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Chapter 3:
Gathering Information and Scanning the Environment
GENERAL CONCEPT QUESTIONS
Multiple Choice
1. The major responsibility for identifying significant marketplace changes falls to the
________.
a. U.S. Department of Labor
b. company’s marketers
c. American Marketing Association
d. industry lobby groups found in Washington, D.C.
e. marketing research industry
Answer: b
Page: 72
Level of difficulty: Easy
2. Marketers have extensive information about how consumption patterns vary across
countries. On a per capita basis within Western Europe, the ________ smoke the
most cigarettes.
a. Swiss
b. Greeks
c. Irish
d. Austrians
e. French
Answer: d
Page: 72
Level of difficulty: Hard
3. All of the following questions EXCEPT ________, would be considered to be forms
of information needs probes.
a. What decisions do you regularly make?
b. What information do you need to make decisions?
c. What data analysis programs would you want?
d. What magazines and trade reports would you like to see on a regular basis?
e. What products would be most closely matched to consumer needs?
Answer: e
Page: 73
Level of difficulty: Medium
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Chapter 3: Gathering Information and Scanning the Environment
4. ________ consists of people, equipment, and procedures to gather, sort, analyze,
evaluate, and distribute needed, timely, and accurate information to marketing
decision makers.
a. A marketing information system
b. A marketing research system
c. A marketing intelligence system
d. A promotional campaign
e. A marketing database
Answer: a
Page: 73
Level of difficulty: Medium
5. The company’s marketing information system should be a cross between what
managers think they need, what managers really need, and ________.
a. what the marketing research department is able to do
b. what consumers are willing to share
c. what the competition is doing
d. what is acceptable industry practice
e. what is economically feasible
Answer: e
Page: 73
Level of difficulty: Medium
6. Marketing managers rely on internal reports. By analyzing this information, they can
spot ________.
a. micro-markets
b. opportunities and problems
c. macro-markets
d. competitive strategies
e. consumer demographic units
Answer: b
Page: 73
Level of difficulty: Easy
7. The heart of the internal records system is the ________.
a. database
b. asset acquisition process
c. order-to-payment cycle
d. service consideration
e. information liquidity ratio
Answer: c
Page: 73
Level of difficulty: Hard
8. When a marketer “mines” his or her company’s database, fresh insights can be gained
into neglected customer segments, ________, and other useful information.
a. recent customer trends
b. long-term competitive trends
c. possible new inventions
d. possible new technologies
e. new primary data possibilities
Answer: a
Page: 74
Level of difficulty: Medium
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Part 2: Capturing Marketing Insights
9. The internal records system supplies results data, but the marketing intelligence
system supplies ________ data.
a. concurrent
b. secondary
c. research
d. happenings
e. premium
Answer: d
Page: 74
Level of difficulty: Medium
10. A ________ is a set of procedures and sources managers use to obtain everyday
information about developments in the marketing environment.
a. marketing research system
b. marketing information system
c. product management system
d. marketing intelligence system
e. vertical system
Answer: d
Page: 74
Level of difficulty: Medium
11. A company can take several steps to improve the quality of its marketing intelligence.
If the company purchases competitive products for study, attends open houses and
trade shows, and reads competitors’ published reports and stockholder information,
the company is using ________ to improve the quality of its marketing intelligence.
a. sales force surrogates
b. intermediaries
c. external networks
d. advisory panels
e. customer feedback systems
Answer: c
Pages: 74–75
Level of difficulty: Hard
12. All of the following would be considered to be steps to improve the quality of
marketing intelligence in a company EXCEPT ________.
a. a company can train and motivate the sales force to spot and report new
developments
b. a company can use guerrilla tactics such as going through a competitor’s trash
c. a company can motivate intermediaries to pass along important information
d. a company can network externally
e. a company can purchase information from outside suppliers
Answer: b
Pages: 74–76
Level of difficulty: Easy
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Chapter 3: Gathering Information and Scanning the Environment
13. The 2000 U.S. census provides an in-depth look at the population swings,
demographic groups, regional migrations, and changing family structure of 281+
million people. Which of the following steps to improve the quality of company
marketing intelligence system would be most closely associated the above
illustration?
a. A company can purchase information from outside suppliers.
b. A company can take advantage of government data sources.
c. A company can use online customer feedback systems to collect data.
d. A company can network externally.
e. A company can use its sales force to collect and report data.
Answer: b
Page: 76
Level of difficulty: Easy
14. There are four main ways that marketers can find relevant online information on
competitors’ products and weaknesses, and summary comments and overall
performance rating of a product, service, or supplier. ________ is(are) a type of site
that is concentrated in financial services and high-tech products that require
professional knowledge.
a. Independent customer goods and service reviews
b. Distributor or sales agent feedback sites
c. Combo-sites offering customer reviews and expert opinions
d. Customer complaint sites
e. Shopping bot service sites
Answer: c
Page: 77
Level of difficulty: Hard
15. A ________ is “unpredictable, short-lived, and without social, economic, and political
significance.”
a. fad
b. fashion
c. trend
d. megatrend
e. style
Answer: a
Page: 77
Level of difficulty: Medium
16. A ________ is a direction or sequence of events that has some momentum and
durability; the shape of the future is revealed and many opportunities are provided.
a. fad
b. fashion
c. trend
d. megatrend
e. style
Answer: c
Page: 77
Level of difficulty: Hard
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17. ________ have been described as “large social, economic, political and technological
changes [that] are slow to form, and once in place, they influence us for some time—
between seven and ten years, or longer.
a. Fads
b. Fashions
c. Trends
d. Megatrends
e. Styles
Answer: d
Page: 77
Level of difficulty: Medium
18. Which of the following minority groups in the United States has been associated with
one of the ten megatrends shaping the consumer landscape?
a. African Americans
b. Asian Americans
c. European Americans
d. Hispanic Americans
e. Middle Eastern Americans
Answer: d
Page: 78
Level of difficulty: Medium
19. The beginning of the new century brought a series of new challenges. All of the
following would be considered to be among those challenges EXCEPT ________.
a. a deterioration of innovative ideas
b. steep decline of the stock market
c. increasing unemployment
d. corporate scandals
e. the rise of terrorism
Answer: a
Page: 78
Level of difficulty: Medium
20. With the rapidly changing global picture, the firm must monitor six major forces. All
of the following would be among those forces EXCEPT ________.
a. demographic
b. economic
c. social-cultural
d. natural
e. promotional
Answer: e
Page: 78
Level of difficulty: Easy
21. The main demographic force that marketers monitor is(are) ________.
a. suppliers
b. competitors
c. communication (such as advertising)
d. government reports dealing with birth rates
e. population
Answer: e
Page: 79
Level of difficulty: Easy
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Chapter 3: Gathering Information and Scanning the Environment
22. The population explosion has been a source of major concern. Unchecked population
growth and consumption could eventually result in all of the following EXCEPT
________.
a. insufficient food supply
b. depletion of key minerals
c. overcrowding
d. restrictions on competition
e. pollution
Answer: d
Page: 79
Level of difficulty: Easy
23. One impact of explosive population growth is illustrated by the case of China. The
Chinese government passed regulations limiting families to one child. One
consequence of these regulations is that ________.
a. the children are so fussed over and spoiled that they become “little emperors”
b. school enrollments are dropping
c. the fledgling automotive business in China will not have customers in a few years
d. open rebellion is being preached
e. “child-oriented businesses” have few customers
Answer: a
Page: 80
Level of difficulty: Medium
24. A significant fact about population growth and population shifts is that in 2004 or
2005, ________.
a. the youth market will exceed that of the adult market
b. people over the age of 60 will outnumber those under five years of age
c. baby boomers will be eclipsed by Gen X young adults
d. most age group segments will be about equal
e. Gen Y young adults will surpass the baby boomers as the largest age segment
Answer: b
Page: 80
Level of difficulty: Hard
25. Which of the following age groups is thought to control three-quarters of the
country’s wealth?
a. 0–20 age segment
b. 60+ age segment
c. 20–30 age segment
d. 30–40 age segment
e. 40+ age segment
Answer: e
Page: 81
Level of difficulty: Hard
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26. At one time the United States was called a “melting pot” society because of the
number of different cultures that were integrated into the U.S. culture. Today, the
United States is described as a ________ society because many ethnic groups are
maintaining their ethnic differences, neighborhoods, and cultures.
a. “boiling pot”
b. “salad bowl”
c. “banana split”
d. “doubled up”
e. “non-communicative”
Answer: b
Page: 81
Level of difficulty: Medium
27. According to the 2000 census, the U.S. population of 276.2 million was 72 percent
white and ________ percent African American. The remainder consisted of Hispanic
Americans and other minorities.
a. 20
b. 18
c. 15
d. 13
e. 11
Answer: d
Page: 81
Level of difficulty: Hard
28. Diversity goes beyond ethnic and racial markets. More than ________ million
Americans have disabilities, and they constitute a market for home delivery
companies (and others).
a. 50
b. 40
c. 30
d. 20
e. 10
Answer: a
Page: 83
Level of difficulty: Hard
29. Which of the following countries is known for having 99 percent of its population
literate?
a. England
b. Germany
c. France
d. United States
e. Japan
Answer: e
Page: 83
Level of difficulty: Medium
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Chapter 3: Gathering Information and Scanning the Environment
30. The ________ household consists of a husband, wife, and children (and sometimes
grandparents).
a. “traditional”
b. “extended”
c. “diversity”
d. “modern”
e. “revised”
Answer: a
Page: 83
Level of difficulty: Medium
31. Married couple households—the dominant cohort since the formulation of the United
States—has slipped from nearly 80 percent in the 1950s to around ________ percent
today.
a. 70
b. 60
c. 50
d. 40
e. 35
Answer: c
Page: 83
Level of difficulty: Hard
32. The twenty-first century saw ________ markets grow more rapidly again due to a
higher birth rate, a lower death rate, and rapid growth from foreign immigration.
a. suburban
b. urban
c. rural
d. coastal
e. secondary
Answer: b
Page: 84
Level of difficulty: Medium
33. The movement by population to the ________ has lessened the demand for warm
clothing and home heating equipment and increased demand for air conditioning.
a. Grainbelt
b. Pacific Northwest
c. Sunbelt
d. Mid-Coastal areas
e. Heartland
Answer: c
Page: 84
Level of difficulty: Easy
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Part 2: Capturing Marketing Insights
34. Marketers look at where consumers are gathering. Almost one in ________ people
over the age of five (120 million) moved at least one time between 1995 and 2000,
according to a Census 2000 brief.
a. two
b. three
c. four
d. five
e. ten
Answer: a
Page: 85
Level of difficulty: Hard
35. In which of the following economies would we expect to find few opportunities for
marketers?
a. Industrializing economies.
b. Land-locked economies.
c. Raw-material-exporting economies.
d. Industrial economies.
e. Subsistence economies.
Answer: e
Page: 86
Level of difficulty: Easy
36. According to information presented in the text, which of the following countries is
surprisingly a very good market for Lamborghini automobiles (costing more than
$150,000) because of the number of wealthy families that can afford expensive cars.
a. Greece
b. Switzerland
c. Holland
d. Russia
e. Portugal
Answer: e
Page: 86
Level of difficulty: Hard
37. Over the past three decades in the United States, the rich have grown richer and the
middle class has ________.
a. stayed about the same
b. shrunk
c. increased slightly
d. matched the rich in terms of relative growth
e. been ignored because of problems with the poorer classes
Answer: b
Page: 86
Level of difficulty: Medium
38. ________ shapes the beliefs, values, and norms that largely define the tastes and
preferences.
a. Marketing
b. The mass media
c. Government
d. Production innovation and engineering
e. Society
Answer: e
Page: 87
Level of difficulty: Medium
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Chapter 3: Gathering Information and Scanning the Environment
39. If a consumer lives the lifestyle of a “pleasure seeker” or goes on a “self-realization”
quest, he or she is expressing what is called ________.
a. views of others
b. views of society
c. views of themselves
d. views of organizations
e. views of the universe
Answer: c
Pages: 87–88
Level of difficulty: Easy
40. According to the information found in the social-cultural environment, with respect to
views of others, ________ are considered to be things that allow people who are alone
to feel they are not (e.g., television, home video games, and chat rooms on the
Internet).
a. social surrogates
b. subliminal fantasies
c. relationship avoidance
d. primary products
e. secondary products
Answer: a
Page: 88
Level of difficulty: Medium
41. Today, corporations need to make sure that they are good corporate citizens and that
their consumer messages are honest. Such a view would be consistent with which of
the following views?
a. Views of others.
b. Views of organizations.
c. Views of themselves.
d. Views of the universe.
e. Views of society.
Answer: b
Page: 88
Level of difficulty: Easy
42. People vary in their attitudes toward their society. ________ usually live more
frugally, drive smaller cars, and wear simpler clothing.
a. Makers
b. Escapers
c. Seekers
d. Changers
e. Developers
Answer: d
Page: 88
Level of difficulty: Hard
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Part 2: Capturing Marketing Insights
43. People vary in their attitudes toward society and react accordingly. ________ are a
major market for movies, music, surfing, and camping.
a. Makers
b. Preservers
c. Escapers
d. Changers
e. Developers
Answer: c
Page: 88
Level of difficulty: Easy
44. All of the following have been cited by the text as being among Americans’ core
values EXCEPT ________.
a. they believe in work
b. they believe in getting married
c. they believe in giving to charity
d. they believe in being honest
e. they believe in sexual permissiveness
Answer: e
Page: 88
Level of difficulty: Easy
45. Which of the following would be the best illustration of a secondary belief or value?
a. Belief in work.
b. Belief in giving to charity.
c. Belief in getting married.
d. Belief in getting married early.
e. Belief in being honest.
Answer: d
Page: 88
Level of difficulty: Medium
46. Which of the following is by far the most popular American leisure activity in that it
is preferred by 59 percent of adults who participate in such activities?
a. Gardening.
b. Walking for exercise.
c. Swimming.
d. Photography.
e. Jogging or running.
Answer: b
Page: 89
Level of difficulty: Medium
47. Each society contains ________, groups with shared values emerging from their
special life experiences or circumstances.
a. demographic segments
b. cliques
c. consumer bundles
d. subcultures
e. behavioral niches
Answer: d
Page: 89
Level of difficulty: Medium
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Chapter 3: Gathering Information and Scanning the Environment
48. Which of the following would be the best illustration of a subculture?
a. A softball team.
b. A university alumni association.
c. Teenagers.
d. A Boy Scout troop.
e. Frequent flyers.
Answer: c
Page: 89
Level of difficulty: Medium
49. All of the following EXCEPT ________ have been found to influence young people
today and cause a shift of secondary cores values for this group.
a. U2’s Bono.
b. Elvis Presley.
c. The NBA’s LeBron James.
d. Golf’s Tiger Woods.
e. Skateboarder Tony Hawk.
Answer: b
Page: 89
Level of difficulty: Easy
50. Although core values are fairly persistent, cultural swings do take place. ________
caused such a swing in the 1960s.
a. Ford Motor Company
b. George McGovern
c. G.I. Joe action characters
d. The infomercial
e. The Beatles
Answer: e
Page: 89
Level of difficulty: Medium
51. Marketers need to be aware of threats and opportunities associated with four trends in
the natural environment. All of the following are among those trends EXCEPT
________.
a. the shortage of raw materials
b. the increased cost of energy
c. near 90 percent corporate support for “green causes”
d. increased pollution levels
e. the changing role of governments
Answer: c
Page: 90
Level of difficulty: Easy
52. With respect to the shortage of raw materials, air and water are classified as
________ resources. However, as we know, problems are beginning to plague both
our air and water quality.
a. infinite
b. near finite
c. finite renewable
d. finite nonrenewable
e. absolute
Answer: a
Page: 90
Level of difficulty: Medium
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Part 2: Capturing Marketing Insights
53. One finite nonrenewable resource, ________, has created serious problems for the
world economy. Because of anticipated shortages, investment and commodity
markets have had wild swings.
a. water
b. air
c. sugar
d. coffee
e. oil
Answer: e
Page: 90
Level of difficulty: Easy
54. From a branding perspective, “green marketing” programs have not been entirely
successful. ________ has been cited as one of the obstacles that must be overcome
for “green marketing” programs to be more successful.
a. Overexposure and lack of credibility
b. High cost
c. Poor promotions
d. Resistance by the youth segment in the marketplace
e. Lack of support by governmental agencies and concerns
Answer: a
Page: 91
Level of difficulty: Hard
55. Which of the following countries is noted for their “green movement” and support
within its government for environmental quality enhancement?
a. Mexico
b. China
c. Germany
d. England
e. Italy
Answer: c
Page: 91
Level of difficulty: Medium
56. The marketer should monitor the following trends in technology, EXCEPT ________,
if progress is to be made in business.
a. the pace of change
b. the difficulties found in sharing information
c. the opportunities for innovation
d. varying R&D budgets
e. increased regulation
Answer: b
Page: 92
Level of difficulty: Hard
57. According to some industry analysts and inventors, ________ will eventually eclipse
the PC as our most important technological device.
a. iPod
b. HDTV
c. holographic television
d. the mobile phone
e. solar-powered car
Answer: d
Page: 92
Level of difficulty: Medium
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Chapter 3: Gathering Information and Scanning the Environment
58. All of the following will most likely be among the advantages for a society that
embraces telecommuting as an employment/communication alternative EXCEPT
________.
a. reduction of auto pollution
b. bringing the family closer together
c. increased bonuses and compensation perks
d. creating more home-centered shopping
e. entertainment centered on the home environment
Answer: c
Page: 92
Level of difficulty: Medium
59. ________ legislation has as its purposes to protect companies from unfair
competition, to protect consumers from unfair business practices, and to protect the
interests of society from unbridled business behavior.
a. Business
b. Consumer
c. Bi-partisan
d. Activist
e. Global
Answer: a
Page: 94
Level of difficulty: Easy
60. An important force affecting business is the ________—a movement of citizens and
government organized to strengthen the rights and powers of buyers in relation to
sellers.
a. lobbyist movement
b. consumerist movement
c. environmental movement
d. self-rights movement
e. ethical reform movement
Answer: b
Page: 95
Level of difficulty: Medium
True/False
61. The major responsibility for identifying significant marketplace changes falls to the
company’s marketers.
Answer: True
Page: 72
Level of difficulty: Easy
62. Today, most firms are rather sophisticated about gathering information.
Answer: False
Page: 72
Level of difficulty: Medium
63. A marketing information system is developed from internal company records,
marketing intelligence, and promotional models supplied by the marketing
department.
Answer: False
Page: 73
Level of difficulty: Medium
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Part 2: Capturing Marketing Insights
64. The heart of the internal records system is the bar code.
Answer: False
Page: 73
Level of difficulty: Medium
65. According to principles found in database construction and usage, a “carpet bombing”
mail out of a new offer is usually the most successful strategy.
Answer: False
Page: 74
Level of difficulty: Medium
66. The internal records system supplies results data, but the marketing intelligence
system supplies happenings data.
Answer: True
Page: 74
Level of difficulty: Easy
67. If a company were pursuing a policy of networking externally it might collect
competitors’ ads or look up news stories about competitors.
Answer: True
Page: 75
Level of difficulty: Medium
68. One of the ways to find relevant online information on competitors’ strengths and
weaknesses might be to frequent distributor or sales agent feedback sites.
Answer: True
Page: 76
Level of difficulty: Medium
69. A style is unpredictable, short-lived, and without social, economic, and political
significance.
Answer: False
Page: 77
Level of difficulty: Medium
70. A megatrend has been described as being what follows all fads that stay on the
market at least one year.
Answer: False
Page: 77
Level of difficulty: Medium
71. One of the ten significant megatrends that will impact marketing efforts in the future
is delayed retirement.
Answer: True
Page: 78
Level of difficulty: Medium
72. Microenvironmental forces have been labeled as being “uncontrollable.”
Answer: False
Page: 78
Level of difficulty: Medium
73. The main demographic force that marketers monitor is population.
Answer: True
Page: 79
Level of difficulty: Medium
74. If the world were a village of 1,000 people, it would consist of 520 men and 480
women.
Answer: False
Page: 79
Level of difficulty: Medium
75. A growing population always means a growing market.
Answer: False
Page: 80
Level of difficulty: Medium
76. Japan has one of the world’s oldest populations.
Answer: True
Page: 80
Level of difficulty: Medium
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Chapter 3: Gathering Information and Scanning the Environment
77. According to population studies, Gen X (numbering 72 million) is almost the same
size as the huge baby boomer market.
Answer: False
Page: 81
Level of difficulty: Medium
78. At present the largest minority in the United States is the Latinos with 13 percent of
the total population.
Answer: False
Page: 81
Level of difficulty: Medium
79. In the United States, 10 to 15 percent of the population may be functionally illiterate.
Answer: True
Page: 83
Level of difficulty: Medium
80. Based on research done in England, a conclusion drawn about families is that “friends
are the new family.”
Answer: True
Page: 83
Level of difficulty: Hard
81. According to studies of minority markets, the disabled market is ten times more likely
to be in a professional job, almost twice as likely to own a vacation home, eight times
more likely to own a notebook computer, and twice as likely to own individual stocks
as compared to the general population.
Answer: False
Page: 84
Level of difficulty: Medium
82. Urban markets are once again growing because of higher birth rates, a lower death
rate, and rapid growth from foreign immigration.
Answer: True
Page: 84
Level of difficulty: Medium
83. The small office—home office segment of our society has grown to nearly 40
million; thereby, boosting the sales of electronic conveniences and ready to assemble
furniture.
Answer: True
Page: 85
Level of difficulty: Medium
84. Almost one in two people over the age of five (120 million) moved at least one time
between 1995 and 2000, according to a Census 2000 brief.
Answer: True
Page: 85
Level of difficulty: Medium
85. Available purchasing power in an economy depends on mainly one facet—supply and
demand.
Answer: False
Page: 85
Level of difficulty: Easy
86. A good illustration of a raw-material exporting economy is Egypt.
Answer: False
Page: 86
Level of difficulty: Hard
87. Conventional retailers who offer medium-priced goods are the most vulnerable to the
growing trend in the United States called a two-tier market.
Answer: True
Page: 86
Level of difficulty: Hard
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Part 2: Capturing Marketing Insights
88. Through outsourcing, companies can feasibly cut between 20 to 70 percent of their
labor costs.
Answer: True
Page: 87
Level of difficulty: Easy
89. “Pleasure seekers” of the 1970s had their beliefs, values, and norms shaped by views
of others.
Answer: False
Pages: 87–88
Level of difficulty: Medium
90. If a single person has a home entertainment system that is rich in television
capabilities and home video games, he or she may be using such a system as a “social
surrogate.”
Answer: True
Page: 88
Level of difficulty: Medium
91. In recent years, because of a tough job market, there has been an increasing amount
of organizational loyalty among most employees.
Answer: False
Page: 88
Level of difficulty: Medium
92. If a young college student decides to join the military to defend the principles of his
or her country, the student would be classified as a “changer.”
Answer: False
Page: 88
Level of difficulty: Medium
93. Most Americans still believe in getting married as a core belief.
Answer: True
Page: 88
Level of difficulty: Easy
94. Teenagers would be a good example of a culture in the United States.
Answer: False
Page: 89
Level of difficulty: Medium
95. Marketers need to be aware of the threats and opportunities associated with the trend
toward increased pollution levels.
Answer: True
Page: 90
Level of difficulty: Medium
96. Research studies have shown that consumers as a whole may not be willing to pay a
premium for environmental benefits.
Answer: True
Page: 91
Level of difficulty: Easy
97. Every new technology is a force for “creative destruction.”
Answer: True
Page: 92
Level of difficulty: Easy
98. Virtual reality is giving consumers what they dream about.
Answer: False
Page: 93
Level of difficulty: Medium
99. One of the major trends in the political-legal environment is the trend toward the
growth of special interest groups.
Answer: True
Page: 93
Level of difficulty: Easy
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Chapter 3: Gathering Information and Scanning the Environment
100. Today, customers are still willing to swap personal information for customized
products from firms.
Answer: True
Page: 95
Level of difficulty: Easy
Essay
101.
Describe a marketing information system (MIS). From what sources is the MIS
developed?
Suggested Answer: A marketing information system (MIS) consists of people,
equipment, and procedures to gather, sort, analyze, evaluate, and distribute
needed, timely, and accurate information to marketing decision makers. A
marketing information system is developed from internal company records,
marketing intelligence activities, and marketing research.
Page: 73
Level of difficulty: Medium
102.
Describe the order-to-payment cycle and why it is important to internal records
information keeping.
Suggested Answer: The heart of the internal records system is the order-topayments cycle. Sales representatives, dealers, and customers send orders to the
firm. The sales department prepares invoices and transmits copies to various
departments. Out-of-stock items are back ordered. Shipped items are
accompanied by shipping and billing documents that are sent to various
departments. Today’s companies must perform these steps quickly and accurately.
Page: 73
Level of difficulty: Medium
103.
What are the various steps to improve the quality of its marketing intelligence
function that can be taken by a company?
Suggested Answer: The steps are: (1) a company can train and motivate the sales
force to spot and report new developments; (2) a company can motivate
distributors, retailers, and other intermediaries to pass along important
intelligence; (3) a company can network externally; (4) a company can set up a
customer advisory panel; (5) a company can take advantage of government data
resources; (6) a company can purchase information from outside suppliers, and
(7) a company can use online customer feedback systems to collect competitive
intelligence.
Pages: 74–76
Level of difficulty: Hard
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Part 2: Capturing Marketing Insights
104.
List and briefly describe the four main ways marketers can find relevant online
information on competitors’ strengths and weaknesses, and summary comments
and overall performance rating of a product, service, or supplier.
Suggested Answer: The four ways are: (1) independent customer goods and
service review forums; (2) distributor or sales agent feedback sites; (3) combosites offering customer review and expert opinions; and (4) customer complaint
sites.
Page: 77
Level of difficulty: Hard
105.
What is a “megatrend”? Briefly describe five megatrends shaping the consumer
landscape.
Suggested Answer: A megatrend is a large, social, economic, political, and
technological change that is slow to form, and once in place, influences us for
some time (e.g., between seven and ten years or longer). The ten trends (students
discuss five) discussed in the text are (1) aging boomers; (2) delayed retirement;
(3) the changing nature of work; (4) greater educational attainment—especially
among women; (5) labor shortages; (6) increased immigration; (7) rising Hispanic
influence; (8) shifting birth trends; (9) widening geographic differences; and (10)
the changing age structure.
Pages: 77–78
Level of difficulty: Hard
106.
What is the main demographic force monitored by marketers? Why?
Suggested Answer: The main demographic force monitored by marketers is
population. The reason for its importance is because people make up markets.
Marketers are keenly interested in the size and growth rate of population in cities,
regions, and nations; age distribution and ethnic mix; educational levels;
household patterns; and regional characteristics and movements.
Page: 79
Level of difficulty: Medium
107.
Describe the two dominant “household patterns” in the last 50 years.
Suggested Answer: The dominant patterns are: (1) the “traditional household”
that consists of a husband, wife, and children (and sometimes grandparents). Yet,
in the United States today, one out of eight households is “diverse” or
“nontraditional,” and includes a variety of household types and members; and (2)
married couple households—the dominant cohort since the formation of the
United States—have slipped from 80 percent in the 1950s to around 50 percent
today. Nearly 30 percent of households are singles or live-alones.
Page: 83
Level of difficulty: Medium
78
Chapter 3: Gathering Information and Scanning the Environment
108.
People absorb, almost unconsciously, a worldview that defines their relationships.
List and describe the “views” that assist or retard this relationship development
process.
Suggested Answer: The views are: (1) views of themselves; (2) views of others;
(3) views of organizations; (4) views of society; (5) views of nature; and (6) views
of the universe. Students should characterize each based on materials presented in
the text.
Pages: 87–88
Level of difficulty: Hard
109.
Describe the differences between a core belief and a secondary belief. List the
primary core beliefs of Americans as revealed by the text.
Suggested Answer: The people living in a particular society hold many core
beliefs and values that tend to persist. Most Americans still believe in work, in
getting married, in giving to charity, and in being honest. Core beliefs and values
are passed on from parents to children and are reinforced by major social
institutions (e.g., schools, churches, businesses, and governments). Secondary
beliefs and values are more open to change. Believing in the institution of
marriage is a core belief; believing that people ought to get married early is a
secondary belief. Marketers have some chance of changing secondary beliefs.
There is little chance to change a core belief or values.
Pages: 88–89
Level of difficulty: Medium
110.
Many marketers have tried and failed with “green sales pitches” (appeals to one’s
environmental good sense) over the past decade. What obstacles (as cited by the
text) did this movement encounter? Be sure to briefly explain each obstacle.
Suggested Answer: The obstacles were: (1) overexposure and lack of credibility;
(2) consumer behavior; and (3) poor implementation. For an explanation of each
see chapter material.
Page: 91
Level of difficulty: Medium
79
Part 2: Capturing Marketing Insights
APPLICATION QUESTIONS
Multiple Choice
111.
DuPont commissioned marketing studies to uncover personal pillow behavior for
its Dacron Polyester unit that supplies filling to pillow makers and sells its own
Comforel brand. Which of the following was revealed by research to be the
primary challenge faced by DuPont in expanding sales in the pillow industry?
a. Price.
b. People don’t want to give up their old pillows.
c. The smell associated with polyester.
d. The lack of a favorable reputation in the industry.
e. Competition from China.
Answer: b
Page: 72
Level of difficulty: Medium
112.
Assume that you are a marketing information specialist for a large clothing
manufacturer. Your task is to get functional managers to use the company’s MIS
system on a more regular basis. All of the following questions are would be
among those that might be submitted to those manager’s to pique their interest in
MIS EXCEPT, ________?
a. What is your appraisal of the budget for your functional area this year
b. What decisions do you regularly make
c. What information do you need to make these decisions
d. What topics would you like to be kept informed of
e. What data analysis programs would you want
Answer: a
Page: 73
Level of difficulty: Easy
113.
As the manager of an organization that is attempting to build a MIS, you have
been informed that a MIS is built upon three fundamental information sources.
The sources are ________, marketing intelligence activities, and marketing
research.
a. external records and documents
b. databases found on the Internet
c. consultant reports
d. internal company records
e. secondary data from government sources such as the Better Business Bureau
Answer: d
Page: 73
Level of difficulty: Hard
80
Chapter 3: Gathering Information and Scanning the Environment
114.
Pizza Hut has millions of customer records gleaned from point-of-sale
transactions at its restaurants. Using Teradata Warehouse Miner, Pizza Hut has
not only been able to ________, but can also target its marketing to find the best
coupon offers for each household and predict the success of campaigns.
a. reduce its outside research emphasis
b. increase profits dramatically
c. reduce television advertising
d. win quality awards
e. purge expensive duplicates from its direct-mail campaigns
Answer: e
Page: 74
Level of difficulty: Medium
115.
As a manager you would most likely use an internal records system to supply
________ data, whereas, you would use your marketing intelligence system to
supply happenings data.
a. demand
b. logistical
c. psychographic
d. results
e. primary
Answer: d
Page: 74
Level of difficulty: Hard
116.
When McDonald’s used mystery shoppers to assess stores’ internal speed
standards, McDonald’s was using which of the following steps to improve its
marketing intelligence system?
a. A company can train and motivate the sales force to spot and report new
developments.
b. A company can motivate distributors, retailers, and other intermediaries to
pass along important intelligence.
c. A company can network externally.
d. A company can set up an advisory panel.
e. A company can take advantage of government data sources.
Answer: b
Pages: 74–76
Level of difficulty: Medium
117.
Examples of ________ that were considered to be successful for toy retailers were
Beanie Babies, Furbies, and Tickle Me Elmo dolls.
a. trends
b. fashions
c. fads
d. megatrends
e. styles
Answer: c
Page: 77
Level of difficulty: Medium
81
Part 2: Capturing Marketing Insights
118.
More than half of all U.S. workers are employed in ________, in professional or
related occupations, or in a sales or other office-based position.
a. accounting
b. finance
c. computer information systems
d. database maintenance
e. management
Answer: e
Page: 78
Level of difficulty: Hard
119.
As baby boomers grow older, their impact on consumer spending can be
described as being ________.
a. substantial (without overstating)
b. marginal at best
c. eclipsed by the Generation X members
d. only moderate
e. stymied by higher taxes
Answer: a
Page: 78
Level of difficulty: Medium
120.
According to information provided in the text, ________ is an example of a
country with a very young and rapidly expanding population where products such
as milk, diapers, school supplies, and toys would be important.
a. Japan
b. France
c. Spain
d. Mexico
e. the United Kingdom
Answer: d
Page: 80
Level of difficulty: Hard
121.
________ are typically cynical about hard-sell marketing pitches that promise
more than they can deliver.
a. Baby boomers
b. War babies
c. Generation Z
d. Generation X
e. Net-gens
Answer: d
Page: 81
Level of difficulty: Medium
82
Chapter 3: Gathering Information and Scanning the Environment
122.
A frequently noted megatrend in the United States is the increase percentage of
________ in the total population; they made up half of all new workers in the past
decade.
a. Asians (excluding Chinese)
b. Indians
c. Chinese
d. Hispanics
e. Africans
Answer: D
Page: 81
Level of difficulty: Medium
123.
Because of heightened competition for top students and concerns about
institutional reputations and rankings, many universities are now increasing
marketing efforts with the purpose of ________.
a. creating virtual educational processes
b. creating definable “brands”
c. stimulating “fun” on campus
d. managing organizational resources
e. delaying belt-tightening in the future
Answer: b
Page: 83
Level of difficulty: Medium
124.
What percentage of people (cohorts) in the United States are considered to be
married couple households?
a. 80 percent
b. 70 percent
c. 60 percent
d. 50 percent
e. 40 percent
Answer: d
Page: 83
Level of difficulty: Hard
125.
Jason has just moved in with several friends in what might commonly be called a
“commune.” As a 20-something, Jason’s choice of living style is exemplified by
the term ________.
a. dropout
b. pseudo-technocrat
c. neo-tribe
d. socialist
e. fascist
Answer: c
Page: 83
Level of difficulty: Medium
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Part 2: Capturing Marketing Insights
126.
The outsourcing wave (computer analysis and software design) that has been
experienced by India with its young technologically-proficient younger generation
has had an impact on traditions as well as the economy. Young Indians
(“liberation children”) are questioning ________.
a. the tax system of the country
b. the political parties of India for relevance
c. the meaning of life
d. their charitable responsibilities
e. conservative traditions such as arranged marriages and no public kissing
Answer: e
Page: 86
Level of difficulty: Medium
127.
William rose rapidly in his organization and was the youngest CEO in the
company’s history. His self-declared purpose as a leader was to make his
company an integral part of the American way of life and to eventually enter into
public service of his country. William would be characterized as being a
________.
a. preserver
b. maker
c. taker
d. seeker
e. reaper
Answer: b
Page: 88
Level of difficulty: Medium
128.
How do Americans spend their leisure time—59 percent of Americans (the
highest percentage) say that “walking for exercise” is their primary way of
spending leisure time. What is the second most mentioned leisure activity with 45
percent?
a. Swimming
b. Bicycling
c. Jogging or running
d. Gardening
e. Power boating
Answer: d
Page: 89
Level of difficulty: Hard
To get around obstacles to “green marketing” and make sure environmental
initiatives are implemented, some companies recommend relying on the efforts of
a ________.
a. senior ethics officer
b. market maven
c. Green Champion
d. HR vice-president
e. watch-dog committee
Answer: c
Page: 91
Level of difficulty: Medium
129.
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Chapter 3: Gathering Information and Scanning the Environment
130.
________ lobby government officials and pressure business executives to pay
more attention to consumers’ rights, women’s rights, senior citizens’ rights,
minority rights, and gay rights.
a. Political action committees (PACs)
b. Universities and colleges
c. The Better Business Bureau
d. The U.S. Chamber of Commerce
e. Manufacturing trade associations (MTAs)
Answer: a
Page: 95
Level of difficulty: Easy
Short Answer
131.
Although every manager in an organization needs to observe the outside
environment, marketers have two advantages. What are those two advantages?
Suggested Answer: The two advantages are: (1) they have disciplined methods
for collecting information and (2) they spend more time interacting with
customers and observing competition.
Page: 72
Level of difficulty: Medium
132. If you were a company’s marketing information manager, you would need to
realize that your marketing information system should be a cross between three
areas of concern (thoughts) for managers with respect to information. What are
those three concerns (thoughts)?
Suggested Answer: The three concerns (thoughts) are: (1) what managers think
they need, (2) what managers really need, and (3) what is economically feasible.
Page: 73
Level of difficulty: Medium
133. What typically would be the function of a sales information system? Think of an
example to illustrate such a function.
Suggested Answer: A sales information system typically supplies accurate and
timely reports on current sales. See the example of Wal-Mart and its sales
information system to add additional data to this question.
Page: 73
Level of difficulty: Easy
134. Explain the statement that “internal records systems supply results data and
marketing intelligence systems supply happenings data.”
Suggested Answer: The internal records system records (and reports) orders,
sales, prices, costs, inventory levels, receivables, payables, and so on. These are
the results of doing business. Marketing intelligence is a set of procedures and
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Part 2: Capturing Marketing Insights
sources managers use to obtain everyday information about developments in the
marketing environment (happenings data).
Pages: 73–74
Level of difficulty: Easy
135.
One of the ways that a marketer can improve its marketing intelligence function is
to network externally. What does networking externally mean? Provide an
illustration to support your answer.
Suggested Answer: A company that seeks to network externally does so by (if
applicable) purchasing competitor products, attending open houses and trade
shows, reading competitors’ published reports, attending stockholder meetings,
talking to employees, dealers, distributors, suppliers, and freight agents, collecting
competitors’ ads, and looking up news stories about competitors.
Page: 75
Level of difficulty: Medium
136.
Marketers today use relevant online information to assess competitors’ product
strengths and weaknesses. Additionally, summary comments and overall
performance rating of products, services, and suppliers can be obtained. List the
four main ways marketers can get such information online.
Suggested Answer: The four ways are (1) independent customer goods and
service review forms, (2) distributor or sales agent feedback sites, (3) combo-sites
offering customer reviews and expert opinions, and (4) customer complaint sites.
Page: 77
Level of difficulty: Hard
137.
What is a trend and why is it important in marketing?
Suggested Answer: A trend is a direction or sequence of events that has some
momentum and durability. Trends are more predictable and durable than fads. A
trend reveals the shape of the future and provides many opportunities.
Page: 77
Level of difficulty: Medium
138.
Assume that you are a marketing manager for a youth clothing manufacturer that
has just read about the megatrend of the “rising Hispanic influence” in the United
States. Explain this megatrend and indicate why it might be important to your
company and industry.
Suggested Answer: Already the largest minority group in the United States, with
35 million people, the Hispanic population is projected to increase by 35 percent
in this decade. Though Hispanic households represented only 9 percent of U.S.
households in 2000, they accounted for 20 percent of the 4 million children born
in this country that year. Students should indicate how a youth-oriented clothier
might use such information.
Page: 78
Level of difficulty: Hard
86
Chapter 3: Gathering Information and Scanning the Environment
139.
Characterize Generation Y or echo boomers. What implications does this
generation have for marketing over the next few years?
Suggested Answer: Born between 1977 and 1994, now numbering 72 million,
this group is almost equal in size to baby boomers. One distinguishing
characteristic of this age group is their utter fluency and comfort with computer
and Internet technology. Students may speculate on addition impacts.
Page: 81
Level of difficulty: Medium
140.
The United States was originally called a “melting pot,” but there are increasing
signs that the melting didn’t occur. Explain. What would be a “new” way of
describing our society and how it relates to members?
Suggested Answer: Now people call the United States a “salad bowl” society,
with ethnic groups maintaining their ethnic differences, neighborhoods, and
cultures. This appears to be what the various ethnic groups have been doing for
sometime.
Page: 81
Level of difficulty: Medium
141.
As a marketing manager you have observed that the “traditional household” in the
United States is giving way to the “nontraditional household.” Explain what this
means and characterize the “nontraditional household.”
Suggested Answer: Today, one of eight households is characterized as being
nontraditional. Examples of the nontraditional household would be single livealones, adult live-togethers of one or both sexes, single-parent families, childless
married couples, and empty-nesters.
Page: 83
Level of difficulty: Medium
142.
What two factors have helped those businesses that cater to the growing SOHO
(small office/home office) segment that is nearly 40 million strong?
Suggested Answer: The two factors are: (1) suburban growth and (2) a disdain
for commuting.
Page: 85
Level of difficulty: Easy
143.
What impact are “liberalizing children” having on India?
Suggested Answer: Liberalizing children have a hunger for achievement.
Liberalization children are questioning conservative traditions such as arranged
marriages and no public kissing. They are becoming Westernized.
Page: 86
Level of difficulty: Medium
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Part 2: Capturing Marketing Insights
144.
As indicated in the text, GAP pursues a segmented market strategy with three tiers
of retail clothing stores. Explain the GAP tier system and indicate examples of the
tiers.
Suggested Answer: GAP has the upscale Banana Republic, the mid-market GAP,
and the budget-priced Old Navy. This strategy has helped GAP to grow from $7
billion in 1996 to $14 billion by 2003.
Page: 86
Level of difficulty: Medium
145.
Within our social-cultural environment, consumers often see themselves from
different views. Assume that you were espousing the view of themselves.
Characterize this view.
Suggested Answer: People vary in their relative emphasis placed on selfgratification. In the 60s and 70s there were many “pleasure seekers.” Others
sought self-realization. Today, conservatism is on the rise.
Pages: 87–88
146.
Level of difficulty: Hard
Describe the differences between a core belief and secondary belief. Provide an
example to illustrate your description.
Suggested Answer: The people living in a particular society hold many core
beliefs and values. These tend to persist over time. Most Americans believe in
work, getting married, in giving to charity, and in being honest. Secondary beliefs
are more open to change such as when is the right time to get married.
Page: 88
Level of difficulty: Medium
147.
Assume that you were asked to write a brief paragraph indicating why a firm
might wish to pursue a policy of “green marketing.” How would your paragraph
read?
Suggested Answer: The “green marketing” movement is associated with
“environmentally friendly” products and marketing programs. These programs
were matched to consumers’ growing interest in environmental issues.
Page: 91
Level of difficulty: Medium
148.
What four trends in technology should marketers monitor?
Suggested Answer: The four trends are: (1) the pace of change, (2) the
opportunities for innovation, (3) varying R&D budgets, and (4) increased
legislation.
Page: 92
Level of difficulty: Hard
88
Chapter 3: Gathering Information and Scanning the Environment
149.
With respect to opportunities for innovation, characterize the power of virtual
reality for the marketer.
Suggested Answer: Virtual reality is the combination of technologies that allows
users to experience three-dimensionally, computer-generated environments
through sound, sight, and touch. Virtual reality has impacted everything from our
homes to our automobile designs.
Page: 93
Level of difficulty: Easy
150.
Consumers are increasingly willing to swap personal information for customized
products from firms. However, there are still consumer concerns. You know that
privacy issues are still a public policy hot button. As a consumer advocate, list the
consumer concerns that seem to be the most compelling and most difficult to deal
with by the marketer.
Suggested Answer: The consumers concerns are: (1) that they will be robbed or
cheated, (2) that private information will be used against them, (3) that someone
will steal their identity, (4) that they will be bombarded with solicitations, and (5)
that children will be targeted.
Page: 95
Level of difficulty: Medium
89