CONSUMERISM

I. Consumer GroupsA. Young People (13-19

years old)1. 29 million in the USA2. What are things they buy?

B. Singles (20s - 40s)

1. What do you think they buy?

2. Expenses usually high and often spend more on luxury items if live with parents

I. Consumer Groups

Factors that affect spending Factors that affect spending for for

ALLALL age groups: age groups:

•Size of Income•Future Expectations•Social Influences

–Conspicuous Consumption–Materialism

SIZE OF INCOME

• General Effects: people with high incomes will spend more and on different things

• Low Income: Spend $$ on G/S they need to survive = Necessities

• High Income: Spend $$ on items that add to their enjoyment of life = Luxuries

FUTURE EXPECTATIONS• What does the future have in store for you?• EX: I want to buy a car:

What questions do I ask myself about Future Expectations?

If I expect to lose my job, then I will hold off on buying

If I expect a raise/bonus, then I might buy a nicer car

If I think the price will go down, then I will wait to buy

If I think the price will go up, then I will buy now

SOCIAL INFLUENCES: CONSPICUOUS CONSUMPTION• Spending $$ to impress

others• You want to stay on the

same level as your friends and neighbors

• “Keeping up with the Joneses”– EX: Buying a sweatshirt you

don’t need/can’t afford just because your friends have them

MATERIALISTIC• more concerned with

material things (money and possessions)

• Spend non-essential g/s• Ask yourself these

questions:a. Do I need it?b. Can I get along without it?c. Is it worth the time and effort I

spent working to earn the money I am going to pay for it?

Selling and Advertising to Consumers

Examples: • Why is it that people will buy Bottled Water for

$4.00 at a restaurant when they could have tap water brought to their table for free?

What are some names and slogans of products?

Sales Techniques Create Demand

A. Personal Selling– Sales Person /

Representative– One-on-One– Relationship – Attention and

Information– EX: Car Dealer,

Perfume

B. Advertising– Logo, mascot, etc.– Colors, images– Words / font – “sale” “value”– Price– Fantasy – EX:

Sales Techniques Create Demand

C. Packaging– “try me” “push here”– Clear box!– Age, size, shape, color– Lettering / font – “some assembly

required” – EX:

D. Public Relations (PR)– Be known to the public– Create relationship

with public– Sponsor teams– Advertise on t-shirt– Billboards / stadiums– EX:

Sales Techniques Create Demand

E. “Let the Buyer Beware”– Bash the other choices

/ competition– Come buy from us, not

from them– EX:

Advertising to Create Demand

• Appeals to Emotion– Tries to touch your

FEELINGS– EX: Donate to

starving children - appeals to what feelings?

– Name another product.

• Desire to Conform– Bandwagon– Peer pressure– Fitting in with

everyone else– Everyone has one…

you should too!!

Advertising to Create Demand Pt. 2

• Brand Names– You know the name– Reliable, “Trust”– Slick logos and slogans– Repeated over and

over– EX:

• Getting Something for Nothing– BOGO Buy one

get one free– Way to sell off

surplus– 1/2 off– EX: Free gift for

opening a new bank account

Pros and Cons of Advertising

• PROS– “Save” money thru sales

and discounts– “Save” time– Provides product

information– Encourages demand– Encourages competition

• CONS– Raises selling price– Gives misleading

information– Encourages impulse

buying (buying without thinking)

Getting the MOST for your money

• On a BUDGET you MUST plan ahead– A budget is a plan for how you spend your $$

A. Plan Ahead & Compare Prices - research the product on the internet, ads or word of mouth (ask friends) so you can budget your $$$$

B. Use Price per Unit Pricing - In supermarkets prices are on the shelves in price per unit and let you compare prices easily

Example of Unit Pricing

• A 7.75 oz. package of Chickpeas costs 65 cents

• When you compare them to other packages of Chick Peas you use the per pound price since the size and prices of other packages may be different.

Getting the MOST for your money part 2

• Buy Store Brands– sometimes called “generic”– They can often have the same quality, taste, and

quantity for less money– Sometimes they are even made by the same

company that makes the name brand

4 words to guide your shopping habits

• KNOW– what you want– what you can afford

to spend

• PLAN– Make a list– Compare prices– Shop around

• READ– Product labels– Advertisements– Contracts (Fine Print)

• “SAVE”– Coupons– Look for Clearance

sales– Watch interest rates

WARNINGS!!!!

• Be careful of installment plans - you don’t own the item until you finish paying off the installment payments

• Watch interest rates - Introductory rates may be low but 1 late payment can quadruple your interest rate

• EX:”Own a HD DVD player! Only $50 down and $5 per week!”