Exam 6: The Regulatory and Ethical Environment of Promotions

Ethics is defined as

Scenario 6-5 Joe Rowan walked into Pederson Toyota one day and began looking at price stickers on Toyota Camrys. He was interested in that model because he had seen a number of television and magazine ads describing the car's features and reputation for reliability. After closely examining the stickers, Joe noticed a line that said "Dealer Promotion Allowance - $125.00." Joe asked a salesperson what that meant. The reply was that it was a charge that helped the dealership pay for local advertising to encourage consumers to shop at that particular dealer. After further discussion, Joe learned that almost 5% of the cost of the vehicle comes from expense for national and local advertising. -(Scenario 6-5) Which of the following government agencies would be most appropriate to contact if Jow Rowan felt like he should file a complaint about advertising in the automotive industry?

Defamation that occurs in print and would relate to magazine, newspaper, direct mail, or Internet reports is known as:

There is much confusion about subliminal advertising, but research has shown that while people do process some information subliminally, there is no proof that subliminal messages persuade anyone to do anything.

The passage of the Wheeler-Lea Amendment in 1938 had a substantial impact on advertising regulation in the United States. The passage of the amendment

Disney's Dave the Barbarian and Lizzie McGuire are a popular television shows which are featured as McDonald's Happy Meal toys that are popular among boys and girls. Products featuring characters from movies and television are heavily advertised on television to this audience. Outline the concerns that a critic of advertising would have about this practice.

The concept of "privacy" as it relates to online e-commerce is emerging as a critical concern for advertisers, regulators and consumers. Explain how this problem is currently being addressed.

Critics of advertising maintain that society is not better off with advertising because it "shuffles existing total demand" rather than expanding total demand that would stimulate the economy.

Which of the following is true of consumerism

Give two reasons why it is in the best interests of advertising agencies and the advertising industry to engage in self-regulation.

With regard to deception in advertising, the FTC and various court decisions have concluded that

One of the basic remedies used by the FTC in dealing with unfair advertising is a consent order, where an advertiser accused of running deceptive advertising agrees to stop without admitting guilt.

While it is legal, the use of superlatives ("Number One" or "Best in the World") in advertising is often called ____.

The National Advertising Review Board (NARB) and the National Advertising Division (NAD) ability to regulate advertisers depends on the cooperation of members.

Scenario 6-2 When the Rally's hamburger chain's Big Buford ad campaign -- "It's not the size; it's the taste" -- began running a few years ago, Louisville's Southeast Christian Church's weekly newspaper, The Southeast Outlook, quickly responded with a series of columns and editorials, all vehemently denouncing the ads as obscene and urging a boycott of Rally's. They included the telephone numbers of Rally's corporate offices and of local television stations. The Outlook later reported that each station received several hundred calls and that Rally's prematurely ended the campaign. (Henry Hoenig, "The Gospel of Growth", Louisville.com, http://www.louisville.com/loumag/oct98/sec.shtml, 01/08/05). -(Scenario 6-2) The editors of the newspaper have asked individual local radio stations to boycott the advertisements. They also have the option of working with a media self regulatory organization. If they wish to work with a media self-regulatory organization, they should contact the ____ with any concerns over issues of truth, fairness, or good taste.

Over the past few years, more and more women, elderly persons, and ethnic minorities have started appearing in advertisements. Critics of advertising would respond that

Scenario 6-1 A group that calls itself Adbusters has a site on the World Wide Web. The site contains many pages that address issues of consumption and culture, media practices and corporate responsibilities. For example, "the momentum has clearly accelerated. By some measures humans have used more physical resources since World War II than in all of history before it. It's now taking a toll beyond anything we could ever have imagined. What does it mean when one-sixth of the world's population consumes without any real restraint?" Throughout the website, there are many references to advertising's role in creating and maintaining this situation. Not surprisingly, virtually all of the references to the practice of advertising are negative. (http://www.adbusters.org/home/) -(Scenario 6-1) In the past, Adbusters cited 12 magazines that it said are responsible for pushing "a clean, exciting image for one of the dirtiest products around: tobacco." They suggested that Americans cancel their subscriptions to these magazines until the magazines stopped accepting this advertising. This is an example of

It has been said on many occasions that advertising promotes materialism. Do you agree or disagree with this statement? Support your position.

Scenario 6-3 "Consumerism is a pattern of behavior that helps to destroy our environment, personal financial health, the common good of individuals and human institutions" begins the first page on a World Wide website entitled "Overcoming Consumerism." It continues, "This site details ways that you can help defeat consumerism, save money, work less and lead a more satisfying and environmentally benign life while helping to restore the self-sufficiency of your community." (http://www.verdant.net/) As one travels from page to page in the site, advertising is often implicated as a source of the movement toward consumerism. Many of the same criticisms of advertising found in the site were outlined in the textbook. -(Scenario 6-3) One quote from the site reads, "Time, the shrinking commodity of our lives, is exchanged for money to buy things that there is usually little time to enjoy. What's left over is often devoured by television, basically a series of ever-more mediocre filler programs between ever-more spectacular commercials whose sole purpose is to stoke further desire for more things." To respond to the implication that advertising robs people of time, a proponent of advertising may logically argue that

One critical point in the FTC's regulations regarding deception is that they not only include false or deceiving claims but also include missing information that may deceive.