UNIT VII - MARKETING

What is a market?
This is a place or any situation that brings potential buyers and sellers into contact to transact business.

Elements of a Market
(1) buyers
(2) sellers
(3) product
(4) price

Types of Market

(1) Financial Market

(a) Money Market
- not a physical market
- refers to a number of institutions which provide short term loan e.g. commercial banks, credit
unions

(b) Capital Market

- not a physical market
- refers to a number of institutions which provide long term loans
e.g. Insurance companies, building societies, development banks

(2) Commodity market

Found in major cities throughout the world. Goods are sold in very large quantities. London is the main
world centre for commodity markets. These markets provide facilities where large number of buyers and
sellers of raw materials meet, set price and trade in a wide range of commodities. Items sold in this market
include cotton, wool, sugar, tea coffee, vegetable, oil, grain etc. Caribbean produced products such as
coffee and spices are some of the commodities sold through these markets.

(3) Consumer Market

Is one in which everyone participates. When people purchase goods, they are called customers, and when
people receive service or advice, they are referred to as clients.

Marketing
This is the management process, which is responsible for identifying, anticipating and satisfying consumer wants
while making economic profits.

Marketing Activities
All those activities involve in getting the goods or service to the customers. These activities include market research,
product development, sales, distribution, branding, advertising, sales promotion, pricing, packaging.

Marketing Mix
Once a business has identified its target market (potential/specific group of customer who are likely to buy the
product) it will select the most appropriate marketing mix. The marketing mix refers to the whole range of
marketing activities, techniques and strategies that a firm uses to reach its target market and these are called
the 4 P's - Product, Price, Promotion, and Place

MARKETING MIX #1 - PRODUCT

Is the good or service a business intend to sell to its target market

Market Research
Market research is the systematic gathering, analysing and interpreting of information or data about a marketing
problem, with the view of solving such a problem. Market research is normally carried out before a product is put on
the market, but it may also be done after the product is established in order to assess and improve the product
performance.
Aims of Market Research
(1) To find out what the public wants so that the business does not waste resources producing goods or
services that are not required.
(2) To assess likely volume of demand to ensure that over producing does not occur
(3) To discover what will influence consumers - product name, style and colour of package, price range etc

CONSUMER BEHAVIOUR
Consumer behaviour may refer to how individuals react towards certain product(s) in the market place.

Factors that influence consumer behaviour

(1) Choice
Where there are several competitors in the market, consumers will have several alternatives to choose from.
This will force marketers to be competitive.
(2) Taste
Consumers differ in their preference for goods and services and the seller has to identify these preferences.
(3) Tradition
Long standing tradition can influence consumer behaviour e.g. scent, religions
(4) Income
The amount of money a person earns affects his/her ability to purchase. Therefore some highly priced
products and services will only be purchases by highly paid people.

(5) Brand Loyalty

The marketer often tries to create loyalty for their products with consumers, with the hope that customers will
stay with the existing product because it has satisfies them for sometime. Taste determines brand loyalty to
great extent and consumer behaviour dictates that the same brand is bought until a reason to switch brands
arises. Brand loyalty makes it difficult to take consumers away from a product that they are satisfied with.

Other factors that can affect consumer behaviour are price, culture, and substitutes

Importance of Market Research

Market research provides information that will help the marketer in making decisions such as
(1) where to sell a product/service
(2) how to sell it - retailers, wholesaler etc.
(3) which customers need the product
(4) how to price the product
(5) how to promote the product
(6) who are the competitors in the market place.
(7) What is the size of the market

Market Research Process

The following are the main steps in conducting a market research.

Step 1 - Identify or defines the actual market problem (s)

The firm may want to sell a product for the first time and wants to know if people will purchase the product or the firm
may want to go into a new product line or to develop their existing product and wants to know how the public will
react.

Step 2 - Find and Develop the likely sources from which a firm may get information
The firm may choose to use secondary data (firms manual, brochure, annual report) i.e. information that was
collected for other purpose but may be relevant to the present problem OR primary data i.e. information collected
directly from those likely to buy the product (Target market). Target market refers to the segment or portion o all
buyers likely to buy the product.

Step 3 - Collect the information

A firm cannot afford time and cost to ask all persons who are likely to buy the product if they would do so. Therefore
a researcher would have to select a sample to represent that group and then experiment on that sample.
The firm may write a number of questions on a sheet of paper (questionnaire), to which they may ask persons to
respond. OR they may have some prepared questions and then ask them these questions (interview). This process
of collecting information from persons by questionnaires or interview is called SURVEY.
Other strategies used to carry out market research are observation and experiment.
Step 4 - Analyse the information
Firms may use the computer or individuals for electronic or manual grouping of the information collected to find out
certain trends e.g. how many high as opposed to low income earners would prefer a smaller size mouth wash.

Step 5 - Present the findings

Once the data are analyzed the information is put in a report. Marketing managers will use the report to make
important decisions about the product. They may abandon the idea completely, modify it or they may go head with
the development of the product.

BRANDING, PACKAGING AND LABELLING

Brand
Refers to anything, whether sign, term, symbol, design, name or a combination of these on a product, which serves to
distinguish one product from another. E.g. Eve Green Peas

Brand name
Is that part of the brand, which can be spoken or uttered. E.g. Fanta/D&G soft drink

Brand mark
Is that part of the brand, which can be recognized but not, spoken. E.g. three-triangle circle on Mercedes Benz or
face of the lady on the Foska oats box.

Trade mark
The brand or part of the brand to which the producers have legal protection (registered). That is the seller has the
sole right to use that brand. E.g. TM or ® are symbols of trademark on a package.

Copyright
An exclusive legal right to publish, reproduce books and sell ideas expressed in a literary musical, drawing/sculpture
etc. the letter C in a circle is used to show copyright (c).

Reasons for branding

(1) To control a section of the market by building up brand loyalty
(2) To gain greater control over different product in a product line
(3) To provide legal protection for ownership rights
(4) To be able to promote the products easily through advertising
(5) To promote the firm's image by using the name of the firm as the brand

PACKAGING
Packaging is the outer wrapper or container for goods. Packaging not only presents the product in an attractive way
but it also gives details about the content, any potential hazards, correct usage etc.

Purpose/Functions of Packaging
(1) to protect the product
(2) to promote the product
(3) to preserve the life of the product
(4) it prevents health hazards that could result from use of the product (product safety).
(5) it makes it more convenient for the consumer to handle the product.
(6) It enhances the general appearance of the product.

Packaging decisions must be made on the size, colour, and shape of the package.

LABELLING
Labels are important features of the package and consist of printed information, which describe the product. Label
then, is a complete design within the package or a small tag attached to the product.
Functions of labels
(1) Identification - it gives the brand name
(2) Grading - it gives the grade of the product e.g. grade A chicken or grade B eggs
(3) Product description - tells about the product, its uses and ingredients, identifies the maker and the registered
office of the producers, nutrition facts etc.

MERCHANDISING
Packaging and branding are important features of merchandising. Merchandising refers to the display of goods so
that potential customers can conveniently see them and be influence to buy.

Methods of Merchandising
(1) Use of in-house displays to reduce the number of employees needed to sell the goods.
(2) Careful layout of premises, allowing customers to get near to goods and move into other parts of the store.
(3) Eye-catching window displays, including special offers
(4) Packaging design that presents goods attractively
(5) Clear labelling and price marking to reduce the need for customers to ask questions
(6) Opportunities for customers to inspect goods closely and perhaps touch them
(7) Eye-level shelf display for high priority goods.

PRODUCT LIFE CYCLE

Refers to the different stages that all products move through - from the point in which sales rise to when it eventually
falls.

There are four stages in this life cycle.

Introduction
At this stage the product is developed and expenses are incurred especially those related to market research. No
sales revenue is made at this stage. The product is advertised and place on the market for sale. Some products do
not go beyond this stage because if consumers are not impressed, the product will not sell.

Growth
If the product is accepted by consumers, sales and profits will rise steadily. Marketing become viable as an
increasing volume of cash comes in from customers.

Maturity
The market is established and at this crucial period the rate of sales growth begins to slow down. The firm may face
competition from producers of the same or similar products and firms may have to cut prices or increase advertising
to maintain sales.
Maturity also signifies that the product reaches its ceiling and begins to decline. It is at this point that the business
should recognise the signal to improve the product (add new features) or find a new one. Maturity is the longest of
the cycle.

Decline
Sales stop increasing, therefore profits will start to fall. If steps have not already been taken to improve the product, it
will probably now have to be withdrawn in order to avoid making a loss.

NOTE - Some goods may never reach the declining stage e.g. salt, matches.

REVIEW QUESTIONS
1999

1. (a) Differentiate between the terms 'market and marketing'. (2 marks)

(b) List FOUR marketing activities (4 marks)
(c) Identify FOUR factors influencing the behaviour of consumers
in their choice of local hamburgers over foreign hamburgers (8 marks)
(d) Discuss THREE methods a local business may use to promote
local hamburgers (6 marks)
2002

The Omrie group of companies markets a wide range of furniture and household appliances. The
marketing manager is considering launching a new product but is concerned about the effect on
consumer behaviour.

(a) Define the term 'consumer behaviour' (2 marks)

(b) Identify FOUR factors that are likely to affect consumer behaviour in
The purchase of products offered by the Omrie group. (4 marks)
(c) Explain how TWO of the factors identified in (b) above affects consumer
buying behaviour (4 marks)

MARKETING MIX # 2 - PRICE

Price is the amount of money that customers have to pay for a product. The price placed on a product
must be :
(a) Attractive i.e. at that price consumers are willing and able to buy the product.
(b) Competitive so that the product is favoured over others.
(c) Enough to cover cost of production and gain a profit.

Pricing is both a marketing activity and a marketing strategy. Pricing as an activity related to the
setting of prices by producers, as this is the main decision making factor for the customer in selecting a
particular product. Firms generally try to price product higher than the cost of producing the product, to
ensure profit. Pricing as a strategy involves any pricing policy taken by the firm to gain market attention.

Aims of Pricing Strategies

The main aim of pricing strategies is to achieve the targeted return on investment. Before setting prices,
the firm must consider:

(a) The expected return on its investment.

(b) Cost of production, shipping, storing etc.
(c) The competitors prices
(d) The consumers' perception of the product and pricing
(e) Maintaining market share
(f) Maximum and minimum pricing of Government.
(g) The survival of the firm

Types of Pricing Policies

(1) Cost plus pricing

This is one of the basic types of pricing policies. Sellers aim at determining their cost of
production, distribution, and promotion of the product and a percentage (mark-up) is added on for
profit.
Selling Price (SP) - Cost Price (CP) = Profit (P).

(2) Stock Turnover Pricing

Stock turnover is the number of times per year a firm sells off a given stock of goods. Marketing
managers use stock turnover to judge/assess profitability.

Stock Turnover/Rate of turnover/Stockturn = Cost of Goods Sold

Average Stock
 Average Stock = Opening stock + Closing Stock
2

Example
Opening Stock $3600
Closing Stock $4400
Cost of Goods sold $28000

Stock Turnover = Cost of Goods Sold

Average Stock

Average stock = $3600 + 4400 = 8000 = $4000

2 2
Stock Turnover = 28000/4000 = 7 times. Therefore the firm's stock has turned over 7 times.

Re-arranging the stock turnover formula, other aspects of the formula can be calculated.
Cost of Goods Sold = Rate of turnover x Average stock

3. Going-rate pricing

Here firms price their product according to their competitors’ rates.

4. Penetration Pricing
A new firm entering the market and launching its product may price the product significantly low, but
only temporary. The aim is to gain consumers' loyalty and maintain it even after prices return to their
normal level. This strategy is also popular when a firm is struggling for survival.

5. Price lining
Involves a seller who identifies different segment of a market and set price to match each segment.
Market segmentation is dividing the market into distinct sub groups. E.G. Toyota sells Corolla, Camry,
Starlet, Levin, Corona motor cars. They are priced differently and are intended for consumers with
different income levels.

6. Discriminatory Pricing/Price Discrimination

Different prices are offered for the same product to different consumers. Airlines sell tickets cheaper
during off-season.

7. Perceived Value Pricing

Prices may be set according to how much value, the seller thinks that the consumers place on having
the product. Some consumers experience a sense of well being from consuming certain products
and are willing to pay high prices for them.

8. Negotiable Pricing
When sellers expect some degree of bargaining between themselves and prospective buyers, they
may set prices at a sufficiently high level to allow for negotiation.

9. Odd Pricing/Psychological Pricing

Firms will keep their prices just below certain levels so that they appear cheaper to the customer. E.g.
$0.99 instead of $1.00 or $99.99 instead of $100. This method also serves to give the consumer the
impression that he is getting more value for each cent.

10. Loss Leaders

Some products may be sold at a loss so that they attract customers into the store, with the loss being
recovered on other products sold at the same time.
MARKETING MIX #3 - PROMOTION (STRATEGY)

Promotion

Refers to the ways in which consumers are made aware of the availability of the product or services and the
qualities/features it has. This is done by

(A) Advertising
(B) Sales Promotions
(C) Personal Selling
(D) Public Relations

(A) Advertising

Is any paid form of non-personal presentation by an identified sponsor. The following features
distinguished advertising from the other means of promotion.

(1) It is non-personal i.e. it is not directed to a particular or anyone person

(2) It is relatively long term
(3) the firm pays for the cost of the advertisement
(4) The sponsor is always identified - usually by name.

Advertisement is a message that uses words, pictures or sound.

FUNCTIONS OF ADVERTISING
To:

(1) announce new products

(2) highlight the unique feature of a product
(3) build a firm's image around its product
(4) highlight special events, such as sales and late openings
(5) increase market share by stimulating demand
(6) educate consumers about the product.

TYPES OF ADVERTISING

(1) Informative

The firm aims at telling the public about a new product, explaining new uses for the product or explaining
how the product works and informing the market of a price change.

(2) Persuasive

Aimed at convincing the consumer to buy the good or service even if the consumer does not want
to.

Hidden Persuaders

One way an advertiser may use an advertisement to promote sales is to persuade the consumer that the product will
make them better off in some way. Some of the motives to which this type of advertisement appeals are not obvious,
hence the term 'hidden persuaders.'

Motives to which persuasive advertisement appeals

(i) Sex Appeal - product is claimed to make the user attractive to the opposite sex E.g.

(ii) Ambition - the advertisement implies that those who use the product will be successful E.g.

(iii) Personality Appeal - famous personalities are shown using the product to give it an acceptable image E.g.
(iv) Social acceptability - the advertisement implies that by using the product, the consumer becomes more
acceptable to other. E.g.

(v) Work Simplification - the product is claimed to make a task easier to carry out E.g.

(vi) Health - the advertisement suggests that use of the product contributes to good health E.g.

(3) Competitive

The producer tries to gain market share by telling the good points about the product and comparing it with
those of its competitors.

Persuasive and competitive advertisements aim at building brand loyalty, encouraging consumers to buy
now and to switch from competitors brand.

(4) Collective, generic or cooperative

Aims at getting the public to buy a product in general without focusing on a particular brand. E.g. Credit
union

FORMS OF ADVERTISING

(1) Television and Radio - very expensive, but it is the most effective method of reaching a large audience.
(2) Local Newspapers - offers cheaper advertising rates for cover of a limited area.
(3) Magazine or journals - usually have a more limited circulation than newspapers, but reached a selected
audience, offer greater scope for colour advertisements and have a longer life.
(4) Poster and Signs - eye-catching, high impact signs sited in public area (bus stops) or on public transport.
(5) Special shop display - to encourage consumers to buy on impulse
(6) Exhibitions - for specialist in a particular field to meet and compare products (trade shows).
(7) Circulars and catalogues
(8) Word of mouth
(9) Free samples or souvenirs
(10) Sound cars - using loud speakers in cars.

ADVANTAGES OF ADVERTISING

(1) It makes consumers aware of the different product choices that are available.
(2) It encourages competition by keeping consumers aware of the various product choices.
(3) It increases sales by keeping the cost down through economies of scale.
(4) It promotes demand, thus making mass production possible.
(5) It encourages the production of goods of high standards.

DISADVANTAGES OF ADVERTISING

(1) Most advertisements are aimed at persuading people to buy whether or not they need the product.
(2) They sometimes deceive the public by exaggeration or untrue claim
(3) The cost of advertising is usually borne by the consumers.

ADVERTISING AGENCIES

Are businesses, which specialise in assisting others with their advertising needs. Advertising agencies work between
the firm who needs the advertisement and the television and newspaper stations. A fee is paid for the service.
(B) SALES PROMOTION

Are short term 'deal' given to wholesalers, retailers or consumers by a firm to encourage sales. Sales
promotions are usually used to support personal selling and advertising campaigns. It is usually run for a
limited period due to the expense involved.

Sales promotion Free samples Coupons

Loss leader Contests Trade exhibition/exposition
Trading stamp Showroom/store window Price discounts

1 Special discounts given to encourage movement of stock.- price discount

2 An area to show off the producers wares – show room
3 An event with attractive prizes - Contests
4 Short term incentives to encourage the purchase of goods and services
- Sales promotion
5 A huge discounts given to attract clients – loss leader
6 A gift or cash refund when these are redeemed - Coupons
7 Stamps redeemed for gifts or cash – Trading stamps
8 Display of items at a trade fair – Trading exhibition
9 Miniatures of a product that are given to the public at trade fairs – Free sample

(C) PERSONAL SELLING/SALESMANSHIP/SELLING TECHNIQUES

Is a presentation made by individuals representing a sponsor to prospective buyers to persuade them to

purchase a product.

(D) PUBLIC RELATIONS (PR)/PUBLICITY

All businesses care about what the public thinks of them and they will use a variety of ways to try to
influence the public to have high regards for the firm and employees. The extent to which the public has
a good impression of a business is called PUBLIC RELATIONS.

Large companies may have a public relations department to handle the publicity of the firm and to promote
good image. Small firms can also engage in publicity by ensuring that all who work for the firm give a good
impression of the firm to the public.

Good public relations may be promoted in direct ways such as:

(i) making donations to charities

(ii) press releases that provide information to newspaper, magazines, radio or television to draw attention to the
product. E.g. conferences, seminars, grand openings, anniversaries etc.
(iii) sponsored activities such as sports, cultural events, business entertainment, scholarship, and special
awards.
(iv) Flyers or booklet explaining different features of the product for different interest groups, such as students,
teachers, housewives etc E.g.

There are also indirect ways that companies use to promote their public image, and these will draw on the help of all
employees. E.g. potential customers will be influenced by the manner in which employees talk to them on the
telephone or at the shop counter. They will also be influenced by the way that their enquiries or complaints are dealt
with and how the firm deals with after sales services.
Publicity is a long- term effort and is usually not a cost to the firm, as firms do not pay for news items that are reported
by the news media.

REVIEW QUESTIONS

Terms of Sales

(1) Cash Sales

A cash sale takes place when the buyer pays the seller his money (notes and coins) in full at the time of
sale. Cash payments are becoming 'less important' as more people are now using cheques and credit card.

Advantages of cash Sales

(I) No interest is paid on goods purchased

(II) Ownership of goods is transferred to the buyer immediately
(III) Buyer may receive cash discount

Disadvantages of cash sales

(I) Possibility of the money being lost or stolen

2. CREDIT SALES

Occurs when goods are bought and paid for at a later, usually by instalments.

Advantages of Credit Sales

(i) The buyer becomes the owner of the goods immediately.

(ii) The buyer enjoys the use of the goods while paying for them.
(iii) No down payment is required.

Disadvantages of Credit Sales

(I) Interest is charged and this increased the cost of the goods.
(ii) Bad debts can arise when customers cannot afford to pay or when customers deliberately do not want to
pay. The seller in these instances must write off the debt i.e. treat it as a loss to the business.
(iii) If the buyer fails to make payments, the seller may not repossess the goods but can sue for payment of the
debt.

3. HIRE PURCHASE (HP) SALES

- Is a contract for hiring goods for a fixed period.

- An initial deposit is paid usually a percentage of the purchase price
- A number of equal weekly or monthly instalments are paid over a given period.

Advantages of Hire Purchase

(I) The buyer enjoys the use of the goods immediately, while paying for it.
(ii) Individuals do not need to have all the money at once to buy an item.

Disadvantages of Hire Purchase

(i) The seller gets income in the form of interest beyond the cash price
(ii) The goods purchased do not become the property of the buyer until the last payment has been made.
(iii) Item purchased must not be sold until the last payment is made.
(iv) The seller remains the legal owner until the buyer pays the last instalment.
(v) The seller can repossess the items if the buyer defaults on payment.
4. LAY AWAY

- a deposit is made
- buyer is protected against price increases
- goods are received only after full payment is made.

5. DISCOUNTS

Is a reduction in the price that producers/traders may allow their customer.

Cash Discounts

- An allowance given to the buyer of goods when he can pay for them immediately.
- It encourages prompt payment and is also a means of increasing sales.
- Cash discounts may be given if payment is made within a specified time after an invoice is issued,
- cash discount is not given on hire purchase goods because hire purchase attracts interest.

Note - All persons can benefit from cash discounts when there is a sale but are generally given to traders.

Trade discounts

Is allowed to customers belonging to the same trade (merchants who buy goods in large quantities to resell) to
enable them to make a profit.

MARKETING MIX #4 - PLACE (DISTRIBUTION)

Place in marketing is the way in which a product is distributed to reach the consumers. Distribution is the process or
"chain" through which products move to get to the consumers.

Distribution Chain/Channels of Distribution

(1) Direct marketing channel

manufacturer sells directly to the consumers Manufacturer (manufacturer consumers)

(2) Single Level Channel - the chain includes one middle man, a retailer

Manufacturer Retailer Consumer

(2) Two level channel - where there are 2 middlemen, a wholesaler and a retailer.

Manufacturer Wholesaler Retailer consumer

(3) Three Level channel

Where there are 3 middlemen, a large wholesaler, a small wholesaler and a retailer

Manufacturer large wholesaler small wholesaler Retailer consumer

In this situation, there could be an importer who sells to a smaller wholesaler, who then breaks the bulk before
distributing to retailers.

Wholesalers: The wholesaler is a link between a number of producers and the retailer. He does not only buy and
sells goods, but also provides very important services.
Functions of the Wholesalers
(1) Breaking the Bulk: Large quantities of goods are bought from the manufacturer and broken into smaller
quantities for sale to consumers.
(2) Risk bearing: Wholesalers bear the cost of theft, damage and spoilage.
(3) Warehousing: Goods are kept in large storage areas for various periods of time.
(4) Selling and Promoting: The wholesaler has many intricate connections and are more familiar with the
market than the manufacturer.
(5) Financing: Wholesalers sometimes provide credit arrangements for customers.
(6) Transportation: Goods are delivered to retailers and collected from manufacturers.

Types of Wholesalers
(1) General Wholesalers: they normally stock a wide variety of goods and use there capital to provide
warehousing facilities. They may also employ salesmen to make deliveries and offer credit.
(2) Cash and Carry Wholesalers: they do not allow credit purchases and do not offer deliveries. Retailers and
consumers must purchase in large quantities. An example would be the large discount store.
(3) Specialist Wholesalers: these merchants restrict their services to a particular area. They maybe found in
the building trade, fruits, or vegetables markets, soft drinks trade, etc.

Retailers: A retailer is a trader who sells goods to the public. He buys commodities from a wholesaler or directly
from the producer/manufacturer, and sells them in smaller quantities.
Types of Retailers:
(a) Small scale retailers: this retailer is not attached to a large organization and does not buy in very large
quantities. Examples:
 Door to Door Salesmen
 Market Vendors/Higglers
 Neighborhood Shops
 Vending Machines
 Mobile Shops
 Convenience Stores
(b) Large scale retailers
 Department Stores e.g. Walmart in the U.S.
 Supermarkets e.g. Superplus
 Hypermarkets: large shops which sell a variety of goods by many specialist departments.

N.B. Sales agents and brokers such as stock brokers, import export agents and insurance agents are also
considered to be retailers.

Functions of Retailers
(1) Outlet: the retailer provides an outlet for products, saving the producer from the need to market his/her
products.
(2) Stocks: the retailer stocks goods for consumers.
(3) Choice: the retailer provides a variety of goods for consumers
(4) Provides Information: the retailer provides information and feedback of consumer responses to wholesalers
and producers.
(Please see pg. 132 of CXC Lecture series for a further breakdown of the functions of retailers.)

Disadvantages of Intermediaries
(1) producers may not get enough profit
(2) producers may not have control over their markets
(3) intermediaries may not be committed to the sale of the producers items

TRANSPORTATION

Is a form of communication, and a means of making contact between two or more points. A good mode of
transportation means growth and profitability of business, as raw materials and equipment; workers, customers and
goods can be transported efficiently and on time.
CONSUMERISM
 Refers to all the activities of consumers as they engage in the process of exchange to satisfy their demand for
goods and services. It involves the exercise of their rights and responsibilities as they seek to gain satisfaction from
these goods. It is therefore important that consumers know their rights and responsibilities so that they can be
guarded against exploitation.

WHY CONSUMERS NEED PROTECTION

Consumers need protection because they are not always able to make a good assessment of the goods and services
they want to buy. Also, businesses in an effort to sell and make profits will carry out unfair practices. Some of these
are:

(1) giving misleading price reductions by stating unusually high original prices for their product.
(2) Making false claim about their product through promotion e.g. advertising.
(3) The use of inferior raw materials in their production to keep prices down.
(4) Giving consumers incorrect weights for their money.
(5) Unfair treatment to consumers when they make complaint or return faulty goods.

CONSUMER PROTECTION

Ways that consumers may receive protection

(1) Self-protection - consumers should make it their business to learn about their rights and responsibilities.
They can also protect themselves by shopping wisely and make use of available channels (consumers
organizations) put in place to assist them in getting redress in the case of unfair treatment.

(2) Private Organizations - such as National Consumers' League, Citizens Advice Bureau and other
consumer association educate and lobby for legislation to be put in place to protect consumers.

(3) Government Organizations

(a) The Bureau of Standards

(b) The Consumers' Affair Commission
(c) Fair Trading Commission
(d) Ministry of Health
(e) Ombudsman

The above Government Organizations by legislation have the responsibilities to ensure that
consumers are protected.

The Bureau of Standards

The Bureau of Standards is a special agency established by the government to

monitor the quality and quantity of goods produced and traded in a country.

The Bureau of Standards operates in collaboration with the Ministry of Health to

inspect food production and outlets to ensure that workers have valid food handler’s
permits, and the environment is clean and sanitary. The Bureau also educates and
informs the public about products that meet or fail to meet International Standards of
Quality. (ISO Quality)

Other Roles/Functions of Bureau of Standards

(1) Setting standards or requirements to which producers and goods must adhere to E.g. labelling.

(a) Labels:
(i) on processed food must be in English
(ii) must not misinform
(iii) must give country of origin
(iv) must state companies involved in processing of food
(v) must state net contents
(vi) must list ingredients

(b) Safety requirement

(2) Scrutinize, test or verify local and foreign goods (e.g.machine, food, medicine, motor car batteries etc) by
laboratory testing.
(3) Ensuring that weighing scales are properly calibrated.
(4) Warn producers if they are not following prescribed standard
(5) Report non-compliant firms so that they may be charged or fined for breaking a prescribed standard.
(6) Warn the public about shoddy inferior goods, which are often dumped in the Caribbean Market.

CONSUMERS' AFFAIR COMMISSION

Role/Functions

(1) giving advice to consumers

(2) control and supervision of prices
(3) control of quality weights and measures
(4) promotes and implement food policy legislation
(5) enforce fair trading practices
(6) supervise hire purchase and credit control

OMBUDSMAN

An ombudsman is an independent person appointed by the government to investigate and report

malpractices and injustices by business operators for action to be taken.

The ombudsman investigates to determine that all goods are in a saleable condition – properly
packaged, labeled and weights and measures are accurate. A consumer is compensated for
evidences of mistreatment.

Customers have rights and responsibilities to ensure that they are treated fairly.
Rights of Consumers

(1) The right to basic needs

(2) The right to a healthy environment
(3) The right to choose
(4) The right to be informed
(5) The right to be heard
(6) The right to safety
(7) The right to consumer education
(8) The right to redress

Responsibilities of the consumer

To be alert and aware of the product before a purchase is made.
To fair and ethical in exchanging transactions with a business and report unethical practices
to the relevant authorities.
make wise decisions before purchasing a product or service.
make complaints and report dissatisfaction or satisfaction in a fair and honest manner.
speak out and inform producers and governments about their expectations.