11 Consumer Management 1

11 Think About Yourself  Do you impact the economy?  Why do the advertisers focus on the year old age group?  Are you personally influenced by advertisements? 2

11 Essential Questions  How do your consumer choices Impact the Economy?  How can I Protect Myself as a Consumer? 3

11 Objectives  Explain your role in the economy  Explore proper decisions making as a consumer  Recognize Influences in Consumer Decisions  Evaluate Payment Methods and their impact on your Financial Health  Explain Your Consumer Rights  Explain Your Consumer Responsibilities 4

11 Vocabulary  Economics – the study of the choices people and communities make regarding the way they produce and purchase goods and services  Economy – activity related to the production and distribution of goods and services  Consumer – someone who purchases or uses goods or services  Influence -- the ability to change opinions  Values – the beliefs and principles a person considers important, correct and desirable 5

11 Vocabulary  Impulse Buying – the act of purchasing items on the spur of the moment  Merchandise – products or goods that consumers buy  Service Contract – an agreement that the store or manufacturer will provide repair or replacement services if a product breaks or fails  Warranty – a written statement that promises a product will work for a set amount of time 6

11 Playing Your Role in the Economy 7 Review: The economy is activity related to the production and distribution of goods and services. Chapter Consumer Management 13  Around the world, businesses produce goods and provide services that they think people will buy.  The decisions you make about what to buy impacts the economy.  Companies supply goods and services that consumers demand.  In most countries, the government makes laws and policies that impact the way people earn and spend money.  Three major economic systems are Capitalism, Socialism, and Communism.  Most countries have economies that combine elements from more than one of the three major systems.

11 Checkpoint  As we reviewed our economic lessons, in what ways do you as a consumer Impact the Economy? Essential Question: How do your consumer choices Impact the Economy? 8

11 How are you as a Consumer?  Do you spend money for:  Food?  Electronics?  Clothing?  Have you ever been ripped off?  What could you have done to prevent it?  What if you buy something and it does not work or breaks immediately after you begin using it? 9

11 Common Myths  “I can return my car within three days of Purchase.”  “It says right here that I’ve won; it must be true.”  “If I loose my credit cards, I’m liable for purchases.”  “An auto lease is just like a rental; if I have problems with the car or problems paying, I can just bring it back.”  “You can’t repossess my car; it’s on private property.” 10

11 Recognizing Influences on Consumer Decisions  Factors That Influence Buying Decisions  Economic  Social  Personal  Quickly list a few items that would influence you in each category 11

Recognizing Influences on Consumer Decisions  Factors That Influence Buying Decisions  Economic Prices, Interest Rates, Quality, Supply/Demand Convenience, Product Safety, Name, Warranty  Social Lifestyles, Interests, Hobbies, Friends, Culture Advertisements, Media  Personal Gender, Age, Occupation, Income, Education Family Size, Geography, Ethnic Background, Religion 12

11 Recognizing Influences on Consumer Decisions Advertising… Do you know what you want? Let’s look at some of the methods used by advertisers… 13

Making Decisions As a Consumer  A healthy consumer decision contributes to your well-being.  No matter what you are buying, you can use the six- step decision-making process to help you choose the item that is right for you. 1.Define your decision as a goal 2.Consider all possible options 3.Identify the consequences of each option 4.Select the best option 5.Make and implement a plan of action 6.Evaluate the decision, process, and outcome 14 Chapter Consumer Management 13

What Influences YOU??  Values—Do you value quality, eco-friendly, convenience  Past Experiences—name brand loyalty, helpful service  Family Influences  Income levels  Number of family members  Wants of one family member versus another  Stage of Life  Young Couple  Family with Young children  Older Couple  After retirement 15

11 Shopping Smart  Impulse Buys – Why is ther candy at the checkout?  Where to shop.  Different stores offer different merchandise and offer different shopping environments.  Internet shopping  Department stores  Specialty stores  Return policies vary from store to store. Make sure you understand the policy before you buy. 16 A smart shopper is an informed shopper. You are a smart shopper if you know all of your options before you buy. Chapter Consumer Management 13

Shopping Smart  A wise consumer compare prices, but he or she also compares:  Quality of construction  Features  Warranties  Service options.  Many people are willing to pay a higher price for higher quality. 17 Chapter Consumer Management 13

Warranties & Service Contracts  A warranty is a written statement that promises the product will work for a set amount of time.  Many stores will offer to sell you a service contract when you buy electronics or other products that might break.  A service contract is an agreement that the store—or manufacturer—will provide repair or replacement services if the product breaks or fails.  Do you think buying a service contract is ever a good decision? 18 Chapter Consumer Management 13

11 What Would You Do?  Mark needed new tires for his car. Last weekend he took his car to a shop that advertised $99 for four tires. When he picked his car up, his bill was $199, and he noticed the tires were not very good quality. Mark did not realize that there would be a installation charge of $25 per tire, and that the tires only had a life of 10,000 miles. 19

11 What Would You Do?  Mark questioned the shop owner who told Mark there was nothing he could do.  Is there anything Mark can do now to resolve the difference in his bill?  What should Mark do to protect himself from this situation in the future? 20

11 Checkpoint Essential Question: How can I Protect Myself as a Consumer? 21

11 Method of Payment  Cash  Can be lost  Limits what you spend  Check  Safer  Can result in an overdraft  Can be mailed  Debit Card  Can also cause an overdraft 22 Which payment method is better?  Credit Card  Can be lost  Some limits on what you spend  What is EFT?  Electronic Funds Transfer  Online Banking When should I not?  Installment Loan  Is this a gimmick?

11 Resolving Consumer Complaints  Sources of Common Consumer Complaints  Quality  Unexpected Costs  Deceptive Advertising/Pricing  Poor Repair Service  Fraud 23

11 Exploring Your Consumer Rights  The Right to Safety  The Right to Be Informed  The Right to Choose  The Right to Be Heard The Four Basic Rights of a Consumer 24

11 Exploring Your Consumer Rights  Resolving Differences Between Buyers and Sellers  Return to Place of Purchase  Contact Company Headquarters  Get Help from a Consumer Agency  Dispute Resolution  Take Legal Action 25

Exploring Your Consumer Rights  Legal Options for Consumers  Small Claims Court Low Cost and NO Lawyers  Class-Action Suits Big issues and/or large numbers  Hiring a Lawyer and Other Legal Alternatives Legal Aid Society 26 Chapter Consumer Management 13

Identifying Your Consumer Responsibilities  You are responsible for:  Making informed buying decisions  Being aware of product recalls and dangers  Seeking compensation when you are sold a defective product.  As a consumer, you have a responsibility to read and follow the manufacturer’s documentation.  Not only is it your right to complain and to seek compensation when you are wronged, it is also your responsibility. 27 Chapter Consumer Management 13

11 What Would You Do?  You are asked by your younger brother or sister how to not get taken advantage of when making a purchase.  Make a list of strategies that they should use to protect themselves from consumer fraud. 28

Chapter Review  The economy is activity related to the production and distribution of goods and services.  A consumer is someone who buys goods and services.  Recognizing the things that influence your consumer decisions can help make you a wise consumer.  A smart shopper is an informed shopper. You are a smart shopper if you know all of your options before you buy.  As a consumer of goods and services, you have certain rights that are protected by law.  In exchange for your protected rights, you have responsibilities as a consumer. 29 Chapter Consumer Management 13

11 Vocabulary Review  Economics  Economy  Consumer  Influence  Values 30  Impulse Buying  Merchandise  Service Contract  Warranty