Comparison Shopping
From: http://en.wikipedia.org/wiki/Buyer%27s_remorse#mediaviewer/File:Carrefour_Market_Voisins-le-Bretonneux_2012_09.jpg
Making wise consumer decisions is an important skill when managing personal and family finances. Today’s marketplace can be overwhelming with numerous options of products to purchase and a large variety of features and quality differences within those products. Consumers often become overwhelmed which may cause impulse buying, or unplanned buying, where little consideration of the product occurs. Impulse buying often fills an individual’s need for immediate gratification. It is considered “emotional buying” instead of “rational buying.”
Comparison shopping, however, includes careful consideration and evaluation of the product’s features, price and quality. Comparison shopping allows individuals to purchase the same product or service for less money, buy more goods and services with the sale amount of money, or buy a better quality product for the same amount of money, increasing their long-term satisfaction with the product.
Regardless of the item a person is planning to purchase, being in the habit of comparison shopping before buying enables individuals to get more for their money. Expensive items such as a house or automobile requires an extensive amount of comparison compared to a less expensive item such as a portable DVD player. Regardless of the price, the same basic steps should be followed.
Step One: Decide exactly what is needed before shopping.
Making this decision before entering a store will help reduce the confusion that results from having too many options to choose from. Ask the following questions to determine what is needed:
- How will I use this product?
- How long does it need to last?
- What features do I really need?
If individuals answer these questions before beginning to shop, they will make a better decision.
Step Two: What is the quality of the products I am comparing?
Product quality depends upon the materials used, craftsmanship and durability. When evaluating quality, it is important to carefully look at the product and its packaging. Damaged items can often be recognized with a keen eye and the information on the packaging can provide very useful information. It is also beneficial to ask others who own the same product if they are satisfied with the product’s durability. If further information is desired, one can refer to unbiased testing agencies. Consumer Reports and Underwriters Laboratories are two sources for objective product quality information not associated with manufacturers. They provide impartial information without negative consequences if manufacturers do not agree with their res tits The Better Business Bureau is another source of consumer information about what to look for when evaluating product quality and buying certain products.
Step Three: What is the total cost?
Some products have additional costs other than the purchase price that needs to be considered to prevent overspending. For example, clothing that needs to be dry cleaned will cost more over Its lifetime than clothing that can be washed at home. Or, a digital camera that uses four disposable batteries will cost more over its lifetime than one that uses only one rechargeable battery. These “hidden costs” Impact decisions and need to be considered carefully.
Step Four: How will the product be used?
Finding a product that has exactly the features one desires for an appropriate price may be challenging. If this is the case, individuals should consider how the product will be used, how often it will be used and what price is appropriate for the use. For example, if a product is used once a year, an expensive product with very high quality and additional features may not be necessary. However, if a product will be used daily, one may desire higher quality to reduce replacement and repair costs. In this case, the owner may be willing to pay more for the higher quality. It is important to decide how the product will be used before it is purchased and then buy at the price or quality level that best suits the individual needs.
Step Five: Consider the opportunity cost and make a decision.
Opportunity cost is something an individual gives up to receive something else, this can include quality, price or features of a product. For example, if an individual wants an iPod that holds at least 500 songs, but it costs more than they can spend, they may have to give up some memory to purchase an affordable iPod that holds fewer songs. Carefully review all criteria and make the best decision based upon quality, price and how the product will be used.
Making informed consumer product choices helps individuals and families spend wisely and build a better financial future. By comparison shopping, one can find the best deal, reduce costs without cutting back on necessary items, save a little money and meet individual and family needs.
It is important to know the difference between impulse buying and comparison shopping, the advantages of comparison shopping and the steps to follow when making a wise consumer decision.