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7.1 Categories of consumers

7.2 Factors which influence consumer demand for goods and services
7.3 How consumers use modern technology to conduct transactions
7.4 How the consumer can protect him/herself
7.5 The role of government and other agencies in educating and
protecting consumers
7.6 How consumers practice thrift
7.7 Reasons for saving
7.8 Benefits of credit unions to consumers in the region
7.9 Strategies to deal with the effects of devaluation, depreciation, and
inflation
7.10 The effects of globalization and trade liberalization on consumers
7.11 How consumers can contribute to the sustainable development of
the region
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 7.1 Categories of consumers

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 Categories of consumers
▪ Consumers may be individuals, groups or
organizations/institutions.

▪ Consumers may be classified as cash or credit customers.

▪ Some consumers use credit facilities such as hire purchase,

credit cards, personal loans.

▪ Consumers who do not use credit use cash, debit cards and
personal cheques.

▪ Consumers determine what goods and services will be

produced.
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 7.2 Factors which influence
consumer demand for goods
and services

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 7.2(a) Factors which influence consumer demand for
goods and services
▪ Consumers demand goods because they get
satisfaction from them.

▪ Consumers consider a number of factors when

deciding what goods and services to buy:

• The size of their disposable income

• The availability of credit and credit conditions
• Their expectations about future prices and supply
• Their tastes and preferences
• Access to information about the good or service
• The size of the household
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 7.2(b) Factors which influence consumer
demand for goods and services

▪ Producers and sellers use a variety of

measures to influence consumers to buy their
goods and services:

• Persuasive and informative advertising

• Pricing policy
• Planned or built-in obsolescence
• Sales promotions

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 7.3 How consumers can use
modern technology to conduct
transactions

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 How consumers can use modern technology to conduct
transactions
▪ Electronic banking (e-banking) is the process by which consumers
perform banking transactions electronically without visiting a bank or
having face-to-face contact with bank staff.

▪ Electronic banking transactions:

• Payment for goods and services by credit and debit cards
• Transfer of funds between accounts
• Access to personal banking information

▪ Electronic Commerce (e-commerce) is any trading or other business

transaction that is completed solely through an electronic process: for
example, the buying and selling of products and services by businesses
and consumers using the internet.

▪ Consumers using e-banking or e-commerce may be exposed to

electronic fraud.
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 7.4 How the consumer can
protect him/herself

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 How the consumer can protect him/herself
▪ Consumers and business
people have opposite
objectives.

▪ Consumers have rights which

may be violated in several
ways.

▪ Consumers can protect

themselves by knowing and
demanding their rights.

▪ Knowledge of their rights

helps consumers to act
responsibly.

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 7.5 The role of government and
other agencies in educating and
protecting consumers

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 The role of government and other agencies in protecting consumers
▪ Governments protect consumers mainly through legislation
and education.

▪ Government consumer protection agencies complement

the work of each other.

▪ Sellers and producers are fewer in number than consumers

but may be more powerful.

▪ The absence of strong national consumer protection groups

in some countries makes it necessary for governments to
protect consumers.

▪ Non-governmental consumer protection agencies help to

promote consumerism.
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 7.6 How consumers practice
thrift

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 How consumers practice thrift
▪ Thrift is more than a money saving strategy.

▪ Elements of thrift include:

• Budgeting and shopping wisely
• Using and caring for possessions wisely
• Recycling and reusing items
• Saving regularly

▪ Financial discipline, the development of creative skills and

abilities, a sense of achievement and self-worth and the
accumulation of savings are benefits of thrift to the
individual.

▪ Prosperity, reduced pollution and conservation of resources

are benefits of thrift to the consumer.
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 7.7 Reasons for saving

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 Reasons for saving
▪ Individuals are always likely to have a reason to save.

▪ Individuals save for retirement and emergencies,

planned future expenses, for collateral for loans and to
enjoy life.

▪ There are special institutions to encourage saving.

▪ Saving can bring prosperity to the individual consumer

and the country.

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 7.8 Benefits of credit unions to
consumers in the region

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 Benefits of credit unions to consumers in the region

▪ Credit unions are “not-for-profit” financial institutions

created for and by their members.

▪ Benefits to credit union members include:

• Earning a small dividend on shares
• Easier access to loans
• Patronage refund
• Consumer education
• Encouragement to save regularly
• A sense of ownership

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 7.9 Strategies to deal with the
effects of devaluation,
depreciation and inflation

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 Strategies to deal with the effects of
devaluation, depreciation and inflation
▪ Devaluation, depreciation, and inflation have the effect of
reducing the value of the domestic currency and increasing
the cost of living.

▪ Consumers may cope with their effects by:

• Prioritizing their needs and wants
• Finding ways of supplementing their income
• Reducing their food bill by producing some of the food
items which they use
• Practicing thrift
• Utilizing government welfare measures
• Relying on remittances from friends and relatives
• Eating more home-cooked meals
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 7.10 The effects of globalization
and trade liberalization on
consumers

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 The effects of globalization and trade liberalization on
consumers
▪ The consumer is the real beneficiary of globalization
and trade liberalization.

▪ Consumers benefit through access to a wider variety

of cheaper and better-quality products and services.

▪ Global media have encouraged consumers in poor

countries to develop aspirations for goods and services
and a way of life which they cannot support.

▪ The spread of international restaurant franchises has

influenced consumers’ diets.
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 7.11 How consumers can
contribute to the sustainable
development of the region

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 How consumers can contribute to the sustainable development
of the region
▪ Sustainable development is development that meets the
needs of the present without compromising the ability of
future generations to meet their own needs.

▪ The adoption of sustainable patterns of consumption helps

to conserve the environment and contribute to sustainable
development.

▪ Sustainable production and consumption is the use of

goods and services that provide basic needs and bring a
better quality of life, while minimizing the use of natural
resources and toxic materials, and reducing emissions of
waste and pollutants, so as not to jeopardize the needs of
future generations.
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