1. INTRODUCTION

Rural consumers as a buying class have a recent origin. The commercialization of agriculture, given revolution and development of irrigation facilities are the major factors that are responsible for the development of rural areas. Implementation of various government schemes, establishment of schools and various infrastructure facilities has also helped to improve the standard of living in rural areas. Co-operative credit and farming societies, co-operative banks, regulated markets and insurance as well as trading facilities are the factors that have helped for development of rural areas.

The increase in the size of buying population and changing profile of rural consumer class has resulted into many physical, cultural and economic changes. The concept of sophisticated market is slowly establishing its root in the rural areas. The new class of buyers has a complex of tastes and liking. The rural class is still unfamiliar with rules of market and has limited knowledge about new products.

The rural consumer has a complex situation to face. On one side there is a growing market with new products and services and on the other hand, the information and economic aspects about the market mechanism is still not established.

The rural consumers thus are acquiring a new face and a new profile.

2. THE PSYCHOGRAPHICS

The rural society differs from the urban social classes on many parameters. Some of them are:

LifestyleThe traditional lifestyle dominates the rural consumers; however there is a change

in most of the cases. There is a growing imitation of lifestyle.

PersonalityMale is the dominating representative in rural families with authoritarian value

bases. There is a strong desire to improve and to enhance the standard of living.

OccasionsThe rural society is having a strong festive culture with inclination towards

celebration of religious, social and cultural activities. The frequency of festivity is higher than that of the urban areas.

User StatusThe urban consumers are classified in various categories. The users have a great

diversity due to variations in age, income and education status. There are many traditional consumers who are basically non-users of many modern amenities. There are potential users who with enhanced income shall now buy certain products which change in their socio-economic status.

1

BenefitsThe rural consumers are basically benefit conscious and conception conscious

customers. They have a tendency of avoiding excessive buying, over-consumption and not to spend heavily. This is because of traditional values, low income, less interest towards modern way of living.

Usage RateThe usage rate in rural India is comparatively very low. Rural consumers have a

like to medium usage rate. This is basically due to growth of new, first-time user class. Most of the users still have a skeptical feeling about the new products and services introduced in the rural market.

Loyalty RateThe concept of loyalty rate is still not much established in rural areas. In rural areas,

most of the buyers are first time users. So they do not have any commitment to a particular product. The loyalty rate found here is moderate.

Attitude to productsStill most of the products are in their introduction stage in the rural market. This

created feeling of curiosity, desire and inclination in case of certain products. The attitude varies from hostility to positively which depends on the nature of the product, its utility and positioning in the rural market.

3. RURAL POVERTY

The general estimate of population below poverty line is a good indicator to know the likely size of population with buying power.

self-e

mployed in

agri

cultu

re

self e

mployed in

non- agri

cultu

re

agric

ultural

labour

other lab

our

others all0

102030405060

24.12 27

46.96

29.2418.38

31.48

1993-19941999-2000

Fig 1. Proportion Of Rural Households Below The Poverty Line By Livelihood Categories

2

3.1. HOUSEHOLD SIZE, POPULATION AND INCOME

The overall estimate of population, their share in income group and occupational size can help to know likely pattern of buying behavior and likely share in the giver expenditure pattern of the society.

household population income0

20

40

60

80

100

120

72.6 74.6

55.6

27.4 25.4

44.4

100 100 100

ruralurbanall india

Fig 2. Percentage Distribution Of Households, Population And Income

3.2. OCCUPATIONAL CLASSIFICATION OF RURAL CONSUMERS

This helps to know their level and mode of learning. It can also throw light on how the income is influenced by various occupational pattern and its comparative relationship with other urban and non-urban occupation. It also helps to know the classes that are emerging as new buyers.

cerea

lspulse

s

other food ite

ms

clothing

fuel

cerem

onieshea

lth

educati

on

other non- fo

od items

imputed

rental

value

05

101520253035

21.3

5.2

29.6

10.5

3.7 4.2 2.6 2.6

13.2

7.1 ruralurban

Fig 3. Comparison Of Annual Expenditure Of Rural And Urban

3

3.3. SOCIAL INDICES FOR RURAL INDIA

In order to understand the structure of rural Indian economy, it will be advisable to use certain serial indicators. This helps to know the general state of development and economic level bring of an average rural Indian. It also helps to know the difference between behavioral pattern of urban and rural populace.

3.4. CONSUMPTION PATTERN IN RURAL AREAS

It helps to know the trends of growth. One can estimate how the marketer is changing by standing its consumption pattern.

3.4.1. The rural market

The change in the face of rural India is an indicator of transformation into a new, dynamic and challenge seeker society, and on the other hand it represents a consumption oriented confused society with newly gained economic liberty. It is at this function the rural consumer needs a proper guidance and cautions to protect its interest. Systematic education is the only way to create a civic society with appropriate understanding of its democratic rights. The rural buyers should be given understanding as to how to exercise their rights to choose, seek information and deny a product that they do not need.

9

12

12

8

1011

10

8

11

9

rural percentageanalgesic tablets

batteries

blues

coconut oil

iodised salt

safety razor blades

tea

toilet soaps

washing bars

washing powders

Fig 4. Rural Market Share of Consumption

It is not easy to operate the rural markets in rural areas as there are several problems. Rural marketing is thus a time-consuming affair and requires considerable investments in terms of evolving appropriate strategies with a view to tackle the problems.

4

FACTOR 28 PRODUCTS1989-1990

28 PRODUCTS 1998-1999

ELECTRICAL PRODUCTS 1989-1990

ELECTRICAL PRODUCTS1998-1999

INCOME 30.7 30.3 18.8 22.9ELECTRICITY 34.6 37.3 55.1 56INTERACTION B/W INCOME AND ELECTRICITY

9.7 6.6 15.4 9.9

LIFESTYLE 25 25.8 10.7 11.2

Table 1.Factors Affecting Penetration Of Consumer Durables In Rural Areas

The figures in the above table have been arrived at by estimating comparative sizes of the rural and urban markets and, subsequently, the stock changes that have taken place, which us the market differential. The extent to which a single factor contributes to the gap has been calculated with the assumption that all other factors are equal. Also the factor ‘electricity’ has been used as a substitute for the broader though fuzzier term ‘infrastructure’.

4. REASONS FOR BRANDED PRODUCTS NOT WELL-ESTABLISHED

It is clear from the data that tendency to buy branded product is still not yet well established in rural areas. Some of the reasons are

Branding as a marketing concept is not well established in rural areas. The price difference is a major factor that affects the buying decision The rural buyers are still not having affection for branded products The concept of quality conscious is yet to get familiarized in the rural areas The existing marketing practices in rural areas do not encourage buying of branded

products

4.1. FACTORS DECIDING BUYING DECISIONS

21

12

1111

109

87

6 5

% responses pricequalitygifts/discountscredit facilityadvice of friendssellers suggestionbrand nameguaranteeafter sales serviceadvertisement

Fig 5. Factors deciding buying decisionIt is clear that the most dominating factors affecting the buying decision of rural consumers

are price and quality because they give higher importance to price as a deciding factor. This is

5

basically due to his limited buying capacity, low income category and lack of understanding regarding the quality. The suggestions of retailer also influence the rural people. Availability of credit facility can boost up his buying power.

4.2. PROBLEMS FACED BY RURAL CONSUMERS

The rural buyers often face problems while selecting and buying a product of their choice. These problems throw light on the practical aspects of poor marketing works and real life situation in rural markets.

19

171615

13

11 9

% response

lack of information over pricingforced buying non availability of

substitutenon availability of desiered products

short supply

imitations

Fig 6. Problems Faced By Rural Consumers

The rural consumers are the victims of improper marketing practices and economy of scarcity. They still are living in market dominated by the sellers. The marketing network is not yet well established in the rural areas.

4.3. MARKETING PRACTICES IN THE RURAL AREAS

The rural consumers are presently in the inception stage of marketing. They are not much similar with modern marketing practices and the marketing gimmicks adopted by the sellers. Studies say that the marketers have taken the rural consumers for a ride. In many cases they are at the mercy of the sellers, and depend on the conditions and terms laid down by them. In many cases, the sellers’ opinion turns out to be the final opinion to the buyer due to his superior position or credit facilities offered by him. Want of information and lack of ability to make a comparative analysis before buying a particular product are the major factors that limit the freedom to buy and capacity to decide independently.

4.4. REACTION TO LOSSES AND EXPLOITATION

6

The reaction of consumers to situation of exploitation or loss indicates their agonies and troubles. It often reacts on their quite sufferings and a feeling of helplessness. In many cases, the consumers feel that they are sufferers of a pitiable situation wherein they cannot fight.

4.5. ROLE OF CONSUMER ASSOCCIATIONS

The advent of consumer association and consumer movement is still an urban phenomenon. The consumer movement is still having an urban face and urban background. It is yet to acquire a support from the rural masses.

4.6. COMPLAINTS AGAINST THE TRADER

The concept of asking the compensation or judicial or economic remedy to the losses suffered at the market place is still not well established in the rural markets. Most of the respondents are found quite pathetic, disappointed, disinterested in the process of buying or acquiring a consumer durable. They have lost the desire and zeal due to improper treatment in the market place. The disinterest of consumers to lodge complaints is mainly due to difficulties faced by them.

27

2213

15

9

104

% responseno firm bill is issuedno mention of s. t and registration no. on the billfear of being theatened or harassed by the traderno assured success if complaint is lodgedno warrenty card is issuedwant of proper informa-tion about filing com-plaintsno assistance from consumer association

Fig 7. Difficulties Faced By the Consumers

4.7. INFORMATION ASSISTANCE EXPECTED FROM THE SELLERS/MARKETERS

It is essential that the seller should disclose necessary information and assist the buyers to make a rational choice and correct buying decision. The expectations of the buyers from the marketers are listed here in the order of rank,

Price details Product details

7

Technical aspects Details about quality Warranty clause After sales service Details about marketer or manufacturer

The consumers in the rural are still not much aware of their rights as buyers. They still believe in the prudence of sellers and his advice while buying the product.

4.8. PROBLEMS FACED

Want of sufficient procedure to file a complaint Lack of sufficient knowledge about rights and duties of consumers Unaware about the provisions against injustice, deception Unaware about the place where complaints can be lodged. Absence of information about how to defend the case Not having any acquaintance with the activists

4.9. EXPECTIONS OF RURAL CONSUMERS ON GOVERNMENT

It is the responsibility of the government to protect the consumers The traders should be punished for malpractice Punitive measures can help to safe guard the consumers’ interests The consumers on their own cannot stop the malpractice in the market place The concept of educating the rural consumers about their rights and duties is still not

acceptable to the rural consumers

5. PROBLEMS OF RURAL CONSUMERS IN INDIA

Rural consumers face many problems that influence their buying behavior and purchasing decisions. No consumer can take a buying decision in isolation and he has to take into account the various factors that decide the choices and options.

The rural consumer as a buying entity has limited appropriates and options. In many cases, the rural consumers are targeted, exploited and encouraged to buy the products which they do not need in the true sense. The exploitation is continuous and growing and no scientific or systematic efforts are yet made to measure the quantum of exploitation. No agency has yet made a definite enquiry as to how the rural consumers are being exploited.

Due to the continuous growth of rural market, many marketers are attracted who want to make inroads in this updated and unexplored big market. The marketers use many techniques to lure the buyers to attract their attention. In many cases they are using certain techniques that have a quick impact on the buyer’s psychology. In such cases the buyers cannot rightly comprehend what is offered? How much it is useful? And what are the implications of these offers?

8

Fig 8. Problems of Rural consumers

5.1. MEDIA ATTACK

The rural consumers are now attached by a plethora of media. The continuous increase in the catchments of television network, increasing number of forms of newspapers, and magazines and other forms of media have created a great problems before the rural consumers. The representative consumers are babbled and confused. The consumer is often unable to decide the truthfulness of the particular claim.

The media is considered as a official and truthful claim about a product. The rural masses usually believe whatever printed is true and whatever the T.V. says must be correct and truthful. In such circumstances, exploitation of rural consumers becomes more critical and difficult issue to be tackled.

5.2. LACK OF KNOWLEDGE ABOUT LEGAL SYSTEM

9

Problems of rural consumers

Unaware about product/servic

Information exploitation

Lack of Knowledge about legal system

Media Attack

Lack of definite buying pattern

Ignorance &Illiteracy

Misleading & untruthful claims

Unorganized consumer class

The legal system in India cannot help and protect the illiterate and unaware rural consumers. Most of the rural consumers do not know what are their rights and how effectively they can exercise their rights.

It is often noticed that the rural consumers have a blind faith in the traders and the retailers. This faith is misused by the trader and marketers to sell unscrupulous and take products. In many cases the consumers even are not aware of the legal machinery that works to protect. Furthermore a feeling of helplessness and total dependence on the marketers forces them to accept whatever is being sold without registering their protest.

5.3. LIMITED KNOWLEDGE ABOUT AVAILABILITY OF PRODUCTS AND SERVICES

The lack of sufficient, appropriate and usable knowledge about the availability of various protects works as a major cause of exploitation of rural consumers.

The consumers in rural area usually have following problems in this regard.i) Most of the consumers don’t know about the concept of branding and labeling at a

product.ii) In many cases they even cannot distinguish between a branded and limited product.iii) It is very difficult for a rural consumer to know about the exact M.R.P. of many products.iv) Most of the rural consumers don’t have sufficient knowledge about certain parameters

like quality, usability, and warranty and after sales service of a product.v) A large number of rural consumers do not appropriate knowledge about marketing

practices, rules regarding sale of goods and pricing etc.vi) There are a large number of ‘myths’ in the rural India that dominate the consumer psyche.

5.4. IGNORANCE AND ILLITERACY

A large section of the rural India is still ignorant and illiterate. Most of the rural consumers are still illiterate. The literally rate is very poor. This helps the marketer to exploit the consumers in many ways.

Following are the ways and means adopted to exploit the illiterate consumers.i) Improper branding of ‘dummy’ and imitated products.ii) Naming the substandard products with titles.iii) Using a popular brand name for an a entirely different type of product.iv) Use of pictures and logo in a distorted form to continue and misguide the consumers.v) Telling incorrect, misleading and incomplete information regarding a particular product

or service.vi) Making tall claim or providing misleading information about a particular

product or its utili5.5. MISLEADING AND UNTRUTHFUL CLAIM

10

The rural consumers often are misguided by the marketers taking an undue advantage of their ignorance. In many cases the marketers misinform the consumers about utility of a product. Its advantages make quality, or price. This tempts the consumers to buy the products believing in the claim that cannot be adjudged are valid.

Untruthful claims:Some examples are

i) Made in USAii) Imported from Japan.iii) Export quality goodsiv) By using the latest French Technologyv) Foreign goods at unbelievably low price.

5.6. UNORGANISED CONSUMER CLASS

The consumer in the rural area are often unorganized and don’t have any idea of power of consumer unity. The idea of having consumers association or organized efforts to protect consumer interest is still to establish its roots. The implications of having unorganized consumer class are:

i) Unorganized rural consumers Monopoly of the traders and marketers. Total dominance of traders at market place No voice or opportunity to protect against any kind of exploitation Malpractices at market place Discriminatory price and supply policies Failure to use the bargaining power Control on the consumption function by the marketer Quality is a neglected factor Competition is a neglected element

ii) Information explosion

The continuous and ever expanding information explosion has resulted in a great degree of confusion and loss of decision-making capacity of the buyers. The consumers often feel that they cannot exercise their decision making ability, freedom of choice and desire to selector a particular product due to the plethora of information that is made available of selection, lack of ability to select a suitable and most useful product/service are the major damages caused to the rural consumers.

iii) Impact of information explosion or rural consumers

11

Continuous advertising campaign Too many messages stating different aspects of a same product Use of celebrities and role model, as a very large scale Excessive use of a mass media Use of infomercials, direct marketing campaign and promotional schemes Lack of market education to the consumers Claim to that are not batched rightly by appropriate and valid evidences

iv) Lack of definite buying pattern

The buying power, purchasing system approach towards practices in rural areas vary significantly form that of urban marketing system. The rural consumers usually buy in a different manner than the urban consumers for following reasons:

There is a seasonal variation in the purchasing power The period of festivity dominates due buying pattern There is still a great dominance of traditional market, Jatras, and special bazaars

organized on certain select occasions. The consumer to a great extent are distributed in a pyramidal form of income group The consumption pattern has influence of inherited cultural values and ideology due

to which the buying behavior cannot be definitely ascertained The marketers can take undue advantage of certain tradition bound concepts to

exploit the consumers.

6. EXPLOITATION OF RURAL CONSUMERS AND MALPRACTICES AT MARKET PLACE

The exploitation of rural consumers has no limits for last many centuries the rural consumers a being exploited; probably this exploitation shall continue for many more years to come. The main reasons for this loss to the rural consumer are basically illiteracy and ignorance. However with further advancement of technology and marketing skills the exploitation has enhanced to new scales.

6.1. RURAL ECONOMY

Environmental aspects

As rightly commuted in one survey published by E.T. is given as follows.Companies are interested in short-term profit maximization; and to cater to this objective, they could adopt such agri-practices that sacrifice the long-run quality of the farmers’ assets. “The over-exploitation of groundwater, salination of soils, soil fertility, decline and pollution are examples of environmental degradation due to contract farming” observes a study by the United Stated Agency for International Development (USAID). The firms do not care as they tend to move on to new

12

growers and lands after exhausting the potential of the local resources, or when productivity declines for some other reason in the Indian context, one example is the corporate farming ventures in Punjab and Haryana that reinforce monocropping, although it has been amply discussed in several forums that Punjab and Haryana should move away form a rice-wheat pattern.

The rural consumers as buyers do not have proper understanding of their results, and the skill required to exercise their rights. In many cases they are unable to distinguish between the fair and unfair trade practices. This results in heavy exploitation and financial as well as other material losses to the consumers.

Methods adopted to exploit rural consumers

Inappropriate pricing Misbehavior goods sold as quality goods False promise regarding performance Marketing gimmicks and Tall Claims Brand imitation Schemes resulting into over pricing Exhibition-cum-sale of spurious product Poor quality of services offered

In most of the cases rural consumers cannot exercise their rational judgment and prodency to distinguish between the right and wrong. Their ignorance turns out to be a bliss for the marketers. The faith of a common rural buyer is taken for granted and thus he is exploited by the marketers.

1) Inappropriate pricing

In many cases the buyers are not aware of exact and appropriate price that they should pay for the particular product. The products are not properly priced and there are many practices truly adopted while pricing the products.

Pricing practices: Techniques of exploitation

No labeling of prices M.R.P is not printed Local and other taxes are not included in the prices No information is displayed as to the exact prices, and then rates at which taxes are

levied Prices are hand written and incases removable stickers are used. In many cases the consumers are not aware of the exact cost, price and profit

margin Spurious and imitated products are sold at the prices of original products Information regarding gigots, discounts, is often not disclosed

13

2) Inferior goods sold as quality goods

The major problem faced by the rural consumers is sale of inferior goods. In many markets the dummy, imitated and unbranded products are sold in large quantities. The marketers often take undue advantage of the ignorance of consumers. The consumers are tempted, forced, or motivated to buy inferior quality goods by using various marketing gimmices.

Following marketing gimmicks are used to promote inferior goods in rural markets

Quality is a choice of rich and elite class consumers Quality is not an essential feature Price is a criteria for selection Quality results in unnecessary price hike In normal course a particular product does not require more than a minimum quality

standard All products do have a minimum quality You don’t have to pay ‘so high’ for ‘standardized’ and branded products You have many benefits and savings if you buy a particular ‘ low quality’ product

3) False promise regarding performance

In certain cases usually for machines, durables, products with certain specific utility the marketers often give a false promise. These false promises result into forced buying, improper selection and loss to the consumers in many ways. The false promises are usually regarding utility, quality performance, force availability, and uniqueness of a particular product.

Following are the examples o false promises, and tall claims usually full in following categories:

For the first time in India The only product containing xxxx Made by American technology The only authorized supplier of – A sure cure for – Saves 20% energy 30% Extra Now at an unbelievingly low priced The most attractive offer ever made Warranty for all technical defects.

4) Incomplete and limited information

The rural consumers are usually not properly and adequately informed about many aspects of marketing practices. The marketers often take undue advantage of their limited knowledge or incomplete understanding of market, product or services and their availability. The rural consumers are often unaware about many vital information inputs useful and necessary for taking most desired decisions.

14

The information that is usually provided to the rural consumers causes more harm than utility as it leads to loss of purchasing power or improper buying.

The rural consumers often don’t have a right and full information regarding following: The identity and authenticity of the marketer and manufacturer The genuineness of the product The nature and scope of warranty The true price of the product The condition in the contract The after sales service clause and its implications The contents of a product The technical/other details regarding a product or service

5) Marketing gimmicks and tall claims

The unfair and unjust claims made by marketers often are the reason responsible for exploitation of consumers. The marketers often use all such gimmicks that result into improper buying and loss to the consumers. These smiles have a great force of temptation and a trick that traps the consumers to accept the offer made by the seller.

Here some examples of marketing gimmicks used by the marketers are quoted.

A unique gift with this offer Save now-up to – The double benefit offer 100% satisfaction guarantee Money back offer A unique scheme without any interest Buy now pay later Free technical assistance Be a lucky winner Assured prizes for all Win upto Rs.______ Free trip to Singapore Your last chance to win _____

6) Brand Imitation

Imitation of brand leaders and popular products is a ‘sure to win’ practice in rural markets. In most of the cases the marketers bring in large quantity, imitated products which resemble to a great extent with the original product. This limitation results into a great loss to the marketers as well as to the buyers.

The imitation has following implications on the rural buyers:

15

The buyers often have a false impression that they have purchased an original product

Buyers cannot distinguish between original and spurious products Buyers have a false satisfaction of buying a branded product even though they buy

an imitated product The significant price difference results into buying imitated products in place of

branded products Imitated products result into loss of market share of branded products Imitated products cause a damage to the reputation of branded products

7) Schemes resulting into overpricing

Many marketers float schemes that attract consumers and encourage them to buy a product. While floating such schemes there are many false, misleading or unauthenticated claims about prices, quantity, and returns etc. Lower rates of interest, lower or no taxes, no extra charges as well as prices below the maximum retail price are the examples of such misleading pricing policies.

In many cases exhibitions-cum-sales are organized, where the consumers are given promises that are untrue. The claim regarding prices, place o manufacturing, name of the manufacturer, and quality can never be verified. Furthermore, such sales are resulting to loss of taxes to the local administration.

The services offered often are far below the quality standards. In case of consumer durables, the concept of free after sales services is still to come into rectification. Whatever service is offered to consumers is not up to their expectations, delayed and priced. The consumers often don’t know the exact clauses of replacement, warranty, and technical defaults.

7. NEED TO PROTECT RURAL CONSUMERS

Rural consumers need protection from different kinds of exploitation at the market place. For them the market place is not a place for buying the required commodities, goods and services but has turned out to be a place of exploitation, losses and damages. The traders, marketers, agents, and middlemen exploit them and withdraw their purchasing power, without their knowledge. The present day market, for a rural buyer is a place where he can surrender this buying power without his knowledge, he can buy the products that he does not need and he can acquire the commodities that he may not even need.

The gimmicks of marketers and false promises can lure him to purchase everything that is not necessary for consumption. The continuous attack of advertisements, false but attractive slogans and the strong force of motivational impulses are the factors that have caught him in a trap. This definitely is a grave situation, and needs an urgent attention of the law makers. The market trap is still growing and its catchment has broadened significantly. This is a growing threat to the newly earned economic stability. The menace of spurious products and false and misleading

16

advertisements as well as unfair trade practices needs definite and stringent measures to protect the consumer’s interest.

Following are the reasons why the rural consumers need protection at the market place.

A) Limited grasp of marketing practices

The rural consumers do not have an appropriate and complete grasp of the marketing practices. The marketing revolution they are witnessing presently, is quite new for them. They get to assimilate themselves with this new and complex phenomenon. The new trends that are coming up in the rural markets are:

Mobile shops Cash N carry system Buy now pay later Quick buy Exhibitions-cum-sale Special marketing events Direct marketing practices

The consumers are motivated to buy the products by using the gimmicks mentioned above. In many cases the consumers do not have knowledge about many aspects that govern the marketing games. These are:

i) Authenticity of the sellerii) Credibility of the claimiii) Provisions governing warranty

B) Heavy advertising compelling the buyers to buy a particular product

Often the marketers take help of many innovative advertising companies and make use of multiple media. This results in controlling the thinking ability of the buyers. The buyers feel that the claims made by the sellers and marketers are realistic and believable. They often cannot distinguish between a claim of the advertiser and the real piece of information.

Effective use of media

Use of character from epics like Ramayana and Mahabharata Use of word tradition, heritage and culture Emotional appeals through concepts like ‘family welfare’, ‘better quality of life’,

and ‘safety of children.’ Misleading use of rural role models like ‘Sarpanch’, ‘Teacher’ and ‘Grand parents.’

17

C) Exploiting the neo-rural rich class

The description of a neo rich rural woman as made by Shailaish Dobhal is worth considering . (I.T. 188)

This neo rich has a newly acquired purchasing power, that is a major aspect considered by the marketers. The new rich class desires to have status symbols, to compare itself with their urban counter parts. This class wants to use its buying power to have a social status. The new symbols of social status, power, prestige and elitism are listed.

10 symbols of elitism and prestige in rural society Televisions Fridge L.P.G. gas stove Audio system. MP-3 Motorcycle/Scooter Sophaset /Dinning table Mopeds for children Microwave oven Personal computer Cooking range

The marketers are trying to attract the psychology of rural buyers by offering these presents at (apparently) unbelievably low prices, where as in reality the goods are actually sold at an exorbitant with prices, if one considers the actual prices that the rural buyers are paying. The rural buyers in many cases do not have a proper knowledge of the worth of their money.

D) Forced changes in buying habits

The marketers are bringing in silent but definite revolutions in the rural markets. This revolution is tearing out the fabric of rural India and is creating a new class of rural consumers. This class is not in a position to judge the right and wrong effects of changes in the consumption habits. This ‘consumption revolution’ has many adverse effects on the purchasing power, economic stability, and social as well as cultural health of rural society.

E) Lack of knowledge about consumer rights

The rural consumers of the present day, still stick to certain beliefs and misconception about their rights at the market place. This results into heavy exploitations, loss of their hard earned purchasing power.

Most of the consumers even today do not believe that they have certain rights as citizen, and buyers. They still have improper apprehensions about the might of the seller, and organization of the marketing system. Following are the dominant misconceptions of the rural consumers.

Consumers are at the mercy of the seller. Sellers can do no wrong Warranty is never broken

18

Warranty is a quality assurance Quality costs high Products branded with English name are quality products A consumer gets what he deserves? Destiny decides a product’s utility and quality Lucky consumers get good products The regular dealer/shopkeeper never deceives

F) Limited knowledge about laws protecting consumers interest

The rural buyers still do not have sufficient and proper knowledge about the laws and regulations that govern consumers’ interests. In rural India the basic idea about existence of laws to help consumers is still not well established. The present thinking is laws are there to protect citizens’ liberty, to punish the criminals but not to prevent the traders from adopting malpractices. The rural consumers still do not have clear and just perception of regulating system in India.

10 Facets of limited knowledge about law, protecting consumers’ interest

There is no special law to protect the consumers Advertisers do not commit a mistake False claim is an advertisers right ‘Right to deny’ is not a legal right Consumers cannot file a suit in a special court ‘Right to information is not a constitutional right but a privilege’ Govt. cannot stop exploitation of consumers Consumers cannot unite Courts cannot stop malpractices Courts cannot give relief to all the consumers

External drivers and obstacles

In the survey conducted by E.T. following comments are made about the status of rural consumers.

A huge hindering factor in the growth of contract farming models is the existing ban on forward contract that prevents this model to develop in the full sense. A review of the Forward Contract Act is thus imminent if this model has to take off seriously. Secondly, the growth of food processing sector, we mentioned, is extremely crucial since serious industry partnership in contracts would come in only if the value addition potential (through processing) is large enough. Industry players say that the food processing sector’s true potential is not being realized currently because of a multitude of legislations, which are often restrictive and the heavy incidence of duties and taxes on the sector.” There are many food related orders issued by various ministries and they contradict each other at operational level and also provide opportunities for exploitation by food inspectors”, quotes the Confederation of Indian Food Trade and Industry. Any category innovation also requires clearance from the Central committee or Food Standards, which can often be very

19

time consuming. In this light, it is a positive move that the Confederation of Indian Industry is working on a proposed ‘ Integrated food law’ following the Union Budget 2003-03 statement that the government has constituted a group of ministers to prepare a modern integrated law and related regulation. There are also many infrastructural problems that corporates may faces while setting foot into rural terrain – for instance, dissemination of information using technology requires adequate power supply, telecom connectivity and bandwidth apart from the challenge of imparting skills to first time Internet users in remote and in accessible areas of rural India. The government could play a crucial role here and any farsighted policies leading to rural development will only act as enabling factors to the spread of private sector participation in a sector which holds literally, the seeds or may potentially rich harvests in the years to come.

8. PROTECTION OF RURAL CONSUMERS

The rural consumers need protection, guidance and direction for getting value for their money. There should not be two opinions about the fact that there is a significant exploitation of rural consumers in many ways. In many cases, their ignorance and unawareness result into this exploitation. Most of the rural consumers are yet to enter into the mainstream of market system. For many consumers this is their first encounter with modern and commercially sophisticated market place.

The rural consumers are not yet fully aware of mechanism, practices, and conventions in the market place. For many consumers, even today ‘ Seller is the King.’ They still believe in ‘Buyers Beware’ and blame their destiny for buying a poor quality product.

A free and independent citizen of our free republic, a rural consumer has certain rights. He has and should have equal and fair opportunity to exercise his rights. He should be able to take independent decisions and exercise his rights to choose without any fear and bias.

Following are the rights of a rural consumer: Right to education Right to safety Right to information Right to choose Right to be heard Right to enjoy the goods/services as consumers

8.1. Right to education

Being a neo-entrant and bit less learned than the urban consumer, the rural consumer has a class has a special case to plead. This is a subject which has received little attention from the government, the business communities as well as the NGOs. Very few organizations that are involved in educating the consumers are making them aware of their rights. Even after 50 years of independence, the average national literacy is still moving around 50%. The rural literacy is still a

20

major problem. Added to this, there exists a significant disparity in terms of literacy rates of male and female population in rural India.

A literate consumer is in a better position to understand the ways and means of safeguarding his interest once he is aware of rights.

Consumer education with regard to his fundamental rights is not receiving enough attention in our country. There is a strong and urgent to educate the consumers in the light of changes taking place in the market.

Role of consumer education: To understand the dynamics of marketing To decide about quality-price relationship To verify for themselves the claims made by the seller Precautions to be taken in the market place

The relation between the type and the extent of education and level of awareness about the rights is direct. It is quite obvious that, an awakened consumer can take better and sound decisions.

8.2. Right to safety

The most important right for the rural consumer is right to safety. He is often misguided options to buy hazardous ingredients. ‘Safety first’ should be the motto of the marketers. It is necessary that a marketer should sell the product that is safe to handle. Rural consumers should be provided with adequate facilities to test, and verify the claims regarding the safety.

8.3. Right to be informed

It is the right of every consumer to be advised on the merits and demerits of the products. It is a quiet regular feature of the rural markets that, the retailers for their selfish interest, often do not disclose some of the negative features of the product.

The rights to be informed extends not only while purchasing products but also at the time of receiving services. The service provided of any kind should be open, and frank about variety of aspects of the case, good and bad, instead of presenting an over-optimistic picture and give false assurance about service quality.

8.4. Right to choose

Right to choose is an impressive constitutional right given by the constitution.A consumer should have certain basic understanding as to how he can exercise his right to choose. A rural consumer has certain constraints to exercise the rights to choose. They are as follows:

Limited buying options available in the market. Lack of suitable and necessary information. Lack of confidence. Lack of understanding to make a wiser choice. Lack of availability of goods and services.

21

It is necessary that exercising the right to choose should be cost effective to a consumer who never had used it earlier.

Rural consumers have to be trained to exercise the rights to choose. They should be given proper understanding and knowledge of market practices. Unless and until the rural consumers are trained to use the right to choose, the problems of rural India cannot be solved.

8.5. Right to be heard

The whole idea of right to be heard is still not rightly received by the rural consumers. Consumers are a main stay for a business, and are central to the success of any business. Hence, it is the moral, as well as the economic responsibility of the seller to protect the consumers’ interest. He should not miss any opportunity to satisfy the consumers and to build a lasting bond with them. The traders, manufacturers and retailers still have the old mindset of the captive consumer and hence they do not see any need to look into their real difficulties.

The aggrieved consumer can be a source of trouble to the marketers. He has a right to ask for the redressal and solve his difficulties. However, the rural consumers who often receive outright rejection of their genuine complaints cannot take their complaints to the court or consumers’ association.

The rural consumers are not yet properly trained as to how they can achieve the desired level of satisfaction from a buying process. They still do not have a proper understanding of how to ask for a right product or a service. It is at this time that the traders should come forward to redress their grievances. As it is a quite well established principle in the market that, ‘Stitch in time saves nine’; similarly one aggrieved consumer may result into loss of many prospective buyers.

8.6. Right to enjoy goods/services as consumers

The expectation of the rural consumer to have a right to enjoy the goods/services as consumer cannot be underestimated. When a consumer makes a purchase or hires a service, he has a feeling of joy and happiness while using a product. He must get a desired level of satisfaction while using the product.

8.7. SUGGESTIONS TO IMPROVE THE STATUS OF RURAL CONSUMERS

Read available literature on consumer rights. Newspapers and media offer ample opportunity to improve our awareness level

Do not compromise on quality/safety to save a few Rs Always consider the lifecycle cost of a product The lifecycle cost is equal to total initial purchase price plus ownership cost plus

maintenance cost Kindly confirm guarantee/warranty/return goods policy carefully Kindly verify adequacy of service centers Always check for ‘conditions apply’ choice given in the fine print

22

Make a comparative study of competitive prices of various available products Do not rush to buy before you have considered everything Be wary of offers which sound too good to be true, there is a catch somewhere If you buy seconds/export quality/bargain offers/special discount price offer, you cannot

expect quality Patronize those who care for the environment uphold serial cause or reader community

services Insist on cash memo/proof of purchase which establishes as the validity of purchase Do not buy cheap stuff because it is low priced Buy certified products. Believe in standardization Look for longer warranty period Read the instructions for use/warranty, etc..

9. LAWS FOR COSUMER PROTECTION

9.1. CONSUMER PROTECTION ACT 1986

The Consumer Protection Act 1986 is a social welfare legislation which was enacted as a result of widespread consumer protection movement. The main object of the legislature in the enactment of this act is to provide for the better protection of the interests of the consumer and to make provisions for establishment of consumer councils and other authorities for settlement of consumer disputes and matter therewith connected.

In order to promote and protect the rights and interests of consumers, quasi judicial machinery is sought to be set up at district, state and central levels. These quasi judicial bodies have to observe the principles of natural justice and have been empowered to give reliefs, of specific nature and also to impose penalties for non compliance of the orders given by such bodies.

The main objective of these bodies is to provide speedy and simple redressal to consumer disputes. It is one of the benevolent pieces of legislation intended to protect the consumers at large from exploitation.

There is a limited awareness about this act among the rural people. The reasons for this unawareness are

Ignorance Apathy Disinterest Lack of required civic sense

CIVIL SUPPLIES AND CONSUMER PROTECTION DEPARTMENT

23

The objectives of Civil Supplies & Consumer Protection Department are:

To spread awareness on consumer rights amongst all consumer segments

To sensitize manufacturers, service providers on consumer rights and quality

To help consumers get justice when affected.

To continuously assess policy changes required in each sector for consumer empowerment

To identify and weed out unfair trade practices in delivery of goods as well as services

To promote sustainable consumption

9.2. CONSUMER POLICY

The State Government has proposed an ambitious action plan as part of its policy initiatives which include:

Operating a State level Consumer Information Centre

Conducting Consumer Education programmes through AIR, TV and print media

Spreading awareness among children through formation and promotion of consumer clubs in Educational Institutions

Regular conducting of seminars, workshops and interactions with Voluntary Consumer Organizations, Service providers stake holders on consumer issues

Legal intervention on behalf of consumers in important issues to protect their interests as contemplated under Consumer Protection Act, 1986

Quality testing of product and services to assess and to initiate remedial measures for any unfair trade practices and issue alerts

Sustainable consumption campaign amongst all segments of the public.

9.3. CONSUMER LAWS

The Indian Constitution is the spirit behind every Indian Law. Article 39 of the Constitution enshrined in the Directive Principles of State Policy aims to promote welfare of every

24

citizen in the country. Some of the consumer laws are also rooted in the fundamental rights, which guarantee right to life, equality, etc. Some general Laws / Rules concerning fair distribution of goods / services to the consumers are listed out below

General Laws / Code / Rules:

Indian Constitution

Consumer Protection Act 1986 (amended-2002)

Consumer Protection Rules 1987

Tamil Nadu Consumer Protection Rules, 1988

Essential Commodities Act, 1955

The Sale of Goods Act, 1930

Prevention of Black Marketing & Maintenance of supplies of Essential Commodities Act, 1980

Standards of Weights & Measures Act, 1975

The Packaged Commodities Regulation Order, 1975

The Protection of Human Rights Act, 1993

The Protection of Civil Rights Act, 1955

The Water (Prevention and Control of Pollution) Act, 1974

The Monopolies & Restrictive Trade Practices Act, 1969

Prevention of Food Adulteration Act, 1954

Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954

Infant Milk Substitutes, Feeding bottles and infant foods (regulation of production, supply and distribution) Act, 1992

Bureau of Indian Standards Act, 1986

Each of the above laws is enforceable through Courts of Law / Authorities at various levels. Consumers must be aware of provisions of law and therefore the caveat emptor applies "Consumer beware!"

25

9.4. PRODUCT STANDARDS

Any product service can be evaluated by a consumer against following standards:

(1) Mandatory standards laid down by Law

(2) Specifications given by manufacturer

Mandatory Standards by Law:

These are laid down under various acts and rules that govern specific classes of products as well as by general laws that are applicable. Various agencies are involved in standard setting and enforcement in respect of each product sense.

(a) "Bureau of Indian Standards" has laid down 'Mandatory Standards' in case of certain very critical products that have to be compulsorily followed by manufacturers of these products. www.bis.org.in lists the products and standards thereof.

(b) Food Laws:

Prevention of Food Adulteration Act lays down standards for food products to be upheld by manufacturers and traders. Consumers are to be aware of whether products meet local standards.

S.NO LAW MINISTRY NATURE FIELD

ENFORCEMENT 1. Prevention of Food

Adulteration ActHealth Mandatory Food Inspectors

2. Agriculture Produce (Grading & Marking) Act

Agriculture Voluntary Agriculture Marketing Officer

3. Bureau of Indian Standards Act

Food and Consumer Affairs

Mandatory &Voluntary

BIS Regional Offices

4. Essential Commodities Act Food and Consumer Affairs

Mandatory Civil Supplies & Consumer Protection Department Field officers

(c) Weights and Measurements Act 1976:

This Act lays down standards relating to weights, measures and enforcement mechanism. The Standards of Weights and Measures (Packaged Commodities) Rules 1977 lays down packaging and labeling standards for products. The Controller of Legal Metrology in the State and the Inspectors of Labor in districts are the enforcement officers.

9.5. PUBLICATIONS

26

Civil Supplies and Consumer Protection department has been striving to develop learning materials for all age groups on Consumer rights. The following materials are available for any user, learner or trainer:

1. Consumer Service - Training to Government Officials

2. Training manual for SHGs

3. Handbook for Consumer Clubs

4. Training Manual for Citizen Consumer Clubs

5. Teachers Reference Book for Consumer Education

6. Brochure for Consumer Awareness Campaign

7. Consumer Awareness pamphlet

9.6. MEASURES TO INCREASE CONSUMER AWARENESS

Promote General Awareness of the rights of the consumer by encouraging consumer education and supplying information.

Publish periodical and product specific booklets, pamphlets, cassettes, CDs, slides, documentary films and other devices of mass communication for promoting consumer awareness in English and regional languages, highlighting the problem in specified areas like real estate, public utilities, non-banking financial agencies etc.

Enlighten the business community on its ethical and legal obligations to maintain quality of the products or services and to be transparent in dealing with consumers.

Encourage consumer activities to strengthen the existing institutional set up of consumer dispute redressed by acting as a facilitator between consumer and the institution.

Bring together the consumer, traders and policy makers to exchange information of mutual interest for better coordination. Bring together the NGO’s/Consumer activities operating in different areas and equip them with suitable and required information and knowledge to enable them to act as nodal agents of change in rural areas.

Organize and conduct seminars, workshops and group discussions and thus provide a platform for threadbare discussion of the issues and evolve suitable remedial action. Conduct motivational campaigns for groups of potential customers in rural areas.

Coordinate programmes organized by Central and State Governments, State Legal Aid Authorities, Academic Institutes, National and International Consumer Organizations.

27

Periodic interaction with electronic & print media on success stories of consumers.

Establish links with educational institutions like universities, colleges, high schools to emphasize the need for improving consumer education in the curriculum. For eg., Consumer clubs which were started recently by the A.P. Consumer affairs, Food & Civil Supplies Dept. would go a long way in achieving this.

In order to better cope with problems of fake or sub-standard foodstuffs, suggested to develop “Test kits” (may be even in the form of standardized suitcase) for doing basic analysis of foodstuffs. The local authorities should be entitled to draw samples from the market.

Regional language should be used to indicate manufacturing date, expiry date, ingredients and other relevant information on packaged commodities.

The Legal Aid Councils should be extended to rural communities and promoted.

9.8. RECOMMENDATIONS FOR BETTER REACHING THE RURAL POPULATION

Personal contacts with consumers having problems should be intensified, even through door-to-door visits.

Cable TV which is increasingly available in villages should be made better use offor consumer information. Local radio programmes (in the language of the region) should be considered as well.

Banners with slogans and appeals should be used in public places and on publicbuildings. In order to transfer messages to uneducated people, representation of contents in the form of pictures should be thought of.

The weekly markets could be an opportunity to transfer consumer information,placing information stands there and distributing appropriate materials. Evensome basic consumer advice could be given there.

All available media of consumer information should be used, includingdocumentary films, street plays, competitions etc. to spread consumer awareness.

Eco-friendly products should be better promoted in rural areas and eco-friendlyconsumer behaviour encouraged. Friendly behaviour should be encouraged between consumers and dealers.

10. OUR SUGGESTIONS

28

1. In the Ration shopAny interior rural area it may be, there are ration shops. And this is one place people do visit regularly to get the provisions given by the government. So government can take initiations to display awareness charts about the various adulteration and malpractices that are done targeting the rural consumers, so that they become aware of how they are victimized. If they cannot display all the facts in detail, at least vital and most prioritized information should be. (E.g.) those adulterations that could lead to health issues and those sometimes could even turn fatal. All these should be displayed to make the rural consumers be aware and save themselves.

2. Post office

Even the smallest or the remotest of the villages do have a post office. So these post offices could be made use of for the rural consumer protectionAny consumer product has to go through a series of quality checks that is defined by the standards set. The set of documents that explains these standards for the consumer goods must be kept in each post office for the reference of the village residents. But to understand this documents also a above average level of literacy is required, which is found very little in the rural areas. So to make it still more easier, for a common man’s understanding we suggest listing of the brands that pass through these standard checks. (E.g.) if the commodity is soaps, then all Indian soap manufacturers brands that have passed the quality checks can be listed. Similarly for other important products where exploitation of the rural customers is high, the list could be prepared and kept for them. At least this way they will be aware of the basic standards to be followed for the consumer products and the brands that pass through these.

3. Primary health centers

In the primary health centers, the critical information( regarding that of medicines) should be displayed. That how local made unauthorized pills and medicines will not help in recovering from health issues. So display charts depicting these can be put up. Also medicines that are banned can be listed and displayed so that local dealers cannot exploit the rural consumers on their ignorance

4. Media

In the radio stations and TV channels that run by the government, they run weekly programs focusing more on what are the right steps in choosing products and maintaining them. But equal importance is to be given for

29

the Donts that should be followed in choosing the products. Also details on malpractices and adulteration can be enacted for visual media. And important information during that week regarding any consumer product can be mentioned along with in the media. (E.g.) any ban on any products or more such updating should be included.

30