Business Flash Cards - Environments
Define, using two suitable examples, the meaning of social norms.
- Norms determine what behaviors are interpreted as right or wrong, good or bad.
- Norms are the rules of a society for behaviors that are considered acceptable and expected in the standards of a culture.
- Norms also describe the lifestyle choices of people in a community, how they interact and their habits. For a person to be identified as being in a group or a target market, they will conform to certain norms.
• Examples of social norms that have an impact on spending are;
o Easter – chocolate gifts, travel and family meals.
o Australia Day – parties, merchandise
o Change to an anti-smoking attitude in the community
o An aging population spending on retirement and health needs.
Explain how social norms can influence consumer spending patterns.
- In modern times, consumers spend their money based on decisions about such things as the ethics of the business, its environmental strategies and its involvement with the community.
- In the market today, products are similar/homogeneous, prices are similar and spending decision are difficult because of the huge amount of choice.
- Consumers will buy from businesses that share their values and have a good public image.
- Peer pressure comes from people wanting to live up to social norms. (if a person’s friend wears certain brands, they will want to buy those products)
- People get caught in competition, comparing cars, clothes, gadgets, holidays etc. This strongly influences spending patterns.
- It is said that it makes people buy things they don’t need, with money they don’t have.
- Spending more on expensive brands and luxury items may lead to cut backs in essentials and substituting cheaper alternatives and increased debt on loans and credit cards.
- Another example of a norm is the celebration of the 21st birthday party. Businesses will promote their services such as limousines, decorations and entertainment to this audience
List the restrictions on the marketing and selling of tobacco and tobacco based products imposed by governments.
- Tobacco is also a legal product with devastating health consequences. Governments have strict laws about marketing and promotion to protect children from being encouraged to smoke.
- Since 1992, it has been illegal to publish or broadcast tobacco advertising.
- Online advertising has been illegal since 2012.
- ECU’s studies found a 30% drop in impulse tobacco purchases since WA banned the display of cigarette packets in shops in 2010.
- Since 2012, cigarettes packets have been required to be plain packaging. Research shows that plain packaging will: emphasise the health warning messages, limit the use of packaging to persuade people that smoking isn’t harmful, reduce the attractiveness of the packaging to children.
- In 2006, all tobacco sponsorship of sport was banned in Australia.
Why is marketing and selling tobacco and tobacco based products necessary?
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List the restrictions on the marketing and selling of alcohol imposed by governments.
• The Alcohol Beverages Advertising Code (ABAC), is a code of practice developed by the alcohol industry. Children’s Television Standards and the Commercial Television Industry Code of Practice restricts alcohol advertising to children from 8:30 pm to 5:00 am and from 12:00 pm to 3:00 pm on school days.
• The aims of ABAC are to:
o Stop all advertising that will encourage children to drink.
o Stop the promotion of irresponsible and excessive drinking.
• Under the Food Standards Australia New Zealand Act (1991), it is compulsory for labels on alcohol drinks to indicate the alcoholic strength and the number of standard drinks contained in it.
• Businesses that want to sell alcohol online, by mail and through a shop must be licenses.
• It is illegal is sell alcohol to someone under the age of 18.
Outline why restrictions are placed on marketing and selling alcohol.
- Alcohol is a product associated with many negative externalities, such as the cost of people injured from being intoxicated, car crashes, etc. Therefore, to ensure that these externalities are reduced, government restrictions (tax), are implemented to ensure decreased production.
- However, due to inelastic demand (non-responsive demand) as the product is considered a necessity and addictive to its consumers, an increase in price will have only a small effect on the demand of alcohol.
- By implementing a tax, government revenue will increase.
- To influence and protect children’s thoughts and ideas about alcohol.
Define fast food.
Fast food is very affordable and is promoted to families as an easy, cheap and fun way to eat. Easily prepared processed food served in snack bars and restaurants as a quick meal or to be taken away.
Discuss the advantages and disadvantages of not placing restrictions of the marketing and selling of fast food.
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State the Act of Parliament that covers product labeling.
The Competition and Consumer Act (2010) – sets rules for product labeling and prohibits businesses from making false or misleading claims about the place of origin of products.
Labels provide the following information to consumers;
• Ingredients and nutritional profile • Use by date • Manufacturer details • Instructions for use • Country of origin It is of absolute importance that these specifications are accurate, as the consumer may be allergic to an ingredient not listed. Thus, consumers are exposed to health risks.
Competition and Consumer Act – mandatory labeling requires for cosmetics include:
- Ingredient information should be available to consumers at the point of sale.
- Listing of product ingredients must be on the container or packed with the container.
- Ingredients need to appear in descending order calculated by either mass or volume.
- If a product is imported it still must meet Australia’s labeling requirements. This may mean a business will need to print its own labels to comply with the Australian law.
State which agency administers and enforces the Act covering food labeling.
Food Standards Australia New Zealand Act (1991)
State three requirements of product labeling.
- Ingredient information should be available to consumers at the point of sale.
- Listing of product ingredients must be on the container or packed with the container.
- Ingredients need to appear in descending order calculated by either mass or volume.
- If a product is imported it still must meet Australia’s labeling requirements. This may mean a business will need to print its own labels to comply with the Australian law.
State the Act of Parliament that covers shop trading hours in WA.
In WA, the Retail Trading Hours Act (1987) – regulates when retail businesses can trade in the metropolitan area. Trading hours for restaurants, cafes and takeaway food shops are not covered by the Act.
Outline why governments regulate retail trading hours.
Governments consider the need for business to operate longer to increase sales. They also consider the impact that trading hours have on employees and their families. An important role of governments is to build a fair and safe community for all people. One way to do this is to set laws and regulations about how businesses interact with customers, employees and the community.
