Consumer Consumer ChallengeChallenge

Identify factors that influence consumer choicesIdentify factors that influence consumer choicesDecide steps wise consumers take when making Decide steps wise consumers take when making

purchasespurchasesTerms to Learn Terms to Learn

ConsumerConsumerImpulse Buying Impulse Buying

Comparison ShoppingComparison ShoppingWarrantyWarranty

Better Business BureauBetter Business Bureau

What is a consumer?

Consumers are people who purchase goods and service

Goods are products that you buy

Services are things you pay others to do for you

Economy- The collection of institutions, laws, activities, controlling values, and human motivations that collectively provide a framework for economic decision making. 

Consumerism

Economy- The collection of institutions, laws, activities, controlling values, and human motivations that collectively provide a framework for economic decision making. 

Evaluating- determine or set the value or amount of; to judge or determine the significance, worth, or quality of; assess:

Consumer Decision- making a choice as a person to purchase or not purchase goods or services

Consumer Wants and Needs

Wants- something you would like to have. It is not absolutely necessary, but it would be a good thing to have. Example: music. You do not need music to survive.

Needs- something you have to have, something you can't do without. Example: food. If you don't eat, you won't survive for long. Many people have gone days without eating, but they eventually ate a lot of food. You might not need a whole lot of food, but you do need to eat.

Want and a Need?

Can it be a want and a need? Example: Food Different types of foods can be wants or needs. We need to eat

protein, vitamins, and minerals. How you get them is up to you (and your family). You can eat meat, nuts, or soy products to get protein. You can get fruits and vegetables to get vitamins and minerals. You can eat yogurt or cheese to get other vitamins and minerals. You can eat bread to get still more vitamins and minerals. These basic kinds of foods are needs.

Ice cream is a want. You don't really need to eat ice cream to survive. You can eat it to get some vitamins and minerals, but other foods like

cheese and yogurt give you more of those same vitamins and minerals without giving you the fat that ice cream does.

Still, ice cream tastes good to many people. They like to eat it. They want it, but they don't need it to survive.

Consumer Decision Making Model

Establish the scenario; you are wanting to buy something. Book

Set a goal, being clear on the decision being made - what you are trying to achieve?- Read a new book

Identify obstacles to achieving the goal - what are the problems? ( money, location)

Identify the alternatives to achieving the goal - what options are available? (reading the book after your friend has bought it and finished it; downloading the book from the internet as an eBook ; buying the book at a secondhand store)

Consumer Decision Making Model

Evaluate advantages and disadvantages for each alternative - what are the costs and benefits of each option? (Advantages: book is good quality and brand new, and you can keep the book for as long as you want. Disadvantages: costs full price which may exceed budget, have to search around shops to find right book. )

Rank the alternatives - put each option in order of preference. buying the book from a secondhand store. reading your friends book after they've finished buying book from a retail store downloading book as an eBook from the internet

Choose the best alternative - which option do you prefer most? You can evaluate the consequences of your decision. (You prefer to buy the book from a secondhand store.)

You can evaluate the consequences of your decision. (The consequences of buying the book from a secondhand store may include: the opportunity cost (next-best alternative) is reading your friends book after they have finished. The positives are the quality of your book will usually be expected to be above average, the price is cheaper, you can keep and read the book for as long as you want - unlimited, you can lend it to your friends. The negative aspects of the choice are that the quality of the book is never going to be perfect, secondhand stores might not have the book - or they may not be selling the book for a very long time because it is a new title, your friends may ridicule you for buying at a secondhand shop.)

Supply and Demand

Supply- the quantity of goods and services that producers are willing to offer at various possible

prices during a given time period When demand is high, there are often more of the product desired Prices are also related to supply, similarly to that of demand Producers supply more good when they can sell them at a higher price

Demand- more than simply wanting something the amount of a good or a service that a consumer is willing to buy at various possible

prices during a given time period. Related to the price of good/service When price goes down, demand often decreases

Supply and Demand Chart

vocab. word D=define E=examples A=attributes N=non-examples

Supply The amount of something

Number of doses of flu shot available

It is produced for consumers

Desire of the product

Demand The desire that consumers have for a product

The number of people that want the flue shot

Its is always stimulated by consumer wants/needs

Amount of the product available

What to Consider When Making Decisions?

What to Consider What to Consider When Making When Making

Decisions?Decisions?

Choose Where You Will Buy

Before you buy anything –COMPARSION SHOPCOMPARSION SHOP –taking the time to shop around and compare: PRODUCTS PRICES SERVICES

Some places you can do comparison shopping are in: DEPARTMENT STORES DISCOUNT STORES NEIGHBORHOOD STORES

Factors to Consider:

Quality- high grade; superiority; excellence:

Price Comparison-to examine in order to note similarities and differences: cost, material, etc.

Availability -readily obtainable; accessible

Brand Name- Folgers, GAP, Nike

Features -a prominent or conspicuous part or characteristic; something offered

Types of Stores:

Department Store- a store that carries a wide range of merchandise (i.e. Dillards)

Specialty Store- store that carries only a specific type of merchandise (i.e. LeRoy Jewelers)

Chain Store- groups of stores that bear the same name and carry the same merchandise (i.e. Walmart)

Factory Outlet- store that carries only one manufacturer's products (i.e. Opry Mills- Nike Factory)

Discount Store- store that carries a limited section of items at low prices (i.e. Beverly Hills Boutique or TJMaxx)

Priority Pyramid

Ask Cedric

Examine before you buy

Learn as much as you can about the product before you buy

Inspect it. Make sure it is in good shape

Look at the price tag. Can you afford this? Is the product worth it?

Consider the brand, Is it one that you are familiar with?

Read the product label because it gives you useful facts about the product

A warranty is a guarantee that product will work for a certain length of time

Understanding Understanding InfluencesInfluences

• Environment- in which you live makes certain purchases necessary

• Job- affects what you buy

• Income -affects your spending

• Your interests or hobbies• Peers • Habit• Advertising

Exit Slip

Complete 2nd Priority Pyramid- explain reasoning for looking different from 1st one

What are 5 factors when making consumer decisions?

Give an example of how each factor may influence a consumer’s decision.

Have student pick a product of their choice and write down factors that would influence the supply, demand, surplus or shortage of a product. Use as an exit card.

Identify what you will buy & Identify what you will buy & Gather InfoGather Info

Make decisions based on your wants & needsMake decisions based on your wants & needs Ask yourself ?’s such as What is important to Ask yourself ?’s such as What is important to

you?, Can I afford this and still have $ left over you?, Can I afford this and still have $ left over for other things I need?for other things I need?

Become well informed about the products you Become well informed about the products you decide you want or needdecide you want or need

People can tell if they like the product and if it People can tell if they like the product and if it has given them problemshas given them problems

Techniques Used in BuyingTechniques Used in Buying

Don’t Don’t Impulse Buy-Impulse Buy- make an unplanned make an unplanned purchase on the spur of the momentpurchase on the spur of the moment

People can tell if they like the product and if it has People can tell if they like the product and if it has given them problems: Don’t be given them problems: Don’t be Peer PressuredPeer Pressured

Advertising Techniques Advertising Techniques will be used to catch your will be used to catch your attentionattention– Types of Advertisements:Types of Advertisements:

Information Ads- ads that describe the features of a product or Information Ads- ads that describe the features of a product or service and give facts about its price and quality service and give facts about its price and quality

Image Ads- ads that connect a product or service to a lifestyle that Image Ads- ads that connect a product or service to a lifestyle that consumers would like to haveconsumers would like to have

Techniques Used in BuyingTechniques Used in Buying

Media MessagesMedia Messages– Print Media- newspaper and magazinesPrint Media- newspaper and magazines

– Electronic Media- radio, TV, InternetElectronic Media- radio, TV, Internet

– Direct Mail- mail order catalogs, store Direct Mail- mail order catalogs, store circulars, coupons circulars, coupons

Facts and FiguresFacts and Figures

Statistics are used to prove the Statistics are used to prove the superiority of the productsuperiority of the product

Example: Cereal containing 9 Example: Cereal containing 9 essential vitamins essential vitamins

Example:100% OrganicExample:100% Organic Example: How fast a car can get from Example: How fast a car can get from

0 to 100 miles per hour0 to 100 miles per hour

Glittering GeneralitiesGlittering Generalities

The product’s slogan is so attractive The product’s slogan is so attractive that the audience loses sight or that the audience loses sight or doesn’t see its true meaning. doesn’t see its true meaning.

Uses appealing words and images to Uses appealing words and images to sell.sell.

Jingles/ SlogansJingles/ Slogans• Jingles and slogans are created to be remembered and to sell products.

• List of Slogans and Companies• "Do the Dew" -- Mountain Dew• "Have it your way" -- Burger King• "Need a moment" -- Twix• "Zoom, zoom" -- Mazda• "I'm loving it" -- McDonald's• "Eat fresh" -- Subway• "Open happiness" -- Coke• "Let's build something together" -- Home Depot• "Refresh everything or Every generation refreshes the world" -- Pepsi• "Drive one" -- Ford• "Taste the rainbow" -- Skittles• "It's way better than fast food" -- Wendy's• "A simpler way to ship" -- U.S. Postal Service• "Moving forward" -- Toyota• "It's good to play together" -- X Box

Endorsements/ TestimonialsEndorsements/ Testimonials

Promoting a product or service. An endorsement is also known as a testimonial but the word is more commonly associated with celebrities.

A celebrity endorsement is almost always a paid endorsement of the company or a certain product.

Endorsements/ TestimonialsEndorsements/ Testimonials

• Celebrity endorsements - when a product is sold by using words from famous people or an authority figure.

• If the celebrity/athlete/star uses the product, then it must be good, so I will purchase it too. 

• Examples: Proactiv, Nike, Gap, Got Milk ads, T-Mobile

Testimonial – confessions for Proactiv Solution

Emotional AppealEmotional Appeal

Type of advertising in which the copy is designed to stimulate one's emotions, rather than one's sense of the practical or impractical.

When copywriters use emotional appeal in advertising, they are attempting to appeal to the consumer's psychological, social, or emotional needs.

The copy is written to arouse fear, love, hate, greed, sexual desire, or humor, or otherwise create psychological tension that can best be resolved by purchase of the product or service.

BandwagonBandwagon

Everyone is doing it!Everyone is doing it! Join the crowd!Join the crowd!

ExamplesExamples

• A friend convinces another friend to go to a party by saying, “Everyone is going to be there! You’ll be laughed at if you don’t go, too!”

Be where the action is: Shop Be where the action is: Shop

Greenwood MallGreenwood Mall

Free Gifts/ RewardsFree Gifts/ Rewards

Receive a gift for purchasing product Receive a gift for purchasing product or a rewardor a reward

Example: Buy this laptop and receive Example: Buy this laptop and receive $150 rebate $150 rebate

Deciding When to Buy

Timing your purchase-Planning to make when it is best for you to do so

Save your money Refer to local

advertisements

Responsibilities of a Good Consumer

Consumer Responsibilities

Be fair and honest with the stores & businesses as you expect them to be with you

Take care of merchandise that you handle

Read and follow instructions on products- behave responsibly

Read expiration dates Do not shoplift- take without

paying Make sure the price is registered

correctly & you get any change that is due you.

However, if you get too much change, be honest, give it back

Know About Refunds and Exchanges Know the store’s policy- each store is different

Keep proof of purchase- receipt

Determine if you are entitled to a refund- does it say “As Is” or “All Sales Final” or fall under health codes (i.e. bathing suit)

Be ready to process claim- fill out paperwork on it

Your Rights as a Consumer The Right to Safety- products must not cause harm or injury

The Right to be Informed- No false/ misleading advertisements (laws protect you)

The Right to Choose- Right to choose from a variety of products, to fit your needs

The Right to be Heard- Can speak about a product if you are not satisfied with it

The Right to Redress- action taken to correct a wrong

The Right to Consumer Education- entitled to learn about your rights

Handling Customer Complaints

Check your warranty Have your reason Clearly state to customer service what the

problem is and how you would like it to be corrected

Most Businesses want to keep their customers The Better Business Bureau is a private agency

that works to improve local business practices Another option-return to the company by mail Small claims court –take complaint before a judge

and the store must respond

Managing Your Money

Know where your money is coming from

Determine how much you will have

Look at how much you are spending

Evaluate what you are buying

Income- amount of money you earn or receive regularly

Expenses- the money you spend to buy goods and services

Managing Your Money

Keep track of your money– Fixed expenses: expenses that are always the

same (i.e. weekly karate lesson)– Flexible expenses: expenses that vary (i.e.

concert ticket)

Setting Up a Budget– Plan for using your money

Start a Savings Plan– Put money aside for unexpected needs/ future– 10% of weekly income

Managing Money

Complete section out of book or career book

Life Skills- Expense Record

Make a chart

Record expenses for one week

Write an evaluation of your expenses for the week

How can you improve your spending habits?

How can this help you make a budget?