Chapter 4 False Advertising Test Notes

False Advertising

Involves using misleading, incorrect, or deceptive statements in marketing to persuade consumers to buy a product or service.

Misleading Product Claims

Claiming a product can do something it cannot, e.g., a supplement that claims to 'cure' an illness.

Bait-and-Switch

Advertising a product at an attractive low price to draw in customers and then pressuring them to buy a higher-priced item when the original item is unavailable.

Misrepresentation of Ingredients or Quality

Making false claims about what a product contains, like claiming a product is 'all-natural' while containing artificial ingredients.

False Comparisons

Making misleading comparisons between products, e.g., claiming an energy drink provides '10 times more energy than coffee' without scientific support.

Misleading Pricing

Advertising incorrect discounts, falsely implying a better deal, such as a retailer listing a 'discount' price that is actually the regular price.

Charm Pricing

A psychological pricing strategy where prices ending in .99 appear cheaper.

Price Skimming

Charging the highest initial price that customers will pay and lowering it over time.

False Discounts

Marketing a discount based on an inflated original price.

Hidden Fees

Disclosing additional mandatory fees only at the final checkout stage.

Price Comparison Fraud

Misrepresenting a competitor's price as higher than it is.

Shrinkflation

Keeping the same price while reducing the quantity or quality of the product.

Overlapping Sales

Continuously extending sales promotions to mislead customers into thinking they are getting limited-time offers.

Time-Limited Offers

Marketing offers as limited-time deals when they run indefinitely.

Price Gouging

Charging excessively high prices during emergencies when options are limited.

Predatory Pricing

Temporarily lowering prices to outcompete rivals and then raising them once competition is diminished.

Price Fixing

Colluding with competitors to maintain artificially high prices.

Drip Pricing

Initially presenting a low price but gradually adding costs throughout the purchasing process.