Chapter 1 Marketing in Today’s Economy
MULTIPLE CHOICE
1. Among the fundamental changes to marketing and business practice in today’s economy is the
dramatic increase in the availability of information. This increase in information has created a shift in
the balance of power in the supply chain. Who now holds most of the power in today’s economy?
a.
retailers
d.
manufacturers
b.
wholesalers
e.
market research firms
c.
customers
2. __________ is the curse of mature markets whereby products lack any real means of differentiation
and customers see competing products as offering roughly the same benefits.
a.
Specialization
d.
Price devaluation
b.
Commoditization
e.
Market homogeneity
c.
Maturation
3. Which of the following changes occurring in today’s economy has NOT been caused by the growth of
the Internet?
a.
increase in product selection
d.
rising prices for most products
b.
shifting demand patterns
e.
audience and media fragmentation
c.
privacy and security concerns
4. Although mass media audiences are becoming increasingly fragmented, media fragmentation does
have a major advantage. What is this advantage?
a.
It now costs less to reach a mass audience.
b.
It is much easier to measure feedback from mass media audiences.
c.
It is now easier to reach small, highly targeted audiences.
d.
Consumers are now much more receptive to television advertising.
e.
Consumers are now highly susceptible to online advertising.
5. Changing value propositions in today’s economy—such as changes caused by the growth in
e-commerce—have forced marketers to learn a tough lesson about customers. What is that lesson?
a.
Customers will always seek the best value regardless of quality.
b.
Customers will always turn to the most recognized brand.
c.
Customers would rather perform service for themselves to save money.
d.
Customers will turn to the most convenient, least expensive alternative in situations where
they see goods and services as commodities.
e.
Customers will always seek the best quality regardless of price.
6. One of the major difficulties of conducting business in today’s economy concerns the unclear legal
jurisdiction surrounding many business transactions. The issue is especially keen for marketers who do
business in:
a.
international markets.
d.
metamarkets.
b.
domestic, interstate markets.
e.
peer-to-peer transactions.
c.
business-to-business markets.
7. In 2005, the American Marketing Association changed the definition of marketing that had stood for
20 years. The major changes in the definition included a shift from delivering the 4 Ps (product, price,
place, promotion) to delivering __________ and a shift from creating exchanges to creating
__________.
a.
satisfaction; customer relationships
d.
value; satisfaction
b.
value; customer relationships
e.
quality; value
c.
quality; transactions
8. A cluster of closely related goods and services that center around a specific consumption activity is
referred to as a:
a.
marketspace.
d.
marketing channel.
b.
market.
e.
metamarket.
c.
metamediary.
9. Edmunds.com provides a collection of online services and information pertaining to the automotive
market. Edmunds offers reviews, free pricing reports, discussion boards, and links to a variety of car
manufacturers, dealers, insurance companies, and finance companies. What role does Edmunds.com
play in today’s economy?
a.
distributor
d.
metamarket
b.
marketspace
e.
electronic broker
c.
metamediary
10. Which of the following IS NOT one of the five conditions of exchange in marketing?
a.
There must be at least two parties to the exchange.
b.
Each party has something of value to offer the other party.
c.
Each party must be free to accept or reject the exchange.
d.
Each party must be capable of immediate delivery.
e.
Each party believes that it is desirable to exchange with the other party.
11. A customer’s decision to purchase one product or group of products over another is primarily a
function of:
a.
the convenience of acquiring the product or group of products.
b.
how well that choice will fulfill that person’s needs and satisfy his or her wants.
c.
the product’s features relative to competing products.
d.
the product’s price.
e.
the availability of the product or group of products.
12. A product that provides the utmost in convenience is said to offer exceptional:
a.
time and place utility.
d.
form and time utility.
b.
place and possession utility.
e.
form and place utility.
c.
time and possession utility.
13. Furniture Mart offers services such as financing and home delivery to its customers. What type of
utility is Furniture Mart trying to increase?
a.
time utility
d.
form utility
b.
place utility
e.
psychological utility
c.
possession utility
14. What type of planning deals with specific markets or market segments and the development of
marketing programs that will fulfill the needs of customers in those markets?
a.
market planning
d.
lower-level planning
b.
strategic planning
e.
tactical planning
c.
local planning
15. __________ involves the analysis of economic, political, legal, technological, and cultural events and
trends that may affect the future of the organization and its marketing efforts.
a.
Competitive intelligence
d.
Marketing research
b.
Environmental scanning
e.
External analysis
c.
Tactical planning
16. Many firms attempt to distinguish or differentiate their product offerings through the use of
__________ strategies. This involves establishing a mental image of the product offering relative to
competing offerings in the minds of target buyers.
a.
product positioning
d.
image marketing
b.
branding
e.
comparative
c.
perceptual marketing
17. Which of the following statements about pricing decisions in the marketing program is TRUE?
a.
Price is one of two elements of the marketing mix that leads to revenue.
b.
Price has a direct connection with customer demand.
c.
Pricing is the least manipulated element of the marketing mix.
d.
Pricing is the most difficult element of the marketing mix to change.
e.
Customers will always equate higher prices with higher quality products.
18. In the traditional transactional marketing approach, the ultimate goal of marketing is to:
a.
serve customers’ needs and wants.
b.
develop long-term customer relationships.
c.
create value in the buyer-seller relationship.
d.
acquire new customers and complete a large number of exchanges.
e.
All of the above are goals of transactional marketing
19. All of the following are reasons for the general decline in customer satisfaction over the past 20 years
EXCEPT:
a.
Customers are much less brand loyal than in the past.
b.
Today’s customers are very price sensitive.
c.
Today’s customers are exceptionally demanding.
d.
Product quality is much lower now than at any time in the past.
e.
Customers are more cynical, have more information, and have more attitude than ever
before.
20. In the airline industry, companies like American, Delta, and US Air have a difficult time competing
because their industry has become commoditized. What does this mean for firms in the airline
industry?
a.
Airline firms compete in a declining industry.
b.
Airline customers have become increasingly demanding.
c.
There is very little differentiation among product offerings in the industry.
d.
The industry experiences very little change over time.
e.
Airlines have been forced to develop partnerships to remain competitive.
ESSAY
1. The text discusses seven challenges and opportunities associated with marketing in today’s economy.
Identify these issues and discuss how they are related. What is the common thread that ties all seven
issues together?
2. Discuss the different views or interpretations of marketing as a function of business, including the
AMA’s 2007 change in the definition of marketing. Why do you think the AMA changed the
definition?
3. Briefly explain and discuss the five types of utility. Which type(s) of utility is(are) the most important
and why?
4. With respect to the strategic planning process, why has social responsibility and marketing ethics
become important today? Is it really necessary to consider these issues in strategic planning? How can
a firm plan to be socially responsible?
5. Discuss the challenges and opportunities associated with planning and developing marketing strategy
in today’s economy. Why is marketing strategy both exciting and challenging?