Understanding Consumerism

• Consuming refers to the purchasing of goods and services to fulfill needs and wants.

Key Terms

• Consumer: Buys goods and services.
  • Example: Buying a house for shelter (need) or designer shoes for fashion (want).
• Good: A tangible product that can be stored.
  • Examples: Packaged food, books.
• Service: A task performed for someone's benefit.
  • Examples: Teaching, transportation, healthcare.
• Need: Essential for survival.
  • Example: Water for hydration, food for energy.
• Want: Purchased for personal satisfaction, not essential.
  • Example: The latest laptop for aesthetics.
• Durable: Products that last long and don't need frequent replacement.
  • Example: Fridge, laptop.
• Non-durable: Products consumed quickly and need frequent replacement.
  • Example: Bread, milk.
• Tangible: A physical item that can be touched and seen.
  • Example: Clothes, phones.
• Non-tangible: A product without physical presence.
  • Example: A haircut.

Needs vs. Wants

• Needs are essential for survival (food, shelter, clothing).
• Wants enhance life but aren't necessary (luxury items, entertainment).

Resources

• Land: Natural materials used to produce goods and services (soil, water, minerals).
• Labour: Human work and effort to produce goods and services.
• Capital: Money, tools, factories, and warehouses used to produce goods and services.
• Enterprise: Starting/managing a business, combining land, labor, and capital.

Concept of Scarcity

• Scarcity is the limited availability of resources to meet unlimited needs and wants.
  • Example: Limited land in a city leading to housing shortages.

Factors Influencing Consumer Buying Decisions

• Customer Service: Good service encourages repeat business.
• Price: Consumers seek the best value for their money.
• Convenience: Consumers prefer shopping centers and online shopping for time-saving.
• Marketing and Advertising: Influences purchases through appealing ads and discounts, potentially leading to impulse buying.
• Gender: Influences product preferences (e.g., females buying cosmetics).
• Age: Different ages want different products.
• Disposable Income: Impacts the types and quality of products purchased.
• Environmental Considerations: Preference for eco-friendly and minimal packaging.
• Social Media: Influencer endorsements impact consumer choices.

Price and Convenience Influence

• Price: Consumers opt for cheaper options, hence businesses adjust pricing.
• Convenience: Consumers prefer easily accessible stores, both physically and online, even if prices are slightly higher.

Shopping Styles

Online Shopping

• Advantages: Variety, price comparison, fast delivery.
• Disadvantages: Delivery charges, security risks.

Convenience Store

• Advantages: Open late, smaller size, accessible location.
• Disadvantages: Higher prices, fewer choices, limited discounts.

Speciality Store

• Advantages: High-quality products, expert advice, product customization.
• Disadvantages: Higher prices, limited product ranges, less convenience.

Supermarkets

• Advantages: Wide variety, high-quality items, free parking.
• Disadvantages: Crowded, fixed prices, less personal help.

Department Store

• Advantages: Accessible locations, range of brands, loyalty programs.
• Disadvantages: Higher prices, impulse buying.

Advantages/Disadvantages of Selling to Consumers

Manufacturers

• Advantage: Higher profit from direct sales.
• Disadvantage: Extra costs for customer service and shipping.

Wholesalers

• Advantage: No advertising costs.
• Disadvantage: Higher costs for customer service, shipping, and advertising when selling to consumers.

Retailers

• Advantage: Easy returns/refunds for consumers if products are faulty.
• Disadvantage: Higher prices for consumers.

Consumer Payment Options

Cash

• Advantages: Fast, widely accepted, no fees.
• Disadvantages: Can be stolen, no refunds if lost or stolen.

Credit Card

• Advantages: Can be blocked if stolen, buy now pay later.
• Disadvantages: Interest charges, overspending can lead to debt.

Cheque

• Advantages: Written record, safe to carry.
• Disadvantages: Takes time to clear, bounced checks cause fees.

Paypal

• Advantages: Fast, keeps bank details private.
• Disadvantages: Fees for international transfers, potential account freezes.

Electronic Funds Transfer (EFT)

• Advantages: Fast, strong security.
• Disadvantages: Hard to reverse payments, can take hours/days to process.

Business and Consumer Payment Preferences

• Safety and Security: Businesses prefer online methods to reduce fraud.
• Safer Purchasing: Features include two-factor authentication and fraud detection.

Types of Scams

• Fraudulent emails/calls/texts: Stealing bank details.
• Online shopping scams: Fake websites stealing money after entering details.
• Pyramid Scheme: Tricking consumers into fake programs.

Consumer Rights

• Right to Safe Products: Must be safe and of acceptable quality.
• Right to Refunds and Repairs: For faulty or incorrectly advertised items.
• Protection from Scams and Fraud: Protection from misleading advertising and product scams.
• Right to Clear Information: Businesses must provide honest information.

Scenarios without refunds

• Change of Mind: No returns/exchanges if you just don't want the product anymore.
• Cooling-Off Period: Can cancel purchases and get money back within a set period.
• Faulty Products: Right to repair, replacement, or refund.