MARKETING Influences

Question 1

What are the factors affecting customer choice?

Answer 1

• Psychological
• Sociocultural
• Economic
• Government

Question 2

What are psychological factors affecting customer choice?

Answer 2

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

Question 3

What are sociocultural factors affecting customer choice?

Answer 3

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

Question 4

What are economic factors affecting customer choice?

Answer 4

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

Question 5

What are government factors affecting customer choice?

Answer 5

• 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’)

Question 6

Which legislation sets out the Australian Consumer Laws?

Answer 6

Competition and Consumer Act (2010)

Question 7

Which body enforces the Australian Consumer Laws?

Answer 7

Australian Competition and Consumer Commission (ACCC)

Question 8

What are some examples of misleading and deceptive advertising?

Answer 8

• False statements
• Bait and switch
• Contradictory fine print

Question 9

What is price discrimination?

Answer 9

Charging different people different prices

Question 10

When is price discrimination illegal?

Answer 10

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)

Question 11

What is implied conditions?

Answer 11

Implied conditions refer to the terms and conditions that are not explicitly stated in a contract but are assumed to exist by law. These conditions ensure that the goods or services provided meet certain standards of quality and suitability for their intended purpose.

Question 12

What is a warranty?

Answer 12

A promise made to provide refunds or replacements if the product is faulty

Question 13

What are the ethical considerations in marketing?

Answer 13

• Good taste
• Truth and accuracy
• Products that damage health
• Sugging
• Fair competition

Question 14

What does good taste in marketing involve?

Answer 14

Avoiding offensive marketing, such as violence or sexual themes

Question 15

Why might a business choose to advertise in good taste?

Answer 15

To prevent criticism and a negative reputation from customers

Question 16

What is sugging?

Answer 16

Selling under the guise of a survey

(pretending that you’re doing market research, but then actually trying to sell something)

Question 17

Is sugging illegal?

Answer 17

No

Question 18

What does engaging in fair competition involve?

Answer 18

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)

Question 19

Why is ethical behaviour important in marketing?

Answer 19

• Maintain reputation and customer loyalty
• Avoid government introducing new regulations

Question 20

Why is government regulation important in marketing?

Answer 20

Need to comply with government regulations to:
- Avoid fines
- Maintain customer trust

Question 21

what does truth and accuracy refer to in ethical business and is it legal?

Answer 21

Truth and accuracy in advertising refer to situations where businesses deliberately make vague and misleading statements in their advertisements. This is considered an ethical issue because it involves untruths due to concealed facts, exaggerated claims (also known as ‘puffery’),** and vague statements that can mislead consumers. False and misleading advertising is not only unethical but also illegal.

Note* puffery is legal

Question 21

what are some products that may damage health and are they illegal

Answer 21

• Junk food
• Alchool

These practices are considered **unethical but not necessarily illegal **unless they breach specific regulations under the Competition and Consumer Act 2010 (Cth).
e.g
* Cigarettes -(The Tobacco Advertising Prohibition Act 1992 bans any advertising in Australia that may encourage or persuade people to smoke or use tobacco products.)

Note Remember this is about marketing these products