Transcript Consumer Purchasing

Consumer Purchasing
Chapter 4
I have no money, no resources, no hopes.
I am the happiest man alive.
- Henry Miller
Anybody who thinks money will make
you happy, hasn't got money.
- David Geffen
What Influences Your Buying Decisions?
• Come up with 10 factors that could affect
your decision to buy or not to buy
something
• Categorize each of your factors by
indicating whether it is a:
– Economic
– Social
– Personal
Economic Factors
– Prices
– Interest rates
– Product quality
– Supply and demand
– Convenience
– Product safety
– Brand name
– Maintenance costs
– Warranty
Social Factors
– Lifestyle
– Interests
– Hobbies
– Friends
– Culture
– Advertisements
– Media (magazines, radio, television, newspapers)
Personal Factors
– Gender
– Age
– Occupation
– Income
– Education
– Family size
– Geographic
– Ethnic background
– Religion
What kinds of things can you do to get more
for your money or increase your buying
power?
• Trade offs
– Buy with a credit card now, instead of buying
later
– Buy quality online/catalog as opposed to buying
cheap at the store
• Research the Product
– Cheap brands, stores, sizes
How do you intelligently go about purchasing
a product?
• Four phases
– Phase
– Phase
– Phase
– Phase
1:
2:
3:
4:
Before you shop
Weighing the Alternatives
Making the Purchase
After the Purchase
Phase 1: Before you shop
• Identify your needs
• Gather information
– People
– Ads and packaging
– Reports
– Web sites
• Be aware of the marketplace
– Know the brands and features available
– Be familiar with sales, returns, and credits
Phase 2: Weighing the Alternatives
• Identify what is important to you
• Compare prices
– Does high/low cost always relate to quality
• Do comparison shopping
– When buying complex or expensive items
– When you are buying them often
– When using the Internet, print ads, or mail-order catalogs
– Different sellers offering different prices and services for
the same product
– Product quality or price varies greatly
Phase 3: Making the Purchase
• Negotiate price
– What kind of items can you negotiate on?
– Make sure the other person has authority
• Decide on credit or cash
– Evaluate the source of loan, credit acct.,
payment period, down payment
• Know the real price
– What types of things may be added on?
• Delivery, installation, shipping
Phase 4: After the Purchase
• Added costs
– Additional maintenance and ownership costs
• Always reevaluate your purchase decisions
• Consider changes in needs, lifestyle, values, goals, and
financial resources
Personal Decision Making Process
• Complete the activity based on the
problem of needing a computer to do
schoolwork
Need Use of a Computer
Smart Shopping Ideas
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Timing purchases
Store selections
Brand comparison
Label information research
Price comparison
Timing Purchases
• Seasonal, buy bargains at certain times of
the year
• Holidays – things may be more costly
• Wait until products have been on the market
• Supply and demand
Store Selection
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Retail store vs. convenience store
Mail order
TV home shopping
Online shopping
– Why do this?
– Don’t have to leave home, lower prices, offer
more than what is at the store, good product
info
Brand Comparison
• Brand names vs. generic
• Impulse buying
– Displays may be distracting
– Buy what you don’t need
Label Information Research
• Advertising on product packages
• To have “low fat” or “light” must meet govt.
criteria
• Packages must have:
– Manufacturer name/address
– Weight and ingredients
– Nutritional information
– Open dating – freshness and shelf life
Price Comparison
• Unit pricing
– Total price/Unit of measurement
– $2.89/12 oz = $.24 per oz
• Discount coupons
• Manufacturers rebates
• Remember
– More convenience mean higher prices
– Ready-to-use means higher prices
– Large packages are usually best buy
– “On sale” doesn’t mean you save
Price Comparison Websites
• http://www.comparegroceryprices.org
Advertising
1. Product Advertising
– Product name repeated several times, famous people hired to use
product, testimonials from those who have used product, and ads
carefully aimed to appeal to certain people (certain days, time, and types
of programming).
Examples:
2. Company Advertising
– Emphasis placed on quality of products or services the company sells,
warranties and/or guarantees, or social and environmental concerns of
company. May be accompanies by catchy slogans and tunes.
Examples:
3. Industry Advertising
– All producers benefit from advertising
Examples:
Ad Slogans
• Coke
– 1900
• "For headache and exhaustion drink CocaCola"
– 1905• "Coca-Cola revives and sustains“
• "The favorite drink for ladies when thirsty,
weary, and despondent“
– 2000
• "Coca-Cola Enjoy“
– 2001
• "Life tastes good"
Ad Slogans
• Pepsi
– 1903
• "Exhilarating, Invigorating, Aids Digestion“
– 1906
• "Original real food drink“
– 1908
• "Delicious and Healthful"
Advertising
• Celebrity Endorsements
– Carrot Top, Cosby, Jordan
• Mascots – Animals
– AFLAC Duck, Energizer Bunny, Geico Gecko,
Taco Bell Dog
• Mascots – Objects
– Arby’s Oven Mitt, Poppin’ Fresh Doughboy,
Scrubbing Bubbles, Kool-Aid Man
• Mascots – People
– Aunt Jemima, Burger King, Gerber Baby,
Keebler Elves
Common Advertising Strategies
• 1. Ideal Kids
– Kids in commercials are a little older and a little more perfect than
the target audience of the ad. A commercial that is targeting eight
year-olds, for instance, will show 11 or 12 year-old models playing
with an eight year old's toy
• 2. Heart Strings
– Commercials often create an emotional ambience that draws you
into the advertisement and makes you feel good. The McDonald's
commercials featuring father and daughter eating out together, or
the AT&T Reach Out and Touch Someone ads are good examples.
We are more attracted by products that make us feel good
• 3. Amazing Toys
– Many toy commercials show their toys in life-like fashion, doing
incredible things. Airplanes do loop-the-loops and cars do wheelies,
dolls cry and spring-loaded missiles hit gorillas dead in the chest.
This would be fine if the toys really did these things.
Common Advertising Strategies
• 4. Life-like Settings
– Barbie struts her stuff on the beach with waves crashing in the
background, space aliens fly through dark outer space and allterrain vehicles leap over rivers and trenches. The rocks, dirt,
sand and water don't come with the toys, however.
• 5. Sounds Good
– Music and other sound effects add to the excitement of
commercials. Sound can make toys seem more life-like or less
life-like, as in a music video. Either way, they help set the mood
advertisers want.
• 6. Cute Celebrities
– Teenage Mutant Ninja Turtles sell pizza. Spuds McKenzie sells
beer. "Joe Cool" camel sells cigarettes. All of these are ways of
helping children identify with products either now or for the
future.
Common Advertising Strategies
• 7. Selective Editing
– Selective editing is used in all commercials, but especially in
commercials for athletic toys like frisbees or footballs. Commercials
show only brilliant catches and perfect throws. Unfortunately, that's
not the way most children experience these toys.
• 8. Family Fun.
– "This is something the whole family can do together!" or "This is
something Mom will be glad to buy for you." Many commercials
show parents enjoying their children's fun as if the toy will bring
more family togetherness.
• 9. Excitement!
– Watch the expressions on children's faces. Never a dull moment,
never boring. "This toy is the most fun since fried bananas!" they
seem to say. How can your child help thinking the toy's great?
• 10. Star Power.
– Sports heroes, movie stars, and teenage heart throbs tell our
children what to eat and what to wear. Children listen, not realizing
that the star is paid handsomely for the endorsement.
Food Advertising Strategies
• Star Power - your favorite sports star or
celebrity is telling you that their product is the
best! Kids listen, not realizing that the star is
being paid to promote the product
• Bandwagon - join the crowd! Don't be left out!
Everyone is buying the latest snack food: aren't
you?
• Scale - is when advertisers make a product look
bigger or smaller than it actually is
• Put Downs - are when you put down your
competition's product to make your own product
seem better.
Food Advertising Strategies
• Facts and Figures
– Facts and statistics to enhance your product's
credibility
• Repetition
– Advertisers hope that if you see a product, or
hear it's name over and over again, you will be
more likely to buy it
Food Advertising Strategies
• Sounds Good
– Music and other sound effects add to the excitement of
commercials, especially commercials aimed at kids.
Those little jingles, that you just can't get out of your
head, are another type of music used to make you think
of a product. Have you ever noticed that the volume of
commercials is higher than the sound for the program
that follows?
• Cartoon Characters
– Tony the Tiger sells cereal and the Nestlés Quick Bunny
sells chocolate milk. Cartoon like these make kids
identify with products.
Food Advertising Strategies
• Weasel Words
– Look for words in commercials like: "Part of..." "The taste of real..."
"Natural..." "New, better tasting....." "Because we care..." There are
hundreds of these deceptive sayings – how many more can you
think of?
• Omission
– Don't give you the full story about their product. For example, when
a Pop Tart claims to be "part" of a healthy breakfast, it doesn't
mention that the breakfast might still be healthy whether this
product is there or not.
• Are You Cool Enough?
– Try to convince you that if you don't use their products, you are a
nerd. Usually advertisers do this by showing people that look uncool
trying a product and then suddenly becoming hip looking and doing
cool things.
Cleveland Municipal Stadium, 1974
•
The Promotion: 10-Cent Beer Night
•
What went wrong:
– To bring fans to see the miserable Cleveland Indians, management decided to sell 10ounce cups of beer for only 10 cents at a game against the Texas Rangers
– Management forgot one small detail: drunk people get restless
– More than 25,000 fans showed up for the event, most of them already tipsy at the
gate
– Among the more tame incidents was a woman who flashed the crowd from the ondeck circle, a father-son team mooning the players (good bonding experience) and
fans jumping on the field to meet shake hands with the outfielders
– In the bottom of the ninth, the Indians tied the game, but never got a chance to win.
Fans started throwing batteries, golf balls, cups and rocks onto the field and one even
took the glove of the Rangers right fielder. As the player rushed into the stands to get
his glove back, fans starting swarming the field to stop him and threw chairs to block
his way
•
The Outcome:
– The Indians were forced to forfeit, nine fans were arrested, and the AL president
forced the franchise to abandon the promotion idea after understating “There was no
question that beer played a great part in the affair.”
Comiskey Park, 1979
• The Promotion: Disco Demolition Night
– White Sox fans were encouraged to bring old disco records to the park in
exchange for a reduced admission price of 98 cents. The records were to be
destroyed in between the two games of a doubleheader against the Detroit
Tigers
• What went wrong
– A lot of people wanted to see disco records destroyed. They thought they
would get 5,000+, but got 75,000+ showed up
– The crowd, who were reportedly heavily under the influence, soon realized
that records could double as Frisbees, which naturally led to fans throwing
firecrackers and drinks
– When the demolition moment came, the explosion was bigger than
expected and ended up ripping a hole in the outfield grass. Thousands of
fans ran onto the field to join the mayhem, burning banners and throwing
objects. The batting cages were even destroyed in the riot
• The outcome
– The Tigers refused to take the field, forcing the White Sox to forfeit the
game. The quick patch job on the outfield left the grass uneven and players
complained about it for the rest of the season
Dodger Stadium, 1995
• The Promotion: Ball Night
– Fans entering the game were given a souvenir baseball
• What went wrong:
– Turns out baseballs are pretty convenient things to throw. In the
seventh inning, fans threw balls at an opposing outfielder when he
bobbled a play
– The real drama happened in the bottom of the ninth, though.
Dodger Raul Mondesi and manager Tommy Lasorda were ejected for
arguing a strikeout call, inspiring about 200 fans to throw their
promotional balls onto the field
– The umps urged the Cardinals to stay on the field, but finally
decided to end the game after more fans decided to contribute their
gifts to the game
• The Outcome:
– The Dodgers were forced to forfeit the game, the first forfeit in the
National League in 41 years
Fifth Third Ballpark, 2006
• The Promotion: Cash Drop
– The West Michigan Whitecaps, Detroit’s class-A affiliate, had a
helicopter drop $1,000 in various bills from a helicopter after a
game.
• What went wrong:
– People love money more than they love other people.
– Two children were injured scrambling for the cash. A girl received a
bloody lip being pushed to the ground, while a seven-year-old boy
was bruised when he got trampled in the fray
• The Outcome:
– The boy was taken to the hospital, but released after treatment. The
team management summed up the incident by reminding everyone
that they had signed waivers
Dodger Stadium, 2007
• The Promotions: All-you-can-eat seats
– The Dodgers decided to promote obesity by opening up a section of all-youcan-eat seats. Although beer, ice cream and candy are still for sale, most
food is just given away. Ticket prices are $35 in advance and $40 on game
day
• What went wrong:
– Not everybody can handle an open buffet of hot dogs and nachos.
– One Slate reporter wrote about his experience in the seats, which
predictably ended in vomit
– Countless other fans have had their evenings end in a similar way
• The Outcome:
– Despite the upchucking, the seats remain open and usually draw between
2,000 and 4,000 fans a night. In fact, the Dodgers have declared the
promotion a success and have reached the second-highest attendance in
baseball. Other stadiums have contacted the Dodgers about copying the
idea