Buying Goods and Services

1. Buying Goods and Services Unit 8

2. Consumer Choices • Generic vs Brand name? • Why? • When?

3. Buying Goods and Services • Consumer – person who selects, purchases, uses, and disposes of goods and services • No one has unlimited funds • Must BUDGET • Must decide what, where, and when to buy

4. Brand vs Generic • Brand Name • Trade name for a product or service produced by a particular company • Nike, Kellogg’s, Pepsi • Generic Product • Plainly labeled, unadvertised products sold at lower prices than brand named goods • Kirkland,

5. Deciding When to Buy Prices change throughout the year Shorts – Spring, Summer, Fall, Winter ? A/C - Spring, Summer, Fall, Winter ? Holidays, Special Events Beginning or End of Season

6. Vegetable Prices

7. Deciding Where to Buy • Department Stores – variety of goods • Name brands and customer service • Higher prices • Sears, JCPenney, Macy’s • Discount Stores – variety of goods • Lower prices • Fewer services, large quantities • Wal-Mart, Kmart

8. Where to Buy Continued • Off-Price and Outlet Stores • Well known brand names at bargain prices • Discounts due to flaws, out of season • T.J. Maxx • Limited-Line Retailers / Specialty Store • Assortment of goods in one product line • Variety, high level of service and expertise • Foot Locker, PetSmart, Ace Hardware

9. Where to Buy Continued • Superstores • Self-serve stores that carry a huge variety of products • Wal-Mart, Safeway, Target • Convenience Stores • Easy access to necessities and impulse items • Limited product lines, mostly grocery items • 7-Eleven, Mini Mart

10. Where to Buy Continued 22.1 • Warehouse Stores • Large stores, food and nonfood items • Big selection, bulk quantities, low prices • Costco, Sam’s Club • Shopping at Home • TV Channels, Catalogs, Internet • QVC, Eddie Bauer, Amazon

11. Being A Smart Consumer • What does it mean to be a smart consumer? • What can you do? • What benefits do you gain?

12. Prepare to Shop Study Advertisements Read Consumer Publications Shop At Sales Use Shopping Lists Resist Pressure and Gimmicks Read Labels and Warranties

13. Study Advertisements • Learn to read advertisements • Rational Ads – attempt to convince with info and facts • Persuade to use because it’s the best for purpose • Emotional Ads – appeal to people’s feelings • Make things look like they make you popular • Look for size and price info for comparison • Understand tricks, impulse appeals

14. Read Consumer Publications • Publications that give detailed information about goods and services • Consumer Reports • Consumers’ Research Magazine • Provide Ratings from actual trials for comparison purposes

17. Shop At Sales • Promotional Sales – offers a special deal on something new or that is in season • Clearance Sale – done to clear out goods going out of season or no longer profitable • Done to make room for new merchandise • Loss Leaders – advertised products selling at a loss to bring people into a store • Hope is that people by other items also

18. Preparing to Shop • Use Shopping Lists • Avoid Impulse Buying – making unplannedpurchases • Do not buy anything not on the list • Resist Pressure and Gimmicks • Give yourself time to find analyze the purchase – can you live without it, afford it • Be careful of “Prizes” and “Low Prices” or “Rebates” that have fine print

19. Read Labels and Warranties 22.2 • Labels – read for info that may cause you not to purchase • Warranty – written guarantees from manufacturer/distributor stating conditions for returning, replacing, or repair • Implied – product is fit for use • Express – Written • Full – replace, repair for free for a time period • Limited – only cover parts, may cost for repair

21. Consumer Rights What are your rights as a consumer? What do you do if your new MP3 player doesn’t work?

22. Consumer Bill Of Rights • 1962 – JFK outlined 4 basic rights • Right to be informed • Right to choose • Right to safety • Right to be heard • Consumer Movement – movement to pass laws protecting consumers from unfair and unsafe business practices

23. Consumer Rights • Right to Be Informed • Right to accurate information • Must provide certain details • Complete Ingredients, Fibers used to make • Right to Choose • Competition = variety of goods and services • New products, lower prices, higher quality • Antitrust Laws

24. Consumer Rights • Right to Safety • Product Liability – legal responsibility that manufacturers have to make a safe product • Tools/Appliances must have safety devices • US Consumer Product Safety Commission • Right to be Heard • Right to let store know you are not satisfied • Customer Service Departments

25. New Consumer Rights • Right to Have Problems Corrected • Right to take a defective product back with receipt, for replacement or refund • Ability to contact manufacturer if store does not resolve the issue • Ability to seek Government help for resolution • Right to Consumer Education • Understanding of the Market System • Comparison shopping • Beware of Bait-and-Switch

26. New Consumer Rights • Right to Service • Right to be treated in a respectful and courteous manner • Prompt delivery of quality goods or services • To be served without discrimination

27. Consumer Rights • An automaker recalls its new model after some of its seat belts fail to keep children safe. • A restaurant asks you to fill out a comment card after eating your meal • An advertisement for a new TV informs the consumer about the total cost and interest rate • An electronics store displays three competing brands of computers from which to choose • A shoe store replaces your new shoes after you discover a problem with the soles • Consumer Reports educates consumers who are researching different models of cameras • You pay an auto-repair service to rebuild your car’s engine Safety Heard Informed Choose Problem Corrected Education Service

28. Consumer Responsibilities • What are your responsibilities as a consumer? “If all else fails, read the instructions.”

29. Consumer Responsibility Responsibility To Be Informed Responsibility To Choose Carefully Responsibility To Use Products Safely Responsibility To Speak Out Responsibility To Seek A Remedy Responsibility To Learn Consumer Skills

30. …To Be Informed • Know what you are buying • Read the labels • Ingredients, Content, Materials, Cleaning • Read Consumer Reports and Consumers’ Research Magazine • Ratings on Safety, performance, value • JD Power and Associates = Cars

31. …To Choose Carefully • Make comparisons to find the best product or service at the best price • Reliability, guarantee, budget • Environment Affects • Exhaust, nonrecyclable, pollution • Conserving Resources • Population increase = demand increase • Recycling • Reduce, reuse, recycle – Avoid waste

32. Responsibility To … • Use Products Safely • Read manuals and other materials • Follow recommended dosage, use properly • Speak Out • Let company know when dissatisfied • Report unfair, unsafe, illegal practices in order to protect other consumers • Boycott – refusal to buy goods or services if company has not adequately responded

33. Responsibility To … 23.2 • Seek a Remedy • Get best value for your money • Remedy for defective product • Bring back product for refund, replacement • Contact the manufacturer or consumer organization if store doesn’t handle • Learn Consumer Skills • Read labels, compare prices, pay attention to ads, attend classes

34. Consumer Organizations Consumer Advocates – groups and individuals who work to protect, inform, and defend consumers Available to help if you don’t get the results you want What might you see featured on a TV news program?

35. Consumer Organizations • Consumer Federation of America • Works to inform about consumer issues • Promote policies to benefit consumers • Support legislation, ensure balanced debate • National Consumers League • Provides gov’t, businesses, and other orgs with the consumer’s point of view • National Fraud Information Center (ex - Monitors Internet fraud)

36. Consumer Organizations • Consumers Union • Publishes Consumer Reports • Does tests, no advertising allowed in magazine and no ads can use it as a source • Testifies before government agencies • Major Appliance Consumer Action Program • Helps solve problems with large appliances • Includes most major appliance dealers

37. Consumer Organizations • The Media • Internet, Radio, TV, Newspapers • Consumer reporters that cover issues of importance to consumers • Sometimes feature one consumer’s problem and try to remedy it for them

38. Government Organizations • Federal Trade Commission • Enforces antitrust and consumer protection laws in order to eliminate unfair practices • US Department of Agriculture • Inspects food and grades it • Food and Drug Administration • Regulates labeling and safety of food, drugs, cosmetics, dietary supplements, and medical devices sold in the US

39. Government Organizations • National Highway Traffic Safety Admin. • Sets and enforces safety standards for cars • Forces Recalls • Consumer Product Safety Commission • Oversees safety of products such as toys, cribs, power tools, electronics, furniture, etc • 30% decline in death and injury rates from products in the last 30 years

40. Government Organizations 24.1 • State Public Utilities Commissions • Regulate charges for electric, gas, and water • Legal monopolies so must be monitored • State Insurance Commissions • Regulate insurers and health plans • Control and approve rates, handle complaints • State Licensing Agencies • Provide permits, licenses to ensure consumers the business is qualified • Teachers, doctors, hair stylists

41. Consumer Protection • Dishonest Sellers • Unreasonable Credit Terms • Unsafe Products • Mislabeling of Products All of these are illegal thanks to Consumer Protection Laws

42. Consumer Protection • Price Discrimination Laws • Prevents charging more than one price for the same product in different markets or to different customers without justification • Clayton Act 1914, Robinson-Patman Act 1936 • Fair Packaging and Labeling Act • Manufacturers’ labels must truthfully list all ingredients and raw materials of production • Name, address of manufacturer • Size, weight, contents of a product on the label

43. Uniform Commercial Code • Regulate commercial business transactions • Warranty – promise to meet certain standards • Express – explicitly stated, written or verbal, specifies conditions of return, replace, repair • Full – guarantee of quality, defective product within term repaired/replaced at no cost • Limited – covers only certain parts or product or requires customer to pay some of expense for repairs

44. Consumer Protection • Consumer Credit Protection Act • Credit givers must reveal all term and conditions for products purchased over periods of time greater than 4 months • Finance charges must be given as APR • Truth-In-Advertising Laws • Prevents false and misleading advertising • Truthful and nondeceptive, must have evidence to support claims

45. Businesses Protect Consumers • Better Business Bureau • Nonprofit that collects info, handles complaints • Shares info, distributes consumer publications • Customer Service Representatives • Answer questions, help resolve problems • Advertising • Source of info, comparison of features, prices • Magazines • Source of info, articles help with making choices