Chapter 22: Making Consumer Decisions

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.

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.

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.

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.

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.

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.