Legal Aspects of MarketingLegal Aspects of Marketing

What to look for when developing a brand

Table of ContentsTable of ContentsTrademark 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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TrademarkTrademarkAny 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 symbol3

Consumer ObjectiveConsumer ObjectiveProduct 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

products4

Consumer Objective (cont.)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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Consumer Objective (cont.)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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Distribution ObjectiveDistribution ObjectiveOpening 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)7

Business to Business ObjectiveBusiness to Business ObjectiveGovernment 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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Internet MarketingInternet MarketingThe 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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Internet Marketing (cont.)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 problem10

Business EthicsBusiness EthicsWhy 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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Case Study: Pfizer 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.html12

Case Study: Hewlett-Packard 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 law2 http://www.americasgreatestbrands.com/volume3/18119a.htm

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Final NotesFinal 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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Further referenceFurther referenceMike Beville

• Senior; Marketing/Pre-Law

• mbeville@vt.edu

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Works CitedWorks CitedBeatty, 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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