Question 1

What distinguishes a door-to-door salesperson from a telemarketer?

Accepted Answer

Licensing requirements for door-to-door selling are regulated by consumer protection legislation, while telemarketing licences are not individually required in many jurisdictions. Door-to-door salespeople physically show up at consumers' homes to make sales pitches, while telemarketers call from a remote location.

Question 2

Which of the following is applicable to direct-marketing practices?

Accepted Answer

Both federal and provincial regulations apply to the practice.

Question 3

Which of the following is recommended in addition to best practices for managing legal risks that require basic shipping terminology to be defined to facilitate employees' understanding of the implications of contractual terms?

Accepted Answer

The answer of Which of the following is recommended in...

Question 4

What is the most significant consequence when a seller refuses to sell to a purchaser on the same terms as those that are offered to the purchaser's competitors?

Accepted Answer

Refusal to deal is a reviewable matter under the Competition Act. It is considered anti-competitive behavior and a violation of the Act if a seller refuses to sell to a purchaser on the same terms as those that are offered to the purchaser's competitors. This behavior can limit competition, reduce consumer choice and harm economic efficiency.

Question 5

In what way are the practices of predatory pricing and exclusive dealing similar to each other?

Accepted Answer

Both predatory pricing and exclusive dealing reduce or eliminate competition. Predatory pricing involves setting excessively low prices to drive competitors out of business, while exclusive dealing involves a company requiring a distributor or retailer to only sell its products and not those of its competitors. Both practices can harm consumers by limiting choice and potentially raising prices. However, neither practice is subject to criminal sanctions, and while both may be subject to remedies from the courts, this is not a unique similarity between the two practices.

Question 6

Which of the following has jurisdiction to regulate unsolicited telemarketing communication as a result of the Canadian National Do Not Call List becoming operational on September 30, 2008?

Accepted Answer

The Canadian Radio-television and Telecommunications Commission has jurisdiction to regulate unsolicited telemarketing communication as a result of the Canadian National Do Not Call List becoming operational on September 30, 2008.

Question 7

Which of the following best practices for managing legal risk may also result if a producer establishes an informed and properly responsive customer relations process?

Accepted Answer

An informed and properly responsive customer relations process can help identify early warning signs of flawed design and production techniques, allowing the producer to address the issue and avoid potential legal risks. This process may involve gathering feedback from customers and monitoring product performance for any issues or complaints. This approach can also help build trust with customers and reduce the likelihood of negative reviews or legal claims.

Question 8

Which of the following are common characteristics associated with anticompetitive behaviour?

Accepted Answer

The answer of Which of the following are common characteristics...

Question 9

Which of the following is the result of the online industries' need to establish principles for protecting e-commerce customers?

Accepted Answer

The Canadian Code of Practice for Consumer Protection in Electronic Commerce was developed by the Canadian government and industry stakeholders as a set of voluntary principles for protecting e-commerce customers. It outlines standards for online business practices, such as disclosure of information, privacy protection, and dispute resolution. This code aims to build consumer trust and confidence in the online marketplace.

Question 10

Ramsay Group Insurance Inc. has been advised by a major insurance underwriter that it must carry a number of the underwriter's less popular products and refrain from carrying any competitor's products. What type of offence has the insurance underwriter committed?

Accepted Answer

The answer of Ramsay Group Insurance Inc. has been advised...

Question 11

Which of the following would most strongly support the adoption of best practices by a producer to minimize its exposure to sources of legal risk?

Accepted Answer

This option highlights the potential high cost associated with legal risks and the impact they can have on the profitability of a business. By adopting best practices, the producer can minimize its exposure to legal risks, thus reducing the likelihood of preventable injuries and associated costs.

Question 12

Which of the following is a distinguishing characteristic of the Personal Information Protection and Electronic Documents Act?

Accepted Answer

The distinguishing characteristic of the Personal Information Protection and Electronic Documents Act is that the absence of a similar provincial law allows the federal act to be applied provincially. This means that the act can be enforced across Canada, regardless of whether or not a specific province has its own privacy legislation. The other options listed are not distinguishing characteristics of this particular act.

Question 13

What is the term for a marketing scheme where participants are knowingly being sold unreasonable quantities of products or products?

Accepted Answer

The term for a marketing scheme where participants are knowingly being sold unreasonable quantities of products or products is inventory loading. This practice is often used in multi-level marketing schemes where participants are pressured to purchase products in large quantities to advance within the company or earn commissions.

Question 14

What is the recommended source for acquiring knowledge of the standards that must be met for both the production and labelling of goods produced by a manufacturer?

Accepted Answer

Trade association and specialized professional advisors are the recommended sources for acquiring knowledge of the standards that must be met for both the production and labeling of goods produced by a manufacturer. These sources can provide specific industry knowledge and expertise on regulations and standards that may apply to a particular product. The Trade Association Conformity Continuum Guidelines may also be a helpful resource, but they are not as commonly used as consulting with industry experts. The Competition Bureau and its immunity program are not relevant to this topic.

Question 15

Which of the following is a broad concept designed to generate sales, information requests, and store or website visits that is regulated by the Competition Act?

Accepted Answer

Direct marketing is a broad concept designed to generate sales, information requests, and store or website visits through various methods such as mail, email, telephone, or internet advertising. It is regulated by the Competition Act to ensure fair competition and prevent anti-competitive practices. Tied selling, telemarketing, and door-to-door selling are specific types of direct marketing that may also be regulated by the Competition Act.

Question 16

Why is a business's market dominance typically intolerable to Canadian consumers?

Accepted Answer

When a business has market dominance, they often have the power to set higher prices for consumers since there are no other competitors to offer a lower price. This results in unfair and discriminatory pricing practices, which is typically intolerable to Canadian consumers.

Question 17

With respect to managing legal risks that often accompany marketing practices, contracting out of express terms versus implied terms and multi-level selling are sources of legal risk associated with which of the following?

Accepted Answer

The answer of With respect to managing legal risks that...

Question 18

To which of the following are the existence of a genuine selling opportunity and a realistic opportunity to expand relevant with respect to distributorships?

Accepted Answer

The existence of a genuine selling opportunity and a realistic opportunity to expand are relevant factors in determining the legality of a multi-level marketing plan. In contrast, the upward payment of fees and pyramid selling schemes are illegal practices that rely on recruitment rather than product sales, and the timely disclosure of earnings is important for transparency but not directly related to the existence and expansion of a selling opportunity.

Question 19

What is the source of legal risk associated with environmental claims and warnings on product labels?

Accepted Answer

The source of legal risk associated with environmental claims and warnings on product labels is related to both the product itself (due to the accuracy and veracity of the claims made about its environmental impact) and the promotion of the product (how these claims are communicated to consumers). Misleading or false environmental claims can lead to legal challenges, regulatory fines, and damage to a company's reputation.

Question 20

What type of criminally offensive product distribution plan fails to provide participants with the ability to return products on reasonable commercial terms?

Accepted Answer

Pyramid selling is a criminally offensive product distribution plan that typically involves recruitment of participants, payment of fees to participate, and rewards based on recruitment rather than the sale of product. In a pyramid selling scheme, participants are encouraged to purchase large quantities of products with the promise of large profits, but are not provided with the ability to return products on reasonable commercial terms. This lack of a return policy is a key characteristic of pyramid selling and is one of the reasons why it can be considered an illegal activity. Multi-level marketing, tied selling, and telemarketing are all legitimate marketing methods that may or may not include a return policy for participants.

Quiz 24: Sales and Marketing: Price, Distribution, and Risk Management