Chapter 04: The Marketing Environment
82. Explain the concept of a marketing mix.
Answers will vary. Inflation is a measure of the decrease in the value of money, generally expressed as the
percentage reduction in value since the previous year, which is the rate of inflation. Thus, in simple terms, an
inflation rate of five percent means you will need five percent more units of money than you would have
needed last year to buy the same basket of products. If inflation is five percent, you can expect that, on
average, prices have risen by about five percent since the previous year. Of course, if pay raises are matching
the rate of inflation, then employees will be no worse off in terms of the immediate purchasing power of their
salaries.A recession is a period of economic activity characterized by negative growth. More precisely, a
recession is defined as occurring when the gross domestic product falls for two consecutive quarters. Gross
domestic product is the total market value of all final goods and services produced during a period of time.
79. Discuss the relationship between businesses and governments.
Answers will vary. Business needs government regulation to protect innovators of new technology, the
interests of society in general, one business from another, and consumers. In turn, government needs business
because the marketplace generates taxes that support public efforts to educate our youth, pave our roads,
protect our shores, and the like.Every aspect of the marketing mix is subject to laws and restrictions. It is the
duty of marketing managers or their legal assistants to understand these laws and conform to them, because
failure to comply with regulations can have major consequences for a firm. Sometimes just sensing trends
and taking corrective action before a government agency acts can help avoid regulation.
80. List and explain the four core values that have strongly influenced American attitudes and lifestyles.
Answers will vary. The four basic values that have strongly influenced American attitudes and lifestyles are
self-sufficiency, upward mobility, work ethic, and conformity.
• Self-sufficiency: Every person should stand on his or her own two feet.
• Upward mobility: Success would come to anyone who got an education, worked hard, and played by
the rules.
• Work ethic: Hard work, dedication to family, and frugality were moral and right.
• Conformity: No one should expect to be treated differently from anybody else.
81. List and discuss six approaches that are used by companies now to stimulate innovation.
Answers will vary. The six approaches that are used by companies now to stimulate innovation are the
following:
• Building scenarios: Some firms use teams of writers to imagine detailed opportunities and threats for
their companies, partners, and collaborators in future markets.
• Enlisting the Web: A few companies have created Web sites that act as literal marketplaces of ideas
where innovators can go to look for help with scientific and business challenges.
• Talking to early adopters: Early adopters tend to be innovators themselves. They are risk takers and
look for or wish for something better to help in daily tasks at home and work.
• Using marketing research: Firms find out what customers like and dislike about their products and
competitors’ products.
• Creating an innovative environment: Companies let employees know that they have the freedom to