Chapter 3- The Marketing Environment

CHAPTER 3

The Marketing Environment

1. Given a new brand of barbecue sauce for which to develop a marketing strategy, describe how you would conduct environmental scanning and analysis.AACSB: Analytic DF: M Page: 64 Type: KN

2. Explain the differences between the competitive structures of a monopoly and an oligopoly.AACSB: Communication, Marketing plan DF: M Page: 67 Type: KN

3. Describe what is meant by a consumer's buying power. How might this affect a marketing strategy?AACSB: Analytic DF: E Page: 70 Type: KN

4. Contrast recession and depression.AACSB: Communication DF: M Page: 70 Type: KN

5. Explain how a period of recession might affect the marketing of a product.AACSB: Reflective Thinking DF: E Page: 70 Type: KN

6. Explain the difference between procompetitive legislation and consumer protection laws.AACSB: Communication DF: E Page: 74 Type: KN

7. Describe several ways in which federal agencies influence marketing activities.AACSB: Analytic DF: E Page: 74 Type: KN

8. What roles do the Better Business Bureau and the National Advertising Review Board play in self-regulation of business?AACSB: Analytic DF: M Page: 74-75 Type: KN

9. Why must marketers be aware of new developments in technology?AACSB: Technology DF: E Page: 79 Type: KN

10. What are the major forces that are referred to as sociocultural forces?AACSB: Diversity DF: M Page: 81 Type: KN

11. In what ways is the United States becoming an increasingly diverse nation in terms of culture?AACSB: Diversity DF: M Page: 81 Type: KN

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55 Chapter 3: The Marketing Environment12. To monitor changes in the marketing environment effectively, marketers must engage in

a) environmental scanning and analysis.b) economic scanningc) self-regulatory analysisd) marketing research analysise) information collectingAns: a AACSB: Communication, Marketing plan DF: E LO: LO1 Page: 64 Type: KN

13. Collecting information from secondary sources such as business, government, trade, and general-interest publications plays an important role ina) environmental analysis.b) competitive forces.c) environmental scanning.d) procompetitive legislation.e) self-regulatory forces.Ans: c AACSB: Communication, Marketing plan DF: E LO: LO1 Page: 64 Type: KN

14. Three primary methods of collecting information for environmental scanning area) marketing research, company records, and advance orders.b) secondary sources, company records, and observation.c) executive knowledge, media, and marketing research.d) observation, secondary sources, and marketing research.e) company database, executive knowledge, and research.Ans: d AACSB: Communication, Marketing plan DF: M LO: LO1 Page: 64 Type: KN

15. Dell Computer collects information about a wide variety of competitive, economic, political, legal and regulatory, technological, and sociocultural forces that affect its marketing activities. This process is calleda) environmental scanning.b) survey of environment.c) marketing.d) environmental analysis.e) marketing information processing.Ans: a AACSB: Communication, Marketing plan DF: M LO: LO1 Page: 64 Type: AP

16. If M&M Mars Candies found a magazine article that provided key information on the television viewing habits of major candy consumer groups, this would be an example of information obtained through environmentala) scanning.b) forces.c) analysis.d) strategizing.e) management.Ans: a AACSB: Analytic, Marketing Plan DF: E LO: LO1 Page: 64 Type: AP

17. XM Radio is concerned about how the increasing use of MP3 players will affect the future sales of its satellite radio service. The company decides to gather information about the changing trends in music access to prepare for this trend. XM Radio's process is calleda) environmental scanning.b) target marketing.c) surveying.d) environmental analysis.e) dynamic responsiveness.Ans: a AACSB: Analytic, Marketing Plan DF: M LO: LO1 Page: 64 Type: AP


Chapter 3: The Marketing Environment 5618. Environmental scanning means ___________ information about the marketing environment, whereas

environmental analysis is concerned with ___________ this information.a) assessing; collectingb) assessing; interpretingc) collecting; assessingd) interpreting; observinge) gathering; observingAns: c AACSB: Communication, Marketing plan DF: E LO: LO1 Page: 64 Type: KN

19. When PepsiCo takes the information collected through research and attempts to assess and interpret what it means for its soft-drink marketing efforts, PepsiCo is engaged in environmentala) scanning.b) forces.c) management.d) manipulation.e) analysis.Ans: e AACSB: Communication, Marketing plan DF: E LO: LO1 Page: 64 Type: AP

20. Nabisco learned that health-conscious consumers preferred lower fat snack and lower-carbohydrate foods. At the same time, the firm saw sales of such products slumping and was careful not to launch any new varieties of these products for a while. Which of the following best describes Nabisco's action?a) Environmental scanningb) Environmental marketingc) Demarketingd) Segmentatione) Environmental analysisAns: e AACSB: Analytic, Strategy DF: M LO: LO1 Page: 64 Type: AP

21. After Home Depot gathers information related to its marketing environment, it attempts to define current environmental changes and predict future changes. This determines possible opportunities and threats facing the company. It illustrates the process that is calleda) environmental scanning.b) survey of environment.c) marketing.d) environmental analysis.e) marketing information processing.Ans: d AACSB: Analytic, Strategy DF: M LO: LO1 Page: 65 Type: AP

22. Marketers who attempt to influence and change the various environmental forces have a(n) _____ response to these forces.a) reactiveb) inactivec) variabled) positivee) proactiveAns: e AACSB: Communication, Marketing plan DF: M LO: LO1 Page: 65 Type: KN


57 Chapter 3: The Marketing Environment23. Toyota has developed aluminum car bodies that are 100 percent recyclable and light enough to help

conserve fuel. What kind of response is this to environmental forces?a) Proactiveb) Competitivec) Reactived) Inactivee) ControllableAns: a AACSB: Analytic, Marketing Plan DF: M LO: LO1 Page: 65–66 Type: AP

24. Although Matt's company engages in environmental scanning and analysis, he feels more comfortable changing his policies and strategies to adapt to environmental forces rather than trying to influence these forces. Matt has a(n) _____ approach to marketing environmental forces.a) inactiveb) reactivec) proactived) negativee) variableAns: b AACSB: Analytic, Strategy DF: M LO: LO1 Page: 65–66 Type: AP

25. Marketers who view political forces as being beyond their control are taking a ___________ response toward these forces.a) reactiveb) aggressivec) proactived) competitivee) liberalAns: a AACSB: Communication, Marketing plan, strategy DF: M LO: LO1 Page: 65 Type: CH

26. The textbook suggests that the best approach a firm can take in responding to marketing environmental forces isa) reactive.b) proactive.c) inactive.d) active.e) variable.Ans: e AACSB: Communication, Marketing plan, strategy DF: E LO: LO1 Page: 66 Type: KN

27. When marketers define their target market, they establish a set ofa) technologies.b) monopolies.c) competitors.d) government regulations.e) sociocultural forces.Ans: c AACSB: Communication, Marketing plan, strategy DF: M LO: LO1 Page: 66 Type: KN


Chapter 3: The Marketing Environment 5828. Companies that market products with similar features, benefits, and prices to the same customer group are

known as _________ competitors.a) genericb) productc) brandd) total budgete) monopolisticAns: c AACSB: Communication, Marketing plan DF: D LO: LO2 Page: 66 Type: KN

29. Which of the following would represent a brand competitor for Ford's Escape Hybrid sport utility vehicle?a) Honda Pilotb) Toyota's Highlander Hybridc) Honda Civic Hybridd) Taxi ridee) Chevrolet Tahoe rented from AvisAns: b AACSB: Communication, Marketing plan DF: D LO: LO2 Page: 66 Type: AP

30. __________ competitors provide very different products that satisfy the same basic customer need.a) Brandb) Genericc) Total budgetd) Producte) MarketingAns: b AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 66 Type: KN

31. ___________ competitors are those that compete in the same product class, but their products have different features, benefits, and prices.a) Total budgetb) Genericc) Brandd) Producte) PriceAns: d AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 66 Type: KN

32. Which of the following is not at the generic competitor level for Ford's Expedition sport utility vehicle?a) Saturn SKYb) Enterprise car rentalc) Harley Davidson motorcycled) Schwinn mountain bikee) Taxi cab rideAns: a AACSB: Analytic, Marketing Plan DF: M LO: LO2 Page: 66 Type: AP

33. Marketers primarily focus their environmental analysis on ____ competitors.a) brandb) productc) total budgetd) generice) monopolisticAns: a AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 66 Type: AP


59 Chapter 3: The Marketing Environment34. In today's marketing environment, competitors can take on many forms. For example, Diet Coke can be

seen as a competitor to Wrigley's Double Mint chewing gum. In this circumstance, these two products are described as ___________ competitors.a) genericb) productc) total budgetd) monopolistice) pureAns: c AACSB: Analytic, Marketing Plan DF: D LO: LO2 Page: 66 Type: AP

35. Due to limited resources, a consumer decided to serve Hawaiian Punch to a New Year's Eve party crowd instead of Korbel champagne. As a result of this action, Korbel and Hawaiian Punch can be viewed as ___________ competitors.a) genericb) productc) total budgetd) oligopolistice) pureAns: a AACSB: Analytic, Marketing Plan DF: D LO: LO2 Page: 66 Type: AP

36. Companies that compete for the same limited financial resources of the same customers are known as _________ competitors.a) oligopolicb) total budgetc) genericd) producte) brandAns: b AACSB: Communication, Marketing plan DF: D LO: LO2 Page: 66-67 Type: KN

37. ___________ competitors are the most significant to marketers because buyers see the different products of these firms as direct substitutes for each other.a) Oligopolicb) Total budgetc) Genericd) Producte) BrandAns: e AACSB: Analytic, Marketing Plan DF: E LO: LO2 Page: 66-67 Type: KN

38. Mixed Concrete cannot be shipped farther than twenty-five miles because the concrete might harden in the truck. Citrus County Concrete Company is the only supplier of mixed concrete to customers within a thirty-mile radius. Citrus County Concrete is an example of which one of the following competitive structures?a) Monopolyb) Oligopolyc) Monopolistic competitiond) Pure competitione) MonopsonyAns: a AACSB: Reflective Thinking, Marketing Plan DF: M LO: LO2 Page: 67 Type: AP


Chapter 3: The Marketing Environment 6039. The four major competitive structures are

a) monopolies, oligopolies, oligopolistic monopolies, and pure competition.b) pure competition, heavy competition, moderate competition, and light competition.c) brand, product, total budget, and generic.d) oligopolies, monopolies, monopolistic competition, and pure competition.e) monopolies, limited competition, oligopolistic competition, and pure competition.Ans: d AACSB: Communication, Marketing plan DF: D LO: LO2 Page: 67 Type: KN

40. What type of competitive structure exists when a firm produces a product that has no close substitutes?a) Monopolyb) Oligopolyc) Monopolistic competitiond) Pure competitione) Mixed competitionAns: a AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 67 Type: KN

41. The type of competitive structure that exists in the case where there are almost no substitutes for a product is a(n)a) monopolistic competition.b) oligopoly.c) pure competition.d) monopoly.e) noncompetition.Ans: d AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 67 Type: KN

42. The American automobile industry used to be dominated by “The Big Three,” including General Motors, Ford, and Chrysler. However, as many more foreign competitors began influencing this market, the American companies had to modify and differentiate their products. The automobile industry moved from a(n) ______ structure to a(n) _______ structure.a) monopolistic; oligopolisticb) oligopolistic; pure competitionc) oligopolistic; monopolistic competitiond) monopolistic competition; pure competitione) monopolistic; monopolistic competitionAns: c AACSB: Reflective Thinking, Marketing Plan DF: M LO: LO2 Page: 67-69 Type: AP

43. The D-Lite Corporation produces a unique type of light bulb that is used in refrigerator manufacturing. D-Lite is the only maker of this light bulb, and there are no close substitutes for it. In this case, the D-Lite Corporation would bea) an oligopoly.b) a monopoly.c) involved in monopolistic competition.d) involved in perfect competition.e) involved in a perfect oligopoly.Ans: b AACSB: Analytic, Marketing Plan DF: E LO: LO2 Page: 67-69 Type: AP


61 Chapter 3: The Marketing Environment44. Which of the following firms would be most likely to have a monopoly for its competitive environment?

a) TimeWarner Cable TVb) Mitchell Truckingc) Continental Airlinesd) Rogers Plumbinge) Chemlawn Lawn CareAns: a AACSB: Analytic, Marketing Plan DF: M LO: LO2 Page: 67-69 Type: AP

45. Most marketers operate in a competitive environment of eithera) oligopoly or monopoly.b) oligopoly or monopolistic competition.c) oligopoly or pure competition.d) monopoly or pure competition.e) pure competition or monopolistic competition.Ans: b AACSB: Analytic, Marketing Plan DF: M LO: LO2 Page: 67-68 Type: KN

46. When a firm has many potential competitors and tries to develop a marketing strategy to differentiate its products from the competitors' products, a(n) _______ structure exists in the competitive environment.a) oligopolyb) monopolyc) pure competitiond) oligopolistic competitione) monopolistic competitionAns: e AACSB: Analytic, Marketing Plan DF: E LO: LO2 Page: 67-68 Type: KN

47. What type of competitive structure exists when just a few sellers control a large portion of the supply of a product?a) Monopolyb) Oligopolyc) Monopolistic competitiond) Mixed competitione) Pure competitionAns: b AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 67-68 Type: KN

48. If in an industry, none of the many sellers could influence the price of supply of its products, this industry would be characterized asa) pure competition.b) a monopoly.c) monopolistic competition.d) oligopolistic competition.e) an oligopoly.Ans: a AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 67-68 Type: KN


Chapter 3: The Marketing Environment 6249. The tobacco industry in the United States is dominated by three large companies. When any one of these

companies changes its price on tobacco products, the other two companies quickly adjust their prices to match it. From these characteristics, the tobacco industry could best be described asa) price sensitive.b) opportunistic.c) monopolistic competition.d) an oligopoly.e) a monopoly.Ans: d AACSB: Analytic, Marketing Plan DF: M LO: LO2 Page: 67-68 Type: AP

50. J. Pitner Clothing is a medium-size specialty men's and women's clothing store in a market with many other specialty stores, department stores, and discounters. It has established a reputation for offering high-quality, fashionable merchandise with quality service. J. Pitner's competitive environment would best be characterized asa) a monopoly.b) an oligopoly.c) monopolistic competition.d) pure competition.e) faceted competition.Ans: c AACSB: Analytic, Marketing Plan DF: D LO: LO2 Page: 67-69 Type: AP

51. In general, which of the following competitive structures is an organization least likely to operate?a) Monopolyb) Monopolistic competitionc) Oligopolyd) Elastic competitione) Pure competitionAns: e AACSB: Analytic, Marketing Plan DF: M LO: LO2 Page: 67-69 Type: CH

52. The two least common competitive structures at the opposite ends of the continuum area) monopolies and oligopolies.b) pure competition and monopolies.c) monopolistic competition and monopolies.d) pure competition and no competition.e) oligopolies and pure competition.Ans: b AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 67-69 Type: KN

53. The best approach for a company to take when monitoring its competitors isa) watching for increases and decreases in competitors' prices and match them.b) analyzing all information that is readily available about competitors.c) sending employees to competitors' offices and factories to observe their actions.d) developing a system for gathering ongoing information about competitors.e) reading important business publications such as The Wall Street Journal.Ans: d AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 69 Type: KN


63 Chapter 3: The Marketing Environment54. Which of the following attributes of a Toyota Scion would be most appropriate to emphasize in television

commercials during an economic recession?a) Stereo systemb) Prestigec) Durabilityd) Leg roome) Sporty designAns: c AACSB: Analytic, Strategy DF: E LO: LO2 Page: 70 Type: AP

55. In a period of economic recovery, the best marketing strategy for FedEx would be characterized by which of the following features?a) Flexibilityb) Aggressivenessc) Austerityd) Retrenchmente) BoldnessAns: a AACSB: Analytic, Strategy DF: M LO: LO2 Page: 69-70 Type: AP

56. Assuming that inflation is low, high buying power characterizes the _____ stage of the business cycle.a) prosperityb) depressionc) recoveryd) successione) recessionAns: a AACSB: Analytic, Strategy DF: E LO: LO2 Page: 69-70 Type: KN

57. During which stage of the business cycle is unemployment low and total income relatively high?a) Repressionb) Prosperityc) Recoveryd) Recessione) DepressionAns: b AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 69-70 Type: CH

58. Total buying power declines during periods of economica) recovery.b) prosperity.c) recession.d) uncertainty.e) expansion.Ans: c AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 70 Type: KN

59. Although marketing theory supports the contrary, it is more probable that marketing budgets will be cut during periods of economica) recovery.b) prosperity.c) recession.d) uncertainty.e) expansion.Ans: c AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 70 Type: KN


Chapter 3: The Marketing Environment 6460. Consumers begin to become more price and value conscious during periods of

a) inflation.b) prosperity.c) recession.d) depression.e) recovery.Ans: c AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 70-71 Type: KN

61. Consumer confidence is at a low during periods ofa) recession.b) prosperity.c) recovery.d) slowdown.e) depression.Ans: e AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 70 Type: KN

62. Consumer confidence and willingness to spend begins to increase during periods of _____, and marketers must remain very flexible to make the necessary adjustments.a) depressionb) prosperityc) recoveryd) growthe) recessionAns: c AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 70 Type: KN

63. The strength of a person's “buying power” depends on economic conditions anda) level of income.b) size of resources that can be traded in an exchange.c) how much a consumer will buy.d) a consumer's spending pattern.e) levels of median wealth.Ans: b AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 70 Type: KN

64. Why are marketers interested in consumers' levels of disposable income?a) It accurately predicts future buying power.b) It increases current buying power.c) It is what is left after taxes and savings to buy luxuries with.d) It is a ready source of buying power.e) It is essential for forecasting future business trends.Ans: d AACSB: Analytic, Marketing Plan DF: M LO: LO2 Page: 70 Type: CH

65. The amount of money received through wages, rents, investments, pensions, and subsidies is calleda) income.b) wealth.c) discretionary income.d) prosperity.e) credit.Ans: a AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 70 Type: KN


65 Chapter 3: The Marketing Environment66. If Toby Roberts has an income of $30,000, pays $6,000 in rent, $1,200 in utilities, and $5,000 in taxes per

year, his disposable income isa) $7,800.b) $14,000.c) $9,000.d) $25,000.e) $20,000.Ans: d AACSB: Analytic, Marketing Plan DF: D LO: LO2 Page: 70 Type: AP

67. Which category of income are marketers most interested in?a) Wealthb) Disposable incomec) Discretionary incomed) Total incomee) Extra incomeAns: b AACSB: Analytic, Marketing Plan DF: M LO: LO2 Page: 70 Type: KN

68. What is the most important factor in distinguishing disposable income from income?a) Taxesb) Housingc) Employment levelsd) Consumer spendinge) SavingAns: d AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 70 Type: CH

69. A person's buying power is a function ofa) disposable income.b) past income, natural resources, and financial resources.c) wages, rents, and investments.d) income, wealth, and credit.e) discretionary income.Ans: d AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 70 Type: KN

70. Discretionary income is associated with all of the following excepta) automobiles.b) education.c) pets.d) furniture.e) food.Ans: e AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 71 Type: CH

71. Heidi decided to spend some of her saved money on tickets to a Cold Play concert coming to town, and now she is planning on buying a new outfit for the concert. What type of resources is Heidi making decisions about?a) Disposable incomeb) Wealthc) Buying powerd) Discretionary incomee) Savings incomeAns: d AACSB: Analytic, Marketing Plan DF: M LO: LO2 Page: 71 Type: AP


Chapter 3: The Marketing Environment 6672. The accumulation of past income, natural resources, and financial resources is known as

a) income.b) collected income.c) credit.d) wealth.e) savings.Ans: d AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 71 Type: KN

73. Which of the following companies would probably be most interested in tracking discretionary income levels?a) Safeway food storesb) BMW automobilesc) Gulf States Utilitiesd) General Millse) Florida Orange GrowersAns: b AACSB: Analytic, Marketing Plan DF: E LO: LO2 Page: 71 Type: AP

74. By offering credit and financing through its GMAC division, General Motors is trying to help consumersa) expand future buying power at the expense of current buying power.b) expand disposable income at the expense of discretionary income.c) expand current buying power at the expense of future buying power.d) expand both disposable income and wealth.e) decrease both disposable and discretionary income.Ans: c AACSB: Analytic, Marketing Plan DF: M LO: LO2 Page: 69-71 Type: AP

75. When using credit to make purchases, consumers area) decreasing current buying power and increasing future buying power.b) increasing their present discretionary income to extend purchasing power.c) putting themselves at significant risk of financial disaster.d) forgoing the accumulation of wealth to increase current income.e) increasing current buying power at the expense of future buying power.Ans: e AACSB: Analytic, Marketing Plan DF: M LO: LO2 Page: 71 Type: KN

76. Which of the following terms refers to consumers' propensity to buy?a) Disposable incomeb) Discretionary incomec) Buying power indexd) Buying powere) Willingness to spendAns: e AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 72 Type: KN

77. Although Shelby's income is comfortable, she hesitates to purchase a new car because she is concerned about how poor economic conditions may affect her company and in turn her future employment. Shelby lacksa) disposable income.b) willingness to spend.c) buying power.d) credit.e) discretionary income.Ans: b AACSB: Analytic, Marketing Plan DF: E LO: LO2 Page: 72 Type: AP


67 Chapter 3: The Marketing Environment78. Texas rice farmers wish to get their product into the Japanese market but are hindered by a complex maze of

regulations imposed by the Japanese government. The farmers are most likely to attempt to influence which aspect of the marketing environment?a) Socioculturalb) Technologicalc) Competitived) Economice) PoliticalAns: e AACSB: Analytic, Marketing Plan DF: E LO: LO3 Page: 72-73 Type: AP

79. Textile companies historically face issues concerning the use of child labor in foreign countries and the various regulations created concerning this labor. The type of marketing environment forces executives for these companies are most likely to try to influence are ______ forces.a) economicb) competitivec) politicald) environmentale) socioculturalAns: c AACSB: Analytic, Marketing Plan DF: M LO: LO3 Page: 72-73 Type: AP

80. Which of the following is not a reason that marketers try to maintain good relations with elected political officials?a) Political officials can influence how much a government agency purchases and from whom.b) Political officials can play key roles in helping organizations secure foreign markets.c) Political officials well disposed toward particular firms or industries are less likely to create or

enforce laws and regulations unfavorable to these firms.d) Political officials can accept direct corporate campaign contributions.e) Political officials who believe that companies in a particular industry are making honest efforts to

control pollution are unlikely to create and enforce highly restrictive pollution control laws over that industry.

Ans: d AACSB: Reflective Thinking, Strategy DF: M LO: LO3 Page: 72-73 Type: CH

81. One way for corporations to attempt to influence the political environment is througha) special benefits to employees.b) direct contributions to candidates.c) contributions to elected officials.d) contributions to political action committees.e) organizing political action committees.Ans: e AACSB: Analytic, Marketing Plan DF: E LO: LO3 Page: 72-73 Type: CH

82. Which of the following acts was enacted to prevent businesses from restraining trade and monopolizing markets?a) Sherman Antitrust Actb) Clayton Actc) Federal Trade Commission Actd) Robinson-Patman Acte) Wheeler-Lea ActAns: a AACSB: Communication, Strategy DF: M LO: LO4 Page: 74 Type: KN


Chapter 3: The Marketing Environment 6883. If all the gas stations in a city collaborated to determine what gas prices should be charged, they would be

violating thea) Wheeler-Lea Act.b) Clayton Act.c) Robinson-Patman Act.d) Sherman Antitrust Act.e) Celler-Kefauver Act.Ans: d AACSB: Communication, Strategy DF: E LO: LO4 Page: 74 Type: AP

84. Which of the following provides protection for and regulates brand names, brand marks, trade names, and trademarks?a) Sherman Actb) Clayton Actc) Robinson-Patman Actd) Lanham Acte) Celler-Kefauver ActAns: d AACSB: Communication, Strategy DF: D LO: LO4 Page: 74 Type: KN

85. Procompetitive laws are those designed toa) preserve competition.b) protect the consumer.c) ensure product safety.d) reduce competition.e) limit business lobbying of government officials.Ans: a AACSB: Communication, Strategy DF: E LO: LO4 Page: 74 Type: KN

86. International Office Supplies Wholesaler charges different prices to its various customers without any legal justification. This company is in violation of thea) Sherman Antitrust Act.b) Wheeler-Lea Act.c) Lanham Act.d) Federal Trade Commission Act.e) Robinson-Patman Act.Ans: e AACSB: Communication, Strategy DF: E LO: LO4 Page: 74-75 Type: AP

87. Price discrimination is prohibited by the ___________ Act.a) Shermanb) Wheeler-Leec) Robinson-Patmand) Celler-Kefauvere) Consumer Goods PricingAns: c AACSB: Communication, Strategy DF: D LO: LO4 Page: 74-75 Type: KN

88. The 1990 Nutritional Labeling and Education Act directly prohibitsa) exaggerated claims made by health and fitness products.b) putting the words “cholesterol-free” on any food package.c) putting nutritional information on most food products.d) exaggerated health claims on food packages.e) the use of any health claim on food packaging.Ans: d AACSB: Communication, Strategy DF: E LO: LO4 Page: 74 Type: KN


69 Chapter 3: The Marketing Environment89. Consumer protection legislation deals with all of the following legal concerns except

a) consumer safety.b) sale of hazardous products.c) monopolistic practices.d) information disclosure.e) health claims on food packages.Ans: c AACSB: Communication, Strategy DF: M LO: LO4 Page: 75 Type: CH

90. The Children's Online Privacy Protection Act prohibits websites and Internet providers froma) selling products to children under the age of 18b) seeking personal information from children under the age of 13c) selling products to children under the age of 12d) doing research about the buying habits of children under 15e) selling products to children under the age of 15Ans: b AACSB: Analytic, Marketing Plan DF: D LO: LO4 Page: 75 Type: KN

91. Which of the following are the most frequently sentenced organizational crimes?a) False advertising and price discriminationb) Price discrimination and fraudc) Fraud and antitrust violationsd) Price fixing and antitrust violationse) Fraud and price fixingAns: c AACSB: Communication, Strategy DF: M LO: LO4 Page: 75 Type: KN

92. Of all the federal regulatory units, the ____________ most heavily influences marketing activities.a) Food and Drug Administration (FDA)b) Federal Communications Commission (FCC)c) Enviornmental Protection Agency (EPA)d) Federal Trade Commission (FTC)e) Federal Power Commission (FPC)Ans: d AACSB: Communication, Strategy DF: M LO: LO4 Page: 77 Type: KN

93. 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 Commissionb) Children's Online Protection Actc) Food and Drug Administrationd) Environmental Protection Agencye) National Advertising Review BoardAns: a AACSB: Communication, Strategy DF: E LO: LO4 Page: 77 Type: KN

94. The FTC can issue a cease-and-desist order, which is an injunction toa) 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.Ans: b AACSB: Communication, Strategy DF: E LO: LO4 Page: 77 Type: KN


Chapter 3: The Marketing Environment 7095. Which of the following agencies regulates marketing activities the most?

a) Environmental Protection Agencyb) Food and Drug Administrationc) Federal Trade Commissiond) Better Business Bureaue) National Advertising Review BoardAns: c AACSB: Communication, Strategy DF: E LO: LO4 Page: 76 Type: KN

96. Which of the following industries is most commonly regulated by state regulatory agencies?a) Automobile manufacturersb) Cigarette producersc) Clothing manufacturersd) Television networkse) Utility companiesAns: e AACSB: Communication, Strategy DF: M LO: LO4 Page: 77 Type: KN

97. 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 regulationb) State regulationc) City regulationd) Self-regulatione) Social regulationAns: d AACSB: Analytic, Strategy DF: M LO: LO4 Page: 78-79 Type: AP

98. Which of the following regulatory groups is a system of nongovernmental, independent, local regulatory agencies supported by local businesses?a) The Chamber of Commerceb) The National Advertising Review Boardc) The National Advertising Divisiond) The Better Business Bureaue) American Marketing AssociationAns: d AACSB: Analytic, Strategy DF: E LO: LO4 Page: 78-79 Type: KN

99. 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 ina) legislation.b) lobbying.c) self-regulation.d) environmental scanning.e) trade restraint.Ans: c AACSB: Analytic, Strategy DF: E LO: LO4 Page: 78-79 Type: AP

100. Jared Bledsoe hires a local landscape firm to plant trees and shrubs in his yard. The firm plants mostly dead plants but refuses to return Jared's money or replace the dead items. Jared's best course of action would be to contact thea) police.b) Federal Trade Commission.c) Sherman Commission.d) Better Business Bureau.e) federal district court.Ans: d AACSB: Reflective Thinking DF: E LO: LO4 Page: 78-79 Type: AP


71 Chapter 3: The Marketing Environment101. 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.Ans: a AACSB: Communication DF: M LO: LO4 Page: 78 Type: KN

102. In its advertisements, Johnson's Hair Care Products claims that its KLTR-14 gel will restore the hair of bald men. Members of the NARB believe the claim is unsupportable. What action can the NARB take?a) Force Johnson's to stop running the advertisement.b) File a complaint with the Federal Trade Commission.c) Fine Johnson's for each time the ad appears.d) Sue Johnson's Hair Care Products in federal court.e) Sue Johnson's Hair Care Products in state court.Ans: b AACSB: Analytic DF: M LO: LO4 Page: 76-79 Type: AP

103. 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.Ans: d AACSB: Analytic, Marketing Plan DF: M LO: LO4 Page: 78-79 Type: CH

104. 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.Ans: b AACSB: Analytic, Marketing Plan DF: M LO: LO4 Page: 78-79 Type: KN

105. 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.Ans: e AACSB: Communication DF: D LO: LO4 Page: 78-79 Type: KN

106. What national self-regulatory organization screens ads?a) Federal Advertising Review Divisionb) National Advertising Review Boardc) Federal Communications Commissiond) Consumer Federation of Americae) Better Business BureauAns: b AACSB: Communication DF: E LO: LO4 Page: 79 Type: KN


Chapter 3: The Marketing Environment 72107. 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.Ans: b AACSB: Communication, Technology DF: E LO: LO5 Page: 79 Type: KN

108. More than half of the research of technology created is paid for bya) corporations.b) state and local governments.c) the federal government.d) large universities.e) private investors.Ans: c AACSB: Communication, Technology DF: M LO: LO5 Page: 79 Type: KN

109. Newsweek enhances its visibility to readers by making its magazine available on the Internet. Newsweek is capitalizing on which environmental force?a) Economicb) Competitivec) Politicald) Legal and regulatorye) TechnologicalAns: e AACSB: Technology, Marketing Plan DF: E LO: LO5 Page: 79 Type: AP

110. The rapid adoption of the use of the Internet has resulted in rapid changes such as the increase of distance learning, changing social networks, and concerns such as copyright and privacy issues that the government is focusing on. These effects of technology are collectively known asa) reach.b) the self-sustaining nature.c) growth.d) technological advancement.e) dynamics.Ans: e AACSB: Technology, Marketing Plan DF: D LO: LO5 Page: 80 Type: KN

111. Which of the following is the best example of utilizing technology to improve consumer relationships?a) Waiters recording orders on handheld computersb) Surveying customers to determine their needsc) Responding to changes in competitors' pricesd) Introducing stringent package standardse) Requiring dolphin-safe tunaAns: a AACSB: Technology DF: D LO: LO5 Page: 80-81 Type: CH

112. Technology assessment isa) 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.Ans: b AACSB: Technology DF: E LO: LO5 Page: 81 Type: KN


73 Chapter 3: The Marketing Environment113. When Cisco Systems attempts to anticipate the effect of new products and processes on its own innovations,

other business organizations, and society in general, the firm is engaging ina) product differentiation.b) monopolistic competition.c) technology assessment.d) distinctive promotional methods.e) innovative marketing.Ans: c AACSB: Communication, Strategy DF: E LO: LO5 Page: 81 Type: AP

114. 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 ina) demographics.b) cultural values.c) income levels.d) consumerism.e) subcultures.Ans: a AACSB: Diversity DF: E LO: LO5 Page: 81 Type: CH

115. 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) technologicalb) politicalc) socioculturald) self-regulatione) strategicAns: c AACSB: Analytic, Strategy DF: E LO: LO6 Page: 81-82 Type: AP

116. By the turn of the twentieth century, the population of the United States had shifted to three large racial and ethnic groups. These groups area) blacks, Hispanics, and whites.b) Asians, blacks, and whites.c) Asians, blacks, and Hispanics.d) blacks, Indians, and whites.e) Hispanics, Indians, and whites.Ans: a AACSB: Diversity DF: D LO: LO6 Page: 83 Type: KN

117. In the near future, what subculture will become the second largest group in the United States?a) Whitesb) African Americansc) Asiansd) Hispanicse) Native AmericansAns: d AACSB: Diversity, Strategy DF: E LO: LO6 Page: 83 Type: KN


Chapter 3: The Marketing Environment 74118. 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 Americanab) Bonus coupons in Coca-Cola twelve-packsc) Ads featuring Hispanic actors and Tejano musicd) Ads in The New Yorker and Reader's Digeste) Ads aimed at childrenAns: c AACSB: Diversity, Strategy DF: M LO: LO6 Page: 83 Type: AP

119. Organizations that provide smoke-free environments or low-fat products are responding to changes ina) technology.b) the legal environment.c) demographics.d) cultural values.e) political forces.Ans: d AACSB: Diversity, Strategy DF: E LO: LO6 Page: 83-85 Type: CH

120. 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 ina) federal law.b) cultural values.c) demographics.d) consumerism.e) technological forces.Ans: b AACSB: Communication, Marketing plan, strategy DF: M LO: LO6 Page: 83-85 Type: AP

121. Consumerism is aa) 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.Ans: d AACSB: Communication, Marketing plan DF: E LO: LO6 Page: 85 Type: KN

122. A group of protesters carries signs encouraging people to boycott Joe's Market, a small grocery store in an urban area. The protesters claim that Joe's takes unfair advantage of elderly and minority consumers. This protest is part of what we see today as thea) cultural diversity movement.b) civil rights movement.c) urban unrest cycle.d) procompetitive movement.e) consumerism movement.Ans: e AACSB: Communication, Marketing plan DF: M LO: LO6 Page: 85 Type: AP


75 Chapter 3: The Marketing EnvironmentUse the following to answer questions 123-126:

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.

A corporate attorney was notified and began to look into the situation. The attorney found that Soljur Sports was selling a similar number of skateboards to a competitive chain for $10 less per skateboard. The attorney for Meyers' Sporting Goods immediately filed a complaint with the Federal Trade Commission.

123. 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) Shermanb) Wheeler-Leec) Robinson-Patmand) Celler-Kefauvere) Consumer Goods PricingAns: c AACSB: Analytic, Product, Strategy DF: M LO: LO4 Page: 74-75 Type: AP

124. If the Federal Trade Commission believes that Soljur Sporting Goods is acting in violation of the law, the first move for the FTC is toa) 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 associationAns: b AACSB: Analytic, Marketing Plan DF: M LO: LO4 Page: 77-79 Type: AP

125. 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 Commissionb) National Advertising Review Boardc) Consumer Product Safety Commissiond) Better Business Bureaue) Office of Consumer AffairsAns: d AACSB: Analytic, Marketing Plan DF: E LO: LO4 Page: 78-79 Type: AP

126. 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.Ans: c AACSB: Analytic, Marketing Plan DF: M LO: LO4 Page: 78-79 Type: AP


Chapter 3: The Marketing Environment 76Use the following to answer questions 127-131:

A new U.S. automobile company, Specialty Motors, was established in 2004. In 2008, a recession caused disposable income to decline, and the annual amount of dollars spent by consumers for automobiles dropped drastically. Specialty Motors faced the problem of trying to determine whether the economy would turn toward prosperity or toward depression. No matter what happened, Specialty Motors was also worried about an impending global steel shortage, which would make a big difference in its future marketing plans. The economy might recover from the recession, but the automobile makers might be forced to ask consumers to curtail consumption just when the hope of a better year was finally in sight. All in all, the future looked dismal for Specialty Motors.

127. Although all types of competition will affect Specialty Motors' marketing performance, it will be most concerned about _________ competitors.a) total budgetb) genericc) Japanesed) producte) brandAns: e AACSB: Analytic, Marketing Plan DF: E LO: LO2 Page: 66 Type: AP

128. In what type of competitive structure is Specialty Motors operating?a) Monopolyb) Oligopolyc) Monopolistic competitiond) Perfect competitione) MonopsonyAns: c AACSB: Analytic, Marketing Plan DF: M LO: LO2 Page: 67 Type: AP

129. When Specialty Motors is operating during a recessionary period, its promotion efforts should stressa) low cost.b) value and utility.c) the styling of its cars.d) the status of owning a new car.e) the variety of colors from which to select.Ans: b AACSB: Analytic, Marketing Plan DF: M LO: LO2 Page: 70 Type: AP

130. Total disposable income is at its lowest during which of the following?a) Stagflationb) Recessionc) Recoveryd) Depressione) InflationAns: d AACSB: Analytic, Marketing Plan DF: E LO: LO2 Page: 70-71 Type: AP

131. The income a consumer would use to purchase a Specialty Motors automobile is considered ___________ income.a) discretionaryb) buying powerc) dispositiond) consumer spendinge) comprehensive spendingAns: a AACSB: Analytic, Marketing Plan DF: E LO: LO2 Page: 71 Type: AP


77 Chapter 3: The Marketing Environment132. T F The marketing environment consists of external forces that directly or indirectly influence an

organization's acquisition of inputs and generation of outputs.Ans: True AACSB: Communication, Strategy DF: E LO: LO1 Page: 64 Type: KN

133. T F Environmental analysis is the process of collecting information about forces in the marketing environment.Ans: False AACSB: Communication, Strategy DF: E LO: LO1 Page: 64 Type: KN

134. T F Environmental analysis helps managers identify potential threats and opportunities linked to environmental changes.Ans: True AACSB: Communication, Strategy DF: E LO: LO1 Page: 64 Type: KN

135. T F Brand competitors market products with similar features, benefits, and prices to the same customers.Ans: True AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 66 Type: KN

136. T F Product competitors provide very different products that solve the same problem or satisfy the same basic customer need.Ans: False AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 66 Type: KN

137. T F The number of firms that control the supply of a product may affect the strength of competition.Ans: True AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 67 Type: KN

138. T F A monopoly exists when a firm with many potential competitors attempts to develop a marketing strategy to differentiate its products.Ans: False AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 67 Type: KN

139. T F An oligopoly exists when a firm offers a product that has no close substitutes, making the firm the sole source of supply.Ans: False AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 67-68 Type: KN

140. T F Pure competition is a common competitive environment.Ans: False AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 67-68 Type: KN

141. T F Monitoring the competitive environment guides marketers in developing competitive advantages.Ans: True AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 69 Type: KN

142. T F Economic forces determine the size and strength of demand for products.Ans: True AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 69 Type: KN


Chapter 3: The Marketing Environment 78

143. T F A recession is characterized by extremely high unemployment, very low wages, minimal total disposable income, and lack of consumer confidence in the economy.Ans: False AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 70 Type: KN

144. T F The strength of one's buying power depends partially on the state of the economy.Ans: True AACSB: Analytic, Marketing Plan DF: M LO: LO2 Page: 70 Type: KN

145. T F An individual's after-tax income is called his or her discretionary income, which is used for spending and/or saving.Ans: False AACSB: Communication, Marketing plan DF: M LO: LO2 Page: 71 Type: KN

146. T F Disposable income is used to pay taxes, spend, and save.Ans: False AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 70-71 Type: KN

147. T F The total amount of disposable income is affected by the amount of taxes consumers pay.Ans: True AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 70 Type: KN

148. T F Decreases in taxes lead to decreases in disposable income.Ans: False AACSB: Analytic, Marketing Plan DF: E LO: LO2 Page: 70 Type: KN

149. T F The amount of future income already committed to past credit agreements influences one's ability to use more credit.Ans: True AACSB: Analytic, Marketing Plan DF: M LO: LO2 Page: 71 Type: KN

150. T F Credit increases future buying power.Ans: False AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 71 Type: KN

151. T F An individual can have a high income and very little wealth.Ans: True AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 71 Type: KN

152. T F Wealth is an accumulation of past income and natural and financial resources.Ans: True AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 71 Type: KN

153. T F If a person has buying power, he or she is influenced only by a product's absolute price.Ans: False AACSB: Analytic, Marketing Plan DF: M LO: LO2 Page: 71 Type: KN

154. T F Wealth enables consumers to gain buying power.Ans: True AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 71 Type: KN

155. T F For a given level of buying power, the larger the family, the greater the willingness to spend.Ans: True AACSB: Analytic, Marketing Plan DF: M LO: LO2 Page: 72 Type: KN


79 Chapter 3: The Marketing Environment156. T F A factor that affects willingness to spend is general economic conditions.

Ans: True AACSB: Communication, Marketing plan DF: E LO: LO2 Page: 72 Type: KN

157. T F Political and legal forces in the marketing environment are highly interrelated.Ans: True AACSB: Analytic, Marketing Plan DF: E LO: LO3 Page: 72 Type: KN

158. T F Governments are big buyers, and the people who hold political offices often determine how much is purchased.Ans: True AACSB: Analytic, Marketing Plan DF: E LO: LO3 Page: 72-73 Type: KN

159. T F Political forces are beyond the control of marketers, and so they can only react to them.Ans: False AACSB: Analytic, Marketing Plan DF: M LO: LO3 Page: 72-73 Type: KN

160. T F 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.Ans: True AACSB: Analytic, Marketing Plan DF: M LO: LO3 Page: 72-73 Type: KN

161. T F Although laws limit corporate contributions to campaign funds, corporations sometimes contribute through their employees.Ans: True AACSB: Communication, Marketing plan DF: M LO: LO3 Page: 72-73 Type: KN

162. T F Many laws that directly influence marketing activities were enacted either to preserve a competitive atmosphere or to protect consumers.Ans: True AACSB: Analytic, Strategy DF: E LO: LO4 Page: 73 Type: KN

163. T F The Sherman Antitrust Act, along with several other laws, is a procompetitive law because it was created to preserve competition.Ans: True AACSB: Analytic, Strategy DF: E LO: LO4 Page: 74-75 Type: KN

164. T F Fraud and antitrust violations are the most frequently sentenced organizational crimes.Ans: True AACSB: Communication, Strategy DF: M LO: LO4 Page: 75 Type: KN

165. T F All marketers interpret laws and regulations conservatively and strictly to avoid violating a vague law.Ans: False AACSB: Analytic, Strategy DF: M LO: LO4 Page: 76 Type: KN

166. T F Because of overlapping areas of responsibilities of regulatory agencies, confusion and conflict regarding jurisdiction of marketing activities are common.Ans: True AACSB: Analytic, Strategy DF: M LO: LO4 Page: 76 Type: KN

167. T F The Food and Drug Administration influences marketing activities the most.Ans: False AACSB: Communication, Strategy DF: M LO: LO4 Page: 76 Type: KN

168. T F State and local regulatory agencies usually do not establish and enforce regulations that conflict with the actions of national regulatory agencies.Ans: True AACSB: Analytic, Strategy DF: E LO: LO4 Page: 77 Type: KN


Chapter 3: The Marketing Environment 80

169. T F Numerous self-regulatory programs have been created to stop or stall the development of laws and government regulatory groups that would regulate marketing practices.Ans: True AACSB: Analytic, Strategy DF: E LO: LO4 Page: 78 Type: KN

170. T F Although numerous regulatory forces arise from governmental sources, nongovernmental regulatory forces may also affect marketing decisions.Ans: True AACSB: Analytic, Strategy DF: E LO: LO4 Page: 78-79 Type: KN

171. T F A good example of a government regulatory group at the local level is the Better Business Bureau.Ans: False AACSB: Communication, Strategy DF: M LO: LO4 Page: 78 Type: KN

172. T F The Council of Better Business Bureaus and the FTC make up the National Advertising Review Board (NARB).Ans: False AACSB: Communication, Strategy DF: M LO: LO4 Page: 78-79 Type: KN

173. T F All members of an industry are bound to follow trade association guidelines.Ans: False AACSB: Communication, Strategy DF: M LO: LO4 Page: 79 Type: KN

174. T F Technology is the application of knowledge and tools to solve problems and perform tasks more efficiently.Ans: True AACSB: Technology, Strategy DF: E LO: LO5 Page: 79 Type: KN

175. T F Technological developments have a direct impact on creating and maintaining a marketing mix.Ans: True AACSB: Technology, Strategy DF: E LO: LO5 Page: 79 Type: KN

176. T F Technological changes do not directly affect what, how, when, and where products are marketed.Ans: False AACSB: Technology, Strategy DF: M LO: LO5 Page: 80 Type: KN

177. T F Personal computers and cellular phones are technology.Ans: False AACSB: Technology DF: E LO: LO5 Page: 80 Type: KN

178. T F Technology affects the types of products offered to consumers.Ans: True AACSB: Technology, Strategy DF: M LO: LO5 Page: 80 Type: KN

179. T F Technology can help marketers become more productive.Ans: True AACSB: Technology, Strategy DF: E LO: LO5 Page: 80 Type: KN

180. T F Firms always adopt and use new technology.Ans: False AACSB: Technology, Strategy DF: M LO: LO5 Page: 80 Type: KN

181. T F Through technology assessment, managers try to foresee the effects of new products and processes on the firm's operations and on society.Ans: True AACSB: Analytic, Technology, Strategy DF: M LO: LO5 Page: 81 Type: KN


81 Chapter 3: The Marketing Environment182. T F The three major components of sociocultural forces are demographic and diversity characteristics,

cultural values, and consumerism.Ans: True AACSB: Diversity, Strategy DF: E LO: LO6 Page: 81 Type: KN

183. T F The proportion of the U.S. population that will be over 65 years of age is expected to decline by the year 2050.Ans: False AACSB: Diversity, Strategy DF: M LO: LO6 Page: 81 Type: KN

184. T F The number of single men and women living alone is declining.Ans: False AACSB: Diversity, Strategy DF: E LO: LO6 Page: 82 Type: KN

185. T F An increasingly diverse cultural base in the United States means that marketers face increasingly diverse consumer markets.Ans: True AACSB: Diversity, Strategy DF: M LO: LO6 Page: 83 Type: KN

186. T F Changes in values have little effect on people's needs for products.Ans: False AACSB: Communication, Strategy DF: E LO: LO6 Page: 83 Type: KN

187. T F People have changed their values regarding the permanence of marriage, which in turn has led to an increased emphasis on people being happily married.Ans: True AACSB: Communication, Strategy DF: M LO: LO6 Page: 84-85 Type: KN

188. T F The major source of cultural values is the family.Ans: True AACSB: Communication DF: E LO: LO6 Page: 84-85 Type: KN

189. T F The major forces that make up the consumerism movement are consumer organizations and business organizations.Ans: False AACSB: Communication DF: M LO: LO6 Page: 85 Type: KN

190. T F 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.Ans: True AACSB: Communication DF: E LO: LO6 Page: 85 Type: KN


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Chapter 3- The Marketing Environment