Chapter 15 Consumers and Shopping

1. Chapter 15 Consumers and Shopping

2. Goods Services Needs Wants Merchandising Impulse buying Buyer’s remorse Environmental impact After-sales service Multiple chain stores Voluntary chain stores Department stores Barcodes Customer loyalty cards Debit card Credit card Loss leader Bulk buying Unit pricing Own brands Branded goods 2

3. After completing this chapter and the homework, assignments and activities that accompany it, you should: Be able to define the word consumer and know what goods and services are. Be able to differentiate between needs and wants. Understand the factors that influence consumer decisions. Understand what the terms impulse buying and buyer’s remorse mean. Know what factors should be considered when buying a product. Be able to list the main sources of consumer information. Be able to describe modern shopping trends. Be able to list and give examples of the different types of shops. Describe guidelines for grocery shopping that can help prevent overspending. Know what barcodes and customer loyalty cards are and the advantages and disadvantages of them for you and for the retailer. Be able to describe the different ways we can pay for goods and services and the advantages and disadvantages of each. Know what the following retail terms mean: loss leader, bulk buying, unit pricing and ownbrands. Be able to describe and understand the methods used by supermarkets to encourage you to spend more. 3 Essentials for Living, 3rd Edition

4. What is a consumer? A consumer is someone who buys or uses goods and services. Examples of goods and services Goods: Things Books, CDs, cigarettes, clothes, computer games, drinks, food, heating, lighting, mobile phones, sweets, toiletries, e.g. shampoo. Services: People who do something for you Bin collection, dentists, doctors, education, gardaí, hairdressers, postal services, public parks, public transport, roads, street lighting, taxis. Many services provided by the state, e.g. education and the gardaí, are paid for indirectly through taxation. 4 Essentials for Living, 3rd Edition

5. Needs and wants • Needs are essential goods and services, e.g. food, clothes, shelter, doctors. • Wants are non-essential goods and services, e.g. takeaways, cars, designer clothes. • Nowadays, the line between what is a need and what is a want has become blurred. • Whether something is considered a need or a want will depend on the consumer’s age, their circumstances and their values. • In a family where money is tight, debts build up when wants are bought before needs are paid for. 5 Essentials for Living, 3rd Edition

6. Shopping Shopping is part of our lives, something we do to meet our basic needs and wants. What exactly we buy, however, will depend on a number of factors. Factors that influence consumer decisions Resources (time and money) Peer pressure Fashion trends Advertising Personal values Culture Merchandising 6 Essentials for Living, 3rd Edition

7. Making wise consumer decisions When we buy things on the spur of the moment without thinking, it is called impulse buying. Goods and services bought in this way are often bad buys and ones we often regret. This regret is called buyer’s remorse. When buying goods and services, it is better to think carefully before we buy. The next two slides list some of the factors that should be considered. 7 Essentials for Living, 3rd Edition

8. Factors to be considered when choosing a product Money Value Quality Suitability Durability 8 Essentials for Living, 3rd Edition

9. Factors to be considered when choosing a product (continued) Design Safety Brand name Environmental impact After-sales service Maintenance Size and comfort 9

10. Sources of consumer information Newspapers and magazines articles Advertisements Word of mouth Manufacturers’ brochures and leaflets In the shop, i.e. salespeople inform us. We also get information about products by looking at them ourselves. Internet Text alerts 10

11. Shopping trends • How we shop has changed dramatically over the past 20 years. There has been: • A decrease in counter service shopping, e.g. corner shops • An increase in self-service shopping, e.g. supermarkets • An increase in the number of shopping centres • Increased late opening and Sunday shopping (some shops are open 24 hours) • Better facilities for shoppers, e.g. crèche, parking, cafés • Increased internet shopping 11

12. Self-service vs. counter service 12

13. Types of shops 13

14. Types of shops (continued) 14

15. Shopping guidelines Make a list: Check what is in the house already. Plan meals for the week. Write a list and be as accurate as possible. Group similar items together. Stick to the list and avoid impulse buying. Shop around for good value. Try not to shop too often, as you will end up spending more. Bulk buy for items such as washing powder, toilet rolls, etc. Check expiry dates for freshness. Avoid shopping when you are tired or hungry. Bring shopping bags. 15

16. Shopping technology Supermarkets today use various types of technology to make their service quicker and more efficient. For example: Self-service weighing scales that print the product label Computerised checkouts that scan barcodes and then print itemised receipts Self-service checkout 16

17. Barcodes A barcode is a series of lines and spaces that are read by a scanner attached to a computerised cash register. • Advantages and disadvantages of barcodes: • An itemised receipt allows customers to see exactly what was bought. • Quick stock control. • Goods are not individually priced. 17

18. Customer loyalty cards • Some large chains offer customer loyalty cards, e.g. Superclub, Valuecard. • The card is swiped every time you shop and you build up points towards various ‘gifts’. • The advantage for the shop is that they have your name and address together with a complete record of everything you have ever bought in the store. This information can then be used for marketing purposes. 18

19. Methods used by supermarkets to encourage you to buy • A large trolley is provided for you to fill. Heavy goods such as potatoes are placed at the entrance to encourage you to take a shopping trolley. Mirrors, lighting and colour give fruit and vegetables a wholesome, fresh look. The smell of fresh bread hits you as you enter and makes you feel hungry. Items that go together are placed together, for example ice cream and wafers, toothpaste and toothbrushes. Luxury items are placed at eye level, with essentials lower down. Special offers are displayed away from their usual place to give the impression that they are a bargain. Essential items such as milk and eggs are placed far from the entrance. Background music covers up the hustle and bustle so that shopping seems relaxed. Promotional announcements are made. Sweets and toiletries are placed at checkouts for impulse buys. 19

20. Methods of payment Cash: Cash is still the most common method of payment today. The main advantage of using cash is that you are less likely to overspend and get into debt. Carrying cash is not very secure, however. Cheque and cheque card:Customers can write a cheque if they have a cheque guarantee card. This is a secure payment method, but there is a risk of overspending. Cheques are no longer a commonly used method of payment. 20

21. Debit cards, e.g. Laser The card is swiped or dipped into the card terminal and the amount is entered. The consumer checks the amount and enters their PIN number. The amount is processed and taken from the cardholder’s bank account within a number of days. It is possible to get cash back. Laser cards are secure and convenient, but it is easy to overspend because you are not physically handing over cash. 21

22. Credit cards (Visa, MasterCard) The card is swiped or dipped into the card terminal and the amount is entered. The consumer checks the amount and enters their PIN number. The amount is processed and it goes onto a bill. The bill can be paid in part or in full every month. No interest is charged if the bill is paid in full. Credit cards are secure and convenient and they can be used for online or over-the-phone purchases. It is easy to overspend because you are not handling cash – you can forget just how much you have put on a bill. 22

23. Shopping terms Loss leader: These are goods sold off cheaply by the retailer. It is hoped that these will lead you into the shop, where you will buy more. Bulk buying: Buying a product in large quantities. This is cheaper as long as you use it all. Unit pricing: Goods are priced per unit, e.g. per kilogram. Own brands: Own brands are plainly packaged products, e.g. St Bernard. They are often good quality and much cheaper than branded products. 23

24. What is a consumer? Name four goods that you buy regularly. Name four services that you use or buy regularly. What is the difference between a need and a want in relation to being a consumer? Describe six factors that can influence consumer decisions. What is impulse buying? What is meant by buyer’s remorse? Outline six factors that should be considered when buying a product. List six sources of consumer information. Explain four shopping trends that have occurred in recent years. 24 Essentials for Living, 3rd Edition

25. List three advantages of counter service shopping. List three disadvantages of self-service shopping. Name four different types of shopping outlets and give an example of each. Outline six shopping guidelines that should be followed. What are barcodes? Give one example and one disadvantage of them. What is an itemised receipt? What are customer loyalty cards? What advantage do they have for the shop? Explain six methods that supermarkets use to encourage you to buy more. Describe four methods that can be used to pay for goods. What do each of the following terms mean: (a) loss leader (b) bulk buying (c) unit pricing (d) own brand? 25

26. Assignment 29 Now test yourself at www.eTest.ie. 26 Essentials for Living, 3rd Edition