“Advertising Ethics and viewer’s

perception towards Surrogate

Advertisements”

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 1

Table of content:
Executive Summary.............................................................................................................2
Introduction:.........................................................................................................................3
Problem Statement:............................................................................................................12
Research Objective:...........................................................................................................13
Sampling Plan:...................................................................................................................14
Research Design:...............................................................................................................14
Data Analysis:....................................................................................................................15
Findings:............................................................................................................................25
QUESTIONNAIRE...........................................................................................................26
Bibliography:.....................................................................................................................28

Executive Summary

Product advertising for liquor and cigarette companies is banned in the

country since 1995 by Cable Television Network (Regulation) Act. This ban is
now likely to be extended to advertising of extended brands. The very
purpose of banning liquor advertisements is defeated by surrogate
advertising.

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 2

A surrogate advertisements is one in which a different product is promoted
using an already established brand name. Such advertisements or
sponsorships help in contribute to brand recall. The different product shown
in the advertisement is called the “Surrogate.” It could either resemble the
original product or could be a different product altogether, but using the
established brand of the original product.
In India, the trend of surrogate advertisement gathered momentum with the
Cable TV Network Regulation Act, which prohibits tobacco and liquor
advertisements on TV channels.
Due to the ban, liquor companies focused more on promotions for brand
building. The ban on advertising of alcohol beverage products has severely
handicapped communication with consumers.
Companies with liquor brands are not advertising liquor products; instead
they have extended the equity of their brands into other fields. However as
the TV was the most effective medium of advertising, surrogate advertising
on TV became popular.

In the mean time, some producers entered new segments under the liquor
brand or advertised these products under liquor brand.
The surrogate advertisements from liquor companies intensified further
through sponsorships of movies, music shows, and other programs and
attracting youth.

In late 2001, the broadcasters began airing socially responsible

advertisements sponsored by liquor companies. By early 2002, surrogate
advertising of liquor brands had intensified like never before on satellite TV
channels.

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

whether really this surrogate ad helps to recall the original brand. Survey
was done comprising of 50 respondents of different age group, different
educational level and different class of society.

Questionnaire was asked to fill by them, and data analysis was done with the
help of SPSS package, findings have been given in the report.

Introduction:
Product advertising for liquor and cigarette companies is banned in the
country since 1995 by Cable Television Network (Regulation) Act. According
to Rule 7 (2) of the Act, no broadcaster is permitted to show advertisement
which promotes directly or indirectly promotion, sale or consumption of
cigarettes, tobacco products, wine, alcohol, liquor or other intoxicants, infant
milk substitution, feeding bottle or infant food. This ban is now likely to be
extended to advertising of extended brands.

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 3

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

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

the consumption habits of 431 million people in India and an indirect impact
on 275 million `aspirants' from the lower income group. Considering this and
realizing that nearly 50 per cent of the television owners have access to cable
channels, there is no doubt that the hidden call for alcohol consumption
behind the surrogate advertisements is not escaping the eyes of viewers in
the world's fourth highest liquor-consuming country. The very purpose of
banning liquor advertisements is defeated by surrogate advertising.

Surrogate Advertisements:
A surrogate advertisements is one in which a different product is promoted
using an already established brand name. Such advertisements or
sponsorships help in contribute to brand recall. The different product shown
in the advertisement is called the “Surrogate.” It could either resemble the
original product or could be a different product altogether, but using the
established brand of the original product. The sponsoring of
sports/cultural/leisure events and activities also falls under the purview of
surrogate advertising.

In India, the trend of surrogate advertisement gathered momentum with the

Cable TV Network Regulation Act, which prohibits tobacco and liquor
advertisements on TV channels. The liquor industry has intentionally blurred
the line between products, advertising `old wine' in a `new bottle,' only this
time with a soft-drink label.

By August 2002, the I&B Ministry had banned 12 advertisements and leading
satellite TV channels including Zee, Sony, STAR and Aaj Tak were issued
show cause notices to explain their rationale behind carrying surrogate liquor
advertisements.

Answering to the notices, Zee and STAR stopped telecasting the

advertisements, followed soon by Aaj Tak and Sony.

In addition, the I&B Ministry hired a private monitoring agency to keep a

watch on all the advertisements for violation of the Act.

These developments led to heated debates over the issue of surrogate

advertising by liquor companies being allowed on national media. Though the
companies involved came out strongly against the I&B Ministry’s decision,

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 4

they seemed to have no other choice, given the highly regulated nature of
the liquor business.

Analyst remarked that there was lot of hypocrisy underlying the government
policy. They said “on the one hand they allow these ‘socially bad’ products to
be manufactured and sold and then they deny the manufacturers the right to
propagate knowledge of their products in order to drive sales. If some thing
is bad and cannot be advertised, why allow it to be sold at all?”

Liquor producers spent heavily on advertising on the electronic media,

particularly TV. Though the broadcasters were bound by the 30 yrs old
advertising code, which stated that “No advertisements shall be permitted
which relates to or promotes cigarettes and tobacco products, liquor, wines
and other intoxicants,” the telecast of such product continued blatantly over
the years.

More over the satellite channels garnered about 50% of their revenue from
liquor and cigarettes advertisements. In the peak seasoned it gets almost
doubled.

Due to the ban, liquor companies focused more on promotions for brand
building. They started sponsoring events that projected the “glamour” of the
brands, like track racing, car rallies etc. for instance Shaw Wallace Co. one of
the leading liquor companies in India, conducted the Royal Challenge
Invitation Golf tournament, which became an annual event. Some companies
also promoted their product through corporate advertising, distributing free
gifts like Caps and T-Shirts with the brand name and using glow-signs
outside the retail outlets.

The ban on advertising of alcohol beverage products has severely

handicapped communication with consumers. The industry is naturally
compelled to make the best use of the channels and media of
communications still open to it. Companies with liquor brands are not
advertising liquor products; instead they have extended the equity of their
brands into other fields. Over a period of time these products have become
independent businesses for companies.

However as the TV was the most effective medium of advertising, surrogate

advertising on TV became popular. The liquor producers seemed to have
ensured that the ban was only on the paper.

In the mean time, some producers entered new segments under the liquor
brand or advertised these products under liquor brand. Most of the liquor
producers entered into packaged water segment, such as Kingfisher Mineral
water. McDowell used surrogate advertising by using its mineral water and
soda brands, which generated additional revenues for the company. In the
early 2001, SWC started marketing its range of golf accessories under the

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 5

liquor brand Royal Challenge. It also announced that India’s flagship Golfing
Event – the Indian open would be sponsored by the company till 2006.

The surrogate advertisements from liquor companies intensified further

through sponsorships of movies, music shows, and other programs and
attracting youth. For instance, Seagram’s Royal Stag was promoted by
sponsoring movie related activities and Indian pop music using the banner
Royal stag Mega Movies and Royal stag Mega Music.

In late 2001, the broadcasters began airing socially responsible

advertisements sponsored by liquor companies.

By early 2002, surrogate advertising of liquor brands had intensified like

never before on satellite TV channels. These advertisements attracted
criticism from various people. There were numerous other advertisements
selling music cassettes, CDs, water, clothing, fashion accessories and sports
goods --- many of them accused of being sexually provocative and offensive.
(Exhibit-1)

Exhibit-1

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 6

The Advertising Standards Council of India (ASCI) has clarified that as per its
code, the mere use of a brand name or company name that may also be
applied to a product whose advertising is restricted or prohibited is not
reason to find the advertisement objectionable provided the advertisement is
not objectionable and the product is produced and distributed in reasonable
quantities and the objectionable advertisement does not contain direct or
indirect cues for the product that which is not allowed to be advertised.
However the analyst opined that the ban could turn out to be advantages for
the domestic players. In March 2001, as per the commitment to the WTO
agreement, MNCs would have an unrestricted license to sell their products.
After the ban, these MNCs would not have access to the quickest and most
effective form of advertising --- the TV.

Some analyst argued that the ban would not affect the established domestic
players severely. It would only affect the new launches and new brand
building of these companies.

The ban was also expected to improve the margins for these players.

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 7

The latest television ad for “AC Black Apple Juice” epitomizes so many things
that are wrong with surrogate advertising in India.

Most of the surrogate advertising is done pretty blatantly with the “harmless”
product being nothing more than a front for advertising the “harmful” brand.
So you have various liquor/cigarette manufacturers resorting to ingenuous
ways to peddle their wares like,

Of course there are a very few brands which start off as a surrogate brand,
but over a period of time actually become full-fledged brands in themselves.
The “Wills Sport” clothing line from the manufacturers of “Wills” cigarettes is
one of those rare cases.
But on the whole, surrogate advertising is dedicated towards using an
insignificant, “harmless” product to increase/maintain awareness for their
primary “harmful” brand. And that’s not an easy task. For instance, how do
you portray the essence of a whiskey or vodka or a cigarette using a bottle of
bottled water or a pack of apple juice?

Similarly "HUM tum or mera Bagpiper". This Bagpiper club soda

advertisement, featuring cine celebrities, is similar to the earlier one for
Bagpiper whisky.
The advertisement comes with the same music and punch line as the one for
the popular liquor brand telecast before the ban on liquor advertisements.

Not easy. And guess who/what suffers when faced with this quandary?
1. Consumers - because we have to put up with the lameass, stupid
advertising that’s designed to sell booze/ciggies but pretends to be all
about water or apple juice! It’s like everyone knows what’s going on -
the manufacturers know what the real reason for the ad is, the
consumers know what’s really been advertised, and the government
knows that too. So why not either (i) do away with this wholesale
scam and just let them advertise all their stuff, or (ii) ban such
surrogate advertising?
2. Advertising - because ad agencies have to come up with silly ads
based on briefs from clients who are not interested in the surrogate
brand, but the primary brand. I agree some might consider it a worthy
challenge to do something like this, but from what I’ve seen of
surrogate advertising in India the output is pretty lame.

Surrogate advertisements are not only misleading, but also false and
dishonest in many cases. With surrogate advertising so widespread, this is
the moment to tackle the problem head-on.

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

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 8

i) Making transparent laws banning surrogate advertisements for different
products under a single brand name, by amending the Trade Marks Act, for
instance.

ii) Providing teeth to the Advertising Standards Council of India to enable it

take action against false and misleading advertisements, and keep a close
vigil over clever evasion of the law.

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

iv) Calling on the ASCI address complaints received from consumers against
surrogate advertisements and take appropriate actions immediately.

v) Creating a consumer awareness programme to help people understand the

negative impact of surrogate advertisements.

vi) Adopting strict laws to penalize those companies featuring surrogate

advertisements without any real existence of the product.

vii) 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.

If one believes that honesty is the best policy and truth ultimately gains, the
best policy would be to stand up strongly to the dishonest practices of
surrogate advertising.

Senior sources at IBF also said that the industry body had sent out show-
cause notices to a couple of channels regarding ads of certain alcohol and
tobacco products. Most channels have reportedly complied with the
Government panel’s directive to the extent that the ads of a liquor company
– that purportedly makes apple juice after drinking which anything can
happen (‘kuch bhi ho sakta hain’) – have been taken off air. (Exhibit 2)

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 9

Exhibit 2

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

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

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

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

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

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 10

... who too was doing the same with
her drink.

MVO: AC Black apple juice. Kucch bhi ho sakta hai.

Kucch bhi.

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 11

Problem Statement:

When the Advertising Standards Council of India (ASCI) withdrew its code to
regulate tobacco, liquor products etc. consumer activists were concerned
over the impact of the move.
The issue has taken a new twist with the Central Government deciding to ban
these product companies from sponsoring sports and cultural events. Liquor
or tobacco advertising in banned in India and hence companies that sell
these products have to resort to advertising their wares using less “harmful”
products which carry almost the same names and looks - surrogate
advertising.

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 12

Research Objective:

With keeping these in mind, the research will be conducted to solve the
following questions:
 What does this all have to do with the final consumer?
 What image does he carry of these products?
 Does he know that the advertisement which is shown is meant for
some other product?
 Does he think it is Right/Ethical?

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 13

Sampling Plan:

• Sampling Method: Conveniently Sampling.

• Sample Type: Target audience would be comprises of those who are

of the age group of 15 yrs and above. Educated, at least know about
what advertising is, have seen the surrogate advertisement.

• Sample Size: 50

• Sample Area: Borivali and Mira Road.

Research Design:

• Exploratory Research conducted by me included door to door

surveys, in the Royal College Campus and in the Dalmia School for
filling up the questionnaires.

• Instrument Design, in the form of questionnaire and interviews with

the respondents.

Limitations of Project

• Limited Sample Size (50)

• This study is restricted to the geographical limits of Mumbai.

• Limited period of survey

Importance of Study:

The study will help to find the people’s perception of surrogate

advertisements.

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 14

Data Analysis:

120

100
96

80

60

40

20
Percent

0
YES NO

seen advertisement on t.v

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

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 15

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

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

Count
seen advertisement of Total
cigrates or alcohol
YES NO
seen advertisement YES 41 7 48
on TV

NO 2 2

Total 41 9 50

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

and cigrates.

50

40 9

30 32

20

awareness of banned
10
3
NO
Count

6
0 YES
YES NO

seen advertisement of cigrates or alcohol

Out of the 41 respondent who have seen the ads of cigrates and alcohol 32
of them are aware of the fact that an advertisement of such product is
banned in India.

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 16

 30

29
28

26

24

22

20
20
Count

18
YES NO

advertisement requirement

29 of the respondent said that cigrates and alcohol do require

advertisements in this competitive world. But 20 of them where not agree to
this fact.

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 17

 40

36

30

20

13
10
Count

0
Missing YES NO

information of surrogate ads

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

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 18

 NO

32.0% Missing
4.0%

YES

64.0%

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

Information of surrogate ads * Product recall Cross tabulation Count

Product Recall Total

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

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

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 19

 view towards surrogate ads
ethical
22.92%
n=11 unethical
should be banned
33.33%
n=16 no comments

Pies show counts

8.33%
n=4 35.42%
n=17

on question of ethical issue of surrogate ads 35% said that surrogate ads are
unethical while majority of them constituting 33% refused or where not able
to give their opinion on the issue. 23% said they are required and they are
ethical while only 8% where in the opinion of banning the ad.

Advertisement requirement * view towards surrogate ads Cross tabulation Count

View towards Total

surrogate ads
ethical unethical should be banned no comments
Advertisement YES 8 11 1 8 28
requirement
NO 3 6 3 8 20
Total 11 17 4 16 48

The cross tabulation between the respondents who said that advertisement is
required for such product and ethical issue of surrogate ads shows that 11 of
them said that ads are required but surrogate ads are unethical to do that,
while 8 of them where agree that it is ethical to do the surrogate
advertisement.

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 20

 30

20 21

10
10
8 8
Count

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

viewtowards present ads

When respondent where asked how they find these ads 21 of them said, they
are entertaining while only 10 of them said, they are informative about
products.

ad appeal
YES
NO

Pies show counts

40.82%
n=20

59.18%
n=29

Strong view of 60% came from respondent that the surrogate ads do not
induce them to use the product; only 40% said that they are inspired by the
ad to use the product.

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 21

 28

27
27

26

25

24

23

22
22
Count

21
YES NO

family member consuming such product

For checking how do the respondent recall the original product they where
asked whether the respondent or any of his/her family member consume the
product, 27 of them said Yes, and 22 said No.

Family member consuming such product * product recall Cross tabulation Count

Product recall Total

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

19 respondent where those whose family member consume such product and
due to which they were able to recall the original brand while looking at the
surrogate ads whereas 13 of them where those whose member doesn’t use
the product but then also they recall the original brand.

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 22

Respondent’s profile:
30

23
20

13
10

7 7
Count

0
15-18 18-21 21-24 24 and above

age group of respondent

The above graph shows the age group of the respondent, 30 of them
belongs to the age group of 21 yrs. and above and 20 where below 21 yrs.

Age group of respondent * ad appeal Cross tabulation Count

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

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 23

 40

30
29

20

10 11
Count

6
4
0
< 10000 10000-100000 100000-500000 > 500000

family income per month

Family income was asked to checked that the surrogate ads effects the
buying habits or not majority of our respondent who have nothing to do with
the surrogate ads and who usually purchase the product belong to high class
of the society with their family income of 1,00,000/- and above.

30

26

20
Count

12 12
10
under graduate graduate post graduate

education level of respondent

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

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 24

Findings:

On analyzing the data following conclusions were drawn:

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

advertisement is requiring for such product in these competitive world.

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

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

4) Original Brand recall is high among the respondents.

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

6) 35% of the respondents where those under the age group of 21 yrs.,
they where attracted by the surrogate ads and were induce to use or
at least try the product.

7) Major of the respondent were also able to recall the original brand
either because these were used by them or any of their family
member.

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 25

QUESTIONNAIRE

1. Do you see Advertisements on television?

a) Yes b) No

2. Have you seen any advertisement of cigarettes or alcohol?

a) Yes b) No

3. Do you know that advertisement of such products is banned in India?

a) Yes b) No

4. Do you think that advertisement of such product is required?

a) Yes b) No

5. What would you say about banning of advertisement of these

products?
a) Is a right step b) No need of banning such ads c) Product should
be banned d) No comments

6. Do you know about surrogate advertisement?

a) Yes b) No

7. Do you recalled about the original product while looking at the

surrogate ads?
a) Yes b) No

8. What do you think that the surrogate ads are

a) Ethical b) Unethical c) Should be banned d) no comments

9. How will you rank the present advertisement?

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

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

a) Yes b) No

11. Does your any of the family member consume such products?
a) Yes b) No

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 26

 12.Which age group you belong to?
a) 15-18 b) 18-21 c) 21-24 d) 24 and above.

13.What is your approx. Family Income?

a) Less than 10,000/-
b) 10,000 – 1,00,000/-
c) 1,00,000 – 5,00,000/-
d) 5,00,000 and above.

14.What is your Educational level?

a) Under Graduate.
b) Graduate.
c) Post Graduate.

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 27

Bibliography:

Various website and articles including the following were

referred for project.

1) www.agencyfaqs.com

2) www.jivhathetongue.com

3) Close floodgates on surrogate ads- Deccan herald files.

4) The Hindu business line.

5) Indbazaar India consumer guide.

6) Framework convention alliance- Ban on surrogate

tobacco ads.

7) Advertising Express magazine- November 2002, issue

11, and volume-2.

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH 28