NSWBusiness StudiesSyllabus dot point

What influences marketing decisions and how do customers make choices?

Factors influencing customer choice (psychological, sociocultural, economic, government); consumer laws (deceptive and misleading advertising, price discrimination, implied conditions, warranties); ethical aspects of marketing

A focused answer to the HSC Business Studies dot point on influences on marketing. The four factor groups influencing customer choice (psychological, sociocultural, economic, government), key Australian consumer laws (ACL on misleading conduct, deceptive advertising, implied conditions and warranties), and ethical marketing, with worked examples from Coles, the ACCC v Telstra and Aldi.

Generated by Claude OpusReviewed by Better Tuition Academy8 min answerUpdated 2026-05-20

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What this dot point is asking

NESA wants you to know the four groups of factors that shape customer choice (psychological, sociocultural, economic, government), the key Australian Consumer Law provisions a marketer must respect (misleading conduct, deceptive advertising, price discrimination, implied conditions and warranties), and the ethical dimensions of marketing decisions beyond mere legal compliance. Section II questions on this dot point often pair one consumer law provision with a real ACCC case.

The answer

Factors influencing customer choice

Marketing only works if it engages the actual decision drivers of the target customer. The syllabus groups those drivers into four buckets.

Psychological factors

Internal to the customer.

Perception. How the customer interprets sensory information. Two customers see the same Aldi packaging differently - one as utility, one as cheap.
Motivation. The internal drive to buy. Maslow's hierarchy is the classic framing (physiological - safety - belonging - esteem - self-actualisation).
Learning. Past experience with the brand or category shapes future purchases.
Attitudes and personality. Beliefs and disposition toward a product or brand.

Sociocultural factors

External to the customer.

Family. Spousal, parental and household influence on purchase decisions.
Peer group and reference groups. People you compare yourself to or aspire to belong to.
Social class. Socioeconomic grouping that shapes consumption norms.
Culture and subcultures. Shared values, ethnicity, generational identity.

Economic factors

External and macroeconomic.

Income and disposable income. Customer spending capacity.
Interest rates. Influences both saving propensity and the cost of credit-financed purchases (RBA cash-rate changes feed directly into mortgage and credit-card rates).
Economic conditions. Recession, inflation and unemployment all shape discretionary spending.
Globalisation. Imported alternatives change price points and choice.

The Australian post-pandemic period (2022-2024) of rapid RBA rate rises significantly compressed discretionary spending, evident in Coles and Woolworths reporting customers switching to private-label goods and reducing basket size.

Government factors

External and regulatory.

Industry-specific regulation (broadcasting, gambling, tobacco, alcohol).
Taxation (luxury car tax, GST, alcohol excise) which shifts price points.
Australian Consumer Law (national, administered by the ACCC and state agencies).
Privacy Act governing what customer data can be collected and used in marketing.

Consumer law - the four NESA-named protections

NESA explicitly names four consumer law areas you must know.

Misleading or deceptive conduct

Australian Consumer Law Section 18 prohibits conduct in trade or commerce that is misleading or deceptive, or likely to mislead or deceive. The standard is the impression on the ordinary or reasonable member of the target audience.

ACCC enforcement examples relevant to HSC.

Volkswagen Australia (2019) - paid $125 million in penalties over the "dieselgate" emissions-test defeat-device misrepresentation, a record at the time.
Telstra (2021) - paid $50 million over unconscionable conduct in selling mobile contracts to Indigenous customers in regional and remote communities.
AGL (2022) - $3 million in penalties for misleading "Sun Save" renewable-energy savings claims.

Deceptive advertising

A subset of misleading conduct, focused on advertising specifically. Examples include fake "was/now" price comparisons, "two for one" offers where the "one" price has been inflated, and false scarcity claims.

ACCC action against Booking.com (2022) targeted misleading "limited rooms" and "discount" claims on the booking platform.

Price discrimination

Charging different customers different prices for the same product based on the customer's identity or circumstances. Price discrimination is not per-se illegal in Australia, but it can be:

Unconscionable conduct (ACL Section 21) if it exploits a vulnerable customer.
Anti-competitive (Competition and Consumer Act Part IV) if it lessens competition substantially.

The ACCC supermarkets inquiry of 2024-2025 examined whether Coles and Woolworths price discriminate between regional and metro stores in ways that disadvantage regional customers.

Implied conditions and warranties

The ACL provides non-excludable consumer guarantees that operate alongside any express warranty. Goods supplied must be:

Of acceptable quality.
Fit for any disclosed purpose.
Match their description and any sample.
Have reasonable durability (proportional to price and product).
Come with reasonable repair and spare-parts availability where the supplier holds itself out as providing these.

Express warranties cannot reduce the statutory guarantees. The Apple Australia case showed that even multinational brands can be penalised (Apple paid $9 million in 2018) for conduct that implied the 12-month manufacturer warranty was the only remedy.

Ethical marketing

Ethical marketing goes beyond legal compliance. NESA-relevant ethical dimensions include:

Truth in advertising beyond the legal floor (e.g. clear disclosure of paid sponsorship by influencers, even where the law's "ad" label requirement is unclear).
Vulnerable consumer protection. Not targeting children, the cognitively impaired or financially distressed in manipulative ways.
Privacy and consent. Not exploiting customer data beyond the customer's reasonable expectation, even where consent was technically obtained through a 30-page T&C.
Sustainability claims. "Greenwashing" - exaggerating environmental credentials - is the most-prosecuted ethical-marketing area of 2024-2025. The ASIC and ACCC have both run greenwashing actions.

A genuinely ethical marketing approach can be a brand asset. Aesop has built brand equity partly on a refusal to use airbrushed images and on transparent ingredient sourcing. Bunnings's commitment to verified-timber sourcing (FSC certification) is partly ethical, partly legal-risk management.

Worked example

"Discuss the impact of consumer laws on the marketing strategies of a contemporary Australian business. (8 marks)"

Plan. Pick Telstra; discuss the misleading conduct provision and the implied conditions and warranties provision.

Sample structure.

Introduction. Australian Consumer Law (ACL) sets the legal floor for marketing conduct. Telstra, as the largest Australian telecommunications retailer, must design every campaign and product disclosure to comply. Two provisions have most shaped Telstra's marketing - the prohibition on misleading or deceptive conduct (ACL Section 18) and the implied consumer guarantees (ACL Part 3-2).

Misleading conduct. The 2021 Federal Court action against Telstra for unconscionable conduct in selling post-paid mobile contracts to Indigenous customers in regional and remote NSW, WA and NT resulted in a $50 million penalty - one of the largest in ACL history. The marketing-strategy consequence was a Telstra-wide retraining program, a redesigned customer-assessment process for contract eligibility, and the appointment of an Indigenous Customer Advisory Board. Telstra's communication strategy now emphasises informed-consent disclosure in plain language.

Implied conditions and warranties. Telstra sells handsets and home internet equipment under ACL consumer guarantees that operate alongside its express manufacturer warranties. Telstra cannot tell a customer with a 14-month-old, faulty $1,500 iPhone that the manufacturer warranty has expired - the ACL guarantee of reasonable durability still applies. Telstra's marketing language and call-centre scripts now make this explicit.

Discussion. ACL compliance constrains some marketing tactics (aggressive contract-pushing in vulnerable communities, blanket warranty-expiry messaging) but creates marketing opportunities for businesses that go beyond the legal floor. Telstra's response, particularly post the 2021 case, has positioned it to use customer-trust messaging as a differentiator against TPG and Optus.

Judgement. Consumer laws are a binding constraint, but ethical marketing - going beyond the floor - can be a competitive asset.

Common traps

Listing factor groups without examples: Markers want "psychological - perception - shows up at Aesop as ..." not just "psychological - perception, motivation, learning, attitudes".
Calling the ACL the Trade Practices Act: The TPA was replaced in 2010 by the Australian Consumer Law (and the Competition and Consumer Act 2010 more broadly). Use current names.
Confusing implied conditions with express warranties: Statutory guarantees are non-excludable and operate alongside express warranties. An express warranty cannot strip the statutory ones.
Treating "price discrimination" as illegal per se: It is not. It only becomes illegal when it is unconscionable or substantially lessens competition. Many businesses lawfully price-discriminate (student discounts, off-peak pricing).
Treating ethics as a synonym for law: Ethical marketing goes beyond what the law requires. The distinction matters and is examined.

Past exam questions, worked

Real questions from past NESA papers on this dot point, with our answer explainer.

2021 HSC5 marksExplain how psychological and sociocultural factors influence customer choice for a contemporary Australian business.

Show worked answer →

A 5-mark answer needs both factor groups, the mechanisms, and a worked example.

Psychological factors are internal influences on the customer - perception, motivation, learning, attitudes and personality. They explain why two customers with the same income, age and life stage make different purchase decisions.

Sociocultural factors are external social influences - family, peer group, social class, culture, subcultures and reference groups. They shape what is acceptable, aspirational or expected.

Worked example: Aesop. Aesop, the Australian-origin premium skincare brand (now part of L'Oreal), targets customers strongly influenced by both factor groups.

Psychological influences: Aesop customers value perceived product quality and brand-identity expression; the simple amber bottle and apothecary-style label appeals to a particular self-image of sophistication and understated luxury.

Sociocultural influences: Aesop is a reference-group brand. Visible presence in the bathrooms of Melbourne boutique hotels, in inner-city studio apartments and on Instagram lifestyle accounts builds aspirational appeal. The brand is consumed partly because peers and aspirational reference groups consume it.

Markers reward (1) clear definition of both factor groups, (2) mechanisms (perception/motivation for psychological; reference groups/aspirational class for sociocultural), (3) worked example showing both at play.

2024 HSC6 marksOutline two key provisions of Australian Consumer Law that influence marketing. Use an example of each.

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A 6-mark answer needs two clearly stated ACL provisions, each with a worked example.

Provision 1: Misleading or deceptive conduct (ACL Section 18). A business must not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive consumers. The provision covers advertising, packaging, sales talk and online conduct.

Example. In 2022, the Federal Court found that AGL Energy made misleading claims about its renewable-energy product (AGL Sun Save), which was found to overstate the certainty of customer savings. AGL was ordered to pay $3 million in penalties. The marketing consequence was a complete rewrite of energy-product comparison advertising across the sector.

Provision 2: Implied conditions and warranties (consumer guarantees, ACL Part 3-2). Goods supplied to a consumer come with non-excludable statutory guarantees - they must be of acceptable quality, fit for any disclosed purpose, match their description and any sample, and (for businesses with reasonable spare-parts and repair capacity) come with reasonable durability. Warranties supplied by the business operate in addition to these statutory guarantees; they cannot reduce them.

Example. Apple Australia historically gave a 12-month manufacturer warranty on iPhones. The ACCC challenged Apple in 2018 over conduct that suggested the manufacturer warranty was the only remedy, when ACL consumer guarantees often extend further (a $1,500 iPhone is expected to be durable for longer than 12 months). Apple was ordered to pay$ 9 million. Apple's marketing now explicitly mentions that ACL consumer guarantees apply.

Markers reward (1) accurate naming of two ACL provisions, (2) what each provision requires, (3) a real Australian example for each.