Walmart store. In this scenario, Walmart is a supplier in Pepsi's value delivery network.
False
T/F: Cause-related marketing techniques are typically unprofitable for businesses, which is why it is a rarely used form of corporate giving.
False
T/F: Generation X is the least educated group to date.
False
T/F: In the context of income distribution, the middle class in the United States has grown in size over the past several decades.
False
T/F: Marketing intermediaries supply resources needed by a company to produce its goods and services.
False
The town of Genter recently witnessed a devastating hurricane that crippled the town's infrastructure. Q-Mart, a retail chain that plans to open a new retail store in Genter, organizes a program to help the people of Genter. The program consists of providing free meals to those who lost their dwellings in the hurricane. What section of the marketing microenvironment is Q-Mart most likely trying to reach?
Local publics
Demographic, economic, natural, technological, political, and cultural forces form the ________ of an organization.
Macroenvironment
Draw a comparison between the reactive and proactive approaches a company can take toward a changing marketing environment.
Many companies view the marketing environment as an uncontrollable element to which they must react and adapt. They passively accept the marketing environment and do not try to change it. They analyze environmental forces and design strategies that will help the company avoid the threats and take advantage of the opportunities the environment provides. This is a reactive approach. Other companies take a proactive stance toward the marketing environment. Instead of letting the environment define their strategy, they craft a strategy that defines the environment. Rather than assuming that strategic options are bounded by the current environment, these firms develop strategies to change the environment. Proactive firms take aggressive actions to affect the publics and forces in their marketing environment. Such companies hire lobbyists to influence legislation affecting their industries and stage media events to gain favorable press coverage. They run advertorials (ads expressing editorial points of view) and blogs to shape public opinion. They press lawsuits and file complaints with regulators to keep competitors in line, and they form contractual agreements to better control their distribution channels.
Which of the following is most likely a true statement about people's views about organizations?
Many people view work at an organization as a required chore.
How do companies use marketing techniques to respond to the changing diversity in the U.S. population? Provide examples to illustrate your response
Marketers now face increasingly diverse markets, both at home and abroad, as their operations become more international in scope. The U.S. population is about 62.2 percent non-Hispanic white, with Hispanics at 17.4 percent and African Americans at 13.2 percent. The U.S. Asian American population now totals more than 5.4 percent of the total U.S. population, with the remaining groups being Native Hawaiian, Pacific Islander, American Indian, Eskimo, or Aleut. Moreover, one in eight people living in the United States — over 13 percent of the population — was born in another country. The nation's ethnic populations are expected to explode in coming decades. By 2060, Hispanics will be about 28 percent of the population, African Americans will be about 14 percent, and Asian Americans will increase to 9 percent. Most large companies, from P&G, Walmart, Allstate, and Wells Fargo to McDonald's and Southwest Airlines, now target specially designed products, ads, and promotions to one or more of these groups. For example, Southwest Airlines' outreach to Asian Americans includes being the title sponsor for the Chinese New Year Festival and Parade in San Francisco, the biggest nighttime parade in the United States and the second biggest in North America after the Macy's Thanksgiving Day parade.
Describe the major trends in the natural environment that marketers need to be aware of.
Marketers should be aware of several trends in the natural environment. The first involves growing shortages of raw materials. Air and water may seem to be infinite resources, but some groups see long-run dangers. Air pollution chokes many of the world's large cities, and water shortages are already a big problem in some parts of the United States and the world. Renewable resources, such as forests and food, also have to be used wisely. Nonrenewable resources, such as oil, coal, and various minerals, pose a serious problem. Firms making products that require these scarce resources face large cost increases, even if the materials remain available. A second environmental trend is increased pollution. Industry will almost always damage the quality of the natural environment. Consider the disposal of chemical and nuclear wastes; the dangerous mercury levels in the ocean; the quantity of chemical pollutants in the soil and food supply; and the littering of the environment with non-biodegradable bottles, plastics, and other packaging materials. A third trend is increased government intervention in natural resource management. The governments of different countries vary in their concern and efforts to promote a clean environment. The general hope is that companies around the world will accept more social responsibility and that less expensive devices can be found to control and reduce pollution.
Discuss how the political environment affects the marketing environment.
Marketing decisions are strongly affected by developments in the political environment. The political environment consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society. Governments develop public policy to guide commerce — sets of laws and regulations that limit business for the good of society as a whole. Almost every marketing activity is subject to a wide range of laws and regulations. Well-conceived regulation can encourage competition and ensure fair markets for goods and services. In the United States, there are many laws created at the national, state, and local levels, and these regulations often overlap. Moreover, regulations are constantly changing; what was allowed last year may now be prohibited, and what was prohibited may now be allowed. Marketers must work hard to keep up with changes in regulations and their interpretations.
Markwin Electronics is a company that only sells products online. Orders are taken through an interactive Web site, and goods are shipped out through a small warehouse the company owns. Markwin employees also handle the shipment of goods to desired destinations. How could marketing intermediaries help Markwin expand its business?
Marketing intermediaries help the company promote, sell, and distribute its products to final buyers. Marketing intermediaries already have channels ready that are directly connected to customers. Thus by utilizing intermediaries, Markwin can tap into a much bigger source of sales. Intermediaries include resellers, physical distribution firms, marketing services agencies, and financial intermediaries. These include wholesalers and retailers who buy and resell merchandise. Physical distribution firms can help Markwin stock and move goods from their points of origin to their destinations. Marketing services agencies are the marketing research firms, advertising agencies, media firms, and marketing consulting firms that help the company target and promote its products to the right markets. Financial intermediaries include banks, credit companies, insurance companies, and other businesses that can help finance transactions for Markwin, or insure against the risks associated with the buying and selling of goods. Marketing intermediaries can form an important component of the company's overall value delivery network. Markwin's marketers must recognize the importance of working with their intermediaries as partners rather than simply as channels through which they sell their products.
How are American businesses utilizing new technologies to improve their inventory management? Provide examples to illustrate your response.
New technologies can offer exciting opportunities for marketers. The technological advancement of radio-frequency identification (RFID) transmitters is rapidly changing the way companies control their inventory. RFIDs can be embedded in the products you buy. Many firms are already using RFID technology to track products and customers at various points in the distribution channel. For example, Walmart has strongly encouraged suppliers shipping products to its distribution centers to apply RFID tags to their pallets. And retailers such as American Apparel, Macy's, and Bloomingdales are now installing item-level RFID systems in their stores. Fashion and accessories maker Burberry even uses chips imbedded in items and linked to smartphones to provide personalized, interactive experiences for customers in its stores and at runway shows.
T/F: The rapid increase in the number of people who telecommute has created a booming small office/home office market in the United States.
True
What are marketing intermediaries? What are the different types of marketing intermediaries?
Marketing intermediaries help the company promote, sell, and distribute its products to final buyers. They include resellers, physical distribution firms, marketing services agencies, and financial intermediaries. Resellers are distribution channel firms that help the company find customers or make sales to them. These include wholesalers and retailers that buy and resell merchandise. Physical distribution firms help the company stock and move goods from their points of origin to their destinations. Marketing services agencies are the marketing research firms, advertising agencies, media firms, and marketing consulting firms that help the firm target and promote its products to the right markets. Financial intermediaries include banks, credit companies, insurance companies, and other businesses that help finance transactions or insure against the risks associated with the buying and selling of goods. Marketing intermediaries form an important component of the company's overall value delivery network. In its quest to create satisfying customer relationships, the company must do more than just optimize its own performance. It must partner effectively with marketing intermediaries to optimize the performance of the entire system.
Which of the following has the primary function of helping a company target and promote its products to the right markets?
Marketing services agencies
Members of which generational group are referred to as echo boomers?
Millennial
Which of the following is the most financially strapped generation in the post-recession era?
Millennial
Technology is a way of life for ________, the largest generational group.
Millennials
Fargo Inc. is a carbonated beverage manufacturer that has many manufacturing plants around the world. It is planning to shift from using thermal power to wind power for its manufacturing plants in the Netherlands to decrease dependency on nonrenewable sources of energy. This scenario depicts Fargo's concern for its ________ environment.
Natural
Discuss with an example how marketers have adapted to people's changing views toward nature.
People vary in their attitudes toward the natural world. Recently, however, people have recognized that nature is finite and fragile; it can be destroyed or spoiled by human activities. This renewed love of things natural has created a 41-million-person "lifestyles of health and sustainability" (LOHAS) market, consumers who seek out everything from natural, organic, and nutritional products to fuel-efficient cars and alternative medicine. For example, Tom's of Maine caters to such consumers with sustainable, all-natural personal care products — toothpaste, deodorant, mouthwash, and soap — made with no artificial colors, flavors, fragrances, or preservatives. The products are also "cruelty-free" (no animal testing or animal ingredients). Tom's makes sustainable practices a priority in every aspect of its business and strives to maximize the recycled content and recyclability of its packaging. Finally, Tom's donates 10 percent of its pretax profits to charitable organizations.
In a marketer's macroenvironment, the ________ environment consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society.
Political
________ are distribution channel firms that help a company find customers or make sales to them.
Resellers
Which of the following is most likely a financial public?
Stockholder
American Honda purchases over $20 billion worth of auto parts and materials every year. ________ are key players in the company's success.
Suppliers
Which of the following is part of the microenvironment of a firm's marketing environment?
The suppliers who work with the company
Why is monitoring the technological environment crucial for marketing professionals?
The technological environment is perhaps the most dramatic force now shaping our destiny. The technological environment changes rapidly. New technologies create new markets and opportunities. However, every new technology replaces an older technology. Transistors hurt the vacuum-tube industry, digital photography hurt the film business, and MP3 players and digital downloads are hurting the CD business. When old industries fought or ignored new technologies, their businesses declined. Thus, marketers should watch the technological environment closely. Companies that do not keep up will soon find their products outdated. If that happens, they will miss new product and market opportunities.
Which of the following is most likely a characteristic of the Millennial generation?
They are more likely to engage with brands using mobile or social media.
Which of the following is most likely a true statement about baby boomers?
They are the wealthiest generation in U.S. history.
Which of the following is most likely true about companies that take a proactive stance toward the marketing environment?
They develop strategies to change the marketing environment.
Which of the following is most likely a characteristic of firms that adopt a reactive approach toward the marketing environment?
They take advantage of the opportunities provided by the environment.
Which of the following is most likely a characteristic of Generation Xers?
They were the first group to grow up in the Internet era.
T/F: Value marketing has become the watchword for many marketers.
True
T/F: Walmart's microenvironment includes suppliers.
True
Give an instance where a company exhibits social responsibility through business.
To exercise their social responsibility and build a more positive image, many companies are now linking themselves to worthwhile causes. Cause-related marketing has become a primary form of corporate giving. It lets companies "do well by doing good" by linking purchases of the company's products or services with benefiting worthwhile causes or charitable organizations. For example, the P&G Tide Loads of Hope program provides mobile laundromats and loads of clean laundry to families in disaster-stricken areas — P&G washes, dries, and folds clothes for these families for free. Down the street, needy people will probably find the P&G Duracell Power Relief Trailer, which provides free batteries and flashlights as well as charging stations for phones and laptops.
The responsibility for setting a company's mission, objectives, broad strategies, and policies primarily lies with its ________.
Top management
T/F: A bank that helps a company finance transactions is both a financial intermediary and a financial public.
True
T/F: A company that adopts a reactive marketing stance would most likely view the marketing environment as an uncontrollable element to which it must adapt.
True
T/F: Advertising agencies that help a company target a certain section of customers are marketing intermediaries.
True
T/F: Companies are adapting their promotional efforts to reflect the changing dynamics of American families.
True
T/F: Firms that develop strategies to change the environment are considered proactive.
True
T/F: Government regulations are intended to protect consumers, companies, and societal interests.
True
T/F: Many companies have started to target the LGBT market segment which has significant buying power.
True
T/F: Marketers have a better chance of taking advantage of a person's secondary beliefs than his or her core beliefs
True
T/F: The Federal Trade Commission enforces laws that prevent unfair competition in business.
True
T/F: The distribution of income in the United States has created a tiered market.
True
T/F: The purchasing power of a population is part of the demographic environment of a company's macroenvironment.
True
Recyclable or biodegradable packaging, recycled materials and components, and better pollution controls are ways that marketers have responded to the ________.
environmental sustainability movement
Which of the following is a geographic shift that has been observed in the United States in recent times?
more Americans moving to micropolitan area
A marketing intermediary would most likely help a firm by ________.
moving the firm's goods from production points to distribution centers
Governments most likely enact business legislation to ________.
prevent unfair competition in the market
The boom in online, mobile, and social media has created a new set of social and ethical issues for companies. Their greatest concern involves ________.
protecting the privacy of knowing and unknowing customers
JJ Distributors Ltd. buys electronic products from manufacturers for wholesale and sells them to various retail outlets. To which of the following markets does JJ Distributors Ltd. directly cater?
reseller markets
