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AMITY SCHOOL OF BUSINESS

SURROGATE
ADVERTISING
SUBMITTED BY:-
MADHVI SOOD
A3906408283
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

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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.

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

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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
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.

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``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”.

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

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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.

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

26
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.

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.

27
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?
Answer: Abhishek Khaitan, Executive Director, Radico Khaitan-Surrogate
advertising ban would not hamper our plans to a large extent because there are a number

28
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
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

29
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.
 About 33 per cent of cancer cases are attributed to tobacco consumption.

30
 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
smoking. There has been a movement in consumption patterns towards smokeless

31
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
that expressly forbade this. Today we have a large airline that is a legitimate business

32
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?

100 95
Openion of Respondents (%)

90
80
70 64
60 56.25
Yes
50 43.75
36 No
40
30
20
10 5
0
Advertising General Overall
Segment

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

36
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?

80
Number of Respondents (%)

70
70 64 65

60
50
36 Yes
40 35
30 No
30
20
10
0
Advertising General Overall
Segment

Advertising Segment-

37
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
80 75

Consumption Pattern of Respondents


70 63.75
60
52
50 Tobacco & Liquor
Tobacco Only
40
Liquor Only
(%)

30 22.5 24 None
20
20
10 10 11.25
10 5 4
2.5
0
Advertising General Overall
Segment

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
140

120 17.5
20 Associate to
100 22.5 Product in the Ad
Openion of Respondents (%) 19
30
80 Encourages
5 46.25 38 Increased
60 5
consumption
Encourages to
40
60 Consum e
20 42.5 46
Rem inds of Core
0 Product
Advertis ing General Overall
Segm ent

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)

160
Percentage of Respondents (%)

140
120 Overall, 35 Overall, 57
Overall
100
General, 25
80
60 General
General, 66.25
40 Advertising, 75
20 Overall, 8
General, 8.75 Advertising, 20 Advertising
0 Advertising, 5
Familiar & Aware Not Familiar but Not Familiar & Not
of Concept Aware of Concept Aware of Concept
Familiarity & Aware ne ss

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
180

Percentage of Respondents (%)


160
140 Overall, 56
120 Overall
100 Overall, 39
80 General, 57.5
60 Overall, 28 General, 40 General
40
Advertising, 50 General, 20
20 Advertising, 40
Advertising, 20
0 Advertising
Loopholes in Ban Pressure of Better Brand
on Advertising Incresed Recall due to
Competition & Ban Surrogate Ad's
Root Cause of Surrogate Adv e rtising

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 ?

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52
52
Openion of Respondents (%)

51
51
50 50
50 Yes
49
49 No
48
48

47

46
Advertising General Overall
Se gm e nt

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
Openion of Respondents (%)
90
80
80
70
70
57.5
60
50 42.5 Yes
40 No
30
30
20
20
10
0
Advertising General Overall
Segment

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.

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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;

51
 Promote social responsibility programmes;
 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

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6. What according to you is the root cause that led to surrogate
advertising
 Existing Loopholes in the laws directed towards implementing
the ban
 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:

55

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