CONSUMERISM

A PROJECT REPORT ON

CONSUMERISM

SUBMITTED BY

NAMRATA MUKUND JERAJANIT.Y.B.M.S. (SEMESTER V)

USHA PRAVIN GANDHI COLLEGE OF MANAGEMENTVILE PARLE (W), MUMBAI-400056

SUBMITTED TO

UNIVERSITY OF MUMBAI

ACADEMIC YEAR

(2010-2011)

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CONSUMERISM

A PROJECT REPORT ON

CONSUMERISM

SUBMITTED BY

NAMRATA MUKUND JERAJANIT.Y.B.M.S. (SEMESTER V)

USHA PRAVIN GANDHI COLLEGE OF MANAGEMENTVILE PARLE (W), MUMBAI-400056

SUBMITTED TO

UNIVERSITY OF MUMBAI

ACADEMIC YEAR

(2010-2011)

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CONSUMERISM

DECLARATION

I, NAMRATA JERAJANI MUKUND of USHA PRAVIN GANDHI

COLLEGE OF MANAGEMENT of T.Y.B.M.S. (Semester V) hereby

declare that I have compiled this project, titled “CONSUMERISM” in the

academic year 2010-2011.

The information submitted is true and original to the best of my knowledge.

Signature of the student

NAMRATA MUKUND JERAJANI

Date:

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CERTIFICATE

I, PROF. DEEPAK GUPTA hereby certify that NAME OF THE STUDENT

of USHA PRAVIN GANDHI COLLEGE OF MANAGEMENT of

T.Y.B.M.S. (SEMESTER V) has completed his project on

“CONSUMERISM” in the academic year 2010-2011. The information

submitted is true and original to the best of my knowledge.

Signature of the Principal Signature of the project guide

(DR. GEETHA MOHAN) (PROF. DEEPAK GUPTA)

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ACKNOWLEDGEMENT

If words are considered as a symbol of approval and token of

appreciation then let the words play the heralding role expressing my

gratitude.

During the perseverance of this Project, I was supported by different

people, whose names if not mentioned would be inconsiderate on my part. I

take this opportunity to express my profound gratitude and deep regard to

my faculty guide Prof. DEEPAK GUPTA for his exemplary guidance,

valuable feedback and constant encouragement throughout the duration of

the project. His valuable suggestions were of immense help throughout my

project work. His perceptive criticism kept me working to make this project

in a much better way. Working under him was an extremely knowledgeable

experience for me.

I would also like to give my sincere gratitude to all my college

librarian staff because of whom I am able to complete my dream project.

Last but not least, I would like to thank my parents and my friends for

their support and feelings without which this project would have not been

possible.

NAMRATA MUKUND JERAJANI

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CONSUMERISM

Preface

The report on consumerism is aimed at giving the reader an insight on how the new

generation of today’s middle class is giving rise to a brand new culture of spending,

called as ‘consumer culture’

The main purpose of this report is to make the readers aware of the changes in monetary

psychology of the global as well as the Indian consumer. It gives a detailed understanding

to the reader on the causes and the effect of such increased consumerism.

Although the topic is very vast and some of the points may not have been covered in this

reports, it is of great importance for middle class youth, such as that of the college, to be

aware of the facts covered in the report, because they are potential spenders of tomorrow,

and hence are going to affect the economy, environment and society in many ways. We

hope that the report is read patiently by the readers and they benefit from the vast store of

knowledge it is intended to provide. We also hope that the report fulfils all requirements

and does not fail to meet expectations.

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Abstract

Though the term consumerism is not unfamiliar to most of us, very few know what it

actually means and what its implications are on the environment, economy and society as

a whole.

Consumerism does not just mean consumption. It indicates the consumption done by the

various sections of the society, especially the fast expanding middle class, for purposes

apart from their day to day needs. It is the psyche of the same. It includes the confidence

of the consumer in terms of the money he spends, because of his pay-packet and

increasing ease in the availability of loans for every cause possible. It is about the

changing status symbols, and how a consumer strives to achieve them. For example, if ,

till yesterday , just having a good job and a decent home was a good enough status

symbol, today, status in the society is not recognized until an individual down not own a

well furnished, interior decorated house, a self owned car, branded clothes and a high end

cell phone. It is about how the media and advertisements actually sow seeds of

consumerism, and convince the consumer that the real happiness lies in their product. It is

about how the priorities of the middle class have changed. For example, if till yesterday

the child went to a not-so-heard-of state board school, but today parents wish to enroll the

child in a high-end international board school along with children o well-off families.

It may seem very significant and unimportant for any person to know these matters, but it

is very essential to understand consumerism, because it is this middle class that plays an

important roll in shaping the economy, of any developing country, especially like India.

Only if they flourish, will the country flourish. It is interesting to know that consumer

credit contributes almost 2.6% to India’s GDP (Gross Domestic Production) while in the

United States, it contributes to almost 50% of the country’s GDP. So, although

consumerism is fast escalating in India, there is a lot of potential still to be explored

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CHAPTER1: HISTORY

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Consumerism has weak links with the Western world, but is in fact an international

phenomenon. People purchasing goods and consuming materials in excess of their basic

needs is as old as the first civilizations (e.g. Ancient Egypt, Babylon and Ancient Rome).

In the nineteenth century, capitalist development and the industrial revolution were

primarily focused on the capital goods sector and industrial infrastructure (i.e., mining,

steel, oil, transportation networks, communications networks, industrial cities, financial

centers, etc.).

At that time, agricultural commodities, essential consumer goods, and commercial

activities had developed to an extent, but not to the same extent as other sectors.

Members of the working classes worked long hours for low wages – as much as 16 hours

per day, 6 days per week. Little time or money was left for consumer activities.

Further, capital goods and infrastructure were quite durable and took a long time to be

used up. Henry Ford and other leaders of industry understood that mass production

presupposed mass consumption. After observing the assembly lines in the meat packing

industry, Frederick Winslow Taylor brought his theory of scientific management to the

organization of the assembly line in other industries; this unleashed incredible

productivity and reduced the costs of all commodities produced on assembly lines.

While previously the norm had been the scarcity of resources, the Industrial Revolution

created an unusual economic situation. For the first time in history products were

available in outstanding quantities, at outstandingly low prices, being thus available to

virtually everyone. So began the era of mass consumption, the only era where the concept

of consumerism is applicable.

In the 21st century

Beginning in the 1990s, the most frequent reason given for attending college had changed

to making a lot of money, outranking reasons such as becoming an authority in a field or

helping others in difficulty. This correlates with the rise of materialism, specifically the

technological aspect: the increasing prevalence of compact disc players, digital media,

personal computers, and cellular telephones. Madeline Levine criticized what she saw as

a large change in American culture – “a shift away from values of community,

spirituality, and integrity, and toward competition, materialism and disconnection.”

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Businesses have realized that wealthy consumers are the most attractive targets of

marketing. The upper class's tastes, lifestyles, and preferences trickle down to become the

standard for all consumers. The not so wealthy consumers can “purchase something new

that will speak of their place in the tradition of affluence”. A consumer can have the

instant gratification of purchasing an expensive item to improve social status.

Emulation is also a core component of 21st century consumerism. As a general trend,

regular consumers seek to emulate those who are above them in the social hierarchy. The

poor strive to imitate the wealthy and the wealthy imitate celebrities and other icons. The

celebrity endorsement of products can be seen as evidence of the desire of modern

consumers to purchase products partly or solely to emulate people of higher social status.

This purchasing behavior may co-exist in the mind of a consumer with an image of

oneself as being an individualist.

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CHAPTER 2: INTRODUCTION

The term “consumerism” is used in several different ways. In economics, it usually refers

to a movement which promotes the right and safety of the consumer which arose in the

early 1900s as people grew increasingly concerned about consumer safety and

manufacturing methods. In philosophy, consumerism refers to a way of life in which

people place a high value on material possessions, and in which people tend to consume

more than they need. In the sense of consumer protection, the rumblings of consumerism

arose in response to issues like contaminated foods, faulty mechanical products, and other

issues. Advocates for consumers started to argue that safety standards needed to be put in

place, and companies needed to be held accountable for their faulty products, for the

protection of consumers. Consumerism in this sense also expands to disputes about false

advertising claims, lobbying for disclosure, and a variety of other topics.

Consumerism has been an age-old topic of criticism. Consumerism is closely related to

materialism, and both trends tend to emerge in capitalist systems, in which consumerism

may be encouraged for a variety of reasons.

Worldwide, consumption of resources occurs disproportionately among the rich, with the

world's poor consuming a fraction of the world's resources. Status symbols such as large

houses, fancy cars, and designer clothing are sometimes viewed and attacked as symbols

of consumerist lifestyles.

Consumerism includes point like

a) Self-protection. Consumer must be aware of his rights, raise voice against exploitation

and seek redressal of his grievances. Consumers' consciousness determines the

effectiveness of consumerism. It is the duty of the consumer to identify his rights and to

protect them. Voluntary Consumer Organisations engaged in gathering and helping

consumers and encouraging them to safeguard their interests is

b) Consumer movement.

The success of consumerism lies in the realisation of the business that there is no

substitute for voluntary self-regulations. Little attention from the business will not only

serve consumers interest but will also benefit them. Some businesses in India have come

together to adopt a code of conduct for regulating their own activities. Regulation of

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business through legislation is one of the important means of protecting the consumers.

Consumerism has over the time developed into a sound force designed to aid and protect

the consumer by exerting, legal, moral and economic pressure on producers and providers

in some of the developed countries.

c) Consumer culture

Consumerism includes consumer culture .That is, instead of working to produce food,

clothing, or other products for our own use, we work to earn money to purchase them.

The term "consumerism" refers, most basically, to the promotion of consumer culture as

good--for the economy, for society, for the individual--and sometimes to the processes

and practices of people who value consuming or who consume many products.

The term "consumerism" generally has negative connotations. For some critics, it

suggests moral problems such as greed and gluttony and materialism. For others, it

suggests political issues ranging from environmental pollution (resulting from the

manufacture and disposal of products that are intended for frequent replacement) to social

inequality (as some people amass spending money while others labor to produce products

often under poor conditions).

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CHAPTER 3: FACTORS STIMULATING CONSUMERS

ADVERTISING

Advertising is a form of communication intended to perceive an audience (viewers,

readers or listeners) to purchase or take some action upon products, ideals, or services. It

includes the name of a product or service and how that product or service could benefit

the consumer, to perceive target market to purchase or to consume that particular brand.

These messages are usually paid for by sponsors and viewed via various media.

Recently, advertisements are shown all around the globe that attempt to lure consumers to

buy products. Advertisements are placed in newspapers, magazines, schools and on

billboards everywhere. According to a survey an average, American sees over 5000

advertisements a day.

Companies learn what consumers want before wasting money on useless ads. A well-

known advertising strategy is making consumers feel insecure and creating fears that can

be overcome by buying. Advertising reveals to latest fashions and the new popular

novelties on the market. It exhibits perfect individuals wearing the new styles and looking

good. Consumers observe this perfection and envy it. Therefore, they go out and buy it

hopes of reaching perfection.

The advertising industry connects products with preferred emotions, such as happiness

and popularity. For example, beer commercials often show a man after a hard day work

enjoying an ice cold beer to relax him. They also argue that ads give people the

impression that products can give them talent. Take athletics for example. Nike ads are

accused of implying that their shoes will a consumer athletic ability.

Types of advertising

Digital advertising

Television advertising / Music in advertising

The TV commercial is generally considered the most effective mass-market advertising

format, as is reflected by the high prices TV networks charge for commercial airtime

during popular TV events. The annual Super Bowl football game in the United States is

known as the most prominent advertising event on television. The average cost of a

single thirty-second TV spot during this game has reached US$3 million (as of 2009).

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The majority of television commercials feature a song or jingle that listeners soon relate

to the product. Virtual advertisements may be inserted into regular television

programming through computer graphics. It is typically inserted into otherwise blank

backdrops or used to replace local billboards that are not relevant to the remote broadcast

audience. More controversially, virtual billboards may be inserted into the background

where none exist in real-life. This technique is especially used in televised sporting event.

Virtual product placement is also possible.; Infomercials: An infomercial is a long-format

television commercial, typically five minutes or longer. The word "infomercial"

combining the words "information" & "commercial". The main objective in an

infomercial is to create an impulse purchase, so that the consumer sees the presentation

and then immediately buys the product through the advertised toll-free telephone number

or website. Infomercials describe, display, and often demonstrate products and their

features, and commonly have testimonials from consumers and industry professionals.

Radio advertising

Radio advertising is a form of advertising via the medium of radio. Radio advertisements

are broadcast as radio waves to the air from a transmitter to an antenna and a thus to a

receiving device. Airtime is purchased from a station or network in exchange for airing

the commercials. While radio has the obvious limitation of being restricted to sound,

proponents of radio advertising often cite this as an advantage.

Online advertising

Online advertising is a form of promotion that uses the Internet and World Wide Web for

the expressed purpose of delivering marketing messages to attract customers. Examples

of online advertising include contextual ads that appear on search engine results pages,

banner ads, in text ads, Rich Media Ads, Social network advertising, online classified

advertising and e-mail marketing,

Product placements

Covert advertising, also known as guerrilla advertising, is when a product or brand is

embedded in entertainment and media. For example, in a film, the main character can use

an item or other of a definite brand, as in the movie Minority Report, where Tom Cruise's

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character John Anderton owns a phone with the Nokia logo clearly written in the top

corner, or his watch engraved with the Bulgari logo. Another example of advertising in

film is in I, Robot, where main character played by Will Smith mentions his Converse

shoes several times, calling them "classics," because the film is set far in the future. I,

Robot and Spaceballs also showcase futuristic cars with the Audi and Mercedes-Benz

logos clearly displayed on the front of the vehicles. Cadillac chose to advertise in the

movie The Matrix Reloaded, which as a result contained many scenes in which Cadillac

cars were used. Similarly, product placement for Omega Watches, Ford, VAIO, BMW

and Aston Martin cars are featured in recent James Bond films, most notably Casino

Royale. In "Fantastic Four: Rise of the Silver Surfer", the main transport vehicle shows a

large Dodge logo on the front. Blade Runner includes some of the most obvious product

placement; the whole film stops to show a Coca-Cola billboard.

Physical advertising

Press advertising

Press advertising describes advertising in a printed medium such as a newspaper,

magazine, or trade journal. This encompasses everything from media with a very broad

readership base, such as a major national newspaper or magazine, to more narrowly

targeted media such as local newspapers and trade journals on very specialized topics. A

form of press advertising is classified advertising, which allows private individuals or

companies to purchase a small, narrowly targeted ad for a low fee advertising a product

or service. Another form of press advertising is the Display Ad, which is a larger ad (can

include art) that typically run in an article section of a newspaper.

Billboard advertising: Billboards are large structures located in public places which

display advertisements to passing pedestrians and motorists. Most often, they are located

on main roads with a large amount of passing motor and pedestrian traffic; however, they

can be placed in any location with large amounts of viewers, such as on mass transit

vehicles and in stations, in shopping malls

Mobile billboard advertising

Mobile billboards are generally vehicle mounted billboards or digital screens. These can

be on dedicated vehicles built solely for carrying advertisements along routes preselected

by clients, they can also be specially equipped cargo trucks or, in some cases, large

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banners strewn from planes. The billboards are often lighted; some being backlit, and

others employing spotlights. Some billboard displays are static, while others change; for

example, continuously or periodically rotating among a set of advertisements. Mobile

displays are used for various situations in metropolitan areas throughout the world,

including: Sporting events, Store openings and similar promotional events, and Big

advertisements from smaller companies.

In-store advertising

In-store advertising is any advertisement placed in a retail store. It includes placement of

a product in visible locations in a store, such as at eye level, at the ends of aisles and near

checkout counters, eye-catching displays promoting a specific product, and

advertisements in such places as shopping carts and in-store video displays.

Coffee cup advertising

Coffee cup advertising is any advertisement placed upon a coffee cup that is distributed

out of an office, café, or drive through coffee shop. This form of advertising was

popularized in Australia, and has began growing in popularity in the United States, India,

and parts of the Middle East.

Celebrity branding

This type of advertising focuses upon using celebrity power, fame, money, popularity to

gain recognition for their products and promote specific stores or products. Advertisers

often advertise their products, for example, when celebrities share their favorite products

or wear clothes by specific brands or designers. Celebrities are often involved in

advertising campaigns such as television or print adverts to advertise specific or general

products. The use of celebrities to endorse a brand can have its downsides, however. One

mistake by a celebrity can be detrimental to the public relations of a brand. For example,

following his performance of eight gold medals at the 2008 Olympic Games in Beijing,

China, swimmer Michael Phelps' contract with Kellogg's was terminated, as Kellogg's

did not want to associate with him after he was photographed smoking marijuana.

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Effect of advertising on teenagers

Teenagers do not fully understand the impact that advertising has on them. Webster’s

dictionary uses words like “vigorous,” “lively,” “immature,” and “impetuous” to describe

youth. Advertisers are well aware of these qualities when they concoct strategies to reach

the youth market.

This curriculum will expose teenagers to the various techniques and strategies that

advertisers use to encourage their desire to buy particular products and services. The unit

is intended for 9th through 12th grade students who have had some computer experience.

It will integrate computer technology, graphic arts, communication and business. Using

cooperative learning, students will form their own advertising agencies and develop

advertising campaigns to promote a product or service.

Since each lesson can stand alone, teachers will have the option to use some or all of the

lessons for their classes. Time will dictate whether or not they choose to do the entire

unit. This unit could be taught in business and technology classes, but might also be

adapted for a social studies or art class.

“Have It Your Way”, “Just Do It”, “Ipod, Therefore I Am”, “Reach Out and Touch

Someone”, “It’s Everywhere You Want To Be”, “Finger Lickin’ Good”, “Got Milk?”

“Be All You Can Be”--We have heard these slogans many times during the course of a

day in some fashion or other. What they all have in common is that they are directed

toward teenagers. Teenagers are probably more influenced by advertising than any other

age group, and they are really not aware of it.

“The advertising industry itself has funded dozens of studies on children designed to

enhance marketing effectiveness. According to the industry newsletter, Selling to Kids,

Saatchi & Saatchi hired clinical psychologists and cultural anthropologists to record more

than 500 hours of interviews and observations of children between the ages of six and 20.

Increasingly, such research is taking place in schools.” “And according to USA TODAY,

grade schools in Connecticut accepted $5,000 from a company in exchange for

permission to interview 10- to 12-year-old students in classrooms after school. The

Gepetto Group conducts focus groups and consults with psychologists to help businesses

better understand how to market to teens by exploiting their vulnerabilities. Teens are ‘...

an oppositional subculture, interested in shutting out the adult world,’ the firm's chief

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strategic officer explained in a Selling to Kids interview. There are enormous

opportunities for the marketer who is able to understand both the reality and fantasy of

teen life.”

“It has been documented that the average teenager spends about 6 ¾ hours a day

(38+ hours/week) using media—television, movies, magazines, newspapers, playing

video games and using the computer. The average child sees approximately 20,000

commercials a year. About 57% of viewers surveyed in 2008 enjoy commercials as much

as television programs. Advertisers spend over $40 billion each year on television

commercials. By the time a child is 18, he or she will have seen about 20,000 food

commercials advertising food low in nutrition. It is estimated that teenagers between the

ages of 13 and 19 spend $100 a week or $144 billion per year on clothing, entertainment,

and fast food. Advertisers now realize that children not only influence the purchases of

the goods and services that appeal to them, but they also influence many of the purchases

in the entire household. For example, it is estimated that 78% of children influence what

their parents buy. These purchases can be small to large ticket items. It is no longer up to

the parents alone to decide what the family needs. With our fast-paced society, teenagers

are being left more on their own to make decisions that have a direct impact on families,

and these decisions are often influenced by what advertising they see—through print,

television, radio, and the internet.

This is an advertisers dream. Is it any wonder that this particular age group is targeted?

We as adults have the ability to think logically when it comes to making purchases. We

see something that we need, research the product to see what best fits those needs, and

then make a purchase. Teenagers, on the other hand, are “impulse” purchasers. “CEA’s

(Consumer Electronics Association) research says teens may be more open to impulse

purchases because they tend not to overanalyze. They are less likely than others to

compare prices or seek recommendations. They buy based upon what their friends are

buying, what will make them more popular with their peer group, or what a celebrity

whom they admire or respect says they need. They are more insecure and more rebellious

than people of any other age group. Advertisers are aware of this and desperately try to

meet their fluctuating—and they are succeeding. They know that teenagers’ tastes will

change on any given day – what’s popular today can be passé tomorrow. Do teenagers

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give any serious thought about the role that advertising plays in what they buy? Do they

realize that a great deal of time, effort, manpower, and money goes into developing

products and services and marketing them to young people? Do they truly understand

how the images they see, hear, touch, smell, and taste trigger their desires to accumulate

more and more “stuff?”

Advertisers have found their niche with teenagers. They have become very creative when

it comes to marketing to this group. We often notice that advertising geared toward this

demographic is often very visual, interactive, incorporates catchy slogans, employs

celebrities to pitch the products, and is simple yet effective in its language. Teenagers

delve into the kinds of advertising that are currently used. They include brand name

slogans, hero endorsements, peer approval, status appeal, quality claims, and informative

techniques, etc. teenagers are attracted through variety of techniques. Since many

teenagers are visual learners, they have an impact through advertisements—in particular

television commercials. “As a television viewer in today’s world, people are influenced

by the commercials played and the products displayed in them. The only problem is that

most teenagers don’t recognize the bait these commercial programs use to lure a viewer

into buying a particular product or merchandise. Even when they do take recognition of

what’s going on, it doesn’t always take effect on this particular age group.” Teenagers

should understand the harmful effects of advertising. For example, products like tobacco

and alcohol that, once a staple of advertising to teens, are now forbidden to be marketed

to this group. Also, students will learn how advertising has played a role in serious social

problems in our society—such as obesity and depression. The problem of obesity has

been chronicled in the movie Supersize Me, in which an individual eats only fast food.

This led to substantial weight gain serious health problems for him. It has been

documented that TV watching may also contribute to obesity by increasing sedentary

behavior, increasing snacking while watching television, and exposing children to

advertisements for unhealthful food and beverages. In addition to harmful effects on

individuals, some advertising may negatively impact society as a whole, including the

political process (Kumanyika and Grier 10)

Advertising is not alone supported through mere animated, colorful, attractive picture but

how product /service and logos have been developed to achieve the results from target

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audience. Logos are an important part of any company’s name recognition, and

companies understand and know how important this appeal can be. In fact, teenagers are

usually fascinated and recognize the product or service through logos. Teenagers are

more apt to wear clothing with a particular logo than any other age group. Their taste in

what they wear is directly influenced by what is “in and in trend” at the moment and a

particular company’s logo has a great deal to do with their decisions to buy a company’s

product. Companies are well learned about how design and typography can make a logo

appealing they will make up a logo for their fictional advertising agency.

Companies well learn how graphics, color, layout, and digital imaging influence how a

product or service will be launched. Companies well analyze the impact of how various

print advertisements work and with that they determine their appeal and also understand

why some ads work better and others don’t work better and accordingly take solution.

They also learn what appeals to teenagers as opposed to other demographicgroups.

Companies use software programs, such as Print Shop, Publisher, and Adobe Photoshop

to develop their own print advertisements. This process help companies to get the result

they wanted to achieve. Advertising is a multibillion dollar industry that continues to

grow. All of Companies come from an urban environment and are consistently

bombarded with advertising images, whether by TV, radio, billboards, posters, internet,

etc. They need to be better informed about how and why they are being targeted and why

it is essential for them to “choose” rather than be “chosen.” Through the use of real-world

experiences and hands-on activities in this unit, companies gain a better understanding of

the role that advertising plays in our everyday decisions to purchase goods and services.

Effect of advertising on children

Extent of Children’s Consumer Influence

When children want commercial objects it is logical course of action to turn to their

parents, who have been providing for them ever since they were born. Until age 2 or 3

parents completely determine what will satisfy their children’s needs, but beginning at

about this age children are permitted some choice. For example in types of toys, because

at this point children are unaware of many want satisfying objects in the marketplace,

their choice options and purchase request are relatively few.

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Starting at approximately age 2, children are exposed to an increasing number of

advertisements targeted to them. Great amount of information is received during store

visits with parents; provide the children with an increasing number of things to want. By

age 5 or 6 this number has probably grown beyond the means of both child and parents to

provide all the things wanted. Upon entering school the youngsters find it necessary to

began developing special persuasive techniques (often leant from peers) to be used on

parents in order to obtain even a small share of a very long list of wants. At this point

parents often hear please like, “I want to,” “I got to have,” “I’ll die if I don’t get . . .”

and “Everyone’s got one except me.”

Magazines and journals influence children on parental purchases of products. Half billion

dollars are spent for advertising, aiming at children and their parents. In addition to

advertising media, there is almost equally importance of stores. Children often look at

mail order catalogs and make requests. The convenience of catalogs in the home, their

greatly increased numbers and their specialization along with the fun and excitement kids

experience from receiving things in the mail have made catalogs an important source of

product ideas for kids. Catalogs were overshadowed by television advertising. Now, due

to social and economic changes, they are again important to households. A great deal of

information about stores and products that influence children’s purchase request is now

available to them in schools. Personnel from retail stores visit schools to present

information to the children about products, while other stores may host school field trips

to their retail locations. Usually these retailers may provide sample of products and/or

coupons and discount programs during visits. Other sources of information targeted to

children are product placement within movies, product samples distributed in school

either in single or pack form, posters at school, television ads presented through

classroom programming and direct mail advertising.

Marketing to Children as Influencers

Marketers direct marketing strategies to children as influencers for 100 billion reasons. It

is a complicating way to sell something and marketers would not do it if it were not

worthwhile. But the fact is that parents give this indirect purchasing power to their

children, and in order to compete most effectively, marketers must influence it.

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The marketer’s basic rule is simple: Sell to the decision maker. If the youngster decides

what type of toy will he/she will like to play with, the parent buys it. The marketers will

most likely direct primary selling effort to the child. To the extent a purchase is the result

of joint decision making, as it often is for children’s good, then persuasive efforts must be

directed to both decision makers. Because there is a very real possibility that the

marketer’s message may not be relayed correctly to the parents from the child, and

because parenting styles and parent-child relationships differ among families, it is logical

to direct the message to both child and parents. Also, if there is some controversy

regarding the particular product, messages directed to both will reduce it.

It is very easy for the marketer to influence children. Requesting items is a natural act of

children. All that is necessary is to inform children of an offering and create desire for the

product. Once the desire is present for a product, children will either try to buy the

product with their own money or ask parents for it. The marketer need only make sure of

the availability of the product to the child and/or parent.

Marketers advertise to children in order to get them to purchase, to influence their parents

and to form favorable attitudes towards the marketers, children cannot and will not

process all the messages. Other communication tools also have an effect like Sales

promotions efforts such as coupons, contests and premiums can often stimulate action

faster and more effectively, than advertising or than advertising alone. Public relations

programs can sometimes create favorable images in the minds of children better and

faster than advertising or advertising alone. Properly designed packing can have

enormous impact on children and their parents once they enter the purchase environment.

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CONSUMERISM

Watching tv24%

Going on vacca-tion6%

Playing video games

19%

Playing with toys16%

Going to see a movie13%

Painting8%

Listening to music14%

Favourite activities

Figure 1: Favorite activities

The above chart indicates that watching TV is considered to be the most preferred

activity amongst the one listed above. This is an indication of the fact that TV is one

medium through which children get all the information be it good or bad. Also there has

been a drastic change in the preference of toys among children who are now willing to

experiment with the recent innovations in the industry being promoted through TV.

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CONSUMERISM

Ads27%

Friends24%

Parents12%

Relatives8%

Through school17%

Comics11%

Medium of getting information

Figure 2: Sources of information

Researches have revealed that children today have been bombarded by advertisements

throughout the year. It is also estimated that an average child watches 20,000

commercials every year that works out to be 55 commercials per day. The above chart

indicates that most of the children get their information on products by watching ads on

the television.

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CONSUMERISM

less than 512%

6 to 817%

9 to 1220%

12 to 1624%

more than 1627%

Average age of child influenced by advertising

Figure 3: Average age of child influenced by advertising

According to the survey conducted children falling in the age bracket >16 and 9-12

constitute 47% of the audience influenced by advertising

Ads30%

Friends25%

Exhibitions 14%

Catalogs11%

Relatives21%

Sources of infomation that aids in making the purchase

Figure 4: Sources of information that aids in making the purchase

This chart indicates that the convenience of catalogs, exhibitions, relatives friends their

greatly increased numbers and their specialization have now been replaced by

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CONSUMERISM

advertisements which parents think provide a great deal of information regarding the

stores and the products available.

Buzz Marketing16%

Internet26%

Commercialization in education21%

Cartoon channels24%

Tie up with play schools13%

Media

Figure 5: Media

This chart shows different ways used by retailers to attract and induce children to buy the

products and service available in the market and increase their sales and profits and hence

it is concluded that internet and commercialization through education are two most

famous ways to induce a purchase among kids.

CONSUMER PSYCHOLOGY

The study of consumers helps firms and organizations improve their marketing strategies

by understanding issues such as how

The psychology of how consumers think, feel, reason, and select between different

alternatives (e.g., brands, products, and retailers);

The psychology of how the consumer is influenced by his or her environment (e.g.,

culture, family, signs, media);

The behavior of consumers while shopping or making other marketing decisions;

Limitations in consumer knowledge or information processing abilities influence

decisions and marketing outcome; 

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CONSUMERISM

How consumer motivation and decision strategies differ between products that differ

s that they entail for the consumer; and

How marketers can adapt and improve their marketing campaigns and marketing

strategies to more effectively reach the consumer.

There are four main applications

The most obvious is for marketing strategy—i.e., for making better marketing

campaigns. For example, by understanding that consumers are more receptive to food

advertising when they are hungry, we learn to schedule snack advertisements late in

the afternoon. By understanding that new products are usually initially adopted by a

few consumers and only spread later, and then only gradually, to the rest of the

population, we learn that (1) companies that introduce new products must be well

financed so that they can stay afloat until their products become a commercial success

and (2) it is important to please initial customers, since they will in turn influence

many subsequent customers’ brand choices.

A second application public Policy . In the 1980s, Accutane, a near miracle cure for

acne, was introduced. Unfortunately, Accutane resulted in severe birth defects if

taken by pregnant women. Although physicians were instructed to warn their female

patients of this. To get consumers’ attention, the company took the step of making

many graphic pictures of deformed babies on the medicine containers.

Social marketing involves getting ideas across to consumers rather than selling

something.

For e.g. It was also determined that the practice of sharing needles was wrong in a

drug culture was required be stopped. As a result, using knowledge of consumer

attitudes, the marketers created a campaign that encouraged the cleaning of needles in

bleach before sharing them, a goal that was believed to be more realistic.

As a final benefit, studying consumer behavior should make us better consumers. It is

commonly understood, for example, that if you buy a 64 liquid ounce bottle of

laundry detergent, you should pay less per ounce than if you bought two 32 ounce

bottles. In practice, however, you often pay a size premium by buying the larger

quantity. In other words, in this case, knowing this fact will sensitize you to the need

to check the unit cost labels to determine if you are really getting a bargain.

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CONSUMERISM

Research Methods

Market research is often needed to ensure that products are produced to what customers

really want and not to according to what we think they want.

There are two types of research methods

Primary & secondary research methods: The main approach to Secondary research

involves using information that others have already put together. For example, if a

company is thinking about starting a business making clothes for tall people, than the

companies don’t need to question people about how tall they are to find out how many

tall people exist that information has already been published by the U.S. Government.

Primary research, in contrast, is research that you design and conduct yourself. For

example, you may need to find out whether consumers would prefer that your soft drinks

be sweater or tarter.

Research will often help us reduce risks associated with a new product, but it cannot take

the risk away entirely. It is also important to ascertain whether the research has been

complete. For example, Coca Cola did a great deal of research prior to releasing the New

Coke, and consumers seemed to prefer the taste. However, consumers were not prepared

to have this drink replace traditional Coke.

Methods of Primary Research

Survey s are useful for getting a great deal of specific information. Surveys can contain

open-ended questions (e.g. which city and state were you born) or closed-ended, where

the respondent is asked to select answers from a brief list (e.g. Male or Female) Open

ended questions have the advantage that the respondent is not limited to the options

listed, and that the respondent is not being influenced by seeing a list of responses.

However, open-ended questions are often skipped by respondents, and coding them can

be quite a challenge. In general, for surveys to yield meaningful responses, sample sizes

of over 100 are usually required because precision is essential. Surveys come in several

Different forms.

Mail surveys are relatively inexpensive, but response rates are typically quite low

typically from 5-20%.

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CONSUMERISM

Phone-surveys get somewhat higher response rates, but not many questions can be asked

because many answer options have to be repeated and few people are willing to stay on

the phone for more than five minutes.

Mall intercepts are a convenient way to reach consumers, but respondents may be

reluctant to discuss anything sensitive face-to-face with an interviewer. Face-to-face

interviews, interviewer bias are a danger, too. Interviewer bias occurs when the

interviewer influences the way the respondent answers. For example, unconsciously an

interviewer that works for the firm manufacturing the product in question may smile a

little when something good is being said about the product and frown a little when

something negative is being said. The respondent may catch on and say something more

positive than his or her real opinion. Finally, a response bias may occur if only part of the

sample responds to a survey, the respondents answers may not be representative of the

population.

Focus groups are useful when the marketer wants to launch a new product or modify an

existing one. A focus group usually involves having some 8-12 people come together in a

room to discuss their consumption preferences and experiences. The group is usually led

by a moderator, who will start out talking broadly about topics related broadly to the

product without mentioning the product itself. For example, a focus group aimed at

sugar-free cookies might first address consumers snacking preferences, only gradually

moving toward the specific product of sugar-free cookies. By not mentioning the product

up front, we avoid biasing the participants into thinking only in terms of the specific

product brought out. Thus, instead of having consumers think primarily in terms of what

might be good or bad about the product, we can ask them to discuss more broadly the

ultimate benefits they really seek. For example, instead of having consumers merely

discuss what they think about some sugar-free cookies that we are considering releasing

to the market, we can have consumers speak about their motivations for using snacks and

what general kinds of benefits they seek. Such a discussion might reveal a concern about

healthfulness and a desire for wholesome foods. Probing on the meaning of

wholesomeness, consumers might indicate a desire to avoid artificial ingredients. This

would be an important concern in the marketing of sugar-free cookies, but might not have

come up if consumers were asked to comment directly on the product where the use of

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CONSUMERISM

artificial ingredients is, by virtue of the nature of the product, necessary. Focus groups are

well suited for some purposes, but poorly suited for others. In general, focus groups are

very good for finding out what kinds of issues are important for consumers in a given

product category. Here, it is helpful that focus groups are completely open-ended. The

consumer mentions his or her preferences and opinions, and the focus group moderator

can ask the consumer to elaborate. In a questionnaire, if one did not think to ask about

something, chances are that few consumers would take the time to write out an elaborate

answer. Personal interviews involve in-depth questioning of an individual about his or

her interest in or experiences with a product. The benefit here is that we can get really

into depth (when the respondent says something interesting, we can ask him or her to

elaborate), but this method of research is costly and can be extremely vulnerable to

interviewer bias.

To get a person to elaborate, it may help to try a common tool of psychologists and

psychiatrists imply repeating what the person said. He or she will often become

uncomfortable with the silence that follows and will not then tend to elaborate. This

approach has the benefit that it minimizes the interference with the respondent own ideas

and thoughts. He or she is not influenced by a new question but will, instead, go more in

depth on what he or she was saying. Personal interviews are highly susceptible to

inadvertent to the respondent. Although an interviewer is looking to get at the truth, he or

she may have a significant interest in a positive consumer response. Unconsciously, then,

he or she may inadvertently smile a little when something positive is said and frown a

little when something negative is said. Consciously, this will often not be noticeable, and

the respondent often will not consciously be aware that he or she is being reinforced and

punished for saying positive or negative things, but at an unconscious level, the

cumulative effect of several facial expressions are likely to be felt. Although this type of

conditioning will not get a completely negative respondent to say all positive things, it

may win the balance a bit so that respondents are more likely to say positive thoughts and

withhold, or limit the duration of, negative thoughts.

Projective techniques are used when a consumer may feel embarrassed to admit to certain

opinions, feelings, or preferences. For example, many older executives may not be

comfortable admitting to being intimidated by computers. It has been found that in such

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CONSUMERISM

cases, people will tend to respond more openly about someone else. Thus, we may ask

them to explain reasons why a friend has not yet bought a computer, or to tell a story

about a person in a picture who is or is not using a product. The main problem with this

method is that it is difficult to analyze responses.

Projective techniques are inherently inefficient to use. The elaborate context that has to

be put into place takes time and energy away from the main question. There may also be

real differences between the respondent and the third party. Saying or thinking about

something that it’s too close to home may also influence the respondent, who may or may

not be able to see through the ruse.

Observation of consumers is often a powerful tool. Looking at how consumers select

products may yield insights into how they make decisions and what they look for. For

example, some American manufacturers were concerned about low sales of their products

in Japan. Observing Japanese consumers, it was found that many of these Japanese

consumers scrutinized packages looking for a name of a major manufacturer. The product

specific-brands that are common in the U.S. (e.g. Tide) were not impressive to the

Japanese, who wanted a name of a major firm like Mitsubishi or Proctor & Gamble.

Observation may help us determine how much time consumers spend comparing prices,

or whether nutritional labels are being consulted.

It helps us to answer what consumer’s wants either considering an entire group or

segments. For example, stores that are designed effectively to promote efficient shopping

for women. If it is found that women are more uncomfortable than men about others

standing too close, the areas of the store should be designed accordingly.

Online research methods The Internet now reaches the great majority of households in

India and all over the world and thus, online research provides new opportunity to

understand the consumers.

One potential benefit of online surveys is the use of conditional branching. In

conventional paper and pencil surveys, one question might ask if the respondent has

shopped for a new car during the last eight months. If the respondent answers he or she

will be asked to skip ahead several questions e.g. going straight to question 17 instead of

proceeding to number 9. If the respondent answered yes he or she would be instructed to

go to the next question which, along with the next several ones, would address issues

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CONSUMERISM

related to this shopping experience. Online survey allows the computer to skip directly to

the appropriate question. If a respondent is asked which brands he or she considered, it is

also possible to customize brand comparison questions to those listed. Suppose, for

example, that the respondent considered Ford, Toyota, and Hyundai, it would be possible

to ask the subject questions about his or her view of the relative quality of each respective

pair and this case, Ford vs. Toyota, Ford vs. Hyundai, and Toyota vs. Hyundai.

Online search data and page visit logs provide valuable ground for analysis. It is possible

to see how frequently various terms are used by those who use a firm web site search

feature or to see the route taken by most consumers to get to the page with the

information they ultimately want. If consumers use a certain term frequently that is not

used by the firm in its product descriptions, the need to include this term in online content

can be seen in search logs. If consumers take a long, torturous route to information

frequently accessed, it may be appropriate to redesign the menu structure and/or insert

hyperlinks in intermediate pages that are found in many users’ routes.

Scanner data Many consumers are members of supermarket lobs. In return for signing for

a card and presenting this when making purchases, consumers are often eligible for

considerable discounts on selected products.

Researchers use a more elaborate version of this type of program in some communities.

Here, a number of consumers receive small payments and/or other incentives to sign up

to be part of a research panel. They then receive a card that they are asked to present any

time they go shopping. Nearly all retailers in the area usually cooperative. It is now

possible to track what the consumer bought in all stores and to have a historical record

Segmentation, Targeting, and Positioning 

Segmentation, targeting, and positioning together comprise a three stage process. We first

(1) determine which kinds of customers exist, then (2) select which ones we are best off

trying to serve and, finally, (3) implement our segmentation by optimizing our

products/services for that segment and communicating that we have made the choice to

distinguish ourselves that way.

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CONSUMERISM

Figure 6: Segmentation,Targeting,Postioning

Segmentation involves finding out what kinds of consumers with different needs exist.

In the auto market, for example, some consumers demand speed and performance, while

others are much more concerned about roominess and safety. In general, it holds true that

you can be all things to all people, and experience has demonstrated that firms that

specialize in meeting the needs of one group of consumers over another tend to be more

profitable.

Generically, there are three approaches to marketing. In the undifferentiated strategy, all

consumers are treated as the same, with firms not making any specific efforts to satisfy

particular groups. This may work when the product is a standard one where one

competitor really can offer much that another one can Usually, this is the case only for

commodities. In the concentrated strategy, one firm chooses to focus on one of several

segments that exist while leaving other segments to competitors. For example, Southwest

Airlines focuses on price sensitive consumers who will forego meals and assigned seating

for low prices. In contrast, most airlines follow the differentiated strategy. They offer

high priced tickets to those who are inflexible in that they cannot tell in advance when

they need to fly and find it impractical to stay over a Saturday. These travelers usually

business travelers pay high fares but can only fill the planes up partially. The same

airlines then sell some of the remaining seats to more price sensitive customers who can

buy two weeks in advance and stay over.

Note that segmentation calls for some tough choices. There may be a large number of

variables that can be used to differentiate consumers of a given product category; yet, in

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CONSUMERISM

practice, it becomes impossibly cumbersome to work with more than a few at a time.

Thus , companies need to determine which variables will be most useful in distinguishing

different groups of consumers. We might thus decide, for example, that the variables that

are most relevant in separating different kinds of soft drink consumers are (1) preference

for taste vs. low calories, (2) preference for Cola vs. non-cola taste, (3) price sensitivity

willingness to pay for brand names; and (4) heavy vs. light consumers. We now put these

variables together to arrive at various combinations.

Several different kinds of variables can be used for segmentation.

Demographic variables essentially refer to personal statistics such as income, gender,

education, location (rural vs. urban, East vs. West), ethnicity, and family size.

Campbell soup, for instance, has found that Western U.S. consumers on the average

prefer spicier soup thus,you get a different product in the same cans at the East and

West coasts. Facing flat sales of guns in the traditional male dominated market, a

manufacturer came out with the Lady Remmington, a more compact, handier gun

more attractive to women. Taking this a step farther, it is also possible to segment on

lifestyle and values.

Some consumers want to be seen as similar to others, while a different segment wants

to stand apart from the crowd.

Another basis for segmentation is behavior. Some consumers are brand loyal e.g. they

tend to stick with their preferred brands even when a competing one is on sale. Some

consumers are heavy users while others are light users. For example, research

conducted by the wine industry shows that some 80% of the product is consumed by

20% of the consumers presumably a rather intoxicated group.

One can also segment on benefits sought, essentially bypassing demographic

explanatory variables .Some consumers, for example, like scented soap (a segment

likely to be attracted to brands such as Irish Spring), while others prefer the lean

feeling of unscented soap (the ivory segment). Some consumers use toothpaste

primarily to promote oral health, while another segment is more interested in breathe

freshening.

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CONSUMERISM

Targeting one or more segments. Our choice should generally depend on several factors.

First, how well are existing segments served by other manufacturers. It will be more

difficult to appeal to a segment that is already well served than to one whose needs are

not currently being served well. Secondly, how large is the segment, and how can we

expect it to grow (Note that a downside to a large, rapidly growing segment is that it

tends to attract competition). Thirdly, do we have strengths as a company that will help

us appeal particularly to one group of consumers Firms may already have an established

reputation? While McDonald has a great reputation for fast, consistent quality, family

friendly food, it would be difficult to convince consumers that McDonald now offers

gourmet food. Thus, McDonalds would probably be better off targeting families in search

of consistent quality food in nice, clean restaurants.

Positioning involves implementing our targeting. For example, Apple Computer has

chosen to position itself as a maker of user-friendly computers. Thus, Apple has done a

lot through its advertising to promote itself, through its unintimidating icons, as a

computer for on-geeks. The Visual C software programming language, in contrast, is

aimed at achieving.

Figure 7: Postioning

Michael Treacy and Fred Wiersema suggested in their book The Discipline of Market

Leaders that most successful firms fall into one of three categories:

Operationally excellent firms, which maintain a strong competitive advantage by

maintaining exceptional efficiency, thus enabling the firm to provide reliable service

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CONSUMERISM

to the customer at a significantly lower cost than those of less well organized and well

run competitors. The emphasis here is mostly on low cost, subject to reliable

performance, and less value is put on customizing the offering for the specific

customer. Wal-Mart is an example of this discipline. Elaborate logistical designs

allow goods to be moved at the lowest cost, with extensive systems predicting when

specific quantities of supplies will be needed.

Customer intimate firms, which excel in serving the specific needs of the individual

customer well. There is less emphasis on efficiency, which is sacrificed for providing

more precisely what is wanted by the customer. Reliability is also stressed.

Nordstrom and IBM are examples of this discipline.

Technologically excellent firms, which produce the most advanced products currently

available with the latest technology, constantly maintaining leadership in innovation.

These firms, because they work with costly technology that need constant refinement,

cannot be as efficient as the operationally excellent firms and often cannot adapt their

products as well to the needs of the individual customer. Intel is an example of this

discipline.

Family Decision Making. Individual members of families often serve different roles in

decisions that ultimately draw on shared family resources. Some individuals are

GATEKEEPER, who seek out information about products of relevance. These individuals

often have a great deal of power because they may selectively pass on information that

favors their chosen alternatives. Influencers do not ultimately have the power decide

between alternatives, but they may make their wishes known by asking for specific

products or causing embarrassing situations if their demands are not met. The decision

maker(s) have the power to determine issues such as:

Whether to buy;

Which product to buy (pick-up or passenger car);

Which brand to buy;

Where to buy it; and

When to buy.

Note, however, that the role of the decision maker is separate from that of the purchaser.

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CONSUMERISM

It should be noted that family decisions are often subject to a great deal of conflict. The

reality is that few families are wealthy enough to avoid a strong tension between demands

on the family’s resources. Conflicting pressures are especially likely in families with

children and/or when only one spouse works outside the home. Note that many decisions

inherently come down to values, and that there is frequently no "objective" way to

arbitrate differences. One spouse may believe that it is important to save for the

children’s future; the other may value spending now (on private schools and computer

equipment) to help prepare the children for the future. Who is right? There is no clear

answer here. The situation becomes even more complex when more parties—such as

children or other relatives—are involved.

Some family members may resort to various strategies to get their way. One is

bargaining—one member will give up something in return for someone else. For

example, the wife says that her husband can take an expensive course in gourmet cooking

if she can buy a new pickup truck. Alternatively, a child may promise to walk it every

day if he or she can have a hippopotamus. Another strategy is reasoning—trying to get

the other person(s) to accept one’s view through logical argumentation. Note that even

when this is done with a sincere intent, its potential is limited by legitimate differences in

values illustrated above. Also note that individuals may simply try to "wear down" the

other party by endless talking in the guise of reasoning (this is a case of negative

reinforcement as we will see subsequently). Various manipulative strategies may also be

used. One is impression management, where one tries to make one’s side look good (e.g.,

argue that a new TV will help the children see educational TV when it is really mostly

wanted to see sports programming, or argue that all "decent families make a contribution

to the church"). Authority involves asserting one’s "right" to make a decision (as the

"man of the house," the mother of the children, or the one who makes the most money).

Emotion involves making an emotional display to get one’s way (e.g., a man cries if his

wife will not let him buy a new rap album).

Group Influences

Humans are inherently social animals, and individuals greatly influence each other. A

useful framework of analysis of group influence on the individual is the so called

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CONSUMERISM

reference group—the term comes about because an individual uses a relevant group as a

standard of reference against which oneself is compared. Reference groups come in

several different forms.

The aspirational reference group refers to those others against whom one would like

to compare oneself. For example, many firms use athletes as spokespeople, and these

represent what many people would ideally like to be.

the dissociative reference group includes people that the individual would not like to

be like. For example, the store literally named The Gap came about because many

younger people wanted to actively dissociate from parents and other older and

"uncool" people. The Quality Paperback Book Club specifically suggests in its

advertising that its members are "a breed apart" from conventional readers of popular

books.

Reference groups come with various degrees of influence. Primary reference groups

come with a great deal of influence—e.g., members of a fraternity/sorority. Secondary

reference groups tend to have somewhat less influence—e.g., members of a boating club

that one encounters only during week-ends are likely to have their influence limited to

consumption during that time period.

Another typology divides reference groups into the informational kind (influence is based

almost entirely on members’ knowledge), normative (members influence what is

perceived to be "right," "proper," "responsible," or "cool"), or identification. The

difference between the latter two categories involves the individual’s motivation for

compliance. In case of the normative reference group, the individual tends to comply

largely for utilitarian reasons—dressing according to company standards is likely to help

your career, but there is no real motivation to dress that way outside the job. In contrast,

people comply with identification groups’ standards for the sake of belonging—for

example, a member of a religious group may wear a symbol even outside the house of

worship because the religion is a part of the person’s identity.

Learning and Memory

Learning involves "a change in the content or organization of long term memory and/or

behavior." The first part of the definition focuses on what we know (and can thus put to

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CONSUMERISM

use) while the second focuses on concrete behavior. For example, many people will avoid

foods that they consumed shortly before becoming ill. Learning is not all knowledge

based. For example, we may experience the sales people in one store being nicer to us

than those in the other. We thus may develop a preference for the one store over the

other; however, if pressed, we may not be able to give a conscious explanation as to the

reason for our preference.

Classical conditioning Pavlov’s early work on dogs was known as classical conditioning.

Palvov discovered that when dogs were fed meat powder they salivated. Pavlov then

discovered if a bell was rung before the dogs were fed , the dogs would begin salivating

in anticipation of being fed. Pavlov the found that after the meat had been “paired” with

meat powder enough times, Pavlov could ring the bell without feeding the dogs and they

would still salivate.

In the jargon of classical conditioning, the meat powder was an unconditioned stimulus

and the salivation was, when preceded by the meat powder,an unconditional response and

hence conditioning theory suggest that that consumers must learn from their own

experiences.

Motivation, Personality, and Emotion

Perspective on Consumer Behavior and Motivation: We considered several

Perspective on behavior as a way to understand what motivates the consumer. Each of

these perspective suggest different things as to what marketer should do and what can be

controlled. Note that each perspective tends to contain a piece of truth and that one

should not be too dogmatic in emphasizing one over the others.

The hard core behavioral perspective is based on learning theories such as operant and

classical conditioning. These theories suggests that the consumers must learn from his

own experiences

Consumers are motivated to achieve goals. Achieving these goals may require sustained

activity over time (e.g. exercising every day for months or years) as opposed to just

taking some actions once. Consumers maintain a balance between the desires for stability

and variety. Most consumers want a certain stability (they do not want to try an entirely

new food every day)

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CONSUMERISM

The means end chain consumers often buy products not because of their attributes per se

but rather because of the ultimate benefits that these attributes provide, in turn leading to

the satisfaction of ultimate values. For example, a consumer may not be particularly

interested in the chemistry of plastic roses, but might reasons as follows:

Highly reliable synthetic content of roses

Roses will stay in original condition for a long time

Significant other will appreciate the roses longer

Significant other will continue to love one

The important thing in a means-end chain is to start with an attribute, concrete character

(which tends to become progressively more abstract) that end with a value being

satisfied. Thus, each chain must start with and attribute and end with a value.

An important implication of means-end chains is that it is usually most effective in

advertising to focus on higher level items. For example in the flower example above an

individual giving the flowers to significant other might better be portrayed than the

flowers alone.

ECONOMIC ASPECTS

Consumer confidence

Consumer confidence is heading northwards. Consumers are confident about the growing

economy and expect it to grow further. Taking a look at history, the Consumer

Confidence Index (CCI) started at 81points in December’02 plummeted to 75 points in

March’03 and by the end of September’03, it reached 88 points. This is a recovery of

11% which cannot be understated. For the first time, there is an all-round increase in

optimism, be it SEC (Socio-Economic Categories) or by occupation, town class or zones,

all shown an increase.

At the initial level, the index is comprised of 2 indices, Present Situation Index (PSI) and

Future Expectation Index (FEI). The PSI gives an indication of the consumer’s

impression of the present scenario. Both the indices have risen by 9% points.

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CONSUMERISM

DELHI

jaipur

mumbai

ahmed

abad

kolka

tta

bhuvanesh

war

banglo

re0

20

40

60

80

100

120

140

PSIFEICCI

Figure 8: City-Wise movement of Indices

Banglore is the most ecstatic, with its PSI of 108, closely followed by Ahemdabad.

Banglore, once again is the most confident about the future, with FEI of 135, while

Ahemdabad, Jaipur and Bhuvaneshwar have also shown optimism, sentiments of

Mumbai have really picked up. The FEI in Mumbai has grown by 24% over the last

quarter. If the recent stock market rally is anything to go by, the optimism might just paid

off. Overall, while Banglore’s CCI is the highest at 121, Kolkata’s CCI is low of 58.

25-34 35-44 45-54 550

20

40

60

80

100

120

PSIFEICCI

Figure 9: Consumer Confidence across Age Group

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CONSUMERISM

The variation in confidence generally expected across age groups is not there. Confidence

levels are almost uniform.

Delhi Jaipur Mumbai Ahmedabad Kolkata Bangalore 0

20

40

60

80

100

House

Colour Tv

2-Wheeler

Cellphone

None

Figure 10: Percentage demand for select consumer durables in major cities

By its sheer size, the middle class determines the overall demand pattern in the country’s

large cities. Two- wheelers are at the top of the urban consumer’s wish list as far as

consumer goods go. Affordability, convenience and a wide range of choice market the

mobile phone a favorite of the Indian masses. Traditional durables such as color TVs and

houses also rank high. Out of the 31.0% who are willing to spend on at least one

consumer durable item, about 10.83% want to purchase a two-wheeler over the next 6

months.

City-wise, Ahemdabad and Jaipur have contributed to this high a degree of demand for

two wheelers. In fact, these two cities beat the three- Delhi, Mumbai and Kolkata in terms

of percentage of consumers aspiring for a mobile phone too. Jaipur and Ahemdabad are

ahead of the metros even with regards to television sets and houses. Maybe the fact that

the cost of living in the big cities is very high, or that the consumers in the big cities

expect prices to rise at a rate faster than their incomes, but it is much harder for the

middle class to invest in consumer durables.

Loans

Inter – bank competition for retail loans has heated up for quite some time now. Offers

luring customers with free credit cards and insurance covers abound. The middle class

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CONSUMERISM

consumer is now actively taking bank loans to buy consumer durables as well as houses.

The trend is expected to be sustained in the near future.

The ET-NFO reveals that 50% of the urban consumers are potential loan-takers. This is a

huge market and with the historically low interest rates, it is poised for a boom. 52.7% of

the urban consumers feel that interest rates are going to fall. This causes cost of loans to

reduce and the return on demand deposits also falls.

Investment in real estate and land is considered traditionally safe and profitable in India.

The general expectations are that the real estate prices will rise. The demand for home

loans has therefore increased. The tax benefits for those taking home loans are increased

the willingness of the consumer to take loans.

south north east west0

10

20

30

40

50

60

70

80

90

vey unlikelysomewhat unlikelyundecidedsomewhat likelyvery likely

Figure 11: Likelihood to take loans to purchase a house or household items

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CONSUMERISM

will increasewill decreaseremain samecant sayno response

Figure 12: How will interest rates move?

In the new India, living off debt has become a well accepted norm. The statistics of

consumers finance in the last few years show a change in the attitude of Indians towards

spending. The conservative, cautious, thrifty, debt-averse middle class of the past seems

to have given way to a new middle class that is free of all inhibitions regarding

conspicuous consumerism. Unlike its predecessor, it sees no social stigma in borrowing

for consumer spending. The ‘urge to spurge’ is currently an urban phenomenon, but it

won’t be long before urban lifestyle rubs onto its rural counterpart. So, businesses are

increasingly focusing on the rural segment, from the next wave of demand is expected.

Don’t like taking loans

Jewellery

Durables

Other purposes

Education

Vehicle

House

0 10 20 30 40 50 60

No. of people

Figure 13: Openness to loans

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The urge to spend was not absent in the early generations, but there was hardly any

finance for it. The bank lending was always directed towards agriculture and

manufacturing, and people were discouraged from taking loans for personal finance.

However, the advent of co-operative banks and the stock market boom opened new doors

of opportunity for consumer finance. Many banks left their earlier pre-occupation of

funding industrial projects and working capital to fund the consumer financing demand.

Yet, consumer loans to GDP ratio in India is only 2.6% as compared to 50% in US. Thus

we have lot of potential to be exploited.

1997-98 1999-2000 2001-02 2003-040

2

4

6

8

10

12

Figure14: Bank Rate (Almost halved in 5 years)

One of the reasons for the consumer finance boom is the fact that consumers are

borrowing at a earlier stage in their career cycle. The average consumer stage has come

down from 41 to 31 years for items like houses and cars. In addition to this interest rates

have come down and startup salary levels have gone up. There are aspirational changes in

the life-style of DINK( double income no kid). Taking a loan enables one to flout one’s

credit worthiness. A gold credit card, an accent car parked outside a mortgage house, a

designer label to wear and over 1.5lakh on an overdraft is sure way to get one self

noticed.

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CONSUMERISM

car

house or flat in a specified locality

others

Figure 15: Status symbol

With the advances touching Rs.7500/- , car loans is the next segment that has spurred

growth in consumer loans. Near 75% of the 6lakhs cars that roll out every year are

financed. Along with this, housing loans have been increased. The average ticket size for

a housing loan is 3.5lakh, and the average loan tenure is 15years. The average age of a

loanee is around 31-35years. Apart from this, the Indians have been exposed to a host of

tempting lifestyles post –liberalization. Beginning with the satellite TV, there are items,

which were once status symbols but are now necessities- cell phones, 2wheelers, ACs,

Cars are seen as such. Also foreign products and edibles are available in almost every

store in the metros. With the sudden rise in the shopping malls, which offer a range of

products under one roof, cars with big names, food courts in every book and corner of the

city and all international brands easily being available throughout the country it is not

surprising that over 12 lakh retail outlets of India contribute over Rs.14000 crore to

India’s GDP. And the contribution is expected to go up with Rs.35000 crore in the

pipeline for investment.

Credit cards:

Payment habits have also undergone transformation with plastic replacing cash. The

population using credit cards has raised from 5 lakhs in 1998 to 60 lakhs in 2008. The

average annual spend through credit card is Rs.18000 and it adds up to Rs.10000 crore

cumulatively, out of which Rs.2500 crore is revolving credit. Consumers have started

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CONSUMERISM

using credit cards to buy clothes, go to restaurants, buy air tickets, hotel stay etc. so they

are far more used for transactional purposes than as a means of credit. Banks love credit

financing, especially revolving credit, which gets 30 -35% interest rates per annum. In the

Grade I restaurants, at least 60% business is on credit cards, while in the malls, 40% of

the sales are through credit cards.

Life on credit

For years, Indians lived weatherproof maxim of rahim: “thate paon pasriye jitte lamba

saur (stretch your legs such that your legs don’t stick out of the blanket)”. Very simply,

Akbar’s poet-minster advised living within means. So, Indians had among the highest

saving rates, conspicuous spending was frowned upon and assets were created either out

of savings, or inheritance. Would-be grooms were, and still are on the basis of personal

habits and personal debt. To be in debt, in short, was to mortgage the future-among the

worst curses one could invite. But all this changed. Indians now would rather stretch their

legs beyond the blanket to live their life king-size. The DSP Merill Lynch India

Economic Report reveals that bank lending to individuals has trebled from Rs.53,600

crore to over Rs.160000 crore in 5 years as Indians borrow and spend on homes, cars,

consumer durables, marriages, even holidays. The cocktail of surge in disposable income

blended with access to credit by exposure to media has translated wants to be needs.

The acronym EMI (Equated Monthly Installments) has now come into ubiquity. Market

researcher AC Neilsen ORG –MARG’s Money Track 2008 studied who was buying what

and how across the country and came up with startling revelations. Nearly every third

person had brought either a house or goodies on installment. And almost every second

person (46%) living in Class-I towns was now shopping on credit. The Economic Survey

2008-09 stated that,” consumption expenditure contributed to as much as 73.6% of the

growth in GDP”, a tacit admission that individual spend kept the economy ticking despite

of the worst draught ever. Till a few years ago, borrowers had to sweat it out at the

waiting rooms of the banks, use influence, and wait for a long, long time to get a loan

passed. Not anymore. Today, one can get car loan within 72 hours stirring out of the

house. Marketing individuals come to you, in fact chase you around your workplace with

e-mails, sms and phone calls. Apart from the ease to borrow, the credit itself has become

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CONSUMERISM

extremely affordable and is luring more and more people to borrow. Interest rates have

halved in the last 5years. Rates for car loans have slipped from 16% in 1997-98 to 11% in

2008. Housing loans rates have slipped from 15.5% to 7.5% , bringing down the per lakh

EMI from Rs.1400 to just Rs.750 plus.

1997-98 1999-2000 2001-02 2003-040

2

4

6

8

10

12

14

16

Series1

Figure 16: Car Loan (steadily declining rates)

1997-98 1999-2000 2001-02 2003-040

2

4

6

8

10

12

14

16

18

Figure 17: Housing Loans (rates are dipping & dipping)

As India gets younger, with over 700 million under the age of 35 it is more willing to

take risks. The earlier generation first let the piggy-bank fill up before they spent. Today,

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CONSUMERISM

the attitude is to borrow to create assets. A lot of jobs are coming to India, because of the

rush of outsourcing, exports and the growth in the domestic economy. His is creating a

flow of income in the hands of people and people are now more willing to borrow than

ever before on the strength of income flow. How did India come under such a low

interest, low EMI regime? The simple one-word answer would be reforms. On the supply

side, abolition of license allowed creation of capacity which triggered competition

leading to a crunch in demand which furthered competition and led to aggressive

marketing both in financing and pricing methods. So, not only have things become

cheaper but also the costs have been kept low as there are many manufacturers chasing

the buyers. This has brought down inflation to around 4%. Armed with low inflation,

burgeoning forex inflows which enabled creation of rupees to feed rising government

borrowing and blessed by lack of demand for credit form the corporate world, the RBI

managed the lowering of interest by slashing bank rate ruthlessly from 10.5% to 6% in

five years.

Value of money

If the world has moved at a fast pace through the centuries India has zoomed at

supersonic speed in the last 20years. And if money is trouble, the Indian youth want more

and more of it. The fast expanding middle class is now realizing about its safety, new

power and utility of money. Forget hoarding and worrying about its safety, new India is

juggling in a way which would have well baffled their forefathers. If a pensionable job or

steady business was the ambition of the last generation, today racy 20-30year olds opt for

jobs which pay more, switch jobs by sacrificing tenure for moolah, preferring instant

reward system. Just as earlier generations used to bulk their income for food and long

term savings, today’s generation does the same for food, housing and entertainment.

While goods, such as refrigerator or a car, were once durables that were handled down to

the next generation. Now, a 10 year old find its way to the scrap yard. The younger

generation picks up consumer durables the way older generation bought vegetables.

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How you make money is important

Lack of money makes one envy those who have

Lack of money makes frustration

Its OK to show off ones wealth

Wealth is an important measure of success

Prefer to enjoy life for the moment

Will give up personal time to earn more

0 10 20 30 40 50 60 70 80 90 100

Figure 18: Attitude towards Money

Twenty first century Indians are steadily moving up the hierarchy of needs popularized

by American motivation specialist Abraham Moslow. While the summit of our needs is

self-actualization, money is the primary tool for achieving power and self-esteem. A

mighty dose of vitamin-M is the best energizer for the fulfillment of the needs in an

environment which has become career driver, communication oriented and market

dominant. Money, apart from security, safety and the goodies buys respect for most of

the youth today. They plan their lives, splurge, work hard, invest better and even plan

retirement.

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CHAPTER 4: EFFECTS OF CONSUMERISM AND CRITICISM

AGAINST THE CONSUMERISM

PSYCHOLOGICAL EFFECTS

These forces are manifested as consumerism: At first a growing number of pleasant

conveniences for housewives in the 1950’s, then a car for everyone with the gradual

erosion of transit, then the iniquitousness of things and chemical products technologically

unimaginable a few earlier, then growing availability of consumer credit and debt, the

over-dependence on labor-saving devices, total dependence on the car and absolute

necessity of full time work, the two income household to pay for more and more, then the

importation of cheaper and cheaper goods and the disappearance of manufacturing jobs

and now the decline of service work with professionals next to be downsized…….will it

ever end? Simply stated, there’s a lot of money being made and a lot of power being

gathered by the people that promote consumerism. You pay for it in gradually limited

economic mobility, pollution, threats to your health and a declining standard of living, as

measured by the things that really matter.

Consumerism is economically manifested in the chronic purchasing of new goods and

services, with little attention to their true need, durability, product origin or the

environmental consequences of manufacture and disposal. Consumerism is driven by

huge sums spent on advertising designed to create both a desire to follow trends, and the

resultant personal self-reward system based on acquisition. Materialism is one of the end

results of consumerism.

Consumerism interferes with the workings of society by replacing the normal common

sense desire for an adequate supply of life’s necessities, community life, a stable family

and healthy relationships with an artificial ongoing and insatiable quest for things and the

money to buy them with little regard for the true utility of what is bought. An intended

consequence of this, promoted by those who profit from consumerism, is to accelerate the

discarding of the old, either because of lack of durability or a change in fashion. Landfills

fill with cheap discarded products that fail early and cannot be repaired. Products are

made psychologically obsolete long before they actually wear out. A generation is

growing up without knowing what quality goods are. Friendship, family ties and personal

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autonomy are only promoted as a vehicle for gift giving and the rationale for selection of

communication services and personal acquisition.

Everything becomes meditated through the spending of money on goods and services. “I

can imagine it, therefore I want it. I want it, therefore I should I should have it. Because I

should have it, I need it. Because I need it, I deserve it, I will do anything necessary to get

it.” This is artificial internal drive that the advertisers tap into. You “can imagine it”

because they will bombard your consciousness with its image until you move to step two,

“I want it……etc.” this is one of the things that allows people to surrender to

consumerism. As a society we have gone from self-sufficiency based on our internal

common sense of reasonable limits to the ridiculous goal of Keeping up with Jones then

to stampeding for the Lifestyles of the Rich and Famous, or at least as far as our credit

limit allows us to go. We have been programmed to believe that we should pursue more

money to spend on more things offered in the marketplace, to be living mannequins for

the material adornments of the hour, our worth determined by what we have or don’t

have, rather than what we are, what we do or what we know.

People become used to the intrusion of advertising into their consciousness in the form of

television or the massive bundle of advertising pulp that masquerades as a Sunday

newspaper and so they fail to protect themselves, or worse, their children from being

seduced by it. Convinced that their self worth is based on 200$ athletic shoes or designer

clothing, children are already on the road to spiritual dissatisfaction and resentment as

well as a perception of diminished self-worth. When they become adolescents they are

probably not going to be happy or productive even were they provided with an endless

supply of things that few parents could afford. Where once parents shared the home with

their adult children, acting as baby-sitters and providers of wisdom and tradition, we now

have corporate owned day care and rest homes. This preservation of nuclear family ties is

one reason that some immigrant groups are still able to excel economically until the

second generation (usually) becomes affected by consumerism, abandons its parent’s

values and then often goes overboard using material objects as means of self

identification with American society. You usually see people thus affected in public

places, lurking around a piece of machinery, such as a car or boat. They bask in its

radiance, act respectful and imply knowledge about its quality and providence. They act

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CONSUMERISM

as they feel that they should act, making sure that others see them acting this way in the

presence of the thing. They can only communicate with each other through the medium

of the object, the cold piece of metal, in the presence of which they feel that can speak to

each other and actually show some emotion and interact. The thing, the product, becomes

a longed for goal, a means of justifying their existence, a way of envisioning themselves

in a different world with possession of the thing being the key tenet. Particular speech

patterns often develop around things to the exclusion of the personal qualities of the

speaker, as in “I used to have ….”/ “Yeah, friend of mine, he’s got a “57”, “last night I

drank seen the new..” … how about those forty-Nine?.. “ look what I got”…

The more consumerism spreads, the weaker is the incentive to manufacture long-lasting,

quality products, and the greater the likelihood that cheaply made products will instead be

imported from the lowest-wage, environmentally unregulated overseas manufacturer that

mobile capital, ever seeking the highest return, can find. “Disposable” items exemplify

this. Rather than compete on quality or reliability, product are made for a one time use.

“Fun” is a catchword discarding notions of inherent value, longevity, and the

environmental consequences of manufacturer and disposal of the product. Buying quality

products that are warranted against failure or wearing out, learning about the materials

that things are made of; their national origin and the conditions of the workers that make

them are some ways of resisting consumerism and waste.

While there may be new appliances and cars that are more productive and energy

efficient, discarding the old often leads to an almost total waste of the energy and

material already invested in the products. This alone may more than nullify the energy

savings of the new.

ENVIRONMENTAL EFFECTS

Our consumption of goods obviously is function in our culture. Only by producing and

selling things and services does capitalism in its present form work, and the more that is

produced and more that is purchased the more we have progress and prosperity. The

single most important measure of economic growth is, after all, the gross national

product, the sum total of goods and services produced by a given society in a given year.

It is a measure of the success of a consumer society, obviously, to consumer.

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However, the production, processing, and consumption, of commodities requires

extraction and use of natural resources(wood, oil, fossil fuels and water);it requires

creation of factory and factory complexes whose operation create toxic by product, while

the use of commodities themselves(e.g. automobiles) creates pollutant and waste. Yet of

the three factors environmentalists often point to as responsible for environmental

pollution- population, technology and consumption – consumption seems to get the least

attention. One reason of doubt, is that it may be the most difficult to change; our

consumption patterns are so much as part of our lives that to change them would require a

massive cultural overhaul, not to mention the economic dislocation. A drop in demand

for products for products, as economists note, brings on economic recession or even

depression, along with massive unemployment.

As hinted above, within the current economic system of “perpetual growth” we being

risked locked into a mode of development that is:

Destructive, in the long run, to the environment

A contributing factor to poverty around the world

A contributing factor to hunger amongst immense wealth

And numerous other social and ecological problems

Unnecessary Land Usage

How land is used to produce food etc. can have enormous impacts on the environment

and its sustainability. (It is a common and traditional belief that our overpopulation is the

main factor responsible for environmental degradation. However, we bring in the account

the fact that how and why resources are used is an even more vital factor for

environmental degradation) take the following example:

Junk-food chains, including KFC and Pizza Hut, are under attack from major

environmental groups in United States and other developed countries because of their

environmental impact. Intensive breeding of livestock and poultry of such restaurants

lead to deforestation and land degradation, and contamination of water resources and

other resources. For every pound of red meat, poultry, eggs, and milk produced, farm

field lose about five pounds of irreplaceable top soil. The water necessary for meat

breeding comes to about 190 gallons per animal per day, or ten times what a normal

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Indian family is supposed to use in one day, if it gets water at all. Overall, animal farms

use nearly 40% of the world’s total grain production. In the United States, nearly 70% of

grain production is fed to livestock.

Pollution

Pollution is also related to increased consumption. That is, the consumption itself, plus

the production and waste of products used in consumption. Automobiles are a clear

example. Other examples included industrial waste (especially when just dumped into

rivers and oceans), waste from the tourist (including cruise liners, air travel, etc.), waste

from industrial agriculture and so on.

Export of Waste

While pollution is increasing in poorer countries as well, it is not solely due to rising

population, because, as the U.N. points out, and as mentioned earlier, 86% of the world’s

resources are consumed by the world’s wealthiest 20%. Hence, even if pollution is

occurring in poor countries, a large portion of it is to meet this consumer demand.

Another trend is to also export waste to other regions of the world. As one example,

hazardous electronic waste, such as old computers, old computer monitors , etc primarily

from wealthier nations, are also being from exported from China, India and Pakistan,

where they are processed in operations that are extremely harmful to human wealth and

the environment. However, minimal or non- existent environmental and working

standards and regulations, old technologies for recycling and processing, etc. is putting a

lot of people and surrounding environment at risk due to sheer amount of waste to be

processed. “They call this recycling, but it’s really dumping by another name,” added

Puckett. “Yet to our horror, we further discovered that rather than banning it, the United

States government is actually encouraging this ugly trade in order to avoid finding real

solutions to the massive tide of obsolete computer waste generated in the U.S daily”.

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CHAPTER 5: GREEN CONSUMERISM

Green consumerism creates a balance between the expectations of consumer behaviour

and businesses' profit motives - within the orbit of environmental protection. It is

increasingly calls upon to look at the entire life cycle of a consumer's purchases - because

a consumer does not just buys 'a' product, but also everything that went into its

production, and everything that will happen in the future as a result of that product. We

need to realize that all products have an environmental impact, however small. The

concept of green consumers also focuses on businesses and their survivability as they

respond quickly to demands of consumers for products and services that are also

environmentally friendly.

The Power of Green Consumers

Review of Vital Signs

Well-informed consumers are emerging as a new force in the global struggle to create an

environmentally sustainable world, reports a new study by the Worldwatch Institute, a

Washington, DC-based environmental and social policy research organization. Aided by

labeling programs, standards, and an expanding group of social and environmental

certification organizations, the world's consumers are 'voting with their wallets' for

products and services that promote sustainable development.

'Some free market advocates claim that the market automatically gives people all the

choices they want and all the information they need,' says Michael Renner, Worldwatch

Senior Researcher and Project Director for Vital Signs. 'But what consumers are

demonstrating is that they want more environmentally acceptable choices than the market

has been delivering, and more trustworthy information about the social and

environmental impact of the products they might buy.'

'Vital Signs ' produced with the support of the United Nations Environment Programme

(UNEP) and the W. Alton Jones Foundation - documents many instances where

consumers, often aided by information-brokering organizations, are seeking out goods

and services that promote sustainable development

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CONSUMERISM

Some examples of Green Consumerism

The Mexico-based Forest Stewardship Council has certified over 25 million hectares

of commercial forest in 54 countries as meeting social and environmental standards

for sustainable forestry, more than double the area.

Worldwide, buyers of energy-saving compact fluorescent lamps (CFLs) have

eliminated the need for nearly 40 medium-sized, coal-fired power plants.

At the seafood counter, consumers can now find rock lobster, cockles, hoki,

mackerel, herring, and salmon that carry the Marine Stewardship Council's logo as

having been harvested under environmentally responsible management.

Thai consumers have used information from an appliance-labeling program to drive

the market share of energy efficient, single-door refrigerators from 12 percent in to 96

percent in.

In 21 European countries, beachgoers follow the ratings of the European Blue Flag

campaign to find some 2,750 beaches and marinas with high environmental standards

and sanitary and safe facilities.

Coffee drinkers in the US and Canada can ask for their coffee to be brewed from beans

carrying the Bird Friendly seal of approval from the Smithsonian Migratory Bird Center.

This program certifies that the beans meet standards for shade farming and organic

production.

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CONSUMERISM

CHAPTER 6: CONSUMER PROTECTION ACT

The consumer protection Act, 1986, provides for the better protection of consumers.

Unlike existing laws which are punitive or preventive in nature, the provisions of this Act

are compensatory in nature. The act is intended to provide simple, speedy and

inexpensive redressal to the consumers' grievances, award relief and compensation

wherever appropriate to the consumer. The act has been amended in 1993 both to extend

its coverage and scope and to enhance the powers of the redressal of grievances.

Consumer Protect Rights

i. Right to be protected against the marketing of goods and services which are

hazardous to life and property;

ii. Right to be informed about the quality, quantity, potency, purity, standard and

price of goods or services so as to protect the consumers against unfair trade

practices;

iii. Right to be assured, wherever possible, access to a variety of goods and services

at competitive prices;

iv. Right to be heard and to be assured that consumers' interests will receive due

consideration at the appropriate forum;

v. Right to seek redressal against unfair trade practices or unscrupulous exploitation

of consumers;

vi. Right to consumer education

The Act also envisages establishment of Consumer Protection Councils at the central,

state and district levels, whose main objectives will be to promote and protect the rights

of consumers.

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CHAPTER 7: CASE STUDY

CONSUMERISM IN TRIBAL INDIA:

A. INTRODUCTION

The tribal economy all over the world was generally characterized by its primitiveness,

where market was virtually absent and money played a trivial role. People produced their

every need on their own. They neither produced any marketable surplus nor did they

purchase anything from the market. The mode of production was mainly agrarian based,

apart from which they practiced hunting, gathering, fishing, weaving, etc. A sort of

stagnant but self-sufficient and self-reliant economy has been persisting since time

immemorial. The colonial administration to some extent, had given some developmental

touch to these societies mainly for the convenience of intra and inter-territorial expansion

activities; rather the true history of development of these societies has started from the

time of independence for the individual societies or for the state as a whole.

And the task of development in these societies was carried out mainly on the basis of

huge capital investment without estimating any result. Because of chief money flow as

injected into the societies, the mode of production has also changed drastically followed

by the consumption pattern. The standard of living has risen apparently, however, the

developmental task has become complicated and it becomes more knotty when the

market in these societies gets the globalization waves. Now these are purely consumerist

societies and gaining momentum to conduct vigorous studies on different socio-economic

aspects that determine development.

The study area, Arunachal Pradesh is located at the North East extremity of the Eastern

Himalayan belt with the geographical extents of 26°28´N to 29°30´N latitudes and

91°30´E to 97°30´E longitude, covering a geographical area of 83,743 km2. The state

is bounded by the international borders i.e., Bhutan in the west, China in the snow clad

north and Myanmar in the north east; apart from an inter-state boundary with Nagaland in

the east and Assam in the south. The entire state of Arunachal Pradesh is almost a rugged

mountainous terrain (ranging from 1829 m ASL to 6400 m ASL) with beautiful green

valley’s drained by innumerable rivulets and mighty rivers cascading down from the

upper elevations. The sparsely inhabited Arunachal Pradesh is predominantly occupied

by the 110 major tribes and sub-tribes, and there are said to be about 20 major ethnic

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groups, who are affiliated to the so-called Tibeto-Burmese group of languages and with

regard to their racial affiliation, they have been described as Indo-Mongoloid, Proto-

Mongoloid, Palco-Mongoloid and so on (Pandey and Tripathy,). The tribes of Arunachal

Pradesh are broadly divided into three categories: (a) the communities which form the

larger cultural traditions such as the Monpas, the Sherdukpens, the Khambas, the

Khampties, the Singpohs, etc; (b) the communities of the southern most parts of the state,

such as the Noctes, the Wanchos and the Tangsas, who show the clear impact of the

neighbouring cultures; and (c) all other tribes of Arunachal Pradesh who have close

cultural and linguistic affinities amongst themselves. The people have migrated in this

territory in an unknown past rather from the established theories of Origin and Migration;

it is revealed that the people have migrated in this area in search of agricultural land. The

art of cultivation was known to them and owing to a vast land area; they started

practicing shifting cultivation or jhum. The tribesmen all over the state produced their

bare needs in the jhum tillage; neither had they produced any marketable surplus nor did

they buy anything from the market. Moreover, in absence of any modern administration,

the tribesmen developed their own societies as per their own customs, rituals and taboos.

A sort of Village States were formed throughout the territory. Every village had their own

Government, own territory and own administration. The Gambura led the society on basis

of the Kebang decision. Although primitive, they led a peaceful life over the generations.

In the purely barter form of economy, people exchanged their needs mostly as an intra-

tribe and sometimes intertribes basis. There was no circulation of money nor there existed

any market mechanism. The tradition went on until the Government of India after

independence created the North East. Frontier Agency with effect from early 1950’s; the

Nehruvian principle of tribal development in the territory was adopted since then. Along

with the national mainstream, the territory also received handsome allocation to start the

development process.

Following the Nehru-Elwin theory, the territory takes-off its journey by disposing the

sum in road construction, school building construction and infrastructure development

programs, by importing the entire technological know-how from outside the territory.

Therefore, the lion part went off from the state in terms of salary and cost of inputs.

However, a few hands of the territory itself received a considerable amount, which were

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influential to the extent of educational qualification, social status (village headmen etc.)

and political likeness. The classless society fragmented into classes. In the following

years, the Chinese Aggression made the planners to feel the development task otherwise.

The territory achieved the Union Territory Status and the first ever General Election was

held in the year 1978. Thereby people’s participation in the development activities started

to take place. The Plan Allocation for the territory raised many-a-fold. The initiation of

modern political system blessed the society with easier money flow from the Union

Government; rather market mechanism did not developed or any noticeable production

started to be accrued. The easy money to a large deal drained away from the state in order

to purchase ostentative needs for some of the people.

B. MATERIALS AND METHOD

The present paper is a broader documentation of obtained field data relating to

production, consumption, investment and other economic activities performed at the

household level at the cross-sections of the study area, selected randomly keeping various

diversities in mind. Data gathered from the field have again been checked with very

sparsely available. Government level publications and other related references. Filtered

data have been analyzed statistically for accruing the result discussed henceforth. For the

sake of an extensive study, interview was taken from the various age groups of people

with a sample size of 120 covering 24 villages of 8 districts of the state in order to sketch

out their varied perceptions on consumption.

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Table 1. Occupational structure of the sample households

NAME OF THE OCCUPATION NO. OF RESPONDENTS % OF THE RESPONDENTS

Landless agricultural labour 9 7.5

Landless non-agricultural labour 4 3.33

Marginal cultivators 7 5.83

Small cultivators 13 10.83

Medium cultivators 29 24.16

Large cultivators 9 7.5

Business and supply (including Govt.

contractors)

19 15.83

Service 28 23.33

Other (not mentioned) 2 1.66

Total 120 100

Table 2: Family income of the sample households (Rs. /Year)

INCOME LEVEL NO. OF RESPONDENTS % OF THE RESPONDENTS

Less than 25000 11 9.16

25001 – 50000 6 5.00

50001 – 75000 7 5.83

75001 – 100000 6 5.00

100001 – 125000 5 4.16

125001 – 150000 17 14.16

150001 – 175000 19 15.83

175001 – 200000 18 15.00

More than 200000 31 25.83

Total 120 100

Table 3: Distribution of consumption expenditure of the sample households (As

percentage of total income).

EXPENDITURES HEADS EXPENDITURE AS % OF TOTAL INCOME

Food 3%

Clothing 25%

Shelter 1.2%

Education 10%

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Medicine 12%

Cosmetics 16%

Recreation 20%

Farm inputs 4.0%

Total 91.2

C. RESULT AND DISCUSSION

It is found that the traditional tribal society in the study area, Arunachal Pradesh is in

transition from a mere subsistence earner to a surplus producing one. The transition is

however, not obeying any established theory. In the days of market mechanism, the mode

of production has also got a drastic change in respect to the functional relationship of

various inputs involved in the production process as well as in its distributional aspects.

From a mere subsistence level of mode of production, the economy as a whole has been

reorganized for the market. Thus, generation of personal income has achieved priority

among the tribesmen. As revealed from the field investigation (Ref. Table 1), nearly 50%

of the respondents have vertically shifted their profession i.e. from the traditional

agricultural practice to secondary and tertiary sector. The rising literacy level alone is not

the only cause of shifting the choice of profession of the tribesmen in the study area as

found in the field investigation rather this vertical mobility is a spontaneous result of

development of infrastructural setups. Table 2 shows a clear cut distinction of the income

generating groups into high income group and low income group. The virtual absence of

middle income group polarizes the society in the study area. Out of the 120 households, it

is found that a total of 17 households (14.16%) have yearly income less than Rs 50,000,

which is considered as the basic requirement for maintaining livelihood of a five

members’ family at the present market price. Again, amongst this lower income group,

11 households (9.17%) are hardly able to earn their daily requirement from their present

structure of occupation. Interestingly, this group of people comprises mainly the

occupational groups (permanent occupation) of ‘agricultural labour’ and ‘non-agricultural

labour’, whom we found living below the poverty line. However, it is also revealed from

the household level study that the people of this category are engaging themselves in

other subsistence activities like gathering, rearing, and fishing etc. based on the local

forest resources. However, ‘hunting’ is a practice, persisting into the society irrespective

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of any economic group. It is however, to note that the present study has revealed the fact

that at around 90% of the people in the study area are living with middle and high

income, contrary to the general perception that the tribal people are generally backward

and living below the poverty line. Poverty persists there rather in very shadow form.

Apart from their known sources of income, easy money flow into their economy. Field

study reveals a vertical mobility of the occupational structure of tribesmen as well as their

consumption pattern. The tribal society in the study area has shown the tendency of a

steady rise of income level, when the collected field data has been compared with the

available secondary data. Out of the 120 samples, 90 (75%) families were found to have

an annual income of Rs. 100,000 or above; surely belong to the ‘High Middle Class to

Higher Income Group’ categories. Thus, consumption pattern of the tribesmen as found

from the field survey (Table 3) has also been evolved likewise. It is however, to note the

fact that very small amount of the total income (3%), the average households do spend on

food. This is because of the fact that the tribesmen do produce all their the necessary

requirements for food from their farms and merely the items, which could not be

produced in the farm sector, are bought from the market; these include salt, sugar,

mustard oil and so on. Apart from food, they do spend a very trivial amount on their

shelter. Construction of house is not a regular phenomenon for the tribesmen in the study

area. At an average, the local people build their house every 10 years; moreover, the

materials for construction are collected from local forests too. Apart from these, the

required labour is gathered from the community; so that the cost of constructing houses is

nominal as compared to the other components of total expenditure. Education is now an

emerging phenomenon among the of tribals. The average tribal family spends a

considerable portion of the total income on education of their wards in the form of

school/ college tuition fees, hostel fees, cost of dresses and educational stationeries,

tuition fees for the private tutors, etc. As it is revealed from the field survey that the

wards of a bit well-to-do families are accommodated in the school hostels in the far flung

urban centres and because of lesser density of higher educational institutions, the students

have to stay in the hostels and other self-arranged rental houses during their study in

colleges and institution of higher studies. As we found from the sample universe, an

average of 10% of the total income is spent for education. Another noteworthy

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component of the total expenditure was the 12% expenditure of their total income on

medicine and other health related problems – a very much uncommon phenomenon so far

in the study area. It was even some decades ago, that the local miris (village medicine

man) had taken care of the physiological problems by means of traditional system of

medicine, which radically disappeared because of the active presence of modern form of

allopathic medicine and Medicare. Although the rugged topographical features retard the

adequate growth of infrastructural facilities in the study area, the people of remote

villages still prefer to go to the health centres of modern medicine and sometime they do

prefer to be present in the luxurious nursing homes located outside the state. Thus,

expenditure on medicine has risen considerably in the study area. Expenditure on

cosmetics and recreation are other new dimensions of the tribal livelihood as it is found

from the field study that the younger generation uses imported cosmetics of high price.

And the expenditure on recreation has been raised rapidly in the form of television and

other electronic media of entertainment; although living in the remote villages, the

facilities have an active presence in the study area. Since the field survey was conducted

among the villagers, who are basically attached to the agricultural activities directly or

indirectly, they do have an expenditure in the form of purchasing farm input; although

very insignificant (4%). The medium and large cultivators are investing a considerable

amount of their total income to purchase modernized farm inputs such as fertilizer,

insecticides, pesticides, fungicides, hybrid seeds and sometime they do employ

mechanized farm equipments like tractor, power tiller, sprayer etc. hired from the

Department of Agriculture and other organizations. From the analysis of the distribution

of consumption expenditure (Table 3) it is revealed that the high percentage of

consumption expenditure (91.2%) of the sample households implies their marginal

propensity to save (MPS) is automatically low. This may be the reason that the tribal

communities in the study area have taken the first generation test of liquid money that too

in the era of globalization and consumerization. (Roy Mukherjee)

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CHAPTER 8: CONCLUSION

The detailed study of consumerism has illuminated that consumerism is caused due to

variety of factors that directly, indirectly, emotionally, logically appeal the consumer to

buy goods, convert luxuries to necessities due to which this causes spending from the

user side. With increase in incomes, easily available loans, credits, and plastic money, it

is possible to continue buying.

However it is for the suppliers to continue unrestricted supply of goods. If that is made

possible then the country is definitely heading for an economic boom, with the consumer

playing an important part in the country’s economy. However if the demand-supply chain

is not smooth in its running then it would result in rise in prices and inflation and this can

ruin the country.

Also, proper care has to be taken from the producer and consumer side to not let the side

effects of consumerism harm them and their family lives to such a depth that they

become completely indifferent of emotional values, bonds and relationships. We are

living in a materialistic world, and consumerism is further adding fuel to the fire. Let us

live a happy and be satisfied with we already possess than going out of our bank balance

limit to buy goods which are not even of the minimal importance to us.

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CHAPTER 9: REFERENCES

1. Romeo S. Mascarenhas; Special Study in Marketing; Vipul prakashan; Page no.

08-09, 11.38

2. R. D. Winsor, Loyola; Social Responsibility, Consumerism, and the Marketing

Concept; Marymount University.

3. Ecommercetimes.com: http://www.ecommercetimes.com/story/48956. Retrieved

2009-04-20.

4. Julia Hailes; Green Consumer Guide; International Symposium on Consumption

and the Environment; 1998.

5. S. (Roy) Mukherjee, N. Ali and B. Ghosh; Consumerism in Tribal India: A Case

Study from Arunachal Pradesh.

6. V Partha Sarthy; Marketing to children

7. http://www.consumerpsychologist.com/intro_Consumer_Behavior.html Retrieved

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