Deck 19: Promotional and Operational Issues in Marketing

Question 1

Under the common law doctrine of caveat emptor the duty falls on whom to examine products for defects and imperfections prior to purchase?

A) The store owner
B) The product creator
C) The product distributor
D) The buyer of the product

Answer 1

D

Question 2

Which federal U.S. agency holds the greatest responsibility for administering consumer production laws in the United States?

A) Department of Justice
B) Department of the Interior
C) Federal Trade Commission
D) Federal Protection Commission

Answer 2

C

Question 3

The doctrine outlining the limits of the government's authority to regulate speech that arises in private businesses' advertising is called the_________.

A) Commercial speech doctrine
B) Fair advertising doctrine
C) Truth in news doctrine
D) First Amendment

Answer 3

A

Question 4

The U.S. government seeks to censor an advertisement from Nike, alleging that the advertisement is unpatriotic. If Nike challenges the U.S. government's attempt, which level of constitutional scrutiny will the court analyze the claim under?

A) Rational basis
B) Intermediate scrutiny
C) Strict scrutiny
D) None of the above

Question 5

Shakers is a fitness brand whose main product is the ShakeExpress, a vibrating fitness belt that users wear around their midsection. When the ShakeExpress is turned on, it vibrates the area around the user's midsection back and forth. There is no medical evidence that this vibration alone produces weight loss or muscle toning. Despite this, Shakers recently ran an advertisement claiming, "Order the ShakeExpress now! Just wear it for a week, and you will lose 3-inches from your midsection from it alone!" This claim most likely:

A) Violates the FTCA because it is false or deceptive
B) Violates the FTCA because it is not backed by evidence
C) Violates the FTCA because it is unfair
D) A and B
E) B and C

Question 6

Kerwin works in ticket sales for the local team. Recently, the local team has had difficulty selling its luxury suites, because of a bad economy. However, Kerwin and the team make more money selling luxury suites than individual tickets. In an attempt to sell more tickets, the team runs an ad reading, "Affordable fun for all! Come down to the stadium and see the individual seating options you can purchase to entertain your family at a low cost!" Although the advertisement only highlights the individual seating options and not luxury suites, when people arrive at the stadium after reading the advertisement, Kerwin and the team refuse to show them the individual seating options. Rather, potential customers are only shown the luxury suites. This is an example of:

A) Bait advertising
B) Bargain advertising
C) Comparative advertising
D) None of the above

Question 7

Kaya is a professional athlete who makes a significant amount of income from product endorsements. As a professional athlete, Kaya eats a healthy diet. However, a candy bar company approaches her with a lucrative offer to endorse its product. The candy bar company is working to position its sugary chocolate bar as a healthy snack for kids. Kaya personally has never eaten the candy bar, but the price is right, so she enters into the endorsement. In the advertisement, Kaya says, "I eat these sugary chocolate bars daily, because they alone help me maintain my athletic physique!" Kaya:

A) Has not violated any law
B) Has violated FTC advertising regulations, because the claim is not her honest experience
C) Has violated FTC advertising regulations, because she is not a bona fide user
D) B and C
E) None of the above

Question 8

Kacey is a social media influencer who plans to host a sponsored sweepstakes on social media. Before hosting the sponsored sweepstakes on social media, Kacey should be aware of:

A) Relevant FTC guidelines
B) The respective social media platform's rules related to sweepstakes
C) Potential tax implications
D) All of the above
E) None of the above

Question 9

SubShop is a quick service, submarine sandwich restaurant. One of its main competitors is Golden's. SubShop and Golden's compete for the same customers and both of their Chief Marketing Officers understand the power of sport marketing in promoting their respective brands. Recently, Golden's secured one of the most lucrative sport sponsorships, an IOC top partnership, which allows it to be the exclusive quick service restaurant of the Olympic Games. SubShop is frustrated that it lost out of the opportunity. To overcome this loss, SubShop begins running a series of advertisements featuring former Olympic athletes, with the hope that consumers will believe it is an official partner of the IOC. SubShop's commercial:

A) Is a direct ambush
B) Is an indirect ambush
C) Is not ambush marketing
D) None of the above

Question 10

Generally speaking, consumers themselves can directly file lawsuits for false advertising claims under federal law.

Question 11

False advertising and deceptive consumer practices are illegal under both federal and state law in all 50 states.

Question 12

Political speech and obscene speech receive the same level of protection under the First Amendment.

Question 13

The only form of protected commercial speech is advertising.

Question 14

In Bailey v. Kentucky Racing Commission, the Kentucky Horse Racing Authority imposed rules that prohibited racetrack advertising.

Question 15

A consumer is an individual who purchases goods or services for commercial resale.

Question 16

The Federal Trade Commission is responsible for investigating alleged violations of federal consumer protection statutes.

Question 17

Ambush marketing is a marketing practice used by companies to confuse consumers as to the status of a company as an official sponsor of a sport event.

Question 18

For an athlete endorsement to satisfy the FTC deceptive trade practices regulations it must reflect the honest opinion or experience of the athlete.

Question 19

What are the Central Hudson factors used to determine? List the four Central Hudson factors and briefly discuss how they apply.

Question 20

You advise a company who operates in a very competitive industry. The company is preparing to launch an advertising campaign that questions the quality of its competitor's products. Related to potential claims under Section 43 (a) of the Lanham Act, what advice would you give your client related to how to structure the advertising claim to avoid potential litigation?

Question 21

State U is a publicly funded university that operates a successful athletics department. Recently, a few members of State U's football team have secured individual endorsement deals with a prominent beverage company. Notably, these deals were negotiated directly between the individual players and the beverage company; State U is not a party to the agreement nor is every player on the team. The beverage company has asked that its logo be placed on the respective players' State U jerseys that they wear on game days. One Saturday in the fall, the respective players arrive on game day with the beverage company's logo sewed onto their jerseys. State U objects and tells the players they will be suspended if they do not remove the beverage company's logo from their jerseys. The players refuse to remove the beverage company's logo from their jerseys and are suspended. Below, analyze whether the players can successfully assert a violation of their First Amendment right using applicable commercial speech theories.