chapter 2 marketing adversiting

The ________ has indirect control over advertising through its authority to license or revoke the license of all broadcasting stations.

Federal Communications Commission

How has the U.S. Supreme Court intervened in the rights of advertisers under the First Amendment?

It has offered significant protection for truthful commercial speech.

Which of the following statements about the social impact of advertising is true?

Most people tolerate ad clutter as the price for free TV and an information-rich Internet.

Which of the following statements about the Food and Drug Administration (FDA) is true?

The FDA has authority over the labeling of cosmetics, drugs, and vitamin supplements.

Which of the following statements about how advertising affects price is most likely true?

The consumer who buys the product pays for the advertising.

Which of the following statements is true about cease-and-desist orders?

They prohibit further use of the offending advertisement.

Which of the following statements about deceptive advertising is true?

To be deceptive, advertising claims must be factually false or convey a false impression.

Through the issuance of ________, the government provides incentives to invent, invest in, and disclose new technology.

patents

The FTC defines ________ as any ad that contains a misrepresentation, omission, or other practice that can mislead a significant number of reasonable consumers to their detriment.

deceptive advertising.

Which of the following would be an example of subliminal advertising?

airbrushing naked figures into ice cubes in a liquor ad

Under current law, the only product claims that are considered deceptive are those that

are factually false.

Nike's Air Jordan XX3, the 23rd edition of the series of shoes endorsed by retired basketball star Michael Jordan, differs from its predecessors because it is the first basketball shoe shaped by what Nike calls "Nike Considered," an approach to design that favors environmentally preferable materials, reduces toxic chemicals, and curbs waste. By adopting such environmentally supportive standards to make its products, Nike is

behaving in a socially responsible fashion.

Television commercials for Progressive Insurance often list Progressive's rates next to the rates of other major insurance companies. This is an example of ________ advertising

comparative

Verizon, a provider of cell phone service, frequently runs TV ads that feature a series of maps. One map shows how much of the country is covered by Verizon's service. The other maps show how much of the country is covered by Verizon's major competitors. These commercials are an example of

comparative advertising.

An advertiser accused of deceptive or unfair advertising may sign a(n) _____, which is a document that states that the advertiser agrees to stop the objectionable advertising, but does not admit to any wrongdoing.

consent decree

When the Federal Trade Commission determines that an ad is deceptive or unfair, it can

convince the advertiser to sign a consent decree.

Latisha just wrote her first novel, a steampunk science fantasy for young adults. Which of the following protects Latisha's work?

copyright

Two companies, Le Shuttle and P&O European Ferries, provide Europeans with the ability to cross the English Channel. An advertisement for Le Shuttle claimed it was more popular with travelers than P&O European Ferries. P&O European Ferries lodged an objection with a European regulatory agency and pointed out that it had carried 1.4 million cars in the previous year compared to Le Shuttle's 1 million. P&O European Ferries most likely wanted Le Shuttle to run ________ advertising.

corrective

The Federal Trade Commission has filed a complaint against Provide Commerce, the parent company of Pro-Flowers, for "false and misleading" advertising. Pro-Flowers claims that it ships inventory "directly from the fields." The ads imply that the flowers are not picked until they are ordered. Pro Flowers actually stores flowers in refrigerated warehouses and ships from these warehouses. The FTC can most likely order Pro-Flowers to run ________ and inform its customers that its flowers do not come fresh from the field.

corrective advertisements

A government agency in the United Kingdom reprimanded Safeway, a UK-based supermarket chain, because it distributed a leaflet titled "More reasons not to shop at Morrisons." (Morrisons is one of Safeway's primary competitors in the UK). In the leaflet, Safeway depicted two shopping receipts, one for Safeway and one for Morrisons. The Safeway receipt claimed goods purchased at Safeway were much cheaper than the same goods purchased at Morrisons. Morrisons said that the goods on the imaginary receipt were not typical purchases and that the reason they were cheaper on the Safeway receipt was that the goods were on sale in the Safeway store. The FTC would have most likely found Safeway guilty of

deceptive advertising.

Olive oil is usually advertised using terms such as "pure olive oil" and "extra virgin," a phrase that denotes the highest grade of olive oil. However, studies have shown that olive oil is one of the most adulterated products on the market. Many of the oils sold in grocery stores are of lower quality than advertised or, even worse, are diluted with other products such as sunflower oil. Olive oil producers who claim to sell extra virgin, pure olive oil but really provide an impure product have engaged in

deceptive advertising.

The Federal Trade Commission (FTC) regulates the marketplace by

eliminating practices that are deceptive or unfair.

Deceptive advertising occurs when a consumer is "unjustifiably injured" or there is a "violation of public policy."

false

Despite the increasing number of women in executive positions in the labor force, most modern advertisers have not changed their stereotypical depictions of women as subservient housewives and sex objects.

false

Most advertisers welcome attention from consumer advocate groups because they make 25) helpful suggestions but rarely succeed in having deceptive ads pulled.

false

The Better Business Bureau advances the interests of business, so it often defends agencies against charges of deceptive advertising.

false

The Better Business Bureau operates primarily at the national level and is funded by the dues of media groups.

false

The U.S. Supreme Court has ruled that "commercial speech" is not entitled to any First Amendment protections.

false

The abundance principle states that advertising has little effect on a wealthy economy.

false

The firms eliminated by competition tend to be those that served the consumers most efficiently.

false

The uniform nature of advertising regulation in the United States ensures that advertisers easily understand what is required to comply with regulations.

false

Uniform newspaper advertising codes make it easy for advertisers to ensure that their ads meet all legal and ethical requirements.

false

Consumer advocate groups are most likely to

investigate advertising complaints received from the public.

Good Housekeeping magazine places its "Seal of Approval" on all the products advertised in it. If any of the products are later found to be defective, Good Housekeeping promises to refund the money paid for the products. This kind of careful screening

is a way for a medium to monitor its advertisements.

A trademark

is any word, name, or symbol that identifies one particular product or line of products from a single source.

The National Advertising Division (NAD) of the Advertising Self-Regulatory Council (ASRC)

monitors advertising practices and reviews complaints about advertising from consumers.

According to the owner of NPC & Associates, Maryland's largest

perpetuating stereotypes.

Lori and Juana are going to the mall. Lori wants to buy a pair of athletic shoes, and Juana wants to buy a pair of Reebok cross-trainers. Lori illustrates ________ demand while Juana illustrates ________ demand.

primary; selective

The primary purpose of the Advertising Self-Regulatory Council is to

promote and enforce standards of truth, accuracy, taste, morality, and social responsibility in advertising.

Which of the following is a method advertisers use to show their social responsibility?

providing pro bono work to nonprofit groups

When the city of Pensacola, Florida, advertises itself as "the perfect place for the perfect Florida vacation," it is using

puffery.

According to Wilson Bryan Key, subliminal advertising

relies on embedded messages that seduce consumers into making purchases.

Externalities are best described as

social costs

Ever since the Napoleonic Wars, the British have used the derogatory term frogs to refer 44) to the French. When the London-based Institute Français advertised French-language courses at all levels from beginners to advanced students, it pictured the development of a frog in stages from egg through tadpole to full maturity. This would be an example of

stereotype perpetuation.

Which of the following is the largest of the U.S. business-monitoring organizations?

the Better Business Bureau

A magazine ad states, "Oral-B Professional Care 8850 rechargeable toothbrush removes up to 97% of plaque from hard-to-reach areas." Which federal agency would have the authority to determine if this claim was correct?

the Food and Drug Administration

Which federal agency would have the authority to deal with the fact that a brand of hotdog marked "low fat" contains only 10 percent less fat than regular hotdogs?

the Food and Drug Administration

With respect to offensiveness in advertising, Abercrombie & Fitch ads have frequently been criticized for using overly sexualized imagery. Experts would most likely agree that the ultimate regulator of such ads is the fact that

the marketplace has the ultimate veto power on the success or failure of such ads.

Adherence to ethical and socially responsible principles is the moral obligation of advertisers.

true

Advertising can add value to a brand by educating customers about new uses for a product.

true

Critics argue that the proliferation of new media has worsened the problem of too much media.

true

In some cases, the Advertising Self-Regulatory Council (ASRC) is more effective than the court system in handling advertising disputes.

true

NBC's stylized peacock logo is an example of a trademark.

true

One criticism of advertising is that ads are so powerful that consumers are helpless to defend themselves against the temptations and appeals of the ads.

true

The FTC may require corrective advertising for an ad that is deemed deceptive or unfair.

true

The Nutritional Labeling and Education Act (NLEA) sets strict legal definitions for terms such as light and low fat as used in advertising food products.

true

The broadcast standards department at a network or affiliated station approves and rejects commercials.

true

The economic effect of advertising triggers a chain reaction of hard-to-predict economic events.

true

When Miller Brewing advertises that its Miller 64 brand of beer has fewer calories than Bud Light, Miller Brewing is using comparative advertising.

true

When an ad states that chicken soup made with Swanson chicken broth "tastes as good as Grandma's," the advertiser is using puffery.

true

When an advocacy group organizes a boycott of a company that produces unsafe products, that is an example of consumerism.

true

While most children and parents are still joint consumers, more and more children are becoming sole decision makers about which products they want.

true

A complaint was filed with the Federal Trade Commission (FTC) that accused the film industry of regularly advertising R-rated movies during television shows most popular with children. The FTC most likely investigated to see if the film industry was guilty of

unfair advertising.

Adolph Coors Co. ran an ad that featured a purported taste test between Coors's Aspen Edge and Anheuser-Busch's Michelob Ultra. A taste tester downed a glass of Aspen Edge and took only a sip of Michelob Ultra. A print version of the ad said, "Beer drinkers agree that Aspen Edge has more taste than Michelob Ultra." Coors was forced to remove the television advertisements after Anheuser-Busch said it made unsubstantiated claims about consumer preferences. Anheuser-Busch most likely

wanted research data that supported Coors's claim.

Much of the state legislation that deals with advertising is based on the

"truth-in-advertising" model developed by Printer's Ink.

Which of the following statements about consumer privacy issues is most likely true?

According to the Fair Information Practice Principles, Internet companies must clearly post their privacy policies.

Which statement about how advertising affects competition is true?

Advertising by large firms tends to have a limited effect on small firms.

In declining markets, what effect does advertising have on primary demand?

Advertising can slow the rate of product decline somewhat.

Which of the following is a common way that advertising increases the value of a product?

Advertising makes the product better known and thus more desirable.

To promote responsible children's advertising and to respond to public concerns, the Council of Better Business Bureaus established the

Children's Advertising Review Unit (CARU).

Suppose that the U.S. economy is going through a severe recession. Which of the following statements correctly describes the role of advertising expenditures in a recession?

During a recession, advertising expenditures help businesses protect their market shares.

________ means doing what the advertiser and the advertiser's peers believe is morally 46) right in a given situation.

Ethical advertising

Which of the following lines from an advertisement is an example of puffery?

Sleeping on our mattress is like floating on a cloud.

________ advertising occurs when a consumer is "unjustifiably injured" or there is a "violation of public policy."

Unfair

Which theory states that advertising allows companies to compete more effectively for consumer dollars and keeps consumers informed of their selection alternatives if the economy produces more goods and services than can be consumed?

abundance principle

When Mei looked at her can of paint remover, she saw a notice that read, "Use in a well-ventilated place. Avoid inhaling the fumes from this product, which can damage the lungs and the nervous system." Which term best describes this label information?

affirmative disclosure

Socially responsible advertisers

do what society views as best for the welfare of people in general.

The abundance principle states that in an economy that produces more goods and services than can be consumed, advertising

informs consumers of their alternatives.

Which of the following images best describes the chain reaction of economic events that takes place once a company begins to advertise?

the opening break shot in billards

According to marketing professionals, advertising promotes a higher standard of living, subsidizes the arts, and supports freedom of the press.

true