Chapter 8: Purchasing Consumer Durables

Goods are the backbone of an economy, and the supply and demand of certain goods can be used as
economic indicators to determine an economy’s wellbeing. In economics, goods can be separated into
two categories: durable goods and nondurable goods.

Durables also known as durable goods or consumer durables, are a category of consumer goods that do
not wear out quickly, and therefore do not have to be purchased frequently.

Example:

 Washers
 dryers
 refrigerators
 air conditioners
 tools
 computers
 televisions
 other electronics
 jewelry
 cars
 trucks
 home and office furnishings.

Nondurable goods are any consumer goods in an economy that are either consumed in one use or used
up over a short period of time.

Example:

 Food

 Laundry detergent

 Dish soap

 Light bulbs

 Paper products like paper plates

 Clothing

Steps in Intelligence Purchase Decisions

Purchase decision is the thought process that leads a consumer from identifying a need, generating
options, and choosing a specific product and brand.

 Some purchase decisions are minor, like buying toothpaste, while other purchases are major,
like buying a house. The more major the purchase decision, the more effort is typically put into
the process.

10 Ways to Shop Smarter

1. Don't let the store seduce you. Retailers operate on the theory that the quickest way to our credit
cards is through our senses. The speakers at Abercrombie & Fitch pump out loud, bass-heavy beats to
get teenage hormones rocking; hotels and spas are redolent with aromas of minty freshness; jewelry
stores aim high-wattage halogen lights at watches and rings to bring out even more sparkle.

2. Don't let the store scramble your "reference price," either. This marketing term refers to the
price that you expect to pay for something (because you have bought that item several times before),
and retailers are quite adept at messing with it.

3. Shopper, know thyself. Some psychologists say that most of us fall into one of two categories:

 Low self-monitors aren’t too concerned with social feedback and make purchases based on
their preference for a product.
 High self-monitors buy to fit in.

4. Beware of the freebie. Think quick: You’re offered a choice between a free P500 gift certificate
and a P1000 gift certificate for P350. Which would you take? When behavioral economist Dan Ariely
tested shoppers at a Boston mall, they overwhelmingly opted for the free gift certificate, even though
that meant losing out on a P650 profit. It’s easy to fall for free! but a price tag of zero can be costlier
than it appears.

5. Choose shopping partners wisely. Hitting the stores with a gaggle of pals can be a pleasant way to
spend a Saturday afternoon, but don’t lose sight of how others can influence your buying decisions.
This phenomenon is often referred to as “group-level consideration,” meaning that the group, not
you, establishes the spending norms and defines what is acceptable and condonable.  

6. Think twice about express checkout lanes. Sometimes spending wisely means keeping an eye on
your money and your time―especially if you pay for parking or have to be somewhere, like work, where
your time is worth more. 

7. Let your mouse do the walking. Preshopping online is natural for many of us. To the rest: Get
clicking! Even if you prefer to buy at brick-and-mortar stores, you can earn savings with sites that seek
the best deals , offer customer reviews , or publish wholesale and market prices to help you haggle.

8. Buying online? Use the search box. You’re looking for a new mixer. Type its name into the site’s
search function rather than using the category links (“Shop All Departments,” then “Kitchen,” “Small
Appliances,” and, finally, “Mixers”).

 A study by a Massachusetts-based website research firm found that shoppers who use the link
method are three times more likely to keep browsing after they’ve found their item and make
three times as many impulse purchases as compared with those who use the search tool.
9. Indulge your needs. Narrowly defined, the only things we really need are food, clothing, and
shelter. But there are other needs that relate to our emotional well-being. Treating yourself to a
massage or a new top may lift the spirits and doesn’t necessarily mean you’re being reckless.

10. Stock up on experiences. We had bought some stuff, mainly clothes, that you don’t find here. It’s
nice to tell ourselves those items will remind us of the trip, but they’re bound to go the way of all
things cotton or wool. What will live on are the moments, captured in memory or snapshots or both.
And that’s what I call money well spent.

Buying a Car / Furniture / Appliances (examples)

What is Personal Property?

Personal property is a class of property that can include any asset other than real estate.

 Asset is anything of value or a resource of value that can be converted into cash. 

 Personal assets are things of present or future value owned by an individual or

household.

Furniture, Fixtures, and Equipment Explained

An asset is classified as FF&E if it's used by a business for normal daily operations.

Example:

an office receptionist relies on his or her desk, chair, telephone, computer, desk organizer, and pen
holder to conduct routine activities throughout the normal course of doing business.

Buying a Car

5 Tips for Buying A Car The Smart Way

1. Get preapproved for a loan before you set foot in a dealer's lot.

Get preapproved for a car loan from your bank, a credit union or an online lender

2. Keep it simple at the dealership.

If you're buying a car at a dealership, focus on one thing at a time. And don't tell the salespeople too
much. Remember — this is a kind of game.

3. Don't buy any add-ons at the dealership.

If you've bought a car, you know how this works. You've been at the dealership for hours, you're tired,
you've settled on a price, you've haggled over the trade-in — then you get handed off to the finance
manager.

4. Beware longer-term six- or seven-year car loans.

A third of new car loans are now longer than six years. And that's "a really dangerous trend," says Reed.
We have a whole story about why that's the case. But in short, a seven-year loan will mean lower
monthly payments than a five-year loan. But it will also mean paying a lot more money in interest.

5. Don't buy too much car. And consider a used car to save a lot of money!
"The golden rule is that all of your car expenses should really be no more than 20% of your take-home
pay," 

Furniture

FACTORS TO CONSIDER WHEN BUYING FURNITURE

1. Size of home

The furniture should be able to fit in your home and leave enough space to allow free movement. If
you buy a seven-seater and your living room is tiny, then you and your loved ones won’t be able to
move freely. Its worth noting that furniture that denies you free movement can make the room dull
even if the furniture is beautiful.

2.Color of furniture

Put the color of the furniture into consideration to make sure that it complements the tone of your
room as well as decorations. Choosing a color that clashes with the decorations in your room can make
it unattractive. The furniture can be well designed, but if the color doesn’t match that in your home,
then it will look unattractive.

3. Durability

You must consider the durability of the furniture you wish to purchase because if you end up buying
non-durable furniture, then you will have wasted your notes. Thus you need to be able to differentiate
between durable and nondurable furniture. Shop from companies that are well known for producing
high-quality furniture to increase your chances of getting sustainable furniture. Stay away from
companies that supply nondurable furniture like the plague.

4. Cost

The money that you are parting with should be within your budget. This doesn’t mean that you go
shopping for the cheapest furniture you come across because they will get damaged without giving you
much service. In most cases, you will realize that the materials used to make the furniture significantly
influences their price. Furniture made from substandard materials are the cheapest in the market.

5. Features

Consider hunting for features that will be able to suit your preferences as well. If you are searching for
office chairs, then they should be well designed by the users. When it comes to your shopping furniture
for your home, you have to make sure that they will be well suited for you and your loved ones. This is
regarding size, height as well as compatibility just to mention a few.
6. Comfort

When getting furniture online then its worth putting the comfort aspect into consideration. It doesn’t
make any sense to purchase furniture that might look attractive but unpleasant. Experts suggest that
you should look for ergonomically created furniture. Whether you are looking contemporary furniture
with contemporary models or an upholstered variety, your choice should make your home welcoming
and stun without compromising on comfort.

7. Material

Furniture is made using many different materials. From plastic to wood. Wooden furniture is the best
because its simple to clear and need less maintenance. So consider the materials available before
shopping for furniture.

Major Home Appliances

5 Things to Consider When Purchasing Major Appliances

1.Start with budget

The best place to begin your appliance hunt is probably your bank account. Pricing for any major
appliance varies widely and honing in on a range that is right for you will help significantly narrow
down your search.

2. Measure twice, buy once

Finding an appliance that fits your space is critical and may sound simpler than it is. Sure, the footprint
fits the space you want to fill, but don’t forget to consider the amount of space that is used when the
fridge door is open or the space you need to open a kitchen cabinet.

3. Consider your lifestyle

A major appliance is usually a costly purchase that you intend to use daily and expect to last for a long
time, so it’s important to pick appliances that fit into your lifestyle.

4. Prepare for unexpected costs

As a savvy consumer you’re ready to compare price tags, but don’t forget to factor in potential hidden
costs such as common repairs or energy consumption.

5. Learn from experience

Head to your local appliance retailer and kick the tires on the floor models. You can always use the
internet to compare prices and deals, but for such a large purchase that you’re going to be using every
day, it’s best to check it out in person.

Sources/References

https://kwhs.wharton.upenn.edu/
https://www.investopedia.com/

https://www.realsimple.com/

https://www.thegoldenfleece.com/

Prepared by:

Lesley Allen D. Kabigting, MBA

College of Business Administration
Guagua National Colleges