Marketing Study Guide for Exam 2:
Chapters 3,4,5,6,8,9
Chapter 4:
1. Environmental management: when a company implements strategies that attempt to
shape the external environment within which it operates
2. Component lifestyles: the practice of choosing goods and services that meet one’s diverse
needs and interests rather than conforming to a single, traditional lifestyle
3. Generation Y: people born between 1979 and 1994
4. Generation X: people born between 1965 and 1978
5. Baby boomers: people born between 1946-1964
6. Purchasing power: a comparison of income versus the relative cost of a standard set of
goods and services in different geographic areas.
7. Inflation: a measure of the decrease in the value of money, expressed as the percentage
reduction in value since the previous year
8. Recession: a period of economic activity characterized by negative growth, which
reduces demand for goods and services
9. Basic research: pure research that aims to confirm an existing theory or to learn more
about a concept or phenomenon
10. Applied research: research that attempts to develop new or improved products
11. Consumer Product Safety Commission(CPSC): a federal agency established to protect the
health and safety of consumers in and around their homes
12. Food and Drug Administration (FDA): a federal agency charged with enforcing
regulations against selling and distributing adulterated, misbranded, or hazardous food
and drug products
13. Federal Trade Commission (FTC): a federal agency empowered to prevent persons or
corporations from using unfair methods of competition in commerce.
Chapter 5:
1. Gross domestic product (GDP): the total market value of all final goods and services
produced in a country for a given time period
2. Job outsourcing: sending U.S. jobs abroad
3. Multinational corporation: a company that is heavily engaged in international trade,
beyond exporting and importing
4. Capital intensive: using more capital than labor in the production process
5. Global marketing standardization: production of uniform products that can be sold the
same way all over the world
6. Multidomestic strategy: when multinational firms enable individual subsidiaries to
compete independently in domestic markets
7. Mercosur: the largest Latin American trade agreement; includes Argentina, Bolivia,
Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay, and Venezuela
8. Uruguay Round: a trade agreement to dramatically lower trade barriers worldwide;
created the World Trade Organization
9. World Trade Organization (WTO): a trade organization that replaced the old General
Agreement on Tariffs and Trade (GATT)
10. General Agreement on Tariffs and Trade (GATT): a trade agreement that contained
loopholes enabling countries to avoid trade-barrier reduction agreements
11. North American Free Trade Agreement (NAFTA): an agreement between Canada, the
United States, and Mexico that created the world’s then-largest free trade zone
12. Dominican Republic-Central America Free Trade agreement (CAFTA-DR): a trade
agreement instituted in 2005 that includes Costa Rica, the Dominican Republic, El
Salvador, Guatemala, Honduras, Nicaragua, and the United States
13. European Union (EU): a free trade zone encompassing twenty-eight European countries
14. World Bank: an international bank that offers low-interest loans, advice, and information
to developing nations
15. International Monetary Fund (IMF): an international organization that acts as a lender of
last resort, providing loans to troubled nations, and also works to promote trade through
financial cooperation
16. Group of Twenty (G-20): a forum for international economic development that promotes
discussion between industrial and emerging-market countries on key issues related to
global economic stability
17. Exporting: selling domestically produced products to buyers in other countries
18. Buyer for export: an intermediary in the global market that assumes all ownership risks
and sells globally for its own account
19. Export broker: an intermediary who plays the traditional broker’s role by bringing buyer
and seller together
20. Export agent: an intermediary who acts like a manufacturer’s agent for the exporter; the
export agent lives in the foreign market
21. Licensing: the legal process whereby a licensor allows another firm to use its
manufacturing process, trademarks, patents, trade secrets, or other proprietary knowledge
22. Contract manufacturing: private label manufacturing by a foreign company
23. Joint venture: when a domestic firm buys part of a foreign company or joins with a
foreign company to create a new entity
24. Direct foreign investment: active ownership of a foreign company or of overseas
manufacturing or marketing facilities
25. Exchange rate: the price of one country’s currency in terms of another country’s currency
26. Floating exchange rates: a system in which prices of different currencies move up and
own based on the demand for and the supply of each currency
27. Dumping: the sale of an exported product at a price lower than that charged for the same
or a like product in the “home market of the exporter
28. Countertrade: a form of trade in which all of part of the payment for goods or services is
in the form of other goods or services
29. Blog: a publicly accessible Web page that functions as an interactive journal, where
readers can post comments on the author’s entries
Chapter 6:
1. Need recognition: result of an imbalance between actual and desired states
2. Want: recognition of an unfulfilled need and a product that will satisfy it
3. Stimulus: any unit of input affecting one or more of the five senses (sight, smell, taste,
touch, hearing)
4. Internal information search: the process of recalling past information stored in the
memory
5. External information search: the process of seeking information in the outside
