I m a student of class X and i want some information on need of consumer awareness for my economics project.?

Please also state about consumer awareness and various forms of consumer exploitation..

( A )

Consumer Awareness And Its Need

THE PROCESS of development along with the expanding globalisation and liberalisation process has increased the number of
consumer related issues. Consumer protection has earned an important place in the political, economic and social agendas of
many nations. In India, the Government has taken many steps including legislative, to protect consumers.
Education is a life long process of constantly acquiring relevant information, knowledge and skills. Consumer education is an
important part of this process and is a basic consumer right that must be introduced at the school level. Consumers by definition
include all citizens who are, by and large the biggest group, who are affected by almost all government, public or private decisions.
The most important step in consumer education is awareness of consumer rights. However, consumer education is incomplete
without the responsibilities and duties of consumers, and this influences individual behaviour to a great extent.


Consumer awareness means educating consumers about their rights and duties so that they are well conversant with the
laws that protect their interests and restrict traders to exploit them. It includes knowing what ingredients are included in
a product and whether or not any of these ingredients may be potentially harmful to health, also figuring out whether or
not the cost of a product is worth it or if the consumer would get the same or near the same value for their money even if
he buys a cheaper brand.

Usually commercials and ads increase consumer awareness, as well as "word of mouth"
(a comment from someone you know about a product or service).


Following points highlight the need for consumer awareness:
a) Maximisation of consumer welfare – Awareness facilitates right decisions. It maximises consumer welfare.

b) The need for consumer welfare was felt because, out of their selfishness, both the manufacturers and traders con go to
any extent. They can charge high prices and scoop to underweight and under measurement methods.

c) The need for consumer awareness was felt all he more when some unscrupulous traders began o play with the health
of the nation by indulging in adulteration of edible oils, milk, butter, ghee etc. Even duplicate medicines were introduced.
This was beyond the patience of the nation.
Briefly, consumer awareness improves quality of life of the people and improves social welfare.

( C )

What is the role of producers in protecting consumer rights??

The producers are under obligation to produce goods conforming to the prescribed standards, such as ISI,
AGMARK etc, wherever such standards are prescribed.

They must provide written literature giving details about the products, their ingredients, warranty, guarantee,
MRP, date of manufacture and expiry, operational instructions etc. as the case may be, with each unit of product.

Provision of the address of the manufacturer with other contact details is significant as the customer may ultimately have to fall back in case of need.

There are also governmental regulations on producers as to the pollution they create, size of their factories, and many other areas.

Producers can help in fair trade in the following ways
1.proper labeling, full information, health warnings, handling information, expiration date, etc. keep to requirements, norms, standards

2.labelproducts according requirements, providing true facts

3.If they are providing a service they should carry it out with due skill and care. They must also make sure that any materials they provide as part of this service are fit for the purpose.

4.It is also illegal for a supplier to cut off, or threaten to cut off, supply to a reseller (wholesale or retail) because they have been discounting goods or advertising discounts below prices set by the supplier.

5. And last, to be fair in selling products to the buyers and make the consumer feel that he/she is not being cheated

( D )

Case study as 1 incident of violation of Consumer rights and decision by the consumer courts?

The most popular case is the MacDonalds hot coffee

Liebeck v. McDonald's Restaurants,[1] a.k.a. the "McDonald's coffee case", is a well-known product liability lawsuit that became a
flashpoint in the debate in the U.S. over tort reform after a jury awarded $2.9 million to a woman who burned herself with hot coffee.
The trial judge reduced the total award to $640,000, and the parties settled for a confidential amount before an appeal was decided.
The case entered popular understanding as an example of frivolous litigation.[2]

Others, especially opponents of tort reform, argue that Liebeck's recovery was just. They argue that the popular understanding of the
case omits significant and relevant information. Liebeck's attorneys argued that McDonald's coffee was "defective", claiming that
it was hotter and more likely to cause serious injury than coffee served elsewhere. Moreover, McDonalds had refused several
prior opportunities to settle for less than the $640,000 ultimately awarded.[3] Reformers defend the popular understanding of
the case as materially accurate; note that the vast majority of judges to consider similar cases dismiss them before they get to
a jury; and argue that McDonald's refusal to offer more than a nuisance settlement reflects the meritless nature of the suit rather
than any wrongdoing.[4][5]

Contents [hide]
1 Background of the case
1.1 Attempts to settle
1.2 Evidence presented to the jury
1.3 Verdict and settlement
2 Other coffee burn cases
3 In popular culture
4 See also
5 References
6 External links
Background of the case
On February 27, 1992, Stella Liebeck, a 79-year-old woman from Albuquerque, New Mexico, ordered a 49-cent cup of coffee
from the drive-thru of a local McDonald's restaurant. Liebeck was in the passenger's seat of her Ford Probe, and her grandson
Chris parked the car so that Liebeck could add cream and sugar to her coffee. She placed the coffee cup between her knees and
pulled the far side of the lid toward her to remove it. In the process, she spilled the entire cup of coffee on her lap.[6]

Liebeck was wearing cotton sweatpants; they absorbed the coffee and held it against her skin as she sat in the puddle
of hot liquid for over 90 seconds, scalding her thighs, buttocks, and groin.[7] Liebeck was taken to the hospital, where
it was determined that she had suffered third-degree burns on six percent of her skin and lesser burns over sixteen
percent.[8] She remained in the hospital for eight days while she underwent skin grafting. Two years of treatment followed.

[edit] Attempts to settle
Liebeck sought to settle with McDonald's for US$20,000 to cover her medical costs, which were $11,000, but the
company offered only $800. When McDonald's refused to raise its offer, Liebeck obtained Texas attorney Reed Morgan.
Morgan filed suit in a New Mexico District Court accusing McDonald's of "gross negligence" for selling coffee that was
"unreasonably dangerous" and "defectively manufactured." McDonald's refused Morgan's offer to settle for $90,000.[3]

Morgan offered to settle for $300,000, and a mediator suggested $225,000 just before trial, but McDonald's refused these
final pre-trial attempts to settle.[3]

McDonald's refused to settle perhaps because, though there had been numerous lawsuits alleging that hot coffee was
"defectively manufactured," courts had consistently dismissed the cases before trial on the grounds that coffee burns
were an open and obvious danger.
Verdict and settlement
Applying the principles of comparative negligence, the jury found that McDonald's was 80% responsible for the incident
and Liebeck was 20% at fault. Though there was a warning on the coffee cup, the jury decided that the warning was neither
large enough nor sufficient. They awarded Liebeck US$200,000 in compensatory damages, which was then reduced by 20% to $160,000.
In addition, they awarded her $2.7 million in punitive damages. The jurors apparently arrived at this figure from Morgan's suggestion
to penalize McDonald's for one or two days worth of coffee revenues, which were about $1.35 million per day.[3]

The judge reduced punitive damages to $480,000, three times the compensatory amount, for a total of $640,000. The decision
was appealed by both McDonald's and Liebeck in December 1994, but the parties settled out of court for an undisclosed amount less than $600,000.[11]

( B )


Consumer education can play a very important role in protecting the environment. Today, we are facing environmental crisis in the form of global warming pollution, ozone depletion. etc.

The root causes of the environmental crisis are overuse of natural resources and
over consumption in the affluent societies.

Exploding world population and excessive consumerism are making the problem almost unmanageable.

Population as well as over consumerism need to be curbed. Consumer education will go a long way in curbing over consumerism.

Let’s know about the benefits of consumer education to individuals:

• It encourages critical thinking, which helps consumers function more efficiently in the marketplace.

• It promotes self-confidence and independence.

• It imparts life skills which contribute to success in everyday living.

• It fosters values such as distinguishing between needs and wants, paying bills, saving money, planning and budgeting.

• It improves the quality of life as well as environment.

Consumer education benefits society because it :

• Enhances citizen awareness.

• Promotes a stable society.

Consumer education benefits business because:

• It satisfies customers.

• It increases sales.

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