Influences of Marketing

What are the 4 factors influencing customer choice?

Psychological, sociocultural, economic and government

What 4 syllabus point come under the consumer laws.

Deceptive and misleading advertising, price discrimination, implied conditions and warranties.

What 5 syllabus points come under ethical.

Truth

Accuracy and good taste in advertising

Products that may damage health

Engaging in fair competition

Sugging

Describe psychological influences.

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

Describe sociocultural influences

How other people and groups can affect one’s buying behaviour

Identify the 4 categories under sociocultural influences.

Social class, culture and subculture, family and roles, reference (peer) group.

Describe economic influences

Economic conditions affect people’s consumption level.

Outline two examples of economic influences.

Periods of recession and boom

Boom: Easier to find a job and pay rise—> hence consumers are confident and willing to spend—> increase in consumption.

Recession: High level of unemployment, incomes fall —> hence consumers less confident and decline in consumption.

Describe government influences.

Depending on economic environment, government will implement policies to ensure long-term sustainable economic growth and lower rates of unemployment. This can influence level of consumption.

Government can also impose various laws and regulations which affect consumer choices.

Identify 2 government influences and any law or regulation which can affect consumer choice.

Government influence: RBA interest rates, the budget.

Law/regulation: GST, restriction, The Competition and Consumer Act 2010 (CCA)

Outline perception (Define and describe)

How an individual selects, organises and interprets information.

Marketing managers must create a positive or favourable perception about their product in the mind of the customer.

Eg. Some people perceive Ferrari as a sign of achievement whilst some see it as ostentatious.

Outline motives. (Define and describe)

The reasons for certain actions.

Eg. Comfort, safety, health

Outline attitudes.

The overall feeling towards an item or activity.

Outline personality.

A combination of behaviour and characteristics of a person.

Eg. The style of car, clothing or jewellery that a person buys may reflect their personality.

Outline self image.

How a person sees himself/herself.

Outline learning.

Changes to a persons behaviour due to past experience or information learnt.

If a customer sees an advertisement for Coca-Cola that shows other people enjoying a new flavour, the customer might assume they would like it as well.

Outline social class.

Socioeconomic status (someone’s rank in society (or demography) due to their education, jobs or income level)

Eg. People from high socioeconomic status background are usually more willing to buy expensive products.

Outline culture and subculture.

Values, norms and beliefs of a community. It determines what people wear, what and how they eat, and where and how they live.

Eg. To respond to the greater desire for healthy food, many low fat-sugar free products are marketed.

Outline family roles, who would make buying decisions related to healthcare products, food and laundry.

The structure of a family affects the buying pattern.

Most women make buying decisions related to healthcare products, food and laundry supplies.

Teens are a household’s chief influencer.

Outline Reference (peer) group.

Groups with similar characteristics or values.

Eg. If a close friends tells you of a bad experience at a particular shop, you will probably change your buying behaviour based on this information.

Identify the 6 psychological influences

Perception

Motives

Attitudes

Personality

Self-image

Learning

What is the purpose of the consumer law

Consumer laws protect the rights of consumers and identify the responsibility of businesses. They restrict how businesses sell products by preventing them from acting dishonestly.

Why are consumer laws important to businesses.

They need the laws relevant to them and keep up with changes to the law. The staff must be trained to sell their products accuracy and understand what consumers rights are if the product does not meet their expectations.

Identify key consumer laws.

Australian Consumer Law (2011)

• ACL ensures all consumers have the same rights and all Australian businesses are subject to the same regulations

• For example they may offer consumer guarantees that they will be acceptable quality or be fit for a particular purpose.

The Competition and Consumer Act (2010)

• The CCA affects marketing and overall business activities in Australia.

• To protect consumers against unfair practices

  • Misleading advertising

  • Origin of products are banned

• To ensure businesses do not restrict competition or are unfair

  • Government encourages competition through giving consumers choice in order to stimulate economic growth.

What does the Australian Consumer Law look at

• Deceptive and misleading practices

• Price discrimination

• implied conditions

• Warranties

Define deceptive and misleading advertising

Create a false impression of a product.

Outline 2 most common methods of misleading techniques.

Bait and switch advertising: advertising discounts of a certain product (few quantities). When it runs out of stock, consumers are directed to higher priced items.

Dishonest Advertising: Using deceptive words or claims of a product such that it gives a false impression on the product.

Define price discrimination

Setting different prices for the same products in different markets, unfairly providing favourable treatment for certain costumers.

Eg. Airline tickets being cheaper when booked in advance, movie theatres offering student discounts, and restaurants having lower prices during happy hour.

CCA prohibits such discrimination so there is no unfair treatment and favouritism.

Define implied conditions.

The T&C of a contract that are assumed to exist, even though they might not be verbally spoken or written down. The Australian Consumer Law (2011) replaced implied conditions with consumer guarantees.

Such as

• Quality

• Products must match descriptions, be fit for purpose, meet promises made about performance, condition and quality

• Services must be acceptable care and take necessary steps to avoid loss and damage

Define warranty

Warranty is a promise made by a business that they will correct any defects in goods that they produce or in service that they deliver.

• Obligation they will rectify defects or repair the goods and services they produce.

• The use of warranties can be a good marketing tool

  • Eg. If the business offers longer than competitors, it will give the customers the impression that the quality is at a high standard.

  • However, false claims are illegal under CCA (2010)

When are businesses required by law to offer a refund or exchange

• If the products are faulty

• The function doesn’t match the sample

• Fail to do job the products are supposed to do