Project Report On

A STUDY ON ALCOHOLIC BEVERAGES PROMOTION

Submitted in Partial Fulfillment of the Requirements of the Masters Degree in Business Administration course of Bangalore University
By, NITIN.R 04XQCM6060 Under the Guidance of, Prof N.S.VISWANATH

M.P. Birla Institute of Management Associate Bharatiya Vidya Bhavan Bangalore 560001 2004-2006

Declaration
I hereby declare that the project report titled A STUDY ON ALCOHOLIC BEVERAGES PROMOTION " is a record of independent work carried towards the partial fulfillment of the requirements for the Masters Degree in Business Administration course of Bangalore University, at M.P. Birla Institute of Management Associate Bharatiya Vidya Bhavan, Bangalore 560001.

This has not been submitted for the purpose of an award or degree of any other institution.

Place: Bangalore Date :

(Mr. Nitin.R) 04XQCM6060

Acknowledgement
At the very outset, I take the opportunity to express my sincere regards and gratitude for every individual linked with my Research Work.

One such person is my guide for the semester Prof N.S.VISWANATH, whose inspiring words made me put in all I had to offer. His continuous guidance and suggestions are the cardinal aspects that have ultimately led me to see this fruitful end.

I thank our Principal Dr. Nagesh Malavalli, for providing me with the academic support.

Last but not the least; I would like to thank the Almighty for being there always, and all others who have directly or indirectly helped me in this endeavor.

(Nitin.R) Place: Bangalore Date:

EXECUTIVE SUMMARY
Advertising is a powerful tool through which a company reaches its target audience, and conveys the benefits, features, price, and availability of the product, service, or idea in the offering. It is the paid form of communicating the message. Advertising is persuasive, informative, and is designed to influence the purchasing behavior of the prospective customer.

In an ideal situation, the advertiser can directly communicate to the target group without any impediments. But, in practicality, this does not take place. There exist certain roadblocks in this exercise. These roadblocks are created either inside the minds of the consumer/public or have been laid down by a regulatory body. In the latter case, the Government prohibits the advertising of certain products due to the concern of the health and safety of its citizens. The products that come under this purview are Tobacco, Alcohol, and OTC Drugs. This paper specifically concentrates on issues related to promotion of Alcoholic beverages.

This research work extensively deals with effect of alcoholic beverages promotion and the findings and recommendations are presented as the deliverables. The project is an anatomical study as it covers all the perspectives related to effects of alcoholic beverage promotion and the publics view upon promoting alcoholic beverages One of the key outcomes of this research work is that the governments ban on advertising of alcoholic beverages while allowing their production and consumption is not an ideal solution to the problem. All businesses have a right to promote their products and government intervention to curb that right is not the answer to curb this social evil.

In coming to this conclusion I have analyzed data from several sources such as consumer views, journals and articles, focus group analysis, previous research work, current news and views etc.

Table of Contents
Chapter 1 Theoretical Setting 1.1 Prelude 1.2 History of Advertising 1.3 Objectives of Advertising 1.4 Types of Advertising 1.5 Advertising Techniques- An Overview 1.6 Research Design 1.7 Kaleidoscope of Surrogate Advertising

Chapter 2 Advertising of Alcoholic Products 2.1 Advertising of Alcoholic Products 2.1.1 Arguments in favor of promotion of alcoholic beverages 2.1.2 Arguments against promotion of alcoholic beverages

Chapter 3 Final analysis 3.1 Analysis and Interpretation 3.1.1 Focus group opinions 3.2 Findings and Recommendations 3.3 Conclusion

ANNEXURE I Select Bibliography II Research Instrument

Chapter 1
Theoretical Setting 1.1 Prelude

1.2 History of Advertising

1.3 Objectives of Advertising

1.4 Types of Advertising

1.5 An Overview of Advertising Techniques

1.6 Research Design

1.7 Kaleidoscope of Surrogate Advertising

Chapter 1.1

PRELUDE
Advertising is the paid promotion of goods, services, companies, and ideas, by an identified sponsor. Marketers see advertising as an overall promotional strategy. Along with Price, Product, and Place, advertising is one of the elements of the 4th P of marketing, i.e. Promotion. The other elements of the promotional strategy include - sales promotions, public relations, etc. An effective marketing mix translates in to an effective run for the product in the market. One of the vital elements of the whole marketing strategy is the Promotional Strategy, and in a more specific sense, the Advertising Strategy.

Advertising is sometimes confused with marketing. Unlike advertising, marketing is the systematic planning, implementation, and control of a mix of business activities, intended to bring together, buyers and sellers for the mutually advantageous exchange and transfer of products and services.

First marketers develop a marketing plan, which is a blue print of a planned marketing activity that strives to create a competitive advantage for a product, service or idea. There are 5 stages involved in a marketing plan:

I. Research Stage: The planner analyses the marketing environment II. Strategic Stage: The planner develops objectives, along with the strategies to achieve them III. Tactical Stage: Specific tools are selected IV. Implementation Stage: Co-ordination of marketing strategy with the activities V. Evaluation Stage: Marketer assesses how well the objectives were achieved

Advertising is a relatively small but an integral part of the whole marketing plan. It is the part that involves getting the word out concerning your business, product or service being offered.

Chapter 1.2

THE HISTORY OF ADVERTISING

In ancient times, the most popular form of communication was by the Word-ofMouth. Commercial messages were found in the ruins of Pompeii. As printing developed in the 15th and 16th century, the first steps towards modern advertising were taken. In the 17th century, advertisements started appearing in weekly newspapers in England. A century later, advertising had become a popular thing.

As the economy was expanding in the 19 th century, the need for advertising grew at the same pace. In 1843, the first advertising agency was set up by Volney Palmer in Philadelphia. The advertising boom was seen in the 1920s when the advertisers and their agents came to realize the possibilities of the radio as a strong media vehicle. Wit hits drama and immediacy, the radio could convey the message directly to the consumer, free of cost. There was no need for the consumer to buy any publication or even be literate. In the 1950s came the television which developed into the most wanted and the most popular choice of media for the advertisers. Advertisers could demonstrate their product as well as present well known figures to praise it. They could also arrange emotions through the television.

Chapter 1.3 THE OBJECTIVES OF ADVERTISING

The purpose of advertising is to stimulate demand for a product, service or an idea. The other factors influencing demand are-

Price Sustainability A successful advertising program may stimulate demand and create a brand franchise. Sony's "Walkman" or Apples ipod, for example, can distinguish themselves as types of music players. But, because they have successfully attained a brand franchise among consumers, they are frequently used as generic terms. A brand franchise can be established to a greater or lesser degree depending on the product and market. In Texas it is common to hear people refer to soft drink as coke regardless of whether it is actually produced by Coca-cola, or any other company.

A legal risk of brand franchising is that the name can become so widely used that it becomes a generic term, and loses trademark protection (Escalator and Aspirin).

Other objectives of advertising include:

Increase in sales Market share Awareness Product information Image improvement These objectives can be put in the form of advertising roles as follows:

The Marketing role The Communication role The Economic role and The Societal role

Chapter 1.4 TYPES OF ADVERTISING

Advertising is considered complex because there are several types of advertisers trying to reach out to different types of audiences. These audiences overlap since a single household may require several appliances each of which follows a different advertising strategy.

Nine major types of advertising are identified:

1. Brand advertising 2. Retail/ Local advertising 3. Political advertising 4. Directory advertising 5. Direct-Response advertising 6. Business to Business advertising 7. Institutional advertising 8. Public Service advertising 9. Interactive advertising

Brand Advertising focuses on the development of a long term brand identity and image. Retail Advertising is local, and focuses on price, availability, location, and hours of operation. Politicians use Political Advertising to persuade voters to vote for them. Some critics feel that political advertising focuses more on image than on issues. The best known form of Directory Advertising is the "Yellow Pages". In this kind of advertising, ads are placed in the yellow pages/ directory, which the people refer to while buying a buying a product. Pizza Hut and Dominos are known to be the best advertisers in the Yellow Pages. Direct Response Advertising is used to directly stimulate sales. Telephone or mail (e-mail) is used by the customer to respond, and the delivery of the product

takes place through the conventional mediums. Business to Business Advertising includes messages directed to retailers, wholesalers, distributors, etc. as well as industrial purchasers, and professionals. Institutional Advertising (Corporate Advertising) aims at establishing a corporate identity or winning the public to the organization's point of view. Public Service Advertising communicates a message on behalf of a good cause. These are usually created by professionals free of cost and the media often donate space and time. Interactive Advertising is done to individual consumers who have access to a computer and the internet power is made use of. The consumer can respond to the ad, modify it, expand it, or ignore it.

Chapter 1.5

AN OVERVIEW OF ADVERTISING TECHNIQUES

Advertisers use several recognizable techniques in order to better convince the public to buy the product. The main techniques included are:

Repetition: Some advertisers concentrate on making sure that their product is widely recognized. To that end, they simply attempt to make the name remembered through repetitive advertising.

Bandwagon: By implying that the product is widely used, advertisers hope to convince potential buyers to "get onto the bandwagon" i.e. to join the group of existing users.

Testimonials: Advertisers often attempt to promote the superior quality of their product through the testimony of ordinary users, experts or both. The appeal of both authoritative figures and the common man is extremely convincing in this scenario.

Pressure: By attempting to make people choose quickly and without long consideration, some advertisers hope to make rapid sales. They do this by setting a deadline during which there is some kind of a discount on the product.

Association: Advertisers attempt to associate their product with desirable things in order to make their product more desirable! The use of attractive models, picturesque landscapes, and other imagery aims to make the product desirable.

Some of the other commonly used techniques are: advertising slogans, and controversies.

Yet another technique used in advertising is Subliminal Advertising. Generally we assume that the messages are seen and heard consciously. However, it is possible to communicate symbols that convey meaning below the threshold of normal perception. These kinds of messages are called Subliminal. These are transmitted in such a way that the receiver is not consciously aware of receiving it.

In an ideal world, every manufacturer would be able to talk to his audience about the product or service being offered for sale. But, Utopia is a fairy tale. Not always can an advertiser convey what he wants, to his/her target audience. There are quite a few inhibiting factors in this regard. These factors impede an effective advertising strategy. We look at two ends of the spectrum in this context, at one end is the laws and regulations which the Government has derived, and at the other end of the spectrum, quite surprisingly, are the `Consumers' themselves. These factors are:

Government Laws that prohibit certain products to be advertised Cap on TV Channels to telecast ads of certain products (the Cable TV Regulation Act)

Inhibition on the part of the audience to expose themselves to certain ads

Most articles and research papers take a positive stand on the ban on advertising for alcoholic beverages. However, some experts say that such a ban gives ample opportunity for the produce and sale of lower quality liquor which is the single most important cause for health problems arising due to alcohol consumption. They argue that the lifting of the ban could in fact reduce the number of alcohol related hazards since major brands can send their message across to people making them knowledgeable to the hazards of cheap quality liquor.

It does not always happen that the advertisement shown by the advertiser is seen by the target. There could be various reasons for this; the invention of the modern TV has changed the way of viewing TV, during a break or an interruption, the viewer just switches the channel, thanks to the remote control. Due to this, more often than not, the advertisement fails to reach its target. Another factor in this context is the act of ignoring certain ads, like those of condoms and ladies' sanitary napkins, by the user. These ads (PSA) are used to bring about awareness in the minds of consumer regarding a social issue (AIDS being the one in this case), but fail to do so due to the blocked mindset of the average audience. In either of the cases, the advertiser finds a supporting method to make the essence of the product reach out to the target market.

In the latter case, the advertisers go for either repetitive advertising, or channel block, to ensure that the target is bombarded with the ad, and the message is delivered. To bring about awareness about a certain issue, the advertisers carry out support activities, like organizing walks, marches, dedicating a day for the cause, etc. These are not issues as the Government has no hassles with the method of advertising or the product or service being advertised. The issue lies in the former case. These products are injurious to health and potentially hazardous in nature. They also need a certain qualification on the part of the buyer in order to make an appropriate choice. There exists a Legal perspective to this issue, and thus the case is highly complex and debatable. Since direct advertising of these products are not allowed, advertisers revert to an indirect medium, known as SURROGATE ADVERTISING. The following pages in the report deal with the issue in depth, deal with the pros and cons and bring about the impact of this method of advertising on the audience and the marketers.

The details of Surrogate Advertising will be covered in the subsequent sections.

Chapter 1.6 RESEARCH METHODOLOGY BACK GROUND OF THE STUDY:

The government has banned the advertising of alcoholic beverages due to health related and other reasons and has created hurdles to deliver message to the audience. Some of the people agree to the ban on promotion of alcoholic beverages as it has ill effects on society. On the other hand some people disagree on ban as the wisdom of the Government extends only to banning the advertising of tobacco or liquor, not to the manufacture or marketing of these supposedly deadly substances. According to them it is legal to manufacture liquor but is it illegal to advertise? This paper deals with pros and cons of promotion of alcoholic beverages and try to come out with its effects on concerned people.

PROBLEM STATEMENT

Has the ban really worked and more importantly is there a need for the ban in the first place? Does the promotion of the alcoholic beverages influence the society?

METHODOLOGY

COLLECTION OF DATA Primary and Secondary data

Primary data: Is collected through Focus group method A focus group method has been used in order to obtain both the sellers and consumers point of views regarding the promotion of alcoholic beverages. A focus group interview is a structured group process, conducted for the purpose of obtaining detailed information about a particular topic, product, or issue. Focus group discussions are useful when the

evaluator does not know precise issues or nuances that would permit a more specific research technique, such as a sample survey. In this regard, focus groups are useful in the early stages of inquiry, both to gather data and to lay the groundwork for more precise evaluation methods.

Advantages of Focus Groups In certain respects, focus groups are relatively easy to undertake. In particular, it is efficient to interview a number of people at the same time, and results can often be obtained in a reasonably short time span.

Social interaction within the group yields freer and more complex responses, due to interactive synergy, snowballing, spontaneity, and security of participants within the group. In short, people tend to express views that they might not express in other settings, or if interviewed as individuals.

The researcher can probe for clarification or greater detail, and unanticipated but potentially fruitful lines of discussion can be pursued. Responses have high face validity due to the clarity of the context and detail of the discussion. Focus groups can work well with any particular population and with a diverse population. This includes people who may have limited education, modest verbal skills, and low selfesteem, and lack of prior experience expressing personal views.

Limitations of Focus Groups Focus group moderators must be trained and skilled at stimulating and managing a guided group discussion. The skill of the moderator can have a tremendous impact on the "success" of the group, i.e., whether discussion flows freely. Groups are often difficult to assemble, and considerable care must be taken to provide a setting and conditions conducive to discussion. Individual responses are not independent of one another.

The evaluator has less control than in an individual interview. There is a great deal of specific information, some of it very tangential to the topic, making analysis and summarization of results challenging. Because participants are not randomly sampled from the population, the evaluator cannot freely generalize from the results. Methods The focus group method is designed to explore, in a group setting, what people think and how they feel about a particular issue. The group consists of participants, a moderator, and a recorder. The goal is to get as much information on the table as possible. Open discussion is encouraged under conditions of complete confidentiality. Group interaction is used to probe and bring out additional information. The moderator, only as necessary, stimulates the discussion and keeps it on course. Both concrete information and opinions are considered relevant. Every response is considered valid. There is no attempt to support or criticize any response, resolve any issue, address any individual problem or concern, or reach any conclusion. The goal is only to gather as much information from as many different viewpoints as possible.

Steps in the focus group process are as follows and in approximately this order: 1. Formulate the research question. 2. Identify and train moderators. 3. Generate, pre-test, and revise the interview guide. 4. Develop the sampling frame, i.e., decide what types of people will participate in the groups. 5. Recruit participants. 6. Make arrangements for the setting, equipment, food and drinks, and child care if necessary. 7. Schedule and conduct the groups, using tape recorder and/or a systematic recording form. 8. Prepare data and analyze. 9. Report.

Desirable Characteristics of Groups The membership of each group should be homogeneous, representing a particular segment of the population, but group members should not be close friends. The aim is to create conditions that promote both comfort and independence of thought, in order to maximize discussion and self-disclosure.

Focus groups can consist of 4 to 12 members, in addition to the moderator and the recorder. Smaller groups tend to be dominated by one or two members. On the other hand, larger groups inhibit participation by all members. Seven to eight has been shown to be a good number for many types of group interactions, yielding both variety of viewpoints and good participation. A time limit of approximately one and one-half hours is desirable, and two hours is the maximum for a focus group session. Beyond two hours, any group discussion loses momentum.

Sampling Frame The sampling frame is developed by identifying key population groups that are likely to represent different views of the topic at hand. The population may be divided along several different characteristics (e.g., age, income, gender, marital status, ethnicity) and/or particular groups might be identified (e.g., single mothers, the unemployed, university students) where these are thought to be relevant. Evaluators should decide how many "levels" of each characteristic are meaningful for the purposes of the study (e.g., perhaps four income levels, two for gender, one for unemployed) and form a group for each level of each important characteristic.

Identifying and Recruiting Participants Within the sampling category, convenience recruiting is the most common. However stratified random sampling has been used in this research paper to avoid systematic bias and to avoid friendship groups. At times, more systematic (even random) procedures are desirable.

After establishing initial contact and assuring confidentiality, the organizer may ask several questions to assess whether the respondent indeed fits the desired characteristics for participation and to clarify expectations. Next, the organizer assesses potential interest on the part of the respondent. If it is a good "fit," verbal confirmation of participation should be followed by written confirmation, and participants should again be contacted by phone within 24 hours of the group discussion. Incentives or support for participation are often desirable. These may include any or all of the following: snacks or a meal following the discussion, an attractive location, child care services, transportation, a token gift, and feedback on study results.

Designing the Interview Guide The purpose of the interview guide is to provide an overall direction for the discussion. It is not the equivalent of a survey instrument and is not to be followed in detail or even necessarily in order. The guide provides the moderator with topics and issues that are, to the extent possible, to be covered at some point during the group discussion. The guide is loosely structured and does not suggest potential responses.

When designing the guide, it is often best to proceed logically from one topic to another, and from the general to the specific. Also, to the extent possible, questions that are more important to the research agenda should be presented early in the session. Questions should be unstructured, unbiased, non-threatening, and very simple. Specification should almost always be left to the participants, unless the discussion is decidedly "off track," at which time the moderator should gently redirect it.

The guide should not be overly detailed or have too many questions. A good focus group interview guide consists of twenty questions or less. Pretesting the guide with several "mock" focus groups is essential. The aim is to structure questions so that they are clear and stimulate discussion. Several stages of revisions may be necessary before the guide is ready to be used.

Facilitating the Discussion and Recording As mentioned previously, each focus group should have a moderator and a recorder. The moderators task is to make participants feel at ease and to facilitate open communication on selected topics by asking broad, often open-ended questions, by probing for additional information when necessary, and by keeping the discussion appropriately focused. The moderator should generally follow the interview guide, but participants should have ample opportunity to express opinions, experiences, and suggestions and should be allowed to lead the discussion in new directions as long as the topics pertain to the subject of discussion. Therefore, the discussion may not follow the interview guide in the order suggested.

Secondary data: Is collected through Journals and Periodicals Books and Articles by well known authors Newspapers and Magazines The Internet

Chapter 1.7

KALIEDOSCOPE OF ALCOHOLIC BEVERAGES PROMOTIONAL TECHNIQUES

The main objective of advertising is to communicate the price, features, availability, and sustainability of the product, service, or idea, that has been kept for sale. The basic idea is to drive sales. This means that, the advertisement should be effective enough to convey the right message to the target audience, and in the course of this, it should help the product or service to sell in the market. In an ideal situation, every advertiser and marketer can talk directly to his or her audience and promote the product. But, this does not happen all the time. In the previous sections, this issue has been dealt with. The addressed issues are:

Government laws and regulations Inhibition on the part of the consumers The topic being dealt with in this research is with the issue concerning the pros and cons of the ban on certain products to be advertised. The ban has been placed by the government, through certain laws and regulations.

Now consider this situation, if there is a certain product `X', which comes under the government ban, does the marketer stop advertising the product totally? The answer is NO. Even if there was no competition in the market, and it was a pure monopolistic market structure, the marketer would have to promote the brand or the product. Now, the next question is, how to advertise and promote even when you are not allowed to? The answer to this lies in "SURROGATE ADVERTSING". This is a tool that the advertisers and marketers adopt when their product comes under the purview of Government ban.

So, what exactly is Surrogate Advertising?

The literal meaning of `Surrogate advertising' is duplicating the brand image of one product extensively to promote another product of the same brand. When resorting to this approach to promote their product, the advertisers are unable to send across important messages about their products since they are promoting some other product of the same brand. This reduces the effect of advertising and allows lower quality brands to compete in the same market.

The product categories that come under the consortium of being banned from advertising:

Tobacco (Tobacco Based) Products Alcohol (Alcohol Based) Products Pharmaceutical (OTC) Drugs

Chapter 2.1 ADVERTISING OF ALCOHOLIC PRODUCTS

The Indian liquor industry can be divided into two broad segments: Indian Made Foreign Liquor (IMFL) and country-made liquor. IMFL comprises alcoholic beverages that were developed abroad but are being made in India (whisky, rum, vodka, beer, gin and wine), while country-made liquor comprises alcoholic beverages made by local breweries. While many players were present in the IMFL segment, breweries in the unorganized sector accounted for almost 100% of the country-made liquor segment.

During 1999-00, the Rs 60 billion Indian liquor industry grew at the rate of 1012%. While IMFL was consumed by the middle and upper classes of society, country-made liquor was consumed by the economically backward classes. In India, 40-50% of all males and 1% of all females consumed alcohol. Almost 62% of the drinkers could be classified as light drinkers (i.e. social drinkers), 29% percent as moderate drinkers, and about 9% as hard drinkers. The organized industry was dominated by Shaw Wallace and United Breweries, which together accounted for around 53% of the total market. (Source: icmr.icfai.org)

The liquor industry was heavily regulated by the government. Companies were not allowed to expand capacity without prior approval from the concerned state government. The distribution of liquor was also controlled in many states through auction system, the open-market system and the government-controlled system. Under the auction system, the government fixed a floor price for the shops and the bidders had to quote prices. The license was given to the highest bidder.

The Indian liquor industry was making hay in the sunshine, until; the advertising ban came on its face. It started with the companies having to prop up statutory warnings, and then going to the ban of direct advertising of these products.

The Information & Broadcasting Ministry, under the Cable Network Rules, 1994 has

imposed a ban on advertisements of tobacco and liquor products on satellite channels effective from 6th October 2000. The government's aim obviously is reducing the exposure of such ads to teenagers in habit forming years. While advertising on Doordarshan has always been banned, the restriction on private channels has done away with one of the most effective channel of communication for the players in this industry. The ban includes both direct as well as surrogate advertisements in its ambit. Additionally there is also pressure from public interest groups to ban print and hoarding advertisements too. If the Government does accept it that would close all the doors of communication for the industry, which would then have to solely depend on their established brand equity or direct promotions to grow their markets. Coming at a time that it has just a few months before the sector is opened up for free imports (March 2001), one really wonders if there hasn't been some lobbying by the local players themselves for imposing this ban.

Why would the players be in favor of such ban? Infact the ban has divided the entire industry between multinationals and local home grown companies. From the point of view of Indian players ', the biggest threat today is the entry of global majors who will have an unrestricted license to sell once the free import regime as per the WTO commitment comes into force from March 2001. These MNC's not only have well known brands, but also have deep pockets. And advertising is their most potent weapon. Television would be the quickest and the most effective way to reach the maximum number of people, throughout the country, in the shortest possible time. Print media has its own shortcomings, with the multiplicity of languages th at people speak in India. Also print media cannot beat the effectiveness of the audio visual medium of television.

Adding to the woes of the international players would be the legislative hurdles in setting up a distribution network. Given the fact that liquor distribution remains a state subject and involves several restrictions and legal impediments, building a distribution infrastructure is a long term game plan, which would take a few years at least. Resorting to a retail push therefore would be a difficult proposition for the new entrant. So the best bet for him would have been that of generating a consumer pull through effective

advertising. And that no longer exists. For the existing domestic liquor players, such as United Breweries, McDowell, Shaw Wallace, Radico Khaitan, Jagatjit Industries etc, who have strong brand equity, as well as an established distribution network, the impact of the ban would certainly not be so severe. Of course new brand building and relaunches would certainly become difficult. However, the ban is likely to have a positive impact too. Besides keeping the foreign competition at bay, it is also likely to help improve margins of these domestic players.

The domestic players have established a strong equity for their brands like KingFisher, Haywards, Royal Challenge, McDowell No.1, Aristocrat, Bagpiper, Contessa, 8 PM, etc in the national and regional markets. Ad spends of leading player's range anywhere between 7% and 13%. Infact UB spends about 28% of sales on advertising and sales promotions. If a player on an average spends about 10-12% of sales and assuming that 50% of the spend would be on direct consumer promotions and surrogates such as sponsorships, the rest would be spent on advertisements. While this would be shared between the print (mainly magazines) and the television media, television advertising would certainly form a larger proportion in value terms. If this advertising is done away with, it would mean a saving of at least 3-4% of sales. For companies like McDowell, whose operating margins hover around 6%, this could mean up to 50% gain in margins.

More importantly, the anticipated rise in spending on television media expected in future would not happen. This would certainly help these companies prop up their bottom line. Global players who are already in the market such as Bacardi, Pernod Ricard, UDV, Fosters, etc, who would have been relying on building up their brand equities in the local markets are in for a tough time. It could even have some fall out on the considerations of some global players who have not yet firmed up India plans. Another big advantage that smaller domestic players will have is that they will become more attractive acquisition targets, if not for their brands, at least for their distribution reach which will now be even more critical in a scenario of restricted advertisements.

While analyzing the research findings we found two contradicting points of view with relation to the promotional strategies used by the producers. Both are analyzed below.

Arguments in favor of promotion of alcoholic beverages

The Rs 60,000-crore Indian beverage alcohol industry has always been operating in a restricted and controlled environment. It is a real shame that an industry that is a legitimate business in the country and which contributes a whopping Rs 22,000 crore just in revenues to the government, is not allowed to market its products freely and communicate to its consumers directly. This restrictive environment is also applicable to the beer and wine industry.

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

In fact, recently the government of India has in a unilateral move sought an amendment in the Trade and Merchandise Marks Act of 1958 to explore possibilities of denying extension of registration of trademarks used for brand names of cigarettes, tobacco products, wine, alcohol, liquor and other intoxicants to other products.

This has ostensibly been done to check surrogate advertisements of other products of liquor companies. The sales volumes of these products advertised do not justify advertisement expenditure incurred by the companies, it is argued. The alcohol beverage industry is justifiably upset with the proposed axe on advertising and promotions of legitimate economic activity through trademark extensions. These should not be confused with surrogate advertising wherein no products may exist.

Freedom of commerce should be preserved and brand extensions of cigarette tobacco and liquor products should not be banned notwithstanding similar graphics, if they do not propagate smoking or drinking merely on the ground of the brand names being similar.

Genuine businesses 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.

Some of the product extensions like water, soda, and music cassettes have sales which run into millions in value and volume. McDowell's sold 1.5 million cases of water and soda, through its 20 franchise plants. Water and soda are added to our core liquor product, they are legitimate businesses.

Umbrella branding is a known phenomenon in marketing and today, we have omnibus brands like Nestle, Amul, Samsung etc which sell many products under one brand umbrella. Surely, the reverse logic would also apply that if any of the above-exemplified companies were to come out with a beverage alcohol, their original products cannot be banned.

Brand building As far as co-relation between value of goods being sold and quantum of advertisement is concerned, this is a commercial decision why companies spend more than their turnover on a set of products. However, for brand building exercises, huge investments are undertaken and they at times can exceed the value of the sales turnover.

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.

Liquor companies do not need any approvals to advertise products other than liquor. Therefore, denying any trade Mark Registration for products other than liquor, will not affect their business unless the Trade Mark Act is amended to categorically deny products having liquor brand names for brand extensions.

As of today, this does not lie under the purview of the Trade Mark Act. According to legal experts, any amendments that seek to prevent trademark registration of industry specific brand names in other classes of products or services would be ultra virus of the Trade Mark Act. According to them, the Trade Mark Act Common Law permits brand owners to use and protect even their unregistered trademarks. Therefore, a brand owner could still use their trademark for other goods and services even though they may not have obtained trademark registration.

Responsible industry The industry is fully sensitive to the need for shielding the young and the impressionable from getting carried away. Rather than an outright ban on advertising, the government should endorse the Code of Conduct which specifies the timings when the ad should be aired, non-targeting of children, disallowing teenagers in ads etc.

Instead of an outright ban, the industry has been underlining the need for dialogue and subsequent guidelines outlining dos and donts of advertising. It could specify timings when the ads should be aired, not target children, disallow teenagers in ads, not allow ads that are glamorous or suggest increased attractiveness to the opposite sex after alcohol consumption.

The industry on its own has shown restraint. Society For Alcohol Related Social Policy

Initiative (SASPI) is a self-evident initiative in this direction. McDowell's and Seagrams have undertaken campaigns for responsible drinking. For the government to make progress in an affirmative manner, the Government should consider the alcohol beverage industry's self-imposed Confederation of Indian Alcoholic Beverages Companies (CIABC) code on advertising, benchmarked against guidelines in the US and UK.

THE CIABC code clearly lays down that while advertisements for promotional items, accessories or services using brand names of alcoholic beverages should not feature bottles, copy matter directly suggesting alcoholic beverages (or drinking vessels filled with alcoholic beverages or what appears to be alcohol beverages) nor should they show people drinking such products. The alcohol beverage industries have a genuine intent to not just market their products in a socially responsible manner but to also comply with the appropriate Federal or state laws concerning the marketing of alcohol beverages.

Their view is that it is regrettable that an industry which is allowed to sell its products, is not allowed to advertise the same products even after making a mandatory statement advising customers to use in moderation; (or with a health warning). Brands need to be advertised, and the consumer makes his brand choice partly by the process of commercial communication to the cable and satellite networks. And the advertising industry, which is just recovering from a couple of disastrous financial years, is loathe to let go of the Rs 900 million being spent annually on surrogate advertising.

Arguments against promotion of alcoholic beverages

Speaking of millions, a market survey done 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. And given the conservative cable penetration estimates of 50 per cent, this is still a big number that can be persuaded by surrogate advertising.

There are brands and brands. Do all the surrogate brands that are so heavily advertised exist? In 2002, Jagatijit Industries, the maker of Aristocrat Whisky, advertised a product called Aristocrat Apple Juice. The company reportedly confirmed availability of the fruit juice in Delhi, Haryana, Punjab and Rajasthan. Yet no reputed shop in Delhi has ever seen it. Leave alone sell it. I remember in the late 70's, the walls of BEST buses in Bombay (as it used to be called then) being plastered with a brand of tea called Black Stallion Tea. It turned out to be a real dark horse as the tea never found its way to kirana stores. But co-incidentally, a whisky of the same name made its way to liquor stores and bars. Clearly, if these are brands, then where are they today? If Royal Challenge is promoting its golfing accessories so heavily, then should not one find it in the golf course itself? The consumer is not a moron. Shes your wife, said David Ogilvy. And yet, are our marketers underestimating our consumers? And will irresponsible marketers ultimately get what they deserve? Only time will tell.

ANALYSIS AND INTERPRETATION

A vast collection of data has been collected from different sources, and has been analyzed to generate this report. The research is highly qualitative in nature. The views of focus group have been considered as inputs for the research. As a result of these, no statistical tools have been used for the purpose of the research. The output of the research is based upon the focus group participants and the analysis of the author.

Focus group opinions: Five of the nine participants were of the opinion that direct advertising of alcoholic beverages poses a threat to both adolescents and adults. Six participants felt that surrogate advertising is not harmful. Six participants felt that surrogate advertisements would not attract non consumers. Eight participants opinionated that excessive consumption of alcohol is a social evil. Seven of them were strongly in favor of the fact that banning the advertising of these products while allowing their production is not the ideal solution to the problem. All nine of them felt that word of mouth is powerful enough for people to start drinking alcohol. All nine participants were of the view that the government should use Advertising as a way to inform the citizens of the ill-effects of alcohol consumption. Probably the most important view that was agreed upon by the whole group was that excess consumption of alcohol is not just harmful for the health of the consumer, it also affects people who are a part of the consumers life such as spouse, children, friends etc. Hence it is a social evil and proper steps must be taken to control it. Also, all participants were of the belief that alcohol producers must create awareness about the harmful effects of excessive drinking.

When asked about the producers right to promote their products and their right to do business and compete in the marketplace, the opinions were divided with three people voting for the producers right to promote their products since they were allowed to produce them and three people voting against saying that promotion would attract the under-aged population. Three people were neutral and did not vote either way.

The research study is highly significant considering the current scenario prevailing in India. The government has banned the advertising of certain products such as alcoholic beverages due to health related and other reasons. One cannot stop anyone form either smoking or drinking, and neither can they stop the sale of these goods in the market as they are not illegal. But what the Government has done is, it has created hurdles in the way the message would be delivered to the audience. But, has this ban really worked and more importantly is there a need for the ban in the first place? This is a highly debatable issue, and there is lot of uncertainty regarding this. But, there have been only a few articles that would not agree with the fact that such a ban or imposition would reduce the alcohol and tobacco consumption. Most articles talk about the ill-effects of alcohol and its promotion but there are very few articles which talk in favor of alcoholic beverage producers right to promote their products especially since promotion plays a major role in the beverage industry.

For instance, according to a test conducted to understand the importance of promotion in building brand loyalty, it was found that consumers relied more on promotion than on other factors like taste or quality in selecting a particular brand.

One article says that, "alcohol advertising ban may actually lead to the increase in sales of alcohol, in turn increasing the alcohol consumption". Yet another article that holds regard in this context is the one by Prof. Sydney Houston, Institute of Economic Affairs, London, who is of the idea that "Children do not necessarily become smokers or drinkers after looking at likeable cigarette or alcohol ads ".

The governments decision to ban advertising these specific products while allowing their production and consumption may not be the ideal solution as seen from the above

abstracts. This has spurned us to conduct this research to come up with better solutions than simply banning advertisements. Observers believe that when the license to set up the industry, manufacture and sale is given, it would be suicidal for the authorities to take a high moral ground and stop the advertisement. The tobacco and liquor industry provide a major chunk to the exchequer in the form of the Central and State excise and under other tax heads. The government is keen that surrogate advertising does not advertise liquor; to that extent the surrogate advertising is wrong. But manufacturers have every right to sell the product. Moreover, marketing experts believe that Surrogate advertising does not attract new customers and does not impact the sales of the product; it only helps in leveraging brand equity. Additionally, the Government ban on Surrogate advertising has several loopholes which are constantly being scrutinized and used by the manufacturers. We know that the Cable Television Act, for instance includes cigarettes, tobacco products, wine, alcohol, liquor, feeding infant milk substitution, feeding bottles and infant food. The wider the subjects, the greater the confusion and the more the loopholes. Clearly the health hazards from tobacco are more clearly documented than liquor. So the legal network will be a lot strict eventually. Liquor must fight its own battles and not look for support from tobacco. It must voluntarily do things like scheduling ads after 9 PM like in the Western countries. They should try not to hoodwink people saying that branding is an investment etc., when they have no intention of building the surrogate brand. Today, India is shining. And is part of the global economy and the WTO. People are more literate, more knowledgeable. And there are more activists waiting to get into the limelight that the media is all so keen to provide. Society for Alcohol Related Social Policy Initiative (SASPI) is a self-evident initiative in this direction. Mc Dowell's and Seagram's have undertaken campaigns for responsible drinking. People have been drinking for ages. And will continue to do so. The liquor industry has a role to play in our economy. Its members also have a role to play as responsive and responsible corporate citizens. It has shown responsibility on occasions by doing public

service advertising (as Seagrams had done earlier). The challenge is to build brands within the framework of the law. Not around it. 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 the government should make certain that the public should not receive wrong messages at the behest of promotional strategies.

Below are some of the advertisements where the manufacturers have used two different kinds of promotional techniques to promote there brand. In the first method the promoters have used an indirect method called surrogate advertising and in the later case they have used direct promotion.

Below are some examples of surrogate ads:

Headline: The new look

Subhead: 'It's flying'

Bodycopy: Packaged drinking water

Baseline: -

Agency: JWT

Client: Kingfisher

Headline: Normal screen. Flat screen. Or no screen.

Subhead: Foster's and IAGT bring you a dream chance to get to the Melbourne Grand Prix 2002. To find out how, pick up the latest copy of IAGT - a guys magazine from The Times Group and take part in the F1 Grand Prix Feelyour-Adrenaline contest.

In the above two ads they have used surrogate advertising which means i duplicating the brand image of one product extensively to promote another product of the same brand. In the first case promoters have used the brand name in promoting package water and in the second case they have used brand name by conducting a contest.

These are some examples of direct promotional ads:

Below are some of the examples where they have used there brand name directly by not mentioning any product .These kind of advertisements may influence other segments also which have not been targeted by generating curiosity.

Headline: Keep walking

Headline: "I am a slow walker, but I never walk backwards." Abraham Lincoln

Subhead: -

Bodycopy: -

Baseline: Keep Walking

Agency: -

Client: Johnnie Walker

Headline: -

Subhead: Sir Charles Spencer Chaplin (18891977)

The essence of his art was pantomime; only five of his films had spoken dialogue.

Bodycopy: -

Baseline: Genuine quality speaks for itself.

Agency: Bates

Client: Allied Domecq Spirits and Wine India

Headline: -

Subhead: The power of consistency. The strength of maturity. Glen McGrath. Truly Royal Stag.

Bodycopy: -

Baseline: Truly world class

Agency: -

Client: Seagram's

FINDINGS AND RECOMMENDATIONS

Indirect advertising like surrogate advertisements do not have much effect on non targeted group Surrogate advertising mainly serves the purpose of brand recall. It does not necessarily increase the sales of the product. It is not successful in attracting new customers but serves the purpose of reminding existing consumers only. There is a lesser chance of adolescents getting influenced by such advertisements. Rather than an outright ban on advertising, the government should endorse the code in operation which specify the timings, mediums and programs when the ad should be aired. Commodities such as alcohol, tobacco and cigarettes are habit-forming with a high degree of brand loyalty and rely on word-of-mouth product information rather than promotional strategies. Consumers should be given a choice to gain knowledge about the market and make rational decisions. In the absence of this there will be bootlegging and adulterated products lining up on the shelves. The industry on its own has demonstrated the maturity and sense of responsibility to promote restraint and moderation in consumption of alcoholic products. Freedom of commerce should be preserved and brand extensions of cigarette tobacco and liquor products should not be banned notwithstanding similar graphics, if they do not propagate smoking or drinking merely on the ground of the brand names being similar. Regulations should be put in place to see to it that messages which might influence adolescents should be avoided. The ill effects due to consumption of alcoholic beverages should be made clear during the advertisement itself. Government should take concrete steps to propagate the health hazards caused by its consumption.

Direct marketing of alcoholic products should be avoided and banned because it may attract under aged and teetotalers to start consumption

Conclusion
Alcohol consumption is a social evil but after analyzing the research findings, I am of the opinion that the governments ban on advertising of alcoholic beverages while allowing their production and consumption is not an ideal solution to the problem. All businesses have a right to promote their products and government intervention to curb that right is not the answer to curb this social evil.