Deck 3: Evaluating Opportunities in the Changing Market Environment

Question 1

If the cost of production per unit goes down as the quantity produced increases, small producers can be at a great cost disadvantage.

Answer 1

True
Explanation: Smaller firms can be at a great cost disadvantage when the cost of producing and selling each unit decreases as the quantity increases.

Question 2

As compared to larger competitors, smaller firms benefit from lower unit costs which they achieve with lower sales volumes.

Answer 2

False
Explanation: Smaller firms can be at a great cost disadvantage if they try to win business from larger competitors when the cost of producing and selling each unit decreases as the quantity increases.

Question 3

Company objectives should shape the direction and operation of the whole business.

Answer 3

True
Explanation: The objectives of a company should shape the direction and operation of the whole business.

Question 4

Attractive opportunities should make use of a firm's resources and its unique strengths.

Question 5

The direct market environment includes customers, competitors, and the IRS.

Question 6

Trying to maximize short-run return on investment may not be compatible with a company's other objectives.

Question 7

Ownership of patents, a familiar brand name, and financial strength are some of the many resources of a firm that a manager should evaluate when searching for new opportunities.

Question 8

The marketing manager can control the variables in the market environment.

Question 9

Good marketing objectives should be ambitious and almost impossible to achieve.

Question 10

Smaller producers always have a great advantage in competing with larger producers because of their flexibility.

Question 11

Objectives should set the firm's course.

Question 12

A mission statement should focus on just the key goals for the organization.

Question 13

A large producer with economies of scale always has a competitive advantage over smaller firms.

Question 14

The external marketing environment is shaped by these four areas: economics, technology, politics/law, and culture/society.

Question 15

A mission statement substitutes for more specific objectives.

Question 16

A mission statement sets out the strengths and weaknesses of a firm as well as the opportunities and threats that it faces.

Question 17

The objectives of a firm should direct the operation of the marketing department, but aren't important to the rest of the business.

Question 18

A mission statement sets out the organization's basic purpose for being.

Question 19

Company objectives should lead to a hierarchy of marketing objectives.

Question 20

A mission statement can help a manager decide which opportunities to pursue and which to screen out.

Question 21

When the competitive environment moves toward pure competition, producers offer very different products that consumers do not perceive as substitutes for each other.

Question 22

A firm may find that both the competitive and economic environments are better in a foreign market than in its domestic market.

Question 23

Competitor analysis is an organized approach for evaluating the strengths and weaknesses of current or potential competitors' marketing strategies.

Question 24

Over the long run, most product-markets tend toward monopolistic competition.

Question 25

The first step in a competitor analysis is to identify potential competitors.

Question 26

In a competitor analysis, a current (or planned) target market and marketing mix is compared with what competitors are currently doing (or are likely to do).

Question 27

A patent owner has a 20-year monopoly to develop and use its new product, process, or material.

Question 28

The major shortcoming of competitor analysis is that it focuses on the weaknesses of competitors-but ignores their strengths.

Question 29

The competitive environment affects the number and types of competitors the marketing manager must face and how they may behave.

Question 30

In monopolistic competition, one firm completely controls a broad product-market.

Question 31

Good relations with intermediaries, good locations, and good salespeople are some of the many resources of a firm that should be evaluated when searching for new opportunities.

Question 32

Many people think that it is unethical to spy on competitors to obtain their trade secrets, but it is perfectly legal.

Question 33

Although the marketing manager cannot control the competitive environment, he can choose strategies that will avoid head-on situations.

Question 34

In monopolistic competition, managers sometimes try to differentiate very similar products by relying on promotion or other elements of the marketing mix.

Question 35

The Internet is an important aspect of the technological environment, but it isn't very useful for getting information about competitors.

Question 36

The technological environment includes such things as national income, economic growth, and inflation.

Question 37

In market-directed economies, unregulated monopolies are rare.

Question 38

Competitive rivals are always easy to identify.

Question 39

Spying on competitors to obtain trade secrets, raises moral issues but is not illegal.

Question 40

The Internet is a powerful way to get information about competitors.

Question 41

The Internet changes how consumers shop and marketers market.

Question 42

Technology provides new opportunities and new challenges for marketers.

Question 43

Compared to some countries in Latin America, the rate of inflation in the U.S. is low.

Question 44

Marketers no longer encounter differences among European countries.

Question 45

Technology affects marketing through new products and new processes.

Question 46

Strong sentiments of nationalism facilitate growth in importing and exporting.

Question 47

The inflation rate experienced by the United States in recent years was just about the highest in the world.

Question 48

Placing the interests of individual consumers before the interests of business is nationalism.

Question 49

The Internet is a system for linking computers around the world.

Question 50

Nationalism-or the emphasis on a country's interests before anything else-may affect the work of some marketing managers.

Question 51

Changes in the technological environment could be rejected by the cultural and social environment-through the political and legal environments-even though such changes might help the economic environment.

Question 52

Regional groupings of nations outside the United States have little effect on the decisions of marketing managers whose firms are headquartered in the U.S.

Question 53

When the dollar is strong in international exchange, it is easier to sell U.S. products in overseas markets.

Question 54

Changes in technology can have major impacts on marketing strategy planning.

Question 55

Interest rates usually decrease during periods of inflation.

Question 56

The elimination of separate barriers to inter-European trade is making Europe a large unified market.

Question 57

Technology is the application of voodoo to convert an economy's resources to output.

Question 58

Technology is the application of science to convert an economy's resources to output.

Question 59

Nationalism may affect marketing strategy planning by determining to whom and how much a firm may sell.

Question 60

Technological advances like the World Wide Web and the Internet are leading to big advances in business.

Question 61

Before the Pure Food and Drug Act was passed, it was assumed that the common law and the warning "let the buyer beware" would take care of consumers.

Question 62

The Consumer Product Safety Act provides for the creation of safety standards but has no power to set penalties for failure to meet these standards.

Question 63

Laws such as the Pure Food and Drug Act were passed because pro-competition legislation did not protect consumers very well in some areas.

Question 64

The Magnuson-Moss Act regulates product warranties.

Question 65

Marketers should be aware of federal legislation, as well as state and local laws, when planning marketing strategy.

Question 66

A manager could be fined for violating the antimonopoly laws, but he or she could not be sent to jail.

Question 67

The Clayton Act deals with tying contracts, exclusive dealing contracts, and price-fixing conspiracies.

Question 68

A basic idea in the legal environment in the United States is that attempts by business to limit competition are considered contrary to the public interest.

Question 69

In the United States, the Consumer Product Safety Commission sets and enforces product safety standards.

Question 70

Because the Consumer Product Safety Commission has no power to force a product off the market, safety is not a very important consideration in product design.

Question 71

Business and individual managers are subject to both criminal and civil laws.

Question 72

The political environment may either block or promote new marketing opportunities.

Question 73

The Consumer Product Safety Commission tries to encourage safe product design, but the commission has almost no power to deal with unsafe products.

Question 74

The Clayton Act focuses on practices which may substantially lessen competition-such as tying contracts, exclusive dealing contracts and price discrimination by manufacturers.

Question 75

Because NAFTA is a short-term proposition, its economic impact has already been as significant as it is likely to be.

Question 76

The cultural and social environment refers to where people live and their income.

Question 77

Product warranties are regulated by the Magnuson-Moss Act.

Question 78

The Sherman Act deals with tying contracts, exclusive dealing contracts, and price discrimination by manufacturers.

Question 79

The cultural and social environment affects how and why people live and behave as they do.

Question 80

Key countries in Europe have moved to the euro, a new unified money system for the European Union.