CHAPTER 16
MARKETING AND SOCIETY: SOCIAL RESPONSIBILITY
AND MARKETING ETHICS
MULTIPLE CHOICE QUESTIONS
1. According to a recent Inc. article on social responsibility and marketing ethics, all
of the following were lessons that have been learned by business persons
EXCEPT:
a. what you sell is important.
b. be proud to be in business.
c. always win.
d. focus on two bottom lines.
Answer: (c) Difficulty: (2) Page: 593
2. The ____________________ is a philosophy of customer service and mutual gain.
a. product concept
b. corporate concept
c. marketing concept
d. societal concept
Answer: (c) Difficulty: (2) Page: 594
3. According to surveys, which of the following is MOST CORRECT with respect to
attitudes consumers hold toward marketing practices?
a. Consumers hold highly favorable attitudes toward marketing practices.
b. Consumers hold mostly favorable attitudes toward marketing practices.
c. Consumers hold mixed or even slightly unfavorable attitudes toward
marketing practices.
d. Consumers hold mostly negative or unfavorable attitudes toward
marketing practices.
Answer: (c) Difficulty: (3) Page: 594
4. All of the following are criticisms leveled against marketing by critics EXCEPT:
a. harming consumers through high prices.
b. harming consumers through deceptive practices.
c. harming consumers through high-pressure selling.
d. harming consumers through too many product choices.
Answer: (d) Difficulty: (2) Page: 594
380
5. Critics believe all of the following contribute to the charge that marketers cause
prices to be higher than is justified EXCEPT:
a. high costs of distribution.
b. high costs of product production.
c. high advertising and promotion costs.
d. excessive markups.
Answer: (b) Difficulty: (3) Page: 594
6. Among the social criticisms of marketing is high prices. The long-standing charge
that greedy middlemen mark up prices beyond the value added by their services refers
to which price-related criticism?
a. high costs of distribution
b. high advertising and promotion costs
c. excessive markups
d. low consumer demand
Answer: (a) Difficulty: (1) Page: 594
7. As an answer to the charge that distribution costs too much and that consumers
pay for these excessive costs in the form of higher prices, resellers answer by
saying:
a. “if you want it, you have to pay for it.”
b. “markups reflect services that consumers themselves want.”
c. “lower prices are only possible with less quality or less service.”
d. “perceptions of higher prices are simply incorrect.”
Answer: (b) Difficulty: (3) Page: 595
8. The criticism of marketing for packaging decisions that add “only” psychological
value to products rather than functional value relates to which social criticism of
marketing?
a. high costs of distribution
b. high advertising and promotion costs
c. excessive markups
d. high consumer demand
Answer: (b) Difficulty: (2) Page: 595
9. According to marketers, heavy advertising and promotion may be necessary for a
firm to match competitor’s efforts to ensure that the company does not loose:
a. its edge.
b. its traditional approach to advertising.
c. its share of mind.
d. its budget percentage or allocation.
381
Answer: (c) Difficulty: (2) Page: 595
10. Pointing out the high cost of research and development efforts for new products like
prescription drugs or high technology items is among the responses marketers provide
in answer to which of the following criticisms of marketing?
a. high costs of distribution
b. high advertising and promotion costs
c. excessive markups
d. excessive demand
Answer: (c) Difficulty: (2) Page: 596
11. Marketers are sometimes accused of deceptive practices that lead consumers to
believe they will get more value than they actually do. ______________ includes
practices such as falsely advertising “factory” or “wholesale” prices or a large
price reduction from a phony high retail price.
a. Deceptive promotion
b. Deceptive packaging
c. Deceptive pricing
d. Deceptive cost structure
Answer: (c) Difficulty: (1) Page: 596
12. Claiming a “wholesale price” as a reduction from a phony high list price is a form
of:
a. deceptive pricing.
b. deceptive promotion.
c. deceptive packaging.
d. high pressure selling.
Answer: (a) Difficulty: (1) Page: 596
13. ________________ includes practices such as overstating the product’s features or
performance, luring the customer to the store for a bargain that is out of stock, or
running rigged contests.
a. Deceptive promotion
b. Deceptive packaging
c. Deceptive pricing
d. Deceptive cost structure
Answer: (a) Difficulty: (1) Page: 596
382
14. Misleading labeling is a form of:
a. deceptive pricing.
b. deceptive promotion.
c. deceptive packaging.
d. high pressure selling.
Answer: (c) Difficulty: (2) Page: 596
15. The organization that fights to regulate “unfair or deceptive acts or practices” is the:
a. Department of Commerce.
b. Robinson-Patman Act.
c. Environmental Protection Agency.
d. Federal Trade Commission.
Answer: (d) Difficulty: (2) Page: 597
16. The Wheeler-Lea Act gives the Federal Trade Commission the power to regulate:
a. interstate commerce.
b. marketing ethics.
c. unfair and deceptive acts or practices.
d. competitive advertising of product benefits.
Answer: (c) Difficulty: (3) Page: 597
17. The toughest problem the Federal Trade Commission has in regulating unfair or
deceptive practices is:
a. defining what is deceptive.
b. getting Congressional support.
c. dealing with enormous lobbying efforts.
d. determining appropriate penalties for guilty parties.
Answer: (a) Difficulty: (3) Page: 597
18. Marketers argue that most companies avoid deceptive practices because:
a. the company is almost always caught.
b. such practices harm their business in the long run.
c. such practices are difficult to cover up.
d. the monetary penalty is almost always significant.
Answer: (b) Difficulty: (2) Page: 597
19. “Goods are sold, not bought” would be consistent with which of the following?
a. high pressure selling
b. the marketing concept
c. the societal concept of marketing
d. consumer wants and needs as shown through demand
383
Answer: (a) Difficulty: (3) Page: 597
20. A “three-day cooling off period” in which buyers can cancel a contract after
rethinking the contract is designed to protect the consumer from:
a. creative selling.
b. high pressure selling.
c. detail selling.
d. hard core selling.
Answer: (b) Difficulty: (1) Page: 597
21. All of the following have contributed to a growing problem of complaints about
product safety EXCEPT:
a. a desire to produce abroad.
b. manufacturer indifference.
c. increased production complexity.
d. poorly trained labor.
Answer: (a) Difficulty: (2) Page: 598
22. Today’s marketers know that ______________ results in customer satisfaction,
which in turn creates profitable customer relationships.
a. planned obsolescence
b. the production concept
c. customer-driven quality
d. the lowest price production
Answer: (c) Difficulty: (2) Page: 598
23. ________________ occurs when products become out-of-date before they
actually should need replacement.
a. Product wear-out
b. Design washout
c. Product deletion
d. Planned obsolescence
Answer: (d) Difficulty: (1) Page: 598
24. Intel and Microsoft have been accused in recent years of holding back their next
generation computer chips or software until demand is exhausted for the current
generation. This is a problem found under the concept of _________________.
a. product wear-out.
b. design washout.
c. product deletion.
d. planned obsolescence.
384
Answer: (d) Difficulty: (2) Page: 598
25. Marketing’s response to criticisms about planned obsolescence is that:
a. consumers do not mind obsolescence as long as it is not too expensive.
b. consumers like style changes.
c. consumers are not aware of planned obsolescence.
d. consumers have no choice in the matter.
Answer: (b) Difficulty: (2) Page: 598
26. __________ is a type of economic discrimination in which major chain retailers
avoid placing stores in disadvantaged neighborhoods.
a. “Low-balling”
b. “Black-listing”
c. “Redlining”
d. “Suburbanization”
Answer: (c) Difficulty: (2) Page: 601
27. If an Internet company were to identify (or profile) high- and low-value customers,
so the company could decide on product deals, prices, and services it will offer,
it might become guilty of which of the following questionable practices?
a. black-listing
b. EDLP
c. disadvantaged marketing
d. Weblining
Answer: (d) Difficulty: (3) Page: 601
28. All of the following are criticisms leveled at marketing from society’s viewpoint
EXCEPT:
a. too many jobs without regulation of activities.
b. false wants and too much materialism.
c. too few social goods.
d. cultural pollution.
Answer: (a) Difficulty: (1) Page: 602-605
29. “Greed is good” and “Shop ‘till you drop” are slogans that might characterize which
of the following social criticisms leveled at marketing?
a. false wants and too much materialism
b. too few social goods
c. cultural pollution
d. too much political power
385
Answer: (a) Difficulty: (1) Page: 602, 603
30. As a response to the criticism that marketing engages in the creation of false wants
and too much materialism, it is known that marketing and marketers are most
effective when they:
a. cut prices to appeal to wants.
b. appeal to existing wants rather than when they attempt to create new ones.
c. allow consumers to design their own products.
d. encourage consumers to boycott materialist practices.
Answer: (b) Difficulty: (2) Page: 604
31. The fact that ownership of such private products as automobiles creates a need for
public goods like roads and parking areas is used to support which of the following
criticisms of marketing?
a. false wants and too much materialism
b. too few social goods
c. cultural pollution
d. too much political power
Answer: (b) Difficulty: (3) Page: 604
32. One way to restore a balance between private and public goods is to:
a. make the government more of a partner in commerce.
b. make the taxing system favor social goods.
c. make producers bear the full social costs of their operations.
d. make international competitors pay their full share of social costs.
Answer: (c) Difficulty: (2) Page: 604
33. If advertising constantly sends out messages about materialism, sex, power, and
status, which of the following categories of social criticism of marketing
most closely matches this problem?
a. too much advertising
b. too few social goods
c. cultural pollution
d. too much political power
Answer: (c) Difficulty: (3) Page: 604-605
386
34. All of the following are rebuttals to the complaint that marketers produce too
much commercial noise EXCEPT:
a. marketers want their ads to reach only those that are interested in the
product or service.
b. advertising helps to keep down the cost of media vehicles such as magazines.
c. consumers have alternatives--they can skip or zap commercials.
d. commercials are a tradition that would be missed if they were no longer
available.
Answer: (d) Difficulty: (3) Page: 605
35. Concerns that the manufacturers of harmful products such as tobacco have
influence on lawmakers to the detriment of the public interest is used as evidence
of which criticism of marketing?
a. too much advertising
b. too few social goods
c. cultural pollution
d. too much political power
Answer: (d) Difficulty: (1) Page: 605-606
36. When critics charge that marketing harms other businesses, three common practices
are cited as evidence of this harm. All of the following are among those practices
EXCEPT:
a. shareholder wealth enhancement.
b. acquisitions of competitors.
c. marketing practices that create barriers to entry.
d. unfair competitive marketing practices.
Answer: (a) Difficulty: (2) Page: 606
37. All of the following are benefits to society that can result from company
acquisition of other companies EXCEPT:
a. the acquiring company may gain economies of scale leading to lower consumer
costs.
b. the acquiring company may bring better management and increased efficiency.
c. the acquisition may make the industry more competitive.
d. the acquisition may reduce competition.
Answer: (d) Difficulty: (1) Page: 606
387
38. Two major grass-roots movements affecting business in the U.S. as identified in
the text are:
a. mercantilism and capitalism.
b. socialism and liberalism.
c. consumerism and environmentalism.
d. republicanism and feudalism.
Answer: (c) Difficulty: (1) Page: 607
39. The first organized consumer movement took place in ____________ in the United
States.
a. the 1930s
b. the early 1900s
c. the 1870s
d. the 1960s
Answer: (b) Difficulty: (2) Page: 607
40. ________________ is an organized movement of citizens and government agencies
to improve the rights and powers of buyers in relation to sellers.
a. Environmentalism
b. Protectionism
c. Mercantilism
d. Consumerism
Answer: (d) Difficulty: (1) Page: 607
41. All of the following have been considered to be traditional seller’s rights EXCEPT:
a. the right to use any fair buying incentive schemes.
b. the right to use any open and honest product message.
c. the right to price in a predatory fashion as long as the intent was to make the
market stronger.
d. the right to spend any amount to promote the product fairly.
Answer: (c) Difficulty: (3) Page: 607
42. Which of the following would be a traditional seller’s right?
a. the right to spend any amount to promote the product fairly
b. the right to use any open and honest product message
c. the right to use any fair buying incentive schemes
d. the right to refuse service or buying to anyone as longer as it is a stated
seller policy
Answer: (d) Difficulty: (2) Page: 607
388
43. Traditional buyer’s rights include all of the following EXCEPT:
a. the right to return the product within a 30-day period.
b. the right not to buy a product that is offered for sale.
c. the right to expect the product to be safe.
d. the right to expect the product to perform as claimed.
Answer: (a) Difficulty: (2) Page: 607
44. Consumer advocates have begun to question traditional consumer rights as being
to limiting. Which of the following has been suggested as an additional consumer
right that should become policy?
a. the right to return the product within a 30-day period
b. the right to be protected against questionable products and marketing
practices
c. the right to be free of spam e-mail
d. the right to buy anything and everything that might be desired
Answer: (b) Difficulty: (3) Page: 607
45. An organized movement of concerned citizens and government agencies to protect
and improve the living environment of people is called:
a. environmentalism.
b. protectionism.
c. mercantilism.
d. consumerism.
Answer: (a) Difficulty: (1) Page: 608
46. The first modern environmental movement in the United States began in the:
a. 1940s.
b. 1950s.
c. 1960s and 1970s.
d. mid-1980s.
Answer: (c) Difficulty: (2) Page: 608
47. ___________________ is the practice of adopting policies and developing strategies
that both sustain the environment and produce profits for the company.
a. Environmentalism
b. Environmental sustainability
c. Consumerism
d. Consumer accountability
Answer: (b) Difficulty: (1) Page: 609
389
48. The environmental sustainability grid has all of the following cells EXCEPT:
a. social dogma.
b. new environmental technology.
c. pollution prevention.
d. product stewardship.
Answer: (a) Difficulty: (2) Page: 610, Figure 16-1
49. The response to environmentalism in the 1990s that sees marketers working to
develop ecologically safer products and packaging is called:
a. earth-first marketing.
b. green marketing.
c. all-natural marketing.
d. turbo marketing.
Answer: (b) Difficulty: (1) Page: 609, 611, 612, Marketing at Work 16-2
50. “Where are the most significant waste and emission streams from our current
operations?” This statement would be found in which of the following environmental
sustainability grid cells?
a. sustainability vision
b. new environmental technology
c. pollution prevention
d. product stewardship
Answer: (c) Difficulty: (3) Page: 610, Figure 16-1
51. “Can we add value or lower costs while simultaneously reducing the impact of our
products?” This statement would be found in which of the following environmental
sustainability grid cells?
a. sustainability vision
b. new environmental technology
c. pollution prevention
d. product stewardship
Answer: (d) Difficulty: (3) Page: 610, Figure 16-1
52. “Does our vision guide the development of new technologies, markets, products,
and processes?” This statement would be found in which of the following
environmental sustainability grid cells?
a. sustainability vision
b. new environmental technology
c. pollution prevention
d. product stewardship
Answer: (a) Difficulty: (2) Page: 610, Figure 16-1
390
53. “Is there potential to realize major improvements through new technology?” This
statement would be found in which of the following environmental sustainability grid
cells?
a. sustainability vision
b. new environmental technology
c. pollution prevention
d. product stewardship
Answer: (b) Difficulty: (2) Page: 610, Figure 16-1
54. Considering the information (and the four cells) found in the environmental
sustainability grid, on which of the four cells do most companies today focus
the majority of their efforts?
a. upper-left quadrant
b. upper-right quadrant
c. lower-left quadrant
d. lower-right quadrant
Answer: (c) Difficulty: (3) Page: 610, Figure 16-1, 615
55. ________________ is a philosophy holding that a company’s marketing should
support the best long-run performance of the marketing system.
a. Enlightened marketing
b. Myopic marketing
c. Fundamental marketing
d. Conceptual marketing
Answer: (a) Difficulty: (2) Page: 614
56. All of the following are among the principles of enlightened marketing EXCEPT:
a. consumer-oriented marketing.
b. value marketing.
c. desire marketing.
d. innovative marketing.
Answer: (c) Difficulty: (2) Page: 614
57. ___________________ is a philosophy of enlightened marketing that holds that
the company should view and organize its marketing activities from the consumer’s
point of view.
a. Innovative marketing
b. Consumer-oriented marketing
c. Value marketing
d. Sense-of-mission marketing
391
Answer: (b) Difficulty: (1) Page: 614
58. _________________ is a principle of enlightened marketing that requires that a
company seek real product and marketing improvements.
a. Innovative marketing
b. Consumer-oriented marketing
c. Value marketing
d. Sense-of-mission marketing
Answer: (a) Difficulty: (2) Page: 615
59. The company that overlooks new and better ways to do things will eventually
lose customers to another company that has found a better way of serving customer
needs is a major tenet of:
a. innovative marketing.
b. consumer-oriented marketing.
c. value marketing.
d. sense-of-mission marketing.
Answer: (a) Difficulty: (2) Page: 615
60. When a company puts most of its resources into value-building marketing
investments, it is practicing:
a. innovative marketing.
b. consumer-oriented marketing.
c. value marketing.
d. sense-of-mission marketing.
Answer: (c) Difficulty: (1) Page: 615
61. The idea that a company should define its mission in broad social terms rather than
in narrow product terms is the basic principle of:
a. innovative marketing.
b. consumer-oriented marketing.
c. value marketing.
d. sense-of-mission marketing.
Answer: (d) Difficulty: (2) Page: 615
62. When companies make marketing decisions by considering consumers’ wants and
the long-run interests of the company, consumer, and the general population, they
are practicing which of the following principles?
a. innovative marketing
b. consumer-oriented marketing
c. value marketing
d. societal marketing
392
Answer: (d) Difficulty: (2) Page: 615, 618
63. As an example of a company that understands sense-of-mission marketing,
Ben & Jerry’s states its mission as one of:
a. bottom-line profit to enhance shareholder wealth.
b. giving customers great ice cream.
c. “linked prosperity” including product, economic, and social missions.
d. survival of the fittest--and the fittest is Ben & Jerry’s.
Answer: (c) Difficulty: (2) Page: 615
64. Research indicates that the general public is concerned about social responsibility.
In a recent poll, ____________ of consumers said that they believe it is important
for companies to be good corporate citizens.
a. 65 percent
b. 78 percent
c. 85 percent
d. 92 percent
Answer: (d) Difficulty: (3) Page: 616, Marketing at Work 16-3
65. _________________ are products that have neither immediate appeal nor
long-term benefits.
a. Pleasing products
b. Desirable products
c. Salutary products
d. Deficient products
Answer: (d) Difficulty: (2) Page: 618, Figure 16-3
66. From the societal perspective, bad-tasting and ineffective medicine would be
considered to be a part of which type of product category?
a. pleasing products
b. desirable products
c. salutary products
d. deficient products
Answer: (d) Difficulty: (2) Page: 618, Figure 16-3
67. From a societal marketing perspective, products that give immediate satisfaction but
may hurt consumers in the long-run are called:
a. pleasing products.
b. desirable products.
c. salutary products.
d. deficient products.
393
Answer: (a) Difficulty: (3) Page: 618, Figure 16-3
68. _______________ are products that have low appeal but may benefit consumers in
the long-run.
a. Pleasing products
b. Desirable products
c. Salutary products
d. Deficient products
Answer: (c) Difficulty: (2) Page: 618, Figure 16-3
69. From the societal marketing perspective, products that provide both immediate
satisfaction and high long-run benefits are called:
a. pleasing products.
b. desirable products.
c. salutary products.
d. deficient products.
Answer: (b) Difficulty: (2) Page: 618, Figure 16-3
70. ___________________ are broad guidelines that everyone in the organization must
follow.
a. The American Marketing Association Code of Ethics
b. Corporate marketing ethics policies
c. Mass media code of ethics statements
d. Suggested retail price standards
Answer: (b) Difficulty: (1) Page: 619
71. Under which of the following philosophies or principles do companies and managers
justify their behavior by stating that they are not responsible for making moral
judgments?
a. social conscience philosophy
b. free market and legal system philosophy
c. cultural and environmental protectionism philosophy
d. state’s rights philosophy
Answer: (b) Difficulty: (3) Page: 620
394
72. Under which of the following philosophies or principles do companies and managers
believe that ultimate responsibility for actions is not in the system, but in the hands of
individual companies and managers?
a. social conscience philosophy
b. free market and legal system philosophy
c. cultural and environmental protectionism philosophy
d. state’s rights philosophy
Answer: (a) Difficulty: (2) Page: 620
73. The American Marketing Association suggests a list of code of ethics. All of the
following are ethics suggested in the area of pricing EXCEPT:
a. not engaging in price fixing.
b. always be the lowest price competitor.
c. not practicing predatory pricing.
d. disclosing the full price associated with any purchase.
Answer: (b) Difficulty: (2) Page: 622, Table 16-2
74. The American Marketing Association suggests a list of code of ethics. All of the
following are ethics suggested in the area of distribution EXCEPT:
a. not manipulating the availability of a product for purpose of exploitation.
b. not using coercion in the marketing channel.
c. using gray marketers whenever possible to save the consumer money.
d. not exerting undue influence over the reseller’s choice to handle a product.
Answer: (c) Difficulty: (3) Page: 622, Table 16-2
TRUE/FALSE QUESTIONS
75. According to a recent article in Inc., one of the lessons learned with respect to
marketing ethics and social responsibility is that of being proud to be in business.
Answer: (True) Difficulty: (1) Page: 593
76. The product concept is a philosophy of customer satisfaction and mutual gain.
Answer: (False) Difficulty: (1) Page: 594
77. Private transactions may involve larger questions of public policy.
Answer: (True) Difficulty: (1) Page: 594
395
78. As shown by the information in the text, most criticism directed toward marketing
is justified.
Answer: (False) Difficulty: (2) Page: 594
79. Most critics charge that the American marketing system causes prices to be higher
than they would be under a more sensible system.
Answer: (True) Difficulty: (1) Page: 594
80. Three factors lead to a charge that high prices are caused by the American marketing
system--high costs of distribution, high advertising and promotion costs, and
high costs of returns of merchandise.
Answer: (False) Difficulty: (3) Page: 594
81. Most intermediaries mark up prices beyond the value of their services.
Answer: (False) Difficulty: (2) Page: 594, 595
82. Modern marketers are accused of pushing up prices to finance heavy advertising
and sales promotion.
Answer: (True) Difficulty: (1) Page: 595
83. Marketers admit that, with respect to the charge of excessive markups, most
consumer abuses are intentional.
Answer: (False) Difficulty: (2) Page: 596
84. Deceptive pricing involves falsely advertising “factory” or “wholesale” prices or a
large price reduction from a phony high retail list price.
Answer: (True) Difficulty: (1) Page: 596
85. The National Chamber of Commerce and its court system is given the power to
regulate “unfair or deceptive acts or practices.”
Answer: (False) Difficulty: (2) Page: 597
86. Marketers argue that most companies avoid deceptive practices because such
practices harm their business in the long run.
Answer: (True) Difficulty: (1) Page: 597
396
87. Laws today require a “three-day cooling off-period” in which a consumer can
cancel a contract after rethinking it.
Answer: (True) Difficulty: (2) Page: 597
88. Planned obsolescence is recommending a “wear-out date” for a product and
sticking to it.
Answer: (False) Difficulty: (2) Page: 598
89. An argument against product obsolescence as a marketing sin is that consumers like
style changes and are often ready to get rid of the “old.”
Answer: (True) Difficulty: (2) Page: 598
90. “Redlining” is a marketing practice where prices are raised to those that can least
afford it.
Answer: (False) Difficulty: (3) Page: 601
91. The American marketing system has been accused of adding to several “evils” in
American society at large. One of these charges against the marketing system is
that it creates false wants and too much materialism.
Answer: (True) Difficulty: (2) Page: 602-603
92. An increase in automobile ownership requires more highways, traffic control,
parking spaces, and police services. This would be an example of a charge
against marketing that marketing is responsible for cultural pollution.
Answer: (False) Difficulty: (2) Page: 604-605
93. Cultural pollution is the mixing of cultures of two different races.
Answer: (False) Difficulty: (2) Page: 604-605
94. Critics claim that firms are harmed and competition reduced when companies
expand by acquiring competitors rather than by developing their own new
products.
Answer: (True) Difficulty: (1) Page: 606
95. Consumerism is an organized movement of citizens and government agencies to
improve the rights and power of buyers in relation to sellers.
Answer: (True) Difficulty: (1) Page: 607
397
96. One of the traditional buyer’s rights described in the text is the right to influence
products and marketing practices in ways that will improve the “quality of life.”
Answer: (False) Difficulty: (2) Page: 607
97. A traditional seller’s right in our economic and marketing system is the right to
use any buying incentive scheme, provided they are not unfair or misleading.
Answer: (True) Difficulty: (2) Page: 607
98. The first modern wave of environmentalism in the United States occurred in the
1980s during the Carter administration.
Answer: (False) Difficulty: (2) Page: 608
99. Environmental sustainability encourages government agencies to be responsible for
protecting and improving people’s living environment.
Answer: (False) Difficulty: (2) Page: 609
100. Product stewardship is minimizing pollution from production and all other
environmental impacts throughout the full product life cycle.
Answer: (True) Difficulty: (2) Page: 610
101. With respect to the environmental sustainability grid, a chief issue in product
stewardship would be “can we add value or lower costs while simultaneously
reducing the impact of our products.”
Answer: (True) Difficulty: (2) Page: 610, Figure 16-1
102. A good illustration of sustainability vision would be to realize that responsibility
for the product must be maintained throughout the product life cycle.
Answer: (False) Difficulty: (2) Page: 610, Figure 16-1
103. The philosophy of enlightened marketing holds that a company’s marketing should
reveal all of its marketing actions and strategies to its consumers.
Answer: (False) Difficulty: (2) Page: 614
104. Consumer-oriented marketing looks at marketing from a sense-of-mission point
of view.
Answer: (False) Difficulty: (3) Page: 614
398
105. Innovative marketing requires that a company seek real product and marketing
improvements.
Answer: (True) Difficulty: (1) Page: 615
106. Value marketing holds that a company should define its mission in broad social
terms rather than narrow product terms.
Answer: (False) Difficulty: (2) Page: 615
107. A salutary product (as a special classification of a societal product) is a product
that might have low appeal but may benefit consumers in the long-run.
Answer: (True) Difficulty: (2) Page: 618, Figure 16-3
108. Cigarettes would be a good example of a desirable product according to the
societal classification of products grid.
Answer: (False) Difficulty: (2) Page: 618, Figure 16-3
109. Corporate marketing ethics policies are broad guidelines that everyone in the
organization must follow.
Answer: (True) Difficulty: (1) Page: 619
110. According to the American Marketing Association Code of Ethics, marketers’
professional conduct must be guided by the basic rule of professional ethics--let the
buyer beware.
Answer: (False) Difficulty: (2) Page: 622, Table 16-2
111. A typical ethical statement under the marketing research guidelines of the
American Marketing Association’s Code of Ethics would be that a prohibition
exists with respect to presenting selling or fundraising under the guise of
conducting research.
Answer: (True) Difficulty: (2) Page: 622, Table 16-2
ESSAY QUESTIONS
112. It has been said that Ben & Jerry’s ice cream company is an outstanding illustration
of a company that cares deeply about its social responsibility. Write a brief statement
outlining how the Ben & Jerry’s does this. What do you think of their policies?
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Answer:
Ben & Jerry’s commitment begins with their mission statement. This statement
challenges all employees (and it means all employees) to include concern for individual
and community welfare into their day-to-day decisions. Ben & Jerry’s calls this a
corporate concept of linked prosperity. The company uses its products, the economic
environment, and social responsibility as the pillars upon which their philosophy rests.
The notion of linked prosperity (also called values-led business or caring capitalism)
forms the heart and soul of the company.
The students may use any of the following illustrations to support their statements: social
and economic concerns by the company, company assessment of environmental and
social impact of almost everything the company does, special attention to minority and
disadvantaged suppliers and issues, and rebelling against manufacturers who support
controversial products such as tobacco. These policies often affect the company’s bottom
line; however, management believes that the end result is worth the cost.
Difficulty: (2) Page: 591-594
113. Marketers have learned many lessons in the last ten years with respect to marketing
ethics and social responsibilities. Some of these lessons were recently presented in an
Inc. article. List and briefly discuss the lessons cited by the Inc. article.
Answer:
Five specific lessons were cited in the text.
(a) What you sell is important. The product or service, not just the mission, must be
socially responsible.
(b) Be proud to be in business. Be proud of and work towards better business training.
(c) Make a solid commitment to change. Companies often bring about significant
change because they were interested in this form of exploration.
(d) Focus on two bottom lines. Build a profitable business and a profitable mission.
(e) Forget the hype. For socially responsible companies, it’s not about marketing and
image. They go about doing their good deeds quietly.
Difficulty: (2) Page: 593
114. It should be noted that marketing has received much criticism in the past. Social
critics claim that marketing practices hurt individual consumers. List and discuss the
social criticisms of marketing’s impact on individuals.
Answer:
Consumers have many concerns about how well the American marketing system serves
their interests. Surveys usually show that consumers hold mixed or even slightly
unfavorable attitudes toward marketing practices. The following practices have been
criticized by consumers, consumer advocates, government agencies, and other critics:
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(a) High prices--the criticism is that the American marketing system causes prices to be
higher than they would be under more “sensible” systems. Three factors should be
observed: high costs of distribution, high advertising and promotion costs, and excessive
markups.
(b) Deceptive practices--these could be deceptions in pricing, promotion, or packaging.
The Wheeler-Lea Act gave the Federal Trade Commission the power to regulate “unfair
or deceptive acts or practices.”
(c) High pressure selling--many salespeople believe that products are sold, not bought.
They sell hard because of incentives and lack of concern for the consumer.
(d) Shoddy or unsafe products--the complaint is that many products are not made well
and services are not performed as expected. Many products are not considered to be safe.
(e) Planned obsolescence--the complaint is that marketers are causing their products to be
obsolete before they actually should need replacement. Examples are fashion clothing,
withholding advances, and technology at work.
(f) Poor service to disadvantaged consumers--the urban poor and the handicapped are not
served well by the system.
Difficulty: (3) Page: 594-601
115. Deceptive practices on the part of marketers generally fall into three groups. List
and briefly comment on each of these practices.
Answer:
(a) Deceptive pricing--includes practices such as false advertising “factory” or
“wholesale” prices or a large price reduction from a phony high retail list price.
(b) Deceptive promotion--includes practices such as overstating the product’s features or
performance, luring the customer to the store for a bargain that is out of stock, or running
rigged contests.
(c) Deceptive packaging--includes exaggerating package contents through subtle design,
not filling the package to the top, using misleading labeling, or describing the size in
misleading terms.
Difficulty: (2) Page: 596
116. Compare the practices of “redlining” and “Weblining.” Comment on this form of
marketing behavior.
Answer:
“Redlining” is a type of economic discrimination in which major chain retailers avoid
placing stores in disadvantaged neighborhoods. Charges like this have also be leveled at
home insurance, consumer lending, and banking industries.
“Weblining” (through the Internet) allows a company to identify or profile high- and lowvalue consumers so the company can decide which product deals, prices, and services it
will offer. Some would get better information and discounts. Low-value consumers
would probably pay the most for the least.
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Both forms display poor ethical treatment of consumers and are not socially responsible.
Difficulty: (2) Page: 600, 601
117. It should be noted that marketing has received much criticism in the past. Social
critics claim that marketing practices hurt society as a whole. List and discuss the social
criticisms of marketing’s impact on society.
Answer:
Marketing is accused of fostering societal “evils” including:
(a) False wants and too much materialism--people are judged by what they own rather
than who they are. Marketing has propagated such ideas as “Greed is Good.” and “Shop
‘till You Drop.” It is believed that marketers are very influential in creating needs.
(b) Too few social goods--as private goods increase, they require more public services
that are usually not forthcoming. The overselling of private goods results in “social
costs.”
(c) Cultural pollution--our senses are constantly being assaulted by advertising.
Commercials interrupt serious programs and pollute people’s minds with messages of
materialism, sex, power, or status.
(d) Too much political power--industries such as oil, tobacco, automobiles, and
pharmaceuticals hold too much power over government and the mass media. These
groups protect their own interests (which may be in conflict with society’s or consumers).
Difficulty: (2) Page: 602-606
118. Explain the definitions of consumerism and environmentalism and how they affect
marketing strategies.
Answer:
Consumerism is an organized movement of citizens and government agencies to improve
the rights and powers of buyers in relation to sellers. Environmentalism is an organized
movement of concerned citizens and government agencies to protect and improve
people’s living environment.
Marketing strategies often seek to position the company as more consumer-oriented
and/or more environmentally responsible (such as through green marketing).
One method for improving on the environmental front is to undertake the practice of
environmental sustainability--the practice of adopting policies and developing strategies
that both sustain the environment and produce profits for the company. As explained on
the environmental sustainability grid (Figure 16-1), areas that might be explored are new
environmental technology, pollution prevention, sustainability vision, and product
stewardship.
Difficulty: (2) Page: 607-613, Figure 16-1, Marketing at Work 16-2
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119. List and briefly explain the traditional seller’s and buyer’s rights. What new rights
do you think should be added to these lists to make them more modern and useful?
Answer:
The traditional seller’s rights are listed by the text as being:
(a) the right to introduce any product in any size and style, provided it is not hazardous
to personal health or safety; or, if it is, to include proper warnings and controls.
(b) the right to charge any price for the product, provided no discrimination exists among
similar kinds of buyers.
(c) the right to spend any amount to promote the product, provided it is not defined as
unfair competition.
(d) the right to use any product message, provided it is not misleading or dishonest in
content or execution.
(e) the right to use any buying incentives schemes, provided they are not unfair or
misleading.
The traditional buyer’s rights include:
(a) the right not to buy a product that is offered for sale.
(b) the right to expect the product to be safe.
(c) the right to expect the product to perform as claimed.
Examples of new rights provided by the text (even though the students can certainly be
creative with their own list) might include:
(a) the right to be well informed about important aspects of the product.
(b) the right to be protected against questionable products and marketing practices.
(c) the right to influence products and marketing practices in ways that will improve the
“quality of life.”
New rights might include:
(a) the right to have a free and unregulated Internet.
(b) the right to limit spam mail (notice how this might be in conflict with the above).
(c) the right to protect children from pornography on the Internet (again, a potential
conflict with free speech).
Difficulty: (3) Page: 607, 608
120. Discuss the four cells of the environmental sustainability grid. Be specific in your
comments.
Answer:
The grid has four cells measured vertically by tomorrow and today and horizontally by
internal and external.
Upper-left quadrant--New Environmental Technology questions:
(a) Is the environmental performance of our products limited by our existing technology
base?
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(b) Is there potential to realize major improvements through new technology?
Upper-right quadrant--Sustainability Vision questions:
(a) Does our corporate vision direct us toward the solution of social and environmental
problems?
(b) Does our vision guide the development of new technologies, markets, products, and
processes?
Lower-left quadrant--Pollution Prevention questions:
(a) Where are the most significant waste and emission streams from our current
operations?
(b) Can we lower costs and risks by eliminating waste at the source or by using its as
useful input?
Lower-right quadrant--Product Stewardship questions:
(a) What are the implications for product design and development if we assume
responsibility for a product’s entire life cycle?
(b) Can we add value or lower costs while simultaneously reducing the impact of our
products?
Difficulty: (3) Page: 610, Figure 16-1
121. List and then briefly describe the five (5) principles of enlightened marketing.
Answer:
Enlightened marketing consists of the following five (5) principles:
a) Customer-oriented marketing--this means that the company should view and organize
its marketing activities from the consumer’s point of view. It should work hard to sense,
serve, and satisfy the needs of a defined group of customers.
b) Innovative marketing--requires that the company continuously seek real product and
marketing improvements.
c) Value marketing--the should put most of its resources into value-building marketing
investments.
d) Sense-of-mission marketing--means that the company should define its mission in
broad social terms rather than narrow product terms. When a company defines a social
mission, employees feel better about their work and have a clearer sense of direction.
e) Societal marketing--an enlightened company makes marketing decisions by
considering consumers’ wants and interests, the company’s requirements, and society’s
long-run interests. Alert companies view societal problems as opportunities.
Difficulty: (3) Page: 614-619
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122. A societally-oriented marketer wants to design products that are not only pleasing
but also beneficial. These products can be classified according to their degree of
immediate consumer satisfaction and long-run consumer benefit. Briefly describe the
four types of societal products as outlined by the text (use the societal classification of
products grid as a base for your classification and description). Provide an example of
each type of product.
Answer:
As shown on the societal classification of products grid, the products are:
(a) Deficient products--products that have neither immediate appeal nor long-run
benefits. Such as bad-tasting and ineffective medicine.
(b) Pleasing products--products that give high immediate satisfaction but may hurt
consumers in the long run. Such as cigarettes.
(c) Salutary products--products that have low appeal but may benefit consumers in the
long run. Such as dental floss.
(d) Desirable products--products that give both high immediate satisfaction and high
long run benefits. Such as a tasty and nutritious breakfast.
Difficulty: (2) Page: 618, Figure 16-3
APPLICATION QUESTION
123. As indicated in the text, members of the American Marketing Association are
committed to ethical, professional conduct. To ensure that standards are met and
maintained, the organization has constructed a voluntary Code of Ethics. Take each of
the illustrations listed below and (a) decide whether the conduct described is ethical or
not, (b) cite which portion of the AMA Code of Ethics might govern the illustration, and
(c) describe how you might correct the situation (if you would). Your answer need not be
lengthy, however, it must be clear as to its meaning.
Illustration A--Mary Woods receives a phone call during the evening hours from Hoskins
Research. The person on the phone asks Mary if she would be willing to answer a few
questions about health care and her personal preferences in health care for a national
survey. Mary agrees. After ten short demographic questions that really don’t address
many health care issues, the interviewer begins to try and sell Mary a health insurance
policy from a nationally recognized health insurance firm.
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Illustration B--James Rogers is the president of Advanced Micro Systems. His company
produces a truly unique software product that allows for total integration between all
IBM compatible and Apple computer products. This means that these two different
systems can “talk” to one another with speed and accuracy. Rogers realizes the
uniqueness of AMS’s product. However, a new competitor is just getting started in the
field and has a similar (though not as good) product that is slightly cheaper than AMS’s
product. This threat of competition has angered Jim to the extent that he has told all of
his dealers that if they carry the competing product they will not be allowed to sell the
AMS product and, if necessary, AMS will take their business to other distributors that
directly compete with the existing dealers.
Answer:
*****Instructor’s Note: The instructor may wish to give this as a take-home assignment,
embellish the list, or add further instructions or parameters. For best results, make
instructions clear and make sure that students have carefully read Table 16-2 or this
question will be very difficult to answer.*****
Illustration A--the “marketing research” firm appears to be a selling organization. The
AMA Code of Ethics governing the practice of marketing research “prohibits selling or
fundraising under the guise of conducting research.” This company’s practices are not
ethical. To correct the situation, the company might collect data during one interview
and then ask permission to have a sales person call at a later date. The company should
clearly ask questions about health care and not attempt to sell under the guise of research.
Illustration B--Mr. Rogers has let his emotions govern his treatment of his distributors.
Because he has a unique product, he is able to threaten his distributors with withholding
supply and transference of business to competitors. Under the AMA Code of Ethics
governing distribution, marketers should “not use coercion in the marketing channel.”
Mr. Rogers should meet the new competitor fairly by producing and marketing a better
product at a better price. All products that begin as monopolies eventually attract
competition and must be dealt with in an above board manner.
Difficulty: (2) Page: 622, 623, Table 16-2
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