MKTG373 - Chapter 20

Mars Inc. includes the disclaimer "Warning! This product has not been pasteurized and must be used with caution" on all its juice products. This inclusion is an example of: a. deceptive advertising b. puffery c. affirmative disclosures d. advertising substantiation e. consent orders.

Affirmative Disclosures

The ________ is the division of the Federal Trade Commission (FTC) that analyzes the impact of government regulation on competition and consumers: a. Bureau of Economics b. Trade Regulation Bureau c. National Advertising Review Board d. Bureau of Compliance e. Bureau of Reconstruction

Bureau of Economics

Which of the following statements is true of the Children's Advertising Review Unit (CARU)? : a. CARU's Self-Regulatory Guidelines for Children's Advertising are restricted to truthfulness and accuracy to address children's developing cognitive abilities. b. CARU's activities include the review and evaluation of child-directed advertising in broadcast media exclusively. c. CARU recognizes that the special nature and needs of a youthful audience require particular care and diligence on the part of advertisers. d. The majority of claims reviewed under the CARU program are for direct-response TV ads including long- and short-form infomercials aimed at children.

CARU recognizes that the special nature and needs of a youthful audience require particular care and diligence on the part of advertisers.

True or False? Regulatory concerns do not play a major role in the advertising decision-making process.

False

True or False? The advertising industry prefers government intervention to self-regulation for controlling advertising abuses.

False

Which of the following is a federal agency that controls advertising?: a. Food and Drug Administration b. Children's Advertising Review Unit c. National Review Board d. Better Business Bureau e. National Advertising Review Board

Food and Drug Administration

The Network Advertising Initiative (NAI) is a(n): a. self-regulatory code developed by companies that collect Internet usage data. b. advisory board for the National Advertising Division c. tobacco-industry group that wants to modify regulations against advertising of its products d. industry-developed code to monitor advertising to children e. industry-wide code that prohibits telemarketing calls after midnight and before 6 a.m.

Self-regulatory code developed by companies that collect Internet usage data.

No commercial can run without approval from a network's ________ department: a. National Review Board b. Standards and Practices c. Food and Drug Administration d. Better Business Bureau e. Children's Advertising Review Unit

Standards and Practices

The Advertising Self-Regulatory Council's mission is to: a. sustain high standards of truth and accuracy in national advertising b. ensure that all kinds of promotional media are used equally for advertising purposes c. increase television advertising in remote areas of the United States d. ensure that no surrogate advertising is used for the advertising of tobacco products e. promote Internet and interactive advertising.

Sustain high standards of truth and accuracy in national advertising.

Which of the following statements is true of the use of puffery?: a. Firms that are found guilty of the use of puffery are banned from using that particular medium. b. Puffery is the inclusion of objective opinions in ads. c. The act of puffery does apply to sales presentations. c. The use of puffery in ads is common. e. Most state governments have banned the use of puffery in television ads.

The use of puffery in ads is common.

True or False? The NAD, CARU, ERSP, and the Online Interest-Based Advertising Accountability Program are staffed primarily by attorneys.

True

True or False? The U.S. Postal Service has control over advertising involving the use of the mail and ads that involve lotteries, obscenity, or fraud.

True

The ________ empowers the Federal Trade Commission (FTC) to issue a cease-and-desist order: a. Children's Televisions Act b. Wheeler-Lea Amendment c. International Consumer Protection and Enforcement Network d. Warner-Lambert Act e. Organization for Economic Co-operation and Development Consumer Policy Toolkit

Wheeler-Lea Amendment

A promotion is considered a lottery if: a. the odds of winning are not against the consumer b. the participant is not required to give up something of value c. a consideration, such as making a purchase, is present d. winning a prize depends on a skill e. a prize is not offered.

a consideration, such as making a purchase, is present.

Advertising practices considered unfair include: a. statements that are misunderstood by the public due to their lack of knowledge b. trade practices that could reasonably be avoided by customers c. claims that might exploit children and older adults d. claims made with prior substantiation e. inclusion of irrelevant information in ads.

claims that might exploit children and older adults.

The DISCUS ban, which effectively banned hard liquor ads on national television for five decades, is an example of: a. government oversight b. industry self-regulation c. government regulation d. industry regulation.

industry self-regulation.