ARTICLE ON "CELEBRITY ADVERTISING AND ITS LIABILITY: HOW FAR IS IT CHECKED?"

   CELEBRITY ADVERTISING AND ITS LIABILITY: HOW FAR IS IT CHECKED?

Advertising is a form of marketing communication used to promote or sell something, usually a business's product or service. In 2015, the world spent an estimate of US$592.43 billion on advertising (CARAT, 2015). There are different types of mass media such as newspaper, magazines, television advertisement, radio advertisement, outdoor advertising or direct mail; or new media such as blogs, websites or text messages which displays advertisements. Commercial advertisements seek to generate increased consumption of their products or services through "branding," which associates a product name or image with certain qualities in the minds of consumers. Celebrity advertising is one of the forms of commercial advertisements which influence large number of consumers.

Celebrity Advertising is using a famous person's image to sell products or services by focusing on the person's money, popularity, or fame to promote the products or services. If the famous person agrees to allow his or her image to be used, it is termed a celebrity endorsement. The promotion might be through formal advertisements in different media, or it might occur through the famous person displaying the products by using them or wearing them. The consumers are influenced by these or listening to these advertisements and try to buy the products endorsed by them.

In a country like India, where celebrities are treated like idols by many people, celebrity advertising is playing a major role in impacting consumer minds and buying that endorsed product though they do not require it. With this the manufacturers are making lots of cash by following the malpractices like misleading advertisements, charging high price for the products endorsed by the celebrities, making false statements about the product etc.

The celebrities are also not taking the responsibility or initiative to stop participating in endorsing advertisements. Though some products are harmful to consumers, the celebrities are endorsing them. And it can be understood that celebrities endorsing the product hardly knows anything about it. There are many products which include food items, beverages, jewellery, clothing, footwear, detergents, electronic gadgets, interior products, websites and many more which are endorsed by celebrities now-a-days. Some of the examples of products which are endorsed by the celebrities are Kalyan Jewellery products by Amitabh Bacchan, Boost by Dhoni and Sachin, Maagi Noodles by Madhuri Dixit etc.

Endorsements are a lucrative line of income for celebrities, given how nearly every second brand uses a famous face to induce people to buy it. According to a 2013 paper authored by IIM-A faculty, the celebrity endorsement business was worth around Rs 1,000 crore in 2010.

Shah Rukh Khan, the most prolific brand ambassador, earned a cool Rs 202 crore last year (as per the 2014 Forbes celebrity list) from endorsing as many as 22 brands. Dixit-Nene, earns much less. Marketers say, she charges around Rs 50 lakh per day of shoot. Amitabh Bachchan demands anywhere from Rs 2-3 crore, they say, which is also how much star cricketers like Virat Kohli can expect to get paid. The amount they earn can be a personal issue but they have to take some social responsibility to study about a product before endorsing it and they should also not endorse the product if it is found not to be safe for the consumers.

In recent times, there were lot of controversies that Maagi noodles is containing harmful chemicals like high amount of monosodium glutamate (MSG) and lead and hence its sale has been stopped. But the famous celebrity Madhuri Dixit claims that it is nutritious and consumers tend to believe her. The debate surrounding Maggi noodles has raised several questions relating to the hygiene of the food we eat but we also need to look at the ethics of advertisement and the role of brand ambassadors. The entire length of issues calls for an objective examination, not only from legalistic angle but from socio-ethical angle as well.

The Food Safety and Standards Authority of India (FSSAI), established under the Food Safety and Standards Act (FSSA), 2006, is instructed to ensure that the food people consume is safe and nutritious and for that it has to lay down some scientific evidences and standards for articles of food and regulate manufacturing, processing, distribution, sale and import of food. In the prevailing scenario of Maagi Noodles controversy, with the adulteration being the mandate of the day, it is difficult to guarantee for the purity of any food article.

There is no contradiction to the fact that lies are being sold; most of the advertisements are misleading and film stars and sportspersons leave credibility by endorsing the products. There are recent arguments by the educators and consumer organisations to legally take action on the celebrities endorsing products in wrong means. Ashim Sanyal of Voice, a consumer activism body and a member of the Central Consumer Protection Council, says the proposed amendments to the Consumer Protection Act, currently with the inter-ministerial committee and due to be introduced in the next parliamentary session, have specific provisions to hold celebrities liable for misleading advertisements.

There are some cases in recent times where the celebrities were issued legal notices with regard to their misleading advertisements. For example, the Uttar Pradesh Food and Drug Administration’s decided to recall packets of Maggi Noodles in 2015. Madhuri Dixit, who endorses Maggi’s brand of ‘nutritious’ oats noodles, was in trouble. An FIR was filed against Genelia D’Souza for allegedly making false promises through advertisments and brochures for a real estate company in 2012. The Home Trade scam of 2002 had the celebrity endorsement of three big celebrities, Sachin Tendulkar, Hrithik Roshan and Shah Rukh Khan. Having created not a single product, the company made away with thousands of crore rupees of investor money, and celebrity-endorsed brand building was a crucial part of their operation. Several insurance advertisements alleged to have been making misleading claims in the past, and several insurance brands have celebrities like Irrfan Khan and Amitabh Bachchan endorse them.

It is not just the world of high-flying celebrities endorsing mega-brands. Activists have also been speaking out against advertisments for sauna-belts, medicines, Hanuman-chalisa yantra and gem-stones on TV screens.

In a bid to make celebrity endorsers accountable for misleading advertisements and endorsements, a parliamentary committee in 2015 has recommended a maximum punishment for five years' jail and Rs 50 lakh fine. If the proposed recommendations are incorporated in the consumer protection bill, brand ambassadors will have to be more careful when signing a contract with private players. With this provision, the consumer may soon be able to claim compensation not only from the advertisers, but from the celebrities endorsing the product.

In February 2015, The Central Consumer Protection Council (CCPC), under the chairmanship of minister K V Thomas, decided to set up a sub-committee to suggest strategies to deal with such advertisers. Among the concerns raised was marketing of products by celebrities. The committee has recommended a maximum punishment for five years' jail and Rs 50 lakh fine. If the proposed recommendations are incorporated in the consumer protection bill, brand ambassadors will have to be more careful when signing a contract with private players. With this provision, the consumer may soon be able to claim compensation not only from the advertisers, but from the celebrities endorsing the product.

The rationale behind this decision of the CPCC was that celebrities had considerable influence over consumer choice, and that there must me some form of liability for the endorsements being made. As Devika Agarwal points out in this post, 50% of advertisements in India are celebrity endorsements. For a country which reveres and adores its film stars and popular personalities, celebrity endorsements could entirely change the consumer’s likes and dislikes. 

At the beginning, a notice to film stars for faulty products might look like a big joke as they can easily bribe or pay the fine and get out of the issue. But misrepresentation of products, especially in the food sector, is a serious issue, and not as silly as many would like to believe. Hence strict enforcements have to be laid with regard to this issue and the government should see that no one who does false and illegal claims in advertising products do not escape from the legal penalties. 

References

Endorsers face jail for misleading ads. Times of India. New Delhi. Apr 13, 2016. Link: http://timesofindia.indiatimes.com/business/india-business/Endorsers-face-jail-for-misleading-ads/articleshow/51803297.cms

Celebrity endorsement liability is no laughing matter, requires serious thought. The News Minute. Saturday, May 30, 2015. Link: http://www.thenewsminute.com/article/celebrity-endorsement-liability-no-laughing-matter-requires-serious-thought

·         Dipak Kumar Dash. Celebrities endorsing products also liable for misleading advertisements: Panel. Times of India. New Delhi. Feb 4, 2014. Link: http://timesofindia.indiatimes.com/india/Celebrities-endorsing-products-also-liable-for-misleading-advertisements-Panel/articleshow/29834388.cms

·         http://www.dnaindia.com/india/report-celebrities-liable-for-misleading-ads-2092445

·         http://www.businessdictionary.com/definition/celebrity-advertising.html

·         http://www.carat.com/au/en/news-views/carat-predicts-positive-outlook-in-2016-with-global-growth-of-plus47/

·         https://en.wikipedia.org/wiki/Advertising


 
      By:

      M. Milcah Paul, Research Scholar, Dept. of RMCS, College of Home Science, Saifabad, Hyderabad

      Dr. D. Ratna Kumari, Professor, Dept. of RMCS, College of Home Science, Saifabad, Hyderabad











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ARTICLE ON " ANALYSIS ON CHANGING CONSUMPTION PATTERNS IN INDIA AND TESTING THE SIMILARITIES WITH ENGEL’S LAW OF CONSUMPTION"

  ANALYSIS ON CHANGING CONSUMPTION PATTERNS IN INDIA AND TESTING THE SIMILARITIES WITH ENGEL’S LAW OF CONSUMPTION

Consumption is an essential part of human life. Consumption is seen right from the ancient period in all the parts of the world. Humans buy, eat, use and take advantages of different things. But as the time progressed, the consumption pattern of people changed and is creating a threat for our nature and environment. As the time progressed, people are becoming aware of the negative impacts on environment due to their consumption patterns and hence are trying to use a sustainable development approach.

Consumer patterns change for both micro and macro reasons. At the micro level, changes are attributable to individual consumer's changing tastes. At the macro level, such changes occur because of structural shifts in the environment. This affects our behaviour, lifestyle, values and needs which implicate the change of our consumption patterns, which can vary between and within different countries and cultures based on specific sets of value-systems (Karwala, 2005).

Consumption patterns are one of the most important drivers of development patterns in the industrialised and developing countries like India. Consumption patterns of Indian consumers are being changed rapidly and tremendously. Industrialisation, easy purchase and investment options given by shopkeepers, increase in income levels, lifestyle changes, increased need for societal recognition, increase in access to new technologies are some of the factors which are contributing to changes in the consumption patterns.

An economic theory (Engel’s law of Consumption) introduced in 1857 by Ernst Engel talks about the consumptions patterns at household level. This law gives three statements:

Statement 1: As income increases, the proportion of income spent on food decreases though the actual amount of money spent on food increases. This law does not suggest that money spent on food falls with increase in income, but instead consumers increase their expenditures for food products (in % terms) less than their increases in income.

Statement 2: The proportion spent on personal expenses, cultural wants, recreation, education, health etc. increases as income increases.

Statement 3: The proportion spent on shelter, clothing, lighting and fuel remains practically unchanged whatever the income may be.

For example, a family spends 12,500 (25%) of their income on food at an income level of 50,000. If their income increases to 1,00,000, it is not likely that they will spend 25,000 (25%) on food, but will spend a lesser percentage while increasing spending in other areas. 

The aim of this article is to assess the fit between a secondary data available on “Share of each sector in Household Total Consumption, by Consumption Segment (%)” and assumptions of Engel’s law of consumption. Following are the statistics which gives information about the secondary data gathered:

Source: World Bank Report on Share of each sector in Household Total Consumption, by Consumption Segment (%), 2010

The results comprised of the consumption patterns for different products in (a) General population in India comprising of all the income levels (b) Lowest income group (c) Low income group (d) Middle income group and (e) Higher income group. The products included food and beverages, Housing, transport, education, personal care, financial services, clothing and footwear, energy, water utility, health, ICT and other items/ facilities.

The results for the general population showed that majority of the income was spent for purchase of food and beverages, followed by satisfying housing needs, purchasing other miscellaneous items/ facilities and for fulfilling energy requirements. A little lesser percentage of income was spent for transport, followed by health expenses, clothing and footwear, education, ICT and personal care.

The result for the lowest income population showed that majority of the income was spent for purchase of food and beverages, followed by purchase of other miscellaneous items/ facilities, fulfilling energy requirements, purchasing clothing and footwear and satisfying housing needs. A little lesser percentage of income was spent for health expenses, transport, education, personal care and ICT.

It means that in lowest income group levels, families try to spend maximum amount of income earned for their basic survival i.e., for food. Later other basic needs for living like clothing, energy requirements and other miscellaneous needs are satisfied. A there may be a less amount of income left out for other needs, the amount spend for healthcare and education are also neglected in lowest income family. Hence, many studies say that people living with less income are uneducated and die easily as they do not have much amount for their health care. These results obtained support the statements given in Engels law of consumption.

The result for the low income population showed that majority of the income was spent for purchase of food and beverages, followed by satisfying housing needs, purchase of other miscellaneous items/ facilities, transport, education, fulfilling energy requirements, purchase of clothing and footwear and healthcare. A little lesser percentage of income was spent personal care and ICT.

The results showed that there are slight changes in consumption levels for different products between lowest and lower income groups. Even in lower income group families, maximum amount of income earned was spent for their basic survival i.e., for food. Later other basic needs for living like housing, transport, education, healthcare, clothing, energy requirements and other miscellaneous needs are satisfied. We can see that in low income group allocation of income for transport, healthcare and education increased. But the income allocation for fulfilling energy requirements decreased. So as the standard of living increased people are trying to understand the importance of healthcare and education.

These results obtained partially supported the statements given in Engels law of consumption which says that as income increases, people spend more on education, health etc. But the statement which says that though income increases, expenses on housing, clothing and energy may remain the same is not satisfied as the results in this study showed that amount of expenses spent on clothing and energy decreased when compared to lowest income group. The results also showed that the amount spent on housing expenses increased in the lower income group compared to the lowest income group.

The results showed that there are changes in consumption levels for different products among lowest, lower and middle income groups. In middle income group families, majority of the amount of income earned was housing needs, followed by purchase of foods and beverages, other miscellaneous needs, transport, health and education. Later other needs like energy demands, ICT, clothing and personal care are satisfied. We can see that in middle income group allocation of income for housing needs increased tremendously compared to other earlier income groups. The amount spent for Education, and transport increased and the amount spent on education and energy demands decreased. It does not mean that middle income people are uneducated or does not give importance to education but just the percentage allocation is decreased. The use of ICT is maximum among all the groups.

These results obtained support the statement given in Engels law of consumption which says that as income increases, the proportion of income spent on food decreases though the actual amount of money spent on food increases. The statement which says that though income increases, expenses on education is increased is also satisfied. But the statement which says that the proportion spent on housing may not change if income increases is not on par with the results.

The results showed that there are changes in consumption levels for different products between all the other income groups compared to higher income group. In higher income group families, maximum amount of income earned was spent for housing and transport. As the income increased people may try to spend more on luxurious homes and costly transport facilities to save time. Later other miscellaneous and food needs are satisfied. Small amount of income is allotted to education, healthcare, clothing, energy requirements, ICT and personal care.

These results obtained partially supported the statements given in Engels law of consumption which says about the amount spend on food as income increases. But the statement which says that as income increases, expenses on education and health is not supported by the results. The result regarding the case of amount allocation for housing is also opposite to the statement given in Engels law.

The observations show that in almost all the income groups personal care is not given that much of care. The importance given to ICT also is not given much importance. As income increased the use of ICT also increased. The amount allocation for ICT is more in middle income group families. This may be due to the relation between education and use of ICT. As middle income group allocate good amount of income to education, may be the use of ICT for education purposes might be more.

This article aimed to study the Consumption patterns in India with relation to Engel’s law of consumption showed some similarities between the results and the statements of the law. The results may not have matched completely with the law as the law was given in much time earlier from now and the consumption patterns tremendously changed from that time to the present times. But the statement regarding the food expenses was strongly supported in all the income groups. Further analysis can also be done to compare with results of secondary data with other economic models.

References:

·   Karwala, Sebastian. 2005. Changing Consumption Patterns – Sustainable Management. Link: http://mentoring.com.pl/Changing_consumption_patterns.pdf

· Shuani. 2010. Engle’s Laws of Consumption – Explained! Link : http://www.yourarticlelibrary.com/economics/engles-laws-of-consumption-explained/47913/

·      World Bank Report. 2010. Share of each sector in Household Total Consumption, by Consumption Segment (%). Link: http://datatopics.worldbank.org/consumption/market

·         http://www.businessdictionary.com/definition/Engel-s-Law.html

·         https://faculty.washington.edu/krumme/resources/engel.html

·         http://www.investopedia.com/terms/e/engels-law.asp

·         https://en.wikipedia.org/wiki/Engel%27s_law

By: 

M, Milcah Paul , Research Scholar, Dept. of RMCS, College of Home Science, Saifabad, Hyderabad

Dr. D. Ratna Kumari, Professor, Dept. of RMCS, College of Home Science, Saifabad, Hyderabad

Role of RMCS Dept., College of Home Science, PJTSAU in Protecting Consumers

Students and staff campaigning the theme for the year “Antibiotics off the Menu”

Celebration of World Consumer Rights Day - 2016 by Dept. of RMCS, College of Home Science, Saifabad, Hyderabad

Information Related to WCRD-2016 Theme

World Consumer's Right Day 2016: Antibiotics Off the Menu

WCRD 2016: Antibiotics off the Menu

The theme for World Consumer Rights Day 2016 will be “antibiotics off the menu” and Consumers International will be campaigning with Members around the world for fast food companies to make a global commitment to stop the sale of meat raised with the routine use of antibiotics important to human medicine.

Antibiotic resistance is rising to dangerously high levels in all parts of the world. The World Health Organisation has warned that, without urgent action, we are heading for a post-antibiotic era, in which important medicines stop working and common infections and minor injuries can once again kill.

Growing antibiotic resistance is driven by over use of antibiotics.  Around half of the antibiotics produced globally are used in agriculture, with much of this being used to promote faster growth and to prevent, rather than treat, disease.

Despite worldwide concern about the overuse of antibiotics, their use in agriculture is due to increase by two thirds by 2030: from 63,200 tons in 2010, to 105,600 tons in 2030.

Our infographic shows how the use of antibiotics in farming is threatening to make some common ailments untreatable.

Consumers have an important role to play in persuading food companies to make the changes that are needed to stop this global public health threat and protect our medicines for the future.

Antibiotic resistance is developing and spreading at a rate that cannot be contained by the development of new drugs.

If measures are not taken urgently to reduce global consumption of antibiotics, we could face a return to an era where simple infections can kill. 

The widespread practice of routinely dosing farm animals with antibiotics is contributing to this threat.

Around half of the antibiotics produced globally are used in agriculture, with much of this being used to promote faster growth and to prevent, rather than treat, disease.