Legal Aspect of Marketing

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Legal Aspect of Marketing

  1. 1. Legal Aspects of Marketing What to look for when developing a brand
  2. 2. Table of Contents <ul><li>Trademark 3 </li></ul><ul><li>Consumer Objective 4 </li></ul><ul><li>Distribution Objective 7 </li></ul><ul><li>Business to Business Objective 8 </li></ul><ul><li>Internet Marketing 9 </li></ul><ul><li>Business Ethics 11 </li></ul><ul><li>Case Study: Pfizer 12 </li></ul><ul><li>Case Study: Hewlett-Packard 13 </li></ul><ul><li>Final Notes 14 </li></ul><ul><li>Further Reference 15 </li></ul><ul><li>Works Cited 16 </li></ul>
  3. 3. Trademark <ul><li>Any combination of words and symbols that a business uses to identify its products or services and distinguish them from others. </li></ul><ul><li>Requirements </li></ul><ul><li>Must be distinctive (Converse, King Kong, etc.) </li></ul><ul><li>Allowed to trademark a “trade dress” (image or overall appearance of a business or product) </li></ul><ul><li>Can’t be similar to a previous trademark </li></ul><ul><li>Can’t be deceptive, descriptive (ex. green), or scandalous </li></ul><ul><li>Can’t be someone’s name (ex. Mike) </li></ul><ul><li>Why Trademark? </li></ul><ul><li>Gives your business a distinct advantage over competitors by owning a specific name or symbol </li></ul>
  4. 4. Consumer Objective <ul><li>Product liability (Consumer Goods) </li></ul><ul><li>Liability after causing physical or economic harm to a consumer of a product </li></ul><ul><li>After the injury is incurred, the merchant is responsible for either a warranty, negligence, or strict liability claim </li></ul><ul><li>Bottom line : a defective product or negligent act can result in huge damages both financially and to your brand </li></ul><ul><li>EXAMPLE: McDonald’s sued over hot coffee </li></ul><ul><li>Pay attention to markets with special rules </li></ul><ul><li>Alcohol, tobacco, and medical are just a few fields that have specific rules governing marketing/distribution capabilities </li></ul><ul><li>FDA is a great resource for restrictions/liabilities of many such products </li></ul>
  5. 5. Consumer Objective (cont.) <ul><li>Sales Restrictions (FTC act) </li></ul><ul><li>Deceptive Acts or Practices : Advertisement can’t contain an important misrepresentation or omission that is likely to mislead a reasonable consumer </li></ul><ul><li>Bait and Switch : Merchant can’t advertise a product and then “not have any in stock” in an effort to get customers to buy another product </li></ul><ul><li>Unfair Practices : Obviously, business practices can not harm a consumer in any way, but it must also be fair according to law and social norms (must not violate public policy) </li></ul><ul><li>EXAMPLE: TicketMaster sued over using “bait and switch” tactics </li></ul>
  6. 6. Consumer Objective (cont.) <ul><li>Client Restrictions </li></ul><ul><li>Research any client-specific restrictions (building restrictions, advertising, etc) </li></ul><ul><li>Check patents and capabilities of specific products </li></ul><ul><li>Asking clients for any product restrictions will prevent lawsuits and will help not waste time on projects that aren’t feasible </li></ul>
  7. 7. Distribution Objective <ul><li>Opening new distribution channels </li></ul><ul><li>Know restrictions of that channel (website, storefront, etc) </li></ul><ul><li>Beware of opening distribution in places competitors have yet to reach (need sufficient research to know channel limits and restrictions) </li></ul><ul><li>Considering government regulation is necessary for large corporations opening new channels </li></ul><ul><li>Virginia Tech </li></ul><ul><li>VT is a great channel for distribution for many reasons; most importantly it’s a large concentrated population </li></ul><ul><li>ALWAYS check with VT officials to make sure your product can gain access to the campus before doing so (consult the legal office ) </li></ul><ul><li>Restrictions are placed on Virginia Tech’s trademarks and intellectual properties (using protected material never goes unnoticed) </li></ul>
  8. 8. Business to Business Objective <ul><li>Government Regulations </li></ul><ul><li>Some products/businesses can’t work together due to target market restrictions (usually age restrictions) </li></ul><ul><li>For example, alcohol and tobacco can’t be marketed in conjunction with a business whose primary audience are minors </li></ul><ul><li>Contracts </li></ul><ul><li>Contracts are very important because it ensures the safety of each partner </li></ul><ul><li>In all areas, especially business to business, be sure each party is fully capable to uphold a contract to prevent lawsuits </li></ul>
  9. 9. Internet Marketing <ul><li>The internet provides a great resource for both company websites and advertising </li></ul><ul><li>Social Media </li></ul><ul><li>Online communities provide great channels to advertise brands and products </li></ul><ul><li>Forming an online social network presence allows companies to track feedback from consumers and recognize market trends </li></ul><ul><li>Advertising on social networks is the new trend because of its capability to be personalized to users (price also increasing) </li></ul><ul><li>YouTube excellent resource for campaigns such as viral videos and consumer generated advertising (contests, etc) </li></ul>
  10. 10. Internet Marketing (cont.) <ul><li>Blogs </li></ul><ul><li>Blogs have the capability to be huge influencers for a brand or product </li></ul><ul><li>People’s word of mouth now has the capability to reach thousands from just one blog </li></ul><ul><li>Blogs can be company-sponsored to give consumers a personal link to a company and may also include exclusive deals </li></ul><ul><li>Search Engine Optimization </li></ul><ul><li>Process of increasing the probability of a particular company’s web site emerging from a search </li></ul><ul><li>Various methods of optimization (depending on budget) are used to raise the probability </li></ul><ul><li>Excellent resource to give a company an online presence, but with increasing popularity, clutter is beginning to be a problem </li></ul>
  11. 11. Business Ethics <ul><li>Why Bother? </li></ul><ul><li>As brand managers, one must realize that all marketing decisions made have the ability to affect many more people than just those involved in the immediate scope of business </li></ul><ul><li>Not only are non-ethical practices costly monetarily, the consequences stay with your own personal brand forever </li></ul><ul><li>Even small businesses fall victim to ethical issues that not only can destroy a company financially, but can also destroy a brand entirely </li></ul>
  12. 12. Case Study: Pfizer <ul><li>Unlawful Marketing 1 </li></ul><ul><li>Caught using “off-labeling” marketing practices for multiple medicines, most notably Bextra </li></ul><ul><li>Off labeling is a pharmaceutical term defined by the FDA as the “practice of prescribing pharmaceuticals for an unapproved indication or in an unapproved age group, unapproved dose or unapproved form of administration” </li></ul><ul><li>Pharmaceutical representatives were falsely advertising Bextra, amongst other drugs, to doctors across the nation </li></ul><ul><li>Pfizer punished with 2.3 billion dollar settlement </li></ul><ul><li>A few internal “whistle blowers” reported the abuse and eventually received huge rewards from the government </li></ul><ul><li>1 http://www.nytimes.com/2009/09/03/business/03health.html </li></ul>
  13. 13. Case Study: Hewlett-Packard <ul><li>Successful Marketing Campaign 2 </li></ul><ul><li>HP created in 1939 on foundation of innovation </li></ul><ul><li>2002 launched major global brand campaign with tagline “Everything is Possible” </li></ul><ul><li>“ Operation One Voice was an initiative [created by HP leadership] to streamline all marketing, communications, user interfaces, and product designs to achieve a world-class integrated brand for HP” </li></ul><ul><li>A top-down approach was used to create a company culture that was dedicated to the new global brand of HP innovation </li></ul><ul><li>“ Everything is Possible” campaign named 2003 Campaign of the Year by Creativity magazine </li></ul><ul><li>A company with dedicated leadership can lead a global campaign ethically and within the limits of the law </li></ul><ul><li>2 http://www.americasgreatestbrands.com/volume3/18119a.htm </li></ul>
  14. 14. Final Notes <ul><li>Consult the FTC for all rules concerning advertising of specific products </li></ul><ul><li>To ensure the legality of a project, especially for small businesses, consult the resources provided, but most importantly ask the client personally (they will know best) </li></ul><ul><li>Avoiding legal restrictions will only result in loss of capital and time for any client involved </li></ul><ul><li>ALWAYS research legal restrictions before a project is thought out, they are the single thing that can kill a project before it even starts </li></ul>
  15. 15. Further reference <ul><li>Mike Beville </li></ul><ul><li>Senior; Marketing/Pre-Law </li></ul><ul><li>[email_address] </li></ul>
  16. 16. Works Cited <ul><li>Beatty, J., & Samuelson, S. (2010). Business Law and the Legal Environment. Mason, Ohio: Cengage Learning. </li></ul><ul><li>Clow, K., & Baack, D. (2010). Integrated Advertising, Promotion, and Marketing Communications. Upper Saddle Ridge, New Jersey: Pearson Education, Inc. </li></ul><ul><li>Coughlan, A., Anderson, E., Stern, L., & El-Ansary, A. (2006). Marketing Channels. Upper Saddle River, New Jersey: Pearson Education, Inc. </li></ul>

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