1. Becoming a Smart Consumer
Consumer Ed. – Ch. 3
Becoming a Smart Consumer

2. Your Role as a Consumer Consumer Consumerism
Person or group that buys or uses goods and services to satisfy personal needs and/or wants
Consumerism
Educating buyers about their purchases to make them demand better and safe products

3. Where Does the $ Go? Taxes/Social Security Housing/Household 17% 30%
Savings 3% 5%
14%
Entertainment
Food 5% 7%
19%
Medical
Clothing
Transportation

5. Income Disposal Income – money left after taxes
Discretionary Income – money left after necessities to spend on luxuries
Disposable Income
Discretionary Income
Expenses
After Taxes
After Bills
$ Left

6. What if………….. You receive a pay raise, how will each be affected?
You cancel your cell phone?
Leave a full time job for a part time job?
You get married?
Disposable
Expenses
Discretionary

7. Ability to consume depends on…
Education – High school graduate vs. bachelors degree vs. masters degree
Occupation – CEO of a major company vs.
a small town plumber
Experience – First year worker vs. 30 years of work
Health – Disability? Frequent truancy?
Location – Inflation based on where you live!

8. Education Makes a Difference!
Males
Females
High School
$28,307
$16,906
Some College
$32,641
$19,856
Bachelor’s
$50,056
$30,119
Advanced
$78,032
$42,744

9. Buying is Based Upon 3 Things Consumers Should ask Themselves:
Do I really need this item?
Is the value/worth of this item worth the amount of time and effort I put into raising the necessary funds to pay for it?
Is there a better use of my income elsewhere?

10. Consumer Decision Making
Do I really NEED this item? Or do I really WANT this item?
Opportunity Cost – the cost, or sacrifice, you made by choosing your item (difference between your item and the highest one below it)
Rational Choice – Making a smart consumer decision based upon opportunity cost; no correct choice, based on perceived value

11. Buying Principle or Strategies
Gathering Information
Analyzing Advertisement
Does the ad appeal to just my emotions?
What are the features of the product?
Are their any hidden cost?

12. Gathering Information
Comparison Shopping!
Test out products
Discuss brands & models w/ different sellers
How Much Time Should You Spend?
Time gathering information shouldn’t exceed perceived value of the product
Use the Internet!

13. Gathering Information
Competitive Advertisement
Ads that try to persuade their product over the competitions.
Ex: Nike vs. Adidas
Informative Advertisement
Ads that are strictly informative. Takes little effort on the part of the consumer.

14. Use Advertising Wisely
Competitive Advertising – attempts to persuade their product is superior
Informative Advertising – gives information about a product
Deceptive Advertising – false or misleading info about a product
Bait and Switch
Puffing

15. Bait and Switch Exposed by News Team!

16. YouTube - State Issues Warning To 'Deceptive' Dealership
Deceptive Sales Practices Uncovered!
YouTube - State Issues Warning To 'Deceptive' Dealership

17. Comparison Shopping Where do you buy at?
Newspapers, Phone calls, Internet, Visit stores, etc.
Negotiate!!!
Warranties – promise by seller to repair or replace a product if faulty or damaged w/in a certain period of time

18. Comparison Shopping (cont.)
Brand Name – word, picture, or logo that distinguishes it from other products
Sold nationally or internationally;
Backed by a major business
Generic – difficult to determine the producer; sold in large quantities, cheaper

19. Consumerism Buyers need to be educated Consumer Rights – JFK, 1962
Right to be safe
Right to be informed
Right to choose
Right to be heard
Right to redress (added by Nixon)

20. Faulty Product? No Problem!
Report the problem immediately!
State the problem & propose a solution
Include all important details on your case
Describe action you took to solve the problem
Keep accurate records – Make Copies!
Give time to solve problem before reporting it
Type letter of complaint or !
Keep Cool!
Ethical Behavior – respect rights of others