Marketing 10th Canadian Edition By Frederick Crane

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Sample Test

Chapter 03

Scanning the Marketing Environment

Multiple Choice Questions

1. With more individuals wanting tools for obtaining information, offering opinions, and interacting with friends, Facebook was influenced by which major force?
A.social
B. technological
C. economic
D. competitive

(Chapter Opening Example) Social forces changed as people became increasingly interested in the social aspects of the Internet. They wanted tools for obtaining information, offering opinions, and interacting with friends.

Blooms: Apply
Difficulty: Medium
Learning Objective: 03-01 Explain how environmental scanning provides information about social, economic, technological, competitive, and regulatory forces.
Topic: 03-01 Is “Connecting the World” an Ambitious Vision? Not If You Are Facebook!

2. As the cost of wireless connectivity, Internet service, and smartphones declined, social networking became affordable for consumers around the world. Facebook has leveraged this __________ force.
A.social
B. technological
C. economic
D. competitive

(Chapter Opening Example) Economic forces also influenced the demand for Facebook as the cost of wireless connectivity, Internet service, and smartphones rapidly declined and made social networking affordable for consumers around the world.

3. Facebook has faced significant scrutiny from many privacy regulators since its creation, including from Canada’s Privacy Commissioner, which forced Facebook to undergo numerous account changes to make controlling your privacy settings easier. Facebook was influenced by which force?
A.regulatory and legal
B. economic
C. technological
D. social

(Chapter Opening Example) Legal and regulatory forces also affected Facebook. The company obtained rights to the name, developed privacy guidelines, and settled a claim that some of the ideas behind Facebook had come from other students.

4. Bell Canada frequently commissions numerous studies of the market to gather information on events outside the organization and learn and interpret any trends. Bell is engaging in which activity?
A.Outsourcing
B. Competitive intelligence gathering
C. Company protection
D. Environmental scanning

Trends typically arise from five sources included in an environmental scan: social, economic, technological, competitive, and regulatory forces.

5. A company engaged in environmental scanning is:
A.taking into account the effect its marketing activities can have on plants and animals in our environment.
B. continually acquiring information on events occurring outside the organization to identify and interpret potential trends.
C. maintaining a time constant horizon in its strategic planning process.
D. maintaining retail customer databases.

Environmental scanning is the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends.

Blooms: Remember
Difficulty: Medium
Learning Objective: 03-01 Explain how environmental scanning provides information about social, economic, technological, competitive, and regulatory forces.
Topic: 03-03 The Importance of Environmental Scanning

6. Changes in the marketing environment are a source of _______ and _______ to be managed.
A.strengths; weaknesses
B. opportunities; threats
C. competitive advantage; competition
D. income; growth

Changes in the marketing environment are a source of opportunities and threats to be managed.

Blooms: Remember
Difficulty: Easy
Learning Objective: 03-01 Explain how environmental scanning provides information about social, economic, technological, competitive, and regulatory forces.
Topic: 03-03 The Importance of Environmental Scanning

7. A company that experiences truncated future growth when launching a new product, may have failed to initially engage in:
A.Environmental scanning
B. Competitive intelligence gathering
C. Company protection
D. Business modeling

Companies that fail to engage in environmental scanning do so at their peril and perhaps truncate their future growth.

8. A marketing manager for Foster Parent’s Plan of Canada reads in Macleans that despite the Internet and television, Canadians are actively engaged in their communities. Over fifty percent have performed volunteer work and almost 80 percent have donated money to charities. She asks research and development personnel to identify possible new ad campaigns that will encourage this high levels of community-connectedness to continue. This ad campaign change is the result of the managerial activity:
A.ecological/technological forecasting.
B. environmental scanning.
C. macroeconomic analysis.
D. strategic planning.

The process of continually acquiring information on events outside the organization in order to identify and interpret potential trends is called environmental scanning.

9. A marketing manager for United Way reads in a business journal that despite the Internet and television, North Americans are actively engaged in their communities. 54 percent have performed volunteer work and 78 percent have donated money to charities. She asks research and development personnel to identify possible new ad campaigns that will encourage this high levels of community-connectedness to continue. This ad campaign change is the result of the managerial activity:
A.ecological/technological forecasting.
B. environmental scanning.
C. macroeconomic analysis.
D. strategic planning.

The process of continually acquiring information on events outside the organization in order to identify and interpret potential trends is called environmental scanning.

10. Statistics Canada revealed that out-of-home coffee consumption in Canada has been decreasing by 3% each year. The rise of single-brew machines in homes, such as Tassimo and Keurig are blamed. This type of information is the result of:
A.ecological/technological forecasting.
B. environmental scanning.
C. macroeconomic analysis.
D. strategic planning.

The process of continually acquiring information on events occurring outside the organization in order to identify and interpret potential trends is called environmental scanning.

11. Statistics Canada revealed that tea consumption in Canada has been rising in recent years and is now at 10 billion cups or 83 litres per person per year. But soft drink consumption actually declined. This type of information is the result of:
A.ecological/technological forecasting.
B. environmental scanning.
C. macroeconomic analysis.
D. strategic planning.

The process of continually acquiring information on events occurring outside the organization in order to identify and interpret potential trends is called environmental scanning.

12. Which of the following statements regarding environmental scanning is most accurate?
A.Environmental scanning changes the marketing environment.
B. Environmental scanning identifies and interprets potential trends.
C. Environmental scanning should be done at least every five years.
D. Environmental scanning focuses primarily on geographical factors.

Environmental scanning is the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends.

13. You are the Director of Marketing for Starbucks. You are doing an environmental scan to help you create a three-year marketing plan for the Canadian market. Which of the following environmental trends should you consider the MOST important?
A.Coffee consumption in Canada has fallen by 3% annually in recent times.
B. Video bloggers are growing in popularity and influence.
C. The largest cities in Canada have all seen a rise in dual-income couples who bring with them larger disposable incomes.
D. By the year 2019, robotics will play a major role in North American society.

Statistics Canada revealed that coffee consumption in Canada is declining at a rate of 3% per year. Beer, wine, and bottled water all saw increases in consumption as well. Tea consumption is increasing annually while soft drink consumption actually declined. Clearly, many players in the Canadian beverage industry are affected by these trends. Obviously, coffee manufacturers, coffee shops, and supermarkets would be affected negatively and would benefit from this trend.

14. Boston Consulting Group is giving a presentation to one of their clients and highlights different trends that are affecting the business environment. They conclude that all of the following are environmental trends that typically arise from each of the following sources except:
A.economic forces
B. technological forces
C. competitive forces
D. managerial forces

Environmental trends typically arise from five sources: social, economic, technological, competitive, and regulatory forces.

15. You are in charge of the marketing program for a consumer electronics company. You have been asked to think about developing a plan that will allow the firm to grow sales by at least 10 percent each year for the next five years. Prior to developing these plans you should engage in which of the following processes?
A.ecological/technological forecasting.
B. macroeconomic analysis.
C. environmental scanning
D. strategic planning.

The process of acquiring information on events occurring outside the organization to identify and interpret potential trends is a necessary precursor to engaging in strategic planning.

16. As a consultant with Accenture, you frequently engage in environmental scanning on behalf of your clients. Which of the following statements about environmental scanning best describes what actually happens?
A.Environmental scanning changes the marketing environment.
B. Environmental scanning focuses primarily on geographical and meteorological factors.
C. Environmental scanning is an annual event.
D. Environmental scanning identifies and explains potential trends.

Environmental scanning is the process of acquiring information to identify and interpret potential trends.

17. According to one of the world’s largest publishers, it was unprepared for recent increases in the demand for books about security. To prepare for the shift in demand, the publisher should have engaged in:
A.tracking environmental trends as a part of its ongoing operation
B. noticing changing demographics
C. noticing changes in ethnic composition
D. shifting funds from its product development department

If it had determined through previous experiences and research that concerns about security were increasing, then it would have prepared for increased demand.

18. A manufacturer of major appliances uses environmental scanning and identifies various trends. Which of the following trends might be more relevant to this manufacturer’s success in terms of product development?
A.the growth in electronic commerce.
B. advances in biotechnology, cosmetic surgery, and cancer drugs.
C. new legislation related to digital copyright, intellectual property protection, and consumer privacy.
D. eco-consciousness.

See Figure 3-2. A trend towards Canadians being more eco-conscious might influence how an appliance manufacturer considers energy consumption in the design of its products.

Blooms: Apply
Difficulty: Hard
Learning Objective: 03-01 Explain how environmental scanning provides information about social, economic, technological, competitive, and regulatory forces.
Topic: 03-05 An Environmental Scan of Canada

19. Responding to the movement towards reducing our carbon footprint, the federal government recently made financial incentives available to Canadians who made their homes more energy-efficient. According to an environmental scan of Canada, this growth in eco-consciousness reflects a change in _____ forces.
A.economic
B. competitive
C. technological
D. social

See Figure 3-2. This might be mistaken for a regulatory trend since the example involves government, but the actual relevant environmental trend is the social trend of being more eco-conscious.

20. Use of Facebook for purchases has grown over the last couple of years as Internet and smartphone connectivity has increased as well in these countries. This rising trend is an example of _____ forces.
A.economic
B. competitive
C. technological
D. social

See Figure 3-2. Facebook is a social media platform made possible by the Internet. Environmental trends include inventions or innovations from applied science or engineering research.

21. Sir Galahad’s is a high-fashion boutique selling top-of-the-line men’s clothing and accessories. The keys to Sir Galahad’s success include knowing men’s changing fashion tastes and providing something different from other clothing retailers. In addition, because of the high value of the merchandise, Sir Galahad’s management is searching for information on available computerized inventory controls and sales order processing. From this description, one can infer that the environmental category of least importance to Sir Galahad’s is:
A.regulatory.
B. economic.
C. technological.
D. social.

Only regulatory issues are not mentioned in the question.

22. Shoppers Drug Mart has been opening an increasing number of stores in areas where the ‘baby boomer’ generation makes up a large proportion of the population. Which force is likely playing a factor in these decisions?
A.ecology.
B. macroeconomic conditions.
C. regulatory forces.
D. social forces.

Figure 3-1.

23. You are the Director of Marketing for Starbucks. You are doing an environmental scan to help you create a three-year marketing plan for increasing your presence in Canadian post-secondary institutions. Which of the following environmental trends should you consider the MOST important?
A.Consumption of hot brewed coffee by millennials rose over 6% the last year.
B. Baby boomers, who make up 37% of the hot brewed coffee drinkers, rank the highest consumers of coffee in Canada.
C. The largest cities in Canada have all seen a rise in dual-income couples who bring with them larger disposable incomes.
D. Coffee consumption in Canada has been declining in recent years at a rate of 3% annually.

Despite option D being a relevant trend, specific to the plan to target more Canadian colleges and universities, the modest increase in consumption of coffee by 18- to 24-year-olds would appear to be the most important trend.

24. The local City Hall is assessing the need to build an additional community centre in the town. To be successful, they need to understand demographic shifts in the population and various cultural changes in their community. The City will be most concerned with which force?
A.ecology.
B. macroeconomic conditions.
C. regulatory forces.
D. social forces.

Figure 3-1.

25. Changes in social forces can have a dramatic impact on a marketing strategy, some of these social forces in the environment include the demographic characteristics of the population, and it’s _____.
A.living standards
B. social class
C. values
D. dialect

Social forces are those forces of the environment that include the demographic characteristics of the population and its values.

Blooms: Understand
Difficulty: Easy
Learning Objective: 03-02 Describe how social forces, such as demographics, and cultural and economic forces, such as macroeconomic conditions and consumer income, affect marketing.
Topic: 03-06 Demographics

26. A magazine that appeals to single parents has noticed an increase in monthly subscription sales over the last several years. After completing their environmental scan, they attribute this increase to a change in which force in the marketing environment?
A.economic
B. competitive
C. technology
D. social

Social forces include changing demographics – in this case an increasing single parent population.

Blooms: Apply
Difficulty: Medium
Learning Objective: 03-02 Describe how social forces, such as demographics, and cultural and economic forces, such as macroeconomic conditions and consumer income, affect marketing.
Topic: 03-06 Demographics

27. More magazine is a new publication designed to appeal to women over the age of 40. Demand for such magazines is an example of how changing _____ characteristics impact the marketing environment.
A.cultural
B. behavioural
C. occupational
D. demographic

Age and gender are demographic characteristics.

28. The Canadian population is over 35 million; by 2050, it is expected to be 44 million and even more ethnically diverse. This demographic information is part of which environmental factor?
A.social
B. technological
C. regulatory
D. economic

The social forces of the environment include the demographic characteristics of the population and its values.

Blooms: Remember
Difficulty: Medium
Learning Objective: 03-02 Describe how social forces, such as demographics, and cultural and economic forces, such as macroeconomic conditions and consumer income, affect marketing.
Topic: 03-06 Demographics

29. The United Way of Canada is constantly monitoring different social forces in the marketing environment. Which statement below most accurately relates to social forces?
A.empower workers to improve their performances.
B. usually have little impact on marketing strategy.
C. include reduced emphasis on trade regulation.
D. include demographics and values.

Demographics are measurable characteristics. Values and attitudes cannot be measured; age and ethnicity can be.

30. Per capita income ranges from $102,000 in Norway, to $52,000 in Canada, to under $500 in Ethiopia. Per capita income is a component of which environmental category?
A.cultural
B. behavioural
C. occupational
D. demographic

Demographics is the study of the characteristics of a human population. These characteristics include population size, growth rate, gender, marital status, ethnicity, income, and so forth.

31. The fastest growing population segment in Canada was born between 1946 and 1964. This segment is known as:
A.generation X
B. baby boomers
C. generation Y
D. mid-millenials

A major reason for the greying of Canada is that the baby boomers -the generation of those born between 1946 and 1964-are growing older.

32. Michael is recently divorced and has two children. He moves in with Leanne, also a recent divorcee who has one child. How is this new family structure classified?
A.Brady Bunches
B. Blended families
C. Merged families
D. Hallmark families

A blended family is a family formed by the merging into a single family of two previously separated units.

33. Over 50 percent of the Canadian population is located in just the top 10 CMAs in the country, which include such cities as Toronto, Montreal, Vancouver, Ottawa, Calgary, and Edmonton. In this instance, CMAs stands for:
A.Canadian metropolitan areas
B. Census metropolitan areas
C. Certified metropolitan areas
D. Canadian market areas

Census metropolitan areas (CMAs) are geographic labour markets having a population of 100,000 persons or more.

Blooms: Remember
Difficulty: Easy
Learning Objective: 03-02 Describe how social forces, such as demographics, and cultural and economic forces, such as macroeconomic conditions and consumer income, affect marketing.
Topic: 03-06 Demographics

34. Walmart decides to run two different ads in Toronto, Ontario. One, in a predominant Chinese market, is written in Chinese; the other, in a large Italian area, is written in Italian. Walmart is engaging in what type of marketing?
A.discriminatory marketing
B. micromarketing marketing
C. social marketing
D. ethnic marketing

Ethnic marketing is the combinations of the marketing mix that reflect the unique attitudes, race or ancestry, communication preferences, and lifestyles of ethnic Canadians; sometimes called multicultural marketing.

35. In many Inuit communities in Northern Canada, elders pass on values, ideas, and attitudes through stories and songs to members of their generational family. These items that are learned and shared among members of a group are collectively known as:
A.culture
B. ethnicity
C. pychographics
D. ethnographics

Culture is the set of values, ideas, and attitudes that are learned and shared among the members of a group.

36. A day care conducted a survey and found that 60 percent of Canadian women work outside the home and are no longer home to watch children that are too young for school. The day care offers a special that says: “Heading back to work after maternity leave? Leave the kid watching up to us!” The day care is taking advantage of which trend?
A.competitive trend
B. family trend
C. regulatory trend
D. cultural trend

A noteworthy cultural trend in Canada is that 60 percent of Canadian women work outside the home and in fact, women now make up close to half of the Canadian labour force.

37. Kraft Canada launched a specific microsite for new Canadians who recently arrived from South Asia, called Kraft Ka Khana. As a multicultural marketer, Kraft can do many of the following examples of things to engage with a diverse audience, except ________.
A.start to customize, not generalize
B. build a relationship with your ethnic Canadian customers. Acknowledge them as Canadians while respecting them for being different in their culture and value systems
C. build stereotypes
D. spend your resources in gaining knowledge of these ethnic markets, including good field research

MARKETING MATTERS – Engaging Canada’s Ethnic Groups Using Social Media: A Marketing Imperative.

Blooms: Understand
Difficulty: Medium
Learning Objective: 03-02 Describe how social forces, such as demographics, and cultural and economic forces, such as macroeconomic conditions and consumer income, affect marketing.
Topic: 03-07 Culture

TB Figure 1

38. According to TB Figure 1 above, by the year 2050, which age group is projected to account for most of the world’s population?
A.0-14
B. 15-59
C. 60-69
D. 70-79

By the year 2050, the world population age group 15-59 will have the most members as shown by the red dotted line at the top of the chart.

Blooms: Apply
Difficulty: Hard
Learning Objective: 03-02 Describe how social forces, such as demographics, and cultural and economic forces, such as macroeconomic conditions and consumer income, affect marketing.
Topic: 03-06 Demographics

39. According to TB Figure 1 above, in 2005 the approximate size of the world population of those aged 0-14 was
A.5.5 billion
B. 4 billion
C. 1.5 billion
D. 1 billion

In 2005 (shown in the middle of the horizontal axis) the population of the 0-14 age group (shown by the middle turquoise line) was approximately 1.5 billion.

40. According to TB Figure 1 above, in what year will the population totals for people under 14 and people over 60 be relatively the same?
A.Sometime in the 1950s
B. Sometime in the 1990s
C. In the year 2008
D. Sometime in the 2040s

At some point in the years 2040 to 2050 the population under 14 year olds begins to decline and the population of people over 60 continues to grow. The lines on the graph indicate that they cross at some point in the 2040s.

41. Last year, Samsung used a print ad showing their latest smartphone as an item for sale in a vending machine. Which generational cohort is Samsung most likely trying to reach?
A.Generation X
B. Baby boomers
C. Generation Y
D. The baby bust generation

Generation Y exerts influence on music, sports, computers, video games, and especially cell phones. Generation Y views wireless communication as a lifeline to friends and family and was the first to use Web-enabled mobile phones to stream video, send and receive text messages, play games, and access e-mail.

42. The generation of children born to baby boomers, a period of increasing births, is sometimes referred to as a(n):
A.baby boomer
B. baby buster
C. boomerang
D. echo-boom

Generation Y includes those born between 1977 and 1994. This was a period of increasing births, which resulted from baby boomers having children, and it is sometimes referred to as the echo-boom or baby boomlet.

43. HSBC Bank International Ltd. (Europe’s largest bank) selected its advertising agency because that agency was “always sensitive to the possibility that something might not translate well or may offend superstitions about colours or numbers.” Its advertising agency was responsive to
A.psychographic differences.
B. population shifts.
C. racial and ethnic diversity.
D. a value consciousness.

Many companies are developing multicultural marketing programs, which are combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preferences, and lifestyles of different races.

44. Anya has been instructed to prepare a short paper on her ancestry. She has asked some friends to explain the topic to her. Which of the following statements offers the BEST explanation?
A.She is supposed to write about her family’s customs.
B. She is supposed to describe the personalities in her family.
C. She is supposed to write about the ethnic composition of her family.
D. She is supposed to write about any geographical shifts her family has made and how it changed them.

Demographics is the study of the characteristics of a human population. These characteristics include population size, growth rate, gender, marital status, ethnicity, income, and so forth.

45. When assessing the viability for a new store location, Starbucks will review the population distribution, income, and occupation of those residents that inhabit each area. Which item below is Starbucks most concerned with?
A.cultural census
B. psychographics
C. social audit
D. demographics

Demographics is the study of the characteristics of a human population. These characteristics include population size, growth rate, gender, marital status, ethnicity, income, and so forth.

46. Environmental scans have shown that the population of Canada is undergoing dramatic change. For example, the number of people in this country who are between the ages of 20 and 34 has declined since 1990. On the other hand, the number of people who are 65 years of age or older has increased. These changes in the Canadian population are examples of _____ changes to which marketers must respond.
A.cyclical population
B. psychographic
C. demographic
D. situational segment

The fastest growing age segment in Canada consists of the consumers who are over 50 years of age. The study of the characteristics of a population’s age, sex, income, occupation, and ethnic background are all examples of demographics.

47. A new travel company decides to launch a ‘concierge-style’ travel service that organizes everything from pick-up at home, transport to the airport, and all the little aspects of the subsequent trip, such as transportation and meals. Further, they have selected all of the hotels to be wheelchair- and walker- friendly. Who is the likely target market for this travel company?
A.infants.
B. people over 50 years of age.
C. children of baby boomers.
D. teens.

In Canada, by 2011, almost 15 percent of the population will be over the age of 65.

48. By 2050, the median age in Canada will increase by almost:
A.2 years.
B. 4 years.
C. 5 years.
D. 9 years.

In Canada, the median age will rise from 40 years of age to almost 45 years of age by 2050.

49. Toyota Canada recently developing a spin-off company to develop and market a new brand of vehicles called Scion to appeal to the Generation Y group, while still marketing their traditional brands, such as the Toyota Camry, to the baby boomers is an example of:
A.age cohort marketing.
B. generational marketing.
C. chronological automobile marketing.
D. ageist marketing.

Because the members of each generation are distinctive in their attitudes and consumer behaviour, marketers have been studying the many groups or cohorts that make up the marketplace and have developed generational marketing programs for them.

50. Since the mid-1970s, there has been a major shift in the Canadian population from rural to urban areas. In fact, more than _______ of Canadians are urban dwellers.
A.60%
B. 70%
C. 80%
D. 90%

Since the mid-1970s, there has been a major shift in the Canadian population from rural to urban areas. In fact, more than 80 percent of Canadians are urban dwellers.

51. The principal source of growth in the Canadian population will be from:
A.an increasing birth rate.
B. an increasing rate of multiple births (twins, triplets etc.).
C. emigration.
D. immigration.

With Canada’s declining birth rate, the principal source of growth in the Canadian population will be from immigration, which will add even more diversity to the Canadian population.

52. The Government of Canada recently completed a population census. Their findings indicate that generally, the population of Canada is becoming:
A.younger and more diverse.
B. older and more diverse.
C. younger and less diverse.
D. older and less diverse.

The population of Canada is becoming older and more diverse.

53. When individuals publish information on social networking sites, such as Facebook, Twitter, or Google+, they are generating what type of content?
A.user-generated content
B. self-published content
C. social media content
D. self-generated content

User-generated content (UGC) is media generated by users (customers) and disseminated via various channels, in particular, the Internet.

Blooms: Remember
Difficulty: Easy
Learning Objective: 03-03 Describe how technological changes are impacting marketers and customers.
Topic: 03-08 Economic Forces

54. Why might a new company decide to target baby boomers, as opposed to Generation X?
A.include most of the important business leaders in Canada.
B. represent a small proportion of the population but have large disposable incomes.
C. have the longest life expectancies, and therefore, they will remain active in the market place for the longest period of time.
D. have experienced increased earnings and they account for the majority of consumer product purchases.

Baby boomers in Canada account for the majority of the purchases in most consumer product and service categories.

55. While watching the recent election or SuperBowl, a Twitter hashtag was superimposed at the bottom of the television screen, encouraging viewers to tweet their thoughts about the event. Considering that 65 percent of Canadians are also using this space for accessing the internet and using various gadgets, experts are referring to this shift as the new:
A.digital living room
B. internet space
C. digital domain
D. internet domain

In a recent study, 65 percent of Canadian families surveyed believed their living rooms were physically and experientially changing, including greater use of the Internet and the streaming of content as well as greater interconnectivity between gadgets in the home-what some call the “new digital living room.”

Blooms: Apply
Difficulty: Medium
Learning Objective: 03-03 Describe how technological changes are impacting marketers and customers.
Topic: 03-08 Economic Forces

56. Which of the following statements about baby boomers is NOT true?
A.Baby boomers account for the majority of the purchases in most consumer product and service categories.
B. Generally, baby boomers are receptive to anything that makes them look and feel younger.
C. Baby boomers will change their buying behaviour to reflect concern about their children and future retirement issues.
D. With advances in modern medicine, the aging baby boomer group is experiencing less age-related health problems.

Baby boomers is the generation of those born between 1946 and 1964. The aging baby boomer group experiences health problems related to aging, such as incontinence and erectile dysfunction (ED). In fact, there is a heated ED marketing war in Canada as drug companies vie for a share of this growing market.

57. Drug companies promoting pharmaceutical products designed to address incontinence and erectile dysfunction vie for a share of this growing market in attempting to lure _______.
A.echo-boom members
B. baby boomers
C. members of Generation Y
D. Generation Xers

The aging baby boomer group experience health problems related to aging, such as incontinence and erectile dysfunction (ED). In fact, there is a heated ED marketing war in Canada as drug companies vie for a share of this growing market.

58. Marketers are activating traditional ‘static’ messaging and products by employing which mobile technology to engage consumers?
A.QR Codes
B. foursquare
C. Facebook
D. Twitter

A QR code (quick response code) is changing the mobile marketing game. You simply install a simple “app” on your smartphone and you can scan the code; it converts to a URL and you are directed to a company’s website, store, or product.

Blooms: Remember
Difficulty: Easy
Learning Objective: 03-03 Describe how technological changes are impacting marketers and customers.
Topic: 03-08 Economic Forces

59. “Survivor” has been a very popular television show. It shows a group of sixteen strangers being placed in two competitive teams of eight. Each team must survive in a natural environment that is harsh and demanding. A reviewer described one of the teams in Survivor Africa as being baby boomers versus Generation X. What do you infer from this statement?
A.The reviewer was surprised that baby boomers and members of Generation X were not cooperating because they usually do.
B. That people over the age of 50 will more than likely conflict with people born after 1980.
C. Baby boomers want the same things as Generation X members; this caused the conflict between them.
D. This behaviour was to be expected because baby boomers and members of Generation X are typically very different from each other.

Because the members of each generation are distinctive in their attitudes and consumer behaviour, marketers have been studying the many groups or cohorts that make up the marketplace.

60. When a local coffee shop launches a new mobile version of their traditional website that can be found using a mobile phone, the coffee shop recognizes the importance of:
A.mobile marketing
B. easy-to-read font
C. user-generated content
D. e-marketing

Mobile marketing is perhaps the core emerging digital platform for marketers. More than 26 million Canadians have mobile phones, and more than half of them are using smartphones. Thus, is it little wonder why mobile marketing has become so important.

Blooms: Apply
Difficulty: Medium
Learning Objective: 03-03 Describe how technological changes are impacting marketers and customers.
Topic: 03-11 Technological Forces

61. Mobile marketing is perhaps the core emerging digital platform for marketers because more than ____ million Canadians have mobile phones.
A.16
B. 21
C. 26
D. 31

More than 26 million Canadians have mobile phones.

Blooms: Remember
Difficulty: Medium
Learning Objective: 03-03 Describe how technological changes are impacting marketers and customers.
Topic: 03-11 Technological Forces

62. Search-Engine Optimization (SEO) refers to the concept of:
A.using various techniques to move your content to the top of the first page
B. using various techniques to keep your content confidential
C. ensuring your newsletters do not end up in someone’s spam email box
D. mass marketing

Many marketers use search-engine optimization (SEO) so that when you search for information or items online, the resultant listings for certain keywords are the ones you see first.

Blooms: Remember
Difficulty: Easy
Learning Objective: 03-03 Describe how technological changes are impacting marketers and customers.
Topic: 03-11 Technological Forces

63. Bernadin Canning products recently launched a new home canning, jarring, and preserving DIY kit. Which consumer group is likely to be the target of this traditional activity?
A.Generation X
B. Generation Y
C. Baby boomer
D. A liberal cohort

Generation X comprises of the population of those born between 1965 and 1976.

64. When compared to baby boomers, members of Generation X:
A.save, plan for retirement and take advantage of retirement plans much earlier.
B. are less demanding as consumers.
C. are more extravagant.
D. account for a higher percentage of purchases of consumer products.

According to the text, Generation X are saving, planning for retirement, and taking advantage of retirement plans much earlier than did the boomer generation.

65. When the maker of a popular mobile search application utilizes gesture, touch, and voice in a way to mimic how we operate day-to-day, the application maker recognizes which of the following rising trends?:
A.natural user interfaces
B. smartphones
C. digital living room
D. predominance of Gen Y members to have a smartphone

“Natural user interfaces” utilize gesture, touch, and voice, changing the way we interact with and control computers and complex machines.

Blooms: Apply
Difficulty: Medium
Learning Objective: 03-03 Describe how technological changes are impacting marketers and customers.
Topic: 03-11 Technological Forces

66. How are Generation Y members likely to view wireless communication?
A.critical aspect to their lives
B. a learned concept, because they remember when there was no wireless communication
C. something of the past
D. something they are still learning

Generation Y (Millennials) are those born between 1977 and 1994.

67. The average Canadian family size is about:
A.2 persons.
B. 3 persons.
C. 4 persons.
D. 5 persons.

The types of families in Canada are changing in both size and structure. The average family size in Canada is about three persons.

68. Which of the following statements accurately describes a recent trend in the Canadian family?
A.About 50 percent of all first marriages end in divorce.
B. There is an increase in traditional families.
C. Nearly one-half of all households now consist of people who live alone.
D. About 20 percent of all marriages end in divorce.

There is an increase in households headed by single parents and a decrease in traditional families. About one-fourth of all households now consist of people who live alone and about 50 percent of first marriages end in divorce.

69. Which major demographic factor most likely accounts for a step-parent purchasing one of Hallmark’s specially-designed cards and verses?
A.changes in the Canadian family structure
B. the baby boom
C. geographic shift
D. population trends

Today, many Canadians are finding themselves as a step-parent, step-child, step- sibling, or some other member of a blended family. In fact, Hallmark Cards specially designs cards and verses for such blended families.

70. Over the last three years a local homebuilder has received an increasing number of requests that ask for the home to include several living areas for extended family members staying long term. The major driver of this shift is:
A.changes in the Canadian family structure
B. the baby boom
C. geographic shift
D. population trends

Due to changes in traditional Canadian families, more houses and apartments have two master bedrooms for unmarried, unrelated people sharing space.

71. When Holiday Inn decided to create a new version of their traditional hotel chain called Holiday Inn Express, they recognized that consumers were concerned about obtaining the best quality for a given price. This concept is known as:
A.price matching
B. value consciousness
C. value purchase
D. value business model

Value consciousness is the concern for obtaining the best quality, features, and performance of a product or service for a given price. Sobeys Inc., one of Canada’s top food retailers, offers customers its Compliments Value brand of products, which is a private-label, value-based line. Canada’s major banks offer lower-interest credit cards, some with value-added enhancements, such as frequent flyer programs and cashback offers. Even Canada’s sports, restaurant, and entertainment industries are appealing to the value-conscious customer.

72. Lawyers often joke that they will never run out of business because of the increase in blended families. This is because ____ percent of all first marriages in Canada end in divorce?
A.25
B. 30
C. 50
D. 65

A blended family is a family formed by the merging into a single family of two previously separated units.

73. Marketers are using social media to engage different ethnic groups because it allows for customization of the messages, images, and languages used. This is important because by 2031, it is estimated that _____ percent of the Canadian population will be part of an ethnic group.
A.21
B. 31
C. 41
D. 51

See: Engaging Canada’s Ethnic Groups Using Social Media: A Marketing Imperative.

74. Developing marketing plans to reflect the unique attitudes, ancestry, communication preferences, and lifestyles of ethnic Canadians is called ______.
A.trend marketing
B. ethnic marketing
C. target marketing
D. local marketing

Ethnic marketing (sometimes called multicultural marketing) programs are combinations of the marketing mix that reflect the unique attitudes, race or ancestry, communication preferences, and lifestyles of ethnic Canadians.

75. Since the mid-1970’s, the major shift in Canadian population has been:
A.from urban to rural areas.
B. from rural to urban areas.
C. from western to eastern provinces.
D. from north to south.

Since the mid-1970s, there has been a major shift in the Canadian population from rural to urban areas. In fact, more than 80 percent of Canadians are urban dwellers.

76. Which of the following does NOT constitute one of Canada’s top 10 major CMA urban regions which in total account for over 50 percent of the Canadian population?
A.Toronto
B. Edmonton
C. Calgary
D. Saskatoon

See population shifts.

77. When the retailer Target tried to enter the Canadian market, they decided to open their first twenty stores in Canada in all markets that had a population of 100,000 or more. Target was focused on _____________ areas.
A.census municipal
B. regional marketing
C. census metropolitan
D. micropolitan statistical

Census metropolitan areas (CMAs) are geographic labour markets having a population of 100,000 persons or more.

78. Marketers can now reach large segments of the Canadian population efficiently and effectively because:
A.most Canadians are located outside of four major urban regions
B. since the 1970s there has been a major shift in the Canadian population from urban to rural centres
C. the top 10 CMAs account for more than 50 percent of the Canadian population
D. more than 80 percent of Canadians are rural dwellers

Only option C is true.

79. The trend toward eco-consciousness has opened up numerous opportunities for creative businesspeople who are often referred to as:
A.green inventors
B. green entrepreneurs
C. ecopreneurs
D. eco-inventors

Ecopreneurs are entrepreneurs who see business opportunities through an environmental lens.

80. By 2031 and shortly thereafter, visible minorities will represent the majority of the population of ________ and _________.
A.Calgary; Winnipeg
B. Toronto; St. Catharines
C. Ottawa; Halifax
D. Vancouver; Toronto

In fact, by 2031, visible minorities will represent the majority of the population of Vancouver and Toronto.

81. By 2031, visible minorities are projected to represent almost ____ percent of the Canadian population.
A.10
B. 20
C. 30
D. 40

Visible minorities are projected to represent 30 percent of the Canadian population by 2031.

82. McDonald’s uses different promotional messages in different parts of Toronto, depending on the predominant language spoken. McDonald’s is likely using which strategy?
A.multicultural marketing
B. geographic marketing
C. target marketing
D. segmented marketing

83. The Canadian population is growing older, becoming more ethnically diverse, and increasingly living in nontraditional families. Marketers must observe how _____ forces are affecting the marketing environment.
A.competitive
B. regulatory
C. geographical
D. social

Demographic variables are social forces.

84. HSBC Bank (formerly the Hong Kong Bank of Canada) selected its advertising agency because that agency was “always sensitive to the possibility that something might not translate well or may offend superstitions about colours or numbers.” Its advertising agency was responsive to:
A.psychographic differences.
B. population shifts.
C. culture and ethnic diversity.
D. value consciousness.

Close to 70 percent of all immigrants to Canada are now classified as visible minorities, primarily people from China, Southeast Asia, Africa, and India. Visible minorities are projected to represent between 21 and 25 percent of the Canadian population by 2017. The largest groups will be South Asians, Chinese, and blacks. Specifically, there will be close to 2 million South Asians, 2 million Chinese, and over 1 million blacks in Canada by 2017.

85. The Mutual Bank of Hong Kong selected its advertising agency because that agency was “always sensitive to the possibility that something might not translate well or may offend superstitions about colours or numbers.” This is an example of how _____ forces affect marketing.
A.social
B. technological
C. economic
D. competitive

The social forces include culture and ethnic diversity.

86. The increase in immigration to Canada is likely to result in a firm’s ____________ playing a larger role in marketing.
A.ethnic marketing plans
B. multicultural products
C. immigration strategy
D. product development

Marketers have recognized the growing ethnic diversity in Canada and have developed multicultural marketing programs. Immigration is forecasted to increase significantly in Canada.

87. When a local merchant issues several different ads, each in a different language, and distributed to different areas of the community, they recognize the importance of:
A.Ethnic marketing
B. Functional marketing
C. Psychographic marketing
D. Cultural segmentation

88. In an interview, a potential candidate asked the hiring manager: “What is the culture like at your organization?” In a sense, the candidate was trying to learn about the _________ of the organization.
A.values, ideas, and attitudes
B. attitudes, ancestry, lifestyles
C. attitudes, ancestry, communication preferences
D. religious beliefs

Culture is the set of values, ideas, and attitudes that are learned and shared among the members of a group.

89. When a local gift shop creates an online “gift” for the mobile game CityVille that users can purchase and play with online, this is an example of:
A.mobile marketing
B. the interaction between real life and virtual worlds
C. social media marketing
D. gift-exchange marketing

See mobile marketing.

Blooms: Apply
Difficulty: Medium
Learning Objective: 03-03 Describe how technological changes are impacting marketers and customers.
Topic: 03-11 Technological Forces

90. Many Canadian consumers, particularly working women, are living harried lives and want to do business with companies that can offer them greater convenience. Many businesses are responding by offering express lanes of checkouts, longer store hours, drive-through windows, delivery services, and electronic shopping. These businesses are responding to customers experiencing:
A.chronological destitution.
B. time poverty.
C. job burnout.
D. role stress.

The number of tasks to do is expanding, while the time available to do them is shrinking. This has led to the phenomenon of time poverty.

91. TD Bank has recognized the trend of consumers experiencing time poverty, and has implemented numerous strategies except:
A.offering express lanes for business
B. having longer opening store hours
C. having drive-through windows
D. having only one receptionist working at a time

The number of tasks to do is expanding, while the time available to do them is shrinking. This has led to the phenomenon of time poverty. Many businesses are responding by offering express lanes of checkouts, longer store hours, drive-through windows, delivery services, and electronic shopping.

92. Sobeys Inc., a major supermarket, offers its shoppers the convenience of one-stop shopping, including groceries, in-store pharmacies, wellness centres, and banking services. In this way, they are able to reach those who are ________________.
A.wealthy
B. of various ethnic backgrounds
C. making routine purchase decisions
D. time poor

With more working women, the number of tasks to do is expanding, while the available time to do them is shrinking. This is referred to as time poverty in the text.

93. Responding to consumer demand for value, Sobeys offers a line of products that come with a low-price guarantee. In this way, they are able to reach those who are ________________.
A.wealthy
B. of various ethnic backgrounds
C. making a routine purchase decision
D. value conscious

Value consciousness is the concern for obtaining the best quality, features, and performance of a product or service for a given price.

94. Within the Canadian labour force, the number of tasks to do is expanding, while the time available to do them is shrinking. This has led to the phenomenon of ________________.
A.technology adaptation
B. time poverty
C. less holidays
D. higher wages

Within the Canadian labour force, the number of tasks to do is expanding, while the time available to do them is shrinking. This has led to the phenomenon of time poverty.

95. You are the marketing director for McDonald’s and have observed increased sales of salads, water, and hamburgers with no mayo on them. As a result, you decide to offer a “buy one large salad and receive a bottle of water for free” promotion at your stores. Which environmental force most likely has contributed to this change in dietary habits?
A.economic
B. regulatory
C. competitive
D. social

One of the main cultural attitude shifts over the past few years has been an ever greater concern with health and well-being, which has led to diet-conscious interests.

96. There is a greater concern for health and well-being in Canada. This is evidenced by:
A.increased sales of Cigar Afficionado magazine.
B. the level of fitness activity and sports participation in Canada.
C. no cannibalization in the sales of Coke relative to Diet Coke or Coke Zero.
D. the opening of a record number of Granny’s Old-Fashioned Ice Cream outlets.

Canadians are more concerned about their diets and health.

97. The set of values, ideas, and attitudes of a homogeneous group of people that are transmitted from one generation to the next is called:
A.social class.
B. morals.
C. culture.
D. reference groups.

Culture is the set of values, ideas, and attitudes that are learned and shared among the members of a group.

98. Holiday Inn Worldwide offers customers Holiday Inn Express hotels, which feature comfortable accommodations with room rates lower than the traditional Holiday Inns. In this way, they are able to reach those who are ________________.
A.wealthy
B. of various ethnic backgrounds
C. making a routine purchase decision
D. value conscious

Value consciousness is the concern for obtaining the best quality, features, and performance of a product or service for a given price.

99. Canada’s major banks offer lower-interest credit cards, some with value-added enhancements, such as frequent flyer programs and cash-back offers. In this way, they are able to reach those who are ________________.
A.wealthy
B. of various ethnic backgrounds
C. value conscious
D. making a routine purchase decision

Value consciousness is the concern for obtaining the best quality, features, and performance of a product or service for a given price.

100. A Vancouver-based packaging company has created a package made from a renewable resource called palm fibre, which composts in less than 90 days and provides a healthy contribution to soil. In this way, they are able to reach those who are ________________.
A.wealthy
B. of various ethnic backgrounds
C. eco-conscious
D. making a routine purchase decision

Another emerging consumer trend is eco-consciousness or going green. Many Canadians are more sensitive about the impact their consumption has on their natural environment, and they make their buying decisions accordingly. This may mean buying more environmentally safe or more environmentally friendly products, buying products that can be reused or recycled, or actually reducing consumption altogether.

101. Spending on foreign travel is up, spending on entertainment and dining outside the home is also up, in particular, spending on ethnic foods. This illustrates another important trend in that Canadians are becoming more ________.
A.technological
B. experiential
C. economic
D. ecological

Another important trend is that Canadians are becoming more experiential.

102. A consultancy is presenting to their client about the importance of creating a friendly working culture to increase productivity. Which of the following statements about culture is true?
A.Culture includes attitudes and values.
B. Culture is an example of an economic force within the marketing environment.
C. Because Canada is considered a “melting pot,” cultural trends are typically not monitored by businesses.
D. Culture is only considered an important facet of marketing in international marketing.

Culture incorporates the set of values, ideas, and attitudes of a homogenous group of people that are transmitted from one generation to the next.

103. The change in attitudes about work, from “I live to work” to “I work to live,” helps explain which of the following?
A.population shift to urban areas
B. stable gross income
C. Safeway Stores advertising in Newsweek magazines
D. growth in sales of Blu-Ray players, sports equipment, and easily prepared meals

Many consumers now see work as a means to an end-leisure, and entertainment. Product categories described in answer choice “growth in sales of Blu-Ray players, sports equipment, and easily prepared meals” are growing as consumers’ attitudes toward work influence their purchases.

104. The roles of men and women in Canadian society have changed dramatically during the past decades. For instance, more women are actively and successfully pursuing careers in both the public and private business sectors. Women across the nation have established successful managerial and professional positions as doctors, lawyers, and astronauts. Such changes in the role of women in society have necessitated that marketers adjust their marketing activities. Which of the following is NOT an example of marketing changes due to changing roles of women in the workforce?
A.24-hour grocery stores
B. extended banking hours
C. automatic teller machines
D. a promotional campaign by televangelist espousing the virtues of home-cooking, children being raised at home by their mothers, and denouncing daycare services

In response to changes in the roles and consumption patterns of women, marketers have adapted, adjusted, and modified many of their marketing efforts. The traditional role of women would suggest that women were home with the children and as such, were free to shop during regular business hours (i.e., 9 am – 5 pm). With an increase in dual-income families, marketers have had to become more flexible to accommodate the changing needs of the consumer.

105. Which of the following factors can be used to help explain why Generation Y women no longer feel the need to be feminists?
A.The television industry eliminated all shows where the woman was a stay-at-home mother.
B. The movie industry stopped making films about dependent women.
C. They were able to shop freely on the Internet.
D. Their mothers worked and gave them a reference point for lifestyle choices.

Neither the television nor the movie industry has abandoned the use of stereotypically dependent women.

Blooms: Understand
Difficulty: Hard
Learning Objective: 03-02 Describe how social forces, such as demographics, and cultural and economic forces, such as macroeconomic conditions and consumer income, affect marketing.
Topic: 03-07 Culture

106. When car manufacturers advertise that they offer the highest quality of vehicle available with all of the most desirable features at the lowest possible price, they try to compete by appealing to consumers’________________.
A.value consciousness
B. perceived value desires
C. focused shopping habits
D. price targeting

Value consciousness is the concern for obtaining the best quality, features, and performance of a product or service for a given price.

107. Video bloggers or _________ is growing in popularity in Canada?
A.social bloggers
B. vloggers
C. vid-bloggers
D. video bingers

Video blogging is called vlogging and the Canadians who do it are called vloggers.

Blooms: Remember
Difficulty: Medium
Learning Objective: 03-03 Describe how technological changes are impacting marketers and customers.
Topic: 03-11 Technological Forces

108. The concern for obtaining the best quality, features, and performance of a product or service for a given price will drive consumption behaviour into the foreseeable. This is known as:
A.price consciousness
B. stinginess
C. frugality
D. value consciousness

Value consciousness is the concern for obtaining the best quality, features, and performance of a product or service for a given price.

109. Sobeys Inc., one of Canada’s top food retailers, offers customers its Compliments Value brand of products, which is a private-label brand at a lesser price. This is designed to appeal to:
A.an ethnically diverse market.
B. value conscious consumers.
C. population age shifts.
D. geographic shifts.

Value consciousness is the concern of obtaining the best quality, features, and performance of a product or service for a given price. Sobeys Inc., one of Canada’s top food retailers, offers customers its Compliments Value brand of products, which is a private-label, value-based line.

110. Statistics Canada reports that Canadians are consuming less sugar, less fat, and fewer calories in their diets. Many Canadians are also drinking healthier beverages, including bottled water and juices, instead of traditional soft drinks in response to the obesity public health threat. This concern represents:
A.changing values.
B. change in population composition.
C. demographic change.
D. increase in value consciousness.

Culture includes values.

111. A local community league has seen a steady month-over-month increase in the number of individuals who join their weeknight pick-up sports activities. Clearly, this community is seeing a(n) __________ as it relates to an individual’s health.
A.change in attitude
B. change in interests
C. increase in peer pressure by family members
D. increase in value consciousness

Culture includes attitudes.

112. eBay, which allows consumers to engage in online buying and selling globally, is known as a:
A.consumer-to-consumer marketing site
B. consumer-seller direct marketing site
C. entrepreneur marketing site
D. buyer-seller marketing site

Consumer-to-consumer (C2C) marketing sites allow consumers to buy and sell products and services among themselves.

Blooms: Apply
Difficulty: Medium
Learning Objective: 03-03 Describe how technological changes are impacting marketers and customers.
Topic: 03-11 Technological Forces

113. Which component of the marketing environment pertains to the income, expenditures, and resources that affect the cost of running a business or household?
A.Ecology
B. The economy
C. Technology
D. Culture

Economy pertains to the income, expenditures, and resources that affect the cost of running a business and household.

114. In a 2001 survey conducted immediately after the World Trade Centre attack, 47 percent of the women who responded to the survey said they were not going to treat themselves to small luxuries like manicures, and 54 percent said they would not be buying any expensive clothes. These results of this survey most directly relates to the _____ forces within the marketing environment.
A.economic
B. regulatory
C. competitive
D. social

Buying intentions are part of the microeconomic environment.

115. Surveys of consumer expectations are tracked over time by researchers, who ask such questions as “Do you expect to be better off or worse off financially a year from now?” Surveyors record the share of positive and negative responses to this question and related ones to develop an index, sometimes called a consumer confidence or consumer sentiment index. These results of these surveys most directly relate to the _____ forces within the marketing environment.
A.economic
B. regulatory
C. competitive
D. social

Buying intentions are part of the economic environment, as part of the environmental scanning process of the marketing environment.

116. MJ Home Builders Inc. reviews the monthly published ‘Consumer Confidence’ report, issued by the Federal Government, as one consideration when deciding to begin building more homes. This report would be considered an aspect of _____ forces within the marketing environment.
A.economic
B. regulatory
C. competitive
D. social

Buying intentions are part of the microeconomic environment.

117. The total amount of money made in one year by a person, household, or family unit is known as:
A.income
B. net income
C. disposable income
D. gross income

Gross income is the total amount of money made in one year by a person, household, or family unit.

118. As a new graduate, you made a salary of $50,000CDN; after paying taxes to use for such necessities as food, shelter, clothing, and transportation, you have $22,000CDN left over. This amount is known as your:
A.income
B. net income
C. disposable income
D. gross income

Disposable income is the money a consumer has left after paying taxes to use for such necessities as food, shelter, clothing, and transportation.

119. After paying taxes, living expenses, and necessities, you realize you have enough money to go on a week-long vacation to Turks and Caicos. This money is likely coming from which account?
A.discretionary income
B. net income
C. disposable income
D. gross income

Discretionary income is the money that remains after paying for taxes and necessities.

120. If a family has Royal Doulton china, Rolex watches, and Lexus automobiles, one could assume that they have, or had:
A.income
B. net income
C. disposable income
D. discretionary income

Discretionary income is the money that remains after paying for taxes and necessities.

121. Some merchants at the beginning of the 2007 Christmas season were worried consumers would not be willing to buy as much as they had in years previously. As a result, these retailers purchased fewer items for their inventories. Manufacturers sold less because the retailers did not want to have as large an inventory as usual. Manufacturers had to lay people off because their production was down, and many consumers actually did have less money to spend. This is an example of how _____ forces directly affect marketing.
A.economic
B. social
C. regulatory
D. technological

The economy, pertains to the income, expenditures, and resources that affect the cost of running a business and household.

122. Components of a consumer’s income include:
A.inflation, recession, and recovery.
B. salary, wages, commissions, and fees.
C. gross, disposable, and discretionary incomes.
D. taxes, perquisites, and salary.

A consumer’s ability to buy is related to actual income, which consists of gross, disposable, and discretionary components.

123. At the end of one year you made $100,000CDN, this income is known as:
A.Inflationary
B. Discretionary
C. Disposable
D. Gross

Gross income is the total amount of money made in one year by a person, household, or family unit.

124. Tracy Smith has a disposable income of $1,600. Her disposable income represents 80 percent of her gross income. What is her gross income?
A.$5,400
B. $3,200
C. $2,000
D. $1,600

Since disposable income is 80 percent of Ms. Smith’s gross income: 0.8X = $1,600, X = $2,000.

125. The money a consumer has left after paying taxes to use for food, clothing, and shelter is known as:
A.Net
B. Discretionary
C. Disposable
D. Household

Disposable income is the money a consumer has left after paying taxes to use for such necessities as food, shelter, clothing, and transportation.

126. In recent years, Canadians have spent a decreased portion of their disposable income for eating out. Two factors account for this trend – the recession of the early ’90s and many baby boom households are in the midst of their child-raising years, causing increased spending on food at home. This is an example of how _____ forces directly affect marketing.
A.economic
B. governmental
C. technological
D. social

Economic forces include income, expenditures, and resources that affect the cost of running a household.

127. When taxes rise at a faster rate than does disposable income, what must consumers do?
A.economize
B. spend more
C. go on vacation
D. retire early

Disposable income is the money a consumer has left after paying taxes to use for such necessities as food, shelter, clothing, and transportation.

128. Which product below is likely purchased using discretionary income?
A.a new watch
B. condo fees
C. grocery bill for milk
D. a new suit for work

Discretionary income is used for luxury items such as vacations.

129. Emily had an excellent year as a saleswoman in 2007. She earned $97,000. She paid $17,000 for “necessities” such as mortgage, food, and clothing. She was given a six-week all expenses paid vacation by the company for her sales performance that had a value of $9,000. Her provincial and federal income taxes totaled $24,000. What was her discretionary income?
A.$56,000
B. $73,000
C. $80,000
D. $88,000

Discretionary income is the money that remains after paying for taxes and necessities. Therefore, $97,000 gross income less 17,000 for necessities less 24,000 for taxes equals $56,000 for discretionary income.

130. Frank has a gross income of $24,000. He pays $4,000 in taxes. His yearly expenditures for food, shelter, and clothes total $17,250. What is his discretionary income?
A.$2,750
B. $6,750
C. $13,250
D. $20,000

Since discretionary income is the money that remains after paying taxes and necessities from gross income: Therefore, $24,000 equals gross income, less $4,000 for taxes and less $17,250 for food, clothing, and shelter equals $2,750 for discretionary income.

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Marketing 10th Canadian Edition By Frederick Crane – Test Bank

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