Deck 3: The Global Environment

Question 1

In periods of inflation, the purchasing power of money increases.

Answer 1

False

Question 2

The Federal Commerce Commission (FCC)serves as the consumer protection agency for the United States.

Answer 2

False

Question 3

A country's income distribution provides the most reliable picture of its purchasing power.

Answer 3

True

Question 4

A long-time leader in the beverage industry, Pepsi saw soft-drink sales decline when competitors began selling juices, teas, and energy drinks. This is an example of indirect competition.

Question 5

A recession occurs when inflation rises for two or more consecutive quarters.

Question 6

Environmental scanning involves monitoring developments within a firm's control to evaluate the firm's strengths and weaknesses.

Question 7

One of the biggest sociocultural changes in the United States over the past half century has been the shift from a nation of primarily one-income families to one in which two-income families and single-parent households predominate.

Question 8

A recession and contraction of the economy tends to reduce consumer confidence.

Question 9

Direct competition is also known as primary competition.

Question 10

Created in 1945, the WTO is governed by and accountable to the 188 countries that make up its near-global membership.

Question 11

In 2018, the United States, Canada, and Mexico reached a deal to replace its current trade agreement.

Question 12

Direct competition occurs when a product provides alternate solutions to the same market.

Question 13

Rapidly retiring Baby Boomers make up only a quarter of the U.S. population, but account for 50 percent of all domestic consumer spending.

Question 14

The Democratic Republic of Congo in Africa joined CAFTA in 2004, renaming the trade agreement DR-CAFTA.

Question 15

Compared with other generational groups, Baby Boomers have the greatest familiarity with and most use for digital communication, social media, and other forms of technology.

Question 16

Economic factors influence almost every marketing decision a firm makes.

Question 17

The six major external factors that can influence the marketing environment of a firm are: economic factors, demographic factors, technological factors, political factors, legal factors, and sociocultural factors.

Question 18

The World Trade Organization was officially formed in 1995 under the Marrakech Agreement.

Question 19

Currency fluctuations can provide marketing opportunities whether a currency is appreciating or depreciating.

Question 20

Projections indicate that by 2050 the Hispanic population in the United States will almost double to more than 127 million.

Question 21

Donations made to nonprofit organizations are not usually affected by economic recessions.

Question 22

A firm that is engaged in environmental scanning is monitoring developments outside of the firm's control in order to detect and respond to

A)the strengths of the firm.
B)environmental issues associated with the firm's operations.
C)market opportunities associated with environmental concerns.
D)the weaknesses of the firm.
E)threats and opportunities.

Question 23

An economy has fallen into a recession when

A)the unemployment rate declines for two or more consecutive quarters.
B)inflation and unemployment both rise consecutively.
C)overall GDP declines for two or more consecutive quarters.
D)the consumer price index falls below the average yearly standard.
E)inflation rises for two or more consecutive quarters.

Question 24

Indirect competition occurs when

A)consumers purchase products that they did not intend to buy.
B)consumers choose between two products that perform the same function.
C)products are marketed to a new consumer segment.
D)a company introduces a new product to its product line.
E)products provide alternate solutions to the same market.

Question 25

Maya needed to pick up some yogurt from the store. She was surprised to find that the store was out of her usual brand, Chobani. Rather than go to another store, she decided to buy a carton of Yoplait yogurt instead. In this example, Yoplait represents

A)indirect competition.
B)an unsought good.
C)a substitute product.
D)a disposable product.
E)lateral competition.

Question 26

The belief by residents of a country that it is inappropriate or immoral to purchase foreign-made goods and services is referred to as consumer bias.

Question 27

Inflation can be defined as

A)the rise in the rate of unemployment due to a slowing economy.
B)an increase in the general level of prices of products in an economy over a period of time.
C)a decline in gross domestic product for two or more consecutive quarters.
D)the rise in the amount of goods and services that can be purchased for a specific amount of money.
E)a decline in consumer confidence about the overall state of the economy and their own personal finances.

Question 28

Monitoring developments outside of the firm's control with the goal of detecting and responding to threats and opportunities is called

A)data mining.
B)environmental scanning.
C)competitive analysis.
D)brand positioning.
E)market assessment.

Question 29

Compare the following product offerings. Which is the best example of direct competition?

A)Taco Bell and Subway
B)carpet cleaning stores and hardware stores that rent carpet cleaners
C)the local pizzeria and McDonald's
D)Starbucks and Dunkin' Donuts
E)a hair salon and a beauty supply store

Question 30

A sudden drop in the average consumer income would be an example of which external force affecting the marketing environment?

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

Question 31

Direct competition is also known as ________ competition.

A)brand
B)in-house
C)market
D)substitute
E)lateral

Question 32

Analyzing cultural fit and overcoming consumer ethnocentrism are essential aspects of environmental scanning on a global scale that help firms create value for international consumers.

Question 33

Overall GDP is the most common gauge of

A)the overall expansion or contraction of an economy.
B)the balance of trade between countries.
C)fluctuations in currency exchange rates.
D)unemployment and future job forecasting.
E)the consumer price index and purchasing power parity.

Question 34

The use of social media is not applicable to nonprofit organizations because they tend to get the most success from traditional marketing methods.

A)the marketing environment.
B)a company's internal forces.
C)the organizational environment.
D)a company's demographic characteristics.
E)external environmental factors.

Question 35

Compare the following product offerings. Which is an example of indirect competition?

A)Wendy's and Taco Bell
B)Häagen-Dazs and Ben & Jerry's ice cream
C)Skippy and Jif peanut butter
D)Sirius XM radio and Spotify
E)Shell and BP gas

Question 36

Nonprofit organizations primarily rely on three sources of funding: individual donations, corporate donations, and federal funds.

Question 37

A situation in which products that perform the same function compete against one another is referred to as

A)lateral competition.
B)direct competition.
C)functional competition.
D)primary competition.
E)indirect competition.

Question 38

The six major external factors that influence the marketing environment of a firm are economic, demographic, sociocultural, technological, legal, and

A)environmental.
B)international.
C)domestic.
D)political.
E)financial.

Question 39

Compare the following statements to determine which one accurately depicts how income is distributed across the U.S. population.

A)Income for the middle class in the United States has consistently grown faster than any other wage-earning bracket.
B)Over the past several decades, there has been a robust shift in the lowest wage earners moving upward to the middle class.
C)The top wage earners of the U.S. population are earning only a small percentage of the country's adjusted gross income.
D)Over the past several decades, there has been little shift in any of the wage-earning brackets of the U.S. population.
E)Over the past several decades, income for the highest wage earners grew at a much quicker pace than for households in the bottom wage-earning bracket.

Question 40

A measure of the market value of all officially recognized final goods and services produced within a country in a given period is referred to as

A)purchasing power parity.
B)gross domestic product.
C)the balance of trade.
D)the currency exchange rate.
E)the consumer price index.

Question 41

Marketers are particularly interested in targeting Baby Boomers because they typically possess which two things that marketing professionals seek?

A)higher education levels and disposable income
B)higher paying jobs and greater interest in leisure activities
C)greater purchasing power and more consumer confidence
D)disposable income and free time
E)higher paying jobs and higher education levels

Question 42

The generation of children born between 1946 and 1964 is retiring at a rate of 10,000 per day. What is the name of this demographic group?

A)Millennials
B)Generation X
C)Generation Y
D)Baby Boomers

Question 43

Which ethnic group population in the United States is expected to almost double by the year 2050?

A)Asian Americans
B)Hispanics
C)African Americans
D)Eastern Europeans
E)Pacific Islanders

Question 44

Compare the following statements and select the one that reflects your text's assertion as to why educated consumers are prime targets for marketing strategies.

A)Educated consumers are more likely to earn significantly more money throughout the course of their lifetime.
B)Educated consumers are more willing to spend money than uneducated consumers.
C)Educated consumers typically have more access to various forms of media and therefore are easier to target as a consumer group.
D)Educated consumers know that in order to keep the economy moving, people must spend money.
E)Educated consumers typically have less free time and therefore spend money on products that save them time and make their lives easier.

Question 45

A measure of how optimistic consumers are about the overall state of the economy and their own personal finances is referred to as

A)consumer confidence.
B)purchasing power.
C)market confidence.
D)purchasing confidence.
E)consumer expectations.

Question 46

The external marketing factor that refers to the combination of social and cultural factors that affect individual development is

A)demographics.
B)human nature.
C)sociocultural.
D)ethnicity.
E)culturalism.

Question 47

The amount of spending money available to households after paying taxes is called

A)discretionary income.
B)unaccountable income.
C)disposable income.
D)tax-free income.
E)at-will income.

Question 48

Daniel is looking to buy a hybrid vehicle because he is noticing that the price of gasoline continues to rise compared to years past. The rise in the price of gasoline is most likely a result of

A)deflation.
B)a recession.
C)a rise in GDP.
D)inflation.
E)an increase in purchasing power.

Question 49

According to your text, one of the biggest sociocultural changes in the United States over the past half century has been

A)the immigration of Hispanics into the country.
B)the decline of females as the primary purchasers of products.
C)the gradual increase of college graduates in the workplace.
D)the increased use of the Internet for purchasing consumer products.
E)the shift from one-income families to two-income and single-parent households.

Question 50

Gwendolyn is a 45-year-old Hispanic female who received a college degree in psychology and now works as a school counselor. In her free time, she likes to play tennis. Based on this information, select the descriptor that would not be classified as a demographic characteristic.

A)Gwendolyn is 45 years old.
B)Gwendolyn is Hispanic.
C)Gwendolyn likes to play tennis.
D)Gwendolyn is a female.
E)Gwendolyn has a college degree.

Question 51

Which group of people is the fastest growing demographic group in the United States?

A)teenagers
B)middle-aged women
C)seniors
D)college-age males
E)young adults

Question 52

What external marketing factor is at work when political action committees raise money to help elect individuals to promote a particular issue related to their industries?

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

Question 53

The consumer protection agency for the United States is the

A)Consumer Protection Commission.
B)Federal Communications Commission.
C)Food and Drug Administration.
D)Federal Trade Commission.
E)Bureau of Consumer Financial Protection.

Question 54

According to your text, of all the external factors that affect the marketing environment, which one represents the most significant challenges, as well as the most significant opportunities, for marketing professionals?

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

Question 55

Which regulation was passed to eliminate monopolies and guarantee competition?

A)the Robinson-Patman Act (1936)
B)the Wheeler-Lea Amendment (1938)
C)the Sherman Antitrust Act (1890)
D)the Fair Packaging and Labeling Act (1966)
E)the Telephone Consumer Protection Act (1991)

Question 56

Currently, females account for what percentage of all consumer purchases in the United States?

A)5 percent
B)12 percent
C)35 percent
D)60 percent
E)85 percent

Question 57

The description of human populations based on characteristics such as age, gender, ethnicity, and education level is referred to as

A)statistical analysis.
B)sociocultural analysis.
C)psychographics.
D)demographics.
E)consumer group profiling.

Question 58

A marketer that uses social media sites to engage potential customers is most likely targeting which demographic group?

A)Generation X
B)silent generation
C)Millennials
D)Baby Boomers

Question 59

What was the purpose of the Wheeler-Lea Act (1938)?

A)It eliminated monopolies and guaranteed competition.
B)It made deceptive and misleading advertising illegal.
C)It guaranteed that product packages are labeled correctly.
D)It banned unfair credit card rate increases.
E)It established the Federal Trade Commission.

Question 60

If the cost of groceries goes up by 10 percent this year, the amount of groceries you can buy for $50 decreases by that same 10 percent. This is an example of

A)deflation.
B)a recession.
C)a rise in GDP.
D)a decline in GDP.
E)a decrease in purchasing power.

Question 61

International trade agreements, monetary unions, and organizations can impact the environment in which a firm operates in all of the following ways except

A)they can affect how easy it is for firms to enter a foreign market.
B)they can affect what the currency exchange rate is between countries.
C)they can affect what competition firms will encounter in the domestic market.
D)they can facilitate the exchange of money and products across borders.
E)they can make it easier to bypass regulations on economic activity.

Question 62

According to your text, what provides the most reliable picture of a country's purchasing power?

A)an appreciating currency value
B)its income distribution
C)its level of gross domestic product
D)a stable rate of currency fluctuation
E)a high level of consumer confidence

Question 63

Taxes on imports and exports between countries are called

A)import/export fees.
B)trade restrictions.
C)duties.
D)tariffs.
E)concessions.

Question 64

As described in your text, how did marketers at Disney utilize technology to provide a more hassle-free experience at their theme parks?

A)by introducing wristbands with a radio-frequency identification device
B)by installing smartphone charging stations
C)by providing users with a park pass that could be used for their entire stay
D)by introducing a laser stamp that could be used instead of a park pass
E)by installing monitor screens showing wait times for various rides/attractions

Question 65

Analyze the following statements to determine what would happen if the value of the euro depreciates relative to the dollar.

A)It would decrease the spending power of American consumers seeking to buy European products.
B)It would increase the spending power of European consumers seeking to buy American products.
C)It would increase the spending power of American consumers seeking to buy European products.
D)The price of goods and services for European products would become evenly matched with American products.
E)The spending power of both American and European consumers would increase.

Question 66

What country has been criticized for undervaluing its currency?

A)the United States
B)China
C)Japan
D)Great Britain
E)Brazil

Question 67

The price of one country's currency in terms of another country's currency is referred to as

A)the currency exchange rate.
B)the currency fluctuation rate.
C)the value fluctuation rate.
D)the value exchange rate.
E)the currency expectation rate.

Question 68

NAFTA is a trade agreement between

A)Brazil, China, and India.
B)the United States, Canada, and Mexico.
C)the European Union and the United States.
D)the United States and China.
E)the United States, Mexico, and Brazil.

Question 69

When marketers for Walt Disney World in Florida attract French and British families by advertising the resort's new affordability for Europeans, what global marketing environment factor are they employing?

A)income distribution levels
B)cultural fit
C)lowered trade barriers
D)international economic cooperation
E)currency fluctuation

Question 70

Compare the following statements to determine which one is accurate regarding marketing on a global scale versus marketing domestically?

A)There is no difference between how products are marketed globally versus domestically.
B)The external marketing factors that are considered when marketing domestically do not apply when marketing products globally.
C)Most U.S. firms do not need to consider the global marketing environment in any context.
D)Environmental scanning on a global scale is more complex than it is in the domestic environment.
E)Small businesses are not affected by global trends like large corporations are.

Question 71

The largest share of U.S. exports is to

A)the European Union.
B)China.
C)Canada and Mexico.
D)Brazil and India.
E)Canada and Japan.

Question 72

When it comes to income distribution, what income class is the marketing professional particularly attracted to?

A)middle-income households
B)upper-income households
C)the top wage earners
D)lower-income households
E)those below the poverty line

Question 73

While shopping for back-to-school clothes, Miranda uses apps on her smartphone to comparison shop, and to obtain coupons and fashion advice. What external factor affecting the marketing environment does this represent?

A)economic
B)demographic
C)legal
D)sociocultural
E)technological

Question 74

What was one of the key goals of the North American Free Trade Agreement?

A)the allowance of agricultural exports
B)the elimination of tariffs
C)the establishment of trade embargoes
D)the establishment of trade sanctions
E)the equalization of import/export fees

Question 75

The USMCA is a trade agreement

A)between the United States, Mexico, and Central America.
B)that replaces the current CAFTA trade agreement.
C)between 20 Latin American countries.
D)that replaces the current NAFTA trade agreement.
E)between the United States and the European Union.

Question 76

Currency fluctuations can provide marketing opportunities

A)only when a currency is appreciating.
B)only if currency exchange rates remain stable.
C)only internationally, but not domestically.
D)only when a currency is depreciating.
E)whether a currency is appreciating or depreciating.

Question 77

A nation's purchasing capability tends to increase when the proportion of

A)lower-income households increases.
B)upper-income households increases.
C)top wage earners increases.
D)middle-income households increases.
E)top wage earners decreases.

Question 78

What term refers to how the value of one country's currency changes in relation to the value of other currencies?

A)currency exchange
B)currency fluctuation
C)value fluctuation
D)value exchange
E)currency expectation

Question 79

How are metrics used to help international marketers?

A)they provide marketers with a clearer picture of the international environment affecting their organizations.
B)they can make it easier for marketers to bypass regulations on economic activity.
C)they help marketers to navigate the legal and regulatory environment.
D)they help to regulate currency fluctuations that occur between countries.
E)they provide marketers with information on how to successfully manufacture products in a foreign country

Question 80

CAFTA is a trade agreement for countries in

A)Africa.
B)Asia.
C)Central America.
D)North America.
E)Europe.