CHAPTER 5 CONSUMERISM

CHAPTER 5

CONSUMERISM

OBJECTIVE:
1. Identify the importance of consumerism in marketing
2. Understand current issues related to consumerism in Malaysia

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Define consumerism

Issues in consumerism Factors that influence the development of consumerism

Ineffective system Insufficient information Poor product quality
Misleading information Unresponsive marketing institution

Consumer rights

Safety
Be informed
Choose
Be heard
Satisfaction of basic needs
Redress
Consumer education
Healthy environment

Consumer protections in Malaysia

Rules and regulations
Government agencies
Non-government agencies

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THE IMPORTANCE OF CONSUMERISM IN MARKETING
5.1

5.1.1 Definition of consumerism
Consumer can be defined as a person who acquires goods and services for his or her own
personal needs. The term "consumerism" refer to the consumerists movement, consumer
protection or consumer activism, which seeks to protect and inform consumers by requiring such
practices as honest packaging and advertising, product guarantees, and improved safety
standards.

In this sense it is a movement or a set of policies aimed at regulating the products, services,
methods, and standards of manufacturers, sellers, and advertisers in the interests of the buyer.

5.1.2 Factors influence the consumerism development

a. Ineffective system
 Refer to not effective system especially in producing results or responding to customers
request and complaints. For example of dissatisfaction for the consumers is the issue of
passport, licenses, telephone connections etc.

b. Poor product quality
 Refer to poor quality for the product purchased. The consumers are dissatisfied with the
performance of the product, which below their expectations. For example, product
purchased uses low-quality parts, system break down and others.

c. Insufficient information
 Refer to not sufficient information and lacking in what is necessary or required. The
consumer is not fully informed about the number of products available in the market
and consumers can be deceived by what is not said in an ads.
 Even when everything stated in the ads is true, consumers can be left with a false
impression because information has been left out, or qualifications have been
presented in an inconspicuous place where consumers may not see them.

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d. Misleading advertisement
 Refer to the use of false or misleading statement in advertising and misrepresentation
of the product at hand, which may negatively affect many consumers. Some consumers
have an antagonistic attitude towards advertising. They feel that the advertisements are
not credible and doubt their truthfulness.

e. Unresponsive marketing institution
 Refer to the nonresponsive marketing institution which is not responding to the
consumer complaint or not readily and not sympathy to consumers. For example, lack
of complete knowledge by salesman, calling the consumer at any time which disturb
consumer work and etc. The situation is very irritating and time consuming.

5.1.3 Consumer rights

a. Safety

The Right to Safety protects the consumer from products, manufacturing practices or services
that could prove detrimental to the health or life of the individual consumer. To ensure this right,
it is the consumer's responsibility to use the product for its intended purpose and properly follow
instructions and warnings.

For example, before consumer buy particular product especially medicines or health-care items,
read the label of the product and its instructions. For those with warning sign, “NOT SUITED FOR
CHILDREN BELOW FOUR (4) YEARS”, consumers are encouraged to abide the instruction for
safety reasons.

b. Be Informed

The Right to Be Informed requires that companies supply all of the information that would be
necessary to make an intelligent decision about purchasing a particular product. This right also
establishes that it is illegal for companies to furnish "dishonest or misleading advertising or
labeling." Consumers are responsible for analyzing the information appropriately.

For example, consumers must check out the product by reading information such as ingredients
used and expiry date which is printed on the label.

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c. Choose

The Right to Choose ensures that consumers be able to choose from a variety of products and
services. The distributors of the products or services must price them based upon competitive
markets and guarantee their quality. Consumers are responsible for comparing all prices before
making decisions and identify differences between similar products.

d. Be Heard

The Right to Be Heard means that government entities should hold the consumer's interests at
heart when implementing policies. Also, businesses should address customer concerns in the
development and production of goods and services. Consumers are responsible for informing
businesses and elected officials of issues pertaining to specific items.

e. Satisfaction of Basic Needs

The Right to Satisfaction of Basic Needs ensures that all consumers have suitable access to
necessary goods and services, such as food, shelter, education, health care and sanitation. This
means that consumers are responsible for governing their own consumption, so as not to impinge
upon others receiving the same basic needs.

f. Redress

The Right to Redress ensures that customers have an avenue with which to receive
compensation for unsatisfactory performance of service or inferior products, or for damage
inflicted from their use. It is the consumer's responsibility to actively seek appropriate restitution.

For example, when consumers face such situation, consumers can request for a replacement or
refund. If the defective items bought earlier can be repaired, consumer may also go back to the
store to get it fixed.

g. Consumer Education

The Right to Consumer Education provides for programs and information that must be available
to individuals to help them make more informed decisions about products. It is the consumers'
responsibility to take initiative in learning about new and changing products throughout their
lives.

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h. Healthy Environment
The Right to a Healthy Environment implies that businesses and governing bodies must install
policies in production and regulation which do not harm the natural world. Consumers are
responsible for purchasing goods and services that cause little environmental impact for
themselves and future generations.
For example, as a responsible consumer, you may also help to keep the environment safe by
practicing 3R – reduce, reuse and recycle.
5.1.4 Consumer protections in Malaysia
a. Rules and regulations
The Malaysia's Consumer Protection Act 1999 (CPA) is an act which came into effect 1st October
1999. It is a piece of legislation enacted with the main objective to provide greater protection for
consumers. The provisions of this act cover areas not covered by other existing laws. This act
provides simple, inexpensive redressal to the consumer's grievances and relief of a specific
nature.

Under this act, an aggrieved consumer may refer any dispute or claim of less than RM10, 000.00
to the established Consumer Redressal Tribunal. The Consumer Protection Act 1999 can be
downloaded from the website of the Ministry of Domestic Trade, Co-operatives and Consumerism:
http://mystandard.kpdnkk.gov.my/mystandard_portal2014/document/akta_perlindunganpen
gguna1999.pdf

Consumer Protection Laws
Consumer Protection Act 1999 practised in Malaysia

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Subject cover in The Consumer Protection Act 1999 as follow:

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b. Government agencies and their functions

 Ministry of Domestic Trade, Co-operative and Consumerism1
(Kementerian Perdagangan Dalam Negeri Koperasi Dan Kepenggunaan)

The Ministry of Domestic Trade, Co-operative and Consumerism was established on 27th October
1990. The purpose of the Ministry establishment is to promote the growth of ethical domestic
trade and protecting the consumer interest.

Functions of KPDNKK - formulates policies, strategies and reviews matters pertaining to the
development of the domestic trade i.e. Distributive Trade and Consumerism Sectors.

Scope of Work for the Ministry:

(i) Domestic Trade
 Develops business opportunities and socio-economic standing of the Malaysian citizen
through the profiles of wholesalers and retailers, co-operatives, franchise, direct-selling,
hawkers and petty traders as well as downstream sectors of petroleum;
 Determines and monitors prices of essential goods;
 Controls and monitors the sales and distributions of essential goods, petroleum and
petrochemical products and direct-selling trade;
 Implements the regulation on metric weights and measures;
 Regulates matters pertaining to companies and businesses based on the related acts;
 Encourage good corporate governance practices; and
 Develops and administers the intellectual property protection system.

(ii) Co-operative
 To formulate policies that related to co-operative sector.
 To regulate co-operative sector (Co-operative Act 1993).

1 http://www.kpdnkk.gov.my/index.php/en/mdtcc/profile/background

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 To execute developmental projects and programmes.
 To conduct training in co-operative sector.

(iii) Consumerism
 Carries out consumer education programmes.
 Enhances programmes on consumer awareness and consumer protection.
 Encourages and assists consumer movements.

 The Islamic Affairs Division 2 (Jabatan Kemajuan Islam Malaysia)
.

In 1968, the Malaysian Council of Rulers decided that there was a need for a body that could
mobilise the development and progress of Muslims in Malaysia, in line with the country’s status
as an Islamic country which was growing in strength as well as fast gaining worldwide recognition.
In realising the fact, a secretariat for the National Council of Islamic Affairs of Malaysia was
formed to protect the purity of faith and the teachings of Islam. This secretariat was later
expanded to become the Religious Division, Prime Minister’s Department which was later
upgraded to become the Islamic Affairs Division (BAHEIS).

On 1st January 1997, in line with the country’s steadfast Islamic development and progress, the
Department of Islamic Development Malaysia (JAKIM) was established by the Government of
Malaysia to take over the role of BAHEIS.

Functions of The Islamic Affairs Division was given the responsibility to implement a programme
under the Prime Minister’s Department which is the Islamic Affairs Administration. The tasks
cover all duties of planning and coordinating bodies and can be summarised below:

 Efforts to improve and standardise the legal and administrative aspects relating to Islamic
affairs, laws and education within the country.

2 http://e-muamalat.gov.my/en/about-jakim

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 Islamic activities to ensure that the policies and national development plans are smoothly
implemented.

 Da’wah Islamiah programmes and activities.
 Programmes and activities for the implementation of the Islamic Absorption Values into

Administration Policy.
 Islamic programmes and activities in Federal Government Department and Statutory

Bodies.
 Efforts to contribute towards the enhancement and strengthening of the position of Islam

and its followers in Malaysia.
 Efforts to control and maintain the purity of faith and the teachings of Islamin the country.
 Efforts to solve the problems of the ummah that are related to current issues.
 Evaluate and provide recommendations on Islamic activities that are implemented by the

Government and private agencies to ensure there are no conflicts between national and
Islamic interests.
 Plan activities to assist the state Islamic authorities in the da’wah islamiah field.

 Scientific and Industrial Research Institute of Malaysia (SIRIM)3

SIRIM is a premier industrial research and technology organisation in Malaysia, wholly-owned by
the Ministry of Finance Incorporated. With over forty years of experience and expertise, SIRIM is
mandated as the machinery for research and technology development, and the national
champion of quality.
SIRIM has always played a major role in the development of the country's private sector. With its
unique advantages in research and technology innovation, industry standards and quality, SIRIM
offers specialised solutions to serve the needs of all industry sectors, making it the ideal
technology partner for SMEs.

3 http://www.sirim.my/index.php/

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Functions:
 Plan, develop, operate and manage national strategic facilities and programmes
 Develop, operate and manage strategic research programmes
 Operate testing laboratories and quality assurance schemes
 Undertake development programmes for small and medium-scale enterprises
c. Non-government organizations and their functions
 Persatuan Pengguna Islam Malaysia (PPIM)4

Persatuan Pengguna Islam Malaysia (PPIM) telah ditubuhkan pada Jun 1997 dengan inisiatif
sekumpulan ahli profesional yang terdiri daripada doktor, pensyarah universiti, para ilmuan
agama dan individu-individu yang prihatin tentang permasalahan kepenggunaan dalam Islam.
Visi penubuhan ini adalah bertujuan untuk menjaga dan membela hak dan mengembalikan
maruah para pengguna Islam, melalui perlaksanaan aktiviti-aktiviti yang proaktif dan berstrategi.

Melalui penyebaran maklumat dan pendidikan yang terancang, adalah diharapkan setiap
pengguna Islam benar-benar sedar dan bersama-sama menyumbang untuk mengembalikan
maruah umat Islam yang kian tercemar dan terabai.
PPIM berusaha dengan gigih untuk menjadi pemangkin kepada perkembangan ekonomi umat
Islam khasnya dan ekonomi Malaysia amnya sebagai ikhtiar untuk menjana ke arah perubahan
yang positif di dalam kehidupan ummah.

4 http://www.ppim.org.my/profil-dan-faq-ppi/

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Objektif Penubuhan:
1. Memberi kesedaran kepada setiap pengguna Islam akan tanggungjawab diri sendiri

terhadap memperjuangkan hak kepenggunaan Islam;
2. Memberi kesedaran kepada pihak pembekal akan tanggungjawab mereka tentang tuntutan

Islam dalam kepenggunaan;
3. Menjadi pemangkin kepada perkembangan ekonomi umat Islam khasnya dan ekonomi

Malaysia amnya;
4. Mencari penyelesaian kepada permasalahan kepenggunaan Islam melalui aktiviti-aktiviti

terancang dan proaktif;
5. Menjadi sebuah organisasi yang berpengaruh dan menyertai arus pembangunan negara

dengan cara positif.

 The Federation of Malaysian Consumers Associations (FOMCA)5

FOMCA’s work is focused on empowering consumers in the context of a developing country with
a growing consumerist society. In this regard, it goes beyond the traditional role of consumer
protection in the marketplace, which has been called the “value for money” approach. Instead,
FOMCA advocates a “value for people”, “value for environment” and “valuefor money” paradigm.

The formation of numerous consumer associations by the early 1970s such as the Selangor
Consumer Associations, Consumers Association of Penang, Consumers Association of Sarawak,
Consumers Association of Negeri Sembilan, Consumers Association of Kedah, Perak Consumer
Association and Consumer Association of Malacca resulted in the government calling for the
establishment of a federation for consumer associations to coordinate their advocacy activities.

The main objectives and roles of FOMCA are to;

5http://www.researchsea.com/html/institutions.php/iid/127/research/federation_of_malaysian_consumers_asso
ciations__fomca_.html

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 Serve as the coordinating, consultative and advisory agency of its registered member
consumer associations in Malaysia.

 Address and advocate the consumer interest in order to promote consumer welfare.
 Resolve consumer issues through policy development and advocacy.
 Provide representation for member associations to deal with the government.
 Disseminate consumer information and undertake consumer education.

FOMCA also represents the consumer interest in policy making and policy implementation in
various ministries and agencies such as the Ministry of Domestic Trade and Consumer Affairs,
the Ministry of Health, Ministry of Finance, etc.

CAP - Consumers Association of Penang.
 Stresses ‘value for people’.
 Focuses on sustainable and ethical consumption
 Challenges current aggressive advertising industry
that is unfettered
 Shapes peoples consumption to lifestyles and
behavior that is unsustainable, unethical and inequitable.
 Educates consumers to change their habits to simpler and more meaningful lifestyles
 Advocating for appropriate policies and laws to be in place.

5.1.5 The marketer’s responsibilities to consumers

Marketers get the right products to the right people at the right time. Ethical marketers ensure
the products meet and exceed their needs, back up their claims and offer value to the customers
over time while finding opportunities to pay it forward. A company that uses ethical and socially
responsible marketing strategy will gain the respect and trust of the customers they target and
interact with. Over long term, this will translate to greater benefits all round. Today’s firms can
make their practices more ethical and responsible by perfecting the following characteristics.

 Safety: Any product or service that could be hazardous to the health conditions of people,
animals or the environment should have clear advisories and warnings. Once the problem is
identified the company can collect data to help improve the product and reduce or eliminate
the danger. An example would be fast food restaurants eliminating the use of hydrogenated
oils even before trans fats were banned.

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 Honesty: Ensuring a product satisfies a need it promises to, or aids in providing a lifestyle it
advertises. Advertising should be transparent about possible side effects and not puff up
results, so clients come to respect the honesty of your advertising.

 Transparency: Any techniques to manipulate and hide facts and information customers need
could harm a company. Just think of the way people regard a company such as Enron that
hid information and was not open to the stakeholders about what was happening.

 Ethical Pricing: Gathering data about your target market will give you information on how
much they are willing to pay for your product. The rest of the pricing strategy, in a simplified
manner, should be based on overhead costs and supply and demand. Creating fake
shortages and bad mouthing the competition are considered unethical marketing practices.

 Respecting Customer Privacy: When customers trust enough to allow you access to their
information, selling it to lead companies or obtaining prospective customers’ information
without permission is unethical and breaks trust. Nobody wants to buy from the creepy guys,
no matter how beautifully packaged their products are.

CURRENT ISSUES RELATED TO CONSUMERISM IN

5.2

MALAYSIA

How is consumer protection being carried out?
 Enforcement of consumer laws
 Introducing new laws, amending old laws
 Education programs for women, schools, promoting school

consumer clubs, university students, seminars and conventions
 Consumer organizations-grants, smart partnerships, joint

programs
 Research into consumer problems
 Redress mechanisms

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What can be done to strengthen consumer protection?
 Consistent and continuous enforcement
 Consumer education from primary school up to university level
 Strengthen school consumer clubs
 Start sustainable consumption at school
 Train teachers with a standard consumer training module
 Carry out basic research into important consumer issues
 Use relevant research already available at universities
 Set-up ‘one stop consumer centers’
 Coordinate consumer programs with relevant government agencies
 Build up consumer NGO’s through bigger grants, standardized reference material and staff

training

CURRENT ISSUE REGARDING
CONSUMERISM

ISSUE 1: ‘BUY MALAYSIA PRODUCTS’ PROGRAM6

Introduction
Buy Malaysia Campaign is a follow up of Buy Malaysian Product
Campaign which was launched in 1998. The rebranding campaign
aims to encourage consumers to buy made in Malaysia products and
help local entrepreneurs to face the less favourable economic
growth. It is also to raise the public awareness of the quality of goods
and services that is offered in Malaysia on par with international standards.
The implementation of this campaign involves two main approaches, which are the awareness
campaign in the mass media and social media, as well as the implementation of the Buy
Malaysian Products Campaign

Objectives:

6 http://www.kpdnkk.gov.my/index.php/en/consumer/campaign/buy-malaysia-campaign

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 Enhance patriotism among Malaysians for Malaysian-made goods and services;
 Stimulate domestic economic growth by increasing the purchase of local goods (domestic

consumption);
 Help entrepreneurs to expand marketing network by improving the local requests;
 Increase awareness among the public on the quality of Malaysian-products and services that

are competence internationally.
Definition of ‘Malaysian Products’ - Definition of Malaysian goods for the purpose of this
campaign is "the product must be manufactured in Malaysia and contain at least 51% of the
material / content and local products produced shall involve the manufacturing process
(manufacturing activity)".
ISSUE 2: IT’S STUPID AND BACKWARD – THE SUNDAILY 7

written by Neda 20/10/2016

PETALING JAYA: Tourism and Culture Minister Datuk Seri Nazri Aziz today criticised the
Department of Islamic Development Malaysia (Jakim) for its decision to deny halal certification
to pretzel store franchise Auntie Anne’s over the use of the term “pretzel dog” on its menu.

Describing the decision as “stupid and backward”, the Umno supreme council member said
Jakim had no reason to make an issue of the term as “pretzel dog” did not mean the food item
contained dog meat.
“Hot dog (or pretzel dog) has always been known to be a western food. It comes from the English
language. (They) should not make us seem stupid and backward.

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“A hot dog is a hot dog even in Malay. We have been eating it for so many years. I’m a Muslim
and I’m least offended by it at all. It has never endangered my faith,” he told theSun when
contacted today.
Meanwhile, Pasir Mas MP and PAS Youth chief Nik Mohamad Abduh Nik Abdul Aziz said there
should be no problems with food operators using the term “hot dog” to describe sausage-based
food products.
He said the term “dog” in context should not be a problem as it has been commonly used to
describe a cooked sausage dish.

Social activist Datin Paduka Marina Mahathir, in her Facebook page on Tuesday, had said: “Oh
we poor, easily confused Muslims who have never heard of hot dogs before and who will have no
choice but to buy one if one was on the menu.”

Their responses came as thousands of netizens criticised Jakim’s decision after Auntie Anne’s
did not receive halal certification due to the pretzel dog menu item.
Several social media users also questioned the halal status of food and drink items such as
A&W’s “rootbeer” and “coney dogs” and hot dogs following Jakim’s directive.

It is learnt that Jakim had called on the Auntie Annie’s franchise to change the name of its pretzel
dog to “pretzel sausage” as the department could not approve the word “dog”.

Even as Jakim’s decision earned the derision of many, Federation of Malaysian Consumer
Associations (Fomca) vice-president Mohd Yusof Abdul Rahman has come out with a statement
calling on food producers and restaurant operators to avoid words including “beer” and “dog”, as
it would confuse Muslims.
He said Jakim should also be more cautious when issuing halal certification to ensure such issues
do not arise once the company is awarded the certificate.

Also toeing the same line is Malaysian Muslim Consumers Association (PPIM) lead activist
Nadzim Johan, who said Auntie Anne’s should be more mindful of the sensitivities of Muslims
and that Jakim’s guidelines are in line with Islamic teachings since the word “dog” is
inappropriate.

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The issue was first highlighted after Auntie Anne’s quality assurance and halal executive Farhatul
Kamilah Mohamed Sazali said the pretzel franchise had submitted several names for a food
product and was awaiting a decision from Jakim’s panel.

In her Facebook posting on Monday, she said the “pretzel dog” name had to be changed following
Jakim’s directive.

She added that following Jakim’s decision, Auntie Anne’s will change its entire menu board before
proceeding with a new application for halal certification.

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ISSUE 3: COOKING OIL STOCK RUNNING OUT – NEW STRAITS TIMES – 26/10/2016

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ISSUE 4: CONSUMER GROUP DEMANDS ACTION OVER PORK BURGER NAMED ‘P. RAMLY’
written by Neda 25/10/2016

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Example of consumerism issues in local newspaper.

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1. List TWO (2) examples of unfair marketing practices. (2m)

2. Define the following terms: (2m)
i. Consumer (3m)
ii. Consumerism
(5m)
3. Describe the following functions of those agencies as below: (5m)
i. Federation of Malaysian Consumers’ Association (FOMCA)
ii. Consumers Association of Penang

4. List FIVE (5) consumer rights in Malaysia. (5m)

5. Explain any TWO (2) issues related to consumerism in Malaysia. (10m)

6. Explain the following factors that influence the development of consumerism: (3m)
i. Ineffective system (3m)
ii. Poor quality of product (3m)
iii. Insufficient information (3m)
iv. Misleading advertisement (3m)
v. Unresponsive marketing institution

7. As a consumer, we should know the basics of consumer rights. Identify FIVE (5) rights of

consumers that we know before making a purchase decision. (20m)

8. Name TWO (2) organizations which are responsible in consumer protection in Malaysia.
(2m)

9. List down FIVE (5) unethical business practices. (5m)

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10. Amirul bought a handphone at a leading store in the city with one-year warranty. After
using it for a month, suddenly the handphone was damaged. He went to the store to get
compensation as promised but he was disappointed because the store did not want to
be responsible for the damage. In your opinion, what are the FIVE (5) rights that can be
claimed by him as a consumer?

(10m)

i. Based on question above, who are those that can help him in this situation. Why?
(3m)