Deck 4: Social Ethical and Regulatory Aspects of Advertising and Promotion

Question 1

Proponents of advertising claim that advertising addresses a wide variety of basic human needs.

Answer 1

True

Question 2

Vertical cooperative advertising is an advertising technique whereby a manufacturer and dealer share the expense of advertising.

Answer 2

True

Question 3

It is possible to make a reasonable argument that the massive consumption that advertising upholds and glorifies is actually quite good for American society, and for other cultures around the world.

Answer 3

True

Question 4

The Children's Food and Beverage Advertising Initiative is a voluntary commitment, signed by many well­known corporations, to stop advertising on children's television programs.

Question 5

Critics of advertising claim that advertising carries little of any good product information and that most advertising is biased, limited, and inherently deceptive.

Question 6

The three primary areas of advertising regulation are obscenity and profanity, deception, and unsolicited or direct marketing.

Question 7

The social aspects of advertisement are often volatile.

Question 8

The FTC has regularly issued warnings to tobacco companies about ads that have been shown to cause young people to start smoking, backed up by decades of substantial evidence to this effect published by reputable medical journals.

Question 9

The calls for restrictions on advertising to children over the years have been based on a number of concerns, one of which is the promotion of superficial material things as necessary and valuable.

Question 10

As a promotional tool and an industry, advertising gets a lot of attention, scrutiny, and criticism today because it is so conspicuous and has established a global presence.

Question 11

The FTC's regulations on deception have no authority over omissions or missing information about a product, but
only cover those false statements or misleading claims actually made by the advertiser.

Question 12

Critics of advertising argue that advertising creates a tendency of conformity and status-seeking behavior.

Question 13

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.

Question 14

Critics of advertising claim that advertisements do much more than just "shuffling of total demand," but contribute to the increase of total demand.

Question 15

In advertising, deception refers to making false or misleading statements in advertisements.

Question 16

Even those who view advertising positively for other reasons often admit that it rarely contributes to art and culture, and art and culture have little room for advertising.

Question 17

It is almost impossible to legislate against emotional appeals in ads, since even if they seem exaggerated or inaccurate, they are unquantifiable so there is no way to prove this.

Question 18

Subliminal advertisement has been proved to be an effective way of embedding images and messages into an advertisement that influences the unconscious minds of people.

Question 19

Societies tend to monitor advertising to determine what is irresponsible, unethical, or illegal.Despite social shifts and
technological advances, a culture's views on what is acceptable and unacceptable never change.

Question 20

Advertisers of "controversial products" are in danger of deceiving the public when they attempt to show social
responsibility, such as beer companies spending millions a year promoting responsible drinking.

Question 21

The cost of products are lowered:

A)when there are high success rates of a product.
B)by lowering the economies of scale of a product.
C)when there is a high inelasticity of demand for a product.
D)when there are little or no competitors with a similar product.

Question 22

The three divisions within a local Better Business Bureau-merchandise, financial, and solicitations-investigate
advertising practices of companies in their geographic area.

Question 23

According to Maslow's hierarchy of needs structure, ads for breakfast cereals and soft drinks can be thought of as promotions for products that address:

A)physiological needs.
B)love and belonging needs.
C)self-actualizing needs.
D)esteem needs.

Question 24

The main restriction of direct mail sweepstakes, as imposed by Congress, involves the requirement that they are randomly and fairly distributed to a wide range of communities and addresses throughout the 50 states.

Question 25

The first government restriction on telemarketing required companies to remove households from their dialing lists when residents requested this.

Question 26

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.

Question 27

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

A)Market segmentation
B)Operating costs
C)Inelasticity of demand
D)Economies of scale

Question 28

A high-end specialty store, recognized nationwide for its prestigious reputation, is busy with customers eyeing and buying costly items of clothing with designer labels.They're also adding $400 purses, $500 shoes, and $1,000 bracelets and necklaces to their ensembles.Which of the following basic needs of Maslow's Hierarchy are most likely being fulfilled by these purchases?

A)Extrinsic needs
B)Need for affiliation
C)Esteem needs
D)Physiological needs

Question 29

Since there has been little regulation of advertising and promotion on the Internet to date, the industry itself has had to act as its main governing body.

Question 30

When an NFL football player begins endorsing a line of energy bars and protein drinks, he is required to genuinely demonstrate using the product in the advertisement although does not have to utilize the product in day to day life.

Question 31

The FTC's advertising substantiation program, set up in the 1970s, requires that documented evidence supporting any claims is made available to consumers, and that such evidence provides a "reasonable basis" for believing that the claims are true.

Question 32

Supporters of industry self-regulation claim that self-regulation helps avoid unnecessary government meddling.

Question 33

Which of the following forms the lowest order of needs in Maslow's hierarchy of needs theory?

A)Physiological needs
B)Needs for affiliation
C)Self-actualization needs
D)Intrinsic needs

Question 34

The field of public relations is not restricted by the same types of laws as other business elements of the promotional and marketing mix.

Question 35

According to Maslow's hierarchy of needs theory, which of the following is the highest order of all human needs?

A)Esteem needs
B)Physiological needs
C)Safety needs
D)Self-actualization needs

Question 36

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

Question 37

An advertisement for a peanut butter product, of one firm, that compares itself to the peanut butter product, of another firm, would be considered illegal because it mentions brand-name goods produced by another firm.

Question 38

Many consumers buy products that they perceive to have prestige and status which would be considered needs under Maslow's hierarchy theory.

A)growth
B)affiliation
C)self-actualization
D)esteem

Question 39

The CAN SPAM Act does not outlaw all unsolicited emails.

Question 40

Consumer groups have been just as successful as the FTC in restricting children's advertising.

Question 41

Which of the following best describes primary demand?

A)It is the demand for an entire range of various products.
B)It is the demand for a specific brand.
C)It is the demand for a specific product.
D)It is the demand for an entire product category.

Question 42

is an advertising technique whereby a manufacturer and dealer share the expense of advertising.

A)Differentiation
B)Subliminal advertising
C)Market segmentation
D)Vertical cooperative advertising

Question 43

are moral standards and principles against which behavior is judged.

A)Ethics
B)Appropriations
C)Sects
D)Dailies

Question 44

The Cheeseburger bill passed by the U.S.House of Representatives:

A)restricts advertisements featuring high­calorie and high­fat foods during children's programming.
B)prevents falsifying nutrition information for fast foods.
C)bars the promotion of toys to children that tie in with fast foods, sugary drinks, and salty snacks.
D)blocks people from suing food companies for their obesity.

Question 45

Although the courts and the FTC have been quite specific about defining many other practices, the definition of has always been relatively vague.

A)unfair advertising
B)copyright infringement in advertising
C)false labeling and packaging
D)phishing in online advertising

Question 46

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?

A)Ad agencies that knowingly make false claims
B)Advertisers that lure children into dangerous or unhealthy behaviors
C)TV and radio stations that violate rules on airing profanity or sexually explicit materials
D)Print media with ads that include erotic images or language

Question 47

It is believed that advertisers deceive via subliminal advertising by:

A)influencing people to buy things via word of mouth advertisement.
B)providing offers to the public that would stimulate them to buy their products.
C)exaggerating the features of a product and providing assurances to stimulate people to buy a product.
D)embedding hidden messages or images within an advertisement.

Question 48

Well­known illustrator Andy Warhol felt strongly that the American ads that had promoted the nation's most popular products over the decades were:

A)visual manifestations of a sick society overtaken with consumerism and greed.
B)anti-elitist artworks for the masses depicting ordinary goods used by both rich and poor.
C)pioneering graphic innovations that visually displayed the power of elitism.
D)flashy images and tasteless visuals that cluttered the cultural landscape.

Question 49

Vertical cooperative advertising is usually legal, except when:

A)unquantifiable emotional appeals are involved.
B)a representation, omission, or practice is misleading.
C)a firm uses monopoly power to dominate the other.
D)bogus advertising allowances are given in the form of hidden price concessions.

Question 50

Which of the following is true about advertising of alcohol and cigarettes?

A)Brands in these categories don't spend a lot of money on advertisements to truly influence consumers.
B)These ads are usually designed to be subliminal, suggesting but not causing behavior.
C)Brands in these categories are only advertised as part of other programs which do not interest children.
D)Advertising cannot create primary demand in mature product categories such as these.

Question 51

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:

A)plus-size models who do not fit the narrow norm of beauty.
B)women, who were not models, displaying various ethnicities, looks, and sizes.
C)both men and women using Dove products.
D)endorsements by famous elderly actresses with young-looking skin.

Question 52

Which aspects of advertising are legal but fall into an ethical gray area, making them almost impossible to legislate against?

A)Disclaimers
B)Emotional appeals
C)Testimonials
D)Contests and sweepstakes

Question 53

Which of the following claims demonstrates puffery in advertising?

A)"Only Crest Earns the Dental Seal of Approval Among All Major Brands!"
B)"Ford Trucks Have Lower MPG than Chevy Trucks!"
C)"Tide Beats Cheer in Sales 8th Year in a Row!"
D)"World's Best Cup of Coffee Served with a Smile Here!"

Question 54

What is the most fundamental ethical issue in advertising?

A)Exaggeration, which is a serious but increasingly common practice
B)Taste, particularly regarding society's exposure to offensive messages
C)Materialism, which also is a key legal issue
D)Deception, particularly false or misleading statements

Question 55

Three teenage girls who hang around together all start to smoke cigarettes, and eventually start to drink beer on weekends.With reference to recent research results of the Federal Trade Commission, the cause for the teenage girls' habits:

A)would most strongly influenced by families, friends, and peers.
B)have been influenced by advertisements portraying it as cool.
C)stem from hereditary traits.
D)directly relate to advertising campaigns of criminally negligent firms.

Question 56

Stephen Fox, a history and social observer, concludes on the history of American advertisement as:

A)genuine and trustworthy.
B)simple and smart.
C)irrelevant and incoherent.
D)superficial and hedonistic.

Question 57

Which of the following is true about ethics?

A)It is based on personal judgement.
B)It is applicable to business alone.
C)It is strongly looked down upon in society.
D)It is the basic structure of business.

Question 58

Which of the following best describes stealth sponsorship?

A)It is when corporations pay journalists to give negative opinions about their competitors in their editorials.
B)It is when corporations embed hidden messages in newspaper advertisements to unconsciously stimulate ^{people to want something.}
C)It is when journalists are paid by corporations to receive favorable treatment in their editorials.
D)It is when corporations partner with ancillary firms that they deal with to receive monetary favors from them.

Question 59

What was one of the government's earliest restrictions that targeted specific techniques and policies being used in programming and advertising designed for children?

A)The Children's Food and Beverage Advertising Initiative
B)The Nutrition Labeling and Education Act
C)The "Cheeseburger Bill"
D)The Children's Television Act

Question 60

Sarah, a 13-year-old girl, came across an advertisement that displayed a new trendy hair color aimed at a mature audience.Intrigued by the advertisement, Sarah goes out and buys the product.This is an example of .

A)primary demand stimulation
B)subliminal advertising
C)vertical cooperative advertising
D)phishing

Question 61

Which of the following is best describes the concept of "consumerism"?

A)It is a relatively recent concept first observed in the 21st century.
B)It involves consumer-oriented promotions such as coupons, premiums, and sweepstakes.
C)It defines the tactics that individuals and groups use to enact laws, pressure firms, or target unethical practices regarding goods and services.
D)It refers to the ongoing expansion of contemporary marketing beyond traditional production of ads and commercials, including e-commerce and behavioral targeting.

Question 62

Wrinkle Free were served a notice by the FTC for releasing a deceptive advertisement regarding a cream they had launched.However, the advertising agents of Wrinkle Free failed to comply to the notice.Which of the following remedies would FTC employ following noncompliance by Wrinkle Free?

A)The FTC will dissolve the firm for non-compliance.
B)The FTC would issue a cease-and-desist order to Wrinkle Free.
C)The FTC would allow Wrinkle Free to continue airing the advertisement if it agrees to add a disclaimer to all their products.
D)The FTC would order that Wrinkle Free pay a fine and double the fee to air the advertisement.

Question 63

What concept is involved when a statement that occurs in print is untrue and damages the reputation of a person, based on words found in magazine, newspaper, direct mail, or Internet reports?

A)Libel
B)Slander
C)Larceny
D)Appropriation

Question 64

TetraCom, a personal computer manufacturer, launched an advertisement comparing its computer with a competitor's computers.However it was found to be an unfair claim.In order to justify its fairness, TetraCom would be required to include a(n) .

A)testimonial
B)stealth sponsorship
C)consent order
D)disclaimer

Question 65

Which of the four primary consumer protection organizations was the first to be established, and is best known for its publication of Consumer Reports?

A)Consumer Federation of America
B)Consumers Union
C)Consumer Alert
D)Commercial Alert

Question 66

are unsolicited commercial messages sent through the e-mail system.

A)Blogs
B)Spam
C)Premiums
D)Infomercials

Question 67

Cloud9, a social networking site, has generated a large amount of revenue from selling information regarding its users preferences of soft drinks to a soft drink manufacturing and advertising firm.This is an example of .

A)crowdsourcing
B)appropriation
C)phishing
D)behavioral targeting

Question 68

Marketers have to be particularly cautious about using this area.

A)coupons
B)telemarketing
C)premiums _{d. trade allowances}
As a form of promotion, because fraud abounds in

Question 69

The biggest concern over the future of behavioral targeting involves its growing ability to:

A)tap into confidential credit card databanks.
B)jam global traffic with billions of unwanted emails.
C)hack into sensitive government websites.
D)track a person's movement on the Internet.

Question 70

is an insidious version of spam where Web users are enticed into entering personal information on a fake website that is forged to look like it is from a bank, the IRS, or other organizations.

A)Puffery
B)Appropriation
C)Blogging
D)Phishing

Question 71

In a legislation passed in the 1990s, the FTC's role in regulating advertising was expanded regarding:

A)nutrition labeling.
B)spam.
C)telemarketing.
D)direct mail.

Question 72

The was established as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

A)Library of Congress
B)Federal Communications Commission
C)Consumer Finance Protection Agency
D)National Consumer Agency

Question 73

The Telephone Consumer Fraud and Abuse Prevention Act of the mid-1990s:

A)required telemarketers to maintain a list of customers who do not want to be called.
B)banned recorded messages and robocalls.
C)restricted telemarketers from calling customers more than twice a month.
D)allowed the use of "robocalls" that contain recorded messages.

Question 74

was established by the Better Business Bureau to evaluate ads directed at children based on guidelines that encourage sensitivity to their level of sophistication and knowledge, as well as emphasis on positive social traits such as friendship and kindness.

A)The Family Research Council
B)The Children's Food and Beverage Advertising Initiative
C)The Children's Advertising Review Unit
D)The Children's Television Act

Question 75

Despite being registered under the Do Not Call Registry, a person can receive calls from:

A)businesses they've contacted in the last six months.
B)politicians and pollsters.
C)companies that have delivered something to the person in the last 24 months.
D)co-operatives and insurance firms.

Question 76

The Wheeler-Lea Amendment in 1938 greatly influenced the future of advertising in America by:

A)establishing the powerful Federal Trade Commission (FTC).
B)allowing the FTC to stop practices that were misleading, regardless of their impact on competition.
C)granting industries the right to form self-regulatory organizations to reduce FTC interference.
D)broadened the FTC's power to practices that were unfair to competitors alone.

Question 77

is the use of pictures or images owned by someone else without permission.

A)Defamation
B)Spamming
C)Phishing
D)Appropriation

Question 78

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 one­sixth 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.
HYPERLINK http://www.adbusters.org/home/) (http://www.adbusters.org/home/)
(Scenario 4-1) Organizations like Adbusters see advertising as superficial.This view of advertising says that it:

A)is not entertaining, or even interesting, to consumers.
B)has no effect on demand for specific brands of products.
C)offers little information based on function or performance.
D)ignores the hedonic aspects of products.

Question 79

If firms decide to use comparison advertisements, they:

A)may be required by the FTC to substantiate their claims.
B)share the costs of advertising with local dealers and distributors.
C)are acting in opposition to the recommendations of the American Association of Advertising Agencies.
D)cannot legally mention a competing firm or brand by name.

Question 80

An established cereal manufacturer is being investigated by the FTC for claims that its oatmeal can repair damaged arteries and prevent heart disease.Its executives are aware that if the claims are found to be false, the firm may receive the FTC's most severe penalty, which involves:

A)ordering corrective advertising.
B)issuing a cease-and-desist order.
C)an order to insert a disclaimer.
D)dissolving the corporation.