Consumer and financial decision-making (1)
Consumer and Financial Decision-Making
Year 10 Economics and Business
Reflection on Personal Decisions
Think about your week’s decisions.
Did these include purchases?
Are there any significant purchases planned?
Which business will you choose to buy from? Why?
Learning Objectives
Key Topics You Will Learn About:
Impact of personal decisions as consumers.
Effects of consumer and financial decisions on individuals and society.
Purpose of the Australian superannuation fund system.
Skills to Develop:
Locate, select, and analyze economic information and data from various sources.
Explain economics and business issues, trends, and cause-and-effect relationships.
Predict consumer and financial impacts.
Respond to economic and business issues using cost-benefit analysis or criteria for decision-making.
Assessments
Assignments and Evaluations:
Making a sound consumer decision (bookwork – 2)
Fair Trade? (poster and rationale – 5) - pair-work
How much superannuation do I need? (bookwork – 2)
Consumer and Financial Decision-Making Test (test – 5)
Decision-Making as a Business Professional
Scenario for Reflection:
Imagine being a business professional using public transport.
List potential purchases.
Categorize purchases into minor and major.
Assess whether each purchase is a necessity.
Identify main influences on purchasing decisions.
Consumer Decisions
Overview
Consumer decisions are made every day regarding goods and services.
They vary from impulsive purchases to well-considered decisions.
Stages of Consumer Decision-Making:
Recognizing the need (e.g., thirst for a drink).
Gaining information about the product.
Comparing alternatives.
Purchasing the item.
Post-purchase evaluation (satisfaction or regret).
Small vs. Big Purchases
Discussion Points:
Frequency of big purchases.
Variations in decision-making processes for small vs. big purchases.
Financial Decisions
Differences from Consumer Decisions:
Financial decisions often involve significant investments intended to generate income.
Example for consumers: Buying a second home for rental income.
Example for businesses: Investing in machinery to increase productivity.
Types of Financial Purchases:
Major purchases (e.g., second home, new machinery).
Minor purchases (e.g., new computer).
Business Decision-Making
Principles:
Business decisions require careful consideration, involving:
Assessment of retained profits.
Evaluation of return on investment.
Analysis of financing costs when taking loans.
Influences on Consumer and Financial Decision-Making
Main Factors:
Psychological Factors
Sociocultural Considerations
Environmental Influences
Economic Factors
Marketing Factors
Government Price Influences
Marketing Fundamentals
The 4 Ps of Marketing:
Product - What the business sells; includes features and uses.
Price - Customer’s perceived value; what they are willing to pay.
Promotion - How businesses communicate product value to customers.
Place - Where the product is sold; physical or online presence.
Successful Marketing Strategies
Key Components:
Research.
Publicity.
Promotions.
Advertising.
Evaluation.
Evaluating Decisions
Key Considerations:
Advantages and disadvantages of brand loyalty.
Target market analysis for products.
Analyze marketing elements in product presentation.
Financial Decision Influences
Distinct Factors:
Economic state.
Loan repayment ability.
Current savings levels.
Buying a Car: Major Implications
Considerations Include:
Fuel-efficiency
Park-ability
Affordability
Brand loyalty
Safety
Convenience
Usefulness
Financial Evaluation for Car Purchase
Key Factors:
Existing savings.
Need for loans.
Costs for maintenance and insurance.
Depreciation impact.
Loan Repayment Insights
Sample Scenario:
Example graph shows total loan repayments of a $20,000 loan at 7.5% over five years.
Monthly repayments are $411, totaling approximately $24,646.
Assess advantages and disadvantages of such financial commitments.
Fair Trade Assessment Task
Overview:
Oxfam as a charity tackling poverty causes.
Encouragement for responsible consumerism.
Design a poster addressing at least two influencing factors on purchasing decisions using marketing's 4 Ps.
Superannuation Essentials
Key Concepts:
A retirement scheme aimed at reducing dependence on government pensions.
Changes and updates in the superannuation system over time.
Understanding Super Contributions
Historical Contribution Changes:
Contributions started at 3% in 1983, increased to:
9% by July 2002.
10% by July 2021.
Set to reach 12% by July 2025.
Importance:
Higher contributions increase retirement balances, supporting better future decisions.
Types of Superannuation Funds
Categories:
Industry funds: Jointly run by unions and employers.
Retail funds: Managed by financial institutions.
Self-managed funds: Over a million Australians have them.
COVID-19 Impact on Superannuation
Case Review:
Early access to superannuation allowed for those financially affected by the pandemic.
Evaluation of the policy's long-term impact.
Additional Super Contributions
Considerations for Employees:
Potential benefits and drawbacks of contributing more than the mandatory minimum.
Understanding Entrepreneurs
Definition and Key Characteristics:
Entrepreneurs create businesses and take risks to pursue opportunities.
Skills needed for entrepreneurship include innovation, productivity improvement, and capital investment.
Workplace Flexibility
How Businesses Can Offer Flexibility:
Variable work hours/days.
Compressed workweeks.
Opportunities for telecommuting or remote work.
Skilled Workforce Importance
Economic Growth:
A skilled workforce is essential for sustaining a strong economy.
Growth measured by the Gross Domestic Product (GDP).
Measuring Economic Indicators
Key Metrics:
Unemployment Rate: Aiming for ~5%, currently at 4.1%.
Inflation Rate: Targeting stable rates around 2-3%, currently at 3.8%.
Entrepreneurial Response to Economic Conditions
Strategies:
Collecting and analyzing data.
Adjusting marketing strategies based on economic trends.
Upskilling workforce to foster innovation.