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BUS 360 Test Two: Chapters 5-9

aspects of the external environment that affect a company’s business, such as the culture, demographics, social trends, technological advances, economic situation, and political/regulatory environment, or CDSTEP
macroenvironmental factors
the shared meanings, beliefs, morals, values, and customs of a group of people
culture
entails easy-to-spot visible nuances of a country’s culture, such as artifacts, behavior, dress, symbols, physical settings, ceremonies, language differences, colors and tastes, and food preferences, and subtler aspects which are difficult to identify
country culture
the influence of an area within a country in which people live
regional culture
information about the characteristics of human populations and segments, especially those used to identify consumer markets such as by age, gender, income and education
demographics
a group of people of the same generation whom typically have similar purchase behaviors because they have shared experiences and are in the same stage of life
generational cohort
Members of Generation Z (Gen Z) are also known as …
Digital Natives
people in this group were born into a world that already was full of electronic gadgets and digital technologies such as the Internet and social networks (2001-2014)
Generation Z (Gen Z)
Members of Generation Y (Gen Y) are also known as …
Millennials
this group is the biggest cohort since the original postwar World War II boom (1977-2000)
Generation Y (Gen Y)
the first generation of latchkey children (those who grew up in homes in which both parents worked), and 50 percent of them have divorced parents (1965-1976)
Generation X (Gen X)
After World War II the birthrate in the United States rose sharply, resulting in a group known as … (1946-1964)
Baby Boomers
a strategic effort by firms to supply customers with environmentally friendly, sustainable merchandise and services
green marketing
exploiting a consumer by disingenuously marketing products or services as environmentally friendly, with the goal of gaining public approval and sales
greenwashing
macroenviornmental factor that has greatly contributed to the improvement of the value of both products and services in the past few decades
technological advances
macroeconomic factor that affects the way consumers buy merchandise and spend money; both in a marketer’s home country and abroad
economic situation
the persistent increase in the prices of goods and services
inflation
changes in the value of a country’s currency relative to the currency of another country which can influence consumer spending
foreign currency fluctuations
the cost of borrowing money
interest rates
comprises political parties, government organizations, and legislation and laws
political/regulatory environment
Generational cohorts, ethnicity, and gender are all considered part of _________ macroenvironmental factors.
demographic
When Julie, the marketing executive for Hope Springs, determined that market segments existed with sufficient disposable income to pay a premium for bottled water, she determined this by examining ________ factors.
demographic
Mobile devices offer consumers an access channel of ever-increasing importance, as demonstrated by consumers’ abilities use of a smartphone app to find water-bottle filling stations for Hope Springs. This is an example of a trend within the ________________ environment.
technological
One of the important features of the __________ environment is the existence of protections for consumers to increase the influence, power, and rights of consumers in dealing with institutions.
political/regulatory
Macroenvironmental trends impact consumers and the organizations that serve them and typically arise from what six types of factors?
demographic, social, economic, technological, cultural, and political/regulatory
What entity is at the center of the marketing environment?
consumers
Which of the following frameworks for analysis is comprised of a company’s capabilities, competitors, and corporate partners?
a) Economic factors
b) Environmental factors
c) Immediate environment
d) Intermediate environment
e) Macroenvironmental factors
c) Immediate environment
The primary strength of PepsiCo is the manufacture, distribution, and promotion of carbonated beverages. These describe which factor of a PepsiCo consumer’s immediate environment?
a) Competitive intelligence
b) Corporate partners
c) Company capabilities
d) Competitors
e) Culture
c) Company capabilities
In the immediate environment, what is the first factor that affects the consumer?
the company itself
When a firm evaluates how other companies react to the firm’s marketing activities, it is attempting to understand which aspect of the immediate environment?
its competitors
Ford Motor Company engages in partnerships with its suppliers, component part makers, unions, transport companies, and dealerships—collectively known as its
a) investors.
b) customers.
c) competitors.
d) corporate partners.
e) customer franchisors.
d) corporate partners.
Your text describes the macroenvironmental factors that operate in the external environment by which acronym?
CDSTEP
Culture, demographics, social issues, technological advances, economic situations, and the political/regulatory environment are all factors that make up which of the following frameworks of analysis?
a) Economic factors
b) Environmental factors
c) Immediate environment
d) Intermediate environment
e) Macroenvironmental factors
e) Macroenvironmental factors
Broadly defined, _____ is (are) the shared meanings, beliefs, morals, values, and customs of a group of people.
culture
When McDonald’s opened its fast-food restaurants in European locations, it had to modify its product offering primarily due to differences in
country culture
In New England, soft-drink beverages are called soda while in many other parts of the country they are called pop. This is an example of the effects of
regional culture
Which of the following is not a demographic listed in your text that would typically be used to identify consumer markets?
a) Age
b) Gender
c) Race
d) Religion
e) Income
d) religion
Consumers who have similar purchase behaviors because they have shared experiences and are in the same stage of life are known as a _____ cohort.
generational
What group of people are referred to as Digital Natives?
Gen Z
Which of the following best describes the current income distribution in the United States?
a) Income has become evenly distributed.
b) Income between the highest-income and lower-income groups has grown more polarized.
c) The purchasing power of all income groups has grown steadily over the past decade.
d) The middle class has outpaced all other income groups.
e) The number of high-income earners has fallen sharply.
b) Income between the highest-income and lower-income groups has grown more polarized.
_______ consumers in the United States have increasing influences on mainstream U.S. culture, and the buying power of this group is projected to reach $1.3 trillion in 2015.
a) African American
b) Hispanic
c) Native American
d) Asian American
e) Pacific Islander
b) Hispanic
Which ethnic group represents the fastest-growing minority population and tends to earn more, have more schooling, and be more likely to be professionally employed or own a business?
a) African Americans
b) Hispanics
c) Native Americans
d) Asian Americans
e) Pacific Islanders
d) Asian Americans
Advertising guidelines stating that companies cannot link unhealthy foods with cartoon and celebrity figures are geared toward which social trend?
health and wellness concerns
The social trend of _____ is causing consumers to question whether or not firms are truly operating with consideration for the environment or simply changing marketing efforts in order to appear that they are.
a) thrift
b) health and wellness concerns
c) greener consumers
d) privacy concerns
e) a time-poor society
c) greener consumers
Firms that disingenuously market products as environmentally friendly with the goal of gaining public approval and sales, rather than actually improving the environment, are guilty of
greenwashing
_____ involves a strategic effort by firms to supply customers with environmentally friendly, sustainable merchandise and services.
green marketing
The ability of marketers to use mobile applications, Facebook, and Twitter to more effectively target and reach their customers is an example of which macroenvironmental factor?
technological advances
Which of the following is the most likely result of inflation?
a) Consumers will purchase more products overall.
b) Consumers will switch from lower-priced brands to more expensive ones.
c) Consumers will buy more discretionary items.
d) Consumers will switch to less expensive options for necessities.
e) Consumers will stop buying low-cost luxury items.
d) Consumers will switch to less expensive options for necessities.
Which of the following laws was passed to prohibit monopolies and other activities that would restrain trade or competition, as well as make fair trade within a free market a national goal?
a) 1914 Clayton Act
b) 1890 Sherman Antitrust Act
c) 1936 Robinson-Patman Act
d) 1938 Wheeler-Lea Act
e) 1914 Federal Trade Commission Act
b) 1890 Sherman Antitrust Act
Which of the following is not an example listed in your text of legislation that has been passed to protect consumers?
a) Marketers must abstain from false advertising.
b) Manufacturers must refrain from using harmful materials that pose a risk to consumers.
c) Retailers must honor price-match guarantees from other stores.
d) Organizations must adhere to fair and reasonable business practices when communicating with consumers.
e) Marketers must abstain from misleading advertising.
c) Retailers must honor price-match guarantees from other stores.
What are the steps in the consumer decision process model?
need recognition, information search, alternative evaluation, purchase, post-purchase
occurs when consumers recognize they have an unsatisfied need, and they would like to go from their actual, needy state to a different, desired state
need recognition
pertain to the performance of a product or service
functional needs
pertain to the personal gratification consumers associate with a product and/or service
psychological needs
occurs when the buyer examines his or her own memory and knowledge about the product or service gathered through past experiences
internal search for information
occurs when the buyer seeks information outside his or her personal knowledge base to help make the buying decision
external search for information
Individuals who have a ________________ believe they have some control over the outcomes of their actions
internal locus of control
Consumers who have a _______________ believe that fate or other external factors control all outcomes
external locus of control
What are the five types of risk associated with purchase decisions that can delay or discourage a purchase?
performance, financial, social, physiological, and psychological
involves the perceived danger inherent in a poorly performing product or service
Performance risk
risk associated with a monetary outlay and includes the initial cost of the purchase as well as the costs of using the item or service
Financial risk
involves the fears that consumers suffer when they worry others might not regard their purchases positively
Social risk
refers to the fear of an actual harm should the product not perform properly
physiological (or safety) risk
risks associated with the way people will feel if the product or service does not convey the right image
psychological risks
all possible choices for a product category
Universal sets
brands or stores that can be readily brought forth from memory
retrieval sets
the alternative brands or stores that the consumer states he or she would consider when making a purchase decision
evoked set
salient, or important, attributes about a particular product
Evaluative criteria
product or service features that are important to the buyer and on which competing brands or stores are perceived to differ
Determinant attributes
the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives
Consumer decision rules
assumes that the consumer, when evaluating alternatives, trades off one characteristic against another, such that good characteristics compensate for bad characteristics
compensatory decision rule
a compensatory model of customer decision making based on the notion that customers see a product as a collection of attributes or characteristics.
multi-attribute model
the model uses a weighted-average score based on the importance of the importance of various attributes and performance on those issues
multi-attribute model
individuals choose a product or service on the basis of one characteristic or one subset of a characteristic, regardless of the values of its other attributes
noncompensatory decision rule
percentage of customers who buy a product after viewing it
conversion rate
What are the three possible postpurchase outcomes?
customer satisfaction, postpurchase cognitive dissonance, and customer loyalty (or disloyalty)
an internal conflict that arises from an inconsistency between two beliefs or between beliefs and behavior
Postpurchase cognitive dissonance
occurs when consumers spread negative information about a product, service, or store to others
Negative word of mouth
What are the factors that affect the consumer decision process?
marketing mix, psychological factors, social factors and situational factors
motives, attitudes, perception, learning, and lifestyle are considered _________ factors
psychological
a need or want that is strong enough to cause the person to seek satisfaction
motive
a paradigm for classifying people’s motives. it argues that when lower-level, more basic needs are fulfilled people turn to satisfying their higher-level human needs
Maslow’s hierarchy of needs
What are the five levels of Maslow’s hierarchy of needs (lower-level to highest level)?
physiological, safety, love, esteem, self-actualization
__________ needs deal with the basic biological necessities of life—food, drink, rest, and shelter.
Physiological
__________ needs pertain to protection and physical well-being
Safety
__________ needs relate to our interactions with others
Love
_________ needs allow people to satisfy their inner desires
Esteem
occurs when you feel completely satisfied with your life and how you live
self-actualization
a person’s enduring evaluation of his or her feelings about and behavioral tendencies toward an object or idea
attitude
What are the three components of an attitude?
cognitive, affective, and behavioral
_________ component reflects a person’s belief system, or what we believe to be true
cognitive
________ component involves emotions, or what we feel about the issue at hand, including our like or dislike of something
affective
_______ component pertains to the actions we undertake based on what we know and feel
behavioral
the process by which we select, organize, and interpret information to form a meaningful picture of the world
perception
refers to a change in a person’s thought process or behavior that arises from experience and takes place throughout the consumer decision process
Learning
refers to the way consumers spend their time and money to live
Lifestyle
one or more persons whom an individual uses as a basis for comparison regarding beliefs, feelings, and behaviors
Reference group
factors specific to the situation
situational factors
the consumer’s degree of interest in the product or service
Involvement
a purchase decision process during which the consumer devotes considerable time and effort in analyzing alternatives
extended problem solving
occurs during a purchase decision that calls for, at most, a moderate amount of effort and time
Limited problem solving
a buying decision made by customers on the spot when they see the merchandise
impulse buying
The discrepancy between a consumer’s actual state and desired state is associated with which of the following steps in the consumer decision process?
need recognition
What need pertains to the performance of a product or service?
functional need
_____ pertain(s) to the personal gratification consumers associate with the product or service.
psychological needs
The vast majority of products and services are likely to satisfy
a) functional needs.
b) psychological needs.
c) personal needs.
d) both personal and functional needs.
e) both functional and psychological needs.
e) both functional and psychological needs.
According to the consumer decision process, after consumers recognize the need for a product, they then engage in
a) psychological need recognition.
b) an information search.
c) an evaluation of alternatives.
d) the purchase of the product.
e) postpurchase behavior.
b) an information search.
_____ involves the buyer considering his own personal knowledge about a product based on past experience.
a) A purchase based on an impulse
b) An internal search for information
c) An external search for information
d) An experiential search for information
e) A recognition of need
b) An internal search for information
When John was considering buying a new car, he sought out unbiased information and ratings about different makes and models in Consumer Reports magazine as well as from Edmunds.com. Which of the following most closely corresponds to this aspect of the decision process?
a) Need recognition
b) Internal search for information
c) External search for information
d) Experiential search for information
e) Impulse buying
c) External search for information
The fact that a family would spend a lot more time researching the market before buying a new car than it would in the decision to purchase an inexpensive kitchen appliance, like a coffeemaker, can best be explained by which of the following concepts?
a) Locus of control
b) Performance risk
c) Psychological risk
d) Social risk aversion
e) Perceived benefits versus perceived costs of search
e) Perceived benefits versus perceived costs of search
Of the five types of risk associated with purchase decisions, which one involves the perceived danger inherent in a poorly performing product or service?
performance
When a manufacturer offers a money-back guarantee on the purchase of its products to show that the products will perform as expected, it is most likely attempting to alleviate which risk?
financial
External agencies and government bodies publish safety ratings for cars to help consumers alleviate _____ risk.
physiological
Alternative evaluation often occurs while the consumer is engaged in which of the following steps of the consumer decision process?
a) Need recognition
b) Information search
c) Prepurchase behaviors
d) Product purchase
e) Postpurchase evaluation
information search
When consumers are engaged in the consumer decision process, the specific brands or stores they can readily recall in a product category are referred to as their _____ set.
retrieval
When Catherine was considering different brands of jeans to buy, she could think of only three she would actually consider purchasing. These three brands make up her _____ set.
evoked
The salient or important attributes about a particular product that a consumer bases his or her product evaluation on are called
evaluative criteria
Ethan considered three important attributes when deciding where he would do his banking: the convenience of the location, hours of operation, and interest rates for CDs. In this situation, these three attributes are called
evaluative criteria
Angela considered all sporting-goods stores to be roughly equivalent in most ways; however, she considered REI stores to have an exceptional level of customer service. Customer service, therefore, would be considered a _____ for her in evaluating sporting goods stores.
determinant attribute
Nathan was shopping for a new pair of athletic shoes. Although it would have been nice to take the shoes home immediately after purchasing them, he was willing to trade off immediate availability because he found that he could purchase the shoes online for a 50 percent discount. This is an example of using a
compensatory decision rule.
Because not all purchase intentions result in an actual purchase, marketers calculate the _____ to measure how effectively a decision to purchase a specific product results in a completed purchase.
conversion rate
Marketers that set unrealistically high consumer expectations of a product through advertising or other types of promotion may generate higher initial sales, but it will eventually lead to _____ if the product fails to achieve these expectations.
postpurchase dissatisfaction
Sometimes called buyer’s remorse, _______ is the internal conflict that arises from an inconsistency between two beliefs, or between beliefs and behavior.
postpurchase cognitive dissonance
According to Maslow’s hierarchy of needs, what need do people seek to meet first before meeting any other need?
physiological
Roberta works out at a health club, goes to yoga classes, and reads magazines about women’s health to satisfy her inner desires. Which of Maslow’s needs is Roberta fulfilling?
esteem
What are the three components that make up a person’s attitude?
Cognitive, affective, behavioral
Sandy thinks the east side of her city is a great area to own a home and raise a family. John thinks the east side has a lot of crime, poor schools, and would be a poor choice of location to own a home and raise a family. Sandy and John have different _____ regarding the east side of the city.
a) temporal states
b) reference groups
c) needs
d) perceptions
e) motives
d) perceptions
When she was looking for a new car, Francesca was considering both American and foreign-made vehicles, but her father and boyfriend both encouraged her to buy American-made brands. Which of the following social factors explains this type of influence?
a) Culture
b) Temporal state
c) Lifestyle factors
d) Reference groups
e) Situational factors
d) Reference groups
According to the elaboration likelihood model, which of the following variables determines whether limited or extended problem solving will operate in a particular purchase decision?
a) Purchase readiness
b) Attentional capacity
c) Likelihood of purchase
d) The level of involvement
e) The level of elaborate thinking
d) The level of involvement
A purchase decision that typically involves (at most) a moderate amount of effort and time is called
limited problem solving
Kerry was in the grocery store and saw a display for a new organic yogurt. She had not planned to buy it but decided on the spot to buy one and try it. Kerry’s purchase represents?
impulse buying
Whenever Meredith buys toothpaste, she always automatically reaches for the same brand and puts it in her shopping cart with no thought or effort. Meredith is engaged in?
habitual decision making
refers to the process of buying and selling goods or services to be used in the production of other goods and services for consumption by the buying organization and/or resale by wholesalers and retailers
Business-to-business (B2B) marketing
the link between consumers’ demand for a company’s output and the company’s purchase of necessary inputs to manufacture or assemble that particular output
derived demand
What are the four B2B markets?
resellers, institutions, government, manufacturers and service providers
marketing intermediaries that resell manufactured products without significantly altering their form
Resellers
Firm engaged in buying, taking title to, often storing, and physically handling goods in large quantities, then reselling the goods (usually in smaller quantities) to retailers or industrial or business users.
wholesellers
A type of reseller or marketing intermediary that resells manufactured products without significantly altering their form. Distributors often buy from manufacturers and sell to other businesses like retailers in a B2B transaction.
distributors
What are the steps in the B2B buying process?
need recognition, product specification, RFP process, proposal analysis and supplier selection, order specification, vendor performance assessment (using metrics)
the first stage of the B2B buying process, the buying organization recognizes, through either internal or external sources, that it has an unfilled need
need recognition
a common process through which organizations invite alternative vendors or suppliers to bid on supplying their required components or specifications
request for proposals (RFP)
an Internet site whose purpose is to be a major starting point for users when they connect to the web
web portal
The group of people typically responsible for the buying decisions in large organizations.
buying center
What are the six buying roles that are included in the buying center?
initiator, influencer, decider, buyer, user, gatekeeper
the person who first suggests buying the particular product or service
initiator
the person whose views influence other members of the buying center in making the final decision
influencer
the person who ultimately determines any part of or the entire buying decision—whether to buy, what to buy, how to buy, or where to buy
decider
the person who handles the paperwork of the actual purchase
buyer
the person who consumes or uses the product or service
user
the person who controls information or access, or both, to decision makers and influencers
gatekeeper
reflects the set of values, traditions, and customs that guide its employees’ behavio
organizational culture
when a group refuses to deal commercially with an organization to protest against its policies
boycott
What are the four general types of corporate buying center cultures?
autocratic, democratic, consultative, and consensus
buying center where even though there may be multiple participants, one person makes the decision alone
autocratic
A buying center in which the majority rules in making decisions.
democratic
A buying center in which one person makes the decision but he or she solicits input from others before doing so.
consultative
A buying center in which all members of the team must reach a collective agreement that they can support a particular purchase.
consensus
a promotional technique used by B2B sellers to provide information about a product or service in an educational context, thereby not appearing like a promotion or propaganda.
white papers
What are the three types of buying situations?
new buy, straight rebuy, modified rebuy
In a _______ situation, a customer purchases a good or service for the first time, which means the buying decision is likely to be quite involved because the buyer or the buying organization does not have any experience with the item
new buy
any marketing tactic that relies on earning customer interest rather than buying it
inbound marketing
Refers to when the buyer has purchased a similar product in the past but has decided to change some specifications, such as the desired price, quality level, customer service level, options, or so forth.
modified rebuy
Refers to when the buyer or buying organization simply buys additional units of products that have previously been purchased.
straight rebuy
_____ reflects the link between consumers’ demand for a company’s product and the company’s purchase of necessary inputs to manufacture or assemble that particular product.
derived demand
In B2B markets, _____ are firms that buy and reprocess products and services before selling them again to the next buyer.
manufacturers
Which of the following is an example of a reseller?
a) Manufacturer
b) Producer
c) Wholesaler
d) Institution
e) Government
c) Wholesaler
In terms of business markets, organizations like hospitals that provide goods and services to people in their care are classified as
a) manufacturers.
b) producers.
c) resellers.
d) institutions.
e) governments.
d) institutions.
With its estimated outlay of over $500 billion for fiscal year 2014, the Pentagon represents which type of B2B organization?
a) Manufacturer
b) Distributor
c) Reseller
d) Institution
e) Government
e) Government
Which of the following statements regarding the B2B buying process is true?
a) The B2B buying process is identical to the B2C buying process.
b) The B2B buying process is less complex than the B2C buying process.
c) In the B2B buying process, decisions are made quickly and without much consideration.
d) In the B2B buying process, formal performance evaluations of the vendor generally do not occur.
e) In the B2B buying process, the search for information and evaluation of alternatives is more formal and structured.
e) In the B2B buying process, the search for information and evaluation of alternatives is more formal and structured.
The business-to-business buying process is initiated by which of the following steps?
a) The RFP process
b) Need recognition
c) Proposal analysis
d) Product specification
e) Vendor performance assessment
b) Need recognition
The acronym RFP, when used by those involved in business-to-business buying, stands for
request for proposals
Used by many smaller companies to help streamline procurement or distribution processes, _____ is an Internet site whose purpose is to be a major starting point for users when they connect to the web.
web portal
In the B2B buying process, _____ can provide tremendous cost savings for firms because they eliminate periodic negotiations and routine paperwork, and offer the means to form a supply chain that can respond quickly to the buyer’s needs.
web portals
In this stage of the business-to-business buying process, firms are likely to narrow their selection to a few suppliers, often those with which they have existing relationships, and discuss key terms of the sale.
Proposal analysis, vendor negotiation, selection
What is the final stage in the business-to-business buying process?
Vendor performance assessment
Which of the following is not one of the six buying center roles?
a) Initiator
b) Advisor
c) Decider
d) Buyer
e) Gatekeeper
b) Advisor
John is involved in the buying center of a large organization. He ultimately will determine whether to buy, what to buy, how to buy, or where to buy. What role does John play in this situation?
decider
The individual who controls the flow of information or access to important decision makers serves as the _____ in the buying center.
gatekeeper
Pharmaceutical companies have been criticized for direct-to-consumer television ads promoting the use of their brands of medication for specific medical conditions. With respect to buying centers, the pharmaceutical company plays the role of _____ in this situation.
influencer
Although she wasn’t told this when hired, at her new job Dana noticed that the employees eat lunch at their desks while continuing to work and that on Fridays most everyone dresses casually. These behaviors are most likely part of the
a) organizational culture.
b) business plan.
c) corporate values.
d) organizational demographics.
e) code of ethical conduct.
a) organizational culture.
A firm’s _____ reflects the set of values, traditions, and customs that guide its employees’ behavior.
organizational culture
In a(n) _____ buying center, there may be many participants, but one person makes the decision alone.
autocratic
In a(n) _____ buying center, one person is authorized to make a decision, but input from others is gathered before doing so.
consultative
In _____ buying centers, all members of the team must reach a collective agreement that they can support a particular purchase.
consensus
Autocratic buying centers are characterized by
a) a single decision maker.
b) collective agreement.
c) majority rule.
d) the solicitation of many opinions.
e) many decision makers.
a) a single decision maker.
What social media tools is mainly used for professional networking in the B2B marketplace?
LinkedIn
Although social media are used to build relationships in B2B contexts, the majority of B2B marketers use _____ for their marketing efforts.
white papers
Most B2B buying situations can be categorized into three types: new buys, straight rebuys, and
modified rebuys
The purchase of capital equipment by a company, which would likely be quite an involved process, is an example of a _____ situation.
new buy
In a _____ situation, the buying center is likely to proceed through all six steps in the buying process and involve many people in the buying decision.
new buy
The university will purchase new computers during the summer to update its computer labs. Although the new computers will be more advanced in terms of their technology, the purchase itself will involve some of the same considerations as those used for previous purchases. This is an example of which of the following types of buying situation?
modified rebuy
When FedEx Office replenishes its supply of copy paper, it most likely involves a _____ situation.
straight rebuy
In _____, the buyer is often the only member of the buying center involved in the process.
straight rebuys
Economic analysis using metrics, infrastructure and technological analysis, government actions (or inactions) and sociocultural analysis are all a part of the
four sets of criteria necessary to assess a country’s markets
What are the three major economic factors firms must look at when conducting an economic analysis?
general economic environment, market size and population growth rate, and real income
when a country imports more goods than it exports
trade deficit
when a country exports more goods than it imports
trade surplus
the market value of the goods and services produced by a country in a year
Gross Domestic Product (GDP)
GDP plus the net income earned from investments abroad (minus any payments made to nonresidents who contribute to the domestic economy)
Gross National Income (GNI)
a theory that states that if the exchange rates of two countries are in equilibrium, a product purchased in one will cost the same in the other, if expressed in the same currency
purchasing power parity (PPP)
the basic facilities, services, and installations needed for a community or society to function, such as transportation and communications systems, water and power lines, and public institutions such as schools, post offices, and prisons
Infrastructure
What are the four key elements of a country’s infrastructure that marketers are concerned with?
transportation, distribution channels, communications, and commerce
a tax levied on a good imported into a country
tariff (duty)
designates a minimum or maximum quantity of a product that may be brought into a country during a specified time period
quota
Pros of tariffs and quotas
benefit domestically made products (because they reduce foreign competition)
Cons of tariffs
Cons of quotas
reduce the availability of imported merchandise
the regulation of a country’s currency exchange rate
exchange control
the measure of how much one currency is worth in relation to another
exchange rate
intergovernmental agreement designed to manage and promote trade activities for specific regions
trade agreements
consists of those countries that have signed a particular trade agreement
trading bloc
Which trade agreement represents the highest level of integration across individual nations?
the European Union (EU)
What are the six Hofstede cultural dimensions?
power distance, uncertainty avoidance, individualism, masculinity, time orientation and indulgence
willingness to accept social inequality as natural (Hofstede Cultural Dimension)
power distance
the extent to which the society relies on orderliness, consistency, structure, and formalized procedures to address situations that arise in daily life (Hofstede Cultural Dimension)
uncertainty avoidance
perceived obligation to and dependence on groups.(Hofstede Cultural Dimension)
individualism
the extent to which dominant values are male oriented. A lower masculinity ranking indicates that men and women are treated equally in all aspects of society; a higher masculinity ranking suggests that men dominate in positions of power. (Hofstede Cultural Dimension)
masculinity
short- versus long-term orientation. A country that tends to have a long-term orientation values long-term commitments and is willing to accept a longer time horizon for, say, the success of a new product introduction (Hofstede Cultural Dimension)
time orientation
the extent to which society allows for the gratification of fun and enjoyment needs or else suppresses and regulates such pursuits (Hofstede Cultural Dimension)
indulgence
A ________ masculinity ranking indicates that men and women are treated equally in all aspects of society.
lower
A _________ masculinity ranking suggests that men dominate in positions of power.
higher
What are the four BRIC countries?
Brazil, Russia, India and China
producing goods in one country and selling them in another
exporting
a contractual agreement between a firm, the franchisor, and another firm or individual, the franchisee
franchising
collaborative relationships between independent firms, though the partnering firms do not create an equity partnership
strategic alliances
formed when a firm entering a market pools its resources with those of a local firm
joint venture
requires a firm to maintain 100 percent ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries
direct investment
What does STP stand for?
segmentation, targeting, and positioning
The following best describe __________________: (1) sell the same product or service in both the home country market and the host country; (2) sell a product or service similar to that sold in the home country but include minor adaptations; and (3) sell totally new products or service
potential global product strategies
when companies initially develop products for niche or underdeveloped markets and then expand them into their original or home markets
reverse innovation
when firms standardize their products globally but use different promotional campaigns to sell them
glocalization
The processes by which goods, services, capital, people, information, and ideas flow across national borders are referred to as
globalization
According to your text, which of the following is not one of the fundamental changes that have resulted in global markets?
a) Reductions or eliminations of trade barriers by country governments
b) Decreasing concerns of distance and time with regard to moving products and ideas across countries
c) Increased use of tariffs and embargoes by countries
d) The standardization of laws across borders
e) Globally integrated production processes
c) Increased use of tariffs and embargoes by countries
If a firm wants to conduct a country market analysis, it must look at major economic factors using well-established metrics. Which of the following is not a major economic factor that the firm would consider?
a) General economic environment
b) Trade agreements
c) Market size
d) Population growth
e) Real income
b) Trade agreements
Because the United States imports more goods than it exports, it operates under a(n)
trade deficit
The most widely used metric used to gauge the size and market potential of an economy is ______, which is defined as the market value of the goods and services produced by a country in a year.
gross domestic product (GDP)
Firms prefer to manufacture in a country that has _____ because it signals a greater opportunity to export products to more markets.
a trade surplus
_____ includes both the market value of the goods and services produced by a country in a particular year plus the net income earned from investments abroad.
gross national income (GNI)
The Economist’s Big Mac Index, which suggests that exchange rates should adjust to equalize the cost of a basket of goods and services wherever it is bought around the world, is an example of which of the following metrics?
purchasing power parity
In terms of market size and population growth rate, which of the following is a trend that is occurring in the world market that impacts the marketing of goods and services?
a) Global population growth is equally dispersed among nations.
b) Growth has been relatively equal for both developed and less developed nations.
c) Marketing to more rural populations is more costly than reaching urban areas.
d) The growth rate of the world population will remain relatively constant in the future.
e) Population shifts are causing a decline in the percentage of people in the middle class.
c) Marketing to more rural populations is more costly than reaching urban areas.
Anita is conducting a country market assessment and is focusing on four key elements: distribution channels, transportation systems, communication systems, and commerce. In doing so, Anita is evaluating which component of the market assessment?
infrastructure
In most cases, _______ are intended to make imported goods more expensive and thus less competitive with domestic products, which in turn protects domestic industries from foreign competition.
tariffs
The United States wants to limit the amount of a product that can be imported into the country for a period of time by setting a maximum import quantity. To do so, the United States should institute
a quota
The measure of how much one currency is worth in relation to another is referred to as
the exchange rate
Which of the following is the major trade agreement between the United States, Canada, and Mexico?
NAFTA
Which of Hofstede’s cultural dimensions relates to a willingness to accept social inequality as natural?
power distance
Which of the following accurately represents the countries that make up what is known as the BRIC countries?
Brazil, Russia, India, China
Which BRIC country is one of the world’s fastest-growing markets and is home to one of the youngest populations in the world?
India
The global entry strategy whereby goods are produced in one country and sold in another is known as
exporting
If a small business wants to take the least risky strategy to enter its first foreign market, it would choose which of the following global entry strategies?
exporting
_____ involves a binding contractual agreement between two businesses whereby the marketing operations are tightly controlled and often standardized.
franchising
Although they do not directly invest in one another, independent firms entering into collaborative partnerships to expand globally are called
strategic alliances
A(n) _____ forms when a firm entering a new market pools its resources with those of a local firm to form a new company in which ownership, control, and profits are shared.
joint venture
BMW, the German company that manufactures automobiles, motorcycles, and other products, owns and operates a manufacturing plant in Spartanburg, South Carolina, in the United States. This is an example of which global entry strategy?
direct investment
Which global entry strategy has the highest degree of risk?
direct investment
The global product strategy a firm chooses depends on
the needs of its target market
Although China represents one of the largest markets for soup in the world, Campbell’s Soup Company had to invest considerable time and effort in making changes to its existing products to sell them in China primarily due to
cultural differences
In the process of ______, companies initially develop products for niche or underdeveloped markets, and then expand them into their original or home markets.
reverse innovation
In pricing products in parts of Europe, including Belgium, Italy, Spain, Greece, and France, U.S. companies need to be aware that sales (i.e., temporary promotional discounts)
a) must be advertised.
b) must last for three weeks.
c) are illegal.
d) must be at least 30 percent off.
e) are allowed only twice per year.
e) are allowed only twice per year.
As noted in your text, the complexity of a global distribution channel is determined by
a) how many products the seller needs to distribute.
b) how many firms a seller needs to deal with to get its merchandise to the customer.
c) the language barriers that exist between firms in different countries.
d) the type of product that must be distributed.
e) government regulations that exist in foreign countries.
b) how many firms a seller needs to deal with to get its merchandise to the customer.
The fact that Mercedes-Benz is known by three Chinese names in Asia—peng zee in Cantonese for Hong Kong, peng chi in Mandarin for Taiwan, and ben chi in Mandarin for mainland China—illustrates the importance of developing different _____ for global markets.
communication strategies
List the global entry strategies from least risky to most risky
export, franchising, strategic alliance, joint venture, direct investment
What are the five steps in the STP process?
establish strategy or objective, use segmentation methods, evaluate segment attractiveness, select target market, identify and develop positioning strategy
What are the five main types of segmentation methods?
geographic, demographic, psychographic, benefits, behavioral
Continents and locations within the United States are examples of _____ segmentation.
geographic
Age, gender, income and education are examples of ______ segmentation.
demographic
Lifestyle, self-concept and self-values are examples of _____ segmentation.
psychographic
Convenience, economy and prestige are examples of _________ segmentation.
benefits
Occasional and loyalty are examples of __________ segmentation.
behavioral
organizes customers into groups on the basis of where they live
geographic segmentation
groups consumers according to easily measured, objective characteristics such as age, gender, income, and education
demographic segmentation
A method of segmenting customers based on how they spend their time and money, what activities they pursue, and their attitudes and opinions about the world in which they live.
psychographic segmentation
studies how people self-select, as it were, based on the characteristics of how they choose to occupy their time (behavior) and what underlying psychological reasons determine those choices
Psychographics
goals for life, not just the goals one wants to accomplish in a day
self-values
the image people ideally have of themselves
self-concept
the way we live
lifestyles
What are the three primary motivations for US consumers?
ideals, achievement, and self-expression
People who are primarily motivated by ______ are guided by knowledge and principles.
ideals
People who are primarily motivated by ______ look for products and services that demonstrate success to their peers.
achievement
People who are primarily motivated by _______ desire social or physical activity, variety, and risk.
self-expression
groups consumers on the basis of the benefits they derive from products or services
benefit segmentation
divides customers into groups on the basis of how they use the product or service
behavioral segmentation
A type of behavioral segmentation based on when a product or service is purchased or consumed.
occasion segmentation
Strategy of investing in loyalty initiatives to retain the firm’s most profitable customers.
loyalty segmentation
The grouping of consumers on the basis of a combination of geographic, demographic, and lifestyle characteristics.
geodemographic segmentation
What are the descriptive criteria to determine whether a segment is worth pursuing?
identifiable, substantial, reachable, responsive, and profitable
Number of people in the segment
Segment size
Percentage of customers in the segment who are likely to adopt the product/service
Segment adoption percentage
Purchase price × number of times the customer would buy the product/service in a year
Purchase behavior
(Selling price – variable costs) ÷ selling price
Profit margin percentage
Advertising expenditure, rent, utilities, insurance, and administrative salaries for managers
Fixed costs
A marketing strategy a firm can use if the product or service is perceived to provide the same benefits to everyone, with no need to develop separate strategies for different groups.
undifferentiated targeting strategy (mass marketing)
A strategy through which a firm targets several market segments with a different offering for each.
differentiated targeting strategy
A marketing strategy of selecting a single, primary target market and focusing all energies on providing a product to fit that market’s needs.
concentrated targeting strategy
An extreme form of segmentation that tailors a product or service to suit an individual customer’s wants or needs
micromarketing (one-to-one marketing)
small text files a website stores in a visitor’s browser
cookies
a process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products
market positioning
The unique value that a product or service provides to its customers and how it is better than and different from those of competitors.
value proposition
Reflects the relationship of benefits to costs, or what the consumer gets for what he or she gives.
value
displays, in two or more dimensions, the position of products or brands in the consumer’s mind
perceptual map
where a particular market segment’s ideal product would lie on the perceptual map
ideal points
When a firm evaluates its overall mission, including its strengths, weaknesses, opportunities, and threats, it is engaged in which step of the segmentation, targeting, and positioning process?
Establishing overall strategy or objectives
Which step in the STP process develops descriptions of the different segments? (This helps firms better understand the customer profiles in each segment?)
Select segmentation method
Lawn-care-products manufacturer Scotts has developed easy-to-follow, annual lawn care programs to help homeowners develop thick, green lawns that will combat weeds, insects, and diseases. The specific steps that must be used and their timing vary based on climate. What type of segmentation should Scotts use as the basis to design these programs?
Geographic
_____ segmentation, the most common means to define segments, involves defining groups based on characteristics such as age, gender, income, and education.
demographic
Jack describes himself as having a strong need to belong to a group, which motivates him to seek out activities that involve others. Marketers would use this type of information when developing _____ segments.
psychographic
The overriding desires that drive how people live their lives are called
self-values
Which segmentation method is most closely related to providing value by satisfying customers’ needs and wants?
benefit
______ segmentation delves into how consumers actually describe themselves.
psychographic
PRIZM and ESRI’s Tapestry are two of the most widely used tools for _______ segmentation.
geodemographic
Behavioral segmentation based on when a product or service is purchased or consumed is called _____ segmentation.
occasion
During which step of the STP process do marketers ask whether the segment is identifiable, substantial, reachable, responsive, and profitable?
evaluate segment atractiveness
The publishing conglomerate Conde Nast is able to purchase mailing lists of people who have bridal interests, knowing that its Modern Bride magazine customers are somewhat distinct from those who subscribe to GQ. In terms of evaluating segment attractiveness, this is a way of ensuring the segment is
identifiable
For a segmentation strategy to be successful, the customers in the segment must react similarly and positively to a firm’s offering, corresponding to which of the following criteria for evaluating segment attractiveness?
responsive
For the ______ criteria to be met when evaluating segment attractiveness, the consumer must know the product or service exists, understand what it can do for him or her, and recognize how to buy it.
reachable
Market growth, market competitiveness, and market access are all important factors in analyzing if a segmentation strategy is
profitable
When everyone might be considered a potential user of its product, a firm likely uses a(n) _____ targeting strategy.
undifferentiated
A manufacturer of T-shirts concentrates all its efforts on cost containment by offering the product in only one size but in a variety of colors, using a one-size-fits-all approach. This involves a _____ targeting strategy.
mass marketing
General Motors targets several different market segments and designs separate automobile makes and models for each. This is an example of
differentiated marketing.
Large firms with multiple offerings in a particular product category engage in _____ targeting strategies to obtain a bigger share of the market, increase the overall market for the product categories they sell, and diversify their businesses.
differentiated
When an organization selects a single, primary target market and focuses all its energies on providing a product to fit that market’s needs it is using a(n) _____ targeting strategy.
concentrated
Mr. Dennison knows each and every child who comes in to his Kumon reading center and prides himself on knowing how he can personally address each of their reading challenges. What type of market coverage strategy is Mr. Dennison employing in his business?
micromarketing
Lands’ End allows customers buying shirts to choose from a variety of fabrics and types of collar and sleeve based on the customer’s specific measurements, capitalizing on new technologies to mass customize its products and services. This is an example of
micromarketing
Small text files used by websites to track potential customers’ visits to a website and provide details on how the customer has searched the site are called
cookies
Which of the following best describes the notion of market positioning?
a) The position that a company holds in the market in terms of size relative to its competitors
b) The process of increasing a firm’s overall sales and as a result, increasing its market share
c) The place the product occupies in consumers’ minds relative to competing products
d) The geographic location of the headquarters of a corporation
e) A group of organizations that have similar wants and needs
c) The place the product occupies in consumers’ minds relative to competing products
The positioning strategy can help communicate a brand’s _____, representing the unique value provided to customers.
value proposition
_____ is a tool used to visually display how consumers perceive the position of products or brands in the market on different dimensions relative to competitors.
a perceptual map
The _____ indicates where a particular market segment’s ideal product lies on the perceptual map.
ideal point
What is the first step marketers use to derive a perceptual map?
a) Identify competitors’ positions
b) Determine consumers’ perceptions and evaluations of the product or service in relation to competitors’
c) Monitor the positioning strategy
d) Identify the market’s ideal points and size
e) Determine consumer preferences
b) Determine consumers’ perceptions and evaluations of the product or service in relation to competitors’

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