Making Effective Purchase Decisions

Making Effective Purchase Decisions

• In the next few years– You will start to work and make income– You will have money to spend– You will make some dumb purchasing decisions– You will make some smart purchasing decisions

Making Effective Purchase Decisions

• You can make a couple different purchases• Impulse purchases– Small cost, no real thought goes into them, not a

life changing purchase by any means

• Involved purchases– Usually on higher ticket items– Should involve a well though through process

The Buying Process

1) Money Available2) Cost3) Buyer Behaviour4) Quality/Features5) Comparison Shopping6) Service7) Warrantees and Guarentees

Money Available

• You have to assess how much money you have to spend

• Not just the amount of money in your bank account – but the wise shopper has a budget– Money allocated to purchases that

aren’t bills, rent, etc

Cost

• For the item you are buying you should do a little research to see the cost of the item you want to purchase

• If the product varies – you may have to look at the range of prices– Example: TV’s range from $100 - $3000

• If the benefit of owning the product/service outweighs the cost of it – you usually purchase

Buyer Behaviour

• Each person is different – as such, so are their purchasing decisions

• Advertising may influence what you see as a necessary purchase

• Friends may sway your decision on what you should purchase

• Do you buy your clothes to please yourself or do you buy them to try and impress others?

Quality/ Features

• All products have various features and a perceived quality

• As a purchaser – you have to weigh how important these things are to you

• Example: Buying a fridge– What factors might make

fridges differ in price?

Comparison Shopping

• Probably the most important part of the process

• Comparing the products and services available to you in terms of features, quality and price

• All of the products have their pros/cons• You have to decide which criteria are most

important to you

Criteria Fridge A

Fridge B Fridge C

Environmentally Sound

No Yes Yes

Price $2000 $1500 $2500Ice Dispenser

No No Yes

Large Freezer

Yes No Yes

Service

• What extra things do I get with the purchase?• What if it breaks down?• Service includes things like:– Delivery– On the spot maintenance– A 24 hour help line– Expert Advice, etc

Warranties and Guarantees

• Warranty – provides after-sales service on a product for a specified period of time– Gives the buyer a safe feeling when they walk out

of the store– People will often pay for just that – knowing the

chances of the product breaking down are slim• Guarantee – a promise that the good or

service is of specified quality or durability– If there is anything wrong with your Ipod – in most

cases apple will give you a new one

Today....

• Get into groups of 3-4• Write me a story!!!• You will all be given an item – take me through

someone's process and all the things they must look at before making their purchase

• You must include every step of the buying process we talked about today

• Be creative – you must write this in story format