your role as a consumer. disposable and discretionary income consumer- anyone who buys or uses good...

Your Role as a Consumer

Disposable and Discretionary Income Consumer- anyone who buys or uses

good or services– Depend on the available income

Income can be disposable and discretionary– Disposable- money left over after

taxes- use to buy necessity– Discretionary- leftover income can be

saved or spent– Disposable income – Expenses =

Discretionary Income Influences on consumption: Education,

Occupation, Experience, Health, Location, Wages

Requires constant decision making

Disposable and Discretionary Income

Figure 3.1 Consumer Spending

The circle graph shows how Americans spend their income.

Disposable and Discretionary Income

Figure 3.3 Earning Power

The number of years you are educated has a direct effect on your income.

Continued on next slide.

Decision Making Decide what to buy or not to buy How much do you really think about it? Parts

–Scarce Resources- time and income

–Opportunity cost- next best alternative

–Rational Choice- what is the alternative that has the greatest perceived value?

Goal- best quality at the lowest price Not all choices require this process

– Some are simple and easy to make

Gathering Information Need information about a product Some information is common

knowledge and the choice is instant Information can be costly because of

the time factor– It is worthwhile to collect the

information– Get accurate information- life-long

skill– Internet is a great research tool

More you shop, the more knowledge you gain

Sharpens your skills

Using Advertising Wisely

Everywhere (TV, Radio, Internet, Posters, etc.)

Ads that tries to get you to buy things are called competitive advertising

Informative advertising gives you information about the product

Learn- existence, price, quality and special features without spending much time

Bait and switch- attracting consumers with one deal and the ‘switching’ to another product once they reach the store

Deceptive advertising is legal– Use more examples of deceptive

advertising

Continued on next slide.

Comparison Shopping

When you look at different stores and products is called comparison shopping

Heaviest influence is price Warranty- promise to repair or

replace a product– Different types- limited, full, and

merchant ability Brand names vs. generic products

Consumer Rights Consumerism- movement to educate

buyers Businesses are responsible for product

safety and accurate advertising 1962 President JFK stated these

Consumer Rights:– Right to safety– Right to be informed– Right to choose– Right to be heard

Later added by President Nixon:– Right to redress

Help for Consumers People have the right to complain

to producers and sellers (can sue) Better Business Bureaus-

give information to customers and help settle disagreements

Consumer Responsibilities

Consumer must start the process– Report the problem immediately– State the problem and suggest

solution– Include details (receipts)– Describes Action– Keep Accurate records– Allow reasonable time– Contact manufacture in writing

(keep copies)– Stay calm, be patient

Ethical Behavior- moral behavior with respect to the rights of producers and sellers (no false claims)

Continued on next slide.