Analyzing the Marketing Environment Part 4

91) Companies in several industries have recognized the buying power of the LGBT segment of the U.S. population and have begun explicitly targeting these consumers with gay-specific ads and marketing efforts. Answer: TRUE 92) Prior to the Great Recession of 2008/2009, American consumer spending was careful and restrained. Answer: FALSE 93) What are two potential drawbacks of creating separate products and marketing programs for each generation? Answer: Some experts warn that marketers need to be careful about turning off one generation each time they craft a product or message that appeals effectively to another. Others caution that each generation spans decades of time and many socioeconomic levels. 94) Briefly explain why, until 2008, Americans amassed record amounts of debt and why the free-spending trend has ended. Answer: Americans spent freely, fueled by income growth, a boom in the stock market and rapid increases in home values. Americans bought and bought, seemingly without caution, amassing record levels of debt. However, the free spending and high expectations of those days were dashed by the Great Recession of 2008/2009. 95) Why do marketers find baby boomers attractive? Answer: Today's baby boomers account for about 26 percent of the U.S. population but control an estimated 70 percent of the nation's disposable income. 96) How can marketers reach the Millennials effectively? Answer: Millenials engage with brands in an entirely new way, such as with mobile or social media. More than sales pitches from marketers, Millennials seek opportunities to shape their own brand experiences and share them with others. Many brands are now fielding specific products and marketing campaigns aimed at Millennial needs and lifestyles. 97) How can marketers reach the Generation Zers effectively? Answer: The social media will play a crucial marketing role as the kids and tweens grow into teens. Today's kids are notoriously hard to pin down. The key is to engage these young consumers and let them help to define their brand experiences. Says one expert, "They love sensory overload—bright colors, music videos, a variety of merchandise, the tumult of all that." 98) What structure can an American family have now, as the traditional family has changed? Answer: The traditional household consists of a husband, wife, and children (and sometimes grandparents). Yet couples without children, single parents, and nonfamily households are groups growing more quickly than traditional households. 99) Why do population shifts interest marketers? Answer: Population shifts interest marketers because people in different regions buy differently. For example, in the United States, people in the Midwest buy more winter clothing than people in the Southeast. 100) In terms of ethnic and racial makeup, why is the United States today more accurately characterized as a "salad bowl" than a "melting pot"? Answer: The United States has often been called a melting pot, where diverse groups from many nations and cultures have melted into a single, more homogeneous whole. Instead, the United States seems to have become more of a "salad bowl" in which various groups have mixed together but have maintained their diversity by retaining and valuing important ethnic and cultural differences. 101) What is demography? Why is the demographic environment of major interest to marketers? Discuss the changing age structure of the U.S. population. Answer: Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. The demographic environment is of major interest to marketers because it involves people, and people make up markets. Marketers can learn much about human populations in terms of changing age and family structures, geographic population shifts, educational characteristics, population diversity, and other statistics. Based on age structure, the U.S. population can be categorized into several generational groups; the three largest among them are the baby boomers, Generation X, and the Millennials. The baby boomer market of 78 million people is one of the most powerful forces shaping the marketing environment. Considerably smaller than the boomer generation that precedes them and the Millennials who follow, the Generation Xers are a sometimes overlooked consumer group. Although they seek success, they are less materialistic than the other groups; they prize experience, not acquisition. For many of the Gen Xers who are parents, family comes first—both children and their aging parents—and career second. From a marketing standpoint, the Gen Xers are a more skeptical bunch. They tend to research products before they consider a purchase, prefer quality to quantity, and tend to be less receptive to overt marketing pitches. They are more likely to be receptive to irreverent ad pitches that make fun of convention and tradition. The Millennials (or Generation Y) are the 83 million children of the baby boomers born between 1977 and 2000. One thing that all Millennials have in common is their comfort with digital technology. They don't just embrace technology; it's a way of life. Rather than having mass-marketing messages pushed at them, the Millennials prefer to seek out information and engage in two-way brand conversations. Generation Zers make up important kids, tweens, and teens markets that influence almost $200 billion of their own and parents' spending. They are utterly fluent with technology and take it for granted. They are highly mobile, connected, and social. They blend the online and offline worlds seamlessly as they socialize and shop. 102) Explain the impact of the baby boomers, Generation Xers, Millennials, and Generation Zers on today's marketing strategies. Answer: Today's baby boomers account for about 26 percent of the U.S. population but control an estimated 70 percent of the nation's disposable income. This group is an attractive market for financial services, new housing and home remodeling, travel and entertainment, and health and fitness products, among others. Generation Xers carry a more cautious outlook; they are less materialistic than baby boomers, so marketers must use a different approach to appeal to them. Millennials are children of the baby boomers. One thing that all Millennials have in common is their comfort with digital technology. They don't just embrace technology; it's a way of life. The Millennials were the first generation to grow up in a world filled with computers, mobile phones, satellite TV, iPods and iPads, and online social networks. As a result, they engage with brands in an entirely new way, such as with mobile or social media. Rather than having massmarketing messages pushed at them, the Millennials prefer to seek out information and engage in two-way brand conversations. Thus, reaching them effectively requires creative marketing approaches. Generation Zers are born after 2000 and make up important kids, tweens, and teens markets that influence almost $600 billion of their own and parents' spending. They are utterly fluent with technology and take it for granted. They are highly mobile, connected, and social. They blend the online and offline worlds seamlessly as they socialize and shop. Marketers need to form more precise age-specific segments within each group. More important, defining people by their birth date may be less effective than segmenting them by their lifestyle, life stage, or the common values they seek in the products they buy. 103) The physical environment affecting marketing activities is referred to as the ________ environment. A) economic B) natural C) cultural D) political E) social Answer: B 104) The environmental sustainability movement encourages companies to ________. A) actively resist social change B) operate freely in the black market C) go beyond government regulations D) institute deregulation E) curb organizational anarchy Answer: C 105) As a consequence of the concern for the natural environment, many companies are developing strategies and practices that support ________. A) government intervention B) environmental sustainability C) deregulation D) mass marketing E) rapid exploitation of natural resources Answer: B 106) A firm dumping chemical wastes in the local lake is ________. A) actively resisting social change B) contributing to organizational anarchy C) engaging in a "do well by doing good" mission D) adopting a proactive stance toward the marketing environment E) contributing to increased pollution Answer: E 107) New technologies most likely lead to ________. A) economic imbalance in society B) reduced exports C) trade deficits D) an increased demand for unskilled labor E) new markets and opportunities Answer: E 108) Many firms today use RFID technology to ________. A) identify new target markets B) analyze threats and opportunities in the macroenvironment C) move toward environmental sustainability D) track products through various points in the distribution channel E) track patterns of online consumer behavior Answer: D 109) Many companies use RFID product labels on their goods, which exemplifies the ________ environment in business. A) natural B) political C) economic D) demographic E) technological Answer: E 110) Which of the following is most likely a result of regulations set up by the Food and Drug Administration and the Consumer Product Safety Commission? A) The time between new product ideas and their introduction to the market has decreased. B) Annual spending on research and development has decreased. C) Research costs for companies have risen. D) Product innovation has significantly declined. E) Marketers have grown increasingly apathetic toward meeting safety standards. Answer: C 111) Trends in the natural environment include all of the following EXCEPT ________. A) increased government intervention B) the development of an environmental sustainability movement C) increased pollution D) decreased costs of product development E) shortages of raw materials Answer: D 112) Which of the following is a true statement about the benefits of RFID technology? A) It allows firms to track products and customers at various points in the distribution channel. B) The chips are used to track shipments but not individual items. C) The chips do not risk invading people's privacy. D) Sharing of data decreases the buying experience for consumers. E) The technology will be available for the foreseeable future, allowing companies to fully invest in its capabilities. Answer: A 113) Regulations force companies to be responsible. However, most companies want to be responsible. Impacts of government regulations include all of the following EXCEPT ________. A) informing the public that products are safe B) higher research costs C) increased sales because they have been found to be safe D) penalties to companies that fail to meet the regulations E) longer times between new product ideas and their introduction Answer: A Refer to the scenario below to answer the following question(s). Casey Brickly opened The Landing, a convenience store on the north shore of Witmer Lake, in 1962. With a sandwich counter on one side and a bait shop and grocery on the other, The Landing was an immediate hit with weekend lake visitors and local residents alike. In the summer, boaters parked at the piers and bought all their fishing needs, such as rods and reels, bait, snacks, and soft drinks at The Landing. Even during the winter months, snowmobilers and ice fishermen were lured to The Landing for snacks and hot coffee or hot chocolate. As time passed, the business changed and grew tremendously. What was formerly a weekend tourist area gradually became a full-fledged residential area. Many of the houses, which were built as cottages in the 1950s and 1960s, were remodeled into residential homes. By the end of the 1970s, the days of small motorboats and 10 mile-per-hour speed limits were gone; skiing and fast speedboats became the rage. Through it all, The Landing continued to attract flocks of patrons. In the 1980s, however, Casey started to realize that the grocery area in The Landing could not compete with larger local retailers. He eventually enlarged the sandwich counter, transforming the bait shop and grocery into a restaurant with a full menu typical of any diner. "Getting rid of the bait shop was hard to do," Casey admitted. "I still had a summer crowd that relied on us for their fishing needs, but we couldn't survive a whole year on four months of profit." In the early 2000s, the atmosphere of Witmer Lake and the neighboring lakes became upscale. "I could see that people were spending more on their speed boats than what they had originally paid for their cottages!" Casey exclaimed. Many of the cottages were inherited by children and grandchildren of the original owners. Once again, the scene started to change as many of the lake houses were used only as weekend lake homes. Unlike the previous generation, a vast number of the current owners could afford to live closer to their jobs while maintaining lake homes. "At this point, business wasn't growing," Casey said. As local competition continued to increase, Casey converted the diner of The Landing into a bar with a lounge area. "The change might have been too drastic," Casey said, "but it was the only way we could maintain a strong, year-round business in spite of the population shifts and competitive forces." 114) Which of the following is the macroenvironmental force that benefitted The Landing the most? A) the legal environment B) the natural environment C) the economic environment D) the political environment E) the technological environment Answer: B