ADV 353 Exam 1 - Dr. Pounders

Heuristics

Heuristics are mental shortcuts or "rules of thumb" that simplify decision-making processes. These shortcuts help individuals make judgments quickly without extensive reasoning, but they can also lead to biased decisions or errors.

Obedience to Authority
- Definition: A tendency to comply with the directives of authority figures, often disregarding personal judgment.
- Application: In marketing, obedience to authority can manifest in consumers trusting brand endorsements from experts or celebrities, regardless of the product's actual quality.
False Consensus Effect
- Definition: The tendency to overestimate the extent to which others share our beliefs or behaviors.
- Application: In advertising, marketers may assume that all consumers think like their target audience, leading to ineffective messaging.
Self-Serving Bias
- Definition: The tendency to attribute successes to internal factors (e.g., ability) and failures to external factors (e.g., luck).
- Application: Consumers may believe they make wise purchasing decisions but blame external factors (like a bad product) when their purchase doesn’t meet expectations.
Over-Optimism
- Definition: The tendency to overestimate positive outcomes and underestimate potential risks.
- Application: In business, entrepreneurs might overestimate the success of their product or service, leading to insufficient planning.
Over-Confidence
- Definition: The tendency to be more confident in our abilities and predictions than is objectively justified.
- Application: Marketers might overestimate the effectiveness of their advertising campaigns, resulting in wasted resources.
Cognitive Dissonance
- Definition: The discomfort experienced when holding two contradictory beliefs or when behavior conflicts with beliefs.
- Application: After purchasing an expensive product, a consumer may justify the purchase to reduce discomfort, even if the product doesn’t meet expectations.
Framing
- Definition: The way information is presented affects decision-making and judgment.
- Application: In advertising, a product’s price can be framed as a “discount” (positive) or a “markup” (negative), affecting consumer perception.
Gains vs. Loss
- Definition: People tend to fear losses more than they value gains of the same magnitude (loss aversion).
- Application: Marketing strategies often focus on highlighting potential losses (e.g., “Don’t miss out on this limited-time offer”) to drive action.
Sunk Cost
- Definition: The tendency to continue an endeavor once an investment in money, effort, or time has been made, even if it’s no longer the best choice.
- Application: A company might continue to invest in a failing product rather than cutting their losses, due to past investments.
Time Delay Trap
- Definition: The tendency to prefer immediate rewards over delayed gratification, often leading to poor long-term decision-making.
- Application: In marketing, consumers might buy products impulsively, preferring immediate satisfaction over future benefits.
Social Proof
- Definition: The tendency to rely on the actions or opinions of others to guide our own decisions.
- Application: Consumers often look at online reviews or social media endorsements before making purchasing decisions.

Moral Philosophy

Moral philosophy involves the study of principles, rules, and theories governing ethical behavior. There are three primary schools of thought:

Utilitarianism (Consequentialist)
- Definition: An ethical theory that suggests the best action is the one that maximizes overall happiness or well-being.
- Key Concept: Greatest Happiness Principle - the idea that actions are right if they promote happiness and wrong if they produce the opposite.
- Application to Marketing: A marketing campaign that benefits the largest number of people (e.g., promoting health or environmental causes) would be considered ethical under utilitarianism.
Deontology (Non-Consequentialist)
- Definition: Ethical theory emphasizing duties and rules over consequences.
- Key Concept: Categorical Imperative - the idea that one should act only according to maxims that could be universally applied.
- Application to Marketing: Advertisements that deceive or manipulate consumers would be seen as unethical, regardless of the benefits to the company.
Virtue-Based Ethics (Non-Consequentialist)
- Definition: Focuses on the character and virtues of the individual rather than on the rules or consequences of actions.
- Key Concept: Golden Mean - the balance between deficiency and excess in behavior (e.g., courage as the balance between recklessness and cowardice).
- Application to Marketing: A company that promotes honesty, fairness, and respect for consumers would be acting ethically according to virtue ethics.

Consequentialist vs. Non-Consequentialist:

Consequentialist theories (like utilitarianism) focus on outcomes.
Non-Consequentialist theories (like deontology and virtue ethics) focus on actions and principles, regardless of outcomes.

Intro to Law & Commercial Free Speech

Defamation:
- Definition: The act of damaging someone’s reputation through false statements.
- Libel vs. Slander:
  - Libel: Written defamation.
  - Slander: Spoken defamation.
- Key Elements of Defamation:
  - Publication: The statement must be made to a third party.
  - Identification: The plaintiff must be identifiable.
  - Harm to Reputation: The statement must harm the plaintiff's reputation.
  - Falsity: The statement must be false.
  - Fault Standard: The plaintiff must show negligence or actual malice (depending on the context).
First Amendment Protection:
- Definition: Protects freedom of speech, press, religion, and assembly.
- Exceptions: Includes defamation, obscenity, and fighting words.
Commercial Free Speech:
- Definition: The right of businesses to engage in commercial speech (advertising, marketing) protected under the First Amendment.
- Key Case Examples:
  - Bigelow v. Virginia: Protection of commercial speech, even if it’s related to abortion services.
  - First National Bank v. Bellotti: Corporate rights to free speech in political contexts.
  - Central Hudson Gas & Electric Corp. v. Public Service Commission: The Central Hudson test for regulating commercial speech.
  - New York Times v. Sullivan: Standard of "actual malice" for public figures in defamation cases.
  - Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council: Commercial speech is protected when promoting lawful services.
Central Hudson Test:
- A four-part test to determine whether government regulation of commercial speech is constitutional.

Trademark

Elements of a Brand:
- Name, logo, design, and overall identity of a business or product.
Trademark Terms:
- Trademark: A recognizable symbol, word, or design used to identify and distinguish a product.
- Trade Name: The legal name of a business.
- Trade Dress: The visual appearance of a product or its packaging.
- Sonic Identity: The use of sound to represent a brand (e.g., jingles).
Trademark Functions:
- Protects consumers from confusion and ensures the identity of the product or service.
Consumer Confusion:
- Definition: Occurs when consumers mistake one product for another due to similarities in branding or trademarks.
Hierarchy of Trademark Distinctiveness:
- Generic: Common terms (e.g., “Computer” for a brand of computers).
- Descriptive: Describes a product (e.g., “Fast Car”).
- Suggestive: Suggests a characteristic (e.g., “Speedster”).
- Arbitrary: Has no relation to the product (e.g., “Apple” for computers).
- Fanciful: Invented words (e.g., “Kodak”).
Secondary Meaning: When a brand or term that is initially descriptive becomes associated with a specific product over time.
Burden of Proof: The party alleging infringement must prove that there is a likelihood of consumer confusion.
Trademark Registration: Not required for protection, but registration provides additional legal benefits.
Genericide: When a trademark becomes a generic term for a product, losing its distinctiveness (e.g., “Xerox” for photocopying).

Copyright

Definition of Copyright: Legal protection for original works of authorship, giving the creator exclusive rights to their work.
What Copyright Protects: Literary works, music, films, software, etc.
Categories under the Copyright Act:
- Literary works, musical works, dramatic works, choreographic works, pictorial/graphic works, motion pictures, sound recordings, architectural works.
What Copyright Does Not Protect:
- Ideas, methods, systems, and works in the public domain.
Copyright Creation: Automatically upon the creation of an original work fixed in a tangible medium.
Rights of Copyright Holders: Reproduce, distribute, display, and perform the work.
Duration of Copyright: Generally, the creator’s lifetime plus 70 years.
Public Domain: Works that are no longer under copyright protection, such as those whose copyright has expired.
Fair Use:
- Factors: Purpose of use, nature of work, amount used, effect on market value.
Copyright in Advertising:
- Ownership can lie with the creator, the employer, or a third party depending on contracts.
Differences Between Trademark and Copyright:
- Trademark protects brand identity; copyright protects original works of authorship