The Federal Trade Commission informed Tropicana that it would have to stop advertising that one of the benefits of "heart-healthy" Tropicana orange juice was to lower blood pressure. For Tropicana, this situation was a significant development in the:

a. economic environment.

b. social environment.

c. competitive environment.

d. internal company environment.

e. legal environment.

Answer: e. legal environment.

Many states have appointed or elected commissions that oversee the business practices of utilities and other industries that serve the public interest. For a company operating in one of these industries, dealing with this important state-level regulatory commission is an important element of the:

a. legal environment.

b. social environment.

c. monopoly environment.

d. technological environment.

e. corporate environment.

Answer: a. legal environment.

Chrysler announced that it would begin offering Bluetooth wireless technology as an option in some of its vehicles. The development of Bluetooth is a significant development in the:

a. technological environment.

b. legal environment.

c. corporate environment.

d. social environment.

e. personal environment.

Answer: a. technological environment.

Rising interest rates have slowed the housing market in the United States, slowing business for real estate developers, mortgage lenders, and construction firms. This is a trend in the:

a. competitive environment.

b. technological environment.

c. cultural environment.

d. economic environment.

e. legal environment.

Answer: d. economic environment.

Chris wants to open a family-oriented restaurant in a thriving suburban area. Chris thinks a sports-based theme and broad menu will be attractive to the large number of families in the area. However, national chain restaurants, such as Chili's, TGI Friday's, and Applebee's already draw large followings in the area. The existence of these chain restaurants is a significant:

a. competitive rival.

b. monopoly.

c. competitive barrier.

d. opportunity.

e. competitive environment.

Answer: c. competitive barrier.

A moderately-priced jewelry store is trying to differentiate itself from other jewelry stores. The store prices products somewhat lower than the super-premium jewelry stores, but offers better products and services than low-end jewelry stores provide. The market situation this store faces sounds most like:

a. pure competition.

b. monopoly.

c. oligopoly.

d. monopolistic competition.

e. oligopolistic competition

Answer: d. monopolistic competition.

The "product space" graph (perceptual map) resulting from a positioning study for shampoo shows a substantial target market that is currently served by only one product—"Exotic Balsam." Which of the following is a reasonable course of action for a competing manufacturer? Checking your knowledge

a. Develop a new product to compete with Exotic Balsam.

b. Look for an area on the map where there is a smaller target market that is not served by any current products.

c. Attempt to reposition a current product as an alternative to Exotic Balsam.

d. Do a broader analysis that includes an examination of customer needs and attitudes.

e. Any of the above might be reasonable, depending on the circumstances.

Answer: e. Any of the above might be reasonable, depending on the circumstances.

The pastor of a new church decides to start prospecting for new members. He focuses first on people who live within a mile radius of the church, and contacts them via mail and by visiting them door-to-door. He then moves on to people who live from one to two miles away from the church, then two to three miles away, and so on, up to a limit of ten miles away. The pastor appears to be focusing on a __________ segmenting dimension.

a. behavioral

b. demographic

c. benefit

d. geographic

e. relationship

Answer: d. geographic

A father taking his family of four on vacation was trying to make hotel reservations for a trip to Disney World. He first eliminated all hotels that were in excess of two miles from the main gate to Disney World. Then he focused exclusively on hotels offering suites so that his family would have more space. He eventually selected the Excelsior Hotel because he knew the hotel offered suites and a complementary breakfast. For him, the available of the complementary breakfast was a ______________ segmenting dimension.

a. qualifying

b. determining

c. differentiated

d. geographic

e. demographic

Answer: b. determining

A neighborhood restaurant in a diverse market area sought to appeal to a wide range of consumers by offering a menu with a few choices from each of several different styles of cuisine—American, Italian, Chinese, German, Thai, and Indian. Recently, the restaurant has lost sales to newer restaurants that offer many choices from a single style of cuisine. This example illustrates the danger of adopting a_______________ approach.

a. single target market

b. multiple target market

c. combined target market

d. structured target market

e. mixed-mode market

Answer: c. combined target market

An entrepreneurial teenager decides to start a new dog-walking business aimed at dog owners who have to leave their pets at home alone during regular working hours. The teenage develops a thorough description of the people in her target market and their needs. She then comes up with a general outline of the services she will offer, some price ranges, the geographic area she will serve, and some low-cost promotion ideas. What has she developed so far?

a. a marketing program

b. a marketing plan

c. a SWOT analysis

d. a marketing strategy

e. a differentiation and segmentation

Answer: d. a marketing strategy

A large consumer products company markets several different lines of products, with many individual products in each line. Each product has its own marketing plan. The company president wants to bring together all of the different marketing plans into a single integrated document that can become part of the company's strategic plan. It appears that the company president needs a:

a. marketing super-plan.

b. marketing program.

c. marketing strategy.

d. operational plan.

e. mass-marketing approach.

Answer: b. marketing program.

An electronics superstore sends a special coupon to its current customers offering them a special discount for purchases made during an upcoming week that occurs during a traditionally slow sales period. This is an example of:

a. market penetration.

b. market development.

c. product development.

d. diversification.

e. a breakthrough opportunity

Answer: a. market penetration.

A television network is trying to generate interest in a new television show in advance of its premiere. The network sends out press releases and makes the star of the new show available for guest appearances on TV and radio talk shows. The marketing mix variable involved here is:

a. product.

b. personnel.

c. place.

d. promotion.

e. price.

Answer: d. promotion.

General Motors is considering increasing the length of its bumper-to-bumper warranty on new vehicles from 3 years to 5 years. The marketing mix variable being considered here is:

a. product.

b. personnel.

c. place.

d. promotion.

e. price.

Answer: a. product.

A large metropolitan university has an established summer-school program that offers a wide variety of classes to its current students. To expand enrollment, the school started promoting its summer school to students who live in the area and are home for the summer, even though they attend other universities during the regular school year. This effort is an example of:

a. market penetration.

b. market development.

c. product development.

d. diversification.

e. a breakthrough opportunity.

Answer: b. market development.

A computer manufacturer is attempting to increase the customer value associated with purchases of its products. Which of the following might be a way to achieve this increase in value?

a. Reduce price.

b. Increase technical support for customers.

c. Increase warranty coverage.

d. Offer free shipping.

e. Any of the above, depending on the needs of the target market.

Answer: e. Any of the above, depending on the needs of the target market.

Which of the following statements, made by marketing managers, illustrates an understanding of the concept of customer value?

a. "It's more important to acquire new customers than to retain old ones."

b. "The only time it's really necessary to demonstrate superior customer value is right before the actual sale."

c. "My main concern is with meeting this month's sales quota—I'll worry about relationship building later."

d. "I might think my product is a good value, but what really counts is if the customer thinks it's a good value."

e. "Customer value really boils down to which product is the least expensive."

Answer: d. "I might think my product is a good value, but what really counts is if the customer thinks it's a good value."

A store that is popular with newlyweds runs a wedding gift registry. Five minutes before closing time on a Sunday, a young couple enters the store and wants to register—a process that usually takes 30 minutes or more. A sales associate advises the couple to come back when they have more time, even though a recent memo from the store's regional manager specifically instructed store personnel to stay after closing time to help such customers. Which key element of the marketing concept is the main problem area in this situation?

a. Customer need

b. Total company effort

c. Customer satisfaction

d. Marketing orientation

e. Product orientation

Answer: b. Total company effort

Customer types:

a. should be defined by identifying the buyer instead of the user

b. should be assigned a nickname that describes all potential types of customers

c. must always consider intermediaries even if they are not the final users

d. refers to the final customer or user of a product type

e. none of the above

Answer: d. refers to the final customer or user of a product type