Marketing Defined Explained Applied 2nd Edition by Michael P Levens -Test Bank

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Marketing Defined Explained Applied 2nd Edition by Michael P Levens -Test Bank

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Marketing Defined, Explained, Applied, 2e (Levens)

Chapter 2   The Market in Marketing

 

1) Which of the following terms is used to describe the set of forces that influence the ability of a business to create value and attract and serve customers?

1. A) the marketing environment
2. B) the cultural environment
3. C) Porter’s Five Forces
4. D) the target market
5. E) the marketing mix

Answer:  A

Diff: 1             Page Ref: 15

Skill:  Concept

Objective:  2-1

 

2) The ________ of a business is made up of all the activities that occur within the organizational functions of the business.

1. A) marketing environment
2. B) internal environment
3. C) microenvironment
4. D) macroenvironment
5. E) external environment

Answer:  B

Diff: 1             Page Ref: 15

Skill:  Concept

Objective:  2-1

 

3) Employees are part of a company’s ________.

1. A) external environment
2. B) internal environment
3. C) political environment
4. D) macroenvironment
5. E) competitive environment

Answer:  B

Diff: 2             Page Ref: 15

Skill:  Concept

Objective:  2-1

 

 

4) The implementation of marketing practices directed outside the business to create value and to form productive customer relationships is called ________.

1. A) internal marketing
2. B) external marketing
3. C) relationship marketing
4. D) social marketing
5. E) business marketing

Answer:  B

Diff: 2             Page Ref: 15

AACSB:  Communication abilities

Skill:  Concept

Objective:  2-1

5) Most businesses focus the majority of their marketing efforts toward managing the ________.

1. A) legal environment
2. B) internal environment
3. C) microenvironment
4. D) macroenvironment
5. E) economic environment

Answer:  C

Diff: 2             Page Ref: 15

Skill:  Concept

Objective:  2-1

 

6) A firm’s internal environment does NOT include ________.

1. A) its employees
2. B) its internal stakeholders
3. C) its financial capital
4. D) its brands
5. E) elements of the legal environment

Answer:  E

Diff: 2             Page Ref: 16

Skill:  Concept

Objective:  2-1

 

7) Which of the following are NOT part of a company’s external environment?

1. A) suppliers
2. B) customers
3. C) employees
4. D) media outlets
5. E) government regulations

Answer:  C

Diff: 2             Page Ref: 16

Skill:  Concept

Objective:  2-1

 

 

8) You are directed to study the actors close to the company, yet outside its internal environment, that affect its ability to serve its customers. What are you studying?

1. A) the macroenvironment
2. B) the microenvironment
3. C) the political environment
4. D) the social and cultural environment
5. E) the global environment

Answer:  B

Diff: 1             Page Ref: 15

Skill:  Concept

Objective:  2-1

9) Which of the following are NOT part of a company’s microenvironment?

1. A) suppliers
2. B) competitors
3. C) governments
4. D) customers
5. E) distributors

Answer:  C

Diff: 2             Page Ref: 15

Skill:  Concept

Objective:  2-1

 

10) Porter’s Five Forces of Competitive Position Model is used to determine where power exists in a company’s ________.

1. A) internal environment
2. B) business market
3. C) consumer market
4. D) microenvironment
5. E) macroenvironment

Answer:  D

Diff: 2             Page Ref: 15

Skill:  Concept

Objective:  2-1

 

11) Which of the following is NOT one of the forces in Porter’s Five Forces of Competitive Position Model?

1. A) bargaining power of suppliers
2. B) threat of substitute products
3. C) bargaining power of customers
4. D) threat of relevant regulations
5. E) threat of new entrants

Answer:  D

Diff: 2             Page Ref: 15

Skill:  Concept

Objective:  2-1

 

12) A company would most likely use the Porter analysis for which of the following?

1. A) to determine whether or not to expand a brand into a new market segment
2. B) to assess employee understanding of and commitment to company values
3. C) to identify shifting cultural values relevant to the company’s products
4. D) to identify lobbying efforts with the highest likelihood of success
5. E) to influence social movements relevant to the company’s brands

Answer:  A

Diff: 2             Page Ref: 15

Skill:  Concept

Objective:  2-1

13) A supplier with which of the following is likely able to exert the most power over a company?

1. A) low prices
2. B) high prices
3. C) many competitors
4. D) few or no competitors
5. E) many customers

Answer:  D

Diff: 2             Page Ref: 16

Skill:  Concept

Objective:  2-1

 

14) The ________ buyers that are available in a market, the ________ an individual buyer is to a business.

1. A) fewer; less important
2. B) fewer; more important
3. C) more; more important
4. D) more wealthy; less important
5. E) more diverse; more important

Answer:  B

Diff: 3             Page Ref: 16

Skill:  Concept

Objective:  2-1

 

15) You are directed to study the cultural, economic, technological, political, and legal factors that are larger forces affecting your company. What are you studying?

1. A) the macroenvironment
2. B) the microenvironment
3. C) the business market
4. D) the marketing mix
5. E) the global environment

Answer:  A

Diff: 1             Page Ref: 16

Skill:  Concept

Objective:  2-1

 

16) The ________ environment consists of factors that affect consumer purchase ability and buying behavior.

1. A) cultural
2. B) political
3. C) technological
4. D) economic
5. E) legal

Answer:  D

Diff: 1             Page Ref: 17

Skill:  Concept

Objective:  2-1

17) ________ is an increase in the price of a collection of goods that represent the overall economy.

1. A) Income
2. B) Inflation
3. C) Deflation
4. D) Utility
5. E) Surplus

Answer:  B

Diff: 1             Page Ref: 17

Skill:  Concept

Objective:  2-1

 

18) Which of the following is the most likely result when average income levels do not keep pace with inflation?

1. A) Utility decreases.
2. B) Demand increases.
3. C) Demand decreases.
4. D) Demographic shifts occur.
5. E) Unemployment levels go down.

Answer:  C

Diff: 3             Page Ref: 17

Skill:  Concept

Objective:  2-1

 

19) Income levels are average ________ used to approximate national earnings.

1. A) business revenues
2. B) business profits
3. C) consumer savings
4. D) consumer earnings
5. E) employment levels

Answer:  D

Diff: 1             Page Ref: 17

Skill:  Concept

Objective:  2-1

 

20) The unemployment level is determined by the number of unemployed persons divided by the ________.

1. A) total population
2. B) adult population
3. C) aggregate labor force
4. D) total number of employees in the private sector
5. E) total number of employees in the public sector

Answer:  C

Diff: 2             Page Ref: 17

Skill:  Concept

Objective:  2-1

21) Your marketing department is currently researching the age, race, and household structures of your target market. Which environment is being researched?

1. A) social and cultural
2. B) competitive
3. C) economic
4. D) legal
5. E) political

Answer:  A

Diff: 2             Page Ref: 17

AACSB:  Multicultural and diversity understanding

Skill:  Concept

Objective:  2-1

 

22) ________ are characteristics of human population that are used to identify markets.

1. A) Needs
2. B) Demographics
3. C) Social movements
4. D) Demands
5. E) The Four Ps

Answer:  B

Diff: 1             Page Ref: 17

Skill:  Concept

Objective:  2-1

 

23) As consumers age, which of the following generally happens?

1. A) consumption halts
2. B) life stages stabilize
3. C) income level increases
4. D) demand decreases
5. E) market diversity increases

Answer:  C

Diff: 2             Page Ref: 17

AACSB:  Multicultural and diversity understanding

Skill:  Concept

Objective:  2-1

24) The ________ environment includes factors that relate to the nature, quantity, and potential actions of a company’s competitors.

1. A) cultural
2. B) economic
3. C) legal
4. D) political
5. E) competitive

Answer:  E

Diff: 2             Page Ref: 17

Skill:  Concept

Objective:  2-1

25) Business legislation has been created for three basic reasons: to protect companies from each other, to protect consumers, and to ________.

1. A) protect the interests of society
2. B) regulate prices
3. C) increase world trade
4. D) regulate monopolies
5. E) promote social responsibility

Answer:  A

Diff: 3             Page Ref: 18

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  2-1

 

26) Marketers should be aware of laws and government regulations that influence or limit various organizations and individuals in a given society. This is most accurately described as the ________ environment.

1. A) legal
2. B) cultural
3. C) competitive
4. D) technological
5. E) economic

Answer:  A

Diff: 1             Page Ref: 18

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  2-1

 

 

27) The U.S. Consumer Product Safety Commission and the Food and Drug Administration are most accurately characterized as part of the ________ environment.

1. A) economic
2. B) cultural
3. C) legal
4. D) technological
5. E) political

Answer:  C

Diff: 2             Page Ref: 18

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  2-1

28) Under which system of government is everything controlled by the government?

1. A) democracy
2. B) federal system
3. C) republic
4. D) dictatorship
5. E) social movement

Answer:  D

Diff: 2             Page Ref: 18

AACSB:  Dynamics of the global economy

Skill:  Concept

Objective:  2-1

 

29) By definition, the ________ environment focuses on scientific activities and innovations.

1. A) cultural
2. B) political
3. C) technological
4. D) competitive
5. E) legal

Answer:  C

Diff: 1             Page Ref: 18

AACSB:  Use of information technology

Skill:  Concept

Objective:  2-1

 

 

30) The consumer market is made up of which of the following?

1. A) individuals who are actual or potential buyers of goods or services for personal consumption
2. B) households that are actual or potential buyers of goods or services for personal consumption
3. C) businesses that are actual or potential buyers of goods and services for use in the production of other products or services
4. D) A and B
5. E) all of the above

Answer:  D

Diff: 1             Page Ref: 19

Skill:  Concept

Objective:  2-2

 

31) Percy Original caters to a market of individuals and households that are the end users of the company’s products and services. Percy Original caters to a ________ market.

1. A) business
2. B) reseller
3. C) government
4. D) consumer
5. E) private

Answer:  D

Diff: 2             Page Ref: 19

Skill:  Concept

Objective:  2-2

32) By definition, a consumer product is intended to do which of the following?

1. A) fulfill a consumer desire
2. B) fulfill a business need
3. C) promote a brand
4. D) create a consumer’s surplus
5. E) match a customer’s perceived utility

Answer:  A

Diff: 1             Page Ref: 19

Skill:  Concept

Objective:  2-2

 

33) Which of the following best explains how consumers make purchase decisions in consumer markets?

1. A) by analyzing proposals
2. B) by qualifying potential sources
3. C) by assessing the utility of the offered product or service
4. D) by building relationships with suppliers
5. E) by searching for a consumer’s surplus

Answer:  C

Diff: 3             Page Ref: 19

Skill:  Concept

Objective:  2-2

 

34) By definition, a consumer’s surplus occurs when ________.

1. A) there are more buyers for a product than units of the product available for sale
2. B) there are more units of a product available for sale than buyers of the product
3. C) consumers purchase a product at a price greater than the utility of the product
4. D) consumers purchase a product at a price less than the utility of the product
5. E) consumers assign a lower utility to a product than marketers had expected

Answer:  D

Diff: 2             Page Ref: 19

Skill:  Concept

Objective:  2-1

 

35) A consumer’s surplus represents an advantage for ________.

1. A) producers
2. B) suppliers
3. C) consumers
4. D) marketers
5. E) business markets

Answer:  C

Diff: 2             Page Ref: 19

Skill:  Concept

Objective:  2-1

36) Every consumer brand strives to be both ________ and ________.

1. A) widely available; low-cost
2. B) relevant; unique
3. C) unique; widely available
4. D) relevant; low-cost
5. E) low-utility; unique

Answer:  B

Diff: 3             Page Ref: 19

Skill:  Concept

Objective:  2-1

 

37) Members of which type of market buy goods and services that are used in, or in support of, the production of other products or services?

1. A) business
2. B) international
3. C) wholesale
4. D) consumer
5. E) retail

Answer:  A

Diff: 1             Page Ref: 20

Skill:  Concept

Objective:  2-3

 

 

38) ________ involves the sale of products and services from one business to another.

1. A) Distributive marketing
2. B) Consumer marketing
3. C) Customer marketing
4. D) Business-to-business
5. E) Demand marketing

Answer:  D

Diff: 1             Page Ref: 20

Skill:  Concept

Objective:  2-3

 

39) In marketing terms, B2B stands for ________.

1. A) buyer-to-buyer
2. B) buyer-to-business
3. C) business-to-buyer
4. D) business-to-business
5. E) bank-to-business

Answer:  D

Diff: 1             Page Ref: 20

Skill:  Concept

Objective:  2-3

40) Which of the following is true about business marketers in comparison to consumer marketers?

1. A) They deal with far fewer but far larger buyers.
2. B) They deal with far more but far smaller buyers.
3. C) They deal with a less structured buying process.
4. D) They involve fewer individuals in the buying process.
5. E) They deal with the same decision buying process.

Answer:  A

Diff: 2             Page Ref: 20

Skill:  Concept

Objective:  2-3

 

41) ________ for a product or service results from the demand for another product or service.

1. A) Cause-and-effect demand
2. B) Derived demand
3. C) Fixed demand
4. D) Fluctuating demand
5. E) Elastic demand

Answer:  B

Diff: 1             Page Ref: 20

Skill:  Concept

Objective:  2-3

 

 

42) A business buyer who is considering a change in product specifications, terms, and possibly suppliers is most likely in a ________ situation.

1. A) modified rebuy
2. B) new task
3. C) straight rebuy
4. D) solution selling
5. E) value analysis

Answer:  A

Diff: 2             Page Ref: 20

Skill:  Concept

Objective:  2-3

 

43) Large business purchasers usually call for detailed product specifications, written purchase orders, careful supplier searches, and formal approval. These are all examples of how the business buying process is more ________ than the consumer buying process.

1. A) formalized
2. B) creative
3. C) opinion-based
4. D) independent
5. E) concentrated

Answer:  A

Diff: 2             Page Ref: 20

Skill:  Concept

Objective:  2-3

44) The group of people in an organization who participate in the procurement process is referred to as the ________.

1. A) buyer institution
2. B) buyclass
3. C) buying center
4. D) purchasing hierarchy
5. E) purchasing office

Answer:  C

Diff: 1             Page Ref: 20

Skill:  Concept

Objective:  2-3

 

45) The first step of the business buying process is ________.

1. A) general need description
2. B) evaluations of proposals
3. C) problem or need recognition
4. D) selection of an order routine
5. E) performance feedback

Answer:  C

Diff: 2             Page Ref: 21

Skill:  Concept

Objective:  2-3

46) Empire Products has begun a process to find the best suppliers. Empire Products is actively engaged in which step of the buyer purchase process?

1. A) recognition of the problem or need
2. B) selection of an order routine
3. C) search for and qualification of potential sources
4. D) evaluation of proposals
5. E) performance feedback and evaluation

Answer:  C

Diff: 2             Page Ref: 21

Skill:  Concept

Objective:  2-3

 

47) In the generally accepted stages of the business buying process, the step following the description of the characteristics of the item and the quantity needed is the ________.

1. A) acquisitions of proposals
2. B) search for and qualification of potential sources
3. C) recognition of the organization’s problem or need
4. D) determination of the characteristics of the needed item
5. E) selection of an order routine

Answer:  B

Diff: 3             Page Ref: 21

Skill:  Concept

Objective:  2-3

48) In the generally accepted stages of the business buying process, the step following the recognition of the organizational problem or need is the ________.

1. A) acquisition and analysis of proposals
2. B) search for and qualification of potential sources
3. C) description of the characteristics of the item and quantity needed
4. D) determination of the characteristics of the item and quantity needed
5. E) performance feedback and evaluation

Answer:  D

Diff: 3             Page Ref: 21

Skill:  Concept

Objective:  2-3

 

49) When deciding how to fulfill a purchasing need, a business would most likely find making the product on on its own to be the best option when ________.

1. A) the business does not have the capacity to produce the product
2. B) the product is expected to have rapid technological change
3. C) the business wants to retain a competitive uniqueness
4. D) the product is expected to need frequent servicing
5. E) the product is expected to undergo rapid changes

Answer:  C

Diff: 2             Page Ref: 21

Skill:  Concept

Objective:  2-3

50) When deciding how to fulfill a purchasing need, a business would most likely find leasing the product to be the best option when ________.

1. A) the business has the capacity to produce the product
2. B) the product is expected to have rapid technological change
3. C) the business wants to retain a competitive uniqueness
4. D) the product is expected to need little servicing
5. E) the product is expected to undergo few changes

Answer:  B

Diff: 2             Page Ref: 21

AACSB:  Use of information technology

Skill:  Concept

Objective:  2-3

 

51) In recent years, security regulations initiated by the federal government through the Transportation Safety Administration affected Southwest Airlines. These regulations are part of the ________ affecting this airline.

1. A) external environment
2. B) internal environment
3. C) competitive environment
4. D) brand strategies
5. E) microenvironment

Answer:  A

Diff: 2             Page Ref: 15

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  2-1

52) Which of the following is NOT an example of external marketing?

1. A) using information from checkout scanner data to make marketing decisions
2. B) holding company values training sessions for employees
3. C) lobbying local and state governments for beneficial regulations
4. D) purchasing advertising in multiple media forms
5. E) distributing press releases about brands and company practices to media outlets

Answer:  B

Diff: 2             Page Ref: 15

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  2-1

 

 

53) Which of the following is a consumer product?

1. A) salt and gravel used by cities to spread on icy roads
2. B) a bulk package of tissues to be separated and resold at a convenience store
3. C) a bag of potato chips to be eaten by an individual
4. D) a carton of tomatoes to be used at a restaurant
5. E) a set of cleaning supplies used at an office

Answer:  C

Diff: 2             Page Ref: 19

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  2-2

 

54) Which of the following is the best example of a consumer market that is saturated with brands?

1. A) the gluten-free baked goods market
2. B) the hybrid automobile market
3. C) the luxury RV market
4. D) the hearing aid market
5. E) the laundry detergent market

Answer:  E

Diff: 2             Page Ref: 19

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  2-2

 

55) Which of the following is NOT part of the business market?

1. A) Scott Sign Systems sells interior signs to an Alabama resort.
2. B) A municipal government buys chemicals for its city swimming pools.
3. C) Sue buys a gift for her mother.
4. D) A Canadian software company buys tickets to send a group of salespeople to make a presentation to a heavy equipment manufacturer in Japan.
5. E) Airmark sells a vinyl printing press to a manufacturer of plastic bags.

Answer:  C

Diff: 2             Page Ref: 20

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  2-3

 

56) Which of the following is an example of a B2B transaction?

1. A) Maurice buys a new razor on his way home from work.
2. B) The amateur gardener buys a new wheelbarrow.
3. C) The retailer buys athletic shoes to sell in his store.
4. D) The professional chef bakes a birthday cake for her son.
5. E) Robyn’s mother hires a math tutor to help Robyn pass algebra.

Answer:  C

Diff: 2             Page Ref: 20

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  2-3

 

57) Innovations is a producer of electronic circuits that power a variety of technological devices produced by other companies. Innovations sells its products to ________ markets.

1. A) business
2. B) government
3. C) consumer
4. D) internal
5. E) financial

Answer:  A

Diff: 2             Page Ref: 20

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  2-3

 

58) You regularly purchase cleaning supplies for your custodial staff, using the same vendor and ordering relatively consistent amounts of the same products with each purchase. This is an example of a ________ situation.

1. A) modified rebuy
2. B) new task
3. C) straight rebuy
4. D) solution selling
5. E) value analysis

Answer:  C

Diff: 2             Page Ref: 20

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  2-3

 

59) Worthington Farm raises chickens. For years, it has used wooden coops for hauling its poultry to market. The owner of the farm needs to buy some replacement coops and is considering buying plastic coops that are slightly more expensive than wooden ones but much easier to clean after use. This purchase of coops is an example of a ________.

1. A) modified rebuy
2. B) new task
3. C) straight rebuy
4. D) solution selling situation
5. E) value analysis

Answer:  A

Diff: 2             Page Ref: 20

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  2-3

 

60) The EPA has mandated that, in order to reduce local pollution, your printing plant switch from oil-based to water-based inks. This will require entirely new printing presses and a new printing plate technology. After carefully searching through numerous manufacturers’ equipment descriptions and gathering opinions from all relevant parties related to the work, the printing plant’s buying center will be ready to make this ________ purchase.

1. A) modified rebuy
2. B) new task
3. C) straight rebuy
4. D) straight task
5. E) situational analysis

Answer:  B

Diff: 2             Page Ref: 20

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  2-3

 

61) A trucking company is considering purchasing new trucks that are powered by ethanol instead of diesel fuel. In terms of the buying center, the truck drivers who must make sure that the trucks’ fuel tanks do not run out of fuel are the ________.

1. A) initiators
2. B) deciders
3. C) buyers
4. D) users
5. E) gatekeepers

Answer:  D

Diff: 2             Page Ref: 21

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  2-3

 

62) Don Brady is responsible for obtaining price quotations from various vendors. After reviewing the vendors’ proposals, Don then determines whether or not to send each vendor a contract. Don apparently plays two roles in the buying center, that of ________ and ________.

1. A) user; buyer
2. B) buyer; gatekeeper
3. C) initiator; user
4. D) decider; buyer
5. E) gatekeeper; influencer

Answer:  D

Diff: 3             Page Ref: 20-21

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  2-3

 

63) Business marketers often alert customers to potential problems and then show how their products provide solutions. These marketers are hoping to influence which stage of the business purchase process?

1. A) description of the characteristics of the needed item
2. B) evaluation of proposals
3. C) recognition of a problem or need
4. D) selection of an order routine
5. E) performance feedback

Answer:  C

Diff: 2             Page Ref: 21

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  2-3

 

 

Refer to the scenario below to answer the following questions.

 

Casey Brickly opened The Landing on the north shore of Witmer Lake in 1962. With a sandwich counter on one side and a bait shop and grocery on the other, The Landing was an immediate hit with weekend lake visitors and local residents alike. In the summer, boaters parked at the piers and bought all their lake needsrods and reels, bait, fishing licenses, snacks, soft drinksat The Landing. Even during the winter months, snowmobilers and ice fishermen were lured to The Landing for a snack and hot coffee or hot chocolate.

As time passed, the business changed and grew tremendously. What was formerly a weekend tourist area gradually became a year-round residential area. Many of the houses, which were built as cottages in the 1950s and 1960s, were remodeled into year-round homes. By the end of the 1970s, the days of small motor boats and 10 mile-per-hour speed limits were gone; skiing and speed boats became all the rage. For some time, The Landing continued to attract flocks of patrons.

In the 1980s, however, Casey started to realize that the grocery area in The Landing could not compete with larger local retailers. He eventually enlarged the sandwich counter, transforming the bait shop and grocery into a restaurant with a full menu typical of any diner.

“Getting rid of the bait shop was hard to do,” Casey admitted. “I still had a summer crowd that relied on us for their fishing needs, but we couldn’t survive a whole year on four months of profit.”

By 2005, the atmosphere of Witmer Lake and the neighboring lakes had become upscale. “I could see that people were spending more on their speed boats than what they had originally paid for their cottages!” Casey exclaimed. Many of the cottages were being inherited by children and grandchildren of the original owners. Once again, the scene started to change as many of the lake houses were used only as weekend lake homes. Unlike the previous generation, a vast number of the current owners could afford to live closer to their jobs while maintaining lake homes. “At this point, business wasn’t growing,” Casey said.

As local competition continued to increase, Casey converted the diner atmosphere of The Landing into a bar with a lounge area. “The change might have been too drastic,” Casey said, “but it was the only way we could maintain a strong, year-round business in spite of the population shifts and competitive forces.”

 

64) Which microenvironment factors have affected The Landing the most?

1. A) competitors
2. B) suppliers
3. C) government agencies
4. D) natural environment
5. E) economic environment

Answer:  A

Diff: 2             Page Ref: 15

AACSB:  Analytic skills

Skill:  Application

Objective:  2-1

 

 

65) Which of the following macroenvironmental forces has had the greatest effect on The Landing?

1. A) the social and cultural environment
2. B) the technological environment
3. C) the sustainable environment
4. D) the political environment
5. E) the social responsibility environment

Answer:  A

Diff: 2             Page Ref: 16

AACSB:  Analytic skills

Skill:  Application

Objective:  2-1

 

66) Marketing practices implemented within a company are considered internal marketing.

Answer:  TRUE

Diff: 1             Page Ref: 15

Skill:  Concept

Objective:  2-1

 

67) The microenvironment and the macroenvironment are both part of a company’s external environment.

Answer:  TRUE

Diff: 2             Page Ref: 15

Skill:  Concept

Objective:  2-1

 

68) In general, companies are placing less emphasis on internal marketing than they have in the past.

Answer:  FALSE

Diff: 2             Page Ref: 15

AACSB:  Communication abilities

Skill:  Concept

Objective:  2-1

69) The microenvironment consists of larger societal forces that affect a company, such as economic, political, and cultural forces.

Answer:  FALSE

Diff: 1             Page Ref: 15

Skill:  Concept

Objective:  2-1

 

70) The threat of substitutes can reduce the power of a business.

Answer:  TRUE

Diff: 2             Page Ref: 15

Skill:  Concept

Objective:  2-1

 

71) Any change in the status of a competitor will affect the power a business is able to exert in its market and industry.

Answer:  TRUE

Diff: 2             Page Ref: 15

Skill:  Concept

Objective:  2-1

 

72) The macroenvironment consists of the factors close to but not within the company that affect its ability to serve its customers.

Answer:  FALSE

Diff: 1             Page Ref: 16

Skill:  Concept

Objective:  2-1

 

73) An increase in the unemployment level generally increases the ability of individuals to purchase products and services.

Answer:  FALSE

Diff: 2             Page Ref: 17

Skill:  Concept

Objective:  2-1

 

74) Marketers must increasingly consider the needs of traditional married households because this segment of the population is growing more rapidly than single-family households.

Answer:  FALSE

Diff: 2             Page Ref: 17

AACSB:  Multicultural and diversity understanding

Skill:  Concept

Objective:  2-1

 

75) Consumer organizations such as environmental and minority groups that may question a company’s marketing decisions are part of the political environment.

Answer:  TRUE

Diff: 2             Page Ref: 18

Skill:  Concept

Objective:  2-1

76) More than one-third of the American consumer buying power comes from California, Texas, New York, and Florida.

Answer:  TRUE

Diff: 2             Page Ref: 19

Skill:  Concept

Objective:  2-2

 

 

77) Consumer markets are, by definition, very large.

Answer:  FALSE

Diff: 2             Page Ref: 19

Skill:  Concept

Objective:  2-2

 

78) A consumer product may be intended for individual or business use.

Answer:  FALSE

Diff: 2             Page Ref: 19

Skill:  Concept

Objective:  2-2

 

79) Marketing can influence consumers’ perceptions of a product’s utility.

Answer:  TRUE

Diff: 2             Page Ref: 19

AACSB:  Communication abilities

Skill:  Concept

Objective:  2-2

 

80) A business marketer normally deals with far fewer buyers than a consumer marketer does.

Answer:  TRUE

Diff: 2             Page Ref: 20

Skill:  Concept

Objective:  2-3

 

81) As a part of the human resources department of her company, Jenna makes sure that employees are made aware of and understand changes to the company’s policies. Jenna is engaged in a type of marketing.

Answer:  TRUE

Diff: 3             Page Ref: 15

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  2-1

 

82) A company markets wild and crazy games for teens to play at parties. This is an example of a business market.

Answer:  FALSE

Diff: 2             Page Ref: 19

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  2-2

 

83) Of the different types of buying situations, the modified rebuy presents the fewest decisions for a business buyer to make.

Answer:  FALSE

Diff: 2             Page Ref: 20

AACSB:  Analytic skills

Skill:  Application

Objective:  2-3

 

84) Give two examples of how companies can gather information to respond to changes in the microenvironment.

Answer:  Answers will vary. A company can use data from checkout scanners and purchase transaction databases to track customer preferences and buying behavior.

Diff: 2             Page Ref: 15

AACSB:  Analytic skills

Skill:  Application

Objective:  2-1

 

85) How might a company try to influence its macroenvironment?

Answer:  Answers will vary. Though businesses do not typically directly influence the macroenvironment, many companies lobby state governments and the federal government in an attempt to influence the legal environment.

Diff: 3             Page Ref: 15

AACSB:  Analytic skills

Skill:  Application

Objective:  2-1

 

86) Explain the relationship between the number and size of buyers for a product or service and the level of power those buyers can exert on a company.

Answer:  When more, smaller buyers are available, each buyer exerts less power over the company; when only a few, larger buyers make up the market, each buyer exerts much more power over the company.

Diff: 2             Page Ref: 16

AACSB:  Analytic skills

Skill:  Application

Objective:  2-1

 

87) Angela’s company is trying to determine whether to enter a new market segment. How might her company use Porter’s Model to make a decision?

Answer:  Angela’s company could use Porter’s Model to assess the threat of other entrants into the market segment, the bargaining power of suppliers and customers, the threat of substitute products, and the competitive rivalry already existing within the market.

Diff: 3             Page Ref: 16

AACSB:  Analytic skills

Skill:  Application

Objective:  2-1

 

88) Explain how marketers have responded to growing diversity in the United States.

Answer:  Marketers have varied their advertising methods, as well as their products and services, to reach the increasingly diverse markets in the United States.

Diff: 2             Page Ref: 17

AACSB:  Multicultural and diversity understanding

Skill:  Application

Objective:  2-1

 

89) Explain why a consumer may decide not to purchase a product or service she wants even though it offers a significant consumer’s surplus.

Answer:  A significant difference between the product’s purchase price and its perceived utility may cause a consumer to believe that something must be wrong with the product for it to be offered at such a discount.

Diff: 3             Page Ref: 19

AACSB:  Analytic skills

Skill:  Application

Objective:  2-2

 

90) Explain why national marketers might pay particular attention to the preferences of consumers in large states such as New York and California.

Answer:  Consumers in the populous states of New York, California, Texas, and Florida represent more than one-third of the buying power of the American consumer market, so national marketers will want to appeal to those consumers’ preferences.

Diff: 3             Page Ref: 19

AACSB:  Analytic skills

Skill:  Application

Objective:  2-2

 

91) Which business buying situation is the marketer’s greatest opportunity? Why?

Answer:  The new task situation presents the greatest opportunity because a first-time purchaser will seek out more information from a marketer and does not have established relationships with other marketers.

Diff: 3             Page Ref: 20

AACSB:  Analytic skills

Skill:  Application

Objective:  2-3

 

92) In which type of buying situation would a supplier most likely focus on maintaining product and service quality? Why?

Answer:  A supplier would focus on maintaining product and service quality in a straight rebuy because no new or modified purchases are required; the supplier’s task is to keep the customer satisfied with the current procurement relationship.

Diff: 3             Page Ref: 20

AACSB:  Analytic skills

Skill:  Application

Objective:  2-3

93) Although a company has purchased printers and copiers before, Xerox now offers the firm a multitasking machine that prints, copies, scans, and faxes. Explain what type of buying situation this is.

Answer:  This is a modified rebuy. The firm has already purchased similar machinery, but this purchase now involves a modified machine.

Diff: 3             Page Ref: 20

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  2-3

 

94) Identify and describe the main components of a company’s marketing environment.

Answer:  A company’s marketing environment is the set of forces that influence the company’s ability to create value and to attract and serve customers. The marketing environment consists of the company’s internal environment and external environment. The internal environment involves all of the activities that take place within the company. The external environment includes the microenvironment and the macroenvironment. The microenvironment involves forces close to yet outside the company, such as customers, competitors, and suppliers. The macroenvironment is made up of greater societal forces, including economic, legal, political, cultural, and technological environments.

Diff: 3             Page Ref: 15

AACSB:  Analytic skills

Skill:  Application

Objective:  2-1

 

95) Briefly describe how the demographic makeup of the United States is changing.

Answer:  Demographics include characteristics such as age, race, and household structure. The United States is becoming much more demographically diverse. Hispanic, Asian American, and African American population segments are growing. Household structure is also more diverse, with more and more people waiting to marry later in life or not at all.

Diff: 2             Page Ref: 17

AACSB:  Multicultural and diversity understanding

Skill:  Application

Objective:  2-1

 

96) Explain how a consumer market is determined and give two examples of consumer markets of different size.

Answer:  A consumer market is composed of the individuals and households who are potential or actual buyers and end users of a product or service. A consumer market is not a fixed entityit exists in relation to the product or service being marketed. An example of a large consumer market is the market for tennis shoes. An example of a small consumer market is the market for SCUBA gear. (Examples will vary.)

Diff: 2             Page Ref: 19

AACSB:  Analytic skills

Skill:  Application

Objective:  2-2

 

97) Briefly explain how brands influence purchase decisions in consumer markets.

Answer:  Marketers use brands to convey a product or service’s value to consumers. Through marketing activities such as advertising and sales promotion, marketers position a brand to be unique and relevant to the brand’s consumer market. The presentation of the brand affects consumers’ perceived utility of the brand, influencing their decision to buy and how much they are willing to pay.

Diff: 2             Page Ref: 19

AACSB:  Analytic skills

Skill:  Application

Objective:  2-2

 

98) Explain how the decision process in the business market and consumer market differs.

Answer:  Business buyers usually face more complex buying decisions than do consumer buyers, as business purchases more often involve large sums of money and interactions among many people. Because the purchases are more complex, business buyers may take longer to make their decisions and are likely to use a more formalized buying process.

Diff: 2             Page Ref: 20

AACSB:  Analytic skills

Skill:  Application

Objective:  2-3

 

99) Compare and contrast the three major types of business buying situations.

Answer:  A straight rebuy is a fairly routine decision in which the buyer reorders without any modifications from existing suppliers. In a modified rebuy, the buyer decides to consider alternative suppliers. A company buying a product or service for the first time faces a new task situation.

Diff: 2             Page Ref: 20

AACSB:  Analytic skills

Skill:  Application

Objective:  2-3

 

100) List the eight steps in the complete buyer purchase process in their correct order.

Answer:  Step 1: recognition of the organizational problem or need. Step 2: determination of the characteristics of the item and quantity needed. Step 3: description of the characteristics of the item and quantity needed. Step 4: search for and qualification of potential sources. Step 5: acquisition and analysis of proposals. Step 6: evaluation of the proposals and selection of suppliers. Step 7: selection of an order routine. Step 8: performance feedback and evaluation.

Diff: 3             Page Ref: 21

AACSB:  Analytic skills

Skill:  Application

Objective:  2-3

 

Chapter 4   A Broader Perspective on Marketing

 

1) By definition, a(n) ________ is a community, nation, or group that shares common traditions, institutions, activities, and interests.

1. A) market
2. B) society
3. C) environment
4. D) marketplace
5. E) corporation

Answer:  B

Diff: 1             Page Ref: 39

Skill:  Concept

Objective:  4-1

 

2) According to the Organization for Economic Cooperation and Development, ________ is the largest single economy in the world.

1. A) China
2. B) India
3. C) the United States
4. D) Japan
5. E) Russia

Answer:  C

Diff: 2             Page Ref: 39

AACSB:  Dynamics of the global economy

Skill:  Concept

Objective:  4-1

 

3) The United States is most accurately characterized as a(n) ________.

1. A) global society
2. B) emerging market
3. C) underdeveloped market
4. D) traditional culture
5. E) consumer society

Answer:  E

Diff: 2             Page Ref: 39

AACSB:  Multicultural and diversity understanding

Skill:  Concept

Objective:  4-1

 

4) Which of the following best explains why the United States government regulates marketers’ anticompetitive behavior?

1. A) to ensure consumer safety
2. B) to ensure public safety
3. C) to promote the welfare of the country’s economic system
4. D) to control the country’s economic system
5. E) to achieve specific social goals

Answer:  C

Diff: 3             Page Ref: 39

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-1

 

5) NGOs are groups of ________ who monitor the behavior of marketers or governments and use their influence to achieve social goals.

1. A) elected officials
2. B) appointed officials
3. C) public officials
4. D) private individuals
5. E) public employees

Answer:  D

Diff: 1             Page Ref: 39

Skill:  Concept

Objective:  4-1

 

6) Which of the following is defined as the shared values, beliefs, and preferences of a particular community, nation, or group?

1. A) culture
2. B) society
3. C) morals
4. D) ethics
5. E) reference set

Answer:  A

Diff: 1             Page Ref: 40

AACSB:  Multicultural and diversity understanding

Skill:  Concept

Objective:  4-1

 

 

7) Which of the following is NOT a defining aspect of American culture?

1. A) Fate determines our destinies.
2. B) Time is money.
3. C) We gain strength through our diversity.
4. D) Change equals progress.
5. E) All people are created equal.

Answer:  A

Diff: 2             Page Ref: 40

AACSB:  Multicultural and diversity understanding

Skill:  Concept

Objective:  4-1

8) The zeitgeist refers to which of the following?

1. A) how a society is currently segmented
2. B) what is currently happening within a culture
3. C) how consumers are reacting to marketing efforts
4. D) how marketing influences culture
5. E) how culture influences marketing

Answer:  B

Diff: 3             Page Ref: 40

Skill:  Concept

Objective:  4-1

 

9) ________ is an organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers.

1. A) Environmentalism
2. B) The social marketing concept
3. C) Green marketing
4. D) Consumerism
5. E) Corporate social responsibility

Answer:  D

Diff: 1             Page Ref: 41

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-1

 

 

10) When a group of consumers refuses to do business with a company in order to show disapproval of the company’s actions and to encourage the company to change, the consumers are participating in a(n) ________.

1. A) regulation
2. B) boycott
3. C) nongovernmental organization
4. D) exaggerated claim
5. E) sustainability effort

Answer:  B

Diff: 1             Page Ref: 41

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-1

 

11) Ralph Nader is most closely associated with which of the following?

1. A) the consumerism movement of the 1960s
2. B) the consumerism movement of the early 1900s
3. C) the current environmentalism movement
4. D) green marketing
5. E) the social marketing concept

Answer:  A

Diff: 3             Page Ref: 41

Skill:  Concept

Objective:  4-1

12) The right to be safe, to be informed, to be heard, and to choose freely are the major components of the ________.

1. A) Truth in Lending Act
2. B) Child Protection Act
3. C) Federal Trade Commission Act
4. D) Robinson-Patman Act
5. E) Consumer Bill of Rights

Answer:  E

Diff: 2             Page Ref: 41

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-1

 

 

13) Of the following presidents, who is most closely associated with the Consumer Bill of Rights?

1. A) Ronald Reagan
2. B) Jimmy Carter
3. C) John F. Kennedy
4. D) George W. Bush
5. E) Bill Clinton

Answer:  C

Diff: 3             Page Ref: 41

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-1

 

14) The Consumer Bill of Rights includes the right to receive a fair settlement of just claims, including compensation for misrepresentation, shoddy goods, or unsatisfactory services. This is known as the right to ________.

1. A) consumer education
2. B) satisfaction of basic needs
3. C) redress
4. D) be heard
5. E) safety

Answer:  C

Diff: 2             Page Ref: 41

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-1

 

15) Which of the following is NOT one of the eight basic consumer rights?

1. A) the right to be protected from unwanted marketing messages
2. B) the right to be informed about important product aspects
3. C) the right to be protected against products that are hazardous to health
4. D) the right to receive a fair settlement of just claims
5. E) the right to live and work in a healthy environment

Answer:  A

Diff: 3             Page Ref: 41

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-1

 

16) Advocacy groups such as Consumers International and the Better Business Bureau can act on behalf of consumers and promote consumers’ rights through ________ but not through ________.

1. A) enforcing regulations; influencing the media
2. B) influencing the media; political lobbying
3. C) organizing boycotts; influencing the media
4. D) political lobbying; enforcing regulations
5. E) political lobbying; organizing boycotts

Answer:  D

Diff: 3             Page Ref: 41-42

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-1

 

17) ________ is an organized movement of citizens, businesses, and government agencies to protect and improve the living environment.

1. A) Consumerism
2. B) Environmentalism
3. C) Corporate social responsibility
4. D) Social marketing
5. E) Green marketing

Answer:  B

Diff: 1             Page Ref: 42

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-1

 

18) Environmental sustainability involves both ________ and ________.

1. A) promoting the long-term well-being of the earth; achieving a company’s financial objectives
2. B) promoting the long-term well-being of the earth; improving the rights of consumers
3. C) improving the rights of consumers; adopting a policy of corporate social responsibility
4. D) achieving a company’s financial objectives; adopting a policy of corporate social responsibility
5. E) achieving a company’s financial objectives; improving the rights of consumers

Answer:  A

Diff: 2             Page Ref: 42

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-1

 

19) Marketers have responded to the ________ movement with green marketing.

1. A) consumerism
2. B) nongovernmental organization (NGO)
3. C) globalization
4. D) environmental
5. E) marketing ethics

Answer:  D

Diff: 2             Page Ref: 42

Skill:  Concept

Objective:  4-1

 

20) LOHAS stands for ________.

1. A) licensing of health advertising slogans
2. B) licensing of hierarchical agenda systems
3. C) lifestyles of helping and sustaining
4. D) lifestyles of happiness and society
5. E) lifestyles of health and sustainability

Answer:  E

Diff: 2             Page Ref: 43

Skill:  Concept

Objective:  4-1

 

21) Of the five core customer segments in the market for environmentally and socially responsible products, members of which group are MOST likely to be active in environmental causes?

1. A) LOHAS
2. B) Naturalites
3. C) Drifters
4. D) Conventionals
5. E) Unconcerned

Answer:  A

Diff: 2             Page Ref: 43

Skill:  Concept

Objective:  4-1

 

 

22) Of the five core customer segments in the market for environmentally and socially responsible products, members of which group are LEAST likely to demonstrate environmentally responsible behaviors?

1. A) LOHAS
2. B) Naturalites
3. C) Drifters
4. D) Conventionals
5. E) Unconcerned

Answer:  E

Diff: 2             Page Ref: 43

Skill:  Concept

Objective:  4-1

23) Members of which two of the five core groups in the American market for environmentally and socially responsible products would be MOST likely to pay a price premium for products that are certified organic?

1. A) LOHAS and Conventionals
2. B) LOHAS and Naturalites
3. C) Drifters and Conventionals
4. D) Conventionals and Naturalites
5. E) Naturalites and Drifters

Answer:  B

Diff: 2             Page Ref: 43

Skill:  Concept

Objective:  4-1

 

24) Organic foods are those that are grown ________.

1. A) without the use of technology
2. B) locally
3. C) without the use of pesticides and synthetic fertilizers
4. D) using sustainable measures such as crop rotation
5. E) by independent farmers rather than corporations

Answer:  C

Diff: 1             Page Ref: 43

Skill:  Concept

Objective:  4-1

 

 

25) A(n) ________ is a rule of conduct or action prescribed by an authority, or a binding custom or practice of a community.

1. A) ethic
2. B) license
3. C) law
4. D) contract
5. E) venture

Answer:  C

Diff: 1             Page Ref: 44

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-2

 

26) ________ are rules or orders carrying the force of law that are issued by an official government agency.

1. A) Ethics
2. B) Regulations
3. C) Customs
4. D) Tariffs
5. E) Boycotts

Answer:  B

Diff: 1             Page Ref: 44

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-2

27) Which of the following American government agencies is responsible for enforcing laws against deceptive advertising?

1. A) the Environmental Protection Agency (EPA)
2. B) the Federal Trade Commission (FTC)
3. C) the Food and Drug Administration (FDA)
4. D) the Consumer Product Safety Commission
5. E) the Interstate Commerce Commission

Answer:  B

Diff: 2             Page Ref: 44

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-2

 

 

28) The ________, a United States regulatory agency, protects the public from potentially hazardous products.

1. A) Consumer Product Safety Commission
2. B) Environmental Protection Agency
3. C) Federal Communications Commission
4. D) Federal Trade Commission
5. E) Food and Drug Administration

Answer:  A

Diff: 1             Page Ref: 44

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-2

 

29) The ________, a United States regulatory agency, develops and enforces regulation concerning the materials and processes that manufacturers may use.

1. A) Interstate Commerce Commission
2. B) Environmental Protection Agency
3. C) Federal Communications Commission
4. D) Federal Trade Commission
5. E) Food and Drug Administration

Answer:  B

Diff: 2             Page Ref: 44

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-2

 

30) The ________, a United States regulatory agency, regulates the use of broadcast media.

1. A) Consumer Product Safety Commission
2. B) Environmental Protection Agency
3. C) Federal Communications Commission
4. D) Federal Trade Commission
5. E) Food and Drug Administration

Answer:  C

Diff: 1             Page Ref: 44

AACSB:  Communication abilities

Skill:  Concept

Objective:  4-2

 

31) The ________, a United States regulatory agency, enforces laws and regulations concerning foods, drugs, cosmetics and veterinary products. Marketers of pharmaceuticals must get approval from this agency before introducing products to the market.

1. A) Food and Drug Administration
2. B) Environmental Protection Agency
3. C) Federal Communications Commission
4. D) Federal Trade Commission
5. E) Interstate Commerce Commission

Answer:  A

Diff: 2             Page Ref: 44

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-2

 

32) Regulations and policies enforced by which of the following federal organizations are most likely to have an impact on the efficiency of marketing distribution channels?

1. A) Food and Drug Administration
2. B) Environmental Protection Agency
3. C) Federal Communications Commission
4. D) Federal Trade Commission
5. E) Interstate Commerce Commission

Answer:  E

Diff: 2             Page Ref: 44

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-2

 

33) From the consumer’s perspective, which of the following marketing areas is the least visibly regulated by the federal government?

1. A) advertising
2. B) pricing
3. C) promotion
4. D) product safety
5. E) distribution

Answer:  E

Diff: 3             Page Ref: 44

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-2

 

34) Which of the following is part of a bait-and-switch tactic?

1. A) A company advertises a product that it does not plan to sell.
2. B) An advertisement makes claims of product superiority that cannot be easily proven or disproven.
3. C) A marketer makes an exaggerated claim about the effectiveness of the company’s product.
4. D) An advertisement falsely inflates the retail value of a product.
5. E) A company creates new ads to correct misinformation previously delivered through its marketing campaign.

Answer:  A

Diff: 2             Page Ref: 44

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-2

 

35) Which of the following is an illegal marketing tactic?

1. A) puffery
2. B) bait-and-switch
3. C) testimonial
4. D) viral marketing
5. E) product placement

Answer:  B

Diff: 2             Page Ref: 44

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-2

 

36) The Federal Trade Commission examines advertising from the point of view of a ________.

1. A) vulnerable consumer
2. B) reasonable consumer
3. C) marketer
4. D) competitor
5. E) disadvantaged consumer

Answer:  B

Diff: 2             Page Ref: 44

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-2

 

 

37) Puffery is a term for a(n)________.

1. A) straightforward promotional message
2. B) claim of superiority that cannot be proven true or false
3. C) emotional appeal to consumers
4. D) subliminal appeal to consumers
5. E) exaggerated claim that can be disproven

Answer:  B

Diff: 1             Page Ref: 45

AACSB:  Communication abilities

Skill:  Concept

Objective:  4-2

38) In advertising, ________ is a legal tactic, while ________ is not legal.

1. A) puffery; an exaggerated claim
2. B) an exaggerated claim; puffery
3. C) bait-and-switch; puffery
4. D) an exaggerated claim; bait-and-switch
5. E) corporate social responsibility; social marketing

Answer:  A

Diff: 2             Page Ref: 45

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-2

 

39) Which of the following laws is most relevant to the marketing mix category of price?

1. A) the National Do Not Call Registry
2. B) the Consumer Products Safety Commission Act
3. C) the Nutrition Labeling and Education Act
4. D) the Sherman Antitrust Act
5. E) the Consumer Credit Protection Act

Answer:  D

Diff: 3             Page Ref: 45

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-2

 

40) Which of the following laws is most relevant to the marketing mix category of promotion?

1. A) the National Do Not Call Registry
2. B) the Consumer Products Safety Commission Act
3. C) the Robinson-Patman Act
4. D) the Sherman Antitrust Act
5. E) the Child Protection Act

Answer:  A

Diff: 3             Page Ref: 45

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-2

41) The Consumer Credit Protection Act is primarily concerned with which area of marketing?

1. A) promotion
2. B) product
3. C) distribution
4. D) price
5. E) competition

Answer:  A

Diff: 3             Page Ref: 45

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-2

42) CSR stands for ________.

1. A) consumer social responsibility
2. B) consumer and society regulations
3. C) company sustainability regulations
4. D) corporate sustainability rates
5. E) corporate social responsibility

Answer:  E

Diff: 1             Page Ref: 46

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-3

 

43) Which of the following has been the traditional way to measure the success or failure of a business?

1. A) environmental sustainability
2. B) adherence to marketing ethics
3. C) benefits provided to society
4. D) profitability
5. E) level of global marketing

Answer:  D

Diff: 2             Page Ref: 46

Skill:  Concept

Objective:  4-3

 

 

44) ________ refers to practices that combine economic growth with careful stewardship of a society’s natural resources and the environment.

1. A) Boycotting
2. B) Puffery
3. C) Franchising
4. D) Ethical marketing
5. E) Sustainability

Answer:  E

Diff: 1             Page Ref: 46

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-3

 

45) A central assertion of ________ is that marketing techniques can be used to promote causes and improve the lives of individuals and society.

1. A) sustainability
2. B) the social marketing concept
3. C) marketing ethics
4. D) consumerism
5. E) environmentalism

Answer:  B

Diff: 1             Page Ref: 46

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-3

46) Which of the following is LEAST closely associated with corporate social responsibility?

1. A) sustainability
2. B) the triple bottom line
3. C) marketing ethics
4. D) globalization
5. E) social responsibility

Answer:  D

Diff: 2             Page Ref: 46

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-3

 

 

47) The American Marketing Association (AMA) has created a code of ethics that includes all of the following ethical values EXCEPT ________.

1. A) honesty
2. B) fairness
3. C) openness
4. D) competitiveness
5. E) responsibility

Answer:  D

Diff: 2             Page Ref: 46

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-3

 

48) Marketing ethics are rules for evaluating marketing decisions and actions based on marketers’ duties and obligations to ________.

1. A) coworkers
2. B) shareholders
3. C) society
4. D) government
5. E) the economy

Answer:  C

Diff: 1             Page Ref: 46

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-3

49) Monica Carey is a conscientious marketing manager. Sometimes it is unclear what decisions to make when she and her staff are faced with moral dilemmas. Monica and other managers could create broad guidelines that everyone in the organization must follow in the form of a(n) ________.

1. A) business mission
2. B) business vision
3. C) social marketing statement
4. D) ethics code
5. E) sustainability statement

Answer:  D

Diff: 2             Page Ref: 46

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-3

 

 

50) The “triple bottom line” refers to a company’s ________, ________, and ________.

1. A) global performance; national performance; regional performance
2. B) ethics; society; culture
3. C) economic performance; environmental impacts; social impacts
4. D) economic performance; cultural impacts; social impacts
5. E) economic performance; sustainability; environmental impacts

Answer:  C

Diff: 3             Page Ref: 46

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-3

 

51) All of the following are examples of NGOs EXCEPT which one?

1. A) the Consumers Union
2. B) People for the Ethical Treatment of Animals
3. C) the Consumer Product Safety Commission
4. D) the Better Business Bureau
5. E) Greenpeace

Answer:  C

Diff: 3             Page Ref: 39-41

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-1

52) Advertisements for Dodge automobiles include the slogan “Dodge. Grab life by the horns.” This slogan most strongly appeals to which of the following basic American cultural beliefs?

1. A) You can take control of yourself and your environment.
2. B) Change equals progress.
3. C) Time is money.
4. D) There is strength in diversity.
5. E) People have a responsibility to give back.

Answer:  A

Diff: 2             Page Ref: 40

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-1

 

 

53) Which of the following slogans used by automobile companies most strongly addresses the cultural belief that change equals progress?

1. A) “Everyone dreams of an Audi.”
2. B) “Lincoln. Travel well.”
3. C) “Buick. It’s all good.”
4. D) “This is not your father’s Oldsmobile.”
5. E) “Chrysler. Drive = Love.”

Answer:  D

Diff: 2             Page Ref: 40

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-1

 

54) A group of farmworkers in Florida organized a movement aimed at convincing Taco Bell to increase the amount that it pays for its tomatoes so that the wages of tomato pickers could be increased to a more reasonable minimum. The group of farmworkers gained attention from media outlets and convinced many people around the country, particularly college students and religious groups, to stop buying Taco Bell products. This is an example of a(n) ________.

1. A) environmental movement
2. B) ethics code
3. C) boycott
4. D) green marketing initiative
5. E) regulation

Answer:  C

Diff: 2             Page Ref: 41

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-1

55) Monique is a mother of toddler twins. Since the babies were born, Monique has taken great care in selecting their products. She chooses organic and locally grown fruits and vegetables over processed baby food. The twins are dressed in natural cotton clothing, most of it made by companies with policies supporting sustainability. Many of the children’s toys are made from recycled materials. Monique would most likely be classified as belonging to the ________ group.

1. A) LOHAS
2. B) green marketing
3. C) social marketing
4. D) Conventionals
5. E) Drifters

Answer:  A

Diff: 2             Page Ref: 43

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-1

 

 

56) Chandra and Michael are a young married couple. They currently drive an SUV but would consider buying a smaller, more fuel-efficient car now that the prices on those models have come down. They shop at their local organic shop when they are making a special meal, but they more frequently shop at their local supermarket. Chandra and Michael are interested in composting, and even took a workshop on how to start their own compost bin, but getting started just hasn’t been a priority for them. Chandra and Michael would most likely be classified as belonging to the ________ group.

1. A) LOHAS
2. B) green marketing
3. C) social marketing
4. D) Conventionals
5. E) Drifters

Answer:  E

Diff: 2             Page Ref: 43

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-1

 

57) Lovely Locks, a maker of shampoos, is considering entering the cosmetics product. The company has a line of mascara and eyeliner it wants to introduce to the market. However, first Lovely Locks must obtain approval from the ________.

1. A) Environmental Protection Agency
2. B) Interstate Commerce Commission
3. C) Food and Drug Administration
4. D) Federal Trade Commission
5. E) Federal Communications Commission

Answer:  C

Diff: 2             Page Ref: 44

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-2

58) A federal agency ordered KFC to stop running ads with false claims that its fried chicken is compatible with certain weight loss programs. Which agency had the authority to issue this order?

1. A) the Federal Trade Commission
2. B) the Food and Drug Administration
3. C) the Consumer Product Safety Commission
4. D) the Interstate Commerce Commission
5. E) the Federal Communications Commission

Answer:  A

Diff: 3             Page Ref: 45

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-2

 

 

59) Which of the following advertising situations would LEAST likely be considered puffery?

1. A) a mother of small children declaring that a packaged meal “rescued my day”
2. B) a young woman saying that a new abdominal exercise machine was more motivating than her old workout routine
3. C) a milk advertisement claiming that the calcium in milk promotes healthy bone growth
4. D) a retired couple drinking a vitamin and protein shake and then saying, “It makes us feel young again”
5. E) a sleepy man waking up to a gray day, drinking a cup of coffee, and then looking out his window to see golden sunshine, beautiful flowers blooming, songbirds singing, and a rainbow on the horizon

Answer:  C

Diff: 2             Page Ref: 45

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-2

 

60) IBM manager Celia Moore coordinates IBMs long-standing “Reinventing Education” program that involves intensive research into how educational institutions can use the fruits of new technologies to transform what they do. In the process, the program is actually helping to shape a market of significant interest to IBM. “We see the program very much as an investment, rather than handing out money,” says Moore. The existence of this program most strongly suggests that IBM has which of the following?

1. A) an environmental concept
2. B) a financial bottom line
3. C) a marketing code of ethics
4. D) a consumerist orientation
5. E) a policy of corporate social responsibility

Answer:  E

Diff: 2             Page Ref: 46

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-3

 

61) Timberland employees get 40 hours paid leave each year to pursue volunteer projects. The company runs a service day that hosts projects in 25 countries, and it supports a nonprofit that brings young people into public service for a year. CEO Jeffrey Swartz sees such service as a powerful differentiator for Timberland with its current and potential customers. Timberland could be most accurately described as practicing ________.

1. A) consumerism
2. B) environmentalism
3. C) green marketing
4. D) sustainability
5. E) corporate social responsibility

Answer:  E

Diff: 2             Page Ref: 46

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-3

 

62) Which of the following is the best example of a company promoting sustainability?

1. A) a company adopting a code of marketing ethics
2. B) a company contributing a portion of revenues to a specific nonprofit organization
3. C) a company making its products out of recycled materials
4. D) a company making special efforts to hire a multiculturally diverse staff
5. E) a company using the social marketing concept

Answer:  C

Diff: 2             Page Ref: 46

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-3

 

Refer to the passage below to answer the following questions.

 

Bryant and Aniyah Small are the owners of the Good Green Grocer, a small but successful chain of natural food and health stores. Bryant and Aniyah’s business has expanded as more and more consumers are interested in eating organic foods. What started as one shop in Vermont has expanded to 15 stores in college towns throughout Vermont, New Hampshire, Massachusetts, and Maine. Much to their delight, the Smalls have found that many people are willing to pay a bit more for food that is organically grown.

Bryant and Aniyah want the Good Green Grocer to be associated with environmental responsibility, so they offer discounts to customers who bring their own reusable shopping bags and take measures to reduce the company’s carbon footprint. They even hold environmental workshops in their stores, with topics ranging from organic farming and composting to at-home energy conservation.

Sunday ads for the Good Green Grocer run in area newspapers, with special promotional prices offered for a list of the “Top Ten Take Homes” each week. Regular customers of the Good Green Grocer know that the promotional items often run out of stock by mid-week, so the store typically sees its heaviest traffic on Sunday and Monday.

63) Which of the following groups is most likely part of the Good Green Grocer’s target market?

1. A) Conventionals
2. B) Unconcerned
3. C) Naturalites
4. D) Consumerists
5. E) Drifters

Answer:  C

Diff: 2             Page Ref: 43

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-1

 

64) Some customers believe that the Good Green Grocer purposefully runs weekly promotional prices on items that are low in stock, leaving most customers who come to the store hoping for lower prices but unable to buy the out-of-stock sale items. If this is true, then the Good Green Grocer would most likely be accused of ________.

1. A) using puffery
2. B) making exaggerated claims
3. C) using bait-and-switch tactics
4. D) publishing inflated retail prices
5. E) green marketing

Answer:  C

Diff: 2             Page Ref: 44

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-2

 

65) Which of the following actions, if taken, would violate the marketing ethics code?

1. A) the Good Green Grocer raising its prices on its popular items
2. B) the Good Green Grocer advertising that its products will help people “feel healthy”
3. C) the Good Green Grocer lowering prices in order to better compete with larger supermarkets
4. D) the Good Green Grocer labeling as “organic” products that were grown using pesticides
5. E) the Good Green Grocer contributing a percentage of its profits to NGOs

Answer:  D

Diff: 3             Page Ref: 46

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-3

 

66) GDP stands for Gross Domestic Population.

Answer:  FALSE

Diff: 1             Page Ref: 39

Skill:  Concept

Objective:  4-1

 

67) In the United States, government agencies take an interest in ensuring consumer and public safety but are not involved in preventing anticompetitive business practices.

Answer:  FALSE

Diff: 2             Page Ref: 39

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-1

 

68) Consumers determine the success or failure of a business through their decisions about which products to buy.

Answer:  TRUE

Diff: 2             Page Ref: 39

Skill:  Concept

Objective:  4-1

 

69) Culture can be considered at a national level and regional level but is too broadly defined to be distinct at a local level.

Answer:  FALSE

Diff: 1             Page Ref: 40

AACSB:  Multicultural and diversity understanding

Skill:  Concept

Objective:  4-1

 

 

70) The belief that wasted time can open up new opportunities is part of the American culture.

Answer:  FALSE

Diff: 2             Page Ref: 40

AACSB:  Multicultural and diversity understanding

Skill:  Concept

Objective:  4-1

71) People do not notice all of the advertising messages to which they are exposed each day.

Answer:  TRUE

Diff: 2             Page Ref: 40

AACSB:  Communication abilities

Skill:  Concept

Objective:  4-1

 

72) Consumerism does not need to be coordinated in any formal manner.

Answer:  TRUE

Diff: 2             Page Ref: 41

Skill:  Concept

Objective:  4-1

 

73) Consumerism is a movement that began in the twenty-first century.

Answer:  FALSE

Diff: 2             Page Ref: 41

Skill:  Concept

Objective:  4-1

 

74) The concept of eight basic consumer rights is supported by American law, but not by international organizations such as the United Nations.

Answer:  FALSE

Diff: 3             Page Ref: 41

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-1

 

75) The LOHAS and Naturalites segments of the market for environmentally and socially responsible products together represent less than half of the American population.

Answer:  TRUE

Diff: 3             Page Ref: 43

AACSB:  Multicultural and diversity understanding

Skill:  Concept

Objective:  4-1

 

76) By definition, products that are promoted through green marketing are organic.

Answer:  FALSE

Diff: 3             Page Ref: 43

Skill:  Concept

Objective:  4-1

77) A broader definition of “law” also includes social practices or customs.

Answer:  TRUE

Diff: 3             Page Ref: 44

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-2

78) An advertiser must have documented proof of any claims made in an advertisement.

Answer:  TRUE

Diff: 2             Page Ref: 44

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-2

 

79) Social marketing and corporate social responsibility are interchangeable terms.

Answer:  FALSE

Diff: 2             Page Ref: 46

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-3

 

80) In marketing, an action that is legal is by definition ethical.

Answer:  FALSE

Diff: 3             Page Ref: 47

AACSB:  Ethical understanding and reasoning abilities

Skill:  Concept

Objective:  4-3

 

81) Marathon runners are an example of a subculture.

Answer:  TRUE

Diff: 2             Page Ref: 40

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-1

 

82) The concern that children may be exploited by certain advertising messages would not be addressed by the consumerism movement.

Answer:  FALSE

Diff: 3             Page Ref: 41

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-1

 

 

83) A cereal maker that advertises its products as “the one that will make you smile” is using an exaggerated claim, not puffery.

Answer:  FALSE

Diff: 3             Page Ref: 45

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-2

84) How does an NGO differ from a government organization?

Answer:  An NGO is a nongovernmental organization, so it is made up of private individuals instead of publicly elected or appointed officials; also, an NGO does not have the authority to enforce laws or regulations.

Diff: 2             Page Ref: 39

AACSB:  Analytic skills

Skill:  Application

Objective:  4-1

 

85) Explain how society and culture relate to one another.

Answer:  A society is a group of people connected by a culturecommon values, beliefs, and preferences.

Diff: 2             Page Ref: 39-40

AACSB:  Analytic skills

Skill:  Application

Objective:  4-1

 

86) Identify two defining aspects of American culture.

Answer:  Answers may include the following beliefs: Individuals have the right to choose their own destinies. Individuals can take control of themselves and their environment. “All people are created equal.” Change equals progress. “Time is money.” Charity and “giving back” are important. There is strength in diversity.

Diff: 2             Page Ref: 40

AACSB:  Multicultural and diversity understanding

Skill:  Application

Objective:  4-1

 

87) Give an example of how marketers introduce products based on the development of new technologies.

Answer:  Answers will vary. The relatively new technology of the Internet has led marketers to introduce many new products, such as email on Google and e-retailers such as Amazon.com.

Diff: 2             Page Ref: 41

AACSB:  Use of information technology

Skill:  Application

Objective:  4-1

 

 

88) Explain two reasons that boycotts are effective.

Answer:  A boycott hurts a company financially, decreasing purchases of its products and therefore lowering profitability. A boycott also generates negative publicity for a company, influencing consumers who were not initially part of the boycott to stay away from the company and its products.

Diff: 3             Page Ref: 41

AACSB:  Analytic skills

Skill:  Application

Objective:  4-1

89) Briefly provide two reasons that more and more consumers are joining the environmentalism movement.

Answer:  Consumers are concerned about the effect of the growing population on the planet’s resources, climate change, diminishing natural resources, and increasing levels of pollution; environmentalism addresses these concerns.

Diff: 2             Page Ref: 42

AACSB:  Analytic skills

Skill:  Application

Objective:  4-1

 

90) Why are organic foods considered to be better for the environment?

Answer:  Organic foods help to reduce pollution because pesticides and synthetic fertilizers are not used in their production; organic foods also tend to be grown through methods that involve water and soil conservation.

Diff: 3             Page Ref: 43

AACSB:  Analytic skills

Skill:  Application

Objective:  4-1

 

91) Explain the difference between puffery and an exaggerated claim in marketing.

Answer:  Puffery is a legal tactic that involves a claim of product superiority that cannot be proven or disproven, while an exaggerated claim is an illegal tactic that involves making a claim of superiority that can be proven false.

Diff: 2             Page Ref: 45

AACSB:  Analytic skills

Skill:  Application

Objective:  4-2

 

92) What is the difference between corporate social responsibility and the social marketing concept?

Answer:  Corporate social responsibility is a company policy to consider the social consequences of business decisions; the social marketing concept is the practice of using marketing techniques to improve the lives of individuals and society.

Diff: 2             Page Ref: 46

AACSB:  Analytic skills

Skill:  Application

Objective:  4-3

93) The Enron company committed major accounting fraud by hiding hundreds of millions of dollars of debt. As a result, many shareholders lost substantial savings. Identify three norms in the Marketing Ethics Code that Enron violated.

Answer:  Enron violated the three norms of the Marketing Ethics Code: do no harm, foster trust in the marketing system, and embrace ethical values.

Diff: 3             Page Ref: 46

AACSB:  Ethical understanding and reasoning abilities

Skill:  Application

Objective:  4-3

94) Briefly explain the roles of consumers, businesses, governments, and NGOs in the society of the United States.

Answer:  Consumers, businesses, governments, and nongovernmental organizations are bound together through interrelated activity in our modern consumer society. Consumers enjoy benefits from the product choices brought to them through marketing; consumers determine the success of a business by determining whether or not to buy the company’s products. Businesses market products and services for consumption by consumers and other businesses for a profit; governments and nongovernmental organizations set boundaries on the actions of the businesses. Governments regulate businesses and collect taxes from both consumers and businesses. NGOs, which are groups of private individuals, monitor the behavior of businesses and governments and use their influence to achieve social goals.

Diff: 3             Page Ref: 39

AACSB:  Analytic skills

Skill:  Application

Objective:  4-1

 

95) Explain how marketing is both a reflection of a culture and a powerful influence upon it, giving at least two examples.

Answer:  Marketers pay close attention to what is happening culturally so that they are positioned to take advantage of changes in a society’s values, beliefs, and preferences. For example, a recent cultural trend is a strong interest in organic and locally grown foods. In response to this trend, many food marketers have introduced organic products and more heavily advertised organic and natural ingredients. Marketing also influences a culture, most noticeably through advertising. People are exposed to hundreds of advertising messages each day, and the most popular messages become part of the culture. For example, the Verizon Wireless “Can you hear me now?” campaign has become part of the larger American culture, influencing the belief that people should be able to communicate with anyone, anywhere. (Examples will vary.)

Diff: 3             Page Ref: 40-41

AACSB:  Multicultural and diversity understanding

Skill:  Application

Objective:  4-1

 

 

96) Explain several of the issues that marketers interested in green marketing should consider.

Answer:  Marketers interested in green marketing should address a wide range of issues, including how their products are created, used, and disposed of. Marketers should consider the chemicals and processes used to create a product, as well as the energy consumed in its creation. Marketers should also ensure that a product can be used safely with minimal impact on the environment, and that the product can be recycled or partially reclaimed when it is no longer useful to the consumer. Finally, marketers should examine whether there are more environmentally sound alternatives to a product.

Diff: 2             Page Ref: 42

AACSB:  Analytic skills

Skill:  Application

Objective:  4-1

97) Identify three areas of marketing that are of particular interest to legislators, and explain why these areas are of particular interest.

Answer:  Answers will vary. False advertising and deceptive pricing practices are of particular concern because these practices violate the basic consumer right to be informed. Tobacco advertising is of concern because it may also violate a consumer’s right to safety, as tobacco is a product linked to several health problems. Children’s advertising is of concern because these consumers may be too young to make educated, informed choices about products. Product safety is of concern as it is related to a consumer’s right to safety and to a healthy environment. Nutritional labeling is a concern because it is related to a consumer’s right to be informed about a product. Fairness in lending practices are of a concern to legislators, as they must ensure that discrimination does not occur. Finally, consumer privacy is an important issue for legislators to consider as more personal information is shared among marketers.

Diff: 3             Page Ref: 44-45

AACSB:  Ethical understanding and reasoning abilities

Skill:  Application

Objective:  4-2

 

98) The Federal Trade Commission enforces laws against deceptive advertising. Briefly discuss three types of deceptive advertising that would be considered illegal.

Answer:  In general, advertisers must have documented proof of any claims made in an advertisement. In other words, they cannot make unfounded exaggerated claims of product superiority or efficacy that can be proven false. Marketers cannot advertise an inflated retail price along with a discount. Instead, any advertised “retail price” must be the prevailing price for the product in the retailer’s geographic area. Finally, so-called bait-and-switch tactics are illegal. This refers to the practice of advertising a low-priced item with no intention of actually offering it for sale; instead, retailers switch customers to a higher-priced item once they enter the store.

Diff: 3             Page Ref: 44

AACSB:  Ethical understanding and reasoning abilities

Skill:  Application

Objective:  4-2

 

 

99) Explain the concept of CSR and how it can have positive long-term benefits for both a company and society.

Answer:  A policy of corporate social responsibility encourages corporate decision makers to take into account both the financial and social consequences of their business actions. Advocates of CSR maintain that companies can and should earn profits in an ethical manner that respects people, society, and the natural environment. By “doing the right thing” through a policy of CSR, a company will secure long-term profits. Customers will be more loyal to a company that adheres to ethical behavior and will be willing to pay a premium for products from firms that make efforts to improve society. Companies practicing CSR will also have the benefit of positive publicity.

Diff: 2             Page Ref: 46

AACSB:  Ethical understanding and reasoning abilities

Skill:  Application

Objective:  4-3

100) Explain the social marketing concept and discuss two examples of its use.

Answer:  According to the social marketing concept, marketing techniques can be used for more than selling and making a profit; they can also be used to promote causes that improve the lives of individuals and society. For example, the TRUTH antismoking campaign has used a variety of traditional and nontraditional marketing techniques to make clear the negative effects of smoking. Mothers Against Drunk Driving has similarly used marketing campaigns to encourage parents to talk with their teenage children about the dangers of drinking and driving. (Examples will vary.)

Diff: 2             Page Ref: 46

AACSB:  Reflective thinking skills

Skill:  Application

Objective:  4-3