Chapter 1 The Role of the Consumer Citizens and Challenges for a Consumer Citizenship In order to change the social structure through consumer behavior, it is essential to find a secure balance among the economy, society and peace of mind. With these three perspectives in mind, we will examine the current situation and relevant issues, with a particular focus on the role and future prospects of consumer trends. Section 1: The consumer citizen as an economic subject ‒ consumer market behavior ●In developed countries, consumption expenditure comprises more than 50% of the economy. Consumers wield great power through their choice of corporations and products. A very negative consumer attitude toward a corporation, following a scandal for example, leads to a severe decrease in revenues. Fig 1-1-2 In developed countries, consumption expenditure generally accounts for more than 50% of GDP 70.7 US Section 1: UK The consumer citizen as an economic subject ‒ consumer market behavior 60.7 58.6 Italy The choices of consumers strongly affect business behavior and their products. Consumers respond negatively to corporations involved in malpractice. In the development of complex economic systems and the growth of the service industry, consumers directly face various risks such as food safety. It is necessary to develop a system which enables consumers to assess risk, and to construct a market which maintains a reasonable risk level. Switzerland 55.9 France 55.4 Germany 55.2 Japan 55.1 54.2 Canada 45.1 Sweden 39.8 Norway Section 2: The consumer citizen as an agent of social change ‒ social value behavior The pursuit of individual benefit often runs in opposition to other concerns such as the global warming and poverty. To solve these problems in interdependent society, cooperation among citizens is vital. The awareness of social good is growing; however, it is not directly linked to practical actions that will serve, for example, environmental protection. To link a consumer s awareness to action, it is necessary to analyze factors that change consumer behavior and thereafter propose an appropriate policy. 0 10 20 30 40 50 60 70 (%) 80 (Notes) 1. Japanese data drawn from the Cabinet Office "Annual Report on National Accounts" (2008) and other data is drawn from OECD.Stat 2. The figures are the percentage of final consumption expenditure of households in gross domestic product Fig 1-1-5 After a scandal, the revenue of a corporation decreases (The year when a scandal occurred=100) scandal occurred 120 110 100 Section 3: The consumer citizen as a social subject ‒ pursuit of happiness Economic wealth does not necessarily bring about higher life satisfaction (the degree of happiness). A stressful life negatively affects one's degree of happiness. Although the causes of stress vary according to the environment in which one lives, stress is known to be one of the major causes of depression. One who does not feel stressed tends to have more their own time during workdays, and in a country where average work hours are short, the degree of happiness tends to be high. It is, in short, important to lead a relaxed and comfortable lifestyle. 6 90 80 70 60 50 -5 -4 -3 -2 -1 0 1 2 3 4 5 6(year) (Notes) 1. Ministry of Finance "Financial Statements Statistics of Corporations by Industry", Nikkei "Kaisya Soran", Toyo Keizai,inc., "Kaisha Sikiho", Teikoku Databank "Kigyo Jyoho" 2. Sales of each company are indexed and compared with average sales of each industry (the sales in the year when a scandal occurred are assumed 100). 7 ●With the expansion of imports, exporting countries diversify and food chains (supply chains) from producing regions to individual homes become more complex. The degree of development of the legal systems and their implementation by exporting countries affects our country. Fig 1-1-6 With the expansion of imports, exporting countries to Japan diversify ●As the food supply chain becomes more complex and consumer awareness soars, the number of voluntary recalls of food increases rapidly. With more people feeling uneasy about food safety, domestic food products are preferred. Fig 1-1-16 0 (number of countries) Growth rate from 1970 to 2007 1970 1990 1995 2000 2005 2007 meat and preparation of meat 40 57 64 55 49 44 1.1 dairy product and eggs 27 39 46 48 44 48 1.8 cereals and preparation of cereals 41 53 57 62 62 60 1.5 fish (fresh) 84 126 138 131 131 129 1.5 fish preparation 44 46 58 62 61 55 1.3 fruits 61 68 71 82 87 83 1.4 vegetables 54 65 69 81 77 79 1.5 domestic electrical equipment 20 38 41 55 52 49 2.5 clothing 68 81 108 117 113 112 1.6 toys, indoor games etc. 49 64 61 74 80 71 1.4 (Notes) 1. Calculated from Ministry of Finance "Trade Statistics of Japan" 2. "The number of countries" indicates the total number of countries from conducted within a year Fig 1-1-9 Japan Russia *pork *shrimp *tomatoes *cheese *cod *garlic *cheese *rice *mackerel *soybean milk *gelatin noodles *egg whites *potatoes *saury *read beans *spinach *cod *grifola *beef tallow*pumpkins *green tea *cabbage *beef *bean sprouts *chicken *corn *celery *lard *soybeans *pork *onions *milk *carrots *eggs Oceania *wheat *cod *pork *corn *celery *soybeans *onions *tomatoes *green peppers Latin America *beef tallow *beef *cheese *pumpkin *green peas *onions Factory in Japan China *squid *pork *red beans *asparagus *green beans *cloud ear mushrooms *shiitake mushrooms *ginger *wheat *shrimp *pork *red beans *bamboo shoots *onions *tomatoes *garlic *leeks *green peppers *mushrooms *lotus root 60 (%) 100 80 "strong sence of concern" 2008(October) (n=1810) 47.3 28.2 2008(June) (n=405) 10.9 18.1 40.0 2007 (n=438) 12.1 2006 (n=448) 9.6 33.5 2005 (n=469) 10.4 33.0 2004 (n=456) 8.3 29.1 45.2 4.9 1.5 14.1 25.6 31.0 3.7 12.1 4.7 0.9 17.7 37.9 3.8 0.9 17.1 2.9 0.7 Little concerned Somewhat concerned Concerned 2.2 3.2 1.8 20.3 34.1 33.1 Strongly concerened Fig 1-1-18 No answer Unconcerned 80 20 *tomatoes 0 Factory in Thailand "Buy less/ reduce purchasing" "Have confidence" Middle East *lizard fish *perillas *chicken *zucchinis (Thailand) *shrimp *small sardines*bamboo shoots *green beans *pineapples 81.8 60 40 Asia (excluding China) There is a significant trend toward domestically processed food (%) 100 *pork *chicken *tomatoes *green peppers (Note) Made from Company A homepage on 50 items of household frozen processed foods (August, 2008) 8 40 (Notes) 1. Data before June 2008 is from Food Safety Commission "Food Safety Monitors (Awareness on food sfaety) and data at October 2008 is from the Cabinet Office "Survey on National Lifestyls (Consumers' awareness and its behavior)"(2008) 2. The precentages of the answers to the question "Hou much do you concern about food saftey comapred with natural disaster, enviromental issues, crimes and traffic accidents". 3. Respondents of "Food Safety Monitors" are gerenal consumers and people from food business. Respondents of "National Life Monitors" are citizens over the age of 20. US Canada 20 (year) which any import has been Japan imports ingredients of foods from various countries such as China (an example of frozen foods) EU More people feel uneasy about food safety 35.8 35.3 14.9 12 34 16.7 1.6 1.1 domestic product (ingredients are aslo domestic) 50.1 domestic product (ingredients includes imports from developed countries) dometics products imported processed food from (ingredients include developed countries imports from developping countries) imported processed food from developing countries (Notes) 1. The Cabinet Office "Survey on National Lifestyles" (research on consumer awarenss and behavior) (2008) 2. The ratio of respondents who were asked the following questions: "How much confidence do you have in processed food safety? Have you changed the frequency of your purchasing activity?" 3. "Have confidence" is the sum of answers "have confidence" and "generally have confidence". "Buy less/reduce pruchasing" is the sum of answers "do not buy at all" and "buy less than before". 4. Respondents are 1810 people, of both sexes, over the age of 20. 9
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