Consumer Choices

Buying Goods and Services

• A consumer (a person who selects, purchases, uses, and disposes of goods and services) is faced with many buying options.

• Consumers must make many decisions about buying goods and services.

  • They must decide what, when, and where to buy, and how much to pay.

Deciding What to Buy

• Consumers must first decide what product they want to buy.

• Then they can choose to buy either a brand-name product or a generic product.

  • A brand name is the trade name for a product or service produced by a particular company.

  • Generic products are plainly labeled, unadvertised products that are sold at lower prices than brand-name goods.

Deciding When to Buy

• Prices for many items change during different times of the year.

• Postponing or planning a purchase can sometimes save you money.

• Stores often run special promotions during and after holidays, just before a school year begins, and at the end of a season.

Deciding Where to Buy

• Along with choosing what to buy, consumers have to decide where to shop.

• There are three factors that affect a consumer’s decision on where to shop: the kinds of goods and services sold, prices, and convenience.

• Department stores sell a wide variety of goods.

  • Because they offer name brands and customer service, their prices may be higher than other types of stores.

• Discount stores also sell a variety of goods.

  • However, discount stores generally offer lower prices

• Off-price and outlet stores carry well-known brand names at bargain prices.

• Limited-line retailers, or specialty stores, sell an assortment of goods in one product line or a few related lines.

• Superstores are like supermarkets but sell items such as books, hardware, sporting goods, and clothing as well as groceries.

• Convenience stores provide easy access to products that consumers often buy as necessities or impulse items.

• Warehouse stores carry a huge selection of food and nonfood items at low prices and in bulk quantities.

• Consumers can shop at home through TV channels, catalogs, or the Internet.

Deciding How Much to Pay

• Comparison shopping is an important factor in buying products or services.

  • Comparison shopping is comparing the prices and the characteristics of competing brands or stores.

• It is most important for major purchases because the difference in cost can be significant.

How to Be a Smart Consumer

Preparing to Shop

• Consumers have to decide what a bargain is to them.

• You can become a smart consumer by planning in advance.

• Before making a purchase, a smart consumer should

  • study advertisements.

  • read consumer publications.

  • shop at sales.

  • use shopping lists.

  • resist pressure and gimmicks.

  • read labels and warranties.

• A promotional sale is one that offers a special buy on a new product or a product that is in season.

• A clearance sale is a sale to clear out goods that are going out of season or are no longer profitable.

• Loss leaders are advertised products that sell at a loss to bring customers into a store.

• Impulse buying is the act of making unplanned purchases.

• A warranty is a written guarantee from the manufacturer or distributor that states the conditions under which the product can be returned, replaced, or repaired

  • Implied warranties are unwritten guarantees that cover certain aspects of a product or its use.

  • Express warranties, which are usually written, come in two forms.

    • Full warranties state that the seller will repair or replace a product that does not work, usually free of charge, or give a refund.

    • Limited warranties cover only certain parts of a product.