A PROJECT REPORT ON Study of Surrogate Advertising With Reference To Indian Market SUBMITTED BY SHRADDHA TANNA SEAT NO.3403 T.Y.B.M.

FOR THE DEGREE OF BACHELOR OF MANAGEMENT STUDIES

UNDER THE GUDIANCE OF PROF. APARNA JAIN

S.K. SOMAIYA OF ARTS, SCIENCE, AND COMMERCE VIDHYA VIHAR MUMBAI 400077

ACADAMIC YEAR 2008-2009

Study of Surrogate Advertising With Reference To Indian Market

ACKNOWLEDGMENT
Many people have influenced the shape and content of this project, and many supported us through it and before going on with project study, I would like to extend my sincere gratitude to a few people without whom this project just wouldnt have been possible. First and foremost I would like to thanks my project guide Mrs. Aparna Jain for having spent considerable time and providing very useful insights into my topic of buzz marketing.

I would also like to thank Principal Ms. Parvati Venkatesh for giving me the opportunity to do the project on this topic and also sincerely appreciate the help provided by our collage S.K Somaiya for availing good library and internet facilities. I also would like to thank our parents and seniors who have helped and encouraged us throughout the working of the project.

It was their constant support and valuable help and guidance that have made this project possible. They have always rendered useful suggestions in modifying this project to be a successful one. At the end I would like to thank almighty god without whose support this wouldnt had been possible.

Executive Summary
A surrogate advertisements is one in which a different product is promoted using an already established brand name. Such advertisements or sponsorships help in contribute to brand recall. The different product shown in the advertisement is called the Surrogate. It could either resemble the original product or could be a different product altogether, but using the established brand of the original product. In India, the trend of surrogate advertisement gathered momentum with the Cable TV Network Regulation Act, which prohibits tobacco and liquor advertisements on TV channels. Due to the ban, liquor companies focused more on promotions for brand building. The ban on advertising of alcohol beverage products has severely handicapped communication with consumers. Companies with liquor brands are not advertising liquor products; instead they have extended the equity of their brands into other fields. However as the TV was the most effective medium of advertising, surrogate advertising on TV became popular. In the mean time, some producers entered new segments under the liquor brand or advertised these products under liquor brand. The surrogate advertisements from liquor companies intensified further through sponsorships of movies, music shows, and other programs and attracting youth. In late 2001, the broadcasters began airing socially responsible advertisements sponsored by liquor companies. By early 2002, surrogate advertising of liquor brands had intensified like never before on satellite TV channels.

Index
Sr.No.: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. Topics What is Advertising ASCI Introduction Definition and Surrogate Advertisements Advent of Surrogate Advertisements Market Survey Data Analysis Findings Indian Liquor Industry Future of Liquor industry Banning Liquor ads Influence and affect of alcohol advertising The Corporate Standpoint (Surrogate Brands) Beyond Surrogate Advertising Questionnaire Scenario of Tobacco and Alcohol Industry Conclusion Biblography Page nos.: 6 8 10 11 15 20 25 34 35 38 41 43 49 53 55 57 62 65

What is Advertising?
Today, we all are influenced by advertising. Advertising does not force us to make particular choices. It persuades us to do so. Over the years, advertising has been given various definitions by different scholars. Etymologically, the word 'advertising' is derived from the latin word ' ad vetere' which means 'to draw attention'. It is all about drawing a person's attention to buy a product or seek for service. According to Hart and O'Connor in Eluwa (1999) defines advertising as the action of calling something to the attention of the public especially by paid announcement". From the above advertising. It is clear that Hart and O'Connor are saying that advertising is all about the public attention drawn by the paid announcement". This definition is similar to Frank Jefkins definitions cited in Eluwa (1999) as the means by which we make known what we have to sell or what we want to buy. But it is limited from the angle of the media of communication. Advertising is paid communication through a non-personal medium in which the sponsor is identified and the message is controlled. Variations include publicity, public relations, product placement, sponsorship, underwriting, and sales promotion. Every major medium is used to deliver these messages: television, radio, movies, magazines, newspapers, the internet, and billboards. Advertisements can also be seen on the seats of grocery carts, on the walls of an airport walkway, and the sides of buses, or heard in telephone hold messages or instore PA systems nearly anywhere a visual or audible communication can be placed.

Advertising clients are predominantly, but not exclusively, for-profit corporations seeking to increase demand for their products or services. Other organizations that frequently spend large sums of money on advertising include political campaigns, interest groups, religion-supporting organizations, and the military of the United States. Other non-profit organizations are not typical advertising clients, and rely upon free channels, such as public service announcements. The advertisement industry is large and growing. Hence, it is known as Rat Race. Regulation: There have been increasing efforts to protect the public interest by regulating the content and the reach of advertising. Some examples are the ban on television tobacco advertising imposed in many countries, and the total ban on advertising to children under twelve.

Advertising Standards Council of India (ASCI)

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Advertising Standards Council of India is a self regulatory voluntary organization of the advertising industry. The Role and Functioning of the ASCI & its CCC [Consumers Complaint Council] in dealing with Complaints received from Consumers and Industry, against Advertisements which are considered as False, Misleading, Indecent, Illegal, leading to Unsafe practices, or Unfair to competition, and consequently in contravention of the ASCI Code for Self-Regulation in Advertising. Most of the Self-Regulation Organizations around the world base their work on the Codes prepared and published by the International Chamber of Commerce (ICC).The ASCI in India is no exception. The ICC is the world business organization, the only representative body that speaks with authority on behalf of enterprises from all sectors in every part of the world. Self Regulation in advertising has been pursued and monitored in India in an inexpensive and expeditious manner for the last 20 years by the Advertising Standards Council of India (ASCI), a voluntary and non-profit organization set up by a group of advertisers, advertising agencies, media etc., way back in 1985, with the objective of ensuring that all advertising should be legal, decent, honest and truthful along with a sense of social responsibility to the consumer and to the rules of fair competition ASCI has one overarching goal: to maintain and enhance the public's confidence in advertising. ASCI seeks to ensure that advertisements conform to its Code for SelfRegulation which requires advertisements to be: Truthful and fair to consumers and competitors Within the bounds of generally accepted standards of public decency and propriety

Not used indiscriminately for the promotion of products, hazardous or harmful to society or to individuals particularly minors, to a degree unacceptable to society at large.

ASCI propagates its Code and a sense of responsibility for its observance amongst advertisers, advertising agencies and others connected with the creation of advertisements, and the media. ASCI encourages the public to COMPLAIN ( * ) against advertisements with which they may be unhappy for any reason and ensures that each complaint receives a prompt and objective consideration by an impartial committee Consumer Complaints Council (CCC) which takes into account the view point of the advertiser, and an appropriate decision is communicated to all concerned. ASCI endeavours to achieve compliance with its decisions through reasoned persuasion and the power of public opinion. ASCIs role has been acclaimed by various agencies including the Government. However, it lacked the force of legal recognition. The Government of India has at last, taken note of this and by one stroke on 2nd August 2006 vide a notification in The Gazette of India: Extraordinary {Part II sec. 3(i)}, made sure that at least as far as TV Commercials go, they abide by the ASCI code. The amendment made in Cable Television Networks (Amendment) Rules, 2006 now states: "Sec 7 (2) No advertisement which violates the Code for Self-Regulation in Advertising, as adopted by the Advertising Standards Council of India (ASCI), Mumbai for public exhibition in India, from time to time, shall be carried in the cable service".

Introduction:

Product advertising for liquor and cigarette companies is banned in the country since 1995 by Cable Television Network (Regulation) Act. According to Rule 7 (2) of the Act, no broadcaster is permitted to show advertisement which promotes directly or indirectly promotion, sale or consumption of cigarettes, tobacco products, wine, alcohol, liquor or other intoxicants, infant milk substitution, feeding bottle or infant food. This ban is now likely to be extended to advertising of extended brands. In June 2002, the Indian Information and Broadcasting (I&B) Ministry served notices to leading television broadcasters to ban the telecast of two surrogate ads of liquor brands McDowell No.1 and Gilbeys Green Label. The Ministry also put some other brands ---Smirnoff Vodka, Haywards 5000, Royal Challenge Whiskey and kingfisher beer on a watch list. The surrogates used by these advertisements ranged from audiocassettes, CDs, perfumes to golf accessories and mineral water.

A market survey in 2001 revealed that advertising has a direct influence on the consumption habits of 431 million people in India and an indirect impact on 275 million `aspirants' from the lower income group. Considering this and realizing that nearly 50 per cent of the television owners have access to cable channels, there is no doubt that the hidden call for alcohol consumption behind the surrogate advertisements is not escaping the eyes of viewers in the world's fourth highest liquor-consuming country. The very purpose of banning liquor advertisements is defeated by surrogate advertising promotion.

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Definition of Surrogate
(Noun. Someone who takes the place of another person.)

Surrogate is derived from the Latin surrogare, which means "to substitute." Surrogate can be used as both a noun and an adjective to refer to someone who takes the place of someone else.

How is surrogate advertising defined?

The dictionary meaning of the word surrogate is substitute. But no one in the industry is clear about the definition of surrogate advertising.

According to some, surrogate advertising means advertising the namesake of the main brand. Others such as Pramod Krishna, president, Confederation of Indian Alcoholic Beverages Companies (CIABC), refused to accept the term surrogate advertising. He prefers to categorize them as advertising for brand extensions. Santosh Desai, chief operating officer of Future Brands, offers his take: When you advertise one brand in the guise of the main brand, it is called surrogate advertising. As far as advertising agencies are concerned, whatever is manufactured can be advertised. What shouldn't be advertised is something for the government as a political discipline to decide, there are any advertising campaigns that need to be censored

Surrogate Advertisements:
Surrogate advertising is when an advertisement has the logo or brand of another company advertised within it. An example would be a product that shows in the commercial retailer outlets that offer their product in stores.

A surrogate advertisements is one in which a different product is promoted using an already established brand name. Such advertisements or sponsorships help in

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contribute to brand recall. The different product shown in the advertisement is called the Surrogate. It could either resemble the original product or could be a different product altogether, but using the established brand of the original product. The sponsoring of sports/cultural/leisure events and activities also falls under the purview of surrogate advertising. In India, the trend of surrogate advertisement gathered momentum with the Cable TV Network Regulation Act, which prohibits tobacco and liquor advertisements on TV channels. The liquor industry has intentionally blurred the line between products, advertising `old wine' in a `new bottle,' only this time with a soft-drink label. By August 2002, the I&B Ministry had banned 12 advertisements and leading satellite TV channels including Zee, Sony, STAR and Aaj Tak were issued show cause notices to explain their rationale behind carrying surrogate liquor advertisements. Answering to the notices, Zee and STAR stopped telecasting the advertisements, followed soon by Aaj Tak and Sony. In addition, the I&B Ministry hired a private monitoring agency to keep a watch on all the advertisements for violation of the Act. These developments led to heated debates over the issue of surrogate advertising by liquor companies being allowed on national media. Though the companies involved came out strongly against the I&B Ministrys decision, they seemed to have no other choice, given the highly regulated nature of the liquor business. Analyst remarked that there was lot of hypocrisy underlying the government policy. They said on the one hand they allow these socially bad products to be manufactured and sold and then they deny the manufacturers the right to propagate

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knowledge of their products in order to drive sales. If some thing is bad and cannot be advertised, why allow it to be sold at all? Liquor producers spent heavily on advertising on the electronic media, particularly TV. Though the broadcasters were bound by the 30 yrs old advertising code, which stated that No advertisements shall be permitted which relates to or promotes cigarettes and tobacco products, liquor, wines and other intoxicants, the telecast of such product continued blatantly over the years. More over the satellite channels garnered about 50% of their revenue from liquor and cigarettes advertisements. In the peak seasoned it gets almost doubled. Due to the ban, liquor companies focused more on promotions for brand building. They started sponsoring events that projected the glamour of the brands, like track racing, car rallies etc. for instance Shaw Wallace Co. one of the leading liquor companies in India, conducted the Royal Challenge Invitation Golf tournament, which became an annual event. Some companies also promoted their product through corporate advertising, distributing free gifts like Caps and TShirts with the brand name and using glow-signs outside the retail outlets. The ban on advertising of alcohol beverage products has severely handicapped communication with consumers. The industry is naturally compelled to make the best use of the channels and media of communications still open to it. Companies with liquor brands are not advertising liquor products; instead they have extended the equity of their brands into other fields. Over a period of time these products have become independent businesses for companies. However as the TV was the most effective medium of advertising, surrogate advertising on TV became popular. The liquor producers seemed to have ensured that the ban was only on the paper.

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In the mean time, some producers entered new segments under the liquor brand or advertised these products under liquor brand. Most of the liquor producers entered into packaged water segment, such as Kingfisher Mineral water. McDowell used surrogate advertising by using its mineral water and soda brands, which generated additional revenues for the company. In the early 2001, SWC started marketing its range of golf accessories under the liquor brand Royal Challenge. It also announced that Indias flagship Golfing Event the Indian open would be sponsored by the company till 2006. The surrogate advertisements from liquor companies intensified further through sponsorships of movies, music shows, and other programs and attracting youth. For instance, Seagrams Royal Stag was promoted by sponsoring movie related activities and Indian pop music using the banner Royal stag Mega Movies and Royal stag Mega Music. In late 2001, the broadcasters began airing socially responsible advertisements sponsored by liquor companies. By early 2002, surrogate advertising of liquor brands had intensified like never before on satellite TV channels. These advertisements attracted criticism from various people. There were numerous other advertisements selling music cassettes, CDs, water, clothing, fashion accessories and sports goods many of them accused of being sexually provocative and offensive. (Exhibit 1)

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ADVENT OF SURROGATE ADVERTISEMENTS

As a reaction to the directive of Government, the liquor & tobacco majors sought other ways of endorsing their products. They have found an alternative path of advertising through which they can keep on reminding their liquor brands to their customers. They have introduced various other products with the same brand name. Launching new products with common brand name is known as brand extension, which can be carried out for related products (eg: Tata Salt and Tata Tea) or unrelated products (eg: Tata Tea and Tata Indica). Prima facie, there is nothing wrong with brand extension. The problem occurs when brand extension is carried out in response to the ban on advertisement of one product category. In this case, the companies launch other products with the same brand name for the purpose of reminding their old customers. Heavy advertising is done so that the customers do not forget their liquor & tobacco brands, for which advertisements are banned. The advertisements for such new products are placed under the category of "Surrogate Advertisements". Their only objective is to compensate the losses arising out of the ban on advertisements of one particular product (i.e. liquor). According to dictionary - surrogate means substitute. Many of us have come across this word in connection with surrogate motherhood. This time it has come in a new avataar - "Surrogate Advertisement". This is a loophole challenging the Government's action. However, the companies can claim that the order is being implemented and advertisements of liquor are banned, but the objective of the Government behind imposing the ban is not fulfilled. It's a new weapon of Proxy War

Exhibit-1

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The Advertising Standards Council of India (ASCI) has clarified that as per its code, the mere use of a brand name or company name that may also be applied to a product whose advertising is restricted or prohibited is not reason to find the advertisement objectionable provided the advertisement is not objectionable and the product is produced and distributed in reasonable quantities and the objectionable advertisement does not contain direct or indirect cues for the product that which is not allowed to be advertised. However the analyst opined that the ban could turn out to be advantages for the domestic players. In March 2001, as per the commitment to the WTO agreement, MNCs would have an unrestricted license to sell their products. After the ban, these MNCs would not have access to the quickest and most effective form of advertising --- the TV. Some analyst argued that the ban would not affect the established domestic players severely. It would only affect the new launches and new brand building of these companies.The ban was also expected to improve the margins for these players. The latest television ad for AC Black Apple Juice epitomizes so many things that are wrong with surrogate advertising in India. Most of the surrogate advertising is done pretty blatantly with the harmless product being nothing more than a front for advertising the harmful brand. So you have various liquor/cigarette manufacturers resorting to ingenuous ways to peddle their wares. Of course there are a very few brands which start off as a surrogate brand, but over a period of time actually become full-fledged brands in themselves. The Wills Sport clothing line from the manufacturers of Wills cigarettes is one of those rare cases.But on the whole, surrogate advertising is dedicated towards using an insignificant, harmless product to increase/maintain awareness for their primary harmful brand. And thats not an easy task. For instance, how do you portray the

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essence of a whiskey or vodka or a cigarette using a bottle of bottled water or a pack of apple juice? Similarly "HUM tum or mera Bagpiper". This Bagpiper club soda advertisement, featuring cine celebrities, is similar to the earlier one for Bagpiper whisky. The advertisement comes with the same music and punch line as the one for the popular liquor brand telecast before the ban on liquor advertisements. Not easy. And guess who/what suffers when faced with this quandary? Consumers - because we have to put up with the lameass, stupid advertising thats designed to sell booze/ciggies but pretends to be all about water or apple juice! Its like everyone knows whats going on - the manufacturers know what the real reason for the ad is, the consumers know whats really been advertised, and the government knows that too. So why not either (i) do away with this wholesale scam and just let them advertise all their stuff, or (ii) ban such surrogate advertising? Advertising - because ad agencies have to come up with silly ads based on briefs from clients who are not interested in the surrogate brand, but the primary brand. I agree some might consider it a worthy challenge to do something like this, but from what Ive seen of surrogate advertising in India the output is pretty lame. Surrogate advertisements are not only misleading, but also false and dishonest in many cases. With surrogate advertising so widespread, this is the moment to tackle the problem head-on. There should be stringent regulatory measures to curb the practice, such as: i) Making transparent laws banning surrogate advertisements for different products under a single brand name, by amending the Trade Marks Act, for instance.

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ii) Providing teeth to the Advertising Standards Council of India to enable it take action against false and misleading advertisements, and keep a close vigil over clever evasion of the law. iii) Asking the electronic and print media to adhere to the advertisement codes and not encourages surrogate advertisements. iv) Calling on the ASCI address complaints received from consumers against surrogate advertisements and take appropriate actions immediately. v) Creating a consumer awareness programme to help people understand the negative impact of surrogate advertisements. vi) Adopting strict laws to penalize those companies featuring surrogate advertisements without any real existence of the product. vii) Requiring advertising agencies to have full knowledge of the products under the same brand for which they are promoting advertisements, and taking legal actions against those agencies which design surrogate advertisements. If one believes that honesty is the best policy and truth ultimately gains, the best policy would be to stand up strongly to the dishonest practices of surrogate advertising. Senior sources at IBF also said that the industry body had sent out show-cause notices to a couple of channels regarding ads of certain alcohol and tobacco products. Most channels have reportedly complied with the Government panels directive to the extent that the ads of a liquor company that purportedly makesapple juice after drinking which anything can happen (kuch bhi ho sakta hain) have been taken off air. (Exhibit 2)

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He takes a sip and looks up at her. The high ... dress she was wearing gives way to a bateau neck neck...

line .

He's surprised at the revelation. Once The lady's dress has now become an off shoulder one. again taking a sip, he glances at her .

Sipping his drink once more, he looks ... to find a shorter, more tantalizing dress on her. through the glass...

.. to find the shirt unbuttoned. He looks at the lady... Sipping in anticipation, his eyes fall on his chest...

... who too was doing the same with her ... to find the shirt unbuttoned. He looks at the lady...

drink.

MVO: AC Black apple juice. Kucch bhi ho sakta hai. Kucch bhi.

Some Quick facts:

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 Cigarettes cause about 6.35 lakhs deaths in India every year. About 33 per cent of cancer cases are attributed to tobacco consumption. However, cigarettes alone account for roughly 10% of excise collections. Tobacco trade is a major contributor to the national exchequer Taking into consideration the above mentioned facts surrogate advertising should be banned.

Market Survey
A market survey in 2001 revealed that advertising has a direct influence on the consumption habits of 431 million people in India and an indirect impact on 275 million `aspirants' from the lower income group. Considering this and realising that nearly 50 per cent of the television owners have access to cable channels, there is no doubt that the hidden call for alcohol consumption behind the surrogate advertisements is not escaping the eyes of viewers in the world's fourth highest liquor-consuming country. The very purpose of banning liquor advertisements is defeated by surrogate advertising. Sociological studies have shown that, in India, a significant share of income of a large section of the population is spent on liquor, potentially leading to financial distress and health hazards. According to the International Wine and Spirit Board, a liquor industry publication, there will be a jump in the number of people reaching the legal drinking age of 25 within the next few years. The implication is that the problem is going to grow.

A recent series of hoardings as specified into a very unique trend specific to Indian advertising Surrogate advertising a trend which is fast catching up and has suddenly attracted a lot of innovative and creative brains around the country. Reason? On one hand, the govt cannot allow public advertising of liquor companies. But ironically, liquor and cigarette sales are the biggest revenue generators in terms of taxes and duties on these items. Thats why an overt acceptance of the marketing in these sectors is not legally acceptable. This has led 20

to one of the biggest ironies of the country Sales of these items are not banned, yet advertising on the same has strictly been prohibited!

Talking about the market size and the different segments would not be pertinent to the discussion (for the records, it is more than 100 million cases in India!). But what is the significance of this trend vis--vis the entry points for new players and sustainability of existing ones? Multinationals which would like to explore the Indian markets find the doublefaced attitude of the government as an impediment to their ventures. Since no policy has been formalized in this regard, foreign companies continue to be skeptical about their entry. Domestically, it has led to innovative ways and methods of spending on different media for Advertising from the companies, where companies do more of a brand building exercise than direct advertising. Be it promotions for brand building, or sponsoring events that can be mapped with the showbiz and glamour of the brand, advertisers dont leave many avenues to enhance their visibility. The rule says Advertisements which lead to sale, consumption and promotion of liquor should not be allowed. So, in Surrogate Marketing, a product which is different from the main product is advertised, and has the same brand name as the main product. The product is called as surrogate and advertising through this channel is called Surrogate Advertising! It may include CDs, water, clothing, Apple juice, fashion accessories, sports goods or even events sponsoring!

These gimmicks, in turn, help the consumers build a strong equity of the parent brand, and with the enhanced visibility, the equity of the brand would definitely become higher! Liquor companies were forced to look at innovative ways of building their brands. With an objective of enhancing brand recall, companies either engage into surrogate advertising or displaying socially responsible messages.

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Again, out of the two viable options for Advertising, Surrogate Advertising has been surrounded by controversies and legalities for a long time. There is no clear policy from the government for obvious reasons and companies do not want to risk their investments on Ads, which might not be screened after a while. So, a safer choice available where companies can exercise their grey cells is advertising socially responsible messages.

Problem Statement:
When the Advertising Standards Council of India (ASCI) withdrew its code to regulate tobacco, liquor products etc. consumer activists were concerned over the impact of the move. The issue has taken a new twist with the Central Government deciding to ban these product companies from sponsoring sports and cultural events. Liquor or tobacco advertising in banned in India and hence companies that sell these products have to resort to advertising their wares using less harmful products which carry almost the same names and looks - surrogate advertising.

Econometric research evidence

Most econometric studies have found that increased expenditure on tobacco and alcohol advertising increases the demand for cigarettes and liquor, while banning advertising leads to a reduction in tobacco and liquor consumption. A metaanalysis of such studies found that tobacco and liquor advertising significantly increased tobacco and liquor sales.

Research evidence within a country before and after a ban on advertisements

Several studies have yielded convincing data that a complete ban on advertising makes an important contribution towards reducing the prevalence of smoking. It has been found that only restrictions on content and placement of advertisements 22

or bans in one or two categories of the media are not effective. However, the evidence suggests that tobacco control programmes with comprehensive advertising bans would reduce tobacco, media is used to promote public health, also reduces cigarette consumption. The taxation on advertising has also been found to reduce total advertising with the additional advantage of raising revenue that could be used to fund counter advertising. Therefore, policy options for a comprehensive ban on tobacco advertising might include limitations on the content of advertisements, restrictions on the placement of advertisements, restrictions on the time that cigarette advertising can be placed on the broadcast media, total bans in multiple media, counter-advertising, taxation on advertising, and prevention and penalizing of cross-border advertising consumption. Counter-advertising, where the media is used to promote public health, also reduces cigarette consumption. The taxation on advertising has also been found to reduce total advertising with the additional advantage of raising revenue that could be used to fund counter advertising. Therefore, policy options for a comprehensive ban on tobacco advertising might include limitations on the content of advertisements, restrictions on the placement of advertisements, restrictions on the time that cigarette advertising can be placed on the broadcast media, total bans in multiple media, counter-advertising, taxation on advertising, and prevention and penalizing of cross-border advertising.

Research Objective:
With keeping these in mind, the research will be conducted to solve the following questions: What does this all have to do with the final consumer? What image does he carry of these products? Does he know that the advertisement which is shown is meant for some other product? Does he think it is Right/Ethical?

Sampling Plan:
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Sampling Method: Conveniently Sampling. Sample Type: Target audience would be comprises of those who are of the age group of 15 yrs and above. Educated, at least know about what advertising is, have seen the surrogate advertisement. Sample Size: 50 Sample Area: Borivali and Mira Road.

Research Design:
Exploratory Research conducted by me included door to door surveys, in the Royal College Campus and in the Dalmia School for filling up the questionnaires. Instrument Design, in the form of questionnaire and interviews with the respondents.

Limitations of Project
Limited Sample Size (50) This study is restricted to the geographical limits of Mumbai. Limited period of survey

Importance of Study:
The study will help to find the peoples perception of surrogate advertisements.

Data Analysis:

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120

100 96 80

60

40

Percent

20

0 YE S NO

seen advertisement on t.v

When the respondent where asked how many of them watch the advertisement on television 96% responded positive towards this. The above graph depicts the same thing.

The table shows the cross tabulation between the person who have seen the advertisement on television and that to of any ciggarates or alcohol.

Seen Advertisement on T.V * Seen Advertisement of Cigrates or Alcohol Cross tabulation Count

seen advertisement of cigrates or alcohol

Total

25

seen advertisement YES on TV NO Total

YES 41

NO 7 2 41 9

48 2 50

41 respondents out of 50 said they have seen the advertisement of alcohol and cigrates.

50

40

30

32

Out of the
20

41
awareness of banned
3 6 NO YES YES NO

10

Count

seen advertisement of cigrates or alcohol

respondent who have seen the ads of cigrates and alcohol 32 of them are aware of the fact that an advertisement of such product is banned in India.

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view towards surrogate ads

22.92% n=11 33.33% n=16 ethical unethical should be banned no comments Pies show counts

8.33% n=4

35.42% n=17

On question of ethical issue of surrogate ads 35% said that surrogate ads are unethical while majority of them constituting 33% refused or where not able to give their opinion on the issue. 23% said they are required and they are ethical while only 8% where in the opinion of banning the ad . Advertisement requirement * view towards surrogate ads Cross tabulation Count
View towards unethical should be banned 11 1 6 17 3 4 no comments 8 8 16 Total surrogate ads ethical YES 8 NO Total 3 11

Advertisement requirement

28 20 48

The cross tabulation between the respondents who said that advertisement is required for such product and ethical issue of surrogate ads shows that 11 of them said that ads are required but surrogate ads are unethical to do that, while 8 of them where agree that it is ethical to do the surrogate advertisement.

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3 0

2 0

2 1

1 0 8 8

1 0

Count

0 e te in g n rta in b rin a dd tu in o g n is rb in rmtiv fo a e m g id g is u in

2 n n o th a o e oe f e bv

v wto a sp s n a s ie w rd re e t d

When respondent where asked how they find these ads 21 of them said, they are entertaining while only 10 of them said, they are informative about products.

ad app eal
YE S N O P show counts ies 40 % .82 n= 20

59.18 % n= 29

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Strong view of 60% came from respondent that the surrogate ads do not induce them to use the product; only 40% said that they are inspired by the ad to use the product.

28

27

27

26

25

24

23

Count

22 21 YES

22

NO

family member consuming such product

For checking how do the respondent recall the original product they where asked whether the respondent or any of his/her family member consume the product, 27 of them said Yes, and 22 said No.

Family member consuming such product * product recall Cross tabulation Count Product recall YES 19 13 32 Total NO 8 8 16 27 21 48

Family

memberYES NO

consuming such product Total

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19 respondent where those whose family member consume such product and due to which they were able to recall the original brand while looking at the surrogate ads whereas 13 of them where those whose member doesnt use the product but then also they recall the original brand.

Respondents profile:
30

23 20

13 10

Count

0 15-18 18-21 21-24 24 and above

age group of respondent

The above graph shows the age group of the respondent, 30 of them belongs to the age group of 21 yrs. and above and 20 where below 21 yrs.

Age group of respondent * ad appeal Cross tabulation Count ad appeal YES 2 5 10 3 20 Total NO 5 8 13 4 30 7 13 23 7 50

age group of respondent

15-18 18-21 21-24 24 and above

Total

30

4 0

3 0 29

2 0

1 0

11 6 4

Count

0 < 10000 10000-100000 100000-500000 > 500000

fam incom per m ily e onth

Family income was asked to checked that the surrogate ads effects the buying habits or not majority of our respondent who have nothing to do with the surrogate ads and who usually purchase the product belong to high class of the society with their family income of 1,00,000/- and above.

26 respondent where post graduate and rest of the 24 where graduates and undergraduates.

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3 0

2 6

2 0

Count

1 2 1 0 u d rg d a n e ra u te

1 2 g da ra u te p st g d a o ra u te

e u a n le e o re p n e t d c tio v l f s o d n

The effect of tobacco advertising on young people

Advertising and promotion of tobacco products attract children.s attention, and they remember its messages. There is also growing evidence that consumption per capita in countries with a comprehensive ban compared with countries with no ban.

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Source: Saffer, Henry. The control of tobacco advertising and promotion. Background paper, cited by Jha and Chaloupka

Findings:
On analyzing the data following conclusions were drawn: Majority of the respondent were agreeing to the fact that advertisement is requiring for such product in these competitive world.

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Many of them have knowledge of surrogate ads but they were of the view that these are unethical ways of brand advertising.

The surrogate ads which they see are instead of informative being considered as entertaining for majority of the respondent.

Original Brand recall is high among the respondents. Strong facts that the surrogate ads do not induce the consumer to purchase the original brand, they just remind the brand existence.

35% of the respondents where those under the age group of 21 yrs., they where attracted by the surrogate ads and were induce to use or at least try the product.

Major of the respondent were also able to recall the original brand either because these were used by them or any of their family member.

INDIAN LIQUOR INDUSTRY

About the Industry The use of alcohol as drink is an age-old story in India and it appears that the technique for fermentation and distillation was available even in the Vedic times. It was then called Somarasa and was used not only for its invigorating effect but

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also in worship. To date, not only has the consumption of alcohol been continued but it is an integral part of the Ayurvedic system of medicine India is a complex market as far as selling alcoholic products is concerned. Each of the 28 states has its own set of rules that liquor makers have to comply with. Even taxes vary from state to state. For the Rs 8,100-crore Indian liquor industry, moving products from one state to another is a logistical nightmare. Taxes are also awfully high. Karnataka has the highest taxes on liquor. Among the taxes imposed are sales taxes, bottling fee, import/export pass duty, etc. As a result, in this industry, under-invoicing is the norm. The best way is to use the same permit to move at least thrice the volume of products, in connivance with the excise, octroi and sales tax officials. So, if an invoice says 500 cases, in reality 1,500 cases would have been transported. Thus, a large chunk of the alcoholic products on sale in India bypasses the tax mechanism. According to Diljeet Titus, an advocate at Delhi-based law firm Titus & Co, Under-reporting in the liquor industry is in the region of 25-30 per cent. That means an annual loss of Rs 935 crore to the exchequer. Titus goes on to point out that, currently, the maximum diversion is happening in the wine sector. Compounding the problem are Gujarat, Mizoram, Manipur and Nagaland, where sale of alcohol is prohibited, but liquor is freely available for a price. A lot of that is smuggled in from neighboring states. The story in imported spirits is no different. Roughly 60 per cent of all imported spirits are cleared through customs in three days. Another 35 per cent, which might require some paperwork, goes through in three weeks. The balance 5 per cent is where all the trouble happens. Titus points out that the customs officials clear this unofficially for a price.

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Last year, Indians consumed 60 million cases of whisky. That made India the worlds largest whisky market by volume, pushing the US, which consumed 40 million cases, to second place. But if the black market in liquor were to be taken into account, India probably overtook the US quite some time ago.

OVERVIEW

* Indian Made Foreign Liquor (IMFL)

Negative perceptions about alcoholic beverages widely prevalent This is a regulated industry - movement, prices of intermediate goods (molasses, alcohol) tightly India controlled - state governments exert considerable influence Yet, this is a well developed - Rs 8,200 crores (US $ 1907 million) - industry in

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Major players in the alcoholic beverages market - United Breweries (UB) Group( Bangalore), Shaw Distilleries (Mumbai) Per capita beer consumption in India - 0.5 litres; as against 20 litres in China, 100 litres each in USA and Germany, annually Wallace (Calcutta), Jagajit Industries (Kapurthala, Pradesh), Associated Breweries & Punjab), Mohan Meakins(Solan, Himachal

FUTURE OF LIQUOR INDUSTRY

Living Liquidz, a three decade old wine and spirits retailing company, has plans to set up more than 160 retail points within Mumbai and Pune by end of 2008. Currently they are present in Spencers, Fooldland and Spinach the major

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hypermarkets in Mumbai. Consumers can also place orders through the website and will have the deliveries made across the city. Wine shops were always looked down upon and the variety offered is never impressive. Living Liquidz wine boutiques will make available the finest choice of wines, spirits and imported liquor at off the shelf prices, locally available to consumers, says, Mokssh Sani, MD Living Liquidz The monthly revenue from the Spencers store is Rs 5 to 6 lakhs says Asish Gupta, the Operation Manager of Living Liquidz. In 5 to 6 months time we are hoping to cross Rs 8 to Rs10 lakhs with the Inorbit store and Rs. 12 to Rs. 15 lakhs from the Juhu store considering of the kind of crowd that it pulls every day. The only legality that the retailing company has to take care of is the FLBR II license with the yearly charges of Rs 84,300. The response to the store has been tremendous says Asish Gupta. Especially for ladies, this has proved to be a much easier way to pick up their own products as they generally do not prefer to buy liquor from the stand alone retail stores. The company plans to come up with 45 retail stores in tie up with Spencers, 45 with Spinach and 40 stores with Food land in various cities like Mumbai, Pune Bangalore, Gurgaon and Chennai by end of this year. We are also talking to the multiplexes to allow us space to set up our liquor stores, he says. Some of the other retail outlets where wine is available include Haiko Supermarket, Powai, Big Bazaar, and Lower Parel. With an intention to give a boost to the wine industry in Maharashtra, there had been proposals to set up wine bars in public areas across the State. Under the new Excise regulations, the license to sell wine in supermarkets and grocery stores works out to be one-fourth of the cost of a regular liquor shop license. As per the latest rules, bars can set up small parties and get-togethers with daily

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license fees of Rs600. Earlier when wine was clubbed with hard liquor and only eateries were permitted to be served; they used to charge a daily license of Rs. 6, 000/-. This decision has come at a time when wine is receiving tremendous visibility and the future looks bright not only for connoisseurs but also for those in the wine business. As per the recent government figures, the wine industry in the country is growing at 35-40 per cent a year which is faster than the consumption of the usual favorite whisky, which is growing at eight per cent. The domestic wine industry has also matured enough to compete for shelf space with international brands. There are super markets like Haiko, owned by Surendra Hiranandani which has opened its own liquor corner in the premise. An official from Lakewood Malls, Powai, says, The response to this new initiative has been fantastic and the category is growing day by day. The mall gets an average of around Rs 35,000/per day from the wine shop. The annual turn over of the Haiko store is approx 26 crores. Speaking about the trends these days among the liquor buyers, he says, Liquor buyers beyond age of 35 are more or less brand conscious but youngsters with high disposable incomes(young employees of BPOs in Hiranandani area) do experiment with multiple brands therefore the trend is clearly demanding variety. Liquor buying is also elastic to the price discounts. The advantage over buying the wine and beer from a Haiko store or Spencers or Food Land is that it is much cheaper than standalone stores as the prices are lower than regular wine shops.

When asked about the legalities of opening a liquor corner inside shopping malls, he replies, the store needs to have an independent area within the store, which can be accessed by customers without disturbing activities of the store and can be shut separately during dry days, plus one needs to obtain the FL BR II license from the excise department for retailing wines and beer.

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People are crazy about imported beers but the craze has reduced drastically as we have good domestic brands available in India now, however if there is reduction in import duty by the government then there will not be much price difference left between local & imported brands & that would be the awaited moment by every liquor buyer so that he has much wider assortment to choose from. At present, just one outlet of Haiko has liquor store but the plan is to have two more stores by this year-end, he says. The dynamics of liquor distribution is also changing in recent times and as some state governments allowing alcohol products to be sold through organized retail, liquor companies are coming up with new business strategies. Currently, only Karnataka allows wine and beer on retail shelves. Delhi allows beer and Maharashtra only wine. West Bengal and Andhra Pradesh are expected to follow suit. Apart from companies like UB and Radico Khaitan who are planning to take advantage of this new found opportunity, Diageo is also opening its exclusive brand stores. The first Johnnie Walker store has been opened in Mumbai suburbs recently. FL BR II, the new licensing system created by the Maharashtra state excise minister, Ganesh Naik, could be issued to the non-liquor stores. The license has to be renewed yearly and could be issues for soft liquor. The district collector is the licensing authority for this category unlike the earlier system where the state excise department had the sole right to issue a liquor license. Any shop can now apply for a license to the collector and store or/and sale beer and wine. Along with retail shops, malls or grocery stores, eating joints can also serve wine even if they dont possess a restaurant or hotel license.

Banning Liquor Ads

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Certain liquor manufacturing companies seek to promote liquor surreptitiously to circumvent die legal ban on advertising of liquors. In the cases of Phipson & Co. Ltd. and Herbertson Ltd.*'the Commission held that the publication of advertisements by liquor manufacturers, ostensibly in the name of any product other than the liquor sold under identical brand name intended to circumvent the legal ban on advertising of liquor, did not amount to an unfair trade practice. This is a disquietening decision and has received adverse public reaction. The Commission's ruling virtually gives a green signal to unscrupulous advertisers. On September 8, 2000, the Central Government had announced a complete ban on the telecast of alcohol and tobacco advertisements in the country. The amendment to the Cable TV Networks (Regulation) Act, 1995, which took effect from September 8, 2000, also sought to prevent surrogate advertising. The Act prohibits all advertising which "directly or indirectly" promotes the production, sale or consumption of tobacco, cigarettes, and alcohol. Advertisements promoting synthetic baby food have also been banned.

The way out

What their are own the other for practices bravery companies or are looking at? (a) Companies are getting involved in Sponsorships of events and have launched awards lifetime achievements! (b) Internet advertising has become a lucrative area which has so far not been

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delved into. The medium holds a lot of potential to enhance visibility, and companies have a have lately high realized brand that. recall (c) Catchy jingles have become the norm of the day to ensure that their brands (d) With restrictions in other marketing elements in terms of pricing and distribution, companies have ventured into another important element Packaging. Innovative packaging makes their brands stand out of the clutter, and most of the Multinationals are revisiting this element in their brand portfolio. Though the industry is not healthy for the young consumers, some processes and laws need to be formalized and established in the system. Else, innovative workarounds and arm-twisting of laws would be the norm of the day for the entire liquor industry!

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Influence and Affect of Alcohol Advertising

Can advertising influence people's minds to an extent such as inducing them to smoke, drink etc?

Can advertising influence people's minds to an extent such as inducing them t

Yes indeed, says, Parag Paul Choudhury of Voluntary Organization in Interest of Consumer Education (VOICE), a Delhi-based NGO and who is also a member of Consumer International. Choudhury cites the example of Rajnikant, the popular actor of films in the south, who had a particular style of flipping a cigarette to his lips. Boys in the south unconsciously started trying to flip the cigarette in the same manner and many took to smoking through this playful, imitative initiation. According to a study done on Alcohol Advertising: Its Impact on Communities, and what Coalitions can do to Lessen that Impact conducted by the Community Anti-Drug Coalitions of America in collaboration with the Center for Science in 43

the Public Interest, alcohol advertising is especially attractive to younger people. This attraction has the potential for encouraging underage drinking, with lethal effects for the future of these children. In America, too many young people begin drinking in junior high school, 32 percent of them are binge drinkers by the time they are high school seniors. Children who are alcoholics or problem drinkers number is more than four million. Alcohol is the most used and abused drug among young people. It is a factor in four leading causes of death (motor vehicle crashes, unintentional injuries, suicide and homicide) of youth and young adults from 10 to 24 years of age. Despite this evidence, the placement, timing and themes of alcohol advertising continue to be geared to young people in large degree. As known, advertising serves three major purposes. First, it introduces a product and generates new consumers for it, second, it attempts to convince people to switch from one product to another, third, it attempts to stimulate and sustain consumer consumption. Alcohol advertising is true to those principals. Ads often feature trendy and attractive young people to attract new consumers who also wish to appear "cool." The message generated is that drinking is okay, everyone does it and it is a great way to meet new people and really fit in. In a report released in September 1999, by the Federal Trade Commission found that, alcohol industry voluntary advertising standards provided excessive access to underage persons. Those standards, which were sometimes violated, allow ads to target audiences comprised of 50 percent underage youth. The Commission also concluded that even where the majority of the audience ware of legal age, large numbers of children could still be watching. The Commission recommended stronger standards to protect young people, as well as third-party independent review systems to insure industry compliance with its own rules.

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Certainly the integral part of effective advertising involves targeting the markets in which one hopes to gain consumers, increase sales and instill brand loyalty. In the case of alcohol advertising, those targets are too often kids, college students and minorities. Statistics on underage drinking in the country are frightening. Underage youth consume in excess of a billion beers each year. Every week, more than 100,000 elementary school age children get drunk as US Survey. Recent research from the Center on Alcohol Marketing and Youth (CAMY) in US points to deliberate and focused alcohol advertising to minors. CAMY found that alcohol ads aired on 13 of the 15 most popular teen shows. Interestingly, 7th Heaven was the most popular teen show featuring beer advertising. Other toprated shows include Friends and ER. CAMY also found that almost 25 percent of all alcohol ads were more effectively delivered to youth than adults. Americas youth saw more beer commercials than ads for sneakers, gum, jeans, crackers, cookies or fruit juice. The European Union and World Health Organization (WHO) specified that the advertising and promotion of alcohol needs to be controlled. In September 2005, the WHO Euro Region adopted a Framework for Alcohol Policy for that region. This has 5 ethical principles which include "All children and adolescents have the right to grow up in an environment protected from the negative consequences of alcohol consumption and, to the extent possible, from the promotion of alcoholic beverages". . Contradicting the belief that advertising influences individuals, a report prepared by International Center for Alcohol Policies (ICAP) for World Health Organization, the following facts were revealed. Market data from a various countries support the inconclusiveness of the research literature on the effect of alcohol advertising on aggregate demand for or consumption of beverage alcohol. For example, In the Netherlands, Germany and

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the United Kingdom, alcohol consumption has declined despite increases in advertising expenditure (Calfee and Scheraga 1994). Although the amount of advertising for all beverage types has increased dramatically over the past century, data show that the consumption of beer, wine, and spirits in the United States has remained relatively constant. In fact, per capita consumption levels for 2000 do not differ dramatically from those of 1900. Data from the U.S. Bureau of the Census also show that increases in advertising within individual sectors of the beverage alcohol industry have no impact on consumption. Despite a significant increase in advertising expenditure during the period 1974-1989 by the brewing industry, the beer market has remained constant. However, in view the negative impact of liquor advertising, there have been increasing efforts to protect the public interest and societal safety by regulating the content and the reach of advertising by various countries. Many regulatory and advisory bodies like Advertising standards Authority(ASA) of New Zealand, The Distilled Spirits Council of United States (DISCUS), Advertising Standards Council of India (ASCI), Canadian Radio-Televisions and Telecommunications commission etc., and many other such organizations for each country. Above all, most of the Self-Regulation Organizations around the world, base their work on the Codes prepared and published by the International Chamber of Commerce (ICC). The ICC is the world business organization, the only representative body that speaks with authority on behalf of enterprises from all sectors in every part of the world. International Center for Alcohol Policies (ICAP) gave a holistic picture of different policies on advertising restrictions pertaining to various countries. The following tables will depict that.

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THE CORPORATE STANDPOINT (Surrogate Brands)

Kingfisher Airline the surrogate brand...

Ever wondered about why the kingfisher airlines got its name??? It could have been UB Air as, it goes effectively with the groups name. If one carefully analyzes the complete portfolio of brands available with UB group (parent company of Kingfisher Airlines) none of the brand is repeated that is none of the brand name is used for two diversified products, only kingfisher has got that honorthe big Q is why so??? Well if we talk about Kingfisher it was originally only a beer brand, the only brand which is present in more than 50 countries & which is served on 5 intl airlinesits the fastest growing brand in beer segment with a growth rate of nearly 30 % where as all other beer brands in the world have growth rate of only 3%... kingfisher beer definitely has a commanding position. The beer drinkers are usually youngsters between the ages of 14 to 30 yrs. these constitute of more than 50% of the world population that means its a significant market to be catered. Now, the question arises what connection it has with kingfisher airlines. In many countries (including India) any sort of advertising pertaining to hard drinks are banned, to counter that & to enhance its reach kingfisher airlines was launched with a lot of fanfare, the first airline in the world which started its operations with a new aircraft, not to mention about its air hostess, the kind of service it provides the only airline in India which has been sponsoring F1 racing even it has nothing to with it, kingfisher does not fly outside India & F1 is not in India till now that means there is no relation between the two. The taglines for both of the brands are nearly same, Fly with the Good Times goes for Kingfisher Airlines & King of Good Times is for Kingfisher Beer. Kingfisher brand name is being played on top-of-mind concept. Only to sustain & improve the beers position 49

in the world market Kingfisher Airlines is so desperate to fly international for which, it had to acquire a stake in Air Deccan too. Air Deccan will be completing its 5 yrs of flying in Aug. 2008 after which it can fly overseas, so Air Deccan was only choice for Kingfisher to go overseas on its back. I also feel that as & when Kingfisher will start flying overseas on its own it will back off from Air Deccan or it will take complete control of that airline. Clearly Kingfisher Airlines is a surrogate brand, i.e. Kingfisher Beer is promoted on the name of kingfisher airlines. Excellent strategy Dr. Malaya, hats off to u Another alcohol brand `Royal Challenge' (beer) sponsors a sport-event (Indian Premier League matches) which are broadcasted on Sony television. This time, Sony TV is likely not to screen such programmes since tobacco or alcohol sponsorship of sport events is also banned in India. Enforcing such tobacco and alcohol advertisement bans are in extreme interest of the people, public health and the country's welfare. Studies have proven how tobacco and alcohol ads use glamour and lifestyle imagery to promote their products and catch youth's fancy for their capital interests. The deadly healthhazards of tobacco and socio-economic disaster which alcohol spells on families are a reality we deal with in our day-to-day lives. However advertisement firms are going to lose Rs 250 crores of the revenue, which was earlier coming from tobacco and alcohol ads. They ask: "Why is the [tobacco and alcohol advertisement] clamp not extended to other media, such as sponsored ground events, outdoors, point-of-purchase advertising etc., which will reap our losses?" The question is indeed very valid. These bans on alcohol and tobacco advertisement should be extended to sponsored ground events, outdoors, point-ofpurchase advertising etc as well.

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Actually the Cigarette and other Tobacco Products Act (2003) does extend the ban on tobacco advertising (direct, indirect and surrogate) to sponsored ground events, outdoors, but allows tobacco advertising at the point-of-purchase with conditions: the size of the board is fixed by law and also the content: tobacco advertisements on point-of-sale cannot display any graphic or picture or any brand name, and should only mention the kind of tobacco being sold there with 25% of board area dedicated to health warning (Tobacco causes cancer or Tobacco kills) in local language. In the year 2000, the government formed a committee headed by the then additional secretary of the Information and broadcasting ministry, which included prominent broadcasters to look into the issue. The committee recommended that products with real production and distribution channels cannot be called surrogate. However tobacco and alcohol companies have been promoting their products under the garb of non-tobacco or non-alcohol products with same brand names.

Such surrogate advertisement does have a brand recall impact since most of the viewers associate a particular brand with the main product. For example,
Royal Challenge is an alcohol for most consumers or potential consumers and not a sport! The industry segment has its own standpoint in defense. The liquor lobby claims that everything is in accordance to the Government regulations. "If a brand has equity, why shouldn't it be allowed to advertise? Also, brand extension is an industry practice adopted by different product categories," comments Alok Gupta of UB group. "When we advertise our products, we follow all the guidelines," declares president, sales & marketing, Radico Khaitan. They clarify that they have stopped showing liquor advertisements and they are free to use the brand name for any other products. Even the Confederation of Indian Alcoholic Beverages

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Companies (CIABC) advertising code maintains that advertisement of products (real brand extensions) by the liquor industry must be allowed. From a layman's point of view, their claims seem to be justified. But this is a clear example of taking advantage of the loopholes. There is a point to ponder. When they have stopped showing liquor advertisements, why the same brand name and logo is used to promote products like cassettes & CDs or mineral water? They could have assigned different brand names. It seems they have a hidden agenda of highlighting the liquor or tobacco brand. A similar tussle over the issue of surrogate advertisements in politics was raised in April 2004 on the eve of Lok Sabha elections. Complaints of slanderous and offensive advertisements were raised by two major political parties - BJP and Congress against each other. The issue became so serious that the Supreme Court had to interfere in this affair. Finally on 13 April 2004, the Court gave a verdict to curb smear advertisements on electronic media. By appointing Election Commission as referee, the court has tried to put an end to surrogate advertising in politics. According to the Cable Act under the ministry of information and broadcasting,"no broadcaster is permitted to show an advertisement which promotes directly or indirectly, sale or consumption of cigarettes, tobacco products, wine, alcohol, liquor or other intoxicants" Now a new clause has been added under the act stating that "any advertisement for a product that uses a brand name which is also used for cigarette, tobacco product, wine, alcohol, liquor or any other intoxicant will not be permitted". Finally, in April 2005, the ministry resorted to a ban on surrogate advertisements of liquor and tobacco products on television. After this directive, the surrogate advertisements are seldom shown on television. Now the companies will have to reframe their policies. But who will take care of print and outdoor media is not certain.

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According to ASCI (Advertising Standards Council of India), surrogate advertisements companies are harmful. Now it will be up to the ASCI to take up the matter with the respective Tailpiece The Supreme Court directive has made us agree that Surrogate advertisements in all categories should be banned. Another good indication is from the ministry of information & broadcasting, which has targeted to curb surrogate advertisements on television. Finally, the print and outdoor media should also be included and surrogate advertisements must be banned. After all, surrogate advertising is a loophole, which should be filled without delay.

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Beyond surrogate advertising

Surrogate advertising is quite rightly frowned upon as it is but a cynical attempt at promoting products that public policy decrees is not in society's interest. But the Government should guard against any over-zealous interpretation of what constitutes surrogate advertising so as not to hurt legitimate efforts at brand extension. Given the integrated nature of markets, brand promotion has become an elaborate exercise, often extending across national boundaries. Consequently, it has become a costly affair. The only way the corporate effort in this regard can be sustained is by spreading the risk across products though not all may bear fruit immediately. And if the trademark pertains to a legitimate FMCG product with clear business plans, though drawing inspiration from a product under regulatory restriction, a rigid interpretation of surrogate advertising may well kill the prospect of a brand ever acquiring a stature beyond the product with which it was associated initially. Indian companies may suffer an additional handicap compared to their global counterparts. They are relatively small and cannot so easily generate the enormous resources required for building brands. In contrast, brands recognised as distinctive trademarks or top corporate labels were surely built painstakingly over decades with huge outlays. The challenge of nurturing a powerful consumer brand is daunting, which is why global FMCG majors fiercely protect their successful labels created over time through huge investments. Leveraging trademarks and umbrella branding are proven corporate strategies, as evident from the success of LG and Samsung brands across segments, from chemicals, telecom, consumer electronics to consumer durables. The Tata brand arguably India's most respected across segments now straddles many nationally and internationally renowned products and services, and aims to emerge the largest from the country. Strong trademarks mean a

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combination of positive product attributes mainly reliability and quality. Branding decisions for new product categories have to consider the appropriateness of the fit between the product and the trademark, in terms of association, attribute and connotation. And here, the government is free to put companies under a scanner to determine if their umbrella branding strategy is transparent and genuine. But brand extension across products should be permitted, except when the purpose clearly is to encourage consumption of a product whose promos are prohibited by law. The Government's efforts to promote the `Made in India' label should, therefore, be through a regulatory framework which will help Indian companies build, strengthen and sustain international competencies, and not through blanket bans on brand extensions. There is a need to understand the value inherent in successful Indian brands, as Intellectual Property Rights and intellectual capital can offer the keenest competitive edge to any nation. Optimal leveraging of valuable trademarks goes well with the Government's vision of promoting the `Made in India' label through various export promotion schemes, and nothing should be done to disturb this.

Keeping this thing in mind I decided to conduct a research to find out whether really this surrogate ad helps to recall the original brand. Survey was done comprising of 50 respondents of different age group, different educational level and different class of society. Questionnaire was asked to fill by them, and data analysis was done with the help of SPSS package, findings have been given in the report.

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Questionnaire 1) Do you see Advertisements on television? a) Yes b) No

2) Have you seen any advertisement of cigarettes or alcohol? a) Yes b) No

3) Do you know that advertisement of such products is banned in India? a) Yes b) No

4) Do you think that advertisement of such product is required? a) Yes b) No

5) What would you say about banning of advertisement of these products? a) Is a right step Be banned b) No need of banning such ads d) No comments c) Product should

6) Do you know about surrogate advertisement? a) Yes b) No

7) Do you recalled about the original product while looking at the surrogate ads? a) Yes b) No

8) What do you think that the surrogate ads are a) Ethical b) Unethical c) Should be banned d) no comments

9) How will you rank the present advertisement? a) Entertaining d) Misguiding b) Boring and Disturbing e) None of the Above. c) Informative

10) Does the ad induce you to try the product?

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a) Yes

b)

No

11) Does your any of the family member consume such products? a) Yes b) No

12) Which age group you belong to? a) 15-18 b) 18-21 c) 21-24 d) 24 and above.

13) What is your approx. Family Income? a) Less than 10,000/b) 10,000 1, 00,000/c) 1, 00,000 5, 00,000/d) 5, 00,000 and above. 14) What is your Educational level? a) Under Graduate. b) Graduate. c) Post Graduate.

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Scenario of Tobacco & Alcohol Industry

The Background Tobacco and alcohol are public health hazards. Tobacco has adverse effects on social, economic, health and environmental factors. Alcohol too has adverse medical, psychological, social and economic impacts. Other similar characteristics between alcohol and tobacco are its increasing social acceptability, dependence on the product, aggressive marketing of the product particularly to recruit youth as its consumers. Tobacco is the second major common cause of death and the fourth leading risk factor for disease. It is responsible for the death of one in ten adults - 5 million deaths a year worldwide (WHO, Tobacco Free Initiative). While alcohol is the leading risk factor related to the major burden of disease in low mortality developing countries and the third most prevalent risk factor for leading diseases and injuries in developed countries (WHO, 2002). Consumption of tobacco and alcohol in India has been rising, possibly due to economic liberalization of the Indian market. Privatization and opening up the market to foreign companies dramatically changes the advertising and marketing of alcohol and India lacks alcohol and tobacco control national policies and strategies.In contemporary India, tendency of tobacco and alcohol consumption has percolated down to the youth. Media has played a leading role in encouraging the use of tobacco and alcohol among the youth through portrayal in congenial social settings, association of the product use with glamour and celebrity status and by using direct and indirect advertising.

The Debate about Alcohol and Tobacco Advertising The alcohol and advertising industries argue that, as alcoholic drink is a legal product it should be legally possible for it to be advertised, and that bans on alcohol advertising would have adverse effects on the alcohol market and on the media. They also argue that bans are not justified as advertising is concerned with promoting sales of individual brands and there is no evidence of a causal link 58

between advertising and the overall level of alcohol consumption or the amount of alcohol- related harm. The main counterarguments are that as well as promoting brands, advertising is also concerned with recruiting new drinkers and increasing sales among existing, and especially heavy consumers. Intensive advertising and promotion of alcohol appears to sanction and legitimate use of a product which causes high levels of damage to individuals and society. By definition, alcohol advertising is one-sided, avoiding any reference to the negative aspects of alcohol consumption. In modern circumstances, it is also necessary to enable alcohol to compete against other alternative drugs as well as soft drinks. There is in fact some evidence that bans on alcohol advertising can have beneficial effect on the level of harm, at least in the longer term. The arguments regarding alcohol advertising are in most respects parallel to those concerning tobacco advertising. An analysis of internal documents from advertising agencies working for tobacco companies exposed as highly disingenuous the standard tobacco (and alcohol) industry arguments that advertising is only about expanding or protecting brand share, not total consumption, and that if there are any problems industry self-regulation is the answer. Advertising and children Much of the debate concerns the possible effects on children and young people. The Advertising Codes prohibit the specific targeting of minors, but the ubiquity of alcohol advertising ensures that it can hardly be missed by them. Indeed, the evidence is that even young children are aware of alcohol advertisements and tend to remember them. Manufacturers further reduce the chances of young people failing to get the message by sponsorship of sports teams and events and music concerts having particular appeal to the young. There is also evidence that underage drinking and the likelihood of alcohol problems in later life are closely

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related to positive expectations of benefit for alcohol use, precisely the expectancies advertising is designed to encourage. The Act Direct advertising of tobacco products was rampant before the enforcement of tobacco control legislation in India. Billboard advertising of international and domestic brands of cigarettes and chewable forms of tobacco was a common sight. But now all direct advertising of tobacco products in all media has been prohibited with the enforcement of National Legislation. Cable Television Network (Regulation) Amendment Bill, 2000, completely prohibits cigarette and alcohol advertisements, which directly and indirectly promote sale of these products (enacted from September 8, 2000). The Real Scenario In India the Alcohol industry is following exactly the same marketing and promotion tactics and strategies as are employed by the Tobacco Industry globally and especially in developing countries. Trends in Tobacco Advertising and Promotion before the enforcement of tobacco control legislations in India Direct advertising of tobacco products was rampant before the enforcement of tobacco control legislation in India. Billboard advertising of international and domestic brands of cigarettes and chewable forms of tobacco was a common sight. Surrogate Advertising or Brand Stretching was also common. Sponsorship of sports events and cultural events by tobacco companies were methods of promoting tobacco brand names. e.g. Wills (brand of Indian Tobacco Company - ITC, a subsidiary of British American Tobacco) used to sponsor Indian cricket team/matches. Tennis tournaments were sponsored by Gold Flake cigarette (brand of Godfrey Phillips India Ltd. - GPI, a subsidiary of Phillip Morris). Boat racing was sponsored by

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Four Square cigarettes (brand of GPI). Polo events and golf were sponsored by Classic (cigarette brand of ITC). Charms, a cigarette brand sponsored the Spirit of freedom concert, a musical event. Manikchand, manufacturers of gutkha (chewing tobacco), patronized the Filmfare awards ceremony. Advertising and Promotion after the enforcement of tobacco control legislations in India All direct advertising of tobacco products in all media has been prohibited with the enforcement of National Legislation. Surrogate advertising through brand stretching is a common practice being employed by some tobacco companies. 502 Pataka a popular beedi (local Indian cigarette) brand is now being advertised as 502 Pataka Chai (tea). Advertising paan masala/ mouth fresheners bearing the same brand name as tobacco products is a common practice. The Red and White Bravery Awards are organized by GPI to advertise and promote Red & White brand of their cigarettes. Trends in Alcohol Advertising and Promotion Billboard advertising of international and domestic brands of alcohol through surrogate means is widely being employed by alcohol industry worldwide. Sponsorship of sports and cultural events is widely being undertaken by alcohol companies in India. Royal stag sponsors Indian cricket matches and cricket players. Shaw Wallace sponsored the Indian open golfing event as the Royal Challenge Indian open and the Kenya cricket team. Seagram sponsors events such as Chivas Regal Polo championships and Chivas Regal Invitational golf challenge for corporates. Indirect Advertising

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Teachers whiskey has launched the Teachers Achievement Awards. Other sponsored awards and events include: Smirnoff international fashion award. Lakme India Fashion Week was sponsored by Seagrams Blenders pride. Surrogate Advertising Aristocrat a popular whisky brand is being advertised as Aristocrat Apple Juice. Mc.Dowells is advertised as sodas, Kingfisher has packaged water bottles. Some alcohol brands have introduced brand promotional items such as: Haywards 5000 has darting kits, Bacardi advertises through its Bacardi blast album and also advertises through parties tied up with rediff.com. Path to alcohol control Regulatory strategies for alcohol control thus will have to be formulated on same lines as tobacco control. This will require initiating efforts for alcohol control at national, regional and international levels. Factors Contributing to Global Support for Tobacco Control: Public Outrage Till the time tobacco use was viewed as an individuals problem, people and policy makers maintained a Luke warm attitude towards introducing any regulatory measures. International research confirming ill effects of second hand smoke helped in influencing peoples and policy makers opinion related to tobacco control. Impact on legislation in India included initiatives such as: the Supreme Court of India banned smoking in public places. NGOs played a crucial role in creating a supportive environment. Youth led campaigns appealing the government for a comprehensive ban on tobacco advertising through NGOs such as HRIDAY (Health Related Information Dissemination Amongst Youth)-SHAN (Student Health Action Network), created a supportive environment to enforce tobacco control measures.

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A LAST WORD
The future of Indian advertising is bright, provided that those in the profession acknowledge the social responsibility of advertising and conduct themselves in such a way as to be seen as an important part of the economic development effort of the country. Indias cultural diversity poses a huge communication challenge, but this should not be used as an excuse to play to the gallery Advertising is absolutely essential. Unless a product sells, the investment made in the project is rendered in fructuous. But the trouble with Indian advertising is that it is not rooted in our ethos. It is westernized, partly because most of our advertisings aimed at the urban consumer. But there should be a mix, so that advertising can sell products and yet retain the Indian flavor. advertising has improved tremendously over the last four decades in terms of technical excellence, particularly graphics and copy, but has not made much progress in terms of relating to the consumer. Good advertising is advertising that sells. Unfortunately most of our advertisements are made with a view to impressing peers rather than the consumer. We still have to go a long way in having television audience research. Now we rely upon solely the television rating points (TRPs) and audience research conducted by the DD. From the point of view of generating an interesting discussion, probably the case study on surrogate advertising would win hands down. It talks of the classic struggle between mortality and money, both for the regulatory bodies as well as the corporates involved. The governments ire is understandable. As it is dilemma. The industry is significant. The government recognizes it. It is torn between the need to be practical and encourage the sales of the items that contribute hugely to the exchequer, tobacco and liquor companies are among the most heavily taxed sectors in the economy and the need to take the high moral ground and discourage their consumption. Hence its decision to first ban advertisements and marketing of such products and then turns a blind eye to violations of the ban.

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Sociological studies have shown that, in India, a significant share of income of a large section of the population is spent on liquor, potentially leading to financial distress and health hazards. According to the International Wine and Spirit board, a liquor industry publication, there will be a jump in the umber of people reaching the legal age of 25 within next few years. The implication is that the problem is going to grow. Inspite of this, the consumers shod be given a choice. In the absence of this, there will be bootlegging and adulterated products lining up on the shelves. However the fact cannot be denied that anyone old enough to drink will surely recall the old words as soon as the tune comes in television. Surrogate advertising might work well for the established brands. Foe example, when they mention Bacardi Blast everybody knows what they are talking about. Either the advertising for a particular product category is legal or not. If illegal then, no one in that category should be allowed to advertise. However, if something can be legally manufactured and sold then why not such a product cannot be advertised. By disallowing such advertising even after providing strict guidelines, nobody is being done a favor, neither the consumer who is then bereft of choice nor the media who needs the advertisers money. Moreover, by disallowing advertising competition is reduced, which will prevent new brands and better products to be introduced in the market and encourage things like surrogate advertising. While advertising messages do influence purchase decisions, merely disallowing sponsorships and advertising of tobacco products is not going to stem the habit among hardcore users. Also as long as the sale of cigarettes and tobacco is legal, youth at an impressionable age will find means of sourcing it. After all, the pleasure is more to indulge in a forbidden activity.

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And, that is the real reason as to why the ban on advertising for such categories is truly consumer unfriendly. The solution would be to allow advertising in such categories but charge a tax on such advertisements from the media to use it to create and advertise anti-smoking and control your drinking advertisements. The best agencies would be happy to work on such campaigns. Drinking and smoking habits are not about to vanish and this is the ground reality, we have to be factored in. so, if nobody has taken the initiative the industry to present its point of view, then the time to do it is now! Before decisions are taken and laid down forever

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BIBLIOGRAPHY
http://www.prsi.in/11aug07.htm http://images.google.co.in/imgres http://bcognizance.iiita.ac.in/apr-jun06/volteface.htm http://www.indianjcancer.com/text.asp?2005/42/2/94/16699 http://www.vikalpa.com/pdf/articles/2001/2001_apr_jun_51_57.pdf http://burningbrain.org/tobaccoinmovies/ www.businessstandard.com/strategist/storypage.php REFERENCE 1. "Tobacco ads likely to be stubbed out by Jan-end", Hindustan Times, 22 January 2004. 2. "Election Commission to clear all poll ads", Hindustan Times, 14 April 2004. 3. The Icfai Journal of Consumer Behavior, Vol. 2I, No. 5, pp. 25-47, December 2007 4. Framework convention alliance- Ban on surrogate tobacco ads.

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