Your Role as a Consumer

Consumption, Income, and Decision Making

Mr. CargileMission Hills High

SchoolSan Marcos, CA

Mr. CargileMission Hills High

SchoolSan Marcos, CA

Mr. Cargile

Mission Hills High School

San Marcos, CA

Mr. CargileMission Hills High

SchoolSan Marcos, CA

Consumption, Income, and Decision Making

Consumerism: The movement to educate buyers about the purchases they make and to demand better and safer products from manufacturers.

Consumer: Any person or group that buys or uses goods and services to satisfy personal needs and wants. To be a consumer

you must have the ability to consume…Income!

Disposable Income Income remaining for a

person to spend or save after all taxes have been paid.

Needed to buy: Necessities Extras

Disposable Income Income remaining for a

person to spend or save after all taxes have been paid.

Needed to buy: Necessities Extras

Disposable and Discretionary Income

Discretionary Income Income a person has left

to spend on extras after necessities have been bought.

-- =Disposable Income Expenses

Discretionary Income

What happens when you receive a pay raise? What happens when you cut energy expenses? What happens when you leave your full-time job for

a lower-paid part-time job to finish school faster?

Decision Making as a Consumer

Do I purchase the item or not? What scarce resources are at risk? What is my opportunity cost of buying the item?

Quality vs. Price Efficiency vs. Durability

Make a rational choice

Your Role as a

Buying Principles or Strategies

Gathering Information Use Advertising Wisely Comparison Shopping

Gathering Information

Develop a Knowledge Base Test out different products Go to different stores to see different products Internet

How much information do you need? Opportunity Cost of information = time Gather only worthwhile information—time should

not be greater than value of information.

Competitive Advertising: advertising that attempts to persuade consumers that a product is different from and superior to any other. Purpose=take customers away or keep customers

Examples: Dell or Nike Informative Advertising: advertising that benefits

consumers by giving information about the product—price, quality, special features.

Bait and Switch: advertising that attracts consumers with a low-priced product, then tries to sell them a higher-priced product. Deceptive and illegal

Does the ad only appeal to my emotions or does it provide facts?

What are the special features of the product? Do I need any of these features?

Does the ad tell me anything about operating costs? Does the ad tell me anything about a product’s

durability, or ability to last? Does the advertised price compare favorably with

the price of similar products? Is the advertised price the entire price, or are there

extra costs in small print?

Comparison Shopping—getting information on the types and prices of products available from different stores and companies. Warranties: promises 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.

Brand Name Vs. Generic Brand Name: word, picture, or logo on

a product that helps consumers distinguish it from similar products.

Generic: general name for a product rather than a specific brand name given by the manufacturer

Consumerism

Consumer Rights

JFK developed 4 consumer rights principles we follow today: The right to safety—government checks out

all goods. The right to be informed—government

checks against fraud The right to choose—government allows

competition The right to be heard—government listens to

complaints Nixon added a 5th:

The right to redress—government or the manufacturer makes an adequate payment or exchange for faulty products.

Report problems with products

Ethical Behavior—acting in accordance with moral and ethical convictions about right and wrong when dealing with businesses, services, or products.

http://oceans.greenpeace.org/en/the-expedition/news/trashing-our-oceans/ocean_pollution_animation