Influences on Marketing Flashcards
What are the four factors which influence consumer choice?
Psychological
Sociocultural
Economic
Government
What are the influences on psychological factors?
The personal characteristics of an individual that influence their behaviour
Relates to the way people think and their attitudes towards certain products
Motivation
Consumers decide to buy a product because they believe that theory need it
The psychologist Maslow believe that there was a hierarchy of needs, the foundation of which are basic needs (food, water, shelter) which need to be met before further purchasing
Perception
The opinion that a consumer has of a particular product
Depends on the amount of information gathered, age, culture and price
Learning
The changes in an individual’s behaviour as a result of experience
This experience could be the consumer’s use of a product or increased awareness of it
Beliefs & Attitudes
Ethnic, religious and political beliefs shaped by a consumer’s environment & life experiences
Lifestyle
Shaped by leisure preferences, interests, attitudes and gender
In Australia there is a growing ‘foodie’ culture and a move towards healthier eating and diets, putting pressure on McDonald’s to use fresh ingredients and gourmet products
Personality and Self-Concept
Consumers buy products that reflect their personalities
What are sociocultural factors, and how does McDonald’s pander to them?
Those influences that come from the consumer’s society and culture
Relates to an individual’s beliefs, values and customs
Businesses attempt to cater to different community groups
McDonald’s offers Halal and Kosher locations to offer items to customers from different religious backgrounds
What are economic factors, and how do they impact McDonald’s?
Those consumer choices that are based income levels, occupation and level of education
The more income a person earns, the greater is the individual’s ability to purchase products from a higher price range
However, all individuals, regardless of income, will need to spend on essential items
On average, approximately 17% of Australian households weekly expenditure is on food and non-alcoholic beverages
However, patronage of McDonald’s is volatile during periods of low consumer confidence
What are governmental factors, and how do they impact businesses?
The federal government’s regulation of the economy influences the goods and services consumers produce
Fiscal policy impacts the level of taxation placed on consumers, affecting disposable income
Monetary policy uses interest rates to determine the level of credit consumers can access
The government can also place restrictions on who can access a product
What is the key document for consumer law in Australia?
Consumer protection in Australia is under the domain of the state governments
The Commonwealth government controls business behaviour through the Competition and Consumer Act 2010 (Cth), which promotes fair and competitive market behaviour
What are examples of deceptive and misleading advertising?
Examples of this under the Competition and Consumer Act include:
Giving misleading information about a product’s features or content
Overstating the benefits that a product will provide the consumer
Using bait and switch advertising (a product with very limited stock is highly discounted, in an attempt to draw customers in and switch their interest)
Consumers are responsible for reporting such cases
How has McDonald’s engaged in deceptive and misleading advertising?
In 2019 the Obesity Policy Council made a complaint against McDonald’s Australia’s Happy Studio app (which targeted 6-12 year olds) to the Advertising Standards Board
The Board found that McDonald’s had only presented the healthier meal options when the actual meals contain unhealthy options - in breach of the Quick Service Restaurant Initiative for Responsible Advertising and Marketing to Children
What is price discrimination, and why is it discouraged?
Refers to a business giving preference to some retailers by providing them with stock at lower prices than are offered to the retailer’s competitors
This is discouraged by the Competition & Consumer Act because it is uncompetitive and can disadvantage smaller businesses that have less influence in the marketplace
Businesses can legally engage in price discrimination by selling products in bulk
What are implied conditions and warranties?
When purchasing a product, consumers expect that the business will fulfil its legal obligation to provide a good/service consistent with the description and in full working order
A business must either refund a customer’s money or offer an exchange of the good should it be recognised to have been faulty at the time of leaving the store - implied warranty
A good way for a business to show faith in the products it sells is to offer warranty beyond that required by law - most business offer a warranty of 12 months for electrical products
What is spam, and how has McDonald’s used it?
The Spam Act 2003 (Cth) prohibits the unsolicited sending of electronic messages that advertise/promote a business and its goods
In December 2012, the Australian Communications and Media Authority (ACMA) found McDonald’s to be in breach of the Spam Act and issued the company a formal warning
McDonald’s Happy Meal website had a ‘send to friends’ feature which sent emails promoting games and activities without the consent of the recipient and did not have an ‘unsubscribe’ option as mandated by law
What is the importance of truth, accuracy and good taste in marketing?
Marketers are expected to engage in fair and honest behaviour when developing a campaign
Some businesses seek to implement strategies that create controversy, as the ensuing media debate generates publicity for the business that would usually cost thousands of dollars
The concept of taste in advertising is subject to debate, as individual reactions differ
In 2015, McDonald’s was accused of producing a television advertisement that focussed on the “premium” (the toy) rather than the product (the food)
The American Children’s Advertising Review Unit warned McDonald’s to “assure future advertising directed at children focus on the advertised food product - not on the premium”
How do governments restrict products that may damage health?
Federal & state governments have sought to restrict the provision of various goods and services that may act as a health detriment to the consumer, without banning them
They are known as ‘sin goods’ and face prohibitions on their sale & advertising
What are examples of unfair competitive behaviour prohibited by the Competition and Consumer Act?
Common practices of unfair competitive behaviour include:
price-fixing between two or more major competitors
long-term loss leader undercutting smaller competitors
misleading advertising regarding the products of a competitor
What is sugging, and why is it unethical?
A disguised marketing process which involves selling under the guise of research
It uses general questions to determine the interests and needs of the consumer, and then offers them a product that the business believes caters to their needs
It is regarded as unethical because the consumer is not aware they are being encouraged to buy the product from the outset of the interview
