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148. The Better Business Bureau is probably the best-known
a. nongovernmental regulatory group.
b. state-operated enforcement agency.
c. national evaluator of advertisements.
d. federal regulatory group.
e. self-regulatory unit operating at the national level.
149. The practice of linking a firm’s product marketing to a particular social cause on an ongoing or short-term basis is
known as
a. economic responsibility.
b. social responsibility.
c. ethical marketing.
d. cause-related marketing.
e. corporate benevolence.
150. Companies delivering mixed concrete know that it cannot be shipped farther than twenty-five miles because the
concrete might harden in the truck. Citrus County Concrete Company is the only supplier of mixed concrete to customers
within a thirty-mile radius. Citrus County Concrete is an example of which one of the following competitive structures?
a. Monopoly
b. Oligopoly
c. Monopolistic competition
d. Pure competition
e. Monopsony
151. What is the major difference between social responsibility and marketing ethics?
a. Marketing ethics varies by industry whereas social responsibility involves universal rules of conduct.
b. There is legislation that deals with marketing ethics, but none for socially responsible practices.
c. Marketing ethics is concerned with organizational practices, and social responsibility is concerned with individual
behavior.
d. There is no difference; they are synonymous terms.
e. Social responsibility deals with the total effect of marketing decisions on society, whereas marketing ethics relates
to individual and group evaluations in marketing situations.
152. When PepsiCo takes the information collected through research and attempts to assess and interpret what it means
for its soft-drink marketing efforts, PepsiCo is engaged in environmental
a. scanning.
b. forces.
c. management.
d. manipulation.
e. analysis.
153. Which of the following is an advantage that self-regulatory agencies such as the BBB and the NARB have over
governmental laws and regulatory agencies?
a. Firms must strictly abide by the rulings of self-regulatory agencies.
b. Establishment and implementation are usually less expensive.
c. They have better tools to enforce their rulings.
d. Guidelines are often stricter and create greater compliance from firms.
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e. Money is very rarely an issue in enforcing decisions of self-regulatory agencies.
154. ____ competitors provide very different products that satisfy the same basic customer need.
a. Brand
b. Generic
c. Total budget
d. Product
e. Marketing
155. As a firm fulfills its basic economic responsibilities, it must simultaneously
a. treat its employees equitably.
b. follow a code of business ethics.
c. utilize green marketing techniques.
d. have a philanthropic focus.
e. obey laws and regulations.
Scenario 3.5. The Consumer Financial Protection Bureau settled a claim with the Bank of America for deceiving
customers and unfairly billing them for services such as credit monitoring and identity theft protection. Bank of America
agreed to provide refunds to 2.9 million people and pay $45 million in fines for their illegal credit card practices. Their
deceptive practices dated to 2000 where they had billed customers for products such as “Privacy Guard” or “Privacy
Assist” without first obtaining authorization for the products. The $45 million in fines includes $25 million as a civil
penalty that will be paid to the Office of the Comptroller of the Currency and $20 million to the Consumer Financial
Protection Bureau. The Bureau also claims that Bank of America deceived about 1.4 million customers into making about
$268 million in payments by, among other things, improperly telling them the first 30 days of coverage were free or the
benefits were greater than existed.
156. Refer to Scenario 3.5. If the Consumer Financial Protection Bureau decides to contact the Federal Trade Commission
(FTC) to investigate Bank of America and its practices regarding deceptive billing practices and if the FTC believes that
Bank of America has violated a law, the FTC would first:
a. issue a cease-and-desist order
b. order Bank of America to stop engaging in deceptive practices to avoid prosecution
c. order Bank of America to refund consumers in order to settle or resolve the complaint
d. order Bank of America to pay up to $10,000 per day for violating the law
157. Texas rice farmers wish to get their product into the Japanese market but are hindered by a complex maze of
regulations imposed by the Japanese government. The farmers are most likely to attempt to influence which aspect of the
marketing environment?
a. Sociocultural
b. Technological
c. Competitive
d. Economic
e. Political
158. Consumerism is
a. the efforts of independent individuals, groups, and organizations to protect the rights of consumers.
b. President John F. Kennedy’s consumer bill of rights.
c. marketers’ efforts to contribute to the satisfaction and growth of the communities in which they operate.
d. the right to be informed.
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e. the specific development, pricing, promotion, and distribution of products that do not harm the environment.
159. Procompetitive laws are those designed to
a. preserve competition.
b. protect the consumer.
c. ensure product safety.
d. reduce competition.
e. limit business lobbying of government officials.
160. Which of the following is the best example of strategic philanthropy for Staples, the large office supply chain?
a. Donating money to help fight illiteracy of both adults and children
b. Having employees volunteer at a charity of their choice two hours a week
c. Giving a portion of its profits in August to support charter schools
d. Offering discounts to large corporations on their office supplies
e. Providing low-income families with school supplies and computer training
161. The Pharmaceutical Research and Manufacturers of America sets guidelines for its member firms to follow regarding
the use of unethical practices. Thus, it is engaging in
a. legislation.
b. lobbying.
c. self-regulation.
d. environmental scanning.
e. trade restraint.
162. Sharese wants to buy a new couch, but there is only one place in her town that sells them, and she lives in an isolated
area. Sharese most likely feels her consumer right to ____ has been violated.
a. choose
b. be heard
c. safety
d. recourse
e. be informed
163. Companies that market products with similar features, benefits, and prices to the same customer group are known as
____ competitors.
a. generic
b. product
c. brand
d. total budget
e. monopolistic
164. What do environmentalists set as an objective for profitability?
a. Companies should surpass the strictest environmental standards even if it negatively affects profitability.
b. Companies will never be profitable if they comply with environmental standards so taxpayers must subsidize all
production.
c. Profitability should not be a concern when addressing issues of environmental importance.
d. Environmentalism should be made profitable, and companies attempting to protect the environment should not
have to compete with those harming it in the marketplace.
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e. Companies will be more profitable if they work hard to protect the environment because consumers will reward
their efforts through loyalty.
165. Any constituent who has a claim in some aspect of a company’s products, operations, markets, industry, or outcomes
is known as a(n)
a. shareholder.
b. customer.
c. employee.
d. manager.
e. stakeholder.
166. Discretionary income is associated with all of the following except
a. automobiles.
b. education.
c. pets.
d. furniture.
e. food.
167. In addition to the proliferation of new organic brands many conventional marketers have introduced organic versions
of their products, including Orville Redenbacher, Heinz, and even Walmart. These firms are responding to changes in
a. federal law.
b. cultural values.
c. demographics.
d. consumerism.
e. technological forces.
168. Volkswagen is planning its promotional strategy for its Passat model. When compared to others in its class, the
Passat has average gas mileage, better comfort ratings, more leg room, better interiors, average dependability, and is made
in its plants in Tennessee. Which of the following attributes of a Volkswagen Passat would be most appropriate to
emphasize in television commercials during an economic recession?
a. Gas mileage
b. Dependability
c. Made in the U.S.A.
d. Leg room
e. Comfort
169. DoneRight Inc. is a very profitable automobile repair shop. The company is well known for its great service and
involvement in the community, but it fails to properly dispose of its used oil as outlined in environmental regulations.
DoneRight is failing in its ____ responsibilities.
a. legal
b. ethical
c. economic
d. philanthropic
e. strategic
170. If Julio Ruiz has an income of $30,000, pays $6,000 in rent, $1,200 in utilities, and $5,000 in taxes per year, his
disposable income is
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a. $7,800.
b. $14,000.
c. $9,000.
d. $25,000.
e. $20,000.
171. Shelby’s new job with the federal government provides a comfortable income and a fairly stable income. She would
like to buy a new car now that she has a job; however, Shelby hesitates to purchase a new car because she is concerned
about how poor economic conditions may affect her position in the future. Shelby lacks
a. disposable income.
b. willingness to spend.
c. buying power.
d. credit.
e. discretionary income.
172. The 1990 Nutrition Labeling and Education Act directly prohibits
a. exaggerated claims made by health and fitness products.
b. putting the words “cholesterol-free” on any food package.
c. putting nutritional information on most food products.
d. exaggerated health claims on food packages.
e. the use of any health claim on food packaging.
173. At times, large retailers such as Walmart may be accused of coercion in dealing with intermediaries because of the
amount of power and control these large companies have over many of their suppliers. This is most potentially a ____
related ethical issue.
a. promotion
b. pricing
c. culture
d. product
e. distribution
174. A set of values, beliefs, goals, norms, and rituals shared by members of an organization is called
a. organizational factors.
b. corporate culture.
c. codes of conduct.
d. ethical environment.
e. company ethos.
175. Distribution-related ethical issues arise when marketers
a. do not provide intermediaries with enough information about how a product is priced.
b. force channel intermediaries to behave in a specific manner.
c. bribe salespeople to push one product over another.
d. fail to disclose information to consumers about the risks associated with using a product.
e. distribute a product that is very similar to a competing product.
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176. While Silk Soymilk engages in environmental scanning and analysis, the company is more likely to change its
products and marketing strategies to adapt to environmental forces rather than trying to influence these forces. Silk
Soymilk has a(n) ____ approach to marketing environmental forces.
a. inactive
b. reactive
c. proactive
d. negative
e. variable
177. Which of the following is not one of the four objectives that environmentalists believe companies should implement
in order to sustain the natural environment?
a. Eliminate the concept of waste.
b. Reinvent the concept of a product.
c. Force consumers to recycle products.
d. Make prices reflect the true cost of a product.
e. Make environmentalism profitable.
178. Technology assessment is
a. measuring how much technology has been incorporated into an organization.
b. trying to foresee the effects of new products and processes on the firm’s operation and on society in general.
c. assessing how much technology one wants to incorporate into a company in the future.
d. judging how a firm’s products affect society.
e. weighing the cost of new technology to determine whether a firm can afford to use it.
179. What are some of the common price-related ethical issues?
a. Misleading advertising and predatory pricing
b. Additional discounts and price fixing
c. Not disclosing the full price and value-pricing
d. Predatory pricing and price fixing
e. Loss leaders and deceptive pricing
Scenario 3.2
Use the following to answer the questions.
Clayton Homes, a mobile home manufacturer since 1934, introduced its new i-House in 2007. The i-House is one of the
first of its kind, designed as an updated, modern version of the modular home, offered as a base home plus add-ons known
as “pods.” The base home is a one–bedroom, one-bath 734-square foot version at a price of around $80,000. There is also
a 1,000 square-foot version for around $100,000. All versions may add on the additional one-room pods as desired which
are shipped to your location and constructed on-site. The homes offer galvanized metal roofing, corrugated steel siding,
VOC-free paints, and a “butterfly” roof that collects rainwater. The i-House uses 30% less energy than a similar square-
foot home and offers “green” characteristics of solar panels, tankless water heaters, and low-flow faucets. In addition, it
comes with bamboo flooring, a renewable resource. The modular, pre-fabricated design offers endless options for creating
the customer’s home and its engineered building system cuts down on construction waste. Due to the “green effects” of
the i-House, the state governments have given it a tax abatement for any sales taxes.
180. Refer to Scenario 3.2 The new Clayton Homes i-House product is a reflection of the company’s attention to ____ in
developing its strategy.
a. marketing research analysis
b. self-regulatory analysis
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c. consumer behavior analysis.
d. marketing information processing.
e. environmental scanning and analysis.
181. At his new job, Carlos notices that everyone places high values on their families and each others’ families, birthdays
are always celebrated, and flexible schedules are permitted to facilitate family involvement as long as the work is still
getting done. Everyone is very relaxed and friendly. Carlos has made several observations about the
a. organizational structure.
b. ethical climate.
c. morale and performance programs.
d. codes of conduct.
e. corporate culture.
182. Which of the following agencies regulates marketing activities the most?
a. Environmental Protection Agency
b. Food and Drug Administration
c. Federal Trade Commission
d. Better Business Bureau
e. National Advertising Review Board
183. The most basic principles of marketing ethics are
a. philanthropic responsibilities.
b. economic responsibilities.
c. universally accepted behaviors.
d. written as laws and regulations.
e. included in the marketing code of ethics.
Scenario 3.3
Use the following to answer the questions.
Hershey Foods was founded in the nineteenth century by Milton Hershey, who had a strong ethical value system⎯always
show integrity, be honest, and respect others. Hershey felt it was important to provide high-quality goods and services of
real value at competitive prices that provide an adequate return on investment. He also founded the Milton Hershey
School, operating today as a cost-free, private home and school dedicated to helping children with social needs and
limited resources. The company also focuses on environmental issues, such as reducing waste by 360,000 pounds
annually by redesigning Hershey’s Syrup caps. Hershey Foods has an ethics compliance program that includes a code of
ethics and training, guidelines for handling legal and ethical issues, an 800 number for assistance with ethical issues, and
support from supervisors and human resource managers in dealing with ethical issues. However, in the last few years,
Hershey has been criticized by several advocacy groups concerning the sourcing of its chocolate from West Africa where
many of the companies use child labor. While Hershey is the largest chocolate candy producer in America, it lags behind
other major chocolate producers with regard to certifying its chocolate as child labor-free.
184. Refer to Scenario 3.3. The criticism of Hershey’s sourcing for chocolate is an example of ____, while the potential
use of child labor to produce Hershey products impacts its level of commitment to ______.
a. consumerism; organizational culture
b. ethics; social responsibility
c. shareholder orientation; social responsibility
d. ethical climate; ethics
e. consumerism; sustainability practices
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185. Carrie, a new salesperson for Brenham Foods, calls in an order for twice the amount of merchandise that Corner
Market requested because she knows that it will increase her sales and will not be noticed by Corner Market. This is an
example of how ____ influences ethical decision making.
a. opportunity
b. exposure
c. a significant other
d. a peer
e. an external reward
186. Sysco and U.S. Foods have sought to merge their food distribution businesses. If the companies are allowed to
merge, the combined company would control approximately 75% of the food service marketplace potentially leading to
higher prices and diminished service for the restaurants, hotels, and schools that contract distributors. A judge granted the
Federal Trade Commission (FTC) request to grant a restraining order and injunction on the merger as it would
substantially impair competition. If the FTC had not obtained a restraining order to block the merger attempt, what type of
competitive structure could the merged company (U.S. Foods & Sysco) have achieved?
a. monopoly
b. oligopoly
c. pure competition
d. demand competition
187. According to the text, marketing ethics refers to principles and standards that define
a. improper behavior in marketing.
b. acceptable conduct in society.
c. improper behavior in business.
d. acceptable conduct in marketing.
e. acceptable conduct in general.
188. Which of the following industries is most commonly regulated by state regulatory agencies?
a. Automobile manufacturers
b. Cigarette producers
c. Clothing manufacturers
d. Television networks
e. Utility companies
189. Total buying power declines during periods of economic
a. recovery.
b. prosperity.
c. recession.
d. uncertainty.
e. expansion.
190. Marketers live in a world of constant change, and their ability to adapt to the pace of change will dictate the degree to
which their marketing strategies are successful. Moreover, the changes can come in any or all of the different parts of the
marketing environment.
Which one of the following statements is true?
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a. The self-sustaining nature of technology relates to the fact that the products are increasingly being produced with
environment-friendly components.
b. The negative effects of technology include concerns over privacy and intellectual property protection.
c. Consumers’ use of mobile devices to access the Internet has been declining over the last few years.
d. Technological innovations are created only by private companies.
e. We can expect the pace of technological change to slow down as more technology-oriented startups choose to go
public and become more conservative with their business strategies.
191. The accumulation of past income, natural resources, and financial resources is known as
a. income.
b. collected income.
c. credit.
d. wealth.
e. savings.
192. Which of the following statements best summarizes the perspective that most marketing managers have on unethical
behavior?
a. Most do not believe that unethical conduct will lead to success and refrain from taking unethical opportunities.
b. They believe that unethical behavior is useful in the short run but detrimental in the long run.
c. They feel that codes of conduct will eliminate any unethical behavior from occurring in their organizations.
d. They believe that unethical behavior will be harmful in the short run but have little impact in the long run.
e. Most do not see ethical or unethical behavior as a concern to their organization because the opportunities do not
exist.
193. The Board of Directors of a company is responsible for determining, articulating and communicating the values and
standards of the business, and for ensuring that the policies, procedures and controls in place act to support, rather than
hinder, ethical values throughout the business.
Which one of the following corporate elements and characteristics can the Board of Directors influence the most to ensure
that the organization has an ethical culture?
a. Individual factors
b. Personal values
c. Employee integrity
d. Individual beliefs
e. Procedures and controls for oversight
194. Opportunity provides a pressure that may determine ethical decisions in marketing. Opportunity is best thought of as
a. unethical behavior found in top management.
b. a favorable set of conditions that limit barriers or provide rewards.
c. the principles or rules that individuals use to determine the way to behave.
d. a person’s relationship with others in the organization.
e. a problem or situation requiring an individual to choose a course of action.
195. Who drafted the Consumer Bill of Rights?
a. Bill Clinton
b. John F. Kennedy
c. Ralph Nader
d. Ronald Reagan
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e. George W. Bush
196. Which of the following is not a dimension of social responsibility and marketing citizenship?
a. Economic
b. Ethical
c. Legal
d. Technological
e. Philanthropic
197. The Federal Reserve Bank just issued its economic report on the U.S. economy for the quarter just ended. The
following are some of the key points mentioned in the report:
1. “Economic activity has continued to grow at a moderate pace since the last report.”
2. “Manufacturers report that business activity has picked up considerably in recent weeks.”
3. “Tourism activity has strengthened, no longer held back by harsh weather.”
4. “General merchandise retailers report that sales rebounded strongly in April and early May.”
5. “Retail contacts generally say that inventories are at satisfactory levels, that prices are mostly steady, and that the
degree of discounting is little changed from a year ago.”
Based on these economic forces, you can conclude
a. that the economy is entering the depression stage of the business cycle.
b. that the economy is in the prosperity stage of the business cycle and consumers’ buying power is declining.
c. that the economy is in the recession stage of the business cycle and consumers’ buying power is increasing.
d. that the economy is in the recession stage of the business cycle and consumers’ buying power is declining.
e. that the economy is in the prosperity stage of the business cycle and consumers’ buying power is increasing.
198. Why are marketers interested in consumers’ levels of disposable income?
a. It accurately predicts future buying power.
b. It increases current buying power.
c. It is what is left after taxes and savings to buy luxuries with.
d. It is a ready source of buying power.
e. It is essential for forecasting future business trends.
199. Budweiser, Heineken, Sam Adams, Corona, Guinness, and Miller are examples of __________ competitors in the
beverage industry.
a. brand
b. product
c. generic
d. total budget
200. When marketers define their target market, they simultaneously establish a set of
a. technologies.
b. monopolies.
c. competitors.
d. government regulations.
e. sociocultural forces.
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201. SiriusXM Radio is concerned about how the increasing use of smart phones will affect the future sales of its satellite
radio service. The company decides to gather information about the changing trends in music access and delivery to
prepare for this trend. Sirius XM’s process is called
a. environmental scanning.
b. target marketing.
c. surveying.
d. environmental analysis.
e. dynamic responsiveness.
202. Ethical choices in business situations are most often made
a. by top managers.
b. by front-line employees.
c. jointly in work groups and committees.
d. in consultation with family, friends, and coworkers.
e. individually.
203. ____ is (are) most likely to improve ethical behavior in a marketing organization.
a. Hiring goal-directed employees
b. Allowing employees to follow their own ethical standards
c. Encouraging employees to identify ethical issues and to decide what is right
d. Obeying the law and accepting all other behavior
e. Eliminating unethical individuals and improving the organization’s ethical standards
204. The Decca Electric Corporation produces light bulbs that are used in refrigerator manufacturing. Currently, only
three other companies produce bulbs used in the production of refrigerators, with Decca as the leader in market share. In
this case, Decca Electric Corporation would be considered
a. an oligopoly.
b. a monopoly.
c. involved in monopolistic competition.
d. involved in perfect competition.
e. involved in a perfect oligopoly.
205. Marketers resolve ethical issues based on their experiences and what they learn from others in the organization. The
outcome of this learning process depends upon _____________________, opportunity for unethical behavior, and
exposure to others who behave ethically or unethically.
This is an example of
a. their educational training
b. their level in the organization
c. their incentive plan
d. the strength of personal values
e. the monetary factors that influence ethical decision making
206. Which of the following statements about social responsibility is correct?
a. Social responsibility dimensions do not include philanthropic concerns.
b. Social responsibility does not deal with the total effect of all marketing decisions on society.
c. Social responsibility refers to a company’s obligation to maximize its positive impact and minimize its negative
impact on society.
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d. Social responsibility dimensions do not include economic concerns.
e. Social responsibility refers to principles and standards that define acceptable conduct in marketing as determined
by various stakeholders.
207. A cereal company advertises that its newly launched product can lower cholesterol although the company cannot
provide evidence to substantiate this claim. This situation involves an ethical issue related to which element of the
marketing mix?
a. Product
b. Pricing
c. Promotion
d. Distribution
e. Production
208. Your company is accepting proposals from a variety of consulting firms to assist in determining how the rapid
changes in technology will impact your firm’s future operations and profitability.
Which one of the following consulting firm proposals should you accept?
a. Accept Firm A’s proposal to complete a technology evaluation.
b. Accept Firm B’s proposal to complete a SWOT analysis.
c. Accept Firm C’s proposal to implement an information technology change management process.
d. Accept Firm D’s proposal to complete a technology assessment.
e. None of the proposals should be accepted.
209. A group of protesters carries signs encouraging people to boycott The Farmer’s Market, a small grocery store in an
urban area. The protesters claim that Farmer’s takes unfair advantage of elderly and minority consumers by charging them
as much as 20% higher prices than other locations in the suburbs. This protest is part of what we see today as the
a. cultural diversity movement.
b. civil rights movement.
c. urban unrest cycle.
d. procompetitive movement.
e. consumerism movement.
210. Textile companies historically face issues concerning the use of child labor in foreign countries and the various
regulations created concerning this labor. The type of marketing environment forces executives for these companies are
most likely to try to influence are ____ forces.
a. economic
b. competitive
c. political
d. environmental
e. sociocultural
Scenario 3.5. The Consumer Financial Protection Bureau settled a claim with the Bank of America for deceiving
customers and unfairly billing them for services such as credit monitoring and identity theft protection. Bank of America
agreed to provide refunds to 2.9 million people and pay $45 million in fines for their illegal credit card practices. Their
deceptive practices dated to 2000 where they had billed customers for products such as “Privacy Guard” or “Privacy
Assist” without first obtaining authorization for the products. The $45 million in fines includes $25 million as a civil
penalty that will be paid to the Office of the Comptroller of the Currency and $20 million to the Consumer Financial
Protection Bureau. The Bureau also claims that Bank of America deceived about 1.4 million customers into making about
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$268 million in payments by, among other things, improperly telling them the first 30 days of coverage were free or the
benefits were greater than existed.
211. Refer to Scenario 3.5. The Consumer Financial Protection Bureau is an example of:
a. federal regulatory agency
b. state regulatory agency
c. self-regulatory group
d. trade organization group
212. When a firm has many potential competitors and tries to develop a marketing strategy to differentiate its products
from the competitors’ products, a(n) ____ structure exists in the competitive environment.
a. oligopoly
b. monopoly
c. pure competition
d. oligopolistic competition
e. monopolistic competition
213. StarKist Tuna has frequently extolled its dolphin-safe methods of catching tuna. This is an example of
a. community relations.
b. cause-related marketing
c. sustainability marketing.
d. strategic philanthropy.
e. consumerism.
214. Raleigh Wood Products produces hardwood flooring, paneling, and other furniture-grade components. Raleigh Wood
traditionally has ground up its wood waste to make mulch, however, it has been brought to Raleigh’s attention that there
are chemicals from the paint and coloring process that may be harmful to the water table. Raleigh has now been looking
for ways to use its wood waste other than in mulch. Environmentalists would likely
a. appreciate that Raleigh Wood uses its leftover product, but rather they find a way to reduce waste altogether.
b. encourage Raleigh Wood to find another process for coloring and painting.
c. encourage the local government to levy a tax on Raleigh Wood for its contamination of the water system.
d. lobby against Raleigh Wood for its wasteful practices.
e. encourage Raleigh Wood to find materials other than wood for its products.
215. According to the consumer bill of rights, the right to be informed means that
a. consumers’ interests will receive full and sympathetic consideration in the formulation of government policy.
b. consumers should have access to a variety of goods and services at competitive prices.
c. consumers should have access to and the opportunity to review all relevant information about a product before
buying it.
d. marketers have an obligation not to knowingly market a product that could harm consumers.
e. consumers should be told when the quality of a product has changed.
216. Which of the following statements is false?
a. If an ethical or social responsibility issue can withstand open discussion that results in agreement or limited
debate, an acceptable solution may exist.
b. A company that supports both socially responsible decisions and adheres to a code of conduct is likely to have a
positive impact on society.
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c. If other persons in the organization approve of an activity and it is legal and customary within the industry,
chances are that the activity is acceptable from both an ethical and social responsibility perspective.
d. Social responsibility and marketing ethics are interrelated.
e. Social responsibility and marketing ethics are the same thing and can be used interchangeably.
217. Critics of the financial services industry, and Wall Street in particular, argue that a major cause of the financial crisis
of 2008 was the flawed compensation and incentive structure that exists in the industry. They argue that this incentive
structure encourages and often rewards unethical behavior by professionals in the industry.
This is an example of
a. the individual factors that influence ethical decision making.
b. the organizational relationship factors that influence ethical decision making
c. the opportunity factors that influence ethical decision making
d. the environmental factors that influence ethical decision making
e. the social factors that influence ethical decision making.
218. Which of the following statements is true?
a. Political officials can–not influence how much a government agency purchases and from whom.
b. The U.S. Supreme Court ruled that the government is not authorized to ban corporate spending in candidate
elections.
c. Company sponsored political advertising can only focus on topics and not on candidates.
d. Political officials can–not accept direct corporate campaign contributions.
e. Companies can-not participate in the political process through lobbying.
Scenario 3.2
Use the following to answer the questions.
Clayton Homes, a mobile home manufacturer since 1934, introduced its new i-House in 2007. The i-House is one of the
first of its kind, designed as an updated, modern version of the modular home, offered as a base home plus add-ons known
as “pods.” The base home is a one-bedroom, one-bath 734-square foot version at a price of around $80,000. There is also
a 1,000 square-foot version for around $100,000. All versions may add on the additional one-room pods as desired which
are shipped to your location and constructed on-site. The homes offer galvanized metal roofing, corrugated steel siding,
VOC-free paints, and a “butterfly” roof that collects rainwater. The i-House uses 30% less energy than a similar square-
foot home and offers “green” characteristics of solar panels, tankless water heaters, and low-flow faucets. In addition, it
comes with bamboo flooring, a renewable resource. The modular, pre-fabricated design offers endless options for creating
the customer’s home and its engineered building system cuts down on construction waste. Due to the “green effects” of
the i-House, the state governments have given it a tax abatement for any sales taxes.
219. Refer to Scenario 3.2. The i-House’s reduction of energy use, renewable resources as materials, “pod” customization,
reduction of construction waste, and tax abatement status is/are examples of reaction to which environmental forces?
a. political and sociocultural.
b. political, sociocultural, economic.
c. sociocultural and economic.
d. political and economic.
e. political, economic, sociocultural, and technological.
220. Which of the following statements about codes of conduct is true?
a. All publicly-traded companies have formal codes of conduct.
b. Most large corporations have formal codes of conduct.
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c. Codes of conduct are unnecessary for small- and medium-sized companies.
d. Approximately half of large companies have formal codes of conduct.
e. Very few companies have formal codes of conduct, but most have informal codes.
Scenario 3.3
Use the following to answer the questions.
Hershey Foods was founded in the nineteenth century by Milton Hershey, who had a strong ethical value system⎯always
show integrity, be honest, and respect others. Hershey felt it was important to provide high-quality goods and services of
real value at competitive prices that provide an adequate return on investment. He also founded the Milton Hershey
School, operating today as a cost-free, private home and school dedicated to helping children with social needs and
limited resources. The company also focuses on environmental issues, such as reducing waste by 360,000 pounds
annually by redesigning Hershey’s Syrup caps. Hershey Foods has an ethics compliance program that includes a code of
ethics and training, guidelines for handling legal and ethical issues, an 800 number for assistance with ethical issues, and
support from supervisors and human resource managers in dealing with ethical issues. However, in the last few years,
Hershey has been criticized by several advocacy groups concerning the sourcing of its chocolate from West Africa where
many of the companies use child labor. While Hershey is the largest chocolate candy producer in America, it lags behind
other major chocolate producers with regard to certifying its chocolate as child labor-free.
221. Refer to Scenario 3.3. Hershey and its employees benefit in many ways from its strong ethics compliance program.
Which of the following is not one of the benefits of such a program?
a. Enforcement and discipline of ethical infractions
b. Better employee understanding of ethical issues
c. Free-flowing communication within the firm regarding ethical issues
d. Costly programs to develop and maintain
e. High level of organizational guidance for employees
222. Scott Stevens is managing director for Northeastern Mutual Company, a financial services firm specializing in
retirement programs, college savings programs, and life insurance services. Scott firmly believes that dress and grooming
are important elements in creating a positive first impression and provides training to his account managers regarding the
dress code and grooming policy. Northeastern does not allow any facial hair for men and stresses that women should pull
their hair back away from their face. Research has shown that people view men with facial hair as dishonest and believe
that they might be hiding something. Facial hair is also associated with criminal activity as a higher proportion of men
who are arrested for violent actions have facial hair. In addition, a woman who wears their hair in a style that covers their
face also has been shown to be perceived as dishonest. Scott reminds his employees to wear white shirts because the
“good guys” always wear white. The Northeastern Mutual Company dress and grooming policies are an example of the
importance of ______ in influencing ethical decision-making.
a. corporate culture
b. opportunity
c. appearance
d. personal values
223. UPS is considering its distribution strategy for the next five years. As part of the strategy development, UPS is
investigating the use of radio frequency identification, consumer payments through smart phones, Facebook, and Twitter
and how they might use these to interface with their customers. UPS is most likely engaging in
a. product differentiation.
b. monopolistic competition.
c. technology assessment.
d. distinctive promotional methods.
e. innovative marketing.
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224. Target’s Take Charge of Education program donates 1 percent of a customer’s total purchase to the school of his or
her choice. What social responsibility issue does this program address?
a. Consumerism
b. Marketing ethics
c. Community relations
d. The natural environment
e. Promotion
225. Which of the following is not at the generic competitor level for Ford’s Expedition sport utility vehicle?
a. Ford’s Escape SUV
b. Enterprise car rental
c. Harley Davidson motorcycle
d. Schwinn mountain bike
e. Taxi cab ride
226. Amanda believes that the corporate culture at her company is best conveyed in informal ways. What are some
informal ways that corporate culture is most likely to be expressed?
a. Codes of conduct and ethics officers
b. Memos and cultural manuals
c. Work habits and dress codes
d. Extracurricular activities and work habits
e. Ceremonies and anecdotes
227.
Although the monopoly is one of the four major market structures that theoretically exists in a free market capitalist
system, the reality is there are very few true monopolies in the economy. This is the result of many federal laws and
regulations that have been passed to limit the creation and power of monopolies.
Which one of the following federal laws was passed to prevent the creation of monopolies in the economy?
a. Sherman Act of 1890
b. Securities Act of 1933
c. Sarbanes-Oxley Act of 2002
d. Wheeler-Lea Act of 1938
e. Lanham Act of 1946
228. The Coca-Cola Company has recognized the significant increase in population diversity within the U.S. soft-drink
market. Which one of the following best illustrates the company’s integration of this knowledge into its marketing
strategy?
a. Ads featuring nostalgic Americana
b. Bonus coupons in Coca-Cola twelve-packs
c. Ads featuring Hispanic actors and Tejano music
d. Ads in The New Yorker and Reader’s Digest
e. Ads aimed at children
229. ________________ promote ethical behavior by reducing opportunities for unethical behavior; employees know
what is expected of them and what kind of punishment waits if rules are violated.
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a. Mission statements
b. Corporate objectives
c. Human resources policies
d. Codes of conduct
e. Compensation plans
230. ____ are formalized rules and standards that describe what a company expects of its employees in terms of ethical
behavior.
a. Job descriptions
b. Ethics clauses
c. Behavior contracts
d. Codes of conduct
e. Ethics contracts
231. Product testing for reliability and quality helps to ensure a consumer’s right to
a. be heard.
b. be informed.
c. choose.
d. performance.
e. safety.
232. Lindsay was reviewing her bank statement for last month. She had paid her rent, her car payment, electric and phone
bills, and made three trips to the grocery. Lindsay had also bought tickets to a Katy Perry concert and new clothes to wear
to the concert. The money spent on Lindsay’s rent, car, electric and phone bills was likely from her ____ , while the
money spent on the concert tickets and new clothes was from her _____.
a. Disposable income; savings
b. Gross income; disposable income
c. Disposable income; net income
d. Disposable income; discretionary income
e. Gross income; Savings income
233. The Reputation Institute rates the social responsibility of the largest global corporations in the world. They assign a
proprietary CSR rating to each company based surveys of 47,000 consumers worldwide.
In a recent annual ranking, Microsoft Corporation was ranked #1 for social responsibility. Regarding the ranking, the
following is a quote from Microsoft’s Senior Director of Citizenship and Public Affairs:
“I think this is really a testament to our employees worldwide and the difference they make in their local communities.
While we have a small Citizenship team here at the corporate level, we have Citizenship Leads across the globe and they
work daily in collaboration with a wide range of stakeholders on a range of issues important to local communities.”
Which of the following terms best describes Microsoft’s approach to corporate social responsibility?
a. Marketing citizenship
b. Cause-related marketing
c. Stakeholder orientation
d. Strategic philanthropy
e. Consumerism
234. When using credit to make purchases, consumers are
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a. decreasing current buying power and increasing future buying power.
b. increasing their present discretionary income to extend purchasing power.
c. putting themselves at significant risk of financial disaster.
d. forgoing the accumulation of wealth to increase current income.
e. increasing current buying power at the expense of future buying power.
235. By the turn of the twentieth century, the population of the United States had shifted to three large racial and ethnic
groups. These groups are
a. African-Americans, Hispanics, and Caucasians.
b. Asians, African-Americans, and Caucasians.
c. Asians, African-Americans, and Hispanics.
d. African-Americans, Native American Indians, and Caucasians.
e. Hispanics, Native-American Indians, and Caucasians.
Scenario 3.1
Use the following to answer the questions.
Meyers’ Sporting Goods, a national chain, has been doing business with Soljur Sports, a manufacturer of skateboards, for
several years. Recently, it came to the attention of Meyers’ financial director that the average cost per Soljur Sports
skateboard had substantially increased over that of the previous year. The financial director asked the marketing
department if they knew what the Soljur skateboards cost at competing sporting goods stores, to see if they too were likely
hit with a higher cost.
The marketing department found that the Soljur skateboards were priced at $15 less in the competing store than at
Meyers. The financial director found that Soljur Sports was selling a similar number of skateboards to one of Meyers’
competitors for $10 less per skateboard. The attorney for Meyers’ Sporting Goods immediately filed a complaint with the
Federal Trade Commission.
236. Refer to Scenario 3.1. A regular customer of Meyers Sporting Goods feels that some of its advertisements are
deceptive. He responded to an ad for sale skateboards one hour after the store opened and found that none were left.
Where should he file a complaint?
a. Federal Advertising Commission
b. National Advertising Review Board
c. Consumer Product Safety Commission
d. Better Business Bureau
e. Office of Consumer Affairs
237. Refer to Scenario 3.1. Suppose that a customer has a complaint against Meyers Sporting Goods Stores. He files a
complaint with the Better Business Bureau. What action could the BBB take against Meyers if the complaint was
substantiated and Meyers did not change the offending practice?
a. Issue a cease-and-desist order.
b. Seek a $10,000 monetary penalty.
c. Issue a warning to consumers through the local newspaper.
d. Order Meyers to make restitution.
e. Seek a $5,000 monetary penalty.
238. Various stakeholders and ____ determine the acceptable standards of conduct involving ethics.
a. the organizations’ ethical climate
b. the federal government
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c. various self-regulating bodies
d. governmental agencies
e. the industry leaders’ ethics
239. In response to organizational pressure to perform, Barry used a deceptive sales tactic to obtain a major sales contract.
He was surprised that he wasn’t punished for his behavior and even received a substantial bonus for securing the contract.
Given the same opportunity in the future, Barry will most likely
a. blow the whistle on his employer to a government agency.
b. report his employer to the industry’s trade association.
c. express his discomfort with the situation to his supervisor.
d. not use similar sales tactic again.
e. use similar sales tactic again.
240. The Children’s Online Privacy Protection Act prohibits websites and Internet providers from
a. selling products to children under the age of 18
b. seeking personal information from children under the age of 13
c. selling products to children under the age of 12
d. doing research about the buying habits of children under 15
e. selling products to children under the age of 15
241. The Guitar Center traces its roots to 1959 when Wayne Mitchell opened a home organ store in California. In 1964,
the company began selling guitars and amplifiers and changed its name to The Guitar Center. The company added stores
gradually and today is known as the largest musical instrument retailer in the world. The company continues to grow and
maintains over 250 stores across the United States. According to their website, “Guitar Center is home to the world’s
largest selection of popular guitars, basses, amplifiers, keyboards, workstations, drums, percussion, microphones, PA
systems, DJ equipment, stage lighting, recording software, studio gear and more.” Assume that you are one of the brand
managers for a line of products such as guitars or keyboards. Which of the following would be most important to you in
assisting you to forecast sales and plan inventory levels for the chain of stores?
a. consumers’ discretionary income
b. consumers’ wealth
c. consumers’ debt
d. consumers’ disposable income
242. The broad nature of technology as it moves through society is referred to as
a. reach.
b. dynamics.
c. environment.
d. self-sustaining.
e. impact.
243. Priya knows that her company has a formal code of conduct, but she does not see this code being equally and
consistently applied to all employees. Priya believes that this sporadic enforcement of the formal code only enhances the
____ for committing unethical acts.
a. opportunity
b. culture
c. individual factors
d. compliance
e. punishment
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244. Kaitlyn understands that even small businesses like her local catering business have certain responsibilities to
society. She knows that she must abide by the laws that apply to her business and try to make a profit. What are the other
obligations Kaitlyn should know?
a. Ethical and moral
b. Economic and ethical
c. Philanthropic and legal
d. Environmental and ethical
e. Ethical and philanthropic
245.
The following are some predictions from Smithsonian Magazine regarding the future sociocultural dynamics in the world:
1. The United States population will expand by 100 million.
2. The portion of the population that is currently at least 65 years old is expected to increase from 13 percent to 20
percent by 2050 in America.
3. By 2050, the working age group of people between 15 and 64 years old is expected to grow by 42 percent in the
United States, but decline by 10 percent in China, 25 percent in Europe, 30 percent in South Korea and 40 percent
in Japan.
With respect to these predictions, which one of the following statements is true?
a. All of these predictions refer to population demographic characteristics.
b. By 2050, the United States will have proportionately less workers in its population than Japan will have.
c. If these predictions come true, the average age of the populations of Japan and South Korea will be lower than
the United States.
d. If these predictions come true, there will be less of a strain on environmental resources in the years to come.
e. Based on these predictions, it is expected that the average age of the population in the United States will be lower
in 2050 than it is today.
246. According to President Kennedy’s consumer bill of rights, the right to choose means that
a. consumers’ interests will receive full and sympathetic consideration in the formulation of government policy.
b. consumers should have access to a variety of products and services at competitive prices.
c. consumers should have access to and the opportunity to review all relevant information about a product before
buying it.
d. marketers have an obligation not to knowingly market a product that could harm consumers.
e. consumers should be able to buy products at prices they are willing to pay.
247. Marketers who view political forces as being beyond their control are taking a(n) ____ response toward these forces.
a. reactive
b. aggressive
c. proactive
d. competitive
e. liberal
248. How would marketers most likely benefit from the consumer’s right to be heard?
a. Consumers will also tell others about their bad experience with the company.
b. The company can use the information to make its products better.
c. They gain valuable information about their competitors.