marketing test one Chapter Three

To monitor changes in the marketing environment effectively, marketers must engage in
environmental scanning and analysis.
Collecting information from secondary sources such as business, government, trade, and
general-interest publications plays an important role in
environmental scanning
Three primary methods of collecting information for environmental scanning are
observation, secondary sources, and marketing research.
Dell Computer collects information about a wide variety of competitive, economic, political,
legal and regulatory, technological, and sociocultural forces that affect its marketing
activities. This process is called
environmental scanning
If M&M Mars Candies found a magazine article that provided key information on the
television viewing habits of major candy consumer groups, this would be an example of
information obtained through environmental
scanning
XM Radio is concerned about how the increasing use of MP3 players will affect the future
sales of its satellite radio service. The company decides to gather information about the changing trends in music access to prepare for this trend. XM Radio’s process is called
environmental scanning
Environmental scanning means ___________ information about the marketing environment,
whereas environmental analysis is concerned with ___________ this information.
collecting; assessing
When PepsiCo takes the information collected through research and attempts to assess and
interpret what it means for its soft-drink marketing efforts, PepsiCo is engaged in
environmental
analysis
Nabisco learned that health-conscious consumers preferred lower fat snack and lowercarbohydrate
foods. At the same time, the firm saw sales of such products slumping and was
careful not to launch any new varieties of these products for a while. Which of the following
best describes Nabisco’s action?
environmental analysis
Marketers who attempt to influence and change the various environmental forces have a(n)
_____ response to these forces.
proactive
Toyota has developed aluminum car bodies that are 100 percent recyclable and light enough
to help conserve fuel. What kind of response is this to environmental forces?
proactive
Although Matt’s company engages in environmental scanning and analysis, he feels more
comfortable changing his policies and strategies to adapt to environmental forces rather than
trying to influence these forces. Matt has a(n) _____ approach to marketing environmental
forces.
reactive
Marketers who view political forces as being beyond their control are taking a ___________
response toward these forces.
reactive
The textbook suggests that the best approach a firm can take in responding to marketing
environmental forces is
variable
When marketers define their target market, they establish a set of
competitors
Companies that market products with similar features, benefits, and prices to the same
customer group are known as _________ competitors.
brand
Which of the following would represent a brand competitor for Ford’s Escape Hybrid sport
utility vehicle?
Toyota’s Highlander Hybrid
__________ competitors provide very different products that satisfy the same basic customer
need.
Generic
___________ competitors are those that compete in the same product class, but their
products have different features, benefits, and prices
product
Which of the following is not at the generic competitor level for Ford’s Expedition sport utility
vehicle?
Saturn SKY
Marketers primarily focus their environmental analysis on ____ competitors.
brand
In today’s marketing environment, competitors can take on many forms. For example, Diet
Coke can be seen as a competitor to Wrigley’s Double Mint chewing gum. In this
circumstance, these two products are described as ___________ competitors.
total budget
Due to limited resources, a consumer decided to serve Hawaiian Punch to a New Year’s Eve
party crowd instead of Korbel champagne. As a result of this action, Korbel and Hawaiian
Punch can be viewed as ___________ competitors.
generic
Companies that compete for the same limited financial resources of the same customers are
known as _________ competitors.
total budget
___________ competitors are the most significant to marketers because buyers see the
different products of these firms as direct substitutes for each other.
brand
Mixed Concrete cannot be shipped farther than twenty-five miles because the concrete might harden in the truck. Citrus County Concrete Company is the only supplier of mixed concrete
to customers within a thirty-mile radius. Citrus County Concrete is an example of which one
of the following competitive structures?
monopoly
The four major competitive structures are
oligopolies, monopolies, monopolistic competition, and pure competition
What type of competitive structure exists when a firm produces a product that has no close
substitutes?
monopoly
The type of competitive structure that exists in the case where there are almost no
substitutes for a product is a(n)
monopoly
The American automobile industry used to be dominated by “The Big Three,” including
General Motors, Ford, and Chrysler. However, as many more foreign competitors began influencing this market, the American companies had to modify and differentiate their
products. The automobile industry moved from a(n) ______ structure to a(n) _______
structure.
oligopolistic; monopolistic competition
The D-Lite Corporation produces a unique type of light bulb that is used in refrigerator
manufacturing. D-Lite is the only maker of this light bulb, and there are no close substitutes
for it. In this case, the D-Lite Corporation would be
a monopoly
Which of the following firms would be most likely to have a monopoly for its competitive
environment?
TimeWarner Cable TV
Most marketers operate in a competitive environment of either
oligopoly or monopolistic competition.
When a firm has many potential competitors and tries to develop a marketing strategy to
differentiate its products from the competitors’ products, a(n) _______ structure exists in the
competitive environment.
monopolistic competition
What type of competitive structure exists when just a few sellers control a large portion of the
supply of a product?
Oligopoly
If in an industry, none of the many sellers could influence the price of supply of its products,
this industry would be characterized as
pure competition
The tobacco industry in the United States is dominated by three large companies. When any
one of these companies changes its price on tobacco products, the other two companies
quickly adjust their prices to match it. From these characteristics, the tobacco industry could
best be described as
an oligopoly.
J. Pitner Clothing is a medium-size specialty men’s and women’s clothing store in a market
with many other specialty stores, department stores, and discounters. It has established a
reputation for offering high-quality, fashionable merchandise with quality service. J. Pitner’s
competitive environment would best be characterized as
monopolistic competition.
In general, which of the following competitive structures is an organization least likely to
operate?
Pure competition
The two least common competitive structures at the opposite ends of the continuum are
pure competition and monopolies.
The best approach for a company to take when monitoring its competitors is
developing a system for gathering ongoing information about competitors.
Which of the following attributes of a Toyota Scion would be most appropriate to emphasize
in television commercials during an economic recession?
Durability
In a period of economic recovery, the best marketing strategy for FedEx would be
characterized by which of the following features?
Flexibility
Assuming that inflation is low, high buying power characterizes the _____ stage of the
business cycle
prosperity
During which stage of the business cycle is unemployment low and total income relatively
high?
Prosperity
Total buying power declines during periods of economic
recession
Although marketing theory supports the contrary, it is more probable that marketing budgets
will be cut during periods of economic
recession
Consumers begin to become more price and value conscious during periods of
recessions
Consumer confidence is at a low during periods of
depression
Consumer confidence and willingness to spend begins to increase during periods of _____,
and marketers must remain very flexible to make the necessary adjustments.
recovery
The strength of a person’s “buying power” depends on economic conditions and
size of resources that can be traded in an exchange.
Why are marketers interested in consumers’ levels of disposable income?
It is a ready source of buying power.
The amount of money received through wages, rents, investments, pensions, and subsidies
is called
income
If Toby Roberts has an income of $30,000, pays $6,000 in rent, $1,200 in utilities, and
$5,000 in taxes per year, his disposable income is
$25,000
Which category of income are marketers most interested in?
disposable income
What is the most important factor in distinguishing disposable income from income?
consumer spending
A person’s buying power is a function of
income, wealth and credit
Discretionary income is associated with all of the following except
food
Heidi decided to spend some of her saved money on tickets to a Cold Play concert coming to
town, and now she is planning on buying a new outfit for the concert. What type of resources
is Heidi making decisions about?
Discretionary income
The accumulation of past income, natural resources, and financial resources is known as
wealth
Which of the following companies would probably be most interested in tracking discretionary
income levels?
BMW automobiles
By offering credit and financing through its GMAC division, General Motors is trying to help
consumers
expand current buying power at the expense of future buying power.
When using credit to make purchases, consumers are
increasing current buying power at the expense of future buying power.
Which of the following terms refers to consumers’ propensity to buy?
Willingness to spend
Although Shelby’s income is comfortable, she hesitates to purchase a new car because she
is concerned about how poor economic conditions may affect her company and in turn her
future employment. Shelby lacks
willingness to spend
Texas rice farmers wish to get their product into the Japanese market but are hindered by a
complex maze of regulations imposed by the Japanese government. The farmers are most
likely to attempt to influence which aspect of the marketing environment?
Political
Textile companies historically face issues concerning the use of child labor in foreign
countries and the various regulations created concerning this labor. The type of marketing
environment forces executives for these companies are most likely to try to influence are
______ forces.
political
Which of the following is not a reason that marketers try to maintain good relations with
elected political officials?
Political officials can accept direct corporate campaign contributions.
One way for corporations to attempt to influence the political environment is through
organizing political action committees.
Which of the following acts was enacted to prevent businesses from restraining trade and
monopolizing markets?
Sherman Antitrust Act
If all the gas stations in a city collaborated to determine what gas prices should be charged,
they would be violating the
Sherman Antitrust Act.
Which of the following provides protection for and regulates brand names, brand marks,
trade names, and trademarks?
Lanham Act
Procompetitive laws are those designed to
preserve competition.
International Office Supplies Wholesaler charges different prices to its various customers
without any legal justification. This company is in violation of the
Robinson-Patman Act.
Price discrimination is prohibited by the ___________ Act
Robinson-Patman
The 1990 Nutritional Labeling and Education Act directly prohibits
exaggerated health claims on food packages.
Consumer protection legislation deals with all of the following legal concerns except
monopolistic practices.
The Children’s Online Privacy Protection Act prohibits websites and Internet providers from
seeking personal information from children under the age of 13
Which of the following are the most frequently sentenced organizational crimes?
Fraud and antitrust violations
Of all the federal regulatory units, the ____________ most heavily influences marketing
activities.
Federal Trade Commission (FTC)
Which of the following agencies would most likely have jurisdiction over the problem with
lead in the paint of children’s toys?
Consumer Product Safety Commission
The FTC can issue a cease-and-desist order, which is an injunction to
stop doing whatever caused the complaint
Which of the following agencies regulates marketing activities the most?
Federal Trade Commission
Which of the following industries is most commonly regulated by state regulatory agencies?
Utility companies
In its advertisements for Bud Light beer, Anheuser-Busch has decided to include a statement
saying “Know when to say when.” This is an example of which one of the following types of
regulatory forces affecting marketing efforts?
Self-regulation
Which of the following regulatory groups is a system of nongovernmental, independent, local
regulatory agencies supported by local businesses?
The Better Business Bureau
The Pharmaceutical Research and Manufacturers of America sets guidelines for its member
firms to follow regarding the use of unethical practices. Thus, it is engaging in
self-regulation.
Jared Bledsoe hires a local landscape firm to plant trees and shrubs in his yard. The firm
plants mostly dead plants but refuses to return Jared’s money or replace the dead items.
Jared’s best course of action would be to contact the
Better Business Bureau.
The Better Business Bureau is probably the best-known
nongovernmental regulatory group.
In its advertisements, Johnson’s Hair Care Products claims that its KLTR-14 gel will restore
the hair of bald men. Members of the NARB believe the claim is unsupportable. What action
can the NARB take?
File a complaint with the Federal Trade Commission.
Which of the following statements about self-regulatory programs is false?
Self-regulatory guidelines generally are stricter than governmental regulatory
programs.
Which of the following is an advantage that self-regulatory agencies such as the BBB and the
NARB have over governmental laws and regulatory agencies?
Establishment and implementation are usually less expensive.
When a firm continues to violate what the Better Business Bureau believes to be good
business practices, what is one of the main actions the bureau will take?
Warn consumers of the unfair practices.
What national self-regulatory organization screens ads?
National Advertising Review Board
Technology is
the application of knowledge and tools to solve problems and perform tasks
more efficiently.
More than half of the research of technology created is paid for by
the federal government
Newsweek enhances its visibility to readers by making its magazine available on the Internet.
Newsweek is capitalizing on which environmental force?
technological
The rapid adoption of the use of the Internet has resulted in rapid changes such as the
increase of distance learning, changing social networks, and concerns such as copyright and
privacy issues that the government is focusing on. These effects of technology are
collectively known as
dynamics
Which of the following is the best example of utilizing technology to improve consumer
relationships?
Waiters recording orders on handheld computers
Technology assessment is
trying to foresee the effects of new products and processes on the firm’s operation and on society in general.
When Cisco Systems attempts to anticipate the effect of new products and processes on its
own innovations, other business organizations, and society in general, the firm is engaging in
technology assessment.
Many health care companies are making adaptations to meet the needs of an aging
population as the demand for medical services and products such as diabetes supplies
increases. This change in marketing strategy is best explained by a change in
demographics
People for the Ethical Treatment of Animals (PETA) have demonstrated against the sale of
coats made of animal furs. PETA’s efforts to change shoppers’ attitudes represent a
__________ force for fur retailers.
sociocultural
By the turn of the twentieth century, the population of the United States had shifted to three
large racial and ethnic groups. These groups are
blacks, Hispanics, and whites.
In the near future, what subculture will become the second largest group in the United
States?
Hispanics
The Coca-Cola Company has recognized the significant increase in population diversity
within the U.S. soft-drink market. Which one of the following best illustrates the company’s
integration of this knowledge into its marketing strategy?
Ads featuring Hispanic actors and Tejano music
Organizations that provide smoke-free environments or low-fat products are responding to changes in
cultural values.
Many well-known restaurants and corporations are changing to a completely smoke-free
environment, and fewer restaurants offer smoking and nonsmoking sections. These firms are
responding to changes in
cultural values.
Consumerism is a
diverse group of individuals and organizations attempting to protect the rights
of consumers.
A group of protesters carries signs encouraging people to boycott Joe’s Market, a small
grocery store in an urban area. The protesters claim that Joe’s takes unfair advantage of
elderly and minority consumers. This protest is part of what we see today as the
consumerism movement.
Meyers’ Sporting Goods, a national chain, has been doing business with Soljur Sports, a manufacturer of skateboards, for several years. Recently, it came to the attention of Meyers’ financial director that the average cost per Soljur Sports skateboard had substantially increased over that of the previous year.
A corporate attorney was notified and began to look into the situation. The attorney found that Soljur Sports was selling a similar number of skateboards to a competitive chain for $10 less per skateboard. The attorney for Meyers’ Sporting Goods immediately filed a complaint with the Federal Trade Commission.

Suppose that the Soljur Sports company was actually discriminating against Meyer Sporting
Goods with its price increase. Which of the following acts prohibits this type of business
behavior?

Robinson-Patman
Meyers’ Sporting Goods, a national chain, has been doing business with Soljur Sports, a manufacturer of skateboards, for several years. Recently, it came to the attention of Meyers’ financial director that the average cost per Soljur Sports skateboard had substantially increased over that of the previous year.
A corporate attorney was notified and began to look into the situation. The attorney found that Soljur Sports was selling a similar number of skateboards to a competitive chain for $10 less per skateboard. The attorney for Meyers’ Sporting Goods immediately filed a complaint
with the Federal Trade Commission.

If the Federal Trade Commission believes that Soljur Sporting Goods is acting in violation of
the law, the first move for the FTC is to

issue a complaint stating that the business is in violation of the law.
Meyers’ Sporting Goods, a national chain, has been doing business with Soljur Sports, a manufacturer of skateboards, for several years. Recently, it came to the attention of Meyers’ financial director that the average cost per Soljur Sports skateboard had substantially increased over that of the previous year.
A corporate attorney was notified and began to look into the situation. The attorney found that Soljur Sports was selling a similar number of skateboards to a competitive chain for $10 less per skateboard. The attorney for Meyers’ Sporting Goods immediately filed a complaint with the Federal Trade Commission.
A regular customer of Meyers Sporting Goods feels that some of its advertisements are
deceptive. He responded to an ad for sale skateboards one hour after the store opened and
found that none were left. Where should he file a complaint?
Better Business Bureau
Meyers’ Sporting Goods, a national chain, has been doing business with Soljur Sports, a manufacturer of skateboards, for several years. Recently, it came to the attention of Meyers’ financial director that the average cost per Soljur Sports skateboard had substantially increased over that of the previous year.
A corporate attorney was notified and began to look into the situation. The attorney found that Soljur Sports was selling a similar number of skateboards to a competitive chain for $10 less per skateboard. The attorney for Meyers’ Sporting Goods immediately filed a complaint with the Federal Trade Commission.

Suppose that a customer has a complaint against Meyers Sporting Goods Stores. He files a
complaint with the Better Business Bureau. What action could the BBB take against Meyers
if the complaint was substantiated and Meyers did not change the offending practice?

Issue a warning to consumers through the local newspaper.
A new U.S. automobile company, Specialty Motors, was established in 2004. In 2008, a recession caused disposable income to decline, and the annual amount of dollars spent by consumers for automobiles dropped drastically. Specialty Motors faced the problem of trying to determine whether the economy would turn toward prosperity or toward depression. No matter what happened, Specialty Motors was also worried about an impending global steel shortage, which would make a big difference in its future marketing plans. The economy might recover from the recession, but the automobile makers might be forced to ask consumers to curtail consumption just when the hope of a better year was finally in sight. All in all, the future looked dismal for Specialty Motors.

Although all types of competition will affect Specialty Motors’ marketing performance, it will
be most concerned about _________ competitors.

brand
A new U.S. automobile company, Specialty Motors, was established in 2004. In 2008, a recession caused disposable income to decline, and the annual amount of dollars spent by consumers for automobiles dropped drastically. Specialty Motors faced the problem of trying to determine whether the economy would turn toward prosperity or toward depression. No matter what happened, Specialty Motors was also worried about an impending global steel shortage, which would make a big difference in its future marketing plans. The economy might recover from the recession, but the automobile makers might be forced to ask consumers to curtail consumption just when the hope of a better year was finally in sight. All
in all, the future looked dismal for Specialty Motors.

In what type of competitive structure is Specialty Motors operating?

Monopolistic competition
A new U.S. automobile company, Specialty Motors, was established in 2004. In 2008, a recession caused disposable income to decline, and the annual amount of dollars spent by consumers for automobiles dropped drastically. Specialty Motors faced the problem of trying to determine whether the economy would turn toward prosperity or toward depression. No matter what happened, Specialty Motors was also worried about an impending global steel shortage, which would make a big difference in its future marketing plans. The economy might recover from the recession, but the automobile makers might be forced to ask consumers to curtail consumption just when the hope of a better year was finally in sight. All in all, the future looked dismal for Specialty Motors.

When Specialty Motors is operating during a recessionary period, its promotion efforts should
stress

value and utility.
A new U.S. automobile company, Specialty Motors, was established in 2004. In 2008, a recession caused disposable income to decline, and the annual amount of dollars spent by consumers for automobiles dropped drastically. Specialty Motors faced the problem of trying to determine whether the economy would turn toward prosperity or toward depression. No matter what happened, Specialty Motors was also worried about an impending global steel shortage, which would make a big difference in its future marketing plans. The economy might recover from the recession, but the automobile makers might be forced to ask consumers to curtail consumption just when the hope of a better year was finally in sight. All in all, the future looked dismal for Specialty Motors.

Total disposable income is at its lowest during which of the following?

Depression
A new U.S. automobile company, Specialty Motors, was established in 2004. In 2008, a recession caused disposable income to decline, and the annual amount of dollars spent by consumers for automobiles dropped drastically. Specialty Motors faced the problem of trying to determine whether the economy would turn toward prosperity or toward depression. No matter what happened, Specialty Motors was also worried about an impending global steel shortage, which would make a big difference in its future marketing plans. The economy might recover from the recession, but the automobile makers might be forced to ask consumers to curtail consumption just when the hope of a better year was finally in sight. All in all, the future looked dismal for Specialty Motors.

The income a consumer would use to purchase a Specialty Motors automobile is considered
___________ income.

discretionary