Chapter 14 Sample Questions
Hedonism is a philosophy that: A) involves maximizing pleasure and minimizing pain. B) offers a version of philosophy based on the Golden Rule, which means do unto others what you would have them do unto you. C) involves balancing a variety of urges throughout a person's life. D) offers guidelines regarding right and wrong as well as what is acceptable and what is not acceptable, within a geographic area.
A
If Coca-Cola runs an advertisement that suggests the company sponsors the Super Bowl when it does not, which form of ambush marketing is being used? A) Allusion marketing B) Incidental marketing C) Distractive marketing D) Saturation marketing
A
The Wheeler-Lea Amendment to the FTC Act: A) regulates excessive advertising to children. B) prohibits deceptive and misleading advertising. C) prohibits puffery and comparative advertising. D) sets the substantiation requirements that an ad must meet when claims are made about a product.
B
If a consent agreement cannot be reached with a company, the Federal Trade Commission then issues a(n): A) cease and desist order. B) corrective advertising directive. C) appeal to the Court of Appeals. D) administrative complaint.
D
If a firm suggests or hints that it is associated with a major sporting event when it is not, it is: A) stealth. B) direct ambush. C) incidental ambush. D) indirect ambush.
D
The funeral industry was sanctioned by the FTC in 1984 and 1994 for practices common in the industry that the FTC believed were not fair to consumers. To correct these misleading practices, the FTC issued a: A) cease and desist order. B) consent order. C) corrective advertising order. D) trade regulation ruling.
D
Which agency monitors websites that involve children younger than 13 years of age? A) National Advertising Review Board B) Federal Communications Commission C) National Advertising Division D) Children's Advertising Review Unit
D
Identify the primary concerns and criticisms of advertising.
1. Advertisements cause people to buy more than they can afford. 2. Advertising overemphasizes materialism. 3. Advertising increases the costs of goods and services. 4. Advertising perpetuates stereotyping of males, females, and minority groups. 5. Advertisements often make unsafe products, such as tobacco and alcohol, seem attractive. 6. Advertisements are often offensive. 7. Advertising to children is unethical.
A brand's attempt to associate itself with a team or event without buying the official rights to do so is: A) stealth marketing. B) ambush marketing. C) brand infringement. D) puffery.
B
A form of law based on religious teachings is _______ law. A) moral B) theocratic C) civil D) common
B
Although there are many disagreements about what is right and wrong, an overriding constant may be that ethical actions, moral correctness, and social responsibility all boil down to: A) common sense. B) religious beliefs. C) the legal system. D) materialistic attitudes.
A
If Megan wants to know if people have complained about a particular health club being unsafe or unclean, she should contact the: A) National Advertising Division. B) Federal Trade Commission. C) Better Business Bureau. D) National Advertising Review Board.
C
Puffery is: A) a deliberate attempt to mislead and deceive. B) any illegal marketing activity. C) increased product prices to cover advertising costs. D) an exaggerated claim with no overt attempt to mislead or deceive.
D
Identify the five major federal government agencies that deal with some aspect of marketing as its primary responsibility.
1. Food and Drug Administration-regulates and oversees the packaging and labeling of products and the promotion of drugs. 2. Federal Communications Commission-regulates television, radio, and the telephone industry. 3. U.S. Postal Service-has jurisdiction over all mailed marketing materials. 4. Bureau of Alcohol, Tobacco, and Firearms-oversees the sale and distribution of alcohol, tobacco, and firearms. 5. Federal Trade Commission-oversees antitrust situations and is responsible for regulating the advertising industry, especially investigating false and deceptive advertising.
A form of law based on a broad set of legal principles and decisions made based on legal codes that have been written over time is ________ law. A) moral B) theocratic C) civil D) common
C
A form of law present in many European countries is ________ law. A) moral B) theocratic C) civil D) common
C
A trade regulatory ruling by the Federal Trade Commission applies to: A) wholesalers. B) international companies. C) an industry. D) retailers.
C
An advertisement or communication is deemed to be deceptive or misleading when: A) the misrepresentation induces anyone or someone to make a purchase. B) a substantial number of people make a purchase or are influenced by the advertisement. C) a substantial number of people or the "typical person" is left with a false impression or misrepresentation that relates to the product. D) a competing firm makes the same claim.
C
An appeal of a decision by the NAD goes to the: A) United States Court of Appeals. B) Federal Trade Commission. C) National Advertising Review Board. D) Federal Communications Commission.
C
Business ethics are: A) beliefs or principles that individuals hold concerning what is right and what is wrong. B) moral principles that individuals hold concerning what is right and what is wrong. C) moral principles that serve as guidelines for both individuals and organizations. D) beliefs or principles that serve as guidelines for both individuals and organizations
C
A form of law based on local customs, traditions, and precedents is _______ law. A) moral B) theocratic C) civil D) common
D
Although giving or receiving bribes in business-to-business interactions is illegal in the United States, in some countries, such as France and Germany, bribes are: A) permitted for international firms doing business in France or Germany. B) permitted for French- or German-owned companies. C) accepted if it involves a contract with the government, but not allowed for companies doing business with each other. D) accepted, and companies may even be able to deduct them as business expenses on their taxes.
D
Concerns and criticisms regarding advertising include all of the following except advertising: A) to children is unethical. B) is often offensive. C) perpetuates stereotyping of males, females, and minority groups. D) leads to greater levels of governmental regulation.
D
Critics of the beer industry and marketers agree on all of the following statements about alcohol and underage individuals except: A) many beer commercials encourage underage drinking. B) many beer commercials encourage brand loyalty or brand switching to a population that should not even be drinking. C) the use of sex and humor in beer ads has made alcohol appealing to underage individuals. D) the public service announcements discourage underage drinking.
D
If the National Advertising Division finds an advertisement has not been properly substantiated, the NAD normally will: A) issue a consent order. B) issue a cease and desist order. C) refer the case to the FTC for regulatory action. D) ask the advertiser to modify the ad or discontinue using the ad.
D
Explain the difference between deception and puffery.
Puffery exists when a firm makes an exaggerated statement about its goods and services. Puffery is not considered to be a factual statement. Deception is a factual statement or claim that misleads and deceives.
What criteria must be met to deem an advertisement deceptive or misleading?
• A substantial number of people, or the typical person, is left with a false impression or misrepresentation that relates to the product. • The misrepresentation induces people or the "typical person" to make a purchase.
An administrative complaint is: A) a formal proceeding before an administrative law judge used by the Federal Trade Commission. B) a formal hearing before the Court of Appeals. C) a formal hearing before the full Federal Trade Commission. D) used by the National Advertising Review Board when the NAD cannot solve a complaint.
A
Direct ambush marketing occurs when: A) firms intentionally design advertising or marketing campaigns to capitalize on a major sporting event. B) a brand is associated with a major sporting event without any intentional or indirect effort on the part of the brand. C) a brand suggests or hints it is associated with a major sporting event when it is not. D) consumers are enticed to look at a product by individuals without the individuals realizing the person making the sales pitch is being paid or compensated by the brand.
A
From a company's perspective, the primary benefit of using cookie technology is it allows the marketing team to: A) gather information about where a consumer has been on the company's website, how long they were there, and what they did. B) know what other sites a person has visited on the internet. C) prepare specific marketing messages and emails to consumers based on their browsing behavior. D) know who has visited the company's website.
A
If an advertiser uses expert endorsements, statements made by the expert in the advertisement must be based on: A) legitimate tests performed by experts in the field. B) the opinion of "typical persons" who would use the product. C) truthful statements that represent the expert's personal experience. D) lab or engineering tests.
A
If at the end of an administrative hearing of an FTC case, the judge feels a violation of the law has taken place, the judge issues a: A) cease and desist order. B) consent agreement. C) corrective advertising directive. D) trade regulation ruling.
A
If the NARB rules against an advertiser, it will issue an order that will be very similar to a: A) consent order of the Federal Trade Commission. B) cease and desist order of the Federal Trade Commission. C) corrective advertising order of the Federal Trade Commission. D) judgment of the U.S. Court of Appeals.
A
If the NARB rules against an advertiser, it will: A) order the firm to discontinue the ad in a manner similar to the consent order of the FTC. B) ask the firm to modify the ad or discontinue using it. C) refer the case to the FTC. D) refer the case to the NAD.
A
Occasionally the FTC bypasses its typical process and uses the court system to stop an unfair marketing practice. Of the following, which would be the most likely to trigger this type of action? A) A company violates an FTC cease and desist order B) A full commission of the FTC is not available to hear a case C) A company violates a consent order D) A company appeals a consent order
A
Occasionally the Federal Trade Commission bypasses its typical process and uses the court system to stop an unfair or deceptive marketing practice. Of the following, which would be the most likely to trigger this type of action? A) The actions of a company are so severe that immediate action is needed B) A full commission of the FTC is not available to hear a case C) A company violates a consent order D) A company appeals a consent order
A
Public complaints about the amount of violence on television would be sent to the: A) FCC. B) FDA. C) FTC. D) BATF.
A
The Federal Trade Commission orders corrective advertising in: A) only the most severe instances of deceptive and misleading advertising. B) cases involving advertising to children. C) cases that are appealed to the U.S. Court of Appeals. D) most cases that are investigated.
A
The NAD of the Council of Better Business Bureaus becomes involved in all of the following except: A) cases of mail fraud. B) collecting information about misleading advertising. C) negotiating modification of ads deemed to be misleading. D) dismissing unsubstantiated complaints about an advertisement.
A
The agency with the greatest degree of jurisdiction over marketing and advertising is the: A) FTC. B) FCC. C) USPS. D) FDA.
A
The law states that advertising to children cannot exceed 12 minutes per hour during weekdays. Which organization is responsible for making sure this time limit is not exceeded? A) Federal Communications Commission B) Federal Trade Commission C) Food and Drug Administration D) United States Postal Service
A
The rise in the use of ambush marketing can be attributed to: A) the increase in expenditures on sponsorships and the use of athletes as endorsers. B) the increased usage of cause-related marketing. C) a relaxation in ethical standards by society. D) changes in regulatory policies of the Federal Trade Commission.
A
When a company creates a brand name that closely resembles a popular or successful brand, it may be: A) brand infringement. B) domain infringement. C) domain squatting. D) brand parity.
A
When an organization creates an impression that it is a sponsor of a major event when it is not, it is ________ marketing. A) allusion B) incidental C) distractive D) saturation
A
What is a trade regulation?
A trade regulation is a finding or a ruling that implicates an entire industry in a case of deceptive or unfair marketing practices
If after an administrative hearing a company is still not satisfied with the ruling of the FTC, the next step would be to: A) appeal the decision to the Court of Appeals. B) hold a hearing before the full FTC. C) appeal the decision to the Supreme Court. D) hold a hearing before an administrative law judge.
B
A form of law present in many Islamic countries is ________ law. A) moral B) theocratic C) civil D) common
B
All of the following are components of the Wheeler-Lea Amendment to the FTC Act except: A) expanded authority of the FTC to prohibit false and misleading advertising practices. B) granted the FTC power to monitor the amount of time television stations advertise to children. C) gave the FTC power to levy fines when necessary. D) granted the FTC access to the courts to enforce the law and ensure compliance with FTC rulings.
B
Chase files a complaint with his local Better Business Bureau about an advertisement he feels is misleading and deceptive. The BBB would: A) keep a copy of the complaint in the company's file for future use if someone asked about that particular company. B) refer the complaint to the National Advertising Division. C) refer the complaint to the National Advertising Review Board. D) refer the complaint to the Federal Trade Commission.
B
Concerns and criticisms regarding advertising include the following except advertising: A) causes people to buy more than they can afford. B) leads to socialism. C) overemphasizes materialism. D) increases the costs of goods and services.
B
If a customer is concerned about the labeling on a bag of potato chips, the regulatory agency to contact is the: A) Federal Communications Commission. B) Food and Drug Administration. C) Federal Trade Commission. D) United States Postal Service.
B
In creating a foundation and framework for ethical guidelines, most religions: A) involve maximizing pleasure and minimizing pain. B) offer a version of philosophy based on the Golden Rule, which means do unto others what you would have them do unto you. C) involve balancing a variety of urges throughout a person's life. D) offer guidelines regarding right and wrong as well as what is acceptable and what is not acceptable, within a geographic area.
B
Incidental ambush marketing occurs when: A) firms intentionally design advertising or marketing campaigns to capitalize on a major sporting event. B) a brand is associated with a major sporting event without any intentional or indirect effort on the part of the brand. C) a brand suggests or hints it is associated with a major sporting event when it is not. D) consumers are enticed to look at a product by individuals without the individuals realizing the person making the sales pitch is being paid or compensated by the brand.
B
The Food and Drug Administration regulates and oversees: A) marketing materials sent through the mail. B) packaging and labeling of products, advertising on food products, and advertising of drugs. C) television, radio, and the telephone industries. D) the amount of time that television stations are permitted to advertise to children.
B
To substantiate an advertisement, the Federal Trade Commission and courts tend to use each of the following principles except: A) the federal government assumes consumers read ads "broadly" and do not notice details hidden in fine print. B) tests have to be with the actual product or one that is considered similar. C) evidence should come from individuals or companies that would be considered experts by others in the field. D) the courts and FTC will consider the totality of evidence concerning a claim, not just one particular study that may support a claim.
B
When a firm intentionally designs advertisements or marketing campaigns to capitalize on a major sporting event it is ________ marketing. A) stealth B) direct ambush C) incidental ambush D) indirect ambush
B
Which agency has the authority to order corrective advertising? A) Federal Communications Commission B) Federal Trade Commission C) Food and Drug Administration D) Bureau of Alcohol, Tobacco, and Firearms
B
Which industry agency monitors all forms of advertising directed toward children? A) National Advertising Division B) Children's Advertising Review Unit C) Federal Trade Commission D) Council of Better Business Bureaus
B
Company leaders who are not satisfied with the ruling of the full FTC can appeal to the U.S. Court of Appeals. The danger in appealing is: A) the company does not have the opportunity to present oral arguments. B) the cease and desist orders are normally upheld. C) a company may be ordered to pay civil penalties. D) the decision is not binding.
C
Homeostasis is a philosophy that: A) involves maximizing pleasure and minimizing pain. B) offers a version of philosophy based on the Golden Rule, which means do unto others what you would have them do unto you. C) involves balancing a variety of urges throughout a person's life. D) offers guidelines regarding right and wrong as well as what is acceptable and what is not acceptable, within a geographic area.
C
If Wendy's makes an advertising claim that the company offers great-tasting hamburgers, the practice is: A) a violation of the company's code of ethics. B) misleading and deceptive advertising. C) puffery. D) cross-promotion claim.
C
If a business files a complaint with the NAD of the Council of Better Business Bureaus claiming that one of its competitors has unfairly and deceptively depicted the business in an ad, the NAD will: A) issue a cease and desist order if it finds the ad is indeed deceptive and misleading. B) investigate the ad to determine if the FTC Act has been violated. C) collect information and evaluate data concerning the complaint to determine if the advertiser's claims can be substantiated. D) refer the case to the Federal Trade Commission since it involves a business filing the complaint.
C
If a case is appealed from the National Advertising Review Board, it would go to the: A) NAD. B) U.S. Court of Appeals. C) FTC. D) administrative board of the CBBB.
C
Indirect ambush marketing occurs when: A) firms intentionally design advertising or marketing campaigns to capitalize on a major sporting event. B) a brand is associated with a major sporting event without any intentional or indirect effort on the part of the brand. C) a brand suggests or hints it is associated with a major sporting event when it is not. D) consumers are enticed to look at a product by individuals without the individuals realizing the person making the sales pitch is being paid or compensated by the brand.
C
The FTC test of substantiation requires: A) a comparison of marketing claims made by competing firms. B) the use of a code of ethics. C) data, facts, or competent and reliable evidence. D) testimony from an expert in the field
C
The Federal Trade Commission, National Advertising Division, and the courts would consider the word "better" used in an advertisement to be: A) deceptive and misleading advertising. B) puffery. C) puffery, but it also implies a comparison, which, if challenged, may require substantiation. D) a violation of the Federal Trade Commission Act.
C
The advantages of using industry-based agencies to resolve advertising complaints rather than governmental agencies, such as the FTC, include all of the following except: A) cases are normally heard sooner and at a lower cost. B) the disputes are resolved quicker and are seldom referred to the FTC. C) cases are heard by judges with experience in handling advertising cases. D) it does not involve any civil penalties and no legal action can be taken.
C
The original role of the FTC was to: A) provide protection for consumers from big businesses. B) oversee the marketing industry. C) enforce antitrust laws and protect businesses from one another. D) regulate advertising and marketing communications.
C
The practice of purchasing internet domains that are valuable to other people, companies, or organizations is: A) brand infringement. B) domain infringement. C) domain squatting. D) brand parity.
C
The substantiation test for false and misleading advertising requires: A) scientific tests. B) consumer testimonials. C) competent and reliable evidence. D) the average person to be convinced it is not false and misleading.
C
When a brand is associated with a major sporting event without any intentional or indirect effort on the brand's part, it is ________ marketing. A) stealth B) direct ambush C) incidental ambush D) indirect ambush
C
When a company designs a promotion or event near a major sporting event to capitalize on the attendees to the event without being an official sponsor, it is ________ marketing. A) allusion B) incidental C) distractive D) saturation
C
When the FTC makes a judgment against a company for false or misleading advertising, which of the following would come first? A) Administrative complaint B) Cease and desist order C) Consent order D) Court-ordered reparations
C
The NARB of the Council of Better Business Bureau is composed of: A) consumers and legal experts on advertising law. B) judges and law professors from various universities. C) advertising professionals and CEOs of major corporations. D) advertising professionals and civic individuals.
D
If Isabelle contacted a local Better Business Bureau about a particular landscaping service, she would receive a: A) detailed report of all complaints filed against the company. B) report about any complaints that were filed against the company by individuals. C) copy of all communications the BBB had with the particular firm. D) carefully worded report about any complaints that have been filed with the BBB against the company.
D
In addition to handling complaints about advertising to children, which agency also prescreens ads directed to children? A) Advertising Self-Regulatory Council B) Federal Communications Commission C) National Advertising Division D) Children's Advertising Review Unit
D
In creating a foundation and framework for ethical guidelines, the concept of law: A) involves maximizing pleasure and minimizing pain. B) offers a version of philosophy based on the Golden Rule, which means do unto others what you would have them do unto you. C) involves balancing a variety of urges throughout a person's life. D) offers guidelines regarding right and wrong as well as what is acceptable and what is not acceptable, within a geographic area.
D
Of the following taglines or slogans, which would most likely trigger an investigation by the Federal Trade Commission or National Advertising Division of the CBBB? A) For the finest Asian food come to China Garden B) Eat at Wendy's, the best hamburgers in town C) Tree Top apple juice is twice as good D) For better looking skin, use Avon
D
Pepsi creates an advertisement suggesting it sponsors the U.S. Olympic basketball team by showing a basketball game in a commercial. This is a form of ________ marketing. A) stealth B) direct ambush C) incidental ambush D) indirect ambush
D
Recently the FTC investigated bloggers who were being sponsored to pitch products. The FTC ruled that the blogger must disclose any type of compensation that is received. This is an example of a: A) cease and desist order. B) consent order. C) corrective advertising order. D) trade regulation ruling.
D
Stealth marketing occurs when: A) firms intentionally design advertising or marketing campaigns to capitalize on a major sporting event. B) a brand is associated with a major sporting event without any intentional or indirect effort on the part of the brand. C) a brand suggests or hints it is associated with a major sporting event when it is not. D) consumers are enticed to look at a particular brand without them realizing the person making the sales pitch is being paid or compensated by the brand.
D
The United States and many Western countries use the form of law known as ________ law. A) moral B) theocratic C) civil D) common
D
The agency that monitors advertising on food packages and advertisements for medicines is the: A) Federal Trade Commission. B) Federal Communications Commission. C) United States Postal Service. D) Food and Drug Administration.
D
The agency that would be concerned with the salt content in foods would be the: A) Federal Trade Commission. B) Federal Communications Commission. C) United States Postal Service. D) Food and Drug Administration.
D
When a company increases its advertising and marketing during a major event, such as the Olympics, to capitalize on individuals watching the event, yet is not an official sponsor, it is ________ marketing. A) allusion B) incidental C) distractive D) saturation
D
When a company must pay for ads that refute false claims it made in previous ads, it is called a(n): A) consent order. B) administrative ruling. C) cease and desist order. D) corrective advertisement
D
When the Federal Trade Commission insists that a company stop making a false claim in an advertisement and that company agrees to stop, it is an example of a(n): A) legal review. B) cease and desist order. C) administrative complaint. D) consent order.
D
Which statement below about the advertising of underwear, sexually-related products, feminine hygiene products, and male enhancement products is false? A) In Islamic countries, the advertising of personal hygiene and sexually-related products would be highly offensive. B) It is important for marketing professionals to create advertisements that are not offensive. C) The use of nudity and sexuality featuring teens and children has been highly criticized. D) In recent years, there has been a decline in sensitivity towards child molestation, child pornography, and related sexual issues.
D
Words such as "best," "greatest," and "finest" used in advertising are examples of: A) deceptive advertising. B) misleading advertising. C) standard industry practices. D) puffery.
D
Identify the primary industry agencies that assist in regulating the marketing and advertising industry. Explain the primary function of each.
The Council of Better Business Bureaus collects complaints about businesses and will provide a carefully written summary of the complaints to anyone wanting to know about the business. The CBBB has three agencies that help regulate the advertising industry. 1. National Advertising Division collects information about a complaint to determine whether the advertiser's claim is substantiated or not. 2. Appeals from the NAD are referred to the National Advertising Review Board which is made up of advertising professionals and civic individuals. Rulings of the NARB are similar to the consent order by the FTC, but with no legal power. 3. The Children's Advertising Review Unit is responsible for monitoring all advertising in all media that is directed to children under 12.