WHY DID I BUY THAT?Understanding consumer decisions

“I thought I wanted it, but I never use it.”Or “It looked really cool.”Does this sound familiar?

2LifeSmarts is a program of the National Consumers League

“Money can’t buy me love”

Purchasing goods and services is complex human behavior.

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Behavioral Economics4

The field of behavioral economics tells us–Humans seem to be only partially rational.We sometimes make decisions that are not inour best interest.

ir.ra.tion.al -adjective, without the faculty of reason; deprived of reason

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Recognizing the human capacity to be irrational at times is a helpful piece of information when examining choices.

Dictionary.com

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Needs and Wants

We make consumer decisions based onneeds and wants that we can sort into threecategories:

Physiological Psychological Social

Physiological Needs7

Some of our basic biological needs are food, water and shelter from the elements.

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Psychological Needs

Our self concept,values, beliefs andattitudes all effectour decisions.

Social Needs9

Culture, family, social class and reference groups all influence consumer behavior, too.

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What is a reference group?

A reference group is one source of ourpersonal standards. Individuals look toreference groups to help them define whothey are or who they want to be.

Common decision making strategies11

Analyzing decision making strategies canhelp you make good decisions or evaluatewhy a particular decision was unsatisfactory.

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Spontaneity

Not dangerous if it isan occasional icecream, but if yourincome flows out andyou continuouslywonder where your paycheck went, youare in trouble.

“I just feel like it.”

Compliance13

An appropriatestrategy when youare sent to the grocerystore with a list, butthink twice if you arebuying the latestelectronic gadget justbecause your friendshave one.

“I’ll just go along.”

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Procrastination

This could be positiveif you delay a decisionto complete moreresearch or to ask foradvice, but can benegative when you failto take responsibilityfor choices you needto make.

“I’ll decide later.” or

“I just can’t decide.”

Agonizing15

You may never knowas much as theexperts, but you arethe expert on yourneeds and wants.

“I just can’t decide what I want.”

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Desire

You can want a resultso much that youignore risk to achievea desirable outcome.

“Just go for it!”

Avoidance17

You should use cautionin making decisionsthat have seriousconsequences, but, as aregular decision makingstrategy, avoidanceseldom producessatisfying results.

“Well, I could do worse.”

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Intention

Intent is important whenit helps you reach agoal, but it can looklike stubbornness if youare not thinking aboutconsequences.

“This is what I want, it is the right decision for me.”

Security19

When you avoid riskyou use the securitystrategy, but there aretimes when risk isdesirable.

“This is the safest option I have.”

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Synthesis

When you combine theelements of severaldecision makingstrategies you havesynthesis.

“I believe this is the best decision and I have confidence I can make it work.”

Ethics and Consumer Decisions21

Consumer decisions are also influenced bysocial responsibility – the welfare of society.

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Avoiding excessive consumption

Buying clothes at the local thriftshop, adhering to the slow food movement, and using the library are all decisions that reduce consumption.

“Money is just the symbol we use to facilitate the gathering of memories and experiences.”

— Stuart Wilde

Conserving Natural Resources23

Becoming aware ofyour carbon footprint,driving a hybrid car,and recycling areexamples ofconservation strategiesthat influencepurchasing decisions.

Reduce, reuse & recycle.

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Protecting the Environment

Teenagers are moreaware of the need tochoose to recycle batteriesand electronics because oftheir harmful effects inlandfills. They have grownup with environmentalawareness.

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“Thinking well is wise; planning well, wise; but doing well is the wisest and best of all.”

— Unknown

What are the influences on the consumer decisions you make?

Consumer Decision Making

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LifeSmarts

•An educational program teaching teens and tweens important real-life knowledge•A competition – students compete online and in-person •A teaching toolbox. Check out our resources•An opportunity for students to gain leadership skills, and fulfill community service requirements•A chance to develop strong partnerships with national groups such as FBLA and FCCLA

Learn it. Live it.

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