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CHAPTER 4
THE MARKETING ENVIRONMENT
MULTIPLE CHOICE QUESTIONS
1. “________ fever” results from the convergence of a wide range of forces in the
marketing environment—from technological, economic, and demographic forces to
cultural, social, and political ones.
a. Marketing
b. Cultural
c. Technographic
d. Millennial
Answer: (d) Difficulty: (2) Page: 117
2. The ______________________ consists of the actors and forces outside marketing
that affect marketing management’s ability to develop and maintain successful
relationships with its target customers.
a. marketing organization
b. marketing system
c. marketing network
d. marketing environment
Answer: (d) Difficulty: (3) Page: 118
3. Which of the following terms best describes the environment that includes the forces
close to the company that affect its ability to serve its customers—the company,
suppliers, marketing channel firms, customer markets, competitors, and publics?
a. microenvironment
b. macroenvironment
c. global environment
d. networked environment
Answer: (a) Difficulty: (2) Page: 118
4. All of the following would be considered to be in a company’s microenvironment
EXCEPT:
a. marketing channel firms.
b. political forces.
c. publics.
d. customer markets.
Answer: (b) Difficulty: (2) Page: 118
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5. Which of the following BEST describes the environment that contains the larger
societal forces that affect the company-level environment—demographic, economic,
natural, technological, political, and cultural forces?
a. microenvironment
b. macroenvironment
c. global environment
d. networked environment
Answer: (b) Difficulty: (2) Page: 118, 123, Figure 4-4
6. All of the following would be considered to be a part of a company’s
macroenvironment EXCEPT:
a. demographic forces.
b. marketing channel forces.
c. technological forces.
d. natural forces.
Answer: (b) Difficulty: (1) Page: 118, 123, Figure 4-4
7. Finance, research and development, purchasing, and manufacturing are all activities
that are a part of which element of the microenvironment?
a. the company’s internal environment
b. the suppliers.
c. the marketing channel firms
d. the publics
Answer: (a) Difficulty: (1) Page: 119, Figure 4-1
8. __________ management sets the company’s mission, objectives, broad strategies,
and policies.
a. Top
b. Mid-level
c. Marketing
d. Tactical
Answer: (a) Difficulty: (1) Page: 119
9. ________________ are an important link in the company’s overall “value delivery
system” since they provide the resources needed by the company to produce its
goods and services.
a. Marketing intermediaries
b. Competitor networks
c. Suppliers
d. Service representatives
Answer: (c) Difficulty: (2) Page: 119
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10. _________________ help the company to promote, sell, and distribute its goods to
final buyers.
a. Marketing intermediaries
b. Competitor networks
c. Suppliers
d. Service representatives
Answer: (a) Difficulty: (2) Page: 120
11. _____________ include resellers, physical distribution firms, marketing services
agencies, and financial intermediaries.
a. Marketing intermediaries
b. Competitor networks
c. Suppliers
d. Service representatives
Answer: (a) Difficulty: (2) Page: 120
12. Firms that help the company to stock and move goods from their points of origin
to their destinations are called:
a. financial intermediaries.
b. physical distribution firms.
c. suppliers.
d. marketing services agencies.
Answer: (b) Difficulty: (2) Page: 120
13. Which of the following would be an example of a marketing services agency?
a. a warehouse
b. a transportation firm
c. an insurance agency
d. an advertising agency
Answer: (d) Difficulty: (3) Page: 120
14. All of the following are considered to be a type of customer market EXCEPT a:
a. business market.
b. competitor market.
c. government market.
d. reseller market.
Answer: (b) Difficulty: (1) Page: 120, Figure 4-2
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15. Which of the following would be considered a customer market?
a. a business market
b. a competitor market
c. a geographic market
d. a gender market
Answer: (a) Difficulty: (3) Page: 120, Figure 4-2
16. The type of customer market that buys goods and services for further processing is
called a:
a. business market.
b. consumer market.
c. government market.
d. reseller market.
Answer: (a) Difficulty: (2) Page: 120
17. If your company were to make a product, such as a suit of clothes, and sell that
product to a retailer, your company would have sold to the ___________ market.
a. reseller
b. business
c. government
d. service
Answer: (a) Difficulty: (1) Page: 120
18. If your company were to make light bulbs to be used in photocopiers, you would
most likely be selling to a ________________ market.
a. reseller
b. business
c. government
d. service
Answer: (b) Difficulty: (2) Page: 120
19. A ______________ is any group that has an actual or potential interest in or
impact on an organization’s ability to achieve its objectives.
a. competitive set
b. marketing intermediary
c. supplier
d. public
Answer: (d) Difficulty: (2) Page: 121
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20. All of the following are significant publics that affect an organization’s ability to
achieve its objectives EXCEPT:
a. charitable publics.
b. financial publics.
c. media publics.
d. citizen action publics.
Answer: (a) Difficulty: (3) Page: 121, 122, Figure 4-3
21. _____________ publics include workers, managers, volunteers, and the board of
directors of an organization.
a. General
b. Financial
c. Internal
d. Local
Answer: (c) Difficulty: (2) Page: 122
22. The Acme Corporation is considering building a plant in the inner city, and will have
to displace a seven block area of an old neighborhood. Which of the following
publics must be dealt with to make sure that the new construction can be successfully
accomplished with a minimum of difficulty? (Choose the most significant of the
choices offered.)
a. financial public
b. internal public
c. media public
d. local public
Answer: (d) Difficulty: (2) Page: 122
23. All of the following are among the major forces considered to be in a company’s
macroenvironment EXCEPT:
a. demographic forces.
b. natural forces.
c. technological forces.
d. competitor forces.
Answer: (d) Difficulty: (2) Page: 122, 123, Figure 4-4
24. The study of human populations in terms of size, density, location, age, gender, race,
occupation, and other statistics is called:
a. geothermy.
b. demography.
c. ethnography.
d. hemos-popography.
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Answer: (b) Difficulty: (1) Page: 122
25. All of the following are areas that marketers in the United States track within the
demographic context EXCEPT:
a. package design changes.
b. changing age structures.
c. geographic population shifts.
d. the changing American family.
Answer: (a) Difficulty: (1) Page: 122, 123
26. The single most important demographic trend in the United States is:
a. the geographic shift in population.
b. the changing American family.
c. the changing age structure of the U.S. population.
d. the better-educated and more white-collar workforce.
Answer: (c) Difficulty: (3) Page: 123
27. According to the latest research by American Demographics done in October 2000,
Baby Boomers account for which of the following percentages of the total U.S.
population?
a. 16.4 percent
b. 25.8 percent
c. 28.2 percent
d. 37.2 percent
Answer: (c) Difficulty: (3) Page: 123, Figure 4-5
28. There was a major increase in the annual birthrate in the United States following
World War II. This increase lasted until the 1960s. The people born during this
time period were called:
a. birth dearth.
b. baby busters.
c. Generation X.
d. baby boomers.
Answer: (d) Difficulty: (1) Page: 124
29. All of the following would be among the lucrative markets that appeal to the baby
boomer market EXCEPT: (Choose the least likely.)
a. financial services.
b. travel and entertainment.
c. computers.
d. high-priced cars.
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Answer: (c) Difficulty: (2) Page: 125
30. Author Douglas Coupland called the generation that followed the baby boomers
___________ because they lie in the shadow of the boomers, and lack obvious
distinguishing characteristics.
a. Generation Y
b. Generation X
c. Generation D
d. Yuppies
Answer: (b) Difficulty: (2) Page: 125
31. Generation Xers are given that name because:
a. they hate police and all forms of authority.
b. they lie in the shadow of the boomers and lack obvious distinguishing
characteristics.
c. they are yuppies and dinks.
d. they believe in Malcolm X as a hero figure.
Answer: (b) Difficulty: (2) Page: 125
32. Which of the following generations was once labeled the MTV generation?
a. Baby boomers
b. Generation X
c. Generation Y
d. Generation D
Answer: (b) Difficulty: (2) Page: 125
33. Another name for Generation Y is the:
a. MTV generation.
b. War babies.
c. Shadow generation.
d. Echo boomers.
Answer: (d) Difficulty: (3) Page: 126
34. Which of the following generations has grown up with the Internet, mobile
communications, and video games?
a. Baby boomers
b. Generation X
c. Generation Y
d. Generation W
Answer: (c) Difficulty: (2) Page: 127
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35. The increase in working women, people marrying later and having fewer children,
and the number of nonfamily households increasing coincides with which of the
following trends?
a. the changing age structure of the population
b. the changing American family
c. increasing diversity
d. a better-educated and more white-collar population
Answer: (b) Difficulty: (1) Page: 127
36. _____________ areas are small cities located beyond congested areas found in larger
cites. They offer many lifestyle advantages for today’s urban commuter.
a. Metropolitan
b. Telecommute
c. Micropolitan
d. SOHO
Answer: (c) Difficulty: (2) Page: 128
37. The U.S. population is becoming better educated. As an example, in 2000,
________ of the population had completed high school and 26 percent had completed
college.
a. 84 percent
b. 75 percent
c. 90 percent
d. 96 percent
Answer: (a) Difficulty: (3) Page: 129
38. Marketers are facing increasingly diverse markets, both at home and abroad. The
_________ market has been ignored in the past, despite the fact that with 54 million
people in this market, it is larger than the African American or Hispanic markets.
a. gay and lesbian
b. India/Pakistan
c. disabilities
d. infant
Answer: (c) Difficulty: (3) Page: 131-133, Marketing at Work 132
39. Factors that affect consumer purchasing power and spending patterns make up the
______________ environment.
a. demographic
b. economic
c. natural
d. technological
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Answer: (b) Difficulty: (1) Page: 131
40. Marketers pay close attention to income distribution as well as average income.
Which of the following groups usually must stick close to the basics of food, clothing,
and shelter, and must try hard to save?
a. the comfortable middle class
b. the working class
c. the upper-class
d. the under-class
Answer: (b) Difficulty: (2) Page: 134
41. According to Engel’s laws, as income rises:
a. the percentage spent on food rises.
b. the percentage spent on housing increases.
c. the percentage spent on other categories increases.
d. the percentage spent on savings remains constant.
Answer: (c) Difficulty: (3) Page: 134
42. According to Engle’s laws, as income rises:
a. the percentage spent on food declines.
b. the percentage spent on housing increases.
c. the percentage spent on other categories decreases.
d. the percentage spent on savings remains constant.
Answer: (a) Difficulty: (2) Page: 134
43. Concern that resources such as forests and food be used wisely is an outgrowth of
which trend in the natural environment?
a. the shortage of raw materials
b. the rapid pace of technological change
c. the increased cost of energy
d. increased pollution
Answer: (a) Difficulty: (1) Page: 136
44. 3M runs a Pollution Prevention Pays program that has led to a substantial
reduction in pollution and costs. This would be an example of responding to which
of the following?
a. Nader’s raiders
b. the “green movement”
c. governmental regulation
d. international competition
Answer: (b) Difficulty: (2) Page: 137
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45. According to the text, the most dramatic of the environments that affects marketing
and shapes our world today is the ________________ environment.
a. natural
b. demographic
c. economic
d. technological
Answer: (d) Difficulty: (2) Page: 137
46. Which of the following countries leads the world in research and development
spending?
a. Japan
b. Germany
c. United States
d. England
Answer: (c) Difficulty: (1) Page: 138
47. The set of laws and regulations that guides commerce and that limits business for the
good of society as a whole is called:
a. public policy.
b. consumer protection.
c. public interest group action.
d. social responsibility.
Answer: (a) Difficulty: (2) Page: 138
48. The ____________________ prohibits monopolies and activities (such as price fixing
and predatory pricing) which restrain trade or competition in interstate commerce.
a. Sherman Antitrust Act (1890)
b. Clayton Act (1914)
c. Federal Trade Commission Act (1914)
d. Robinson-Patman Act (1936)
Answer: (a) Difficulty: (2) Page: 139, Table 4-2
49. The __________________ supplements the Sherman Act by prohibiting certain types
of price discrimination, exclusive dealing, and tying clauses (which require a dealer to
take additional products in a seller’s line).
a. Federal Food and Drug Act (1906)
b. Clayton Act (1914)
c. Federal Trade Commission Act (1914)
d. Robinson-Patman Act (1936)
Answer: (b) Difficulty: (2) Page: 139, Table 4-2
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50. The ___________________ amends the Clayton Act to define price discrimination
as unlawful. It empowers the FTC to establish limits on quantity discounts, forbid
some brokerage allowances, and prohibit promotional allowances except when made
available on proportionately equal terms.
a. Sherman Antitrust Act (1890)
b. Federal Food and Drug Act (1906)
c. Federal Trade Commission Act (1914)
d. Robinson-Patman Act (1936)
Answer: (d) Difficulty: (3) Page: 139, Table 4-2
51. Laws that prevent companies from neutralizing competition reflect which reason for
the existence of legislation affecting business?
a. to protect companies from each other
b. to protect consumers from unfair business practices
c. to protect the interests of society
d. to protect businesses from unfair consumer demands
Answer: (a) Difficulty: (2) Page: 140
52. Laws that require truth in advertising and prohibit deceptive packaging reflect which
reason for government legislation of business?
a. to protect companies from each other
b. to protect consumers from unfair business practices
c. to protect the interests of society
d. to protect businesses from unfair consumer demands
Answer: (b) Difficulty: (2) Page: 140
53. Regulations that arise to ensure that firms take responsibility for the social costs of
their products or production processes stem from which reason for government
legislation of business?
a. to protect companies from each other
b. to protect consumers from unfair business practices
c. to protect the interests of society
d. to protect businesses from unfair consumer demands
Answer: (c) Difficulty: (2) Page: 140
54. Enlightened companies encourage their managers to:
a. look beyond what the regulation system allows and simply “do the right thing.”
b. always measure bottom line profit against social gain.
c. look to the regulation system as a benchmark that should not be exceeded.
d. to embrace the policy of caveat emptor (let the buyer beware).
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Answer: (a) Difficulty: (2) Page: 141
55. The _________________ environment contains institutions and other forces that
affect society’s basic values, perceptions, preferences, and behaviors.
a. natural
b. business
c. cultural
d. consumer
Answer: (c) Difficulty: (1) Page: 141
56. ______________ beliefs and values are passed on from parents to children and are
reinforced by schools, churches, business, and government.
a. Crucial
b. Core
c. Primary
d. Secondary
Answer: (b) Difficulty: (2) Page: 141
57. ______________ beliefs and values are open to some degree of change.
a. Crucial
b. Core
c. Primary
d. Secondary
Answer: (d) Difficulty: (1) Page: 141
58. Believing that you should dress the way your favorite musical group dresses would be
an illustration of which type of belief or value?
a. crucial
b. core
c. primary
d. secondary
Answer: (d) Difficulty: (3) Page: 141
59. Most Americans believe in being honest. This would be an example of which of the
following types of beliefs or values?
a. crucial
b. core
c. primary
d. secondary
Answer: (b) Difficulty: (2) Page: 141, 143
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60. According to the Yankelovich Monitor report, all of the following would be among
the major consumer themes as we head into the 2000s EXCEPT:
a. paradox.
b. group above all else.
c. trust not.
d. no sacrifices.
Answer: (b) Difficulty: (3) Page: 144
61. That people use products, brands, and services as a means of self-expression reflects
which aspect of the cultural environment?
a. people’s view of others
b. people’s view of themselves
c. people’s view of organizations
d. people’s view of nature
Answer: (b) Difficulty: (2) Page: 144
62. Companies have recently recognized that “Spirituality is in.” This recognition and
the corresponding marketing strategy built around it is a reflection of which of the
following views?
a. people’s view of others
b. people’s view of themselves
c. people’s view of the universe
d. people’s view of nature
Answer: (c) Difficulty: (3) Page: 145
63. A management perspective in which the firm takes aggressive actions to affect the
publics and forces in its marketing environment rather than simply watching and
reacting to them is called a(n):
a. marketing management perspective.
b. global action perspective.
c. environmental management perspective.
d. public management perspective.
Answer: (c) Difficulty: (2) Page: 146
64. Whenever possible, smart marketing managers will take a _____________ rather
than ___________ approach to the marketing environment. (Choose the best
combination available.)
a. reactive/proactive
b. proactive/reactive
c. conciliatory/proactive
d. commanding/submissive
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Answer: (b) Difficulty: (2) Page: 146, Marketing at Work 4-4
TRUE/FALSE QUESTIONS
65. The microenvironment is the actors and forces outside marketing that affect
marketing management’s ability to develop and maintain successful transactions with
its target customers.
Answer: (False) Difficulty: (2) Page: 118
66. The microenvironment for most firms consists of the company itself, suppliers,
marketing channel firms, customer markets, competitors, and publics.
Answer: (True) Difficulty: (1) Page: 118
67. The macroenvironment for most firms consists of the company itself, suppliers,
marketing channel firms, customer markets, competitors, and publics.
Answer: (False) Difficulty: (1) Page: 118
68. Under the marketing concept, top management, finance, research and development,
purchasing, manufacturing, and accounting must “think consumer,” and they should
work in harmony to provide superior customer value and satisfaction.
Answer: (True) Difficulty: (1) Page: 119
69. Suppliers are firms and individuals that provide the resources needed by the company
to produce its goods and services.
Answer: (True) Difficulty: (2) Page: 119
70. A good illustration of a marketing intermediary would be stock brokerage firm.
Answer: (False) Difficulty: (2) Page: 120
71. One of the important types of customer markets is the reseller market.
Answer: (True) Difficulty: (1) Page: 120, Figure 4-2
72. A competitor is any group that has an actual or potential interest in or impact on an
organization’s ability to achieve its objectives.
Answer: (False) Difficulty: (2) Page: 121
73. An example of an internal public would be a bank, investment house, or stock broker.
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Answer: (False) Difficulty: (2) Page: 121, 122
74. Workers, volunteers, managers, and the board of directors would be called a
company’s internal public.
Answer: (True) Difficulty: (1) Page: 122
75. Culture is the study of human populations in terms of size, density, location, age,
gender, race, occupation, and other statistics.
Answer: (False) Difficulty: (1) Page: 122
76. The single most important demographic trend in the United States is the changing
racial composite of the population, as evidenced by the growing number of African
Americans, Hispanics, and Asian Americans.
Answer: (False) Difficulty: (3) Page: 123
77. The generation born immediately following World War II was called the “baby
boomers.”
Answer: (True) Difficulty: (1) Page: 124
78. Generation Xers are defined as much by their shared experiences as by their age.
Answer: (True) Difficulty: (1) Page: 125
79. An accurate description of Generation X would be that they were born between
1977 and 1994.
Answer: (False) Difficulty: (1) Page: 126
80. The Asian American population currently stands at 12 percent of the total population
and is expected to pass the Hispanic Americans by the year 2040.
Answer: (False) Difficulty: (2) Page: 130
81. A disabled economy is characterized by the fact that they consume most of their own
agricultural and industrial output.
Answer: (False) Difficulty: (1) Page: 131
82. Many retirees fall into the underclass in the United States.
Answer: (True) Difficulty: (1) Page: 134
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83. A finding that as family income rises, the percentage spent on food declines would
be an example of one of Engel’s Laws.
Answer: (True) Difficulty: (2) Page: 134
84. If a company is pursuing a globally sustainable strategy, it is constructing strategy
and practices in an effort to create a world economy that the planet can support
indefinitely.
Answer: (False) Difficulty: (2) Page: 136, 137
85. The Wheeler-Lea Act of 1938 makes deceptive, misleading, and unfair marketing
practices illegal regardless of injury to competition.
Answer: (True) Difficulty: (2) Page: 139, Table 4-2
86. Secondary beliefs and values do not change often, are passed on from parents to
children, and are reinforced by schools, churches, business, and government.
Answer: (False) Difficulty: (2) Page: 141
87. Considering the eight major consumer themes of the early 2000s, “Everybody should
feel free to do his or her own thing” is an example of the theme of reciprocity is the
way to go.
Answer: (True) Difficulty: (2) Page: 144
88. Because of trends found in people’s views of themselves, a bright future seems to
be developing for products and services that serve basic needs and provide real
value rather than for those relying on glitz and hype.
Answer: (True) Difficulty: (2) Page: 144
89. An example of a firm that has an environmental management perspective would be
one that hires a lobbyist to influence legislation affecting their industry.
Answer: (True) Difficulty: (2) Page: 146
ESSAY QUESTIONS
90. As we hurdle into the new millennium, social experts are busy assessing the impact of
a host of environmental forces on consumers and the marketers who serve them. One of
these forces is called “millennial fever.” Describe what you perceive to be “millennial
fever,” and give at least three examples that would illustrate this condition.
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Answer:
As described in the text, “millennial fever” is the result of an old year turning into a new
year (and even the world itself turning) multiplied a thousand-fold. People seem to be
overworked, overstimulated, and overloaded. As one authority put it, “Americans are
overwhelmed...by the breathtaking onrush of the Information Age, with its high-speed
modems, cell phones, and pagers.” We hail change but are also scared of it. The result
of this “millennial fever” is a yearning to turn back the clock to simpler times (we wish to
return to these times because we are afraid of an uncertain future).
Students may use any of the examples found in the opening vignette, or construct their
own. They should be given some license for creativity unless guidelines are provided.
Some suggested answers could be focused on any of the following nostalgic illustrations:
a). Kellogg has revived an old Corn Flakes package.
b). Old styles of cars are being reintroduced—Porsche’s Boxer.
c). Old songs are coming back—James Brown’s I Feel Good.
d). Volkswagen has reintroduced the Beetle—a new Bug for a new millennium.
Difficulty: (2) Page: 115-118
91. Define and then briefly describe the component parts of the two major environmental
forces that affect the company’s ability to serve its customers.
Answer:
The first major component is the microenvironment. The microenvironment is defined as
being the forces close to the company that affect its ability to serve its customers. These
forces would then include the company itself, suppliers, marketing channel firms,
customer markets, competitors, and publics.
The second major component is the macroenvironment. The macroenvironment is
defined as being the larger social forces that affect the microenvironment. These forces
would be the demographic, economic, natural, technological, political, and cultural
forces.
Difficulty: (2) Page: 118 and associated text material
92. What are the components of a company’s internal environment?
Answer:
A company’s internal environment consists of top management, finance, R&D,
purchasing, manufacturing, and accounting. Together all of these departments or areas
have an impact on the marketing department’s plans and actions.
Difficulty: (1) Page: 119, Figure 4-1
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93. List and briefly characterize the various types of customer markets described in the
text.
Answer:
a). Consumer markets—consist of individuals and households that buy goods and
services for personal consumption.
b). Business markets—buy goods and services for further processing or for use in their
production process.
c). Reseller markets—buy goods and services to resell at a profit.
d). Government markets—are made up of government agencies that buy goods and
services to produce public services, or transfer the goods and services to others who need
them.
e). International markets—consist of these buyers in other countries, including
consumers, producers, resellers, and governments.
Difficulty: (2) Page: 120, Figure 4-2
94. List, give an example, and then briefly identify the seven publics that impact an
organization’s ability to achieve its objectives.
Answer:
a). Financial publics—influence the company’s ability to obtain funds. EX. a bank
b). Media publics—carry news, features, and editorial opinions. EX. newspapers
c). Government publics—the various government entities that affect the operation of the
firm and its relationship with its environments. EX. product safety regulatory
agencies
d). Citizen-action publics—a company’s marketing decisions may be questioned by
various groups within the general or national community. EX. environmental
watchdog groups
e). Local publics—a company’s marketing decisions may be questioned or impacted by
various groups within the “neighborhood.” EX. neighborhood residents
f). General public—a company needs to be concerned about the general public’s
attitude toward its products and activities. EX. perception by senior citizens
g). Internal publics—this group includes workers, managers, volunteers, and the board of
directors. EX. top management
Difficulty: (2) Page: 121, 122, Figure 4-3
95. Explain the effect of changes in the demographic and economic environments on
marketing management decisions. Be sure to identify specific trends.
Answer:
Changes in the demographic environment that affect marketing decisions are the
changing age structure of the U.S. population (often identified as the chief trend), the
changing American family role and structure (about one-half of all families will be
nonfamily units or single-parent families by 2000), geographic shifts in population
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(primarily moving to the Sunbelt), a better educated and more white collar workforce,
and increasing ethnic and racial diversity (especially the rise of Hispanic and Asian
Americans).
Economic trends include changes in income and income distribution, and changes in
consumer spending patterns. Americans are becoming more conservative in their
spending patterns and are demanding value. The economy is doing well, but that does
not mean that everyone in the economy is doing well. Those that have retrained in high
technology are prospering and those that stayed in rust-belt manufacturing jobs are not.
To succeed in the future, education will be critical. Value marketing will become
increasingly important for the successful marketer.
Difficulty: (2) Page: 122-131 and 131-137
96. Characterize the baby boomers, Generation X, and Generation Y. Be specific in your
comments and characterizations.
Answer:
a). Baby boomers (born between 1946 and 1964) are now moving into middle age. They
are 78 million strong. They account for 28 percent of the population but one half of all
personal income. Baby boomers cut across all walks of life, though marketers have paid
the most attention to the upper crust of this group. They are reaching their peak in
earnings and spending. They constitute a lucrative market for new housing and home
remodeling, financial services, travel and entertainment, eating out, health and fitness
products, and high-priced cars and other luxuries.
b). Generation X (born between 1965 and 1976) lie in the shadow of the boomers and
lack obvious distinguishing characteristics. They are defined as much by their
experiences as by their age. There are increasing divorce rates and unemployment for
this group. They are more cynical and purchase all forms of products. However, their
cynicism makes them more savvy shoppers. They like lower prices and a more
functional look. They have been labeled the MTV generation.
c). Generation Y (born between 1977 and 1994) are 72 million strong. They are the
large and growing kid market that is very technologically savvy. They are fluent with the
Internet, computers, and digital technology. They will eventually rival the other two
generations in spending power and earnings.
Difficulty: (3) Page: 124-127
97. List and briefly discuss the trends that are currently affecting the natural environment.
Answer:
a). growing shortages of raw materials
b). increased pollution
c). increased government intervention
Some students may also describe a fourth implied trend:
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d). a movement toward environmentally sustainable strategies and practices
Difficulty: (2) Page: 136 and associated text material
98. List and discuss the reasons that business legislation has been enacted. Give an
illustration of each reason.
Answer:
The first is to protect companies from each other. Although business executives may
praise competition, they sometimes try to neutralize it when it threatens them. Therefore,
laws are passed to define and prevent unfair competition. In the United States, such laws
are enforced by the Federal Trade Commission and the Antitrust Division of the Attorney
General’s office.
The second purpose of government regulation is to protect consumers from unfair
business practices. Some firms, if left alone, would make shoddy products, tell lies in
advertising, and deceive consumers through their packaging and pricing. Unfair business
practices have been defined and are enforced by various agencies.
The third purpose of government regulation is to protect the interests of society against
unrestrained business behavior. Profitable business activity does not always create a
better quality of life. Regulation arises to ensure that firms take responsibility for the
social costs of their production or products.
Difficulty: (3) Page: 140
99. The Yankelovich Monitor has tracked consumer trends for years. It has identified
eight major consumer themes. List these and briefly comment on or give an example of
each.
Answer:
a). Paradox—people agree that “Life is getting better and worse at the same time.”
b). Trust not—confidence in many areas drops sharply (doctors for example).
c). Go it alone—more people now rely on themselves.
d). Smarts really count—trust intelligence and knowing.
e). No sacrifices—looks are important but not at any price.
f). Stress hard to beat—get lots of rest to beat stress.
g). Reciprocity is the way to go—everybody should feel free to do his or her own thing.
h). Me.2—live in a world built by me, not by you.
Difficulty: (3) Page: 143, 144
100. How are the major cultural values of a society expressed? The text stresses people’s
views in several areas. List and briefly describe each of these “people’s views.”
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Answer:
a). People’s views of themselves. People vary in their emphasis on serving themselves
versus serving others.
b). People’s views of others. There seems to be a shift from a “me society” to a “we
society.”
c). People’s views of organizations. By and large, people are willing to work for
organizations and expect them, in turn, to carry out society’s work.
d). People’s views of society. People’s views vary, however, their orientation to their
society influences their consumption patterns, levels of savings, and attitudes toward the
marketplace.
e). People’s views of nature. A long-term trend has been people’s growing mastery over
nature through technology and the belief that nature is bountiful.
f). People’s views of the universe. There is an increasing trend towards spirituality.
Difficulty: (3) Page: 144, 145
APPLICATION QUESTION
101. The demographic environment is of major interest to marketers because it involves
people, and people make up markets. Analysts predict that one of the most important
markets in the future will be the female market. With more women working, assuming
leadership roles in business, science, and industry, and exploring horizons that were at
one time closed to them, the opportunity to market aggressively to them would seem to
be good. One avenue for doing this is on the Internet. Assume that you have just been
made managing director of a new Web site developed for women. Your site is intended
to compete with www.iVillage.com, www.oxygen.com, and www.women.com. If you
were interested in attracting corporate sponsors to your site, what issues would you
feature on your site, and what would you propose to make your site unique? Remember
to be specific in your suggestions and explain the rationale behind your suggestions.
Instructors’ Note: This question may be assigned in advance, given as a take-home
assignment, or given as an interactive learning project to explore the Internet. The
instructor may alter the directions in any way that is appropriate. Depending on the
coverage of women’s issues in class, additional information may be necessary to enhance
the students’ ability to successfully answer this question. Suggestions for discussion
follow.
Answer:
Students should think carefully about the trends described in the chapter as a means to
building a Web site. Consider the following issues:
a). the gentrification of America—we are becoming older
b). the slowdown in the birthrate—however, pregnancy issues would still be important
with women
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c). generation specific data for women—see Baby Boomers, Generation X, and
Generation Y discussion
d). singleness and family issues—marrying later and having fewer children
e). working women
f). career women
g). housewives and house managers
h). divorce and childbearing
i). financial matters
j). fads, fashions, and trends
k). diversity issues
l). legal matters
m). values and morals
n). hobbies—gardening, cooking, sewing, exercise, et cetera
Any of the above issues could be topics that might attract female attention. Note that
many of these topics are those covered on the three Web sites mentioned in the question.
The instructor should also note the number of corporate sponsors that have lined up to be
a part of the aforementioned Web sites. Consider the student suggestions carefully and
remember to require justification for their ideas and suggestions.
Difficulty: (3) Page: 122-131, 131-135
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