Deck 3: Marketing Ethics, Regulations, and Social Responsibility

Question 1

A primary goal of marketing is to develop a customer base that will desire and purchase a firm's products.

Answer 1

True

Question 2

Personal beliefs used as standards in guiding an individual's actions are also known as values.

Answer 2

False

Question 3

Morals direct people as they make decisions about everything from personal conduct, to sexual behavior, to work activities, to family life, and interaction with other individuals.

Answer 3

True

Question 4

Marketing critics have voiced the concern that marketing persuades individuals to purchase goods and services they do not need and cannot afford.

Question 5

While credit cards are easy to obtain, overspending is also due to an epidemic, cultural change in our society caused by people seeking immediate gratification.

Question 6

The criticism that marketing overemphasizes materialism is not valid because marketers are only responding to society's desire for products and to the credit and debt facilitation that creditors offer.

Question 7

In comparing developing countries with the United States and other highly developed countries, it is obvious that materialism has a negative impact on society and on the standard of living people enjoy.

Question 8

Marketing can produce intangible benefits for brands such as consumer trust and belief in the quality of a brand.

Question 9

In terms of U.S. ad spending by the top U.S. megabrands, the top seven are either automobile brands or restaurants.

Question 10

Advertising expenditures in the United States account for approximately 8.8% of the GDP.

Question 11

Traditionally, advertising accounts for about 50 percent of all marketing dollars spent.

Question 12

While some would argue that marketing capitalizes on human weaknesses, it is clear that marketing is just responding to human behavior, especially in terms of responding to the desire to be physically attractive.

Question 13

In terms of the ethical criticism that marketing shapes inappropriate cultural values, one issue is that of free speech and free enterprise. As long as firms are not violating laws, such as selling cigarettes to minors, companies should have the right to market their products like any other organization.

Question 14

The fact that today products such as condoms, feminine hygiene products, male sexual enhancement drugs, and underwear are advertised regularly on television is evidence that marketing indeed molds social and cultural values.

Question 15

Many critics of marketing believe that advertisements are becoming more offensive. Sex and nudity in advertisements are the most troubling and controversial issues.

Question 16

A primary argument against companies being able to advertise to children is that children have not reached maturity and do not have the reasoning ability of adults.

Question 17

Bait and switch is the situation when a retailer promotes a special deal on a particular brand and then when consumers arrive at the store, the retailer attempts to get them to switch to a higher-priced item.

Question 18

Bait and switch tactics are considered illegal if 1) the retailer runs out of the merchandise before the sale ends and 2) the salesperson talks to customers about a higher-priced version of the product.

Question 19

When an advertisement for cologne or perfume promises that you will become more sexually attractive, it is considered misleading and deceptive and, therefore, illegal.

Question 20

The more marketers understand about you as a consumer, the more efficient they can become in developing marketing material that will influence your purchase behavior.

Question 21

In terms of gathering information about consumers, the information gathering source that has raised the most controversy lately is the information obtained through credit card applications.

Question 22

When discussing the ethical issue that marketing violates consumer rights to privacy, it is important to keep in mind that marketers are interested in groups of people that fit a certain pattern, not in individual consumers.

Question 23

As a marketer, it is important to remember that some marketing tactics may be legal, but they may still be perceived as unethical or in bad taste by various individuals, groups, nations, and even societies.

Question 24

In facing an ethically questionable issue, individuals are influenced by their personal background and experiences as well as job-related factors.

Question 25

Britney is facing a tough ethical dilemma as marketing director for her firm. While society and its views will have an influence on her decision, a more relevant influence will be forces within her own company.

Question 26

As businesses grew in size during the 1800s, the federal government was concerned that, if left unchecked, large businesses could dictate prices, distribution, and access to goods and services and thus restrain free trade.

Question 27

To prevent monopolies and trusts that could restrict trade, the Lanham Act was passed in 1946.

Question 28

To prevent monopolies and trusts that could restrict trade and to prevent discrimination by sellers, the Sherman-Antitrust Act was passed in 1890, the Clayton Act in 1914, and the Robinson-Patman Act in 1936.

Question 29

The Hart-Scott-Rodino Act of 1976 requires corporations planning to merge to notify and seek the approval of the government before any action is taken.

Question 30

The Consumer Product Safety Act of 1972 established the Consumer Product Safety Commission, which sets safety standards for products manufactured and ensures that manufacturers follow the safety standards and regulations.

Question 31

The Wheeler-Lea Amendment of 1938 prohibits charging different prices to different buyers of the same merchandise and requires sellers that offer a service to one buyer to make the same service offer available to all buyers.

Question 32

The Federal Trade Commission (FTC) is the primary agency responsible for ensuring free trade among businesses and for investigating false, deceptive, or misleading claims in advertising and other types of marketing communications.

Question 33

The Consumer Product Safety Commission (CPSC) is responsible for ensuring that food is safely processed and packaged.

Question 34

The agency with the most impact on marketing is the Federal Trade Commission (FTC).

Question 35

A firm violates the law concerning misleading or deceptive advertising only if it can be shown that the company expressly intended to do so.

Question 36

According to the FTC, an advertisement or marketing communication is deemed to be deceptive or misleading when a substantial number of people or the "typical person" is left with a false impression or misrepresentation of the product and/or the misrepresentation induces people or the typical person to make a purchase.

Question 37

Only consumers, not businesses, can sue under the guidelines of the FTC concerning deceptive and misleading advertising.

Question 38

When the FTC receives a complaint, the initial investigation must be confidential to protect both the FTC and the company in case no violation is found.

Question 39

In an investigation of misleading or deceptive advertising, if the FTC feels a violation has occurred, the first step in resolving the issue will be to issue a consent order.

Question 40

If the FTC issues a consent order and an agreement to stop the disputed marketing practice cannot be agreed upon, the FTC may then issue what is called an administrative complaint, which is a formal hearing before an administrative law judge.

Question 41

All claims made in an advertisement or marketing communication message must reflect the typical experience that a customer would expect to encounter from the use of the product.

Question 42

The FTC can receive a complaint about deceptive or misleading advertising from consumers, businesses, Congress, the media, or the FTC itself.

Question 43

Only the Court of Appeals has the power to levy civil penalties in cases where there is a violation in terms of deceptive or misleading marketing communications.

Question 44

The various industry regulatory agencies, such as the NAD, CARU and NARB, have the authority to issue consent decrees as well as cease-and-desist orders, but cannot levy civil penalties.

Question 45

While charges and complaints against businesses are filed with the Better Business Bureau, it does investigate the legitimacy of any charge or complaint. They just keep a record that is open for anyone to review.

Question 46

When complaints about advertising are received at the BBB, they are referred to the National Advertising Division (NAD) or the Children's Advertising Review Board (CARU) of the BBB.

Question 47

To be successful with cause-related marketing, the firm must demonstrate a genuine support for the cause.

Question 48

While consumers believe in environmentally safe products, they are not willing to purchase environmentally safe products unless the quality and price are at least equal to what they currently purchase.

Question 49

Ethics are

A) philosophical principles that serve as operational guidelines for both individuals and organizations concerning what is right and wrong
B) personal beliefs or standards used to guide an individual's actions
C) when firms make an exaggerated claim about its goods or services, without making any attempt to deceive or mislead
D) exaggerated claims made about a company's goods or services with the intent to deceive or mislead

Question 50

Morals are

A) philosophical principles that serve as operational guidelines for both individuals and organizations concerning what is right and wrong
B) personal beliefs or standards used to guide an individual's actions
C) when firms make an exaggerated claim about its goods or services, without making any attempt to deceive or mislead
D) when firms make an exaggerated claim about its goods or services, with the goal to deceive or mislead

Question 51

_____ help(s) us as individuals and organizations to establish boundaries regarding acceptable and unacceptable conduct.

A) Social responsibility
B) Self regulations
C) Ethics
D) Morals

Question 52

Boycotting a particular brand because you believe the company exploits child labor and has its goods manufactured in a country that has a history of violating human rights is an example of

A) social responsibility
B) self regulations
C) ethics
D) morals

Question 53

Marketing has been criticized for causing people to buy more than they can afford. One contributory factor to this situation is the easy access consumers have to credit cards. The average household credit card balance is

A) $5,216
B) $7,874
C) $9,312
D) $11,210

Question 54

Overspending appears to be an epidemic, cultural change in our society caused by people seeking immediate gratification. This cultural change has created which of the following criticism of marketing?

A) marketing causes people to buy more than they can afford
B) marketing increases the prices of goods and services
C) marketing capitalizes on human weaknesses
D) marketing shapes inappropriate cultural values

Question 55

Sandra believes that one reason she owes over $12,000 on her credit cards is all of the advertising she sees on television for various products. This is an example of the ethical concern that marketing

A) causes people to buy more than they can afford
B) increases the prices of goods and services
C) shapes inappropriate cultural values
D) capitalizes on human weaknesses

Question 56

Personal bankruptcy filings in the United States has grown by nearly _____ percent over the past 25 years.

A) 100
B) 175
C) 250
D) 350

Question 57

Underlying the criticism that marketing overemphasizes materialism is the assumption that

A) credit cards and debt is bad for society
B) materialism is wrong
C) bankruptcy is easy to obtain
D) people cannot control their spending

Question 58

The argument that marketing provides useful information that allows consumers to become better informed is a good counter argument to the criticism that marketing

A) causes people to buy more than they can afford
B) overemphasizes materialism
C) increases the prices of goods and services
D) capitalizes on human weaknesses

Question 59

The argument that a company cannot reduce marketing expenditures unless all of its competitors also reduce theirs is a counterargument to the criticism that marketing

A) causes people to buy more than they can afford
B) overemphasizes materialism
C) increases the prices of goods and services
D) capitalizes on human weaknesses

Question 60

The argument that marketing is a significant contributor to the GDP is a counterargument to the criticism that marketing

A) causes people to buy more than they can afford
B) overemphasizes materialism
C) increases the prices of goods and services
D) capitalizes on human weaknesses

Question 61

Traditionally marketing activities such as advertising, sales promotion, personal selling, direct mail, and other marketing activities account for about 8.8% of the United States GNP. Of this total expenditures on marketing, advertising accounts for about _____ percent.

A) 10
B) 25
C) 40
D) 50

Question 62

Dawn enjoys watching the new ads on the Super Bowl every year. But when she learned that it costs over $2.6 million just for one 30 second ad, she started wondering how much her can of Pepsi would cost if they did not advertise. This is an example of the ethical concern that marketing

A) causes people to buy more than they can afford
B) increases the prices of goods and services
C) shapes inappropriate cultural values
D) capitalizes on human weaknesses

Question 63

In comparing the market share to advertising expenditure for the top restaurant chains, _____ has the highest market share, 7.7%, but also spends the most on advertising, $727.7 million.

A) Burger King
B) McDonald's
C) Subway
D) Wendy's

Question 64

The U.S. megabrand which has the highest level of ad spending at $1.5 billion is

A) Chevrolet
B) Ford
C) Nissan
D) Verizon

Question 65

Advertisements that offer female consumers who are unhappy with their personal appearance services such as abdominoplasty, electrolysis, breast enhancements, and liposuction are subject to criticism that marketing

A) causes people to buy more than they can afford
B) increases the prices of goods and services
C) shapes inappropriate cultural values
D) capitalizes on human weaknesses

Question 66

In terms of personal services, marketers have been criticized for promoting the idea that happiness depends on one's personal attractiveness. This is an example of the ethical concern that marketing

A) causes people to buy more than they can afford
B) increases the prices of goods and services
C) shapes inappropriate cultural values
D) capitalizes on human weaknesses

Question 67

Advertisements that offer male consumers products that will enhance their personal appearance and sexual performance are subject to the criticism that marketing

A) causes people to buy more than they can afford
B) increases the prices of goods and services
C) shapes inappropriate cultural values
D) capitalizes on human weaknesses

Question 68

Carla has watched several ads about weight loss programs and has decided that she really needs to lose weight so she will be more attractive. This is an example of the ethical concern that marketing

A) causes people to buy more than they can afford
B) increases the prices of goods and services
C) shapes inappropriate cultural values
D) capitalizes on human weaknesses

Question 69

Advertisements that use sex and nudity to appeal to consumers to purchase a product are subject to the criticism that marketing

A) causes people to buy more than they can afford
B) increases the prices of goods and services
C) shapes inappropriate cultural values
D) capitalizes on human weaknesses

Question 70

Advertisements directed towards children, especially young children, are subject to the criticism that marketing

A) causes people to buy more than they can afford
B) increases the prices of goods and services
C) shapes inappropriate cultural values
D) capitalizes on human weaknesses

Question 71

Byron has noticed that his 3-year old son was already being influenced by advertising and wondered if this was good. This is an example of the ethical concern that marketing

A) causes people to buy more than they can afford
B) increases the prices of goods and services
C) shapes inappropriate cultural values
D) capitalizes on human weaknesses

Question 72

Casey believes that all of the sex and nudity that is used in advertising has led her daughter to become sexually active at too early an age. This is an example of the ethical concern that marketing

A) causes people to buy more than they can afford
B) increases the prices of goods and services
C) shapes inappropriate cultural values
D) capitalizes on human weaknesses

Question 73

Critics of marketing cite all of the following examples as proof that marketing shapes inappropriate cultural values except

A) the demand for products to enhance one's personal appearance
B) the current advertising of personal products such as condoms, underwear, feminine hygiene products and male sexual enhancement drugs
C) the advertising of cigarettes and alcohol and increased consumption of these products by young adults
D) the influence of advertising on young children

Question 74

All of the following are reasons marketers give for why children are such an attractive market except

A) the size of the market (36 million between 4 and 12)
B) the ease with which children can be influenced and led to purchase products
C) the income of children between 4 and 12 ($31.7 billion)
D) the influence by children on $565 billion of their parent's spending

Question 75

Chris saw an advertisement by a local retailer for a big discount on a television set. When he arrived at the store, they were out of the model that was advertised so the salesperson showed him a more expensive model. This is an example of the ethical concern that marketing

A) causes people to buy more than they can afford
B) increases the prices of goods and services
C) uses deceptive and misleading techniques
D) capitalizes on human weaknesses

Question 76

Rachel is a purchasing agent for a large company in Georgia. A salesperson offered her free tickets to an Atlanta Braves baseball game if she placed an order with their company. This is an example of the ethical concern that marketing

A) causes people to buy more than they can afford
B) increases the prices of goods and services
C) uses deceptive and misleading techniques
D) violates consumer rights to privacy

Question 77

Chris saw an advertisement by a local retailer for a large discount on a television set. When he arrived at the store, they were out of the model that was advertised so the salesperson showed him a more expensive model. This is an example of

A) bait and switch
B) switch-off
C) puffery
D) a consent order

Question 78

Aimee is concerned that her credit card company, and her bank, are selling her personal information to other companies. This is an example of the ethical concern that marketing

A) causes people to buy more than they can afford
B) increases the prices of goods and services
C) uses deceptive and misleading techniques
D) violates consumer rights to privacy

Question 79

Lynne is the marketing director for a national toy company. When faced with an ethically questionable issue, her decision will be influenced by all of the following factors except

A) personal background and experiences
B) individual consumers who purchase the toys
C) consequences of previous actions she took in similar ethically questionable situations
D) social influences

Question 80

The legislation that prohibited monopolies and activities designed to restrict free trade was the

A) Sherman-Antitrust Act of 1890
B) Clayton Act of 1914
C) Robinson-Patman Act of 1936
D) Wheeler-Lea Amendment of 1946