CONSUMERISM

 “It is the shame of the total marketing

concept.” - Peter F. Ducker
Consumerism : It is an organised movement of citizens and
government to enhance the rights and power of buyers in relation to
sellers. - Philip Kotler.

Sellers rights included:

-Right to introduce any product in any size and style, provided it is

not hazardous to personal health or safety or if it is , to introduce it
with the proper warning and controls.

- Right to price the product at any level, provided there is no

discrimination among similar classes of buyers.

-Right to spend any amount of money to promote the product,

provided it is not defined as unfair competition.

- Right to formulate any product message, provided it is not

misleading or dishonest in content or execution.

- Right to introduce any buying incentive schemes they wish.

Consumer rights included:

 Right to be protected against exploitation by

unfair trade practices

 Right to influence products and marketing

practices in directions that will enhance the
‘quality of life’

 Right to be adequately informed about the

important aspects of the product like quality and
performance, ingredients, operational
requirements, freshness etc.,
 Right to voice their grievance or suggestion if
any

 Right to get redressed of their grievances

 Right to select the best product from a

variety of offers

 Right to a clean and healthy physical

environment that will protect and enhance
the quality of life.
 Consumer in India :

 Consumer is the least organised and the least

favorable element in the circle of investment,
production, sale and consumption and is generally
taken for granted as one who has anyhow to buy
in order to live.

 The absence of perfect competition makes the

things worse for the consumer.
 Perfect competition
 A market structure in which the following five criteria are met:

1) All firms sell an identical product;

2) All firms are price takers - they cannot control the market
price of their product;

3) All firms have a relatively small market share;

4) Buyers have complete information about the product being
sold and the prices charged by each firm; and

5) The industry is characterized by freedom of entry and exit.

Perfect competition is sometimes referred to as "pure
competition".
Problems confronting consumers :

Consumers have to face a number of problems day in and

day out. Some of these are :

1) Unfair trade practices : Some of the unfair trade

practices are as follows :

a) Misleading and Deceptive Advertising : Business spends

huge amounts of money on advertising their product and
services. Most of these advertisements contain overstated
and un-provable claims.
Eg: Commonly seen advertisements of some tooth
pastes, cosmetics and drugs, make claims for products
without explaining how the claimed qualities of the
products produce the benefits suggested.

These advertisements will have statements which are

vague and unclear like “ twice as fast to relieve pain as
any other pill does”

Some small business firms indulge in still more dubious

and deceptive practices like mail order sale of magic
rings, wonder drugs for the incurable diseases (like
white patches and arthiritis)
b) Bait (attract) advertising :

Sometimes advertisements contain offer of a particular item

on slashed down price, but the intention of the advertise is
to attract the buyers to his retail show-room so that they
may buy goods other than advertised which is offered as a
bait to them.

2) Spiraling Prices :
By cornering, creating artificial scarcity, will lead to arouse
of price. To protect consumers from these kind of practices
governments uses the Essential Commodities Act, Drug
Price Control Order, 1979 etc.,
3) Rampant Adulteration :

Another ground on which the business community is

criticized is adulteration of goods. Adding some cheap
material to the goods simply to increase the bulk of the
actual good.

Like Clay pellets are added to black-gram and small pieces

of stones are added to rice.

The cunning skills in this field has reached high levels of

sophistication and the search for additives that look like
the original material has become a special art.
4) Poor quality of products : Another ground on which
consumers complain against business is that the poor
quality of products.

The government have set up standards through ISI mark

and ag-mark benchmark standards.

5) Freedom to contract :
Another problem being faced by a consumer is that many
times, he cannot negotiate the terms of a contract into
which he is entering to effect a purchase.

Eg: bank loans, credit cards etc., they may fix any terms as
regards time of delivery and that of payment.
Four Approaches to Consumerism :

The fact, the consumerism has come to stay, demands

that some steps are to be taken towards consumer
protection and satisfaction.

It is necessary to stress that for this purpose, the

combined action of business, State, consumer and
consumer associations can stop the exploitation of
consumers.

Therefore, the following four approaches to

consumerism are identified.
1) Business Self Regulation :

The business community itself can help in achieving

consumer protection and satisfaction by enforcing self-
discipline. Business can regulate its own behavior and
actions by raising their ethical standards.

2) The State :
It can play an important role by channelizing the energies
of its organs towards consumer protection and
satisfaction. They are

1) Legislature
2) Executive
3) Judiciary
3) Consumers Associations:

They can play an important role in making consumers

achieve satisfaction. The consumers can be awakened,
educated and organised to avoid their own
victimization against the malpractices of business.

4) Consumer:

The consumer must be alert, and on his toes. When

he finds himself being cheated in the market place he
should not say “ forget about it” rather he should
believe in “self-help is the best help”.
 Federal Communications Commission (FCC)

 Indian Association of Consumers (IAC)

 International Organization of Consumers Union

(IOCU)

 Consumers Guidance Society of India (CGSI)

 Jagrut Panchayat (JP)

 Advertising Standard Council of India (ASCI)

Consumerism helps in :

1) Make the business community more honest efficient,

responsive and responsible by adopting fair trade
practices.

2) Consumerism is an opportunity for businessmen to

serve the consumers in a better and more efficient
manner. So that, it will be a effective tool to implement
the societal concept of marketing.

3) In case of imperfections in the demand and supply

situation in the market, concerned marketers can help
the consumers to get rid of the traders who resort to
practices such as hoarding, black marketing etc.,

4) Consumerism will also ensure that the government

takes the necessary measures to protect consumer
interests by guaranteeing their legal rights.
Customer Profiling :

Every human being by his behaviour throw up a picture about

himself over a period of time.

This picture shows his values, habits, preferences, activities,

exposures and attitudes. We can call this is profile of the
person.

If a marketer can select a group of persons, compile and

average their individual profiles, a marketer even get the
average profile of the group itself.

Such information would be useful for a variety of people and

purpose.
Customer Profiling :

Marketers try to capture the pictures of their prospective

customers in terms of his values, habits, preferences,
activities, exposures and attitudes and compile those to
generate the average customer and what he wants.

The profile information obtained should lead to clues on

how to reach the customer and communicate with
him.

The profile also should indicate what motivates the

customer, what are his preferences and the why of it.
 It helps to develop your marketing activities and programs. Especially
with customers you want to keep buying your products or
services.

 A profile of your key customers, includes information that helps you

understand what is important to them. As well as their buying
behaviour, interests and attitudes.

 Initially it does take a little work to build the profiles, however it is

quite easy to then update and maintain the database.

 Benefits of Customer Profiling:

 1) Better Communication
 2) Reduces Competition
 3) Increases Profit
 4) Brings In More Customers
There are two type of situation in marketing where it is
useful to take up a study of consumer profile

1) At the Concept situation or stage : The stage at

which an idea or concept is ready but not the product,
the marketer would like to know in what form the
consumer is likely to accept the product or service.

2) Competitive Product situation : As distinct from

the “concept” situation, many times we have a situation
where the product is already in the middle of the
competition. Here the marketer would like to know
how his share can be increased and how he can reach
and communicate more economically and effectively.