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Business Research Methods - Consumer Empowerment - assignment 1

Consumer Empowerment in Malaysia

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Business Research Methods - Consumer Empowerment - assignment 1

  1. 1. 1. Table of Contents Consumer Awareness and Knowledge Influencing Consumer Behaviors:Case of Mobile Phone Users for Secondary SchoolStudents in Cyberjaya, Selangor. 2 Abstract.........................................................................................................2 1. Introduction............................................................................................2 1.1 Background of the Study.................................................................................................. 3 1.2 Problem Statement ........................................................................................................... 4 1.3 Research Question (RQ)................................................................................................... 5 1.4 Research Objective (RO) ................................................................................................. 5 1.5 Scope of Research............................................................................................................ 6 2. Literature Review...................................................................................6 2.1 Introduction...................................................................................................................... 6 2.2 Consumer Behavior Defined............................................................................................ 7 2.3 Relationship of Consumer Awareness ............................................................................. 8 2.4 The importance of Consumer Knowledge ....................................................................... 9 2.5 Overview of Malaysia Demographic Characteristics..................................................... 10 2.5.1 Population size ........................................................................................................ 10 2.5.2 Ethnic composition, distribution, age structure, gender and growth rates .............. 10 2.6 Malaysian Consumers versus Developed Countries ...................................................... 11 2.6.1 Knowledge and Education...................................................................................... 11 2.6.2 Ethnocentrism ......................................................................................................... 11 2.6.3 Consumer confidence.............................................................................................. 12 2.7 Awareness - Consumer Rights ....................................................................................... 12 2.8 Types of Consumer Rights............................................................................................. 13 2.9 Larger context of Consumer Knowledge ....................................................................... 14 2.9.1 Consumer Protection, Consumer Association, NGO’s ........................................... 14 2.9.2 The National Consumer Policy (NCP) ................................................................... 15 2.9.3 Consumer-related legislations................................................................................. 15 2.9.4 Consumer Redress................................................................................................... 16 2.10 Theory......................................................................................................................... 17 2.11 Conclusion.................................................................................................................. 17 References...................................................................................................19
  2. 2. BMBR5103 – Consumer Awareness & Empowerment Nor Helmee Bin Abd Halim 2 Consumer Awareness and Knowledge Influencing Consumer Behaviors: Case of Mobile Phone Users for Secondary School Students in Cyberjaya, Selangor. Abstract This study attempts to examine the current level of consumer awareness and consumer knowledge (through education) which have influenced consumer behaviors of secondary school students in Malaysia. The focus primarily on secondary school students is mainly because the young age between 15 to 17 years old is the critical stage of consumerism knowledge before they enter a more challenging stage in their life. The result indicates that consumer awareness and knowledge have significant impact on consumer behaviors, while lack of awareness and knowledge resulting in ignorant, and unable to act and decide effectively towards consumerism challenges in the daily life. 1. Introduction Phillip Kotler in his Marketing Management publication defines consumerism as a social movement seeking to augment the rights and powers of consumers in relation to sellers (Kotler, 2002). The concept of “rights” or consumer rights is an entitlement that a consumer enjoys at the marketplace whereby “powers” or consumer empowerment is a physical act which enables consumers to put into effect of their own choices through demonstrating their needs, wants and demands in their decision-making with other individuals or organizational bodies in the marketplace (Wright et al, 2006). Brennan and Coppack (2008) mention in the study that empowerment is a key concept in relation to consumer education. They concluded the research as “to become confident and empowered consumers, it was necessary that consumers were advised, informed and educated”. These are the three vital elements in consumer empowerment. They added that consumer education delivers the skills, attitudes, knowledge and understanding necessary to become an effective consumer, and enables consumers to use information and advice effectively and “know how” to access both.
  3. 3. BMBR5103 – Consumer Awareness & Empowerment Nor Helmee Bin Abd Halim 3 Consumer’s empowerment, awareness and knowledge are put to test every day as decision making becomes more complicated. Consumers are vulnerable to a lot of consumer issues if they are lacking in consumerism knowledge. At the same time, consumers need to be empowered, as such they are able to act, make effective decisions and protected (Mohamad Fazli Sabri, 2014). In general, consumer awareness, knowledge, consumer protection and consumer behaviors are inter-related and important since it permits the consumer to get the most from what they buy, to make the right choice and decision, and at the same time empower consumer to address consumer rights and aware of the establishment of various channels for consumer redress. 1.1 Background of the Study Today, in the era of globalization, the advent of Internet technology, e-commerce, online shopping and social media, all consumers regardless of age categories are served 24 hours a day to a variety of products, goods, services, individuals and enterprises offering services. The overwhelming information has put a great challenge on the consumers to make the right choice and decision. Consumers are facing with mass-marketing tactics, high-pressure salesman as well as appealing advertisement as to add more pressure in the challenge (Fazli Sabri, 2014). Various parties, including Malaysian government and various consumer associations have joined efforts with one goal to protect consumers in the marketplace. However, the initiative is meaningless when consumers do not have sense of consumer awareness of consumerism, especially not knowing the basic of consumer knowledge, consumer’s rights, and consumer’s protection entitlement in the marketplace, and not attaining the right level of consumer education (Haron & Masud, 2012). In relation to the previous studies, consumerism definition and concept defined by other researchers for instance, Sharma, N (2013), defines consumer awareness as the practice where consumers are aware of what they are buying and understand and knowledgeable of their rights as a customer, while Haron and Masud (2012) indicates consumer protection comes in the forms of enforcement of laws and regulations, as well as establishment of various channels for consumer redress in light of protecting consumer rights.
  4. 4. BMBR5103 – Consumer Awareness & Empowerment Nor Helmee Bin Abd Halim 4 Mulvihill (1972), in his research, defined consumer behavior is a collection of organized processes and meaningful responses on how consumer use to select, secure, use and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the consumers in the marketplace and the underlying motives for those actions. In an analysis of relationship between consumer awareness and consumer behavior, Haron and Masud (2012) found that some people choose not to assert their rights as consumers such as making complaints or seeking redress, when they feel that they do not know enough about their rights and the mechanics, and channel of seeking redress. In other words, consumer awareness and knowledge via education is a precursor to consumer actions, thus, ensuring consumer suaveness and resiliency in the market. This finding is relevant to previous finding by Kaplan (1991), the state of one’s knowledge about an issue, significantly impacts upon one’s decision making. People dislike, thus tend to avoid situations where they have insufficient knowledge to guide their behaviors and where the possibility of confusion is great. This explains the ground for some people with a minimum degree of consumer awareness and knowledge falling prey to fraud and act nothing like making complaints or seeking redress. 1.2 Problem Statement Prime Minister of Malaysia, Datuk Seri Najib Abdul Razak said that Malaysia is set to attain developed nation status by 2018, two years earlier than the targeted 2020. The country has seen a steady increase in the standard of living and its purchasing power (Hasan Saaid, 2013). Indirectly, it translates to more opportunities as well as greater consumerism challenges in Malaysia. In light of this perspective, there are few problems that need to be addressed before the developed nation status can be achieved. Some adults Malaysian may have experience some embarrassing moment where they could not answer simple question like; “How many types of consumers rights we have?” This is a true fact about consumer awareness many developing countries including Malaysia. Meanwhile, different researchers quoted that, “although consumer’s
  5. 5. BMBR5103 – Consumer Awareness & Empowerment Nor Helmee Bin Abd Halim 5 NGO in Malaysia has supported the consumerism education since early 1970s, the consumer awareness of Malaysian is still very low, not many Malaysian knows and understand their right as a consumer” (Mazlan, Redzuan, & Abu, 2014). Mazlan, Redzuan and Abu (2014) also found that there is no consumer education in the streamline education system whether in primary, secondary or tertiary level. In contrary, consumer education starts from kindergarten for some developed country like Scandinavia and most of the European countries have a proper consumer education system at various age group in their streamline education system (Consumers Affairs Victoria, 2003). Without an effective consumer awareness program and comprehensive consumer education program in our streamline school education system, the perception, knowledge and behavior of Malaysian consumer will not improve and therefore, it is important to address the issue which prioritizing on the young people. As such, the research study aims to determine the effect on consumer behavior by assessing the level of consumer awareness and consumer knowledge among secondary school students. The outcome of the study is important in developing an education program to improve consumer knowledge in the secondary school syllabus. 1.3 Research Question (RQ) The following are research questions in this study: 1. How does consumer awareness influence consumer behaviors? 2. How does consumer knowledge significantly influence consumer behaviors? 1.4 Research Objective (RO) The objectives of the research are: 1. To measure the co-relation between consumer awareness and consumer behavior among secondary school students.
  6. 6. BMBR5103 – Consumer Awareness & Empowerment Nor Helmee Bin Abd Halim 6 2. To assess the impact of consumer knowledge on consumer behavior among secondary school students. 1.5 Scope of Research The scope of this research focus on secondary school students in Cyberjaya, Selangor. The scope is for student age between 15 to 17 years old from SMK Cyberjaya. Consent and approval to conduct the research is obtained from the Sepang District Education Officer. 2. Literature Review 2.1 Introduction The popularity of digital devices among younger consumers has generated enormous attention among marketers. Tablets, mobile phones or smartphones have become common things among millions of young consumers around the world. These young people are continuously looking for opportunities to purchase mobile phones for use in their everyday activities. The mobile phone popularity revolves around convenience, business, recreation, and safety. It provides young people with almost instant communication to family members and friends, information searching well as making simple purchases like prepaid mobile phone credit (Torlak, Spillan, & Harcar, 2011). According to Torlak, Spillan and Harcar (2011), the fact that so many teenagers have been involved in the selection and purchase of mobile phones has motivated various researchers to investigate the usage of mobile phones among this demographic group. The rapid adoption of mobile phone technology by teenagers has been studies by various researchers (Thrane, 2003; Rice and Katz, 2003, Wilska, 2003; Haddon, 2004; and Dedeoglu, 2004). These studies indicate that a youth’s involvement in purchasing a mobile phone is a critically issue relating to how, when, and to what extent the mobile phone is used. Those researchers interested in this group have found that this market has great potential. Lindstrom (2003) has described the teen market as one of the richest generations in history. Today, the discovery of consumer behaviors towards products becomes important to all level of ages including teenagers. As many previous researchers have suggested that consumer
  7. 7. BMBR5103 – Consumer Awareness & Empowerment Nor Helmee Bin Abd Halim 7 behaviors can be influenced by many factors like demographics, culture and social environment, lifestyle, buying power, ethnocentrism and so on. In this study discusses the relationship between consumer awareness and consumer knowledge with consumer behaviors. 2.2 Consumer Behavior Defined Consumer behavior involves studies, which look into how people decide to buy things, what they choose to buy, where they prefer to buy it, why and when they buy it. It is a mix of psychology, sociology, anthropology, and economic elements (Muniady, Al- Mamun, Permarupan, & Zainol, 2014). While earlier researchers, Jacoby, Johar and Morrin, (1998) defined consumer behavior as the “acquisition, consumption and disposition of products, services, time and ideas by decision making units”. The academic field of consumer behavior has long been associated with the marketing discipline. Growth in the study of consumer behavior was fueled in the late 1950s by a set of commissioned studies on the state of business education. The conceptualizations of consumer behaviors focused on consumers as buyers and hence emphasized consumer behavior as buyer behavior (MacInnis & Folkes, 2010). The same researchers (MacInnis & Folkes, 2010) also conducted an important research on debate whether consumer behavior should be an independent discipline and they concluded that consumer behavior is not an independent discipline or independent variable. In relation to marketing discipline, Kotler (2002) mentioned that consumer behavior has an important role in business markets and therefore it is imperative for marketers to have in depth knowledge and understanding of consumer behavior particularly. There are four factors as described by Kotler which are cultural (culture, subculture, and social class), social (reference groups, family, and social roles and statuses), personal (age, stage in the life cycle, occupation, economic circumstances, lifestyle, personality, and self-concept), and psychological (motivation, perception, learning, beliefs, and attitudes). Research into all of these factors can provide clues as to how to reach and serve consumers more effectively.
  8. 8. BMBR5103 – Consumer Awareness & Empowerment Nor Helmee Bin Abd Halim 8 2.3 Relationship of Consumer Awareness Consumer awareness is more about marketing term. It means that consumers note or are aware of products or services, its characteristics and the other marketing P’s (place to buy, price and promotion). Usually commercials and ads increase consumer awareness, as well as “word of mouth” (Wadhe & Ghodke, 2013). Many studies indicate that consumer awareness impose significant impact on consumer behaviors. (Ishak & Zabil, 2012) indicate in their study that consumer awareness influence consumers behaviors while lack of awareness leads to ignorant and reduction of individual capacity in consumer empowerment and protection. This notion is also supported by few other researchers confirming the findings (McEachern & Warnaby 2008; Hartlieb & Jones 2009; Liang & Xianyu 2008; Donoghue & de Klerk, 2009; Thomas & Mills 2006; Chartrand 2005; Coulter et al. 2005; and Dommeyer & Gross 2003). Chartrand (2005) stated that consumer awareness is an element that appears in the human automatic process. The automaticity can involve conscious or unconscious course of actions. The process is comprised of environmental features; automatic process and outcome. According to Chartrand (2005), consumer awareness (either consciously or unconsciously) precedes the control, modification, elimination and change in human behaviour (consumer behaviour) and decisions. Meanwhile, Dommeyer and Gross (2009) examines the role of customer awareness in the area of consumers private information invasion by direct-marketers found that male and younger people have more awareness on privacy-related laws and practices. As a result, these groups of people have adopted specific strategies to protect themselves from the invasion syndicate. Another study conducted in Malaysia covering consumer awareness on the health effect of mobile phone usage mentioned that consumers in Malaysia have started to raise health concerns on the impact of radio-frequency radiation. Several studies have shown that prolonged exposure to radio-frequency radiation may result in insomnia, dizziness, headaches, and earaches. As a result of the increased on awareness and concerns of the health issue, the government and mobile service providers in Malaysia have been working closely to ensure that providers following the standard
  9. 9. BMBR5103 – Consumer Awareness & Empowerment Nor Helmee Bin Abd Halim 9 guideline for installing and deploying equipment that related to radio-frequency radiation exposure (Yeow, Yen Yuen, & Connolly, 2008). 2.4 The importance of Consumer Knowledge The aim of consumer knowledge has been mainly to teach and educate people to act as informed, rational and prudent consumers. A previous research on the importance of consumer knowledge among young people mentioned that consumer knowledge is taught at different age across the globe via formal education. Most of the developed countries started to educate their young people as early as at five years old referring to well-established education system in Scandinavia (Consumer Affairs Victoria, Australia, 2003). Comparing to developing country like Malaysia, according to Mazlan et al., (2014) there is no formal consumer education in the streamline education system whether in primary, secondary or tertiary level. In a different study on consumer knowledge specifically about consumer legislations mentioned that in order to be empowered, savvy and resilient consumers, it is important for consumer to be equipped with an elevated level of consumer knowledge and skills. Without the necessary understanding and knowledge of the laws and regulations, consumers will be exposed to fraud or will may receive unfair treatment from service providers or traders. Consumer protection and legislations are always associated with government as the enforcer and local consumer association, however, the consumers must ensure that they are aware and well educated on how to make complaint or know which channels to go for consumer redress for intance (Fazli Shaari, 2014). There is also proven relationship between consumer knowledge and purchase behavior. (Mceachern & Warnaby, 2008) conducted a study on this relationship found that knowledge in terms of product knowledge plays a significant role in aiding purchase decisions. The research covers the role of the product label or product information as labelling communications to customers that attracts as well as influence consumer purchase behavior. The result of the study found that consumers today preferred products which are quality-centred, welfare friendly and organic brands.
  10. 10. BMBR5103 – Consumer Awareness & Empowerment Nor Helmee Bin Abd Halim 10 2.5 Overview of Malaysia Demographic Characteristics Malaysia is a federal constitutional monarchy, consisting of thirteen states and one federal territory encompassing the city of Kuala Lumpur, Labuan and Putrajaya in Southeast Asia. It consists of two parts separated by the South China Sea and bordered by Brunei, Indonesia, and Thailand. The chief of state is the King and the head of government is the Prime Minister. Malaysia is a multi-racial, multi-ethnic and multi-religious nation, with Malay, Chinese and Indian ethnic groups. In religious terms, it is predominantly Islamic, but with strong Christian, Buddhist and Hindu communities. In terms of economic welfare, Malaysia ranks second in Southeast Asia, after Singapore. In 2014, Gross Domestic Product’s (GDP) composition by sector was estimated to be 56% in services, 34.7% in industry and 9.3% in agriculture (CIA World Factbook, 2015). 2.5.1 Population size According to the Statistics Department, Malaysia’s population has more than tripled since it was formed in 1963. Back in 1957 when Tunku Abdul Rahman shouted “Merdeka” seven times in the newly–built Stadium Merdeka on August 31st, there were just 6.3 million Malayans. As of July, 2015, the total population is estimated to be 30,513,848 with Malays form the largest segment of the population. The Malaysian population continues to rise at a pace of 1.44% per annum as per 2015 data (Department of Statistic Malaysia, 2015). 2.5.2 Ethnic composition, distribution, age structure, gender and growth rates Based on the last census conducted in 2010, distribution of ethnic groups for Malays was 50.1%, Chinese 22.6%, indigenous 11.8%, Indians 6.7%, other 0.7% and non-citizens 8.2% of the total population. The population distribution is uneven, with over 20 million of 31 million citizens concentrated in Peninsular Malaysia. Based on July 2014 data prepared by Department of Statistics Malaysia, almost 70% of the population are aged 15 to 64 years old. Lastly, sex ratio of the entire population is 1.03 males (s) /female and life expectancy at birth for male is 71.74 years and female 77.48 years (Department of Statistic Malaysia, 2015).
  11. 11. BMBR5103 – Consumer Awareness & Empowerment Nor Helmee Bin Abd Halim 11 2.6 Malaysian Consumers versus Developed Countries Lau (2011) indicates that the Malaysian consumer market has been growing steadily over the last few decades. The dynamic growth of population and purchasing power signify the vast potential of a consumer market in Malaysia. Consumer lifestyles have been evolving and changing, due in part to rising affluence and education levels. High profile international retailers and the advent of global mass media have also played a hand in shaping consumer-buying behavior. In general, Malaysians are becoming more westernized, sophisticated and universal in their outlook of consumerism. In April 2015, the implementation of the Goods and Services Tax (GST) has, indirectly, taken consumer awareness in Malaysia a few notches higher. It is not too far-fetched to say that the new consumption tax has triggered some semblance of a paradigm shift in consumerism in this country. Local consumer activists note that besides exercising more caution in their spending, the people are also doing their own research and comparing prices to find out where they can buy competitively-priced goods. (Ministry of Domestic Trade, Co-operatives and Consumerism, 2015). 2.6.1 Knowledge and Education In terms of consumer rights awareness, as reported in Consumer Profile Research conducted by MDTCC, revealed that only half Malaysian consumers are properly aware of their rights. It means, Malaysian consumers are generally less educated, especially youths or young people. Local consumers are unaware of their rights to protection from items, manufacturing processes and services that endanger their health and lifespans. In addition to that, Malaysian is also lacking of knowledge on rights to a clean and healthy environment, consumer education, security and information (Mazlan et al., 2014). According to Benn (2004), developed countries, consumers including youths are well educated and more particular about their rights while traders are more responsible. 2.6.2 Ethnocentrism Other important differences between Malaysia as developing country and developed countries are ethnocentrism and nationalism. Anuar, Shah, and Ibrahim (2012), found that Malaysian
  12. 12. BMBR5103 – Consumer Awareness & Empowerment Nor Helmee Bin Abd Halim 12 consumers depending on several demographic variables are tend to be more ethnocentric than those in developed countries. In developed countries, price, quality, durability and other product- related aspects are the major factors that influence buying decisions. 2.6.3 Consumer confidence The other important element in behavioral differences and consumer confidence is “halal” product consumptions. Islam is constitutionally the country’s official religion with 61.3% of 30 million population plays an integral part of the Malaysian Malay culture. Therefore, selecting and ensuring products are halal has major influence in local consumer behavior. As compared to westerners or non-Muslim countries, halal may not give significant impact towards consumer behavior, however, empirical study shows that halal products are rising in popularity among non-Muslim consumers globally due to the increase among the health-conscious grocery stores (Muslim & Student, 2013). 2.7 Awareness - Consumer Rights The term “consumer rights” has been part of business literature since it was employed by President J.F. Kennedy in his address to the United States Congress in 1962. Since then, it has provided a basis for policy development by various supranational organizations, including the European Union, the OECD and the United Nations (Harland, 1987). Consumer rights cover many areas from food issues, housing, public transportation, human rights, public policy, education as well as healthcare services provided in any country. According to Garman (2003), a right is an entitlement to something or to be treated in some special ways. It adverts to a set of regulations and laws that has a principal aim to secure the defense of any type of consumer situations in which does not respect consumer’s power. As such, provisions of consumer rights are critical as they empower people to protect themselves in the marketplace.
  13. 13. BMBR5103 – Consumer Awareness & Empowerment Nor Helmee Bin Abd Halim 13 2.8 Types of Consumer Rights In 2005, Matthew Hilton published a paper outlining 1962’s President Kennedy Consumer Bill of Rights. The four basic consumer rights that should act as the guiding principles for legislative and voluntary action are: 1. the Right to Safety – to be protected against products, production processes and services which are hazardous to health or life; 2. the Right to be Informed – to be given the facts needed to make an informed choice, and to be protected against dishonest or misleading advertising and labelling; 3. the Right toChoose – to be able to select from a range of products and services, offered at competitive prices with an assurance or satisfactory quality; and 4. the Right to be Heard – to have consumer interests represented in the making and execution of government policy, and in the development of products and services. These four rights were also adopted by the Consumers Union set up in 1960 and subsequently called Consumers International and have become the core principles of various national consumer movements around the world (Hilton, 2005). By 1983, the differing concerns between North and South saw the expansion of the four to eight consumer rights (Garman, 2003; Fernandez, 2004). 5. the Right to Redress – to receive a fair settlement of just claims, including compensation for misrepresentation, shoddy goods or unsatisfactory services; 6. the Right to Consumer Education – to acquire knowledge and skills needed to make informed, confident choices about goods and services, while being aware of basic consumer rights and responsibilities and how to act on them; 7. the Right to a Healthy Environment – to live and work in an environment which is non-threatening to the well-being of present and future generations; and 8. the Right to Basic Needs – to sustain access to basic, essential good and services; adequate food, clothing, shelter, health care, teaching, public utilities, water and sanitation.
  14. 14. BMBR5103 – Consumer Awareness & Empowerment Nor Helmee Bin Abd Halim 14 2.9 Larger context of Consumer Knowledge 2.9.1 Consumer Protection, Consumer Association, NGO’s Consumer protection has been a problem ever since the outset of trading 10,000 years ago. In Malaysia, continuous effort is held out by various parties to assure efficient and comprehensive protection of consumers in the marketplace. Consumer associations such as the Consumer Associations of Penang (CAP), the Muslim Consumers Association of Malaysia (PPIM), and the commonly known non-governmental consumers’ organization, the Federation of Malaysian Consumers Associations (FOMCA) have been actively defending the consumer interest in the market through advocacy, lobby for policy change and consumer education. The Malaysian government has made consumer protection as one of the top national priorities (Haron & Masud, 2012). A considerable amount of literature has been published on consumer protection. Mohd Fazli Sabri (2014), mentioned that wider understanding of consumer protection encompasses the laws and regulations ensuring that interaction between service providers and consumers are fair. Consumer protection seeks to defend and protect consumer interests. Consumer protection in Malaysia is carried out in a variety ways such as formulation and implementation of national policies pertaining to consumer protection; the enforcement of existing legislations related to consumer protection and the formulation of new legislation and amendments to old laws. In 1990, the government established The Ministry of Domestic Trade and Consumer Affairs (MDTCA), which was then renamed as The Ministry of Domestic Trade, Cooperatives and Consumerism (MDTCC) in 2009. The aim of the Ministry is to balance the interest of both sellers and consumers. The responsibilities include monitoring domestic trade, advocating and protecting consumer’s rights, protection of intellectual properties as well as registration and governance of businesses (Ministry of Domestic Trade, Co-operatives and Consumerism, 2015). Subsequently, a few new consumer-related legislations (e.g. Consumer protection Act 1999) have been implemented, the launching of The National Consumer Policy (NCP) in 2002, and new agencies have been established since 1990s.
  15. 15. BMBR5103 – Consumer Awareness & Empowerment Nor Helmee Bin Abd Halim 15 2.9.2 The National Consumer Policy (NCP) The National Consumer Policy or Dasar Pengguna Negara (DPN) was established on 26th July 2002 to instill self-protection by the consumers, self-regulation by the traders and manufacturers, and to achieve an effective consumer protection level, which will provide conducive environment for the formation of a fair market and sustainable development in tandem with the local and global economic developments (Ministry of Domestic Trade, Cooperatives and Consumerism, 2015). The goal of NCP is to improve the quality of life of the people who are also consumers. A comprehensive policy is defined to ensure consumers and traders play their roles and perform their respective responsibilities for the sustainable economic growths of the country. In summation, it proposes to create an ethical, self-regulating, responsible and honest trading community in relation to consumer welfare and wellbeing of the consumers. 2.9.3 Consumer-related legislations Consumers in Malaysia are protected by various laws and rules. There are a number of consumer- related legislations which have been enforced in an endeavor of installing a more consumer- favorable market in Malaysia. 2.9.3.1 Consumer Protection Act (CPA 1999) The Malaysia’s Consumer Protection Act 1999 (CPA) is an act which came into effect on 15th November 1999. The primary aim is to provide greater security for consumers and its provisions cover areas that are not handled by other existing laws. The Act provides simple and inexpensive redress of consumer grievances, and relief of a specific nature. The Tribunal of Consumer Claims was set up under this Act and an aggrieved consumer may refer any difference of opinion or claim that does not exceed RM 25,000 to this tribunal. 2.9.3.2 Price Control and Anti Profiteering Act 2011 (Act 723) Price Control Act 1946 (Act 121) is among the earliest legislation to protect consumers. It was ordained by the colonial government in Malaya and aimed at controlling prices and rising prices. The Act underwent no less 40 amendments. It was later revised in 1973 as Act 121, and regardless
  16. 16. BMBR5103 – Consumer Awareness & Empowerment Nor Helmee Bin Abd Halim 16 of the imposition of price control, prices of goods kept rising above the controlled price (Mohamad Fazli Sabri, 2014). The Act then abolished and replaced by the new Price Control and Anti Profiteering Act 2011 (Act 723) to include anti-profiteering. This Act empowers the Minister of Domestic Trade and Consumerism to determine prices and charges, and the mechanism to determine if the profit is unreasonably high (Law of Malaysia Act 121). 2.9.3.3 Hire Purchase Act 1967 In Malaysia, the law on hire purchase is governed by the Hire Purchase Act 1967 which came into force on 11th April 1968. It forms the legislation that governs hire purchase transactions in Malaysia, regulating and controlling the form and contents of hire purchase agreements. The Act imposes fines and imprisonment, with the office of the Controller of Hire Purchase as the enforcement agency (Law of Malaysia Act 212). 2.9.3.4 Other Legislations There are many other legislations primarily protecting Malaysian consumers. Among the legislations are Sales of Goods Act 1957; Contracts Act 1950; Control of Supplies Act 1961;Trader Descriptions Act 1972; Food Act 1993; Direct Sales and Anti-Pyramid Scheme Act 1993; Communication and Multimedia Act 1998; Consumer Protection (Safety Standards for Toys) Regulations 2010; Consumer Protection (Certification of Approval and Conformity Mark of Safety Standards) Regulations 2010; Malaysia Code of Advertising Practise 1990; and Persona Data Protection Act 2010 (Mohamad Fazli Sabri, 2014). 2.9.4 Consumer Redress One of the most important components in consumer protection law is establishing a proper system of resolving consumer disputes or problems with goods or services. The establishment of the Tribunal for Consumer Claims in 1999 and the Tribunal of Homebuyer Claims in 2002 are the two major highlights in the development of consumer protection law in Malaysia (Amin, 2007).
  17. 17. BMBR5103 – Consumer Awareness & Empowerment Nor Helmee Bin Abd Halim 17 2.9.4.1 Tribunal for Consumer Claims Malaysia (TCCM) The Tribunal for Consumer Claims Malaysia (TCCM) is an independent judicial body established under the Consumer Protection Act 1999. The enforcement of TCCM is on the same date as Consumer Protection Act 1999, which is on 15th November 1999. It is below the jurisdiction of the Ministry of Domestic Trade and Consumer Affairs. The main part of the TCC is to try and settle claims filed by consumers under the CPA. The claim includes claims relating to supply of foods, supply of services and unfair trade practices such as misleading advertisements, misleading price indications and so forth, provided that the claim does not exceed RM 25,000 (Amin, 2007). 2.9.4.2 Tribunal for Homebuyers Claims (THC) The Tribunal was established under the Housing Development (Control and Licensing) Act 1966. The objective is to provide better protection to home buyers in Peninsular Malaysia. The main function of the THC is to resolve complaints on housing-related problems which have been a major consumer’s complaints in Malaysia for the past many years. THC’s jurisdiction is restricted to the claims made by homebuyers and the amount of which does not exceed RM 50,000 (Mohamad Fazli Sabri, 2014). 2.10 Theory Many researchers agree that knowledge can influence human decisions or actions. Ajzen’s theory of Planned Behavior (TPB) explained the relationship between knowledge and consumer behaviors. In the theory argues that individual attitudes and opinions are influenced by knowledge. As such, the study which determines how consumer awareness and education influence consumer behavior is in line with Planned Behavior Theory (Ishak & Zabil, 2012). 2.11 Conclusion In summary, there is positive relationship between consumer awareness and consumer knowledge with consumer behaviors. The greater consumer awareness and knowledge have better implication on how consumer behave towards any circumstances. Knowledge is the key concept in consumer empowerment, without knowledge, customer is vulnerable to any misconduct by traders or sellers in the marketplace. Knowledgeable consumer also enables consumer protection from any
  18. 18. BMBR5103 – Consumer Awareness & Empowerment Nor Helmee Bin Abd Halim 18 consumerism threats. On the opposite note, consumers hold the sole responsibility of learning, knowing, and mastering how to utilize their rights in order to stay safe in the market. In a different perspective, Malaysian government and other consumer associations must double the current effort, especially on providing consumer education at all levels. The Ministry of Education and other relevant parties must also revisit the current streamline school education system to ensure consumer related education is part of the syllabus. Aggressive awareness campaigns should also be considered to assure consumers are receiving the correct message. [Word count - 5756]
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