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Exam 4: Social, Ethical, and Regulatory Aspects of Advertising and Promotion

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Question 31

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Consumer and industry groups are free to make attempts at shaping and restricting the advertising process, but in reality have little voice or power compared to the federal government.

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Question 32

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A relatively new federal agency is the National Advertising Division (NAD), empowered to create and enforce strict standards for packaging, labeling, distribution, and merchandising through its National Advertising Review Board (NARB).

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Question 33

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Scenario 4-4 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 salesman replied 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 percent of the cost of the vehicle comes from expense for national and local advertising. -(Scenario 4-4) 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 my own time and money to do an Internet search and buy consumer books to find a good car.There's probably not much difference in this one anyway, you can just say whatever you want in your ads!" Which criticism of advertising is most disconcerting to Joe at this moment?

State governments have very little authority over promotional activities of firms, and since most companies conduct interstate commerce, any violations are federal issues.

What is one of the most widely recognized standards in the advertising industry, explaining its responsibilities, social influences, and ethical guidelines for decency and honesty?

In recent years, the U.S.Senate has approved a tenfold increase in fines for advertising situations that are determined to step over the line regarding American society's basic ethical principles.What issues are being regulated in this way?

Advertisers have historically been responsible for buying air time on educational and cultural programs despite their smaller audiences, thereby boosting the overall quality of American television.

Today, fast food restaurants are geared toward enticing families with young children to drop in and buy a quick meal.Some also hand out small items to kids, like coloring books, crayons, and balloons.Beyond the fast food giants, other franchises and businesses have adopted this practice to attract children and assure parents that they are family-friendly establishments -- consider your local haircutters, car washes, shoe stores, etc.But in recent years, the corporate fast food franchises have offered giveaways like plastic figurines featuring characters from movies or television programs heavily targeted to young audiences.Outline the concerns that a critic of advertising would have about this practice.

Scenario 4-6 In late 2010, renowned actress Rachel Leigh Cook spoke out against the entertainment industry and the way it portrays celebrities in advertising. Cook, who starred in the popular 90s hit She's All That, claimed that the airbrushing of celebrities that often takes place before an advertisement is published is a clear case of false advertising. Cook told FoxNews.com, "It breaks my heart to be part of an industry and part of a machine that really pushes out these images and propagates these really terrible standards that are false." Cook went so far in her criticism to question how falsely editorializing is not considered a crime, and stating that so many young women struggle with identity issues in today's society because they are striving to be something that does not exist.(John Dorian, "Rachel Leigh Cook Against Air Brushing, Calls it False Advertising." International Business Times, October 25, 2010.) -(Scenario 4-6) Rachel Leigh Cook is active in a number of organizations that attempt to educate young Americans on some of the cons of the entertainment and advertising industries. One con often addressed in the advertising industry is advertising

Three teenage girls who hang around together all start to smoke cigarettes, and eventually start to drink beer on weekends.In studying advertising that supposedly makes dangerous and addictive products appealing to young people, multiple research studies have found that decisions on the part of girls like this to use tobacco and alcohol

What is the most pressing regulatory issue facing both direct marketing and e-commerce today?

Scenario 4-4 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 salesman replied 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 percent of the cost of the vehicle comes from expense for national and local advertising. -(Scenario 4-4) Joe saw a television ad that stated the Toyota Camry was "the world's best car for reliability." The use of such absolute superlatives in advertising is

When a manufacturer and dealer share the expense of ads, at times adding hidden price concessions and moving into illegal territory, they are involved in vertical cooperative advertising.

Scenario 4-1 A group called Adbusters has a website containing 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 4-1) In the past, Adbusters has cited 12 magazines that it said are responsible for pushing "a clean, exciting image for one of the dirtiest products around: tobacco." It suggested that Americans cancel their subscriptions to these magazines until they stopped accepting these ads.This is an example of

Which of the following is one of the four major aspects of advertising that lower the overall cost of products, according to proponents?

Scenario 4-2 "Consumerism is a pattern of behavior that helps to destroy our environment, personal financial health, the common good of individuals and human institutions." This quote is stated on the home page of a website called Overcoming Consumerism.The quote goes on to say, "This site details methods that you can use to help defeat consumerism, save money, work less and lead a more satisfying and environmentally benign life while you help to restore the economic self-sufficiency of your community." (http://www.verdant.net/) As one navigates from page to page on the site, advertising is often implicated as a source of the movement toward consumerism.Many of the same criticisms of advertising found on the site were outlined in the textbook. -(Scenario 4-2) One quote from the site reads, "Time, the precious shrinking commodity of our lives, is exchanged for money to buy things that there is usually little time to enjoy.What time is left over after work is often devoured by television, basically a series of ever-more mediocre filler programs inserted between ever-more spectacular commercials whose purpose is to stoke further desire for more things." In response to the charge that contemporary advertising robs people of time, supporters of advertising would state that it

Scenario 4-5 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 4-5) 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 us any way to know how a normal woman might look in their clothes." On which of the following "cons" of advertising is this comment most likely based?

If "Project Beacon" had been launched as planned, all the online searches and purchases of Facebook users would have appeared on their Facebook sites and then would have been broadcast to all their other Web connections.

In their 2004 "Campaign for Real Beauty," the people creating the groundbreaking Dove ads attempted to be realistic, show sensitivity, and fight stereotypes by featuring

Scenario 4-1 A group called Adbusters has a website containing 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 4-1) Some philosophies regarding our path to overconsumption proposed 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, rushing heedlessly down a railroad track called Progress." Fox then concluded that advertisers