Chapter 3
Student: ___________________________________________________________________________
1. When firms collect and synthesize information about their position with respect to their rivals, it is
called:
A. bid rigging.
B. exclusive dealing.
C. bait-and-switch.
D. generational cohort.
E. competitive intelligence.
2. A car manufacturing company is keenly monitoring the announced cuts or increases in the rival
companies' production volume, sales, and sales incentives. It uses this information to plan its own
marketing, pricing, and production strategies. This is an example of:
A. bid rigging.
B. exclusive dealing.
C. bait-and-switch.
D. generational cohort.
E. competitive intelligence.
3. Jordan Inc., an online retail firm, wanted to determine the development strategy of its rival
company. Tapping into some online discussion groups, Jordan came to know that its rival had
posted 20 job openings online. This move was indicative of the rival company's development
strategy. Which of the following is being used by Jordan to gather information about its rival firm's
strategy?
A. bid rigging
B. exclusive dealing
C. bait-and-switch
D. generational cohort
E. competitive intelligence
4. Which of the following refers to the visible nuances such as artifacts, behaviour, dress, symbols,
physical settings, ceremonies, language differences, colours and tastes, and food preferences?
A. Generational cohort
B. Country culture
C. Demographics
D. Political environment
E. Competitive intelligence
5. Which of the following refers to the way people in a particular country react to different cultural
rituals in accordance with their place of residence?
A. Competitive intelligence
B. Country culture
C. Demographics
D. Generational cohort
E. Regional subculture
6. Canadian national food includes poutine and butter tarts. Canada is the world's largest producer
of maple syrup. The music of Canada reflects the many influences that have shaped the country.
The official symbols of Canada include the maple leaf and the beaver. Which of the following best
exemplifies the given information?
A. Competitive intelligence
B. Country culture
C. Generational cohort
D. Demographics
E. Regional subculture
7. The fact that Canada is a nation with two official languages and that humour is an integral part of
its arts scene is an example of:
A. regional subculture.
B. country culture.
C. generational cohort.
D. competitive intelligence.
E. demographics.
8. Mary, Jane, and Brad were all born the year after World War II. Leisure time is a high priority for
them. They have an obsession with maintaining their youth and love rock ‘n' roll. They belong to
the generational cohort of:
A. baby boomers.
B. millenials.
C. seniors.
D. Generation X.
E. Generation Y.
9. Morgan Inc.'s clothing line has different divisions for children, tweens, and senior citizens. If
Morgan bases its production requirements primarily on the age group of its target audience, its
market segmentation is most likely to be relying on:
A. political environment.
B. social trends.
C. demographics.
D. technological advances.
E. culture.
10. Misha and Jenny are both 11 years old and spend their money mainly on food and drinks, digital
music players, cellphones, computers, and clothing. They are likely to belong to which cohort?
A. Tweens
B. Generation Y
C. Generation X
D. Baby boomers
E. Seniors
11. The characteristics of human populations and segments, especially those used to identify
consumer markets, such as age, gender, income, race, ethnicity, and education are summed up
by the term:
A. social trends.
B. culture.
C. demographics.
D. pyramid selling.
E. exclusive dealing.
12. Which of the following refers to a group of people of the same generation who typically have
similar purchase behaviours because they have shared experiences and are in the same stage of
life?
A. Generational cohort
B. Country culture
C. Competitive intelligence
D. Greener consumers
E. Ethnicity
13. Which of the following is true of the generational cohort of tweens?
A. Tweens include people between the ages of 13 and 32.
B. Tweens include people born after World War II who are between the ages of 48 and 66.
C. Tweens include people aged 65 and older.
D. Tweens include people aged 9 to 12 years.
E. Tweens include people between the ages of 36 and 47.
14. Which of the following is true of Generation X?
A. They are less likely to believe in advertising claims or what salespeople tell them.
B. They are more interested in status products than older generations.
C. They are more likely to enjoy greater prosperity than their parents.
D. They have little knowledge about products in the market.
E. They are more interested in shopping than their parents.
15. Bill is 40 years old. He is much less interested in status products than his parents and is less
likely to believe in advertising claims. He shares his characteristics with:
A. baby boomers.
B. Generation Y.
C. Generation X.
D. tweens.
E. seniors.
16. Jack is a 50-year-old resident of Texas. He is self-reliant and individualistic. While making
decisions about purchasing products, he lays more emphasis on quality than price. He shares his
characteristics with:
A. baby boomers.
B. Generation Y.
C. Generation X.
D. tweens.
E. seniors.
17. Which of the following statements is true of Generation Y?
A. They belong to the generational cohort of people born between 1972 and 1992 and the biggest
cohort since the original postwar baby boom.
B. They belong to the generational cohort of people born after World War II between 1946 and
1965.
C. They belong to the generational cohort of people aged 65 and older.
D. They belong to the generational cohort of people who are not quite teenagers but are not
young children either (ages 9 to 12).
E. They belong to the generational cohort of people between the ages of 36 and 47.
18. Which of the following statements is true of Generation X?
A. They belong to the generational cohort of people between the ages of 13 and 32 and the
biggest cohort since the original postwar baby boom.
B. They belong to the generational cohort of people born after World War II who are between the
ages of 48 and 66.
C. They belong to the generational cohort of people aged 65 and older.
D. They belong to the generational cohort of people who are not quite teenagers but are not
young children either.
E. They belong to the generational cohort of people born between 1966 and 1971.
19. Which of the following generational cohorts is also referred to as the echo boom generation?
A. Tweens
B. Generation Y
C. Generation X
D. Baby boomers
E. Seniors
20. Which of the following generational cohorts is also referred to as the first generation of latchkey
kids?
A. Tweens
B. Generation Y
C. Generation X
D. Baby boomers
E. Seniors
21. Latchkey kids are those children who:
A. were left orphaned after the death of their biological parents.
B. grew up in foster homes because of the inability of their parents to take care of them.
C. grew up in homes with a stepmother or a stepfather.
D. grew up in homes in which both parents worked.
E. grew up in single-parent homes.
22. Venus and Jake have been married for three years. Venus is 30 years old, and Jake is 28. They
are Internet and technology savvy. They use the Internet at work for personal reasons and expect
a healthy option at fast-food restaurants. They are likely to belong to which cohort?
A. Tweens
B. Generation Y
C. Generation X
D. Baby boomers
E. Seniors
23. Megan is 40 years old and heads an advertising firm. She grew up in a home in which both
parents worked. Although Megan possesses considerable spending power, she is much less
interested in shopping than her parents and is far more cynical, which tends to make her an
astute consumer. Megan takes a long vacation every summer and travels to different parts of the
world. She is likely to belong to which cohort?
A. Tweens
B. Generation Y
C. Generation X
D. Baby boomers
E. Seniors
24. Which of the following statements is true of baby boomers?
A. They belong to the generational cohort of people born between 1972 and 1992.
B. They belong to the generational cohort of people born between 1946 and 1965.
C. They belong to the generational cohort consisting of people aged 65 and older.
D. They belong to the generational cohort of people who are not quite teenagers but are not
young children either.
E. They belong to the generational cohort of people born between 1966 and 1971.
25. Joe is 65 years old. He is highly individualistic and invests in health and wellness products. He
loves to indulge in products and services that help him maintain his youth. Joe belongs to the
category of:
A. Gen X.
B. Gen Y.
C. tweens.
D. baby boomers.
E. seniors.
26. Which of the following statements is true of seniors?
A. They belong to the generational cohort of people between the ages of 13 and 32 and the
biggest cohort since the original postwar baby boom.
B. They belong to the generational cohort of people born after World War II who are between the
ages of 48 and 56.
C. They belong to the generational cohort consisting of people aged 65 and older.
D. They belong to the generational cohort of people who are not quite teenagers but are not
young children either.
E. They belong to the generational cohort of people between the ages of 36 and 47.
27. Which of the following is a characteristic of people belonging to the baby boomer generation?
A. They are individualistic.
B. They are workaholics.
C. They abhor youth, which they equate with immaturity.
D. They love pop.
E. They are gutted by a feeling of economic and psychological insecurity.
28. Nate, born in 1960, is very individualistic. He ensures he has enough leisure time to pursue his
interests. He is obsessed with maintaining his youth and loves rock ‘n' roll. If these traits are
typical of those of his generation, he is likely to belong to which cohort?
A. Tweens
B. Generation Y
C. Generation X
D. Baby boomers
E. Seniors
29. Diana is 66 years old. While shopping for products, she prefers to buy recognizable brands and is
extremely quality conscious. Diana also prefers to shop at convenient locations. Which of the
following generational cohorts does she belong to?
A. Tweens
B. Generation Y
C. Generation X
D. Baby boomers
E. Seniors
30. Which of the following statements is true of upper-class consumers?
A. Their family income is usually between $20,000 and $30,000.
B. They rely on assistance to cover their basic needs.
C. They primarily perform clerical jobs.
D. They tend to be careful about their spending and are often value conscious.
E. Their spending patterns are not influenced by economic conditions.
31. Which of the following statements is true of middle-class consumers?
A. Their family income is usually between $20,000 and $30,000.
B. They rely on assistance to cover their basic needs.
C. They have very high discretionary incomes and tend to purchase luxury items.
D. They tend to be careful about their spending and are often value-conscious.
E. Their spending patterns are not influenced by economic conditions.
32. Which of the following statements is true of working-class consumers?
A. Their family income is usually between $20,000 and $30,000.
B. They are more likely to be highly educated.
C. They are more likely to work in managerial and executive roles.
D. They have high discretionary incomes.
E. Their spending patterns are not influenced by economic conditions.
33. Which of the following statements is true of the income of Canadians?
A. Family income distribution in Canada is similar across its provinces.
B. Underclass Canadians are just above poverty.
C. The majority of the Canadians fall in the middle-class category.
D. The richest 20 percent of Canadians spend 5 or 6 times more than the poorest 20 percent of
Canadians.
E. Most families experienced real income growth after 1980, and their health care costs, property
taxes, and tuition bills have risen at a much slower rate than inflation.
34. Megan and John have been married for 10 years. Megan is the vice-president of a bank, and
John is an investment banker. They enjoy a combined income of more than $100,000. Megan
loves art. She buys paintings of renowned painters in auctions all over the world. Which of the
following categories do they belong to?
A. Underclass consumers
B. Upper-class consumers
C. Working-class consumers
D. Middle-class consumers
E. Lower-class consumers
35. Jack is a teacher and his wife, Meg, works as an assistant in a research laboratory. They have a
combined income of $68,000. They have a house on mortgage and take long vacations once
every four years. They are value conscious. Which of the following categories do they belong to?
A. Underclass consumers
B. Upper-class consumers
C. Working-class consumers
D. Middle-class consumers
E. Lower-class consumers
36. Bruce is a part-time janitor. Maria washes dishes in a restaurant. They have a combined income
of $30,000. They are barely able to make ends meet because they have three small children.
Which of the following categories do they belong to?
A. Underclass consumers
B. Upper-class consumers
C. Working-class consumers
D. Middle-class consumers
E. Upper-middle-class consumers
37. Philip lives with his wife Emma and four children in a rented single-room apartment. They live
below poverty and take aid of the social security provided by the government. Which of the
following categories do they belong to?
A. Underclass consumers
B. Upper-class consumers
C. Working-class consumers
D. Middle-class consumers
E. Lower-class consumers
38. Which of the following statements is true of the effect of changing gender roles in society on
marketers?
A. Absence of the role of father in commercials for children's goods
B. Increase in advertisements involving single mothers
C. Gender neutrality in the positioning of products
D. Discouraging the trend of transcending gender boundaries
E. Portraying women as more competent than men
39. Which of the following holds true for ethnic groups who have migrated to Canada?
A. Ethnic Canadians spend less than their white counterparts on big-ticket items such as cars,
clothing, and home furnishings.
B. South Asian and Chinese immigrants are typically young, educated, and wealthy.
C. Currently, less than 2 percent of all visible minorities in Canada are under 14 years.
D. Migrated ethnic groups account for nearly 10 percent of Canada's population growth.
E. Russians represent the fastest-growing ethnic group in Canada.
40. The two fastest-growing ethnic groups who have migrated to Canada are the:
A. Russians and the South Americans.
B. Europeans and the South Americans.
C. Arabs and the Africans.
D. Chinese and the South Asians.
E. Africans and the Europeans.
41. The fact that many of today's commercials for children's gear now include Dad interacting with the
kids and being involved in purchase decisions reflects:
A. that men earn more money than women.
B. the increasing generational gap in Canadian households.
C. the importance that marketers are giving to changing gender roles.
D. that higher levels of education lead to better jobs and higher incomes.
E. the change in the gender composition of a country.
42. Bill is part of a program that collects biodegradable material from domestic wastes. This material
is collected by the municipality and used to make compost for gardening. Which of the following
program best describes Bill's activity?
A. Bait-and-switch
B. Green washing
C. Carbon footprint
D. Bid rigging
E. Green bin
43. A hotel introduces eco-rooms that have energy-efficient mini-bars, organic bed linen, and napkins
made of recycled papers. They also advertise that their rooms are fitted with CFLs or LEDs to
conserve energy. This is an example of:
A. green bin.
B. green washing.
C. green marketing.
D. bid rigging.
E. bait-and-switch.
44. The strategic effort made by firms to supply customers with environmentally friendly merchandise
is called:
A. green bin.
B. green washing.
C. green marketing.
D. bid rigging.
E. bait-and-switch.
45. Which of the following programs encourages consumers to recycle their food and yard waste to
make compost for gardening?
A. Bid rigging
B. Green washing
C. Carbon footprint
D. Bait-and-switch
E. Green bin
46. PlusLight, a torch manufacturing company, releases high-intensity torches at incredibly low
prices. Within a year, it achieves market monopoly by driving away most of its competitors from
business. Which of the following practices did PlusLight engage in?
A. Predatory pricing
B. Price fixing
C. Price discrimination
D. Bid rigging
E. Resale price maintenance
47. Which of the following trends has increased the difficulty that marketers face when they try to
grab the attention of consumers?
A. Canadians have more time for leisure and to spend with family.
B. The attention of multitasking consumers is divided.
C. Consumers must choose what shows they want to watch from fewer programs.
D. Kids prefer to spend more time on physical sports than electronic gadgets.
E. Minority groups are getting more familiar with the English language.
48. Which of the following is used by retail firms to track an item from the moment it is manufactured,
through the distribution system, to the retail store, and into the hands of the final consumer?
A. RuBee
B. Radio frequency identification device
C. Biometrics
D. Resonant inductive coupling
E. Supranet
49. Mekong Airlines uses special technology to reduce the number of lost bags and make it easier to
reroute bags if passengers change their flight plans. Which of the following technologies does it
use to track passenger bags?
A. Resonant inductive coupling
B. Radio frequency identification device
C. Biometrics
D. Electrodynamic induction
E. Supranet
50. The persistent increase in the prices of goods and services is called:
A. deflation.
B. predatory prices.
C. inflation.
D. recession.
E. bid rigging.
51. When the value of the Canadian dollar increases by 20 percent against the major currencies in
the previous quarter and drops by around 30 percent in the current quarter, it is referred to as:
A. deflation.
B. foreign currency fluctuation.
C. inflation.
D. recession.
E. shoe leather cost.
52. In Germany, in 1923, prices doubled every two days, and workers were paid twice a day so they
could buy food and goods before prices rose again. The new payment system was in response to
the:
A. deflation.
B. foreign currency fluctuation.
C. inflation.
D. recession.
E. shoe leather cost.
53. Suppose C $1.00 was worth US $0.809, and after nine months, the Canadian dollar increased to
$1.50. This is an example of:
A. deflation.
B. foreign currency fluctuation.
C. inflation.
D. recession.
E. shoe leather cost.
54. A period of economic downturn when the economic growth of a country is negative for at least a
couple of consecutive quarters is called:
A. deflation.
B. foreign currency fluctuation.
C. inflation.
D. recession.
E. shoe leather cost.
55. Which of the following situations arises during a recession?
A. An increase in the stock market valuations
B. An increase in the rate of unemployment
C. An increase in business and consumer confidence
D. An increase in consumer spending
E. An increase in purchasing power
56. Which of the following is an impact of government regulations on marketers?
A. It drastically lessens the opportunity for marketers to sell more of their products.
B. It creates an uneven playing field for competition.
C. It contributes to the creation of legal irregularities in the market.
D. It increases the cost of compliance.
E. It promotes inflationary tendencies.
57. The pricing that is intended to drive competitors out of the market or keep competitors from
entering the market by fixing very low prices is called:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
58. A situation in which sellers collude to set prices in response to quotations for products is called:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
59. A situation in which incentives are offered to consumers to provide the names of other potential
consumers is called:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
60. A car sales showroom displays a basic car with a very low price tag. Once a customer is
interested, the salesperson persuades him or her to buy a more expensive model. This is an
example of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
61. Four companies quoted for and supplied paints to a massive housing reconstruction program.
There were 200 contracts distributed over 10 years. Each company won 25 percent of the
contract each year. This is an example of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
62. A software company released its web browser for free. As a result, other software companies
were forced to release their own web browser for free in order to stay in the market. This is an
example of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
63. A company sells a mattress, which is claimed to promote good health. It also convinces
customers to become part of a club where they receive commissions if they get other people to
join the club or buy mattresses. This is an example of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
64. Schemes in which salespersons are paid to recruit other salespeople, and each new salesperson
pays for the right to recruit other salespeople, with some of that money going to earlier recruiters
is called:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
65. A driving school charges more to teach women drivers. Its justification is that, even though the
lessons and methods are the same as used for men, they think they need to be more careful
when women are driving. This is an example of:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. referral selling.
E. resale price maintenance.
66. A hotel management institute develops a training program for students. The fee for the training
program is $1,000. The institute offers to share the training program with other colleges for a low
price. One of the terms of the contract is that the other colleges should not offer the program to
their students for less than $1,000. This is an example of:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. referral selling.
E. resale price maintenance.
67. Four companies dealing in dairy products admitted that they met to increase the price of their
common products together. Which of the following exemplifies the activity of these companies?
A. Price fixing
B. Price discrimination
C. Predatory pricing
D. Referral selling
E. Resale price maintenance
68. The fee to enter a music event is set at $100 for men and $50 for women. This is an example of:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. referral selling.
E. resale price maintenance.
69. A university publishes a journal, which is subscribed to by individuals and bookshops. The editors
have recommended $20 as the retail price. The university also maintains that the journal cannot
be sold at a discount. The university has threatened to cease the supply to any bookshop that
sells for less than the recommended retail price. This is an example of:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. referral selling.
E. resale price maintenance.
70. A country allows millions of extra barrels of oil into the market to push prices downward. This
squeezes smaller oil producers out of the market and expand the country's own market share.
This act could be termed:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. referral selling.
E. resale price maintenance.
71. An automobile company published an advertisement that said that prices for the latest model on
offer started at $10,000 with an interest rate of 10 percent. The ad showed the logo and picture of
a new model. When an interested customer spoke with the authorized dealer mentioned in the
ad, he was informed that the bargain price was only on the older model. This is an example of:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. misleading advertising.
E. resale price maintenance.
72. Kelly visited a computer store looking for a model listed at $600. The salesperson stated that this
model was out of stock and tried to sell her another model priced at $1,352. This is an example
of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral scheme.
E. pyramid sales.
73. Beck wanted to join a gym but was worried about the cost. The gym offered her a 100 percent
rebate on a one-year membership if she gave the gym the names and telephone numbers of five
of her friends. This is an example of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
74. A seller refusing to sell to other channel members unless that member agrees to buy solely from
that particular seller is termed:
A. price fixing.
B. exclusive dealing.
C. predatory pricing.
D. misleading advertising.
E. refusal to deal.
75. MediaTeq required its employees to send photocopies of a letter to 100 people. The letter
contained a list of 10 names and addresses. People were required to send $1 to the first 10
names on the list to join the MediaTeq club. After that, they had to place their names and
addresses at the bottom of the list, strike off the first 10 names, and send it to 100 other people.
This is an example of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
76. Brian devised a scheme and instructed his partner to submit sham price quotations from dormant
companies for a bulletproof-vest contract. The sham price quotations were submitted with
intentionally increased prices so that one company, a Kuwaiti general trading firm, would win the
contract at a lower price. The owner of the Kuwaiti general trading firm then authorized Brian to
negotiate and receive all funds related to the contract. This is an example of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral scheme.
E. pyramid selling.
Teal Electronics Inc. resells DVD players to retail stores for $300. Teal requires the retailers to
charge customers $350. Any retailer that charges less than $350 is in violation of its contract with
Teal. Therefore, all the retailers come together and decide that the DVD player should not be sold
below $350.
77. Which of the following is the marketing practice in which a company seeks to influence the price
at which a product is sold?
A. Price fixing
B. Price discrimination
C. Predatory pricing
D. Referral selling
E. Resale price maintenance
78. Who is liable for seeking to influence the price at which a product is sold?
A. Teal Electronics
B. The retail stores
C. The consumers
D. The DVD player manufacturer
E. Ochre Corp., Teal's primary retail client
79. Which of the following illegal marketing practices are the retailers primarily involved in?
A. Price fixing
B. Price discrimination
C. Predatory pricing
D. Referral selling
E. Resale price maintenance
Merge and Co. is a grocery chain designed to attract women. It finds that women constitute its
biggest buyers, and since more and more women are working and earning good incomes, they
are prone to indulging in a variety of foods. Also, to cater to the tastes of women belonging to
different ethnic groups, Merge and Co. has positioned a prominent international foods aisle,
which highlights Asian, West Indian, Middle Eastern, and Eastern European food products, before
the customers reach the central grocery aisles. The food displayed is in keeping with the latest
trend of promoting low-calorie, high-nutrition organic products.
80. Which of the following has prodded the grocery chain to exclusively cater to the needs of women
customers?
A. The government regulations that make it mandatory to do so
B. The pressure from groups fighting for women rights
C. The changing role of women in society
D. The social constraints that deter women from shopping in crowded areas
E. The pressure from male members of the community
81. The presence of food products from different parts of the world in a grocery chain symbolizes:
A. that culture is the same in all parts of the world.
B. the attempt to shut out smaller grocery stores.
C. environmental concern.
D. the growing trend of eating high-calorie, low-nutrition products.
E. variance in the ethnic composition of society.
82. The latest trend of promoting low-calorie, high-nutrition organic products is a(n):
A. social trend.
B. legal trend.
C. political trend.
D. cultural trend.
E. economic trend.
A company manufacturing mouthwash declared that the mouthwash could cure common ailments
such as colds, sore throats, and coughs. It also promised that it was a hair revitalizer and an
antiseptic cream for cuts, bruises, wounds, and stings. Tests by independent agencies found that
the product was as effective as warm water in treating colds.
83. The marketing practice being followed by the company is called:
A. bait-and-switch.
B. exclusive dealing.
C. pyramid selling.
D. referral selling.
E. misleading advertising.
84. The marketing practice used by the mouthwash company will be checked by the:
A. Competition Act.
B. Access to Information Act.
C. Canada Agricultural Product Standards Act.
D. Copyright Act.
E. Food and Drugs Act.
A table describing the marketing practices covered by the Competition Act
85. Kelly saw an advertisement of TV being sold half-price. When she visits a store to buy it, she is
told that she needs to buy a projector, as well, for the offer. Kelly is a victim of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
86. While Maria is dining at her favourite Mexican restaurant, she is offered a discount voucher of
$20 if she will provide the names and addresses of five friends who might also be interested in
Mexican food. This is an example of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
87. A retail store enters into an agreement to buy cheese from a large supplier. The retail store is
bound by this agreement and cannot buy cheese from local dairy farms although its prices are
lower. This is an example of:
A. exclusive dealing.
B. refusal to deal.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
88. Two airline companies enter into a secret pact to simultaneously increase their fuel surcharges.
As a result of the pact, fuel surcharges rose from $10 a ticket to more than $100 a fare. This is an
example of:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. referral selling.
E. resale price maintenance.
89. A coffee shop chain opens across the street from a locally owned coffee shop. The base
expenses for coffee and pastries are similar. However, the chain has corporate backing for
support and therefore makes a decision to radically lower prices. Thus, it succeeds in attracting
customers to its facility and eventually drives the local competitor out of business. This is an
example of:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. referral selling.
E. resale price maintenance.
90. A restaurant has two menus, one printed in English, and the other printed in the local language.
The prices on the English menu are double those on the other menu. The restaurant owners
believe that if a customer cannot read the local language, he must be a tourist and will pay more.
This is an example of:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. referral selling.
E. resale price maintenance.
91. Parties that work with the focal firm are its corporate partners.
True
False
92. Culture is defined as the shared meanings, beliefs, morals, values, and customs of a group of
people.
True
False
93. Demographics provide an easily understood "snapshot" of the typical consumer in a specific
target market.
True
False
94. Generation Xers are also called millennials or the "echo boom" generation.
True
False
95. Generation X's quest for youth, in both attitude and appearance, provides a massive market for
anti-aging products, cosmetics, pharmaceuticals, and biotechnology.
True
False
96. Food-related advertisements cannot be aired during children's programming.
True
False
97. Today, most Canadians have more time for leisure and to spend with family than they had
before.
True
False
98. Some marketers have responded to the challenge of getting consumers' attention by moving
some of their advertising expenditures from TV and print media to instant messaging and
Internet-based reviews and ads.
True
False
99. The relative ease with which consumers can use social media has increased the power of
consumers to affect a firm's marketing strategy.
True
False
100.If the interest rate goes down, consumers have an incentive to save more because they earn
more for loaning the bank their money.
True
False
101.In a recession, spending by both businesses and consumers is greatly increased.
True
False
102.Government regulation may help to create a level playing field for competition and set standards
for marketers to follow.
True
False
103.Price discrimination refers to sellers conspiring to set the price of a product, usually higher than it
would be in a free market.
True
False
104.Resale price maintenance refers to manufacturers or channel members trying to influence the
price at which the product is sold to subsequent purchasers.
True
False
105.Exclusive dealing refers to a seller refusing to sell to other channel members unless that member
agrees to buy exclusively from that particular seller.
True
False
106.Explain the concept of competitive intelligence.
107.Describe the shopping habits of the generational cohort, Generation X.
108.Describe the traits that baby boomers share.
109.Differentiate between upper-class consumers and middle-class consumers.
110.Describe the steps being taken by marketers to accommodate the expanding ethnic composition
of the Canadian population.
111.Explain the concept of green marketing.
112.Explain how the trend of green marketing helps companies that sell environmentally friendly
products.
113.Describe the trends that have increased the difficulty that marketers face when trying to gain the
attention of consumers.
114.Describe the negative and positive consequences for Canadian marketers of the rapid increase
in the exchange rate between the currencies of Canada and the United States.
115.Explain how government legislation protects consumers.
116.Kelly lives in Canada and is not quite a teenager but not a young child either. She and her friends
are going shopping this weekend. What shopping traits is Kelly most likely to exhibit?
117.Today, gender roles have been blurred. How does this shift in attitude and behaviour affect the
way many firms design and promote their products and services?
118.Cathy wants to open a grocery store in a community that has a large migrant population. What
steps does Cathy need to take to make her store successful among the local Canadians as well
as the different ethnic groups who have migrated to Canada?
119.Describe how advertising children's products, especially food products, has changed over the
years.
120.How do inflation, foreign currency fluctuations, interest rates, and recession affect a firm's ability
to market goods and services?
Chapter 3 Key
1.
When firms collect and synthesize information about their position with respect to their rivals, it
is called:
A. bid rigging.
B. exclusive dealing.
C. bait-and-switch.
D. generational cohort.
E. competitive intelligence.
Competitive intelligence (CI) is used by firms to collect and synthesize information about their
position with respect to their rivals; it enables companies to anticipate changes in the
marketplace rather than merely react to them.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #1
Learning Objective: 03-01 Outline how the factors in a firms microenvironment influence its marketing strategy.
Topic: 03-02 Competition
2.
A car manufacturing company is keenly monitoring the announced cuts or increases in the
rival companies' production volume, sales, and sales incentives. It uses this information to
plan its own marketing, pricing, and production strategies. This is an example of:
A. bid rigging.
B. exclusive dealing.
C. bait-and-switch.
D. generational cohort.
E. competitive intelligence.
Competitive intelligence (CI) is used by firms to collect and synthesize information about their
position with respect to their rivals; it enables companies to anticipate changes in the
marketplace rather than merely react to them.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #2
Learning Objective: 03-01 Outline how the factors in a firms microenvironment influence its marketing strategy.
Topic: 03-02 Competition
3.
Jordan Inc., an online retail firm, wanted to determine the development strategy of its rival
company. Tapping into some online discussion groups, Jordan came to know that its rival had
posted 20 job openings online. This move was indicative of the rival company's development
strategy. Which of the following is being used by Jordan to gather information about its rival
firm's strategy?
A. bid rigging
B. exclusive dealing
C. bait-and-switch
D. generational cohort
E. competitive intelligence
Competitive intelligence (CI) is used by firms to collect and synthesize information about their
position with respect to their rivals; it enables companies to anticipate changes in the
marketplace rather than merely react to them.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #3
Learning Objective: 03-01 Outline how the factors in a firms microenvironment influence its marketing strategy.
Topic: 03-02 Competition
4.
Which of the following refers to the visible nuances such as artifacts, behaviour, dress,
symbols, physical settings, ceremonies, language differences, colours and tastes, and food
preferences?
A. Generational cohort
B. Country culture
C. Demographics
D. Political environment
E. Competitive intelligence
The visible nuances of a country's culture, such as artifacts, behaviour, dress, symbols,
physical settings, ceremonies, language differences, colours and tastes, and food
preferences, are easy to spot. But the subtle aspects of culture generally are trickier to identify
and navigate.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #4
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-06 Country Culture
5.
Which of the following refers to the way people in a particular country react to different cultural
rituals in accordance with their place of residence?
A. Competitive intelligence
B. Country culture
C. Demographics
D. Generational cohort
E. Regional subculture
The region in which people live in a particular country affects the way they react to different
cultural rituals, or even how they refer to a particular product category. This concept is termed
"regional subculture."
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #5
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-07 Regional Subcultures
6.
Canadian national food includes poutine and butter tarts. Canada is the world's largest
producer of maple syrup. The music of Canada reflects the many influences that have shaped
the country. The official symbols of Canada include the maple leaf and the beaver. Which of
the following best exemplifies the given information?
A. Competitive intelligence
B. Country culture
C. Generational cohort
D. Demographics
E. Regional subculture
Country culture includes easy-to-spot visible nuances that are particular to a country, such as
dress, symbols, ceremonies, language, colours, and food preferences, and more subtle
aspects, which are trickier to identify.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #6
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-06 Country Culture
7.
The fact that Canada is a nation with two official languages and that humour is an integral part
of its arts scene is an example of:
A. regional subculture.
B. country culture.
C. generational cohort.
D. competitive intelligence.
E. demographics.
Country culture includes easy-to-spot visible nuances that are particular to a country, such as
dress, symbols, ceremonies, language, colours, and food preferences, and more subtle
aspects, which are trickier to identify.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #7
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-06 Country Culture
8.
Mary, Jane, and Brad were all born the year after World War II. Leisure time is a high priority
for them. They have an obsession with maintaining their youth and love rock ‘n' roll. They
belong to the generational cohort of:
A. baby boomers.
B. millenials.
C. seniors.
D. Generation X.
E. Generation Y.
After World War II, the birth rate in Canada rose sharply, resulting in a group known as the
baby boomers. They are individualistic. Their leisure time is highly prioritized. They maintain
their youth and love rock ‘n' roll.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #8
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
9.
Morgan Inc.'s clothing line has different divisions for children, tweens, and senior citizens. If
Morgan bases its production requirements primarily on the age group of its target audience, its
market segmentation is most likely to be relying on:
A. political environment.
B. social trends.
C. demographics.
D. technological advances.
E. culture.
Demographics indicate the characteristics of human populations and segments, especially
those used to identify consumer markets, such as age, gender, income, race, ethnicity, and
education.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #9
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-08 Demographics
10.
Misha and Jenny are both 11 years old and spend their money mainly on food and drinks,
digital music players, cellphones, computers, and clothing. They are likely to belong to which
cohort?
A. Tweens
B. Generation Y
C. Generation X
D. Baby boomers
E. Seniors
Tweens—not quite teenagers but not young children either—sit in between. In Canada,
tweens spend their money mainly on food and drinks, electronics (gaming consoles and
games, digital music players, cellphones, and computers) and clothing.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #10
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
11.
The characteristics of human populations and segments, especially those used to identify
consumer markets, such as age, gender, income, race, ethnicity, and education are summed
up by the term:
A. social trends.
B. culture.
C. demographics.
D. pyramid selling.
E. exclusive dealing.
Demographics indicate the characteristics of human populations and segments, especially
those used to identify consumer markets, such as age, gender, income, race, ethnicity, and
education.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #11
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-08 Demographics
12.
Which of the following refers to a group of people of the same generation who typically have
similar purchase behaviours because they have shared experiences and are in the same
stage of life?
A. Generational cohort
B. Country culture
C. Competitive intelligence
D. Greener consumers
E. Ethnicity
A group of people of the same generation, generational cohorts, have similar purchase
behaviours because they have shared experiences and are in the same stage of life. For
instance, baby boomers, made up of people born between 1946 and1965, and Gen Xers,
people born between 1966 and 1971, both gravitate toward products and services that foster a
casual lifestyle; however, they tend to do so for different reasons.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #12
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
13.
Which of the following is true of the generational cohort of tweens?
A. Tweens include people between the ages of 13 and 32.
B. Tweens include people born after World War II who are between the ages of 48 and 66.
C. Tweens include people aged 65 and older.
D. Tweens include people aged 9 to 12 years.
E. Tweens include people between the ages of 36 and 47.
Tweens—not quite teenagers but not young children either—sit in between. Marketers feel the
tween effect in many areas, but particularly in the cellphone market.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #13
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
14.
Which of the following is true of Generation X?
A. They are less likely to believe in advertising claims or what salespeople tell them.
B. They are more interested in status products than older generations.
C. They are more likely to enjoy greater prosperity than their parents.
D. They have little knowledge about products in the market.
E. They are more interested in shopping than their parents.
Gen Xers possess considerable spending power because they tend to wait to get married and
buy houses later in life. However, they are unlikely to enjoy greater prosperity than their
parents. They're much less interested in shopping than their parents and are far more cynical,
which tends to make them astute consumers. They demand convenience and tend to be less
likely to believe advertising claims or what salespeople tell them.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #14
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
15.
Bill is 40 years old. He is much less interested in status products than his parents and is less
likely to believe in advertising claims. He shares his characteristics with:
A. baby boomers.
B. Generation Y.
C. Generation X.
D. tweens.
E. seniors.
Gen Xers possess considerable spending power because they tend to wait to get married and
buy houses later in life. They demand convenience and tend to be less likely to believe
advertising claims or what salespeople tell them. They are also much less interested in status
products than older generations, not because they can't afford luxury brands but because they
just don't see the point.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #15
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
16.
Jack is a 50-year-old resident of Texas. He is self-reliant and individualistic. While making
decisions about purchasing products, he lays more emphasis on quality than price. He shares
his characteristics with:
A. baby boomers.
B. Generation Y.
C. Generation X.
D. tweens.
E. seniors.
Baby boomers are individualistic. Retailers note that their older customers (baby boomers),
even those with moderate incomes, are more focused on quality than price.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #16
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
17.
Which of the following statements is true of Generation Y?
A. They belong to the generational cohort of people born between 1972 and 1992 and the
biggest cohort since the original postwar baby boom.
B. They belong to the generational cohort of people born after World War II between 1946 and
1965.
C. They belong to the generational cohort of people aged 65 and older.
D. They belong to the generational cohort of people who are not quite teenagers but are not
young children either (ages 9 to 12).
E. They belong to the generational cohort of people between the ages of 36 and 47.
Generation Y, also called millennials or the "echo boom" generation, represent just over 9
million Canadians, or about 27 percent of the population. This group also varies the most in
age, ranging from people in their 20s to people in their 40s who have started their own
families.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #17
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
18.
Which of the following statements is true of Generation X?
A. They belong to the generational cohort of people between the ages of 13 and 32 and the
biggest cohort since the original postwar baby boom.
B. They belong to the generational cohort of people born after World War II who are between
the ages of 48 and 66.
C. They belong to the generational cohort of people aged 65 and older.
D. They belong to the generational cohort of people who are not quite teenagers but are not
young children either.
E. They belong to the generational cohort of people born between 1966 and 1971.
Generation X includes people born between 1966 and 1971. This group represents more than
2.8 million Canadians, or about 8 percent of the Canadian population.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #18
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
19.
Which of the following generational cohorts is also referred to as the echo boom generation?
A. Tweens
B. Generation Y
C. Generation X
D. Baby boomers
E. Seniors
Generation Y, also called millennials or the "echo boom" generation, represent just over 9
million Canadians, or about 27 percent of the population.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #19
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
20.
Which of the following generational cohorts is also referred to as the first generation of
latchkey kids?
A. Tweens
B. Generation Y
C. Generation X
D. Baby boomers
E. Seniors
Unlike their baby boomer parents, Gen X is the first generation of latchkey kids (those who
grew up in homes in which both parents worked), and 50 percent of them have divorced
parents.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #20
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
21.
Latchkey kids are those children who:
A. were left orphaned after the death of their biological parents.
B. grew up in foster homes because of the inability of their parents to take care of them.
C. grew up in homes with a stepmother or a stepfather.
D. grew up in homes in which both parents worked.
E. grew up in single-parent homes.
Unlike their baby boomer parents, Gen X is the first generation of latchkey kids (those who
grew up in homes in which both parents worked), and 50 percent of them have divorced
parents.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #21
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
22.
Venus and Jake have been married for three years. Venus is 30 years old, and Jake is 28.
They are Internet and technology savvy. They use the Internet at work for personal reasons
and expect a healthy option at fast-food restaurants. They are likely to belong to which
cohort?
A. Tweens
B. Generation Y
C. Generation X
D. Baby boomers
E. Seniors
Regardless of where they live, members of Generation Y watch an hour less TV than an
average household, use the Internet at work for personal reasons, and expect a healthy option
at fast-food restaurants. Gen Yers are Internet and technology savvy and love digital
electronics such as cellphones, digital music players, digital cameras, and video games.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #22
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
23.
Megan is 40 years old and heads an advertising firm. She grew up in a home in which both
parents worked. Although Megan possesses considerable spending power, she is much less
interested in shopping than her parents and is far more cynical, which tends to make her an
astute consumer. Megan takes a long vacation every summer and travels to different parts of
the world. She is likely to belong to which cohort?
A. Tweens
B. Generation Y
C. Generation X
D. Baby boomers
E. Seniors
Generation X is the first generation of latchkey kids (those who grew up in homes in which
both parents worked). Gen Xers possesses considerable spending power because they tend
to wait to get married and buy houses later in life. However, they are unlikely to enjoy greater
prosperity than their parents. They're much less interested in shopping than their parents and
are far more cynical, which tends to make them astute consumers.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #23
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
24.
Which of the following statements is true of baby boomers?
A. They belong to the generational cohort of people born between 1972 and 1992.
B. They belong to the generational cohort of people born between 1946 and 1965.
C. They belong to the generational cohort consisting of people aged 65 and older.
D. They belong to the generational cohort of people who are not quite teenagers but are not
young children either.
E. They belong to the generational cohort of people born between 1966 and 1971.
After World War II, the birth rate in Canada rose sharply, resulting in a group known as the
baby boomers, who were born between 1946 and 1965. They are the largest cohort of
Canadians, representing 30 percent of the population.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #24
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
25.
Joe is 65 years old. He is highly individualistic and invests in health and wellness products. He
loves to indulge in products and services that help him maintain his youth. Joe belongs to the
category of:
A. Gen X.
B. Gen Y.
C. tweens.
D. baby boomers.
E. seniors.
After World War II, the birth rate in Canada rose sharply, resulting in a group known as the
baby boomers, who were born between 1946 and 1965. Baby boomers are individualistic.
They have an obsession with maintaining their youth.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #25
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
26.
Which of the following statements is true of seniors?
A. They belong to the generational cohort of people between the ages of 13 and 32 and the
biggest cohort since the original postwar baby boom.
B. They belong to the generational cohort of people born after World War II who are between
the ages of 48 and 56.
C. They belong to the generational cohort consisting of people aged 65 and older.
D. They belong to the generational cohort of people who are not quite teenagers but are not
young children either.
E. They belong to the generational cohort of people between the ages of 36 and 47.
Seniors are over the age of 65 and make up Canada's fastest-growing group. Between 2006
and 2011, the number of seniors in Canada grew from 4.3 million to nearly 5 million.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #26
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
27.
Which of the following is a characteristic of people belonging to the baby boomer generation?
A. They are individualistic.
B. They are workaholics.
C. They abhor youth, which they equate with immaturity.
D. They love pop.
E. They are gutted by a feeling of economic and psychological insecurity.
After World War II, the birth rate in Canada rose sharply, resulting in a group known as the
baby boomers, who were born between 1946 and 1965. They are individualistic.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #27
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
28.
Nate, born in 1960, is very individualistic. He ensures he has enough leisure time to pursue his
interests. He is obsessed with maintaining his youth and loves rock ‘n' roll. If these traits are
typical of those of his generation, he is likely to belong to which cohort?
A. Tweens
B. Generation Y
C. Generation X
D. Baby boomers
E. Seniors
Baby boomers are individualistic and have an obsession with maintaining their youth. Leisure
time is a high priority for them. They will always love rock ‘n' roll.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #28
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
29.
Diana is 66 years old. While shopping for products, she prefers to buy recognizable brands
and is extremely quality conscious. Diana also prefers to shop at convenient locations. Which
of the following generational cohorts does she belong to?
A. Tweens
B. Generation Y
C. Generation X
D. Baby boomers
E. Seniors
Seniors are over the age of 65 and make up Canada's fastest-growing group. They're typically
loyal and willing to spend but are extremely quality conscious and demand hassle-free
shopping, particularly in terms of convenient locations.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #29
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
30.
Which of the following statements is true of upper-class consumers?
A. Their family income is usually between $20,000 and $30,000.
B. They rely on assistance to cover their basic needs.
C. They primarily perform clerical jobs.
D. They tend to be careful about their spending and are often value conscious.
E. Their spending patterns are not influenced by economic conditions.
Upper-class consumers are very affluent, and their spending patterns are not influenced by
economic conditions.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #30
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-10 Income
31.
Which of the following statements is true of middle-class consumers?
A. Their family income is usually between $20,000 and $30,000.
B. They rely on assistance to cover their basic needs.
C. They have very high discretionary incomes and tend to purchase luxury items.
D. They tend to be careful about their spending and are often value-conscious.
E. Their spending patterns are not influenced by economic conditions.
Middle-class families can afford a good life most of the time. They tend to be careful about
their spending and are often value conscious.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #31
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-10 Income
32.
Which of the following statements is true of working-class consumers?
A. Their family income is usually between $20,000 and $30,000.
B. They are more likely to be highly educated.
C. They are more likely to work in managerial and executive roles.
D. They have high discretionary incomes.
E. Their spending patterns are not influenced by economic conditions.
Working-class, or low-income families, earn between $20,000 and $30,000, barely sufficient
income to cover their basic needs.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #32
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-10 Income
33.
Which of the following statements is true of the income of Canadians?
A. Family income distribution in Canada is similar across its provinces.
B. Underclass Canadians are just above poverty.
C. The majority of the Canadians fall in the middle-class category.
D. The richest 20 percent of Canadians spend 5 or 6 times more than the poorest 20 percent
of Canadians.
E. Most families experienced real income growth after 1980, and their health care costs,
property taxes, and tuition bills have risen at a much slower rate than inflation.
According to a report by Statistics Canada, the richest 20 percent of Canadians spend 5 or 6
times more in every shopping category than the poorest 20 percent of Canadians.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #33
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-10 Income
34.
Megan and John have been married for 10 years. Megan is the vice-president of a bank, and
John is an investment banker. They enjoy a combined income of more than $100,000. Megan
loves art. She buys paintings of renowned painters in auctions all over the world. Which of the
following categories do they belong to?
A. Underclass consumers
B. Upper-class consumers
C. Working-class consumers
D. Middle-class consumers
E. Lower-class consumers
Upper-class consumers are very affluent, and their spending patterns are not influenced by
economic conditions. They have high discretionary incomes and tend to purchase luxury
items. The top 10 percent of Canadians have family income in excess of $80,000.
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Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #34
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-10 Income
35.
Jack is a teacher and his wife, Meg, works as an assistant in a research laboratory. They have
a combined income of $68,000. They have a house on mortgage and take long vacations
once every four years. They are value conscious. Which of the following categories do they
belong to?
A. Underclass consumers
B. Upper-class consumers
C. Working-class consumers
D. Middle-class consumers
E. Lower-class consumers
Middle-class families earn between $30,000 and $70,000. They tend to be careful about their
spending and are often value conscious.
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Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #35
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-10 Income
36.
Bruce is a part-time janitor. Maria washes dishes in a restaurant. They have a combined
income of $30,000. They are barely able to make ends meet because they have three small
children. Which of the following categories do they belong to?
A. Underclass consumers
B. Upper-class consumers
C. Working-class consumers
D. Middle-class consumers
E. Upper-middle-class consumers
Working-class, or low-income families, earn between $20,000 and $30,000, barely sufficient
income to cover their basic needs.
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Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #36
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-10 Income
37.
Philip lives with his wife Emma and four children in a rented single-room apartment. They live
below poverty and take aid of the social security provided by the government. Which of the
following categories do they belong to?
A. Underclass consumers
B. Upper-class consumers
C. Working-class consumers
D. Middle-class consumers
E. Lower-class consumers
Canadians may be classified into distinct groups based on their income and other factors such
as background, education, and occupation: upper class, middle class, working class (or lowincome earners), and underclass (at or below poverty).
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Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #37
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-10 Income
38.
Which of the following statements is true of the effect of changing gender roles in society on
marketers?
A. Absence of the role of father in commercials for children's goods
B. Increase in advertisements involving single mothers
C. Gender neutrality in the positioning of products
D. Discouraging the trend of transcending gender boundaries
E. Portraying women as more competent than men
The shift in gender roles, attitude, and behaviour affects the way many firms design and
promote their products and services. For example, more firms are careful about gender
neutrality in positioning their products and, furthermore, attempt to transcend gender
boundaries whenever they can.
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Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #38
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-12 Gender
39.
Which of the following holds true for ethnic groups who have migrated to Canada?
A. Ethnic Canadians spend less than their white counterparts on big-ticket items such as cars,
clothing, and home furnishings.
B. South Asian and Chinese immigrants are typically young, educated, and wealthy.
C. Currently, less than 2 percent of all visible minorities in Canada are under 14 years.
D. Migrated ethnic groups account for nearly 10 percent of Canada's population growth.
E. Russians represent the fastest-growing ethnic group in Canada.
The two fastest-growing groups are the Chinese (from Hong Kong, mainland China, and
Taiwan) and South Asians (from India, Pakistan, Sri Lanka, and Bangladesh). The groups of
South Asians and Chinese are typically young, educated, and wealthy.
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Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #39
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-13 Ethnicity
40.
The two fastest-growing ethnic groups who have migrated to Canada are the:
A. Russians and the South Americans.
B. Europeans and the South Americans.
C. Arabs and the Africans.
D. Chinese and the South Asians.
E. Africans and the Europeans.
The two fastest-growing groups are the Chinese (from Hong Kong, mainland China, and
Taiwan) and South Asians (from India, Pakistan, Sri Lanka, and Bangladesh). The groups of
South Asians and Chinese are typically young, educated, and wealthy.
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Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #40
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-13 Ethnicity
41.
The fact that many of today's commercials for children's gear now include Dad interacting with
the kids and being involved in purchase decisions reflects:
A. that men earn more money than women.
B. the increasing generational gap in Canadian households.
C. the importance that marketers are giving to changing gender roles.
D. that higher levels of education lead to better jobs and higher incomes.
E. the change in the gender composition of a country.
The days of commercials that show Mom alone with the kids are over. To reflect changing
family roles, commercials for most children's gear now include Dad interacting with the kids
and being involved in purchase decisions.
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Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #41
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-12 Gender
42.
Bill is part of a program that collects biodegradable material from domestic wastes. This
material is collected by the municipality and used to make compost for gardening. Which of
the following program best describes Bill's activity?
A. Bait-and-switch
B. Green washing
C. Carbon footprint
D. Bid rigging
E. Green bin
A growing number of cities across Canada are introducing the "green bin" program that
encourages consumers to recycle their food and yard waste to make compost for gardening.
Initial results suggest that this program is hugely successful everywhere it has been
introduced.
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Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #42
Learning Objective: 03-03 Identify important social and natural trends that impact marketing decisions.
Topic: 03-18 Green Consumers
43.
A hotel introduces eco-rooms that have energy-efficient mini-bars, organic bed linen, and
napkins made of recycled papers. They also advertise that their rooms are fitted with CFLs or
LEDs to conserve energy. This is an example of:
A. green bin.
B. green washing.
C. green marketing.
D. bid rigging.
E. bait-and-switch.
Green marketing involves a strategic effort by firms to supply customers with environmentally
friendly merchandise. Although this "green" trend is not new, it is growing.
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Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #43
Learning Objective: 03-03 Identify important social and natural trends that impact marketing decisions.
Topic: 03-18 Green Consumers
44.
The strategic effort made by firms to supply customers with environmentally friendly
merchandise is called:
A. green bin.
B. green washing.
C. green marketing.
D. bid rigging.
E. bait-and-switch.
Green marketing involves a strategic effort by firms to supply customers with environmentally
friendly merchandise. Although this "green" trend is not new, it is growing.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #44
Learning Objective: 03-03 Identify important social and natural trends that impact marketing decisions.
Topic: 03-18 Green Consumers
45.
Which of the following programs encourages consumers to recycle their food and yard waste
to make compost for gardening?
A. Bid rigging
B. Green washing
C. Carbon footprint
D. Bait-and-switch
E. Green bin
A growing number of cities across Canada are introducing the "green bin" program that
encourages consumers to recycle their food and yard waste to make compost for gardening.
Initial results suggest that this program is hugely successful everywhere it has been
introduced.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #45
Learning Objective: 03-03 Identify important social and natural trends that impact marketing decisions.
Topic: 03-18 Green Consumers
46.
PlusLight, a torch manufacturing company, releases high-intensity torches at incredibly low
prices. Within a year, it achieves market monopoly by driving away most of its competitors
from business. Which of the following practices did PlusLight engage in?
A. Predatory pricing
B. Price fixing
C. Price discrimination
D. Bid rigging
E. Resale price maintenance
Pricing that is intended to drive competitors out of the market or keep competitors from
entering the market, usually low prices, is termed predatory pricing. The Competition Act has
laws to keep predatory pricing in check.
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Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #46
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
47.
Which of the following trends has increased the difficulty that marketers face when they try to
grab the attention of consumers?
A. Canadians have more time for leisure and to spend with family.
B. The attention of multitasking consumers is divided.
C. Consumers must choose what shows they want to watch from fewer programs.
D. Kids prefer to spend more time on physical sports than electronic gadgets.
E. Minority groups are getting more familiar with the English language.
Many consumers attempt to cope with their lack of leisure time by multitasking: watching TV or
listening to music while talking on the telephone or doing homework. Their divided attention
means they simply cannot focus as well on the advertisements that appear in those media.
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Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #47
Learning Objective: 03-03 Identify important social and natural trends that impact marketing decisions.
Topic: 03-21 The Time-Poor Society
48.
Which of the following is used by retail firms to track an item from the moment it is
manufactured, through the distribution system, to the retail store, and into the hands of the
final consumer?
A. RuBee
B. Radio frequency identification device
C. Biometrics
D. Resonant inductive coupling
E. Supranet
Firms use the technology called RFID (radio frequency identification device) to track an item
from the moment it is manufactured, through the distribution system, to the retail store, and
into the hands of the final consumer. Because they are able to determine exactly how much of
each product is at a given point in the supply chain, retailers can also communicate with their
suppliers and collaboratively plan to meet their inventory needs.
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Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #48
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-14 Technological Advances
49.
Mekong Airlines uses special technology to reduce the number of lost bags and make it easier
to reroute bags if passengers change their flight plans. Which of the following technologies
does it use to track passenger bags?
A. Resonant inductive coupling
B. Radio frequency identification device
C. Biometrics
D. Electrodynamic induction
E. Supranet
Firms use the technology called RFID (radio frequency identification device) to track an item
from the moment it was manufactured, through the distribution system, to the retail store, and
into the hands of the final consumer.
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Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #49
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-14 Technological Advances
50.
The persistent increase in the prices of goods and services is called:
A. deflation.
B. predatory prices.
C. inflation.
D. recession.
E. bid rigging.
Inflation refers to the persistent increase in the prices of goods and services. Increasing prices
cause the purchasing power of the dollar to decline; in other words, a dollar buys less than it
used to.
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Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #50
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-15 Economic Situation
51.
When the value of the Canadian dollar increases by 20 percent against the major currencies in
the previous quarter and drops by around 30 percent in the current quarter, it is referred to as:
A. deflation.
B. foreign currency fluctuation.
C. inflation.
D. recession.
E. shoe leather cost.
Foreign currency fluctuations refer to the changes in the value of a country's currency relative
to the currency of another country. Foreign currency fluctuations can influence consumer
spending.
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Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #51
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-15 Economic Situation
52.
In Germany, in 1923, prices doubled every two days, and workers were paid twice a day so
they could buy food and goods before prices rose again. The new payment system was in
response to the:
A. deflation.
B. foreign currency fluctuation.
C. inflation.
D. recession.
E. shoe leather cost.
Inflation refers to the persistent increase in the prices of goods and services. Increasing prices
cause the purchasing power of the dollar to decline; in other words, a dollar buys less than it
used to.
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Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #52
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-15 Economic Situation
53.
Suppose C $1.00 was worth US $0.809, and after nine months, the Canadian dollar increased
to $1.50. This is an example of:
A. deflation.
B. foreign currency fluctuation.
C. inflation.
D. recession.
E. shoe leather cost.
Foreign currency fluctuations refer to the changes in the value of a country's currency relative
to the currency of another country. Foreign currency fluctuations can influence consumer
spending. For instance, on January 21, 2007, C$1.00 was worth US$0.6179, the lowest
exchange rate ever between these two currencies. In less than four months, the value of the
Canadian dollar relative to the U.S. dollar increased to $0.907169—a 32 percent increase—
and by September the Canadian dollar increased to $1.10.
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Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #53
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-15 Economic Situation
54.
A period of economic downturn when the economic growth of a country is negative for at least
a couple of consecutive quarters is called:
A. deflation.
B. foreign currency fluctuation.
C. inflation.
D. recession.
E. shoe leather cost.
Recession is a period of economic downturn when the economic growth of the country is
negative for at least two consecutive quarters. In a recession, the stock market declines
sharply, unemployment increases, business and consumer confidence falls, and spending by
both businesses and consumers is severely reduced.
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Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #54
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-15 Economic Situation
55.
Which of the following situations arises during a recession?
A. An increase in the stock market valuations
B. An increase in the rate of unemployment
C. An increase in business and consumer confidence
D. An increase in consumer spending
E. An increase in purchasing power
Recession is a period of economic downturn when the economic growth of the country is
negative for at least two consecutive quarters. In a recession, the stock market declines
sharply, unemployment increases, business and consumer confidence falls, and spending by
both businesses and consumers is severely reduced.
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Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #55
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-15 Economic Situation
56.
Which of the following is an impact of government regulations on marketers?
A. It drastically lessens the opportunity for marketers to sell more of their products.
B. It creates an uneven playing field for competition.
C. It contributes to the creation of legal irregularities in the market.
D. It increases the cost of compliance.
E. It promotes inflationary tendencies.
Regulation may help to create a level playing field for competition and set standards for
marketers to follow. In other cases, regulation tends to increase the cost of compliance;
compliance usually requires more paperwork, time, effort, and money and may cause delays
when government approval is needed.
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Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #56
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
57.
The pricing that is intended to drive competitors out of the market or keep competitors from
entering the market by fixing very low prices is called:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
The pricing that is intended to drive competitors out of the market or keep competitors from
entering the market by fixing very low prices is called predatory pricing.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #57
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
58.
A situation in which sellers collude to set prices in response to quotations for products is
called:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
A situation in which sellers collude to set prices in response to bids or quotations for products
is called bid rigging.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #58
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
59.
A situation in which incentives are offered to consumers to provide the names of other
potential consumers is called:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
A situation in which incentives are offered to consumers to provide the names of other
potential consumers is called referral selling.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #59
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
60.
A car sales showroom displays a basic car with a very low price tag. Once a customer is
interested, the salesperson persuades him or her to buy a more expensive model. This is an
example of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
In bait-and-switch, sellers try to attract customers to their stores by offering a low price on a
product (bait) but, once the customers are in the store, sellers try to persuade them to buy a
higher-priced item (switch).
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Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #60
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
61.
Four companies quoted for and supplied paints to a massive housing reconstruction program.
There were 200 contracts distributed over 10 years. Each company won 25 percent of the
contract each year. This is an example of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
A situation in which sellers collude to set prices in response to bids or quotations for products
is called bid rigging.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #61
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
62.
A software company released its web browser for free. As a result, other software companies
were forced to release their own web browser for free in order to stay in the market. This is an
example of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
The pricing that is intended to drive competitors out of the market or keep competitors from
entering the market by fixing very low prices is called predatory pricing.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #62
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
63.
A company sells a mattress, which is claimed to promote good health. It also convinces
customers to become part of a club where they receive commissions if they get other people
to join the club or buy mattresses. This is an example of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
A situation in which incentives are offered to consumers to provide the names of other
potential consumers is called referral selling.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #63
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
64.
Schemes in which salespersons are paid to recruit other salespeople, and each new
salesperson pays for the right to recruit other salespeople, with some of that money going to
earlier recruiters is called:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
Schemes in which salespersons are paid to recruit other salespeople, and each new
salesperson pays for the right to recruit other salespeople, with some of that money going to
earlier recruiters, is called pyramid selling. Participants are often asked to buy a specific
quantity of goods or are knowingly sold unreasonable quantities of goods and are not allowed
to return the goods on commercially reasonable terms.
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Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #64
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
65.
A driving school charges more to teach women drivers. Its justification is that, even though the
lessons and methods are the same as used for men, they think they need to be more careful
when women are driving. This is an example of:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. referral selling.
E. resale price maintenance.
Charging different prices to different (competing) buyers for goods of the same quality and of
the same quantity is termed "price discrimination."
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #65
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
66.
A hotel management institute develops a training program for students. The fee for the training
program is $1,000. The institute offers to share the training program with other colleges for a
low price. One of the terms of the contract is that the other colleges should not offer the
program to their students for less than $1,000. This is an example of:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. referral selling.
E. resale price maintenance.
In price fixing, sellers conspire to set the price of a product, usually higher than it would be in a
free market.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #66
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
67.
Four companies dealing in dairy products admitted that they met to increase the price of their
common products together. Which of the following exemplifies the activity of these
companies?
A. Price fixing
B. Price discrimination
C. Predatory pricing
D. Referral selling
E. Resale price maintenance
In price fixing, sellers conspire to set the price of a product, usually higher than it would be in a
free market.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #67
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
68.
The fee to enter a music event is set at $100 for men and $50 for women. This is an example
of:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. referral selling.
E. resale price maintenance.
Charging different prices to different (competing) buyers for goods of the same quality and of
the same quantity is termed "price discrimination."
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #68
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
69.
A university publishes a journal, which is subscribed to by individuals and bookshops. The
editors have recommended $20 as the retail price. The university also maintains that the
journal cannot be sold at a discount. The university has threatened to cease the supply to any
bookshop that sells for less than the recommended retail price. This is an example of:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. referral selling.
E. resale price maintenance.
Manufacturers or channel members trying to influence the price at which the product is sold to
subsequent purchasers is called resale price maintenance.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #69
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
70.
A country allows millions of extra barrels of oil into the market to push prices downward. This
squeezes smaller oil producers out of the market and expand the country's own market share.
This act could be termed:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. referral selling.
E. resale price maintenance.
Pricing that is intended to drive competitors out of the market or keep competitors from
entering the market, usually low prices, is termed "predatory pricing."
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #70
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
71.
An automobile company published an advertisement that said that prices for the latest model
on offer started at $10,000 with an interest rate of 10 percent. The ad showed the logo and
picture of a new model. When an interested customer spoke with the authorized dealer
mentioned in the ad, he was informed that the bargain price was only on the older model. This
is an example of:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. misleading advertising.
E. resale price maintenance.
All types of advertising about a product or service that are false or misleading is termed
"misleading advertising."
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #71
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
72.
Kelly visited a computer store looking for a model listed at $600. The salesperson stated that
this model was out of stock and tried to sell her another model priced at $1,352. This is an
example of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral scheme.
E. pyramid sales.
In bait-and-switch, sellers try to attract customers to their stores by offering a low price on a
product (bait) but, once the customers are in the store, sellers try to persuade them to buy a
higher-priced item (switch).
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #72
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
73.
Beck wanted to join a gym but was worried about the cost. The gym offered her a 100 percent
rebate on a one-year membership if she gave the gym the names and telephone numbers of
five of her friends. This is an example of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
In referral selling, incentives are offered to consumers to provide the names of other potential
consumers.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #73
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
74.
A seller refusing to sell to other channel members unless that member agrees to buy solely
from that particular seller is termed:
A. price fixing.
B. exclusive dealing.
C. predatory pricing.
D. misleading advertising.
E. refusal to deal.
A seller refusing to sell to other channel members unless that member agrees to buy
exclusively from that particular seller is termed "exclusive dealing."
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #74
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
75.
MediaTeq required its employees to send photocopies of a letter to 100 people. The letter
contained a list of 10 names and addresses. People were required to send $1 to the first 10
names on the list to join the MediaTeq club. After that, they had to place their names and
addresses at the bottom of the list, strike off the first 10 names, and send it to 100 other
people. This is an example of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
Pyramid selling includes schemes where salespersons are paid to recruit other salespeople,
and each new salesperson pays for the right to recruit other salespeople, with some of that
money going to earlier recruiters. Participants are often asked to buy a specific quantity of
goods or are knowingly sold unreasonable quantities of goods and are not allowed to return
the goods on commercially reasonable terms.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #75
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
76.
Brian devised a scheme and instructed his partner to submit sham price quotations from
dormant companies for a bulletproof-vest contract. The sham price quotations were submitted
with intentionally increased prices so that one company, a Kuwaiti general trading firm, would
win the contract at a lower price. The owner of the Kuwaiti general trading firm then authorized
Brian to negotiate and receive all funds related to the contract. This is an example of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral scheme.
E. pyramid selling.
Bid rigging includes sellers colluding to set prices in response to bids or quotations for
products.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #76
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
Teal Electronics Inc. resells DVD players to retail stores for $300. Teal requires the retailers to
charge customers $350. Any retailer that charges less than $350 is in violation of its contract
with Teal. Therefore, all the retailers come together and decide that the DVD player should not
be sold below $350.
Grewal - Chapter 03
77.
Which of the following is the marketing practice in which a company seeks to influence the
price at which a product is sold?
A. Price fixing
B. Price discrimination
C. Predatory pricing
D. Referral selling
E. Resale price maintenance
Manufacturers or channel members trying to influence the price at which the product is sold to
subsequent purchasers is called resale price maintenance.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #77
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
78.
Who is liable for seeking to influence the price at which a product is sold?
A. Teal Electronics
B. The retail stores
C. The consumers
D. The DVD player manufacturer
E. Ochre Corp., Teal's primary retail client
Manufacturers or channel members trying to influence the price at which the product is sold to
subsequent purchasers is called resale price maintenance. Here, Teal Electronics is liable for
seeking to influence the price at which the product is sold.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #78
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
79.
Which of the following illegal marketing practices are the retailers primarily involved in?
A. Price fixing
B. Price discrimination
C. Predatory pricing
D. Referral selling
E. Resale price maintenance
Price fixing is when the sellers conspire to set the price of a product, usually higher than it
would be in a free market.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #79
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
Merge and Co. is a grocery chain designed to attract women. It finds that women constitute its
biggest buyers, and since more and more women are working and earning good incomes,
they are prone to indulging in a variety of foods. Also, to cater to the tastes of women
belonging to different ethnic groups, Merge and Co. has positioned a prominent international
foods aisle, which highlights Asian, West Indian, Middle Eastern, and Eastern European food
products, before the customers reach the central grocery aisles. The food displayed is in
keeping with the latest trend of promoting low-calorie, high-nutrition organic products.
Grewal - Chapter 03
80.
Which of the following has prodded the grocery chain to exclusively cater to the needs of
women customers?
A. The government regulations that make it mandatory to do so
B. The pressure from groups fighting for women rights
C. The changing role of women in society
D. The social constraints that deter women from shopping in crowded areas
E. The pressure from male members of the community
The shifts in gender role, attitude, and behaviour affects the way many firms design and
promote their products and services. For example, more firms are careful about gender
neutrality in positioning their products and, furthermore, attempt to transcend gender
boundaries whenever they can.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #80
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-12 Gender
81.
The presence of food products from different parts of the world in a grocery chain symbolizes:
A. that culture is the same in all parts of the world.
B. the attempt to shut out smaller grocery stores.
C. environmental concern.
D. the growing trend of eating high-calorie, low-nutrition products.
E. variance in the ethnic composition of society.
Statistics Canada data shows that the ethnic composition of Canada has changed over the
last two decades and will continue to change in the next decade.
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Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #81
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-13 Ethnicity
82.
The latest trend of promoting low-calorie, high-nutrition organic products is a(n):
A. social trend.
B. legal trend.
C. political trend.
D. cultural trend.
E. economic trend.
In Canada, 60.1 percent of adult men and 44.2 percent of adult women are categorized as
obese or overweight. As the same time, consumers' interest in improving their health has
opened up several new markets and niches focused on healthy living.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #82
Learning Objective: 03-03 Identify important social and natural trends that impact marketing decisions.
Topic: 03-22 Health and Wellness Concerns
A company manufacturing mouthwash declared that the mouthwash could cure common
ailments such as colds, sore throats, and coughs. It also promised that it was a hair revitalizer
and an antiseptic cream for cuts, bruises, wounds, and stings. Tests by independent agencies
found that the product was as effective as warm water in treating colds.
Grewal - Chapter 03
83.
The marketing practice being followed by the company is called:
A. bait-and-switch.
B. exclusive dealing.
C. pyramid selling.
D. referral selling.
E. misleading advertising.
All types of advertising about a product or service that are false or misleading are called
misleading advertising.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #83
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
84.
The marketing practice used by the mouthwash company will be checked by the:
A. Competition Act.
B. Access to Information Act.
C. Canada Agricultural Product Standards Act.
D. Copyright Act.
E. Food and Drugs Act.
Misleading advertising is a marketing practice covered by the Competition Act.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #84
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
A table describing the marketing practices covered by the Competition Act
Grewal - Chapter 03
85.
Kelly saw an advertisement of TV being sold half-price. When she visits a store to buy it, she
is told that she needs to buy a projector, as well, for the offer. Kelly is a victim of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
Sellers try to attract customers to their stores by offering a low price on a product (bait) but,
once the customers are in the store, sellers try to persuade them to buy a higher-priced item
(switch) in bait-and-switch.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #85
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
86.
While Maria is dining at her favourite Mexican restaurant, she is offered a discount voucher of
$20 if she will provide the names and addresses of five friends who might also be interested in
Mexican food. This is an example of:
A. bid rigging.
B. bait-and-switch.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
Incentives offered to consumers to provide the names of other potential consumers is called
referral selling.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #86
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
87.
A retail store enters into an agreement to buy cheese from a large supplier. The retail store is
bound by this agreement and cannot buy cheese from local dairy farms although its prices are
lower. This is an example of:
A. exclusive dealing.
B. refusal to deal.
C. predatory pricing.
D. referral selling.
E. pyramid selling.
Exclusive selling involves a seller refusing to sell to other channel members unless that
member agrees to buy exclusively from that particular seller.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Medium
Grewal - Chapter 03 #87
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
88.
Two airline companies enter into a secret pact to simultaneously increase their fuel
surcharges. As a result of the pact, fuel surcharges rose from $10 a ticket to more than $100 a
fare. This is an example of:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. referral selling.
E. resale price maintenance.
Sellers conspiring to set the price of a product, usually higher than it would be in a free market
is called price fixing.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #88
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
89.
A coffee shop chain opens across the street from a locally owned coffee shop. The base
expenses for coffee and pastries are similar. However, the chain has corporate backing for
support and therefore makes a decision to radically lower prices. Thus, it succeeds in
attracting customers to its facility and eventually drives the local competitor out of business.
This is an example of:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. referral selling.
E. resale price maintenance.
Pricing that is intended to drive competitors out of the market or keep competitors from
entering the market, usually low prices, is called predatory pricing.
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #89
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
90.
A restaurant has two menus, one printed in English, and the other printed in the local
language. The prices on the English menu are double those on the other menu. The
restaurant owners believe that if a customer cannot read the local language, he must be a
tourist and will pay more. This is an example of:
A. price fixing.
B. price discrimination.
C. predatory pricing.
D. referral selling.
E. resale price maintenance.
Charging different prices to different (competing) buyers for goods of the same quality and of
the same quantity is termed "price discrimination."
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #90
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
91.
Parties that work with the focal firm are its corporate partners.
TRUE
Consumers may be influenced directly by the firm's microenvironment, including the
immediate actions of the focal company, the company's competition, and the corporate
partners that work with the firm to make and supply products and services to consumers.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #91
Learning Objective: 03-01 Outline how the factors in a firms microenvironment influence its marketing strategy.
Topic: 03-03 Corporate Partners
92.
Culture is defined as the shared meanings, beliefs, morals, values, and customs of a group of
people.
TRUE
Culture is defined as the shared meanings, beliefs, morals, values, and customs of a group of
people. Transmitted by words, literature, and institutions, culture is passed down from
generation to generation and learned over time.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #92
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-06 Country Culture
93.
Demographics provide an easily understood "snapshot" of the typical consumer in a specific
target market.
TRUE
Advertisers also might want to know whether a show is more popular with women than men or
with urban or rural viewers. Demographics thus provide an easily understood "snapshot" of the
typical consumer in a specific target market.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #93
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-08 Demographics
94.
Generation Xers are also called millennials or the "echo boom" generation.
FALSE
Generation Y, also called millennials or the "echo boom" generation, represent just over 9
million Canadians, or about 27 percent of the population. The next group, Generation X,
includes people born between 1966 and 1971.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #94
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
95.
Generation X's quest for youth, in both attitude and appearance, provides a massive market
for anti-aging products, cosmetics, pharmaceuticals, and biotechnology.
FALSE
The baby boomers' quest for youth, in both attitude and appearance, provides a massive
market for anti-aging products, cosmetics, pharmaceuticals, and biotechnology. Marketing to
Gen X is difficult, but word-of-mouth advertising from people they know and trust can give
marketers the credibility needed to market to this cohort.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #95
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
96.
Food-related advertisements cannot be aired during children's programming.
TRUE
Food-related advertisements cannot be aired during children's programming, and companies
cannot link unhealthy foods with cartoon and celebrity figures. For example, Burger King no
longer uses SpongeBob SquarePants to promote burgers and fries.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #96
Learning Objective: 03-03 Identify important social and natural trends that impact marketing decisions.
Topic: 03-19 Marketing to Children
97.
Today, most Canadians have more time for leisure and to spend with family than they had
before.
FALSE
Canadians have less time for leisure and to spend with family. Canadian workers spend about
200 hours less with family per year than they did two decades ago.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #97
Learning Objective: 03-03 Identify important social and natural trends that impact marketing decisions.
Topic: 03-21 The Time-Poor Society
98.
Some marketers have responded to the challenge of getting consumers' attention by moving
some of their advertising expenditures from TV and print media to instant messaging and
Internet-based reviews and ads.
TRUE
Some marketers have responded to the challenge of getting consumers' attention by, for
example, moving some of their advertising expenditures from traditional venues such as TV
and print media to instant messaging, Internet-based reviews and ads, social media ads,
movie screens, fortune cookies, baggage claim conveyor belts, billboards, and ads in airports
and on taxis, buses, and mass transport vehicles.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #98
Learning Objective: 03-03 Identify important social and natural trends that impact marketing decisions.
Topic: 03-21 The Time-Poor Society
99.
The relative ease with which consumers can use social media has increased the power of
consumers to affect a firm's marketing strategy.
TRUE
The relative ease with which consumers can use social media has dramatically increased the
power of consumers to affect a firm's marketing strategy. Some firms have embraced social
media as a way to get excellent feedback from consumers, which is then used to design new
or redesign existing products, services, and marketing campaigns and strategies.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #99
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-14 Technological Advances
100.
If the interest rate goes down, consumers have an incentive to save more because they earn
more for loaning the bank their money.
FALSE
If the interest rate goes up, consumers have an incentive to save more, because they earn
more for loaning the bank their money; when interest rates go down, however, consumers
generally borrow more.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #100
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-15 Economic Situation
101.
In a recession, spending by both businesses and consumers is greatly increased.
FALSE
In a recession, the stock market declines sharply, unemployment increases, business and
consumer confidence falls, and spending by both businesses and consumers is severely
reduced.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #101
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-15 Economic Situation
102.
Government regulation may help to create a level playing field for competition and set
standards for marketers to follow.
TRUE
Regulation may help to create a level playing field for competition and set standards for
marketers to follow. In other cases, regulation tends to increase the cost of compliance;
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #102
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
103.
Price discrimination refers to sellers conspiring to set the price of a product, usually higher
than it would be in a free market.
FALSE
Price discrimination refers to charging different prices to different (competing) buyers for
goods of the same quality and of the same quantity. Price fixing refers to sellers conspiring to
set the price of a product, usually higher than it would be in a free market.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #103
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
104.
Resale price maintenance refers to manufacturers or channel members trying to influence the
price at which the product is sold to subsequent purchasers.
TRUE
Resale price maintenance refers to manufacturers or channel members trying to influence the
price at which the product is sold to subsequent purchasers.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #104
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
105.
Exclusive dealing refers to a seller refusing to sell to other channel members unless that
member agrees to buy exclusively from that particular seller.
TRUE
Exclusive dealing refers to a seller refusing to sell to other channel members unless that
member agrees to buy exclusively from that particular seller.
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: Easy
Grewal - Chapter 03 #105
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
106.
Explain the concept of competitive intelligence.
Competition significantly affects consumers in the microenvironment. Greater competition may
mean more choices for consumers, which influences their buying decisions. It is critical that
marketers understand their firm's competitors, including their strengths, weaknesses, and
likely reactions to the marketing activities their own firm undertakes. Firms use competitive
intelligence (CI) to collect and synthesize information about their position with respect to their
rivals. In this way, CI enables companies to anticipate changes in the marketplace rather than
merely react to them. The strategies to gather CI can range from simply sending a retail
employee to a competitive store to check merchandise, prices, and foot traffic to more
involved methods, such as reviewing public materials, including websites, press releases,
industry journals, annual reports, subscription databases, permit applications, patent
applications, and trade shows; interviewing customers, suppliers, partners, or former
employees; and analyzing a rival's marketing tactics, distribution practices, pricing, and hiring
needs.
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #106
Learning Objective: 03-01 Outline how the factors in a firms microenvironment influence its marketing strategy.
Topic: 03-02 Competition
107.
Describe the shopping habits of the generational cohort, Generation X.
Generation Xers possess considerable spending power because they tend to wait to get
married and buy houses later in life. They are much less interested in shopping than their
parents but are far more cynical, which tends to make them astute consumers. They demand
convenience and tend to be less likely to believe advertising claims or what salespeople tell
them. Marketing to Gen X is difficult, but word-of-mouth advertising from people they know
and trust can give marketers the credibility needed to market to this cohort. Because of their
experience as children of working parents who had little time to shop, Gen X developed
shopping savvy at an early age and knew how to make shopping decisions by the time they
were teenagers. As a result, they grew more knowledgeable about products and more risk
averse than other generational cohorts. Finally, Gen X is much less interested in status
products than older generations, not because they can't afford luxury brands but because they
just don't see the point.
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #107
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
108.
Describe the traits that baby boomers share.
Baby boomers are the largest cohort of Canadians, representing 30 percent of the population.
Although the baby boomer generation spans 18 years, experts agree that its members share
several traits that set them apart from those born before World War II. First, they are
individualistic. Second, leisure time represents a high priority for them. Third, they believe that
they will always be able to take care of themselves, which is partly driven by their feeling of
economic security, even though they are a little careless about the way they spend their
money. Fourth, they have an obsession with maintaining their youth. Fifth and finally, they will
always love rock ‘n' roll.
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #108
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
109.
Differentiate between upper-class consumers and middle-class consumers.
Upper-class consumers are very affluent, and their spending patterns are not influenced by
economic conditions. They have high discretionary incomes and tend to purchase luxury
items. Their family income is usually in excess of $80,000. They are more likely to be highly
educated and work in managerial and executive roles. About 48 percent of Canadian
households are in the upper class. Middle-class families earn between $30,000 and $70,000
with the majority tending toward the higher end of this scale. They can afford a good life most
of the time. They tend to be careful about their spending and are often value-conscious.
Approximately 38 percent of Canadian households fall in the middle class.
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #109
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-10 Income
110.
Describe the steps being taken by marketers to accommodate the expanding ethnic
composition of the Canadian population.
The growing number of ethnic groups or visible minorities represents both a challenge and a
marketing opportunity. Canadian grocery heavyweight Sobeys has recently developed a new
store concept, FreshCo, specifically targeted to the unique needs of the ethnic consumer. The
concept is a value-driven store with low prices like No Frills or Food Basics but with a focus on
fresh produce, halal meats, and freshly baked breads (unlike most discount banners) to meet
the demands of ethnic clientele. As well, the layout of the store is different. After the store's
layout guides consumers through the fresh produce, bakery, and meat departments, as in a
typical retail grocery store, the natural flow of the store takes shoppers through the extended
international foods aisle, which highlights Asian, West Indian, Middle Eastern, and Eastern
European food products, before the customers reach the centre grocery aisles. Sobeys has
also committed to adapting the FreshCo, store assortments to match the demographics of the
surrounding neighbourhood, including teaming up with local suppliers. It's no doubt that other
grocery stores will respond to remain competitive. Some of the tactics retailers are taking to
accommodate the ethnic consumer include adapting signs and flyers to feature different
languages; choosing ethnic-targeted media to advertise; celebrating important ethnic holidays
such as Chinese New Year, Ramadan, Eid, and Hanukkah with events, promotions, and
seasonal products; and offering ethnic merchandise for sale and making sure it is
merchandised correctly.
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #110
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-13 Ethnicity
111.
Explain the concept of green marketing.
Green marketing involves a strategic effort by firms to supply customers with environmentally
friendly merchandise. Although this "green" trend is not new, it is growing. Many consumers,
concerned about everything from the purity of air and water to the safety of beef and salmon,
believe that each person can make a difference in the environment. In many cities across
Canada, the use of pesticides on lawns is banned and many consumers are trying alternative,
environmentally friendly lawn care treatment. Also, a growing number of cities across Canada
are introducing the "green bin" program, which encourages consumers to recycle their food
and yard waste to make compost for gardening. Initial results suggest that this program is
hugely successful everywhere it has been introduced.
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #111
Learning Objective: 03-03 Identify important social and natural trends that impact marketing decisions.
Topic: 03-18 Green Consumers
112.
Explain how the trend of green marketing helps companies that sell environmentally friendly
products.
For companies selling environmentally friendly products, this trend represents a great
opportunity. The demand for green-oriented products has been a boon to the firms that supply
them. For instance, marketers encourage consumers to replace their older versions of
washing machines and dishwashers with water- and energy-saving models and to invest in
phosphate-free laundry powder and mercury-free, rechargeable batteries. Canada's love affair
with recycling also has created markets for recycled building products, packaging, paper
goods, and even sweaters and sneakers. Similarly, this raised energy consciousness has
spurred the growth of more-efficient appliances, lighting, and heating and cooling systems in
homes and offices. Health-conscious consumers continue to fuel the markets for organic
foods, natural cleaning and personal care products, air- and water-filtration devices, bottled
water, and organic fertilizers. By offering environmental responsibility, these green products
add extra value that other products do not have.
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #112
Learning Objective: 03-03 Identify important social and natural trends that impact marketing decisions.
Topic: 03-18 Green Consumers
113.
Describe the trends that have increased the difficulty that marketers face when trying to gain
the attention of consumers.
Reaching a target market has been made even more complicated by several trends that
increase the difficulty of grabbing those markets' attention. First, in the majority of families,
both parents work, and the kids are busier than ever. Thus, Canadians have less time for
leisure and to spend with family. Second, consumers today have hundreds of shows and
programs available to them through TV, radio, PDAs, DVDs, smartphones, personal
computers, and the Internet. With many shows and programs available on the Internet,
consumers can choose when, where, and what shows they want to watch or listen to at their
convenience. By fast-forwarding thorough the commercials, they can catch an entire one-hour
show in approximately 47 minutes, which means they miss all the messages marketers are
attempting to send them. Third, many consumers attempt to cope with their lack of leisure time
by multitasking: watching TV or listening to music while talking on the telephone or doing
homework. Their divided attention means they simply cannot focus as well on the
advertisements that appear in those media.
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #113
Learning Objective: 03-03 Identify important social and natural trends that impact marketing decisions.
Topic: 03-21 The Time-Poor Society
114.
Describe the negative and positive consequences for Canadian marketers of the rapid
increase in the exchange rate between the currencies of Canada and the United States.
The rapid increases in the exchange rate between the currencies of Canada and the United
States has both negative and positive consequences for Canadian marketers, depending on
whether they are exporters or importers and whether they report their earnings in Canadian or
U.S. dollars. The exchange rate changes also have serious implications for consumers as
well. As the value of the Canadian dollar increases compared with the U.S. dollar,
merchandise made in Canada and exported to the United States becomes more costly to
Americans, and Canadian exporting companies suddenly find that they have lost a good
chunk of their cost advantage. However, imports of products made in the United States cost
less for both Canadian importers and consumers. Another, perhaps unexpected, result of the
strengthening of the Canadian dollar compared with the U.S. dollar is that it might allow
Canadian manufacturers to win and American manufacturers to lose—that is, imports of raw
material from the United States are cheaper. During such inflationary times, "made in America"
claims become more important, which means that Canadian manufacturers and U.S. retailers
that specialize in Canadian merchandise must decide whether they should attempt to maintain
their profit margins or accept a lower price to keep their customer base. It is not always easy
for marketers to respond quickly to such rapid increases but marketers who monitor the
economic environment have the advantage, as they will be able to adjust their strategies if
they foresee the increase.
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #114
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-15 Economic Situation
115.
Explain how government legislation protects consumers.
Legislation has been enacted to protect consumers in a variety of ways. First, regulations
require manufacturers to abstain from false or misleading advertising practices that might
mislead consumers, such as claims that a medication can cure a disease when in fact it
causes other health risks. Second, manufacturers are required to identify and remove any
harmful or hazardous materials (e.g., asbestos) that might place a consumer at risk. Third,
organizations must adhere to fair and reasonable business practices when they communicate
with consumers. For example, BP seems to have ignored its own safety procedures and
warning signal, which resulted in the largest oil spill in U.S. history, with devastating
consequences to the environment and the people of the Gulf Coast. Last but not least, the
government enacts laws focused on specific industries and on consumers. These laws may be
geared toward increasing competition, such as the deregulation of the telephone and energy
industries. Or, they may be in response to current events or to achieve specific objectives,
such as when the governments of Ontario and British Columbia introduced the harmonized
sales tax (HST) to improve the competitiveness of Canadian businesses, or when the federal
government introduced the one-year home renovation tax credit to encourage consumers to
spend during the recession.
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #115
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-16 Political/Legal Environment
116.
Kelly lives in Canada and is not quite a teenager but not a young child either. She and her
friends are going shopping this weekend. What shopping traits is Kelly most likely to exhibit?
Kelly is a representative of a tween who is aged between 9 and 12. In Canada, tweens spend
their money mainly on food and drinks, electronics (gaming consoles and games, digital music
players, cellphones, and computers) and clothing. They learn about new products mainly from
TV shows and friends. Although they enjoy the attention they get from marketers, they are not
an easy group to market to. Three in four Canadian tweens make shopping decisions jointly
with their parents. Since tweens are the first generation born after the emergence of the
Internet, technology has no novelty for them. They communicate with friends via instant
messenger while talking on a cellphone and flipping through TV channels, all simultaneously.
In the food industry, they lean toward products such as Yoplait's Yop. For toys and clothing,
they have made Build-A-Bear Workshop, Claire's, and West 49 immensely popular. However,
because they have little of their own money, tweens tend to be value conscious, which makes
them key targets for retailers such as Ardene, Hollister, American Eagle Outfitters, and Old
Navy.
Blooms: Apply
Difficulty: Medium
Grewal - Chapter 03 #116
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-09 Generational Cohorts
117.
Today, gender roles have been blurred. How does this shift in attitude and behaviour affect the
way many firms design and promote their products and services?
More firms are careful about gender neutrality in positioning their products and, furthermore,
attempt to transcend gender boundaries whenever they can. From cars to copiers, sweaters to
sweeteners, women make the majority of purchasing decisions and then influence most of the
remainder. For instance, despite the traditional view that hardware stores appeal mostly to
men, women shoppers are so important to Rona, the home improvement chain, that the stores
have been designed with women in mind. Furthermore, women now head more than 20
percent of Canadian households. Clearly, the working women's segment is a large, complex,
and lucrative market. But that does not mean marketers have forgotten about men. The days
of commercials that show Mom alone with the kids are over. To reflect changing family roles,
commercials for most children's gear now include Dad interacting with the kids and being
involved in purchase decisions.
Blooms: Understand
Difficulty: Hard
Grewal - Chapter 03 #117
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-12 Gender
118.
Cathy wants to open a grocery store in a community that has a large migrant population. What
steps does Cathy need to take to make her store successful among the local Canadians as
well as the different ethnic groups who have migrated to Canada?
Student answers will vary. The following steps can be taken by Cathy: creating a value-driven
store with low prices, including an extended international foods aisle; adapting signs and flyers
to feature different languages; advertising in ethnic-targeted media; celebrating important
ethnic holidays; and offering ethnic merchandise for sale and merchandising it correctly.
Blooms: Apply
Difficulty: Hard
Grewal - Chapter 03 #118
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-13 Ethnicity
119.
Describe how advertising children's products, especially food products, has changed over the
years.
In the past 20 years, child obesity has doubled in Canada, leading to skyrocketing rates of
high blood pressure, high cholesterol, early signs of heart disease, and Type 2 diabetes
among children. In response, the Center for Science and the Public Interest (CSPI) has
proposed Guidelines for Responsible Food Marketing to Children, which outlines a variety of
changes to advertising directed at children. The CSPI notes that children are highly
impressionable, and most food advertising to these young consumers touts high-calorie, lownutrition products, associated in advertising with various toys, cartoons, and celebrities. The
new guidelines require advertisers to market food in reasonably proportioned sizes. The
advertised food items also must provide basic nutrients, have less than 30 percent of their
total calories from fat, and include no added sweeteners. The advertising also cannot be aired
during children's programming, and companies cannot link unhealthy foods with cartoon and
celebrity figures. For example, Burger King no longer uses SpongeBob SquarePants to
promote burgers and fries. Other organizations such as the Chronic Disease Prevention
Alliance of Canada (CDPAC) and health and citizens' groups are also working to ensure
proper advertising to children.
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #119
Learning Objective: 03-03 Identify important social and natural trends that impact marketing decisions.
Topic: 03-19 Marketing to Children
120.
How do inflation, foreign currency fluctuations, interest rates, and recession affect a firm's
ability to market goods and services?
Shifts in the four economic factors make marketing easier for some and more difficult for
others. For instance, when inflation increases, consumers probably don't buy less food, but
they may shift their expenditures from expensive steaks to less-expensive hamburgers.
Grocery stores and inexpensive restaurants win, but expensive restaurants lose. Consumers
also buy less discretionary merchandise. For instance, the sale of expensive jewellery, fancy
cars, and extravagant vacations will decrease but, curiously, the sale of low-cost luxuries,
such as personal care products and home entertainment, tends to increase. It appears that,
instead of rewarding themselves with a new Lexus or a health spa vacation, consumers buy a
few cosmetics and rent a movie.
Lower interest rates encourage more consumers to borrow to finance purchases, especially of
big-ticket or discretionary items such as cars, houses, furniture, and home entertainment
systems. Not surprisingly, the building industry and housing market did extremely well in the
period leading up to the recent recession. As consumers switch from more- to less-expensive
goods and services and demand greater value, marketers who were able to adjust their
offering did much better than those who did not change their value offering.
Recession is a period of economic downturn when the economic growth of a country is
negative for at least two consecutive quarters. In a recession, the stock market declines
sharply, unemployment increases, business and consumer confidence falls, and spending by
both businesses and consumers is severely reduced. Marketers must adjust their marketing
strategies accordingly. Most marketers try to cut costs, lower prices to keep their existing
customers and to attract new customers, and may even introduce slightly lower quality goods
or reduce the level of services offered in order to manage costs.
Foreign currency fluctuations can influence consumer spending. As the value of the Canadian
dollar increases compared with the U.S. dollar, merchandise made in Canada and exported to
the United States becomes more costly to Americans, and Canadian exporting companies
suddenly find that they have lost a good chunk of their cost advantage. However, imports of
products made in the United States cost less for both Canadian importers and consumers.
With the strengthening of the Canadian dollar compared with the U.S. dollar, it might allow
Canadian manufacturers to win and American manufacturers to lose—that is, imports of raw
material from the United States are cheaper. It is not always easy for marketers to respond
quickly to such rapid increases, but marketers who monitor the economic environment have
the advantage, as they will be able to adjust their strategies if they foresee the increase.
Blooms: Understand
Difficulty: Medium
Grewal - Chapter 03 #120
Learning Objective: 03-02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Topic: 03-15 Economic Situation
Chapter 3 Summary
Category
# of Questions
Accessibility: Keyboard Navigation
105
Blooms: Apply
49
Blooms: Remember
35
Blooms: Understand
36
Difficulty: Easy
34
Difficulty: Hard
22
Difficulty: Medium
64
Grewal - Chapter 03
124
Learning Objective: 03-01 Outline how the factors in a firms microenvironment influence its marketing strategy.
Learning Objective: 03-
5
102
02 Identify the factors in a firms macroenvironment and explain how they influence the overall marketing strategy.
Learning Objective: 03-03 Identify important social and natural trends that impact marketing decisions.
13
Topic: 03-02 Competition
4
Topic: 03-03 Corporate Partners
1
Topic: 03-06 Country Culture
4
Topic: 03-07 Regional Subcultures
1
Topic: 03-08 Demographics
3
Topic: 03-09 Generational Cohorts
25
Topic: 03-10 Income
9
Topic: 03-12 Gender
4
Topic: 03-13 Ethnicity
5
Topic: 03-14 Technological Advances
3
Topic: 03-15 Economic Situation
10
Topic: 03-16 Political/Legal Environment
38
Topic: 03-18 Green Consumers
6
Topic: 03-19 Marketing to Children
2
Topic: 03-21 The Time-Poor Society
4
Topic: 03-22 Health and Wellness Concerns
1