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Chapter 15 Consumers in the Global Economy Business Essentials Mrs. Wilson.

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Presentation on theme: "Chapter 15 Consumers in the Global Economy Business Essentials Mrs. Wilson."— Presentation transcript:

1 Chapter 15 Consumers in the Global Economy Business Essentials Mrs. Wilson

2 BEFORE ACTIVITY National Brand vs. Generic Brand Taste Test!National Brand vs. Generic Brand Taste Test! Can you taste the difference??Can you taste the difference?? Lets taste your test buds!Lets taste your test buds!

3 15-1 CONSUMER BUYING DECISIONS Consumer information sources, wise buying actions, and shopping locations are the basis of this lesson. Consumer information sources, wise buying actions, and shopping locations are the basis of this lesson.

4 Consumer Information Sources Consumers have the power to decide to buy or not to buyConsumers have the power to decide to buy or not to buy Remember – businesses must serve the needs of consumersRemember – businesses must serve the needs of consumers Several information sources are available to help consumers with their buying decisionsSeveral information sources are available to help consumers with their buying decisions

5 Consumer Information Sources Major sources of consumer information:Major sources of consumer information: 1.Product testing organizations (p372) Underwriters Laboratories, AHAMUnderwriters Laboratories, AHAM 2.Media sources Print publishers, broadcast organizations, InternetPrint publishers, broadcast organizations, Internet 3.Government agencies USDA, FTC, FDA, CPSCUSDA, FTC, FDA, CPSC 4.Business sources Advertising, product labels, customer service departments, Better Business Bureau (BBB)Advertising, product labels, customer service departments, Better Business Bureau (BBB) 5.Personal contacts Word of mouthWord of mouth

6 Wise Buying Strategies As a consumer, you should follow the decision- making steps when making a purchase:As a consumer, you should follow the decision- making steps when making a purchase: 1.Identify your needs or wants (p375) 2.Know the choices available 3.Determine your desired satisfaction 4.Evaluate alternatives 5.Make the decisions Good buying skills will make you a better consumerGood buying skills will make you a better consumer You can get greater value for your money each time you make a purchaseYou can get greater value for your money each time you make a purchase

7 Wise Buying Strategies Smart consumers are comparison shoppersSmart consumers are comparison shoppers They compare price, quality, services, and brandsThey compare price, quality, services, and brands Unit price – a price per unit of measureUnit price – a price per unit of measure If you need to calculate a unit price, divide the price of the item by the number of units per measureIf you need to calculate a unit price, divide the price of the item by the number of units per measure Ex) a 16-ounce bag of Golden Frozen Corn costs $1.26 and an 8-ounce box of Yellow Perfection Corn sells for $0.69 per box. What is the better buy for the dollar?Ex) a 16-ounce bag of Golden Frozen Corn costs $1.26 and an 8-ounce box of Yellow Perfection Corn sells for $0.69 per box. What is the better buy for the dollar?

8 Wise Buying Strategies Prices of products can vary greatlyPrices of products can vary greatly The cost of the same items often differs from store to store and in different geographic regionsThe cost of the same items often differs from store to store and in different geographic regions When comparison shopping, be sure to:When comparison shopping, be sure to: Compare quality (p376)Compare quality (p376) Compare serviceCompare service Compare salesCompare sales Compare brandsCompare brands

9 Wise Buying Strategies Brand – a name given to a product or service to distinguish it from other similar and competitive itemsBrand – a name given to a product or service to distinguish it from other similar and competitive items The company that makes the product or service usually create a brand nameThe company that makes the product or service usually create a brand name Brand names are designed to help build customer loyaltyBrand names are designed to help build customer loyalty

10 Wise Buying Strategies National brands are advertised all over the country.National brands are advertised all over the country. They are sold in almost every communityThey are sold in almost every community Well known brand names include Kelloggs, Jell-O, The Gap, and LOrealWell known brand names include Kelloggs, Jell-O, The Gap, and LOreal Recognizing national brand names allows you to expect uniform qualityRecognizing national brand names allows you to expect uniform quality

11 Wise Buying Strategies Some stores have their own brand names, called store brands or private label brandsSome stores have their own brand names, called store brands or private label brands Ex) Great Value at WalmartEx) Great Value at Walmart Store brands are usually sold at a lower cost than national brandsStore brands are usually sold at a lower cost than national brands Stores may also carry unbranded items at reduced prices, called generic productsStores may also carry unbranded items at reduced prices, called generic products These are less expensive because they do not require advertising and fancy packagingThese are less expensive because they do not require advertising and fancy packaging

12 Wise Buying Strategies Skillful consumers are efficient in their shopping activitiesSkillful consumers are efficient in their shopping activities They save time, energy, and money by planningThey save time, energy, and money by planning Wise buying tips:Wise buying tips: Take your time (p377)Take your time (p377) Time your purchasesTime your purchases Avoid being impulsiveAvoid being impulsive Impulse buying – buying too quickly without much thoughtImpulse buying – buying too quickly without much thought

13 Shopping Locations When deciding where to buy, you have many choicesWhen deciding where to buy, you have many choices The types of stores and other buying locations expand every day because of competition and technologyThe types of stores and other buying locations expand every day because of competition and technology Shopping locations:Shopping locations: Traditional retailers (p378)Traditional retailers (p378) Contemporary retailersContemporary retailers Non-store shoppingNon-store shopping

14 15-2 CONSUMER RIGHTS & RESPONSIBILITIES This lesson covers various rights and corresponding responsibilities of consumers. This lesson covers various rights and corresponding responsibilities of consumers.

15 The Consumer Movement In the past, some businesses were viewed as often trying to take advantage of consumersIn the past, some businesses were viewed as often trying to take advantage of consumers Ex) false claims, high prices, unsafe productsEx) false claims, high prices, unsafe products Consumer movement - banding together of consumers to demand fair treatment from businessesConsumer movement - banding together of consumers to demand fair treatment from businesses In 1962, President John F. Kennedy presented the first draft of the Consumer Bill RightsIn 1962, President John F. Kennedy presented the first draft of the Consumer Bill Rights

16 The Consumer Movement Today, there are 7 rights of the consumer:Today, there are 7 rights of the consumer: 1.The right to be informed 2.The right to safety 3.The right to choose 4.The right to be heard 5.The right to a remedy 6.The right to consumer education 7.The right to service

17 The Consumer Movement Fraud – occurs when consumers are given false information in an effort to make saleFraud – occurs when consumers are given false information in an effort to make sale Guarantee – a promise by the manufacturer or dealer, usually in writing, that a product is of a certain qualityGuarantee – a promise by the manufacturer or dealer, usually in writing, that a product is of a certain quality Express warranty – made orally or in writing and promises a specific quality of performanceExpress warranty – made orally or in writing and promises a specific quality of performance Implied warranty – imposed by law and is understood to apply even though it has not been statedImplied warranty – imposed by law and is understood to apply even though it has not been stated

18 Your Consumer Responsibilities Some consumers try to take advantage of businessesSome consumers try to take advantage of businesses Consumers do have responsibilities in business relationships:Consumers do have responsibilities in business relationships: Be honest (p384)Be honest (p384) Be reasonableBe reasonable Be activeBe active Be informedBe informed Be involvedBe involved

19 Your Consumer Responsibilities

20 15-3 CONSUMER PROTECTION ACTIONS Various actions to resolve consumer problems along with legal alternatives are the focus on this lesson. Various actions to resolve consumer problems along with legal alternatives are the focus on this lesson.

21 Common Consumer Problems Consumers hope that their purchases will always result in a satisfactory transactionConsumers hope that their purchases will always result in a satisfactory transaction Still, problems sometimes arise (p387)Still, problems sometimes arise (p387)

22 Common Consumer Problems Various consumer agencies report that the main sources of consumer complaints involve:Various consumer agencies report that the main sources of consumer complaints involve: Motor vehicle purchases, repairsMotor vehicle purchases, repairs Debt harassmentDebt harassment Identity theft and credit card fraudIdentity theft and credit card fraud Credit repair scamsCredit repair scams Telemarketing, catalog, and magazine salesTelemarketing, catalog, and magazine sales Online purchasesOnline purchases Prizes, sweepstakes, and phone lottery promotionsPrizes, sweepstakes, and phone lottery promotions Work-at-home and start-your-own business opportunitiesWork-at-home and start-your-own business opportunities Travel and vacation promotionsTravel and vacation promotions Health and diet gimmicksHealth and diet gimmicks

23 Common Consumer Problems Consumer fraud can be discovered in media ads, in the mail, or even on city street cornersConsumer fraud can be discovered in media ads, in the mail, or even on city street corners The Internet has become the number one source of fraudulent offersThe Internet has become the number one source of fraudulent offers With increasing popularity of e-commerce comes the concern for consumer rightsWith increasing popularity of e-commerce comes the concern for consumer rights

24 The Complaint Process While no one wants consumer problems, they do occurWhile no one wants consumer problems, they do occur Consumer protection experts suggest 4 steps when trying to resolve a purchasing problem:Consumer protection experts suggest 4 steps when trying to resolve a purchasing problem: 1.Contact the place of purchase (p389) Most consumer complaints are settled by returning to the place of purchaseMost consumer complaints are settled by returning to the place of purchase 2.Contact the company headquarters 3.Involve a consumer agency 4.Take legal action

25 Legal Actions for Consumers If contacting the business or consumer agency does not resolve the problem, various legal actions may be considered:If contacting the business or consumer agency does not resolve the problem, various legal actions may be considered: 3 rd party settlements (p390)3 rd party settlements (p390) Mediation – involves the use of a 3 rd party who tries to resolve the complaint between consumer and businessMediation – involves the use of a 3 rd party who tries to resolve the complaint between consumer and business Arbitration – results in a decision that is legally bindingArbitration – results in a decision that is legally binding Class action suits – legal action by 1 party on behalf of a group of people who all have the same grievanceClass action suits – legal action by 1 party on behalf of a group of people who all have the same grievance Small claims court – court system that exists to resolve cases involving small amountsSmall claims court – court system that exists to resolve cases involving small amounts Using a lawyerUsing a lawyer

26 AFTER ACTIVITY CheckpointCheckpoint What actions can be taken to be an involved consumer?What actions can be taken to be an involved consumer?


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