Professional Documents
Culture Documents
ITMV2
ITMV2
General Principles
Marketing an age old exchange process Shifting of powers from sellers to buyers, thus becomes more complex Need to understand the buyers Plus there is a technological advancement
No time place barrier, can buy anywhere, anytime
World market
Global village
Exercise control
Need to evolve business legislation 4 Ps within the Marketing laws
Introduction
Different countries follow different types of law
Common law Civil law Religious law
In India civil law system is followed which is a legacy from British rule
Enforced at central, state and local level
Local laws enforced through municipal corporation, district authorities
Marketing Process
What is marketing? success of any product depends on marketing Understanding consumer needs and wants Taking the right product, right consumer, right place and right time
AN EXCHANGE PROCESS IT IS A TRANSACTION INVOLVES BUYERS AND SELLERS
Product flow Proposal and acceptance Consideration Capacity of parties for contract Free Consent Documentation An agreement should not be void
Place
Price list prices, discounts, allowances, commissions, payment terms Marketing Mix Elements Promotion public relations, advertising, sales promotions, direct marketing Place channel, geographical, coverage, storage, assortment, inventory, transportation
Case Studies
Business legislation cases Consumer protection
Ghutka and pan masalas First came impurities in bottled mineral water. Then pesticides in soft drinks. Worms in chocolates.
Social cost
Pollution emmission from motor vehicles
Protecting Businesses
Registration of names [rediff, Yahoo India ]
Indian Law
Indian law is the oldest legal systems in the world Source of Indian law is the Indian Constitution which in turn gives due recognition to statutes, case law and customary law consistent with its obligations Legislatures of Parliament, State Legislatures and Union Territories enact the laws Besides this there is a vast body of laws knows as subordinate legislation in the forms of rules, regulations, laws and by laws
MRTP cont d
Restriction on:
Sale of goods to certain persons Purchase & sale at stipulated prices Allowing concession/ benefits by way of discounts Resale prices Quantity, output and area of disposal of goods Resale prices with a result of elimination of competition
Competition Act
This repeals the MRTPC act which has become obsolete in view of development in the Indian and global markets This endeavors the shift of focus from the restricting monopolies to promoting fair competition Objective is to promote fair competition, protect consumers, firms from each other and interest of the society
Highlights cont d
Production
Distribution
Information
Sales
Transaction
Highlights
Essential commodities..
Cattle fodder, coal, components, parts of automobiles Cotton and woolen textile Drugs ass defined in D&C act Food and edible oil Iron and steel Newspapers Petroleum/ products Raw cotton and jute
Ownership of goods to be immediately transferred from seller to buyer Delivery or immediate payment not necessary, can be done at future date
Act covers rights and duties of seller and buyer CEVEAT EMPTOR- LET BUYER BEWARE
High bearing on payment transactions with customer, suppliers and banks by a business firm
Some More..
Bureau of Indian Standard Act, 1986 Standards of Weights & Measures Act, 1976
Sets standards for products, commodities, materials and processes at national and international level Issues certification to products that meet certain quality standards
Provides uniform weights and measures throughout the country Prescribes as per the metric system Safeguards the consumers against unfair practices in packaged goods Penalty is fine/ imprisonment
DPCO
Statutory price control for bulk drugs and formulations Certain drugs known as scheduled drugs are under price control Drugs not under price control can be freely priced but under some restrictions
Design Act, 2000 Features of shape, configuration, pattern Allows registration of product to protect the visual appearance of manufactured products Can gain a marketing edge Others cant use without an agreement Valid for 10 years
Helps consumers from deception Geographical names have acquired distinctiveness and importance Agricultural goods, manufactured goods, food etc.
Drugs & Cosmetics Act, 1940 Controls mfg, store and selling of medicines and cosmetics Restrains mfg. to make false and misleading claims for the drugs and cosmetics
Protect investors from unscrupulous companies making offers in public issues for equity shares and debentures Need to make certain disclosures in their offers, its mandatory
Drugs & Magic Remedies Act, 1954 Provides restriction against advertisement that claims certain diseases
Cable Television Networks Act, 1995 Regulation on cable TV network to curb undesirable program and advertisement
Pre Natal Diagnostic Techniques Act, 1994 Specifies roles and responsibility of Advertisers and prevents misuse of media regarding pre natal determination of services
Cigarettes & other Tobacco products Act, 2003 Bans advertisement, prohibits sponsorship of sports And cultural events.
Rights legally protected interest Interest- things which are to man s advantage Unscrupulous marketers follow unfair trade practices to cheat the consumers Growing Consumerism and host of consumer protection laws to protect the consumers ALERT CONSUMER is the best protected consumer
Consumer Movement
Consumerism is an organised movement of citizens and government to strengthen the rights and power of buyers in relation to the sellers Consumers feel, sellers have more power than buyers Thus to have equal balance of power between buyer and seller, need for consumerism
Consumerism
Healthy environme nt
Consum er Rights
choose
education redress
Be heard
Consumer Responsibilities
solidarity
Critical awareness
Action
Consumer Rights
Can also be classified as Fundamental rights Constitutional rights Investors rights Medical rights Legal rights
Fundamental Rights
Right to equality Right to freedom Right against exploitation Right to freedom of religion Cultural and educational right
Investors Rights
Protect from investment brokers, other middlemen apart from stock issuing companies Internationally, investors bill of rights passed by various monitoring bodies and consumer protection organizations
Investors Rights 3 tier qualifying process Eligibility norms Pre issue obligations of companies Post issue obligations of companies
Legal Rights Provide free and competent legal Services to the weaker sections of the Society Justice not denied to any citizen
CPA..
Complaint filing procedure
Name, description and address of complainant Name, description, address of opposite party Facts related to the complaint Supporting documents if any Relief that the complainant is seeking
Appeals Penalties
Case Studies
Services Medical Negligence
Deceptive promotion
Overemphasizing or overstating the quality, features, standards, applications and performance of product
Deceptive packaging
Misleading information about the product therein and not conforming to statutory requirements Information regarding product usage and safety is not revealed
Certain sales acts and practices are considered deceptive when Claims for sponsorship which it does not have Product/ services claims performance, characteristics, ingredients, accessories which it does not have.. Does not have particular standard, quality, grade.. Product is claimed as new, but is not.. .. A deceptive sales act/ practice with a consumer transaction violates the CPA, whether it occurs before, during or after the transaction.
Circumstances/ situations which are considered in determining unfair practices Producer, mfg, distributor, supplier took advantage of the consumer if he is unable to understand the language of agreement Price grossly exceeds similar product at similar time which are readily obtainable in similar transaction by like consumers Consumer unable to receive a substantial benefit from the transaction If the transaction is excessively one sided in favor
Some Examples
False advertising and other misrepresentations Product physically not available
False statements of guarantees in advertising Deceptive pricing practices -Pretending that product normally sells for higher price -Misrepresenting the price as compared to competition -Placing fake price stickers -Difference in advertised price and actual price -Using the term special price
Counterfeiting
Prevalent in Pharmaceutical and Electronic consumer goods industry Illegal business of drug counterfeiting eats in to the revenues of legitimate business and also jeopardizes the health and wellbeing of patients Reputation of health care providers thus stake Ethical pharma business based on trust
Doctor and pharmacist trust the industry Patient trusts the doctor
Counterfeiting
5-7% of drugs sold around the world are counterfeit Difficult even for medical practitioners to differentiate They appear alike, but misses the active ingredient Any pharmaceutical drug can be counterfeited but the most vulnerable ones are Antibiotics, anti malarial drugs, cough syrups, skin ointments, anti pyretics, analgesics, contraceptives, multivitamins and so on..
Few reasons that can make the industry alert and active High prices of some categories makes it lucrative Co existing black market for high demand drugs Low cost medicines Products that need little dosage and usage information Products that are easy to copy in color, design, size DRUG COUNTERFETING is a global crime Proper education end users and health care providers will help curb it
INDIAN LAWS
CPA Protect consumer Three tier system at district, state and central level Relief is compensatory in nature MRTP To curb unfair trade activities Prevent concentration of economic power Control monopolies Any undertaking producing 1/4th or more of any type of goods and having assets > 1 cr, required to obtain clearance Commission can direct that practice shall be discontinued Any modification Need to publish Hold investigation on receipt of complaint At Delhi,at central level, thus may cause delay CA Cover prohibition of anti competitive agreements Abuse of dominance Regulation of combinations Establishment of CCI Enquiry to be done within one year An agreement is deemed to hinder competitionDirectly/ indirectly determines purchase or sales Limits/ controls production, supply, tech devlp
An enterprise can have its dominant position, which enables it to operate independently Section 4 of the act, prohibits any enterprise from abusing its dominant position Directly/ indirectly imposes unfair conditions, pricing stipulations Limits/ restricts production Denies market access to others
Cases
Non printing of sale price.. Substandard product allegation Misrepresentation in advertisement Supply of product which was never manufactured
Formation of Contract
Sale & Agreement to sell
Formalities of contract
Offered at a price Agreement Acceptance Immediate delivery Immediate payment Or installments Writing/ WOM
Goods- existing/ future goods Description, mfgrer, confirming Subject Matter of specifications Contract If the goods perish/ damage post Agreement without knowledge of Seller, the agreement is void
Rules of Delivery
Delivery & Payment Anything to deliver the goods to buyer Delivery of part of goods Mode of delivery Place of delivery Time/ period of delivery Demand of delivery at a reasonable hour Delivery expenses Delivery in phases or installments Delivery at a place other than agreed Short delivery Excess delivery Delivery mixed with other goods
DUTIES Delivery of goods as per demand Reasonable time and opportunity to examine goods Compensate buyer for wrong supply Accept rejected material Compensate buyer for breach of contract RIGHTS Receive payment for goods delivered Receive compensation for damages due to buyers negligence Sue buyer for wrongfully receiving goods Sue for damages caused because of buyer
DUTIES Pay to seller for the goods accepted Apply for delivery of goods to seller Compensate the seller for breach of contract Return the rejected material
RIGHTS Receive delivery of goods ordered Get time to inspect Terminate contract if there is a breach Sue seller for non performance Sue for breach of warranty
Contract Act
Proposal and acceptance Consideration Capacity of the parties Free consent Undue influence Fraud Misrepresentation Mistake Legal relationship certainity
Cases
Default in Hire-Purchase installment Acceptance of delayed payment Dishonor of cheque
Place
Price list prices, discounts, allowances, commissions, payment terms Marketing Mix Elements Promotion public relations, advertising, sales promotions, direct marketing Place channel, geographical, coverage, storage, assortment, inventory, transportation
Product
Legal Issues in Product Development & IPR Protection Product Development IPR- An Intellectual Capital Global vs. Indian IPR Landscape IPR Indian Legal Framework Cases
In today's huge competition, need to develop strategies to faster product development And protect their IPR
With IPR either make money with manufacturing, licensing Globalization has necessitated legal strategy to develop newer products and to capture, preserve and protect IPR
Product Development
Intell Sony
Mega competition
Product lifecycle is deliberately compressed Old products are killed and replaced with new and innovative products Monies spent on R&D, New products to comply with acceptable quality & design standards stipulated By law
Product Development
Product needs to be compatible with environmental standards, should be harmless for human usage and consumption
Mfg process to avoid pollution of environment Pkg not adding to waste generation Does product & pkg have recycling potential Harmless for human use Approved by appropriate agency and certified for usage
Government & consumer groups are watchdogs on launch of new products Host of legislation for arresting introduction of harmful products
Banning use of CFC Ghutka
Marketers have added one more step in product devlp process- compatibility of mfg, process, pkg ..to the existing regulations in the country
To look in to the setting of standards for products, commodities, materials and process at national and international levels, Bureau of Indian Standards [BSI] came into force
Body corporate and comprises of members representing industries, consumer organisations, scientific & research institutes, professional bodies, technical institutions, central ministries, state govt., MPs Facilitates harmonious development of standards Product certifications Quality system certification Environmental management system certification
Certification mark scheme operates under ISI [Indian Standards Institution Act, 1986]
Enables to grant license Product or services conforms to the specified requirements
For obtaining certification Product has to undergo testing & inspection Penalties have also been enhanced recently Regular & surprise inspection carried out to ensure quality standards are maintained
Intellectual Capital includesPATENTS COPYRIGHTS DESIGN TRADEMARKS BUSINESS SECRETS PRODUCT IDEAS BUSINESS PROCESSES Intellectual capital is an intangible wealth that helps the organization, access to markets, preserve exclusive markets, maintain profits
Hence need to preserve these rights through legal framework, as to protect it from infringement or any misuse by competitors IPR connotes value attached to intellectual contribution for patent, trademark or some innovative work
IPR Framework
IPR
Copyrights
Geographical Indications
Industrial Property
Trademarks
Patents
Designs
It s a highly specialized area of law designed to encourage creativity and fair competition Patent Can be obtained for a new or improved machine, article of mfg, chemical composition, process, software or business method, e-commerce business model, enabling technology for internet Patent prevents anyone else to take it up unless you are paid for the privilege Grants you right to decide the fate of your invention at the market place
Words, symbols, numbers, slogans, designs, features of pkg, color combi, animations, sounds Identify source of goods Helps to create branding strategies that establish consumer loyalty
Trademark
Copyright
Establishes ownership of original words Books, poetry, play, short stories
Example..
New wristwatch invented Patent can protect the invention Shape of wristwatch can be protected by design registration Name under which it is sold is a trademark and can be registered Style/ words that are inscribed on the wristwatch or literature, which explains working of the watch will be protected by copyright
TRADEMARK LAW
COPYRIGHT LAW
DESIGN LAW
Copyrights Act
Trademark Act
Patent Act
Design Act
PRODUCT PRICING
Pricing- A key element of Marketing Mix Pricing Decisions- Legal aspects Indian Laws for pricing regulations Cases
Market driven economy, market forces decide price tag on the product Price tag never reflects the true value of the product to the consumer Consumers always fall prey to unjustified gains on product pricing fronts
Pricing- a key element in marketing mix Without pricing there is practically no marketing Product and services are purchased as per the price tag Facilitates exchange process to take place with ease and convenience In free market economy, competitive prices are influencers and not the marketers Price fixing is unfair trade practice and restricts competition
In free market economy, there is not govt. control on fixing the prices, if a consumer feels the prices are deceptive, marketer can be pulled in court
CPA, 1996
DPCO, 1995
CA, 2002