Warm – Up:

1. What are some of the ways you participate in the economy?

2. Do your actions make a difference in the economy?

• American teens spend about $150 billion annually.

• Video games and electronics are the main spending areas.

• “Tweens” (ages 8 – 14) spend about $43 billion a year.

Chapter 11: Consumer Management

Your Impact on the Economy

• If people buy items from a business, then the business does well.– Hire more employees– Pay higher wages– Purchase supplies– This puts money in the economy and causes

growth

• If people don’t buy, the business does poorly.– Lays employees off– Lower wages– Less money goes into the economy causing

economic slowdown

• The decision you make about what you buy impact the economy.

Making Decisions as a Consumer

• A consumer is someone who buys goods and services.

• Most of the things you buy now are wants.

• There are many consumer options out there.

• What are some of the decisions you have to make when deciding to buy a certain item?

What Is a Wise Consumer?

• A wise consumer makes healthy decisions about what to buy, where to buy it, and when to buy it.– Understand differences between wants and needs– Learn about the item before you buy it– Know how to compare prices– Spend what you can afford

• What should you consider before buying a cell phone or other handheld device?– Provider (Verizon, sprint, at&t, etc.)– Type of phone– Features– Price– Accessories

Steps to Making a Purchase

• Consider all possible options• Identify consequences of each option• Select the best option• Make and implement a plan of action

Shopping Assignment

• Think of something you want right now.• Use the internet search for the item and figure out if

it would be a smart purchase or not. On your own paper answer the following questions.– What is it?– How much does it cost?– Does the cost vary at different stores? If so, what are the

prices?– Read the customer reviews, are they good or bad? Briefly

summarize what people are saying about the product.– Are there any comparable products that you might

consider instead? Which one?– After researching do you still want the product? Briefly

explain your answer.

Virtual Virginia

• Log on to www.virtualvirginia.org and sign in.– If you do not remember your sign in or password

let me know.

• Select the EPF course• Click on content.• Try to complete all four modules.

Recognizing Influences on Consumer Decisions

• An influence is something that affects the way you think and act.– Many things influence what you buy and where

you shop

What Influences You?

• Your primarily influenced by your economic resources and your financial goals.

• You might be influenced what your friends and peers buy.

• You are influenced by your values.– Quality, convenience

• Your are influenced by past experiences

Family and Stage of Life Influences

• Family values, income, the number of family members, and the ages of family members all affect consumer decision.

• The stage of a family also affects consumer decisions.– Young families make different choices that a

retired couple.

Managing Your Resources

• Your consumer decisions are also influenced by your available resources.– Money– Skill and talent– Knowledge– Education– time

Advertising Influences

• Common advertising techniques include:

• Lifestyle ads: ads portray an appealing lifestyle• Celebrity ads: ads use famous people to sell products• Values ads: ads appeal to personal values/try to

convince you that buying and using product demonstrates your values

• Emotional ads: ads appeal to people’s emotions• Comparison ads: ads compare one product directly to a

similar product made by a different company

Shopping Smart

• A Smart Shopper is an informed shopper.• Make sure you:– Understand the product– Know all the places where you could shop– Recognize the difference in prices between

products and stores– Understand the store’s return policy

Impulse vs. Thought

• Impulse buying is when you buys something without thought or consideration.– Can cause you to waste money

• You should:– Research a product before you go to the store– Read reviews or talk to people that have bought item– Be familiar with warranty – written statement that

the product will work

Deciding Where to Shop

• Things like price, convenience, return policies, and the available merchandise influence your decision on where to shop.

• Common types of shopping include:– Internet shopping– Department stores– Specialty stores

Comparing Features, Quality, and Options

• One should also compare construction, features, warranties, and service options.

• Some people are willing to pay a higher price for higher quality

• Many stores sell generic versions of brand-name products for a much lower price.

Tablets in School

• The school system wants to buy tablets for everyone in the entire school system. Dr. Greer and Mr. Graham want your class to help make the decision. Use the internet to research which tablet the school system should purchase.

• You will need to search multiple sites and stores to find a combination of price, features, warranties, etc. Fill in the chart in my folder with your top two choices.

Too Good to Be True?

• Read story in the blue box on page 253.

• Answer the questions at the end and write a brief ending to the story.

• You will not have to present it to the class.

Warm-up

• List of the pros and cons for using the following methods of payment.– Cash– Credit Card– Debit Card– Check

• Which method of payment do you use the most? Why?

Choosing a Method of Payment

• The type of money you use to make a payment depends on the type of purchase.– In person: cash, credit or debit card, check– By mail: check (usually)– Internet: debit or credit card, electronic funds• What are some examples of electronic funds?

Which Payment Option is Best?

• Each method of payment has benefits and drawbacks.

• Cash: you now you can afford what you buy/cash can be lost or stolen with no way to get it back

• Debit Card: convenient/if stolen someone has access to your bank account

• Credit Card: easier to get funds back if lost or stolen/can cost a lot of money in the long run if not paid off in a reasonable amount of time.

Using Cash

• Pros: – Knowing how much money you have– Discounts at certain businesses such as gas stations– Useful for small purchases like vending machines,

tolls, parking, tips• Cons: – Can be lost or stolen– Inconvenient to keep going to bank or atm to get it

Using Checks

• Pros:– Don’t have to carry cash– It is safe to send through the mail– If lost or stolen, you can stop payment on the check

• Cons:– Banks charge for checks– Not every business accepts check (why?)– If you bounce a check, you will end up paying more

in fees

Debit Cards

• A card that takes funds directly from your account.

• Pros:– Convenient, accepted almost everywhere cash is– Safety, requires a pin for use

• Cons:– Bank accounts are more at risk

Credit Cards

• Pros:– Buy now, pay later– May be helpful for large purchases– Builds your credit score– If lost or stolen, fraudulent purchases will not count

against you• Cons:– Can end up costing you a lot of money if not paid off in

a reasonable amount of time.– May have fees for using it

Consumer Rights

• As a consumer, you have certain rights that are protected by law.

• There are federal and state government agencies looking out for your safety and best interest

Right to Safety

• You have the right to be safe from unreasonable risk of injury caused by consumer products.

• Safety Agencies– Consumer Product Safety Commission

• Toys and Clothing

– Food and Drug Administration• Processed foods, drugs, medical, devices, and cosmetics

– National Highway Traffic Safety Administration• Sets highway safety standards

Right to be Informed

• You have the right to be informed about the goods and services you are buying, and to consumer education.

• Federal Trade Commission – responsible for making sure that advertising and labels are not false or misleading

Other Safety Agencies

• Environmental Protection Agency – protects land, air, and water systems

• United Stated Department of Agriculture – responsible for monitoring unprocessed foods

• Federal Aviation Administration – enforces safety regulations with commercial aircraft

• Nation Institute of Standards and Technology – established performance criteria for many consumer products