Chapter 04 Ethics and Social Responsibility in Marketing

Multiple Choice

1. Asahi Breweries Group acts on what it views as an ethical obligation to its customers and the general public with its __________.
a) advertising that would suggest its beer is low-carb
b) alcohol awareness and education programs
c) use of high quality ingredients
d) affordable prices
e) use of all of the above
Ans: b
Feedback: Asahi has worked to convince people not to abuse its products. It acts on what it views as an ethical obligation to its customers and the general public with its alcohol awareness and education programs.
Page: 109
Learning Objective: 1

 
2. Asahi’s commitment to saving the environment indicates that it would act in accordance with __________, the view that an organization should discover and satisfy the needs of its consumers in a way that provides for society’s well-being. 
a) social responsibility
b) the rights of the consumerist
c) a generic mission statement
d) the marketing concept
e) the sales concept 
Ans: a
Feedback: Social responsibility means that organizations are part of a larger society and are accountable to that society for their actions. Its massive recycling effort is an example of social responsibility.
Page: 109, 119
Learning Objective: 3

 
3. The Fund for the Prevention of Underage Drinking established by Asahi Breweries Group to encourage moderate and responsible drinking behavior among youths is an example of  __________.
a) ethical behavior in marketing
b) negative advertising
c) the societal marketing concept
d) consumerism
e) legal responsibility in marketing
Ans: a
Feedback: Ethics are the moral principles and values that govern the actions and decisions of an individual or group that serve as guidelines on how to act rightly when faced with moral dilemmas such as underage drinking.
Page: 109
Learning Objective: 1

 
4. Asahi is trying to act socially responsible toward which of its stakeholders?
a) Environmentalists
b) People who drink beer
c) Children who might think drinking beer would make them cool
d) Parents who are concerned about the problems related to underage drinking
e) All of the above
Ans: e
Feedback: The term stakeholder refers to any group or organization that has a stake in the performance of the company. Social responsibility is a key term in Chapter 4—the idea that organizations are part of a larger society and are accountable to that society for their actions. By preserving the natural environment it is appealing to the environmentalists and by its alcohol awareness and education initiatives it is appealing to people who drink beer, children who might think drinking beer would make them cool and parents who are concerned about underage drinking.
Page: 109
Learning Objective: 3

 
5. By preserving the natural environment Asahi is appealing to the environmentalists; by its alcohol awareness and education initiatives it is appealing to people who drink beer and children who might think drinking beer would make them cool. Asahi is exhibiting which of the following?
a) Stockholder responsibility
b) Profit responsibility
c) Utilitarianism
d) Social responsibility
e) Cause marketing
Ans: d
Feedback: Social responsibility is the view that organizations are part of a larger society and are accountable to that society for their actions.
Page: 109
Learning Objective: 3

 
6. The Fund for the Prevention of Underage Drinking developed by Asahi supports organization and individuals that preside over or conduct social activities or research on the prevention of underage drinking is an example of  __________.
a) ethical behavior in marketing
b) negative advertising
c) the societal marketing concept
d) consumerism
e) legal responsibility in marketing
Ans: a
Feedback: This is an example of ethics in marketing since ethics are the moral principles and values that govern the actions and decisions of an individual or group that serve as guidelines on how to act rightly when faced with moral dilemmas such as underage drinking.
Page: 109
Learning Objective: 2

 
7. Asahi participates actively in cultural and community activities to  __________.
a) advertise its beers
b) help consumers understand the massive recycling Asahi has taken
c) protect the environment
d) help prevent alcohol abuse
e) increase its profitability
Ans: d
Feedback: Asahi participates actively in cultural and community activities to promoting responsible drinking, helping prevent alcohol abuse and helping stop underage drinking before it starts.
Page: 109
Learning Objective: 1

 
8. __________ are the moral principles and values that govern the actions and decisions of an individual or group. 
a) Laws
b) Religious precepts
c) Ethics
d) Social norms
e) Beliefs
Ans: c
Page: 110
Learning Objective: 1

 
9.  __________ serve as guidelines on how to act rightly and justly when faced with moral dilemmas. 
a) Laws
b) Ethics
c) Case studies
d) Mentors
e) Ombudsmen
Ans: b
Page: 110
Learning Objective: 1

 
10. Ethics are the  __________.
a) religious tenets of the country or ethnic region you live in
b) social norms of a nation, community or family
c) laws of society that define a person’s beliefs and behaviors
d) moral principles and values that govern the actions and decisions of an individual group
e) universal laws of man that go beyond individual beliefs of nations or religions
Ans: d
Page: 110
Learning Objective: 1

 
11. Ethics serve as  __________.
a) religious tenets of the country or ethnic region you live in
b) social norms of a nation, community or family
c) laws of society that define a person’s beliefs and behaviors
d) guidelines on how to act rightly and justly when faced with moral dilemmas
e) universal laws of man that go beyond individual beliefs of nations or religions
Ans: d
Page: 110
Learning Objective: 1

 
12. Laws are  __________.
a) a specific set of behaviors a given society considers to be ethical
b) society’s values and standards that are enforceable in the courts
c) the agreed upon code of behavior for a given nation, community, religious group or family unit
d) written documentation of a prescribed set of behaviors
e) a legislated code of ethics defining both what may and may not be done in specific circumstances
Ans: b
Page: 110
Learning Objective: 1

 
13. Society’s values and standards that are enforceable in the courts are called  __________.
a) ethics
b) cultural norms
c) industry practices
d) laws
e) rights
Ans: d
Page: 110
Learning Objective: 1

 
14. Which of the following statements accurately distinguishes between laws and ethics? 
a) Laws reflect the beliefs of the majority and ethics reflect the beliefs of smaller individual segments of society
b) Ethics deal with religious and moral beliefs and laws deal with social, economic and environmental behaviors
c) Ethics deal with internal (personal) issues and laws deal with external (social) issues
d) Ethics deal with personal and moral principles while laws are society’s values and are enforceable in the courts
e) There is no significant difference; the terms can be used interchangeably
Ans:D
Feedback: Ethics deal with personal and moral principles while laws are society’s values and are enforceable in the courts.
Page: 110
Learning Objective: 1

 
15. Many media today use pay-to-vote polls (in which respondents use a 900-telephone number to vote “yes” or “no” on a current issue) as a means of generating viewer or listener interest. A research institute has recently asked all media to acknowledge the questionable validity of such polls by informing viewers or listeners that the results are NOT representative of the population but are just a frequency distribution of those who call when the media report the results. If a television station chooses not to make viewers aware of the shortcomings of the poll, its business practice would fall into which of the following categories? 
a) Ethical but illegal
b) Ethical and legal
c) Unethical and illegal
d) Unethical but legal
e) Not enough information to determine
Ans: d
Feedback: The use of pay-to-vote polls is legal. However, if viewers believe they are valid or representative of the population, their use may be misleading and therefore, unethical.
Page: 110
Learning Objective: 1

 
16 A recent poll by a research firm found that 67 percent of consumers are willing to boycott products on ethical grounds. This survey did not ask if the person who was acting on ethical grounds would first see if the boycott was based on real fact. Which of the following statements describe a conclusion that should be drawn from this information? 
a) If you are an ethical person, you should act according to your instincts
b) All businesses are unethical
c) All businesses will act unethically unless forced by consumers to act morally
d) There is nothing consumers can do to stop unethical business activities
e) Boycotting a product without knowing the facts can be viewed as unethical
Ans: e
Feedback: The boycott is unethical because it inflicts damage on others needlessly. Ethics are the moral principles and values that govern the actions and decisions of an individual or group. They serve as guidelines on how to act rightly and justly when faced with moral dilemmas. There are many examples of companies that have been boycotted on the basis of unfounded rumors and some that have not survived long enough to make the truth widely known.
Page: 110
 Learning Objective: 1

 
17. The world’s five largest music companies (Vivendi Music Group, Sony Music, BMG Music, Warner Music and EMI Group) and three biggest music retailers (Musicland stores, Trans World Entertainment and Tower Records) were accused of engaging in a practice known as “minimum advertised pricing” to artificially inflate CD prices from 1995 to 2000. They eventually had to pay US$143 million to settle the price-fixing case and $67 to pay consumers who bought the potentially overpriced CDs. This example illustrates that the music companies and retailers were  __________.
a) ethical but illegal
b) ethical and legal
c) unethical and illegal
d) unethical but legal
e) not covered by any of the above descriptions
Ans: c
Feedback: The music companies and retailers were acting unethically because they were inflating CD prices. The act of fixing high prices is also considered illegal by law.
Page: 110
Learning Objective: 1

 
18. When the owner of a small publishing company allowed a friend who was starting a machine embroidery business to load the publishing company’s copy of Microsoft WORD on the new business’s computer, it was an example of  __________.
a) an activity that is legal and ethical
b) caveat emptor
c) an activity that is illegal but ethical
d) an activity that is illegal and unethical
e) a strategic alliance
Ans: d
Feedback: Ethics are the moral principles and values that govern the actions and decisions of an individual or group. Laws are society’s values and standards that are enforceable in the courts. When software is purchased the user agrees not to share the software with others. Not only is this behavior unethical, it is also illegal.
Page: 110
Learning Objective: 1

 
19. China is the world’s largest tobacco-producing country and has 300 million smokers. Approximately 700,000 Chinese die annually from smoking-related illnesses. This figure is expected to rise to more than 2 million by 2025. China restricts tobacco imports. U.S. trade negotiators advocate free trade, thus allowing U.S. tobacco companies to market their products in China. The U.S. trade negotiators are acting  __________.
a) ethically but illegally
b) ethically and legally
c) unethically and illegally
d) unethically but legally
e) in none of the above ways
Ans: d
Feedback: Because smoking has been found to cause cancer and thus, death for many people and because the U.S. trade negotiators know this, they are acting unethically. They are acting legally because there is no law preventing U.S. tobacco companies from marketing their products in China.
Page: 111
 Learning Objective: 1

 
20 Thaksin (Ex-Prime Minister of Thailand) with 5 outstanding arrest warrants on various charges on a variety of corruption cases and his wife was convicted with tax evasion. They fled to the UK and refused to come back to Thailand, afraid that they would not receive a fair trial, claiming that the cases were fabricated. Even though the case was eventually dropped due to lack of evidence against Thaksin and his family, Thaksin’s actions were  __________.
a) ethical but illegal
b) ethical and legal
c) unethical and illegal
d) unethical but legal
e) none of the above
Ans: c
Feedback: Tax evasion and corruption are deemed illegal in any country and the fact that Thaksin and wife fled to the UK to avoid their charges in Thailand after committing such frauds are considered unethical.
Page: 111
Learning Objective: 1

  
21. According to Golin/Harris survey of 800 individuals in Hong Kong, Tokyo, Taipei and Singapore, which option best represents their sentiment?
a) Caution against trusting businesses
b) Dissatisfaction with moral standards of businesses
c) Dissatisfaction with superiors’ commitment to ethical practices
d) Belief that company-customer relationship is built on company’s self interest
e) All of the above
Ans: e
Feedback: The survey shows that many distrust businesses these days. They are also dissatisfied with the moral standards of their businesses and superiors.
Page: 111
Learning Objective: 1

 
22. There has been a public outcry about the ethical practices of businesspeople. The Golin/Harris survey shows that __________ percent of Tokyo, Hong Kong, Taipei and Singapore residents believe “recent events have caused a crisis of confidence and trust in the way we do business.”
a) 27
b) 34
c) 39
d) 72
e) 86
Ans: d
Feedback: 72 percent of Tokyo, Hong Kong, Taipei and Singapore residents believe that recent events have caused a crisis of confidence and trust in the way they do business.
Page: 111
Learning Objective: 1

  
23. The current low perception of ethical business behavior can be explained by  __________.
a) the increased pressure on business people to make decisions in a society characterized by diverse value systems
b) a growing tendency for business decisions to be judged publicly by groups with different values and interests
c) the public’s expectations of ethical business behavior has increased
d) the decline of ethical business behavior
e) all of the above
Ans: e
Feedback: All of the options are possible reasons for the state of perceived ethical business behavior.
Page: 111
 Learning Objective: 1

 
24. There has been a public outcry about the ethical practices of businesspeople. A survey shows 34 percent of 800 executives in companies in China believe that the relationship between their companies and customers were characterized by  __________.
a) the interests of customers
b) the interests of the firms
c) the interests of the customers and the firms
d) the interests of the society
e) none of the above
Ans: b
Feedback: 34 percent of the executives surveyed believe that the relationships between their companies and customers are characterized purely by the self-interest of the firms.
All of the options are possible reasons for the state of perceived ethical business behavior.
Page: 111
Learning Objective: 1

 
25. There has been a public outcry about the ethical practices of businesspeople. A survey on 800 executives in companies in China shows 47 percent feel that their superiors were _________ to ethical practices.
a) not at all committed
b) very committed
c) entirely committed
d) sufficiently committed
e) not sufficiently committed
Ans: e
Feedback: 47 percent of the executives surveyed felt that their superiors were not sufficiently committed to ethical practices.
Page: 111
Learning Objective: 1

  
26. Which of the following is NOT considered to be a factor influencing ethical behavior?
a) Societal culture and norms
b) Business culture
c) Industry practices
d) Corporate culture and expectations
e) Legislation
Ans: e
Feedback: All but legislation are listed in Figure 4-2 as factors that influence ethical behavior.
Page: 112, Fig.4-2
Learning Objective: 2

 
27. Which of the following is a socializing force that dictates what is morally right and just?
a) Societal culture and norms
b) Organizational structures
c) Peer pressure
d) Legislation
e) All of the above
Ans: a
Feedback: Culture refers to the set of values, ideas and attitudes that are learned and shared among members of a group. Culture also serves as a socializing force that dictates what is morally right and just.
Page: 112
Learning Objective: 2

 
28. Which of the following is considered to be a factor that influences ethical behavior?
a) Business culture and industry practices
b) Organizational structures
c) Legislation
d) Peer pressure
e) None of the above
Ans: a
Feedback: Societal culture and norms, business culture, industry practices and organizational culture and expectations are all listed in Figure 4-2.
Page: 112, Fig 4-2
Learning Objective: 2

  
29.Which of the following is considered to be a factor that influences ethical behavior? 
a) Legislation
b) Organizational structures
c) Corporate culture and expectations
d) Peer pressure
e) None of the above
Ans: c
Feedback: Societal culture and norms, business culture, industry practices and organizational culture and expectations are all listed in Figure 4-2.
Page: 112, Fig 4-2
Learning Objective: 2

 
30.Culture serves as a socializing force that dictates what  __________.
a) is the will of the largest minority in a society
b) is morally right and just
c) is the considered opinion of a society’s elders
d) is exclusively the law of the land
e) expresses the diverse backgrounds of a nation’s subcultures
Ans: b
Page: 112
 Learning Objective: 2

  
31.  __________ refers to the set of values, ideas and attitudes that are learned and shared among members of a group. 
a) Ideals
b) Morals
c) Ethics
d) Culture
e) Diversity
Ans: d
Page: 112
Learning Objective: 2

  
32. As the use of the Internet grows around the world, understanding between countries must be reached so that there can be as easy an exchange of ideas and information as possible. One important issue is opt-in versus opt-out. In general, European websites have opt-in policies and U.S. websites have opt-out policies. Opt-in means customers must ask to be involved in data collection and marketing while opt-out companies automatically include customers in data collection unless the customer specifically asks not to be included. Europeans and European businesses believe it is unethical to invade someone’s privacy. American businesses do it all the time because Americans are not nearly as protective of their right to privacy. What ethical factor is illustrated by this example?
a) Societal culture and norms
b) Business law
c) Industry practices
d) Organizational culture and expectations
e) Social legislation
Ans: a
Feedback: Culture refers to the set of values, ideas and attitudes that are learned and shared among members of a group. Culture also serves as a socializing force that dictates what is morally right and just. This means that moral standards (like the right to privacy) are relative to particular societies.
Page: 112
Learning Objective: 2

 
33.  Culture refers to  __________.
a) the set of values, ideas and attitudes that are learned and shared among members of a group
b) the music, art, theater, etc. that reflects the values of an entire nation
c) the learned behaviors of a specific racial, ethnic or religious group based on ethics and protected by laws
d) the combination of beliefs and behaviors accepted as correct regardless of a person’s age, sex, race or religion
e) the music, art, theater, etc. that expresses the diverse backgrounds of a nation’s subcultures
Ans: a
Page: 112
Learning Objective: 2

 
34.  Making counterfeit copies of Gucci purses, Hilfiger sportswear and other international brands is pervasive in China because it is so easy to get away with it. Laws protecting intellectual property are unclear and sporadically enforced. Even when they are applied, sanctions are minimal, typically consisting of confiscation, a warning, a public apology and perhaps a fine (negotiated, of course). Moreover, copying enjoys a long tradition in China and does not carry a stigma. Copying a masterpiece was historically considered an art form in its own right and Chinese students have been taught for centuries to copy their teachers as accurately as possible before attempting to create. A business introducing a product into China needs to know that __________ may lead to trademark infringements. 
a) societal culture and norms
b) opinion leaders
c) antecedent states
d) organizational culture and expectations
e) legislation
Ans: a
Feedback: In China, counterfeiting is viewed as a profitable way of doing business. An international company doing business there must be vigilant in protecting itself from this societal norm.
Page: 112, 113
Learning Objective: 2

  
35.  Consider the copying of another’s copyright, trademark or patent. These are viewed as intellectual property. In the U.S. unauthorized use, reproduction or distribution of intellectual property is illegal. Yet in China copying enjoys a long tradition and does not carry a stigma. Copying a masterpiece was historically considered an art form in its own right and Chinese students have been taught for centuries to copy their teachers as accurately as possible before attempting to create. The differences between the two countries show that __________ affect(s) the view of ethical behavior held in each country. 
a) business culture
b) industry practices
c) corporate culture
d) corporate expectations
e) societal culture and norms
Ans: e
Feedback: Differences in societal culture and norms affect the view of ethical behavior held in both the U.S., where infringing on intellectual property is illegal and in China, where it is considered an art form.
Page: 112
 Learning Objective: 2

 
36.  __________ comprise the effective rules of the game, the boundaries between competitive and unethical behavior and the codes of conduct in business dealings.
a) Societal norms
b) Cultural modes and mores
c) Business cultures
d) Fair trade practices
e) Corporate values
Ans: c
Page 112
Learning Objective: 2

  
37.  Business culture affects ethical conduct both in the exchange relationship between sellers and buyers and in the  __________.
a) competitive behavior among sellers
b) competitive behavior between unrelated industries
c) price, service and product responsibility to the ultimate consumer
d) accountability of buyers and sellers to state legislation
e) perception of ethical behavior as viewed by society as a whole
Ans: a
Feedback: Business cultures comprise the effective rules of the game, the boundaries between competitive and unethical behavior and the codes of conduct in business dealings. Business culture affects ethical conduct both in the exchange relationship between sellers and buyers and in the competitive behavior among sellers.
Page: 112
Learning Objective: 2

 
38. Ethical exchanges between sellers and buyers should result in  __________.
a) the seller making a profit
b) the buyer getting the product for the best price
c) both parties to the exchange being better off after a transaction
d) the seller reducing their inventory substantially
e) the buyer forming a relationship with the seller
Ans: c
Feedback: The exchange process is central to the marketing concept. Ethical exchanges between sellers and buyers should result in both parties being better off after a transaction.
Learning Objective: 2

  
39.  Another expression for the term caveat emptor is  __________.
a) let the buyer beware
b) the right to choose
c) the thoughts of one person should benefit all
d) the greatest good for the greatest number
e) if it’s legal, it’s ethical
Ans: a
Page: 113
 Learning Objective: 2

  
40.  The Latin phrase caveat emptor means  __________.
a) cash on delivery
b) let the buyer beware
c) don’t count your chickens before they hatch
d) don’t take any wooden nickels
e) question the ethics
Ans: b
Page: 113
Learning Objective: 2

 
41.  Investors should understand that when purchasing stock the principle of __________ is in effect. It benefits the investor to do research on the company so that they will make a wise purchase. 
a) modus operandi
b) e pluribus unum
c) de facto marketing
d) corpus delecti
e) caveat emptor
Ans: e
Feedback: Caveat emptor means let the buyer beware. It is up to the investor to do the research on the company. His or her investment is not guaranteed by the government or any other organization.
Page: 113
 Learning Objective: 2

 
42.  The Taiwan Financial Supervisory Commission works hard to facilitate healthy investment environment and increase market confidence by preventing unscrupulous companies from changing their books to give a better financial picture. Yet, in the end, it is up to the investor to research the company in which they want to invest because __________ is the norm in the stock market. 
a) modus operandi
b) caveat emptor
c) de facto marketing
d) e pluribus unum
e) corpus delecti
Ans: b
Feedback: Caveat emptor means let the buyer beware. It is up to the investor to do the research on the company. His or her investment is not guaranteed by the government or any other organization.
Page: 113
Learning Objective: 2

 
43.  Which of the following is NOT specified in the Consumer Bill of Rights? 
a) The right to be informed
b) The right to be heard
c) The right to have fair prices
d) The right to safety
e) The right to choose
Ans: c
Page: 113
 Learning Objective: 2

 
44.  The Consumer Bill of Rights codifies the ethics of exchange between buyers and sellers. These include the right (1) to safety, (2) to __________, (3) to choose and (4) to be heard. 
a) privacy
b) be informed
c) be treated courteously
d) be left alone when shopping
e) full disclosure of liability
Ans: b
Page: 113
Learning Objective: 2

 
45.  The Consumer Bill of Rights codifies the ethics of exchange between buyers and sellers. These were the right (1) to __________, (2) to privacy, (3) to choose and (4) to be heard. 
a) safety
b) be treated courteously
c) privacy
d) be left alone when shopping
e) full disclosure of liability
Ans: a
Page: 113 
Learning Objective: 2

 
46.  Which of the following issues would be addressed by the Consumer Bill of Rights? 
a) Insurance companies are required to notify policy owners if the insurance company has specified the use of non-genuine replacement parts in auto repairs
b) McDonald’s has alternate toy selections in their Happy Meals for children under the age of three so the smaller children won’t choke on little game pieces
c) Most major universities now offer an extended selection of evening courses for those students who must work full time during the day
d) Students at a major university formed an action committee to protest a proposed “flat fee” tuition schedule
e) All of the above issues would be addressed by the Consumer Bill of Rights
Ans: e
Feedback: The Consumer Bill of Rights deals with the right to (1) be informed (Alternative a), (2) safety (Alternative b), (3) choose (Alternative c) and (4) be heard (Alternative d).
Page: 113
Learning Objective: 2

 
47.  Recently a project team for Cosco, the world’s largest children’s products company, developed a high chair that could be used as an infant feeding seat, a youth chair, a play chair, a booster chair and it could be reclined to make an infant bed. Its design could be made and sold for US$49. The marketing manager in consultation with other middle managers decided to have the prototypes checked out by Cosco employees who had small children. This was the only product testing performed on the product. Before Cosco pulled the unsafe chair from the market, several children were injured and some died as a result of using the chair. Cosco was charged with being unconcerned about consumers’ __________.
a) right to choose
b) right to be informed
c) right to be treated courteously
d) right to safety
e) right to happiness 
Ans: d
Feedback: The chair was unsafe, so Cosco violated the right to safety.
Page: 113 
Learning Objective: 2

 
48.  Dell Inc. learned that the lithium-ion batteries in its notebook computers posed a fire hazard to consumers. The company recalled 2.7 million batteries and gave consumers a replacement before any personal injuries resulted. Dell was most likely concerned with consumers’ __________.
a) right to choose
b) right to be informed
c) right to be treated courteously
d) right to safety
e) right to happiness
Ans: d
Feedback: The batteries posed a safety hazard, so Dell recalled them.
Page: 113
 Learning Objective: 2

 
49.  When shopping on the Internet, most consumers assume the personal information they give out is confidential. Subscribers to America Online (AOL) were upset when AOL proposed giving member information to partners without telling the subscribers. This is related most directly to the consumer’s  __________.
a) right to choose
b) right to be informed
c) right to be treated courteously
d) right to safety
e) right to happiness
Ans: b
Feedback: By giving out information about consumers without the knowledge of the consumers, the consumers’ right to be informed what is happening with information he or she gave for another purpose is denied.
Page: 113
Learning Objective: 2

 
50. When Toysmart.com filed for bankruptcy in June 2000, it listed its customer database as one of its assets even though it had assured its customers it would never disclose their information to any third party. People who had purchased from Toysmart and were a part of its database were upset when they learned that their private information was being treated as property that was for sale. These customers believed that according to the Consumer Bill of Rights they should know how their private information would be used. In other words, Toysmart’s former customers had a  __________.
a) right to choose
b) right to be informed
c) right to be treated courteously
d) right to safety
e) right to happiness
Ans: b
Feedback: The consumers’ right to be informed was lost when Toysmart threatened to use their private information in a way not consistent with how it had been gathered.
Page: 113
Learning Objective: 2

 
51. (p. 113) People who fly regularly collect frequent flyer miles that can be used for free flights at later dates. The existence of blackout days (days when frequent flyer miles cannot be redeemed) could interfere with consumers’  __________.
a) right to choose
b) right to be informed
c) right to be treated courteously
d) right to safety
e) right to happiness
Ans: a
Feedback: Blackout days could prevent consumers from traveling on the days they would like to, thus it interferes with their right to choose.
Page 113
Learning Objective: 2

 
52. The Children’s Online Protection Act (1998) is a law with the declared purpose of restricting access by minors to any material defined as harmful. This is to protect consumers’ __________.
a) right to choose
b) right to be informed
c) right to be treated courteously
d) right to safety
e) right to happiness
Ans: b
Feedback: The consumer right to be informed has such legislations and self-regulation initiatives restricting disclosure of personal information.
Page: 113
Learning Objective: 2

 

53. Mattel’s Cabbage Patch Snacktime Kids doll was designed to eat plastic toys that were drawn in to the doll’s motorized mouth. However, despite extensive testing, the doll was found to “eat” the child’s hair and was subsequently recalled and discontinued. Mattel discontinued the item because of the consumer’s  __________.
a) right to choose
b) right to be informed
c) right to be treated courteously
d) right to safety
e) right to happiness
Ans: d
Feedback: The consumer’s right to safety ensures safe products. Since the doll was unsafe, it was removed from production and the marketplace.
Page: 113, 114
 Learning Objective: 2

 
54. Recently certain toys that were manufactured in China were found to have unsafe levels of lead in the paint and were recalled. This action protected the consumers’ right to  __________.
a) choose
b) be informed
c) happiness
d) safety
e) be treated courteously
Ans: d
Feedback: These toys would be harmful to children so the companies who sold them violated the consumers’ right to safety and resolved this by recalling the toys.
Page: 113
Learning Objective: 2

 
55. The right to be informed means that  __________.
a) companies have a right to know who purchases their products or services
b) the government has the right to know what you buy and when
c) marketers have an obligation to give consumers complete and accurate information about products and services
d) the consumer has the right to know all information about companies with which they do business
e) all of the above 
Ans: c
Feedback: The right to be informed means that marketers have an obligation to give consumers complete and accurate information about products and services.
Page: 113
Learning Objective: 2

 
56. A current practice whereby retailers may demand cash or free goods in exchange for shelf space for new products is referred to as  __________.
a) a kickback
b) economic espionage
c) caveat emptor
d) slotting allowances
e) bribes
Ans: d
Feedback: Relating to the right to choose, today many supermarket chains demand “slotting allowances” from manufacturers, in the form of cash or free goods, to stock new products.
Page: 114
Learning Objective: 2

 
57. The right to be heard means that  __________.
a) the Department of Commerce has the right to hear consumer complaints
b) the National Trade Union Congress (NTUC) has the right to hear both retailer and customer complaints
c) consumers should have access to public-policy makers regarding complaints about products and services
d) companies should have access to public-policy makers regarding complaints about
Consumers
e) consumers should have access to public-policy makers regarding new product ideas
Ans: c 
Feedback: The right to be heard means that consumers should have access to public-policy makers regarding complaints about products and services.
Page: 113
Learning Objective: 2

 
58. A US Federal Trade Commission survey shows that 92 percent of websites collect personal information such as consumer email address, telephone numbers, shopping habits and financial data. Yet, only two thirds of websites inform customers of what is done with this information once obtained. The rest of the websites have violated the ________ according to Consumers’ Bill of Rights.
a) right to be heard
b) right to safety
c) right to be informed
d) right to choose
e) right to happiness
Ans: c
Feedback: The right to be informed means that marketers have an obligation to give consumers complete and accurate information about products and services. By not telling customers the purpose of collecting those data, firms are violating customers’ right to be informed.
Page: 114
Learning Objective: 2

 
59. How many percent of all companies in industrialized countries in Asia have to pay bribes to win or retain business?
a) 15
b) 30
c) 40
d) 45
e) 60
Ans: c
Feedback: 40 percent of companies in industrialized countries in Asia have to pay bribes to win or retain business.
Page: 115
Learning Objective: 2

 
60. Business culture affects ethical behavior in competition. Two kinds of unethical behavior are most common:  __________.
a) price fixing and copyright infringement
b) economic espionage and bribery
c) bribery and extortion
d) price fixing and economic espionage
e) economic espionage and anti-trust infractions
Ans: b
Feeback: Business culture also affects ethical behavior in competition. Two kinds of unethical behavior are most common: (1) economic espionage and (2) bribery.
Page: 114
Learning Objective: 2

 
61.  Economic espionage is  __________.
a) the destruction of a competitor’s goods or services through physical damage of property
or damage to their reputation
b) the clandestine collection of trade secrets or proprietary information about a company’s
competitors
c) knowledge of wrongdoing within a firm that goes unreported in order to better a worker’s
personal standing in the firm
d) fraudulent activities by a firm whereby the consumer is intentionally sold inferior goods
or provided with inferior services for the sake of a larger profit
e) the clandestine collection of trade secrets from China
Ans: b
Feeback: Key term definition—economic espionage
 Page: 114
Learning Objective: 2

 
62. A competitor of Procter & Gamble had to pay millions for damage for photographing P& G production lines and infiltrating its confidential sales presentation to obtain its technology and marketing plan. This is an example of  __________.
a) Corporate curiosity
b) Economic espionage
c) Clandestine trade in secret
d) Industry espionage
e) Corporate spying
Ans: b
Feedback: Economic espionage is the clandestine collection of trade secrets or proprietary information about a company’s competitors.
Page: 114 115
Learning Objective: 2

 
63. James Fondren, a US citizen, was arrested amidst accusations that he had sold classified information to the Chinese military and intelligent officials. Tai Shen Kuo, former business partner of Fondren, was also arrested for the same charges. This is a case of  __________.
a) legal data collection
b) economic espionage
c) the use of kickbacks
d) corporate piracy
e) none of the above
Ans: b
Feedback: Economic espionage is the clandestine collection of trade secrets or proprietary information about a company’s competitors.
Page: 114, 115
Learning Objective: 2

 
64.  Many firms in the world have uncovered espionage in some form. Procter & Gamble once pressed charges against its competitors for photographing its plants and production lines, stealing samples, infiltrated a confidential sales presentation to learn about its technology and marketing plan. The competitor eventually paid US$120 million and the product concerned belongs to _________ industry.
a) specialty chemicals
b) shampoos and bath gels
c) electronics
d) cookie-making
e) none of the above
Ans: d
Feedback: The question refers to the case in the cookie-making industry. This example serves to prove that economic espionage can occur everywhere.
Page: 115
Learning Objective: 2

 
65.  Economic espionage is most prevalent in which type of industries? 
a) Plastics
b) Retail
c) Logging and furniture manufacturing
d) High-tech
e) Primary metals
Ans: d
Feedback: Economic espionage is most prevalent in high-technology industries, such as electronics, specialty chemicals, industrial equipment, aerospace and pharmaceuticals, where technical know-how and trade secrets separate industry leaders from followers.
Page: 115
 Learning Objective: 2

 
66.  Transparency International is an organization that is responsible for  __________.
a) monitoring how developed nations deal with developing nations
b) setting down procedures for ethical international business based on Napoleonic Code
c) monitoring bribery on a worldwide scale
d) creating an acceptable international code of ethics
e) making sure federal, state governments in the world abide by the Consumer Bill of Rights
Transparency International polls employees and political analysts and ranks countries on the basis of their perceived level of bribery.
Ans: c
Page: 115
Learning Objective: 2

 
67.  Which of the following is true of bribery? 
a) It is most evident in industries experiencing little competition
b) It is most evident in developed countries
c) It is most evident in Iceland and Finland
d) It is most evident in countries experiencing intense competition
e) It is most evident in industries experiencing intense competition
Ans: e
Feedback: Bribery is most evident in industries experiencing intense competition and in countries in earlier stages of economic development. Bangladesh and Nigeria were the most likely countries to evidence bribery to win or retain business, while Iceland and Finland were the least likely.
Page: 115
Learning Objective: 2

 
68.  Corporate culture is  __________.
a) a formalized method for controlling the marketing environment
b) the set of accepted standards and practices within a given industry by its principal members
c) the description of both ethical and behavioral attributes of “white collar” versus “blue collar” workers in the United States business environment
d) a set of values, ideas and attitudes that is learned and shared among the members of an organization
e) the formal statement of ethical principles and rules of conduct adopted by an organization
Ans: d
Feedback: Text term definition—corporate culture
Page: 115
Learning Objective: 2

 
 69.  Lava.com is an Internet company that helps other organizations put concepts that they hope will let them dominate the market in their industry into action. In its promotion, it states, “We ignore the rules and we let no obstacle stand in your company’s way—no matter how bold or impossible your idea may seem”. The company is composed of eighteen bright young Internet experts. They work in one large room, which also contains dartboards, a pool table and a meditation center. If you were to walk into the office, it would be next to impossible to tell the company owners from its lowest ranking employee. This is a description of the Internet company’s  __________.
a) modus operendi
b) mission environment
c) socialization process
d) corporate environment
e) corporate culture
Ans: e
Feedback: A corporate culture is a set of values, ideas and attitudes that is learned and shared among the members of an organization such as treating everyone equally and providing a relaxed atmosphere at work.
Page: 115
Learning Objective: 2

 
70.  The __________ is a set of values, ideas and attitudes that is learned and shared among the members of an organization. 
a) mission statement
b) operational vision
c) socialization process
d) corporate ideals
e) corporate culture
Ans: e
Page: 115
Learning Objective: 2

 
71.  Which of the following statements about corporate culture is true? 
a) The corporate culture is revealed in the ethical behavior of top management
b) The corporate culture is apparent in the expectations of ethical behavior present in formal codes of ethics
c) A company’s corporate culture is revealed by how its employees work together on group projects
d) A company’s use of the slogan “Quality is Job #1” reveals its corporate culture
e) All of the above statements about the corporate culture are true
Ans: e
Feedback: Corporate culture is a set of values, ideas and attitudes that is learned and shared among the members of an organization. The culture of a company demonstrates itself in the dress, sayings and manner of work (team efforts) of employees. Culture is also apparent in the expectations for ethical behavior present in formal codes of ethics and the ethical actions of top management and co-workers.
Page: 115
Learning Objective: 2

 
72.  A formal statement of ethical principles and rules of conduct is called a Consumer bill of rights  __________.
b) business mission
c) corporate code
d) code of ethics
e) caveat emptor
Ans: d
Page: 115
Learning Objective: 2

 
73. A code of ethics is a formal statement of ethical principles and  __________.
a) legal restrictions
b) moral reservations
c) cultural values
d) rules of engagement
e) rules of conduct
Ans: e
Page: 115 
Learning Objective: 2

 
74.  A code of ethics is a formal statement of rules of conduct and  __________.
a) legal restrictions
b) moral reservations
c) cultural values
d) rules of engagement
e) ethical principles
Ans: e
Page: 115
Learning Objective: 2

 
75.  Recently, six executives of Tyson Foods, one of the world’s largest poultry, beef and pork processors, were arrested for illegal smuggling of undocumented foreign workers into the U.S. to work at Tyson plants. Tyson’s violations are the result of __________, one of the major reasons why some companies fail to establish ethical behavior. 
a) too ambiguous a mission statement
b) the absence of an executive summary
c) anti-whistleblowing
d) top management’s behavior
e) poor marketing research
Ans: d
Feedback: Employees often gauge how serious a company is about ethical behavior by looking at the actions of upper management.
Page: 117
Learning Objective: 2

 
76.  _______ includes maintaining professionalism and guaranteeing the quality of work. 
a) Statement of cultural values
b) Statement of morals
c) Rule of engagement
d) Code of ethics
e) Marketing guideline
Ans: d
Feedback: A code of ethics is a formal statement of ethical principles and rules of conduct. In this case rules of conduct include maintaining professionalism and guaranteeing the quality of work.
Page: 115
Learning Objective: 2

 
77.  A new salesperson ought to become familiar with his or her new employer’s __________ in order to make sure he or she behaves in an ethical manner that is consistent with the policies of his or her firm. 
a) international marketing guide
b) professional business manual
c) code of ethics
d) sales training text book
e) marketing program
Ans: c
Feedback: A code of ethics is a formal statement of ethical principles and rules of conduct.
Page: 116
Learning Objective: 2

 
78. (p. 116, 117) Which of the following statements describes major reasons codes of ethics are violated? 
a) Most companies do not have a formal code of ethics and for those that do, there is no way for the codes to be enforced
b) Most companies overlook infractions if the action is unethical but legal and little action is taken if the unethical behavior results in a profit for the firm
c) Many codes of ethics lack specificity and a problem exists with the perceived behavior of top management and coworkers
d) There is often a discrepancy between the code of ethics of a firm and the code of ethics of labor unions and there is often a discrepancy between the code of ethics of a firm and the personal and moral beliefs of an individual employee
e) There are very few violations in firms with written codes of ethics
Ans: c 
Feedback: A code of ethics is a formal statement of ethical principles and rules of conduct.
Page: 116, 117 
Learning Objective: 2

 
79.  Which of the following is one of the major reasons for the violation of ethics codes? 
a) Government regulation
b) Family influence
c) Lack of religious beliefs
d) Fear of disciplinary action
e) Lack of specificity of the ethics code
Ans: e
Feedback: The lack of specificity is one of the major reasons for the violation of ethics codes. Employees must often judge whether a specific behavior is really unethical.
 Page: 116
Learning Objective: 2

 
80.  Two former sales representatives of a biotech company alleged that the company strongly encouraged its sales force to search confidential medical records in physician’s offices in an attempt to find names of patients that would benefit from use of a drug produced by that company - a treatment for psoriasis. These two people are suing the biotech compay and allege they did not go along with the scheme because they objected to it. Soon after, one of the reps was fired and the other resigned after receiving a poor performance review. These two people are  __________.
a) scabs
b) cronies
c) whistleblowers
d) contrarians
e) ombuds
Ans: c
Feedback: A whistleblower is an employee who reports unethical or illegal actions of their employers.
Page: 117
Learning Objective: 2

 
81.  Employees who report unethical or illegal actions of their employers are officially called  __________.
a) whistleblowers
b) scabs
c) cronies
d) contrarians
e) ombuds
Ans: a
Page: 117
Learning Objective: 2

 
82.  An employee who reports illegal accounting procedures is an example of a  __________.
a) corporate proctor
b) ethical ombuds
c) whistleblower
d) cronie
e) scab
Ans: c
Feedback: Whistleblowers are employees who report unethical or illegal actions of their employers.
Page: 117
Learning Objective: 2

 
83.  Which of the following statements describe the activities of a whistleblower? 
a) Mattel employees were sorry that 150 of the 10 million Power Wheels cars and trucks the company sold had caught on fire
b) Mattel research engineers proved that the spate of fires in the company’s Power Wheels cars and trucks was the result of consumers’ tinkering with the engine
c) One of the Mattel Power Wheel cars that caught on fire and slightly burned its rider was owned by a former Mattel employee
d) The Consumer Product Safety Commission investigated the fires and ordered a recall for repair of all 10 million units that have been sold
e) None of the above statements describes the activities of a whistleblower
Ans: e
Feedback: Whistleblowers are employees who report unethical or illegal actions of their employers. If an employee of Mattel had reported to the Consumer Product Safety Commission that Mattel was knowingly manufacturing an electrical system for Power Wheels that would catch on fire after long use, he or she would have been a whistleblower.
Page: 117
Learning Objective: 2

 
84.  Which of the following statements describes a whistleblower? 
a) An employee is unhappy because his company is downsizing
b) An employee tells the Consumer Product Safety Commission his company falsified safety reports on a child’s car seat
c) A salesperson for a hardware wholesaler tries to sell insurance to his regular customers in order to earn some extra income
d) An employee loses her retirement fund due to a downturn in the stock market
e) An employee spends the afternoon studying at work for her test rather than counting inventory as she was supposed to be doing
Ans: b
Feedback: Whistleblowers are employees who report unethical or illegal actions of their employers—in this case, a falsification of a safety document.
Page: 117
 Learning Objective: 2

 
85.  Moral philosophy is learned and influenced through  __________.
a) socialization with friends and family
b) formal education
c) societal culture in which a person finds him- or herself
d) business culture in which a person finds him- or herself
e) all of the above
Ans: e
Feedback: Moral philosophy is learned through the process of socialization with friends and family and formal education. It is also influenced by the societal, business and corporate culture in which a person finds him- or herself.
Page: 118 
Learning Objective: 2

 
86.  Ultimately, ethical choices are based on  __________.
a) the personal moral philosophy of the decision maker
b) societal culture and norms
c) business culture and industry practices
d) laws enacted by the government
e) chance and opportunity
Ans: a
Feedback: Ultimately, ethical choices are based on the personal moral philosophy of the decision-maker. Two moral philosophies are most prominent. They are moral idealism and utilitarianism.
 Page: 118
Learning Objective: 2

 
87. (p. 118) Two prominent personal moral philosophies have direct bearing on marketing practice:  __________.
a) existentialism and pragmatism
b) pragmatism and idealism
c) moral idealism and utilitarianism
d) social responsibility and personal ethics
e) moral behaviorism and secular ethics
Ans: c
Feeback: Two prominent personal moral philosophies—moral idealism and utilitarianism—have direct bearing on marketing practice.
Page: 118
 Learning Objective: 2

 

88.  Moral idealism is  __________.
a) a personal moral philosophy that focuses on the greatest good for the greatest number by assessing the costs and benefits of the consequences of ethical behavior
b) a democratic consensus of moral principles and laws that govern the behavior of individuals based on legislation adopted at the federal, state and local levels
c) a societal moral philosophy found in the Consumer Bill of Rights
d) a formal statement of ethical principles and rules of conduct
e) a personal moral philosophy that considers individual rights or duties as universal, regardless of the outcome
Ans: e
Feedback: Key term definition—moral idealism
Page: 118
 Learning Objective: 2 

 
89.  __________ is a moral philosophy that that considers individual rights or duties as universal, regardless of the outcome. 
a) Ethical aspiration
b) Moral idealism
c) Utilitarianism
d) Hedonism
e) The Golden Rule
Ans: b
 Page: 118
Learning Objective: 2

 
90. __________ is a moral philosophy that exists in the Consumer Bill of Rights and is favored by moral philosophers and consumer interest groups. 
a) Ethical aspiration
b) Moral idealism
c) Utilitarianism
d) Hedonism
e) The Golden Rule
Ans: b
Feedback: Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome. This philosophy exists in the Consumer Bill of Rights and is favored by moral philosophers and consumer interest groups.
Page: 118
Learning Objective: 2

 
91. 3M stopped production of a chemical made nearly 40 years when tests showed the chemical could be harmful in large doses, even though the products in which it was used had no known harmful health or environmental effect. This is an example of  __________.
a) hedonism
b) utilitarianism
c) existentialism
d) moral idealism
e) socialism
Ans: d
Feedback: Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal (in this case consumer safety), regardless of the outcome.
Page: 118
Learning Objective: 2

92.  Western Digital, the Irvine, California-based maker of hard drives recalled about 400,000 of its hard drives because of a faulty internal chip. The chip will not affect the disk drive motor until six to twelve months of use. This delay in the problem’s appearance means that many consumers would not think to blame a manufacturer of one of their computer’s parts. But instead of taking the less expensive route of remaining quiet about the problem, Western Digital chose to offer replacement disk drives for all the products that had the faulty chip. This action is an example of  __________.
a) hedonism
b) utilitarianism
c) existentialism
d) moral idealism
e) socialism
Ans: d
Feedback: Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal (in this case, a product that works as promised), regardless of the outcome.
Page: 118
Learning Objective: 2

 
93.  The owners of Ben & Jerry’s Homemade, Inc. adhere to the belief that the company should in no way harm the environment and when possible, it should improve its environment. This is an example of the __________ philosophy. 
a) hedonism
b) utilitarianism
c) existentialism
d) moral idealism
e) socialism
Ans: d
Feedback: The philosophy of moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.
Page: 118
Learning Objective: 2

 
94.  The King Never Smiles: A Biography of Thailand’s Bhumibol Adulyadej by Paul M. Handley was published by the Yale University Press in 2006. It was been banned in Thailand and pressure was even put on the publisher to drop the publication. Websites crackled with criticisms by mostly people who have not read the book, suggesting the book was poorly researched and fixated on the idea that the king was anti-democratic. Thus, there was a controversy over whether bookstores should carry the book. Which of the following statements describes how an independent bookstore in a community with a large population that was opposed to the book would have responded to an offer to stock the book?
 a) If the store carried the book because it knew the controversy would make the book a best seller, it would be operating within the framework of moral idealism
b) If the store refused to carry the book because this would offend too many of its regular customers, it would be operating within the framework of moral idealism
c) If the store refused to carry the book for fear of acts of vandalism against the store, it would be operating with the framework of moral idealism
d) If the store carried the book on the grounds of freedom of speech and freedom of the press, it would be operating within a framework of moral idealism
e) If the store refused to carry the book because the storeowner believed the book to be undesirable, he or she would be operating within the framework of utilitarianism.
Ans: d
Feedback: Moral idealism is a personal moral philosophy that considers individual rights or duties as universal regardless of the outcome.
Page: 118
 Learning Objective: 2

  
95.  A personal moral philosophy that focuses on the greatest good for the greatest number by assessing the costs and benefits of the consequences of ethical behavior is called  __________.
 a) hedonism
b) utilitarianism
c) existentialism
d) moral idealism
e) socialism
Ans: b
Page: 118
Learning Objective: 2

 
96.  Utilitarianism is a  __________.
a) personal moral philosophy that focuses on the greatest good for the greatest number by assessing the costs and benefits of the consequences of ethical behavior
b) democratic consensus of moral principles and laws that govern the behavior of individuals based on legislation adopted at the state and local levels
c) societal moral philosophy found in the Consumers Bill of Rights
d) formal statement of ethical principles and rules of conduct
e) personal moral philosophy that considers individual rights or duties as universal, regardless of the outcome
Ans: a
Page: 118
Learning Objective: 2

 
97. (p. 118) According to the philosophy of __________ if the benefits exceed the costs, the behavior is ethical. 
a) hedonism
b) utilitarianism
c) existentialism
d) moral idealism
e) socialism
Ans: b
Feedback: Utilitarianism assesses the costs and benefits of the consequences of a behavior. If the benefits exceed the costs, then the behavior is ethical. If not, then the behavior is unethical.
Page: 118
 Learning Objective: 2

 
98.  The philosophy of utilitarianism underlies the economic tenets of 
a) existentialism
b) moral idealism
c) communism
d) socialism
e) capitalism
Ans: e
Feedback: Utilitarianism is a personal moral philosophy that focuses on the greatest good for the greatest number by assessing the costs and benefits of the consequences of ethical behavior. This philosophy underlies the economic tenets of capitalism and, not surprisingly is embraced by many business executives and students.
Page: 118
Learning Objective: 2

 
99.  Nestle Food Corporation launched the Good Start formula, promoting it as hypoallergenic. The new formula is designed to prevent or reduce colic caused by an infant’s allergic reaction to cow’s milk, a condition suffered by 2 percent of babies. However, some severely milk allergic infants experienced serious side effects after using Good Start. Defending the claim that the advertisement of Good Start was misleading, Nestle vice president said that the product was not expected to be allergy-free or work for all consumers. This belief of the greatest good for the greater number exemplifies which of the following philosophies?
a) Existentialism
b) Moral idealism
c) Communism
d) Socialism
e) Utilitarianism
Ans: e
Feedback: Utilitarianism is a personal moral philosophy that focuses on the greatest good for the greatest number by assessing the costs and benefits of the consequences of ethical behavior.
Page: 118
 Learning Objective: 2

 
100. The view that organizations are part of a larger society and are accountable to that society for their actions is called  __________.
a) socialism
b) social responsibility
c) profit responsibility
d) utilitarianism
e) moral idealism
Ans: b
Page: 119
Learning Objective: 3

 
101.  Social responsibility is  __________.
a) a personal moral philosophy that focuses on the greatest good for the greatest number by assessing the costs and benefits of the consequences of ethical behavior
b) a democratic consensus of moral principles and laws that govern the behavior of individuals based on legislation adopted at the federal, state and local levels
c) a societal moral philosophy found in the Consumers Bill of Rights
d) the view that organizations are part of a larger society and are accountable to that society for their actions
e) a personal moral philosophy that considers individual rights or duties as universal, regardless of the outcome
Ans: d
Page: 119
Learning Objective: 3

102.  Which of the following statements about social responsibility is true? 
a) The three concepts of social responsibility are economic responsibility, internal social responsibility and external social responsibility
b) Organizations are part of a larger society and are accountable to that society for their actions
c) Societal responsibility focuses on the obligations an organization has to its customers, employees, suppliers and distributors
d) The duty of an organization is most easily understood at the societal responsibility level
e) None of the above statements about social responsibility is true
Ans: b
Feedback: The three concepts of social responsibility are profit responsibility, stakeholder responsibility and societal responsibility. Alternative C is the definition of stakeholder responsibility. The simplest form of social responsibility is profit responsibility: maximize profits for the company owners or stockholders. Social responsibility means that organizations are part of a larger society and are accountable to that society for their actions.
Page: 119
 Learning Objective: 3

 
103.  Profit responsibility, societal responsibility and stakeholder responsibility are three forms or concepts of  __________.
a) social responsibility
b) moral idealism
c) utilitarianism
d) green marketing
e) cause marketing
Ans: a
Feedback: Figure 4-4 shows three concepts of social responsibility: (1) profit responsibility, (2) stakeholder responsibility and (3) societal responsibility.
Page: 119
Learning Objective: 3

  
104.  2005 saw a chemical plant explosion in Jilin province released a flood of toxins into the Songhua River and a blast at Dongfeng coal mine in the northeastern province of Heilongjiang killed 171 miners in China. While the Chinese government has made considerable efforts to prevent such disasters, including releasing circulars on safety awareness, making regular spot checks, and increasing funding to improve safety facilities, a key contributor to these preventable incidents remains the lack of _________ in Chinese enterprises.
a) social responsibility
b) value consciousness
c) gray marketing
d) profit responsibility
e) transactional marketing
Ans: a
Feedback: Social responsibility means that marketing firms, as well as other organizations, exist as part of a larger society and are accountable to that society for their actions.
Page: 119
 Learning Objective: 3

 
105. (p. 119; Fig. 4-4) The groups primarily served by a firm exhibiting profit responsibility include  __________.
a) general public, public interest groups and the environment
b) consumers, employees, supplier/distributors
c) owners and stockholders
d) general public, owners and stockholders
e) government, owners and stockholders
Ans: c
Feedback: Companies practicing profit responsibility serve owners and stockholders. Companies practicing stakeholder responsibility primarily serve consumers, suppliers, distributors and employees. Companies practicing societal responsibility primarily have obligations to the preservation of the ecological environment and to the general public.
Page: 119
 Learning Objective: 3

 
106.  Profit responsibility is  __________.
a) the obligation of a firm to price its goods or services at a level whereby the consumer is treated fairly and the firm is still able to make a profit
b) the duty of a firm to maximize profits for its owners or stockholders
c) the view that an organization has an obligation only to those constituencies which can affect achievement of its objectives
d) the concept that no expansion or additional research and development will occur until a company is making a profit
e) the view that a portion of profit (after taxes) should be reinvested in a socially or environmentally beneficial endeavor
Ans: b
Page: 119
Learning Objective: 3

 
107. (p. 119) The duty of a firm to maximize profits for its owners or stockholders is called  __________.
a) social responsibility
b) value consciousness
c) gray marketing
d) profit responsibility
e) transactional marketing
Ans: d
 Page: 119
Learning Objective: 3

 
108. (p. 119) Burroughs Wellcome, the developer and maker of AZT, a drug to treat persons afflicted with AIDS, charges each patient US$6,500 annually—more than many AIDS patients can afford because they are unable to work. This is an example of the manufacturer recognizing its  __________.
a) supply-demand continuum
b) penetration pricing strategy
c) profit responsibility
d) human relations options
e) corporate resource development
Ans: c
Feedback: Profit responsibility holds that companies have a simple duty: to maximize profits for their owners or stockholders. Important considerations here are (1) how companies can recover costs of their research and development if they give away their discoveries and/or (2) how they can compensate their stakeholders if they sell their products at a loss.
Page: 119
Learning Objective: 3

  
109.  Dell Inc. learned that the lithium-ion batteries in its notebook computers posed a fire hazard to consumers. The company recalled 2.7 million batteries and gave consumers a replacement before any personal injuries resulted. Dell was exercising __________.
a) a corporate value consciousness
b) mission synergy
c) transactional marketing
d) target marketing
e) stakeholder responsibility
Ans: e
Feedback: Stakeholder focuses on the obligations an organization has to those who can affect achievement of its objectives. Dell Inc’s actions were protecting its customers from the hazards of its malfunctioned batteries.
Page: 120
Learning Objective: 3

 
110.  Stakeholder responsibility is the  __________.
a) obligation of a firm to price its goods or services at a level whereby the consumer is treated fairly and the firm is still able to make a profit
b) duty of a firm to maximize profits for its owners or stockholders
c) view that an organization has an obligation to those constituencies that can affect achievement of its objectives
d) view that the first and foremost obligations of a firm is to meet the objectives set by its stockholders and board of directors
e) view that a portion of profit (after taxes) should be reinvested in a socially or environmentally beneficial endeavor
Ans: c
Page: 120
Learning Objective: 3

 
111. (p. 120) The groups primarily served by a firm exhibiting stakeholder responsibility include  __________.
a) general public, public interest groups and the environment
b) consumers, employees, supplier/distributors
c) owners and stockholders
d) general public, owners and stockholders
e) government, owners and stockholders
Ans: b
Feedback: Companies practicing profit responsibility serve owners and stockholders. Companies practicing stakeholder responsibility primarily serve consumers, suppliers, distributors and employees. Companies practicing societal responsibility primarily have obligations to the preservation of the ecological environment and to the general public.
Page: 120
Learning Objective: 3

 
112.  Societal responsibility is the  __________.
a) obligation of a firm to price their goods or services at a level whereby the consumer is treated fairly and the firm is still able to make a profit
b) view that organizations have obligations to the general public and to the preservation of the ecological environment
c) view that an organization has an obligation only to those constituencies that can affect achievement of its objectives
d) view that the first and foremost obligations of a firm is to meet the objectives set by its stockholders and Board of Directors
e) view that a portion of profit (after taxes) should be reinvested in a socially or environmentally beneficial endeavor
Ans: b
Page: 120
Learning Objective: 3 

  
113.  Most paint is not biodegradable and not friendly to the environment because it is made with petroleum solvents. A builder who decided to build a subdivision with 500 homes and paint each with an environmentally-friendly soy-based paint (even though it costs more) would be practicing __________.
a) profit responsibility
b) cause marketing
c) stakeholder responsibility
d) mass marketing
e) societal responsibility
Ans: e
Feedback: Societal responsibility is the view that organizations have obligations to the general public and to the preservation of the ecological environment. Many more people besides those who live in the subdivision will benefit from the use of environmentally-friendly paint.
Page: 120
Learning Objective: 3

   
114. The maker of Wrigley chewing gum funded a $10 million ad campaign aimed at getting African-Americans to use doctors for regular health care maintenance instead of only when they are sick. This is an example of __________.
a) profit responsibility
b) cause marketing
c) stakeholder responsibility
d) mass marketing
e) societal responsibility
Ans: e
Feedback Societal responsibility is the view that organizations have obligations to the general public and to the preservation of the ecological environment. Wrigley is taking responsible for the general public by trying to help people who are not its stakeholders.
Page: 120
Learning Objective: 3

   
115. Toyota develops and applies technology to sort urethane and fiber from residue and recycle RSPP, a soundproofing material used in vehicles recycles thousands of tons of wooden pallets, cardboard and paper annually. Toyota also develops the hybrid car which cuts back on fuel consumption. Toyota’s actions are examples of __________.
a) recycled marketing
b) cause marketing
c) green marketing
d) environmental marketing
e) transactional marketing
Ans: c
Green marketing is defined as marketing efforts to produce, promote and reclaim environmentally sensitive products.
Page: 120
Learning Objective: 3

   
116. Which of the following is an example of green marketing?
a) Sakae Sushi chose green color for its labels
b) 3M created a new fertilizer for trees
c) Home Depot and IKEA have discontinued the sale of wood products from the world’s endangered forests
d) Levi-Strauss markets pre-washed jeans
e) Mandai Orchid Garden is offering a special spring promotion
Ans: c
Feedback: Green marketing includes marketing efforts to produce, promote and reclaim environmentally sensitive products.
Page: 120
Learning Objective: 3

   
117. Marketing efforts to produce, promote and reclaim environmentally sensitive products are called __________.
a) recycled marketing
b) cause marketing
c) green marketing
d) environmental marketing
e) recycling
Ans: c
Page : 120
Learning Objective: 3

   
118. Green marketing is __________.
a) marketing of agricultural products, specifically commodities that traditionally were not formally marketed since they operated in a pure competition environment
b) marketing efforts taken by new and smaller companies that lack both the experience and resources of their major competitors
c) marketing efforts to produce, promote and reclaim environmentally sensitive products
d) marketing products that have in no way been altered or reprocessed by artificial means
e) marketing exclusively those products made from recycled materials
Ans: c
Page: 120
Learning Objective: 3

    
119. Many fast food restaurants, including Burger King, McDonald’s and KFC, no longer use Styrofoam containers (which do not degrade as quickly as paper in a landfill) for packaging of their products. Rather, these firms wrap their burgers in recycled paper and place to-go orders in recycled paper bags. These fast-food restaurants use __________.
a) demarketing
b) green marketing
c) consumerism
d) an ecological code of ethics
e) cause marketing
Ans: b
Feedback: Green marketing is defined as marketing efforts designed to produce, promote and reclaim environmentally sensitive products. Styrofoam does not degrade as quickly as paper in a landfill. Using recycled paper reduces the amount of solid waste sent to landfills.
Page: 120
 Learning Objective: 3

    
120.  At 3M, the “Pollution Prevention Pays” program has generated almost 6,000 ideas that eliminated more than 2.5 billion pounds of air, water and solid-waste pollutants from the environment. This is an example of __________.
a) demarketing
b) green marketing
c) consumerism
d) an ecological code of ethics
e) cause marketing
Ans: b
Feedback: Green marketing is defined as marketing efforts designed to produce, promote and reclaim environmentally sensitive products. The 3M program has reduced the amount of pollutants in the environment.
Page: 120
Learning Objective: 3

   
121. FedEx and UPS are converting their delivery trucks with standard diesel engines to more fuel-efficient and cleaner technologies, such as hybrid-electric vehicles. These vehicles can cut fuel costs by half and lower fuel emissions by 90 percent. This is an example of __________.
a) demarketing
b) green marketing
c) consumerism
d) an ecological code of ethics
e) cause marketing
Ans: b
Feedback: Green marketing is defined as marketing efforts designed to produce, promote and reclaim environmentally sensitive products.
Page 120
Learning Objective: 3

   
122. A global undertaking to further green marketing efforts is the __________.
a) ISO 14000 initiative
b) Secondary Color World (SCW) initiative
c) Green World (GW) initiative
d) ISO 1000 initiative
e) ISO 9000 initiative
Ans: a
Page: 120
Learning Objective: 3

    
123.  ISO 14000 is __________.
a) a plan to encourage the purchase of non-pirated products
b) an international plan to further green marketing
c) a method for organizations to support the International Olympics Committee and its athletes without endangering its nonprofit status
d) a free trade agreement
e) a nonprofit organization that monitors work environments in potentially dangerous occupations
Ans: b
Page: 120
Learning Objective: 3

    
124. ISO stands for __________.
a) International Services Organization
b) Intelligent Standards Organization
c) International Standards Organization
d) International Selection Organization
e) Intelligent Selection Organization
Ans: c
Page: 120
Learning Objective: 3

   
125. Which of the following statements about ISO 14000 is true?
a) ISO standards are embraced by 118 countries
b) ISO 14000 is an international plan to further green marketing
c) more than 53,000 companies have met ISO 14000 standards
d) 23% of all ISO certified companies are Japanese firms
e) all of the above statements are true
Ans: e
Feedback: ISO standards are embraced by 118 countries. ISO 14000 is an international plan to further green marketing. More than 53,000 companies have met ISO 14000 standards. 23% of all ISO certified companies are Japanese firms.
Page: 120
Learning Objective: 3

   
126.__________ is a formal marketing practice, which occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products. 
a) Philanthropic marketing
b) Goodwill marketing
c) Relationship marketing
d) Transactional marketing
e) Cause marketing
Ans: e
Page: 120, 121
Learning Objective: 3

   
127. Cause marketing refers to __________.
a) marketing efforts made on behalf of a nonprofit organization
b) marketing services provided at little or no cost for the purpose of promoting or supporting a worthy cause
c) charitable contributions tied directly to the customer revenues produced through the promotion of one of a firm’s products
d) marketing efforts specifically taken to counteract negative publicity based on a firm’s involvement in environmentally sensitive issues
e) all of the above
Ans : C
Page: 120, 121
Learning Objective: 3

    
128.  Cause marketing programs incorporate all three concepts of social responsibility by addressing public concerns, satisfying customer needs and __________.
a) protecting the environment
b) enhancing corporate sales and profits
c) following the guidelines of industry-specific codes of ethics
d) fulfilling company objectives
e) demonstrating ethical behavior
Ans: b
Feedback: Socially responsible efforts on behalf of the general public are becoming more common. A formal practice is cause marketing, which occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products. This definition distinguishes cause marketing from a firm’s standard charitable contributions, which are outright donations. Cause marketing programs incorporate all three concepts of social responsibility by addressing public concerns and satisfying customer needs. They can also enhance corporate sales and profits.
Page: 120, 121
Learning Objective: 3

   
129. (p. 120, 121) A key difference between cause marketing and an outright charitable contribution is __________.
a) a charitable contribution counts as a lower tax deduction
b) there is no limit to the amount of charitable deductions a firm can make, but a firm is limited to the number of cause marketing efforts made in the course of one year
c) charitable donations are contributed at the sole discretion of the firm; with cause marketing the amount is directly affected by the consumers’ purchases
d) cause marketing is generally linked to public causes and concerns and straight charitable contributions are generally given to private institutions
e) there is essentially no difference between a straight charitable contribution and cause marketing
Ans: c
Feedback: Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenue produced through the promotion of one of its products.
 Page: 120,121
Learning Objective: 3

   
130.  In 2008, Procter & Gamble engaged in a campaign where it would make a donation of one child’s vaccine to UNICEF for every package of Pampers bought. This is an example of __________.
a) philanthropic marketing
b) goodwill marketing
c) public relations marketing
d) transactional marketing
e) cause marketing
Ans: e
Feedback: Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenue produced through the promotion of one of its products. How much P&G donates to UNICEF depends on how many packages of Pampers bought.
Page: 120, 121
Learning Objective: 3

   
131. (p. 120, 121) A Toyota dealership in British Columbia, Canada, donated US$50 to the Make-A-Wish Foundation of Canada for each Toyota purchased during a particular month. This is an example of how a small business can engage in __________.
a) philanthropic marketing
b) goodwill marketing
c) public relations marketing
d) transactional marketing
e) cause marketing
Ans: e
Feedback: Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenue produced through the promotion of one of its products. The amount donated by the car dealership was directly related to how many Toyotas it sold.
Page: 120, 121
Learning Objective: 3

132. Post supports the Boys & Girls Clubs. For every coupon found on a box of any of the Post brands redeemed, Post has promised to donate $.10 to the organization. This is an example of __________.
a) philanthropic marketing
b) goodwill marketing
c) public relations marketing
d) transactional marketing
e) cause marketing
Ans: e
Feedback: Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenue produced through the promotion of one of its products. How much money earned by the Boys & Girls Clubs was directly related to how many coupons Post got consumers to redeem.
Page; 120, 121
Learning Objective: 3

133. Procter & Gamble raises funds for the Special Olympics when consumers purchase selected company products. This is an example of __________.
a) cause marketing
b) philanthropic marketing
c) goodwill marketing
d) public relations marketing
e) transactional marketing
Ans: a
Feedback: Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenue produced through the promotion of one of its products. How much money earned by the Special Olympics is directly related to how many P & G products are purchased by customers.
Page: 120, 121
Learning Objective: 3

134. MasterCard International links usage of its card with fund raising for institutions that combat cancer, heart disease, child abuse, drug abuse and muscular dystrophy. This is an example of __________.
a) philanthropic marketing
b) cause marketing
c) goodwill marketing
d) public relations marketing
e) transactional marketing
Ans: b
Feedback: Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenue produced through the promotion of one of its products. How much money earned by the various causes listed is directly related to how much consumers use their MasterCard.
Page: 120, 121
Learning Objective: 3

135. Which of the following statements about cause marketing is true?
a) Cause marketing will rarely motivate consumers to switch to a brand or a retailer that supports a good cause.
b) Consumers generally have a negative opinion of companies that support causes
c) Although consumers are interested in cause marketing, it does not raise much money for the cause
d) Cause marketing is expected to decrease in the future
e) Cause marketing may be a valued point of difference for brands and companies
Ans: e
Feedback: All else equal, cause marketing may be a valued point of difference for brands and companies. Cause marketing does motivate consumers to switch to a different brand or retailer and consumers generally have a positive opinion of companies that support causes. Cause marketing does raise a lot of money for causes and it is expected to increase in the future.
Page: 121
Learning Objective: 3

136. American Express Company linked usage of its card to the renovation of the Statue of Liberty. American Express raised US$1.7 million for the renovation. This is an example of __________.
a) philanthropic marketing
b) goodwill marketing
c) public relations marketing
d) cause marketing
e) transactional marketing
Ans: d
Feedback: Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenue produced through the promotion of one of its products. The American Express Company effort raised US$1.7 million for the renovation, increased card usage among cardholders and attracted new cardholders.
Page: 121
Learning Objective: 3

137. A(n) __________ is a systematic assessment of a firm’s objectives, strategies and performance in terms of social responsibility.
a) business mission
b) strategic marketing process
c) SWOT analysis
d) social audit
e) accountability analysis
Ans: d
Page: 122
Learning Objective: 3 

138. Converting socially responsible ideas into actions involves careful planning and monitoring of programs. Many companies develop, implement and evaluate their social responsibility efforts by means of a(n) __________.
a) action plan
b) tactical plan
c) research plan
d) social audit
e) financial audit
Ans: d
Feedback: Many companies develop, implement and evaluate their social responsibility efforts by means of a social audit, which is a systematic assessment of a firm’s objectives, strategies and performance in terms of social responsibility.
Page: 122
Learning Objective: 3

139. The first step in any social audit is to __________.
a) set the budgets for marketing programs
b) identify social responsibility causes consistent with the company’s mission
c) recognize a firm’s social expectations and the rationale for engaging in social responsibility endeavors
d) determine the types of resources needed to achieve social responsibility objectives
e) evaluate current social responsibility programs
Ans: c
Feedback: A social audit consists of five steps, the first of which is recognition of a firm’s social expectations and the rationale for engaging in social responsibility endeavors.
Page: 122
Learning Objective: 3

140. A social audit __________.
a) would tell a plastics manufacturer if helping raise money for a local playground was consistent with its mission
b) would identify the type and amount of resources needed for a company that wanted to raise money for a local after-school program
c) is a systematic assessment of a firm’s objectives, strategies and performance in terms of social responsibility
d) would be used to evaluate current social responsibility programs to see what future involvement was reasonable
e) is accurately described by all of the above
Ans: e
Feedback: A social audit is a systematic assessment of a firm’s objectives, strategies and performance in terms of social responsibility. The five steps of the audit are (1) recognition of a firm’s social expectations and the rationale for engaging in social responsibility endeavors, (2) identification of social responsibility causes or programs consistent with the company’s mission, (3) determination of organizational objectives and priorities for programs and activities it will undertake, (4) specification of the type and amount of resources necessary to achieve social responsibility objectives and evaluation of social responsibility programs and activities undertaken and assessment of future involvement. These are illustrated in the choices given in the question.
Page: 122
Learning Objective: 3

141. __________ involves conducting business in a way that protects the natural environment while making economic progress.
a) Sustainable development
b) Brown marketing
c) Concentrating on stakeholder responsibility
d) Relationship marketing
e) Natural marketing
Ans: a
Page: 122
Learning Objective: 3

142. Which of the following statements about sustainable development is true?
a) A company that always makes its furniture from rare tropical woods is practicing sustainable development
b) Only large international companies can achieve sustainable development
c) A company that has a 20 percent rate of growth practices sustainable development even if it operates two illegal landfills
d) A company that uses child laborers to manufacturer its products in order to stay number one in its industry does not practice sustainable development
e) Consumers don’t care whether a company practices sustainable development
Ans: d
Feedback: Sustainable development involves conducting business in a way that protects the natural environment while making economic progress. Sustainable development is not limited to any particular size organization. Consumers are more likely to buy from a company that has provable sustainable development than one that does not.
Page: 122
Learning Objective: 3

143. Consumers have an obligation to __________ in the exchange process and in the use and disposition of products.
a) get everything they can for their money
b) do unto retailers as retailers would do unto them
c) reveal any and all pertinent personal information
d) act ethically and responsibly
e) not get upset if they feel they have been cheated
Ans: d
Feedback: Consumers have an obligation to act ethically and responsibly in the exchange process and in the use and disposition of products. Unfortunately, consumer behavior is spotty on both counts.
Page: 123
Learning Objective: 4

144. Practices that include filing warranty claims after the claim period, misredeeming coupons, making fraudulent returns of merchandise, providing inaccurate information on credit applications, tampering with utility meters, tapping cable TV lines, duplicating copyrighted music and software and submitting phony insurance claims are examples of __________.
a) normal and reasonable consumer behavior
b) unethical practices of consumers
c) acceptable business costs
d) costs to be passed along to shareholders
e) violations of the Consumer Bill of Rights
Ans: b
Feedback: Consumers also have an obligation to act ethically and responsibly in the exchange process and in the use and disposition of products. These are examples of unethical consumer practices, all of which have a cost to marketers in terms of lost sales revenue and prevention expenses.
Page: 123
Learning Objective: 4

145. Although research shows consumers are sensitive to ecological issues, they may NOT be willing to purchase a given product or service solely on the basis of its environmental claims because they __________.
a) may not want to sacrifice convenience
b) lack the knowledge to make informed decisions
c) may not want to pay higher prices
d) may be confused about which products are truly “environmentally safe” given that many marketers claim to produce “green products” even if they aren’t
e) believe all of the above to be true
Ans: e
Feedback: Inconvenience, higher prices, lack of knowledge and confusion influence consumers’ disposition toward environmentally sensitive products.
Page: 123
Learning Objective: 4

146. Which of the following statements about consumer ethics is true?
a) Consumer complaints about online auction fraud outnumber all reports of online crime
b) The cost to marketers of unethical consumer behavior is huge in terms of lost sales
c) The cost to marketers of unethical consumer behavior is huge in terms of prevention expenses
d) Retailers lose about $30 billion yearly from shoplifting
e) All of the above are true
Ans: e
Feedback: Consumer complaints about online auction fraud outnumber all reports of online crime. The cost to marketers of unethical consumer behavior is huge in terms of lost sales and prevention expenses. Retailers lose about $30 billion yearly from shoplifting.
Page: 123
Learning Objective: 4

147. Which of the following statements about consumer ethics is true?
a) Most consumers’ unethical acts are motivated by economic need
b) Some consumers believe that the consumer can get away with unethical behavior
c) The consumer knows that few others do it and gets a “high” from doing what few others can
d) The consumer doesn’t feel the unethical behavior is a big deal and no one else does it anyway
e) All of the above are true
Ans: b
Feedback: Research on unethical consumer behavior indicates that these acts are rarely motivated by economic need. This behavior appears to be influenced by (1) a belief that a consumer can get away with the act and it is worth doing and (2) the rationalization that the act is justified or driven by forces outside the individual—“everybody does it”.
Page: 123
Learning Objective: 4

148. What are the two most marketable characters in the animation Shrek?
a) Fiona and Shrek
b) Shrek and Donkey
c) Donkey and Gingerbread man
d) Donkey and Puss-in-Boots
e) Shrek and Puss-in-Boots
Ans: b
Feedback: Shrek and Donkey are the most marketable characters in the animation Shrek.
Page: 125
Learning Objective: 3

149. Which aspect of the characters in the animation Shrek makes them popular in advertising campaigns?
a) hilarious
b) popular
c) well-liked
d) easily recognizable
e) All of the above
Ans: e
Feedback: Hilarious, popular, well-liked and easily recognizable are all characteristics of the characters in Shrek that make them easily marketable to the masses.
Page: 125
Learning Objective: 3

150. Why does the World Health Organization (WHO) ban the use of internet, new media advertisement and use of celebrities and cartoon characters in junk food marketing?
a) Junk food are high in energy
b) Junk food are low in nutrients
c) Junk food are high in fats, sugars and salt 
d) Junk food contribute to obesity in children
e) All of the above
Ans: e
Feedback: High in energy, fats, sugars and salt and low in nutrients are what make junk food a main cause for obesity in children.
Page: 125
Learning Objective: 3

151. In which parts of the world are children threatened by obesity-related diseases?
a) Developed countries only
b) Developing countries only
c) Mexico, Britain and Australia only
d) Third world countries
e) Both developed and less developed countries.
Ans: e
Feedback: Developed countries that have high percentage of children obesity are Australia and the US. An example for a less developed country with the same problem is Mexico.
Page: 125, 126
Learning Objective: 3

152. Which of the following measures does Australia use to curb rising percentage of child obesity?
a) banning advertisement targeting kids
b) banning sales pitches to children by cartoon characters
c) banning junk food advertisement
d) banning child television personalities from appearing in advertisements before 9p.m.
e) none of the above
Ans: e
Feedback: Australia does not place any restriction in the content of advertisements.
Page: 126
Learning Objective: 3

153 What kind of restrictions does Australia impose on TV advertisements?
a) Total advertising time for programs targeting children under 14 is restricted to 15 minutes per hour
b) The same advertisement can only be shown a maximum of 3 times in any 30-minute block.
c) No restriction for adults program
d) Restrict advertising on junk food in programs that are popular with young audiences
e) None of the above.
Ans: c
Feedback: No restriction on advertisement time limit is placed on adults shows.
Page: 126
Learning Objective: 3

154. Why is a ban on all junk food advertisements pending in Australia?
a) Efforts to tackle childhood obesity issues prove to be effective even with junk food advertisements flood the media.
b) The food industry in Australia has already volunteered a ban on junk food advertisements
c) The Australian government does not realize the problems caused by childhood obesity.
d) The government wants the food industry to take a voluntary action before it makes a law against junk food advertisement.
e) None of the above.
Ans: d
Feedback: The reason the Australian government has not placed a ban on junk food advertisement is they want the food industry to take a voluntary action.
Page: 126
Learning Objective: 3

155. What are the reasons against the ban of junk food advertisement?
a) No evidence that the ban solves child obesity issues
b) No strong evidence showing that advertisements have substantial influence on children’s food consumption, leading to overweight problems.
c) Parents are responsible for the diet of their children and not the state’s.
d) A, B and C
e) B and C only.
Ans: d
Feedback: All A, B and C are reasons against the ban of junk food advertisement.
Page: 126
Learning Objective: 3

156. The case of governments banning junk food advertisements to curb child obesity rates is an example of __________.
a) societal concept of marketing
b) social responsibility
c) ethical behavior in marketing
d) negative marketing
e) cause marketing
Ans: b
Feedback: Banning advertisement is an act of social responsibility.
Page: 126
Learning Objective: 3

Short answer

157. Explain how Asahi acts with societal responsibility. 
Ans: Societal responsibility refers to obligations that organizations have (1) to the preservation of the ecological environment and (2) to the general public. The Asahi water conservation and forest development efforts as well as its waste, can and bottle recycle policy illustrate the preservation of the ecological environment. Asahi currently recycles 100 percent of the 300,000 tons of waste materials and by-products generated in the production of beer. Asahi also seeks to reduce carbon dioxide emissions by 10 percent through conservation efforts.On top of that, Asahi participates actively in cultural and community activities to promote social program. Asahi’s alcohol awareness and education initiatives about underage drinking are examples of service to the general public.
Page: 109, 110
Learning Objective: 1

158. Describe the difference between ethics and laws. 
Ans: ethics are the moral principles and values that govern the actions and decisions of an individual or group. They serve as guidelines on how to act rightly and justly when faced with moral dilemmas. Whereas ethics deal with personal moral principles and values, laws are society’s values and standards that are enforceable in the courts.
Page: 110
Learning Objective: 1

159. Identify and briefly describe the three factors that influence ethical behavior. 
Ans: The three major factors affecting business ethics are societal culture and norms, business culture and industry practices and corporate culture and expectations. Culture is the set of values, ideas and attitudes that are learned and shared among members of a group. Culture also serves as a socializing force that dictates what is morally right and just. This means that moral standards are relative to particular societies. Business cultures are made up of the effective rules of the game, the boundaries between competitive and unethical behavior and the codes of conduct in business dealings. Corporate culture is a set of values, ideas and attitudes that is learned and shared among the members of an organization.
Page: 112-118
Learning Objective: 2

160. (p. 113, 114) Briefly elaborate the rights of consumers as depicted in the Consumer Bill of Rights.
Ans: before the 1960s, the legal concept of caveat emptor (let the buyer beware) was pervasive in business culture. Subsequently, the Consumer Bill of Rights that was intended to regulate the ethics of exchange between buyers and sellers. Ethical exchanges between buyers and sellers should result in both parties being better off after a transaction. The Consumer Bill of Rights includes the right
(1) to safety – consumer products must be safe to use. Any unsafe products must be notified to buyers and withdrawn from the market.
(2) to be informed – consumers must be informed about the product before purchase. Marketers and firms need to make buyers aware of important details.
(3) to choose – consumers have the right to make choices in the course of purchase.
(4) to be heard – consumers have the right to give feedback.
Page: 113, 114
Learning Objective: 2

161. Identify and describe the two types of personal moral philosophy. 
Ans: Moral idealism and utilitarianism are two types of moral philosophy. Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome. It exists in the Consumer Bill of Rights and is favored by moral philosophers and consumer interest groups. Utilitarianism is a personal moral philosophy that focuses on “the greatest good for the greatest number” by assessing the costs and benefits of the consequences of ethical behavior. If benefits exceed the costs, then the behavior is considered ethical, if not, then the behavior is considered unethical. This philosophy underlies the economic tenets of capitalism and is embraced by many business executives and students.
Page: 118
Learning Objective: 2 

162. Define the moral philosophy of utilitarianism and explain its relationship to capitalism. 
Ans: Utilitarianism is a personal moral philosophy that focuses on “the greatest good for the greatest number” by assessing the costs and benefits of the consequences of ethical behavior. If the benefits exceed the costs, then the behavior is ethical. If not, then the behavior is unethical. This philosophy underlies the economic tenets of capitalism.
Page: 118
Learning Objective: 2

163. Body Bazaar: The Market for Human Tissue in the Biotechnology Age is a book by Lori Andrews and Dorothy Nelkin. According to the book, “Body parts are bought and sold for medical research, diagnostics and therapies. They are marketed to museums and personal collectors. And pieces of people are increasingly being used as raw materials for products-from placenta-enriched shampoos to experimental DNA-run computers. Blood has become one of the most valuable commodities on Earth. While petroleum sells for US$100 a barrel, an equivalent quantity of blood products is worth US$67,000”. Use this quote to explain why ethics is such a difficult concept to understand. 
Ans: You may want to use this question for classroom discussion. This example makes it obvious why ethics is such a difficult area to study and to teach. Students should realize that they must weigh their personal philosophy of moral idealism—the way the remains of a loved one should be treated respectfully—with a more utilitarian philosophy, which focuses on how much can be learned from research on body parts. The cost of the blood is a supply and demand issue—just like the price of rocks compared to the price of diamonds. It is not really an ethical issue. It is included to demonstrate that subjects can be made to appear to be an ethical issue when they are not.
Page: 118
Learning Objective: 2

164. Define green marketing and provide two examples of it. 
Ans: Green marketing refers to a company’s marketing efforts to produce, promote and reclaim environmentally sensitive products. It is a response to the growing importance of ecological issues in marketing. Examples include: 3M’s “Pollution Prevention Pays” program and Xerox’s “Design for the Environment” program. Students, of course, may think of other equally appropriate examples.
Page: 120
Learning Objective: 3

165. Describe the three major forms or concepts of social responsibility. 
Ans: The three concepts of social responsibility include profit responsibility, stakeholder responsibility and societal responsibility. Profit responsibility holds that companies have a simple duty—to maximize profits for their owners or stockholders. Stakeholder responsibility focuses on the obligations organizations have to those who can affect achievement of their objectives, including customers, employees, suppliers and distributors. Societal responsibility refers to obligations that organizations have to the preservation of the ecological environment and to the general public.
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Learning Objective: 3

166. An increasing percentage of turkeys are now being marketed as “free range”. Consumers typically pay US$1 more per pound for free-range turkeys, which are thought to have lived more humane lives-and as a result, to taste better—than their conventionally raised counterparts. A free-range bird is defined as one that has been allowed “access to the out-of-doors”. Are turkey growers who allow their birds to access to the out-of-doors only moments before they are killed acting socially responsible? 
Ans: To answer this question, students will need to consider the three aspects of social responsibility. If the turkey grower feels that its responsibility is to maximize profits for its owners and stockholders, then it is taking profit responsibility—this is one of the concepts of social responsibility. It is not acting socially responsible if it believes in stakeholder responsibility. Customers who actually desire a more humanely treated animal are being deceived. There is nothing to indicate that the grower is taking any societal responsibility.
Page: 119, figure 4-4
Learning Objective: 3

167. A recent survey found that 79 percent of Internet and e-commerce companies take absolutely no social responsibility. Even more worrying is the finding that 75 percent of these Internet companies justify this omission on the grounds that they don’t have any environmental or social impacts, while 55 percent said they didn’t have time to think about these issues and 50 percent said they didn’t have the expertise to address them. Would these Internet-based companies benefit from acting more socially responsible? Explain your answer. 
Ans: Social responsibility includes the concept of societal responsibility. Societal responsibility refers to obligations that organizations have (1) to the preservation of the ecological environment and (2) to the general public. A formal practice of giving service to the general public is referred to as cause marketing, which occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products. In a poll covering 23 countries across six continents two in three consumers want companies to contribute to broader societal goals that go beyond the historical role of making a profit, paying taxes, employing people, and obeying the law. Half of these consumers are paying attention to the social behaviors of companies. 38 percent of these consumers from Asia said they had punished or considered punishing a company for social wrongdoing.
Page: 121
Learning Objective: 3

168. What is the difference between standard charitable contributions and cause marketing? 
Ans: a firm’s standard charitable contributions are outright donations. Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of a specific product. Cause marketing programs incorporate all three concepts of social responsibility by addressing public concerns, satisfying customer needs and enhancing corporate sales and profits.
Page: 121
Learning Objective: 3

169. MasterCard International links usage of its card with fund raising for institutions that combat cancer, heart disease, child abuse and muscular dystrophy. Master Card gives a modest percentage of charges on their credit cards to the institutions. What is this called and how does it affect cardholders ‘ behavior? 
Ans: This practice is called cause marketing, which occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of its products. It may have the effect of encouraging the cardholders to charge more on their MasterCards (rather than Visa or American Express)—especially if they believe in the charity receiving the contribution.
Page: 121
Learning Objective: 3

170. What are the five steps in a social audit? 
Ans: a social audit consists of the following steps:
(1) Recognition of a firm’s social expectations and the rationale for engaging in social responsibility endeavors.
(2) Identification of social responsibility causes or programs consistent with the company’s mission.
(3) Determination of organizational objectives and priorities for programs and activities it will undertake.
(4) Specification of the type and amount of resources necessary to achieve social responsibility objectives.
(5) Evaluation of social responsibility programs and activities undertaken and assessment of future involvement.
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Learning Objective: 3

171. Research on unethical consumer behavior such as fraudulent automobile insurance claims or unauthorized downloading of music, movies and software, indicates that these acts are rarely motivated by economic need. What, then, influences this behavior? 
Ans: This behavior appears to be influenced by (1) a belief that a consumer can get away with the act and it is worth doing and (2) the rationalization that the act is justified or driven by forces outside the individual—“everybody does it”.
Learning Objective: 4

172 Should junk food advertisement be banned?
Ans: Reasons for the ban of junk food advertisements:
“The exposure to the commercial promotion of energy-dense, micronutrient-poor foods and beverages can adversely affect children’s nutritional status” – reason given by WHO.
Junk food is one of the main causes to rising children obesity in children all over the world.
Research has shown that real-life and animated characters were positively associated with products advertised to children aged 2-6
Reasons against the ban of junk food advertisements:
There is no evidence to show that bans solved the obesity issue and the existing regulations worked well
There is no strong evidence that advertising has a substantial influence on children’s food consumption, leading to overweight children. Countries with the ban in place like Sweden and Quebec (Canada) has no real change in the number of obesity children. However, in Holland where no ban on advertisement is enforced, the rate of childhood obesity is the one of the lowest in Europe.
Popular view that ultimately it is the parents’ responsibility to monitor and control what and how much children are eating.
Weigh the reasons for and against the ban of junk food advertisement and give a reasonable judgment based on your argument.
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