Consumerism

ppt on consumerism

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

2. 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? )

3. 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. Big concept 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. Be a smart consumer

5. Historical Aspect (Where, When?)

6. 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

7. 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

8. 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. 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. 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. 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. 12 Types of Consumerism 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. 13 Types of Consumerism 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. 14 Types of Consumerism 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. 15 Consumer Responsibilities Be aware of various goods and services available in the market so that an intelligent and wise choice can be made. 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. Learn about risks associated with products and services, follow manufacturers’ instructions and use the product safely. Read labels carefully so as to have information about prices, net weight, manufacturing and expiry dates, etc. Ask for a cash memo on the purchase of goods or services. This would serve as proof of the purchase made. 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

16. 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. 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. 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. 19 Effects of consumerism Positive effects Negative effects Consumerism stimulates economic growth. It boosts creativity and innovation. Better products Better living standards It creates safer goods for consumers. The economy takes precedence over the environment. Craving for goods is high. People’s lifestyles changed in the sense they are more lavish rather than focusing on simplicity. Bad for small industries

20. 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. 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. 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. 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. 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. 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. 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 Customer Loyalty Long-term gains Protect the well-being of consumers Improved credibility The attraction of the right talent at the right place

27. 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. 28 Principles of ethical marketing 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. 29 Principles of ethical marketing 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. 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. 31 6 Ethical issues in marketing using 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. 32 Ethical issues in marketing using 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.

33. Parle---Biscuit Saviour

34. 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. 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. 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.

37. Freebasics Fall of Freebasics and power of Consumer

38. 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

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

40. 40 Save The Internet by AIB

41. 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

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

43. 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

44. 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

45. 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

46. 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.

47. 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.

48. 48

49. 49

50. 50

51. 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. 52 Links for the Reference paper https://drive.google.com/drive/folders/1D2REiaTVaM3ffAviFkTQZ3Jjbb5Qs1qo Drive Folder Containing Research Papers https://drive.google.com/file/d/12_A3f0RGy3go8bgio0ib6MupC8SWZFQM/view Individual Research Papers https://drive.google.com/file/d/16tk8wFqomeC9--lJMc0k-5rZOydE1K47/view https://drive.google.com/file/d/1UuUjeyO7UUscBS-9HM4mL6algDzFOaLg/view

53. Thank You! 53