Exam 6: The Regulatory and Ethical Environment of Promotions

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) The writers of "Overcoming Consumerism" believe that as consumerism grows, people will buy anything and everything. This reduces the incentive for companies to manufacture quality, long-lasting products. On the other hand, according to the textbook, a proponent of advertising might argue that

Determining what is ethical or unethical in advertising

Scenario 6-6 Students from several organizations on campus sponsored a forum to debate the pros and cons of advertising. Student organizations representing consumers, journalists, marketers, entrepreneurs, and political scientists all had members in attendance. Following are some of the comments made at the forum. -(Scenario 6-6) One student stood up at the forum and said, "I bought a bike because the ads for this brand always said that it was the best in the world. I just don't think that is true. I've had quite a few problems with this bike compared to other brands that some of my friends own." When an advertiser uses absolute superlatives in ads it is typically known as ____.

Advertising critics argue that it contributes to many problems in society. Which of the following is typically given by proponents as a positive aspect of today's advertising?

Vertical cooperative advertising is usually legal, except when

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) After the comments in the above question were made, the salesperson replied, "If our industry didn't do so much advertising you probably couldn't afford to buy that computer to do your own research." Which of the following pros of advertising is the salesperson likely using to support his comment?

The Children's Advertising Review Unit is a government agency that has issued a set of guidelines regarding the use of comparison ads.

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) If the church goers wanted to launch a complaint with a government agency stating that the Big Buford ads are obscene, they would contact

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 Big Buford example is evidence that

Some people believe that advertising serves as a tool of education. Others believe it serves only to confuse and entice. Choose an advertisement that you have seen recently and use it to make a convincing argument for the pro-advertising position. Be sure to explain how the advertisement can affect an individual consumer. Choose another advertisement that you have seen recently and use it to make a convincing argument for the con-advertising position. Again, be sure to explain how the advertisement can affect an individual consumer.

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 FCC could conceivably become involved in the complaint. The FCC is empowered to regulate

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) Joe Rowan saw a television ad that stated the Toyota Camry was "The world's best car for reliability." Some critics of advertising argue that the use of such absolute superlatives in advertising is ____.

Scenario 6-6 Students from several organizations on campus sponsored a forum to debate the pros and cons of advertising. Student organizations representing consumers, journalists, marketers, entrepreneurs, and political scientists all had members in attendance. Following are some of the comments made at the forum. -(Scenario 6-6) Several students commented after the forum that, "Advertising is taking too much blame for some of society's problems that Advertisers adjust to changes in the way of life that today's consumer wants." Which of the following arguments in favor of advertising best supports these students comments?

Those who argue that advertising promotes conformity and status seeking consumption behavior are rebutted by those who assert that advertising reflects, not causes, America's age of consumption.

The FTC holds a degree of regulatory power over advertising aimed at children. In general, its efforts have been

Some advertising critics suggest that advertising can communicate below the threshold of consciousness. Which of the following cons of advertising does this issue most closely relate to?

Scenario 6-4 The Lightning Rod is a fishing rod being introduced by Castaway Sports. At a preliminary meeting with its agency, the president of Castaway Sports mentions that the rod can improve casting distance for an average individual by more than 20 percent. The account executive asks if the president has data to support this. The president replies yes. The agency proceeds to produce a series of television spots featuring the endorsement of a well-known celebrity. The spots run on network television and trumpet the improved casting distance that the rod provides. The slogan of the spots is "Lightning Rods--the finest rod ever cast." After about a week, a competitor questions whether the rods really offer the improved performance Castaway Sports claims. The competitor files a complaint with the FTC. -(Scenario 6-4) In relation to the Lightning Rod spots,

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) Joe Rowan was frustrated to learn that such a large percentage of the price of a car came from advertising expenses. He said to the dealer spokesperson, "If you would stop advertising so much, I could save money on this car. Heck, I would be willing to spend hundreds of my own money to do a complete search on the Internet and other literature to find the best car for me. I don't need you guys to do that for me with all your advertising!" Which criticism of advertising is most disconcerting to Joe at this moment?

Television programs like the Smurfs and the Muppets have been banned by the U.S. government because they constitute program-like advertisements to children.

Which one of the following would not be offered as support for the argument that advertising benefits consumers?