1. Chapter 3: Your Role as a Consumer

2. Consumers A Consumer is an person or group that buys or uses goods and services to satisfy personal needs and wants Consumers spend most of their money on food and housing. (About 37% of income) Spend about 18% on taxes and Social Security

3. 2 Types of Income Disposable Income – money a person has left after taxes have been paid. People spend this money on necessities: food, clothing, and housing. Discretionary Income – the money left after the necessities have been paid for People often save this or spend on entertainment

4. Buying Principles Money is scarce so consumers should get maximum value for his money and time There are 3 basic buying principles: 1. Gathering information on the product 2. Using advertising wisely 3. Getting the best deal by comparison shopping

5. Advertising 1. Competitive Advertising – this attempts to show consumers that their product is different and superior to others Example: Coke and Pepsi commercials, Apple commercials, Nike commercials, etc… 2. Informative Advertising – gives information about a product to consumers Example: car commercials These advertisements can also be competitive

6. 3. Bait and Switch Advertising – deceptive advertising that can be misleading The bait part is when the store advertises an unrealistically low-priced item When you get to the store, the item is no longer available, or the salesperson will tell you everything wrong with that good. Then he tries to switch you to another higher priced item

7. Brand Names A brand name is a word, picture, or logo on a product that helps consumers tell it from similar products of competitors Examples: