CHAPTER 3 The Marketing Environment

TRUE/FALSE QUESTIONS
Answer whether the following statements are true or false

1 Discuss the external environment of marketing and explain how it affects a firm

1. A firm's target market is the geographic location where the firm intends to focus its marketing efforts.
true
false

2. To be successful, marketers should control the elements in the external environment and the four Ps of the marketing mix.
true
false

2 Describe the social factors that affect marketing

3. Most North Americans hold traditionalist values; that is, they hold conservative political and social views, have traditional religious beliefs, and believe in traditional division of labour between men and women.
true
false

3 Explain the importance to marketing managers of current demographic trends

4. Demography is the study of people's vital statistics, such as their ages and locations.

true
false

5. The generation that followed the Baby Boomers is called
Generation Y.

true
false

6. People born between 1946 and 1964 who are married, employed, and have children are called baby boomers.

true
false

4 Explain the importance to marketing managers of multiculturalism and growing ethnic markets

7. A multinational food company has created several cross-cultural frozen food products such as taco pizzas, rice-filled burritos, and Asian barbecue sauces. This is an example of "stitching niches."
true
false

5 Identify consumer and marketer reactions to the state of the economy

8. Canadian incomes have continued to decline after several periods of recession and inflation.
true
false

7 Discuss the political and legal environment of marketing

9. Ricky Simons thinks that a competing firm may be engaging in unfair competition. The federal agency that would address this charge would probably be the Competition Bureau.

true
false

8 Explain the basics of foreign and domestic competition

10. Marketing managers should be concerned with competition because most marketing firms exist in a purely competitive environment.

true
false

MULTIPLE-CHOICE QUESTIONS
Select the response that best answers the question, and write the corresponding letter in the space provided.

1 Discuss the external environment of marketing and explain how it affects a firm

11. Resorts International, Inc., focuses much of its marketing effort on Baby Boomers who have large disposable incomes and young children. The company offers a large variety of services, including the traditional sporting and leisure services as well as creative child care services. Baby Boomers would be considered Resorts International's:

a. market niche
b. environment
c. target market
d. market segmentation
e. external environment

12. The Mondo Moped Company spends much money trying to influence the passage of bills in Parliament that would limit the amount of foreign-made mopeds that can be sold in Canada. The Mondo Moped Company is engaging in:
a. defensive marketing
b. pure competition
c. corporate espionage
d. legislative planning
e. environmental management

2 Describe the social factors that affect marketing

13. Tina Mathews is the Director of Marketing Planning for Visionary Electronics Systems. She has been examining the social factors that may affect the way in which Visionary Electronics does business with consumers in the next decade. Which of the following social factors might affect the way her firm does business?
a. The population is growing older
b. The income levels will rise in the next decade
c. More products will be made with high-tech ceramics
d. Today's shoppers are environmentalists
e. Fewer babies are being born

14. The manufacturer of New Rage Clothing has a marketing department that keeps track of current external environmental changes. Although some information is relatively easy to collect, analyzing and forecasting ____________ trends is extremely difficult, yet these trends may be the most important factor for this company.

a. social
b. economic
c. legislative
d. technological
e. demographic

15. The Dispozall Company produces disposable toiletries (razors, combs, curlers, and so on) designed for the busy person who wants simplicity, ease of use, and the convenience of disposable products. Which current environmental trend(s) may pose a major new threat to this company?
a. social factors that are increasing are an interest in the environment and recycling
b. technological factors that are automating production
c. demographic factors that demonstrate a decrease in the birthrate
d. many large competitors in the same industry
e. product safety legislation currently under review by the Consumer Product Safety Commission

16. Ricky is a helicopter pilot for the forestry service. He is also a computer programmer, stock portfolio manager, and breeder of pedigreed sable ferrets. His other interests include reading, woodworking, and jazz. Marketers would describe Ricky's needs for goods and services as:

a. fitting into a well-educated segment
b. a component lifestyle
c. inappropriate in all segments
d. the typical pilot target segment
e. a conforming lifestyle

3 Explain the importance to marketing managers of current demographic trends

17. Georgetta Wilson is a marketer of consumer packaged goods that can be purchased in grocery stores nationwide. Which of the following demographic changes should she be concerned about as impacting the sales of her firm's products?
a. The population growth rate of less than one percent and a rate of new household formation under two percent is the slowest growth rate since the Great Depression.
b. Over 16 per cent of Canadians move each year.
c. Today's fifty-plus consumers are wealthier, healthier, and better educated than earlier generations of older Canadians.
d. All of the above demographic changes could affect the sales of packaged goods produced by Ms. Wilson's firm.
e. None of the above are true demographic changes that have occurred. Further, even if they have occurred they would have little if any impact on consumer packaged goods sales in general, and the products sold by Ms. Wilson's firm.

18. This demographic target market was "born to shop." Entire industries, such as children's software, children's versions of adult clothing (such as Baby Gap), and creative educational products have spawned to target this group of people. The target market described above is:

a. Generation X
b. Generation Y
c. grandparents
d. Baby Boomers
e. Generation A

19. You will be marketing to "Generation X" and know that all of the following facts about this group will affect your marketing plan EXCEPT:

a. this group is materialistic
b. Generation Xers spend lots of money on eating out and electronic items
c. this group is the first generation of latchkey children because of dual career households
d. Generation Xers are the most likely group to be successfully employed
e. members of Generation X do not mind indulging themselves with movies, clothing, and alcoholic beverages

20. The number one trait that parents of baby boomers wanted to drive into their children was:

a. optimism
b. "me first"
c. conformity
d. to think for themselves
e. materialism

4 Explain the importance to marketing managers of multiculturalism and growing ethnic markets

21. The Cool Clothing Company has just hired you to develop a marketing strategy for their new line of casual wear. The firm wants to target several different ethnic groups, so you suggest a "stitching niches" approach. Which of the following would you use to illustrate your suggestion?

a. create a different product for each of the niche markets the firm is targeting
b. position the products so they simultaneously meet the needs of the different ethnic groups
c. maintain Cool's core identity by creating different promotional campaigns and brand extensions for the various markets served
d. use the same marketing mix that has worked so well for the firm throughout the West Coast
e. gain market share by developing an entirely distinct marketing mix for the largest niche market

5 Identify consumer and marketer reactions to the state of the economy

22. Jorge is a marketing manager faced with planning marketing strategies during times of inflation. He should be aware that inflation causes consumers to:

a. purchase more goods and services to support their psychological well-being such as counseling and stress management training
b. decrease their brand loyalty to products they have traditionally used
c. buy in small quantities until inflation is over
d. consume more meals away from home
e. put more money into savings accounts because prices are too high

23. Harold is the owner of a luxury car dealership. He is very worried about his business because sales of his luxury cars have declined dramatically. He has read that unemployment is up, that consumer spending is down, and consumer income is also down. Which of the following best describes the current economy?
a. recession
b. inflation
c. stagnation
d. price escalation
e. depression

6 Identify the impact of technology on a firm

24. Your company has just allotted $25 million to research and development, with a goal of solving the specific problem of removing fats from meat products while keeping taste. This way, "fat-free" burgers can be marketed in fast-food restaurants. Your company is engaging in:

a. basic research
b. product introduction
c. pure research
d. fundamental development
e. applied research

8 Explain the basics of foreign and domestic competition

25. Danny finds that his startup company, a manufacturer of cordless telephones, has been seriously affected by the type and number of competitors in this area. In particular, one area of his marketing mix, ____________, is dependent upon the competition.
a. product
b. price
c. promotion
d. distribution
e. production

9 Discuss corporate social responsibility

26. Like most other large corporations, the Bizby Corporation feels that its social responsibility:
a. is the province of marketing managers
b. may encourage more government regulation
c. is secondary to earning
d. is inversely proportional to profits
e. extends beyond simply earning profits

27. The pyramid of corporate social responsibility assumes that ____________ responsibility is the foundation, without which the other responsibilities could not exist.

a. economic
b. ethical
c. moral
d. philanthropic
e. legal