Chapter 3 Analyzing the Marketing Environment
1) Which of the following is NOT a type of factor in a company's macroenvironment?
A) demographic
B) economic
C) technological
D) competitive
E) political
Answer: D
Diff: 1 Page Ref: 66
Skill: Concept
Objective: 3-1
2) All of the groups within a company are called the ________.
A) culture
B) diversity
C) internal environment
D) climate
E) range
Answer: C
Diff: 2 Page Ref: 67
Skill: Concept
Objective: 3-1
3) A ________ is defined as any group that has an actual or potential interest in, or impact on, an organization's ability to achieve its objectives.
A) team
B) competitor
C) market
D) public
E) intermediary
Answer: D
Diff: 1 Page Ref: 69
AACSB: Communication
Skill: Concept
Objective: 3-1
4) Which of the following is NOT an example of the type of public that is part of a company's marketing environment?
A) financial
B) media
C) government
D) citizen-action
E) marketing department
Answer: E
Diff: 1 Page Ref: 69
AACSB: Communication
Skill: Concept
Objective: 3-1
5) Which type of market buys goods and services for further processing or for use in the production process?
A) business
B) reseller
C) wholesale
D) consumer
E) retail
Answer: A
Diff: 2 Page Ref: 69
Skill: Concept
Objective: 3-1
6) Which type of market buys goods and services to produce public services or to transfer them to others who need them?
A) government
B) reseller
C) wholesale
D) consumer
E) retail
Answer: A
Diff: 1 Page Ref: 69
Skill: Concept
Objective: 3-1
7) Your marketing department is currently researching the size, density, location, age, and occupations of your target market. Which environment is being researched?
A) demographic
B) psychographic
C) economic
D) geographic
E) cultural
Answer: A
Diff: 1 Page Ref: 70
Skill: Concept
Objective: 3-2
8) As a group, ________ are the most affluent Americans.
A) baby boomers
B) Generation Xers
C) the Millennials
D) echo boomers
E) seniors
Answer: A
Diff: 2 Page Ref: 71
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 3-2
9) Which of the following descriptions most accurately characterizes the baby boomers?
A) They are increasingly likely to retire early.
B) They are a shrinking market for new housing and home remodeling.
C) They are past their peak earning and spending years.
D) They hold 75% of the country's assets.
E) They are uninterested in adapting new technologies.
Answer: D
Diff: 2 Page Ref: 71
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 3-2
10) In the 1950s, the American population began shifting from large cities to ________.
A) farming communities
B) rural areas
C) foreign countries
D) suburbs
E) coastal towns
Answer: D
Diff: 1 Page Ref: 76
Skill: Concept
Objective: 3-2
11) The ________ environment consists of factors that affect consumer purchasing power and spending patterns.
A) cultural
B) political
C) technological
D) economic
E) natural
Answer: D
Diff: 1 Page Ref: 79
Skill: Concept
Objective: 3-2
12) Value marketing is the strategy of offering consumers ________.
A) high quality at a high price
B) luxury quality at a high price
C) lesser quality at a low price
D) reasonable quality at a fair price
E) little quality at a low price
Diff: 2 Page Ref: 80
Skill: Concept
Objective: 3-2
13) Even the most liberal advocates of free-market economies agree that the system works best with ________ regulation.
A) private
B) maximum
C) intermittent
D) at least some
E) no
Answer: D
Diff: 2 Page Ref: 84
AACSB: Ethical Reasoning
Skill: Concept
Objective: 3-4
14) Business legislation has been created for three basic reasons: to protect companies from each other, to protect consumers, and to ________.
A) protect the interests of society
B) regulate prices
C) increase world trade
D) regulate monopolies
E) promote social responsibility
Answer: A
Diff: 2 Page Ref: 84
AACSB: Ethical Reasoning
Skill: Concept
Objective: 3-4
15) Cause-related marketing is a(n) ________.
A) response to customer needs
B) primary form of environmental awareness
C) primary form of corporate giving
D) response to corporate legislative problems
E) attempt to influence consumers' core beliefs
Answer: C
Diff: 2 Page Ref: 86
AACSB: Ethical Reasoning
Skill: Concept
Objective: 3-4
16) A society's basic values, perceptions, preferences, and behaviors are all part of its ________ environment.
A) social
C) political
D) cultural-economic
E) natural
Answer: B
Diff: 1 Page Ref: 87
Skill: Concept
Objective: 3-4
17) A society's ________ are expressed in how people view themselves, organizations, society, nature, and the universe.
A) social codes
B) cultural values
C) demographics
D) public policies
E) economies
Answer: B
Diff: 1 Page Ref: 87
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 3-4
18) Trends in people's views of organizations indicate that which of the following has increased in the past twenty years?
A) employees' loyalty to their employers
B) confidence in American political organizations
C) distrust in big American businesses
D) distrust in small, local businesses
E) employees' view of work as a source of satisfaction
Answer: C
Diff: 2 Page Ref: 89
Skill: Concept
Objective: 3-4
19) Today's marketers must successfully build relationships to connect effectively with customers, others in the company, and external partners.
Answer: TRUE
Diff: 1 Page Ref: 66-67
AACSB: Communication
Skill: Concept
Objective: 3-1
20) The microenvironment consists of larger societal forces that affect a company, such as demographic, economic, political, and cultural forces.
Answer: FALSE
Diff: 1 Page Ref: 66
Skill: Concept
Objective: 3-1
21) The demographic environment is of major interest to marketers because it involves people, and people make up markets.
Answer: TRUE
Diff: 1 Page Ref: 70
Skill: Concept
Objective: 3-2
22) As baby boomers reach their peak earning and spending years, they become lucrative markets for financial services, travel, and entertainment.
Answer: TRUE
Diff: 2 Page Ref: 71
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 3-2
23) Millennials represent a larger demographic segment than the baby boomers or Gen Xers. Answer: TRUE
Diff: 2 Page Ref: 74
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 3-2
24) The American workforce today is better educated but less white-collar than it was a generation ago.
Answer: FALSE
Diff: 3 Page Ref: 77
Skill: Concept
Objective: 3-2
25) Companies in several industries have recognized the buying power of the gay and lesbian segment of the U.S. population and have begun explicitly targeting these consumers with gay-specific marketing efforts.
Answer: TRUE
Diff: 2 Page Ref: 78
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 3-2
26) According to Engel's laws, consumers tend to spend a larger percentage of income on savings as income rises.
Answer: TRUE
Diff: 2 Page Ref: 81
Skill: Concept
Objective: 3-2
27) The introduction of new technologies is beneficial to all industries, as new markets and opportunities are created.
Answer: FALSE
Diff: 2 Page Ref: 83
AACSB: Use of IT
Skill: Concept
Objective: 3-3
28) In the cultural environment, core values and beliefs and secondary values and beliefs differ in that the former are more open to change.
Answer: FALSE
Diff: 1 Page Ref: 87
Skill: Concept
Objective: 3-4
29) When a company hires lobbyists to influence legislation affecting its industry, it is taking a reactive approach to the marketing environment.
Answer: FALSE
Diff: 3 Page Ref: 91
AACSB: Reflective Thinking
Skill: Application
Objective: 3-5
30) Who are the major players in a company's microenvironment? Explain the role each major actor plays.
Answer: Within the company, marketing management takes other groups into account, such as top management, finance, research and development, purchasing, operations, and accounting. Decisions made and implemented by any of these groups have the power to affect marketing. Suppliers form an important link in the company's overall customer value-delivery system. Problems with supply, such as labor or material shortages, will negatively affect the company. Marketing intermediaries help the firm to promote, sell, and distribute its goods to final buyers. They include resellers, physical distribution firms, marketing services agencies, and financial intermediaries. Competitors are also part of the microenvironment, as they can affect the
company's ability to serve its customers. The company's microenvironment is also made of various publics, including financial, media, government, citizen-action, and local groups. One or several of the five types of markets–consumer, business, reseller, government, and international–may be part of the company's microenvironment, depending on the company's products.
Diff: 2 Page Ref: 67-69
Skill: Application
Objective: 3-1
31) In marketing, what is a public? Briefly describe the seven main types of publics faced by marketers and explain how marketing might communicate with these publics.
Answer: A public is any group that has an actual or potential interest in or impact on an
organization's ability to achieve its objectives. We can identify seven types of publics. Financial publics influence the company's ability to obtain funds. Media publics carry news, features, and editorial opinions. Government publics develop public policy to guide commerce with sets of laws and regulations. Citizen-action publics include consumer, minority, and environmental groups. Local publics include neighborhood residents and community organizations. The general public has concerns about the company's products and actions. Internal publics include workers,
managers, volunteers, and the board of directors. Marketing can treat these influential publics like consumer markets, creating marketing plans to build relationships and elicit a desired response. Diff: 2 Page Ref: 69
AACSB: Communication
Skill: Application
Objective: 3-1
32) What are the major trends in today's natural environment? How do these trends affect companies?
Answer: The natural environment shows three major trends: shortages of certain raw materials, higher pollution levels, and more government intervention in natural resource management. Environmental concerns create marketing opportunities for alert companies. As concern about global warming and other environmental issues continues to grow, more and more consumers are demanding environmentally responsible products. Companies who heed these demands will benefit, as environmentally responsible actions are today linked with good business.
Diff: 2 Page Ref: 81
AACSB: Analytic Skills
Skill: Application
Objective: 3-3
Chapter 3 Analyzing the Marketing Environment
1) Which of the following is NOT a type of factor in a company's macroenvironment?
A) demographic
B) economic
C) technological
D) competitive
E) political
Answer: D
Diff: 1 Page Ref: 66
Skill: Concept
Objective: 3-1
2) All of the groups within a company are called the ________.
A) culture
B) diversity
C) internal environment
D) climate
E) range
Answer: C
Diff: 2 Page Ref: 67
Skill: Concept
Objective: 3-1
3) A ________ is defined as any group that has an actual or potential interest in, or impact on, an organization's ability to achieve its objectives.
A) team
B) competitor
C) market
D) public
E) intermediary
Answer: D
Diff: 1 Page Ref: 69
AACSB: Communication
Skill: Concept
Objective: 3-1
4) Which of the following is NOT an example of the type of public that is part of a company's marketing environment?
A) financial
B) media
C) government
D) citizen-action
E) marketing department
Answer: E
Diff: 1 Page Ref: 69
AACSB: Communication
Skill: Concept
Objective: 3-1
5) Which type of market buys goods and services for further processing or for use in the production process?
A) business
B) reseller
C) wholesale
D) consumer
E) retail
Answer: A
Diff: 2 Page Ref: 69
Skill: Concept
Objective: 3-1
6) Which type of market buys goods and services to produce public services or to transfer them to others who need them?
A) government
B) reseller
C) wholesale
D) consumer
E) retail
Answer: A
Diff: 1 Page Ref: 69
Skill: Concept
Objective: 3-1
7) Your marketing department is currently researching the size, density, location, age, and occupations of your target market. Which environment is being researched?
A) demographic
B) psychographic
C) economic
D) geographic
E) cultural
Answer: A
Diff: 1 Page Ref: 70
Skill: Concept
Objective: 3-2
8) As a group, ________ are the most affluent Americans.
A) baby boomers
B) Generation Xers
C) the Millennials
D) echo boomers
E) seniors
Answer: A
Diff: 2 Page Ref: 71
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 3-2
9) Which of the following descriptions most accurately characterizes the baby boomers?
A) They are increasingly likely to retire early.
B) They are a shrinking market for new housing and home remodeling.
C) They are past their peak earning and spending years.
D) They hold 75% of the country's assets.
E) They are uninterested in adapting new technologies.
Answer: D
Diff: 2 Page Ref: 71
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 3-2
10) In the 1950s, the American population began shifting from large cities to ________.
A) farming communities
B) rural areas
C) foreign countries
D) suburbs
E) coastal towns
Answer: D
Diff: 1 Page Ref: 76
Skill: Concept
Objective: 3-2
11) The ________ environment consists of factors that affect consumer purchasing power and spending patterns.
A) cultural
B) political
C) technological
D) economic
E) natural
Answer: D
Diff: 1 Page Ref: 79
Skill: Concept
Objective: 3-2
12) Value marketing is the strategy of offering consumers ________.
A) high quality at a high price
B) luxury quality at a high price
C) lesser quality at a low price
D) reasonable quality at a fair price
E) little quality at a low price
Diff: 2 Page Ref: 80
Skill: Concept
Objective: 3-2
13) Even the most liberal advocates of free-market economies agree that the system works best with ________ regulation.
A) private
B) maximum
C) intermittent
D) at least some
E) no
Answer: D
Diff: 2 Page Ref: 84
AACSB: Ethical Reasoning
Skill: Concept
Objective: 3-4
14) Business legislation has been created for three basic reasons: to protect companies from each other, to protect consumers, and to ________.
A) protect the interests of society
B) regulate prices
C) increase world trade
D) regulate monopolies
E) promote social responsibility
Answer: A
Diff: 2 Page Ref: 84
AACSB: Ethical Reasoning
Skill: Concept
Objective: 3-4
15) Cause-related marketing is a(n) ________.
A) response to customer needs
B) primary form of environmental awareness
C) primary form of corporate giving
D) response to corporate legislative problems
E) attempt to influence consumers' core beliefs
Answer: C
Diff: 2 Page Ref: 86
AACSB: Ethical Reasoning
Skill: Concept
Objective: 3-4
16) A society's basic values, perceptions, preferences, and behaviors are all part of its ________ environment.
A) social
C) political
D) cultural-economic
E) natural
Answer: B
Diff: 1 Page Ref: 87
Skill: Concept
Objective: 3-4
17) A society's ________ are expressed in how people view themselves, organizations, society, nature, and the universe.
A) social codes
B) cultural values
C) demographics
D) public policies
E) economies
Answer: B
Diff: 1 Page Ref: 87
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 3-4
18) Trends in people's views of organizations indicate that which of the following has increased in the past twenty years?
A) employees' loyalty to their employers
B) confidence in American political organizations
C) distrust in big American businesses
D) distrust in small, local businesses
E) employees' view of work as a source of satisfaction
Answer: C
Diff: 2 Page Ref: 89
Skill: Concept
Objective: 3-4
19) Today's marketers must successfully build relationships to connect effectively with customers, others in the company, and external partners.
Answer: TRUE
Diff: 1 Page Ref: 66-67
AACSB: Communication
Skill: Concept
Objective: 3-1
20) The microenvironment consists of larger societal forces that affect a company, such as demographic, economic, political, and cultural forces.
Answer: FALSE
Diff: 1 Page Ref: 66
Skill: Concept
Objective: 3-1
21) The demographic environment is of major interest to marketers because it involves people, and people make up markets.
Answer: TRUE
Diff: 1 Page Ref: 70
Skill: Concept
Objective: 3-2
22) As baby boomers reach their peak earning and spending years, they become lucrative markets for financial services, travel, and entertainment.
Answer: TRUE
Diff: 2 Page Ref: 71
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 3-2
23) Millennials represent a larger demographic segment than the baby boomers or Gen Xers. Answer: TRUE
Diff: 2 Page Ref: 74
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 3-2
24) The American workforce today is better educated but less white-collar than it was a generation ago.
Answer: FALSE
Diff: 3 Page Ref: 77
Skill: Concept
Objective: 3-2
25) Companies in several industries have recognized the buying power of the gay and lesbian segment of the U.S. population and have begun explicitly targeting these consumers with gay-specific marketing efforts.
Answer: TRUE
Diff: 2 Page Ref: 78
AACSB: Multicultural and Diversity
Skill: Concept
Objective: 3-2
26) According to Engel's laws, consumers tend to spend a larger percentage of income on savings as income rises.
Answer: TRUE
Diff: 2 Page Ref: 81
Skill: Concept
Objective: 3-2
27) The introduction of new technologies is beneficial to all industries, as new markets and opportunities are created.
Answer: FALSE
Diff: 2 Page Ref: 83
AACSB: Use of IT
Skill: Concept
Objective: 3-3
28) In the cultural environment, core values and beliefs and secondary values and beliefs differ in that the former are more open to change.
Answer: FALSE
Diff: 1 Page Ref: 87
Skill: Concept
Objective: 3-4
29) When a company hires lobbyists to influence legislation affecting its industry, it is taking a reactive approach to the marketing environment.
Answer: FALSE
Diff: 3 Page Ref: 91
AACSB: Reflective Thinking
Skill: Application
Objective: 3-5
30) Who are the major players in a company's microenvironment? Explain the role each major actor plays.
Answer: Within the company, marketing management takes other groups into account, such as top management, finance, research and development, purchasing, operations, and accounting. Decisions made and implemented by any of these groups have the power to affect marketing. Suppliers form an important link in the company's overall customer value-delivery system. Problems with supply, such as labor or material shortages, will negatively affect the company. Marketing intermediaries help the firm to promote, sell, and distribute its goods to final buyers. They include resellers, physical distribution firms, marketing services agencies, and financial intermediaries. Competitors are also part of the microenvironment, as they can affect the
company's ability to serve its customers. The company's microenvironment is also made of various publics, including financial, media, government, citizen-action, and local groups. One or several of the five types of markets–consumer, business, reseller, government, and international–may be part of the company's microenvironment, depending on the company's products.
Diff: 2 Page Ref: 67-69
Skill: Application
Objective: 3-1
31) In marketing, what is a public? Briefly describe the seven main types of publics faced by marketers and explain how marketing might communicate with these publics.
Answer: A public is any group that has an actual or potential interest in or impact on an
organization's ability to achieve its objectives. We can identify seven types of publics. Financial publics influence the company's ability to obtain funds. Media publics carry news, features, and editorial opinions. Government publics develop public policy to guide commerce with sets of laws and regulations. Citizen-action publics include consumer, minority, and environmental groups. Local publics include neighborhood residents and community organizations. The general public has concerns about the company's products and actions. Internal publics include workers,
managers, volunteers, and the board of directors. Marketing can treat these influential publics like consumer markets, creating marketing plans to build relationships and elicit a desired response. Diff: 2 Page Ref: 69
AACSB: Communication
Skill: Application
Objective: 3-1
32) What are the major trends in today's natural environment? How do these trends affect companies?
Answer: The natural environment shows three major trends: shortages of certain raw materials, higher pollution levels, and more government intervention in natural resource management. Environmental concerns create marketing opportunities for alert companies. As concern about global warming and other environmental issues continues to grow, more and more consumers are demanding environmentally responsible products. Companies who heed these demands will benefit, as environmentally responsible actions are today linked with good business.
Diff: 2 Page Ref: 81
AACSB: Analytic Skills
Skill: Application
Objective: 3-3