CHAPTER II
ORIGIN AND GROWTH OF
CONSUMERISM
PART-A
INTRODUCTION
In the present economic and social scenario, the subject of consumer
protection is of vital concern and importance for every citizen of the country, as each
one of them is a consumer in one form or the other. Consumers do not constitute a
separate class. Every one is included. Every one is a consumer, the young and old,
the rich and poor, workers and idlers.1 The last two decades have witnessed an
ever-expanding interest in consumerism. One can see a wave of awakening and an
upsurge of enthusiasm for the rights of consumers.2 Although various scientific and
technological developments have brought about perceptible socio- economic chan­
ges, the consumer’s control over the market mechanism has gradually diminished. His
suzerainty in choice of goods and services has been greatly eroded by various forms
of unfair, monopolistic and deceptive trade practices. If the purpose of the business is
to create a customer, the aim of consumerism is the protection of consumers.
CONSUMERISM DEFINED
The term Consumerism is of recent vintage. Consumerism is a social move­
ment seeking to augment the rights and powers of buyers in relation to sellers.
Consumerism has been defined as "the organised efforts of consumers seeking orders,
restitution and remedy for dissatisfaction they have accumulated in the question of their
standard of living".
32
Consumerism is of such a wide magnitude and importance that it force a
conspicuous place in Encyclopedia Britannica, which defines consumerism as
“widespread interest and concern about consumer protection and the growth of
organizations whose objectives are to disseminate information about products and to
persuade industry to provide better quality goods and services - both parts of a
phenomenon usually described as consumerism".
The term consumerism first came into currency in the last decade when it was
supplied to a number of issues which had first attracted serious attention in the 1950s.
Vence Packard was one of the first gentleman to use the expression "Consumerism".3
He discussed various problems of marketing such as planned obsolescence, declining
quality and the absence of satisfaction after sales service, particularly in saturated mass
consumption markets for convenience goods.
According to Philip Kotler consumerism is "a social movement seeking to
augment the rights and powers of the buyers in relation to sellers".
Peter Drucker offers the following definition of Consumerism:
"Consumerism means that the consumer looks upon the manufacturer as
somebody who is interested but who really does not know what the consumer’s realities
are. He regards the manufacturers as somebody who has not made the effort to find
out, who does not understand the world in which the consumer lives, and who expects
the consumer to be able to make distinction which the consume? is neither willing nor
able to make".
33
Another definition of consumerism has been developed by Mrs. Virgine H.
%
Reauer, Special Assistant to the President for Consumer Affairs (U.S.A.). She stated
that the watch word for the new militant mood among American consumers is simply,
Caveat Venditor — Let the seller beware, in comparison to the age old Caveat Emptor
Let the buyer beware.
Thus Consumerism is a social movement which seeks to protect and augment
the rights of the consumer in relation to producer. While producer is having the power
to design the product, price it and sell it, the consumer at the appeal has right to accept
or reject the same.
Consumer movement is a universal phenomenon. Whether there is an
abundance of goods and services or shortage thereof, the consumer’s position in
relation to seller is always weak4 . Sellers want customers who buy and not
consumer who complain. Sellers still prefer the principle of Caveat Emptor to the
principle of Culpa In Contrahend or Caveat Venditor. A long and vivid exploitation
all over the world has ultimately forced the consumers to organise and fight for their
rights to safety, information, selection and hearing.
Philosophically this is termed
as consumerism5 .
The consumer protection movement, popularly known as "Consumerism" is of
course a recent and universal phenomenon for India. CorfSumerism is a social
phenomenon caused by the strains of shortages and inflation in our country. This
movement is a contravening defensive force to safeguard the interest of the consumers
from the abuses of economically powerful sellers, it seeks to protect the rights of the
consumers against the notorious and various unfair trade practices indulged in by the
34
producers and the middlemen. Towards this end it also seeks to disseminate correct
information about the relative merits of competing products.
With the growth of affluence and tremendous advances in literacy and science
and technology, consumerism has gradually emerged in most of the western countries
as a powerful force to reckon with, when the markets are flooded with innumerable
varieties of products which are sometimes close substitutes to each other and
particularly when there is only slight, if not negligible difference in the design, quality,
brand, grade, style, mark, finishing, packaging etc., of the different products but
considerable variances in prices, the consumers at large are flabbergasted as to what
are the exact factors that contribute towards the price variances of the different
products they are purchasing, whether there is any substantial difference at all in the
quality, size and ingredients of the various products they consume.
Added to all those, with the large scale adoption of malpractices such as
underweight, adulteration, unduly charging high prices and exploitation of consumers
by the producers in manifold ways, the consumers began to open their eyes and tried
to organise themselves into effective unions, and associations, etc., to protect their
rights and privileges and pleaded fervently with the Government to pass necessary
legislation to protect the interests of the consumers. Consumer guidance societies,
consumer councils, consumer associations, and consumer organisations etc., have
sprung up in various parts of the world viz., United Kingdom, United States of America,
France, West Germany, Denmark, Belgium etc., to protect the interests of the con­
sumers, to guide advise and counsel the consumers over various matters of price,
quality, brand, etc., of the products they are to consume, to effectively represent to the
Government, semi Governmental and private organisations and-bodies dealing in one
way or other with the matters of production, distribution, and price determination of
35
various consumer goods. The movement has spread gradually throughout the world
and found its impact in the Indian soil also.
Consumerism can be defined as public awareness of ptoblems, policies and
issues that affect consumer well-being both in private market and in the public
sector.Consumerism allows a recognition of common forces and trends in diverse
developments, such as
(a) expanded consumer education courses and programmes,
(b)consumer institutes and new consumer research thrusts in
psychology, sociology, economics and law.
(c)recently established consumer offices or agencies at all
levels of Government,
(d) expanded redress system,
(e) the current recognition of consumer affairs as a separate and
important function in corporate management,
(f) the rekindled interest of trade associations and growing popularity
of theconsumer press.6
The principle of consumer protection is essentially the protection of the unwary
customer against the trader, who might be unscrupulous in the quality or quantity of
the salable material, to get rid of the dictum of Caveat Emptor - Let buyer beware.
^ ^in the last three or four decades the market has been flooded with totally new
products, which never existed before, the products of a technological explosion. These
include computers, plastics, T.V., cordless telephone, digital watches, calculators,
36
microwave ovens, electronic machinery like typewriters and monitors and so on. These
products have been flooding the market, with a corresponding business propaganda
to push the products to the consumers through various media. Rarely, do the
producers ever bring out the possible defects or dangers inherent in thesejgadgets,
knowingly and unknowingly.
The rise of consumerism was but a natural reaction to this, since the common
man was not expected to be a know-all. He cannot be expected to know that a
microwave oven may possibly give out radiation, or some plastics may contaminate
environment or be unsafe for using in administering intravenous fluids. “The untrained
consumer is no match to the business man, who fully utilises his right to persuade the
buyer to buy his goods or services on his own conditions” (Ross Cranston - Consumer
and Laws, 1978). This is where the consumer has to be protected. The purpose of the
Consumer Protection Act (CPA) is towards this. Again, the intention of the trader to
fraud the consumer starts before the contract begins and the need for protection by
law starts at this level. This cannot apply to a professional.
While the producer has the power or the right to design the product, distribute,
advertise and price it, the consumer has only the power of not buying it. One may argue
that the producer runs the greater risk in spite of having his several rights because the
veto power remains with the consumer. However, the consumer often feels that while
he has the power of veto, he is not always fully equipped to exercise that power in his
best interest. The situation may be the result of lack of information, too much
information which cannot be digested or even misinformation from one or several
37
competing producers. This piquant situation has been responsible in a large measure
for the origin and growth of the concept of consumerism. It is worthwhile to note that
consumerism, like several other social movements such as independence movement,
civil rights movement, etc., has been the result of a social conflict and cannot, therefore,
be wished away. It will be with us till the conflict facing the consumer is resolved.
Thus it can be concluded that the consumer movement has emerged as another
‘ISM’ like socialism and communism threatening capitalism/^
ORIGIN OF GLOBAL CONSUMER MOVEMENT
The consumer movement as a countervailing defensive force to safeguard the
interest of the consumers from the abuses of economically powerful sellers originated
in the United States and it spread gradually to many other places in the world. In some
countries it became deep rooted movement and in others highly militant.7 The nations
where the consumer movement has shown much strength are United States of
America, Britain, Germany, New Zealand, France and Japan.8 Together with that there
have been found signs of new efforts in a number of other countries. Developments
and methods of coping with it differed from country to country and consumer aware­
ness also varied from one country to another. It was neither exclusive to any specific
t
country, nor was it confined to any particular continent.9 In fact, it became a world-wide
phenomenon as shown in the following table.
38
CONSUMER MOVEMENT IN DIFFERENT COUNTRIES OF THE WORLD
Originated
1900-09
1910-19
1920-29
1930-39
1940-49
1950-59
1960-69
1970-79
Country
United States of America.
Britain.
Netherlands (1926).
Norway (1939).
Ire land (1942), Denmark (1947),
Federal
Republic of Germany (1948),
Switzerland (1948), Japan (1948).
Kenya (1951), France (1952), Hungary (1953),
Iceland (1953), Israel (1955), Italy (1955),
Canada (1956), Belgium (1957),
Sri Lanka (1958), Australia (1959),
NewZealand (1959).
Austria (1961), South Africa (1961),
Luxemburg (1962), Phillippines, (1962),
Korea (1963), Yogoslavia (1963),
Trinland (W.1.1964), Nigeria (1965), Poland (1965),
Puerto Rico (1965), Malaysia (1965), India (1966),
Jamaica (1966), Mauritius (1967), Pakistan (1968),
Venezuela (1968), Taiwan (1969), Spain (1969).
St. Lucia (1970), Barbados (1970),
Guyana (1971), Singapore (1971), Turkey (1971),
Fiji (1971), Guam (1972), Mexico (1972),
Greece (1972), Montserrat (W.1.1972),
Indonesia (1973), Thailand (1973), Sweden (1973),
Iran (1974), Portugal (1974), Hongkong (1974),
Egypt (1974), Bangladesh (1978).
Source: Consumer Directory, International Organisation of Consumer
Unions, Hague, Netherlands, 1978.
'|(i)p\V)'
^
In the United States, business scene has been shaken by three distinct con­
sumer movements being early 1900’s, mid 1930’sandmid 1960’s.10 The first consumer
movement was fuelled by rising prices, uponSinclair’s Writings, ethical, drug scandals
and other related factors. During the twenties, there was a growth in consumer
consciousness stimulated by the so-called 10,000,000 Guinea-pigs11 and general
39
debunking of claims made by many producers for their products in a buyers market.
Before the first world war, Laissez Faire served to bring about the rule of Caveat
Emptor. House wives in England also faced the same situation of sellers’ sharp
practices in the market place
1O
. Although common law protected the consumer
against aggressive salesmanship, fraud and breach of promises, The British
National Standard Institute in U.K. played a significant role in arousing the interest
of consumers in 1925.13
Similar consumer awakening was witnessed in Netherlands in 1926. Public
clamours began to arise against unscrupulous sellers of certain products with the
demand for new laws and government intervention to protect the consumers.14 The
earliest consumer reports on comparative test of products was published for the first
time in the U.S.A. in 1928. European countries followed suit in comparative testing with
the creation of a Denish Consumer Association in this regard.15
<PLfiO-e. ^
The second phase of America’s consumer movement in the mid- 1930’s was
facing by factors like an upturn in consumer prices in the midst of the Great Depression,
the sulfanilamide scandals and widely imitated Detroit housewives’ strike. The ideologi­
cal background of the growth of consumer movement was provided by a series of
writings beginning with R.H.Tawney’s Acquisitive Society, followed by T.Veblen’s
Theory of the Leisured Class and more especially the joint work of Stuart Chase and
F.J.Flinch’s Your Money’s Worth.16 in 1935, a formal Consumers Union came into
existence. It built a laboratory and published Consumer Reports thereon. The union
also criticized misleading advertisements and challenged the manufacturers who made
money out of ignorant of consumers.17 Consumer organisations came into existence
in Norway and Ireland in 1939 and 1942 respectively. Norwegian consumer body was
40
not essentially different from that of the United States, although it did not define its policy
in the same way as the American Union did.
Although there was a healthy social awakening against anti- social activities
of sellers in the twenties, the real start of this movement in England came after the
Second World War. Several consumer magazines and shoppers’ guides were publish­
ed in forties and Consumer Association came into existence exposing wrong products
and to educate consumers.18
Right from 1947 to 1957 there was Consumers’ revolution in Denmark,
Germany, Switzerlnd, Japan, Kenya, France, Hungary,Italy, Canada and Belgium.
Press campaigns in favour of the consumer in these countries played a significant role
in the creation of the concept of consumerism. As in England, the women’s organisa­
tions in most of the European countries have been a mainstay of the consumer
movement. Housewives took so much interest in it that the word consumer is regarded
over there almost as synonym for housewife.19 In addition to organisations like
Japanese Shufuren, other main currents of movement were Consumer Unions,
Grassroots Consumer Groups, and Government Sponsored Consumer Groups. While
functioning autonomously, they combined from time to time for joint action.
Ofl
By about
the same time, a ‘Retail Trading Standards Association’ was formed in England to
resolve disputes between retailers and consumers.21 Because of the rapid develop­
ments taken in the consumer interest, a Molony Committee was appointed by the
British Government in the late fifties to suggest desirable change in the existing laws
to ensure further protection of consuming public.
Consumer movement is traced to
have taken route also in New Zealand and Australia in 1959. The effectiveness of the
consumer movement in these countries is both reflected in legislation and organisation
of the consumers at the local and national level. The consumer organisations test the
41
S. * V
:^9RY
At „. i.!u... SMI
Call. Mo................
products and communicate their results to the manufacturer. Some of their pamphlets
were found so useful that that the American Consumers’ Union followed suit. Like the
Americans’ they do not allow their findings to be used for advertising purpose by
commercial firms.22 As a result whereof, governments in these 'Countries passed laws
to protect the consumer interest compelling the producers to develop standards for
various products, like in America and other Western European countries (Newzealand
and Australia), advertisers are required to prove the lavish claims and self praise for
their products and services. Thus the consumer movement received its boost from
none other than the President of United State of America in 1962. John F.Kennedy
made a fine statement at the Congress, where he directly linked the well- being of
individual consumers with the national interest. He said "If a consumer is offered inferior
products, if prices are exorbitant, if drugs are unsafe or worthless, if the consumer*is
unable to choose on an informed basis, then his dollar is wasted, his health and safety
may be threatened and national interest suffers". S?*^ (ft)
WORLD CONSUMER^ DAY - MARCH 15TH
A
No Government would like to be tagged anti-consumer, thus the U.S. Bills on
Consumer Rights, for which the President himself was lobbying when he made the
speech, sailed through the Congress on March 15,1962* and declared four rights for
the consumers in his special message to the American Congress - right to safety,
right to be informed, right to choose and right to be heard. From that day, the data has
became a red-letter data in the history of consumer movementjFrom 1973 onwards,
March 15 has been observed World Consumer Rights Day andin 1989, India declared
it as National Consumers Day. The said consumer rights ftnd a place in the socio­
economic 20 point programme of the Government of India.
* Ten years later in 1972 Anwar Fazal, Regional Director of the international
Organisations of Consumers’ Union (IOCU) in one of their meetings proposed
that observance of 15th March as the World Consumer Rights Day.
& /w ^
>
The Bill gave the consumer legal rights to information, safety, choice and
representation for whatever goods or services he had purchased for a consideration.
This means that the consumer should be provided complete information on his
purchase, asked for or not; a safe product or service which would not place him at any
physical disadvantage; an arry of it from where he could choose on an informed basis;
and a right to be heard if he had any grievance. To this president Ford added a fifth
one that of consumer education, so that the consumer may be aware of his rights.
These rights have been ever dynamic and more have been added to it -- the right to
redressal being the most important. Other than this, rights to basic needs and healthy
environment were also included in the list.
Although consumer movement started in the United States in the year 1900,
the movement in broader sense as is viewed today shaped only during the last wave
of consumerism in sixties. Current public awareness of consumer activity dates from
March, 1962 when John F. Kennedy delivered a consumer message to Congress that
took cognizance of several facts that affluence alone had not necessarily generated
quality and service in the consumer goods market, that greater product information
was either inadequate, misleading or false, that some products were dangerous; and
that consumers had rights in these directions, including the right to be heard. A new
breed of consumer activists emerged as consumerists entered politics, a new focus
by the press appeared that amplified and encouraged what had been a latest discontent
of the public. Thus began a sustained period of consumer activism. Consumerism is
accepted as a legitimate development in a market oriented economy. During this
decade, the wave of consumer conscious Latin-America, Eastern Europe, Africa,
Middle- east, and South-east Asia.
43
**
The current movement in the United States was the off-shot of a set of complex
combinations of factors like technology, ecological, socio-political and marketing
discontents. Sudden pressure of rising food prices in mid-sixtfes further increased
consumer unrest and Supermarket boycotts spread throughout the country. The
availability of goods was no problem. The consumer income was growing up and
buying capacity also increased, but the manufacturers and traders were taking undue
advantage of the prevailing situation by withholding the accurate information about their
sophisticated products which could well be used in the evaluation of alternative
products and services available to the consumers. Writings of social critics, like Vance
Packard’s ‘The Waste Makers’, and Galbraiths ‘Affluen Society’ were published
towards the realization of gullibility of the ignorant and semi-ignorant public against
organized efforts of systematic hardsell and large scale intruding advertising.23 Their
works made the American consumers more conscious of their rights.
i^NADARISM
Thereafter the emergence of Ralph Nader on the American horizon gave
further momentum to the movement. His name symbolized and heralded a substantial
broadening of the scope of the concept.24 He is one of those rare idealists whose
cursed spread all over to bring about qualitative reform of industrial revolution. Most of
the credit for arousing consumer consciousness and making possible latest important
consumer legislation in the United States owes to him.25 His works inspired consumerists in Sweden, Singapore, Mexico, Greece and other developing countries in
the early seventies to establish consumer associations to safeguard consumer interest.
The consumer organisations began to exert their influence on Government as well. In
the eyes of the governments, it emerged from being a public -nuisance to legitimate
activity deserving legislative action. Many pieces of consumer legislation were passed
44
and several central, state and local offices of consumer affairs were created.26 There
is now hardly a developing country left which has not awakened and responded to this
new social movement.27
.
71
-
*
By the end of I960, consumerism had emerged as an international force.
Intellectual groups, consumer organisations and housewives organisations all involved
themselves actively in the field of social concern. The 'International Organisations of
Consumers Union’ was formed in Hague by consumer groups of United States, Britain,
Australia, Belgium and Netherlands with a view to promote world-wide cooperation in
consumer information, education and the comparative testing of goods and services.
Transcending the national level, it found poignancy by the United Nations Organisation
and as a result, the consumer Interest got expression at the 29th session of the United
s
Nations Commission on Human Rights held at Geneva in 1973.
no
In August 1977, the
U.N.Economic and Social Council passed a resolution on consumer protection, calling
upon the U.N.Secretary General to submit to it, its sixty-fifth session a survey illustrative
of the range of institutional and legal arrangements existing in the field of individual
OQ
consumer protection at the national level.
During the late seventies, the Economic and Social Council of the United
Nations (ECOSOC) evinced interest on the subject of consumer rights with particular
reference to the Third World, and passed a resolution asking the Secretary General to
place before it a comprehensive report on consumer protection. A consultant was
asked to write the report.
Organisations at global level, such as World Trade Unions, IOCU (International
Organisations of Consumer Union), ICC (International Chamber of Commerce) and
45
similar bodies were asked to submit their points of view. What emerged from the
discussions with the different bodies concerned was incorporated in the Report.
They are
a) The rights listed should have an universal recognition.
b) In actual practice, a voluntary code of conduct be developed which
all the concerned parties could follow.
c) Over a period of time, self-regulatory measures will assume place
of pride inthe markets and move towards degree of maturity and
understanding leading to fairplay and harmony.
d) Governments may resort to legislative measures, if necessary.
In all industrialised countries the recognition of consumer rights and legisla­
tions that followed have moved towards improvements in detecting shoddy goods and
sloppy services. In general the checks and balances expected out of the push-and-pull
behaviour have helped to achieve the basic objectives to some extent.
^ ■ to
CAVEAT EMPTOR
While comparing the march of consumer movement on the two sides of the
Atlantic, it is striking that in America and several countries of Western Europe, the
movement gained momentum only after the second world-war. There was a revision
of the slogan Caveat Emptor. The slogan ‘Let the Buyer Beware’ was replaced by ‘Let
the Seller Beware’. In almost all the countries, there was a concerted move to change
the totality of laws which affected the consumers.30 The growth of the consumer
movement in the leading countries found consumerism as a ‘discovery of the 20th
century’. Where the movement took root, it passed through the stages and built itself
in each of them
C*aJ- /Ily**
46
1 1 P$
&
P$QS ftrci
FART B
CONSUMER PROTECTION IN THE THIRD WORLD
AND INDIA
The growth of consumerism is the natural outcome of the forces generated by
industrial and technological revolution witnessed in the developed countries. The
impact of the consumer movement is now being felt in the developing countries which
are engaged in the task of achieving an accelerated rate of economic growth. While
the world focuses on the drama of the Third World’s enormous debt problems,
declining foreign investment, food shortages and pressures for democratization, many
developing countries are working quietly behind the scenes to improve the consumer
protection available to their citizens from the dangers of hazardous products31.
Chiefly, this is occurring through rules aimed at chemical and pharmaceutical
products and from stronger consumer protection legislation based on the Guidelines
for Consumer Protection adopted two years ago by the U.N.General Assembly.
Apart from the of the four ‘rights’ expressed by President Kennedy in April
1962, the general principles of the U.N.Consumer protection guidelines call for.
- protection from hazards to health and safety,
- access to information to make informed choices;
- availability of redress;
- promotion and protection of consumers’ economic interests.
Added to this is the freedom to form groups and organizations, to present
views in the decision making process affecting consumers.
Much of the work of implementing the guidelines has taken place at a technical
level. For example, in line with developments in the United States, Jurists in Latin
American countries have been moving towards concepts a£in to that of ‘strict liability’,
i.e., where harm can be shown to have been done, the producers can be deemed liable
even when there was no negligence or intention to defraud.
A theory of general or collective right is also being introduced. This eases
redress in cases where total damages may be significant but spread over- a large
number of potential claimants who suffered as individuals may be relatively small; for
instance environmental cases and some management practices can be affected by
this.
These developments have occurred slowly over the last 10 years so that in Latin
American countries there is now a patch work of laws and special regulations covering
different aspects of consumer protection.
But the particular aspects covered differ
widely.
Five Latin American countries have gone furthest in legislating consumer
protection; Venezuela and Mexico adopted consumer protection laws in 1974 and 1975
respectively. Colombia adopted legislation in 1982; such consumer protection bills are
now awaiting passage in many developing countries today.
Other countries have moved strongly to redress specific abuses. Chile and Peru,
for example, regard price control for ‘essential commodities’ as part of consumer
4a
protection and Panama has strict measures on consumer credit agreements. Argentina
is also considering methods of consumer redress on the neighborhood level. In Brazil,
consumer groups are pressing for recognition of consumer rights in the constitution.
During March 1986, in Montevideo, the U.N.organized a consumer protection
seminar attracting key government officials (who came on an individual basis, not in
their official capacity) from 20 Latin American and Caribbean countries to discuss the
guidelines. The outcome was the adoption by consensus of recommendations to
governments to implement the consumer guidelines as soon as possible. Countries
were also called on to share information and cooperate on standards.
But the main thrust to enhance consumer protection internationally has come
not from the U.N. but from a non- governmental organisation with a considerable history
in the field, the International Organization of Consumer’s Unions (IOCU), based in the
Hague.
Its success in promoting implementation is considered remarkable by many
observers, considering that the guidelines are not a code and thus have advisory status
only. Business representatives at the conference were impressed by the close relation­
ship between IOCU and the participants (mainly officials responsible for consumer
protection in their home countries.
The Chief representative of IOCU at the Montevideo conference was Director
Lars Broch. He cited the agreement to form an information network and a new sense
of urgency about consumer issues as the most important results of the conference.
Perhaps it is true to say that consumer protection is a cause which only a comparatively
wealthy nation can afford to worry about; a country which has.,already answered its
49
citizens more pressing needs for food and shelter, and which begins to offer them the
element of choice.33 Developing countries in particular face three clusters of problems
concerning consumer protection, he said. These were
(a) Physical safety which are linked in part with the importation of
hazardous products.
(b)Products where there is no suitable environment |or their use, for
example, some pesticides and pharmaceuticals and
(c)Problems of safety standards in countries where government
surveillance of the market was virtually non-existent and economic
protection in societies where the relationship between buyers and
sellers was relatively unstable.
In the words of Lars Broch, ‘When you don’t see the seller again the next day
cheating may occur on a large scale’. It was particularly unfortunate when this occurred
in low-income societies where consumers could not afford such losses and it was
"desperately important" that they spend every thing wisely.
‘In fact, the pressures are emerging as part of a globally independent economy
as well as the trend to democratization’, said Jane Jopling, an official at the U.N.Depart­
ment of International Economic and Social Affairs (DIESA>). As high quality imports
penetrate a developing economy, consumers come to expect higher quality from
domestically and regionally produced products as well. This can be construed hard
democratization allowed them to organize and press for these concerns.
The debt problem has an effect too. As more and more countries Increase
production for export in order to make their debt-re-payments, they often have to
upgrade quality to compete abroad, especially in the developed world where there is
a high degree of consumer protection already.
50
JROWTH OF CONSUMER MOVEMENT ININDIa)
fflsroRiCAL^ETRDsraers--------Jn our country the need for consumer protection is paramount importance in
view of the fact that there is ever increasing population and the resultant growing need
for goods and services of which there is no matching supply. Under these circumstan­
ces of a near total sellers market, buyers cannot also assert their rights of being heard.
The traders, therefore, are tempted to follow diverse practices which turn out to be
unfair to the consumer. An individual consumer in India does not find his complaint
worth pursuing due to disproportionate costs involved in redressal, unduly long time
consuming court process, fear and embarrassment. The consumer in India so to say
is apathetic to the onslaughts to which he is subject to at the market place. No doubt,
there have come on the scene some voluntary organisations claiming to espouse the
cause of the consumers. They are also constrained in their efforts due to paucity of
funds, lack of government patronage and above all, the willing cooperation of the
consumers.
The consumer in India is not organised unlike in many European countries
because of persistent exploitation in the hands of organised class of traders, manufac­
turers and the like. M.H.Whincup in his views, expressed that ‘consumer protection is
a cause which a comparatively wealthy nation can afford to worry about, a country
which has already answered its citizens more pressing needs for food and shelter and
which begins to offer them an element of choice’. However,in our country we mm find
the beginning pf scattered consumer resistance movements which are-yet 4e~§etn
im
^
Vt
C->rV3-*«i i£\i
b*
f'YVf-
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i-'y ^
r-
ow
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6^'
bcH*
t.
Mohan Dharia, the then Union Minister for Commerce and Civil Supplies while
addressing a press conference on 20th May 1978 at Madras said he would like a
consumer resistance movement to be part of the new public distribution scheme in a
country like India. He suggested that vigilance committees consisting of people not
connected with political parties could serve as a watch dog on the fair price shops and
step in where there are violations in regard to prices and quality of the articles sold.
Dharia expressed the hope that the new public distribution scheme when fully operated
would make available essential commodities to consumers all over the country at very
reasonable prices.34 Studies conducted during seventies sh'owed that the mal-practice
of adulteration had become an organised industry even by that time. The studies
revealed that some highly sophisticated techniques were adopted for this purpose.
Consumer vigilance committees were suggested by Dharia to check the administrative
lapses of the inspectorate at the local and block levels. It is important, therefore, to
observe that the organisation of a strong consumer movement is the dire need of the
day.
With the galloping rise in prices of essential commodities, the Indian consumer
has become the focus of attention of the political parties. This thrust into the limelight
has not been sudden. Since the passing of the Consumer Protection Act in 1986,
consumers are slowly coming into their own and asserting themselves.
PROTECTION IN INDIA: SOpCjpCENT jrfFORTS
India did not lag behind in this field, and came forth with the enactment of
COPRA, by which a three tier judicial system was formed to deal with consumer
problems alone. It is the only direct redressal system existing in the world today - a
commendable achievement indeed.35
52
Today consumer consciousness in India is spreading fast with every govern­
ment adding more strength to the rights of consumers. The eco-labeling of some
goods, for instance, is a direct consumer issue being tested by the government itself.
Environment has become a major area where a lot of fast action is required and
possible. In fact, ‘Choose for a Healthy Environment’ is a theme of contemporary times
for consumer groups to work upon.
Other than the eight consumer rights discussed, the ultimate and the only
weapon before a consumer is that of boycott. Though this is yet to receive a recognition
as a right, boycotting of products or services is one of the most effective methods to
bring errant suppliers to the book.
For the Indian, this is nothing new, as it was powerful weapon of the freedom
movement. It was Gandhiji who gave birth to the idea, and carried it through grit and
determination, in fact, Gandhiji* perhaps the ‘World’s greatest consumer advocate’,
according to Ralph Nader, himself a doyen in this field.
The suppliers of services, particularly public utility services would need the
words of the Father of the Nation. Then the sellers market that exists in India would
soon become more consumer oriented.
Now to sum up briefly the principal factors that contributed to consumer
movement in India either directly or indirectly are
1. Restless rise in price essentially of day to day consumption goods.
2. Poor product and service performance.
3. Acute and frequent shortages of several products in the market.
* Gandhiji said: 'A customer is the most important visitor on our premises. He is
not dependent on us. We are dependent on him. He is not an interruption in our
work, he is the purpose of it. We are not doing him a favour by serving him, he
is doing us a favour by giving us the opportunity to serve him’.
53
4. Deceptive advertising, sales promotion, and selling as media of consumer
communication through not under direct public gaze and scrutiny are never­
theless attracting the attention of consumers now a days on account of
deceptivity involved in some of them. Advertising containing false claims about
product quality and performance are not uncommpn in India, in these days.
Even the reputed firms have come out with advertisement copies which
have caused ripples of controversies in the marketing circles.
5. Sale of substandard, hazardous and unsafe products, spurious products
and duplicate products.
6. Sale of adulterated products in the market without paying an iota of attention
to the detrimental effects on the health of the consumers.
7. With-holding of inventories in anticipation of supply-demand disequilibrium.
8. Area restrictions on the distribution to sell products and obligations of
distribtion not to sell below a proscribed minimum.
9. Rising levels of income, and educational standards and increasing aware­
ness of the consumers and organised efforts through consumer societies
when discontentment among consumers reach intolerable limits, they tend to
organise amongst themselves and take legislatory, disciplinary or Governmen­
tal action against the sellers organisations. The indicators of this consumer’s
awareness are:
(a) the presence of the organised consumer groups,
(b) consumer protection legislation,
(c) and journalistic exposure of business behaviour reflecting abuse
of consumer’s interests. There is abundant evidence to suggest
the existence of these indices in India.
10. Increased leisure time.
11. Sectoral affluence of society.
12. Irrational buyer behaviour.
13. Too frequent violation of warranties and guarantees by several of the
suppliers including the reputed firms.
34
14. Environmental pollution.
15. Overcharging, underweighment and gradual deterioration in the quality of
the products.
In India various attempts have been made in recent years to organise the
consumers into powerful and effective groups to fight for their rights and privileges and
also protect themselves against:
(i) charging of exhorbitant and unreasonable prices,
(ii) poor product and service performance,
(iii) artificial and too frequent shortages of essential day to day
consumption goods,
(iv) deceptive advertising,
(v) supply of very poor and unsatisfactory quality of goods and
(vi) supply of substandard and adulterated products in the market to
the detriment of consumer’s health and life itself.
A few significant instances of these recent developments are as follows.
1. In Bombay the Association of Women Against Rising Expenses (AWARE)
was formed way back in the mid sixties by some of the enterprising house
wives to check up the rising prices. The AWARE organised a number of protest
meetings, conventions, morchas and pleaded with the Government for open­
ing fair price shops on a massive scale so as to ensure an uninterrupted flow
of essential commodities to the common masses.
2. In Delhi also consumer resistance movement has been organised in a
systematic way by the intellectuals of the metropolis to bring down the prices
charged in the coffee houses and restaurants, etc.
3. In Calcutta and some other metropolitan areas of West Bengal, the con­
sumer movement assumed aggressive dimensions and took law into their
55
hands and distributed essential commodities at fair or controlled prices. This
is of course true with the spirit and revolutionary blood of Bengalis who were
and are in the fore-front of the civil rights movement in our country.
4. In the year 1966, a Consumer Guidance Society was-iormed in Bombay to
spread the consumer movement. According to the reports available to us, this
society is actually engaged in disseminating information to the consumer over
all the matters of prices, supplies, quality, and variety etc., of the products
supplied to them and also handling their grievances before the various Govern­
ment agencies. It is also holding a number of exhibitions, lecture programmes,
seminars etc., on various issues over which the consumers are interested.
5. Another major development that deserves mention here is the setting up of
the Fair Trade Practices Association (FTPA) in Bombay in the year 1966. A
code of conduct has been evolved for the members who are adequately
instructed as to how they should protect their interests in the matters of quality,
prices, regularity of supplies etc. To elaborate further on the code of conduct
laid down by the FTPA to its members. They are as follows
(a) Every member have to charge only fair and reasonable prices and
take every possible step to ensure that the prices to be charged
to the consumers are brought to their notice.
(b) Every member have to take every possible step to ensure that the
agents or dealers appointed by him do not charge prices higher
than those fixed.
(c) In times of scarcity, every member have not to withhold or
suppress stocks of goods with a view to hoarding and/or profiteer­
ing.
(d) Every member have not to produce or trade in spurious goods or
goods of standards lower than some specified.
(ej Every member have not to adulterate goods supplied.
(f) Every member have not to publish misleading advertisements.
(g) Every member have to invoice goods exported or imported at their
correct prices.
56
(h) Every member have to maintain accuracy in weights and
measures of goods offered for sale and
(i) And not deal knowingly In smuggled goods
6. The establishment of National Consumers Service (NCS) during the 1970s
gave a great fillip to theconsumer movement in India. The NCS has undertaken
a number of programmes and has been organising activities, connected with
the problems of consumer research, consumer cooperatives, consumer resis­
tance movement etc.
7. The Consumer Resistance Movement which developed initially in the big
cities like Bombay, Calcutta, Delhi and Madras etc., is gradually spreading to
various other smaller cities and towns also in the recent years though with a
snail’s pace. 1
57
PART - C
NEED FOR CONSUMER PROTECTION
Consumer is the focal point of all the activities. In fact he is the very basis which
supports superstructure of all operations in the society. Consumer interest, therefore,
should receive first priority of all. The need for consumer protection is now being felt
more than ever before. Among the myriad products in the market, consumer is today
nursing a feeling of helplessness, because he feels he is being systematically victimised
as regards quality, price of products and services available.
As a citizen, as a tax payer and as a buyer, the consumer should have the right
to expect that he will get the right type of goods of the right quality at the right time and
at the right price. In practice, it is well known that the consumer is the most ignored,
the harassed, the most suffering but most domicile citizen. The consumer’s plight with
regard to availability of items like kerosene, sugar and cooking gas is so pitiable that
he has resigned himself to his ‘fate and classified himself as the unimportant person’
on the other hand, there is the oft repeated statement that ‘Consumer is always right’
and the customer is the King . On the other hand, the legal position of a buyer has
been expressed in the famous expression Caveat Emptor - Let the buyer beware.36
%
WHY CONSUMER PROTECTION
While the profit in any business is not a crime and it is essential for survival and
growth, illegal profit or profiteering through questionable means like product adultera-
58
tion, fraud, inflationary price practices like hoarding, speculation, black- marketing and
so on are considered both anti-social and anti- national.
The list of instances and kinds of exploitation through malpractices adopted by
business man is a very long one. We may mention some of them to indicate the gravity
of consumer exploitation so as to prove the dire need of consumer protection and
education. They are
1. lack of safety regulation;
2. food adulteration;
3. short weights and measures;
4. misuse of colouring matter;
5. limitation of manufacture;
6. blatant misleading advertisement;
7. conspicuous consumption;
8. hire purchase plans;
9. advertisement tactics;
10. sales gimmicks;
11. civil practices;
12. massive profiteering and
13. illegal trading etc.
The above type of malpractices and the consequent exploitation of consumer
interest on a large scale will certainly indicate the pressing and urgent need for
59
consumer protection and consumer guidance in India. We find that consumer is a very
unimportant person In the market.
Consumer protection may be viewed from three angles. The first is the physical
protection of the consumer...measures to protect consumers against products that are
unsafe and endanger health. The second aspect is the protection of the consumer’s
economic interest...measures to protect him against deceptive and other unfair trade
practices and to provide adequate rights; and means of redress. The third and equally
important aspect is monopoly position and restrictive trade practices.
HOW TO PROTECT CONSUMERS
Consumers can be protected by37
t
1. self help;
2. legislative action by Government;
3. business, trade and industries following fair trade practices and
4. giving a fair deal to the dealer/retailer.
Self regulation by business will minimise the need for extensive government
intervention. The market profession can regulate its own behaviour and actions by
self-discipline and by raising ethical standards, business community must read the
writing on the walls and take without delay, appropriate steps to regulate its conduct
and cultivate self discipline and self regulation in the larger national interests. Let it be
noted that this is not merely for protecting the consumer interest but also to protect the
self interest of the business community itself. Enduring and positive improvements in
business practices can be brought about by the businessmen themselves and these
6(9
changes should be based on the inner will or desire rather than from the external force
or discipline. Many trade associations have moved positively to respond to growing
consumer satisfaction. This response was due to the increasing threat of government
regulation. Purely voluntary efforts of self-regulation by industry or trade are not likely
to be successful, because there are no sanctions in the form of some enforcement
machinery. Moral sanction and moral response or obligation may not be powerful for
enforcement if all the members of the trade association do not have a higher sense of
discipline, and suitable temperament, self regulation and self control etc.
Chamber of commerce and trade associations can play an effective role in
self regulation. Consumer protection is not their normal expected function. Hence a
new set of association have to be set up on behalf of trade to offer consumer guidance,
consumer education and consumer protection. In India we have such an organisation
called Fair Trade Practices Association (FTPA) for enforcing a mode of conduct in fair
trading. Complaint handling machinery may be entrusted to special institutions such
as MRTPC. Such special bodies can also evolve a code of conduct for fair trade
practices - a form of self regulation.
In the past marketing legislation was by and large business oriented and not
consumer oriented. Statutory regulation is the crudest form as well as last resort to
secure a disciplined business conduct. Legislation gives statutory protection to in­
nocent and ill informed consumers against unfair trade practices. For honest people,
self regulation works well and legislation is superfluous.
We have at present a series of legislation with consumer orientation. The
consumer legislation recognises consumers bill of rights and tries to protect those basic
61
rights of consumer in the market place. Legislation also enables the consumers’ rights
to represent their interest in all regulatory government agencies.
Failure of business to adopt marketing strategies from consumer view point
and develop consumer oriented marketing concept, is really responsible for the growth
of consumerism and consequent legislation to provide consumer protection.
Consumers are ignorant of their rights and even where they are made aware
of the same, they are either unable or unwilling to pursue them. With parochial and
regional interests predominating over national ones, divided by a multiplicity of lan­
guages, customs and traditions with mass illiteracy offering a solid obstacle to rapid
progress to consumer education, any attempt to quicken the pace of the consumer
movements is bound to be difficult.38
The consumer himself was illiterate and ignorant and had hardly any bargain­
ing power. He is of course not organised and is not in the least conscious of hjs rights.
He is therefore exploited in a number of ways.
The basic aims of consumer protection laws have been summarised below.39
1. Prescription of standards of goods and services to be provided to con­
sumers.
2. Prohibition regulation of undesirable practices.
3. Prescription of terms to be implied into contracts made with consumers.
4. Establishment of bodies to receive complaints from consumers to inves­
tigate these complaints and to take action.
5. Establishment of machinery to promote the education of consumers.
62
6. Licensing and on-going regulation of the types of persons who may be
permitted to supply certain types of goods and services to consumers.
7. To provide speedy redressals, the procedures envisaged for the quasi-judi­
cial machinery are simple, inexpensive and time-bound. No fees have been
prescribed for fill in of the complaints before any redressal forum.
NEED FOR CONSUMER PROTECTION IN INDIA
A consumer in a developing economy like ours, suspectable to bouts of short
supplies, is not only taken for granted but also systematically taken for a ride, be it a
matter of quality of goods or prices or rendering of services in public utilities.
On first February 1986, the Union Government had suddenly announced a
massive hike in the prices of petroleum products. This has sent a shock wave to
consumers all over the country as this hike was likely to create inflationary pressures
in the economy by setting a chain reaction in several other areas, thus hitting the
common man severely. This step, paradoxically was taken at a time when there was a
sharp downward trend in the international market and the world oil prices had slumpted
from $32 to $19 a barrel, due to glut of oil. The Railway Budget and the Union Budget
have also contributed a bit in pushing up the prices in a general way.
To cite another instance, the administered prices of wheat and rice which
increased recently through the granaries were overflowing. Whom should the con­
sumer blame for these price hikes?
Let us take public utility services. In railways, even after 37 years of inde­
pendence, the performance is very poor. Overcrowding is simply eluding a solution.
The Railways are not in a position to ensure punctuality. The maintenance leaves much
to be desired and the amenities are shrinking.
The road transport in India has the highest rate of road accidents i.e., 34.6 per
1,000 against 14 in America, 13.7 in West Germany and 4.8 in Sweden. According to
a study by National Transportation, Planning and Research Centre, every four minutes
a persons is killed in this country.
in banking sector, the environment is non-competitive. There are complaints .
regarding delay in handling of transactions, discourteous behaviour and general
attitudes of unconcern and apathy of the clients. Customer satisfaction matters not a
bit to the business of the banks.40
The country’s telephone system, according to the Public Accounts Committee,
is working as a most unsatisfactory manner. Periodic network breakdowns, dead
phones and indifferent operators have done much to sustain the criticism.
Regarding the supply of goods, the Indian consumer is cheated of about Rs.
1600 crores a year through defective weights and measures, according to an official
survey. Similarly, supplies of spurious drugs, butter, fertilizers and components are
available in the market without any check.
The consumer thus gets a raw deal at every available opportunity. Hence, the
Government’s reported decision for getting up a Central Consumer Protection Council
was considered a lively and welcome step. How far it would be effective in tackling the
problems is a matter that needs to be considered. As we all know, there are already
number of legislations such as Essential Commodities Act 1955, Prevention of Food
Adulteration Act 1954, Prevention of Black Marketing and Maintenance of Supplies of
Essential Commodities Act 1981, Agriculture Produce (Grading and Marketing) Act
1937, Drugs and Cosmetics Act 1940, Standard Weights & Measures (Packaged
Commodities) Rules 1977, Industries Development and Regulation Act, MRTP Act
1969, which are supposed to protect the consumer’s interest.
By and large, consumers do not seem to have gained anything by these laws,
on the other hand, they have always remained at the receiving end, vis-a-vis the
suppliers. It will thus, be evident that mere passing of enactments or setting up of
Consumer Protection Council will not itself alleviate the hardships of the consumers.
What is needed is determined efforts of Government, business community and
consumer organisations to bring about the desired changes by appropriate action.
CHANGING SCENE OF INDIAN CONSUMERS
The character of the Indian consumer has changed qualitatively and quantita­
tively. The most comprehensive survey conducted in 1987-88 by the National Council
for Applied Economic Research (NCAER) suggests that consumer durables are used
by income groups covering at least 500 million people - that is, virtually all groups above
the poverty line. A separate study of Rajasthan villagers by
N.S. Jodha shows that
even people below tho poverty lino buy durablos llko radios.
The NCAER data shows that the top one-tenth of the population (80 million
people) account for less than half the consumption of most consumer durables. This
upper class includes what is usually called middle-class, the salaried professionals
and medium business class. The second NCAER category - what it calls the middle
30 per cent - included much of the organised working class.41 The third category
is the bottom 60 per cent, which includes those below the poverty line as well
as those slightly above it.
63
TABLE 2.2
CONSUMPTION PATTERN OF SELECTED CONSUMER GOODS
Consumer durable
Share of purchase by income
;
share of
share of
share of
top 10%
(80m)
Black & White TV(Regular)
Black & White TV
Colour TV Regular
Mono two-in-one
Mono cassette recorder
Radio (portable)
Table Fans
Bicycle
Mopeds
Scooters
Motor cycles
Electric stoves
Electric Iron
Mixers
Sewing Machines
Moulded Suitcases
Mach.wrist watches
Wrist watches (quartz)
bottom 60%
(480m)
40
35
61
46
38
25
37
18
44
64
64
35
39
60
37
49
26
41
20
22
11
19
23
36
22
46
13
08
08
18
19
09
25
13
33
24
middle 30%
(240m)
41
44
28
35
39
39
41
36
44
28
28
47
42
31
39
38
42
35
%share
Rural
28
35
18
46
61
72
54
75
48
28
45
31
41
19
39
24
71
44
Source: National Council for Applied Economic Research Report 1987-88.
This category corresponds roughly to people with a per capita consumption
below Rs.200 per month in 1987-88. It is remarkable that the bottom 60 per cent
accounts for the purchase as much as
(a) 33 per cent of mechanical wrist watches,
(b) 22 per cent of small black and white TVs,
(c) 25 per cent of sewing machines,
66
(d) 24 per cent of quartz wrist watches,
(e) 23 per cent of mono cassette recorders,
(f) 11 per cent of colour TVs,
(g) 13 per cent of mopeds,
(h) 8 per cent of motor cycles,
(i) 13 per cent of moulded suitcases.
Note that the top 40 per cent of the population adds up to 320 million people.
The substantial consumption figures for the bottom 60 per cent suggest that people
belonging to atleast the top 500 million are participants in boom in consumer durables.
It is plainly false for economists to pretend that durables are only used by the pampered
elite. The rich consume more, of course, (that is why they are called rich). But the non
rich are major consumer too, running into millions. Curbing the production of consumer
durables through taxes and outright bans will not affect the elite (who already own such
goods), but will adversely affect poorer people who are not yet owners.
The amazing fact revealed by the NCAER data is that even people with very
low income are willing to scrimp and save in order to buy durable. It also seems likely
that remittances from relatives in urban area and abroad are used by poor rural
households to purchase durables.
The continuing boom in durables is not because every rich family is buying a
second or third TV set or moped every year. The boom shows that a large number of
people who could not earlier afford to buy these goods are now becoming buyers. This
is a sign of rising prosperity that should be welcomed.
67
From the view point of industrialists, the NCAER provides welcome evidence
that the demand for consumer durables spreads right across the income spectrum.
Since the consumption base looks so broad, producers can be confident that demand
will not taper off after elite consumption reaches saturation point. Demand will continue
to rise because many millions of people every year are getting rich enough to buy
durables.
AO
A very significant chunk of the new purchasers are from rural areas. The
Government wishes to focus on the needs of rural areas. The NCAER data shows that
rural needs include consumer durables on a rising scale. Indeed items like motor cycles
and mopeds improve mobility in rural areas and thus represent part of the rural
infrastructure.
CHANGING PATTERNS OF CONSUMER BEHAVIOUR IN RURAL
MARKETS
The data shows that rural consumers are as keen on durables as urban ones.
Rural areas account for the lion’s share of purchases of items like mechanical watches
(71%), Radios (72%) Mono cassette recorders (61%), and table fans (54%) Rural areas
even account for as much as 45 per cent of motor cycles, 48 per cent of mopeds, 44
per cent of Quartz watches and 35 per cent of 14 inch Black and White TV sets.
The life-styles and purchasing patterns of rural consumers are undergoing a
significant metamorphosis. Widespread availability of consumer products in the villages
during the last decade, is changing the lives and attitudes of rural consumers. Exposure
to electronic media like TV and radio has made the rural consumer more aware,
conscious and discriminating. The specific changes taking place in rural purchasing
patterns and habits, due to the influx of consumer products in the villages, are now
crystallising.43
Quality of Life
Increased incomes and improved awareness levels, have made the villager
seek a better quality of life. The rural consumer now demands a wider range of
consumer durables and non-durables. Rural housewives want products like stoves and
pressure cookers which make cooking for the family easier and faster. The rural
housewife also desires to choose her clothes from a wider variety of designs and
textiles.
The desire of the rural dweller to upgrade the quality of his life has led to
significant increases in the market sizes of consumer products. The market for
packaged consumer products-increased from Rs. 733 crores in 1984 to Rs.2083 crores
in 1989. The contribution of the rural market to the total Indian market increased from
28 per cent to 37 per cent during the same period. Rural markets grew at 17 per cent
till 1987 by 23.3 per cent in 1988 and by 41 per cent in 1989. NCAER data shows that
a higher proportion of rural income was spent on consumer products. Rural markets
today account for them bulk of the market in a number of product categories e.g. soap
(59 per cent), razor blades (50 per cent), packaged tea (40.5 per cent), analgestic
tablets (45 per cent) and batteries (56 per cent).
Rural consumers are buying two-wheelers in increasing numbers to improve
their personal mobility. Improved mobility of the farmer, is giving him surplus time. Many
69
farmers are using this time to start ancillary agricultural activities, like poultry and fish
farming. The desire to upgrade living standards is also evident from the number of TV
antennas visible in any village. Villages with a population of 5000 - 7000, have about
25-35 TV sets, of which at least 5 are colour televisions. A number of villages, with a
population of around 5,000 have 2-3 VCR also (see table 2.2).
Brand-Consciousness
Rural consumers are more knowledgeable about the availability of the different
brands of a product. For example, a decade ago, a rural consumer would go to a shop
and merely ask for a tablet of soap. He would use the same tablet for bathing as well
as for washing his clothes. Today, the same villagers asks for a bathing soap by its
brand name. He also buys a detergent bar for washing his clothes, and asks for it by
brand name. Commercials on radio and television are educating the rural dweller on
the benefits of various brands.44
Sharpened brand awareness is accompanied by brand loyalty, whenever the
rural consumer is satisfied with the performance of a product. Advertising and promo­
tion in the rural areas will have to be sharply-focused to make the consumer switch
brands. Companies will also have to keep the profile of the rural consumer in view,
while determining the positioning of a new product. Heightened brand awareness
among rural consumers leads to a larger number of products being stocked by the
rural retailer. The total number of items stocked by a rural retailer have increased from
200 to about 500 during the last decade.
70
Willingness to lnnovate/Experiment
The rural consumer is no longer suspicious of new urban products. He is
willing to innovate and experiment with new products. This makes it easier to get higher
trial rates when new products are launched in the village.
Fashion-Consciousness
The villager is becoming more conscious of how he.or she looks and grooms.
Sales of textiles are on the increase. Villagers are also buying ready-made garments
like shirts, trousers, shorts and frocks for children. In a village called Aachrol with a
population of 7000, about 45 kilometers from Jaipur, five shops sell ready-made
garments. The market for cosmetics is growing at a much faster pace in the rural areas
as compared to other products like toiletries, foods, beverages and OTC products. The
share of cosmetics in the rural market has increased from 2 per cent in 1984 to 3.5 per
cent in 1989.45
Role Of Women
The influx of consumer products in the villages has highlighted the role of the
rural housewife. Snehas now become a key influencer and decision-maker in all buying
decisions. A decade ago, consumer products were not easily available in the village.
The farmer traveled 50-100 kilometers, alone, unaccompanied by his wife, to a ‘mandhi’
or feeder market to purchase household necessities. The farmer thus made all the key
buying decisions regarding the product or the brand to be purchased. Today the rural
housewife increasingly makes up her mind about what she will buy for her family, the
literacy rate among women has also increased from 29.75 in 1981 to 38.42 per cent in
71
1991. The widespread availability of consumer products in the villages has underscored
the role of the rural housewife as a dominant factor in household buying decisions.
Attitude Towards Money Savings
The days when the villager was a defeatist and believed in the inevitability of
‘Karma’ and fate are getting over. Today, the villager is beginning to believe that he
can mould his own destiny. The pursuit of money is no longer looked down upon. The
villager realises that increased productivity leading to a higher income, can upgrade
his living standards. The villager is no longer concealing his savings in an earthern pot,
buried under the floor of his house. Today he spends his surplus income on clothes,
radios, and transistors. He also invests in LIC policies and keeps his balance savings
in a local bank.
Erosion Of Suspicion
Rural dwellers have traditionally been suspicious of city- folk. This suspicion
is now gradually eroding. Television commercials add to the credibility of a product
promise. Moreover, the villager has used a number of products like soaps, torches,
transistors, etc., over the last two decades and found them adding value to his life. He
is therefore willing to listen to manufacturers and prone to believing them.46
Value For Money
However, allured the average villager may be of city life and goods, he has
limited funds to splurge. The rural housewife therefore, expects value and quality, for
every rupee that she spends. She will not be duped easily since she values the limited
money that she possesses. It is therefore important to ensure that rural consumer is
not taken for granted regarding quality.
Preference For Premium Products
The rural consumer who has the means, is increasingly shifting from the
medium-priced popular brands to expensive premium products. It is not surprising
anymore to see Liril soap, Britannia biscuits, and Lakme lipsticks in the villages. The
villager who has the money, is willing to spend it on premium national brands, even
though they are more expensive than locally manufactured brands, since he is
learning to value quality.
Desire To Urbanise
Television, Hindi films and examples of friends who have prospered in the
cities, make the rural consumer yearn for the good city life. However, not all villagers
can migrate to towns and find good jobs. They satisfy themselves by purchasing wellknown brands of toiletries, cosmetics, packaged foods like biscuits etc., in the village
itself. Purchases of such consumer goods, gives the rural consumer a psychological
feeling of being a part of the urban cultural ethos.
Large Pack Sizes
In the rural areas where incomes are low, the rural consumer yet buys his
requirements of oil, pulses, rice, soap and detergent 3 to 6 times a week. He either
buys small packs of these items or small quantities in a lose form. This pattern of
purchases prevails in states where incomes are poor like Bihar, Orissa and Central and
Eastern U.P. However in areas where farm-incomes are high, Punjab, Haryana, West
U.P., Maharashtra and Karnataka, the villager is increasingly purchasing larger pack-
73
sizes of consumer products. It will be a critical error to push srrigll packs of consumer
products indiscriminately across all rural markets. There are an increasing number of
rural areas in which the large packs are outselling small packs. Companies need to
identify such prosperous markets to maximise sales, by pushing the larger packs.
Political Awareness
Villagers tend to be well-informed about national affairs. Radio and TV play a
major role in generating political awareness. The villager seems to be more interested
in politics than the urban-dwell. He does not spend 2-3 hours commuting to his place
of work and thus has more time at his disposal for discussion and debate. This
heightened political awareness underscores a higher level of overall consciousness in
the rural areas. Discussions with the village elders on a ‘charphoy’ in a village in Haryana
or a chat in a ‘dhabha’ in U.P. late in the night, will provide good clues to the next
harvest. Such meeting also provide information and reactions of the villagers to new
consumer products.47
Seeing is Believing
Rural consumers have greater faith in a product if they actually see it in use.
It is therefore useful to conduct demonstrations with a new product to strengthen
credibility. Demonstrations and propaganda operations also increase the trial rates of
new products. For instance, if a new cooking oil is being launched, it would be useful
to sample ‘samosas’ or ‘kachoris’ fried in it. If a new detergent powder is being
launched, the chances of trial will be higher, if the soiled clothes of the villagers are
washed at selected rural outlets.
74
Role of Retailer
The rural consumer has always relied strongly on the recommendations of the
rural retailer. The bond between the rural retailer and the rural consumer has always
been stronger than the bond between the urban retailer and the urban consumer. The
stronger bond in the rural areas is due to the heavier interdependence between the
rural consumer and the rural ‘bania’ or grocer. A farmer like Ramesh Seoni in a village
like Chandwazi (population 2000 located 60 kilometers from Jaipur), can visit
only 4-5 shops for purchasing household necessities. Similarly if a rural retailer
like Banwarilal in Chandwazi, were to tarnish his reputation by charging higher
prices or selling sub-standard quality goods, he would be ostracised by the 400
families in the village.
The improved availability of products in the rural areas has made the farmer
depend more heavily on the recommendations of the village retailer. TV and radio
commercials make the rural consumer aware of new products. However, these
commercials are impersonal. The retailer introduces the personal element, by explain­
ing the product-usage to the farmer.
Role of Opinion Leaders
The opinion leaders in a typical village are the ‘sarpanch’ (headman), members
of the Panchayat, the ‘gram-sevak’, the school-master, doctor and the government
engineer. The use of consumer products by these persons, has a robust demonstration
effect, in influencing other villages to buy new consumer products. There are a large
number of villagers where no soap is used for bathing or for washing clothes. Countless
villagers do not brush their teeth with tooth powder or tooth paste. They clean their
75
teeth with finger clipped in salt, or by chewing a ‘neem’ twig (datan). The arrival of a
school teacher or a doctor using soap and tooth paste gives a tremendous fillip to the
consumption of these products in the village.
Impact of Hindi Films and TV Serials
Hindi films have always been a major factor influencing attitudes and life styles
in the villages. They have also been the catalytic influences to encourage migration
from the rural to the urban areas. In a film called ‘Adaiat’ Amitabh Bachchan has a
meteoric rise from an impoverished villager to a savy, prosperous urbanite. This
dream allures thousands of villagers to the cities. Hindi films continue to be the
major influencers of the dreams, aspirations, life styles, attitudes and conduct
of the villagers.
Popular TV serials like ‘Humlog’, ‘Ramayan’ and ‘Mahabharat’ also influence
the values and outlook of villagers. These seriaishave a greater influence in the rural
areas than in the urban areas. When popular serials like the Mahabharat were on, the
entire village watched the serial. All normal life came to a standstill and the villages wore
a deserted look.
Break Down of Feudal Structures
Indian villages have functioned on the traditional-caste structure. The
‘Brahmins’ are perceived as being at the upper end of the hierarchy. They are followed
by the ‘Kshatriyas’ (Warriors) and by the Vaishyas (traders). The ‘Shudras* (untouch­
ables) are at the bottom end of the social scale. The Brahmins always commanded
respect, reverence and awe, by virtue of their social standing. During the last three
76
decades, the landlords flats) commanded authority by virtue of their economic
prowess. The power equations in the village are changing again. The villager who owns
a VCR or colour TV or a Maruthi gypsy is now held in esteem. The influx of consumer
products specially durables is leading to a break-down of the caste and
feudal structures that have governed rural life for many centuries.
Leisure
Villagers are beginning to value leisure. They spend their free time listening to
the radio or a two-in-one and watching TV. Playing sports is also becoming a favourite
past time in the villages. ‘Gulli-danda’ kite flying and 'kabbadi’ yet continue to be the
favourite games of the villagers. However in villages like Berni (U.P.), Kini
(Maharashtra), Aachrol (Rajasthan) which are close to cities, children can be seen
playing cricket or volley-ball. The children may use ordinary sticks as stumps, but Sunil
Gavaskar’s feats beamed by Doordarshan have sowed the seeds of sports in the
villages. The next decade will see a growing demand for sports goods in the bigger
rural markets with a population of 8,000 to 15,000. Villagers are also beginning to travel.
A decade ago, a villager rarely stirred out of his village. Today he travels to visit his
relatives in other villages. He also travels to visit religious shrines. The villager does not
yet travel for fun or sight seeing. Tourism as a leisure activity, for the rural consumer,
is yet one or two decades away.
The next decade will witness a major spurt for all types of products in the
villages. With increased prosperity, literacy and awareness, the villager will be the key
target consumer in the future.48
77
CONCLUSION
The foregone analysis clearly reveals that the global consumer movement has
been burgeoning and there has been an increased awareniSss especially in the
advanced countries, on the various aspects of consumer protection. It is also evidence.
that the consumer movement has linkages with the stage of economic development,
a country is passing through. Thus consumer movement has had its roots in the highly
developed countries and it is just creeping in an organised manner into the third world
countries. So consumer movement has touched India and people are becoming aware
about the movement, however, a large section of Indian consumers are yet to be
enlighten about the importance of consumerism. The need for consumer protection in
India has become far greater when viewed against the changing scene of Indian
consumers especially on the rural side. While it is evident that illiteracy and ignorance
and apathy of Indian consumers both in urban and rural areas are pre-dominantly
affecting the quality of life because of the exploitative tendencies of the business
community, there is every urgent need for creating more consumer awareness besides
making effective legislation.
78
/
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79
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p.28.
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p.33.
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p.26.
38. Ibid.
p.28.
39. Ibid.
p.30.
40.See Proceedings of Seminar on Consumer Welfare -A Concern for All, Organised
by Indian Merchants Chamber, Bombay on 25 April, 1986,
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44. Ibid.
p.37.
45. Ibid.
p.80.
46. Ibid. p.32.
47. Ibid. p.15.
48. Ibid. p.10.
80