Consumer Perception Towards Surrogate Advertisement PDF

CONSUMER PERCEPTION TOWARDS SURROGATE ADVERTISEMENT
CAPSTONE PROJECT (PART –II) MGT 738 REPORT

“Consumer Perception Towards Surrogate Advertisement”
(Project Term February-April, 2013)
Submitted by:
Amrish Kumar Das (11112394)
Divya Sehgal (11112997)
Kashtina (11113050)
Manpreet Kaur (11111768)
Vishwadeep Singh (11114477 )
Under the Guidance of

Mr. Himanshu Sood (16655)
DEPARTMENT OF MANAGEMENT
LOVELY PROFESSIONAL UNIVERSITY
JALANDHAR NEW DELHI GT ROAD
PHAGWARA
PUNJAB
CAPSTONE PROJECT (PART –II) MGT 738 REPORT

“Consumer Perception Towards Surrogate Advertisement”
(Project Term February-April, 2013)
Submitted by:
Kashtina (11113050)
Under the Guidance of

Mr. Himanshu Sood (16655)
DEPARTMENT OF MANAGEMENT
LOVELY PROFESSIONAL UNIVERSITY
JALANDHAR NEW DELHI GT ROAD
PHAGWARA
PUNJAB
TO WHOME IT MAY CONCERN
This is to certify that the project report titled “CONSUMER PERCEPTION TOWARD
SURROGATED ADVERTISMENT” carried out by AMRISH KUMAR DAS, MANPREET
KAUR, KASHTINA, VISHWADEEP KUMAR, DIVYA SEHGAL a has been accomplished
under my guidance & supervision as a duly registered MBA student of the Lovely Professional
University, Phagwara. This project is being submitted by him/her in the partial fulfilment of the
requirements for the award of the Master of Business Administration from Lovely Professional
University.
Her dissertation represents his original work and is worthy of consideration for the award of the
degree of Master of Business Administration.
___________________________________
(Name & Signature of the Faculty Advisor)
Date:
DECLARATION
This is to certify that we are the student of department of Management, studying in

MBA(4th Semester), have undergoing research project on title “ Consumer perception
towards surrogate advertisement” for partial fulfilment of degree of Master of Business
Administration to Lovely professional University, Phagwara(Punjab). We solemnly declare
that the work done by us is original and no copy of it has been submitted to any other
university for award of any other degree/fellowship.
Name Registration Number
Kashtina (11113050)
Vishwadeep Singh (11114477)
Specialization:Marketing
Section: Q1R06
ACKNOWLEDGEMENT
“Appreciation can make a day, even change a life. Your willingness to put it into words is all
that is necessary.”
The joy of ingenuity!!!! This is doubtlessly what this project is about. Before getting to brass
track of things we would like to add a heartfelt word for the people who have helped us in
bringing out the creativeness of this project.
To commerce with things we would like to take this opportunity and humbly thank to Lovely
Professional University, Phagwara, for being appreciative enough by giving us an
opportunity to undertake this project.
We express our sincere gratitude to our faculty guide Mr. Himanshu Sood for her valuable
guidance, continuous support and cooperation throughout our project, without which the
present work would not have been possible.
We would also like to extend my deep regards towards all the faculty members of Lovely
Professional University, Punjab for helping me to complete my project successfully.
We are always beholden to our God, for always being with us and showing us the right
ways, our family members, our loved ones for consistently help us with encouragement and
criticism throughout the project work.
Everything can’t be mentioned but nothing is forgotten.
Kashtina (11113050)
LPU, PUNJAB
EXECUTIVE SUMMARY
The literal meaning of ‘Surrogate advertising' is duplicating the brand image of one product
extensively to promote another product of the same brand. Advertisement, as a popular
medium of paid communication has drawn public ire time and again for moving away from
the truth and the consumers ‘right to know' to providing false images. The masked creative
leave it to the consumers to read between the lines.
Surrogate advertising is done when the original product is not allowed to advertise itself on
mass media. In India, alcohol brands are not allowed to give advertisements on television, so
alcohol marketing firms use surrogate products like mineral water, soda, juice to hit
consumers with the brand name. The brand name of the alcohol product is the same as the
surrogate product.
Indian laws do not allow alcohol and alcohol companies to advertise, but a few of these
advertisers have extended their brands to other categories purely in an attempt to
advertise.
Surrogate advertising happens when the brand extension is seen as a guide for a product
that is almost non-existent in commercial terms.
Product advertising for liquor and cigarette companies is banned in the country since 1995
by Cable Television Network (regulation) act. This ban is now likely to be extended to
advertising of extended brands. The very purpose of banning liquor advertisement is
defeated by surrogated advertising.
In India, the trend of surrogated advertisement gathered momentum with the Cable TV
Network Regulation Act, which prohibits alcohol and liquor advertisement on TV channels.
Due to the ban, liquor companies focused more on promotions for brand building. The ban
on advertising of alcohol beverage products has severely handicapped communication with
consumers.
Companies with liquor brand are not advertising liquor product; instead they have extended
the equity of their brand into other fields. However as the TV was the most effective
medium of advertising, surrogated advertising on TV became popular.
In the mean time, some producers entered new segments under the liquor brand or
advertised these products under liquor brand.
The surrogated advertisement from liquor companies intensified further through

sponsorship advertisements from liquor companies intensified further attracting youth. In
late 2001, the broadcasters began arising socially responsible advertisement sponsored by
liquor companies. By early 2002, surrogated advertisement of liquor brands had intensified
like never before on satellite TV channels.
Keeping this thing in mind I decided to conduct a research to find out whether really this
surrogated ad helps to recall the original brand. Survey was done comprising of 103
respondents of different age group, different educational level and different class of society.
From the research we come to know that most influenced factor to consume alcohol is peer
pressure and advertisement. People whose income is below Rs 10000 spend more on
consuming alcohol. There are other factor which influence the consumption that are
occasion, work pressure, liquidation of contract, discounts and marketing factors.
Questionnaire was asked to fill by them, and data analysis was done with the help of SPSS
package, finding has been giving in the report.
TABLE OF CONTENTS
TITLE PAGE…………………………………………………………………………. i
TO WHOME IT MAY CONCERN ………………………………………………….ii
DECLARATION…………………………………………………………………….. iii
ACKNOWLEDGEMENT…………………………………………………………….iv
EXECUTIVE SUMMARY…………………………………………………………... v
TABLE OF CONTENTS …………………………………………………………….vii
LIST OF TABLES AND FIGURES…………………………………………………. x
Page No.
Chapter 1: Introduction ..............................................................................................1
1.1 Surrogate Advertisements ……..…………………………………….………………..3
1.2 Surrogated advertisement promoted by liquor companies……………….………..5
1.3 The Corporate Standpoint…………..……………………………………………..6
1.4 Surrogate Advertising: Emerging Trend………..…………………………………7
1.5 Consumer Psychographics and Surrogate Advertising………..…………………..9
1.6 Impact of surrogated advertisement on children………………………………….10
1.7 Issues for concern…………………………………………………………………11
1.8 Consumer reaction toward surrogated advertisement……………….……………11
Chapter 2: Legislative Measures …………..………..……………………………...13

2.1 Legislative Measures………………………………………………….……………………………………….14
2.2 Advertising Standard Council of India (ASCI) code………………………..…………….……….15
Chapter 3 : Literature Review ………..………………………………..……..…….20
3.1 Introduction.............................................................................................................21
Chapter 4 : Objectives and Need of Study ……………………………………...…24
4.1 Objective of study………………………………………………………………...25
Page No.
4.2 Need of the study………………………………………………………………25
Chapter 5 : Research Methodology ………………………………………..……26
5.1 Nature of the Research Design …………………………………………..…….27
5.2 Data Collection………………………………………………………………...27
5.2.1 Primary Data ………………………………………………………...27
5.2.2 Secondary Data………………………………………………………27
5.3 Sampling Method………………………………………………………………27
5.4 Sample Type ………………………………………………………………......27
5.5 Sample Size……………………………………………………………………27
5.6 Sample Area…………………………………………………………………..27
5.7 Tools Uses for Analysis ……………………………………………………...27
Chapter 6: Data Analysis ………………….………………………………..….28

6.1 Factor Analysis Results ………………………………………………………29
6.1.1 KMO and Bartlett's Test……………………………………………29
6.1.2 Total Variance Explained…………………………………………..30
6.1.3 Component Matrix……………………………………………….....31
6.1.4 Rotated Component Matrix………………………………………...32
6.1.4.1 Analysis on Rotated component Matrix……………….....32
6.2 Analysis on the questionnaire………………………………………….....34

6.2.1 Consumer consumption patter on following factors……………...34
6.2.1.1 Consumption in six months……………………………….34
6.2.1.2 Consumption rate in month ………………………………35

Page No.
6.2.1.3 Timing preferred for consumption………………….…..35
6.2.2 Parameter influence to buy alcoholic product………………….36
6.2.2.1 Due to monthly income………………………………....36
6.2.2.2 Money spend on alcoholic product …………………….36
6.2.2.3 Influence due to watching surrogated ads in day………37
6.2.2.4 Influencer to buy alcoholic product……………………37
6.2.3 Consumers perception toward legislative measure on surrogate38
6.2.3.1 Perception on necessity of advertisement………………38
6.2.3.2 Tax and other legal barrier on alcoholic products………38
6.2.3.3 Opinion about banning………………………………….39
6.3 Findings..…………………………………………………………………....40
Chapter 7: Conclusion & Suggestions.…………….…………………………41

7.1 Conclusion………………………………………………………………….42
7.2 Suggestions………………………………………………………………....43
7.3 Limitations of the study……………………………………………………44
8. References/Bibliography………………….………………………………………………………45
Annexure………………………………………………………………………47
Annexure A: Sample of Questionnaire ……………………………………….48
LIST OF TABLES…… ………………………………..…………………..Page No:
Table 1.1: Companies following surrogated advertisement..……….................4
Table 6.1.1: KMO and Bartlett’s Test………………………………………….29
Table6.1.2:TotalVariance explained…………………………………………...30
Table 6.1.3: Component Matrix………………………………………………..31
Table 6.1.4: Rotated Component Matrix……………………………………….32
LIST OF FIGURES………………….……… …………………………...Page No:

Figure 1.4: Surrogated ads. :Print advertisements ………………………………………..8
Figure 1.8: Consumer attraction created by surrogated advertisement………..12
Figure 2.2(a): Kingfisher brand promotional advertisement………………………….17
Figure 2.2(b): Brand promotional advertisement by different groups…………..18
Figure 6.1.2: Scree plot showing factors variables………………………………………...31
Figure 6.2.1.1:Consumption in six months …………………………………………………….34
Figure 6.2.1.2:Consumption rate in month…………………………………………………….35
Figure 6.2.1.3: Timing preferred for consumption………………………………………….35
Figure 6.2.2.1:Monthly Income……………………………………………………………………..36
Figure 6.2.2.2: Money spend on alcoholic product………………………………………..36
Figure 6.2.2.3:Influence due to watching surrogated advertisements in day..37
Figure 6.2.2.4: Influencer to buy alcoholic product……………………………………….37
Figure 6.2.3.1 Perception on necessity of advertisement…………………………….38
Figure 6.2.3.3: Opinion about banning………………………………………………………….39

Chapter 1
Introduction to Surrogate
Advertisements
Introduction
Advertisements have a strong influence in our life. We like them because they provide
information and create awareness about the market. Our decisions whether to buy a product
or not, is often completely influenced by the promotional activities of the companies
concerned. Therefore, due to the widespread adverse impact that advertisements of unhealthy
products like alcohol, liquor can cause, Indian government has always endeavored to curb or
at least restrict rampant advertisements of such products by appropriate legislations, orders
and directives.
Product advertising for liquor and cigarette companies is banned in the country since 1995 by
Cable Television Network (regulation) Act. According to rule 7(2) of the act, no broadcaster
is permission to show advertisement which promotes directly and indirectly promotion, sale
or consumption of cigarettes, alcohol products, wine, alcohol and liquor or other intoxicants,
infant milk substitution, feeding bottle or infant food. This ban is now likely to be extended to
advertising of extended brands.
In June 2002, the Indian Information and Broadcasting (I&B) Ministry served notices to
leading television broadcasters to ban the telecast of two surrogate’s ads of liquor brands
McDowell No. 1 and Gilbey’s Green Label. The Ministry also put some other brands ---
Smirnoff Vodka, Hayward’s 5000, Royal Challenge Whiskey and kingfisher beer on a
“watch list.” The surrogates used by these advertisements ranged from audiocassettes, CDs,
perfumes to golf accessories and mineral water.
A market survey in 2001 revealed that advertising has a direct influence on the consumption
habits of 431 million people in India and an indirect impact on 275 million ‘aspirants’ from
the lower income group. Considering this and realizing that nearly 50 percent of the
television owners have access to cable channels, there is no doubt that the hidden call for
alcohol consumption behind the surrogates advertisements is not escaping the eyes of viewers
in the world’s fourth highest liquor-consuming country. The very purpose of banning liquor
advertisements is defeated by surrogate advertising.
1.1 Surrogate Advertisements:

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

advertisement which is ostensibly for another brand or product. Surrogate advertising is
prominently seen in cases where advertising a particular product is banned by law.
Advertisement for products like cigarettes or alcohol which are injurious to heath are
prohibited by law in several countries and hence these companies have to come up with
several other products that might have the same brand name and indirectly remind people of
the cigarettes or beer bottles of the same brand. Common examples include Fosters and
Kingfisher beer brands, which are often seen to promote their brand with the help of
surrogate advertising.
Brands perhaps are the most valuable assets an Organization can have. Brands create an
image for themselves through the constant attention and nurture given to them by the
organization. Over a period of time some of the brands become the bread winners for the
organizations. In case of profit organizations to call them bread winners is not enough; they
need to be called gold winners. Any damage to the reputation of these brands can really
change the scenario for the organization.
If the brand is a Corporate brand assuming the role of an umbrella brand the dependence of
the organization is hundred percent on the brand as the organization is itself the brand. Since
the brands are associated with tangible and intangible benefits, the logo and the trademark,
they require a legal watch as well, and need to always stay within the frame work of business
regulations and law in many areas like safety to consumer, consumer’s interest, making
claims, any side reactions and information regarding the impact the brand consumption can
have.
Corporations spend huge sums on the promotion of brands in many ways. One popular and
widely practiced method is advertising which is very expensive as it reaches huge numbers.
Even when an organization spends about five percent of the sales revenue on advertising a
brand the amount in absolute terms is substantial. Having nurtured the brand for years if any
regulation bans advertising the brand in public interest it can be a serious problem for the
brand owner. How to keep the brand in the minds of the consumer becomes a major issue.
It is to be expected that the brand owner will not just surrender but will need to find a creative
alternate way to keep reminding the consumer. One such way is to create another product that
can be advertised legally and name the product with the same name of the brand that cannot
be advertised. These brands have been called surrogate brands because they are growing in
the womb of another mother.
We find in the market several such brands, for example mineral waters and sodas carrying the
banned alcoholic drink names. Retail outlets are being given the names of cigarette and
alcohol products. This is done by the owners of the brands to make sure that the consumer
recollects the brand that could not be advertised and develops an urge to consume the brand.
Governments are worried about this practice as there is a possibility that the very mention of
the name may raise the urge with in an individual to consume an alcoholic product or a
alcohol product which is not in the interest of the public health policy. So, often Governments
get into a dilemma on how to deal with such products.
Companies following surrogated advertisement:

Legitimate business Surrogated advertisement
Mc Dowell’s Walt whisky Mc Dowell’s soda/water
RadicoKhaitan’s 8pm whisky Radicokhaitan’s water
Hayward’s 500 beer Hayward’s soda/water
Derby special Derby special soda
Bacardi liquor Bacardi blast cds and cassettes
Bagpiper liquor Bagpiper soda and cassettes
Four square cigarettes Four square white water rafting
Kingfishers beer Kingfisher bottled drinking water
Smirnoff vodka Smirnoff cds and cassettes
Table 1.1: Companies following surrogated advertisement.
1.2 Surrogated advertisement promoted by liquor companies:

The liquor industry is a prominent player in this game. Few surrogate advertisements shown
in print, electronic and outdoor media are - Bagpiper soda and cassettes & CDs, Hayward’s
soda, Derby special soda, Gilbey’s green aqua, Royal Challenge golf accessories and mineral
water, Kingfisher mineral water, White Mischief holidays, Smirnoff cassettes & CDs,
Imperial Blue cassettes & CDs, Teacher's achievement awards etc. These products bear
exactly the same name and logo, which we had seen earlier in liquor advertisements. It was
little surprising to know that liquor giants like McDowell's and Seagram's have entered into
new segments like cassettes &CDs, mineral water, sports accessories etc. Later it was found
that the basic aim of these surrogate advertisements was to promote their liquor brands like
beer, wine, vodka etc. This brand extension is an act of bypassing the advertisement ban. A
similar trend is followed by companies making Cigarettes, Pan Masala and Gutkha. Few
examples of surrogate advertisements in this category are - Red & White bravery awards,
Wills lifestyle, Four Square white water rafting, Manikchand awards etc. Though a ban has
been imposed on advertisements endorsing alcohol products, this industry has resorted to
surrogate advertising a few years ago. The Health Ministry has recently implemented the
alcohol control legislation which will imply a complete ban on advertisements and all direct
& indirect promotional campaigns for alcohol products. In 2001, Indian Alcohol Company
(ITC) had voluntary withdrawn the Wills Sports sponsorship of the Indian cricket team when
the Government had first proposed a ban on advertising through legislation.
1.3 The Corporate Standpoint:

The industry segment has its own standpoint in defense. The liquor lobby claims that
everything is in accordance to the Government regulations. "If a brand has equity, why
shouldn't it be allowed to advertise? Also, brand extension is an industry practice adopted by
different product categories, "comments Alok Gupta of UB group.”When we advertise our
products, we follow all the guidelines," declares president, sales & marketing, Radico
Khaitan. They clarify that they have stopped showing liquor advertisements and they are free
to use the brand name for any other products. Even the Confederation of Indian Alcoholic
Beverages Companies (CIABC) advertising code maintains that advertisement of products
(real brand extensions) by the liquor industry must be allowed. From a layman's point of
view, their claims seem to be justified. But this is a clear example of taking advantage of the
loopholes. There is a point to ponder. When they have stopped showing liquor
advertisements, why the same brand name and logo is used to promote products like
cassettes& CDs or mineral water? They could have assigned different brand names. It seems
they have a hidden agenda of highlighting the liquor or alcohol brand. A similar tussle over
the issue of surrogate advertisements in politics was raised in April 2004 on the eve of Lok
Sabha elections. Complaints of slanderous and offensive advertisements were raised by two
major political parties - BJP and Congress against each other. The issue became so serious
that the Supreme Court had to interfere in this affair. Finally on 13 April 2004, the Court
gave a verdict to curb smear advertisements on electronic media. By appointing Election
Commission as referee, the court has tried to put an end to surrogate advertising in politics.
According to the Cable Act under the ministry of information and broadcasting,- "no
broadcaster is permitted to show an advertisement which promotes directly or indirectly, sale
or consumption of cigarettes, alcohol products, wine, alcohol, liquor or other intoxicants…"
Now a new clause has been added under the act stating that "any advertisement for a product
that uses a brand name which is also used for cigarette, alcohol product, wine, alcohol, liquor
or any other intoxicant will not be permitted". Finally, in April 2005, the ministry resorted to
a ban on surrogate advertisements of liquor and alcohol products on television. After this
directive, the surrogate advertisements are seldom shown on television. Now the companies
will have to reframe their policies. But who will take care of print and outdoor media is not
certain.
According to ASCI (Advertising Standards Council of India), surrogate advertisements are
harmful. Now it will be up to the ASCI to take up the matter with the respective companies.
1.4 Surrogate Advertising: Emerging Trend

A recent series of hoardings led me to delve into a very unique trend specific to Indian
advertising – Surrogate advertising a trend which is fast catching up and has suddenly
attracted a lot of innovative and creative brains around the country. Reason, on one hand, the
govt cannot allow public advertising of liquor companies. But ironically, liquor and cigarette
sales are the biggest revenue generators in terms of taxes and duties on the so items. That’s
why an overt acceptance of the marketing in these sectors is not legally acceptable. This has
led to one of the biggest ironies of the country – Sales of these items are not banned, yet
advertising on the same has strictly been prohibited! Talking about the market size and the
different segments would not be pertinent to the discussion (for the records, it is more than
100 million cases in India!). But what is the significance of this trend vis-à-vis the entry
points for new players and sustainability of existing ones? Multinationals which would like to
explore the Indian markets find the double-faced attitude of the government as an
impediment to their ventures. Since no policy has been formalized in this regard, foreign
companies continue to be sceptical about their entry.
Domestically, it has led to innovative ways and methods of spending on different media
for Advertising from the companies, where companies do more of a brand building exercise
than direct advertising. Be it promotions for brand building, or sponsoring events that can be
mapped with the “showbiz” and “glamour” of the brand, advertisers don’t leave many
avenues to enhance their visibility. The rule says “Advertisements which lead to sale,
consumption and promotion of liquor should not be allowed.” So, in Surrogate Marketing, a
product which is different from the main product is advertised, and has the same brand name
as the main product. The product is called as “surrogate” and advertising through this channel
is called “Surrogate Advertising”!
It may include CDs, water, clothing, Apple juice, fashion accessories, sports goods or even
events sponsoring! These gimmicks, in turn, help the consumers build a strong equity of the
parent brand, and with the enhanced visibility, the equity of the brand would definitely
become higher! Liquor companies were forced to look at innovative ways of building their
brands. With an objective of enhancing brand recall, companies either engage into “surrogate
advertising” or displaying “socially responsible messages”. Again, out of the two viable
options for Advertising, Surrogate Advertising has been surrounded by controversies and
legalities for a long time. There is no clear policy from the government for obvious reasons
and companies do not want to risk their investments on Ads, which might not be screened
after a while. So, a safer choice available where companies can exercise their grey cells is
advertising “socially responsible” messages. Take a look at these billboards which I noticed
on a private flyover a few days back. There is also another print ad in continuation with the
Johnnie Walker billboard.
Figure 1.4: Surrogated ads. :Print advertisements
Must say, this is one of the best elements of innovation that I have seen so far. Though it
would be too premature to attribute this to the industry per se, it has become imperative for
the companies to change their line of thought completely, to work around the system. What
are the other practices companies are looking at?
(a) Companies are getting involved in Sponsorships of events and have launched theirown
awards for bravery or lifetime achievements.
(b) Internet advertising has become a lucrative area which has so far not been delved into.
The medium holds a lot of potential to enhance visibility, and companies have lately realized
that.
(c) Catchy jingles have become the norm of the day to ensure that their brands have a high
brand recall.
(d) With restrictions in other marketing elements – in terms of pricing and distribution,
companies have ventured into another important element – Packaging. Innovative packaging
makes their brands stand out of the clutter, and most of the Multinationals are revisiting this
element in their brand portfolio. Though the industry is not healthy for the young consumers,
some processes and laws need to be formalized and established in the system. Else,
innovative workarounds and arm-twisting of laws would be the norm of the day for the entire
liquor industry.
1.5 Consumer Psychographics and Surrogate Advertising:

'Surrogate advertising' is one of the emerging ethical issues in advertising in India. This is
used as a strategy to advertise products like liquor or alcohol - the advertisement of which
otherwise, is banned in our country. It relates to advertising by duplicating the brand image of
one product extensively to promote another product of the same brand. When consumers look
at these advertisements, they associate these with banned products. Hence, such products are
indirectly advertised, and therefore, influence their behaviour. There is no doubt that the
hidden call for alcohol consumption behind the surrogate advertisements is not escaping the
eyes of viewers of the world's fourth highest liquor consuming country. Hence, surrogate
advertising defeats the very purpose of banning liquor advertisements. The central issue of
the ethical discussion in the present study is regarding the attitude of targeted consumers
towards the practice of surrogate advertising vis-à-vis their psychographic profile towards
advertising in general. The psychographics of the target audience are important to be
discussed since they are the final evaluators of advertising. The study concludes that
surrogate advertising is not perceived positively by the various sections of the society.
Though there were some positive perceptions found for this practice, on the whole, the
attitude of most of the targeted consumers, i.e., the respondents were more dominating
towards the negative side for the surrogate advertising and they consider it to be an unethical
practice. The ethical perception of the targeted consumers affect the acceptability of surrogate
advertisements and hence, the attitude of the consumers towards it, with majority of these
consumers considering it an immoral and unethical. The implications thus, are left for the
advertisers to modify and redesign their advertising strategies in accordance to the consumer
psychographics, so that they can find a way out which is more ethical and positive for the
society or their target market rather than resorting to surrogate advertising.
1.6 Impact of surrogated advertisement on children

Each day 55,000 children in India start using alcohol, Gutkha the chewable alcohol is aimed
at the younger generation of the country. But you may wonder how these companies manage
to reach the minds of these children when they are not allowed to advertise these products.
After the ban the companies opened their doors to surrogate advertisement, an advertisement
has the logo or brand of another company advertised within it. Let’s take a look at this report
done by a French channel on surrogate advertisements done in India. One of the biggest
surrogate advertisement market is the film Industry Bollywood, in 2004 and2005, 89% of all
the released movies had smoking scenes in them. Below is a small documentary on smoking
in movies, with interesting statistics on the current scenario in India with regards to smoking.
According to research done by the Salaam Bombay Foundation, 3260 children between the
age of 12 to 17 years from municipal and private schools were asked to fill out a self-
administered questionnaire.
Players in liquor industry – Kingfisher beer, airlines and mineral water, Royal Challenge
golf accessories and mineral water, Bagpiper soda and cassettes & CDs, Hayward’s soda,,
White Mischief holidays, Smirnoff cassettes & CDs, Teacher's achievement awards, Imperial
Blue cassettes & CDs etc. Legislative Measures: The Cigarettes & Other Alcohol Products
(Prohibition of advertisement and regulation of trade and commerce, production, supply and
distribution) Act, 2003:This Act was enacted to implement measures to ensure that effective
protection is provided to non-smokers from involuntary exposure to alcohol smoke and to
protect children and young people from being addicted to the use of alcohol; It was also
considered expedient to prohibit the consumption of cigarettes and other alcohol products
which are injurious to health with a view to achieving improvement of public health in
general as enjoined by article 47 of the Constitution; Section 3(a) of the said act defines
‘advertisement’ as including: ‘any visible representation by way of notice, circular, label,
wrapper or other document and also includes any announcement made orally or by any means
of producing or transmitting light, sound, smoke or gas.
Interpretation: Surrogate advertisements clearly come under the definition as it involves

making the alcohol labels clearly visible to people through other products by the same name.
Moreover the public is always reminded orally of the alcohol’s brand name through the
advertisements of such other products. So such advertisements are liable to be a subject
matter of this Act and therefore subject to its restrictions. Section 5(1) of the Act states: ‘No
person engaged in, or purported to be engaged in the production, supply or distribution of

cigarettes or any other alcohol products shall advertise and no person having control over a
medium shall cause to be advertised cigarettes or any other alcohol products through that
medium and no person shall take part in any advertisement which directly or indirectly
suggests or promotes the use or consumption of cigarettes or any other alcohol products.
Section 5(3) of the Act states: ‘No person, shall, under a contract or otherwise promote or
agree to promote the use or consumption of— (a) Cigarettes or any other alcohol product;
or (b) Any trade mark or brand name of cigarettes or any other alcohol product in exchange
for a sponsorship, gift, prize or scholarship given or agreed to be given by another person.
Demerit: This section restricts advertisement, promotion of alcohol products for direct/
indirect pecuniary benefit. It is narrow since it doesn’t take within its ambit the scope of
promoting alcohol through brand extension and sponsorships.
1.7 Issues for concern:

In a significant policy shift, the government has in principle decided to permit non-liquor and
non-alcohol advertisements of Kingfisher and Wills brands on TV channels. This is despite
the fact that the Cable TV Network Rules, 1994 Rule 7(2) (viii) prohibits direct or indirect
consumption, sale or production of cigarettes, alcohol products, wine, alcohol, liquor or
other intoxicants. Recently, the Information and broadcasting ministry has assured the people
that all surrogate advertisements would soon be barred from appearing in any form of media
and stricter measures of surveillance to identify such advertisements would be put in place.
Manufacturers further reduce the chances of young people failing to get the message by
sponsorship of sports teams and events and music concerts having particular appeal to the
young.
1.8 Consumer reaction toward surrogated advertisement:

For the Corporation that owns such brands, the worry is not limited to how the regulatory
bodies react but how the public, the consumer would react. Any serious ethical protest from
consumer side can damage the brand more than what the Government could do as the
consumer would dismiss the brand and the related products from his mind set and perhaps
develop a negative attitude towards the Organization itself. This can have a domino effect on
the other products that come from the same organization.
Figure 1.8: Consumer attraction created by surrogated advertisement
The strategy of using the brands name on other products that can be advertised seems to be
working. It appears that the consumer is liberal and ignores that the name can be given to
other products without causing any damage or the consumer is unaware of the history of the
brand's name. The products that can be advertised but named after the products considered
injurious and harmful to health and banned from advertisements in some countries seem to
assume a "transformational" role. That is, they are peace ambassadors and subconsciously
mitigate the public hostility towards the other product.
There is no conclusive evidence with empirical data that proves that the strategy serves the
purpose of reminding the aware consumer of the banned alcoholic or alcohol or similar
products and motivates them to consume it. But common sense tells us that it possibly does.
Chapter 2
Legislative Measures
2.1 Legislative Measures:

The Cigarettes & Other Alcohol Products (Prohibition of advertisement and regulation of
trade and commerce, production, supply and distribution) Act, 2003: This Act was enacted to
implement measures to ensure that effective protection is provided to non-smokers from
involuntary exposure to alcohol smoke and to protect children and young people from being
addicted to the use of alcohol;
It was also considered expedient to prohibit the consumption of cigarettes and other alcohol
products which are injurious to health with a view to achieving improvement of public health
in general as enjoined by article 47 of the Constitution;
Section 3(a) of the said act defines ‘advertisement’ as including: ‘any visible representation
by way of notice, circular, label, wrapper or other document and also includes any
announcement made orally or by any means of producing or transmitting light, sound, smoke
or gas’
Interpretation: Surrogate advertisements clearly come under the definition as it involves

making the alcohol labels clearly visible to people through other products by the same name.
Moreover the public is always reminded orally of the alcohol’s brand name through the
advertisements of such other products. So such advertisements are liable to be a subject
matter of this Act and therefore subject to its restrictions.
Section 5(1) of the Act states: ‘No person engaged in, or purported to be engaged in the
production, supply or distribution of cigarettes or any other alcohol products shall advertise
and no person having control over a medium shall cause to be advertised cigarettes or any
other alcohol products through that medium and no person shall take part in any
advertisement which directly or indirectly suggests or promotes the use or consumption of
cigarettes or any other alcohol products.’
Section 5(3) of the Act states: ‘No person, shall, under a contract or otherwise promote or
agree to promote the use or consumption of—
(a) Cigarettes or any other alcohol product; or
(b) Any trade mark or brand name of cigarettes or any other alcohol product in exchange for
a sponsorship, gift, prize or scholarship given or agreed to be given by another person.’
Demerit: This section restricts advertisement, promotion of alcohol products for direct/
indirect pecuniary benefit. It is narrow since it doesn’t take within its ambit the scope of
promoting alcohol through brand extension and sponsorships.
The Ministry of Health and Family Welfare made certain amendments to the above act in
2005, stating that the word ‘indirect advertisement’ mentioned in Section 5(1) would mean:
• The use of a name or brand of alcohol products for marketing, promotion or advertising
other goods, services and events;
• The marketing of alcohol products with the aid of a brand name or trademark which is
known as, or in use as, a name or brand for other goods and service;
• The use of particular colors and layout and/or presentation those are associated with
particular alcohol products; and
• The use of alcohol products and smoking situations when advertising other goods and
services.
Merit: It’s a comprehensive definition and the amendment has taken care of the legal lacuna
pointed out above.
2.2 Advertising Standard Council of India (ASCI) code:

ASCI are a voluntary self-regulation council, registered as a not-for-profit Company under
section 25 of the Indian Company Act. It’s formed to safeguard against the indiscriminate use
of advertising for the promotion of products which are regarded as hazardous to society or to
individuals to a degree or of a type which is unacceptable to society at large.
Section 6 of the said code states: ‘Advertisements for products whose advertising is
prohibited or restricted by law or by this code must not circumvent such restrictions by
purporting to be advertisements for other products the advertising of which is not prohibited
or restricted by law or by this code. In judging whether or not any particular advertisement is
an indirect advertisement for product whose advertising is restricted or prohibited, due
attention shall be paid to the following:
(a) Visual content of the advertisement must depict only the product being advertised and not
the prohibited or restricted product in any form or manner.
(b) The advertisement must not make any direct or indirect reference to the prohibited or
restricted products.
(c) The advertisement must not create any nuances or phrases promoting prohibited
products.’
Interpretation: It specifically prohibits surrogate advertising and lays down guidelines

which qualifies it to be so, namely
• Whether the legal product under a alcohol brand, sought to be advertised, has been
produced in reasonable quantities or not.
• Whether in the disputed advertisement, there are any direct/indirect clues to the promotion
of the restricted product i.e. alcohol or not.
The Prohibition of Publication or Telecast of Vulgar, Obscene and Surrogate Advertisements

and Re-mix songs by Print and Electronic Media Bill, 2004:
Though the bill hasn’t yet seen the light of the day, the broad framework has been laid down
by the legislature and given to the executive to frame the details under delegated legislation.
It was initiated to provide for ‘total ban on the publication of surrogate advertisements
showing substitutes of products, particularly of liquor and alcohol products by magazines,
newspapers, etc. and telecasting of surrogate advertisements so as to protect the Indian
culture and values.
For the first time, a legal definition of ‘surrogate advertisements’ has been attempted through
Section 2(d), which states: ‘an advertisement which shows a substitute product in the guise of
the real one which otherwise cannot be legally advertised through the print and electronic
media.’
Section 3 prohibits the publication by print media and telecasting of surrogate advertisements
and provides that violators of the said provisions shall be punished accordingly.
Issues for concern:

• In a significant policy shift, the government has in principle decided to permit non-liquor
and non-alcohol advertisements of Kingfisher and Wills brands on TV channels. This is
despite the fact that the Cable TV Network Rules, 1994 Rule 7(2) (viii) prohibits direct or
indirect consumption, sale or production of cigarettes, alcohol products, wine, alcohol, liquor
or other intoxicants.
Recently, the Information and broadcasting ministry has assured the people that all surrogate
advertisements would soon be barred from appearing in any form of media and stricter
measures of surveillance to identify such advertisements would be put in place.
• Manufacturers further reduce the chances of young people failing to get the message by
sponsorship of sports teams and events and music concerts having particular appeal to the
young.
EXAMPLE:
Kingfisher is also the brand-name of an Indian alcohol (beer). Kingfisher alcohol existed
long before the Kingfisher airline came into existence. Similarly Indian Alcohol Company's
(ITC) had their flagship brand cigarette `Wills' and then opened Wills Lifestyle stores
(readymade garments) across India when Indian alcohol control Acts tightened the clamp on
alcohol advertising.
Figure 2.2(a): Kingfisher brand promotional advertisement.

Another alcohol brand `Royal Challenge' (beer) sponsors a sport-event (Indian Premier
League matches) which is broadcasted on Sony television. This time, Sony TV is likely not to
screen such programmes since alcohol or alcohol sponsorship of sport events is also banned
in India.
Figure 2.2(b): Brand promotional advertisement by different groups

Enforcing such alcohol and alcohol advertisement bans are in extreme interest of the people,
public health and the country's welfare. Studies have proven how alcohol and alcohol ads use
glamour and lifestyle imagery to promote their products and catch youth's fancy for their
capital interests. The deadly health-hazards of alcohol and socio-economic disaster which
alcohol spells on families are a reality we deal with in our day-to-day lives.
However advertisement firms are going to lose Rs 250 crore of the revenue, which was
earlier coming from alcohol and alcohol ads. They ask: "Why the [alcohol and alcohol
advertisement] is clamp not extended to other media, such as sponsored ground events,
outdoors, point-of-purchase advertising etc., which will reap our losses?"
The question is indeed very valid. These bans on alcohol and alcohol advertisement should be
extended to sponsored ground events, outdoors, point-of-purchase advertising etc as well.
Actually the Cigarette and other Alcohol Products Act (2003) does extend the ban on alcohol
advertising (direct, indirect and surrogate) to sponsored ground events, outdoors, but allows
alcohol advertising at the point-of-purchase with conditions: the size of the board is fixed by
law and also the content: alcohol advertisements on point-of-sale cannot display any graphic
or picture or any brand name, and should only mention the kind of alcohol being sold there
with 25% of board area dedicated to health warning (Alcohol causes cancer or Alcohol kills)
in local language.
In the year 2000, the government formed a committee headed by the then additional secretary
of the Information and broadcasting ministry, which included prominent broadcasters to look
into the issue. The committee recommended that products with real production and
distribution channels cannot be called surrogate.
However alcohol and alcohol companies have been promoting their products under the garb
of non-alcohol or non-alcohol products with same brand names.
Such surrogate advertisement does have a brand recall impact since most of the viewers
associate a particular brand with the main product. For example, Royal Challenge is an
alcohol for most consumers or potential consumers and not a sport!
On the one side we had the government who wanted to make sure that there were no liquor
and alcohol advertisements on the television, and on the other side we had the liquor and
alcohol companies who wanted to continue with television as a medium of communication
and to achieve the ultimate goal of increase in sales. This battle of interest of both the sides is
what fascinates me to choose Surrogate Advertising as a topic for doing my thesis.
Chapter 3
Literature Review
3.1 Introduction
The Literature review is done for enhancing our knowledge and it gives us a specific path by
which we can fulfill our objective of the project. It also helps in the solving of our project
report in the effective way to achieve our goal. The following are literature reviews related to
our capstone project:
Strasburg, Donne Stein (1991): “Children, adolescents and the media: issues and solutions”.
Young people view approximately 20000 commercials every year or which nearly 2000 are
for beer and wine. For every “just say no” or “know when to say when” public service
advertisement, teens will view 25 to 50 beer and wine ads.
Grube, Wallace (1994): “Television beer advertisement and drinking knowledge, belief and
intention among school children”. In this finding the alcohol advertising may predispose
young people to drinking. Young who are more aware of beer advertisement held more
favorable beliefs about drinking intended to drink more frequently as adult and had more
knowledge of beer brand and slogans.
Thun, Peto et al (1997): “Alcohol consumption and mortality among middle ages and
elderly U.S. adults”. In this article the middle aged and elderly population, moderate alcohol
consumption slightly reduces overall mortality. The benefit depended in part on age and
background cardiovascular risk and was far smaller than the larger increase in risk produced
by alcohol.
Malley, Bachman et al (1998): “Alcohol use among adolescents”. This article found that the
majority of adolescents under the age of 18 have consumed alcohol, although the minimum
legal age is 21. Drinking rate may even have increased in recent years in some age groups.
There are some socio demographic sub groups with respect to drinking rates although alcohol
consumption generally is lowest among white people. Almost 2/3 of 12th grades who reported
consuming alcohol experience at least one alcohol related problem. Most adolescent drink to
experience the pleasurable effect of alcohol such as having good time with friends.
Gentile, Bloomgren et al (2001): “Frogs sell beer”. In this research there is a correlation
between beer advertising budgets and adolescent drinking. The knowledge about beer brand
will create preference and it also influence current behavior and that will create beer brand
loyalty and intentions to drink.
Greenberg, Lee et al (2001): “The marketing of alcohol to college students: the role of low
prices and special promotions”. The regulation of marketing practices such as sale prices,
promotions and advertisements may be important strategies to reduce being drinking and its
accompanying problems.
Pekins (2002): “Surveying the damage: a review of research on consequences of alcohol

misuse in college populations”. This article show the survey of misuse of alcohol in college
population based on survey research conducted during the last two decades. It is found that
there is wide range of damage by some student by them self and to others too. Drinking by
males compared with of females produces more consequences for self and other that involve
public deviance, whereas female drinking contributes equally with males to consequences
that are personal and relatively private.
Siegel, King et al (2006): “Alcohol advertisement in magazines and youth readership: are
youth disproportionately exposed?” In this article researcher research the relationship
between alcohol advertisement in magazines and youth readership, while controlling for a set
of magazines and readership variables related to the demand for advertising space. It is found
that number of alcohol advertisement in magazines increases significantly with the proportion
of youth readership even after controlling for young adult readership. The result indicates that
youth are disproportionately exposed to alcohol advertisement and that reducing youth
exposure to alcohol ads remains an important public policy concerns.
Nelson (2007): “How similar are youth and adult alcohol behaviors? Panel results for excise
taxes and outlet density”. In this research there is linear probability model for drinking
prevalence and Bing drinking youth, young adult and adult by using state level estimates. The
main results are first, a positive relation exists among youth and adult alcohol behaviors.
Second, state to state variation in real beer taxes does not negatively affect youth behavior.
Higher outlet densities’ positively by young and last several government regulatory variables
have negative effect on drinking prevalence and most of the sports events does not increase
prevalence.
Truong, Sturm (2007): “Alcohol environment and disparities in exposure associated with
adolescent drinking in California”. In this article alcohol outlet are concentrated in
disadvantage neighborhoods and can contribute to adolescents drinking. To reduce underage
drinking, environmental interventions need to curb opportunities for youth to obtain alcohol
form commercial sources by tightening licenses, enforcing minimum age drinking laws or
other measures.
Fletcher, Bonell (2008): “Detaching youth work to reduce drug and alcohol related harm”.
In this article current youth approaches that respond to adolescent drug and alcohol use are
not working. They call for a shift in policy and practice to embrace detached, street based
youth work as a method to reduce the harm and marginalization that drug and alcohol use
continues to cause.
Science Daily (2008): “Alcohol advertisement and adolescence”. In this article the
advertisement of alcohol, peer pressure and parental influence all are the part of the more
consumption by the young. We can see that in the retail markets, TV advertisement, movies
and in local market there is exposure of these alcohol shops and advertisement. However
there is no particular reason that is that it really influence them or not.
Paschal, Grube et al (2009): “Alcohol control policies and alcohol consumption by youth: a
multinational study”. More comprehensive and stringent alcohol control policies, particularly
policies affecting alcohol availability and marketing are associated with lower prevalence and
frequency of adolescents’ alcohol consumption and age of first alcohol use.
Grossman, Chaloupka et al (2010): “Effect of alcohol price policy on youth: a summary of

economic research”. In this research the main thing which focuses on various taxes and duties
paid. The studies find that alcohol use and motor vehicle accident mortality are negatively
related to the cost of alcohol. Clearly, these are policy-relevant findings, because price is a
policy-manipulable variable. Frequently, the effects of a variety of simulated excise tax hikes
exceed those of the uniform minimum legal drinking age of 21 in all states.
Chapter 4
Objective and Need of study
4.1 Objective of study:

 To study the legislative measure on surrogate advertisement.
 To study the impact on youth while watching advertisements of alcoholic product.
 To study the factor affecting toward consumption of alcoholic product.
4.2 Need of the study
Advertisements have a strong influence in our life. We like them because they provide
information and create awareness about the market. Their significance in corporate world
cannot be underestimated. But many times, some advertisements are accused of misleading
people. When such accusations are proved, some advertisements are scrapped off from
media. Such instances have been reported in the advertisements endorsing alcoholic drinks,
cigarettes & other alcohol products.
These advertisements were opposed by a major section of the society. Hence the
Government had imposed a ban on advertisements of these products in the media in the year
2002. As a reaction to the directive of Government, the liquor & alcohol majors sought other
ways of endorsing their products. They have found an alternative path of advertising through
which they can keep on reminding their liquor brands to their customers. They have
introduced various other products with the same brand name.
The problem occurs when brand extension is carried out in response to the ban on
advertisement of one product category. In this case, the companies launch other products with
the same brand name for the purpose of reminding their old customers. Heavy advertising is
done so that the customers do not forget their liquor & alcohol brands, for which
advertisements are banned. The advertisements for such new products are placed under the
category of "Surrogate Advertisements". Their only objective is to compensate the losses
arising out of the ban on the advertisement of particular products. The research tries to study
the ethical issues involved in surrogate advertisement and its effect on brand image. Primary
Data for the purpose of research is collected through structured questionnaires. This method
is used for collecting data from Advertising Companies & consumers in Nagpur city. The
findings of this research will help in understanding the impact of surrogate advertisements on
the brand.
Chapter 5
Research Methodology
5. Research Methodology:
5.1 Nature of the Research Design
Considering this work as a basic research, this study has followed descriptive research
design. An attempt is made in this study to understand how the youth are attracted by these
types of surrogate advertisements and due to these surrogate advertisement the industry of
alcoholic is booming and also measure the overall impact of these advertisement on the
public. Data were collected from the potential youth of the age between 15 to 30 years age
groups in the Amritsar and Phagwara region.
5.2 Data Collection:

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

A questionnaire was designed to collect the primary data.
5.2.2 Secondary Data:
 Descriptive research
 Exploratory research
5.3 Sampling Method:

A random according to the given specification criteria sampling method and other method
will be used to obtain the data from the potential consumers.
5.4 Sample Type:

Target audience would comprise ofthose in the age group between 15 and 30 years. Educated,
at least know about what advertising is, have seen the surrogate advertisement.
5.5 Sample Size: 103
5.6 Sample Area: Amritsar and Phagwara region.
5.7 Tools Uses for Analysis:

SPSS (ANOVA), Analysis using MS Excel, Questionnaire for Primary data collection.
Chapter 6
Data Analysis
6.1 Factor Analysis Results
6.1.1 KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .606

Bartlett's Test of Sphericity Approx. Chi-Square 350.918
df 120
Sig. .000
Table 6.1.1: KMO and Bartlett’s Test
The raw data was factor analyzed using SPSS 16.0 (Green el at, 2000) to summarize the 16
variables into smaller sets of linear composites that preserved most of the information in the
original data set. The data was subjected to principal component analysis, a method
categorized under the broad area of factor analysis. Regarding the pre-analysis testing for the
suitability of the entire sample for factor analysis, the Kaiser-Meyer-Olkin measure of
sampling adequacy was 0.606 and the Bartlett's test of sphericity was 350.918 significant at
p < 0.001 (Table 1), thus, indicating that the sample was suitable for factor analytic
procedures (Hair el al., 2006).
6.1.2 Total Variance Explained
Extraction Sums of Squared Rotation Sums of Squared
Com Initial Eigenvalues Loadings Loadings
pone % of Cumulativ % of Cumulativ % of Cumulativ

nt Total Variance e % Total Variance e % Total Variance e %
1 2.797 17.480 17.480 2.797 17.480 17.480 1.994 12.461 12.461

2 2.534 15.837 33.318 2.534 15.837 33.318 1.804 11.277 23.738
3 1.555 9.716 43.034 1.555 9.716 43.034 1.723 10.767 34.505
4 1.360 8.498 51.532 1.360 8.498 51.532 1.692 10.576 45.081
5 1.112 6.947 58.479 1.112 6.947 58.479 1.653 10.334 55.414
6 1.079 6.745 65.224 1.079 6.745 65.224 1.570 9.810 65.224
7 .904 5.648 70.872
8 .788 4.926 75.798
9 .762 4.762 80.560
10 .588 3.673 84.233
11 .573 3.580 87.812
12 .501 3.129 90.941
13 .468 2.924 93.866
14 .396 2.474 96.340
15 .329 2.059 98.399
16 .256 1.601 100.000
Extraction Method: Principal Component Analysis.
Table6.1.2:TotalVariance explained.
According to the analysis, six factors with Eigen values greater than 1.0 were obtained and
these accounted for 65.224% of the total variance. According to above table it’s showed that
the first two factors are more impacting and then next two and last two variables are less in
compared with others factors. These six factors are also shown by Scree Plot
Figure 6.1.2: Scree plot showing factors variables.

Component matrix
Six factors which are extracted from the SPSS analysis is also shown by following
Component matrix table.
6.1.3 Component Matrixa
Component
1 2 3 4 5 6
Peer pressure .729
Advertisements .618
work pressure .590
Offers .582
Influence by Cinema .431
Party/Meeting/weddi
.697
ng
Liquidation contract -.559 .414
More relaxing .544 -.480
Occasional .538
Tax increment -.502 -.500
Product bundling -.453
Environment .609 .565
Seasonal .406 -.515 .426
Ritual factors .486 .472
Mkt factors -.484
Discount
.435 -.434 -.466
promotional schemes
a. 6 components extracted.
Table 6.1.3: Component Matrix
6.1.4 Rotated Component Matrixa

Component
1 2 3 4 5 6
Liquidation contract .732
Peer pressure .647
Advertisements
Mkt_factors .653
Offers .691
Environment .896
Party/Meeting/wedding .666
Discount_promotional_schemes .736
Influence by Cinema .638
Product bundling .646
Seasonal .871
work pressure .782
More relaxing -.657
Ritual factors .847
Occasional -.632
Tax increment .532 -.513
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 6 iterations.
Table 6.1.4: Rotated Component Matrix
6.1.4.1 Analysis on Rotated component Matrix:
Component 1: Promotional schemes

Factors Values
Discount_promotional_schemes 0.736
Offers 0.691
Peer_pressure 0.647
According to the component i.e. promotional scheme three factors affecting the most is
discount, offers and peer pressure. These factors show us that when there is more offers and
promotional scheme youth consume more alcohol with peer group.
Component 2: Perception of consumer
Factors Values
Liquidation_contract 0.732
More_relaxing -0.657
Tax_increment 0.532
According to second component i.e. perception of consumer these are few factors which
effect the perception of consumer toward consuming alcoholic product.
Component 3: Occasion
Factors Values
Tax_increment -0.513
Environment 0.896
Party/Meeting/wedding 0.666
According to third component i.e. occasion there factor influence the most these are tax,
environment and party and weeding.
Component 4: Seasonal
Factors Values
Seasonal 0.871
work_pressure 0.782
According to the seasonal factor, two factors affect the most i.e. seasonal and work pressure
because in season there is lot of work pressure so people prefer to drink alcohol.
Component 5: Culture
Factors Values
Ritual factors 0.847
Influence by
Cinema 0.638
According to component i.e. culture two factors affecting the most these are ritual factors and
influence of cinema.
Component 6: Marketing factors
Factors Values
Mkt_factors 0.653
Product bundling 0.646
Occasional -0.632
According to 6 component i.e. marketing factors these component are marketing factors,
product bundling and occasion.
6.2 Analysis on the questionnaire
6.2.1 Consumer consumption patter on following factors(On the basis of survey):

6.2.1.1 Consumption in six months:
Figure 6.2.1.1:Consumption in six months

According to the above diagram 89 of the population consume alcohol while 14% do no
consume alcohol.
6.2.1.2 Consumption rate in month:
Figure 6.2.1.2:Consumption rate in month

According to the above diagram consumption rate in month. Target population consume once
only because 35% of our population consume only once in a month. 21% population
consumes alcohol more than 3 times.
6.2.1.3 Timing preferred for consumption:
Figure 6.2.1.3: Timing preferred for consumption

According to above table it is clearly shown that people prefer to consume alcohol during
9pm to mid night i.e. 69% of population consume at this time.
6.2.2 Parameter influence to buy alcoholic product:

6.2.2.1 Due to monthly income:
Figure 6.2.2.1:Monthly Income

According to above table people who are earning below Rs.10000 consume more alcohol i.e.
52% population consume more alcohol than other.
6.2.2.2 Money spend on alcoholic product:
Figure 6.2.2.2: Money spend on alcoholic product

According to above diagram people prefer to spend Rs.500-1000 on alcoholic product. i.e. 33
respondents.
6.2.2.3 Influence due to watching surrogated advertisements in day:
Figure 6.2.2.3:Influence due to watching surrogated advertisements in day
According to above diagram we can conclude that while watching surrogated advertisement
in a day i.e. 43 respondents watch that advertisement and influence by that.
6.2.2.4 Influencer to buy alcoholic product:
Figure 6.2.2.4: Influencer to buy alcoholic product

According to above diagram we can conclude that peer pressure is the biggest influencer to
consume alcohol among the youth.
6.2.3 Consumers perception toward legislative measure on surrogate:

6.2.3.1 Perception on necessity of advertisement:
Figure 6.2.3.1 Perception on necessity of advertisement

According to the above document 40 respondent agree that necessity of surrogated
advertisement is necessary. And only 4 respondents believe that necessity of ad is least
important.
6.2.3.2 Tax and other legal barrier on alcoholic products:
Figure 6.2.3.2 Tax and other legal barrier on alcoholic products

According to above diagram 38 respondent strongly disagree that tax must be imposed on the
alcoholic product. And 12 respondent strongly disagree that tax must be imposed.
6.2.3.3 Opinion about banning:
Figure 6.2.3.3: Opinion about banning
According to above diagram people have no comment that surrogated advertisement must be
ban or not.
6.3 Findings:
 89 out of 100 male respondents consume alcohol in last six months.

 35 out of 100 consume alcohol only once in a month, while 21 consume alcohol more
than 3 times in a month.
 Most of the people prefer after 9pm time to consume alcohol to relax from the work
pressure and sometime occasionally.
 People who earn less spend more on alcohol i.e. people who earn less than Rs.10,000
spend more than who earn Rs. 60,000
 Average money a consumer spend on alcoholic product is between Rs. 500-1,000 i.e.
33 people out of 100.
 43 respondent watch surrogated advertisement in a day that reminding of consuming
alcohol.
 Peer pressure is the one factor that influence the youth to consume alcohol. Some
local environment and parent can also be the factor that influences the consumer.
 40 out of 100 respondents agree that there is a need of surrogated advertisement.
 Most of the alcohol consumer strongly disagrees that there must be imposition of tax.
 Respondents have no comment while banning or non-banning of surrogated
advertisement.
Chapter 7
Conclusion & Suggestions
7.1 Conclusion:
In this way, from the above research, we can conducted that surrogated advertisement has
influence population to remind and recall the brand name, brand product while watching
regulated advertisement somewhat influence the consumer force to consume alcohol.
According to the data available to us, we say that pear pressure it most affecting factor that
influence the consumer to consume alcohol. 35 out of 103 respondent watches surrogated
advertisement every day because alcohol companies always want to be on the top of the mind
of consumer. 83 out of 103 male respondents strongly agree that there is no more of these
surrogated advertisements because they may impact their children or family that may
negatively effect on the mind of youth.
Government need to regulate the laws regarding surrogated advertisement like more
imposition of tax and reduce the number of liquor shop near campus and college because
youth are the future of the India. If youth will addict to alcohol then who will make
DEVELOPING INDIA into DEVELOPED INDIA.
7.2 Suggestions:
There should be stringent regulatory measures to curb the practice, such as:
 making transparent laws banning surrogate advertisements for different products
under a single brand names, by amending the Trade Marks Act, for instance;
 providing teeth to the Advertising Standards Council of India to enable it take action
against false and misleading advertisements, and keep a close vigil over clever
evasion of the law;
 asking the electronic and print media to adhere to the advertisement codes and not
encourage surrogate advertisements;
 calling on the ASCI address complaints received from consumers against surrogate
advertisements and take appropriate actions immediately;
 creating a consumer awareness programme to help people understand the negative
impact of surrogate advertisements;
 adopting strict laws to penalize those companies featuring surrogate advertisements
without any real existence of the product; and
 Requiring advertising agencies to have full knowledge of the products under the same
brand for which they are promoting advertisements, and taking legal actions against
those agencies which design surrogate advertisements.
 Health warnings A single health warning (“Cigarette smoking is injurious to health”
or “Drinking liquor is injurious to health”) is mandatory on packets and any
advertisements.
MORE OF CSR
Corporate along with the government can take up the following measures
 Promote public education programmes on the harmful effects of the abuse of liquor;
 Promote social responsibility programmes;
 Promote the establishment of recreational facilities for youth;
 Promote the establishment and maintenance of support structures for the rehabilitation
of individuals and communities affected by alcohol abuse;
 Promote further research on the nature and extent of the socio-economic effects of
alcohol abuse; and
 Promote interaction between government and civil society, notably civic, youth and
religious formations.
7.3 Limitations of the study:
 The study is conducted in Amritsar and Phagwara region, valid for this region only.
 The findings of the study will be based on the assumption that the respondents
divulged correct information.
 The study would be relevant only to present situation.
 The study will be time bound, due to rapid changes in the perception of the consumers
due to advertisements.
 The study may not be applicable if there is any change in rule and regulation of the
Government of India.
8. References/Bibliography:
Advertising, alcohol and adolescents published in science daily 2008.
Gentile Walsh, Bloomgren, Atti and Norman (frog sells beer: the effect of beer advertisement
on advertisement and adolescent drinking knowledge) presented at biennial conference of
society for child development, Minnesota.
Grube, W. & Wallack (Television beer advertisement and drinking knowledge beliefs and
intentions among school children) published in American journal of public health, 84(2).
H. Wesley Perkins (Surveying the Damage: A Review of Research on Consequences of

Alcohol Misuse in College Populations) published in J. Stud. Alcohol, Supplement No. 14:
91-100, 2002.
Jon P. Nelson (how similar are youth and adult alcohol behaviours?) published in
international Atlantic economics society 2007.
Khao Dang Truong, PhD and Roland strum PhD (alcohol environments and disparities in
exposure associated with adolescent drinking) research and practise published in American
journal of public health in 2009.
Mallie J paschal, Joel W Grube and Kypros Kypri (Alcohol control policies and alcohol
consumption by youth: a multi-national study) published in European survey project on
alcohol and other drug 2003.
Meichun Kuo, Henry Wechsler, Patty Greenberg, Hang Lee, (The marketing of alcohol to
college students : The role of low prices and special promotions) published in Harvard School
of Public Health, Department of Health and Social Behaviour Boston, Massachusetts, USA.
Michael Grossman, Frank J. Chalopka, Henry Saffer & Adit Laixuthai (effect of alcohol price
policy on youth: a summary of economic research) E & P weekly 2010.
Michael J. Thun, M.D., Richard Peto, F.R.S., Alan D. Lopez, Ph.D., Jane H. Monaco, M.S.,
S. Jane Henley, B.A., Clark W. Heath, Jr., M.D., and Richard Doll, F.R.S.(Alcohol
Consumption and Mortality among Middle-Aged and Elderly U.S. Adults) published in N
England J Med research paper 1997.
Michael Siegel, Charles King, Joshua Ostroff and David H. Jernigan (alcohol advertising in
magazine and youth readership: are youth disproportionately exposed?) published in
contemporary economics policy vol. 26 no.3 2008 western economics association
international.
Monica H Swahn Thomas R Simon, Bart J Hammig and Janet l Guerrero (alcohol
consumption behaviour and risk for physical fighting and injuries among adolescent drinkers)
published in national longitudinal study of adolescents health.
Renna (Alcohol abuse, alcoholism and labour market outcome: looking for the missing link)
publish in industrial and labour relationship reviews vol. 62 no.1 (October 2008) by Connell
university.
Strasburger, V.C. & Donnerstein (children adolescents and media: issue and solution)
published in paediatrics 103 (1):129-139
Weitzman, Elissa R. ScD, and MSc (Poor Mental Health, Depression, and Associations with
Alcohol Consumption, Harm, and Abuse in a National Sample of Young Adults in College
Published in Journal of Nervous & Mental Disease: April 2004 - Volume 192 - Issue 4 - pp
269-277.
http://www.surrogate_advertising.com
http://www.legalserviceindia.com/article/l346-Surrogate-Advertisements.html
Annexure
Annexure A: Sample of Questionnaire with SPSS codes

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

Surrogated Advertisements” on the consumption pattern, sales impact, correlation among
the youth. Your opinion is extremely important in evaluating the survey. Your response will
be kept confidential. Your views will be used only for purpose of academic research.
Name :- …………………….. Gender:-………………....
Age :- …………………….. Occupation:-……………..
Please put tick(√) on the Box and Table available as per the question’s demand.
1. Have you consumed alcohol in last 6 months?
Yes {1} No {2}
2. How often do you consume alcoholic product in a month?
Once {1} 2 times {2} 3 times {3} More than 3 times {4}
3. Mostly which place you do you buy these products?

Beer or Wine shop {2} Supermarket {3} any other
4. What’s your monthly income?

Below Rs.10,000{1} Rs. 20,000 – Rs.40,000{2} Rs.40,000 – Rs.60,000{3}
More than Rs.60,000{4}
5. How often you see the surrogate advertisements in a day?

Once {1} 2 times {2} 3 times {3} More than 3 times {4}
6. Do you think that such kind of advertisement of products is necessary?

Strongly agree{1} Agree {2} Neutral {3} Disagree{4}
Strongly disagree{5}
7. On an average how much amount of money do you spend on alcoholic products in a month?
Below 500{1} 500 – 1000{2} 1000 – 1500{3} 1500 – 2000{4}
More than 2000{5}
8. What is your opinion about banning of advertisement of these products?

Is a right step{1} Produced should be banned{2}
No need to ban{3} No comment{4}
9. Which time of the day do you mostly prefer to drink alcohol?

10am – 1pm{1} 1pm - 5pm{2} 5pm-8pm{3} 9pm – mid-night{4}
10. How would you rank the present surrogated advertisement? (Rank 1-5 ascending order)
Entertaining Informative Misguiding Disturbing Boring
11. Which parameter influences you to buy the alcoholic products?

Surrogated ads.{1} Peer group{2} Parents{3} Local environment {4} Can’t say {5}
12. Reasons for using alcoholic products?
Parameters Strongly Agree Neutral Disagree Strongly

agree{1} {2} {3} {4} disagree{5}
Liquidation of Contracts
Peer pressure
Advertisements
Marketing factors
Offers
Environment
Party/Meeting/wedding
Discount and promotional schemes
Influence by Cinema
Product bundling
Seasonal
Work pressure
More relaxing
Ritual factors
Occasional
13. Do you agree on increment on tax of alcoholic products?

Strongly agree{1} Agree {2} Neutral {3} Disagree{4}
Strongly disagree{5}
Thank you for your time and valuable input.

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CONSUMER PERCEPTION TOWARDS SURROGATE ADVERTISEMENT

CAPSTONE PROJECT (PART –II) MGT 738 REPORT

Amrish Kumar Das (11112394)

Divya Sehgal (11112997)

Manpreet Kaur (11111768)

Vishwadeep Singh (11114477 )

Under the Guidance of

LOVELY PROFESSIONAL UNIVERSITY

JALANDHAR NEW DELHI GT ROAD

CAPSTONE PROJECT (PART –II) MGT 738 REPORT

Amrish Kumar Das (11112394)

Divya Sehgal (11112997)

Manpreet Kaur (11111768)

Vishwadeep Singh (11114477 )

Under the Guidance of

LOVELY PROFESSIONAL UNIVERSITY

JALANDHAR NEW DELHI GT ROAD

TO WHOME IT MAY CONCERN

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

Name Registration Number

Amrish Kumar Das (11112394)

Divya Sehgal (11112997)

Manpreet Kaur (11111768)

Vishwadeep Singh (11114477)

Everything can’t be mentioned but nothing is forgotten.

Amrish Kumar Das (11112394)

Divya Sehgal (11112997)

Manpreet Kaur (11111768)

Vishwadeep Singh (11114477 )

The surrogated advertisement from liquor companies intensified further through

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

6.2.3 Consumers perception toward legislative measure on surrogate38

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

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

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