CONSUMERISM

By
Dr. T.K.Avvai Kothai
Associate Professor
PG&Research Department of Commerce
Guru Nanak College,Chennai
 What is CONSUMERISM?
Consumerism is a modern movement
for the protection of the consumer
against useless, inferior, or dangerous
products, misleading advertising,
unfair pricing, etc.
FEATURES OF CONSUMERISM

❖ Protection of rights

❖Prevention of Malpractices

❖Unity among Consumers

❖Enforcing Consumer rights

 POSITIVE EFFECT OF
CONSUMERISM
❑ More industrial production

❑ A higher growth rate economy

❑ More goods and services available

❑ More advertising since goods manufactured have to be sold

❑ Increased production will result in more employment

opportunities

❑ A variety of goods and services to choose from

❑ More comforts for a better living style

 NEGATIVE EFFECT OF
CONSUMERISM
❑ Creates ecological imbalance .i.e. Global warming,
Industrial pollution

❑ More lavish rather than focusing on simplicity

❑ Reducing the natural resources of the respective country

❑ Psychological health and personal relation get affected

❑ Cheaper goods are imported and produced

❑ Over dependence on labour saving devices, i.e.

unemployment

❑ Crime rate also increases

 Reasons behind the rise
• Rising prices
• Adulteration
• Duplication
• Artificial demand
• Product risk
• Warranty and service
 Meaning of Caveat Emptor
• Caveat Emptor in the Latin means ‘let the buyer beware’.
• It is the basic presumption that the buyer buy at his/her
own risk and therefore should examine and test a product
himself/herself for obvious defects and imperfections.

Recently, consumer protection

laws have stated that the seller
is to held a higher standard of
disclosure when the defects
of a product cannot be identified
through casual inspection
 EXEMPTION
FROM CAVEAT
EMPTOR
 EXEMPTION FROM CAVEAT
EMPTOR
❑Sale as per sample
❑ Sale as per description
❑ Sale as per both sample and
description
❑Buyers relies on sellers judgment
❑Sale of Branded products
❑ Sale by fraud or Misrepresentation
❑Mercantile quality
 CASE STUDY
Akshay wants to buy a 4-wheel drive
SUV from his friend. The SUV is 9 years
old, and has about 220,000 KM on it, his
friend, Pritesh, assures him that it runs
well. Akshay takes the vehicle for a short
test drive, then decides to buy the
vehicle, giving Pritesh his full asking
price of Rs 300000. Akshay drives the
SUV for a week then suddenly it started
making a loud noise. When Akshay
questioned Pritesh about the problem.
Pritesh told Akshay that it needed
transmission fluid.
Akshay knew that replacing or rebuilding the
car’s transmission would be very expensive, and
he didn’t want to have that kind of hassle. he
asked Pritesh to return his money, but he
refused. Akshay filed a civil lawsuit against
Pritesh, asking for his entire payment of Rs
300000 back. At trial, the judge asks Akshay if he
test drove the vehicle before he bought it, to
which he answered “yes.” The judge also asked if
Akshay had a mechanic go over the vehicle before
he bought it. He answered, Yes. The judge pointed
out that it was Akshay’s responsibility to have a
mechanic that didn’t have an interest in the
transaction look at the vehicle. Akshay’s
purchase fell under the principle of caveat
emptor, laying the full responsibility of checking
out the car’s condition. The judge ruled in favor
of Pritesh.
UNFAIR TRADE PRACTICE
• An unfair trade practice refers to that malpractice of a
trader that is unethical or fraudulent. These practices cause
an inconvenience or grievance to consumers.

• UTP broadly refers to any fraudulent, deceptive or dishonest

trade practice or business misrepresentation of the products
or services that are being sold; which is prohibited by a
statute or has been recognized as actionable under law by a
judgment of the court
• An unfair trade practice is defined under Section 2(1)(r) of
the Consumer Protection Act, 1986. According to this
definition, it is a trade practice carried out for the promotion
of sale. It is the distribution or utilization of any good or
service by adopting a deceptive method or practice.
UTP to mean a trade practice which, for the
purpose of promoting the sale, use or supply of
any goods or for the provision of any service,
adopts any unfair method or unfair or deceptive
practice, and includes, inter alia, the following:

• Falsely represents about goods or services

relating to its standard, quality, price, value,
nature, etc.

• Gives false or misleading facts disparaging the

goods, services or trade of another person.

• Permitting the publication of any

advertisement for the sale or supply at a
bargain price of goods or services not intended
to be so offered.
• Withholding from the participants of any
scheme offering gifts, prizes or other items
free of charge, on its closure the
information about final results of the
scheme.

• Permitting the hoarding or destruction of

goods and manufacturing spurious goods or
offering such goods for sale or adoption of
deceptive practices in the provision of
services.

• Permitting the offering of gifts, prizes or

other items with the intention of not
providing them as offered
 ABOUT THE CASE
• On June 5, the Food Safety and Standards Authority
of India (FSSAI) ordered Nestle India to withdraw all
nine variants of Maggi instant noodles from the
market terming them “unsafe and hazardous” for
human consumption.

• Maggi ban started with the first phase of inspection in

Uttar Pradesh, from where the food inspector
allocated a batch of 12 Maggi packets to the research
lab in Gorakhpur. After detection of some harmful
chemicals, the batch was then transferred to the
Kolkata where the presence of excess lead and MSG
(monosodium glutamate) was confirmed.
It was confirmed that 17.2 PPI of lead was contained in
the February 2014 manufactured batch of Maggi packets
which was 8 times higher than the permissible limit
range of 0.01-2.50 PPI Where in Delhi, the samples of
Maggi were detected with a lead level of 3.6

• MSG increases the body MSG level by 20% which is

harmful for humans especially children.

• Nestle India has its own argument regarding the MSG

content in Maggi. They claim that the MSG found in
Maggi is not added by them which they clearly mention
in the Maggi packets as “NO ADDED MSG“.

• It is also challenged by Nestle India that out of the

1000 samples inspected of the 12.5 crore Maggi packets,
the found lead content on an average does not exceed the
prescribed level of lead content.
 Data study
Most of the customers consume Maggi
because of its taste, so the company
should maintain the previous and should
also follow strict safety measures by
taking consumers health into
consideration.
So Most of the consumers are against the
ban on Maggi noodles and its other
products, and because of this It will be
easier for the Maggi to re-launce and
retain its brand value in market again.
 CONSUMER
COMMUNICATION
Consumer communication is a two way
matter. In which all information are
collected from consumer and according
to that the company works for consumer.
The increasing
importance of internet
and digital media
,such as social
networks and
mobile communication.
 Process of Consumer
communication
1. The Sender
2. The Receiver
3. The Medium
4. The Message
5. The Target Audience
6. Feedback
 Factors affecting
Communication process
1.Characterrisitics of the
sources
2. Message characteristics
3. Characteristics of the
receiver
4. Characteristics of the
medium
 ETHICS IN ADVERTISING
Meaning of ethics:
Ethics is concerned with what is good
for individual and society and is also
described as moral philosophy. The
term is derived from the Greek word
ethos which can mean custom, habit,
character or disposition.
 ADVERTISEMENT
Advertising is a marketing
communication that employs an
openly sponsored, non-personal
message to promote or sell a product,
service or idea.
 TYPES OF ADVERTISING
• Print advertising

• Broad casting advertising

• Covert advertising

• Outdoor advertising
 ETHICS OF
ADVERTISING
• Decency

• Social responsibility

• Truthful

• Comparisons
 Definition of ‘Social
Responsibility’
Social responsibility is the obligation of
the decision makers to take actions
which protect and improve the welfare
of the society as a whole along with their
own interests. - Howard R. Bowen.
Social responsibility of business has
responsibility to the customer, workers,
shareholders and the community.
 NEED FOR THE SOCIAL
RESPONSIBILITY OF BUSINESS
❑ Impact of its own Operations.

❑ Long life of business

❑ Employee satisfaction

❑ Fair Pricing & Market dynamics

❑ Demand & Supply of goods & services

❑ Taxation & compliances towards Government

❑ Financial Support to Social & Cultural activities

❑ Support to Social causes like Poverty, Education, HealthCare,

Environment etc.
 SOCIAL RESPONSIBILITIES
TOWARDS DIFFERENT GROUPS
• Responsibilities towards

• Owners

• Employees/Workers

• Consumers/Customers

• Community/Society/Public

• Investors/Shareholders

• Government
CONSUMER SATISFACTION
CONSUMER SATISFACTION
PROCESS
HOW TO ENSURE CONSUMER
SATISFACTION
CONSUMER FEEDBACK
 PRESSURE GROUPS
Consumer pressure groups are
organizations, sometimes formal,
sometimes adhoc whose members
usually come together to force or
pressure a company (or government)
to modify its behavior or in some cases
remove a product from the market.
THANK YOU