Assignment Code: Asst-1/ TMA-1/2021

Course Code: ACS-01 (TMA-1)

Assignment Name: Application Oriented Course in Consumer Studies

Year: 2020-2021

Verification Status: Verified by Professor

Valid Until: December 31, 2021

Answer all questions in each category. Write answers in your own words.

DCQ: Answer in about 500 words each. (2x20=40 Marks)

Q1. Discuss in detail the ‘nature and reasons for attitudinal changes among people’.

Ans) Attitudes have been defined as "a learned predisposition to respond in a consistently favourable or unfavourable manner with respect to a given object". Attitudes therefore, are not directly measurable but have to be inferred from what people say, or indicate through their behaviour, which may be in the form of gestures : complete silence, anger or smiles and excitement. Since attitudes are learned, they seem to have the property of motivating people's buying or other behaviour. In other 1 words, attitudes may push the consumer towards a particular type of behaviour. There are two characteristics of attitudes to be noted: (i) They are relatively consistent with behaviour. (ii) They change and are not permanent within a situation or time frame.

Nature of Changes

Consumers change their attitudes to their environment depending on how they see the world around them. Two people may see a product in the same shop but react differently to it, because their perceptions differ according to their own needs, values, expectations, resources, culture and social biases or norms, habits and peer group influences.

All sellers aim at changing consumer attitudes to products and brands, in order to capture a high degree of sales. They can achieve this only by understanding the dynamics of attitudinal change for which a number of strategies are used. These are :

1. Changing the basic motivational function of products and brands.

2. Associating the product wlth a specific group or event.

3. Relating to conflicting attitudes.

4. Altering the components of the brand.,

5. Changing the established beliefs about competitor's brands.

Additional changes to the attitude of consumers nature are:

1. Clianging the Motivational Function

2. Associating the Product with a Specific Group or Event

3. Relating to Conflicting Attitudes

4. Altering the Components of the Brand

5. Changes Established Beliefs About Competitor's Brands

Factors responsible for the attitudinal change in consumers are:

Inherent Nature of Consumers

By virtue of their inherent nature consumers do not always make rational, economic, extensive decisions. They would rather settle for a decision which is just "good enough" or satisfactory in the circumstances at hand.

Personality Traits

Every person has some natural and acquired personality traits, which get reflected in hislher purchase behaviour. People may be divided into two broad categories as far as personality traits are concerned. The extrovert and the introvert. The extrovert consumers are very free with their money, and are usually impulsive buyers. Introvert consumers are generally loners and will go to the market only if they have to, for purchases that strictly satisfy needs. When they go with friends, they may get influenced but are generally very careful about not wasting money.

Social Influences

Social influences include the influence of family, friends, peer groups, work groups, club mates, etc. Family is the basic social group in which an individual is born, and therefore is most influenced during the formative years of life. The environment provides economic stability, emotional support, and introduces the individual to traditional life-styles and socializations, all of which influence behaviour and choices in adult life.

Q2. Discuss in detail the ‘Consumer Movement’ in the Modern Period.

Ans) Consumer movement in the present form came into being only in the 1930's in the West and only in the 60's in India. The basic objectives of consumer movement world wide are as follows :

To provide opportunity to the consumers to buy intelligently

1. Recognition of reasonable consumer requests

2. Protection against fraud, misrepresentation, unsanitary and unjust products

3. Participation of consumer representatives in management of aspects affecting consumers

4. Promoting consumers interests

The basic reason for the development of consumer movement in India are different from those in the West. In western countries, consumer movement was the result of post-industrialisation affluence-for more information about the merits of competing products and to influence producers especially for new and more sophisticated products. In India, the basic reasons for the consumers movement have been:

1. Shortage of consumer products; inflation of early 1970's

2. Adulteration and the Black Market.

3. Lack of product choices due to lack of development in technology

4. Thrust of consumer movement in India has been on availability, purity and prices

The factors which stimulated the consumer movement in recent years are:

1. Increasing consumer awareness

2. Declining quality of goods and services

3. Increasing consumer, expectations because of consumer education

4. Influence of the pioneers and leaders of the consumer movement

5. Organised effort through consumer societies

Stages of Development of the Consumer Movement

The Consumer Movement today is undergoing a silent revolution. The movement is bringing qualitative and quantitative changes in the lives of people enabling them to organise fhemselves as an effective force to reckon with. But the path to reach this stage has not been easy. It has been a struggle against bad business which always put profit before fairness in transactions.

The first stage of movement was more representational in nature, i.e., to make consumers aware of their rights through speeches and articles in newspapers and magazines and holding exhibitions. The second stage was direct action based on boycotting of goods, picketing and demonstration. However, direct action had its own limitations, that led to the third stage of professionally managed consumer organisations. From educational activities and handling complaints, it ventured into areas involving lobbying, litigation and laboratory testing. This gave good results. Thus, for instance business sector has started taking notice and co-operating with the movement. It has played a role in hastening the process of passing the Consumer Protection Act, 1986 which has led to the fourth stage. The Act enshrines the consumer rights and provides for setting up of quasi-judicial authorities for redressal of consumer disputes. This act takes justice in the socio-economic sphere a step closer to the common man

The first organisation to really make an impact was the Consumer Guidance Society of India (CGSI), Bombay started by nine housewives in 1966 with Mrs. Leela Jog as its founder secretary. Instead of just holding conferences and meetings and asking questions like earlier consumer associations, it started testing and reporting the quality of items of daily use of foodstuffs and handling consumer complaints. It has 8 branches at various places carrying on publicity, exhibitions and education. It publishes a magazine called 'Keemat', in English, for consumer information.

MCQ: Answer in about 250 words each. (4x10=40 Marks)

Q5. Discuss the role of ‘Consumer in Market Economy’

Ans) In a market economy or a high consumption society, the price of a commodity, service or production factor are determined according to supply and dem , . of ths market. How market economy is related to the consumer depends upon consumer behaviour.

When the demand for a product increases for whatever reasons the producers can manipulate the market and exploit the consumeis by creating artificial scarcity and by reducing the supply of the product into the market. The consumers can fulfill their responsibility in this regard by not resorting to hoarding or bulk-purchase, at the time of scarcity.

The concept of market economy revolves around commercialism. Commercialism can be defined as product-marketing which promotes individulr consumption to the detriment of buyers and society. Commercialism implies negative connotations of selling through misleading advertisements. Advertising gives products and service messages in a variety of ways. Advertisements are designed to appeal to our senses, our rational mincis as well as our subconscious desires and vulnerabilities. There is no medium present in civilised society that cannot be used by and for advertising. Market forces are exploiting every inch of space and every minute of time to persuade consumers to buy. What the consumer has to take control of is how-when what or whether to buy at all or not.

 Aggressive marketing strategies are commercialising aspects of life that were once non-commercial. The greatest xample of this is the Christmas celebration in the West. This festival has been so commercialised and exploited by the market, that it has almost lost its cultural and religious significance. On similar lines, major Indian festivals like Diwali are acquiring the same commercial profile. Exchange of expensive gifts and sweets, huge expenditure on dangerous, hazardous and polluting fire works and expensive illumination which waste energy, are the hall-mark of Diwali celebrations in modem India.

A responsible consumer would want to preserve the spiritual and the cultural significance of the festival, rather than participate in it only as a consumer. Advertising is just one aspect of commercialism. Commercialism pervades our modem living in so many insidious ways that people are in danger of becoming impervious to its effect md reach. Business side of life should co-exist with family, culture, recreation and all other dimensions, but if allowed to grow unchecked, it tends to take over all aspects of social living and destroys the balance essential for a healthy life.

Q6. Discuss the role of ‘Consumer Movement in Europe’.

Ans) Though Consumer Co-operatives had great success in Europe, this did not result in formation of consumer organisations. Basically, industrialization did not lead to the same degree of affluence in Europe as in the United States.

Consumer movement in Europe was fostered by the 'Consumers' Union'. More specifically, by the constant efforts of Colston Worne. As early as 1939, he started to make enquiries about groups and individuals that he might try to interest. In London he was referred to as the Householders' Association. But he was disappointed. People were not at all enthusiastic about testing. It took another two decades for U.K. to provide a congenial environment for consumer movement.

Consumer movement in England began in a real sense only after the second world war. The common law did protect the consumer against aggressive selling, fraud and breach of promise. The British National Standard Institute in U.K. played a significant role in arousing the interest of the consumers in 1925. Many consumer magazines and shoppers' guides were published to educate the consumers. Consumer Associations came into existence to expose undesirable as well as defective products. It was Dorothy Goodman, an American living in London who along with Ray Goodman and Michael Young, founded the Consumers' Association (first called the 'Association for Consumer Research') in 1956. The first issue of its magazine 'Which' appeared in October 1951.

Gradually, consumer organisations began to take shape in other countries. Befoue 1960, three major organisations had been founded in Europe: 'Consumen Tehand' in the Netherlands, the 'Union Belge des Consummateurs' (now the 'Association des Consommateurs') in Belgium and 'Union Federale de la Consommation' in France. All been publishing information for and about consumers, including reports on products they had tested themselves.

Q7. Discuss the ‘Key definitions of concepts in the Consumer Protection Act, 1986’.

Ans) The basic legislation on consumer protection empowers the consumers by vividly

defining the merent terms and concepts connected with consumers:

a) "complainant" means

1. a Consumer; or

2. any registered voluntary consumer association

3. the Central Government or any State Government, who or which makes a complaint;

4. one or more consumers, where there are numerous consumers having the same interest:

b) 'Complaint* means

any allegation in writing made by a complainant that

1. an unfair trade practice or a restrictive trade practice has: be11 adopted by any trader;

2. the goods bought by him or agreed to be bought by him suffer from one or more defects;

3. the services hired or availed of or agreed to be hired or availed of by him, suffer from deficiency in any respect;

4. a trade has charged for the goods mentioned in the complaint a price in excess of the price fixed by or under any law for the time being in force or displayed on the goods or any package containing such goods;

5. goods which will be hazardous to life and safety when used, are being offered for sale to the public in contravention of the provisions of any law for the time being in force requiring traders to display information in regard to the contents, manner and effect of use of such goods with a view to obtaining any relief provided by or under this Act;

c) "Consumer means any person, who :

1. buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods for consideration paid or promised or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or 

   
   

2. hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid of promised or partly paid or partly promised, or under any system deferred payment, when such services are availed of with the approval of the first mentioned person;

d) "Consumer dispute” means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint;

e) "defect” means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by or under any law for the time being in force or under any contract, express or implied, or as is claimed by the trader in any manner whatsoever in relation to any goods;

f) "deficiency” means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or othenvise in relation to any senice;

g) "goods" means goods as defined in his Sale of Goods Act i.e. every kind of movable property other than actionable claims and money and includes stocks and shares growing crops, grass, and drugs attached to or forming part of land which are agreed to be served before sale or contract of sale.

h) "unfair trade practice" means a trade practice which, for the purpose of promoting

the sale, use or supply of any goods or for the provision of any service, adopts any

unfair method or unfair or deceptive practice

Q8. Write a note on “Consumer Education in India’.

Ans) A fundamental principle of the original enterprise system was consumer sovereignty. The principle assumed that consumers dictate the types, quality and quantity of the goods and services provided. Consumers would evaluate and select from competing goods and services and their acceptance and rejection would determine the success of the enterprise. It was assumed that the consumer could exercise an intelligent choice in the marketplace and of adequately defending his or her own interests. Today, it is being questioned as consumers often do not have the complete information, they require to explore alternative buying choice.

Social critics claim that today, consumers do not have the resources available to obtain all the information about the goods and services offered and are less able to make proper and wise purchase decisions. The comer stone of the free enterprise economy is the right of the consumer to make an informed choice from an array of product alternatives, which is not restricted by the exercise of monopoly power. The consumer cannot make a knowledgeable choice, of course, if inaccurate or incomplete information is provided through a deliberate efforts w mislead and manipulate. Moreover, restricted choice is the inevitable consequence of monopoly power, in which case profit results from this fact alone and not from service to the consumer.

Outright deception is regulated by governmental agencies and by voluntary business organisations, such as the Advertising Review Board. Monopoly power is also regulated to a degree by the MRTP Act, 1969. Some of its more blatant forms are not observed today. In a market economy governmental regulation will always be required to curb such abuses, and consumer protection legislation has expanded remarkably at all levels of the government. All too frequently, such legislation is based on the opinions of a small group of people rather than on consumer research that focuses on the consequences of these abuses of consumer behaviour. The outcome tends to be ineffective and, in some instances, counterproductive. There is now a growing awareness that greater reliance must he placed on research if consumer protection is to function as intended.

SCQ: Answer in about 50 words each (4x5=20 Marks)

Q11. Define ‘who is a Consumer’.

Ans) A consumer is defined as a person who buys goods and services and makes use of public utilities as well as natural resources like air and water. In its most basic sense, it refers to those who use goods and services for the satisfaction of their personal wants thus excluding buyers who purchase for manufacturing purposes or for resale.

For goods, a consumer means a person belonging to any of the following two categories:

1. One who buys any goods for a consideration.

2. One who uses such goods with the approval of the buyer.

For services, a consumer means a person belonging to any one of the following:

1. One who hires any service or services for a consideration.

2. One who is beneficiary of such service.

Q12. Write a note on ‘Social Environment’

Ans) The social class comprises a large group of people who possess something common in values, interests, life-styles and behaviour. The social classes are formed when people feel empathy with others sharing similar values and economic circumstances. The variables like status, wealth and power are commonly used to stratify the society socially. The social classes are by no means entirely homogenous and each class blends into its adjacent classes. Nevertheless, the people in each class share many of the same goals and hold similar views about that; appropriate means of reaching them. Marketing Manager's therefore study in detail the characteristics of the social class before designing marketing strategies for it.

Q13. Write a note on the Consumer Manifesto.

Ans) The modern consumer movement that began more than 50 years ago, has become an

important means to realize a just and fair society. As we move towards the year 2000, the movement remains committed to this aim. Its theme is that conditions in which consumers have to live must become better and more equitable. It approves of economic growth only when this leads to general well-being and happiness.

By careful research and concerted action, it sets out to redress the imbalance in knowledge and power between suppliers and consumers. It has concrete economic and social ills to challenge, specific market abuses to change, and short-sighted exploitative and destructive use of resources to expose. It draws attention to the need to change bad systems as well as to deal with their unpleasant symptoms. . The principal needs underlining consumer access to essential goods and services and fair choice, safety, information, representation, redress, consumer education, and a

healthy environment form the agenda of the consumer movement.

Q14. Write a note on ‘Socio Economic Factors’.

Ans) Our problems as consumers and the characteristics of the consumer movement are

influenced by the socio-economic factors peculiar to India.

Population Problem

Indian economy faces a seemingly insurmountable problem on account of a high rate

of population growth.

Unemployment

According to the DGE & T, Ministry of Labour, Govt. of India, at the end of 1993, there were nearly 3.70 crore persons on the live registers of employment exchanges the country.

Adult Illiteracy

Another major problem we faci is adult illiteracy. The total literacy rate in 1995 was 52.11% with male literacy at 63.86% and female literacy at 49.42%.

Inflation

Inflation is another economic problem that adversely affects the consumers in India. Several factors such as increased income in the hands of people, financing of government expenditure through deficit financing, increase in wages of government and private sector employees and inadequate supply of goods and services to meet the rising demand contribute to inflation and push.up the prices for the consumers.

Economic Liberalization

Under the new policy of economic liberalization, government is cornmitt4 to remove price and distribution controls except in respect of a few selected commodities that are supplied through the public distribution system.