Marketing Influences Flashcards
What are the four factors influencing consumer choice?
- Psychological- influences within the individual that affect their buying behaviour
- Social- influences exerted by other affecting choice
- Economic- influence a business’s capacity to compete and a customers willingness and ability to spend
- Government- influence the level of economic activity
What are the five factors under ‘psychological influences’?
- Perception- how a customer sees the product
- Motives- the reason why an individual does something
- Attitudes- a persons overall feeling about an object or activity
- Personality and self-image- personality is a collection of features and characteristics that make up a person.
- Learning- direct experience with products allows a customer to learn
What are the four factors under ‘sociocultural influences’?
- Social class- factors that determine social class include education, income and occupation.
- Culture and sub-culture- culture is all the learned beliefs, behaviours, values and traditions shared by a society
- Family and roles- roles within family and the wider community influence buying behaviour
- Reference (peer) groups- a group of people that one associates with, adopting their values, beliefs and attitudes.
What are the two economic influences?
- Boom
2. Recession
What is ‘boom’ and ‘recession’?
Boom- an economic period where employment is high and there are rising incomes. During this time, people are inclined to spend more as they feel comfortable within their financial position. Businesses increase their production and intensely attempt to promote products to increase their market share
Recession- is a period of high unemployment and falling incomes. Customers and businesses have a lack of confidence in the economy, which means customers spend less and tend to search for long lasting and functional products. The marketing plan must be focused on showing the usefulness of value of a product.
*in a recession, the main business goal becomes survival
What are two government influences?
- Economic policies- these are put in place to expand or contact the level of economic activity.
* policies can be direct or indirect - Regulations- can have direct and immediate impact on marketing plans.* Laws can influence business and marketing plans as breaking the law can result in financial consequences
What is the Australian Consumer Law (ACL)?
The ACL was introduced to replace 17 existing national, state and territory laws.
The ACL applies in the same way to all consumers and businesses in Australia.
* Marketers should be aware of changes in law that apply to their business. They have a responsibility to understand and apply laws in their business where needed. changes may need to be introduced such as repackaging a product
What is the Competition and Consumer Act 2010?
This act has two major purposes:
- to protect consumers against undesired practices, such as deceptive and misleading advertising
- to regulate certain trade practices that restrict competition.
Under this law, the government tries to ensure some businesses operate in the same market to encourage competition.
This act is applied by the ACCC, ASIC and each state and territory consumer agency.
breaches of this act can result in criminal or civil proceedings. The CCA allows the court to impose fines of up to $1.1 million for companies and $220,000 for individuals.
What are the two common ‘deceptive and misleading practices’ used by businesses?
- ‘Bait and switch’- involves advertising a few products at an enticing price and then when the advertised product runs out, the customers are directed to higher priced items
- ‘Dishonest advertising’- this involves claiming a product has a specific quality when it does not, or using deceptive words in an advertisement
How do some businesses use deceptive and misleading advertising?
- Surveys
- Fine print
- Presenting misleading countries of origin
- Misleading packaging
- Implying a product is limited when it is actually continuous
What is price discrimination?
It is the setting of different prices for a product in separate markets. Difference in price is possible due to markets being in geographically different locations and/or the product differentiation is within one market
* the CCA prohibits price discrimination if it substantially reduces competition.
What are implied conditions?
These are the unspoken and unwritten terms of a contract.
These conditions are assumed to exist even if they were not specifically mentioned or written in a contract.
* the most important implied condition is that goods and services must be of acceptable quality- fit for purpose, of acceptable appearance and finish, free from defects, safe and durable.
What is a warranty?
A warranty is a promise made by a business that they will correct any defects in the goods that they produce or the services they provide.
* warranties can be a good marketing tool
in recent years, it has become necessary to clearly and simply state the terms and conditions of the warranty.
warranties assure consumers that the business is confident in its product quality and will repair or replace faulty items.
When is a business required by law to provide a refund?
- if the products are faulty
- if the products do not match the description or sample
- if the products fail to do the job they were supposed to
- there is no obligation to offer a refund if a customer has changed their mind
- accurate signs regarding refunds and exchanges must be displayed
What are three ethical criticisms of marketing?
- creation of needs- materialism
* this is the individual desire to constantly require possessions. It is unethical for a business to use powerful promotional strategies to persuade and manipulate customers by convincing people that they need their products. - Stereotypes
* such as the women cleaning and the male using tools - Invasion of privacy
* tracking web users and using information to target them with advertising is seen as unethical as it invades customer privacy
