Making Consumer Decisionspehs.psd202.org/documents/rrodrigu/1538662626.pdf · Brand Name vs....
Transcript of Making Consumer Decisionspehs.psd202.org/documents/rrodrigu/1538662626.pdf · Brand Name vs....
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Making Consumer Decisions
Chapter 22
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In your opinion, what are the pros and cons of brand name and generic products?
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Brand Name vs. Generic
Brand Name – word or name on the product that distinguishes it from competitors.◦ Usually in colorful displays or cartoons
◦ Nike swoosh, McDonalds’ Golden Arches
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Brand Name vs. Generic
Generic – plainly labeled, unadvertised, and sold at lower prices.◦ Most are either medicines or grocery items
◦ On the average, generic products cost 40 percent less than name-brand products.
Why?
The name main reason is because they are not advertised but are usually the same as brand name.
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Which would you buy?
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Can you identify the company?
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When to buy?
Winter clothes◦ Why?
Summer clothes?◦ Why?
A new car◦ Why?
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Where to buy?
Department stores◦ Sell a wide variety of goods
◦ Have different “departments”
◦ Examples
Sears
JC Penny
Discount stores◦ Sell wide variety of goods, but at lower prices
◦ Offer fewer services, but stock a lot of merchandise
◦ Examples
K-Mart, Wal-Mart
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Where to buy?
Off-Price & Outlet Stores◦ Brand name products at lower prices
◦ Items may have flaws or defects
◦ Examples
TJ Maxx
Nike Outlet Stores
Limited-Line Retailers◦ Sell large assortment of goods in one type of product
◦ Examples
Foot Locker
Lids
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Where to buy?
Superstores/Hypermarkets◦ Sell groceries and department store items
◦ Examples
Super Wal-Marts
Meijer
Warehouse Stores◦ Huge selection of food and non-food items
◦ Sold in bulk
◦ Examples
Sam’s Club
Costco
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Where to buy?
Showroom Retailers◦ Samples of products are displayed in a “showroom”
◦ You purchase item, but it is delivered to you at a later date
◦ Examples
American Mattress
Any type of furniture store
Shopping at Home◦ Using Internet, TV, catalogs
◦ Examples
Home Shopping Network
TV Infomercials
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Comparison Shopping
Checking the price and quality of a product in more than one store.
Most important when making a major purchase ◦ Examples
car, computer, appliance, television, etc.
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Which is the better buy?
Tide Detergent
Powder 33 oz $5.15
Powder 87 oz $11.55
•Unit Price: the cost of an item for a standard unit of
measurement
• per ounce
• per pound
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Which is the better buy?
Tide Detergent
Powder 33 oz $5.15 $.1561/oz
Powder 87 oz $11.55 $.1328/oz
www.netgrocer.com
Unit Price
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Being a smart consumer
Rational advertising◦ Ad tries to convince you using facts
◦ Mac vs PC
Emotional advertising◦ Ad tries to appeal to your feelings
◦ Nike Training
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Being a smart consumer
Read consumer magazines◦ Consumer Reports
Rate products
Shop during sales◦ Can save up to 15%
◦ Promotional sale: give you a special buy on a new product
◦ Clearance sale: sale to clear out goods to make room for new ones
◦ Loss Leaders: advertised products that sell for a loss to bring customers to the store
Wal-Mart is notorious for using loss leaders
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Being a smart consumer
Use shopping lists◦ Cuts down on unplanned purchases
◦ Impulse buying: purchasing things on the spur of the moment
Resist pressure from salespeople◦ Free gifts
◦ Adds on like socks, shoes, shoe laces
◦ Added warranty or services
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Being a smart consumer
Warranty◦ States rights and responsibilities of the buyer and seller
◦ Full warranty
Good for a stated period of time
90 days, 1 year, 10,000 miles
◦ Limited warranty
Cover only certain parts of a product
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What is a target market?
Businesses want to reach a certain group of customers a business ◦ So they decide how to create advertising (commercials, print ads, radio ads, online ads) to aim its marketing efforts and ultimately its merchandise towards.
Target markets are based on:◦ Age
◦ Gender
◦ Interests
◦ What the competition offers
◦ Socioeconomic status