Consumer Protection

Consumer Protection:

Introduction: In modern marketing, consumer is considered as the king and success of business depends upon the satisfaction of consumer. But in reality, the consumers are exploited and cheated by producers due to the following facts:

·         Producers are organised and have huge resources at their disposal. They intend to earn maximum profit in the shortest possible ways.

·         Consumers are ignorant, illiterate or semi literate and lack unity among them.

·         Consumers can be exploited in many ways like misleading advertisement, unsafe products, underweighing, overcharging, fake discounts, hoarding, black marketing, creating monopolies, restricting output, spreading false rumours, etc

Hence, consumers should be protected from such illegal trade practices of producers and traders.

Need for consumer protection:

Consumers need to be protected on account of the following reasons:

1.      Consumer is the purpose of business: Success and survival of business depends upon the satisfaction and faith of the consumer in the products and services provided by business. Hence business must provide quality goods at reasonable price.

2.      Growth with social justice: We are a secular country and growth with social justice is the cornerstone of our economic philosophy. Exploitation of consumers is against the directive principles of State Policy laid down in our Indian Constitution.

3.      Multiple objectives:  Business works for all stakeholders – consumers, shareholders, employees, government, and the public. Therefore it cannot just make profit by ignoring the interest of the all of these stakeholders. For the survival and growth of business it must work for the interest of the stakeholders in general and consumers in particular.

4.      Self interest:

·         Due to liberalization and globalization, firms have to compete with multinationals. Unless they become customer oriented and provide right quality, quantity and price they cannot satisfy a customer and without customer satisfaction no business can survive for long and will be out beaten by competition from multinationals.

·         Moreover, Government has enacted laws to protect the interest of the consumers. Hence if a firm violates the laws they are likely to lose their goodwill and clients permanently.

5.      Ethical obligations:  Firms that adapt ethical values, attain good reputation in the business world. Business without ethical values is nothing but a criminal activity and no civil society will tolerate a business without ethical values for long.

6.      Power Centre: Business has considerable influence over the society and Government. It creates and change the food habits, fashion and life styles of people. Therefore, it must show responsibility to use its power in such a way that the interest of the society and the consumers are not damaged.

Rights of Consumers : learn from book

Explain any six ways and means of consumer protection followed in India –

The following are some of the ways and means of consumer protection followed in India:

1.      Lok Adalats: 

·         The Consumer can approach the Adalat with his grievance. The issue is discussed and decision is taken on the spot. This saves time and money

·         Lok Adalat has become a speedy, effective and economical redressal system.

·         Indian Railways, Delhi Transport Corp, Delhi Development Authority, Delhi Vidhyut Board, etc hold Lok Adalat from time to time to sort out problems faced by users.

2.      Publicity Measures: 

·         the Government uses various channels like Radio, Doordarshan to spread awareness through short messages, films and doucmentaries.

·         15th March is celebrated as World Consumer Right Day all over the world ever year.

·         In 1995 this day was organized at Vigyan Bhawan, New Delhi.

·         In addition, the Ministry with the help of DAVP undertook a massive outdoor publicity program such as displaying hoardings, banners, bus panels, etc.

3.      Public Interest Litigation: (Under what circumstances can a public interest litigation be filed?

The Indian legal system does not provide legal services to large segments of the population such as the poor, environmentalists, consumers, minorities, etc. Thus the Public Interest Litigation legally represents such groups with the result that any individual or organization can approach the court for remedial action for effective implementation of the law, environmental protection or any other social evils like bonded labour, etc.

4.      Environmentally Friendly Products:

·         The Ministry of Environment and Forests has introduced an “Eco-Mark” scheme. It is a label that has a symbol of an earthen pitcher. If this label appears on a product, it means that the manufacturer has satisfied the conditions laid down regarding the production processes and used environmental friendly materials.

·         This scheme has been started with consumer items like soap, detergents, paints, food items, edible oil, etc.

·         This scheme is consumer oriented so that people manufacture, use and dispose off products which are least harmful to the environment.

5.      Redressal Forums & Consumer Protection Councils:

Under the Consumer Protection Act 1986 a judicial machinery such as the District Forums, State and National Commissions have been set up to provide speedy, effective and economical redressal of consumer grievances and disputes.

6.      National Youth Award on consumer protection:

To encourage consumers and youths to participate in the field of consumer protection, every year the Union Ministry gives two national awards – National Award on Consumer Protection and National Youth Award on Consumer Protection. The Ministry also gives a National Woman Award to involve women in outstanding work in the field of consumer protection.

7.      Consumer Welfare Fund :

The Revenue Department of the Union Ministry of Finance has passed the Central excise and Customs laws (Amendment) Act 1991. According to this Act, a consumer welfare fund is created and the excess amount of excise/custom duties which is not refundable to manufacturers or importers is credited into this fund and used for:

·Promoting the welfare of the consumers.

·Community based rural awareness projects

·Setting up a consumer guidance bureau to handle complaints, counseling and guidance

Setting up consumer product testing laboratories

The following topics are also required to learnt:

1.      Consumer Protection Act, 1986 – Meaning and remedies available under the Act

2.      Salient Features of the Consumer Protection Act

3.      Who is a Consumer?

4.      Who is not a Consumer?

5.      Who can file a complaint?

6.      Provision of Redressal Procedure Under the Consumer Protection Act:

You may learn the following three level of consumer protection from the book from the book, however, just for the sake of convenience, the following is the comparative statement

	District forum	State Commission	National Commission
Set up by	Established by the State Government	Set up by the State Government	Set up by the central Government
Constitution	Consists of one chairman and two members appointed by the State Government	Consists of One President, who is or has been the judge of the High Court and two members, appointed by the state Govt.	Consist of a President, who is currently the judge of supreme court and four other members appointed by the Central govt.
Value of Complaints	Can receive complaints where the value of goods and services or the amount of compensation claimed is less than Rs. 20 lakhs	>Can receive complaints where the value of goods and services or the amount of compensation claimed is more than Rs. 20 lakhs but less than 100 lakhs	>Can receive complaints where the value of goods and services or the amount of compensation claimed is more than 100 lakhs
Appeal		>The appeals against the order of any District Forms can also be filed before the state commission	>The appeals against the order of any of the state commission can also be filed before the National commission.
Who can file complaint	The consumer himself or any recognised consumer association.	The consumer himself or any recognised consumer association.	The consumer himself or any recognised consumer association.
Procedure for redressal	On receiving the complaint, the District Forum shall refer the complaint to the opposite party- seller, producer or the any organisation. The sample of goods are sent for testing in laboratory.	On receiving the complaint, or the appeal , the State Commission shall refer the complaint to the opposite party- seller, producer or the any organisation. The sample of goods are sent for testing in laboratory.	On receiving the complaint, or the appeal , the State Commission shall refer the complaint to the opposite party- seller, producer or the any organisation. The sample of goods are sent for testing in laboratory.
Action	The District Forum after being satisfied that the goods are defective or there is some unfair trade practice, can issue an order to the opposite party directing him to either resolve the defect or replace the goods, or return the price paid or pay compensation to the consumer for loss or injury etc.	The State Commission after being satisfied that the goods are defective or there is some unfair trade practice, can issue an order to the opposite party directing him to either resolve the defect or replace the goods, or return the price paid or pay compensation to the consumer for loss or injury etc.	The National Commission after being satisfied that the goods are defective or there is some unfair trade practice, can issue an order to the opposite party directing him to either resolve the defect or replace the goods, or return the price paid or pay compensation to the consumer for loss or injury etc.

           

Chapter 8- Planning

Forms of Plans

Types of Plans:

Plan is a document that outlines what is to be done to achieve the desired goals. It is a specific action proposed that helps the organisation achieve its objectives. Managers prepare and use various types of plans which can broadly be divided into two categories:

A.      Single Use Plans:  Single use plans are one time use plans. These are made to achiever a particular goal or for a specific period of time. After the lapse of the time or the performance of the activity, these plans are prepared again for the next activity or time. Example of single use plans are Budgets, programmes etc.

B.       Standing Plans: These plans are used repeatedly in similarly use and provide guidelines to managers. Such plans are used over a long period of time. Examples – objectives, Policies, Procedures, Rules, Methods etc.

Objectives Strategies Policies Procedures Rules Programmes  Methods Budgets

   Based on the above, various plans can be arranged in a hierarchy as follows:

These sub-plans can be elaborated as follows:

1.      Objectives :

“Objective is the end which an organisation seeks to achieve by its operations”

The process of planning begins with the setting of objectives. These may be defined as the purpose or the aims which and organisation wants to achieve over different period of time. These serve as a guide for overall business planning. A business enterprise may have multiple objectives such as Survival, Profits expansion, Growth, Improvement is service to customers etc. The multiplicity of objectives creates the problem of fixing priority between objectives. However, the priority may change over time. For example, for a new enterprise, Survival is more important than growth.

   Objectives can be for short term as well for long term.

Objectives are also planned both for the organisation as whole as for each department/branch of the enterprise.

Objectives are also set for each level of the organisation.  Lower level objectives are derived from the immediate next higher level objectives. And achievement of objectives at the lower level helps in achieving objectives of set at the higher level.

Essentials of Good objectives:

    i.            Objectives must be Clear and specific .

  ii.            Objectives should be measureable i.e. stated in quantity terms.

iii.            They should be time bound.

 iv.            Objectives should be challenging but achievable.

   v.            Objectives in different areas must be supportive to one another.

 vi.            Objectives should be acceptable to people.

2.     Strategy :  A strategy is a comprehensive plan to achieve the organisational objectives. It is a blueprint of an organisational desired destination, direction and path to follow. It is a comprehensive plan for achieving organisational objectives. This comprehensive plan will include three dimensions:

a.     Determining long term objectives.

b.    Adopting particular course of action, and

c.     Allocating resources necessary to achieve the objectives.

Whenever a strategy is formulated, the business environment needs to be taken into consideration. The changes in the economic, political, social, legal and technological environment will affect an organisation strategy. Strategic decisions will include decisions like whether to introduce a new product or not. If to introduce new product, who are the target customers, whether to make changes in the existing products, what is likely demand for the product.

Therefore a strategy guides the management to find answer to questions like “where is the organisation now and where does it want to be in future? What is a must to do things to reach the desired position?”

Main features of strategy are :

·        These are generally formulated by top levels of management.

·        Strategy is generally long term in nature.

·        It is action oriented and more specific.

·        It is formulated through SWOT analysis.

·        It is to ensure optimum use of key resources of the organisation in the best possible manner.

3.     Policies

“ A policy is a general statement that guides decision making”

Policies define the boundaries within which decisions can be made. Policies guide the thinking of the executives so that they are not affected by their personal values, bias or preferences. For example, McDonald’s policy is not grant franchise to an individual who already has food restaurant. Policies provide direction and help in decision and help in implementation of strategies.. For example, the company may have a recruitment policy, pricing policy etc. within which decisions can be made. And details of recruitment policy may include – policy of hiring only trained engineers, preference to local people in employment, practice of promoting people from within, preference to the relatives of employees while recruiting new staff etc. Pricing policy may state- setting competitive prices, no credit sales, etc.

   Therefore, policies are general statements of understanding which guide or channelize thinking in decision making of subordinates

On the basis of above description, the following are the features of Policies:-

a)       A policy is a Standing Plan.

b)      Policies provide broad guidelines and set parameters within which a manager may function and thus guide decision making.

c)       Policies exist at all levels of organisation—major company policies, department policies, and minor polices.

d)      Policy is formulated in the context of organisational objectives and strategies. Therefore policies contribute to achievement of objectives.

      Essentials of a good policy:

a.     A sound policy  must state clearly the objectives from which it is derived.

b.    It should be easy to understand. The language used must be simple , clear and precise.

c.     As far as possible, the policy should be in writing.

d.    It must be consistent and flexible enough to be adjusted to suit changing needs and environment of the organisation.

e.     Policies should be just, fair, and equitable ensuring equal treatment to all without discrimination on the basis of religion, race, sex , etc.

Procedure:

A procedure describes the exact manner in which a certain activity is to be performed. It is a chronological sequence of steps to be taken. Procedures are designed to execute policies and achieve objectives. Exmples of procedure are : Procedure for purchase of goods, Procedure for conducting interviews, Procedure for recovery of money form customers etc. Procedure can be used to judge whether the work is to be done in a particular manner and thus serves as  a basis of control. Main features of procedure are:

a)       It establishes sequential steps for performing activities.

b)      Different activities may require different types of procedures.

c)       Procedures are made for each department and may be for each activity. Procedure are also made for each level of management. Procedure guide management for routine jobs. For example, procedure for how meeting of Board of Directors should be conducted ( top level); procedure for recruitment of employees (middle level); procedure for purchase of store materials ( lower level).

d)      In many cases, procedures may cut across the functional line in an organisation. For example, execution of sales orders require involvement of Marketing, Production, and finance departments.

Methods:  “ Method is a standardised way or manner of performing a routine activity, considering its objectives”

For example, there are different methods of valuation of closing stock, or charging depreciation on fixed assets, methods of training etc.

Method is a plan because it provides guidelines to organisational members about which method is to be followed in a given situation. This will ensure uniformity in a action of employees. The comparison of results becomes easy.

Rules :   “ Rule is a specific statement that prescribes what is to be done or not be done”

Rules channelize the behaviour of the employees in the right and acceptable direction. Rules help in maintaining discipline. For example “No Smoking in is allowed in the factory; The office opens at 10.00 a.m. etc.

Main features of rules are:

a)       Rules set the conditions which must be observed in gives situations.

b)      Rules must be followed strictly. Non adherence to rules may result in punishment or fines.

c)       Rules are meant to govern behaviour of members and maintain discipline.

d)      Rules must treat all employees equally and be impersonal in nature.

Budgets:  “ Budget is a statement of expected results expressed in numerical terms”

Budget may be expressed in terms of money or physical units. It may project allocation of resources, costs and achievements/results expected in numerical terms.

Budgets may be prepared for different activities of the business like production budget, sales budget, materials budget, cash budget, capital expenditure budget, etc. Budget is related to both planning and controlling. When we prepare a budget, it is related to planning and when we use it as a tool to measure deviation, it is related to controlling. Therefore, it becomes a tool to measure success and failure of the activity budgeted.

Therefore main features of budget are :

a)       Budget is numeric expression of what is to be done or achieved in a specified period of time.

b)      There may be different types of budgets, each budget covering a particular type of activity.

c)       Budget is prepared for a period of time. When, this period is over, a new budget is prepared for the next period

Programme:  “ A programme is a detailed statement about a project which is a combination of objectives, policies, procedures, methods, rules and resources required to implement any course of action”

In fact, the basic plan is implemented through a programme or a set of many programmes. It is a kind of action plan which include various types of plans like policies, procedures, methods etc. It spells out clearly the steps to be taken, resources to be used, time period within which the task is to be completed, what and how the things to be done. In business, programmes are used in various areas like developing a new product, training programme, advertising programme, expansion programme etc.

Major programme is prepared by the top management and to support the primary programme supportive programmes of different levels are prepared for smooth functioning of the company. A programme serves as a useful guide for day-to-day functioning. It is action based and result oriented. A change in environment may require making change in programme.

Difference between different forms of plans _ learn from Book