- Consumer- any person or group that buys or uses goods and services to satisfy personal needs and wants
- Disposable and Discretionary Income
- Disposable income- the money income a person has left after all taxes have been paid
- Discretionary income- money income a person has left to spend on extras after necessities have been bought.
- Decision Making as a Consumer
- First decision is whether or not to buy an item
- Follow a checklist to buy things:
- Decide how to spend the money
- Decide on the right purchase
- Decide how to use the purchase
- Scarce Resources
- Your time and money
- How much time will it take to make the decision
- How much money will it cost you once you make it
- Opportunity Cost
- The cost of the next best alternative
- Rational Choice
- Choosing the alternative that has the greatest value from among comparable quality products.
Section 2
- Gathering Information
- How much Information do you need
- Obtain only as much information as is worthwhile
- Value of time and effort should not be greater than the value you receive from making the right choice for yourself.
- Develop a consumer knowledge base
- Use the internet
- Have salespeople give you accurate information
- Using Advertising wisely
- Competitive Advertising
- Advertising that attempts to persuade consumers that a product is different from and superior to any other
- Used to keep or take customers from competitors
- And use emotion
- Informative Advertising
- Advertising that benefits consumers by giving information about a product
- You learn existence, price, quality and special features w/o effort
- May also be competitive
- Bait and Switch
- Ad that attracts consumers with a low priced product then tries to sell them a higher prices product
- Is deceptive and illegal
- Comparison Shopping
- Getting information on the types and prices of products available from different stores and companies
- Warranties
- Promise made by the manufacturer or seller to repair or replace a product if it is found to be faulty within a certain period of time.
- Brand-name or generic Products
- Brand name- word, picture or logo on a product that helps consumers distinguish it from similar products
- Generic name- general name for a product rather than a specific brand name given by the manufacturer
Section 3
- Consumer Rights
- Consumerism- movement to educate buyers about the purchases they make and to demand better and safer products from manufacturers
- 62 from JFK Consumer Bill of Rights
- The right to safety
- Right to be informed
- The right to choose
- Right to be heard
- The right to redress (by Nixon)
- Help for Consumers
- BBB
- Give consumers info on products and selling practices and help settle disagreements
- Consumer Responsibilities
- Report problems immediately
- State the problem and suggest a fair and just solution
- Include important details and copies
- Describe any action you have taken
- Keep accurate records of your efforts to solve
- Allow reasonable time
- Keep copy of letter or email to manufacturer
- Keep cool
- Ethical behavior- acting in accordance with moral and ethical convictions about right and wrong.