Consumerism

Consumerism
The Driving Force Behind The Business
Submitted to – Ms. Avneet Kaur Puri
Submitted by – Vanaqksha Chandel
Vivek Singh

Table of Contents
Who is a Consumer?
Consumerism
Need for Consumer Protection
Features of Consumerism
Importance of Consumerism
Types of Consumerism
Consumer Responsibilities
Consumer Protection
Act, 1986
Effects of consumerism
Examples
Marketing
ethics
A Case study
Historical Aspect (where, when? )

Who is a Consumer?
3
Consumer can be either an individual or group of people
who purchase or use goods and services solely for
personal use, and not for manufacturing or resale. They
are the end-users in the sales distribution chain.
Customer vs
Consumer
• Purchases a product and
service but might not be
the end user
• End user of a product or
service who might not
have purchased the product

4
Consumerism
Consumerism is an organized movement of
citizens and the government to strengthen the
rights and power of the buyers in relation to
sellers.
Consumerism is a process through which
consumers seek redress for their
dissatisfaction and frustration on the basis of
organized efforts and activities.
It refers to consumers'
movement or a set of
policies aimed at regulating
the products, services,
methods, and standards of
manufacturers, sellers, and
advertisers in the interests
of the buyer.

Historical Aspect
(Where, When?)

Consolidation
● In USA consumer movement got matured and
consolidated in three waves – in early 1900’s,
the mid-1930’s and the mid-1960’s.
● The first wave comprised of passing of
legislatures such as Pure Food and Drug Act
(1906), the Meat Inspection Act (1906) and
Federal Trade Commission (1914).
● The Second wave happened in mid-1930s, in
the backdrop of Great Depression, which led to
strengthening of Pure Food and Drug Act and
expansion in the power of Federal Trade
Commission.
6

Continued…
● The third wave happened in mid-1960s, in the
post war USA when economy was going
through a boom, as consumption was going up.
Consumer now was not on the mercy of the
age old maxim of “Caveat Emptor”. Now
consumer demanded awareness and more
transparency from the side of manufacturers
and Sellers.
● This led to the proposal of Consumer Bill of
Rights in 1962 by the then president John F.
Kennedy.
● United Nations have now adopted United
Nations Guidelines for Consumer Protection.
7

Caveat Emptor
● Literal translation
would be “let the
buyer beware”.
● Due diligence on the
part of buyer is
expected.
● It is not the duty of
seller to make you
aware about the
defects in his or her
products.
8

9
Need for Consumer
Protection
• Low literacy levels and lack of awareness of rights
encourage businessmen to be indifferent to
consumers.
• Unorganized consumers and more economic power to
the producers.
• Deceptive advertising.
• Malpractices of businessmen
• For proper Guidance to the consumers

10
Features of Consumerism
• Prevention of Malpractices
Consumerism prevents unfair practices within the business
community, such as hoarding, adulteration, black marketing,
profiteering, etc
• Unity among Consumers
Consumerism aims at creating knowledge and harmony among
consumers and to take group measures on issues like consumer
laws, supply of information about marketing malpractices
• Enforcing Consumer Rights
Consumerism aims to apply the four basic rights of consumers
which are the Right to Safety, Right to be Informed, Right to
Choose, and Right to Redress.
Advertising and
technology are
the two driving
forces of
consumerism

11
Importance of Consumerism
• Educate the consumers
about the rights and reliefs
available to them
• Establishment of powerful
Consumer Organizations
• Prevention of Exploitation
of consumers
• The long-term interest of
the business
• Social Responsibility
• Business uses society’s
resources
• Government Intervention
From Consumers’
Point of View
From Business point
of View:

12
Understanding how consumers make purchasing decisions is critical for
companies when they market products or services. In other words, the buying
behavior of consumers affects the marketing strategy set forth by the company.
For example for a major purchase, the consumer generally will conduct
comparison shopping and demand information about the features and benefits of
the product. So the 4 types of consumerism in marketing may be discussed as:
Impulse
Buying
Purchases with a
high amount of
decision-making:
Purchases with
little amount of
decision making
Routine purchases

13
There are routine purchase people make that require little
decision-making. These purchases are made with
“Programmed behaviour” on the part of the consumer. This
is because, for this type of purchase, the buyer puts forth very
little effort in searching for the product and making a
decision about which product to buy.
Some products are purchased by consumers on a regular
basis but only occasionally. The consumer may be familiar
with the product category but will conduct research to find
out information about an unfamiliar brand.
Routine purchases
Purchases with little amount of decision making

14
Purchases with high amount of decision making
Purchases that the consumers make involve a high amount of
research and decision-making. These products are generally
unfamiliar and expensive and they may be bought infrequently
as well.
This impulse purchase requires no conscious prior planning
and decisions are made on the spot.
Impulse Buying

15
Consumer Responsibilities
1. Be aware of various goods and services available in the
market so that an intelligent and wise choice can be made.
2. Buy only standardized goods as they provide quality
assurance. Thus look for the ISI mark on electrical goods,
FPO(Fruit Products Order)mark on food products, and
Hallmark on jewellery, etc.
3. Learn about risks associated with products and services,
follow manufacturers’ instructions and use the product safely.
4. Read labels carefully so as to have information about prices,
net weight, manufacturing and expiry dates, etc.
5. Ask for a cash memo on the purchase of goods or services.
This would serve as proof of the purchase made.
6. File a complaint in an appropriate consumer forum in case of
a shortcoming in the quality of goods purchased or services
availed. Do not fail to take action even if the amount
involved is small.
Be a Smart
Consumer

Consumer Protection Act, 1986
The Consumer Protection Act, of 1986 (COPRA) is an Act by the Parliament of
India enacted to protect the interests of consumers in India. It has been made for the
establishment of consumer councils and other authorities for the settlement of
consumer grievances and matters connected with it. The act was passed in the
assembly in October 1986 and came into force on December 24, 1986. It has been
replaced by the Consumer Protection Act, of 2019.
Features
• It safeguards and encourages consumers to speak against insufficiency and flaws in
goods and services.
• If traders and manufacturers practice any illegal trade, this act protects their rights as a
consumer.
• The act covers all goods and services of all public, private, or cooperative sectors,
except those exempted by the central government. The act provides a platform for a
consumer where they can file their complaint, and the forum takes action against the
concerned supplier, and compensation is granted to the consumer for the hassle he/she
has encountered.

17
Rights of a consumer
This means the right to be protected against the marketing of goods and services, which are
hazardous to life and property. The purchased goods and services availed of should not only
meet their immediate needs but also fulfil long-term interests.
This means right to be informed about the quality, quantity, potency, purity, standard and
price of goods so as to protect the consumer against unfair trade practices.
The consumer should have the right to choose from a variety of goods at a competitive
price. It also includes the right to basic goods and services.
Right to Safety
Right to be Informed
Right to Choose

18
Rights of a consumer
This means that consumers’ interests will receive due consideration at appropriate forums. It
also includes the right to be represented in various forums formed to consider the consumer's
welfare.
This means the right to acquire the knowledge and skill to be an informed consumer
throughout life. Ignorance of consumers, particularly of rural consumers, is mainly
responsible for their exploitation.
This means the right to seek redressal against unfair trade practices or unscrupulous
exploitation of consumers. It also includes the right to fair settlement of the genuine
grievances of the consumer. Consumers must make complaints for their genuine grievances.
Right to be Heard
Right to Seek redressal
Right to Consumer Education

19
Effects of consumerism
Positive effects Negative effects
1. Consumerism stimulates economic
growth.
2. It boosts creativity and innovation.
3. Better products
4. Better living standards
5. It creates safer goods for consumers.
1. The economy takes precedence over the
environment.
2. Craving for goods is high.
3. People’s lifestyles changed in the sense
they are more lavish rather than focusing
on simplicity.
4. Bad for small industries

20
Examples
• The leading jewellery brand Tanishq’s
advertisement for its new collection, Ekatvam
(oneness) showed a pregnant Hindu woman
escorted by her Muslim mother-in-law to her
baby shower ceremony. The woman then asks
her mother-in-law that "this ceremony is not
held at your home..” to which the latter
replies, "Isn't it a tradition to keep daughters
happy everywhere?"
• The idea behind the campaign to highlight
‘oneness’ and coming together of different
social communities and families during these
challenging times received severe criticism
and stimulated divergent reactions contrary to
its main objective.

21
• The 43-second advertisement prompted a massive backlash over its content as it has apparently hurt
the Hindu sentiments ‘deeply’ by promoting ‘fake secularism’ and ‘love jihad’- a derogatory term
used to describe intercaste relationships. Within hours of the ad's release, the hashtag
#BoycottTanishq began trending and by Monday afternoon the YouTube video had garnered over
2,000 dislikes and just 500 likes.
• There were a number of demonstrations and protests throughout the country outside Tanishq’s stores.
These protests led by several Hindu activists aimed at getting an apology for hurting national
sentiments and for exhibiting such demeaning thoughts against their customs and values.
The Titan Ltd.-owned Tanishq brand first disabled the comments and later had to withdraw its advertisement due
to the unfortunate antisocial behaviour that followed along with floodgates of debates, illegal threats and trolling
demanding the advertisement to be banned.
Although Tanishq took down the advertisement, the effects of the outrage on social media with the trending
#BoycottTanishq led to severe losses for the company. The company saw its share price fall by 2.5% after the
hashtag. Its stock closed at Rs.1224, and Titan, which has a market cap of Rs 1.09 lakh crores, saw its collective
shareholder wealth get eroded by Rs.2700 crores.

22
Examples
• It was Sanjay Singh, a food inspector at the
Uttar Pradesh government’s Food Safety and
Drug Administration, who spotted the label that
claimed “no added MSG (monosodium
glutamate)" on the bright-yellow packets of
Maggi noodles in March 2014 during one of his
routine raids on retail outlets.
• Singh picked up a sample and sent it to the state
laboratory at Gorakhpur for testing. The result
that came a few weeks later was positive that
particular sample of Maggi noodles had MSG.
The results that came from Central Food
Laboratory in Kolkata read: “MSG: Present and
Lead: 17.2ppm (parts per million)". The
amount of lead found was over 1,000 times
more than what Nestle India Ltd had claimed.

23
• The controversy grew when the Food
Safety and Standards Authority of India
(FSSAI) asked Nestle to recall Maggi
Noodles.
• Nestle was left with no choice but to recall
the popular snack from the market.
Between June 5 and September 1, 2015,
nearly 38,000 tonnes of Maggi Noodles
were recalled from retail stores across the
country and destroyed. Maggis share in the
Indian market went down from 80 %to
zero.
Sun feast Yippee!
noodles popularity
increased Although later, Maggi returned to the shelves in
November but it faced huge losses

24
Examples
• Red Bull is associated with its famous
slogan “Red Bull gives you wings”
through which they try to define to the
customer the high content of energy
offered by this drink.
• However, in 2013 their slogan was tested
by a consumer who felt that the slogan
represents false advertising. Benjamin
Carethers, a man from America, believed
that the slogan is dishonest and therefore
sued the company on the accusation of
false advertising!

25
• Benjamin never expected to actually grow wings as he knew the slogan was metaphorically used to
represent the high content of energy that the energy drink has to offer.
• The misleading part which Benjamin used in the lawsuit was that the energy drink does not offer as
much energy as advertised, as a 250ml can of Red Bull has less caffeine than a cup of coffee.
• In 2015 when the lawsuit ended, customers received $13 million in compensation.
Power of a consumer!

26
Marketing Ethics
Marketing ethics can be defined as moral principles and values that should be followed
during marketing communication. It is a technique that highlights a company’s values—
honesty, transparency, responsibility, or adherence to fair trade principles as a promotional
strategy. Marketing ethics fosters fairness and honesty in all advertisements. Any
fraudulent claims to the customers, intruding on consumers’ privacy, stereotyping, and
targeting the vulnerable audience (like children and elderly) are deemed unethical.
Importance 1. Customer Loyalty
2. Long-term gains
3. Protect the well-being of consumers
4. Improved credibility
5. The attraction of the right talent at the right place

27
Principles of ethical marketing
Honesty
One of the most important components of ethical marketing is the idea of full honesty in
marketing communications. It's critical for business leaders and marketers to convey the
truth about a company's products and services in order to protect the health, well-being and
rights of consumers.
Transparency
Transparency in marketing ethics is the idea of disclosing the details behind company
processes and behavior. It also refers to the process of having open and honest discussions
about ethics. Being upfront and straightforward about company history, current practices
and future goals can help to keep an organization accountable to its customers and
stakeholders.
Suppliers Features
Quality
Pricing

28
Health and safety
The physical safety of customers is one of the top priorities for ethical businesses and
marketing teams. Marketers can uphold this principle by educating, protecting the privacy
of, and respecting the civil and human rights of consumers.
Legality
Part of ethical marketing is complying with all governmental and environmental regulations
and industry standards. This proves to consumers that a business is serious about
developing excellent quality and services.

29
Fairness
Establishing fairness as a decision-making principle means companies commit to fair
prices, better wages, and sustainable development.
Responsibility
Businesses may emphasize their responsibility in
several ways, including their obligation to provide
a reliable product or service, support social causes,
give back to communities, treat their employees
with respect, or protect the environment through
sustainable practices.

30
Ethical issues in marketing using
4P’s of Marketing
Product
• Ethical concerns can arise in the development of products/services.
• Ethical concerns can also appear in the performance of products/services.
• Ethical concerns can also arise in the case of harmful products due to poor design or lack
of quality.
Packaging
• Exaggerating packaging (for example through design) or misleading labels cannot be
considered ethical, because they aim at deceiving consumers by making them believe a
pack contains more product than it does in reality or by giving unclear/incomprehensible
information.

31
6
4P’s of Marketing
Promotion
• The first ethical concern in promotion is deception.
• Another ethical concern is the invasiveness of marketers in the
everyday life of consumers and the threats to consumers’ rights to
privacy
Price
• Too high prices are not ethical when they do not reflect the existing cost structure but are a
means to take advantage of consumers.
• Advertised prices should always be realistic prices that consumers will find in stores.

32
4P’s of Marketing
Place
• Consumers can be manipulated without knowing it through subtle
marketing techniques in distribution outlets.
Marketing Ethics includes Social
Responsibility and Corporate Social
Responsibility (CSR) as well.
• Social Responsibility is an ethical framework that
suggests that an entity, be it an organization or
individual, has an obligation to act for the benefit
of society at large.
• CSR is a management concept whereby companies
integrate social and environmental concerns in
their business operations.

34
Ethical Marketing Example-TOMS
• Toms (stylized as TOMS) is a company
based in Los Angeles, California. It was
founded in 2006 by Blake Mycoskie, an
entrepreneur from Arlington, following a
trip to Argentina. During his visit,
Mycoskie saw first hand how people living
in impoverished areas of Argentina had to
live without shoes, a challenge that many
of us likely give little thought. Inspired by
his trip, Mycoskie decided to establish his
company. The company designs and
markets shoes as well as eyewear, coffee,
apparel, and handbags.

35
How Does TOMS Use Ethical
Marketing?
• TOMS puts its social and
environmental philanthropy on
full display in virtually every
aspect of its branding. This not
only lets potential customers
know the kind of company
they’re dealing with right off
the bat, but also reinforces
TOMS’ brand values
consistently across all channels.
TOMS’ Home page reads “With every product you
purchase, TOMS will help someone in need.”

36
TOMS Success
• TOMS’ mission is so central to the company’s
branding, it’s given almost equal emphasis on
its website as the products it sells. In fact, it’s
almost impossible to navigate through TOMS’
site without seeing further examples of how
TOMS helps people around the world.
• Since 2006, TOMS’ footwear business has
donated more than 60 million pairs of shoes to
children in need all over the world. As if that
weren’t enough, TOMS’ eyewear division has
given more than 400,000 pairs of glasses to
visually impaired people who lack access to
ophthalmological care.
• It has also expand access to birthing kits to
expectant mothers in developing nations as
well as training for birth attendants. To date,
TOMS has helped more than 25,000 women
safely deliver their babies.

Freebasics
Fall of Freebasics and power of Consumer

Consumerism
● Like all other –isms, Consumerism is also an
ideology but with Consumer at its center.
● It is a force to be reckon with.
● You can not expect to do the business in
today’s world by trying to harm or getting the
better of your consumer.
Facebook tried to do this in India with Internet users
in 2014-2015, and it failed miserably.
38

“ But before we move
ahead let’s understand
the concept called Net-
neutrality. Which
Facebook tried to target
with its Freebasics.
39

What was
Freebasics?
Before the internet
revolution that happened
in India which brought us
cheap and fast broadband
as well as mobile internet
connection. India lagged in
Internet Infrastructure,
specially the rural India.
Facebook tried to capitalize
on this.
Facebook was offering a
free internet connection
to rural India but not a
neutral Internet, rather
one where things will
tilted in the favor of
Facebook.
41

“ “I shall either find a way
or make one.”
~Hannibal
42

In Similar Vein
● Facebook was looking at increasing its user
base rapidly to be able to monetize it’s
advertisement based revenue model.
● India was the perfect option, Since Facebook
was banned in China.
● The trouble, however, was very poor or non
existent the then internet infrastructure of
India.
● Since, Facebook was not able to find the way.
Just like General Hannibal they embarked on
the journey of making the way.
43

Building on the
quicksand
● “There was this Deloitte study that came out the
other day, that said if you could connect
everyone in emerging markets, you could create
more than 100 million jobs and bring a lot of
people out of poverty.”
~Zuckerberg
● However, that study was commissioned by
Facebook, based on the data given by
Facebook and was about Facebook.
44

A threadbare
platform
It had just 36
bookmarked
websites including
Facebook. Facebook
would decide which
websites will or will
not be included
Which included 3
websites on
Women’s issues,
one weather app
and one search
engine Bing.
Not very useful or
functional for all the
lofty words about
humanity and jobs.
45

Media Blitz and Fightback
46
• When Facebook first came with Freebasics in India, Indian
Media started to pump dime a dozen article which talked
about Facebook’s “noble idea” to get millions of Indians
online.
• However, not everyone shared the enthusiasm and there
were skeptics like Nikhil Pahwa, who opened a front on his
website MediaNama.
• He went on to found SavetheInternet.org and write articles on
his website MediaNama about Net-Neutrality and how
Freebasics is actually against the said Net-Neutrality.
• Eventually a whole movement galvanized around Pahwa and
AIB did a 9-minute video on this issue.

Panic in the HeadQuarters
47
• After Seeing the Popularity of AIB’s Video on Youtube,
Facebook top brass got worried. Then they decided to follow
the scorched earth policy to create an environment conducive
enough to affect the policymakers, in our case TRAI.
• With a massive budget of 30 million Pound, Facebook
Freebasics billboards started to dot city skylines.
• Massive email and sms campaign soon followed asking for
support to Freebasics with missed calls.
• Content of such billboards were also very misleading and
would feature people like marginal farmers. Talking how
Freebasics would help such earn more money by learning
farming techniques from Facebook and other websites listed
on Freebasics.

What was the outcome?
51
• In January 2016, the regulator met to decide on
this issue. After much deliberation and looking at
all aspects, TRAI decided to uphold Net-
Neutrality and banned all services like Freebasics.
• Without the consumerist movement under the
banner of “Save The Internet”, it is very difficult to
imagine what would have been the fate of Net-
Neutrality.
Freebasics is Dead!
Long Live the Freebasics!

52
Links for the Reference paper
https://drive.google.com/drive/folders/1D2REiaTVaM3ffAviFkTQZ3
Jjbb5Qs1qo
Drive Folder
Containing
Research Papers
https://drive.google.com/file/d/12_A3f0RGy3go8bgio0ib6MupC8SWZ
FQM/view
Individual
Research Papers
https://drive.google.com/file/d/16tk8wFqomeC9--lJMc0k-
5rZOydE1K47/view
https://drive.google.com/file/d/1UuUjeyO7UUscBS-
9HM4mL6algDzFOaLg/view

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