Chapter 22: Making Consumer Decisions

Consumer Choices

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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.

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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.
    • 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.

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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.

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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.

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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.

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How to Be a Smart Consumer

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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.

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