Deck 6: The Regulatory and Ethical Environment of Promotions

Question 1

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

A) The desire to have products that are supported by advertising encourages companies to offer improved products.
B) Advertising increases the probability of the success of a new product, so it increases the variety of products.
C) The speed and reach of advertising allows for quicker diffusion of innovations.
D) Advertising is a remarkably efficient system for moving demand from one brand to another.

Answer 1

D

Question 2

According to critics of advertising, advertising educates consumers and informs them of the choices they have including product features and benefits and is helpful in comparing one product to another.

Answer 2

False

Question 3

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.

Answer 3

True

Question 4

The NARB is a government agency that has the power to enforce government regulations and create new federal standards regarding unfair or deceptive advertising practices.

Question 5

An advertisement for Ziploc freezer bags that compares this Johnson Family of Companies product with a competing product that is factual is viewed as illegal.

Question 6

Some argue that one of the best aspects of advertising is its contribution to the society's art and culture, sometimes critiquing it and sometimes celebrating it.

Question 7

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

Question 8

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.

Question 9

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.

Question 10

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

Question 11

The argument that "advertising educates consumers" is supported by the claim(s) that

A) advertising provides information consumers need to make informed decisions.
B) by regularly assessing advertising claims, consumers become more educated regarding the features, benefits and functions, and values of products.
C) consumers become more aware of their own tendencies toward being persuaded by certain types of product information.
D) all of these are offered as arguments that advertising educates consumers.

Question 12

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.

Question 13

To judge whether a particular instance of vertical cooperative advertising is a form of unfair competition, you must know if the advertising allowances involved represent hidden price concessions.

Question 14

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

Question 15

Medical research journals have published articles claiming survey data indicate that advertising "caused" young consumers to begin smoking, but all assessments by the FTC from the 1950s to the present indicate that the primary influences on the decision to smoke are family and peers.

Question 16

According to Maslow, when Clorox wipes highlight the germ-harboring aspect of conventional sponges, it is addressing

A) the self-actualizing level of needs
B) the need for love and belonging
C) physiological need for health
D) the esteem need that accompanies keeping a clean house

Question 17

If supermodel Kate Moss endorses a line of Kmart clothing, the FTC requires that she actually use the product.

Question 18

Which of the following is considered by advertising critics to be a con of advertising in society today?

A) advertising provides too much information
B) advertising lowers cost of products
C) advertising creates needs
D) advertising reflects society's desires

Question 19

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.

Question 20

When critics argue that advertising is superficial, the main criticism is that

A) there is too much product information for consumers to process.
B) the product performance information is too complex to understand.
C) ads do not contain enough information on functional features and performance results.
D) when ads highlight the emotionally satisfying features of products they ignore value

Question 21

Stephen Fox, chronicler of advertising history, maintains that

A) advertising didn't cause America's consumption culture; it's just a very visible manifestation of that culture.
B) America's rush to progress and advertising emerged at the same time, so it's impossible to prove that advertising caused it.
C) in portraying brands as symbols of success, advertising creates wants and aspirations that are artificial and selfish
D) advertising created America's consumer culture, and for that, it should be praised.

Question 22

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

A) established the Federal Trade Commission.
B) granted the FTC control over the effects of advertising on competition.
C) allowed the FTC to regulate practices that it considered misleading to consumers.
D) granted industries the right to form self-regulatory organizations.

Question 23

Determining what is ethical or unethical in advertising

A) can be determined specifically from the advertiser's code of ethics.
B) is subject to absolute rules of right and wrong.
C) is an easy question since all advertising is unethical.
D) comes down to personal judgment.

Question 24

Critics of advertising charge that alcohol and tobacco firms are targeting adolescents with ads that make dangerous and addictive products appealing; which of the following is true

A) medical journals have proved that advertising makes adolescents start smoking
B) beer and alcohol makers are oblivious to these concerns
C) repeated research studies since the 1950s have shown that family, friends and peers are the strongest influences on the use of tobacco and alcohol products
D) use of tobacco and alcohol is hereditary

Question 25

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

A) there must be a representation, omission or practice that is likely to mislead the consumer
B) the representation, omission or practice must be judged from the perspective of the consumer
C) the representation, omission or practice must be a "material" one
D) all of these are the essential elements in declaring an ad deceptive

Question 26

Which of the following is true of consumerism

A) Can be traced to 17th-century England
B) Comes from the fact that consumers want a greater voice in the process of product development, distribution and information dissemination
C) Consumers create pressures on firms through boycotts of brands as well as organizing to bring about regulation
D) All of these are aspects of consumerism

Question 27

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?

A) advertisers are showing more sensitivity as consumers have raised their awareness of issues that offend them
B) advertising now recognizes that stereotypes are often unfair and disrespectful
C) advertising is an evolving form of art
D) all of these

Question 28

Ethics is defined as

A) that which can be shown to be truthful.
B) the moral standards and principles by which behavior is judged.
C) the legal limits placed on personal practices.
D) the timeless, unwavering standard of what is good.

Question 29

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?

A) advertising affects programming
B) advertisers deceive via subliminal stimulation
C) advertising is often offensive
D) advertising perpetuates stereotypes

Question 30

Which of the following are regulatory issues in PR, direct marketing and e-commerce?

A) privacy, spam, sweepstakes and telemarketing practices
B) premium offers, trade allowances and product/brand placement
C) image appropriation, copyright infringement, defamation, slander and libel
D) all of these are part of regulatory issues in direct marketing, PR and e-commerce

Question 31

You have been asked to determine whether an advertisement is deceptive or not. It is important to remember that

A) puffery is acceptable only if the claims made are provable.
B) claims that are literally true still may be deceptive.
C) just because a fact is misrepresented does not mean the advertisement is deceptive.
D) explicit deception must occur for an advertisement to be considered deceptive.

Question 32

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

A) until every ad features this kind of diversity, it's still not enough.
B) it's just a more modern form of stereotyping.
C) people of any type should not appear in advertisements.
D) now young white males are the victims of stereotyping.

Question 33

In terms of advertising to children, which are areas of great concern?

A) children are inexperienced consumers and therefore more naively persuadable
B) creating demand in children leads to parent-child conflicts
C) many kids programs featuring commercial products are simply long advertisements
D) all of these are areas of great concern

Question 34

Some argue that a "pro" of advertising is that it fosters a diverse and affordable mass media; if so, which of the following is (are) true?

A) newspapers, magazines, TV and Radio stations are supported by advertising - which ensures an informed democracy
B) advertising forces materialistic consumption that should be appreciated and encouraged.
C) ads themselves are more crass and offensive than in earlier times with fewer media.
D) addresses animalistic needs to a greater degree than before

Question 35

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

A) more successful than the efforts of industry groups and consumer groups.
B) more successful than the efforts of industry groups, but not as successful as those of consumer groups.
C) more successful than the efforts of consumer groups, but not as successful as those of industry groups.
D) not as successful as the efforts of industry groups and consumer groups.

Question 36

This act does not outlaw all unsolicited email, but rather targets fraudulent, deceptive, and pornographic messages, which is estimated to make up about two-thirds of all commercial unsolicited email. Violators face jail time and fines up to $1 million.

A) Regulatory Reference Act
B) The Wheeler Lea Act
C) Can Spam Act
D) Free Trade Act

Question 37

Vertical cooperative advertising is usually legal, except when

A) there is a representation, omission, or practice that is likely to mislead.
B) bogus advertising allowances are given, amounting to hidden price concessions
C) large mega-retailers are involved
D) all of these are correct

Question 38

Which one of the following is a controversial product other than tobacco or alcohol

A) automobiles because auto accidents kill so many each year
B) fast food because critics claim it causes obesity
C) prescription medicines because they are overused
D) low fat products because they lull consumers into complacency about their cholesterol

Question 39

The desire to restrict advertising to children is based on the concern that

A) advertising promotes superficiality.
B) advertising promotes values founded in material goods and consumption.
C) children are inexperienced consumers and are easy prey for the sophisticated persuasions of advertisers.
D) all of these.

Question 40

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

A) unethical
B) deception
C) puffery
D) none of these

Question 41

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?

A) The Federal Trade Commission
B) The Federal Communications Commission
C) The Food and Drug Administration
D) The Securities and Exchange Commission

Question 42

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) The claim of 20 percent extra casting distance proves to be unsubstantiated. Who is held responsible for making that claim?

A) The president of Castaway Sports
B) The corporation that manufactures the Lightning Rod
C) The agency that produced the spots
D) The celebrity who made the claim in the spots

Question 43

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 ____.

A) unethical
B) illegal
C) deception
D) puffery

Question 44

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) A quote from the site states, "Consumerism encourages people to buy for the sake of buying, with little regard for the true utility of what is bought." Which one of the following is not representative of the point of view of the writer?

A) Advertising creates false needs instead of fulfilling existing needs.
B) The emotional benefit one receives from a product is sometimes more important to the consumer than functional attributes
C) Only functional benefits of a product are meaningful.
D) Consumers are relatively easy to seduce into buying things they don't need.

Question 45

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

A) the Consumer Federation of America.
B) the Federal Communications Commission.
C) the National Advertising Division of the Better Business Bureau.
D) the National Advertising Review Board of the Better Business Bureau.

Question 46

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,

A) actual deception in the marketplace does not have to be proved for the spots to be considered deceptive.
B) failure to disclose important facts cannot be the basis for finding the spots deceptive.
C) misrepresentation of fact, in and of itself, is not enough for the spots to be considered deceptive.
D) if the claims are literally true, the spots cannot be ruled deceptive.

Question 47

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) Organizations like "Adbusters" encourage consumers to be proactive and contact government agencies to enforce regulations. This organization would want you to contact the FTC, because it:

A) is the most powerful government agency regulating advertising.
B) is a consumer-regulated board.
C) is a crucial participant in advertising self-regulation.
D) is a state organization directly tied to the federal government.

Question 48

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

A) taste is not a personal and subjective evaluation.
B) fast food must be considered a highly controversial product category.
C) small segments of the population can cause considerable controversy over matters of taste.
D) the concept of political correctness has not been embraced by franchise owners.

Question 49

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

A) a yet-to-be-proved-effective tool called a boycott.
B) the activities of one of the three most powerful consumer organizations in the United States.
C) a group of consumers functioning as a regulatory agent.
D) a recently emerging phenomenon called consumerism.

Question 50

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) To meet FTC standards for the use of a celebrity endorser,

A) the celebrity must be considered an expert in the field.
B) the celebrity must actually use the product.
C) the FTC must approve the spots before they are run.
D) the celebrity must actually write the statements he or she makes within the advertisement.

Question 51

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 site urges people to buy the goods that they need at small businesses and from small manufacturers. This practice

A) reduces the effectiveness of emotional appeals in advertising.
B) undermines the presumed monopoly power that big businesses with big ad budgets acquire through advertising is
C) eliminates the need for advertising regulation.
D) expands existing demand, rather than shuffling it.

Question 52

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?

A) advertising is superficial and silly
B) advertising is a poor method to inform consumers
C) advertising wastes resources and money
D) advertising is often offensive

Question 53

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) Some of the statements made by Adbusters echo the words of advertising historian Stephen Fox when he wrote, "One may build a compelling case that American culture is--beyond redemption--money-mad, hedonistic, superficial and rushing needlessly down a track called Progress." Fox concluded that

A) advertising must be held accountable for its transgressions.
B) all cultures are as consumption oriented as America.
C) terms like money-mad, hedonistic, and superficial were used to describe America before the dawn of national advertising.
D) advertisers are hidden persuaders who serve a malevolent purpose.

Question 54

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.

A) NAB's Code Authority
B) American Association of Advertising Agencies
C) Better Business Bureau
D) Federal Trade Commission

Question 55

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) The slogan for the spot, "Lightning Rods--the finest rods ever cast," would most likely be considered by courts in the United States as

A) false and misleading.
B) a superlative, and therefore it must be provable.
C) puffery, and therefore it doesn't need to be proved or disproved.
D) unethical.

Question 56

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

A) advertising actually saves time, because people don't have to search as hard to find information about products they desire.
B) the extra time spent processing advertising is offset by increased enjoyment of the products purchased.
C) most television advertisements contain a great deal of functional information.
D) people go out of their way to see advertising; therefore, it must play a positive role in their lives.

Question 57

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?

A) advertising fosters a diverse and affordable mass media
B) advertising is very artistic in its nature
C) advertising reflects the priorities of a society
D) advertising fosters more rapid new product success, thus lowering the cost

Question 58

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) Adbusters faults cigarette companies for targeting billboard campaigns at ethnic and minority groups. In the same vein, advertisers are criticized as portraying women:

A) as superior to men
B) as homemakers or objects of desire.
C) as the head of government agencies.
D) as intermediate formularies for agencies.

Question 59

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

A) unfair methods of competition.
B) the advertising of food and medical products.
C) the disclosure of annual securities reports.
D) fraud on radio and television.

Question 60

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

A) the need for long-lasting, high-quality products no longer exists in today's fast-paced world.
B) research has shown that personal happiness increases along with consumption.
C) advertising is not creating a materialistic culture; it is a manifestation of that culture
D) this wrongly assumes that America is a highly consumption-oriented culture.

Question 61

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.

Question 62

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

Question 63

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.

Question 64

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

A) Defamation
B) Internalization
C) Libel
D) Slander

Question 65

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

Question 66

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) Another student said, "Hey, I don't like television advertising anymore than anyone else. But if I don't want advertising on my TV programming, I have to go out and rent a video or buy a pay-per-view program. I just can't afford to do that everyday." Which of the following pros of advertising is this comment most likely based on?

A) advertising lowers the cost of products
B) advertising fosters a diverse and affordable mass media
C) advertising reflects society's priorities
D) advertising is a source of fulfillment

Question 67

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.

Question 68

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 ____.

A) puffery
B) monopoly advertising
C) cooperative advertising
D) comparative advertising

Question 69

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 said, "I am sick and tired of seeing nothing but supermodels advertising women's clothes. Nobody I know looks like that! They don't give me any indication of how I might look in their clothes." Which of the following cons of advertising is this comment most likely based on?

A) advertising is intrusive
B) advertising wastes resources
C) advertising creates needs
D) advertising is superficial

Question 70

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?

A) advertising addresses a variety of human needs
B) advertising lowers the cost of many products
C) advertising reflects society's priorities
D) advertisers are showing much more sensitivity