What is consumerism?

What are consumer rights? What is the role of Government,Business,Consumers?

Consumerism
Kotler has defined Consumerism as a social

movement seeking to augment the rights and powers of the buyers in relation to others.
Consumerism as a collective endeavor of the

consumers to protect their interests, is a manifestation of the failure of the business, including that of the public sector, and the government to guarantee and ensure the legitimate rights of the business.

 In todays date, business is confronted with growth of

consumerism and legislative measures to protect consumers. Consumer movement is growing in India. There is growing consumer awareness about products failing to satisfy quality requirements. Exploitation of consumers by unfair trade practices, poor quality and spurious products and overpricing is very widespread. Misleading false or deceptive advertisements is common. At times the advertisement gives only half the information so as to give a different impression than is the actual fact.

 There are organisations such as Consumer Guidance

Society of India, Mumbai and Consumer Education and Research Centre, Ahmedabad. These organisations are active in conducting product testing and exposing substandard quality and adulteration. Outcome of consciousness regarding consumer rights has led to ISI certification of food colors now being mandatory. Consumer organisations also play an important role in addressing consumer greivances.

UN Guidelines for Consumer Protection

Objective: 1. 2. 3. 4. 5. 6. 7.

To assist countries in achieving or maintaining adequate protection for their population as consumers. Facilitate production and distribution patterns responsive to the needs and desires of consumers. Encourage high levels of ethical conduct for those engaged in the production and distribution of goods and services. Assist countries in curbing abusive business practices by all enterprises which adversely affect consumers. Facilitate development of independent consumer groups. To further international cooperation in the field of consumer protection Encourage the development of market conditions which provide consumers with greater choice at lower levels.

U.N. Guidelines on Consumer Protection (UNGCP)

Provide a framework for governments to develop and

strengthen consumer protection policies and legislation Minimum guarantee by governments that the measures will be undertaken

Obligations imposed on governments by the UNGCP

1. Physical Safety Assure that products are safe and conform to safety standards Consumers receive information on proper use of goods and risks involved Measures are in place for notification and recall of unsafe goods

 2. Consumers economic interests

Consumers obtain optimum benefit from their

economic resources

Ensuring that goods meet production and performance standards Adequate distribution channels and after sales services Fair business practices are employed Protection against contractual abuses Information is adequate for consumers to make informed decisions and exercise choice

 3. Standards for safety and quality of goods and

services
Ensure there are national standards for safety and

quality of goods and services Such standards conform to international standards Facilities to test and certify goods and services are encouraged

 4. Distribution facilities for essential goods and

services
Especially to consumers who are disadvantaged, e.g., in

rural areas

 5. Redress Establish and publicize mechanisms that are fair, affordable and accessible

Especially taking into consideration the needs of low-income consumers

 6. Education and information programs Should involve consumer and business groups Particular attention to disadvantaged consumers in urban and rural areas Should be included in school curriculum Training programs for educators, mass media professionals and consumer advocates

 7. Promotion of sustainable consumption Should be done in conjunction with civil society organizations and business groups Sustainable consumption practices within government, by business enterprises and by consumers

 8. Measures relating to food, water and

pharmaceuticals
Prioritizes these areas Should ensure quality control, adequate distribution

and standardized information

 Food production Sustainable agricultural polices and practices Conservation of biodiversity Traditional knowledge

 Drinking water National policies should be developed to improve supply, distribution and quality of water for drinking and other purposes

 Pharmaceuticals Develop national policies to ensure appropriate use, procurement, distribution, production, licensing arrangements, registration systems and information to consumers

Consumer Rights
Some of the rights of consumers are: Right against exploitation by unfair trade practices. Right to protection of health and safety from goods and services that are available to the consumer. Right to be informed about the quality and performance standards, ingredients of the products, possible adverse effects etc. Right to be heard if there is any grievance or suggestion. Right to get genuine grievances redressed. Right to a physical environment that will protect and enhance the quality of life.

Responsibility of Consumers
Consumer should not make vague or general

complaints and should also have supporting information and proof such as a bill. Consumer should try to understand the viewpoint of the seller. Consumers in asserting their rights should not inconvenience or hurt other sections of the public ie resort to rasta roko movements, bandh etc. Consumers should complain against a system and not attack individuals.

Consumer Protection
For consumer protection all stakeholders especially

Business, Government and consumers are equally responsible. Business, comprising producers and all elements of distribution channels have to pay due regard to consumer rights.
Producer should not charge exorbitant prices in a sellers

market. Hoarding and blackmarketing is illegal.

Consumer Protection
Government should come to the rescue of the consumer

to avoid him from being misled, duped, cheated and exploited. Role of Government in consumer protection is vital and is through policy making, legislation and development of institutional capacity for its enforcement. Government to establish distribution facilities for essential consumer goods and services. Encourage establishment of consumer cooperatives and related trading activities. Establish legal measures to enable consumers to obtain redress through formal or informal procedures.

Utility of Consumerism
Producers and sellers will not take the consumer for

granted. Consumerism will provide feedback for businesses and enable producers to understand consumer grievances, needs and wants. Consumerism will make the Government more responsive to consumer interests, prompt it to take necessary measures to protect the rights of consumers. Help consumer and producer to get together and cooperate to get rid of unscrupulous traders.

Consumerism
Consumerism has the following roles to play: Consumer Education: Consumer is given information about various consumer goods and services in relation to prices, standard trade practices etc. Product Rating: Agencies such as Consumer Education and Research Society (CERS), Ahmedabad; carry out tests and report the result of such tests. Liaison with Government and with Producers

Plight of Indian Consumer

Some of the problems faced by Indian consumers are: Short supply of items of essential needs. Lack of effective or workable competition. Unfamiliarity of product features results in sale of substandard, inferior or even defective goods Due to low literacy levels and unsatisfactory information flows, Indian consumers are not conscious of their rights. Consumerism in India is not organised and developed. Laws to safeguard interests of consumers are not effectively implemented.

Government Measures
In India, the Government has taken a number of measures to protect consumer interests: Statutory Regulation:
Government of India is empowered to regulate the terms

and condition of sale, nature of trade and commerce etc. Important legislation in this respect include the Competition Act, Essential Commodities Act, Prevention of Food Adulteration Act, Prevention of Black marketing and Maintenance of Supplies of Essential Commodities Act, Consumer Protection Act etc. Growth of Public Sector was designed to enhance consumer welfare by increasing production and making available goods and services at fair prices, curbing private monopolies and reducing market imperfections.

Consumer Protection Act, 1986

The Consumer Protection Act 1986 is a social welfare legislation

which was enacted as a result of widespread consumer protection movement. The main object of the legislature in the enactment of this act is to provide for the better protection of the interests of the consumer and to make provisions for establishment of consumer councils and other authorities for settlement of consumer disputes and matter therewith connected. In order to promote and protect the rights and interests of consumers, quasi judicial machinery is sought to be set up at district, state and central levels. The main object of these bodies is to provide speedy and simple redressal to consumer disputes. It is one of the benevolent pieces of legislation intended to protect the consumers at large from exploitation.

Consumer Protection Councils

The Act provides for the establishment of a Central Consumer

Protection Council by the Central Government and a State Consumer Protection Council in each State by the respective State Governments. Central Council shall consist of the Minister in charge of consumer affairs in the Central Government who shall be its Chairman . Objective of Council:

Right to be protected against marketing of goods and services which

are hazardous to life and property. Right to be informed about the quality, quantity , purity, standard and price of goods and services so as to protect the consumer against unfair trade practices. Right to be assured access to a variety of goods at competitive prices. Right to be heard and assured that consumers interests will receive due consideration at appropriate forums. Right to seek redressal against unfair trade practices Right to consumer education.

Consumer Disputes Redressal Agencies

A District forum in each and every District of the

State. A State Commission in each State. A National Commission : Established by the Central Government in Aug 1988. A complaint where the value of the goods and services and compensation is less than Rs 5 lakh is to be dealt with the District Forum; between 5-20 lakhs by the State Commission and with more than twenty lakhs falls within the jurisdiction of the National Comission.

Right to Information Act 2005

An Act to provide for setting out the practical

regime of right to information for citizens to secure access to information under the control of public authorities, in order to promote transparency and accountability in the working of every public authority

Ethical Responsibilities of Business towards Consumers

The responsibility of business corporations towards their

consumers are to provide the products at right quality, quantity, time, place and the right price. Consumer is the foundation of any business activity. Various unfair practices like hoarding, adulteration, shoddy merchandise, unfair measurements, misleading advertising etc. should not be allowed. Businesses should:
Produce goods according to the needs of the consumers, their

purchasing power etc. Offer quality goods at a reasonable price. Aim to improve the standard of living by producing goods and services of high quality. Treat customers fairly in all aspects of business transactions

Ethical Responsibilities of Business towards Consumers

Ensure that after sales services is available. Ensure the health and safety of customers Inform and educate customers on the arrival and use of

products. Be truthful in the matter of advertising and warranty. Offer improved and new products through technical and marketing research. Avoid monopolistic and restrictive trade practices. Ensure that product promotion and advertising are not misleading. Trust forms the basis of successful marketplace transactions and is the most important ethical issue.

Ethical issues relating to Product

Quality Safety: Business should give safety the priority warranted by the

product. Safety of a product can be ensured by monitoring the manufacturing process and periodic reviewing of the working conditions and competence of personnel Packaging and Branding Issues: It is the ethical responsibility of the manufacturer to provide clear, accurate and adequate information regarding the labeling and packaging of products. There should not be any misleading information regarding the quantity and quality of products. Product Warranties: Warranties are obligations to purchasers that sellers assume. Express warranties are the claims that sellers explicitly state for eg: a product is waterproof etc. Implied warranties include the claim, implicit in any sale, that a product is fit for its ordinary, intended use.

Ethical issues Relating to Promotion

Companies make use of advertising and promotional

strategies to lure more customers. Advertising is considered unethical when: It degrades the rivals product or substitute product. The company provides misguiding and false information. It conceals information that vitally affects human life (eg: side effects of drugs etc). It is obscene or immoral.

Cases under MRTP/Competition Act

Hindustan coco-cola and Inox Leisure Ltd
Colgate palmolive Raavan Atul Kapoor Vs. Apollo Land & Housing Co Ltd (2009)

MRTP Commission.