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

Question 1

The antitrust laws in the United States were designed to protect the interests of organizations having monopoly positions.

Answer 1

False

Question 2

Six firms - GM,Ford,Chrysler,Toyota,Honda,and Nissan - share 90 percent of all U.S.auto sales.Hence the U.S.auto market can be regarded as a monopoly.

Answer 2

False

Question 3

In addition to planning for change,marketers must set goals to meet the concerns of customers,employees,shareholders,and members of the general public.

Answer 3

True

Question 4

The most direct form of competition occurs among marketers of dissimilar products.

Question 5

Acquisitions and mergers help firms with limited resources to gain access to new markets or new expertise.

Question 6

Major oil companies,such as ExxonMobil and Chevron,often donate large amounts of money toward political campaigns in an attempt to influence government policy in their favor.This is an example of environmental management.

Question 7

Maros,an agricultural biotechnology company,is the sole supplier of genetically engineered seeds and controls 84 percent of the market share for genetically modified crops.This is an example of a monopoly.

Question 8

Changes in an environment are most often the result of sudden crises.

Question 9

The success or failure of a product is independent of the competitive environment.

Question 10

The competition between Amtrak,Hertz,and Delta Airlines for the travelers' dollar is considered indirect competition because these services can be substituted for one another.

Question 11

Environmental scanning is the process of collecting external data,analyzing it,and determining whether the trends identified are opportunities or threats to the company.

Question 12

The deregulation movement has ended total monopoly protection for most utilities.

Question 13

The firm that provides regional expertise in a strategic alliance does not share the risks associated with the business.

Question 14

Environmental management rarely works because marketers cannot hope to influence the external environment,they can only respond to changes in it.

Question 15

Improved product quality and superlative customer service can help a company gain a competitive advantage in the marketplace.

Question 16

A large pharmaceutical company invents a very small device that can be implanted in people with diabetes to provide time-released amounts of insulin.A patent for this invention will set up a temporary oligopoly for the company.

Question 17

Marketing theory would define Starbucks,Caribou Coffee,and Dunkin' Donuts as indirect competitors because some coffee drinkers are particular about the brands they purchase.

Question 18

The environmental scanning process helps firms to determine the best response to a particular environment change.

Question 19

Strategic alliances are necessary in countries where local laws require foreign companies to work with local businesses.

Question 20

A pharmaceutical company that owns a patent for a new drug obtains exclusive rights to produce and market that drug for an entire lifetime.

Question 21

The first phase of federal regulation of business was aimed at protecting competitors and included the Robinson-Patman Act,passed in the 1930s.

Question 22

The Federal Trade Commission was established to facilitate trade by removing tariffs and other trade barriers among Canada,Mexico,and the United States.

Question 23

A customer of All World Bank receives telemarketing calls and emails from the bank's business partners,Specialty Insurance and Global Investments.Since the customer has signed into the Do Not Call Registry,these companies are in violation of the federal regulation.

Question 24

Public and private consumer interest groups and self-regulatory organizations are part of the legal environment.

Question 25

The gross domestic product (GDP)of a nation does not take into consideration the goods and services that are exported to foreign markets.

Question 26

The FTC and U.S.Department of Justice can stop mergers if they believe the proposed acquisition will reduce competition by making it harder for new companies to enter the field.

Question 27

The governmental regulations that affect marketing practices are mainly for advertising and distribution,and do not place any restrictions and prohibitions on the design and packaging of products.

Question 28

A clothing manufacturer sells to 300 retail chains and boutiques within the United States.Since West Coast retailers have a more affluent clientele,they can command higher retail prices.This is likely to be considered illegal under the Clayton Act.

Question 29

Sears offers discount coupons and lowers prices on 1,000 items in the store in order to generate sales.This is most likely to occur during an economic recession.

Question 30

The industry deregulation phase has focused on increasing the competition in industries such as utilities and financial services.

Question 31

The newest regulatory frontier in the United States is cyberspace,where state and federal regulators are investigating ways to police the Internet and online services.

Question 32

The decision of whether or not to compete should be based on a firm's resources,objectives,and expected profit potential.

Question 33

The Federal Food and Drug Act was designed to maintain a competitive environment in the food and drug industries.

Question 34

The strategies of time-based competition and first mover can be advantageous to companies that are most impacted by technology.

Question 35

The Sherman Antitrust Act,Clayton Act,and Federal Trade Commission Act are evidence of federal commitment to maintaining a competitive business environment in the United States.

Question 36

Time-based competition is a strategy of developing and distributing goods and services after a competitor to observe the customers' response to a particular product.

Question 37

Consumer spending sinks to its lowest level during an economic depression.

Question 38

The government's Do Not Call Registry exempts callers representing not-for-profit organizations and political candidates.

Question 39

One way the Federal Trade Commission can enforce laws is by issuing a consent order in which a firm accused of violations can agree to voluntary compliance without admitting guilt.

Question 40

The existing U.S.legal framework was constructed in a logical,systematic manner,resulting in a coherent and easily understood body of laws.

Question 41

Not-for-profit organizations are not impacted by the rate of discretionary spending.

Question 42

During an eighteen-month period,sales of Mercedes automobiles,Carnival Cruise vacations,and Florida real estate increased by at least 20 percent.A marketer might deduce that the business cycle is in the late stages of recovery or experiencing a period of economic prosperity.

Question 43

Long deflationary periods can cause a freefall in business profits,lower returns on most investments,and widespread job layoffs.

Question 44

As economic recovery begins after a period of recession,consumption patterns would reveal a sharp spike.

Question 45

Technological advancement helps reduce prices and offers superior,cost-efficient distribution methods.

Question 46

Deflation is necessarily better for the economy than inflation as inflation devalues money and reduces the purchasing power of consumers.

Question 47

Foreign currency fluctuations,labor costs,and political stability are part of an international economic environment that affects U.S.marketers.

Question 48

Marketers are usually more concerned with the amount of discretionary income in households.

Question 49

Despite its many advantages,technology can seldom address social concerns.

Question 50

Discretionary income is the amount of money people have to spend on buying necessities such as food,clothing,and housing.

Question 51

Technological innovations create not just new goods and services but also entirely new industries.

Question 52

Electric power companies often give advice on how consumers can use less electricity during the summer and save money on their electric bills.This is an example of demarketing.

Question 53

Economic recovery can be described as a period when consumer spending begins to cautiously increase,while companies try to hold down rising costs.

Question 54

Demarketing is a reaction to a surplus of production materials that results in product supply exceeding demand.

Question 55

A stay-at-home mother,a high school senior,and a retired government employee are considered unemployed if they do not have a job and don't want one.

Question 56

During the recession stage of the business cycle,consumers have enough money to spend,but caution often restraints their willingness to buy.

Question 57

Laura decided to quit her job and travel for a year.She can be considered a part of the population that is unemployed.

Question 58

A major constraint on consumer spending is deflation,which devalues money by reducing the products it can buy through persistent price increases.

Question 59

During an economic recession,marketers look to emphasize value in their offerings by reducing prices in order to help consumers stretch their budget dollars.

Question 60

The extent of consumer spending is directly related to the rate of unemployment.

Question 61

The Direct Marketing Association helps consumers to get their names removed from marketers' targeted lists.

Question 62

The main purpose of the community development financial institutions certified by the U.S.Treasury Department is to educate low-income borrowers.

Question 63

The choice between pleasing all consumers and remaining profitable-thus surviving-defines one of the most difficult dilemmas facing business.

Question 64

The federal government has imposed strict regulations on food advertising for children based on their nutritional standards.

Question 65

The United States is becoming culturally more diverse and subculture populations are rising.

Question 66

Sentencing guidelines act as an incentive for corporations to implement effective ethics compliance programs-if they are hauled into court,the existence of such a program can help reduce penalties.

Question 67

Ensuring ethical practices means promising customers and business partners to sacrifice quality and fairness for profit.

Question 68

Production,promotion,and reclamation of environmentally sensitive products is the basic premise of ethical marketing.

Question 69

The cultural diversity of the United States results in various submarkets,each with unique values,cultural characteristics,purchasing behaviors,and consumer preferences.

Question 70

Paying universities for the use of their logo,team name,and mascot in advertising products and services to their students is considered ethical.

Question 71

Creative applications of technology can benefit society,but rarely give firms a definite competitive edge since other firms can simply copy the technology.

Question 72

Colleges and universities,and other not-for-profit institutions play major roles in the development of new technology.

Question 73

The local government in Colorado has made it mandatory for firms to publish information on labels,regarding the environmental impact of their products.The government is trying to protect the consumers' right to be safe.

Question 74

The demand for green products is increasing as consumers have responded by purchasing more and more green goods,providing profits and opportunities for growth to the companies that make and sell them.

Question 75

Fresh Meadows,an organic yogurt manufacturer,organizes camps to assist and encourage farmers in adopting organic farming practices.Fresh Meadows is engaging in socially responsible marketing.

Question 76

People develop standards of ethical behavior based on their own systems of values.

Question 77

The U.S.military has historically been a source of product innovation and many of its technologies have been adapted for the consumer markets.

Question 78

The basic consumer rights expounded by President Kennedy include "the right to be safe," referring to the idea that the goods and services people buy should not be injurious in normal use.

Question 79

Marketing strategies that work for a particular cultural group in the United States will always work when applied to the same cultural group abroad.

Question 80

Managers of firms have traditionally focused on improving their relationship with the government and the general public as part of their social responsibility.