© Cambridge University Press 2012 CHAPTER SEVEN INFLUENCES ON MARKETING Topic 2 Marketing

A business must have a clear understanding of how each of these factors influence customers’ behaviour when buying goods/services: - Psychological factors; - Sociocultural factors; - Economic factors; and - Government factors. Factors influencing customer choice

Psychological factors are the personal characteristics of individuals that influence their behaviour. These factors relate to the way people think and develop attitudes to certain products. Psychological factors include a consumer’s understanding of a product and what motivates the consumer to purchase particular products. Task: 1. Define perception. 2. Explain how a customer’s perception about a product will influence their decision to purchase that product. Use perceptions of price as an example (Aldi and luxury goods). Pages 121 – 122. Factors influencing customer choice (cont.)

Maslow’s hierarchy of needs Task: page Define motivation and outline Maslow’s theory of motivation. 2. Why is it important for businesses to understand this theory.

Economic factors relate to an individual’s level of income and ability to access credit (borrowing money). Task: 1. Explain why it is important for a business to understand the socioeconomic status of its target market. 2. Find a current media article which relates to consumer spending patterns and unemployment levels in the Australian economy. How will a future increase in unemployment affect businesses in Australia and their marketing strategies? 3. Activity 7.1, question 1. Factors influencing customer choice (cont.)

Sociocultural factors influence a customer’s choices are those that come from the customer’s society and culture, such as where they live and their religious beliefs. Task: page Read Business Bite. Explain how businesses have adapted products to meet the needs of people of different cultures living in Australia. 2. Activity 7.1, question 2. Factors influencing customer choice (cont.)

Government factors have an important role in influencing the goods and services that consumers purchases, through use of fiscal and monetary policies, microeconomic reform and age restrictions placed on the purchase of specific products. Task: page Define fiscal policy. Outline the features of fiscal policy that were key to Australia avoiding a recession in Read the Business Bite. 2. Define monetary policy. What effect does a rise in interest rates have on consumer spending? How will businesses be impacted? 3. What is meant by microeconomic reform? 4. How does the government restrict consumers’ access to certain goods? 5. Chapter revision task page 136 Factors influencing customer choice (cont.)

Competition and Consumer Act 2010 (Cth) Businesses are prohibited from engaging in deceptive or misleading conduct. This extends to conduct in the area of marketing, such as advertising, sales promotions and discounts. Consumer laws

* Price discrimination refers to the process of a business giving preference to some retail stores by providing them with stock at lower prices than is paid by the retailers’ competitors. * Implied conditions and warranties ensure that a product is sold in full working condition and is consistent with the description given. Consumer laws (cont.)

* Marketers are expected in engage in fair and honest behaviour when developing a marketing campaign. It is expected that when promotional material is distributed, this material represents information that is truthful and accurate. Consumer laws (cont.)