3. General Principles
• Marketing an age old exchange process
• Shifting of powers from sellers to buyers, thus
becomes more complex
• Need to understand the buyers
• Plus there is a technological advancement
No time place barrier, can buy anywhere, anytime
4. Wider
choices to
World market
Global village customers
across the
world
Role of government to make exchange process simpler
POLICIES AND LEGISLATION
Exercise
control
Need to evolve
business legislation
4 Ps within the
Marketing laws
5. Introduction
• Different countries follow different types of law
– Common law
– Civil law
– Religious law
• In India civil law system is followed which is a
legacy from British rule
– Enforced at central, state and local level
• Local laws enforced through municipal corporation, district
authorities
6. Types & Levels of Laws
• India laws are categorized into
• Business and corporate
• Criminal
• Tax
• Public utilities
• National heritage & importance
• Procedural & administration
• Banking & insurance
• Environment
• Family & inheritance
• National security
• Consumer
• Labour
• Property
• Constitution
7. Laws & Marketing
• Why is there a need for BUSINESS LAWS?
– Protect consumers
– Protect business
– Protect society
8. Marketing Process
• What is marketing?
• success of any product depends on marketing
• Understanding consumer needs and wants
• Taking the right product, right consumer, right
place and right time
– AN EXCHANGE PROCESS
– IT IS A TRANSACTION
– INVOLVES BUYERS AND SELLERS
9. Transaction- A Legal Relationship
Money flow
Communication
Enquiry
SELLER Offerings
BUYER
Order
Product flow
Proposal and acceptance
Consideration
Capacity of parties for contract
CONTRACT ACT, 1872
Free Consent
Documentation
An agreement should not be void
10. Marketing Mix & Legal Obligations
Product
Price Planning needs to be
Done in the framework
Marketing Of legislation
Mix Elements
Promotion
Place
11. Marketing Mix & Legal Obligations
Product – design, models, features, volume, packaging,
brand, quality
Price – list prices, discounts, allowances, commissions,
payment terms
Marketing Mix Elements
Promotion – public relations, advertising, sales
promotions, direct marketing
Place –
channel, geographical, coverage, storage, assortment, invent
ory, transportation
12. Mtkg Strategies & Legal Framework
• Consumer protection
• Promoting healthy competition
• Environmental protection
IGNORANCE OF LAW IS NOT AN EXCUSE FOR ANY MARKETING MANAGER
13. Case Studies
Business legislation cases
• Consumer protection
– Ghutka and pan masalas
– First came impurities in bottled mineral water.
– Then pesticides in soft drinks.
– Worms in chocolates.
• Social cost
– Pollution emission from motor vehicles
• Protecting Businesses
– Registration of names [rediff, Yahoo India…]
14. Indian Law
• Indian law is the oldest legal systems in the world
• Source of Indian law is the ‘Indian Constitution’
which in turn gives due recognition to statutes, case
law and customary law consistent with its obligations
• Legislatures of Parliament, State Legislatures and
Union Territories enact the laws
• Besides this there is a vast body of laws knows as
subordinate legislation in the forms of rules,
regulations, laws and by laws
15. Indian Marketing Laws
• Consumer Protection Act
• Monopolies and Restrictive Trade Practices Act
• Competition Act
• Essential Commodity Act
• Sales of Goods Act
• Hire- Purchase Act
• Indian Contract Act
• Negotiable Instruments Act
• Bureau of Indian standards Act
• Standards of weights and measures Act
• Prevention of food adulteration Act
• DPCO
• Patent Act
• Copyright Act
• Trademark Act
• Design Act
• Geographical Indication of goods Act
• Drugs & Cosmetics Act
16. Indian Marketing Laws
• SEBI Advertisement guidelines
• Drugs and Magic remedies act
• Cable TV networks Act
• Pre natal diagnostic techniques Act
• Cigarette and other Tobacco products Act
• Warehousing corporation Act
• Motor Vehicles Act
• Carriage by Air Act
• Carriage of goods by Sea Act
• Multi modal transportation of goods Act
• Central Excise Act
• Central sales tax Act
• Jute Packaging Materials Act
17. Why Consumer Protection Act?
• Consumer has a right to
– SAFETY
– INFORMATION
– CHOOSE
– BEHEARD
– REDRESSAL
– CONSUMER EDUCATION
– It’s a common mans civil court
18. Consumer Protection Act, 1986
• Exclusively in the interest of the consumers
• Seeks to promote rights of the consumers
• Applicable to all states except J & K
• Speedy, simple and inexpensive redressal of
consumer grievances
• The provisions are compensatory in nature
19. Monopolies & Restrictive Trade
Practices Act [MRTPC]
• This law protects consumers and small industries and
traders against exploitation arising out of growth of
monopolies and consequent misuse of market
conditions by resorting to restrictive trade practices
by large business corporations and industry houses
with financial muscle and market dominance.
• This act protects the consumers directly
20. Monopolies & Restrictive Trade
Practices Act [MRTPC]
• This act also defines the unfair trade practices
• This act also defines restrictive trade practices which
are resulting into concentration of power, dominant
market position, exploitation of small businesses and
indirectly affecting the consumer
21. What are these Unfair Trade
Practices?...
• False representation of:
– Quality, composition, style/model of goods/
services
– False affiliation, misleading statements
– Warranties, guarantees without adequate tests
– Sale of substandard, hazardous goods
22. MRTP cont’d
• Restriction on:
– Sale of goods to certain persons
– Purchase & sale at stipulated prices
– Allowing concession/ benefits by way of discounts
– Resale prices
– Quantity, output and area of disposal of goods
– Resale prices with a result of elimination of
competition
23. Competition Act
• This repeals the MRTPC act which has become
obsolete in view of development in the Indian
and global markets
• This endeavors the shift of focus from the
restricting monopolies to promoting fair
competition
• Objective is to promote fair
competition, protect consumers, firms from
each other and interest of the society
24. CA, Some Highlights…
• Registration of restrictive trade practices
• Prohibition of anti competitive practices
– Price fixing
– Output restriction
– Bid rigging
– Market restriction
• Penalties upto 10% of average turnover
• Emphasizes on competition advocacy
25. Essential Commodities Act
• This act empowers the government to issue
orders for regulation, production, storage,
transportation, distribution of the essential
commodity in the interest of the general
public.
• This ensures availability of essential
commodities at fair prices, curbing the
hoarding, black marketing.
26. Essential Commodities Act
• Every offence is punishable under the act is
cognizable and non bailable.
• The offences against the individuals and
organizations are punishable by way of fines
and or imprisonment upto seven years
27. Highlights…cont’d
Production
Fees for issue
of licenses Distribution
and permits
Helps in regulation of
These…
Information Sales
Transaction
28. Highlights…
• Essential commodities..
– Cattle fodder, coal, components, parts of
automobiles
– Cotton and woolen textile
– Drugs ass defined in D&C act
– Food and edible oil
– Iron and steel
– Newspapers
– Petroleum/ products
– Raw cotton and jute
29. Sales of Goods Act, 1930
• Transaction of goods from ‘seller to buyer’
• Act of transfer of ‘property in goods’
• Change of title of ownership
• It’s a ‘Contract’ which may be absolute or conditional
• Ownership of goods to be immediately transferred
from seller to buyer
• Delivery or immediate payment not necessary, can
be done at future date
30. What Happens Here…
An offer from seller, acceptance by buyer
Stipulation of delivery terms, Immediate or future date
Payment terms- cash or credit
Act covers rights and duties of seller and buyer
CEVEAT EMPTOR- LET BUYER BEWARE
31. Hire- Purchase Act, 1972
Balanced
protection
hirer and
owner Hirer needs goods
Does not have money
Ownership Goods are
remains with offered on
owner till last Hire-
installment Purchase
In case of breach- Payment in
Termination of contract periodic
Seizure of goods installments
32. Contract Act, 1972
Conditions on communication, Post agreement of buying if goods are
acceptance, revocation of proposals, defective, unfit or dangerous, liability to
performance of contract, breach of compensate lies with seller
contract BREACH OF CONTRACT
Contracting parties to be competent [not Regulates conduct of parties to creation,
insane and above 18yrs] performance and breach of promises
33. Negotiable Instruments Act, 1881
• Deals with 03 kinds of instruments
– Promissory note
– Bill of exchange
– Cheque payable either to order or to bearer
High bearing on payment transactions with customer, suppliers
and banks by a business firm
34. Some More..
Standards of Weights & Measures
Bureau of Indian Standard Act, 1986 Act, 1976
• Sets standards for products, • Provides uniform weights
commodities, materials and and measures throughout
processes at national and the country
international level • Prescribes as per the metric
• Issues certification to system
products that meet certain • Safeguards the consumers
quality standards against unfair practices in
packaged goods
• Penalty is fine/
imprisonment
35. Prevention of Food Adulteration
Act, 1954
• Prohibits manufacture, sale and distribution of
not only adulterated food but also
contaminated food and misbranded foods
• Adulterated food can cause economic loss and
health hazard
36. DPCO
• Statutory price control for bulk drugs and
formulations
• Certain drugs known as scheduled drugs are
under price control
• Drugs not under price control can be freely
priced but under some restrictions
37. Patent Act, 1970
• Authorised right for limited period for
commercial exploitation
• It is form of industrial property
• Granted to new inventions, which are capable
of industrial applications
• Inventions to have novelty and utility
• Controller of patents grants patents right to
the patentee
38. Copyright Act, 1957
• Owner of copyright exclusive rights to multiply
copies of his work for commercial exploitation
• Negative rights to refrain from unfair practices
[illegal]
• Literary, dramatics, musical, computer
programming, artistic work, cinematographic
film, sound recording and so on..
39. Trademark Act, 1999
• Protection to the user of trademark on his
goods to prescribe conditions for acquisition
and legal remedies for enforcement of
trademarks rights
• Identified product and its origin
• Guarantees unchanged quality
• Advertises the product
40. Geographical Indication of Goods
Design Act, 2000 Act, 1999
• Features of shape, • Helps consumers from
configuration, pattern deception
• Allows registration of • Geographical names have
product to protect the acquired distinctiveness and
visual appearance of importance
manufactured products • Agricultural goods,
• Can gain a marketing edge manufactured goods, food
• Others cant use without an etc.
agreement
• Valid for 10 years
41. SEBI Advertisement Guidelines,
Drugs & Cosmetics Act, 1940 2000
• Controls mfg, store and • Protect investors from
selling of medicines and unscrupulous companies
cosmetics making offers in public
• Restrains mfg. to make false issues for equity shares and
and misleading claims for debentures
the drugs and cosmetics • Need to make certain
disclosures in their offers,
its mandatory
42. Drugs & Magic Remedies Act,
1954
• Provides restriction against
advertisement that claims Cable Television Networks
certain diseases Act, 1995
• Regulation on cable TV
network to curb undesirable
program and advertisement
Pre Natal Diagnostic Techniques Act, 1994
Specifies roles and responsibility of
Advertisers and prevents misuse of
media regarding pre natal determination of
services
Cigarettes & other Tobacco products Act, 2003
Bans advertisement, prohibits sponsorship of sports
And cultural events.
43. • Self Regulation of Advertisement through ASCI
[Advertising Standards Council of India]
– To control offensive content in advertisement
• Warehousing Corporation Act, 1962
– Regulation for the purpose of warehousing
• Motor Vehicles Act, 1988
– Regulation of motor vehicular traffic
– Maintenance of state registers for license, registration…
• Carriage by Air Act, 1972/ Sea Act, 1925
– Covers conventions relating to rights and liabilities of
carrier, consigner, consignee
• Multi Modal Transportation of Goods Act, 1993
44. • Central Excise Act, 1944
– Empowers govt. to collect levied tax called Excise
duty imposed on commodities produced and
products manufactured as per the act sections
– These cannot be removed till excise duty is paid
• Central Sales Tax Act, 1956
– Inter state sales
• Jute Packaging Material Act, 1987
– Stipulates use of jute
45. Consumer Rights & Consumer
Protection Law
Consumer Movement
International Scenario
Consumer Rights in India
Consumer Protection Law
Case Studies
46. • Rights – legally protected interest
• Interest- things which are to man’s advantage
• Unscrupulous marketers follow unfair trade practices
to cheat the consumers
• Growing Consumerism and host of consumer
protection laws to protect the consumers
• ‘ALERT CONSUMER’ is the best protected consumer
47. Consumer Movement
• Consumerism is an organised movement of
citizens and government to strengthen the
rights and power of buyers in relation to the
sellers
• Consumers feel, sellers have more power than
buyers
• Thus to have equal balance of power between
buyer and seller, need for consumerism
48. Govt.
involvement in
forming
policies
Guarding the Educates
interest against consumers to
unscrupulous become more
marketers alert
Consumerism
49. The International Scenario
• ECOSOC [Economic and social council]
– Laid down needs for poilicies and legislation
– Environmental concern
– Social and economic development
– Consumer alert, consume quality goods
50. Consumer Rights in India
Right to be
protected
Value for money Value for people
Satisfactio
n of basic informed
needs
Healthy Consum
environme er choose
nt Rights
education Be heard
redress
52. Consumer Rights
• Can also be classified as-
– Fundamental rights
– Constitutional rights
– Investors rights
– Medical rights
– Legal rights
53. Fundamental Rights
• Right to equality
• Right to freedom
• Right against exploitation
• Right to freedom of religion
• Cultural and educational right
54. Investors Rights
• Protect from investment brokers, other
middlemen apart from stock issuing
companies
• Internationally, ‘investors bill of rights’ passed
by various monitoring bodies and consumer
protection organizations
55. Investors Rights Medical Rights
• 3 tier qualifying process- • Why?
– Eligibility norms – Medical negligence
– Pre issue obligations of – Unqualified practitioners
companies
• Medical profession declared
– Post issue obligations of
companies as a service under this act
– All facts of illness
– Patient has right to ask
question to doctor
– Right to know doctors
Legal Rights
qualifications
Provide free and competent legal
Services to the weaker sections of the – Right to second opinion
Society – Right to be told in advance
Justice not denied to any citizen about operation
– Can make a choice of hospital
– Right to get case paper on
request
56. Consumer Protection Act, 1986
• Extension and coverage – all goods and
services, all sectors, provisions are
compensatory in nature
• Meaning of goods under CPA- Persons
[consumer of bank, telephone, electricity,
traveling by bus/ train..], services[hospital and
nursing, housing, construction…]
• Who is not held a consumer?...
• Redressal- uniform procedures, speedy grant
of copies..
57. CPA..
• Complaint filing procedure
– Name, description and address of complainant
– Name, description, address of opposite party
– Facts related to the complaint
– Supporting documents if any
– Relief that the complainant is seeking…
• Remedies granted under the act
– Simple, speedy and inexpensive redressal to the consumer
grievances
• Appeals
• Penalties
59. Trade Practices & Competition
Deceptive [unfair] Trade Practice
Restrictive & Anti Competitive Trade Practice
Counterfeiting
Indian Laws
Cases
60. Deceptive [unfair] Trade Practices
• Greed of quick money making, unscrupulous
marketers adopt variety of deceptive practices to
attract gullible customers
• Deceptive practices fall under 3 categories-
– Deceptive pricing
• False list price [overpriced] on which discounts are offered
• Price fixing done by individuals or group of firms
– Deceptive promotion
• Overemphasizing or overstating the quality, features, standards,
applications and performance of product
– Deceptive packaging
• Misleading information about the product therein and not
conforming to statutory requirements
• Information regarding product usage and safety is not revealed
61. • Certain sales acts and practices are considered
deceptive when-
– Claims for sponsorship which it does not have
– Product/ services claims performance,
characteristics, ingredients, accessories which it
does not have..
– Does not have particular standard, quality, grade..
– Product is claimed as new, but is not..
…..
A deceptive sales act/ practice with a consumer
transaction violates the CPA, whether it occurs
before, during or after the transaction.
62. • Circumstances/ situations which are
considered in determining unfair practices-
– Producer, mfg, distributor, supplier took
advantage of the consumer if he is unable to
understand the language of agreement
– Price grossly exceeds similar product at similar
time which are readily obtainable in similar
transaction by like consumers
– Consumer unable to receive a substantial benefit
from the transaction
– If the transaction is excessively one sided in favor
63. Some Examples…
False advertising and other misrepresentations
Product physically not available
False statements of guarantees in advertising
Deceptive pricing practices
-Pretending that product normally sells for higher price
-Misrepresenting the price as compared to competition
-Placing fake price stickers
-Difference in advertised price and actual price
-Using the term special price
64. Restrictive & Anti Competitive
Trade Practices
• Any practice that will prevent or reduce
competition is considered restrictive
• Any of these could be restrictive trade
practices-
– Price to be demanded, offered, paid
– Profit to be obtained
– Location, person with whom business to be done
– Restrictions on quality, quantity, type of goods..
65. What Happens if Restrictive Trade
Practices are followed?
• Monopolistic situation in the market
• Distort, eliminate or curb competition in the market
• Restriction to access by customers to competitive
products
• Concentration of economic power in few hands
66. Counterfeiting
• Prevalent in Pharmaceutical and Electronic
consumer goods industry
• Illegal business of drug counterfeiting eats in
to the revenues of legitimate business and
also jeopardizes the health and wellbeing of
patients
• Reputation of health care providers thus stake
• Ethical pharma business based on trust
– Doctor and pharmacist trust the industry
– Patient trusts the doctor
67. Counterfeiting
• 5-7% of drugs sold around the world are counterfeit
• Difficult even for medical practitioners to
differentiate
• They appear alike, but misses the active ingredient
• Any pharmaceutical drug can be counterfeited but
the most vulnerable ones are-
– Antibiotics, anti malarial drugs, cough syrups, skin
ointments, anti pyretics, analgesics, contraceptives,
multivitamins and so on..
68. • Few reasons that can make the industry alert
and active-
– High prices of some categories makes it lucrative
– Co existing black market for high demand drugs
– Low cost medicines
– Products that need little dosage and usage
information
– Products that are easy to copy in color, design, size
DRUG COUNTERFETING is a global crime
Proper education end users and health care
providers will help curb it
69. INDIAN LAWS
CPA MRTP CA
• Protect consumer • To curb unfair trade activities • Cover prohibition of anti
• Three tier system at • Prevent concentration of competitive agreements
district, state and central economic power • Abuse of dominance
level • Control monopolies • Regulation of combinations
• Relief is compensatory in • Any undertaking producing • Establishment of CCI
nature 1/4th or more of any type of • Enquiry to be done within
goods and having assets > 1 one year
cr, required to obtain • An agreement is deemed to
clearance hinder competition-
• Commission can direct that • Directly/ indirectly
practice shall be discontinued determines purchase or
• Any modification sales
• Need to publish • Limits/ controls
• Hold investigation on production, supply, tech
receipt of complaint devlp
• At Delhi,at central level, thus
may cause delay
70. CCI – factors that are considered as anti competitive
Foreclosure of competition
by hindering entry
Driving existing competitors
out of market
Creation of barriers to enter
market
An enterprise can have its dominant position, which enables it to operate independently
Section 4 of the act, prohibits any enterprise from abusing its dominant position
•Directly/ indirectly imposes unfair conditions, pricing stipulations
•Limits/ restricts production
•Denies market access to others
71. Cases…
• Non printing of sale price..
• Substandard product allegation…
• Misrepresentation in advertisement…
• Supply of product which was never
manufactured…
73. Sales of Goods Act, 1930
• What are goods?
• Any moveable property other than actionable
claims and money
• Shares, stocks, goodwill, copyright, trademark
patent etc, is considered as goods
• Gas, electricity
• Goods have to transmissible or transferrable
from one hand to other, or capable of delivery
• Need not necessarily be in tangible/ physical
sense
74. Features Valid Sales Contract
• Bilateral transaction [buyer and seller]
• Subject matter of sale of goods
• Delivering of specific qlty, qnty
• Delivery by specific period
• Price to be mutually agreed to and fixed
• Payment terms
• Transfer of title of goods
• Passing of risk
• Transport of goods [road, air, sea, rail]
• Packing of goods
• Transit insurance
• Inspection of goods
• Rejection, damages, return of goods
• Warranty
• After sales service
• Guarantee performance
• Contract termination
• Dispute settlement- juirsdiction
75. Formation of Contract
Sale & Sale- an executed contract
Agreement to Agreement…executory contract
sell
CAVEAT EMPTOR Offered at a price
Formalities of Agreement
Let the buyer contract
beware Acceptance
Immediate delivery
Immediate payment
Or installments
Writing/ WOM
Condition- essential to main purpose
Warranty is collateral to main purpose
Goods- existing/ future goods
Contract Description, mfgrer, confirming
Subject Matter of specifications
condition &
Contract
Warranty If the goods perish/ damage pos
Agreement without knowledge o
76. Rules of Delivery
• Delivery & Payment
• Anything to deliver the goods to buyer
• Delivery of part of goods
• Mode of delivery
• Place of delivery
• Time/ period of delivery
• Demand of delivery at a reasonable hour
• Delivery expenses
• Delivery in phases or installments
• Delivery at a place other than agreed
• Short delivery
• Excess delivery
• Delivery mixed with other goods
77. Rights & Duties of Seller and Buyer
SELLER BUYER
DUTIES DUTIES
Delivery of goods as per demand Pay to seller for the goods accepted
Reasonable time and opportunity to examine Apply for delivery of goods to seller
goods Compensate the seller for breach of contract
Compensate buyer for wrong supply Return the rejected material
Accept rejected material
Compensate buyer for breach of contract
RIGHTS RIGHTS
Receive payment for goods delivered Receive delivery of goods ordered
Receive compensation for damages due to Get time to inspect
buyers negligence Terminate contract if there is a breach
Sue buyer for wrongfully receiving goods Sue seller for non performance
Sue for damages caused because of buyer Sue for breach of warranty
78. Rights for Unpaid Seller
• Right of retain the possesion
• Right to stoppage in transit
• Right to resale
• Right to withhold supplies or disposal
• Right to sue the buyer
79. When can the buyer sue?
• Damages for non delivery of goods
• Specific performance of goods
• Breach of warranty
• Repudiation of contract
80. Contract Act
• Proposal and acceptance
• Consideration
• Capacity of the parties
• Free consent
• Undue influence
• Fraud
• Misrepresentation
• Mistake
• Legal relationship
81. Cases…
• Default in Hire-Purchase installment
• Acceptance of delayed payment
• Dishonor of cheque…
82.
83. Marketing Mix & Legal Obligations
Product
Price Planning needs to be
Done in the framework
Marketing Of legislation
Mix Elements
Promotion
Place
84. Marketing Mix & Legal Obligations
Product –
design, models, features, volume, packaging, bra
nd, quality
Price – list prices, discounts, allowances,
commissions, payment terms
Marketing Mix Elements
Promotion – public relations, advertising, sales
promotions, direct marketing
Place – channel, geographical, coverage, storage,
assortment, inventory, transportation
85. Product
Legal Issues in Product Development & IPR
Protection
•Product Development
•IPR- An Intellectual Capital
•Global vs. Indian IPR Landscape
•IPR – Indian Legal Framework
•Cases
86. • In today's huge competition, need to develop
strategies to faster product development
• And protect their IPR
– With IPR either make money with manufacturing,
licensing
– Globalization has necessitated legal strategy to
develop newer products and to capture, preserve
and protect IPR
87. • Product Development
Intell
Sony
Need to adopt
strategy to
Technology
Mega product
plays a major
competition differentiation
role
by product
development
Product lifecycle is deliberately compressed
Old products are killed and replaced with new and innovative products
Monies spent on R&D,
New products to comply with acceptable quality & design standards stipulated
By law
88. Product Development
• Product needs to be compatible with
environmental standards, should be harmless
for human usage and consumption
– Mfg process to avoid pollution of environment
– Pkg not adding to waste generation
– Does product & pkg have recycling potential
– Harmless for human use
– Approved by appropriate agency and certified for
usage
89. • Government & consumer groups are
watchdogs on launch of new products
• Host of legislation for arresting introduction of
harmful products
– Ghutka
• Marketers have added one more step in
product devlp process- compatibility of mfg,
process, pkg…..to the existing regulations in
the country
90. • NPD is a risky process
– For growth, survival
– Product lifecycles are compressed
– Advances of technology
– Safety needs of the potential users needs to be
looked at under the growing pressure of
consumerism
– [high application in pharmaceutical and process
food products]
– Safety, health and environmental regulations have
increased in the areas of healthcare, medicine,
automobile, consumer durables, toys, clothing,
food products
91. • To look in to the setting of standards for
products, commodities, materials and process
at national and international levels, Bureau of
Indian Standards [BSI] came into force
– Body corporate and comprises of members
representing industries, consumer organisations,
scientific & research institutes, professional
bodies, technical institutions, central ministries,
state govt., MPs
– Facilitates harmonious development of standards
– Product certifications
– Quality system certification
– Environmental management system certification
92. • Certification mark scheme operates under ISI
[Indian Standards Institution Act, 1986]
– Enables to grant license
– Product or services conforms to the specified
requirements
• For obtaining certification-
– Product has to undergo testing & inspection
– Penalties have also been enhanced recently
– Regular & surprise inspection carried out to
ensure quality standards are maintained
93. IPR- An Intellectual Capital
• Differentiation may be achieved through product,
experience, technology or way things are performed
and exhibited to satisfy consumers
• This amounts to ‘knowledge’, is the key source of
competitive strength to organizations
• Knowledge produced through hardwork, experience
and inventions is the intellectual capital of the firm
• Needs to be captured, preserved, protected for
future use [for not being used by rivals]
• Intellectual capital lead to core competency, which
can be leveraged for sustainable advantage
94. • Intellectual Capital includes-
• PATENTS
• COPYRIGHTS
• DESIGN
• TRADEMARKS
• BUSINESS SECRETS
• PRODUCT IDEAS
• BUSINESS PROCESSES
• Intellectual capital is an intangible wealth that
helps the organization, access to markets,
preserve exclusive markets, maintain profits
95. • Hence need to preserve these rights through
legal framework, as to protect it from
infringement or any misuse by competitors
• IPR connotes value attached to intellectual
contribution for patent, trademark or some
innovative work
97. • It’s a highly specialized area of law designed to
encourage creativity and fair competition
• Patent-
– Can be obtained for a new or improved machine,
article of mfg, chemical composition, process,
software or business method, e-commerce
business model, enabling technology for internet
– Patent prevents anyone else to take it up unless
you are paid for the privilege
– Grants you right to decide the fate of your
invention at the market place
98. Words, symbols, numbers, slogans, designs, features of
pkg, color combi, animations, sounds
Helps to create branding strategies that establish
Identify source of goods
consumer loyalty
Trademark
99. Applies to
expression of an
idea, whether
published or not
Copyright
Establishes
Books, poetry, play,
ownership of
short stories
original words
100. Example..
• New wristwatch invented
• Patent can protect the invention
• Shape of wristwatch can be protected by
design registration
• Name under which it is sold is a trademark
and can be registered
• Style/ words that are inscribed on the
wristwatch or literature, which explains
working of the watch will be protected by
copyright
101. Indian IPR Scenario
• Patent laws to make it compatible to TRIPS
[trade related aspects of intellectual property
and services]
• India has put in place mailbox facility to allow
registration of patents of pharmaceutical and
chemical products
• It has also extended ‘exclusive marketing
rights’
102. Basic Concept of IPR Laws
PATENT LAW Centers around concept of novelty and
inventions
Relates to new products/ processes of mfg. of
a product
TRADEMARK LAW Based on concept of distinctiveness
Consists of words, names, device in addition to
particular goods to indicate source of mfg/
origin
COPYRIGHT LAW Originality and reproduction of work in any
material form. Relates to original literary,
dramatic, musical…
DESIGN LAW Novelty and originality of design
Relates to non functional appearance of the
product which appeals solely to eyes
GEOGRAPHICAL INDICATION LAW Sign used on goods, which have a specific
geographical origin
103. IPR- Indian Legal Framework
Indian Legal
Framework
Geographical
Copyrights Trademark
Patent Act Design Act indications
Act Act
Act
104. PRODUCT PRICING
•Pricing- A key element of Marketing
Mix
•Pricing Decisions- Legal aspects
•Indian Laws for pricing regulations
•Cases
105. • Market driven economy, market forces decide
price tag on the product
• Price tag never reflects the true value of the
product to the consumer
• Consumers always fall prey to unjustified gains
on product pricing fronts
106. • Pricing- a key element in marketing mix
• Without pricing there is practically no marketing
• Product and services are purchased as per the price tag
• Facilitates exchange process to take place with ease and
convenience
• In free market economy, competitive prices are influencers
and not the marketers
• Price fixing is ‘unfair trade practice’ and restricts competition
107. Pricing Decisions: A Legal Aspect
• For survival and growth, pricing tools are used to
make volume sales, increase market share, reduce
inventory, or to click a deal with the customer
– Former price comparison
– Price discrimination
– Quantity discounts
– Functional discounts
– Restriction on minimum price
– Restriction on maximum price
– Price fixing
108. • Former price comparison
– In a ‘Bargaining price’ marketer offers a reduction
on the marketers earlier or former price of the
product
– In this the former price was the actual price
offered to public on a regular basis
– If the former price is genuine, then the bargain
price advertised is true
– If former price is fictitious then the bargain pice
advertised is false
109. Example..
His usual He knows
Retailer of markup is For offering he will not Then cuts it
Brand A 50% above a bargain be able to down to
soap the cost, price, he sell much Rs.15/- and
Which cost then his offer Brand Maintains advertises
him Rs. 10/- price would A at Rs.20/- this price as ‘Bargain’
be Rs.15/- for few days
It is a false claim. The advertised bargain is not genuine
110. Bargain Offers based on other
merchandise..
• Buy one get one free
• Free
• Half price sale
• Consumer may be deceived if the seller
increases the regular price of the articles, or
increases or decreases the quantity and
quality or otherwise attaches any other strings
111. Price Discrimination
• For the same quality or grade of product the
price discrimination amongst the different
purchasers or group of purchasers, if resulting
into lessening of competition, falls under
unfair trade practices
• Law prohibits price discrimination in such
cases
• The seller can maintain the price differentials,
if the grounds are justified
112. Quantity Discounts
• Commonly used for motivating the customer
to purchase the goods in large quantity so that
unit price of the product for the buyer is
reduced
• Resulting in to economy for the consumer
113. Functional Discount
• It is based on difference in distribution
function of each of the channel members such
as distributor, wholesaler, retailer, C&F agent
etc.
• The distributor if purchase in bulk from the
firm may get quantity discount
• But the retailer due to space constraint may
not buy in bulk
114. • Restriction on minimum and maximum price
– Especially in the pharmaceutical industry
• Price fixing
– Prohibited
– Any evidence that two or more sellers of similar
products have agreed to price their products in a
certain way
– More than one seller of very similar products sold
under different brand names make equal and
substantial price changes at same time
115. Bid Rigging
• In case of large value tenders for projects,
bidders may quote price in such a way that
purchasers at the end may pay more for
similar contracts being executed at other
places
– Evident signs
• Few bidders
• Several bidders submit identical bid
• Unusual difference in winning bid and other bids
• Certain bidders bid far higher on some projects than
others for no logical reason
116. Indian Laws for Pricing Regulations
Prevention of
Essential
black marketing
CPA, 1996 DPCO, 1995 Commodity CA, 2002
and supplies of EC
Act, 1955
Act, 1980
117. Prohibition of Anticompetitive Agreement
• Sec 3(1) of CA, prohibits enterprises and persons
from entering into agreements with respect to
production, supply, distribution, storage, acquisition
or control of goods or provision of services, which
may have an appreciable adverse effect on
competition
– Directly/ indirectly determines sales/ purchase prices
– Creation of barriers to new entrants
– Driving existing competition out
– Foreclosure
– Accrual of benefits to consumers
118. Abuse of Dominant Position
• Sec 4(1) of CA, 2002, prohibits any enterprise from abusing its
dominant position in pricing
• ‘Directly, indirectly, imposes unfair conditions, or pricing
stipulations in the purchase of sale of goods or services’
121. • Due to number of false, misleading, offensive
advertising coming in media, there is a
growing disbelief about advertising among
consumers
• This constitutes unfair trade practices and
thus affects the fair competition
• Thus government has taken steps through
enactment of various laws from time to time
122. Regulatory Measures
advertising
Integrated
Public Marketing in Sales
relations an promotion
Organization
Advtg. Through print, visual
Personal Need to make sure that they
Mass media, audio has a high selling
Positive contribution [indirect Are not crossing legal norms
Communication process] Through their ‘creative’ work
123. • Unscrupulous and excessive marketing adds to
the cost of the product, which increases the
selling price and also at the same time tempts
the buyer to purchase
• To control abuse of the media, govt. has
developed body of regulations and laws
• These are under constant change due to the
dynamic nature of the market , influenced by
changing economic, social, political,
technological environment
• OBJECTIVE- Protect consumers from falling
prey to misleading advertisement
124. Unfair Trade Practices in
Advertising
• Making false claims and misleading
advertisements
– Representation includes all communication
• Falsely representing quality standards, qty, grade,
composition, style
• False representation about sponsorship, approvals,
benefits
• Conformation on guarantee or warranty without any
supporting data
• Making false claims on need/ use of product or services
125. • Bait Advertisement
– Offering bargaining or pseudo discounts
– Mentions about bargain price of goods/ services that are
not intended to be offered for sale at the advertised price
• Conducting false sales promotion
– Unfair if any pseudo gift/ prize is offered to those who are
participating in sales contest, creating an impression of
something is being given free of charge
– It is actually fully or partly covered in the transaction
– Intention of the seller is not to provide any gift and
impression given is different, it is unfair trade practice
126. Legal Framework in India
• Any advertisement containing false or
misleading representation concerning quality
standards, grade, composition..falls under
unfair trade practices ass per the ‘CPA’
127. Regulations for Product/ Service
Communication on TV
Beverages/ Alcohol Not permitted in print and outdoor
advertisement
Indirect advertising allowed, overseas
satellite communication allowed
Pharmaceuticals/ Drugs Cure, illness, diagnosis, treatment by
correspondence, clinic, institute not
premitted
Advertising to children Restriction of direction/ attitude are placed
on childrens commercials
128. • Any advertising should not deride any religion,
race, caste, creed, color, any nationaility,
exploit the national emblem or personality of
a national leader
• Avoid false claims, misguiding statements,
deceptive product cues, which motivate the
consumer to buy the product
• Advertiser must be socially responsible to be
careful enough to avoid offending any
individual , social, religious or special interest
groups
129. Agencies Involved in Policy
Formation…
• Directorate of Advertising and Visual policy
• Ministry of information and broadcasting
• Press council of India
• Media research users council of India
• Advertising council of India
• Indian Institute of Mass Communication
130. Laws that control advertising in print,
audio, video and digital media
Consumer Protection Act, 1985 Protects consumers from exploitation
from any false and misleading statement
about products and services
Prevention of Food adulteration Act, Prohibits mfg. making certain claims
1954 about food products meant for human
consumption
Cigarettes Act, 2003 Prohibits ads of products containing
tobacco
Drugs & Cosmetics Act, 1940 Restrains mfg from any false and
misleading claims for drugs and
cosmetics products
Drugs & Magic Remedies Act, 1954 Restrictions against claims for certain
diseases
Cable Television Networks Act, 1995 Curb undesirable programs
Trade Mark Act, 1940 Prevents false representation of
trademark
131. Case Studies
• Advertiser
• Agency
• Media
• ‘New Life Good Kha Chewettes
• Tobacco substitute, not injurious to health, each
chewette contains nicotine polacrilex USP, equivalent to
2 mg of nicotine
• Global safety profile
– Complainant needed substantiation and proof of
safety which was not met
132. Case Study..
• Novartis, Calcium Sandoz
• National dairy Development board
[cooperative milk]
• Comparative advertising
• Clinic plus – complainant did not benefit as
the claims were within the legal framework
133. Physical Distribution
Legal Issues in Channel
Management
PD Channel
Types of Arrangement
Legal issues in channel management
Legal Framework
Cases
134. • PD –one of the strategic variables of
marketing mix
• Makes products and services readily available
to the consumer
• Channel is an external agency to the
organisation and being sometimes exploited
by creating monopolistic situation
• Thus legislation has a critical role to play to
curb unfair trade practices in channel
management
135. PD Channel
• Marketing channel defined as external
contractual organization that management
operates to achieve the distribution objectives
• These external agencies are called
intermediaries who perform the task of
distribution
• Need to have power to manage these under
the legal framework
137. Laws Influencing Channel
Arrangement
ACT PURPOSE
Contract Act, 1872 Defined contractual responsibilities and
obligation between the principal and the
agent
Competition Act, 2002 Prohibits enterprises and person to enter to
any process which has adverse effect on
competition
Consumer Protection Act, 1986 Protects consumer from influences of seller’s
138. PD- Legal Issues in Logistics
Logistics
Warehousing Transportation
139. Warehousing Corporation Act,
1962
• For purpose of warehousing of agricultural produce
and for other produce connected with it
• Objectives of the act are-
• Issue warehouse receipt to depositor, which can be
used as negotiable document for transaction with
producer, depositor, dealer, bank
• Reduce wastage, storage losses using scientific
principles to run warehouses
• Help depositor in mktg. warehoused goods
• Train and develop manpower to manage warehouses
140. • Act is arranged under five sections-
– Preliminary- covering definitions
– Central warehousing corporation- its capital
structure, management, functions
– State warehousing corporations- formations, mgt.
functions
– Finance, accounts, audit- investment funds,
disposal of profits, deposits, power of audit of
accounts
– Miscellaneous- power of corporations, offences,
indemnity to directors…
141. Transportation
• Country has entered in to deregulation
environment in transportation except rail
transportation
• Customer expectations are increasing and
thus need ‘just in time’ transportation system
142. Legal Framework
• Carrier and other Acts
– Motor Vehicle Act, 1988
– Carriage by Air Act, 1972
– Carriage of goods by sea Act, 1925
– Multimodal transportation of goods act, 1993
– Central Excise Act, 1944
– Central sales tax act, 1956
– Environmental Protection Act, 1986
– Consumer Protection Act, 1986
143. Product Packaging
• Packaging required to provide the following-
• Product containment
• Protection to product in transit
• Usage facilitation to consumer
• Communication for product promotion
• Preservation of ecology
144. Unfair Practices
• Concealing information on nature/ type of
goods
• Not providing information on ingredients
• Not providing instructions of usage
• Copying trade names
• Printing trade names or marks similar
• Not confirming to printed information
• Performance not as printed
• Date of mfg, prices not printed
145. Legal Framework
• Regulated mostly through Standard Weight &
Measures Act.
• Jute Packaging Material Act, 1987
• Environmental Protection Act, 1989
• IATA & IMO have their own regulations on
logistical packaging for air, sea mode
146. Some Rules…
• Should have-
– Name of product/ commodity
– Name and address of mfg.
– Net quantity
– Month and year of mfg
– Sales price of the commodity
