CONSUMER BEHAVIOUR: GOODS AND SERVICES, MARKETING PRACTICES AND THE ROLE OF GOVERNMENT BY - KOMAL SHARMA & YASH MALVIYA

CONSUMER BEHAVIOUR: GOODS AND SERVICES, MARKETING PRACTICES AND THE ROLE OF GOVERNMENT[1]

AUTHORED BY - KOMAL SHARMA

 & YASH MALVIYA

Abstract

Consumer behaviour refers to the choices and the decisions of selection, purchase, use, experience, and disposal of goods and services by individuals or families. Customer interaction with the market is influenced by a variety of sociological, psychological, and cultural factors. This research paper focuses on the role of government in respect of consumer and their behaviour. In spite of the government's ban, commercials for harmful products including cigarettes, alcohol, paan masala, gambling, and others continue to appear on private channels, cable, and through the use of substitutes, according to Indian law. Encouraging this leads to destruction of the life of people. In India, there are nearly 267 million smokers, Alcohol consumption is nearly 1.4 million, also the surrogate advertisements that are harmful for the innocent consumers which is to be taken into consideration. In this research paper the researcher is focusing on the welfare of the consumer. The paper also discusses and suggests the facets of the consumer welfare by criticising the government and legislative actions and the behaviour of the consumer for such change. The paper is non- empirical and doctrinal in nature.

Keywords: Consumer Behaviour, Market, Goods and Services, Government, India, Public Welfare.

Introduction

The study of consumers and the methods they employ to select, use (consume), and discard goods and services, as well as the emotional, mental, and behavioural responses of consumers, is known to be behaviour of a consumer. It is essential to know behaviour of the consumer to the firms, to develop powerful marketing tactics that can affect consumer’s decision-making processes. Businesses all over the world attempt to sway consumers by enticing them to purchase goods and services. This is accomplished through researching consumer demands and developing techniques that will encourage product purchases. All of these harmful products lead to destroy the life the consumers. This will infer from the information below.  

What is Consumer Behaviour?

Consumer behaviour is the actions and decisions that people or households make when they choose, buy, use, and dispose of a product or service. Many psychological, sociological, and cultural elements play a role in how consumers engage with the market. Consumer behaviour toward a product encompasses all aspects, from the original choice to acquire it through how they use it and whether they decide to make additional purchases of it in the future or not. Developing more successful advertising and marketing efforts that are better equipped to reach and influence the customers. This can involve leveraging client information to generate more specialized email campaigns or running targeted social media marketing. All of this led to change in the actions and behaviour of the consumer. Some of the goods and services that are affecting the lives of the consumers are given below:

1. Tobacco and other smoking products

The tobacco business has long used experiential marketing, which is the approach of getting customers to experience or connect with a brand during social gatherings and events like concerts, pubs, and nightclubs. By infiltrating their social activities and normalizing cigarette use, tobacco corporations have been using this form of marketing to persuade young adults to experiment with tobacco and boost use for decades, according to papers from the tobacco industry. In India, there are nearly 267 million smokers. 1. Men use tobacco products 42.4% of the time, while women use them 14.2% of the time Among adults (age 15+)

a. Adults who use smokeless tobacco are 21.4% (men 29.6%; women 12.8%).

b. Adults smoke 10.7% (men 19.0%; women 2.0%).

c. The majority of adult smokers (7.7% of all adults) smoke bidis.[2]

2. Among children (aged 13 to 15),

a. 4.1% smoke tobacco and 4.1% use smokeless tobacco[3]

b. Boys use tobacco at a rate of 9.6%, while females use it at a rate of 7.4%.

The deaths arises Over 1.2 million Indians perish annually as a result of smoking and exposure to second hand smoke.[4] Every year, more than 230,000 Indians die from using smokeless tobacco.[5] And due to which there are near about 90% of the mouth cancer cases due to tobacco and other substances.

There was a survey took place of Society and Gutkha Consumption where the researcher asked certain questions which include the questions given below:

Are you aware of the fact that Gutkha Chewing is harmful for health? Yes- 100% No- 00%

Would you discourage your children to consume Gutkha? Yes-100% No- 00%[6]

As per the research is concerned all of the consumers where aware of chewing Gutka is harmful for health and so they do not want their child to consume it but still people are consuming and getting addicted. Due to which, major deaths and deceases are taking place amongst people.

2. Alcohol  

Alcohol is a psychoactive drug with addictive qualities that has been used for ages in many different cultures. Alcohol abuse has serious social and economic repercussions as well as a high illness burden. More than 200 diseases, injuries, and other health issues are caused by alcohol use.[7] Alcohol consumption is linked to an increased risk of acquiring serious non communicable diseases such liver cirrhosis, several malignancies, and cardiovascular diseases as well as mental and behavioural disorders, including alcohol dependency.

The alcohol industry has been more involved in the support, study, and marketing of anti-drinking and driving laws and programs, particularly those that pertain to traffic safety. In India the Alcohol consumption is nearly 1.4 million out of which in 19 of the deceases alcohol is founded as the predominant factor of risk taking where as 11 million of them are found as disability-adjusted life years. It is also estimated that due to consumption of the alcohol near about 2.4 million cases of crime is registered with the police out of which1.6 are brought to trial and over 131000 of the incarcerations and the about 33% are the total of all those crimes, incarcerations and trials.[8]

3. Gambling Addictions

Among the activities that addicted gamblers engage in are sports betting, slot machines, lottery tickets, roulette and poker. There are many places for those with gambling addictions to go. Even though many individuals prefer to gamble in a casino, the number of people who are addicted to online gambling is growing as more people use the Internet. On the other hand, for certain pathological gamblers, dream 11 team is one of the platforms where gambling occurs. Trading addiction and gambling addiction are quite similar, with traders chasing losses and taking ever-greater risks for greater potential rewards and greater thrills. Addiction to gambling can occur for a variety of causes. In India, the illegal sports betting market is booming, with cricket betting being particularly popular. An estimated Rs. 30,000 crore (almost $4.4 billion) was wagered on the 2016 T 20 Cricket World Cup and close to Rs. 2500 crore (approximately $375 million) was wagered on an India vs. West Indies cricket match.[9] In 2016, the Indian Supreme Court ordered the Law Commission to study the appropriate course of action for dealing with illicit gaming in India. The Law Commission of India stated in its 2018 report [10] that "effective regulation of these activities remains the only practical alternative" because it is impossible to totally prevent them. There is a rising risk that more individuals will start playing online gambling and, as a result, more people would develop gambling-related disorders in the modern India, where internet penetration and technological improvement are both continually increasing. [11]

This is also seen by the Dream 11 users increase rate, as per the year 2018 is concerned there are total 2 crore users of dream 11 in India whereas in 2019, there are 5 crore users in India.  [12]There is always a burst of adrenaline associated with trying to earn money, mingle with others, or get away from stress or financial stress. Globally, there are about 350 million people with very harmful and dangerous gaming behaviours and addictions. Individuals who have developed coping mechanisms for this stage of addiction exhibit the following symptoms: Depression, migraine, inability to sleep, gastrointestinal issues, social anxiety and discomfort. It resembles drug addiction the most; it causes the issue and results in long-lasting effects. A report on gambling and gaming related suicides in India found that 83 percent of all reporting linked suicide to financial loss due to gambling or gaming.[13] This harm is not only towards a private person but the society at large. This lead family, and society of victims, a great loss of a life as well as financial losses.

Measures taken by Government to control the use of

harmful products

The National Tobacco Control Program (NTCP) was established by the Indian government in 2007-2008 as part of the 11th Five-Year Plan with the following objectives: (i) increase public awareness of the negative health effects of tobacco use; (ii) decrease the production and supply of tobacco products; and (iii) ensure effective implementation of the provisions under "The Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply etc.)

WHO has maintained that raising prices through taxation is the most effective way to reduce tobacco use. Tobacco taxation is a highly effective measure, particularly when combined with a progressive approach to redistributing revenue from taxation to tobacco control programmes, health care, and other social support services. Decreasing affordability is particularly effective in reducing smoking rates among young people.

The WHO-SAFER international project was introduced by the World Health Organization (WHO) to lessen alcohol-related harm in member nations.[14] The following goals are supported by this project, which is based on a growing body of data and the current WHO Global Strategy on Alcohol[15]. Increasing the price of alcohol through excise taxes and pricing policies. (1) Strengthening limitations on the availability of alcohol. (2) Promoting and implementing drink-driving countermeasures. (3) Improving access to screening, quick interventions, and treatment. Many projects driven by research have attempted to carry out systematic evaluations of the degree to which such evidence-based tactics are being adopted in jurisdictions and, in certain circumstances, tie the degree of policy implementation to results.

The World Health Organization Framework Convention on Tobacco Control (WHO FCTC) is a treaty in response to the globalisation of the tobacco epidemic. It lays down recommended legislative guidelines for countries to follow on taxation of tobacco, protection from exposure to second-hand tobacco smoke, packaging and labelling of tobacco products, advertising and sponsorship, among others.

As per the gambling is concerned or the addictive games are concerned under seventh schedule, the constitution made certain laws related to betting and gambling. The legality of gambling varies by state in India. This implies that each state has the right to enact its own regulations on regional gambling. The Public Gaming Act of 1867 governs gaming activities at the federal level. Since that year was when this law was passed, there is no reference to online gambling. Additionally, there is no mention of internet gambling in the Information Technology Act of 2000.

There are many laws, regulation, rules yet there is no any strict and mandate action that has been laid down to control and save the lives of the people. 

Factors Affecting Consumer Behaviour

There are many things that are influencing people and specially the youths. In every case youths are more engaged in addiction towards such products. At both the individual and societal levels, numerous variables that influence the consumption levels, patterns, and the scope of related issues in populations have been found. Level of economic development, culture, social norms, accessibility to alcohol, and the introduction and enforcement of alcohol legislation are all societal factors. For a given level and pattern of drinking, adverse health effects and social suffering are greater for poorer societies. Familial situation, gender, Age, and socioeconomic level are all personal aspects. Huge Social advertisements (i.e. ads) are frequently made to persuade a target audience's voluntary or involuntary actions. Nothing that the government deems harmful, immoral, or threatening for the stability of the country can be written or aired because the government controls the media. Law is seen as the key enabler of significant advancement in the tobacco control debate. Drinking alcohol turned proved to be riskier, and criminality rose and "organized." The court was shocked by the impact of the prohibition, jail systems were overcrowded, and public official corruption skyrocketed. There were no measurable improvements in profitability or reduced truancy. Disallowance effectively increased government expenditure by eradicating a crucial source of expense income. Numerous users were compelled to switch to dangerous substances including opium, marijuana, prescription medications, cocaine, and others that they would not have likely tried without preclusion.

The major role in influencing the consumers is the marketing strategy of misleading advertisements or surrogate advertisement.

Section 2 (28) of The Consumer Protection Act, 2019 defines "misleading advertisement" as-  misleading advertisement in relation to any product or service, means an advertisement, which—

 (i) falsely describes such product or service; or

(ii) gives a false guarantee to, or is likely to mislead the consumers as to the nature, substance, quantity or quality of such product or service; or

(iii) conveys an express or implied representation which, if made by the manufacturer or seller or service provider thereof, would constitute an unfair trade practice; or

 (iv) deliberately conceals important information[16];

Surrogate advertisement is simply an alternative form of advertising for things that are prohibited by law from being explicitly advertised. Examples of such products include tobacco products, alcohol, narcotics, and other similar items. Surrogate Advertisement is defined under Rule 2 (h) of Central Consumer Protection Authority [17]as “surrogate advertisement” means an advertisement for goods, product or service, whose advertising is otherwise prohibited or restricted by law, by circumventing such prohibition or restriction and portraying it to be an advertisement for other goods, product or service, the advertising of which is not prohibited or restricted by law.  Here the advertisement of this entire surrogate Advertisements are even if considered but the proper and strict actions are not been involved and so all of which arises and gives the businessmen the way to advertise those products. All of these brand gains are the values or rather recall value from those advertisements which in turn increased the sales of products which are lawfully prohibited to advertise and the functions of this advertisements are based upon the said out of sight- out of mind marketing strategies. The state's goal in prohibiting direct advertising for these products is to safeguard the health of its populace, which highlights numerous domestic and international objectives set by India as a nation. It is obvious that health comes before the promotion of the aforementioned products, yet despite this, the above-mentioned items also provide significant contributions to the Indian economy's revenue generating.

As per generation of economy is concerned, a study revealed about the social cost of the use of alcohol across 12 counties which has  been counted that the economic burden of alcohol was 0.45 to 5.44% of the GDP[18]. In 2017–18, the projected economic cost of tobacco was 1% of GDP. The country spent INR 816 on costs associated with tobacco consumption for every INR 100 in excise duty from tobacco products collected in 2016–17.[19] With the implementation of the Goods and Services Tax (GST) in 2017, tobacco products were taxed at the highest slab of 28%, however the tax as a proportion of the retail price was roughly 53% for cigarettes, 22% for bidis, and 60% for smokeless tobacco. This is substantially below the WHO-recommended tax rate for all tobacco products, which is at least 75% of the retail price.[20]

 The government for protecting the consumer enforced the Consumer Protection Act of 2019 (CPA) for safeguards the rights of customers who are the victims of manufacturer and distributor fraud and abuse. Construction of an analysis of current legal frameworks, their effectiveness, gaps in coverage and potential solutions to this enduring issue are of the utmost importance. The current situation calls for an evaluation of the independence of those with the right to advertise in relation to consumer rights under the CPA, 2019, and other laws covering the marketed goods and substances that imperil public welfare. It argues for the necessity of laws like this, which support legitimate, transparent advertising while also raising serious concerns about any potential violations of advertisers' rights.

Conclusion

There are many lives that are being destroyed due to use of these harmful products and which is strongly to be considered by the Indian government. Even if the government has taken actions and put-forth certain rule and regulations but there is still no concrete step taken to prohibit and save the lives of people. There are many countries that are taking due care, For example, cigarette sales were prohibited in 15 US states between 1890 and 1927[21]. On December 13, 2022, New Zealand approved a law making it illegal to sell cigarettes to anyone born in 2009 or later. This effectively raises the legal smoking age every year. Children will have to be 15 or older to purchase cigarettes starting in 2023. They will need to be 16 in 2024, and so on, up until 2050, when the minimum legal age will be 42. Additionally, the nation will limit the number of outlets permitted to sell cigarettes to a maximum of 600 across the 5 million-person nation[22]. Local governments and state governments can still implement such prohibitions by certain stringent laws like other countries. Businesses, by choosing the well known and influencing personalities, for consumer attraction for advertisement (surrogate advertisement) as a marketing strategy should be strictly banned. Manufacturing, selling of the products should be discontinued. Also the youth should be accurately educated about the problems after such consumption or usage by conducting certain sessions or else it should be added in the studies and should be prohibited from usage of such addictive factors. The health awareness should be spread across the society related to such consumption rather than generalizing it. During pandemic, the government has dealt with these factors, which is to be analysed, considered, acknowledged and concluded to form certain steps. The government should strictly focus to stop all those addictive gambling games. The objective of the government should be mainly towards consumer welfare rather than economic gain. 

[1] Komal Sharma, Yash Malviya, Consumer Behaviour: Goods and services, Marketing Practices and the Role of Government.

[2] India Global Adult Tobacco Survey (GATS) 2016-17. Centers for Disease Control and Prevention (CDC)

[3] India Global Youth Tobacco Survey (GYTS). National, 2019.

[4] Global Burden of Disease (GBD) 2019. Seattle, WA: Institute for Health Metrics and Evaluation (IHME), University of Washington; 2021.

[5] Siddiqi, K., Husain, S., Vidyasagaran, A. et al. Global burden of disease due to smokeless tobacco consumption in adults: an updated analysis of data from 127 countries. BMC Med 18, 222 (2020).

[6] Sangita Kumari, Psycology Of Consuming Gutkha, Jamshedpur Research Review, year IX, Vol. 2, Issue 45, Pg. 19.

[7] Alcohol, World Health Organisation

[8] Technical Brief Assessment of Burden and Socio Economic Cost Attributable to alcohol use in India, World Health Organization Country Office for India. 

[9] Wallets Grew Lighter as Hope Stayed Alive Till the Very End Kochi: Economic Times; 2016.

[Google Scholar]

[10] Legal Framework: Gambling and Sports Betting Including in Cricket in India, Report No. 276. 2018. Available from: http://www.lawcommission.nic.in [Last accessed on 2020 Aug 15]

[Google Scholar]

[11] Sanju George​, Jessy Fenn, Kripa Robonderdeep, An Overview of Gambling in India Review Article, Global Journal of Medical Pharmaceutical and Biomedical Update 2020:15;4doi:10.25259/GJMPBU_7_202

[12] Dream11 Achieves Another Milestone, Hits 5 Crore User Mark, Dream Sports https://www.dreamsports.group/newsroom/dream11-achieves-another-milestone-hits-5-crore-user-mark/

[13] 53. Balhara Y, Singh S, Yadav Z. Media reporting on deaths due to suicide attributed to gaming in digital news: a case of misrepresentation and missed opportunities. Asian J Psychiatr. (2022) 68:102955. 10.1016/j.ajp.2021.102955 [PubMed] [CrossRef] [Google Scholar]

[14] WHO . The SAFER Technical Package: Five Areas of Intervention at National and Subnational Levels. WHO; Geneva, Switzerland: 2019. WHO Technical Document. [Google Scholar]

[15] 13. WHO . Global Strategy to Reduce the Harmful Use of Alcohol. WHO Department of Mental Health and Substance Abuse; Geneva, Switzerland: 2016. [(accessed on 13 August 2021)]. Available online: https://www.who.int/publications/i/item/9789241599931 [Google Scholar]

[16] Section 2(28) of the Consumer Protection Act, 2019.

[17] Rule 2 (h) of Central Consumer Protection Authority

[18] Thavorn charoen sap M, et al. The economic impact of alcohol consumption: a systematic review. Substance Abuse Treatment, Prevention, and Policy. 2006;4:20. Doi:10.1186/1747-597X-4-20.

[19] India loses 1% of its GDP to diseases and early deaths from tobacco use, World Health Organization.

[20] By Divyani Dubey, Data Dive: Tobacco Kills 3,700 People Every Day, Causes 27% of Cancer Cases

Taxation on tobacco in India not up to WHO recommendations and unable to influence affordability to deter consumption

[21] Dr Robert N Proctor, Why ban the sale of cigarettes? The case for abolition, National Library of Medicine.

[22] Annalisa Merelli, New Zealand's new cigarette law is fighting the wrong war, Quartz, December 15, 2022