Ban on Tobacco Advertising – Impact on Outdoor Advertising in India

Details

Case Code : CLMC-005
Publication date : 2005
Subject : Marketing Communications
Industry : Tobacco Products
Length : 04 Pages
Price : Rs. 100

To download this case click on the button below, and select the case from the list of available cases:

» Marketing Communications
Short Case Studies
» Marketing Case Studies**
» Case Studies Collection
» View Detailed Pricing Info

Key words:

Anti-Smoking Act, ITC Limited, Gold Flake, Wills, Godfrey Philips India Limited (GPI), Outdoor advertising, Below-the-line promotions, tobacco industry, hoardings, surrogate advertising, O&M, Lowe

Note

1: This caselet is intended for use only in class discussions.
2: More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.

 

Abstract:

Tobacco companies generally opt for outdoor advertising due to its reach, coverage and the long-lasting impression it makes in the minds of the customers. This caselet analyzes the impact of the ban on tobacco advertising by the Government of India (GoI) on tobacco marketers and the outdoor advertising industry. It also highlights the increasing use of hoardings by marketers in other sectors like insurance, telecom, banking and finance. The caselet also describes briefly about the below-the-line (BTL) promotions used by tobacco companies in India, to generate awareness and sustain demand for their products.

Issues:   » Impact of regulatory environment on marketing communication strategy   » Importance of outdoor advertising as a marketing communication tool   » Need for organizations to adapt to changing environmental factors   » De-link tobacco brands to leverage the brand equity in other product segments Introduction The Government of India (GoI) has imposed restrictions on various forms of advertising of tobacco products over the years. The government first made amendments to the Cable TV Act 1995 due to increasing pressure from public interest groups. In the year 2000, the Information & Broadcasting Ministry barred the telecast of liquor and cigarette ads. From 2002, the ministry also began to clamp down on surrogate advertising by liquor and tobacco companies.

On May 1, 2004, the Government of India passed the Anti-Smoking Act that prohibited smoking in public places and banned any direct or indirect form of advertising of tobacco products. The Act stated that there should be separate 'Smoking Zones' in hotels with 30 rooms, and restaurants with 30 seats. It also prohibited the sale of tobacco products near educational institutions and to children below 18 years of age. Any violation of the Act entailed imprisonment and/or a fine ranging from Rs 1,000 to Rs 10,000.

Questions for Discussion:

1. Outdoor advertisers stand to lose Rs 600 million as tobacco companies are their major customers. Briefly describe the repercussions, which the ban on advertising and smoking will have on outdoor advertisers. Why did companies like ITC and GPI rely to a large extent on outdoor advertising for promoting their products?

2. What promotional steps should tobacco companies take to overcome the effects of the ban on advertising of tobacco products? Explain with reference to ITC.