RESEARCH w.r.t.

ALCOHOL

TOPIC:

IMPACT

OF

SURROGATE

ADVERTISEMENTS ON THE CONSUMER BUYING BEHAVIOUR

INTRODUCTION
India is one of the many countries wherein direct advertisement of products like alcohol and tobacco is banned. Under the Indian Cable TV Network Regulation Act passed in 1995, the Government of India banned advertisements of these products, stating that they negatively affect the health of consumers, specifically the youth. This led marketers of the above products to resort to an alternate means of advertising i.e. Surrogate Advertising. In general terms, the concept of surrogate advertising is that form of advertising in which a surrogate i.e. a substitute product is promoted using an established brand name. Such an effort results in brand recall and is believed to influence peoples behaviour in regard to the core product, which in obvious sense is one that cannot be advertised directly. In India, surrogate advertising is extensively used to promote alcohol and tobacco products since 1995. Some well known examples in this context would be Bacardi Music Cds, Seagrams Imperial Blue Music Cds, Kingfisher Soda, Red and White Bravery Awards and Wills Lifestyle. Although in each of the above examples, the concerned company is directly advertising a different product, however their main intention is to indirectly promote their core products such as liquor or tobacco. When people are exposed to such advertisements they directly associate the same with banned products offered under the same brand name. Hence, this tactic helps marketers to remind consumers of their products that the brand still exists in the market. Every year marketers of the above brands spend a hefty sum in manufacturing and promoting surrogate products. Surrogate advertisements formed 5 per cent of the total Indian Advertising Industry estimated at approx $4.5 billion, as per the Pitch Madison Advertising Outlook (2009). Such a statistic seems extraordinary, considering the facts that firstly, the actual product is not even shown to the customers and secondly, there is no specific tool to evaluate the impact of a surrogate ad campaign. Though a lot of research has been done on

the concept of surrogate advertising, its ethical impact, not many have delved into the aspect of measuring its impact on the minds of consumers as well as sales. Hence this study aims to test the viability of surrogate advertising with respect to alcohol brands in India, and check whether it has any positive/negative impact on the minds of consumers. The researchers have applied factor analysis for finding out the important factors which influence the attention of viewers with respect to surrogate ads. Secondly the researchers have applied co-relation to find out whether there is any co-relation between buying behaviour and effect of surrogate ads.

LITERATURE REVIEW
The literature available on surrogate advertising is scanty. This may be due to the fact that this phenomenon has originated quite recently and has a major presence in countries where direct advertising of harmful products like alcohol and tobacco is prohibited. The purpose of placing a ban on liquor advertisements in India is defeated by the concept of surrogate advertising. The practice is misleading in nature and marketers blatantly reveal their hidden agenda by not emphasizing much on the surrogate products. There are several examples wherein surrogate ads have ended up being false and dishonest. This practice is considered to be unethical in nature and advocates strict regulatory measures to curb the same. (Mehta, 2003)

(Rishi Raj Sharma, 2007), laid stress on the attitude of the targeted consumers towards the practice of surrogate advertising vis-a-vis their psychographic profiles towards advertising in general. To determine the various factors to reveal the ethical perceptions of the respondents towards the issue of surrogate advertising, Factor Analysis was used. The K-Means Cluster Analysis was used to identify the psychographic segments of the respondents grouped together on the basis of some homogeneity in their psychographic attributes with regard to their attitude towards advertising in general. In the end, Multiple Discriminant Analysis was used to map the profile of different clusters of respondents. Except for these all, the Chisquare and ANOVA statistics were also used in order to study the association and the

variance with regard to the different demographic and psychographic attributes of the respondents. The finding was that surrogate advertising is not perceived positively by the various sections of Indian society. The reaction of most of the targeted consumers was more dominating towards the negative side for surrogate advertising and they considered it to be an unethical practice. (Payal B Shah, 2008), examined the relationship between tobacco ads, counter ads, & smoking status amongst Indian youths. A two-stage probability sample of 60,001 people was taken, and all were interviewed with an anonymous yet self-administered questionnaire. Binary logistic regression analysis was performed with smoking status as dependent variable; exposure to cigarette ads as independent variables. The findings were that people who were exposed to cigarette brand names during sports events or others, were significantly more likely to be smokers; as compared to those who had less exposure to such ads. (Dr. Jyotsna Haran, 2013), examined the fact that since the direct promotion of Liquor products got banned under the Cable TV Regulation Act, the brands had to diverge towards Surrogate Advertising gradually. There have been many significant researches done to study the impact of advertisements on the buying behaviours of consumers, and also the most important factors that influence the consumers buying decision or are responsible for their diversion towards a particular product/service, have been studied. The rural teenagers like TV advertisements more than the urban teenagers, and hence, their involvement is more in buying the products being advertised on TV when compared to urban teenagers. Their perception is that the products that they use are as good as expected from TV advertisements. It has also been studied that the male teenagers are more influenced by TV advertisements than their female counterparts. The study was conducted on 866 teenagers of Haryana (431 were Male, and 435 were female) out of which 440 were rural and 426 were urban. The test was conducted using means and ANOVAs. (Bishnoi & Sharma, 2010) The need for high preference to advertising is highlighted for companies that want not only to retain the market, but also take positive steps to increase their market share. TV advertisements are most preferred by the respondents out of all the medias. (Ayanwale, Alimi, & Ayanbimipe, 2005)

(Kumar, Gangal, & Singh, 2011) examined the role played by advertising in influencing consumers buying behaviour for Nestle, which comes out to be positive. According to their study, TV advertisements of Nestle influence the consumers the most. The market provides a key to gain actual success to only brands which match best to the current environment.

The emotional response of consumer purchase behaviour is the variable that results into strong association with the consumer buying behaviour. The relationship between independent variables which are environmental response and emotional response with attitudinal and behavioural aspect of consumer buying behaviour was investigated. The outcome of this research was that people purchase those brands with which they are emotionally attached. (Abideen & Saleem)

RESEARCH GAP
While conducting the literature review, the researchers found that although a lot of researches have been done on the ethical dimensions of Surrogate Advertisements, but there are hardly any researches conducted which would tell the impact of the surrogate advertisements on buying behaviour of consumers with respect to Alcohol. Previously, other researchers had been studying the moral aspects of surrogate ads for alcohol and cigarettes. There had been many researches which said that surrogate advertisements for alcohol and cigarettes must be banned. But there are hardly any researchers who would have delved into the study of the degree of motivational factor for buying behaviour of consumers with respect to alcohol. Hence, the aim of the researchers is to fill this research gap by studying the effect of surrogate advertisements on consumers buying behaviour for alcohol.

NEED
The empirical evidence that the researchers have on hand, shows that prior research has been mainly done with respect to the ethical aspect of surrogate advertising and how this practice affects the ethical perceptions of people. However, not much has been researched on the impact of surrogate advertising on consumer behaviour. Considering the fact that alcohol companies allocate a significant part of their marketing expenditure on surrogate ads, it is highly imperative to know whether this makes any tangible difference when it comes to the buying behaviour of consumers. Alcohol companies by means of surrogate advertising do not intend to market their surrogate products, but rather their objective is to help consumers recall their brand and its core offerings in an effort to boost sales of the same.

SCOPE
This research would enable the researchers to determine whether surrogate advertisements make a significant difference in the buying behaviour of consumers and thus the researchers may be in a better position to state whether this practice is indeed a viable proposition for the marketers of alcohol brands and if the ads actually have an effect then which are the factors in those surrogate ads that drives the certain behaviour.

DATABASE AND METHODOLOGY

This research is not location specific and although only Indian residents were included in an initial sample of 200 respondents, their location within the country was ignored. Since the survey was conducted online, anyone who was found eligible to participate in the survey was considered. A final sample size of 150 was decided upon, based on the responses to the most critical screening question i.e. Do you consume alcohol? and only those who checked yes for the mentioned question comprised of the final sample.

A structured questionnaire comprising of 8 multiple choice questions was used. Consumer attitude pertaining to 3 of the most popular alcohol brands available in the Indian market was analyzed. Their purchase intensity, exposure to surrogate advertisements and motivation power of surrogate advertisements for each brand were rated on a 5-point Likert scale. Purchase intensity was considered as the dependent variable, whereas exposure to surrogate advertisements and motivation power of surrogate advertisements were taken as independent variables. Karl Pearsons Co-relation was used to test the co-relation between the 3 variables and subsequently a Multiple Regression Analysis was conducted to test whether the independent variables were able to predict a significant change in the dependent variable. The second objective of this research was to determine the key factors which attract customer attention towards surrogate advertisements. The researchers identified 10 possible motivational variables and subsequently importance of each variable was tested on a 5 Point Likert Scale ranging from not at all important to extremely important. The analysis was done using the computer applications SPSS (Version-20.0.0) and Microsoft Excel (Version -2007)

ANALYSIS
Effect of Surrogate Advertisements on Consumer Buying Behaviour with respect to Alcohol Multiple Regression A multiple regression analysis was performed for all the three brands i.e. Bacardi, Royal Stag and Kingfisher respectively. Following tables show the co-relation between purchasing behaviour, exposure to advertisements and motivation power of advertisements for each brand, respectively:

Correlations - Bacardi Q5-1 Q5-1 1.000 Pearson Correlation Q6-1 Q7-1 Q5-1 Sig. (1-tailed) Q6-1 Q7-1 Q5-1 N Q6-1 Q7-1 .258 .232 . .001 .002 146 146 146 Q6-1 .258 1.000 .297 .001 . .000 146 146 146 Q7-1 .232 .297 1.000 .002 .000 . 146 146 146

Correlations Royal Stag Q5-2 Q5-2 1.000 Pearson Correlation Q6-2 Q7-2 Q5-2 Sig. (1-tailed) Q6-2 Q7-2 Q5-2 N Q6-2 Q7-2 .160 .279 . .027 .000 147 147 147 Q6-2 .160 1.000 .209 .027 . .006 147 147 147 Q7-2 .279 .209 1.000 .000 .006 . 147 147 147

Correlations - Kingfisher Q5-4 Q5-4 1.000 Pearson Correlation Q6-4 Q7-4 Q5-4 Sig. (1-tailed) Q6-4 Q7-4 Q5-4 N Q6-4 Q7-4 .217 .367 . .005 .000 142 142 142 Q6-4 .217 1.000 .413 .005 . .000 142 142 142 Q7-4 .367 .413 1.000 .000 .000 . 142 142 142

When we observe the first rows respectively in all the three tables above, we can note the Pearson co-relation co-efficient between all three variables with respect to the first variable (Q5) i.e. the purchase intensity for each brand. If we read across the columns we may not the co-relation co-efficient for both exposure to ads (Q6) and motivating power of ads (Q7). For Bacardi, the purchase intensity is positively co-related with both exposure and motivating power of ads, however the co-relation co-efficient are merely .258 and .232 respectively which indicates low correlation. Similarly, co-relation coefficients for Royal Stag are .160 and .279 and the same for Kingfisher are .217 and .317. On the whole it could be generalized that although there is a positive co-relation between purchase intensity of all the three brands with the exposure to their ads, as well as the motivating power of those ads, the co-relation is pretty low. The table below shows the model fit for each regression model applied. Here we would look at the adjusted R-square figures to gauge the estimated variability in the dependent variable i.e. purchase intensity predicted by the independent variables i.e. exposure to surrogate advertisements and motivating power of surrogate advertisements.
Model Summary Adjusted R Square .080 .076 .128 Std. Error of the Estimate 1.154 1.212 1.233

Model Bacardi Royal Stag Kingfisher

R a .305 .298 .374

a a

R Square .093 .089 .140

DurbinWatson 2.010 1.626 1.725

It is noted that the adjusted R-square for Bacardi is approx .08 which implies that approx 8% variability in consumers purchase intensity is predicted by their exposure to surrogate advertisements and the motivating power of surrogate advertisements. Similarly the percentage variability figures for Royal Stag and Kingfisher are approx. 7.6% and 12.8% respectively. Based on the above information, it can be implied that surrogate advertisements do not have a major influence in the purchasing decisions of consumers who consumer liquor belonging to the mentioned brands. The table below shows the ANOVA values for all the three regression models used:
ANOVA Sum of Squares 19.530 20.594 34.444 Mean Square 9.765 10.297 17.222

Model Bacardi Royal Stag

df 2 2 2

F 7.331 7.014 11.333

Sig. b .001 .001 .000

b b

Kingfisher

The null hypothesis for this research problem was that surrogate advertisements do not have any significant impact on consumer buying behaviour. At a confidence level of 95% the null hypothesis is rejected for all the three models as the figures in the last column i.e. Sig. are all less than the critical significance value of 0.05. Hence we may infer that although both our independent variables which are two dimensions of surrogate advertisements have a low impact on the dependent variable, it is still considered significant enough to predict at least a small percentage of change in the dependent variable i.e. purchase intensity. Finally the regression coefficients for each model can be seen in the table below:

Coefficients

Unstandardized Coefficients Model Bacardi (Constant) Q6-1 Q7-1 Royal Stag (Constant) Q6-2 Q7-2 Kingfisher (Constant) Q6-4 Q7-4 B 1.223 .226 .240 1.185 .126 .413 1.233 .099 .415 Std. Error .273 .091 .118 .322 .097 .131 .329 .108 .107

Standardized Coefficients Beta .208 .170 t 4.484 2.488 2.040 3.683 .106 .257 1.305 3.161 3.746 .079 .335 .916 3.875 Sig. .000 .014 .043 .000 .194 .002 .000 .361 .000

Collinearity Statistics Tolerance .912 .912 VIF 1.097 1.097

.956 .956

1.046 1.046

.829 .829

1.206 1.206

By looking at the standardized Beta coefficients for each model, we can ascertain which independent variable is a better predictor. For Bacardi we note that Ad Exposure has a slightly higher Beta value when compared to Ad Motivation Power, hence the former holds slightly higher importance when it comes to predicting the Purchase Intensity. For the other two models, it is the Ad Motivation Power which has a significantly higher Beta value and hence is a better predictor. The un-standardized Beta coefficients could be used to derive the regression equation for each model respectively

Identifying Key Factors which attract viewers attention towards Surrogate Advertisements The researchers identified 10 variables which could influence viewers attention towards surrogate advertisements. These are: 1. Music in the ad 2. Celebrity Involvement 3. Attractive Models 4. Theme of the ad 5. Length of the Ad 6. Language of the Ad 7. Product Advertised in the Ad 8. Brand 9. Medium of the Ad ( TV,Print,Online etc.) 10. Context of the Ad (The show during which the ad is telecast)

The importance of all these factors were rated by respondents on a 5-Point Likert Scale where 1=not at all important and 5=extremely important. The reliability of all 10 variables was initially tested. Figures are shown below:

Reliability Statistics Cronbach's Alpha .892 10 N of Items

A Cronbachs Alpha score of .892 implies that the data is highly reliable. The generally accepted value is anything over .70. The Bartletts test of sphericity is used to determine the fitness of the model used. A KMO figure of over 0.6 implies that the model is a good fit. In this instance, a KMO figure of .870 is observed which proves that the factor analysis model is indeed a good fit. The table below displays the results:

KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Approx. Chi-Square Bartlett's Test of Sphericity df Sig. .870 793.181 45 .000

The mean scores for all 10 variables are given below:

Report Q8-1 Mean N 2.41 148 Q8-2 2.59 150 Q8-3 3.37 149 Q8-4 2.84 149 Q8-5 2.63 149 Q8-6 2.61 148 Q8-7 2.76 148 Q8-8 3.52 147 Q8-9 Q8-10 3.20 148 2.86 149 1.341

Std. Deviation 1.183 1.165 1.495 1.274 1.227 1.291 1.338 1.357 1.313

It is noted that that variable 8 i.e. brand has the highest mean score, followed by variable 3 i.e. the use of attractive models in the ads and variable 9 i.e. the ad medium. Hence these three variables appear to be the most important. All the variables have a mean score of over 2.5 hence it can be inferred that all of them are important .This could be re-affirmed by looking at the communalities table below, wherein each variable has an extraction value greater than 0.5 which implies that all of them hold considerable importance in attracting viewers attention towards surrogate advertisements.
Communalities Initial Q8-1 Q8-2 Q8-3 Q8-4 Q8-5 Q8-6 Q8-7 Q8-8 Q8-9 Q8-10 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Extraction .667 .799 .833 .778 .761 .765 .709 .736 .744 .682

The 10 variables were reduced to 3 key factors as result of the Factor Analysis Test. The same is better explained in the scree plot shown below and the subsequent table

Total Variance Explained Component Initial Eigenvalues Extraction Sums of Squared Loadings Total % of Variance 1 2 3 4 5 6 7 8 9 10 5.261 1.252 .959 .625 .436 .421 .364 .266 .210 .206 52.611 12.523 9.589 6.246 4.359 4.209 3.643 2.655 2.102 2.064 Cumulative % 52.611 5.261 65.134 1.252 74.723 80.968 85.327 89.536 93.179 95.834 97.936 100.000 .959 Total % of Variance 52.611 12.523 9.589 Cumulative % 52.611 3.299 65.134 2.530 74.723 1.644 Total Rotation Sums of Squared Loadings % of Variance 32.985 25.301 16.436 Cumulative % 32.985 58.286 74.723

By looking at the scree plot above in conjunction with the above table, it is noted that that the total Eigenvalue becomes near a value of 1 at the 3rd component. In addition all 3 components contribute to a 74% total variation. Hence 3 clear factors can be deduced out of this interpretation. The factor-variable combinations can be seen below in the rotated component matrix:

Rotated Component Matrix Component 1 Q8-1 Q8-2 Q8-3 Q8-4 Q8-5 Q8-6 Q8-7 Q8-8 Q8-9 Q8-10 .811 .774 .768 .627 .556 .772 .766 .739 .753 .766 .874 2 3

The following groupings are made on the basis of the above table Factor 1 Variables 1,4,5,6 and 7 (Music, Theme, Length of Ad, Language, Product Advertised) Factor 2 Variables 8, 9 and 10 (Brand, Medium of Ad, Context of Ad) Factor 3 Variables 2 & 3 (Celebrity Involvement, Attractive Models) On the basis of the above groupings, the researchers have made the following classifications: Factor 1 Intrinsic Factors Factor 2 Appeal Factor Factor 3 Extrinsic Factor

CONCLUSION

Our first research objective were to ascertain whether surrogate advertisements have any sort of impact on buying behaviour of Indian customers with respect to alcohol products. After analyzing the impact of surrogate advertisements on the consumer purchase behaviour for three of the leading alcohol brands in India, the researchers can confidently state that surrogate advertisements indeed bear an influence although very limited in the alcohol buying behaviour on consumers in India. Whether this limited influence is enough for marketers to incur such heavy expenditure on surrogate advertisements is a different question altogether and may require further research. Our second objective was to determine the key factors which attract viewers attention towards surrogate advertisements. An exhaustive list of 10 variables was made and consumers rated the importance of each variable in attracting their attention. Post collection and analysis of the data on hand, it was found that all 10 variables are quite significant in attracting viewers attention. Further analysis helped the researchers classify these 10 variables into 3 key factors namely; intrinsic factors i.e. factors purely related to the advertisement, appeal factors i.e. factors which enhance the beauty of the advertisements and finally, extrinsic factors i.e factors which are beyond the scope of the advertisement.

Bibliography
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