Consumer Education

1. Consumer Education Chapter 7

2. Buying Goods and Services Section 7-1

3. Advertising, Marketing, and Selling Techniques • People who sell you products have many techniques they use to get you to actually buy the product. • These techniques are often used because THEY WORK! • Have you ever experienced any of these techniques?

4. Food Styling • Advertisements for food have a “food stylist” construct the food to make it look appealing. • They use glue, paint, scissors, pins, cardboard, etc. to make that food look the best it can. http://www.youtube.com/v/fUjz_eiIX8k

5. Photo Editing • Magazine covers and advertisements for items are often edited to look even more “amazing”. • They will edit movie stars and even models to make them more attractive and often thinner. • Just like food styling, they can often edit photos to improve lighting, colors, etc. so that the product looks better.

6. Reciprocity (Guilt) • If you give someone something of value for free, the consumer feels an obligation to return the favor. • Example: getting a dollar in the mail to complete a survey. They person may feel bad taking the dollar and not completing the survey. • Example: sending free address labels and thanking them in advance for their donation to the charity. • Example: sending Christmas cards to customers so that in the future they feel bad for not visiting your store for awhile because that gesture was so nice.

7. Scarcity • Scarcity works by telling the consumer that there is a limited amount of the item available. • Example: When you see “Available for a limited time only.” Consider the Disney “Vault”. • Example: Going out of business sales. • Example: “Hurry, quantities are limited.”

8. Bandwagon • Bandwagon involves getting prospective customers to believe that “everybody’s buying this.” • Have you seen or heard these examples of advertisers using the consensus tactic? • “Join millions of people buying this product” • “Record Sales” • “Unbelievable response!” • “Newest creation sweeping the nation”

9. Endorsements • Companies often hire famous people to endorse their products. They hope that if you will take the celebrities word and trust that this product must be great.

10. Sex Appeal • Using photos of very attractive men and women sells products! • Beautiful people, beautiful products!

11. Slogans/Jingles Slogans Jingles • Slogans are what a company comes up with so that it sticks in your mind and makes you more inclined to remember that product and buy it later. • Examples: • They're gr-r-reat! • Taste the rainbow • life's short, play more • Good to the last drop • A jingle is a short tune used in advertising and for other commercial uses. The tune often sticks in your head. Slogans can be part of the jingle. • Example: • State Farm Commercial

12. Testimonials • Testimonials will use ordinary people to give you their approval of a particular product or service.

13. Loss Leaders • Loss leader is a product sold at a low price (at cost or below cost)to stimulate other profitable sales. They use the loss leader to get you in the store and hope you will buy more products.

14. Bait and Switch • Bait-and-switch is a form of fraud, most commonly used in sales. First, customers are "baited" by advertising for a product or service at a low price; second, the customers discover that the advertised good is not available and are "switched" to a costlier product.

15. How to be a smart shopper Section 2

16. Sales, Rebates, and Coupons • Sales will decrease the price of an item without having to use a coupon. • Rebates are when you usually have to mail in a proof of purchase and a particular form and then the company will mail you the rebate check! • Coupons can reduce the price of a product and save you money. You cut coupons out of newspapers, magazines, or print them from the internet.

17. Sale

18. Rebates

19. Coupons • Extreme couponing is hard and takes A LOT of planning. • Coupons have an expiration date! • Be careful to not start buying things you don’t use just because you have a coupon for them. • Sometimes coupons require you to buy a lot (maybe 5) before you save anything. Only do that if you are going to use the product and not let it expire on your shelf.

20. Layaway • Layaway is a way to purchase an item without paying the entire cost at once. You will pay a portion of the cost first, then continue to make payments until the item is paid off. Then you can pick up your item from the store!

21. Sweepstakes • Entering a free drawing to win a prize. You must win that prize by chance, not skill. • The prize can be a car, money, a vacation, or anything else of value. • Make sure there is no “entrance fee”, because that would make it gambling and not free sweepstakes. • Some sweepstakes make you collect things like bottle caps, stickers from their magazine, and then mail them in for a chance to win. Be careful of the accumulating cost of this.

22. Buying Online • Be secure. • Only use sites that are safe and don’t appear questionable. • Do a quick internet search to see if there are any bad reviews from that site. • Use credit cards instead of debit cards. • Don’t give hackers direct access to your bank account. You can always call the credit card company if you have been hacked. • Bargain hunt. • Compare different sites with the same products. • Be careful of shipping costs. • Don’t let them rip you off! • Search for coupon codes. • You can get $ off your purchase. • Print out verification of your purchase. • Have proof that you bought the item!

23. Comparison Shopping • Check different stores for different prices. • Compare prices in the store to prices online. • Check the weekly sales flyers for places like Boyer’s, Weis, and Giant. • Wal-Mart will match the lowest price you find! Bring the sales flyer!

24. Brand Awareness • How important is that name brand to you? • Think of items where you would be content with buying the generic version. • Sometimes the generic version is made in the same place, with the same ingredients, just using different packaging! • When you buy name brand, you will pay more. You pay for their advertising.

25. Brand Awareness

26. Brand Awareness If you bought all of these generic items compared to the name brand items, you would save $64.00. What could you do with that extra $64?

27. False Advertising and Disclaimers • Be careful of believing everything an advertisement claims it will do. Look for disclaimers! • Disclaimers-a disclaimer will let the consumer know that whatever the product is claiming to do, may not actually happen. They are usually in fine print.

28. Warranties • A promise by the company to remedy any problems you have with the product. (they will fix, replace, or reimburse depending on the warranty) • Warranties can come with the product or be bought, (ex. an extended warranty.) • Sometimes it is smart to buy the extended warranty and sometimes it is not needed. • How long is the free warranty? • Will the product be outdated if I buy the new warranty? • How much is the extended warranty and what will it cover? Is it worth it?

29. Consumer Complaints Section 3

30. Problems with Purchases • Dissatisfaction • Defective • Unexpected costs • Deceptive pricing • Unsatisfactory repair service • Fraud—dishonest business practices that are meant to deceive, trick, or gain an unfair advantage • Telephone and mail scams with fake prizes • Travel packages • Work at home schemes • Fake investment opportunities • Fraudulent diet products

31. How to Resolve a Problem with a Product • Return to the Place of Purchase—bring sales receipts and keep calm but be persistent • Contact Company Headquarters—if the store you bought it in cannot fix your problem, then contact the company who makes the product

32. How to Resolve a Problem with a Product • Consumer Agency Assistance— • Better Business Bureau can tell you about other customers who had experiences with the store (better before you buy) • Consumer Product Safety Commission—report products that can have malfunctions and be dangerous • Food and Drug Administration—report products that have been unsafe

33. How to Resolve a Problem with a Product • Legal Action • Small Claims Court—court that deals with legal disputes that involve amounts below a certain limit. There are no lawyers or jury. • Class-Action Suits—if many people have the same complaint, they may all enter a lawsuit under one lawyer. • Get a lawyer • Check for a legal aid society—a network of community law offices that provide free or low cost legal assistance.

34. Consumer Complaints • Make sure you document the process—get names of people you speak to, receipts, dates, copies of letters/emails you send, any fee you must pay

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38. What technique is this? Cole’s hardware advertises an amazing lawn mower at a extremely low sale price. When you go to the store the sales person says that they no longer have them and he makes you buy the $100 more version.

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