CHAPTER 7

CONSUMER EDUCATION
BUYING GOODS AND SERVICES
 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.
 FOOD STYLING

• Advertisement 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.
 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
 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. The 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
 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”.
 BANDWAGON
• Bandwagon involves getting prospective costumers 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 TIS PRODUCT “
 “RECORD SALES”
 “UNBELIEVABLE RESPONSE”
 “NEWEST CREATION SWEEPING THE NATION”
 ENDORSEMENT

• 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.
 SEX APPEAL

• Using photos of very attractive

men and women sells products
• Beautiful people, beautiful
products
 SLOGANS

• 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.
 JINGLES

• JINGLES- 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.
 TESTIMONIALS

• Testimonials will use

ordinary people to give you
their approval of a
particular product or service
 LOSS LEADERS

• LOSS leaders 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
 BAIT AND SWITCH

• Bait-and-switch is a form of fraud, ,most

commonly used in sales. First, costumers are
“baited” by advertising for a product or service at
a low price; second, the costumers discover that
the advertised good is not available and are
“switched” to a costlier product.
HOW TO BE A SMART SHOPPER?
 SALES, REBATES AND COUPONS

• Sales will decrease the

price of an item without
having to use a coupon
 REBATES

• 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

• Coupons can reduce the price of a

product and save your money. You
cut couponed out of newspapers,
magazines, or print them from the
internet
 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.
 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 payment until the item
is paid off. Then you can pick up your item from the
store
 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
 BUYING ONLINE
1. 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
2. Use credit cards instead of debit cards
• don’t give the hackers direct access to your bank account. You
can always call the credit card company if you have been hacked
3. Bargain hunt
• Compare different sites with the same products
4. Be careful of shipping cost
• Don’t let them rip you off!
5. Search for coupon codes
• You can get $ off your purchase
6. Print out verification of your purchase
• Have proof that you bought the item!
 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!
 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.
BRAND AWARENESS
 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
 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 will it cover? Is it worth it?
CONSUMER COMPLAINTS
 PROBLEM WITH PURCHASES

• Dissatisfaction
• Detective
• Unexpected costs
• Deceptive pricing
• Unsatisfactory repairs service
• Fraud-dishonest business practices that are meant to
deceive, trick or gain an unfair advantage
• Telephone and mail scans with fake prizes
• Travel packages
• Work at home schemes
• Fake investments opportunities
• Fraudulent diet products
 HOW TO RESOLVE A PROBLEM WITH
A PRODUCT
1. Return to the place of purchase-bring sales receipts and
keep calm but be persistent
2. Contact company headquarters- if the store you bought it in
cannot fix your problem, then contact the company who
makes the product
3. 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
4. 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 mall 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
 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