IMC Study Guide - Chapters 3 & 4

Vocabulary flashcards covering IMC Chapters 3 & 4 terminology including product adoption, branding, trademark laws, environmental marketing, FTC regulations, and ethics tests.

Product adoption

The introduction and acceptance of new ideas, including new brands; essential to long-term market success

Product failure rate

Often cited as $35\text{--}45\%$; marcom's role is to help reduce it

Awareness class

First stage of brand adoption; tools include samples, coupons, trade shows, advertising, social media, distribution

Trier class

Second stage of brand adoption; tools include coupons, widespread distribution, low introductory pricing

Repeater class

Third stage of brand adoption; tools include personal selling, advertising, social media, price, distribution, product satisfaction

Relative advantage

Consumer's perception of a new brand vs. alternatives — better performance, time/effort savings, immediacy of reward

Compatibility

Fit between a brand and consumer needs, personal values/beliefs, and past consumption practices

Complexity

An innovation's degree of perceived difficulty

Trialability

The extent to which an innovation can be tried on a limited basis before full commitment

Observability

The degree to which the positive effects of use can be observed by users and others

I x E scoring model

Method of quantifying adoption characteristics by multiplying Importance ($I$) by Evaluation ($E$) for each factor

Brand

A company's unique designation or trademark that distinguishes its offering from competitors

Good brand name criteria

Distinguishes from competitors, facilitates consumer learning, compatible with brand image, memorable/easy to pronounce, suitable for global use

Brand-naming process steps

Specify objectives, create candidate names, evaluate candidates, choose a name, register a trademark

Made-up brand name example

Esso became Exxon

Logo

A graphic design element related to a brand name; not all brand names have a distinct logo

Good logo design qualities

Natural (not too simple or complex), readily recognized, conveys consistent meaning, evokes positive feelings, suited for periodic updating

Patent

Protects ideas/inventions; $20$ years, not renewable (improvements can be); utility/design/plant types

Copyright

Protects a tangible expression of an idea; life of author + $70$ years, or $95$/$120$ years for work for hire

Trademark

Protects product identity (name, logo, slogan); $10$-year renewable periods; ® = registered, TM = pending

NIL

Name, Image, and Likeness — trademark-related rights for college athletes

Green marketing

Responding to environmental/sustainability concerns via green products and marcom programs

Greenwashing

Making bogus or false environmental marketing claims

Three green ad appeal types

Product-environment link, green lifestyle without a specific product, corporate image of environmental responsibility

Industry responses to environmental problems

Green advertising, packaging responses, seal-of-approval programs, cause- oriented/sponsorship programs, point-of-purchase programs

FTC Green Guides

FTC guidelines clarifying what environmental marketing claims are and are not permissible

FTC Green Guides 4 principles

Qualifications/disclosures clear and prominent, don't overstate benefits, substantiate comparative claims, avoid deceptive claim areas

FTC

Federal Trade Commission — regulates deceptive/unfair business practices, advertising claims, environmental and online marketing claims

FDA

Food and Drug Administration — regulates food/drug/tobacco labeling and prescription drug ad claims

Lanham Act

Allows companies to sue each other in federal court over false advertising claims; implied claims require extrinsic evidence

Missouri Merchandising Practices Act (MMPA)

Missouri law (Chapter $407$) prohibiting deception, fraud, or unfair practices in advertising/selling

Self-regulation (ASRC)

Industry-run oversight consisting of NAD, NARB, and CARU; resolution is voluntary

NAD

National Advertising Division — part of BBB National Programs, evaluates ad complaints

NARB

National Advertising Review Board — appeals body in the self-regulation process

CARU

Children's Advertising Review Unit — self-regulation focused on advertising to children

1983 FTC Deception Policy elements

Misleading, reasonable consumer standard, material to purchase decision

Materiality presumed when

Claim is express, seller knew it was false, involves health/safety, involves purpose/efficacy/cost, involves durability/quality, found material by another agency

FTC Unfairness Definition (1994)

Practice causes substantial injury, not reasonably avoidable by consumers, not outweighed by countervailing benefits

Central Hudson 4-part test

Speech is lawful and not misleading; government interest is substantial; regulation directly advances that interest; regulation is no more extensive than necessary

FTC remedy options

Cease and desist, affirmative/triggered disclosure, corrective advertising, consumer redress, asset seizure

Corrective advertising

A remedy requiring a firm that misled consumers to use future ads to correct the false impression

TurboTax/Intuit FTC case

FTC ruled "free" ad claims deceptive when many taxpayers were ineligible ($2024$); followed a \$141\text{M}$ settlement with $50$ state AGs in $2022$

Kraft Singles case

FTC found Kraft's calcium claim deceptive — a slice had about $70\%$ of the claimed calcium; case ran $1985\text{--}1993$

POM Wonderful v. Coca-Cola

Lanham Act case; Coke's juice was only $0.3\%$ pomegranate/$0.2\%$ blueberry but labeled "pomegranate blueberry"; Supreme Court ruled FDA rules don't preempt Lanham Act claims

Advertising clearance process

Agency clearance, legal department (and possibly outside law firm) approval, media approval

Golden Rule (ethics test)

Act in a way you would want others to act toward you

Professional ethics test

Take only actions viewed as proper by an objective panel of professional colleagues

TV test

Would you be comfortable explaining the action on television to the general public?