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

Question 1

Why might a domestic business form a strategic alliance with a firm in a foreign market?

A) to act socially responsible by giving jobs to local citizens
B) to squeeze out the competition
C) to acquire local expertise for company expansion abroad
D) to avoid currency fluctuations when converting gross and net revenue

Answer 1

C

Question 2

What would monitoring local newspapers and television news shows for general information relating to a firm's business be an example of?

A) environmental scanning
B) economic analysis
C) social-political manipulation
D) technological development

Answer 2

A

Question 3

Pharmaceutical companies are often able to secure patents for new drugs. Which of the following best describes the outcome of these patents?

A) non-exclusive rights to produce the drug for a contractually limited time period
B) protection for marketing the product forever
C) rewards for the money invested in research and development
D) probably of little use due to the short timeline for protection

Answer 3

C

Question 4

What is the term for the process of collecting information about the external marketing environment?

A) environmental management
B) marketing research
C) marketing management
D) environmental scanning

Question 5

Last summer, the Thompson family had to decide whether to buy a new car to upgrade their one-year-old luxury car, go to Disney World, or put in a swimming pool. They chose the vacation. What does this decision best illustrate?

A) how competition can involve dissimilar products vying for discretionary income
B) how each of these products are essential items
C) how competition for essential items leaves limited discretionary funds for nonessentials
D) how discretionary spending decisions are made

Question 6

What type of environment would be most significantly affected by a research and development project that results in a patent being granted?

A) competitive
B) economic
C) international
D) political

Question 7

What is the term for an industry with only a few competing firms?

A) regulated monopoly
B) pure monopoly
C) perfect competition
D) oligopoly

Question 8

Friums & You, a Canadian firm, together with its subsidiaries, manufactures and markets snacks, confectionery, and quick meal products worldwide. The firm has been trying to expand its business into China, but Chinese laws require foreign firms to do business with local companies. What will Friums & You need to be involved in to start operations in China?

A) limited liability partnership
B) buyout
C) strategic alliance
D) hostile takeover

Question 9

What is Kevin engaged in when he analyzes recent data from Statistics Canada to uncover new markets for his firm's product?

A) research and development
B) environmental scanning
C) environmental management
D) marketing management

Question 10

What does the decision about whether to have lunch at a fast-food restaurant, such as McDonald's, Subway, or Wendy's, illustrate?

A) how direct competition affects consumer behaviour
B) how some products and services are competitive substitutes
C) how indirect competition works
D) how competition has a universal nature

Question 11

Kelly has the option of going to Cancun, Mexico or Quebec City during spring break. In this context, what type of competition are Cancun and Quebec City in?

A) direct
B) indirect
C) pure
D) monopolistic

Question 12

Which of the following is NOT an external environment that marketers must consider?

A) political-legal
B) social-cultural
C) competitive
D) creative

Question 13

Which statement best describes the competition between Petro-Canada and Esso?

A) It is a form of oligopoly because they are the only companies to purchase from.
B) It is monopolistic since the companies are selling in different markets and not competing.
C) It is direct because both are targeting consumers who want to purchase gasoline products.
D) It is substitution because of various gasoline formulations manufactured.

Question 14

Why must Canadian companies form strategic alliances with firms in China when doing business in that country?

A) because such alliances are required by the laws of China
B) because without such a relationship, the firm will not be trusted in either country
C) because it is necessary to have employees who speak Chinese fluently
D) because there are differences in engineering and technology between the two countries

Question 15

Why must marketers constantly monitor their competitors' products, prices, distribution, and promotional efforts?

A) because the competitors may be violating laws
B) because the actions of competitors may threaten the firm's monopoly position
C) because the actions of competitors may create an oligopoly within a particular industry
D) because new competitor product offerings may require a marketing mix adjustment

Question 16

What is the term for organizational objectives that include predicting and influencing competitive, political-legal, economic, technological, and socio-cultural components?

A) research and development
B) environmental management
C) marketing research
D) environmental analysis

Question 17

Over the past years, what change have most utilities experienced regarding total monopoly protection?

A) They have slightly decreased.
B) They have greatly increased.
C) They have remained the same.
D) They have ended.

Question 18

What have many domestic firms found desirable when acquiring regional expertise and complying with local laws in the global market?

A) forming political action committees
B) forming strategic alliances with companies in foreign countries
C) buying foreign products to beat tariff restrictions
D) relocating manufacturing facilities to that market

Question 19

A firm is negotiating with the Canadian Radio-television Telecommunications Commission over new regulations that affect one of the firm's products. What is the firm engaging in?

A) research and development
B) marketing management
C) environmental management
D) environmental analysis

Question 20

Corea Inc., a pharmaceutical company, is involved in the research, development, manufacture, and marketing of prescription medicines. A new drug developed by them has been awarded patent rights in Canada. The patent grants them exclusive rights to manufacture and market the drug for three years. Based on this information, which statements best describes Corea Inc.'s situation?

A) Corea Inc. will operate in a market with monopolistic competition.
B) Corea Inc. will operate in an oligopolistic market.
C) Corea Inc. will operate in a perfectly competitive market.
D) Corea Inc. will have a temporary monopoly in the market for this drug.

Question 21

Company ACME believes that another company, called Positioner, is selling a product well under cost in order to drive ACME and others out of the industry. What federal law could Positioner be guilty of violating?

A) the North American Free Trade Agreement
B) the Competition Act
C) the Patent Act
D) the Broadcasting Act

Question 22

Which component of the marketing environment consists of factors that influence consumer buying power and marketing strategies?

A) competitive
B) cultural
C) economic
D) regulatory

Question 23

How do marketers respond to consumer buying behaviour in times of prosperity?

A) by launching special value-priced products that are likely to appeal to cost-conscious buyers
B) by holding down costs and offering superior services at lower prices
C) by lowering prices and increasing promotions that include special offers to stimulate demand
D) by offering new products, increasing their promotional efforts, and expanding distribution

Question 24

Where does indirect competition occur?

A) among marketers of similar products
B) among marketers of products that satisfy different needs
C) among marketers of products that can be easily substituted
D) among marketers of products that belong to different categories

Question 25

In Canada, three major music companies receive 85 percent of recording revenues. These companies operate in what type of market structure?

A) monopsony
B) oligopoly
C) monopoly
D) duopoly

Question 26

Which area is NOT covered by the Competition Act?

A) misleading advertising
B) bait-and-switch selling
C) exclusive dealing
D) international marketing

Question 27

What does the "cooling-off" period allow?

A) pharmaceutical research companies to exclusively sell their drugs for a number of years
B) telecommunications companies to be protected from bankruptcy for 365 days
C) buyers to reconsider a purchase decision that was made under sales pressure
D) business owners to dismiss employees within a probationary time period

Question 28

During recessionary periods, how is it still possible for a business to compete?

A) by reducing promotional outlays to save money
B) by raising prices to improve company and product image
C) by curtailing customer service because people will accept such cuts
D) by offering value-priced products to appeal to cost-conscious buyers

Question 29

Which of the following is an example of indirect competition?

A) a Sony home entertainment system competing with a Jacuzzi hot tub
B) a Petro-Canada station across the road from an Esso station
C) the Honda Accord and the Toyota Camry
D) competition among Telus, Rogers, and Bell

Question 30

What federal organization has the broadest powers of any organization to influence the assignment of patents and trademarks in Canada?

A) the Canadian Radio-television Telecommunications Commission
B) the Consumer Products Safety Commission
C) Health Canada
D) the Canadian Intellectual Property Office

Question 31

Which of the following best describes the Canadian Marketing Association (CMA)?

A) an association for the development of pharmaceutical advertisements
B) a regulatory body that is responsible for overseeing the selling practices of the food and drug industries within Canada
C) a self-regulatory group that represents industries' attempts to set guidelines for responsible business practices
D) an agency that protects competitors within the industry

Question 32

What important act was passed in 1975 that has a mission to foster a growing, knowledge-based Canadian economy?

A) the Competition Act
B) the Consumer Packaging and Labelling Act
C) the Broadcasting Act
D) the Boards of Trade Act

Question 33

Camp Gear, Inc. introduces a new line of rough-terrain clothing. The company increases the number of advertisements in several outdoor magazines and establishes a new, updated website for online orders. What stage of the business cycle is most likely occurring at this time?

A) low unemployment and low inflation
B) depression and high inflation
C) growing unemployment and recession
D) recession and deflation

Question 34

During what period does consumer spending reach its lowest level?

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

Question 35

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?

A) validity and reliability
B) flexibility and responsiveness
C) rigidity and vision
D) profitability and coverage

Question 36

What would a computer-chip company that follows the time-based competition strategy most likely do?

A) imitate what its competitors do, only a little later
B) develop a timely and uninterrupted flow of products for target markets
C) work on several generations of technology simultaneously
D) be reactive rather than proactive in the competitive arena

Question 37

Which of the following factors is NOT studied by marketers analyzing the economic environment?

A) unemployment
B) inflation and deflation
C) stock and bond markets
D) resource availability

Question 38

Lockheed Martin won the world's largest ever military contract by proving it could be the first company to develop and fly a new model plane in just four years. What does this illustrate?

A) the importance of rapid prototyping of new products
B) the importance of time-based competition
C) the importance of demarketing
D) the importance of the legal environment

Question 39

Which of the following is NOT a business cycle stage?

A) recovery
B) recession
C) depression
D) inflation

Question 40

Which federal organization concerns itself with the regulation of mobile phones and cable?

A) the Canadian Radio-television Telecommunications Commission
B) the Consumer Products Safety Commission
C) the Federal Power Commission
D) the Environmental Protection Agency

Question 41

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 10 years ago in the same country. What is Zimbabwe experiencing extremely high levels of?

A) growth
B) stagflation
C) deflation
D) inflation

Question 42

What activity is the government involved in when it advertises that smoking is becoming increasingly socially unacceptable?

A) socially responsible marketing
B) demarketing
C) indirect marketing
D) green marketing

Question 43

What occurs during periods of inflation?

A) prices increase and consumer demand decreases
B) prices increase and consumer demand increases
C) prices decrease and consumer demand increases
D) prices decrease and consumer demand decreases

Question 44

The Robinson family recently bought a car because they were offered a no-interest financing option. The family's annual vacation was also booked through a discount travel firm. The family has purchasing power, but they prefer to spend their money cautiously like most other families in the country. The above stated instances indicate which stage of the business cycle?

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

Question 45

What can new technology result in?

A) lower quality of existing products
B) lower availability of customer service
C) reduced prices through new production methods
D) return of products that were once considered obsolete

Question 46

What is the birthrate trend in Canada at the present time?

A) It's increasing.
B) It's decreasing.
C) It's remaining about the same.
D) It's expected to increase dramatically during the next 10 years.

Question 47

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

A) IPMS
B) Wi-Fi
C) VoIP
D) RFID

Question 48

When prices rise due to excess demand and the increasing cost of production, what is the resulting monetary condition known as?

A) recession
B) depression
C) inflation
D) recovery

Question 49

During what economic period does unemployment begin to rise?

A) recovery
B) recession
C) prosperity
D) retrogression

Question 50

What is one major drawback that critics of radio-frequency identification tags argue?

A) loss of jobs with the simplification of tracking capabilities
B) cancer in laboratory animals who wear the radio-frequency identification tags
C) replacement of the bar code as the standard data control method
D) invasion of privacy and erosion of personal freedom

Question 51

Which of the following is NOT a current demographic trend in Canada?

A) The population is getting older.
B) The population is getting more diverse.
C) The birthrate is rising.
D) The population is becoming more affluent.

Question 52

What can lead to a damaging downward spiral, causing a freefall in business profits, lower returns on most investments, and widespread job layoffs?

A) deflation
B) lower interest rates
C) inflation
D) major federal government surplus

Question 53

What type of consumer income are marketers most interested in?

A) discretionary
B) deferred
C) inflationary
D) disposable

Question 54

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 interest in the store or product.
C) Improve customer service to attract more trade.
D) Launch lower-priced products.

Question 55

What are air bags and the development of the Internet examples of?

A) research and development efforts in private industry
B) military research finding applications in consumer products
C) college and university research
D) individuals making technological breakthroughs

Question 56

What type of product category typically falls the least in consumer demand during a recession?

A) luxury products
B) big-ticket items, such as new cars and homes
C) discretionary purchases
D) necessities

Question 57

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. What technology can be used effectively to shorten this waiting period, and easily locate and track items?

A) VoIP
B) GPS
C) RFID
D) Supply chain management

Question 58

During recent recessions, how have consumers shifted their buying patterns?

A) by borrowing money to buy goods
B) by increasing spending across the board
C) by buying now in the belief that prices will rise later
D) by purchasing basic products with low price tags

Question 59

Which of the following is NOT a characteristic of a recovery period?

A) Businesses provide low-priced products and superior service.
B) New product lines are introduced.
C) Consumers are cautiously optimistic.
D) Businesses hold down costs.

Question 60

When gasoline prices are high, many oil companies promote ways to save gas. What process can oil companies begin by providing tips on car maintenance, carpooling, and idling in traffic?

A) supply control
B) counter advertising
C) brand promotion
D) demarketing

Question 61

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, but he exemplifies the behaviour of what type of person?

A) social animal
B) generation Xer
C) social media maven
D) Web addict

Question 62

After manufacturing and selling products, a company must determine how much of the aftermarket it wants to control and to what extent. In what type of strategy could exerting control over wholesalers and retailers become an ethical issue?

A) product
B) packaging
C) distribution
D) price

Question 63

Overall, what is happening to the population of Canada?

A) It's becoming younger, better educated, and more homogeneous.
B) It's becoming older, poorer, and less educated.
C) It's becoming older, more diverse, and more affluent.
D) It's becoming younger, better educated, and less affluent.

Question 64

Which factor would NOT be included in a successful analysis of the social-cultural environment?

A) shifts in demographics
B) changing values
C) lifestyle expectations
D) political affiliations

Question 65

Rogers Communications has gradually increased its level of multicultural programming in Canada and now offers more than 65 channels, broadcasting in over 20 languages. According to this example, what has increased in importance in the Canadian marketplace?

A) competition
B) consumerism
C) cultural diversity
D) political forces

Question 66

What must marketers give equal weight to in order to meet the obligations of social responsibility?

A) demands of activists, 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) multiple boards of directors and executive committees in top levels of corporate management

Question 67

What component of the marketing mix raises numerous ethical questions from the general public?

A) product
B) distribution
C) price
D) promotion

Question 68

Despite the pressures of consumerism, why do firms NOT always give in to consumer demands?

A) because consumers seldom know what they are talking about
B) because in order to survive, firms must achieve reasonable profit objectives
C) because consumers represent only a small segment of the total market
D) because the demands of individual consumers represent little power in the marketplace

Question 69

What is the term for the social force within the environment that aids and protects the buyer by exerting legal, moral, and economic pressure on business?

A) competition
B) consumerism
C) demographic diversity
D) social-cultural influences

Question 70

Which of the following involves the critical ethical issue of invasion of personal privacy?

A) product strategy
B) promotional strategy
C) marketing research
D) pricing strategy

Question 71

Which ethical issue is associated with firms' product strategies?

A) exclusive territories
B) false and deceptive advertising
C) planned obsolescence
D) bait-and-switch advertising

Question 72

Aside from government regulation, what can influence the social responsibility of an organization?

A) labour unions
B) consumerism
C) suppliers
D) trade associations

Question 73

A manufacturer provides discounts to a large retailer in exchange for product advertising, special placement within the stores, and a guarantee that the retailer will purchase a certain volume of product over a three-month period. The manufacturer will not extend this offer to other retailers in the marketplace. What best describes the category that is affected by legal and ethical questions regarding this practice?

A) promotion
B) pricing
C) personal privacy
D) distribution

Question 74

A television advertisement suggests consumers take a proactive role in family health care by requesting that their physician prescribe specific medications. What type of strategy is the advertisement using?

A) promotional
B) price
C) distribution
D) product

Question 75

What is the most highly regulated aspect of the marketing strategy?

A) promotion
B) product
C) pricing
D) distribution

Question 76

Assume that Quaker Oats is offering a new product designed to meet the nutritional needs of women between the ages of 45 and 60. What trend is Quaker Oats responding to?

A) demographic
B) economic
C) social
D) political

Question 77

What is a critical issue facing governmental agencies regarding ethics in marketing research?

A) personal selling
B) truth in advertising
C) planned obsolescence
D) invasion of personal privacy

Question 78

When marketers notify customers of impending changes in return policies, what type of strategy are they incorporating ethics into?

A) promotional
B) pricing
C) product
D) distribution

Question 79

Company A manufactures bottles with concave bottoms, giving the impression that the container holds more liquid than it does. In what type of strategy would this raise issues of ethics?

A) product
B) price
C) packaging
D) distribution

Question 80

What consumer right indirectly results in parental ratings on movies, which indicate appropriate ages for viewing audiences?

A) right to be informed
B) right to be safe
C) right to be heard
D) right to choose freely