Ch.3 The Global Environment (LearnSmart)

As noted in your text, the term "millennials" refers to individuals who were born between _______.

1978 and the late twentieth century

During the recession that began in December of 2007, Americans reduced their overall charitable giving by approximately _______% from levels prior to the recession.

20

A function of _______ is to lobby government officials to focus more closely on a particular issue, including some that impact marketing, such as restrictions on certain types of advertising or protecting consumers' rights.

a political action committee

Vince feels that his paycheck doesn't go as far as it used to. He used to be able to save money each month, but now finds that after he pays for food, gas, and housing he barely has any money left. Vince is experiencing _______.

a reduction in his purchasing power

The generation of children born between 1946 and 1964 are collectively referred to as _______.

baby boomers

Shifting income distribution offers marketers new opportunities to satisfy consumer demands at _______.

both higher and lower income levels

The six major external factors that influence the marketing environment of a firm are: economic, demographic, sociocultural, technological, legal and _______.

political

Which of the following countries has been criticized for undervaluing its currency, that is, pricing it lower than it is actually worth?

China

What are tariffs?

Tariffs are taxes on imports and exports between countries.

Regulations such as the Sherman Antitrust Act, the Robinson-Patman Act, and the Wheeler-Lea Act are all enforced by which agency?

The Federal Trade Commission

_______ was implemented on January 1, 1994 and affected tariffs on exports between the United States, Canada, and Mexico.

The North American Free Trade Agreement (NAFTA)

______________________ measures how optimistic consumers are about the overall state of the economy and their own personal finances.

Consumer confidence

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

Consumer ethnocentrism

The Dominican Republic-Central America Free Trade Agreement is an international agreement that eliminated tariffs, reduced nontariff barriers, and facilitated investment among _______, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic.

Costa Rica

Two-income families and single-parent households represent _____________ factors.

sociocultural

The International Monetary Fund (IMF)

Was formed to foster international trade, promote high employment, and promote currency exchange rate stability

Where is the International Monetary Fund (IMF) headquartered?

Washington, D.C.

The _______ has 162 members representing more than 97 percent of the world's population, and over 20 observer nations, most of which are seeking membership.

World Trade Organization

Gross domestic product (GDP) per capita is often considered an indicator of a country's _______.

standard of living

TLC Inc., a firm in Canada, exports accessories for gaming consoles to firms in the United States. Assume that the U.S. government imposes a tax on TLC Inc. based on the value of products being imported into the U.S.. The tax imposed by the government of the U.S. is called a(n) _______.

tariff

Palo and Clarita were walking downtown when Palo suddenly received an electronic coupon for an Italian restaurant that was located just up the street. This illustrates how _______ can change the way firms market to consumers.

technology

The marketing decisions of a firm are influenced by the fact that today, _______.

women take on the role of decision maker across a large, expanding variety of products

According to your text, what two items do baby boomers generally have more of when compared to other generational groups of people?

1. Money to spend, 2. Free time

According to your text, which three sources of funding do nonprofit organizations rely on the most?

1. Special events 2. Grants 3. Individual donations

Match direct and indirect competition to the appropriate scenarios. A. Apple's iPhone faces competition from Samsung's Galaxy edge smartphones. B. A local butcher shop faces competition from a store that sells only fresh produce.

A. Direct competition B. Indirect competition

Which of the following increases a nation's purchasing capability? A. Increase in the proportion of middle-income households of the nation B. Increase in the monopolizing power of all firms in the nation C. Decrease in the disposable incomes of consumers in the nation D. Decrease in the per capita gross domestic product (GDP) of the nation

A. Increase in the proportion of middle-income households of the nation

Which of the following is an outcome of shifting income distribution? A. It encourages marketers to modify their marketing strategies across income levels. B. It fails to influence customers' ability and willingness to buy products. C. It is almost always associated with high inflation. D. It forces marketers to concentrate only on the demands of higher-income consumers.

A. It encourages marketers to modify their marketing strategies across income levels.

Which of the following characterize millennials? (Check all that apply.) A. Marketers often try to reach Millennials by delivering their messages over the Internet. B. Millennials have the greatest familiarity with and use for digital communication and social media. C. Millennials are individuals born from the early twenty-first century to the present day. D. Millennials are retiring at a rate of 10,000 per day. E. Millennials comprise over 75 million members in the United States.

A. Marketers often try to reach Millennials by delivering their messages over the Internet. B. Millennials have the greatest familiarity with and use for digital communication and social media. E. Millennials comprise over 75 million members in the United States.

Which of the following statements regarding marketing is true? (Check all that apply.) A. Marketers should monitor developments outside a firm's control in order to detect and respond to threats and opportunities. B. Good marketers will continually engage in environmental scanning. C. Unforeseen developments external to a firm can directly impact the success of its marketing strategy. D. Marketers only need to engage in environmental scanning if they are promoting eco-friendly or "green" products. E. As a discipline, marketing is not affected by things that occur outside of the firm's control.

A. Marketers should monitor developments outside a firm's control in order to detect and respond to threats and opportunities. B. Good marketers will continually engage in environmental scanning. C. Unforeseen developments external to a firm can directly impact the success of its marketing strategy.

Of the external marketing factors listed in your text, which one is most likely at play if legislation is passed that will ban the sale of a product to certain age groups? A. Political B. Environmental C. Psychographic D. Sociocultural

A. Political

Which of the following is also known as the Advertising Act? A. The Wheeler-Lea Act (1938) B. The Sherman Antitrust Act (1890) C. Fair Packaging and Labeling Act (1966) D. Credit Card Accountability, E. Responsibility, and Disclosure Act (2009) E. he Robinson-Patman Act (1936)

A. The Wheeler-Lea Act (1938)

Aaliyah is displaying consumer ethnocentrism if she _______. A. buys products made in her home country and boycotts foreign-made products B. buys foreign-made premium products due to their high quality and durability C. is one of the most profitable and loyal customers of a foreign apparel store D. sells a product made in her home country under the pretext of conducting market research about the product

A. buys products made in her home country and boycotts foreign-made products

In the U.S today, which of the following has the highest average family income of all ethnic groups? A. Pacific Islanders B. Asian Americans C. African Americans D. Hispanic Americans E. European Americans

B. Asian Americans

Your text defines the European Union (EU) as what type of union? A. Non-trade union B. Economic union World regulatory union D. Monetary union E. Political union

B. Economic union D. Monetary union E. Political union

Which of the following is a reason offered by your text as to why educated consumers are prime targets for marketing strategies? A. Educated consumers feel a responsibility to contribute to the health of the economy and will spend money in order to do so. B. Educated consumers are likely to earn significantly more money throughout the course of their lifetime. C. Educated consumers typically have more access to various forms of media and are therefore easier to target. D. Educated consumers equate status with the amount of personal belongings and will therefore buy more than the average consumer.

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

Muzzen and Gray Horse are two competing stores that sell home appliances of the same brands. Muzzen exclusively targets consumers between the ages of 20 to 35. On the other hand, Gray Horse targets consumers between the ages of 50 to 60. Which of the following conclusions can be drawn from the scenario? A. Gray Horse is targeting individuals belonging to generation Y. B. Muzzen and Gray Horse are segmenting their customers based on demographics. C. Muzzen and Gray Horse are engaged in indirect competition. D. Muzzen and Gray Horse are segmenting their customers based on sociocultural factors. E. Muzzen is targeting individuals belonging to the generation of baby boomers.

B. Muzzen and Gray Horse are segmenting their customers based on demographics.

Because it receives a substantial portion of its funding from state legislatures, which of the following industries was hit particularly hard due to the recession that began in late 2007? A. Banking industry B. Public universities C. Hospitals D. Entertainment industry E. Auto manufacturing

B. Public universities

Identify the correct statement about the nonprofit marketing environment. A. Environmental scanning presents challenges for nonprofit firms that are always identical to the challenges faced by for-profit businesses. B. Social media gives nonprofit organizations substantial advantages when it comes to conducting charity campaigns. C. People who donate money to a nonprofit always walk away with a tangible product or benefit directly from a service. D. Nonprofit marketers never need to ask donors to support the mission of their organization.

B. Social media gives nonprofit organizations substantial advantages when it comes to conducting charity campaigns.

While shopping for a new computer, Jake uses an app on his cell phone to compare the price that various stores are charging for the computer he is interested in. What external factor affecting the marketing environment does this represent? A. Economic B. Technological C. Demographic D. Legal E. Sociocultural

B. Technological

Which of the following was created in 1945 and was instrumental in stabilizing the world's economic system following World War II? A. The North American Free Trade Agreement B. The International Monetary Fund C. The World Trade Organization D. The Dominican Republic-Central America Free Trade Agreement

B. The International Monetary Fund

Which of the following is a goal of the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA)? A. To introduce embargoes between the member states B. To eliminate tariffs and facilitate investment among the member states C. To eliminate foreign direct investment between the member states D. To introduce non-tariff trade barriers between the member states

B. To eliminate tariffs and facilitate investment among the member states

A marketer that utilizes social media to help a nonprofit organization secure funding and register volunteers is aware of the _______ factor that can impact marketing campaigns. A. sociocultural B. technological C. economic D. legal E. political

B. technological

The International Monetary Fund (IMF) _______. A. works to increase barriers to international trade B. was formed, in part, to promote currency exchange rate stability C. is the only global body dealing with the rules of trade between nations D. is headquartered in Geneva, Switzerland

B. was formed, in part, to promote currency exchange rate stability

Which generational cohort is retiring at a rate of 10,000 per day?

Baby boomers

Which of the following is a consequence of recession? A. A recession typically increases gross domestic product of a country. B. A recession typically increases customer confidence. C. A recession typically increases unemployment rates in a country. D. A recession typically increases consumers' ability and willingness to buy products.

C. A recession typically increases unemployment rates in a country.

Which of the following items represent sociocultural factors? (Check all that apply.) A. The government increases taxes on high income households. B. A government imposes import tariffs on products being sold in its country. C. Auto manufacturers have increased production of environmentally-friendly cars. D. A dentist office stays open until 8:00 p.m. to accommodate busy families.

C. Auto manufacturers have increased production of environmentally-friendly cars. D. A dentist office stays open until 8:00 p.m. to accommodate busy families.

Elana and her husband are planning a trip to Europe. Before they left, their travel agent told them that if they were planning on shopping they needed to know that the euro was worth $1.31 relative to the American dollar. What information was the travel agent relaying?

Currency exchange rate

Which of the following statements is true about the economic factors in a marketing environment? A. Typically, customer confidence increases when the purchasing power decreases. B. Gross domestic product per capita cannot indicate a country's standard of living. C. Inflation cannot impact marketing if prices rise faster than consumer incomes. D. Economic factors influence almost every marketing decision a firm makes. E. Political and legal issues fall within the economic factors affecting the marketing environment.

D. Economic factors influence almost every marketing decision a firm makes.

One goal of the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) is to _______. A. introduce more taxes that limit the entry of new firms into an industry B. introduce monetary tariffs on imports and exports C. increase barriers to cross-border investment D. reduce nontariff trade barriers

D. reduce nontariff trade barriers

_______ are characteristics of human populations, such as age, gender, ethnicity, and education level, that can be used to identify consumer markets.

Demographics

_______ competition refers to a situation in which products that perform the same function compete against each other in a market.

Direct

_____________ competition is also called brand competition or category competition.

Direct

______________ competition is at play when a store selling leather handbags competes against a store that sells jute handbags. On the other hand, _______________ competition is at play when a toy store that also sells bikes and sporting equipment competes against a sporting goods store.

Direct; indirect

_______ income is best defined as the amount of spending money available to households after paying taxes.

Disposable

Each month when Jason receives his paycheck, he sees the total amount of money he earned less the amount that was taken out for paying taxes. This leftover amount of money is referred to as ____________ income.

Disposable, net

Which of the following countries/territories joined the Central America Free Trade Agreement (CAFTA) in 2004? A. Jamaica B. Panama C. Cayman Islands D. Puerto Rico E. Dominican Republic

E. Dominican Republic

Changes to the tax incentive element as it pertains to charitable donations is part of which external factor affecting the marketing environment for nonprofit organizations? A. Technological B. Financial C. Economic D. Sociocultural E. Legal

E. Legal

Which of the following is a goal of the North American Free Trade Agreement (NAFTA)? A. To introduce non-tariff trade barriers such as embargoes or sanctions B. To introduce monetary tariffs on imports and exports between the participating countries C. To restrict the use of labels on all consumer products D. To eliminate competition among participating countries E. To eliminate barriers to trade and investment among the participating countries

E. To eliminate barriers to trade and investment among the participating countries

The ___________________ is an economic, political, and monetary union of 28 European nations. Its formation sought to reduce barriers to the free trade of goods, services, and finances among member countries.

European Union, EU

By collecting complaints about organizations that violate regulations and then passing those complaints on for investigation and potential prosecution, the _______ acts as a consumer protection agency for the United States.

Federal Trade Commission

When the general price level rises, each unit of currency buys ______________ goods and services.

Fewer, less

If you wanted to get a sense of the economic health of a nation as well as an indication of that country's standard of living, you would look to which economic indicator?

Gross domestic product

_______ is best defined as the market value of all officially recognized final goods and services produced within a country in a given period.

Gross domestic product

The World Trade Organization

Has 162 members, representing more than 97 percent of the world's population, and over 20 observer nations, most of which are seeking membership

_______ competition is a process in which products provide alternative solutions to the same market.

Indirect

The International Monetary Fund

Is governed by and accountable to the 188 countries that make up its membership

The World Trade Organization (WTO)

Is the only organization dealing with the rules of trade between nations, it is designed to regulate trade among participating countries and helps importers and exporters conduct their business

What was the purpose of the Wheeler-Lea Act of 1938?

It made deceptive and misleading advertising illegal.

The World Trade Organization formed under the _______ Agreement. A. Marrakech B. Paris Protocol C. Aarhus D. Bustard E. Versailles

Marrakech

_______ is a member of the North American Free Trade Agreement (NAFTA) along with the United States and Canada.

Mexico

_______ have the greatest familiarity and most use for different forms of technology.

Millennials

A function of a(n) _________ is to raise money to help elect individuals who regard their organization positively or to promote a particular issue related to their industry.

PAC (political action committees)

_______ refers to the amount of goods and services that can be bought for a specific amount of money.

Purchasing power

While shopping, Lisa buys powdered milk since her favorite brand of organic milk is out of stock. She also buys a torch for her trekking trip and a pair of batteries for the torch. While waiting at the payment counter, she notices the colorful lollipops displayed at the counter. She purchases the lollipop even though she did not plan on buying one before entering the store. When considering all of Lisa's purchases, which one is an example of a substitute product?

The powdered milk

True or False: The International Monetary Fund (IMF) was formed to promote international economic cooperation, trade, and employment.

True (The International Monetary Fund (IMF) works to foster international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.)

True or False: The World Trade Organization (WTO) provides a framework for negotiating and formalizing trade agreements and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements.

True (along with regulating trade among participating counties and helping importers and exporters conduct their business)

True or False: Marketers are particularly attracted to countries with a growing middle class.

True: A nation's purchasing capability tends to increase as the proportion of middle-income households increase.

True or False: Economic conditions impact customers' willingness and ability to buy products.

True; Since economic conditions impact customers' willingness and ability to buy products, firms must create, communicate, and deliver value in a way that's appropriate for the current economic climate.

Which of the following scenarios exemplifies the concept of indirect competition? Two products provide alternative solutions to the same market Consumers purchase products that they did not intend to buy Two products that perform identical functions compete against one another Two products that perform the same function are marketed to a new consumer segment

Two products provide alternative solutions to the same market (almost like a market substitute)

When marketers measure how optimistic consumers are about the overall state of the economy and their own personal finances, they are measuring _______.

consumer confidence

Reuben is a manufacturer of paper napkins and tissues. For the U.S market, he packages his products in large quantities, since U.S. families are large and have room to store larger packages. When he entered the global market, he packaged his products in the same manner, but his products didn't sell because his foreign market did not have room to store large packages and preferred to buy in smaller quantities. In this instance, Reuben most likely failed to understand the importance of _______.

cultural fit

The price of one country's currency in terms of another country's currency is known as the _________________________.

currency exchange rate

The World Trade Organization is the only international organization _______.

dealing with the rules of trade between nations

Typically, consumer confidence _______ when the economy contracts and people lose jobs.

decreases

The education level of a consumer is a(n) _______ variable that can be used to identify consumer markets.

demographic

The North American Free Trade Agreement (NAFTA) sought to _______ barriers to both trade and investment among participating countries.

eliminate

The act of monitoring developments outside of a firm's control with the goal of detecting and responding to threats and opportunities is referred to as _______.

environmental scanning

When Erin Brewer decided to explore launching a small business, she analyzed the external factors that would impact her company. Monitoring developments outside of a firm's control with the goal of detecting and responding to threats and opportunities is referred to as _______.

environmental scanning

Overall, _______ measures the overall size and health of an economy.

gross domestic product

A recession occurs when overall _______ for two or more consecutive quarters.

gross domestic product declines

During an inflationary period, the general level of prices of products in an economy are likely to _______.

increase

In many developed nations, including the United States, France, Germany, and China, consumer ethnocentrism is _______.

increasing

A process in which products provide alternative solutions to the same market is referred to as _______ competition.

indirect Not direct because: Rather than provide alternative solutions, direct competitors provide products that perform the same function.

New laws and regulations are among the _________ factors impacting nonprofit organizations.

legal

Two-income families and single-parent households represent ___________ factors.

sociocultural

Factors outside of a firm such as political, technological, or legal forces that affect the firm's ability to meet its marketing goals are all part of the _______.

marketing environment

Andrew was born in the year 1981. According to your text, Andrew is a _______.

millennial

A(n) __________________ occurs when overall gross domestic product (GDP) declines for two or more consecutive quarters.

recession

The recession led to political pressure to _______ federal, state and municipal budgets.

reduce

As an external marketing factor, the term ________________ factors refers to the combination of social and cultural factors that affect individual development.

sociocultural

According to your text, a mistake that firms make when they attempt to take their business global is to believe _______.

that foreign consumers want exactly the same products that are sold in the firm's home country

One of the biggest sociocultural changes in the United States over the past half century has been _______.

the shift from a nation of primarily one-income families to one in which two-income families predominate

Because it can impact the success of the firm's marketing strategy, marketing professionals continually scan and analyze a firm's external environment in order to detect and respond to _______.

the threats and opportunities facing the firm