Transcript Chapter 22
Making Consumer Decisions Buying Goods and Services Consumer Choices • • • • Deciding What to Buy Deciding When to Buy Deciding Where to Buy Deciding How Much to Pay Customer vs. Consumer • CUSTOMER – A person who selects and purchases goods and services • CONSUMER – a person who selects, purchases, uses, and disposes of goods and services WHAT TO BUY BRAND vs. GENERIC http://www.youtube.com/watch?v=wcYJsxkDbUg • Brands – help consumer distinguish it from other products • Generic – priced lower because… – producers spend so little on marketing and advertising – Usually sell for 40% lower WHEN TO BUY Planning a major purchase in advance can help save money – End of Season – After the holidays – Before new models are released WHERE TO BUY Department Stores Discount Stores Off-Price and Outlet Stores Limited-Line Retailers Superstores Convenient Stores Warehouse Stores Shopping at Home Department Stores • Sell a wide variety of goods – – – – Clothing, Furniture, appliances, jewelry Brand Names Customer Service Higher Prices • Examples: – Macy’s – Penny’s – Carsons Discount Stores • Sell a wide variety of goods but at lower prices – K-mart – Wal-Mart – Target Off-Price and Outlet Stores • Off-price and outlet stores are able to offer large discounts because the items they sell have minor flaws, are out of season, or have been discontinued, or were overstocks: – TJ Maxx – Marshalls – SteinMart Limited Line • Sell an assortment of goods in one product line – Such as: Electronics, shoes, sporting goods, clothes • Examples: – – – – Dick’s Sporting Goods Best Buy Toys R us American Eagle Superstores • Superstores are a complete grocery store but also have a wide variety of other items • Examples: – Super Walmart – Super Target – Meijers Convenient Stores • Provide easy access that consumers often buy as a necessity • Usually close to home • Examples: – 7-11 – White Hen Warehouse Store • Typically the size of a football field • Carry a huge selection of food and nonfood items • Bulk • Examples: – Costco – Sam’s Club Shopping at Home • Examples: – TV – Catalogs – On-line WHAT TO PAY • Most expensive – best quality? • Least expensive – best buy? • HOW do you know what to pay??? COMPARISON SHOP • WHEN MOST IMPORTANT? – Major purchases • because the cost differences can be enormous COMPARISON SHOPPING Comparing the prices and characteristics of competing brands or stores Comparison Shopping Checklist – Price (Unit Pricing) – Features – Quality – Convenience – Warranty COMPARISON SHOPPING Comparing the prices and characteristics of competing brands or stores Comparison Shopping Checklist – Food http://www.youtube.com/watch?v=bBRpai6gFe0 – Toys http://www.youtube.com/watch?v=WRUQRXnDpdo&feature=related – Clothing – Online Comparison sites Preparing to Shop Study Advertisements WHAT IS ADVERTISING? • Advertising is a paid form of communication, to persuade a particular audience to purchase goods/services • Three primary objectives of advertising are to: – Persuade – Remind – Inform Advertising Strategies – Advertising Strategies • Rational Advertising – facts and information • Emotional Advertising – appeals to your feelings Preparing to shop… Reading Consumer Publications – Consumer Reports • Examines and rates products – Consumer Research Magazine Shop at Sales – Promotional Sales • Special buy on new products – Clearance Sales • To clear out goods that are out of season or no longer profitable – Loss Leaders • Advertised products that sell at a loss to bring customers into a store Preparing to shop… Uses Shopping Lists • • To avoid impulse buying To help save money Resist pressure and gimmicks • • “Super low prices” “You’re Won a Prize” Read Labels and Warranties Warranty – A written guarantee from the manufacturer that states the conditions under which the product can be returned, replaced or repaired – A legal document that states the rights and responsibilities of the consumer and manufacturer – Federal Law requires sellers of products greater than $15 to have a written warranty Types of Warranties • Implied – Unwritten guarantees that a product is fit for the intended use • Expressed – Written and comes in two forms • Full warranties states that the seller will repair or replace the product. Usually good for a stated time period. (ie: 90 days) • Limited Warranty covers only certain parts of a product. The buyer may have to pay a portion of the repair cost