8th Part
1. Discuss various dimensions of the Consumer Environment.
A. Various dimensions of Consumer Environment are -
1) Economic Environment
The Consumers buying decisions are influenced by economic factors that comprise income, price, technology, the economy of purchase, dependability, quality, and effectiveness of the product. These factors significantly affect the consumer's decision-making process. The other factors are the following :
a) Income -
Income is the primary factor that determines the expenditure on the consumption of goods by individuals. The personal disposable income is the amount of money people are left with after paying the taxes. On the basis of income, consumers are grouped as upper-class, middle class, working-class, and low-income groups. In India, there exist considerable disparities in income and wealth distribution. An increase in income influence the buying habits of the consumers.
b) Savings and Debt -
Consumer expenditures are also affected by savings and debt patterns. In India, people hold savings in the form of bank saving accounts, bonds, shares, real estate, jewelry, and other assets. These savings are utilized by people to finance purchases. Consumers can increase their purchasing power also through borrowing. The availability of consumer credit due to the development of banking and financial institutions has been a major contributor to the growth of the Indian market.
c) Product Considerations -
Products are packaged and labeled attractively and various customer services are also offered along with the product. All these things exert a considerable influence on the decision of the buyers. Brand names, for example, tell the buyer something about the product quality and finally gets associated with the good or bad quality of products. The packaging gives benefits such as protection, economy, and convenience, this also influences the decisions making the process of the buyers.
d) Price Considerations -
The consumer before purchasing the product weighs its price against the perceived values of using the product. Consumers differ in the values they assign to different product features. Keeping this in mind the marketers often change their pricing strategy to cater to and attract different consumer segments. Sales at a concessional price, price reductions, discount offers, and free gifts are some of the sales promotion methods used by marketers.
e) Influence of Technology -
The most important factor today in shaping people's consumption is technology. The consumers today are exposed to different new products, which claim features of greater efficiency, comfort, speed, and reliability, etc and many other new features.
2)Social Environment
The social class comprises a large group of people who possess something in common like values, interests, culture, lifestyles, and social behavior. The social classes are formed when people share similar values, economic circumstances, and feel empathy towards each other. A member of any social class would normally select items that are suitable and considered worthy and of good taste by his class. For example, families of the upper-middle class include successful executives, bankers, businessmen, etc. They are likely to buy particular kinds of houses, furniture, clothing, automobile, recreation and luxuries that are considered worthy and their class thinks is the proper way to live. The social class comprises of several groups -
Reference Group - This is a relatively small social group to which a consumer belongs or aspires to belong. It acts as a guide to acceptable beliefs, values, attitudes, and behavior. Members of such groups consist of small but intimate members who frequently meet and interact with each other. Suitable examples of such groups are friends, peer groups, family, work associates, professional associations, etc.
Membership Groups - Among membership groups, the family is considered the most powerful influential group because of its unique role in early childhood socialization.
Aspirational groups - These are the groups to which an individual makes maximum efforts and aspires to be part of. Sports heroes and movie stars are examples of aspirational groups.
Face-to-face groups - These are the small groups of people where individuals communicate directly. Such groups have a direct influence on an individual's ideas, tastes, values, and behavior.
3) Cultural Environment
The Consumption habits of people are affected by the prevailing culture of the society to which people belong. The society develops distinctive cultures that become part of their traditional way of life, their lifestyle. Individuals may react quite differently to the same situation according to their cultural background and their general experience. Cultural trends are used for market segmentation, product development, advertising, and other aspects of marketing strategy.
3. Discuss in detail the six Consumer Rights provided under the Consumer Protection Act, 1986.
A. The Consumer Protection Act enshrines six rights of the consumers. These are the Right to Safety, Information, Choice, Be Heard, Redressal, and Consumer Education.
1) Right to Safety
The Right to Safety means the right to be protected against the marketing of goods and services which are hazardous to life and property. This means that the purchased goods (or services) should meet the safety requirements of the consumer. The right to Safety is not limited to the quality of the product just at the time of purchase. The products should fulfill the long term interests of consumers in terms of safety needs. Therefore before purchasing, consumers should insist on the quality of the products as well as on the guarantee of the products and services. But this does not mean that without a guarantee a consumer does not have the right to safety.
2) Right to be Informed
Right to be informed implies information about the quality, quantity, potency, purity, standard and price of goods or services, as the case may be, so as to protect the consumer against unfair trade practices. In other words the consumer can insist on getting all the information about the product or service before making a choice or a decision to purchase the product. The manufacturer or trader is duty-bound to give this information. This right, enables the consumer to act wisely, and responsibly do not fall prey to the high-pressure selling techniques.
3) Right to Choose
The right to choose means a buyer has the right to buy a particular product out of a number of products available and get the satisfaction in terms of quality and price of goods. A shopkeeper cannot force or impress upon a customer to buy a particular brand or a type of product. In case a particular product is manufactured by only one producer, that is a monopoly product, then this Right ensures satisfactory quality and services at a fair price.
4) Right to be Heard
The Right to be heard means that consumer's interests will receive due consideration at the appropriate forums. It also includes the Right to be represented in various forums that are formed to look into the welfare of consumers.
For the exercising of this right, both the State and the voluntary agencies are supposed to provide necessary forums. Under the social accountability of producers, they should also provide such forums in the shape of grievance redressal or customer service departments or wings. By enacting the Consumer Protection Act, the Government of India has created Consumer Forums at district, state & national levels to look into the complaints of consumers. The consumers themselves have started forming non-political & non-commercial consumer organizations which can be given representation in various committees formed by the Government in matters relating to consumers.
5) Right to Seek Redressal
This Right implies the right of a consumer to seek redressal against the unfair trade practices or unscrupulous exploitation of consumers. It also includes the Right to fair settlement of the genuine grievances of the consumer. It also includes the right to receive compensation for faulty goods or services. Redressal is the natural follow-up after making a complaint and thus making a settlement in such a manner that it is acceptable to both the consumer as well as the seller. Consumers must make a complaint about their genuine grievances. Many a time the value of the complaint may be very small but its impact on the society as a whole may be very large. They can also take the help of consumer organizations in seeking redressal of their grievances.
6) Right to Consumer Education
This Right encourages a person to acquire the knowledge and skill to become an informed consumer throughout life. As we know that the ignorance of the consumers is largely responsible for their exploitation at the hands of the seller's ex rural consumers, so the consumers should be aware of their rights and must exercise them willingly. The Consumer Protection Act itself provides the Right to consumer education. Therefore it becomes the responsibility of the government to provide necessary information to the consumers about their rights. Creating awareness among consumers is also part of their education. This will help a consumer in protecting himself/herself against fraudulent, deceit, and grossly misleading information, advertising, labeling, or other practices. Consumer education also brings alertness and the ability to question about price and quality of goods.
5. Who is a Consumer? Discuss the Characteristics of ‘Consumer Buying’.
A. The consumer is one who buys a good or hires a service, on payment, for final consumption or uses irrespective of age, sex, language, religion, or social group. The main characteristics of the definition of the consumer can be stated as follows:
i) A consumer is one who consumes either goods or hires or avails of any services.
ii) The word 'Consumer' is defined separately for the purpose of goods and services.
iii) For the purpose of goods, a consumer means a person belonging to any of the following two categories:
a) One who buys any goods for consideration.
b) One who uses such goods with the approval of the buyer.
iv) For the purpose of services, a consumer means a person belonging to any one of the following:
a) One who hires any service or services for consideration.
b) One who is a beneficiary of such service.
v) A person who buys goods for commercial purposes is not a consumer. In other words, only a person who buys goods for private use or conception only is a consumer.
Characteristics of Consumer Buying -
Consumers purchase small quantities of a variety of goods. Buying is often crowded into spare moments and is only one of the many tasks carried on. A multitude of different goods may be selected. Types of goods consumers buy include convenience goods, shopping goods, and specialty goods. Convenience goods (like food products, soap, daily newspapers, confectionery, etc.) are usually purchased frequently and with a minimum of effort in buying. Shopping goods (lie ready-made garments, furniture, shoes, etc.) are those which the consumers buy after considering such factors as suitability, quality, price, and style in the process of selection.
Specialty goods (like TV, Stereo, refrigerators, camera, etc.) have unique characteristics or brand identification for which most buyers are willing to make a special purchasing effort. Included in the types of services that consumers hire or avail of on payment are transportation, communication, banking, insurance, house building, medical treatment. education and training, electricity and water supply, etc.
6. Write a note on ‘Consumer Responsibility’.
A. A responsible consumer is a person who exercises his/her discretion with the full awareness of the implication of his/her right to choose and is accountable or answerable to other consumers and to the environment for his/her purchase decisions.
The components of the consumer's responsibility include:
- recognition of one's power & ability to control one's own consumption practices.
- creation of an environmentally friendly lifestyle, or what is called a "greener lifestyle".
- awareness of accountability for one's actions and purchase decisions
- capacity for rational thought
- Being a watchdog over the activities of the industries and businesses
- Demanding the standards and quality of the products.
Citizen as Consumer
A person's range of activities and interactions extends from his/her home to the market place as a consumer. But as a citizen, the area of his/her activity expands to encompass not only what he/she can carry from the market to his/her home for personal use, but what he/she can give in return to society and to the environment. This involves not only action but also the decision not to act in a certain established or acceptable manner. For example, as Consumer Responsibilities a user of market commodities he/she takes partial responsibility for garbage disposal.
The following are some of the areas where consumer intervention can influence the market to act responsibly towards the consumer. For that the consumer should always check correct weights and measures, dates of manufacture and expiry, pricing and ingredient labeling, the inclusion of quality marks (ISI, Agmark, Eco-mark), Warranties, and guarantees, etc., before making a purchase. This is the first dimension of the consumer's responsibility as a citizen. His/Her other dimension of responsibility is to the environment which is global and thus makes he/her a citizen of the world. This awareness of environmental issues determines the choice of products which provides a negative environmental impact. For example use of Chloro Flouro Carbon (CFC) - free air- conditioners and refrigerators. It also involves a conscious rejection of non-biodegradable packaging, and minimal use of chemicals at home.
Ethical Consumer
The ethical consumer buys and invests appropriately and ethically. Price is not the only priority for he/her; ethical behavior means one is doing what is right and good in most situations for most people. An Ethical Consumer is also a green consumer. The evolution of a consumer into a green consumer means that the consumer exercises He/her vote, not only in favor of market responses to his needs but also the individual's responsibility towards the environment.
7. Write a note on the History and Growth of the Consumer Movement in India.
A. The origin and growth of the consumer movement in India have many similarities to the movements elsewhere. In the 1960s, organizations such as the Consumer Guidance Society of India (Bombay) were formed to inform and educate consumers on the quality of goods and services and to conduct simple tests on goods of daily consumption. Shortages in the supply of essential commodities and the unsatisfactory functioning of the public distribution system (PDS) led activists to form consumer organisations in their towns and localities to ventilate their grievances to the authorities concerned. Several such organisations which were formed between 1970-1980 were primarily concerned with the problems of inflation, food adulteration, and the public distribution system. These organisations serve a very useful purpose as voluntary vigilance groups in the market place.
The third phase of growth covering the period from 1981 to 1990 signifies the expansion and consolidation of the consumer movement in India, especially after 1986. With the enactment of the Consumer Protection Act 1986, there has been a spurt in the number of new organisations in the country.
The period from 1991 to 2000 AD is being considered as a period that would empower the Indian consumer. The major programmes include consumer education, product testing, product safety, promotion of eco-labeled products, and conservation as compared to the mindless consumption of goods.
In India, the basic reasons for the consumer's movement have been:
# Shortage of consumer products; inflation of the early 1970s
# Adulteration and the Black Market.
# Lack of product choices due to lack of development in technology
# Thrust of consumer movement in India has been on availability, purity, and prices
The factors which stimulated the consumer movement in recent years are:
# Increasing consumer awareness
# Declining quality of goods and services
# Increasing consumer, expectations because of consumer education
# Influence of the pioneers and leaders of the consumer movement
# Organized effort through consumer societies
The first stage of movement was more representational in nature, i.e., to make consumers aware of their rights through speeches and articles in newspapers and magazines and holding exhibitions. The second stage was direct action based on the boycotting of goods, picketing, and demonstration. However, direct action had its own limitations, which led to the third stage of professionally managed consumer organisations. From educational activities and handling complaints, it ventured into areas involving lobbying, litigation, and laboratory testing. It has played a role in hastening the process of passing the Consumer Protection Act, 1986 which has led to the fourth stage.
8. Write a note on ‘Why the Consumer needs Protection’.
A. Fleecing of customers by sellers has become widespread today in the market. False or misleading advertisements or representations, fixing, bargain prices, the offering of gifts, prizes, contents, non-compliance of product safety standards and hoarding of goods has become rampant in the markets that make us knowingly or unknowingly victims in one way or the other. All these factors are responsible for creating pressure on the government for enacting laws to protect consumers from greedy elements in the markets.
Consumer protection envisages policies and actions, usually involving intervention by the government, designed to ensure that all consumers obtain goods and services of reasonable quality at fair prices. Consumer protection embraces all goods and services and the protection sought is against unscrupulous sellers or uncaring civil servants, against information regarding price and quality that may be false, biased, or incomplete, or the protection needed may be from laws, regulations and regulatory agencies which favor producers rather than consumers. To protect consumers, the govt enacted certain laws. These laws confer a number of rights on consumers and impose duties on the sellers, manufacturers, or those who provide services. More importantly, these rights are not merely social codes but most of these now have legal sanctions behind them. In other words, we now have enforceable rights.
The idea of Consumer Rights is a product of modern times. For long the traders and manufacturers have been disregarding the interests of consumers in respect of quality, price, and availability. In legal terms protection of consumer interests by the provision of rights also means the imposition of duties on the sellers, manufacturers, and providers of services. Therefore violation of these rights and duties may entail legal action or punishment. The producers, manufacturers, and providers of services are supposed to be conscious of their duties towards society. That is, their sole concern should not be profit only. At present, there are pressures from the social, legal, and judicial institutions in addition to those from the consumer and environment movements to ensure consumer interests are protected.
12. Discuss in brief the factors responsible for attitudinal changes.
A. There are many factors responsible for changes in consumer behaviour and attitudes, these are -
Inherent Nature of Consumers
By virtue of their inherent nature consumers do not always make rational, economic, extensive decisions. In fact, there are consumers who are rash or passive in their decisions. The rash individual just buys products and services on impulse, whereas the passive buyer gets easily lured by attractively exhibited goods or packaging. They end up buying products they really do not need and soon regret having bought them.
Personality Traits
Every person has some natural and acquired personality traits, based on which people are divided into two broad categories. The extrovert and the introvert. The extroverts are usually impulsive buyers and they-easily try new products.
Social Influences
Social influences include the influence of family, friends, peer groups, workgroups, club mates, etc. Family is the basic social group in which an individual is born and therefore is most influenced during the formative years of life. Social groups include workgroups, leisure groups, walking companions, shopping groups and partying groups, and consumer action groups. The social group may influence a consumer's behaviour through discussions about products, services, and particular stores which the members may patronize.
13. Write a note on ‘The Consumer Manifesto’.
A. The Consumer Manifesto is based on the principles of - Access to essential goods, safety, representation, health; environment, fair practice, equity, availability of grievance redressal means, ethics, accountability, etc. It sets out to redress the imbalance in
knowledge and power between suppliers and consumers. It demands -
# Participation by consumer organizations on an equal footing with other corporate groups in society, in the formation of policies that affect those they represent;
# Ensuring that the basic needs of all consumers are met; adequate food, clothing
shelter, health care, sanitation, and education;
# Measures to enhance fair competition and to control harmful business and professional
practices; for example, to oppose a practice that misleads, restrict choice, or erect barriers to trade so as to "protect" business and state enterprises at the expense of the private individual;
# Laws and standards that safeguard consumers from hazardous goods and services,
as well as from the social costs and environmental pollution;
# Procedures, formal and informal, to provide effective redress to aggrieved consumers
at all income levels;
# Accurate and adequate information to help consumers choose;
# Consumer education to ensure that all people may acquire the knowledge and skills
necessary to be informed and active consumers exercising their rights and unfulfilling their economic role, special attention must be given to the needs of vulnerable groups such as children, handicapped, and the elderly.
# Consumers assert the right of organized consumers to be represented, heard and
heeded nationally, regionally, and internationally.
14. Discuss in brief the impact of Mass Media and Advertisement on Consumers.
A. The main objective of Mass Media and Advertisement is to influence the short-term and or long-term behavior of consumers. They follow the principle of AIDA(attention, interest, desire, and action), and make use of behavioral concepts for effectiveness. There is both a positive and negative impact of advertisements. Some advertisements add to our knowledge. We may even feel inspired to work more and earn more on watching such ads. However, we can also come across consumers among ourselves who experience some negative effects of advertising. They may often be found dissatisfied, irritated and anxious, confused, experiencing restriction on freedom of choice, or undergoing stress. However, it can be added that some such effects are more likely to occur when we start believing blindly every advertisement that is projected upon us. They are more likely to happen when we
consistently fail to use wisdom, ours, or others.
15. Discuss in brief the ‘Role of Trade and Industry’.
A. Trade and industry whether producing and selling goods or providing services cannot function in isolation. They have to realize that their survival depends on consumer satisfaction. They have, therefore, to evolve a code of conduct and business ethics through discussions with consumer groups and organizations. They have to ensure that the quality of their products is according to prescribed standards and that they are safe and priced reasonably. They have to voluntarily ensure that they do not adopt any unfair or restrictive trade practices to exploit the consumers.
They have also to ensure that the quality of their products conforms to the standards of weights and measures and that their packaged commodities, conform to the prescribed rules and regulations containing all relevant information about the product. They have to voluntarily evolve and adhere to certain ethical standards and codes of conduct in advertising their goods and services to avoid misrepresentation and misleading of consumers.
They have to ensure that their products and services carry appropriate guarantees and warranties and that these are scrupulously honored whenever defects and deficiencies are pointed out by the consumer. They have also to ensure courteous behavior towards customers and provide proper and effective after-sales service where required.
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