Mkrt 301 chap 3 Test and Quiz Questions
2. Explain the differences between the competitive structures of a monopoly and an oligopoly.
ANSWER: A monopoly exists when an organization offers a product that has no close substitutes, making that organization the sole source of supply. In reality, most monopolies surviving today are local utilities, which are heavily regulated by local, state, or federal agencies. An oligopoly exists when a few sellers control the supply of a large proportion of a product. Products facing oligopolistic competition may be homogeneous, such as aluminum, or differentiated, such as package delivery services.
129. Environmental analysis is the process of collecting information about forces in the marketing environment. a. True b. False
ANSWER: False
154. Political forces are beyond the control of marketers, and so they can only react to them. a. True b. False
ANSWER: False
162. The Food and Drug Administration influences marketing activities the most. a. True b. False
ANSWER: False
166. A good example of a government regulatory group at the local level is the Better Business Bureau. a. True b. False
ANSWER: False
167. The Council of Better Business Bureaus and the FTC make up the National Advertising Review Board (NARB). a. True b. False
ANSWER: False
168. All members of an industry are bound to follow trade association guidelines. a. True b. False
ANSWER: False
171. Technological changes do not directly affect what, how, when, and where products are marketed. a. True b. False
ANSWER: False
181. Changes in cultural values have little effect on people's needs for products. a. True b. False
ANSWER: False
7. Describe several ways in which federal agencies influence marketing activities.
ANSWER: Federal regulatory agencies usually have the power to enforce specific laws, as well as some discretion in establishing operating rules and regulations to guide certain types of industry practices. Some of the federal laws that regulate and influence marketing activities are Federal Trade Commission Act, Sherman Antitrust Act, Consumer Goods Pricing Act, Fair Packaging and Labeling Act, Consumer Product Safety Act, and so on.
10. What are the major forces that are referred to as sociocultural forces and how do they present marketers with both challenges and opportunities?
ANSWER: Sociocultural forces are the influences in a society and its culture(s) that bring about changes in people's attitudes, beliefs, norms, customs, and lifestyles. Profoundly affecting how people live, these forces help determine what, where, how, and when people buy products. Changes in a population's demographic characteristics—age, gender, race, ethnicity, marital and parental status, income, and education—have a significant bearing on relationships and individual behavior. These shifts lead to changes in how people live and ultimately in their consumption of such products as food, clothing, housing, transportation, communication, recreation, education, and health services. Changes in cultural values have dramatically influenced people's needs and desires for products. Although cultural values do not shift overnight, they do change at varying speeds. Marketers try to monitor these changes, knowing this information can equip them to predict changes in consumers' needs for products, at least in the near future. Consumerism involves organized efforts by individuals, groups, and organizations to protect consumers' rights. The movement's major forces are individual consumer advocates, consumer organizations and other interest groups, consumer education, and consumer laws. To achieve their objectives, consumers and their advocates write letters or send e-mails to companies, lobby government agencies, broadcast public service announcements, and boycott companies whose activities they deem irresponsible.
130. Environmental analysis helps managers identify potential threats and opportunities linked to environmental changes. a. True b. False
ANSWER: True
131. Brand competitors market products with similar features, benefits, and prices to the same customers. a. True b. False
ANSWER: True
137. Monitoring the competitive environment guides marketers in developing competitive advantages. a. True b. False
ANSWER: True
138. Changes in general economic conditions affect (and are affected by) supply and demand, buying power, willingness to spend, consumer expenditure levels, and intensity of competitive behavior. a. True b. False
ANSWER: True
140. The strength of one's buying power depends partially on the state of the economy. a. True b. False
ANSWER: True
159. Fraud and antitrust violations are the most frequently sentenced organizational crimes. a. True b. False
ANSWER: True
161. Because of overlapping areas of responsibilities of regulatory agencies, confusion and conflict regarding jurisdiction of marketing activities are common. a. True b. False
ANSWER: True
169. Technology is the application of knowledge and tools to solve problems and perform tasks more efficiently. a. True b. False
ANSWER: True
170. Technological developments have a direct impact on creating and maintaining a marketing mix. a. True b. False
ANSWER: True
173. Technology affects the types of products offered to consumers. a. True b. False
ANSWER: True
183. The major source of cultural values is the family. a. True b. False
ANSWER: True
67. Discretionary income is associated with all of the following except a. automobiles. b. education. c. pets. d. furniture. e. food.
E.food
128. The marketing environment consists of external forces that directly or indirectly influence an organization's acquisition of inputs and generation of outputs. a. True b. False
True
133. The number of firms that control the supply of a product may affect the strength of competition. a. True b. False
True
53. In a period of economic recovery, the best marketing strategy for FedEx would be characterized by which of the following features? a. Flexibility b. Aggressiveness c. Austerity d. Retrenchment e. Boldness
a. Flexibility
30. Which of the following is not at the generic competitor level for Ford's Expedition sport utility vehicle? a. Ford's Escape SUV b. Enterprise car rental c. Harley Davidson motorcycle d. Schwinn mountain bike e. Taxi cab ride
a. Ford's Escape SUV
38. What type of competitive structure exists when a firm produces a product that has no close substitutes? a. Monopoly b. Oligopoly c. Monopolistic competition d. Pure competition e. Mixed competition
a. Monopoly
23. 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? a. Proactive b. Competitive c. Reactive d. Inactive e. Controllable
a. Proactive
79. Which of the following acts was enacted to prevent businesses from restraining trade and monopolizing markets? a. Sherman Antitrust Act b. Clayton Act c. Federal Trade Commission Act d. Robinson-Patman Act e. Wheeler-Lea Act
a. Sherman Antitrust Act
42. Which of the following firms would be most likely to have a monopoly for its competitive environment? a. TimeWarner Cable TV b. Mitchell Trucking c. American Airlines d. Rogers Plumbing e. Chemlawn Lawn Care
a. TimeWarner Cable TV
41. The Decca Electric Corporation produces light bulbs that are used in refrigerator manufacturing. Currently, only three other companies produce bulbs used in the production of refrigerators, with Decca as the leader in market share. In this case, Decca Electric Corporation would be considered a. an oligopoly. b. a monopoly. c. involved in monopolistic competition. d. involved in perfect competition. e. involved in a perfect oligopoly.
a. an oligopoly.
31. Marketers primarily focus their environmental analysis on ____ competitors. a. brand b. product c. total budget d. generic e. monopolistic
a. brand
18. According to the textbook, a manager's duties in an environmental analysis include a. checking information for accuracy, resolving inconsistencies, and assigning significance to the findings. b. observation and assessment. c. conducting research, assessment, and reporting. d. observation, market research, and fact finding. e. checking the company database, conducting research, and reporting.
a. checking information for accuracy, resolving inconsistencies, and assigning significance to the findings
12. To monitor changes in the marketing environment effectively, marketers must engage in a. environmental scanning and analysis. b. economic scanning c. self-regulatory analysis d. marketing research analysis e. information collecting
a. environmental scanning and analysis.
15. The Lazy-Boy Furniture Company 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 a. environmental scanning. b. survey of environment. c. marketing. d. environmental analysis. e. marketing information processing.
a. environmental scanning.
63. The amount of money received through wages, rents, investments, pensions, and subsidies is called a. income. b. wealth. c. discretionary income. d. prosperity. e. credit.
a. income.
98. The Better Business Bureau is probably the best-known a. nongovernmental regulatory group. b. state-operated enforcement agency. c. national evaluator of advertisements. d. federal regulatory group. e. self-regulatory unit operating at the national level.
a. nongovernmental regulatory group.
54. Assuming that inflation is low, high buying power characterizes the ____ stage of the business cycle. a. prosperity b. depression c. recovery d. succession e. recession
a. prosperity
70. Which of the following companies would probably be most interested in tracking discretionary income levels? a. Safeway food stores b. BMW automobiles c. Gulf States Utilities d. General Mills e. Florida Orange Growers
b. BMW automobiles
65. Which category of income are marketers most interested in? a. Wealth b. Disposable income c. Discretionary income d. Total income e. Extra income
b. Disposable income
99. In its advertisements, Regent Hair Care Products claims that its KLTR-14 gel will restore the hair of bald men. Even though Regent shows supporting evidence in its ads, members of the National Advertising Review Board (NARB) believe the claim is unsupportable. What action can the NARB take? a. Force Regent to stop running the advertisement. b. File a complaint with the Federal Trade Commission. c. Fine Regent for each time the ad appears. d. Sue Regent Hair Care Products in federal court. e. Sue Regent Hair Care Products in state court.
b. File a complaint with the Federal Trade Commission.
45. What type of competitive structure exists when just a few sellers control a large portion of the supply of a product? a. Monopoly b. Oligopoly c. Monopolistic competition d. Mixed competition e. Pure competition
b. Oligopoly
77. Which of the following statements is true? a. Political officials can-not influence how much a government agency purchases and from whom. b. The U.S. Supreme Court ruled that the government is not authorized to ban corporate spending in candidate elections. c. Company sponsored political advertising can only focus on topics and not on candidates. d. Political officials can-not accept direct corporate campaign contributions. e. Companies can-not participate in the political process through lobbying.
b. The U.S. Supreme Court ruled that the government is not authorized to ban corporate spending in candidate elections.
43. Most marketers operate in a competitive environment of either a. oligopoly or monopoly. b. oligopoly or monopolistic competition. c. oligopoly or pure competition. d. monopoly or pure competition. e. pure competition or monopolistic competition.
b. oligopoly or monopolistic competition.
91. The FTC can issue a cease-and-desist order, which is an injunction to a. report to the FTC immediately. b. stop doing whatever caused the complaint. c. appear before the courts. d. pay for damages caused by negligence of the firm. e. close down the firm until further notice.
b. stop doing whatever caused the complaint.
34. Companies that compete for the same limited financial resources of the same customers are known as ____ competitors. a. oligopolic b. total budget c. generic d. product e. brand
b. total budget
114. 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? a. Ads featuring nostalgic Americana b. Bonus coupons in Coca-Cola twelve-packs c. Ads featuring Hispanic actors and Tejano music d. Ads in The New Yorker and Reader's Digest e. Ads aimed at children
c. Ads featuring Hispanic actors and Tejano music
52. Volkswagen is planning its promotional strategy for its Passat model. When compared to others in its class, the Passat has average gas mileage, better comfort ratings, more leg room, better interiors, average dependability, and is made in its plants in Tennessee. Which of the following attributes of a Volkswagen Passat would be most appropriate to emphasize in television commercials during an economic recession? a. Gas mileage b. Dependability c. Made in the U.S.A. d. Leg room e. Comfort
c. Made in the U.S.A.
84. Price discrimination is prohibited by the ____ Act. a. Sherman Antitrust b. Wheeler-Lee c. Robinson-Patman d. Celler-Kefauver e. Consumer Goods Pricing
c. Robinson-Patman
27. Companies that market products with similar features, benefits, and prices to the same customer group are known as ____ competitors. a. generic b. product c. brand d. total budget e. monopolistic
c. brand
26. When marketers define their target market, they simultaneously establish a set of a. technologies. b. monopolies. c. competitors. d. government regulations. e. sociocultural forces.
c. competitors.
40. The American automobile industry was historically dominated by "The Big Three," referring to 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. a. monopolistic; oligopolistic b. oligopolistic; pure competition c. oligopolistic; monopolistic competition d. monopolistic competition; pure competition e. monopolistic; monopolistic competition
c. oligopolistic; monopolistic competition
76. 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. a. economic b. competitive c. political d. environmental e. sociocultural
c. political
56. Total buying power declines during periods of economic a. recovery. b. prosperity. c. recession. d. uncertainty. e. expansion.
c. recession.
57. Although marketing theory supports the contrary, it is more probable that marketing budgets will be cut during periods of economic a. recovery. b. prosperity. c. recession. d. uncertainty. e. expansion.
c. recession.
58. Publix Supermarket is revising its marketing plan for the upcoming quarter. Publix typically focuses on its wide variety of products and its high quality customer service, having very few weekly "sales." However, during the upcoming quarter, Publix plans to focus on price and value, and promote weekly "values" instead. Publix is most likely in a(n) a. inflation period. b. prosperity period. c. recession. d. depression. e. recovery period.
c. recession.
96. 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 a. legislation. b. lobbying. c. self-regulation. d. environmental scanning. e. trade restraint.
c. self-regulation.
112. 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. a. technological b. political c. sociocultural d. self-regulatory e. controllable
c. sociocultural
110. UPS is considering its distribution strategy for the next five years. As part of the strategy development, UPS is investigating the use of radio frequency identification, consumer payments through smart phones, Facebook, and Twitter and how they might use these to interface with their customers. UPS is most likely engaging in a. product differentiation. b. monopolistic competition. c. technology assessment. d. distinctive promotional methods. e. innovative marketing.
c. technology assessment.
105. More than half of the research of technology created is paid for by a. corporations. b. state and local governments. c. the federal government. d. large universities. e. private investors.
c. the federal government.
32. 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. a. generic b. product c. total budget d. monopolistic e. pure
c. total budget
64. If Julio Ruiz 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 a. $7,800. b. $14,000. c. $9,000. d. $25,000. e. $20,000.
d. $25,000. 30000-5000=25000
196. Your company is accepting proposals from a variety of consulting firms to assist in determining how the rapid changes in technology will impact your firm's future operations and profitability. Which one of the following consulting firm proposals should you accept? a. Accept Firm A's proposal to complete a technology evaluation. b. Accept Firm B's proposal to complete a SWOT analysis. c. Accept Firm C's proposal to implement an information technology change management process. d. Accept Firm D's proposal to complete a technology assessment. e. None of the proposals should be accepted.
d. Accept Firm D's proposal to complete a technology assessment.
89. Of all the federal regulatory units, the ____ most heavily influences marketing activities. a. Food and Drug Administration (FDA) b. Federal Communications Commission (FCC) c. Environmental Protection Agency (EPA) d. Federal Trade Commission (FTC) e. Federal Power Commission (FPC)
d. Federal Trade Commission (FTC)
94. 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? a. Federal regulation b. State regulation c. City regulation d. Self-regulation e. Social regulation
d. Self-regulation
100. Which of the following statements about self-regulatory programs is false? a. Self-regulatory programs are usually less expensive than governmental regulatory programs. b. Self-regulatory programs' guidelines generally are more realistic and operational. c. Many nongovernmental self-regulatory programs have neither the tools nor the authority to enforce guidelines. d. Self-regulatory guidelines generally are stricter than governmental regulatory programs. e. When a trade association sets up industry guidelines, some firms that are in the industry but not in the trade association do not follow the guidelines.
d. Self-regulatory guidelines generally are stricter than governmental regulatory programs.
80. If all the gas stations in a city collaborated to determine what gas prices should be charged, they would be violating the a. Wheeler-Lea Act. b. Clayton Act. c. Robinson-Patman Act. d. Sherman Antitrust Act. e. Celler-Kefauver Act.
d. Sherman Antitrust Act.
95. Which of the following regulatory groups is a system of nongovernmental, independent, local regulatory agencies supported by local businesses? a. The Chamber of Commerce b. The National Advertising Review Board c. The National Advertising Division d. The Better Business Bureau e. American Marketing Association
d. The Better Business Bureau
47. 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 a. price sensitive. b. opportunistic. c. monopolistic competition. d. an oligopoly. e. a monopoly.
d. an oligopoly.
117. Consumerism is a a. diverse group of individuals and organizations opposed to foreign producers that sell products in the United States that are much cheaper than those produced by U.S. manufacturers. b. social movement that is trying to encourage consumer satisfaction. c. social movement that is reorganizing the Council of Better Business Bureaus. d. diverse group of individuals and organizations attempting to protect the rights of consumers. e. social movement that provides consumers with means for expressing satisfaction and expressing their gratitude to producers.
d. diverse group of individuals and organizations attempting to protect the rights of consumers.
21. After Home Depot gathers information related to its marketing environment, it attempts to define current environmental changes and predict future changes. This determines possible opportunities and threats facing the company. It illustrates the process that is called a. environmental scanning. b. survey of environment. c. marketing. d. environmental analysis. e. marketing information processing.
d. environmental analysis.
66. A person's buying power is a function of a. disposable income. b. past income, natural resources, and financial resources. c. wages, rents, and investments. d. income, wealth, and credit. e. discretionary income.
d. income, wealth, and credit.
39. The type of competitive structure that exists in the case where there are almost no substitutes for a product is a(n) a. monopolistic competition. b. oligopoly. c. pure competition. d. monopoly. e. noncompetition.
d. monopoly.
14. Three primary methods of collecting information for environmental scanning are a. marketing research, company records, and advance orders. b. secondary sources, company records, and observation. c. executive knowledge, media, and marketing research. d. observation, secondary sources, and marketing research. e. company database, executive knowledge, and research.
d. observation, secondary sources, and marketing research
37. The four major competitive structures are a. monopolies, oligopolies, oligopolistic monopolies, and pure competition. b. pure competition, heavy competition, moderate competition, and light competition. c. brand, product, total budget, and generic. d. oligopolies, monopolies, monopolistic competition, and pure competition. e. monopolies, limited competition, oligopolistic competition, and pure competition.
d. oligopolies, monopolies, monopolistic competition, and pure competition.
69. The accumulation of past income, natural resources, and financial resources is known as a. income. b. collected income. c. credit. d. wealth. e. savings.
d. wealth.
35. ____ competitors are the most significant to marketers because buyers see the different products of these firms as direct substitutes for each other. a. Oligopolic b. Total budget c. Generic d. Product e. Brand
e. Brand
20. Nabisco learned that health-conscious consumers preferred lower fat snack and lower-carbohydrate 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? a. Environmental scanning b. Environmental marketing c. Demarketing d. Segmentation e. Environmental analysis
e. Environmental analysis
125. Scenario 3.2 Use the following to answer the questions. Clayton Homes, a mobile home manufacturer since 1934, introduced its new i-House in 2007. The i-House is one of the first of its kind, designed as an updated, modern version of the modular home, offered as a base home plus add-ons known as "pods." The base home is a one-bedroom, one-bath 734-square foot version at a price of around $80,000. There is also a 1,000 square-foot version for around $100,000. All versions may add on the additional one-room pods as desired which are shipped to your location and constructed on-site. The homes offer galvanized metal roofing, corrugated steel siding, VOC-free paints, and a "butterfly" roof that collects rainwater. The i-House uses 30% less energy than a similar square-foot home and offers "green" characteristics of solar panels, tankless water heaters, and low-flow faucets. In addition, it comes with bamboo flooring, a renewable resource. The modular, pre-fabricated design offers endless options for creating the customer's home and its engineered building system cuts down on construction waste. Due to the "green effects" of the i-House, the state governments have given it a tax abatement for any sales taxes. Refer to Scenario 3.2. The i-House's reduction of energy use, renewable resources as materials, "pod" customization, reduction of construction waste, and tax abatement status is/are examples of reaction to which environmental forces? a. political and sociocultural. b. political, sociocultural, economic. c. sociocultural and economic. d. political and economic. e. political, economic, sociocultural, and technological.
e. political, economic, sociocultural, and technological.
191. The Federal Reserve Bank just issued its economic report on the U.S. economy for the quarter just ended. The following are some of the key points mentioned in the report: 1. "Economic activity has continued to grow at a moderate pace since the last report." 2. "Manufacturers report that business activity has picked up considerably in recent weeks." 3. "Tourism activity has strengthened, no longer held back by harsh weather." 4. "General merchandise retailers report that sales rebounded strongly in April and early May." 5. "Retail contacts generally say that inventories are at satisfactory levels, that prices are mostly steady, and that the degree of discounting is little changed from a year ago." Based on these economic forces, you can conclude a. that the economy is entering the depression stage of the business cycle. b. that the economy is in the prosperity stage of the business cycle and consumers' buying power is declining. c. that the economy is in the recession stage of the business cycle and consumers' buying power is increasing. d. that the economy is in the recession stage of the business cycle and consumers' buying power is declining. e. that the economy is in the prosperity stage of the business cycle and consumers' buying power is increasing.
e. that the economy is in the prosperity stage of the business cycle and consumers' buying power is increasing.
1. Given a new brand of barbecue sauce for which to develop a marketing strategy, describe how you would conduct environmental scanning and analysis.
ANSWER: Environmental scanning can be done by collecting information about the existing brands of barbecue sauce, surveying people about their attitude toward barbecue sauces. Scanning involves observation; secondary sources such as business, trade, government, and Internet sources; and marketing research. Environmental analysis is the process of assessing and interpreting the information gathered through environmental scanning to identify the potential threats and opportunities linked to environmental changes. Thus, once the information regarding barbecue sauces is obtained, it will be assessed and interpreted for any potential threats and opportunities through this process.
4. Contrast recession and depression.
ANSWER: During a recession unemployment rises, while total buying power declines. Pessimism accompanying a recession often stifles both consumer and business spending. A prolonged recession may become a depression, a period in which unemployment is extremely high, wages are very low, total disposable income is at a minimum, and consumers lack confidence in the economy.
134. A monopoly exists when a firm with many potential competitors attempts to develop a marketing strategy to differentiate its products. a. True b. False
ANSWER: False
135. An oligopoly exists when a firm offers a product that has no close substitutes, making the firm the sole source of supply. a. True b. False
ANSWER: False
136. Pure competition is a common competitive environment. a. True b. False
ANSWER: False
139. A recession is characterized by extremely high unemployment, very low wages, minimal total disposable income, and lack of consumer confidence in the economy. a. True b. False
ANSWER: False
141. An individual's after-tax income is called his or her discretionary income, which is used for spending and/or saving. a. True b. False
ANSWER: False
142. Disposable income is used to pay taxes, spend, and save. a. True b. False
ANSWER: False
144. Decreases in taxes lead to decreases in disposable income. a. True b. False
ANSWER: False
146. Credit increases future buying power. a. True b. False
ANSWER: False
149. If a person has buying power, he or she is influenced only by a product's absolute price. a. True b. False
ANSWER: False
160. All marketers interpret laws and regulations conservatively and strictly to avoid violating a vague law. a. True b. False
ANSWER: False
172. Personal computers and cellular phones are technology. a. True b. False
ANSWER: False
175. Firms always adopt and use new technology. a. True b. False
ANSWER: False
178. The proportion of the U.S. population that will be over 65 years of age is expected to decline by the year 2050. a. True b. False
ANSWER: False
179. The number of single men and women living alone is declining. a. True b. False
ANSWER: False
184. The major forces that make up the consumerism movement are consumer organizations and business organizations. a. True b. False
ANSWER: False
5. Explain how a period of recession might affect the marketing of a product.
ANSWER: In times of recession or depression, when buying power decreases, many customers may become more price conscious and seek more basic, functional products. Some firms make the mistake of drastically reducing their marketing efforts during a recession, harming their ability to compete. During these times, a company should focus its efforts on determining precisely what functions buyers want and ensure that these functions are available in its product offerings. Promotional efforts should emphasize value and utility.
6. Explain the difference between procompetitive legislation and consumer protection laws.
ANSWER: Procompetitive laws are designed to preserve competition. Most of these laws were enacted to end various antitrade practices deemed unacceptable by society. Examples of illegal anticompetitive practices include stealing trade secrets or obtaining other confidential information from a competitor's employees, trademark and copyright infringement, price fixing, false advertising, and deceptive selling methods such as "bait and switch" and false representation of products. Laws have also been created to prevent businesses from gaining an unfair advantage through bribery. In response to the law, companies have begun to strengthen their compliance programs related to bribery. Consumer protection legislation deals with consumer safety, such as the food and drug acts, and is designed to protect people from actual and potential physical harm caused by adulteration or mislabeling. Other laws prohibit the sale of various hazardous products, such as flammable fabrics and toys that may injure children. Others concern automobile safety. Congress has also passed several laws concerning information disclosure. Some require that information about specific products, such as textiles, furs, cigarettes, and automobiles, be provided on labels. Other laws focus on particular marketing activities: product development and testing, packaging, labeling, advertising, and consumer financing.
9. Why must marketers be aware of new developments in technology?
ANSWER: Technology is the application of knowledge and tools to solve problems and perform tasks more efficiently. Marketers must be aware of new developments in technology, because it helps them to operate more efficiently and to provide an exciting array of products for consumers.
8. What roles do the Better Business Bureau and the National Advertising Review Board play in self-regulation of business?
ANSWER: The Better Business Bureau is a local regulatory agency supported by local businesses. When a firm continues to violate what the Better Business Bureau believes to be good business practices, the bureau warns consumers through local newspapers or broadcast media. If the offending organization is a Better Business Bureau member, it may be expelled from the local bureau. The National Advertising Review Board (NARB) is another self-regulatory entity that considers cases in which an advertiser challenges issues raised by the National Advertising Division (NAD) about an advertisement. Cases are reviewed by panels drawn from NARB members representing advertisers, agencies, and the public.
11. In what ways is the United States becoming an increasingly diverse nation in terms of culture?
ANSWER: The number of immigrants into the United States has steadily risen during the last 40 years. In the 1960s, 3.3 million people immigrated to the United States; in the 1970s, 4.4 million immigrated; in the 1980s, 7.3 million arrived; in the 1990s, the United States received 9.1 million immigrants; and in the 2000s, more than 8.3 million people have immigrated to the United States. In contrast to earlier immigrants, very few recent ones are of European origin. Another reason for the increasing cultural diversification of the United States is that most recent immigrants are relatively young, whereas U.S. citizens of European origin are growing older. These younger immigrants tend to have more children than their older counterparts, further shifting the population balance. By the turn of the 20th century, the U.S. population had shifted from one dominated by whites to one consisting largely of three racial and ethnic groups: whites, blacks, and Hispanics. The U.S. government projects that by the year 2060, approximately 128.8 million Hispanics, 61.8 million blacks, and 34.4 million Asians will call the United States home. Although the majority of the population still identify themselves as white, Hispanic and Asian ethnicities are expected to grow in the next 50 years, while white non-Hispanics ethnicities are estimated to decrease. Marketers recognize that these profound changes in the U.S. population bring unique problems and opportunities. But a diverse population means a more diverse customer base, and marketing practices must be modified—and diversified—to meet its changing needs.
3. Describe what is meant by a consumer's buying power. How might this affect a marketing strategy?
ANSWER: The strength of a person's buying power depends on economic conditions and the size of the resources, money, goods, and services that can be traded in an exchange, that enable the individual to make purchases. Hence, it affects the marketing strategy. The major financial sources of buying power are income, credit, and wealth.
143. The total amount of disposable income is affected by the amount of taxes consumers pay. a. True b. False
ANSWER: True
145. Credit increases current buying power at the expense of future buying power. a. True b. False
ANSWER: True
147. An individual can have a high income and very little wealth. a. True b. False
ANSWER: True
148. Wealth is an accumulation of past income, natural resources and financial resources. a. True b. False
ANSWER: True
151. For a given level of buying power, the larger the family, the greater the willingness to spend. a. True b. False
ANSWER: True
152. A factor that affects willingness to spend is general economic conditions. a. True b. False
ANSWER: True
153. Political and legal forces in the marketing environment are highly interrelated. a. True b. False
ANSWER: True
155. If political officials have positive feelings toward particular firms or industries, they are less likely to create or enforce laws and regulations that are unfavorable for business organizations. a. True b. False
ANSWER: True
156. A recent U.S. Supreme Court decision has nullified federal laws that limited corporate contributions to political campaign funds for specific canidates a. True b. False
ANSWER: True
157. Many laws that directly influence marketing activities were enacted either to preserve a competitive atmosphere or to protect consumers. a. True b. False
ANSWER: True
158. The Sherman Antitrust Act, along with several other laws, is a procompetitive law because it was created to preserve competition. a. True b. False
ANSWER: True
163. State and local regulatory agencies usually do not establish and enforce regulations that conflict with the actions of national regulatory agencies. a. True b. False
ANSWER: True
164. Numerous self-regulatory programs have been created to stop or stall the development of laws and government regulatory groups that would regulate marketing practices. a. True b. False
ANSWER: True
165. Although numerous regulatory forces arise from governmental sources, nongovernmental regulatory forces may also affect marketing decisions. a. True b. False
ANSWER: True
174. Technology can help marketers become more productive. a. True b. False
ANSWER: True
176. Through technology assessment, managers try to foresee the effects of new products and processes on the firm's operations and on society. a. True b. False
ANSWER: True
177. The three major components of sociocultural forces are demographic and diversity characteristics, cultural values, and consumerism. a. True b. False
ANSWER: True
180. An increasingly diverse cultural base in the United States means that marketers face increasingly diverse consumer markets. a. True b. False
ANSWER: True
185. To achieve their objectives, consumer advocates write letters to companies, lobby government agencies, broadcast public service announcements, and boycott companies whose actions they deem irresponsible. a. True b. False
ANSWER: True
82. Single people have quite different spending patterns than couples and families with children. They spend more heavily on convenience foods, restaurants, travel, entertainment, and recreation. a. True b. False
ANSWER: True
113. 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 a. African-Americans, Hispanics, and Caucasians. b. Asians, African-Americans, and Caucasians. c. Asians, African-Americans, and Hispanics. d. African-Americans, Native American Indians, and Caucasians. e. Hispanics, Native-American Indians, and Caucasians.
a. African-Americans, Hispanics, and Caucasians.
198. The following are some predictions from Smithsonian Magazine regarding the future sociocultural dynamics in the world: 1. The United States population will expand by 100 million. 2. The portion of the population that is currently at least 65 years old is expected to increase from 13 percent to 20 percent by 2050 in America. 3. By 2050, the working age group of people between 15 and 64 years old is expected to grow by 42 percent in the United States, but decline by 10 percent in China, 25 percent in Europe, 30 percent in South Korea and 40 percent in Japan. With respect to these predictions, which one of the following statements is true? a. All of these predictions refer to population demographic characteristics. b. By 2050, the United States will have proportionately less workers in its population than Japan will have. c. If these predictions come true, the average age of the populations of Japan and South Korea will be lower than the United States. d. If these predictions come true, there will be less of a strain on environmental resources in the years to come. e. Based on these predictions, it is expected that the average age of the population in the United States will be lower in 2050 than it is today.
a. All of these predictions refer to population demographic characteristics.
90. After several children became ill while playing with toys imported from outside the U.S., medical researchers found several illegal chemicals, including lead in the paint. These toys were sold primarily through websites on the Internet. Which of the following agencies would most likely have jurisdiction over the problem with lead in the paint of children's toys? a. Consumer Product Safety Commission b. Children's Online Protection Act c. Food and Drug Administration d. Environmental Protection Agency e. National Advertising Review Board
a. Consumer Product Safety Commission
36. Companies delivering mixed concrete know that it 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? a. Monopoly b. Oligopoly c. Monopolistic competition d. Pure competition e. Monopsony
a. Monopoly
192. The Center for Responsive Politics publishes data about dollars spent on lobbying efforts by major companies, industries and other entities seeking to influence Congressional legislation and the political process. The table below lists the industries that spent the most money on lobbying activities in 2011 and 2013: Lobbying Industry 2011 Spending 2013 Spending Pharmaceuticals/Health Products $241,168,770 $226,114,456 Insurance $158,404,505 $153,235,759 Oil & Gas $150,771,677 $144,878,531 Computers/Internet $126,827,796 $141,226,592 Electric Utilities $145,610,040 $129,882,034 TV/Movies/Music $123,061,396 $118,336,958 Business Associations $106,490,640 $108,518,903 Securities & Investment $104,689,226 $98,342,423 Misc. Manufacturing & Distributing $118,520,754 $96,970,399 Hospitals/Nursing Homes $98,480,316 $91,879,521 Health Professionals $82,641,177 $85,003,284 According to this data, which one of the following statements is true? a. Most of the top industries spent less on lobbying activities in 2013 compared to 2011. b. Most of the top industries spent more on lobbying activities in 2013 compared to 2011. c. The Computers/Internet and the Insurance industries both increased spending on lobbying activities from 2011 to 2013. d. Hospitals and nursing homes spent more on lobbying activities in 2013 than in 2011. e. Health professionals spent more on lobbying activities in 2011 than 2013.
a. Most of the top industries spent less on lobbying activities in 2013 compared to 2011.
194. Although the monopoly is one of the four major market structures that theoretically exists in a free market capitalist system, the reality is there are very few true monopolies in the economy. This is the result of many federal laws and regulations that have been passed to limit the creation and power of monopolies. Which one of the following federal laws was passed to prevent the creation of monopolies in the economy? a. Sherman Act of 1890 b. Securities Act of 1933 c. Sarbanes-Oxley Act of 2002 d. Wheeler-Lea Act of 1938 e. Lanham Act of 1946
a. Sherman Act of 1890
150. Wealth enables consumers to gain buying power. a. True b. False
a. True
108. Which of the following is the best example of utilizing technology to improve consumer relationships? a. Waiters recording orders on handheld computers b. Surveying customers to determine their needs c. Responding to changes in competitors' prices d. Introducing stringent package standards e. Requiring dolphin-safe tuna
a. Waiters recording orders on handheld computers
111. 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 a. demographics. b. cultural values. c. income levels. d. consumerism. e. subcultures.
a. demographics.
17. SiriusXM Radio is concerned about how the increasing use of smart phones will affect the future sales of its satellite radio service. The company decides to gather information about the changing trends in music access and delivery to prepare for this trend. Sirius XM's process is called a. environmental scanning. b. target marketing. c. surveying. d. environmental analysis. e. dynamic responsiveness.
a. environmental scanning.
16. In 2009 the Coca-Cola Company introduced the "Freestyler," a new free-standing soda dispensers where consumers can chose from over 120 different types of soda and customize their drink. Freestylers would take the place of typical dispensers where there are only a few different types of soda brands available. In order to develop the new dispenser, Coca-Cola collected information on the soda-drinking habits of individuals in several different age groups, as well as information about new technologies for dispensing liquids from vending machines and the sales of its "fountain" syrup for national restaurant chains to use in their soda machines. Coca-Cola's collection of this information is an example of _____ while the assessment of its impact on the potential for the new "Freestyler" is an example of _________ a. environmental scanning; environmental analysis b. an environmental force; environmental scanning c. environmental analysis; environmental strategy d. strategizing; environmental scanning e. strategic management; environmental scanning
a. environmental scanning; environmental analysis
33. 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. a. generic b. product c. total budget d. oligopolistic e. pure
a. generic
82. Procompetitive laws are those designed to a. preserve competition. b. protect the consumer. c. ensure product safety. d. reduce competition. e. limit business lobbying of government officials.
a. preserve competition.
46. Changes Salon is part of the hair and personal care service industry. In what type of competitive environment is Changes Salon most likely operating? a. pure competition. b. a monopoly. c. monopolistic competition. d. oligopolistic competition. e. an oligopoly.
a. pure competition.
107. The broad nature of technology as it moves through society is referred to as a. reach. b. dynamics. c. environment d. self-sustaining. e. impact.
a. reach.
25. Marketers who view political forces as being beyond their control are taking a(n) ____ response toward these forces. a. reactive b. aggressive c. proactive d. competitive e. liberal
a. reactive
101. 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? a. Firms must strictly abide by the rulings of self-regulatory agencies. b. Establishment and implementation are usually less expensive. c. They have better tools to enforce their rulings. d. Guidelines are often stricter and create greater compliance from firms. e. Money is very rarely an issue in enforcing decisions of self-regulatory agencies.
b. Establishment and implementation are usually less expensive.
132. Product competitors provide very different products that solve the same problem or satisfy the same basic customer need. a. True b. False
b. False
126. Scenario 3.2 Use the following to answer the questions. Clayton Homes, a mobile home manufacturer since 1934, introduced its new i-House in 2007. The i-House is one of the first of its kind, designed as an updated, modern version of the modular home, offered as a base home plus add-ons known as "pods." The base home is a one-bedroom, one-bath 734-square foot version at a price of around $80,000. There is also a 1,000 square-foot version for around $100,000. All versions may add on the additional one-room pods as desired which are shipped to your location and constructed on-site. The homes offer galvanized metal roofing, corrugated steel siding, VOC-free paints, and a "butterfly" roof that collects rainwater. The i-House uses 30% less energy than a similar square-foot home and offers "green" characteristics of solar panels, tankless water heaters, and low-flow faucets. In addition, it comes with bamboo flooring, a renewable resource. The modular, pre-fabricated design offers endless options for creating the customer's home and its engineered building system cuts down on construction waste. Due to the "green effects" of the i-House, the state governments have given it a tax abatement for any sales taxes. Refer to Scenario 3.2. Clayton Homes is revising its marketing strategy for the i-House due to the recent recession. Which of the following is the best action for promoting the i-House in the near future? a. Emphasize the value of the i-House products. b. Focus on the "green" qualities of the home and target environmentally-conscious individuals. c. Significantly reduce advertising expenditures to create an exclusive image. d. Decrease production until the economy improves. e. Significantly reduce the prices on the company's product offerings.
b. Focus on the "green" qualities of the home and target environmentally-conscious individuals.
193. Your company is planning to increase its political influencing activities in the next fiscal year in an attempt to shape upcoming, key legislation in your favor. Which of the following steps should you consider to accomplish this goal? a. Hire a public relations firm to help create a more youthful image for your company. b. Form your own Political Action Committee (PAC). c. Decrease your contributions to the political campaigns of key legislators. d. Close your company's legislative affairs office in Washington D.C. e. Cancel your company's membership in the U.S. Chamber of Commerce.
b. Form your own Political Action Committee (PAC).
28. ____ competitors provide very different products that satisfy the same basic customer need. a. Brand b. Generic c. Total budget d. Product e. Marketing
b. Generic
103. What national self-regulatory organization screens ads? a. Federal Advertising Review Division b. National Advertising Review Board c. Federal Communications Commission d. Consumer Federation of America e. Better Business Bureau
b. National Advertising Review Board
55. During which stage of the business cycle is unemployment low and total income relatively high? a. Repression b. Prosperity c. Recovery d. Recession e. Depression
b. Prosperity
189. As input for a presentation that you are jointly authoring, one of your marketing analysts submitted the following summary of the characteristics of the four different types of market structures companies compete in: Competitive Structure Number of Competitors Market Barriers to Entry Monopolistic Competition Unlimited No Barriers Monopoly Few Some Barriers Pure Competition Many Few Barriers Oligopoly One Many Barriers With respect to the classifications of number of competitors and barriers to entry, which one of the following statements is correct? a. The monopolistic competition structure is properly classified. b. The monopoly and oligopoly structures' classifications should be reversed. c. The monopoly structure is properly classified. d. The oligopoly structure is properly classified. e. The pure competition and oligopoly structures are properly classified.
b. The monopoly and oligopoly structures' classifications should be reversed.
197. Marketers live in a world of constant change, and their ability to adapt to the pace of change will dictate the degree to which their marketing strategies are successful. Moreover, the changes can come in any or all of the different parts of the marketing environment. Which one of the following statements is true? a. The self-sustaining nature of technology relates to the fact that the products are increasingly being produced with environment-friendly components. b. The negative effects of technology include concerns over privacy and intellectual property protection. c. Consumers' use of mobile devices to access the Internet has been declining over the last few years. d. Technological innovations are created only by private companies. e. We can expect the pace of technological change to slow down as more technology-oriented startups choose to go public and become more conservative with their business strategies.
b. The negative effects of technology include concerns over privacy and intellectual property protection.
116. In addition to the proliferation of new organic brands many conventional marketers have introduced organic versions of their products, including Orville Redenbacher, Heinz, and even Walmart. These firms are responding to changes in a. federal law. b. cultural values. c. demographics. d. consumerism. e. technological forces.
b. cultural values.
120. Scenario 3.1 Use the following to answer the questions. 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. The financial director asked the marketing department if they knew what the Soljur skateboards cost at competing sporting goods stores, to see if they too were likely hit with a higher cost. The marketing department found that the Soljur skateboards were priced at $15 less in the competing store than at Meyers. The financial director found that Soljur Sports was selling a similar number of skateboards to one of Meyers' competitors for $10 less per skateboard. The attorney for Meyers' Sporting Goods immediately filed a complaint with the Federal Trade Commission. Refer to Scenario 3.1. 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 a. issue a cease-and-desist order. b. issue a complaint stating that the business is in violation of the law. c. seek a monetary penalty. d. issue negative publicity about the company. e. contact the sporting goods manufacturers association
b. issue a complaint stating that the business is in violation of the law.
50. The two least common competitive structures are a. monopolies and oligopolies. b. pure competition and monopolies. c. monopolistic competition and monopolies. d. pure competition and no competition. e. oligopolies and pure competition.
b. pure competition and monopolies.
24. While Silk Soymilk engages in environmental scanning and analysis, the company is more likely to change its products and marketing strategies to adapt to environmental forces rather than trying to influence these forces. Silk Soymilk has a(n) ____ approach to marketing environmental forces. a. inactive b. reactive c. proactive d. negative e. variable
b. reactive
87. The Children's Online Privacy Protection Act prohibits websites and Internet providers from a. selling products to children under the age of 18 b. seeking personal information from children under the age of 13 c. selling products to children under the age of 12 d. doing research about the buying habits of children under 15 e. selling products to children under the age of 15
b. seeking personal information from children under the age of 13
61. The strength of a person's "buying power" depends on economic conditions and a. level of income. b. size of resources that can be traded in an exchange. c. how much a consumer will buy. d. a consumer's spending pattern. e. levels of median wealth.
b. size of resources that can be traded in an exchange.
104. Technology is a. the application of scientific knowledge to build products that customers desire. b. the application of knowledge and tools to solve problems and perform tasks more efficiently. c. applied sciences. d. one of the weakest marketing environment forces. e. the result of research performed primarily by universities.
b. the application of knowledge and tools to solve problems and perform tasks more efficiently.
109. Technology assessment is a. measuring how much technology has been incorporated into an organization. b. trying to foresee the effects of new products and processes on the firm's operation and on society in general. c. assessing how much technology one wants to incorporate into a company in the future. d. judging how a firm's products affect society. e. weighing the cost of new technology to determine whether a firm can afford to use it.
b. trying to foresee the effects of new products and processes on the firm's operation and on society in general.
74. Shelby's new job with the federal government provides a comfortable income and a fairly stable income. She would like to buy a new car now that she has a job; however, Shelby hesitates to purchase a new car because she is concerned about how poor economic conditions may affect her position in the future. Shelby lacks a. disposable income. b. willingness to spend. c. buying power. d. credit. e. discretionary income.
b. willingness to spend.
188. Your marketing team has started the analysis of your company's marketing environment. Competition has been very intense in recent years in your industry, so you decide to place more emphasis on analyzing the competitive forces in your industry. You group your competitors into the four types that a firm normally faces. In general, which one of the four types of competitors do you think will be the most formidable for your company? a. Total Budget Competitors b. Features-Oriented Competitors c. Brand Competitors d. Generic Competitors e. Product Competitors
c. Brand Competitors
92. Which of the following agencies regulates marketing activities the most? a. Environmental Protection Agency b. Food and Drug Administration c. Federal Trade Commission d. Better Business Bureau e. National Advertising Review Board
c. Federal Trade Commission
88. Which of the following are the most frequently sentenced organizational crimes? a. False advertising and price discrimination b. Price discrimination and fraud c. Fraud and antitrust violations d. Price fixing and antitrust violations e. Fraud and price fixing
c. Fraud and antitrust violations
122. Scenario 3.1 Use the following to answer the questions. 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. The financial director asked the marketing department if they knew what the Soljur skateboards cost at competing sporting goods stores, to see if they too were likely hit with a higher cost. The marketing department found that the Soljur skateboards were priced at $15 less in the competing store than at Meyers. The financial director found that Soljur Sports was selling a similar number of skateboards to one of Meyers' competitors for $10 less per skateboard. The attorney for Meyers' Sporting Goods immediately filed a complaint with the Federal Trade Commission. Refer to Scenario 3.1. 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? a. Issue a cease-and-desist order. b. Seek a $10,000 monetary penalty. c. Issue a warning to consumers through the local newspaper. d. Order Meyers to make restitution. e. Seek a $5,000 monetary penalty.
c. Issue a warning to consumers through the local newspaper.
119. Scenario 3.1 Use the following to answer the questions. 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. The financial director asked the marketing department if they knew what the Soljur skateboards cost at competing sporting goods stores, to see if they too were likely hit with a higher cost. The marketing department found that the Soljur skateboards were priced at $15 less in the competing store than at Meyers. The financial director found that Soljur Sports was selling a similar number of skateboards to one of Meyers' competitors for $10 less per skateboard. The attorney for Meyers' Sporting Goods immediately filed a complaint with the Federal Trade Commission. Refer to Scenario 3.1. 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? a. Sherman Antitrust b. Wheeler-Lee c. Robinson-Patman d. Celler-Kefauver e. Consumer Goods Pricing
c. Robinson-Patman
195. The U.S. government has implemented a number of laws over the years to ensure the U.S. economy remains fair, competitive and free of monopolies. One such law has the following characteristics: • It is also a criminal law, and individuals and businesses that violate it may be prosecuted by the Department of Justice. • It imposes criminal penalties of up to $100 million for a corporation and $1 million for an individual. • It doesn't clearly prohibit mergers or interlocking directorates. • It outlaws "every contract, combination, or conspiracy in restraint of trade." Which of the following laws is described by the characteristics described above? a. The Hart-Scott-Rodino Act b. The Clayton Act c. The Sherman Act d. The Robinson-Patman Act e. The Federal Trade Commission (FTC) Act
c. The Sherman Act
127. Scenario 3.2 Use the following to answer the questions. Clayton Homes, a mobile home manufacturer since 1934, introduced its new i-House in 2007. The i-House is one of the first of its kind, designed as an updated, modern version of the modular home, offered as a base home plus add-ons known as "pods." The base home is a one-bedroom, one-bath 734-square foot version at a price of around $80,000. There is also a 1,000 square-foot version for around $100,000. All versions may add on the additional one-room pods as desired which are shipped to your location and constructed on-site. The homes offer galvanized metal roofing, corrugated steel siding, VOC-free paints, and a "butterfly" roof that collects rainwater. The i-House uses 30% less energy than a similar square-foot home and offers "green" characteristics of solar panels, tankless water heaters, and low-flow faucets. In addition, it comes with bamboo flooring, a renewable resource. The modular, pre-fabricated design offers endless options for creating the customer's home and its engineered building system cuts down on construction waste. Due to the "green effects" of the i-House, the state governments have given it a tax abatement for any sales taxes. Refer to Scenario 3.2. The income a consumer would use to purchase an i-House is considered ____ income. a. discretionary b. buying power c. disposable d. consumer spending e. comprehensive spending
c. disposable
13. Collecting information from secondary sources such as business, government, trade, and general-interest publications plays an important role in a. environmental analysis. b. competitive forces. c. environmental scanning. d. procompetitive legislation. e. self-regulatory forces.
c. environmental scanning.
71. By offering both credit and financing through its GMAC division, General Motors is trying to help consumers a. expand future buying power at the expense of current buying power. b. expand disposable income at the expense of discretionary income. c. expand current buying power at the expense of future buying power. d. expand both disposable income and wealth. e. decrease both disposable and discretionary income.
c. expand current buying power at the expense of future buying power.
48. 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 a. a monopoly. b. an oligopoly. c. monopolistic competition. d. pure competition. e. faceted competition.
c. monopolistic competition.
86. Consumer protection legislation deals with all of the following legal concerns except a. consumer safety. b. sale of hazardous products. c. monopolistic practices. d. information disclosure. e. health claims on food packages.
c. monopolistic practices.
60. Consumer confidence and willingness to spend begins to increase during periods of ____, and marketers must remain very flexible to make the necessary adjustments. a. depression b. prosperity c. recovery d. growth e. recession
c. recovery
121. Scenario 3.1 Use the following to answer the questions. 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. The financial director asked the marketing department if they knew what the Soljur skateboards cost at competing sporting goods stores, to see if they too were likely hit with a higher cost. The marketing department found that the Soljur skateboards were priced at $15 less in the competing store than at Meyers. The financial director found that Soljur Sports was selling a similar number of skateboards to one of Meyers' competitors for $10 less per skateboard. The attorney for Meyers' Sporting Goods immediately filed a complaint with the Federal Trade Commission. Refer to Scenario 3.1. 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? a. Federal Advertising Commission b. National Advertising Review Board c. Consumer Product Safety Commission d. Better Business Bureau e. Office of Consumer Affairs
d. Better Business Bureau
97. Jared Bledsoe hired Green Gardens, a local landscape firm to plant trees and shrubs in his front yard. The landscape is beautiful when the company is done; however, in just a few days many of the plants begin to die. When Jared complained to the manager of Green Gardens, the manager says that Jared must have done something to them that caused the plants to die, such as overwatering them. Green Gardens doesn't have any money-back guarantees. Jared is angry that he can't get a refund or replacement. At this time, Jared's best course of action would be to contact the a. local Chamber of Commerce. b. Federal Trade Commission. c. Sherman Commission. d. Better Business Bureau. e. local Small Claims Court.
d. Better Business Bureau.
186. At the beginning of each of your marketing strategy team meetings, each team member gives a presentation on the current status of a key force in your company's marketing environment. The following brief presentations were given by your team members: 1. John's presentation focused on the competitive forces in your industry. 2. Karen's presentation focused on the internal dynamics in your company. 3. Brandon's presentation focused on the political events emanating from Washington D.C. 4. Susan's presentation focused on what is driving the technology changes happening in the country. 5. Beverly's presentation focused on the most recent economic projections issued by the Federal Reserve Bank of New York. After reviewing the presentations, you can conclude that a. Beverly spoke about the economic forces and Karen spoke about the political forces in the marketing environment. b. Brandon spoke about the sociocultural forces and Susan spoke about the technological forces in the marketing environment. c. John spoke about the competitive forces and Karen spoke about the political forces in the marketing environment. d. Beverly spoke about the economic forces and Susan spoke about the technological forces in the marketing environment. e. Karen spoke about the political forces and Brandon spoke about the legal and regulatory forces in the marketing environment.
d. Beverly spoke about the economic forces and Susan spoke about the technological forces in the marketing environment.
68. Lindsay was reviewing her bank statement for last month. She had paid her rent, her car payment, electric and phone bills, and made three trips to the grocery. Lindsay had also bought tickets to a Katy Perry concert and new clothes to wear to the concert. The money spent on Lindsay's rent, car, electric and phone bills was likely from her ____ , while the money spent on the concert tickets and new clothes was from her _____. a. Disposable income; savings b. Gross income; disposable income c. Disposable income; net income d. Disposable income; discretionary income e. Gross income; Savings income
d. Disposable income; discretionary income
187. Your company makes highly sophisticated components for military equipment. The U.S. Department of Defense is your largest customer. In recent years, you have expanded your customer base to include the militaries of all the major countries in the world. The following headlines appeared in the Sunday NYC Times newspaper recently: 1. "The Federal Reserve Board Chairman Sees Economic Growth Accelerating in the Third Quarter." 2. "Congressional Republicans and Democrats Fail to Reach Compromise on the New Immigration Bill." 3. "The Average Teen Spends Two Hours Per Day on Social Media Sites." 4. "State Department Considers Imposing New Sanctions on Exports of Sensitive Military Technology." 5. "Unemployment Rate Falls to 6.2%." Which one of the following statements is true regarding these headlines? a. All of the headlines should be categorized as economic forces when analyzing the company's marketing environment. b. All of the headlines should be categorized as political forces when analyzing the company's marketing environment. c. Headline #5 should be categorized as a sociocultural force in the company's marketing environment. d. Headline #4 should be categorized as a legal and regulatory force in the company's marketing environment. e. All of the headlines should be categorized as geopolitical forces in the company's marketing environment.
d. Headline #4 should be categorized as a legal and regulatory force in the company's marketing environment.
62. Why are marketers interested in consumers' levels of disposable income? a. It accurately predicts future buying power. b. It increases current buying power. c. It is what is left after taxes and savings to buy luxuries with. d. It is a ready source of buying power. e. It is essential for forecasting future business trends.
d. It is a ready source of buying power.
81. Which of the following provides protection for and regulates brand names, brand marks, trade names, and trademarks? a. Sherman Antitrust Act b. Clayton Act c. Robinson-Patman Act d. Lanham Act e. Celler-Kefauver Act
d. Lanham Act
190. A marketing analyst on your team obtained the following historical economic data from the Federal Reserve Bank of St. Louis for use in your marketing environment analysis: Month Civilian Unemployment Rate Real Personal Consumption Expenditures (Billions) December 2011 8.5% 10372.1 June 2012 8.2% 10493.6 December 2012 7.9% 10602.4 June 2013 7.5% 10707.1 December 2013 6.7% 10844.3 Based on the data, which of the following statements about these economic forces in your marketing environment is true? a. Our customers likely had less buying power in December 2012 than they had in December 2011. b. The data suggests that our customers' buying power has been decreasing since before June 2012. c. The data suggests that our customers' buying power did not start increasing until December 2012. d. Our customers likely had more buying power in June 2013 compared to June 2012. e. Our customers likely found it easier to find jobs in December 2011 than in December 2013.
d. Our customers likely had more buying power in June 2013 compared to June 2012.
29. ____ competitors are those that compete in the same product class, but their products have different features, benefits, and prices. a. Total budget b. Generic c. Brand d. Product e. Price
d. Product
124. Scenario 3.2 Use the following to answer the questions. Clayton Homes, a mobile home manufacturer since 1934, introduced its new i-House in 2007. The i-House is one of the first of its kind, designed as an updated, modern version of the modular home, offered as a base home plus add-ons known as "pods." The base home is a one-bedroom, one-bath 734-square foot version at a price of around $80,000. There is also a 1,000 square-foot version for around $100,000. All versions may add on the additional one-room pods as desired which are shipped to your location and constructed on-site. The homes offer galvanized metal roofing, corrugated steel siding, VOC-free paints, and a "butterfly" roof that collects rainwater. The i-House uses 30% less energy than a similar square-foot home and offers "green" characteristics of solar panels, tankless water heaters, and low-flow faucets. In addition, it comes with bamboo flooring, a renewable resource. The modular, pre-fabricated design offers endless options for creating the customer's home and its engineered building system cuts down on construction waste. Due to the "green effects" of the i-House, the state governments have given it a tax abatement for any sales taxes. Refer to Scenario 3.2. In what type of competitive structure is Clayton Homes most likely operating? a. Monopoly b. Oligopoly c. Monopolistic competition d. Pure competition e. Monopsony
d. Pure competition
199. Based on data from the Federal Reserve Bank of St. Louis, the Civilian Labor Force Participation Rates for men and women in the United States are as follows: Demographic Group Month Participation Rate (Percent of Group) Men May 2014 69.2 Women 57.1 Men May 2004 72.9 Women 59.1 Men May 1994 74.8 Women 58.7 With respect to this data, which one of the following statements is true? a. The labor participation rate of men in the United States impacts the marketing environment, and it is increasing faster than the rate for women. b. The labor participation rate for women impacts the marketing environment, and it has been less stable over the last 20 years than the rate for men. c. In terms of proportions, fewer women were working in May 2004 compared to May 2014. d. The labor participation rate is an economic force that impacts the marketing environment. e. The labor participation rate is a political force that impacts the marketing environment.
d. The labor participation rate is an economic force that impacts the marketing environment.
115. The Classic Hotel Group has begun to offer entire floors of rooms in its hotels that are smoke-free, adults-only, and pet-friendly. The Classic Hotel Group is responding to changes in a. customer demands. b. the legal environment. c. demographics. d. cultural values. e. cultural diversity.
d. cultural values.
51. The best approach for a company to take when monitoring its competitors is a. watching for increases and decreases in competitors' prices and match them. b. analyzing all information that is readily available about competitors. c. sending employees to competitors' offices and factories to observe their actions. d. developing a system for gathering ongoing information about competitors. e. reading important business publications such as The Wall Street Journal.
d. developing a system for gathering ongoing information about competitors.
85. The 1990 Nutrition Labeling and Education Act directly prohibits a. exaggerated claims made by health and fitness products. b. putting the words "cholesterol-free" on any food package. c. putting nutritional information on most food products. d. exaggerated health claims on food packages. e. the use of any health claim on food packaging.
d. exaggerated health claims on food packages.
78. Which of the following actions is illegal? a. Political officials influencing how much a government agency purchases and from whom. b. Corporate contributions to candidates. c. Corporate contributions to elected officials. d. Political officials helping businesses secure foreign markets. e. Paying political officials not to enforce a particular law.
e. Paying political officials not to enforce a particular law.
75. 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? a. Sociocultural b. Technological c. Competitive d. Economic e. Political
e. Political
49. In general, which of the following competitive structures is an organization least likely to operate? a. Monopoly b. Monopolistic competition c. Oligopoly d. Elastic competition e. Pure competition
e. Pure competition
83. International Office Supplies Wholesaler charges different prices to its various customers without any legal justification. This company is in violation of the a. Sherman Antitrust Act. b. Wheeler-Lea Act. c. Lanham Act. d. Federal Trade Commission Act. e. Robinson-Patman Act.
e. Robinson-Patman Act.
106. While playing soccer, Bryan suddenly fell and broke his arm. Needing to get to the hospital, he was not only interested in the nearest location, but also the shortest emergency room wait time. He remembered seeing a billboard for The Cleveland Clinic promoting their time-text service where he could call the number GET-TXT-TIME and they would text him the approximate waiting time at the closest three hospital locations. The Cleveland Clinic is providing enhanced service to its patients by capitalizing on which environmental force? a. Economic b. Competitive c. Political d. Legal and regulatory e. Technological
e. Technological
93. Which of the following industries is most commonly regulated by state regulatory agencies? a. Automobile manufacturers b. Cigarette producers c. Clothing manufacturers d. Television networks e. Utility companies
e. Utility companies
102. 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? a. Lead a consumer boycott of the business. b. Sue the chief executive of the business. c. Impose fines on the owners/managers of the business. d. Support legal ordinances against the business. e. Warn consumers of the unfair practices.
e. Warn consumers of the unfair practices.
73. Which of the following terms refers to consumers' propensity to buy? a. Disposable income b. Discretionary income c. Buying power index d. Buying power e. Willingness to spend
e. Willingness to spend
19. 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 a. scanning. b. forces. c. management. d. manipulation. e. analysis.
e. analysis.
118. A group of protesters carries signs encouraging people to boycott The Farmer's Market, a small grocery store in an urban area. The protesters claim that Farmer's takes unfair advantage of elderly and minority consumers by charging them as much as 20% higher prices than other locations in the suburbs. This protest is part of what we see today as the a. cultural diversity movement. b. civil rights movement. c. urban unrest cycle. d. procompetitive movement. e. consumerism movement.
e. consumerism movement.
59. Consumer confidence is at a low during periods of a. recession. b. prosperity. c. recovery. d. slowdown. e. depression.
e. depression.
123. Scenario 3.2 Use the following to answer the questions. Clayton Homes, a mobile home manufacturer since 1934, introduced its new i-House in 2007. The i-House is one of the first of its kind, designed as an updated, modern version of the modular home, offered as a base home plus add-ons known as "pods." The base home is a one-bedroom, one-bath 734-square foot version at a price of around $80,000. There is also a 1,000 square-foot version for around $100,000. All versions may add on the additional one-room pods as desired which are shipped to your location and constructed on-site. The homes offer galvanized metal roofing, corrugated steel siding, VOC-free paints, and a "butterfly" roof that collects rainwater. The i-House uses 30% less energy than a similar square-foot home and offers "green" characteristics of solar panels, tankless water heaters, and low-flow faucets. In addition, it comes with bamboo flooring, a renewable resource. The modular, pre-fabricated design offers endless options for creating the customer's home and its engineered building system cuts down on construction waste. Due to the "green effects" of the i-House, the state governments have given it a tax abatement for any sales taxes. Refer to Scenario 3.2. The new Clayton Homes i-House product is a reflection of the company's attention to ____ in developing its strategy. a. marketing research analysis b. self-regulatory analysis c. consumer behavior analysis. d. marketing information processing. e. environmental scanning and analysis.
e. environmental scanning and analysis.
72. When using credit to make purchases, consumers are a. decreasing current buying power and increasing future buying power. b. increasing their present discretionary income to extend purchasing power. c. putting themselves at significant risk of financial disaster. d. forgoing the accumulation of wealth to increase current income. e. increasing current buying power at the expense of future buying power.
e. increasing current buying power at the expense of future buying power.
44. 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. a. oligopoly b. monopoly c. pure competition d. oligopolistic competition e. monopolistic competition
e. monopolistic competition
22. Marketers who attempt to influence and change the various environmental forces have a(n) ____ response to these forces. a. reactive b. inactive c. variable d. positive e. proactive
e. proactive
