a job expands to fill the time availible to accoomplish the task, such as finding and purchasing a product

this is why people spend all day shopping and buy the same thing they could have in their lunch hour

(spending 1 hr to buy a white shirt vs a whole saturday) 

80/20 Rule: 20 % of the time expended produces 80 % of the results

80% of the time expended produces only 20% of outcomes

which means we waste a lot of time (shopping/ laundry) 

Rational

Slow

Bargain Shopper versus innovator (laggers buy last)

malls vs ma/pa stores

comparative vs. impluse

quantity of goods that you can buy given set prices and limited income

shows all possible combinations of X and Y the consumer can buy when spending all of her income

• any point on the budget constraint line is indicative of a person's ability to trade between two goods
• line slopes downward to represent a trade off between the two goods
• have to give up some of one good to gain the other (opportunity cost) 

not everyone is offered the same opportunities to live according to his or her budget restraints-- some are charged different prices for the same goods and services....what is this called? 

buy a group of items but cannot buy them individually

(candy bars in movie theaters or four light bulbs but no individual light bulbs) 

a price for the privilege of buying items

and a price per item

ex: country club dues and greens fees, cover charge to enter and a price per drink

how much do US advertisers spend per year?

How much worldwide? 

more than 237 billion

approaches 470 billion 

• Consumers wear or display their homes product logo on them (nike on shoes)
• solomon says our identities are formed by an allegiance to common value systems expressed through affiliation with product sets

• producer generated information about products and services
• the activity of attracting public attention to a product or business, by paid announcement in the print, broadcast, or electronic media

inform

persuade

compare

remind

familiarity (rice krispie commercials)

humor (positive association)

sexuality

animals 

a system in which companies sell with consumers

ex: when you wear a t-shirt with a business' name on it. you are advertising WITH a company (idea that we all want to be like everyone else--> bandwagon effect) 

30 seconds of the superbowl costs_____

for whom did K-Fed advertise?

2.5 million

an insurance company

• also called Pioneer advertising bc they were the first
• provides the consumer with specific, understandable, verifiable claims 
• research indicates: it reduces consumer uncertainty so they are more likely to buy a product
• an increase in exposure leads to an increase in expected utility (of products)

ads that do not give any relevant information but also do not mislead the consumer 

ex: captain morgan ad

• tendency to deceive
• impression that the ad is truthful when it isn't
• omission of important information
• bait: unrealistically low price for a product
• switch: to a much higher priced model of the same product (happens alot on black friday) 

• companies used to hesitate to do this, but not anymore
• sometimes it can backfire and cause the viewer not to want to buy the product if the comparison is too hard (ex: political advertising is too nasty) 

in a market that is saturated with a certain product, everone sellind that product has to advertise or be left out of the market. You don't gain anything by advertising but at least you are still in the game

(Defensive strategy) 

creating advertising messages

selecting advertising media

message strategy 

identify customer benefits

appeals should be meaningful, believable, and distinctive 

shoose a tone (life insurance vs. doritos)

use memorable, attention-grabbing works (snap, crackl, pop)

1) gain attention and interest

2) inform and persuade

3) lead to the person buying 

Proctor and Gamble

Altria

General Electric

Time Warner

Walt Disney (the vault)

• can issue a consent decree
• can ask for ad substantiation
• can issue a cease or desist order
• can require a corrective ad 

• also called counter advertising
• FTC requires company found liable for deceptive advertising to issue advertising anew that corrects the earlier misinformaiton

• marketing to children because children do not have the cognitive ability to understand many advertisements
• the average man rule does not work

• local business-place from where you purchased
• manufacturer
• non-governmental organizations
• government protection agencies
• small claims court
• class action suits

1. no emotional outbursts
2. act promptly
3. know your rights
4. get organized (reciepts, model #, when, etc.)
5. put in writing 

• Return to the place where the item was purchased
• currenlty no laws regualte refunds and stores are not required to post their policy but some do (individual stores set their own policy)

-contact the company's HQ by phone, email, or letter
-elements of a written complaint:
1) describe the purchase or service

2) the date and place of purchase/ service

3) name of the product/ person who provided service 

4) serial number of product

-consumer must state problem and the history

-ask for a specific action to resolve dispute

-state how you can be reached and enclose copies of documents

-include a reasonable response time to the issue

• opening of letter should be positive 
• state facts in an objective manner
• put requests before justification
• state conclusions before discussion
• use attachments
• send copies of complain letter to 3rd party if appropriate 
• refer to previous complaints if appropriate

• study by Prawitz and Lawrence in 1993- a consumer econ class wrote letters regarding unsatisfactory products/ services
• 80% got response within 3 weeks
• 43% complied with requests
• 64% of the students were satisfied with responses
• (students with no response will probably no longer do business with the company) 

• the BBB Strongly encourages consumers to first attempt to resolve complaints directly with the comnay, however the BBB will not reject a complain is a consumer has not taken this step. 
• Historically over 70% of complaints through BBB are resolves 

process by which the parties in the dispute submit their differences to the judgement of an impartial person or group appointed by mutual consent

the goal is conciliation (to make nice again) 

small claims court: or civil courts

has a limit

usually without attorney (judge judy)

class action suits: 

claims and rights of many people are handled by a single hearing...several consumers banding together. amount consumer receives is small, but the company has to pay out big money. 

occurs when an individual company KNOWINGLY misrepresents or fails to reveal an important fact to the consumer, with the ultimate result that the customer is cheated

there must be a deliberate attempt to mislead the consumer 

one of the most famous hoaxes in American history, was a 10-foot tall "petrified man" uncovered on October 16, 1869 by workers digging a well behind the barn of "stub" in BY

a giant commissioned by george hull

if you get a peive of mail that says you have won a prize- you have NOT. they want to you to buy something or give them information

rule of thumb: don't participate if you have to pay to do so

earliest scheme: chain letter

recipient is told to send a sum of money to the first person on the list. the recipient then took that person's name off and everyone's moved up a slot including their own 

success rested on the exponential growth of new members. "pyramid" indicates the increasing population at each successive layer

• pick a cause that you believe in and can verify is legit. have them send you literature
• plan your charitable giving making these decisions once a year
• watch out for phony charities
• never allow anyone to pressure you to give

• dietary supplements- if labeled a "dietary supplement" it escapes FDA scrutiny
• cosmetics- quick fixes that will make us beautiful or handsome (cosmetics that fall under FDA restriction have to be safe but not effective)
• inaccurate information- Stouffer's lean cuisine and the sodium mishap (fined and had to correct it)

• Fee Splitting: one doctor reccomends you see another and then they split the fee for the follow-up visit
• conflict of interest: doctos orders tests and what you don't know is that the doctor owns the testing center
• denial of claims: some insurance companies automatically deny all claims the first time they are filed

paying for unnecessary services

or services that were never performed

perpetuated by the doctors and hospitals to inflate their payments 

• Home computers
• many computer repair agencies are legit but others are not
• low ball technique-"free diagnosis" can tell you anything is wrong with the computer once they take it apart
• auto: same thing
• credit card "protection" offers- pays off your balance in the event that you are dead. you are not liable after you are dead. 
• offer to "protect" you if someone steals your card but federal card regulations already protect you