3. influences on marketing

Question 2

What is customer choice (buying behaviour)?

Answer 2

The decisions and actions of customers when they search for, evaluate, select and purchase goods and service.

Question 3

Why must marketers examine customer choice (buying behaviour)?

Answer 3

To understand what motivates an individual to purchase particular product Why customer selects one product and rejects another To influence customer choice to modify marketing strategies to appeal to customers motives.

Question 4

What are the four main factors influencing customer choice?

Answer 4

PEGS Psychological (internal) Perception Motives Attitudes Personality and self image Learning Economic General economic conditions Government Laws Regulations Sociocultural Family and roles Peer group Social class Culture and subculture PYSCHOLOGICAL INFLUENCES

Question 5

What are psychological influences?

Answer 5

Influences within an individual that affect his or her buying behaviour.

Question 6

What are the five psychological influences?

Answer 6

1. Perception
2. Motives
3. Attitudes
4. Personality
5. self image

Question 7

Case study for pyschological influence on customer choice?

Answer 7

McDonalds collaborated with Crocs in 2023. Run in mutliple markets Tapped into customers desire/motivation to belong to a fashion trend Evoke emotions of nostalgia through iconic McDonalds characters ECONOMIC INFLUENCES

Question 8

What are economic influences and what do they include?

Answer 8

influence a business’s capacity to compete and a customer’s willingness and ability to spend level of economic activity fluctuates from boom to recession - each phase influences marketing environment

Question 9

Case study for economic influence on customer choice?

Answer 9

McDonalds value menu popularity during COVID19 People faced reduced income or lost their jobs as a result of the pandemic More budget conciouis and seeking cheaper meal options Responded through promoting value menu Reduced menu size to focus on core products in high demand. GOVERNMENT INFLUENCES

Question 10

What are government influences on customer choice and marketing decisions?

Answer 10

Economic policies - influence level of activity, depend on conditions - influence business activity and consumer spending Regulations - impact marketing plans, laws influence correct behaviour from business (Competition and Consumer Act 2010)

Question 11

How has the government’s economic policies influenced marketing?

Answer 11

Job keeper - businesses can access subsidy to continue paying employees - employees have more money and business more stable Job seeker - social security payment, kept people employed to prevent spending dropping even more.

Question 12

Case study for government influence on customer choice?

Answer 12

Calorie Labelling Regulations in 2022 in UK Mandatory for McDonalds to provide calorie inforation at all customer touchpoints SOCIOCULTURAL INFLUENCES

Question 13

What are sociocultural influences and what do they include?

Answer 13

forces exerted by other people and groups that affect customer behaviour Social class Culture and subculture Family and roles Peer group

Question 14

Case study for sociocultural influence on customer choice?

Answer 14

McDonalds’ agressive expansion plans in China Driven by rapid expansion of China’s middle class, exploding from 80 million peoplel in 2002 to 500 million in 2024. Means more Chinese citizens have the disposable income to choose a meal at McDonalds.

Question 15

Broadly, how do consumer laws influence the strategic role of marketing?

Answer 15

Laws improve the protection and rights of consumers Clarify the rights and responsibilities of businesses Marketers must be familiar with laws that regulate their activities Ensure they are aware of any changes to laws Responsibility to understand and apply laws Introduce changes where required THE AUSTRALIAN CONSUMER LAW

Question 16

What is the Australian Consumer Law?

Answer 16

replaced different national, state and territory laws that set out consumer rights and business obligations with a single, national set of rules application law, which will be applied and enforced as a law of each jurisdiction in Australia. Applied by the Competition and Consumer Act 2010 as a law of the Commonwealth

Question 17

What is an example of a business breaching Australian Consumer Law?

Answer 17

The makers of Voltaren admitted they breached the Australian Consumer Law and were fined $4.5 million in 2020 for making false and misleading representations in their marketing. The company admitted they marketed Osteo Gel as being more effective than Emulgen (which is 33 per cent cheaper) in treating osteoarthritis despite the two products being essentially the same. COMPETITION AND CONSUMER ACT 2010

Question 18

What are the two major purposes of the Competition and Consumer Act 2010?

Answer 18

Protect consumers against undesirable practices including misrepresenting product or deceptive advertising. Regulate certain trade practices that restrict competition - to ensure many businesses are operating in same market to encourage competition. [PROTECTION AND REGULATION]

Question 19

Who is the Competition and Consumer Act 2010 applied to and who enforces it?

Answer 19

All businesses in Australia, including commercial activities of government Enforced and administered by Australian Competition and Consumer Commission each state an territory’s consumer agency, and the ASIC.

Question 20

What are consequences of breaching the provisions of the Competition and Consumer Act?

Answer 20

taking civil or criminal proceedings against the business or individual concerned Extremely high penalties in addition to consumer’s suing business for compensation issue an Infringement Notice (fine) issue ‘public warning notices’ to warn consumers of suspected illegal activity DECEPTIVE AND MISLEADING ADVERTISING

Question 21

What is the general rule regarding deceptive and misleading advertising?

Answer 21

when a business makes any representation (direct or implied), the business must ensure that the representation is not untrue or false and is not likely to mislead the type of consumers at which the advertisement is targeted.

Question 22

What are some examples of deceptive or misleading advertising techniques?

Answer 22

Bait advertising - cheap product available for limited time, then when it runs out customer directed to expensive product. Fine print and qualifications - important information written in fine print could contradict overall message of advertisement. Comparative advertising - comparing products to others on the market. Environmental claims - Country of origin - misleading country of origin of goods Premium claims - suggesting an added benefit to a product. Prize giveaways and competitions - must inform consumers about a catch in the game. Dishonest advertising - creating a false impression.

Question 23

What is a case study for deceptive and misleading advertising?

Answer 23

Lorna Jane Covid Pants fined $5m by Federal Court for false COVID-19 prevention claims about its clothing Sprayed with “LJ Shield”, which protected people against pathogens. False and misleading claims exploit the fear and concern” surrounding the deadly outbreak PRICE DISCRIMINATION

Question 24

What is price discrimination?

Answer 24

the setting of different prices for a product in separate markets Used based on the sellers belief that customers in certain groups can be asked to pay more or less based on demographics or how they value the product.

Question 25

What does the Competition and Consumer Act entail about price discrimination?

Answer 25

Prohibits price discrimination if the discrimination could substantially reduce competition. Means that a business cannot give favoured treatment to some customers while denying it to others.

Question 26

What is a case study for price discrimination?

Answer 26

McDonalds prices at McDonald’s do not remain consistent across stores in Sydney E,g Kings Cross Big Mac was $6.25 whereas the Sydney CBD was $6.70 Different prices for different areas IMPLIED CONDITIONS

Question 27

What are implied conditions?

Answer 27

Are the unspoken and unwritten terms of a contract Conditions assumed to exist regardless of whether they were mentions or written into contract.

Question 28

How does the Competition and Consumer Act 2010 and ACL respond to implied conditions?

Answer 28

Competition and Consumer Act 2010 Introduced consumer guarantees Provides consumers with rights to certain remedies from retailers and manufacturers where goods purchased fail to comply with consumer guarantee provisions in the ACL. ACL When you buy products and services they come with automatic guarantees that they will work and do what is expected.

Question 29

What consumer guarantees are applied to goods?

Answer 29

Must be of acceptable quality Safe, no faults, look acceptable, carry out function Match descriptions Match demonstrations Be fit for marketed purpose Not carry hidden debts

Question 30

What consumer guarantees are applied to services?

Answer 30

Provided with acceptable care, skill and knowledge Fit for the purpose and give agreed results Delivered within reasonable time

Question 31

What can consumers do on a good and service if it does not meet consumer guarantees?

Answer 31

Goods: retailer cannot refuse to help you by sending you to the manufacturer or importer. Services: Remedies include cancelling a service and in some cases compensation for damages and loss.

Question 32

What is a case study for implied conditions?

Answer 32

WARRANTIES

Question 33

What is a warranty?

Answer 33

A warranty is a promise made by a business that they will correct any defects in the goods that they produce or in the services that they deliver; that is, it is a promise to repair or replace faulty products. can be a good marketing tool assures the customer that the business has confidence in the quality of its product and will repair or replace any faulty items.

Question 34

What has the government done in response for offering warranties?

Answer 34

government legislation has made it necessary for businesses to state, clearly and simply, the terms and conditions of the warranty.

Question 35

On what conditions is a business required by law to offer a refund?

Answer 35

If products are: Faulty Do not match the description or a sample Fail to do the job they were supposed to do

Question 36

What are the main ethical criticisms of marketing?

Answer 36

Creation of needs Materialism - need to acquire possessions Use of stereotyping Associating products with certain gender, race etc. Use of sex to sell products Sex appeal to have persuasive impacts and increase attractiveness Product placements inclusion of advertising in entertainment is a promotion strategy Invasion of privacy Collecting data to target specific people with advertisements Breach consumer privacy behavioural data is collected and resold by data exchange companies and then used by businesses for target advertising purposes. TRUTH AND ACCURACY IN ADVERTISING

Question 37

What should businesses do to ensure truth and accuracy in their advertising, what could happen as a result of untrue advertising?

Answer 37

Ethical businesses should ensure their advertising is truthful as they can be held morally responsible for misleading the public by using an untruth in an advertisement. consumers discover that advertisements are untrue or inaccurate, they may feel cheated and stop buying the product - consumers can complain to government agencies generating bad publicity

Question 38

What are the main unethical marketing practices?

Answer 38

untruths due to concealed facts exaggerated claims vague statements invasion of privacy.

Question 39

Explain what untruths due to concealed facts is as an unethical marketing practice.

Answer 39

Purposely omitting information from an advertisement can severely harm the trust customers have in a product or a business.

Question 40

Explain what exaggerated claims is as an unethical marketing practice.

Answer 40

Puffery refers to exaggerated claims used for promotional purposes, that no reasonable person would take as factual. It is not misleading or deceptive to use exaggerated claims where the audience could not reasonably be misled. But misleading that product has something they don’t have

Question 41

Explain what vague statements is as an unethical marketing practice.

Answer 41

statements using words so ambiguous that the consumer will assume the advertiser’s intended message. deliberately misleading or ambiguous language — are by their nature vague and allow the marketer to deny any intention to mislead or deceive.

Question 42

What is a case study for truth and accuracy in advertising?

Answer 42

Coca Cola advertisement Ad suggested that Coke doesn't rot your teeth if you brush your teeth afterwards, it isnt highly caffeinated and doesn’t make you fat "myth busting" advertising ACCC said that is was misleading and inaccurate GOOD TASTE IN ADVERTISING Some consumers may regard an advertisement as offensive, while others might view it an inoffensive Usually a common agreement to what society considers acceptable and marketers must be aware of community sensitivities. Within society there is recognition of growing role of mass media in children's lives Marketers are now targeting children more than ever Recently increased sexualisation of children in advertising According to the Australia Institute, a leading progressive Australian think tank, sexualisation of children in the media ‘leads to a range of risks for children’. In their report Letting Children be Children, they highlight that premature sexualisation of children can result in increased risk of depression, self-esteem and identity disorders, and premature sexual activity. PRODUCTS THAT MAY DAMAGE HEALTH All consumer products supplied must be safe and meet consumer guarantees under the ACL. Businesses cannot sell banned products and must ensure that their products or product-related services comply with the relevant mandatory standards before they are offered for sale. Consumer guarantees give people the right to a refund if a product is unsafe. Can seek compensation for damages and loss caused by safety defect Usually manufacturer is liable

Question 43

What are the two mandatory notification requirements under the Australian Consumer Law?

Answer 43

a risk that a product will or may cause injury, it must be recalled. Awareness of a death, serious injury or illness associated with a product must be reported within two days.

Question 44

What is a case study for products that may damage health in advertising?

Answer 44

Targeting children through cartoon characters and happy meal toys to sell unhealthy meals. Rise of child obesity. ENGAGING IN FAIR COMPETITION

Question 45

How can competition in the marketplace contribute to unfair marketing strategies?

Answer 45

Intense competition can be temptation to engage in unfair marketing strategies Business should be fair when referring to competitors in marketing Should not insult or make false assertions

Question 46

What does the Competition and Consumer Act 2010 say about engaging in fair competition?

Answer 46

Requires businesses to compete fairly Contains provisions relating to fair competition aims to deter certain anti-competitive behaviour that limits or prevents competition.

Question 47

What are examples of anti-competitive conduct that is prohibited?

Answer 47

Cartel conduct Anti-competitive agreements Misuse of market power Exclusive dealing Resale price maintenance Mergers and acquisitions

Question 48

What is a case study for engaging in fair competition?

Answer 48

TELSTRA Fined $18.5 million Blocking competitors from installing broadband equipment at their telephone exchanges, which they are legally required to do Told their competitors there wasn’t any room at the exchanges and took unreasonable lengths of time to grant access, limiting their ability to compete in the broadband market. SUGGING

Question 49

What is sugging?

Answer 49

selling under the guise of research. Not illegal but raises ethical issues including invasion of privacy and deception.

Question 50

Why can sugging be negative?

Answer 50

Long term negative consequences for market research Cooperation of consumers is more difficult with response rates to surveys is declining 1/3 of individuals refuse to participate in surveys due to suspicion of sugging.

Question 51

What is a case study for sugging?

Answer 51

A MARKETING CODE OF ETHICS

Question 52

What is the Code of Ethics and what are is objectives?

Answer 52

Developed by Australian Association of National Advertisers (AANA) in 2012 Set standards Ensure that advertisements and other forms of marketing communications are legal, decent and truthful They have been prepared with a sense of obligations to the consumer and society Sense of fairness and responsibility to competitors.

Question 53

What is Ad Standards?

Answer 53

If consumers feel that an advertisement breached the code, they can make a complaint to Ad Standards. Role is to ensure the Code of Ethics is followed. manages the complaint resolution process of the advertising self-regulation system

Question 54

What does the Ad Standards Community Panel do?

Answer 54

Considers the complaints, make a decision Can make two determinations: Dismissed complaints - complain is dismissed if no breach of code. Upheld complaints - complaint is upheld if breach of code is determined, advertiser requested to remove or amend offending advertisement ASAP.