1. Chapter 4
Consumer Purchasing 4.1

2. Students will learn:
Determine the factors that influence your buying decisions.
Use a research-based approach to buying goods and services.
Apply strategies to make wise buying decisions.

3. Factors that influence buying decisions
Economic Factors
Social Factors
Personal Factors
Prices
Lifestyle
Gender
Interest Rate
Interests
Age
Product Quality
Hobbies
Occupation
Supply & Demand
Friends
Income
Convenience
Culture
Education
Product Safety
Advertisements
Family Size
Brand Name
Media
Geographic Region
Maintenance Costs
Ethnic Background
Warranty
Religion

4. Consumer Purchasing: A research-based approach
Tool used to research and evaluate items you want to buy, enabling you to get more value for your money.
4 Phases:
Before You Shop
Weighing the Alternatives
Making the Purchase
After the Purchase

5. Phase 1: Before you shop Identify your Needs Gather Information
What exactly do you need?
Gather Information
Look at costs, options, and consequences
Become Aware of the Marketplace

6. “I can return my car within three days of purchase.”
Common consumer myths
“I can return my car within three days of purchase.”
There is no such time period

7. “It says right here that I’ve won; it must be true.”
Common consumer myths
“It says right here that I’ve won; it must be true.”
Fake prize notifications continue to become more convincing. Some consumers actually go to company offices to try to pick up their prizes.

8. “If I lose my credit cards, I’m liable for purchases.”
Common consumer myths
“If I lose my credit cards, I’m liable for purchases.”

9. Common consumer myths
“An auto lease is just like a rental; if I have problems with the car or problems paying, I can just bring it back.”

10. “You can’t repossess my car; it’s on private property.”
Common consumer myths
“You can’t repossess my car; it’s on private property.”

11. Phase 2: weighing the alternatives
Decide what’s important to you
Compare prices
Do some comparison shopping
Comparison shopping when…
Buying complex or expensive items
Buying items you purchase often
Can comparison shop easily
Different sellers offer different prices and services
Product quality or price varies greatly

12. Phase 3: making the purchase
Can you negotiate the price?
Should you use cash or credit?
Do you know what the real price is?
Down Payment – portion of the total cost of an item that must be paid at the time of purchase.

13. Phase 4: after the purchase
Additional costs & tasks
Return or replace
Rethink and reevaluate decisions
Car – insurance, registration, tags

14. 6 Smart buying strategies
Timing Purchases
Selecting the Store
Comparing Brands
Label Information
Comparing Prices
Evaluating Warranties

15. Timing Purchases Seasonal shopping Discounts & Sales
Back to school
Winter coat/ Swimsuit
Discounts & Sales
Law of Supply & Demand
New movie release

16. Selecting the Store Quality and variety differ from store to store
Hours
Location
Prices
Reputation
Policies
Services
Two alternatives to stores:
Cooperative – nonprofit org owned and operated by its members for the purpose of saving money on the purchase of goods and services.
Direct Selling – mail order, TV home shopping, and online shopping
Coop Ad
Buy large amounts, keeps cost lower
Coop Dis
Offer few customer services
Direct Selling Ad
Convenience of not leaving home
Lot of product info from internet
Direct Selling Dis
Pay for shipping and handling
Harder to return purchases and receive funds

17. Comparing Brands
National brand vs. Store-brand
Store-brand – often times they are made by the same companies that make the name brand = high quality products. Because they don’t carry “the name” they can be sold for cheaper.
Impulse Buying – purchasing items on the spur of the moment

18. Open Dating– indicates the “shelf life” of a perishable product
Label Information
Lot of advertising
Federal law require factual info
Processed Food:
Nutritional info
Meet govt standards to advertise as “low in fat”, “light”
Food:
Common name of product
Name and address of manufacturer
Net weight of product
List of ingredients (decreasing order of weight)
Appliances:
Info on operating costs

19. Comparing Prices
Unit Pricing– use of standard unit of measurement to compare the prices of packages that are different sizes.
Rebate– partial refund of the price of a product.

20. Evaluating Warranties
Warranty– written guarantee from the manufacturer or distributor that states the conditions under which the product can be returned, replaced, or repaired.
Service Contract– a separately purchased agreement by the manufacturer or distributor to cover the costs of repairing the item.