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Chapter 22 Making Consumer Decisions

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Why It’s ImportantWhy It’s Important

As a consumer you have the problem of making your money go as far as possible. If you want to get the most for your money, you have to learn how to make good consumer decisions.

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Consumer Choices Consumer Choices Being a consumer—a person who selects, purchases, uses, and disposes of goods and services—is difficult when you have many choices.

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What to Buy What to Buy You can choose to buy either a brand-name product or a generic product.

A brand name is a word or name on a product that helps consumers distinguish it from other products.

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What to Buy What to Buy Generic products are plainly labeled, unadvertised, and sold at lower prices.

On the average, generic products cost 40 percent less than name-brand products.

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Figure22.1 MAKING A BRAND DECISION

Generic brands usually cost less than brand-name products. Fresh, frozen, and canned are choices for many food products.When would you buy each of these different vegetable products?

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What to Buy What to Buy The main reason generic products cost less is because the producers spend so little on marketing and advertising.

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When to Buy When to Buy Prices for many items change during different times of the year.

If you plan on buying a car or a computer, the prices usually go way down shortly before the new models are released.

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Where to Buy Where to Buy The three reasons for the different types of places in which to shop are:

• The kinds of goods and services sold• The prices • The convenience

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Department Stores Department Stores Department stores sell a wide variety of goods, such as clothing, furniture, appliances, and sporting goods.

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Department Stores Department Stores Because department stores offer name brands and customer services, their prices are often higher than other types of stores.

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Discount Stores Discount Stores Discount stores sell a wide variety of goods like department stores but at lower prices.

They offer few services and stock merchandise in large quantities.

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Off-Price and Outlet Stores 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.

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Limited-Line RetailersLimited-Line RetailersLimited-line retailers, or specialty stores, sell a large assortment of goods in one product line or a few related lines.

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Superstores and Hypermarkets Superstores and Hypermarkets Superstores and hypermarkets are like supermarkets but sell items such as books, hardware, and clothing as well as groceries.

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Warehouse Stores Warehouse Stores Warehouse stores carry a huge selection of food and nonfood items at low prices and in bulk quantities.

They sometimes require customers to become members of the store by paying a membership fee.

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Showroom Retailers Showroom Retailers Showroom retailers display samples of their products for customers to choose from.

Customers fill out an order form and the orders are filled from a backroom warehouse.

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Shopping at Home Shopping at Home You can also shop without ever leaving home by ordering products through:

• TV home shopping channels • Mail-order catalogs • The Internet

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What to Pay What to Pay Checking the price and quality of a product in more than one store is called comparison shopping.

Comparison shopping is most important when making a major purchase.

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What to Pay What to Pay The unit price is the cost of an item for a standard unit of measurement, such as an ounce.

Many stores list the unit price under the posted cost of an item.

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What to Pay What to Pay

You can calculate the unit price of an item yourself by dividing the total price by its weight, volume, or quantity.

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Figure22.2 CHECKLIST FOR COMPARISON SHOPPING

When you’re comparison shopping, check for various products’ features.When you examine an item of clothing for quality, what should you look for?

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How to Be a Smart Consumer How to Be a Smart Consumer You can become a smart consumer by planning in advance.

One way to be a smart consumer is by learning how to read advertisements.

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Study Advertisements Study Advertisements Rational advertising attempts to convince you with facts and information.

Emotional advertising appeals to your feelings.

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Study Advertisements Study Advertisements An ad that says “The best buy in town!” won’t necessarily help you become a smarter consumer.

An ad that says “9 oz. Sparkle-Plenty Toothpaste, $1.99” might be very helpful.

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Read Consumer Publications Read Consumer Publications Magazines such as Consumer Reports and Consumers Research Magazine give detailed information about goods that have been tested and rated by them.

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Read Consumer Publications Read Consumer Publications Libraries and online services are good places to find these sources of consumer information.

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Shop at Sales Shop at Sales Some shopping experts say that the average consumer can save up to 15 percent by taking advantage of sales.

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Shop at Sales Shop at Sales A promotional sale is one that gives you a special buy on a new product or a product that’s in season.

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Shop at Sales Shop at Sales A store might have a clearance sale to clear out goods that are going out of season or are no longer profitable in order to make room for new merchandise.

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Shop at Sales Shop at Sales During sales, look for products that are advertised as selling at a loss or below cost.

These advertised specials are called loss leaders.

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Use Shopping Lists Use Shopping Lists Impulse buying is purchasing things on the spur of the moment.

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Use Shopping Lists Use Shopping Lists A shopping list will keep you from making unnecessary shopping trips and keep you from buying on the spur of the moment.

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Resist Pressure and Gimmicks Resist Pressure and Gimmicks Some salespersons use high-pressure tactics to try to get you to buy what they’re selling.

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Resist Pressure and Gimmicks Resist Pressure and Gimmicks Sales gimmicks are meant to grab your attention and get you into the store or draw you into buying something.

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Resist Pressure and Gimmicks Resist Pressure and Gimmicks Always closely examine any deal or bargain that seems too good to be true.

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Read Labels and Warranties Read Labels and Warranties You might find information on the label that will make you decide not to buy the product.

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Read Labels and Warranties Read Labels and Warranties A warranty is a legal document that states the rights and responsibilities agreed to by the consumer and the store or the manufacturer.

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Read Labels and Warranties Read Labels and Warranties Full warranties are usually good for a stated time period, such as 90 days or one year.

Limited warranties cover only certain parts of a product.

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Graphic OrganizerBeing a Smart ConsumerBeing a Smart Consumer

Graphic OrganizerGraphic Organizer

Resistsales

gimmicks

Resistsales

gimmicks

Useshopping

lists

Useshopping

lists

Readconsumer

publications

Readconsumer

publications

Shop atsales

Shop atsales

Studyadvertisements

Studyadvertisements

Read labelsand

warranties

Read labelsand

warranties

SMARTSMARTCOSUMERSCOSUMERS

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