Economics Project

KENDRIYA VIDYALAYA NO.2, CRPF CAMPUS, BHUBANESWAR “A PROJECT REPORT ON CONSUMER AWARENESS” Prepared by: Bamdev Baghar PGT(Economics)

CONTENTS Page No.

1. Introduction

1-2

1.1. Rise of consumer awareness 1.2. Objectives of the Study 1.3. Meaning of consumer awareness 1.4. Forms of consumer Exploitations 1.5. Factors causing exploitation of the consumers

2. Rights and Duties of the Consumers

3-3

2.1. Rights of the Consumers 2.2. Duties of the Consumers

3. Consumer Protection Act of 1986 and Case studies

6-6

4.1. Consumer Protection Act 1986 4.2. Case Studies

4. Data Base and Methodology

7-8

5.1. Collection of Data 5.2. Sampling Technique used 5.3. Statistical Tools used 5.4. Limitations of the Study

5. Analysis and Interpretation of Data

9-14

6.1. Socio-economic Profile of the households 6.2. Consumer Awareness of the People

6. Summary and Conclusion BIBLIOGRAPHY

15-15

APPENDIX

1. INTRODUCTION 1.1.

Rise of Consumer Awareness

In the globalization, liberalization and privatization era, most of the economic decisions are taken by the market. Though, the government has withdrawn itself from many economic activities, it interferes very often when the market mechanism fails due to structural rigidities in the economy and other factors, to provide goods and services to the people. Consumption is one of the important economic activities, which requires regular government intervention, as market is unable to promote security and welfare aspects of the consumers. On the other hand, consumers has to be aware not only of the commercial aspects of sale and purchase of goods but also of the health and security aspect also. Besides this, they should be aware of their rights and duties being as rational human beings. Though, the first consumer movement began in England after the Second World War, a modern declaration about the consumer’s rights was first made in USA in the year 1962, where four basic consumer rights i.e. choice, information, safety and right to be heard were recognized. Ralph Nadar, a consumer activist is considered as the father of “Consumer Movement”. 15th March is now celebrated as the World Consumer Rights Day. The U.N.O. also adopted in the year 1985, certain guidelines to achieve the objectives of maintaining protection for consumers and to establish high level ethical conduct for those engaged in production and distribution of goods and services. In India, 24th December is celebrated as “Consumer’s Day” every year.

1.2. Objectives of the Study The Study based on following objectives: a) To study the level of consumer awareness of the consumers in the study area b) To make the students habituated about the survey work c) To make the students acquainted how different statistical tools can be applied in different socio-economic problems. 1.3.

Meaning of Consumer Awareness

Consumer awareness means awareness of consumers in different aspects of consumption activities. Consumer awareness is a broader and wider concept. It covers the followings: a) Consumer awareness about Maximum Retail Price (MRP).

b) Consumer awareness about Fair Price Shop. c) Consumer awareness about price, quality and expiry date of the product. d) Consumer awareness about their rights and duties. e) Consumer awareness about the certified products like ISI, Agmark, ISO-2000 etc.

1.4. Forms of Consumer Exploitation Consumer exploitation is a type of exploitation in which the consumers are exploited or cheated by the business community in terms of poor quality of product, underweight, under-measurement, duplicate articles etc.

2. Some of the common ways by which the consumers are exploited by the business community are as Follows: a) Underweight and under-measurement b) Sub-standard quality c) High prices d) Duplicate articles e) Adulteration and impurity f) Lack of safety devices g) Artificial scarcity h) False and incomplete information i) Unsatisfactory after sale services j) Rough behaviour

1.5. Factors causing exploitation of the Consumers The following are the factors that cause exploitation of consumers: a) Limited information b) Limited supply c) Limited competition

d) Low literacy

RIGHTS AND DUTIES OF THE CONSUMERS 2.1.

Rights of the Consumers

The following are the rights of the consumers as coded in the Indian laws, which the business community has to keep in mind: a) b) c) d) e) f)

Right to safety Right to choose Right to seek redressal Right to consumer education Right to be heard Right to be informed.

3. 2.2.

Duties of the Consumers In order to secure rights, the consumers have to fulfill the following duties: a) While purchasing goods, consumers should look at the quality of the products as well as on the warranty of the product. b) They should ask for Cash Memo for the item purchased. c) They should form consumer awareness organizations. d) They must complain for their genuine grievances. e) The must know their rights and duties.

4. CONSUMER PROTECTION ACT OF 1986 AND CASE STUDIES 4.1. Consumer Protection Act of 1986 The industrial revolution and the development in the international trade and commerce has led to the vast expansion of business and trade, as a result of which variety of consumer goods have appeared in the market to cater the needs of the consumers and a host of services have been made available to the consumers like insurance, transport etc. The advertisement of goods and services in T.V and other media influence the demand of same by the consumers, though there may be manufacturing defects or shortcomings in quality and purity of products or deficiency in services rendered. In spite of various provisions made providing protection to the consumers against adulterated and sub-standard articles in different enactments like Code of Civil Procedure, 1908, MRTP ACT, 1969, IPC, 1960 etc., very little

could be achieved in the field of consumer protection. In order to provide for the better protection of the interest of the consumers, Consumer Protection Bill 1986 was introduced in Lok Sabha in 5th December 1986. The Bill was passed by both Houses of Parliament and got the assent of the President on 24 December 1986, popularly known as the Consumer Protection Act of 1986. The Act of 1986, seeks to provide better protection to the interests of the consumers and for the purpose that there is Consumer Councils and other authorities for the settlement of consumer disputes and for matter connected therewith. To provide quick redressal of consumer disputes, a quasijudicial institution is set up at all the three levels. These bodies have been empowered to give relief of a specific nature and to award, wherever appropriate, compensation to the consumers. Penalties of noncompliance of the orders given by the quasi-judicial bodies have also been provided. 4.2.

Case Studies 1. Mr. S.L.Pati VS. Postmaster, Baligarh, Orissa(1993)

Money order not delivered in time to the concerned person, is a case f deficiency in service of worst category. If this would be the normal act of the Post Office and the office, which belong to the Union Government, no one would have faith in services rendered by them. As a result, an amount of Rs250/- plus the money order amount of Rs.1000/- along with interest @ 18% was the compensation awarded to the deprived person. 2. Mr. K.C. Panda VS SDO,Telecom Department, Berhampur, Orissa(1994) Telephone line was disconnected even if bill was paid. Proceeding before District Forum, Telecom Department made an apology for the mistake occurred inadvertently. But, in spite of apology, an amount of Rs. 2000/- was the compensation awarded to the person concerned by the Telecom Department.

DATA BASE AND METHODOLOGY 5.1.

Collection of Data

The project report is based on primary data collected by the students of Class 11th Commerce, KV No. 2, CRPF, BBSR. Data collected by the investigator for his own purpose, for the first time, from beginning to end is called primary data. According to Wessel, “ Data originally collected for the purpose of the investigator are known as primary data”. When data collected by the others are used by others for their use or investigation then it is known as secondary data.

6. 5.2.

Sampling Technique Used

Total number of households selected for the project is 80. These household has been selected by sampling method. There are two statistical enquiry methods: a) Census Method b) Sampling Method Census method is that method is that method in which data are collected covering every item of the universe or population relating to problem under investigation. Sampling method is that method in which data are collected about samples or a group of items taken from the population. There are different

types of sampling techniques such as: random sampling, quota sampling, stratified sampling, deliberate sampling etc. But for the project concerned deliberate sampling method is used. This is also called judgment sampling. According to this method, for selecting a sample no specific procedure is used, rather the investigator, according to his own desire selects those households which represent the universe fully.

5.3. Statistical Tools Used For analysis of data simple percentage method and arithmetic average is used.

Percentage:

Gt-Gt-1 Percentage increase/decrease=

_________

X 100

Gt-1 Gt= Value of the Variable in time period t Gt-1= Value of the Variable in time period t-1

Arithmetic Average(Mean): Sum of all the values of different items in the series Arithmetic Mean= ____________________________________________ Total number of items =

X1+ X2+………………………+Xn _____________________________ N

n

=

Xi

i = 1, 2, 3………….n

i=1 Besides mean and percentage, different types of diagrams like bar diagram, pie-diagram etc. has been used to represent data in a simple and systematic manner.

7. Pie Diagram: Pie diagram is a circle divided into various segments showing the values of a series. Degree measure of an item= % value of an item X 3.60

5.3.

Limitations of the Study

The study is based on primary data, collected by the Students 11th Commerce, K.V.No.2, CRPF, Campus ,BBSR. Each Student of the Class interviewed two consumers, one representing

his/her father/mother and the other representing his neighbor. The study area of the project is limited to Bhubaneswar city only. The sample size of the project is 80 only. So, the sample of the project is very small. Since the study is limited to Bhubaneswar city only, all the respondents are of urban background.

ANALYSIS AND INTER PRETATION OF DATA Socio-economic conditions of the Households a) Tabular presentation of Data Total number of households surveyed for the purpose is 80. Each student of 11th Commerce conducted survey work. Each student interviewed to the head of the family relating to different aspects of consumer awareness mentioned in the questionnaire. Table No. 1 represents total family members of the surveyed households. Table No.2 represents the occupational status of the head of the household. Table No.3 represents educational qualifications of the head of the household. Table No.4 represents educational status of total households surveyed. Table No.5 represents income level of surveyed households. Total family members of the surveyed households are 420, out of which 220 are female and 200 are male. The average family size of the household 5.35. Total number of persons interviewed is 80, out of which 68 belong to service class. Out of these 68 families, 3 female members are interviewed for the purpose as male members are staying outside the station. Two families are from big business class whereas 10 are from small business family out of 12 business family interviewed. Out of total 80 of the families interviewed 55 are highly qualified. They are Graduate, Post Graduate and even some posses Professional and Technical qualifications. Out of total, 23 are at Primary and Secondary level, whereas 2 are illiterate. Out total family members 190 are Graduate, Post Graduate, and Professionally and Technically qualified. Again, 170 members are at Primary and Secondary or Higher Secondary level, whereas 10 are illiterates. Rest 20 belong to below 5 years and hence are not mentioned in the educational status. Table No. 5 represents the distribution of income levels of surveyed households. Out of total 80 families 10, 60, 10 belong to low income, medium income and high income group respectively.

8. Table No. 1 Sex-wise Family Members of the Households Sex(M/F) Male Female Total

Family Members 200 220 420

Average family Size 2.5 2.75 5.25

Table No.2 Occupational Status of the Head of Households

Occupation Services Big Business Small Business Total

No. of Households 68 02 10 80

Percentage(%) 85 2.5 12.5 100

Table No. 3 Educational Level of Head of families Qualification Illiterate Primary Secondary Tertiary Total

No. of Households 02 13 10 55 80

Percentage(%) 2.5 16.25 12.5 68.75 100

Table No.4 Educational Status of Family Members Qualifications Illiterate Primary Secondary Tertiary Total

No. of Persons 10 30 170 190 400

Percentage(%) 2.5 7.5 42.5 47.5 100

Table No.5 Income Level of the Households Income level Below 5000(Low) 5000-20000(Medium) 20000-and above(High) Total

No. of Households 10 60 10 80

Percentage(%) 12.5 75 12.5 100

9. b) Diagrammatic Presentation of Data Different type of diagrams are used to represent the data. Diagram No. 1, a Bar Diagram represents sex-wise family members of the households. Diagram No.2, a Pie Chart represents occupational structure of the head of the households. Diagram No.3 and 4 are the Pie Charts represents income level of head of households and educational status of head of households respectively. Diagram No.5 and 6 are the Bar diagrams represents educational status of whole family and income level of head of households. Diagram No.1 Sex-wise Family Members

Diagram No.2 Occupation Structure

Diagram No.3 Income Level of Head of Households

Diagram No. 4 Educational Status of Head of Households

10. Table No.5 Educational status whole family

Table No.6 Income of head of Households

6.2. Consumer Awareness of the Households a) Tabular Presentation of Data Table No. 6 represents the preferred use of soaps, Table No. 7 represents the influence of different agencies on families while purchasing different brand of soaps used by the surveyed households and Table No.8 represents different aspects of consumer awareness in day to day life of the surveyed households.

Table No.6 Preferred use of Soaps Brand Lux Dettol Pears Lifebuoy Others Total

Sources TV Newspaper Magazine Others

No. of Households 30 22 12 06 08 80 Table No.7 Source of influence on the Purchase of different No. of Households 56 06 10 08

Percentage(%) 37.5 27.5 15 7.5 10 100

Brand of Soaps Percentage(%) 70 7.5 12.5 10

Total

80

100

11. Table No. 8 Different aspects of Consumer Awareness Yes No 65(81.25%) 15

Consumer Awareness Knowledge about Certified Products Check MRP, Expiry and 68(85%) 08 Manufacturing date Knowledge about Fair Price Shop 60(75%) 20 Check ingredients used 35(43.75%) 45 Knowledge about Consumer Courts 77(96.25%) 03 Ever gone to Consumer Court 10(12.5%) 70 Insist cash Memo for Consumable 57(71.25%) 23 goods purchased From table No.6, it is evident that highest percentage of families i.e. 37.5% prefer Lux followed by Dettol with 27.5%. Income and occupation factor did not influence the purchase or consumption of soap of Lux or Dettol. However, in case of lower income group, out of 10, 6 families use either Pears or Lifebuoy and they prefer to it as its cost less than other brand of toothpastes. On the other hand, quality of product is important for high and medium income group, using Lux and Dettol. Besides, quality of product and price, choice of children also taken into account while using the Dettol or Lux for about 20% of the households. Majority people come to know about the product through advertisement on TV, followed by magazine, newspaper and other agencies as evident from Table No.7. Table No.8 depicts different aspects of consumer awareness i.e. about standardization, MRP, date of manufacturing and expiry, knowledge about Consumer Courts, rights and duties of the consumers etc. Out of total families, 81.25% of families check MRP, date of manufacturing and expiry. However, 56.25% of people interviewed, check the ingredients used in the product. As far as Consumer Court is concerned, majority of them (96.25%) have knowledge about it but only 10 out of total respondents have gone to the Consumer Court to redress their problems on different occasions.. Lastly, it is clear from Table No. 8 that majority of households(71.25%) surveyed, insist for Cash Memo at the time of purchase. However, it is limited to non-consumable durable items and some consumable items when large quantity is purchased. b) Diagrammatic Presentation of Data Use of different brand of soap used by the surveyed households depicted in Diagram No.7 and source of influence on the purchase of different brand of soap is depicted in Diagram No.8. in the form of a Pie-Chart. Diagram No. 7 Diagram No.8 Use of different Brand of Soap Source of influence on different B rand of Soap

12. SUMMARY AND CONCLUSION 6.

Summary and Conclusion

The objective of this project is to assess the people of different class in the society about different aspects of consumer awareness viz., price and quality of products used by them, about Fair Price Shop, standardization of products, about Consumer Forum, about their Rights and Duties etc. Consumers will lead a happy, healthy and prosper life if they fully aware about the above mentioned aspects. For the project report, total number head of households interviewed is 80 and all belong to urban area. Out of total head of family interviewed, 78 are literate whereas only 2 are illiterate. All belong to different income group i.e. high, medium and low income group. However, majority of them belong to medium income group(75%). Again, on the basis of occupation, 85% of respondents are government servants whereas other are businessmen. Lux is the most preferred brand(37.5%) of soap followed by Dettol(27.5%) among the surveyed households. Households from medium and high income group prefer respective brand of soap taking into account the quality of the product and wishes of their children also. On the other hand, for the low income group, the most important factor that determines the use of soap is the price of the product. Again, majority of respondent(70%) are influenced by the advertisement about the product and the important media is Television. As far as consumer awareness is concerned, majority of respondents have knowledge about certified products, check MRP, date of manufacturing and expiry at the time of purchase. However majority of them do not check about the ingredients used in the product. On the other hand, majority of them have the knowledge of Consumer Courts, but out of total respondents only 10 have ever gone to the Consumer Courts for complaining about different commodities they purchased and consumed. Lastly, it is evident from the study that, majority of them insist for Cash Memo at the time of purchase, but, it is limited to consumer durable goods and for consumer non-durable goods when large quantities of goods is purchased. To conclude, people are concerned about different aspects of consumer awareness i.e. their rights and duties, certified products, MRP, date of manufacturing and expiry of the products they used, Consumer Courts etc as far as urban area is concerned. Educational implications of the study is that every students as well as parents should be aware about different aspects of different commodities they consume in day-to-day life. They should have knowledge about certified products, Check MRP, date of manufacturing, and expiry at the time of purchase of a commodity. They must have awareness about their rights and duties.

BIBILIOGRAPHY Bibliography

1. Prof. S.P. Gupta, “Statistical Methods”, S.Chand and Company Ltd, 1994, New Delhi. 2. S.Mishra and V.K.Puri, “Indian Economy”, Himalaya Publishing House, Mumbai,2000

13. 4. Ruddar Dutt and K.P.M. Sundharam, “Indian Economy”, S. Chand and Company Ltd., 1994. 5. Statistics for Economics, Textbook for Class XI, NCERT, New Delhi, 2005. 6. Indian Economic Development, Textbook for Class XI, NCERT, New Delhi,2005. 7. The Consumer Protection Act 1986, the Law House, New Delhi. 8. Contemporary India, A Social Science Textbook for Class X, NCERT, New Delhi,2003. 9. Economic Survey, Directorate of Economics and Statistics, Planning and Co-ordination Department, Government of Orissa, 2006-07.

APPENDIX A. Questionnaire 1. Name of the head of family:__________________________ Education:________ Occupation:_______ Age:_________ Sex(M/F):_______ 2. Residential Address:_____________________________________________ _____________________________________________ 3. Age (In years)

No. of Persons ________________________ Male Female Total ________________________________________________________  Below 5  5-14  15-64  65 and above _________________________________________________________ Total: 4. Level of Education No. Of Persons ________________________________________________________ Illiterate Primary Secondary Graduation Others __________________________________________________________ Total 5. Monthly Income ( In Rs/-) _________________________________________________________

Up to 1000 1000-5000 5000-20000 20000-50000 50000 and above __________________________________________________________

14. 6. What do you use to clean your teeth ? Toothpaste_____ Tooth Powder_____ Any Other______ 7. Which brand of toothpaste do you use regularly ? Aquafresh___ Cibaka____ Anchor_______ Close-up____Promise_____Pepsodent_____ Oral B_____ Furhans_____Any Other____ 8. The price for 100 gram pack of the toothpaste (used by them). Price_______(actual) Price________(approx.) Do not know______. 9. Do you find the product costly? 10. Do you check MRP, date of manufacturing and date of expiry? 11. Do you check standardization of product like ISI, Agmark, ISO 2000 ? 12. Do you check ingredients used in the product ? 13. Are you satisfied with the quality of the product ? 14. Are you aware about the Fair Price Shop ? 15. Do you find the availability of product at FPS ? 16. Do you complain the shopkeeper in case of dissatisfaction ? 17. Has your complain been timely attended ? 18. Was your complain attended to your satisfaction ? 19. Are you aware about Consumer Courts ? 20. Have you ever gone to a Consumer Court in case of any dissatisfaction ? 21. Do you insist Cash Memo at the time of purchase to ensure genuine purchase and tax revenue to government ? 22. Do you insist Cash Memo for other commodities at the time of purchase ? 23. How do you come to know about the product ? Advertisement Family influenced _______________________________________________ TV _______ Newspaper _______ Magazine _______ Cinema _______ Sales Representatives _______ Exhibits Stall _______ Radio ________ Any other ________ _____________________________________________________ 24. Are you attracted by promotional offers like rebates, free toothbrush, buy one get one free ? 25. Do the Children influence purchase of particular toothpaste ? 26. If a new toothpaste brand is launched in the market will you buy it ? If yes, then what consideration ?

Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No Yes/No

Yes/No Yes/No Yes/No

Price of the Product________ Promotional offer_______

Quality of the product______ Any Other______

---------------------------------------------------------*----------------------------------------------------------------------Mr. Bamdev Baghar, PGT(Economics)