6 Consumer Purchasing Strategies Practical Purchasing Strategies • Timing purchases – Price variations by time of year (seasons) • Store selection – Location, price, selection, services • Brand Comparison – Private-label or store brands (sold by one chain) vs. national brands • Label Information – Open dating (shelf life of products) 6-1
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6 Consumer Purchasing Strategies Practical Purchasing Strategies Timing purchases –Price variations by time of year (seasons) Store selection –Location,
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• Timing purchases– Price variations by time of year (seasons)
• Store selection– Location, price, selection, services
• Brand Comparison – Private-label or store brands (sold by one
chain) vs. national brands
• Label Information– Open dating (shelf life of products)
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Practical Purchasing Strategies
Price comparison
– Unit pricing = standard of measurement
– Coupons and rebates
– More store convenience higher prices
– Ready-to-use products higher prices
– Large is not always best buy (check unit price, usage)
– “Sale” prices not always a savings (anchoring)
– Online sources can save time
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Practical Purchasing Strategies
Warranties
• Written guarantee from manufacturer or distributor specifying conditions under which a product can be returned, replaced, or repaired.
• Express Warranty (usually written); 2 Forms
– Full Warranty (covers entire product; fix or repair for a time)
– Limited Warranty (covers only certain parts of a product)
• Implied warranty (covers a product’s intended use)
– Warranty of title (says seller has the right to sell a product)
– Warranty of merchantability (product is fit for its use)
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Warranties
• Used Car Warranties– FTC requires a “buyers’ guide sticker”
• Tells if car has warranty and, if so, what it covers
– Warranty of merchantability (item fit for intended use)
• New Car Warranties– Basic parts against defects– Power train coverage (engine, transmission)– Corrosion warranty (covers holes due to rust)
• Service Contracts– “Extended warranty”
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Research-Based Buying Major Purchase Decision-making
Process• Phase 1: Pre-shopping Activities
– Problem identification: prioritize needs and wants– Information gathering: information is power! WHERE to go?– Follow the RULE OF THREE (all major products and services)
• Phase 2: Evaluating Alternatives– Price analysis (range of prices and differences in cost)– Comparison shopping (especially complex and expensive items)
• Phase 3: Determining Purchase Price and Selection– Negotiation (cars: start with dealer invoice, NOT sticker price)– Payment alternatives (cash, loan, lease)– Acquisition and installation
• Phase 4: Post-purchase Activities– Maintenance and operation– After-sale service alternatives– Resolution of purchase concerns 6-5
Objective 2 Implement a Process for Making
Consumer Purchases
A Research-based Approach to Buying a Motor Vehicle
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Buying a Motor VehiclePhase 1 – Pre-shopping Activities
• Problem Identification– Focus on real needs (e.g., reliable transportation)
• Information Gathering– Personal contacts– Business organizations– Media information– Independent testing organizations– Government agencies– Online sources
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• Purchase Alternatives (e.g., new vs. used, makes/models, delaying)