Consumer Purchasing

1. Consumer Purchasing Chapter 4

2. I have no money, no resources, no hopes. I am the happiest man alive. - Henry Miller Anybody who thinks money will make you happy, hasn't got money. - David Geffen

3. What Influences Your Buying Decisions? • Come up with 10 factors that could affect your decision to buy or not to buy something • Categorize each of your factors by indicating whether it is a: • Economic • Social • Personal

4. Economic Factors • Prices • Interest rates • Product quality • Supply and demand • Convenience • Product safety • Brand name • Maintenance costs • Warranty

5. Social Factors • Lifestyle • Interests • Hobbies • Friends • Culture • Advertisements • Media (magazines, radio, television, newspapers)

6. Personal Factors • Gender • Age • Occupation • Income • Education • Family size • Geographic • Ethnic background • Religion

7. What kinds of things can you do to get more for your money or increase your buying power? • Trade offs • Buy with a credit card now, instead of buying later • Buy quality online/catalog as opposed to buying cheap at the store • Research the Product • Cheap brands, stores, sizes

8. How do you intelligently go about purchasing a product? • Four phases • Phase 1: Before you shop • Phase 2: Weighing the Alternatives • Phase 3: Making the Purchase • Phase 4: After the Purchase

9. Phase 1: Before you shop • Identify your needs • Gather information • People • Ads and packaging • Reports • Web sites • Be aware of the marketplace • Know the brands and features available • Be familiar with sales, returns, and credits

10. Phase 2: Weighing the Alternatives • Identify what is important to you • Compare prices • Does high/low cost always relate to quality • Do comparison shopping • When buying complex or expensive items • When you are buying them often • When using the Internet, print ads, or mail-order catalogs • Different sellers offering different prices and services for the same product • Product quality or price varies greatly

11. Phase 3: Making the Purchase • Negotiate price • What kind of items can you negotiate on? • Make sure the other person has authority • Decide on credit or cash • Evaluate the source of loan, credit acct., payment period, down payment • Know the real price • What types of things may be added on? • Delivery, installation, shipping

12. Phase 4: After the Purchase • Added costs • Additional maintenance and ownership costs • Always reevaluate your purchase decisions • Consider changes in needs, lifestyle, values, goals, and financial resources

13. Personal Decision Making Process • Complete the activity based on the problem of needing a computer to do schoolwork

14. Need Use of a Computer

15. Smart Shopping Ideas • Timing purchases • Store selections • Brand comparison • Label information research • Price comparison

16. Timing Purchases • Seasonal, buy bargains at certain times of the year • Holidays – things may be more costly • Wait until products have been on the market • Supply and demand

18. Store Selection • Retail store vs. convenience store • Mail order • TV home shopping • Online shopping • Why do this? • Don’t have to leave home, lower prices, offer more than what is at the store, good product info

19. Brand Comparison • Brand names vs. generic • What generic food won’t you eat? • Impulse buying • Displays may be distracting • Buy what you don’t need • What do you buy that you don’t need?

20. Label Information Research • Advertising on product packages • To have “low fat” or “light” must meet govt. criteria • Packages must have: • Manufacturer name/address • Weight and ingredients • Nutritional information • Open dating – freshness and shelf life

21. Price Comparison • Unit pricing • Total price/Unit of measurement • $2.89/12 oz = $.24 per oz • Discount coupons - https://www.youtube.com/watch?v=vbbW6WpXWjw • Manufacturers rebates • Remember • More convenience mean higher prices • Ready-to-use means higher prices • Large packages are usually best buy

22. Advertising 1. Product Advertising • Product name repeated several times, famous people hired to use product, testimonials from those who have used product, and ads carefully aimed to appeal to certain people (certain days, time, and types of programming). Examples: 2. Company Advertising • Emphasis placed on quality of products or services the company sells, warranties and/or guarantees, or social and environmental concerns of company. May be accompanies by catchy slogans and tunes. Examples: 3. Industry Advertising • All producers benefit from advertising Examples:

23. Ad Slogans • Coke • 1900 • "For headache and exhaustion drink Coca-Cola" • 1905- • "Coca-Cola revives and sustains“ • "The favorite drink for ladies when thirsty,  weary, and despondent“ • 2000 • "Coca-Cola Enjoy“ • 2001 • "Life tastes good"

24. Ad Slogans • Pepsi • 1903 • "Exhilarating, Invigorating, Aids Digestion“ • 1906 • "Original real food drink“ • 1908 • "Delicious and Healthful"

25. Advertising Strategies • What are common advertising strategies you see? • Repetition • Celebrities • Target times of day • Personal testimony • Tugging at heart strings • Facts and statistics • Weasel words

26. Advertising • Celebrity Endorsements • Tiger Woods, Ellen, Jennifer Garner, Cosby, Michael Jordan • Mascots – Animals • Budweiser Frogs, AFLAC Duck, Energizer Bunny, GeicoGecko, • Mascots – Objects • Arby’s Oven Mitt, Poppin’ Fresh Doughboy, Scrubbing Bubbles, Kool-Aid Man • Mascots – People • Aunt Jemima, Burger King, Gerber Baby, Keebler Elves, Mayhem (Allstate)

27. Cleveland Municipal Stadium, 1974 • The Promotion: 10-Cent Beer Night • To bring fans to see the miserable Cleveland Indians, management decided to sell 10-ounce cups of beer for only 10 cents at a game against the Texas Rangers • What went wrong: • Management forgot one small detail: drunk people get restless • More than 25,000 fans showed up for the event, most of them already tipsy at the gate • Among the more tame incidents was a woman who flashed the crowd from the on-deck circle, a father-son team mooning the players (good bonding experience) and fans jumping on the field to meet shake hands with the outfielders • In the bottom of the ninth, the Indians tied the game, but never got a chance to win. Fans started throwing batteries, golf balls, cups and rocks onto the field and one even took the glove of the Rangers right fielder. As the player rushed into the stands to get his glove back, fans starting swarming the field to stop him and threw chairs to block his way • The Outcome: • The Indians were forced to forfeit, nine fans were arrested, and the AL president forced the franchise to abandon the promotion idea after understating “There was no question that beer played a great part in the affair.”

28. Comiskey Park, 1979 • The Promotion: Disco Demolition Night • White Sox fans were encouraged to bring old disco records to the park in exchange for a reduced admission price of 98 cents. The records were to be destroyed in between the two games of a doubleheader against the Detroit Tigers • What went wrong • A lot of people wanted to see disco records destroyed. They thought they would get 5,000+, but got 75,000+ showed up • The crowd, who were reportedly heavily under the influence, soon realized that records could double as Frisbees, which naturally led to fans throwing firecrackers and drinks • When the demolition moment came, the explosion was bigger than expected and ended up ripping a hole in the outfield grass. Thousands of fans ran onto the field to join the mayhem, burning banners and throwing objects. The batting cages were even destroyed in the riot • The outcome • The Tigers refused to take the field, forcing the White Sox to forfeit the game. The quick patch job on the outfield left the grass uneven and players complained about it for the rest of the season

29. Dodger Stadium, 1995 • The Promotion: Ball Night • Fans entering the game were given a souvenir baseball • What went wrong: • Turns out baseballs are pretty convenient things to throw. In the seventh inning, fans threw balls at an opposing outfielder when he bobbled a play • The real drama happened in the bottom of the ninth, though. Dodger Raul Mondesi and manager Tommy Lasorda were ejected for arguing a strikeout call, inspiring about 200 fans to throw their promotional balls onto the field • The umps urged the Cardinals to stay on the field, but finally decided to end the game after more fans decided to contribute their gifts to the game • The Outcome: • The Dodgers were forced to forfeit the game, the first forfeit in the National League in 41 years

30. Fifth Third Ballpark, 2006 • The Promotion: Cash Drop • The West Michigan Whitecaps, Detroit’s class-A affiliate, had a helicopter drop $1,000 in various bills from a helicopter after a game. • What went wrong: • People love money more than they love other people. • Two children were injured scrambling for the cash. A girl received a bloody lip being pushed to the ground, while a seven-year-old boy was bruised when he got trampled in the fray • The Outcome: • The boy was taken to the hospital, but released after treatment. The team management summed up the incident by reminding everyone that they had signed waivers

31. Dodger Stadium, 2007 • The Promotions: All-you-can-eat seats • The Dodgers decided to promote obesity by opening up a section of all-you-can-eat seats. Although beer, ice cream and candy are still for sale, most food is just given away. Ticket prices are $35 in advance and $40 on game day • What went wrong: • Not everybody can handle an open buffet of hot dogs and nachos. • One Slate reporter wrote about his experience in the seats, which predictably ended in vomit • Countless other fans have had their evenings end in a similar way • The Outcome: • Despite the upchucking, the seats remain open and usually draw between 2,000 and 4,000 fans a night. In fact, the Dodgers have declared the promotion a success and have reached the second-highest attendance in baseball. Other stadiums have contacted the Dodgers about copying the idea