LO: 3-1: Describe the environmental forces that affect the company's ability to serve its

Transcription

1 Marketing: An Introduction, 13e (Armstrong) Chapter 3 Analyzing the Marketing Environment 1) Which of the following is part of the microenvironment of a firm's marketing environment? A) the political state of the country in which the firm exists B) the cultural forces that exist in a society C) the suppliers who work with the company D) the technological resources available to the company E) the different demographic trends in the market Answer: C 2) Demographic, economic, natural, technological, political, and cultural forces form the of an organization. A) supply chain B) macroenvironment C) marketing intermediary network D) internal environment E) microenvironment 3) The responsibility for setting a company's mission, objectives, broad strategies, and policies primarily lies with its. A) finance department B) research department C) top management D) marketing managers E) human resource managers Answer: C 1

2 4) Which of the following is part of the microenvironment of a company's marketing environment? A) a just-in-time inventory system used by the company when making purchase decisions B) a set of laws that require the company to scale down its telemarketing calls to customers C) a changing demographic picture that requires the firm to make product adaptations D) a new technology that would ensure significant cost-cutting if implemented in the firm E) a set of environmental sustainability laws that significantly impact the company's production processes Answer: A AACSB: Analytical thinking 5) American Honda purchases over $20 billion worth of auto parts and materials every year. are key players in the company's success. A) Wholesalers B) Suppliers C) Physical distribution firms D) Media firms E) Retailers AACSB: Analytical thinking 6) are distribution channel firms that help a company find customers or make sales to them. A) Resellers B) Suppliers C) Producers D) Logistics firms E) Credit companies Answer: A 2

3 7) Which of the following has the primary function of helping a company target and promote its products to the right markets? A) Marketing services agencies B) Resale marketers C) Service providers D) Physical distribution firms E) Credit companies Answer: A 8) A marketing intermediary would most likely help a firm by. A) negotiating with labor unions regarding wages, hours, and benefits B) providing technical expertise on the production and design of goods C) competing directly with the firm in a certain product category D) supplying the raw materials needed for manufacturing the firm's products E) moving the firm's goods from production points to distribution centers Answer: E 9) Which of the following is most likely a financial public? A) community organization B) minority group C) corporate attorney D) stockholder E) newspaper Answer: D 10) A consumer advocacy group challenges a firm's decision to build a new warehouse in a small community. The advocacy group is an example of a public. A) financial B) government C) media D) local E) citizen-action Answer: E 3

4 11) Monfax Corporation insures manufacturers, distributors, and consumers against the loss or damage of goods during transportation after a purchase or sale. In this case, Monfax is an example of a. A) wholesaler B) retailer C) financial intermediary D) physical distribution firm E) marketing service agency Answer: C Diff: 3 AACSB: Analytical thinking 12) Which of the following is an example of a media public? A) community organization B) minority group C) television station D) banking institution E) federal government Answer: C 13) Kelstone Developers is planning to build a new shopping mall that would require the partial acquisition of a nearby public park. Walking Green, an environmental group, challenges the plan citing environmental destruction. In response to the demands of Walking Green, Kelstone Developers promises to build a huge park-like walkway around the mall. Walking Green is an example of a(n) in this scenario. A) financial public B) government public C) citizen-action public D) internal public E) media public Answer: C AACSB: Analytical thinking 4

5 14) Volunteers belong to a company's publics. A) general B) local C) citizen-action D) media E) internal Answer: E 15) The town of Genter recently witnessed a devastating hurricane that crippled the town's infrastructure. Q-Mart, a retail chain that plans to open a new retail store in Genter, organizes a program to help the people of Genter. The program consists of providing free meals to those who lost their dwellings in the hurricane. What section of the marketing microenvironment is Q-Mart most likely trying to reach? A) suppliers B) marketing intermediaries C) local publics D) competitors E) employees Answer: C AACSB: Analytical thinking; Ethical understanding and reasoning 16) The citizen-action publics in a company's marketing environment include. A) employees and managers of the company B) stockholders and investment analysts C) government trade agencies D) environmental groups E) news channels Answer: D 5

6 17) Which of the following is an example of a local public? A) a community organization that addresses welfare issues in its neighborhood B) a supplier responsible for sourcing most of the raw materials used in production C) a company director who is working to improve the organization's public image D) a bank that helps a company acquire loans E) a federal regulatory agency that monitors business practices Answer: A 18) Which of the following are examples of internal publics of a company? A) newspapers, magazines, television stations, blogs, and other Internet media B) governmental departments and agencies that regulate businesses C) neighborhood residents and community organizations D) the managers, board of directors, and workers of the company E) the general public that is directly affected by the company Answer: D 19) According to the text, are the most important actors in a company's microenvironment. A) stockholders B) employees C) suppliers D) resellers E) customers Answer: E 20) markets consist of individuals and households that buy goods and services for personal use. A) Consumer B) Business C) Government D) Wholesaler E) Retailer Answer: A 6

7 21) Which of the following is most likely categorized as a business market? A) government agencies that buy goods and services to produce public services B) individuals who buy goods and services for personal consumption C) firms that buy goods and services for further processing D) firms that buy goods and services to resell for profit E) retail outlets that buy goods and services to sell at discounted prices Answer: C 22) Reseller markets consist of. A) government agencies that buy goods and services to produce public services B) individuals who buy goods and services for personal consumption C) firms that buy goods and services to assemble overseas D) firms that buy goods and services to sell at a profit E) firms that buy goods and services for further processing Answer: D 23) Dextora Technologies manufactures microprocessors and caters exclusively to private manufacturers that produce high-end computers. Which type of market does Dextora directly target? A) retail market B) government market C) consumer market D) business market E) reseller market Answer: D AACSB: Analytical thinking 7

8 24) JJ Distributors Ltd. buys electronic products from manufacturers for wholesale and sells them to various retail outlets. To which of the following markets does JJ Distributors Ltd. directly cater? A) business markets B) reseller markets C) manufacturer markets D) supplier markets E) consumer markets AACSB: Analytical thinking 25) Walmart's microenvironment includes suppliers. Answer: TRUE 26) Marketing intermediaries supply resources needed by a company to produce its goods and services. Answer: FALSE 27) The Office Depot Foundation serves its financial publics through a variety of programs. Answer: FALSE 28) A customer buys a can of Pepsi from a Walmart store. In this scenario, Walmart is a supplier in Pepsi's value delivery network. Answer: FALSE 29) Advertising agencies that help a company target a certain section of customers are marketing intermediaries. Answer: TRUE 8

9 30) A bank that helps a company finance transactions is both a financial intermediary and a financial public. Answer: TRUE 31) The most important actors in a company's microenvironment are its competitors. Answer: FALSE 32) What are marketing intermediaries? What are the different types of marketing intermediaries? Answer: Marketing intermediaries help the company promote, sell, and distribute its products to final buyers. They include resellers, physical distribution firms, marketing services agencies, and financial intermediaries. Resellers are distribution channel firms that help the company find customers or make sales to them. These include wholesalers and retailers that buy and resell merchandise. Physical distribution firms help the company stock and move goods from their points of origin to their destinations. Marketing services agencies are the marketing research firms, advertising agencies, media firms, and marketing consulting firms that help the firm target and promote its products to the right markets. Financial intermediaries include banks, credit companies, insurance companies, and other businesses that help finance transactions or insure against the risks associated with the buying and selling of goods. Marketing intermediaries form an important component of the company's overall value delivery network. In its quest to create satisfying customer relationships, the company must do more than just optimize its own performance. It must partner effectively with marketing intermediaries to optimize the performance of the entire system. 9

10 33) Markwin Electronics is a company that only sells products online. Orders are taken through an interactive Web site, and goods are shipped out through a small warehouse the company owns. Markwin employees also handle the shipment of goods to desired destinations. How could marketing intermediaries help Markwin expand its business? Answer: (Students' answers may vary. The answer given below is indicative.) Marketing intermediaries help the company promote, sell, and distribute its products to final buyers. Marketing intermediaries already have channels ready that are directly connected to Thus by utilizing intermediaries, Markwin can tap into a much bigger source of sales. Intermediaries include resellers, physical distribution firms, marketing services agencies, and financial intermediaries. These include wholesalers and retailers who buy and resell merchandise. Physical distribution firms can help Markwin stock and move goods from their points of origin to their destinations. Marketing services agencies are the marketing research firms, advertising agencies, media firms, and marketing consulting firms that help the company target and promote its products to the right markets. Financial intermediaries include banks, credit companies, insurance companies, and other businesses that can help finance transactions for Markwin, or insure against the risks associated with the buying and selling of goods. Marketing intermediaries can form an important component of the company's overall value delivery network. Markwin's marketers must recognize the importance of working with their intermediaries as partners rather than simply as channels through which they sell their products. Diff: 3 AACSB: Analytical thinking; Information technology 34) How do the different types of publics influence a company's marketing environment? Answer: A public is any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives. Financial publics: This group influences the company's ability to obtain funds. Banks, investment analysts, and stockholders are the major financial publics. Media publics: This group carries news, features, editorial opinions, and other content. It includes newspapers, magazines, television stations, and blogs and other social media. Government publics: Management must take government developments into account. Marketers must often consult the company's lawyers on issues of product safety, truth in advertising, and other matters. Citizen-action publics: A company's marketing decisions may be questioned by consumer organizations, environmental groups, minority groups, and others. Its public relations department can help it stay in touch with consumer and citizen groups. Local publics: This group includes neighborhood residents and community organizations. Large companies usually create departments and programs that deal with local community issues and provide community support. General public: A company needs to be concerned about the general public's attitude toward its products and activities. The public's image of the company affects its buying behavior. Internal publics: This group includes workers, managers, volunteers, and the board of directors. 10

11 35) is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. A) Sociobiology B) Demography C) Behavioral ecology D) Environmental studies E) Political science 36) Which of the following generational groups account for a third of the U.S. population but half of all consumer spending? A) Millennial B) Generation X C) Generation Z D) baby boomer E) Lost Generation Answer: D 37) Which of the following is most likely a true statement about baby boomers? A) They are the first generation to have grown up with computers. B) They constitute the largest demographic group in the United States. C) They were born between 1965 and D) They are the most educated generation of Americans. E) They are the wealthiest generation in U.S. history. Answer: E 38) To which of the following generational groups do zoomers belong? A) Millennial B) Generation X C) Generation Z D) Lost Generation E) baby boomer Answer: E 11

12 39) Which generational group is characterized as the most educated and the least materialistic? A) baby boomer B) Generation X C) Millennial D) Generation Z E) Lost Generation 40) Secure is a financial services and insurance company. The company's most profitable division is one that sells the Secure Future Plan. The Secure Future Plan targets customers who are entering retirement and want long-term savings so they can remain financially independent in the later years of their life. The marketing team at Secure has most likely targeted the plan at. A) Millennials B) baby boomers C) Generation Xers D) Generation Zers E) the Lost Generation Diff: 3 AACSB: Analytical thinking 41) Which of the following is most likely a characteristic of Generation Xers? A) They were the first group to grow up in the Internet era. B) They comprise a considerably larger population than the baby boomers. C) They prefer quantity over quality of products. D) They are the least educated generation to date. E) They are generally unreceptive to ad pitches that make fun of tradition. Answer: A 12

13 42) Technology is a way of life for, the largest generational group. A) Generation Z B) Generation X C) baby boomers D) Millennials E) the Lost Generation Answer: D 43) Which of the following is most likely a characteristic of the Millennial generation? A) They have very little knowledge of using digital media. B) They are a smaller population than Generation X. C) They are the wealthiest generation in the United States to date. D) They are more likely to engage with brands using mobile or social media. E) They typically avoid using technology while buying products. Answer: D 44) Which of the following is the most financially strapped generation in the post-recession era? A) Millennial B) Generation X C) Generation Z D) the Lost Generation E) baby boomers Answer: A 45) Members of which generational group are referred to as echo boomers? A) the Lost Generation B) Generation X C) Generation Z D) the baby boomers E) Millenial Answer: E 13

14 46) Which generational group consists of the kid, teen, and tween markets? A) Generation Y B) Millenial C) Generation Z D) Generation X E) Lost Generation Answer: C 47) Which generational group is most comfortable using digital technologies? A) Millennial B) Zoomer C) Generation X D) Generation Z E) Lost Generation Answer: D 48) Which of the following is most likely a true statement about generational groups in the United States? A) The Millennials account for nearly half of all discretionary consumer spending in the United States. B) The Generation Xers are the most educated generation to date. C) The baby boomers comprise the poorest segment of the population. D) The Generation Xers form the largest segment of the population. E) The Millennials are the most financially secure generation. 49) Which of the following is a geographic shift that has been observed in the United States in recent times? A) fewer Americans moving to Sunbelt states B) fewer Americans moving to the South C) more Americans moving to the Midwest D) more Americans moving to densely populated cities E) more Americans moving to micropolitan areas Answer: E 14

15 50) Which of the following illustrates the changing composition of the American family? A) the number of same-sex couples raising children has decreased B) the number of married couples with children under 18 is climbing C) fewer people are divorcing or separating D) an increase in the number of non-family households E) a decrease in the number of same-sex couples Answer: D AACSB: Diverse and multicultural work environments 51) Which of the following has resulted from the increased educational levels of the U.S. population? A) lower acceptance of technological changes B) greater job growth for professional workers C) higher number of manufacturing jobs D) lower mobility of the U.S. population E) lower number of women in the workforce 52) The migration trend towards micropolitan and suburban areas has caused a shift in where people work. This has resulted in a rapid increase in the number of people who. A) commute B) leave the workforce C) telecommute D) work part-time E) purchase second residences Answer: C 15

16 53) Large companies like P&G, Walmart, and Allstate have designed specialty products and promotions to target a previously untapped market that has grown substantially in recent years. They are appealing to. A) the Millenial generation B) the Asian American market C) the African American market D) the LGBT community E) the Hispanic market Answer: D AACSB: Diverse and multicultural work environments 54) Which of the following is most likely a true statement about diversity in the United States? A) Most ethnic groups are shedding their ethnic culture and shifting toward a unified American culture. B) Asian Americans constitute the largest ethnic group in the United States. C) Ethnic and cultural differences exist since different ethnic groups remain isolated from one another. D) Various ethnic groups mix together but also retain their cultural differences. E) The nation's ethnic populations are set to decrease in coming decades. Answer: D AACSB: Diverse and multicultural work environments 55) Companies have responded to consumers' back-to-basics sensibility in their lifestyle and spending patterns through. A) frugal marketing B) value marketing C) quality marketing D) diverse marketing E) prestige-oriented marketing 16

17 56) Changes in variables, such as income, cost of living, interest rates, and savings and borrowing patterns most likely reflect changes in the environment of a company. A) economic B) natural C) demographic D) political E) cultural Answer: A 57) The least significant demographic trend in the United States is the changing age structure of the population. Answer: FALSE 58) Generation X is the least educated group to date. Answer: FALSE 59) Companies are adapting their promotional efforts to reflect the changing dynamics of American families. Answer: TRUE AACSB: Diverse and multicultural work environments 60) The rapid increase in the number of people who telecommute has created a booming small office/home office market in the United States. Answer: TRUE 61) Many companies have started to target the LGBT market segment which has significant buying power. Answer: TRUE AACSB: Diverse and multicultural work environments 17

18 62) The purchasing power of a population is part of the demographic environment of a company's macroenvironment. Answer: TRUE 63) Value marketing has become the watchword for many marketers. Answer: TRUE 64) In the context of income distribution, the middle class in the United States has grown in size over the past several decades. Answer: FALSE 65) The distribution of income in the United States has created a tiered market. Answer: TRUE 66) Discuss how an increased educational level in the United States has affected the American household and how marketers have responded to these changes. Answer: (Students' answers may vary. The answer given below is indicative.) The U.S. population is becoming better educated. The rising number of educated professionals will affect not just what people buy but also how they buy. Job growth is now strongest for professional workers and weakest for manufacturing workers. The number of working women has also increased greatly, growing from under 40 percent of the U.S. workforce in the late 1950s to 69 percent today. American women now make up 40 percent of primary family breadwinners. Among households made up of married couples with children, 60 percent are dual-income households; only the husband works in 28.5%. Meanwhile, more men are staying home with their children and managing the household while their wives go to work. The significant number of women in the workforce has spawned the child day-care business and increased the consumption of career-oriented women's clothing, convenience foods, financial services, and time-saving services. AACSB: Analytical thinking 18

19 67) How do companies use marketing techniques to respond to the changing diversity in the U.S. population? Provide examples to illustrate your response. Answer: (Students' answers may vary. The answer given below is indicative.) Marketers now face increasingly diverse markets, both at home and abroad, as their operations become more international in scope. The U.S. population is about 62.2 percent non-hispanic white, with Hispanics at 17.4 percent and African Americans at 13.2 percent. The U.S. Asian American population now totals more than 5.4 percent of the total U.S. population, with the remaining groups being Native Hawaiian, Pacific Islander, American Indian, Eskimo, or Aleut. Moreover, one in eight people living in the United States over 13 percent of the population was born in another country. The nation's ethnic populations are expected to explode in coming decades. By 2060, Hispanics will be about 28 percent of the population, African Americans will be about 14 percent, and Asian Americans will increase to 9 percent. Most large companies, from P&G, Walmart, Allstate, and Wells Fargo to McDonald's and Southwest Airlines, now target specially designed products, ads, and promotions to one or more of these groups. For example, Southwest Airlines' outreach to Asian Americans includes being the title sponsor for the Chinese New Year Festival and Parade in San Francisco, the biggest nighttime parade in the United States and the second biggest in North America after the Macy's Thanksgiving Day parade. Diff: 3 AACSB: Diverse and multicultural work environments 68) Diversity goes beyond ethnic heritage. Discuss the factors that have influenced the emergence of the lesbian, gay, bisexual, or transgender (LGBT) community and how marketers have responded. Provide examples to illustrate your response. Answer: (Students' answers may vary. The answer given below is indicative.) As a result of TV shows such as Modern Family, movies like Brokeback Mountain and The Perks of Being a Wallflower, and openly gay celebrities and public figures, the LGBT community has increasingly emerged in the public eye. According to one estimate, the 6 to 7 percent of U.S. adults who identify themselves as lesbian, gay, bisexual, or transgender (LGBT) have buying power of more than $830 billion. Numerous media like Viacom's MTV Networks now provide companies with access to this market. Brands in a wide range of industries are now targeting the LGBT community with gay-specific ads and marketing efforts from Amazon, American Airlines, Allstate, and Apple to luxury jewelry retailer Tiffany. For example, Allstate recently ran an "Everyone deserves to be in good hands" campaign with ads featuring same-sex couples and the hashtag #OutHoldingHands. Brands ranging from Axe to Tiffany have sponsored similar ads. American Airlines has a dedicated LGBT "Rainbow Team," sponsors gay and lesbian community events, and offers a special Web site ( Facebook pages, and Twitter feed featuring LGBT-oriented travel deals, information, and discussion. The airline's focus on gay consumers has earned it double-digit revenue growth from the LGBT community each year for more than a decade. Diff: 3 AACSB: Diverse and multicultural work environments 19

20 69) Fargo Inc. is a carbonated beverage manufacturer that has many manufacturing plants around the world. It is planning to shift from using thermal power to wind power for its manufacturing plants in the Netherlands to decrease dependency on nonrenewable sources of energy. This scenario depicts Fargo's concern for its environment. A) economic B) natural C) demographic D) political E) cultural LO: 3-3: Identify the major trends in the firm's natural and technological environments. AACSB: Ethical understanding and reasoning 70) Which of the following represents a change in the technological environment of a marketing firm? A) increased use of cause-related marketing B) increased use of RFID systems to track products C) increased need to comply with environmental regulations D) increased use of value marketing techniques and promotions E) increased need to engage in mass marketing over market segmentation LO: 3-3: Identify the major trends in the firm's natural and technological environments. 71) Recyclable or biodegradable packaging, recycled materials and components, and better pollution controls are ways that marketers have responded to the. A) increased need to comply with environmental regulations B) pollution reduction movement C) new recycling laws D) new government intervention program E) environmental sustainability movement Answer: E LO: 3-3: Identify the major trends in the firm's natural and technological environments. AACSB: Ethical understanding and reasoning 72) The environment is perhaps the most dramatic force shaping the destiny of individuals and offering exciting opportunities for marketers. A) demographic B) technological C) political D) social E) cultural LO: 3-3: Identify the major trends in the firm's natural and technological environments. 20

21 73) The Consumer Product Safety Commission has created complex regulations for testing new drugs before they are sold to the public. Answer: FALSE LO: 3-3: Identify the major trends in the firm's natural and technological environments. 74) Stringent product regulations have helped to lower research costs and decrease time between new product ideas and their introduction to the market. Answer: FALSE LO: 3-3: Identify the major trends in the firm's natural and technological environments. 75) What is environmental sustainability? How does it affect the marketing environment? Provide examples to illustrate your response. Answer: Concern for the natural environment has spawned the so-called green movement. Today, enlightened companies go beyond what government regulations dictate. They are developing strategies and practices that support environmental sustainability an effort to create a world economy that the planet can support indefinitely. Environmental sustainability means meeting present needs without compromising the ability of future generations to meet their needs. Many companies are responding to consumer demands with more environmentally responsible products. Others are developing recyclable or biodegradable packaging, recycled materials and components, better pollution controls, and more energy-efficient operations. For example, Timberland's mission is about more than just making rugged, high-quality boots, shoes, clothes, and other outdoor gear. The brand is about doing everything it can to reduce the environmental footprint of its products and processes. More and more, these companies are recognizing the link between a healthy ecology and a healthy economy. They are learning that environmentally responsible actions also mean good business. LO: 3-3: Identify the major trends in the firm's natural and technological environments. AACSB: Ethical understanding and reasoning 21

22 76) Describe the major trends in the natural environment that marketers need to be aware of. Answer: Marketers should be aware of several trends in the natural environment. The first involves growing shortages of raw materials. Air and water may seem to be infinite resources, but some groups see long-run dangers. Air pollution chokes many of the world's large cities, and water shortages are already a big problem in some parts of the United States and the world. Renewable resources, such as forests and food, also have to be used wisely. Nonrenewable resources, such as oil, coal, and various minerals, pose a serious problem. Firms making products that require these scarce resources face large cost increases, even if the materials remain available. A second environmental trend is increased pollution. Industry will almost always damage the quality of the natural environment. Consider the disposal of chemical and nuclear wastes; the dangerous mercury levels in the ocean; the quantity of chemical pollutants in the soil and food supply; and the littering of the environment with non-biodegradable bottles, plastics, and other packaging materials. A third trend is increased government intervention in natural resource management. The governments of different countries vary in their concern and efforts to promote a clean environment. The general hope is that companies around the world will accept more social responsibility and that less expensive devices can be found to control and reduce pollution. Diff: 3 LO: 3-3: Identify the major trends in the firm's natural and technological environments. AACSB: Ethical understanding and reasoning 77) How are American businesses utilizing new technologies to improve their inventory management? Provide examples to illustrate your response. Answer: (Students' answers may vary. The answer given below is indicative.) New technologies can offer exciting opportunities for marketers. The technological advancement of radio-frequency identification (RFID) transmitters is rapidly changing the way companies control their inventory. RFIDs can be embedded in the products you buy. Many firms are already using RFID technology to track products and customers at various points in the distribution channel. For example, Walmart has strongly encouraged suppliers shipping products to its distribution centers to apply RFID tags to their pallets. And retailers such as American Apparel, Macy's, and Bloomingdales are now installing item-level RFID systems in their stores. Fashion and accessories maker Burberry even uses chips imbedded in items and linked to smartphones to provide personalized, interactive experiences for customers in its stores and at runway shows. Diff: 3 LO: 3-3: Identify the major trends in the firm's natural and technological environments. AACSB: Analytical thinking; Information technology 22

23 78) Why is monitoring the technological environment crucial for marketing professionals? Answer: (Students' answers may vary. The answer given below is indicative.) The technological environment is perhaps the most dramatic force now shaping our destiny. The technological environment changes rapidly. New technologies create new markets and opportunities. However, every new technology replaces an older technology. Transistors hurt the vacuum-tube industry, digital photography hurt the film business, and MP3 players and digital downloads are hurting the CD business. When old industries fought or ignored new technologies, their businesses declined. Thus, marketers should watch the technological environment closely. Companies that do not keep up will soon find their products outdated. If that happens, they will miss new product and market opportunities. LO: 3-3: Identify the major trends in the firm's natural and technological environments. AACSB: Analytical thinking 79) In a marketer's macroenvironment, the environment consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society. A) political B) cultural C) technological D) natural E) internal Answer: A 80) Governments most likely enact business legislation to. A) prevent unfair competition in the market B) allow a single large monopoly in the market C) prevent alternative products from entering the market D) protect the interests of producers rather than society E) dissociate social responsibility from commerce Answer: A 23

24 81) Which of the following is most likely true about business legislation? A) Business laws are enforced only in international markets and not in local markets. B) Business laws fail to prevent unfair competition among the different companies in a market and tend to encourage monopolies. C) Business laws usually remain constant over time. D) Local, national, and state business laws rarely overlap with one another. E) Business laws that are enforced by government agencies have a major impact on a company's marketing performance. Answer: E AACSB: Analytical thinking 82) The boom in online, mobile, and social media has created a new set of social and ethical issues for companies. Their greatest concern involves. A) failure to provide value-priced products for online customers B) protecting the privacy of knowing and unknowing customers C) providing too many alternative products online which confuses customers D) rarely following the marketing orientation when devising promotional offers online E) failing to reach their target customers through online marketing AACSB: Information technology 83) P&G "Tide Loads of Hope" program provides mobile laundromats and loads of clean laundry to families in disaster-stricken areas. This is an example of marketing. A) social B) environmental C) ethical D) cause-related E) charitable Answer: D AACSB: Ethical understanding and reasoning 24

25 84) Ursa Martin, a book publisher, has decided to work with Hope in Children, a charity foundation that helps feed and educate children in poor countries. Ursa Martin has decided that a percentage of revenue from every book it sells will go to the charity. The books are marketed by conveying this message to Which of the following marketing techniques describes Ursa Martin's association with Hope in Children? A) joint venture marketing B) cause-related marketing C) niche marketing D) green marketing E) test marketing AACSB: Ethical understanding and reasoning 85) Which of the following is most likely true about people's beliefs and values? A) Belief in marriage is a secondary belief for most Americans. B) Secondary beliefs and values cannot be changed. C) Marketers have a high chance of changing core beliefs and values. D) Secondary beliefs are passed on from parents to children. E) Core beliefs and values have a high degree of persistence. Answer: E 86) Which of the following is most likely a true statement about people's views about organizations? A) Many people view work at an organization as a required chore. B) People don't expect organizations to carry out society's work. C) Confidence in political organizations has increased in recent years. D) Loyalty towards employers has increased in the past two decades. E) Many people today see organizations as a source of personal satisfaction. Answer: A 87) The Federal Trade Commission enforces laws that prevent unfair competition in business. Answer: TRUE 88) Government regulations are intended to protect consumers, companies, and societal interests. Answer: TRUE AACSB: Ethical understanding and reasoning 25

26 89) Cause-related marketing techniques are typically unprofitable for businesses, which is why it is a rarely used form of corporate giving. Answer: FALSE AACSB: Ethical understanding and reasoning 90) Marketers have a better chance of taking advantage of a person's secondary beliefs than his or her core beliefs. Answer: TRUE 91) Discuss how the political environment affects the marketing environment. Answer: Marketing decisions are strongly affected by developments in the political environment. The political environment consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society. Governments develop public policy to guide commerce sets of laws and regulations that limit business for the good of society as a whole. Almost every marketing activity is subject to a wide range of laws and regulations. Well-conceived regulation can encourage competition and ensure fair markets for goods and services. In the United States, there are many laws created at the national, state, and local levels, and these regulations often overlap. Moreover, regulations are constantly changing; what was allowed last year may now be prohibited, and what was prohibited may now be allowed. Marketers must work hard to keep up with changes in regulations and their interpretations. AACSB: Analytical thinking 92) Give an instance where a company exhibits social responsibility through business. Answer: (Students' answers may vary. The answer given below is indicative.) To exercise their social responsibility and build a more positive image, many companies are now linking themselves to worthwhile causes. Cause-related marketing has become a primary form of corporate giving. It lets companies "do well by doing good" by linking purchases of the company's products or services with benefiting worthwhile causes or charitable organizations. For example, the P&G Tide Loads of Hope program provides mobile laundromats and loads of clean laundry to families in disaster-stricken areas P&G washes, dries, and folds clothes for these families for free. Down the street, needy people will probably find the P&G Duracell Power Relief Trailer, which provides free batteries and flashlights as well as charging stations for phones and laptops. Diff: 3 AACSB: Ethical understanding and reasoning 26

27 93) Discuss the social and ethical concerns that the boom in digital technology has created for marketers. Answer: (Students' answers may vary. The answer given below is indicative.) The boom in Internet marketing has created a new set of social and ethical issues. Critics worry most about online privacy issues. There has been an explosion in the amount of personal digital data available. Users, themselves, supply some of it. They voluntarily place highly private information on social networking sites, such as Facebook or LinkedIn, or on genealogy sites that are easily searched by anyone with a computer or a smartphone. However, much of the information is systematically developed by businesses seeking to learn more about their customers, often without consumers realizing that they are under the microscope. Legitimate businesses track consumers' Internet browsing and buying behavior and collect, analyze, and share digital data from every move consumers make at their online sites. Critics worry that these companies may now know too much and might use digital data to take unfair advantage of consumers. Although most companies fully disclose their Internet privacy policies and most try to use data to benefit their customers, abuses do occur. AACSB: Ethical understanding and reasoning; Information technology 94) Discuss with an example how marketers have adapted to people's changing views toward nature. Answer: (Students' answers may vary. The answer given below is indicative.) People vary in their attitudes toward the natural world. Recently, however, people have recognized that nature is finite and fragile; it can be destroyed or spoiled by human activities. This renewed love of things natural has created a 41-million-person "lifestyles of health and sustainability" (LOHAS) market, consumers who seek out everything from natural, organic, and nutritional products to fuel-efficient cars and alternative medicine. For example, Tom's of Maine caters to such consumers with sustainable, all-natural personal care products toothpaste, deodorant, mouthwash, and soap made with no artificial colors, flavors, fragrances, or preservatives. The products are also "cruelty-free" (no animal testing or animal ingredients). Tom's makes sustainable practices a priority in every aspect of its business and strives to maximize the recycled content and recyclability of its packaging. Finally, Tom's donates 10 percent of its pretax profits to charitable organizations. Diff: 3 AACSB: Ethical understanding and reasoning 95) Which of the following is most likely a characteristic of firms that adopt a reactive approach toward the marketing environment? A) They develop strategies to change the marketing environment. B) They take advantage of the opportunities provided by the environment. C) They take aggressive actions to affect the marketing environment. D) They view the marketing environment as a controllable element. E) They do not accept the marketing environment as it is. LO: 3-5: Discuss how companies can react to the marketing environment. 27

28 96) Which of the following is most likely true about companies that take a proactive stance toward the marketing environment? A) They develop strategies to change the marketing environment. B) They believe that marketing strategies are bound by the current environment. C) They passively accept the marketing environment in its current state. D) They view the marketing environment as an uncontrollable element. E) They design strategies according to environmental forces in the market. Answer: A LO: 3-5: Discuss how companies can react to the marketing environment. 97) People's orientation to their society does not impact their consumption patterns and attitudes toward the marketplace. Answer: FALSE LO: 3-5: Discuss how companies can react to the marketing environment. 98) Firms that develop strategies to change the environment are considered proactive. Answer: TRUE LO: 3-5: Discuss how companies can react to the marketing environment. 99) A company that adopts a reactive marketing stance would most likely view the marketing environment as an uncontrollable element to which it must adapt. Answer: TRUE LO: 3-5: Discuss how companies can react to the marketing environment. 28

29 100) Draw a comparison between the reactive and proactive approaches a company can take toward a changing marketing environment. Answer: Many companies view the marketing environment as an uncontrollable element to which they must react and adapt. They passively accept the marketing environment and do not try to change it. They analyze environmental forces and design strategies that will help the company avoid the threats and take advantage of the opportunities the environment provides. This is a reactive approach. Other companies take a proactive stance toward the marketing environment. Instead of letting the environment define their strategy, they craft a strategy that defines the environment. Rather than assuming that strategic options are bounded by the current environment, these firms develop strategies to change the environment. Proactive firms take aggressive actions to affect the publics and forces in their marketing environment. Such companies hire lobbyists to influence legislation affecting their industries and stage media events to gain favorable press coverage. They run advertorials (ads expressing editorial points of view) and blogs to shape public opinion. They press lawsuits and file complaints with regulators to keep competitors in line, and they form contractual agreements to better control their distribution channels. LO: 3-5: Discuss how companies can react to the marketing environment. AACSB: Analytical thinking 29