In order for a business to be successful, it is important for customers to be able to recall, remember, and recognize the product or brand. This can typically be accomplished through advertising and branding activities. However, direct promotion and advertising is not legal for certain types of products, such as cigarettes, alcohol, and betting platforms. Without promotion, it becomes difficult to create awareness and increase sales. To address this issue, the marketing technique of surrogate marketing has been developed. Surrogate marketing, as defined by Professor Manjunath and Sreekanth in a 2015 journal, is a technique in which “brand products that do not have permission for direct promotion, such as tobacco, cigarettes and alcohol, are associated with another product that can be publicly advertised.” The substitute or an alternative product can be similar or completely different, but the main objective is to keep the customer familiar with the brand and place it in their long-term memory.
Origin
According to a journal published in 2019 by Prabhu Kumar and Anurag, the practice of surrogate marketing originated in Britain. It was a result of protests by women in England, who were concerned about the negative impact of advertisements for alcoholic products on their husbands’ drinking habits. As the movement gained momentum, the government was eventually compelled to ban liquor advertising. In response, companies began to sell non-alcoholic products, such as juice, soda, and mineral water, under the same brand name as their alcoholic products, in order to maintain brand recognition among customers. This tactic came to be known as surrogate marketing, and it has been used by brands in various subtle ways ever since.
How Does It Work?
Product Extension
It has become a common practice for companies to launch new legal products using the same logo, brand name, tagline, and similar packaging as a banned product. This is evident in the case of Kamla Pasand pan masala, which is banned in India. The company has resorted to promoting their product through a surrogate, Kamla Pasand Elaichi, which is a mouth freshener.
The company has onboarded Bollywood stars such as Amitabh Bachchan and Ranveer Singh in their advertisements to appeal to their target audience. Furthermore, the advertisements also convey the message of excitement and happiness associated with the actual pan masala product. According to a journal by Viraj Chavan, 42 out of every 50 people can easily recognize the actual product by looking at a surrogate advertisement. However, when the logo, tagline, and packaging are similar, customers searching for pan masala may not understand that the advertisement is for Kamla Pasand pan masala.
Using the Mask of Unrelated Product
Alternative products can be used to deliver banned products to customers. A notable example of this is the Indian whiskey brand Royal Stag’s endorsement of Shahrukh Khan as their brand ambassador in 2012. Through advertising campaigns featuring Shahrukh Khan, the brand promoted a music CD with the tagline “small milate Jao, large banate jao”, which subtly referenced the brand’s association with whiskey. Additionally, the use of the same logo and brand name in these alternative products helps to increase brand familiarity among customers.
Secondary Brand Association through Sponsorship
Brands often promote themselves by sponsoring events or programs. As an example, in 2015, Kingfisher, a beer company in India, was the good times partner for 7 teams in the Indian Premier League (IPL). As a result of this partnership, Kingfisher created a television commercial (TVC) featuring players from the teams. This TVC, titled “Oo La La LA Le O” was broadcasted on television throughout the IPL season. In this commercial, Kingfisher prominently displayed their logo and brand name, despite not mentioning their specific product, beer, anywhere in the commercial. This strategy allows for customers to easily recall the company later on.
CSR activities
Corporate Social Responsibility (CSR) plays a crucial role in building a positive brand image for organizations. As a result, even companies that market restricted products engage in various CSR activities as part of their surrogate marketing strategy. A prime example of this is Godfrey Phillips India, one of the top 10 tobacco brands in India. The company operates under the motto “Together for Better” and has been recognized for its extensive CSR efforts. In 2018, the company received the 8th Asia’s Best CSR Practices award, and in 2019, it received the Greentech Foundation CSR Gold award and the CSR Leadership award. Through its CSR activities, the company prominently features its own brand name and logo, which in turn helps to increase its popularity and gain a favorable reputation among customers.
Benefits
Brand Familiarity & Recall
According to research by Review42, a majority of consumers, 59%, tend to spend their money on brands they are familiar with. This is a benefit that brands can achieve through the use of surrogate marketing, a strategy in which a brand is promoted through indirect means, rather than directly discussing the product itself. A survey conducted by Nielson found that when customers can recall a brand, 60% of them prefer to purchase that brand’s products. The primary goal of surrogate marketing is to increase brand familiarity and create brand recall.
For example, Shakib Al Hasan signed a sponsorship deal with Betwinner News, a surrogate promotion of the betting site – Betwinner, prior to the 2022 T20 World Cup start. As betting and gambling sites are banned in Bangladesh, the deal was canceled later. Despite later canceling the deal, Shakib’s conflict with the Bangladesh Cricket Board (BCB) was widely reported in the media due to this matter, which resulted in significant promotion for Betwinner.
Good Perception
A study conducted by Customer Thermometer revealed that 13% of customers are willing to pay up to 31-50% more for brands that positively impact their community. As a tactic of surrogate marketing, companies that market restricted products also engage in CSR activities to improve their perception among customers, which in turn helps to increase their sales. This demonstrates the effectiveness of CSR as a means of improving brand image and ultimately driving revenue growth.
Competitive Advantage
According to research conducted by Zippia, a significant portion of revenue, ranging from 60-80%, is generated solely through advertising. As certain products, such as cigarettes, alcohol, and betting websites, are not permitted to engage in direct marketing, it is essential for companies to invest in effective advertising in order to stay competitive. Surrogate marketing, in particular, can provide companies with a significant advantage in the marketplace. A prime example of this is Kingfisher, which leverages its Airline brand to promote its mineral water, as well as its beer brand. Another example is Pan Bahar, which has utilized the endorsement of Pierce Brosnan, known for his role as James Bond, to gain a competitive advantage.
Disadvantages
Low Product Knowledge
According to a survey conducted by Think with Google, 85% of shoppers consider product information and pictures to be extremely important in their decision-making process. However, when it comes to surrogate marketing, the main product is not always promoted or featured prominently, which can result in a lower conversion rate compared to traditional marketing methods. The lack of information and imagery for the main product can make it more difficult for shoppers to make an informed decision, ultimately affecting the effectiveness of the surrogate marketing strategy.
Less Effective for New Brands
Surrogate marketing is a crucial strategy for established brands as it allows customers to easily identify and relate to the main product through the use of the brand’s logo, tagline, or name. However, for new brands, it is vital to quickly create awareness among customers as they may not be able to recall the core product by simply looking at the logo or brand name. Establishing a strong brand identity is essential to build a loyal customer base for new brands. Therefore, it is crucial for new brands to invest in various marketing efforts to create a strong brand identity and build brand recall among customers.
Customer Misinterpretation
Surrogate marketing, which promotes a product indirectly, carries the risk of customer misinterpretation. This can lead to a significant failure of the entire advertisement investment. Therefore, while there is potential for gain, the high risk associated with this marketing strategy must be carefully considered before implementation.
Ethical Issues
Generally, the government of a country may impose restrictions on the sale and promotion of products that may cause health or other harm to people due to their use or consumption. On the other hand, the marketing strategy used in the promotion of such products can be called deceptive in one word. Because companies use loopholes in government rules and regulations to promote, which is an unethical practice.
Regulations
For a significant period, governments of various nations and the World Health Organization (WHO) have taken various measures to prevent companies and brands from marketing restricted products, even through surrogate marketing. On May 21, 2003, WHO created the Framework Convention on Tobacco Control (WHO FCTC), an international treaty aimed at reducing the demand and supply of tobacco and worldwide tobacco consumption, which 180 countries have signed by 2022. As a result, marketing tobacco products has become increasingly challenging for companies.
Through Cable Television Network Rules, 1994, when India banned the advertisement of alcohol and tobacco products, surrogate marketing began to grow at an alarming rate. In response, the Indian government issued a ban on the use of tobacco and nicotine as ingredients in any food through the Food Safety and Standards (Prohibition and Restrictions on Sales) Regulations in 2011. Pan masala companies then started providing free tobacco in separate packets with pan masala packets that customers mixed and consumed after purchase.
To combat the marketing and promotion of restricted products, the Central Consumer Protection Authority (CCPA) provided new guidelines under the Consumer Protection Act, 2019 in 2022. The main objective of these guidelines was to prevent misleading advertisements and protect consumers from being cheated. Additionally, the Advertising Standards Council of India (ASCI) has imposed several other restrictions, including that the substitute product to be advertised must exist in the market, have proper supply and distribution, have a monthly sales turnover of at least 20 lakh rupees, and an asset investment of at least 10 crore rupees.
Suggestions
In the case of restricted products, such as tobacco, a ban may be imposed on the launch of substitute products using the same brand name and trademark. This limits companies’ ability to follow the product extension strategy and to communicate the message of the actual product by launching unrelated products. To counter the effects of surrogate marketing, various seminars and campaigns can be organized to raise public awareness about the harmful effects of tobacco and other such products, thus reducing customer attraction to misleading advertisements. Furthermore, regulations can be put in place requiring health warning messages to be prominently displayed on at least 50% of the product packaging. This will help to further educate customers on the potential dangers of these products.
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