Consumers in A Changing World
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Consumers in A Changing World

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Introductory lecture in consumer economics class

Introductory lecture in consumer economics class

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Consumers in A Changing World Consumers in A Changing World Presentation Transcript

  • Chapter 1 Consumers in a Changing World HACE 3100Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Economy. . . . . . The word economy comes from a Greek word for ―one who manages a household.‖Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Economics… Economics is the study or science of production, distribution, and consumption. (Goldsmith) Economics is the study of how society manages its scarce resources. (Miller)Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Scarcity . . . . . . means that society has limited resources and therefore cannot produce all the goods and services people wish to have.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Society and Scarce Resources: The management of society’s resources is important because resources are scarce. Scarcity implies choice and choice implies cost.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Economists study. . .  How people make decisions.  How people interact with each other.  The forces and trends that affect the economy as a whole.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Consumer Economics… The study of how people deal with scarcity, fulfill needs, and select among alternative goods, services, and actions.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Consumer Economics: Keeps us frommaking poor grooming choices Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Consumer Economics lead to… Careers in consumer protection, consumer advocacy, policy making, education, law, business, management, government, marketing…Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Why Study Consumer Economics? To apply course knowledge to personal decisions.  When you pump your own gasoline what is the last decision you have to make to be a safe consumer?Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Why Study Consumer Economics? To apply course knowledge to social issues.  What recent economic legislation will have an impact on you?  Health care?  Cleaner coal burning technology?  Screening tests for newborns?  Georgia increased its screenings from 13 to 29  Down’s syndrome screening?Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Why Study Consumer Economics? To overcome passivity—to understand and ―own‖ your place in the economy. To become a Consumer Protection Advocate…  Standing up for consumer rights.  One Person Can Make a Difference!  Ralph Nader  Erin Brockovich  YouConsumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • So what????? One of the goals of this class is to make you more aware of your surroundings. To make you your own best consumer advocate; if you don’t educate and protect yourself who will? You need to leave college with a firm grasp of your world: including “the good, the bad and the ugly”……Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Consumers: individuals and groups who obtain, use, maintain, and dispose of goods (products) and services to fulfill needs and increase satisfaction.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Goods and Services Goods: tangible objects (e.g., car) Services: intangible actions of work done: (catering services)Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Satisfaction: Also known as “utility” (satisfaction, well-being)Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Consumers…. obtain, use, maintain, and dispose of…..  Obtain…  Use…  Maintain….  Dispose of….Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Though even obtaining can beproblematic Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • The Road to Consumer Economics… Adam Smith (1776): Author of ―An Inquiry into the Nature and Causes of the Wealth of Nations” stated that: ―consumers act in their own self interest and markets work with the invisible hand.”  The founder of modern economics  Felt consumers should be given the freedom and authority to run their own economic affairs.  The US’s founding fathers liked the idea that wealth should be based on goods and services produced and consumed by consumers.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Capitalism: Capitalism is a social system based on the recognition of individual rights Under capitalism the state is separated from economics (production and trade), just like the state is separated from church/religion. Being able to freely choose among a vast array of commodities gives people a sense of freedom.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Seriously…. Do we truly have a pure Capitalistic society where our choices are made free and clear of government intervention? Examples?Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Consumerism: The belief that goods give meaning to individuals and their roles in society.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Consumerism: How much does this belief drive our consumption habits? Do you buy goods because you care about what others think about your good? Who only shops at name brand stores? Who shops at Walmart? Who shops at Goodwill?Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Goods and Services Remind me again why we buy goods and services? Buying goods and services is an act of trust.  True?  False?Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Goods and Services True, because we assume our purchases will increase our satisfaction; however… Consumption may not always bring satisfaction:  Unsatisfactory products  Injurious consumption (negative in long-run)  Consumer Fraud  Examples?Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Caveat Emptor ―May the buyer beware‖Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Bad Service………….Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Goods and Services to meet HumanNeeds Needs: The barest minimum physical necessities that allow you to survive.  Examples:Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Maslow’s Hierarchy of NeedsConsumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Needs versus WantsConsumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Wants: What people would acquire if their resources were unlimited.  Examples:Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Resources: Things used to produce other things to satisfy people’s needs and wants. Provide the means to satisfy the family system’s demands.  Material resources-(non human)  Examples:  Human resources-(personal characteristics)  Examples:Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Scarcity: Not enough resources are available to satisfy one’s needs and wants and choices have to be made about their use.  Examples of scarce resources?  I WILL ONLY BE AWARDING THE TOP 5 STUDENTS IN THIS CLASS WITH A’S.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • The Consumption Process Because there are so many aspects of consumption it can be thought of as a process.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Consumption Process Awareness–what are needs and wants Thinking—gather information Planning—shopping around Implementing--buying Evaluating–would you re-purchase?Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Awareness A ―stimulus‖ lets us know that something is needed or desired. A broken computer makes us aware another one is needed. Your friend’s Play Station 2 game system purchase makes you aware you want one!!Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Thinking The mental exploration of the possibilities: weighing pros and cons and gathering information about the product in question. Random set of thoughts.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Planning Deciding ―ordered steps of action‖ needed to make the purchase a reality.  Planning on taking $50 from each pay check to pay for it.  Planning on the date you will have the money.  Making a plan to get to the store/or on the internet to make the purchase….Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Implementing You actually sit down at the computer and serf the web for the best price for the product. You go to the store to price the product. You actually put the $50 into the bank each paycheck. Or you really go and make the purchase.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Evaluating Spend time reflecting on your outcome. Is the product in OK condition? Did you achieve some level of satisfaction with your purchase? Compared to something else was this the right choice? Should you make an alternative choice?Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Factors that influence consumers Economics History Consumer culture Individual traits, e.g., age Physiological needs Desire for technology Political area, e.g., government standardsConsumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Economics The condition of national and worldwide economies during times of decision making.  The unemployment rate  Interest rates  Inflation ratesConsumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • History The background history of each person influences his or her decisions. This includes our own personal histories and also the histories of our families. The history of the area in which the person resides influences consumer decision making as well.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Consumer culture Generally refers to patterns of human activity and the symbolic structures that give such activity significance It is the way people live in accordance to beliefs, language, history, or the way they dress Culture includes the groups in which an individual or family resides and their behaviors or traditions.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Individual Traits Age Eye color Hair color/type Weight HeightConsumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Physiological needs Thirst Hunger Safety Housing ProtectionConsumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Desire for technology Technology includes the methods and materials that individuals use to get what they want. Including machines, techniques, material objects, and processes.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Political area Politics affect our economic decision making. Policies impact our consumption…..we have to buy auto insurance but we don’t have to buy health insurance. If the draft is reinstated some of you may buy a one way ticket to Canada.Consumer EconomicsIssues and Behaviors, 1/e HACE 3100
  • Next Class Read Chapter 1: Consumers in a Changing World Yes………lots and lots of people and dates and places and agencies!!! The pain begins immediately do not complain that you have not been sufficiently warned Consumer EconomicsIssues and Behaviors, 1/e HACE 3100