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Deceptive Advertising

Deceptive Advertising

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Published by Gaurav Kumar

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Published by: Gaurav Kumar on Nov 10, 2009
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Assignment
BUSINESS ETHICS
Submitted To:
Prof. PremanandShetty
Submitted By:
GAURAV KUMAR08PG304Marketing B
 
DECEPTIVE ADVERTISING ANDMARKETINGPRACTICES
 
DECEPTIVE ADVERTISING AND MARKETING PRACTICES
Introduction
Deceptive advertising and marketing practices have been around since the beginningof time and are still prevalent today. Sometimes it is done unknowingly by anadvertiser, however, more often than not, it is done with the intent to mislead theconsumer, making deceptive advertising a relevant marketing ethics issue. This paper will first define deceptive advertising and marketing, and describe different types of deception. Next, it will examine what makes an advertisement or marketing practicedeceptive. A look into the deceptive advertising issues of the 1990’s as well asreviewing the monitoring agencies, and addressing liability issues and the penaltiesassociated with deceptive advertising will also be covered.
What is Deceptive Advertising and Marketing?
An advertisement or marketing practice is considered deceptive if there is a"representation, omission, or practice that is likely to mislead the consumer". Theadvertisement does not necessarily have to cause actual deception, but, according tothe Federal Trade Commission (FTC), the act need only likely mislead the consumer (Federal Trade Commission, 1998 [on-line]).
Types of Deceptive Advertising
According to David Gardner (1975) there are three types of deceptive advertising:Fraudulent advertising which is an outright lie; false advertising which "involves aclaim-fact discrepancy", such as not disclosing all the conditions to receive a certain promotion or price; and misleading advertising which involves a "claim-belief interaction" (Assael, 1998). An example of claim-belief deception is the Warner-Lambert Listerine case. The label on the Listerine mouthwash bottle stated "KillsGerms By Millions On Contact" immediately followed by "For General Oral Hygiene,Bad Breath, Colds, and Resultant Sore Throats". This misled consumers to believethat by using Listerine, it could prevent the common cold and sore throat (Warner Lambert, 1978). Listerine had to redo its advertising and delete "colds and resultantsore throats".
What Makes Advertising Deceptive?
According to the Federal Trade Commission (FTC), the government agencyresponsible for regulating and monitoring advertising practices, there are three
 
common elements they look for in deceptive advertising and marketing claims. First,there must be "a representation, omission or practice that will likely mislead theconsumer", such as misleading price claims, or a oral or written misrepresentation of a product or service. Second, the FTC examines the misrepresentation from the view of a "reasonable" consumer or particular target group such as the elderly. And finally,"the representation, omission, or practice must be a ‘material’ one". This means that if the misrepresentation is likely to affect the consumer’s decision whether or not to useor purchase a certain product or service, this is considered material since the consumer may have decided differently if not for the deceptive advertising (Federal TradeCommission, 1998 [on-line]).
Oral and Written Misrepresentation or Omission
Let’s look first at oral or written misrepresentation, or omission, which is the mostcommon form of deceptive marketing. According to the Better Business Bureau, "anadvertisement as a whole may be misleading although every sentence separatelyconsidered is literally true. Misrepresentation may result not only from directstatements but by omitting or obscuring a material fact" (Better Business Bureau,1998 [on-line]). This includes "bait and switch" advertising and selling, which is analluring offer to sell a product or service in which a company has no intention to sellto the consumer. The goal of "bait and switch" is to get the consumer in the door ready to purchase one product that was advertised and then get them to switch their  purchasing decision to a higher priced product or service. Vague generalities are alsoincluded in this category. A vague generality is when an advertisement makes a vagueclaim. There are numerous examples of vague generalities such as "our clothes aremade in the USA, our cars are fuel efficient, our frozen desserts are low in fat".According to Mary Azcuenaga, Commissioner of the FTC (1994), "should we assumethat these claims apply to every individual item in the product line? To most or nearlyall of the products in the line? Or is the message that, on average, the products havethe characteristics?". These generalities often bring up more questions than theyanswer for the consumer, and can be misleading and confusing.
The Reasonable Consumer
The FTC also believes that in order for an advertisement to be deceptive, the act or  practice must be considered from a reasonable consumer’s point of view, or if a particular group is targeted, a reasonable member of the groups perspective; the keyword being "reasonable". In fact, a company is not liable for every consumer’s pointof view. One example is that some consumers may believe that a "Danish Pastry" ismade in Denmark. This miscomprehension is not considered to be deception since thismessage is not likely to mislead a significant segment of targeted consumers (FederalTrade Commission, 1998 [on-line]). If a particular product or service is marketed to a

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