Post on 18-Jan-2016
You, The Consumer
How do I contribute to the
economy?
• Consumer– any person or group that buys or uses goods and services to
satisfy personal needs and wants.
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Important Terms You Need to Know
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• Marketing– All the activities needed to move goods and
services from the producer to the consumer.
• Utility– The ability of any good or service to satisfy
consumer wants.
Important Terms You Need to Know
• the types of utility– Form utility
• The conversion of raw materials into goods and services
– Place utility• Having a good or service available where
consumers want them
Important Terms You Need to Know
• the types of utility– Time utility
• Having a good or service available when consumers want them.
– Ownership utility• The satisfaction that comes from owning a good
or service.
Important Terms You Need to Know
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Important Terms You Need to Know
• Disposable income
– money remaining after taxes have been paid.
• Discretionary income
– money remaining after bills have been paid.
Important Terms You Need to Know
• Rational self-interest– Individuals try to maximize the expected
benefit achieved with a given cost or to minimize the expected cost of achieving a given benefit.
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Consumer Spending
• 32% Housing and household operation• 14% Food• 5% Clothing• 19% Transportation• 5% Healthcare• 5% Entertainment• 9% Life Insurance, Social Security, and
Retirement plans• 11% Other
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Basic Buying Principles
• Gathering Information
• Using advertising wisely
• Comparison shopping
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Consumer Rights
• The right to safety• The right to be informed• The right to choose• The right to be heard• The right to redress
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Types of advertising
• Competitive advertising– Advertising that attempts to persuade
consumers that a product is different from and superior to any other.
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Types of advertising
• Informative advertising– Advertising that gives information about a
product.
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Billy Mays
Vince
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Types of advertising
• Bait and Switch (deceptive advertising)– An ad that attracts consumers with a low-
priced product, then tries to sell them a higher-priced product.
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A few more terms
• Comparison shopping– getting information on the types and prices
of products available from different stores and companies.
• Warranty– promise made by a manufacturer or a seller
to repair or replace a product within a certain time period if it is found to be faulty.
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• Food and Drug Administration (FDA)
– Government agency that protects the public against impure and unsafe foods, drugs, and cosmetics.
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• Brand name– word, picture, or logo on a product that
helps consumers distinguish it from similar products.
• Generic brand– general name for a product.
A few more terms
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Rules for the Supermarket
• Work the edges– The healthiest foods are found along the walls. Dairy,
meats, produce, and seafood are found there.
• Look high and low– Supermarkets charge “slotting fees” for the prime
real estate on the shelves. That is why the Kellogg’s, Krafts, and Proctor & Gambles have products at eye level. The healthy foods are usually located on the top or bottom shelf.
• Long lines means you buy more– You are 25% more likely to buy the sodas and
candy around you if you have to wait in a long check out line.
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Rules for the Supermarket
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FDA Regulations
• Canned pineapples can contain up to 20% moldy fruit.• Canned tomatoes can contain up to 5 fly eggs or 2 maggots per
500 grams.• Frozen broccoli can contain up to 60 mites per 100 grams.• Ground cinnamon can contain up to 400 insect fragments and
11 rodent hairs per 50 grams.• Peanut butter can contain up to 30 insect fragments or 1 rodent
hair per 100 grams.• Popcorn can contain up to 1 rodent pellet in one sample or 2
rodent hairs per pound.• Potato chips can contain up to 6% rotten potatoes.