Consumer Decisions - Stage 5 Commerce


comparison shopping
◦ types of goods and
services
◦ different brands and
products
◦ choosing what to buy
choosing where to buy
◦ range of locations and
sources
◦ types of retail outlets
◦ internet purchasing and
mail order
◦ locally, interstate,
globally

key factors affecting
consumer decisions
◦ finance, price, marketing,
age, gender, convenience,
service
◦ environmental
considerations

Consumers purchase two main types of
goods –
◦ 1. Durable goods – goods that have a long lifespan and do
not need to be replaced frequently. For example a washing
machine, furniture and motor vehicles.
◦ 2. Non-durable goods – goods that are purchased
frequently and have a short lifespan. They are less
expensive and bought with cash or EFTPOS. For example
food and pens

Another way of naming or grouping goods is
to look at the relationships between them.
◦ Complementary goods – a good that is generally
consumed with another good. For example tomato
sauce and meat pies.
◦ Substitutes – a good that can be purchased as an
alternative to another good. For example butter
instead of margarine.



Intangible goods provided to consumers by
individuals or firms.
Some like education are transferable from
one person to another.
Some are consumed at the point of sale like
watching a concert so are not transferable.
Make a list of
the services
you consume
on a weekly
basis.



Notable examples include Nike, Coke, Quik silver, Microsoft,
Apple
Brand names can become so powerful they replace the
original or generic name for the product for example
vacuuming being referred to as hoovering.
Generic and own-label goods include ‘no frills’. They boost
the reputation of supermarkets and reduce the power of
manufacturing companies. They often cost less and are of
comparable quality to the branded alternatives.
Brand
Is this good
a need or a
want ?
Is this good
durable or
non-durable
?
What is a
substitute to
this good ?
Select 10 goods you would
purchase during a typical
week and then copy and
complete the table as shown
above.
Is this a
generic /
own – label
good ?

See activity on www.studyismybuddy.com
Year 9 Commerce Consumer Choices

Impulse buying – where you purchase a good
or service on the spur of the moment and
later discover you cannot afford the product
or do not really need it.

Retail stores can be placed in a hierarchy based on the types of
goods they provide and how far consumers need to travel to get
to them.
◦ At the top are large regional shopping centres and stores
selling expensive consumer durables (sporting equipment)
◦ Then come planned shopping centres like Westfield which
provide one stop shopping and a car park.
◦ Independent retailers and corner stores have largely been
replaced.
Select a product sold in a range of
locations and from different
sources and report on comparisonshopping processes. Include a
picture of the product.

Asking the following questions enables you to
avoid impulse buying.
What exactly are my needs ?
Can I afford this ?
Have I compared prices ?
What after-sales service is available with the product ?
What are the features of the product and will it do all I
want it to do ?
◦ How safe and reliable is the product ?
◦
◦
◦
◦
◦
Design an educational pamphlet to outline
the steps consumers take to avoid impulse
buying. Include pictures and illustrations to
help get your message across.

General (corner) stores – small retail outlets that focus on selling
everyday convenience items like milk and bread.

Supermarkets – (Coles) large self-service stores that sell a wide variety
of food and other household products.

Department stores – (David Jones) retail outlets divided into a number of
smaller units or departments selling a wide rage of goods and services.

Discount stores – (Big W) offer a range of goods through specific product
departments which provide cut price promotions and value for money.

Independent specialty stores – (The Bike Barn) usually owner operators
that focus on selling a specific product.

Category killers – (Toys ‘R’ Us) retail outlets often operating out of large
warehouses that dominate the sale of one particular product type.




Franchises – a type of retailing that involves selling the rights
to use a business name, image or management system.
Periodic markets – large numbers of sellers in an informal
market setting open only on the weekend and providing
bargain and bulk-orders to save money.
Shopping strips – traditional shopping centres consisting of a
range or retail outlets lining the main street of a town or
suburb.
Planned centres – (Macquarie Centre) retail outlets that are
planned, operated and managed as a single unit. They
contain a couple of large anchor stores and a wide range of
speciality stores under one roof with easy car parking.
Develop a mind map
of the different types
of retail outlets.
Design a
pamphlet or
power point
presentation
informing
consumers of the
advantages and
disadvantages of
either direct
marketing or
internet
shopping.


Direct marketing is where goods are sold
directly to a customer rather than through a
retail outlet.
Direct marketing includes mail order (sending
customer offers, advertising or catalogues)
and telemarketing (phone sales) and doorto-door sales.

Anyone with a computer and internet access
can purchase a range of goods from around
the world and have them delivered direct
from the warehouse or manufacturer to
almost any location in the country.
Select one online
shopping site and
answer the following
questions:
a) How easy is this
site to use?
b) What types of
goods are
available from
this site?
c) How are the
goods delivered,
how long does
this take and
what are the
delivery charges?
d) What payment
options are
available?
e) How secure is the
site?
Present your findings
in the form of
a report.

Guides for making a decision include:
◦ The price of the good or service
◦ The quality of the good or service
◦ The service provided including warranties and
after-sales advice.
◦ Your ethical perspective – when we purchase
imported goods there is a flow of money out of the
country to pay for them.
access www.choice.com.au
and
www.consumersonline.gov.au
and investigate ethical
consumerism.



Consumers can choose whether to purchase locally
manufactured or imported goods (goods produced
overseas).
Improvements in communications technology and road,
rail and air transport make it easier for consumers to
purchase products regionally or from interstate.
In the mid-1990s Australian labelling was changed to
make it easier for customers to identify products made in
Australia
◦ To be labelled ‘Product of Australia’
it needs to be produced and processed
within Australia
◦ To be labelled ‘Made in Australia” the
product is manufactured in Australia
but contains imported ingredients.
Commercial
Personal

Can I obtain finance to help me make this
purchase ?
◦ Funds come from your savings, a bank or financial
institution.
◦ Some stores offer store credit cards and hire
purchase agreements (funds lent to customer by
the store).
◦ Your disposable income, the amount of money you
have to spend on goods and services. Disposable
income (net income) =
gross income (total income) - tax


What is my budget?
Can I afford this good?
◦ Obtain a minimum of three quotes before buying an
expensive good or service.
◦ Don’t be rushed into making purchases.
◦ Be aware of hidden costs like installation charges,
service costs and postage.
Potato chips are available in
the following package
weights and prices. Use the
unit pricing method to work
out which is the best value?
a) 500g packet $2.50
b) 750g packet $3.60
c) 1kg box $5.30

The five P’s are used to alter the buying
behaviour of consumers.
◦
◦
◦
◦
◦
Price,
Position,
Product,
Promotion and
Place

Consumers wants change as they get older.
Babies
Secondary
School
Primary
School
Toddlers
Pre
schoolers
Write
down two
wants
relevant
for each
of the five
age
groups

Boys and girls often purchase different types
of products.
Boys
Girls

Many Australians use convenient shopping
options like online shopping and ebay.
Using word art list words to show
options Australians could use to
purchase a computer.


Consumers are demanding a more personalised shopping
experience.
Businesses have responded by offering a range of mobile
domestic services including pet grooming and gardening
services. These services are available seven days a week and
travel to a customer’s home or workplace at a time the
customer chooses.
Using the internet
find the name and
contact details of a
mobile pet grooming
and gardening
service.


Consumers are considering the
environmental impact of their purchases.
Manufacturers and retailers are selling
‘environmentally friendly’ products
manufactured from recycled materials.
Using pictures from the
internet create a collage
of factors that influence
consumer decisions.