consumer perception towards surrogate advertisement

CONSUMER PERCEPTION TOWARDS SURROGATE ADVERTISEMENT

CAPSTONE PROJECT (PART –II) MGT 738 REPORT

“Consumer Perception Towards Surrogate Advertisement”

(Project Term February-April, 2013)

Submitted by:

Amrish Kumar Das (11112394)

Divya Sehgal (11112997)

Kashtina (11113050)

Manpreet Kaur (11111768)

Vishwadeep Singh (11114477 )

Under the Guidance of Mr. Himanshu Sood (16655)

DEPARTMENT OF MANAGEMENT

LOVELY PROFESSIONAL UNIVERSITY

JALANDHAR NEW DELHI GT ROAD

PHAGWARA

PUNJAB


TO WHOME IT MAY CONCERN

This is to certify that the project report titled “CONSUMER PERCEPTION TOWARD

SURROGATED ADVERTISMENT” carried out by AMRISH KUMAR DAS, MANPREET

KAUR, KASHTINA, VISHWADEEP KUMAR, DIVYA SEHGAL a has been accomplished

under my guidance & supervision as a duly registered MBA student of the Lovely Professional

University, Phagwara. This project is being submitted by him/her in the partial fulfilment of the

requirements for the award of the Master of Business Administration from Lovely Professional

University.

Her dissertation represents his original work and is worthy of consideration for the award of the

degree of Master of Business Administration.

___________________________________

(Name & Signature of the Faculty Advisor)

Date:


DECLARATION

This is to certify that we are the student of department of Management, studying in

MBA(4th Semester), have undergoing research project on title “ Consumer perception

towards surrogate advertisement” for partial fulfilment of degree of Master of Business

Administration to Lovely professional University, Phagwara(Punjab). We solemnly declare

that the work done by us is original and no copy of it has been submitted to any other

university for award of any other degree/fellowship.

Name Registration Number



Kashtina (11113050)


Vishwadeep Singh (11114477)

Specialization:Marketing

Section: Q1R06


ACKNOWLEDGEMENT

“Appreciation can make a day, even change a life. Your willingness to put it into words is all

that is necessary.”

The joy of ingenuity!!!! This is doubtlessly what this project is about. Before getting to brass

track of things we would like to add a heartfelt word for the people who have helped us in

bringing out the creativeness of this project.

To commerce with things we would like to take this opportunity and humbly thank to Lovely

Professional University, Phagwara, for being appreciative enough by giving us an

opportunity to undertake this project.

We express our sincere gratitude to our faculty guide Mr. Himanshu Sood for her valuable

guidance, continuous support and cooperation throughout our project, without which the

present work would not have been possible.

We would also like to extend my deep regards towards all the faculty members of Lovely

Professional University, Punjab for helping me to complete my project successfully.

We are always beholden to our God, for always being with us and showing us the right

ways, our family members, our loved ones for consistently help us with encouragement and

criticism throughout the project work.

Everything can’t be mentioned but nothing is forgotten.



Kashtina (11113050)


Vishwadeep Singh (11114477 )

LPU, PUNJAB


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 alcohol 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 guide for a product

that is almost non-existent in commercial terms.

Product advertising for liquor and cigarette companies is banned in the country since 1995

by Cable Television Network (regulation) act. This ban is now likely to be extended to

advertising of extended brands. The very purpose of banning liquor advertisement is

defeated by surrogated advertising.

In India, the trend of surrogated advertisement gathered momentum with the Cable TV

Network Regulation Act, which prohibits alcohol and liquor advertisement on TV channels.


Due to the ban, liquor companies focused more on promotions for brand building. The ban

on advertising of alcohol beverage products has severely handicapped communication with

consumers.

Companies with liquor brand are not advertising liquor product; instead they have extended

the equity of their brand into other fields. However as the TV was the most effective

medium of advertising, surrogated advertising on TV became popular.

In the mean time, some producers entered new segments under the liquor brand or

advertised these products under liquor brand.

The surrogated advertisement from liquor companies intensified further through

sponsorship advertisements from liquor companies intensified further attracting youth. In

late 2001, the broadcasters began arising socially responsible advertisement sponsored by

liquor companies. By early 2002, surrogated advertisement of liquor brands had intensified

like never before on satellite TV channels.

Keeping this thing in mind I decided to conduct a research to find out whether really this

surrogated ad helps to recall the original brand. Survey was done comprising of 103

respondents of different age group, different educational level and different class of society.

From the research we come to know that most influenced factor to consume alcohol is peer

pressure and advertisement. People whose income is below Rs 10000 spend more on

consuming alcohol. There are other factor which influence the consumption that are

occasion, work pressure, liquidation of contract, discounts and marketing factors.

Questionnaire was asked to fill by them, and data analysis was done with the help of SPSS

package, finding has been giving in the report.


TABLE OF CONTENTS

TITLE PAGE…………………………………………………………………………. i

TO WHOME IT MAY CONCERN ………………………………………………….ii

DECLARATION…………………………………………………………………….. iii

ACKNOWLEDGEMENT…………………………………………………………….iv

EXECUTIVE SUMMARY…………………………………………………………... v

TABLE OF CONTENTS …………………………………………………………….vii

LIST OF TABLES AND FIGURES…………………………………………………. x

Page No.

Chapter 1: Introduction ..............................................................................................1

1.1 Surrogate Advertisements ……..…………………………………….………………..3

1.2 Surrogated advertisement promoted by liquor companies……………….………..5

1.3 The Corporate Standpoint…………..……………………………………………..6

1.4 Surrogate Advertising: Emerging Trend………..…………………………………7

1.5 Consumer Psychographics and Surrogate Advertising………..…………………..9

1.6 Impact of surrogated advertisement on children………………………………….10

1.7 Issues for concern…………………………………………………………………11

1.8 Consumer reaction toward surrogated advertisement……………….……………11

Chapter 2: Legislative Measures …………..………..……………………………...13

2.1 Legislative Measures………………………………………………….……………………………………….14

2.2 Advertising Standard Council of India (ASCI) code………………………..…………….……….15

Chapter 3 : Literature Review ………..………………………………..……..…….20

3.1 Introduction.............................................................................................................21

Chapter 4 : Objectives and Need of Study ……………………………………...…24

4.1 Objective of study………………………………………………………………...25


Page No.

4.2 Need of the study………………………………………………………………25

Chapter 5 : Research Methodology ………………………………………..……26

5.1 Nature of the Research Design …………………………………………..…….27

5.2 Data Collection………………………………………………………………...27

5.2.1 Primary Data ………………………………………………………...27

5.2.2 Secondary Data………………………………………………………27

5.3 Sampling Method………………………………………………………………27

5.4 Sample Type ………………………………………………………………......27

5.5 Sample Size……………………………………………………………………27

5.6 Sample Area…………………………………………………………………..27

5.7 Tools Uses for Analysis ……………………………………………………...27

Chapter 6: Data Analysis ………………….………………………………..….28

6.1 Factor Analysis Results ………………………………………………………29

6.1.1 KMO and Bartlett's Test……………………………………………29

6.1.2 Total Variance Explained…………………………………………..30

6.1.3 Component Matrix……………………………………………….....31

6.1.4 Rotated Component Matrix………………………………………...32

6.1.4.1 Analysis on Rotated component Matrix……………….....32

6.2 Analysis on the questionnaire………………………………………….....34

6.2.1 Consumer consumption patter on following factors……………...34

6.2.1.1 Consumption in six months……………………………….34

6.2.1.2 Consumption rate in month ………………………………35


Page No.

6.2.1.3 Timing preferred for consumption………………….…..35

6.2.2 Parameter influence to buy alcoholic product………………….36

6.2.2.1 Due to monthly income………………………………....36

6.2.2.2 Money spend on alcoholic product …………………….36

6.2.2.3 Influence due to watching surrogated ads in day………37

6.2.2.4 Influencer to buy alcoholic product……………………37

6.2.3 Consumers perception toward legislative measure on surrogate38

6.2.3.1 Perception on necessity of advertisement………………38

6.2.3.2 Tax and other legal barrier on alcoholic products………38

6.2.3.3 Opinion about banning………………………………….39

6.3 Findings..…………………………………………………………………....40

Chapter 7: Conclusion & Suggestions.…………….…………………………41

7.1 Conclusion………………………………………………………………….42

7.2 Suggestions………………………………………………………………....43

7.3 Limitations of the study……………………………………………………44

8. References/Bibliography………………….………………………………………………………45

Annexure………………………………………………………………………47

Annexure A: Sample of Questionnaire ……………………………………….48


LIST OF TABLES…… ………………………………..…………………..Page No:

Table 1.1: Companies following surrogated advertisement..……….................4

Table 6.1.1: KMO and Bartlett’s Test………………………………………….29

Table6.1.2:TotalVariance explained…………………………………………...30

Table 6.1.3: Component Matrix………………………………………………..31

Table 6.1.4: Rotated Component Matrix……………………………………….32

LIST OF FIGURES………………….……… …………………………...Page No:

Figure 1.4: Surrogated ads. :Print advertisements ………………………………………..8

Figure 1.8: Consumer attraction created by surrogated advertisement………..12

Figure 2.2(a): Kingfisher brand promotional advertisement………………………….17

Figure 2.2(b): Brand promotional advertisement by different groups…………..18

Figure 6.1.2: Scree plot showing factors variables………………………………………...31

Figure 6.2.1.1:Consumption in six months …………………………………………………….34

Figure 6.2.1.2:Consumption rate in month…………………………………………………….35

Figure 6.2.1.3: Timing preferred for consumption………………………………………….35

Figure 6.2.2.1:Monthly Income……………………………………………………………………..36

Figure 6.2.2.2: Money spend on alcoholic product………………………………………..36

Figure 6.2.2.3:Influence due to watching surrogated advertisements in day..37

Figure 6.2.2.4: Influencer to buy alcoholic product……………………………………….37

Figure 6.2.3.1 Perception on necessity of advertisement…………………………….38

Figure 6.2.3.3: Opinion about banning………………………………………………………….39


Chapter 1

Introduction to Surrogate

Advertisements


Introduction

Advertisements have a strong influence in our life. We like them because they provide

information and create awareness about the market. Our decisions whether to buy a product

or not, is often completely influenced by the promotional activities of the companies

concerned. Therefore, due to the widespread adverse impact that advertisements of unhealthy

products like alcohol, liquor can cause, Indian government has always endeavored to curb or

at least restrict rampant advertisements of such products by appropriate legislations, orders

and directives.

Product advertising for liquor and cigarette companies is banned in the country since 1995 by

Cable Television Network (regulation) Act. According to rule 7(2) of the act, no broadcaster

is permission to show advertisement which promotes directly and indirectly promotion, sale

or consumption of cigarettes, alcohol products, wine, alcohol and liquor or other intoxicants,

infant milk substitution, feeding bottle or infant food. This ban is now likely to be extended to

advertising of extended brands.

In June 2002, the Indian Information and Broadcasting (I&B) Ministry served notices to

leading television broadcasters to ban the telecast of two surrogate’s ads of liquor brands

McDowell No. 1 and Gilbey’s Green Label. The Ministry also put some other brands ---

Smirnoff Vodka, Hayward’s 5000, Royal Challenge Whiskey and kingfisher beer on a

“watch list.” The surrogates used by these advertisements ranged from audiocassettes, CDs,

perfumes to golf accessories and mineral water.

A market survey in 2001 revealed that advertising has a direct influence on the consumption

habits of 431 million people in India and an indirect impact on 275 million ‘aspirants’ from

the lower income group. Considering this and realizing that nearly 50 percent of the

television owners have access to cable channels, there is no doubt that the hidden call for

alcohol consumption behind the surrogates 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.


1.1 Surrogate Advertisements:

A surrogate advertisement is one in which a different product is promoted using an already

established brand name. Such advertisements or sponsorships help in contribute to brand

recall. The different product shown in the advertisement is called the “Surrogate.” It could

either resemble the original product or could be different product altogether, but using the

established brand of the original product. The sponsoring of sports/ cultural/ leisure events

and activities also falls under the purview of surrogate advertising.

Surrogate advertising is advertising which embeds a brand or product message inside an

advertisement which is ostensibly for another brand or product. Surrogate advertising is

prominently seen in cases where advertising a particular product is banned by law.

Advertisement for products like cigarettes or alcohol which are injurious to heath are

prohibited by law in several countries and hence these companies have to come up with

several other products that might have the same brand name and indirectly remind people of

the cigarettes or beer bottles of the same brand. Common examples include Fosters and

Kingfisher beer brands, which are often seen to promote their brand with the help of

surrogate advertising.

Brands perhaps are the most valuable assets an Organization can have. Brands create an

image for themselves through the constant attention and nurture given to them by the

organization. Over a period of time some of the brands become the bread winners for the

organizations. In case of profit organizations to call them bread winners is not enough; they

need to be called gold winners. Any damage to the reputation of these brands can really

change the scenario for the organization.

If the brand is a Corporate brand assuming the role of an umbrella brand the dependence of

the organization is hundred percent on the brand as the organization is itself the brand. Since

the brands are associated with tangible and intangible benefits, the logo and the trademark,

they require a legal watch as well, and need to always stay within the frame work of business

regulations and law in many areas like safety to consumer, consumer’s interest, making

claims, any side reactions and information regarding the impact the brand consumption can

have.

Corporations spend huge sums on the promotion of brands in many ways. One popular and

widely practiced method is advertising which is very expensive as it reaches huge numbers.


Even when an organization spends about five percent of the sales revenue on advertising a

brand the amount in absolute terms is substantial. Having nurtured the brand for years if any

regulation bans advertising the brand in public interest it can be a serious problem for the

brand owner. How to keep the brand in the minds of the consumer becomes a major issue.

It is to be expected that the brand owner will not just surrender but will need to find a creative

alternate way to keep reminding the consumer. One such way is to create another product that

can be advertised legally and name the product with the same name of the brand that cannot

be advertised. These brands have been called surrogate brands because they are growing in

the womb of another mother.

We find in the market several such brands, for example mineral waters and sodas carrying the

banned alcoholic drink names. Retail outlets are being given the names of cigarette and

alcohol products. This is done by the owners of the brands to make sure that the consumer

recollects the brand that could not be advertised and develops an urge to consume the brand.

Governments are worried about this practice as there is a possibility that the very mention of

the name may raise the urge with in an individual to consume an alcoholic product or a

alcohol product which is not in the interest of the public health policy. So, often Governments

get into a dilemma on how to deal with such products.

Companies following surrogated advertisement:

Legitimate business Surrogated advertisement

Mc Dowell’s Walt whisky Mc Dowell’s soda/water

RadicoKhaitan’s 8pm whisky Radicokhaitan’s water

Hayward’s 500 beer Hayward’s soda/water

Derby special Derby special soda

Bacardi liquor Bacardi blast cds and cassettes

Bagpiper liquor Bagpiper soda and cassettes

Four square cigarettes Four square white water rafting

Kingfishers beer Kingfisher bottled drinking water

Smirnoff vodka Smirnoff cds and cassettes

Table 1.1: Companies following surrogated advertisement.


1.2 Surrogated advertisement promoted by liquor companies:

The liquor industry is a prominent player in this game. Few surrogate advertisements shown

in print, electronic and outdoor media are - Bagpiper soda and cassettes & CDs, Hayward’s

soda, Derby special soda, Gilbey’s green aqua, Royal Challenge golf accessories and mineral

water, Kingfisher mineral water, White Mischief holidays, Smirnoff cassettes & CDs,

Imperial Blue cassettes & CDs, Teacher's achievement awards etc. These products bear

exactly the same name and logo, which we had seen earlier in liquor advertisements. It was

little surprising to know that liquor giants like McDowell's and Seagram's have entered into

new segments like cassettes &CDs, mineral water, sports accessories etc. Later it was found

that the basic aim of these surrogate advertisements was to promote their liquor brands like

beer, wine, vodka etc. This brand extension is an act of bypassing the advertisement ban. A

similar trend is followed by companies making Cigarettes, Pan Masala and Gutkha. Few

examples of surrogate advertisements in this category are - Red & White bravery awards,

Wills lifestyle, Four Square white water rafting, Manikchand awards etc. Though a ban has

been imposed on advertisements endorsing alcohol products, this industry has resorted to

surrogate advertising a few years ago. The Health Ministry has recently implemented the

alcohol control legislation which will imply a complete ban on advertisements and all direct

& indirect promotional campaigns for alcohol products. In 2001, Indian Alcohol Company

(ITC) had voluntary withdrawn the Wills Sports sponsorship of the Indian cricket team when

the Government had first proposed a ban on advertising through legislation.


1.3 The Corporate Standpoint:

The industry segment has its own standpoint in defense. The liquor lobby claims that

everything is in accordance to the Government regulations. "If a brand has equity, why

shouldn't it be allowed to advertise? Also, brand extension is an industry practice adopted by

different product categories, "comments Alok Gupta of UB group.”When we advertise our

products, we follow all the guidelines," declares president, sales & marketing, Radico

Khaitan. They clarify that they have stopped showing liquor advertisements and they are free

to use the brand name for any other products. Even the Confederation of Indian Alcoholic

Beverages Companies (CIABC) advertising code maintains that advertisement of products

(real brand extensions) by the liquor industry must be allowed. From a layman's point of

view, their claims seem to be justified. But this is a clear example of taking advantage of the

loopholes. There is a point to ponder. When they have stopped showing liquor

advertisements, why the same brand name and logo is used to promote products like

cassettes& CDs or mineral water? They could have assigned different brand names. It seems

they have a hidden agenda of highlighting the liquor or alcohol brand. A similar tussle over

the issue of surrogate advertisements in politics was raised in April 2004 on the eve of Lok

Sabha elections. Complaints of slanderous and offensive advertisements were raised by two

major political parties - BJP and Congress against each other. The issue became so serious

that the Supreme Court had to interfere in this affair. Finally on 13 April 2004, the Court

gave a verdict to curb smear advertisements on electronic media. By appointing Election

Commission as referee, the court has tried to put an end to surrogate advertising in politics.

According to the Cable Act under the ministry of information and broadcasting,- "no

broadcaster is permitted to show an advertisement which promotes directly or indirectly, sale

or consumption of cigarettes, alcohol products, wine, alcohol, liquor or other intoxicants…"

Now a new clause has been added under the act stating that "any advertisement for a product

that uses a brand name which is also used for cigarette, alcohol product, wine, alcohol, liquor

or any other intoxicant will not be permitted". Finally, in April 2005, the ministry resorted to

a ban on surrogate advertisements of liquor and alcohol products on television. After this

directive, the surrogate advertisements are seldom shown on television. Now the companies

will have to reframe their policies. But who will take care of print and outdoor media is not

certain.

According to ASCI (Advertising Standards Council of India), surrogate advertisements are

harmful. Now it will be up to the ASCI to take up the matter with the respective companies.


1.4 Surrogate Advertising: Emerging Trend

A recent series of hoardings led me to delve into a very unique trend specific to Indian

advertising – Surrogate advertising a trend which is fast catching up and has suddenly

attracted a lot of innovative and creative brains around the country. Reason, on one hand, the

govt cannot allow public advertising of liquor companies. But ironically, liquor and cigarette

sales are the biggest revenue generators in terms of taxes and duties on the so items. That’s

why an overt acceptance of the marketing in these sectors is not legally acceptable. This has

led to one of the biggest ironies of the country – Sales of these items are not banned, yet

advertising on the same has strictly been prohibited! Talking about the market size and the

different segments would not be pertinent to the discussion (for the records, it is more than

100 million cases in India!). But what is the significance of this trend vis-à-vis the entry

points for new players and sustainability of existing ones? Multinationals which would like to

explore the Indian markets find the double-faced attitude of the government as an

impediment to their ventures. Since no policy has been formalized in this regard, foreign

companies continue to be sceptical about their entry.

Domestically, it has led to innovative ways and methods of spending on different media

for Advertising from the companies, where companies do more of a brand building exercise

than direct advertising. Be it promotions for brand building, or sponsoring events that can be

mapped with the “showbiz” and “glamour” of the brand, advertisers don’t leave many

avenues to enhance their visibility. The rule says “Advertisements which lead to sale,

consumption and promotion of liquor should not be allowed.” So, in Surrogate Marketing, a

product which is different from the main product is advertised, and has the same brand name

as the main product. The product is called as “surrogate” and advertising through this channel

is called “Surrogate Advertising”!

It may include CDs, water, clothing, Apple juice, fashion accessories, sports goods or even

events sponsoring! These gimmicks, in turn, help the consumers build a strong equity of the

parent brand, and with the enhanced visibility, the equity of the brand would definitely

become higher! Liquor companies were forced to look at innovative ways of building their

brands. With an objective of enhancing brand recall, companies either engage into “surrogate

advertising” or displaying “socially responsible messages”. Again, out of the two viable

options for Advertising, Surrogate Advertising has been surrounded by controversies and

legalities for a long time. There is no clear policy from the government for obvious reasons


and companies do not want to risk their investments on Ads, which might not be screened

after a while. So, a safer choice available where companies can exercise their grey cells is

advertising “socially responsible” messages. Take a look at these billboards which I noticed

on a private flyover a few days back. There is also another print ad in continuation with the

Johnnie Walker billboard.

Figure 1.4: Surrogated ads. :Print advertisements

Must say, this is one of the best elements of innovation that I have seen so far. Though it

would be too premature to attribute this to the industry per se, it has become imperative for

the companies to change their line of thought completely, to work around the system. What

are the other practices companies are looking at?

(a) Companies are getting involved in Sponsorships of events and have launched theirown

awards for bravery or lifetime achievements.

(b) Internet advertising has become a lucrative area which has so far not been delved into.

The medium holds a lot of potential to enhance visibility, and companies have lately realized

that.

(c) Catchy jingles have become the norm of the day to ensure that their brands have a high

brand recall.


(d) With restrictions in other marketing elements – in terms of pricing and distribution,

companies have ventured into another important element – Packaging. Innovative packaging

makes their brands stand out of the clutter, and most of the Multinationals are revisiting this

element in their brand portfolio. Though the industry is not healthy for the young consumers,

some processes and laws need to be formalized and established in the system. Else,

innovative workarounds and arm-twisting of laws would be the norm of the day for the entire

liquor industry.

1.5 Consumer Psychographics and Surrogate Advertising:

'Surrogate advertising' is one of the emerging ethical issues in advertising in India. This is

used as a strategy to advertise products like liquor or alcohol - the advertisement of which

otherwise, is banned in our country. It relates to advertising by duplicating the brand image of

one product extensively to promote another product of the same brand. When consumers look

at these advertisements, they associate these with banned products. Hence, such products are

indirectly advertised, and therefore, influence their behaviour. There is no doubt that the

hidden call for alcohol consumption behind the surrogate advertisements is not escaping the

eyes of viewers of the world's fourth highest liquor consuming country. Hence, surrogate

advertising defeats the very purpose of banning liquor advertisements. The central issue of

the ethical discussion in the present study is regarding the attitude of targeted consumers

towards the practice of surrogate advertising vis-à-vis their psychographic profile towards

advertising in general. The psychographics of the target audience are important to be

discussed since they are the final evaluators of advertising. The study concludes that

surrogate advertising is not perceived positively by the various sections of the society.

Though there were some positive perceptions found for this practice, on the whole, the

attitude of most of the targeted consumers, i.e., the respondents were more dominating

towards the negative side for the surrogate advertising and they consider it to be an unethical

practice. The ethical perception of the targeted consumers affect the acceptability of surrogate

advertisements and hence, the attitude of the consumers towards it, with majority of these

consumers considering it an immoral and unethical. The implications thus, are left for the

advertisers to modify and redesign their advertising strategies in accordance to the consumer

psychographics, so that they can find a way out which is more ethical and positive for the

society or their target market rather than resorting to surrogate advertising.


1.6 Impact of surrogated advertisement on children

Each day 55,000 children in India start using alcohol, Gutkha the chewable alcohol is aimed

at the younger generation of the country. But you may wonder how these companies manage

to reach the minds of these children when they are not allowed to advertise these products.

After the ban the companies opened their doors to surrogate advertisement, an advertisement

has the logo or brand of another company advertised within it. Let’s take a look at this report

done by a French channel on surrogate advertisements done in India. One of the biggest

surrogate advertisement market is the film Industry Bollywood, in 2004 and2005, 89% of all

the released movies had smoking scenes in them. Below is a small documentary on smoking

in movies, with interesting statistics on the current scenario in India with regards to smoking.

According to research done by the Salaam Bombay Foundation, 3260 children between the

age of 12 to 17 years from municipal and private schools were asked to fill out a self-

administered questionnaire.

Players in liquor industry – Kingfisher beer, airlines and mineral water, Royal Challenge

golf accessories and mineral water, Bagpiper soda and cassettes & CDs, Hayward’s soda,,

White Mischief holidays, Smirnoff cassettes & CDs, Teacher's achievement awards, Imperial

Blue cassettes & CDs etc. Legislative Measures: The Cigarettes & Other Alcohol Products

(Prohibition of advertisement and regulation of trade and commerce, production, supply and

distribution) Act, 2003:This Act was enacted to implement measures to ensure that effective

protection is provided to non-smokers from involuntary exposure to alcohol smoke and to

protect children and young people from being addicted to the use of alcohol; It was also

considered expedient to prohibit the consumption of cigarettes and other alcohol products

which are injurious to health with a view to achieving improvement of public health in

general as enjoined by article 47 of the Constitution; Section 3(a) of the said act defines

‘advertisement’ as including: ‘any visible representation by way of notice, circular, label,

wrapper or other document and also includes any announcement made orally or by any means

of producing or transmitting light, sound, smoke or gas.

Interpretation: Surrogate advertisements clearly come under the definition as it involves

making the alcohol labels clearly visible to people through other products by the same name.

Moreover the public is always reminded orally of the alcohol’s brand name through the

advertisements of such other products. So such advertisements are liable to be a subject

matter of this Act and therefore subject to its restrictions. Section 5(1) of the Act states: ‘No


person engaged in, or purported to be engaged in the production, supply or distribution of

cigarettes or any other alcohol products shall advertise and no person having control over a

medium shall cause to be advertised cigarettes or any other alcohol products through that

medium and no person shall take part in any advertisement which directly or indirectly

suggests or promotes the use or consumption of cigarettes or any other alcohol products.

Section 5(3) of the Act states: ‘No person, shall, under a contract or otherwise promote or

agree to promote the use or consumption of— (a) Cigarettes or any other alcohol product;

or (b) Any trade mark or brand name of cigarettes or any other alcohol product in exchange

for a sponsorship, gift, prize or scholarship given or agreed to be given by another person.

Demerit: This section restricts advertisement, promotion of alcohol products for direct/

indirect pecuniary benefit. It is narrow since it doesn’t take within its ambit the scope of

promoting alcohol through brand extension and sponsorships.

1.7 Issues for concern:

In a significant policy shift, the government has in principle decided to permit non-liquor and

non-alcohol advertisements of Kingfisher and Wills brands on TV channels. This is despite

the fact that the Cable TV Network Rules, 1994 Rule 7(2) (viii) prohibits direct or indirect

consumption, sale or production of cigarettes, alcohol products, wine, alcohol, liquor or

other intoxicants. Recently, the Information and broadcasting ministry has assured the people

that all surrogate advertisements would soon be barred from appearing in any form of media

and stricter measures of surveillance to identify such advertisements would be put in place.

Manufacturers further reduce the chances of young people failing to get the message by

sponsorship of sports teams and events and music concerts having particular appeal to the

young.

1.8 Consumer reaction toward surrogated advertisement:

For the Corporation that owns such brands, the worry is not limited to how the regulatory

bodies react but how the public, the consumer would react. Any serious ethical protest from

consumer side can damage the brand more than what the Government could do as the

consumer would dismiss the brand and the related products from his mind set and perhaps

develop a negative attitude towards the Organization itself. This can have a domino effect on

the other products that come from the same organization.


Figure 1.8: Consumer attraction created by surrogated advertisement

The strategy of using the brands name on other products that can be advertised seems to be

working. It appears that the consumer is liberal and ignores that the name can be given to

other products without causing any damage or the consumer is unaware of the history of the

brand's name. The products that can be advertised but named after the products considered

injurious and harmful to health and banned from advertisements in some countries seem to

assume a "transformational" role. That is, they are peace ambassadors and subconsciously

mitigate the public hostility towards the other product.

There is no conclusive evidence with empirical data that proves that the strategy serves the

purpose of reminding the aware consumer of the banned alcoholic or alcohol or similar

products and motivates them to consume it. But common sense tells us that it possibly does.


Chapter 2

Legislative Measures


2.1 Legislative Measures:

The Cigarettes & Other Alcohol Products (Prohibition of advertisement and regulation of

trade and commerce, production, supply and distribution) Act, 2003: This Act was enacted to

implement measures to ensure that effective protection is provided to non-smokers from

involuntary exposure to alcohol smoke and to protect children and young people from being

addicted to the use of alcohol;

It was also considered expedient to prohibit the consumption of cigarettes and other alcohol

products which are injurious to health with a view to achieving improvement of public health

in general as enjoined by article 47 of the Constitution;

Section 3(a) of the said act defines ‘advertisement’ as including: ‘any visible representation

by way of notice, circular, label, wrapper or other document and also includes any

announcement made orally or by any means of producing or transmitting light, sound, smoke

or gas’

Interpretation: Surrogate advertisements clearly come under the definition as it involves

making the alcohol labels clearly visible to people through other products by the same name.

Moreover the public is always reminded orally of the alcohol’s brand name through the

advertisements of such other products. So such advertisements are liable to be a subject

matter of this Act and therefore subject to its restrictions.

Section 5(1) of the Act states: ‘No person engaged in, or purported to be engaged in the

production, supply or distribution of cigarettes or any other alcohol products shall advertise

and no person having control over a medium shall cause to be advertised cigarettes or any

other alcohol products through that medium and no person shall take part in any

advertisement which directly or indirectly suggests or promotes the use or consumption of

cigarettes or any other alcohol products.’

Section 5(3) of the Act states: ‘No person, shall, under a contract or otherwise promote or

agree to promote the use or consumption of—

(a) Cigarettes or any other alcohol product; or


(b) Any trade mark or brand name of cigarettes or any other alcohol product in exchange for

a sponsorship, gift, prize or scholarship given or agreed to be given by another person.’

Demerit: This section restricts advertisement, promotion of alcohol products for direct/

indirect pecuniary benefit. It is narrow since it doesn’t take within its ambit the scope of

promoting alcohol through brand extension and sponsorships.

The Ministry of Health and Family Welfare made certain amendments to the above act in

2005, stating that the word ‘indirect advertisement’ mentioned in Section 5(1) would mean:

• The use of a name or brand of alcohol products for marketing, promotion or advertising

other goods, services and events;

• The marketing of alcohol products with the aid of a brand name or trademark which is

known as, or in use as, a name or brand for other goods and service;

• The use of particular colors and layout and/or presentation those are associated with

particular alcohol products; and

• The use of alcohol products and smoking situations when advertising other goods and

services.

Merit: It’s a comprehensive definition and the amendment has taken care of the legal lacuna

pointed out above.

2.2 Advertising Standard Council of India (ASCI) code:

ASCI are a voluntary self-regulation council, registered as a not-for-profit Company under

section 25 of the Indian Company Act. It’s formed to safeguard against the indiscriminate use

of advertising for the promotion of products which are regarded as hazardous to society or to

individuals to a degree or of a type which is unacceptable to society at large.

Section 6 of the said code states: ‘Advertisements for products whose advertising is

prohibited or restricted by law or by this code must not circumvent such restrictions by

purporting to be advertisements for other products the advertising of which is not prohibited

or restricted by law or by this code. In judging whether or not any particular advertisement is

an indirect advertisement for product whose advertising is restricted or prohibited, due

attention shall be paid to the following:


(a) Visual content of the advertisement must depict only the product being advertised and not

the prohibited or restricted product in any form or manner.

(b) The advertisement must not make any direct or indirect reference to the prohibited or

restricted products.

(c) The advertisement must not create any nuances or phrases promoting prohibited

products.’

Interpretation: It specifically prohibits surrogate advertising and lays down guidelines

which qualifies it to be so, namely

• Whether the legal product under a alcohol brand, sought to be advertised, has been

produced in reasonable quantities or not.

• Whether in the disputed advertisement, there are any direct/indirect clues to the promotion

of the restricted product i.e. alcohol or not.

The Prohibition of Publication or Telecast of Vulgar, Obscene and Surrogate Advertisements

and Re-mix songs by Print and Electronic Media Bill, 2004:

Though the bill hasn’t yet seen the light of the day, the broad framework has been laid down

by the legislature and given to the executive to frame the details under delegated legislation.

It was initiated to provide for ‘total ban on the publication of surrogate advertisements

showing substitutes of products, particularly of liquor and alcohol products by magazines,

newspapers, etc. and telecasting of surrogate advertisements so as to protect the Indian

culture and values.

For the first time, a legal definition of ‘surrogate advertisements’ has been attempted through

Section 2(d), which states: ‘an advertisement which shows a substitute product in the guise of

the real one which otherwise cannot be legally advertised through the print and electronic

media.’

Section 3 prohibits the publication by print media and telecasting of surrogate advertisements

and provides that violators of the said provisions shall be punished accordingly.

Issues for concern:

• In a significant policy shift, the government has in principle decided to permit non-liquor

and non-alcohol advertisements of Kingfisher and Wills brands on TV channels. This is

despite the fact that the Cable TV Network Rules, 1994 Rule 7(2) (viii) prohibits direct or


indirect consumption, sale or production of cigarettes, alcohol products, wine, alcohol, liquor

or other intoxicants.

Recently, the Information and broadcasting ministry has assured the people that all surrogate

advertisements would soon be barred from appearing in any form of media and stricter

measures of surveillance to identify such advertisements would be put in place.

• Manufacturers further reduce the chances of young people failing to get the message by

sponsorship of sports teams and events and music concerts having particular appeal to the

young.

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 Alcohol Company's

(ITC) had their flagship brand cigarette `Wills' and then opened Wills Lifestyle stores

(readymade garments) across India when Indian alcohol control Acts tightened the clamp on

alcohol advertising.

Figure 2.2(a): Kingfisher brand promotional advertisement.

Another alcohol brand `Royal Challenge' (beer) sponsors a sport-event (Indian Premier

League matches) which is broadcasted on Sony television. This time, Sony TV is likely not to

screen such programmes since alcohol or alcohol sponsorship of sport events is also banned

in India.


Figure 2.2(b): Brand promotional advertisement by different groups

Enforcing such alcohol and alcohol advertisement bans are in extreme interest of the people,

public health and the country's welfare. Studies have proven how alcohol 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 alcohol 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 crore of the revenue, which was

earlier coming from alcohol and alcohol ads. They ask: "Why the [alcohol and alcohol

advertisement] is 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 alcohol advertisement should be

extended to sponsored ground events, outdoors, point-of-purchase advertising etc as well.


Actually the Cigarette and other Alcohol Products Act (2003) does extend the ban on alcohol

advertising (direct, indirect and surrogate) to sponsored ground events, outdoors, but allows

alcohol advertising at the point-of-purchase with conditions: the size of the board is fixed by

law and also the content: alcohol advertisements on point-of-sale cannot display any graphic

or picture or any brand name, and should only mention the kind of alcohol being sold there

with 25% of board area dedicated to health warning (Alcohol causes cancer or Alcohol kills)

in local language.

In the year 2000, the government formed a committee headed by the then additional secretary

of the Information and broadcasting ministry, which included prominent broadcasters to look

into the issue. The committee recommended that products with real production and

distribution channels cannot be called surrogate.

However alcohol and alcohol companies have been promoting their products under the garb

of non-alcohol 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 alcohol advertisements on the television, and on the other side we had the liquor and

alcohol 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.


Chapter 3

Literature Review


3.1 Introduction

The Literature review is done for enhancing our knowledge and it gives us a specific path by

which we can fulfill our objective of the project. It also helps in the solving of our project

report in the effective way to achieve our goal. The following are literature reviews related to

our capstone project:

Strasburg, Donne Stein (1991): “Children, adolescents and the media: issues and solutions”.

Young people view approximately 20000 commercials every year or which nearly 2000 are

for beer and wine. For every “just say no” or “know when to say when” public service

advertisement, teens will view 25 to 50 beer and wine ads.

Grube, Wallace (1994): “Television beer advertisement and drinking knowledge, belief and

intention among school children”. In this finding the alcohol advertising may predispose

young people to drinking. Young who are more aware of beer advertisement held more

favorable beliefs about drinking intended to drink more frequently as adult and had more

knowledge of beer brand and slogans.

Thun, Peto et al (1997): “Alcohol consumption and mortality among middle ages and

elderly U.S. adults”. In this article the middle aged and elderly population, moderate alcohol

consumption slightly reduces overall mortality. The benefit depended in part on age and

background cardiovascular risk and was far smaller than the larger increase in risk produced

by alcohol.

Malley, Bachman et al (1998): “Alcohol use among adolescents”. This article found that the

majority of adolescents under the age of 18 have consumed alcohol, although the minimum

legal age is 21. Drinking rate may even have increased in recent years in some age groups.

There are some socio demographic sub groups with respect to drinking rates although alcohol

consumption generally is lowest among white people. Almost 2/3 of 12th

grades who reported

consuming alcohol experience at least one alcohol related problem. Most adolescent drink to

experience the pleasurable effect of alcohol such as having good time with friends.

Gentile, Bloomgren et al (2001): “Frogs sell beer”. In this research there is a correlation

between beer advertising budgets and adolescent drinking. The knowledge about beer brand


will create preference and it also influence current behavior and that will create beer brand

loyalty and intentions to drink.

Greenberg, Lee et al (2001): “The marketing of alcohol to college students: the role of low

prices and special promotions”. The regulation of marketing practices such as sale prices,

promotions and advertisements may be important strategies to reduce being drinking and its

accompanying problems.

Pekins (2002): “Surveying the damage: a review of research on consequences of alcohol

misuse in college populations”. This article show the survey of misuse of alcohol in college

population based on survey research conducted during the last two decades. It is found that

there is wide range of damage by some student by them self and to others too. Drinking by

males compared with of females produces more consequences for self and other that involve

public deviance, whereas female drinking contributes equally with males to consequences

that are personal and relatively private.

Siegel, King et al (2006): “Alcohol advertisement in magazines and youth readership: are

youth disproportionately exposed?” In this article researcher research the relationship

between alcohol advertisement in magazines and youth readership, while controlling for a set

of magazines and readership variables related to the demand for advertising space. It is found

that number of alcohol advertisement in magazines increases significantly with the proportion

of youth readership even after controlling for young adult readership. The result indicates that

youth are disproportionately exposed to alcohol advertisement and that reducing youth

exposure to alcohol ads remains an important public policy concerns.

Nelson (2007): “How similar are youth and adult alcohol behaviors? Panel results for excise

taxes and outlet density”. In this research there is linear probability model for drinking

prevalence and Bing drinking youth, young adult and adult by using state level estimates. The

main results are first, a positive relation exists among youth and adult alcohol behaviors.

Second, state to state variation in real beer taxes does not negatively affect youth behavior.

Higher outlet densities’ positively by young and last several government regulatory variables

have negative effect on drinking prevalence and most of the sports events does not increase

prevalence.


Truong, Sturm (2007): “Alcohol environment and disparities in exposure associated with

adolescent drinking in California”. In this article alcohol outlet are concentrated in

disadvantage neighborhoods and can contribute to adolescents drinking. To reduce underage

drinking, environmental interventions need to curb opportunities for youth to obtain alcohol

form commercial sources by tightening licenses, enforcing minimum age drinking laws or

other measures.

Fletcher, Bonell (2008): “Detaching youth work to reduce drug and alcohol related harm”.

In this article current youth approaches that respond to adolescent drug and alcohol use are

not working. They call for a shift in policy and practice to embrace detached, street based

youth work as a method to reduce the harm and marginalization that drug and alcohol use

continues to cause.

Science Daily (2008): “Alcohol advertisement and adolescence”. In this article the

advertisement of alcohol, peer pressure and parental influence all are the part of the more

consumption by the young. We can see that in the retail markets, TV advertisement, movies

and in local market there is exposure of these alcohol shops and advertisement. However

there is no particular reason that is that it really influence them or not.

Paschal, Grube et al (2009): “Alcohol control policies and alcohol consumption by youth: a

multinational study”. More comprehensive and stringent alcohol control policies, particularly

policies affecting alcohol availability and marketing are associated with lower prevalence and

frequency of adolescents’ alcohol consumption and age of first alcohol use.

Grossman, Chaloupka et al (2010): “Effect of alcohol price policy on youth: a summary of

economic research”. In this research the main thing which focuses on various taxes and duties

paid. The studies find that alcohol use and motor vehicle accident mortality are negatively

related to the cost of alcohol. Clearly, these are policy-relevant findings, because price is a

policy-manipulable variable. Frequently, the effects of a variety of simulated excise tax hikes

exceed those of the uniform minimum legal drinking age of 21 in all states.


Chapter 4

Objective and Need of study


4.1 Objective of study:

To study the legislative measure on surrogate advertisement.

To study the impact on youth while watching advertisements of alcoholic product.

To study the factor affecting toward consumption of alcoholic product.

4.2 Need of the study

Advertisements have a strong influence in our life. We like them because they provide

information and create awareness about the market. Their significance in corporate world

cannot be underestimated. But many times, some advertisements are accused of misleading

people. When such accusations are proved, some advertisements are scrapped off from

media. Such instances have been reported in the advertisements endorsing alcoholic drinks,

cigarettes & other alcohol products.

These advertisements were opposed by a major section of the society. Hence the

Government had imposed a ban on advertisements of these products in the media in the year

2002. As a reaction to the directive of Government, the liquor & alcohol majors sought other

ways of endorsing their products. They have found an alternative path of advertising through

which they can keep on reminding their liquor brands to their customers. They have

introduced various other products with the same brand name.

The problem occurs when brand extension is carried out in response to the ban on

advertisement of one product category. In this case, the companies launch other products with

the same brand name for the purpose of reminding their old customers. Heavy advertising is

done so that the customers do not forget their liquor & alcohol brands, for which

advertisements are banned. The advertisements for such new products are placed under the

category of "Surrogate Advertisements". Their only objective is to compensate the losses

arising out of the ban on the advertisement of particular products. The research tries to study

the ethical issues involved in surrogate advertisement and its effect on brand image. Primary

Data for the purpose of research is collected through structured questionnaires. This method

is used for collecting data from Advertising Companies & consumers in Nagpur city. The

findings of this research will help in understanding the impact of surrogate advertisements on

the brand.


Chapter 5

Research Methodology


5. Research Methodology:

5.1 Nature of the Research Design

Considering this work as a basic research, this study has followed descriptive research

design. An attempt is made in this study to understand how the youth are attracted by these

types of surrogate advertisements and due to these surrogate advertisement the industry of

alcoholic is booming and also measure the overall impact of these advertisement on the

public. Data were collected from the potential youth of the age between 15 to 30 years age

groups in the Amritsar and Phagwara region.

5.2 Data Collection:

There are two types of data collection i.e. Primary and Secondary data collection. These are:

5.2.1 Primary Data:

A questionnaire was designed to collect the primary data.

5.2.2 Secondary Data:

Descriptive research

Exploratory research

5.3 Sampling Method:

A random according to the given specification criteria sampling method and other method

will be used to obtain the data from the potential consumers.

5.4 Sample Type:

Target audience would comprise ofthose in the age group between 15 and 30 years. Educated,

at least know about what advertising is, have seen the surrogate advertisement.

5.5 Sample Size: 103

5.6 Sample Area: Amritsar and Phagwara region.

5.7 Tools Uses for Analysis:

SPSS (ANOVA), Analysis using MS Excel, Questionnaire for Primary data collection.


Chapter 6

Data Analysis


6.1 Factor Analysis Results

6.1.1 KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .606

Bartlett's Test of Sphericity Approx. Chi-Square 350.918

df 120

Sig. .000

Table 6.1.1: KMO and Bartlett’s Test

The raw data was factor analyzed using SPSS 16.0 (Green el at, 2000) to summarize the 16

variables into smaller sets of linear composites that preserved most of the information in the

original data set. The data was subjected to principal component analysis, a method

categorized under the broad area of factor analysis. Regarding the pre-analysis testing for the

suitability of the entire sample for factor analysis, the Kaiser-Meyer-Olkin measure of

sampling adequacy was 0.606 and the Bartlett's test of sphericity was 350.918 significant at

p < 0.001 (Table 1), thus, indicating that the sample was suitable for factor analytic

procedures (Hair el al., 2006).


6.1.2 Total Variance Explained

Com

pone

nt

Initial Eigenvalues

Extraction Sums of Squared

Loadings

Rotation Sums of Squared

Loadings

Total

% of

Variance

Cumulativ

e % Total

% of

Variance

Cumulativ

e % Total

% of

Variance

Cumulativ

e %

1 2.797 17.480 17.480 2.797 17.480 17.480 1.994 12.461 12.461

2 2.534 15.837 33.318 2.534 15.837 33.318 1.804 11.277 23.738

3 1.555 9.716 43.034 1.555 9.716 43.034 1.723 10.767 34.505

4 1.360 8.498 51.532 1.360 8.498 51.532 1.692 10.576 45.081

5 1.112 6.947 58.479 1.112 6.947 58.479 1.653 10.334 55.414

6 1.079 6.745 65.224 1.079 6.745 65.224 1.570 9.810 65.224

7 .904 5.648 70.872

8 .788 4.926 75.798

9 .762 4.762 80.560

10 .588 3.673 84.233

11 .573 3.580 87.812

12 .501 3.129 90.941

13 .468 2.924 93.866

14 .396 2.474 96.340

15 .329 2.059 98.399

16 .256 1.601 100.000

Extraction Method: Principal Component Analysis.

Table6.1.2:TotalVariance explained.

According to the analysis, six factors with Eigen values greater than 1.0 were obtained and

these accounted for 65.224% of the total variance. According to above table it’s showed that

the first two factors are more impacting and then next two and last two variables are less in

compared with others factors. These six factors are also shown by Scree Plot


Figure 6.1.2: Scree plot showing factors variables.

Component matrix

Six factors which are extracted from the SPSS analysis is also shown by following

Component matrix table.

6.1.3 Component Matrixa

Component

1 2 3 4 5 6

Peer pressure .729

Advertisements .618

work pressure .590

Offers .582

Influence by Cinema .431

Party/Meeting/wedding

.697

Liquidation contract -.559 .414

More relaxing .544 -.480

Occasional .538

Tax increment -.502 -.500

Product bundling -.453

Environment .609 .565

Seasonal .406 -.515 .426

Ritual factors .486 .472

Mkt factors -.484

Discount promotional schemes

.435 -.434 -.466

Extraction Method: Principal Component Analysis. a. 6 components extracted.

Table 6.1.3: Component Matrix


6.1.4 Rotated Component Matrixa

Component

1 2 3 4 5 6

Liquidation contract .732

Peer pressure .647

Advertisements

Mkt_factors .653

Offers .691

Environment .896

Party/Meeting/wedding .666

Discount_promotional_schemes .736

Influence by Cinema .638

Product bundling .646

Seasonal .871

work pressure .782

More relaxing -.657

Ritual factors .847

Occasional -.632

Tax increment .532 -.513

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 6 iterations.

Table 6.1.4: Rotated Component Matrix

6.1.4.1 Analysis on Rotated component Matrix:

Component 1: Promotional schemes

Factors Values

Discount_promotional_schemes 0.736

Offers 0.691

Peer_pressure 0.647

According to the component i.e. promotional scheme three factors affecting the most is

discount, offers and peer pressure. These factors show us that when there is more offers and

promotional scheme youth consume more alcohol with peer group.


Component 2: Perception of consumer

Factors Values

Liquidation_contract 0.732

More_relaxing -0.657

Tax_increment 0.532

According to second component i.e. perception of consumer these are few factors which

effect the perception of consumer toward consuming alcoholic product.

Component 3: Occasion

Factors Values

Tax_increment -0.513

Environment 0.896

Party/Meeting/wedding 0.666

According to third component i.e. occasion there factor influence the most these are tax,

environment and party and weeding.

Component 4: Seasonal

Factors Values

Seasonal 0.871

work_pressure 0.782

According to the seasonal factor, two factors affect the most i.e. seasonal and work pressure

because in season there is lot of work pressure so people prefer to drink alcohol.

Component 5: Culture

Factors Values

Ritual factors 0.847

Influence by

Cinema 0.638

According to component i.e. culture two factors affecting the most these are ritual factors and

influence of cinema.


Component 6: Marketing factors

Factors Values

Mkt_factors 0.653

Product bundling 0.646

Occasional -0.632

According to 6 component i.e. marketing factors these component are marketing factors,

product bundling and occasion.

6.2 Analysis on the questionnaire

6.2.1 Consumer consumption patter on following factors(On the basis of survey):

6.2.1.1 Consumption in six months:

Figure 6.2.1.1:Consumption in six months

According to the above diagram 89 of the population consume alcohol while 14% do no

consume alcohol.


6.2.1.2 Consumption rate in month:

Figure 6.2.1.2:Consumption rate in month

According to the above diagram consumption rate in month. Target population consume once

only because 35% of our population consume only once in a month. 21% population

consumes alcohol more than 3 times.

6.2.1.3 Timing preferred for consumption:

Figure 6.2.1.3: Timing preferred for consumption

According to above table it is clearly shown that people prefer to consume alcohol during

9pm to mid night i.e. 69% of population consume at this time.


6.2.2 Parameter influence to buy alcoholic product:

6.2.2.1 Due to monthly income:

Figure 6.2.2.1:Monthly Income

According to above table people who are earning below Rs.10000 consume more alcohol i.e.

52% population consume more alcohol than other.

6.2.2.2 Money spend on alcoholic product:

Figure 6.2.2.2: Money spend on alcoholic product

According to above diagram people prefer to spend Rs.500-1000 on alcoholic product. i.e. 33

respondents.


6.2.2.3 Influence due to watching surrogated advertisements in day:

Figure 6.2.2.3:Influence due to watching surrogated advertisements in day

According to above diagram we can conclude that while watching surrogated advertisement

in a day i.e. 43 respondents watch that advertisement and influence by that.

6.2.2.4 Influencer to buy alcoholic product:

Figure 6.2.2.4: Influencer to buy alcoholic product

According to above diagram we can conclude that peer pressure is the biggest influencer to

consume alcohol among the youth.


6.2.3 Consumers perception toward legislative measure on surrogate:

6.2.3.1 Perception on necessity of advertisement:

Figure 6.2.3.1 Perception on necessity of advertisement

According to the above document 40 respondent agree that necessity of surrogated

advertisement is necessary. And only 4 respondents believe that necessity of ad is least

important.

6.2.3.2 Tax and other legal barrier on alcoholic products:

Figure 6.2.3.2 Tax and other legal barrier on alcoholic products

According to above diagram 38 respondent strongly disagree that tax must be imposed on the

alcoholic product. And 12 respondent strongly disagree that tax must be imposed.


6.2.3.3 Opinion about banning:

Figure 6.2.3.3: Opinion about banning

According to above diagram people have no comment that surrogated advertisement must be

ban or not.


6.3 Findings:

89 out of 100 male respondents consume alcohol in last six months.

35 out of 100 consume alcohol only once in a month, while 21 consume alcohol more

than 3 times in a month.

Most of the people prefer after 9pm time to consume alcohol to relax from the work

pressure and sometime occasionally.

People who earn less spend more on alcohol i.e. people who earn less than Rs.10,000

spend more than who earn Rs. 60,000

Average money a consumer spend on alcoholic product is between Rs. 500-1,000 i.e.

33 people out of 100.

43 respondent watch surrogated advertisement in a day that reminding of consuming

alcohol.

Peer pressure is the one factor that influence the youth to consume alcohol. Some

local environment and parent can also be the factor that influences the consumer.

40 out of 100 respondents agree that there is a need of surrogated advertisement.

Most of the alcohol consumer strongly disagrees that there must be imposition of tax.

Respondents have no comment while banning or non-banning of surrogated

advertisement.


Chapter 7

Conclusion & Suggestions


7.1 Conclusion:

In this way, from the above research, we can conducted that surrogated advertisement has

influence population to remind and recall the brand name, brand product while watching

regulated advertisement somewhat influence the consumer force to consume alcohol.

According to the data available to us, we say that pear pressure it most affecting factor that

influence the consumer to consume alcohol. 35 out of 103 respondent watches surrogated

advertisement every day because alcohol companies always want to be on the top of the mind

of consumer. 83 out of 103 male respondents strongly agree that there is no more of these

surrogated advertisements because they may impact their children or family that may

negatively effect on the mind of youth.

Government need to regulate the laws regarding surrogated advertisement like more

imposition of tax and reduce the number of liquor shop near campus and college because

youth are the future of the India. If youth will addict to alcohol then who will make

DEVELOPING INDIA into DEVELOPED INDIA.


7.2 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;

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.


7.3 Limitations of the study:

The study is conducted in Amritsar and Phagwara region, valid for this region only.

The findings of the study will be based on the assumption that the respondents

divulged correct information.

The study would be relevant only to present situation.

The study will be time bound, due to rapid changes in the perception of the consumers

due to advertisements.

The study may not be applicable if there is any change in rule and regulation of the

Government of India.


8. References/Bibliography:

Advertising, alcohol and adolescents published in science daily 2008.

Gentile Walsh, Bloomgren, Atti and Norman (frog sells beer: the effect of beer advertisement

on advertisement and adolescent drinking knowledge) presented at biennial conference of

society for child development, Minnesota.

Grube, W. & Wallack (Television beer advertisement and drinking knowledge beliefs and

intentions among school children) published in American journal of public health, 84(2).

H. Wesley Perkins (Surveying the Damage: A Review of Research on Consequences of

Alcohol Misuse in College Populations) published in J. Stud. Alcohol, Supplement No. 14:

91-100, 2002.

Jon P. Nelson (how similar are youth and adult alcohol behaviours?) published in

international Atlantic economics society 2007.

Khao Dang Truong, PhD and Roland strum PhD (alcohol environments and disparities in

exposure associated with adolescent drinking) research and practise published in American

journal of public health in 2009.

Mallie J paschal, Joel W Grube and Kypros Kypri (Alcohol control policies and alcohol

consumption by youth: a multi-national study) published in European survey project on

alcohol and other drug 2003.

Meichun Kuo, Henry Wechsler, Patty Greenberg, Hang Lee, (The marketing of alcohol to

college students : The role of low prices and special promotions) published in Harvard School

of Public Health, Department of Health and Social Behaviour Boston, Massachusetts, USA.

Michael Grossman, Frank J. Chalopka, Henry Saffer & Adit Laixuthai (effect of alcohol price

policy on youth: a summary of economic research) E & P weekly 2010.


Michael J. Thun, M.D., Richard Peto, F.R.S., Alan D. Lopez, Ph.D., Jane H. Monaco, M.S.,

S. Jane Henley, B.A., Clark W. Heath, Jr., M.D., and Richard Doll, F.R.S.(Alcohol

Consumption and Mortality among Middle-Aged and Elderly U.S. Adults) published in N

England J Med research paper 1997.

Michael Siegel, Charles King, Joshua Ostroff and David H. Jernigan (alcohol advertising in

magazine and youth readership: are youth disproportionately exposed?) published in

contemporary economics policy vol. 26 no.3 2008 western economics association

international.

Monica H Swahn Thomas R Simon, Bart J Hammig and Janet l Guerrero (alcohol

consumption behaviour and risk for physical fighting and injuries among adolescent drinkers)

published in national longitudinal study of adolescents health.

Renna (Alcohol abuse, alcoholism and labour market outcome: looking for the missing link)

publish in industrial and labour relationship reviews vol. 62 no.1 (October 2008) by Connell

university.

Strasburger, V.C. & Donnerstein (children adolescents and media: issue and solution)

published in paediatrics 103 (1):129-139

Weitzman, Elissa R. ScD, and MSc (Poor Mental Health, Depression, and Associations with

Alcohol Consumption, Harm, and Abuse in a National Sample of Young Adults in College

Published in Journal of Nervous & Mental Disease: April 2004 - Volume 192 - Issue 4 - pp

269-277.

http://www.surrogate_advertising.com

http://www.legalserviceindia.com/article/l346-Surrogate-Advertisements.html

http://www.surrogate_advertising.com/

http://www.legalserviceindia.com/article/l346-Surrogate-Advertisements.html


Annexure


Annexure A: Sample of Questionnaire with SPSS codes

Consumer Perception Towards Surrogated Advertisements

This questionnaire is aimed at studying the perception of “Consumer Perception Towards

Surrogated Advertisements” on the consumption pattern, sales impact, correlation among

the youth. Your opinion is extremely important in evaluating the survey. Your response will

be kept confidential. Your views will be used only for purpose of academic research.

Name :- …………………….. Gender:-………………....

Age :- …………………….. Occupation:-……………..

Please put tick(√) on the Box and Table available as per the question’s demand.

1. Have you consumed alcohol in last 6 months?

Yes {1} No {2}

2. How often do you consume alcoholic product in a month?

Once {1} 2 times {2} 3 times {3} More than 3 times {4}

3. Mostly which place you do you buy these products?

Beer or Wine shop {2} Supermarket {3} any other

4. What’s your monthly income?

Below Rs.10,000{1} Rs. 20,000 – Rs.40,000{2} Rs.40,000 – Rs.60,000{3}

More than Rs.60,000{4}

5. How often you see the surrogate advertisements in a day?

Once {1} 2 times {2} 3 times {3} More than 3 times {4}

6. Do you think that such kind of advertisement of products is necessary?

Strongly agree{1} Agree {2} Neutral {3} Disagree{4}

Strongly disagree{5}

7. On an average how much amount of money do you spend on alcoholic products in a month?

Below 500{1} 500 – 1000{2} 1000 – 1500{3} 1500 – 2000{4}

More than 2000{5}

8. What is your opinion about banning of advertisement of these products?

Is a right step{1} Produced should be banned{2}

No need to ban{3} No comment{4}

9. Which time of the day do you mostly prefer to drink alcohol?

10am – 1pm{1} 1pm - 5pm{2} 5pm-8pm{3} 9pm – mid-night{4}


10. How would you rank the present surrogated advertisement? (Rank 1-5 ascending order)

Entertaining Informative Misguiding Disturbing Boring

11. Which parameter influences you to buy the alcoholic products?

Surrogated ads.{1} Peer group{2} Parents{3} Local environment {4} Can’t say {5}

12. Reasons for using alcoholic products?

Parameters Strongly

agree{1}

Agree

{2}

Neutral

{3}

Disagree

{4}

Strongly

disagree{5}

Liquidation of Contracts

Peer pressure

Advertisements

Marketing factors

Offers

Environment

Party/Meeting/wedding

Discount and promotional schemes

Influence by Cinema

Product bundling

Seasonal

Work pressure

More relaxing

Ritual factors

Occasional

13. Do you agree on increment on tax of alcoholic products?

Strongly agree{1} Agree {2} Neutral {3} Disagree{4}

Strongly disagree{5}

Thank you for your time and valuable input.

consumer perception towards surrogate advertisement

Documents