SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE MASTERS DEGREE IN INTERNATIONAL BUSINESS (MIB)
SUBMITTED TO: INTERNAL GUIDE Richa sinha Asst. professor IMS Dehradun EXTERNAL GUIDE ranvijay singh ub group dehradun
ACKNOWLEDGEMENT
The completion of a project is never a unilateral effort. Through this sentence I wish to make a modest effort to thank and express my gratitude to all those who extended their co-operation and assistance for this project. I am highly indebted to professor richa sinha, our internal guide ims dehradun, for her inspiration, guidance and encouragement during the course of this Research work assigned to me. She was our guiding force right from the inception of the research till its completion.
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/Ms.
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..is a bonafide student of IInd Semester of the Masters Degree in International Business (MIB), Batch 2011-13, of Institute of Management Studies, Dehradun under H.N.B.Garhwal University Roll No. ... . He/She has completed his/her project work entitled
.. under my guidance. I certify that this is his/her original effort & has not been copied from any other source. This project has also not been submitted in any other Institute / University for the purpose of award of any Degree. This project fulfils the requirement of the curriculum prescribed by this Institute for the said course. I recommend this project work for evaluation & consideration for the award of Degree to the student.
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Rationale of the study ----------------------------------------------------6 Introduction-----------------------------------------------------------------7 Industry Structure and developments----------------------------------8 Opportunities and Threats -----------------------------------------------10 Future Outlook ------------------------------------------------------------ 12 DEFINING SURROGATE ADVERTISING ---------------------------13 LIQUOR ADS ON TV -----------------------------------------------------16 -KABHI WHISKY, KABHI RUM---------------------------------------20 Allowing socially responsible ads by Liquor Company------------------ 22 Advertising in the Liquor category on Televisio-------------------------23 Surrogate advertising Needed, a spirited attack -------------------26 Liquor Companys uses overseas series to Circumvent ad ban: -----------30 Kingfisher, Wills spared from surrogate ad ban: ---------------------- 32 Surrogate liquor ads flow into FM radio: -----------------------------------34 I & B Ministrys Slashing of Surrogate Ads ------------------------------35
Foul Cry by Major Liquor------------------------------------------------------39 Bacardi origins ------------------------------------------------------------------40 BACARDIS WAY OF SURROGATE ADVERTISING--------------------46
UB Group.48 PROMOTIONAL MOVES OF UB GROUP FROM TIME TO TIME.53 Methodology..59 Questionnaire60 Analysis and Graphs.62 Conclusion..70 Bibliography -----------------------------------------------------------------------72
continuous up gradation of technology, customer oriented marketing and unique background integration process in manufacturing.
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My research objective is to find out that How successful has Surrogate Advertising been in promoting the liquor Brand Is surrogate advertising actually for launching a new product or is it for manipulation of the existing liquor brands for sales? We get a 100% recall value for the actual liquor products even though surrogate versions were being mentioned on T.V.
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INTRODUCTION
Liquor Industry has one of the most lately growing market values in India. The liquor industry does make about by campaign to entire customer. Therefore the assurance of the customer is increasing day by day this is mainly due to the advertising. In an industry where change is the only constant, survival depends on the quickest reaction time. When technology advances happen at the blink of the eye, one has to keep pace or get left behind. To achieve this, the companies have to lay emphasis on total consumer satisfaction through continuous improvements by their own capabilities and teamwork. For this products should be backed by strong R & D, continuous up gradation of technology, customer oriented marketing and unique background integration process in manufacturing.
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There is a surrogate approach towards liquor advertising in India. There is not much that they can do except market themselves through promotions with the latest celebrity. Hollywood films like Scent of a Woman have helped in brand endorsement.
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which is estimated to be more than the size of the IMFL market? The market is heavily skewed in favor of whisky, accounting for around 60% - 65% of the IMFL market. There also exists a huge unorganized sector (estimated to be as large as the organized sector) involved in the production and safe of cheap liquor (which is distinctly different from excise duty paid country liquor). This trend is witnessed most in the rural areas of the country. The Indian Liquor industry is also characterized by the presence of immense competition amongst the major domestic liquor companies. Regulation The liquor business is among the last few industries that are still under the licensing policies of the Central Government and will likely see the most significant growth over the next 2/3 years on account of more progressive regulation. Liquor, in India, is a state subject, not a central one, in that each state controls the excise duty structure and also the distribution of liquor. The event, liquor manufactured in one state is sold in another state, the incidence of import duty and export duty results in high product
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prices at the consumer end. It is this non uniformity of the duty structure coupled with different types of distribution arrangements dictated by the state governments that makes manufacturing and marketing of liquor a very challenging task for Indian companies. Distribution while unregulated in some states such as Maharashtra and West Bengal is regulated in some others such as through auctions (Haryana & Rajasthan, Bihar, Jharkhand) or through government controlled procurement agencies (such as Tamil Nadu and Andhra Pradesh). There are around 100,000-110,000 licensed liquor outlets in India, with another 10, 0000 outlets such as bars and restaurants. Advertising is also regulated by the Central government and liquor players are not freely allowed to advertise on electronic and print media.
o o
Past growth 15 % @ per annum Brown spirits - particularly whisky, rum & brandy account for over 75 % of this market
Industry Structure
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Major brands (manufacturers): Signature, Blue Riband (UB Group), Aristocrat (Jagjit Industries), Smirnoff, Gilbeys Green Label, Malibu, Archers Peach Schnapps (International Distilleries India), Passport (Seagrams), VAT 69, Black & White, Black Dog (United Distillers India)
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With duties coming down over a period of time and imported liquor coming under the purview of OGL, there have emerged excellent opportunities for their trading in the domestic market products like imported, wines, beer, breezers and coolers etc. should have good opportunities for an aggressive player. Taking advantage of this opportunity, Radico has already entered into exclusive marketing distribution arrangements with earnest and Julio Gallo, California, USA, the owners of the largest winery in the world distribution of their wines in India and also with Interbrew, of Germany for the distribution of Becks beer in India. The company is also planning to introduce Ready to drink products like Bacardi breezers and coolers through a tie up with major foreign players. This segment is likely to see good growth in future as consumers get acquainted with the product gradually.
Future Outlook It is believed that the Indian liquor industry is set to grow exponentially over the next 4 to 5 years on the back of a major
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unshackling of the regulatory structure governing it. In the last 2 years, at the State level, the Delhi Government has thrown open retail distribution to private parties, the Uttar Pradesh governments new excise policy has substantially increased the contribution per case of country liquor for most distillers in the state, the Tamil Nadu Governments decision to allow 100 ml packs of IMFL to wean indications towards this direction. At the central government level, there is a proposal to charge a uniform excise duty as opposed to state specific excise duties.
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worn by the Indian cricket team. Wills lifestyle is also an example of surrogate advertising. Moving ahead the liquor companies have successfully used the name of the core brand with some other products like Royal Challenge. Similarly, Bacardi extends its brand name by producing Bacardi cassettes, Teachers advertises in the name of Teachers Achievement Awards, McDowells in the name of the Soda, Aristocrat, 8 PM, Contessa and AC Black go ahead in the name apple juice, and Gilbeys and Kingfisher in the name of water etc. He also talked of an advertisement (surrogate in nature) in which a small line of 6-/8 front size statement reading CDs and Cassettes of the 100pipers pure music series are available in select outlets whereas no CD, cassette or music system is shown. Above all, a Seagrams 100 piper (which is a wine) is written in a manner that it is creating an image of bottle sticker, i.e. round folded sticker. In INDIA there are no specific laws to control the activities relating to surrogate advertisement. However the government issues certain directives from time to time which are based on various laws and codes like the Code for commercial Advertising on Doordarshan and
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The cable Television networks (Regulation) Act, 1995, Press Council of India Act 1978 and the Cinematography Act 1952. However the regulation is not going to affect surrogate advertising because TV channels are free to air ads of kingfishers mineral water and other products like Aristocrat apple juice though it is clear that these products have been produced by the liquor companies only for surrogate advertising. Secondly, the consumers of liquor and tobacco companies are mostly habitual of their brands and they are not
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LIQUOR ADS ON TV
Scenario 1: The handsome young guy celebrates his corporate victory in his office. Pulls out a bottle of Aristocrat from one of his desk drawers and savors the brownish looking fluid. Cut to the next scene: in the hazy background which looks like a poolside party going on, our hero again is shown dancing with a pretty girl. Drinking Aristrocrat APPLE juice.
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Scenario 2: A few young men out on a trek. They finally reach their destination to celebrate while their adventure gear is prominently displayed beside them. The adventure gear is from Four Square, a brand of cigarettes. Scenario 3: A gang of boys and girls is seen dancing in the rain. Obviously they are having a good time, courtesy MINERAL WATER, from the `King of Good Times' aka as Kingfisher
Such TV commercials have been flowing like beer on tap on various television channels despite the Indian government frowning down upon the practice though informally. No more. The authorities have started talking tough and ordered in no uncertain terms that satellite channels stop airing surrogate advertising involving liquor.
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Some channels have complied while others are likely to follow suit. Figures about how much television advertising spends by the booze go glug-glug courtesy the governments are hard to come by one estimate placed it at a giddying Rs 2700-3000 million. Phew! Enough to make even a teetotaler hit the bottle. But media planners and buyers believe they won't have to do that. Liquor advertisers will find an out. Already Bacardi has invested in Bacardi blast night parties, which serve as a very effective branding vehicle. "With the government cracking the whip on surrogate advertising on TV, the liquor companies will move to intensify ground events and explore other such below-the-line avenues for promotion. Outdoors is also an option. A lot of that was already happening with booze cash backing musical concerts, exhibitions and seminars. Royal Challenge, for example, sponsors golf events. fells that
there is a going to be a rise in the number of liquor and tobacco sponsored events in the near future in the effort to neutralize the ban on ads on TV channels.
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Some have even taken the cable TV route working closely with cable operators to insert ads or "crawlers" during movies that are aired on home video channels. Some liquor companies going to cable operators to have their ads aired on the home video channel on which the government's attention has not been drawn till now is also been banned. The advantages were two-fold on advertising on cables: cable operators' charges for ads are just a fraction of what satellite channels charge and in the short-term this can be an alternative to Outdoors and direct advertising. What could spoil the party however is the fact that in some places like Delhi the state government has banned hoardings? Below-the-line advertising will increase and hog a bigger share of the media budget of liquor and tobacco companies. Of late TV channels have seen a sufficient of commercials pegging aerated water, mineral water, bar accessories by liquor companies. 8 PM Apple juice, Bagpiper soda, Kingfisher water, Aristocrat Premium apple juice, Haywards 5000 dart boards are just a few of the examples. Johnnie Walker Scotch whisky promotes a series of successful stories on CNBC India through sound bytes from prominent Indians like Amitabh Bachchan. Almost every channel has been party to the surrogate commercial brigade, with the sole
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exception being Doordarshan, which by mandate did not carry such fare. "What are advertisements for?" It is a method to communicate to and come in contact with the consumer. TV channels may have been one such contact point. Whenever and wherever there is an opportunity to come in contact with the consumer it can be exploited it can be through his mouse pad or the club he frequents. So, the liquor companies have options and will go in for that marketing too. Though liquor companies did not seem to be worried, as the ad expenditure of liquor companies have not come down with the ban on TV ads. Annual revenues from surrogate advertising for the television industry as a whole is about 4 per cent of total ad spends - between Rs2000 million and Rs2250 million.
According to one TV channel executive it was niche channels that would be affected more than general entertainment ones. In the first place the categories of advertisers were limited as the viewer profile was either up market or youth-specific. Movie, sports, news and music channels were the channels that he felt would be impacted most. Looking abroad for parallels though, India seems to be working in reverse direction. In the US for instance, while beer ads have been a
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regular feature of the TV advertising milieu, when it comes to hard liquor, the spirits industry has lived under a voluntary ban on the placement of ads on TV for the past 50 years. But with declining revenues over the past two increasingly health-conscious decades, the industry has begun cautiously testing the regulatory climate by placing ads on some local TV or cable stations. There is a heated debate going on in the US over the wisdom of this reversal, especially after NBC announced towards the end of last year that they would allow liquor commercials to run during late-evening programming, making them the first national network to do so.
Coming back to India, as the government tightens the screws and takes the fizz out of the liquor companies' blast, the affected ones are re-drawing their strategies. The restriction put by the government can be termed a non-option because it applies to the competition too. Hence, all the constituents affected by the liquor crackdown have to take cognizance of the fact that the tipplers' party is over. If they don't fall in line they may end up with a hangover. That's if the government acts on its threat putting its weight behind the liquor ad ban move, it is quite likely that it is dry days for television channels even for surrogate ads.
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Liquor Control and Licensing Branch can prevent the licensee from including liquor prices in future advertising) Show people drinking liquor, or anyone who is either intoxicated or behaving irresponsibly or illegally Associate liquor with driving Be directed at minors or placed in locations used or visited mostly by minors, such as theaters and playgrounds Depict liquor as: o One of life's necessities o Key to social acceptance or personal success o Central to the enjoyment of an activity, or o A status symbol. In addition: Ads for bars and winery lounges may not use Ads for restaurants must make clear that serving food Ads for companies that make beer, wine or spirits pictures of minors (in BC, that's anyone under the age of 18) is the restaurant's primary purpose sold, and Ads for companies that make beer, wine or spirits are not to be shown on a theatre screen before a movie. may name a liquor store, bar or restaurant where the product is
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So, we have Club soda as a stand in for bagpiper whisky, or mineral water for kingfisher beer. Keeping pace with the I.T. mode, there are websites for Seagram whisky and Bacardi rum. A few sips of AC Apple juice in a TV commercial drop the neckline of a nubile woman by several inches (as imagined by the imbiber). Guess what would happen if AC juice ferments to Aristocrat whisky for which the former is surrogate? Brand stretching has become a lifesaver of the liquor advertising industry, besieged by regulations, which can be breached with impunity. Cheers to soda water with spirit
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The latest proposal: allow socially responsible ads by liquor companies Faced with a 7 to 11 percent loss in revenues after the ban on direct and indirect liquor advertising, a group of TV broadcasters has submitted a proposal to the government to allow them to use socially responsible ads sponsored by liquor companies. A committee of broadcasters headed by I&B special secretary Mr. R.R. Shah, which was set up the government recently to find out what constitutes surrogate ads, has recommended to the government that socially useful advertisements sponsored by liquor companies should be allowed on TV channels according to a top official in a private TV channel. Socially useful ads sponsored by liquor companies are a very popular concept in the US and the UK, and are likely to be well accepted in India as well, as a member of the committee on surrogate ads. Since public service endorsement does not lead to promotion of liquor ads, these cannot be clubbed with direct/indirect or even surrogate advertising of liquor. The socially useful ads or public service endorsements, which this committee is referring to, may not necessarily talk about drunken driving as some liquor companies have been doing so far. Although the government hasnt decided whether to allow liquor whether to allow liquor companies to advertise
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socially responsible ads on. TV channels there are feelers that the government is warm to the idea. In fact, broadcasters are even open to the idea of the government is warm to the messages can be allowed on TV channels. For instance, if the government feels that only medically helpful or crime prevention messages must be beamed on channels, broadcasters are ready to abide. Advertising in the Liquor category on Television registers a negligible dip of 2% in 2011 as compared to 2010 Key Findings:
Advertising in the Liquor category marks a negligible dip of 2% in 2011 compared to 2010. Liquor advertising spends on Television varies across the years 2000-11. Feature Films are the most preferred program genre for Liquor Advertising in 2011.
A look at the trend of TV advertising in the Liquor category in year 2011 compared to 2010.
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We can see that Advertising shows a negligible dip of 2% in year 2011 compared to year 2010. The graph shows the indexed spends of the Liquor category on Television Advertising since 2010. Advertising in the Liquor category is expected to be quite seasonal. Let's check out whether that's actually the case.
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The graph shows that Liquor advertising spends on Television varies every year across 2010-200.
Where do we see ads for Liquor? The graph show that almost 29% of the total advisement on Liquor is on Feature Films. The other program genres, which are favored by Liquor category, are Drama/Soap, News Bulletin, Cricket, Music Shows/songs, and Comedies and so on.
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A market survey in 2005 revealed that advertising has a direct influence on the consumption habits of 481 million people in India and an indirect impact on 300 million `aspirants' from the lower income group. Considering this and realizing that nearly 50 per cent of the television owners have access to cable channels, there is no doubt that the hidden call for alcohol consumption behind the surrogate advertisements is not escaping the eyes of viewers in the world's fourth highest liquor-consuming country. Surrogate advertising defeats the very purpose of banning liquor advertisements. Sociological studies have shown that, in India, a significant share of income of a large section of the population is spent on liquor, potentially leading to financial distress and health hazards. According to the International Wine and Spirit Board, a liquor industry publication, there will be a jump in the number of people reaching the legal drinking age of 25 within the next few years. The implication is that the problem is going to grow. The motivations of firms look even more suspect when they advertise products that cannot be bought. In 2010, for example, Jagjit Industries, the maker of Aristrocrat Whisky, advertised a product called `Aristrocrat Apple Juice.' The company reportedly confirmed availability of the fruit juice in Delhi, Haryana, Punjab and Rajasthan, yet, no reputed shop in Delhi had ever seen it, let alone sells it. However you can find it now. Understanding the gravity of the situation, the Indian Broadcasting Foundation (IBF) has started to take on the surrogate liquor advertisements. The IBF decided that Jagjit Industries and other liquor-manufacturing units must get production of the advertisement approved both at the `storyboard stage' and after the production of the commercial. It also ruled that that if liquor companies promote any juice, mineral water or soda, these should be shown in a proper manner and not as trimmings to liquor advertisement. These are welcome steps, but the key point lies in enforcement. If, in a free society, producers have a legitimate right to let consumers know about their products through advertisements, consumers have the right to information in adverts that are clear and honest. 40
Surrogate advertisements are not only misleading, but also false and dishonest in many cases. With surrogate advertising so widespread, this is the moment to tackle the problem head-on. There should be stringent regulatory measures to curb the practice, such as: 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 to encourage surrogate advertisements; Consumer awareness programme could be created 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.
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This is not cricket! - Liquor Companys uses overseas series to circumvent ad ban: WITH the Government trying to clamp down on surrogate advertising, liquor companies seem keen to bat out the ban. Even as liquor brands have traditionally been associated with up market sporting activities like golf, polo, derby and yachting, companies are now turning towards the game of the masses - cricket. After the triangular series at Zimbabwe in 2011 (of which Royal Stag was the associate sponsor), the India and Zimbabwe Test series will be called the Royal Stag Cup. Till date Royal Stag has used several international cricketers as brand endorsers. This is the first time the company has forayed into tournament sponsorship. Similarly, the ICC World XI Vs Australia series to be held Down Under will be called the Johnnie Walker Super Series. As both the series were being held outside India it would be difficult for the Government to blip out the liquor brands. Since the matches will be beamed into Indian drawing rooms live, the brands will enjoy good visibility. Internationally beer brands such as Fosters and Lion have supported cricket in Australia and Sri Lanka respectively. Meanwhile, Royal Stag has roped in Zimbabwean 42
Vice-Captain, Heath Streak as their new Royal Stag brand ambassador. Other celebrity Royal Stag cricket endorsers include Australian Cricket captain Ricky Ponting, and India's ace off spinner Harbhajan Singh. The Information and Broadcasting (I&B) Ministry's efforts to ban surrogate advertising of liquor brands has reached a naught. A few months ago, it had sent out notices to various television channels to withdraw advertisements by liquor companies. But within a few weeks of the notices being issued, surrogate advertising made a comeback on television. In fact, a few liquor companies have been advertising during the ongoing cricket series as well between ENGLAND AND INDIA. However channels were categorically told that there is a complete ban on advertising by liquor companies. The Government is also handicapped by procedure wherein it can take action against channels only after receipt of complaints. "The Government cannot suo motu issue show-cause notices. It has to first receive complaints," said official sources. Liquor companies on their part state that their advertising is self-regulated and comply with the Indian Broadcasting Foundation and the Advertising Standards Council of India code.
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Kingfisher, Wills spared from surrogate ad ban: In a significant policy shift, the government has in principle decided to permit nonliquor and non-tobacco advertisements of Kingfisher and Wills brands on TV channels. This is despite the fact that the Cable TV Act prohibits advertising of liquor and tobacco. According to I&B ministry sources, the government will, however, consider granting similar exemptions on a case-by-case basis to such genuine businesses. The Cable TV Act is also likely to be amended on these lines later. A committee, comprising representatives from home, health, law, women empowerment and information & broadcasting ministries, is still examining the objection raised by the UB Group (Kingfisher water, soda and airline) and ITC (Wills Lifestyle) over the ban. A government however gave both Kingfisher and Wills a green signal soon. The UB group and ITC have been successful in convincing the government that they have genuine non-liquor, non-tobacco businesses, though with the same brand names. According to industry estimates, liquor advertising (surrogate) is worth Rs 250 crore to 300 crore in India. Even as there are several liquor brands indulging in surrogate advertising on TV, only Kingfisher is likely to be spared for now. ITC, a major tobacco brand, too would be allowed to beam its Wills Lifestyle ads. For other liquor companies, decisions will be taken on a case-to-case basis, till the policy is fine tuned, the source said. Before tobacco advertising was banned, ITC alone had an ad budget, on both television and print, of Rs 100 crore, as per Lintas Media estimates for 2011. Of this, Rs 76 crore was only for print. As for Kingfisher, its airline ad budget alone is around Rs 10 crore. In a recent interview, UB chairman Vijay Mallya had in an interview that I&B minister S Jaipal Reddy had assured him the ministry couldnt take a view that Kingfisher ads are surrogate. Certainly not with an airline. We already have a very significant mineral water business Mr. Mallya had said. The government clampdown on surrogate liquor and tobacco ads had begun during the National Democratic Alliance (NDA) regime. In fact, former information & broadcasting minister Sushma Swaraj was in the process of formulating a norm on brand extension and surrogate advertising based on the volume of non-liquor or nontobacco business. The reasoning, at that point, was that if theres a standalone genuine business owned by a liquor/tobacco company, the brand could be advertised. 44
However, last month, the UPA government issued notices to liquor/tobacco companies and television channels, stating that theres a blanket ban on advertising liquor.
Surrogate liquor ads flow into FM radio: Even as the Information and Broadcasting (I&B) Ministry is clamping down on surrogate liquor ads appearing on various television channels, these ads seem to have crept into the various private FM radio channels. Recently Guinness UDV's Gilbey's Green Label and UB Group's Romanov have been advertising on some private FM channels in Mumbai and Delhi. But just as liquor ads are not permitted to advertise on TV, they cannot be heard on radio. Officials in the Ministry said FM channels would also have to follow the Broadcasting Code framed for the All India Radio (AIR) and the Doordarshan. Despite this, FM companies seem to be accepting surrogate liquor ads. The officials at radio networks refused to comment on the issue calling it "a touchy one". They merely said that the same guidelines applicable to surrogate advertising on television is
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applicable to radio. Also, advertising by liquor companies on radio has been miniscule compared to television. B Ministry&I have been looking at the issue of surrogate liquor advertisements and have been sending out notices to various television channels. "It has been a cat and mouse game. Once notices are issued the ads go out, but reappear after a while," said the Ministry official. And with the revival of radio through FM, the debate over surrogate advertising on TV is being carried over to radio as well.
The Indian Broadcasting Foundation (IBF) has come down heavily on surrogate liquor ads. While asking channels to withdraw commercials of close to a dozen products, it has also sought changes in several other ads. The ones that have been seen as inappropriate are ads for 8 P.M. Apple Juice where two generals are seen exchanging drinks, Bagpiper Hero, Bacardi
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Breezers, Johnnie Walker, McDowells Signature and Whitehall Party, among others. In some other ads such as the one for Mc Dowells Mera No. 1, it has said that the term spirit should be removed. The words Rare Spirit should be removed from the Royal Channel Golf Accessories while it has suggested a brand new commercial for Aristocrat Premium Apple Juice. Recent at a meeting of the IBF sub committee on surrogate advertising, the apex body comprising all the major broadcasters has categorically said that members of the Confederation of Indian Alcoholic Beverage Companies (CIABC). Seagram, Jagjit Industries and all other alcohol companies must get product of their commercials approved both at the storyboard stage and after production of the commercial. It also said that liquor companies must provide authentic data in the form of a letter from the Chairman or Member of the Board or the auditors giving details of the surrogate products manufacturing facilities, launch date, distribution networks and details of the product category registration. The sub committee said that if the commercial promotes an apple juice, mineral water or soda, it should be presented in a suitable manner and not shown as an accessory to alcohol drinking. The recent clampdown on surrogate ads will affect the television channels as the industry spends over Rs. 300 crore on advertising. According to medial planners, huge amounts of money are spent on regional channels such as Alpha Punjabi, Marathi and Bangla or ETC Punjabi, the expenditure is not very high. The rates for spots on these channels are very low, said a Delhi based media planner. Meanwhile, the liquor companies continue to claim that these ads were for genuine products that are available in the market. The companies had, in fact, some months back, placed samples and other proofs before the Government to defend their case.
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The government, meanwhile, said that the channels would have to adhere to the Advertisement Code, which is part of the Cable Television Networks (Regulation) Act, 1995 as they can take action against channels violating the code by asking cable operators to black out the channel. According to the IBFs code, if a liquor company does not have an adequate number of the product that it was trying to project on television available in the market through sufficient distribution outlets, TV channels do not accept the ads of that company. The case of Haywards was cited as an example and how the ads were taken off the air by TV channels when it was found out the market did not have an adequate number of dart boards the company was advertising on TV, the IBF source said. Apart from the government, the IBF was in the process of finalizing its own advertising and programming code, which was an attempt towards voluntary self-regulation, he added. Still, government sources indicate that the I & B ministry list of objectionable television commercials includes ACP Apple Juice Kuch Bhi Ho Sakta Hai campaign, Royal Stag (that incidentally features two cricketers), Aristocrat, Smirnoff, Bagpiper, McDowells Gilbeys Green Label, Whitehall, Imperial Blue, Macintosh Apple Juice, Royal Challenge and Smirnoff.
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Surrogate liquor ads that have gone off air Advertisements for Haywards 5000, ACP Black apple juice and Radico Khaitans 8 pm apple juice was pulled out from all major TV channels immediately, after the Indian Broadcasters Foundation (IBF) has objected in an act of self discipline regarding surrogate advertising. The broadcasters, henceforth, will seek details of products, which they believe promote non existent products added an IBF official. They met I & B Ministry officials to convince them of their efforts at self-regulation. While a decision has been taken to affect this ban immediately, the implementation is likely to take at least a couple of days since most of the advertisements are inserted in advance. After the I & B Ministry banned liquor ads in 2000, most liquor manufacturers devised ingenious ways of remaining visible even while observing the legalities. Mostly, the hard liquor ads were replaced with more socially acceptable options such as apple juice, even if such products did not exist within their portfolio. Regarding the ACP black apple juiced ad where a woman sheds her clothes as the drink is consumed, the IBF official said, While it might be a genuine ad, the IBF committee has decided to remove it in its present format.
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Even as the Government gets cracking on surrogate advertising by liquor firm, Jagjit Industries, whose ad for AC Black apple juice has been pulled off air from TV channels, alleges that the competition is obfuscating the entire issue to suit their commercial interests. Jagjits spokesperson said the competition through the Confederation of Indian Alcoholic beverage Companies (CIABC) has been canvassing against this ad with the Information and Broadcasting Ministry and the TV channels. There is need for regulation of this sector, but I am against arbitrary regulation. If the ACP Black ad is surrogate sexist below the line advertising, so are many others. At least, this product actually exists, says Jagjit director Deepankar Barat. CIABC chairman Vijay Rekhi, on the other hand says we are only ensuring that the industry behaves responsible in collaboration with the media and the ministry. He reckons that the TV channels that are signatories to the voluntary CIABC marketing code need to enforce it their end. Many a times though ad may be genuine its content violates all norms of decency, and hence the ad should be pulled out. Worldwide, the liquor industry is regulated by a code of conduct, which includes the hours when such ads can be aired, the content and a compulsory statutory warning. In India, the Government has been trying to bring in a sense of regulation.
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Bacardi origins (A) The most famous of light and Puerto Rican rums is Bacardi. Bacardi was originally made in Cuba, and notably the first light rum. They also opened plants in Mexico and Puerto Rico in the 1930s. The Puerto Rican plant allowed importation to the US without the import duty imposed. When Castro took over Cuba and nationalized the rum industry, Bacardi stopped production there and Puerto Rico became their main distillery. Though Bacardi is most famous for its light rum, they also produce other variations. Ron Rico and Don Q are Puerto Rican rum also. France imports a lot of Rum from the French West Indies. Once imported to France, they are often aged. Martinique is the largest producer. Many of these rums are produced with the addition of dunder. Dunder is the residue left from the previous batch and can be compared to the making of sour mash in the States. Haiti also
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produces fine sipping Rums. Cachucha is made in Brazil from sugarcane and often heavily sweetened, as it is naturally dry, this is the main ingredient in Caiparnha. A clock cousin, Caha is made in Pragnay, and other South American countries. In Mexico rum is more popular than tequila. Here it fees by the name of aguardiente.
Flavored runs are gaining in popularity; Capitan more a spiced rum and Malilum coconut flavor are two examples.
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sun, sea and sand in the afternoon, the setting is an evening bash after a tiring days work. That marks a radical for the Cuban rum maker. This is the first time any where in its worldwide markets that Bacardi Martini has had to leave its global communication to local taste. What made Bacardi Martini take such a significant step? The answer lays in the way the market for white spirits, and white rum in particular, has evolved over the last few years. Today, the white spirits market accounts for less than 5 percent of total liquor sales in India and is dominated by gin. White rum and vodka make up less than 2 per cent of the total liquor sales. International Distillers and Vintners (IDV), which launched its Smirnoff Vodka eight years ago, was joined by Bacardi in 1998 when the latter introduced white rum, Carta Blanca. The two were expected to expand the market for white spirits through their marketing blitz. Even today, the segment is a drop in the Indian liquor ocean. To be sure, Bacardi had a great start. In the first year, Carta Blanca sold 20,000, the next year (1999-2000), it achieved the targets of 40,000 cases and the following year sales surged to peak at a little less than 1,00,000 cases. What worried the company was that after that, sales leveled off. In fiscal 2010, Bacardi failed to reach last years sales. Considering many global brands have thought twice about bringing their international campaign into the. So Bacardi began with its world wide Indian
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market, how is it that Bacardi chose this option? Part of the explanation lays in the fact that Bacardi faced a major challenge in defining consumers in the first place. Although rum as a category, primarily dark rum, accounted for 13 to 14 per cent of the total market in 1998, consumer loyalty was extremely high and hard to break. So the task before Bacardi was a formidable one. Price was another barrier since Bacardi came at a premium of over 250 per cent to local rums and whiskies. Research at the time showed that, at best, Bacardi could possible pick up rum drinkers on the fringes, who were open to trying out other types of rum. But this number was too small and uncertain. Bacardi could hope to draw in these consumers long as it preserved the strong, macho properties of dark rum. Most rum drinkers chose the product to make a statement about them and stand out in the crowd. The change we are making in India, while subtle, recognizes the need to balance the playfulness of Bacardi with more of a work ethic if we are to connect even more with the Indian consumer Jeff Macdonald Marketing director, Bacardi Martini India Limited. Research also should that up market consumers were more concerned with how a drink enhanced their image rather than with taste positioning of freedom and passion to get consumer to associate the drink with youthfulness.
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The communication was followed up with elaborate below the line activities. Such as promos (free glasses with a bottle of Bacardi). To increase trials, Bacardi launched a miniature 60 ml bottle at Rs. 35 and then a 375 ml print bottle for Rs. 180. The idea was to rope in consumers who found the drink expensive. The last few years saw Bacardi (in common with other liquor companies) hit by the blanket ban on advertising in the electronic media. In the absence of direct product advertising, the company was left with no option but to rely on below the line activities, such as a dance parties and promotions. The standard of surrogated advertising was taking time since the parent company wasnt used to this form of advertising. Late last year Bacardi kicked off a study to find out what would push sales. The answer lay in making its surrogate communication more relevant for the Indian target audience. While Bacardi targeted a wider consumer segment, young executives dominated its consumption. The company discovered these people are serious about their careers, which have higher priority than having fun. Fun follows after work, while its previous communication was all about fun. Based on the findings, the company roped in filmmaker Prasoon Pandey to create a new film under the aegis of its advertising agency McCann Erickson.
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The new advertising is crafted on simple though of transformation that is how the Bacardi spirit charges up a lazy evening after a hard days work. Bacardis new advertising may have taken a cue from what most other liquor brand are doing McDowells No. 1 Aristocrat and Gilbeys Green have all tried to associate themselves with professional success at the work place. Bacardi is confined that its new initiatives will help bring about a change in consumer habits, although it admits the process may take time. Its assumptions are based on its observation in the US and UK which have been showing a clear move from whisky to white spirits among young up market people driven by a combination of strong image based marketing initiatives and the fact that white spirit have a wider potential as cocktail base. In the US, more than 50 per cent of the market is already white spirits; India tends to follow global trends, says Macdonald. So we are very confident we can grow this segment and take a leading position. The company is introducing a new pack design that will highlight the brands heritage established in 1862 in Cuba and product quality the worlds smoothest rum. The company plans to be more aggressive with its Bacardi Blast music event which attracted over 150, 000 consumers across nine metros, in the year 2004.
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This year BACARDI objective is to make it even bigger and even hotter, with innovative venues the hottest international DJs and hot, new Bacardi cocktail said Mr. Macdonald. Bacardi Blast compact discs (CDs) will be another thrust area for brand building. The company is all set to launch the ninth CD in the series, having already sold over 300,000 copies with four releases reaching number one in the charts. We plan to have Bacardi Nightshift events in even more big way,
says Macdonald. And a new on trade promotion concept that will become the hottest post work party in town. Most of these initiatives are in line with Bacardi Martinis objective to garner quick volume in the Indian market. Last year, the company acquired a 51 per cent stakes in erstwhile white and Mackay (now Whytehall India) and spreading its presence in IMFL whiskies as well. Apart from this, the company is distributing William Grants Scotch whisky brands and Bacardi Martinis affiliate John Dewar & Sons Dewars Scotch Whisky in India. But its experience with white liquor will test whether its truly understood the spirit of the Indian Market.
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The, General Manager, marketing BACARDI put it: any alternative brand has to fit the original proposition. Both our product and the parties and music we are promoting allow consumers to release the super me. Music can get you in the party mood, just like a peg or two, but apple juice is just apple juice, despite Aristocrats assurances to the contrary on the small screen. That could be the difference between alternative brand advertising and surrogate ads that the committee will be looking for. The committee, we are told, will look into whether the brands advertised are legitimate products it may also look into the amount of revenue invested into promotion of a brand vis a vis the percentage of revenue it brings into a company. Said Ramesh Narayan, experiment, Advertising Agencies Association of India. Though it remains unclear how fat the surrogate ad ban will go, the ASCI already has a basic guideline. Bacardi kicked off the Blast concept around six years ago which dates surrogate advertising with music events in the metros in conjunction with Channel V. The ad jingle that made Bacardi a household name was switched from sipping on Bacardi Rum to swinging to Bacardi Blast.
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But any one old enough to drink will also surely recalled the old words as soon as the tune comes on the telly. That is the brand recall and value advertisers will sorely miss, if the clampdown is complete.
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UB Group
One of the leading liquor companies of the country. The UB group has been successful in maintaining its pole position. Dr. Vijay Mallya, is the face of the $2 billion UB Group 51 year-old Dr. Mallya took over the reins of the United Breweries Group in 1983 at the tender age of 28 and has, since then, steered the UB Group to a multinational conglomerate. Instrumental in shaping the Kingfisher brand as one of the most popular beers across the globe, Dr. Mallya has received several awards both in India and overseas. He was conferred a Doctorate in Philosophy in Business Administration (honoris causa) by the University of Southern California and nominated as a Global Leader for Tomorrow by the Geneva-based World Economic Forum (WEF). In recognition of Dr. Vijay Mallya's contribution to the development of Trade and Industry in Karnataka, the Federation of Karnataka Chambers of Commerce and Industry conferred upon him "Sir M. Visvesvaraya Memorial Award" for the year 2001. UB Group is 3rd largest spirits marketer in the world. With the sales of over 50 million the spirits business of the group is the 3rd largest spirits marketer of the world.
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The UB Group, with acquisition of Shaw Wallace & Company Limited, offers 140 brands at varying price points - attracting consumers of every taste- and combined with its unparalleled reach has become an object of envy for the competition.
Spirits McDowell & Company Limited Herbertsons Limited Shaw Wallace & Company Ltd.
Is the 3rd largest spirits marketer in the world with sales of approx. 50 million cases The 'Millionaire' Brands belonging to United Spirits has increased to 15 McDowell's No.1 Brandy is the largest selling brandy in the world McDowell's No. 1 Whisky is one of the fastest growing whisky brands in the world with sales of over 5.52 million cases McDowell's No.1 Celebration Rum is one of the fastest growing rum brands in the world with sales of over 5.04 million cases
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McDowell's No.1 Whisky is the 5th largest non-scotch whisky and 8th largest whisky (including Scotch) in the world. Offers 140 brands Bagpiper Whisky is India's Largest selling whisky with sales of 10 million cases last year
McDowell & Company Limited (McD) McDowell is the major player in the spirits business. The Group's spirits
business sold over 50 million cases .The Division has scaled unprecedented global heights and now occupies the position of the 3rd largest spirits marketer in the world .It offers 140 brands at varying price points - attracting consumers of every taste- and combined with its unparalleled reach has become an object of envy for the competition. Some of its brands like McDowell's No.1 Whisky, No.1 Celebration Rum and No.1 Brandy occupy the top rungs in India in terms of volume. McDowell No.1 Brandy is the largest selling brandy in the world. McDowell has always powered ahead riding on innovations. A series of packaging innovations have added value and assurance for the customer. These include holograms, non-refillable 'guala' caps, and tamper proof tear off caps
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based on German technology. Not surprisingly, McDowell occupies the pride of place in UB Group, contributing to a major chunk of the Group's turnover.
Beer United Breweries Limited (UBL) Upon demerger of the beer business from the erstwhile United Breweries Limited, the newly constituted UBL has become the main brewing company of the UB Group. The latter has now been renamed as United Breweries (Holdings) Limited. UBL has been associated with brewing for over five decades and and commands a domestic market share in excess of 50%. Its leading brands readily brings cheer all over India and abroad - that include Kingfisher, UB Export, London Pilsner, Premium Ice and Kalyani Black Label.
The Kingfisher towers over every beer brand not only in India but on foreign shores too. While Kingfisher Premium has raced to sales of 18.8 million cases, Kingfisher Strong became the fastest growing brand. Its sales crossed the 10 million cases mark within 5 years of introduction. The brand has also comfortably outpaced the industry average growth- notching up 29 % growth as against 3% for the industry.
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Relentless innovation has played a major part in these achievements. For nonstop partying, a 5-liter keg of Kingfisher draught beer has been introduced that blends versatility with economy. A four pack has also been introduced by London Pilsner -another brand within the fold. An attractive new value pack has also been introduced for the traditional markets. To build upon its leadership position, UBL has broken new grounds with a multi-faceted strategic alliance with Scottish & Newcastle Plc. (S&N). While allowing UBL to market S&N's international brands in India, it will also leverage S&N's global network while further globalization the Kingfisher brand. Commands a domestic market share of over 50% Leading brands are Kingfisher, UB Export, London Pilsner, Premium Ice and Kalyani Black Label. Kingfisher to bring in "international good times" with S & N's brands. And Kingfisher will also bring cheer abroad. Kingfisher is the only Indian Beer brand available in 52 countries and also on international flights. Every third beer sold in India is Kingfisher.
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The third kingfisher Corporate Cricket was played from August to November in the year 2011. Twenty-four corporate participated in this event. The matches were played over weekends at the indoor stadium at Karnataka State Cricket Association. The finalists were Infosys and Max Health Scribe. Infosys emerged the winner at the end of the highly competitive match. The prize distribution function was held at the Karnataka Cricket Association. Mr. Jawagal Srinath, the pace bowler of Indian Cricket team at that time was the Chief Guest and Mr. Raghavanda gave away the prizes. From the boards room to the pitch, team spirit reigned. The third kingfisher Cricket concluded with all involved looking forward for the next cricketing season.
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The much talked about ad-Asia event was held at Jaipur in the third week of November 2010.
The seminars, held at the Birla Auditorium, saw participation of nearly 1500 people from all around Asia. Gala dinners were organized at exotic locales like the City Palace, the ram Bagh Palace, the Jai Mahal Hotel, the Polo Club and the Gold Palace Resort. Kingfisher was the exclusive beer brand at this event. Besides having exclusive bars at each of these venues, it was the most visible brand through out the event. All the delegates admired Kingfishers Enter the World of Kingfisher campaign with Speed Style and Fun. Kingfisher stole the show in style once again.
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selected pubs in style The Djs welcomed the team with the Kingfisher oo-la-lajingle. The Kingfisher brigade had its own version of Eric Clapton unplugged, who obliged the guests with request songs. There were lots of games and attractive prizes as well. The event was well supported with regular RJ mentions on RED FM. NO RULES were nights full of fun, frolic, live guitar and Kingfisher.
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With all the elements in place, Dr. Vijay Mallya, Congo, Kingfisher, Malini Ramani, Indias top models, choreographers, dancer and performers; it was a magical night with a charm that will not be forgotten.
After unveiling the red and white Airbus 320-200 amid the bursting of crackers and loud music, Mallya, 49, said Kingfisher Airlines would begin commercial operations from Monday. "Its to the new India that we offer Kingfisher Airlines," said Mallya, chairman of the Bangalore-headquartered UB Group that makes the largest-selling Kingfisher beer.
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Methodology
1. Primary Data: This data is the data of collected in the form of market survey which was done with the help of
questionnaires a) Questionnaire: I interviewed 30 people for the purpose of my questionnaires under the guidance of my guide. 2. Secondary Data: Secondary data was collected by going through various websites which were: www.yahoo.com www.expressindia.com www.hindustantimes.com www.bacardi.com
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Information about the U.B. Group was made qualitative through the United Breweries Ltd Brochure. 3. Sampling Decisions a) My sample size was 20 b) Sampling method Random sampling method was used i.e. people were handpicked and no conscious effort was made.
Q1 Q2
Which of these best describes your job? Managerial....................................................... Professional...................................................... Clerical.............................................................. Skilled Trades.................................................. Manual worker................................................ Student.............................................................. Other PLEASE WRITE IN _______________
Q3. Do you buy, drink liquor or visit any liquor outlet at all? Yes..................................................................... No......................................................................
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Q4.
Yes. No.. Q8. Which liquor advertisement do you see frequently? Please Rank accordingly? Beer................................................................... Whisky.............................................................. Rum................................................................... Vodka................................................................ Jinn.................................................................... Breezers............................................................ None of these.................................................... Q9. Which products, are these ads actually promoting? Liquor Beer................................................................... Music CDs........................................................ Adventure Holidays......................................... Mineral Water................................................. Sports Accessories........................................... Musical Nights.................................................
Yes. No.. Q11. Where have you seen these ads? Pubs and Bars Shopping malls. Social Gathering Five Star Hotels T.V Magazines. 74
Sports Kit. Other (PLEASE WRITE IN)_________....... Does surrogate ads stimulate your purchase decision for the alone mentioned brands? Yes No.
ANALYSIS AND GRAPHS Population: 50 People Sample Size: 30 People Q1. Do you buy, drink liquor or visit any liquor outlet at all?
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7%
93%
People who Saw the Ad People who did not see the ad
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Kingfisher min 32% 36% Royal stag mega music Blenders pride music night. Others
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11%
21%
7% Yes No 93%
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Liquor 11% 4% 14% 0% Music CDs Adventure Holidays Liquor Mineral Water 71% Sports Mineral Accessories Musical Nights
13%
13% 0%
Water
74%
Musical Nights
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Q7 Have you seen the advertisement of other product like cigarette, which Is also banned?
10%
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Conclusion
According to the survey conducted; a) 50% of the peopled consume liquor b) 35% did not consume liquor c) 15% occasionally as rarely consume liquor 2. Most recall liquor ads were of kingfisher, royal stag and Bacardi cd. 3. 60% of the people have noticed the Bacardi CD ad more than Mc Dowells club soda and mineral water. 4. There was a 100% recall value for the actual liquor product looking at the surrogate versions. 5. 60% of people agreed that surrogate adjust stimulates their purchase decision. 6. More than 90% of the people that liquor advertising are banned in India. 7.More than 50% of the people have seen the ads on T.V. followed by magazines, shopping malls and bars and pubs. 8.More than 70% of the people said the ads are actually promoting liquor. My research objective was to find out that how successful has surrogate adverting been in promoting the liquor brand 60% of the people have agreed acc to the alone mentioned data that
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surrogate advertising has been successful in promoting the liquor brand. To second objective is surrogate advertising actually launching a new product or is it were manipulation of the existing liquor brands for sales? We get a 100% recall value for the actual liquor products even though surrogate versions were being mentioned on T.V. Hence, I can conclude by saying that surrogate advertising stimulates of liquor brand is more of a less than a negative aspect used.
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BIBLIOGRAPHY U B Group Brochure, Jan 2011, Issue No. 5 Links www.bacardi.com, www.yahoo.com www.expressindia.com www.hindustantimes.com, June 2011 www.theubgroup.com
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