Activity 1: Marketing and selling (Commerce)
1. PLAY the video segment
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In the video, the three flatmates discuss the computer offer they see on TV.
Nik has a problem with Sophie buying a computer over 60 months. |
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2. READ the case study and answer the questions.
When Sophie was walking down the street, she was handed an advertisement for a computer deal that sounded pretty good. The whole deal offered a PC, a CD-ROM, a modem and a network card. The offer also included some free internet access. Sophie was a little worried that she wouldn't be able to afford it.
Sophie and Tye went to the shop to check it out. The sales assistant explained that there was no upfront payment, only a monthly payment of $79.95 for 36 months. Sophie worked out that she would have to pay $20 a week - even she could afford that!
When they got home, Nik was reading the newspaper. Excited, Sophie told Nik about the huge bargain. But then Nik showed Sophie and Tye what he had been reading in the paper. When she read the fine print on her contract, Sophie realised she would be paying a lot more than $20 per week after the first month of 'free' internet access.
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CONSUMER BODY WARNS ON 'CHEAP' PC-NET BUNDLES
By Kirsty Needham
The Australian Competition and Consumer Commission has warned consumers against the spate of 'free' and cheap computer deals on offer from major retailers.
The deals, which bundle computers with Internet access plans and require monthly payments for up to three years, have been introduced by Myer Grace Bros, Tandy and Harvey Norman as a way to encourage mass sales of PCs.
Internet service providers stand to benefit by locking subscribers into long-term contracts.
Acting ACCC chairman Mr Allan Asher warned against the complexity of some of the deals.
"There is a risk that consumers will be misled if important conditions and the real price are only revealed in the fine print or flashed on to the TV screen for a few seconds," said Mr Asher.
Some of the offers charged higher interest rates than credit cards, he said.
He also questioned the idea of entering into long term contracts in such a fast-moving market, pointing out the cost of internet access has dropped considerably in the last three years.
"Consumers should at least find out how much it costs to end the agreement early," he said.
The Internet PC deals are based on the mobile phone sales model.
But the ACCC is concerned that the early days of marketing such mobile phone deals saw competition "distorted by misleading or deceptive conduct."
© John Fairfax Publications Pty Ltd 1999 |
3. In a small group, DISCUSS these questions:
a. Why are the major retailers offering 'free' and 'cheap' computer deals?
b. How might Sophie lose out with the 'special deal'? List your answers under these headings:
- interest rates
- long contract
- prearranged ISP access
- overall cost
4. GO to Just the Facts - Computer and find out the things you should consider before buying a computer and before choosing an ISP (Internet Service Provider).
5. DISCUSS the outcomes of your research with the class.
This activity can be found in the NSW Money Stuff Teacher resource book – Commerce page 18 .
Explore additional learning activities (which include extension and revision tasks) in the print resources section under Print resources - Victoria.
Linked Learning Outcomes - NSW
Core Part 1.1 Consumer Choice
Focus: Students learn how to identify, research and evaluate options when making decisions related to solving those problems and issues that confront consumers.
Students learn about: Consumer decisions.
Additional content: Option 2 – Promoting and selling
Focus: Students analyse the strategies that sellers use to promote products and maximise sales and evaluate the impact on consumers.
Students learn about: The Selling Process.
Outcome LS.7:
Students learn about: Factors that influence selection of goods and services.
Learning Outcomes – Victoria
Victorian Essential Learning Standards (VELS) Discipline-based learning
Domain: The Humanities - Economics
Dimension: Economic knowledge and understanding
Level 5
Students explain the nature of the economic problem and how economic choices involve trade-offs that have both immediate and future consequences.
Students make informed economic and consumer decisions, demonstrating the development of personal financial literacy.
Level 6
Students discuss and explain what it means to be an ethical consumer and producer and identify examples of ways values can affect the economic decision making of consumers, producers and governments.
Students explain the role and significance of savings and investments for individuals and for the economy, and demonstrate the skills required to successfully plan and manage personal finances.
Learning Outcomes - Western Australia
(Society & Environment)
ICP 4.3 Identifies, selects and combines information from a variety of sources and perspectives, connecting similar ideas and making generalisations.
R 4.2 Understands that people make decisions in order to be efficient and enterprising in their use of resources.