56. Four dollar a gallon gasoline was unimaginable when mechanical gas pumps first appeared in the
United States in the 1930s. Their spinning dials cannot register sales beyond $99.99, which will not fill
up many SUVs. The pumps can be modernized for about $650, but the company that provides this
service has a huge backlog. This is an example of how _____ factors affect small convenience stores
and service stations.
a.
technological and cultural
b.
competitive and natural
c.
economic and technological
d.
cultural and economic
e.
demographic and marketing mix
57. _____ is the primary determinant of a person’s earning potential.
a.
Race
b.
Education
c.
Social class
d.
Gender
e.
Marital status
58. _____ is measured by comparing the relative cost of a standard of goods and services in different
geographic areas.
a.
Gross individual profit
b.
Purchasing power
c.
Net profit
d.
Relative pricing
e.
Price escalation
59. The higher your _____, the higher your purchasing power:
a.
gross income
b.
social class
c.
disposable income
d.
cost of living
e.
inflation index
60. All of the following are taken into account in a cost of living index EXCEPT:
a.
income
b.
housing
c.
food and groceries
d.
health care
e.
entertainment
61. _____ is measure of the decrease in the value of money, expressed as the percentage reduction in value
since the previous year.
a.
Inflation
b.
Recession
c.
Depression
d.
Consumer break-even
e.
Price escalation
62. A period of economic activity characterized by negative growth, which reduces demand for goods and
services, is called:
a.
stagnation
b.
inflation
c.
recession
d.
price escalation
e.
parity
63. The main product for Zamperla Industries is gondola cars for amusement park rides and ski lifts. Its
marketing department constantly monitors trends in the external environment that might affect the
firm. Which economic factor may pose a major threat to this company?
a.
Few competitors in this industry
b.
Technological improvements that are automating production of cars
c.
A recession
d.
Increasing interest in the environment and recycling
e.
Existing legislation requiring licensing of all amusement park rides
64. Shabby Chic fashion boutique has responded to economic trends by placing an emphasis on improving
the quality of merchandise it offers, improving customer service, and reducing its cost of goods sold
because consumers are not shopping as much as they used to due to lower purchasing power. Shabby
Chic is apparently dealing with which factor of economic activity?
a.
Stagflation
b.
Recession
c.
Inflation
d.
Stagnation
e.
Distension
65. All of the following are appropriate tactics for marketers to use during a time of economic recession
EXCEPT:
a.
promote product value
b.
maintain and improve customer services
c.
reduce prices
d.
reduce inventories
e.
increase price
66. 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
67. 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
68. Commercial truck drivers have 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
69. 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
70. 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
71. 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
72. Which type of research attempts to develop new or improved products?
a.
Basic
b.
Synergistic
c.
Secondary
d.
Primary
e.
Applied
73. A marketing researcher is conducting a focus group interview with 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
74. According to The Wall Street Journal, 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
75. 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
76. Laws and regulations of various governments and their ongoing development and change are an
example of _____ factors that are part of the external environment of all organizations.
a.
economic investment
b.
political and legal
c.
research and development
d.
competitive
e.
demographic
77. 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
78. 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
79. 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
80. 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
81. 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
82. 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
83. The _____ 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
84. 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
85. 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
86. 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
87. 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
88. People who are concerned about potential hazards surrounding “natural” dietary supplements should
take their concerns to the _____.
a.
Federal Trade Commission
b.
Consumer Product Protection Commission
c.
U.S. Justice Department
d.
Food and Drug Administration
e.
American Safety League
89. The CAN-SPAM Act:
a.
prohibits commercial e-mailers from using false addresses and presenting false or
misleading information
b.
requires meat manufacturers to open their facilities to health inspection at least once per
quarter
c.
requires verifiable parental consent before a Web site can collect information from
children
d.
allows commercial e-mailers to charge consumers a fee to “opt out” of receiving further
e-mail from the sender
e.
prohibits the online practice of “behavioral targeting”
90. 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
91. 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
92. 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
93. 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
94. 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
95. 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
96. 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
97. Refer to E-cigarettes. In 1964, 42 percent of Americans smoked, but now that rate has dropped below
20 percent. 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
98. 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
99. 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
100. Refer to E-cigarettes. The Food and Drug Administration is part of which environmental factor
affecting the marketing of this product?
a.
Demographic
b.
Technological
c.
Political and legal
d.
Competitive
e.
Economic
101. 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
102. 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
103. 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
104. 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
105. Refer to Dog Spa. What type of research did the marketing consultant perform for Tumlin?
a.
Basic
b.
Preliminary
c.
Applied
d.
Causal
e.
Factorial
106. 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. List and describe the four basic values that have strongly influenced American’s attitudes and
lifestyles.
4. What is a component lifestyle? Describe how a college student follows a component lifestyle. Use
specific examples.
5. Compare and contrast Generation Y and Generation X. Which generation is of more interest to
marketers? Why?
6. Describe some basic characteristics of the African American market.
7. 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.
8. Name and describe at least five approaches companies are now using to keep innovation strong.
9. 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.
10. What is the CPSC? How does it affect marketing?
11. Name and describe at least five ways that thieves can steal an identity.
12. Describe the competitive environment for a locally-owned coffeehouse in your college community.