Chapter 2 the Marketing Environment

Chapter 2—The Marketing Environment

MULTIPLE CHOICE

1. The number of firms a company must face, the relative size of these firms, and the degree of interdependence within the industry are all part of its _____ environment. a. demographic b. economic c. political d. competitive e. social REF: p. 67 OBJ: 8 TYPE: Def

2. Jeannette is planning to move from DuBuque, Iowa to Los Angeles to take a new job with a higher salary. The new job pays $65,000, or nearly twice as much as her current salary. Jeannette should: a. expect her purchasing power to skyrocket. b. expect her purchasing power to plummet. c. research the cost of living in Los Angeles to determine her new level of purchasing power. d. have twice the money to spend on non-essentials. e. expect her standard of living to greatly increase. REF: p. 60 OBJ: 5 TYPE: App

Purchasing power is calculated by subtracting the cost of living in a particular geographic area from the salary figure. Jeannette's purchasing power will not automatically increase with higher wages, nor will it automatically increase by moving to a large city. Since the cost of living in LA, however, is probably considerably higher than in Dubuque, Jeannette will most likely experience a drop in her standard of living. She should do some research using a salary calculator (many can be found on the Internet) before finalizing her decision.

3. Frito-Lay is considered the king of the salty snack industry with its distribution network of 42 plants, 12,800 delivery people, and more than 900 tractor trailers formed into a retail delivery powerhouse. Smaller manufacturers of salty snacks find that monitoring the activities of Frito-Lay is an effective way to monitor the _____ factors within their external environments. a. bureaucratic b. marketing mix c. competitive d. social e. demographic REF: p. 67 OBJ: 8 TYPE: App

4. In the past, foreign firms penetrated U.S. markets by concentrating on _____, but today the emphasis has been switched to product _____. a. availability; image b. quality; promotion c. new distribution outlets; value d. promotion; price e. price; quality REF: p. 67 OBJ: 8 TYPE: Comp

5. When many consumers think of adhesives, they think of 3M because it makes so many times of adhesives used in the home. However, the world’s largest adhesive producer is Henkel Consumer Adhesive, maker of Loctite and Duct tape. 3M and Henkel are part of each other’s _____ environment a. competitive b. economic

BUSINESS DIVISION BU270 Principles of Marketing c. social d. marketing mix e. legal and political REF: p. 66 OBJ: 8 TYPE: App

SCENARIOS

Virtual Impregnation Kristen Clingan's boyfriend had never even mentioned marriage when she received an e-mail announcing her boyfriend had e-impregnated her. The e-mail from www.bunintheoven.com included a positive pregnancy "test" and was followed by a half dozen subsequent messages, including the audio file of the baby's heartbeat and the ultrasound image. The whole process took three months and cost $29.95. At the end of the virtual pregnancy, she received a mug bearing the newborn's photograph. Virtual impregnation is the brainchild of Adam Corsi. He sees the virtual impregnation as a good conversation starter for topics that may not have been broached by a couple before.

6. Refer to Virtual Impregnation. Virtual Impregnation is designed for people who are in long-term relationships that seem to be either evolving slowly or not at all. This group represents the company's: a. target market b. buying center c. consumer cluster d. demographic sample e. mass market REF: p. 48 OBJ: 1

7. Refer to Virtual Impregnation. The willingness of couples to participate in this virtual pregnancy results from a fear of making a mistake and not being ready for a baby. The environmental factors most responsible for the company's success are: a. political factors b. economic factors c. competitive factors d. demographic factors e. social factors REF: p. 50-51 OBJ: 2

8. Refer to Virtual Impregnation. Describing couples that participate in a virtual pregnancy as professionals between the ages of 25 to 34 who earn at least $50,000 annual income uses _____ characteristics. a. psychographic b. demographic c. anthropologic d. geographic e. sociologic REF: p. 52 OBJ: 3

9. Refer to Virtual Impregnation. Innovations in the _____ environment are most responsible for the success of Corsi's Web site. a. economic b. political c. technological d. government e. competitive REF: p. 62 OBJ: 6

BUSINESS DIVISION BU270 Principles of Marketing 10. Refer to Virtual Impregnation. One problem facing Corsi was the potential that one of the women who received the e-mail would sue the sender as well as the Web site for sexual harassment. Such concerns are part of the _____ environment. a. political and legal b. technological c. economic d. demographic e. competitive REF: p. 63 OBJ: 7

BUSINESS DIVISION BU270 Principles of Marketing