1st Part
Q. Examine the role of advertisement in influencing consumer behaviour. (20)
A. Advertising is a process which encourages consumers to go through a series of steps, that may ultimately result in a sale. The role of advertising is to:-
# capture attention,
# secure interest,
# create desire,
# encourage action.
These roles are achieved by targeting the vulnerable groups of consumers like children, women etc., by focusing on the benefits of products, their special features, and advantages over other products. This is generally done through catchy slogans, attractive pictures, and so on.
A number of advertising agencies have sprung up to help the manufacturer in his efforts to sell the products, whereas the consumer is often left in a state of confusion. This is because ads exploit the emotions of people without giving much information that would help the consumer to make informed choices. It should be noticed that the main objective of manufacturers is to sell the product and does not include consumer satisfaction. It is therefore up to the consumer to look after his own interests and not fall prey to the ads as these can be misleading or deceptive in nature. It is, therefore, necessary to guard oneself against falling into the trap of the manufacturers through ads.
Ads appear through different media both indoor and outdoor - to influence the decision-making process of the consumers through their appeals. Some ads have an emotional appeal transmitting feelings of love, care, pride, frustration or guilt. Others make rational appeals to the consumer emphasizing on quality, economy, value and performance. Still, others have a social or moral appeal, with the messages of right or wrong, good-bad, superior-inferior and so on. However, a combination of emotional and rational appeals is considered to be the most effective in drawing viewer attention.
Buying Motives
Buying motives are always a dynamic process because the needs and goals of the consumers constantly change. It depends on individual physical, mental and emotional state, as well as the environment, and experience of a person with products and the services. If consumers succeed in achieving their goals they get more confident and set higher goals for themselves to achieve, but if they fail they tend to lower their aspirations and try till they succeed, thus continuously keeping buying motives in motion.
Advertisements stimulate consumers
Advertisements stimulate consumers in various ways:-
# They deliver messages that focus on children in order to get the attention of the mothers, such as the role of a product to secure and promote the health of children.
# They may use negative comments in the messages, frequently in the form of rumours that are untrue.
# They also try to generate interests through informal discussions between two or more people as often seen on the T.V. for a number of products.
Today, advertising has become a very important medium of communication between the manufacturers and the consumers, though advertisements may often be emotive and vague rather than factual. In fact, some ads may even carry misleading or deceptive statements to entice the consumer.
Thus, advertisement of products through various media instruments such as newspapers, magazines, hoardings, banners, neon signs, posters, radio and T.V. commercials, help to influence the consumer decision-making process. Both indoor and outdoor advertisements today have an important influence on consumers. Advertising has emerged as a potent promotional tool in enhancing sales of existing products and introducing new products. Companies use advertising to increase the awareness of consumers by providing information about their products, services or organisations.
Q. What do you understand by Consumer Environment? (10)
A. The consumer environment refers to various factors that influence the decision-making process. These factors are -
Family Environment -
The influence of a family on its members is very strong or pervasive. The effect of traditional attitudes, interests, motivations, etc. is evident not only in the formative years but is likely to extend throughout the life span of its members. People's aspirations, professional opportunities, general behaviour and expectations are deeply affected by the traditional living style of their families.
Economic Environment -
Consumers' buying decisions are also dependent on various economic factors such as income, price, technology, the economy of purchase, dependability, quality & operational effectiveness of the product. These factors significantly affect consumers' decision-making process. Some of the other important factors are as follows-
a) Income
Income is a primary economic influencing factor that determines the consumption pattern of individuals. Consumers, on the basis of income, are grouped as upper-class, middle class, working class and the low-income groups.
B) Savings and Debt
Consumer expenditure is also affected by savings and debt patterns. In India, people hold savings in the form of bank saving accounts, bonds, shares, real estate, jewellery and other assets. These savings are a major source of financing purchases. Consumers can increase their purchasing power also through borrowing.
c) Product Considerations
A product can be defined as anything that can be offered to a group of consumers for attention, acquisition, use or consumption that might satisfy the requirement. It includes physical objects, services, persons, places, organisations & ideas. Packaging also plays an important part and influence buyers' decisions.
D) Price Considerations
Price remains an important factor in influencing consumer behaviour. The consumer decides whether the price is right for the product a company is selling.
Social Environment
The social class comprises a large group of people that possess similar values, interests, lifestyles and behaviour. The social classes are formed when people feel empathy with others that share similar values and economic circumstances. A member of any social class would normally select the items and purchase the goods that are considered of good taste by the class. Families of the upper-middle class, for instance including businessmen and executives are likely to buy particular kind of houses, furniture, clothing, recreation and luxuries that are considered by their class as the proper way to live. In addition to social classes, there are social and occupational groups which determine the consumer behaviour.
Cultural Environment
Consumption habits are a part of the behaviour pattern of individuals, that are influenced by the prevailing culture of the society to which people belong. Individuals may react quite differently to the same situation according to their cultural background and their general experience. Bank Managers, for example, are expected by the society in which they live to be reliable, honest and serious-minded individuals. Traders, on the other hand, are suspected to be greedy and bent on making profit by exploiting customers.
In addition, cultural values in society also impact the products and services that are demanded. The status of women in a particular culture may affect the consumption of certain types of consumer products, such as domestic labour-saving equipment (Washing Machines, Microwave Ovens).
Q. What role industry and trade are expected to play towards consumer satisfaction? (10)
Q ROLE OF TRADE AND INDUSTRY in consumer empowerment or protection.
A. The trade and industry whether producing and selling goods or providing services have to realize that they cannot function in isolation. They have to realize that their survival depends upon consumer satisfaction. Therefore they have to evolve a code of conduct and business ethics through discussions with different consumer groups and organisations. They have to ensure that the quality of their products that they are manufacturing are according to the safety standards and that they are safe and priced reasonably. They have to voluntarily ensure that they do not indulge in any unfair or restrictive trade practices to exploit the consumers.
The industry will also have to ensure that the quality of its products conforms to the standards of weights and measures. Moreover, their packaged commodities, conform to the prescribed rules and regulations and the label contains all relevant information about the product. They have to voluntarily evolve and adhere to certain ethical standards and code of conduct in advertising their goods and services. They have to avoid misrepresentation of facts and should not mislead the consumers.
The industry will have to ensure that their products and services carry the appropriate guarantees and warranties and that these are scrupulously honoured without delay whenever defects and deficiencies are pointed out by the consumer. They will also have to ensure the courteous behaviour of their staff towards the customers and provide proper and effective after-sales service where ever required. The industry should take social responsibility seriously and start grievance redressal cell or customer care department or wings.
Q. Main role of government in consumer protection. (6)
A. 1 The government should ensure the establishment of an effective and responsive administration which is not only citizen-friendly but is also transparent and accountable.
2 Governments should take appropriate consumer-friendly initiatives while providing services to the people. It can be done either directly or through various public sector units and other autonomous bodies and organisations.
3 Governments should provide adequate support to voluntary non-government organisations and thereby strengthen and promote the consumer movement.
4 Governments should ensure strict enforcement of various consumer protection laws, rules and regulations. It should set up an appropriate mechanism and citizens should be involved both for monitoring and for providing necessary feedback.
5 Governments should set up Regulatory Bodies for Price monitoring and provide representation to consumer organisations in such bodies.
6 The government should ensure time-bound services to the people that means services will be provided within time limits. It should ensure prompt, effective and time-bound resolution of consumers grievances and complaints.
Q. Consumerism (6)
A. The term consumerism refers to the hidden range of activities of government, business and independent organisations that ensure that the rights of the consumers are not infringed upon. With the introduction of modem technology and the growth of large scale enterprises, the mass production and distribution of goods and services made the business activities more competitive and highly complex. Hence, regulation and control have increasingly become more important. The following factors have contributed to the growth of consumerism-
a) The spread of education and knowledge have made people aware of better standards of living and their rights as consumers.
b) Rising incomes have increased the purchasing power of people and their ability to spend more on the consumption of goods and services.
c) The rise in prices of products has have prompted the consumers to ask for a better quality of goods. If they do not get goods worth their money, consumers are frustrated.
d) Due to inflation in recent times and increased prices of goods, consumers think seriously about the quality, quantity and utility of products.
e) There are a large variety of products, electrical and electronics that have complex features introduced by new technology which has led the consumers to expect perfection in quality standards.
Q. What do you mean by the term 'Consumer Dynamics'?
Discuss the factors responsible for attitudinal changes in consumers. (20)
A. A study of forces which determines the consumer reactions or responses to their economic, social and cultural environment is called "Consumer Dynamics".
Nature of Changes
Consumers change their attitudes according to their environment depending on how they see the world around them. Two people may see a product in the same shop but react differently to it, based upon their perceptions which differ according to their own needs, values, expectations, resources, culture and social biases or norms, habits and peer group influences.
Attitudes may change over a period of time when needs, values and expectations change because of changing the external and internal environment of the people. The internal environment denotes the mental, emotional and psychological state of the person at the time. For ex., When a buyer goes to a shop with children, the need to keep them quiet will make the parent buy chocolates for them. But at a different time, when the mother has to rush home and cook for the children, her mind will not go to the attractively displayed chocolates, but she will quickly buy what she came for and rush home.
There are many factors which are responsible for changes in consumer behaviour and attitudes, some of them are as follows -
Inherent Nature of Consumers
By virtue of their inherent nature consumers do not always make rational, economic, and sane decisions. They would rather settle for a decision which is just "good enough" or satisfactory in the present circumstances at hand. 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.
Between the two there is a third type of consumer called the cognitive or problem-solver. He actively lookout for products and services that fulfil his or her needs. There is also available a fourth type of consumer, the emotional one who associates deep feeling with his purchases, such as love, hope, fear, fun, and even magic. Such people go through a lot of effort to find what they want, because of their deep emotional involvement with their shopping.
Personality Traits
Every person has some natural and acquired personality traits, which gets reflected in his/her purchasing behaviour. People can be broadly divided into two main categories as far as personality traits are concerned. The extrovert and the introvert. The extrovert consumers are very free with their money and are usually impulsive buyers. They are ready to spend freely to please and to get acclaim from others. They will often buy the products that will give them a feeling of "high status" because they can never be alone and always crave for the company.
The introvert consumers are generally loners and will go to the market only if they have to, for making the purchases that strictly satisfy needs. When they go with friends, they may get influenced but are generally very careful about not wasting money. They have the ability to appreciate attractively displayed goods and are quite happy to let others buy them. When they do buy some present for people they care for, they get very emotional.
Social Influences
Social influences include the influence of family, friends, peer groups, workgroups, club mates, etc. The family is considered the most powerful influential group because of its unique role in early childhood socialization. Family is the basic social group in which an individual is born and therefore is most influenced during the formative years of life. Childhood socialization influences the consumer socialization, as it is during the childhood the children acquire skill, knowledge, and attitudes that enable them to function as consumers.
Other Social groups include workgroups, leisure groups, walking companions, shopping groups and partying groups and consumer action groups. All of these social groups through discussions about products, services and particular stores which the members may patronize influence a consumer's behaviour. All these have an important role to play in the consumer's behaviour and attitudes.
Q. Discuss the scope and ambit of different classifications of consumers. (10)
A. According to the Consumer Protection Act, 1986, a "Consumer" means any person who buys the goods or hires any service for which money has been paid, or promised, or partly paid and partly promised, or under any system, money is to be paid through of deferred payments. It does not include a person who buys such goods for resale or for any commercial purpose. After an amendment made in the Act in 1993, it also includes the person who buys the goods and uses it exclusively for the purpose of earning his or her livelihood, by means of self-employment. Thus, a widow who buys a sewing machine or small cottage industrialists who buy equipment for the purpose of earning a living is also consumers according to the recent amendment. The main characteristics of the definition of the consumer can be stated as follows:
i) A consumer is one who consumes either the goods or hires or avails any of the services in exchange for money.
ii) The word 'Consumer' is defined separately for the purpose of goods & 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 the 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 is a consumer. However, by an amendment act of 1993, the consumer also includes the person who buys the goods and uses it exclusively for the purpose of earning his or her livelihood, by means of self-employment.
The profile of a consumer depends to a large extent on the complexity of the social structure. By and large, consumers may be divided into the following categories:
1) Age (children, teenagers, adult and senior citizens.)
2) Gender (male-female)
3) Social Cultural Status (literate-illiterate, employed-unemployed, skilled-unskilled, rural-urban, etc.),
4) Economic status (rich-poor-middle class).
Q. Discuss the problems faced by the consumers in a Market Economy. (20)
A. The fleeing of consumers by sellers has become very common in the market place. In today’s market economy the consumer has no power to order and purchase what he desires. He dreams of a buyers market, but everywhere he comes across only a seller's market. Business firms spend huge amounts of money on advertising their products and services. Most of these advertisements are vague and highly exaggerated with no provable claims. They are factually incorrect and mislead the customers. Commonly seen advertisements of toothpaste, cosmetics, tonics, body-building, figure-improving and height increasing instruments make claims in very attractive and catchy slogans. They entice the customers to purchase the goods. Though these advertisements do not explain how the products would benefit the consumers as claimed yet the consumers believe them because of the appealing way of presentation. "Take it or leave it" is the sellers' attitude towards the consumers. Until recently Government's apathy towards the plight of consumers has also been a matter of great concern.
The manifestations of consumer neglect are evident in the adulterated food that we eat. The food provided through government agencies or available in the open market is of poor quality. The spurious, unsafe and sub-standard food products that we buy; the repeated shortage of essential commodities which is accompanied by black-marketing and profiteering are the other problems faced by consumers. The consumers are forced to buy hazardous drugs (banned in most countries in the West) that are pushed through the counter. The unethical & misleading advertisements with which we are bombarded is accompanied by the humiliation, indignity and harassment at the hands of the public servants in various public sector undertakings such as railways, transport corporations, nationalised banks, telephone department, power boards, insurance companies and hospitals etc...To make matters worse we consume polluted water and breathe poisonous air.
In a market economy or a high consumption society, the price of a commodity, service are determined according to supply and demand in the market. How the market economy reacts to the consumer depends upon the behaviour of the consumer. When the demand for a product increases for whatever reasons the producers can manipulate the market and exploit the consumers by creating artificial scarcity and by reducing the supply of the product into the market. The consumers can fulfil their responsibility in this regard by not resorting to hoarding or bulk-purchase, at the time of scarcity. And consumer protection
Q. Consumer Satisfaction. (6)
A. An efficient satisfied consumer buyer is the one who gets the desired goods of high quality at the cheapest possible price. Consumers are generally fleeced in the market because they come to the market with a very hazy notion of what is required. The indecision is caused due to failure to study needs or the requirements . The ignorant, careless, thoughtless, selfish buyers are responsible to a large extent of the high cost of the merchandise. The consumer would be satisfied if he gets the value for money and it is possible only when consumers spend time in planning, studying various sources of information available, thinking for themselves, evaluating various family needs and judging values. Needs and wants should be separated and a balance has to be maintained in expenditure for the best use of resources. The consumers can take the initiative & seek guidance from reliable and competent sources before deciding to buy.
Q. Consumer Problems (6)
A. The consumer of today has no power to order what he desires. He dreams of a buyers market, but everywhere he goes only a sellers' market. Business firms spend huge amounts of money on advertising their products and services. Most of these advertisements contain exaggerated and unprovable claims. Commonly seen advertisements of toothpaste, cosmetics, tonics, body-building, figure-improving and height increasing instruments make claims in very attractive and catchy terms. Though these advertisements do not explain how the claimed qualities of the products produce the benefits, the consumers believe them because of the appealing way of presentation. "Take it or leave it" is the sellers' attitude towards the consumers. Until recently Government's attitude towards the plight of consumers has also been largely one of indifference.
The manifestations of consumer neglect are evident in the adulterated food we eat; the spurious, unsafe and sub-standard products we buy; the repeated shortage of essential commodities accompanied by black-marketing and profiteering; the hazardous drugs (banned in most countries in the West) that are pushed through the counter; the glossy, unethical and manipulative advertisements with which we are bombarded; the humiliation, indignity and harassment that we are subjected to by public sector undertakings such as railways, transport corporations, nationalised banks, telephone department, power boards, insurance companies and hospitals etc. and the polluted water and air we drink and breathe.
In a market economy or a high consumption society, the price of a commodity, service or production factor is determined according to supply and demand of the market. How the market economy is related to the consumer depends upon consumer behaviour. When the demand for a product increases for whatever reasons the producers can manipulate the market and exploit the consumers by creating artificial scarcity and by reducing the supply of the product into the market.
Q. Explain the following terms- Consumer (150words)
A. A consumer is defined as a person who buys goods and services and makes use of public utilities as well as natural resources like air and water. In other words, consumer refers to those who use goods and services for the satisfaction of their personal requirements thus excluding buyers who purchase for manufacturing purposes or for resale.
According to the Consumer Protection Act, 1986, a "Consumer" means any person who buys goods or hires any service for a consideration which has been paid or promised, or partly paid and partly promised or is settled under any system of deferred payment. It also includes any user of such goods who has the permission to use it from the person who buys such goods for consideration. It does not include a person who obtains such goods for resale or for manufacturing or use it for any other commercial purpose. However, through Amendment made in the Act in 1993, commercial purpose does not include goods bought and used exclusively for the purpose of earning his or her livelihood, by means of self-employment. Thus, a widow who buys a sewing machine or small cottage industrialists who buy equipment for the purpose of earning' a living is consumers according to the recent amendment.
The profile of a consumer depends to a large extent on the complexity of the social structure. By and large, consumers may be divided into the following categories:
1) Age (children, teenagers, adult and senior citizens.)
2) Gender (male-female)
3) Social Cultural Status (literate-illiterate, employed-unemployed, skilled-unskilled, rural-urban, etc.),
4) Economic status (rich-poor-middle class).
Q. The concept of the market economy revolves around commercialism. Discuss. 20
A. Commercialism can be defined as the marketing of products which promotes individual consumption. Since the main objective of commercialism is to sell goods, advertisements of products become essential. Advertising showcases the products and services in a variety of ways often in an exaggerated way to entice the customers.
A number of advertising agencies have sprung up to help the manufacturer in his efforts to sell the products, whereas the consumer is often left in a state of confusion. This is because ads exploit the emotions of people without giving much information that would help the consumer to make informed choices. It should be noticed that the main objective of manufacturers is to sell the product and does not include consumer satisfaction. It is therefore up to the consumer to look after his own interests and not fall prey to the ads as these can be misleading or deceptive in nature. It is, therefore, necessary to guard oneself against falling into the trap of the manufacturers through ads.
Ads appear through different media both indoor and outdoor - to influence the decision-making process of the consumers through their appeals. Some ads have an emotional appeal transmitting feelings of love, care, pride, frustration or guilt. Others make rational appeals to the consumer emphasizing on quality, economy, value and performance. Still, others have a social or moral appeal, with the messages of right or wrong, good-bad, superior-inferior and so on. However, a combination of emotional and rational appeals is considered to be the most effective in drawing viewer attention.
Such is the intrusion of the aggressive marketing strategies that even the non-commercial aspects of human life have been commercialized today. The greatest example of this is the Christmas celebration in the Western nations. This festival has been so commercialised and exploited by the market, that it has almost lost its cultural and religious significance. On similar lines, the major Indian festivals like Diwali, Holi are being exploited by the marketers for commercial reasons. Exchange of expensive gifts and sweets, huge expenditure on purchase of fireworks and expensive illumination have become a part of Diwali celebrations in modem India. Market forces have infiltrated our festivals with impunity however a responsible consumer wouldn’t fall prey to such gimmickry. He would want to preserve the religious & the cultural significance of the festival, rather than participate in it only as a consumer. Advertising is just one aspect of commercialism. Commercialism has penetrated our modern living in so many different ways that people are in danger of becoming indifferent to its effect and reach. The business side of life should co-exist with family, culture, recreation and all other dimensions, but if it is allowed to grow unchecked then it ends up destroying the social balance which is essential for a healthy life.
Today the ideals of simple moderate living are incompatible with commercialism. Commercialism can be effectively dealt through Consumer responsibility.
Consumer Responsibility
While the law enforcement agencies and other environmental influences contribute to consumer's problems, the consumers themselves are also responsible for their plight. Therefore, consumers can alleviate these by becoming aware of the services and rights available to them. They should use that education to solve their problems as far as possible. The only hope for consumers, therefore, is to educate themselves as much as possible about quality, prices, utility, latest technology and research related to products and services which they use, and try to make informed choices.
