False and Puffery Advertising - Term Paper Example

 False and Puffery Advertising Introduction Advertising has been part of communication as a means to convey and receive accurate information about a certain product or services. This information is usually channeled through a commercial communication carrier such as newspapers, magazines, television, radio, posters, billboards, etc. This business activity is naturally visible; in fact, it is prone to public criticisms particularly when it did not meet consumer’s expectations and satisfactions, and when it delivered false advertising. Aside from these ethical issues, advertising is also considered to have an impact on activities of the industry and the society. According to Wolfe and Ferland (n.d.), “the goal of advertising is often to create a need, increase consumer awareness and ultimately influence consumers purchasing decisions.” It has been believed that the use of puffery in advertisement would be helpful and effective in order to build awareness and catch consumer’s attention. Puffery is vague promotional statements and claims that boost only the appeal of a product or service subjectively rather than objectively without a misleading intention that makes the advertisement immunized from regulation (Ford, 1996, p. 8). In legal aspects, false or deceptive advertisements are categorized as implied falsity, literal falsity, and puffery (Barigozzi & Peitz, 2007, p. 223). More often, puffery is not considered as deceptive advertising for it only used to indicate exaggerations, opinions, and subjective claims about product qualities, properties, claims, slogans, and many more (Hunt, 2007). Puffery becomes deceptive only if it crosses the fine line of distinction between puffery and deceptive advertising such as falsely claiming superiority that affect consumer’s choices. Literal falsity refers to statements presumed to mislead consumer’s purchasing decision rather than general statements of opinions wherein no reasonable consumers are likely to rely (Matheson, 2009). Finally, advertisements that talk about facts but there is a hidden falsity across the information is called an implied falsity. The main thrust of this paper is to discuss ethical issues and situations about false and puffery advertising that has an impact on the industry and the society as a whole. Ethical and Social Responsibility From the ethical point of view, puffery and false or deceptive advertising are viewed as important elements in consumer’s choices and value through the highest standard and accurate information that prevails in advertisements. In other words, in order for advertisements to be ethical, claims should be factually substantiated supported with empirical facts and evidences (Levinson & Godin, 1994, p. 36). Ethics in advertising is said to be an integral part of advertising itself because people who often read and see advertisements assumed that there are truths in advertising. As long as the advertisement did not imply nor literally guaranteed something in return upon promoting the product or services, the advertisement would not be considered unethical. Misrepresentations and deceptive aspects of advertising are among the common criticisms of ethics advertising. The issues take several forms and this include “using deceptive mock-ups, using untrue paid testimonials, inserting the word guarantee where nothing is guaranteed, quoting misleading prices, failing to disclose defects in a product, misleading disparaging a competitor’s goods, or simulating well-known brand names” (Velasquez, 2006). On the other hand, the deceptive aspects of advertising occurred if the conveyed information to the consumers such as the real attributes of the products or services are different from what have been advertised. In terms of social impact, criticisms are always part of advertising, sometimes it focused on the style whether it is deceptive or just a mere puffery, and sometimes it focused on the completeness of information. There is only a very thin line that separate deceptive or false advertising and puffery, and this line is very crucial considering that it is difficult to distinguish the nature of advertisement. More and more companies preferred to use puffery in their advertisements in order to be safe from ethical and legal consequences; however, by the time they cross the distinction line and it has been proven that their advertisement is creating false expectations from the consumer’s point of view, and then they are entitled to pay for damages. Say for instance, “Better Ingredients. Better Pizza” is the slogan used by Papa John’s Pizza when they used to advertise their product; however, the slogan has been viewed by Pizza Hut as a kind of deceptive or misleading advertising claim which talked about the physical attributes of the product. For the reason that the former company denigrates their products, Pizza Hut had filed a legal complaint in court and demand for damages. Papa John’s Pizza had reasoned out and said that the advertisement they used is a mere pufffery and it does not imply nor create falsity. As a result, the court ruled in favor of Papa John’s Pizza for it believed that the slogan is just an opinion, and there is also a lack of evidence presented on the part of Pizza Hut (Dunne & Lusch, 2008, p. 182). False or deceptive advertising is considered to be unethical and at the same time it is against the law. Legal Implications Advertisers used puffery advertising, subjective expressions and opinions rather than objectives expressions in order to lure people about what they have advertised. Actually, puffery did not violate the truth-in-advertising laws or the Lanham Act because no one can exactly conclude whether the advertisement’s claim is true or false. According to the Federal Trade Commission (FTC) - a U.S. government agency that regulate advertising - as long as customers or the general public are not mislead, confused, or deceived by these puffing representations then there would be no point to pursue complaints against puffery or subjective claims (Manning & McKenna, 2002). Based on the Lanham Act, mere puffery falls on non-actionable category of misleading advertisements, but as claims are proven to be literally false or there is an implied falsity, then the element of deceptions is already present. Furthermore, a claim which is not factually substantiated is considered as deceptive advertising, and this is intentionally used to mislead or confuse consumers in terms of false product descriptions, claims of superiority, and claims of physical attributes which are specific and measurable (Wolfe & Ferland, n.d.). In as much, it is better for advertisers to claim for the less specific and not at all clear lines of obviously exaggerated representations and bigger lie, because the more the statement is vague the more the advertiser is excluded from legal consequences (Hunt, 2007). The point is, it is okay to expand and exaggerate the truth in advertising as a form of opinion statement but just make sure that reasonable people do not believe it anyway nor think that consumers understand the essence of such advertisement (Richards, 1990, p. 39). From legal standpoint, puffery are statements and claims that take the form of an opinion that have more or less indefinite content and it is not subject to truth claims nor mentioned general truth or fact (Heath, 2005, p. 721). Puffery is legal because opinions are non-fraudulent activities and attributes are immeasurable; however, this does not imply that opinion statements are free from false facts for sometimes claim carries any implications. If for example, certain milk claimed to be “the best tasting milk in the market,” this advertisement statement is considered to be a puffery because the attribute being mentioned is impossible to measure for it is a matter of taste or individual judgment and not on physical fact. A certain consumer may believe this nonfactual opinion upon tasting the milk; however, there is no assurance that other consumers who will purchase the milk might also feel or believe the same considering that the claims stated no facts about the product. As justified by the given example, FTC has legally permitted the use of puffery in advertising. Nevertheless, legal distinctions between deception or falsity and puffery must be carefully considered because puffery is fine and invisible, and lies when repeated too often are sometimes viewed as truth (Shah & D’Souza, 2009, p. 937). According to Heath (2005), “puffery becomes deceptive only when it falsely claims the substantive superiority of a product or service, and when it can be demonstrated that the false claim is likely to affect consumer choice” (p. 722). On the other hand, false advertising law prohibits those advertisements that are proven to intentionally mislead people by giving inaccurate information, and to be confused as to the source of products provided that it is supported by empirical evidences. Impact to the Industry Businesses have been pouring millions or even billions of dollars on advertising just to influence consumer’s choice behavior toward a particular product, purchasing decisions, and incremental value so that consumer’s commitment will continue and helped them earned more profits (Miller & Stanfford, 2010, p. 31). Advertising cost is not an overhead expense for the business; in fact, it is a gain on their part considering that the cost built into the price of the product far exceeds the cost of production. Because advertising costs are ultimately passed on to consumers then the prices of the final product being released in market are becoming more expensive. Good thing that high priced products due to advertising costs are justified by the offered benefits of the products (Wilmshurst & Macay, 2002, p. 111). Therefore, the moment businesses discontinue to invest in expensive advertising, prices of product would also tend to be lowered, but unfortunately this situation is not true all the time. Through advertising, products have been given the chance to increase its value and appeared to become a product with quality. Regularly advertised products are becoming more popular and desirable to consumers for advertisement serves as a warranty regarding the performance of the product (Comanor & Wilson, 1974, p. 25). This is also basically the reason why consumers preferred to purchase on advertised brand compared to little-advertised but low-priced products even though both products are having the same function. Advertising is also one of the ways to get new products or services off the ground, and for them to be successful in terms of market share. Through advertising, intense competition among small and big companies in the industry are being restricted, this is because smaller firms cannot meet the same budget allocated by big ones on advertising. This is what has actually happened to the business industry nowadays wherein it had been difficult for newcomers to dominate the market if it had insufficient resources particularly in creating new products and improving the old ones that is why they prefer to disappear. Impact to the Society The benefits of successful advertising are consequently passed on to consumers in a form of lower priced products. The evidence of successful advertising is represented by an increase in demand which means that the business needs to produce higher volume of products and consequently lowered their production costs. However, even though this scenario may or may not happen, advertising has been an integral part of business growth that is why advertisers continue to advertise their product or services no matter what (Miller & Stafford, 2010, p. 32). For consumer’s part, the best option is to take advantage with the information being offered in order to come up with a sound purchasing decision. “False or misleading marketing communications can destroy customer’s trust in a company” (Ferrel, O., Fraedrich, & Ferrell, L., 2008, p. 76). The process of false-advertising litigation is lengthy and time consuming, and it also costs the company a lost of sales. False-advertising laws are present in order to protect the society from misleading and inaccurate information about products or services that would place the customers in the dangers of consumption. If consumers tend to purchase products or service out of a false facts and inaccurate information, then the consumption is considered to be bad. However, if the purchase had happened without the intervention of guaranteed facts, then the consumption is characterized to be good. Consumers have the right to sue the advertisers upon the presentation of proof that injury has been committed by deception that includes the purchased of wrong products brought by false beliefs (Bowie, 2002, p. 9). Conclusion Advertising is considered to be an important element for business success. However, the use of advertising nowadays has been subject to ethical and legal concerns considering their different interpretations. These interpretations are carried by the puffery and false or deceptive advertising among businesses. Because it has been difficult to determine what is puffery from deceptive advertising, legal consequences are created to carefully evaluate the issues in advertising. The process of false-advertising litigation is a burden not just to the alleged company but also to the consumers who need to find sufficient evidences of deception. References Barigozzi, F., & Peitz, M. (2007). Comparative advertising and competition policy. In J. P. Choi (Ed.), Recent developments in antitrust: Theory and evidence (pp. 215- 230). Cambridge, MA: The MIT Press. Bowie, N. E. (Ed.). (2002). The blackwell guide to business ethics. UK: Blackwell Publishers Ltd. Comanor, W. S., & Wilson, T. A. (1974). Advertising and market power. USA: Harvard University Press. Dunne, P. M., & Lusch, R. F. (2008). Retailing (6th ed.). USA: Thomson Higher Education. Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2008). Business ethics: Ethical decision making and cases (7th ed.). Boston, MA: Cengage Learning. Ford, C. V. (1996). Lies! Lies!! Lies!!!: The psychology of deceit. Washington, D.C.: American Psychiatric Press, Inc. Heath, R. L. (Ed.). (2005). Encyclopedia of public relations, Vol. 2. Thousand Oaks, California: Sage. Hunt, B. (2007). Truth in your advertising: Avoid puffery? Realty Times. Retrieved from http://realtytimes.com/rtpages/20070620_truthpuffery.htm Levinson, C., & Godin, S. (1994). The guerrilla marketing handbook. New York, NY: Houghton Mifflin Company. Manning, W., & McKenna, J. (2002). Lanham Act also applies to false advertising claims. Robins, Kaplan, Miller & Ciresi, LLP. Retrieved from http://www.rkmc.com/Lanham_Act_Also_Applies_to_False_Advertising_Claims.htm Matheson, J. (2009). Beauty food: puffery or false advertising. Inside Cosmeceuticals. Retrieved from http://www.insidecosmeceuticals.com/articles/ 2009/10/beauty-food-puffery-or-false-advertising.aspx Miller, R. L., & Stafford, A. D. (2010). Economic education for consumers (4th ed.). USA: South-Western Cengage Learning. Richards, J. I. (1990). Deceptive advertising: Behavioral study of a legal concept. New Jersey, NJ: Lawrence Erlbaum Associates, Inc. Shah, K., & D’Souza, A. (2009). Advertising & promotions: An IMC perspective. New Delhi: Tata McGraw-Hill Publishing Company Ltd. Velasquez, M. G. (2006). Business ethics: Concepts & cases. California, CA: Pearson Prentice Hall. Wilmshurst, J., & Mackay, A. (2002). The fundamentals and practices of marketing. Woburn, MA: Butterworth-Heinemann. Wolfe, K., & Ferland, C. (n.d). Deceptive advertising and environmental sciences. The University of Georgia. Retrieved from http://www.agecon.uga.edu/~caed/deceptivead.pdf Read More