Question

Find a legitimate news article ( no Wikipedia or someone’s blog) online that describe a company or product that misrepresented itself in advertising or promotion.

An example is the Sketchers toning shoe that was proven not to tone the body as you walked.

Find an other example like this that misrepresented the advertising. Then answer the following.

Tell us about the results of this misrepresentation on the company’s and product reputation

What could company do realistically to improve its image after a situation like this occurs? Be specific with actionable ideas

Answer 1

Companies need to keep their intentions clear while designing the advertising and marketing strategies of their products. It has been seen that advertisers try to play psychologically with the mindset of consumers by over-exaggerating a product’s benefits. This exaggeration leads to advertising persuasiveness in the minds of the consumers and they decide to buy the product based on the false claims. This is unethical and misleading advertisement strategy. The ethical issues, which need to be kept in mind while designing any advertising or marketing strategy, are exploitation of women and children, discrimination of any kind, subliminal perception as well as the social issues prevalent during the telecast time.

Kellogg’s Frosted Mini-Wheats

• Parent Company: Kellogg
• Telecast: Jan 2008
• Notice for mislead advertisement: April 2009
• Ad changed: Yes
• Settlement amount: $4 million

In Jan 2008, Kellogg came up with this new cereal called Kellogg’s Frosted Mini-Wheats with a claim that eating this cereal will improve level of attentiveness in children by 20%. This claim was seemed to be clinically proven. Consumers were attracted to this false claim and sales of this product were on an upsurge. Kellogg’s had earned $105 million in revenue due to this false claim.

FTC issued a law order in April 2009, which ordered Kellogg to stop making such misleading claims. There was no evidence that consumption of this product increased attentiveness. Kellogg had to both stop the television commercials as well as revamp the packaging of Frosted Mini-Wheats. They also were made to pay a compensation amount close to $4 million to the consumers who were misled due to the false claims. The termination of these false claims led to substantial decrease in the demand of this product.

Apart from financial loss, the Kellogg’s company also had to lose its credibility in the market for this misrepresentation in advertising. Consumers started doubting the other products of Kellogg’s as well. This misrepresentation led to decrease in the goodwill of the company.

After a situation like this, company must try to be transparent and accept the mistake. Accepting mistake helps in re-establishing the connect with the users. The company can release a statement of apology and the course it took to rectify the mistake. The company can try to opt for a strong PR, which will help in portraying the company in positive light by highlighting its CSR activities and other initiatives taken for other products development. These initiatives help in buying the trust of consumers back in the brand.

https://www.npr.org/sections/thesalt/2013/05/30/187330235/no-frosted-mini-wheats-don-t-make-your-kids-smarter

https://thinkprogress.org/kelloggs-must-pay-4-million-after-falsely-advertising-mini-wheats-health-benefits-for-kids-470b0e4a3a9f/