DECEMBER 6, 2011 SPENDING HABITS

AGENDA Review Decision Making Model (7 steps) Needs versus Wants Factors that Influence our spending Personal factors Outside factors Marketing Strategies that influence our spending Advertising Pricing Sales Promotional Techniques

REVIEW: DECISION MAKING MODEL

FACTORS THAT INFLUENCE SPENDING PERSONAL FACTORS Personal factors 1. Personal Resources Time, money, energy, skills, abilities 2. Position in Life Age, marital status, gender, employment status and lifestyle 3. Customs, Background and Religion 4. Values and Goals

FACTORS THAT INFLUENCE SPENDING OUTSIDE FACTORS 1. The Economy The general condition of the economy (interest rates on car loans high –fewer people buy cars) 2. Technological Advances new electronic games, new solar heating device to your home, newest gadgets, most convenient - iPod's etc 3. The Environment ecologically safe products, environment that surrounds us 4. Social Pressures friends, relatives, co-workers, the media, advertisements

PLANNING MAJOR PURCHASES Why do I need or want this product? How long will this product last? What substitutes are available and at what cost? By postponing this purchase, is it likely that I will choose not to buy it later? What types of additional costs are involved? What could this money be spent on? What is the total cost of the product (cash price, deferred price, interest, shipping charges etc.)?

MARKETING STRATEGIES THAT INFLUENCE SPENDING Advertising The primary goal of all advertising is to create within the consumer the desire to purchase a product or service. Some advertising is false and misleading; other advertising is informational and valuable. Billboards, televisions, radio, Internet, newspapers, magazines, leaflets, balloons, and t-shirts Product Advertising, Company Advertising and Industry Advertising

MARKETING STRATEGIES THAT INFLUENCE SPENDING PRICING Marketers price products to entice people to buy their product. They want people to buy their products over their competitor’s product. Supply and demand determine what will be produced and the general price range will be Odd- number pricing : the practice of setting prices at uneven amounts rather than whole dollars to make them seem lower

MARKETING STRATEGIES THAT INFLUENCE SPENDING SALES Companies mark down merchandise substantially or slightly in order to increase the number of items sold. LOSS LEADER – an item of merchandise marked down to an unusually low price – sometimes below the store’s cost. They do this in order to promote a new product or to get people into the store expecting the people to buy other things. CHERRY PICKER – a customer that only buys loss leaders. ???? Do you think retailers like cherry pickers?

MARKETING STRATEGIES THAT INFLUENCE SPENDING PROMOTIONAL TECHNIQUES A technique used to lure customers into their stores Displays Contests Games Frequent buyer cards Coupons Packaging Sampling

HOT OR SNOT? dtricks_burger3.html dtricks_burger3.html

REVIEW Factors that Influence our spending Personal factors Outside factors Marketing Strategies that influence our spending Advertising Pricing Sales Promotional Techniques VOCAB WORDS: odd-number pricing loss leader cherry picker