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• Start working on Jack’s budget! Put on poster paper! Dividing your expenses • • • • • • • • • Rent: 30% of net pay Food: 15% of net pay Utilities: 10% of net pay Occasional spending: 10% of net pay Savings: 10% of net pay Car Loan: 10% of net pay Car insurance: 5% of net pay Cell phone 5% of net pay Entertainment: 5% of net pay Parts of a budget • Fixed Expenses • Variable Expenses Do Now • What’s the best purchase you’ve ever made? • What’s the worst purchase you’ve ever made? Do Now • What’s the best purchase you’ve ever made? • What’s the worst purchase you’ve ever made? Advertising and the Consumer What are some of your favorite advertisements? Why are these appealing? How does advertising affect your buying habits? What strategies can you identify that are being used by advertisement agencies? Advertising Techniques • • • • Information Statues Peer Approval Hero Endorsement • • • • Entertainment Intelligence Independence Physical Attraction to Others Unethical Techniques • “Bait and Switch” – Entices consumers with bargains that are too good to be true, and then consumers are told the item is unavailable and are shown a more expensive object • Exploitation of Fears – Ad feeds or plays on fears • Supermarket Specials – Ads of products that are not in stock or not readily available at the advertised price • Out of context quotations – Comments by a noted person taken out of context to imply an endorsement of a product Examples of Misleading Ads • • • • • Health Fraud Credit Repair “Get Rich Quick” Schemes Product Misrepresentations Travel Fraud Explore Advertisement History 1. Find an advertismemnt that you like and explain why it’s effective-what effect did it have on you? •http://www.tintup.com/blog/history-evolutionadvertising-marketing/ •http://adage.com/article/special-report-the-advertisingcentury/ad-age-advertising-century-timeline/143661/ •With a partner: 2.Describe various ways that ads have changed over time. 3.Are there any similarities between the late 1800s and now? Explain. Advertising and You • Use the following website to give you further insight into consumer behaviorshttp://www.psychologytoday.com/b asics/consumer-behavior (Google Psychology Today Consumer Behavior) • Read – Six sneaky Ways Sales Spur Spending – Advertising is Magic Answer the following question in 1-2 paragraphs. How does advertising effect consumer behavior? Why is understanding advertising so important to being a critical consumer?