Chapter 3 Analyzing The Marketing Environment: Principles of Marketing, 17e (Kotler/Armstrong)

Principles of Marketing, 17e (Kotler/Armstrong)
Chapter 3 Analyzing the Marketing Environment
1) Dan has been directed to study the forces close to a company that affect its ability to serve its
customers, such as the company, suppliers, marketing intermediaries, customer markets,
competitors, and publics. In this instance, Dan has been directed to study the ________ of the
company.
A) macroenvironment
B) microenvironment
C) technological environment
D) demographic environment
E) political environment
Answer: B
AACSB: Analytical thinking
Skill: Application
Objective: LO 3.1: Describe the environmental forces that affect the company's ability to serve
its customers.
Difficulty: Moderate
2) Which of the following terms is used to describe the actors and forces outside marketing that
affect marketing management's ability to build and maintain successful relationships with target
customers?
A) marketing environment
B) marketing orientation
C) strategic planning
D) target markets
E) marketing mix
Answer: A
Skill: Concept
its customers.
Difficulty: Easy
3) Which of the following is a component of a firm's microenvironment?

A) customer demographics
B) economic recessions
C) population shifts
D) marketing intermediaries
E) technological changes
Answer: D
Skill: Concept
its customers.
Difficulty: Easy
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4) Sam has been directed to study the demographic, economic, political, and cultural forces that
affect an organization. In this instance, Sam has been directed to study the ________ of the
organization.
A) macroenvironment
B) microenvironment
C) internal environment
D) marketing mix
E) marketing intermediaries
Answer: A
Skill: Application
its customers.
5) The interrelated departments within a company that influence marketing decisions form the
________ environment.
A) cultural
B) economic
C) company
D) political
E) technological
Answer: C
Skill: Concept
its customers.
Difficulty: Easy
6) Which is NOT part of the company environment that influences marketing decisions?
A) accounting
B) engineering
C) manufacturing
D) sales
E) retailers
Answer: E
Skill: Concept
its customers.
Difficulty: Easy
2
7) ________ provide the resources needed by a company to produce its goods and services.
A) Retailers
B) Marketing services agencies
C) Resellers
D) Suppliers
E) Financial intermediaries
Answer: D
Skill: Concept
its customers.
Difficulty: Easy
8) Sparex Inc. is a manufacturer of metal bolts that are used by Boilex Inc. to manufacture
heavy machineries. In this instance, Sparex acts as a ________.
A) financial intermediary
B) supplier
C) retailer
D) customer
E) local public
Answer: B
Skill: Application
its customers.
9) Jonathan works for a firm that assists companies in promoting, distributing, and selling their
products to end consumers. The firm Jonathan works for is a ________.
A) licensor
B) supplier
C) marketing intermediary
D) local public
E) general public
Answer: C
Skill: Application
its customers.
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10) ________ help companies stock and move goods from their points of origin to their
destinations.
A) Retailers
B) Physical distribution firms
C) Marketing services agencies
D) Resellers
E) Suppliers
Answer: B
Skill: Concept
its customers.
Difficulty: Easy
11) ________ include banks, credit companies, insurance companies, and other businesses that
help insure against the risks associated with the buying and selling of goods.
A) Financial intermediaries
B) Physical distribution firms
C) Resellers
D) Marketing services agencies
E) Wholesalers
Answer: A
Skill: Concept
its customers.
Difficulty: Easy
12) Maria works for Sigma Inc., a firm that helps companies target and promote their products
to the right markets. Sigma is most likely a ________.
A) financial intermediary
B) physical distribution firm
C) marketing services agency
D) reseller
E) wholesaler
Answer: C
Skill: Application
its customers.
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13) LandPort Transportation and Omega Warehousing help companies move and stock goods
from their manufacturing plants to their destinations. These two businesses are examples of
________.
A) resellers
B) marketing services agencies
C) financial intermediaries
D) physical distribution firms
E) wholesalers
Answer: D
Skill: Application
its customers.
14) Boxes, Inc. sells products to end users or to other companies that will sell to end users.
Boxes, Inc. is a ________.
A) reseller
B) marketing services agencies
C) financial intermediaries
D) physical distribution firms
E) wholesalers
Answer: A
Skill: Application
its customers.
15) Which of the following groups influences the company's ability to obtain funds?
A) financial publics
B) local publics
C) general publics
D) citizen-action publics
E) internal publics
Answer: A
Skill: Concept
its customers.
Difficulty: Easy
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16) Which of the following is true with regard to media publics?
A) The primary function of this group is to protect the interests of minority groups.
B) This group carries news, features, and editorial opinion.
C) The primary function of this group is to critique the marketing decisions of companies.
D) This group includes neighborhood residents and community organizations.
E) This group directly influences the company's ability to obtain funds.
Answer: B
Skill: Concept
its customers.
17) Companies can succeed against their competitors by all of the following EXCEPT
________.
A) providing greater customer value and satisfaction
B) better meeting the needs of target customers
C) positioning their offerings strongly against competitors' offerings in the minds of consumers
D) considering their own size and position compared to the competition
E) providing the same product as the competition
Answer: E
Skill: Application
its customers.
18) A company's marketing decisions may be questioned by consumer organizations,

environmental groups, minority groups, and others. These organizations and groups are also
known as ________.
A) media publics
B) marketing intermediaries
C) customers
E) internal publics
Answer: D
Skill: Concept
its customers.
Difficulty: Easy
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19) A consumer organization in Ohio has challenged the marketing decision of a local firm
alleging it to be against the larger social interest. In this instance, the firm is challenged by a(n)
________ public.
A) internal
B) general
C) government
D) citizen-action
E) media
Answer: D
Skill: Concept
its customers.
Difficulty: Easy
20) Which group includes neighborhood residents and community organizations?

A) local publics
B) government publics
C) internal publics
E) media publics
Answer: A
Skill: Concept
its customers.
Difficulty: Easy
21) Cape Sky Inc., an international insurance and financial services company, is the primary
sponsor of the annual New York City Marathon, which is attended by over one million fans and
watched by approximately 300 million viewers worldwide. The Cape Sky logo and name are
displayed throughout the racecourse. Cape Sky most likely sponsors this event in order to
appeal to which of the following types of publics?
A) financial publics
B) citizen-action publics
C) government publics
D) general publics
E) internal publics
Answer: D
Skill: Application
its customers.
Difficulty: Challenging
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22) Workers, managers, and members of the board are examples of ________ publics.
A) general
B) internal
C) local
D) citizen-action
E) media
Answer: B
Skill: Concept
its customers.
Difficulty: Easy
23) Price & Malone Corp., a company based in Houston, caters to a market of individuals and
households that buy goods and services for personal consumption. Price & Malone caters to a
________ market.
A) business
B) reseller
C) government
D) consumer
E) wholesale
Answer: D
Skill: Application
its customers.
24) ________ markets buy goods and services for further processing.
A) Business
B) Reseller
C) Wholesale
D) Consumer
E) Retail
Answer: A
Skill: Concept
its customers.
Difficulty: Easy
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25) Government markets consist of government agencies that buy goods and services
________.
A) to produce public services
B) to resell at a profit
C) for further processing
D) for personal consumption
E) that are generally of poor quality
Answer: A
AACSB: Application of knowledge; Analytical thinking
Skill: Concept
its customers.
Difficulty: Easy
26) Rachel works for a furniture company in Ireland. She is responsible for buying and selling
goods at a profit to small retailers. Rachel most likely operates in a ________ market.
A) business
B) reseller
C) wholesale
D) consumer
E) retail
Answer: B
AACSB: Application of knowledge; Analytical thinking
Skill: Application
its customers.
27) Sparks Inc. has a growing ________ market in the United States consisting of individuals
and households that buy Sparks' products for personal use.
A) consumer
B) government
C) business
D) international
E) financial
Answer: A
Skill: Application
its customers.
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Refer to the scenario below to answer the following question(s).
Casey Brickly opened The Landing, a convenience store on the north shore of Witmer Lake, in
1962. With a sandwich counter on one side and a bait shop and grocery on the other, The
Landing was an immediate hit with weekend lake visitors and local residents alike. In the
summer, boaters parked at the piers and bought all their fishing needs, such as rods and reels,
bait, snacks, and soft drinks at The Landing. Even during the winter months, snowmobilers and
ice fishermen were lured to The Landing for snacks and hot coffee or hot chocolate.
As time passed, the business changed and grew tremendously. What was formerly a weekend
tourist area gradually became a full-fledged residential area. Many of the houses, which were
built as cottages in the 1950s and 1960s, were remodeled into residential homes. By the end of
the 1970s, the days of small motorboats and 10 mile-per-hour speed limits were gone; skiing
and fast speedboats became the rage. Through it all, The Landing continued to attract flocks of
patrons.
In the 1980s, however, Casey started to realize that the grocery area in The Landing could not
compete with larger local retailers. He eventually enlarged the sandwich counter, transforming
the bait shop and grocery into a restaurant with a full menu typical of any diner. "Getting rid of
the bait shop was hard to do," Casey admitted. "I still had a summer crowd that relied on us for
their fishing needs, but we couldn't survive a whole year on four months of profit."
In the early 2000s, the atmosphere of Witmer Lake and the neighboring lakes became upscale.
"I could see that people were spending more on their speed boats than what they had originally
paid for their cottages!" Casey exclaimed. Many of the cottages were inherited by children and
grandchildren of the original owners. Once again, the scene started to change as many of the
lake houses were used only as weekend lake homes. Unlike the previous generation, a vast
number of the current owners could afford to live closer to their jobs while maintaining lake
homes. "At this point, business wasn't growing," Casey said.
As local competition continued to increase, Casey converted the diner of The Landing into a
bar with a lounge area. "The change might have been too drastic," Casey said, "but it was the
only way we could maintain a strong, year-round business in spite of the population shifts and
competitive forces."
28) Which of the following microenvironment actors has had the most influence on The
Landing?
A) competitors
B) suppliers
C) marketing intermediaries
D) resellers
E) citizen-action publics
Answer: A
Skill: Application
its customers.
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29) The microenvironment consists of larger societal forces that affect a company, such as
demographic, economic, political, and cultural forces.
Answer: FALSE
Skill: Concept
its customers.
Difficulty: Easy
30) The macroenvironment consists of the factors close to the company that affect its ability to
serve its customers, such as suppliers, customer markets, competitors, and publics.
Answer: FALSE
Skill: Concept
its customers.
Difficulty: Easy
31) Marketing success requires building relationships with other company departments,
suppliers, marketing intermediaries, competitors, various publics, and customers, which
combine to make up the company's value delivery network.
Answer: TRUE
Skill: Concept
its customers.
32) A company's marketing environment excludes the forces outside the marketing department
that affect marketing management's ability to build and maintain successful relationships with
target customers.
Answer: FALSE
Skill: Concept
its customers.
Difficulty: Easy
33) Marketing services agencies are the marketing research firms, advertising agencies, media
firms, and marketing consulting firms that help the company target and promote its products to
the right markets.
Answer: TRUE
Skill: Concept
its customers.
Difficulty: Easy
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34) Local publics include consumer organizations, environmental groups, minority groups, and
others.
Answer: FALSE
Skill: Concept
its customers.
Difficulty: Easy
35) The aim of the entire value delivery network is to serve target customers and create strong
relationships with them.
Answer: TRUE
Skill: Concept
its customers.
36) Business markets buy goods and services for further processing or for use in their
production processes.
Answer: TRUE
Skill: Application
its customers.
37) Trudie Jones works for a distribution channel firm that helps several electronics companies
find customers or make sales to them. Trudie works for a reseller.
Answer: TRUE
Skill: Application
its customers.
38) A business's suppliers are the most important actors in the company's microenvironment.
Answer: FALSE
Skill: Concept
its customers.
Difficulty: Easy
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39) Companies that watch variables such as income, cost of living, and interest rates, are more
likely to be negatively affected by an economic change such as a recession or boom.
Answer: FALSE
Skill: Concept
its customers.
Difficulty: Easy
40) Government agencies such as the Food and Drug Administration and the Consumer Product
Safety Commission investigate and ban potentially unsafe products. Regulations created by
these and other agencies result in higher research costs and longer times between new product
ideas and their introduction.
Answer: TRUE
Skill: Concept
its customers.
Difficulty: Easy
41) A trend has been people's growing mastery over nature through technology and the belief
that nature is bountiful, but also the realization that it is finite and fragile.
Answer: TRUE
Skill: Concept
its customers.
Difficulty: Easy
42) Marketing management can control environmental forces. A reactive approach is, therefore,
the most beneficial approach to the marketing environment.
Answer: FALSE
Skill: Concept
its customers.
Difficulty: Easy
43) How have large retailers such as Walmart changed the dynamics of partnering with
resellers?
Answer: Selecting and partnering with resellers is not easy. No longer do manufacturers have
many small, independent resellers from which to choose. They now face large and growing
reseller organizations, such as Walmart, Target, Home Depot, Costco, and Best Buy. These
organizations frequently have enough power to dictate terms or even shut smaller
manufacturers out of large markets.
AACSB: Application of knowledge
Skill: Concept
its customers.
Difficulty: Easy
44) Who are the major players in a company's microenvironment? Explain the role that each
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actor plays.
Answer: Marketing success requires building relationships with other company departments,
suppliers, marketing intermediaries, competitors, various publics, and customers, which
combine to make up the company's value delivery network.
The company: In designing marketing plans, marketing management takes other company
groups into account—groups such as top management, finance, research and development
(R&D), purchasing, operations, and accounting. All of these interrelated groups form the
internal environment. Top management sets the company's mission, objectives, broad strategies,
and policies. Marketing managers make decisions within the broader strategies and plans made
by top management.
Suppliers: Suppliers form an important link in the company's overall customer value delivery
network. They provide the resources needed by the company to produce its goods and services.
Marketing intermediaries: Marketing intermediaries help the company promote, sell, and
distribute its products to final buyers. They include resellers, physical distribution firms,
marketing services agencies, and financial intermediaries.
Competitors: The marketing concept states that, to be successful, a company must provide
greater customer value and satisfaction than its competitors do. Thus, marketers must do more
than simply adapt to the needs of target consumers.
Publics: The company's marketing environment also includes various publics. A public is any
group that has an actual or potential interest in or impact on an organization's ability to achieve
its objectives.
Customers: Customers are the most important actors in the company's microenvironment. The
aim of the entire value delivery network is to serve target customers and create strong
relationships with them.
AACSB: Written and oral communication
Skill: Concept
its customers.
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45) What are marketing intermediaries and what are the various types?
Answer: Marketing intermediaries help the company promote, sell, and distribute its products
to final buyers. They include resellers, physical distribution firms, marketing services agencies,
and financial intermediaries.
Resellers are distribution channel firms that help the company find customers or make sales to
them. These include wholesalers and retailers who buy and resell merchandise.
Physical distribution firms help the company to stock and move goods from their points of
origin to their destinations. Marketing services agencies are the marketing research firms,
advertising agencies, media firms, and marketing consulting firms that help the company target
and promote its products to the right markets.
Financial intermediaries include banks, credit companies, insurance companies, and other
businesses that help finance transactions or insure against the risks associated with the buying
and selling of goods.
Skill: Concept
its customers.
46) What is a "public" in terms of the marketing environment? In a short essay, briefly describe
the different types of publics that marketers must consider and explain how marketing might
communicate with these publics.
Answer: A public is any group that has an actual or potential interest in or impact on an
organization's ability to achieve its objectives. There are seven types of publics.
Financial publics: This group influences the company's ability to obtain funds.
Media publics: This group carries news, features, and editorial opinions.
Government publics: Management must take government developments into account.
Marketers must often consult the company's lawyers on issues of product safety, truth in
advertising, and other matters.
Citizen-action publics: A company's marketing decisions may be questioned by consumer
organizations, environmental groups, minority groups, and others. Its public relations
department can help it stay in touch with consumer and citizen groups.
Local publics: This group includes neighborhood residents and community organizations. Large
companies usually create departments and programs that deal with local community issues and
provide community support.
General public: A company needs to be concerned about the general public's attitude toward its
products and activities. The public's image of the company affects its buying.
Internal publics: This group includes workers, managers, volunteers, and the board of directors.
Large companies use newsletters and other means to inform and motivate their internal publics.
A company can prepare marketing plans for these major publics as well as for its customer
markets.
Skill: Concept
its customers.
47) The marketing team of 7 Star Inc., a company manufacturing smartphones, is currently
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studying the size, density, location, age, and occupation of its target market. Which of the
following environments is being studied in this scenario?
A) demographic environment
B) political environment
C) economic environment
D) technological environment
E) cultural environment
Answer: A
Skill: Concept
Objective: LO 3.2: Explain how changes in the demographic and economic environments affect
marketing decisions.
48) The single most important demographic trend in the United States is the ________.
A) changing age structure of the population
B) mobility of families
C) changing family structure of the population
D) increasing number of professional jobs
E) increasing birth rate
Answer: A
Skill: Concept
Difficulty: Easy
49) Among the generational groups in U.S population, the ________ are still the wealthiest
generation in U.S. history.
A) baby boomers
B) Generation Xers
C) Millennials
D) echo boomers
E) Silent Generation
Answer: A
AACSB: Diverse and multicultural work environments
Skill: Concept
Difficulty: Easy
16
50) Which of the following is true of the baby boomers?
A) They tend to see themselves as far older than they actually are.
B) They represent a rapidly shrinking market for new housing and home remodeling.
C) They are long past their peak earning and spending years.
D) They control an estimated 70 percent of the United States' disposable income.
E) They have utter fluency and comfort with digital technology.
Answer: D
Skill: Concept
51) Which of the following is true of Gen Xers?

A) They are considerably larger than the boomer generation.
B) They were the first to grow up in the Internet era.
C) They are less educated than the baby boomers.
D) They are more materialistic than the Millennials.
E) They rarely research a product before purchasing it.
Answer: B
Skill: Concept
52) Which of the following generations is the most educated to date?

A) Lost Generation
B) Baby boomers
C) Millennials
D) Generation X
E) Silent Generation
Answer: D
Skill: Concept
Difficulty: Easy
17
53) Mary Adams is helping her company develop a marketing program for a new product line.
The program is designed to appeal most to less materialistic consumer groups who are likely to
prize experience, not acquisition. The marketing program is most likely designed to appeal to
which of the following demographic groups?
A) Generation X
B) Millennials
C) Echo Boomers
D) Silent Generation
E) Lost Generation
Answer: A
Skill: Application
54) Which of the following is true of the Millennials?

A) They are the children of baby boomers and were born between 1977 and 2000.
B) They control an estimated 70 percent of the disposable income in the United States.
C) They have reached their peak earning and spending years.
D) They were the first to grow up in the Internet era.
E) They are less immersed in technology than Gen Xers.
Answer: A
Skill: Concept
55) Which of the following generational groups is most comfortable with digital technology
and embraces that technology?
A) Generation X
B) Millennials
C) Baby Boomers
D) Silent Generation
E) Lost Generation
Answer: B
Skill: Concept
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56) Wholesome Soups, a maker of organic soups, is starting a new marketing campaign
emphasizing the ease of preparing and eating Wholesome Soups. Print, television, and Internet
ads feature college students enjoying Wholesome Soups in between classes and during study
breaks. Wholesome Soups' new marketing campaign is most likely aimed at which of the
following?
A) Baby Boomers
B) Gen Zers
C) Gen Xers
D) Millennials
E) the SOHO market
Answer: D
Skill: Application
57) Marketers target Generation Z because they ________.

A) listen to their parents and follow their examples
B) dislike technology
C) spend an estimated $44 billion annually of their own money
D) prefer shopping in brick-and-mortar stores with actual products
E) have long attention spans and are easily targeted
Answer: C
Skill: Concept
58) Gen Zers are highly mobile, connected, and social. They base their purchases on ________.
A) input from their friends
B) text messages
C) social media ratings
D) product research on their own
E) their parents' opinions
Answer: D
Skill: Concept
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59) Marketers can group people in a number of ways, including by birth date. However, the
following combination of groups has proven to be more effective: ________.
A) income, lifestyle, life stage
B) profession, common values they seek in products they buy, lifestyle
C) lifestyle, life stage, common values they seek in products they buy
D) place of residence, life stage, lifestyle
E) race or nationality, lifestyle, common values they seek in products they buy
Answer: C
Skill: Concept
60) Which of the following is a trend that depicts the increasingly nontraditional nature of
today's American families?
A) the low percentage of working women in the workforce
B) the low percentage of married couples with children
C) the sharply declining number of dual-income families
D) the sharply declining number of stay-at-home dads
E) the decreasing reliance on convenience foods and services
Answer: B
Skill: Concept
61) In the context of geographical shifts in population, the migration toward ________ areas
has resulted in a rapid increase in the number of people who telecommute.
A) urban
B) remote
C) rural
D) metropolitan
E) micropolitan
Answer: E
Skill: Concept
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62) Over the past two decades, the U.S. population has shifted toward the ________ states.
A) Northern
B) Northeast
C) Sunbelt
D) Midwest
E) Corn belt
Answer: C
Skill: Concept
Difficulty: Easy
63) Which of the following has lost population in the past two decades?
A) California
B) Florida
C) the Western states
D) the Northeast states
E) the Southern states
Answer: D
Skill: Concept
Difficulty: Easy
64) In the 1950s, Americans made a massive exit ________.

A) from the South to the Northeast
B) from the West to the Midwest
C) to foreign countries
D) from the cities to the suburbs
E) from the coastal towns to the cities
Answer: D
Skill: Concept
Difficulty: Easy
21
65) An increasing number of American workers currently work from their homes or remote
offices and conduct their business by phone or the Internet. This trend has created a ________.
A) booming real estate market in the big cities
B) booming SOHO market
C) decline in the demand for convenience foods
D) decline in the demand for financial services
E) steady increase in global enterprises
Answer: B
AACSB: Information technology
Skill: Concept
66) Which of the following demographic trends is the most likely cause for a rapid increase in
telecommuting?
A) the migration toward micropolitan and suburban areas
B) the migration from rural to metropolitan areas
C) the increasing number of traditional households
D) the growing percentage of married couples who do not have children
E) the declining number of manufacturing workers in today's workforce
Answer: A
Skill: Concept
67) Micropolitan areas are ________.

A) likely to have a higher crime rate than metropolitan areas
B) less likely to attract telecommuters
C) likely to offer the same advantages as metropolitan areas
D) less likely to offer market expansion opportunities
E) generally unattractive to niche marketers
Answer: C
Skill: Concept
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68) In the United States, job growth currently is the weakest for ________.
A) white collar workers
B) manufacturing workers
C) salespeople
D) telecommuters
E) professional workers
Answer: B
Skill: Concept
Difficulty: Easy
69) Currently, in the United States, job growth is the strongest for ________.
A) blue collar workers
B) manufacturing workers
C) professional workers
D) construction workers
E) sanitation workers
Answer: C
Skill: Concept
Difficulty: Easy
70) Which of the following is an accurate statement about the diversity of the American
population?
A) African Americans represent the largest non-white segment of the population.
B) More than 20 percent of the people living in the United States were born in another country.
C) By 2050, the Asian population is estimated to remain at 4.7 percent.
D) By 2060, Hispanics are estimated to be 28 percent of the population.
E) The United States has become more of a "melting pot" than a "salad bowl."
Answer: D
Skill: Concept
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71) By 2060, ________ will be an estimated 14 percent of the U.S. population.
A) African Americans
B) Asians
C) Hispanics
D) Native Americans
E) Native Hawaiians
Answer: A
Skill: Concept
Difficulty: Easy
72) Which of the following situations is expected to enhance the use of targeted advertising
messages by marketers?
A) increase in derived demand in the market
B) increase in ethnic populations
C) rising global inflation rates
D) inadequate quality control
E) low advertising budgets
Answer: B
Skill: Concept
73) With an expected increase in ethnic diversity within the American population, marketers are
most likely to place a greater emphasis on ________.
A) geographic segmentation
B) targeted advertising messages
C) mass marketing
D) "do well by doing good" missions
E) corporate giving
Answer: B
Skill: Concept
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74) Soon-Yi Park's chain of travel agencies has identified the lesbian, gay, bisexual, and
transgender community as a growing market that spends an increasing percentage of its income
on travel. Which of the following would be the LEAST effective component of a marketing
plan for Soon-Yi to take advantage of this opportunity?
A) develop a presence on LGBT-oriented social networking sites
B) position his agency as focused on specialized experiences
C) implement a mass marketing campaign
D) place specially targeted ads in gay-themed publications
E) advertise on LOGO, the cable television network aimed at gays and lesbians and their
friends and family
Answer: C
Skill: Application
75) Which of the following is true with regard to the diversity segment of U.S. adults with
disabilities?
A) Most individuals with disabilities are active consumers.
B) The market represented by U.S. adults with disabilities is smaller than that represented by
African Americans or Hispanics.
C) The diversity segment, U.S. adults with disabilities, is a rather unattractive segment for the
tourism industry.
D) The annual spending power of U.S. adults with disabilities is less than $100 billion.
E) Most companies are reluctant to reach out to consumers with disabilities.
Answer: A
Skill: Concept
76) The economic environment consists of economic factors that affect ________.
A) cultural patterns of communities
B) entrepreneurial orientation of a population
C) the quality of technological innovation
D) consumer purchasing power
E) the natural environment
Answer: D
Skill: Concept
Difficulty: Easy
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77) Consumers' spending patterns since the Great Recession include ________.
A) spending freely, without caution
B) buying less and looking for greater value in what they buy
C) amassing record levels of debt
D) experiencing rapid increases in housing values
E) participating in a booming stock market
Answer: B
Skill: Concept
78) Which of the following is an accurate statement about the income distribution of the
American population?
A) The top 20 percent of earners achieves 68 percent of the country's adjusted gross income.
B) The bottom 40 percent of earners captures just 11 percent of total income.
C) The top 5 percent of American earners captures 18 percent of all income.
D) The distribution of income allows most companies to target earners of all income levels.
E) Changes in income and interest rates minimally impact spending patterns.
Answer: B
Skill: Concept
79) A value marketer is most likely to ________.

A) offer consumers superior quality of goods and services at a very high price
B) offer consumers only those products that are associated with status and prestige
C) offer consumers low quality goods and services at very low prices
D) offer consumers a balanced combination of product quality at a fair price
E) deny discounts to consumers to increase profits
Answer: D
Skill: Concept
26
80) Which of the following statements about income distribution in the United States is NOT
true?
A) Over the past several decades, the rich have grown richer.
B) Over the past several decades, the middle class has grown faster than other classes.
C) Over the past several decades, the poor have remained poor.
D) The top 20 percent of earners capture over 50 percent of all income.
E) The top five percent of American earners get nearly 22 percent of the country's adjusted
gross income.
Answer: B
Skill: Concept
27
patrons.
81) Which of the following is the macroenvironmental force that has had the greatest effect on
The Landing?
A) the demographic environment
B) the technological environment
C) marketing intermediaries
D) the political environment
E) citizen-action publics
Answer: A
Skill: Application
28
82) Which of the following generational groups is most likely to represent the present owners
of cottages surrounding Witmer Lake?
A) Baby Boomers
B) Echo Boomers
C) Gen Xers
D) Lost Generation
E) Millennials
Answer: C
Skill: Application
83) The demographic environment is of major interest to marketers because it involves people,
and people make up markets.
Answer: TRUE
Skill: Concept
84) The single most important demographic trend in the United States that marketers should
understand is the changing family structure of the population.
Answer: FALSE
Skill: Concept
85) As baby boomers reach their peak earning and spending years, they become lucrative
markets for financial services, travel, and entertainment.
Answer: TRUE
Skill: Concept
Difficulty: Easy
29
86) Millennials comprise the most financially affluent group in America today.
Answer: FALSE
Skill: Concept
87) The Gen Xers are increasingly displacing the lifestyles, culture, and values of the baby
boomers.
Answer: TRUE
Skill: Concept
88) Millennials represent a larger demographic segment than the baby boomers or Gen Xers.
Answer: TRUE
Skill: Concept
89) Marketers must increasingly consider the special needs of traditional households because
this segment of the population is growing more rapidly than nontraditional households.
Answer: FALSE
Skill: Concept
90) The American workforce today is less white-collar than in the late twentieth century.
Answer: FALSE
Skill: Concept
30
91) Companies in several industries have recognized the buying power of the LGBT segment of
the U.S. population and have begun explicitly targeting these consumers with gay-specific ads
and marketing efforts.
Answer: TRUE
Skill: Concept
Difficulty: Easy
92) Prior to the Great Recession of 2008/2009, American consumer spending was careful and
restrained.
Answer: FALSE
Skill: Concept
Difficulty: Easy
93) What are two potential drawbacks of creating separate products and marketing programs for
each generation?
Answer: Some experts warn that marketers need to be careful about turning off one generation
each time they craft a product or message that appeals effectively to another. Others caution that
each generation spans decades of time and many socioeconomic levels.
AACSB: Application of knowledge; Written and oral communication
Skill: Concept
94) Briefly explain why, until 2008, Americans amassed record amounts of debt and why the
free-spending trend has ended.
Answer: Americans spent freely, fueled by income growth, a boom in the stock market and rapid
increases in home values. Americans bought and bought, seemingly without caution, amassing
record levels of debt. However, the free spending and high expectations of those days were
dashed by the Great Recession of 2008/2009.
Skill: Concept
31
95) Why do marketers find baby boomers attractive?
Answer: Today's baby boomers account for about 26 percent of the U.S. population but control
an estimated 70 percent of the nation's disposable income.
Skill: Concept
96) How can marketers reach the Millennials effectively?

Answer: Millenials engage with brands in an entirely new way, such as with mobile or social
media. More than sales pitches from marketers, Millennials seek opportunities to shape their
own brand experiences and share them with others. Many brands are now fielding specific
products and marketing campaigns aimed at Millennial needs and lifestyles.
AACSB: Information technology; Diverse and multicultural work environments
Skill: Concept
Difficulty: Easy
97) How can marketers reach the Generation Zers effectively?

Answer: The social media will play a crucial marketing role as the kids and tweens grow into
teens.
Today's kids are notoriously hard to pin down. The key is to engage these young consumers and
let them help to define their brand experiences. Says one expert, "They love sensory overload—
bright colors, music videos, a variety of merchandise, the tumult of all that."
Skill: Concept
98) What structure can an American family have now, as the traditional family has changed?
Answer: The traditional household consists of a husband, wife, and children (and sometimes
grandparents). Yet couples without children, single parents, and nonfamily households are
groups growing more quickly than traditional households.
Skill: Concept
Difficulty: Easy
32
99) Why do population shifts interest marketers?
Answer: Population shifts interest marketers because people in different regions buy
differently. For example, in the United States, people in the Midwest buy more winter clothing
than people in the Southeast.
Skill: Concept
100) In terms of ethnic and racial makeup, why is the United States today more accurately
characterized as a "salad bowl" than a "melting pot"?
Answer: The United States has often been called a melting pot, where diverse groups from
many nations and cultures have melted into a single, more homogeneous whole. Instead, the
United States seems to have become more of a "salad bowl" in which various groups have
mixed together but have maintained their diversity by retaining and valuing important ethnic
and cultural differences.
AACSB: Analytical thinking; Diverse and multicultural work environments
Skill: Concept
33
101) What is demography? Why is the demographic environment of major interest to
marketers? Discuss the changing age structure of the U.S. population.
Answer: Demography is the study of human populations in terms of size, density, location,
age, gender, race, occupation, and other statistics. The demographic environment is of major
interest to marketers because it involves people, and people make up markets. Marketers can
learn much about human populations in terms of changing age and family structures,
geographic population shifts, educational characteristics, population diversity, and other
statistics. Based on age structure, the U.S. population can be categorized into several
generational groups; the three largest among them are the baby boomers, Generation X, and the
Millennials. The baby boomer market of 78 million people is one of the most powerful forces
shaping the marketing environment. Considerably smaller than the boomer generation that
precedes them and the Millennials who follow, the Generation Xers are a sometimes
overlooked consumer group. Although they seek success, they are less materialistic than the
other groups; they prize experience, not acquisition. For many of the Gen Xers who are parents,
family comes first—both children and their aging parents—and career second. From a
marketing standpoint, the Gen Xers are a more skeptical bunch. They tend to research products
before they consider a purchase, prefer quality to quantity, and tend to be less receptive to overt
marketing pitches. They are more likely to be receptive to irreverent ad pitches that make fun of
convention and tradition. The Millennials (or Generation Y) are the 83 million children of the
baby boomers born between 1977 and 2000. One thing that all Millennials have in common is
their comfort with digital technology. They don't just embrace technology; it's a way of life.
Rather than having mass-marketing messages pushed at them, the Millennials prefer to seek out
information and engage in two-way brand conversations. Generation Zers make up important
kids, tweens, and teens markets that influence almost $200 billion of their own and parents'
spending. They are utterly fluent with technology and take it for granted. They are highly
mobile, connected, and social. They blend the online and offline worlds seamlessly as they
socialize and shop.
Skill: Concept
34
102) Explain the impact of the baby boomers, Generation Xers, Millennials, and Generation
Zers on today's marketing strategies.
Answer: Today's baby boomers account for about 26 percent of the U.S. population but control
an estimated 70 percent of the nation's disposable income. This group is an attractive market for
financial services, new housing and home remodeling, travel and entertainment, and health and
fitness products, among others. Generation Xers carry a more cautious outlook; they are less
materialistic than baby boomers, so marketers must use a different approach to appeal to them.
Millennials are children of the baby boomers. One thing that all Millennials have in common is
their comfort with digital technology. They don't just embrace technology; it's a way of life.
The Millennials were the first generation to grow up in a world filled with computers, mobile
phones, satellite TV, iPods and iPads, and online social networks. As a result, they engage with
brands in an entirely new way, such as with mobile or social media. Rather than having mass-
marketing messages pushed at them, the Millennials prefer to seek out information and engage
in two-way brand conversations. Thus, reaching them effectively requires creative marketing
approaches. Generation Zers are born after 2000 and make up important kids, tweens, and teens
markets that influence almost $600 billion of their own and parents' spending. They are utterly
fluent with technology and take it for granted. They are highly mobile, connected, and social.
They blend the online and offline worlds seamlessly as they socialize and shop.
Marketers need to form more precise age-specific segments within each group. More important,
defining people by their birth date may be less effective than segmenting them by their lifestyle,
life stage, or the common values they seek in the products they buy.
Skill: Concept
103) The physical environment affecting marketing activities is referred to as the ________
environment.
A) economic
B) natural
C) cultural
D) political
E) social
Answer: B
Skill: Concept
Objective: LO 3.3: Identify the major trends in the firm's natural and technological
environments.
Difficulty: Easy
35
104) The environmental sustainability movement encourages companies to ________.
A) actively resist social change
B) operate freely in the black market
C) go beyond government regulations
D) institute deregulation
E) curb organizational anarchy
Answer: C
AACSB: Ethical understanding and reasoning
Skill: Concept
environments.
105) As a consequence of the concern for the natural environment, many companies are
developing strategies and practices that support ________.
A) government intervention
B) environmental sustainability
C) deregulation
D) mass marketing
E) rapid exploitation of natural resources
Answer: B
Skill: Concept
environments.
106) A firm dumping chemical wastes in the local lake is ________.

A) actively resisting social change
B) contributing to organizational anarchy
C) engaging in a "do well by doing good" mission
D) adopting a proactive stance toward the marketing environment
E) contributing to increased pollution
Answer: E
Skill: Application
environments.
36
107) New technologies most likely lead to ________.
A) economic imbalance in society
B) reduced exports
C) trade deficits
D) an increased demand for unskilled labor
E) new markets and opportunities
Answer: E
Skill: Concept
environments.
Difficulty: Easy
108) Many firms today use RFID technology to ________.

A) identify new target markets
B) analyze threats and opportunities in the macroenvironment
C) move toward environmental sustainability
D) track products through various points in the distribution channel
E) track patterns of online consumer behavior
Answer: D
Skill: Concept
environments.
109) Many companies use RFID product labels on their goods, which exemplifies the
________ environment in business.
A) natural
B) political
C) economic
D) demographic
E) technological
Answer: E
Skill: Concept
environments.
Difficulty: Easy
37
110) Which of the following is most likely a result of regulations set up by the Food and Drug
Administration and the Consumer Product Safety Commission?
A) The time between new product ideas and their introduction to the market has decreased.
B) Annual spending on research and development has decreased.
C) Research costs for companies have risen.
D) Product innovation has significantly declined.
E) Marketers have grown increasingly apathetic toward meeting safety standards.
Answer: C
Skill: Concept
environments.
111) Trends in the natural environment include all of the following EXCEPT ________.
A) increased government intervention
B) the development of an environmental sustainability movement
C) increased pollution
D) decreased costs of product development
E) shortages of raw materials
Answer: D
Skill: Application
environments.
112) Which of the following is a true statement about the benefits of RFID technology?
A) It allows firms to track products and customers at various points in the distribution channel.
B) The chips are used to track shipments but not individual items.
C) The chips do not risk invading people's privacy.
D) Sharing of data decreases the buying experience for consumers.
E) The technology will be available for the foreseeable future, allowing companies to fully
invest in its capabilities.
Answer: A
Skill: Application
environments.
38
113) Regulations force companies to be responsible. However, most companies want to be
responsible. Impacts of government regulations include all of the following EXCEPT
________.
A) informing the public that products are safe
B) higher research costs
C) increased sales because they have been found to be safe
D) penalties to companies that fail to meet the regulations
E) longer times between new product ideas and their introduction
Answer: A
Skill: Application
environments.
39
patrons.
114) Which of the following is the macroenvironmental force that benefitted The Landing the
most?
A) the legal environment
B) the natural environment
C) the economic environment
D) the political environment
E) the technological environment
Answer: B
Skill: Application
environments.
40
115) Environmental sustainability concerns have declined steadily over the past three decades.
Answer: FALSE
Skill: Concept
environments.
116) The technological environment is predominantly static.

Answer: FALSE
Skill: Concept
environments.
Difficulty: Easy
117) The introduction of new technologies is equally beneficial to all industries.

Answer: FALSE
Skill: Concept
environments.
118) How can marketers benefit from developing solutions to environmental problems, such as
pollution and raw material shortages?
Answer: Marketers who help develop solutions to problems facing the natural environment can
gain the advantage of becoming market leaders, as increasingly strict environmental regulations
can be expected in the United States and elsewhere. Environmentally responsible actions will
help a company's public image; the actions will also help in creating a more sustainable market.
AACSB: Application of knowledge; Ethical understanding and reasoning
Skill: Concept
environments.
41
119) What are the major trends in today's natural environment? How do these trends affect
companies?
Answer: The natural environment shows three major trends: shortages of certain raw materials,
higher pollution levels, and more government intervention in natural resource management.
Environmental concerns create marketing opportunities for alert companies. As concern about
global warming and other environmental issues continues to grow, more and more consumers
are demanding environmentally responsible products. Companies who pay heed to these
demands will benefit, as environmentally responsible actions are linked with good business.
Skill: Concept
environments.
120) Why is the technological environment such a dramatic force in today's market?
Answer: The technological environment is perhaps the most dramatic force now shaping our
destiny. Technology has released such wonders as antibiotics, robotic surgery, miniaturized
electronics, smartphones, and the Internet. It also has released such horrors as nuclear missiles,
chemical weapons, and assault rifles. It has released such mixed blessings as the automobile,
television, and credit cards. Our attitude toward technology depends on whether we are more
impressed with its wonders or its blunders.
New technologies create new markets and opportunities. However, every new technology
replaces an older technology. Transistors hurt the vacuum-tube industry, digital photography
hurt the film business, and MP3 players and digital downloads are hurting the CD business.
When old industries fought or ignored new technologies, their businesses declined. Thus,
marketers should watch the technological environment closely. Companies that do not keep up
will soon find their products outdated. If that happens, they will miss new product and market
opportunities.
AACSB: Information technology; Written and oral communications
Skill: Concept
environments.
121) The ________ prohibits monopolies and activities (price-fixing, predatory pricing) that
restrain trade or competition in interstate commerce.
A) Sherman Antitrust Act
B) Lanham Trademark Act
C) Fair Packaging and Labeling Act
D) CAN-SPAM Act
E) Magnuson-Moss Warranty Act
Answer: A
Skill: Concept
Objective: LO 3.4: Explain the key changes in the political and cultural environments.
42
122) The ________ limits the number of commercials aired during children's programs.
A) Children's Online Privacy Protection Act
B) Child Protection Act
C) Fair Packaging and Labeling Act
D) Children's Television Act
E) Consumer Product Safety Act
Answer: D
Skill: Concept
123) The ________ environment consists of laws, government agencies, and pressure groups
that influence or limit various organizations and individuals in a given society.
A) socio-legal
B) cultural
C) political
D) technological
E) economic
Answer: C
Skill: Concept
Difficulty: Easy
124) Governments develop public policy to ________.

A) encourage deregulation
B) identify demographic patterns
C) identify cultural patterns
D) guide commerce
E) protect marketers
Answer: D
Skill: Concept
Difficulty: Easy
125) Laws in the United States and many other countries have many business-oriented laws
covering issues such as competition, environmental protection, pricing, packaging and labeling,
product safety, truth in advertising, consumer privacy, and ________.
A) land ownership
B) taxation
C) fair-trade practices
D) education
E) interdepartmental communication
Answer: C
Skill: Concept
Difficulty: Easy
126) Business legislation is enacted to protect ________.

43
A) consumers from unfair business practices
B) businesses from unfair attacks by consumers
C) consumers from competition by businesses
D) businesses from achieving unfairly high profits
E) society from profitable business activity
Answer: A
Skill: Concept
127) Laws are passed to define and prevent unfair competition primarily because ________.
A) business executives tend to favor pure monopolies
B) businesses sometimes try to neutralize threatening firms
C) governments in free market economies tend to nationalize ailing firms
D) private lobbying hurts the interests of national and state governments
E) most multinational entities in advanced economies are averse to invest in emerging markets
Answer: B
Skill: Concept
128) Funco Inc., a toy manufacturer, sold plastic racing cars that were manufactured with toxic
materials, which threatened the health of several children. Which purpose of government
regulation to protect consumers is involved?
A) misleading customers in their advertising
B) deceiving consumers through their packaging
C) making shoddy products
D) deceiving consumers through their pricing
E) invading consumer privacy
Answer: C
Skill: Application
44
129) A company or association's ________ is designed to help guide responses to complex
social responsibility issues.
A) code of ethics
B) marketing plan
C) non-disclosure policy
D) privacy policy
E) non-compete clause
Answer: A
Skill: Concept
Difficulty: Easy
130) The boom in Internet marketing has created a new set of social and ethical issues. Critics
worry most about ________.
A) accessibility
B) puffery in advertising
C) online privacy issues
D) sustainability
E) issues pertaining to efficiency
Answer: C
Skill: Concept
Difficulty: Easy
131) Cause-related marketing has become a primary form of ________.

A) quality control
B) corporate fraud protection
C) corporate giving
D) legislative lobbying
E) price discrimination
Answer: C
Skill: Concept
Difficulty: Easy
45
132) A regional supermarket chain runs print, radio, and television advertisements announcing
that 1 percent of its sales is donated to local after-school programs for underprivileged youth.
This is an example of ________.
A) cause-related marketing
B) generational marketing
C) sustainable marketing
D) market segmentation
E) product differentiation
Answer: A
Skill: Application
133) The ________ environment consists of institutions and other forces that affect a society's
basic values, perceptions, preferences, and behaviors.
A) social
B) cultural
C) political
D) physical
E) natural
Answer: B
Skill: Concept
Difficulty: Easy
134) Marketers should understand that people's core beliefs and values tend to be ________.
A) fixed
B) highly flexible
C) similar around the world
D) constantly and rapidly changing
E) easily influenced by secondary beliefs
Answer: A
AACSB: Reflective thinking
Skill: Concept
46
135) Babita Singh, a 51-year-old schoolteacher from Los Angeles, believes that people should
choose a profession they like, which is an example of Babita's ________.
A) secondary belief
B) core belief
C) core value
D) work ethic
E) moral code
Answer: A
Skill: Concept
136) A pastor from Kansas believes that adultery is immoral. This refers to the pastor's
________.
A) secondary belief
B) acquired belief
C) social identity
D) core belief
E) cultural orientation
Answer: D
Skill: Concept
137) Mercury Inc., an American multinational corporation, is currently planning to enter the
promising consumer goods market in India. The firm will most likely discover that ________
beliefs and values are more open to change in India.
A) inherited
B) secondary
C) primary
D) core
E) traditional
Answer: B
AACSB: Analytical thinking; Diverse and multicultural work environments
Skill: Concept
47
138) A society's ________ are expressed in how people view themselves and others,
organizations, society, nature, and the universe.
A) social codes
B) cultural values
C) demographics
D) public policies
E) norms
Answer: B
Skill: Concept
Difficulty: Easy
139) Which of the following is most likely true with regard to people's views of organizations
in contemporary America?
A) In the American workplace, there has been an overall increase in organizational loyalty.
B) Most Americans are confident in their employers and are unlikely to switch jobs as
frequently as in the past.
C) The past two decades have seen a sharp decrease in confidence in and loyalty toward
America's business organizations.
D) Most U.S. workers view work as a source of personal satisfaction and organizational pride.
E) In the last decade, corporate scandals and layoffs had little impact on people's confidence in
U.S. firms.
Answer: C
Skill: Concept
140) People vary in their attitudes toward their society—while ________ defend it, malcontents
want to leave it.
A) reformers
B) patriots
C) activists
D) environmentalists
E) historical revisionists
Answer: B
Skill: Concept
Difficulty: Easy
48
141) Which of the following is a potential downside to using patriotic themes in marketing
programs?
A) Consumers rarely respond to patriotic marketing messages in a favorable manner.
B) A consumer's societal orientation has no visible impact on product consumption.
C) Patriotism could be viewed as an attempt to cash in on the nation's emotions.
D) Patriotic Americans may have less disposable income than reformers.
E) Mass marketing has limited appeal among patriotic Millennials.
Answer: C
Skill: Concept
142) Consumers in the "lifestyles of health and sustainability" market are more likely to seek
________.
A) alternative medicine
B) perfumes made from animal products
C) clothing made of fur
D) leather goods
E) foods high in saturated fat
Answer: A
Skill: Concept
143) The fact that people are dropping out of organized religion doesn't mean that they are
abandoning their faith. Some futurists have noted a renewed interest in ________, perhaps as a
part of a broader search for a new inner purpose.
A) interacting with nature
B) the fine arts
C) charitable giving
D) spirituality
E) materialism
Answer: D
Skill: Concept
Difficulty: Easy
49
144) Josie's FarmFresh creates sustainable, all-natural food products. These products are most
likely to become popular with which group?
A) SOHO
B) environmentally conscious
C) LGBT
D) business
E) Millennials'
Answer: B
Skill: Application
145) The popularity of cause-related marketing as a form of corporate giving is rapidly

declining.
Answer: FALSE
Skill: Concept
146) Secondary beliefs and values are less open to change than core beliefs and values.
Answer: FALSE
Skill: Concept
Difficulty: Easy
147) Explain the controversy surrounding cause-related marketing.

Answer: Critics worry that cause-related marketing is more a strategy for selling than a strategy
for giving—that "cause-related" marketing is really "cause-exploitative" marketing. Companies
may walk a fine line between increased sales and an improved image yet face charges of
exploitation, even though business and charity don't have to be mutually exclusive.
Skill: Concept
50
148) Why is government regulation necessary to protect consumers from unfair business
practices?
Answer: Government regulation is necessary to protect consumers from unfair business
practices because some firms, if left alone, would make shoddy products, invade consumer
privacy, mislead consumers in their advertising, and deceive consumers through their
packaging and pricing. Rules defining and regulating unfair business practices are enforced by
various agencies.
Skill: Concept
149) How do socially responsible firms positively impact consumers and the environment?
Answer: Enlightened companies encourage their managers to look beyond what the regulatory
system allows and simply "do the right thing." These socially responsible firms actively seek
out ways to protect the long-run interests of their consumers and the environment.
Skill: Concept
150) What is the difference between core beliefs and secondary beliefs? Give an example of
each.
Answer: Core beliefs and values are passed on from parents to children and are reinforced by
schools, churches, business, and government. On the other hand, secondary beliefs and values
are more open to change. For example, believing in marriage is a core belief; believing that
people should get married early in life is a secondary belief.
Skill: Concept
Difficulty: Easy
151) What are the different ways in which the major cultural values of a society are expressed?
Answer: The major cultural values of a society are expressed in people's views of themselves
and others, as well as in their views of organizations, society, nature, and the universe.
Skill: Concept
Difficulty: Easy
51
152) Why is it important for marketers to understand cultural swings?
Answer: Marketers want to predict cultural shifts to spot new opportunities or threats. The
major cultural values of a society are expressed in people's views of themselves and others, as
well as in their views of organizations, society, nature, and the universe.
Skill: Concept
Difficulty: Easy
153) Discuss why business legislation is enacted. Provide examples.

Answer: Business legislation is enacted to protect companies from each other, to protect
consumers from unfair business practices, and to protect the interests of society against
unrestrained business behavior. Several laws are designed to prevent unfair competitive
practices between businesses; in the United States, these laws are enforced by the Federal Trade
Commission (FTC) and the Antitrust Division of the Attorney General's office. An example of
such a law is the Sherman Antitrust Act that prohibits monopolies and other activities that
restrain trade. Laws to protect consumers are designed to prevent deceptive advertising,
packaging, and pricing, among other harmful practices. Examples of this type of law include
the Fair Packaging and Labeling Act and the Consumer Product Safety Act. Finally, regulations
to protect the interests of society require companies to take responsibility for the social costs of
their products and/or production practices. An example of this type of law is the National
Environmental Policy Act.
Skill: Concept
154) What is cause-related marketing? Illustrate with examples.

Answer: To exercise their social responsibility and build more positive images, many
companies are now linking themselves to worthwhile causes. Some companies are founded
entirely on cause-related missions. Under the concept of "values-led business" or "caring
capitalism," their mission is to use business to make the world a better place. Cause-related
marketing has become a primary form of corporate giving. It lets companies "do well by doing
good" by linking purchases of the company's products or services with benefiting worthwhile
causes or charitable organizations.
The P&G Tide Loads of Hope program provides mobile laundromats and loads of clean
laundry to families in disaster-stricken areas—P&G washes, dries, and folds clothes for these
families for free. Down the street, needy people will probably find the P&G Duracell Power
Relief Trailer, which provides free batteries and flashlights as well as charging stations for
phones and laptops.
AACSB: Ethical understanding and reasoning; Written and oral communication
Skill: Concept
52
155) How do people's views of nature affect marketers?
Answer: People vary in their attitudes toward the natural world—some feel ruled by it, others
feel in harmony with it, and still others seek to master it. A long-term trend has been people's
growing mastery over nature through technology and the belief that nature is bountiful. More
recently, however, people have recognized that nature is finite and fragile; it can be destroyed
or spoiled by human activities.
This renewed love of things natural has created a sizable market of consumers who seek out
everything from natural, organic, and nutritional products to fuel-efficient cars and alternative
medicine. The U.S. organic/natural food market now generates $45 billion in annual retail sales
and will grow to an estimated $200 billion by 2019.
Skill: Concept
Difficulty: Easy
156) Rather than assuming that strategic options are bounded by the current environment, firms
adopting a(n) ________ to the marketing environment develop strategies to change the
environment.
A) environmental stance
B) proactive stance
C) reactive stance
D) relativist approach
E) no-compromise approach
Answer: B
Skill: Concept
Objective: LO 3.5: Discuss how companies can react to the marketing environment.
157) Companies that take a proactive stance toward the marketing environment are most likely
to ________.
A) develop strategies to change the environment in their favor
B) passively accept the marketing environment
C) resist organizational change
D) discourage innovation
E) consider technological advances more disruptive than beneficial
Answer: A
Skill: Concept
53
158) Katrina Mendoza is a senior manager in a manufacturing firm that hires lobbyists to
influence legislation that affects the manufacturing industry. Katrina's firm takes a(n) ________
stance toward the marketing environment.
A) reactive
B) proactive
C) adversarial
D) passive
E) altruistic
Answer: B
Skill: Application
159) Which of the following is most likely influenced by marketers?

A) population shifts
B) core cultural values
C) income distribution
D) ethnic diversity
E) media
Answer: E
Skill: Concept
160) Companies and their products often create ________.

A) new consumers
B) new technologies
C) new industries and their structures
D) new advertising campaigns
E) new manufacturing methods
Answer: C
Skill: Concept
161) When a company hires lobbyists to influence legislation affecting its industry, it is taking a
defensive stance toward the marketing environment.
Answer: FALSE
Skill: Concept
Difficulty: Easy
54
162) In reacting to the marketing environment, what strategies do firms adopt in order to shift
from a reactive to a more proactive stance?
Answer: Rather than assuming that strategic options are bounded by the current environment,
firms keen on adopting a proactive stance toward the marketing environment develop strategies
to change the environment.
Skill: Concept
55

Chapter 3 Analyzing The Marketing Environment: Principles of Marketing, 17e (Kotler/Armstrong)

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Principles of Marketing, 17e (Kotler/Armstrong)

Chapter 3 Analyzing the Marketing Environment

3) Which of the following is a component of a firm's microenvironment?

18) A company's marketing decisions may be questioned by consumer organizations,

20) Which group includes neighborhood residents and community organizations?

51) Which of the following is true of Gen Xers?

52) Which of the following generations is the most educated to date?

54) Which of the following is true of the Millennials?

57) Marketers target Generation Z because they ________.

64) In the 1950s, Americans made a massive exit ________.

67) Micropolitan areas are ________.

79) A value marketer is most likely to ________.

96) How can marketers reach the Millennials effectively?

97) How can marketers reach the Generation Zers effectively?

106) A firm dumping chemical wastes in the local lake is ________.

108) Many firms today use RFID technology to ________.

116) The technological environment is predominantly static.

117) The introduction of new technologies is equally beneficial to all industries.

124) Governments develop public policy to ________.

126) Business legislation is enacted to protect ________.

131) Cause-related marketing has become a primary form of ________.

145) The popularity of cause-related marketing as a form of corporate giving is rapidly

147) Explain the controversy surrounding cause-related marketing.

153) Discuss why business legislation is enacted. Provide examples.

154) What is cause-related marketing? Illustrate with examples.

159) Which of the following is most likely influenced by marketers?

160) Companies and their products often create ________.

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