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Article
Publication date: 1 June 1990

Howard Johnson

It is undoubtedly the case that advertising plays a significant part in modern economic life in most societies and many view it as an essential part of the operation of a…

Abstract

It is undoubtedly the case that advertising plays a significant part in modern economic life in most societies and many view it as an essential part of the operation of a free market system. Yet it is also the case that our knowledge of how exactly it works and whether the vast amounts spent on it are justified is still uncertain. Lord Leverhulme, the founder of Lever Brothers, is credited with the famous aphorism — ‘one half of advertising does not work but nobody knows which half’ and that perhaps sums up the situation very well. One thing that is generally accepted is that some protection must be provided both to consumers and trade competitors from false or misleading advertising which can lead to market distortions and economic loss to purchasers. Increasingly controversial, however, is the scope and extent of legal and voluntary controls on advertising. In the advertising industry fears are rising about the volume of both national and EEC proposals to restrict or limit advertising and as we move from the '80s, a decade of conspicuous consumption in which advertising flourished, to the caring '90s where environmental issues are to the fore, the advertising industry faces major challenges. Advertising as a whole is facing severe economic and legal challenges after the massive expansion of the 1980's — it is estimated that there was a 4% fall in real terms in UK advertising expenditure in the first quarter of 1990 and an estimated 5% fall in the second quarter. Clients are becoming more demanding and the cosy cartel arrangement whereby advertising agencies made a 15% standard commission on a client's expenditure has gone — commissions are down to 12%‐13% or being replaced by fixed fees. It has been estimated by the Advertising Association that proposed legal restrictions could lead to a loss of £1 bn in revenue for the industry. Multi‐farious pressure groups are campaigning against drink advertising, cigarette advertising and sexism in adverts. The advertising industry's concerns are reflected in a recent report by the Advertising Association — ‘A Freedom Under Threat — Advertising in the EC’. The report indicates a number of areas where legislative controls have been introduced or are proposed to be introduced over the next few years and expresses the fear that controls may be going too far in limiting freedom of ‘commercial speech’. Martin Boase, chairman of the Advertising Association writes in his introduction to the report:

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Managerial Law, vol. 32 no. 6
Type: Research Article
ISSN: 0309-0558

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Article
Publication date: 16 November 2015

Ross D. Petty

The purpose of this article is to examine the US history of advertising regulation, both formal and informal and public and private – particularly focused on advertising

Abstract

Purpose

The purpose of this article is to examine the US history of advertising regulation, both formal and informal and public and private – particularly focused on advertising that is likely to mislead consumers about attributes, characteristics or performance of advertised products.

Design/methodology/approach

This research examines both primary sources such as legal challenges and contemporary writings as well as secondary sources.

Findings

Although early court decisions were reluctant to find advertising to be dishonest, the Post Office was the first government agency to challenge blatantly false advertisements through criminal prosecution. At the end of the 1800s, the nascent advertising industry developed an interest in regulating truthfulness to enhance advertising credibility. It proposed a model state criminal code and advertising clubs, followed by local Better Business Bureaus, began to informally resolve advertising dispute. In 1914, the Federal Trade Commission (FTC) was established with authority to prevent unfair methods of competition which it used to challenge advertising that was likely to injure competitors. This authority was later expanded to cover advertising that was likely to mislead consumers regardless of competitive injury. The FTC experimented with trade association advertising provisions and expanding its concepts and tools overtime until a period of retrenchment in the 1980s that set the foundations of modern advertising regulation.

Originality/value

This is the first treatment of advertising regulatory history that simultaneously covers and compares various sources of advertising regulation to develop a comprehensive exposition of advertising regulation history.

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Journal of Historical Research in Marketing, vol. 7 no. 4
Type: Research Article
ISSN: 1755-750X

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Article
Publication date: 1 April 1988

Gordon E. Miracle and Terence Nevett

Until the late 19th century, the controls on advertising in Britain and the US depended on complying with laws relating to defamation and on the ethical values of…

Abstract

Until the late 19th century, the controls on advertising in Britain and the US depended on complying with laws relating to defamation and on the ethical values of advertisers and media proprietors. During the 20th century, concerns about public safety from dangerous products or services, recognition of the need to safeguard people from misleading or untrue claims, and attempts to strike a balance in the interests of fair trading have led to movements for both self‐regulation, as well as some legal restrictions on marketing and advertising practices. Differences in British and American practices have arisen from the nature of the legal systems and the cultural mores of the respective societies.

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European Journal of Marketing, vol. 22 no. 4
Type: Research Article
ISSN: 0309-0566

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Book part
Publication date: 7 September 2012

James Langenfeld and Brad Noffsker

In a number of recent multi-billion dollar cases brought against cigarette manufacturers, plaintiffs have in part alleged that the cigarette manufacturers (1) conspired…

Abstract

In a number of recent multi-billion dollar cases brought against cigarette manufacturers, plaintiffs have in part alleged that the cigarette manufacturers (1) conspired not to compete on the basis of health claims or the introduction of potentially safer cigarettes since the 1950s, and (2) engaged in fraudulent advertising by making implied health claims in advertisements selling ‘low tar’/‘light’ cigarettes. In this type of litigation, defendants’ actions could be due to alleged illegal behaviour as asserted by plaintiffs, or be the result of market forces that may have nothing to do with allegedly inappropriate acts. We examine the economic evidence relating to these allegations, taking into account some of the major influences on cigarette company behaviour. In particular, our analyses show that much of the cigarette manufactures’ behaviour can be explained by Federal Trade Commission and related government actions, rather than conspiracy or fraudulent acts. We find the economic evidence is inconsistent with an effective conspiracy to suppress information on either smoking and health or the development and marketing of potentially safer cigarettes. Regarding ‘lower tar’ and ‘light’ cigarettes, the economic evidence indicates that the cigarette manufacturers responded to government and public health initiatives, and that disclosing more information on smoking compensation earlier than the cigarette companies did would not have had any significant impact on smoking behaviour.

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Research in Law and Economics
Type: Book
ISBN: 978-1-78052-898-4

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Article
Publication date: 10 July 2007

Zhihong Gao

This paper seeks to propose a framework for systematically investigating international advertising regulation; to provide an in‐depth understanding of the Chinese…

Abstract

Purpose

This paper seeks to propose a framework for systematically investigating international advertising regulation; to provide an in‐depth understanding of the Chinese advertising regulation system; and to use China as a case study to examine how various global and local forces interact and negotiate the landscape of international advertising regulation.

Design/methodology/approach

The paper employs historical analysis; and textual analysis to achieve its purpose.

Findings

Chinese advertising regulation relies largely on government regulation, and self‐regulation plays a much subdued and marginal role. The Chinese regulator aims to control the negative effects of advertising through rigorous regulation as well as certification and censorship programs, but its various advertising laws and regulations are invariably phrased in vague and general terms, so that enforcement and compliance become a major issue. The lack of autonomous trade and consumer organizations combined with minimal public participation in the system further reduces its transparency and effectiveness.

Practical implications

The paper offers a detailed road‐map for advertising professionals to navigate the complex Chinese advertising regulation system.

Originality/value

The paper is the first English article to provide a systematic examination of Chinese advertising regulation.

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Asia Pacific Journal of Marketing and Logistics, vol. 19 no. 3
Type: Research Article
ISSN: 1355-5855

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Article
Publication date: 1 June 1999

Geoffrey P. Lantos

Although companies are institutionalizing ethics, ethical infractions continue unceasingly, causing questions as to where ethical emphasis is going awry. Suggests that…

Abstract

Although companies are institutionalizing ethics, ethical infractions continue unceasingly, causing questions as to where ethical emphasis is going awry. Suggests that businesspeople need not only the intellect but also the will to do the right thing in the face of temptation. Proposes several reasons why businesspeople should want to take the moral high road, including the fact that usually ethical behavior proves to be profitable in the long run. However, such a pragmatic consideration is not sufficient to motivate a person of ethical character. The ethical person chooses the moral course of action regardless of personal sacrifice. It is such virtuous people that business leaders should be hiring and cultivating in ethical mentoring and training which instills an absolutist (not relativist) philosophy and reinforces the importance of willpower. Uses an advertising case study to illustrate how common ethical fallacies can be uncovered and dispelled among employees.

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Journal of Consumer Marketing, vol. 16 no. 3
Type: Research Article
ISSN: 0736-3761

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Case study
Publication date: 31 March 2017

Dheeraj Sharma

It was a usual day at the Fish TV office. Rajeev Batra, Chief Executive Officer of Fish TV called for an urgent meeting. The agenda of the meeting was to discuss the…

Abstract

It was a usual day at the Fish TV office. Rajeev Batra, Chief Executive Officer of Fish TV called for an urgent meeting. The agenda of the meeting was to discuss the controversy that had arisen recently. Fish TV had been accused of misleading the consumers by way of false advertisement. According to the reports, the company was trying to sell DVR or Digital Video Recorders by false advertisement. The issue had become so grave that many consumers have even filed a complaint in the consumer forum asking for redressal from the company. Batra decided to pick Garfield's case in the meeting. Garfield and his mother were one of the complainants and Garfield had sent many emails to Fish TV's office, which were ignored by the executives, explaining the problem they were facing. Batra went through the details of the incident and concluded that it had been a service delivery failure from their side. Every member present at the meeting agreed with Batra on this point. However, Batra sought to analyze the incident in detail and pondered over the cause of the problem to look for solutions to get the company out of trouble. He was confused if the company should wait for the things to settle down on their own or if the company should formulate strategies for service recovery. If the company decided to go with the latter, then what possible remedies could the company offer to overcome this situation? Also, to keep the company out of such troubles in future, Batra needed to re-evaluate the advertising strategies of the company.

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Indian Institute of Management Ahmedabad, vol. no.
Type: Case Study
ISSN: 2633-3260
Published by: Indian Institute of Management Ahmedabad

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Article
Publication date: 1 June 2000

Michael T. Zugelder, Theresa B. Flaherty and James P. Johnson

Marketing organizations are establishing Websites at an unprecedented rate. Despite this rapid growth, many firms are developing Websites with an inadequate understanding…

Abstract

Marketing organizations are establishing Websites at an unprecedented rate. Despite this rapid growth, many firms are developing Websites with an inadequate understanding of the domestic and international legal issues associated with having a presence on the Internet. This lack of knowledge can result in firms facing expensive and time‐consuming litigation. We therefore present the major legal issues that may arise as a result of creating, maintaining, and protecting Websites. In particular, we discuss and provide managerial recommendations regarding consumer protection, defamation and disparagement, intellectual property violations, and jurisdictional issues for international Internet marketers.

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International Marketing Review, vol. 17 no. 3
Type: Research Article
ISSN: 0265-1335

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Article
Publication date: 1 January 1914

The subject of food and drug legislation is again before Parliament. It is proposed, under MR. JOHN BURNS' Food and Drugs Bill (see this Journal, August, 1913), to empower…

Abstract

The subject of food and drug legislation is again before Parliament. It is proposed, under MR. JOHN BURNS' Food and Drugs Bill (see this Journal, August, 1913), to empower the Local Government Board to make Regulations which shall define an article of food or a drug with regard to its nature, substance, and quality. The Board will only issue Regulations of this kind after making such enquiry as in its opinion may be necessary.

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British Food Journal, vol. 16 no. 1
Type: Research Article
ISSN: 0007-070X

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Article
Publication date: 1 December 1996

Barron Wells and Nelda Spinks

Most organizations today want to portray an image of integrity and ethical behaviour. To accomplish this, many organizations develop social responsibility programmes and…

Abstract

Most organizations today want to portray an image of integrity and ethical behaviour. To accomplish this, many organizations develop social responsibility programmes and codes of ethics. Such programmes and codes let employees in the organization know that company leadership is committed to ethical behaviours, and these programmes and codes define what behaviours are considered ethical and unethical. The code of ethics, as well as upper‐level management’s support of the code, must be communicated clearly to all persons in the organization. The role of each person in implementing and following the code must be communicated as well. The code also must be communicated in ways that will elicit the support of everyone in the organization.

Details

Career Development International, vol. 1 no. 7
Type: Research Article
ISSN: 1362-0436

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