Flashcards and Answers – Marketing Chapters 1-4 (combined)
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*Q: Marketing expertise is gained:* a. Only through very careful study of relevant marketing success stories. b. By even the average person, who has a great deal of shopping experience. c. Typically through a comprehensive study of product failures. d. Only by large firms with many years of experience; it is practically impossible for entrepreneurial startup companies to achieve it. e. Most often by mentoring from experienced marketing professionals.
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b. By even the average person, who has a great deal of shopping experience. EXPLANATION: You are already a marketing expert; you perform many marketing activities and make marketing-related decisions every day. Your experience in shopping gives you some expertise in marketing. As a consumer, you've been involved in thousands of marketing decisions, but mostly on the buying and not the selling side.
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*Q: In terms of marketing, which of the following statements about small business is most accurate?* a. Almost all small businesses consider marketing a luxury rather than a necessity. b. Small businesses are the source of the majority of new jobs in the United States. c. More than half of small businesses fail because they must answer to shareholders. d. Marketing in small businesses rarely succeeds because the economic environment is too unstable. e. Small businesses traditionally hire only those market managers who have already proven themselves at a major corporation.
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b. Small businesses are the source of the majority of new jobs in the United States. EXPLANATION: Marketing takes place not only in large corporations but also in small. Since small businesses provide the majority of new jobs in the United States, there should be opportunities for marketers to help them succeed.
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*Q: The goal of marketing is to both ______ the needs of prospective customers.* a. create and amplify b. discover and satisfy c. improve and perfect d. persuade and deliver e. establish and assure
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b. discover and satisfy EXPLANATION: To serve both buyers and sellers, marketing seeks (1) to discover the needs and wants of prospective customers and (2) to satisfy them.
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*Q: From a marketing perspective, prospective customers include:* a. only those persons desiring the product, regardless of whether they plan to purchase it or not. b. individuals or organizations making purchases either for themselves or others, regardless of whether it is for personal use or for resale. c. people who will likely make repeated purchases of this product or similar items in the product line. d. people who do not even know about this product but who can be convinced that they have a need for it. e. people who purchased the product once before but were dissatisfied with its initial performance.
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b. individuals or organizations making purchases either for themselves or others, regardless of whether it is for personal use or for resale. EXPLANATION: Prospective customers include both individuals, buying for themselves and their households and organizations that buy for their own use (manufacturers) or for the resale (wholesalers and retailers).
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*Q: Beth's sorority volunteers to paint over graffiti on downtown fences. She spent last Saturday helping out, and felt satisfied because she was contributing to her community. Was this an exchange?* a. Yes, because the sorority promotes itself as being charitable. b. Yes, because painting the fences was exchanged for something of valueâa feeling of satisfaction. c. No, because the sorority is a nonprofit organization. d. No, because no money was exchanged. e. No, because Beth did not receive a tangible product, such as a "thank you" gift.
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b. Yes, because painting the fences was exchanged for something of valueâa feeling of satisfaction. EXPLANATION: Marketers seek to discover and satisfy the needs and wants of customers. The key to achieving these objectives is exchangeâthe trade of things of value between buyer and seller so that each benefits from the exchange. An exchange did occur: Beth exchanges her painting for a feeling of satisfaction; the community reduces blight.
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*Q: A friend gave you the name of a company, Batteries Plus, where you could inexpensively purchase a new power cord for your laptop. However, when you called, no one answered the phone even though you called during business hours. Marketing did not occur because:* a. you probably did not have a true need for the power cord. b. the products sold at the store were too expensive for you to afford. c. the company has poor customer service. d. there was no way for the parties to communicate. e. there is a lot of competition in the computer power cord segment.
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d. there was no way for the parties to communicate. EXPLANATION: Four factors are required for marketing to occur: (1) two or more parties (individuals or organizations) with unsatisfied needs, (2) a desire and ability on their part to be satisfied, (3) a way for the parties to communicate, and (4) something to exchange.
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*Q: If you feel hungry, marketers would say you have developed a(n) __________ to eat something.* a. feeling b. need c. obsession d. craving e. desire
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b. need EXPLANATION: If you feel hungry, you have developed a basic need to eat something. You then want to eat an apple or a candy bar because, based on your past experience and personality, you know these will satisfy your hunger need.
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*Q: What are people with the desire and ability to buy a specific offering referred to as?* a. Market b. Bazaar c. Customer pool d. Customer cluster e. Buying group
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a. Market EXPLANATION: Key term definitionâmarket.
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*Q: Sound and Cinema is a company that will turn an ordinary basement into a home theater. It advertises in publications that are mailed to homeowners in subdivisions where the least expensive home costs $550,000. These homeowners are the __________ for Sound and Cinema.* a. mass market b. tangental market c. market aggregation d. target market e. product grouping
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d. target market EXPLANATION: A target market is a specific group of potential consumers toward which an organization directs its marketing program, in this case the homeowners.
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*Q: The "4 Ps" of the marketing mix include product, price, place, and:* a. people b. profit c. process d. promotion e. physical environment
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d. promotion EXPLANATION: Key term definitionâmarketing mix. Three of the alternatives (people, process, and physical environment) comprise the seven Ps of services marketing.
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*Q: Netflix can deliver movies to its customers via streaming video over the Internet or via mail. These two methods would constitute which element of the marketing mix for Netflix?* a. place b. profit c. process d. promotion e. physical environment
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a. place EXPLANATION: Within the marketing mix, place is defined as a means of getting the product to the consumer.
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*Q: Walmart's __________ can be described as "everyday low prices for a broad range of products that are always in stock in convenient locations."* a. form utility b. possession utility c. time utility d. customer value proposition e. intangible environment
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d. customer value proposition EXPLANATION: Designing an effective marketing mix also conveys to potential buyers a clear customer value proposition, which is a cluster of benefits that an organization promises customers to satisfy their needs. For example, Walmart's customer value proposition can be described as "everyday low prices for a broad range of products that are always in stock in convenient locations."
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*Q: The uncontrollable forces in a marketing decision involving social, economic, technological, competitive, and regulatory forces are referred to as:* a. the four Ps b. the marketing mix c. marketer factors d. environmental forces e. utilities
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d. environmental forces EXPLANATION: Key term definitionâenvironmental forces. The uncontrollable environmental forces in a marketing decision are those involving social, economic, technological, competitive, and regulatory forces.
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*Q: The concept of __________ links the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefits.* a. a marketing program b. market segmentation c. stakeholder value d. relationship marketing e. strategic partnership
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d. relationship marketing EXPLANATION: Key term definitionârelationship marketing.
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*Q: After discovering consumers' needs, marketing's next task is to:* a. create a target market mission statement. b. determine if there are pre-existing products that satisfy these needs. c. translate information about consumer needs into product concepts. d. design product prototypes at multiple price points. e. develop a customer value strategy to create long-term customer loyalty.
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c. translate information about consumer needs into product concepts. EXPLANATION: A marketing program is defined as a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers. Consumer needs trigger product concepts that are translated into actual products that stimulate further discovery of consumer needs.
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*Q: Which of the following statements is the primary reason that explains why U.S. businesses moved from the production era to the sales era?* a. The population was moving away from urban to rural areas. b. There were too many customers to serve. c. Competition grew and the production of goods increased. d. Advertising was becoming a major marketing force. e. Technology was in a dormant stage.
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c. Competition grew and the production of goods increased. EXPLANATION: During the production era, firms could sell as many products as they could manufacture. However, during the sales era, many firms discovered that they could produce more goods than their regular buyers could consume. Competition grew. The usual solution was to hire more salespeople to find new buyers.
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*Q: The marketing concept is the idea that an organization should strive to satisfy the needs of consumers:* a. while also trying to achieve the organization's goals. b. as its sole focus. c. while simultaneously creating new needs. d. through strong customer relationships. e. without any market segmentation.
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a. while also trying to achieve the organization's goals. EXPLANATION: Key term definitionâmarketing concept.
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*Q: The process of identifying prospective buyers, understanding them intimately, and developing favorable long-term perceptions of the organization and its offerings so that buyers will choose them in the marketplace is referred to as:* a. customer experience management. b. the societal marketing concept. c. customer relationship management. d. the marketing concept. e. consumer sustainability marketing.
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c. customer relationship management. EXPLANATION: Key term definitionâcustomer relationship management (CRM).
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*Q: The primary difference between a good and a service, both of which are products to the marketer, is that a good is __________ and a service is __________.* a. exchanged; is performed free of charge. b. valued by the consumer; valued only by organizational buyers. c. a direct form of customer value; a customer value proposition. d. part of the regulatory environment; free from regulation. e. a physical object; intangible.
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e. a physical object; intangible EXPLANATION: Goods, services, and ideas are marketed. Goods are physical objects, such as toothpaste, cameras, or computers, that satisfy consumer needs. Services are intangible items such as airline trips, financial advice, or art museums.
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*Q: Which of the following statements is an example of place utility?* a. An iPhone with a large selection of new apps. b. ATM machines in thousands of locations. c. A service station that sells both regular gasoline and diesel fuel. d. A wireless smartphone company offers six-month financing, same as cash. e. Cold cut packages that can be zipped closed for reuse.
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b. ATM machines in thousands of locations EXPLANATION: Place utility is the value to consumers of having a good or service available where needed. ATM machines offer place utility by being available in many convenient locations.
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*Q: A(n) __________ may have operational efficiency or client satisfaction as its primary organizational goal, but it still must receive sufficient funds to cover its operating expenses.* a. industry b. nonprofit organization c. board of directors d. offering e. business firm
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b. nonprofit organization EXPLANATION: A nonprofit organization is a nongovernmental organization that serves its customers but does not have profit as an organizational goal. Instead, its goals may be operational efficiency or client satisfaction. Regardless, it also must receive sufficient funds above its expenses to continue operations.
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*Q: In less complex organizations that have a single business focus, such as Ben & Jerry's, which two strategic levels may merge?* a. Business and nonprofit b. Corporate and strategic business unit c. Functional and corporate d. Functional and industry e. Business and corporate
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b. Corporate and strategic business unit EXPLANATION: For less complex firms with a single business focus, such as Ben & Jerry's, the corporate and business unit levels may merge.
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*Q: The marketing department is part of which strategic level in an organization?* a. Board of directors b. Corporate level c. Strategic business unit level d. Functional level e. Specialized level
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d. Functional level EXPLANATION: Each strategic business unit has a functional level, where groups of specialists actually create value for the organization. The term department generally refers to these specialized functions such as marketing and finance. See Figure 2-1 in the textbook.
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*Q: A visionary organization first examines its organizational foundation and its organizational direction to determine its organizational:* a. missions. b. goals. c. functions. d. strategies. e. environment.
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d. strategies. EXPLANATION: A visionary organization must specify its foundation (why does it exist?), set a direction (what will it do?), and formulate strategies (how will it do it?). See Figure 2-2 in the textbook.
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*Q: Southwest Airlines' __________ is to be dedicated "to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit."* a. core value b. mission c. organizational culture d. competency e. competitive advantage
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b. mission EXPLANATION: A mission is a statement of the organization's function in society that often identifies its customers, markets, products, and technologies. Often used interchangeably with vision, a mission statement should be clear, concise, meaningful, inspirational, and long-term, such as the mission statement for Southwest Airlines.
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*Q: American railroads may have defined their __________ too narrowly, by concerning themselves only with rail service rather than including other transportation modes.* a. goals b. culture c. business d. marketing metrics e. market penetration
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c. business EXPLANATION: A business describes the clear, broad, underlying industry or market sector of an organization's offering. To help define its business, an organization looks at the set of organizations that sell similar offerings, those that are in direct competition with each other. Professor Theodore Levitt saw that 20th century American railroads defined their business too narrowly, proclaiming, "We are in the railroad business!" This myopic focus caused them to lose sight of who their customers were and what they needed. So railroads failed to develop strategies to compete with airlines, barges, pipelines, and trucks.
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*Q: For profit organizations pursue several different types of goals such as profit, sales, market share, quality, customer satisfaction, employee welfare, and social responsibility. Which of these statements is most accurate?* a. Customer satisfaction goals are known to increase costs and reduce profits. b. Selecting a market share goal is only meaningful if you first make profit a goal. c. A business firm should select only one business goal so it can maintain focus. d. Only nonprofit organizations have the luxury of selecting social responsibility and employee welfare as goals. e. If profits are acceptable, a company may elect to maintain or increase its sales even though profits may not be maximized.
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e. If profits are acceptable, a company may elect to maintain or increase its sales even though profits may not be maximized. EXPLANATION: For profit organizations can pursue several different types of goals: profit, sales, market share, quality, customer satisfaction, employee welfare, and social responsibility. When choosing a sales goal, if profits are acceptable, a firm may elect to maintain or increase its sales even though profits may not be maximized.
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*Q: The outdoor brand The North Face intends to capture some of its competitors' business in Europe in the next few years, even amid the current debt crisis there. The firm cites the active lifestyles there and the relatively low cost of entry for its backpacking and hiking sports gear, which attracts those planning a low-budget "staycation." The North Face most likely has a __________ goal.* a. profit responsibility b. unit sales c. sales revenue d. market share e. social responsibility
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d. market share EXPLANATION: Market share is the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself. The North Face plans to increase its own market share at the expense of its competitors in Europe.
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*Q: The __________ phase of the strategic marketing process usually results in a __________ that sets the direction for the marketing activities of an organization.* a. implementation; target market b.planning; competitor analysis c.evaluation; financial statement d. planning; marketing plan e. evaluation; annual report
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d. planning; marketing plan EXPLANATION: A marketing plan is a road map for the marketing activities of an organization for a specified future time period, such as one year or five years. The planning phase of the strategic marketing process (discussed later in this chapter) usually results in a marketing plan that sets the direction for the marketing activities of an organization.
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*Q: The choice of which __________ to display on a marketing dashboard is critical for a busy marketing manager, who can be overwhelmed with irrelevant data.* a. human resource reports b. marketing metrics c. financial statements d. qualitative opinions e. points of difference
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b. marketing metrics EXPLANATION: Each display in a marketing dashboard shows a marketing metric, which is a measure of the quantitative value or trend of a marketing activity or result. The choice of which marketing metrics to display is critical for a busy marketing manager, who can be overwhelmed with irrelevant data.
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*Q: What is a unique strength relative to competitors, often based on quality, time, cost, or innovation referred to as?* a. Point of distinction b.Product differentiation c. Competitive advantage d. Sustainable advantage e. Competitive competency
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c. Competitive advantage EXPLANATION: Text term definitionâcompetitive advantage.
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*Q: In BCG's business portfolio analysis, __________ generate more revenue than they can use, allowing an organization to cover its overhead and invest in other SBUs.* a. cash cows b. stars c. hedgehogs d. lions e. rabbits
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a. cash cows EXPLANATION: Text term definitionâcash cows.
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*Q: In diversification analysis, product development refers to the marketing strategy of:* a. selling new products to current markets. b. selling current products to new markets. c. increasing sales of current product in current markets. d. acquiring other companies to develop new products. e. developing new products and selling them in new markets.
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a. selling new products to current markets. EXPLANATION: Text term definitionâproduct development. See Figure 2-5 in the textbook.
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*Q: The last phase of the strategic marketing process is known as:* a. implementation. b. financial analysis. c. the marketing program. d. evaluation. e. functional-level strategy.
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d. evaluation. EXPLANATION: The strategic marketing process is comprised of three phases: planning, implementation, and evaluation. See Figure 2-6 in the textbook.
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*Q: Brick-and-mortar retailers are noticing a change in how many consumers shop. Sometimes they visit a store and scan an item on their smartphones, only to find the same product at a less expensive online retailer like Amazon.com. This turns the store into nothing more than a showroom for products. A SWOT analysis of Best Buy's marketing environment should consider this change in consumer shopping behavior a(n) __________.* a. strength b. weakness c. threat d. opportunity e. trend not to be concerned with for it will soon pass
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c. threat EXPLANATION: A threat is an external factor that is negative. This is a negative change in shopping behavior that is causing problems for retailers like Best Buy.
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*Q: The market-product focus and goal setting part of the planning phase of the strategic marketing process includes which of the following?* a. Developing a mission statement b. Testing the product c. Testing the market d. Selecting target markets e. Evaluating the marketing program
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d. Selecting target markets EXPLANATION: Determining which products will be directed toward which customers (step 2 of the planning phase) is essential for developing an effective marketing program (step 3). The following marketing activities are performed during step 2: (1) segment the market, (2) set marketing and product goals, (3) select target markets, (4) find points of difference, and (5) position the product. So step 2 in the planning phase of the strategic marketing processâdeciding which products will be directed toward which customersâis the foundation for step 3: developing the marketing program. See Figure 2-6 in the textbook.
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*Q: The marketing program includes developing the marketing mix and:* a. core competencies. b. organizational culture. c. evaluation criteria. d. alternate target market. e. its budget.
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e. its budget. EXPLANATION: Step 3 in the planning phase, the marketing program, involves developing the program's marketing mix (the four Ps) and its budget.
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*Q: Oprah.com recently launched Oprah's Book Club 2.0, hoping to get back to the amazing success of her previous book club. While the ideas for the plan may have been sound, new users complain that the feel of the experience online is certainly not Web 2.0, which requires a highly dynamic environment, often involving crowdsourcing, or user-generated content. Instead, Oprah remains the central, controlling figure of the club. Most likely, a problem occurred during:* a. the goal-setting phase. b. the evaluation phase. c. the implementation phase. d. the strategic development phase. e. the planning phase.
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c. the implementation phase EXPLANATION: The best-planned marketing strategy is virtually worthless if the plan cannot be successfully implemented and executed. Successful implementation requires the effective execution of the marketing strategies and tactics that comprise the marketing program for an offering. This plan appears to have been poorly implemented as far as the web interface with modern users, which is the important marketing tactic here.
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*Q: Writing ads and setting prices are examples of which of the following?* a. Marketing plans b. Marketing tactics c. Business plans d. Marketing strategy e. Objectives
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b. Marketing tactics EXPLANATION: To implement a marketing program successfully, hundreds of detailed decisions are often required. These decisions, called marketing tactics, are detailed day-to-day operational decisions essential to the overall success of marketing strategies. Writing ads and setting prices for new product lines are examples of marketing tactics.
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*Q: Comparing the results of the marketing program with the goals in the written plans to identify and act on deviations occurs during the:* a. implementation phase. b. planning phase. c. analysis phase. d. evaluation phase. e. goal-setting phase.
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d. evaluation phase EXPLANATION: The evaluation phase of the strategic marketing process seeks to keep the marketing program moving in the direction set for it (see Figure 2-6 in the textbook). Accomplishing this requires the marketing manager to (1) compare the results of the marketing program with the goals in the written plans to identify deviations and (2) act on these deviationsâcorrecting negative deviations and exploiting positive ones.
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*Q: What is the process of continually acquiring information on events occurring outside the organization, to identify and interpret potential trends called?* a. Trend analysis b. Organizational scanning c. Environmental scanning d. A SWOT analysis e. Threat assessment
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c. Environmental scanning EXPLANATION: Key term definitionâenvironmental scanning.
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*Q: The rising price of oil has increased the costs of transportation and thus the cost to deliver most manufactured goods. This is an example of which environmental force?* a. Social b. Regulatory c. Technological d. Competitive e. Economic
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e. Economic EXPLANATION: Economic forces like rising input costs are generally considered to be one of the uncontrollable or environmental forces that include social, technological, economic, competitive, and regulatory forces.
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*Q: Baby boomers can be described as the generation of children born:* a. before the Great Depression. b. before Generation X. c. after millennials. d. after Generation Y. e. very recently, within the last 10 years.
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b. before Generation X. EXPLANATION: Baby boomers' were born between 1946 and 1964, before Generation X, Generation Y, and millennials.
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*Q: Generation X can be defined as the generation of children born:* a. after World War I and before 1946. b. between 1946 and 1990. c. between 1977 and 1994. d. between 1946 and 1964. e. between 1965 and 1976.
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e. between 1965 and 1976. EXPLANATION: Key term definitionâGeneration X.
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*Q: Members of Generation Y are most likely to influence the marketing mix decisions regarding which of these products?* a. Tablet devices b. Long-term care insurance c. Mutual fund investments d. International cruise vacations e. Luxury automobiles
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a. Tablet devices EXPLANATION: Generation Y includes those born between 1977 and 1994. Generation Y exerts influence on music, sports, computers, video games, and all forms of communicationâand likely tablet devices like the iPad.
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*Q: A __________ is one formed by merging two previously separated units into a single household.* a. multicultural household b. blended family c. co-mingled household d. bundled family e. multigenerational household
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b. blended family EXPLANATION: Key term definitionâblended family.
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*Q: A micropolitan statistical area contains a population of:* a. at least 10,000. b. at least 50,000. c. at least 1,000,000. d. at least 2.5 million. e. at least 10 million.
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a. at least 10,000. EXPLANATION: Text term definitionâmicropolitan statistical area.
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*Q: In the past several decades, attitudes of both men and women have changed. Today, __________ represents the first generational cohort of women who have no collective memory of the dramatic changes that have taken place.* a. Generation Z b. baby busters c. Generation Y d. baby boomers e. Generation X
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c. Generation Y EXPLANATION: Several factors have contributed to the shift in cultural attitudes and roles among men and women since the 1970s and 1980s. Today, Generation Y represents the first generational cohort of women who have not collective memory of the dramatic changes that have taken place.
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*Q: Current cultural values commonly held in the United States are:* a. the belief in fate, focus on the future, and acceptance of birthright. b. personal control, continuous change, and competition. c. the need for stability, importance of tradition, and a focus on family. d. efficiency, material comfort, and a focus on group welfare. e. achievement, external control, and a focus on the present.
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b. personal control, continuous change, and competition. EXPLANATION: Culture includes values that may differ over time and between countries. Today, commonly held values include personal control, continuous change, equality, individualism, self-help, competition, future orientation, and action, which are useful in understanding the behaviors of U.S. consumers.
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*Q: What is the concern for obtaining the best quality, features, and performance of a product or service for a given price referred to as?* a. customer value b. the value proposition c. buyer-centric excellence d. purchasing value e. value consciousness
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e. value consciousness EXPLANATION: Key term definitionâvalue consciousness.
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*Q: Periods of declining economic activity during which time business production decreases, unemployment rises, and many consumers have less money to spend are known as:* a. recessions. b. inflationary periods. c. competitive cycles. d. discretionary patterns. e. stagnation.
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a. recessions. EXPLANATION: Periods of declining economic activity are referred to as recessions. During recessions, businesses decrease production, unemployment rises, and many consumers have less money to spend.
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*Q: When you begin your first full-time job, you have a monthly income of $3,500. Your federal and state taxes are $1,000. You pay $600 in rent, have a $300 car payment, and spend $300 on food and $200 on clothes. The remaining $1,100 would be considered your:* a. net income. b. disposable income. c. discretionary income. d. gross income. e. earned income after taxes.
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c. discretionary income EXPLANATION: Discretionary income is the money that remains after paying for taxes and necessities and is used for "luxury" expenses such as vacations or other non-necessities.
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*Q: Innovations are allowing consumers to utilize gesture, touch, and voice to control computers and other devices. This is an example of a(n) __________ force that could impact many industries.* a. Technological b. Regulatory c. Social d. Economic e. Competitive
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a. Technological EXPLANATION: Technology refers to inventions or innovations from applied science or engineering research such as "natural user interfaces" that are utilizing gesture, touch, and voice to change the way we interact with and control computers and complicated machines.
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*Q: What is an information- and communication-based electronic exchange environment mostly occupied by sophisticated computer and telecommunication technologies and digitized offerings called?* a. Marketplace b. Marketspace c. Intranet d. Extranet e. Digital commerce
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b. Marketspace EXPLANATION: Key term definitionâmarketspace.
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*Q: Any activity that uses some form of electronic communication in inventory, exchange, advertisement, distribution, and payment of goods and services is referred to as:* a. a digital marketplace. b. i-competition. c. an intranet. d. an extranet. e. electronic commerce.
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e. electronic commerce. EXPLANATION: Text term definitionâelectronic commerce.
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*Q: Apple (iPad), Samsung (Galaxy), Google (Nexus), and Sony (Xperia) control the vast majority of the tablet device market. These companies operate in what type of market?* a. Monopoly b. Intensive c. Pure competition d. Monopolistic competition e. Oligopoly
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e. Oligopoly EXPLANATION: An oligopoly occurs when a few companies control the majority of industry sales, as is the case in the tablet device market.
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*Q: The Clayton Act can be considered stronger than the Sherman Antitrust Act because:* a. it created a true regulatory agency with enforcement powers. b. it protected small businesses from the growing power of large chains. c. it strongly encouraged self-regulation practices through the use of moral suasion. d. it forbade certain actions that lessen competition, even if no actual has yet occurred. e. it provided a way for businesses to protect their intellectual property.
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d. it forbade certain actions that lessen competition, even if no actual has yet occurred. EXPLANATION: Because of vague wording and government inactivity, there was only one successful case against a company in the nine years after the Sherman Act became law, and it was supplemented with the Clayton Act (1914). This act forbids certain actions that are likely to lessen competition, although no actual harm has yet occurred.
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*Q: Both businesses and consumers benefit from __________; they allow consumers to correctly identify the products they want to purchase.* a. copyrights b. trademarks c. environmental scans d. self-regulations e. patents
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b. trademarks EXPLANATION: Consumers benefit from trademarks because it allows them to correctly identify products they want to purchase.
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*Q: The __________ provides for registration of a company's trademark such as the Coca-Cola dynamic ribbon.* a. Patent Act b. Lanham Act c. Sherman Antitrust Act d. Hart-Scott-Rodino Act e. Miller-Tydings Act
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b. Lanham Act EXPLANATION: Text term definitionâLanham Act.
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*Q: All of the following have been declared "generic" trademarks except:* a. Coca-Cola. b. Aspirin. c. Escalator. d. Videotape. e. Zip code.
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a. Coca-Cola. EXPLANATION: A company can lose its trademark if it becomes generic, which means that it has primarily come to be merely a common descriptive word for the product. Coca-Cola, Whopper, and Xerox are registered trademarks, and competitors cannot use these names.
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*Q: According to public opinion surveys, only __________ are considered to be among the least ethical occupations in the United States.* a. insurance company professionals b. legal professionals c. car salespeople d. politicians e. news media
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c. car salespeople EXPLANATION: Car salespeople are considered to be among the least ethical occupations in the United States.
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*Q: Business culture affects ethical conduct both in the competitive behavior among sellers and in the:* a. exchange relationship between sellers and buyers. b. competitive behavior between unrelated industries. c. price, service, and product responsibility to the ultimate consumer. d. accountability of buyers and sellers to federal and state legislation. e. perception of ethical behavior as viewed by society as a whole.
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a. exchange relationship between sellers and buyers. EXPLANATION: Business cultures comprise the effective rules of the game, the boundaries between competitive and unethical behavior, and the codes of conduct in business dealings. Business culture affects ethical conduct both in the exchange relationship between sellers and buyers and in the competitive behavior among sellers.
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*Q: What does the Latin phrase caveat emptor mean?* a. Cash on delivery b. Let the buyer beware c. Through or of itself d. Such is life e. Question the motives
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b. Let the buyer beware EXPLANATION: Key term definitionâcaveat emptor.
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*Q: Which President of the United States outlined the Consumer Bill of Rights?* a. President John F. Kennedy b. President Gerald Ford c. President Bill Clinton d. President George H. W. Bush e. President Barack Obama
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a. President John F. Kennedy EXPLANATION: In 1962, John F. Kennedy sponsored the Consumer Bill of Rights, a law that codified the ethics of exchange between buyers and sellers, which included the rights to safety, to be informed, to choose, and to be heard.
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*Q: From 2007 to 2010, a Chinese national who was employed by Dow Chemical as a research scientist delivered stolen trade secrets pertaining to organic fertilizers to individuals in Germany and China for the purpose of developing competing products. The employee was subject to confidentiality, as detailed in an agreement that he had signed addressing his obligations for handling confidential information and trade secrets. This is an example of:* a. environmental scanning. b. economic espionage. c. trade exchange. d. bribery. e. moral idealism.
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b. economic espionage EXPLANATION: Economic espionage is the clandestine collection of trade secrets or proprietary information about a company's competitors. This practice is illegal and unethical and carries serious criminal penalties for the offending individual or business. Espionage activities include illegal trespassing, theft, fraud, misrepresentation, wiretapping, the search of a competitor's trash, and violations of written and implicit employment agreements with noncompete clauses.
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*Q: A recent poll of senior executives engaged in global marketing revealed that ________ was the most likely country to engage in bribery to win or retain business.* a. Belgium b. Russia c. Iran d. Singapore e. New Zealand
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b. Russia EXPLANATION: Bribery is most evident in industries experiencing intense competition and in countries in earlier stages of economic development. Russia was the most likely country to engage in bribery to win or retain business while The Netherlands, Switzerland, and Belgium were the least likely.
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*Q: What does a code of ethics refer to?* a. The set of values, ideas, and attitudes that is learned and shared among the members of an organization b. The state and local laws regarding ethical business behavior c. A formal statement of ethical principles and rules of conduct d. The dress codes, teamwork rules, and permissible sayings of its employees e. The fundamental, passionate, and enduring principles that guide an organization's conduct over time
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c. A formal statement of ethical principles and rules of conduct EXPLANATION: Key term definitionâcode of ethics.
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*Q: __________ often assist companies and the employees with ethical issues by formally addressing contributions to government officials and political parties, customer and supplier relations, conflicts of interest, and accurate recordkeeping.* a. Mission statements b. State and local laws c. Codes of ethics d. Legal handbooks e. Self-regulations
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c. Codes of ethics EXPLANATION: A code of ethics is a formal statement of ethical principles and rules of conduct. It is estimated that 86 percent of U.S. companies have some sort of ethics code and one of every four large companies has corporate ethics officers. Ethics codes typically address contributions to government officials and political parties, customer and supplier relations, conflicts of interest, and accurate recordkeeping.
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*Q: The American Marketing Association Statement of Ethics identifies six key ethical values. These include: honesty, responsibility, fairness, respect, openness, and __________.* a. diversity b. integrity c. citizenship d. perseverance e. charity
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c. citizenship EXPLANATION: See American Marketing Association Statement of EthicsâEthical Values section: Figure 4-3.
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*Q: A General Electric employee was fired after he reported allegations of Foreign Corrupt Practices Act violations in Iraq to his supervisor and GE Energy's ombudsperson. This can be the unfortunate outcome when one becomes a:* a. capitalist. b. scab. c. corporate spy. d. whistle-blower. e. stakeholder.
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d. whistle-blower. EXPLANATION: Whistle-blowers are employees who report unethical or illegal actions of their employers.
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*Q: What is moral idealism?* a. A personal moral philosophy that focuses on the greatest good for the greatest number by assessing the costs and benefits of the consequences of ethical behavior b. A democratic consensus of moral principles and laws that govern the behavior of individuals based on legislation adopted at the federal, state, and local levels c. A societal moral philosophy based on the Golden Rule of the Judeo-Christian ethic found in the Bill of Rights of the U.S. Constitution d. A formal statement of ethical principles and rules of conduct e. A personal moral philosophy that considers individual rights or duties as universal, regardless of the outcome
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e. A personal moral philosophy that considers individual rights or duties as universal, regardless of the outcome EXPLANATION: Key term definitionâmoral idealism.
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*Q: What is utilitarianism?* a. a personal moral philosophy that focuses on "the greatest good for the greatest number" by assessing the costs and benefits of the consequences of ethical behavior b. a democratic consensus of moral principles and laws that govern the behavior of individuals based on legislation adopted at the federal, state, and local levels c. a societal moral philosophy based on the Golden Rule ethic found in the Bill of Rights of the U.S. Constitution d. a formal statement of ethical principles and rules of conduct e. a personal moral philosophy that considers individual rights or duties as universal, regardless of the outcome
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a. a personal moral philosophy that focuses on "the greatest good for the greatest number" by assessing the costs and benefits of the consequences of ethical behavior EXPLANATION: Key term definitionâutilitarianism.
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*Q: Which groups does a firm exhibiting stakeholder responsibility primarily serve?* a. The general public, public interest groups, and environmental groups b. Owners and stockholders c. The general public, owners, and stockholders d. Consumers, employees, and suppliers e. Federal, state, and local governments
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d. Consumers, employees, and suppliers EXPLANATION: Companies practicing profit responsibility serve owners and stockholders. Companies practicing stakeholder responsibility primarily serve consumers, suppliers, distributors, and employees. Companies practicing societal responsibility primarily have obligations to the preservation of the ecological environment and to the general public. See Figure 4-4 in the textbook.
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*Q: What aspect of societal responsibility encourages organizations to improve the state of people, the planet, and profit simultaneously if they are to achieve sustainable, long-term growth?* a. Social responsibility b. The triple-bottom-line c. The marketing concept d. Sustainability e. Social entrepreneurship
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b. The triple-bottom-line EXPLANATION: Key term definitionâtriple-bottom line.
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*Q: Companies like Lush and The Body Shop are trying to educate consumers about the environmental damage caused in the production of traditional palm oil so that they can sell their own "palm oil-free" or "sustainable" palm oil products, with oils produced on land that wasn't cleared of trees. This is an example of:* a. a social audit. b. green marketing. c. the marketing concept. d. sustainability. e. social entrepreneurship.
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b. green marketing. EXPLANATION: Green marketing is the result of marketing efforts to produce, promote, and reclaim environmentally sensitive products. These companies are drawing attention to the environmental importance of palm oil and providing products that use an eco-friendlier alternative.
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*Q: ISO 14000 is:* a. a plan to encourage the purchase of "Made in America" products. b. a set of guidelines for firms to use when developing cause marketing initiatives. c. an international program to promote green marketing. d. a marketing metric that measures how well a firm performs on its sustainability efforts. e. a set of standards for the registration and certification of a manufacturer's quality management and assurance system based on an on-site audit of practices and procedures.
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c. an international program to promote green marketing. EXPLANATION: Key term definitionâISO 14000.
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*Q: Converting socially responsible ideas into actions involves careful planning and monitoring of programs. Many companies develop, implement, and evaluate their social responsibility efforts by means of a(n):* a. action plan. b. tactical plan. c. research plan. d. social audit. e. financial audit.
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d. social audit. EXPLANATION: Many companies develop, implement, and evaluate their social responsibility efforts by means of a social audit, which is a systematic assessment of a firm's objectives, strategies, and performance in terms of social responsibility.
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*Q: What is the last step in a social audit?* a. Evaluate current social responsibility programs. b. Determine the amount of money that can be allocated for societal marketing programs. c. Identify social responsibility causes consistent with the company's mission. d. Recognize a firm's social expectations and the rationale for engaging in social responsibility endeavors. e. Determine the types of resources needed to achieve social responsibility objectives.
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a. Evaluate current social responsibility programs. EXPLANATION: A social audit consists of five steps, the last of which is to evaluate the organization's social responsibility programs and activities undertaken and to assess its future involvement in them.
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*Q: The practice of __________ occurs when an organization conducts business in a way that protects the natural environment while making economic progress.* a. sustainable development b. cause marketing c. stakeholder responsibility d. the marketing concept e. environmental marketing
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a. sustainable development EXPLANATION: Key term definitionâsustainable development.
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*Q: The __________ has developed guidelines to describe the circumstances under which an organization can make environmental claims without constituting misleading information in regard to recyclable, biodegradable, and sustainable products and processes.* a. Food and Drug Administration (FDA) b. Federal Trade Commission (FTC) c. International Standards Organization (ISO) d. U.S. Supreme Court e. American Marketing Association (AMA)
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b. Federal Trade Commission (FTC) EXPLANATION: The Federal Trade Commission (FTC) has developed guidelines to describe the circumstances under which an organization can make environmental claims without constituting misleading information in regard to recyclable, biodegradable, and sustainable products and processes.
