CONSUMER BEHAVIOUR

SUBJECT CODE: 18MBAMM301

UNIT- 1

CONSUMER BEHAVIOUR: Meaning

Consumer behaviour is the study of individuals, groups, or organizations and all the
activities associated with the purchase, use and disposal of goods and services, including the
consumer's emotional, mental and behavioural responses that precede or follow these
activities. Consumer behaviour emerged in the 1940s and 50s as a distinct sub-discipline in
the marketing area
Consumer behaviour is an inter-disciplinary social science that blends elements
from psychology, sociology, social anthropology, ethnography, marketing and economics,
especially behavioural economics. It examines how emotions, attitudes and preferences affect
buying behaviour. Characteristics of individual consumers such
as demographics, personality lifestyles and behavioural variables such as usage rates, usage
occasion, loyalty, brand advocacy, willingness to provide referrals, in an attempt to
understand people's wants and consumption are all investigated in formal studies of consumer
behaviour.

DEFINITION

According to American Marketing Association, consumer behaviour can be defined as "the

dynamic interaction of affect and cognition, behaviour, and environmental events by
which human beings conduct the exchange aspects of their lives."

According to Hawkins, Best, and Coney, Consumer behaviour can be defined as "the study of
individuals, groups or organisations and the processes they use to select, secure, use and
dispose of products, services, experiences or ideas to satisfy needs and the impacts that these
processes have on the consumer and society."

According to Satish K. Batra and S. H. H. Kazmi, Consumer behaviour is "the mental and
emotional processes and the observable behaviour of consumers during
searchingpurchasing and post consumption of a product and service

According to Engel, Blackwell, and Mansard, ‘consumer behaviour is the actions and
decision processes of people who purchase goods and services for personal consumption’.

According to Louden and Bitta, ‘consumer behaviour is the decision process and physical
activity, which individuals engage in when evaluating, acquiring, using or disposing of goods
and services’.
DIFFERENCE BETWEEN CONSUMER & CUSTOMER

CONSUMER

 Consumers are people or organizations that purchase products or services. The term
also refers to hiring goods and services. They are humans or other economic entities
that use a good or service. Furthermore, they do not sell on that item that they bought.
 They are the end users in the distribution chain of goods and services. In fact,
sometimes the consumer might not be the buyer.
 For example, young children are the end users of toys, but their parents buy them.
Therefore, in the market for toys, the buyer and consumer are often different people.
 The consumer is the one who consumes the goods, i.e. the user of the goods. It is
commonly misconstrued with the term customer, which refers to a person who buys
the goods or commodity and pays the price for it.
 Consumer goods are goods that we buy for our own consumption. We do not buy
them to make other goods that we sell.
 According to Dictionary.com, a consumer is: “1. A person or thing that consumes. 2.
(Economics) a person or organization that uses a commodity or service. 3. (Ecology)
an organism, usually an animal, that feeds on plants or other animals.”

CUSTOMER

 By Customer, we mean a person who buys the goods or services and pays the price
thereof. The word customer is derived from the term ‘custom’ which means
‘practice’, so the word customer means the individual or entity who purchases product
or services from a seller at regular intervals. It can also be known as client or buyer.
They are divided into two categories:
 Trade Customers: The customers who purchase goods in order to add value and
resell them. These include Manufacturers, Wholesalers, Distributors, Retailers etc.
 Final Customer: They are the customers who purchase it either for their own use or
to hand over it to the final user.
 We often use the terms ‘consumers’ and ‘customers’ interchangeably. However, they
do not always have the same meaning. A customer is not always the consumer.
 Customers purchase things, but consumers use them.
 For example, the customers of a company that sells pet food are mostly adults.
However, the consumers are dogs or cats.
 The customers are regarded as the king, in every business because they help in
earning revenue. The businesses focus on converting shoppers into buyers. They also
try to maintain a good relationship with the customers in order to keep the business
going. Below given are the three kinds of customers:
 Former customers or ex-customers
 Existing customers
 Prospective customers

The difference between consumers and customers impacts how businesses market their
products. Customers buy toys, for example, if consumers – children – demand them.
Comparison Chart

BASIS FOR
CUSTOMER CONSUMER
COMPARISON

Meaning The purchaser of goods or services is The end user of goods or

known as the Customer. services is known as a
Consumer.

Resell A customer can be a business entity, No

who can purchase it for the purpose of
resale.

Purchase of goods Yes Not necessary

Purpose Resale or Consumption Consumption

Price of product or Paid by the customer May not be paid by the

service consumer

Person Individual or Organization Individual, Family or Group

of people

KEY DIFFERENCES BETWEEN CUSTOMER AND CONSUMER

The fundamental differences between customer and consumer, in marketing are described
below:

1. The person who buys the goods or services from a seller is known as the Customer.
The person who uses the goods or services is known as a Consumer.
2. The customer is also known as buyer or client whereas the Consumer is the ultimate
user of the goods.
3. The customer can be an individual or a business entity while a Consumer can be an
individual or a family or a group of people.
4. Customer pays the price of the product or service however he may recover it from the
other party, in case if he had purchased it on behalf of any person. Conversely,
Consumer not necessarily pays the price of the product, like in case the goods are
gifted or if they are purchased by the parents of a child.
 5. The customer purchases the goods for the purpose of resale or to add value or for his
personal use or on behalf of another person. In contrast to Consumer, who purchases
the goods for the purpose of consumption only.

NATURE OF CONSUMER BEHAVIOUR:

1.Consumer behaviour Influenced by various factors: The various factors that influence
the consumer behaviour are as follows:
a. Marketing factors such as product design, price, promotion, packaging, positioning and
distribution.
b. Personal factors such as age, gender, education and income level.
c. Psychological factors such as buying motives, perception of the product and attitudes
towards the product.
d. Situational factors such as physical surroundings at the time of purchase, social
surroundings and time factor.
e. Social factors such as social status, reference groups and family.
f. Cultural factors, such as religion, social class—caste and sub-castes.

2. Undergoes a constant change:

Consumer behaviour is not static. It undergoes a change over a period of time depending on
the nature of products. For example, kids prefer colourful and fancy footwear, but as they
grow up as teenagers and young adults, they prefer trendy footwear, and as middle-aged and
senior citizens they prefer more sober footwear. The change in buying behaviour may take
place due to several other factors such as increase in income level, education level and
marketing factors.

3. Varies from consumer to consumer:

All consumers do not behave in the same manner. Different consumers behave differently.
The differences in consumer behaviour are due to individual factors such as the nature of the
consumers, lifestyle and culture. For example, some consumers are technoholics. They go on
a shopping and spend beyond their means.

They borrow money from friends, relatives, banks, and at times even adopt unethical means
to spend on shopping of advance technologies. But there are other consumers who, despite
having surplus money, do not go even for the regular purchases and avoid use and purchase
of advance technologies.

4. Varies from region to region and country to county:

The consumer behaviour varies across states, regions and countries. For example, the
behaviour of the urban consumers is different from that of the rural consumers. A good
number of rural consumers are conservative in their buying behaviours.

The rich rural consumers may think twice to spend on luxuries despite having sufficient
funds, whereas the urban consumers may even take bank loans to buy luxury items such as
cars and household appliances. The consumer behaviour may also varies across the states,
regions and countries. It may differ depending on the upbringing, lifestyles and level of
development.

5. Information on consumer behaviour is important to the marketers:

Marketers need to have a good knowledge of the consumer behaviour. They need to study the
various factors that influence the consumer behaviour of their target customers.

The knowledge of consumer behaviour enables them to take appropriate marketing decisions
in respect of the following factors:

a. Product design/model
b. Pricing of the product
c. Promotion of the product
d. Packaging
e. Positioning
f. Place of distribution
6. Leads to purchase decision:
A positive consumer behaviour leads to a purchase decision. A consumer may take the
decision of buying a product on the basis of different buying motives. The purchase decision
leads to higher demand, and the sales of the marketers increase. Therefore, marketers need to
influence consumer behaviour to increase their purchases.

7. Varies from product to product:

Consumer behaviour is different for different products. There are some consumers who may
buy more quantity of certain items and very low or no quantity of other items. For example,
teenagers may spend heavily on products such as cell phones and branded wears for snob
appeal, but may not spend on general and academic reading. A middle- aged person may
spend less on clothing, but may invest money in savings, insurance schemes, pension
schemes, and so on.

8. Improves standard of living:

The buying behaviour of the consumers may lead to higher standard of living. The more a
person buys the goods and services, the higher is the standard of living. But if a person
spends less on goods and services, despite having a good income, they deprives themselves of
higher standard of living.

9. Reflects status:
The consumer behaviour is not only influenced by the status of a consumer, but it also
reflects it. The consumers who own luxury cars, watches and other items are considered
belonging to a higher status. The luxury items also give a sense of pride to the owners.
CHARACTERISTICS OF INDIAN CONSUMER:

1.Things are changing :

Things are changing Attitude shift towards consumerism Age structure of population
Disposable income Education level Gender bias From Traditional to Modernised traditional.

2.Indian consumer is getting more materialistic :

Indian consumer is getting more materialistic Almost 50% of Indian urban population had
adopted work hard and get rich policy by 1996 and another 9% had done so by 2006 Gallop
Survey: Indians are more motivated than ever by personal ambition and a desire for material
success with an average work-week of 50 hours. India is the hardest working nation globally.

3.Expected Utility from Products/ Services :

Expected Utility from Products/ Services From Functional to Lifestyle

4.Consumerism: A way of life :

Consumerism: A way of life Indians desire to set money aside for electronics and durables.
Here and Now attitude increasing Travel and entertainment Trend applicable to 15 to 55 age
group All pervasive-urban and rural . 1600% growth in usage of mobile phones….3million
subscribers a month….. Advt of designer jewellery , LCD, watches….. BPO - first time
market entrants

5.Comfort with borrowing to fund future consumption :

Comfort with borrowing to fund future consumption Being in debt is no more a discomfort
EMI is legitimizing borrowing, making indebtness more acceptable. 60% salaries in EMI
EMI makes a lot of sense in borrowing

6.Foreign is passé ;India is paramount :

Foreign is passé ;India is paramount Made in India has got more credibility Faith in domestic
companies have grown up Consumer wants products that are made for Indian needs E.g.:
Nokia 1100 ,sunsilk shikakai version Among 20 most respected brands in India 8 are Indian.
“Indianizing” has to do with price levels as well Lifebuoy

7.Eating habits :
Eating habits From traditional meals to Indianized “McDonalds”

8.The rise of Women :

The rise of Women I can and I will!! Influencing to Decisive role in buying decision More
eating out , more phone calls Women are changing and reorganizing their household chores
Onion paste, ginger paste,etc… Ready to eat food

9.Comfort level with Technology :

Comfort level with Technology InfoTech awareness InfoTech driven employment
opportunities Mushrooming of call centers E-choupal Cyber grandma and grandpa!! Washing
machines with fuzzy logic….and much more

10.Some more characteristics… :

Some more characteristics… High degree of value orientation. Most discerning consumers in
the world-Even, luxury brands have to design a unique pricing strategy in order to get a
foothold in the Indian market. High degree of family orientation- extends to the extended
family and friends as well. Brands with identities that support family values tend to be
popular and accepted easily in the Indian market.

11.Some more characteristics… :

Some more characteristics… Associated with values of nurturing, care and affection. which
communicate feelings and emotions gel with the Indian consumers. Apart from psychology
and economics, the role of history and tradition in shaping the Indian consumer behavior is
quite unique. For example, hair oils and tooth powder existing with shampoos and toothpaste.

FACTORS INFLUENCING CONSUMER BEHAVIOUR:

Consumer behaviour is affected by a number of factors. They can be classified into cultural,
social, personal, and psychological factors.
I. CULTURAL FACTORS:
1. Culture:
Cultural factors have a deep influence on buyer behaviour. Culture is the basic determinant of
a person’s wants. It refers to a set of learned beliefs, values, attitudes, morals, customs, habits
and forms of behaviour that are shared by a society. These are transmitted from generation to
generation.
Culture is always alive, moving, and ever-changing. Culture shapes the pattern of
consumption and pattern of decision-making. Food habits, religious practices, the way we
dress are all influenced by culture.
Examples:
(a) Toothpowder usage is in line with traditional mouth-washing habits. The person applies
toothpowder to his index finger and rubs it on the teeth. Hence, the reason for the popularity
of the toothpowder.
(b) Many companies have come out with religious calendars with illustrations of their
products and such calendars are preserved for a long time.
2. Sub-Culture:
Each culture consists of smaller sub-cultures that provide more specific identification and
socialisation for its members.
There are four types of subcultures:
(a) Nationality groups such as Chinese, Irish, Polish, etc.,
(b) Racial groups such as Blacks, Whites, etc.,
(c) Geographical groups such as North Indian, South Indian, etc.,
(d) Religious groups such as Christians, Muslims, Hindus, etc. – While Brahmins prefer to go
for higher education and take up employment, Vaishyas are engaged in trading activities.
Caste decides a person’s status and power in society. During elections, the candidates depend
upon the people belonging to the same caste.
3. Social Classes:
These are divisions in the society which are hierarchically ordered and whose members share
similar values, interests, and behaviour. There are three distinct social classes- upper, middle
and lower classes. Lower classes show limited sense of choice making. Each class differs in
their patronisation, the reading habits, clothing habits, etc. Upper class consumers want
products and brands that depict their social status. Middle-class consumers shop carefully,
read advertisements and compare prices before they buy.
For Example, a family from a higher class may wish to eat in a five-star hotel. A middle-
class family may opt for a cost-effective restaurant.
II. SOCIAL FACTORS:
1. Reference Groups:
Reference groups are the social, economic, or professional groups that have a direct or
indirect influence on the person’s attitudes or behaviours. Consumers accept information
provided by their peer groups on the quality, performances, style, etc. These groups influence
the person’s attitudes; expose them to new behaviours and lifestyles; create pressures on the
individual.
A family, a circle of friends, a local club, an athletic team and college living groups are
examples of small reference groups. When a member is satisfied with a product, he becomes
the salesman of the product. He influences other members of the group. The consumer
develops positive opinion towards a product or service based on admiration (Cricket players)
and aspiration (Film stars) or empathy. The consumers think that, if he uses it, it must be
good, if I use it, I will be like him. Example- Many marketers have used film stars to promote
consumer goods.
2. Family:
Family constitutes the most influential group on one’s attitudes. Personal values, attitudes,
and buying habits have been shaped by family influences. The members of the family play
different role such as influencer, decider, purchaser, and user in the buying process.
A person acquires an orientation towards religion, politics, and economics and a sense of
personal ambition, does not interact with the parents, still their influence in the unconscious
behaviour can be significant. A person’s behaviour is also influenced by his/her spouse and
children.
With a great exposure to more information through various media of communication,
teenagers are occupying a major role in decision-making. In Indian urban families, wife is the
purchasing agent. In case of expensive products, there is a joint decision-making. For
example,
Husband dominance- Life insurance, automobiles, television.
Wife dominance- Washing machines, carpenting, kitchenware
Equal- Housing, vacation, outside entertainment.
Example- Johnson & Johnson products are advertised to mothers and not to small children
who actually are the consumers.
The three-generation family (husband, wife, at least one child and at least one grand parent)
is very common in rural areas-The head of the family plays a major role in buying decisions.
Example- Purchase of Television, Insurance, Ornaments, etc. Even marriages are settled by
elders.
3. Roles and Status:
Roles and Status are factors which also influence decision making. Roles are the activities of
the person in a group. A woman plays the role of wife, mother and sister in a family. She
plays the role of an employee in an organisation. She may also play the role of a secretary of
an association.
Each role carries a status. People will choose products that will communicate their status to
the society. Example- An executive working in a multinational bank may prefer branded
shirts/trousers, expensive watches, perfumes and drive a car to reach office.
III. PERSONAL FACTORS:
A buyer’s decisions are also influenced by personal characteristics, notably the buyer’s age
and life-cycle stage, occupation, economic circumstances, lifestyle, and personality and self-
concept.
1. Lifecycle:
People buy different goods and services over their lifetime. The life-cycle of a person begins
with child birth, shifts to dependent infancy, adolescence, teenage, adulthood, middle-age,
old age and then ends with death. Under each stage people’s buying behaviour is different.
Under the first three stages, decisions are not made by the consumer.
They are totally dependent on others. In the next stage, buyers not only make their decisions
but also influence others’ buying decisions. In the later stages of life-cycle, they are back to
the early stages. Example- With exposure to TV, school-going children have started
influencing buying decisions with regard to biscuits, chocolates, soft drinks, toys and
marketers are targeting this segment.
2. Occupation:
A person’s behaviour depends upon his occupation. A company’s Managing Director will
prefer expensive suits, air travel, separate cottage, etc. A worker would prefer economic
dresses, bus travel, etc. The occupation of a person decides his ability to buy. Hence, his
need-satisfaction depends on his occupation, which provides him the means.
3. Economic Circumstances:
Occupation gives rise to the economic circumstances. A person may have high desire to buy
so many things. All his needs do not become wants. This is the result of his purchasing
power. People’s economic circumstances refer to their spendable income, savings, assets,
borrowing power and attitude towards spending versus saving.
Example- the Indian middle- class has grown in prosperity and consumption of items such as
kitchen appliances, TV, refrigerators, washing machines, ready-made garments, jewellery is
growing.
4. Lifestyle:
Lifestyle may be defined as the pattern or way of living of a person which will be indicated
through the person’s activities, interests, and opinions. A person may reside in an HIC flat.
He may have costly furniture. He shall buy his clothing’s only from Raymond’s. He may
have his dinner only in five-star hotels. His hobby may be playing billiards. With the above
activities, we can understand the lifestyle of a person. Hence, he will choose according to his
lifestyle.
5. Personality:
Personality is defined as the person’s distinguishing psychological characteristics that lead to
relatively consistent and enduring responses to his or her environment. Personality is
described in terms of such traits as self-confidence, dominance, autonomy, deference,
sociability, defensiveness and adaptability. A person to maintain his personality will decide
his purchase accordingly. He buys products and services that reflect his image.
Example- Rural youth may buy tea and namkeen and urban youth buy popcorn and soft
drinks.
Personality is a complex psychological concept. Its primary features are self-concept, roles
and levels of consciousness. The self-concept refers to how a person sees himself and how he
believes others to see him at a particular time. Self-concept has three parts- (1) the idealised
self — what you would like to be? (2) The looking glass self — how you think others see
you? and (3) Self-self — your own concept of what you are like.
Each individual plays many roles — loving father or mother, affectionate wife, friendly co-
worker, efficient executive, wise home-manager, and so on. The buying behaviour is
influenced by the particular role upon which a buyer is concentrating at a given time.
Personality traits such as dominance, adventuresomeness, sociability, friendliness,
responsibility, aggressiveness, dependence, etc., can indicate how people behave.
IV. PSYCHOLOGICAL FACTORS:
1. Motivation:
Motivation is the driving force which makes the person act. Motivation is the drive to act, to
move, to obtain a goal or an objective. A human being is motivated by needs. When these
needs are backed by purchasing power it becomes a want. Buyer behaviour, hence, is
stimulated by motivation.
2. Perception:
A motivated person is ready to act. How the motivated person actually acts is influenced by
his or her perception of the situation. To perceive is to see, to hear, to touch, to smell, and to
sense something an event or relation and to organise, interpret and find meaning in the
experience.
Our senses perceive the colour, shape, sound, smell, taste, etc., of this stimulus. Our
behaviour is governed by these physical perceptions. Perception has been obtained by social
psychologists as the ‘complex process’ by which people select, organise and interpret sensory
stimulation into a meaningful and coherent picture of the world.
People can emerge with different perceptions of the same object because of three perceptual
processes- Selective attention, selective distortion, and selective retention.
All persons are not alike. They see the world in their own special ways. For instance, all the
members of the family have viewed a particular product advertisement in the television. The
members may interpret the same in different ways. Example- Even to-day many consumers
prefer to deal with Nationalised Banks/LIC as they feel that private companies may not
reliable in the long run.
(3) Learning:
Learning describes changes in an individual’s behaviour arising from experience. Learning
refers to changes in behaviour brought about by practice or experience. Almost everything
one does or thinks is learned. Learning is the process of acquiring knowledge about products,
their benefits and methods of usage and also disposal of product after use. Example- Product
demonstration is a very effective method to convince the consumer. Products like paints,
pressure cookers, fertilisers are promoted through demonstration.
(4) Belief:
A belief is a descriptive thought that a person holds about something. These beliefs may be
based on knowledge, opinion, or faith. They may or may not carry emotional change. An
attitude describes a person’s enduring favourable or unfavourable cognitive evaluations,
emotional feelings, and action tendencies towards some object or idea.
In simple words, attitude is an emotionalised pre-disposition or inclination to respond
positively or negatively in a consistent way towards similar objects. For example, once a
consumer has developed a brand loyalty, it is hard to change his attitudes and beliefs towards
the brand.
Attitudes are the result of experiences. Attitudes interact with perception, thinking, feeling,
and reasoning. Example- Many health conscious people believe that Cola drinks are harmful
and they prefer lassi, lime juice, cocoanut water or even mineral water.
Thus, we find that there are many forces acting on consumer behaviour. A person’s purchase
choice is the result of the complex forces of cultural, social, personal, and psychological
factors.
 CONSUMERISM
It is a social phenomenon that empowers the buyers and consumers. Its effects are visible in
the laws, regulations and also the marketing practices.
It keeps a check on the companies and ensures that the consumers get quality products which
are safe for them at the correct price. It also ensures that the consumers are provided with the
correct information about the products. Also Consumerism forces the companies to operate
and produce goods and services according to the consumer’s needs. It plays a very important
role in every stage of marketing starting from new product design to communication through
advertisements
The term "consumerism" has also been used to refer to something quite different called the
consumerists movement, consumer protection or consumer activism, which seeks to protect
and inform consumers by requiring such practices as honest packaging and advertising,
product guarantees, and improved safety standards.

ROOTS OF CONSUMERISM

Roots of consumerism may be traced through the following:

1.Disillusionment with the system

2.The performance gap
3.The consumer information gap
4.Antagonism toward advertising
5.Impersonal and unresponsive marketing institutions
6.Intrusions of privacy
7.Declining living standards
8.Special problems of the disadvantaged

REASONS FOR CONSUMER MOVEMENT

The following factors and others have given rise to consumer movement
1. Performance Gap: The consumers are dissatisfied with the performance of the
products,which are below their expectations. The consumers feel that the promise-
performance gap is widening e.g., the scooter not giving the mileage promised.
2. Dissatisfaction with the System: Many institutions are subjected to public scrutiny.
There is a lot of trust and a loss of esteem by these institutions or enterprises. One glaring
example of dissatisfaction for the consumers is the issue of passport. The procedure is
cumber some. There is shortage of staff and even when the passport has been made and is
ready for despatch, the despatch does not take place even after six months. Similar is the
case in the issue of licenses, ration cards, telephone connections etc.
3. The Consumer Information Gap: The consumer is not fully informed about the number
of products available in the market and a customer who is short of time and does not have
the interest or intelligence to process information is at a loss. Such incidents occur while
buying computers, small cars etc. The processing of decision making is complex and often
the consumer makes a wrong choice.
4. Non-credibility of Advertising: Some consumers have an antagonistic attitude towards
advertising. They feel that the advertisements are not credible and doubt their truthfulness.
Some want to keep away from the advertising clutter, which irritates them.
5. Impersonal and Unresponsiveness Marketing and Service Organization: The response
to the human voice by a computer is sometimes annoying. Telemarketing is a great
annoyance to the consumer. Lack of complete knowledge by salesman etc. e.g. Most of
the banks selling credit cards will call you at any hour and disturb you in your work, your
meeting etc. The number of such calls are many in a day and many salesman of the same
bank are calling you over and over again. As a courtesy you do not shut them up but it is
very irritating and time consuming. Another example of the railway where the bell keeps
ringing for long and nobody responds or responds after a long time. If you have too
questions to ask before the first question is fully answered, the phone is put down and you
are left with incomplete information.
6. Intrusion of Privacy: Many consumer information databases are prepared. In this
computerized society, this information is easily accessible and effects the
consumer’privacy.

NATURE OF CONSUMERISM

The Nature of Consumerism may be summarized in the following points:

Consumer Safety
Consumer Information
Consumer Choice
Environmental Concerns
Consumer Privacy
Business Response to Social and Ethical Concerns
Consumer's Responsibilities
Market Responses to Consumers

BENEFITS OF CONSUMERISM

1.LowCostof Living
If the whole world operated on the idea of consumerism, we would see cost of living in
different countries decline. This is because manufacturers and companies would price their
products at lower costs to encourage consumers to act and purchase in order to increase the
consumption of goods and services.

2. More Jobs
For companies to increase their output and production, they would need more staff, workers,
and employees to answer for the greater consumer demand. This would generate more work
opportunities and thus reduce the extent of unemployment.

3. Better for Business

Whichever way you look at it, consumerism will always benefit business owners and
companies. Even if they place their goods and services at the lowest possible costs, they can
be sure to make a profit as long as increased consumption is encouraged.

4.Economic growth
The most obvious benefit is of course economic growth. This happens as a series of events.
When a great many people buy goods and services, gross expenditure on these products
increase, and that leads to greater turnover. Retailers and manufacturers earn more, and
people are motivated to earn more so that they can afford these consumer products.
Manufacture of these goods increases manifold, leading to more units and employment for a
lot more people.
5.More employment

Consumerism increases the movement in the demand and supply chain. The more people
buy, the more demand is created for a product, which leads to increased production. Again,
the increase in production leads to increased purchase. This, in turn, leads to increased
employment as more people are employed in factories that make these goods. As retailers and
manufacturing companies get bigger, they also employ a lot more people.

6.Better products

Creativity and market innovation takes the front seat in consumer culture as the customer
takes the wheel. People look for better alternatives all the time, and competition among
companies grow as more companies are formed to meet the customer demand. In such a
situation, it becomes imperative for the manufacturers to sell superior products at competitive
prices. Lower quality products receive flak from the consumers, and companies that sell them
face the risk of being edged out of the market.

7.Better living standards

Yet another very obvious effect of a consumer oriented market is the possibility of better
living standards. With the availability of a number of goods in the market, the average
person can pick and choose among the products offered without having to settle for a single
variation. Lifestyles improve as people can get their hands on better homes, better furniture,
better vehicles, and better clothing. Pocket pinch is also considerably lower as companies
strive to get their customers’ attention via competitive pricing and regular discounts.

DISADVANTEGES OF CONSUMERISM

1. Low Quality Products

The problem with consumerism is that it will force manufacturers to use low end materials to
create more goods. This also helps them to drive down costs, but ultimately reduces the
quality of products and services leading to widespread consumer dissatisfaction.

2. Moral Implications
When society is encouraged and driven to make purchases in larger and larger amounts, they
might be driven to faulty moral reasoning. People become more inclined to think that
material possessions are more important and are essential to true happiness, rather than
intrinsic motivators.
3. Poor Work Environments and Terms
Because companies would be forced to hire more, produce more, and sell more for less the
cost, they ultimately spend more. The one group of individuals who will take the brunt will
have to be the workers, who will be compensated poorly and who will have to work in poor
employment environments and under unreasonable terms. This also helps businesses to cut
back on costs, but in the end, causes workers to feel overworked and underpaid.

CONSUMER MOVEMENT
The Consumer Movement is an effort to promote consumer protection through an
organized social movement which is in many places led by consumer organizations. It
advocates for the rights of consumers, especially when those rights are actively breached by
the actions of corporations, governments, and other organizations which provide products and
services to consumers. Dissatisfaction of the consumers as many unfair practices were being
indulged in the sellers.

Consumer Movement, consumer is regarded as King in modern marketing. In a progressive

market economy, the concept of consumer is given topmost importance, and every attempt is
made to promote consumer satisfaction. However, this sovereignty of the consumer is only
theoretical. In practice, he is not given any such importance. Consumers are ignored in
general. They are exploited and cheated.

Consumer Movement, consumers unite together for protecting their own interests. It is a
peaceful and democratic movement of for self-protection against their exploitation.
Consumer movement is also referred to as consumerism. It is the movement of the
consumers, by the consumers and for the consumers to safeguard and to promote their
interest. The consumer movement was initially started in America followed by England and
other European countries. In U.S.A., the consumer movement was started in 1920, though it
is yet to gain tremendous momentum. Every year, 15th March is celebrated as Consumer Day
worldwide.

DEFINITION OF CONSUMER MOVEMENT

 According to Philip Kotler and G. Armstrong, Consumer Movement is defined as

below:
 "Consumerism is an organized movement of citizens and Government to impose the
rights and powers of buyers in relation to sellers".

 According to Cravens and Hills, Consumer Movement is defined as below:

 "Consumerism is a social force within the environment designed to aid and protect the
consumer by exerting legal, moral and economic pressure on business".

FEATURES OF CONSUMER MOVEMENT

1. Voluntary Movement
 2. Democratic Movement
3. Comprehensive Movement
4. Protection of Rights
5. Prevention of Malpractices
6. Unity Among Consumer
7. Enforcing Consumer Right
8. Seller beware
9. Prime Objectives

Discuss each feature of consumer movement one by one.

1. Voluntary Movement

Consumer Movement is a voluntary and collective movement of consumers. It is a movement

of the consumers, by the consumers and for the consumers. A group of active consumers
come forward, forms a union and fight for the well-being of the community. It is a non-
political, non-religious organization of consumers started to promote and protect interest of
consumers.

2. Democratic Movement

Consumer Movement is a movement of the consumers, by the consumers and for the
consumers. It mainly aims at consumer protection, education, and welfare by adopting
peaceful methods.

3. Comprehensive Movement

Consumer Movement is not restricted to purchase of goods and services by the consumers. It
also encompasses the public utilities and service like transport and communication, banking
medical and health. It is concerned with the quest of the consumers to achieve a best standard
of living and a better quality of life.

4. Protection of Rights

Consumer Movement has the objective to make the business community and government to
guarantee and enforce the legitimate rights of consumers.

5. Prevention of Malpractices

Consumer Movement has the objective is to prevent unethical practices within the business
community, such as artificial scarcity, adulteration, black marketing, profiteering, etc.
6. Unity Among Consumer

Consumer movement aims at creating awareness and unity among consumers and thereby to
take group actions on issues like, consumer laws, supply of information about marketing
malpractices, deceptive and restrictive trade practices.

7. Enforcing Consumer Right

Consumer Movement aims at enforcing four basic rights of consumers are Right to Safety,
Right to be informed, Right to choose and Right to Redress.

8. Seller beware

Before the commencement of the consumer movement, goods were sold on the assumption,
Let the buyer beware. Every buyer was required to inspect the goods. Now the “seller
beware” has become the prime principle. This is due to growth of consumer movement. The
seller is required to give fair treatment to the consumers.

9. Prime Objectives

Consumer Movement prime objective is to ensure safety, security and welfare of the
consumer.

FEATURES OF CONSUMER MOVEMENT

The features of consumer movement can be explained with the help of the following points:-

(1) Voluntary Movement: It is a voluntary and collective movement of consumers. A group

of active consumers come together and form an association to fight for the protection of
consumers. It is non political and non religious association of consumers.

(2) Protection of Rights: Consumer movement improves the strength and unity of
consumers. It uses this strength to make the businessman and the government to give
guarantee of the products sold and to give the rights to consumers such as right to choose,
right to safety, etc.

(3) Wider Term: The concept of consumer movement is not only restricted to commercial
activities, but it is also extended to public utility services like banking, transport, telephone,
medical, etc. According to the provision of the Consumer protection Act, 1986, the term
consumer includes all types of user of goods and services.

(4) Democratic Movement: Consumer movement is powerful but democratic movement of

consumers. It ensures that, the rights of consumers are recognized and protected. For taking
the decision the meetings are adopted in a democratic method. It desires to end capitalist
exploitation but in a democratic way.

(5) Prevention of Unethical Practice: The consumer movement prevents the adoption of
unethical practice like black marketing, adulteration, under weight, etc.

(6) Safety and Security: The main object of consumerism is to ensure safety and security of
consumers. It helps in promoting consumer welfare.

(7) Creating Awareness: Consumer movement aims at creating awareness and unity among
consumers so that collective action can be taken against various malpractices.

(8) Caveat Venditor: It means "Let the seller beware". Before consumer movement, goods
were sold with the condition "Caveat Emptor" which means "Let the buyers beware, and
every buyer while buying was forced to check the goods and make sure that the goods are as
desired quality. Because once goods were sold, co complaints were entertained but now seller
has to be careful before selling the goods and this is all because of the consumer movement.

(9) Enforcing Consumer Rights: Consumer movement not only aims at protecting
consumer rights but also aims at enforcing four basic rights of consumers, i.e. rights to safety,
rights to choose, rights to redress, rights to be informed.

FUNDAMENTAL RIGHTS OF CONSUMERS

The consumer movement exercises a considerable influence on the socio-economic

environment of business. In a country like India where there is a high percentage of illiteracy
among people, where people are less informed and where critical goods are always in short
supply, the Government has a significant role in safeguarding the interests of consumers by
promoting a climate of fair competition and preventing exploitation of consumers.

The consumer movement has changed it and sellers feel now it is a question of seller beware.
The objective of the consumer movement is to secure the interests of the consumer against all
types of unfair trade practices. Consumerism as an effective and organised movement started
in 1960s in the USA. Ralph Nader has lifted consumerism into a major social force.

Consumerism may be defined as a social force within the environment designed to aid and
protect the consumers by exerting legal, moral and economic pressures on business and
government.

The consumer movement highlights the following are fundamental rights of consumers.

1. Right to Safety:
To be protected against the marketing of goods which are hazardous to health or life? Means
right to be protected against the marketing of goods and services, which are hazardous to life
and property. The purchased goods and services availed of should not only meet their
immediate needs, but also fulfil long term interests. Before purchasing, consumers should
insist on the quality of the products as well as on the guarantee of the products and services.
They should preferably purchase quality marked products such as ISI,AGMARK, etc
2. Right to be informed: To be protected against fraudulent, deceitful or grossly misleading
information, advertising, labelling or other practices and to be given the facts needed to make
an informed choice.
Means right to be informed about the quality, quantity, potency, purity, standard and price of
goods so as to protect the consumer against unfair trade practices. Consumer should insist on
getting all the information about the product or service before making a choice or a decision.
This will enable him to act wisely and responsibly and also enable him to desist from falling
prey to high pressure selling techniques.

3. Right to Choose:
To be assured access to a variety of products and services at competitive prices and in those
industries in which Government regulations are substituted, to be assured satisfactory quality
and service at fair price.

Means right to be assured, wherever possible of access to variety of goods and services at
competitive price. In case of monopolies, it means right to be assured of satisfactory quality
and service at a fair price. It also includes right to basic goods and services. This is because
unrestricted right of the minority to choose can mean a denial for the majority of its fair
share. This right can be better exercised in a competitive market where a variety of goods are
available at competitive prices

4. Right to be Heard:
To be assured that consumer interests will receive full and sympathetic consideration in the
formulation of Government policy and fair and expeditious treatment in its administrative
tribunals.

Means that consumer's interests will receive due consideration at appropriate forums. It also
includes right to be represented in various forums formed to consider the consumer's welfare.
The Consumers should form non-political and non-commercial consumer organizations
which can be given representation in various committees formed by the Government and
other bodies in matters relating to consumers.

5.Right to consumer education

Means the right to acquire the knowledge and skill to be an informed consumer throughout
life. Ignorance of consumers, particularly of rural consumers, is mainly responsible for their
exploitation. They should know their rights and must exercise them. Only then real consumer
protection can be achieved with success.

6.Right to Seek redressal

Means right to seek redressal against unfair trade practices or unscrupulous exploitation of
consumers. It also includes right to fair settlement of the genuine grievances of the consumer.
Consumers must make complaint for their genuine grievances.Many a times their complaint
 may be of small value but its impact on the society as a whole may be very large. They can
also take the help of consumer organisations in seeking redressal of their grievances.

As the markets are globalizing, the direct link between the manufacturer and the final user
getting distant, post purchase grievances have to be heard through a strong redressal system.
For this, Consumer disputes redressal agencies (popularly known as Consumer Forums or
Consumer Courts) are set up under the Act at District, State and National level to provide
simple and inexpensive quick redressal against consumer complaints. The District forum
deals with complaints where the compensation sought is less than 23 lakhs. This limit is
commonly known as the ‘pecuniary jurisdiction’ of the Consumer Redressal Forum. The
State Forum deals with the complaints where the value of the goods and services and
compensation claimed does not exceed rupees one crore and the National Forum entertains
the complaints where the value of the goods or services and compensation claimed exceeds
rupees one crore.

The Consumer Forum can order the company to take the following actions once it hears the
complaint and decides that the company is at fault:
 Correct deficiencies in the product to what they claim.
 Repair defect free of charges
 Replace product with similar or superior product
 Issue a full refund of the price
 Pay compensation for damages / costs / inconveniences
 Withdraw the sale of the product altogether
 Discontinue or not repeat any unfair trade practice or the restrictive trade practice
 Issue corrective advertisement for any earlier misrepresentation
7.Right To Choice
Different interests can interpret the right to choice in different ways. For the developed world
consumers, right to choice translates into more and a variety of products to choose from. For
e.g. American consumers can choose from 25,000 super market items, 200 kinds of cereals,
and read 11,092 magazines. This kind of choice often gives consumers a sense of well-being
and safety and encourages them to believe that abundance leads to good living. The market
also perpetuates this line of thought by advertising and promotion gimmicks. The right to
choice has a very different definition in developing countries. For a population dependent on
the environment for livelihood, the right to choice and other consumer rights need a shift in
focus. The focus needs to be on choice of good practices like organic farming and
conservation of natural heritage. In cities, people should be able to choose cleaner and safer
ways of transportation over polluting ones. Similarly, healthy and fresh food should be
chosen over junk food. The right to choose must essentially be a consumer's right to choose a
safe and healthy product of good quality over an unsafe or defective product. This can give a
consumer immense leverage not just to choose products that are safe but also to influence the
practices adopted my the market.
Misinterpretation of choice by market forces has systematically weakened the consumer's
position vis-à-vis the market. The market has exploited this situation by interpreting the right
to confuse and exploit the consumer.
The consumer has been made to believe that more varieties of the same product on the market
shelves give him or her the right to choose what s/he wants. In reality, more varieties of the
same product just encourages false advertising claims and give the consumer a false sense of
choice. Various kinds of shampoos, soaps, and other cosmetics differ merely in colour, smell
and brand image. Each one of them claims one-upmanship over the other but gives the
consumer very little value for money or a better quality product.
Ever since trade liberalisation in India started taking place, the consumer world has been
witnessing increased availability of exotic fruits, vegetables and imported food items. These
days, one can buy imported apples that cost Rs 200 a kilo and syrups, jams, sauces, drinks
that are manufactured overseas. However, neither the market nor the consumers pay any
attention to the over-consumption of resources as a result and its environmental impact.
When products are manufactured in distant lands, they have to be packaged and preserved in
a special way to last longer. A lot of resources go into its packaging and transportation. All
these facts and their impact are often not made known to consumers and they end up harming
the environment and paying an exorbitant price for their consumption choices.

8. Right To Basic Needs

Access to food, water and shelter are the basis of any consumer's life. Without these
fundamental amenities, life cannot exist. In September 2001, India's stock of foodgrains were
around 60 million tonnes, yet one third of the Indian population lives below the poverty line
and consumers often go hungry or remain severely malnourished, leading to poor health. The
recent starvation deaths in Orissa are a case in point. A very crucial objective of the
conceptualisation and existence of consumer rights is to ensure that consumers have an
assured food supply, safe and permanent dwellings, basic amenities of life like sanitation and
potable water, and power supply. Urbanisation is seen as a mark of development but for rural
migrant population, living conditions in cities is very poor.
The population of cities is growing rapidly in India and after 1988, the percentage of urban
poor has been more than that of the rural poor. Around 20 to 25 per cent of the urban
households live in slums, make-shift colonies or refugee settlements due to non-availability
of affordable and decent habitat in urban areas. According to some estimates, in urban areas
alone, there is a housing shortage of 17 million units. This has led to a habitat crisis in Indian
cities. In rural India, the situation is equally bad, with a large part of the population still living
in make-shift dwellings and hutment. With non-permanent housing comes lack of sanitation
facilities and other amenities like running water and electricity supply. Due to burgeoning
population, most people do not have access to dry toilets in rural and urban areas.
9.Right To Safe Environment
For urban consumers, environment means parks, gardens, and deteriorating air and water
quality. Most urban areas are bereft of any wildlife and people are unaware of the
biodiversity around them. On the other hand, rural consumers rely on their environment for
fulfilment of their basic needs.

The need for environmental conservation is seen as a necessary defence against deteriorating
quality of life world-wide. We are all victims of contaminated food and water supply,
pesticide-ridden food, adulterated milk and choking exhaust fumes emitting from vehicles.

According to a World Bank report, India is being pushed back due to its high environmental
costs. We lose around Rs 24,500 crores every year in terms of air and water pollution alone.
If you live in a city, you must have experienced air and water pollution at some point of time.
Children often fall ill due to polluted environments, it leads to increased health costs and
discomfort for consumers. Valuable resources and man-days are lost due to polluted
environment and living conditions. Consumers need to understand that only a safe
environment can ensure the fulfilment of their consumer rights.

If we look closely at our immediate surroundings and our consumption patterns, we would
find that we, ourselves, are responsible for causing environmental pollution to a certain
extent. For instance, our monthly purchases include various kinds of washing detergents,
toilet cleaning acids and chemicals like Harpic or Sanifresh, and a lot of non-biodegradable
packaging for pre-packed food products. This leads to environmental problems like water and
soil pollution, and waste disposal problems. It also shows that our consumption patterns are
closely linked with the state of the environment and that environmental damage is mostly a
result of irresponsible consumer behaviour.

CONSUMER RESPONSIBILITIES
1.Ask Yourself!
 Have you faced any problems as a consumer?
 Have you ever complained when you have had such a problem?
 Do you know that you could seek the assistance of a consumer group to protect your
interests?
2.Be Critically Aware
The responsibility to be more alert and to question more – about prices, about quantity and
quality of goods bought and services used.
3.Be Involved
The responsibility to be assertive – to ensure that you get a fair deal as a consumer.
Remember, if you are passive, you are likely to be exploited.
4.Be Organized
The responsibility to join hands and raise voices as consumers; to fight in a collective and to
develop the strength and influence to promote and protect consumer interest.
 5.Practice Sustainable Consumption
 The responsibility to be aware of the impact of your consumption on other citizens, especially
the disadvantaged or powerless groups; and to consume based on needs – not wants.
6.Be Responsible to the Environment
 The responsibility to be aware and to understand the environmental consequences of our
consumption. We should recognize our individual and social responsibility to conserve
natural resources and protect the earth for future generations

IMPORTANCE OF CONSUMER MOVEMENT

The importance of consumer movement is to protect consumer rights. Importance of

consumer movement can be studied with the help of the following points:-

(1) Protection from Unsafe Products: An important object of consumer movement is, the
united fight of consumers against harmful and unsafe products produced by manufacturers
and sold by traders. The examples of such products are medicines causing side effects, sold
without any written warning, sale of stale products, etc.

(2) Protection against Unfair Trade Practices: Businessmen do various unfair trade
practices like overcharging the customers, using inaccurate weight and measures, selling
inferior quality goods, resorting to black marketing, etc. Consumer movement protects the
consumers from such malpractices.

(3) Protection Against Pollution: Due to consumer movement, business organizations are
under pressure to take the necessary measures to control air, water and noise pollution.

(4) Bringing Consumers Together: It was very easy for business organizations to exploit
unorganized customers. However, due to consumer movement, customers are collectively
fighting for their rights. Thus, consumer movement has succeeded in uniting and getting a
fair deal for consumers from the business world.

(5) Control on Monopolistic & Restrictive Trade Practices: Many Laws and Acts have
been introduced to protect the interest of consumers against monopolistic and restrictive trade
practices of businessmen.

(6) Creating Consumer Awareness: Consumer movement creates awareness among

consumers and educate them through lectures, seminar, workshops, media, public meetings,
etc. regarding consumer rights.

(7) Timely Supply of Essential Commodities: Consumer movement has made it possible
for consumers to form Consumer Co-operative Societies for production and distribution of
essential commodities on co-operative basis so as to ensure their regular supply at reasonable
prices.
(8) Right to get After Sale Service: After sale service is provided by manufacturers and
sellers to the customer even after effecting sales. Seller must provide after sale services in
case of consumer durable products. The seller is supposed to undertake free repairs and
maintenance of products sold during the warranty period. The awareness about this right of
consumers has been brought through consumer movement.

(9) Pressure on Government: Since consumers are now united, they are able to exert
pressure on the government to enact various laws and introduce measures for consumer
protection.

(10) Link between Consumers and Business Community: Various consumers, by passing
on consumer grievances, their suggestions, etc to business organizations are getting justice
for consumers.

(11) Legal Help: Various consumer protection associations helps the consumer to get their
complaints against malpractices of traders, redressed through Consumer Disputes Redressal
Agencies or Civil Courts.

FEATURES OF CONSUMER MOVEMENT

The following features of consumer movement are noteworthy:

1. It is basically a protest movement.
2. It is a mass movement in the sense that masses are the general body of consumers.
3. It is generally a non-official movement. Public and voluntary consumers, organisations
initiate the movement.
4. Though it is not a government-sponsored movement, it is recognised and backed up by the
Government.
In a laissez-faire society, consumer was a king and he was free to choose. But the consumer
sovereignty is a myth and the supposed benefit to the consumer accruing from perfect
competition has not been realised.
The actual world is a world of imperfect or monopolistic competition and the consumer has
only a limited amount of freedom in making purchase choices. When the consumer will be
able to assert himself, ‘the take it or leave it’ nature of transactions in the Indian market will
end.
As the manufacturer has the free choice to produce and sell his goods so the consumer should
have the free choice to select from the range of products available. This is what is meant by
consumer’s sovereignty in the present socioeconomic context.
Consumers as a class in our country are the only group of people who are so disorganised that
they are being exploited all the time by other sectors of the economy—industry, labour and
agriculture.
Indian consumer is confronted with foodstuff and goods that are adulterated, substandard and
unsafe, prices that are inflated and weights and measures that perennially short-change him.
We do not agree with Prof. Samuelson when he says that business of business is business.
Business is not an island in itself. It is part and parcel of society as a whole.
Hence it should be constantly alive and alert to the responsibilities to the society. Consumer
protection movement is an attempt to make the businessmen aware of their social
responsibilities.
Some legislative measures have already been taken by the Government to safeguard the
interests of the Indian consumer. There are a wide range of enactments which operate to
protect the consumer.
The Agricultural Produce (Grading and Marketing) Act, 1937 constitutes the basic law for the
grading of agricultural produce. The Drugs and Cosmetics Act, 1940 regulates the import,
manufacture, sale and distribution of drugs and cosmetics.
The Prevention of Food Adulteration Act, 1959 aims at preventing the sale of impure
foodstuff. The Essential Commodities Act, 1955, regulates the production, supply,
distribution and trade in essential commodities for the maintenance of the supplies of
essential commodities and securing equitable distribution and availability at fair prices.
The Packaged Commodities (Regulation) Order, 1979, requires manufacturers to display on
labels and packages the weight, contents of the product, date of manufacture, selling price
and address of the manufacturer.
Some other important acts include the Display of Prices Order, 1973, the Drugs and Magic
Remedies (objectionable advertisement) Act, 1954, and the Cigarettes (Regulation of
Production, Supply and Distribution) Act, 1975.
Lately the Government has enacted the Consumer Protection Act, 1986. Through this Act, an
attempt has been made to strengthen the institutional framework to protect the consumer at
local, state and central level.
There are various institutional factors which are responsible for growing concern for the
consumer protection in India. To begin with, the Government is anxious to protect the
vulnerable sectors of the community through schemes like streamlining the public
distribution system.
Owing to inflation, different anti-social elements have appeared in the market place for
exploiting the poor consumers through unfair trade practices like adulteration, underweight,
substandard products of goods in short supply.
Hence the Government has come forward to protect the consumers through the Maintenance
of Internal Security Act, MRTP Act, 1969 and the Consumer Protection Act, 1986.
Secondly, the Indian traders did not bother about consumers because there had been a sellers’
market. Today the market environment for most products has changed. Now it is a buyers’
market.
Unless the consumers are protected against dishonest and unethical business practices, the
long-run business interest will suffer. Now the business community is becoming aware of the
social responsibility towards customers.
Thirdly, the consumers are becoming more and more conscious of their rights and legitimate
demands.
The present day consumers are not ignorant of the market environment. They are conscious
of customers’ rights and to protect their interest, they form organisations like Consumer Co-
operative and Consumers’ Councils.
Lastly, the consumer burden imposed by the Government is on the increase. On the pretext of
fiscal discipline, the tax burdens are increased every year. It has almost become a practice to
announce pre-budget hike in administered prices like petro-products, railway fares and post
and telegraph rates. It is quite natural that there will be consumers’ resistance to these
additional burdens.
In India consumerism is still in its infancy although the consumers suffer from exaggerated
advertisements, impure quality of products, underweight’s, high prices and artificial scarcity
of many essential articles.
Though some consumer organisations have been set up in different parts of the country, the
movement has yet to gather sufficient strength to become a living force to reckon with.
There are many hindrances to the growth of a strong consumer movement in India.
First, there is lack of leadership and management. In India, there is no Ralph Nader who can
give a dynamic leadership to this movement.
Secondly, the majority of the people are illiterate. They lack consumer education and do not
have the necessary consciousness to organise themselves.
Thirdly, India is a vast country and it is very difficult to have quick, effective and regular
communication among different parts of the country. Different languages and different
customs of different regions hamper the growth of the movement.
Fourthly, to organise the consumer movement throughout the country needs huge financial
resources. Lack of financial resources is a handicap to the growth of the movement.
Lastly, the attitude of the people is not favourable to the growth of a consumer movement in
India. There is a tendency among the people to look to the ‘Government for protection and
assistance rather than to stand on their own legs and put up resistances.
Till recently, apart from the legal measures, the main planks for protecting consumers have
been the public distribution system and consumer co-operative movement.
Public distribution system started during the Second World War and it is now in operation in
the case of consumer goods. It covers food grains, sugar, kerosene and controlled cloth.
The fifth Plan proposed to expand the coverage to include pulses and edible oil. It was
intended to keep prices in check and to ensure equitable distribution of scarce but basic foods.
The system also helped to check hoarding and black marketing.
The public distribution system does not necessarily improve the distribution of income but it
helps to prevent deterioration in distribution in inflationary conditions.
Shortages of essential goods as well as inflation can be highly regressive if a public
distribution system does not prevent serious cuts in the consumption of the poor.
Though the prices of essential items such as cereals bought from the fair price shops have
been lower than prices in the open market, but the quality is substandard and the quantity
insufficient. The poor are often unable to buy their requirements from the fair price shops
because they do not have cash in hand.
They usually go to private traders who provide credit facility even if it means actually paying
a much higher price.
Since most of the unfair trade practices are due to shortage in supply, what is needed is a
rapid increase in production of all varieties of consumer goods and quality, price and
distribution would take care of them.
The National Consumer Protection Council under the Chairmanship of the Union Minister of
Civil Supplies and Cooperation has been established to promote and develop consumer
movement throughout the country.
 The Council will inform itself fully about Consumers’ problems, collect and disseminate
information relating to consumer matters, assist the state-governments in development of
consumer movement, examine consumer grievances and initiate remedial action and promote
equitable distribution of mass consumption commodities at fair prices.

Consumer Rights Vs Responsibilities

Sl.No Rights Responsibility

1 Right to be heard 1. Ensure that the company has provided you the contact details of the
consumer grievance handling system and are easily accessible.
2. Avoid purchase of products/services from a company which do not
provide
details of the consumer grievance officers to handle consumer
grievances
2 Right to Redress 1. Ignoring the loss suffered on purchase of defective goods and
services and not filing complaint encourages the corrupt business man
to supply low standards or defective goods and services. Therefor file a
complaint even for a small loss. File only a genuine complaint.
2. Consumer must file a complaint if not satisfied with the quality of
product/services.
3. Claim the penalties/compensation as provided under rules and
regulations to ensure that the quality delivery system improves.
4. Study carefully all terms and conditions related to
return/replacement of defective goods, refund and warranty policies.

3 Right to Safety 1. While purchasing the goods or services, Consumer must look for
standard
quality mark such as ISI, Hallmark, Agmark, ISO, FSSAI , etc.
2. Do not buy any spurious/ fake/duplicate/ hazardous products

4 Right to Consumer 1. Do not get carried away by advertisements only or believe on the
Education/ Right to words of the seller. Consumer must look market reviews/feedback.
be Informed Similarly inform offers if product and services of companies are of
substandard.
2. Consumer must insist on getting complete information on the
quality, quantity, utility, price etc. of the product or services.
3. Ask for complete contact details of the consumer grievance
mechanism of the company the consumer wish to buy from

5 Right to Choose 1. Access the information available on various alternatives available

for the product and services under purchase consideration.
2. Compare specifications, competition and fair prices of the goods and
services before finalizing on the purchase
3. Study various feedbacks/reviews of the products/services
LAWS AND LEGISLATIONS TO PROTECT THE CONSUMERS IN INDIA
Government of India has provided various laws and legislations to protect the interest
of consumer and some of these regulations are:
1. The Consumer Protection Act 1986:
Enactment of Consumer protection Act 1986 was one of the most important steps taken to
protect the interest of consumer. The provision of act came into force from July 1, 1987. The
main features of this Act are:
(i) This act has provided various rights and responsibilities to consumers.
(ii) It provides safeguard to customers against defective goods, deficient’s, services, unfair
trade practices and other forms of their exploitation.
(iii)The act has provided three tier redressal agencies where consumer can file complaints.
These are District forum, State Commission and National Commission.
2. The Contract Act 1982:
This Act is formed to bind people on their promises made in a contract. The Act also provides
remedies available to parties in case of breach of contract.
3. The Sale of Goods Act 1930:
This act provides safeguard and relief to customers in case goods are not complying with the
expressed conditions and warranty.
4. The Essential Commodities Act 1955:
This act is formed to control production, supply and distribution of essential commodities. It
checks inflation and ensures smooth and equal supply of these goods. It also checks black
marketing, hoarding.
5. The Agricultural Produce (Grading and Marking) Act 1937:
This act is formed to assure quality of agricultural products. This Act provides grade
standards for agricultural commodities. The quality mark which is supplied by this act is
“AGMARK.” This mark is given only when goods are produced by following minimum
standards.
6. The Prevention of Food Adulteration Act 1954:
This Act is formed to check Adulteration of food articles and ensure their purity so that the
health of general public can be maintained.
7. The Standard of Weights and Measures Act 1976:
This Act provides protection to consumers against malpractices of underweight, under
measure. The provision of this Act is applicable on those goods which are sold or distributed
by weight and measure.
8. The Trade Mark Act 1999:
This Act prevents the use of fraudulent marks on products. This act is introduced in place of
trade and merchandise mark act 1958.
9. The Competition Act 2002:
This Act is related to monopolies and restrictive trade practices Act 1969. This Act is formed
to encourage healthy competition and protect consumers from companies which hamper
competition.
10. The Bureau of Indian Standard Act 1986:
This Act is formed to provide special marks to products which fulfill some minimum quality
standards. The common mark issued under this Act is ISI mark. This act has set up a
grievance cell where consumer can make a complaint about a product which is not up to a
quality mark and are having ISI mark.

THE CONSUMER PROTECTION BILL, 2019

Ministry: Consumer Affairs, Food and Public Distribution.

 The Consumer Protection Bill, 2019 was introduced in Lok Sabha by the Minister of
Consumer Affairs, Food and Public Distribution, Mr. Ram Vilas Paswan on July 8,
2019. The Bill replaces the Consumer Protection Act, 1986. Key features of the Bill
include:

 Definition of consumer: A consumer is defined as a person who buys any good or

avails a service for a consideration. It does not include a person who obtains a good
for resale or a good or service for commercial purpose. It covers transactions through
all modes including offline, and online through electronic means, teleshopping, multi-
level marketing or direct selling.

 Rights of consumers: Six consumer rights have been defined in the Bill, including
the right to: (i) be protected against marketing of goods and services which are
hazardous to life and property; (ii) be informed of the quality, quantity, potency,
purity, standard and price of goods or services; (iii) be assured of access to a variety
of goods or services at competitive prices; and (iv) seek redressal against unfair or
restrictive trade practices.

 Central Consumer Protection Authority: The central government will set up a

Central Consumer Protection Authority (CCPA) to promote, protect and enforce the
rights of consumers. It will regulate matters related to violation of consumer rights,
unfair trade practices, and misleading advertisements. The CCPA will have an
investigation wing, headed by a Director-General, which may conduct inquiry or
investigation into such violations.

 CCPA will carry out the following functions, including: (i) inquiring into violations of
consumer rights, investigating and launching prosecution at the appropriate forum; (ii)
passing orders to recall goods or withdraw services that are hazardous, reimbursement
of the price paid, and discontinuation of the unfair trade practices, as defined in the
Bill; (iii) issuing directions to the concerned trader/ manufacturer/ endorser/
advertiser/ publisher to either discontinue a false or misleading advertisement, or
modify it; (iv) imposing penalties, and; (v) issuing safety notices to consumers against
unsafe goods and services.

 Penalties for misleading advertisement: The CCPA may impose a penalty on a

manufacturer or an endorser of up to Rs 10 lakh and imprisonment for up to two years
for a false or misleading advertisement. In case of a subsequent offence, the fine may
extend to Rs 50 lakh and imprisonment of up to five years.

 CCPA can also prohibit the endorser of a misleading advertisement from endorsing
that particular product or service for a period of up to one year. For every subsequent
offence, the period of prohibition may extend to three years. However, there are
 certain exceptions when an endorser will not be held liable for such a penalty.

 Consumer Disputes Redressal Commission: Consumer Disputes Redressal

Commissions (CDRCs) will be set up at the district, state, and national levels. A
consumer can file a complaint with CDRCs in relation to: (i) unfair or restrictive trade
practices; (ii) defective goods or services; (iii) overcharging or deceptive charging;
and (iv) the offering of goods or services for sale which may be hazardous to life and
safety. Complaints against an unfair contract can be filed with only the State and
National Appeals from a District CDRC will be heard by the State CDRC. Appeals
from the State CDRC will be heard by the National CDRC. Final appeal will lie
before the Supreme Court.

 Jurisdiction of CDRCs: The District CDRC will entertain complaints where value of
goods and services does not exceed Rs one crore. The State CDRC will entertain
complaints when the value is more than Rs one crore but does not exceed Rs 10
crore. Complaints with value of goods and services over Rs 10 crore will be
entertained by the National CDRC.

 Product liability: Product liability means the liability of a product manufacturer,

service provider or seller to compensate a consumer for any harm or injury caused by
a defective good or deficient service. To claim compensation, a consumer has to
prove any one of the conditions for defect or deficiency, as given in the Bill.

IMPORTANT QUESTIONS FROM UNIT-1& 2

UNIT- 1
1. What is consumer behaviour?
2. Define consumer behaviour
3. Characteristics and features of consumer behaviour
4. Differentiate consumer and customer
5. What are the factors influencing consumer’s buying behaviour?
6. Explain nature and characteristics of Indian consumer
7. What is Consumerism?
8. Brief importance of Consumerism
9. Describe advantages and disadvantages of consumerism
10. What is consumer movement?
11. What are the fundamental rights of consumer
12. Brief duties and responsibilities of consumers
13. Find the reasons for consumer movement in India
14. Explain various Consumer Protection Act in India
15. Brief about Consumer Protection Bill 2019

UNIT -2

1. Explain Input-Process-Output Model in Consumer Behaviour

2. Explain Nicosia Model of Consumer Behaviour
3. Explain Howard Sheth Model of Consumer Behaviour
4. Engel-Kollat-Blackwell Models of Consumer Behaviour,