Consumer behavior and marketing strategy 12e hawkins motherbaugh chapter 20

CHAPTER

20

Marketing Regulation
and Consumer Behavior

McGraw-Hill/Irwin

Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.


PART VI: CONSUMER BEHAVIOR AND MARKETING REGULATION

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Learning Objectives

Explain the two major concerns in marketing to children that CARU deals with

L01
L01
Describe the various marketing activities aimed at children that are controversial

L02
L02
Discuss new guidelines by the FTC regarding online privacy protection for adults

L03
L03

Explain marketing communication issues related to adults including deceptive advertising

L04
L04
Discuss regulation concerns when marketing to adults as they relate to product and price

L05
L05

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Consumer Behavior In The News…
Legal or Not? – You Be the Judge.



McDonald’s sponsored report cards in an elementary school. Here’s how it worked…



McDonald’s paid for the printing and in return



Put their logo on the report card and offered a free Happy Meal for good grades or
attendance.

Source: E. B. York, “McDonald’s Discontinues Report-Card Sponsorship,” Advertising Age, January 21, 2008, p. 37.

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Consumer Behavior In The News…
Legal or Not? – You Be the Judge.



If you said it is LEGAL you are correct! However, legality is only one factor.



The school received complaints and bad PR after a parent contacted the
Campaign for a Commercial Free Childhood.



McDonald’s retracted the sponsorship and paid for reprinting.



The Irony? The school approached McDonald’s about the sponsorship!

Source: E. B. York, “McDonald’s Discontinues Report-Card Sponsorship,” Advertising Age, January 21, 2008, p. 37.

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Regulation and Marketing to Children



CARU – Industry Self-Regulation



Concerns about the Ability of Children to Comprehend Commercial Messages



Concerns about the Effects of the Content of Commercial Messages on Children



Controversial Marketing Activities Aimed at Children



Children’s Online Privacy Issues

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Regulation and Marketing to Children
Self-Regulatory Body
The National Advertising Division of the Council of Better Business Bureaus is the primary self-regulatory body
of the American advertising industry.

The Children’s Advertising Review Unit (CARU) is a special unit created by this body to review
advertising aimed at children.

McDonald’s Happy Meal Commercial

YouTube Spotlight

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Regulation and Marketing to Children
Comprehension Concerns

Two Major Issues Relating to Comprehension:
Do Children Understand the Selling Intent of Commercials?
Can Children Understand the Words and Phrases in Commercials?

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Regulation and Marketing to Children

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Regulation and Marketing to Children

Concerns about the Effects of the Content of Commercial Messages on Children

Health and Safety
Values
CARU Guidelines

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Regulation and Marketing to Children

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Regulation and Marketing to Children
Controversial Marketing Activities Aimed at Children

Mobile Marketing and Children
Commercialization of Schools
Internet Marketing and Children

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Regulation and Marketing to Children
Mobile Marketing and Children

Sometimes referred to as the “Third Screen,” cell phones are an increasingly integral part of our lives.
Marketers see younger children as the next big growth market.

Mobile Marketing Efforts

•
•
•

•

ringtones
mobile games
text-in contests
mobile advertising

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Regulation and Marketing to Children
Commercialization of Schools
There has been ongoing concern and controversy around the commercialization of elementary and high
schools.
The following are commercialization activities as classified by the Consumers Union:

 In-school Ads
 Ads in Classroom
 Corporate-sponsored Educational Materials and Programs
 Corporate-sponsored Contests and Incentives Programs

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Regulation and Marketing to Children
Internet Marketing and Children
Children are major users of the Internet, and marketers use the Internet to communicate with kids.

Two major concerns have emerged:

1.

Invading children’s privacy

2.

Exploitation of children through manipulative sales
techniques, e.g., adver-games.

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Regulation and Marketing to Children
Children’s Online Privacy Issues

Children’s Online Privacy Protection Act (COPPA)

Online privacy relates to collection and use of information from
websites

COPPA passed by Congress in 1998
FTC issued Children’s Online Privacy Protection Rule (a.k.a.
The Rule) in 1999

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Regulation and Marketing to Children

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Applications in Consumer Behavior

Education is a key aspect of the
FTC’s fight against online
privacy invasion among
children

Source: .

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Regulation and Marketing to Adults



Consumer Privacy



Marketing Communications



Product Issues



Pricing Issues

20-19


Video Application

The following Video Clip demonstrates the importance of regulatory
and ethical element considerations within the context of the marketing
environment.

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20-21

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Regulation and Marketing to Adults

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Regulation and Marketing to Adults

Marketing Communications

Advertising and Values
Consumer Information Accuracy

Adequacy of Consumer Information

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Regulation and Marketing to Adults
Information Accuracy and Deception

Deception can occur even though a direct false claim has not been made
 Direct claim
 Logical implication
 Pragmatic implication

Firms can be held liable for false logical and pragmatic implications they create
 Example: Weedex fights weeds – many would understand “fight” to mean “kill”
 If Weedex does not kill weeds, then the pragmatic implication (fight = kill) would be false

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Applications in Consumer Behavior

Adequacy of Consumer Information

FDA label rule deals with trans fats.

Provide opportunities for some food marketers and challenges for
others.

Weetabix can use trans fats as a point of differentiation.

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