Making Effective Purchase Decisions

In the next few years – You will start to work and make income – You will have money to spend – You will make some dumb purchasing decisions – You will make some smart purchasing decisions

Making Effective Purchase Decisions You can make a couple different purchases Impulse purchases – Small cost, no real thought goes into them, not a life changing purchase by any means Involved purchases – Usually on higher ticket items – Should involve a well though through process

The Buying Process 1)Money Available 2)Cost 3)Buyer Behaviour 4)Quality/Features 5)Comparison Shopping 6)Service 7)Warrantees and Guarentees

Money Available You have to assess how much money you have to spend Not just the amount of money in your bank account – but the wise shopper has a budget – Money allocated to purchases that aren’t bills, rent, etc

Cost For the item you are buying you should do a little research to see the cost of the item you want to purchase If the product varies – you may have to look at the range of prices – Example: TV’s range from $100 - $3000 If the benefit of owning the product/service outweighs the cost of it – you usually purchase

Buyer Behaviour Each person is different – as such, so are their purchasing decisions Advertising may influence what you see as a necessary purchase Friends may sway your decision on what you should purchase Do you buy your clothes to please yourself or do you buy them to try and impress others?

Quality/ Features All products have various features and a perceived quality As a purchaser – you have to weigh how important these things are to you Example: Buying a fridge – What factors might make fridges differ in price?

Comparison Shopping Probably the most important part of the process Comparing the products and services available to you in terms of features, quality and price All of the products have their pros/cons You have to decide which criteria are most important to you

CriteriaFridge A Fridge BFridge C Environm entally Sound NoYes Price$2000$1500$2500 Ice Dispenser No Yes Large Freezer YesNoYes

Service What extra things do I get with the purchase? What if it breaks down? Service includes things like: – Delivery – On the spot maintenance – A 24 hour help line – Expert Advice, etc

Warranties and Guarantees Warranty – provides after-sales service on a product for a specified period of time – Gives the buyer a safe feeling when they walk out of the store – People will often pay for just that – knowing the chances of the product breaking down are slim Guarantee – a promise that the good or service is of specified quality or durability – If there is anything wrong with your Ipod – in most cases apple will give you a new one

Today.... Get into groups of 3-4 Write me a story!!! You will all be given an item – take me through someone's process and all the things they must look at before making their purchase You must include every step of the buying process we talked about today Be creative – you must write this in story format