Preparation key to stretching shopping dollar

November 14, 2011

Holiday shoppers prepare! That's what Donald Lichtenstein, a business professor at the University of Colorado Boulder, is urging holiday shoppers to do this year. He says, take the time to prepare yourself, including researching price, quality and brands, before you hit the stores or Internet.

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Nov. 14, 2011                         

Holiday shoppers prepare! That’s what Donald Lichtenstein, a business professor at the University of Colorado Boulder, is urging holiday shoppers to do this year. He says, take the time to prepare yourself, including researching price, quality and brands, before you hit the stores or Internet.

CUT 1 “How do you get that information? Well you need to find an unbiased source, somebody who doesn’t have anything to gain by what you decide. Not a sales person. (:10) Personally, I rely on consumer reports. This is not an add for Consumer Reports, they’re not paying me or anything like that, but that’s what I do. I go to Consumer Reports and look independently of price, what the quality rates are. It has served me very well over the years.” (:28)

Being prepared can save consumers money, steer them away from overspending and even change their whole way of thinking about purchasing gifts during the holidays, says Lichtenstein, the chair of the marketing department at CU-Boulder’s Leeds School of Business.

CUT 2 “There are some product categories when you pay a higher price you do get higher quality. And there are others ones where price and quality just don’t relate to each other. It’s random, the relationship. You’re just as likely to get a high quality item by paying a low price as a high price. (:17) And then you’ve got, believe it or not, a third category of goods where the relationship between price and quality is actually negative, meaning that as you pay a higher price you get worse quality, so the notion of consumers going into the marketplace without independent quality information, that’s a big mistake.” (:38)

And Lichtenstein says do not rely on price or brand names as an indicator of quality.

CUT 3 “One mistake many consumers make is that they rely on price or brand names as an indicator of quality, they’ll say you get what you pay for, the higher the price the higher the quality. (:09) Many consumers follow that and will go out and buy a higher priced item because they believe they are getting a higher quality item. Nothing can be further from the truth, in terms of a generalization.” (:20)

Once you’ve researched quality, then do your price search. There are many ways to do this, but a good place to start is online.

CUT 4 “There is no substitute for going online and spending a little bit of time, when you’ve decided what it is you’re looking for, using shopping bots, shopping.com, bisrate.com and also visiting particular merchants who you know carry the item and looking at the prices they charge.” (:21)

Lichtenstein also advises shoppers to be aware that there is a multitude of advertising efforts at work that are geared toward getting them to spend more.

CUT 5 “I think it’s two major things here. One is vigilance. Vigilance on quality, vigilance on price, vigilance on what merchants are doing, vigilance on ‘am I actually going to use that product.’ (:14) A the second thing I go back to is, during the holiday season, don’t get caught up in the emotional shopping. Don’t think I’ve got to buy the best gift for this person and how much they’re spending on me, and getting into this social exchange.” (:28)

Other shopping tips Lichtenstein offers for consumers:

- Shoppers should be wary of stores that offer price match guarantees because market research has shown that retailers offering these guarantees often charge higher prices.

- If shopping with coupons avoiding buying product just to “get a deal.” Instead use them on products you usually purchase and plan to use in the relatively near future, if they have a limited shelf life.

- Shoppers should be cautious of reference price advertising – such as “was $79.95 now $49.95.” In many cases, says Lichtenstein says, the starting prices are inflated or fictitious.

-CU-

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