CHAPTER 4

THE MARKETING ENVIRONMENT

MULTIPLE CHOICE QUESTIONS 1. ________ fever results from the convergence of a wide range of forces in the marketing environmentfrom 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 managements 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 customersthe 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 companys 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 environmentdemographic, 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 companys 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 companys 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 companys 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 companys 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 organizations 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 organizations 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 companys 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 todays 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 Engels 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 Engles 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. Naders 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 sellers 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 societys 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. peoples view of others b. peoples view of themselves c. peoples view of organizations d. peoples 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. peoples view of others b. peoples view of themselves c. peoples view of the universe d. peoples 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 managements 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 organizations 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 companys 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 Engels 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 peoples 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 reintroducedPorsches Boxer. c). Old songs are coming backJames Browns I Feel Good. d). Volkswagen has reintroduced the Beetlea 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 companys 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 companys internal environment? Answer: A companys 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 departments 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 marketsconsist of individuals and households that buy goods and services for personal consumption. b). Business marketsbuy goods and services for further processing or for use in their production process. c). Reseller marketsbuy goods and services to resell at a profit. d). Government marketsare 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 marketsconsist 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 organizations ability to achieve its objectives. Answer: a). Financial publicsinfluence the companys ability to obtain funds. EX. a bank b). Media publicscarry news, features, and editorial opinions. EX. newspapers c). Government publicsthe various government entities that affect the operation of the firm and its relationship with its environments. EX. product safety regulatory agencies d). Citizen-action publicsa companys marketing decisions may be questioned by various groups within the general or national community. EX. environmental watchdog groups e). Local publicsa companys marketing decisions may be questioned or impacted by various groups within the neighborhood. EX. neighborhood residents f). General publica company needs to be concerned about the general publics attitude toward its products and activities. EX. perception by senior citizens g). Internal publicsthis 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 Generals 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). Paradoxpeople agree that Life is getting better and worse at the same time. b). Trust notconfidence in many areas drops sharply (doctors for example). c). Go it alonemore people now rely on themselves. d). Smarts really counttrust intelligence and knowing. e). No sacrificeslooks are important but not at any price. f). Stress hard to beatget lots of rest to beat stress. g). Reciprocity is the way to goeverybody should feel free to do his or her own thing. h). Me.2live 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 peoples views in several areas. List and briefly describe each of these peoples views.

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Answer: a). Peoples views of themselves. People vary in their emphasis on serving themselves versus serving others. b). Peoples views of others. There seems to be a shift from a me society to a we society. c). Peoples views of organizations. By and large, people are willing to work for organizations and expect them, in turn, to carry out societys work. d). Peoples views of society. Peoples views vary, however, their orientation to their society influences their consumption patterns, levels of savings, and attitudes toward the marketplace. e). Peoples views of nature. A long-term trend has been peoples growing mastery over nature through technology and the belief that nature is bountiful. f). Peoples 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 womens 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 Americawe are becoming older b). the slowdown in the birthratehowever, pregnancy issues would still be important with women

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c). generation specific data for womensee Baby Boomers, Generation X, and Generation Y discussion d). singleness and family issuesmarrying 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). hobbiesgardening, 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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