Chapter 3

Compare the following product offerings. Which is an example of indirect competition? A. Burger King and Subway B. Crest and Colgate toothpaste C. Coca-Cola and Pepsi D. Sirius XM radio and Pandora E. Dunkin' Donuts and Krispy Kreme Doughnuts

A. Burger King and Subway

What country has been criticized for undervaluing its currency? A. United States B. China C. Japan D. Great Britain E. Brazil

B. China

A sudden drop in the average consumer income would be an example of which external force affecting the marketing environment? A. technological B. economic C. political D. sociocultural E. legal

B. economic

As of March 2013, how many countries are part of the IMF? A. 59 B. 86 C. 112 D. 188 E. 210

D. 188

A nation's purchasing capability tends to increase when the proportion of A. lower-income households increase. B. upper-income households increase. C. top wage earners increase. D. middle-income households increase. E. top wage earners decreases.

D. middle-income households increase.

Currently, females account for what percentage of all consumer purchases in the United States? A. 5 percent B. 12 percent C. 35 percent D. 60 percent E. 85 percent

E. 85 percent

The price of one country's currency in terms of another country's currency is referred to as A. the currency exchange rate. B. the currency fluctuation rate. C. the value fluctuation rate. D. the value exchange rate. E. the currency expectation rate.

A. the currency exchange rate.

When it comes to income distribution, what income class are marketing professionals particularly attracted to? A. middle-income households B. upper-income households C. the top wage earners D. lower-income households E. those below the poverty line

A. middle-income households

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? A. political B. economic C. legal D. financial E. sociocultural

C. legal

Which of the following is the fastest growing demographic group in the U.S.? A. teenagers B. middle-aged women C. seniors D. college-age males E. young adults

C. seniors

he external marketing factor that refers to the combination of social and cultural factors that affect individual development is A. demographics. B. human nature. C. sociocultural. D. ethnicity. E. culturalism.

C. sociocultural.

What country joined the Central American Free Trade Agreement in 2004? A. Dominican Republic B. Brazil C. Cuba D. United States E. Mexico

A. Dominican Republic

What term refers to how the value of one country's currency changes in relation to the value of other currencies? A. currency exchange B. currency fluctuation C. value fluctuation D. value exchange E. currency expectation

B. currency fluctuation

A situation in which products that perform the same function compete against one another is referred to as A. lateral competition. B. direct competition. C. functional competition. D. primary competition. E. indirect competition.

B. direct competition.

A measure of the market value of all officially recognized final goods and services produced within a country in a given period is referred to as A. purchasing power parity. B. gross domestic product. C. the balance of trade. D. the currency exchange rate. E. the consumer price index.

B. gross domestic product.

Which of the following countries is NOT part of the Central American Free Trade Agreement (CAFTA)? A. Costa Rica B. Brazil C. Guatemala D. El Salvador E. Honduras

B. Brazil

What was the purpose of the Wheeler-Lea Act (1938)? A. It eliminated monopolies and guaranteed competition. B. It made deceptive and misleading advertising illegal. C. It guaranteed that product packages are labeled correctly. D. It banned unfair credit card rate increases. E. It established the Federal Trade Commission.

B. It made deceptive and misleading advertising illegal.

The International Monetary Fund was particularly important when it was first created because it helped stabilize the world's economic system following A. World War I. B. World War II. C. the Great Depression. D. the break-up of the Soviet Union. E. the creation of the European Union.

B. World War II.

What was one of the key goals of the North American Free Trade Agreement? A. the allowance of agricultural exports B. the elimination of tariffs C. the establishment of trade embargoes D. the establishment of trade sanctions E. the equalization of import/export fees

B. the elimination of tariffs

During the economic recession that began in December of 2007, Americans reduced their overall charitable giving by approximately A. 2 percent. B. 10 percent. C. 20 percent. D. 50 percent. E. 70 percent.

C. 20 percent.

A belief by residents of a country that it is inappropriate or immoral to purchase foreign-made goods and services is known as A. cultural fit. B. xenophobia. C. consumer ethnocentrism. D. sociocultural bias. E. international protectionism.

C. consumer ethnocentrism.

The amount of spending money available to households after paying taxes is called A. discretionary income. B. unaccountable income. C. disposable income. D. tax-free income. E. at-will income.

C. disposable income.

The generation of children born between 1946 and 1964 are retiring at a rate of 10,000 per day. What is the name of this demographic group? A. Millennials B. Generation x C. Generation y D. Digital natives E. Baby boomers

E. Baby boomers

Compare the following statements and select the one that reflects your text's assertion as to why educated consumers are prime targets for marketing strategies. A. Educated consumers are more likely to earn significantly more money throughout the course of their lifetime. B. Educated consumers are more willing to spend money than uneducated consumers. C. Educated consumers typically have more access to various forms of media and therefore are easier to target as a consumer group. D. Educated consumers know that in order to keep the economy moving, people must spend money. E. Educated consumers typically have less free time and therefore spend money on products that save them time and make their lives easier.

A. Educated consumers are more likely to earn significantly more money throughout the course of their lifetime.

Which of the following accurately describes the nonprofit competitive environment? A. The competitive environment for nonprofit funding has increased dramatically in recent years. B. Nonprofits do not see a decline in donations during economic recessions. C. Nonprofit marketers are not impacted by external marketing factors. D. Because they do not operate for a profit, nonprofit organizations do not need to engage in environmental scanning. E. The competitive environment for nonprofit funding has decreased dramatically in recent years.

A. The competitive environment for nonprofit funding has increased dramatically in recent years.

Which of the following represents how technology is being used in the global marketing environment? A. The use of translation programs which allows customers to view websites in their own language B. Companies advertising in both domestic and international publications C. Countries joining free trade agreements to facilitate the import and export of products D. Corporations that directly invest in foreign countries by opening satellite facilities overseas E. Companies outsourcing various functions such as customer service call centers to other countries

A. The use of translation programs which allows customers to view websites in their own language

Which of the following organizations was formed in 1995 under the Marrakech Agreement and with its 153 members represents more than 97 percent of the world's population? A. WTO B. NATO C. UN D. NAFTA E. IMF

A. WTO

Direct competition is also known as A. brand competition. B. in-house competition. C. market competition. D. substitute product competition. E. lateral competition.

A. brand competition.

As described in your text, how did marketers at Disney utilize technology to provide a more hassle-free experience at their theme parks? A. by introducing wristbands with a radio-frequency identification device B. by installing smartphone charging stations C. by providing users with a park pass that could be used for their entire stay D. by introducing a laser stamp that could be used instead of a park pass E. by installing monitor screens showing wait times for various rides/attractions

A. by introducing wristbands with a radio-frequency identification device

A measure of how optimistic consumers are about the overall state of the economy and their own personal finances is referred to as A. consumer confidence. B. purchasing power. C. market confidence. D. purchasing confidence. E. consumer expectations.

A. consumer confidence.

Overall GDP is the most common gauge of A. the overall expansion or contraction of an economy. B. the balance of trade between countries. C. fluctuations in currency exchange rates. D. unemployment and future job forecasting. E. the consumer price index and purchasing power parity.

A. the overall expansion or contraction of an economy.

Which of the following is the correct definition of inflation? A. The rise in the rate of unemployment due to a slowing economy B. An increase in the general level of prices of products in an economy over a period of time C. A decline in gross domestic product for two or more consecutive quarters D. The rise in the amount of goods and services that can be purchased for a specific amount of money E. A decline in consumer confidence about the overall state of the economy and their own personal finances

B. An increase in the general level of prices of products in an economy over a period of time

What U.S. corporation was criticized when it created an in-store ad for some European stores that showed a Hindu goddess atop a ham sandwich with the caption, A snack that is sacred. A. McDonald's B. Burger King C. Wendy's D. Subway E. Denny's

B. Burger King

Which ethnic group population in the United States is expected to almost double by the year 2050? A. Asian Americans B. Hispanics C. African Americans D. Eastern Europeans E. Pacific Islanders

B. Hispanics

In 2003, when France refused to join the U.S. military operation in Iraq, many U.S. consumers refused to eat french fries, so clever marketers renamed them freedom fries. What obstacle were these marketers trying to overcome? A. cultural fit B. cultural ethnocentrism C. sociocultural bias D. xenophobia E. foreign boycott

B. cultural ethnocentrism

Monitoring developments outside of the firm's control with the goal of detecting and responding to threats and opportunities is called A. data mining. B. environmental scanning. C. competitive analysis. D. brand positioning. E. market assessment.

B. environmental scanning.

According to your text, what provides the most reliable picture of a country's purchasing power? A. an appreciating currency value B. its income distribution C. its level of gross domestic product D. a stable rate of currency fluctuation E. a high level of consumer confidence

B. its income distribution

As noted in your text, from a political standpoint, which of the following was hit particularly hard due to the recession that began in late 2007? A. the banking industry B. public universities C. auto manufacturing D. the entertainment industry E. the food service industry

B. public universities

Consider the following activities to determine which one is NOT a function of the International Monetary Fund. A. foster international monetary cooperation B. regulate trade among participating countries C. secure financial stability D. facilitate international trade E. reduce poverty around the world

B. regulate trade among participating countries

NAFTA is a trade agreement between A. Brazil, China, and India. B. the United States, Canada, and Mexico. C. the European Union and the United States. D. the United States and China. E. the United States, Mexico, and Brazil.

B. the United States, Canada, and Mexico.

The largest share of U.S. exports are to A. the European Union. B. China. C. Canada and Mexico. D. Brazil and India. E. Canada and Japan.

C. Canada and Mexico.

CAFTA is a trade agreement for countries in A. Africa. B. Asia. C. Central America. D. North America. E. Europe.

C. Central America.

Which of the following is the accurate cause of a recession? A. The unemployment rate declines for two or more consecutive quarters. B. Inflation and unemployment both rise consecutively. C. GDP declines for two or more consecutive quarters. D. The consumer price index falls below the average yearly standard. E. Inflation rises for two or more consecutive quarters.

C. GDP declines for two or more consecutive quarters.

Analyze the following statements to determine what would happen if the value of the euro appreciates relative to the dollar. A. It would increase the spending power of American consumers seeking to buy European products. B. It would reduce the spending power of European consumers seeking to buy American products. C. It would reduce the spending power of American consumers seeking to buy European products. D. The price of goods and services for European products would become evenly matched with American products. E. The spending power of both American and European consumers would increase.

C. It would reduce the spending power of American consumers seeking to buy European products.

Karlee needed to pick up some toothpaste from the store. She was surprised to find that the store was out of her usual brand, Crest. Rather than go to another store, she decided to buy a tube of Colgate instead. In this example, Colgate represents A. indirect competition. B. an unsought good. C. a substitute product. D. a disposable product. E. lateral competition.

C. a substitute product.

What are the three sources of funding that nonprofit organizations rely on? A. federal funds, state funds, and individual donations B. grants, federal funds, and individual donations C. grants, special events, and individual donations D. special events, corporate sponsorships, and individual donations E. grants, advertising revenue, and individual donations

C. grants, special events, and individual donations

According to your text, of all the external factors that affect the marketing environment, which one represents the most significant challenges, as well as the most significant opportunities, for marketing professionals? A. economic B. demographic C. technological D. sociocultural E. political

C. technological

Which regulation was passed to eliminate monopolies and guarantee competition? A. the Robinson-Patman Act (1936) B. the Wheeler-Lea Act (1938) C. the Sherman Antitrust Act (1890) D. the Fair Packaging and Labeling Act (1966) E. the Telephone Consumer Protection Act (1991)

C. the Sherman Antitrust Act (1890)

Compare the following statements to determine which one is accurate regarding marketing on a global scale versus marketing domestically? A. There is no difference between how products are marketed globally versus domestically. B. The external marketing factors that are considered when marketing domestically do not apply when marketing products globally. C. Most U.S. firms do not need to consider the global marketing environment in any context. D. Environmental scanning on a global scale is more complex than it is in the domestic environment. E. Small businesses are not affected by global trends like large corporations are.

D. Environmental scanning on a global scale is more complex than it is in the domestic environment.

The Consumer Protection Agency for the United States is the A. Consumer Protection Commission. B. Federal Communications Commission. C. Food and Drug Administration. D. Federal Trade Commission. E. Bureau of Consumer Financial Protection.

D. Federal Trade Commission.

Compare the following product offerings. Which is the best example of direct competition? A. Burger King and Subway B. carpet cleaning stores and hardware stores that rent carpet cleaners C. a pizza restaurant and a fried chicken restaurant D. Google and Yahoo E. Coca-Cola and Arizona Iced Tea

D. Google and Yahoo

A marketer that uses social media sites to engage potential customers is most likely targeting which demographic group? A. Generation Z B. Generation X C. Silent Generation D. Millennials E. Baby Boomers

D. Millennials

If a domestic firm makes the mistake of believing that foreign consumers want exactly the same products that are sold in the United States, then that firm is most likely ignoring the importance of A. consumer ethnocentrism. B. demographics. C. environmental scanning. D. cultural fit. E. consumer confidence.

D. cultural fit.

The description of human populations based on characteristics such as age, gender, ethnicity, and education level is referred to as A. statistical analysis. B. sociocultural analysis. C. psychographics. D. demographics. E. consumer group profiling.

D. demographics.

Marketers are particularly interested in targeting baby boomers because they typically possess two things that marketing professionals seek: A. higher education levels and disposable income. B. higher paying jobs and greater interest in leisure activities. C. greater purchasing power and more consumer confidence. D. disposable income and free time. E. higher paying jobs and higher education levels.

D. disposable income and free time.

Daniel is looking to buy a hybrid vehicle because he is noticing that the price of gasoline continues to rise compared to years past. The rise in the price of gasoline is most likely a result of A. deflation. B. a recession. C. a rise in GDP. D. inflation. E. an increase in purchasing power.

D. inflation.

What external marketing factor is at work when political action committees raise money to help elect individuals to promote a particular issue related to their industry? A. economic B. legal C. sociocultural D. political E. technological

D. political

The six major external factors that influence the marketing environment of a firm are: economic, demographic, sociocultural, technological, legal and A. environmental. B. international. C. domestic. D. political. E. financial.

D. political.

Taxes on imports and exports between countries are called A. import/export fees. B. trade restrictions. C. duties. D. tariffs. E. concessions.

D. tariffs.

Which of the following generated an estimated 26 percent share of the global gross domestic product, making it the largest economy in the world in 2010? A. the United States B. China C. the Central American countries of DR-CAFTA D. the European Union E. the North American countries of NAFTA

D. the European Union

Consider the following statements to determine which one accurately describes the concept of consumer ethnocentrism. A. A belief that the world's goods and services should be distributed fairly by all nations B. A belief by residents of a country that the goods and services they produce are superior to that of other countries C. A measure of how optimistic consumers are about the overall state of the economy and their own personal finances D. A measure of the amount of goods and services that can be purchased based on the currency exchange rate E. A belief by residents of a country that it is inappropriate or immoral to purchase foreign-made goods or services

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

Which country belonging to the DR-CAFTA trade agreement has the largest economy? A. Costa Rica B. Nicaragua C. El Salvador D. Honduras E. Dominican Republic

E. Dominican Republic

Compare the following statements to determine which one accurately depicts how income is distributed across the U.S. population. A. Income for the middle class in the United States has consistently grown faster than any other wage earning bracket. B. Over the past several decades, there has been a robust shift in the lowest wage earners moving upward to the middle class. C. The top wage earners of the U.S. population are earning only a small percentage of the country's adjusted gross income. D. Over the past several decades, there has been little shift in any of the wage earning brackets of the U.S. population. E. Over the past several decades, income for the highest wage earners grew at a much quicker pace than for households in the bottom wage earning bracket.

E. Over the past several decades, income for the highest wage earners grew at a much quicker pace than for households in the bottom wage earning bracket.

Which of the following acronyms stands for the international organization that regulates trade among participating countries and helps importers and exporters conduct their business? A. IMF B. NATO C. CAFTA D. NAFTA E. WTO

E. WTO

If the cost of groceries goes up by 10 percent this year, the amount of groceries you can buy for $50 decreases by that same 10 percent. This is an example of A. deflation. B. a recession. C. a rise in GDP. D. a decline in GDP. E. a decrease in purchasing power.

E. a decrease in purchasing power.

Which of the following is NOT considered to be a demographic characteristic? A. age B. gender C. ethnicity D. education level E. consumer confidence

E. consumer confidence

When marketers for Walt Disney World in Florida attract French and British families by advertising the resort's new affordability for Europeans, what global marketing environment factor are they employing? A. income distribution levels B. cultural fit C. lowered trade barriers D. international economic cooperation E. currency fluctuation

E. currency fluctuation

When a hospital displays a digital recognition system in its front lobby listing donors of all sizes in order to foster pride and enthusiasm in donors about how their efforts improve the lives of others, it is most likely attempting to overcome which external marketing factor? A. sociocultural B. political C. demographic D. legal E. economic

E. economic

Indirect competition occurs when A. consumers purchase products that they did not intend to buy. B. consumers choose between two products that perform the same function. C. products are marketed to a new consumer segment. D. a company introduces a new product to its product line. E. products provide alternate solutions to the same market.

E. products provide alternate solutions to the same market.

When marketers use Facebook to increase awareness and enhance relationships with donors, they are responding to which external force in the marketing environment? A. demographics B. economic C. legal D. sociocultural E. technological

E. technological

While shopping for back-to-school clothes, Josie uses apps on her smartphone to comparison shop, and to obtain coupons and fashion advice. What external factor affecting the marketing environment does this represent? A. economic B. demographic C. legal D. sociocultural E. technological

E. technological

According to your text, one of the biggest sociocultural changes in the United States over the past half century has been A. the immigration of Hispanics into the country. B. the decline of females as the primary purchasers of products. C. the gradual increase of college graduates in the workplace. D. the increased use of the Internet for purchasing consumer products. E. the shift from one-income families to two-income and single-parent households.

E. the shift from one-income families to two-income and single-parent households.

International trade agreements, monetary unions, and organizations can impact the environment in which a firm operates in all of the following ways EXCEPT A. they can affect how easy it is for firms to enter a foreign market. B. they can affect what the currency exchange rate is between countries. C. they can affect what competition firms will encounter in the domestic market. D. they can facilitate the exchange of money and products across borders. E. they can make it easier to bypass regulations on economic activity.

E. they can make it easier to bypass regulations on economic activity.

A firm that is engaged in environmental scanning is monitoring developments outside of the firm's control in order to detect and respond to A. the strengths of the firm. B. environmental issues associated with the firm's operations. C. market opportunities associated with environmental concerns. D. the weaknesses of the firm. E. threats and opportunities.

E. threats and opportunities.

Currency fluctuations can provide marketing opportunities A. only when a currency is appreciating. B. only if currency exchange rates remain stable. C. only internationally, but not domestically. D. only when a currency is depreciating. E. whether a currency is appreciating or depreciating.

E. whether a currency is appreciating or depreciating.