Social Forces
Social forces can have a dramatic impact on marketing strategy.
A Change in economic forces.
From the start of the war on terrorism, billions have been spent on the war effort in Iraq. According to an environmental scan of the United States, this military expenditure is an example of this.

Culture is a component of this type of environmental force that must be scanned to assess its impact on the organization's marketing environment.
Purpose of environmental scanning
only identify and interpret trends in the marketplace.
Multicultural marketing programs
Combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preferences, and lifestyles of different races.
Components of a consumer's income
1. Gross 2.

Disposable 3. Discretionary income

Discretionary income
The owner of your local KFC franchise had a good year with rising revenues and reduced operating costs that resulted in a personal income of approximately $100,000. One-third of that was take for local, state, and federal income taxes and another third went to pay for a home mortgage, car payments, food, clothing, and other necessities. The remaining third is this.
Dramatic technological
example: the increasing use of e-readers like Amazon's Kindle and tablet devices like Apple iPad to read digital books.

If taxes rise at a faster rate than incomes consumers will
have less disposable income and try to economize.
The income, expenditures, and resources that affect the cost of running a business and household.
Pure Competition
There are many sellers and they each have a similar product, such as commodities common to agribusiness.
USPS has had to cope with new competitive forces in the marketplace.
Many firms now use e-mail and the internet to promote their products instead do sending promotional literature to current and prospective customers through the mail.

Fedex and UPS continue to grow, as they have both expedited and ground package delivery services.

Pure monopoly
the form of competition that occurs when only one firm sells the product.
An example of how regulatory forces affect the marketing environment.

Hoffman-Laroche Ltd. and BASF AG two international pharmaceutical companies, were ordered to pay 725 million in fines for plotting to raise and fix prices of vitamins used in virtually every home in the US.

Barriers to entry
Business practices or conditions that make it difficult for new firms to enter the market.
External Search
Needed when past experience or knowledge is insufficient, the risk of making a wrong purchase decision is high, and the cost of gathering information is low.
Physical Surroundings
Five Situational influences have an impact on a consumer's purchase decision process.

They are: purchase task, social surrounding, ____________, temporal effects, and antecedent states.

Cognitive Dissonance.
The feeling of post purchase psychological tension or anxiety consumers may experience when faced with two or more highly attractive alternatives.
Evaluative criteria
consumers often have several criteria for evaluating products.
consumer behavior includes
The actions a person takes in purchasing services and using products and services, including the mental and social processes that come before and after these actions.

Selective retention
If you read a chapter from your marketing textbook the nigh before this test and still cannot remember the correct marketing term to answer this question it may very well be the result of .....
The energizing force that stimulates behavior to satisfy a need
An ideal self-concept
Marketers recognize that people have an actual self-concept and .


The Ford Escape Hybrid SUV was the fist of its kind on the market to use both electricity and gasoline to power this vehicle.

Ford is trying to change consumer attitudes by....

Adding a new attribute
Brand Loyalty
Brand loyalty results from the positive reinforcement of previous actions.
Set of values, ideas, and attitudes that are learned and shared among the members of a group.
Dissociative Group
A reference group that a person wishes to maintain distance from because of differences in values or behaviors.
Family life cycle concept
The distinct phases a family progresses through from formation to retirement, each phase bringing with it identifiable purchasing behaviors.
Social Class
Determined by a person's occupation, source of income (not level of income, and education.

Negative word of mouth
If P and G had not been convinced it would be a very successful product, it would have dropped Febreeze from its product line as a result of this.
Discretionary income 2
The money that remains after paying for taxes and necessities.
Word of mouth
The influencing of people during conversation
Alternative firms that could provide a product to satisfy a specific market's needs.
During a recessionary period this is expected
the use of credit would decline.
the restrictions that state and federal laws place on business with regard to the conduct of its activities
Aspiration group
A local country club has a great golf course, swimming pool, tennis courts, and even a stable for horses.

It also has numerous high-profile business people and local politicians as members. To attract new members, the club's board of directors should focus its marketing efforts on people who view its current members as a(n) __________ group.

Which of the following statements about the VALS framework is NOT true?
The different levels of resources people may possess (money, time, talents, etc.) have no effect on the expression of their primary motivation.
Monopolistic competition
During the Christmas season, many catalog retailers offer buyers price reductions, coupons, two-for-one buying opportunities and/or free delivery. This is because these catalog retailers operate in a(n) __________ environment
Generation Y
The first generational cohort to have no collective memory of the dramatic changes of the past 30 years.

a time of declining economic activity when businesses decrease production, unemployment rises, and many consumers have less money to spend.
The Diamond of National Competitive Advantage
Michael Porter has identified four key elements to explain why some companies and industries succeed globally while others fail. These four elements are collectively referred to as this.
United States
World's leading importer
Four trends in the past decade which have significantly influenced the landscape of global marketing. One of these
Global competition among global companies for global customers
Three types of companies that populate and compete in the global marketplace
International firms, multinational firms, and transnational firms.

A global brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs., However, adaptation of global brands are:
only when necessary to better connect the brand to consumers in different markets.
Currency Exchange Rates
Fluctuations in exchange rates among the world's currencies are of critical importance in global marketing.
Measurement of consumer income in different countries.

Since global marketing is affected by economic considerations a scan of the global marketplace should include this facotor
The reverence that Japan shows towards its elderly is an example of this.
Developed and Developing
Two major classifications of stages of economic development helpful to global marketers.
KFC in Japan sells tempura crispy strips . In northern England, it stresses gravy and potatoes.

In Thailand, it offers fresh rice.These examples illustrates that KFC exhipbits an understanding of and appreciation for this in other societies

Product adaptation Strategy
Global companies have five strategies for matching products and their promotion efforts to global markets. Changing product in some way to make it more appropriate for a country's climate or preferences is an example of this strategy.
Financial commitment and risk.

a firm's profit potential and control over marketing activities increases as it moves from exporting to direct investment as a global market-entry strategy. But so does the firm's
Product Extension strategy
Global companies have five strategies for matching products and their promotion efforts to global markets. According to Figure 7-6 above, "A" refers to which type of strategy.
A form of low-risk and capital-free entry into international markets that includes local manufacturing and local assemble.
Indirect Exporting
A small Canadian winery located in BC has developed a superior tasting wine. It has no overseas contacts but wants to get it wine on the shelves in selected Asian and European markets where growth has been substantial in the last two years.

What type of exporting option would best suit this company?

Collect Relevant Information
After defining the problem and developing the research plan, the next step in the five-step marketing research approach is to
Two most common constraints in marketing problem solving
Limitations on the time and money available.
Do Marketing research to identify what needs were not being satisfied.
Grape-Nuts was one of the first cereals Post Cereal Company ever marketed. it scores well in brand awareness studies, but recently its sales have been steadily declining. Rather than assume the product was a "dog" the Grape-Nuts marketing manager decided Post should first
The approaches that can be used to collect data to solve all or part of a marketing research problem .
Exploratory research, causal research, and descriptive research.

In setting research objectives, marketers have to be clear on the purpose of research they are about to do that leads to marketing actions. The three main types of Marketing research include :
Personal Observation
Personal observation is both useful and flexible , but has reliability issues when different observers watching the same event report different results.
Data mining
Many consumers often buy soft drinks and potato chips together when they shop at a grocery, convenience, or mass merchandise store. The convenience store used this to extract the hidden information from its MIS to find the statistical link between the two product categories.

Fixed Alternative Question
another name of a closed-end question
Two important disadvantages of secondary data
not up-to-date; not specific enough for the project.
Syndicated Panel Data
Several market research companies pay households and busineeses to record all their purchases using a paper or electronic diary, which allows for an economical way to collect consistent data over time.
The final step in the five-step marketing research approach
Includes making action recommendation, implementing action recommendations, and evaluating the results.
Linear trend extrapolations
In trend extrapolation, the pattern used to describe a straight line
Linear trend extrapolation
Similar to trend extrapolation except the pattern is always a straight line.

Lost-Horse Forecast
Involves starting with the last known value of the item being forecast, listing the factors that could affect the forecast, assessing whether they have a positive or negative impact, and making the final forecast.
3 frequently used sales forecasting techniques
1. judgments of the decision maker 2. surveys of knowledgeable groups 3. Statistical methods
Global marketing strategy
Refers to the strategy of transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.

Even though primary data can be especially valuable to an individual firm, it often plays "second fiddle" to secondary data because
primary data is usually more costly and time consuming to collect.
It is illegal for a W.S. corporation to bribe an official of a foreign government or political party to obtain or retain business in a foreign country.
Develop Findings
The next step in the five-step marketing research approach once a a market researcher has defined the problem, developed the research plan, and collected the relevant information.

Direct Forecast
Involves estimating the vlalue to be forecasnt and making decisions without any intervening steps.
Semantic differential scale
What kind of question is the following? Place and X in the space
Filipino Custom
3M Company executives were perplexed. 3M changed the shape of the pad to a foot and sales soared. #m changed its product in response to a Filipino
Survey of Buyers' intentions forecast
involve asking prospective customers if they are likely to buy the product during some future time period.
Joint Venture
Refers to when a foreign company and a local firm invest together to create a local business.
Product extension
Seems to work best when the consumer market target for the product is alike across countries and cultures- that is,, consumers share the same desires, needs and use for the product.

All of the following are criterion used for selecting target market segments except:
simplicity and cost of assigning potential buyers to segments.
The best segmentation approach is one that
maximizes the opportunity for future profit and ROI
Market-Product grid
A framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization.
Third stem in segmenting and targeting markets that link customer needs to marketing actions
develop a market-product grid and estimate size of markets.
Market Segmentation
involves aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action.

If Wendy's customers are buying an eating experience, which of the following rationales would make the most sense if you were to group the products Wendy's sells?
Grouping by meal occasion
The largest potential market segment consists of
students that live in a dormitory
The strategy most likely to exploit marketing synergies and efficiencies would be to target
students that live in an apartment
Each cell of the market-product grid shows the
estimated market size.
When developing a new breakfast menu, Wendy's had to consider not only the offerings of Burger King and McDonald's but also the
Quick-serve breakfast items from gas stations and convenience stores.
Recently, U.S. dairies, struggling to increase milk sales tried to change the way adults thought about milk
The dairies wanted to reposition chocolate milk in the minds of adult consumers.

According to the apple market product grid, apple would most likely get the least market synergies from
College staff
Perceptual map
A means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands, as well as its own product or brand.
A perceptual map can be used to identify a firm's product in terms of how closely it fits the "ideal perceptions of
Consumer and where it fits in relationship to competitors' products.
Which of the following data are collected from consumers to develop a perceptual map for a particular product?
The important attributes for a product or brand class.
An IMac personal pcomputer from Apple can be classified according to all of the following categories except:
Nondurable good
intangible activities or benefits that an organization provides to satisfy consumers' needs in exchange for money or something else of value.
Which of the following statements about product lines is MOST accurate
An advantage of broad product lines is increased likelihood of access to large retail chain distribution
which of the following statements regarding goods is MOST accurate
Nondurable goods would rely more on advertising than durable goods
Into which classification of consumer products would the Waterford crystal serving bowls fall?
Specialty products
Using an existing brand name to introduce a product that is new to the company into a totally new, unfamiliar market seems like a good idea.

This is what Harley-Davidson magazine did when it introduced perfume, and it failed quickly.
LG Electronics Inc. has entered into an agreement with Google to offer selected models of its mobile phones that use a multi-touch interface installed on them rather than button to make calls with Google's Android operating system software.
This is an example of dynamically continuous innovation .
At the time of its introduction, which of the following products was the Best example of a continuous innovation?
Disposable lighter
From an organization's perspective regarding its new products and innovations, which of the following new-product strategies has the highest level of risk?
Radical invention
The emphasis of a marketing strategy for a discontinuous innovation would most likely be to
educate consumers about entirely new consumption patterns through product trial and personal selling.

Dragon, a speech recognition software program that allows you to use your voice instead of a keyboard to input text into a word processing program is an example of
discontinuous innovation
Microsoft introduced its Zune player a few years after Apple launched its iPod and other competitors offered their new MP3 players. sales were very disappointing. According to the textbook, the primary reason for the Zune's failure was due in large part to
bad timing
Factors such as specifying product features, marketing strategy, and financial projections are a part of which stage of the new-product process?
Business analysis
business researchers emphasize that firms must actively involve customers and suppliers in the new-product development process. This means that the focus should be on what the new product will
do for them rather than simply what they want.
The new-product process an organization goes through to identify business opportunities and convert them into salable products or services contains
seven stages from new product strategy development to commercialization.

The most expensive stage in the new-product process for most products and services is
Considering the classification of consumer products, which of the following products will have the most limited distribution?
Rolex watches
Specialty products
products a consumer will make a special effort to search out and buy.
Product postitioning
the place a product offering occupies in consumers' minds on important attributes.
Which stage in the new-product process has as its purpose to identify the strategic role the new product might serve in the firm's overall objectives?
new-product strategy development
Test marketing involves offering a product for sale
on a limited basis in a defined area.
The screening and evaluation stage of the new-product process involves
internal and external evaluation of new-product ideas.
consumer products
products purchased by the ultimate consumer
Barbie , this type of safety test occurs during the
development stage of the new-product process.

all of the following are criteria used for forming market segments except
cost of reaching the segment.
The lack of profit in the introductory stage of the product life cycle is very often the result of
the large investment costs in product development.
The two most common pricing alternatives for products in the introduction stage of the product life cycle are
skimming pricing; penetration pricing
Which of the following statements regarding the maturity stage of the product life cycle is MOST accurate
sales increase at a decreasing rate as fewer new buyers enter the market.
Your product has been suffering from steadily eroding sales.

You have tried a number of options to revitalize the product's sales and profits, but after seven changes in your strategy, you have yet to find success. Which of the following actions would be the LEAST appropriate next step?

Stimulate primary demand
Stage in the product life cycle is characterized by a rapid increase in sales and the appearance of competitors.
Which of the following products would have a low-learning product life cycle curve?
Fusion razor
Which of the following quotes from a new product adopter would signal the need for a firm to counteract a value barrier?
"Big deal, the only difference is the shape of the package."
Which of the following products would have a high-learning product life cycle curve?
Electric car
As product adopters, members of the late majority
are skeptical and have below average social status.

The consumers represented by C in Figure 5 above are called the
early majority
An organization seeks to protect its brand for all of the following reasons except
People are reluctant to buy products without well-known brands
The swoosh that appears on every Nike product is an example of a
brand name
Brand personality refers to
a set of human characteristics associated with a brand name
The primary purpose of a trademark is to
legally protect a product's brand name or trade name and prevent others from using it.
an organization's use of a name, phrase, design, symbol, or combination of these to identify its products and distinguish them from those of competitors.
When banks are closed, they can offer value to their customers through automatic teller machine (ATMs). This self-service technology also comes with a down side since the ATMs are perceived as being less
the four I's of services consist of
intangibility , inconsistency, inseparability, and inventory
What do a security guard, a plumber, and a management consultant share in common?
They are all people-based services.
Students from Berry College attended a performance at nearby Shorter College and were extremely impressed with the dance troupe that was the opening act.

Idle Production capacity
A situation where a service provider is available but there is no demand for the service.
As a dimension of service quality, the willingness to help customers and provide prompt service is referred to as
Andrea Arenas is the owner of 2 Places and 1 Time, a concierge company. She and her staff of 60 perform everyday services such as walking the dog, picking up cleaning, waiting for the repairman, and going t the post office for people who are too busy to perform these simple acts.
Only during consumption or after they are purchased
there are five key dimensions of service quality.

reliability, tangibility, responsiveness, assurance, and empathy
services performed by surgeons or lawyers are primarily evaluated on
credence properties.
Characteristics of tangible goods, such as color,size and style are considered
search properties
All of the following comprise the seven Ps of services marketing EXCEPT
Integrating the service component of the marketing mix with efforts to influence consumer demand is referred to as
capacity management
Which of the following statements regarding service branding is MOST accurate?
Service firms with a well-established brand reputation will also find it easier to introduce new services than firms without a brand reputation.
Which of the following statements regarding the place element of services is Most accurate?
Until recently, customers generally had to go to the service provider's physical location to purchase the service.
Changes in the services industry in the future will primarily be driven by two factors.
They are technological development and sustainable development
all of the following are important aspects of product life cycles EXCEPT
how many competitors create "me too" products.
Services provided by specialized professionals such as medical diagnoses and legal services have certain properties or characteristics that the consumer may find impossible to evaluate even after purchase and consumption.

What are these properties called

credence properties
The buildings, landscaping, vehicles, furnishings, signage, brochures, and equipment comprise which of the seven Ps of services marketing?
Physical environment
apple launched its iPhone in 2007 and has become the world's best smartphone with its multitouch user interface and its "apps"
growth stage
The apple with a bite taken out of it that appears on every Apple product is an example of a
Customer Contact audit
is very important to the process aspect of services because it helps identify steps that will ultimately lead to better service creation and delivery processes.
In the seven Ps of services, the term process refers to
the procedures, mechanisms, and flow of activities by which the service is created and delivered.
which stage in the product life cycle is characterized by a rapid increase in sales and the appearance of competitors?
Which of the following quotes from a new product adopter would signal the need for a firm to counteract a psychological barrier?
"But it might make me fat."
to handle products in the decline stage of the product life cycle, companies often use either a
deletion or a harvesting strategy
One of the primary benefits of branding for consumers is that branding
makes decision making easier for consumers.
Which of the following quotes from a new product adopter would signal the need for a firm to counteract a usage barrier?
"I don't want to try this if it means I have to swallow it with milk."
The marketing of low-cost copies of popular brands not manufactured by the original produce is referred to as
product counterfeiting
The main reason many stores and companies offer after sales service agreements
the agreements are profitable.
Social Forces
The set of environmental forces that consists of the demographic characteristics of the population and its values .
Which of the following statements best illustrates geographic segmentation?
In Chine, KFC sells a spicier chicken the farther away its restaurants are from the coastal areas.
According to economists, protectionism
protects a nations political security
Which of the following new products is the best example of the lowest level of risk from the company's point of view?
adding chocolate cheerios in addition to traditional cheerios.
In the sneaker market, Reebok and Nike practice
head-to-head positioning since both manufacturers compete in the same target market with similar product attributes.
Which of the following examples best demonstrates a company's appreciation of another country's values?
McDonald's restaurants in India serve a full line of products except for hamburgers made from beef.
The axes on a perceptual map are
Customer perceptions of the firm's product versus the average of all brands in the industry
Determining the size of specific markets using a market product grid is helpful in determining which target market segments to select and
which product groupings to offer
The European Union (EU) has created abundant marketing opportunities because it is no longer necessary to
continually monitor currency exchange rates.