Marketing bán hàng - Chapter 20: Regulation of advertising and promotion

Chapter 20Regulation of Advertisingand PromotionAdvertising ControlsSelfRegulationStateRegulationFederal RegulationRegulation and Control of Advertising Regulatory concernsNature and content of the adPotential of the ad to offend, exploit, mislead, and/or deceive consumersSelf regulation: Voluntary internal regulation practiced and promoted within an industry3Self-Regulation by Trade AssociationsIndustries prone to controversy develop their own advertising guidelines Many professions maintain guidelines through local, state, and national organizations4Self-Regulation by BusinessesBetter Business Bureau (BBB): Promotes fair advertising and selling practices across industries at the local levelCouncil of Better Business Bureaus: Provide effective control over advertising practices at the national level5Advertising Self-Regulatory Council (ASRC)Earlier known as the National Advertising Review Council (NARC)Mission - To sustain high standards of truth and accuracy in national advertisingAdvertising Accountability Program - Regulates online behavioral advertising (OBA) across the Internet6National Advertising Division of the Council of Better Business Bureaus (NAD)Examines product performance, superiority, scientific and technical claimsHas lawyers to scrutinize all types of media to find misleading advertisementsHelps various industries to develop effective self-regulatory programs7National Advertising Review Board (NARB)Appealed for additional review by advertisers who disagree with NAD’s findings Composed of advertising professionals and prominent public interest members8CARU ActivitiesGeneral activitiesReview and evaluate child-directed advertising in all mediaOversee online privacy issues that affect childrenAdvise advertisers and agenciesMaintain self-regulatory guidelines for children’s advertisingMission of the ERSPDiscourage advertising and marketing in the electronic retailing industry that contains unsubstantiated claimsEnhance consumer confidence in electronic retailingDemonstrate a commitment to meaningful and effective self-regulationSelf-Regulation by Advertising AssociationsActively Monitoring and Policing Advertising PracticesAmerican Association of Advertising AgenciesAmerican AdvertisingFederationAdvertisersAgenciesMediaAdvertising ClubsAdvertising AssociationsAmerican Association of Advertising Agencies (AAAA) - Issues guidelines for specific types of advertisingAmerican Advertising Federation (AAF)Has standards for truthful and responsible advertisingInvolved in advertising legislationInfluences agencies to abide by its code and principles12Self-Regulation by MediaHave requirements and restrictions depending on the size and nature of the publicationSome test the products advertised and offer refunds if they are later found to be defectiveNewspapers and magazines Major TV networks have incorporated the NAB codes into their standardsAll commercials intended for airing on a network or an affiliate has to be reviewed Network standards change constantlyTelevision and radio13Federal Regulation of AdvertisingFederal Communications Commission (FCC)Food and Drug Administration (FDA)U.S. Postal ServiceBureau of Alcohol Tobacco, and FirearmsFederal Trade Commission (FTC)Major Divisions of the FTCSeeks to prevent business practices that restrain competitionEnforces antitrust lawsBureau of Competition Provides economic analysis and support to antitrust and consumer protection investigationsAnalyzes the impact of government regulation on competition and consumersBureau of EconomicsProtects consumers against unfair, deceptive, or fraudulent practices Investigates and litigates practices alleged to be unfair to consumersBureau of Consumer Protection15Deceptive Advertising Perspective of reasonable consumerLikelihood of misleading consumerMateriality – misrepresentation orpractice is likely to affect consumers’purchase decisionPufferyBayer – “The wonder drug that works wonders”BMW – “The ultimate driving machine”Nestlé – “The very best chocolate”Snapple – “Made from the best stuff on earth” Ways the FTC Handles Deceptive AdvertisingFTC programs to prevent deceptive advertisingAffirmativeDisclosureAdvertising SubstantiationFTC programs to deal with deceptive advertisingafter it occursCease-and-Desist OrdersConsentOrdersCorrectiveAdvertisingAdditional Federal Regulatory AgenciesFederal Communications CommissionFood and Drug AdministrationU.S. Postal ServiceBureau of Alcohol, Tobacco, and FirearmsAdditional federal regulatory agenciesand departments that regulateadvertising and promotionThe Lanham ActProhibits any false description or representation To win a false advertising lawsuit containing a comparative claim, one must prove that:False statements have been made about the advertiser’s or one’s productAds deceived or had the tendency to deceive a substantial segment of the audienceDeception was material or meaningful and can influence purchase decisionsFalsely advertised products or services are sold in interstate commerceOne will incur loss of sales or of goodwill as a result of the false statements20National Association of Attorneys General (NAAG)Regulates:Airfare advertisingCar-rental price advertisingAdvertising dealing with nutrition and health claims in food ads21Regulation of Sales PromotionContests and sweepstakes - Marketers must ensure that:Contest or sweepstake cannot be classified as lotteryFull disclosure of the promotion is madePremiumMarketers should list its value as the price at which the merchandise is soldTrade allowancesShould follow the stipulations of the Robinson-Patman Act22Regulation of Direct MarketingTelephone Consumer Protection ActPay-per-call RuleFTC “Do-not-call” RegistryTelemarketing facesincreased regulationFTC & US Postal Service police direct-response ads closelySelf-regulation occurs through various industry groups Marketing on the InternetUndisclosed profiling of consumers by web marketers is a major concernNetwork Advertising Initiative (NAI)Created by companies that collect Internet usage data Provides self-regulatory codesChildren’s Online Privacy Protection Act (COPPA): Restricts collecting information from children via the Internet24Regulation of Social MediaSafeguarding of personal informationGuidelines for online endorsementsOnline endorsers and bloggers must disclose any material connection to company or brandPaid endorsers posting on social media and e-commerce sitesMust identify themselves as suchAnti-Spamming LegislationCAN-SPAM Act of 2003 email rulesConspicuous notice of the right to opt-outA functioning Internet-based mechanism that a recipient may use to opt out of future commercial e-mail messagesClear and conspicuous identification that the message is an advertisementA valid physical postal address for the sender