Name: Class: Date:
Chapter 1 Marketing in Today's Economy
1. Among the fundamental changes to marketing and business practice in today’s economy is the dramatic increase in the
availability of information. This increase in information has created a shift in the balance of power in the supply chain.
Who now holds most of the power in today’s economy?
a. retailers b. wholesalers
c. customers d. manufacturers
e. market research firms
ANSWER: c
2. __________ is the curse of mature markets whereby products lack any real means of differentiation and customers see
competing products as offering roughly the same benefits.
a. Specialization b. Commoditization
c. Maturation d. Price devaluation
e. Market homogeneity
ANSWER: b
3. Which of the following changes occurring in today’s economy has NOT been caused by the growth of the Internet?
a. increase in product selection b. shifting demand patterns
c. privacy and security concerns d. rising prices for most products
e. audience and media fragmentation
ANSWER: d
4. Although mass media audiences are becoming increasingly fragmented, media fragmentation does have a major
advantage. What is this advantage?
a. It now costs less to reach a mass audience.
b. It is much easier to measure feedback from mass media audiences.
c. It is now easier to reach small, highly targeted audiences.
d. Consumers are now much more receptive to television advertising.
e. Consumers are now highly susceptible to online advertising.
ANSWER: c
5. Changing value propositions in today’s economy—such as changes caused by the growth in e-commerce—have forced
marketers to learn a tough lesson about customers. What is that lesson?
a. Customers will always seek the best value regardless of quality.
b. Customers will always turn to the most recognized brand.
c. Customers would rather perform service for themselves to save money.
d. Customers will turn to the most convenient, least expensive alternative in situations where they see goods and
services as commodities.
e. Customers will always seek the best quality regardless of price.
ANSWER: d
6. One of the major difficulties of conducting business in today’s economy concerns the unclear legal jurisdiction
surrounding many business transactions. The issue is especially keen for marketers who do business in:
a. international markets. b. domestic, interstate markets.
c. business-to-business markets. d. metamarkets.
e. peer-to-peer transactions.
Copyright Cengage Learning. Powered by Cognero. Page 1
,Name: Class: Date:
Chapter 1 Marketing in Today's Economy
ANSWER: a
7. In 2005, the American Marketing Association changed the definition of marketing that had stood for 20 years. The
major changes in the definition included a shift from delivering the 4 Ps (product, price, place, promotion) to delivering
__________ and a shift from creating exchanges to creating __________.
a. satisfaction; customer relationships b. value; customer relationships
c. quality; transactions d. value; satisfaction
e. quality; value
ANSWER: b
8. A cluster of closely related goods and services that center around a specific consumption activity is referred to as a:
a. marketspace. b. market.
c. metamediary. d. marketing channel.
e. metamarket.
ANSWER: e
9. Edmunds.com provides a collection of online services and information pertaining to the automotive market. Edmunds
offers reviews, free pricing reports, discussion boards, and links to a variety of car manufacturers, dealers, insurance
companies, and finance companies. What role does Edmunds.com play in today’s economy?
a. distributor b. marketspace
c. metamediary d. metamarket
e. electronic broker
ANSWER: c
10. Which of the following IS NOT one of the five conditions of exchange in marketing?
a. There must be at least two parties to the exchange.
b. Each party has something of value to offer the other party.
c. Each party must be free to accept or reject the exchange.
d. Each party must be capable of immediate delivery.
e. Each party believes that it is desirable to exchange with the other party.
ANSWER: d
11. A customer’s decision to purchase one product or group of products over another is primarily a function of:
a. the convenience of acquiring the product or group of products.
b. how well that choice will fulfill that person’s needs and satisfy his or her wants.
c. the product’s features relative to competing products.
d. the product’s price.
e. the availability of the product or group of products.
ANSWER: b
12. A product that provides the utmost in convenience is said to offer exceptional:
a. time and place utility. b. place and possession utility.
c. time and possession utility. d. form and time utility.
e. form and place utility.
Copyright Cengage Learning. Powered by Cognero. Page 2
,Name: Class: Date:
Chapter 1 Marketing in Today's Economy
ANSWER: a
13. Furniture Mart offers services such as financing and home delivery to its customers. What type of utility is Furniture
Mart trying to increase?
a. time utility b. place utility
c. possession utility d. form utility
e. psychological utility
ANSWER: c
14. What type of planning deals with specific markets or market segments and the development of marketing programs
that will fulfill the needs of customers in those markets?
a. market planning b. strategic planning
c. local planning d. lower-level planning
e. tactical planning
ANSWER: e
15. __________ involves the analysis of economic, political, legal, technological, and cultural events and trends that may
affect the future of the organization and its marketing efforts.
a. Competitive intelligence b. Environmental scanning
c. Tactical planning d. Marketing research
e. External analysis
ANSWER: b
16. Many firms attempt to distinguish or differentiate their product offerings through the use of __________ strategies.
This involves establishing a mental image of the product offering relative to competing offerings in the minds of target
buyers.
a. product positioning b. branding
c. perceptual marketing d. image marketing
e. comparative
ANSWER: a
17. Which of the following statements about pricing decisions in the marketing program is TRUE?
a. Price is one of two elements of the marketing mix that leads to revenue.
b. Price has a direct connection with customer demand.
c. Pricing is the least manipulated element of the marketing mix.
d. Pricing is the most difficult element of the marketing mix to change.
e. Customers will always equate higher prices with higher quality products.
ANSWER: b
18. In the traditional transactional marketing approach, the ultimate goal of marketing is to:
a. serve customers’ needs and wants.
b. develop long-term customer relationships.
c. create value in the buyer-seller relationship.
d. acquire new customers and complete a large number of exchanges.
e. All of the above are goals of transactional marketing
Copyright Cengage Learning. Powered by Cognero. Page 3
, Name: Class: Date:
Chapter 1 Marketing in Today's Economy
ANSWER: d
19. All of the following are reasons for the general decline in customer satisfaction over the past 20 years EXCEPT:
a. Customers are much less brand loyal than in the past.
b. Today’s customers are very price sensitive.
c. Today’s customers are exceptionally demanding.
d. Product quality is much lower now than at any time in the past.
e. Customers are more cynical, have more information, and have more attitude than ever before.
ANSWER: d
20. In the airline industry, companies like American, Delta, and US Air have a difficult time competing because their
industry has become commoditized. What does this mean for firms in the airline industry?
a. Airline firms compete in a declining industry.
b. Airline customers have become increasingly demanding.
c. There is very little differentiation among product offerings in the industry.
d. The industry experiences very little change over time.
e. Airlines have been forced to develop partnerships to remain competitive.
ANSWER: c
21. The text discusses seven challenges and opportunities associated with marketing in today’s economy. Identify these
issues and discuss how they are related. What is the common thread that ties all seven issues together?
ANSWER: The seven issues are:
1. Power Shift to Customers
2. Massive Increase in Product Selection
3. Audience and Media Fragmentation
4. Changing Value Propositions
5. Shifting Demand Patterns
6. Privacy, Security, and Ethical Concerns
7. Unclear Legal Jurisdiction
The common thread that ties these issues together is the increase in information and choices made available by
the Internet.
22. Discuss the different views or interpretations of marketing as a function of business, including the AMA’s 2007
change in the definition of marketing. Why do you think the AMA changed the definition?
ANSWER: Many people, especially those not employed in marketing, see marketing as a function of business. As a
business function, the goal of marketing is to connect the organization to its customers. Other individuals,
particularly those working in marketing jobs, tend to see marketing as a process of managing the flow of
products from the point of conception to the point of consumption. A final way to think about marketing
relates to meeting human and social needs. This broad view links marketing with our standard of living, not
only in terms of enhanced consumption and prosperity but also in terms of society’s well-being.
The AMA changed the definition of marketing to better reflect the realities of competing in today’s
marketplace. The new definition stresses two critical success factors in marketing today: value and customer
relationships. Whereas the former definition of marketing had a decidedly transactional focus, the new
definition emphasizes long-term relationships that provide value for both customers and the firm.
Copyright Cengage Learning. Powered by Cognero. Page 4
Chapter 1 Marketing in Today's Economy
1. Among the fundamental changes to marketing and business practice in today’s economy is the dramatic increase in the
availability of information. This increase in information has created a shift in the balance of power in the supply chain.
Who now holds most of the power in today’s economy?
a. retailers b. wholesalers
c. customers d. manufacturers
e. market research firms
ANSWER: c
2. __________ is the curse of mature markets whereby products lack any real means of differentiation and customers see
competing products as offering roughly the same benefits.
a. Specialization b. Commoditization
c. Maturation d. Price devaluation
e. Market homogeneity
ANSWER: b
3. Which of the following changes occurring in today’s economy has NOT been caused by the growth of the Internet?
a. increase in product selection b. shifting demand patterns
c. privacy and security concerns d. rising prices for most products
e. audience and media fragmentation
ANSWER: d
4. Although mass media audiences are becoming increasingly fragmented, media fragmentation does have a major
advantage. What is this advantage?
a. It now costs less to reach a mass audience.
b. It is much easier to measure feedback from mass media audiences.
c. It is now easier to reach small, highly targeted audiences.
d. Consumers are now much more receptive to television advertising.
e. Consumers are now highly susceptible to online advertising.
ANSWER: c
5. Changing value propositions in today’s economy—such as changes caused by the growth in e-commerce—have forced
marketers to learn a tough lesson about customers. What is that lesson?
a. Customers will always seek the best value regardless of quality.
b. Customers will always turn to the most recognized brand.
c. Customers would rather perform service for themselves to save money.
d. Customers will turn to the most convenient, least expensive alternative in situations where they see goods and
services as commodities.
e. Customers will always seek the best quality regardless of price.
ANSWER: d
6. One of the major difficulties of conducting business in today’s economy concerns the unclear legal jurisdiction
surrounding many business transactions. The issue is especially keen for marketers who do business in:
a. international markets. b. domestic, interstate markets.
c. business-to-business markets. d. metamarkets.
e. peer-to-peer transactions.
Copyright Cengage Learning. Powered by Cognero. Page 1
,Name: Class: Date:
Chapter 1 Marketing in Today's Economy
ANSWER: a
7. In 2005, the American Marketing Association changed the definition of marketing that had stood for 20 years. The
major changes in the definition included a shift from delivering the 4 Ps (product, price, place, promotion) to delivering
__________ and a shift from creating exchanges to creating __________.
a. satisfaction; customer relationships b. value; customer relationships
c. quality; transactions d. value; satisfaction
e. quality; value
ANSWER: b
8. A cluster of closely related goods and services that center around a specific consumption activity is referred to as a:
a. marketspace. b. market.
c. metamediary. d. marketing channel.
e. metamarket.
ANSWER: e
9. Edmunds.com provides a collection of online services and information pertaining to the automotive market. Edmunds
offers reviews, free pricing reports, discussion boards, and links to a variety of car manufacturers, dealers, insurance
companies, and finance companies. What role does Edmunds.com play in today’s economy?
a. distributor b. marketspace
c. metamediary d. metamarket
e. electronic broker
ANSWER: c
10. Which of the following IS NOT one of the five conditions of exchange in marketing?
a. There must be at least two parties to the exchange.
b. Each party has something of value to offer the other party.
c. Each party must be free to accept or reject the exchange.
d. Each party must be capable of immediate delivery.
e. Each party believes that it is desirable to exchange with the other party.
ANSWER: d
11. A customer’s decision to purchase one product or group of products over another is primarily a function of:
a. the convenience of acquiring the product or group of products.
b. how well that choice will fulfill that person’s needs and satisfy his or her wants.
c. the product’s features relative to competing products.
d. the product’s price.
e. the availability of the product or group of products.
ANSWER: b
12. A product that provides the utmost in convenience is said to offer exceptional:
a. time and place utility. b. place and possession utility.
c. time and possession utility. d. form and time utility.
e. form and place utility.
Copyright Cengage Learning. Powered by Cognero. Page 2
,Name: Class: Date:
Chapter 1 Marketing in Today's Economy
ANSWER: a
13. Furniture Mart offers services such as financing and home delivery to its customers. What type of utility is Furniture
Mart trying to increase?
a. time utility b. place utility
c. possession utility d. form utility
e. psychological utility
ANSWER: c
14. What type of planning deals with specific markets or market segments and the development of marketing programs
that will fulfill the needs of customers in those markets?
a. market planning b. strategic planning
c. local planning d. lower-level planning
e. tactical planning
ANSWER: e
15. __________ involves the analysis of economic, political, legal, technological, and cultural events and trends that may
affect the future of the organization and its marketing efforts.
a. Competitive intelligence b. Environmental scanning
c. Tactical planning d. Marketing research
e. External analysis
ANSWER: b
16. Many firms attempt to distinguish or differentiate their product offerings through the use of __________ strategies.
This involves establishing a mental image of the product offering relative to competing offerings in the minds of target
buyers.
a. product positioning b. branding
c. perceptual marketing d. image marketing
e. comparative
ANSWER: a
17. Which of the following statements about pricing decisions in the marketing program is TRUE?
a. Price is one of two elements of the marketing mix that leads to revenue.
b. Price has a direct connection with customer demand.
c. Pricing is the least manipulated element of the marketing mix.
d. Pricing is the most difficult element of the marketing mix to change.
e. Customers will always equate higher prices with higher quality products.
ANSWER: b
18. In the traditional transactional marketing approach, the ultimate goal of marketing is to:
a. serve customers’ needs and wants.
b. develop long-term customer relationships.
c. create value in the buyer-seller relationship.
d. acquire new customers and complete a large number of exchanges.
e. All of the above are goals of transactional marketing
Copyright Cengage Learning. Powered by Cognero. Page 3
, Name: Class: Date:
Chapter 1 Marketing in Today's Economy
ANSWER: d
19. All of the following are reasons for the general decline in customer satisfaction over the past 20 years EXCEPT:
a. Customers are much less brand loyal than in the past.
b. Today’s customers are very price sensitive.
c. Today’s customers are exceptionally demanding.
d. Product quality is much lower now than at any time in the past.
e. Customers are more cynical, have more information, and have more attitude than ever before.
ANSWER: d
20. In the airline industry, companies like American, Delta, and US Air have a difficult time competing because their
industry has become commoditized. What does this mean for firms in the airline industry?
a. Airline firms compete in a declining industry.
b. Airline customers have become increasingly demanding.
c. There is very little differentiation among product offerings in the industry.
d. The industry experiences very little change over time.
e. Airlines have been forced to develop partnerships to remain competitive.
ANSWER: c
21. The text discusses seven challenges and opportunities associated with marketing in today’s economy. Identify these
issues and discuss how they are related. What is the common thread that ties all seven issues together?
ANSWER: The seven issues are:
1. Power Shift to Customers
2. Massive Increase in Product Selection
3. Audience and Media Fragmentation
4. Changing Value Propositions
5. Shifting Demand Patterns
6. Privacy, Security, and Ethical Concerns
7. Unclear Legal Jurisdiction
The common thread that ties these issues together is the increase in information and choices made available by
the Internet.
22. Discuss the different views or interpretations of marketing as a function of business, including the AMA’s 2007
change in the definition of marketing. Why do you think the AMA changed the definition?
ANSWER: Many people, especially those not employed in marketing, see marketing as a function of business. As a
business function, the goal of marketing is to connect the organization to its customers. Other individuals,
particularly those working in marketing jobs, tend to see marketing as a process of managing the flow of
products from the point of conception to the point of consumption. A final way to think about marketing
relates to meeting human and social needs. This broad view links marketing with our standard of living, not
only in terms of enhanced consumption and prosperity but also in terms of society’s well-being.
The AMA changed the definition of marketing to better reflect the realities of competing in today’s
marketplace. The new definition stresses two critical success factors in marketing today: value and customer
relationships. Whereas the former definition of marketing had a decidedly transactional focus, the new
definition emphasizes long-term relationships that provide value for both customers and the firm.
Copyright Cengage Learning. Powered by Cognero. Page 4
