Personal Decision Making Chapter 20

Goals for Chapter 20.1 Apply the decision-making process to solve consumer problems. Explain economic needs and wants that influence consumer decision making.

The Decision Making Process Step 1: Define the Problem Step 2: Obtain Accurate Information Step 3: Compare Choices Step 4: Make a Decision Step 5: Take Action Step 6: Re-evaluate

Economic Wants and Needs Basic needs are the ingredients necessary for maintaining physical life. Life-enhancing wants include, but are not limited to: Food, clothing and shelter beyond what is necessary for survival. Medical care to improve quality of life. Education to achieve personal goals Travel and vacations

Individual Wants Factors affecting individual wants: Values. Values are the principles by which a person lives. Personal Preferences. Personal preferences or tastes are your likes and dislikes. Income. The amount you earn will influence the type of consumer choices you make. Leisure Time. The amount of free time you have and the kinds of activities you enjoy also affect how you choose to spend your money.

Collective Values Collective values are those things important to society as a whole. Legal Protection Employment Progress Innovations are new ideas, methods, or devices that bring about changes in the way we live. Quality of Environment Public and Government Services

Goals for Chapter 20.2 List and describe factors that influence spending decisions. Analyze marketing strategies that influence spending decisions.

Factors that Influence Spending Personal Factors Personal Resources Position in life Customs, Background and Religion A custom is a long-established practice that takes on the force of an unwritten law. Values and Goals

Outside Factors The Economy Technological Advances The Environment Social Pressures

Planning Major Purchases Questions to ask yourself: 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, such as supplies, maintenance etc..? For what other purposes might I use the money spent or committed for this purchase? What is the total cost of this product?

Marketing Strategies that Influence Spending Advertising Advertising intended to convince consumers to buy a specific good or service is called product advertising. A target market is the specific consumer group to which the advertisements are designed to appeal. Advertising intended to promote the image of a store, company, or retail chain is known as company advertising. Advertising intended to promote a general product group without regard to where these products are purchased is called industry advertising.

Pricing Odd-number pricing is the practice of setting prices at uneven amounts rather than whole dollars to make them seem lower. Sales A loss leader is an item of merchandise marked down to an unusually low price. Any customer who only buys loss leaders is called a cherry picker.

Promotional Techniques Displays Contest and Games Coupons Frequent Buyer Cards Packaging Sampling Micromarketing Micromarketing is a marketing strategy designed to target specific people or small groups with products that they are likely to want.