Transcript You, The Consumer

You, The Consumer
How do I
contribute to the
economy?
Important Terms You Need to Know
• Consumer
– any person or group that buys or uses goods and services to
satisfy personal needs and wants.
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Important Terms You Need to Know
• Marketing
– All the activities needed to move goods and
services from the producer to the consumer.
• Utility
– The ability of any good or service to satisfy
consumer wants.
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Important Terms You Need to Know
• the types of utility
– Form utility
• The conversion of raw materials into goods and
services
– Place utility
• Having a good or service available where
consumers want them
Important Terms You Need to Know
• the types of utility
– Time utility
• Having a good or service available when
consumers want them.
– Ownership utility
• The satisfaction that comes from owning a good
or service.
Important Terms You Need to Know
• Disposable income
– money remaining after taxes have been
paid.
• Discretionary income
– money remaining after bills have been
paid.
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Important Terms You Need to Know
• Rational self-interest
– Individuals try to maximize the expected
benefit achieved with a given cost or to
minimize the expected cost of achieving a
given benefit.
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Consumer Spending
•
•
•
•
•
•
•
32%
14%
5%
19%
5%
5%
9%
• 11%
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Housing and household operation
Food
Clothing
Transportation
Healthcare
Entertainment
Life Insurance, Social Security, and
Retirement plans
Other
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Basic Buying Principles
• Gathering Information
• Using advertising wisely
• Comparison shopping
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Consumer Rights
•
•
•
•
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The right to safety
The right to be informed
The right to choose
The right to be heard
The right to redress
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Types of advertising
• Competitive advertising
– Advertising that attempts to persuade
consumers that a product is different from
and superior to any other.
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Types of advertising
• Informative advertising
– Advertising that gives information about a
product.
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Vince
Billy Mays
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Types of advertising
• Bait and Switch (deceptive advertising)
– An ad that attracts consumers with a lowpriced product, then tries to sell them a
higher-priced product.
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A few more terms
• Comparison shopping
– getting information on the types and prices
of products available from different stores
and companies.
• 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.
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• Food and Drug Administration (FDA)
– Government agency that protects the public
against impure and unsafe foods, drugs, and
cosmetics.
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A few more terms
• Brand name
– word, picture, or logo on a product that
helps consumers distinguish it from similar
products.
• Generic brand
– general name for a product.
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Rules for the Supermarket
• Work the edges
– The healthiest foods are found along the walls. Dairy,
meats, produce, and seafood are found there.
• Look high and low
– Supermarkets charge “slotting fees” for the
prime real estate on the shelves. That is why the
Kellogg’s, Krafts, and Proctor & Gambles have
products at eye level. The healthy foods are
usually located on the top or bottom shelf.
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Rules for the Supermarket
• Long lines means you buy more
– You are 25% more likely to buy the sodas and
candy around you if you have to wait in a long
check out line.
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FDA Regulations
• Canned pineapples can contain up to 20% moldy fruit.
• Canned tomatoes can contain up to 5 fly eggs or 2 maggots per
500 grams.
• Frozen broccoli can contain up to 60 mites per 100 grams.
• Ground cinnamon can contain up to 400 insect fragments and
11 rodent hairs per 50 grams.
• Peanut butter can contain up to 30 insect fragments or 1 rodent
hair per 100 grams.
• Popcorn can contain up to 1 rodent pellet in one sample or 2
rodent hairs per pound.
• Potato chips can contain up to 6% rotten potatoes.
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