Influences Flashcards
1
Q
Factors influencing consumer choice - psychological
A
- within an indiv that affect their buying behaviour + attitudes to certain products
- Perception - person’s way of viewing something → trendy, classy, some perceive cheap as inferior = charging more - may result in more sales
- Motives - reason for doing something → e.g. comfort, health, safety
- Attitudes - person’s overall feeling about an object or activity e.g. period cup
- Personality + self-image - i.e. how they view self → affect purchasing e.g. self-view of elite = only buy/ wear certain products
- Learning - experiences/ info from products → learn + change an indivs behaviour
2
Q
Factors influencing consumer choice - sociocultural
A
- influences exerted by peers, family and the social class of the customer
- Social Class - people from high SES backgrounds = more likely to purchase expensive + prestigious products –> also can afford more for safety, perf etc
- Culture + Subculture - learned values, behaviours, beliefs + traditions shared by a society = determine what people wear, eat, live etc
- Family + Household Role - trad (although now changing) role of women in the home, influence of teens - e.g. most women still make buying decisions = need to market to mother
- Reference Groups - a group of people/peers –> whom a person closely identifies, adopting their attitudes, values + beliefs e.g. purchase to ‘fit in’ w/ expectations
- High-income earners = may be influenced by peers to purchase a high-end product = a status symbol
3
Q
Factors influencing consumer choice - economic influences
A
- where a customer’s financial position or level of eco activity impact on ability of a (b) to compete + affects customer’s ability or willingness to spend, e.g. interest rate level, amount of disposable income
- Boom: high employment, rising incomes, customers = optimistic, increased spending = good to market
- Bust: unemployment rises, incomes fall, customers = pessimistic, decreased spending = harder to market
4
Q
Factors influencing consumer choice - govt influences
A
- Laws + policies = may make a product illegal/ affect how customers can use it
- Affects marketing decisions e.g. product design, positioning, pricing, advertising
- Laws e.g. Competition + Consumer Act 2010 (Cwlth), Sale of Goods Act 1923 (NSW) + Fair Trading Act 1987 (NSW) influence marketing decisions
- COVID-19 → govt regulation influences (b) activities (cafe = take away)
- water restrictions e.g. consumer less likely to go to car wash = impact marketing
5
Q
Consumer Laws (general)
A
- purpose of consumer law = protect consumers from (b) exploitation
- Competition + Consumer Act 2010 (Cwlth) prohibits various trade practices:
- Deceptive + misleading advertising
- Price discrimination etc
- The CCA put in place Aus Consumer Law 2011 (ACL) → applies to whole country
- ACL = two main purposes:
- protect consumers against undesirable practices
- Regulate certain trade practices that restrict comp
- Consumer guarantees = a comprehensive set of rights + remedies for defective g/s → most important = products acceptable quality e.g. fit for purpose, free from defect etc
- Required to offer a refund: products faulty, do not match description, fail to do required job
- should comply w/ consumer laws or risk financial penalties e.g. fines or courts
6
Q
Consumer Laws - deceptive + misleading advertising
A
- Unfairly creates an inaccurate impression in the customer about some characteristic of the product → often deliberate to convince to purchase
- Advertising = one of most influential + effective methods of promotion
- CCA: deceptive + misleading advertising = illegal –> no. of methods still used
Illegal: (is more but main) - provide misleading info about features, content or place of manufacture
- Overstating its benefits e.g. before + after photos
- Offering ingenuine discounts + special offers
- Small fine print = deceptive
Two methods include: - Bait + Switch Advertising - advertising a few products at a reduced price to entice customers - then redirecting to a more profitable item
Dishonest Advertising - ad uses words = deceptive or claim product has specific quality when it does not
7
Q
Consumer Laws - Price Discrimination
A
- When same product = offered for sale to dif groups of customers at dif prices
- CCA prohibits price discrimination = substantially reduce comp
- Strategy which (b) might use to max revenue by charging customers more who can afford to pay more → illegal but can get around by having ‘budget’ and ‘premium’ or ‘men’ and ‘women’ versions of similar products
E.g. petrol pricing
8
Q
Consumer Laws - Implied Conditions
A
- Unwritten/ unspoken terms of a contract → means even if not stated when agreed = parties are bound by them
- Most important implied term relating to customer purchases (ACL outlines) is: goods must be acceptable quality / fit for purpose = last for a ‘reasonable time’
- Product should be free from defects, safe + durable → includes packaging, labelling + price
9
Q
Consumer Laws - Warranties
A
- A guarantee by a (b) to repair or replace a faulty or malfunction g/s = usually valid for limited time period
- Under ACL, warranties are standard on all products to a degree → (b) can choose to offer extended warranties → often sold to gain a comp adv
- Can impact marketing → could make product seem higher quality w/ a longer warranty
10
Q
Ethical influences - Truth, accuracy and good taste in advertising
A
- Relates to loopholes + grey areas that (b)’s could exploit
- Should ensure advertising is truthful as can be held morally responsible for misleading the public
- Unethical marketing practices relating to truth and accuracy include:
- Untruths due to concealed facts: e.g - not advertising health risks = omitting info
- Exaggerated claims (puffery) - cannot be proved (e.g - “it is superior” = not based on facts etc)
- Vague statements = ambiguous, open to interpretation e.g. ‘helps’, ‘special’, ‘Lite’, ‘natural’ aka weasel words
Good taste: - Highly subjective - varies b/w consumers
- Marketers consider what society agrees is acceptable + are aware of any community sensitivities
E.g. sexualisation of children in advertising = could increase risk of depression + self-esteem, gambling ads, alcohol ads - for children
11
Q
Ethical influences - products that may damage health
A
- Marketing campaigns related to promoting dangerous/unhealthy products
- Have been heavily criticised by consumers + health groups for promoting products that damage health e.g. junk food
- Health warnings must be displayed on cig packaging - cannot be advertised or displayed in stores
- Ads screened during child programs = covered by code of nutritional guidelines
12
Q
Ethical influences (general)
A
- Ethical behaviour exceeds legal requirements + improves (b)’s rep leading to improved sales, therefore increased profitability
- ‘moral’ factors that affect marketing decisions beyond legal requirements
13
Q
Ethical influences - Engaging in fair competition
A
- Refers to not exploiting grey areas + loopholes to gain an adv over comps
- CCA requires (b)’s to compete fairly + contains provisions relating to fair comp; deters any anti-comp behaviour that would limit comp
- Unfair competitive behaviours include:
- Price fixing b/w competitors - agreement to not sell below a price
- Long-term loss leader - undercutting smaller comps forcing them to engage in a price war
- Mergers - legal unless it will substantially lessen comp in a market
14
Q
Ethical influences - sugging
A
- (b) disguises attempts to sell a product as market research
- may contact a consumer pretending to conduct a survey = actually, try to sell something
SUG = Selling under the Guise of a Survey (or research) - sales technique disguised as market research - Not illegal but unethical as it aims to deceive/ pressures people into sales w/o realising
- exploits an extra level of trust, invasion of privacy
