Explain the importance of consumer protection from the point of view of a business.
A business must also lay emphasis of protecting the consumers and adequately satisfying them. This is important because of the following reasons:
1. Long-term Interest of Business: Customer is the foundation of business. Satisfied consumers not only bring repeated sales but also give positive feedback about the product, which help to increase the customer-base of business.
In order to satisfy and retain consumers for long-term, consumer protection is necessary. This facilities long-term profit maximisation of the firm.
2. Business Uses Society’s Resources: Business firms use resources that belong to the society such as manpower, mineral resources, capital, etc. Therefore, it is the responsibility of businesses to convert these resources into useful goods and services for the welfare of society.
3. Social Responsibility: Business organisation makes money by selling their products to consumers. It is the social responsibility of businessman to provide satisfaction to their customers and take care of their interests.
4. Moral Justification: Business exists to serve human beings. It is the moral duty of a businessman to serve their customers well and keep them away from exploitative and unfair trade practices.
Therefore, business must avoid unfair trade practices such as adulteration, misleading advertising, black-marketing, etc.
5. Government Intervention: If a business organisation is engaged in any form of exploitative trade practices, government would interfere and can tarnish the image of the company. Therefore, it is in the interest of business itself, to take care of consumer protection.
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