CHAPTER 6
Consumer Purchasing Strategies
Or
“I’d Like Some More Things, Please!”
Microsoft Chairman Bill Gates told CNBC that he wished he were not the richest man in the world. “There is nothing good that comes out of that,” he said. http://en.wikipedia.org/wiki/Bill_Gates
Note: He is no longer the world’s richest man.
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Scandal #6
Clothes
Culture of Consumption
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“Thanking you for the clothes of your dead people”
In the late 1980’s, a journalist was on assignment covering cultures around the world and specifically, how their cultures relate to and think of our culture. His guide in East Africa (the affluent part of Central Africa) invited him to come see the distribution of the clothes from the dead Americans to the locals. When the journalist asked the guide why the locals thought the clothes were from dead Americans, the guide looked at him oddly and said, “Why would a living person give away any of their clothes?”
This was many years ago. With some bumps along the way, Africa has been experiencing strong economic growth for some time now.
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Scandal #12
Pets
Culture of Consumption
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A What Therapist?!
How much does a very busy dog therapist charge for six 1-hour sessions with you and your dog?
The correct answer is (D). That is $250 per hour!
Think Viet Nam.
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How Much is Fido Costing You?
Speaking of dogs, what is the average yearly cost of owning a dog?*
The correct answer is (D). Well, of course. Just one series of therapy sessions cost $1,500! Remember, this is per dog.
Americans are projected to spend $150.6 billion for pets in 2024.
http://www.americanpetproducts.org/press_industrytrends.asp ‒ Yearly cost of owning a dog
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“I can’t get my wife to spend any money!”
“How did the wife of a millionaire respond when her husband gave her $8 million worth of stock in the company he recently took public? She said, “I appreciate this, I really do.” Then she smiled, never changing her position at the kitchen table, where she continued to cut out twenty-five- and fifty-cent-off food coupons from the week’s supply of newspapers, just as she had done each week for the past 27 years.”
“Frugal, Frugal, Frugal”
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Speaking of Millionaires…
Spoken by the Senior Vice-President of a trust department of a major bank that had commissioned a focus group interview of twenty first-generation millionaires.
“These people cannot be millionaires! They don’t look like millionaires, they don’t dress like millionaires, they don’t eat like millionaires, they don’t act like millionaires – they don’t even have millionaire names. Where are the millionaires who look like millionaires?”
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Speaking of Millionaires…
From The Millionaire Next Door
This data is out-of-date. Sadly, the two authors had a falling out and one of the authors then died so the book has never been updated.
There are over 8 million households in America with a net worth of over one million dollars.
(continued)
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Speaking of Millionaires…
Therein lies the paradox: Do you want to be a millionaire or do you want to live like a millionaire? All the people you think are millionaires – fancy cars, flashy clothes – are really just high-income, high-consumption wage earners with 10 credit cards run up to the maximum.
The millionaires are the penny-pinchers.
Bizarre, huh?
The lesson is clear. If you want to become a millionaire, having a high income is not important. You must be frugal and invest wisely.
(continued)
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Speaking of Millionaires…
The media loves to showcase the high net worth, high consumption celebrity figures. The truth is that they constitute only a small percentage of the millionaires in the United States.
The media advertisers love them because they encourage the “Little Folk” to over consume.
But what about “The Lifestyles of the Rich and Promiscuous” & Don King & Jennifer Spears & Brittany Lopez? Huh? What about them?
(continued)
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Speaking of Millionaires…
45.7% live below the global poverty level.
More than 40% live on less than $1 per day.
About 64% do not have access to clean water.
85% of the women are illiterate with a fertility rate of 7.8.
Life expectancy at birth is approximately 54 years.
In fact, about 1 billion people around the world survive on less than $1 a day ‒ United Nations
And when you are sitting at home watching TV feeling sorry for yourself as you compare yourself to Bouncy or Lady GooGoo, instead compare yourself to the citizens of Niger.
(continued)
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Speaking of Millionaires…
What You Have
Happiness = ––––––––––––––––
What You Want
So do you still believe that you would live happily-ever-after if you were a millionaire?
Simply put, if you never learn to be happy with what you have, you will never be happy. Your wants will always outweigh what you have. And even if you do become a millionaire, you will still face the same day-to-day travails that everyone faces. Your life will be more comfortable, but there is no guarantee of happiness.
(continued)
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Scandal #23
Batteries
Culture of Consumption
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Disposable or Rechargeable?
Given normal usage, how many alkaline batteries would be replaced by one nickel metal-hydride battery?
The correct answer is (C). Screw the Energizer Bunny!
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“She had forty-seven cashmere sweaters.”
Beware of Emotions
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Speaking of Emotions…
Ever wonder why advertisers use sex to sell their products?
“You can keep the beer. But I will take the bubble-headed, bleached blonde with the big kn___kers & the tight b__t, thank you.”
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Does Advertising Really Work?
Economists estimate that every hour of TV a person watches each week increases their annual spending by about $200.
In 2005, Nielsen Media Research reported that the average person watched approximately 4½ hours of TV a day, or 31½ hours a week.
At $200 in extra spending for each hour watched, that means that the average person spends an extra $6,300 a year that they would not have spent if they didn’t watch TV.
“Television commercials do not affect me!”
The number has risen to almost 5 hours per day. That is 9 years of your life!
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Economic Factors
Social Factors
Personal Factors
Consumer
Buying
Influences
What Factors Motivate You?
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Speaking of Influences…
Oh, I am so sorry. “Coach.” For the prices they are asking, shouldn’t they really call them “First Class?”
And do not even get me started on Lousy Vuitton!
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Scandal #73
Light Bulbs
Culture of Consumption
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Incandescent or LED?
Given normal usage, how many incandescent bulbs would be replaced by one LED bulb?
The correct answer is (D). Incandescent bulbs give off 90% of their energy as heat. They last an average of 1,200 hours. An LED bulb can last up to 50,000 hours.
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Incandescent or LED?
Over its lifetime, how much money will one LED bulb save you in energy and replacement costs?
The correct answer is (C). So why do people still buy incandescent bulbs? http://greenlivingideas.com/2015/02/19/the-true-cost-of-light-bulbs-led-cfl-incandescent/
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Consumer Purchasing Activities
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Consumer Purchasing Activities
all
cash
A 2004 to 2007 survey by Consumer Reports shows that more than 90 percent of shoppers who asked for discounts got at least one. The negotiated price cuts were on a wide range of goods and services, including furniture, electronics, and medical bills.
(continued)
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Practical Purchasing Strategies
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Pretzel Logic
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Pretzel Logic
(continued)
How much did we save? $37?
We didn’t save nothin’!
We spent $75!
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Scandal #118
Meat
Culture of Consumption
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Societal Cost of Meat?
How many gallons of fresh water are used to produce one pound of beef?
The correct answer is (D).
Estimates range from 441 (beef industry) to over 12,000 (Dr. David Pimentel, Cornell University).
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Societal Cost of Meat?
How many people can be fed via grains with the resources needed to feed one person with beef?
The correct answer is (D). Plus, eating meat jest ain’t the best thing for yer health, neither. (Sorry, Burger Lovers.)
Paying a Price for Loving Meat ‒ How Much Does Meat Affect Mortality?
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The Cost of Convenience
5 Ounces of Potatoes | Cost |
Potato (5-pound bag, 80 ounces) | $0.22 |
Ore-Ida Extra Crispy Fast Food Fries (26 oz bag) | $0.86 |
Smart Ones Tasty Hash Browns (6.49 oz package) | $2.31 |
Pringle’s Potato Chips (5.2 oz tube) | $3.19 |
Lay’s Fat-Free Olestra Potato Chips (6½ oz bag) | $3.53 |
McDonald’s French Fries (2 oz serving) | $5.16 |
Idahoan Mashed Loaded Individual Cup (1½ oz cup) | $8.30 |
PopChips Potato Chips (3.0 oz bag) | $9.98 |
Sources: Grocery Outlet, Vons, ShopFoodEx.com, McDonald’s
(revisited)
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World average is 2,800 calories per day
Speaking of Food…
Source: List of countries by food energy intake ‒ Wikipedia
3,500 calories per day
2,300 calories per day
2,800 calories per day
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Speaking of Food…
The total daily caloric intake of the average American has risen by from approximately 3,400 calories per day in 1975 to approximately 4,000 per day in 2010. This amount reflects an extra 15 pounds per person each year.
Your clothes feeling a little tighter recently? Yeah, me too.
(continued)
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Speaking of Food…
8,000 years ago, this was the image of the ideal woman.
Today, this is the image of the ideal woman.
(continued)
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Speaking of Food…
According to recent studies sponsored by the USDA and the NRDC, how much of the nation’s food ready to harvest never gets eaten?
The correct answer is (D). http://www.nrdc.org/food/files/wasted-food-ip.pdf
(continued)
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Speaking of Food…
And the average family of four throws out how many dollars worth of food each year?
(continued)
The correct answer is (D). Forbes: The Shocking Amount of Wasted Food
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Scandal #235
Bottled Water
Culture of Consumption
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Ads We Would Love to See
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But It’s Really Not Just Water!
How many plastic water bottles make their way into landfills or wind up as litter each year?
The correct answer is (C). 60 million each day.
http://www.container-recycling.org/ ‒ Plastic Water Bottle Pollution
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Steps in Resolving�Consumer Complaints
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Steps in Resolving �Consumer Complaints
(continued)
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Personal Consumer Protection
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Scandal #1
Cars
Culture of Consumption
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CHAPTER 6 Emphasis
Buying and Operating �Motor Vehicles
Or
“You Are Not What You Drive!”
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First, Some Statistics…
“…gas mileage usually decreases rapidly at speeds above 50 mph. You can assume that each 5 mph you drive over 50 mph is like paying an additional $0.24 per gallon for gas.”
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Societal Cost of Cars?
For every one gallon of gas you burn, how much carbon dioxide do you pump into the atmosphere?
The correct answer is (C). Here is the chemical formula:
C8H12 + O2 🡺 H2O + CO2
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Societal Cost of Cars?
How much of our oil do we import?
The correct answer is (A). We are now a net exporter of oil However, for almost two decades, we imported over 60%.
https://www.eia.gov/energyexplained/oil-and-petroleum-products/imports-and-exports.php
Source: United States Energy Information Administration
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Societal Cost of Cars?
So how many barrels of oil (42 gallons of crude oil) does each person consume in the United States each year?
The correct answer is (C). 7.3 billion barrels of oil divided by 345 million people. U.S. Energy Information Administration
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Our Addiction to Oil
The impact of much more fuel-efficient cars has been very beneficial.
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What Type of Vehicle?
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Buying a Used Vehicle
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Inspecting a Used Car
Find an honest mechanic and pay for an inspection!
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Used Car Price Negotiation
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Buying a New Vehicle
“You can keep the car. But I will take the bubble-headed, bleached blonde with the big kn___kers & the tight b__t, thank you.”
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Service Contract?
Once they have the sale, they will put you in a little interrogation room with bright, garish lights. A greasy little man with bad breath, bad teeth, and the smell of cheap cigars will then work you over, trying to get you to agree to purchase a service contract, undercoating, and upholstery spray, as well a timeshare in Cancun. Tell them that if they try to put you in that little interrogation room, you will leave immediately without buying.
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Negotiating the Price
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Financing an Automobile Purchase
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Leasing a Vehicle
You are almost guaranteed to spend far more over the long term leasing rather than buying. My advice? Only lease if you are sure you have no intentions of keeping the car and you are the kind of person who must have a new car every 2 or 3 years or you are choosing a car with a reputation for horrible reliability.
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Leasing a Vehicle
(continued)
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What Kind of Vehicle?
According to our authoritative and detailed scientific research, we have found that the larger the motor vehicle,
The correct answer, of course, is (E). My sincerest apologies to those of you who own a Ford Extinction (not really ).
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Costs of Operating a Car
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Costs of Operating a Car
According to the AAA, what is the average cost per mile to own and operate a new medium sedan?
The correct answer is (D). So at 15,000 miles per year, that’s…
(continued)
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Costs of Operating a Car
My advice?
Buy a reliable new or used car and run it into the ground!
(continued)
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Servicing Your Car
My advice?
Find an honest mechanic and stay loyal to ‘em! http://www.cartalk.com/mechanics-search
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Bottom Line on Cars
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