marketing influences

Question 1

factors influencing customer choice

Answer 1

1. psychological
2. sociocultural
3. economic
4. government
5. consumer laws

Question 2

psychological

Answer 2

psychological factors that influence customer choice include:

• perception
• motives
• attitudes
• personality

Question 3

sociocultural

Answer 3

four main factors include:

• social class
• culture
• subculture
• family & roles
• reference (peer) group

Question 4

economic

Answer 4

influences a business’s capacity to compete and a customers willingness and ability to spend

Sectioned into

(a) booms: where customers are willing to spend due to secure employment and income
(b) recessions: lack of confidence in the economy and customers become more price-conscious as spending plummets

Question 5

government

Answer 5

ability to make laws and regulatory bodies that can influence business behaviour
- such as regulatory forces exert a significant influence over the marketing activities of businesses because the breaking of these laws may result in financial penalties

e.g ACCC 2010 or Fair Trading Act 1987 (NSW)

Question 6

consumer laws

Answer 6

laws to improve the protection and rights of consumers and to clarify the rights & responsibilities of businesses e.g ACCC 2010

Question 7

bait advertising

Answer 7

involves advertising products that are not available, or only available in very limited quantities, at reduced prices to attract customers

Question 8

fine print and qualifications

Answer 8

when important conditions are written in a small-sized print

Question 9

comparative advertising

Answer 9

if an advertisement compares products or services to others on the market, the advertising can be misleading if the comparison is inaccurate or does not appropriately compare products

Question 10

environmental (greens) advertising

Answer 10

when businesses make environmental claims about products, they must be able to substantiate them

Question 11

country of origin

Answer 11

it is illegal and misleading to make false claims about the country of origin of goods

Question 12

premium claims

Answer 12

claims that give the impression that a product, one of its attributes, has some kind of added benefit when compared to similar products

Question 13

prize giveaways and competitions

Answer 13

if a business gives away free items or prizes, they must not mislead consumers about the items on offer or the chances of receiving these items

• if there is a catch, they must let people know at the outset

Question 14

dishonest advertising

Answer 14

advertisements must not use words that are deceptive and claim that a product has some specific quality when it does not

Question 15

price discrimination

Answer 15

Involves charging customers different prices for the same product or service based on what the seller thinks they can get the customer to agree to

• ACCC prohibits price discrimination if the
  discrimination could substantially reduce competition - meaning businesses cannot give favoured treatment to some customers while denying it to others

Question 16

implied conditions

Answer 16

Are the unspoken and unwritten terms of a contract
- these conditions are assumed to exist regardless of whether they were especially mentioned or written into a contract
- under the ACL → when you buy products and services they come with automatic customer guarantees that they will work and do what you asked for

Question 17

customer guarantees on products

Answer 17

• acceptable quality
• match description
• meet any extra promises

Question 18

customer guarantees on services

Answer 18

• provided with acceptable care
• fit for purpose

Question 19

Warranties

Answer 19

An extra promise made by a business that they will correct any defects in goods or services delivered - a promise to repair/replace faulty products

Question 20

A business is required by law to offer a refund if the products provided:

Answer 20

• are faulty
• do not match the description or a sample
• fail to do the job they were supposed to do

Question 21

ethical criticisms of marketing

Answer 21

1. truth
2. accuracy and good taste in marketing
3. products that may damage health
4. engaging in fair competition
5. sugging

Question 22

ETHICAL: materialism

Answer 22

to persuade and manipulate customers to buy whatever the firm wants to sell even if they don’t need it e.g apple

Question 23

ETHICAL: Use of stereotyping

Answer 23

The way groups of people are portrayed in advertisements does not always fully represent reality
eg. gender roles

Question 24

ETHICAL: Use of sex to sell products

Answer 24

Advertisers use sex appeal to suggest to consumers that the product will increase the attractiveness or charm of the user e.g Kim Kardashian Sketchers ad

Question 25

ETHICAL: product placement

Answer 25

the inclusion of advertising in entertainment is a promotion strategy referred to as production placement. Generally the insertion of these products is subtle

Question 26

ETHICAL: invasion of privacy

Answer 26

Recent growth in online advertising is raising ethical issues with the most serious being the tracking of web users and using this info to target them with ads

Question 27

Truth and Accuracy

Answer 27

refers to the loopholes and grey areas that businesses could exploit, the main being: - exaggerated claims - vague statements - untruths due to concealed facts

Question 28

Products that may damage health

Answer 28

Gov tries to restrict the provision of g+s that are harmful without applying a ban on their sale e.g tobacco and alcohol

Question 29

cartel conduct (ENGAGING IN FAIR COMPETITION)

Answer 29

if two or more businesses that would normally be in a competition with each other agree to act together

Question 30

anti-competitive agreements

Answer 30

contracts or arrangements containing provisions that substantially lessen competition in a market are prohibited

Question 31

misuse of market power

Answer 31

the act prohibits businesses with a substantial degree of market power from engaging in conduct that has the purpose, or has or is likely to have the effect of substantially lessening competition in a market

Question 32

exclusive dealing

Answer 32

occurs when one person or business trades with another and then imposes restrictions on them

Question 33

resale price maintenance

Answer 33

this occurs if a supplier sets the price at which retailers will set the products they supply them

Question 34

mergers and acquisitions

Answer 34

While most mergers or acquisitions are legal and can be very beneficial, the Competition and Consumer act prohibits any merger or acquisition that would have the effect of substantially reducing competition in that particular market

Question 35

Sugging

Answer 35

Selling under the guise of a survey that is a sales technique disguised as market research

Question 36

3 ethical concerns raised by Apple

Answer 36

1. product placement 2. e-waste 3. health concerns