Marketing Influences Flashcards
What are the factors affecting customer choice?
- Psychological
- Sociocultural
- Economic
- Government
What are psychological factors affecting customer choice?
The person’s preferences and opinions, such as:
- motive for buying the product
- self-image (the type of person they want to be)
- perception of the product
What are sociocultural factors affecting customer choice?
The influence of others, such as:
- Trying to fit in with their social class
- The influence of peers
- The influence of their culture
- Buying things on behalf of family members
What are economic factors affecting customer choice?
If the economy is in an upswing or boom, they will have high consumer confidence, so they will:
- buy more non-essential products
- be willing to pay more
What are government factors affecting customer choice?
- Regulations on packaging or advertising (e.g. cigarettes, gambling)
- Subsidies to make products cheaper and more appealing
- Advertisements to change behaviour (e.g. ‘Quit smoking’, ‘go on holiday to Tasmania’)
What is the case study for economic factors affecting customer choice?
Quest Apartments - promoting ‘staycations’ in the pandemic recession
What is the case study for government factors affecting customer choice?
Philip Morris - loss leader in response to new vaping regulations and advertising
What are the group of laws in marketing called?
The Australian Consumer Laws
Which legislation sets out the Australian Consumer Laws?
Competition and Consumer Act (2010)
Which body enforces the Australian Consumer Laws?
Australian Competition and Consumer Commission (ACCC)
What are the consequences of breaking the Australian Consumer Laws?
- Fines up to $50m for companies and $2.5m for individuals
- A public warning notice by the ACCC
- Potentially, could be sued by customers
What are the 4 consumer laws?
- Misleading and deceptive advertising
- Price discrimination
- Implied conditions
- Warranties
What are some examples of misleading and deceptive advertising?
- False statements
- Bait and switch
- Contradictory fine print
What is price discrimination?
Charging different people different prices
When is price discrimination illegal?
When it is ‘predatory pricing’ - charging very low prices in a particular location to cause rivals to exit the market (with the intention of then raising prices again)
What are implied conditions?
The unstated expectations about a product, including that it is:
- Fit for purpose
- Safe
- Free from defects
- Will be completed in reasonable time (for a service)
What happens if a product does not meet its implied conditions?
The business must give a refund, replacement or repair - regardless of their warranty policy
What is a warranty?
A promise made to provide refunds or replacements if the product is faulty
What are the legal requirements of warranties?
- The business must keep their promise
- Cannot make customers pay for the implied conditions
- Must be written in plain English
What is the case study for misleading and deceptive advertising?
Nurofen - ‘targeted painkillers’ that all had the same ingredients
What is the case study for price discrimination?
Uber - surge pricing and higher prices in wealthier suburbs
What is the case study for implied conditions?
Lululemon - claimed ‘no refunds on sale items’ even if defective
What is the case study for warranties?
Apple - denied warranty claims if phones had been repaired by a 3rd party
What are the ethical considerations in marketing?
- Good taste
- Truth and accuracy
- Products that damage health
- Sugging
- Fair competition
What does good taste in marketing involve?
Avoiding offensive marketing, such as violence or sexual themes
Why might a business choose to advertise in good taste?
To prevent criticism and a negative reputation from customers
Why might a business choose to advertise in bad taste?
To gain attention and publicity
What does truth and accuracy in marketing involve?
Avoiding ‘puffery’ and exaggerated or vague statements (e.g. ‘this moisturiser will give you younger, smoother skin’)
Why might a business choose to reduce its advertising of products that damage health?
- Avoid criticism and a bad reputation
- Avoid the government creating new regulations
What are some examples of products that damage health?
- Junk food
- Cigarettes and vapes
- Alcohol
What is sugging?
Selling under the guise of a survey
(pretending that you’re doing market research, but then actually trying to sell something)
Is sugging illegal?
No
What does engaging in fair competition involve?
Not abusing your market power (being bigger than your competitors). This means not doing:
- collusion (agreeing prices with competitors)
- exclusive dealing (only dealing with another business if they refuse to deal with your rivals)
What is the case study for good taste?
H&M - Coolest Monkey in the Jungle
What is the case study for truth and accuracy?
McDonalds - Heart Foundation Healthy Tick
What is the case study for products that damage health?
Philip Morris - tobacco and vapes
What is the case study for engaging in fair competition?
Amazon - using data from third party sellers on their website
Why is ethical behaviour important in marketing?
- Maintain reputation and customer loyalty
- Avoid government introducing new regulations
Why is government regulation important in marketing?
Need to comply with government regulations to:
- avoid fines
- maintain customer trust
