Deck 2: The Environment of Marketing in the Twenty-First Century

Question 1

The macroenvironment of a firm includes the company, its consumers, suppliers, distributors, and other facilitators of the marketing function and competition.

Answer 1

False

Question 2

The macroenvironment of a firm includes the socio-demographic and cultural environment, the economic and natural environment, the political environment, and the technological environment.

Answer 2

True

Question 3

It is the responsibility of the marketing department to manage the various components of the microenvironment, addressing their weaknesses and focusing on their strengths in a manner that is congruent with the company's marketing and organizational goals.

Answer 3

True

Question 4

Within the company itself, the marketing manager or marketing department will be involved in three arenas: the battle for limited resources, seeking a voice in the company strategies, and developing a marketing mindset.

Question 5

In terms of the marketing budget as a percentage of a company's revenues, the highest percentage of firms, 43%, spend between 1% and 5% of their company's revenues on marketing.

Question 6

Keeping current customers is important, because it costs approximately three times more to gain a new customer than it does to retain a current customer.

Question 7

Manufacturers rely on distributors to deliver their products, to advertise and promote the products, and, often, to offer financing to other distributors down the channel, or to the consumer, and thus facilitate purchase.

Question 8

Dealing with suppliers, distributors, and other facilitators of marketing is a macroenvironment-related concern for marketing managers.

Question 9

While not all customers are alike, a company can use the same marketing plan with only minor variations.

Question 10

The primary customer groups are consumers, manufacturers, governments, institutions, other businesses, and retailers.

Question 11

The task of marketing is to meet the needs and wants of consumers more effectively and efficiently than the competition.

Question 12

In evaluating competitive forces, it is important to consider and understand the first two layers of competition. The other layers do not have any significant impact on a firm's marketing plan.

Question 13

For a fast food restaurant such as Subway, the second level of competition would be other fast food restaurants that serve other types of food such as hamburgers, chicken, and tacos.

Question 14

The macroenvironment encompasses the elements of the broader environment that are within the control of the firm.

Question 15

The socio-demographic and cultural environment consists of elements such as demographics, subcultures, cultures, and all other elements in the environment related to consumers' backgrounds, values, attitudes, interests, and behaviors.

Question 16

Demographics are statistics that describe a population, such as attitude, interests, and opinions.

Question 17

Age is an important marketing variable because spending habits, media preferences, and interests vary among the different age categories.

Question 18

Compared to all the demographic age groups in the United States, Younger Boomers have the highest percentage of spending power, 26% of the total.

Question 19

Compared to the various demographic groups, empty nesters have the highest average household income, at $58,889.

Question 20

Generation Y, individuals born between 1978 and 2002,, is the smallest of the six demographic groups, accounting for only 5% of the total spending power, but this category is growing in size and wealth.

Question 21

Nearly 90% of Generation X is either living in a rental or living with parents; therefore, for this demographic segment, spending on homes and home furnishings is a low priority.

Question 22

Younger boomers spend a substantial amount of their income on television sets and stereo systems, rather than on major appliances, such as refrigerators and stoves.

Question 23

Because the focus of Generation X is on the family and children, they spend heavily on food, housing, transportation, and personal services.

Question 24

For Generation Y, time is at a premium as they strive to balance work and family so they outsource daily tasks such as house cleaning, lawn mowing, babysitting, and other domestic chores.

Question 25

Because baby boomers represent 42% of the population, they have been divided into two groups: younger boomers, born between 1954 and 1964, and older boomers, born between 1942 and 1953.

Question 26

For older baby boomers, the focus is on the home and family, with the majority, 60%, owning their own home.

Question 27

Priorities for the older boomers, born between 1942 and 1953,, are upgrading their homes, ensuring education and independence of their children, luxury items like a boat, and going on vacations.

Question 28

Zoomers, a subcategory of seniors, refuse to retire, and want to continue to look good physically; consequently, they are spending large amounts of money on cosmetic surgery, clothing, and sports cars.

Question 29

Empty nesters, ages 55-64, focus on home mortgages, new furniture, new automobiles, and personal indulgence items since their children have left home and they have already paid for their college.

Question 30

For seniors, individuals over the age of 65, health care becomes the number one priority as this group spends six times more on health care than the average person.

Question 31

Elements of culture include language, religion, cultural values, norms, social status, ethnicity, and heredity.

Question 32

Individualism and materialism were dominant values in the United States until September 11, 2003. Since then family values, the home, and religion are making a comeback as important cultural values.

Question 33

The cultural landscape in the United States has changed radically with the increase in multiculturalism.

Question 34

Marketing is an important driver of the economy; in turn, the economy has a profound impact on marketing decisions and on consumers.

Question 35

When the United States experiences a downturn in the economy, reverberations are felt among developed nations, but not in emerging markets.

Question 36

While economies and markets worldwide are interdependent, some markets and economies are more advanced than others and tend to grow more rapidly.

Question 37

Examples of middle income countries with emerging markets include Brazil, Argentina, Chile, Peru, and the transitional economies of Central and Eastern Europe.

Question 38

The categories of countries based on the World Bank's classification system include developed countries, emerging markets, and industrialized countries.

Question 39

High-income countries offer marketers great potential because they have consumers with the highest per capita income, but they also present challenges because their markets are in the mature stage, consumers have established preferences, and competition is intense.

Question 40

Most of the countries in Africa would be classified as middle-income countries since they have emerging markets.

Question 41

Economic development can be explained in terms of productivity, economic exchange, technological improvements, and income.

Question 42

According to the Rostow model of economic development, the first stage of modernization is the transitional society.

Question 43

According to the Rostow model of economic development, countries dominated by agriculture would be classified as a traditional society.

Question 44

According to the Rostow model of economic development, during the take-off stage, growth becomes the norm and improvements in production lead to the emergence of leading sectors.

Question 45

According to the Rostow model of economic development, during the drive-to-maturity stage, leading sectors shift toward durable goods aimed at a high level of mass consumption.

Question 46

Middle-class consumers are less likely to be affected by economic cycles than either lower- or upper-class consumers. Their purchase patterns tend to remain constant as they continue to purchase goods and services.

Question 47

Topography, hydrology, climate, population, and environmental quality contribute to the status of a particular country as a viable trade partner.

Question 48

A country's population is an important economic factor because a high population can tax a country's infrastructure and impede the optimal functioning of business.

Question 49

The largest industry in terms of spending for research and development in 2007 was computer programming and computer equipment.

Question 50

A poor economic performance and forecast are likely to lead to greater levels of risk for companies because of higher inflation and higher unemployment.

Question 51

The microenvironment of a firm includes

A) the company, its consumers, suppliers, distributors, and other facilitators of the marketing function, and competition
B) the socio-demographic and cultural environment, the economic and natural environment, the political environment, and the technological environment
C) all of a company's stakeholders, such as employees, customers, society, government officials, stockholders, and special interest groups
D) all of a company's internal stakeholders such as employees, customers, and stockholders

Question 52

The macroenvironment of a firm includes

A) the company, its consumers, suppliers, distributors, and other facilitators of the marketing function, and competition
B) the socio-demographic and cultural environment, the economic and natural environment, the political environment, and the technological environment
C) all of a company's stakeholders, such as employees, customers, society, government officials, stockholders, and special interest groups
D) all of a company's external stakeholders such as suppliers, government agencies, special interest groups, and the local community

Question 53

In terms of the marketing budget as a percentage of a company's revenues, the highest percentage of companies, 43%, have a marketing budget that is between _____ of their company's revenue.

A) 1-5%
B) 6-10%
C) 11-20%
D) 21-50%

Question 54

It is important for marketing to have a voice in company strategies for all of the following reasons except

A) marketing strategies are derived from corporate strategies and goals
B) marketing decisions influence production schedules and product modifications
C) more money is spent on marketing than on any other function within the business
D) expansion to a new market involves marketing decisions

Question 55

While the purchasing department deals primarily with suppliers, the outcome of the relationship is important to the marketing department for all of the following reasons except

A) changes in prices of supplies will impact the price of the firm's products
B) any disruption in the supply of materials can cause a delay in production and impact the marketing function
C) the quality of supplies used will impact the quality of the product produced, and thus impact the way it is marketed
D) the marketing department is responsible for ensuring that a continual supply of finished products will always be available for customers to purchase

Question 56

The macroenvironment includes all of the following except

A) socio-demographic environment
B) cultural environment
C) competitive environment
D) technological environment

Question 57

Elements of the socio-demographic and cultural environment include all of the following except

A) economics
B) demographics
C) subcultures
D) consumer backgrounds, values, attitudes, interests, and behaviors

Question 58

The demographic group that accounts for the highest percentage of total U.S. spending, at 26%, is

A) Generation X
B) Younger boomers
C) Older boomers
D) Empty nesters

Question 59

The demographic group that accounts for the lowest percentage of total U.S. spending, at 5%, is

A) Generation X
B) Seniors
C) Generation Y
D) Empty nesters

Question 60

The demographic group that is the largest with 23.9 million households and has the highest average number of people per household at 3.3 , is

A) Generation X
B) Generation Y
C) Older boomers
D) Younger boomers

Question 61

_____ contributes only 5% of the total spending power and is the smallest of the six demographic groups, but is growing in both size and wealth.

A) Generation Y
B) Generation X
C) Younger Boomers
D) Seniors

Question 62

_____ can be described as having financial smarts since they have already started saving for retirement. They want jobs with flexibility that allows them to accommodate family and personal lives. As consumers they are multitaskers juggling e-mail while talking on cellphones and working online.

A) Generation Y
B) Generation X
C) Younger Boomers
D) Seniors

Question 63

All of the following are terms used to define or describe subgroups of Generation Y except

A) Zoomers
B) Echo-Boomers
C) Next Generation
D) MyPod Generation

Question 64

Nearly 90% of _____ is either living in a rental or living with parents; therefore, for this segment, spending on homes and home furnishings is a low priority.

A) Generation Y
B) Generation X
C) Younger Boomers
D) Seniors

Question 65

The collective spending priorities of _____ revolve around personal appearance and having fun.

A) Generation Y
B) Generation X
C) Younger Boomers
D) Older Boomers

Question 66

Time is at a premium as they strive to balance work and family, so _____ outsource daily tasks such as house cleaning, lawn mowing, babysitting, and other domestic chores.

A) Generation Y
B) Generation X
C) Younger Boomers
D) Older Boomers

Question 67

_____ represent 42% of the population in the United States, but account for 50% of the total spending.

A) Generation Y
B) Generation X
C) Baby Boomers
D) Empty Nesters

Question 68

_____ were born between 1954 and 1964, and have an estimated spending power of $1.1 trillion.

A) Generation Y
B) Generation X
C) Younger Boomers
D) Older Boomers

Question 69

McMansions are super-sized, expensive homes on relatively small lots in suburban neighborhoods and are most frequently associated with

A) Generation Y
B) Generation X
C) Younger Boomers
D) Seniors

Question 70

_____ spend considerable amount of their income on mortgages, home furnishings, and renovations. The remaining disposable income is spent on family purchases such as toys, pets, playground equipment, and large recreational items such as boats and four-wheelers.

A) Empty Nesters
B) Generation X
C) Younger Boomers
D) Older Boomers

Question 71

Insurance and investments are high-ticket items for _____ as they think about their later years and retirement. With fewer responsibilities at home, this demographic group spends considerably more on vacations and recreation than the other demographic groups.

A) Empty Nesters
B) Seniors
C) Younger Boomers
D) Older Boomers

Question 72

_____ were born between 1942 and 1953, and account for 24% of the total spending, an estimated $1 trillion.

A) Empty Nesters
B) Generation X
C) Younger Boomers
D) Older Boomers

Question 73

Zoomers are a subcategory of _____ whose lifestyles resemble those of individuals who are 20 years younger, and who plan to continue living this way. They are the Yuppies of the 1980s.

A) Empty Nesters
B) Generation X
C) Younger Boomers
D) Older Boomers

Question 74

The _____ are a special category of boomers who perform daily exercise, calculate daily nutritional and caloric needs, orchestrate a social support system, and have a positive self-concept and a passion for living life to the fullest.

A) Millennials
B) Second Baby Boomers
C) Echo-Boomers
D) Zoomers

Question 75

Over 80% of _____ own their home and many have paid their mortgages in full. Investments and insurance are high ticket items for this group.

A) Empty Nesters
B) Generation X
C) Younger Boomers
D) Older Boomers

Question 76

Empty nesters, a market identified as individuals between 55 and 64, are subsegment of the

A) Seniors
B) Generation X
C) Baby Boom generation
D) Millennials

Question 77

Because their children have left the home, _____ focus their attention on fancy, new automobiles they could not afford earlier. They also purchase new furniture, appliances, and china to enhance the appearance of their homes.

A) Empty Nesters
B) Generation X
C) Younger Boomers
D) Older Boomers

Question 78

The Senior market, individuals over 65, are expected to grow to above _____ in the next five years.

A) 60,000,000
B) 75,000,000
C) 100,000,000
D) 125,000,000

Question 79

Because _____ tend to stay at home more, they spend 50% more than the average consumer on fruit, vegetables, and other food items.

A) Empty Nesters
B) Seniors
C) Younger Boomers
D) Older Boomers

Question 80

A continuously evolving totality of learned and shared meanings, rituals, norms, and traditions among the members of an organization or society is the definition of

A) culture
B) elements of culture
C) cultural values
D) norms