Consumer Choice

Question	Answer
Need	things that are necessary for survival, e.g. water and food
Wants	things that are not essential for survival, but we would like to have
What is Commerce?	Commerce examines how people earn their income, how they spend their money and what goods/services are produced
private want? Collective want?	Private: wants we desire individually Collective: wants provided by government (roads, hospitals)
complementary wants? substitute wants?	C: wants used together e.g. car and petrol S: can be used to replace something else, e.g. glue and sticky tape
Key factors affecting consumer decisions	Service Price Convenience Marketing/advertising gender, age, finance, environmental
3 basic questions before buying a product?	1. do i really want this item? 2. Can i afford it? 3. Is there something better?
Retailers	Sell directly to public
department stores	one type of retailer, usually large stores that sell a variety of goods, e.g. Myer and David Jones
Speciality stores	focus on selling a particular type of good (JBHIFI)
supermarkets	specialise in selling groceries and household goods (Coles, Aldi)
convenience/general stores	smaller stores that are open longer hours, and often attached to a petrol station e.g. seven eleven
Advantages of internet purchasing	Comparison shopping, cheaper products, quick delivery times, Credit card use, purchase for overseas
Disadvantages of internet purchasing	delivery charges, untrustworthy traders, risk of scams, return of faulty product/s takes time and effort
advantages of mail order	range of products often not in retail stores, convenience for consumers who are handicap or live in remote areas
Disadvantages of mail order	Product being different in reality, losing money if product is not delivered,
Merchantable quality	The product is fit for purpose, acceptable in appearance, free from defects, safe and durable
What is a contract?	legally enforceable agreement between two or more persons/parties
3 elements of a contract	Offer: one of the parties offering something in value Acceptance: offeree agrees to proposal Consideration: required to form a valid contract
Bait and switch?	Scam involving advertising a few products at reduced items to attract costumers. When the advertised products quickly sell out, costumers are directed to higher priced items
Unsoliated goods	This involves sending unordered goods through the mail and then demanding payment
Misleading advertising	Using words that are deceptive or claim that a product has some specific quality, when it does not. These actions convey a false impression.
Pyramid scam	Chain letter is a common form. You are required to pay a joining fee with the opportunity to earn quick money as you recruit new members. However, most people just lose their money.
4 legal rights for consumers	1. Safe products: directions for use provided, tested by manufacturer 2. Accurate product information and descriptions 3. Full disclosure of the terms of sale 4. Consumer guarantees and warranties are honoured: expect a refund or exchange if faulty
Accc?	Australia competition and consumers commission is obligated to inform the public so that they are aware of their rights under the law.
ASIC?	Australian securities and investments commission protects consumers in areas of credit, investment, life insurance, superannuation and banking
Ombudsman	Swedish word meaning 'agent'. Someone who has the task of investigating and reporting on complaints
Department of fair trading NSW	Provides information and assistance to consumers on areas such as issues, shopping online, home building and motor vehicle sales
Advantages + disadvantages of cash	A: readily accepted by shops, allows shopping to be quick D: large amounts carried can be stolen, Bank and ATM'S not always available
Advantages + disadvantages of credit	A: Buying now and paying later, provided by a financial institution (bank) D: interest charges, encourage impulsive buying, have to be credit worthy
Advantages + disadvantages of cheques	A: easy to carry, direct and good for large amounts of money D: banks may charge a fee to operate cheque, can be forged
Advantages + disadvantages of direct debit	A: good for charity organisations and regular payments (won't be forgotten) D: not always trustworthy, can add up to be too expensive
Advantages + disadvantages of EFTPOS	A: convenient system, removes problems that occur when using cash D: experience problems if server crashes, magnetic strip on plastic card can be damaged
Cheque: drawee, payee and frawer	Drawee: financial institution that provides cheque account facilities Payee: person receiving money from cheque Drawer: Person who signs and authorises the transaction
Impulse buying	buying something without giving much thought as to whether you really need it
Cash flow	money coming into and going out of a business
interest	extra money you have to pay when borrowing money
scam	an illegal business practice
rip-off	to overcharge or swindle
caveat emptor	a term meaning 'let the buyer beware'
comparison shopping	contracting a number of sellers to obtain the best deal
Business	an organisation that produces and sells goods/services in order to make a profit
Fair go	being treated justly and honestly
5 decisions that people make in their lives (Apart from consumer decisions)	1. Financial decisions 2. Business decisions 3. Employment decisions 4. Legal decisions 5. Environmental decisions
Why is advertising important to consumers?	Advertising plays a major rule in influencing consumer decisions. If the marketing campaign is successful, consumers will THINK that they need the particular product
Purpose of a budget	The purpose is to not spend more than you earn. A budget balances income and expenses.

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	Created by ameliajaneee over 10 years ago