Chapter 22 Making Consumer Decisions

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1 Chapter 22 Making Consumer Decisions Unit 8 Buying Goods and Services Date

2 Section 22.1 Consumer Choices Section Objectives Identify four decisions that consumers make when they buy goods and services. Compare brand-name and generic products. Identify choices that consumers must make about when to buy. List several choices that consumers have when selecting a store to make purchases. Describe tools that consumers can use to compare prices for goods and services.

3 Buying Goods and Services A consumer (a person who selects, purchases, uses, and disposes of goods and services) is faced with many buying options. If you had unlimited money, you could buy whatever you wanted, but sadly no one has unlimited funds. They have to budget their money to satisfy their wants and needs. A budget is a plan that specifies how resources will be allocated or spent during a particular period.

4 Deciding What to Buy Decide what is a top priority for them. Choose between brand-name or generic product. Brand name is the trade name for a product or service produced by a particular company (Apple, Coca-cola, etc) Generic products are plainly labeled, unadvertised products that are sold at lower prices than brand-name goods. Despite the difference in cost, generic products may be equal in quality to some brand-name products.

5 Deciding When to Buy Prices change during different times of the year. Postponing or planning a purchase can sometimes save money. Stores often run special promotions during and after holidays, just before a school year begins, and at the end of a season. There are more choices when products are first available hut you may find better prices if you wait until the items go on sale.

6 Deciding Where to Buy Three factors affects a consumer s decision on where to shop: the kinds of goods and services sold, prices, and convenience. Department Stores- offer brands and customer service, prices might be higher, sell a variety of products. Discount Stores- sell a variety of goods, offer lower prices, offer fewer services and keep large quantities of goods. Off-price and Outlet Stores- carry well-known brand names at bargain prices, offer big discounts because the items may have flaws, be out of season, or may be discontinued merchandise. Limited-Line Retailers- sell an assortment of goods in one product line or a few related lines, variety of items and high levels of service and expertise.

7 Deciding Where to Buy Superstores- like supermarkets (grocery stores) but also sell items such as books, hardware, sporting goods, and clothing as well as groceries. Convenience Stores- provide easy access to products that consumers buy as necessities or impulse items. Warehouse Stores- typically the size of a football field, carry a huge selection of food and nonfood items at low prices in bulk quantities, some require customers to become members. Shopping at Home- through TV channels, catalogs, or the Internet.

8 Deciding How Much to Pay Comparison shopping is comparing the prices and the characteristics of competing brands or stores. Most important to do so for major purchases. Most expensive does not equal best product.

9 Section 22.2 How to Be a Smart Consumer Section Objective Identify types of information that can be helpful to a consumer in making wise shopping.

10 Preparing to Shop Study Advertisements most ads are one of two types: rational advertising that attempts to convince consumers with facts and information or emotional advertising that appeals to people s feelings. Read Consumer Publications Consumer Reports and Consumers Research Magazine give detailed information about goods that been tested and rated. Consumer magazines examine and rate products ranging from bottled drinks and travel agencies. Shop at Sales Promotional sale is one that offers a special buy on a new product or a product that is in season. Clearance sale is a sale to clear out goods that are going out of season or are no longer profitable. Loss Leaders are advertised products that sell at a loss to bring customers into a store.

11 Preparing to Shop Use Shopping Lists Impulse buying is the act of making unplanned purchases. Can ruin a budget! Use a shopping list to keep you from making unnecessary return trips because you forgot something. Resist Pressure and Gimmicks Salespeople use high pressure tactics and are very persuasive. Gimmicks are meant to grab a consumer s attention. Always examine deals that seem too good to be true. Read Labels and Warranties Read the label- you might find information on there that will lead you to not buying the product. Warranty is a written guarantee from the manufacturer or distributor that states the conditions under which the product can be returned, replaced, or repaired. Two types: Implied warranties are unwritten guarantees that cover certain aspects of a product or its use. Express warranties, usually written, are either full (state the seller will replace or replace or refund) or limited (only cover certain parts of a product).

Making Consumer Decisions. Chapter 22

Making Consumer Decisions. Chapter 22 Making Consumer Decisions Chapter 22 In your opinion, what are the pros and cons of brand name and generic products? Brand Name word or name on the product that distinguishes it from competitors. Usually