Skin care brand Sunday Riley wrote fake Sephora reviews…

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We have all worried about it. I love reviews for helping me make buying decisions. It is great to have information from real customers who have experience with a product. But are those reviews real? We have written about it before right here in Teach the 4 Ps. We also have an Ethical Dilemma on fake reviews in Essentials of Marketing.

It came up again recently when it was reported that “Skin care brand Sunday Riley wrote fake Sephora reviews for almost two years, FTC says.” (CNN, October 23, 2019. As consumers increasingly rely on reviews as a source of buying information, there is a growing incentive for sellers to add more information. This story about Sunday Riley is particularly egregious.

This is a major concern for retailers or other intermediaries that add value by providing reviews. For Amazon, good and bad reviews provide valuable information to consumers — but fake reviews threaten trust in the system. Consider, a study by a British consumer education group which found “Many popular tech products on Amazon are boosted by fake reviews, an investigation finds,” (CNN, April 16, 2019). Even travel site like TripAdvisor faces the same concerns, “TripAdvisor defends itself against claim that up to one in seven reviews might be fake,” (CNN, September 6, 2019). For Amazon and TripAdvisor their business models rely heavily on reviews. These intermediaries do not pay customers to provide this information — so it is low-cost to add — but it is one of the main reasons many customers use the sites. Consequently, Amazon and TripAdvisor use artificial intelligence technology to try to weed out fake reviews.

We cover online reviews and related ethical and legal issues in Chapters 13 and 16 in Essentials of Marketing. 

Copyrighting the banana

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Product innovation comes in many forms, including the banana!  According to this Reuters article, that includes banana Halloween costumes.  The article talks about a lawsuit brought by a banana costume designer against Kmart for copyright infringement.  The article goes on to say that US shoppers spend a staggering $3.4B on Halloween costumes each year.

Intellectual property protection is something all innovators must consider when developing new products.  That can be especially important when a novel idea is easy to copy.  Patents and copyrights provide producers a period of legal exclusivity for their idea or design but it can be tricky when trying to determine if someone has infringed on someone else’s rights.  Historically it was difficult to copyright clothing design but in March, 2017 the US Supreme Court issued a ruling that allowed cheerleading uniforms to be copyrighted.  This has opened the door for significant litigation in the fashion industry but it also provides the opportunity for clothing designers to protect their designs (and ensure their designs don’t infringe on competitive designs!)

With Halloween approaching, this can be a fun way to introduce the scope of intellectual property protection to students and get them to think about their Halloween costumes in a whole new way.

What’s Now? Chapter 8 – Changes to the Nutrition Facts Label

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NewLabels

Marketing practices — and laws that govern those practices — are always changing. Chapter 8 discusses food product labels. Recently the Food and Drug Administration made changes to the nutrition facts label that appears on the side of packaged foods. The new label reflects the latest scientific information on how foods — in particular sugar — contribute to an unhealthy diet. For full details, we refer you straight to the U.S. Food and Drug Administration website, “Changes to the Nutrition Facts Label” (May 20, 2016).

Review the press release at the FDA website (link above). List three changes to the label that help it comply with the Federal Packaging and Labeling Act discussed in chapter 8. Do you think these changes will change consumer behavior? In what ways? Why? How do you think these changes will change packaged food producer’s behavior?  

Is this ad misleading? The FTC decided it was…

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Where does the FTC draw the line on misleading advertising. We have a recent example that you can show in class. Often such ads are pulled, but Nissan’s misleading ad is still available:

You might ask your students what might make this ad misleading. It turns out at least two factors contributed to the FTC’s decision. First, the truck couldn’t actually perform as shown in the ad. Minor issue right? Cables hidden in the sand actually pull the dune buggy up the dune. Second, camera angles were played with to make the dune steeper that it really was. While Nissan claimed the video was meant to portray a “fantasy scenario” — the FTC also felt that making it look like a YouTube video was also misleading. The ad does include a small disclaimer “Fictionalization. Do not attempt” which runs in small type in the first three seconds of the ad. This article, “FTC Says ‘No Way’ to Nissan Frontier – Pushing Dune Buggy Ad” (Adweek, January 23, 2014) notes that advertising agencies should know better and can be held liable. See more at the FTC’s website. We have also posted this at Learn the 4 Ps. 

This video might be shown and discussed when you cover legal or ethical issues in advertising.

What does the world of personalized pricing mean?

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price_tags_2We (consumers) are getting used to customized online experiences. Our browsers know where have been on the web and remember our usernames and passwords (unless we specifically ask them not to). When we visit an online retailer, we often find ads for products we just browsed follow us in ads for weeks. When we return to that same online retailer, they keep anything we put in a shopping cart right there waiting for us.

There has always been the promise of personalized pricing, too. Back in 2000 Amazon.com was criticized for experimenting with the practice.  What if we saw different prices based on whether we were on a site via a mobile device as opposed to a computer? What if where we lived influenced the prices we received? Today this happens — probably more than some of us imagined. In “How You Shop Online Changes The Prices You See” (November 6, 2014), Fast Company reports on a study by some researchers at Northeastern University.

This article might be used to stimulate a discussion on price discrimination and its ethics.