Major Buying Decisions 1.1/ 1.2 Outcomes of making a purchase

Question 1

What is difference with price inelastic and price elastic

Answer 1

Price elastic – when the demand for a product has a large drop-off because the price of the product increases​

 e.g. fresh fruit, vegetables​

Price inelastic – when an increase in price has little of no impact on the demand for the product​

 e.g milk, bread, petrol

Question 2

what is a marketing strategy factor

Answer 2

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​

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Question 3

what is finance avability and cost

Answer 3

3. FINANCE: AVAILABILITY AND COST​

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 4

what is a personal factor

Answer 4

1. PERSONAL​

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

Question 5

what is a social and cultural factor

Answer 5

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

Question 6

what is an ethical and environmental factor

Answer 6

3. ETHICAL AND ENVIRONMENTAL CONSIDERATIONS​
   • the manner in which a product was sourced and manufactured can influence consumers’ buying decisions​e.g. coffee, chocolate

Question 7

what is a psychological factor

Answer 7

4. PSYCHOLOGICAL​
   • level of motivation of the consumer​e.g. an urgent need or a social need

Question 8

what is opportunity cost

Answer 8

When consumers make any purchase, they incur an opportunity cost (the alternative you have to go without in a choice between two competing things or events).

Question 9

what is cost benefit analysis

Answer 9

• Another way of analysing and assessing purchasing decisions​
• Benefits gained by making the purchase are added up, and then the costs that will be incurred by making that purchase need to be subtracted

Question 10

what are types of insurance

Answer 10

Comprehensive insurance​
Covers loss or damage to your car as well as accidental damage to other people’s property.​

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Third party insurance ​Covers your legal liability for damage to other people’s property caused by a motor vehicle accident that is your fault.