1.1 Major buying decisions of consumers

Question 1

What are external factors?

Answer 1

1. Price
2. Marketing strategies
3. Finance: Availability and cost

Question 2

What is ‘price’?

Answer 2

the amount of money paid by customers
for a product or service.

Question 3

What are the ‘price’ external factors?

Answer 3

1. Price elastic
2. Price inelastic

Question 4

What is the definition of price elastic?

Answer 4

when the demand for a product has
a large drop-off because the price of the product
increases.
e.g. fresh fruit, vegetables

Question 5

What is the definition of price inelastic?

Answer 5

when an increase in price has little
of no impact on the demand for the product.
e.g. milk, bread, petrol

Question 6

What are the ‘Marketing strategies’ of external factors?

Answer 6

The purpose is to raise the consumer’s awareness of a product and to create a positive image about that
product or brand.

e.g. advertisements (TV,
newspapers, radio), sale
promotions and incentives
(‘specials’), personal selling, Internet
marketing, social media.

Question 7

What are the ‘Finance: Availability and cost’ of external factors?

Answer 7

▪ Mostly used when purchasing large ticket items
▪ Debt cycle – a result of not keeping on top of debt
payments and therefore accumulating more debt
through interest and extra borrowing

Question 8

what are the internal factors?

Answer 8

1. Personal
2. Social and cultural
3. Ethical and environmental
   Considerations
4. Psychological

Question 9

What are the ‘personal’ internal factors?

Answer 9

Consumers differ in age, gender, personality,
life-cycle stage and style, occupation and
economic circumstances.

Question 10

what are the ‘social and cultural’ internal factors?

Answer 10

Your purchases are influenced by
1. your ‘peer group’ through Internet reviews or conversations with family and friends.
2. by your values and beliefs (developed though our nationality, religion, racial background, social group etc.)

Question 11

What are the ‘ethical and environmental
considerations’ of internal factors?

Answer 11

the manner in which a product was sourced
and manufactured can influence consumers’
buying decisions
e.g. coffee, chocolate

Question 12

What are the ‘phycological’ internal factors

Answer 12

level of motivation of the consumer
e.g. an urgent need or a social need