1

CHAPTER 1

THE PROBLEM AND ITS BACKGROUND

This chapter presents the background of the study, statement of the

problem, hypothesis, scope and delimitation, significance of the study, and

definition of terms.

Introduction

The research question of this part is: to what extent to do advertising, and

deceptive advertising in particular, affect consumption of the advertised good and

its substitutes. It can be perpetrated through personal selling, advertising, labeling

packaging, catalog, and deceptive telemarketing.

This study looked at the effects of false or misleading advertisements on

consumers decisions. Marketing strategies are aimed at generating high number of

sales and thus revenues. Advertising is the most common tool used by marketers

to create awareness of the features of a product or service and to persuade

consumers to buy it. The effort to entice buyers is often made up of many claim

whose truth is often hard to establish.

Advertisements are supposed to get a particular message or a product

across to the public. However, some adverts are just too good at being bad.. Add
2

to the fact that the Philippines is not exactly one of the most liberal-minded

countries in the world. Deceptive marketing is false or misleading sales activities

and information aimed at luring, coercing, seducing, persuading, or enticing both

potential and existing consumers or a product to patronize a trader, sellers or

manufacturers of a product in.

Misleading advertisement is the use of false statements in advertising. It is

both widespread and old (Jef Richards, 1990). However, misleading

advertisements has changed through time because of regulations (Kotler, 2010).

Policy makers have developed a substantial body of laws regarding this type of

advertising. Deceptive advertising is now illegal in many countries (Federal Trade

Goverrnment, 2012).

Customer are day after day affected by advertising and marketing. Our

main research objective is to know the effects of deceptive advertising to the

customers loyalty. After explaining the deceptive advertising in detail, the

research study will demonstrate how consumers can respond after getting

deception in advertisements for the product or service they purchased.

Background of the Study

When advertisers engage in misleading of false advertising, consumer choice

is affected because consumers are unfairly convinced to believe in the messages

of the advertisers, which affect their judgment. Misleading advertising either

compels consumer to purchase items at a higher price or at a lesser quality than

3

what they wanted, or to purchase the wrong product or service ( Kariyawasan and

Wigley, 2017).

Misleading advertisements persuades consumers to buy a product not

because it is the best among the alternatives, but because it is simply presented at

the best. However, many consumers can notice patterns of imitation in the

features of a product compared with other similar products, and they respond to

them as misleading.

When consumers respond to false or misleading advertising, they are

likely to experience emotional and financial losses (Sheehan, 2013). They buy

products and services based on misleading advertisements emotionally as well

mentally. Consumers have limited resources; hence, they lose these limited

resources when purchasing products based on fraudulent advertising. Consumers

experience emotional (Gensler et al., 2013; Weber, 2015).

There are many advertisements in virtually all platforms that consumer

can access. Plentiful misleading and false advertisements have had an impact on

consumer behaviour. Consumers have become more careful when they encounter

false advertising ( Lamabadusuriya, 2014). They have been exposed to many false

or misleading.

Statement of the Problem

The purpose of this study is to aim the effects of deceptive advertisements.

The researchers used descriptive research design (Descriptive research is defined

as a research method that describes the characteristics of the population or the

4

phenomenon that is being studied). The effects of deceptive advertisements

among the grade 12 students of CIT Colleges of Paniqui Foundation Inc.

1. What is the profile of the grade 12 students of CIT Colleges of Paniqui

Foundation Inc. in terms of their:

1.1 Age

2.2 Gender

2. What is the effects of deceptive advertising among the grade 12 students of CIT

Colleges of Paniqui Foundation Inc.

2.1 Consumer Behavior

2.2 Financial Loss

2.3 Incorrect Interpretation

3. What is the plan proposed?

Hypothesis

The researchers has generated the following hypothesis for the purpose of

final analysis:

H1: Deceptive advertisements have a negative influence on consumer’s loyalty

H2: A significant relationship exists between advertisements and consumer

behavior.
5

H3: A significant relationship exists between advertisements and consumer

behavior.

H4: Significant relationship between advertisements and consumer.

Significance of the Study

The studies expression on the Effects of Deceptive Advertisements on

consumer’s behavior. The findings of the study will be beneficial to the

following:

Researchers. Investigate the question of who benefits or loses from the

misinformation created by advertising competition and related regulatory policies.

Customers. Responsible for reviewing the information used to substantiate and

claims.

Students. This study may serve as a guide and reference for the students who

experienced false advertising. Expounded the possible influence of false

information and relevant regulatory policy.

Future Researchers. This research will be a useful reference for the researchers

who would plan to make study related to misleading advertisements.

Teachers. Through this study, teachers will be able to know the percentage of

students who are affected by the casualty of deceptive advertisements.

Scope and Delimitation

6

The purpose of this study is to determine the status of marketing strategies in

luring out target consumers. This way, the status or the respondents of the study

will focus solely on local businesses in Town Proper of Paniqui, Tarlac,

specifically, food services. Fast food chains will be excluded in this study, as the

scope strictly constricts the businesses that are locally owned. The effects of false

advertisements among the grade 12 students of CIT Colleges of Paniqui

Foundation Inc.

Definition of Terms

For a clearer understanding of the study, the following terms used are defined

operationally.

Advertisements. This refers how a company encourages people to buy their

products, services or ideas.

Consumer Behavior. This refers to the consumer’s emotions, attitudes and

preferences affect buying behavior.

Deceptive. This refers to the appearance or impression different from the true

one; misleading.

Fast Food Chain. This refers to the part of a restaurant chain or franchise

operation that provides standardized ingredients and partially prepared foods and

supplies to each restaurant through controlled supply channels.

7

Chapter 2

REVIEW OF RELATED LITERATURE

This chapter cited books internet, journals, magazines and other references

which are relevant on the present investigation. It is composed of related

literature and studies, both local and foreign which contains facts and information

on the research problem at hand which are related to the study. It aims to provide

the basic formulation and relevant information to prove for more valid

understanding on how each of these information and studies relate to the present

investigation.

Related Literature

Deceptive advertising has been researched in the context of marketing,

business, psychology, economics, law, public policy, health, food, and

communication. Many studies document a negative relationship between

deceptive advertising and consumer evaluations, such as attitudes toward the

brand and ad, trustworthiness, purchase intention, and likelihood to recommend.

8

For instance, Cowley (2006) found that puffery claims are perceived as less

credible by consumers than factual claims, Boyer et al. (2015) discovered that

covert marketing elicits more negative attitudes toward a product than overt

marketing, and Craig et al. (2012) showed that highly deceptive ads are associated

with lower purchase intentions than are factual ads. However, some forms of

deceptive advertising do not produce adverse effects. For example, Xu and Wyer

(2010) found that puffery was actually related to higher consumer product

evaluations. Further, misleading claims have been shown to relate to more

positive consumer attitudes toward ads and and brands (Newell et al. 1998), and

green washing is believed to have a positive impact on brand imagery (Paeguel et

al. 2015).

Related Studies

Foreign Literature

Consumers are faced with a very large numbers of advertisements every day

in different media. This makes the job of the policy makers very difficult to judge

the misleading nature of all such messages. The task can be made simpler if such

questions are reserved only for critical case, the majority of the work should

concern itself not with the questions whether an advertisement does mislead, but

whether it has the capacity to mislead (Preston, 1997).

When consumers believe and advertisement to be true when is actually

false, consumers may be “harmed” (Atlas, 1999). Individuals prefer their beliefs

to be true, and if consumer may be claims and inconspicuous claims lead to a

9

significantly higher levels of false beliefs (e.g., lack of side effects, low price and

speed of relief) than did the true or no information claims. The findings are

consistent with a body research, showing that consumers constantly misconstrue

some types of advertisement claims and that the implication drawn from

questionable claims are treated as factual (Preston, 1967).

In addition, false beliefs often persist even following the presentation of

corrective information (Aderson, 1983). Also certain advertisements make claims

that seem to be exaggerated on the face. If therefore is not in-genuine to

understand that the possibility of such claims being called deceptive is very slim.

Russo (1976) and his co-workers (RussoMetcalff, and Stephens 1981)

emphasized that holding a false belief after being exposed to the does not imply

that the advertisements caused the belief.

Foreign Literature

Many alleged deceptive claims nowadays are implicitly manipulative rather

than outright false (Mazis, 2015; Shanahan & Hopkins, 2007). Publicizing has

constantly raised a considerable measure of feedback from people in general and

various studies have been done for the most part on the ranges of the effect of

deceptive promoting towards buyers. Studies have demonstrated that the

costumers think promoting frequently abuses expansive moral standards (Treise,

Weigold, Conna, & Garrison, 1994). A few people may contend that the issue of

promoting moral is a confusing expression (Beltramini, 1999).

10

In another study (Pechman, 1996), a company claims that it charges the

lowest rate for a particular service but does not mention that it charges the lowest

rate for a particular service but does not mention that it charges more than

competitors for other required services. Due to erroneous inferences, respondents

tend to believe that this company has the lowest overall price. Erroneous

inferences can expand beyond the claimed attributes. Barone and Miniard (1999)

expose respondents to a partially comparative advertisement containing a

combination of comparative and non-comparative claims.

Juridical standpoint stated that a commercial is said to be deceiving if the

company has proceeded intentionally and purposefully (Corson, 2010). The

European Commission (2005) expresses misleading advertising like a profitable

practice that covers dishonest information and is therefore lying or in any way,

including whole performance, deceives or is profitable to cheat the normal

consumer to take a transactional decision that he would not taken otherwise

(Official Journal of European Union, 2005).

Local Literature

Interest among advertisers and marketers in deceptive or misleading

advertising issues is strong [cf. 6]. However, at the time that authors’ study was

conducted, not a single empirical investigation had been reported in which the

presence of deception or its impact on consumers behavior was measured. One

likely reason for this paucity of research is the lack of a compelling conceptual

and operational function. Fast food companies knows exactly what to do to lure
11

their customers through visual advertisements to make their food seem

presentable.

However the actual food presentation of the food served is the contrary.

They like to raise awareness about the deception of the fast food advertisements

in the Philippines. This marketing strategy has been done for a very long time and

this also have been greatly affecting them. The food served should be as

presentable as the sample on their advertisements to avoid trickery. The customers

will obviously expect the exact same service, but they wouldn’t know that they

would get something different in return.

We have been bombarded with false or deceptive sales, advertising, and

marketing promotional strategies, and no one seems to be checking on these. One

of the primary objectives of the Consumer Act is to protect consumers against

deceptive, unfair and unconscionable sales acts and practices. Have consumers

become so indifferent that they would just not complain because of the tedious

process, not to mention the cost it may entail.

Has government, particularly the Department of Trade and Industry (DTI),

abandoned its mandate to protect the interest of the consumers, to promote his

general welfare, and to establish standards of conduct for business and industry.

Have advertisers forgotten about their commitment to “truth in advertising”.

Every day, we see price manipulation, incomplete or inconsistent comparison,

misleading illustration, false coloring, angel dusting, bait-and-witch, false

guarantee, “No risk” trial, acceptance gimmicks to boost products sales.

12

Foreign Studies

E-commerce has made life simple and innovative of individuals and groups;

customers expectation in fast food chains advertisements are different from the

physical market where they see the product. The primary goal is to analyze the

customer expectation. Marketing has evolved significantly over the years and so

have clients expectations of marketing agencies. The effects of unethical

advertising, misleading information or deception and stereotyping advertising

impact on Costumer purchase intention with mediating effect of word-of-word

(WOM) in Pakisrtan. Based on variables, the authors tried to identify the effects

of each variable to customer satisfaction.

Data were collected through field of research (questionnaire) among 600

respondents who have their own different levels and fields like, students,

employee, and common people. The results shows that unethical advertising or

misleading information and stereotyping advertising are negatively linked with

customer buying behavior or purchase intention, while word of mouth is also

negatively associated with customer satisfaction.

Limitations relate to the use of a non-profitability sample and the restricted

geographical area of the field research. There has a time constraint which could

restrict many aspects of research. Consumers are faced with a very large numbers

of advertisements every day in different media. This makes the job of the policy

makers very difficult to judge the misleading nature of all such messages. When

consumers believe and advertisements to be true when is actually false,

13

consumers may be “harmed” (Atlas, 1999). Individuals prefer their beliefs to be

true, and is consumer is misled by advertisement, then the consumer may be

claims and inconspicuous claims lead to a significantly higher levels of false

beliefs than did the true or no information claims. The findings are consistent with

a body research, showing that consumers constantly misconstrue some types of

advertisements (Preston, 1967).

Foreign Studies

Academic literature primarily looks at deception from two sides: a marketer-

oriented side and a consumer-oriented one. Previous research on deception has

mainly focused on the marketer-related side and thus an objective deception. It

concentrated particularly on comparisons between the regulatory and behavioral

perspective objective deception (Aditya, 2001; Xie and Boush, 2011) and the

determination of deception. Less research has been dedicated to the consumer-

oriented side of perceived deception.

Little is known about the consequences of perceived deception. Studies on

both types of deception use various theoretical frameworks, which complicates

comparisons between studies. Additionally, limited research has been done on the

integration of perceived and objective deception into existing theories and

consumer behavior. The paper by Drake and Ritchie (2007) presents an

outstanding exception to this lack of theory in perceived deception research.

14

The authors integrate distrust as a deception and analyze carryover effects of

deceptive experiences to the same firm and same product as well as to unrelated

products and companies (Darke and Ritche, 2007). They find that the use of

deceptive advertising tactics and particularly their perceptions activates negative

stereotyping, reduces the persuasive impact of advertising and thus might lead to

inefficient marketing communication (Darke and Ritchie 2007, 125; Riquelme

and Roman 2014). The negative effects of deception is shown above can result

either from personal experiences and diminish repurchase intention (Newell and

Goldsmith, 1988) or from negative second-hand experiences obtained by reading

an online consumer complaint or a news article about deceptive marketing

techniques (Darke et al. 2008, 82).

Local Studies

Most companies in the Philippines digitally manipulate their products

through the use of photo-editing software but others have certain techniques as

well. Food stylist and photography use different instruments and employ good

lighting, fresh ingredients and hold meticulous attention detail to achieve

delicious-looking products. Jean Ann Baybee, a co-author of two books about

food styling, revealed, “Nothing is just plopped down and put in the center like it

is when you order at a restaurant.”

Stylist use tweezers, toothpicks, scissors, small blowtorches, paper, tape,

glue, pins, paint, oil and glycerin to enhance the product’s appearance, she noted.

Companies also do these techniques since “product photography is as crucial as

15

any other factor in increasing sales,” according to Digital Synopsis. This goes to

other industries as well- be it clothing, food, automotive, publishing, banking and

technology, for example. Peope are generally attracted to visually appealing

posters, photographs and graphics, making them want to but the promoted

product.

The fast food advertising industry is dedicated to making items appear

bigger and better. The blogger Dario D decided to compare major fast food

product advertisements to reality. He posted the results on his blog at Alphaila,

along with his methodology. “After a lifetime of disappointment battlement, and

frustration with the food, I decided it was time to do a little test, and compare the

food you get with the ads,” the blogger writes. The actual product’s from

advertisements are unrecognizable.

Conceptual Framework

This study has been set to explore the effects of marketing deception

among the grade 12 students of Central Institute of Technology of Colleges.

Results of the study proposed plan of actions for the Deceptive Advertisements.

Results of the study proposed plan of actions of Deceptive Advertisements.

Input

 Consumer
Behavior Deceptive
 Financial Loss Advertisements
 Incorrect
Interpretation
16

Figure 1. Paradigm of the Study

This study described the effects of deceptive advertisements among grade

12 students of CIT Colleges of Paniqui Foundation Inc. The technique is designed

to systematically explore, classify and analyze a body of work in order to gain

insight.

This study further described the effects of deceptive advertisements. The

relationship between students and customer’s loyalty were established.

The findings of the study proposed plan of action in the Deceptive

Advertisements.

Chapter 3

METHODS OF RESEARCH AND SOURCE OF DATA

17

Information on deceptive advertisements is extremely helpful as it will help

the students to become more aware. Thus, this study addressed the research

design, locale of the study, respondents of the study, instruments used in

gathering data, administration of the questionnaire and statistical treatment.

Research Design

The study used descriptive research design (Descriptive research is defined as

a research method that describes the characteristics of the population of

phenomenon that is being studied) that will help them know the effects of

deceptive advertisements.

The purpose of this study is to observe, describe and document aspects of a

situation. Since the researchers aims to know the effects of deceptive

advertisements among selected Grade 12 students of CIT Colleges of Paniqui

Foundation Inc., the descriptive research design is the method type of research

was the most appropriate.

Research Instrument

The research Instrument were divided into two parts. The first section

constituted of items adapted from different studies. The items for perceived

commitments due to advertising has been adopted by a study conducted by Brady,

M. K., Knight, G. A., Cronin, J. J., Tomas, G., Hult, M., & Keillor, B. D. (2005).

The part dealt with demographics of the internet users responses that included

their gender, age, their marital status. Furthermore more items adopted to measure
18

the perceived service commitment, turnaround time or response time, word of

mouth and its impact on customer satisfaction.

The researcher also gathered data of respondents by gathering their gender,

age, their marital status.

Respondents of the Study

The respondents of the study were the fifty (50) senior high school students

from CIT Colleges of Paniqui Foundation Incorporated, during the S.Y 2020-

2021.

The researcher used Slovin’s formula in selecting the respondents of the

study Slovin’s formula coined by Rumus Slovin, is a sampling method used when

it is most possible to study the entire population.

n = N/ (1+NE²)

n= number of sample size

N= total population

e= confidence level/margin of error

Table 1
19

Distribution of the Respondents of the Study

Grade 12 Sections Number of Students

Male Female
HUMSS 9 10
ABM 8 7
ICT 5 5
GAS 3 3
Total 25 25

Methods of Gathering Data

The collection of data was done through the distribution of survey to the

Respondents of this study. The researcher first acquired permission to conduct her

study and addressed the letter to Eros B. Estrada, the current senior high school

principal of CIT Colleges of Paniqui Foundation Inc. The students were also

asked by the researchers for permission to answer the questionnaire.

In administering the survey, the researcher used the students free time to

avoid destructios of online class discussion. This students’ responses were given

enough time to answer the questions. After data gathering, the researcher

collected it for tallying the scores and to apply the statistical treatment to be used

with the study.

Random interviews were carried out purposively to verify respondents’

answer and to check corrections of all entries supplied in the questionnaires.

Responses were checked and made clear through answering questions.

20

Data were collected from survey administered to the Respondents.

Questionnaires were constructed to be reliable instruments in the research data

gathering particularly in assessing. The descriptive survey involved the gathering

through a questionnaire.

Statistical Treatment

This section discusses the statistical treatment and formula necessary to

evaluate the data gathered.

To know the effects of deceptive advertisements among the grade 12

students, through age, gender and marital status.

(£ w ) (×)

×= _________

£w

where:

× = weighted arithmetic mean

£ = total summation

w = weights

x = value

Table 2

Learning Styles
21

Limits Verbal Interpretation

4.20-5.00 Always

3.40-4.19 Often

2.60-3.39 Sometimes

1.80-2.59 Rarely

1.00-1.79 Never

To process the data of the academic performance of the respondents,

frequency-percentage formula was used.

The following formula was used in percentage :

P = ( f / n ) ( 100 )

where:

P = percentage

f = total frequency of responses

n = total number of cases

Chapter 4

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

22

This chapter presents the data gathered the results of the statistical analysis

done and interpretation of findings. These are presented in tables following the

sequence of the specific research problem regarding the Effects of Deceptive

Advertisements to the Grade 12 Students in CIT Colleges of Paniqui Foundation,

Inc.

PROFILE OF THE RESPONDENTS

The first problem of this study focused on the profile of the grade 12

students that experienced the misleading advertisements in Selected Fast Chains.

1. Misleading Advertisements

Publicizing has constantly raised a considerable measure of feedback from

people in general and various studies have been done for the most part on the

ranges of effect of deceptive promoting towards buyers.

1.1 Belief of a False Claim

Is it adequate to exhibit that a case is false and that individuals accept the

case? This is a case actuality error combined with direct proof that individuals

accept the case.

Table 3

Misleading Advertisements
23

INDICATORS W Interpretation

M
The advertisement is believable. 2.38 Agree
After viewing the ad, I would consider purchasing the 2.84 Neutral

product.
Friends or family tell me it is a good product. 2.06 Agree
I felt convinced I should buy the product. 2.4 Agree
I often buy things on impulsive. 2.5 Agree
The ad was visually appealing and engaging. 2.34 Agree
I’m satisfied regarding the purchase of the product. 2.4 Agree
Curious about the product. 2.8 Agree
It was a familiar product or brand. 2.2 Agree
It affects the consumers buying behaviour. 2.2 Agree
Serious problem of misleading advertisements in our 2.26 Agree

country.
To sell more of their product. 2.42 Agree
Description of food was misleading 2.5 Agree
The benefits described in the ad are believable. 2.22 Agree
The advertisement influences you. 2.34 Agree

Chapter IV

Presentation, Analysis, and Interpretation of Data

This chapter presents the findings of the study in illustrative tables and

analysis as well as the interpretation based from the treatment of the data.

Table 1

Distribution of Respondents According to Age

24

Age Frequency Percent

16 2 4
17 7 14
18 25 50
19 and above 16 32
TOTAL 50 100

As shown in Table 1 it is clearly that age from 18 got the highest frequency

with 25 and 50% followed by 19 and above with 16 and 32%; third is 17 with 7

and 14% and the least is 16 which has 2 and 4% with a total of 50 respondents.

This tells us that most grade 12 students in CIT Colleges of Paniqui Foundation,

Inc. has an age ranges from 18 – 19.

Table 2

Distribution of Respondents According to Gender

Gender Frequency Percent

Male 20 40
Female 30 60
TOTAL 50 100

Proposed Plan of Action

25

Deceptive Advertisements could be avoided in many ways as in

proposing innovative strategies and implementation in the concern of the

Students. The table shows the proposed plan to avoid deceptive advertisements.

Table 4

Plan of Actions

Area of Activities Strategies Persons Means of

Concern Involved Verification

Deceptive Distract Don’t omit Students Don’t take

Advertisement yourself key ads for

s informations granted
Misleading Don’t let Evidence to Students Do thorough

Advertisement advertisement back up your decision

s influence you claim before

purchasing
Chapter 5

SUMMARY OF FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS

This chapter represents the summary of findings, conclusion and

recommendations of the data gathered from grade 12 students in CIT Colleges of

Paniqui Foundation, Inc. to avoid misleading advertisements.

Summary of Findings
26

The summary of findings of the study is presented in accordance to the

problem raised in Chapter 1.

1. On the demographic profile of the students

1.1 Majority of the respondents were age 18.

1.2 Respondents were female, male and gay having number of percentage

which is 50%

Conclusions

The following conclusions were drawn based on the findings.

1. The data gathered are valid and reliable.

2. There are valued descriptions of the respondents and these are essential in

interpreting the data.

3. Concerning the main purpose of our research, most of the people do not

find easy to identify whether an advertisement is deceptive.

4. Plan of actions were proposed for the Effects of Deceptive

Advertisements.

Recommendations

The following recommendation were suggested based on the

conclusions and finding of this study.

1. Advertising is all about presenting a product in the best possible light, but

don’t over-claim in a way that’s likely to mislead. Obvious exaggerations

27

that the average consumer is unlikely to take literally (and that are unlikely

to mislead) are allowed though.

2. Injuctions ordering the businesses to include disclosure statements in their

advertising.

3. The FTC can bring a criminal suit against a company for false advertising.

4. This study suggests that advertising companies should not focus on

misleading claims with incorrect interpretations.

5. Have the evidence to back up your claims.

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