Business and the Consumer Ch 2 Business and the Consumer

All consumers are unique which makes it difficult for businesses to be able to satisfy everyone’s needs and wants. Everyone has a different lifestyle and different financial resources. Everyone has different values and goals as well.  

Values and Goals Values and goals are closely related. Values are based on what you believe is important in life and are influenced by personal experiences.   Goals are something you work to achieve. Goals can be: Short-term or Long-term

Choices -Before buying something, consumers must ask themselves: Turn to a partner and discuss what you think.

Choices Do I really need it? Where would I buy it? Is there much variety to choose from? How much can I afford to spend? Should I wait for it to go on sale? Is it possible that someone may buy it for me?

Read Textbook pages 27-30 Discuss with a partner what you read

-Consumer Behavior- Why We Buy Income and Price Status Current Trends   Why We Buy  Income and Price Status Current Trends Customs and Habits Safety Promotion

1. Income and Price Income- the money that individuals receive from various sources, such as job wages/salary, interest, or dividends. The amount of money consumers have available to them has a big influence on what they buy. Low-income families have to spend a greater portion of their income on basic necessities (essential goods/services) and therefore do not tend to buy luxury goods/services. High-income families can buy the basic necessities and have more money left over to spend on luxury goods/services.

Consumers expect good value for the money they spend. Price- the value of a product or service expressed in dollar$ and cents. Price is still the most important consideration for consumers when deciding to buy something. Consumers expect good value for the money they spend. Price alone, however, is not the only consideration. Other important factors that influence the decision to buy include: Quality Service Warranty Convenience Variety in selections (sizes, colors, styles)

2. Status Status- the social rank or position of a person or the level of importance that is given to something People tend to buy expensive products that they feel help improve their status, or make others admire or notice them. This is called ‘conspicuous consumption’.   Conspicuous Consumption- the desire to flaunt purchases to impress others

3. Current Trends What is “In style” or “Fashionable” right now is the current trend. Many people believe style and brand names help create an image or indicate status and popularity. Current trends strongly affect demand.

Read Textbook pg. 32 “Current Trends” and “Teenage Consumers”

4. Customs and Habit Family, religion, community, and customs often affect consumer choices. Ex: weddings, birthday,s baby showers, etc Habit also plays a part in what you buy. Ex: going for coffee, watching movies every weekend, shopping on Saturdays, buying Christmas presents in December  

5. Safety Safety refers to product safety and standards. This is an important concern for consumers, especially when purchasing products such as: vehicles (road safety, air bags, anti-lock brakes) baby products (cribs, car seats, high chairs).  

6. Promotion Advertising and promotion are designed to influence consumer spending and create desire for products and services.   Strong market competition has resulted in more sophisticated promotional techniques. Important to be aware of, advertising methods are often deceptive. Consumers are led to believe that certain products are much better than others, when in fact, there is very little difference. Lifestyle advertising- a type of misleading advertising that shows attractive, healthy, successful and appealing people using the product to make consumers believe their lifestyle will improve if they use the product too.

Business Responses to Consumer Behavior Businesses try to determine how much customers will buy to satisfy their needs and wants. They try to study customers’ behavior patterns and create an environment that will promote sales. 3 Factors determine how customers buy: Time Spent in a Store Contact Time Waiting Time