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Advertising ethics and consumer perception towards surrogate advertising

Advertising Ethics and viewer’s perception


towards Surrogate Advertisements

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Advertising ethics and consumer perception towards surrogate advertising

SECTION I

SYNOPSIS…
“It's difficult to digest that an industry which is allowed to sell its products, is banned
from advertising the same products, despite the fact that the commercials carry health
warning, advising the customers to use the product in temperance.”

- Prof. Atul Tandan, Director, Mudra Institute of Communications, in July 2002.

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Advertising ethics and consumer perception towards surrogate advertising

WE live in a complex world where we respond in extreme ways to what we view as


extreme pressures. The ethical debate rages around surrogate mothers. Yet it is difficult
to deny they perform a great service for those who use them.

Closer home, surrogate advertising has been around ever since someone decided that
certain things were probably not good in the interests of the community at large.

Who is anyone to decide whether I can sip my daily quota of what started off as eau de
vie, or the water of life and then rapidly transformed itself into its present day avatar,
Scotch? People have spent years perfecting a heavenly blend of spirits, and imparted to it
the smoky flavour that could come only from the peat of Scotland and the pristine
Highland water. Several others have made methode champenoise into a fine art and have
succeeded in bottling the very soul of France in green bottles that, when uncorked, seem
to scream celebration.

Who has the right to decide if I can deeply inhale the rich aroma and full-bodied flavour
of carefully rolled Virginia tobacco? Every time I nonchalantly put one of those sticks to
my lips I feel I have mounted a wild mustang and I am riding down the lonely mountain
trails of Colorado.

It is legal to manufacture liquor and cigarettes or beedis. It is legal to sell cigarettes at


every roadside stall, even to unsuspecting children. It is illegal to advertise it.

And that is precisely why you have to live with surrogate advertising.

Remember the television commercial where every sip of some mysterious amber liquid
made the front of a beautiful lady's dress go lower and lower? Remember the commercial
where a golf fanatic tried a difficult putt into an overturned glass inside an aircraft?
Remember the `Keep Walking' series of advertising? Well, surprise, surprise. They were
really not for apple juice or business case studies or cocktail stirrers. They were the result
of a market reality where a manufacturer who has the right to sell his products does not
have the right to advertise it.

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Advertising ethics and consumer perception towards surrogate advertising

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.

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.

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Advertising ethics and consumer perception towards surrogate advertising

This project of mine focuses on advertising ethics and consumer perception towards
surrogate advertising. It also focuses on primary research wherein I have collected 50
samples of what kind of perception does respondents have towards surrogate advertising.
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.

I hope this project of mine will help for future references.

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.

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Advertising ethics and consumer perception towards surrogate advertising

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 Gilbey’s Green Label. The Ministry also put some other brands
---Smirnoff Vodka, Hayward’s 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.

To put in the place of another: a: to appoint as successor, deputy, or substitute for oneself.
Surrogate marketing is used in two contexts: the first is when a company "farms out" the
entire marketing function and the group providing the service is called a "surrogate
marketing department."

The second is what is happening in India with respect to the ban on tobacco and alcohol
advertising. Companies in banned industries are introducing brand extensions with
products that are legal to advertise with the same brand name as the banned product. One
liquor company introduced apple juice with the same brand name as the liquor. The idea
is the companies can advertise freely the extension - thus keeping their banned-from-the-
media products in the minds of the customers. So the apple juice, for instance, is the
surrogate for the liquor in the ads. The companies also don't care much about the sales of
the surrogate products - for instance, I read that the apple juice isn't even readily available
to buy throughout the company.

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Advertising ethics and consumer perception towards surrogate advertising

This loophole that the tobacco and liquor companies are exploiting is upsetting the
legislature because every apple juice ad that reminds the consumers of the liquor is a slap
in the lawmakers' faces. But, they also don't quite know what to do about it

In general, surrogate marketing is when you promote one product or service in the hopes
of selling another. Why you would want to do that varies. The best reason is that you
aren't able to legally. But other reasons might be because the two products sell better
together - for instance, you may make a product and it requires service - which you don't
provide. You can market a service provider - the surrogate - who will only use your
product.

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Advertising ethics and consumer perception towards surrogate advertising

SECTION II

BASICS…
The word advertising originates from a Latin word advertise which means to turn to. The
dictionary meaning of the term is “to give public notice or to announce publicity”.
Advertising as a term is used by many to cover almost any topic in the promotional area
of marketing. Advertising is a marketing vehicle that is designed for the masses.

The American Marketing Association defines advertising as

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Advertising ethics and consumer perception towards surrogate advertising

“any paid form of non personal presentation and promotion of Ideas, goods or services

by an identified sponsor.”

This definition can be divided into 4 parts:


1. Paid form
The advertisement is paid for by an advertiser and as result of this, the advertiser
exercises control over advertisement. He would mostly decide what the advertisement
will say and where it is placed. As he invests money, he would also be interested to know
its results.

2. Non – personal presentation


Advertising is non-personal selling. It is directed towards mass selling by way of mass
communication. It makes use of various media to deliver the message to the customers.
At times, advertising message may try to give the impression of personal appeal but it
cannot be truly personal. Advertising is an inexpensive way to reach the mass market.
The cost of a personal call involves huge money whereas a mass advertising exposure
will cost only a fraction of the investment.

3. Ideas, goods or services


Advertising also sells ideas. Some firms may use advertisements to sell the idea that if an
investor puts his money in a certain plan of public deposits over a given number of years,
an individual with small income can become a rich man. Advertising may also be used to
sell the ideas that they need “your” help

Example
Mumbai Traffic Police advertise asking drivers and pedestrians to cooperate to help the
department to maintain normal traffic flow, free of bottleneck and accidents.

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Advertising ethics and consumer perception towards surrogate advertising

When people think of advertising they imagine an advertisement is for tangible objects.
But these days this perception is held wrong as many advertisements sell services e.g.
Banks, insurance, restaurants etc.

4. Identified sponsor
Advertising tries to influence the recipient of the message. Advertising wants the sponsor
of the message be known. Advertisement without an identified sponsor is a wasteful use
of advertising budget. The advertiser is interested to identify his product with maker and
the maker with the product.

Advertising is a form of communication with the public. The communication is usually


one-sided and in one direction from the advertiser to public. The members of the public
are free to respond to it on their own.

Advertising is an identified communication. The advertiser signs his name to his


advertisement for the purpose of publicizing identity.

Remember, each advertising is a specific communication that must be effective, nor just
for one customer but for many target buyers.

Nothing can be more important to the success of your advertising program than a
thorough understanding of what advertising is and how it operates.

ETHICS IN ADVERTISING…
Inspite of the growing importance of advertising in recent years; as the quantity of false,
misleading and offensive advertising has increased it has resulted in consumers having an
increasing disbelief in advertising, and a growing resentment of it. Misleading, false
advertising also constitutes unfair competition. It could lead to market-place disaster or
even litigation. If this kind of advertising continues, it won't be long before statutory
regulations and procedures are imposed which make even fair truthful, decent advertising

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Advertising ethics and consumer perception towards surrogate advertising

cumbersome if not impossible. This certainly will affect your ability to compete and
grow.

Ethics is a choice between good and bad, between right and wrong. It is governed by a set
of principles of morality at a given time and at a given place. Ethics is related to group
behavior in the ultimate analysis, setting thus the norms for an individual to follow in
consistence with the group norms.

Advertising too, has its ethical values. Advertising communications may be artfully
presented facts but the same are subservient to ethical principles. In order to be
consumer-oriented, an advertisement will have to be truthful and ethical. It should not
mislead the consumers. If it so happens and word does get out, the credibility is lost and
the communication becomes ineffective rather futile.

Advertisements truth should be viewed from the consumer’s point of view, and not in the
narrow legalistic frame in order to find a loophole and to get out after an irresponsible
action.

Many times a clear line of demarcation between truth and lies is difficult to establish. But
the advertisement is as much judged by its impact as by its acceptance by the consumers.
 What it promises must be there in the performance of products.
 Advertisements should not be indecent and obscene.
 Gambling or to encourage gambling is against ethical code.
 Endorsement of products by celebrities who are opinion leaders is also sometimes
criticized for spreading falsehood. Especially if the word gets out that the celebrity
has endorsed without actual personal experience, it can have a very detrimental effect
on consumers.

As advertising a social process, it must honour the traditional norms of social behavior,
and should not affront the moral senses of a society.

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Advertising ethics and consumer perception towards surrogate advertising

In order to enforce an ethical code throughout the world ‘Self – Regulation’ is followed.
There are self-regulation bodies throughout the world for e.g. In UK the self – regulation
body is The Advertising Standards Authority, In Ireland The Advertising Standards
Authority for Ireland (ASAI) and in India we have Advertising Standards Council of
India (ASCI). It is a non-profit organization set up by 43 founder members who are
involved with advertising in one way or the other. ASCI’s propose is to adjudicate on
whether an advertisement is offensive and its decision will be binding on its members.

The Advertising Standards Council of India (1985) has adopted a Code for Self-
Regulation in Advertising. It is a commitment to honest advertising and to fair
competition in the market place. It stands for the protection of the legitimate interests of
consumers and all concerned with advertising, - advertisers, media, advertising agencies
and others who help in the creation or placement of advertising. As the Code becomes
increasingly accepted and observed pro-actively, three things will begin to happen.
1. Fewer false, misleading claims
2. Fewer unfair advertisements
3. Increasing respectability

‘Ethics’ is very subjective topic, what is ethical for one person may not be ethical for
another. The same subjectivity also applies to countries. Factors like culture taste habits
etc influences our perception of ethics.

Ethics in advertising is very important in order to protect the consumers. In order to


safeguard this ethics in advertising through out the world self – regulation is followed. In
India as we have seen the self-regulation authority is Advertising Standards Council of
India (ASCI).

Self – regulation bodies complement the legal framework of the country. Unlike the
censor board the self - regulation body cannot first see the ad and then give it clearance to
be aired. In fact the self – regulation body cannot take any concrete action against the
violators of the code, but the self – regulation bodies ask the media to stop airing the

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Advertising ethics and consumer perception towards surrogate advertising

advertisement. In India some of the members of ASCI are from the media. When any ad
is upheld by ASCI, ASCI informs the advertiser as well as the media and the media stops
the ad from being aired.

In India when an ad is upheld, 80% of the advertisers clarify their claims or withdraw
their advertisements. ASCI as an organisation is very reactive i.e. only if there is a
complaint action will be taken. When there is a complaint against a certain ad the
company is informed and the company makes presentations to the general secretary of
ASCI and then he decides whether the ad is upheld or not.

The reason behind this could be:


 The typical Indian mentality ‘There are other people who should complaint’ or ‘If I
don’t like something I shouldn’t watch it’.
 People aren’t aware that there is an organisation they can report to in case they find
an ad offensive.

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Advertising ethics and consumer perception towards surrogate advertising

ASCl’s MISSION
ASCI have one overarching goal: to maintain and enhance the public confidence in
advertising.

ASCI seeks to ensure that advertisements conform to its Code for Self – Regulation
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 advertising,
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 (CCC) which takes into account the view point
of the advertiser, and an appropriate decision is communicated to all concerned.

ASCI endeavors to achieve compliance with its decisions through reasoned persuasion
and the power of public opinion.

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Advertising ethics and consumer perception towards surrogate advertising

SURROGATE ADVERTISEMENTS…
Surrogate advertising relates to advertising by duplicating the brand image of a product in
order to promote another product of the same brand, the advertising for which is
otherwise banned. In such advertisements, though the companies directly advertise a
different product, they intend to advertise indirectly, a banned product such as liquor or
tobacco. Consumers associate such advertisements with the corresponding banned
product. The products are thus indirectly advertised. This, in turn, would influence the
behavior of their audience. This paper focuses on analyzing the perceptions of the
respondents on 'surrogate advertising', an unethical advertising practice, presently
followed by corporates. It concludes that there exists a significant association between
the aided recall of surrogate advertisements and the brands, with the age of the
respondents. In general, the perceptions that govern the attitude of respondents towards
surrogate advertisements are more on the negative. Irrespective of the positive
perceptions, majority of the people perceive the phenomena of surrogate advertising as
negative for the society immoral and unethical.

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. 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

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Advertising ethics and consumer perception towards surrogate advertising

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 Ministry’s 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 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

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Advertising ethics and consumer perception towards surrogate advertising

event. Some companies also promoted their product through corporate advertising,
distributing free gifts like Caps and T-Shirts 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.

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 India’s
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, Seagram’s 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.

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Advertising ethics and consumer perception towards surrogate advertising

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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Advertising ethics and consumer perception towards surrogate advertising

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.

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Advertising ethics and consumer perception towards surrogate advertising

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 like,

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 that’s not an easy task. For instance, how do you portray the 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?
1. Consumers - because we have to put up with the lameass, stupid advertising
that’s designed to sell booze/ciggies but pretends to be all about water or apple
juice! It’s like everyone knows what’s going on - the manufacturers know what
the real reason for the ad is, the consumers know what’s really been advertised,

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Advertising ethics and consumer perception towards surrogate advertising

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?
2. 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 I’ve 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:
1. Making transparent laws banning surrogate advertisements for different products
under a single brand name, by amending the Trade Marks Act, for instance.
2. 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.
3. Asking the electronic and print media to adhere to the advertisement codes and
not encourages surrogate advertisements.
4. Calling on the ASCI address complaints received from consumers against
surrogate advertisements and take appropriate actions immediately.
5. Creating a consumer awareness programme to help people understand the
negative impact of surrogate advertisements.
6. Adopting strict laws to penalize those companies featuring surrogate
advertisements without any real existence of the product.

7. 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.

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Advertising ethics and consumer perception towards surrogate advertising

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 panel’s directive to the extent
that the ads of a liquor company – that purportedly makes apple juice after drinking
which anything can happen (‘kuch bhi ho sakta hain’) – have been taken off air. (Exhibit
2)

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Advertising ethics and consumer perception towards surrogate advertising
Exhibit 2

A man sitting at a bar nursing his drink. A ravishing lady in black walks in and stations herself
opposite our man.

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

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

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

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

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Advertising ethics and consumer perception towards surrogate advertising

... who too was doing the same with her drink. MVO: AC Black apple juice. Kucch bhi ho sakta hai. Kucch
bhi.

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Advertising ethics and consumer perception towards surrogate advertising

LATEST SURROGATE

ADVERTISEMENTS
Royal Challengers in IPL 20-20 cricket
match

Haywards 5000 soda advertisement

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Advertising ethics and consumer perception towards surrogate advertising

SECTION III

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Advertising ethics and consumer perception towards surrogate advertising

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.

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Advertising ethics and consumer perception towards surrogate 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?

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Advertising ethics and consumer perception towards surrogate advertising

SAMPLING PLAN

1. Sampling Method: Conveniently Sampling.

2. 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.

3. Sample Size: 50

4. Sample Area: Borivali and Mira Road.

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Advertising ethics and consumer perception towards surrogate advertising

RESEARCH DESIGN
1. 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.

2. Instrument Design, in the form of questionnaire and interviews with the


respondents.

LIMITATIONS OF RESEARCH
1. Limited Sample Size (50)
2. This study is restricted to the geographical limits of Mumbai.
3. Limited period of survey

IMPORTANCE OF STUDY
The study will help to find the people’s perception of surrogate advertisements.

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Advertising ethics and consumer perception towards surrogate advertising

Data Analysis

120

100
96

80

60

40

20
Percent

0
Y ES NO

seen advertisemen t on t.v

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

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Advertising ethics and consumer perception towards surrogate advertising

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

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


tabulation Count
seen advertisement of Total
cigrates or alcohol
YES NO
Seen advertisement YES 41 7 48
on TV
NO 2 2
Total 41 9 50

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

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Advertising ethics and consumer perception towards surrogate advertising

50

40 9

30 32

20

awareness of banned
10
3
NO
6
Count

0 Y ES
Y ES NO

seen advertisement of cigrates or alcohol

Out of the 41 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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Advertising ethics and consumer perception towards surrogate advertising

30

29
28

26

24

22

20
20
Count

18
Y ES NO

a d v e rtis e m e n t re q u ire m e n t

29 of the respondent said that cigrates and alcohol do require advertisements in this
competitive world. But 20 of them where not agree to this fact.

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Advertising ethics and consumer perception towards surrogate advertising

40

36

30

20

13
10
Count

0
M is s in g Y ES NO

in f o r m a tio n o f s u r r o g a te a d s

Out of 50 respondent 36 said that they have knowledge what surrogate ads are they form
the 72%. While 13 of them don’t know about the surrogate advertisements.

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Advertising ethics and consumer perception towards surrogate advertising

NO
32.0% Missing
4.0%

Y ES

64.0%

When the respondent who knows about surrogate ads asked that do they recall the
original brand while looking at it 64% of them recall the product 32% said no and 4%
have not given their view.

Information of surrogate ads * Product recall Cross tabulation Count

Product Recall Total


YES NO
Information of YES 29 7 36
Surrogate ads
NO 3 9 12
Total 32 16 48

The above cross tabulation shows that the surrogate as helps the organisation to advertise
their product in a different way and make a brand recall at the time of purchase.

36
Advertising ethics and consumer perception towards surrogate advertising

37
Advertising ethics and consumer perception towards surrogate advertising

v ie w to wards su rrogate ads


ethic al
22.92%
n =11 unethic al
s hould be banned
33.33%
n =16 no c omments

Pies s how c ounts

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 Total
surrogate ads
ethical unethical should be banned no comments
Advertisement YES 8 11 1 8 28
requirement
NO 3 6 3 8 20
Total 11 17 4 16 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

38
Advertising ethics and consumer perception towards surrogate advertising

required but surrogate ads are unethical to do that, while 8 of them where agree that it is
ethical to do the surrogate advertisement.

39
Advertising ethics and consumer perception towards surrogate advertising

30

20 21

10
10
8 8
Count

0 2
entertaining informative none of the above
boring and disturbin misguiding

view towards present ads


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.

40
Advertising ethics and consumer perception towards surrogate advertising

ad appeal
YES
NO

Pies show counts


40.82%
n=20

59.18%
n=29

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.

41
Advertising ethics and consumer perception towards surrogate advertising

28

27
27

26

25

24

23

22
22
Count

21
Y ES NO

fa m ily m e m b e r co n su m in g su ch p ro d u ct
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

42
Advertising ethics and consumer perception towards surrogate advertising

Product recall Total


YES NO
Family memberYES 19 8 27
consuming such
product
NO 13 8 21
Total 32 16 48

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 doesn’t use the product but then also
they recall the original brand.

Respondent’s profile

43
Advertising ethics and consumer perception towards surrogate advertising

30

23
20

13
10

7 7
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 Total
YES NO
age group of respondent 15-18 2 5 7
18-21 5 8 13
21-24 10 13 23
24 and 3 4 7
Above
Total 20 30 50

44
Advertising ethics and consumer perception towards surrogate advertising

40

30
29

20

10 11

6
Count

4
0
< 10000 10000-100000 100000-500000 > 500000

family income per month

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.

45
Advertising ethics and consumer perception towards surrogate advertising

30

26

20
Count

12 12
10
under graduate graduate post graduate

education level of respondent


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

46
Advertising ethics and consumer perception towards surrogate advertising

OBSERVATION & FINDINGS

On analyzing the data following conclusions were drawn:

1) Majority of the respondent were agreeing to the fact that advertisement is


requiring for such product in these competitive world.

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

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

4) Original Brand recall is high among the respondents.

5) Strong facts that the surrogate ads do not induce the consumer to purchase the
original brand, they just remind the brand existence.

6) 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.

7) 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.

47
Advertising ethics and consumer perception towards surrogate advertising

SECTION IV
CASE STUDY

48
Advertising ethics and consumer perception towards surrogate advertising

BANNING LIQUOR ADVERTISEMENTS – AGAIN


In June 2002, the Information and Broadcasting (I&B) Ministry of India ordered leading
television (TV) broadcasters to ban the telecast of two surrogate ads of liquor brands,
McDowell’s No. 1 and Gilbey’s Green Label. The Ministry also put some other brands –
Smirnoff Vodka, Hayward’s 5000, Royal Challenge Whiskey and Kingfisher beer – on a
‘watch list.’ The surrogates used by these advertisements ranged from audiocassettes,
CDs and perfumes to golf accessories and mineral water.

By August 2002, the I&B Ministry had banned 12 advertisements. Leading satellite TV
channels, including Zee, Sony, STAR and Aaj Tak were issued show-cause notices
asking them to explain their reason for carrying surrogate liquor advertisements. The
channels were asked to adhere strictly to the Cable Television Regulation Act 1995
(Cable TV Act, 1995). As a result, Zee and STAR stopped telecasting the advertisements;
Aaj Tak and Sony soon followed suit. In addition, the I&B Ministry hired a private
monitoring agency to keep a watch on all advertisements for violations of the Act.

These developments led to heated debates over the issue of surrogate advertising by
liquor companies. Though the liquor companies involved protested strongly against the
I&B Ministry’s decision, they had no choice, but to comply with the regulations.
Analysts remarked that the government’s policy was hypocritical. One said, “On the one
hand they allow these ‘socially bad’ products to be manufactured and sold (in order to
garner revenues) and then they deny the manufacturers the right to propagate knowledge
of their products in order to drive sales. If something is bad and cannot be advertised,
why allow it to be sold at all?”

Meanwhile, the government also seemed to be in dilemma. On the one hand, it had to
encourage the sales of liquor and tobacco because they were the highest taxed sectors of
the Indian economy.

On the other hand, there was also the need to take the high moral ground and reduce the
consumption of such products.

49
Advertising ethics and consumer perception towards surrogate advertising

The Indian liquor industry

The Indian liquor industry can be divided into two broad segments: Indian Made Foreign
Liquor (IMFL) and country-made liquor. IMFL comprises alcoholic beverages that were
developed abroad but are being made in India (whisky, rum, vodka, beer, gin and wine),
while country-made liquor comprises alcoholic beverages made by local breweries.
While many players were present in the IMFL segment, breweries in the unorganized
sector accounted for almost 100% of the country-made liquor segment.

During 1999-00, the Rs 60 billion Indian liquor industry grew at the rate of 10-12%.
While IMFL was consumed by the middle and upper classes of society, country-made
liquor was consumed by the economically backward classes. In India, 40-50% of all
males and 1% of all females consumed alcohol. Almost 62% of the drinkers could be
classified as light drinkers (i.e. social drinkers), 29% percent as moderate drinkers, and
about 9% as hard drinkers. The organized industry was dominated by Shaw Wallace and
United Breweries, which together accounted for around 53% of the total market.

INDIAN LIQUOR INDUSTRY – PLAYER PROFILE


Company Leading Brands
United Kingfisher (Beer), McDowell’s No. 1 and Bagpiper
Breweries (Whiskey)
Hayward’s, Antiquity, Royal Challenge, Director’s Special
Shaw
(Whiskey), White Mischief Vodka, Golconda, Hi-Five
Wallace
Beer, Lal Toofan Beer
Jagatjit Aristocrat Whiskey, Captain Henry, Bonnie Scot, Binnie’s
Industries Fine
8 PM Rare Blend Whiskey, Contessa XXX Rum, Whyte
Radico
and Mackay Scotch Whiskey, Contessa Premium Extra Dry
Khaitan
Gin, Contessa Deluxe Doctor’s Brandy, Contessa Vodka
Source: ICMR

The liquor industry was heavily regulated by the government. Companies were not
allowed to expand capacity without prior approval from the concerned state government.

50
Advertising ethics and consumer perception towards surrogate advertising

The distribution of liquor was also controlled in many states through auction system, the
open-market system and the government-controlled system. Under the auction system,
the government fixed a floor price for the shops and the bidders had to quote prices. The
license was given to the highest bidder.

States following the open-market system gave companies freedom to choose their
distributor and to determine the price and the discounts. In the government-controlled
system, liquor was distributed by state agencies such as BEVCO (in Kerala) and the
Andhra Pradesh Beverage Corporation (in Andhra Pradesh). There were around 25,000-
27,000 licensed retail sales outlets in the country, in addition to the bars, pubs, hotels and
restaurants serving liquor. There were restrictions on the location of these outlets and
their business hours.

Liquor producers spent heavily on advertising on the electronic media because of the
reach of satellite and cable TV. Though the broadcasters were bound by a 30-year old
advertising code which banned them from airing advertisements that related to or
promoted cigarettes and tobacco products, liquor, wines and other intoxicants, the telecast
of such advertisements continued blatantly over the years. This was because the code was
only a code of conduct, not a legally enforcing code. Doordarshan, the state-owned TV
channel, was the only one that adhered to it.

The broadcasters were also bound by the Cable TV Act, 1995. However, as most of the
channels were uplinked from outside India, the Act did not apply to them. Moreover,
satellite channels did not want to follow this code because they garnered about 50% of
their advertisement revenues from liquor.

In the peak seasons for the sale of liquor, this revenue almost doubled. In the first half of
1998, STAR reported revenues of Rs 127.9 million from liquor advertisements while Zee
reported revenues of Rs 40 million. The regional channels managed to get about Rs 0.70
million in revenues. Since liquor ads generated such high revenues, Doordarshan also
planned to air such ads in 2000. With a reach of 70 million homes, it expected to acquire
a significant share of liquor advertisement revenues. Doordarshan estimated that its

51
Advertising ethics and consumer perception towards surrogate advertising

revenues would increase three times from cricket matches alone if it were permitted to air
liquor advertisements.

Even as Doordarshan was considering the above option, the I&B Ministry barred TV
channels from telecasting liquor and cigarette advertisements in September 2000. With
pressure increasing from public interest groups to ban liquor advertisements, the
government had to make amendments to the Cable TV Act 1995. While the Indian
government could not take action on most of the channels for violating the codes, as they
did not uplink from India, the cable operators were punishable under Indian law. The
I&B Ministry also took steps to monitor the advertisements broadcast by these
companies.

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. (SWC), 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 products through corporate
advertising, distributing free gifts like caps and T-shirts with the brand name and using
glow-signs outside the retail outlets. However, as the TV was the most effective medium
of advertising, surrogate advertising on TV became more popular.

About surrogate brands

Even after the ban, liquor companies continued to advertise their drinks in the form of
surrogate advertisements. In this type of advertisement, a product other than the banned
one is promoted using an already established brand name. Such advertisements or
sponsorships help in brand building and contribute to brand recall. The product shown in
the advertisement is called the ‘surrogate.’ The surrogate 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
using a liquor brand name also falls in the category of surrogate advertising.

52
Advertising ethics and consumer perception towards surrogate advertising

In late 2000, a group of broadcasters, who were members of the Indian Broadcasting
Foundation (IBF), submitted their recommendations on surrogate advertising to the I&B
Ministry. Under the recommendation, surrogate advertising would comprise ‘the products
of the liquor companies, which do not have a minimum turnover of Rs 10 million and
where the products are not manufactured in bulk quantity.’

The broadcasters also urged the government to allow them to telecast socially responsible
advertisements sponsored by liquor companies. They requested permission to telecast
such advertisements because the Indian television industry’s revenues had reportedly
decreased by about 7-11% (about Rs 1 billion per annum) after liquor and tobacco ads
were banned.

After more than six months, in mid-2001, the I&B ministry accepted the
recommendations of the broadcasters. However, this decision was not formally
announced because there was same dispute over the issue of hoardings of these ads at
sports events being broadcast on television. The I&B Minister Sushma Swaraj said, “We
have sought the sports ministry’s comments on the issue and are awaiting their response
before announcing the norms. If a company makes a product other than liquor (or
tobacco), which has a turnover of Rs 1 crore (Rs 10 million), then the firm is entitled to
use the same brand for that product.” She announced that a formal decision would be
made after the sports ministry’s comments were received.

In the mean time, some liquor producers entered new segments under the liquor brand or
advertised these products under the liquor brand. Most of liquor producers entered into
the packaged water segment, such as Kingfisher Mineral water. Some companies seemed
to be using the ban to their advantage. McDowell’s mineral water and soda brands served
as surrogates for their liquor brand and also generated additional revenues for the
company. To expand this segment, the company franchised its bottling and sale of
purified drinking water and soda and made them available in more than 75 cities in the
country.

53
Advertising ethics and consumer perception towards surrogate advertising

In early 2001, SWC started marketing its range of golf accessories under the liquor brand
Royal Challenge. It also launched a new range of golf accessories, including graphite
shafted golf sets (with lifetime warranty), golf bags, caps, and gloves. SWC also started a
quarterly golf publication that which provided information on the latest happenings on
golf. The company also entered into agreements with the Indian Golf Union and the
International Management Group to promote the game in India. It also announced that
India’s flagship Golfing Event – the Indian Open – would be sponsored by the company
till 2006.

In late 2001, SWC announced its decision to enter the packaged water market, under its
well-known beer brands Hi-Five and Lal Toofan. In 2002, it named it soda water Royal
Challenge Premium Sparkling Water to leverage the company’s flagship liquor brand
Royal Challenge. According to industry watchers, SWC was launching Sparkling Water
to use it as a surrogate for its liquor brand. They were of the view that, following the ban
on advertising, liquor companies were forced to look at innovative ways of building their
brands.

The number and range of surrogate advertisements increased as liquor producers started
sponsoring movies, music shows, and other programs attracting youth. For instance,
Seagram’s Royal Stag was promoted by sponsoring movie-related activities and Indian
pop music under the banners Royal Stag Mega Movies and Royal Stag Mega Music. It
promoted its 100 Pipers brand by sponsoring a series of performances by fusion music
artists under the name 100 Pipers Pure Music. Blenders’ Pride sponsored a series of
performances by troop dancers and artists under the banner of Blenders’ Pride Magical
Nites. Seagram also sponsored events such as the Chivas Regal Polo Championships and
the Chivas Regal Invitational Golf Challenge for corporates.

In late 2001, television broadcasters began airing socially responsible advertisements


sponsored by liquor companies, even though the government had not issued any
notification permitting the airing of socially responsible ads on TV. Star TV and Sony
were among the leading broadcasters telecasting such advertisements included STAR TV

54
Advertising ethics and consumer perception towards surrogate advertising

and Sony. The advertisements were telecast during Christmas and New Year’s Eve. One
of these ads by Seagram wished the viewers with ‘Season’s Greetings.’

Another advertisement of Seagram read, “Tonight, when it’s one for the road, it’s got to
be coffee.” It’s not a liquor advertisement at all. It’s just another corporate advertisement
through a social message. It cannot be classified as a liquor advertisement because
Seagram is not a liquor brand. One must see the spirit behind an advertisement to find out
whether it’s promoting liquor or not.

Some of the broadcasters said that because the I&B Ministry was taking a long time
deciding about the use of socially responsible advertisements by liquor companies, they
had started using them without the Ministry’s consent. IBF’s Executive Director, Bhuvan
Lal, reportedly argued that there was nothing wrong with airing such advertisements
because they did not violate the government’s guidelines restricting the telecast of
direct/indirect liquor ads. The government’s guidelines stated that ‘advertisements which
lead to sale, consumption and promotion of liquor should not be allowed.’

Soon, liquor companies that had not entered into any agreements with satellite channels
for airing socially responsible and for surrogate advertisements started processing such
agreements. For instance, Whyte & Mackay began negotiating agreements with various
TV channels, including Star TV. As long as there was no ban, companies were not
interested in showing liquor advertisements in the garb of social messages. But with the
government imposing restrictions, social messages are a route to liquor advertising for
many.

By early 2002, there were many surrogate advertisements of liquor brands on satellite TV
channels. These advertisements attracted a lot of criticism. We see a brown liquid poured
into a glass under a well-known brand name, and we are told the man is drinking apple
juice! The girl who is avidly watching him immediately rewards him with a kiss. In the
same sort of way, water, soda and other harmless liquors stand in for hard liquor and beat
the ban. There were numerous other advertisements selling music cassettes, CDs, water,

55
Advertising ethics and consumer perception towards surrogate advertising

clothing, fashion accessories and sports goods – many of them accused of being sexually
provocative and offensive.

The I&B Ministry’s decision to ban such advertisements was thus viewed as a logical and
necessary step by their critics. As the authorities were finding it difficult to track down
the increasing number of violations, especially at the regional level, the Ministry hired a
private monitoring agency. The agency – Time Monitoring (Delhi-based) – was
responsible for scanning all advertisements on all private satellite channels including
regional channels. At the same time, the Confederation of Indian Alcoholic Beverage
Companies (CIABC), in a self-disciplinary move, asked all TV channels to stop
telecasting surrogate liquor advertisements.

The Debate
The banning of surrogate advertisements for liquor brands became a very controversial
and sensitive issue. Liquor producers felt that while the government allowed them to do
business, it did not allow them to do so in a profitable manner. Liquor companies argued
that the ban would severely affect the sales. The said that TV was the most effective
medium of advertising for these products and thus the restriction would hamper brand
building.

However, some analysts were of the opinion that the ban could turn out to be
advantageous for domestic players. According to a WTO agreement signed in March
2001, MNCs had 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.

Thus MNCs who had recently entered the Indian industry were expected to face
difficulties in building their brands. The ban would also affect the entry decisions of
MNCs that were planning to enter the Indian liquor industry.

Moreover, some analysts argued that the ban would not affect the established domestic
players severely. It would only affect new launches and new brand building activities of
these companies. Players who already had very strong brands (E.g. McDowell No. 1,

56
Advertising ethics and consumer perception towards surrogate advertising

KingFisher, Hayward’s and Royal Challenge) would not be affected by the ban. Apart
from reducing foreign competition, the ban was also expected to improve margins for
these players, as these companies had already spent heavily on advertising and other
promotional activities.

AD SPENDS OF LEADING INDIAN LIQUOR COMPANIES


Ad expenses
Company Year Ending As % age of Sales
(in Rs million)
McDowell Mar-00 1,089.00 13%
United Breweries Mar-00 737 28%
Shaw Wallace Jun-99 565 7%
Radico Khaitan Dec-99 78.1 8%
Jagatjit Industries Mar-99 523 13%
Source: www.indiainfoline.com

On an average, liquor companies spent about 10-12% of sales revenue on advertising,


including direct consumer promotions programs; sponsorships; and print and electronic
media advertisements. On TV alone, companies reportedly spent about 3-4% of sales
revenue. This meant that after the ban, companies could save 3-4% sales or gain in
margins. For instance, McDowell’s operating margins ranged between 5-7% and after the
ban, were expected to increase by 50%. The smaller companies in the domestic market
also seemed to have an advantage. Industry watchers felt that since distribution and reach
would become more vital after the ban, smaller companies might be acquired by the
larger ones for their distribution network, if not for their brands.

The restrictions on the liquor industry were viewed by many critics as attempts by the
government to disassociate itself from the social evils associated with alcohol
consumption. However, some critics observed that while the government imposed many
restrictions on the liquor company; it also earned a significant portion of its revenues (Rs
200 billion in 2000 for the whole country) through levies on liquor sales.

The issue of surrogate advertising involved even media companies, as they had to forego
substantial revenues as a result of the ban. According to broadcasters, the government

57
Advertising ethics and consumer perception towards surrogate advertising

should put in place a ‘reasonable’ policy, which somehow struck a balance between the
social and monetary aspects of the business of alcohol.

Future

In August 2002, broadcasting industry sources revealed plans to put in place measures for
self-regulation and monitoring, even before the I&B Ministry took concrete steps in this
regard. The broadcasters who were members of the IBF, announced that they would
come up with an advertising code specific to surrogate advertising.

Apart from formulating the advertising code, the committee would monitor the
advertisements that appeared on the TV channels.

Around the same time, apart from the 12 ads banned earlier, the I&B Ministry was in the
process of issuing show-cause notices to AXN and Zee for two advertisements promoting
Aristocrat Apple Juice and Whytehall.

The controversy surrounding debate-surrounding surrogate advertising was undoubtedly


the result of the government’s and liquor industry’s age-old tussle of revenues versus
morality. Ashoke Bijapurkar, President, B-MRP Communications said, “This brings us to
the question being debated: should surrogate advertisements be banned? I feel the real
question to be asked is: should liquor and tobacco advertising be banned?”

Following the ban, most liquor companies again explored alternative promotional
activities. Industry watchers remarked that the ban would affect the channels more than
the liquor companies themselves. The companies might actively resort to sponsorships of
sports events, dance and music programs, and other fun-filled activities. Some of the
major domestic companies were considering the use of the Internet as an effective
marketing medium.

58
Advertising ethics and consumer perception towards surrogate advertising

MARKETSHARES OF WINES, SPIRITS & LIQUOR COMPANIES


(in %)
1995- 1996- 1997- 1998- 1999- 2000-
COMPANY
96 97 98 99 00 01
McDowell & Co. - - - - - 12.05
Balaji Distilleries 9.65 11.1 9.16 8.52 8.09 8.41
Shaw Wallace & Co. 11.7 12.2 7.53 6.98 7.35 7.85
Mohan Breweries &
4.21 5.2 5.37 4.2 4.55 5.9
Distilleries
Balaji Industrial
- - 6.58 5.58 5.56 5.73
Corpn.
Pearl Distillery - - 1.2 2.82 3.42 3.6
Herbertsons 5.05 4.01 3.21 3.02 2.97 3.21
South India Corpn.
- - - 2.09 2.28 2.94
(Agencies)
Maharashtra
4.67 4.39 4.42 2.94 2.48 2.61
Distilleries
Mohan Meakin 2.96 3.38 3.02 2.38 2.16 2.24
Source: CMIE

59
Advertising ethics and consumer perception towards surrogate advertising

SALES OF BEER COMPANIES


(in Rs million)
1995- 1996- 1997- 1998- 1999- 2000-
COMPANY
96 97 98 99 00 01
United Breweries 1761.6 1833.4 3035.9 2840.3 2632.2 4315.8
Mohan Breweries &
934.2 892.9 851.5 899.3 824.7 912.4
Distilleries
Balaji Hotels &
- 342.1 690.2 588.9 331.5 708.9
Enterprises
Mohan Meakin 406.8 426.8 421.3 568 551.5 674
Skol Breweries 433.9 501.2 699.5 753.4 669.5 598.5
Mysore Breweries 394.3 393.1 408.4 561.2 532.1 532.1
Lilasons Industries - - - - 501.4 493.9
Charminar Breweries
9 189.4 395.5 423.8 454.1
(Erst.)
Foster’s India - - 1.6 1.6 345.8 432.7
Mount Shivalik
294.1 293.2 293.2 387.8 405.9 388.1
Breweries
Aurangabad
223.3 327.7 387.5 364 364
Breweries
Mount Shivalik Inds. 65 65 225.1 328.5 276 355.6
Artos Breweries - - - 276.5 219.5 352.1
Sica Breweries (Erst) 169.4 253.9 304.8 312.1 332.9 332.9
Central Distillery &
52.7 105.1 141.5 - 254 314.2
Breweries
Shaw Wallace & Co. - - - 69.5 292.5 288.1
Som Distilleries &
123.5 169.6 244.1 274.1 282.4 282.4
Breweries
Mohan Rocky
Springwater 191 191 - 190 123.6 250.3
Breweries
East Coast Breweries
- 91 124.2 210.4 146.1 247.7
& Distilleries
Hindustan Breweries
326 289.5 380.8 343.3 232.2 241.8
& Distilleries
Source:CMIE

60
Advertising ethics and consumer perception towards surrogate advertising

MARKETSHARES OF BEER COMPANIES


(in %)
1995- 1996- 1997- 1998- 1999- 2000-
COMPANY
96 97 98 99 00 01
United Breweries 25.38 24.21 32.16 23.92 21.35 28.84
Mohan Breweries &
13.46 11.79 9.02 7.57 6.69 6.1
Distilleries
Balaji Hotels &
4.52 7.31 4.96 2.69 4.74
Enterprises
Mohan Meakin 5.86 5.64 4.46 4.78 4.47 4.5
Skol Breweries 6.25 6.62 7.41 6.34 5.43 4
Mysore Breweries 5.68 5.19 5.09 4.73 4.32 3.56
Lilasons Industries 4.07 3.3
Charminar Breweries
0.13 2.01 3.33 3.44 3.03
(Erst.)
Foster’S India 0.02 0.01 2.81 2.89
Mount Shivalik
4.24 3.87 3.11 3.27 3.29 2.59
Breweries
Source: CMIE

61
Advertising ethics and consumer perception towards surrogate advertising

CABLE TV ACT 1995: 2000 AMENDMENTS RELATED TO LIQUOR ADS

The Cable TV Networks (Regulation) Amendment Bill 2000 came into


effect on 8th September 2000. The Union Minister of Information &
Broadcasting, Mr. Arun Jaitley, made this announcement.

Liquor & Tobacco Ads:

Liquor & Tobacco advertisements are now banned on all channels


transmitted or retransmitted in India. Earlier, only channels uplinked
from India had to adhere to this code. As a result, Doordarshan and a
handful of other channels that uplinked from India through VSNL were
prohibited from accepting Liquor & Tobacco ads. Earlier, these
constraints did not apply to leading channels such as Zee TV, Sony TV
and STAR because they uplinked from outside the country, even though
their primary target audience was in India. Some of these channels
received up to 30% of their ad revenues from Liquor & Tobacco
advertisements. The government now seeks to provide a level playing
field for all channels, including Doordarshan.

Surrogate Advertisements:

In the past, liquor advertisers have often resorted to surrogate


advertisements where the brand name of a product normally associated
with Liquor is advertised as another product e.g. Kingfisher Mineral
Water or a soda that is named after a whisky. Surrogate advertisements
can also indirectly advertise or promote a product without actually
displaying the product. The I&B ministry has taken a serious view of
this and the new amendment prohibits all advertising that ‘directly or
indirectly’ promotes the production, sale or consumption of tobacco,
cigarettes and alcohol.
Source: www.scatmag.com

62
Advertising ethics and consumer perception towards surrogate advertising

ANNEXURE I
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 b) No need of banning such ads c) Product should
be banned d) No comments

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 b) Boring and Disturbing c) Informative
d) Misguiding e) None of the Above.

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Advertising ethics and consumer perception towards surrogate advertising

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


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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Advertising ethics and consumer perception towards surrogate advertising

BIBLIOGRAPHY
Books
Principles Of Marketing Philip Kotler
Advertising and promotion Belch
Advertising Today Warren Berger

Magazines
Management Magazine ICFAI Publication 22nd July Pg 24
Global Educator IMS Publication August issue
Advertising Mania IMS Publication 4th August Issue
26th August Issue
10th September Issue
HRM Review IMS Publication August Issue
Advertising Express magazine- November 2002, issue 11, and volume-2.

NewsPapers
ET 4th, 11th, 18th, 24th, 31st August
ET 7th, 14th September
Close floodgates on surrogate ads Deccan herald files.
Framework convention alliance Ban on surrogate tobacco ads.

Internet
1. www.agencyfaqs.com
2. www.jivhathetongue.com
3. http://www.thehindubusinessline.com/catalyst/2004/04/08/stories/200404080011
0400.htm
4. http://www.iupindia.org/806/ijmm.asp
5. ICMR research papers
6. CMIE research papers
7. CII research papers

Places Visited
British council library, Mittal Chambers, Nariman Point

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Advertising ethics and consumer perception towards surrogate advertising

IMC, Churchgate.

66

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