M Marketing 5th Edition Grewal Test Bank 1

M Marketing 5th Edition
Grewal Test Bank

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Chapter 05
Analyzing the Marketing Environment
True / False Questions
1. By paying close attention to customer needs and continuously monitoring the environment in
which it operates, a good marketer can identify potential opportunities.
True False
2. When analyzing the immediate environment and the macroenvironment, marketers must be
careful to keep the firm at the center of all analyses.
True False
5-1
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McGraw-Hill Education.
3. Successful firms focus their efforts on satisfying customer needs that match their core
competencies.
True False
4. In the immediate environment, the competition has no effect on consumers.
True False
5. The three elements of the consumer's immediate environment are the company, competition,
and corporate partners.
True False
6. Demographics are transmitted by words, literature, and institutions from generation to

generation.
True False
7. Demographic profiles of customers provide an easily understood "snapshot" of the typical

consumer in target markets.
True False
8. As the euro becomes more expensive relative to the dollar, Americans are likely to purchase
more European wines.
True False
9. Macroenvironmental factors include the company, competition, and corporate partners.
True False
10. Members of Generation Y are also called Millennials.
True False
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11. After World War II the birthrate in the United States rose sharply, resulting in a group known
as the Baby Boomers.
True False
12. The members of Generation X are also referred to as Digital Natives.
True False
13. One of the social trends discussed in the text that is shaping consumer values in the United
States and around the world is a concern about the vast disparity in income.
True False
14. Culture can broadly be defined as the shared meanings, beliefs, morals, values, and customs
of a group of people.
True False
15. Burger King no longer uses SpongeBob SquarePants to promote burgers and fries because
the character is no longer popular with young children.
True False
16. Socially responsible marketing is defined as a strategic effort by firms to supply customers
with environmentally friendly merchandise.
True False
17. Firms that disingenuously market products or services as environmentally friendly, with the
goal of gaining public approval and sales rather than actually improving the environment, are
engaging in greenwashing.
True False
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18. The next broad wave of mobile applications is likely to center on "m-wallets" which will
enable customers' smartphones to be used for wireless payments.
True False
19. Inflation refers to the cost of borrowing money.
True False
20. The 1890 Sherman Antitrust Act prohibited monopolies and other activities that would
restrain trade or competition.
True False
21. For a marketer, the central focus of the entire business process should be the economy.
True False
22. Parties that work with the focal firm are its corporate partners.
True False
23. Jeanne, who lives in Boston, refers to Pepsi as "soda," while Paul, who lives in Chicago, calls
it "pop." This is an example of a regional culture difference.
True False
24. Lisle Hair Company keeps track of the gender and age of its customers so it can target e-
mails to them and be sure to have the right hair products in stock when they visit. This is an
example of the use of demographics in marketing.
True False
25. Applying age as a basis to identify customers is unethical, as it involves stereotyping.
True False
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Multiple Choice Questions
26. As a retail clothing store manager, Randy frequently asks his staff what customers are saying
and what they are asking for. He also attends the quarterly clothing show at the regional
merchandise mart. Randy's efforts will likely help him
A. avoid cognitive dissonance.

B. implement just-in-time marketing promotions.
C. identify potential opportunities.
D. avoid the need to understand regional culture.
E. achieve cost savings.
27. The centerpiece of the marketing environment analysis framework is
A. the economy.
B. corporate partners.
C. culture.
D. competitive intelligence.
E. consumers.
28. A firm's macroenvironment includes all of the following except
A. competition.
B. culture.
C. demographics.
D. economics.
E. political/legal issues.
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29. The center of all marketing efforts is
A. profits.
B. the consumer.
C. corporate social responsibility.
D. top management.
E. the firm.
30. As director of a small art gallery, one of Frederica's major concerns is the preferences of the
people who buy her artists' work. Frederica recognizes that the center of her marketing
efforts is
A. profits.
B. her target customers.
C. artistic social responsibility.
D. competing art galleries.
E. the arts movement.
31. One of the goals of value-based marketing is
A. to provide the greatest value for the least profit.

B. to sell products for the highest possible price.
C. to offer greater value than competitors offer.
D. to determine the value of the brand.
E. to sell to all consumers, regardless of their needs.
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32. Ryan knows that one of the goals of value-based marketing is to provide greater value to
consumers than competitors offer. To accomplish this goal, Ryan's firm must look at
everything it does
A. in order to value each person in the organization.

B. for each generational cohort.
C. to avoid cultural clashes.
D. from a consumer's point of view.
E. to sensitize organization members to ethical values.
33. Yvonne knows her firm must look at everything it does from a consumer's point of view. One
major difficulty is that consumers' __________ change(s) over time.
A. ethnic background
B. needs, wants, and ability to purchase
C. culture
D. just-in-time processes
E. demographics
34. Select the statement that best describes the key traits of Generation Y.
A. This generation varies the most in age, ranging from teenagers to adults who have their
own families.
B. This generation is the largest population of 50-plus consumers.
C. This generation is the group that was born immediately after World War II.
D. This generation was the first generation of latchkey children.
E. Members of this generation—also known as Digital Natives—have had access to the
Internet for their entire lives.
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35. Which of the following statements accurately describes the current income distribution in the
United States?
A. The purchasing power of lower-income groups has been steadily rising.

B. The middle class is outpacing all other income groups.
C. Wealthy households are outpacing both poor and middle-class households.
D. The income distribution among all households is becoming more equal.
E. Wealthy households are declining rapidly in purchasing power.
36. When you register your telephone number with the National Do Not Call Registry, you are
responding to a need for
A. privacy.
B. enhanced information flow.
C. lower phone bills.
D. marketing contact.
E. tactical communication skills.
37. In the immediate marketing environment, the first factor that affects the consumer is
A. demographics.
B. cultural values.
C. social trends.
D. the firm itself.
E. technological advances.
38. Successful firms focus their efforts on satisfying customer needs that
A. are easiest to satisfy.

B. provide minimal core value.
C. are important to all generational cohorts.
D. competitors have tried and failed to satisfy.
E. match their core competencies.
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39. The Mayo Clinic in Minnesota is known for top-quality medical care. For decades, even
presidents and dictators from around the world flew to the Mayo Clinic to utilize its services.
The Mayo Clinic used its reputation to create additional medical facilities in Jacksonville,
Florida, and elsewhere. This is an example of a firm focusing its efforts on satisfying
customer needs that

E. match its core competencies.
40. Yuri is considering a new promotional campaign in which he will compare his products to
those of his competitors. Before initiating the promotional campaign, Yuri will assess his
competitors' strengths, weaknesses, and
A. likely reaction to his promotional activities.

B. demographics.
C. just-in-time processes.
D. satisfaction quotient as perceived by customers.
E. ethical values.
41. The firms that work along with the focal firm to provide goods and services to consumers are
viewed as
A. cultural cohorts.
C. cartels.
D. cooperatives.
E. customers.
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42. Yellow Trucking provides transportation services for Dan's Delicious Donuts so that Dan's
stores always have fresh stock. Yellow Trucking is an example of a
A. cultural cohort.
B. corporate partner.
C. cartel.
D. cooperative.
E. customer.
43. The difference between a firm's immediate marketing environment and its macroenvironment
is that the macroenvironment
A. is external.
B. is easier to understand.
C. is easier to control.
D. has fewer components.
E. is internal.
44. The shared meanings, beliefs, morals, values, and customs of a group of people constitute
their
A. social concerns.
B. culture.
C. demographics.
D. generational cohorts.
E. religion.
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45. Political candidates are notorious for appealing to the different beliefs and values of groups
of potential voters in different areas of the country. These politicians are appealing to
differences in
A. popular culture.
B. regional culture.
C. demographics.
E. country culture.
46. Insight Guides, a line of travel books, provides travelers with background information about
people's beliefs, values, and customs in various parts of the world. Insight's books educate
travelers about a country's
A. social concerns.
B. political parties.
C. demographics.
E. culture.
47. When studying culture, the challenge for marketers is to determine whether culture
A. can help identify a particular group that might be interested in the marketer's products.
B. is regional or subregional.
C. reinforces stereotypes.
D. is related to educational achievement.
E. offers opportunities for competitors.
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48. Late in the day on September 11, 2001, the day of the World Trade Center attacks, Americans
purchased all the American flags Walmart stores had available, nationwide. These purchases
were indicative of
A. regional culture.
B. generational cohort characteristics.
C. country culture.
D. a red/blue marketing campaign.
E. the Walmart Effect.
49. The United States has often been called the "melting pot" society, integrating people from
many different cultures into the social fabric of the country. The challenge for marketers is to
determine whether a group's culture
A. is socially important.
B. is passed from generation to generation orally or by written guides.
C. competes with or complements U.S. traditional culture.
D. can be used as a relevant identifier for a particular target group.
E. is an important immediate marketing environment variable.
50. When considering the use of a radio commercial in England that was designed for U.S.
markets, a marketer would likely need to consider which of the following aspects of culture
that might be different between the two countries?
A. dress
B. symbols
C. demographics
D. language
E. social trends
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51. In New England foot-long sandwiches are called "grinders," while in many other parts of the
country they are called "subs." This is an example of the impact of
B. country culture.
C. generational factors.
D. social trends.
E. regulatory factors.
52. Country culture and regional culture are both part of a firm's
A. demographics.
B. macroenvironment.
C. political/legal environment.
D. economic environment.
E. immediate environment.
53. Typical demographic data include all of the following except
A. gender.
B. income.
C. race.
D. education.
E. language differences.
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54. When marketers look at advertising media they often begin with viewer or listener profiles
such as age, income, gender, and race. They then compare the media profile with their target
audience. These marketers are using __________ to see if the media "fit" with their
advertising agenda.
A. country culture
B. regional culture
C. demographics
D. micromarketing measures
E. scenario planning
55. Generational cohorts are groups of people of the same generation who have similar
__________ because they have shared experiences and are in the same stage of life.
A. regional cultures
B. inflationary expectations
C. political affiliations
D. purchase behaviors
E. cultural values
56. Viewers of the World Series are likely to see ads for beer and cars, and viewers of the Miss
America Pageant broadcast are likely to see ads for clothing and hair care products, due to
A. cultural expectations.
B. male domination in corporate boardrooms.
C. differing demographic data for potential and past viewers.
D. marketers' general perceptions.
E. multiyear advertising contracts that cannot be broken.
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57. ________ is/are distinguished from the other generational cohorts in that the group's oldest
members are now collecting Social Security.
A. Baby Boomers
B. Generation W
C. Generation X
D. Generation Y
E. Generation Z
58. Marketers wanting to use social media to reach consumers should understand that _______
were born into a world that was already full of electronic gadgets and digital technologies
such as the Internet and social networks.
A. Baby Boomers
B. Generation W
C. Generation X
D. Generation Y
E. Generation Z
59. The first "latchkey" children belong to which generational cohort?
A. Baby Boomers
B. Generation W
C. Generation X
D. Generation Y
E. Generation Z
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60. According to your text, the wealthiest 1 percent of the population control approximately what
percentage of Americans' total net worth?
A. 5.2 percent
B. 15.8 percent
C. 26.9 percent
D. 34.6 percent
E. 51.9 percent
61. ABC Company knew that its customers were interested in environmentally friendly business
practices, so it began marketing all of its products as environmentally friendly because they
were made with all-natural ingredients, even though ABC's plant was one of the worst
polluters in town. The new term for this practice is
A. deceptive advertising.
B. greenwashing.
C. environmental exploitation.
D. virtual greening.
E. enviromarketing.
62. When considering income as a demographic variable affecting marketing efforts, marketers
need to recognize that
A. everyone is equal.
B. income in the United States has become more unevenly distributed.
C. everyone has been equally affected by the recession.
D. there is increasing purchasing power among lower-income groups.
E. middle-income consumers are quickly becoming upper-income consumers.
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63. Astute marketers recognize that the increasing disparity of income between upper- and
lower-income groups
A. will create inflationary expectations.

B. will disappear as ethnicity becomes a stronger cultural determinant.
C. creates opportunities to provide value to each group.
D. will vanish once the recession ends.
E. is attributable to technological expertise of immigrant groups.
64. Population estimates show that by the year 2050, nearly 30 percent of the population in the
United States will come from which group?
A. Hispanics
B. Asians
C. Pacific Islanders
D. Native Americans
E. Eastern Europeans
65. For some products, marketers can combine education level with other data like occupation
and income to obtain
A. a sense of consumers' regional culture.

B. consumers' value sensitivity quotient (VSQ).
C. the educational value equation.
D. complete profiles of individual consumers.
E. useful predictions of purchase behavior.
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66. Marketers know that, compared to high school graduates who are working full time, college
students
A. will earn less over their working lifetime.

B. spend their disposable income differently.
C. are less likely to buy textbooks.
D. have almost identical spending patterns.
E. are more likely to drink beer and less likely to drink wine.
67. Which of the following is true regarding modern gender roles?
A. Gender roles are a constant cultural norm.

B. Modern standards require firms to produce gender neutral advertising for every product.
C. Gender roles have been blurred in the past several years.
D. Gender boundaries should never be crossed in marketing efforts.
E. Gender roles are unimportant to marketers.
68. The results of the 2010 census suggest what about the 42 million African American U.S.
households?
A. They are more affluent and suburban.

B. They are younger and less affluent.
C. They are less affluent, but more suburban.
D. They are older and less affluent.
E. They are older and more urban.
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69. Marketers in the United States are paying increasing attention to ethnic groups because
A. they represent a majority of the population in nonurban areas of the country.

B. approximately 80 percent of all population growth in the next 20 years is expected to come
from minority groups.
C. they are more susceptible to marketing messages.
D. government subsidies assist marketers attempting to communicate value to these groups.
E. country culture is replacing regional culture as a key marketing consideration.
70. Marketers are more likely to find higher concentrations of foreign-born Americans and recent
immigrants in
A. rural areas.
B. smaller states.
C. New York, Los Angeles, and Chicago.
D. coastal resort areas.
E. Great Lakes agricultural areas.
71. Though Asian Americans comprise only about 6 percent of the U.S. population, they
represent
A. the fastest-growing minority population.

B. the easiest minority group to access.
C. a large proportion of the minorities in the Midwest.
D. a uniform group of consumers with a common language and cultural background.
E. all of these
5-19
72. Strategic efforts to supply consumers with environmentally friendly, sustainable merchandise
and services are called
A. reduce, reuse, recycle.

B. green marketing.
C. the green generation.
D. the inconvenient truth.
E. earth marketing.
73. By offering environmentally responsible products, green marketers
A. undercut prices of nonenvironmentally responsible marketers.

B. keep costs much lower than those of competitors.
C. make consumers feel guilty for buying other products.
D. add value that other products do not have.
E. all of these
74. Many American consumers are purchasing hybrid automobiles even though they are more
expensive than compact conventional autos. These consumers
A. value contributing to a greener environment.

B. are economically irrational.
C. are responding to global corporate pressure for social responsibility.
D. would prefer an SUV.
E. are greenwashing.
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75. Every time a consumer surfs the web and clicks on a site, online marketers can place _____
on that user's computer, showing them how that consumer navigates the web and what he or
she does or does not buy.
A. web portals
B. cookies
C. browsers
D. bookmarks
E. pirates
76. Which retailer, in 2013, suffered a massive security breach that allowed hackers to steal
credit and debit card information for 40 million customers?
A. Macy's
B. Target
C. Kmart
D. Sears
E. JCPenney
77. Which technological advancement enables a firm to track an item from the moment it was
manufactured, through the distribution system, to the retail store, and into the hands of the
final consumer?
A. RFID tags
B. JIT inventory systems
C. data mining systems
D. greenwashing
E. Internet cookies
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78. An advance in technology called RFID makes it easier for manufacturers, distributors, and
retailers to track items through production, distribution, and sales. This advance helps the
firm
A. increase value to the consumer through media effectiveness promotion.

B. tailor its marketing messages.
C. meet inventory needs.
D. communicate with consumers on social media sites.
E. replace services with products.
79. When marketers monitor the economic situation affecting their target markets, they are likely
to monitor changes in all of the following except
A. purchasing power.
B. interest rates.
C. inflation.
D. age.
E. currency exchange rates.
80. If the inflation rate in Mexico was twice the rate in the United States, but the Mexican
monetary authorities kept the peso-dollar exchange rate almost constant, which of the
following would be true?
A. The high inflation rate in Mexico would increase its citizens' purchasing power.
B. The high inflation rate in Mexico would mean that its products would cost less overall.
C. Mexican products would be less expensive, while U.S.-made products would become
comparatively more expensive.
D. Mexican products would be more expensive, while U.S.-made products would become
comparatively less expensive.
E. U.S.-made products would become less attractive to purchase.
5-22
81. Laws that prohibit the formation of monopolies or alliances that would damage a competitive
marketplace benefit consumers through
A. increased choices.
B. higher prices.
C. protection from false advertising.
D. fair debt collection practices.
E. fewer competitors.
82. Which of the following groups has never lived without easy access to the Internet and other
digital technologies?
A. Baby Boomers
B. Generation W
C. Generation X
D. Generation Y
E. Generation Z
83. Which of these is a macroenvironmental factor?
A. culture
B. corporate partners
C. competition
D. company
E. competencies
5-23
84. Kimberly-Clark recently introduced rolls of toilet paper without the cardboard core. What
social trend does this product respond to?
A. green marketing
B. time-poor society
C. cultural diversity
D. technological advances
E. regulatory issues
85. If McDonald's wanted to change its marketing strategy in response to the social trends
outlined in the text, it might consider all of the following ideas except
A. offering an expanded menu of healthy options.

B. making nutritional information readily available to consumers.
C. using recycled paper in its food packaging.
D. using solar power in its restaurants.
E. creating an advertising campaign targeting elementary schoolchildren.
86. Suppose that you are the vice president of marketing for Target, the large retail store chain.
You want to keep your website and in-store services current with technological advances.
You would be experimenting with what is most likely the next expected development in
mobile technology, which is
A. wireless payments from mobile devices.

B. location-based social media applications.
C. mobile devices completely replacing desktop and laptop computers.
D. devices that block smartphone usage in retail stores.
E. RFID tags.
5-24
87. Some companies have been accused of taking advantage of the current social trend of green
marketing, positioning their products as environmentally friendly when this may not actually
be the case. This is called
A. fake greening.
B. greenwashing.
C. greenbaiting.
D. green puffery.
E. red marketing.
88. Part of the social trend toward health and wellness is a concern about the increasing degree
of obesity in the United States. Related to this, the text notes the increasing popularity of
A. flu shots.
B. high-carbohydrate diets.
C. yoga.
D. cooking shows on TV.
E. juicing.
89. The political/regulatory environment comprises political parties, governmental organizations,

and
A. legislation and laws.

B. citizens.
C. interest groups.
D. for profit and nonprofit businesses.
E. international influences.
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90. Christy, who was born in 1955, advocated for "casual Friday" at her workplace. Christy is a
member of which generational cohort?
A. Baby Boomer
B. Gen X
C. Gen Y
D. Gen Z
E. Millennials
91. Which generation's members are also known as Millennials?
A. Baby Boomers
B. Gen X
C. Gen Y
D. Gen Z
E. the Digital Natives
92. The poorest 10 percent of the U.S. population earned less than _______ per week in 2013.
A. $2,500
B. $1,801
C. $1,265
D. $920
E. $392
93. Which statement about the changing ethnicity in the United States is true?
A. Minorities now represent almost half of the population in the United States.
B. In spite of increases in the Hispanic population, Hispanic buying power is expected to
maintain its current level.
C. Hispanics differ vastly from other groups in America in terms of consumer behavior.
D. African American U.S. households are more affluent than previous studies suggested.
E. Asian Americans are the slowest-growing minority population.
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94. According to the text, 14 cable companies agreed to provide low-cost Internet access to
impoverished families for all of the following reasons except
A. calls for greater social responsibility.

B. increased income from a larger number of subscribers.
C. increased access to faster broadband capabilities.
D. the economic status of consumers.
E. pressures from the Federal Communications Commission.
95. The government has enacted laws that promote both fair trade and competition by
prohibiting the formation of monopolies or alliances that would damage a competitive
marketplace, fostering fair pricing practices for all suppliers and consumers. These actions
are part of the ________ environment of business.
A. communication
B. political/regulatory
C. constitutional
D. social
E. technological
96. Which of the following specifically prohibits monopolies?
A. Sherman Antitrust Act

B. Federal Trade Act
C. Robinson-Patman Act
D. Financial Reform Law
E. Consumer Product Act
5-27
97. What is most likely to happen when inflation increases?
A. Consumers buy more discretionary merchandise.

B. Consumers buy fewer personal care and home entertainment products.
C. Off-price and discount retailers suffer from lower sales.
D. Consumers buy lower-priced foods.
E. Consumers buy less food.
98. ________ is the cost to the customers or the fee the bank charges those customers for
borrowing money.
A. Interest
B. A service charge
C. A tax
D. A tariff
E. A user fee
99. The value of the euro has changed significantly since 2002 with the problems experienced by
several European economies. This change in value is called
A. interest destabilization.
B. inflation.
C. recession.
D. foreign currency fluctuations.
E. global financial impact.
5-28
100.When Diana went to college, tuition was $650 per semester. Now that same college charges
$6,500 per semester. This number reflects a persistent increase in price known as
A. currency fluctuation.
B. inflation.
C. recession.
D. interest.
E. deflation.
101.From a firm's perspective, the biggest advantage of RFID is
A. it enables the firm to track an item from the moment it was manufactured.
B. it tells the firm who is buying the product and how it is being used.
C. it provides demographic information on the consumer for marketing use.
D. it is less expensive to use than other forms of marketing research.
E. it eliminates the need for communicating with the supply chain.
102.Which of the following is an example of greenwashing?
A. A company markets a product made from recycled glass bottles.

B. A company charges more for a hybrid car than for a similar gas model.
C. A company donates money to a school reading project so it can advertise itself as
environmentally friendly.
D. The Smiths installed energy-saving lightbulbs in their rental apartment buildings.
E. The corner Laundromat stocks only phosphate-free detergent in its vending machines.
103.What percentage of U.S. adults now recycles their soda bottles and newspapers?
A. 10 percent
B. 20 percent
C. 50 percent
D. 75 percent
E. 90 percent
5-29
104.Which of the following is a social trend listed in the text?
A. thrift
B. health and wellness
C. environmental legislation
D. economic concerns
E. technological advances
105.Which ethnic group in the United States tends to earn more, have more schooling, and be
more likely to be professionally employed or own a business?
A. Northern European
B. Middle Eastern
C. Hispanic
D. Asian
E. African American
106.Which ethnic group tends to be not only more affluent and suburban than previously thought,
but also younger, with 47 percent between the ages of 18 and 49 years?
A. Caucasian
B. Pacific Islander
C. Hispanic
D. Asian
E. African American
107.A generational cohort is a group of people
A. who share similar ethnic characteristics.

B. who grew up and went to school together.
C. with the same beliefs and values.
D. who are of the same generation.
E. who are not open to new things.
5-30
Essay Questions
108.Discuss how privacy concerns have become a current social issue. What technological
invention has prompted the rise in concern over privacy?
109.Imagine that you have just been made the marketing manager for your university. Your first
task is to assess your university's immediate environment. What questions will you likely
ask?
5-31
110.Irvina is a general practice physician. Her office includes a number of nurses, clerical
assistants, and a physician's assistant. She runs a well-organized practice, but she depends
on a variety of corporate partners to create value for her patients. Who are likely to be
Irvina's corporate partners and how do they help or hinder her efforts to create value?
111.International marketers new to the United States often struggle to define American culture.
What would these international marketers need to study in order to define the term and what
would they be likely to learn?
112.The United States has often been called the "melting pot" society, integrating people from
many different cultures into the social fabric of the country. What challenges do marketers
face in assessing U.S. culture?
5-32
113.Baby Boomers represent a tremendous opportunity for today's marketers. Who are the Baby
Boomers? Based on their age, what might be some products that they would be interested
in?
114."Income distribution in the United States has grown more polarized." What does this mean in
general, and what does it mean especially to marketers in the United States?
115.At almost every major university, some group on campus pressures the university to become
"greener." What does this mean? What does it usually involve? Why would a university want
to become greener?
5-33
116.How can marketers identify potential opportunities?
117.Gaetana is the new marketing director for a local theater. One of her major responsibilities is
to monitor and manage aspects of the theater's immediate environment. What will Gaetana
monitor and manage?
118.Marketers in the United States are learning that Hispanic and other minority groups are not
alike. How do cultural differences affect purchase decisions? What can be said about the
buying power of Hispanics?
5-34
119.In some parts of the United States a long sandwich is called a sub sandwich. In other parts of
the country it is called a grinder. This is an example of what type of macroenvironmental
factor?
120.Mary Grace is studying the demographics of the students attending her elementary school.
What information will Mary Grace study?
121.Which generational cohort members are characterized as being "Digital Natives," having had
access to the Internet their entire lives?
5-35
122.Two of the characteristics of this generational cohort that distinguishes them from Baby
Boomers are that they were the first generation to grow up with both parents working, and
that half of them have divorced parents. They are the first generation of latchkey children.
Which generational cohort has these characteristics?
123.In recent decades, how has income distribution changed in the United States?
124.Every year Pam reassesses the economic situation in the target markets her company serves.
What factors will Pam likely assess?
5-36
125.An Uncle Ben's box of rice has a symbol stating that the packaging is made from 100 percent
recycled material and encourages consumers to recycle. Identify the social trend being
addressed by Uncle Ben's.
126.As demographic factors, why are marketers interested in the education level, occupation, and
income of consumers?
127.Identify three tactics that a mid-priced motel chain might employ to take advantage of the
social trends discussed in the text, in hopes of increasing its business. For each tactic,
identify the social trend it is based on.
5-37
128.Why are generational cohorts important to marketers?
129.Explain how gender roles have changed, and how that has influenced marketing practices in
the United States.
130.Name the various social trends that impact marketing, and give one example that
demonstrates how each one influences marketing practices.
5-38
131.Discuss the political and regulatory environment of business as it relates to the protection of
consumers. Name and describe at least two laws that had a major impact on fair
competition, consumer protection, or industry-specific regulation.
132.How do the economic factors of inflation, foreign currency fluctuations, and interest rates
affect firms' ability to market goods and services?
133.Name one technological advance that has impacted how consumers research and buy
products. Give an example from your own experience.
5-39
134.How is the balance of ethnicities in the U.S. population changing, and what implications does
this have for marketers?
135.What is greenwashing and why do consumers need to be aware of it?
5-40
Chapter 05 Analyzing the Marketing Environment Answer Key
True / False Questions
1. By paying close attention to customer needs and continuously monitoring the environment
in which it operates, a good marketer can identify potential opportunities.
TRUE
Changes in the environment can be a source of opportunities for the firm.
AACSB: Analytical Thinking

Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-01 Outline how customers, the company, competitors, and corporate partners affect marketing
strategy.
Topic: Understanding the Marketing Environment
2. When analyzing the immediate environment and the macroenvironment, marketers must
be careful to keep the firm at the center of all analyses.
FALSE
The consumer, not the firm, should be kept at the center of all activity.

Blooms: Remember
Difficulty: 1 Easy
strategy.
5-41
3. Successful firms focus their efforts on satisfying customer needs that match their core
competencies.
TRUE
The firm's competencies are its strengths; the firm is likely to have the most success if it
focuses on these, finding customers whose needs it can meet using these strengths.

Blooms: Remember
Difficulty: 1 Easy
strategy.
4. In the immediate environment, the competition has no effect on consumers.
FALSE
Competitors are one factor in the immediate environment that affects consumers.

Blooms: Remember
Difficulty: 1 Easy
strategy.
5-42
5. The three elements of the consumer's immediate environment are the company,
competition, and corporate partners.
TRUE
These are the three components of the immediate environment.

Blooms: Remember
Difficulty: 1 Easy
strategy.
6. Demographics are transmitted by words, literature, and institutions from generation to

generation.
FALSE
The question describes culture, not demographics.

Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Explain why marketers must consider their macroenvironment when they make decisions.
Topic: Macroenvironment
5-43
7. Demographic profiles of customers provide an easily understood "snapshot" of the typical
consumer in target markets.
TRUE
Although demographics do not completely describe consumers, they offer a summary

snapshot of consumer characteristics that can be useful.

Blooms: Understand
Topic: Demographic Environment
8. As the euro becomes more expensive relative to the dollar, Americans are likely to
purchase more European wines.
FALSE
When the euro becomes more expensive relative to the dollar, it means that it costs more
dollars to buy European goods, which is likely to lead to a drop in the quantity of European
wine purchased by Americans.

Blooms: Understand
Learning Objective: 05-04 Identify various social trends that impact marketing.
Topic: Economic Environment
5-44
9. Macroenvironmental factors include the company, competition, and corporate partners.
FALSE
Macroenvironmental factors are external factors such as culture, demographics, social

issues, technological advances, economic situation, and political/regulatory environments.
The factors listed in the question relate to the immediate environment.

Blooms: Remember
Difficulty: 1 Easy
10. Members of Generation Y are also called Millennials.
TRUE
The group of people born between 1977 and 2000 are referred to as Generation Y, Gen Y,
or Millennials.

Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 Describe the differences among the various generational cohorts.
Topic: Generational Cohorts
5-45
11. After World War II the birthrate in the United States rose sharply, resulting in a group
known as the Baby Boomers.
TRUE
Baby Boomers represent the 78 million Americans born between 1946 and 1964.

Blooms: Remember
Difficulty: 1 Easy
12. The members of Generation X are also referred to as Digital Natives.
FALSE
Digital Natives are members of Generation Z, not Generation X.

Blooms: Remember
Difficulty: 1 Easy
5-46
13. One of the social trends discussed in the text that is shaping consumer values in the
United States and around the world is a concern about the vast disparity in income.
FALSE
The social trends mentioned in the text are a greater emphasis on health and wellness
concerns, greener consumers, and privacy concerns.

Blooms: Understand
Topic: Social-Cultural Environment
14. Culture can broadly be defined as the shared meanings, beliefs, morals, values, and
customs of a group of people.
TRUE
This is the definition of culture. Culture can be transmitted by words, literature, and
institutions; it is passed down from generation to generation and learned over time.

Blooms: Remember
Difficulty: 1 Easy
5-47
15. Burger King no longer uses SpongeBob SquarePants to promote burgers and fries because
the character is no longer popular with young children.
FALSE
Burger King no longer uses SpongeBob because new advertising guidelines do not allow
linking unhealthy foods with cartoon characters.

Blooms: Understand
16. Socially responsible marketing is defined as a strategic effort by firms to supply customers
with environmentally friendly merchandise.
FALSE
This is the definition of green marketing.

Blooms: Remember
Difficulty: 1 Easy
5-48
17. Firms that disingenuously market products or services as environmentally friendly, with
the goal of gaining public approval and sales rather than actually improving the
environment, are engaging in greenwashing.
TRUE
Consumers need to question whether a firm is spending significantly more money and
time advertising being green and operating with consideration for the environment than
actually spending these resources on environmentally sound practices.

Blooms: Remember
Difficulty: 1 Easy
18. The next broad wave of mobile applications is likely to center on "m-wallets" which will
enable customers' smartphones to be used for wireless payments.
TRUE
Applications such as Google Wallet, MasterCard's Easy Pay, and Isis Mobile Wallet all
enable customers' phones to serve as m-wallets.
AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
Topic: Technological Environment
5-49
19. Inflation refers to the cost of borrowing money.
FALSE
Inflation refers to the persistent increase in the prices of goods and services.

Blooms: Remember
Difficulty: 1 Easy
20. The 1890 Sherman Antitrust Act prohibited monopolies and other activities that would
restrain trade or competition.
TRUE
This is correct; it made fair trade within a free market a national goal.

Blooms: Remember
Difficulty: 1 Easy
Topic: Political and Legal Environment
5-50
21. For a marketer, the central focus of the entire business process should be the economy.
FALSE
The marketing firm must consider the entire business process, all from a consumer's point
of view.

Blooms: Remember
Difficulty: 1 Easy
strategy.
22. Parties that work with the focal firm are its corporate partners.
TRUE
This is correct. Firms collaborate with other firms to produce and market their products.

Blooms: Remember
Difficulty: 1 Easy
strategy.
5-51
23. Jeanne, who lives in Boston, refers to Pepsi as "soda," while Paul, who lives in Chicago,
calls it "pop." This is an example of a regional culture difference.
TRUE
Regional culture affects many aspects of people's lives, including their vocabulary.
AACSB: Knowledge Application

Blooms: Apply
Difficulty: 3 Hard
24. Lisle Hair Company keeps track of the gender and age of its customers so it can target e-
mails to them and be sure to have the right hair products in stock when they visit. This is
an example of the use of demographics in marketing.
TRUE
Typical demographics include age, gender, income, and race.

Blooms: Apply
Difficulty: 3 Hard
5-52
25. Applying age as a basis to identify customers is unethical, as it involves stereotyping.
FALSE
Applying age as a basis to identify consumers is quite useful to marketers, as long as it is

used in conjunction with other consumer characteristics.

Blooms: Understand
Multiple Choice Questions
5-53
26. As a retail clothing store manager, Randy frequently asks his staff what customers are
saying and what they are asking for. He also attends the quarterly clothing show at the
regional merchandise mart. Randy's efforts will likely help him
A. avoid cognitive dissonance.

B. implement just-in-time marketing promotions.
C. identify potential opportunities.
D. avoid the need to understand regional culture.
E. achieve cost savings.
Close attention to the marketing environment and customer needs is one of the best
sources of opportunities.

Blooms: Apply
Difficulty: 3 Hard
strategy.
5-54
27. The centerpiece of the marketing environment analysis framework is
A. the economy.
C. culture.
D. competitive intelligence.
E. consumers.
The consumer is the center of all marketing activities.

Blooms: Remember
Difficulty: 1 Easy
strategy.
28. A firm's macroenvironment includes all of the following except
A. competition.
B. culture.
C. demographics.
D. economics.
E. political/legal issues.
Competition is part of the immediate environment, not the macroenvironment.

Blooms: Remember
Difficulty: 1 Easy
5-55
29. The center of all marketing efforts is
A. profits.
B. the consumer.
C. corporate social responsibility.
D. top management.
E. the firm.
The consumer should be at the center of all marketing activities.

Blooms: Remember
Difficulty: 1 Easy
strategy.
30. As director of a small art gallery, one of Frederica's major concerns is the preferences of
the people who buy her artists' work. Frederica recognizes that the center of her marketing
efforts is
A. profits.
B. her target customers.
C. artistic social responsibility.
D. competing art galleries.
E. the arts movement.
Frederica's customers should be at the center of all her marketing activities.

Blooms: Understand
strategy.
5-56
31. One of the goals of value-based marketing is
A. to provide the greatest value for the least profit.

B. to sell products for the highest possible price.
C. to offer greater value than competitors offer.
D. to determine the value of the brand.
E. to sell to all consumers, regardless of their needs.
Value-based marketing has to do with offering the greatest possible value to consumers
and offering a greater value than competitors offer.

Blooms: Understand
strategy.
5-57
32. Ryan knows that one of the goals of value-based marketing is to provide greater value to
consumers than competitors offer. To accomplish this goal, Ryan's firm must look at
everything it does
A. in order to value each person in the organization.

B. for each generational cohort.
C. to avoid cultural clashes.
D. from a consumer's point of view.
E. to sensitize organization members to ethical values.
It is the consumer's perception of value that matters, and so the firm's plans must be
considered from the consumer's point of view.

Blooms: Understand
strategy.
5-58
33. Yvonne knows her firm must look at everything it does from a consumer's point of view.
One major difficulty is that consumers' __________ change(s) over time.
A. ethnic background
B. needs, wants, and ability to purchase
C. culture
D. just-in-time processes
E. demographics
The firm must continually scan the environment, because consumers' wants and needs
are not static.

Blooms: Understand
strategy.
5-59
34. Select the statement that best describes the key traits of Generation Y.
A. This generation varies the most in age, ranging from teenagers to adults who have their
own families.
B. This generation is the largest population of 50-plus consumers.
C. This generation is the group that was born immediately after World War II.
D. This generation was the first generation of latchkey children.
E. Members of this generation—also known as Digital Natives—have had access to the
Internet for their entire lives.
Generation Y is the biggest cohort since the original postwar World War II boom. It also
varies the most in age, ranging from teenagers to adults who have their own families.

Blooms: Understand
5-60
35. Which of the following statements accurately describes the current income distribution in
the United States?
A. The purchasing power of lower-income groups has been steadily rising.

B. The middle class is outpacing all other income groups.
C. Wealthy households are outpacing both poor and middle-class households.
D. The income distribution among all households is becoming more equal.
E. Wealthy households are declining rapidly in purchasing power.
Income distribution in the United States has grown more polarized—the highest-income
groups are growing, whereas many middle- and lower-income groups' real purchasing
power keeps declining.

Blooms: Understand
5-61
36. When you register your telephone number with the National Do Not Call Registry, you are
responding to a need for
A. privacy.
B. enhanced information flow.
C. lower phone bills.
D. marketing contact.
E. tactical communication skills.
Privacy is a major concern for consumers, and the Federal Trade Commission is
responding by trying to protect consumers against unwanted telephone solicitations.

Blooms: Remember
Difficulty: 1 Easy
37. In the immediate marketing environment, the first factor that affects the consumer is
A. demographics.
B. cultural values.
C. social trends.
D. the firm itself.
E. technological advances.
The components of the immediate environment are the firm, its competitors, and its
corporate partners.

Blooms: Understand
strategy.
5-62
38. Successful firms focus their efforts on satisfying customer needs that

E. match their core competencies.

Blooms: Understand
strategy.
5-63
39. The Mayo Clinic in Minnesota is known for top-quality medical care. For decades, even
presidents and dictators from around the world flew to the Mayo Clinic to utilize its
services. The Mayo Clinic used its reputation to create additional medical facilities in
Jacksonville, Florida, and elsewhere. This is an example of a firm focusing its efforts on
satisfying customer needs that

E. match its core competencies.

Blooms: Apply
Difficulty: 3 Hard
strategy.
5-64
40. Yuri is considering a new promotional campaign in which he will compare his products to
those of his competitors. Before initiating the promotional campaign, Yuri will assess his
competitors' strengths, weaknesses, and
A. likely reaction to his promotional activities.

B. demographics.
C. just-in-time processes.
D. satisfaction quotient as perceived by customers.
E. ethical values.
Yuri must consider competitors' strengths and weaknesses in order to perform accurate
comparisons; he must also understand how competitors will respond to the promotional
campaign.

Blooms: Understand
strategy.
5-65
41. The firms that work along with the focal firm to provide goods and services to consumers
are viewed as
A. cultural cohorts.
C. cartels.
D. cooperatives.
E. customers.
Corporate partners work with the firm to provide goods and services.

Blooms: Remember
Difficulty: 1 Easy
strategy.
42. Yellow Trucking provides transportation services for Dan's Delicious Donuts so that Dan's
stores always have fresh stock. Yellow Trucking is an example of a
A. cultural cohort.
B. corporate partner.
C. cartel.
D. cooperative.
E. customer.
Corporate partners work with the firm to provide goods and services.

Blooms: Apply
Difficulty: 3 Hard
strategy.
5-66
43. The difference between a firm's immediate marketing environment and its
macroenvironment is that the macroenvironment
A. is external.
B. is easier to understand.
C. is easier to control.
D. has fewer components.
E. is internal.
The macroenvironment consists of factors external to the firm.

Blooms: Remember
Difficulty: 1 Easy
44. The shared meanings, beliefs, morals, values, and customs of a group of people constitute
their
A. social concerns.
B. culture.
C. demographics.
E. religion.
This is the definition of culture. Some of the answer options (such as religion) are aspects
of culture, but it is a broader concept.

Blooms: Remember
Difficulty: 1 Easy
5-67
45. Political candidates are notorious for appealing to the different beliefs and values of
groups of potential voters in different areas of the country. These politicians are appealing
to differences in
A. popular culture.
B. regional culture.
C. demographics.
E. country culture.
Regional culture refers to cultural differences across different areas of a country.

Blooms: Understand
46. Insight Guides, a line of travel books, provides travelers with background information
about people's beliefs, values, and customs in various parts of the world. Insight's books
educate travelers about a country's
A. social concerns.
B. political parties.
C. demographics.
E. culture.
People's beliefs, values, and customs relate to their culture.

Blooms: Understand
5-68
47. When studying culture, the challenge for marketers is to determine whether culture
A. can help identify a particular group that might be interested in the marketer's products.
B. is regional or subregional.
C. reinforces stereotypes.
D. is related to educational achievement.
E. offers opportunities for competitors.
The challenge for marketers is to have products or services identifiable by and relevant to
a particular group of people.

Blooms: Understand
48. Late in the day on September 11, 2001, the day of the World Trade Center attacks,
Americans purchased all the American flags Walmart stores had available, nationwide.
These purchases were indicative of
B. generational cohort characteristics.
C. country culture.
D. a red/blue marketing campaign.
E. the Walmart Effect.
Country culture consists of a country's shared beliefs and values, which included a strong
thread of patriotism after the World Trade Center attacks.

Blooms: Apply
Difficulty: 3 Hard
5-69
many different cultures into the social fabric of the country. The challenge for marketers is
to determine whether a group's culture
A. is socially important.
B. is passed from generation to generation orally or by written guides.
C. competes with or complements U.S. traditional culture.
D. can be used as a relevant identifier for a particular target group.
E. is an important immediate marketing environment variable.
Some groups in the United States preserve their cultural identities while others seek to
blend in. The more a group seeks to maintain its identity, the more relevant culture will be
to identify a potential customer group.

Blooms: Understand
5-70
50. When considering the use of a radio commercial in England that was designed for U.S.
markets, a marketer would likely need to consider which of the following aspects of
culture that might be different between the two countries?
A. dress
B. symbols
C. demographics
D. language
E. social trends
Language would be an important cultural issue; while both countries speak English, there
are many differences in vocabulary.

Blooms: Understand
51. In New England foot-long sandwiches are called "grinders," while in many other parts of
the country they are called "subs." This is an example of the impact of
B. country culture.
C. generational factors.
D. social trends.
E. regulatory factors.
These types of language differences are typical examples of regional cultural differences.

Blooms: Apply
Difficulty: 3 Hard
5-71
52. Country culture and regional culture are both part of a firm's
A. demographics.
B. macroenvironment.
C. political/legal environment.
D. economic environment.
E. immediate environment.
Country culture and regional culture are both part of a firm's macroenvironment.

Blooms: Understand
53. Typical demographic data include all of the following except
A. gender.
B. income.
C. race.
D. education.
E. language differences.
All of these are examples of demographic factors except language differences, which is a
cultural trait.

Blooms: Remember
Difficulty: 1 Easy
5-72
54. When marketers look at advertising media they often begin with viewer or listener profiles
such as age, income, gender, and race. They then compare the media profile with their
target audience. These marketers are using __________ to see if the media "fit" with their
advertising agenda.
A. country culture
B. regional culture
C. demographics
D. micromarketing measures
E. scenario planning
Age, income, gender, and race are demographic factors.

Blooms: Understand
5-73
55. Generational cohorts are groups of people of the same generation who have similar
__________ because they have shared experiences and are in the same stage of life.
A. regional cultures
B. inflationary expectations
C. political affiliations
D. purchase behaviors
E. cultural values
Generational cohorts are presumed to have similar purchase behaviors due to similar life
experiences and similarity of life stage.

Blooms: Understand
5-74
56. Viewers of the World Series are likely to see ads for beer and cars, and viewers of the
Miss America Pageant broadcast are likely to see ads for clothing and hair care products,
due to
A. cultural expectations.
B. male domination in corporate boardrooms.
C. differing demographic data for potential and past viewers.
D. marketers' general perceptions.
E. multiyear advertising contracts that cannot be broken.
Gender is a demographic variable, and these programs do tend to attract different

genders; thus, this difference in advertising is based on demographic information.

Blooms: Apply
Difficulty: 3 Hard
57. ________ is/are distinguished from the other generational cohorts in that the group's
oldest members are now collecting Social Security.
A. Baby Boomers
B. Generation W
C. Generation X
D. Generation Y
E. Generation Z
Baby Boomers, those born between 1946 and 1964, are now collecting Social Security.

Blooms: Understand
5-75
58. Marketers wanting to use social media to reach consumers should understand that
_______ were born into a world that was already full of electronic gadgets and digital
technologies such as the Internet and social networks.
A. Baby Boomers
B. Generation W
C. Generation X
D. Generation Y
E. Generation Z
Members of Generation Z are also known as Digital Natives since they have always had
electronic gadgets and digital technologies in their world.
AACSB: Technology
Blooms: Understand
59. The first "latchkey" children belong to which generational cohort?
A. Baby Boomers
B. Generation W
C. Generation X
D. Generation Y
E. Generation Z
Generation X children grew up in homes in which both parents worked.

Blooms: Remember
Difficulty: 1 Easy
5-76
60. According to your text, the wealthiest 1 percent of the population control approximately
what percentage of Americans' total net worth?
A. 5.2 percent
B. 15.8 percent
C. 26.9 percent
D. 34.6 percent
E. 51.9 percent
Income distribution in the United States has grown more polarized. The wealthiest 1
percent of the population control approximately 34.6 percent of Americans' total net worth;
the bottom 90 percent control only 26.9 percent in comparison.

Blooms: Remember
Difficulty: 1 Easy
5-77
61. ABC Company knew that its customers were interested in environmentally friendly
business practices, so it began marketing all of its products as environmentally friendly
because they were made with all-natural ingredients, even though ABC's plant was one of
the worst polluters in town. The new term for this practice is
A. deceptive advertising.
B. greenwashing.
C. environmental exploitation.
D. virtual greening.
E. enviromarketing.
The term for disingenuously marketing products as environmentally friendly when they are
not is greenwashing.

Blooms: Apply
Difficulty: 3 Hard
5-78
62. When considering income as a demographic variable affecting marketing efforts,
marketers need to recognize that
A. everyone is equal.
B. income in the United States has become more unevenly distributed.
C. everyone has been equally affected by the recession.
D. there is increasing purchasing power among lower-income groups.
E. middle-income consumers are quickly becoming upper-income consumers.
Income distribution has become increasingly unequal in the United States, with high-
income groups getting richer and low-income groups getting poorer.

Blooms: Understand
63. Astute marketers recognize that the increasing disparity of income between upper- and
lower-income groups
A. will create inflationary expectations.

B. will disappear as ethnicity becomes a stronger cultural determinant.
C. creates opportunities to provide value to each group.
D. will vanish once the recession ends.
E. is attributable to technological expertise of immigrant groups.
Upper-income, middle-income, and lower-income individuals are all consumers, and all
can be offered value in different ways.

Blooms: Understand
5-79
64. Population estimates show that by the year 2050, nearly 30 percent of the population in
the United States will come from which group?
A. Hispanics
B. Asians
C. Pacific Islanders
D. Native Americans
E. Eastern Europeans
Approximately 80 percent of all population growth in the next 20 years is expected to come
from African American, Hispanic, and Asian communities. Minorities now represent
approximately one-quarter of the population; by 2050 they will represent about 50 percent,
and nearly 30 percent of the population will be Hispanic.

Blooms: Understand
5-80
65. For some products, marketers can combine education level with other data like occupation
and income to obtain
A. a sense of consumers' regional culture.

B. consumers' value sensitivity quotient (VSQ).
C. the educational value equation.
D. complete profiles of individual consumers.
E. useful predictions of purchase behavior.
Certain habits—such as preferences for entertainment—can be predicted with reasonable

accuracy from education, occupation, and income.

Blooms: Understand
66. Marketers know that, compared to high school graduates who are working full time,
college students
A. will earn less over their working lifetime.

B. spend their disposable income differently.
C. are less likely to buy textbooks.
D. have almost identical spending patterns.
E. are more likely to drink beer and less likely to drink wine.
Education and occupation are partial predictors of how consumers spend their time and
money, particularly in terms of leisure activities.

Blooms: Understand
5-81
67. Which of the following is true regarding modern gender roles?
A. Gender roles are a constant cultural norm.

B. Modern standards require firms to produce gender neutral advertising for every
product.
C. Gender roles have been blurred in the past several years.
D. Gender boundaries should never be crossed in marketing efforts.
E. Gender roles are unimportant to marketers.
Gender roles have been becoming less fixed and more blurred for the last several years,
with men and women no longer playing traditional roles. While gender-neutral promotion
is used far more often today, there are still some products that are marketed primarily to a
specific gender.

Blooms: Understand
5-82
68. The results of the 2010 census suggest what about the 42 million African American U.S.
households?
A. They are more affluent and suburban.

B. They are younger and less affluent.
C. They are less affluent, but more suburban.
D. They are older and less affluent.
E. They are older and more urban.
The census of 2010 counts 42 million African American U.S. households, who are more
affluent and suburban than previous studies suggested. They also tend to be younger.

Blooms: Understand
69. Marketers in the United States are paying increasing attention to ethnic groups because
A. they represent a majority of the population in nonurban areas of the country.

B. approximately 80 percent of all population growth in the next 20 years is expected to
come from minority groups.
C. they are more susceptible to marketing messages.
D. government subsidies assist marketers attempting to communicate value to these
groups.
E. country culture is replacing regional culture as a key marketing consideration.
Ethnic groups represent a fast-increasing percentage of the U.S. population.

Blooms: Understand
5-83
70. Marketers are more likely to find higher concentrations of foreign-born Americans and
recent immigrants in
A. rural areas.
B. smaller states.
C. New York, Los Angeles, and Chicago.
D. coastal resort areas.
E. Great Lakes agricultural areas.
Although they can be found anywhere, immigrants and foreign-born Americans are found
in large numbers in major cities like New York, Los Angeles, Chicago, and San Francisco.

Blooms: Remember
Difficulty: 1 Easy
71. Though Asian Americans comprise only about 6 percent of the U.S. population, they
represent
A. the fastest-growing minority population.

B. the easiest minority group to access.
C. a large proportion of the minorities in the Midwest.
D. a uniform group of consumers with a common language and cultural background.
E. all of these
Asian Americans are the fastest-growing ethnic minority in the United States.

Blooms: Understand
5-84
72. Strategic efforts to supply consumers with environmentally friendly, sustainable
merchandise and services are called
A. reduce, reuse, recycle.

B. green marketing.
C. the green generation.
D. the inconvenient truth.
E. earth marketing.
Green marketing refers to the marketing of environmentally conscious, sustainable

products and services.

Blooms: Remember
Difficulty: 1 Easy
73. By offering environmentally responsible products, green marketers
A. undercut prices of nonenvironmentally responsible marketers.

B. keep costs much lower than those of competitors.
C. make consumers feel guilty for buying other products.
D. add value that other products do not have.
E. all of these
Environmentally responsible products have additional value for consumers to whom

protecting the environment is important.

Blooms: Understand
5-85
74. Many American consumers are purchasing hybrid automobiles even though they are more
expensive than compact conventional autos. These consumers
A. value contributing to a greener environment.

B. are economically irrational.
C. are responding to global corporate pressure for social responsibility.
D. would prefer an SUV.
E. are greenwashing.
These consumers are willing to pay more for environmentally friendly products because
care for the environment is something that adds value.

Blooms: Understand
5-86
75. Every time a consumer surfs the web and clicks on a site, online marketers can place
_____ on that user's computer, showing them how that consumer navigates the web and
what he or she does or does not buy.
A. web portals
B. cookies
C. browsers
D. bookmarks
E. pirates
Consumers are expressing concern over their privacy rights when online. Online marketers
that use "cookies" to track consumers' habits now find that consumers view this practice
as an unacceptable invasion of privacy.
AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy
5-87
76. Which retailer, in 2013, suffered a massive security breach that allowed hackers to steal
credit and debit card information for 40 million customers?
A. Macy's
B. Target
C. Kmart
D. Sears
E. JCPenney
Target's breach of security also allowed hackers to steal personal information, including
the phone numbers and addresses of 70 million people.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
5-88
77. Which technological advancement enables a firm to track an item from the moment it was
manufactured, through the distribution system, to the retail store, and into the hands of
the final consumer?
A. RFID tags
B. JIT inventory systems
C. data mining systems
D. greenwashing
E. Internet cookies
Radio frequency identification (RFID) tags help marketers because they assist in
determining exactly how much of each product is at a given point in the supply chain.
Retailers can also communicate with their suppliers to plan to meet their inventory needs.
AACSB: Technology
Blooms: Understand
5-89
78. An advance in technology called RFID makes it easier for manufacturers, distributors, and
retailers to track items through production, distribution, and sales. This advance helps the
firm
A. increase value to the consumer through media effectiveness promotion.

B. tailor its marketing messages.
C. meet inventory needs.
D. communicate with consumers on social media sites.
E. replace services with products.
Some of the other options address ways that technology can help firms communicate with
consumers; however, the question asks about members of the supply chain using
technology; inventory management is an example of how the supply chain can benefit
from technology.

Blooms: Understand
5-90
79. When marketers monitor the economic situation affecting their target markets, they are
likely to monitor changes in all of the following except
A. purchasing power.
B. interest rates.
C. inflation.
D. age.
E. currency exchange rates.
Income, interest rates, and inflation are among the economic factors; age is a
demographic factor.

Blooms: Understand
5-91
80. If the inflation rate in Mexico was twice the rate in the United States, but the Mexican
monetary authorities kept the peso-dollar exchange rate almost constant, which of the
following would be true?
A. The high inflation rate in Mexico would increase its citizens' purchasing power.
B. The high inflation rate in Mexico would mean that its products would cost less overall.
C. Mexican products would be less expensive, while U.S.-made products would become
comparatively more expensive.
D. Mexican products would be more expensive, while U.S.-made products would become
comparatively less expensive.
E. U.S.-made products would become less attractive to purchase.
By keeping the exchange rate constant, U.S.-made products' prices would go down,
compared to their Mexican counterparts, whose prices would rise with inflation.

Blooms: Analyze
Difficulty: 3 Hard
5-92
81. Laws that prohibit the formation of monopolies or alliances that would damage a
competitive marketplace benefit consumers through
A. increased choices.
B. higher prices.
C. protection from false advertising.
D. fair debt collection practices.
E. fewer competitors.
The concern about monopolies and alliances is that they will inhibit competition, possibly
raising prices and reducing choice.

Blooms: Understand
82. Which of the following groups has never lived without easy access to the Internet and
other digital technologies?
A. Baby Boomers
B. Generation W
C. Generation X
D. Generation Y
E. Generation Z
Members of the Generation Z, the Digital Natives, have had access to Internet technology
for their entire lives.

Blooms: Remember
Difficulty: 1 Easy
5-93
83. Which of these is a macroenvironmental factor?
A. culture
B. corporate partners
C. competition
D. company
E. competencies
Corporate partners, competition, and company are all part of the immediate environment.

Blooms: Remember
Difficulty: 1 Easy
84. Kimberly-Clark recently introduced rolls of toilet paper without the cardboard core. What
social trend does this product respond to?
A. green marketing
B. time-poor society
C. cultural diversity
D. technological advances
E. regulatory issues
By eliminating the cardboard core, a form of consumer waste is eliminated, which would
be of interest to consumers concerned about the environment—in other words, this is an
example of green marketing.

Blooms: Apply
Difficulty: 3 Hard
5-94
85. If McDonald's wanted to change its marketing strategy in response to the social trends
outlined in the text, it might consider all of the following ideas except
A. offering an expanded menu of healthy options.

B. making nutritional information readily available to consumers.
C. using recycled paper in its food packaging.
D. using solar power in its restaurants.
E. creating an advertising campaign targeting elementary schoolchildren.
Targeting preteens is related to demographic factors, not a current social trend, and in fact
would probably be considered to work against the social trend toward health and wellness,
given that many of McDonald's menu items are considered to be unhealthy.

Blooms: Evaluate
Difficulty: 3 Hard
5-95
86. Suppose that you are the vice president of marketing for Target, the large retail store
chain. You want to keep your website and in-store services current with technological
advances. You would be experimenting with what is most likely the next expected
development in mobile technology, which is
A. wireless payments from mobile devices.

B. location-based social media applications.
C. mobile devices completely replacing desktop and laptop computers.
D. devices that block smartphone usage in retail stores.
E. RFID tags.
Applications are being developed to take advantage of near field communication, a short-
range wireless communication method that will allow (among other things) wireless
payments to be sent from mobile devices. This would allow consumers to pay with nothing
more than a smartphone.
AACSB: Technology
Blooms: Apply
Difficulty: 3 Hard
5-96
87. Some companies have been accused of taking advantage of the current social trend of
green marketing, positioning their products as environmentally friendly when this may not
actually be the case. This is called
A. fake greening.
B. greenwashing.
C. greenbaiting.
D. green puffery.
E. red marketing.
Greenwashing is the practice of claiming environmental benefits for a product that are not
genuine.

Blooms: Remember
Difficulty: 1 Easy
5-97
88. Part of the social trend toward health and wellness is a concern about the increasing
degree of obesity in the United States. Related to this, the text notes the increasing
popularity of
A. flu shots.
B. high-carbohydrate diets.
C. yoga.
D. cooking shows on TV.
E. juicing.
Yoga classes and supplies are increasing in popularity as part of the wellness trend.

Blooms: Remember
Difficulty: 1 Easy
89. The political/regulatory environment comprises political parties, governmental

organizations, and
A. legislation and laws.

B. citizens.
C. interest groups.
D. for profit and nonprofit businesses.
E. international influences.
The political/regulatory environment comprises political parties, government

organizations, and legislation and laws.

Blooms: Remember
Difficulty: 1 Easy
5-98
90. Christy, who was born in 1955, advocated for "casual Friday" at her workplace. Christy is a
member of which generational cohort?
A. Baby Boomer
B. Gen X
C. Gen Y
D. Gen Z
E. Millennials
Baby Boomers are people born after World War II between 1946 and 1964.

Blooms: Apply
Difficulty: 3 Hard
91. Which generation's members are also known as Millennials?
A. Baby Boomers
B. Gen X
C. Gen Y
D. Gen Z
E. the Digital Natives
Generation Y members are also called Millennials.

Blooms: Remember
Difficulty: 1 Easy
5-99
92. The poorest 10 percent of the U.S. population earned less than _______ per week in 2013.
A. $2,500
B. $1,801
C. $1,265
D. $920
E. $392
The poorest 10 percent of the population earned less than $392 per week.

Blooms: Remember
Difficulty: 1 Easy
93. Which statement about the changing ethnicity in the United States is true?
A. Minorities now represent almost half of the population in the United States.
B. In spite of increases in the Hispanic population, Hispanic buying power is expected to
maintain its current level.
C. Hispanics differ vastly from other groups in America in terms of consumer behavior.
D. African American U.S. households are more affluent than previous studies suggested.
E. Asian Americans are the slowest-growing minority population.
The 2010 U.S. Census counted 42 million African American U.S. households, who are more
affluent and suburban than previous studies suggested.

Blooms: Evaluate
Difficulty: 3 Hard
5-100
94. According to the text, 14 cable companies agreed to provide low-cost Internet access to
impoverished families for all of the following reasons except
A. calls for greater social responsibility.

B. increased income from a larger number of subscribers.
C. increased access to faster broadband capabilities.
D. the economic status of consumers.
E. pressures from the Federal Communications Commission.
Increased income is not mentioned as a reason for this change.

Blooms: Remember
Difficulty: 1 Easy
5-101
95. The government has enacted laws that promote both fair trade and competition by
prohibiting the formation of monopolies or alliances that would damage a competitive
marketplace, fostering fair pricing practices for all suppliers and consumers. These actions
are part of the ________ environment of business.
A. communication
B. political/regulatory
C. constitutional
D. social
E. technological
The political/regulatory environment comprises political parties, government

organizations, and legislation and laws.

Blooms: Understand
5-102
96. Which of the following specifically prohibits monopolies?
A. Sherman Antitrust Act

B. Federal Trade Act
C. Robinson-Patman Act
D. Financial Reform Law
E. Consumer Product Act
The 1890 Sherman Antitrust Act prohibited monopolies and other activities that would
restrain trade or competition and made fair trade within a free market a national goal.

Blooms: Remember
Difficulty: 1 Easy
97. What is most likely to happen when inflation increases?
A. Consumers buy more discretionary merchandise.

B. Consumers buy fewer personal care and home entertainment products.
C. Off-price and discount retailers suffer from lower sales.
D. Consumers buy lower-priced foods.
E. Consumers buy less food.
When inflation increases, consumers probably don't buy less food, but instead buy less
expensive food to make their dollar go further.

Blooms: Understand
5-103
98. ________ is the cost to the customers or the fee the bank charges those customers for
borrowing money.
A. Interest
B. A service charge
C. A tax
D. A tariff
E. A user fee
This is the definition of interest.

Blooms: Understand
99. The value of the euro has changed significantly since 2002 with the problems experienced
by several European economies. This change in value is called
A. interest destabilization.
B. inflation.
C. recession.
D. foreign currency fluctuations.
E. global financial impact.
This is the definition of foreign currency fluctuations.

Blooms: Understand
5-104
100. When Diana went to college, tuition was $650 per semester. Now that same college
charges $6,500 per semester. This number reflects a persistent increase in price known
as
A. currency fluctuation.
B. inflation.
C. recession.
D. interest.
E. deflation.
Inflation refers to the persistent increase in the prices of goods and services.

Blooms: Apply
Difficulty: 3 Hard
5-105
101. From a firm's perspective, the biggest advantage of RFID is
A. it enables the firm to track an item from the moment it was manufactured.
B. it tells the firm who is buying the product and how it is being used.
C. it provides demographic information on the consumer for marketing use.
D. it is less expensive to use than other forms of marketing research.
E. it eliminates the need for communicating with the supply chain.
RFID enables a firm to track an item from the moment it was manufactured, through the
distribution system, to the retail store, and into the hands of the final consumer. Because
they are able to determine exactly how much of each product is at a given point in the
supply chain, retailers can also communicate with their suppliers and collaboratively plan
to meet their inventory needs.
AACSB: Technology
Blooms: Understand
5-106
102. Which of the following is an example of greenwashing?
A. A company markets a product made from recycled glass bottles.

B. A company charges more for a hybrid car than for a similar gas model.
C. A company donates money to a school reading project so it can advertise itself as
environmentally friendly.
D. The Smiths installed energy-saving lightbulbs in their rental apartment buildings.
E. The corner Laundromat stocks only phosphate-free detergent in its vending machines.
Donating money to a school for a reading project is socially responsible, but not
necessarily environmentally friendly. This is greenwashing for public approval.

Blooms: Apply
Difficulty: 3 Hard
103. What percentage of U.S. adults now recycles their soda bottles and newspapers?
A. 10 percent
B. 20 percent
C. 50 percent
D. 75 percent
E. 90 percent
About half of U.S. adults recycle soda bottles and newspapers. European consumers are
even greener.

Blooms: Remember
Difficulty: 1 Easy
5-107
104. Which of the following is a social trend listed in the text?
A. thrift
B. health and wellness
C. environmental legislation
D. economic concerns
E. technological advances
Various social trends appear to be shaping consumer values in the United States and
around the world, including a greater emphasis on health and wellness concerns, greener
consumers, and privacy concerns.

Blooms: Remember
Difficulty: 1 Easy
5-108
105. Which ethnic group in the United States tends to earn more, have more schooling, and be
more likely to be professionally employed or own a business?
A. Northern European
B. Middle Eastern
C. Hispanic
D. Asian
E. African American
Asian Americans make up only about 5.6 percent of the U.S. population, but they also
represent the fastest-growing minority population, tend to earn more, have more
schooling, and are more likely to be professionally employed or own a business.

Blooms: Remember
Difficulty: 1 Easy
106. Which ethnic group tends to be not only more affluent and suburban than previously
thought, but also younger, with 47 percent between the ages of 18 and 49 years?
A. Caucasian
B. Pacific Islander
C. Hispanic
D. Asian
E. African American
This describes African Americans.

Blooms: Remember
Difficulty: 1 Easy
5-109
107. A generational cohort is a group of people
A. who share similar ethnic characteristics.

B. who grew up and went to school together.
C. with the same beliefs and values.
D. who are of the same generation.
E. who are not open to new things.
This is the definition of generational cohort.

Blooms: Remember
Difficulty: 1 Easy
Essay Questions
5-110
108. Discuss how privacy concerns have become a current social issue. What technological
invention has prompted the rise in concern over privacy?
The advent of the Internet has created an explosion of accessibility to consumer

information. Massive security breaches, like the one Target suffered in 2013, have more
and more consumers worldwide sensing a loss of privacy. Every time a consumer surfs the
web and clicks on a site, online marketers can place cookies on that user's computer,
showing them where he or she starts, proceeds, and ends the online encounter—as well
as what he or she buys, and doesn't. For many consumers, such close access to their
behaviors is an unacceptable invasion of privacy.

Blooms: Remember
Difficulty: 1 Easy
5-111
109. Imagine that you have just been made the marketing manager for your university. Your
first task is to assess your university's immediate environment. What questions will you
likely ask?
Answers will vary depending on the type of university, but should include discussion of the
following:
Consumers—Who are the university's current consumers? What are their demographic
profiles, or recent changes in composition?
Company (in this case, the university)—What is the university doing well, differently from
the past? What are its strengths and weaknesses?
Competition—Who are the competitors? What are their strengths and weaknesses?
Corporate partners—For a university, likely partners include alumni, the community, and
vendors, particularly technology vendors. What are they offering? How can they help the
university?

Blooms: Apply
Difficulty: 3 Hard
strategy.
5-112
110. Irvina is a general practice physician. Her office includes a number of nurses, clerical
assistants, and a physician's assistant. She runs a well-organized practice, but she
depends on a variety of corporate partners to create value for her patients. Who are likely
to be Irvina's corporate partners and how do they help or hinder her efforts to create
value?
Answers will vary, but will likely include discussion of the following:
* Vendors, including laboratory testing companies. Many physicians depend on quick,

accurate test results to meet the needs of their clients.
* Hospitals. As a general practice physician, Irvina probably regularly sends patients to
local hospitals and visits them there.
* Specialty physicians. Irvina probably sends her patients for consultations to a wide array
of specialists. She depends on them for expertise and timely service.

Blooms: Apply
Difficulty: 3 Hard
strategy.
111. International marketers new to the United States often struggle to define American
culture. What would these international marketers need to study in order to define the
term and what would they be likely to learn?
They would need to study shared meanings, beliefs, morals, values, and customs of
Americans. They would likely learn that there are many regional cultures in the United
States with differences based on history, ethnicity, and geographic area.

Blooms: Understand
5-113
many different cultures into the social fabric of the country. What challenges do marketers
face in assessing U.S. culture?
Many immigrants hold on to cultural values and practices from their home countries, but
also embrace American lifestyles and customs. A primary challenge is to determine
whether or not culture can be used as a relevant identifier for a particular target group.

Blooms: Understand
113. Baby Boomers represent a tremendous opportunity for today's marketers. Who are the
Baby Boomers? Based on their age, what might be some products that they would be
interested in?
Baby Boomers are the post-World War II generation born between 1946 and 1964. The
oldest Boomers are collecting Social Security and this generational cohort will be the
largest population of 50-plus consumers in the United States. Examples will vary, but
based on the age of Baby Boomers, they may likely be interested in beauty products that
prevent aging, products related to health care and insurance, travel related products, and
so on.

Blooms: Understand
5-114
114. "Income distribution in the United States has grown more polarized." What does this mean
in general, and what does it mean especially to marketers in the United States?
It means the rich are getting richer, while the purchasing power of lower- and middle-
income groups is declining. For marketers it has many meanings. Marketers targeting
affluent Americans know this group has considerable discretionary spending power. For
marketers to lower- and middle-income groups, value and price are becoming even more
important as their purchasing power languishes.

Blooms: Understand
115. At almost every major university, some group on campus pressures the university to
become "greener." What does this mean? What does it usually involve? Why would a
university want to become greener?
Becoming greener on a university campus means providing more environmentally friendly

goods and services. For a university, it would start with recycling but also might involve
green building design, mass transportation, and environmental education. The role of
universities is to educate people, including education about consumers' impact on the
environment.

Blooms: Apply
Difficulty: 3 Hard
5-115
116. How can marketers identify potential opportunities?
By paying close attention to customer needs and continuously monitoring the environment
in which it operates, a good marketer can identify potential opportunities.

Blooms: Remember
Difficulty: 1 Easy
strategy.
117. Gaetana is the new marketing director for a local theater. One of her major responsibilities
is to monitor and manage aspects of the theater's immediate environment. What will
Gaetana monitor and manage?
The three participants in consumers' immediate environment are the company,

competition, and corporate partners.

Blooms: Understand
strategy.
5-116
118. Marketers in the United States are learning that Hispanic and other minority groups are
not alike. How do cultural differences affect purchase decisions? What can be said about
the buying power of Hispanics?
Culture influences what, why, how, where, and when groups buy things. Hispanic buying
power is projected to reach $1.3 trillion in 2015, a cumulative increase of around 25
percent compared with 2010. The 50 million Hispanic consumers in the United States have
increasing influences on mainstream U.S. culture. Many Hispanic families have been in the
United States for multiple generations, and the consumer behavior of these highly
acculturated Hispanics differs little from that of other groups of Americans.

Blooms: Understand
119. In some parts of the United States a long sandwich is called a sub sandwich. In other
parts of the country it is called a grinder. This is an example of what type of
macroenvironmental factor?
This is an example of a regional cultural factor.

Blooms: Remember
Difficulty: 1 Easy
5-117
120. Mary Grace is studying the demographics of the students attending her elementary school.
What information will Mary Grace study?
She will likely look at gender, race, income, and ethnicity data.

Blooms: Understand
121. Which generational cohort members are characterized as being "Digital Natives," having
had access to the Internet their entire lives?
Generation Z

Blooms: Remember
Difficulty: 1 Easy
122. Two of the characteristics of this generational cohort that distinguishes them from Baby
Boomers are that they were the first generation to grow up with both parents working, and
that half of them have divorced parents. They are the first generation of latchkey children.
Which generational cohort has these characteristics?
Generation X

Blooms: Remember
Difficulty: 1 Easy
5-118
123. In recent decades, how has income distribution changed in the United States?
It has become more polarized, with an increased gap between upper-income and lower-
income groups.

Blooms: Remember
Difficulty: 1 Easy
124. Every year Pam reassesses the economic situation in the target markets her company
serves. What factors will Pam likely assess?
She will likely assess changes in inflation, exchange rates, and interest rates.

Blooms: Understand
125. An Uncle Ben's box of rice has a symbol stating that the packaging is made from 100
percent recycled material and encourages consumers to recycle. Identify the social trend
being addressed by Uncle Ben's.
Green marketing, which is a strategy by companies to supply customers with

environmentally friendly merchandise.

Blooms: Understand
5-119
126. As demographic factors, why are marketers interested in the education level, occupation,
and income of consumers?
Studies show that higher levels of education lead to better jobs and higher incomes. For
some products, marketers can combine education level with other data such as
occupation and income and obtain pretty accurate predictions of purchase behavior. For
instance, a full-time college student with a part-time job may have relatively little personal
income but will spend his or her disposable dollars differently than would a high school
graduate who works in a factory and earns a similar income. Marketers need to be quite
cognizant of the interaction among education, income, and occupation.

Blooms: Understand
5-120
127. Identify three tactics that a mid-priced motel chain might employ to take advantage of the
social trends discussed in the text, in hopes of increasing its business. For each tactic,
identify the social trend it is based on.
Answers will vary, depending on the trends the student picks to discuss; however, here are
some examples:
* Health and wellness: Add a fitness center, or expand it if one already exists. If free
breakfast is offered, make sure that healthy options are offered.
* Greener consumers: Implement a recycling program at the hotel, or expand the use of
products made from recycled materials.
* Privacy concerns: Having a secure website for customers to book rooms and not sharing
customers' personal information with other firms.

Blooms: Apply
Difficulty: 3 Hard
128. Why are generational cohorts important to marketers?
Applying age as a basis to identify consumers is quite useful to marketers. Most media are
characterized by the consumers that use it. Although there are similarities between the
groups, each cohort represents certain characteristics that influence how a product or
service is marketed to it.

Blooms: Understand
5-121
129. Explain how gender roles have changed, and how that has influenced marketing practices
in the United States.
As gender roles have become less distinct, firms are becoming more conscious of
practices that reflect gender neutrality in positioning products. Stereotypical appeals are
less common.

Blooms: Understand
130. Name the various social trends that impact marketing, and give one example that
demonstrates how each one influences marketing practices.
Answers will vary, but should include the following social trends: a greater emphasis on
health and wellness concerns, greener consumers, and privacy concerns.

Blooms: Apply
Difficulty: 3 Hard
5-122
131. Discuss the political and regulatory environment of business as it relates to the protection
of consumers. Name and describe at least two laws that had a major impact on fair
competition, consumer protection, or industry-specific regulation.
Students should discuss in general how the political/regulatory environment relates to the
marketing of products to consumers. Legislation has been enacted to protect consumers
in a variety of ways. First, regulations require marketers to abstain from false or
misleading advertising practices that might mislead consumers, such as claims that a
medication can cure a disease when in fact it causes other health risks. Second,
manufacturers are required to refrain from using any harmful or hazardous materials (e.g.,
lead in toys) that might place a consumer at risk. Third, organizations must adhere to fair
and reasonable business practices when they communicate with consumers. For example,
they must employ reasonable debt collection methods and disclose any finance charges,
and they are limited with regard to their telemarketing and e-mail solicitation activities.
Laws specifically mentioned might be the 1890 Sherman Antitrust Act, the 1936 Robinson-
Patman Act, or the 1914 Clayton Act.

Blooms: Understand
5-123
132. How do the economic factors of inflation, foreign currency fluctuations, and interest rates
affect firms' ability to market goods and services?
Shifts in the three economic factors make marketing easier for some and harder for
others. For instance, when inflation increases, consumers probably don't buy less food,
but they may shift their expenditures from expensive steaks to less expensive hamburgers.
Grocery stores and inexpensive restaurants win, but expensive restaurants lose.
Consumers also buy less discretionary merchandise, though off-price and discount
retailers often gain ground at the expense of their full-price competitors.
Similarly, the sales of expensive jewelry, fancy cars, and extravagant vacations decrease,
but the sale of low-cost luxuries, such as personal care products and home entertainment,
tends to increase.

Blooms: Understand
133. Name one technological advance that has impacted how consumers research and buy
products. Give an example from your own experience.
Answers will vary, but could discuss smartphones, tablet computers, mobile apps, and
Netflix, Pandora, or similar websites.

Blooms: Apply
Difficulty: 3 Hard
5-124
134. How is the balance of ethnicities in the U.S. population changing, and what implications
does this have for marketers?
Because of immigration and increasing birthrates among various ethnic and racial groups,
the United States continues to grow more diverse. Since different ethnic groups have
different cultural values and buying patterns, marketers must stay on top of this trend and
adjust their marketing accordingly.

Blooms: Understand
135. What is greenwashing and why do consumers need to be aware of it?
Greenwashing is exploiting a consumer by disingenuously marketing products or services

as environmentally friendly, with the goal of gaining public approval and sales rather than
actually improving the environment. Consumers need to question whether a firm is
spending significantly more money and time advertising being green and operating with
consideration for the environment than actually spending these resources on
environmentally sound practices.

Blooms: Understand
5-125

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Analyzing the Marketing Environment

True / False Questions

4. In the immediate environment, the competition has no effect on consumers.

6. Demographics are transmitted by words, literature, and institutions from generation to

7. Demographic profiles of customers provide an easily understood "snapshot" of the typical

9. Macroenvironmental factors include the company, competition, and corporate partners.

10. Members of Generation Y are also called Millennials.

12. The members of Generation X are also referred to as Digital Natives.

19. Inflation refers to the cost of borrowing money.

25. Applying age as a basis to identify customers is unethical, as it involves stereotyping.

A. avoid cognitive dissonance.

27. The centerpiece of the marketing environment analysis framework is

28. A firm's macroenvironment includes all of the following except

31. One of the goals of value-based marketing is

A. to provide the greatest value for the least profit.

A. in order to value each person in the organization.

A. The purchasing power of lower-income groups has been steadily rising.

A. are easiest to satisfy.

A. are easiest to satisfy.

A. likely reaction to his promotional activities.

53. Typical demographic data include all of the following except

59. The first "latchkey" children belong to which generational cohort?

A. will create inflationary expectations.

A. a sense of consumers' regional culture.

A. will earn less over their working lifetime.

67. Which of the following is true regarding modern gender roles?

A. Gender roles are a constant cultural norm.

A. They are more affluent and suburban.

A. they represent a majority of the population in nonurban areas of the country.

A. the fastest-growing minority population.

A. reduce, reuse, recycle.

73. By offering environmentally responsible products, green marketers

A. undercut prices of nonenvironmentally responsible marketers.

A. value contributing to a greener environment.

A. increase value to the consumer through media effectiveness promotion.

83. Which of these is a macroenvironmental factor?

A. offering an expanded menu of healthy options.

A. wireless payments from mobile devices.

89. The political/regulatory environment comprises political parties, governmental organizations,

A. legislation and laws.

91. Which generation's members are also known as Millennials?

A. calls for greater social responsibility.

96. Which of the following specifically prohibits monopolies?

A. Sherman Antitrust Act

A. Consumers buy more discretionary merchandise.

101.From a firm's perspective, the biggest advantage of RFID is

102.Which of the following is an example of greenwashing?

A. A company markets a product made from recycled glass bottles.

107.A generational cohort is a group of people

A. who share similar ethnic characteristics.

135.What is greenwashing and why do consumers need to be aware of it?

True / False Questions

Changes in the environment can be a source of opportunities for the firm.

AACSB: Analytical Thinking

AACSB: Analytical Thinking

AACSB: Analytical Thinking

4. In the immediate environment, the competition has no effect on consumers.

AACSB: Analytical Thinking

These are the three components of the immediate environment.

AACSB: Analytical Thinking