Chapter 22

1. Chapter 22 Making Consumer Decisions pp. 351 - 369

2. Learning Objectives After completing this chapter, you’ll be able to: • Describe choices consumers make when buying goods and services. • Identify types of stores where consumers can make purchases. • List ways to be a smart consumer. Introduction to Business

3. Why It’s Important As a consumer you have the problem of making your money go as far as possible. If you want to get the most for your money, you have to learn how to make good consumer decisions. Introduction to Business

4. Consumer Choices A person who selects, purchases, uses, and disposes of goods and services 1. Being a consumer—___________ ___________________________ __________________ difficult when you have many choices. Introduction to Business

5. What to Buy Brand generic 2. You can choose to buy either a _______ name product or a ___________ product. 3. A ___________ is a word or name on a product that helps consumers distinguish it from other products. Brand name Introduction to Business

6. What to Buy (Generics) Generic products 4. _______________ are plainly labeled, unadvertised, and sold at ___________. 5. On the average, generic products cost _______ less than name-brand products. 6. The main reason generic products cost less is because the producers spend so _______________________________. Lower prices 40% Little on marketing and advertising Introduction to Business

7. Figure 22.1 Generic brands usually cost less than brand-name products. Fresh, frozen, and canned are choices for many food products. When would you buy each of these different vegetable products? MAKING A BRAND DECISION Introduction to Business

8. When to Buy Change during different times 7. Prices for many items _____________ ________________ of the year. 8. If you plan on buying a car or a computer, the prices usually go way down shortly before the ___________ ____________________. New models are released Introduction to Business

9. Where to Buy 9. The three reasons for the different types of places in which to shop are: • The kinds of goods and services sold • The prices • The convenience Introduction to Business

10. Department Stores 10. ________________sell a wide variety of goods, such as clothing, furniture, appliances, and sporting goods. 11. Because department stores offer name brands and customer services, their ______________________________ __________________ Department stores Prices are often higher than other types of stores Introduction to Business

11. Discount Stores Discount stores 12. ________________ sell a wide variety of goods like department stores but at _______________. 13. They offer _____________ and stock merchandise in ________________. Lower prices Few services Large quantities Introduction to Business

12. Off-Price and Outlet Stores 14. Off-price and outlet stores are able to offer large discounts because the items they sell have _____________________ _______________________________. Minor flaws, are out of season, or have been discontinued Introduction to Business

13. Limited-Line Retailers 15. Limited-line retailers, or specialty stores, sell a large assortment of goods in ________________________________. one product line or a few related lines Introduction to Business

14. Superstores and Hypermarkets 16. Superstores and hypermarkets are like supermarkets but sell items such as ________________________ as well as groceries. books, hardware, and clothing Introduction to Business

15. Warehouse Stores huge selection 17. Warehouse stores carry a ___________ of food and nonfood items at ________ ____________________. 18. They sometimes require customers to become _____________ of the store by paying a __________________. low prices and in bulk quantities members Membership fee Introduction to Business

16. Showroom Retailers Showroom retailers 19. _________________ display samples of their products for customers to choose from 20. Customers fill out an order form and the orders are filled from a __________ _________________. Backroom warehouse Introduction to Business

17. Shopping at Home 21. You can also shop without ever leaving home by ordering products through: • TV home shopping channels • Mail-order catalogs • The Internet Introduction to Business

18. What to Pay 22. Checking the price and quality of a product in more than one store is called _____________________. 23. Comparison shopping is most important when making a ________________. Comparison shopping Major purchase Introduction to Business

19. What to Pay Unit price 24. The ___________ is the cost of an item for a ______________________ ______________, such as an ounce. • Many stores _________________ under the posted cost of an item. • You can calculate the unit price of an item yourself by _________________ _______________________________. Standard unit of measurement List the unit price Dividing the total price by its weight, volume, or quantity. Introduction to Business

20. What to Pay Two bags of Chips: 24oz bag Cost $4.10 20oz bag Cost $3.00 $4.10 / 24 OZ = $.17 PER OZ $3.00 / 20 OZ = $.15 PER OZ Introduction to Business

21. Figure 22.2 CHECKLIST FOR COMPARISON SHOPPING When you’re comparison shopping, check for various products’ features. When you examine an item of clothing for quality, what should you look for? Introduction to Business

22. Fast Review • Why do generic products cost less than brand-name products? • When is a good time to shop for a product like a car, a computer, or an item of clothing? Introduction to Business

23. Fast Review • What are the ways you can shop from home? • How can you calculate the unit price of an item? Introduction to Business

24. How to Be a Smart Consumer 27. You can become a smart consumer by ____________________. 28. One way to be a smart consumer is by learning how to ___________________. Planning in advance Read advertisements Introduction to Business

25. Graphic Organizer Graphic Organizer Being a Smart Consumer Study advertisements Read labels and warranties Shop at sales SMART COSUMERS Read consumer publications Resist sales gimmicks Use shopping lists Introduction to Business

26. 29. How to Be a Smart Consumer • Study Advertising • Shop at Sales • Use Shopping Lists • Resist Sales Gimmicks • Read Consumer Publications • Read Labels and Warranties Introduction to Business

27. Study Advertisements Rational advertising 30. ___________________ attempts to convince you with __________________. 31. __________________ appeals to your ______________. Facts and information Emotional advertising feelings Introduction to Business

28. Study Advertisements An ad that says “The best buy in town!” won’t necessarily help you become a smarter consumer. (Emotional Advertising) An ad that says “9 oz. Sparkle-Plenty Toothpaste, $1.99” might be very helpful. (Rational Advertising) Introduction to Business

29. “100 percent fruit juice; 8 ounces gives you 75 percent of your daily requirement of Vitamin C.” Is this statement rational or emotional? Introduction to Business

30. One ad reads: “The best buy in town. Sale ends today!” Is this statement rational or emotional? Introduction to Business

31. You see a sign that reads “CD Bargain Bin. Regular $7.95, on sale for $5.95.” Is this statement rational or emotional? Introduction to Business

32. Read Consumer Publications 32. Magazines such as Consumer Reports and ConsumersResearch Magazine give detailed information about goods that have been _______________________. 33. __________________________ are good places to find these sources of consumer information. Tested and rated by them Libraries and online services Introduction to Business

33. Shop at Sales 34. Some shopping experts say that the average consumer can save up to _______ by taking advantage of sales. 35. A _______________ is one that gives you a special buy on a new product or a product that’s in season. 15% promotional sale Introduction to Business

34. Shop at Sales 36. A store might have a ____________ to clear out goods that are going out of season or are no longer profitable in order to make room for new merchandise. 37. During sales, look for products that are advertised as _____________________ _____________. These advertised specials are called _______________. Clearance sale Selling at a loss or below cost Loss leaders Introduction to Business

35. Use Shopping Lists 38. Impulse buying is purchasing things on the ____________________. 39. A ____________ will keep you from making unnecessary shopping trips and keep you from buying on the spur of the moment. Spur of the moment Shopping list Introduction to Business

36. Resist Pressure and Gimmicks use high-pressure tactics to try to get you to buy 40. Some salespersons ______________ ___________________________ what they’re selling. 41. ______________ are meant to grab your attention and get you into the store or draw you into buying something. 42. Always _______________ any deal or bargain that seems too good to be true. Sales gimmicks Closely examine Introduction to Business

37. Read Labels and Warranties You might find information on the label 43. ______________________________ that will make you decide not to buy the product. 44. A ___________ is a legal document that states the ____________________ agreed to by the consumer and the store or the manufacturer. Warranty Rights and responsibilities Introduction to Business

38. Read Labels Warranties 45. ____________ are usually good for a ________________, such as 90 days or one year. 46. ________________ cover only ______________ of a product. Full warranties Stated time period Limited warranties Certain parts Introduction to Business

39. Fast Review • What is the difference between rational advertising and emotional advertising? Introduction to Business

40. Fast Review • What two consumer magazines are good sources of information about products? • 3. Why do stores have clearance sales? Introduction to Business

41. Fast Review • What is the difference between a full warranty and a limited warranty? Introduction to Business

42. Business Building Blocks Developing Listening Skills In business, good communication spells success. Active listening is an important part of good communication. You can learn and improve active listening. continued Introduction to Business

43. Business Building Blocks Checklist for Active Listening When you’re listening, do you: • Fidget? • Ignore things that could distract you? • Keep your eyes on the speaker? • Concentrate on what the speaker is saying? continued Introduction to Business

44. Business Building Blocks Checklist for Active Listening • Pick out the important ideas and think about how they’re related? • Summarize the ideas in your head? • Take notes to help you focus and remember? continued Introduction to Business

45. Business Building Blocks Checklist for Active Listening • Ask the person to repeat or explain something that isn’t clear to you? • Avoid interrupting before the speaker is finished talking? • Avoid thinking of what you’ll say next? continued Introduction to Business

46. Business Building Blocks Checklist for Active Listening • Pay attention even if you think the person’s words don’t interest you? Introduction to Business

47. End of Chapter 22 Making Consumer Decisions pp. 354-369

48. Key Words loss leaders impulse buying warranty Introduction to Business

49. Key Words brand name generic products comparison shopping unit price promotional sale clearance sale continued Introduction to Business