G.L.

BAJAJ
INSTITUTE OF MANAGEMENT & RESEARCH
Approved by A.I.C.T.E. & Affiliated to A.K.T.U., Lucknow
Plot No. 2, Knowledge Park III, Greater Noida Uttar Pradesh-201308
A
RESEARCH PROJECT REPORT
ON

“Surrogate Advertising and its Impact on Indian Society”

Submitted for
Partial fulfilment of the award of degree of Master of Business Administration (MBA)
From
Dr.A.P.J. Abdul kalam Technical University, U.P., Lucknow

UNDER THE GUIDANCE OF SUBMITTED BY:

Dr. ANURAG JOSHI Akhil Kumar Kaundle
Associate Professor (1780170017)
Department of Management Studies Session: 2017-19
 ACKNOWLEDGEMENT

It is my pleasure to be indebted to various people, who directly or indirectly contributed in the

development of this work and who influenced my thinking, behaviour and acts during the course
of study.
I express my sincere gratitude to Dr. ANURAG JOSHI worthy Principal for providing me an
opportunity to undergo research report.
I am thankful to all for their support, cooperation, and motivation provided to me during the
Research for constant inspiration, presence and blessings.
Lastly, I would like to thank the almighty and my parents for their moral support and my friends
with whom I shared my day-to-day experience and received lots of suggestions that improved my
quality of work.

AKHIL KUMAR KAUNDLE

MBA IV SEMESTER
(1780170017)
 PREFACE

“Acceptance of New challenge makes the path for future success”

Surrogate advertising is a form of advertising which is used to promote banned products, like
cigarettes and alcohol, in the disguise of another product. This type of advertising uses a
product of a fairly close category, as: club soda, mineral water in case of alcohol, or products
of a completely different category (for example, music CD's or playing cards) to hammer the
brand name into the heads of consumers. The banned product (alcohol or cigarettes) may not
be projected directly to consumers but rather masked under another product under the same
brand name, so that whenever there is mention of that brand, people start associating it with
its main product (the alcohol or cigarette). In India there is a large number of companies
doing surrogate advertising, from Bacardi Blast music CD's, Bagpiper Club Soda to Officers
Choice playing cards.
 DECLARATION

I hereby declare that this Research report entitled “SURROGATE ADVERTISING AND
Its IMPACT ON INDIAN SOCIETY" is written and submitted by me under the kind
guidance of Dr. ANURAG JOSHI of G.L.BAJAJ INSTITUTE OF MANAGEMENT
AND RESEARCH, Greater Noida (U.P.).

The findings and interpretations in the report are based on both primary and secondary data
collections. This project is not copied from any source or other project submitted for similar
purpose.

AKHIL KUMAR KAUNDLE

MBA IV SEMESTER
(1780170017)
 Executive summary

Today’s World is highly dynamic and competitive where advertising showing ethical issues in
marketing trend. Nowadays, Surrogate advertising is one of the emerging trends of
advertisement in advertising industry in India. This is using to advertise the products which are
basically banned in the country. Hence, these products are advertising indirectly and therefore it
creates impact on consumer’s perception. It relates with the duplication of one product’s brand
image which will promote another product of same brand. Consider the advertisement of
Bagpiper soda khoob jamega rang jab mil baithenge teen yaar aap, hum aur bagpiper club soda.
The advertisement basically promotes a soda manufactured by the company Bagpiper. Liquor
manufactured by the same company is also branded under the same name, i.e. ‘Bagpiper’.
Hence, the soda advertisement actually acts as a surrogate to liquor manufactured under the
same brand name. This study was taken to understand the impact of Surrogate advertisement on
consumer’s perception in Indore city. Hence with this research it inferred according to the 200
respondents of Indore city on the basis of judgmental sampling that this surrogate advertising
trend providing significant effect on perception of consumers.
 TABLE OF CONTENTS

PAGE NO.
ACKNOWLEDGEMENT I
PREFACE II
DECLARATION III
CERTIFICATE VI
EXECUTIVE SUMMARY VII

Chapter 1: Introduction 8-30

 Introduction
 Importance of the study
 Scope Of The Study
 Objectives of the study
 Contribution Of The Study
 Scope for further study

Chapter 2:Literature Review 31-37

Chapter 3:Research Problem 38-40

Chapter 4: Research Methodology 41-43

Chapter 5: Surrogate Advertising: An Analysis 44-60

 Definition
 Origin
 Indian scenario
 The corporate standpoint
 Companies following surrogate advertisements
 Recent surrogate advertisements
 Emerging trend
 Role in consumer buying decision
 Pros and Cons
 Regulatory measures
 Legal cases against surrogate advertising
Chapter 6 : Data Analysis And Interpretation 61-82

 Demographic profile of the respondents (Age, Gender)

 Advertisement media

 Frequency of advertisements
 Awareness on ban
 Requirement of ads
 Awareness about surrogate advertisement
 Purchase of surrogate products
 Advertisements seen
 Evaluation of surrogate ads
 Impact of ads on surrogate products
 Ads inducing to purchase original product
 Product category of surrogate ads
 Ads of brands that are seen the most
 Opinion on surrogate ads
 Hypothesis testing : Chi square analysis
Chapter: 7 Findings, conclusions and suggestion 83-86

 Findings of the study

 Conclusion
 Suggestions
Chapter: 8 Bibliography 87-92
INTRODUCTION
What is surrogate advertising?

'Surrogate Advertising' is a form of advertising which is used to promote banned products

like cigarettes and alcohol, the banned product (alcohol or cigarettes) may not be projected
directly to consumers but rather masked under another product under the same brand name,
so that whenever there is mention of that brand, people start associating it with its main
product (the alcohol or cigarette). It is an effective way of communicating the value of a
product or service with large exposure to target consumer. It uses different types of appeals
to connect to consumers spread across the globe. It is just a strategy used to generate top of
the mind recall. While this continued helping them to promote their liquor through this route
as many companies did not even modify the existing advertisements and instead just replaced
the text and voice-overs. This is what challenging about surrogate advertisement as for
ethical business practices one should not mislead consumer’s especially young generation to
lean towards drinking alcohol.
The best example of this can be cited in a petition filed in 1999 before the High Court of
Delhi by the Voluntary Health Association of India, where a ban was sought on the
sponsorship of the Indian cricket team by the Wills brand of cigarettes manufactured by ITC.
The appearance of the Wills logo on the sports apparel worn by the cricketers facilitated the
repeated telecasting of that logo to millions of viewers. During the pendency of this petition,
ITC voluntarily withdrew its sponsorship of the Indian cricket team in 2001 citing the reason
that it did not want to derail the genuine efforts of the government and that it did not want to
take undue advantage of its position in the Indian Economy.
Similarly, the Ex-Union Health Minister Mr. Anbumani Ramadoss had challenged the name
of the Bangalore Indian Premier League (IPL) cricket team, “Royal Challengers”, which was
such an obvious and blatant form of surrogate advertising for liquor brand “Royal
Challenge”. But, the Supreme Court of India has since pointed out that the team was not
named ‘Royal Challenge’, the liquor brand, but “Royal Challengers”.9 ‘Only those who
drink can be attracted by these things,’ the bench observed in a lighter vein, alluding to the
fact that a name would not have any effect on non-drinkers. Understanding the gravity of the
situation, the Indian Broadcasting Foundation (IBF) has started to take on the surrogate
liquor advertisements. It 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.
The problem occurs when heavy advertising is done so that the customers do not forget their
liquor & tobacco brands, for which advertisements are banned. These methods are
extensively used by the tobacco and liquor industry, for the simple reason that the normal
advertising of their products have been banned by the national legislations. The
advertisements for such new products are placed under the category of “Surrogate
Advertisements” only when it can be proved that such advertisement has been done with
ulterior motives. For Example: we have ‘Wills Lifestyle’ where ‘Wills’ is possibly the most
famous cigarette brand of tobacco major Indian Tobacco Company Ltd., there is ‘Kingfisher
Airlines’ where ‘Kingfisher’ is a popular brand of beer of liquor major United Breweries.
In the Indian context surrogate advertisement is done mainly in the tobacco and liquor
industry. This is because the advertising of these products has been explicitly banned as they
are considered to be products that put adverse effect on the mind of the consumers and lead
them to use substances that have an addictive effect and create discomfort for members of
the general public who do not prefer using these substances. In India the situation started
turning bad since 1975 when the government came out with the Cigarettes (Regulation of
Production, Supply and Distribution) Act which made it mandatory to display a statutory
health warning on all packages and advertisements of cigarettes.

In short It includes: -

 Duplicating brand image of one product extensively, in order to promote, another

product of the same company.
 Use of well established brand, except the original product, to
encompass that product.
 It is done by complementary products such as Soda, bottled
drinking water, fruit juice etc.
 Other commonly advertised includes – Music CDs, apparel and
accessories and sports good of the same brand.
FUNCTION OF SURROGATE ADVERTISEMENTS.

Ever since advertising of tobacco and liquor products have been banned on Mass Media,
these companies have resorted to surrogate advertising tactics to keep their brands alive in
the minds of consumers. The most important function of a surrogate advertisement is that of
brand-recall. A surrogate advertisement advertises other market commodities without
alluding to tobacco or liquor but under the same brand.

Surrogate advertising came into India in the mid-1990s after the Cable Television Networks
(Regulation) Act, 1995 read with Cable Television Rules, 1994, came into force, which
banned direct liquor, tobacco and cigarette advertisements.1 Before that the Cigarettes
(Regulation of Production, Supply and Distribution) Act,1975 made it mandatory to display
a statutory health warning on all packages and advertisements. Advertisements have a strong
influence in the minds of consumers especially in this era of new age technology. Banning
direct advertisements about liquor and tobacco was a step ahead by the Government to curb
the influence of such advertisements on the public and effectively diminish the ill effects of
these products in general. Therefore, Surrogate Advertisements by these liquor and tobacco
companies defeat the very purpose of this ban.

Launching new products with a common brand name is known as brand extensions and is not
per se illegal or objectionable in nature. The problem arises when a brand extension is carried
out in response to a ban on advertisement of one product category.

Origin of Surrogate Advertisements:

As a reaction to the directive of Government, the liquor & tobacco manufacturers sought
other ways of endorsing their products. They have found an alternative path of advertising
through which they can keep on reminding their liquor brands to their customers. They have
introduced various other products with the same brand name. Launching new products with
common brand name is known as brand extension, which can be carried out for related
products (eg: Tata Salt and Tata Tea) or unrelated products (eg: Tata Tea and Tata Indica).
Prima facie, there is nothing wrong with brand extension. The problem occurs when brand
extension is carried out in response to the ban on advertisement of one product category. In
this case, the companies launch other products with the same brand name for the purpose of
reminding their old customers. The advertisements for such new products are placed under
the category of “Surrogate Advertisements”. Their only objective is to compensate the losses
arising out of the ban on advertisements of one particular product (i.e. liquor).
Effectiveness of surrogate advertisements
According to the inferences drawn from several surveys and interviews,
42 out of 50 people can understand the actual liquor or tobacco product
being advertised. Surrogate advertisements do impact a consumer's
buying decision as well It also informs about the leading liquor brands
thus promote sales.
Motive
This is to hammer the brand name in the minds of the consumer and
get purchasers acquainted with the firm's branding.

Surrogate Advertisements Promoted by Liquor and Tobacco Industry:

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, Haywards
soda, Derby special soda, Gilbey green aqua, Royal Challenge golf accessories and mineral
water, Kingfisher mineral water, White Mischief holidays, Smirnoff cassettes & CDs,
Imperial Blue 12 cassettes & CDs, Teacher’s achievement awards etc. These products bear
exactly the same brand 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, Paan
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 tobacco products, this
industry has resorted to surrogate advertising a few years ago.
The Health Ministry has recently implemented the tobacco control legislation which will
imply a complete ban on advertisements and all direct & indirect promotional campaigns for
tobacco products. In 2001, Indian Tobacco Company (ITC) had voluntarily withdrawn the
Wills Sports sponsorship of the Indian cricket team when the Government had first proposed
a ban on advertising through legislation.

RECENT SURROGATE ADVERTISEMENTS:

The various surrogate advertisements which are used by manufacturers

of whisky and liquor products.
1. Bagpiper: The advertisement of Bagpiper Club Soda is shown at the
place of whisky.
2. Royal Stag: Royal Stag instead of advertising whisky shows Music
CD and Mega Cricket in the advertisement with theme “Make it Large”.
3. McDowell’s No. l Platinum: Indian Cricket Team skipper MS Dhoni
advertises for the surrogate product soda and asserts it as “The No. 1
Spirit of Leadership”.
4. Hayward’s 5000: The brand is advertised through soda and packaged
drinking water. It is well known that Hayward’s 5000 & 10000 are
whisky and beer brands respectively due to wide availability in market.
5. Imperial Blue: This whisky is advertised by showing music cd’s in the
advertising. i.e., Imperial Blue Music CD’s. This advertisements asserts
in story line that “Men will be Men”. It symbolizes Imperial Blue as for
masculinity.
6. Royal Challenge: The leading cricketers are shown in advertisement,
at the same time music is played. It also advertised with the brand of
mineral water.
7. Officer’s Choice: The brand is advertised by showing mineral water
and soda. It is shown that ‘OC’ is the brand choice of officers and
dynamic people.
History

It is said that birth of surrogate advertising happened in Britain, where

housewives started protesting against liquor advertisements which
provoked their husbands. The protest rose to a level where liquor
advertising had to be banned and brand owners seeing no way out
decided to promote fruit juices and soda under the brand name, the
concept later emerged as Surrogate Advertisements.
Surrogate Advertising in India
In India extensive surveys resulted in similar findings which showed that
liquor ads had direct influence on Consumers purchase behavior, and no
sooner the Cable TV Regulation Act banned liquor and cigarette
advertisements, thus India gradually adopted surrogate advertisements.
Advertisements for liquor and cigarettes have been banned since 1995.
So companies usually either go for brand extension and promote the
extended products or promote certain products which might not be
available in the market, ex- you might not necessarily find a Bacardi
Blast music CD. The excessive pressure of the ban forced companies to
focus more on brand building and thus liquor companies started
sponsoring and hosting glamorous events, yet many others started
distributing t-shirts, caps, key chains, drinking glasses with the brand
name displayed on these products.

PRESENT LEGAL ENVIRONMENT ON SURROGATE

ADVERTISING:

A notification issued on 9th August 2006 for The Cable Television

Networks (Regulation) Act, 1995, and The Cable Television.
Networks (Regulation) Act, 1994, states: “Provided that a product that
uses a brand name or logo, which is also used for cigarettes, tobacco
products, wine, alcohol, liquor or other intoxicants, may be advertised
on cable service subject to the following conditions:
• The story board or visual of the advertisement must depict only the
product being advertised and not the prohibited in any form or manner.
• The advertisement must not make any direct or indirect reference to
the prohibited products;
• The advertisement must not contain any nuances or phrases promoting
prohibited products.
• The advertisement must not use particular colors and layout or
presentations associated with prohibited products.
• The advertisement must not use situations typical for promotion of
prohibited products when advertising the other products.
• Provided that all such advertisements shall be previewed and certified
by the Central Board of Film Certification suitable for unrestricted
public exhibition prior to telecast or transmission or retransmission.
(Times of India, 14th March, 2009) the government has introduced a
new condition to discourage surrogate advertising. It is now a
precondition that products advertised using brand name or logo of any
liquor or Cigarette Company is readily available in the market. The
order adds that the expenditure on advertising for the product should not
be disproportion- ate to the actual sales turnover of the product.
Indian Liquor Industry is divided into 2 broad categories: -
 Indian Made Foreign Liquor (IMFL)
 Country Made Liquor
Indian made foreign Liquor Industry have market value of INR 8500
Crore against Country made liquor INR 900 Crore in 1999 & is
growing at 12-15% P.A over last 2 yrs. Therefore, the second one is
Shift from country liquor to IMFL because of rising per capita.
IMFL comprises Brown spirits: -whisky, brandy, rum and white spirit
vodka & gin having business of INR 8500 crore for the year 2011
Country-made liquor comprises alcoholic beverages made by
local breweries.
Major competitors in setting up Liquor Industries
Manufacturer Brands
 United Breweries (UB) Group(Bangalore)
King Fisher, Kalyani Black Label, Signature, Blue Riband
 Shaw Wallace (Calcutta)
Haywards
 Jagajit Industries (Kapurthala, Punjab)
Aristocrat
 Mohan Meakins (Solan,Himachal Pradesh)
Golden Eagle
 Associated Breweries & Distilleries(Mumbai)
London Pilsner, Smirnoff, Gilbeys Green Label, Malibu,Archer’s Peach Schnapps

Legal Environment: -
• Ban on direct advertising:-Direct advertising on alcoholic or
beverages or liquor or tobacco products was banned in 1995 due to
which manufacturers started taking help of surrogating advertising
(or indirect advertising).
• Excise regulations and Licenses: -Before starting the Liquor
business (either on small scale or large scale), companies or
business is required to get license & register it & there are also
some rules which he had to follow.
• ‘Regulated’ industry - movement, prices of intermediate
goods (molasses, ethanol) tightly controlled - state
governments exert considerable influence: -The prices of raw materials (like molasses,
ethanol etc.) used in making these items
are fully controlled by the state or central govt.
• Subject to licensing under Industrial (Development and
Regulation) Act, 1956: -the business has to register or licensed
under the Development & Regulation Act, 1956.
• Cap on licensed capacity; special license for expansion
• Plethora of duties and taxes from bottling to sales stage; varying from state to state.
Prohibition in India
• Soon after independence, prohibition was imposed in the -erstwhile state of Bombay.
• The first large-scale movement against alcohol began in the 1970s, when rural women in
various parts of the country protested against the sale of liquor in their villages since liquor
provoked their husband leads to domestic violence.
• In the year 1995, The Information and Broadcasting ministry of India banned the ads.
• But even after the ban, liquor companies continued to advertise their drinks or liquor in the
form of surrogate advertisements.
History of liquor in Gandhians time: -
• India has come a long way ahead of state of 1930s or 40s
• In 30s, people in state of unemployment & poverty used to spend their spare time in
drinking, even if they had no money
• The result was families destroyed due to head of the family being indulged in drinking habit
• Violence caused by drinking problem was a common thing at that time.
After Independence: -
After independence, India had to abolish selling of liquor
• But no, India is still generating revenues from liquor
• Now, thing is whether drinking liquor is actually bad habit, or it
was the situation which demanded Gandhi Ji to be against liquor
What the study says?
 According to NIAAA – National Institute on Alcohol Abuse &
Alcoholism, moderate drinkers have lowest death rate compared to
heavy drinkers
 In another word, if you take liquor as a drug & take in a controlled
fashion, it’s good for your health
 So, being strictly against liquor or drinking habit is quick or biased
judgement
 Excess of anything is not good, so is the case with liquor too
Type of surrogate advertising
 TV commercials that mention a product for which a company is
not known as a way of bringing up the idea of a product for
which the company is known.
 Sponsoring events and sporting teams is another example of this
advertising.
 Public service announcements also are commonly used to
advertise these products.

Advantages

 One of the highest revenue earners for the government. By ways

of taxes and duties.
 High revenue earners for television channels.
 Surrogate advertisements are actually helpful in building a better
brand image and awareness.
 This brand provides a good value for money.
 Surrogate advertising allow the marketers of banned products to
get market exposure.

Disadvantages

 The disadvantage of surrogate advertising is that the public is not so naive that it will favor
your product just because you evoke an image in the public mind associated with your
product. Probably, laws were made against advertising your product because public
opinion already was opposed to it. Laws, after all, are just an extension of preexisting
views held by the majority of the people.

 Whether the advertising of surrogate of the same brand leads to the

recall of original product or remember by replacing the original
product with the new legal product under the same brand?
 Advertisers of tobacco and liquor are continuously spending a
huge amount of money in order to create awareness about their
brand through whatever means possible. Billions of rupees spent
every year on advertising of a product where the advertiser is not
even allowed to flash the name of the product.

Ethical
 Surrogate advertising can be used when corporations need to cultivate a picture of social
responsibility. As an example, many health fans have criticized adverts for sweet treats aired
during children's toons. A company might pull outright advertising in these time slots and
instead air a sequence of public service news about eating a well-balanced diet, with the
reports by coincidence carrying the company's branding. Pharmaceuticals are another
product with advertising limitations.
 Surrogate advertisements are a debatable topic especially considering the fact that directs
advertisements of liquor and tobacco is banned in India. If it is established that these form of
advertisements actually increase the brand image and thereby resulting in increased sales
then the whole purpose of banning the direct advertisements is defeated.
 In a democratic country one should be permitted to use every means of communicating
about the product and services one is legitimately manufacturing and selling like liquor and
tobacco.
Unethical
 Traditionally, pharmaceutical corporations weren't permitted to publicize prescription
medicines. Once this regulation was relaxed, some limitations were left in effect. Using
surrogate advertising permits corporations to find a way around laws. For example, the maker
of an asthma medicine might sponsor informative commercials about managing asthma, with
the medicine branding scattered across the advert to get purchasers used to the brand and to
mean that the medicine plays a crucial role in handling asthma.
 Surrogate advertising is not only misleading, but also presents false and dishonest
information in many cases. It has a very negative effect on the markets as a whole.
 in general, the perceptions that govern the attitude of people towards these advertisements
is much on the negative side rather than being on the positive side. They neither liked the
advertisements nor the favored them. A large proportion of the respondents felt that surrogate
advertising is anti-social as it tries to promote the product that is generally considered as
harmful for the society, it promotes wrong impressions and tries to fool the
customer insulting customer intelligence, leads to moral degradation and is deceptive.
 However a few respondents took surrogate advertisements as a way of fair practice,
entertaining and associated it with modern life style. A set of respondents were completely
unaware of the phenomena of surrogate advertising while a few others were confused about
the same. This research led to the conclusion that whatsoever may be the positive perceptions
revealed, still a lot of people perceived surrogate advertising as negative, unethical and
immoral.
 Its effect extends from the society to the business, from economics to education. In a
country like India, a large portion of the income of population is spent of harmful products
like cigarettes and alcohol which in the long run is leading to a lot of 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 next few
years”, in such a case the problem of health hazard is growing and growing at a rather fast
pace. The consumption of liquor and cigarettes is increasing every year worldwide.

BANNING LIQUOR ADVERTISEMENTS – AGAIN &

INDIAN GOVT. IN DELIMMA
In June 2002, the Information and Broadcasting (I&B) Ministry of India ordered leading
television (TV) broadcasters to ban the telecast of two surrogate ads of liquor brands,
McDowell’s No. 1 and Gilbey’s Green Label. The Ministry also put some other brands –
Smirnoff Vodka, Hayward’s 5000, Royal Challenge Whiskey and Kingfisher beer – on a
‘watch list.’ The surrogates used by these advertisements ranged from audiocassettes, CDs
and perfumes to golf accessories and mineral water. By August 2002, the I&B Ministry had
banned 12 advertisements. Leading satellite TV channels, including Zee, Sony, STAR and
AajTak were issued showcause notices asking them to explain their reason for carrying
surrogate liquor advertisements. The channels were asked to adhere strictly to the Cable
Television Regulation Act 1995 (Cable TV Act, 1995). As a result, Zee and STAR stopped
telecasting the advertisements; AajTak and Sony soon followed suit. In addition, I&B
Ministry hired a private monitoring agency to keep a watch on all advertisements for
violations of the Act. These developments led to heated debates over the issue over the
surrogate advertising by liquor companies. Though the liquor companies involved protested
strongly against the I&B Ministry’s decision, they had no choice, but to comply with the
regulations. Analysts remarked that the government’s policy was hypocritical. One said, “On
the one hand they allow these ‘socially bad’ products to be manufactured and sold (in order
to garner revenues) and then they deny the manufacturers the right to propagate knowledge
of their products in order to drive sales. If something is bad and cannot be advertised, why
allow it to be sold at all?” Meanwhile, the government also seemed to be in dilemma. On the
one hand, it had to encourage the sales of liquor and tobacco because they were the highest
taxed sectors of the Indian economy. On the other hand, there was all so the need to take the
high moral ground and reduce the consumption of such products.
Threat of Substitutes of liquor
• Today with the advancements and up gradation in the standard of living, people are
becoming more health conscious and a large chunk of the population has become aware of
the fact that Liquor is harmful for health.
• For this a lot of people have shifted their demand from Liquor to juices & other health
drinks.
Major substitutes for Liquor are:
• Soft Drinks
• Non-alcoholic drinks
• Coke
• Pepsi
• Other Health drinks
There has been a decline in the sale of liquor in India by 2.5% in the year 2010 which clearly
indicates the impact of substitutes and awareness amongst the consumers.
Bargaining Power of Customers: -
• The Liquor industry has witnessed the consumers always at a weaker end.
• There is not much bargaining power in the hands of the consumers in Indian liquor industry
as the prices are set by the forces of demand & supply and the demand for liquor here is high
as compared to the supply.
• Hence, the producers are at a beneficiary end and charge higher prices.
• In India, a liquor brand is identified and is appreciated only on the basis of its higher price.
• It is an interesting fact that Companies use “High Price” as one of its promotional strategy
to attract the consumers.
Major players create competition on the basis of:
– Looks of the liquor bottle
– Pricing the product much higher
– Innovative
– Promotional
– campaign

CASE STUDY OF PAN MASALA

Smokeless tobacco use is quite prevalent in India. It was estimated that 96 million out 184
million tobacco users (52%) of India consumed tobacco in smokeless form. Use of 'Gutka'
and 'Pan Masala with Tobacco' is a common modality of tobacco use especially among the
youth. It has been reported through large-scale representative surveys in Uttar Pradesh and
Karnataka (2001) that 77.25 and 83.1% of users of gutka or pan masala-containing tobacco,
respectively, from the two states, were below the age of 40 years. Four types of pan masala
are available in India market, namely, plain pan masala; sweet pan masala; pan masala
containing tobacco; gutka. Gutka has been defined as tobacco along with small quantity of
pan masala. Growth of pan masala industry was very slow in the 1970s when only plain and
sweet pan masala were introduced. However, this industry saw a sharp growth from 1980s
onwards, after the introduction of pan masala, containing tobacco and gutka, especially in
small sachets (which increased their transportability and cost of single purchase). Often
people consider all pan masala to be same and tobacco to be an integral part of the
concoction. The smokeless tobacco industry of India seems to have taken advantage of this
perception over the last few years and have initiated advertisements of plain pan masala.
Some commonly observed advertisements included, Pan Parag, Goa 1000, Shimla,
Rajnigandha, etc. While direct advertisements of all tobacco products vanished after
promulgation of the comprehensive legislation for tobacco control from 1st May 2004, the
advertisements of various pan masala continued, apparently suggesting their nontobacco
nature. In fact, one such product (Pan Parag) had been advertising about its 0% tobacco
contents. In the recent past, a Khaini product advertised itself as 'ChainiKhaini' in print
media and on billboards outside Delhi (billboard advertising of tobacco products has been
banned in Delhi since 1 January 1997), but on television the product was mentioned as
'ChainiKhaini', without even mentioning the nature of the product. In recent times, this
television advertisement shows a sachet mentioning it as ChainiKhaini pan masala, but with
no major change in the advertisement.
Tobacco control activists have long been criticizing these advertisements as indirect tobacco
advertisements, but had no means to prove it. This preliminary study was carried out to
check whether the advertisements of plain pan masala or some other products with names
similar to tobacco products were really the advertisements of the intended products or was
surrogate advertisements of their tobacco products.
Methodology
Advertisements of many plain pan masalas or other products with names similar to tobacco
products had been observed on television, as well as in print media. Two major television
news channels of India were observed to be showing a large number of advertisements of
pan masalas or other products bearing similar names as the gutka/chewing tobacco/bidi
products. The programmes of two such news channels (Hindi channel AajTak and English
Channel Headlines Today) were viewed continuously for 24 h on two different days. The
programme of Hindi news channel was seen on 22 May 2005 (from 8.30 pm of 21 May 2005
to 8.30 pm of 22 May 2005), whereas the programmes of English news channel were seen on
15 June 2005 (from 11.00 pm of 14 June 2005 to 11.00 pm of 15 June 2005). The frequency
and duration of all these advertisements was noted. The programmes were noted on several
other days also to assess whether the frequency of these advertisements was similar.
Other variables important to the study related to the total sale value of the gutka products,
and the proportion of sale of plain pan masala to gutka or to the total tobacco products. The
tobacco companies may not readily provide information on these aspects. The sale value of
tobacco products of one of these companies (M/s Kothari Brothers, manufacturers of Pan
Parag pan masala and Pan Paraggutka) was available on the Internet, and this information for
the most recent available financial year (April 2003 to March 2004) was used for this
study.
A large sentinel survey on tobacco use pattern was carried out in the year 2001 in the states
of Uttar Pradesh and Karnataka. The lead author of that study provided additional
information on the prevalence of use of plain pan masala and gutka by these communities as
observed in the survey. This data helped in assessing the proportion of users of plain pan
masala as compared to users of all types of pan masala (irrespective of presence of tobacco).
The rate of advertising for the television channels were noted from the website of the
television channels. There were differential rates for different timings. In view of the high
level of advertisement provided by the specific product (Pan Parag) and its 24-h distribution
on Hindi news channel, the lowest rate given for bulk advertisers was used for further
calculations (Rs. 5500 per 10 s). However, the advertisements on the English news channel
were concentrated during daytime. Thus, the rate for each of the advertisement was
considered, as given by the channel for maximum volume users.
The study adopted the principle of providing the margin of doubt in favor of tobacco
companies in case of limited information on the subject. For example, prevalence of
consumption of plain pan masala was observed to be more in the state of Uttar Pradesh (as
compared to Karnataka). The prevalence of such products was more in urban areas.
Therefore, such proportion as observed from data pertaining to urban Uttar Pradesh was used
for the study. Similarly, the rates for advertisement, which might have been paid to the
television channel were assessed at the minimum chargeable rates by the channel.

Observation
Advertisements of these products are not limited to the two channels observed under the
study. The same advertisements have also been observed on many other television channels.
Advertisements of these products also appear in the print media. As such, this study should
only be considered as preliminary, and as estimating only the minimum expenses on
advertisements by the concerned companies. During the 24-h telecast on the selected
television news channel, five types of advertisements were observed which had names
similar to tobacco products.
Three types of advertisements were observed during the telecast of the Hindi news channel.
These included, direct advertisements of the product, sponsorship of a programme, and
advertisements of a programme on the same channel partially sponsored by these companies.
Under the last category, besides mentioning their role as sponsors, details about the product
were also mentioned. Total duration of advertisements of these five products turned out to be
1215 s during the 24 h under observation with Pan Parag being the highest contributor for
615 seconds (s).
Only direct advertisements were observed on the English news channel. These
advertisements were not seen after midnight till the early hours of the day. The total duration
of these advertisements was 825 s, with Pan Parag contributing 420 s.
The total sale value of one of the product being advertised during this period was available
on the Internet. The total sale value of M/s Kothari Brothers was Rs. 1676.4 million during
the financial year 2003-2004; Rs. 2315.00 million during the financial year 2002-2003; Rs.
2821.60 million during the financial year 2001-2002; Rs. 2114.80 million during the
financial year 2000-2001. The latest available figures were used for the purpose of
calculations under the study.
The prevalence of use of plain pan masala, gutka and proportion of plain pan masala to these
products is given. In view of the principle of providing the margin of doubt in favor of
tobacco companies in case of limited or varied information, the maximum observed
proportion of use of plain pan masala (among urban men in Uttar Pradesh at 3.8%) was
used for further calculations in the study.
Using the values noted from various sources, which shows that the annual sale value of Plain
Pan Parag was assessed at Rs. 6.37 crores (Rs. 63.7 million or US $ 1.45 million at currently
prevailing exchange rate).
On the other hand, the annual cost of advertisements of the same product on two television
channels (AajTak and Headlines Today) was estimated to be Rs. 24.46 crore (Rs. 244.6
million or US $ 5.56 million at currently prevailing exchange rate).

Discussion or Conclusion
The annual cost of advertisement of one of the most popular brand of plain pan masala (Pan
Parag) far exceeds its annual sale value. The annual cost of advertisement of plain Pan Parag
on two television channels alone is 3.8 times its annual sale value. This indicates that the
Pan Parag pan masala advertisements are a surrogate for the tobacco product (gutka) the
company manufactures under the same brand name.
The current estimate of the annual cost of advertisement pertains to only two television
channels. It is important to note that similar advertisements have been observed on other
television channels, as well as print media. In view of this, the estimated annual advertising
cost is an underestimate, and the real differential is likely to be far more than
what has been depicted in this study.
The study was carried out with the hypothesis that the advertisements were aimed for
promotion of the product itself. Because of this reason any margin of doubt was in favor of
the manufacturer of the product.
The proportion of use of plain pan masala out of total gutka/pan masala use, as observed
among men from urban Uttar Pradesh was used, providing the highest possible proportion
for sale of plain pan masala. It is likely that if overall proportion of use of plain pan masala
(or plain Pan Parag) out of total gutka and pan masala use were available, the proportion (and
thus the sale value) would have been much lower. The exact rates paid by the pan masala
companies to the television channel are not known to the authors. The estimates used for the
Hindi news television channel were the lowest rates shown on its website, although
sponsored and specific time advertisements are known to have differential rates.
Although 24-h quantitative observation for these advertisements was for 1 day for each of
the channel, these advertisements have been observed for a very long period. Many
programmes on the two channels were watched again on several days at different timings to
ensure that the observations were not a one-time phenomenon. In fact, the timings of these
advertisements were more or less constant every day.
Such calculations could have been carried out for each of the brand under study, but the
study was limited to one brand in view of the non-availability of sale figures of other brands
to the authors. However, the high-volume of advertisements and the knowledge that the
proportion of people using plain pan masala is small, suggests that these are also likely
to be surrogate for their tobacco products.
One could argue that the proportion of sale of this particular brand of plain pan masala may
be very high as compared to other brands of plain pan masala. This however, does not seem
to be tenable, because most of the popular brands seem to be advertising heavily.
Advertisements of other brands of plain pan masala like Shimla, Goa 1000, have also been
seen on television, although this study did not find these advertisements on the specific day.
The above makes it clear that the advertisements of plain pan masala are
a surrogate for promotion of gutka bearing same brand name. The manufacturers have taken
advantage of common community thinking that pan masala always has tobacco in it. In fact,
this kind of confusion had been seen in scientific literature also wherein studies carried out
on mutagenesis by pan masala did not mention if the product contained tobacco or not. These
advertisements seem to have increased during the recent years when the possibility of their
ban started becoming a reality.
Trademark diversification and surrogate advertisements are known by
cigarette manufacturers.
Surrogate advertisements by gutka manufacturers in India has been suspected, but could not
be proved. Although preliminary, the current paper provides first objective evidence of
surrogate advertisement of any tobacco product.
Brief explanation of the above Case: -
BACKGROUND: Pan masala is a comparatively recent habit in India and is marketed with
and without tobacco. Advertisements of tobacco products have been banned in India since
1st May 2004. The advertisements of plain pan masala, which continue in Indian media,
have been suspected to be surrogate for tobacco products bearing the same name. The study
was carried out to assess whether these advertisements were for the intended product, or for
tobacco products with same brand name.
MATERIALS AND METHODS: The programme of a popular television Hindi news
channel was watched for a 24-h period. Programmes on the same channel and its English
counterpart were watched on different days to assess whether the advertisements were
repeated. The total duration of telecast of a popular brand of plain pan masala (Pan Parag)
was multiplied by the rate charged by the channel to provide the cost of advertisement of this
product. The total sale value of the company was multiplied by the proportion of usage of
plain pan masala out of gutka plus pan masala habit as observed from a different study, to
provide the annual sale value of plain pan masala product under reference.

RESULTS: The annual sale value of plain Pan Parag was estimated to be Rs. 67.1 million.
The annual cost of the advertisement of the same product on two television channels was
estimated at Rs. 244.6 million.
CONCLUSION: The advertisements of plain pan masala seen on Indian television are a
surrogate for the tobacco products bearing the same name.

Research comprises "creative work undertaken on a systematic basis in order to increase the
stock of knowledge, including knowledge of humans, culture and society, and the use of this
stock of knowledge to devise new applications.”

Marketing research is "the process or set of processes that links the producers, customers,
and end users to the marketer through information which is used to identify and define
marketing opportunities and problems; generate, refine, and evaluate marketing actions;
monitor marketing performance; and improve understanding of marketing as a process.

Consumer behavior is the study of individuals, groups, or organizations and the processes
they use to select, secure, use, and dispose of products, services, experiences, or ideas to
satisfy needs and the impacts that these processes have on the consumer and society.

Advertising is a form of marketing communication used to promote or sell something;

usually a business's product or service There are a numerous reasons for companies to restore
themselves to such advertisements. One of the most common among them is to circumvent a
prohibition by law in several countries on direct advertisements of particular products
besides its unhealthy.

Hence different techniques used to promote such brands might include, endorsing their
products using public service announcements, advertising well established brand embedding
such surrogate products or duplicating the brand image of one product extensively to
promote another product of the same brand or if not the case, endorsing themselves as
discharging some social obligation towards the society (Ex: Officers Choice – Alcohol).

Whereas the primary objective of the companies behind such prohibition is to compensate the
losses occurred due to such prohibition.
REVIEW OF LITERATURE
The literature on surrogate advertising and its impact is very scanty as this problem has
originated very recently and is confined to countries where advertising of such harmful
products is banned by the government or the regulatory body.

The basic question that needs to be answered is whether advertising make any material
impact in the sales of alcohol or tobacco products. Kent M. Lancaster and Alyse R. Lancaster
disregard that there is any difference in sales of tobacco and alcohol related products with or
without advertising. They examined most of the published evidence worldwide on the effects
of overall advertising and of advertising bans on aggregate demand of cigarette and tobacco
products. Based on their exhaustive research they argued that partial bans on advertising are
likely to have a very little or no impact on the consumption of such products, the reason
being a complete ban in advertising of such products itself did not had any impact on sales or
aggregate demand of these products.

However, on the other hand, Saffer and Frank in their study established a correlation between
ban on tobacco advertising and the reduction in tobacco consumption. They concluded that a
comprehensive set of tobacco advertising bans can reduce its consumption and that a partial
ban will have a very little or no effect on its consumption. Advertising of tobacco and
alcohol products is public health issue if they increase the consumption of these products.
Public health advocates also assert the same point of view.

Mehta (2003) is of the opinion that Surrogate advertising is not only misleading, but also
presents false and dishonest information in many cases. It has a very negative effect on the
markets as a whole. With so much widespread of surrogate advertising and its ill effects, it’s
time to tackle the problem and stringent regulatory measures should be in place to curb such
practice.
Chander and Sharma in 2006, tried to study the perception of people towards surrogate
advertising by using a statistical tool factor analysis. The results of their research were
surprising as they found out that the in general, the perceptions that govern the attitude of
people towards these advertisements is much on the negative side rather than being on the
positive side. They neither liked the advertisements nor the favoured them. A large
proportion of the respondents felt that surrogate advertising is anti social as it tries to
promote the product that is generally considered as harmful for the society, it promotes
wrong impressions and tries to fool the customer insulting customer intelligence, leads to
moral degradation and is deceptive. However a few respondents took surrogate
advertisements as a way of fair practice, entertaining and associated it with modern life style.
A set of respondents were completely unaware of the phenomena of surrogate advertising
while a few others were confused about the same. This research led to the conclusion that
whatsoever may be the positive perceptions revealed, still a lot of people perceived surrogate
advertising as negative, unethical and immoral.

Sally and Jane also did a very interesting study on advertising of alcohol. They divided their
study into two sections. In the first section the researcher establishes the hypothesis that
alcohol advertising is the ultimate driver for overall consumption and that advertising alone
leads to the expansion of markets. In the other section the authors first identify the key
correlates of the alcohol consumption in the UK and then quantified them. They built
separate econometric models for young people between 18-24 years and for those over 25, in
order to consider the claim that alcohol advertising is aimed at increasing consumption
among youths. They concluded that consumption of alcohol among the age group 18-24
years is correlated with trade promotions and the increasing trend for in-home drinking. On
the other hand, consumption of alcohol among 25 years and above is related to pricing
issues, price being a factor for both price by competing categories as well as the general price
level of alcohol as a commodity. However, no conclusions could be drawn to prove any sort
of statistical relationship between alcohol advertising and its consumption for either age
group.

The instant case enquiry with an advertisement that appeared at page 66 in The Illustrated
weekly of India of date November 23, 1986.McDowell and Co. (hereinafter referred to as
“respondent”). The advertisement depicts a bottle on which is engraved “McDowell’s Diplomat
Colgne”. The same advertisement carries the picture of Ms. Dimple Kapadia, a film actress.
Underneath the picture is the caption “what makes him my choice is his choice…Diplomat”. The
commission came to prima facie view that the said advertisement though apparently refers to
colgne, leaves a misleading impression on the readers that the message is in regard to the good
quality and usefulness of whisky manufactured by it under the brand name “Diplomat”.

United Breweries Limited Vs Mumbai Grahak Panchayat on 4 September, 2006.Equivalent

citations: I (2007) CPJ 102 NC.

Mumbai Grahak Panchayat filed a complaint against appellant as well as Western Railway for
having adopted unfair trade practices in prominently displaying/exhibiting false, misleading and
surrogate liquor advertisements on the coaches of the Western Railway trains and to seek
discontinuance of the same along with corrective advertising by the United Breweries Limited to
neutralize the effect of said advertising & punitive damage. The description matches with the

15

Bagpiper Whiskey” and not “Bagpiper Soda”. There was no Bagpiper soda available in the
market.

“Government Bills: Discussion on the motion for consideration of the Representative of People
(amendment) Bill 2009”, as passed by Rajya Sabha discussion not concludes.

The honorable Minister of Law and Justice (Shri. M. Verappa Moily) suggested prohibition of
surrogate advertisement in print media as election commission recommended that in last six
months of term state/central government cannot advertise. To cite an example, we can take case
of surrogate advertisement in the newspaper “No. 1 Haryana” during Haryana Elections. The
same with the advertisement “Shining India”. Election Commission has to review the rules to

utilize power effectively for not influencing voter’s wrongly.

The basic question that needs to be answered is whether advertising make any material
impact in the sales of alcohol or tobacco products. Kent M. Lancaster and Alyse R. Lancaster
disregard that there is any difference in sales of tobacco and alcohol related products with or
without advertising. They examined most of the published evidence worldwide on the effects
of overall advertising and of advertising bans on aggregate demand of cigarette and tobacco
products. Based on their exhaustive research they argued that partial bans on advertising are
likely to have a very little or no impact on the consumption of such products, the reason
being a complete ban in advertising of such products itself did not had any impact on sales or
aggregate demand of these products.

Dr. S. G. KhawasPatil [YeshwantMahavidyalaya, Nanded] and Laxmikant S. Hurne

[YeshwantMahavidyalaya, Nanded] in their study titled " Surrogate Advertising : A
Successful Marketing Strategy for Liquor, Whisky products" conducted to know the
effectiveness of surrogate advertisements, whether the products shown in advertisement
are sold or not and customers awareness about surrogate advertisements, concluded that
maximum respondents can tell intention behind surrogate advertisements, i.e, to advertise
liquor, whisky products. It means surrogate advertisements are correctly targeting their

customers. Surrogate advertisement is a successful strategy because maximum

respondents
are changing their purchase decision. It is observed that, customers and manufacturers are
not interested in surrogate products, because we can’t see such products in a number as
compared to whisky. Shortly, we can say, these advertisements are complying with legal
aspects and advertising the correct product. So, Surrogate advertisements are successful
strategy for marketing of whisky, liquor products.

Ms Kirti Singh Dahiya and Ms kirti Miglani started their research study "Emergence of
surrogate advertisement" to check whether surrogate advertisements provide high brand
recall or not, to find whether the products shown in advertisements are sold or not and
study whether surrogate advertisements appeal the customer for the hidden product
directly, found that Surrogate advertisements are only successful in creating brand recall
of the hidden product in the advertisement. People do not get much influenced by these
products advertisements while making their purchase, their purchase decision are mainly
influenced by their financial status. Another major finding is that these products make
people addicted to the products; people cannot resist themselves from consuming these
products so in this scenario the role of advertising whether surrogate or direct is reduced
at minimum

Brand experts define it as the leveraging on the existing brand equity, while agencies call it a
exercise to create awareness and brand recall of products on the negative list, the government
on the other hand comes down heavily on the intriguing concept of surrogate advertising.
The anti-tobacco lobby is going strong worldwide and the list of negative products in every
country is on a rise.

“Surrogate advertising is a reflection of the hypocritical society that we live in. We consider
some products good enough to be sold but not good enough to be advertised. A marketer has
to sell his product, and will find means to promote it. I don’t blame him.”

The use of surrogate advertising in India can be traced back to 1995 when the Cable
Television Act 1995 was enforced which stated – “No advertisement shall be permitted
which promotes directly or indirectly, production, sale or consumption of cigarettes, tobacco
products, wine, alcohol, liquor or other intoxicants”. This ban on advertising of such
products leads to the emergence of surrogate advertising in India in a big way. A surrogate
advertisement is generally understood as – “the one in which a different product is promoted
using an already established brand name. Such advertisements or sponsorship helps in
contributing to brand recall. The different products shown and used in the advertisement are
called ‘Surrogates’. Surrogate could either resemble the original product or could be a totally
different product, but using the established brand of an original product”.

However, the concept of surrogate advertising at that time was not something new to the
world as United Kingdom was facing the same from problem with advertising and marketing
of such products from a very long time. The same trends were followed in India and the
market was flooded by surrogate products of established brands of the so called ‘negative
products’ and their promotions. Some of the noticeable examples of surrogates in India are
Gilbeys water, Mcdowells Soda, Bacardi Audio Cds, Red and White bravery awards and
Royal Challenge Sports equipments.

Since then, every year marketeers of these brands have been spending humongous amount of
money in manufacturing and promoting surrogates. According to Allan Colaco, Secretary
General, Advertising Standards Council of India (ASCI), surrogate ads formed 5 per cent

of the total Indian advertising industry, which stands at Rs 21,000 crore (approx $4.5
billion), as per the Pitch Madison Media Advertising Outlook (2009). In other words,

over a thousand crore rupees spent by marketeers annually, without even showing
the actual product to the receivers. This statistic amazes me as there are no specific

tools to evaluate the success of a surrogate campaign, but still a large amount of
money is being spent on the same year on year. Though a lot of studies have been

done as to what surrogate advertising is and how it should be done, whether it is

ethically correct or it is a monster in a mask but there is no major work done aiming

at measuring the impact of surrogate advertising on the minds of consumers.

RESEARCH PROBLEM
 Literature review reveals that banning of advertising of alcohol, tobacco products by
central government made companies resort to advertise them using other products with
same brand name leading to surrogate advertising. Ethical concerns and issues should be
addressed. Challenges of surrogate advertisement as for ethical business practice is that
one should not mislead consumers, especially young generation to lean towards drinking
alcohol, cigarettes. Surrogate advertisements are considered ethical/unethical by people is
known.

IMPORTANCE OF THE STUDY

This research study is significant as it enables to find the people's perception of surrogate
advertisements and their impact on customer’s buying decision is analyzed. It helps
companies to know the customer views and make appropriate changes in their strategies
to reach out to customers in a better way.

OBJECTIVES OF THE STUDY

1. To explain the concept of surrogate advertisements.

2. To study the consumers' awareness towards surrogate advertisements.

3. To evaluate the influence of surrogate advertisement on consumers; buying decision.

4. To understand the consumer perception towards surrogate advertisements and its

products.
SCOPE OF THE STUDY

This study was conducted in Noida and Greater Noida city for primary data collection. It
is based on the responses collected from customers during the period of Jan-Feb
2019.The study is undertaken to understand the concept of surrogate advertising and its
influence on consumer buying behavior.
RESEARCH METHODOLOGY
Sample design:

 Sample technique: Random sampling

 Sampling unit: Individual

 Sample size: 50 respondents

 Sample area: Noida & Greater Noida

Sources of data:

• Primary data: The primary data was collected using a Questionnaire

• Secondary data: The secondary data was collected from research papers, articles,
journals.

Tools and Techniques used for data analysis:

• Graphical pie charts

• Simple tabulations

• Chi square test

LIMITATIONS OF THE STUDY

Study is restricted to the geographical limits of Noida and Greater Noida. Limited period
of survey and limited sample size (50). There were few responses which were vague or
not answered at all to get complete and accurate information required for the study
CONTRIBUTION OF THE STUDY

The research study on surrogate advertisement contributes knowledge to the society by

creating awareness among respondents and spreading the concept of surrogate
advertising. It helps marketers to approach consumers to promote their banned products.

SCOPE FOR FURTHER STUDY

There is a wide scope for future research on surrogate advertising, the research could b
carried out as a comparative study analysis in the Indian context and perception of images
that the viewers have while watching tv ads of these banned products and also how
surrogate advertisements has made the viewers to persuade in consuming these

This study opens up new ground for further study. This study concentrates on basic
awareness and perception of consumer on surrogate Ads. Studies can be done with main
area of focus on ethical concerns of surrogate advertising, its positive and negative effects
to the society.
 SURROGATE ADVERTISING

AND

ITS IMPACT ON INDIAN SOCIETY

SURROGATE ADVERTISING: DEFINITION

The term 'surrogate' is defined a 'substitute' i.e. anything which takes place of other. It can
be a person, human, product etc. In case of surrogate advertising, a product is used to
advertise a certain different product. Especially products (for which direct advertising on
mass media is prohibited by the laws of land of most countries) are advertised with use of
substitutes like mineral water, soda, Mega cricket team clubs, friend clubs or music CDs.

Advertising takes various shapes with level of surrogate advertisements varying from
country to country, people to people and product to product. In certain regions of the
globe, open advertisements of these products are allowed while some counterparts
imposing strict restrictions on them. The basic intention of these types of advertisements is
mainly to popularize the brand and create a slot of consideration in the potential
consumer’s minds.

ORIGIN OF SURROGATE ADVERTISING

It is said that birth of surrogate advertising happened in Britain, where housewives started
protesting against liquor advertisements which provoked their husbands. The protest rose
to a level where liquor advertising had to be banned and brand owners seeing no way out
decided to promote fruit juices and soda under the brand name; the concept later emerged
as 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 a different product altogether, but
using the

established brand of the original product (the alcohol or cigarette).The sponsoring of

sports/cultural/leisure events and activities also falls under the purview of surrogate
advertising.
INDIAN SCENARIO
The use of surrogate advertising in India can be traced back to 1995 when the Cable
Television Act 1995 was enforced which stated - "No advertisement shall be permitted
which promotes directly or indirectly, production, sale or consumption of cigarettes,
tobacco products, wine, alcohol, liquor or other intoxicants". This ban on advertising of
such products leads to the emergence of surrogate advertising in India in a big way. Indian
market was flooded by surrogate products of established brands of the so called 'negative
products' and their promotions.

By August 2002, the I&B Ministry had banned 12 advertisements and leading satellite TV
channels including Zee, Sony, STAR and AajTak were issued show cause notices to
explain their rationale behind carrying surrogate liquor advertisements. Product
advertising for liquor and cigarette companies is banned in the country since 1995 by
Cable Television Network (Regulation) Act. According to Rule 7 (2) of the Act, no
broadcaster is permitted to show advertisement which promotes directly or indirectly
promotion, sale or consumption of cigarettes, tobacco products, wine, alcohol, liquor or
other intoxicants, infant milk substitution, feeding bottle or infant food. This ban is now
likely to be extended to advertising of extended brands.

In June 2002, the Indian Information and Broadcasting (I&B) Ministry served notices to
leading television broadcasters to ban the telecast of two surrogate ads of liquor brands
McDowell No.1 and 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.” A market survey in 2001 revealed that advertising has a direct influence on
the consumption habits of 431 million people in India and an indirect impact on 275
million `aspirants' from the lower income group. Considering this and realizing that nearly
50 per cent of the television owners have access to cable channels, there is no doubt that
the hidden call for alcohol consumption behind the surrogate advertisements is not
escaping the eyes of viewers in the world's fourth highest liquor-consuming country. The
very purpose of banning liquor advertisements is defeated by surrogate advertising.
Answering to the notices, Zee and STAR stopped telecasting the advertisements, followed
soon by AajTak and Sony.

Liquor producers spent heavily on advertising on the electronic media, particularly TV.
Though the broadcasters were bound by the 30 yrs old advertising code, which stated that
“No advertisements shall be permitted which relates to or promotes cigarettes and tobacco
products, liquor, wines and other intoxicants,” the telecast of such product continued
blatantly over the years. More over the satellite channels garnered about 50% of their
revenue from liquor and cigarettes advertisements. In the peak seasoned it gets almost
doubled. Due to the ban, liquor companies focused more on promotions for brand
building. They started sponsoring events that projected the “glamour” of the brands, like
track racing, car rallies etc. for instance Shaw Wallace Co. one of the leading liquor
companies in India, conducted the Royal Challenge Invitation Golf tournament, which
became an annual event. Some companies also promoted their product through corporate
advertising, distributing free gifts like Caps and T- Shirts with the brand name and using
glow-signs outside the retail outlets.
McDowell’s No.l Platinum:
Indian Cricket Team skipper MS Dhoni advertises for the surrogate product soda and asserts it
as “The No. 1 Spirit of Leadership”

The surrogate advertisements from liquor companies intensified further through sponsorships
of movies, music shows, and other programs and attracting youth. For instance, Seagram’s
Royal Stag was promoted by sponsoring movie related activities and Indian pop music using
the banner Royal Stag Mega Movies and Royal Stag Mega Music. In late 2001, the
broadcasters began airing socially responsible advertisements sponsored by liquor companies.
By early 2002, surrogate advertising of liquor brands had intensified like never before on
satellite TV channels. These advertisements attracted criticism from various people. There
were numerous other advertisements selling music cassettes, CDs, water, clothing, fashion
accessories and sports goods, many of them accused of being sexually provocative and
offensive.

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,
RadicoKhaitan. 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
tobacco brand.
According to the Cable Act under the ministry of information and broadcasting, - "no
broadcaster is permitted to show an advertisement which promotes directly or indirectly,
sale or consumption of cigarettes, tobacco products, wine, alcohol, liquor or other
intoxicants…"

Now a new clause has been added under the act stating that "any advertisement for a
product that uses a brand name which is also used for cigarette, tobacco product, wine,
alcohol, liquor or any other intoxicant will not be permitted". Finally, in April 2005, the
ministry resorted to a ban on surrogate advertisements of liquor and tobacco products on
television.
After this directive, the surrogate advertisements are seldom shown on television. Now the
companies will have to reframe their policies. But who will take care of print and outdoor
media is not certain.
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.
COMPANIES FOLLOWING SURROGATE ADVERTISING

CATEGORY BRANDS SURROGATES

Seagram’s Music

McDowell’s Water and Soda

Bagpiper Water, Soda, and Music cassettes &CDs

Red and White Bravery Awards

Bacardi Music

kingfisher Mineral Water & Calendars

ALCOHOL Wills Lifestyle Apparels, accessories

White Mischief Holidays

Imperial Blue Cassettes & CDs

 Smirnoff Vodka Fruit juices

Royal Challenge Golf Tournament

Aristocrat Apple Juice

Officer’s Choice Social Obligation towards Society

Derby special soda

RadicoKhaithan’s Water

Rajnighanda Kesar pan masala

Goa gutka Pan Masala

TOBACCO Pan parag Pan Masala

manikchand Filmfare Awards

Chainikhaini Pan Masala

Pataka 502 Bidi Pataka 502 Tea

GopalZarda GopalSupari 132

Red & white Cigarettes Bravery Award Ceremony

Gold Flake Tennis Tournaments

CIGARETTES Wills Lifestyle India Fashion Week, Lifestyle,(textiles)

 showrooms, Indian Cricket
Team/Matches.

Four Square white water rafting& Gliding

Charms Audio cassettes and CDs.

TABLE 1: BRANDS AND SURROGATES

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
these 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 skeptical about their
entry. Domestically, it has led to innovative ways and methods of spending on different
media for Advertising from the companies, where companies do more of a brand building
exercise than direct advertising. Be it promotions for brand building, or sponsoring
events that can be mapped with the “showbiz” and “glamour” of the brand, advertisers
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.

SURROGATE AD: ROLE IN CONSUMER BUYING DECISION

Generally, advertisements which showcase the product in a different prospective and

highlights the attributes as never been seen before retain the customer share of mind. But
there is catch in the case of surrogate advertisements. Here the product is prohibited to be
shown- its attributes or features to be portrayed are near to impossible. Their role in
impacting the consumer buying decision should be subsequently limited but surprisingly,
it is found that they have a higher role in impacting consumer purchase decisions as
compared to general products’ advertisement owing largely to viewer’s interest and sense
of capturing the message. This fact is also supported by numbers. It is seen that company
investing heavily in surrogate advertisements are witnessing more sales rates as
compared to those investing none or comparatively less. You will be surprised to know
advertising budget of beverage companies stretches in the ranges of hundreds of millions
of dollars per annum. The only reason understood of investing such high sums is the fact
of the recovery through this in the coming future. After all it’s a 60000 crore plus revenue
generating market. Surrogate marketing is not a bad way of marketing or illegal
marketing. It is just the more creative way if marketing that shows the product even
without revealing it. Opportunities are hidden everywhere just like the products in
surrogate advertisements.

PROS AND CONS OF SURROGATE ADVERTISING

ADVANTAGES

1. Companies have to spend substantial amount of money for marketing their

products. Surrogate advertising to a great extent saves companies from huge
expenditure and thus increase the profit margins.

2. Surrogate advertising is very much beneficial for domestic players, it not only limits
the entry of various MNC’s but also creates problem for new entrants in brand
building.

3. Ban on advertisement reduces competition to a great extent.

DISADVANTAGES

1. As per ASCI, surrogate advertising is harmful; there is no logic why the brand name of
the banned product shall be used for products like mineral water. It clearly indicates
misusing the loopholes.

2. The ban severely affects the sale of banned products

3. Ban also results in loss of revenues of TV channels and other media

REGULATORY MEASURES

Surrogate advertisements are not only misleading, but also false and dishonest in many
cases.

With surrogate advertising so widespread, this is the moment to tackle the problem head-
on.

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

1. Making transparent laws banning surrogate advertisements for different

product under a single brand name, by amending the Trade Marks Act, for
instance.

2. Asking the electronic and print media to adhere to the advertisement codes and
not encourages surrogate advertisements.

3. Calling on the ASCI address complaints received from consumers against

surrogate advertisements and take appropriate actions immediately.

4. Adopting strict laws to penalize those companies featuring surrogate

advertisements without any real existence of the product.

5. 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.
LEGAL CASES AGAINST SURROGATE ADVERTISING:

Monopolies and Restrictive Trade Practices Commission in Re: McDowell and Co. Ltd.
Vs unknown on 7th February, 1997.Bench; S ChakravarthyJudgement; S. Chakarvarthy,
Member
---The instant case enquiry with an advertisement that appeared at page 66 in The
Illustrated weekly of India of date November 23, 1986.McDowell and Co. (hereinafter
referred to as “respondent”).The advertisement depicts a bottle on which is engraved
“McDowell’s Diplomat Colgne”. The same advertisement carries the picture of Ms.
Dimple Kapadia, a film actress. Underneath the picture is the caption “what makes him
my choice is his choice…Diplomat”. The commission came to prima facie view that the
said advertisement though apparently refers to colgne, leaves a misleading impression on
the readers that the message is in regard to the good quality and usefulness of whisky
manufactured by it under the brand name “Diplomat”.

United Breweries Limited Vs Mumbai Grahak Panchayat on 4 September,

2006.Equivalent citations: I (2007) CPJ 102 NC---Mumbai Grahak Panchayat filed a
complaint against appellant as well as Western Railway for having adopted unfair trade
practices in prominently displaying/exhibiting false, misleading and surrogate liquor
advertisements on the coaches of the Western Railway trains and to seek discontinuance
of the same along with corrective advertising by the United Breweries Limited to
neutralize the effect of said
advertising & punitive damage. The description matches with the “Bagpiper Whiskey”
and not “Bagpiper Soda”. There was no Bagpiper soda available in the market.

“Government Bills: Discussion on the motion for consideration of the Representative of

People (amendment) Bill 2009”, as passed by RajyaSabha discussion not concludes. The
honorable Minister of Law and Justice Shri. M.VerappaMoily suggested prohibition of
surrogate advertisement in print media as election commission recommended that in last
six months of term state/central government cannot advertise. To cite an example we can
take case of surrogate advertisement in the newspaper “No. 1 Haryana” during Haryana
 Elections. The same with the advertisement “Shining India”. Election Commission has to
review the rules to utilize power effectively for not influencing voter’s wrongly.

NATIONAL AND INTERNATIONAL REGULATIONS

 CIGARETTES AND OTHER TOBACCO PRODUCTS (PROHIBITION OF

ADVERTISEMENT AND REGULATION OF TRADE AND COMMERCE,
PRODUCTION, SUPPLY AND DISTRIBUTION) ACT, 2003 ("COTPA"):

Section 5 of the Act prohibits the advertisement of "Tobacco products" by both direct and
indirect means. Sub-clause (i),(iii) and (iv) of Rule 2 of COPTA Rules, clearly sets out
that the use of a name or brand of Tobacco products for marketing, promoting or
advertising other products would constitute a form of "indirect advertisement".
Accordingly, surrogate advertising carried out by tobacco companies would constitute a
form of indirect advertisement and would consequently be prohibited under Section 5.

 THE CABLE TELEVISION NETWORKS (REGULATION) ACT,1995

Rule 7(2)(viii) of the Cable Television Rules clearly prohibits the direct or indirect
promotion and advertisement of "cigarettes, tobacco products ,wine ,alcohol, liquor or
other intoxicants"; However the proviso to this rule also runs as:

"Provided that a product that uses a brand name or logo, which is also used for cigarettes,
tobacco products, wine, alcohol, liquor, or other intoxicants, may be advertised on cable
services subject to the following conditions that-

 the story board or visual of the advertisement must depict only the product being
advertised and not the prohibited products in any form or manner;
 the advertisement must not make any direct or indirect reference to prohibited
products;
 the advertisement must not contain any nuances or phrases promoting prohibited
products;
 the advertisement must not use particular colors and layout or presentations
associated with prohibited products;
 the advertisement must not use situations typical for promotion of prohibited products
when advertising the other products"

The rules therefore provide a clear leeway for such surrogate advertisements under the
cover of brand-extensions

 THE ADVERTISING STANDARDS COUNCIL OF INDIA("ASCI")

ASCI is a voluntary self-regulation council, registered as a non-profit company under the

Companies Act. It is 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 ASCI 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 given to
the following:

 Visual content of the advertisement must depict only the product being advertised and
not the prohibited or restricted product in any form or manner.
 The advertisement must not make any direct or indirect reference to the prohibited or
restricted products.
 The advertisement must not create any nuances or phrases promoting prohibited
products.'
This section specifically prohibits surrogate advertising along with laying down the
criteria for deciding whether an advertisement is an indirect advertisement.

 FRAMEWORK CONVENTION ON TOBACCO CONTROL(FCTC)

India ratified the convention on 5th February,2004 and the Convention came into force
on 27th Feb,2005. The convention seeks to protect present and future generations from
devastating health, social, environmental and economic consequences of tobacco
consumption and exposure to tobacco smoke by providing a framework for tobacco
control measures.

Article 13 of the Convention is titled as Tobacco advertising, promotion and sponsorship.

This article recognizes the fact that a comprehensive ban is necessary and imperative.
The framework gives the parties the freedom to introduce a comprehensive legislation
banning all tobacco advertising, promotion and sponsorship.

 PRESENT SCENARIO

On February 25, 2008 the Government issued a notification banning surrogate advertising
of liquor companies in print, electronic and outdoor media.3 However, subsequently on
February 27, 2009, I&B Ministry issued a notification amending the said Rule to allow
advertisements of products which shared a brand name or logo with any tobacco or liquor
product with several caveats viz: (i) the story board or visual of the advertisement must
depict only the product being advertised and not the prohibited products in any form or
manner etc.

In 2014, social activist Teena Sharma filed a PIL in the Delhi High Court seeking a ban
on surrogate advertisements. She argued that the Cable Television Network rules 1994
must require that all advertisements found to be genuine extensions by the Ministry of
Information and Broadcasting must be previewed and certified by the CBFC. For
unknown reasons, this PIL was later withdrawn.
 It is very clear from the aforementioned existing laws and regulations that any direct or
indirect advertising of the prohibited products is not permitted in India.

While the Government notification dated February 27, 2009 allows advertisements of
products which shares a brand name or logo with any tobacco or liquor product, it at the
same time also states that no reference direct or indirect could be made to the prohibited
products in any form. Further, I&B Ministry has also made it very clear vide its Directive
dated June 17, 2010 that the Government notification dated February 27, 2009 cannot be
cited as an excuse to telecast advertisements of products in violation of Rule 7(2)(viii)(a)
of CTNR.4

STEPS THAT CAN BE TAKEN TO COMBAT SURROGATE ADVERTISING:

1. Making clear and unambiguous transparent laws banning surrogate advertisements for
different products under a single brand name.
2. Conducting consumer awareness programmers to help people understand the negative
impact of surrogate advertisements.
3. Providing more power to the Advertising standards Council of India to enable it to
take action against false and misleading advertisements and keep a close vigil over clever
evasion of the law, instead of just issuing notices.
4. Establishing a mechanism for effective implementation of international and national
regulations.
5. Several NGOs such as HRIDAY(Health related information dissemination amongst
youth), SHAN (Student Health Action Network) etc led campaigns appealing the
Government for a comprehensive ban on tobacco advertising. The role of NGOs in
combating the menace of surrogate advertising should be recognized and they should be
given more authority to work on such issues.
DATA ANALYSIS

AND

INTERPRETATION
 DATA ANALYSIS AND INTERPRETATION

DEMOGRAPHIC PROFILE OF RESPONDENTS

 AGE:

16-20 31 62%

21-40 14 28%

41-70 5 10%

TOTAL 50 100%
 FIGURE 1: AGE

 GENDER

Male 27 54%

Female 23 46%

TOTAL 50 100%
Media from which advertisements are seen the most

Television 33 66%

Print media 2 4%

Internet 12 24%
 FIGURE 3 : ADVERTISEMENT MEDIA

FINDINGS

65% of the people watch advertisements through Television, 24% use internet, rest 7%
and
4% see by the means of mobile and print media

INFERENCE

The question is to find out the effective means of media advertising through which
television advertising is more reachable than other media.

How often advertisements of alcohol/cigarettes/pan masala are seen.

Regular 12 24%

Occasional 24 48%

Rare 9 18%

Not at all 3 6%

Don’t remember 2 4%

TOTAL 50 100%
 FIGURE 4: FREQUENCY OF ADVERTISEMENTS

FINDINGS

Nearly half of the sample, 48% of the people watches the surrogate ads occasionally
where as 23% of them watch regularly, and 19% rarely see the ads at all. 10% of the
people equally come under the category ‘Not at all’ and ‘Don’t remember’.

INFERENCE

The question aims to find out how often customer watches an advertisement shows that
ads should be more effective to make them watch regularly instead occasionally.
Knowledge about banning on advertisements of such products in India

Yes 22 44%

No 28 56%

TOTAL 50 100%

FIGURE 5: AWARENESS ON BAN

FINDINGS

55% don’t know that ads for these products are banned, rest 45% are aware of it.

INFERENCE

Respondents are asked to answer this question to know their level of awareness on
banning of promotion of these ads which shows that more than half of sample is not
aware.
Requirement of advertisements of such products

Yes 10 20%

No 26 52%

May be 13 26%

Other 1 2.00%

TOTAL 50 100%

FIGURE 6: REQUIREMENT OF ADVERTISEMENTS

FINDINGS

Out of 150 respondents, majority of them think that it’s not required, 20% agree that
they are necessary, 26% are for may be and only 2% for other.
INFERENCE

This shows the customer opinion on these ads where more than half of the respondents
think that it’s not required

Opinion on banning of advertisements of these products

Strongly agree 19 39%

Agree 15 30%

Neither agree/disagree 10 20%

Disagree 5 10%

Strongly disagree 1 1%

TOTAL 50 100%

FIGURE 7: OPINION ON BANNING

FINDINGS

39% of the respondents strongly agree on banning, 30% agree, 20% neither
agree/disagree,

10% disagree and merely 1% strongly disagrees.

INFERENCE

As this question is adopted to know the public opinion on banning, from the data we can
see that most of them agree on banning of these ads.

Awareness about surrogate advertisements

Yes 22 45%

No 23 45%

may be 5 10%

TOTAL 50 100%

FIGURE 8: AWARENESS ABOUT SURROGATE ADVERTISEMENT

FINDING
45% knows and 45% doesn’t know about the surrogate advertisements. Only 10% are for
may be.

INFERENCE

We can see that equal numbers of people are aware and unaware of the concept of
surrogate advertisements.

Purchase surrogate products like soda, water etc. after seeing their Advertisements

Never 27 54%

Occasionally 18 36%

Regularly 3 6%

Often 2 4%

TOTAL 50 100%

FIGURE 9: PURCHASE OF SURROGATE PRODUCTS

FINDINGS

Majority 54% of the respondents answered that they never buy the surrogate products,
36% of them buy occasionally, 6% regularly and 4% often purchase.

INFERENCE
It gives clear idea that surrogate ads don’t have any impact on sale of surrogate products.

Recalling the original products while looking at surrogate Advertisements

Definitely 13 26%

Most probably 19 39%

Occasionally 9 19%

Not at all 6 11%

Don't remember 5 5%

TOTAL 50 100%

FIGURE 10: BRAND RECALL

FINDINGS
From above figure we can see that 39% most probably recall original products, 19%
occasionally where as 26% of them definitely, 11% of the people come under the
category ‘Not at all’ and 5% don’t remember.

INFERENCE

People remember the Ads well and their brand names in surrogate ads are
effective in customers’ mind.

Seen any of the below surrogate advertisements

Yes 45 90%

NO 5 10%

TOTAL 50 100%

FIGURE 11: ADVERTISEMENTS SEEN

FINDINGS
 Most (90%) of the respondents have seen the surrogate ads and 10% haven’t seen them.

INFERENCE

This shows that public has seen the surrogate ads without knowing what they are.

Evaluating such Advertisements

Entertaining 7 14%

Boring 11 21%

Informative 8 17%

Misguiding 21 42%

Disturbing 3 6%

TOTAL 50 100%

FIGURE 12: EVALUATION OF SURROGATE ADS

FINDINGS
Out of 150 respondents, 42% treat them as misguiding, 21% refer them boring, 17%
regard them informative, 14% consider them entertaining, rest 6% regard them
disturbing.

INFERENCE

More areas to be explored as to make surrogate ads since it creates negative ideas in
the minds of the public as majority treat them to be misguided and boring.

Impact of these Advertisements on surrogate products

Definitely will not effect 4 8%

Probably will not effect 8 15%

Undecided 12 24%

Probably will effect 19 39%

Definitely will effect 7 14%

TOTAL 50 100%
 FIGURE 13: IMPACT OF THESE ADS ON SURROGATE PRODUCTS

FINDINGS

39% view that they ‘probably will effect’, 24% ‘undecided’, 15% ‘probably will not
affect’,
14% ‘definitely will affect’, 8% ‘definitely will not affect’.

INFERENCE

From the data we can conclude that surrogate do have an impact on surrogate products
to an extent.

Advertisement inducing to try the original product

Never 27 54%
Occasionally 4 7%

Sometimes 15 30%

Regularly 2 4%

Often 2 5%

TOTAL 50 100%

FIGURE 14: ADS INDUCE TO PURCHASE ORIGINAL PRODUCT

FINDINGS

Majority (54%) believe that these ads never induce them to try the product, 30%
sometimes, 7% occasionally, 5% often, 4% regularly

INFERENCE

Surrogate ads are not effective in nature as they don’t induce the public to purchase
the product.
Surrogate Advertisement of which product category is seen the most

Alcohol beverages 39 78%

Tobacco 8 15%

Cigarettes 3 7%

TOTAL 50 100%

FIGURE 15: PRODUCT CATEGORY OF SURROGATE ADS

FINDINGS

Most of the ads that are seen belong to alcohol beverages watched by 78% of the
respondents, 15% watch tobacco ads the most, rest 7% see the cigarette ads the
max.
INFERENCE

Most of the surrogate ads that are seen are of alcohol products.

Surrogate Advertisements of brands that are seen the most

Rajnigandha 13 25%

Wills lifestyle 1 2%

Kingfisher 9 19%

Bacardi 3 6%

Royal Challenge 14 28%

Imperial blue 5 11%

Mc Dowels 5 9%

TOTAL 50 100%

FIGURE 16: ADS OF BRANDS THAT ARE SEEN THE MOST

 FINDINGS

28% of people see the royal challenge ad and Rajnigandha ad comes next with 25%,
kingfisher 19%, Imperial blue 11%, Mc dowels 9%, Wills lifestyle 2%.

INFERENCE: Royal challenge ad reached out to most of the people.

Opinion on surrogate Advertisements

Ethical 11 22%

Unethical 21 41%

Should be banned 18 37%

TOTAL 50 100%
 FIGURE 17: OPINION ON SURROGATE ADS

FINDINGS

41% of the respondents consider these ads unethical, 37% agree to these ads to be
banned and 22% thinks they are ethical.

INFERENCE

This question is to know the public opinion on surrogate ads with respect to ethical
concerns and majority considers them to be unethical and think that they should be
banned.

HYPOTHESIS TESTING: CHI SQUARE ANALYSIS

1. Does age influence how often advertisements of alcohol/cigarettes/tobacco are

seen?

H0: Age doesn’t influence H1: Age does influence

OBSERVED FREQUENCY

AGE Regular Occasional Rare Not At All Don’t Remember TOTAL

16-20 21 43 21 4 3 92

21-40 11 21 5 3 3 43

41-70 1 8 2 2 2 15

TOTAL 33 72 28 9 8 150
EXPECTED FREQUENCY

AGE Regular Occasional Rare Not At All Don’t Remember TOTAL

16-20 20.24 44.16 17.173 5.52 4.9 92

21-40 9.46 20.64 8.026 2.58 2.29 43

41-70 3.3 7.2 2.8 0.9 0.8 15

TOTAL 33 72 28 9 8 150

TABLE 6: INFLUENCE OFAGE

CHITEST = 0.357823

p value > 0.05

0.357823 > 0.05

Inference: The p value of Chi-Square is 0.357823 which is more than 0.05. Hence the
Null hypothesis is accepted.

Analysis: It is clear from the above inference that age does not have influence on how
often the ads of alcohol/tobacco/cigarettes are seen.

2. Correlation between respondents view on banning of advertisements of alcohol,

tobacco products and their perception on surrogate advertisements.
H0: There is no positive
correlation H1: There is positive correlation

OBSERVED FREQUENCY

Ethical Unethical Should Be Banned TOTAL

Strongly agree 10 24 24 58

Agree 7 20 16 43

Neither agree/disagree 10 13 7 30

Disagree 5 3 7 15

Strongly disagree 2 1 1 4

TOTAL 34 61 55 150

EXPECTED FREQUENCY

Ethical Unethical Should Be Banned TOTAL

Strongly agree 13.14667 23.586 21.267 58

Agree 9.746667 17.486 15.767 43

Neither agree/disagree 6.8 12.2 11 30

Disagree 3.4 6.1 5.5 15

Strongly disagree 0.906 1.626 1.466 4

TOTAL 34 61 55 150

TABLE 7: CORRELATION

CHITEST = 0.286041 p value > 0.050. 286041 > 0.05

 Inference: The p value of Chi-Square is 0.286041 which is more than 0.05. Hence the
Null hypothesis is accepted.

Analysis: It is clear from the above inference that there is no positive correlation
between respondent’s view on banning of advertisements of alcohol, tobacco
products and their perception on surrogate advertisements

FINDINGS, CONCLUSION AND SUGGESTIONS

FINDINGS OF THE STUDY

1. To explain the concept of surrogate advertisements.

This study gives a thorough and detailed explanation of the concept of surrogate
advertising with the help of the secondary data where the basic concept, its existence in
Indian market, emergence and companies using surrogate advertisements, legal cases,
ethical concerns are stated with a clear description.

2. To study the consumers' awareness towards surrogate advertisements.

The study identifies that some of the respondents were not aware of the concept earlier, but
the questionnaire has enabled them to understand the concept, while some of the respondents
were aware of the concept earlier itself. From analysis of questionnaire it is found that even
though consumers lack the level of awareness, they are familiar with the concept of surrogate
advertising.
3. To evaluate the influence of surrogate advertisement on consumers’ buying decision.

By analyzing the primary data it is known that surrogate ads are successful in creating
brand recall of the hidden product in the advertisement and from chi square test it is
understood that these ads induce customers to buy the original banned product which
shows that the ads are effective. Surrogate ads need to be telecasted regularly through the
media of TV to have an impact and create a set in the minds of consumer.

4. To understand the consumer perception towards surrogate advertisements and its

products.

Questionnaire consisted of question where respondents were asked their opinion on

surrogate advertisements (if they are ethical/unethical/should be banned) and it is
concluded that majority of the public view surrogate advertisements as unethical
practices and agree that they should be banned. Viewers have negative insight towards
these ads as they are perceived to misguiding, boring.

CONCLUSION

Surrogate advertising is basically duplicating the brand image of a particular product and
then promoting a different product of the same brand. Ban on advertising of alcohol,
cigarettes, tobacco products gave rise to the concept of surrogate advertising in India. It
has become an ethical issue and has emerged as a loophole challenge over government
rules. Though this upcoming trend is not healthy for the young consumers & others in the
interest of the health of the community; Surrogate ads have proved themselves a
strapping& successful marketing strategy for the forbidden goods today.
Surrogate Advertising has been a powerful medium through which a particular brand
reached to its consumers. Although the original products have not been advertised on the
television still these brands enjoy a higher sales volume each and every year. The trend
followed by such ads could prove to be boon for big and established players as they result
in higher brand recall value, thereby helping them to push their banned products further.
Thus, surrogate advertising has played a vibrant role for these brands to sustain in the
market even after banning the advertisements of their original products. With government
now enforcing ban on surrogate advertisements, companies are turning to event
sponsorship, event organizing, corporate films and more and more innovative integrated
marketing communications strategies

This study was conducted to know the knowledge and perception of customers about
surrogate advertisements in the Greater Noida and Noida city and analyses the factors for
knowing the surrogate advertisement have any impact on the consumers buying behavior
for buy the surrogate products. It got understood surrogate advertisements are only
successful in creating brand recall of the hidden product in the advertisement. People do
not get much influenced by these products’ advertisements while making their purchase,
they just remind the brand existence. During the study, a sample of 50 respondents were
analyzed the knowledge of customer, their preferences and knowledge. The data was
collected by questionnaire method. The knowledge and awareness level is low, the main
reason for not knowing about most of surrogate advertisements are they are not exposed
to see that many times. Consumers are ethically concerned with respect to surrogate
advertisements.

4.3 SUGGESTIONS

 Frequency of surrogate advertisement is less. So, companies should

increase frequency for more effectiveness.

 Public has negative perception towards surrogate ads as they are considered
unethical, so companies have to find a way to reverse their view to positive.
 Creating a consumer awareness programs to give them required knowledge.

 There is nothing illegal in promoting of such products in the society provided that
the marketer doesn‘t violate the rules and regulations of the government framed in
the interest of the general public.

 The intention of marketers should be to promote their banned products but

not to harm the health of its consumers.
BIBLIOGRAPHY
WEB REFERENCES

1. http://www.academia.edu/16499143/SURROGATE_ADVERTISING_THE_
AW
ARENESS_AND_DOES_IT_HELPS_TO_PROMOTE_CORE_PRODUCT_
ITS ELF_IN_INDIAN_CONTEXT

2. http://www.mbaskool.com/business-articles/marketing/14340-
surrogate-advertising-hidden-yet-visible-products.html

3. http://www.ukessays.com/essays/marketing/surrogate-advertising-and-its-
impact-on-the-mind-marketing-essay.php

4. http://www.slideshare.net/shampm88/a-project-report-on-the-impact-of-
surrogate-advertisement-in-surrogate-products-at-ogilvy-mather

5. https://en.wikipedia.org/wiki/Surrogate_advertising

BOOKS REFERRED

1. Philip Kotler, Kevin Lane Keller. (2006).

Marketing Management. Pearson Education.12thEdition.
QUESTIONNAIRE
Q1) Media from which advertisements are seen the most:

a) Television
b) Print media
c) Internet

Q2) How often advertisements of alcohol/cigarettes/pan masala are seen:

a) Regular
b) Occasional
c) Rare
d) Not at all
e) Don’t remember

Q3) Knowledge about banning on advertisements of such products in India:

a) Yes
b) No

Q4) Requirement of advertisements of such products:

a) Yes
b) No
c) Maybe

Q5) Opinion on banning of advertisements of these products

a) Strongly agree
b) Agree
c) Neither agree/disagree
d) Disagree
e) Strongly disagree

Q6) Awareness about surrogate advertisements:

a) Yes
b) No
c) Maybe

Q7) Purchase surrogate products like soda, water etc after seeing their Advertisements

a) Never
b) Occasionally
c) Regularly
d) Often

Q8) Recalling the original products while looking at surrogate Advertisements

a) Definitely
b) Most probably
c) Occasionally
d) Not at all
e) Don't remember

Q9) Advertisement inducing to try the original product:

a) Never
b) Occasionally
c) Sometimes
d) Regularly
e) Often
Q10) Surrogate Advertisement of which product category is seen the most

a) Alcohol beverages
b) Tobacco
C) Cigarettes

Q11) Surrogate Advertisements of brands that are seen the most

a) Rajnigandha
b) Wills lifestyle
c) Bacardi
d) Royal Challenge
e) Imperial blue
f) MC Donald’s

Q12) Opinion on surrogate Advertisements:

a) Ethical
b) Unethical
c) Should be banned