CBB_ MMS_3

Alka Purohit

Unit- 9, Consumerism in India & Global Markets Consumerism- The consumer movement represents activities by consumer groups , govt agencies, at times, business enterprises that are designed to protect the consumer. The activities of these groups are known as Consumerism. The need for Consumerism, Consumer Protection1. Consumer needs physical protection against products & services which have a risk factor attached. E.g. medicines, gas cylinders etc. 2. Protection against deceptive & un fair practices followed in case by any business enterprise. E.g. contractor may cheat a buyer, flat owner etc. 3. Protection against the monopoly & abusive trade practices.

4. Protection against Protection against non-commitment, receipts, documentary proofs of sellers. E.g. passing of defective goods & not providing replacement etc. 5. Protection against pollution harming the environment, affecting human health etc. e.g. Bhopal Gas tragedy. Consumer Rights1. Right to Protection of Safety & Health- Many products may cause harm to physical health in terms of sub standard material used, old drugs, improper chemical usage in detergent powder, hazardous plastic containers etc. & misleading advertising & communication. 2. Right to be informed- To disclose all information regarding the manufacturing & usage of products to the consumer. E.g. batch detail, date of expiry, best before dates, ingredients information etc.

3. Right to choose- The right to choose any variety of product, encourage competition amongst the manufacturers so as to improve the quality standards. 4. Right to be Heard- To register compliant against any mal practices, in justice done on the part of business enterprise. 5. Right to be Redressed- To grant compensation against the complaint given by the consumer. E.g. replacement of any defective piece, payment of money back incase required. 6. Right to Quality of Life- Quality of life refers to the wellbeing of people & environment, surroundings around. The business enterprises need to assure not to harm the safety, & well being of any one in any form.

Consumer Protection in IndiaSelf Regulation in form of Consumer AssociationsConsumer Guidance Society of India- Mumbai, Consumer Education & Research Centre of Ahmadabad, Consumer Action Forum- Kolkata, Consumer Service Society- Bangalore These associations are doing their bit for the consumers but at times there is a lack of finance, non motivated members & political interference. Business Associations- Self regulation by the business community through fair deal to the retailers, consumers etc. Business community should welcome the suggestions, complaints made by the consumers as method of improvement.

 Government InterventionWhen the efforts of self regulation fails, Govt help can be taken. This results in the consumer legislation for protecting the legitimate interests of the consumers.

Consumerism in Global Markets Consumerism is a global phenomenon, with strong consumer movements in Western Europe that originally began as protests carried out by Green movement against environmental pollution. Europeans interest in consumer rights expanded beyond Green movement to include issues like, labeling for genetically modified foods, advertising to children, right to privacy etc. In contrast, Asian countries have been behind comparatively due to partly cultural differences, lack of enforcement mechanisms, varied views on the role of govt in consumer protection. Certain changes are coming in China, increased media attention against product defects & liability in Hong Kong etc.

President Kennedy spelled out the Consumer Rights in 1960s which were as follows, and also reviewed again in the 1990s. 1. The right to safety protects consumers against the marketing of hazardous goods. 2. The right to be informed protects consumers against fraudulent or misleading information, advertising, labeling or any other practices. 3. The right to be heard assures consumers will receive full consideration in the formulation of government policy. 4. The right to be a minority consumer without disadvantage ensures that any minority group or low income consumers will not be at any disadvantage to in comparison to other income groups.

The 1990s & 2000s saw rebirth of consumer movement in USA & abroad. Under the Clinton administration four issues emerged and the other rights were also reviewed. 1. Protection of the Environment 2.Health & Nutritional Claims for Food Products 3.Influence of Advertising on children 4.Right to non-disclosure of private & confidential consumer information without consumers consent.

The Social ResponsibilityThe social responsibility of marketing organizations can be assessed in areas like1. Their ability to restrain their own actions through a process of self regulation. 2. Their willingness to exert influence over social issues such as drug use & under-age drinking & smoking. 3. Companies have become aware of thefinancial, environmental & social performance. 4. Marketing organizations are slowly moving towards more responsible self regulation. E.g. the advertising industry established the Childrens Advertising Review Unit to try to regulate the nature the efficiency of advertising to children. 5. Companies like, Dow Chemicals, IBM, Xerox have effectively integrated environmental performance into their corporate goals.

6. Companies like, Monsanto, Du Pont have made major efforts to contain air & water pollution. 7. Many companies have also accepted self imposed industry standards for labeling, product safety & childrens advertising. 8. Companies like, JC Penny, Eastman, Kodak, Giant Foods etc. have also sought to improve communications with consumers through consumer offices that formulate policies for handling consumer complaints. 9. JC Penny was the first company to establish a concerted effort in consumer education, published Forum, a publication for teachers of consumer education, Insights into Consumerism, a magazine providing teaching modules on consumer issues, numerous buying guides containing factual product information.

10. Ultimately the companies must to realize that it is in their self interest to protect the consumer rights. As such, a poll found that 88% of consumers would be more likely to buy from a company that is socially responsible & a good corporate citizen.

Unit- 8, Organization Buying Process: Roles of Buying Centers/Decision Making Units Organizational buying is the process of purchase of products and services by organizations. Although, organizational buying is similar to family buying, it is significantly different on several counts. Rational decision making, strong ties with the suppliers, large-scale purchases, expert purchase agents, derived demand, and reverse buying, are part of organizational buying. Organizational purchases are generally handled by internal buying centres. A buying centre can have multiple participants like gatekeepers, initiators, influencers, deciders, buyers, approvers, and users

 . The number of participants increases in case of difficult and more complex decisions, as compared to simple and less risky decisions Organizations generally buy products and services in three types of buying situations - straight rebuy (practically, reordering with no change in purchase terms and conditions); modified rebuy (some change in initial purchase terms and conditions); and new task (completely new purchase decision). In case of a new task, the organizational buying process involves seven stages 1.problem recognition 2.need description

3.product specification, 4. supplier and evaluation search, 5. proposal solicitation, 6.supplier selection, 7. order & post purchase evaluation The organizational buying behaviour is greatly influenced by the culture of the organization, which, in turn, is based on various internal factors like, (values, perceptions, and learning) and external factors like, (firm graphics, national culture and government policies) . Organizational buying behaviour is also influenced by reference groups.

 Segmentation of business markets is an important tool in the hands of business marketers. Business markets can be segmented on the basis of demographics, operations, purchase-approach, situational factors, and behavioural factors. Role of Buying Centre Organizational buying behaviour can be defined as the buying behaviour of an organization as a whole. The main responsibility of the organizational buying process lies with the buying centre. The buying centre takes the purchase decisions on behalf of the entire organization.

 The buying centre has to have vertical involvement, lateral involvement, extensity, connectedness, and centrality dimensions, if it is to be successful in an organization. The industrial buying process is influenced by the environmental, social, organizational, and individual factors. Some of the methods for organizational purchases are spot purchases, leveraged purchases, critical purchases, and strategic purchases. The marketing strategy depends upon the nature of the product. Relationship marketing is the development of mutually beneficial relationships.

 INDUSTRIAL/ORGANIZATIONAL MARKETS Producer manufacturers service producers Reseller wholesalers retailers Government federal state county local Institutional charitable educational community other non-business

Characteristics of Organizational Buyers1. Consumer market is a huge market in millions of consumers where organizational buyers are limited in number for most of the products. 2. The purchases are in large quantities. 3. Close relationships and service are required. 4. Demand is derived from the production and sales of buyers 5. Demand fluctuations are high as purchases from business buyers magnify fluctuation in demand for their products.

6. The organizational buyers are trained professionals in purchasing. 7. Several persons in organization influence purchase. 8. Lot of buying occurs in direct dealing with manufacturers. Organizational Buying Situations 1. Straight rebuy- In this buying situation, only purchasing department is involved which gets an information from inventory control department or section to reorder the material or item and they seek quotations from vendors in an approved list.

 The in-suppliers" make efforts to maintain product and service quality. The "out-suppliers" have to make efforts to get their name list in the approved vendors' list and for this purpose they have to offer something new or find out any issues of dissatisfaction with current suppliers and promise to provide better service. 2. Modified rebuy - In this buying situation, there is a modification to the specifications of the product or specifications related to delivery. Executives apart from the purchasing department are involved in the buying decisions. The company is looking for additional suppliers or is ready to modify the approved vendors list based on the technical capabilities and delivery capabilities

3. New task buy - In this situation, the buyer is buying the product for the first time. As the cost of the product or consumption value becomes higher, more number of executives are involved in the process. The stages of awareness, interest, evaluation, trial, and adoption will be there for the products of each potential supplier. Only the products which pass all the stages will be on the approved list and price competition will follow subsequently. 4. Systems buy - Systems buying is a process in which the organization gives a single order to a single organization for supplying a full system.

The buying organization knows that no single party is producing all the units in the system. But it wants the system seller to engineer the system, procure the units from various vendors and assemble, fabricate or construct the system. Participants in the Business Buying Process Users- The persons who use the item. Say for safety gloves the operators. Initiators- The person who requests the purchase. e.g. The Safety officer

 Influencers -Persons who held define specifications. In this case of safety gloves, the safety officer may himself define specifications. If an industrial engineer is in the organization, he may also be consulted. There can a different gloves for different working situations and industrial engineer may be more aware of specific requirements due to his special nature of work - human effort engineering.

 Buyers-They are the person who actually do the buying transaction. Gatekeepers- They control access to personnel in a company. The receptionist, the secretaries etc. Deciders- People who decide on product requirements and suppliers. It is the final approval for product specifications and suppliers' list. Approvers- Persons who approve the purchase. In the case of safety gloves, the personal manager may have the power to approve.

Factors Affecting Organizational Buying1. Environmental factors - Expected demand for the product that the buying organization is selling, expected shortages for the item, expected changes in technology related to the item etc. are the environmental factors that will have an effect. 2. Organizational factors - Changes in purchasing department organization like centralized purchasing, decentralized purchasing and changes in purchasing practices like long-term contracts, relationship purchasing, zero-based pricing, vendor-performance evaluation are the organization factors of importance to marketers.

3. Interpersonal factors - These factors are the relationship between buyers and sales representatives of various competitor companies. 4. Individual factors - These factors related to the buyer. What sort of ways of interacting and service are appreciated by the buyers and what ways are considered as irritants? Marketers have to understand the reactions of buyers.

Organizational Buying Process Steps Problem recognition General need description Product specification Supplier search Proposal solicitation Supplier selection Order routine specification Supplier performance review

Organizational Buying / Purchasing Strategy The purchasing function is of great importance because its actions impact directly on the organizations profitability. It aims to evaluate and classify the various items purchased in order to be able to choose and manage suppliers accordingly. Classification is along two dimensions: a. importance of items purchased b. characteristics of the supply market. Actions can be taken accordingly to influence the supply market.

 Based on the type of items purchased and on its position in the buying matrix, a company can develop different relationships with suppliers depending upon the number of suppliers, the suppliers share, characteristics of selected suppliers, and the nature of customer-supplier relationships. The degree of centralization of buying activities and the missions and status of the buying function can help support purchasing strategy. The company can adapt its procedures to the type of items purchased which in turn can influence relationships with suppliers.

 The activities which can be crucial to the future development of organizational buying behaviour will be information technology and production technologies. ***************************************