Your Role as a Consumer by 7Vl7vc

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									    Consumption, Income, & Decision Making

 Consumer – a person or group that buys
  or uses goods and services to satisfy
  personal needs and wants
 Role as a consumer depends on your
  ability to consume which depends on
  income.
 Disposable Income – income remaining for
  a person to spend or save after all taxes
  have been paid
 Discretionary Income – money income a
  person has left to spend on extras after
  necessities have been bought
 Consumption, Income, & Decision Making

 Earning   power dependent on:
  – Education
  – Occupation
  – Experience
  – Health
  – Location
    Consumption, Income, & Decision Making

   Decision Making as a Consumer
     – First decision a consumer must make is
       whether to buy an item or not.
     – Figure 3.4 on page 63 is important!
     – Scarce resources – income & time (comparison
       shopping)
     – Opportunity cost – Will you purchase a high or
       low quality product?
     – Rational Choice – choosing the alternative that
       has the greatest value from among products
       that are comparable in quality
 Buying Principles or Strategies
 Gathering   Information
  – How much information about a product
    or service do you need? Gathering
    information involves time. Time and
    effort should not be greater than the
    value received.
  – Learn as much about a product or
    service as possible (Internet &
    consumer reports)
Buying Principles or Strategies
   Using Advertising Wisely
    – Competitive Advertising – advertising that
      attempts to persuade consumers that a
      product is different from and superior to any
      other. Try to take customers from competitors
      or keep customers from competitors.
    – Informative Advertising – advertising that
      benefits consumers by giving information
      about a product (price, quality or special
      features)
    – Bait and Switch – ad that attracts consumers
      with a low-priced product, then tries to sell
      them a higher-priced product.
         Comparison Shopping
   Comparison Shopping – getting information on
    the types and prices of products available from
    different stores and companies (newspapers,
    internet, telephone calls or visit stores)
   Warranty – promise made by a manufacturer or a
    seller to repair or replace a product within a
    certain time period if it is found to be faulty
   Brand Name – word, picture, or logo on a product
    that helps consumers distinguish it from similar
    products
   Generic Brand – general name for a product
    rather than a specific brand name given by the
    manufacturer
               Consumerism
 Consumerism – movement to educate
  buyers about the purchases they make
  and to demand better and safer products
  from manufacturers
 Consumer Rights
    – 1.     Right to Safety
    – 2.     Right to be Informed
    – 3.     Right to Choose – need markets to be
      competitive
    – 4.     Right to be Heard
    – 5.     Right to Redress – obtain money or
      goods for financial or physical damages
                  Consumerism
   Consumer Responsibilities
    – 1.      Report the problem immediately
    – 2.      State the problem and suggest a solution
    – 3.      Include details such as receipts, guarantees and
      contracts
    – 4.      Describe what you may have done to correct
      the problem
    – 5.      Keep a record of efforts to solve the problem
    – 6.      Allow reasonable time to solve the problem
    – 7.      Contact manufacturer in writing if necessary
      and keep a copy
    – 8.      Keep cool

    Ethical behavior – acting in accordance with moral and
      ethical convictions about right and wrong
               Consumerism
 Help   for Consumers
  – Complain to store manager or write to
    the manufacturer
  – Small claims court
  – Hire a lawyer
  – Private and government agencies
     BetterBusiness Bureau
     Agencies on page 74
Your Role as a
  Consumer
   Chapter 3

								
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