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Your Role as a Consumer
Consumption, Income, and
Decision Making
Mr. Cargile
Mission Hills High School
San Marcos, CA
Consumption, Income, and
Decision Making
Mr. Cargile
Mission Hills High School
San Marcos, CA

Consumerism: The movement to educate buyers
about the purchases they make and to demand
better and safer products from manufacturers.

Consumer: Any
person or group that
buys or uses goods
and services to
satisfy personal
needs and wants.

To be a consumer
you must have the
ability to
consume…Income!

Disposable Income


Income remaining for a
person to spend or save
after all taxes have been
paid.
Needed to buy:
 Necessities
 Extras

Disposable Income


Income remaining for a
person to spend or save
after all taxes have been
paid.
Needed to buy:
 Necessities
 Extras
Disposable and Discretionary
Income

Discretionary Income

Income a person has left
to spend on extras after
necessities have been
bought.
Disposable
Income



--
Expenses
=
Discretionary
Income
What happens when you receive a pay raise?
What happens when you cut energy expenses?
What happens when you leave your full-time job for
a lower-paid part-time job to finish school faster?
Decision Making as a
Consumer

Do I purchase the item or not?
 What scarce resources are at risk?
 What is my opportunity cost of buying the item?
 Quality vs. Price
 Efficiency vs. Durability

Make a rational choice
Your Role as a
Buying Principles or
Strategies



Gathering Information
Use Advertising Wisely
Comparison Shopping
Gathering Information

Develop a Knowledge Base




Test out different products
Go to different stores to see different products
Internet
How much information do you need?


Opportunity Cost of information = time
Gather only worthwhile information—time should
not be greater than value of information.

Competitive Advertising: advertising that attempts to
persuade consumers that a product is different from
and superior to any other.



Purpose=take customers away or keep customers
 Examples: Dell or Nike
Informative Advertising: advertising that benefits
consumers by giving information about the
product—price, quality, special features.
Bait and Switch: advertising that attracts consumers
with a low-priced product, then tries to sell them a
higher-priced product.

Deceptive and illegal






Does the ad only appeal to my emotions or does it
provide facts?
What are the special features of the product? Do I
need any of these features?
Does the ad tell me anything about operating costs?
Does the ad tell me anything about a product’s
durability, or ability to last?
Does the advertised price compare favorably with
the price of similar products?
Is the advertised price the entire price, or are there
extra costs in small print?

Comparison Shopping—getting
information on the types and prices
of products available from different
stores and companies.

Warranties: promises made by a
manufacturer or a seller to repair or
replace a product within a certain time
period if it is found to be faulty.

Brand Name Vs. Generic
 Brand Name: word, picture, or logo on
a product that helps consumers
distinguish it from similar products.
 Generic: general name for a product
rather than a specific brand name
given by the manufacturer
Consumerism
Consumer Rights

JFK developed 4 consumer rights
principles we follow today:





The right to safety—government checks
out all goods.
The right to be informed—government
checks against fraud
The right to choose—government allows
competition
The right to be heard—government
listens to complaints
Nixon added a 5th:

The right to redress—government or the
manufacturer makes an adequate
payment or exchange for faulty products.


Report problems with
products
Ethical Behavior—acting
in accordance with
moral and ethical
convictions about right
and wrong when dealing
with businesses,
services, or products.
http://oceans.greenpeace.org/en/the-expedition/news/trashing-ouroceans/ocean_pollution_animation