Demand and Supply | law of demand and supply Demand is related to consumption. It represents the process through which a consumer obtains goods…
This Chapter deals with the Consumer Protection Concepts Consumer Rights and Present Position of Consumer Protection in Different Countries.
CONSUMER’S SOVEREIGN – CONCEPT AND PRESENT POSITION
The sovereignty of the consumer under capitalism states that “under capitalism, the consumer is the king.” He is free to spend his income in the manner he thinks best. Theoretically speaking, the consumer in a capitalistic society preference (as revealed by his ways of spending money) which influence and regulate the nature of economics. It is he who directs the distribution of economic productive among various industries.
The entire productive activity in the country is undertaking to satisfy him. Every producer, before he initiates his production, has to study the nature to acquaint himself with the tastes and preferences of the consumer.
In case, he disregards the tastes and preferences of the consumer and produces goods which do not satisfy the consumer, then it is the producer who will suffer heavy losses. Every wise producer has, therefore, to satisfy its customers, Big business organizations in western countries maintain separate departments for the purpose of studying the want of the consumer and produce exactly those goods which are desired by the consumers.
Therefore, the consumer is the master, the king, and the sovereign, who rules the capitalistic economy. So ultimately, it is the preferences and valuations of the consumer which determine the nature and volume of productive activity in a capitalistic economy. It should, however, be remembered that the tastes, preferences, and valuations of the consumer are revealed to the producer through the price-mechanisms.
The price-mechanism reflects the tastes, preferences, and valuations of the consumer. By looking at the price mechanism, the producer discovers the actual requirements of the consumer and endeavors to satisfy them as best as he can. In short, the tastes, preferences, and valuations of the consumer regulate and control the productive activity in a capitalistic economy through the instrumentality of the price mechanism.
The tastes, preferences, and valuations of the consumer, as reflected through the price mechanism, not only influence and regulate the nature and volume of production but also bring about the redistribution of productive resources among the various industries from time to time. The sovereignty of the consumer acquires particular significance when an investor (with surplus investible funds) is looking for profitable investment in the country.
Since he wants to earn the maximum possible profit, he would like to invest his funds in the industry which is likely to yield him the maximum money return on his capital investment. In the choice of the industry, the investor will be guided by the price mechanism. He will naturally choose that industry the prices of those products are likely to be high in the future. And the prices of the products of an industry could not rise the industry.
So ultimately, it is the preferences of the consumer which will guide the investor in the choice of industry. In a capitalistic economy, therefore, it is the consumer’s choice, as revealed by the price mechanism, which determines the nature and level of productive activity. In this sense, as pointed out by Dr. Benham, ‘the consumer is the king’.
Consumerism and Consumer’s Protection – Rights of Consumers
Consumerism is a social movement seeking to augment the rights and powers of buyers in relation to sellers. The marketing concept states that the basic objective of an organization is to satisfy customer and society. Consumerism has had a direct impact on marketing. It follows that the elements of the marketing process, product, price, promotion, and distribution also must be subject to the pressure of consumerism.
This can be seen in the area of product availability, product quality, product costs, and environmental concern. Consumerism demands the highest quality products, which the distribution network must attempt to minimize product mishandling, poor routing, and scheduling and delays in transit.
Today, consumerism has been defined as “the actions of individuals and organizations (consumer, government and business) in response to consumer’s dissatisfaction arising in exchange of relationships and as an organized effort of consumers seeing redress, restriction, and remedy for dissatisfaction they have accumulated in the acquisition of their standard of living.”
Rights of Consumers
The success of any movement depends on the consciousness and awareness of the people for whose cause the movement is organized.
We often say the consumer is the King. But in reality, we, the consumers are treated very badly both by public sector institutions like Telecom, Water Supply Board, Electricity Boards, State Road Corporations, Post Offices. Railways, Banks, Revenue offices, and even in Universities, and by private institutions like shopkeepers, motor vehicle dealers, milk vendors, dry cleaners, auto rickshaw drivers, LPG dealers etc.
To overcome these problems, a consumer needs to have rights. Though different countries give different right like social welfare measures, yet according to the International Organisation of Consumer Unions (IOCU), the basic idea behind consumer movement is to give the following rights to the consumer.
- Rights to the basic needs: Food shelter, clothing health care, and education.
- Right to Safety: Right to be protected against products, production process, and services, which are hazardous to health or life.
- Right to information: Right to get facts needed to make an informed choice or decision. Now, this right includes protection against dishonest or misleading advertisements.
- Right to choice: Right to have access to a variety of products and services at competitive prices and in the case of monopoly to have an assurance of satisfactory quality and service at a fair price.
- Right to be heard: Right to be represented so that consumer interest receives sympathetic consideration in the formulation and execution of economic policy.
- Right to redress: Right to a fair settlement of just claims. Here it involves the right to receive compensation for misrepresentation.
- Right to consumer education: Right to acquire knowledge and skill to defend his rights.
- Right to a healthy environment: This right involves protection against environmental problems over which the individual consumer has no control.
- Right to choose: This remains on paper, for example, nationalization of Bus routes. If private buses and public buses ply, then there shall be a choice.
- Electricity – No Choice.
- Hotels – Choice is available.
Reasons for Weak Consumerism
- Docile and Fear
It is said that a common citizen in India is, by and large, a docile person. He takes the problems as karma and does not complain much. This is largely due to the lack of education which has not educated to know their rights which our laws have given.
Education should make the people learn the art of asserting, their rights. We are more bothered about what other people think about us rather than what we think about ourselves or what we think about a problem facing us.
A common man is always afraid that if he does not succeed in an effort, he will be put to blame. This is the reason why common people refuse to take a lead in solving a social problem for they feel that if something went wrong, they would be held responsible for that, and they may lose face in the society.
They often say, “I don’t want to cut a sorry figure before the people.” This fear of blame many times prevents us even from asking a trader as to why there is a difference between the printed selling rates on an article and the actual price charged by him.
Quite a number of times we justify our weaknesses. For example:
- If the municipal water supply is irregular, we would say why not draw water from the well? The well water is good for health and it gives us good exercise.
- If a stream of dirty water from the gutter is overflowing on to the street, just leap over it. That is a good exercise and reduces the weight.
- The rich society also spoils the system. Because of their connections or wealth, they are able to meet their requirements without any trouble and they ignore social responsibility. For example,(i) if electricity fails, they install a generator set.
(ii) If water is not available, either they create overhead tank or dig bore well.
(iii) If public transport is not available, they use the car or two-wheelers.
Thus the rich instead of fighting for consumerism, spoil the system.
- Apathy and Consumers
The apathy of consumers has slackened the growth of consumerism. For example, it is common to find toothpaste coming out from the wrong end of the tube. Yet, how many consumers take the trouble of returning the tube or writing to the manufacturer? Since toothpaste costs very little, consumers fell that it is too minor to make an issue of.
Complaints regarding delayed delivery of gas cylinders, faulty T.V. tubes, noisy refrigerators, adulterated petrol, excess billing by water and power bodies, delay in encashment of cheques and demand drafts are a common affair.
When it comes to the question of either writing a complaint or following it up with the dealer, most consumers choose the softer option of thronging up their hands in despair.
- Increase in Population
The increase in population has put a tremendous pressure on the production of food articles and other services and public utilities.
As a result, a supplier of goods does not pay much attention to the quality of goods e.g.
(i) supplying substandard electrical goods, which create electric shocks,
(ii) Defective cooking gas cylinder, which leaks,
(iii) Toys with sharp edges, which may cut the finger/skin of the child who plays with it.
(iv) Misleading advertisements Toothpaste, soap powder, glucose, Horlicks, etc.,
(v) Defective Telephones, (vi) Issuing of Licences to wrong/enable persons.
- Lack of Knowledge
Many a time consumers just do not know the legislation that is available in India. For example, Vegetable oil should be sold only in Kgs. Selling the same in liters is an offense.
But is common that traders sell edible oil in liters. Depending on the type of oil that is sold, the consumer may lose anywhere between 100 to 150 grams for the price he pays per Kg of oil if the same is given in liters. Though some people know they are not showing any interest to exercise their rights.
Many consumers are not aware that there are things like “quality marks”, “expiry dates” etc., Though many may not be able to identify them, yet they do not know that there are things like that which they should look into. Such marks on the products meant to protect the consumer’ interest.
- Marketing and Consumerism
The world economy has been transfigured by shortages of important materials and products. Shortages along with inflation, force the consumer to reevaluate his concept of consumerism.
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