Deck 3: The Marketing Environment, Social Responsibility, and Ethics

Question 1

Distinguish between a recession and a depression.

Answer 1

During a recession unemployment rises, while total buying power declines.
Pessimism accompanying a recession often stifles both consumer and business spending. A prolonged recession may become a depression, a period in which unemployment is extremely high, wages are very low, total disposable income is at a minimum, and consumers lack confidence in the economy.

Question 2

Explain how a period of recession might affect the marketing of a product.

Answer 2

In times of recession or depression, when buying power decreases, many customers may become more price conscious and seek more basic, functional products. Some firms make the mistake of drastically reducing their marketing efforts during a recession, harming their ability to compete. During these times, a company should focus its efforts on determining precisely what functions buyers want and ensure that these functions are available in its product offerings. Promotional efforts should emphasize value and utility.

Question 3

Distinguish between the competitive structures of a monopoly and an oligopoly with examples.

Answer 3

A monopoly exists when an organization offers a product that has no close substitutes, making that organization the sole source of supply. In reality, most monopolies surviving today are local utilities, which are heavily regulated by local, state, or federal agencies.
An oligopoly exists when a few sellers control the supply of a large proportion of a product. Products facing oligopolistic competition may be homogeneous, such as aluminum, or differentiated, such as package delivery services.

Question 4

What roles do the Better Business Bureau and the National Advertising Review Board play in self-regulation of business?

Question 5

Discuss the difference between social responsibility and ethics in marketing.

Question 6

Define social responsibility. Describe the importance of social responsibility in marketing.

Question 7

Describe the several ways in which federal agencies influence marketing activities.

Question 8

To monitor changes in the marketing environment effectively, marketers must engage in:

A) environmental scanning and analysis.
B) economic scanning.
C) self-regulatory analysis.
D) marketing research analysis.
E) information collecting.

Question 9

Define green marketing.

Question 10

Collecting information from secondary sources such as business, government, trade, and general-interest publications plays an important role in:

A) environmental analysis.
B) competitive forces.
C) environmental scanning.
D) procompetitive legislation.
E) self-regulatory forces.

Question 11

Define marketing citizenship. Describe the impact of its dimensions on organizations.

Question 12

Why must marketers be aware of new developments in technology?

Question 13

Provide an overview of important social responsibility issues in marketing.

Question 14

The Lazy-Boy Furniture Company 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:

A) environmental scanning.
B) survey of environment.
C) marketing.
D) environmental analysis.
E) marketing information processing.

Question 15

Discuss some of the important ethical issues in marketing.

Question 16

Three primary methods of collecting information for environmental scanning are:

A) marketing research, company records, and advance orders.
B) secondary sources, company records, and observation.
C) executive knowledge, media, and marketing research.
D) observation, secondary sources, and marketing research.
E) company database, executive knowledge, and research.

Question 17

Given a new brand of barbecue sauce for which to develop a marketing strategy, describe the process of conducting environmental scanning and analysis for this brand.

Question 18

Describe a consumer's buying power. How might this affect a marketing strategy?

Question 19

In order to develop a new drink dispenser, a soft drink company collected information on the soda-drinking habits of individuals in several different age groups, new technologies for dispensing liquids from vending machines, and the sales of its "fountain" syrup for national restaurant chains to use in their soda machines. The soft drink company's collection of this information is an example of , while the examination of its impact on the potential for the new dispenser is an example of .

A) environmental scanning; environmental analysis
B) an environmental force; environmental scanning
C) environmental analysis; environmental strategy
D) strategizing; environmental scanning
E) strategic management; environmental scanning

Question 20

How can a code of conduct encourage ethical behavior in an organization?

Question 21

Toyota, a car manufacturing company, has developed aluminum car bodies that are 100 percent recyclable and light enough to help conserve fuel. What kind of response is this toward environmental forces?

A) Proactive
B) Competitive
C) Reactive
D) Inactive
E) Controllable

Question 22

After Home Depot gathers information related to its marketing environment, it attempts to define the current environmental changes and predict future changes. This determines possible opportunities and threats facing the company. Which of the following processes is being implemented by Home Depot?

A) Environmental marketing
B) Survey of environment
C) Marketing
D) Environmental analysis
E) Marketing information processing

Question 23

A manager's duties in an environmental analysis include:

A) checking information for accuracy and resolving inconsistencies.
B) observation and assessment.
C) conducting research, assessment, and reporting.
D) observation, market research, and fact finding.
E) checking the company database, conducting research, and reporting.

Question 24

If Silk Soyamilk Corp. engaged in environmental scanning and analysis, it is likely to change its products and marketing strategies to adapt to environmental forces rather than trying to influence these forces. Thus, it can be concluded that this company has a (n) approach to marketing environmental forces.

A) inactive
B) reactive
C) proactive
D) negative
E) variable

Question 25

Companies that compete for the same limited financial resources of the same customers are known as competitors.

A) oligopolic
B) total budget
C) generic
D) product
E) brand

Question 26

Marketers who attempt to influence and change the various environmental forces have a (n) response to these forces.

A) reactive
B) inactive
C) variable
D) positive
E) proactive

Question 27

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.

A) generic
B) product
C) total budget
D) oligopolistic
E) pure

Question 28

A satellite radio broadcasting company is concerned about how the increasing use of smart phones will affect the future sales of its satellite radio service. The company gathers information about the changing trends in music access and delivery to prepare for this trend. This process is called:

A) environmental scanning.
B) target marketing.
C) surveying.
D) environmental analysis.
E) dynamic responsiveness.

Question 29

Marketers who view political forces as being beyond their control are taking a (n) response toward these forces.

A) reactive
B) aggressive
C) proactive
D) competitive
E) liberal

Question 30

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.

A) generic
B) product
C) total budget
D) monopolistic
E) pure

Question 31

Marketers primarily focus their environmental analysis on competitors.

A) brand
B) product
C) total budget
D) generic
E) monopolistic

Question 32

When a soft drink manufacturing company takes the information collected through research and attempts to assess and interpret what it means for its soft-drink marketing efforts, it is engaged in environmental:

A) scanning.
B) marketing.
C) management.
D) manipulation.
E) analysis.

Question 33

competitors are the most significant to marketers because buyers see the different products of these firms as direct substitutes for each other.

A) Oligopolic
B) Total budget
C) Generic
D) Product
E) Brand

Question 34

Nabisco, a biscuit manufacturing company, learned that health-conscious consumers preferred lower fat snack and lower-carbohydrate foods. At the same time, the company 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 this biscuit company's action?

A) Environmental scanning
B) Environmental marketing
C) Push marketing
D) Market segmentation
E) Environmental analysis

Question 35

competitors provide very different products that satisfy the same basic customer need.

A) Brand
B) Generic
C) Total budget
D) Product
E) Marketing

Question 36

Which of the following is not a generic competitor for Ford's Expedition sport utility vehicle?

A) Ford's Escape SUV
B) Enterprise car rental
C) Harley-Davidson motorcycle
D) Schwinn mountain bike
E) Taxi cab ride

Question 37

When marketers define their target market, they simultaneously establish a set of:

A) technologies.
B) monopolies.
C) competitors.
D) government regulations.
E) sociocultural forces.

Question 38

competitors are those that compete in the same product class, but their products have different features, benefits, and prices.

A) Product class
B) Generic
C) Brand
D) Product
E) Price

Question 39

Which of the following would represent a brand competitor for Volkswagen's Touareg Hybrid sport utility vehicle?

A) Honda Pilot
B) Toyota Highlander Hybrid
C) Honda Civic Hybrid
D) Taxi ride
E) Chevrolet Tahoe rented from Avis

Question 40

Companies that market products with similar features, benefits, and prices to the same customer group are known as competitors.

A) generic
B) product
C) brand
D) total budget
E) monopolistic

Question 41

The type of competitive structure that exists in the case where there are almost no substitutes for a product is:

A) monopolistic competition.
B) an oligopoly.
C) pure competition.
D) a monopoly.
E) noncompetition.

Question 42

Which of the following firms would be most likely to have a monopoly for its competitive environment?

A) TimeWarner Cable TV
B) Mitchell Trucking
C) American Airlines
D) Rogers Plumbing
E) Chemlawn Lawn Care

Question 43

Total buying power declines during periods of economic:

A) recovery.
B) prosperity.
C) recession.
D) uncertainty.
E) expansion.

Question 44

Companies delivering mixed concrete know that it 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 a(n):

A) monopoly.
B) oligopoly.
C) monopolistic competition.
D) pure competition.
E) monopsony.

Question 45

Assuming that inflation is low, high buying power characterizes the stage of the business cycle.

A) prosperity
B) depression
C) recovery
D) succession
E) recession

Question 46

The American automobile industry was historically dominated by "The Big Three," referring to 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.

A) monopolistic; oligopolistic
B) oligopolistic; pure competition
C) oligopolistic; monopolistic competition
D) monopolistic competition; pure competition
E) monopolistic; monopolistic competition

Question 47

Consumer confidence and willingness to spend begin to increase during periods of .

A) depression
B) prosperity
C) recovery
D) growth
E) recession

Question 48

Which of the following types of a competitive structure exists when just a few sellers control a large portion of the supply of a product?

A) Monopoly
B) Oligopoly
C) Monopolistic competition
D) Mixed competition
E) Pure competition

Question 49

Publix Supermarket is revising its marketing plan for the upcoming quarter. It typically focuses on its wide variety of products and its high quality customer service, having very few weekly "sales." However, during the upcoming quarter, Publix plans to focus on price and value, and promote weekly "values" instead. Hence, this supermarket is most likely in:

A) inflation.
B) prosperity.
C) recession.
D) depression.
E) recovery.

Question 50

When a firm has many potential competitors and tries to develop a marketing strategy to differentiate its products from the competitors' products, is said to exist in the competitive environment.

A) oligopoly
B) monopoly
C) pure competition
D) oligopolistic competition
E) monopolistic competition

Question 51

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:

A) a monopoly.
B) an oligopoly.
C) monopolistic competition.
D) pure competition.
E) faceted competition.

Question 52

Which of the following types of a competitive structure exists when a firm produces a product that has no close substitutes?

A) Monopoly
B) Oligopoly
C) Monopolistic competition
D) Pure competition
E) Mixed competition

Question 53

Which of the following competitive structures is rarely followed by organizations?

A) Monopoly
B) Monopolistic competition
C) Oligopoly
D) Elastic competition
E) Pure competition

Question 54

The four major competitive structures are:

A) monopolies, oligopolies, oligopolistic monopolies, and pure competition.
B) pure competition, heavy competition, moderate competition, and light competition.
C) brand, product, total budget, and generic.
D) oligopolies, monopolies, monopolistic competition, and pure competition.
E) monopolies, limited competition, oligopolistic competition, and pure competition.

Question 55

Changes Salon is part of the hair and personal care service industry. Which of the following types of competitive structures represents this salon?

A) Pure competition
B) Monopoly
C) Monopolistic competition
D) Oligopolistic competition
E) Oligopoly

Question 56

The best approach for a company to take when monitoring its competitors is:

A) watching for increases and decreases in competitors' prices and match them.
B) analyzing all information that is readily available about competitors.
C) sending employees to competitors' offices and factories to observe their actions.
D) developing a system for gathering ongoing information about competitors.
E) reading important business publications such as The Wall Street Journal.

Question 57

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:

A) price sensitive.
B) opportunistic.
C) monopolistic competition.
D) an oligopoly.
E) a monopoly.

Question 58

is the stage of the business cycle where the unemployment rate is low and total income is relatively high.

A) Repression
B) Prosperity
C) Recovery
D) Recession
E) Depression

Question 59

Consumer confidence is low during periods of:

A) recession.
B) prosperity.
C) recovery.
D) slowdown.
E) depression.

Question 60

The Decca Electric Corporation produces light bulbs that are used in refrigerator manufacturing. Currently, only three other companies produce bulbs used in the production of refrigerators, with Decca having the greatest market share. In this case, Decca Electric Corporation would be considered:

A) an oligopoly.
B) a monopoly.
C) involved in monopolistic competition.
D) involved in perfect competition.
E) involved in a perfect oligopoly.

Question 61

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

A) economic
B) competitive
C) political
D) environmental
E) sociocultural

Question 62

What is the most important factor in distinguishing disposable income from income?

A) Taxes
B) Housing
C) Employment levels
D) Consumer spending
E) Saving

Question 63

When using credit to make purchases, consumers are:

A) decreasing current buying power and increasing future buying power.
B) increasing their present discretionary income to extend purchasing power.
C) putting themselves at significant risk of financial disaster.
D) forgoing the accumulation of wealth to increase current income.
E) increasing current buying power at the expense of future buying power.

Question 64

The accumulation of past income, natural resources, and financial resources is known as:

A) income.
B) collected income.
C) credit.
D) wealth.
E) savings.

Question 65

The amount of money received through wages, rents, investments, pensions, and subsidies is called:

A) income.
B) wealth.
C) discretionary income.
D) prosperity.
E) credit.

Question 66

Which of the following provides protection for and regulates brand names, brand marks, trade names, and trademarks?

A) Lanham Act
B) Clayton Act
C) Robinson-Patman Act
D) Sherman Antitrust Act
E) Celler-Kefauver Act

Question 67

Why are marketers interested in consumers' levels of disposable income?

A) It accurately predicts future buying power.
B) It increases current buying power.
C) It is the amount remaining after paying taxes and making savings which is used to buy luxuries.
D) It is a ready source of buying power.
E) It is essential for forecasting future business trends.

Question 68

By offering both credit and financing through its GMAC division, General Motors Inc. is trying to help consumers:

A) expand future buying power at the expense of current buying power.
B) expand disposable income at the expense of discretionary income.
C) expand current buying power at the expense of future buying power.
D) expand both disposable income and wealth.
E) decrease both disposable and discretionary income.

Question 69

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

A) Wheeler-Lea Act.
B) Clayton Act.
C) Robinson-Patman Act.
D) Sherman Antitrust Act.
E) Celler-Kefauver Act.

Question 70

The 1990 Nutritional Labeling and Education Act directly prohibits:

A) exaggerated claims made by all products.
B) putting the words "cholesterol-free" on any food package.
C) putting nutritional information on most food products.
D) exaggerated health claims on food packages.
E) the use of any health claim on food packaging.

Question 71

Price discrimination is prohibited by the Act.

A) Sherman
B) Wheeler-Lee
C) Robinson-Patman
D) Celler-Kefauver
E) Consumer Goods Pricing

Question 72

Lindsay was reviewing her bank statement for last month. She had paid her rent, her car payment, electric and phone bills, and made three trips to the grocery. Lindsay had also bought tickets to a Katy Perry concert and new clothes to wear to the concert. The money spent on Lindsay's rent, car, electric and phone bills was likely from her , while the money spent on the concert tickets and new clothes was from her .

A) disposable income; savings
B) gross income; disposable income
C) disposable income; net income
D) disposable income; discretionary income
E) gross income; savings income

Question 73

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

A) Sherman Antitrust Act.
B) Wheeler-Lea Act.
C) Lanham Act.
D) Federal Trade Commission Act.
E) Robinson-Patman Act.

Question 74

Marketers are most interested in of consumers.

A) wealth
B) disposable income
C) discretionary income
D) total income
E) extra income

Question 75

Discretionary income is associated with all of the following except:

A) automobiles.
B) education.
C) pets.
D) furniture.
E) food.

Question 76

Which of the following companies would probably be most interested in tracking discretionary income levels?

A) Safeway food stores
B) BMW automobiles
C) Gulf States Utilities
D) General Mills
E) Florida Orange Growers

Question 77

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 the aspect of the marketing environment.

A) sociocultural
B) technological
C) competitive
D) economic
E) political

Question 78

The strength of a person's "buying power" depends on economic conditions and:

A) his or her level of income.
B) the size of resources that are used for purchases.
C) how much the person will buy.
D) his or her spending pattern.
E) his or her levels of median wealth.

Question 79

Which of the following are the major financial sources of buying power?

A) Disposable incomes
B) Past income, natural resources, and financial resources
C) Wages, rents, and investments
D) Income, wealth, and credit
E) Discretionary incomes

Question 80

Which of the following acts was enacted to prevent businesses from restraining trade and monopolizing markets?

A) Sherman Antitrust Act
B) Clayton Act
C) Federal Trade Commission Act
D) Robinson-Patman Act
E) Wheeler-Lea Act