Influences (marketing) Flashcards
Factors influencing customer choice (Psych)
WHAT: Influences on an individual that affects his or her buying behaviour
→ The way that people think and develop attitudes to certain products
ELEMENTS:
→ Motivational (internal drive), attitudes and beliefs, perception, learning, lifestyle (how people and their time and how they interact with others) personality and self image
WOM, branding, opinion leaders, perception, motivations, attitudes and beliefs, experiences and learning
Factors influencing customer choice (Socio cultural)
WHAT: Are forces exerted by other people and or groups that affect an individuals buying behaviour
ELEMENTS: Social class → Socioeconomic status (low, medium, high)
→ Education, occupation, income
→ Culture and subculture
→ Family and roles - Females, males, parents, teens, youth, adult
→ Reference - peer groups (Changing buying behaviour to match a group’s belief and attitude)
RESPONSE:
Price strategy, promotions, advertising, social media, WOM, product and place strats
Factors influencing customer choice (ECO)
The level of economic activity can impact business sales due to consumer confidence (employment?? Boom or bust???)
CONTRACTION → High UE, low consumer confidence, high household savings, limited consumption
EXPANSION→ Higher incomes, low UE, Consumer confidence/spending is up, MPC higher
RESPONSE: Price, product and promo strat
Factors influencing customer choice (GOV)
WHAT: Policies that affect the economy and consumer consumption
HOW: → Fiscal policy: Through the budget influences eco activity
MP: Through the cash rate they affect IR and hence consumption in the economy
Laws: COMP and CONSUMER act 2010
Regulations: Such as age restrictions of cigarettes, alcohol and the packaging and advertising of it
IMPACTS: → Price → Advertising of good → Packaging and labelling
Consumer laws WHAT
WHAT: Fundamentally protects consumers from illegal and unethical business practices
How: Consumer and Competition Act (role of the legislation is to ensure the protection of consumers and to regulate certain trade practices)
The CCA is administered by the ACCC (Australian Competition and Consumer Commission) and the ASIC (Australian Securities and Investment Commission) in respect of financial services.
Areas of consideration:
Restricts the use of unfair business practices, including:
misleading and deceptive conduct
false or misleading statements about price, quality, benefits, warranties or other characteristics of a product
CONSUMER LAWS IMPLICATIONS
When designing marketing campaigns they must abide by legislation/regulation e.g. create ads that are not considered as deceptive
Positive : 1. Brand image enhanced 2.Level playing field for all
Negative :1. Compliance costs associated with adhering to standards 2. Fines for non compliance 3. An individual can face having a criminal conviction recorded and paying a fine of up to $220,000
DECEPTIVE AND MISLEADING ADS
It is illegal to describe a product as better than it really is
Governments around Australia all have consumer affairs departments to monitor the ethics of advertising
In addition to the CCA, which covers ethical behaviour in businesses, there is a variety of federal, state and local regulation of advertising
There is also non-government regulation of the advertising industry such as the code of practice for self-regulation prepared by the Australian Association of National Advertisers (AANA)
IMPLIED CONDTIONS
WHAT: Conditions of a product that are implied however not stated (implied and conveyed at the point of sale of the product
→ CC act states that specific conditions are implied is all consumer contracts
→ Under the AUS consumer law, when you buy products they come with automatic guarantees that the good will work and do what is expected to a certain extent
→ Basic rights (quality of reasonable standard, fit for purpose, must be as described eg Leather has to be real leather)
CONSUMER GUARANTEES = Comprehensive set of rights and remedies for defective G’s and S’
ACCEPTABLE QUALITY = Product is fit for purpose when it is sold
ACCEPTABLE = In appearance and finish, free from defects and safe to use
PRICE DISCRIMINATION
WHAT: Refers to the changing different prices for the same product in different markets * LEGISLATION = CCA legislates against it (market abuse and misuse of power)
WHEN/HOW: price discrimination is allowed if there are some valid reasonslike supply and handling, wages, tariffs which add to input costs
→ Can occur between the supplier and the consumer as well as the supplier and the retailer (larger retailers may demand lower costs for the same good)
ETHICAL INFLUENCES
TAPES
WHAT: “Relates to the moral principles which a business applies to marketing
→ Philosophy that informs all marketing efforts
→ Subjective
→ Exceeding of legal requirements
TRUTH
WHAT: It is illegal to mislead or deceive customers, however, markets at times cross the line with words they describe products “special”
→ Words that are open to interpretation
→ Untruths due to concealed facts (can be bits of info omitted on purpose)
→ Exaggerated claims ie products are superior
→ Vague statements
GOOD/BAD TASTE IN ADS
→ Subjective to the consumer (varies) however BUS must consider what society expects and should meet the standards
→ Often used to attract attention through controversial ads
PRODUCTS THAT DAMAGE HEALTH
WHAT: Goods which may impede the health status of the consumer
- The state and federal GOV have sought to restrict the
provision of various goods and services that may act
as health detriment to the consumer, without applying
a ban on their sale (Cigarettes and Alcohol)
ENGAGING IN FAIR COMP
WHAT: Assuring that there are ethical BUS practices
→ Not using the market power to diminish comp
→ E.G Price fixing which is illegal
→ From a legal perspective, the role of the AUS comp and consumer commission is to regulate BUS behaviour
Common practices of unfair comp:
→ Price fixing between 2 or more major competitors in the market with the aim of reducing comp
→ Price undercutting strat to force the smaller BUS to engage in a price war
→ Cartel Conduct - wherever a BUS agrees to act together mergers that may lessen competition
SUGGING
WHAT: refers to selling under the guise of research
→ Involves using fake surveys and questionnaires to sell products
→ Some consumers who are ethical will do research and may find the unethical practices have large negative implications for the BUS