AMITY SCHOOL OF BUSINESS

SURROGATE ADVERTISING

SUBMITTED BY:-

MADHVI SOODA3906408283

SECTION (G-15)BATCH (2008-2011)

ACKNOWLEDGEMENT

Preparing this report has been a great learning experience for me and I

would like to express my deep sense of gratitude towards all the people who

guided me throughout and without whose guidance and support, this report

would not have been completed successfully.

My sincere thanks to my report guide, who has been a source of knowledge

and inspiration. 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.

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CONTENTS

PREFACE

EXECUTIVE SUMMARY

INTRODUCTION

EVOLUTION OF ADVERTISING

GOVERNMENT IMPOSES BAN ON LIQUOR & TOBACCO

ADVERTISEMENTS

AFTERMATH OF THE BAN

SURROGATE MARKETING

POPULAR EXAMPLES OF SURROGATE ADVERTISING & WHATS IN STORE

BIBLIOGRAPHY........................................................................

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PREFACE

Advertising is virtually everywhere in daily life and its forms and roles are both contested

and admired. Some see advertising as both the mirror and the maker of culture: its words

and images reflect the present and the past even as they contribute new sounds and

symbols that shape the future. Others say that advertising is purely an economic activity

with one purpose: to sell. But most of the people agree on the fact that advertising creates

"magic in the marketplace."

There are more than 70 television channels in India, reaching 24 million cable and

satellite homes and with over 150 million viewers. Advertising budgets climb up every

year.

An estimated 10 million people consume Alcohol and about 250 million Indians consume

tobacco in form or another, out of the 1 billion plus population. The country has a deep

seated traditional conditioning against consumption of alcohol & tobacco. As a conscious

effort to reduce the no. In September 1999, the Information & Broadcasting Ministry

imposed a ban on airing of Liquor & Tobacco advertisements on television. The ban

came as rude shock to the Liquor & Tobacco Industry, as television is one of the main

media’s of communication, and any kind of ban would affect them adversely. The ban

would have affected the new entrants more than the existing established players.

In the absence of advertising it was but natural that the liquor & tobacco sales would head

for a steep fall. The Liquor & Tobacco found the solution to there worries in what is

today better known as Surrogate Advertising. According to the dictionary, Surrogate

means an alternative, or a back up, or a substitute. Surrogate Advertising has been

defined by the Information & Broadcasting Ministry as an advertisement of a product

other than liquor or tobacco, when that product is actually being manufactured by a

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liquor/tobacco company in substantial quantity. The function of surrogate advertising is

more of reinforcing brand recall, rather than an increase in the sales of the company.

Soon there were advertisements from liquor companies, which had the same brand name,

but a different product was being advertised. Advertisements of mineral water, soda,

darts, apple juice etc became common, and had become the drivers of the brands whose

brand name they carried.

Tobacco companies not to be left behind came up with there own set of surrogate

advertisements. One of the companies started with its own chain of lifestyle stores, while

another company instituted its own bravery awards.

Thus in a nutshell ban or no ban the liquor & tobacco giants manage to create awareness

of there respective brands in one way or the other.

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EXECUTIVE SUMMARY

The literal meaning of ‘Surrogate advertising' is duplicating the brand image of one

product extensively to promote another product of the same brand. Advertisement, as a

popular medium of paid communication has drawn public ire time and again for moving

away from the truth and the consumers ‘right to know' to providing false images. The

masked creative leave it to the consumers to read between the lines.

Surrogate advertising is done when the original product is not allowed to advertise itself

on mass media. In India, alcohol brands are not allowed to give advertisements on

television, so alcohol marketing firms use surrogate products like mineral water, soda,

juice to hit consumers with the brand name. The brand name of the alcohol product is the

same as the surrogate product.

Indian laws do not allow alcohol and tobacco companies to advertise, but a few of these

advertisers have extended their brands to other categories purely in an attempt to

advertise.

 

Surrogate advertising happens when the brand extension is seen as a guise for a product

that is almost non-existent in commercial terms.

EXAMPLE:

Kingfisher is also the brand-name of an Indian alcohol (beer). Kingfisher alcohol existed

long before the Kingfisher airline came into existence. Similarly Indian Tobacco

Company'''s (ITC) had their flagship brand cigarette `Wills' and then opened Wills

Lifestyle stores (readymade garments) across India when Indian tobacco control Acts

tightened the clamp on tobacco advertising.

 

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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 health-hazards 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-of-purchase advertising

etc as well.

 

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

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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!

On the one side we had the government who wanted to make sure that there were no

liquor and tobacco advertisements on the television, and on the other side we had the

liquor and tobacco companies who wanted to continue with television as a medium of

communication and to achieve the ultimate goal of increase in sales. This battle of

interest of both the sides is what fascinates me to choose Surrogate Advertising as a topic

for doing my thesis.

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INTRODUCTION

In September 1999, the Information & Broadcasting Ministry imposed a ban on airing of

Liquor & Tobacco advertisements on television. The ban shook the Liquor & Tobacco

Industry as television is one of the main media’s of communication, and any kind of ban

would affect them adversely. The ban would have affected the new entrants more than

the existing established players.

The Liquor & Tobacco majors were working overtime to find a solution to the crises that

they were facing. They found there solution in what is today better known as Surrogate

Advertising. According to the dictionary, Surrogate means an alternative, or a back up, or

a substitute. Surrogate Advertising has been defined by the Information & Broadcasting

Ministry as an advertisement of a product other than liquor or tobacco, when that product

is actually being manufactured by a liquor/tobacco company in substantial quantity. The

function of surrogate advertising is more of reinforcing brand recall, rather than an

increase in the sales of the company.

Soon there were advertisements from liquor companies, which had the same brand name,

but a different product was being advertised. Advertisements of mineral water, soda,

darts, apple juice etc became common, and had become the drivers of the brands whose

brand name they carried.

Tobacco companies not to be left behind came up with there own set of surrogate

advertisements. One of the companies started with its own chain of lifestyle stores, while

another company instituted its own bravery awards.

On the one side we had the government who wanted to make sure that there were no

liquor and tobacco advertisements on the television, and on the other side we had the

liquor and tobacco companies who wanted to continue with television as a medium of

communication and to achieve the ultimate goal of increase in sales. This battle of

interest of both the sides is what fascinates me to choose Surrogate Advertising as a topic

for doing my dissertation.

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RESEARCH DESIGN

Exploratory research design has been used for the project. The main purpose of using this

design is for getting a solution to a problem for more precise investigation. The major

emphasis in such studies is on the discovery of ideas and insights. The research design

must be must be flexible enough to provide opportunity for considering different aspects

of a problem under study.

The design of exploratory studies is characterized by great flexibility and ad-hoc

versatility. The researcher is involved in investigating an area or subject about which he

or she has yet to gain a proper knowledge about the subject.

This type of study is conducted in the following situations:

1. To get solution to a problem for the further investigating.

2. To determine the priority for further research

3. To gather data about the practical problems of carrying out research on particular

problem statements.

4. To increase the analyst’s interest in the problems to explain and understand basic

concepts.

Flexibility in research design is needed because the research problem is transformed into

one with more precise meaning in exploratory studies, which may necessitate changes in

the research procedure for gathering relevant data.

The researchers purpose is to first conduct a intensive secondary research to understand

the full impact and implication of the industry, to review and critique the industry norms

and reports, on which certain issues shall be selected, which the researchers feel remain

unanswered or liable to change. This shall be further taken up in the next stage of

exploratory research. This stage shall help the researchers to restrict and select only the

important question and issue, which inhabit growth and segmentation in the industry.

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Methodology Used- The information presented in the dissertation has been gathered from

Secondary data. In order to collect the primary data, questionnaire was prepared to derive

details on what is the opinion of the common man & the people in the advertising sector,

about surrogate advertising and its effectiveness. In order to make the dissertation more

precise rather than covering the entire scope of surrogate advertising, the focus of the

study has been confined to the liquor & tobacco industry, where the surrogate advertising

emerged as a consequence of the ban imposed by the Information & Broadcasting

Ministry on the advertisement of liquor & tobacco.

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EVOLUTION OF ADVERTISING

Advertising is hardly a new phenomenon. Even a hundred years ago, advertising was an

integral though sometimes unwanted part of daily life. Over the centuries, the evolution

of advertising has been closely tied to social, economic and technological changes that

have affected the media and the message. We would study the evolution of advertising

under the following heads:

The Early Days: These were the days when public education was low, few people

could read, and so for centuries trades people attracted attention with public criers and

pictorial signs. Some Greek and Roman traders also used signs to advertise their

products, as people could not read. When Johann Gutenberg invented movable type

and the printing press in Germany in the mid 1400s that printed materials could be

mass-produced. This led to printed pamphlets being distributed and also some

primitive forms of today's billboards.

The Industrial Revolution: The Industrial Revolution and the subsequent shift from

rural to urban centers and the widening of the gap between producers and the

consumers, the businesses turned to advertising quickly to reach out their potential

customers.

Technological Changes: During and after the Industrial Revolution, technological

advance changed both the speed and form of communication. This can be attributed

to the fact that photography was invented and along with telegraph, telephone,

typewriter, phonograph, and motion pictures opened up new avenues for personal and

business communication.

However, the inventions of radio and television changed the face of advertising forever as

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print and electronic media expanded the use and impact of advertising. We discuss a few

of them in brief:

Print Media: This would include the magazines and the newspapers. Today's

newspapers and magazines offer advertisers the flexibility of targeting the audience

ranging from a small local area to the whole nation or the continent. By the dawn of the

twentieth century, advertising had become a social and economic fixture in the U.S. and

U.K. and all the magazines and newspapers were being filled by ads of different

companies and varied products. Today also the print media is an effective mode of

advertisement.

Electronic Media: The electronic media would include radio and the television. The

advent of the radio allowed the advertisers the liberty of using certain 'jingles' and music,

which could be associated with their brand and product. Whereas the television brought

along the visuals along with the audio effects. This was a revolution and the print media

found it being sidelined as far as advertising went. Talking of India, the Cable TV boom

in the early nineties added to the choices available to the advertiser on a regional

segment.

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GOVERNMENT IMPOSES BAN ON LIQUOR &

TOBACCO ADVERTISEMENTS

THE CABLE TELEVISION NETWORKS (REGULATION)

ACT, 1995[1]

7. Advertising Code. - (1) Advertising carried in the cable service shall be so designed

as to conform to the laws of the country and should not offend morality, decency and

religious susceptibilities of the subscribers.

(2) No advertisement shall be permitted which-

(i) Derides any race, caste, colour, creed and nationality;

(ii) Is against any provision of the Constitution of India.

(iii) Tends to incite people to crime, cause disorder or violence, or breach of law or

glorifies violence or obscenity in any way;

(iv) Presents criminality as desirable;

(v) Exploits the national emblem, or any part of the Constitution or the person or

personality of a national leader or a State dignitary;

(vi) In its depiction of women violates the constitutional guarantees to all citizens. In

particular, no advertisement shall be permitted which projects a derogatory image

of women. Women must not be portrayed in a manner that emphasizes passive,

submissive qualities and encourages them to play a subordinate, secondary role in

the family and society. The cable operator shall ensure that the portrayal of the

female form, in the programmes carried in his cable service, is tasteful and

aesthetic, and is within the well established norms of good taste and decency;

(vii) Exploits social evils like dowry, child marriage.

7(viii) Promotes directly or indirectly production, sale or consumption of-

(A) Cigarettes, tobacco products, wine, alcohol, liquor or other intoxicants;

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(B) Infant milk substitutes, feeding bottle or infant food.

(3) No advertisement shall be permitted, the objects whereof, are wholly or mainly of a

religious or political nature; advertisements must not be directed towards any

religious or political end.

(3A) No advertisement shall contain references, which hurt religious sentiments.

(4) The goods or services advertised shall not suffer from any defect or deficiency as

mentioned in Consumer Protection Act, 1986.

(5) No advertisement shall contain references which are likely to lead the public to infer

that the product advertised or any of its ingredients has some special or miraculous or

super-natural property or quality, which is difficult of being proved.

(6) The picture and the audible matter of the advertisement shall not be excessively ‘loud;

(7) No advertisement which endangers the safety of children or creates in them any

interest in unhealthy practices or shows them begging or in an undignified or indecent

manner shall not be carried in the cable service.

(8) Indecent, vulgar, suggestive, repulsive or offensive themes or treatment shall be

avoided in all advertisements.

(9) No advertisement which violates the standards of practice for advertising agencies as

approved by the Advertising Agencies Association of India, Bombay, from time to

time shall be carried in the cable service.

(10) All advertisement should be clearly distinguishable from the programme and should

not in any manner interfere with the programme viz., use of lower part of screen to

carry captions, static or moving alongside the programme.

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AFTERMATH OF THE BAN

The industry and the advertising fraternity were caught off guard, when the government

imposed restrictions on airing liquor and cigarette ads on television, early this year. This

prompted the advertising agencies to evolve in their communication strategy. What

emerged out of it was even more unfathomable. Surrogate advertising became the new-

age mantra, raising the issue of ethics in advertising as always. While the industry

scouted for new products to associate with their brands, ad agencies burnt their gray cells

to conceive creative ads, to subtly promote the brand over the new product.

The ban has divided the entire industry between multinationals and local home grown

companies. From the point of view of Indian players', the biggest threat today is the entry

of global majors who will have an unrestricted license to sell as the free import regime as

per the WTO commitment comes into force from March 2001. These MNC’s not only

have well known brands, but also have deep pockets. And advertising is their most potent

weapon. Television would be the quickest and the most effective way to reach the

maximum number of people, throughout the country, in the shortest possible time. Print

media has its own shortcomings, with the multiplicity of languages that people speak in

India. Also print media cannot beat the effectiveness of the audiovisual medium of

television.

The impact of ban on various industries -:

TOBACCO

The likely fallout’s of the ban on cigarette sales could be

Cigarette volumes, which have been registering diminishing growth, could

decline further if restrictions on smoking in public places are implemented

strictly.

Domestic industry players will be at a disadvantage to their international

counterparts who enjoy free access to communicate on television channels

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uplinked from outside India and seen in the country by a very wide cross-section

of the population.

New brand launches would become extremely difficult. ITC with its wide brand portfolio

consisting of the most well known brands in the country and the widest distribution reach

among the cigarette companies is better placed than any other competitor in an

atmosphere where no advertising is allowed.

LIQUOR

Domestic liquor majors have been facing increasing competition from international

brands launched in the country by leading global liquor majors post removal of restriction

on imports. Restriction on the most effective medium of advertising i.e. television would

obviously hamper brand building.

The ban on liquor advertising has in a way it came as a blessing in disguise since it

created an entry barrier for any new prospective player. McDowell has used this ban to its

advantage by using surrogate advertising for products like mineral water and soda, which

also generated additional revenue for the company. With a view to actively develop this

area, the company has franchised the bottling and sale of McDowell’s purified drinking

water and soda, which are now available in over 75 cities in the country. The company is

also planning to launch cigars in a high price range, which it plans to import and sell

under its own brand name. It is primarily focusing on the youngsters as its target market

with its USP being that cigars are less harmful than cigarettes. These areas used by the

company for surrogate advertising have been identified to be yielding high-margins,

especially if one compares with the present margins in the liquor industry.

Global players who are already in the market such as Bacardi, Pernod Ricard, UDV,

Fosters, etc, who would have been relying on building up their brand equities in the local

markets are in for a tough time. It could even have some fall out on the considerations of

some global players who have not yet firmed up India plans. Another big advantage that

smaller domestic players will have is that they will become more attractive acquisition

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targets, if not for their brands, at least for their distribution reach which will now be even

more critical in a scenario of restricted advertisements.

``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.''

MEDIA

The 7 to 11 per cent revenue hit, amounting to over Rs 100 crore annually, that the Indian

television industry faced after the ban on direct and indirect liquor and tobacco

advertisements.

According to industry sources, all the leading private channels are experiencing revenue

losses due to the ban. Star TV, for instance, which used to show the popular Bacardi

advertisements among others, has suffered around 8 to 10 per cent loss of revenues after

the recent ban. Says Mr LS Nayak, executive vice-president, sales and marketing, Star,

that since the broadcasting industry had already taken off most of the tobacco ads, the

current revenue hit was only due to removal of liquor ads.

Q. With the IBF guidelines on surrogate advertising in force, do you see TV channels

suffering heavily?

A. Raj Nayak, Executive Vice-President - Sales and Marketing, STAR India: “Not

really. It is more of a misconception. There has hardly been any cigarette advertising on

television as TV companies do not accept tobacco ads. Even if you look at surrogate

advertising of tobacco products, it is very minimal. In comparison surrogate advertising

of liquor products has been higher. However, when we took stock of the situation in

terms of the total volume of business in the last one year, surrogate advertising of liquor

products did not account for a sizeable portion of our business.

Gutka and pan masala advertisers definitely spend a lot on television. However, when

you spread their monies across various channels, it is not a huge sum of money”.

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Zee says its revenue loss is 2 per cent. It's like a drop in the ocean, says the Zee

spokesperson. But, warn industry sources, that Zee's projection should be taken with a

pinch of salt. Sony Entertainment Television (SET), another channel to get hit by the

liquor ban, puts its revenue loss at 5 to 7 per cent. Says Ms Kacon Sethi, head of sales,

Sony: ``We don't have any specific plans to overcome the revenue loss due to ban on

liquor ads.'' But she adds that with surrogate ads continuing, some of the liquor brands

continue to stay on the channel.

B4U, the Kishore Lulla-promoted channel which was airing a lot of liquor ads such as

United Distillers and Vintners (UDV), Gilbey's Green Label Whisky and Smirnoff till

recently, is not forthcoming on its revenue loss figure. In fact, B4U continued airing

liquor ads much beyond the ban deadline. The channel was in the process of striking

further deals with the UB Group, Shaw Wallace, Radico Khaitan and Mackay, when the

government issued an ultimatum to the channel to stop all liquor ads.

"Event marketing has benefited sports, fashion and music. For instance music got quite a

patronage with the Charms Spirit of Freedom Concerts featuring Indian classical music to

the Western bands such as Rock Machine. The companies have an advertising budget

maximum of which is spent on television.

Advertising agencies have taken a stance that it's unfair to ban advertising, since the

product itself is not banned. "If the product will continue to be produced and marketed,

there is no point in restricting its advertising," they generally feel.

Also, as stated above, there are no means to check surrogate advertising. With no control

on surrogate ads, channels are showing ads of soda, water and even T-shirts being

manufactured by liquor and tobacco companies during the day also, thereby influencing a

lot of young people.

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SURROGATE ADVERTISING

Tobacco & liquor advertising does more than offer a high; it promises a sophisticated

lifestyle that stems merely from holding a cigarette or hard drink. In India, the advertising

industry has been largely self-regulated.

To circumvent the regulations, advertisers have frequently used methods such as

"surrogate advertising" to promote such products. Surrogate advertising is the promotion

of a product, through indirect and devious means. Typically, an advertiser would use the

trademark/brand of a product for which promotions are restricted/prohibited to promote a

product the advertisement of which is permitted. For instance, it is not unusual to find a

brand associated with cigarettes to be used to advertise a competition/event. The

advertising of socially harmful products such as tobacco and alcohol has been sought to

be restricted by Indian lawmakers. Such prohibitions were, however, previously limited

to forms of media such as terrestrial television and radio which were easier to regulate.

With technological advances such as satellite television and the Internet, advertisers have

been finding ways to circumvent restrictions to achieve their goals.

SOURCE: The Economic Times (Corporate Counsel section),June 14, 2003.

The literal meaning of ‘Surrogate advertising’ is duplicating the brand image of one

product extensively to promote another product of the same brand. Advertisement, as a

popular medium of paid communication has drawn public ire time and again for moving

away from the truth and the consumers ‘right to know’ to providing false images. The

masked creative leave it to the consumers to read between the lines.

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This advertisement gimmick has its genesis in U.K., where English housewives protested

against liquor advertisements as.they felt that these ads were weaning their husbands

away from them and hence perceived as a threat. The liquor and the tobacco barons not

only in U.K. but also in other countries including India dealt with resistance by

advertising cocktail mixtures, fruit juices, apparel, etc. The imagery used in most of the

commercials is that which one can associate with alcohol. Apart from brand names they

assort the products with seems like machoism, scantily clad girls, dim lights, people

partying and doing merry together. In ad parlance,‘surrogate advertising’ is a politically

correct term used to define fraudulent pieces of communication. For example, all those

playing cards, soda water bottles, apple juices, mineral water and other product ads we

see, are actually clever promotions for liquor and cigarette brands by the same name.

Let’s take an example how it works. To explain…..a party is going in full swing, guests

are enjoying their drinks and chatting away. A gentleman finishes his drink and hands

over the empty glass to the waitress. Another lady also finishes her drink and places the

glass on the tray. On both the glasses ‘AC Black Apple Juice’ is printed. As the waitress

carries the empty glasses, the two AC Black ones knock against each other. In the next

shot a kind of mysterious force pulls the two guests, who bump against each other. While

waitress continues to carry the tray, the two glasses keep brushing against each other…

and so do the young couple. Even as the dance between the two glasses goes on in full

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scale, the impact is felt in equal strength by the couple. The glasses are taken for a wash,

and are placed under the rush of tap water. Continuing with the pattern, the young

dancing partners too find themselves in pouring rain. Finally having cleaned the glasses,

the waitress keeps them for drying, placed beside each other. The amazed guests look on

as the couple also stands immobilized side by side. The voice over says: "AC Black

Apple Juice, kuch bhi ho sakta hai" (Anything is possible). In addition, brand imagery

can be communicated without reference to cigarettes. This is evident in the evolution of

the current Four Square campaign. Some of the Four Square campaign storefront and bus

stop advertisements contain the black and white photograph with a man holding a red

square on one end and an open pack of cigarettes on the other; others just contain the

photograph with the text, "four square the man with the smooth edge" and three red

squares. The Four Square billboards, posters, and magazine advertisements are composed

solely of the photograph, the logo, and the slogan; the only mention of cigarettes is in the

statutory warning..

What’s surrogate about advertising?

The I&B Ministry had instructed the TV channels not to carry surrogate advertising. This

was in addition to the news that cigarette packets would now have to carry “gory”

pictures, ostensibly to scare away smokers and thereby save their lungs and their lives.

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Let’s take the second point first. The picture of a scorpion on a cigarette packet is

probably the most ludicrous attempt at scaring anyone away. It is this propensity of the

Government to convert its feeble attempts at regulating the powerful tobacco lobby that

never ceases to amaze me. If the smokers do not die of lung cancer after merrily

continuing smoking cigarettes from packets that carry the scorpion picture, they will

surely die of laughing at these half measures.

That brings us to the first point. Every so often one reads of the “strict” rules that ban

tobacco and liquor advertising. And every so often one views advertising of CDs,

cassettes, events, mineral water, stores, airlines, awards and any other product with the

brand names of major tobacco and liquor companies on television, newspapers,

magazines and on hoardings.

Let’s examine the case for and against surrogate advertising from different perspectives.

The advertiser’s perspective is fairly straightforward. If it is legal to manufacture,

distribute and sell a product, why should it be illegal to promote the sale of that product?

I don’t think anyone can answer that question convincingly. If it has been established

conclusively that cigarette smoking kills, why is it that it is available to anyone,

irrespective of his or her age, at every street corner?

And even if surrogate advertising for cigarettes is effectively banned, what about events

on satellite TV that are sponsored by tobacco and liquor companies? Tune into the

coverage of Formula 1 racing at you will see cars racing around circuits of the world with

the names and logos of tobacco and liquor companies emblazoned on every part of the

vehicle and the driver. Does this mean that ITC cannot advertise its products in Indian

events even though it is a major contributor to the exchequer in terms of excise and

duties, while Marlboro, which is smuggled freely onto the streets of India, can

subliminally implant itself in the minds of the smoking public that watches this coverage?

Assuming that tobacco companies even have a case to advertise, one would at least ask

for a level playing field.

What about the advertising agency’s point of view? I frankly don’t think they have one.

They will implement strategy for their clients, execute jobs irrespective of whether they

are legal or not and try and shore up their bottom line. If this was not the case, you would

not have surrogate advertising.

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Now let’s think of the consumer. Well, as a consumer, I cannot plead that I should have

the right to do what I wish, including the consumption of tobacco in whatever form. That

would perforce mean I have the right to commit suicide. And society and statute does not

give me that right.

Having got that out of the way, I would have to agree that society in its wisdom and the

law in its majesty enjoins certain restrictions on me and my public behaviour, and if I do

not agree with such restrictions I have the right to appeal against them to the judiciary or

lobby for legislative change. In the meanwhile, I am expected to be a law-abiding citizen.

Sounds very simple and straightforward.

Then why is there surrogate advertising? Does it mean that those indulging in it are not

law-abiding citizens? The short answer is “yes!”

Tobacco and liquor companies have the right to knock on the doors of the judiciary and

the legislature to seek redress from rules or laws they feel are unfair or wrong. God know

they have the money, legal wherewithal and political patronage to do all of these things.

If they have not been able to do it, it means that surrogate advertising is not just legally

wrong but also unconscionable.

And that is the point I want to make.

Advertisers such as United Breweries went ahead and set up an airline with a brand

name, colour and logo style that was the same as a liquor brand they owned.

Advertisers like ITC went ahead and set up a chain of lifestyle stores under the name and

style of a cigarette brand they owned.

This was when there were already rules and laws in place that expressly forbade this.

Today we have a large airline that is a legitimate business called Kingfisher. And a large

chain of lifestyles stores called Wills. An equally legitimate business. Yet, even Vijay

Mallya would not be able to tell you with a straight face that his airline was named

Kingfisher at a time when it was legal to do so. Nor would Yogi Deveshwar. And they

are both honourable men.

If the Government was serious about enforcing its rules and laws it could have put a stop

to these names years ago. It was expedient to allow them to grow into large legitimate

businesses and then deem them legitimate. Now one can say that you cannot have a

product (other than the liquor brand) called Seagrams 100 Pipers. That merely locks the

24

doors after the horses have fled. How will you decide that a business is legitimate or not?

Would Bacardi Blast cassettes and CDs be seen as legitimate. Of course it would be.

Would any of these be “right”? Certainly not.

The point to note is that there is nothing surrogate about advertising. There is something

surrogate about ethics and values and a sense of right and wrong. And so you have an

actress who was hailed as the only “man” in Bollywood endorsing a bravery award

named after a cigarette brand. And you have pious corporate social responsibility

programmes from a tobacco company that freely endorses surrogate advertising. And you

have a Member of Parliament whose intentions could definitely be construed to point at

encouraging surrogate advertising. Forget the advertising agencies. They are too small in

this game. Advertisers must decide what is right and what is wrong. And the consumer

must be the ultimate judge. Do you want to patronise the products and services of

companies who are legally correct, or really correct? That’s a choice you have to make.

The advertising is purely incidental.

Surrogate Advertising - The Positive Side

When the laws of a country do not permit advertising of a certain product category, the

advertisers take the shelter of a brand extension. Advertising of alcoholic drinks in India

is not permitted. To by pass this, some manufacturers of whisky or similar products

launched brands of soda, mineral water under the same brand name as that of their

popular whisky. Hence the meaning of ‘Surrogate advertising’ is duplicating the brand

image of one product extensively to promote another product of the same brand.

25

POPULAR EXAMPLES OF SURROGATE ADVERTISING

& WHATS IN STORE

Todays media is full of examples which bring out the best of surrogate advertising. Even

the event marketing of sports, fashion & music has not been spared from surrogate

advertising. The alcohol based brand sponsor sports and receives visibility via advertising

and below-the-line marketing. Brief examples along with modus operandi have been

mentioned below.

Celebrity endorsements with Shatrughan Sinha for the Bagpiper soda to the leading stars

such as Akshay Kumar for the Red & White Bravery Awards while Johnny Walker

Scotch Whisky promotes a series of successful stories on the T.V. channel-CNBC

India through sound bytes like Amitabh Bhachan. Event marketing has benefited sports,

fashion & music. The alcohol based brand sponsors sports and receives visibility via

advertising and below-the-line marketing. Seagram-the producer of the premium whisky

Chivas Regal have been promoting Chivas Regal Championships and Chivas Regal

Invitational Golf Challenge for corporate executives. United Breweries group been

associated with formula one racing since long through its flagship beer brand king fisher,

Mc Dowell & Co. has associated its umbrella brand McDowell with sport of derby.

While the most interesting amongst them is the Hayward’s 5000 beer, which uses dart

boards as their surrogate product in their ads and the brand has gone one step further by

associating itself with a new sport ‘darting’ and is sponsoring national dart

championships.

Wills Life Style is a chain of specialty stores providing exclusive designer collection. At

2003 Images Fashions Awards, Wills Life Style was declared ‘the most admired

exclusive retail chain of the year’. Hence the stores serve as effective brand wagon for the

cigarette brand. Another glaring example in this field is Manikchand-a major gutka

manufacturer who sponsor Manikchand-Filmfare Awards and promotes its brand

name.

26

WITH the Government trying to clamp down on surrogate advertising, liquor companies

seem keen to bat out the ban. Even as liquor brands have traditionally been associated

with upmarket sporting activities like golf, polo, derby and yachting, companies are now

turning towards the game of the masses - cricket. In fact, the latter half of the current year

will see liquor brands as the title sponsors of two major cricketing events featuring India.

Immediately after the triangular series at Zimbabwe (of which Royal Stag was the

associate sponsor), the India and Zimbabwe Test series will be called the Royal Stag Cup.

Till date Royal Stag has used several international cricketers as brand endorsers. This is

the first time the company has forayed into tournament sponsorship.

Similarly, the ICC World XI Vs Australia series to be held Down Under will be called

the Johnnie Walker Super Series. According to media planners, as both the series are

being held outside India it would be difficult for the Government to blip out the liquor

brands. "Since the matches will be beamed into Indian drawing rooms live, the brands

will enjoy good visibility," they added.

Internationally beer brands such as Fosters and Lion have supported cricket in Australia

and Sri Lanka respectively. Meanwhile, Royal Stag has roped in Zimbabwean Vice-

Captain, Heath Streak as their new Royal Stag brand ambassador. Other celebrity Royal

Stag cricket endorsers include Australian Cricket captain Ricky Ponting, and India's

Harbhajan Singh. The Information and Broadcasting (I&B) Ministry's efforts to ban

surrogate advertising of liquor brands has reached a naught. A few months ago, it had

sent out notices to various television channels to withdraw advertisements by liquor

companies. But within a few weeks of the notices being issued, surrogate advertising

made a comeback on television. In fact, a few liquor companies have been advertising

during the ongoing cricket series as well. Earlier, in an interaction with Government

officials, channels were categorically told that there is a complete ban on advertising by

liquor companies. "However, exemptions could be granted on a case-by-case basis, like

the one granted to Kingfisher Airlines," they had said.

27

The Government is also handicapped by procedure wherein it can take action against

channels only after receipt of complaints. "The Government cannot suo motu issue show-

cause notices. It has to first receive complaints," said official sources.

Liquor companies on their part state that their advertising is self-regulated and comply

with the Indian Broadcasting Foundation and the Advertising Standards Council of India

code.

OPINIONS:

Mr Prasoon Joshi, Regional Creative Director of McCann Erickson-"It is a grey-

area. Whether or not surrogate advertising should be allowed has been constantly debated

in the industry. There is no one solution. I myself have not come to a conclusion.

Abhishek Khaitan, Executive Director, Radico Khaitan -"Surrogate advertising ban

would not hamper our plans to a large extent because there are a number of alternative

media through which you can always address your consumer."

Q. Like all other players you have also taken to surrogate advertising by launching 8 PM

apple juice. How successful has this been in terms of brand awareness of 8 PM whisky?

Answer: Abhishek Khaitan, Executive Director, Radico Khaitan-8 PM advertisement

has always been admired by the consumer therefore the recall that we have or enjoy with

our consumer base is phenomenal as compared to other brands. Apple Juice was an

extension to this only and therefore has helped us in retaining the same. I would not say 8

PM Apple juice is a surrogate product. It is just an extension of our business and this

sector has been doing well and contributing to our revenues. We are looking at other

flavours of juice. 8 PM is our brand extension and a legitimate product. Rather, the image

of 8 PM whisky helped us sell the apple juice”.

Q. With surrogate advertising also on in danger of being banned what do you plan to do?

What will happen to your surrogate products? What is the media strategy that you would

adopt?

28

Answer: Abhishek Khaitan, Executive Director, Radico Khaitan-Surrogate

advertising ban would not hamper our plans to a large extent because there are a number

of alternative media through which you can always address your consumer. As far as our

strategy on this account is concerned, we would not like to reveal that at this juncture.

Q. Surrogate advertising; do you think it achieves its objectives?

Answer: R Balakrishnan, Lowe Executive Creative Director-Surrogate advertising

achieves its objectives as long as people don't believe its surrogate. As long as people

know what product is being promoted, it's not surrogate advertising.

Q. What kind of loss is the industry looking at with the ban on tobacco ads?

Answer: R Balakrishnan, Lowe Executive Creative Director -Huge. Quite a big loss.

To put together the whole tobacco advertising industry, it would be about a Rs 200 crore

(Rs 2 billion) loss. Lowe did not handle a lot of cigarette business.

Q. Why surrogate advertise at all? If something is not allowed to be advertised at all why,

this loophole?

Answer. Harish Bijoor, Brand-Domain Specialist and CEO, Consults- Surrogate

advertising is the biggest loophole we have in this large pie of legal advertising. I

categorise products and services that we tout as brands into two categories. The first is

the socially acceptable category. The second is what I dub the “social ostracism”

category. Items that fall in the first category are products and services that are legal.

Products that have positive social sanction and products that do not contravene the law of

the land in touting of the product. Products that don’t go against social sanction and

societal niceties as well. There is therefore in modern marketing society a caste hierarchy

of products and services. Legitimate products that enjoy social acceptability and sanction

sit right on the peak of this caste structure. The bread you eat and the soap you use to

bathe and indeed the water you drink out of bottles and pay more than what you pay for

the litre of milk, are all at the top rung of the caste ladder we build for brands.

And then slightly below each of these highly legitimate products are items of luxury. The

real top end luxury sedan! That Swarovski crystal duck that costs more than what a

family of four can feed and clothe themselves with for a whole five years! These are

29

categories that are legitimate but cue the top end of the consumptive race and its

peccadilloes.And then, right at the bottom of the legitimate products pyramid lie products

and services that do not enjoy social sanction. These are brands that walk just above the

thin Plimsoll line of social acceptability and sanction. These are products and services

that defy issues related to health and well-being. At times these are products and services

banned by governments at large in the interest of their people and processes at large.

Some of these products and services are items such as cigarettes and liquor which go on

the platform of health and social sobriety. And then there are services such as the long-

distance ostensibly “Friendship Calls” that are advertised at times to lure the gullible to

listen in to a foreign voice that is more interested in your ISD call charges piling up than

your friendship. And then there is Chewing Gum, which is banned in Singapore! And of

course of late we had issues in India with the banning of political party campaigns on the

electronic medium! In all cases where there is a ban on advertising of the product and

service, clever marketing people seek to overcome such bans through the use of surrogate

means. Therefore, Kingfisher (which is incidentally a bird to start with) is an aggressively

advertised Mineral Water as well! And 8 PM is an Apple Juice! And then there are

aggressively advertised Playing Cards, brand advertising budgets of which must be

gobbling up more than a hundred times the turnover of the product category in question

itself! Surrogate advertising of all types has a limited life span in our society as of today.

Wait for a comprehensive ban on all kinds of surrogate advertising soon! And this is

when the Wills Lifestyle store just might have to change its name altogether, bowing to

the law of the land. Real stringent laws of the land!

Vijay Rekhi, UB Spirits Division President- UB's Bagpiper Soda and McDowell's

water have sold 1.5 million cases and yet were being treated on par with the non-existent

product extensions of other liquor companies.

INSIGHT ON THE TOBBACO INDUSTRY

Some Quick facts

Cigarettes cause about 6.35 lakh deaths in India every year.

Two and a half thousand Indians die every day from smoking related diseases -

one every 40 seconds.

30

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.

With declining markets in the West, and 50 per cent of India's population under the age

of 25, the major tobacco companies are increasingly targeting India as their new growth

market. Already, 250 million Indians use tobacco, and the market's already worth a

massive $5 billion. And they don't only smoke it: many Indians chew tobacco, mixed

with lime, spices and other substances - some of them possible carcinogens. As a result,

India has one of the world's highest rates of mouth cancer.

It's more than sponsorship, says Suhel Seth, who used to be in marketing with the Indian

Tobacco Company (ITC). "It's very careful target marketing where they're looking at

young people who watch the sport, who are almost fanatic about it see their icons being

associated with a cigarette brand. . . Cricket is the only common religion in India."

The Indian smoking tobacco market is dominated by the indigenous bidis in volume

terms. Bidis are stronger and cheaper than white cigarettes, and are the preferred smoke

of Indians across the country but especially in the northern regions. The bidi industry

enjoys political protection, and is not so heavily taxed, even though bidis have a higher

nicotine content. Cigarettes account for only 18.8% of domestic tobacco consumption in

India. Bidis account for 53.5%, and the balance is mainly non smoking tobacco (NST)

products. According to estimates by the World Health Organisation (WHO), 8 lakh

persons die from tobacco related diseases every year in India alone, with every cigarette

reducing the life of smokers by 5.5 minutes. The economic and health costs of this

consumption are staggering, considering that 60 per cent of the Indian population

accesses health care by taking on loans or by selling property & assets.

Volume consumption of cigarettes declined sharply in 2001. The share of cigarettes in

tobacco consumption has been declining steadily, falling to a record low of 87.8 billion

sticks in March 2004, down from its peak at 104.2 billion sticks in March 1998. Cigarette

sales have been adversely affected by rising excise duties and legislation against public

31

smoking. There has been a movement in consumption patterns towards smokeless

tobacco .Retail sales of manufactured cigarettes are also being adversely affected by

contraband, the volume share of which is estimated to have risen to nearly 12% in 2002,

from 1% in 1997. Traditionally, contraband is strong in the premium end, but more

recently it has also been growing in the economy price band segment

The concept of low tar or low nicotine is not significant in India. The standard varieties in

cigarettes are Kings, Filters and Minis

India’s leading tobacco manufacturer ITC reported a 4% growth in cigarette volumes

year-on-year for the period April to August 2002, compared to a decline of 9% in the

same period in 2001. Its two competitors Godfrey Philips India and VST also reported

some growth in sales volume over the same period

Prices of cigarettes have been rising constantly, with the excise duties on cigarettes

increasing each and every year from 1998 up to 2001. Duties were left unchanged in

2002 giving some stability to prices

The current view in the industry is that cigarette sales are in decline and that the habit has

become less popular with the young

There have been increasing problems for the domestic cigarette industry. Smoking is

being gradually curbed in public places. There is growing health consciousness among

the premium cigarette smokers

Growers and manufacturers realize that diversification is the only long-term solution

available to the industry

State Governments are becoming more stringent with their regulations: smoking on

railway platforms is strictly prohibited and a number of companies are making their

entire premises smoke free

More recently

Advertisers such as United Breweries went ahead and set up an airline with a brand

name, colour and logo style that was the same as a liquor brand they owned. Advertisers

like ITC went ahead and set up a chain of lifestyle stores under the name and style of a

cigarette brand they owned. This was when there were already rules and laws in place

32

that expressly forbade this. Today we have a large airline that is a legitimate business

called Kingfisher. And a large chain of lifestyles stores called Wills. An equally

legitimate business. Yet, even Vijay Mallya would not be able to tell you with a straight

face that his airline was named Kingfisher at a time when it was legal to do so. Nor

would Yogi Deveshwar. And they are both honorable men. If the Government was

serious about enforcing its rules and laws it could have put a stop to these names years

ago. It was expedient to allow them to grow into large legitimate businesses and then

deem them legitimate. Now one can say that you cannot have a product (other than the

liquor brand) called Seagrams 100 Pipers. That merely locks the doors after the horses

have fled. How will you decide that a business is legitimate or not? Would Bacardi Blast

cassettes and CDs be seen as legitimate. Of course it would be. Would any of these be

“right”? Certainly not. The point to note is that there is nothing surrogate about

advertising. There is something surrogate about ethics and values and a sense of right and

wrong. And so you have an actress who was hailed as the only “man” in Bollywood

endorsing a bravery award named after a cigarette brand. And you have pious corporate

social responsibility programmes from a tobacco company that freely endorses surrogate

advertising. And you have a Member of Parliament whose intentions could definitely be

construed to point at encouraging surrogate advertising. Forget the advertising agencies.

They are too small in this game. Advertisers must decide what is right and what is wrong.

And the consumer must be the ultimate judge. Do you want to patronise the products and

services of companies who are legally correct, or really correct? That’s a choice you have

to make. The advertising is purely incidental.

33

RENFOURCEMENT OF BAN & OTHER MEASURES

TAKEN BY GOVERNMENT

Following the restriction on advertising and ban on sports sponsorships last year,

Cigarette companies such as ITC and VST, and liquor companies such as UDV,

McDowell, UB now face another hurdle. The Information and Broadcasting Ministry is

planning to go hard on surrogate advertisements by cigarette and liquor companies.

The Ministry has already clamped down on two brands - McDowell No 1 and Gilbey's

Green Label - which have been using surrogate advertising extensively to sell liquor. The

Ministry had issued show-cause notices to broadcasters such as Star, Zee, Sony and Aaj

Tak seeking explanation why action should not be taken for violation of Rule 7 of the

Cable Television Networks Rules, 1999 for carrying surrogate advertising on liquor &

tobacco. The so called surrogate ads under scrutiny are: McDowell’s Mera Number

One, Gilbey’s Green Label ads, Bagpiper soda water, Kingfisher mineral water,

8PM apple juice, ITC-GTD’s (greeting cards division) Expression Greeting Cards,

Red & White Bravery Awards and Wills sportswear.

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. Both Zee and Star have agreed to withdraw the ads, while

the other channels are expected to follow suit.

Five other brands have come under the magnifying glass now - Charms cigarette,

Smirnoff Vodka (both of which sell audio cassettes and CDs), Haywards 5000 (darting

kits), Royal Challenge Whiskey (Golf Accessories) and Kingfisher beer (Water). A

committee has been set up to look into the issue. The committee will review various

advertisements and determine whether a particular advertisement would be categorized as

surrogate advertising or not. The advertising of products would be considered surrogate if

there was a clear recall of the actual products.

The clamping down on surrogate advertising will weigh heavily on these companies.

Domestic liquor majors have been facing increasing competition from international

34

brands launched in the country by leading global liquor majors post removal of restriction

on imports. Restriction on the most effective medium of advertising ie television would

obviously hamper brand building. The cigarette majors too have been facing diminishing

growth in volumes for the last few years and rising competition from cheap smuggled

products. Brand strengthening activities would naturally be curtailed if the ban on

surrogates were implemented effectively. It remains to be seen if Retailing Initiatives

under the Wills Lifestyles brand by ITC is also considered a form of surrogate

advertising. Or will the ITC clout be strong enough to convince the regulators that

Retailing is a full-fledged business undertaken by ITC.

As of August 2006, the government had taken a lenient view and allowed advertisements

of products with the same name as cigarettes or liquor to be aired if there are no direct

or indirect references to such 'prohibited' products.

But the new notification issued in February 2008 that puts a total ban on tobacco and

alcohol commercials on TV has put commercial interests and existing contracts amongst

advertisers and broadcasters in a bind.

Some of the other measures taken by the government are as follows

CURB ON TOBACCO

Union Health Ministry has issued directives banning all smoking scenes in films

as well as on television.

Ban smoking in public places

Forbids sale to persons below the age of 18 years, to discourage adolescents from

consuming tobacco products

No person engaged in tobacco products-related activity will advertise and no

person having control over media shall advertise tobacco products

35

ANALYSIS OF THE PRIMARY DATA

In order to have broader & balanced sample, there were two target segments that were

identified first being the advertising companies who actually understand the market,

analyze the requirement of the client & the target customers and accordingly design

advertisements to communicate the desired message effectively.

The second target segment consists of people from diverse backgrounds or the general

segment, who are the main consumers. The questioners were distributed to advertising

companies and also to individuals or general public (consumers). While out of the total

hundred questionnaires, twenty were given to people in advertising sector, eighty

questionnaires were given to individuals from diverse background.

Q.1 Do you think we require any ban on Tobacco & Liquor advertising?

95

56.2564

5

43.7536

0

10

20

30

40

50

60

70

80

90

100

Advertising General Overall

Segment

Op

en

ion

of

Re

sp

on

de

nts

(%

)

Yes

No

Advertising Segment-

A staggering 95% of the sample from the advertising companies felt that a ban should be

imposed on advertising of Tobacco & Liquor. As low as 5% of the sample from the

36

Advertising companies, believes that a ban on advertising of Tobacco & Liquor is not

required.

Others-

Amongst the sample, other than those from advertising segment, 56.25 % are in favor of

a ban being imposed on advertising of tobacco & liquor. On the other hand 43.75 % of

the audience from the general target audience says that no ban is required on the

advertising of liquor & tobacco.

Conclusion-

As much as 64% of the sample is in favor of a ban being imposed on tobacco & liquor

advertising, as against a 36% who feel that no ban on tobacco & liquor advertising is

required. This clearly shows that a majority of people feel that the ever rising

consumption & ills of consuming tobacco & liquor can be controlled by putting a ban on

advertising tobacco & liquor. This reflects that the majority is in favor of the ban

introduced by the government on liquor & tobacco advertising.

Q.2 Do you think the government has been successful in controlling the consumption

of tobacco & liquor by imposing a ban on Tobacco & Liquor advertising?

3036 35

7064 65

0

10

20

30

40

50

60

70

80

Advertising General Overall

Segment

Nu

mb

er

of

Re

sp

on

de

nts

(%

)

Yes

No

37

Advertising Segment-

In the opinion of as many as 70% of the sample from advertising segment, the

government has not been successful in its attempt to control the consumption of tobacco

& liquor by putting a ban on their advertising. Only 30 % of them consider that

government has been successful in this endeavor of their.

Other- While 36.25% of the sample feels that government has curbed the consumption of

tobacco & liquor by imposing a ban on their advertising, a larger part of the

sample .i.e.63.75% feels the ban has not helped the government achieve its objective

Conclusion-

As against 35% of the sample who have voted in favor of the government measure, 65%

of the sample considers that the government has failed in its endeavor to control the

consumption of tobacco & liquor by imposing a ban on its advertising.

Since the liquor & tobacco manufacturers have found alternate means of promoting their

products, the ban has not been successful putting restriction to the ever increasing

demand of liquor & tobacco. The response to the above question shows the opinion of the

masses & highlights the inability of the government to achieve its objective of curbing

the consumption of the tobacco & liquor.

Q.3 Which one of the following do you consume?

In order to be able to analyze the feedback of the people constituting the sample it was

important to know there preference for tobacco & liquor.

38

10

22.5 20

10

2.5 45

63.75

52

75

11.25

24

0

10

20

30

40

50

60

70

80

Advertis ing General Overall

Segment

Co

nsu

mp

tion

Pa

ttern

of R

esp

on

de

nts

(%)

Tobacco & Liquor

Tobacco Only

Liquor Only

None

Advertising Segment-

Out of the twenty people belonging from the advertising background

10% of them consumed both tobacco & liquor, 10% consumed only tobacco, those who

consumed liquor only constituted for 5% of the sample. However majority of them .i.e.

75% of them said they consumed none of the two.

Others-

In case of the general sample or the sample constituting of general public 22.5% people

said they consume both tobacco & liquor, 2.5% consumed only tobacco, 11.25% of them

consumed none. But 63.75% agreed on their being consumers of liquor alone.

Conclusion-

Out of the total sample size of 100, 20% consume both tobacco & liquor, 4% consume

only tobacco, 52% consume only liquor and 24% dose not consume any of the two. The

result shows majority of the sample being consumers of tobacco &/or liquor, this implies

that the data collected from this sample provides a realistic base for analysis.

Q.4 What comes to your mind when you see advertisements like Red & White

Bravery Awards, Royal Challenge Golf & club Accessories, Bagpiper Soda,

Aristocrat Apple Juice, Manikchand Filmfare Awards?

39

6042.5 46

5 46.25 385

22.519

30

17.520

0

20

40

60

80

100

120

140

Advertis ing General Overall

Segment

Op

en

ion

of R

esp

on

de

nts

(%

)

Associate toProduct in the Ad

EncouragesIncreasedconsumption

Encourages toConsume

Reminds of CoreProduct

Advertising Segment-

A strong 60% of the target segment says the surrogate advertisement reminds them of the

core product that is the liquor or tobacco. 5% percent of the people in the sample feel that

the surrogate advertising encourages them to consume liquor or tobacco. Another 5% of

them feel that surrogate advertising makes them feel like consuming more of the liquor or

tobacco. However 30% of the target segment in the sample feel that for them surrogate

advertisement are advertisement of only the product being shown there in & not of the

brand or core product.

Others-

In the general target segment, 42.5% of the people feel that the surrogate advertisements

remind them of the core products i.e. liquor or tobacco. 46.25% of the people from whom

the data was collected said the surrogate ads encourage them to consume liquor &

tobacco. While 22.5% of those who were part of the sample feel that surrogate

advertising induced in them the desire to increase the consumption of liquor & tobacco,

17.5% say that for them surrogate advertising is just another which, tries to market the

product being advertised.

Conclusion-

40

The very reason for which the liquor & tobacco manufacturers took to surrogate

advertising was that in the presence of the ban, they needed to promote there product &

maintain a strong brand recall. All this was obviously for the very basic cause, that is

maximize sales volume & to have a bigger customer base.

Based on the response to this question it can be said that surrogate advertising does its job

well because 46% of the respondents correlate to the core product, whose brand is being

advertised, 38% of them are encouraged to consume tobacco & liquor. As per 19% of

the people in the sample, surrogate advertisements also create desire in the viewers to

increase their consumption of tobacco & liquor. Only 20% of the people feel that for

them surrogate ads are just an ad of the product being promoted in the advertisement &

not of the core product or brand.

Q.5 Are you aware of the phenomenon of Surrogate Advertising (as mentioned

above)

Advertising, 75

Advertising, 5Advertising, 20

General, 25

General, 8.75

General, 66.25

Overall, 35

Overall, 8

Overall, 57

0

20

40

60

80

100

120

140

160

Familiar & Awareof Concept

Not Familiar butAware of Concept

Not Familiar & NotAware of Concept

Familiarity & Awareness

Pe

rce

nta

ge

of

Re

sp

on

de

nts

(%

)

Overall

General

Advertis ing

Advertising Segment-

In the advertising segment of the sample 75% of the people said they were not just

familiar with the term surrogate advertising but they also knew the concept. Only a small

41

section, constituting 5% of the respondents from advertising and media target segment

said even though the new the concept, they were not familiar with the term.

20% were unaware of both the term & concept of surrogate advertising.

Others-

Among the general target segment the majority constituting of 66.25% said they were not

aware of the term surrogate advertising & the concept. While 25% people said they were

familiar with the term surrogate advertising & also knew the concept, 8.75% of people

said although the new the concept but they did not know the term surrogate advertising.

Conclusion-

In order to understand the awareness & comfort level of the target segments, it was

important to determine there knowledge about the topic of the study. The result shows

that surrogate advertising is a less known fact to a layman & hence the surrogate adds

would have a mixed impact on the audience, this means that while some would

consciously realize of why surrogate advertising of core brand is being done, others

might not be equally receptive to the message of the ad. The response to the above

question highlights the lack of awareness in people about surrogate advertisement. Out of

the total sample of 100, 57% said they were not aware of surrogate advertising as a term

& concept. Out of the remaining 35% said that they were familiar with both the term &

concept of surrogate advertising. Remaining 8% were only familiar with the term but not

of the concept.

Q.6 What according to you is the root cause that led to surrogate advertising?

42

Advertising, 50Advertising, 20

Advertising, 40

General, 57.5

General, 20

General, 40

Overall, 56

Overall, 28

Overall, 39

0

20

40

60

80

100

120

140

160

180

Loopholes in Banon Advertising

Pressure ofIncresed

Competition & Ban

Better BrandRecall due to

Surrogate Ad's

Root Cause of Surrogate Advertising

Per

cen

tag

e o

f R

esp

on

den

ts (

%)

Overall

General

Advertis ing

Advertising Segment-

Majority of the people from the advertising segment of the sample .i.e. 50% of the

respondents feel that surrogate advertising has emerged from the loopholes existing in the

laws directed towards implementing the ban. 20% of the respondents feel that surrogate

advertising is an outcome of increased competition among the liquor & tobacco giants,

which forced them to advertise in one form or another. In the opinion of 40% of the

people from advertising segment, surrogate advertising exists because it leads to better

brand recall & increased sales of the core product.

Others-

While 57.5% of those belonging to the general segment, attributed the existence of

loopholes in the law created to ban advertising of liquor & tobacco as the root cause that

led to surrogate advertising, 20% respondents felt that surrogate advertising was an

outcome of the increased competition among the liquor & tobacco giants & this is what

forced them to take up advertising in one form or another. For 40% of the general

segment who responded to the questionnaire surrogate advertising emerged because it

leads to better brand recall & helps in increased sales of the core product.

43

Adding to the findings of question 4 of the questionnaire

Conclusion-

Out of the total sample size of 100, in the opinion of 56% of the people the root cause of

why surrogate advertising exists is that there are loopholes in the laws that were created

to implement a ban on advertising of liquor & tobacco. Like any other industry the liquor

& tobacco industry also has lots of players which, results in cut throat competition. This

is the view point that 28% of the respondents share, as they feel the pressure to advertise

in form or the other to compete in the market, is what has lead the liquor & tobacco

giants to take up surrogate advertising as an alternative to the ban. Another 39% of the

people said surrogate advertising exists because it leads to a better brand recall & leads to

increased sales of the core product.

The above response reveals the large success story of surrogate advertising. The results

mentioned above in addition to the response to question 4 of the questionnaire out rightly

shows that surrogate advertising results in a better brand recall & increased sales.

Q.7 Do you think Surrogate advertising is good for the core brand itself ?

50

52

51

50

48

49

46

47

48

49

50

51

52

53

Advertising General Overall

Segment

Op

enio

n o

f R

esp

on

den

ts (

%)

Yes

No

44

Advertising Segment-

Surrogate advertising, is it truly beneficial for the core brand itself or does it erode the

essence & the brand image of the core brand? The feedback that was received from the

Advertising segment of the sample indicated a mixed opinion. While 50% of them felt

that the surrogate advertising is good for the core brand & does benefit it, the other 50%

felt that surrogate advertising has a negative impact on the core brand.

Others-

Talking of the general segment, 52% of the people are of the view that surrogate

advertising does good to the core brand itself. On the contrary 48% feels that surrogate

advertising does not contribute in a positive manner to the core brand.

Conclusion-

Taking a look at the comprehensive picture there is very small difference between the

number of people who feel surrogate advertising contributes positively to the core brand.

While 51% of people are of the view that surrogate advertising is good for the core brand

itself, 49% of those who responded to the questionnaire feel that the surrogate advertising

is not good for the core brand itself. This reveals that surrogate advertising needs to

planned & executed very carefully as it plays a critical factor in making or breaking of

the brand image & exclusiveness of the brand. There is high risk that if surrogate

advertising is not executed correctly, it might lead to adverse impact on the brand.

Q.8 Do you think that surrogate advertising leads to increase in consumption of

liquor & tobacco?

45

70

57.5

80

30

42.5

20

0

10

20

30

40

50

60

70

80

90

Advertising General Overall

Segment

Op

en

ion

of

Re

sp

on

de

nts

(%

)

Yes

No

Advertising Segment-

In the opinion of 70% of those belonging to advertising segment, surrogate advertising

leads to increase in the consumption of liquor & tobacco. 30% of people from the same

segment are of the belief that surrogate advertising dose not lead to any increase in sales

of liquor & tobacco.

Others-

Surrogate advertising dose lead to increase in the sales of liquor & tobacco, this is the

belief of 57.5% of the respondents from the general segment. However 42.5% of the

respondents are of the view that surrogate advertising d ose not contribute to the increase

in the sales of liquor & tobacco.

Conclusion-

In the overall context 80% of the respondents said that liquor & tobacco sales increased

as an outcome of the surrogate advertising. Where as another 20% of those who

responded to the questionnaire were of the view that surrogate advertising dose not result

ssupport the belief that surrogate advertising results in increased consumption of liquor &

tobacco, highlights the success of surrogate advertising in achieving the key motive,

which is increasing the sale of the core brand being advertised in them.

46

Key Findings of the Study

95% of the respondents in the Advertising segment emphasize that a ban on liquor

& tobacco advertising is required. This is a surprising revelation from the horses

mouth.

The success of the government in imposing the ban is evident from the fact that

65 % of the total respondents have firmly said No, when asked if the government

was successful in imposing the ban on liquor & tobacco advertising.

As compared 52% of the respondent who consume only liquor, only 4% of the

respondents consume tobacco alone. This shows that there is not truth in the fact

that those who drink alcohol & also consume tobacco. This also supported by the

fact that only 20% of the respondents consume both tobacco & liquor.

The effectiveness of the surrogate adds is eminent from the finding that 46% of

respondents accept that it reminds them of the core product. Another 38% of

respondents feel surrogate advertising encourages them to consume tobacco &

liquor.

As many 57% of the respondents were not aware of both the term surrogate

advertising & the concept. This shows that ignorance is bliss, though here it’s a

bliss for the tobacco & liquor manufacturers

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FINDINGS

Should one lose the right to tipple or smoke? Certainly not. The wisdom of the

Government extends only to banning the advertising of tobacco or liquor. Not to the

manufacture or marketing of these supposedly deadly substances. 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

we have to live with surrogate advertising. We can remember the `Keep Walking' series

of advertising. 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.

Who is anyone to decide whether one can sip his/her 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 flavor that could come only from the peat of Scotland and the

pristine Highland water.

Who has the right to decide if one should deeply inhale the rich aroma and full-bodied

flavor of carefully rolled Virginia tobacco? Every time one nonchalantly put one of those

sticks to his/her lips they feel to have mounted a wild mustang and riding down the lonely

mountain trails of Colorado.

But for a company like ITC, the ban may infact prove beneficial rather than detrimental.

ITC’s brands are well entrenched in the market. Surrogate advertisements in most cases

play a role of reinforcing brand recall rather than inducing consumption. If no body can

advertise, than the threat of competition from new players or new launches by

competitors is minimized. ITC with its wide brand portfolio consisting of the most well-

known brands in the country and the widest distribution reach among the cigarette

companies is better placed than any other competitor in an atmosphere where no

advertising is allowed.

The ban therefore, if and when implemented, would not have any negative impact on

ITC’s earnings in the near future. What could be a real concern is the growing strength of

48

the anti-smoking lobby. Policy decisions in the pre-budget period indicate to a certain

extent the Government’s stand on various issues. The announcement made this week

could just be a precursor of what is likely to come in the Budget to be announced at the

end of this month. An excise duty hike therefore could well be on the cards.

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.

The motivations of firms look even more suspect when they advertise products that

cannot be bought. In 2002, for example, Jagatjit Industries, the maker of Aristrocrat

Whisky, advertised a product called `Aristrocrat Apple Juice.' The company reportedly

confirmed availability of the fruit juice in Delhi, Haryana, Punjab and Rajasthan, yet, no

reputed shop in Delhi had ever seen it, let alone sells it.

Understanding the gravity of the situation, the Indian Broadcasting Foundation (IBF) has

started to take on the surrogate liquor advertisements. In a recent board meeting, the IBF

decided that Jagatjit Industries and other liquor manufacturing units must get production

of the advertisement approved both at the `storyboard stage' and after the production of

the commercial.

It also ruled that that if liquor companies promote any juice, mineral water or soda, these

should be shown in a proper manner and not as trimmings to liquor advertisement.

These are welcome steps, but the key point lies in enforcement. If, in a free society,

producers have a legitimate right to let consumers know about their products through

49

advertisements, consumers have the right to information in adverts that are clear and

honest. 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. Voluntary Organization in Interest of Consumer Education (VOICE), a

Delhi-based non-profit, non-political consumer group conducted a study in October 2004.

The study was based on the premise that the Cigarettes and other Tobacco Products

(Prohibition of Advertisement and Regulation of) Trade and Commerce, Production,

Supply and Distribution Act 2003 has raised the expectations of the citizens further on

the role of the law enforcers. Among other features, the Act prohibits all forms of direct

and indirect tobacco advertising; bans totally the sponsoring of any sport or cultural

events by tobacco companies; prohibits smoking in public places; prohibits sale of

tobacco products to persons under 18 years; prohibits sale of tobacco products within 100

yards of educational institutions; makes mandatory indication of nicotine and tar contents

on the packets and presence of pictorial warnings on the packets in English as well as

Indian languages.

A look at some enlightening findings from the study:-

92% of the law enforcers in Delhi strongly disagree with the statement that there

is nothing wrong in smoking/consuming tobacco.

Only 70% of law enforcers in Delhi are aware of existing laws against smoking in

India and of these only 58.8% are aware of the anti-smoking legislation of 2003.

If the law enforcers themselves are not familiar with the laws then they are

certainly not in a position to implement those laws adequately.

59% of the law enforcers in Delhi agreed with the statement that they do not want

to take extra load by enforcing such 'minor laws' strictly. Instead, enforcing

personnel believe they already have many other important laws to implement.

41% of the law enforcers in Delhi agreed with the statement that their

involvement in tobacco related controls do not give them any benefit or

recognition hinting that such enforcements have very little significance in terms

of community and offence.

50

SUGGESTIONS

There should be stringent regulatory measures to curb the practice, such as:

making transparent laws banning surrogate advertisements for different products

under a single brand names, by amending the Trade Marks Act, for instance;

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;

asking the electronic and print media to adhere to the advertisement codes and not

encourage surrogate advertisements;

calling on the ASCI address complaints received from consumers against

surrogate advertisements and take appropriate actions immediately;

creating a consumer awareness programme to help people understand the negative

impact of surrogate advertisements;

adopting strict laws to penalize those companies featuring surrogate

advertisements without any real existence of the product; and

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.

Health warnings A single health warning (“Cigarette smoking is injurious to

health” or “Drinking liquor is injurious to health”) is mandatory on packets and

any advertisements.

MORE OF CSR

Corporate along with the government can take up the following measures

Promote public education programmes on the harmful effects of the abuse of

liquor;

Promote social responsibility programmes;

51

Promote the establishment of recreational facilities for youth;

Promote the establishment and maintenance of support structures for the

rehabilitation of individuals and communities affected by alcohol abuse;

Promote further research on the nature and extent of the socio-economic effects of

alcohol abuse; and

Promote interaction between government and civil society, notably civic, youth

and religious formations.

52

BIBLIOGRAPHY

Times of India

Hindu business line

Union health ministry

Information & broadcasting ministry

Saffer, Henry. The control of Tobacco Advertising and Promotion,

Background paper.

http://www1.worldbank.org/tobacco/book/html/chapter4.htm

http://www.who.int/features/2003/08/en/

http://scriptorium.lib.duke.edu/eaa/timeline.html

http://www.tobacco.org/resources/history/Tobacco_History21.html

http://surogate/EH_Net Encyclopedia Advertising Bans, US.html

53

QUESTIONNAIRE

Note: To mark your response please tick in the check box given before each choice

1. Do you think we require any ban on Tobacco & Liquor advertising Yes No

2. Do you think the government has been successful in controlling the consumption of tobacco & liquor by imposing a ban on Tobacco & Liquor advertising

Yes No

3. Which one of the following do you consume Tobacco & Liquor Tobacco Only Liquor Only None

4. What comes to your mind when you see advertisements like Red & White Bravery Awards, Royal Challenge Golf & club Accessories, Bagpiper Soda, Aristocrat Apple Juice, Manikchand Filmfare Awards

Reminds you of the core product i.e. liquor or tobacco Encourages you to consume liquor or tobacco Makes you want to consume more of their liquor or tobacco You only consider it as an advertisement of the product being

shown

5. Are you aware of the phenomenon of Surrogate Advertising (as mentioned above)

Yes, I am familiar with the term Surrogate Advertising & know the concept

I am not familiar with the term Surrogate Advertising, but I knew the concept

No, I was not aware of the term Surrogate Advertising & the concept

6. What according to you is the root cause that led to surrogate advertising

Existing Loopholes in the laws directed towards implementing the ban

54

Due to increased competition the liquor & tobacco giants had to advertise in one form or another

Surrogate advertising results in a better brand recall & helps in increased sales of the core product.

7. Do you think Surrogate advertising is good for the core brand itself Yes No

8. Do you think that control on surrogate advertising leads to increase in consumption of liquor & tobacco? What in your opinion should be done to control the increase in consumption of liquor & tobacco, caused by surrogate advertising

……………………………………………………………………………………………..

Personal Information

Name:

Designation:

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