Marketing Final Exam

Xers have been largely ignored due to the larger baby

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Unformatted text preview: keters’ attention. Both generations are important to marketers, but the size of Gen Y makes them attractive. However, Gen Xers are avid buyers of the latest clothes, technology, and recreational products. PTS: 1 REF: 43-44 Communication KEY: CB&E Model Customer OBJ: 04-3 TOP: AACSB MSC: BLOOMS Synthesis 7. Who are the baby boomers and why are they important to marketers? ANS: Baby boomers are defined as people born between 1946 and 1964. They are the second largest demographic segment in the population today, recently passed by Gen Y due in part to the aging boomer segment, but their influence varies depending upon further segmentation within the baby boomer segment. PTS: 1 REF: 44-45 Communication KEY: CB&E Model Customer OBJ: 04-3 TOP: AACSB MSC: BLOOMS Synthesis 8. One component of the external environment marketing managers must understand and react to is the economic environment. Briefly describe the three economic areas of greatest concern to U.S. marketers and the marketing implications of trends in these three areas. ANS: RISING INCOMES. Incomes are rising in the United States, primarily due to dual-income families. Increases in disposable and discretionary income allow families and individuals to afford the “good life.” Marketers can now concentrate efforts on higher-quality, higher-priced goods and services. INFLATION. In recent years, the United States has not experienced high inflation; instead, prices do not rise quickly, employment levels are high, and purchasing power is up. Again, this allows marketers to concentrate efforts on higher-priced goods and services. During periods of inflation, marketers should be aware that brand loyalty decreases and consumers stock up on bargain products; consequently, pricing strategies should be monitored carefully. RECESSION. This period of economic activity is when income, production, and employment fall, which reduces demand. Marketers can counter these effects with value-improved products, customer service, replacement parts, and price freezes. PTS: 1 REF: 46-48 Communication KEY: CB&E Model Strategy OBJ: 04-5 TOP: AACSB MSC: BLOOMS Synthesis 9. Compare and contrast basic and applied research. Give an example of each. ANS: Basic research (or pure research) attempts to expand the frontiers of knowledge but is not aimed at a specific, pragmatic problem. It aims to confirm an existing theory or to learn more about a concept or phenomenon. For example, basic research might focus on the impact of price promotions on consumers’ purchase behavior. Applied research, in contrast, attempts to develop new or improved products. An example of this could be a marketer conducting research with consumers to learn which attributes of a product are important to them. PTS: 1 REF: 48 Communication KEY: CB&E Model Research OBJ: 04-6 TOP: AACSB MSC: BLOOMS Synthesis 10. There are several federal laws that affect marketing regarding the competitive environment, pricing practices, and false adv...
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