Chapter 20 Marketing Regulation and Consumer Behavior
Multiple Choice Questions
1. Which of the following is a conclusion reached regarding childhood obesity?
A) Food advertising has not been found to influence children's food choices.
B) The FTC has determined that it is primarily marketers' fault that childhood obesity
has increased.
C) Over the decades that childhood obesity has increased, so too has the amount of
advertising.
D) Marketers are doing nothing to curb this problem.
E) all of the above
Answer: C Page: 717 Difficulty: moderate
2. Which of the following statements is FALSE regarding marketing practices?
A) Marketing practices are sometimes controversial.
B) Regulating marketing activities requires a higher level of understanding of
consumer behavior than does managing marketing programs.
C) There are many issues where the appropriate ethical action for marketers is not
clear-cut.
D) Society has declared that some marketing actions are clearly inappropriate.
E) There are laws and regulations that prohibit or require specific marketing actions.
Answer: B Page: 718 Difficulty: moderate
3. The regulation of marketing activities aimed at children focuses primarily on which of
the following?
A) product safety
B) advertising
C) promotion
D) privacy protection
E) all of the above
Answer: E Page: 718 Difficulty: easy
4. One basis for the concern over marketing to children is based on _____.
A) attribution theory
B) Piaget's stages of cognitive development
C) the multiattribute model of cognitive development
D) dissonance theory
E) mental development theory
Answer: B Page: 719 Difficulty: moderate
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5. According to Piaget's stages of cognitive development, children lack the ability to
fully process and understand information, including marketing messages, until around
age _____.
A) 5
B) 8
C) 10
D) 12
E) 15
Answer: D Page: 719 Difficulty: hard
6. What is the oldest age of a child that most regulation attempts to protect with respect
to marketing practices?
A) 2
B) 5
C) 8
D) 10
E) 12
Answer: E Page: 719 Difficulty: hard
7. Conor is 15 years old. Which of the following statements is true regarding him and
other children his age?
A) He most likely still lacks the ability to fully process and understand information,
including marketing messages.
B) Most marketing programs aimed at him deliberately attempt to exploit him.
C) He most likely has the ability to fully process and understand information,
including marketing messages.
D) While he has the ability to process information, he does not yet have the ability to
understand the information.
E) Most regulation regarding marketing to children includes him.
Answer: C Page: 719 Difficulty: hard
8. Which of the following is the American advertising industry's primary self-regulatory
body?
A) Federal Trade Commission
B) National Advertising Division of the Council of Better Business Bureaus
C) Food and Drug Administration
D) Congress
E) media
Answer: B Page: 719 Difficulty: moderate
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9. Which of the following is a special unit of the National Advertising Division of the
Council of Better Business Bureaus that specifically reviews advertising aimed at
children?
A) Children's Advertising Review Unit (CARU)
B) National Advertising Review Board (NARB)
C) National Children's Advertising Division (NCAD)
D) National Children's Advertising Review Board (NCARB)
E) Federal Trade Commission (FTC)
Answer: A Page: 719 Difficulty: moderate
10. Margaret wants to complain about an advertisement targeting children that she saw on
a program her children were watching. Which self-regulatory organization should she
contact?
A) Children's Advertising Review Unit (CARU)
B) National Advertising Review Board (NARB)
C) National Children's Advertising Division (NCAD)
D) National Children's Advertising Review Board (NCARB)
E) Federal Trade Commission (FTC)
Answer: A Page: 719 Difficulty: moderate
11. How many of the CARU's general guiding principles relate to a child's ability to
comprehend commercial messages?
A) 1
B) 2
C) 5
D) 6
E) all of them
Answer: B Page: 719 Difficulty: moderate
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12. Which of the following is NOT an information-processing related guideline of the
CARU?
A) Care should be taken not to exploit a child's imagination.
B) The performance and use of a product should be demonstrated in a way that can be
duplicated by the child for whom the product is intended.
C) Representation of food products should be made so as to encourage sound use of
the product with a view toward healthy development of the child and development
of good nutritional practices.
D) Program personalities, live or animated, should not be used to sell products,
premiums, or services in or adjacent to programs primarily directed to children in
which the same personality or character appears.
E) If product advertising contains a premium message, care should be taken that the
child's attention is focused primarily on the product.
Answer: C Page: 719, 722 Difficulty: hard
13. CARU and others are interested in the impact that the _____ of children's advertising
has, as well as the ability of children to process advertising messages.
A) content
B) quantity
C) quality
D) tone
E) all of the above
Answer: A Page: 719 Difficulty: moderate
14. Piaget's theory of cognitive development holds that _____.
A) children must be taught how to be consumers
B) marketing stimuli play a critical role in child socialization
C) intellectual capabilities can continue to expand throughout the lifecycle
D) intellectual capabilities continue to expand until late middle age
E) none of the above
Answer: E Page: 719 Difficulty: moderate
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15. When the FTC applied sanctions to Lewis Galoob Toys for portraying a doll dancing
and a plane flying unassisted when actual assistance was required, this was related to
_____.
A) CARU's guidelines linked to possible processing deficits of children
B) CARU's guidelines linked to concerns about the health/safety/value effects of
commercial messages on children.
C) COPPA's guidelines regarding processing deficits of children.
D) all of the above
E) none of the above
Answer: A Page: 719-721 Difficulty: moderate
16. What is the concern regarding the limited ability of children to comprehend
advertising messages?
A) Do children understand the selling intend of commercials?
B) Can children understand specific aspects of commercials?
C) Do children like commercials?
D) a and b
E) a, b, and c
Answer: D Page: 720 Difficulty: moderate
17. Cathy was babysitter her two nieces on a Saturday morning, and they were watching
cartoons together. She noticed that every time a commercial pod came on, there was a
little jingle telling the kids that “after these messages, we'll be right back.” This is an
example of _____.
A) a discriminator
B) a warning
C) a separator
D) a primer
E) corrective advertising
Answer: C Page: 720 Difficulty: moderate
18. “Part of a nutritious breakfast,” “Each sold separately,” and “Batteries not included”
are examples of _____.
A) disclaimers
B) primers
C) warning labels
D) deception
E) corrective advertising
Answer: A Page: 720 Difficulty: easy
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19. Which of the following is a major area of concern regarding the large amount of time
children devote to watching television?
A) The impact of commercial messages on children's values.
B) The impact of commercial messages on children's health and safety.
C) The impact of commercial messages on children's education.
D) a and b
E) a, b, and c
Answer: D Page: 721 Difficulty: moderate
20. How many of CARU's basic principles focus on the concern regarding the impact of
commercial messages on children's values and their health and safety?
A) 1
B) 2
C) 3
D) 4
E) 5
Answer: E Page: 721 Difficulty: hard
21. Which of the following CARU principle addresses the impact of commercial messages
on children's values and their health and safety?
A) Recognizing that advertising may play an important role in educating the child,
advertisers should communicate information in a truthful and accurate manner and
in language understandable to young children with full recognition that the child
may learn practices from advertising which can affect his or her health and wellbeing.
B) Advertisers are urged to capitalize on the potential of advertising to influence
behavior by developing advertising that, whenever possible, addresses itself to
positive and beneficial social behavior.
C) Care should be taken to incorporate minority and other groups in advertisements
in order to present positive and pro-social roles and role models wherever
possible.
D) Products and content which are inappropriate for children should not be advertised
or promoted directly to children.
E) all of the above
Answer: E Page: 721 Difficulty: moderate
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22. Which of the following statements regarding marketing and children's health and
safety is FALSE?
A) Ensuring that advertisements portray only safe uses of products is sometimes
difficult, and it is a controversial area.
B) Even ads clearly not targeting children can have potentially harmful consequences.
C) In many instances, children and teenagers are exposed to advertising directed at
adults.
D) Advertising of health-related products, particularly snack foods and cereals, is
controversial.
E) Advertising sugared products such as presweetened breakfast cereals does increase
their consumption.
Answer: A Page: 722 Difficulty: hard
23. Lynette is concerned about her children's health, and she is very bothered with the
amount of advertising they see for sugared snack foods and breakfast cereals. Which
major area of concern is Lynette concerned about regarding advertising to children?
A) the impact of commercial messages on children's values
B) the impact of commercial messages on children's health and safety
C) the impact of commercial messages on the economy
D) the impact of commercial messages on her children's cognitive development
E) the impact of commercial messages on her budget
Answer: B Page: 722 Difficulty: moderate
24. Hale noticed in a commercial that his children were watching that children riding
bikes were shown not wearing a helmet. He always makes his children wear helmets
while riding their bikes, but he's concerned about other children seeing this ad and
thinking it's ok to not wear one. Which major area of concern is Hale concerned about
regarding advertising to children?
A) the impact of commercial messages on children's values
B) the impact of commercial messages on children's health and safety
C) the impact of commercial messages on the economy
D) the impact of commercial messages on children's cognitive development
E) the impact of commercial messages on family's budgets
Answer: B Page: 722 Difficulty: moderate
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Chapter 20 Marketing Regulation and Consumer Behavior
25. Advertising is frequently criticized for fostering which type of values in children?
A) overly materialistic
B) self-focused
C) short-term
D) a and b
E) a, b, and c
Answer: E Page: 723 Difficulty: moderate
26. Estimates of the number of TV ads that children are exposed to per year range from
_____.
A) 1,000 to 5,000
B) 8,500 to 15,000
C) 18,000 to 40,000
D) 48,000 to 60,000
E) 73,000 to 100,000
Answer: C Page: 723 Difficulty: hard
27. CARU reviews thousands of ads every year and has _____ success rate in resolving
issues related to children's advertising.
A) a 10 percent
B) a 25 percent
C) a 50 percent
D) an 80 percent
E) over a 95 percent
Answer: E Page: 723 Difficulty: hard
28. Which of the following is a marketing activity targeted at children that is considered
controversial?
A) violent entertainment products
B) kids' clubs
C) mobile marketing
D) commercialization in schools
E) all of the above
Answer: E Page: 724-725 Difficulty: easy
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Chapter 20 Marketing Regulation and Consumer Behavior
29. Which of the following is referred to as the “Third Screen”?
A) television
B) computer
C) video games
D) cell phone
E) iPod
Answer: D Page: 724 Difficulty: moderate
30. Ringtones, mobile games, and text-in contests are various types of promotional efforts
regarding which controversial marketing activity aimed at children?
A) violent entertainment products
B) kids' clubs
C) mobile marketing
D) commercialization of schools
E) Internet marketing
Answer: C Page: 724 Difficulty: moderate
31. A soft drink manufacturer is running a promotion in which consumers text message
from their cell phone a code that they can find under the bottle cap. Consumers
entering can win various prizes. This is an example of which type of marketing
activity aimed at children that is considered controversial?
A) violent entertainment products
B) kids' clubs
C) mobile marketing
D) commercialization in schools
E) Internet marketing
Answer: C Page: 724 Difficulty: moderate
32. If consumers call a specific number, they can access games on their cell phones. The
games usually involve a branded product or an event, such as the release of a movie.
This is an example of which type of marketing activity aimed at children that is
considered controversial?
A) violent entertainment products
B) kids' clubs
C) mobile marketing
D) commercialization in schools
E) Internet marketing
Answer: C Page: 724 Difficulty: moderate
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Chapter 20 Marketing Regulation and Consumer Behavior
33. Scott participated in a promotion that allowed him to download a ringtone for his cell
phone that played the Stars Wars theme song. This is an example of which type of
marketing activity aimed at children that is considered controversial?
A) violent entertainment products
B) kids' clubs
C) mobile marketing
D) commercialization in schools
E) Internet marketing
Answer: C Page: 724 Difficulty: moderate
34. Which of the following is a classification of commercialization of schools?
A) in-school ads
B) ads in classrooms
C) corporate-sponsored educational materials and programs
D) corporate-sponsored contests and incentive programs
E) all of the above
Answer: E Page: 725 Difficulty: easy
35. Which of the following is NOT a classification of commercialization of schools?
A) in-school ads
B) ads in classrooms
C) corporate-sponsored educational materials and programs
D) corporate-sponsored contests and incentive programs
E) mobile games
Answer: E Page: 725 Difficulty: moderate
36. Ads in such places as school buses, scoreboards, bulletin boards, as well as coupons
and free samples represent which of the following?
A) in-school ads
B) ads in classrooms
C) corporate-sponsored educational materials and programs
D) corporate-sponsored contests and incentive programs
E) mobile games
Answer: A Page: 725 Difficulty: moderate
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Chapter 20 Marketing Regulation and Consumer Behavior
37. At Marci's school, there are logos for McDonald's, Coca-Cola, and Sprint around the
football stadium's scoreboard. She was also given pencils that had Gap written on
them and a notebook with the Nike swoosh. These are examples of _____.
A) in-school ads
B) ads in classrooms
C) corporate-sponsored educational materials and programs
D) corporate-sponsored contests and incentive programs
E) mobile games
Answer: A Page: 725 Difficulty: moderate
38. Channel One is an example of _____.
A) in-school ads
B) ads in classrooms
C) corporate-sponsored educational materials and programs
D) corporate-sponsored contests and incentive programs
E) mobile games
Answer: B Page: 725 Difficulty: moderate
39. Corporate-sponsored educational materials and programs are also called _____.
A) propaganda programs (PPs)
B) biased educational materials (BEMs)
C) sponsored educational materials (SEMs)
D) commercial educational materials (CEMs)
E) marketing educational materials (MEMs)
Answer: C Page: 725 Difficulty: moderate
40. Which of the following are teaching materials provided by corporations, usually for
free, and come in various forms including posters, activity sheets, and multimedia
teaching aids?
A) in-school ads
B) ads in classrooms
C) corporate-sponsored educational materials and programs
D) corporate-sponsored contests and incentive programs
E) mobile games
Answer: C Page: 725 Difficulty: easy
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Chapter 20 Marketing Regulation and Consumer Behavior
41. Marilyn is a recent college graduate teaching junior high school science. She has
several courses she has to prepare, so she was very pleased when Alcoa Corporation
provided her with a teaching unit on recycling. This teaching unit is an example of
_____.
A) in-school ads
B) ads in classrooms
C) corporate-sponsored educational materials and programs
D) corporate-sponsored contests and incentive programs
E) mobile games
Answer: C Page: 725 Difficulty: easy
42. The fourth grade class at Westview elementary school won $10,000 for their school's
music program because they entered a contest sponsored by Oscar Mayer bologna in
which they sang the famous jingle for that brand (i.e. “my bologna has a first name,
it's O-S-C-A-R....”) and won it for their state. This is an example of _____.
A) in-school ads
B) ads in classrooms
C) corporate-sponsored educational materials and programs
D) corporate-sponsored contests and incentive programs
E) mobile games
Answer: D Page: 725 Difficulty: easy
43. What is a major concern that has emerged regarding Internet marketing and children?
A) invading children's privacy
B) exploitation of children through manipulative sales techniques
C) inappropriate pop-up ads
D) a and b
E) a, b, and c
Answer: D Page: 726 Difficulty: moderate
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Chapter 20 Marketing Regulation and Consumer Behavior
44. James is 12 years old and likes to play games on the Internet, and several of these
games can be found on marketers' Web sites that feature characters related to their
brands. Some sites require that he gives information such as his name and address,
and his mother is very concerned about this. Which major concern regarding Internet
marketing and children does this highlight?
A) invading children's privacy
B) exploitation of children through manipulative sales techniques
C) inappropriate pop-up ads
D) inappropriate site content
E) child pornography
Answer: A Page: 726 Difficulty: moderate
45. Customized games which are placed on a company's Web site and prominently feature
or integrate the company's brands and products as part of the game itself are known as
_____.
A) brand games
B) adver-games
C) promo-games
D) interactive games
E) convergent games
Answer: B Page: 726 Difficulty: moderate
46. Which of the following is NOT a guideline set forth by The Center for Media
Education for the development of online commercial services?
A) Personal information should not be collected from children, nor should personal
profiles of children be sold to third parties.
B) Advertising and promotions targeted at children should be clearly labeled and
separated from content.
C) Children's content areas should not be directly linked to advertising sites.
D) There should be no direct interaction between children and product spokespersons.
E) Care should be taken not to exploit a child's imagination.
Answer: E Page: 726 Difficulty: moderate
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Chapter 20 Marketing Regulation and Consumer Behavior
47. _____ relates to the collection and use of information from Web sites.
A) Online privacy
B) Online security
C) Online research
D) Online commerce
E) Online marketing
Answer: A Page: 726 Difficulty: moderate
48. Which of the following is the result over concern regarding the invasion of children's
privacy?
A) Telephone Consumer Protection Act
B) Children's Online Privacy Protection Act
C) Federal Do Not Call Registry
D) Children's Internet Protection Act
E) Children's Internet Act
Answer: B Page: 727 Difficulty: moderate
49. Which of the following statements is true regarding the Children's Online Privacy
Protection Act (COPPA)?
A) It does not apply to nonprofits.
B) Information cannot be collected from children, used or disclosed unless the Web
site operator has obtained verifiable parental consent through “exhaustive effort.”
C) The majority of children's commercial Web sites still had not modified their data
collection practices a year after the law became effective.
D) It authorizes CARU to develop specific rules to implement the provisions of the
act.
E) all of the above
Answer: A Page: 727 Difficulty: hard
50. What year did the rules based on the guidelines in the Children's Online Privacy
Protection Act go in to effect?
A) 1990
B) 1995
C) 1998
D) 2000
E) 2002
Answer: D Page: 727 Difficulty: hard
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Chapter 20 Marketing Regulation and Consumer Behavior
51. Rita has noticed when she goes to children-oriented Web sites with her daughter, that
there are clear and prominent links to privacy policies, and whenever an attempt to
request information appeared, it required her consent. These things that Rita has
noticed are the result of which law?
A) Telephone Consumer Protection Act
B) Children's Online Privacy Protection Act
C) Federal Do Not Call Registry
D) Children's Internet Protection Act
E) Children's Internet Act
Answer: B Page: 727 Difficulty: moderate
52. Regulation of marketing activities aimed at adults has focused on _____.
A) product features
B) marketing communications
C) pricing practices
D) a and b
E) a, b, and c
Answer: E Page: 728 Difficulty: moderate
53. Why is concern about Internet privacy so strong?
A) because it's illegal to gather information on consumers
B) because the government is using it to develop dossiers of consumers
C) because there are no codes of practice for marketers to follow
D) because data are often collected without the consumer explicitly providing it
E) because there is no remedy for consumers whose information has been collected
Answer: D Page: 729 Difficulty: moderate
54. Which of the following is a requirement of the Better Business Bureau's Code of
Online Business Practices?
A) Parents have the right to be notified about data collection and use practices.
B) Parents of children under 13 have the right to access and review a description of
the specific types of personal identifying information collects from the child.
C) Provide adequate security for the type of information collected, maintained, or
transferred to third parties.
D) Requires that commercial Web sites that collect personal information from
children under 13 obtain prior parental consent before they collect that
information.
E) all of the above
Answer: C Page: 729 Difficulty: hard
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Chapter 20 Marketing Regulation and Consumer Behavior
55. Don is developing a Web site for his business, and he wants to collect information
from visitors to and purchasers from his Web site. He wants to abide by the Better
Business Bureau's Code of Online Business Practices. He should be doing all
EXCEPT which of the following to be in compliance with this code?
A) Post and adhere to a privacy policy that is open, transparent, and meets generally
accepted fair information principles.
B) Provide adequate security for the type of information collected, maintained, or
transferred to third parties.
C) Respect customers' preferences regarding unsolicited e-mail.
D) Allow consumers complete access to the information a Web site has collected
about them.
E) all of the above are part of the BBB's Code of Online Business Practices
Answer: D Page: 729 Difficulty: hard
56. Which of the following is a major concern regarding the legal and ethical behavior
with respect to marketing communications?
A) the tastefulness of the ad
B) the accuracy of the information provided
C) the media used to deliver the ad
D) the creativity of the ad
E) the effectiveness of the ad
Answer: B Page: 729 Difficulty: moderate
57. What are the three major concerns regarding legal and ethical behavior with respect to
marketing communications?
A) the accuracy of the information provided, the adequacy of the information
provided, and the cumulative impact of marketing information on society's values
B) the accuracy of the information provided, the tastefulness of the ad, and the
creativity of the ad
C) the media used, the prevalence of advertising, and the tastefulness of the ad
D) the amount of information provided, the tastefulness of the ad, and the cumulative
impact of marketing information on society's values
E) the media used, the accuracy of the information provided, and the manner in
which the information is provided
Answer: A Page: 729 Difficulty: moderate
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Chapter 20 Marketing Regulation and Consumer Behavior
58. In May 2000, the FTC issued a report that concluded that _____.
A) self-regulation was providing adequate privacy regulation and recommended no
further action
B) it is impossible to protect consumers' privacy
C) self-regulation was not providing adequate privacy regulation and recommended
national legislation
D) foreign-based companies were far more advanced in protecting consumers'
privacy than U.S.-based companies
E) U.S.-based companies were far more advanced in protecting consumers' privacy
than foreign-based companies
Answer: C Page: 730 Difficulty: moderate
59. Which of the following is a recommendation for consumer-oriented Web sites that
collect personal identifying information from or about consumers issued by the FTC in
its May 2000 report on online privacy issued to Congress?
A) Notice--Web sites would be required to provide consumers clear and conspicuous
notice of their information practices.
B) Choice--Web sites would be required to offer consumers choices as to how their
personal identifying information is used beyond the use for which the information
was provided.
C) Access--Web sites would be required to offer consumers reasonable access to the
information a Web site has collected about them.
D) Security--Web sites would be required to take reasonable steps to protect the
security of the information they collect from consumers.
E) all of the above
Answer: E Page: 730 Difficulty: easy
60. Nat wants to comply with the FTC's recommendations regarding consumer-oriented
commercial Web sites that collect personal identifying information from or about
consumers. Which of the following is NOT one of the recommendations made by the
FTC in its 2000 report to Congress?
A) provide notice to consumers regarding the site's information practices
B) allow consumers to choose how information concerning them will be used
C) require parental consent when collecting information from children under the age
of 18
D) offer consumers reasonable access to the information a Web site has collected
about them
E) take reasonable steps to protect the security of the information collected
Answer: C Page: 730 Difficulty: moderate
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Chapter 20 Marketing Regulation and Consumer Behavior
61. What authority does the FTC possess that enables it to deal with online privacy
regarding marketing practices aimed at adults?
A) Online Privacy Protection Act (OPPA)
B) ability to prohibit unfair or deceptive practices and unfairness authority
C) Internet Protection Act (IPA)
D) Electronic Media Consumer Protection Act (EMCPA)
E) Consumer Exclusion Act (CEA)
Answer: B Page: 730 Difficulty: moderate
62. Critics of ads that emphasize beauty or sex appeal as major benefits feel that the
harmful effects may be most severe for which consumers?
A) young men
B) young women
C) minorities
D) older men
E) older women
Answer: B Page: 730-731 Difficulty: moderate
63. Which law protects the value of registered trademarks?
A) Federal Trademark Dilution Act
B) Lanham Act
C) Wheeler-Lea Amendment
D) Federal Trade Commission Act
E) Internet Protection Act
Answer: A Page: 732 Difficulty: easy
64. Which of the following is the most difficult to regulate?
A) the explicit verbal content of ads
B) the subtle meanings implied by the visual content of ads
C) the adequacy of the information provided in ads
D) a Web site's privacy policy with respect to children
E) the use of corrective advertising
Answer: B Page: 733 Difficulty: moderate
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Chapter 20 Marketing Regulation and Consumer Behavior
65. Advertising run by a firm to cause consumers to unlearn inaccurate information they
acquired as a result of the firm's earlier advertising is called _____.
A) controvertible advertising
B) redundant advertising
C) conforming advertising
D) corrective advertising
E) retractive advertising
Answer: D Page: 734 Difficulty: moderate
66. For years, Doan's Pills advertised that this medication is superior for relieving back
pain. The FTC found this claim to be deceptive and ordered Doan's to run advertising
that informed consumers of this deception in an attempt to cause consumers to unlearn
the inaccurate information. What type of advertising is this known as?
A) controvertible advertising
B) redundant advertising
C) conforming advertising
D) corrective advertising
E) retractive advertising
Answer: D Page: 734 Difficulty: moderate
67. Which of the following statements is FALSE regarding corrective advertising?
A) Firms injured by false claims of competitors can request it as a remedy from the
FTC.
B) It has been shown to be a useful tool in protecting the public.
C) It is run by a firm to cause consumers to unlearn inaccurate information they
acquired as a result of the firm's earlier advertising.
D) A court ruling has challenged the conditions under which the FTC can require it.
E) The effectiveness of it has been debated.
Answer: B Page: 734 Difficulty: hard
68. In several ads for Listerine over a period of more than a year, the company made
statements that previous ads were not true in that Listerine cannot kill the germs that
cause a cold. Which type of advertising does this illustrate?
A) controvertible advertising
B) redundant advertising
C) conforming advertising
D) corrective advertising
E) retractive advertising
Answer: D Page: 734 Difficulty: moderate
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Chapter 20 Marketing Regulation and Consumer Behavior
69. Which of the following has the purpose of ensuring that consumers are provided with
adequate information?
A) Telephone Consumer Protection Act
B) truth-in-lending legislation
C) FTC Corrective Advertising Act
D) Internet Protection Act
E) FTC's unfairness authority
Answer: B Page: 734 Difficulty: moderate
70. Which of the following consumers are least likely to be able to use the information
provided by marketers?
A) men
B) women
C) those who are relatively disadvantaged in terms of education and income
D) baby boomers
E) professionals who are too busy to attend to the information
Answer: C Page: 734-735 Difficulty: moderate
71. Which law deals with nutrition labeling on products' packages?
A) Truth-in-Labeling Law
B) Nutritional Labeling and Education Act
C) Trans Fat Labeling Act
D) Fair Packaging and Labeling Act
E) U.S. Packaging and Labeling Law
Answer: B Page: 735 Difficulty: moderate
72. A new rule that requires marketers to list the number of grams of trans fat on a
product's package is an amendment of which law?
A) Truth-in-Labeling Law
B) Nutritional Labeling and Education Act
C) Fat Labeling Act
D) Fair Packaging and Labeling Act
E) U.S. Packaging and Labeling Law
Answer: B Page: 735 Difficulty: moderate
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Chapter 20 Marketing Regulation and Consumer Behavior
73. What are trans fats?
A) hydrogenated oils
B) fats found in animal fat
C) healthy fats
D) fats found in olive and other plant oils
E) synthetic fats
Answer: A Page: 735 Difficulty: hard
74. Susan picked of a package of potato chips and noticed on the front of the package the
words, “0 grams of trans fat.” She looked at the nutrition label and noticed that listed
beneath the number of total grams of fat was the number of grams of trans fat, which
was zero in this case. She has noticed that just this year, food packages with nutrition
labels now contain this information. What year did this begin?
A) 1990
B) 1995
C) 2000
D) 2002
E) 2006
Answer: E Page: 735 Difficulty: moderate
75. What is the health risk of trans fat that prompted to government to require that the
number of grams of trans fat be provided in nutrition labels on packages?
A) it raises the level of LDL (bad) cholesterol
B) it lowers the level of HDL (good) cholesterol
C) it raises blood sugar levels
D) a and b
E) a, b, and c
Answer: D Page: 735 Difficulty: hard
76. While government and businesses want consumers to have full disclosure, which of
the following might result for consumers?
A) information overload
B) increased time to make a decision
C) inability to make a decision
D) all purchases become high-involvement situations
E) inferior choices will be made
Answer: A Page: 736 Difficulty: moderate
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Chapter 20 Marketing Regulation and Consumer Behavior
77. Which of the following is a major issue consumer groups have concerning products?
A) Are they safe?
B) Are they environmentally sound?
C) Do they meet consumers' needs?
D) a and b
E) a, b, and c
Answer: D Page: 736 Difficulty: moderate
True/False Questions
78. Marketing practices are sometimes controversial.
Answer: True Page: 718 Difficulty: easy
79. The regulation of marketing activities aimed at children focuses primarily on product
safety, advertising and promotions, and child pornography.
Answer: False Page: 718 Difficulty: moderate
80. CARU guidelines allow for the use of price minimizations such as “only $19.99.”
Answer: False Page: 718 Difficulty: moderate
81. CARU guidelines which prohibit price minimizations such as “only $19.99” are
related to concerns regarding advertising effects on health/safety/values.
Answer: False Page: 718 Difficulty: moderate
82. Piaget's stages of cognitive development indicate that children lack the ability to fully
process and understand information, including marketing messages, until around 12
years of age.
Answer: True Page: 719 Difficulty: moderate
83. The Children's Advertising Review Unit (CARU) is part of the FTC's regulation of
marketing practices aimed at children.
Answer: False Page: 719 Difficulty: moderate
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Chapter 20 Marketing Regulation and Consumer Behavior
84. Research indicates that disclaimers such as “Part of a nutritious breakfast” or “Each
sold separately” are fully understood even by children as young as 3 years old.
Answer: False Page: 720 Difficulty: moderate
85. Five of the basic principles that underlie the CARU's guidelines for advertising
directed at children focus on the concerns over the impact of commercial messages on
children's health and safety and on their values.
Answer: True Page: 721 Difficulty: moderate
86. Even ads clearly not targeting children can have potentially harmful consequences for
them.
Answer: True Page: 722 Difficulty: easy
87. Advertising is frequently criticized as fostering overly materialistic, self-focused, and
short-term values in children.
Answer: True Page: 723 Difficulty: easy
88. Ads in such places as school buses, scoreboards, bulletin boards are classified by
Consumers Union as in-school ads.
Answer: True Page: 725 Difficulty: moderate
89. Concern over the invasion of children's privacy prompted Congress to pass the
Children's Internet Protection Act in October 1998.
Answer: False Page: 727 Difficulty: hard
90. Regulation of marketing activities aimed at adults focuses on marketing
communications, product features, pricing practices, and consumer privacy protection.
Answer: False Page: 728 Difficulty: hard
91. There are three major concerns focused on the information that marketers provide to
consumers, generally in the form of advertisements–the accuracy of the information
provided, the adequacy of the information provided, and the cumulative impact of
marketing information on society's values.
Answer: True Page: 729 Difficulty: moderate
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Chapter 20 Marketing Regulation and Consumer Behavior
92. Determining the exact meaning of a marketing message is a simple process.
Answer: False Page: 732 Difficulty: moderate
93. Gillette's advertising for the M3 Power razor which claimed that “gentle micropulses
stimulate hair up and away from skin,” was deemed to be literally false by the court
hearing the case.
Answer: True Page: 732 Difficulty: hard
94. Corrective advertising is advertising run by the government to cause consumers to
unlearn inaccurate information they acquired as a result of a firm's earlier advertising.
Answer: False Page: 734 Difficulty: moderate
95. Perhaps the most controversial pricing area today is the use of reference prices.
Answer: True Page: 738 Difficulty: moderate
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Chapter 20 Marketing Regulation and Consumer Behavior
Essay Questions
96. Discuss the concerns about the ability of children to comprehend commercial
messages.
Page: 719-720 Difficulty: moderate
Answer:
One basis for the concern over marketing to children is based on Piaget's stages of
cognitive development, which indicate that children lack the ability to fully process
and understand information, including marketing messages, until around 12 years of
age. This and related theories are the basis for most regulations of advertising aimed at
children. The American advertising industry's primary self-regulatory body, the
National Advertising Division of the Council of Better Business Bureaus, maintains a
special unit to review advertising aimed at children–the Children's Advertising Review
Unit (CARU). Two of the seven principles that underlie CARU's guidelines for
advertising directed to children relate to their ability to comprehend commercial
messages:
a. Advertisers should always take into account the level of knowledge,
sophistication, and maturity of the audience to which their message is primarily
directed.
b. Realizing that children are imaginative and that make-believe play constitutes an
important part of the growing-up process, advertisers should exercise care not to
exploit unfairly the imaginative quality of children.
The two main components regarding children's abilities to comprehend advertising
messages are: (a) Do children understand the selling intent of commercials?, and (b)
Can children understand specific aspects of commercials, such as comparisons?
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Chapter 20 Marketing Regulation and Consumer Behavior
97. You just graduated from college and started a new job at a consumer packaged goods
manufacturer. You will be involved with marketing activities aimed at children.
Briefly describe the controversial marketing activities aimed at children that you
should be aware of.
Page: 724-725 Difficulty: moderate
Answer:
There are a number of marketing activities targeted at children in addition to television
that are controversial and for which various regulatory proposals are being considered.
For example, violent entertainment products (movies, videos, and music) labeled for
those 17 and older were, until recently, routinely marketed to kids. Another area of
ongoing concern is kids' clubs which typically provide membership certificates, a
magazine or Web site, the chance to win prizes, and discounts or coupons of products
offered by the sponsor. A major concern is that these clubs disguise commercial
messages. Additional issues described in the chapter include mobile marketing( i.e.,
ringtones, mobile games, text-in contests), commercialization in schools (i.e., inschool ads, ads in classrooms, corporate-sponsored educational materials and
programs, and corporate-sponsored contents and incentive programs), and Internet
marketing to children.
98. List the key provisions of the Children's Online Privacy Protection Act (COPPA).
Page: 727 Difficulty: hard
Answer:
Table 20-3 provides the key provisions of this law, and the answer provided here
merely highlights this information. This act requires that commercial Web sites that
collect personal information from children under 13 obtain prior parental consent
before they collect that information. Five elements of the act include:
a. Notice--parents have the right to be notified about data collection and use
practices, and this notice must be prominently displayed and unavoidable.
b. Prior Parental Consent--with certain exceptions, information cannot be collected
from children, used or disclosed unless the Web site operation has obtained
verifiable parental consent through “reasonable effort.”
c. Prevention of Further Use--parents have the right to prevent further use of
already collected personal identifying information and to prevent further
collection.
d. Collection of Personal Information Must Be Limited--collection of a child's
information must be limited to what is reasonably necessary for the activity (i.e.,
playing a game).
e. Access to Information--parents have the right to access and review a description
of the specific types of personal identifying information collected from the child
through reasonable means provided by the Web site operators.
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Chapter 20 Marketing Regulation and Consumer Behavior
99. List the three broad requirements of the Better Business Bureau's Code of Online
Business Practices.
Page: 729 Difficulty: moderate
Answer:
a. Post and adhere to a privacy policy that is open, transparent, and meets generally
accepted fair information principles.
b. Provide adequate security for the type of information collected, maintained, or
transferred to third parties.
c. Respect customers' preferences regarding unsolicited e-mail.
100. What are the issues regarding pricing practices, and which federal agency regulates
pricing activities?
Page: 738 Difficulty: moderate
Answer:
Consumer groups want prices that are fair (generally defined as competitively
determined) and accurately stated (contain no hidden charges). The FTC is the
primary federal agency involved in regulating pricing activities. Perhaps the most
controversial pricing area today is the use of reference prices. An external reference
price is a price provided by the manufacturer or retailer in addition to the actual
current price of the product. The concern arises when the reference price is one at
which no or few sales actually occur. Most states and the federal government have
regulations concerning the use of reference prices, but they are difficult to enforce.
Given the history of abuse of reference prices, it is not surprising that many consumers
are skeptical of them.
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