Consumer Decisions in the Economy Chapter 1, 1.4 and 1.5.

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Presentation transcript:

Consumer Decisions in the Economy Chapter 1, 1.4 and 1.5

What is a consumer anyway? A person who buys and uses goods and services (in other words, you and me!) what are some problems and concerns people have as consumers?

About consumers Businesses wouldn’t be around without them standard of living not always based on how much money you make have a responsibility to make informed decisions

A thought for all you consumers if standard of living isn’t based on pay, what is it based on? why is it important to be an informed consumer?? where can you go to get help with or information about consumer problems???

Consumer, inform thyself There are five types of organizations who advise and test: product-testing media sources government agencies business sources personal contacts

PRODUCT-TESTING ORGANIZATION Test products and services paid by manufacturers to test safety may also develop and update performance standards Underwriter Laboratories, Inc. Association of Home Appliance Manufacturers (AHAM) Factory Mutual Approved Mark American Gas Association

Media Sources (print, broadcast & internet) Goal is to report scientific, technical, educational information about products and services. information is objective can be nonprofit Consumer Reports Good Housekeeping may also find specialty magazines for certain products such as cars, travel or financial investments (ie. Money, Wall Street Journal)

Media Sources con’td Encompasses radio and t.v. goal is to inform public about safety, care and use of products some are shows designed to help consumer issues

Government Agencies United States Department of Agriculture (USDA) Federal Trade Commission (FTC) Food and Drug Administration (FDA) Consumer Product Safety Commission (CPSC) National Highway Traffic Safety Commission (NHTSC) All make information available to consumers

BUSINESS SOURCES Advertising Product labels Customer service departments Better Business Bureau

ADVERTISING Most popular source Tell you what it is, how it’s made, what it will do Can be word-of-mouth (most effective)

PRODUCT LABELS Tell you what it is, size, care of, when and where it was made

CUSTOMER SERVICE DEPARTMENT Provide booklets of info May help improve buying skills Answer questions on potential purchases and returns

BETTER BUSINESS BUREAU Supported by member businesses Self regulate ethical practices in advertising and selling products Goal is to develop a more informed consumer Provides information only, no recommendations

PERSONAL CONTACTS The most often used source of all? Word of mouth.

Remember the decision making process? SPECIFY. Identify need or wants. SEARCH. Gather information and know choices available. SIFT. Determine desired satisfaction and evaluate alternatives (how much are you willing to pay? Quality? Will you wait for it to go on sale?) SELECT. Make your choice. STUDY. Evaluate the results of your choice.

Comparison Shopping Look at price, quality and services of one product as they compare to another product.

Comparison Shopping cont’d Always look at unit price as it is the truest measure of comparison Ex. 8oz./$ oz./$0.65

Cont’d Per unit, each item is: $0.0625/oz.$0.0542/oz These are actually the cheaper chips!

Comparing Quality Consider which item will last longer Will it cost you more in the long run to buy 2 of the lesser quality item?

Comparing Services Can you think of some differences between the services these 2 stores offer?

Compare Sales There are 3 types: Promotional Clearance Special Purchase

Compare Brands National brands can be counted on for uniform quality Store brands (aka private label brands) are often found at a lower cost Generic brands (which are actually unbranded) are not advertised or have pretty packaging and are thus often the least expensive choice.

Things to remember Take your time Time your purchases Avoid being impulsive

Where to shop? Traditional retailers (ie. department stores, discount stores, specialty stores, supermarket, convenience stores) Contemporary retailers (specialty superstores like Home Depot, or superstore like Target Homeland, or Costco) Non store shopping (go online! Mail order and even vending machines count as non store shopping).