Deck 4: Environmental, Regulatory, and Ethical Issues

Question 1

The way firms confront negative publicity has important strategic as well as ethical ramifications.

Answer 1

True

Question 2

The Golden Rule test states that you should take actions that would be viewed as proper by an objective panel of your professional colleagues.

Answer 2

False

Question 3

The FTC believes that its authority extends to prohibiting the entertainment industry from targeting children with advertisements for violent films,video games,and music,even if the ads are not deemed deceptive or unfair.

Answer 3

False

Question 4

For subconscious priming to be effective,the primed topic must be compatible with the individual's current need states.

Question 5

Slotting allowances require manufacturers to pay retailers a per-store fee for their willingness to handle a new stock unit from the manufacturer.

Question 6

The FDA regulates the brewing and liquor industries.

Question 7

Billboard advertising of alcohol products is restricted under the Master Settlement Agreement between the federal government and firms in the alcohol industry.

Question 8

Regulation is always justified.

Question 9

One criticism of advertising is that it creates and perpetuates stereotypes.

Question 10

For marketing communicators,ethics involves matters of right and wrong,or moral,conduct pertaining to any aspect of marketing communications.

Question 11

Costs of regulation include cost of complying,enforcement costs,and costs resulting from unintended side effects.

Question 12

Consumer privacy is an ethical issue that transcends all marcom activities.

Question 13

The mission of the National Association of Advertising (NAA)is to improve and strengthen the ad agency business,to advocate advertising,to influence public policy,to resist advertising-related legislation that it regards as unwise or unfair,and to work with government regulators to achieve desirable social and civic goals.

Question 14

Over 60 percent of advertising is found to be deceptive.

Question 15

Consumers,as well as marketers,can be guilty of unethical behavior in the area of sales promotions.

Question 16

Four aspects of packaging that involve ethical issues include label information,packaging graphics,packaging safety,and environmental implications of packaging.

Question 17

Marketing communicators in their various capacities rarely are faced with decisions that have ethical ramifications.

Question 18

Especially open to ethical debate is the practice of targeting products and communications efforts to segments that,for various psychosocial and economic reasons,are vulnerable to marketing communications,such as children and economically disadvantaged groups.

Question 19

A regulatory disadvantage is increased prices resulting from a reduction in a seller's "informational market power."

Question 20

The FTC is the U.S.government agency with primary responsibility for regulating advertising at both the federal and state levels.

Question 21

A material representation involves information that is important to consumers and that is likely to influence their choice or conduct regarding a product.

Question 22

AAAA is a self-regulatory group that monitors children's television programming and commercials.

Question 23

Corrective advertising is designed to punish a firm for deceiving consumers.

Question 24

According to the FTC,a misrepresentation is said to occur when qualifying information necessary to prevent a practice,claim,representation,or reasonable expectation or belief from being misleading is not disclosed.

Question 25

In the past,billboards advertising tobacco and alcohol were disproportionately more likely to appear in _____.

A) Southern states
B) rural areas
C) California
D) inner-city areas
E) suburban areas

Question 26

In a marketing communications context,_____ involves matters of right and wrong,or moral,conduct pertaining to any aspect of marketing communications.

A) regulation
B) responsibility
C) social responsibility
D) social awareness
E) ethics

Question 27

The major green communications efforts involve advertisements that promote green products,environmentally friendly packaging,seal-of-approval programs that promote green products,cause-oriented communication efforts that support green products,and point-of-purchase display materials that are environmentally efficient.

Question 28

Many critics consider it unethical to market food products to children,especially through practices using cartoon characters to sell sugared cereals and non-nutritious snacks because _____.

A) obesity is a major problem with America's children
B) these products are expensive
C) children do not have the maturity to make nutritious food choices
D) children believe everything they see and hear
E) the ads are deceptive

Question 29

In Germany,the White Angel seal represents a promise to consumers that a product carrying an environment claim is in fact legitimate.

Question 30

The advertising clearance process is a form of self-regulation undertaken by ad media that takes place behind the scenes before a commercial or other advertisement reaches consumers.

Question 31

The _____ has issued a regular series of reports,titled Marketing Violent Entertainment to Children,that criticizes the entertainment industry for targeting children with advertisements for violent films,video games,and music.

A) FDA
B) NAD
C) CARU
D) FTC
E) NARC

Question 32

The NAD cannot impose fines on deceptive advertisers,but the NARB can.

Question 33

Unfair advertising is also deceptive advertising.

Question 34

A false claim is,by definition,deceptive.

Question 35

Cause-oriented marketing is practiced when companies sponsor or support worthy causes.

Question 36

The FTC is responsible for regulating information on the packages of food and drug products.

Question 37

There is considerable concern regarding the marketing of beer and other alcoholic beverages to teens and young adults.A study by a watchdog group at Georgetown University reported that _____ of alcohol advertising was more likely seen by youths than adults.

A) three-quarters
B) less than five percent
C) seventy percent
D) one-half
E) one-quarter

Question 38

One of the FTC's guidelines for environmental marketing claims states that "claims should not overstate an environmental attribute or benefit,either expressly or by implication."

Question 39

Green Seal,a Washington,D.C.,nonprofit organization,has developed standards and awarded seals to companies that meet environmental standards.

Question 40

The National Association of Attorneys General has played an active role in the regulation of marketing communications.

Question 41

In the AAAA's Code of Ethical Standards,it is stated that "...we will not knowingly create advertising that contains _____.

A) false, or misleading statements or exaggerations, visual or verbal
B) statements, suggestions, or pictures offensive to public decency or minority segments of the population
C) price claims that are misleading
D) testimonials that do not reflect the real opinion of the individual(s) involved
E) All of these are correct.

Question 42

In large part,ethical behavior is a matter of an individual's _____.

A) education
B) age
C) gender
D) income
E) integrity

Question 43

Which of the following is NOT a benefit of regulation?

A) Consumer choice among alternatives is improved when consumers are better informed in the marketplace.
B) Product quality tends to improve in response to consumers' changing needs and preferences.
C) Unintended side effects are minimized with regulation compared to without it.
D) Reduced prices resulting from a reduction in a seller's "information market power."
E) All of these are benefits.

Question 44

The regulation of the brewing and liquor industries is done by the _____.

A) Federal Trade Commission
B) Food and Drug Administration
C) Bureau of Alcohol, Tobacco, and Firearms
D) National Advertising Division
E) National Advertising Review Board

Question 45

Who can engage in unethical behavior with respect to sales promotions?

A) manufacturers
B) retailers
C) consumers
D) a and b only
E) a, b, and c

Question 46

Which of the following statements is true regarding advertising's manipulative power?

A) Bad consumption decisions are proof of advertising's manipulative power over consumers.
B) The only way marketing communications can actually influence consumers is through overt, non-subtle ways.
C) A primed goal state generated by advertising remains an active driver of judgments and behavior over the long run.
D) Advertising practitioners do not have any ability to influence consumers in very subtle ways.
E) People, when consciously aware that attempts are being made to persuade or influence them, have the cognitive capacity to resist efforts to motive them in a direction they wish not to be moved.

Question 47

According to the _____ test,you should take only actions that would be viewed as proper by an objective panel of your colleagues.

A) Golden Rule
B) professional ethics
C) TV
D) moral idealism
E) relativity

Question 48

Regulators have been most active in the area of _____.

A) advertising
B) personal selling
C) sales promotion
D) packaging
E) publicity

Question 49

One criticism of advertising that contends that it tends to portray certain groups in very narrow and predictable fashion,or it _____.

A) targets economically disadvantaged consumers
B) creates and perpetuates stereotypes
C) is untruthful and deceptive
D) is manipulative
E) plays on people's fears and insecurities

Question 50

The practice of marketers in one country using brand names for their products that are virtually the same as the names of established brands from another country is known as _____.

A) piracy
B) trade dress violation
C) private label branding
D) ambush marketing
E) guerilla branding

Question 51

General Mills is introducing a new line of barbecue sauce,and grocery retailers are requiring that General Mills pay them a per-store fee for their willingness to handle the new product.This fee is known as a _____ fee.

A) placing
B) purchasing
C) selling
D) slotting
E) security

Question 52

The organization that promulgated a code of high ethical standards for advertising in 1924,and updated the code in 1990 is the _____.

A) Federal Trade Commission
B) National Advertising Review Council
C) American Advertising Federation
D) Children's Advertising Review Unit
E) American Association of Advertising Agencies

Question 53

Ethical issues in packaging can involve _____.

A) label information
B) packaging graphics
C) packaging safety
D) environmental implications of packaging
E) All of these are correct.

Question 54

Regulation of advertising may result in buyers switching to another product or reducing their level of consumption after regulation is imposed.This is an example of _____ regulation.

A) unfair practices
B) covert marketing practices
C) information regulation in
D) unintended side effects of
E) Federal Trade Commission

Question 55

Which of the following is NOT considered an ethical issue in advertising?

A) creates and perpetuates stereotypes
B) waste of economic resources
C) manipulative
D) offensive and in bad taste
E) plays on people's fears and insecurities

Question 56

Target marketing could be considered unethical when the targeting is concerned not with fulfilling consumers' needs and wants,but rather with exploiting consumers' _____.

A) economic status
B) lack of information
C) vulnerability
D) demographic profiles
E) social status

Question 57

_____ is the most important ethical issue that is unique to the online medium.

A) Privacy
B) Slotting fees
C) Negative publicity
D) Piracy
E) Short filling

Question 58

The Golden Rule ethical test states that _____.

A) you should take only actions that would be viewed as proper by an objective panel of your professional colleagues
B) you would, regardless of the circumstances, always view certain acts or decisions as unethical and others as ethical
C) you should act in a way you would want others to act toward you
D) you would examine the expected outcome of an act, and if it creates more good than bad, then the act is ethical
E) an act is ethical if you would feel comfortable explaining it on television

Question 59

Joan works at a major advertising agency and uses the code of ethical standards promulgated by the American Association of Advertising Agencies to guide her in making ethical decisions when developing ads for her agency's clients.What test is she applying to guide her behavior?

A) Golden Rule test
B) professional ethics test
C) TV test
D) peer test
E) generally-accepted practices test

Question 60

Jose Ortega acts in a way that he would want others to act toward him.He is using the _____ test.

A) utilitarianism
B) Golden Rule
C) professional ethics
D) TV
E) moral idealism

Question 61

In which country has advertising self-regulation flourished?

A) Canada
B) France
C) United States
D) United Kingdom
E) All of these are correct.

Question 62

The advertising clearance process involves which groups of people?

A) advertising agency, advertiser, media, and the audience
B) advertiser, FTC, FCC, and FDA
C) advertiser, lawyers, NAD, and possibly the NARB
D) advertiser, lawyers, FTC, and the NAD
E) advertiser, lawyers, advertising agency, and the media

Question 63

The Bamboozle Corporation was finally indicted for years of deceptive advertising.The FTC required the company to spend $5 million on television commercials over the next six months to rectify any deceptive impressions it created in consumers' minds.In other words,the FTC required Bamboozle Corporation to undertake a(n)_____ program.

A) corrective advertising
B) rectification
C) unfairness removal
D) anti-deception
E) make-good

Question 64

The _____ is the U.S.government agency that has primary responsibility for regulating advertising at the federal level.

A) Food and Drug Administration (FDA)
B) National Advertising Review Board (NARB)
C) Better Business Bureau (BBB)
D) National Advertising Division (NAD)
E) Federal Trade Commission (FTC)

Question 65

_____ is based on the premise that a firm that misleads consumers should have to use future advertisements to rectify the deceptive impressions it has created in consumers' minds.

A) Rectification advertising
B) Unfairness removal
C) Anti-deception advertising
D) Regulated advertising
E) Corrective advertising

Question 66

Which of the following is a step in the advertising clearance process?

A) advertising agency clearance
B) approval from the advertiser's legal department and perhaps also from an independent law firm
C) media approval
D) a and b only
E) a, b, and c

Question 67

Campbell's Soup used glass marbles to displace the chicken,vegetables,and star-shaped noodles in advertisements for it Chicken and Stars soup because,without them,all the solid matter sank to the bottom and consumers couldn't see the "stars." The ad was ruled deceptive because Campbell's did not tell consumers that the soup really did not contain as much meat,vegetables,and noodles as it appeared due to the prop used to photograph the ads.This ad was most likely be considered misleading due to _____.

A) immateriality
B) hyperbole
C) exaggeration
D) omission
E) unreasonableness

Question 68

What did Kraft state as its defense when the FTC judged the ad for Kraft Singles deceptive?

A) The claim made in the ad was not false.
B) Reasonable consumers wouldn't believe the claim regardless of whether it was true or false.
C) The claim was merely puffery and did not state a fact.
D) The claim was immaterial.
E) They agreed the claim made in the ad was false, but other competitors were making the same false claim.

Question 69

The XYZ Brewery Corporation undertook an advertising campaign which appeared to encourage pre-legal-drinking-aged teenagers to consume its high-powered malt liquor.The FTC can take action against XYZ on grounds that the advertising campaign is in violation of the _____ doctrine.

A) substantiation
B) ethics
C) unfairness
D) responsibility
E) deceptive

Question 70

The _____ is the U.S.government agency that has primary responsibility for regulating information on the packages of food and drug products.

A) NARB
B) NAD
C) FTC
D) FDA
E) BBB

Question 71

Which is NOT an element of the definition of unfair advertising?

A) an act or practice that causes or is likely to cause substantial injury to consumers
B) the injury is not reasonably avoidable by consumers
C) misleading from the viewpoint of a reasonable consumer
D) not outweighed by countervailing benefits to consumers or competition
E) All of the above are elements.

Question 72

Advertising of prescription drugs that is directed toward consumers is known as _____.

A) direct marketing
B) direct-to-consumer advertising
C) direct-response advertising
D) balanced-perspective advertising
E) missionary advertising

Question 73

The self-regulatory monitoring of children's television programs and commercials is done by the _____.

A) FTC
B) FDA
C) NAD
D) CARU
E) NARB

Question 74

The FTC's policy on deception is that the act or practice must be considered from the perspective of a _____.

A) reasonable consumer
B) probable consumer
C) competitor
D) government
E) child

Question 75

Elyssa notices an advertisement with information that is contrary to fact.According to the FTC,this is _____.

A) deceptive
B) a misrepresentation
C) misguided
D) material
E) unfair

Question 76

A(n)_____ involves information that is important to consumers and that is likely to influence their choice or conduct regarding a product.

A) reasonable representation
B) material representation
C) factual representation
D) objective representation
E) unfair representation

Question 77

The _____ is a form of self-regulation undertaken by ad media that takes place behind the scenes before a commercial or other advertisement reaches consumers.

A) ad review process
B) advertising clearance process
C) NAD review process
D) NARB review process
E) advertising screening process

Question 78

What are the three basic elements of the FTC's current policy determining whether or not an ad is deceptive?

A) misleading, reasonable consumer, and material
B) misleading, typical consumer, and injury
C) comparative ad, misleading, and reasonable consumer
D) injury, not avoidable, and material
E) injury, reasonable consumer, and false

Question 79

The criteria used to evaluate whether a business act is unfair involves the consideration of whether the act _____.

A) causes substantial injury to consumers, competitors, or other businesses
B) offends public policy as it has been established by statutes
C) is immoral, unethical, oppressive, or unscrupulous
D) a and b only
E) a, b, and c

Question 80

Jake and thousands of others like him purchased a product advertised on TV that claimed instant hair growth with one application.Jake is representative of the many purchasers of this product in that he is highly sensitive about his recent balding.Because the advertised product is ineffective,the FTC would likely consider this a case of _____ advertising.

A) unfair
B) deceptive
C) unreasonable
D) unrepresentative
E) unethical