Consumer Awareness Unit -1

Consumer

A person who purchases goods and services for personal use.

An individual who buys products or services for personal use and not for manufacture or resale. A
consumer is someone who can make the decision whether or not to purchase an item at the store, and someone who
can be influenced by marketing and advertisements. Any time someone goes to a store and purchases a toy, shirt,
beverage, or anything else, they are making that decision as a consumer.

What is Consumerism?

Consumer is regarded as the king in modern marketing. In a market economy, the concept of consumer is
given the highest priority, and every effort is made to encourage consumer satisfaction.

However, there might be instances where consumers are generally ignored and sometimes they are being
exploited as well. Therefore, consumers come together for protecting their individual interests. It is a peaceful and
democratic movement for self-protection against their exploitation. Consumer movement is also referred
as consumerism.

Features of Consumerism

Highlighted here are some of the notable features of consumerism −

 Protection of Rights − Consumerism helps in building business communities and institutions to protect
their rights from unfair practices.

 Prevention of Malpractices − Consumerism prevents unfair practices within the business community,
such as hoarding, adulteration, black marketing, profiteering, etc.

 Unity among Consumers − Consumerism aims at creating knowledge and harmony among consumers
and to take group measures on issues like consumer laws, supply of information about marketing
malpractices, misleading and restrictive trade practices.

 Enforcing Consumer Rights − Consumerism aims at applying the four basic rights of consumers which
are Right to Safety, Right to be Informed, Right to Choose, and Right to Redress.

Advertising and technology are the two driving forces of consumerism −

 The first driving force of consumerism is advertising. Here, it is connected with the ideas and thoughts
through which the product is made and the consumer buys the product. Through advertising, we get the
necessary information about the product we have to buy.
  Technology is upgrading very fast. It is necessary to check the environment on a daily basis as the
environment is dynamic in nature. Product should be manufactured using new technology to satisfy the
consumers. Old and outdated technology won’t help product manufacturers to sustain their business in the
long run.
Classification of Consumers On the Basis of Age
The age of the customers also influences their buying decisions. On the basis of age, customers can be classified into
four categories children, youngsters, middle-aged and elderly.

1. Child Consumer
Children generally buy their requirements like books, pencils, pens, colour-box, sweets, biscuits, toys,
toffees, etc. They also often purchase grocery items for the family. The generally lack previous experience in buying
articles. They are easy type of customers. They do not argue because of innocence and age. However, at times they
bargain but never insist much on that.

2. Young Consumers
Young consumers are generally impatient as well as smart. They generally want to enjoy life by purchasing the most
up-to-date and fashionable commodities. Because of their impatience, they get irritated soon. As such they take
quick decisions in purchases. They are very particular about fashion, latest design and colour. They lack experience
in purchasing articles and are also not argumentative.

3. Middle-Aged Consumers
The middle-aged customers are responsible family members earning a considerable income and having a status in
the society. These types of customers are generally proud of their achievements, possession and position. Such
customers, because of their age and experience are proud of themselves. They are very much conscious about the
quality but not about fashion.

4. Elderly Consumer
Elderly and old aged customers generally are experienced in buying goods. These customers are serious and
cautious in money matters. They do not like to be advised by the salesman. They feel proud if they are given respect
and consulted. They like to be appreciated for their experience and wisdom.

Some of elderly people may be physically handicapped like hard of hearing, unable to talk clearly, feeble eyesight,
etc., due to old age. Some elderly people like to look younger than what they are.

Customers may be classified on the basis of sex; namely Male Consumer and Female Consumer.

1. Male Consumers
Male customers are generally experienced and learned. They are not interested in shopping for longer periods. They
get bored if they are compelled to stay. As such they take quick buying decisions. They generally do not bother for
bargaining as they are more time-conscious. They also avoid unnecessary talk with the salesman.
Male consumers are usually interested in quality and long lasting goods. In many cases it has been found that male
consumers never go for the latest fashion. However, they always try to be innovative by trying out new products and
finding new methods of using them.

2. Female Consumers
There are certain peculiar characteristics of women customers. They are generally interested in the latest fashion,
design, style, colour, etc. They take more time to select an article and do not believe the salesman easily.

Female consumers prefer bargaining and make their own judgement about the product. They tend to bargain by
visiting different shops. They often pose vague and unnecessary questions. They are generally price conscious and
status conscious. They want to look superior in comparison with others and enjoy variety. They prefer good quality
articles at cheap prices.

4 types of consumer buying behavior

Wants are unlimited and the resources to satisfy these wants are limited. So the consumers think rationally before
buying any product. Buying a toothpaste is totally different from buying a luxury car. The more expensive the good
is the more information is required by the consumer. There are four types of consumer buying behavior on the basis
of buyer involvement while purchasing any product.

High involvement Low involvement

Significant differences Complex buying Variety seeking behavior (washing

between brands behavior (motor cycle ) detergent)

Few differences between Dissonance buying Habitual buying

brands behavior (floor tiles) behavior (toothpaste)

High involvement:- the term means when the consumer is highly involved while buying a product. Generally this
situation happens in case of expensive or luxuries goods. Like while buying a diamond necklace a consumer is
highly involved.

Low involvement:- this term means when the consumer is not highly involved while buying a product. It happens in
case of low price goods. Like while buying toothpaste a consumer is not highly involved.

Significant differences between brands:- it means when there are significant differences between brands.

Few differences between brands:- it means when there are very little differences between brands.

1) Complex buying behavior:- when the consumer is highly involved in the buying and there is significant
differences between brands then it is called complex buying behavior. So in this case the consumer must collect
proper information about the product features and the marketer must provide detailed information regarding the
product attributes. For eg. Consumer while buying a motor cycle is highly involved in the purchase and has the
knowledge about significant differences between brands.

2) Variety seeking behavior:- in this case consumer involvement is low while buying the product but there are
significant differences between brands. Consumers generally buy different products not due to dissatisfaction from
the earlier product but due to seek variety. Like every time they buy different washing detergent just for variety. So
it is the duty of the marketer to encourage the consumer to buy the product by offering them discounts, free samples
and by advertising the product a lot.

3) Dissonance buying behavior:- here consumer is highly involved in the purchase but there are few differences
between brands. Like consumer while buying a floor tiles buy them quickly as there are few differences between
brands.

4) Habitual buying behavior:- in this case there is low involvement of the consumer and there are few
differences between brands. The consumer buys the product quickly. For eg. Toothpaste.
consumer place of residence

The "residence" of an individual is the address registered in the population census or in a similar register or the
address indicated by that person to the tax authorities, unless there is proof that this address is not real.
The term "habitual residence" of a natural person means the place where they habitually live due to personal and
occupational ties.
When the natural person resides in one country and has their habitual residence in another country, priority
shall be given to their habitual residence, unless it can be demonstrated that the service is really used at their actual
home.

TYPES OF INCOME
While there are many sources of income, all income is separated into two types for Family
Medicaid purposes: earned andunearned.

A. Earned Income

Earned Income means money received, in cash or in-kind, from wages, salary or commissions in
exchange for the performance of services by the employee. Earned income includes payments
made at one time for services performed over a long period of time.

Self-employment earned income means money received, in cash or in-kind for producing or
selling goods or services, after all allowable expenses are subtracted from the income. See Section
5164 for policy on determining self-employment income.

B. Unearned Income

Unearned Income means: All income that is not considered earned income. It includes:

 Retirement benefits, Social Security benefits, and Veteran's pensions;

 Dividends and interest;

 Unemployment compensation;

 Strike benefits;

 Direct child support;

 Royalties;

 Contest or lottery prizes and Bingo winnings;

 Payments from any type of cash assistance program;

 Deposits into joint accounts owned by a Family Medicaid applicant or recipient adult
or child and any person outside the household;

 Cash gifts by someone who is not in the household; and

 Net amounts deemed to the household from excluded stepparents, alien sponsors, and
parents of minor parents.
Consumer Goods and services
Examples for consumer goods are soap, toothpaste, hair-oil, radio, television, fridge, motorcycle, car and so on.

Types of Consumer goods

Consumer goods may be basically of two types:

1. Single-use goods and

2. Durable-use goods.
Single-use goods are those which get exhausted in one use, e.g., chocolate, biscuit, ice-cream etc. On the other hand,
durable-use goods are long lasting, e.g., television, fridge, motorcycle, car, etc.

Consumer goods are bought for the consumption of the ultimate buyer himself or any of his family members, friends
or relatives.

What does a consumer goods market consist of?

The market for consumer goods consists of people who have the necessary purchasing power. Such people must
have a need for a particular product. In a competitive market, various brands of the same product are available. Of
these various brands, one particular brand alone is capable of satisfying the buyer’s wants, which he buys.

Luxury model cars are being marketed in India. Such cars do have a potential market here. There are consumers
with the capacity to buy these. Ford Ikon, Honda City, Mitsubishi Lancer, Toyota Qualis, Hyundai Accent are
examples. One may show preference for Ford Ikon and another may prefer Toyota Qualis. But all these cars are in
demand.

Classification of Consumer Goods

Consumer goods are classified into three categories:

a. Convenience goods.
b. Shopping goods, and
1. Convenience Goods
Goods that are purchased by the consumers as a matter of daily routine are called convenience goods. Buying such
goods requires minimum or no shopping efforts.

Example: Soap, detergent powder, toothpaste, toothbrush, shaving cream, hair-oil, etc.

All these products are, in fact, made available at the place of living of the buyers. The buyers of such goods have
perfect knowledge of the goods and also the various substitutes available in the market.

Convenience goods are non-durable in nature and therefore, the buyers need to buy them frequently. The unit price
of the convenience goods is less. These goods are not bulky in nature. There are a number of brands of soaps, face
powder, toothpaste, etc., available in the market. Often, buyers show preference for a particular brand.

services of Convenience Goods

The characteristics of convenience goods may be stated as follows:

1. Convenience goods are purchased frequently.

2. No special skill is required to buy such goods.

3. The unit value of the product is less.

4. There are a number of brands of such goods available in the market.

5. The buyers often have preference for a particular brand.

The manufacturers of convenience goods must make these available in every nook and corner of the village, town or
city. These goods must be sold through all retail outlets.

The manufacturers must also ensure their uninterrupted supply in the market. This is necessary because, if a
particular brand of toothpaste or shaving blade is not available, the buyer may not hesitate to buy some other brand.

2. Shopping Goods
Goods that are not purchased frequently by the buyers are called shipping goods. The unit value of shopping goods
is high. The buyer, often, does not have complete knowledge of the product.

There are a number of models of shopping goods available in the market. The buyer makes a comparison between
the various models before taking the purchase decision.

Examples of Shopping Goods

Examples of Shopping goods are Jewellery, furniture, travel bags, suitcases, leather belts, pouches, shoes, etc.

Brand name is not as important for shopping goods as it is for convenience goods. The name shopping goods is
given to these mainly because the buyer shops around to find out the best. Shopping goods are semi-durable in
nature.
Services of Shopping Goods
The characteristics of shopping goods may be mentioned as follows:

1. Shopping goods are not purchased frequently like convenience goods.

2. The buyer does not have perfect knowledge of the goods.

3. He shops around to find out the best.

4. Brand name may not be an important criterion in buying shopping goods.

5. Shopping goods are semi-durable in nature.

The manufacturers of shopping goods can market the goods through a selected number of retail outlets. Unlike
convenience goods, which are to be made available in every place, shopping goods may be made available in certain
prominent places. This is mainly because of the tendency of the buyer to shop around to find the product of his
choice.

Services of Consumer Goods

1. The production of consumer goods is undertaken on a large-scale. Such a large-scale production is necessary for
two reasons — one, the number of buyers is very large and the second, most of these goods get exhausted soon, e.g.,
soap, toothpaste, hair-oil, etc.

2. In the market for consumer goods, one finds a large number of buyers and sellers.

3. Each product has a number of perfect or close substitutes.

4. There will be variations in the price of the various substitutes available.

5. The buyers are found everywhere.

6. Most of the consumer goods have elasticity in demand. When the price of one brand of soap goes up, the demand
for it may fall and the buyer may shift to a substitute.

7. The quantity purchased each time is less.

8. The unit value of most consumer products is less.

9. There is hectic competition in the market for consumer goods. Each marketer strives hard to show that his
product is superior.

10. From the marketer’s point of view, intensive promotional efforts are necessary to survive.

11. Consumer goods are susceptible to frequent changes in fashion and style. The marketers, therefore, need to
constantly update their products in tune with the latest technology.

12. Buying is mostly influenced by emotions. Factors such as status, prestige, etc., influence buying decisions more
than the utility of the product.

13. Consumer goods are not generally technically complicated. That is, one does not require intricate technical
knowledge to use the goods.

14. There are a number of middlemen, like wholesalers, retailers, etc., for consumer goods.

15. The marketers of consumer goods may have to rely on several promotional methods, like sales promotion,
advertising, personal selling, etc., to maximize sales and profits.

16. Brand image plays a crucial role in determining the demand for the product.

17. Product packing is also vital in consumer goods marketing.

18. Often, the buyers of consumer goods expect inducements from the sellers like discounts, free gifts, etc.

19. After sale service is important in the case of consumer durables.

20. The sellers of most consumer goods have their place of business in residential areas so that they can serve their
customers better.

The following are the voluntary consumers’ organizations:

(i) The Consumer Guidance Society of India (CGSI)

The Consumer Guidance Society of India (CGSI) was started by nine housewives in Bombay. In 1966, the
drought and war with Pakistan had resulted in scarcity of essential commodities and goods leading to rampant black
marketing and food adulteration by dealers and traders. Nine housewives got together to inform, educate and
organize the consumers in order to protect their interests. It is a voluntary, non-profit and non-political organisation.
The CGSI was started to handle complaints from consumers on an individual basis. It is a member of the
International Organizations of Consumer Unions. It has various units to look after complaints, publicity, exhibition,
education and testing. It has eight branches of various

(ii) Consumer Education and Research Centre (CERC)

March 23 in the year 1978 is a memorable date in the history of consumer movement in India. It is on this
date, the Consumer Education and Research Centre; Ahmedabad came into existence by the efforts of four eminent
personalities, Manubhai Shah, Ramesh Bhatt, K.G. Munshi and A.C. Bhatt. This association was started with a
financial capacity to spend Rs.250 only in consumer welfare, which has now reached to Rs.8.10 lakhs per year. This
centre has also established a library to educate the consumers. This centre is successful in dealing with a number of
complaints relating to consumer problems. A magazine “Consumer Confrontation” is also brought out by the centre
to educate the consumers.

(iii) Consumer Education Centre (CEC)

The Consumer Education Centre (CEC) was established in Hyderabad in December 1982. The CEC started
publicity through a consumer quarterly known as “Consumer Network News of India” which focused on publishing
news from all over the country. The paper invites organizations and individuals to forward articles and information
of interest to consumers and consumers organizations for publication.

(iv)Voluntary Organization in the Interest of Consumer Education (VOICE)

The Voluntary Organisation in the Interest of Consumer Education (VOICE) was founded when some
angry young students and teachers of Delhi University could no longer stand the way consumer were being cheated
and fooled by, not merely small companies like TV manufacturers but also by corporate giants like Bata and ITC.
This is led by Shriram Khanna, a Professor of the Delhi University. The VOICE has taken up several cases and
advocated consumer cases before courts of law and through parliamentarians. They realised that fighting in courts or
lobbying through Parliamentarians does not stop the consumer from being cheated and still has to seek redressal.

(v) Common Cause (CC)

The Common Cause (CC) based in New Delhi is headed by H.D. Shourie, wellknown in consumer circles
through his pen and public interest litigations particularly in the Supreme Court of India. Among the various
litigations in public interest initiated and personally argued by him in the courts of law, was one regarding the
implementation of the Consumer Protection Act. The writ petition filed by the common cause has resulted in the
judgment of the Supreme Court on 7.1.1993 which has been responsible for the establishment of full time District
Consumers Forums in every district.

CONSUMER MOVEMENT IN TAMIL NADU

The consumer movement in Tamilnadu received a big boost with the State Government’s implementation
of the Consumer Protection Act. It has set up State Commission and the District Forums in all districts. It is
rendering all assistance for the growth of the consumer movement. Due to the positive efforts of the Tamil Nadu
Government there are about 185 voluntary consumer organizations in the State. They are rendering Yeomen service
to the people of Tamil Nadu. The State Machinery has taken steps to modernize and simplify the Public Distribution
System. Very often, action is being taken against the unscrupulous traders. The Commissioner for Civil Supplies and
Consumer Affairs is expected to safeguard the interest of consumers. Above all, Tamil Nadu is in the forefront in the
implementation of several legislations enacted to protect the consumers.

As per the order of Supreme Court, the Government of Tamil Nadu has established separate, full time
consumer courts, in the district headquarters. Judicial Machinery in Tamil Nadu In Tamil Nadu, there are 32 revenue
districts now. Among them, 18 districts have one DCDRF each for them. The remaining adjoining districts have six
DCDRFs to look after their problems on a two / three districts basis.