Deck 3: The Marketing Environment, Ethics, and Social Responsibility

Question 1

Consumer spending sinks to its lowest level during an economic depression.

Answer 1

True

Question 2

During the recession stage of the business cycle, consumers have enough money to spend, but caution often restraints their willingness to buy.

Answer 2

False

Question 3

The competition among Amtrak, Hertz, and Delta Airlines for the travelers' dollar is considered indirect competition because these services can be substituted for one another.

Answer 3

True

Question 4

In addition to planning for change, marketers must set goals to meet the concerns of customers, employees, shareholders, and members of the general public.

Question 5

The industry deregulation phase has focused on increasing the competition in industries such as utilities and financial services.

Question 6

During an 18-month period, sales of Mercedes automobiles, Carnival Cruise vacations, and Florida real estate increased by at least 20 percent. A marketer might deduce that the business cycle is in the late stages of recovery or experiencing a period of economic prosperity.

Question 7

During an economic recession, marketers look to emphasize value in their offerings by reducing prices in order to help consumers stretch their budget dollars.

Question 8

The success or failure of a product is independent of the competitive environment.

Question 9

The antitrust laws in the United States were designed to protect the interests of organizations having monopoly positions.

Question 10

The first phase of federal regulation of business was aimed at protecting competitors and included the Robinson-Patman Act, passed in the 1930s.

Question 11

Maros, an agricultural biotechnology company, is the sole supplier of genetically engineered seeds and controls 84 percent of the market share for genetically modified crops. This is an example of a monopoly.

Question 12

The governmental regulations that affect marketing practices are mainly for advertising and distribution, and do not place any restrictions and prohibitions on the design and packaging of products.

Question 13

The deregulation movement has ended total monopoly protection for most utilities.

Question 14

The gross domestic product (GDP) of a nation does not take into consideration the goods and services that are exported to foreign markets.

Question 15

Marketing theory would define Starbucks, Caribou Coffee, and Dunkin' Donuts as indirect competitors because some coffee drinkers are particular about the brands they purchase.

Question 16

The Federal Trade Commission was established to facilitate trade by removing tariffs and other trade barriers among Canada, Mexico, and the United States.

Question 17

The decision of whether or not to compete should be based on a firm's resources, objectives, and expected profit potential.

Question 18

Public and private consumer interest groups and self-regulatory organizations are part of the legal environment.

Question 19

The most direct form of competition occurs among marketers of dissimilar products.

Question 20

Sears offers discount coupons and lowers prices on 1,000 items in the store in order to generate sales. This is most likely to occur during an economic recession.

Question 21

Production, promotion, and reclamation of environmentally sensitive products is the basic premise of ethical marketing.

Question 22

Despite its many advantages, technology can seldom address social concerns.

Question 23

Fresh Meadows, an organic yogurt manufacturer, organizes camps to assist and encourage farmers in adopting organic farming practices. Fresh Meadows is engaging in socially responsible marketing.

Question 24

The extent of consumer spending is directly related to the rate of unemployment.

Question 25

Technological innovations create not just new goods and services but also entirely new industries.

Question 26

Laura decided to quit her job and travel for a year. She can be considered a part of the population that is unemployed.

Question 27

The cultural diversity of the United States results in various submarkets, each with unique values, cultural characteristics, purchasing behaviors, and consumer preferences.

Question 28

A major constraint on consumer spending is deflation, which devalues money by reducing the products it can buy through persistent price increases.

Question 29

Indirect competition occurs among marketers of:

A) similar products.
B) products that satisfy different needs.
C) products that can be easily substituted.
D) products that belong to different categories.

Question 30

Marketers are usually more concerned with the amount of discretionary income in households.

Question 31

The United States is becoming culturally more diverse and subculture populations are rising.

Question 32

Discretionary income is the amount of money people have to spend on buying necessities such as food, clothing, and housing.

Question 33

A market structure in which a single seller dominates trade in a good or service for which buyers can find no close substitutes is called a(n) _____.

A) oligopoly
B) monopoly
C) monopsony
D) perfect market

Question 34

The Direct Marketing Association helps consumers to get their names removed from marketers' targeted lists.

Question 35

Which of the following has ended total monopoly protection for most utilities such as natural gas, electricity, water, and cable TV service?

A) Deregulation movement
B) Disinvestment
C) Temporary monopoly
D) Perfect competition

Question 36

Technological advancement helps reduce prices and offers superior, cost-efficient distribution methods.

Question 37

Long deflationary periods can cause a freefall in business profits, lower returns on most investments, and widespread job layoffs.

Question 38

A stay-at-home mother, a high school senior, and a retired government employee are considered unemployed if they do not have a job and don't want one.

Question 39

Deflation is necessarily better for the economy than inflation as inflation devalues money and reduces the purchasing power of consumers.

Question 40

Which of the following statements is true regarding a monopoly?

A) It is enjoyed by an organization that is the sole supplier of a good or service.
B) It is common in the telecommunications industry.
C) It cannot be achieved temporarily, even through the use of patents and similar legal devices.
D) It is the most common type of competition in the U.S. market.

Question 41

In Australia, consumer spending in the past few months has seen an upward trend, and buyers are willing to spend more on premium brands. From this pattern, we can say that Australia is in the _____ stage of the business cycle.

A) recovery
B) prosperity
C) recession
D) depression

Question 42

Which of the following is an example of indirect competition?

A) A Sony home entertainment system competing with a Jacuzzi hot tub
B) An ExxonMobil station opening across the street from a Shell retail outlet
C) Competition among Verizon, AT&T, and T-Mobile
D) The purchase of a Honda Accord competing with a Toyota Camry

Question 43

_____ can lead to a damaging downward spiral, causing a freefall in business profits, lower returns on most investments, and widespread job layoffs.

A) Deflation
B) Lower interest rates
C) Inflation
D) A federal budget surplus

Question 44

It has been seen that periods of major innovations often lead to:

A) reduced personal consumption.
B) higher standards of living.
C) decreased annual spending.
D) reduced discretionary income.

Question 45

The _____ component of the marketing environment consists of laws that require firms to operate under competitive conditions and to protect consumer rights.

A) economic
B) competitive
C) social-cultural
D) political-legal

Question 46

During which phase in the business cycle do marketers consider lowering prices and increasing promotions that include special offers to stimulate demand?

A) Prosperity
B) Recession
C) Growth
D) Maturity

Question 47

News reports from Zimbabwe indicate that a small pack of locally produced coffee beans costs approximately 1 billion Zimbabwean dollars, an amount that would have bought 60 new cars less than ten years ago in the same country. It can be surmised that Zimbabwe is experiencing extremely high levels of _____, which has spiraled out of control in the past ten years.

A) growth
B) stagflation
C) deflation
D) inflation

Question 48

Which of the following components of the marketing environment consists of factors that influence consumer buying power and marketing strategies?

A) Competitive environment
B) Cultural environment
C) Economic environment
D) Regulatory environment

Question 49

It is believed that marketers need to reevaluate their strategies and concentrate on their most promising products during the _____ stage of the business cycle.

A) recession
B) recovery
C) maturity
D) prosperity

Question 50

Which of the following devalues money and reduces its purchasing power through persistent increase in prices?

A) Disinflation
B) Stagflation
C) Inflation
D) Deflation

Question 51

_____ leads to new goods and services for consumers, improves existing products, offers better customer service, and often reduces prices through new, cost-efficient production and distribution methods.

A) Reintermediation
B) Consumerism
C) Disintermediation
D) Technology

Question 52

The history of U.S. government regulation can be divided into four phases: the antimonopoly period, _____, consumer protection, and industry deregulation.

A) protecting trade
B) protecting competitors
C) protecting cyberspace
D) protecting privacy

Question 53

Which of the following is a trend usually observed during an economic depression?

A) Consumers are willing to spend more for premium versions of well-known brands.
B) Consumers have money to spend, but caution often restrains their willingness to buy.
C) Consumers focus on more basic, functional products that carry lower price tags.
D) Businesses offer new products, expand distribution, and raise prices to widen profit margins.

Question 54

The amount of money available with people after buying necessities such as food, clothing, and housing is referred to as _____.

A) basic income
B) gross income
C) discretionary income
D) personal income

Question 55

JP Video Rentals is offering a "Rent 2 get 1 free" video rental coupon. They have been accused of deceptive advertising throughout the United States. Which division of the Council of Better Business Bureaus is designated to handle such cases?

A) The National Advertising Division
B) The Advertising Standards Authority
C) The Direct Marketing Association
D) The Institute of Sales Promotion

Question 56

When marketers offer new products, increase their promotional efforts, and expand their distributional limits, it is a sign of:

A) low inflation and low unemployment.
B) low inflation and high unemployment.
C) high inflation and high unemployment.
D) high inflation and low unemployment.

Question 57

In times of prosperity, marketers respond to consumer buying behavior by:

A) launching special value-priced products that are likely to appeal to cost-conscious buyers.
B) holding down costs and offering superior services at lower prices.
C) lowering prices and increasing promotions that include special offers to stimulate demand.
D) offering new products, increasing their promotional efforts, and expanding distribution.

Question 58

Which of the following agencies supports consumer rights through its initiative of informing consumers of their right to modify or discontinue receiving solicitations?

A) The Federal Trade Commission
B) The Direct Marketing Association
C) The Council of Better Business Bureaus
D) The Consumer Product Safety Commission

Question 59

Which of the following usually indicates a strong economy?

A) Growth in services such as banking and restaurants
B) Cautious spending by businesses and consumers
C) A focus on basic, functional products with lower price tags
D) Increase in purchasing power coupled with uncertain consumer demand

Question 60

The Council of Better Business Bureaus is a national organization devoted to consumer service and _____.

A) business self-regulation
B) deregulation
C) corporate lobbying
D) socially responsible investing

Question 61

Summarize the economic factors that influence marketing decision making and consumer buying behavior.

Question 62

What are the questions that can help a company to determine a competitive strategy? Discuss.

Question 63

How can marketers help companies to meet their social responsibility? What impact does social responsibility have on the public's perception of an organization? Give examples of companies that have undertaken socially responsible initiatives.

Question 64

Which of the following ethical issues is associated with firms' product strategies?

A) Exclusive territories
B) False and deceptive advertising
C) Planned obsolescence
D) Bait-and-switch advertising

Question 65

Define the terms inflation and deflation. Discuss their effects on the economy with the help of real-life examples.

Question 66

In marketing, _____ involves accepting an obligation to give equal weight to profits, consumer satisfaction, and social well-being in evaluating a firm's performance.

A) greenwashing
B) consumerism
C) social responsibility
D) demarketing

Question 67

What is the role of the Federal Trade Commission (FTC) in the regulation of marketing activities?

Question 68

​Since the latter part of the 19th century, the U.S. government has played an activist role in the financial markets and the market for goods and services. The emphasis of their role has varied over this time as different issues and dynamics were at the forefront of business and economic trends. The first phase of the U.S. government's active regulatory role, in the early part of the 20th century, can be best described as which of the following?

A) ​The cyberspace phase
B) ​The consumer protection phase
C) ​The protecting consumers phase
D) ​The antimonopoly phase
E) ​The industry deregulation phase

Question 69

Marketers' standards of conduct and moral values is termed as _____.

A) social marketing
B) corporate identity
C) green marketing
D) marketing ethics

Question 70

Describe the role of ethics in the promotion of products and services.

Question 71

List out the four phases in the history of U.S. government regulations. Why were these regulations passed?

Question 72

Marketing raises a number of ethical questions about the how, when, what, where, and who of marketing implications on individuals and society at large. Ethics are of concern in every aspect of marketing. Your company offers cash rewards to consumers in return for them giving you information that you could use in your own marketing or that you could sell to direct marketers. Which category of ethics does this scenario represent?

A) Ethics in product strategy
B) Ethics in promotion
C) Ethics in pricing
D) Ethics in customer relationship management

Question 73

What ethical issues might arise when developing a product strategy?

Question 74

Marketers are keenly aware that good marketing alone is not enough to win the hearts and minds of consumers anymore. Now, marketers must market in a socially responsible manner or risk alienating consumers in ways that can be irreparable. Which one of the following statements is true regarding social responsibility?

A) Government legislation can mandate socially responsible actions.
B) Consumer activism cannot promote social responsibility.
C) There are five dimensions of social responsibility.
D) Consumers demand that marketers give more weight to profits than to social well-being.
E) The traditional concept of social responsibility only extended to employees.

Question 75

Which of the following protects the consumer by exerting legal, moral, and economic pressures on business and government?

A) Consumerism
B) Corporate branding
C) Socialism
D) Capitalism

Question 76

Differentiate between direct and indirect competition with examples.

Question 77

The overall health of the economy has a significant impact on consumers' ability and willingness to purchase goods and services. The most reliable measure of the economy's health is the sum of all final goods and services produced in the country in a given period. This measure is called ____________.

A) National income
B) Gross national product
C) Consumer expenditures
D) Gross domestic product
E) Corporate profits

Question 78

The technological environment that a company operates in represents all the discoveries made via science, inventions and innovation that impacts the firm's marketing strategy. Which one of the following statements is false regarding the impact of technology on the firm's marketing endeavors?

A) Technology can lead to new goods and services
B) Technology can improve existing products and customer service
C) Technology can reduce prices through new production and distribution methods
D) Since it is equally accessible by all competitors, it offers limited competitive advantages
E) It can help address social concerns

Question 79

What is consumerism? What can marketers do to protect the consumer's right to be informed?

Question 80

Explain the importance of the technological environment on marketing.