Identifying Misleading Advertising

Russo, J. Edward; Metcalf, Barbara L.; Stephens, Debra L.

doi:10.1086/208848

Cited by 125 publications

(47 citation statements)

References 16 publications

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“…Inaccurate statements of product quality are widespread; such 'deception' in advertising is an issue that has been primarily examined from a regulatory perspective (Russo et al, 1981;Richards, 1990). Deception might be expected to be greatest when quality is unobservable (Darby and Karni, 1973), for example, health and nutrition claims for foods (Greenberg, 1996;Pappalardo, 1996).…”

Section: Introductionmentioning

confidence: 99%

When (not) to indulge in ‘puffery’: the role of consumer expectations and brand goodwill in determining advertised and actual product quality

Kopalle

Assunção

2000

Manage Decis Econ

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We analyze why some firms advertise product quality at a level different from the actual quality of a product. By considering the interacting effects of product quality and advertising, we develop a dynamic model of consumer expectations about product quality and the development of brand goodwill to determine the optimal values for the decision variables. The model parameters are determined based on prior literature and we use numerical techniques to arrive at the solution. We then derive conditions under which a firm will find it optimal to overstate or understate product quality. The results suggest that quality may be overstated in markets characterized by high price sensitivity, low quality sensitivity, low brand loyalty, and high source credibility, suggesting the need for vigilance on the part of consumers, upper level managers and regulatory authorities in such market conditions. This is important because current regulatory resources are insufficient to reduce deceptive advertising practices (Davis JJ. 1994. Ethics in advertising decision-making: implications for reducing the incidence of deceptive advertising. Journal of Consumer Affairs 28: 380-402). Further, the law of deceptive advertising prohibits some advertising claims on the ground that they are likely to harm consumers or competitors (Preston IL, Richards JI. 1993. A role for consumer belief in FTC and Lanham Act deceptive advertising cases. American Business Law Journal 31: 1-29). Also, Nagler (1993. Rather bait than switch: deceptive advertising with bounded consumer rationality. Journal of Public Economics 51: 359-378) shows that deceptive advertising causes a net social welfare loss and a public policy effectively preventing deception will improve social welfare. Copyright © 2000 John Wiley & Sons, Ltd. DOI: 10.1002/mde.985 INTRODUCTIONInaccurate statements of product quality are widespread; such 'deception' in advertising is an issue that has been primarily examined from a regulatory perspective (Russo et al., 1981;Richards, 1990). Deception might be expected to be greatest when quality is unobservable (Darby and Karni, 1973), for example, health and nutrition claims for foods (Greenberg, 1996;Pappalardo, 1996). Yet mis-statements of actual quality occur frequently on objective and measurable attributes. For example, an article in the Wall Street Journal (1992) reported the extent of overstatement of skiable terrain by different ski resorts. When Nestle S.A. agreed to drop the word fresh from its label of Contadina Fresh refrigerated pasta sauce and Procter & Gamble Co., decided to remove the word fresh from its 'Citrus Hill Fresh Choice' orange juice packaging (Wall Street Journal, 1991), both implicitly admitted to over-representation of product quality. Nagler (1993) suggests that companies will advertise deceptively when full rationality entails a cost to the consumers. Though under-representation of quality may be less common, Kotler and Armstrong (1987) noted that, 'The Boeing sales force . . . tend to understate rather than o...

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Section: Introductionmentioning

confidence: 99%

When (not) to indulge in ‘puffery’: the role of consumer expectations and brand goodwill in determining advertised and actual product quality

Kopalle

Assunção

2000

Manage Decis Econ

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“…The empirical approach used for this work could be further developed by studying the perspective of the target audience who receives the advertising messages in order to test how likely they are of being deceived; it would also help us to understand their perceptions and beliefs towards these advertisements (Russo et al, 1981). Furthermore, our research has detected an excessive use of superlatives and exaggerative phrases when extolling the benefits of the product.…”

Section: Discussionmentioning

confidence: 99%

Análisis de la publicidad relacionada con la salud en la radio española

Perelló

Muela

2011

Cuadernos.info

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1 ResumenLos dos principales objetivos de este estudio son identificar los reclamos engañosos en la publicidad de productos relacionados con la salud y cuantificar la presencia de mensajes que proponen beneficios saludables. Para su consecución, se llevó a cabo un análisis del contenido de 430 cuñas publicitarias emitidas en la radio española a partir de un marco de codificación basado en la normativa nacional sobre la publicidad de productos con pretendida finalidad sanitaria. Los resultados de la investigación muestran que las cuñas con reclamos engañosos relacionados con la salud suponen el 15,81% del total de anuncios emitidos por radio y que la categoría de salud representa el 69.09% de las alegaciones ilícitas. El trabajo de investigación revela las limitaciones y contradicciones del sistema de supervisión y evaluación de la publicidad engañosa en España. 1This article is part of a larger investigation of the Universidad Rey Juan Carlos on deceptive advertising and violation of the law.Análisis de la publicidad relacionada con la salud en la radio española MUElA, C., PEREllÓ,S. / Análisis de la publicidad relacionada con la salud en la radio española(pp. 67-76) ARTíCULO 68CUADERNOS DE INFORMACIÓN / Nº 29 / 2011 -II (jUlIO-DICIEMbRE) / ISSN 0716-162x

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“…For instance, Gardner (1975, 42) argued that if an advertisement (or advertising campaign) leaves the consumer with an impression(s) and/ or belief(s) different from what would normally be expected if the consumer had reasonable knowledge, and the impression(s) and/or belief(s) is factually untrue or potentially misleading, then deception is said to exist. Specifically, Russo, Metcalf, and Stephens (1981) identified three types of deceptive ads that are characterized by fraud, falsity, or misleadingness. Fraud and falsity both involve the existence of claim-fact discrepancies, while fraud focuses more on deliberate practices luring buyers into unfair and/or harmful transactions.…”

Section: Deceptive Advertisingmentioning

confidence: 99%

Deceptive advertising and third-person perception: The interplay of generalized and specific suspicion

Xie

2014

Journal of Marketing Communications

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Identifying Misleading Advertising

Cited by 125 publications

References 16 publications

When (not) to indulge in ‘puffery’: the role of consumer expectations and brand goodwill in determining advertised and actual product quality

When (not) to indulge in ‘puffery’: the role of consumer expectations and brand goodwill in determining advertised and actual product quality

Análisis de la publicidad relacionada con la salud en la radio española

Deceptive advertising and third-person perception: The interplay of generalized and specific suspicion

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