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1 THE NEW ECONOMIC POLICIES The new economic policies were on two levels; 1 Liberalisation measures which was again under two sections, New Industrial Policy and New Trade Policy. 2. Macroeconomic reforms and structural adjustments I LIBERALISATION MEASURES
1.. New Industrial Policy (.NIP) Under the New Industrial Policy there was; a. Liberalisation of industrial licensing which resulted in -delicensing -decontrol -deregulation -broad banding -abolition of registration b. FERA liberalisation. The Foreign Exchange Regulation Act liberalised foreign investments and technology import c. MRTP liberalisation The Monopolies Restrictive Trade Practices was removed and threshold asset limit was abolished and clearance for expansions, mergers were not needed d. curtailment of public sector. Several industries hitherto reserved for public sector opened up to the private sector. Only eight core industries remain reserved for the public sector 2. New Trade Policy (NTP) Under this policy there were seven reforms as follows;; a. lowering of import tariffs b...import licences were abolished c. the exim regime was more open d. the rupee was made convertible e. exports were encouraged f. Indias economy was to be integrated with global economy
compiled by Anita Mandrekar

MACROECONOMIC REFORMS AND STRUCTURAL ADJUSTMENTS


1 Macroeconomic reforms under which there were three types of reforms: a. fiscal and monetary reforms which included -reduction of fiscal deficits -reform of tax systems -interest rate reforms -inflation control b. banking sector reforms included the following -banks to operate as commercial institutions -priority sector lending to be phased out -deposit interest rates deregulation -operational freedom in lending rates -norms on capital adequacy to be kept up -disinvestment in public sector banks -permission for new private sector banks c. capital market reforms were; -abolition of CCI (controller of capital issues) -strengthening of SEBI (securities and exchange board of India; -opening of Indian capital markets of FII (foreign institutional investors) -allowing foreign brokers in Indian capital markets -private sectors allowed into mutual funds -allowing Indian firms to raise capital abroad 2. Structural adjustments were a. market driven price and dismantling of price controls -phasing out of subsidies -dismantling price controls -abolishing fertiliser, sugar, export and petro-product subsidy -partial decontrol & parallel marketing of kerosene and LPG - steel price decontrol b public sector restructuring and disinvestment -no new public sector units or expansion with government equity -budgetary support for PSU to be phased out -disinvestment of government equity in PSUs c. exit policy -support to VRS -creation of NRF

Compiled by Anita Mandrekar

Effect of policy changes/liberalisation on the Economy


-The protection enjoyed by existing company disappears. New companies could enter any given industry and get a market share. The existing companies had to compete for their share. -The concept of minimum economic size was shaken. Many existing companies became uneconomic. Companies earlier had to conform to the licence given and the size had to be as per the licence. Licence for larger capacity was normally not given. Now going big became the order of the day. Economic size now meant international size. Companies that could not become big either sold to the bigger firms or merged with others HLL tookover Tomco and many other mergers, acquisitions took place. -The industry structure also changed with the entry of multinationals. With their high investment capacity and technology clout, the multinationals are altering the structure in almost all the industries they are entering. Eg in the refrigerator industry there were only four players. Today we have Whirlpool, Samsung, Daewoo LG Siemens-Bosch and many more. The new entrants altered the structure of the industry, market size, market shares, differentiation, brand positions and the nature of competition -The entry of multinationals also resulted in brand war in which the multinationals are squeezing out the desi brands. It means a grossly unequal battle for Indian brands The MNCs brought in superior technologies and more modern products. They brought in their global brands to the Indian market along with their full marketing and management might. The opening up of exports also became available through the parent companys expertise and connections. The power structure in Jointstock Ventures are in favour of the multinational due to their majority stake. The Indian company has to surrender and also forego their managerial autonomy. The MNC brands have affected the Indian brands in several ways Loss of volumes and market share Squeeze on profit margin Need to allocate more funds beyond the capacity of the Indian firm Losing the race finally to the foreign brand It is overall an unequal battle between players of unequal strength as Indian firms are weak in four areas, Lack of technology clout Capital inadequacy Lack of economy of scale Lack of product clout and brand power .
Compiled-Anita Mandrekar

Product packaging for international markets


The packaging component includes style, features, labelling, trademarks, brand name, quality, price and all aspects of a products package. Packaging components frequently require both discretionary and mandatory changes. Some countries require labels to be printed in more than one language while others forbid the use of any foreign language. Elements in the packaging component may incorporate symbols, which convey an unintended meaning and thus must be changed One companys red circle trademark was popular in some countries but was rejected in parts of Asia where it brought up images of the Japanese flag. Yellow flowers used in another company trademark were rejected in Mexico where a yellow flower symbolized death or disrespect. Package size and price have an important relationship in poor countries. Companies find they have to put the product in small packs to bring the price within the spending norms. Unilever makes its Sunsilk brand shampoo affordable in India by packaging in sachet packs Care must be taken to ensure that corporate trademarks and other parts of packaging component do not have unacceptable symbolic meaning. Particular attention must be given to translations of brand names and colours used in the packaging. When Ford tried to sell its Pinto automobile in Brazil, it quickly found that the cars name translated to tiny male genitals. White is the colour of purity in western countries but in the eastern world it is the colour of mourning. In China P&G packaged diapers in a pink wrapper. The Chinese shunned the pink package. The Chinese do want anyone to thinkhey have a girl; they prefer the male child. There are countless reasons why a company may have to adapt its packaging. In some countries law stipulates specific packaging and measuring units. Words like jumbo pack, giant pack may be illegal. High humidity and the need for long shelf life (because of long extended distribution system) may need extra heavy packaging for some products. The Japanese attitude about quality includes the packaging of a product. A poor packaged product conveys an impression of poor quality to a Japanese Again in Japan, Lever sells Lux soap in stylish boxes because in Japan more than half of all soap cakes are purchased during the two gift giving seasons. Soft drinks are sold in smaller size to accommodate the smaller Japanese hand. Labelling laws vary from country to country. In Saudi Arabia product names must be specific. Hot Chilli will not do; it must be spiced hot chilli. Coca Cola had problems in Brazil with its Diet Coke. Brazillian law interprets diet to have medicinal qualities and under the law producers must give daily recommended consumption on the label of all medicine. Coke had to get special approval to get around this restriction. The expensive labelling to meet Chinese market entry cost prohibitive. Marketing managers must examine each element of the packaging component be certain that the packaging of the product convey the appropriate meaning and value to a new market. Otherwise they may find themselves the USA soft drink company which had six-pointed stars as decoration in its package labels. Weak sales revealed that Arabs interpreted the stars as pro-Israel sentiments Special packaging and marketing requirements must be considered for shipment destined to be transported over water. Packaging for domestic markets often falls short for goods subject to extreme climates or unprotected outdoor storage. Protection against rough handling, moisture and pilferage may require heavy crating which increases total packaging costs as well as freight rates.
Compiled by Anita Mandrekar

All countries regulate the marking of goods and containers on on imports and noncompliance can result in severe penalties From the consumer side it is seen that consumers see far more than a container of label. They are buying a personality, an attitude perhaps even a set of beliefs. A majority of consumers transferred the sensation from the container to its content. The look of the packaging has an enormous impact on how product quality will be. Colour is one of the most potent tool in packaging. Studies of eye movement have shown that colours trigger the fastest response of any element of a package. lt is felt that yellow is the most noticeable hue but for some products yellow had negative connotation. Feminine forms, circles and ovals suggest completeness, receptiveness and enclosure and provides the underlying theme for many packages because these have the most positive associations. But to work well it must be inflicted with some other symbol. The success or failure of packaging abroad depends on an awareness of the fundamental differences in cultures. Understanding of cultural values of colour, shapes, symbols of the various countries is necessary. Thus - packaging is a silent seller - it attracts consumers - it should ensure good sealing - should maintain quality for long time shelf life - keep transportation in mind - should be cost effective - should be environmentally friendly and biodegradable - colours should be carefully chosen - information on packaging should be as prescribed by the legal authorities - should be tamperproof - should be of international standards. Meanings and significance of colours across various countries. Red yellow West Japan danger danger anger anger China Brazil joy anger festivity hate Nigeria danger evil sunshine brightness wealth purity calm peace evil Korea danger anger wealth Middle East danger-evil happiness prosperity fertility strength

cowardice happiness honour money caution nobility royalty wealth green sex future youth hope greed energy growth wealth safety youth white purity death mourning purity virtue mourning humility peace blue machismo villany strenght happiness masculinity cold power black death evil evil death

nature peace freshness innocence purity purity mourning cool protection freshness evil evil darkness mystery

compiled- Anita Mandrekar

Advertising and Popular Culture


Popular culture refers to beliefs and practices and the objects through which they are organised that are widely shared amongst a population. Popular culture is what we make out of the products and practices of mass produced culture. It is the expressive content that is produced and consumed. It is light entertainment that is delivered through the channels of mass media and finally absorbed voluntarily, to be interpreted by the individual who receives it. Information then goes back in the form of ratings or sales figure that will influence the subsequent round of offerings. To Popular culture is everything from common culture to folk culture to mass culture. Popular culture consists of symbols; Instances of popular culture are television serials, films, comic books, music etc. Popular culture gives pleasurable sensations upon reception. This pleasure giving feature is a central aspect of the popular culture experience. Advertising on the other hand refers to the paid for messages that attempts to transfer symbols into commodities to increase the possibilities of its purchase. For this reason advertising may be looked at warily. Although advertising comes in many forms, television, radio and magazines are normally focused more. Some see advertising as a subset of first order intentions. It is developed with both first order and second order intentions. The first order is when communication occurs. The second orders intentions are of purchasing the advertised goods. Advertising aims at changing behaviour while popular culture aims to give pleasure and not to change viewers Advertising is almost always briefer than instances of popular culture (30 sec of a commercial against 30 minutes of popular culture) Media and space is expensive and advertisers have to work within budgets However advertising and popular culture share much in common. Both are products of culture industries. Both are to be understood as artistic products. Both pay great attention to style. Both share the use of same mass media method. Popular culture is more welcome than advertising Advertising and popular culture have come to occupy central positions with a global economic growth. Both are approached as economic entities as well as symbolic entities.
Compiled by Anita Mandrekar

Popular culture offers lavish store to advertisers who try to create attractive messages for consumers. Advertisers will appropriate popular culture material as celebrities, music, comedy styles and anything else that can be used as accepted and enhanced symbol for their products. To communicate with consumers, advertisers thus have a fertile an ample mixture of symbolic material to draw upon. The lore of popular culture that advertisers find usable are comedies, music and celebrities. Music has the ability to stimulate extraordinary emotional feelings. Adult consumers derive emotional benefit from popular music. It is this appeal that advertisers try to exploit to stimulate consumers interest in their products. An advertisers choice of leading entertainers as spokespeople, as opposed to lesser known individuals, carries with it valuable contextual inferences when the transfer of meanings from the endorser to the product and from the performance to the ad works well, it becomes a success. The utility of music is acknowledged within the advertising industry. Background music can set up a mood with targeted consumers and lend an emotional dimension to a brand. Although much of the music in advertising is original an increasing proportion of it consists of reused popular cultural hits. Advertising is not depleting or obliterating popular culture. The interpenetration of advertising and popular culture is recognised. Highlights from one adds lustre to the other. The target audience are always on the lookout for symbols and meanings which reverberate back and forth between the two domains. Popular culture can even aid in the creation of new norms. To communicate with consumers, advertisers have an ample stock of purchasable symbolic material to draw upon. Advertisers turn to popular culture that if pleasurable, emotional and non-coercive. Popular culture is the seed belt of the stars who can command general recognition from a diverse population. The stars are likely to deliver the emotional material the spectator is looking for; The popular song Dhoom Machale became a part of the day to day lingo of youngsters. Advertisers use Dhoom Macha Diya below their visual have reported increase in sales. Although cultures meet most new ness with some resistance or refection, that can be overcome. Cultures are dynamic and change occurs when resistance slowly yields to acceptance radually there comes an awareness of the need for change, ideas once too complex become less so because of the cultural gains in understanding. Once the need is recognised, the acceptance cannot be prevented. Possible methods and insights are offered by social scientists that are concerned with concepts of planned social change. .
Compiled by Anita Mandrekar

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. Now however times have changed and India has embarked on a transformation Indian economy grew dramatically and is among the Big Emerging Markets. It has a large middle class about more than 300 million (the size of USA). Among them are college graduates, 40% 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 programmes 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. An estimate 100 to 300 million Indian posses sufficient disposable income to form an expanding consumer class As India is developing, incomes change, expectations for a better life adjust to higher standards and social capital investments are made, market behaviour 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 Kolkata are home to 1,00,000 TVS 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 Establishing 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. Advertisers have to function at the highest creative level. Of course boundaries are placed on creativity by legal, language, culture, media, product and cost limitations. Sales promotion efforts are used to supplement advertising and personal selling.; This is to stimulate consumer purchases and improve retailer effectiveness and co-operation Local ad agencies have expanded as the demand for advertising services by MNCs have grown Liberalisation policies of the Indian government have resulted in changes in life styles, changes in needs and wants of consumers. The bargaining power of consumers, of suppliers, threat of new entrants with substitute products and jockeying among players in the market can be witnessed today. Breaking up of market segments , products and brand launches, niche marketing and positioning are some of the strategies widely used by Indian advertisers.

Compiled by Anita Mandrekar

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. ( health, beauty parlours, credit cards etc.) Brands are vying with one another to obtain a favourable perception of consumers. Advertisers are trying to create brand personalities entity which consumers can emotionally associate themselves. Advertisers are depicting products with new psychological perspectives, wrist watches, designer wear, two wheelers, chocolates and now the Nano, are being given a symbolic orientation by advertisers. The social benefits of the increased advertising are; The increase in employment which in turn generated income and results in the per capita income. More product innovation take place. Society is better informed and has a wider and wiser choice. The awareness level increases. Social activists instil a civic sense and competition ensures better quality products. This leads to higher standard of living. Advertising supports 60% 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. However, 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. No one can predict what new forms advertising will take in the future. However the rapidly increasing cost of acquiring new customers makes one thing certain. Advertisers 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. So 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 provide basic communication to inform them about products. Ads motivate consumers by various appeals. The welfare role of ads is also important Ads 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 be -distribution role -employer role -life style enhancing role -consumer choice provider role -consumer welfare role -price reducer role through increase in demand and providing economies of scale
Compiled by Anita Mandrekar

Changes in Lifestyle and Buying Habits


There are significant changes in lifestyles and buying habits of Indian consumers. Convenience foods and ready-to-eat 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. A virtual explosion has been taking place in the Indian middle class. It is now placed at around 300 million people. It is now emerging as the consumption 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. Even in rural areas penetration is reasonably good; The top end of the middle class is now aspiring for a second car, a second TV and a second refrigerator. Consumer credit is gaining ground. On the whole the Indian consumer is in the grip of big change. The well -off segments are becoming more cosmopolitan inj work-culture, food habits, entertainment and lifestyle in general. A fusion of the east and west seems to be taking place. The internationalisation 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 tailorstitched garments to ready-mades and that too branded ones. Travel is now becoming very popular. People are now travelling to see places and for relaxation and not just to see relatives. The middle class has become status conscious or prestige conscious. The changing fashion of college going children are on the rise. The middle class woman is no longer confined to the four walls of the kitchen. She 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. Consumers are now quality conscious as well as cost conscious The middle class also seeks leisure. Time saving devices are popular. Sense 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 quick in adapting to fashions. The new middle class is -confident, full of energy and drive and is making things happen - the centre of the socio-economic upheaval now taking place -the fastest growing segment in the Indian society -street smart, pragmatic, non-ideological, and result oriented -demonstrating that there is a way up from the bottom to the top -is seizing key slots in the global information and media industries -open to a lot of opportunities
Compiled by Anita Mandrekar

Social implications of advertising


The central issues of advertising and society can be divided into three categories. The first is nature and content of the advertising to which people are exposed. Is advertising inherently unethical:? Are appeals used to manipulate consumers against their will? Is advertising too repetitious? Is it too preoccupied with sex? There is also the questions about the fairness of advertising to children+ The second category represents the aggregate effects on society as a whole. It refers to the sescondary consequences or effects. What is the effect on societys values and lifestyles? Some believe that advertising competes with or dominates such other socialization agents as literature, plays, music, the home and the school. That it fosters materialism at the expense of other basic values. That it may serve to reinforce racial discrimination or that it promotes harmful products. The third category is the effect advertising has on societys economic well-being and the efficiency of the operation of the economic system. Can the power of advertising lead to the control of the market by a few firms, which will weaken competition and raise consumer prices? Is alcohol and cigarette advertising ethical. These advertising are now banned in India. A much wider range of ethical issues and concerns are now being addressed as packaging, professional services ads by physicians, attorneys, accountants and emerging social issues about environmental or green marketing. There is considerable overlap between what many consider to be ethical issues and the issues of manipulation, taste and advertisings effects on values and lifestyles Does advertising manipulate? The essence of a free marketplace and a free society is the freedom to make decisions to select or not select a particular brand. Some feel this freedom is overpowered by advertising which can manipulate a buyer into making a decision against his or her will. When advertising utilizes appeals that go beyond a basic communication the charge of manipulation via emotional appeals is raised. The implication is that with emotional appeals the consumers will make less than optimal decisions. A typical theme running through these commercials is to hold the brand out as the pathway to success and happiness and the antidote to what is otherwise a drab, boring or lonely life. Dishwashing liquids are advertised as sweeping away the dullness of life. Bath soaps have rejuvenating capacity and so on. These observations are related to issues of deception. There is also a general claim that advertisers have the raw power to manipulate consumers by their capacity to generate large numbers of ad exposures and highly sophisticated scientific techniques to make ads effective. However the fact remains that consumer choice behaviour is determined by many factors in addition to advertisingthe advice of friends, decisions and lifestyles of family members news stories, prices and so on. Advertising is but one of many variables and it has a limited role. Some feel that advertising is objectionable because the4 creative effort behind is not in good taste. Some feel that television advertising is often like a visitor who ahs overstayed his welcome

Advertising to children has been a major focus and concern for many years. It is said that children between 2 to 11 spend about 25 hours a week watching television and see approx20,000 ads per year/ Ads presumably have and effect on what people buy and on their activities. It has an impact on the values and lifestyles of society and that this impact has its negative as well as positive side. It is stated that appeals to mass markets tend to promote conformity appeals to status promote envy, pride and social competitiveness appeals to fears promote anziety appeals to newness promote disrespect for tradition, durability, experience, 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 ads have on them The environmental movement has thrown up a number of new issues about advertising and its effects on values and lifestyles. Advertising has played a valuable role to encourage recycling, energy conservation and many ecologically positive behaviours. It was informative and educative However advertisers have seized on environmental advertising claims as an effective way to sell their products and services by using terms such as recycled and recyclable
Compiled by Anita Mandrekar

Promotion in International Markets


,Sales promotion consists of those promotional activities other than advertising, personal selling and publicity. As such, any promotional activities that do not fall under advertising, personal selling and publicity of the promotional mix are considered sales promotion In markets where the consumer is hard to reach because of media limitations, the percentage of the promotional budget are increased. In some less developed countries sales promotions constitute the major portion of the promotional effort in rural and less accessible parts of the market. In parts of Latin America, a part of the advertising-sales budget for both Pepsi and Coco-cola is spent on carnival trucks, which make frequent trips to outlying villages to promote the brand. When the carnival van makes a stop in a village, it may show a movie or provide some other fkind of entertainment, the price of admission is an unopened bottle of the brand purchased from the local retailer. The unopened bottle is to be exchanged for a cold bottle plus a coupon for another bottles. This promotional effort tends to stimulate sales and encourages local retailers, who are given prior notice of the carnival trucks arrival, to stock the product. An effective promotional tool when the product concept is new or has a small market share is product sampling. Nestle Baby Foods faced such a problem in France in its attempt to gain share from Gerber, the brand leader. The company combined sampling with a novel sales promotion programme to gain brand recognition and to build goodwill. Most French take off for long vacation in summer, with the whole family piled up in the car and staying at well-maintained campgrounds, nestle provided rest0stops structures along the highway where parents would feed and change their babies. Sixty four hostesses at these rest stops welcome 1.20,000 babies visits and dispense 6,00,000 samples of baby food each year. There are free diapers , a changing table and high chairs for the babies to sit in while dining. When Kellogs expanded its business abroad, it had to enlighten consumers in South and Central America, Middle East and Asia about dry cereal and cold breakfast. To instil this new eating habit, Kellogs used samples and demonstrations in conjunction with a heavy advertising campaign A success of a promotion may depend on local adaptation. Responses to promotions can vary across promotional types and cultures. Major constraints are imposed by local laws, which may not permit premiums or free gifts to be given. Some countries laws control the amount of discount given at retail outlets and others require permits for all sales promotions. In one country no competitor is permitted to spend more on sales promotion than any other company selling the product. Sales promotion is not restricted to the stimulation of demand at the consumer level. It may be used to gain middlemens support as well. It is also not limited to consumer products. Pfizer attracts drug wholesalers by sponsoring trips and other events. Gifts are given to doctors and their wives are taken on shopping sprees Sales promotion is effective when a product is first introduced to a market. A Japanese firm created a great deal of excitement in Thailand by including game cards in its detergent boxes and consumers could not stop buying more and more in search of the winning cards.
Compiled by Anita Mandrekar

Premiums and Gifts European countries have a larger number of restrictions than USA for sales promotion. The legal requirements are so diverse that standardization of promotion regulations in Europe may be difficult. Belgium requires a government tax on window signs. Most countries in Europe have a limit on the value of the premium given. Colgate was sued by a local blade manufacturer in Greece for giving away razor blades with shaving cream,. Austria considered premiums to be a form of discriminatory treatment towards buyers. In France, it is illegal to offer premiums that are conditional on the purchase of another product. In Finland, premiums are allowed as long as the word free is not used with them. When Radio Shack duplicated its US strategy by giving away flashlights the firm found itself in violation of Germanys sales law regarding premiums and gifts. Germany and Scandinavia have strict laws concerning promotions to protect their consumers from being distracted from the true value of the brand. Argentina, Austria, Norway and Venezuela virtually ban the use of merchandise premiums Price Reductions, Discounts and Sales Austria prohibits cash reductions that give preferential treatment to different groups of customers Scandinavia discounts are prohibited In Germany authorities have to be notifies in advance when a sale is planned. It is allowed when a firm is going out of business or is giving up its product line; or end of winter or end of summer and a twenty-fifth anniversary Samples In Russia tobacco firms freely distribute samples. In USA alcoholic beer cannot be offered as a free sample Germany restricts door-to-door free samples that limit population coverage as well as the size of the sample pack Sweepstakes, Games and Comtests In France the entry form must be separate from the order form, for a sweepstake to be valid. Germany permits sweepstakes as long as they do not create psychological pressure on customers; it should not be misleading and should not offer a prize of substantial value. Lotteries are illegal in many countries eg France, England, USA. A sweepstakes, game or a contest to be valid must have only two of the following elements, chance, consideration or price.
Compiled by Anita Mandrekar

The Impact of Global Competition in the field of Advertising

The integration of western Europe and the opening up of the eastern European market and the crumbling of political, economic and customs barriers made it easier for companies to operate in a truly global manner. Consumers in the rapidly emerging markets of Asia and elsewhere are showing a voracious 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. N America, Europe and Japan realised the need to look for other markets for their growth. The growth of global media & satellite and cable-basedTV channels across the world has also led to increase in global/international advertising campaigns. There is no doubt that global marketing and advertising are becoming very important today because major companies and brands have begun to see the need to grow in countries outside their traditional domestic bases Advertising agencies themselves have begun to form global networks and alliances. This was because their global clients began to seek global servicing capabilities and also because they wished to gain a larger share of the fast growth in advertising revenue The advantage that global companies enjoy is operating economies of scale. This means that having larger volumes of the same product and sold over a larger market area can produce and market them at a 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 local or domestic brand had a impact on the advertising world. Ad 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 fast growth in advertising revenue Advertisers realised that advertising campaigns that work in one market may not work in another. Consumers in every country are still somewhat differe4nt from each other, with different habits, tastes and preferences. Eg Americans like to drink orange juice for breakfast the French dont. In the Middle East most prefer toothpaste that tastes spicy; this taste may not work in other markets McDonalds has to vary its menu in different countries. Advertisers are aware of the disastrous mistakes made by agencies that failed to understand local consumer differences. Pepsodent was trying to a teeth whitening appeal in parts of Asia but failed because dark-stained teeth were considered prestigious A multinational advertiser must understand the cultural nuances of a local market inorder to be successful because it may differ substantially from the culture of the home market. Advertisers have to know about the government regulations and the media availability and distribution arrangements of the country where they have their campaign.. The competitive environment may vary dramatically. Agencies may also face brands that follow very different positioning strategies across many markets

Compiled by Anita Mandrekar

Controversial advertising
The controversy about many ads shows how our traditional conservative society is still trying to decide how much sexuality to allow in advertising. Indias growing economy and rapid internationalization are adding to the issue as they challenge Indias homegrown mores in new ways. The Ministry of Information and Broadcasting refers all complaints of ads that are controversial to the ASCI, Advertising Standards Council of India, which is the industrys self-regulatory body. Once the ad-industry council has issued its opinion, the ministry has the final say. The ASCI has taken action on ads that it thought went too far. Dark Temptation ad showed a woman taking bites out of a man who is coated in chocolate after using the chocolate flavoured deodorant. the Ministry of Information and Broadcastion stopped the from being broadcast after receiving a complaint from a viewer who found it offensive the shot of a woman biting the chocolate off a the mans bottom.The ASCI banned the ad and now the ad is shown without the woman biting off the chocolate Wild Stone, a deodorant ad shows a woman tricking her way into her brother-in-laws arms because of the effect his deodorant has on her. The brands tag line says barely legal. Another deo ad called Fuel for Men launched by Elder Health Care Ltd in alliance with VLCC Healthcare Ltd, shows a woman so attracted to a man using the product that she starts unbuttoning her blouse. The ASCI , after receiving a complaint contact the respective advertisers for their explanation before taking a decision to pull these ads off-air. These companies, however say they have not stepped out of line with the above commercials. They feel that there are certain category truths that are known to sell products like toothpaste results in clean teeth and shampoo in clean hair. Similarly, fragrances are associated with attraction and the above ads are based on that premise. The ad agency that created these ads also defended it. They argued that behavioural scientist have established that males groom themselves for the female species and that is exactly what the ad is reflecting. However, it may be that males groom themselves for the female species , the objection is the reaction of the female in the ads that is offensive. It is demeaning to women There are several ads on deodorants that have raised objections such as Fa Mens Xtreme and Zatak are also airing ads with sexual overtones. These ads gained ground after the campaign for the Axe deo ad. The Axe ad has been the only body spray to face scrutiny from the government even though competitors have run racy ads of their own. The Amul Macho underwear ad was another very controversial ad which was found very offensive. It showed a young woman comes to a river to wash her husbands clothes. She pulls pair of men bovver shorts from the laundry pile and begins to wash it, giving sultry looks to the camera and throwing her head back in a suggestive manner. The ad ends with a breathy female voice saying Amul Macho crafted for fantasies Pepsi ad was banned after human rights groups said it promoted child labour. It depicted a young Indian boy bringing drinks to the Indian national circket team. The ad was withdrawn. India is a signatory to the Convention on the Rights of the Child and is committed to putting an end to child labour in any form
Compiled by Anita Mandrekar

A cancer vaccine commercial seen on Indian television urge parents to get their young girls inoculated the vaccine Gardasil to protect against cervical cancer, the second most major cancer in women. What the ad hides is that it is mired in a controversy in the USA. It was launched in India in October 2008 with television ads. Advertising prescription on television is unethical enough, but using fear to sell them is worse. Gardasil is an efficient vaccine but the safety and risk information about it has not been available to parents. Anchor and Havells were involved in a hair raising controversy. Anchor electricals accused Havell of copying a concept for its hair raising television commercial and demanded that Havells take the campaign off the air. The Havell ad showed a boy whose everyday life is disrupted when his hair stands on end because he used a faulty switch at home. Anchor claimed the concept was taken from a previous television ad created for Anchor switches. Anchor wrote a letter to Havell to stop airing the ad. Havell said they had not received the letter. An insurance ad showing a father in a hospital carrying a new born baby girl saying hai to pyari magar boge hai bhari. The authorities in Delhi had the ad scrapped. . The makers of Complan moved the Mumbai High Court to stop the Horlicks from airing their Horlicks ad which said it had all the required 23 nutrients but was still Priced at Rs 128 against Rs 174 the price of Complan. The Mumbai High Court refused to grant any relief to the makers of Complan.
Compiled by Anita Mandrekar

Present day Economic Issues & Policies & their effects on Advertising

The present day economic policies changed from a regime of quantitative restriction to a more open price based market force determined system. The three pillars of the economic policy are; -liberalisation -privatisation -globalisation The entry of multinationals have come with new technology and market practices that lay more emphasize on advertising as an important tool As entrants increase, products and competition also increase and thus demand for advertising increased After the entry of cable television India has seen a blast of channels. The numbers of newspapers and magazines have also increased. Now there are new wayus of reaching the consumer. Due to the media explosion, there is accfess to foreign channels. Through these viewers are exposed to a materialistic western culture new products are and features are noticed in these programmes and that creates awareness and need to by the product. Dressing habits have changed, new trends are set in everyday life. All these small cultural changes are also the result of advertising. Advertising creates brands, association and draws aspirers into the western culture of material culture of material possessions Privatisation has also affected the world of advertising. Government organisations survive only because they are government owned. There is no profit motive and urge to sell. With privatisation there is a radical shift in the management system. It is moving towards modern managerial techniques 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 a vast impact on advertising industry. Restrictions on foreign entry, scrapping of FERA, massive import restrictions and reducing tariffs etc brought the world closer Advertisers had to think global and act local. Indian agencies came of age. Ads for global causes are also now a days 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. Advertising experience is on the increase with the increase in ad expenditure. At present, the Indian economy is experiencing the pressure of several economic issues such as unemployment, poverty, illiteracy, inflation.
Compiled by Anita Mandrekar

Growing influence of advertising and its criticism


Advertising 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 positive side. 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 a the international level. Three issues have attracted particular attention: - the relationship of advertising to materialism - the role that advertising has played in creating harmful stereotypes of women and ethnic minorities - the possible contribution of advertising in promoting harmful products. Materialism is defined as the tendency to give undue importance to material interests and presumably there is a corresponding lessening of importance to non-material 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. Such a link is impossible to prove or disprove. It is true that advertising and the products advertised are a part of our culture and thus contribute to it in some way. It is also true that advertising does not have the 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 habits In a free society people can choose the degree to which they indulge their desires, needs and fantasies Promoting Stereotypes. 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 do not do important things, are dependent on men, are regarded by men as primarily as sex objects and should be at home. Minorities were in low status roles Advertisers 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. Promoting harmful products. After many debates advertising of cigarettes and alcohol are now banned. Ofcourse 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 felt, therefore that banning such products may not be the most effective way of handling the problem

Compiled by Anita Mandrekar

Green Marketing has brought up a new issues about advertising its effect on values and life styles. Advertising has been a part of the Environmental Protection Agency. These ads have had many ecologically positive behaviour. However may corporations have begun using environment appeals in marketing regular products to sell their products and services. This so called green marketing has been challenged on a number of grounds. Authorities have attempted to establish voluntary guidelines on the use of the terms such as recycled and recyclable. Many products with environmental claims susch as shaving creams that contain no CFCs, laundry detergents that are biodegradable and disposable diapers that are degradable require special scrutiny because they are especially likely to confuse consumers. Advertising makes people buy things they do not need. Critics claim advertising merely increased demand for unnecessary products that are not really needed by consumers. The counter argument to this is who is to determine the need of a consumer? Advertisers try to convince people that their brand will make them sexier, healthier or more successful but they cant make them buy. If it is so easy to convince people to buy why do more products fail than succeed? Advertisings power has been greatly exaggerated. Another aspect of the manipulation argument is that advertising creates artificial needs. Consumers control the marketplace by the choices they make with their discretionary income. Advertising debases our language. Critics claim that advertising copy is too breezy, too informal and too casual and therefore improper. They believe that advertising has destroyed the dignity of the language. Research however has shown that people respond better to down-to-earth conversational language than to the dignified , formal copy. Good copywriters develop a style that is descriptive, colourful and picturesque 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 Advertising is in bad taste. Taste is highly subjective. What is bad taste to some is perfectly acceptable to others. Also taste changes. What is offensive today may not be so tomorrow. People were first outraged when the first deodorant ad for underarms appeared. Today no one questions such ads. Today grooming and personal hygiene products often use near nudity in their ads. In international markets nudity in commercial is commonplace. Ultimately the market has the veto power- it can simply ignore material it considers offensive or in vbad taste Advertising is deceptive. Critics define deceptiveness not only as false and misleading statements but also as false impressions conveyed, whether intentional or not. For advertising to be effective, consumers must have confidence in it. So continued deception is self-defeating. Even puffery claiming to be best, or greatest or premier is sometimes believes and therefore deceptive. Numerous 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. An advertiser can act unethically or socially irresponsibly and not break any laws.

Compiled by Anita Mandrekar

Social Marketing
Social marketing is the design, implementation and control of programmes seeking to increase the acceptability of a social idea, cause or practice in a target group. Social marketing is one of the promising new developments expected to increase the effectiveness of social change. Social marketing is a set of programmes calculated to influence - acceptability of social ideas - to play its role as an educator - the changes in public attitudes - the changes in the quality of life - the standard of living - the building of efficient economic and social institutions Social marketing seeks to influence social behaviour, not to benefit the marketer but to benefit the general public/target audience. Social marketing has been used in international health programmes especially in areas like heart diseases, organ donations, prevention of alcohol and drug abuse. Social marketing is a tool to improve society. Advertising exerts a powerful influence on society. It has the ability to shape social trends and mould personal attitudes. In addition to the economic benefits of improved competition, lower price and more product choices, advertising promotes freedom of speech, supports the media and promotes information of social issues. It helps in the awareness of social problems. Social responsibility is closely related to advertising ethics, Social responsibility issues are complex. The advertising industry has an important say in how the public view social issues eg the aids scare has caused advertisers to tone down the use of sexual images in their ads. Environmental concern s are inducing advertisers around the world to be more socially responsible. Chevron advertised how the company delayed a gas pipeline project to avoid upsetting the mating season of the local grouse. Wall Mart advertised a green campaign highlighting merchandise that is environmentally friendly Social marketing is needed for the general public to create an awareness of certain issues that they are ignorant of and thus bring about a desired level of social awareness and thereby a social change. The principles of social marketing for non-profit oranisation are the same as those for profit organisations - key markets and audience must be identified - segmentation has to be utilised - consumer behaviour has to be studied - market positioning has to be planned - results have to be monitered - corrective measures have to be taken if needed The people should believe that a specific change will give more advantage than disadvantage. In order to be effective the social marketing programme should be based on extensive research on

- the problem to be solved - the target audience or the population which suffers the problem - the message - the channels to be used The specific goal has to be determined. The creation of awareness is the main step in social marketing
Compiled by Anita Mandrekar

Social marketing shares the main components of general marketing process in the form of product, price, promotion and place. In this case the product is not physical in nature. It refers to a change in the behaviour or support required for the programme. eg anti-smoking, family planning. Its strategy popularises the positive ideas and encourages favourable behavioural changes in social values and individual values. Price here refers to the effort that is put into the behavioural change. It is what the consumer should do to obtain the product. The place refers to where the target audience are located at the time of the campaign. Promotion . the person or the institution associated with the social marketing should use advertising, sales promotion or direct response marketing to promote the campaign Some campaigns cannot be carried out without institutional partnerships eg health organisation, social welfare units, academic units etc Since social marketing is associated with the community in general, political and government patronage is required to make it a success. It makes marketing easier and effective in the long run. Social marketing aims at providing mental guidelines for future behaviour. Benefits of Social Marketing - is needed to promote the desired pattern of behaviour in a society - to promote health and hygiene among the public ( polio drops etc) - to promote awareness among the illiterate section - to promote sustainable development - to promote ecological consciousness - to promote social emancipation like women empowerment, ban on female infanticide, dowry, sati, Social marketing is the need of the hour
Compiled by Anita Mandrekar

The Scope and Challenges of International Advertising Scope


Never before have business, large and small, been so deeply involved in and affected by international business. A global economic boom, unprecedented in modern history, has underway as the drive for efficiency, productivity and open unregulated market sweeps the world. Powerful economic, technological, industrial political and demographic are converging to build the foundation of a new global economic order on which the structure of a one-world will be built. The world is mesmerised by information technology boom. International advertising is affected by all these things. Now more than ever one cannot escape the effects of the ever-increasing number of firms exporting, importing, and manufacturing abroad. Of all the events and trends affecting international business and therefore affecting international advertising there are four which stand out as dynamic - the rapid growth of World Trade Organisation and regional free trade areas like NAFTA and EU - the trend towards thre acceptance of the free market system among developing countries in Latin America, Asia and Eastern Europe - burgeoning impact of the Internet and other global media on the dissolution of national borders, - the mandate to properly manage the resources and global environment for the generation to come. Today most business activities are global in scope. Technology, capital investment, production ands marketing, distribution and communications all have global dimension. Every business, including advertising must be prepaid to compete in an increasingly interdependent global economic and physical environment. The globalisation of the worlds market and the growth of emerging markets cannot be ignored. Being international is no longer a luxury but a necessity.

Challenges of International Advertising Cultural Diversity


Culture is pervasive in all marketing and advertising activites, International advertisers need to operate at the highest creative level. For successful advertising one has to have a deep understanding of the local culture. It is a challenge to understand cultural similarities and differences and create a strategy to fit the particular needs one has to develop a sensitivity to cultural dynamics. It is imperative for international advertisers to appreciate the intricacies of cultures different from their own if they are to be effective in a foreign market. Eg in India, Domino Pizza stresses its fast delivery to differentiate itself from its competitors. In Britain, customers dont like the idea of home delivery. In Japan,

houses are not numbered sequentially, so finding an address becomes difficult. In Iceland many dont have phones. Pillsbury marketed canned sweet corn because it felt that sweet corn would not require any flavour changes across international markets. But to its surprise, adjustments had to be made, not in its flavour but how it had to be positioned. The French add it to salad and eat it cold; In UK, it is a sandwich filler and pasta topping. In Japan, children have it as an after school snack. In Korea, it is sprinkled on ice cream.
Compiled by Anita Mandrekar

Advertising in the European Common Market is not easy as one would think. Childrens clothes are not popular in France where children are dressed as small adults. In Southern Europe, form-fitting clothes sell well but not in Netherlands where they loose clothing/ Cultural factors largely determine the way various phenomena are perceived. If the perceptual framework is different, perception of the message itself differs Existing perceptions based on tradition and heritages are often hard to overcome. In additions to concerns with differences among nations, advertisers find subcultures within a country require attention as well. In HongKong there are ten different patterns of breakfast eating. Besides these differences, there is the problem of changing traditions. In all countries, people of all ages, urban or rural, cling to their heritage to a certain degree but are willing to change some areas of behaviour. All differences have to be taken into account when advertising internationally. The point is that culture matters. Advertisers must appreciate the influence of political economy on social institutions and cultural values and ways of thinking. The position of men and women in society, the family, social class, group behaviour, how societies define decency and civility are interpreted differently within every culture. Advertisers must have an understanding of the influence of religion otherwise ads can offend consumers deeply. Legal considerations. Different countries have different advertising laws that need to be accepted and followed. Therefore while creating advertisements it is very important to know the laws that are imposed in that country. Laws that control comparative advertising vary from country to country in Europe. In Germany, it is illegal to use any comparative terminology .Belgium and Luxembourg explicitly ban comparative advertising, where as in UK , Ireland, Spain and Portugal it is allowed. Advertising on television is strictly controlled in many. In Kuwait the governmentcontrolled Tv network allowed only 30 minutes of advertising per day, in the evening. Now it is a little more than 30 minutes. Some countries have special taxes that apply on advertising. It is very important for the advertisers to identify this and act accordingly. Media Limitations In international advertising, an advertiser must consider the availability, cost , coverage and the appropriateness of the media. There are also media effectiveness varies across cultures. Imagine the ingenuity required of advertisers confronted with a situation, where eg in Brazil tv commercial s are sandwiched together in a string of 10 to 50 commercials within one break. in Japan there are only 5 national daily newspapers and conditions are necessary to buy advertising space. Asahi, Japans largest newspaper, is known to turn down a million dollars worth of advertising a month of ad revenues Language limitations

Language is one of the major barriers to effective communication . The problem involves different languages of different countries, or different languages or dialects within one country and the subtler problem of linguistic nuance and vernacular. Incautious handling of language has created problems in nearly every country. In Spanish-speaking countries one has to be careful of words that have different meanings in different countries. The word ball translates in Spanish as bola. Bola means ball in one country, revolution in another, a lie or fabrication in another and in yet another country it is an obscenity.
Compiled by Anita Mandrekar

Language translation encounters innumerable barriers that impede effective, idiomatic translation and this comes in the way of communication Everyday words have different meanings in different countries. Even pronounciations cause problems. Wrigley had trouble selling its spearmint gum in Germany until it changed the spelling to Speermint. Low literacy in many countries impedes communication and calls for greater creativity and use of verbal media. Even a tiny country like Switzerland had four languages, Advertising copywriters should be concerned less with obvious differences between languages and more with the idiomatic meanings expressed. It is not just sufficient to translate; it is necessary to interpret. Without a culturally correct interpretation of a countrys aesthetic values, a lot of advertising problems can arise. Interpretive knowledge requires a degree of insight that may be described as feeling. It is a kind of knowledge that depends on past experience for interpretation and is prone to misinterpretation if ones home country frame of reference is used. The Japanese, for example revere the crane as being very lucky because it is said to be lucky, however the number 4 should be avoided completely because 4 stands for death. Teacups are sold in fives and not fours, In understanding different cultures metaphors is a key doorway to success It is a mistake to discount myths, beliefs, superstitions or any other cultural beliefs Cultural elements must be evaluated in the light of how they might how they might affect a proposed advertising campaign Successful international advertising begins with cultural sensitivity
Compiled by Anita Mandrekar