89. 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
90. Which of the following are the most frequently sentenced organizational crimes?
a.
False advertising and price discrimination
b.
Price discrimination and fraud
c.
Fraud and antitrust violations
d.
Price fixing and antitrust violations
e.
Fraud and price fixing
91. Of all the federal regulatory units, the ____ most heavily influences marketing activities.
a.
Food and Drug Administration (FDA)
b.
Federal Communications Commission (FCC)
c.
Environmental Protection Agency (EPA)
d.
Federal Trade Commission (FTC)
e.
Federal Power Commission (FPC)
92. After several children became ill while playing with toys imported from outside the U.S., medical
researchers found several illegal chemicals, including lead in the paint. These toys were sold primarily
through websites on the Internet. Which of the following agencies would most likely have jurisdiction
over the problem with lead in the paint of children’s toys?
a.
Consumer Product Safety Commission
b.
Children’s Online Protection Act
c.
Food and Drug Administration
d.
Environmental Protection Agency
e.
National Advertising Review Board
93. The FTC can issue a cease-and-desist order, which is an injunction to
a.
report to the FTC immediately.
b.
stop doing whatever caused the complaint.
c.
appear before the courts.
d.
pay for damages caused by negligence of the firm.
e.
close down the firm until further notice.
94. 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
95. 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
96. In its advertisements for Bud Light beer, Anheuser-Busch has decided to include a statement saying
“Know when to say when.” This is an example of which one of the following types of regulatory
forces affecting marketing efforts?
a.
Federal regulation
b.
State regulation
c.
City regulation
d.
Self-regulation
e.
Social regulation
97. Which of the following regulatory groups is a system of nongovernmental, independent, local
regulatory agencies supported by local businesses?
a.
The Chamber of Commerce
b.
The National Advertising Review Board
c.
The National Advertising Division
d.
The Better Business Bureau
e.
American Marketing Association
98. 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.
99. Jared Bledsoe hired Green Gardens, a local landscape firm to plant trees and shrubs in his front yard.
The landscape is beautiful when the company is done; however, in just a few days many of the plants
begin to die. When Jared complained to the manager of Green Gardens, the manager says that Jared
must have done something to them that caused the plants to die, such as overwatering them. Green
Gardens doesn’t have any money-back guarantees. Jared is angry that he can’t get a refund or
replacement. At this time, Jared’s best course of action would be to contact the
a.
local Chamber of Commerce.
b.
Federal Trade Commission.
c.
Sherman Commission.
d.
Better Business Bureau.
e.
local Small Claims Court.
100. 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.
101. In its advertisements, Regent Hair Care Products claims that its KLTR-14 gel will restore the hair of
bald men. Even though Regent shows supporting evidence in its ads, members of the National
Advertising Review Board (NARB) believe the claim is unsupportable. What action can the NARB
take?
a.
Force Regent to stop running the advertisement.
b.
File a complaint with the Federal Trade Commission.
c.
Fine Regent for each time the ad appears.
d.
Sue Regent Hair Care Products in federal court.
e.
Sue Regent Hair Care Products in state court.
102. Which of the following statements about self-regulatory programs is false?
a.
Self-regulatory programs are usually less expensive than governmental regulatory
programs.
b.
Self-regulatory programs’ guidelines generally are more realistic and operational.
c.
Nongovernmental self-regulatory programs have neither the tools nor the authority to
enforce guidelines.
d.
Self-regulatory guidelines generally are stricter than governmental regulatory programs.
e.
When a trade association sets up industry guidelines, some firms that are in the industry
but not in the trade association do not follow the guidelines.
103. 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.
e.
Money is very rarely an issue in enforcing decisions of self-regulatory agencies.
104. When a firm continues to violate what the Better Business Bureau believes to be good business
practices, what is one of the main actions the bureau will take?
a.
Lead a consumer boycott of the business.
b.
Sue the chief executive of the business.
c.
Impose fines on the owners/managers of the business.
d.
Support legal ordinances against the business.
e.
Warn consumers of the unfair practices.
105. What national self-regulatory organization screens ads?
a.
Federal Advertising Review Division
b.
National Advertising Review Board
c.
Federal Communications Commission
d.
Consumer Federation of America
e.
Better Business Bureau
106. Technology is
a.
the application of scientific knowledge to build products that customers desire.
b.
the application of knowledge and tools to solve problems and perform tasks more
efficiently.
c.
applied sciences.
d.
one of the weakest marketing environment forces.
e.
the result of research performed primarily by universities.
107. More than half of the research of technology created is paid for by
a.
corporations.
b.
state and local governments.
c.
the federal government.
d.
large universities.
e.
private investors.
108. While playing soccer, Bryan suddenly fell and broke his arm. Needing to get to the hospital, he was
not only interested in the nearest location, but also the shortest emergency room wait time. He
remembered seeing a billboard for The Cleveland Clinic promoting their time-text service where he
could call the number GET-TXT-TIME and they would text him the approximate waiting time at the
closest three hospital locations. The Cleveland Clinic is providing enhanced service to its patients by
capitalizing on which environmental force?
a.
Economic
b.
Competitive
c.
Political
d.
Legal and regulatory
e.
Technological
109. 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.
110. Which of the following is the best example of utilizing technology to improve consumer relationships?
a.
Waiters recording orders on handheld computers
b.
Surveying customers to determine their needs
c.
Responding to changes in competitors’ prices
d.
Introducing stringent package standards
e.
Requiring dolphin-safe tuna
111. 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.
112. 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.
113. Many health care companies are making adaptations to meet the needs of an aging population as the
demand for medical services and products such as diabetes supplies increases. This change in
marketing strategy is best explained by a change in
a.
demographics.
b.
cultural values.
c.
income levels.
d.
consumerism.
e.
subcultures.
114. People for the Ethical Treatment of Animals (PETA) have demonstrated against the sale of coats made
of animal furs. PETA’s efforts to change shoppers’ attitudes represent a ____ force for fur retailers.
a.
technological
b.
political
c.
sociocultural
d.
self-regulatory
e.
controllable
115. 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.
116. In the near future, what subculture will become the second largest group in the United States?
a.
Whites
b.
African-Americans
c.
Asians
d.
Hispanics
e.
Native American Indians
117. 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
118. The Classic Hotel Group has begun to offer entire floors of rooms in its hotels that are smoke-free,
adults-only, and pet-friendly. The Classic Hotel Group is responding to changes in
a.
customer demands.
b.
the legal environment.
c.
demographics.
d.
cultural values.
e.
cultural diversity.
119. Many well-known restaurants and corporations are changing to a completely smoke-free environment,
and fewer restaurants offer smoking and nonsmoking sections. These firms are responding to changes
in
a.
federal law.
b.
cultural values.
c.
demographics.
d.
consumerism.
e.
technological forces.
120. Consumerism is a
a.
diverse group of individuals and organizations opposed to foreign producers that sell
products in the United States that are much cheaper than those produced by U.S.
manufacturers.
b.
social movement that is trying to encourage consumer satisfaction.
c.
social movement that is reorganizing the Council of Better Business Bureaus.
d.
diverse group of individuals and organizations attempting to protect the rights of
consumers.
e.
social movement that provides consumers with means for expressing satisfaction and
expressing their gratitude to producers.
121. 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.
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.
122. Refer to Scenario 3.1. Suppose that the Soljur Sports company was actually discriminating against
Meyer Sporting Goods with its price increase. Which of the following acts prohibits this type of
business behavior?
a.
Sherman
b.
Wheeler-Lee
c.
Robinson-Patman
d.
Celler-Kefauver
e.
Consumer Goods Pricing
123. Refer to Scenario 3.1. If the Federal Trade Commission believes that Soljur Sporting Goods is acting
in violation of the law, the first move for the FTC is to
a.
issue a cease-and-desist order.
b.
issue a complaint stating that the business is in violation of the law.
c.
seek a monetary penalty.
d.
issue negative publicity about the company.
e.
contact the sporting goods manufacturers association
124. 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
125. 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.
Scenario 3.2
Use the following to answer the questions.
Clayton Homes, a mobile home manufacturer since 1934, introduced its new iHome in 2009. The
iHome 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 iHome 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
iHome, the state governments have given it a tax abatement for any sales taxes.
126. Refer to Scenario 3.2.
The new Clayton Homes iHome product is a reflection of the company’s attention to ____ in
developing its strategy.
a.
marketing research analysis
b.
self-regulatory analysis
c.
consumer behavior analysis.
d.
marketing information processing.
e.
environmental scanning and analysis.
127. Refer to Scenario 3.2. In what type of competitive structure is Clayton Homes most likely operating?
a.
Monopoly
b.
Oligopoly
c.
Monopolistic competition
d.
Perfect competition
e.
Monopsony
128. Refer to Scenario 3.2. The iHome’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.
129. Refer to Scenario 3.2. Clayton Homes is revising its marketing strategy for the iHome due to the
current recession. Which of the following is the best action for promoting the iHome in the near
future?
a.
Emphasize the value of the iHome products.
b.
Focus on the “green” qualities of the home and target environmentally-conscious
individuals.
c.
Significantly reduce advertising expenditures to create an exclusive image.
d.
Decrease production until the economy improves.
e.
Significantly reduce the prices on the company’s product offerings.
130. Refer to Scenario 3.2. The income a consumer would use to purchase an iHome is considered ____
income.
a.
discretionary
b.
buying power
c.
disposable
d.
consumer spending
e.
comprehensive spending
TRUE/FALSE
131. The marketing environment consists of external forces that directly or indirectly influence an
organization’s acquisition of inputs and generation of outputs.
132. Environmental analysis is the process of collecting information about forces in the marketing
environment.
133. Environmental analysis helps managers identify potential threats and opportunities linked to
environmental changes.
134. Brand competitors market products with similar features, benefits, and prices to the same customers.
135. Product competitors provide very different products that solve the same problem or satisfy the same
basic customer need.
136. The number of firms that control the supply of a product may affect the strength of competition.
137. A monopoly exists when a firm with many potential competitors attempts to develop a marketing
strategy to differentiate its products.
138. An oligopoly exists when a firm offers a product that has no close substitutes, making the firm the sole
source of supply.
139. Pure competition is a common competitive environment.
140. Monitoring the competitive environment guides marketers in developing competitive advantages.
141. Economic forces determine the size and strength of demand for products.
142. A recession is characterized by extremely high unemployment, very low wages, minimal total
disposable income, and lack of consumer confidence in the economy.
143. The strength of one’s buying power depends partially on the state of the economy.
144. An individual’s after-tax income is called his or her discretionary income, which is used for spending
and/or saving.
145. Disposable income is used to pay taxes, spend, and save.
146. The total amount of disposable income is affected by the amount of taxes consumers pay.
147. Decreases in taxes lead to decreases in disposable income.
148. The amount of future income already committed to past credit agreements influences one’s ability to
use more credit.
149. Credit increases future buying power.
150. An individual can have a high income and very little wealth.
151. Wealth is an accumulation of past income and natural and financial resources.
152. If a person has buying power, he or she is influenced only by a product’s absolute price.
153. Wealth enables consumers to gain buying power.
154. For a given level of buying power, the larger the family, the greater the willingness to spend.
155. A factor that affects willingness to spend is general economic conditions.
156. Political and legal forces in the marketing environment are highly interrelated.
157. Governments are big buyers, and the people who hold political offices often determine how much is
purchased.
158. Political forces are beyond the control of marketers, and so they can only react to them.
159. If political officials have positive feelings toward particular firms or industries, they are less likely to
create or enforce laws and regulations that are unfavorable for business organizations.
160. A recent U.S. Supreme Court decision has nullified federal laws that restrict political campaign fund
contributions for corporate labor unions.
161. Many laws that directly influence marketing activities were enacted either to preserve a competitive
atmosphere or to protect consumers.
162. The Sherman Antitrust Act, along with several other laws, is a procompetitive law because it was
created to preserve competition.
163. Fraud and antitrust violations are the most frequently sentenced organizational crimes.
164. All marketers interpret laws and regulations conservatively and strictly to avoid violating a vague law.
165. Because of overlapping areas of responsibilities of regulatory agencies, confusion and conflict
regarding jurisdiction of marketing activities are common.
166. The Food and Drug Administration influences marketing activities the most.
167. State and local regulatory agencies usually do not establish and enforce regulations that conflict with
the actions of national regulatory agencies.
168. Numerous self-regulatory programs have been created to stop or stall the development of laws and
government regulatory groups that would regulate marketing practices.
169. Although numerous regulatory forces arise from governmental sources, nongovernmental regulatory
forces may also affect marketing decisions.
170. A good example of a government regulatory group at the local level is the Better Business Bureau.
171. The Council of Better Business Bureaus and the FTC make up the National Advertising Review Board
(NARB).
172. All members of an industry are bound to follow trade association guidelines.
173. Technology is the application of knowledge and tools to solve problems and perform tasks more
efficiently.
174. Technological developments have a direct impact on creating and maintaining a marketing mix.
175. Technological changes do not directly affect what, how, when, and where products are marketed.
176. Personal computers and cellular phones are technology.
177. Technology affects the types of products offered to consumers.
178. Technology can help marketers become more productive.
179. Firms always adopt and use new technology.
180. Through technology assessment, managers try to foresee the effects of new products and processes on
the firm’s operations and on society.
181. The three major components of sociocultural forces are demographic and diversity characteristics,
cultural values, and consumerism.
182. The proportion of the U.S. population that will be over 65 years of age is expected to decline by the
year 2050.
183. The number of single men and women living alone is declining.
184. An increasingly diverse cultural base in the United States means that marketers face increasingly
diverse consumer markets.
185. Changes in values have little effect on people’s needs for products.
186. People have changed their values regarding the permanence of marriage, which in turn has led to an
increased emphasis on people being happily married.
187. The major source of cultural values is the family.
188. The major forces that make up the consumerism movement are consumer organizations and business
organizations.
189. To achieve their objectives, consumer advocates write letters to companies, lobby government
agencies, broadcast public service announcements, and boycott companies whose actions they deem
irresponsible.