Date post: | 02-Jan-2016 |
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Your Role as a Consumer
Disposable and Discretionary Income Consumer- anyone who buys or uses
good or services– Depend on the available income
Income can be disposable and discretionary– Disposable- money left over after
taxes- use to buy necessity– Discretionary- leftover income can be
saved or spent– Disposable income – Expenses =
Discretionary Income Influences on consumption: Education,
Occupation, Experience, Health, Location, Wages
Requires constant decision making
Disposable and Discretionary Income
Figure 3.1 Consumer Spending
The circle graph shows how Americans spend their income.
Disposable and Discretionary Income
Figure 3.3 Earning Power
The number of years you are educated has a direct effect on your income.
Continued on next slide.
Decision Making Decide what to buy or not to buy How much do you really think about it? Parts
–Scarce Resources- time and income
–Opportunity cost- next best alternative
–Rational Choice- what is the alternative that has the greatest perceived value?
Goal- best quality at the lowest price Not all choices require this process
– Some are simple and easy to make
Gathering Information Need information about a product Some information is common
knowledge and the choice is instant Information can be costly because of
the time factor– It is worthwhile to collect the
information– Get accurate information- life-long
skill– Internet is a great research tool
More you shop, the more knowledge you gain
Sharpens your skills
Using Advertising Wisely
Everywhere (TV, Radio, Internet, Posters, etc.)
Ads that tries to get you to buy things are called competitive advertising
Informative advertising gives you information about the product
Learn- existence, price, quality and special features without spending much time
Bait and switch- attracting consumers with one deal and the ‘switching’ to another product once they reach the store
Deceptive advertising is legal– Use more examples of deceptive
advertising
Continued on next slide.
Comparison Shopping
When you look at different stores and products is called comparison shopping
Heaviest influence is price Warranty- promise to repair or
replace a product– Different types- limited, full, and
merchant ability Brand names vs. generic products
Consumer Rights Consumerism- movement to educate
buyers Businesses are responsible for product
safety and accurate advertising 1962 President JFK stated these
Consumer Rights:– Right to safety– Right to be informed– Right to choose– Right to be heard
Later added by President Nixon:– Right to redress
Help for Consumers People have the right to complain
to producers and sellers (can sue) Better Business Bureaus-
give information to customers and help settle disagreements
Consumer Responsibilities
Consumer must start the process– Report the problem immediately– State the problem and suggest
solution– Include details (receipts)– Describes Action– Keep Accurate records– Allow reasonable time– Contact manufacture in writing
(keep copies)– Stay calm, be patient
Ethical Behavior- moral behavior with respect to the rights of producers and sellers (no false claims)
Continued on next slide.