Ch 3

MATCHING

a. environmental scanning f. demarketingb. environmental management g. consumerismc. competitive environment h. marketing ethicsd. time-based consumption i. social responsibilitye. economic environment j. green marketing

1. Toyota’s promotion of cars using hybrid technology is an example of ________.2. ________ is the process of collecting information about the external marketing environment.3. __________ consists of actions that have the enhancement of society’s welfare as a primary objective.4. The _____________ is the interactive process that occurs in the marketplace among marketers of

directly competitive products.5. ___________ is the process of reducing consumer demand for a good or service to a level that a firm

can supply.6. Marketers standards of conduct and moral values are called ________.7. Factors that influence consumer buying power are part of the __________.8. ___________ consists of a social force designed to aid and protect consumers.9. Attainment of organizational objectives by predicting and influencing the marketing environment is

called __________.10. __________ is a strategy of developing products more quickly than other firms.

1. ANS: J DIF: 1 REF: p. 108 OBJ: 82. ANS: A DIF: 1 REF: p. 80 OBJ: 13. ANS: I DIF: 1 REF: p. 103 OBJ: 84. ANS: C DIF: 1 REF: p. 81 OBJ: 25. ANS: F DIF: 1 REF: p. 93 OBJ: 46. ANS: H DIF: 1 REF: p. 99 OBJ: 77. ANS: E DIF: 1 REF: p. 90 OBJ: 48. ANS: G DIF: 1 REF: p. 97 OBJ: 49. ANS: B DIF: 1 REF: p. 80 OBJ: 1

10. ANS: D DIF: 1 REF: p. 83 OBJ: 2

MULTIPLE CHOICE1. The process of collecting information about the external marketing environment is

a. environmental management.b. marketing research.c. marketing management.d. environmental scanning.

ANS: D DIF: 1 REF: p. 80 OBJ: 1

2. Monitoring local newspapers and television news shows for general information relating to a firm's business would be an example ofa. environmental scanning.b. economic analysis.c. social-political manipulation.d. technological development.

ANS: A DIF: 1 REF: p. 80 OBJ: 1

3. In general, the purpose behind a domestic firm forming a strategic alliance with a firm in a foreign market is toa. stabilize prices in both markets.b. acquire a dominant position in the foreign market.c. acquire local expertise for a company expanding its operations abroad.d. change its identity and appear more local in the foreign market.

71

Chapter 3 The Marketing Environment, Ethics, and Social Responsibility 72

ANS: C DIF: 1 REF: p. 80 OBJ: 1

4. The five dimensions usually considered to constitute the environment of marketing include all of the following excepta. political-legal considerations.b. global factors.c. competitive aspects.d. economic issues.

ANS: B DIF: 1 REF: p. 80 OBJ: 1

5. Attaining organizational objectives by predicting and influencing the competitive, political-legal, economic, technological, and social-cultural environments is referred to asa. research and development.b. marketing research.c. environmental management.d. environmental analysis.


6. Kelvin is analyzing some recent data from the U.S. Census trying to uncover new markets for his firm’s products. Kelvin is engaged in a. environmental management.b. research and development.c. environmental scanning.d. marketing management.


7. A firm is negotiating with the Food and Drug Administration over new regulations that affect one of its products. The firm is engaging ina. marketing management.b. environmental scanning.c. marketing research.d. environmental management.


8. U.S. firms must form strategic alliances with Chinese and Mexican firms when doing business in those countries becausea. such alliances are required by the laws of Mexico and China.b. without such a relationship, the U.S. firm will not be trusted in either place.c. it is necessary to have employees who speak Spanish and Chinese fluently.d. of the differences in engineering and technology between the nations.


9. To acquire regional expertise and comply with local laws in the global market, many domestic firms have found it desirable toa. form political action committees (PACs).b. buy foreign products to beat tariff restrictions.c. form strategic alliances with companies in foreign countries.d. retrench in their home markets.

ANS: C DIF: 1 REF: p. 80 OBJ: 110. A research and development project that results in the granting of a patent would have the most

significant effect on thea. competitive environment.


b. economic environment.c. international environment.d. political environment.


11. Some firms, such as pharmaceutical giants Merck and Pfizer, are able to achieve temporary monopolies from patents granting them the exclusive right, to produce and market inventions they have developed. These patents area. the result of bribery of important government officials.b. very much in violation of all the ethical principles on which business is based.c. probably of little use; for what one firm can patent, another can duplicate.d. rewards for the millions the firms have invested in the research and development process.


12. Monopoly in the competitive environmenta. is enjoyed by few organizations as sole suppliers of a good or service.b. is typical of public utilities -- even more so now than twenty years ago.c. cannot be achieved temporarily even through the use of patents and similar legal devices.d. is the logical extension of a firm's control of its production and labor resources.e. is, all in all, the most common type of competition in the U.S. market.


13. In your local community, which of the following is probably a monopoly?a. A cell phone provider.b. A cable TV provider.c. A supermarket.d. A dentist.


14. An industry with only a few firms is called a(n)a. regulated monopoly.b. pure monopoly.c. perfect competition.d. oligopoly.


15. Which of the following industries would most likely be an oligopoly?a. Cell phone service providers.b. Personal computer manufacturers.c. Automobile manufacturers.d. Generic drug manufacturers.


16. Chevron’s competition with Amoco is a. a form of oligopoly - among them, they're the only game in town.b. monopolistic - the three firms really don't compete at all. Each is selling in a different

market than the other two.c. direct - they're all after the dollar of the person who wants to purchase gasoline and

related products.d. substitution - they're not really similar products.

ANS: C DIF: 2 REF: p. 81, 82 OBJ: 2


17. The problems associated with the decision of whether to lunch at Popeye's, Burger King, Taco Tico, or Little Saigon (a Vietnamese restaurant) illustratea. how direct competition affects consumer behavior.b. how some products and services are competitive substitutes for each other.c. indirect competition.d. the universal nature of competition.

ANS: B DIF: 2 REF: p. 81, 82 OBJ: 2

18. Last summer, the Koublitskaya family had to make the decision of whether to buy a new car, go to the seashore for a couple of weeks, or redo their game room. They chose the beach. This decision illustrates howa. competition can be defined in terms of the effort by dissimilar products to win some of the

consumer's limited supply of discretionary buying power.b. direct competition works. All of these products are essentially the same.c. competition can be defined in terms of the effort by dissimilar products to win some of the

consumer's limited supply of discretionary buying power.d. products that serve similar purposes compete with each other even when they don't seem

similar. These products all provide entertainment.

ANS: A DIF: 2 REF: p. 81, 82 OBJ: 2

19. Marketing decision makers in a firm must constantly monitor competitors' activities - their products, prices, distribution, and promotional efforts - becausea. the competitors may be violating the law and can be reported to the authorities.b. the actions of competitors may threaten the monopoly position of the firm in its industry.c. the actions of competitors may create an oligopoly within an industry.d. new product offerings by a competitor with the resulting competitive variations may require

adjustments to one or more components of the firm's marketing mix.

ANS: D DIF: 1 REF: p. 81, 82 OBJ: 2

20. You’re trying to decide to go to Cancun or Vail during spring break. In this context Cancun and Vail are involved ina. direct competition.b. indirect competition.c. pure competition.d. monopolistic competition.


3.The Marketing Environment, Ethics, and Social Responsibility2011-11-26 01:35


Chapter 3 The Marketing Environment, Ethics, and Social Responsibility

Question Matrix

Chapter ObjectiveQuestion

TypeKnowledge

(KN)Application

(AP)Analysis

(AN)TF 2, 3, 5-7,9-14 1, 4 8MC 1, 3-5, 8, 9 6 2, 7E 1 2, 4 3M 2, 9

TF14, 15, 17, 19, 21-23, 25, 28, 29

20, 26, 27 16, 18, 24

MC 10, 12, 14, 19, 22, 23 11, 13, 16 15, 17, 18, 21E 6-8 5M 4, 10 TF 30-39, 42 41 40

MC24-27, 29-32, 34, 36-39

28, 33 40

E 9 10 11M TF 43-52, 54-56, 58 57 53

MC41, 44, 46, 47, 49-52, 54

42, 45, 53 43, 48

E 13, 14 15 12M 5, 7, 8 TF 59-69 70 MC 55, 56, 60, 61-63 58, 59 57E 17 16 18M

Question TypesTF: True/FalseMC: Multiple choiceE: EssayM: Matching

Chapter ObjectiveQuestion

TypeKnowledge

(KN)Application

(AP)Analysis

(AN)6. Explain how the socio-cultural environment influences marketing.

TF 71-80

MC64, 66, 67, 69, 70, 72-74, 76

65, 71, 75 68

E 20 19 M

7. Describe the role of marketing in society and identify the two major social-issues in marketing.

TF 81-83, 85-90 84 MC 77, 78, 81-83, 85, 86 79, 80 84E 21, 22 23 M 6

8. Identify the four levels of the social responsibility pyramid.

TF 91-97, 100 99 98MC 87-90, 92, 94, 95 91, 93 E 24 25M 1, 3


Question TypesTF: True/FalseMC: Multiple choiceE: EssayM: Matching TRUE/FALSE 1. Steve is analyzing data on trends in consumer tastes. He is engaging in

environmental scanning. ANS: T DIF: 1 REF: p. 80 OBJ: 1STO: AP 2. In addition to planning for change, marketers must set goals to meet concerns of

customers, employees, shareholders, and members of the general public. ANS: T DIF: 1 REF: p. 80 OBJ: 1STO: KN 3. Change may sometimes be gradual and evolutionary, but it is more often the result of

crises. ANS: F DIF: 1 REF: p. 80 OBJ: 1STO: KN 4. Alisha is working on a promotional campaign designed to take advantage of a newly

identified target market. She is working on environmental management. ANS: T DIF: 1 REF: p. 80 OBJ: 1STO: AP 5. It is sufficient that marketers occasionally, even casually, monitor trends and

developments in the business environment. ANS: F DIF: 1 REF: p. 80 OBJ: 1STO: KN 6. Environmental scanning is the attainment of organizational objectives by predicting

influencing the competitive, political-legal, economic, technological, and social-cultural environment..

ANS: F DIF: 1 REF: p. 80 OBJ: 1STO: KN 7. The goal of environmental scanning is to determine whether the trends detected by


analyzing the information scanning yields represent opportunities or threats to the company. ANS: T DIF: 1 REF: p. 80 OBJ: 1STO: KN 8. The growth in of companies that produce organic meat and other food products is an

example of a successful response to environmental changes. ANS: T DIF: 1 REF: p. 80 OBJ: 1STO: AN 9. Environmental management rarely works. Marketers cannot hope to influence the

marketing environment, only respond to changes in it. ANS: F DIF: 1 REF: p. 80 OBJ: 1STO: KN 10. Environmental management involves marketers' efforts to achieve organizational

objectives by predicting and influencing the competitive, political-legal, economic, technological, and social-cultural environments.

ANS: T DIF: 1 REF: p. 80 OBJ: 1STO: KN

11. A strategic alliance is a partnership among firms in which resources and capital are combined to create competitive advantages in older, stagnating markets.

ANS: F DIF: 1 REF: p. 80 OBJ: 1STO: KN

12. Research and development efforts are often designed to influence changes to the technological environment.


13. Strategic alliances are especially common in international marketing where

partnerships with local firms provide needed regional expertise for a company expanding its operations abroad.


14. Strategic alliances are necessary in countries such as China and Mexico where local laws require foreign firms doing business there to work with local companies.



15. In most local communities the cable television provider has a monopoly.


16. If there are high start-up costs and other barriers to entry, an industry is less likely to become an oligopoly.

ANS: F DIF: 1 REF: p. 81 OBJ: 2STO: AN

17. The most direct form of competition comes from marketers of dissimilar products, such as when a supermarket locates right next door to a hardware store.


18. In the U.S. the airline industry is an oligopoly.


19. Chain Store "Hot Topic" competes indirectly with stores like the Gap and American Eagle for teen dollars because it targets high school students who consider themselves "alternative."

ANS: F DIF: 1 REF: p. 82 OBJ: 2STO: KN 20. The competition among Amtrak, auto rental companies, and airlines for the travelers'

dollar is based on the fact that these services can be substituted for each other. ANS: T DIF: 2 REF: p. 82 OBJ: 2STO: AP 21. To say that all firms compete for a limited amount of discretionary buying power is to

recognize that, to some extent, all of them compete for consumers' purchases. ANS: T DIF: 1 REF: p. 82, 83 OBJ: 2STO: KN 22. As part of competitive strategy, some firms gain access to markets or new

technologies through acquisitions and mergers. ANS: T DIF: 2 REF: p. 83 OBJ: 2STO: KN 23. Answering the competitive strategy question "How should we compete?" requires


marketers to make product, pricing, distribution, and promotion decisions that leave their firm at a competitive disadvantage in the marketplace.

ANS: F DIF: 1 REF: p. 83 OBJ: 2STO: KN 24. In the retail marketplace, Neiman-Marcus is known for it selling quality goods at low

prices while Wal-Mart Stores feature superior customer service. ANS: F DIF: 2 REF: p. 83 OBJ: 2STO: AN 25. The decision of whether or not to compete should be based on a firm's resources,

objectives, and expected profit potential. ANS: T DIF: 1 REF: p. 83 OBJ: 2STO: KN 26. Pharmaceutical giant Merck's divestiture of Medco, its pharmacy benefits-management

subsidiary, was brought about by Medco's lack of profitability. ANS: F DIF: 1 REF: p. 83 OBJ: 2STO: AP 27. Texas Instruments Corporation sold its defense electronics business unit to an aircraft

company not because it was unprofitable but because it was a "better fit" with the aircraft company than with TI.

ANS: T DIF: 1 REF: p. 83 OBJ: 2STO: AP 28. Time-based competition is based on a strategy of developing and distributing goods

and services more slowly than competitors. ANS: F DIF: 1 REF: p. 83, 84 OBJ: 2STO: KN 29. The speed at which changes occur in the Internet arena is so great that marketers

count time in "Internet centuries," actual real-time periods of only days or weeks. ANS: F DIF: 1 REF: p. 84, 85 OBJ: 2STO: KN 30. The existing U.S. legal framework was constructed in a logical, systematic manner,

resulting in a coherent and easily understood body of laws. ANS: F DIF: 1 REF: p. 85 OBJ: 3STO: KN


31. Regulations affecting marketing have been enacted only at the federal level. ANS: F DIF: 1 REF: p. 85 OBJ: 3STO: KN 32. To cope with the vast, complex, and changing political-legal environment, many large

business firms maintain in-house legal departments. ANS: T DIF: 1 REF: p. 85 OBJ: 3STO: KN 33. The Sherman Antitrust Act, the Clayton Act, and the Federal Trade Commission Act

are evidence of the federal commitment to maintain a competitive business environment in the United States.

ANS: T DIF: 1 REF: p. 85 OBJ: 3STO: KN 34. The first phase of federal regulation of business was aimed at protecting competitors

and included the Robinson-Patman Act, passed in the 1930s. ANS: F DIF: 1 REF: p. 85 OBJ: 3STO: KN 35. The most recent phase of government regulation of business in the U.S. is the industry

regulation phase that began in the 1970s and continues until today, tightening the rules that bind most firms in most industries.

ANS: F DIF: 1 REF: p. 86 OBJ: 3STO: KN 36. The newest regulatory frontier in the United States is cyberspace, where state and

federal regulators are investigating ways to police the Internet and online services. ANS: T DIF: 1 REF: p. 86 OBJ: 3STO: KN 37. One of the ways the Federal Trade Commission can enforce laws is by issuing a

consent order under which a firm accused of violations can agree to voluntary compliance without admitting guilt.

ANS: T DIF: 1 REF: p. 87 OBJ: 3STO: KN 38. The Federal Food and Drug Act was designed to maintain a competitive environment

in the food and drug industries.


ANS: F DIF: 2 REF: p. 87 OBJ: 3STO: KN 39. The Telecommunications Act of 1996 removed the barriers between local and long

distance phone companies and cable companies. All can now offer phone service and cable service should they so wish.

ANS: T DIF: 1 REF: p. 87 OBJ: 3STO: KN 40. Industry deregulation appears to have worked well in virtually every situation in that it

has led to lower prices and improved service. ANS: F DIF: 2 REF: p. 88 OBJ: 3STO: AN 41. The government is attempting to allow the online marketing industry to self-regulate

itself in areas such as customer privacy. ANS: T DIF: 2 REF: p. 89 OBJ: 3STO: AP 42. There is little an organization can do to influence the political-legal environment. ANS: F DIF: 1 REF: p. 90 OBJ: 3STO: KN 43. The business cycle is composed of three phases: prosperity, depression, and

recovery. ANS: F DIF: 1 REF: p. 90 OBJ: 4STO: KN 44. During periods of economic recession, marketers seldom consider reducing prices,

eliminating marginal products, or providing better service. ANS: F DIF: 1 REF: p. 90 OBJ: 4STO: KN 45. During the recession stage of the business cycle, consumers seldom shift their buying

patterns to basic, functional products that carry low price tags. ANS: F DIF: 1 REF: p. 90 OBJ: 4STO: KN 46. Consumer spending sinks to its lowest level during an economic depression. ANS: T DIF: 1 REF: p. 91 OBJ: 4


STO: KN 47. The last experience the United States had with true economic depression was during

the early 1990s. ANS: F DIF: 1 REF: p. 91 OBJ: 4STO: KN 48. As economic recovery begins after a period of recession, consumer purchasing power

increases but consumers often cautiously restrain their willingness to buy.

ANS: T DIF: 1 REF: p. 92 OBJ: 4STO: KN 49. As economic recovery from a recession strengthens, consumers become more

indulgent, buying more convenience products and higher-priced goods and services.

ANS: T DIF: 1 REF: p. 92 OBJ: 4STO: KN 50. Over the course of the second half of 1990s, the U.S. economy surpassed the

performance of the previous quarter-century.

ANS: T DIF: 1 REF: p. 92 OBJ: 4STO: KN 51. During the recession of the early 2000s, consumer income still rose faster than debt,

delinquent credit card accounts diminished in number, and personal bankruptcy filings declined. ANS: F DIF: 1 REF: p. 92 OBJ: 4STO: KN 52. A major constraint on consumer spending is deflation, which devalues money by

reducing the products it can buy through persistent price increases.

ANS: F DIF: 1 REF: p. 92 OBJ: 4STO: KN 53. During periods of high inflation consumers often accelerate purchasing decisions.

ANS: T DIF: 2 REF: p. 92 OBJ: 4STO: AN 54. Since the early 1980s the annual rate of inflation in the United States has rarely

exceeded 5 percent.



55. Unemployment is defined as the proportion of people in the economy who currently don’t have jobs and are not actively looking for work.

ANS: F DIF: 1 REF: p. 92 OBJ: 4STO: KN 56. Discretionary incomes in the U.S. have risen much faster than the rate of inflation over

the past five years.

ANS: F DIF: 1 REF: p. 93 OBJ: 4STO: KN 57. Electric utilities often list tips on how consumers can use less electricity during the

summer months, and save money on their electric bills. This is an example of demarketing.

ANS: T DIF: 2 REF: p. 93 OBJ: 4STO: AP 58. For the most part U.S. companies have posted higher revenue gains in international

operations than in domestic operations.

ANS: T DIF: 1 REF: p. 94 OBJ: 4STO: KN 59. Technology can quickly make products obsolete but it can just as quickly open new

marketing opportunities. ANS: T DIF: 1 REF: p. 94 OBJ: 5STO: KN 60. Technological innovations create not just new goods and services but also entirely

new industries.

ANS: T DIF: 1 REF: p. 94 OBJ: 5STO: KN 61. Despite its many other wonders, technology can seldom address social concerns.

ANS: F DIF: 1 REF: p. 94 OBJ: 5STO: KN 62. One application of technology that addresses social concerns is the new generation of

diesel engines. These engines achieve remarkable fuel efficiency without many of the negatives typically associated with diesel engines..

ANS: T DIF: 2 REF: p. 94 OBJ: 5STO: AP


63. Research and development efforts by private industry represent a major source of technological innovation.

ANS: T DIF: 1 REF: p. 94, 95 OBJ: 5STO: KN 64. As a percentage of sales, a manufacturing firm such as Ford will likely spend more on

research than a biotechnology company such as Amgen. ANS: F DIF: 2 REF: p. 94, 95 OBJ: 5STO: AN 65. In the United States, research and development by the federal government, including

the military, represents only a minor source of technological innovation.

ANS: F DIF: 1 REF: p. 95 OBJ: 5STO: KN 66. Often foreign firms take technology developed in the United States and turn the

technology into successful products..

ANS: T DIF: 1 REF: p. 95 OBJ: 5STO: KN 67. The microwave oven grew out of a technology used first by the military in radar

systems.

ANS: T DIF: 1 REF: p. 95 OBJ: 5STO: KN 68. Creative applications of technology can benefit society but rarely give firms a definite

competitive edge since other firms can simply copy the technology.. ANS: F DIF: 1 REF: p. 95 OBJ: 5STO: KN 69. The digital computers we now use grew out of technology first developed by the

military to compute the trajectories of artillery shells. ANS: T DIF: 1 REF: p. 95 OBJ: 5STO: KN 70. Marketers who monitor new technology and successfully apply it may also enhance

customer service. ANS: T DIF: 2 REF: p. 96 OBJ: 5STO: AP 71. As a nation, the United States is becoming older, more affluent, and more culturally


diverse. ANS: T DIF: 1 REF: p. 96 OBJ: 6STO: KN 72. The birthrate in the United States is rising and subculture populations are increasing. ANS: F DIF: 1 REF: p. 96 OBJ: 6STO: KN 73. People today are concerned about the environment and value time spent at home with

family and friends. ANS: T DIF: 2 REF: p. 96 OBJ: 6STO: KN 74. The importance of the cultural diversity of the U.S. population has decreased in recent

years. ANS: F DIF: 1 REF: p. 96, 97 OBJ: 6STO: KN 75. The cultural diversity of the United States results in various submarkets, each with

unique values, cultural characteristics, purchasing behaviors, and consumer preferences. ANS: T DIF: 2 REF: p. 96, 97 OBJ: 6STO: KN 76. Learning about cultural and societal differences among countries is of paramount

importance to a firm's success abroad. ANS: T DIF: 1 REF: p. 97 OBJ: 6STO: KN 77. Marketing strategies that work in the United States always work when applied abroad. ANS: F DIF: 1 REF: p. 97 OBJ: 6STO: KN 78. Some organizations, by their nature, are immune to consumer activism. ANS: F DIF: 1 REF: p. 97 OBJ: 6STO: KN 79. Only an actual consumer boycott--not just the threat of one--will lead a firm to make

changes. ANS: F DIF: 2 REF: p. 97 OBJ: 6


STO: KN 80. The basic consumer rights enunciated by President Kennedy in 1962 include "the right

to be safe," referring to the idea that the goods and services people buy should not be injurious in normal use.

ANS: T DIF: 1 REF: p. 97 OBJ: 6STO: KN 81. Marketing's close connection with public issues nonetheless does not invite constant

scrutiny by the public.

ANS: F DIF: 1 REF: p. 98 OBJ: 7STO: KN 82. Relationships with customers, employees, the government, vendors, and society as a

whole form the basis of the social issues that confront contemporary marketers.


83. Marketing's relationship to its external environment has little effect on the firm's eventual success.

ANS: F DIF: 1 REF: p. 98, 99 OBJ: 7STO: KN 84. Ethics concern matters of right and wrong - the responsibility of individuals and firms to

do what is morally right.

ANS: T DIF: 2 REF: p. 99, 100 OBJ: 7STO: AP 85. People develop standards of ethical behavior based on systems of values they acquire

from others.

ANS: F DIF: 1 REF: p. 100 OBJ: 7STO: KN 86. The marketing activity that receives the most attention from those concerned with

ethical considerations is product strategy, but promotion, marketing research, and pricing also get their share of attention.

ANS: F DIF: 1 REF: p. 100 OBJ: 7STO: KN 87. The proliferation of databases, the selling of address lists, and the ease of acquiring

consumer information using the Internet have all increased public concern about threats to


personal privacy.

ANS: T DIF: 1 REF: p. 100, 101 OBJ: 7STO: KN 88. An ethical problem related to distribution strategy is the issue of whether marketers

have the responsibility to serve unsatisfied markets even if the profit potential is slight.

ANS: T DIF: 1 REF: p. 102 OBJ: 7STO: KN 89. Promotion is the component of the marketing mix that gives rise to the fewest ethical

questions.

ANS: F DIF: 1 REF: p. 102 OBJ: 7STO: KN 90. Pricing, since it is the least regulated of all the aspects of a firm's marketing strategy,

generates the largest number of ethical questions.

ANS: F DIF: 1 REF: p. 103 OBJ: 7STO: KN 91. Social responsibility means that marketers accept the obligation to weigh only social

well-being in evaluating their firms' performance.


92. Social responsibility is determined by actions alone and a firm can behave responsibly even when it does so under coercion.


93. Ethically responsible behavior requires more than appropriate actions; ethical intentions must also motivate those actions.

ANS: T DIF: 2 REF: p. 103, 104 OBJ: 8STO: KN

94. The traditional concept of social responsibility of business has had to do with managers' relationships with customers, employees, stockholders, government agencies, and the general public.


95. A socially responsible marketing philosophy would discourage consumers from voicing


their complaints because socially responsible sellers have no obligation to listen to such complaints.

ANS: F DIF: 2 REF: p. 104, 105 OBJ: 8STO: KN

96. Marketers must address several aspects of the ecology in their businesses, including planned obsolescence, pollution control, recycling waste materials, and resource conservation.


97. Ecology is the study of the relationship between organisms and their natural environments.

ANS: T DIF: 1 REF: p. 107 OBJ: 8STO: KN 98. A firm designs a product to only last for two years. Once the product stops working, it

must be thrown away. This firm is behaving in a socially responsible manner.


99. When firms create products such as disposable diapers, ballpoint pens, razors, and cameras, they may find themselves accused of being ecologically irresponsible by practicing planned obsolescence.

ANS: T DIF: 2 REF: p. 107 OBJ: 8STO: AP

100. Green marketing involves the production, promotion, and reclamation of environmentally sensitive products.

ANS: T DIF: 1 REF: p. 108 OBJ: 8STO: KNMULTIPLE CHOICE

1. The process of collecting information about the external marketing environment isa. environmental management.b. marketing research.c. marketing management.d. environmental scanning.

ANS: D DIF: 1 REF: p. 80 OBJ: 1STO: KN


2. Monitoring local newspapers and television news shows for general information relating to a firm's business would be an example of

a. environmental scanning.b. economic analysis.c. social-political manipulation.d. technological development.

ANS: A DIF: 1 REF: p. 80 OBJ: 1STO: AN

3. In general, the purpose behind a domestic firm forming a strategic alliance with a firm in a foreign market is to

a. stabilize prices in both markets.b. acquire a dominant position in the foreign market.c. acquire local expertise for a company expanding its operations abroad.d. change its identity and appear more local in the foreign market.

ANS: C DIF: 1 REF: p. 80 OBJ: 1STO: KN

4. The five dimensions usually considered to constitute the environment of marketing include all of the following except

a. political-legal considerations.b. global factors.c. competitive aspects.d. economic issues.

ANS: B DIF: 1 REF: p. 80 OBJ: 1STO: KN 5. Attaining organizational objectives by predicting and influencing the competitive,

political-legal, economic, technological, and social-cultural environments is referred to asa. research and development.b. marketing research.c. environmental management.d. environmental analysis.


6. Kelvin is analyzing some recent data from the U.S. Census trying to uncover new

markets for his firm’s products. Kelvin is engaged ina. environmental management.b. research and development.c. environmental scanning.d. marketing management.


ANS: C DIF: 1 REF: p. 80 OBJ: 1STO: AP

7. A firm is negotiating with the Food and Drug Administration over new regulations that affect one of its products. The firm is engaging in

a. marketing management.b. environmental scanning.c. marketing research.d. environmental management.

ANS: D DIF: 1 REF: p. 80 OBJ: 1STO: AN

8. U.S. firms must form strategic alliances with Chinese and Mexican firms when doing business in those countries because

a. such alliances are required by the laws of Mexico and China.b. without such a relationship, the U.S. firm will not be trusted in either place.c. it is necessary to have employees who speak Spanish and Chinese fluently.d. of the differences in engineering and technology between the nations.

ANS: A DIF: 1 REF: p. 80 OBJ: 1STO: KN

9. To acquire regional expertise and comply with local laws in the global market, many domestic firms have found it desirable to

a. form political action committees (PACs).b. buy foreign products to beat tariff restrictions.c. form strategic alliances with companies in foreign countries.d. retrench in their home markets.


10. A research and development project that results in the granting of a patent would have the most significant effect on the

a. competitive environment.b. economic environment.c. international environment.d. political environment.

ANS: A DIF: 1 REF: p. 81 OBJ: 2STO: KN 11. Some firms, such as pharmaceutical giants Merck and Pfizer, are able to achieve

temporary monopolies from patents granting them the exclusive right, to produce and market


inventions they have developed. These patents area. the result of bribery of important government officials.b. very much in violation of all the ethical principles on which business is based.c. probably of little use; for what one firm can patent, another can duplicate.d. rewards for the millions the firms have invested in the research and development process.

ANS: D DIF: 2 REF: p. 81 OBJ: 2STO: AP 12. Monopoly in the competitive environmenta. is enjoyed by few organizations as sole suppliers of a good or service.b. is typical of public utilities -- even more so now than twenty years ago.c. cannot be achieved temporarily even through the use of patents and similar legal devices.d. is the logical extension of a firm's control of its production and labor resources.e. is, all in all, the most common type of competition in the U.S. market.

ANS: A DIF: 2 REF: p. 81 OBJ: 2STO: KN 13. In your local community, which of the following is probably a monopoly?a. A cell phone provider.b. A cable TV provider.c. A supermarket.d. A dentist.

ANS: B DIF: 1 REF: p. 81 OBJ: 2STO: AP 14. An industry with only a few firms is called a(n)a. regulated monopoly.b. pure monopoly.c. perfect competition.d. oligopoly.

ANS: D DIF: 1 REF: p. 81 OBJ: 2STO: KN 15. Which of the following industries would most likely be an oligopoly?a. Cell phone service providers.b. Personal computer manufacturers.c. Automobile manufacturers.d. Generic drug manufacturers.

ANS: C DIF: 3 REF: p. 81 OBJ: 2STO: AN


16. Chevron’s competition with Amoco isa. a form of oligopoly - among them, they're the only game in town.b. monopolistic - the three firms really don't compete at all. Each is selling in a different

market than the other two.c. direct - they're all after the dollar of the person who wants to purchase gasoline and

related products.d. substitution - they're not really similar products.

ANS: C DIF: 2 REF: p. 81, 82 OBJ: 2STO: AP 17. The problems associated with the decision of whether to lunch at Popeye's, Burger

King, Taco Tico, or Little Saigon (a Vietnamese restaurant) illustratea. how direct competition affects consumer behavior.b. how some products and services are competitive substitutes for each other.c. indirect competition.d. the universal nature of competition.

ANS: B DIF: 2 REF: p. 81, 82 OBJ: 2STO: AN 18. Last summer, the Koublitskaya family had to make the decision of whether to buy a

new car, go to the seashore for a couple of weeks, or redo their game room. They chose the beach. This decision illustrates how

a. competition can be defined in terms of the effort by dissimilar products to win some of the consumer's limited supply of discretionary buying power.

b. direct competition works. All of these products are essentially the same.c. competition can be defined in terms of the effort by dissimilar products to win some of the

consumer's limited supply of discretionary buying power.d. products that serve similar purposes compete with each other even when they don't seem

similar. These products all provide entertainment.

ANS: A DIF: 2 REF: p. 81, 82 OBJ: 2STO: AN 19. Marketing decision makers in a firm must constantly monitor competitors' activities -

their products, prices, distribution, and promotional efforts - becausea. the competitors may be violating the law and can be reported to the authorities.b. the actions of competitors may threaten the monopoly position of the firm in its industry.c. the actions of competitors may create an oligopoly within an industry.d. new product offerings by a competitor with the resulting competitive variations may require

adjustments to one or more components of the firm's marketing mix.

ANS: D DIF: 1 REF: p. 81, 82 OBJ: 2STO: KN 20. You’re trying to decide to go to Cancun or Vail during spring break. In this context

Cancun and Vail are involved in


a. direct competition.b. indirect competition.c. pure competition.d. monopolistic competition.

ANS: B DIF: 2 REF: p. 82 OBJ: 2STO: AP 21. Lockheed Martin's success in winning the largest Defense Department contract ever

by proving it could get the first plane of a new type in the air in just four years illustrates the importance of

a. rapid prototyping of new products.b. the process called "demarketing."c. time-based competition.d. the legal environment.

ANS: C DIF: 2 REF: p. 83, 84 OBJ: 2STO: AN 22. Many participants in the computer-chip industry pursue time-based competition

strategies that are based ona. doing exactly what their competitors do, only a little later.b. a timely and uninterrupted flow of products to target markets.c. working on several generations of technology simultaneously.d. being reactive rather than proactive in the competitive arena.

ANS: C DIF: 1 REF: p. 83, 84 OBJ: 2STO: KN 23. The existence of the concept of "Internet years," actually periods of only a few weeks,

revealsa. how crucial being an effective time-based competitor can be in the high-tech world of

computer hardware.b. the speed with which computer chips operate. Their operating systems make the weeks

seem like years.c. the lengthening of the work day. People are working so much they feel that weeks

represent years.d. how adaptive we must be to modern technology. We must adapt our work habits to those

of our computers.

ANS: A DIF: 2 REF: p. 83, 84 OBJ: 2STO: KN 24. Among the laws typical of the phase of U.S. government regulation known as the

antimonopoly period was thea. Robinson-Patman Act.b. Consumer Credit Protection Act.


c. Clayton Act.d. Motor Carrier Act.

ANS: C DIF: 1 REF: p. 58 OBJ: 3STO: KN 25. One of the laws designed to maintain a competitive environment that was enacted by

the U.S. government is thea. Robinson-Patman Act of 1936.b. Consumer Credit Protection Act of 1968.c. Sherman Act of 1890.d. Motor Carrier Act of 1980.

ANS: C DIF: 1 REF: p. 85, 87 OBJ: 3STO: KN 26. During the phase of the history of U.S. government regulation called industry

deregulation, government sought toa. protect competitors by creating new federal agencies to police industry activities.b. prevent chain stores from competing unethically with smaller local operators.c. prevent concentration of industrial power in the hands of a few.d. increase competition in industries such as telecommunications, utilities, and

transportation.

ANS: D DIF: 1 REF: p. 85 OBJ: 3STO: KN 27. The Sherman Act and the FTC Act, though originally passed to maintain a competitive

environment, also had as an underlying objective that ofa. protecting consumers.b. deregulating competition.c. regulating a specific industry.d. providing for the common defense.

ANS: A DIF: 1 REF: p. 85 OBJ: 3STO: KN 28. Only one of the following industries has not been affected by changes in government

laws designed to reduce regulation and increase competition. It isa. telecommunications.b. the beverage industry.c. utilities such as electricity and natural gas service.d. the transportation industry.

ANS: B DIF: 2 REF: 85, 86 OBJ: 3STO: AP


29. The federal agency with the authority to enforce U.S. laws regulating unfair business

practices and prohibiting unfair and deceptive advertising is thea. Consumer Product Safety Commission.b. Department of Commerce.c. Department of the Treasury.d. Federal Trade Commission.

ANS: D DIF: 1 REF: p. 86 OBJ: 3STO: KN 30. Which of the following federal agencies concerns itself with regulation of the use of

telephones, radio, and television?a. Federal Power Commissionb. Consumer Products Safety Commissionc. Federal Communications Commissiond. Environmental Protection Agency

ANS: C DIF: 1 REF: p. 86 OBJ: 3STO: KN 31. All of the following are federal regulatory agencies excepta. New York Stock Exchange.b. Food and Drug Administration.c. Securities and Exchange Commission.d. Federal Elections Commission.

ANS: A DIF: 2 REF: p. 86 OBJ: 3STO: KN 32. This federal agency wields the broadest powers of any agency to influence marketing

activities. It is thea. Federal Communications Commission.b. Interstate Commerce Commission.c. Federal Power Commission.d. Federal Trade Commission.

ANS: D DIF: 1 REF: p. 86 OBJ: 3STO: KN 33. The FTC makes a determination that a proprietary medication is superior to aspirin in

reducing pain, but is not easier on the stomach. The agency requires the manufacturer of the pain reliever to run advertisements retracting the claim of reduced stomach distress. The new ads are designed to

a. eliminate differentiation resulting from the previous ads.b. reverse the effect of reciprocity caused by the earlier ads.c. correct the deceptive claims contained in the prior advertisements.d. produce a whole new image for the product.


ANS: C DIF: 2 REF: p. 86 OBJ: 3STO: AP 34. The primary purpose of the Federal Food and Drug Act of 1906 is toa. combat monopoly in the pharmaceutical and meat-packing industries.b. regulate selling practices of the food and drug industries within the United States.c. protect American consumers from adulterated and misbranded drugs and food products.d. protect competitors within the two industries.

ANS: C DIF: 1 REF: p. 87 OBJ: 3STO: KN 35. Zardoz believes that one of its competitors is selling a product well under cost in an

attempt to drive Zardoz and other firms out of the industry. This firm could be guilty of violating which federal law?

a. The Sherman Antitrust Actb. The North American Free Trade Agreementc. The Clayton Actd. The Robinson-Patman Act

ANS: D DIF: 2 REF: p. 87 OBJ: 3STO: AP 36. This recent law removed barriers between local and long-distance phone and cable

companies, allowing all of them to offer both long distance and cable service if they chose to do so. The law is titled the

a. Privacy in Communications Act.b. Omnibus Communications Enabling Act.c. Telecommunications Act of 1996.d. Telecommunications Reconstruction Act.

ANS: C DIF: 1 REF: p. 87 OBJ: 3STO: KN 37. The ____________ prohibits selling products at unreasonably low prices simply to

eliminate competition.a. Robinson-Patman Actb. Sherman Antitrust Actc. Clayton Actd. Federal Trade Commission Act



38. Self regulatory groups representa. organizations designed to prevent prosecution of their members by presenting a united

front to regulators.b. business attempts to set guidelines for responsible business conduct.c. failed attempts to prevent passage of new regulations over an industry.d. organizations that get legislatures to pass laws that regulate them.

ANS: B DIF: 1 REF: p. 89 OBJ: 3STO: KN 39. Given the difficulty of regulating the industry, the federal government is using self-

regulation as a starting point in which industry?a. Online marketing.b. Telephone service marketing.c. Power resellers.d. The airline industry.

ANS: A DIF: 2 REF: p. 89 OBJ: 3STO: KN 40. Furst Group has been called a "switchless reseller" in the communications industry

becausea. it leases its high-tech equipment to BellSouth to service their long-distance lines.b. having no equipment of its own, it buys blocks of long-distance time cheaply from major

carriers and sells it at a discount.c. it filed the first lawsuit to protest deregulation of the communications industry.d. it has not changed its way of doing business in over forty years.

ANS: B DIF: 3 REF: p. 90 OBJ: 3STO: AN 41. It is the belief of many economists that the United States will never again suffer the

effects of a true depression. If this is true, then future recessions will be followed bya. periods of prosperity.b. recoveries.c. inflationary periods.d. stagflation.

ANS: B DIF: 1 REF: p. 90 OBJ: 4STO: KN 42. During periods of recession, it is still possible to compete bya. reducing promotional outlays to save money.b. raising prices to improve company and product image.c. curtailing customer service because people will accept such cuts.d. offering value-priced products to appeal to cost-conscious buyers.


ANS: D DIF: 2 REF: p. 90 OBJ: 4STO: AP 43. Consumer demand for which type of product typically falls the least during a

recession?a. Luxury products.b. Big-ticket items such as new cars and homes.c. Discretionary purchases.d. Necessities.

ANS: D DIF: 1 REF: p. 90 OBJ: 4STO: AN 44. No depressions have occurred in the United States since thea. 1920s.b. 1930s.c. 1940s.d. 1950s.

ANS: B DIF: 1 REF: p. 90 OBJ: 4STO: KN 45. Which of the following would not be a wise marketing strategy during a recession?a. Raise prices to make up for lost sales.b. Increase promotional outlays to create more interest in the store or product.c. Improve customer service to attract more trade.d. Launch lower-priced products.

ANS: A DIF: 2 REF: p. 90, 91 OBJ: 4STO: AP 46. During recent recessions, consumers have shifted their buying patterns bya. borrowing money to buy goods.b. increasing spending across the board.c. buying now in the belief that prices will rise later.d. emphasizing more basic, functional products with low price tags.

ANS: D DIF: 1 REF: p. 91 OBJ: 4STO: KN 47. Consumer spending reaches its lowest level during periods ofa. recession.b. stagnation.c. depression.d. prosperity.


ANS: C DIF: 1 REF: p. 91 OBJ: 4STO: KN 48. Which retailer would like benefit the most during a period of strong economic growth?a. Wal-Mart Stores.b. Target.c. Nordstrom’sd. Home Depot

ANS: C DIF: 2 REF: p. 91 OBJ: 4STO: AN 49. When prices rise due to excess demand and increasing cost of the factors of

production, the resulting condition of monetary devaluation is known asa. recession.b. depression.c. inflation.d. recovery.

ANS: C DIF: 1 REF: p. 92 OBJ: 4STO: KN 50. During periods of inflation prices _________ and consumer demand __________.a. increases; decreases.b. increases; increases.c. decreases; increases.d. decreases; increases.

ANS: B DIF: 1 REF: p. 92 OBJ: 4STO: KN 51. Unemployment begins to rise during periods of economica. recovery.b. recession.c. prosperity.d. retrogression.

ANS: B DIF: 1 REF: p. 92 OBJ: 4STO: KN 52. When looking at consumer income, marketers are most interested ina. discretionary income.b. deferred income.c. inflationary income.d. disposable income


ANS: A DIF: 1 REF: p. 93 OBJ: 4STO: KN 53. During the recent period of high gasoline prices many oil companies promoted ways to

save gas, such as making sure tires are properly inflated. This is an example ofa. supply control.b. counter advertising.c. brand promotion.d. demarketing.

ANS: D DIF: 2 REF: p. 93 OBJ: 4STO: AP 54. All of the following statements are correct excepta. Europe is the fastest growing market for cell phone suppliers and equipment makers.b. for the most part U.S. companies have posted higher revenue gains from international

operations than from domestic operations.c. exports to China are growing faster than exports to the U.S.d. next to the U.S., China may soon become the most important engine of economic growth.

ANS: A DIF: 2 REF: p. 93, 94 OBJ: 4STO: KN 55. New technology results in new goods and services, and it also cana. lower the quality of existing products.b. lower the available level of customer service.c. reduce prices through new production and distribution methods.d. bring back products that were considered obsolete.

ANS: C DIF: 1 REF: p. 94 OBJ: 5STO: KN 56. New technology often results in which of the following?a. aggregate reduction in the number of new marketing opportunitiesb. new goods and services for consumersc. deterioration in customer service qualityd. increased prices through application of the technology

ANS: B DIF: 1 REF: p. 94 OBJ: 5STO: KN 57. As a percentage of sales, which of the following companies would most likely spend

the greatest amount on research?a. An aircraft manufacturer such as Boeingb. A consumer products company such as Gillettec. A computer hardware manufacturer such as Dell


d. A biotechnology company such as Amgen.

ANS: D DIF: 3 REF: p. 94 OBJ: 5STO: AN 58. Toyota's Prius and Honda's hybrid Civic are examples of technological products

inspired bya. style considerations in the Japanese automobile industry.b. social pressure to develop more fuel-efficient vehicles with fewer dangerous emissions. c. the desire of many engineers to simply make interesting products.d. the realization that Japanese people didn't need large, high-speed cars.

ANS: B DIF: 1 REF: p. 94 OBJ: 5STO: AP 59. The introduction by Pfizer Pharmaceuticals of Lipitor, the cholesterol-lowering drug

that ranks as the biggest-selling prescription drug in the U.S., is an example ofa. how research and development efforts by private industry represent a major source of

technological innovation.b. the importance of research done for military purposes to the advancement of technology.c. the critical role played by colleges and universities in technological progress.d. how, every once in a while, an individual, working alone, can make a breakthrough.

ANS: A DIF: 1 REF: p. 94, 95 OBJ: 5STO: AP 60. The presence in our personal cars and trucks of air bag safety restraint systems

illustratesa. how research and development efforts by private industry represent a major source of

technological innovation.b. the importance of research done for military purposes to the advancement of technology.c. the critical role played by colleges and universities in technological progress.d. how, every once in a while, an individual, working alone, can make a breakthrough.

ANS: B DIF: 1 REF: p. 94, 95 OBJ: 5STO: KN 61. If you own a car or SUV that is less than ten years old, your car is equipped with as

many as four security restraint systems using airbags. The technology for these devices comes from

a. research done by the Air Force for military purposes.b. engineering experimentation done at Purdue University.c. research and development efforts funded by private industry.



STO: KN 62. Which of the following technologies was invented in the United States but turned into a

successful product by firms in Japan?a. the personal computerb. Velcroc. the laser printerd. videocassette recorders

ANS: D DIF: 2 REF: p. 95 OBJ: 5STO: KN 63. Every once in a while, new technology does not enjoy major success or, after an

auspicious start, suffers setbacks. One example of this isa. the failure of in-home shopping to acquire the market predicted for it.b. the relative infrequency of use of automated teller machines (ATMs).c. the reduction in online stock trading since 2001 that resulted in serious losses to smaller

firms that didn't have a larger umbrella organization to protect them.d. the abandonment of the online hairstyling market by most major salons.

ANS: C DIF: 2 REF: p. 95, 96 OBJ: 5STO: KN 64. The population of the United States is becoming, overall,a. younger, better educated, and more homogeneous.b. older, poorer, and less well-educated.c. older, more diverse, and more affluent.d. younger, better educated, and less affluent.

ANS: C DIF: 1 REF: p. 96 OBJ: 6STO: KN 65. Assume that Quaker Oats is offering a new product designed to meet the nutritional

needs of women between the ages of 45 and 60. Quaker Oats is responding toa. a demographic trend.b. an economic trend.c. a social trend.d. a political trend.

ANS: A DIF: 1 REF: p. 96 OBJ: 6STO: AP 66. All of the following are current demographic trends in the United States excepta. the population is getting older.b. the population is getting more diverse.c. the birth rate is rising.d. the population is getting more affluent.


ANS: C DIF: 1 REF: p. 96 OBJ: 6STO: KN 67. The U.S. birthrate is, at the present time,a. increasing.b. decreasing.c. remaining about the same.d. expected to increase during the next ten years.

ANS: B DIF: 1 REF: p. 96 OBJ: 6STO: KN 68. The idea advanced by one creative marketer that, in the twenty-first century, food

products "like mother used to make" are going to have to come in a wide variety of flavor intensities, spice mixes, and even contain different meats and vegetables for different market segments is indicative of

a. problems with the ozone layer in the atmosphere.b. the increasing average age of the population.c. the limited number of submarkets available to the food industry.d. cultural diversity within the United States.

ANS: D DIF: 2 REF: p. 96, 97 OBJ: 6STO: AN 69. The social force within the environment that aids and protects the buyer by exerting

legal, moral, and economic pressure on business is known asa. competition.b. consumerism.c. demographic diversity.d. socio-cultural influences.

ANS: B DIF: 1 REF: p. 97 OBJ: 6STO: KN 70. The concept that consumers should be able to choose from among a range of goods

and services is embodied in President Kennedy's "consumer rights" speech of 1962 asa. the right to be heard.b. the right to be safe.c. the right to be informed.d. the right to choose freely.



71. The concept that consumers should be provided with enough education and product information to be responsible buyers is embodied in President Kennedy's "consumer rights" speech of 1962 as

a. the right to be heard. b. the right to be safe.c. the right to be informed. d. the right to choose freely.

ANS: C DIF: 2 REF: p. 97 OBJ: 6STO: AP 72. Which of the following situations does not exemplify consumer activism?a. animal-rights activists protesting against furriers.b. pressure applied against tuna fisheries to avoid killing dolphins.c. application of pressure on businesses to recycle paper products.d. voluntary nutritional labeling of food products by their manufacturers.

ANS: D DIF: 1 REF: p. 97 OBJ: 6STO: KN 73. Despite the pressures of consumerism, firms do not always give in to consumerist

demands. The main reason for this is thata. consumerists seldom know what they are talking about.b. to survive, firms must achieve reasonable profit objectives.c. consumers represent only a small segment of the total market.d. the demands of individual consumers represent little power in the marketplace.

ANS: B DIF: 1 REF: p. 97 OBJ: 6STO: KN

74. In recognition of the importance of the social-cultural environment in marketing decision making, many firms have created a new position to study the social environment's effect on their organization. The title of this position is typically

a. manager of public policy research.b. government effects officer.c. intellectual property manager.d. director of norms and standards.


75. Zardoz has recently expanded its customer feedback section of its Web site. Which basic consumer rights does this change reflect?

a. the right to be heardb. the right to be safec. the right to choose freelyd. the right to be informed


ANS: A DIF: 2 REF: p. 97 OBJ: 6STO: AP

76. Of the following, which is not one of the social variables that must be considered by marketers in decision making?

a. time zoneb. demographicsc. normsd. values

ANS: A DIF: 1 REF: p. 97, 98 OBJ: 6STO: KN

77. The majority of ethical questions are raised in connection with which component of marketing strategy?

a. productb. distributionc. priced. promotion


78. Invasion of personal privacy is a critical ethical issue ina. product strategy.b. promotional strategy.c. marketing research.d. pricing strategy.

ANS: C DIF: 1 REF: p. 100 OBJ: 7STO: KN 79. The use of bottles with concave bottoms that give the impression that the containers

hold more liquid than they do raises issues of ethics ina. product strategy.b. price strategy. c. packaging strategy.d. distribution strategy.

ANS: A DIF: 2 REF: p. 101 OBJ: 7STO: AP 80. Ethical questions relating to the use of larger packages than are necessary, oddly

sized packages, and bottles with concave bottoms are within the ethical realm of a. the product aspect of packaging.


b. planned obsolescence.c. overall product quality.d. brand familiarity and the preferences of consumers.

ANS: A DIF: 2 REF: p. 101, 102 OBJ: 7STO: AP 81. Television advertising that suggests that consumers take a proactive role in family

health care by requesting that their physicians prescribe specific medications they see advertised raises issues of ethics in

a. price strategy.b. promotion strategy.c. distribution strategy.d. product strategy.

ANS: B DIF: 1 REF: p. 102 OBJ: 7STO: KN 82. The question of who should control the channel can become an ethical issue in a. product strategy.b. packaging strategy.c. distribution strategy.d. price strategy.

ANS: C DIF: 1 REF: p. 102 OBJ: 7STO: KN 83. A campaign touting the merits of a $12 a day drug to counter excess levels of

phosphorous in kidney-dialysis patients when a $1 a day substitute works equally well could be considered an ethical transgression in the area of

a. promotion.b. pricing.c. personal privacy.d. distribution.

ANS: A DIF: 2 REF: p. 102 OBJ: 7STO: KN 84. Recently some big drug makers have been questioned about the ethics of some of

their advertising. Many of these ads urge get people to ask their doctors to prescribe a new, and more expensive, drug rather than an older, cheaper drug that may work just as well. Which aspect of the marketing strategy does this criticism address?

a. promotional strategyb. pricing strategyc. product strategyd. distribution strategy


ANS: A DIF: 3 REF: p. 102, 103 OBJ: 7STO: AN 85. Which of the following is the most highly regulated aspect of marketing strategy?a. promotionb. productc. pricingd. distribution

ANS: C DIF: 1 REF: p. 103 OBJ: 7STO: KN 86. The idea that marketers have an obligation to warn customers of impending price or

returns policy changes raises ethical issues in the area ofa. personal privacy.b. pricing.c. product.d. distribution.

ANS: B DIF: 1 REF: p. 103 OBJ: 7STO: KN 87. Traditionally, a firm was considered socially responsible if all it did wasa. address itself to water pollution as part of its activities.b. attempt to satisfy the needs of its customers, employees, and stockholders.c. attempt to make assembly line work less boring and isolated.d. assure itself it was not depleting irreplaceable natural resources.

ANS: B DIF: 1 REF: p. 103 OBJ: 8STO: KN 88. Social responsibility demands that marketers accept an obligation to give equal weight

toa. the demands of activists, the government, and employees in product development.b. morality, philosophy, and practicality in their conduct of marketing activities.c. profits, customer satisfaction, and social well-being in evaluating their firm's performance.d. the wishes of the board of directors, the executive committee, and design personnel in

corporate management.

ANS: C DIF: 1 REF: p. 103, 104 OBJ: 8STO: KN 89. The traditional approach to social responsibility included in its range all of the

following excepta. the firm's managers as responsible entities.b. customers who should receive quality products priced reasonably.


c. the general public who don't have any interest in the matter anyway.d. stockholders who should receive a reasonably return on their investment.e. employees who should be paid decently and work safely.

ANS: C DIF: 1 REF: p. 103, 104 OBJ: 8STO: KN 90. Government requirements may force firms to take socially responsible actions, but

ethically responsible behavior by businesses a. requires ethical intention as its motivator.b. must be forced upon them by threats to their profitability.c. is usually the result of consumer activism.d. seldom occurs without strong pressure being brought to bear from outside the firms.

ANS: A DIF: 1 REF: p. 103, 104 OBJ: 8STO: KN 91. A firm’s philosophy when dealing with society as a whole is to “play by the rules” and

no more. What level of corporate social responsibility is this firm exhibiting?a. legalb. economicc. ethicald. philanthropic

ANS: A DIF: 2 REF: p. 104 OBJ: 8STO: AP 92. Which is the highest level of corporate social responsibility?a. economicb. legalc. ethicald. philanthropic

ANS: D DIF: 2 REF: p. 104 OBJ: 8STO: KN 93. A firm donates money and used office equipment to a local school system. It also

contributed money and labor to build two new parks. What level of corporate social responsibility is this firm exhibiting?

a. economicb. legalc. philanthropicd. ethical

ANS: C DIF: 2 REF: p. 104 OBJ: 8STO: AP


94. Planned obsolescence is the process of producing and offering for salea. products that, even on their introduction, significantly lag available technology.b. products with limited durability, such as disposable diapers and razors.c. items so limited in what they can do they are quickly discarded.d. things that simply cannot do what they are supposed to and quickly fail in service.

ANS: B DIF: 1 REF: p. 107 OBJ: 8STO: KN 95. The production, promotion, and reclamation of environmentally sensitive products has

come to be calleda. pollution.b. recycling.c. planned obsolescence.d. green marketing.


ESSAY

1. Define environmental scanning. What are the five components of the external marketing environment?

ANS: Environment scanning is the process of collecting information about the external marketing environment to identify and interpret potential trends. The five components of the external marketing environment are economic, competitive, political-legal, socio-cultural, and technological.

DIF: 2 REF: p. 80 OBJ: 1 STO: KN 2. What can managers do to exercise environmental management over the socio-cultural

environment?

ANS: Changes in the marketing environment, including socio-cultural, are often beyond the control of individual marketers. However managers need to predict their impact on marketing decisions and to modify operations to meet changing market needs.DIF: 2 REF: p. 80 OBJ: 1 STO: AP 3. Explain how the response of organic food producers to growing consumer concerns

over food safety is an example of environmental scanning.

ANS: Environmental scanning attempts to uncover potential trends in the marketing environment. The first


reported case in the U.S. of so-called mad cow disease heightened consumer concern about the safety of foods, especially the safety of meat. Purveyors of natural or organic meat products responded to this trend by shifting to more aggressive marketing tactics.

DIF: 2 REF: p. 80 OBJ: 1 STO: AN 4. Define and describe environmental management in relation to the marketing

environment. ANS: a. Environmental management involves marketing's efforts to achieve organizational

objectives by predicting and influencing the competitive, political-legal, economic, technological, and social-cultural environments.

b. These environments are dynamic rather than static but can be influenced by managerial action.

c. Political action such as joining a political action committee (PAC) can affect the passage of legislation in the political-legal environment.

d. Strategic alliances can affect competitive advantage in the competitive environment, particularly in the international market.

e. Research and development can result in breakthroughs in the technological environment.f. Managers must continually re-evaluate their decisions in light of changing conditions.

DIF: 2 REF: p. 80 OBJ: 1 STO: AP 5. Explain the difference between a monopoly and an oligopoly. What creates

oligopolies?

ANS: A monopoly is a situation where only one supplier of a good or service exists. An oligopoly is a competitive situation where only a limited number of suppliers exist. Oligopolies are often created in industries with high-start up costs and other barriers to entry. These barriers to entry make it difficult for new suppliers to enter the industry.

DIF: 2 REF: p. 81 OBJ: 2 STO: AN 6. Discuss, giving examples of each, the three types of competition in the marketplace. ANS: a. Direct competition occurs when similar products vie for a share of a single market or

market segment. The text gives as examples of this BP versus Marathon; Motorola versus Nokia; and Hot Topic versus Gap and American Eagle. Other examples might include McDonald's versus Burger King, Ford versus Chevrolet (or Toyota versus Nissan), and The Daily News versus The Morning Advocate.

b. Substitution is the competitive state when dissimilar products compete to satisfy the same needs, such as recreation, sustenance, or entertainment. One might choose to bowl or play cards for recreation, to eat at a fine French restaurant or a Chinese chop suey parlor for dinner, or to go to the symphony or a tractor pull for entertainment.

c. Finally, a condition that might be called universal competition exists. This is the effort by all


vendors to win a share of the consumer's discretionary buying power. In essence, everything that a person has the choice of buying or not buying competes for those dollars.

DIF: 2 REF: p. 81, 82, 83 OBJ: 2 STO: KN 7. The type of competitive strategy a firm uses is based on the answers to three

questions. Discuss these questions and their possible answers. ANS: The three questions that determine the competitive strategy of the firm are a. Should we compete? The answer may be no, in which case the decision-maker has come

to the conclusion that there is not a good match between the proposed market entry and the company's resources, its objectives, or its profit expectations.

b. In what markets should we compete? If the answer to the above question is "yes," then the firm's limited resources must be examined to determine the scale and nature of its competitive effort. The resources must be allocated to the areas of greatest opportunity.

c. How should we compete? Answering this question requires marketers to make product, pricing, distribution, and promotion decisions designed to give the firm a competitive advantage in the marketplace.

DIF: 1 REF: p. 83 OBJ: 2 STO: KN 8. Explain time-based competition. ANS: Time based competition is the strategy of developing and distributing products more quickly than competitors. Some students may note that the first-mover strategy (discussed in Chapter 2) follows time-based competition.DIF: 2 REF: p. 83 OBJ: 2 STO: KN 9. What is the purpose of antitrust legislation? ANS: The purpose of antitrust legislation is to maintain a competitive environment and reduce the concentration of industry power in the hands of a small number of firms.DIF: 2 REF: p. 85 OBJ: 3 STO: KN 10. Discuss the four phases of federal regulation of business in the United States. ANS: a. Phase 1: the antimonopoly period, beginning in the late 1800s and extending into the early

1900s, featured laws that were enacted to maintain a competitive environment and to reduce the trend toward concentration of industrial power in the hands of a few individuals.

b. Phase 2: the pro-competitive (protection of competition) period began in the 1930s as an effort to protect independent merchants from the machinations of the larger chains.

c. Phase 3: the post-World War II phase that focused on protection of the consumer.


d. Phase 4: the phase of deregulation beginning in the late 1970s and which seeks to increase competition by discontinuing or reducing industry regulation.

DIF: 3 REF: p. 85-88 OBJ: 3 STO: AP 11. Name a self-regulatory group and describe its mission. Which industry is the federal

government using self regulation as a starting point? Discuss.ANS: Examples include the Better Business Bureau and the Direct Marketing Association. These groups require members to adhere to a code of conduct and can sanction members who violate the code.The federal government is using self-regulation as a starting point in online marketing activities. The Internet poses a number of regulatory challenges and the FTC and other government regulators are allowing a relatively high degree of self regulation in such areas as privacy. If self-regulation appears to be inadequate, government regulation may be forthcoming.DIF: 3 REF: p. 88-90 OBJ: 3 STO: AN 12. Assume your firm produces both consumer necessities and consumer luxuries. How

will the economic environment affect the demand for both types of products? ANS: The demand for consumer necessities is much less sensitive to the economic environment than the demand for consumer luxuries. For example, people will still buy food products even during an economic downturn. They may change their buying habits, however, substituting cheaper products for more expensive ones. During periods of economic prosperity, the demand for consumer luxuries will generally increase faster than the demand for consumer necessities since consumers have greater amounts of discretionary income. DIF: 3 REF: p. 90-93 OBJ: 4 STO: AN 13. Discuss in some detail the economic factors that influence marketing decision making

and consumer buying behavior. ANS: a. The business cycle is a pattern of economic activity that includes periods of prosperity,

recession, depression, and recovery. It has been over 70 years since the last depression in the United States, and most authorities believe it is unlikely that another will occur.

b. Inflation is a rising price level that leads to reductions in consumer buying power through devaluation of the currency.

c. Unemployment is the proportion of people in the work force who are not employed and are actively seeking employment.

d. The degree to which necessary resources are limited affects their price and that, in turn, affects the capacity to produce and sell goods.

e. Discretionary income or its lack affects the ability of people to buy nonessential goods.

DIF: 2 REF: p. 90-94 OBJ: 4 STO: KN 14. What is inflation and deflation? How does it affect consumer buying decisions?


ANS: Inflation means that prices are increasing. Often in periods of high inflation consumer demand actually rises due to the belief that if a product isn’t purchased today it will just become more expensive tomorrow. During periods of falling prices—called deflation—the reserve behavior is often observed.DIF: 2 REF: p. 92 OBJ: 4 STO: KN 15. What is demarketing? Give an example.

ANS: Demarketing is the process of reducing consumer demand for a good or service to a level that the firm (or industry) can supply. Demarketing is a common approach in an industry dealing with increased demand for fixed amounts of resources. Utilities offer tips on saving energy. Oil companies list ways to save gasoline. Other companies, such as paper and aluminum producers, encourage recycling.

DIF: 2 REF: p. 93 OBJ: 4 STO: AP 16. What are some of the consumer benefits of technology? Are there any drawbacks to

applications of new technology?ANS: Technology leads to new goods and services for consumers; it also improves existing products, offers better customer services, and can often reduce prices through new, cost efficient production and distribution methods.Technology can quickly make existing products obsolete. As a result, firms must carefully monitor the technological environment.DIF: 2 REF: p. 94-96 OBJ: 5 STO: AP 17. How does the development of new technologies affect marketing activities? ANS: a. It results in the creation of new goods and services.b. Existing products are often improved.c. It is a source of price reductions.d. It can make existing products obsolete by replacing them.e. It improves the quality of customer service.

DIF: 2 REF: p. 96, 97 OBJ: 5 STO: KN 18. Explain how the adoption of new technology can improve marketing competitiveness. ANS: a. The adoption of new technology can often be the basis of a firm's remaining competitive.

New technology may also create new industries and create societal benefits.b. Applying new technology allows marketers to offer improved customer service.c. Many firms use improved technology to expand their information systems using databases,

electronic data interchange, and interactive promotional techniques.d. New technology can provide increased productivity and operating efficiency.


DIF: 2 REF: p. 95, 96 OBJ: 5 STO: AN 19. What is consumerism? What can marketers do to protect the consumer’s right to be

heard?ANS: Consumerism is defined as a social force within the environment that aids and protects the buyer by exerting legal, moral, and economic pressures on business. Marketers can protect the consumer’s right to be heard by providing consumers various forums that allow them to express legitimate displeasures and concerns about products.DIF: 2 REF: p. 97 OBJ: 6 STO: AP 20. Discuss the statement of consumer rights outlined by President John F. Kennedy in

1962. ANS: President Kennedy's statement falls short of being definitive of the rights of consumers, but it is a good general rule by which such rights can be explained. It discusses a. the right to choose freely from among a range of goods and services.b. the right to be informed through enough education and product information to be

responsible buyers.c. the right to be heard, if they wish to express their legitimate displeasure, by appropriate

parties such as sellers, consumer assistance groups, and city or state consumer affairs officers.

d. the right to be safe. The goods and services available to consumers should not be injurious with normal use. Goods and services should be designed in such a way that the average consumer can use them safely.

DIF: 2 REF: p. 97 OBJ: 6 STO: KN 21. What are the major social issues related to marketing?

ANS: a. Marketing ethics - the marketer's standards of conduct and perceptions of right and wrong.b. Social responsibility - the marketer's acceptance of the obligation to consider consumer

satisfaction and societal well-being as well as profit in evaluating the policies and practices of the firm.

DIF: 1 REF: p. 100 OBJ: 7 STO: KN 22. Explain some of the ethical problems related to the following marketing activities:

marketing research, promotional strategy, and pricing strategy.

ANS: a. Marketing researchers have been accused of improperly using information obtained from


study participants and thereby invading those people's privacy.b. The promotion component of marketing strategy has been accused of exaggerating

product merits, promoting potentially unhealthy activities (such as artificially-sweetened cakes and cookies to diabetics), pushing branded products over often-cheaper substitutes, providing incomplete product information, and outright deceit.

c. Pricing is subject to fewer accusations than the other elements of marketing strategy because it is highly regulated. Accusations have been made, however, that some people pay more for certain products than others do for reasons having to do with where they live; and that prices are sometimes changed without notice, causing distress or harm to some customers.

DIF: 2 REF: p. 100-103 OBJ: 7 STO: KN 23. How does pricing become an ethical issue?ANS: Unethical pricing behavior is often illegal because pricing is the most heavily regulated aspect of a firm’s marketing strategy. Other ethical issues revolve around whether or not some consumers should pay more for a product if distribution costs are higher. Another issue revolve around whether or not marketers have an obligation to warn consumers of impending price changes.DIF: 2 REF: p. 103 OBJ: 7 STO: AP 24. Identify the four levels of the Pyramid of Corporate Social Responsibility.

ANS: a. The lowest, or foundation level of the pyramid is the economic - it calls on the firm to be

profitable.b. The next level above the foundation is the legal - it requires that the firm obey the law.c. The third level of the pyramid is the ethical - it calls on firms to avoid wrongdoing.d. The highest level of social responsibility is the philanthropic - mandating that the firm be a

good corporate citizen.

DIF: 2 REF: p. 104 OBJ: 8 STO: KN 25. What is the function of marketing in the society and what are the two major social

issues that impact it? ANS: Marketing is outward-directed from the firm, operating in an environment external to it. It builds relationships with customers, employees, suppliers, the government, and society. The more successful the firm is at building these relationships, the more successful it is overall. From a social point of view, marketers must address the issue of their ethics -- their standards of behavior with respect to perceptions of right and wrong; and their social responsibilities -- their obligation to weigh profitability, consumer satisfaction, and societal well-being as equally important considerations in the evaluation of their firm's performance. DIF: 2 REF: p. 104-106 OBJ: 8 STO: AN


MATCHING a. environmental scanning f. demarketingb. environmental management g. consumerismc. competitive environment h. marketing ethicsd. time-based consumption i. social responsibilitye. economic environment j. green marketing

1. Toyota’s promotion of cars using hybrid technology is an example of ________.

2. ________ is the process of collecting information about the external marketing environment.

3. __________ consists of actions that have the enhancement of society’s welfare as a primary objective.

4. The _____________ is the interactive process that occurs in the marketplace among marketers of directly competitive products.

5. ___________ is the process of reducing consumer demand for a good or service to a level that a firm can supply.

6. Marketers standards of conduct and moral values are called ________.

7. Factors that influence consumer buying power are part of the __________.

8. ___________ consists of a social force designed to aid and protect consumers.

9. Attainment of organizational objectives by predicting and influencing the marketing environment is called __________.

10. __________ is a strategy of developing products more quickly than other firms. 1. ANS: J DIF: 1 REF: p. 108 OBJ: 8STO: KN

2. ANS: A DIF: 1 REF: p. 80 OBJ: 1STO: KN

3. ANS: I DIF: 1 REF: p. 103 OBJ: 8STO: KN

4. ANS: C DIF: 1 REF: p. 81 OBJ: 2STO: KN

5. ANS: F DIF: 1 REF: p. 93 OBJ: 4STO: KN


6. ANS: H DIF: 1 REF: p. 99 OBJ: 7STO: KN

7. ANS: E DIF: 1 REF: p. 90 OBJ: 4STO: KN

8. ANS: G DIF: 1 REF: p. 97 OBJ: 4STO: KN

9. ANS: B DIF: 1 REF: p. 80 OBJ: 1STO: KN

10. ANS: D DIF: 1 REF: p. 83 OBJ: 2

Terms Definitions

Environmental Scanning Process of collecting information about the external marketing environment to identify and interpret potential trends.

Environmental Management

Attainment of organizational objectives by predicting and influencing the competitive, political-legal, economic, technological, and social-cultural environments.

Competitive Environment Interactive process that occurs in the marketplace among marketers of directly competitive products, marketers of products that can be substituted for one another, and marketers competing for the consumer's purchasing power.

Time-Based Competition Strategy of developing and distributing goods and services more quickly than competitors.

Political-Legal Environment Component of the marketing environment consisting of laws and interpretations of laws that require firms to operate under competitive conditions and to protect consumer rights.


Competition Act Component of the marketing environment consisting of laws and interpretations of laws that require firms to operate under competitive conditions and to protect consumer rights.

Economic Environment Factors that influence consumer buying power and marketing strategies, including stage of the business cycle, inflation, unemployment, income, and resource availability.

Demarketing Process of reducing consumer demand for a good or service to a level that the firm can supply.

Technological Environment Applications to marketing of knowledge based on discoveries in science, inventions, and innovations.

Social-Cultural Environment

Components of the marketing environment consisting of the relationship between the marketer and society and its culture.

Consumerism Social force within the environment designed to aid and protect the consumer by exerting legal, moral, and economic pressures on business and government.

Consumer Rights These rights include a person's right to choose goods and services freely, to be informed about these products and services, to be heard, and to be safe.

Marketing Ethics Marketers' standards of conduct and moral values.

Social Responsibility Marketing philosophies, policies, procedures, and actions that have the enhancement of society's welfare as a primary objective.

Green Marketing Production, promotion, and reclamation of


environmentally sensitive products.

Started on Sunday, August 25, 2013, 8:18 PMState Finished

Completed on Sunday, August 25, 2013, 8:37 PMTime taken 18 mins 14 secs

Grade 23.00 out of a maximum of 25.00 (92%)Question 1

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Question text

An industry with only a few large competing firms is called a(n):Select one:

a. regulated monopoly.

b. pure monopoly.

c. perfect market.

d. oligopoly.

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The correct answer is: oligopoly.Question 2

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Question text

Artisanal Brands, Inc. markets and distributes a line of specialty, artisanal, and farmstead cheese products in the United States. The company gives bulk discounts to their wholesalers. The result is that smaller stores are getting the products at a higher rate as compared to supermarkets and large shopping chains. These stores will be protected under the _____.Select one:

a. Sherman Antitrust Act


b. Robinson-Patman Act

c. Wheeler-Lea Act

d. Celler-Kefauver Act

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The correct answer is: Robinson-Patman ActQuestion 3

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Marketers' standards of conduct and moral values is termed as _____.Select one:

a. social marketing

b. corporate identity

c. green marketing

d. marketing ethics

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The correct answer is: marketing ethicsQuestion 4

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In the recovery period, which type of firms have the best possible chance to create loyal customers by providing exceptional service?Select one:

a. Brands

b. Sick units


c. Providers of superior services at lower prices

d. Price skimmers

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The correct answer is: Providers of superior services at lower pricesQuestion 5

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The Federal Trade Commission Act is a law that:Select one:

a. prohibits copying or downloading of digital files.

b. facilitates trade by removing tariffs and other trade barriers.

c. prohibits unfair methods of competition.

d. restricts practices such as exclusive dealing, tying contracts, and interlocking boards of directors.

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The correct answer is: prohibits unfair methods of competition.Question 6

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_____ are used by the federal government to control extreme fluctuations in the business cycle that can lead to a depression.Select one:

a. Deregulation

b. Monetary and fiscal policies

c. Stringent environmental policies


d. Mergers and acquisitions

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The correct answer is: Monetary and fiscal policiesQuestion 7

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When marketers offer new products, increase their promotional efforts, and expand their distributional limits, it is a sign of:Select one:

a. low inflation and low unemployment.

b. low inflation and high unemployment.

c. high inflation and high unemployment.

d. high inflation and low unemployment.

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The correct answer is: low inflation and low unemployment.Question 8

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Lockheed Martin won the largest military contract ever by proving it could be the first company to develop and fly a new model plane. This illustrates the importance of _____.Select one:

a. rapid prototyping of new products

b. demarketing

c. time-based competition


d. the legal environment

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The correct answer is: time-based competitionQuestion 9

Correct


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The _____ component of the marketing environment consists of laws that require firms to operate under competitive conditions and to protect consumer rights.Select one:

a. economic

b. competitive

c. social-cultural

d. political-legal

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The correct answer is: political-legalQuestion 10

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Which of the following helps time-based competitors to improve product quality, reduce costs, and expand product offerings to satisfy new market segments and enhance customer satisfaction?Select one:

a. Validity and reliability

b. Flexibility and responsiveness

c. Rigidity and vision


d. Profitability and coverage

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The correct answer is: Flexibility and responsivenessQuestion 11

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Achieving organizational objectives by predicting and influencing the competitive, political-legal, economic, technological, and social-cultural environment is referred to as _____.Select one:

a. research and development

b. marketing research

c. environmental management

d. SWOT analysis

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The correct answer is: environmental managementQuestion 12

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Which of the following is a trend usually observed during an economic depression?Select one:

a. Consumers are willing to spend more for premium versions of well-known brands.

b. Consumers have money to spend, but caution often restrains their willingness to buy.

c. Consumers focus on more basic, functional products that carry lower price tags.

d. Businesses offer new products, expand distribution, and raise prices to widen profit margins.


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The correct answer is: Consumers focus on more basic, functional products that carry lower price tags.Question 13

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Which technology creates a common interface for data to be carried across networks between different devices?Select one:

a. IMS

b. Wi-Fi

c. VoIP

d. RFID

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The correct answer is: IMSQuestion 14

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Jonathan Nash, aged 60, feels young at heart and spends most of his leisure time networking with family and friends online or surfing the Web. He belongs to the baby boom generation and exemplifies _____.Select one:

a. a social animal

b. a generation Xer

c. a social media maven

d. a Web addict


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The correct answer is: a social media mavenQuestion 15

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The amount of money available with people after buying necessities such as food, clothing, and housing is referred to as _____.Select one:

a. basic income

b. gross income

c. discretionary income

d. personal income

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The correct answer is: discretionary incomeQuestion 16

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Which of the following has ended total monopoly protection for most utilities like natural gas, electricity, water, and cable TV service?Select one:

a. Deregulation movement

b. Disinvestment

c. Temporary monopoly

d. Perfect competition


Feedback

The correct answer is: Deregulation movementQuestion 17

Correct


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Question text

Alliances are considered essential in countries where:Select one:

a. markets are monopolistic in nature.

b. laws require foreign firms doing business there to work with local companies.

c. partners combine resources and capital to create competitive advantages in an established market.

d. efforts are required to achieve organizational objectives by predicting and influencing the technological environments.

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The correct answer is: laws require foreign firms doing business there to work with local companies.Question 18

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Which of the following protects the consumer by exerting legal, moral, and economic pressures on business and government?Select one:

a. Consumerism

b. Corporate branding

c. Socialism

d. Capitalism


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The correct answer is: ConsumerismQuestion 19

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Which of the following usually indicates a strong economy?Select one:

a. Growth in services such as banking and restaurants

b. Cautious spending by businesses and consumers

c. A focus on basic, functional products with lower price tags

d. Increase in purchasing power coupled with uncertain consumer demand

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The correct answer is: Growth in services such as banking and restaurantsQuestion 20

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Which of the following statements is true regarding a monopoly?Select one:

a. It is enjoyed by an organization who is the sole suppliers of a good or service.

b. It is common in the telecommunications industry.

c. It cannot be achieved temporarily, even through the use of patents and similar legal devices.

d. It is the most common type of competition in the U.S. market.

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The correct answer is: It is enjoyed by an organization who is the sole suppliers of a good or service.


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News reports from Zimbabwe indicate that a small pack of locally produced coffee beans costs approximately 1 billion Zimbabwean dollars, an amount that would have bought 60 new cars less than ten years ago in the same country. It can be surmised that Zimbabwe is experiencing extremely high levels of _____ which has spiraled out of control in the past ten years.Select one:

a. growth

b. stagflation

c. deflation

d. inflation

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The correct answer is: inflationQuestion 22

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A market structure in which a single seller dominates trade in a good or service for which buyers can find no close substitutes is called a(n) _____.Select one:

a. oligopoly

b. monopoly

c. monopsony

d. perfect market


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The correct answer is: monopolyQuestion 23

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Which of the following stages in the business cycle forces businesses to hold down costs, trim payrolls, and cut down travel costs in order to earn profits and cope with uncertain consumer demand?Select one:

a. Recovery

b. Growth

c. Prosperity

d. Maturity

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The correct answer is: RecoveryQuestion 24

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Which of the following agencies supports consumer rights through its initiative of informing consumers of their right to modify or discontinue receiving solicitations?Select one:

a. The Federal Trade Commission

b. The Direct Marketing Association

c. The Council of Better Business Bureaus

d. The Consumer Product Safety Commission


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The correct answer is: The Direct Marketing AssociationQuestion 25

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Which of the following devalues money and reduces its purchasing power through persistent increase in prices?Select one:

a. Disinflation

b. Stagflation

c. Inflation

d. Deflation

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The correct answer is: InflationStarted on Sunday, August 25, 2013, 8:18 PMState FinishedCompleted on Sunday, August 25, 2013, 8:37 PMTime taken 18 mins 14 secsGrade 23.00 out of a maximum of 25.00 (92%)Question 1CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textAn industry with only a few large competing firms is called a(n):Select one:a. regulated monopoly.b. pure monopoly.c. perfect market.d. oligopoly. CorrectFeedbackThe correct answer is: oligopoly.Question 2CorrectMark 1.00 out of 1.00


Not flaggedFlag questionQuestion textArtisanal Brands, Inc. markets and distributes a line of specialty, artisanal, and farmstead cheese products in the United States. The company gives bulk discounts to their wholesalers. The result is that smaller stores are getting the products at a higher rate as compared to supermarkets and large shopping chains. These stores will be protected under the _____.Select one:a. Sherman Antitrust Actb. Robinson-Patman Act Correctc. Wheeler-Lea Actd. Celler-Kefauver ActFeedbackThe correct answer is: Robinson-Patman ActQuestion 3CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textMarketers' standards of conduct and moral values is termed as _____.Select one:a. social marketingb. corporate identityc. green marketingd. marketing ethics CorrectFeedbackThe correct answer is: marketing ethicsQuestion 4CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textIn the recovery period, which type of firms have the best possible chance to create loyal customers by providing exceptional service?Select one:a. Brandsb. Sick unitsc. Providers of superior services at lower prices Correctd. Price skimmersFeedbackThe correct answer is: Providers of superior services at lower pricesQuestion 5CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textThe Federal Trade Commission Act is a law that:Select one:


a. prohibits copying or downloading of digital files.b. facilitates trade by removing tariffs and other trade barriers.c. prohibits unfair methods of competition. Correctd. restricts practices such as exclusive dealing, tying contracts, and interlocking boards of directors.FeedbackThe correct answer is: prohibits unfair methods of competition.Question 6CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion text_____ are used by the federal government to control extreme fluctuations in the business cycle that can lead to a depression.Select one:a. Deregulationb. Monetary and fiscal policies Correctc. Stringent environmental policiesd. Mergers and acquisitionsFeedbackThe correct answer is: Monetary and fiscal policiesQuestion 7CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textWhen marketers offer new products, increase their promotional efforts, and expand their distributional limits, it is a sign of:Select one:a. low inflation and low unemployment. Correctb. low inflation and high unemployment.c. high inflation and high unemployment.d. high inflation and low unemployment.FeedbackThe correct answer is: low inflation and low unemployment.Question 8CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textLockheed Martin won the largest military contract ever by proving it could be the first company to develop and fly a new model plane. This illustrates the importance of _____.Select one:a. rapid prototyping of new productsb. demarketingc. time-based competition Correctd. the legal environment


FeedbackThe correct answer is: time-based competitionQuestion 9CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textThe _____ component of the marketing environment consists of laws that require firms to operate under competitive conditions and to protect consumer rights.Select one:a. economicb. competitivec. social-culturald. political-legal CorrectFeedbackThe correct answer is: political-legalQuestion 10CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textWhich of the following helps time-based competitors to improve product quality, reduce costs, and expand product offerings to satisfy new market segments and enhance customer satisfaction?Select one:a. Validity and reliabilityb. Flexibility and responsiveness Correctc. Rigidity and visiond. Profitability and coverageFeedbackThe correct answer is: Flexibility and responsivenessQuestion 11CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textAchieving organizational objectives by predicting and influencing the competitive, political-legal, economic, technological, and social-cultural environment is referred to as _____.Select one:a. research and developmentb. marketing researchc. environmental management Correctd. SWOT analysisFeedbackThe correct answer is: environmental managementQuestion 12Incorrect


Mark 0.00 out of 1.00 Not flaggedFlag questionQuestion textWhich of the following is a trend usually observed during an economic depression?Select one:a. Consumers are willing to spend more for premium versions of well-known brands.b. Consumers have money to spend, but caution often restrains their willingness to buy. Incorrectc. Consumers focus on more basic, functional products that carry lower price tags.d. Businesses offer new products, expand distribution, and raise prices to widen profit margins.FeedbackThe correct answer is: Consumers focus on more basic, functional products that carry lower price tags.Question 13CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textWhich technology creates a common interface for data to be carried across networks between different devices?Select one:a. IMS Correctb. Wi-Fic. VoIPd. RFIDFeedbackThe correct answer is: IMSQuestion 14CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textJonathan Nash, aged 60, feels young at heart and spends most of his leisure time networking with family and friends online or surfing the Web. He belongs to the baby boom generation and exemplifies _____.Select one:a. a social animalb. a generation Xerc. a social media maven Correctd. a Web addictFeedbackThe correct answer is: a social media mavenQuestion 15CorrectMark 1.00 out of 1.00 Not flaggedFlag question


Question textThe amount of money available with people after buying necessities such as food, clothing, and housing is referred to as _____.Select one:a. basic incomeb. gross incomec. discretionary income Correctd. personal incomeFeedbackThe correct answer is: discretionary incomeQuestion 16CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textWhich of the following has ended total monopoly protection for most utilities like natural gas, electricity, water, and cable TV service?Select one:a. Deregulation movement Correctb. Disinvestmentc. Temporary monopolyd. Perfect competitionFeedbackThe correct answer is: Deregulation movementQuestion 17CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textAlliances are considered essential in countries where:Select one:a. markets are monopolistic in nature.b. laws require foreign firms doing business there to work with local companies. Correctc. partners combine resources and capital to create competitive advantages in an established market.d. efforts are required to achieve organizational objectives by predicting and influencing the technological environments.FeedbackThe correct answer is: laws require foreign firms doing business there to work with local companies.Question 18CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textWhich of the following protects the consumer by exerting legal, moral, and economic pressures on business and government?


Select one:a. Consumerism Correctb. Corporate brandingc. Socialismd. CapitalismFeedbackThe correct answer is: ConsumerismQuestion 19CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textWhich of the following usually indicates a strong economy?Select one:a. Growth in services such as banking and restaurants Correctb. Cautious spending by businesses and consumersc. A focus on basic, functional products with lower price tagsd. Increase in purchasing power coupled with uncertain consumer demandFeedbackThe correct answer is: Growth in services such as banking and restaurantsQuestion 20CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textWhich of the following statements is true regarding a monopoly?Select one:a. It is enjoyed by an organization who is the sole suppliers of a good or service. Correctb. It is common in the telecommunications industry.c. It cannot be achieved temporarily, even through the use of patents and similar legal devices.d. It is the most common type of competition in the U.S. market.FeedbackThe correct answer is: It is enjoyed by an organization who is the sole suppliers of a good or service.Question 21CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textNews reports from Zimbabwe indicate that a small pack of locally produced coffee beans costs approximately 1 billion Zimbabwean dollars, an amount that would have bought 60 new cars less than ten years ago in the same country. It can be surmised that Zimbabwe is experiencing extremely high levels of _____ which has spiraled out of control in the past ten years.Select one:a. growthb. stagflation


c. deflationd. inflation CorrectFeedbackThe correct answer is: inflationQuestion 22IncorrectMark 0.00 out of 1.00 Not flaggedFlag questionQuestion textA market structure in which a single seller dominates trade in a good or service for which buyers can find no close substitutes is called a(n) _____.Select one:a. oligopolyb. monopolyc. monopsony Incorrectd. perfect marketFeedbackThe correct answer is: monopolyQuestion 23CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textWhich of the following stages in the business cycle forces businesses to hold down costs, trim payrolls, and cut down travel costs in order to earn profits and cope with uncertain consumer demand?Select one:a. Recovery Correctb. Growthc. Prosperityd. MaturityFeedbackThe correct answer is: RecoveryQuestion 24CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textWhich of the following agencies supports consumer rights through its initiative of informing consumers of their right to modify or discontinue receiving solicitations?Select one:a. The Federal Trade Commissionb. The Direct Marketing Association Correctc. The Council of Better Business Bureausd. The Consumer Product Safety CommissionFeedbackThe correct answer is: The Direct Marketing Association


Question 25CorrectMark 1.00 out of 1.00 Not flaggedFlag questionQuestion textWhich of the following devalues money and reduces its purchasing power through persistent increase in prices?Select one:a. Disinflationb. Stagflationc. Inflation Correctd. DeflationFeedbackThe correct answer is: Inflation

Started on Sunday, August 25, 2013, 8:40 PM

State Finished

Completed on Sunday, August 25, 2013, 9:04 PM

Time taken 24 mins 3 secs

Grade 22.00 out of a maximum of 25.00 (88%)

Question 1Incorrect


Flag question

Question text

The government's Do Not Call Registry that helps consumers to avoid telemarketing calls exempts callers who represent:Select one:

a. financial institutions.

b. not-for-profit organizations.

c. service companies.

d. insurance companies.

Feedback

The correct answer is: not-for-profit organizations.Question 2

Correct



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Question text

Lockheed Martin won the largest military contract ever by proving it could be the first company to develop and fly a new model plane. This illustrates the importance of _____.Select one:

a. rapid prototyping of new products

b. demarketing

c. time-based competition

d. the legal environment

Feedback

The correct answer is: time-based competitionQuestion 3

Correct


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Question text

The Telecommunications Act of 1996 was passed to:Select one:

a. set annual fees for telemarketers to access the Do Not Call Registry.

b. create the national Do Not Call Registry prohibiting telemarketing calls to registered numbers.

c. deregulate the telecommunication industry by removing barriers to competition.

d. prohibit the sale of cell phone records.

Feedback

The correct answer is: deregulate the telecommunication industry by removing barriers to competition.Question 4

Correct



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Question text

A market structure in which a single seller dominates trade in a good or service for which buyers can find no close substitutes is called a(n) _____.Select one:

a. oligopoly

b. monopoly

c. monopsony

d. perfect market

Feedback

The correct answer is: monopolyQuestion 5

Correct


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Question text

As suggested by President John. F. Kennedy, the consumers' right to be _____ states that consumers should be assured that the goods and services they purchase are not injurious with normal use.Select one:

a. able to choose

b. informed

c. safe

d. heard

Feedback

The correct answer is: safeQuestion 6

Correct



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Question text

Pharmaceutical companies often get patents granting them the exclusive right to produce and market drug formulations they have developed. These patents are:Select one:

a. the result of non-compete agreements signed by pharmaceutical firms.

b. in violation of ethical principles on which business is based.

c. probably of little use because what one firm can patent, another can duplicate.

d. rewards for the millions that firms have invested in the research and development process.

Feedback

The correct answer is: rewards for the millions that firms have invested in the research and development process.

Question 7Correct


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Question text

The airline industry in a particular country has only four dominant players. Large capital investments and government regulations often prevent new players from entering the market. Based on this information, the structure of the airline industry in this country is _____.Select one:

a. a duopoly

b. perfectly competitive

c. an oligopoly

d. a monopoly

Feedback

The correct answer is: an oligopolyQuestion 8

Correct



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Question text

Which of the following is a critical issue facing governmental agencies regarding ethics in marketing research?Select one:

a. Personal selling

b. Truth in advertising

c. Planned obsolescence

d. Invasion of personal privacy

Feedback

The correct answer is: Invasion of personal privacyQuestion 9

Incorrect


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Question text

In times of prosperity, marketers respond to consumer buying behavior by:Select one:

a. launching special value-priced products that are likely to appeal to cost-conscious buyers.

b. holding down costs and offering superior services at lower prices.

c. lowering prices and increasing promotions that include special offers to stimulate demand.

d. offering new products, increasing their promotional efforts, and expanding distribution.

Feedback

The correct answer is: offering new products, increasing their promotional efforts, and expanding distribution.

Question 10Correct



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Question text

The Federal Trade Commission Act is a law that:Select one:

a. prohibits copying or downloading of digital files.

b. facilitates trade by removing tariffs and other trade barriers.

c. prohibits unfair methods of competition.

d. restricts practices such as exclusive dealing, tying contracts, and interlocking boards of directors.

Feedback

The correct answer is: prohibits unfair methods of competition.Question 11

Correct


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Question text

Which act prohibits restraint of trade and monopolization and identifies a competitive marketing system as a national policy goal?Select one:

a. The Wheeler-Lea Act

b. The Sherman Antitrust Act

c. The Federal Trade Commission Act

d. The Clayton Act

Feedback

The correct answer is: The Sherman Antitrust ActQuestion 12

Correct



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Question text

The production, promotion, and reclamation of environmentally sensitive products is called _____.Select one:

a. social media marketing

b. green washing

c. demarketing

d. green marketing

Feedback

The correct answer is: green marketingQuestion 13

Correct


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Question text

Which of the following devalues money and reduces its purchasing power through persistent increase in prices?Select one:

a. Disinflation

b. Stagflation

c. Inflation

d. Deflation

Feedback

The correct answer is: InflationQuestion 14

Correct



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Question text

Which of the following ethical issues is associated with firms' product strategies?Select one:

a. Exclusive territories

b. False and deceptive advertising

c. Planned obsolescence

d. Bait-and-switch advertising

Feedback

The correct answer is: Planned obsolescenceQuestion 15

Correct


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Question text

In marketing, _____ involves accepting an obligation to give equal weight to profits, consumer satisfaction, and social well-being in evaluating a firm's performance.Select one:

a. green washing

b. consumerism

c. social responsibility

d. demarketing

Feedback

The correct answer is: social responsibilityQuestion 16

Correct



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Question text

Which of the following acts gives the FTC jurisdiction over false and misleading advertising?Select one:


b. The Clayton Act

c. The Robinson-Patman Act

d. The Consumer Product Safety Act

Feedback

The correct answer is: The Wheeler-Lea ActQuestion 17

Correct


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Question text

Which technology creates a common interface for data to be carried across networks between different devices?Select one:

a. IMS

b. Wi-Fi

c. VoIP

d. RFID

Feedback

The correct answer is: IMSQuestion 18

Correct



Flag question

Question text

Which of the following is a trend usually observed during an economic depression?Select one:

a. Consumers are willing to spend more for premium versions of well-known brands.

b. Consumers have money to spend, but caution often restrains their willingness to buy.

c. Consumers focus on more basic, functional products that carry lower price tags.

d. Businesses offer new products, expand distribution, and raise prices to widen profit margins.

Feedback

The correct answer is: Consumers focus on more basic, functional products that carry lower price tags.Question 19

Correct


Flag question

Question text

News reports from Zimbabwe indicate that a small pack of locally produced coffee beans costs approximately 1 billion Zimbabwean dollars, an amount that would have bought 60 new cars less than ten years ago in the same country. It can be surmised that Zimbabwe is experiencing extremely high levels of _____ which has spiraled out of control in the past ten years.Select one:

a. growth

b. stagflation

c. deflation

d. inflation

Feedback

The correct answer is: inflationQuestion 20

Correct



Flag question

Question text

During which phase in the business cycle do marketers consider lowering prices and increasing promotions that include special offers to stimulate demand?Select one:

a. Prosperity

b. Recession

c. Growth

d. Maturity

Feedback

The correct answer is: RecessionQuestion 21

Incorrect


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Question text

MedicaPlus, a pharmaceutical company, is finding it difficult to track and locate slow moving medicines. Pharmaceutical distributors have been complaining about the time it takes for their orders to arrive. One technology that can be used effectively to shorten this waiting period, locate, and track items easily is:Select one:

a. VoIP.

b. sorting.

c. RFID.

d. GPS.

Feedback

The correct answer is: RFID.Question 22

Correct



Flag question

Question text

Alliances are considered essential in countries where:Select one:

a. markets are monopolistic in nature.

b. laws require foreign firms doing business there to work with local companies.

c. partners combine resources and capital to create competitive advantages in an established market.

d. efforts are required to achieve organizational objectives by predicting and influencing the technological environments.

Feedback

The correct answer is: laws require foreign firms doing business there to work with local companies.Question 23

Correct


Flag question

Question text

Which act prohibits price discrimination in sales to wholesalers, retailers, or other producers?Select one:


b. The Robinson-Patman Act

c. The North American Free Trade Agreement

d. The Federal Trade Commission Act

Feedback

The correct answer is: The Robinson-Patman ActQuestion 24

Correct



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Question text

_____ leads to new goods and services for consumers, improves existing products, offers better customer service, and often reduces prices through new, cost-efficient production and distribution methods.Select one:

a. Reintermediation

b. Consumerism

c. Disintermediation

d. Technology

Feedback

The correct answer is: TechnologyQuestion 25

Correct


Flag question

Question text

Bank of Norasmus is one of the few banks that provides credit to disadvantaged communities. These loans are used for housing, small business creation, and education or personal development. Such an organization is said to be involved in _____.Select one:

a. credit based investing

b. socially responsible investing

c. sustainability

d. environmental management

Feedback

The correct answer is: socially responsible investingFinish review

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