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Advertising and Sales Promotion

By law, companies must avoid false or deceptive advertising. Advertisers must not make

false claims, such as suggesting that a product cures something when it does not. They must

avoid ads that have the capacity to deceive, even though no one actually may be deceived.

An automobile cannot be advertised as getting 32 miles per gallon unless it does so un-

der typical conditions, and diet bread cannot be advertised as having

fewer calories simply because its slices are thinner.

Sellers must avoid bait-and-switch advertising that attracts buy-

ers under false pretenses. For example, a large retailer advertised

a sewing machine at $179. However, when consumers tried to buy

the advertised machine, the seller downplayed its features, placed

faulty machines on showroom floors, understated the machine’s per-

formance, and took other actions in an attempt to switch buyers to a

more expensive machine. Such actions are both unethical and illegal.

A company’s trade promotion activities also are closely regu-

lated. For example, under the Robinson-Patman Act, sellers cannot

favor certain customers through their use of trade promotions. They

must make promotional allowances and services available to all re-

sellers on proportionately equal terms.

Beyond simply avoiding legal pitfalls, such as deceptive or bait-

and-switch advertising, companies can use advertising and other forms

of promotion to encourage and promote socially responsible programs

and actions. For example, General Mills’s Nature Valley brand pro-

motes a lot more than just Granola Bars, Greek Yogurt Protein Bars,

Breakfast Biscuits, and other healthy snacks. It also promotes a strong
commitment to preserving nature.19 “We love nature and having fun in

it,” says the brand. The Nature Valley Web and social media brand sites

devote almost as much attention to the topic of taking care of nature as

to marketing specific products. The brand heavily promotes its Preserve

the Parks initiative, which supports restoration projects in America’s na-

tional parks through donations and volunteer hours. It also promotes

the Nature Valley Trail View project, which uses street-view technology

to provide glimpses online into America’s national parks. “To pull it

Promoting socially responsible programs and actions: off,” says the brand, “we hiked, climbed, and captured over 400 miles of
Nature Valley promotes a lot more than just Granola 360° photo-views on trails across the country. We hope it inspires others
Bars and other healthy snacks. It also promotes a strong to join us in enjoying and preserving one of the most amazing resources
commitment to preserving nature. “We love nature and we have.” By promoting its mission of taking care of the great outdoors,

having fun in it,” says the brand. Nature Valley benefits both its “The Taste Nature Intended” positioning

Used with permission of General Mills Marketing, Inc. and the natural environment that its customers love.

Personal Selling

A company’s salespeople must follow the rules of “fair competition.” Most states have
enacted deceptive sales acts that spell out what is not allowed. For example, salespeople may
not lie to consumers or mislead them about the advantages of buying a particular product.
To avoid bait-and-switch practices, salespeople’s statements must match advertising claims.

Different rules apply to consumers who are called on at home or who buy at a location
that is not the seller’s permanent place of business versus those who go to a store in search of
a product. Because people who are called on may be taken by surprise and may be especially
vulnerable to high-pressure selling techniques, the Federal Trade Commission (FTC) has
adopted a three-day cooling-off rule to give special protection to customers who are not seek-
ing products. Under this rule, customers who agree in their own homes, workplace, dormi-
tory, or facilities rented by the seller on a temporary basis—such as hotel rooms, convention
centers, and restaurants—to buy something costing more than $25 have 72 hours in which
to cancel a contract or return merchandise and get their money back—no questions asked.

Much personal selling involves business-to-business trade. In selling to businesses,
salespeople may not offer bribes to purchasing agents or others who can influence a sale.
They may not obtain or use technical or trade secrets of competitors through bribery or
industrial espionage. Finally, salespeople must not disparage competitors or competing
products by suggesting things that are not true.