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Consumerism
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What is Consumerism ?
Consumerism is an organized movement of citizens and government
to strengthen the rights and power of buyers in relation to sellers.
Consumerism refers to the wide range of activities of governmentbusiness and independent organizations designed to protect rights of
the consumers.
Consumerism is a collective consciousness on the part of consumers,
business, government and civil society to enhance consumer
satisfaction and social welfare which will in turn benefit all of them
and finally make the society a better place to live in.
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The consumer is exposed to many hazardous - physical,environmental and exploitation due to unfair trade practices.
The consumer needs protection against products which are unsafe
for consumption such as drugs and adulterated food products andproducts which may cause injury such as defective electricalappliances.
Consumer needs protection against mal-practices and deceit by
sellers.
Consumer should have adequate rights and right of recourse toredressal measures against defaulting businessmen.
Why Consumerism ?
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To prevent consumer from exploitation, our
government have passed many Acts from time to
time.
Some of them are as follows:-1. Drug and Cosmetics Act, 1940
2. Prevention of Food Adulteration Act, 1954
3. Essential Commodity (supply) Act, 1955
4. Monopolies and Restrictive Trade Practices Act,1969
5. Standard of Weights and Measures Act, 1976
6. Consumer Protection Act, 1986
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Why Is It Needed ?Why Is It Needed ?
DemandDemand--supply imbalance (demand > supply / demand supply / demand perfectLack of workable competition (monopoly > perfect
competition)competition)
Unfamiliarity with innovationsUnfamiliarity with innovations(poverty, lack of social awareness, accepting life as it is(poverty, lack of social awareness, accepting life as it is
and passive outlook)and passive outlook)
Unconsciousness about rightsUnconsciousness about rights
(illiterate uneducated ignorant and ill(illiterate uneducated ignorant and ill--informed)informed)
Feign advertisements (a need for consumer guidance)
Time consuming legal processTime consuming legal process
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How Has It Come About ?How Has It Come About ?
Before Liberalization :Before Liberalization :--
No Disposable IncomeNo Disposable Income
No Rights & Redressal ForumsNo Rights & Redressal Forums
After Liberalization :After Liberalization :--
Informed ConsumerInformed Consumer
Proactive Steps By Industry & GovernmentProactive Steps By Industry & Government
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What It Creates ?What It Creates ?
Demand driven economyDemand driven economy
Status of king for the ConsumerStatus of king for the Consumer
A more responsive governmentA more responsive government
Minimize imperfections on distribution frontMinimize imperfections on distribution front
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Marketing Aspects of Consumerism
Most consumer problems develop because :
The marketplace is still young and dynamic.
Complaints arise not from poor products, but from how the
products are sold.
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Marketing Aspects of Consumerism
To keep consumer problems to a minimum , three key itemshave to be handled well
1) Product Evaluations
No supplier or manufacturer consciously attempts tomarket a product that doesnt perform well.
But that doesnt mean that the products you sell are the best
for the market you want to reach and penetrate.
Hence evaluate products that are offered to you, in terms
of consumer reaction and perceived usage.
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Marketing Aspects of Consumerism
2) Instructions
Unfortunately, the weakest part on the market today is
documentation.
A company will spend millions of dollars to develop the
product and only a few hundred telling the consumer how to
use it.
Even if your suppliers provide the worst documentation in the
world, they wont be the first one condemned if the products
cant be used as intended you will.XYZ Company may have produced the product, but as far as
the customer is concerned, it was your product that they
bought
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Marketing Aspects of Consumerism
3)C
omplaintsCustomer problems are going to crop up, especially with
something as complex as computer systems and someone
who is a brand new user.
Assign one of your best people to the task of handling
complaints, and give him the power and latitude to solve
them quickly.
Many consumer complaints are not based on grievances
regarding the products or services.
Instead, they develop from gross ignorance or misinformation
on the part of the user.
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HOW CONSUMERISM AFFECTSSOCIETY,
ECONOMY ANDENVIRONMENT?
Consumerism replaces the normal common-sense desire for
an adequate supply of lifes necessities, community life, a
stable family and healthy relationships with an artificial
ongoing and insatiable quest for things and the money to buy
them with little regard for the true utility of what is bought
An intended consequence of this, promoted by those who
profit from consumerism, is to accelerate the discarding of the
old, either because oflack of durability or a change infashion.
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HOW CONSUMERISM AFFECTSSOCIETY, ECONOMY
ANDENVIRONMENT?
It is an often stated that the economy would improve if
people just bought more things, bought more cars and spent
more money.
Financial resources better spent on Social Capitalsuch as
education, nutrition, housing etc. are spent on products of
dubious value and little social return.
In addition, the purchaser is robbed by the high price of new
things, the cost of the credit to buy them, and the less
obvious expenses such as, in the case of automobiles,
increased registration, insurance, repair and maintenance
costs.
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HOW CONSUMERISM AFFECTSSOCIETY, ECONOMY
ANDENVIRONMENT?
Many consumers run out of room in their homes to store the
things that they buy.
A rapidly growing industry in America is that of self-storage.
Thousands of acres of land good farm land are paved over
every year to build these cities of orphaned and unwanted
things so as to give people more room to house the newthings that they are persuaded to buy.
If these stored products were so essential in the first place,
why do they need to be warehoused?
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ADVERTISINGADVERTISING
&&CONSUMERISMCONSUMERISM
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Benefits OfAdvertisingBenefits OfAdvertising
InformInform
GuideGuide
Contribute to efficiencyContribute to efficiency
Stimulate economic progressStimulate economic progress
Expand business & tradeExpand business & trade
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Advertising CodeAdvertising Code
Make honest claims & do not mislead the consumer.Make honest claims & do not mislead the consumer.
Do not offend the generally accepted standards of publicDo not offend the generally accepted standards of public
decency.decency.
Safeguard against the excessive promotion of products whichSafeguard against the excessive promotion of products which
are regarded as hazardous to society or individuals.are regarded as hazardous to society or individuals.
Observe fairness in competition between different brands ofObserve fairness in competition between different brands of
the same product.the same product.
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Consumer Groups
Advocacy groups that seek to protect people from corporateAdvocacy groups that seek to protect people from corporate
abuse.abuse.
Example:Example:-- unsafe products, predatory lending, falseunsafe products, predatory lending, falseadvertising.advertising.
They operate via protests, campaigning or lobbying.They operate via protests, campaigning or lobbying.
BodiesBodies-- Consumer Forum, CAG, VOICE, AIBDA, CICOConsumer Forum, CAG, VOICE, AIBDA, CICO
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LabellingLabelling
As perAs perUpdated Package Commodity Rule (Jan 1, 2007)Updated Package Commodity Rule (Jan 1, 2007)
Name & address of the manufacturerName & address of the manufacturer
Common & generic names of commodity in packageCommon & generic names of commodity in package Name & no. of quantity of each productName & no. of quantity of each product
Net qty. in terms of std. unit of weight of measureNet qty. in terms of std. unit of weight of measure
Month & year of manufacturing / packingMonth & year of manufacturing / packing
Size / dimensions of commodity (where relevant)Size / dimensions of commodity (where relevant)
MRPMRP
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Methods of Consumer Protection
There are four main methods of protecting the interests ofconsumers: -
1. Business Self-regulation:
Businessmen can regulate their own behavior and actions by
adopting higher ethical standards.
Trade associations and chambers of commerce can check unfair
trade practices used by some businessmen.
2. Consumer Self-help:
Every consumer must be alert as self-help is the best help.
He should educate himself and know his rights and should not
allow unscrupulous businessmen to cheat him.
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3. Consumers' Associations:
Consumers should form voluntary associations. These associations can educate and awaken consumers.
They can take organized action and put pressure on businessmento adopt fair trade practices.
4. Government Regulations:
The State can ensure consumer protection through legislative,executive and judicial actions.
The laws enacted by the Government must be strictly enforced
by the executive. Government ofIndia has enacted several laws to protect the
interests and rights of consumers.
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CONSUMERPROTECTIONCONSUMERPROTECTION
ACT,1986ACT,1986
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INTRODUCTIONINTRODUCTION
This ACT is a milestone in the history of socioThis ACT is a milestone in the history of socio--economiceconomic
legislation in the country.legislation in the country.
The first ever legislation in India of its kind which solelyThe first ever legislation in India of its kind which solely
aimed at the grief striken consumers who were the victims ofaimed at the grief striken consumers who were the victims of
the unfair trade practices and sub standard services rendered tothe unfair trade practices and sub standard services rendered to
them.them.
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OBJECTIVESOBJECTIVES
The main objective of the act is to provide for the betterThe main objective of the act is to provide for the better
protection of consumers.protection of consumers.
The act is intended toThe act is intended to provide simple, speedy andprovide simple, speedy andinexpensive redressal to the consumers' grievancesinexpensive redressal to the consumers' grievances, and, and
relief of a specific nature andrelief of a specific nature and award ofcompensationaward ofcompensation
wherever appropriate to the consumer.wherever appropriate to the consumer.
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EXTENTAND COVERGAE OFTHEEXTENTAND COVERGAE OFTHE
ACTACT
TheThe salient features of theActsalient features of theAct are summed up as under :are summed up as under :--
The Act applies to all goods and services unless specificallyThe Act applies to all goods and services unless specifically
exempted by the Central Government.exempted by the Central Government.
It covers all the sectors whether private, public or cooperative.It covers all the sectors whether private, public or cooperative.
The provisions of the Act are compensatory in nature.
T
he provisions of the Act are compensatory in nature.
The setting up of the dispute redressal machinery was only toThe setting up of the dispute redressal machinery was only to
secure and enable speedy justice to the aggrieved consumers.secure and enable speedy justice to the aggrieved consumers.
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As Under section-6 of Consumer ProtectionAct,
consumer has the following rights:
It enshrines the following rights ofconsumers:It enshrines the following rights ofconsumers:--
Right to safetyRight to safety ::-- Right to be protected against the marketing of goodsRight to be protected against the marketing of goodsand services which are hazardous to health, life and property of theand services which are hazardous to health, life and property of the
consumer.consumer.
Right to be informedRight to be informed ::-- Right to be provided all those information onRight to be provided all those information onthe basis of which consumer decides to buy goods or services about thethe basis of which consumer decides to buy goods or services about thequality, quantity, potency, purity, standard and price of goods orquality, quantity, potency, purity, standard and price of goods orservices so as to protect the consumer against unfair trade practices.services so as to protect the consumer against unfair trade practices.
Right to be heardRight to be heard ::-- Consumer has the right that his complaint beConsumer has the right that his complaint beheard. Under this Right the consumer can file complaint against allheard. Under this Right the consumer can file complaint against allthose things which prejudicial to his interest.those things which prejudicial to his interest.
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Right to chooseRight to choose ::-- Consumer has the full right to buy good orConsumer has the full right to buy good or
services of his choice from among the different goods or servicesservices of his choice from among the different goods or services
available in the market.available in the market.
Right to Seek redressRight to Seek redress ::-- Right to seek redressal against unfair tradeRight to seek redressal against unfair trade
practices & unscrupulous exploitation of consumers.This Actpractices & unscrupulous exploitation of consumers.This Act
provides compensation to consumer against unfair trade practice ofprovides compensation to consumer against unfair trade practice of
the seller.the seller.
Right to consumer educationRight to consumer education ::-- Consumer education refers toConsumer education refers to
educate the consumer constantly with regards to their rights. In othereducate the consumer constantly with regards to their rights. In other
words, consumers must be aware of the rights they enjoy against thewords, consumers must be aware of the rights they enjoy against the
loss they suffer on account of goods and services purchased by them.loss they suffer on account of goods and services purchased by them.
The Act envisages establishment of Consumer Protection Councils atThe Act envisages establishment of Consumer Protection Councils at
the Central and State levels, whose main objects will be to promotethe Central and State levels, whose main objects will be to promote
and protect the rights of the consumers.and protect the rights of the consumers.
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Consumers Responsibilities
1. Consumer should exercise his right
2. Cautious consumer/ Do not buy blindly
3. Filing complaint for the redressal of genuine grievances
4. Consumer must be quality conscious/Do not compromise on quality
5. Advertisements often exaggerate/Beware of false advertisement
6. Do not forget to get Receipt and Guarantee/warrantee card
7. Do not buy in hurry
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ReliefAvailable To Consumers
Depending on the facts and circumstances, the Redressal
Forums may give order for one or more of the following relief :-
Removal of defects from the goods
Replacement of the goods
Refund of the price paid
Award of compensation for the loss or injury suffered
Removal of defects or deficiencies in the services
Discontinuance of unfair trade practices or restrictive trade
practices
Withdrawal of the hazardous goods from being offered to sale
Award for adequate costs to parties
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STRUCTURESTRUCTURE
To provide simple, speedy and inexpensive redressal of consumerTo provide simple, speedy and inexpensive redressal of consumergrievances, the Act envisages a threegrievances, the Act envisages a three-- tier quasitier quasi--judicial machineryjudicial machineryat the National, State and District levels.at the National, State and District levels.
National Consumer Disputes Redressal CommissionNational Consumer Disputes Redressal Commission -- known asknown as"National Commission"."National Commission".
ConsumerDisputes Redressal CommissionsConsumerDisputes Redressal Commissions -- known as "Stateknown as "StateCommission".Commission".
ConsumerDisputes Redressal ForumsConsumerDisputes Redressal Forums -- known as "Districtknown as "DistrictForum".Forum".
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District ForumsDistrict Forums have the Jurisdiction to entertain complaints:have the Jurisdiction to entertain complaints:
If the cost of goods or services and compensation asked for isIf the cost of goods or services and compensation asked for is up toup to
Rs. 20 lacsRs. 20 lacs..
State CommissionState Commission has the Jurisdiction to entertain complaints:has the Jurisdiction to entertain complaints:
It can hear cases involving sum exceedsIt can hear cases involving sum exceeds Rs.20Lacs and up to Rs.1Rs.20Lacs and up to Rs.1CroreCrore.. The State Commission also has the jurisdiction to entertainThe State Commission also has the jurisdiction to entertainappeal against the orders of any District Forum within the State.appeal against the orders of any District Forum within the State.
National CommissionNational Commission has jurisdiction to entertain complaints:has jurisdiction to entertain complaints:
It has a Jurisdiction to hear complaints amountingIt has a Jurisdiction to hear complaints amounting more than Rs.1more than Rs.1 CroreCrore..The National Commission besides entertaining the original complaintsThe National Commission besides entertaining the original complaintsalso has jurisdiction to entertain appeals against the orders of any Statealso has jurisdiction to entertain appeals against the orders of any StateCommission.Commission.
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Procedure onAdmission of ComplaintProcedure onAdmission of Complaint
The Period of Limitation prescribed for the filing ofThe Period of Limitation prescribed for the filing ofcomplaints before District Forum, the State Commission, orcomplaints before District Forum, the State Commission, orthe National Commission isthe National Commission is two years from the datetwo years from the date ononwhich the cause of action has arisen.which the cause of action has arisen.
On admission of a complaint, a copy of the complaint is to beOn admission of a complaint, a copy of the complaint is to bereferred to the opposite party within 21 days, directing him toreferred to the opposite party within 21 days, directing him togive his version of the case within 30 days. This period may begive his version of the case within 30 days. This period may beextended by another15 days.extended by another15 days.
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Brand Proliferation
when one company introduce new brands in
the same product lines and hence try to cover
each and every market segment for that
product line.
example: HLL has different brands in shampoo
product line offering a wide range of choicefor customer of every segment.
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Brand Rejuvenation
When marketers identifies that the declinestage for a brand has come and the concerned
brand is going to die
Marketer injects new life in brand by adding
new product features, packaging or by
changing STP strategies. This activity in whole
is called Brand Rejuvenation.
example: To Brand Rejuvente Hero Honda
Splendor company launched Hero Honda
Splendor NXG
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Hero Honda SplendorH
eroH
onda Splendor NXG
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Brand Cannibalization
When two brand in the same product line,
offered by same player target same market
segment and compete with each other by
eating away the market share without adding
any value to the marketer.
Example: Hero Honda Glamour and HeroHonda Splendor
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Hero Honda Glamour Hero Honda Splendour
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39
What is Cannibalization?
Cannibalization is a marketing concept that
acknowledges the fact that new product
growth is often gained at the expense of
existing products
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In marketing strategy, cannibalization refers to
a reduction in sales volume,
a reduction in sales revenue, e reduction in market share of one product
as a result of the introduction of a new
product by the same producer
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Cannibalization can be effective, by ultimately
growing the market, or better meeting consumer
demands. Cannibalization is a key consideration in
product portfolio analysis.
For example, when Coca Cola introduced Diet Coke, a
similar product, this took sales away from the
original Coke, but ultimately led to an expanded
market for diet soft drinks.
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Another example of cannibalization occurs
when a retailer discounts a particular
product. The tendency of consumers is to buy
the discounted product rather than competing
products with higher prices.When the
promotion event is over and prices return to
normal, however, the effect will tend todisappear. This temporary change in consumer
behavior can be described as cannibalization
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Another common case of cannibalization is
when companies, particularly retail
companies, open sites too close to each other,
in effect, competing for the same customers.
The potential for cannibalization is often
discussed when considering companies with
many outlets in an area, such as Starbucks orMcDonald's.
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Cannibalization is an important issue in
marketing strategy when an organization aims
to carry out brand extension.
Normally, when a brand extension is carried
out from one sub-category (e.g. Marlboro) to
another sub-category (e.g. Marlboro Light),
there is an eventuality of a part of theformer's sales being taken away by the latter
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However, if the strategic intent of such an extension is to
capture a larger market of a different market segment
notwithstanding the potential loss of sales in an existing
segment, the move to launch the new product can be termed
as "cannibalization strategy".
In India, where the passenger-car segment is going
dramatically since the turn of this century, Maruti-Suzuki's
launch of Suzuki Alto in the same sub-category as Maruti 800,which was the leader of the small-car segment to counter the
competition from Hyundai is seen to be a classic case of
cannibalization strategy.
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Life cycle of products
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Stages in the Product Life Cycle
The Product Life Cycle method identifies the distinctstages affecting sales of a product from the product's
inception until its retirement
Introduction stage.
The product is introduced in the market through a
focused and intense marketing effort designed to
establish a clear identity and promote maximum
awareness.
Many trial or impulse purchases will occur at this
stage.
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Growth stage.
Can be recognized by increasing sales and the
emergence of competitors.
At the vendor's side, the Growth stage is also
characterized by sustained marketing
activities.
Some customers make repeat purchases
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Maturity stage.
This phase can be recognized when
competitors beginning to leave the market.
Also, sales velocity is dramatically reduced,
and sales volume reaches a steady level.
At this point in time, typically loyal customers
purchase the product.
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Decline stage.
The lingering effects of competition,unfavourable economic conditions, new
trends, etc, often explain the decline in sales.
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The modern Product Life Cycle is becoming
shorter and shorter.
Many products in mature industries are
revitalized by product differentiation and
market segmentation.
Organizations increasingly reassess product
life cycle costs and revenues, because the time
available to sell a product and recover the
investment shrinks.
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Although the product life cycle shrinks, the operating
life of many products is lengthening.
For example, the operating life of some durable
goods, such as automobiles and appliances, has
increased substantially.
As a result, the companies that produce these
products must take their market life and service life
into account when they are planning.
Increasingly, companies are attempting to optimizerevenue and profits over the entire life cycle. They do
this through the consideration of product warranties,
spare parts, and the ability to upgrade existing
products