The Coca-Cola bottle is among the most famous product packaging in the world. Consumers everywhere instantly recognize the distinctive curvy bottle and understand what it represents. It has been celebrated as a design classic and featured prominently by artists ranging from Norman Rockwell to Andy Warhol. The bottle is not only a cultural icon but also a triumph of branding, its goodwill built up over time by the Coca-Cola Company’s heavy investments in advertising and other forms of marketing.

The traditional legal framework for assessing liability for false and misleading advertising is whether the advertising is likely to deceive consumers acting reasonably under the circumstances. Typically, the plaintiff also has to show materiality – that the allegedly deceptive advertising would be important in a consumer’s decision to purchase the product or service.1

A general premise of consumer protection is that greater consumer information and more competition in a market should increase the tendency of firms to behave fairly and honestly.1 In the case of deceptive promotional pricing, greater consumer information comes from having more consumers in the market being attentive to and knowledgeable of reference promotional pricing (i.e. showing a regular price along with the sales price).

This volume emerged from the notion that marketers and lawyers often talk about the same things. They may use different names, but essentially the things they talk about are the same. For example, while marketers talk about brands, lawyers talk about trademarks. However, relatively late in the process of editing this volume, we, as editors, had a somewhat unsettling realization. Throughout the planning and editing process for this book, we had been laboring under, not unrelated, but certainly not identical, views about the domain of marketing and the reach of law. We had no real common understanding of what marketing is, what marketing theory entails, and how the law shapes and governs marketing activities. Such a state of affairs is part of the inevitable risk of bringing together a group of scholars from two distinct disciplines. Fortunately, the realization helped us recognize that both marketing and law are sometimes vessels into which users can pour whatever content they wish. At the start, therefore, we thought it wise to dispense with some misconceptions and offer at least some working definitions of the terms and ideas we encounter in this volume.

When should government mandate labels? When would mandatory labels have desirable consequences for social welfare? How can those consequences be measured? When would labels do more good than harm?

When does the law persuade us about what is right or wrong – and when does it not? On topics ranging from racial equality to abortion to same-sex marriage, historians have debated and puzzled over the law’s persuasive force on our collective moral intuitions. Meanwhile, other scholars have sought out individual-level insights into the psychology of law’s persuasion, under the microscope of controlled experiments.

Class action damages used to be boring. Essentially an accounting exercise, they came at the end of the case, after resolution of the more interesting issues of what the defendant did and whether it was liable for doing it. And because trial rarely happens, especially in consumer class actions where jury awards can be untethered to damages estimates and potentially astronomical, the damages reports quietly served by the dueling expert witnesses near the close of discovery served mainly as a benchmark for pretrial settlement discussions.

A brand element establishes secondary meaning when it becomes synonymous with the brand and serves as a source identifier for consumers. In legal parlance, secondary meaning has been defined as occurring when “in the minds of the public, the primary significance of a product feature or term is to identify the source of the product rather than the product itself.”1

According to the American Marketing Association, a brand is defined as “a name, term, design, symbol, or any other feature that identifies one seller’s goods or service as distinct from those of other sellers.”1 But to the brand owners, customers, employees, and investors, a brand is much more than just a name. A strong brand is a prized asset for many corporations. It can energize and engage the employees, create alignment around common values, and promote emotional and intellectual engagement at work. Strong brands can create positive associations in the consumer’s mind and reduce purchasing risk and search costs in buying situations. Not surprisingly, strong brands often outsell the competition, realize higher repeat purchase rates, are able to charge premium prices, and can command customer loyalty over a long time.

This chapter explains why the purchase funnel – sometimes known as the “consumer decision journey” or the “consumer buying path” – is a valuable analytical framework for marketing experts engaged to provide an external expert opinion to inform the finder of fact in litigation matters. The value inherent in the purchase funnel framework is that, unlike most economic analyses or analyses grounded in the strategy literature, the purchase funnel does not treat consumers as making a single discrete decision. Instead, it recognizes that for each decision that any one consumer makes, the consumer must pass through a series of distinct hurdles progressing from awareness to consideration, conversion, and post-purchase. Laying out these steps can be helpful in a large variety of litigation contexts.

The problems referred to in the title of this chapter concern evaluating a given variable when it is one of several that have combined to bring about a result. In some cases, there is an easy market solution. Imagine that you contract to buy a house and then the beautiful kitchen stove, one of many things that attracted you to the property, is destroyed before you close the transaction or occupy the property. How much should the price now be reduced? Here there is an upper limit based on the cost of a comparable replacement appliance. A more precise valuation would also be easy if identical houses, lacking this one feature, had recently been sold. The stove is just a piece of the larger transaction and, with these convenient facts, there is not much of a “component valuation problem.” Additionally, the stove is unlikely to have been of greater value because of its interaction with other items in the house; colors and sizes are fairly standardized. “Conjoint analysis” – a term that usually refers to survey evidence that tries to elicit the value of a component – is therefore unnecessary, or at least uncomplicated, because value does not depend on an interaction among variables in a way that is not directly observed. It is also interesting because it does not present a difficult game theory problem, or result that might be described in common parlance as something that depends on the relative bargaining skill of the parties.

Online advertising has quickly become one of the most important avenues through which brands reach consumers. It is lauded as one of the most effective ways for a business to grow, acquire new customers, and spread information.1 By some estimates, Internet advertising is a nearly $300 billion business.2