Deck 36: Ethics and Regulations in Marketing and Advertising

Question 1

Which of the following is NOT likely to be an issue for consideration by a marketer of a new product?

A) Ensuring customers are not mislead by promotional material.
B) Product safety standards.
C) Protection of the intellectual property rights in the product.
D) Effectiveness of the product.

Answer 1

D

Question 2

Which of the following is an example of 'referral selling'?

A) Offering customers a chance to win a prize for themselves and a friend.
B) Offering gifts with a purchase as part of a promotional activity.
C) Paying a spotter's fee to a person as a commission for introducing new business.
D) Offering a fee or prize to a customer which is conditional on them referring new customers who also make a purchase.

Answer 2

D

Question 3

Registration of a design provides protection for up to 70 years.

Answer 3

False

Question 4

Which of the following is a reason a business might choose to act ethically?

A) To avoid government regulation.
B) To avoid adverse market reaction.
C) To increase public confidence in the business.
D) All of the above

Question 5

An alternative to registration of a patent would be to protect the idea using the tort of passing off.

Question 6

Which of the following is the correct definition of 'predatory pricing'?

A) Selling a product at a low price with the intention of driving competitors out of the market.
B) Taking advantage of a change in market circumstances to increase prices.
C) Charging a supplier a fee for access to the shelf space of a retail store.
D) Inducing a customer to sign an open ended periodic payment authority.

Question 7

The distinction between the letter and the spirit of the law is largely a legal problem.

Question 8

A code of conduct is a formal set of guiding principles designed to ensure ethical behavior.

Question 9

Which of the following statements about intellectual property rights is NOT correct?

A) A trade mark can be protected by registration or the tort of passing off.
B) A standard patent provides protection for 20 years.
C) A design must be registered in order to be protected.
D) Copyright protection arises automatically when the work is made.

Question 10

In free market economies, the primary regulator of economic activity is considered to be competition.

Question 11

The question of ethics in a business context is relevant to:

A) Identifying the boundaries between acceptable and unacceptable behavior.
B) Avoiding liability for breach of the law.
C) Delivering a profit to shareholders.
D) All of the above.

Question 12

Giving and receiving gifts raises ethical issues because:

A) It reduces the profits of the giver of the gift.
B) It reduces economic activity.
C) There may be an expectation that something will be done in return.
D) It gives an unfair advantage to the receiver of the gift.

Question 13

The role of the marketer is to make potential customers aware of a product.

Question 14

Which of the following is the correct definition of a 'slotting allowance'?

A) Selling a product at a low price with the intention of driving competitors out of the market.
B) Taking advantage of a change in market circumstances to increase prices.
C) Charging a supplier a fee for access to the shelf space of a retail store.
D) Inducing a customer to sign an open ended periodic payment authority.

Question 15

Which of the following is the correct definition of 'price gouging'?

A) Selling a product at a low price with the intention of driving competitors out of the market.
B) Taking advantage of a change in market circumstances to increase prices.
C) Charging a supplier a fee for access to the shelf space of a retail store.
D) Inducing a customer to sign an open ended periodic payment authority.

Question 16

Competitive conduct in the market may be considered unacceptable if it:

A) Reduces the competitiveness of the market.
B) Discredits a competitor.
C) Unfairly targets inexperienced and vulnerable consumers.
D) All of the above.

Question 17

Which of the following industries attract greater scrutiny due to the particular ethical issues they raise?

A) The tobacco industry.
B) The alcohol industry.
C) The fast food industry.
D) All of the above.

Question 18

The marketing mix comprises the elements of product, price, promotion and profit.

Question 19

Problems which could potentially be faced by the marketer when promoting a new product include:

A) Legal action by competitors to protect their reputation or intellectual property.
B) Possible breaches of consumer protection legislation.
C) Legal action by consumers for fraudulent or negligent misrepresentation.
D) All of the above.

Question 20

Packaging is an important issue for consideration by a marketer because:

A) It must be designed so as not to cause injury.
B) It must not mislead consumers.
C) It must be different from that of competitors so that consumers are not confused.
D) All of the above.

Question 21

The rise of ambush marketing reflects the increasing value of sponsorship of major events.

Question 22

Which of the following is NOT protected by the law of copyright?

A) People and their images.
B) Concepts, techniques and slogans.
C) Ideas and information.
D) All of the above.

Question 23

The National Measurement Institute is the sole trade measurement authority in Australia.

Question 24

Power in the market place is a recurring factor in the discussion of ethical marketing practices.

Question 25

Injurious falsehood involves a misrepresentation by a person in the course of trade that their goods or services are connected with another with the intention to deceive potential customers.

Question 26

Which of the following statements about ambush marketing is NOT correct?

A) Ambush marketing is the practice of marketing a product or service so as to create the impression of an association, which does not exist, with a major event.
B) Global events are often protected by specific anti-ambush legislation.
C) The size of the audience of a major global event makes sponsorship an extremely valuable commodity.
D) Ambush marketing in Australia is regulated by uniform legislation passed in 2014.

Question 27

Which of the following is NOT an area of tort law that can directly impact on advertising?

A) Defamation.
B) Injurious falsehood.
C) Passing off.
D) Negligent misrepresentation.

Question 28

Which of the following is the best description of a 'pyramid scheme'?

A) A multi-level marketing scheme that rewards participants for products sold.
B) A distribution chain involving retailers and their customers.
C) A scheme based on a representation that a person has agreed to acquire goods or services when that is not the case.
D) A scheme whereby participants are invited to sell products and to receive a reward or benefit for introducing new participants to the scheme.

Question 29

Defamation involves a false and harmful suggestion disparaging the quality of another person's goods or services.

Question 30

Which of the following statements about the Spam Act 2003 (Cth) is NOT correct?

A) The Act does not apply to voice messages on mobile phones.
B) The Act does not apply to registered charities, political parties or educational institutions.
C) The Act defines an electronic message as an email.
D) The Act prohibits sending commercial electronic messages without the recipient's consent.

Question 31

Marketing techniques are regulated by:

A) The common law.
B) Restrictive Trade Practices legislation.
C) The Australian Consumer Law.
D) All of the above.

Question 32

The case of Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 is authority for the principle that there is no contract between an advertiser and a consumer.

Question 33

Which of the following is the best description of 'bait advertising'?

A) Advertising goods or services that they do not intend to supply.
B) Advertising a product or service at a cheap price only to tell customers it is no longer available and offering another at a higher price.
C) Accepting payment for goods or services that are different from those which were ordered.
D) All of the above.

Question 34

Management social responsibility practices could be seen as a response to the rise of ethical consumerism.

Question 35

Which of the following is NOT one of the formal processes that have been established as a method of self regulation of the advertising industry?

A) The Advertising Federation of Australia requires members to commit to a Statement of Ethics and Code of Practice.
B) The Advertising Standards Board hears complaints about offensive advertisements.
C) The Advertising Claims Board prosecutes advertisers who breach the law.
D) The Australian Association of National Advertisers Code of practice applies to all forms of advertising in Australia.