Advertising and Globalization in India - Essay Example

Advertising and Globalization in India Introduction Globalization has a great impact on how business is conducted including advertising strategies that would create a great impact on the identified market. The expanding globalization of multinational business and industries, dealing in consumer goods, for instance, demands the adoption of creative advertising strategies. Reaching a vastly expansive global market across diverse countries demand enhanced advertising campaigns that will have the necessary impacts on sales of the products and success of the business as discussed by Cheng (2004). Every country or region, however, presents unique opportunities and has strategic challenges to multinational businesses about the most effective advertising strategy. Advertising campaigns that work best in a country in Asia such as India may not necessarily have similar impact to that in the west such as the U.K. or the U.S. Furthermore, social, economic, and legal factors have a central role as determinant factors of advertisement. This concept forms the basis of a study conducted by Ciochetto (2004) in India. Ciochetto (2004) investigated the dynamics of advertising development in India in the wake of globalization trend and expanding operations of multinational companies and business. The study focuses on the development of television and satellite advertisement in India as used by multinational companies and businesses. This paper focuses on the concept of development of TV and satellite advertising in India as promoted by globalization and an explanation of the key theories from research and literature to justify the claims by Ciochetto (2004) in the study. Critical Review of Ciochetto’s Article Advertising in contemporary India has experienced notable advancements prompted by trends that emanate from the influence of globalization. Ciochetto (2004) explores contemporary trends in advertising as related to globalization, with reference to India. It is noteworthy that India has experienced massive developments in the advertising sector since the 1990s (Mar, 2005). Among the great developments is the expansion in satellite and television as the greatest media of advertising in India. Tabassum (2012) discusses the positive implications of the advent of satellite technology to globalization in India. Among the key importance highlighted are the advancements in advertisements through high technology. The advertising sector is subject to notable improvements in the use of technology. Ciochetto (2004) outlines the reforms in international advertising in India under the current trends of globalization. Advertising involves diverse aspects of idea presentation, mainly to the target market. Ciochetto (2004) also addresses the influence of reforms in the Indian society and culture. The study outlines various environmental factors that affect international advertising in India. The factors include the economy and culture. In addition, the legal and political systems are also considerable factors that influence international advertising in India. Diverse researchers acknowledge that both culture and the economy play critical roles in advertisement. As Thussu (2012) notes, the rise of India in the global scene is also contributed by its robust culture. The primary role of advertising is to attract customers, as well as to win and retain their loyalty. In essence, the target is to sell products or increase purchases in the market. According to Ciochetto (2004), advertising is a social construct that influences values, cultures, and roles in the society. In a global society where businesses and organizations are expanding to international markets, many foreign businesses alongside advertising agencies are targeting the Indian market (Sheoran, 2008). Ciochetto (2004) discusses India’s political climate in relation to marketing of products. The country, over a long time since independence, has maintained the principles of isolation and protectionism. The Indian government focused on imposing trade barriers that avoided entries of multinational companies and organizations. In 1973, for instance, the country had created measures that bar foreign investments. Provisions of the Foreign Exchange Regulations Act of 1976 restricted foreign companies’ operations in India (Nayak, 2014). The policies restricted multinational companies such as IBM and Coca-Cola from operating in the country, thereby, promoting their withdrawal between 1960 and 1980. Ciochetto (2004) attributes the low performance of the Indian economy characterized by a balance of payment problems experienced during the 1970s to the restrictive policies that limited multinationals from operating in the country. The Indian economy, however, improved during the 1980s. After 1985, India instituted initiatives to revive its economy. Among the reforms to revive the economy in India, was economic liberalization. The initiatives were effective in improving the country’s GDP level and per capita income. India’s globalization resulted from greater integration with other parts of the world as reported by Ghemawat and Altman (2015). There were expanded exports mainly the American market. According to Ciochetto (2004), exports to the U.S. attained a level high of exports to the U.S., amounting to $18 billion. Besides the U.S., the Western economy also expanded its trade with India. Other factors such as the Gulf War that occurred during the 1990s and its subsequent effects on oil prices affect the performance of the Indian economy. Another incidence, the Russian Economy collapse further had detrimental impacts on the Indian economy through loss of markets for the country’s subsidized imports. Economic liberalization in India, however, continued through to the 1990s. International financial institutions such as the IMF also helped stabilized the devalued Indian Rupee in 1991. As at 1997, there was a notable expansion of multinational governments to the Indian economy. In essence, foreign investments in the country promoted the necessity for foreign advertising as discussed by Ciochetto (2004). In an attempt to explain advertising in India, Ciochetto (2004) explores the country’s social profile. Remarkably, the country has a well-recognized economic and social diversity. Being a highly populated country, the second largest globally, India is characterized by diverse religious and class differences. Other parts including the northeast, has a majority poor population. Contrary to the northeast, Indians living in the south and west are considerably economically affluent. Other urban centers and cities in the country also have affluent population, except for cases of low-income settlements that are quite several throughout the country. The social profile of the Indian population influences two key factors: the disposable income and purchasing profiles. Both factors have a critical influence on advertising in India as addressed by Ciochetto (2013). Ciochetto (2004) traced the history of advertising in India to its origin in 1905 when B. Datram and Company was formed as the country’s pioneer advertising agency. The firs TV advert in India appeared in 1976. The 1980s, because of the expanding Indian economy, marked massive growth in advertising in the country. There were several alliances between local and foreign agencies in an attempt to improve the advertising sector. It is noteworthy that foreign and multinational agencies, in most instances, had the most share of advertising expenditure. In the 1990s, Ciochetto (2004) explains that there was a heightened expansion in advertising in India. Multinational companies spent huge budgets on advertising with new entrants in the Indian markets such as Samsung having highly invested in awareness, for instance. Besides the entrance of multinational companies, there were notable improvements in the profile of advertising agencies in India during the 1990s. Contrary to the 1970s when Indian advertising agencies dominated, the 1990s experienced a massive expansion of foreign agencies of advertisements. The affiliation between foreign and Indian and multinational agencies was a notable trend during the 1990s as explained by Ciochetto (2004). In fact, advertising agencies in India during the 1990s hit record high levels on global rankings. Examples include Unilever, Nestle and, Procter and Gamble. In 1999, nearly 400 advertising agencies were operational in India and serving an estimated population of 18,000 potential customers (Ciochetto, 2004). For every 20 advertising agencies, at least 15 had affiliations with foreign agencies. That emphasizes the great extent to which globalization had expanded the Indian advertising sector. The emergence of foreign agencies improved completion and local brands. Takeovers and competition improved Indian brand the quality of services. Generally, foreign companies expended their strategies the use of satellite channels. Agencies stated competing in various industries through advertising wars. Although a considerably high percentage of the population that owned radio in India compared to television, the latter was majorly used in adverts. In the 1990s, there was an improving trend in the ownership of TVs, especially in urban areas and towns. Besides TV expansion, satellite cable technology also improved in 1990s. Expenditures on advertising on Television increased remarkably from the years 1996 to 2000. Outdoor advertising also improved during that period. They include films and billboards mounted at strategic points in densely populated areas and cuties. Because of the improvements in India’s advertising sector, regulations were indispensable. There were several laws instituted in India to regulate information and content of adverts. They restricted adverts to acceptable contents only. The governing body prohibited products such as tobacco; The Advertising Standards Council of India was influential in regulating adverts and their contents. Alongside the council, the India Newspaper Society also controlled adverts by ensuring they upheld stipulated minimum moral standards. Advertising strategies used in India were mainly print and television. Ranganathan and Rodrigues (2010) argue that even during the era of globalization, India’s print media still has a notable coverage. Adverts were targeted to a population that would afford them. The middle class, for instance, had different consumption habit from the affluent; a factor that dictated the advertising strategy used to attract either of the group members. Notably, advertising in India shifted from the trend of focusing on product benefits to customizing the product to the target market as discussed by Sinclair (2012). In essence, advertising agencies also applied strategies including endorsement of products by celebrities. Conclusion The key goal of advertising is to create brand awareness, expand market dominance, and maintain customer loyalty. Attaining the goals of advertising in a highly globalized world is among the key challenge marketers face in the contemporary business environment. Multinational companies and businesses have a central challenge of differences in legal and social factors in their targeted countries, to which they must adhere. The case of enhanced advertising in India is of great consideration. Before the 1980s, India was a bureaucratic society that restricted expansion of multinational companies. That caused the withdrawal of multinationals such as Coca-Cola from the Indian market because of restrictive laws. With the development of globalization, advertisement in India improved expansively. Multinational companies were allowed to operate through favorable laws instituted in India during the 1980s. The 1990s was the period when India experienced the greatest improvement in its advertising industry. As discussed by Ciochetto (2004), India is among the world’s most globalized economies. Proper advertising is fundamental for the success of multinational businesses operating in India. Bibliography Cheng, H 2004, "Advertising and Societies: Global Issues", Journalism and Mass Communication Quarterly, 81, 1, pp. 190-191. Ciochetto, L 2004, Advertising and globalisation in India, Unpublished project report, Massey University, Wellington, New Zealand. Retrieved April 10, 2015 from http://www.sasnet.lu.se/EASASpapers/7LynneCiochetto.pdf Ciochetto, L 2013, Globalisation and Advertising in Emerging Economies: Brazil, Russia, India and China (Vol. 51), Routledge. Ghemawat, P, & Altman, S 2015, 'INDIA'S GLOBALISATION IMPERATIVE', Business Today, 23, 26, pp. 132-136. Mar, P 2005, 'William Mazzarella. Shoveling Smoke: Advertising and Globalization in Contemporary India', The Australian Journal Of Anthropology, 1, p. 135. Nayak, A 2014, March 22, Foreign Contribution Regulation Act 1976, India Microfinance, retrieved April 10, 2015 from http://indiamicrofinance.com/fcra-act-1976.html Ranganathan, M., & Rodrigues, U. M 2010, Indian media in a globalised world, SAGE Publications India. Sheoran, N Spring 2008, Advertising The “New” India in Post-Liberalization India: Creating New Consumers With Advertising Images, Global Studies Review, 4, 1. http://www.globality-gmu.net/archives/661 Sinclair, J 2012, Advertising, the Media and Globalisation: A World in Motion, Routledge. Tabassum, S 2012, Effect of Globalization on Indian Television and Culture, Retrieved April 10, 2015 from https://sadianasr.wordpress.com/2012/04/02/effect-of-globalization-on-indian-television-and-culture/ Thussu, DK 2012, 'A Million Media Now! The Rise of India on the Global Scene', Round Table, 101, 5, pp. 435-446. Read More