58. Blogs created by consumers can be used to assess customer attitudes toward new products as well as
customer perceptions of new products. Marketers’ ability to search for key words used in the blogs is
an example of a change in the _____ factor of the external environment.
a.
psychographic
b.
technological
c.
competitive
d.
demographic
e.
economic
59. In the future, electrical power may come from quantum nucleonics, a form of nuclear power that
produces no residual radiation. The ability to use this form of power will require equipment
adaptations, but it will solve the world’s need for clean and efficient power. When quantum nucleonics
is developed, it will be an example of how _____ factors can affect an organization.
a.
technological
b.
competitive
c.
economic
d.
cultural
e.
demographic
60. Commercial truck drivers have really suffered financially as a result of increasing diesel fuel. As they
look for ways to make their trucks perform more efficiently, manufacturers have created truck body
designs that are more aerodynamically sound. This is an example of how _____ factors can help
during recessionary periods.
a.
technological
b.
competitive
c.
economic
d.
cultural
e.
demographic
61. Almost any product in India, from tap water to milk, has traces of toxins due to the overuse and misuse
of insecticides by Indian farmers, but the government expects multinational corporations (MNCs)
operating in India to produce food that is toxin-free. In this way both _____ factors influence the
operating environment for foreign firms.
a.
social and technological
b.
legal and technological
c.
economic and legal
d.
economic and social
e.
technological and demographic
62. The two types of research are:
a.
basic and applied
b.
primary and secondary
c.
profit and not-for-profit
d.
domestic and global
e.
basic and advanced
63. Which type of research is also called pure research and attempts to expand the frontiers of knowledge
but is not aimed at a specific, pragmatic problem?
a.
applied
b.
basic
c.
primary
d.
secondary
e.
synergistic
64. Juan is a marketing professor researching consumer decision-making processes. Specifically, he is
examining if including a picture in a print advertisement is more effective than not including a picture
in influencing readers’ attitude toward the advertisement and brand advertised. He is not researching
any specific brand, but rather he is interested in testing Dual Coding theory that predicts that pictures
will have a more positive impact on attitudes. Juan is conducting _____ research.
a.
secondary
b.
basic
c.
applied
d.
complex
e.
synergistic
65. Which type of research attempts to develop new or improved products?
a.
basic
b.
synergistic
c.
secondary
d.
primary
e.
applied
66. A marketing researcher is conducting a focus group interview with a group of working mothers to
learn how Kraft can better meet their needs for convenience foods. What type of research does this
represent?
a.
basic
b.
applied
c.
secondary
d.
synergistic
e.
idiosyncratic
67. Which of the following was ranked as the world’s most innovative company?
a.
3M
b.
Intel
c.
Apple
d.
Wal-Mart
e.
Procter & Gamble
68. Laws and regulations of various governments and their ongoing development and change are an
example of _____ factors that are part of all organizations’ external environment.
a.
economic investment
b.
political and legal
c.
research and development
d.
competitive
e.
demographic
69. When Universal Studios Japan opened, health inspectors discovered the theme park had piped
industrial use water not suitable for drinking into its drinking fountains. The problem was
unanticipated and costly to repair. This is primarily an example of how _____ factors can cause a
business to incur unexpected costs.
a.
social
b.
economic
c.
competitive
d.
cultural
e.
political and legal
70. Every night Universal Studios Japan hosts a fireworks display. The theme park recently came under
government investigation when allegations were made that the park was detonating more than 50
pounds of explosives in its nightly fireworks displays. In the small nation, the use of explosives is
stringently controlled. This is an example of how _____ factors can influence a business.
a.
competitive
b.
legal and political
c.
economic
d.
technological
e.
cultural
71. One of the results of the Americans with Disabilities Act is an increase in the numbers of disabled
travelers. Publications like Emerging Horizons, a California-based, 25,000-circulation magazine focus
on accessible travel, and businesses, such as Mobility Challenged Vacations Ltd., see that disabled
tourists are a growing market. One can argue the increase in tourism by the disabled was due to:
a.
controllable elements within corporate structures
b.
legal forces that changed the attractiveness of vacation options
c.
macroeconomic conditions that made U.S. destinations more competitive relative to
international spots
d.
a shift in regulatory controls from the public sector to the private sector
e.
competitive forces that changed how disabled tourists perceive vacations
72. China’s new 5 percent tax on disposable wooden chopsticks, reflecting concerns about deforestation,
has been praised by environmentalists. The move is hitting hard at the Japanese who consume 25
billion sets of wooden chopsticks annually. Almost all of the chopsticks used in Japan come from
China. The requirement for Chinese manufacturers of wooden chopsticks to pay the 5 percent tax is a
_____ factor in their external environment.
a.
competitive
b.
social
c.
demographic
d.
technological
e.
legal
73. The _____ Act strengthened the Clayton Act to prevent corporate acquisitions that reduce competition.
a.
Hart-Scott-Rodino
b.
Lanham-Scott
c.
Celler-Kefauver Antimerger
d.
Robinson-Patman
e.
Sherman
74. A cold medicine manufacturer offers a promotion allowance to retailers for setting up displays
featuring its products. Retailers are also offered promotional allowances on purchases of the products.
Which legislation requires the manufacturer to make these promotion allowances available to all
retailers on a proportionately equal basis?
a.
Hart-Scott-Rodino Act
b.
Sherman Act
c.
Celler-Kefauver Antimerger Act
d.
Robinson-Patman Act
e.
Lanham Act
75. _____ is a governmental body that has the power to prescribe mandatory safety standards for almost
all products consumers use.
a.
Health and Welfare Agency
b.
Federal Trade Commission
c.
Food and Drug Administration
d.
Federal Communications Commission
e.
Consumer Product Safety Commission
76. Alex purchased a battery-operated drill, and the first time he used the drill, the battery pack overheated
and exploded. After Alex’s trip to the emergency room, it was determined that the explosion was due
to a problem with how the drill was manufactured. Alex would like to lodge a complaint about the
poor quality of the drill’s construction. To which federal agency should he complain?
a.
Labor Department
b.
Food and Drug Administration
c.
Federal Trade Commission
d.
Department of Trade
e.
Consumer Product Safety Commission
77. The _____ is an agency that prevents the use of unfair methods of competition in commerce.
a.
Federal Communications Commission
b.
Commerce Department
c.
Commission for Fair Trade
d.
Federal Trade Commission
e.
Sherman Antitrust Agency
78. Many people drink bottled water today, but one national brand of bottled water was not “spring-fresh”
as advertised. The water actually came from a well located in the middle of an industrial warehouse
facility and next to a industrial waste site. To which organization should the consumers who thought
the advertising for the bottled water was misleading complain?
a.
Consumer Product Safety Commission
b.
Food and Drug Administration
c.
Federal Trade Commission
d.
Federal Communications Commission
e.
Consumer Protection Agency
79. The _____ is the federal government agency charged with enforcing regulations against selling and
distributing adulterated, misbranded, or hazardous products of a specific type.
a.
Federal Trade Commission
b.
Consumer Product Protection Commission
c.
U.S. Justice Department
d.
Food and Drug Administration
e.
American Safety League
80. All of the following are powers of the Federal Trade Commission EXCEPT:
a.
restitution
b.
corrective advertising
c.
corporal punishment
d.
consent decree
e.
cease-and-desist order
81. When the Federal Trade Commission (FTC) issues a final directive to a firm to stop engaging in an
activity the FTC considers illegal, this directive is a(n):
a.
order to remand
b.
stopgap measure
c.
order of cessation
d.
cease-and-desist order
e.
corrective action order
82. The Federal Trade Commission (FTC) accused Campbell Soup of deceptive advertising because the
soup company’s advertising showed bowls of soup that appeared to be full of meat, vegetables, and
noodles. The appearance of the soup was altered by the placing of glass marbles in the bottom of the
bowl, which caused the ingredients to rise to the top of the bowl. The FTC would have issued a(n)
_____ to make Campbell stop running the deceptive ad.
a.
affirmation order
b.
cease-and-desist order
c.
order to remand the promotion
d.
order of cessation
e.
stopgap measure
83. Sometimes the Federal Trade Commission (FTC) will require an advertiser to include in its
advertisements additional information about the products being promoted. This is to clarify past
statements the FTC believes were misleading or unfairly presented to consumers. This practice is
called:
a.
nonfinancial restitution
b.
affirmative disclosure
c.
a mandated promotion
d.
corrective advertising
e.
a decree of consensus
84. When the Federal Trade Commission (FTC) uses the term “restitution,” it means:
a.
all advertisements must be restored to a truthful, nondeceptive format
b.
refunds must be made to consumers who were misled by deceptive advertising
c.
a certain portion of the advertising budget must be allocated to advertisements that explain
why previous ads were misleading
d.
the manufacturer must delete the offending product from its product mix
e.
new, corrected products must be sent to the consumers
85. The Gramm-Leach-Bliley Act is an important law designed to:
a.
protect the channels of commerce
b.
restrict alcohol and tobacco advertising
c.
eliminate certain products from being advertised on children’s television programs
d.
protect consumers from identity theft
e.
penalize marketers selling merchandise with counterfeit brand names
86. When Miriam went to the specialist, she was asked to sign several official forms that the receptionist
handed her so that her primary care doctor could be given the results of her medical examination. The
law that requires her permission for the physician’s office to hand out personal information about her is
the result of legislation determined to:
a.
protect the channels of commerce
b.
restrict medical advertising
c.
eliminate health services from local jurisdiction
d.
protect consumers from identity theft
e.
penalize marketers for selling unwanted services
87. The number of firms a company must face, the relative size of these firms, and the degree of
interdependence within the industry are all part of its _____ environment.
a.
demographic
b.
economic
c.
political
d.
competitive
e.
social
88. Frito-Lay is considered the king of the salty snack industry with its distribution network of 42 plants,
12,800 delivery people, and more than 900 tractor trailers formed into a retail delivery powerhouse.
Smaller manufacturers of salty snacks find that monitoring the activities of Frito-Lay is an effective
way to monitor the _____ factors within their external environments.
a.
bureaucratic
b.
marketing mix
c.
competitive
d.
social
e.
demographic
89. Abetta, Royal King, Kincade, EquiRoyal, and Amadeus are all manufacturers and marketers of
Western-style saddles for horses. Thus, the manufacturers are _____ factors in each other’s external
environments.
a.
component lifestyle
b.
competitive
c.
economic
d.
social
e.
legal and regulatory
90. When many consumers think of adhesives, they think of 3M because it makes so many kinds of
adhesives used in the home. However, the world’s largest adhesive producer is Henkel Consumer
Adhesive, maker of Loctite and Duct tape. 3M and Henkel are part of each other’s _____ environment.
a.
competitive
b.
economic
c.
social
d.
marketing mix
e.
legal and political
NARRBEGIN: E-cigarettes
E-cigarettes
Smoking inflames non-smokers and claims the lives of more than 400,000 smokers each year, so the
electronic cigarette is a welcomed alternative. Electronic cigarettes, called e-cigarettes, are battery-
powered devices that emit a vapor from nicotine, flavorings, and other chemicals. It looks like a
cigarette and allows smokers to inhale the nicotine vapor in places where smoking is not allowed. The
product has been touted as a means to quit smoking as well. However, critics, especially the Food and
Drug Administration, claim that “vaping” poses risks. In fact, the FDA claims its tests revealed a toxic
chemical that is found in anti-freeze as well as other carcinogens. The FDA blocked a shipment of the
product from China and banned the sale of this product in the United States. In addition to the safety
issue, the FDA is concerned that children might be attracted to this product because they come in
flavors other than traditional menthol, such as bubble gum, chocolate, and strawberry. The FDA wants
this product to go through the same rigorous testing that drugs must go through before being marketed.
However, the FDA’s authority over this product is questioned. While Congress has recently given the
FDA authority over tobacco products, this is not a tobacco product and the Electronic Cigarette
Association is fighting the ban.
NARREND
91. Refer to E-cigarettes. E-cigarette manufacturers claim they are not trying to sell this product to
children. Rather, they are offering an alternative to combustible tobacco for committed smokers.
These smokers comprise the manufacturers’:
a.
target market
b.
buying center
c.
consumer cluster
d.
demographic sample
e.
mass market
92. Refer to E-cigarettes. In 1964, 42% of Americans smoked, but now that rate has dropped below 20%.
Which environmental factor has had the greatest impact on this trend?
a.
technological factors
b.
economic factors
c.
competitive factors
d.
demographic factors
e.
social factors
93. Refer to E-cigarettes. Marketers of the e-cigarette claim that they are not marketing the product to
children, particularly because a starter kit costs over $100. Which economic factor are the marketers
claiming will likely keep this product out of the hands of children?
a.
income
b.
inflation
c.
recession
d.
purchasing power
e.
interest rates
94. Refer to E-cigarettes. The e-cigarette has been heralded as an innovative product that serves a need for
smokers by helping them quit the habit. This innovative product was developed from changes in
which environment?
a.
demographic
b.
technological
c.
economic
d.
social
e.
competitive
95. Refer to E-cigarettes. The FDA is part of which environmental factor affecting the marketing of this
product?
a.
demographic
b.
technological
c.
political and legal
d.
competitive
e.
economic
NARRBEGIN: Dog Spa
Dog Spa
Kelly Tumlin wants to open a dog grooming salon that will offer healthy, natural pet care and holistic
pet products. All of the products sold at the salon will be of the highest quality and made of all-natural
ingredients.. Tumlin wants to pamper pets just like a spa pampers their owners. To determine the
feasibility of the grooming salon, Tumlin hired a marketing researcher who studied all the market
information available and determined that single, white-collar workers between the ages of 30 and 60
were the most likely people to use the services proposed by Tumlin. The researcher also determined
the west side of the city offers the best location for the enterprise even though zoning regulations are
much stricter in that area.
NARREND
96. Refer to Dog Spa. The group of consumers identified by the researcher as most likely to avail
themselves of the services offered by Tumlin’s grooming salon is called a:
a.
target market
b.
buying center
c.
mass market
d.
consumer cluster
e.
demography
97. Refer to Dog Spa. The fact that people would actually treat their dogs to a luxurious spa treatment
reflects a change in _____ factors within the external environment.
a.
demographic
b.
social
c.
technological
d.
geographic
e.
political
98. Refer to Dog Spa. Describing the market for Tumlin’s grooming salon in terms of how old they are and
their marital state reflects the use of _____ characteristics.
a.
psychographic
b.
demographic
c.
anthropological
d.
geographic
e.
sociological
99. Refer to Dog Spa. Tumlin is developing a strategic marketing plan to cover the first five years of the
salon’s business. She must be sure to consider which of the following uncontrollable factors in her
plan?
a.
place or distribution factors
b.
media buying factors
c.
demographic factors
d.
dining area layout factors
e.
pricing for services
100. What type of research did the marketing consultant perform for Tumlin?
a.
basic
b.
preliminary
c.
applied
d.
causal
e.
factorial
101. Refer to Dog Spa. The uncontrollable environmental factors Tumlin faces in terms of zoning
restrictions for the new dog salon represent _____ factors.
a.
economic
b.
political and legal
c.
research and development
d.
cultural
e.
demographic
ESSAY
1. While managers can control the marketing mix, they cannot control the elements in the external
environment that continually mold and reshape the target market. List six variables of the external
environment that are not directly under the control of marketing managers.
2. What is environmental scanning? Give an example of an opportunity and a threat that environmental
scanning might identify for a suntan lotion company.
3. An organization is not completely at the mercy of the external environment. Explain environmental
management and give an example how a motorcycle helmet manufacturer might use it.
4. List and describe the four basic values that have strongly influenced American’s attitudes and
lifestyles.
5. What is a component lifestyle? Describe how a college student follows a component lifestyle. Use
specific examples.
6. Compare and contrast Generation Y and Generation X. Which generation is of more interest to
marketers? Why?
7. Who are the baby boomers and why are they important to marketers? Name and describe the four
subgroups of baby boomers that have been identified.
8. The largest Japanese community outside of Japan resides in the country of Brazil, a former Portuguese
colony. Today, the Japanese-Brazilian families operate schools to continue their cultural traditions.
Does this mean that Brazil has a multicultural society?
9. One component of the external environment marketing managers must understand and react to is the
economic environment. Briefly describe the four economic areas of greatest concern to U.S. marketers
and the marketing implications of trends in these four areas.
10. Compare and contrast basic and applied research. Give an example of each.
11. There are several federal laws that affect marketing regarding the competitive environment, pricing
practices, and false advertising. Name and briefly describe three of these federal laws.
12. What is the CPSC? How does it affect marketing?
13. The Federal Trade Commission (FTC) has many regulatory powers that govern the action of persons
and corporations. Name and briefly describe four of the powers of the FTC.
14. Name and describe one federal law that has been passed to protect consumers from identity theft.
15. Describe the competitive environment for a locally-owned coffeehouse in your college community.