Topic 1 - Needs wants and aspirations.

Question 1

What is a need?

Answer 1

Essential items that everyone must have to survive

Question 2

what are wants?

Answer 2

Optional, nice-to-have items that are desirable but not essential
- wants cannot be fulfilled until needs have been accounted for

Question 3

what determines ones needs and wants

Answer 3

the price of products and peoples ability to buy them

Question 4

what is an aspiration?

Answer 4

hopes for the future
- items or experiences that people wish to have in the medium or long term future

Question 5

How do peoples needs wants and aspirations change over the life cycle?(3)

Answer 5

• needs don’t change much over time however what’s important to someone could change.
• wants may change to become more realistic
• some aspirations may be met allowing new ones to be made.

Question 6

Why might ones needs change through the life cycle?(4)

Answer 6

• lifestyle
• prevailing culture of the society in which they live
• the size of their family
• their ability to afford products

Question 7

How could one satisfy their needs wants and aspirations?(5)

Answer 7

They must be able to finance them.
this may be through:
- medium and long term savings
- investments
- pensions
- long term borrowing
- insurance

Question 8

What are Medium-term and longer-term savings? (2)

Answer 8

• financial products that allow people to save over a longer period, more than 3 years.
• this will cover future needs and wants and allow people to fulfill their aspirations.

Question 9

What are investments?

Answer 9

Longer term form of savings
- for a long term want or aspirations
- more risky than savings but can bring higher return.

Question 10

What are pensions?

Answer 10

People save money in a pensions scheme through their working,Ives to finance their retirement

Question 11

What is longer term borrowing?

Answer 11

• to finance a large purchase that must be paid back over a long period of time, otherwise it would be unaffordable
• such as mortgages

Question 12

What is a hire purchase?

Answer 12

Secured consumer credit to finance items that involves the borrower repaying over a number of years.

Question 13

What is long term insurance?

Answer 13

Insurance companies and banks provide insurance policies that cover long term risks.

Question 14

What is life assurance?

Answer 14

Allows people to protect their loved ones in case they die

Question 15

What is a financial product?

Answer 15

Products that enable them to satisfy their needs, wants and aspirations.
- not products that people get pleasure from having them directly

Question 16

What is an internal factor?

Answer 16

Those that come from people within themselves:
- affecting someones choices is their own personal set of values, beliefs and attitudes
-affecting the way people manage their money.

Question 17

What are values?

Answer 17

General feelings or beliefs about desirable behaviour and goals.
- involve the concepts of good and bad and how people thing things should be

Question 18

What are the two important functions values fulfil to buying financial products?

Answer 18

• they help to distinguish between what they consider needs and wants to form their aspirations.
• they help people to plan their finances and to decide between different alternatives.

Question 19

What are beliefs?

Answer 19

Not about the way people thing things should be but how they think things are
- can influence the way people see financial services and the firms that provide them.

Question 20

How may beliefs be described as?

Answer 20

Absolute or casual

Question 21

What are attitudes?

Answer 21

At a given time and place, people think and feel about another person, an event or an issue
- usually limited to socially significant issues or events and are usually quite general than specific.

Question 22

How can attitudes be affected? (4)

Answer 22

By circumstances, events, experiences or advice.

Question 23

What is a neutral attitude?

Answer 23

Having no attitude towards something

Question 24

What are perceptions?

Answer 24

Representation of peoples understanding of the world around them.

Question 25

What are preferences?

Answer 25

When people prefer particular products, usually dependant lm their personal values, beliefs and attitudes

Question 26

What external factors influence needs wants and aspirations? (3)

Answer 26

• marketing and advertising
• peer pressure
• trends, fashion and role models

Question 27

What is marketing?

Answer 27

• activities a company undertakes go promote the buying and selling of a product or service.

Question 28

What is promotion? (1+3)

Answer 28

Paid for marketing activities that aim to:
- communicate with people
- inform them of goods and services
- persuade them to buy

Question 29

What are public relations? (3)

Answer 29

• known as ‘below the line’ expenditure.
• advertising not paid for directly but keeps business products in the public eye.
• implicit form of advertisement.

Question 30

What is product placement or sponsorship?

Answer 30

Aspects of PR that involve a product appearing on a programme of sorts. Or around a stadium for e.g.

Question 31

What is peer pressure?

Answer 31

Pressure from people around you to conform to things that can blur rationality

Question 32

What are trends and role models?

Answer 32

• tell us about attitudes and values that people can hold and influence the decisions and choices they make

Question 33

What are some examples of financial trends? (3)

Answer 33

• the way people pay for goods and services
• peoples attitudes to saving
• how people view using credit

Question 34

What is a role model?

Answer 34

Someone we look up to and try to be like.

Question 35

What is culture?

Answer 35

About social norms, about behaviour and attitudes across social groups.
- indicated what is acceptable and unacceptable in a society

Question 36

What is a large cultural norm in the UK but perhaps not other countries?

Answer 36

Owning a home.

Question 37

What effects personal values on individual behaviour and decisions? 5

Answer 37

• feedback and expectations
• personal values on financial decisions.
• affordability
• setting priority’s
• attitudes to risk

Question 38

what are some examples of expectation led events?

Answer 38

• expecting share prices to fall cause people to sell shares creating a fall in price
• interest rates expected to rise will.P