1. The Consumer Protection Act 68 of 2008
2.5 A Model of Consumer Behaviour in the Market
The main purpose of the Consumer Protection Act is to protect consumers whenever they buy goods and after purchasing those goods. The Act also gives the right to consumers to ask for information before and after the goods have been purchased. The theoretical model of Lamb et al., (2008:67) reveals that consumers‟ actions with regards to purchase behaviour are influenced by three sets of variables: individual factors, social factors and prevailing purchase situations.
Figure 2.2 A model of consumer Behaviour
(Source: adapted from Lamb et al., 2008:68)
The consumer behaviour model describes how consumers make purchase decisions and how they use and dispose of the purchased goods or services. Therefore, knowing and understanding how consumers make purchase decisions can help us to know when and where the law applies in protecting consumers. For example, the law can be applied when the manufacturer advertises a car‟s maintenance fee as free service, while in reality it is not free. In other words, marketers or sellers can change the attitudes and influence consumer buying decisions (Lamb et al., 2008:67). Suppliers or retailers can use same means to change the attitudes and influence consumers buying behaviour decisions.
28 2.5.1 A Model of Consumer Decision-Making Process
Some of the best-known consumer decision-making models were developed in the 1960s and 1970s. Howard developed the first consumer decision-making model in 1963 (Howard, 2005). Howard also developed other model in 1969 and 1990, followed by Blackwell and Miniard‟s model (Engel, Blackwell, and Miniard, 2007). Those consumer decision-making models that are still used today reflect the consumer decision process in terms of the interrelationship of concepts and the flow of activities. The most widely used consumer decision-making theory includes five stages as defined by Mowen and Minor (2006): recognizing problems, searching for solutions, evaluating alternatives, choosing among options, and evaluating the outcomes.
Figure 2.3 A Model of Decision-Making Process
Source: Adapted from (Schiffman and Kanuk, 1997; Solomon, 1996; and Lamb et al., 2008)
Consumer Decision-Making is defined as the behaviour patterns of consumers that precede, determine, and follow the decision making process for the acquisition of need satisfying products, ideas or services. During the consumer decision-making process, not only do consumers make decisions regarding which brand options to choose but they also decide what quantity of the good to purchase. Consumers make decisions in order to reach their goals, which include making the best choice among alternative possibilities, reducing the effort in making the decision, and minimizing negative emotions (Sulistio, 2011:1). A brief introduction is outlined below, particularly, on how the CPA can be applied in each stage of the consumer decision-making process.
29 Problem Recognition: in this 1st stage, the consumer buying process begins when the buyer recognizes a need or problem (Lamb et al., 2008:69). For example, Linda bought a Laptop from a retail shop; she later recognized a problem that her Laptop is not performing as well as she thought it should. This is one of the problems that consumers encounter all the time. Linda cannot fix the problem herself, in other words, the manufacturer or the retailer must be involved, from which the laptop was bought. Most consumers find difficulties when returning faulty products to the shops they bought them from and, this is where the Consumer Protection Act applies.
Information Search: the 2nd stage of the model state that, „when a consumer discovers a problem, he/she is likely to search for more information‟ (Lamb et al., 2008:70-71). In our example, Linda may pay more attention to product information of a personal computer. She becomes more attentive to computer features, computers purchased by her friends or family members, and peer conversations about computers. Or, she may more actively seek information by visiting retail computer shops, talking to friends, or reading computer magazines. As Linda proceeds to search for more information, she can also seek for information about legal advice if the fault of the computer was with the retailer at the time she bought the Laptop.
Evaluation and Selection of Alternatives: in stage 3, the consumer tries to solve the problem and ultimately satisfy his/her need. After collecting information and compiling an evoked set of alternative products, the consumer is ready to make the decision. In other words, the consumer will use the information stored in memory and make a judgments either to buy the product or not (Lamb et al., 2008:70-71). In our example, Linda can use information stored to make her judgment. She can either choose or select a Legal law that protect consumers, or seek an agent to stand on her behalf.
30 Purchase: what happens in stage 4 is that, once the consumer is satisfied with the information gathered, he/she moves on to the process of buying the product. In our example, Linda may take a final decision on whether to take the retail shop (where she bought the Computer) to court or to buy a new Laptop from the another shop or choose another new brand name. Linda can also choose to hire private Legal Institutions such as Scorpions or Legal Wise for her case.
Post-purchase Evaluation: stage 5 state that, when buying products, consumers expect certain outcomes or benefits to accrue from the purchase. How well these expectations are met determines whether the consumer is satisfied or dissatisfied with the purchase. Dissatisfied consumers rely on word-of-mouth to reduce cognitive dissonance by letting friends and family members know they are displeased (Lamb et al., 2008:72). From our example, Linda is one of the extremely dissatisfied consumers, and according to the ambit of section 55 of the CPA, a consumer has the right to return faulty goods and get the seller to repair it, replace it or get a full refund if his/her expectations have not been met. Therefore, Linda has the right to have her Laptop repaired or replaced, be refunded or to take legal action.
In conclusion, the story of Linda can also give us another overview of how the market should be functioning legally, particularly, when consumers are not satisfied with the product or services offered. Therefore, a well-functioning market would include:
competition in product quality, information sharing, protection of consumers, and/or involving government and other independent bodies that will improve the functioning of the market. Below is a framework for a well-functioning market which includes government, retailers or suppliers, consumers and information sharing.
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