Consumerism promotes both social as well as economic conditions which encourages the buying of goods and services in ever-greater amounts. And, consumerism implies better economy of a nation. The term refers to the consumer protection which seeks to defend and inform consumers to be informed of practices as honest advertising and packaging, product guarantees, fair price, and enhanced standards of safety. In this regard it is a movement or an array of policies having a mission of regulating the products, methods, services, and standards of sellers, manufacturers and advertisers in the buyers’ interests. As per economics definition, consumerism means economic policies of laying importance on consumption. In a sense, it is believed that the consumers are free to make choice and should dictate the society’s economic structure. The term “consumerism” had been first used in the year 1915 and referred to “advocacy of the rights and interests of consumers” defined in Oxford English Dictionary. Consumer protection plays a crucial role in building a fairer, safer world.

In the developing countries, consumers are yet to grow to be mature in their decision making. Consumers need to think seriously regarding their requirements. Most of the products are purchased by the consumers based on herd mentality; if neighbors buy something, or friends buy then even I want to buy. Also, there are many products in the market that signifies the status symbol like food processor, microwave, home theatre, dining tables etc and the consumers are ready to purchase these products even without having much demand. Some life-events influence consumer behavior; these life events which otherwise can be rationally handled; need, arousal, information, search need to be evaluated while looking at alternatives which does not happen.

In India there are strong and clear laws to defend consumer rights. Out of the various laws that have been enforced to protect the consumer rights in India, the most important is the Consumer Protection Act, 1986. According to this law, everybody, including individuals, a firm, a Hindu undivided family and a company, have the right to exercise their consumer rights for the purchase of goods and services made by them. It is noteworthy that, as consumer, one knows the basic rights as well as about the courts and procedures that follow with the infringement of one’s rights.

In general, the consumer rights in India are listed below:

• The right to be protected from all kind of hazardous goods and services: Goods or services that can be proved hazardous to the safety or life of a person offered for sale, unknowingly or knowingly, that cause injury to health, safety or life. According to the Consumer Protection Act 1986, the consumer right is referred to as ‘right to be protected against marketing of goods and services which are hazardous to life and property’. It is applicable to specific areas like healthcare, pharmaceuticals and food processing; this right is spread across the domain having a serious effect on the health of the consumers or their well being viz. Automobiles, Housing, Domestic Appliances, and Travel etc. When there is violation of the right then there occur medical malpractice lawsuits in the country. It is estimated every year that thousands or millions of citizens of India are killed or seriously injured by immoral practices by doctors, hospitals, pharmacies and the automobile industry. Still the government of India, known for its callousness, does not succeed in acknowledging this fact or making a feeble effort for maintaining statistics of the mishaps
• The right to be fully informed about the performance and quality of all goods and services: The right to information is defined as ‘the right to be informed about the quality, quantity, potency, purity, standard and price of goods or services, as the case may be so as to protect the consumer against unfair trade practices’ in the Consumer Protection Act of 1986. In the market place of India, consumers get information by two ways namely advertising and word of mouth however these sources are considered to be unreliable but still this word of mouth is quite common here. Because of this, the Indian consumers hardly have precise and complete information for assessing the true value, safety, suitability, reliability of any product. Usually the hidden costs can be found, lack of suitability, quality problems and safety hazards only after the purchase of the product.
• The right to free choice of goods and services.
• The right to be heard in all decision-making processes related to consumer interests.
• The right to seek redressal, whenever consumer rights have been infringed.
• The right to complete consumer education.

The Consumer Protection Act, 1986 and several other laws like the Weights, Standards & Measures Act need be formulated further to make sure that there is fair competition in the market and free flow of correct information from goods and services providers to the ones who consume them. In fact, the degree of consumer protection in any country is regarded as the rightly gauged which accelerates progress of the country. There is high level of sophistication gained by the goods and services providers in their marketing and selling practices and different types of promotional tasks viz. advertising resulted in an increasing requirement for more consumer awareness and protection. The government of India has realized the condition of Indian consumers therefore the Ministry of Consumer Affairs, Food and Public Distribution has incorporated the Department of Consumer Affairs as the nodal organization to protect the consumer rights, redress the consumer grievances and promote the standards governing goods and services provided in India.

If there is infringement of rights of consumer then a complaint can be made under the following circumstances and reported to the close by designated consumer court:

• The goods or services purchased by a person or agreed to be purchased by a person has one or more defects or deficiencies in any respect.
• A trader or a service provider resorts to unfair or restrictive practices of trade.
• A trader or a service provider if charges a price more than the price displayed on the goods or the price that was agreed upon between the parties or the price that was stipulated under any law that exist.

Consumers International (CI), the global federation of consumer organisations, set out to consider the state of consumer protection around the world through a global survey of its member organisations. Seventy consumer groups from 58 countries participated in this research, which covers a wide range of consumer protection issues. The results provide an discerning global snapshot of consumer protection across a wide spectrum of countries, and an invaluable contribution to CI’s work on consumer justice and protection. The results of this survey also come at an important time in the ongoing international development of consumer protection. The key principles of consumer safety were initially being protected at an international level in the UN Guidelines for Consumer Protection (UNGCP). Since being established in 1985, the UNGCP now forms the basis of consumer protection legislation in many countries around the world. CI and its member organisations are contributing to this process to ensure that the guidelines are revised to reflect the reality faced by consumers in the 21st Century.

Conclusion: While the business world is experiencing the how consumerism is changing the way the world shops because of the consumer’s ability to get information about whatever he wants, whenever he wants and this power has given the consumer an unprecedented strength. In markets with highly transparent prices, they are kings. And we see highly transparent markets only in developed countries. The implications for business are colossal; threatening for some and welcoming for others. For instance, the huge increase in choice makes certain brands more valuable, while some lose their value. And as old business divisions crumble, a strong brand in one sector can kill other brand’s potential. Look at how Apple has used its iPod to take away business for portable music players from Sony; Starbucks is aiming to become a big noise in the music business by installing CD-burners in its cafés; and Dell is moving from computers into consumer electronics.

In 1980 Michael Porter described three generic strategies which a company of any size (small, medium or big) can choose to pursue its competitive advantage. The three generic strategies are lower cost, differentiated or focus. A company can choose one of two types of competitive advantage; either lower costs than its competitors or differentiating itself along dimensions valued by customers to command a higher price. A company also chooses one of two types of scope, either focus by offering its products to selected segments of the market or mass market, offering its product across many market segments. The generic strategy reflects the organization’s strategic power.

Competitive advantage is a distinguishing trait of the business which may include access to natural resources,  firm’s location, supple supply chain, marketing channels, highly skilled personnel, geographic location, high entry barriers, etc. It can also be technological superiority, brand power which can provide competitive advantage, whether as a part of the product itself, as an advantage to the making of the product, or as a competitive aid in the business process.

Porter suggested that a company must choose one of the three strategies at a time; if it makes a wrong decision it may risk losing its precious resources. He says that to accomplish competitive advantage the firm must have the abilities to cope with the five forces in the market; competition between existing players, bargaining power of buyers, bargaining power of suppliers, threat of new entrants and threat of substitution.

Cost Leadership Strategy:

Wal-Mart Stores Inc. has been successful using cost leadership strategy very well for over years. The store has been attracting buyers with low prices; the low prices are offered every day to attract customers. The products are offered at a cheaper rate than competitors consistently, not occasionally. Wal-Mart is able to carry on the gigantic business due to its large scale and efficient supply chain management. They source products from cheap domestic suppliers and from low-wage foreign markets. This allows the company to sell their items at low prices and they earn profits through thin margins gained from high volumes of business.

In cost leadership strategy companies charge a lower price but their volumes are larger. Therefore, volume of business allows a company to maintain its profits and expand its market share. Some consumers shop only at stores that offer the lowest price, which means industries like groceries, fast foods and garments often have price wars. The winner in a price war enjoys protection from rivals because competitors lose out on their profits when they attempt to offer the lowest price. The cost leadership strategy also makes it difficult for new companies to enter the market because of thin profit margins.

Another brilliant example of cost leadership is the Swedish furniture retailer Ikea. This company offers furniture at amazing low price. It’s the best example of innovativeness. Ikea is able to keep its prices low because it sources its products from low-wage countries. It saves on labour cost and it does not assemble or deliver furniture; customers must collect the furniture from  the warehouse and assemble at home themselves. Thought from convenience point of view this is less suitable, customers still buy it from Ikea because of the lowest price tags.

Product Differentiation strategy:

Porter says that an industry has multiple segments that can be targeted by a firm. The breadth of its targeting refers to the aggressive capacity of the business. If a company targets customers in most or all segments based on characteristic or trait (size, shape, uniqueness, service etc) other than price it is opting for product differentiation strategy.

Etsy is an online artisan store and shopping gallery which has used differentiation strategy wisely. Etsy offers its users a platform to showcase their handmade wares and sell them to customers around the world. Hence this store is called as a crafter’s paradise. Etsy has carved a niche for itself through sales of craft supplies as well as homemade items. Through Etsy, the community of crafters has found a home on the internet and the world has been opened to the amateur artisan/crafter those who wish to sell their products. The Etsy business model brings together the artists and the business savvy of investors who are keen to support the ideas and talent of craftsmen. This business model has worked wonders for Etsy.

Differentiation is a marketing term used to describe the process of developing promotional messages that distinguish products from those offered by competitors. The differentiation plank is created in the minds of target customers. Effective differentiation is critical to building a strong business model. Samsung has adopted differentiation strategy by providing its customers large numbers of service centers network, online technical support, entertaining online complaints, live chats with customers and phone support. Each year Samsung invests minimum 9% of its sales revenue in R&D activity. It believes in innovative concepts and innovative marketing strategies. It has mapped out a plan of reaching $ 400 billion revenue and becoming the leader globally in appliances market by 2020.

Differentiation strategy involves making the products or services diverse yet attractive than competitors. How a company does this depends on the nature of the industry. Differentiation involves product features, functionality, durability, support, service quality, time and also brand image which the customers value. To make a success of a Differentiation strategy, organizations need good research and development, innovation and the ability to deliver high-quality product or service. It also requires effective sales and marketing team, so that the market understands the benefits offered by the differentiated offerings.

Large organizations pursuing differentiation strategy need to stay supple with their new product development processes. Otherwise, they risk attack on several fronts by competitors pursuing differentiation strategies in different market segments.

The Customer Focus Strategy (Niche marketing):

Companies that use Focus strategies concentrate on particular niche markets and, by understanding the dynamics of that market and the unique needs of customers within it, by developing uniquely low-cost or well-specified products for the market. By doing so, the company also enjoys deep economies of scale. The company enjoys effective insights because of the smaller size of market. Thus, automatically the company enjoys market power within the niche. The only challenge in using customer focus strategy or niche market strategy is choosing markets where the customers are lesser prices sensitive.

Because of choosing the right markets and serving customers uniquely well, companies enjoy strong brand loyalty amongst their customers. This makes their particular market segment less attractive to competitors.

In the focus strategy, it is still essential to decide whether a company would like to pursue Cost Leadership or Product Differentiation. Focus is not normally enough on its own. But whether the company uses Cost Focus or Differentiation Focus, the key to making a success of a generic focus strategy is to ensure that it offers its customers that ‘something extra’ as a result of serving only that market niche. The “something extra” that the organizations adds can contribute to reducing costs or to increasing differentiation.

As with its suppliers, the organization does not enjoy the bargaining power because of the lower volumes. But, because of practically no other substitutes to compete with, the company can pass on benefits to its customers.

Examples of niche markets are organic foods which are more expensive, but with promise of better quality and enhanced for environment protection. Another example of a niche is of traditional 35mm film cameras and films; these have become rare. The producers no longer enjoy the same economies of scale, but some consumers still like to use it. The internet has amplified the potential for niche markets and niche businesses. Because of it, the startup cost has been reduced and made it easier to reach a small number of niche customers.

The best example I would quote here is of Café Coffee Day in India. This chain of coffee restaurants brought in the concept of cafes to India where the young and the old can sit for a while, chat, discuss, and meet over a steaming cup of coffee. The first one opened in 1996 on Brigade Road in Bangalore. At CCD, people can have leisure meetings. Nobody disturbs or asks you to vacate the table. The concept instantaneously became a hit. It has a target audience of educated, serious people in big cities and metros where meeting places are in shortage.  Another appreciation CCD has capped is that there are also 11,000 small growers in India from whom they source coffee from.

Porter’s advise on choosing the right strategy: Porter says that organizations must spend time and efforts before they make choice of which generic strategy to pursue because it underpins every other strategic decision. He cautions organizations to use not more than one strategy. One of the most important reasons why companies must use only one of the three strategies is because the entire planned feeling revolves around it. Cost Leadership requires a very detailed internal focus on processes. Differentiation, on the other hand, demands an outward-facing, highly creative approach. So, when companies need to choose one out of three strategies they need to take into account their SWOT analysis. Also organizations need to do the five force analysis of the industry. After doing so the following questions need to be answered:

• Whether supplier’s bargaining power can be reduced or managed.
• Whether customer’s bargaining power can be reduced or managed.
• How to face rivalry among the existing players.
• Whether substitution threat can be reduced or managed.
• Whether threat of new entrants can be managed.

Thus, companies must select the generic strategy that gives them the strongest set of options because it is the starting point of strategic decisions making.