The role of advertising in the Indian Economy

More of the people from the richest to the poor will participate in the worlds
wealth through global trading. The emerging global economy will bring us
into world wide competition with significant advantages for both marketers
and consumers. With satellite communications and global
companies consumers are demanding an ever expanding variety of goods
.Indian economy had been constrained and shaped by policies of import
substitution and an aversion to free trader. Real competition was eliminated
through import ban and prohibitive tariffs an foreign competition. Industry
was so completely regarded that those with proper license would count on a
specific share of the market. ow however times have changed and India
has embarked on a transformation Indian economy grew dramatically and is
among the !ig "merging Markets. It has a large middle class about more
than #$$ million %the si&e of '()*. )mong them are college graduates+ ,$-
with degree in science and engineering. India has a diverse industrial base
and is developing as a center for computer software. These advantages give
Indias reform programmers enormous potential. India has a weak
infrastructure but the Indian government plans to address these deficiencies.
The private sector has been allowed entry into power generation+ oil and gas
exploration+ telecommunication and civil aviation. )n estimate .$$ to #$$
million Indian posses sufficient disposable income to form an expanding
consumer class )s India is developing+ incomes change+ expectations for a
better life ad/ust to higher standards and social capital investments are made+
market behavior changes and eventually groups of consumers with common
tastes and needs arise With the rise of incomes+ new demand is generated at
all income levels for everything from soap to automobiles. The poorest
slums in 0olkata are home to .+$$+$$$ T1( and video facilities More
household money goes for food in emerging markets than in developed
markets then the next category of expenditure is for appliances and
other durables.
The role of advertising
"stablishing a brand image in emerging markets is an important strategy.
Intense competition and increasing sophistication has led to a need for more
sophistication in advertising strategies. )dvertisers have to function at the
highest creative level. 2f course boundaries are placed on creativity by legal+
language+ culture+ media+ product and cost limitations. (ales promotion
efforts are used to supplement advertising and personal selling.3 This is to
stimulateconsumer purchases and improve retailer effectiveness and co4
operation5ocal ad agencies have expanded as the demand for advertising
services by M6s have grown5iberalisation policies of the Indian
government have resulted in changes in life styles+ changes inneeds and
wants of consumers. The bargaining power of consumers+ of suppliers+ threat
of new entrantswith substitute products and 7/ockeying among players in the
market can be witnessed today. !reakingup of market segments + products
and brand launches+ niche marketing and positioning are some of
thestrategies widely used by Indian advertisers
The rural market has opened up new vistas for advertisers selling
consumer products. Tetra packs+ sachets+ synthetic bottles have
had a revolutionary impact on packaging aspects+ leisure and
luxury products have thrown open new markets. %8ealth+ beauty parlors+
credit cards etc*.!rands is vying with one another to obtain a favorable
perception of consumers. )dvertisers are trying to create brand personalities
entity which consumers can emotionally associate themselves. )dvertisers
are depicting products with new psychological perspectives+ wrist watches+
designer wear+ two wheelers+ chocolates and now the ano+ are being given
a symbolic orientation by advertisers. The social benefits of the increased
advertising are3 the increase in employment which in turn generated income
and results in the per capita income. More product innovation takes place.
(ociety is better informed and has a wider and wiser choice. The awareness
level increases. (ocial activists instill a civic sense and competition ensures
better 9uality products. This leads to higher standard of living. )dvertising
supports :$- of media costs it can be concluded the effects of advertising
upon society+ come in mixed forms+ depending on the purpose and execution
of various campaigns. 8owever+ society as we know it is based very heavily
upon advertising+ and the negative social and economic impact are not
serious enough to outweigh the many positive social and economic effects
on our society. o one can predict what new forms advertising will take in
the future. 8owever the rapidly increasing cost of ac9uiring new customers
makes one thing certain. )dvertisers will seek to hold onto the current
customers by forming closer relationships with them and by tailoring
products+ services and advertising messages to meet their individual needs.
(o while advertising will continue to encourage people to consume+ it will
also help provide them with products and services which are more likely to
satisfy their needs. The field of advertising contributes different benefits to
different fields of activities and to different segments of the market+ to
consumers ads provides basic communication to inform them about
products. )ds motivate consumers by various appeals. The welfare role of
ads is also important )ds generate an increase of sales+ help build brands+
enhance the institutional image and help the growth of the economy The
social responsibility of advertising has increased. It sustains the media. The
role of advertising can broadly said to be4distribution role4employer role4life
style enhancing role4consumer choice provider role4consumer welfare role4
price reducer role through increase in demand and providing economies of
scale

Changes in Lifestyle and Buying Habits
There are significant changes in lifestyles and buying habits of Indian
consumers. 6onvenience foods and ready4to4eat foods are now popular.
Modern gadgets have gained entry into most homes. Teenagers are also
becoming influencers of change in their familys buying patterns. The
average Indian is now spending money more liberally than before. The
middle class constitutes the largest segment of consumers for manufactured
goods in the country. ) virtual explosion has been taking place in the Indian
middle class. It is now placed at around #$$ million people. It is now
emerging as the 7consumption community of the country. They are better
educated and exposed to global lifestyles+ and their aspirations are
constantly growing and their spending is steadily on the increase. This
change is not confined to the metros and other big cities. There is now
product penetration even in smaller towns. "ven in rural areas penetration is
reasonably good3 The top end of the middle class is now aspiring for a
second car+ a second T1 and a second refrigerator. 6onsumer credit is
gaining ground. 2n the whole the Indian consumer is in the grip of big
change. The well 4off segments are becoming more cosmopolitan in/ work4
culture+ food habits+entertainment and lifestyle in general. ) fusion of the
east and west seems to be taking place. The internationali&ation of the upper
middle class society is on. The Indian middle class has long been a security
seeking class. This class has been moving towards more material comforts+
The change in the dress habits is a new trend. There is a shift from the tailor4
stitched garments to ready4mades and that too branded ones. Travel is now
becoming very popular. ;eople are now traveling to see places and for
relaxation and not /ust to see relatives. The middle class has become status
conscious or prestige conscious. The changing fashion of college going
children is on the rise. The middle class woman is no longer confined to the
four walls of the kitchen. (he is now educated and also employed+ she is the
image builder. The new found purchasing power has fuelled the demand
for cosmetics+ toiletries+ packaged foods and beverages. 6onsumers are now
9uality conscious as well as cost conscious The middle class also seeks
leisure. Time saving devices is popular. (ense of grooming is a strong
motive force behind several purchases The younger generation is fast
becoming more international in style. They are more modern and
adventurous than their elders and are 9uick in adapting to fashions. The new
middle class is4confident+ full of energy and drive and is making things
happen4 the centre of the socio4economic upheaval now taking place4the
fastest growing segment in the Indian society4street smart+ pragmatic+ non4
ideological+ and result oriented4demonstrating that there is a way up from
the bottom to the top4is sei&ing key slots in the global information and media
industries4open to a lot of opportunities.

) cancer vaccine commercial seen on Indian television urge parents to get
their young girls inoculated the vaccine <irasol to protect against cervical
cancer+ the second most ma/or cancer in women. What the ad hides is that it
is mired in a controversy in the '(). It was launched in India in
2ctober =$$> with television ads. )dvertising prescription on television is
unethical enough+ but using fear to sell them is worse. <irasol is an efficient
vaccine but the safety and risk information about it has not been available to
parents. )nchor and 8avells were involved in a 7hair rising controversy.
)nchor electrical accused 8avell of copying a concept for its hair raising
television commercial and demanded that 8avells take the campaign off the
air. The 8avell ad showed a boy whose everyday life is disrupted when his
hair stands on end because housed a faulty switch at home. )nchor claimed
the concept was taken from a previous television ad created for )nchor
switches. )nchor wrote a letter to 8avell to stop airing the ad. 8avell said
they had not received the letter. )n insurance ad showing a father in a
hospital carrying a new born baby girl saying 7hai to pyari magar boge hai
bhari. The authorities in ?elhi had the ad scrapped. The makers of
6omplain moved the Mumbai 8igh 6ourt to stop the 8orlicks from airing
their 8orlicks ad which said it had all the re9uired =# nutrients but was still
;riced at Rs .=> against Rs .@, the price of 6omplain. The Mumbai 8igh
6ourt refused to grant any relief to the makers of 6omplain.


Present day Economic Issues & Policies & their effects on Advertising
The present day economic policies changed from a regime of 9uantitative
restriction to a more open price based market force determined system. The
three pillars of the economic policy are34liberalisation4privatisation4
globalisation. The entry of multinationals have come with new technology
and market practices that lay more emphasi&e on advertising as an important
tools entrants increase+ products and competition also increase and thus
demand for advertising increased )fter the entry of cable television India has
seen a blast of channels. The numbers of newspapers and maga&ines have
also increased. ow there are new ways of reaching the consumer. ?ue to
the media explosion+ there is access to foreign channels. Through these
viewers are exposed to a 7materialistic western culture new products are and
features are noticed in these programmers and that creates awareness and
need to by the product. ?ressing habits have changed3 new trends are set in
everyday life. )ll these small cultural changes are also the result of
advertising. )dvertising creates brands+ association and draws aspirers into
the western culture of material culture of material possessions ;rivati&ation
has also affected the world of advertising. <overnment organi&ations
survive only because they are government owned. There is no profit motive
and urge to sell. With privati&ation theres a radical shift in the management
system. It is moving towards modern managerial techni9ues and advertising.
The volume of advertising and its creating capabilities have increased. With
the opening up of the economy and integrating the economy with the world
economy there was vast impact on advertising industry. Restrictions on
foreign entry+ scrapping of A"R)+ massive import restrictions and reducing
tariffs etc brought the world closer )dvertisers had to 7think global and act
local. Indian agencies came of age. )ds for global causes are also now a
day is being made in India. Through the global ventures+ the advertising
agencies collect social and cultural inputs and even story boards sometimes
are made in India. Internet has become a great marketing tool. )dvertising
experience is on the increase with the increase in ad expenditure. )t present+
the Indian economy is experiencing the pressure of several economic issues
such as unemployment+ poverty+ illiteracy+ inflation.


Groing influence of advertising and its criticism
)dvertising by its very nature receives wide exposure. It presumably has an
effect on what people buy and thus on their activities. The wide exposure
and advertisers persuasive vehicle+ it is argued+ has its impact on the values
and lifestyles of society and that this impact has its negative as well as
positiveside. It is argued that appeals to mass markets tend to promote
conformity+ appeals to status promote envy+ pride and social
competitiveness+ appeals to fear promote anxiety+ appeals to youth promote
reduced family authority and appeals to sexuality promote promiscuity. The
key issues are which values and lifestyles are to be encouraged as healthy+
which are to be avoided and what relative impact or influence advertising
has on them. It is interesting that the issues are hotly debated an international
level. Three issues have attracted particular attentionB4 t h e r e l a t i o n s h i p
o f a d v e r t i s i n g t o ma t e r i a l i s m4the role that advertising has
played in creating harmful stereotypes of women and ethnic
minorities4 t he poss i bl e cont r i but i on of adver t i s i ng i n
pr omot i ng har mf ul pr oduct s . Materialism is defined as the tendency
to give undue importance to material interests and presumably there is a
corresponding lessening of importance to non4material interests such as
love+ freedom and intellectual pursuits. In the world of television
commercial all of lifes problems and difficulties+ all of our individual
yearnings+ hopes and fears can yield instantly to a material solution and one
which can work instantly without any effort skill or trouble on our part. (uch
a link is impossible to prove or disprove. It is true that advertising and the
products advertised area part of our culture and thus contribute to it in some
way. It is also true that advertising does not havethe power to dominate other
forces %family+ religion+ literature etc* that contributes to the values
of society. There is little support the view that advertising is a pervasive
force in altering consumer spending and savings habitsIn a free society
people can choose the degree to which they indulge their desires+ needs and
fantasies;romoting (tereotypes. The accusation that advertising has
contributed to the role stereotyping of women and ethnic minorities has been
supported by several studies. The ads reflected that women donot do
important things+ are dependent on men+ are regarded by men as primarily as
sex ob/ects and should be at home. Minorities were in low status roles
)dvertisers are aware of these accusations and are sincerely trying to avoid
such situations in their ads. The image of women in advertising has changed
significantly in the last few years. ;romoting harmful products. )fter many
debates advertising of cigarettes and alcohol are now banned. 2f course
arguments have been put forward that ads do not promote consumption+ it is
only geared toward brand choice. It is also argued that countries that have
banned advertising of alcohol and cigarettes have lowered the consumption
of these products. It is felt3 therefore that banning such products may not be
the most effective way of handling the problem
<reen Marketing has brought up a new issues about advertising its effect on
values and life styles.)dvertising has been a part of the "nvironmental
;rotection )gency. These ads have had manyecologically positive
behaviour. 8owever may corporations have begun using environment
appeals inmarketing regular products to sell their products and services.This
so called green marketing has been challenged on a number of grounds.
)uthorities haveattempted to establish voluntary guidelines on the use of the
terms such as 7recycled and 7recyclable.Many products with environmental
claims susch as shaving creams that 7contain no 6A6s+ laundrydetergents
that are 7biodegradable and disposable diapers that are 7degradable re9uire
special scrutiny because they are especially likely to confuse
consumers.)dvertising makes people buy things they do not need. 6ritics
claim advertising merely increaseddemand for unnecessary products that are
not really needed by consumers. The counter argument tothis is who is to
determine the need of a consumerC )dvertisers try to convince people that
their brandwill make them sexier+ healthier or more successful but they cant
make them buy. If it is so easy toconvince people to buy why do more
products fail than succeedC )dvertisings power has been
greatlyexaggerated.)nother aspect of the manipulation argument is that
advertising creates artificial needs. 6onsumerscontrol the marketplace by the
choices they make with their discretionary income.)dvertising debases our
language. 6ritics claim that advertising copy is too bree&y+ too informal
andtoo casual and therefore improper. They believe that advertising has
destroyed the dignity of thelanguage. Research however has shown
that people respond better to down4to4earth conversationallanguage than to
the dignified + formal copy. <ood copywriters develop a style that is
descriptive+colourful and pictures9ue as well as warm+ human and personal.
They use simple words that are lively+full of personality and reflects the
language usage and patterns of their target audience. )dvertising is in bad
taste. Taste is highly sub/ective. What is bad taste to some is perfectly
acceptable to others. )lso taste changes. What is offensive today may not be
so tomorrow. ;eople were first outraged when the first deodorant ad for
underarms appeared. Today no one 9uestions such ads. Today grooming and
personal hygiene products often use near nudity in their ads. In international
market nudity in commercial is commonplace. 'ltimately the market has the
veto power4 it can simply ignore material it considers offensive or in bad
taste )dvertising is deceptive. 6ritics define deceptiveness not only as false
and misleading statements but also as false impressions conveyed+ whether
intentional or not. Aor advertising to be effective+ consumers must have
confidence in it. (o continued deception is self4defeating. "ven puffery
claiming to be 7best+ or 7greatest or 7premier is sometimes believes and
therefore deceptive. umerous regulations determine what advertisers can
and cannot do but they also allow a significant amount of leeway. Thats
where ethics and social responsibility come into play. )n advertiser can act
unethically or socially irresponsibly and not break any laws.
The Impact of Global Competition in the field of
Advertising
The integration of western "urope and the opening up of the eastern
"uropean market and thecrumbling of political+ economic and customs
barriers made it easier for companies to operate in a trulyglobal manner.
6onsumers in the rapidly emerging markets of )sia and elsewhere are
showing avoracious appetite for branded goods.This has led to the increased
attention to the need to create global brands that can take advantage of such
growing economies. )merica+ "urope and Dapan realised the need to look
for other markets for their growth.The growth of global media E satellite
and cable4basedT1 channels across the world has also led toincrease in
globalFinternational advertising campaigns.There is no doubt that global
marketing and advertising are becoming very important today becausema/or
companies and brands have begun to see the need to grow in countries
outside their traditionaldomestic bases)dvertising agencies themselves have
begun to form global networks and alliances. This was becausetheir global
clients began to seek global servicing capabilities and also because they
wished to gain alarger share of the fast growth in advertising revenueThe
advantage that global companies en/oy is operating economies of scale. This
means that havinglarger volumes of the same product and sold over a larger
market area can produce and market them ata lower cost per unit due to
economies of scale.The globalisation has thus resulted in the rush of
companies to market their products on a global scale.The competition of the
various brands introduced by various firms along with the competition of
localor domestic brand had a impact on the advertising world.)d agencies
began to form global networks and alliances. The increasing global clients
began to seek global servicing capabilities and also because these agencies
wished to gain a larger share of the fastgrowth
in advertising revenue)dvertisers realised that advertising campaigns that
work in one market may not work in another.6onsumers in every country are
still somewhat differe,nt from each other+ with different habits+ tastesand
preferences. "g )mericans like to drink orange /uice for breakfast the
Arench dont. In the Middle"ast most prefer toothpaste that tastes spicy3 this
taste may not work in other markets Mc?onalds hasto vary its menu in
different countries.)dvertisers are aware of the disastrous mistakes made by
agencies that failed to understand localconsumer differences. ;epsodent was
trying to a teeth whitening appeal in parts of )sia but failed because dark4
stained teeth were considered prestigious ) multinational advertiser must
understand thecultural nuances of a local market inorder to be successful
because it may differ substantially from theculture of the home
market.)dvertisers have to know about the government regulations and the
media availability and distributionarrangements of the country where they
have their campaign.. The competitive environment may varydramatically.
)gencies may also face brands that follow very different positioning
strategies acrossmany markets