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

What is the case study for economic factors affecting customer choice?

Answer 6

Quest Apartments - promoting ‘staycations’ in the pandemic recession

Question 7

What is the case study for government factors affecting customer choice?

Answer 7

Philip Morris - loss leader in response to new vaping regulations and advertising

Question 8

What are the group of laws in marketing called?

Answer 8

The Australian Consumer Laws

Question 9

Which legislation sets out the Australian Consumer Laws?

Answer 9

Competition and Consumer Act (2010)

Question 10

Which body enforces the Australian Consumer Laws?

Answer 10

Australian Competition and Consumer Commission (ACCC)

Question 11

What are the consequences of breaking the Australian Consumer Laws?

Answer 11

• Fines up to $50m for companies and $2.5m for individuals
• A public warning notice by the ACCC
• Potentially, could be sued by customers

Question 12

What are the 4 consumer laws?

Answer 12

• Misleading and deceptive advertising
• Price discrimination
• Implied conditions
• Warranties

Question 13

What are some examples of misleading and deceptive advertising?

Answer 13

• False statements
• Bait and switch
• Contradictory fine print

Question 14

What is price discrimination?

Answer 14

Charging different people different prices

Question 15

When is price discrimination illegal?

Answer 15

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 16

What are implied conditions?

Answer 16

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)

Question 17

What happens if a product does not meet its implied conditions?

Answer 17

The business must give a refund, replacement or repair - regardless of their warranty policy

Question 18

What is a warranty?

Answer 18

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

Question 19

What are the legal requirements of warranties?

Answer 19

• The business must keep their promise
• Cannot make customers pay for the implied conditions
• Must be written in plain English

Question 20

What is the case study for misleading and deceptive advertising?

Answer 20

Nurofen - ‘targeted painkillers’ that all had the same ingredients

Question 21

What is the case study for price discrimination?

Answer 21

Uber - surge pricing and higher prices in wealthier suburbs

Question 22

What is the case study for implied conditions?

Answer 22

Lululemon - claimed ‘no refunds on sale items’ even if defective

Question 23

What is the case study for warranties?

Answer 23

Apple - denied warranty claims if phones had been repaired by a 3rd party

Question 24

What are the ethical considerations in marketing?

Answer 24

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

Question 25

What does good taste in marketing involve?

Answer 25

Avoiding offensive marketing, such as violence or sexual themes

Question 26

Why might a business choose to advertise in good taste?

Answer 26

To prevent criticism and a negative reputation from customers

Question 27

Why might a business choose to advertise in bad taste?

Answer 27

To gain attention and publicity

Question 28

What does truth and accuracy in marketing involve?

Answer 28

Avoiding 'puffery' and exaggerated or vague statements (e.g. 'this moisturiser will give you younger, smoother skin')

Question 29

Why might a business choose to reduce its advertising of products that damage health?

Answer 29

- Avoid criticism and a bad reputation - Avoid the government creating new regulations

Question 30

What are some examples of products that damage health?

Answer 30

- Junk food - Cigarettes and vapes - Alcohol

Question 31

What is sugging?

Answer 31

Selling under the guise of a survey (pretending that you're doing market research, but then actually trying to sell something)

Question 32

Is sugging illegal?

Answer 32

No

Question 33

What does engaging in fair competition involve?

Answer 33

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 34

What is the case study for good taste?

Answer 34

H&M - Coolest Monkey in the Jungle

Question 35

What is the case study for truth and accuracy?

Answer 35

McDonalds - Heart Foundation Healthy Tick

Question 36

What is the case study for products that damage health?

Answer 36

Philip Morris - tobacco and vapes

Question 37

What is the case study for engaging in fair competition?

Answer 37

Amazon - using data from third party sellers on their website

Question 38

Why is ethical behaviour important in marketing?

Answer 38

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

Question 39

Why is government regulation important in marketing?

Answer 39

Need to comply with government regulations to: - avoid fines - maintain customer trust