Name: Tammy TaborConsumer Issues—C. 1—An Economic Foundation & C. 2—Rational Consumer Choices— Assignments—Due: Thurs, Aug 29th, @ Noon (Bold and Italicize your answers (-3)- Worth 52 Points. Ch. 1—An Economic Foundation for Consumer Decisions (worth 22 Points) Section A—Worth 4 points Directions: Analyze a recent consumer decision you made: What was the consumer decision/Purchase? __Stovetop_________________________ 1. Explain how scarcity forced you to make this decision. a. Very limited selection of the size that would fit in the space I have without alterations to my cabinet. b. I needed the color black to match my kitchen. It was being discontinued in the size I needed. 2. Identify the opportunity cost of your choice. a. I would have rather gone to the lake with my grandkids instead of out buying a new stovetop. b. I would have rather being face booking with my friends instead of surfing the web for the availability and price of a stovetop. c. I would have rather added to my savings account instead of taking away from it by purchasing a new stovetop. 3. Describe any ways in which government regulations may have affected your choice. a. I received a tax credit for purchasing an energy efficient stovetop. b. The warranty is directly from the manufacturer which allowed the store to replace the item if it became defective. 4. What tradeoffs were involved? a. I could not repaint the inside of my house. b. I could not buy a new outfit I wanted. c. I could not get a hot tub that I have been shopping for. Section B—Worth 8 points Directions: Answer the following questions. 1. DEFINE WHAT IS ETHICAL BEHAVIOR? Acting in accordance with ones moral conviction as to what is right and what is wrong. Perhaps an easy way to consider ethical behavior is to look at some representative value statements: A. B. C. D. E. I pay for what I get.. Anything is OK if I don’t get caught. I treat others as I wish to be treated. I will buy from socially responsible producers. Give me the lowest price. I don’t care about producers’ social responsibility. What type of individual would follow the above behaviors? Thoroughly explain each in the order listed from above. A. Ethical Someone that pays the price for a product without trying to get a lower price. B. Unethical Someone who returns a broken product even though the 30-day return policy has lapsed and acts like she just purchased it. C. Ethical Don’t expect others to do a task that you would not do yourself. Treat them with respect and courtesy D. Ethical Research the company that you wish to purchase from and make sure they practice ethical policies and behavior. E. Unethical While doing your weekly shopping you come across a product that is missed marked. Instead of bring it to the stores attention you decide to purchase all they have at the lower price. 2. Which would you consider the appropriate ethic behavior? a. Name it: Treat others the way you would want to be treated. b. Explain: I believe and practice this behavior daily. My dad instilled this ethical characteristic in me as a young child. If you stop and think and ask yourself how would this make me feel before you ask others to carry on a task; then you will be able to know how it will affect others. Are your morals correct in doing this task and can you complete the task without questioning yourself. Respecting others will only give you respect back. Section C—Worth 10 points Directions: Identify the opportunity costs of a good purchasing decision vs. a bad purchasing decision you have made within the last year. Good Purchase 1. Item Purchased: Apple Lap Top Computer a. Opportunity costs: 1. I would have rather been enjoying a day at the lake. 2. I would have rather spent time looking at my Pinterest Pins instead of comparing pricing and availability online. 3. I had to open a new credit line with the store to take advantage of their special offers. b. Trade offs: 1. In order to supplement the credit card payment I am not able to go out to lunch. 2. I cannot purchase a new Brahmin purse I want. 3. I cannot purchase a hot tub on credit. c. Hidden costs: 1. Additional software needed. 2. Purchasing extended warranties. 3. Purchasing extra accessories. d. What factors created the difference: 1. Purchasing a lap top computer gave me the freedom to travel and still stay connected. 2. It is very light and compact to save space. 3. It is easy to navigate. e. What would you do differently concerning the bad purchasing decision: 1. I should have picked the laptop with a built in cd player. 2. I should have purchased the extra accessories online instead of in the store. 3. I should have compared prices with online deals, which had better prices. Bad Purchase 2. Item Purchased: Text Books f. Opportunity costs: 1. I would have rather been able to receive the books and look at the condition of them before I purchased them. 2. I would have rather spent my time cooking a nice Sunday dinner for my family instead of searching the textbooks I need. 3. I would have rather gone shopping for a new outfit instead of searching for the best deal on textbooks I need. g. Trade offs: 1. I could not buy that new outfit I wanted due to spending that money on textbooks. 2. I could not have my family over for Sunday dinner and spend time with them. 3. I could not take the time to tan. h. Hidden costs: 1. If I return the books there are extra fees. 2. Express shipping options were offered at additional cost. 3. The condition of the book was not the quality that was offered. i. What factors created the difference: 1. The bookstore on campus was sold out of the book I needed. 2. I was not able to have my books until after classes had started. 3. I ordered the wrong addition of the text book and had to reorder and return the original book. j. What would you do differently concerning the bad purchasing decision: 1. Purchase textbooks from another online site. 2. Start earlier shopping for textbooks online. 3. Checking out the reviews of others that have already purchased from this site. Section D: Worth 15 points (points will be added separately) Directions: You are to view chapter 1 video (Consumerism in America) located within this assignment folder and complete a video/movie review form that is also located within this assignment folder. Consumer Issues—C. 2—“Rational Consumer Choices”--Assignments (Bold and Italicize your answers [-3]) Worth 30 Points. Section A—(Worth 6 Points) 1. Explain each step in the “Rational Consumer Decision-Making Process”. (Name and number each as A, B, C, etc.) A. Consider Transaction Cost: Consider all costs associated with your purchase, such as your time and travel expenses verses a slightly higher price. Is purchasing online or through a mail order catalog truly the best option. Consider the possibility of receiving the product and it being damaged. Do you have to pay return shipping? How long will it take to receive the product back? Do you have the time to wait? B. Do You Really Need It? You must ask yourself if you really need to spend the money for a specific product or do you just want it. Before you make a purchase consider all the things you need. Examine which item may be more of a necessity than the others. Considering the pros and cons of each item needed and set your priorities. You then will be able to make the best decision of what you really need. C. Cost Benefit Analyses: A way to reach decisions in which all the costs are added up, as well as all the benefits. If benefits minus costs are greater than zero, then a net benefit exist and the decision should be positive. Alternatively, if benefits minus cost are less than zero, then a net cost exists and the decision should be negative. D. What Are Values: Fundamental concepts or high-level preferences that regulate our behavior. High-level values determine lower-level tastes and preferences that affect everyday lives. E. Deciding To Act: Knowing when to act is important for you not to lose out on something you want. F. Identifying Alternatives: When making a purchase take time to investigate all your options and everything that you will use with this purchase. G. Committing To A Decision: Once you decide to commit, stick with it, and continue to fulfill your decision. H. Evaluating The Results: After your purchase, time will tell if you have made the right decision or will you have to purchase additional items sooner that you anticipated. Directions: Explain what you would do to complete each step in the rational consumer decisionmaking process if you were considering purchasing a new 72” flat screen plasma television? Be very specific. 2. a. b. c. What would help you realize you need to make a decision? _ Is my current television in good working condition? _ Is there enough space to accommodate a 72” television? _ Is the reception of my current TV poor? 3. What alternative choices can you identify? a. _ By purchasing a large TV will this make me a couch potato? b. _ Will I choose to stay inside to watch TV instead of improving the outside of my home. c. _ I have to decide how to pay for the TV, rather depleting my rainy day fund or opening a store credit card. 4. a. b. c. What information would you gather and how would you use it to evaluate your alternatives? _ What brand has the most star rating. _ Research all reviews that are written for different brands. _ Which companies practices ethical policies and behavior. 5. a. b. c. What steps would you need to take to commit yourself to your decision? _ Evaluate your need for a new television. _ Which payment option will meet my needs. _ Considering the space that this large TV will take up. 6. a. b. c. How would you evaluate the results of your choice? _ Would these features meet my needs? _ Is the picture clear and sharper than my old television? _ Payment options. Section B—(Worth 5 Points) Directions: Do internet research to find the type of television that you would purchase. Answer the following questions. 1. What is the web address that the television is found on? http://m.Samsung.com/us/vid/eo/tvs/UN75ES900FXZA 2. What is the name of the brand? Samsung Why did you choose this brand? I have purchased Samsung products in the past and have no had any trouble out of them. According to the reviews Samsung stand behind their products. I trust Samsung brand. 3. Purchase price? $6999.99 4. What features would make you choose this television? The ultimate viewing experience, stunning picture quality Smart TV with smart interaction Faster web browsing with dual core processor Captivating 2D &3D in full HD 1080p 5. Submit information from the internet concerning your television along with a picture of the 75" Class (74.54" Diag.) LED 9000 Series Smart TV television chosen: Section C—(Worth 5 Points)—Video “How Consumers Decide” Directions: After viewing this video you are to complete each of the following questions with scholarly answers. Questions for Discussion 1. What is your favorite TV commercial? Sonic a. Why do you like it? The two guys on it are very comical. I believe that humor is a good drawing tool. b. How does it make you feel about the sponsor or the product being advertised? That the sponsors of sonic drive in have a great sense of humor and that it must be a fun place to go to. 2. Think about a brand that you like. What do you like about that brand? Braums ice cream offers a large range of flavors. Everyone can enjoy one of its varieties even if you are a diabetic or watching your calorie intake. There is a special formula for you to have. a. What is it that makes you feel that way about it? I believe that Braums is trying to cater to everyone by offering different kinds of ice cream like, premium ice cream, yogurts, no sugar added, and sherbets. b. Has their advertising influenced the way you feel about the brand? I like their advertising. They are very inviting. 3. Name an item you purchased as a status symbol — a way of making a communication about “who you are”, or “who you would like to be”? Brahmin Purse a. What was the item, and what were you trying to communicate? A Brahmin Purse was the item I purchased. I was communicating that I enjoy classy fashion and high quality merchandise. b. Do you think your “communication” was effective? Very much so. I get a lot of compliments from friends as well as strangers. 4. Think about a recent purchase you have made of something that was of special significance to you– something you really were looking forward to having. In buying that item, how were you influenced by “rational” factors such as price or particular features, and how were you influenced by “emotional” factors? Thoroughly discuss. When my husband wanted to purchase a tanning bed for me he did a lot of research. He found the bed that offered collagen bulbs that are designed to fight aging while using the bed. This extra feature was added at no extra cost. You could choose to buy a bed with or without them. He found the best price on the bed and since it was a gift for my Mothers Day I truly did not care about the price. 5. After seeing this video — how can you be a more intelligent consumer? What will you differently now? Always do my research before purchasing products. I will not depend on advertising alone in my decision-making. Section D—(Worth 10 Points)—Video “How Consumers Decide” Directions: After viewing this video located within this assignment folder you are to complete the following quiz. How Consumers Decide Quiz 1. ___True_The program proves that advertisers can “push hidden buttons” in our brains to make us buy things we don’t really want. True or False? 2. D Even if we know one brand is as good as another and costs less; we don’t always buy that brand. Why? (A) We might have an emotional attachment to the more expensive brand, (B) We believe the more you pay, the better the product, (C) We prefer to stay with a brand name we recognize instead of an unfamiliar name, (D) All of these, (E) Both A and B are correct. 3.___D_____The video gives examples of two handfuls of sand and a swinging pendulum. The point of these examples is to illustrate that: (A) sand and purple paint cannot be sold except by mind manipulation, (B) we often behave in ways that are not logical or based on a careful study of facts, (C) ads can sell anything, (D) mind management by professional persuaders causes millions to buy things they don’t want. 4.___A_____Retailers often sell goods “on sale.” The program suggests that this is an effective persuasion tactic because: (A) it gives permission to spend money by creating the illusion of saving money, (B) everyone likes to buy a bargain, (C) most consumers are value shoppers, (D) people on tight budgets can rarely afford to pay full price. 5.___A_____ Researchers using monitors to study the brain waves of shoppers find: (A) buying releases dopamine to the brain, (B) emotions control almost all buying decisions, (C) it is the anticipation of owning that releases the dopamine, not the actual purchase, (D) buying on a sale gives a feeling of satisfaction. 6.___A_____A common tactic for gaining the emotional support of consumers is to use: (A) images and words that bring with them “ready-made” emotional connections, (B) a message that makes the shopper feel guilty for NOT buying the product, (C) pointing out product features that make it a best buy. 7.__C______ and 8. ____E_____Select the two “mental shortcuts” from the list below that are NOT mentioned in the video. (A) Food sold outdoors is fresher than food sold indoors. (B) Products that are labeled “natural” are safe and wholesome. (C) Food in red packages has more calories than food in blue packages. (D) A growl in a car means power and speed. (E) Drugs advertised on TV work better than unadvertised drugs. (F) Food in a light colored package has fewer calories than food in dark packages. 9.____D____The video tells of an experiment with faces of “equally beautiful women.” When the experimenters assigned names to the women, people: (A) still judged them equally beautiful, (B) decided both were more beautiful, (C) decided both were less beautiful, (D) selected Jennifer as “more beautiful” than Gertrude. 10.___B_____Consumers are often influenced by product names. One example of this given in the video was: (A) naming “white bread” as “wheat bread”, (B) calling candy “trail mix”, (C) renaming “regular grade” meat as “select,” (D) renaming “eye glass” as a “power vision lens.” Section E—(Worth 4 Points)—“Values Rating/Survey” Directions: You are to download and complete the “Values Survey” forms (listed within this assignment folder) to find out what your most important values are. After calculating your numbers you are to name your top 3 three below and complete the questions. 1. Top Value #1 Moral Judgment and Personal Consistency Thoroughly explain how you believe this to be true: I have always prided myself in doing the right thing. My parents instilled this behavior in me, as a little girl so as I grew up it is just natural that I have high morals and pride within myself. 2. Top Value #2 Family Thoroughly explain how you believe this to be true: Family is very important to me. Sharing time and adventures with my family is a highlight of my life. Even when there is friction within our family we still remain close and work through our differences. 3. Top Value #3 Adventure, Security, and Beauty or Aesthetics Thoroughly explain how you believe this to be true: All three of these values are important to me. I believe that security is the one that I strive to achieve more than the other two. Without security in my life I would not have strength to adventure out of my comfort zone and try new things. I love nice things and enjoy working towards new things. 4. Did anything about this survey shock you or confirm what you already knew? ______ Shock or X Confirm Please thoroughly explain: I already knew that I had strong morals and believed in myself. These are characteristics that I cherish. My family is very important to me. I feel without a strong family unit I cannot be whom I am. I live to cook and bake for my family. Spending time riding horses and sitting by the fire with family is my favorite past times. Life is beautiful when you can surround yourself with family. I have worked hard developing security for my family and myself.