Deck 16: Public policy and consumer protection

Question 1

Shoplifting, price tag switching and returning clothing that has been worn are all examples of:

A) unethical consumer practices.
B) compulsive shopping.
C) unethical marketing behaviour.
D) compulsive aggression.

Answer 1

unethical consumer practices.

Question 2

The mechanism that tries to correct the imbalance between buyers and sellers is:

A) the consumer movement.
B) the consumer mechanism.
C) the consumer education program.
D) none of the above.

Answer 2

the consumer movement.

Question 3

Organisations have found that ethical and socially responsible behaviour results in a _____ and _____.

A) larger customer base; effective advertising
B) larger customer base; favourable image
C) favourable image; increased sales
D) high profit margin; effective advertising

Answer 3

favourable image; increased sales

Question 4

David is gathering material to file his tax return. The fact that he can deduct money given to his favourite charity is an example of the form of governmental intervention for public policy known as:

A) provision of incentives.
B) consumer education.
C) legislation.
D) promotional constraints.

Question 5

Codes of ethics are developed by many organisations as they recognise that self-regulation:

A) is more profitable in the short-term.
B) deters government from imposing its own regulations.
C) is the way we do business now.
D) none of the above.

Question 6

Of the two dominant traditions, deontology is:

A) a theory that suggests individual should not be willing to have their actions become universal laws.
B) the least favoured by moral philosophers today.
C) a utilitarian theory.
D) the most favoured by moral philosophers today.

Question 7

Industry-wide self-regulation is attractive because:

A) it is more cost effective.
B) it is in every member's best interests
C) it favours marketers.
D) all of the above.

Question 8

Which of the following is not an example of unethical marketing behaviour?

A) Manufacture of flammable stuffed animals.
B) Favoured pricing to preferred groups.
C) Placing advertisements that accurately reflect the product offering.
D) Using 'packaging-to-price' tactics.

Question 9

According to _____, to be ethical a decision should be based on what is best for everyone involved.

A) teleology
B) golden rule theory
C) Kantianism
D) deontology

Question 10

In order to reduce the impact of consumer activism, businesses can employ the following strategies except:

A) improving product quality, expanding services, lowering prices, modifying advertising claims and eliminating the causes of consumer dissatisfaction.
B) being proactive by initiating an active consumer education program.
C) increasing the number of free giveaways in their promotions.
D) cooperating with government agencies, non-profit organisations and consumer groups.

Question 11

When policymakers believe that intervention in the process or outcome of marketing exchanges will benefit society as a whole, they will generally develop:

A) legislation.
B) public policy.
C) a prime ministerial address.
D) social marketing.

Question 12

Unethical practices in the marketplace are related to all elements of the marketing mix except:

A) packaging.
B) pricing.
C) distribution.
D) all of the above.

Question 13

A concerted but non-mandatory refusal by a group of consumers to do business with a company to show their disapproval is called a:

A) refusal.
B) motion.
C) disapproval behaviour.
D) boycott.

Question 14

Jayde, a young university student, decides to produce a range of casual clothing from her home and put the name 'Billabong' on them. She is engaging in:

A) brand transference.
B) brand 'knock-off'.
C) fraudulent discounts.
D) deceptive advertising.

Question 15

A tax deduction is an example of the form of governmental intervention known as:

A) legislation.
B) consumer education.
C) provision of incentives.
D) promotional constraints.

Question 16

__________ is not a type of intervention the government employs in social policy.

A) Regulation
B) Consumer education
C) Provision of incentives
D) Promotional constraints

Question 17

______ is concerned with the methods and intentions involved in a particular behaviour.

A) Teleological theory
B) Utilitarianism
C) Ontological theory
D) Deontological theory

Question 18

The strongest form of governmental intervention into public policy is:

A) regulation.
B) consumer education.
C) the provision of incentives.
D) promotional constraints.

Question 19

A need for intervention by policy makers will generally lead to:

A) unconscionable conduct.
B) less regulations.
C) public intervention.
D) public policy.

Question 20

The ethical practices of employees are very much a product of the _____ in which they work.

A) corporate environment
B) social environment
C) political environment
D) economic environment

Question 21

_____ involves trading where a stronger party deliberately takes unfair advantage of its superior position or bargaining power.

A) Conscious conduct
B) Conspicuous conduct
C) Unconscious conduct
D) Unconscionable conduct

Question 22

Julie recently saw a TV advertisement that she felt was offensive to women. She therefore complained to the:

A) Advertising Watchdog.
B) Australian Broadcasting Authority.
C) Advertising Standards Bureau.
D) She could have complained to all of the above.

Question 23

Fuzz Candy Company was found to have used deceptive advertising for its candy bar. The firm was required to run a series of newspaper ads noting that its candy bar was not healthy as had previously been claimed. These ads are known as:

A) trust restoration.
B) perception correction.
C) deceptive advertising correction.
D) corrective advertising.

Question 24

A 1990 study into television advertising to children during the 4-5 pm timeslot found that up to 93% of the advertisements were for:

A) toys.
B) computer games.
C) books.
D) food.

Question 25

What has been recognised as a cause for growing concern among policymakers at every level of government is:

A) increasing imports.
B) increased competition.
C) maturing markets.
D) marketing abuses.

Question 26

Of all the classifications of deception, _____ can be the most subtle and difficult to determine.

A) deceptive discrepancy
B) unfair discrepancy
C) claim/fact discrepancy
D) claim/belief discrepancy

Question 27

Corrective advertising is:

A) advertising whose main purpose is to increase direct contact with consumers.
B) advertising whose main purpose is to help consumers gather information about new products.
C) advertising whose main purpose is to dispel mistaken impressions created by a misleading advertisement and to help consumers make more informed product decisions.
D) advertising whose main purpose is to persuade consumers to overestimate the value they are getting from a purchase.

Question 28

The most difficult category of deception to police is:

A) deceptive discrepancy.
B) unfair discrepancy.
C) claim/fact discrepancy.
D) claim/belief discrepancy.

Question 29

The effectiveness of consumer legislation in safeguarding consumer rights has proven to be somewhat uneven because:

A) legislation is rarely based on empirical consumer research findings.
B) legislation regarding consumer rights is a grey area.
C) legislation is inflexible.
D) legislation is not reviewed often enough.

Question 30

Smith Computing Company wishes to lodge a complaint about their competitor's advertising. They should contact the:

A) Advertising Claims Board.
B) Advertising Standards Bureau.
C) Australian Broadcasting Authority.
D) ACCC.

Question 31

The primary legislation that impacts on consumer-related marketing activities in Australia is:

A) Australian Securities and Investments Legislation 1974.
B) Trade Practices Act 1974.
C) Australian Competition Act 1974.
D) Australian Constitution Act.

Question 32

Which of the following is not conduct deemed unconscionable?

A) High-pressure sales techniques.
B) Harassment.
C) Direct selling.
D) Taking advantage of people who have language difficulties.

Question 33

Of the three classifications of deception, the one which is most blatant is a(n):

A) unconscionable lie.
B) unfair discrepancy.
C) claim/fact discrepancy.
D) claim/belief discrepancy.

Question 34

Research has shown that low-income earners are more concerned with the size and frequency of loan repayments rather than the:

A) lending institution.
B) size of the loan.
C) interest rates.
D) all of the above.

Question 35

Consumer-related legislation is administered by:

A) Australian Competition and Consumer Commission.
B) Australian Securities and Investments Commission.
C) Australian Taxation Office.
D) Office of Fair Trading.

Question 36

It appears that corrective advertising has the potential to:

A) be ineffective.
B) be overly effective as well as ineffective.
C) be overly effective.
D) none of the above.

Question 37

Fuzz's advertisements for its candy bar emphasise that it is made with all natural ingredients. Although they don't say it, they imply that the candy bar is healthy for you even though it is extremely high in kilojoules, sugar and fat. Fuzz would be guilty of the noted classification of deception by using a(n):

A) claim/belief discrepancy.
B) unfair discrepancy.
C) claim/fact discrepancy.
D) unconscionable lie.

Question 38

Nudity in advertising is acceptable in:

A) Australia.
B) New Zealand.
C) Europe.
D) the United States.

Question 39

_____ are(is) said to underlie the increasing trend in recent years towards deregulation and the relaxed enforcement of existing statues.

A) Cost-benefit analyses
B) Consumer apathy
C) The high rate of business failures
D) None of the above

Question 40

In the context of deceptive advertising, which of the following is one of the three categories of deception?

A) Unconscionable lies.
B) Claim/fact discrepancies.
C) Claim/belief discrepancies.
D) All of the above are categories of deception.

Question 41

In the United States, the consumers' bill of rights set the stage for the consumer movement.

Question 42

Public attitudes towards consumerism are likely to remain strong and, increasingly, consumers are willing to be active consumerists.

Question 43

Teleological theory deals with the methods and intentions involved with a particular behaviour.

Question 44

A highly ethical corporate environment encourages unethical practices such as misleading conduct of their employees.

Question 45

Consumer research priorities for the new millennium include:

A) how the marketplace can be improved so consumers can make better decisions.
B) in what ways economic and social welfare transactions can lead to greater consumer satisfaction.
C) how the market can be improved so consumers can be more satisfied with their consumption.
D) all of the above are priorities.

Question 46

In Australia, the major legislation that impacts on consumer-related marketing activities is the Trade Practices Act.

Question 47

Shoplifting and price tag switching are not examples of unethical consumer practices.

Question 48

Utilitarianism is a teleological moral theory.

Question 49

Researchers have found that _____ and _____ have provided the best explanation of differences in nutritional knowledge and behaviour between children.

A) demographics; location
B) family characteristics; habits
C) social well-being; economic well-being
D) personality; age

Question 50

As she was putting away the groceries from a recent shopping trip, Sally noticed that her favourite cereal suddenly had fifty grams less in the box even though the price and box had remained the same size. This is an example of:

A) misleading advertising.
B) misleading labelling.
C) packaging-to-price deception.
D) exploitative advertising.

Question 51

The best way to supply consumers with nutritional information is to:

A) send them on a nutrition course.
B) provide them with detailed numeric information.
C) provide them with nutritional 'flags'.
D) omit this information as they don't understand it.

Question 52

The distribution of educational materials can be a key component in a firm's effort to develop a one-on-one consumer contact that has been identified as:

A) relationship marketing.
B) interactive marketing.
C) informational marketing.
D) direct contact marketing.

Question 53

Unethical practices can be related to all elements of the marketing mix.

Question 54

The area of research that has been said to 'present the best of all possible worlds to the research scholar' is:

A) new product development research.
B) consumer needs research.
C) consumer information research.
D) social policy research.

Question 55

A firm that keeps the price of its product constant while reducing the amount of product in a package and purposefully making the package look as much like it did before the reduction would most likely be guilty of:

A) packaging-to-price deception.
B) misleading labelling.
C) misleading advertising.
D) exploitative advertising.

Question 56

The best defence against possible marketing abuse for consumers is:

A) protective legislation.
B) better government policy.
C) protective regulation.
D) better product knowledge.

Question 57

Manufacturing inflammable stuffed animals is an example of unethical consumer practices.

Question 58

Employee surveys reveal that superiors often reward those employees who engage in ethical behaviour.

Question 59

New public policies that affect marketing are usually the outcome of marketplace abuses brought to the attention of policymakers through the media, consumer advocacy groups and professional or industry associations.

Question 60

Cooperating with the government agencies, non-profit organisations and consumer groups in their consumer education programs is not one of the strategies available to businesses to reduce the impact of consumer activism.

Question 61

The major thrust of trade practices legislation, from a consumer perspective, comes from its protection of marketing firms against product liability concerns.

Question 62

Australian research demonstrates that parents and teachers play a key role in building the nutritional expertise of children.

Question 63

Identify and describe the types of intervention that governments use in the interest of protecting the public from the practices of marketing firms.

Question 64

Because compliance costs are ultimately borne by the consumer, legislators and governments now actively weigh the costs and benefits of enacting and enforcing consumer legislation.

Question 65

Whyme Electrical Discounts advertises a TV that has had a large price reduction from a phoney high list price. Whyme Electrical Discounts is practicing deceptive pricing.

Question 66

Manufactured food in Australia is required to list ingredients in descending order by weight except for water, which can be listed last.

Question 67

The main purpose of corrective advertising is to improve the content of the advertisement with a view to broadening its market reach.

Question 68

An unfair advertisement contains explicit or implied claims or omissions that are likely to mislead a consumer into acting reasonably under the circumstances.

Question 69

Some firms have been involved with consumer education in the belief that educated consumers make better customers.

Question 70

Corrective advertising can be both effective and ineffective. Some consumers tend to over-generalise the corrective message, so that they disbelieve all subsequent advertising claims for the brand and product category.

Question 71

Because consumer legislation is always based on empirical consumer research findings, the effectiveness of consumer legislation in safeguarding consumer rights has proven to be highly successful.

Question 72

Research suggests that low-income consumers are more interested in the amount of interest they were charged, rather than the size and frequency of their loan repayments.

Question 73

When McDonalds changed their packaging from polystyrene to recyclable cardboard and paper in the 1990s, McDonalds was practicing green marketing.

Question 74

A)What is deceptive advertising? Describe the three categories of deception identified. Which category is the most difficult to determine and why?
B)What is corrective advertising? Is it effective?

Question 75

Of the three categories of deceptive advertising, the category in which completely false claims are made intentionally is unconscionable lies.

Question 76

What is narrowcasting? Give examples, with particular reference to its use on the Web.

Question 77

Unconscionable conduct includes taking advantage of people who, due to a lack of skills in English or for some other reason, do not understand the document involved.

Question 78

A)What are 'masked marketing' practices?
B)Describe some of the types employed.

Question 79

The Advertising Standards Board receives and adjudicates on consumer complaints about advertising, particularly in relation to taste, decency, health and safety.

Question 80

Consumer research has revealed a large segment of socially concerned consumers who favour products that have been modified to meet environmental concerns.