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Spending Habits

Spending Habits. December 6, 2011. Agenda. Review Decision Making Model (7 steps) Needs versus Wants Factors that Influence our spending Personal factors Outside factors Marketing Strategies that influence our spending Advertising Pricing Sales Promotional Techniques.

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Spending Habits

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  1. Spending Habits December 6, 2011

  2. Agenda • Review • Decision Making Model (7 steps) • Needs versus Wants • Factors that Influence our spending • Personal factors • Outside factors • Marketing Strategies that influence our spending • Advertising • Pricing • Sales • Promotional Techniques

  3. REVIEW: Decision Making Model

  4. Factors that influence spendingPersonal factors • Personal factors 1. Personal Resources Time, money, energy, skills, abilities 2. Position in Life Age, marital status, gender, employment status and lifestyle 3. Customs, Background and Religion 4. Values and Goals

  5. Factors that influence spendingOutside factors 1. The Economy The general condition of the economy (interest rates on car loans high –fewer people buy cars) 2. Technological Advances new electronic games, new solar heating device to your home, newest gadgets, most convenient - iPod's etc 3. The Environment ecologically safe products, environment that surrounds us 4. Social Pressures friends, relatives, co-workers, the media, advertisements

  6. Planning Major purchases • Why do I need or want this product? • How long will this product last? • What substitutes are available and at what cost? • By postponing this purchase, is it likely that I will choose not to buy it later? • What types of additional costs are involved? • What could this money be spent on? • What is the total cost of the product (cash price, deferred price, interest, shipping charges etc.)?

  7. Marketing strategies that influence spending • Advertising • The primary goal of all advertising is to create within the consumer the desire to purchase a product or service. Some advertising is false and misleading; other advertising is informational and valuable. • Billboards, televisions, radio, Internet, newspapers, magazines, leaflets, balloons, and t-shirts • Product Advertising, Company Advertising and Industry Advertising

  8. Marketing strategies that influence spending • PRICING • Marketers price products to entice people to buy their product. They want people to buy their products over their competitor’s product. • Supply and demand determine what will be produced and the general price range will be • Odd- number pricing : the practice of setting prices at uneven amounts rather than whole dollars to make them seem lower

  9. Marketing strategies that influence spending • SALES • Companies mark down merchandise substantially or slightly in order to increase the number of items sold. • LOSS LEADER – an item of merchandise marked down to an unusually low price – sometimes below the store’s cost. They do this in order to promote a new product or to get people into the store expecting the people to buy other things. • CHERRY PICKER – a customer that only buys loss leaders. • ???? Do you think retailers like cherry pickers?

  10. Marketing strategies that influence spending • PROMOTIONAL TECHNIQUES • A technique used to lure customers into their stores • Displays • Contests • Games • Frequent buyer cards • Coupons • Packaging • Sampling

  11. HOT OR SNOT? • http://pbskids.org/dontbuyit/buyingsmart/hotorsnot.html • http://pbskids.org/dontbuyit/advertisingtricks/foodadtricks_burger3.html

  12. Review • Factors that Influence our spending • Personal factors • Outside factors • Marketing Strategies that influence our spending • Advertising • Pricing • Sales • Promotional Techniques VOCAB WORDS: odd-number pricing loss leader cherry picker

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