Legal Aspect of Marketing

1. Legal Aspects of Marketing
What to look for when developing a brand

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