Chapter 4—The Marketing Environment
TRUE/FALSE
1. Marketers can control the external environment in which their organizations operate.
2. Champion Lyte is a sugar-free sports drink designed to replenish electrolytes lost during activity or
illness. Since the product was designed primarily for diabetics, health care professionals who treat
diabetics are its primary target market.
3. Often, 20 percent of a firm’s customers produce 80 percent of the firm’s revenue.
4. Companies use environmental management when they implement strategies that attempt to shape the
external environment within which they operate.
5. Social change is perhaps the most difficult external variable for marketing managers to forecast,
influence, or integrate into marketing plans.
6. The Natural Marketing Institute predicts that American consumers will become less environmentally
oriented over the next decade as economic concerns become dominant in most people’s lives.
7. The practice of choosing goods and services that meet one’s diverse needs and interests rather than
conforming to a single, traditional lifestyle is known as aggregate lifestyles.
8. The population shift in the United States from the northeast and Midwest toward the south and
southwest has had a greater effect on marketing than has any other social change.
9. Demography is the study of people’s vital statistics such as their ages and locations.
10. The clothing style worn by tweens reflects that of their parents.
11. The average teen earns about $45.00 per week.
12. Generation Y is the most ethnically diverse generation the nation has ever seen.
13. Generation Y is the first generation of latchkey children—products of dual-career and/or divorced
households.
14. Baby boomers state that “old age” officiall begins at 65.
15. Almost half of all U.S. residents is a minority.
16. The Hispanic population is driving minority growth in the United States.
17. On average, African Americans are nearly eight years older than all other American consumers.
18. Rising incomes mean a higher standard of living.
19. Inflation is a measure of the decrease in the value of money, expressed as the percentage reduction in
value since the previous year.
20. An economic recession increases demand for products and services.
21. Basic research attempts to develop new or improved products.
22. The most innovative firms have an average profit margin growth of 3 percent higher than the typical
firm.
23. Champion Lyte is a sugar-free sports drink. In developing the product, its manufacturer thoroughly
studied the legal restrictions on the drink’s ingredients, packaging, manufacturing, and labeling and has
abided by all such restrictions. In this way, the manufacturer of Champion Lyte drinks conducted its
examination of all political and legal factors that might affect the product’s marketing.
24. The Sherman Act of 1890 establishes protection for trademarks.
25. Marketers need a thorough understanding of the laws established by the federal government, state
governments, and regulatory agencies.
26. After Hal Li purchased and installed a woodburning stove to heat his family home, the stove caught
fire and damaged much of the house. He believes the stove had inadequate insulation. Li should voice
his concerns to the Federal Trade Commission (FTC).
27. The Gramm-Leach-Bliley Act requires Web site operators to post a privacy policy on the home page
and a link to the policy on every page where personal information is collected.
28. The competitive environment of a business encompasses the number of competitors the firm must
face, the relative size of these competitors, regulatory agencies, and the degree of interdependence
within the industry.
MULTIPLE CHOICE
1. A(n) _____ is a defined group that managers feel is most likely to buy a firm’s product.
a.
target market
b.
buying center
c.
aggregated unit
d.
consumer cluster
e.
demographic sample
2. Which of the following statements best describes the typical target market?
a.
A target market will remain stable over time, including the same group of consumers.
b.
Target markets change over time as consumers drop in or out of the market, and as tastes
change.
c.
Target markets are not strongly affected by changes in the external environment.
d.
Target markets only change when the features and benefits of the product offering change.
e.
Target markets cannot be specifically defined according to age, income, or location
because these factors are continually changing
3. Colorific recently began competing with Crayola coloring products. At the beginning of the school
year, the _____ for Colorific products consists of back-to-school shoppers.
a.
target market
b.
buying center
c.
mass market
d.
consumer sample
e.
aggregated demography
4. The publisher of Ebony magazine has forged an alliance with Dan River, Inc. to create luxury bed and
bath products for the newly developed Ebony Home brand. Ebony Home will use the publisher’s long
history and expertise to market to the African American market. The African American market is the
_____ for the Ebony Home brand.
a.
target market
b.
buying center
c.
aggregated unit
d.
consumer cluster
e.
demographic sample
5. The external environment _____.
a.
can be controlled in much the same manner as the internal marketing mix
b.
cannot be influenced by marketing managers
c.
does not change over time
d.
does not have an impact on Fortune 500 companies
e.
must be continually monitored by marketing managers
6. The goal of environmental scanning is to _____.
a.
identify opportunities and threats in the marketplace
b.
eliminate all competition in the marketplace
c.
close all environmental loopholes
d.
control the external environment
e.
increase product myopia
7. All of the following are factors in the external environment affecting marketing EXCEPT:
a.
marketing mix
b.
economic conditions
c.
technology
d.
political and legal factors
e.
competition
8. Which of the following is a key area that firms should monitor in the external environment?
a.
Understanding current customers
b.
Identifying the most valuable customers and their needs
c.
Understanding what drives consumer decisions
d.
Understanding the competition
e.
All of the above
9. Marketing managers cannot control _____, but they can sometimes influence it.
a.
where advertising is placed
b.
the external environment
c.
the sales force
d.
the distribution strategy
e.
product pricing
10. When a company engages in _____, it is implementing strategies that attempt to shape the external
environment in which it operates.
a.
synergistic control
b.
environmental management
c.
environmental control
d.
market control
e.
reactive management
11. The Michigan State Legislature tried to pass a bill requiring concert promoters and venue operators to
print parental warnings on tickets and advertisements for concerts and shows by performers whose
recordings had content advisory labels. Promoters and venue operators prevented the passage of this
bill, arguing that it would require them to make value judgments for which they were ill-equipped. The
promoters and operators engaged in:
a.
internal marketing
b.
illegal practices
c.
environmental management
d.
reengineering
e.
corporate espionage
12. _____ factors are environmental factors that include our attitudes, values, and lifestyles.
a.
Social
b.
Economic
c.
Political
d.
Competitive
e.
Demographic
13. Which of the following is the most difficult for marketing managers to forecast, influence, or integrate
into marketing plans?
a.
Technology
b.
Social factors
c.
Demography
d.
Competition
e.
Economic conditions
14. Many people in the United States choose to drink light beer because they value thin and fit bodies. In
Europe, light beers have had little success because flavor is valued more highly. For international beer
manufacturers, this difference illustrates how _____ influence(s) marketing.
a.
demography
b.
competition
c.
social factors
d.
economic conditions
e.
technology
15. In many African nations, people live on less than $5.00 per day. To grow here, Procter & Gamble
(P&G) must persuade these people to purchase items they have lived without forever. As a result,
P&G sells one-ounce packages of Ariel laundry soap for as little as 10 cents in this market. P&G
responded to _____ factors when it developed these small packages.
a.
demographic
b.
competitive
c.
technological
d.
social
e.
component lifestyle
16. Shark fin soup is a favorite Thai food. When a San Francisco-based organization claimed that the
leading producer’s soup contained mercury poison, its sales plummeted. The popularity of this soup in
Thailand represents a(n) _____ factor while Thailand’s lax enforcement of environmental protection
and consumer protection regulations are a(n) _____ factor.
a.
economic; technological
b.
social; technological
c.
social; political and legal
d.
competitive; economic
e.
social; technological
17. Consumers’ concern for health issues affects the way food is marketed. For example, marketers must
now list the number of grams of transfat on a product’s nutrition label because it has recently come to
light that this type of fat is harmful. Consumers’ concern for health issues is a(n) _____ factor.
a.
economic
b.
political and legal
c.
technological
d.
demographic
e.
social
18. Quaker Oats and other cereal manufacturers have developed what they call “breakfast-with-one-hand”
products—no-mess breakfast bars and drinks that can be consumed while commuting. The popularity
of on-the-go food is largely the result of changes in _____ factors.
a.
natural environmental
b.
demographic
c.
technological
d.
social
e.
political
19. What do self-sufficiency, upward mobility, work ethic, and conformity have in common?
a.
These are no longer valued attitudes
b.
They are attitudes that can easily be changed
c.
These are three perceptions that Americans have of the Asian lifestyle
d.
These are three of the core values that influence lifestyles in the United States
e.
They are the determinants of a component lifestyle
20. According to the Natural Marketing Institute, all of the following are likely consumer trends over the
next ten years EXCEPT:
a.
an increased focus on the acquisition of luxury items and “status symbols”
b.
taking greater steps toward proactive health care
c.
making “meaningful green” initiatives that affect environmental, social, and economic
dimensions
d.
getting off the grid
e.
All of the above are likely trends
21. Martina has begun a small garden in her backyard. She has also installed a water purification in her
home, as well as a means to collect and store rainwater for future use in her garden. Martina’s actions
best represent which “core American value”?
a.
conformity
b.
social justice
c.
materialism
d.
upward mobility
e.
self-sufficiency
22. According to research on geography and personality, which of the following would be categorized as a
“high–anxiety” state?
a.
Minnesota
b.
Utah
c.
New York
d.
California
e.
New Mexico
23. A(n) _____ is the practice of choosing goods and services that meet one’s diverse needs and interests
rather than conforming to traditional stereotypes.
a.
aggregated lifestyle
b.
component lifestyle
c.
psychographic mode of living
d.
demographically defined lifestyle
e.
targeted lifestyle
24. Lance is a 30-year old, single professional who enjoys hiking, college sports, and poetry. He lives
with his girlfriend but does not have plans to get married in the near future. He leads a life much
different from his father who married right after high school, had children, and worked for the same
company his entire career. More and more in the U.S., consumers like Lance are enjoying _____,
piecing together a variety of interests, products, and services instead of conforming to traditional
stereotypes.
a.
well-defined segments
b.
component lifestyles
c.
simple multipurpose products
d.
conformity and cohesiveness
e.
modular market mixes
25. Kendra teaches high school science. She is also a wine expert, a PTA president, and an accomplished
sculptor. Her other interests include scrapbooking, gourmet cooking, and NASCAR. Marketers would
categorize Kendra as _____.
a.
fitting into a caregiver segment
b.
a member of the typical education-based target segment
c.
not belonging to any target market
d.
having a component lifestyle
e.
having a conforming lifestyle
26. Lee Siracca owns two horses, brews his own beer, participates in the civic arts commission, enjoys talk
radio, hikes on wilderness trails, and competes in rodeos. All of these diverse needs and interests
influence his choices of the goods and services he buys. Lee has a:
a.
component lifestyle
b.
demographically oriented lifestyle
c.
multicultural demographic position
d.
fragmented market orientation
e.
segmented buying strategy
27. The growth of dual-income families has resulted in:
a.
burnout
b.
a sense of entitlement
c.
decreased discretionary income
d.
decreased GNP
e.
increased purchasing power
28. The Home Depot has unveiled a new campaign titled True Stories, a series of online videos and TV
ads telling the stories of women who faced challenging personal circumstances and took it upon
themselves to complete home improvement projects—with Home Depot’s help, of course. Which of
the following events probably had the greatest impact on Home Depot’s new marketing strategy?
a.
The growing number of one-child families
b.
The increasing number of immigrants from Northern Europe
c.
The growing number of people on the Internet
d.
The increasing number of working women
e.
The growing number of people of retirement age who are continuing work
29. If you were to ask Americans what they most desire to make their lives easier, most will want more
time. This feeling that there are not enough hours in a day is an example of a(n) _____ factor that has
strongly influenced the marketing environment.
a.
social
b.
economic
c.
legal
d.
demographic
e.
component lifestyle
30. The study of people’s vital statistics, such as age, race and ethnicity, and location, is called:
a.
cultural sociology
b.
psychometrics
c.
ecology
d.
ethnography
e.
demography
31. Zimmer Centralpulse is the world’s largest producer of replacement hips and knees for orthopedic
surgery. It is particularly interested in marketing in the southwestern United States, where a large
aging population lives. Which external environmental element most directly explains its continued
growth?
a.
Economic conditions
b.
Political conditions
c.
Culture
d.
Demography
e.
Social forces
32. Which of the following is NOT a demographic characteristic of a population?
a.
Income level
b.
Age
c.
Values
d.
Education
e.
Birthrate
33. Riot Media is a media and toy company that capitalizes on the “gross-out” humor that boys ages 8
through 12 greatly enjoy. In other words, it targets:
a.
members of Generation X
b.
a cohort generation
c.
tweens
d.
baby boomers
e.
the baby bridging generation
34. Girls between the ages of 8 and 12 are one of the growing markets for high-end shoe manufacturers.
These girls want styles that are both youthful and grown-up looking. They are:
a.
members of Generation X
b.
a cohort generation
c.
tweens
d.
baby boomers
e.
the baby bridging generation
35. Research indicates that _____ is the most important thing to tweens.
a.
getting good grades
b.
being happy
c.
staying healthy
d.
spending time with friends
e.
eating right
36. Which of the following statements about American teenagers is correct?
a.
They spend about 40 hours per week tuned in electronically.
b.
About 25 percent go to the mall at least once a week.
c.
More than 50 percent have a personal, online blog.
d.
They prefer online friends to “real” friends.
e.
They would rather shop in a store than online.
37. _____ are strongly attached to technology, family-oriented, and impatient, and are quick shoppers.
a.
Generation Xers
b.
Members of the cohort generation
c.
Baby boomers
d.
Generation Yers
e.
Members of the baby bridging generation
38. Merissa Champlain designs and sells clothes for young working women. Her marketing managers
recently told her that she’ll be in financial trouble unless she starts designing clothes suited to Gen
Yers. Why is this?
a.
Gen Yers are picky
b.
Gen Yers are more multicultural
c.
Baby boomers provide all of the disposable income for Gen Y members
d.
Demographically, Gen Yers are an extremely large group of consumers
e.
Gen Yers are easily swayed by traditional promotion media
39. Which of the following represents the largest group of consumers in the United States?
a.
Tweens
b.
Gen Y
c.
Gen X
d.
Baby boomers
e.
Boomerangs
40. Christopher is a Gen Yer. If he fits the typical profile of his demographic, you could reasonably expect
him to:
a.
frown on interracial marriages
b.
actively seek out “green” products
c.
spend much more time with friends than with family
d.
keep his opinions mostly to himself and do what authority figures tell him to do
e.
All of the above are true.
41. Consumers born between 1965 and 1978 form a group called:
a.
tweens
b.
yuppies
c.
cohort markets
d.
America’s mass market
e.
Generation X
42. You are a marketing consultant for a firm that wants to target members of Generation X. Based on
your knowledge of this demographic group, your advice to this firm would be to _____.
a.
emphasize freedom from work and commitment
b.
emphasize the importance of their children’s education
c.
avoid topics dealing with materialistic possessions
d.
emphasize the baby boom culture
e.
concentrate on social networking as the best way to reach this group
43. The group of people in the United States who were born between 1946 and 1964 are known as:
a.
generation Xers
b.
gray markets
c.
synergistic cohorts
d.
the baby bust generation
e.
baby boomers
44. All of the following are promotional messages created to resonate with baby boomers, EXCEPT:
a.
connecting with their sense of themselves as trailblazers
b.
focusing on their lives, not their ages
c.
linking the brand with a major life event
d.
marketing to boomers’ tendencies as big spenders
e.
knowing that boomers are jaded students of ads
45. Which of the following statements characterizes the growing ethnic markets in the United States
today?
a.
Marketers are modifying products to appeal to different ethnicities
b.
The United States is becoming a multicultural society
c.
The United States is moving away from being a society dominated by whites and rooted in
Western culture
d.
The percentage of whites in the United States’ population will decline relative to other
minority groups
e.
All of the statements characterize the demographic transition in the United States today
46. The majority of Hispanic Americans are of _____ descent.
a.
Mexican
b.
Puerto Rican
c.
Spanish
d.
South American
e.
Cuban
47. In general, Hispanic Americans:
a.
prefer to buy American products rather than brands found in their homelands, because
they want to be “real Americans”
b.
are much older than the general U.S. population
c.
tend to be very brand loyal
d.
respond unfavorably to advertising targeted directly at them
e.
are highly aware of most mainstream U.S. brands
48. If current trends continue, by 2015 _____ of all black Americans will live in the suburbs.
a.
around 10 percent
b.
roughly one-quarter
c.
almost one-third
d.
more than half
e.
over 75 percent
49. Compared to other U.S. households, a much larger proportion of African American consumers:
a.
shop at convenience-oriented formats such as drug and dollar stores
b.
are bilingual
c.
are skeptical of the new electronic technology
d.
have annual incomes greater than $75,000
e.
get their news from newspapers rather than television or the radio
50. Which ethnic group has the highest average family income?
a.
Hispanic Americans
b.
African Americans
c.
Asian Americans
d.
South Americans
e.
Cuban Americans
51. Which of the following is the largest Asian American segment?
a.
Chinese
b.
Filipino
c.
Vietnamese
d.
Korean
e.
Japanese
52. Because Corazon is a Filipino-American, she is:
a.
probably unfamiliar with most American customs
b.
unlikely to speak her native tongue when she is at home with her family.
c.
probably a practicing Buddhist
d.
making all the purchasing decisions for her family
e.
not likely to be a fluent speaker of English
53. Recession, inflation, and consumers’ incomes that influence the marketing environment are called
_____ factors.
a.
economic
b.
socio-demographic
c.
political
d.
government
e.
consumption
54. After-tax income is referred to as:
a.
gross income
b.
marginal income
c.
purchasing income
d.
unencumbered income
e.
disposable income
55. 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 price of wooden chopsticks in Japan has increased by almost 50 percent. The price increase
influences which factor of the external environment of restaurant owners in Japan?
a.
Economic
b.
Technological
c.
Demographic
d.
Social
e.
Ethnicity