Advertising is becoming an important marketing tool for various businesses following increased competition due to globalization. According to Sharma and Chander (2011), advertising plays the role of informing consumers of the various services and products available in the market. Through the advertisement tool, people understand better product features, costs as well as modifications, thus enabling buyers to make rational decisions on their purchases. However, the various marketing communication messages and advertisements are facing criticism in influencing society and in making sales (Sharma & Chander, 2011). Criticisms on advertising in the past included allegations of manipulating buyers in purchasing unneeded goods, provision of little information concerning the products, and deceiving consumers. Sharma and Chander (2011) confirm the presence of advertisement criticism in the current society with the allegations that they stereotype especially on their effects on children and their way of promoting controversial goods such as tobacco and alcohol. Advertisements on the allegations of reinforcing social competitiveness, materialism, self-respect loss, sexual preoccupation create a better understanding of the unethical and negative aspects related to the process. This research is a critical examination of businesses marketing communication messages and advertisements that misleads consumers and their overall effects.
Background Information
Business enterprises adopt various marketing strategies to increase sales hence, their overall revenues. According to Nuseir (2018), the advertising strategy is the main tool employed by many companies to provide information concerning their products to potential customers. To entice customers, firms make up various claims, whose truth basis is unverifiable. Liepiny and Daugeliene (2012) assert that people are unique in how they interpret the advertisement information, which in most cases lacks objectivity. Therefore, marketing communication messages and advertisements in their totality are very influential to the consumers’ choices through constructing and framing their consciousness. Hence, whenever, businesses engage in false and misleading information, they influence the consumers' choices by unfairly convincing them, thus affecting their overall judgment. Liepinyte and Daugeliene (2012) assert that the misleading type of advertisements convinces a consumer to either purchase a product of less quality than what they wanted, buying goods at a higher cost or purchasing the wrong service or product. Currently, advertisement and the various marketing communication messages are powerful forces shaping consumers' attitudes and behaviors. Nonetheless, advertisement effects are visible on the people's understating of the world, life as well as oneself concerning their values, preferences, and behaviors. Therefore, misleading advertisements violate the buyers’ interests through suggestions on the unique aspects of the products or service altering their overall behaviors by affecting their rationality.
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Misleading or False Advertising
A misleading type of advertisement is that which does not present the correct data or information concerning the product in question. Sharma and Chander (2011) explain the misleading advertisements as those containing wrong characteristics of the products, including wrong prices and exaggerated information. Misleading advertisements use ambiguous phrases which the readers misinterpret, apply artificial demonstrations, include suggestions of small differences in the goods, which are vital, and emphasize on the uniqueness of the brand, which is also available in other goods (Lupianez-Villanueva et al., 2016). More so, they incorrectly imply that the endorsers use their products, thus advocating them during the celebrity endorsements or in testimonials. According to Cawley, Avery, and Eisenberg (2011), a firm is legally wrong to misrepresent their product quality and other specifications relating to the cost, composition, and place of origin as people are likely to use the presented information to make incorrect decisions. False advertising encompasses three components that include falsity, fraud, and misleading.
Falsity- encompasses the claimed facts inconsistencies, a case evident the Toyota Company’s claims on vehicle’s gas mileage being higher than it is (Nusear, 2018). However, regulating advertisements information can be very challenging due to the existing problems of assessing its validity.
Fraud- advertisers make various misleading marketing information to deceive their consumers, thus creating false impressions on the products or services on the buyer’s mind (Nusear, 2018). Fraudulent advertisers influence the consumers' decisions by emphasizing the positive aspects of the products exceeding their reality.
Misleading- The misleading type of advertisements creates features of the products that are in existence, thus creating an untrue impression concerning the product, thus influencing the consumers' choices (Lupianez-Villanueva et al., 2016). Therefore, misleading information concerning a product is likely to cause material injury to consumers.
Types of Misleading Advertisements and consumers reactions
Misleading types of advertisements can either be deceptive or puffery in nature. According to Sharma and Chander (2011), puffery refers to the statements salespeople or advertisers make concerning the products while stating no facts although emphasizing untrue product benefits. Therefore, an advertisement becomes deceptive when it misrepresents or omits information misleading a large number of people into buying the products, evident in the fair and lovely cream (Sharma & Chander, 2011). Thus, advertisements are termed as deceptive if they result in material injury, and influence the consumers’ decisions concerning the service or the good. Puffery and deceptive advertisements have negative effects on both educated and less educated individuals. The terms available in deception and puffery tend to affect the evaluation of the product brands making people lean on exaggerated claims by the advertisers (Sharma & Chander, 2011). Therefore, business organizations are likely to choose puffery and deception in their advertisements when competition forces them in unethical practices or when they consider the customers' perceptions as inferior.
The image below contains misleading information concerning the effects of the cream on a person's face (Sharma & Chander, 2011).
Customers dependent on advertisements to make purchasing decisions are prone to cheating. According to Nuseir (2018), consumers will always fall prey to the advertisers, especially when they present their information in unique environments. Whenever consumers are incapable of recognizing the false information, they are defenseless, viewing commercial information as a guide in making their purchase decisions. However, if they are aware of the deceptive advertisements they develop a sense of cautiousness, thus protecting them from any adverse effects that are likely to follow misleading information (Nuseir, 2018). Discovery on the misleading advertising influences the consumer's view on the commodity or service together with the environment in which the advertisers present the claims. However, discovering the truth in misleading advertising can be hard requiring some level of capability as well as motivation as many consumers lack interest in deducing truths in deceptive acts (Nuseir, 2018). Additionally, the lack of focus during the advertisements increases the chances of the viewers of falling for misleading information. Therefore, one ought to be more careful during advertisement acts to detect any deceptive or misleading information concerning particular goods and services.
Consumers’ vulnerability to misleading advertisements depends on various factors that influence their knowledge levels. Consumers' lack of knowledge on the business' schematic strategies of increasing sales increases their vulnerability to misleading information (Nuseir, 2018). Additionally, their unawareness of the existence of false claims increases their vulnerability to misleading advertisements. More so, individual characteristics and situational contexts influence the consumer's capability in making choices following false advertisements. Nuseir (2018) affirms that the demographic divide plays a role in consumer vulnerability with young adults at increased chances of recognizing misleading messages that older people are incapable of noticing. Nonetheless, gender affects vulnerability especially on personal products (Fatima & Lodhi, 2015). Consumers hunting processes of the best services and products will always assess certain features among them ingredients, quality, and price with different people emphasizing various aspects than others. Additionally, product accessibility and quality will influence the customer's interest in purchasing or using the commodity in question. Therefore, various factors are in play in misleading advertisements making some consumers more vulnerable with availability and quality influencing the decision of buying the commodity in question.
Consumers tend to react differently to the misleading advertisement when they become aware of them. Nuseir (2018) explains that enterprises can employ labeling, packaging, media statements, customer interaction as well as sale people to mislead consumers to make purchases. Contrariwise, consumers undergo many processes and stages of choosing, purchasing, and evaluating the various goods, services to meet their needs, and desires (Fatima & Lodhi, 2015). Therefore, consumers are likely to react to a particular good or service depending on the services accrued, thus when they discover some form of misleading advertisements or marketing practices, they are disappointed. Consumers making purchases through the influence of misleading advertisements suffer both financial and emotional losses, which affects their reactions depending on resources at their disposal (Fatima & Lodhi, 2015). Thus, following disappointments on misleading information consumers are likely to express their disappointment in the product by switching away from the brand in which they may also spread negative information concerning the good, hence affecting the overall sales. Therefore, companies employing the misleading type of advertisement to gain a market share are likely to face an adverse effect on their long-term relationship with the consumers.
Laws and Regulations on Misleading Advertisements
International and national governments and non-governmental organizations such as the advertising agencies, advertisers, and the media are the main sources of advertising regulations (Singh, 2011). Advertising regulations are necessary with the increasing competition, which are leading businesses into false and misleading forms of advertising to increase sales. PraveenKumar and Gunaseelan (2016) highlight the reasons for advertising regulations as; curbing market place malpractices, the prohibition of sex appeal abuse, controlling untruthful advertisements and curbing advertising processes encouraging social biases. Nonetheless, advertisement regulations ensure there is no misusing of role models to make false claims, and preventing unethical comparisons, thus creating a trustworthy business environment (PraveenKumar & Gunaseelan, 2016).
The advertising regulations at the international level analyze advertising from various perspectives. According to Singh (2011), the United Nations (UN) and the UNESCO's regulations since the 1960s take several forms in which the general advertising practices are of the main concern. The UNESCO mainly emphasizes for a code in the advertisement procedures to protect the social values and cultural integrity (Singh, 2011). On the other hand, the UN focuses on the consumer protection principle. UNESCO and the UN provide general guidelines on consumer product trade and the provision of true information concerning the goods. Most importantly, the UN emphasizes host government regulations and laws concerning the provision of enough information, standards, and accurate advertisements (Singh, 2011). Nonetheless, the World Health Organization (WHO) is the main entity scrutinizing health-related advertising problems. Therefore, there are various bodies governing advertisements in the global market
Advertising Regulations in the US
America provides a market to more than 240 million people in the world in which it acts as an advertising capital. According to Singh (2011), the modern techniques of commercial advertising develop fully in the US from where they then spread to other parts of the world. Currently, more than 20 federal administrative entities in the US are controlling advertising processes, with the Food and Drug Administration (FDA) and Federal Trade Commission playing the key roles in the jurisdiction (ACC, 2019). Moreover, the Securities and Exchange Commission together with the Postal Services influences the advertisement regulations in the US. According to ACC (2019), the various legislative bodies and agencies in the US work to curb deceptive, fraudulent, and misleading advertisements. More so, they work to eradicate firms applying unfair techniques in their competition as well as to eliminate all business practices that are harmful to the health and the public safety of the Americans. Another body regulating the US' advertisements is the Federal Trade Commission (FTC) that develops measures to curb all deceptive and unfair acts while possessing specific powers to deal with a particular type of products including cosmetics, food, and drugs (Singh & Sindhu, 2011). The federal commission in the US defines unfairness on the grounds of practices offending rules that exist in the common law, statutes, ethics, and oppression thus leading to consumers' substantial injuries. Therefore, advertisements claim to lack well-controlled and adequate tests, and studies are termed as unfair, hence needing control to prevent hurting the consumers.
Misleading Advertisement Effects on Customer Loyalty
Informative and true advertising processes are responsible for consumer loyalty. Iqbal and Siddiqui (2019) explain the origin of misleading advertisements as a company’s act of adopting confusing, untrue, and misleading information to promote their various goods and services. Firms employing tricks such as Photoshop to improve the products' appearance make the information unsafe for the customers who are defenseless on the misrepresentations of nature, and quality of the products hence, wasting their limited resources to purchase commodities incapable of resolving their problems. According to Singh and Sandhu (2011) false, misdirecting, and wrong publicizing available in deceptive advertisements affect the consumer's faithfulness when they experience or consume the product or service in question. Firms lose their customers’ trust when they engage in false or misleading advertisements, as both existing and new consumers are likely to suffer deception, thus switching to other firms' products or services. More so, the business is likely to decline by getting an awful status through its misleading advertisements associations. Iqbal and Siddiqui (2019) highlight components such as word of mouth, customer satisfaction, and trust as the main factors in influencing the customer's loyalty. Once trust is developed between firms and their faithful customers, they develop superior associations with the consumers who then become returning clients for the various goods and services.
Deceptive advertisements negatively affect the customer's loyalty. Nasir, Mushtaq, and Rizwan (2014) describe customer loyalty as the capability of a business to attract the target consumers who then consume the product on large quantities regularly while advocating for the particular commodity making other people shift from the substitutes to buy the brand. Hence, a company is said to be gaining customer loyalty if it generates repeat sales while getting good reviews and high ratings. Customer loyalty is a significant aspect of the long-term viability of a particular brand (Iqbal & Siddiqui, 2019). Customer retention as an effect of loyalty encompasses the behaviors of a customer in making repeat buying, references, referrals while spreading positive word-of-mouth concerning the product. Iqbal and Siddiqui (2019) assert that customers’ satisfaction positively influences the customers’ loyalty, which they express through their word of mouth. The level of satisfaction of a customer affects their views concerning the products meaning that the more the satisfaction the more loyal they are. Customer loyalty can either be; a) attitudinal that develops following the pre-determined view on a particular brand, b) behavioral, a consequence that emerges after experiences of using the brand in question and c) co-determinants type that is enhanced by the consumers’ present state (Nasir, Mushtaq, & Rizwan, 2014). Therefore, customer loyalty can develop following various factors with their satisfaction playing a greater role.
Additionally, there exists a positive correlation on customer loyalty and trust towards a certain brand (Nasir, Mushtaq& Rizwan, 2014). Trust refers to the act of having confidence that another party is capable of meeting your needs following the set ethical principles. According to Nasir, Mushtaq, and Rizwan (2014), trust exists on the sales representative and on the business organization, all of which positively affect the relationship and long-term loyalty. Trust is a catalyst for the buyer-seller transaction while providing high expectations on the exchange relationship. Customer expectations and beliefs on the trust aspect are enhanced by delivering high-quality services. Nasir, Mushtaq, and Rizwan (2014) assert that customer satisfaction positively influences their trust. Trust appears to be highly influential on consumers’ buying due to the existing belief of the service quality of a particular company. More so, consumer loyalty increases with more positive results from the commodity, making people engage more in spreading positive word of mouth with friends and families. For example, telecom service lost its loyal customers after buying the products and identifying the difference between advertisement and reality, in which people started spreading negative words concerning the company (Nasir, Mushtaq & Rizwan, 2014). Therefore, deceptive advertising negatively influences customers' loyalty by affecting their trust in which they spread negative comments concerning the products.
Case Study on the Over-the-Counter (OTC) Fit Products
Effective and safe means of losing weight include a decrease in calorie intake, behavior changes, and an increase in the physical exercises that guarantee a reduction of 1-2 pounds every week on calories. However, due to the demanding nature of the gradual weight loss measures, individuals prefer the weight loss products, which are highly appealing with minimal effort required to gain the shape one wants. The table below summarizes the number of people that consumed the OTC weight loss products with the hope of reducing weight in the US by 2010 (Cawley, Avery & Eisenberg 2011).
| Demographic factors | Total number in Percentage |
| Adult men | 9.7% |
| Adult Women | 20.6% |
| Female Adolescents | 14.4% |
| Male Adolescents | 7.2% |
By 2001, the US population spent 2 billion dollars on the OTC fitness products, which are either powders, pills, drinks, gels, jewelry as well as patches (Cawley, Avery & Eisenberg, 2011). Consequently, the OTC product tends to have adverse side effects on consumers with little or no efficacy at all in reducing weight. According to Cawley, Avery, and Eisenberg (2011), OTC fitness products are treated as food, thus under the regulations of the Dietary Supplements Health and Education Act of 1994, which relieves the manufacturers' burden of explaining the benefits of the commodities. Therefore, OTC advertisements' regulations are similar to those of food with considerable freedom in advertising their products. However, OTC weight loss commodities have potentially severe and fatal side effects due to the ingredients available in the product that increases the risk of cardiac events and stroke (Cawley, Avery & Eisenberg, 2011). Currently, the market for OTC fitness products lacks enough information, thus existing as experience goods requiring consumption for the customers to understand their effects. Therefore, new rules are necessary for regulating over-the-counter weight loss commodities as well as increasing awareness to avoid overreliance on information that is limited and misleading to consumers to increase consumers’ safety.
Advertising in the global and highly competitive market persuades, provides information, or even misleading consumers. Recently, misleading advertisements are on the rise as firms compete with their rivals to remain in the market. However, misleading advertisements have adverse effects on the consumers in which they compel them to buy commodities that are of lesser quality or at a higher price than what they want. Misleading advertisements affect people's overall process of making rational choices, which then causes disappointments if the commodities do not meet the needs the consumers want. Therefore, consumer awareness is one way of minimizing consumer vulnerabilities to misleading advertisements, as the governmental and non-governmental organizations act to regulate business' marketing communications to ensure they do not deceive their consumers.
References
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