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Name:
Class:
Date:
chapter 4
Indicate whether the statement is true or false.
1. Many foreign competitors don’t consider the United States a ripe target market yet.
a.
True
b.
False
2. The CAN-SPAM Act was passed as an attempt to regulate unsolicited email advertising. The act prohibits commercial
emailers from using false addresses and presenting false or misleading information, among other restrictions.
a.
True
b.
False
3. Asian Americans, who represent only 6 percent of the U.S. population, are the least influenced by technology.
a.
True
b.
False
4. When income is high in comparison to the cost of living, people have more discretionary income.
a.
True
b.
False
5. The Federal Trade Commission (FTC) enforces regulations against selling and distributing adulterated or hazardous
food and drug products.
a.
True
b.
False
6. Gen Xers have lower average incomes than their Millennial and Baby Boomer counterparts.
a.
True
b.
False
7. A person’s values determine what is important and not important, which actions to take or not to take, and how one
behaves in social situations.
a.
True
b.
False
8. The term Hispanic encompasses people of many different racial backgrounds.
a.
True
b.
False
9. The difficulty of making profit from applied research discoveries has led businesses to cut their spending on applied
research.
a.
True
b.
False
10. The Bureau of Competition provides information and holds conferences and workshops for consumers, businesses,
and policy makers on competition issues for market analysis.
a.
True
b.
False
11. During a period of low inflation, there is nothing businesses can do to increase their profit margins.
Name:
Class:
Date:
chapter 4
a.
True
b.
False
12. In terms of consumers’ incomes, a nondegree holder will earn more than twice the total income as a degree holder
over a lifetime.
a.
True
b.
False
13. Teens possess a negligible amount of buying power.
a.
True
b.
False
14. Millennials tend to be influenced more by traditional advertising, sales reps, and word-of-mouth recommendations
than through digital media.
a.
True
b.
False
15. Demography is a controllable variable in the external environment.
a.
True
b.
False
16. Marketers targeting Baby Boomers should use words such as “senior” and “elderly,” to signal and attract their target
audience.
a.
True
b.
False
17. The management of a firm has utmost control over the competitive environment that it confronts.
a.
True
b.
False
18. As a means of product promotion, unlike television, social media enable firms to create conversations with customers
and establish meaningful connections.
a.
True
b.
False
19. A target market is a group of people or organizations for which an organization designs, implements, and maintains a
marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.
a.
True
b.
False
20. Global competition increases as the U.S. population decreases.
a.
True
b.
False
21. In terms of purchasing power, when income is low relative to the cost of living, people have more discretionary
income.
a.
True
b.
False
Name:
Class:
Date:
chapter 4
22. In times of high inflation, businesses seeking to increase their profit margins can do so only by increasing their
efficiency.
a.
True
b.
False
23. Gross domestic product is the total market value of all final goods and services produced during a period of time.
a.
True
b.
False
24. Technological success is based upon innovation, which is independent of imagination and risk taking.
a.
True
b.
False
25. A component lifestyle refers to one in which consumers choose products and services that conform to traditional
demographic stereotypes.
a.
True
b.
False
26. Baby Boomers typically are to be influenced by information gained through social media.
a.
True
b.
False
27. From a contemporary marketing perspective, it could be said that a person’s profession defines his or her lifestyle.
a.
True
b.
False
28. Gen Xers tend to be frugal and seek value when making purchases.
a.
True
b.
False
29. Social change is one of the easiest external variables for marketing managers to forecast and assimilate into marketing
plans.
a.
True
b.
False
30. The passage of the Restoring American Financial Stability Act of 2010 created the Consumer Financial Protection
Bureau to protect consumers against unfair, abusive, and deceptive financial practices.
a.
True
b.
False
Indicate the answer choice that best completes the statement or answers the question.
31. Hispanic Americans in the United States:
a.
are prejudiced towards relationships.
b.
are much older than the general U.S. population.
c.
are the largest segment of the population to use mobile devices for any type of transaction.
Name:
Class:
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chapter 4
d.
are the most homogenous ethnic group.
32. Which of the following is NOT a key provision of the Patient Protection and Affordable Care Act?
a.
Workers cannot be denied coverage.
b.
Large employers must offer coverage to full-time workers.
c.
A worker can be denied coverage for a preexisting condition.
d.
Young adults can stay on their parents’ plans until age 26.
33. Equality, a core American value that strongly influences the attitudes and lifestyles of people, means that:
a.
no one should expect to be treated differently from anybody else.
b.
hard work, dedication to family, and frugality are moral and right.
c.
success comes to anyone who gets an education, works hard, and plays by the rules.
d.
every person should stand on his or her own two feet.
34. Which of the following accurately reflects current population trends in the United States?
a.
Baby Boomers are now the smallest population group
b.
In many parts of the country, multigenerational households are increasingly rare.
c.
The populations in the rural regions of the United States are aging.
d.
Tweens are now the largest population group.
35. Jessica was born in 1994. She spends more time on Facebook than reading magazines. Despite her preference for
spending time online at social networking sites, she does listen to the radio and read occasionally. Given this information,
which of the following statements is true of Jessica?
a.
She does not expect brands to be on social media.
b.
She is a younger Millennial.
c.
She is one of the first generation of latchkey children.
d.
She would have graduated from college during the Great Recession.
36. People born between 1979 and 1994 and who comprise the largest group in America’s workforce are known as
a.
Millennials.
b.
Gen Xers.
c.
tweens.
d.
teens.
37. Allen, a Human Resources manager in a multinational firm, is recruiting employees. Rebina, one of the candidates,
introduces herself and shares some of her background. From a marketer’s point of view, which of the following things she
said is considered a demographic factor?
a.
She lives in California.
b.
She believes in the value of social services.
c.
She is a very creative cook.
d.
She prefers using a specific brand of electronic gadgets.
38. Which of the following statements is true of today’s consumers in the United States?
a.
They value a lower product price over product quality.
b.
They seldom show a high preference for brand names.
c.
They are concerned about the nutritional content of their food.
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chapter 4
d.
They tend to choose expensive products regardless of durability.
39. Marketers cannot advertise for adulterated and misbranded food or drug products due to the power of:
a.
The Association for Prohibition of Adulteration
b.
The General Food Regulations
c.
The Consumables Protection Bureau
d.
The Food and Drug Administration
40. Which of the following is true about inflation?
a.
Inflation is an indicator of the decrease in the value of money.
b.
During periods of low inflation, businesses that seek to increase their profit margins can do so by increasing
their prices significantly.
c.
Inflation is a period of economic activity characterized by negative growth.
d.
Inflation occurs when the gross domestic product falls for two consecutive quarters.
41. Which of the following is true of the FTC’s Bureau of Consumer Protection?
a.
It aims at preventing fraud and unfair business practices in the marketplace.
b.
The bureau enforces federal laws that protect consumers.
c.
It empowers consumers with free information to help them exercise their rights and to spot and avoid fraud
and deception.
d.
All of the above are correct.
42. Which of the following federal agencies has the power to set mandatory safety standards for almost all products that
consumers use example cribs, electronics and video games, school supplies, science kits, toys, and pacifiers?
a.
The Federal Trade Commission (FTC)
b.
The Food and Drug Administration (FDA)
c.
The Consumer Product Safety Commission (CPSC)
d.
The Bureau of Consumer Protection
43. Which of the following about the Great Recession is true?
a.
The economy completely recovered from the Great Recession in 2009.
b.
The Great Recession spread around the globe by 2008.
c.
The middle class was the least affected by the Great Recession.
d.
The Great Recession increased employment rates to almost 10 percent.
44. The population group that falls between ages 9to 12 and presents great opportunity to American marketers with a huge
spending power is known as:
a.
Generation X.
b.
teens.
c.
Generation Y.
d.
tweens.
45. Jason was born in 1970. He spent most of his childhood without much adult guidance as both his parents were
working professionals. In this case, which of the following is most likely to be true of Jason?
a.
He is independent, resilient, adaptable, cautious, and skeptical.
b.
He has a pessimistic outlook.
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Class:
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chapter 4
c.
His generation outspends other generations on consumer goods and services.
d.
He possesses a negligible amount of spending power.
46. Saving money is a major priority for _________, who are generally economical and look for value when making
purchases.
a.
Gen Xers
b.
Millennials
c.
teens
d.
tweens
47. Which of the following about African Americans is true?
a.
They do not believe in strong cultural connections.
b.
In African American homes, husbands alone make decisions regarding large purchases.
c.
They generally expect brands to support social causes.
d.
They make up the largest group to use mobile devices for banking transactions.
48. Which of the following core values strongly influences the attitudes and lifestyles of Americans?
a.
Idealism
b.
Self-sufficiency
c.
Nonconformity
d.
Integrity
49. Which federal agency is charged with enforcing regulations against selling and distributing adulterated, misbranded,
or harmful food or drug products?
a.
The Federal Trade Commission (FTC)
b.
The Food and Drug Administration (FDA)
c.
The Consumer Product Safety Commission (CPSC)
d.
The Bureau of Consumer Protection
50. Which statement about the Great Recession of 2007–2009 is true?
a.
Tweens were the most affected population group.
b.
Inflation rates increased to almost 10 percent.
c.
It began with the collapse of inflated housing prices.
d.
It increased employment opportunities in the United States.
51. Which of the following is an American value?
a.
Self-sufficiency
b.
Upward mobility
c.
Achievement orientation
d.
All of the above
52. Which federal agency reviews mergers and acquisitions, and challenges those that would likely lead to higher prices,
fewer choices, or less innovation?
a.
The Bureau of Competition
b.
Consumer Product Safety Commission (CPSC)
c.
Food and Drug Administration (FDA)
Name:
Class:
Date:
chapter 4
d.
The Food and Drug Administration (FDA)
53. The form of research that aims to confirm an existing concept or to learn more about a phenomenon is called
________.
a.
basic research
b.
applied research
c.
innovative research
d.
the scientific method
54. Which of the following is NOT an approach companies take to keep innovation strong?
a.
Using teams of writers to imagine detailed opportunities and threats for their companies, partners, and
collaborators in future markets
b.
Creating websites that act as literal marketplaces of ideas where innovators can go to look for help with
scientific and business challenges
c.
Talking to early adopters and looking for new things or wishing for something better to help in daily tasks at
home and work
d.
Restricting the degree to which people can follow their entrepreneurial passions
55. Which of the following statements is true of Baby Boomers?
a.
The youngest Baby Boomers were around 34 years old in 2013.
b.
They are most concerned with price and quality when making purchase decisions.
c.
The size of the Baby Boom cohort group has been increasing in size since 2012.
d.
They are a small market with minimal spending power.
56. The CAN-SPAM Act:
a.
prohibits commercial emailers from using false addresses and presenting false or misleading information.
b.
requires fast-food chains to open their facilities to health inspection at least once every quarter.
c.
requires verifiable parental consent before a website can collect information from children.
d.
allows commercial emailers to charge consumers a fee to opt out of receiving further email.
57. Business firms can stimulate innovation by:
a.
hiring employees who have a low tolerance for risk.
b.
letting employees know that they have the freedom to fail.
c.
using micromanagement techniques.
d.
talking to late adopters.
58. Fincorp, an investment banking firm, promotes its offerings through various social media platforms. Which of the
following statements is most likely to be true about Fincorp?
a.
The platforms display content solely generated by Fincorp.
b.
Fincorp uses its social media platforms to promote one-way communication, similar to network television.
c.
Fincorp reduces its reach by promoting its products via social media platforms.
d.
Fincorp can create conversations with its customers and establish meaningful connections.
59. The population group born between 1965 and 1978, who value education and knowledge, and who tend to do
significant research before making a major purchase is known as:
a.
Millennials.
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chapter 4
b.
Gen Xers.
c.
tweens.
d.
Baby Boomers.
60. Fresnas Cuisine, a restaurant chain, recently introduced fast food on its menu because management recognized that
their customers are predominantly young people. This scenario illustrates how _____ influence marketing decisions.
a.
economic factors
b.
demographic factors
c.
legal factors
d.
ethical factors
61. The lifestyle characterized by choosing goods and services according to the activities consumers engage in and the
interests they express rather than conforming to a single, traditional lifestyle is called a:
a.
component lifestyle.
b.
fad lifestyle.
c.
career lifestyle.
d.
military lifestyle.
62. Which of the following acts outlaws discrimination in prices to different buyers; prohibits tying contracts (which
require the buyer of one product to also buy another item in the line); and makes it illegal to combine two or more
competing corporations by pooling ownership of their stocks?
a.
Clayton Act of 1914
b.
Sherman Act of 1890
c.
Federal Trade Commission Act of 1914
d.
Robinson-Patman Act of 1936
63. Unlike the youngest Gen Yers, many of the oldest members of Generation Y:
a.
are entering adulthood.
b.
were the least affected by the Great Recession.
c.
turned 50 years old in 2016.
d.
have become parents.
64. Which of the following statements is true of Gen Xers?
a.
They graduated from college during the Great Recession and had difficulty in finding good jobs.
b.
They are currently in two different stages of the life cycle.
c.
They have acquired a disproportionate amount of spending power.
d.
They have very low spending power because of a lack of a stable source of income.
65. Which statement is true about tweens?
a.
Tweens are especially influenced by sales reps and word-of-mouth recommendations.
b.
Most tweens own a mobile phone and almost half of them have smartphones.
c.
Most tweens prefer and value traditional media over social media, unlike other cohorts.
d.
Tweens have little spending money and rely on their parents and relatives to make purchases for them.
66. With access to information, opinions, and sophistication well beyond their years, _____ are directly or indirectly
responsible for sales of over $200 billion annually.
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chapter 4
a.
Baby Boomers
b.
Millennials
c.
teens
d.
tweens
67. A difference between Gen Yers and Baby Boomers is that, unlike Gen Yers, Baby Boomers:
a.
are currently in two different stages of the life cycle.
b.
are the most tech-savvy people yet.
c.
outspend in categories such as gifts and medical care.
d.
have a strong preference for full service restaurants
68. Martha visits a department store and discovers that a box of exotic candles will cost 10 percent more than what she
had paid six months ago. Similar increases in prices across most goods and services is happening throughout the country.
In this scenario, which statement is true?
a.
Martha’s purchasing power would remain unchanged if she has a pay raise to match the inflation.
b.
She would have to pay 12 percent more than what she paid last month.
c.
The department store’s marketing strategy is to increase its profit margin by increasing the prices of its goods.
d.
The candles’ subjective value increases with the increase in inflation.
69. Paulina is an eleven-year-old girl. She spends a lot of time on social media and likes mobile games. In this case,
Paulina is most likely to be a
a.
Baby Boomer.
b.
Millennial.
c.
Gen Xer.
d.
tween.
70. Which of the following indicates the impact of Patient Protection and Affordable Care Act on marketing?
a.
It revamped the U.S. healthcare system and specifically mandated and subsidized health insurance for
individuals.
b.
It prohibited cigarette advertising on television and radio and revised the health hazard warning on cigarette
packages.
c.
It requires warning labels on hazardous household chemicals.
d.
It required safety packaging for products that could be harmful to children.
71. Jane is a 16-year-old sophomore. She stays abreast of the latest technology and educates her parents about the latest
trends in technology. She convinced them to replace her old cell phone with a new one. Given this information, Jane is a
_____.
a.
tween
b.
teen
c.
Gen Xer
d.
Gen Yer
72. Which statement is true about younger Millennials?
a.
They graduated from college during the Great Recession.
b.
They tend to look at unemployment in the same way as done by the older generations.
c.
They do not spend time surfing the Web or on social media.
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d.
They are quick to change jobs if they are unsatisfied.
73. Which of the following statements is true of a target market?
a.
Uncontrollable elements continually evolve and create changes in a target market.
b.
Managers can control the external environment that molds and reshapes a target market.
c.
Environmental scanning is performed by firms in order to prevent changes in a target market.
d.
Unlike uncontrollable variables, controllable variables do not affect a target market.
74. Which statement is true of today’s tweens in the United States?
a.
They are the first generation of latchkey children.
b.
Mobile devices account for 41 percent of all screen time for tweens.
c.
They are a larger cohort than Baby Boomers.
d.
They are aged between 14 and 18 years.
75. Jack, a Hispanic Millennial, completed his bachelor’s degree in the year 2017 and is looking forward to having a
successful career. Which of the following behaviors is Jack most likely to be associated with?
a.
Jack favors Spanish media over English media.
b.
Jack embraces parts of his original culture.
c.
Jack is not prone to accept future family obligations and the difficulties of supporting parents and
grandparents.
d.
Jack is most likely to be monolingual.
76. Identify which statement is true regarding African Americans.
a.
Most African Americans are 50 years old or older, so they don’t drive current music trends.
b.
Because of their rich heritage, African Americans believe in strong cultural connections.
c.
Most African Americans are not heavy users of technology.
d.
Lower household incomes, coupled with overall population growth, are causing the purchasing power of the
African American consumers to decrease significantly.
77. Which legislative action created the Consumer Financial Protection Bureau (CFPB)?
a.
The Restoring American Financial Stability Act
b.
Credit Card Act
c.
Consumer Product Safety Act
d.
Patient Protection and Affordable Care Act
78. Hydralicious, a juice outlet, had to close a business because health inspectors found that the storage facilities at the
outlet did not meet the standards set by the government. In this scenario, a(n) _____ factor affected Hydralicious’s
business.
a.
technological
b.
economic
c.
legal
d.
demographic
79. Given current demographics in the United States, Millennials:
a.
are now greater in number than Baby Boomers.
b.
spend the most on food than any other cohort.
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chapter 4
c.
have been the least affected by the Great Recession.
d.
are less interested in technology than any other group.
80. Which of the following statements is true of American teenagers?
a.
They spend about six hours per week tuned in to electronic media.
b.
They make the largest cohort group.
c.
They prefer face-to-face communication to communicating electronically.
d.
They prefer Tumblr and Instagram to Facebook.
81. Unlike Hispanic Americans, most:
a.
Asian Americans are born outside the United States.
b.
Asian Americans’ average family income is less.
c.
Asian Americans seldom retain their core Asian values.
d.
Asian Americans are less educated.
82. Which of the following is accurate with regard to Asian Americans?
a.
The Asian American population growth has been fueled primarily by immigration.
b.
Asian Americans embrace the values of the larger U.S. population and don’t follow the cultural values of their
particular subgroup.
c.
Asian Americans usually don’t speak their native tongue at home.
d.
A large percentage of Asian Americans categorize themselves as “American.”
83. A period of economic activity characterized by negative growth, which reduces demand for goods and services is
called ________.
a.
a recession
b.
inflation
c.
a depression
d.
purchasing power
84. Which of the following statements is true about the trends prevalent among the various ethnicities in U.S. ethnic
markets?
a.
African Americans do not consider cultural/ethnic heritage as a critical part of their identity.
b.
Hispanics of older generations are more likely to be bilingual than Hispanic Millennials.
c.
Asian Americans retain strong core values even if they embrace American values.
d.
Asian Americans are less educated than any other minority group.
85. Unlike people who belong to Generation X, Baby Boomers:
a.
do not use social media or other technologies to buy products.
b.
tend to be influenced more by traditional advertising and word-of-mouth recommendations.
c.
spend less on gifts, personal care products, medical care, food away from home, and entertainment.
d.
graduated from college during the Great Recession.
86. Which of the following statements is true of incomes in the United States?
a.
The real median household income has fallen since 2009.
b.
The median household income is the same across different states.
c.
Demographics influence a person’s earning potential.
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d.
Those who hold a college degree typically earn the same wages as a nondegree holder.
87. Which of the following statements is true of the attitude of teens in the United States?
a.
Most teens prefer to carry out offline shopping
b.
According to a Packaged Facts study, 75 percent would rather have a new pair of shoes than 50 new MP3
downloads, and 63 percent would choose a new pair of jeans over concert tickets
c.
Teens spend more on food than any other cohort group.
d.
Most teens are influenced by traditional advertising, sales reps, and word-of-mouth recommendations than any
other cohort.
88. Which law primarily targets children’s products, which are defined as those used by individuals 12 years old or
younger?
a.
Consumer Product Safety Commission (CPSC)
b.
Child Protection and Toy Safety Act of 1969
c.
Child Protection Act of 1990
d.
Consumer Credit Protection Act of 1968
89. Which congressional act protects consumers against terrorist actions?
a.
Robinson-Patman Act of 1936
b.
Federal Trade Commission Act of 1914
c.
Sherman Act of 1890
d.
Homeland Security Act of 2002
90. Which of the following comprise(s) the competitive environment of a firm?
a.
The number of competitors present in the market
b.
The relative size of the competitors
c.
The degree of interdependence within the industry
d.
All of the above
91. When considering the social factors that affect marketing, people with component lifestyles are:
a.
becoming non-discriminating and undemanding.
b.
choosing products that meet their diverse needs.
c.
reducing the complexity of their buying behavior.
d.
beginning to prefer products that meet traditional needs and interests.
92. A federal agency which aims at preventing persons or corporations from using unfair methods of competition in
commerce is:
a.
the Federal Trade Commission (FTC).
b.
the Food and Drug Administration (FDA).
c.
the Consumer Product Safety Commission (CPSC).
d.
the Bureau of Consumer Protection.
93. Which of the following statements is true of the incomes of Baby Boomers in the United States?
a.
Baby Boomers accumulated little amount of savings over their working years.
b.
Baby Boomers’ purchasing power is discretionary and guided by their parents.
c.
Baby Boomers’ current incomes are relatively low because many have retired.
Name:
Class:
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d.
Baby Boomers’ does not get retired at their specific retirement ages.
94. The specific form of research that attempts to develop new or improved products is called _________.
a.
basic research
b.
applied research
c.
innovative research
d.
scientific research
95. Which of the following statements is true of the external environment with regard to developing a marketing mix?
a.
It is a standard variable that does not change.
b.
It does not give an accurate estimation of the target market.
c.
It is manually controlled to generate a marketing mix.
d.
It continually molds and reshapes the target market.
96. The Federal Trade Commission’s Bureau of Competition _____.
a.
promotes restraint of trade among business firms
b.
encourages monopolization and agreements between competitors
c.
promotes anti-competitive strategies
d.
seeks out and challenges anti-competitive conduct in the marketplace
97. Web-based and mobile technologies that allow the creation and exchange of user-generated content are called:
a.
social media.
b.
component lifestyles.
c.
competitive marketing.
d.
the external environment.
98. The study of people’s essential statistics, such as age, race and ethnicity, and location is called:
a.
demography.
b.
a component lifestyle.
c.
social networking.
d.
social marketing.
99. Which of the following refers to a group of people or organizations for which an organization designs a marketing mix
intended to satisfy the needs of that group?
a.
Target market
b.
Industrial market
c.
Virtual market
d.
External environment
100. Alex purchased a battery-operated drill. Due to a manufacturing defect, the drill overheated and exploded when he
used it for the first time. Alex lodged a complaint against the firm that manufactured the drill with the Consumer Product
Safety Commission (CPSC). Given the situation, which of the following is most likely to happen?
a.
The CPSC can fine the offending firm up to $500,000.
b.
The CPSC will reduce the prices of the drills of the offending firm in the market.
c.
The CPSC will introduce changes to the drills of the offending firm in the market.
d.
The CPSC has no power to sentence the officers involved in the case.
Name:
Class:
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chapter 4
101. Which of the following laws prohibits bribery of foreign officials to obtain business?
a.
Foreign Corrupt Practices Act of 1977
b.
Consumer Product Safety Act of 1972
c.
Homeland Security Act of 2002
d.
Restoring American Financial Stability Act of 2010
102. Which term refers to a comparison of income versus the relative cost of a standard set of goods and services in
different geographic areas?
a.
Purchasing power
b.
Inflation
c.
Recession
d.
Personal income
103. Which of the following statements is true of Generation Y?
a.
Its members are not as hardworking and motivated as other generations.
b.
Its members have been raised from childhood to adulthood in the digital world.
c.
Its members have the least spending power than any other cohort.
d.
Its members are the first generation of latchkey children.
104. Identify the core values that have strongly influenced American attitudes and lifestyles and how they influence U.S.
consumers’ buying habits.
105. Discuss how inflation and recession affect the economic environment.
106. Discuss how marketers view the characteristics of, and respond to, the African American market.
107. Define Baby Boomers and their relevance for marketers.
108. Define innovation and discuss its importance and current approaches that companies use to stimulate it.
109. Explain the concept of a marketing mix and why firms must alter their marketing mix.
110. Discuss how business and government are interdependent, and discuss three legislative acts that have had a positive
impact on protecting American consumers.
Name:
Class:
Date:
chapter 4
Answer Key
Name:
Class:
Date:
chapter 4
Name:
Class:
Date:
chapter 4
Name:
Class:
Date:
chapter 4
Name:
Class:
Date:
chapter 4
Name:
Class:
Date:
chapter 4
