LESSON 10

THE CONSUMER’S WAY

OF THINKING
Daphne Char P. De Guzman
 A consumer refers to the
person who purchases and
uses the consumer products
and services to satisfy his
needs.
CONSUMER
Consumer products are the
goods and services used by
the consumers for their
personal and household
needs.
Consumer services are the
services rendered by different
business firms to repair and
improve the consumer
products.
▸The consumer has the right
to decide the kind of products
he/she prefers to buy in such a
way that every centavo spent
is accounted for.
▸The presence and power of
the consumer obliges the
producer to produce quality
products.
▸A consumer should also be
able to manage and use
money wisely, use credit and
loans carefully, protect
personal information, and
protect money from people
who try to take it.
1. Budget Conscious
- A wise consumer is not an impulsive buyer.
Weighing things before buying is very
important. She/He buys things according to
her/his budget.
2. Alert
- Being vigilant should be one of the
characteristics of a wise consumer. Consumers
should always monitor and observe the actions
of the sellers.
3. Analytical
- The consumer patiently examines the parts of
the products she/he intends to buy.
Characteristics of a
4. Avoids panic buying
- A wise consumer does not let himself be
Consumer
affected by artificial shortage because
hoarders want only a high price.
5. Reasonable
- The consumer always takes into
consideration the price and quantity of the
product, considering where and when they
will be able to have enough products of
quality at a lesser price.
6. Not affected by advertisements
- The endorsement of a product by a
celebrity has no effect to a wise consumer.
The price and the quality of the product are
the selling points to a wise consumer, not
how and who advertised it.
7. Looking for alternative/substitute
- There is a time that the products you
intend to buy are not available so you will
look for the best alternative that will suit
your needs and it is also within your
budget.
 1. Right to have basic needs 3. Right to security
- In order to meet all the basic 5. Right to proper information
- Consumer must be properly
needs, the supply of the informed regarding - Every consumer must have
the
products must be ensured and present condition of the the knowledge and
the price should be right. commodities in the market. information about the
Commodities should be safe products do that
and free fro any diseases or advertisement will not deceive
RIGHTS OF A CONSUMER them.
bacteria like red tide, cyanide,
and foot and mouth disease.
2. Right to choose
- All consumers can
Consumerism is achoose
movement to educate and
the products they like4.to buy.
Right to clean and orderly 6. Right to organize
help
Nobody
consumers
can
when buying
force environment
the
the products; It - Consumers can organize and
is also the
consumers protection
to purchase certain
- Toorensure
promotion
the safetyofof the
the form their own group who will
products. Ifofthe products they
consumers fro illness and any assist and help them in their
interests consumers. predicament. Consumerism is
chose are defective, they health
can hazards even from the
return it. products that they will buy, a collaboration of consumer
inspection of the market groups that protect the rights
places and health permits are of the consumers against
required. abusive businessmen.
 RESPONSIBILITIES OF A CONSUMER
1. Always be alert, watchful, and mindful of the sellers, businessmen, and the government
transactions. Through this, dishonesty and deceitful activities can be avoided. Aside from this,
consumers must ask for an official receipt of their purchases.

2. Take action and be vigilant. Consumers could be familiar with agencies to deal with in case of
problems in the purchase of products. There are a few sellers who insist on what they want even
if they know they are wrong.

3. Achieving the goals, purpose, and intentions of any consumer’s organization depends on the
cooperation, coordination, and unity of the members.

4. Protect the environment. This is one big responsibility of every consumer because the
preservation and conservation of the natural resources lies in our hands. We must remember that
the natural resources are the sources of our raw materials.

5. Support and patronize the local products and be a part in developing the local industries which
is necessary for our economic development.
 The government approved and The retailers or the sellers of
small quantity are required to
implemented Republic Act No.
put a price a price tag in every
7394 known as The Consumer
commodity they are selling so
Act of the Philippines. that price monitoring will be
done easily.
▸To protect consumer from Some establishments use the
LAWS THAT hazardous products; barcodes in indicating the
PROTECT price of the products.
THE ▸To provide consumer education Price label is necessary to
and information; guide the consumer adequate
CONSUMER
information regarding the
▸To involve consumer organization price and quality of the
in policy making; and products.
▸To protect consumers from
business malpractices and
deception.
Different laws were enacted to ensure the consumers of their protection:
1. REPUBLIC ACT NO. 7581 or PRICE ACT
- It was approved to ensure that the price of the
basic commodities is according to the government
pricing especially during the period of calamity.
2. REPUBLIC ACT NO. 71 or PRICE TAG LAW
- A price tag is a marking attached to the product
which indicates its price. The law requires that all
goods and services ready for sale should bear a
price tag.
3. REPUBLIC ACT NO. 3452 or ESTABLISHING
THE NATIONAL GRAINS AUTHORITY
- An act that established the National Grains
Authority, a government agency that has the
authority to buy the rice harvested by the
farmers and sell it to the Filipino consumers at a
lower price. Today, the National Food Authority
is responsible for the food/rice supply of the
country.
4. REPUBLIC ACT NO. 3740 or LAW ON
ADVERTISEMENT
- The law was enacted to protect consumers
from fraudulent sales promotion and deceptive
advertisement. Advertisement of fake products
and services is strictly prohibited.
5. REPUBLIC ACT NO. 6675 or GENERICS
ACT OF 1988
- The law promotes, encourages, and requires
the use of generic name on importation,
manufacture, distribution, advertising, and
prescription of drugs. And also, this aims to
ensure the adequate supply of drugs with
generic name at the lowest possible cost and
make them available for free to indigent
patients.
6. ARTICLE 1546, CIVIL CODE OF THE
PHILIPPINES (LAW ON SALES)
- The damage and defects of a product should
not be hidden to the consumer. This law
guarantees that there are no hidden defects in
the products.
8. ARTICLE 188, REVISED PENAL CODE
(LAW ON TRADEMARK)
- Law that penalizes those who will use the
brand, container, wrapper, of other products.

7. ARTICLE 2187, CIVIL CODE OF THE

PHILIPPINES (LAW ON EXTRA
CONTRACTUAL OBLIGATIONS)
- The producer is liable for any
damage/danger to human body, health, and
life of a consumer as a result of using their
products. To avoid such incident, expiration
dates must be indicated in all products.
Expiration dates signifies until when the
product is safe to consume, and it is found in
the label of the product.
 1. Department of Trade 2. Department of Health 3. Department of Energy
and Industry (DTI) (DOH) (DOE)
The agency is concerned With the help of Bureau of The defective devices of
with the quality, safety, Food and Drugs (BFAD), gas tank and LPG,
weighing and measuring, the agency accepts overpricing of LPG, and
GOVERNMENT labelling of price, complaints regarding other malpractices of gas
AGENCIES AND packaging, warranties drugs, cosmetics, food, dealers should be
PRIVATE and advertisement of and others. The agency is reported to this agency
SECTORS THAT consumer products. All also concerned with for proper investigation
abuses, irregularities, and quality, sales promotion, and actions.
INPLEMENT THE malpractices of the trader and safety of the said
CONSUMER ACT and businessmen should products.
be reported to this
agency for proper
investigation.
 4. Department of Agriculture 5. Department of Education
(DA) (DepEd)
GOVERNMENT The agency is concerned with the The agency is focused in the
quality of agricultural products, proper dissemination of
AGENCIES AND sufficient supply of rice, corn, information and consumer
PRIVATE vegetables, meat and poultry, and education regarding the rights
SECTORS THAT other agricultural products. It also and responsibilities of
entertains complaints against consumers.
INPLEMENT THE abusive traders and businessmen.
CONSUMER ACT
 6. Local Government Units 7. Print and Broadcasting
(LGUs) Companies
Local government units formed a The mass media such as radio,
task force to monitor the prices television, e-mail, and
GOVERNMENT
of goods and services and to act newspapers handle and accept
AGENCIES AND on consumer’s complaints. all kinds of complaints from the
PRIVATE consumers.
SECTORS THAT
INPLEMENT THE
CONSUMER ACT
Consumption deals with buying and using goods and services to satisfy our human
needs. Consumption is a major concern of economics in which the different activities of
man depend. Production of goods and services must respond to what people will buy
and use. Consumption cannot be separated from production, thus the latter depends
entirely on the former. It is commonly said that if there is no consumption, there is no
production. Consumption and production complement each other. The success of
consumption is also the success of production and vice versa.

Production Consumption

Relationship of Consumption
and Production
 1. ADVERTISEMENTS
- Advertisement is a way of
motivating and convincing
consumers to patronize certain
products. There are several
ways to present the product of
the company in advertisement.
FACTORS THAT
One is the bandwagon effect,
INFLUENCE OUR which makes people join the
CONSUMPTION rest in patronizing the
products. Next is the
testimonial which presents the
endorsement made by a well-
known personality, usually a
celebrity, for the product and
the last one is branding which
shows the good characteristics
of the product. People buy and
use a certain product due to
advertisement.
2. PRICES
- The first thing that the
consumer does in buying
certain products is to look for
the price. It is the reason why
the price tag is a requirement
in retail selling of products.
This is a factor that limits
consumption. People tend to
ask for the price before buying
anything. Price is the amount
to be paid in buying goods or
services. So if the price is high,
people have second thoughts
before buying the commodity.
 3. INCOME 4.
- Income is the money earned
in selling or producing goods
and services. Our consumption
depends on how much income
we have. According to Ernst
Engel, a German economist, a
FACTORS THAT
large portion of the income of
INFLUENCE OUR man is spent for basic needs
CONSUMPTION like food, when the income is
low. But when the income goes
higher, a lesser amount is
spent on food while a bigger
part is spent on buying things
other than food. The analysis
of Engel clearly defined the
essence of his “Law of
Consumption.”
OCCASION
- Birthdays, anniversaries,
graduation day, Christmas,
New Year, Valentine’s Day, All
Saint’s Day, baptismal, and any
other occasions that people
celebrate affect consumption
because the celebration of any
occasion makes people buy
and give gifts to their loved
ones. Flowers and chocolates
are in demand during
Valentines and Christmas;
dresses, shoes, and jewelries
during birthdays and
anniversaries; and greeting
cards for all occasions.
 5. IMITATION/BANDWAGON EFFECT
- As we imitate what other people
buy, we consume more on that items
as popularized by celebrities and
patronized by friends and neighbors.
FACTORS THAT
INFLUENCE OUR
CONSUMPTION 6. VALUES
- Our own attitudes, behavior, and
values affect our consumption. If
we value thrift, we plan out things
we need to buy and as a result, we
do not become impulsive buyers.
7. SEASONS
- It affects our consumption since
some things are bought depending
on the weather; for example, we
buy umbrella and jackets during
the rainy season, which we do not
buy usually during summer.
All of us consume goods and
servicers based on our
own needs and
satisfaction. In this way,
we can classify the
different types of
consumption.
TYPES OF CONSUMPTION
1. PRODUCTIVE
Buying goods to be used in producing
other goods describes this type of
consumption. In buying the
intermediate goods, the goods need to
be processed to further produce the
other goods. This is productive
consumption. Just dresses, shorts, polos,
curtains, and pillow cases. Flour to
make bread, cake, and many more.
2. WASTEFUL
Buying things that do not give
satisfaction to a person is wasteful
consumption. Buying things that are not
our immediate needs is an example of
this consumption.
3. DIRECT
This happens when an individual
satisfies himself upon buying and using
a certain product. For example, a
person who buys food because he is
hungry and after eating he feels
satisfied, then it is direst consumption.
4. HARMFUL
Today, people buy and use prohibited
drugs, alcoholic drinks, or cigarettes.
Even if these give them satisfaction,
theses are harmful and can endanger
their health.
1. LAW OF ECONOMICS
Individuals have a natural tendency
in satisfying their needs to live. It is
giving priority to their basic needs
rather than luxuries. More
satisfaction is achieved when people
are able to prioritize the vital needs
first rather than any other things. We
decide to buy and use the things we
think are most important. For
example, we buy food instead of
jewelry.
2. LAW OF VARIETY
Goods and services are produced in
different ways and styles. There are
many products in the market to
choose from. So the consumer can
buy different kinds of goods and
services. We buy and use variety of
products that satisfy our needs and
wants. According to this law, we
have greater satisfaction if we use
variety of products than using only
one product. It is the reason why we
eat different kinds of food from
breakfast to dinner so that we will
have greater satisfaction.
LAWS OF
CONSUMPTION
3. LAW OF DIMINISHING UTILITY
Utility refers to the satisfaction
achieved in consuming goods and
services – Marginal utility and total
utility are the two classifications. The
first one is about the added
satisfaction you get while the latter is
the entirely of satisfaction you get in
buying and using the products.
Marginal Utility is the principle that limits
consumption and makes it predictable to
provide comparative consumption
patterns in products whose consumption
in terms of units, is assigned specific
utility values.

LAWS OF
CONSUMPTION
4. LAW OF HARMONY
It is normal for any individual who
decides to buy products that
complement each other because in this
way he attains greater satisfaction.
When we eat chicken, we do so with
garlic sauce, we eat kare-kare together
with bagoong (fish sauce). We wear
dresses that complement our shoes or
bags especially for ladies because by
doing so they feel more satisfied.
5. LAW OF IMITATION
Filipinos are great imitators. We feel
happy when we imitate other people
especially the celebrity we admire
most. We imitate the food they eat,
the advertised clothes they wear and
even their habits. People feel
satisfied when they are able to
imitate other people like their friends
or idols.
LAWS OF
CONSUMPTION
CLASSIFICATION OF STANDARD LIVING
The standard of living refers to the quality and quantity of products
consumed by the individuals for the satisfaction of their needs.

POVERTY Considered to be the poorest of the poor because people don’t have the capacity
STANDARD to meet their basic needs. They just rely on donations or alms given by different
institutions. {Abandoned children and adults, street beggars, and hobos}

BARE-LIVING To satisfy all the basic needs is a difficult one. Having the usual 3 meals a day is
STANDARD not certain. The income of the people under this standard is barely enough for
their needs.

People have the chance to choose the kind of products they want to use. Income
DECENCY
STANDARD
is much higher and better which give them the assurance of providing all the
basic needs and wants of the family. Somehow people have experienced
dignified living.
CLASSIFICATION OF STANDARD LIVING

COMFORT Income is sufficient enough to enjoy the comforts of life. There is worry-free living.
STANDARD Satisfying all the needs and wants is not a problem. People have the opportunity
to save their income.

A small percentage of Filipinos live under this standard. People buy and use high-
LUXURY
STANDARD
quality products. Price is not a problem. There is no limit in their expenses as well
as in choosing and consuming all the products they want. People who belong to
this standard have the lifestyle of the rich and famous.
THANK YOU!
Reported by: Daphne Char P. De Guzman