MKTG 321 Exam I

If you would have invested $10,000 in Starbucks in the beginning, how much would it be worth today?

$5 million

monopoly

1 competitor many market entry barriers almost no substitutes - sole source of supply (water utilities)

business cycle

4-stage pattern of economic fluctuation

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

African-Americans, Hispanics, and Caucasians.

BBB

Better Business Bureau best-known self-regulatory group system of nongovernmental, independent, local regulatory agencies supported by local businesses helps settle problems btwn customers and specific firms

Starbucks feels that its biggest market is ____________.

China

CFPB

Consumer Financial Protection Bureau Regulates offering & provision of consumer financial products Serves to protect consumers from deceptive financial practices

​There are a number of situational influences that impact the consumer's buying decision process. What is one of those influences?

Consumer's mood influences

Digital Millennium Copyright Act (1996)

Covers digital copyrighted material, music & movies

The Pillsbury company defines all individual consumers who are purchasers of flour as its target market. It also defines all businesses who purchase flour as its target market. What targeting strategy would be most appropriate in this case?

Differentiated

Ski Butternut offers its customers terrain parks, mid-week packages, financial incentives, training and races. To reach out to its target market, it is using a/an _____________________.

Differentiated targeting strategy

What is an advantage that self-regulatory agencies such as the BBB and the NARB have over governmental laws and regulatory agencies?

Establishment and implementation are usually less expensive.

cease-and-desist order

FTC enforcement tool court order to a business to stop engaging in an illegal practice

redress

FTC enforcement tool money paid to customer to settle complaint

consent decree

FTC enforcement tool order for a business to stop engaging in questionable activity to avoid persecution

FPC

Federal Power Commission regulates rates & sales of natural gas producers, affecting supply & price of consumer gas regulates wholesale rates for imported/exported/internal electricity & gas, pipeline construction

Subaru is producing a new seven-passenger van with all-wheel drive. What would be the best variables for segmenting the market for this new model?

Geographic location and family life cycle

Credit Card Act (2009)

Implements rules on credit card companies

Ski Butternut uses surveys to identify what types of families visit the mountain. Ski Butternut knows that its typical family has two children under the age of 18 with 1-2 parents who ski with the children. This information is an example of a ______________.

Market segment profile

NAD of BBB

National Advertising Division investigates deceptive advertising claims

NARB

National Advertising Review Board self-regulatory entity considers challenges to advertisement issues raised by NAD no official enforcement powers; publicity/complaints to FTC

Grant Turner makes an appointment to visit with a new dermatologist in town because of a recent bad sunburn. When he arrives at the dermatologist's office, Grant notices a foul odor in the air, worn floor coverings, cluttered rooms that have paint peeling from the walls, and poor lighting. However, the other patients in the waiting room were talking about how much they liked the doctor. While Grant viewed the dermatologist as competent, Grant decided not to visit him again even though the dermatologist recommended a follow-up. Which situational influences are most likely to have affected Grant's decision?

Physical surroundings

Foreign Corrupt Practices Act (1977)

Prohibits American companies from bribing foreign officials does allow for "grease" payments

Wheeler--Lea Act (1938)

Prohibits all unfair/deceptive practices Places food and drug advertising under FTC

NLEA (1990)

Prohibits exaggerated health claims Processed foods must have nutrition labels

Federal Trademark Dilution Act (1995)

Prohibits knockoffs

Celler-Kefauver Act (1950)

Prohibits mergers that would create a monopoly

Robinson--Patman Act (1936)

Prohibits vertical price discrimination

Consumer Goods Pricing Act (1975)

Prohibits vertical price fixing

Lanham Act (1946)

Protection & regulation of brand names, trademarks

Trademark Law Revision Act (1988)

Protects brands not yet introduced

Starbucks does not use the typical names for Small, Medium and Large sizes. Instead, it uses Italian names to influence people's attitudes of the product. This shows how Starbucks is capitalizing on __________ Influences in the Consumer Buying Decision Process to sell its coffee.

Psychological

Children's Online Privacy Protection Act (2000)

Regulates collection of info from children under 13

International Office Supplies Wholesaler charges different prices to its various customers without any legal justification. This company is in violation of the

Robinson-Patman Act

If all the gas stations in a city collaborated to determine what gas prices should be charged, they would be violating the

Sherman Antitrust Act

Which of the following buying situations is most consistent with routinized response behavior?

Stephanie buying bottled water

Citizens United v. FEC

Supreme Ct ruled govt not authorized to ban corporate spending in candidate elections

T or F: The U.S. Supreme Court ruled that the government is not authorized to ban corporate spending in candidate elections.

T

What about market segment profiles is true?

They are used to describe differences among people in different market segments.

What is a good example of utilizing technology to improve consumer relationships?

Waiters recording orders on handheld computers

Magnuson--Moss Warranty (FTC) Act (1975)

Warranty standards Allows FTC to prescribe rules concerning unfair/deceptive practices

wealth

accumulation of past income, natural resources, and financial resources

disposable income

after-tax income used for spending or saving

The tobacco industry in the United States is dominated by three large companies. When any one of these companies changes its price on tobacco products, the other two companies quickly adjust their prices to match it. From these characteristics, the tobacco industry could best be described as

an oligopoly

technology

application of knowledge & tools to solve problems and perform tasks more efficiently

Alli segments its diet pills based on those who have morning cravings, those who tend to overeat near the end of the day, those who need all day long appetite suppression, and those who want appetite control and more energy. This is an example of market segmentation based on variables of

behavior

If Ski Butternut decides to focus solely on the 1st time skier, it would be segmenting its consumer market using a _______________ variable.

behavioristic

The video describes its employees as people who wear flip flops and come to work riding bikes, commuter rails and walking. This description was used to portray Recycline's ____________.

brand identity

When selecting specific target markets, a firm should

choose the segments most in line with the firm's objectives and long-term growth.

The maximum percentage of market potential that an individual firm can expect to obtain for a specific product is the

company sales potential

total budget competitors

compete for limited resources of same customers (Coke & pack of gum)

If Georgia-Pacific, a producer of home siding, decking, and other wood products, focused its marketing efforts to home construction companies only, it would be using a(n) ____ strategy. If it sold the same products to both construction companies and DIY retailers such as Home Depot, it would be using a(n) ____ strategy.

concentrated; differentiated

In shopping for a new laptop computer for her master's degree program, Jocelyn has narrowed the alternatives to four brands. She is considering Dell, Toshiba, Sony, and Hewlett-Packard. These four brands make up Jocelyn's

consideration set

Ski Butternut states that its primary target market is young families. Therefore, Ski Butternut is using ______________ variables to segment its consumer markets

demographic

Segmentation variables are usually grouped into four categories:

demographic, geographic, psychographic, and behavioristic

Consumer confidence is at a low during periods of

depression

Interior Designs Inc. sells expensive custom-made draperies, bedding, and accessories through sales representatives who are also interior designers. It also has another, slightly less expensive line that it sells through stores such as Nordstrom's and Saks Fifth Avenue. Interior Designs Inc. is most likely using a(n) ____ targeting strategy.

differentiated

Mattel views the toy market as composed of four age groupings, each with different needs and desires. Mattel is using a(n) ____ targeting strategy for its groups, which are known as ___

differentiated; market segments.

Which of the following is the biggest drawback to using psychographic variables?

difficult to measure

Which of the following is how executives at Recycline describe the brand?

dirty, rough around the edges

discretionary income

disposable income left over after basic necessities are purchased

Mario and his friend have been talking about their love of Bose headphones and speakers. Mario's friend mentions a consumer report that he read the week before that stated Bose products had higher prices but lower quality than in previous years. Mario thought to himself that perhaps his friend had misread the report, because Bose had always been the best. This perceptual process is known as selective

distortion

The purpose of market segmentation is to

divide a total market to enable a marketer to develop a more precise marketing mix.

UK Bribery Act

does not allow for "grease" payments more encompassing than FCPA can be found guilty of bribery even if outside UK

Justin is purchasing his third car in the past five years. He has been a car enthusiast ever since he was a young boy. Justin likes to spend his free time looking at car magazines, going to car shows, and watching NASCAR. Justin's interest in cars is referred to as

enduring involvement

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?

environmental analysis

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

environmental scanning

Dodd--Frank Wall Street Reform and Consumer Protection Act (2010)

est. Bureau of Consumer Financial Protection promotes financial reform to increase accountability & transparency

FTC Act (1914)

est. FTC, gives investigatory powers

Telephone Consumer Protection Act (1991)

establishes solicitation avoidance procedures prohibits marketers from automated dialing system/prerecorded voice to certain lines

Jose and Teresa are searching for an apartment. They will most likely engage in which one of the following forms of decision making?

extended decision making

major source of cultural values

family

oligopoly

few competitors some market entry barriers homogenous or differentiated products (UPS, FedEx, USPS)

Evan has just been hired as a product manager for a major technology firm. Currently, he is making purchases for his new apartment and upcoming job. His purchase of _____ would most likely be done through extended decision making, while his purchase of ____ would be purchased through limited decision making behavior.

flat screen tv; bath towels

FTC civil penalties

for violating cease-and-desist order $10,000/day

Due to limited resources, a consumer decided to serve Hawaiian Punch to a New Year's Eve party crowd instead of Korbel champagne. As a result of this action, Korbel and Hawaiian Punch can be viewed as ____ competitors.

generic

Justin Franklin's company is interested in locating areas where the average income is high, the average age range is 25-35 years, and the lifestyles of the people involve extreme adventures and dangerous leisure activities. His company would most likely find possible markets through

geodemographic segmentation

Recycline is an example of a cultural value referred to as ___________.

green marketing

Most markets for products are made up of individuals or groups with diverse needs for products and are called ____ markets

heterogenous

recovery

high unemployment declines, tot. disposable income increases economic gloom subsides

willingness to spend decreases

if unsure about employment

willingness to spend

inclination to buy due to expected satisfaction from a product influenced by ability to buy & psycho-social forces

`major financial sources of buying power

income credit wealth

current demographic changes

increasing elderly increasing singles new baby boom despite declining birth rate increasing multicultural society

business market

individuals, organizations, or groups that purchase a specific kind of product for resale, direct use in producing other products, or use in general daily operations B2B/industrial/organizational

sociocultural forces

influences in a society & its culture(s) change people's attitudes, beliefs, norms, customs, lifestyle determine buying patterns

When Trevor realizes his liquor cabinet supply was devastated by last weekend's party, he first retrieves information from his memory about what types of liquor he and his friends like most and then asks the attractive clerk at the liquor store what she would recommend. Trevor started with a(n) ____ search and then progressed to a(n) ____ search.

internal; external

According to the video, what did Ski Butternut do to evaluate consumer behavior this year?

launched a new website

Jenny plans to buy a new swimsuit for her spring break cruise. She has not seen this year's styles and thus will do some comparison shopping before making a purchase decision. Jenny is engaging in

limited decision making

Kellogg's is introducing a new bran waffle for toasters. Television commercials will be a key element in communicating the benefits associated with this product. Based on that decision, Kellogg's is expecting consumers to engage in what form of decision making?

limited decision making

When a new variety of Kashi whole-grain breakfast cereals is first introduced, consumers will most likely engage in ____ when deciding whether or not to purchase this new product.

limited decision making

prosperity

low unemployment + high total income = high buying power

The four major competitive structures are

oligopolies, monopolies, monopolistic competition, and pure competition.

competition

organizations that market similar products or substitutes for one's own product in same area

consumerism

organized efforts by individuals, groups, and organizations to protect consumers' rights

Luis likes shopping at Stein Mart, a discount department store, because he likes the prices, products, and services the store provides. His selection of this store as a regular stop when shopping is influenced by ____ motives.

patronage

Maslow's hierarchy of needs refers to the five levels of needs that humans seek to satisfy, from most to least basic to survival. These needs, in order from most to least basic to survival are

physiological, safety, social, and esteem, self-actualization

Textile companies historically face issues concerning the use of child labor in foreign countries and the various regulations created concerning this labor. The type of marketing environment forces executives for these companies are most likely to try to influence are ____ forces.

political

Which marketing mix element does Starbucks manipulate to ensure Health Care to its employees?

price

When Julia goes to the first class of her Operations Management course, she finds out that in addition to the textbook she already purchased, she also needs a copy of the book The Goal. At which stage of the consumer buying decision process is Julia?

problem recognition

Stefanie is shopping for groceries at her local supermarket. As she picks up laundry detergent, she sees the display of bathroom cleaners and remembers that she is about to run out of it at home. Stefanie tries to remember the specific brand that she used last time, because she thought that was the best in terms of performance and value. In terms of the consumer buying decision process, Stefanie's remembering that she was almost out of bathroom cleaner is the ____ phase of the buying decision process, where trying to remember what brand she last used was an example of the _____ phase.

problem recognition; internal information search.

environmental analysis

process of assessing & interpreting info gathered via scanning

environmental scanning

process of collecting info about forces in mktg environment

Sherman Antitrust Act (1890)

prohibits restraint of trade & monopolizing

Clayton Act (1914)

prohibits specific anticompetitive practices that tend to create monopolies

depression

prolonged recession period of high unemployment, low wages minimum disposable income & lack of consumer confidence in economy

consumer market

purchasers & household members who intend to consume or benefit from the purchased products do not buy products to make profits B2C

FTC

regulates variety of business practices curbs false advertising, misleading pricing, deceptive packaging & labeling

buying power

resources that can be exchanged for other resources strength depends on economic conditions & size of resources

Which of the following consumer decision-making processes will probably be used in purchasing toothpaste?

routinized response behavior

When evaluating market segments, assessment of competitors is important because

sales estimates may cause a segment to appear to be lucrative, but there may be several competitors that together have a large share of that segment

product competitors

same product class but different product features/benefits/prices (Coke & bottled water)

Antonio is in the market for a new car. He believes that lately there have been more car ads than usual on TV. The need Antonio has is most likely driving which of the following phenomena?

selective exposure

The Pharmaceutical Research and Manufacturers of America sets guidelines for its member firms to follow regarding the use of unethical practices. Thus, it is engaging in

self-regulation

brand competitors

similar features & benefits to same customers @ similar prices most significant type of competitor (Coke & Pepsi)

Starbucks' decision to locate stores across the street from one another to decrease long lines is an example of how a company can alter _______________ Influences in the Consumer Buying Decision Process to better serve customers.

situational

Recycline is capitalizing on changes in the _________ Forces in the marketing environment to grow its business.

sociocultural

Do Not Call Implementation Act (2003)

streamlines FCC & FTC rules concerning telemarketing; Do Not Call Registry & call abandonment banned prerecorded sales pitches in 2008

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

technology assessment

income

the amount of money an individual receives through wages, rents, investments, pensions, and subsidy payments for a given period

the larger the family

the greater the willingness to spend

What was the first product offered by Recycline?

toothbrush

In today's marketing environment, competitors can take on many forms. For example, Diet Coke can be seen as a competitor to Wrigley's Double Mint chewing gum. In this circumstance, these two products are described as ____ competitors.

total budget

Walmart sells numerous products, including packaged food, produce, automotive maintenance services, eyeglasses, clothing, and toys. Walmart advertises itself as a store where "we save people money so they can live better," focusing on its low prices as the customer's most important need. Walmart's advertising appears to use a(n) _____ strategy to a market that is _____.

undifferentiated; homogeneous.

recession

unemployment rises, causing total buying power to decline & consumer pessimism to rise consumers become more price & value conscious (off-price retailers and dollar stores popular)

pure competition

unlimited competitors - too many for 1 to influence price no barriers to entry homogenous products (agricultural corn market)

generic competitors

very different products that satisfy same need (Coke and tap purifier)

willingness to spend increases

when people expect future increase in income/rising prices

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

willingness to spend

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

willingness to spend

The _____, of Coleman's social class categories, includes approximately 32 percent of the population, shops for best bargains, and buys sports and enjoys leisure activities like local travel and recreational parks.

working class

Your marketing team is having a brainstorming session to finalize your target marketing strategy. To make sure all team members are on the same page, you make the following statement to keep the discussions focused: If we determine that the needs of the customers we are targeting are ______________, then we need to pursue a _______________ targeting strategy.

​Homogeneous; Undifferentiated