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Marketing: An Introduction, 12e (Armstrong/Kotler)

Chapter 3 Analyzing the Marketing Environment


1) Which of the following is part of the microenvironment of a firm's marketing environment?
A) the political state of the country in which the firm exists
B) the cultural forces that exist in a society
C) the suppliers who work with the company
D) the technological resources available to the company
E) the different demographic trends in the market
Answer: C
Difficulty: Moderate
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
2) Demographic, economic, natural, technological, political, and cultural forces form the
________ of an organization.
A) supply chain
B) macroenvironment
C) marketing intermediary network
D) internal environment
E) microenvironment
Answer: B
Difficulty: Easy
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
3) The responsibility for setting a company's mission, objectives, broad strategies, and policies
primarily lies with its ________.
A) finance department
B) research department
C) top management
D) marketing managers
E) human resource managers
Answer: C
Difficulty: Easy
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

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4) Which of the following is part of the microenvironment of a company's marketing


environment?
A) a just-in-time inventory system used by the company when making purchase decisions
B) a set of laws that require the company to scale down its telemarketing calls to customers
C) a changing demographic picture that requires the firm to make product adaptations
D) a new technology that would ensure significant cost-cutting if implemented in the firm
E) a set of environmental sustainability laws that significantly impact the company's production
processes
Answer: A
Difficulty: Moderate
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Analytic thinking
5) ________ provide the resources needed by a company to produce its goods and services.
A) Wholesalers
B) Suppliers
C) Physical distribution firms
D) Media firms
E) Retailers
Answer: B
Difficulty: Easy
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
6) ________ are distribution channel firms that help a company find customers or make sales to
them.
A) Resellers
B) Suppliers
C) Producers
D) Logistics firms
E) Credit companies
Answer: A
Difficulty: Easy
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

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7) Which of the following has the primary function of helping a company target and promote its
products to the right markets?
A) marketing services agencies
B) resale marketers
C) service providers
D) physical distribution firms
E) credit companies
Answer: A
Difficulty: Easy
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
8) A marketing intermediary would most likely help a firm by ________.
A) negotiating with labor unions regarding wages, hours, and benefits
B) providing technical expertise on the production and design of goods
C) competing directly with the firm in a certain product category
D) supplying the raw materials needed for manufacturing the firm's products
E) moving the firm's goods from production points to distribution centers
Answer: E
Difficulty: Moderate
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
9) Which of the following is most likely a financial public?
A) community organization
B) minority group
C) corporate attorney
D) stockholder
E) newspaper
Answer: D
Difficulty: Moderate
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

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10) Monfax Corporation insures manufacturers, distributors, and consumers against the loss or
damage of goods during transportation after a purchase or sale. In this case, Monfax is an
example of a ________.
A) wholesaler
B) retailer
C) financial intermediary
D) physical distribution firm
E) marketing service agency
Answer: C
Difficulty: Difficult
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
11) Which of the following is an example of a media public?
A) community organization
B) minority group
C) television station
D) banking institution
E) federal government
Answer: C
Difficulty: Moderate
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
12) Kelstone Developers is planning to build a new shopping mall that would require the partial
acquisition of a nearby public park. Walking Green, an environmental group, challenges the plan
citing environmental destruction. In response to the demands of Walking Green, Kelstone
Developers promises to build a huge park-like walkway around the mall. Walking Green is an
example of a(n) ________ in this scenario.
A) financial public
B) government public
C) citizen-action public
D) internal public
E) media public
Answer: C
Difficulty: Moderate
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Analytic thinking

4
Copyright 2015 Pearson Education, Inc.

13) Minority groups that question a company's marketing decisions most likely belong to
________ publics.
A) general
B) local
C) citizen-action
D) media
E) financial
Answer: C
Difficulty: Easy
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
14) The town of Genter recently witnessed a devastating hurricane that crippled the town's
infrastructure. Q-Mart, a retail chain that plans to open a new retail store in Genter, organizes a
program to help the people of Genter. The program consists of providing free meals to those who
lost their dwellings in the hurricane. What section of the marketing microenvironment is Q-Mart
most likely trying to reach?
A) suppliers
B) marketing intermediaries
C) local publics
D) competitors
E) employees
Answer: C
Difficulty: Moderate
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Analytic thinking
15) The citizen-action publics in a company's marketing environment include ________.
A) employees and managers of the company
B) stockholders and investment analysts
C) government trade agencies
D) environmental groups
E) news channels
Answer: D
Difficulty: Easy
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

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16) Which of the following is an example of a local public?


A) a community organization that addresses welfare issues in its neighborhood
B) a supplier responsible for sourcing most of the raw materials used in production
C) a company director who is working to improve the organization's public image
D) a bank that helps a company acquire loans
E) a federal regulatory agency that monitors business practices
Answer: A
Difficulty: Moderate
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
17) Which of the following are examples of internal publics of a company?
A) newspapers, magazines, television stations, blogs, and other Internet media
B) governmental departments and agencies that regulate businesses
C) neighborhood residents and community organizations
D) the managers, board of directors, and workers of the company
E) the general public that is directly affected by the company
Answer: D
Difficulty: Easy
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
18) According to the text, ________ are the most important actors in a company's
microenvironment.
A) stockholders
B) employees
C) suppliers
D) resellers
E) customers
Answer: E
Difficulty: Easy
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

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19) ________ markets consist of individuals and households that buy goods and services for
personal use.
A) Consumer
B) Business
C) Government
D) Wholesaler
E) Retailer
Answer: A
Difficulty: Easy
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
20) Which of the following is most likely categorized as a business market?
A) government agencies that buy goods and services to produce public services
B) individuals who buy goods and services for personal consumption
C) firms that buy goods and services for further processing
D) firms that buy goods and services to resell for profit
E) retail outlets that buy goods and services to sell at discounted prices
Answer: C
Difficulty: Moderate
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
21) Reseller markets consist of ________.
A) government agencies that buy goods and services to produce public services
B) individuals who buy goods and services for personal consumption
C) firms that buy goods and services to assemble overseas
D) firms that buy goods and services to sell at a profit
E) firms that buy goods and services for further processing
Answer: D
Difficulty: Moderate
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

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22) Dextora Technologies manufactures microprocessors and caters exclusively to private


manufacturers that produce high-end computers. Which type of market does Dextora directly
target?
A) retail market
B) government market
C) consumer market
D) business market
E) reseller market
Answer: D
Difficulty: Moderate
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Analytic thinking
23) JJ Distributors Ltd. buys electronic products from manufacturers for wholesale and sells
them to various retail outlets. To which of the following markets does JJ Distributors Ltd.
directly cater?
A) business markets
B) reseller markets
C) manufacturer markets
D) supplier markets
E) consumer markets
Answer: B
Difficulty: Moderate
Chapter LO: 1
Course LO: Discuss the fundamental concepts of marketing
AACSB: Analytic thinking
24) ________ is the study of human populations in terms of size, density, location, age, gender,
race, occupation, and other statistics.
A) Sociobiology
B) Demography
C) Behavioral ecology
D) Environmental studies
E) Political science
Answer: B
Difficulty: Easy
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

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25) Members of which of the following generational groups were born between 1946 and 1964?
A) Millennial
B) Generation X
C) Generation Z
D) baby boomer
E) Lost Generation
Answer: D
Difficulty: Easy
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
26) Which of the following is most likely a true statement about baby boomers?
A) They are the first generation to have grown up with computers.
B) They constitute the largest demographic group in the United States.
C) They were born between 1965 and 1976.
D) They are the most educated generation of Americans.
E) They are the wealthiest generation in U.S. history.
Answer: E
Difficulty: Moderate
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
27) To which of the following generational groups do zoomers belong?
A) Millennial
B) Generation X
C) Generation Z
D) Lost Generation
E) baby boomer
Answer: E
Difficulty: Easy
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

9
Copyright 2015 Pearson Education, Inc.

28) Which generational group controls the highest percentage of disposable income in the United
States?
A) baby boomer
B) Generation X
C) Millennial
D) Generation Z
E) Lost Generation
Answer: A
Difficulty: Moderate
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
29) Secure is a financial services and insurance company. The company's most profitable
division is one that sells the Secure Future Plan. The Secure Future Plan targets customers who
are entering retirement and want long-term savings so they can remain financially independent in
the later years of their life. The marketing team at Secure has most likely targeted the plan at
________.
A) Millennials
B) baby boomers
C) Generation Xers
D) Generation Zers
E) the Lost Generation
Answer: B
Difficulty: Difficult
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Analytic thinking
30) Which of the following is most likely a characteristic of Generation Xers?
A) They were the first group to grow up in the Internet era.
B) They comprise a considerably larger population than the baby boomers.
C) They prefer quantity over quality of products.
D) They are the least educated generation to date.
E) They are generally unreceptive to ad pitches that make fun of tradition.
Answer: A
Difficulty: Moderate
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

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31) Which generational group is most likely less materialistic when compared with other groups?
A) Generation Z
B) Generation X
C) baby boomer
D) Millennial
E) the Lost Generation
Answer: B
Difficulty: Moderate
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
32) Which of the following is most likely a characteristic of the Millennial generation?
A) They have very little knowledge of using digital media.
B) They are a smaller population than Generation X.
C) They are the wealthiest generation in the United States to date.
D) They like to engage in two-way brand conversations.
E) They typically avoid using technology while buying products.
Answer: D
Difficulty: Moderate
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
33) Which of the following is the most financially strapped generation in the post-recession era?
A) the Millennials
B) Generation X
C) Generation Z
D) the Lost Generation
E) the baby boomers
Answer: A
Difficulty: Easy
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
34) Members of which generational group are referred to as echo boomers?
A) the Lost Generation
B) Generation X
C) Generation Z
D) the baby boomers
E) Generation Y
Answer: E
Difficulty: Easy
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
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35) Which generational group consists of the kid, teen, and tween markets?
A) Generation Y
B) Millenial
C) Generation Z
D) Generation X
E) Lost Generation
Answer: C
Difficulty: Easy
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
36) Which generational group is most comfortable using digital technologies?
A) Millennial
B) Zoomer
C) Generation X
D) Generation Z
E) Lost Generation
Answer: D
Difficulty: Easy
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
37) Which of the following is most likely a true statement about generational groups in the
United States?
A) The Millennials account for nearly half of all discretionary consumer spending in the United
States.
B) The Generation Xers are the most educated generation to date.
C) The baby boomers comprise the poorest segment of the population.
D) The Generation Xers form the largest segment of the population.
E) The Millennials are the most financially secure generation.
Answer: B
Difficulty: Moderate
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

12
Copyright 2015 Pearson Education, Inc.

38) Which of the following is a geographic shift that has been observed in the United States in
recent times?
A) fewer Americans moving to Sunbelt states
B) fewer Americans moving to the South
C) more Americans moving to the Midwest
D) more Americans moving to densely populated cities
E) more Americans moving to micropolitan areas
Answer: E
Difficulty: Moderate
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
39) Which of the following has resulted from the increased educational levels of the U.S.
population?
A) lower acceptance of technological changes
B) greater job growth for professional workers
C) higher number of manufacturing jobs
D) lower mobility of the U.S. population
E) lower number of women in the workforce
Answer: B
Difficulty: Moderate
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
40) One of the demographic trends seen in the United States over the last few decades is the
decrease in the proportion of ________.
A) professional workers
B) manufacturing workers
C) white-collar workers
D) telecommuters
E) female employees
Answer: B
Difficulty: Easy
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

13
Copyright 2015 Pearson Education, Inc.

41) Which of the following factors would fall under the demographic environment for
marketers?
A) the growth rate of a company's competitors
B) the prices quoted by a company's suppliers
C) the profitability of a company's shareholders
D) the level of technological advancement in a company's production processes
E) the educational level of a company's customers
Answer: E
Difficulty: Easy
Chapter LO: 2
Course LO: Discuss the fundamental concepts of marketing
42) Which of the following is a demographic trend observed in the United States?
A) More people are working remotely.
B) Fewer women are entering the workforce.
C) Literary rates are dropping in the United States.
D) More people are migrating from the suburbs to the cities.
E) More people are shifting toward the manufacturing industry.
Answer: A
Difficulty: Moderate
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
43) Which of the following is most likely a true statement about diversity in the United States?
A) Most ethnic groups are shedding their ethnic culture and shifting toward a unified American
culture.
B) Asian Americans constitute the largest ethnic group in the United States.
C) Ethnic and cultural differences exist since different ethnic groups remain isolated from one
another.
D) Various ethnic groups mix together but also retain their cultural differences.
E) The nation's ethnic populations are set to decrease in coming decades.
Answer: D
Difficulty: Moderate
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Diverse and multicultural work environments

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44) Subsistence economies are best defined as economies that ________.


A) constitute rich markets for many different kinds of goods and services
B) consume most of their own agricultural output and offer few market opportunities
C) offer outstanding marketing opportunities for innovative technological products
D) offer huge marketing opportunities for industrial goods
E) export all their agricultural and industrial products
Answer: B
Difficulty: Moderate
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
45) Which of the following changes most likely forced marketers to shift to value marketing after
the Great Recession of 2008/2009?
A) a decrease in customer spending in all product categories
B) an increase in the prices of products
C) an increase in the purchasing power of consumers
D) a decrease in the emphasis placed by customers on product quality
E) an increase in the demand for luxury products
Answer: A
Difficulty: Moderate
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
46) Changes in variables, such as income, cost of living, interest rates, and savings and
borrowing patterns most likely reflect changes in the ________ environment of a company.
A) economic
B) natural
C) demographic
D) political
E) cultural
Answer: A
Difficulty: Moderate
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

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47) Fargo Inc. is a carbonated beverage manufacturer that has many manufacturing plants around
the world. It is planning to shift from using thermal power to wind power for its manufacturing
plants in the Netherlands to decrease dependency on nonrenewable sources of energy. This
scenario depicts Fargo's concern for its ________ environment.
A) economic
B) natural
C) demographic
D) political
E) cultural
Answer: B
Difficulty: Moderate
Chapter LO: 3
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Analytic thinking
48) Which of the following represents a change in the technological environment of a marketing
firm?
A) increased use of cause-related marketing
B) increased use of RFID systems to track products
C) increased need to comply with environmental regulations
D) increased use of value marketing techniques and promotions
E) increased need to engage in mass marketing over market segmentation
Answer: B
Difficulty: Moderate
Chapter LO: 3
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
49) Which of the following is most likely a true statement about the technological environment
of a firm?
A) Every new technology makes an older technology obsolete.
B) Product safety laws decrease the time taken to introduce new technologies to the market.
C) New technologies fail to create many new opportunities in the marketplace.
D) The technological environment of a firm remains constant over time.
E) New product regulations typically reduce a firm's research costs.
Answer: A
Difficulty: Moderate
Chapter LO: 3
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

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Copyright 2015 Pearson Education, Inc.

50) In a marketer's macroenvironment, the ________ environment consists of laws, government


agencies, and pressure groups that influence or limit various organizations and individuals in a
given society.
A) political
B) cultural
C) technological
D) natural
E) internal
Answer: A
Difficulty: Easy
Chapter LO: 4
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
51) Governments most likely enact business legislation to ________.
A) prevent unfair competition in the market
B) allow a single large monopoly in the market
C) prevent alternative products from entering the market
D) protect the interests of producers rather than society
E) dissociate social responsibility from commerce
Answer: A
Difficulty: Easy
Chapter LO: 4
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
52) Which of the following is most likely true about business legislation?
A) Business laws are enforced only in international markets and not in local markets.
B) Business laws fail to prevent unfair competition among the different companies in a market
and tend to encourage monopolies.
C) Business laws usually remain constant over time.
D) Local, national, and state business laws rarely overlap with one another.
E) Business laws that are enforced by government agencies have a major impact on a company's
marketing performance.
Answer: E
Difficulty: Moderate
Chapter LO: 4
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

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53) An ethical concern about companies that use online marketing techniques and involve
consumer information in the process is that these companies ________.
A) fail to provide value-priced products for online customers
B) track, share, and misuse browsing details of unknowing customers
C) provide too many alternative products online which confuse customers
D) rarely follow the marketing orientation when devising promotional offers online
E) fail to reach their target customers through online marketing
Answer: B
Difficulty: Moderate
Chapter LO: 4
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Information technology
54) Which of the following is an example of cause-related marketing?
A) a firm selling groceries without using retail outlets
B) a firm selling energy drinks and relying on social media
C) a firm selling low-cost health insurance through online sites
D) a firm selling hybrid and other low-emission automobiles
E) a firm selling electronics and giving a percentage of sales to charity
Answer: E
Difficulty: Moderate
Chapter LO: 4
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
55) Ursa Martin, a book publisher, has decided to work with Hope in Children, a charity
foundation that helps feed and educate children in poor countries. Ursa Martin has decided that a
percentage of revenue from every book it sells will go to the charity. The books are marketed by
conveying this message to customers. Which of the following marketing techniques describes
Ursa Martin's association with Hope in Children?
A) joint venture marketing
B) cause-related marketing
C) niche marketing
D) green marketing
E) test marketing
Answer: B
Difficulty: Moderate
Chapter LO: 4
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Analytic thinking

18
Copyright 2015 Pearson Education, Inc.

56) Which of the following is most likely true about people's beliefs and values?
A) Belief in marriage is a secondary belief for most Americans.
B) Secondary beliefs and values cannot be changed.
C) Marketers have a high chance of changing core beliefs and values.
D) Secondary beliefs are passed on from parents to children.
E) Core beliefs and values have a high degree of persistence.
Answer: E
Difficulty: Moderate
Chapter LO: 4
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
57) Which of the following is most likely a true statement about people's views about
organizations?
A) Many people view work at an organization as a required chore.
B) People don't expect organizations to carry out society's work.
C) Confidence in political organizations has increased in recent years.
D) Loyalty towards employers has increased in the past two decades.
E) Many people today see organizations as a source of personal satisfaction.
Answer: A
Difficulty: Moderate
Chapter LO: 4
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
58) Which of the following is most likely a characteristic of firms that adopt a reactive approach
toward the marketing environment?
A) They develop strategies to change the marketing environment.
B) They take advantage of the opportunities provided by the environment.
C) They take aggressive actions to affect the marketing environment.
D) They view the marketing environment as a controllable element.
E) They do not accept the marketing environment as it is.
Answer: B
Difficulty: Moderate
Chapter LO: 5
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

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Copyright 2015 Pearson Education, Inc.

59) Which of the following is most likely true about companies that take a proactive stance
toward the marketing environment?
A) They develop strategies to change the marketing environment.
B) They believe that marketing strategies are bound by the current environment.
C) They passively accept the marketing environment in its current state.
D) They view the marketing environment as an uncontrollable element.
E) They design strategies according to environmental forces in the market.
Answer: A
Difficulty: Moderate
Chapter LO: 5
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
60) Which of the following marketing actions would a proactive organization most likely take?
A) engaging in cause-related marketing activities
B) passively accepting the marketing environment
C) running advertorials to shape public opinion
D) carefully monitoring the regulatory environment
E) developing universally acceptable mission statements
Answer: C
Difficulty: Moderate
Chapter LO: 5
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
61) Customer markets are part of a manufacturer's microenvironment.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
62) Marketing intermediaries supply resources needed by a company to produce its goods and
services.
Answer: FALSE
Difficulty: Easy
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
63) Resellers are a part of the financial publics of an organization.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
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Copyright 2015 Pearson Education, Inc.

64) A customer buys a can of Pepsi from a Walmart store. In this scenario, Walmart is a supplier
in Pepsi's value delivery network.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
65) Advertising agencies that help a company target a certain section of customers are marketing
intermediaries.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
66) A bank that helps a company finance transactions is both a financial intermediary and a
financial public.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
67) The general public's image of a company affects organizational buying behavior.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
68) The single most important demographic trend in the United States is the changing age
structure of the population.
Answer: TRUE
Difficulty: Easy
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
69) Generation X is the poorest generation in U.S. history.
Answer: FALSE
Difficulty: Easy
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

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Copyright 2015 Pearson Education, Inc.

70) The Generation Zers completely disregard traditional media.


Answer: FALSE
Difficulty: Easy
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
71) The rapid increase in the number of people who telecommute has created a booming small
office/home office market in the United States.
Answer: TRUE
Difficulty: Easy
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
72) Many companies have started to target the LGBT market segment which has significant
buying power.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Diverse and multicultural work environments
73) The purchasing power of a population is part of the technological environment of a
company's macroenvironment.
Answer: FALSE
Difficulty: Easy
Chapter LO: 2
Course LO: Identify and discuss the factors influencing consumer buying behavior
74) Subsistence economies provide the best marketing opportunities to companies.
Answer: FALSE
Difficulty: Easy
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
75) In the context of income distribution, the middle class in the United States has grown in size
over the past several decades.
Answer: FALSE
Difficulty: Easy
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

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Copyright 2015 Pearson Education, Inc.

76) The income distribution in the United States is equal across all demographics.
Answer: FALSE
Difficulty: Easy
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
77) The Consumer Product Safety Commission has created complex regulations for testing new
drugs before they are sold to the public.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 3
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
78) Stringent product regulations have helped to lower research costs and decrease time between
new product ideas and their introduction to the market.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 3
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
79) The Federal Trade Commission enforces laws that prevent unfair competition in business.
Answer: TRUE
Difficulty: Easy
Chapter LO: 4
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
80) Government regulations are intended to protect consumers, companies, and societal interests.
Answer: TRUE
Difficulty: Easy
Chapter LO: 4
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
81) Cause-related marketing techniques are typically unprofitable for businesses, which is why it
is a rarely used form of corporate giving.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 4
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

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Copyright 2015 Pearson Education, Inc.

82) Marketers have a better chance of taking advantage of a person's secondary beliefs than his
or her core beliefs.
Answer: TRUE
Difficulty: Easy
Chapter LO: 4
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
83) Effective marketing managers take a reactive rather than a proactive approach to the
marketing environment.
Answer: FALSE
Difficulty: Easy
Chapter LO: 5
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
84) People's orientation to their society has no influence on their consumption patterns and
attitudes toward a marketplace.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 5
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
85) A company that adopts a reactive marketing stance would most likely view the marketing
environment as an uncontrollable element to which it must adapt.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 5
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

24
Copyright 2015 Pearson Education, Inc.

86) What are marketing intermediaries? What are the different types of marketing
intermediaries?
Answer: Marketing intermediaries help the company promote, sell, and distribute its products to
final buyers. They include resellers, physical distribution firms, marketing services agencies, and
financial intermediaries. Resellers are distribution channel firms that help the company find
customers or make sales to them. These include wholesalers and retailers that buy and resell
merchandise. Physical distribution firms help the company stock and move goods from their
points of origin to their destinations. Marketing services agencies are the marketing research
firms, advertising agencies, media firms, and marketing consulting firms that help the firm target
and promote its products to the right markets. Financial intermediaries include banks, credit
companies, insurance companies, and other businesses that help finance transactions or insure
against the risks associated with the buying and selling of goods.
Difficulty: Moderate
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
87) Markwin Electronics is a company that only sells products online. Orders are taken through
an interactive Web site, and goods are shipped out through a small warehouse the company
owns. Markwin employees also handle the shipment of goods to desired destinations. How could
marketing intermediaries help Markwin expand its business?
Answer: (Students' answers may vary. The answer given below is indicative.)
Marketing intermediaries help the company promote, sell, and distribute its products to final
buyers. Marketing intermediaries already have channels ready that are directly connected to
customers. Thus by utilizing intermediaries, Markwin can tap into a much bigger source of sales.
Intermediaries include resellers, physical distribution firms, marketing services agencies, and
financial intermediaries. These include wholesalers and retailers who buy and resell
merchandise. Physical distribution firms can help Markwin stock and move goods from their
points of origin to their destinations. Marketing services agencies are the marketing research
firms, advertising agencies, media firms, and marketing consulting firms that help the company
target and promote its products to the right markets. Financial intermediaries include banks,
credit companies, insurance companies, and other businesses that can help finance transactions
for Markwin, or insure against the risks associated with the buying and selling of goods.
Marketing intermediaries can form an important component of the company's overall value
delivery network. Markwin's marketers must recognize the importance of working with their
intermediaries as partners rather than simply as channels through which they sell their products.
Difficulty: Difficult
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Analytic thinking

25
Copyright 2015 Pearson Education, Inc.

88) How do the different types of publics influence a company's marketing environment?
Answer: A public is any group that has an actual or potential interest in or impact on an
organization's ability to achieve its objectives.
Financial publics: This group influences the company's ability to obtain funds. Banks, investment
analysts, and stockholders are the major financial publics.
Media publics: This group carries news, features, editorial opinions, and other content. It
includes newspapers, magazines, television stations, and blogs and other social media.
Government publics: Management must take government developments into account. Marketers
must often consult the company's lawyers on issues of product safety, truth in advertising, and
other matters.
Citizen-action publics: A company's marketing decisions may be questioned by consumer
organizations, environmental groups, minority groups, and others. Its public relations department
can help it stay in touch with consumer and citizen groups.
Local publics: This group includes neighborhood residents and community organizations. Large
companies usually create departments and programs that deal with local community issues and
provide community support.
General public: A company needs to be concerned about the general public's attitude toward its
products and activities. The public's image of the company affects its buying behavior.
Internal publics: This group includes workers, managers, volunteers, and the board of directors.
Difficulty: Moderate
Chapter LO: 1
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
89) Discuss how an increased educational level in the United States has affected the American
household and how marketers have responded to these changes.
Answer: (Students' answers may vary. The answer given below is indicative.)
The U.S. population is becoming better educated. The rising number of educated professionals
will affect not just what people buy but also how they buy. The number of working women has
also increased greatly, growing from under 40 percent of the U.S. workforce in the late 1950s to
58 percent today. Among households made up of married couples with children, 58 percent are
dual-income households; only the husband works in 28 percent. The significant number of
women in the workforce has spawned the child day-care business and increased the consumption
of career-oriented women's clothing, convenience foods, financial services, and time-saving
services.
Difficulty: Moderate
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment

26
Copyright 2015 Pearson Education, Inc.

90) How do companies use marketing techniques to respond to the changing diversity in the U.S.
population? Provide examples to illustrate your response.
Answer: (Students' answers may vary. The answer given below is indicative.)
The population of the United States seems to have become more of a "salad bowl," in which
various ethnic and cultural groups have mixed together but have maintained their diversity by
retaining and valuing important ethnic and cultural differences. Marketers now face increasingly
diverse markets, both at home and abroad, as their operations become more international in
scope. The U.S. population is about 64 percent white, with Hispanics at almost 17 percent and
African Americans at just over 13 percent. The U.S. Asian American population now totals more
than 5 percent of the total U.S. population. The nation's ethnic populations are expected to
explode in coming decades. Most large companies, from P&G, Walmart, Allstate, and Bank of
America to McDonald's and Levi Strauss, now target specially designed products, ads, and
promotions to one or more of these groups. For example, Procter & Gamble has long been the
leader in African American advertising, spending nearly 50 percent more than the second-place
spender in Hispanic media. P&G also tailors products to the specific needs of black consumers.
For instance, its CoverGirl Queen Collection is specially formulated "to celebrate the beauty of
women of color."
Difficulty: Difficult
Chapter LO: 2
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Analytic thinking
91) How has the Great Recession of 2008/2009 affected consumer spending in the United States?
Answer: Economic factors can have a dramatic effect on consumer spending and buying
behavior. For example, until fairly recently, American consumers spent freely, fueled by income
growth, a boom in the stock market, rapid increases in housing values, and other economic good
fortunes. They made purchases freely, seemingly without caution, amassing record levels of debt.
However, the free spending and high expectations of those days were dashed by the Great
Recession of 2008/2009. As a result, consumers have now adopted a back-to-basics sensibility in
their lifestyles and spending patterns that will likely persist for years to come. They are buying
less and looking for greater value in the things that they do buy. In turn, value marketing has
become the watchword for many marketers. Marketers in all industries are looking for ways to
offer today's more financially frugal buyers greater value with just the right combination of
product quality and good service at a fair price.
Difficulty: Difficult
Chapter LO: 2
Course LO: Identify and discuss the factors influencing consumer buying behavior

27
Copyright 2015 Pearson Education, Inc.

92) What is environmental sustainability? How does it affect the marketing environment?
Provide examples to illustrate your response.
Answer: Concern for the natural environment has spawned the so-called green movement.
Today, enlightened companies go beyond what government regulations dictate. They are
developing strategies and practices that support environmental sustainabilityan effort to create a
world economy that the planet can support indefinitely. Environmental sustainability means
meeting present needs without compromising the ability of future generations to meet their
needs. Many companies are responding to consumer demands with more environmentally
responsible products. Others are developing recyclable or biodegradable packaging, recycled
materials and components, better pollution controls, and more energy-efficient operations. For
example, Timberland's mission is about more than just making rugged, high-quality boots, shoes,
clothes, and other outdoor gear. The brand is about doing everything it can to reduce the
environmental footprint of its products and processes. More and more, these companies are
recognizing the link between a healthy ecology and a healthy economy. They are learning that
environmentally responsible actions also mean good business.
Difficulty: Moderate
Chapter LO: 3
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
93) Describe the major trends in the natural environment that marketers need to be aware of.
Answer: Marketers should be aware of several trends in the natural environment. The first
involves growing shortages of raw materials. Air and water may seem to be infinite resources,
but some groups see long-run dangers. Air pollution chokes many of the world's large cities, and
water shortages are already a big problem in some parts of the United States and the world.
Renewable resources, such as forests and food, also have to be used wisely. Nonrenewable
resources, such as oil, coal, and various minerals, pose a serious problem. Firms making products
that require these scarce resources face large cost increases, even if the materials remain
available. A second environmental trend is increased pollution. Industry will almost always
damage the quality of the natural environment. Consider the disposal of chemical and nuclear
wastes; the dangerous mercury levels in the ocean; the quantity of chemical pollutants in the soil
and food supply; and the littering of the environment with non-biodegradable bottles, plastics,
and other packaging materials. A third trend is increased government intervention in natural
resource management. The governments of different countries vary in their concern and efforts to
promote a clean environment. The general hope is that companies around the world will accept
more social responsibility and that less expensive devices can be found to control and reduce
pollution.
Difficulty: Difficult
Chapter LO: 3
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Analytic thinking

28
Copyright 2015 Pearson Education, Inc.

94) How are American businesses utilizing new technologies to improve their inventory
management? Provide examples to illustrate your response.
Answer: (Students' answers may vary. The answer given below is indicative.)
New technologies can offer exciting opportunities for marketers. The technological advancement
of radio-frequency identification (RFID) transmitters is rapidly changing the way companies
control their inventory. RFIDs can be embedded in the products you buy. Many firms are using
RFID technology to track products through various points in the distribution channel. For
example, Walmart has strongly encouraged suppliers shipping products to its distribution centers
to apply RFID tags to their pallets. So far, more than 600 Walmart suppliers are doing so. And
retailers such as American Apparel, Macy's, and Bloomingdales are now installing item-level
RFID systems in their stores. Fashion and accessories maker Burberry even uses chips imbedded
in items and linked to smartphones to provide personalized, interactive experiences for
customers in its stores and at runway shows.
Difficulty: Difficult
Chapter LO: 3
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Analytic thinking
95) Why is monitoring the technological environment crucial for marketing professionals?
Answer: (Students' answers may vary. The answer given below is indicative.)
The technological environment is perhaps the most dramatic force now shaping our destiny. The
technological environment changes rapidly. New technologies create new markets and
opportunities. However, every new technology replaces an older technology. Transistors hurt the
vacuum-tube industry, digital photography hurt the film business, and MP3 players and digital
downloads are hurting the CD business. When old industries fought or ignored new technologies,
their businesses declined. Thus, marketers should watch the technological environment closely.
Companies that do not keep up will soon find their products outdated. If that happens, they will
miss new product and market opportunities.
Difficulty: Moderate
Chapter LO: 3
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Analytic thinking

29
Copyright 2015 Pearson Education, Inc.

96) Discuss how the political environment affects the marketing environment.
Answer: Marketing decisions are strongly affected by developments in the political
environment. The political environment consists of laws, government agencies, and pressure
groups that influence or limit various organizations and individuals in a given society.
Governments develop public policy to guide commercesets of laws and regulations that limit
business for the good of society as a whole. Almost every marketing activity is subject to a wide
range of laws and regulations. Well-conceived regulation can encourage competition and ensure
fair markets for goods and services. In the United States, there are many laws created at the
national, state, and local levels, and these regulations often overlap. Moreover, regulations are
constantly changing; what was allowed last year may now be prohibited, and what was
prohibited may now be allowed. Marketers must work hard to keep up with changes in
regulations and their interpretations.
Difficulty: Moderate
Chapter LO: 4
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
97) Give an instance where a company exhibits social responsibility through business.
Answer: (Students' answers may vary. The answer given below is indicative.)
To exercise their social responsibility and build more positive images, many companies are now
linking themselves to worthwhile causes. Cause-related marketing has become a primary form of
corporate giving. It lets companies "do well by doing good" by linking purchases of the
company's products or services with benefiting worthwhile causes or charitable organizations.
For example, the P&G Tide Loads of Hope program provides mobile laundromats and loads of
clean laundry to families in disaster-stricken areasP&G washes, dries, and folds clothes for
these families for free. Down the street, needy people will probably find the P&G Duracell
Power Relief Trailer, which provides free batteries and flashlights as well as charging stations for
phones and laptops.
Difficulty: Difficult
Chapter LO: 4
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Analytic thinking

30
Copyright 2015 Pearson Education, Inc.

98) Discuss the social and ethical concerns that the boom in digital technology has created for
marketers.
Answer: (Students' answers may vary. The answer given below is indicative.)
The boom in Internet marketing has created a new set of social and ethical issues. Critics worry
most about online privacy issues. There has been an explosion in the amount of personal digital
data available. Users, themselves, supply some of it. They voluntarily place highly private
information on social networking sites, such as Facebook or LinkedIn, or on genealogy sites that
are easily searched by anyone with a computer or a smartphone. However, much of the
information is systematically developed by businesses seeking to learn more about their
customers, often without consumers realizing that they are under the microscope. Legitimate
businesses track consumers' Internet browsing and buying behavior and collect, analyze, and
share digital data from every move consumers make at their online sites. Critics worry that these
companies may now know too much and might use digital data to take unfair advantage of
consumers. Although most companies fully disclose their Internet privacy policies and most try
to use data to benefit their customers, abuses do occur.
Difficulty: Moderate
Chapter LO: 4
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Analytic thinking
99) Discuss with an example how marketers have adapted to people's changing views toward
nature.
Answer: (Students' answers may vary. The answer given below is indicative.)
People vary in their attitudes toward the natural world. Recently, however, people have
recognized that nature is finite and fragile; it can be destroyed or spoiled by human activities.
This renewed love of things natural has created a 41-million-person "lifestyles of health and
sustainability" (LOHAS) market, consumers who seek out everything from natural, organic, and
nutritional products to fuel-efficient cars and alternative medicine. For example, Tom's of Maine
caters to such consumers with sustainable, all-natural personal care productstoothpaste,
deodorant, mouthwash, and soapmade with no artificial colors, flavors, fragrances, or
preservatives. The products are also "cruelty-free" (no animal testing or animal ingredients).
Tom's makes sustainable practices a priority in every aspect of its business and strives to
maximize the recycled content and recyclability of its packaging. Finally, Tom's donates 10
percent of its pretax profits to charitable organizations.
Difficulty: Difficult
Chapter LO: 4
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Analytic thinking

31
Copyright 2015 Pearson Education, Inc.

100) Draw a comparison between the reactive and proactive approaches a company can take
toward a changing marketing environment.
Answer: Many companies view the marketing environment as an uncontrollable element to
which they must react and adapt. They passively accept the marketing environment and do not
try to change it. They analyze environmental forces and design strategies that will help the
company avoid the threats and take advantage of the opportunities the environment provides.
This is a reactive approach. Other companies take a proactive stance toward the marketing
environment. Instead of letting the environment define their strategy, they craft a strategy that
defines the environment. Rather than assuming that strategic options are bounded by the current
environment, these firms develop strategies to change the environment. Proactive firms take
aggressive actions to affect the publics and forces in their marketing environment. Such
companies hire lobbyists to influence legislation affecting their industries and stage media events
to gain favorable press coverage. They run advertorials (ads expressing editorial points of view)
and blogs to shape public opinion. They press lawsuits and file complaints with regulators to
keep competitors in line, and they form contractual agreements to better control their distribution
channels.
Difficulty: Moderate
Chapter LO: 5
Course LO: Identify factors that influence a company's microenvironment and
macroenvironment
AACSB: Analytic thinking

32
Copyright 2015 Pearson Education, Inc.