PRESENTED BY-:Saurabh Nigam2nd SemesterManagement scholar14pmm504Department of Pharmaceutical Management 1

FLOW OF PRESENTATION

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Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.

Advertisers include not only business firms but also museums, charitable organizations, and government agencies that advertise to various target publics.

Ads are a cost-effective way to disseminate messages,

whether

• to build brand preference for Coca-Cola or

• to educate a nation's people to avoid hard drugs.

Advertising is expected to tell the truth, and to tell it well.3

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POSSIBLE ADVERTISING OBJECTIVES

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PRODUCT ADVERTISING

Nonpersonal selling of a particular good or service.

- TV ads

- billboards

- junk mail

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PIONEER ADVERTISING

“… tries to develop primary demand…”

Done in the early stage of the Product Life Cycle.

Also called as informative advertising

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INSTITUTIONAL ADVERTISING

Promoting a concept, idea, or philosophy, or the goodwill of an industry, company, or organization.

This is closely related to the PR program of the company.

Also called Advocacy advertising.

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COMPETITIVE ADVERTISING

Tries to get you to take action now - buy the product now. Immediate Buying

Direct Indirect

Tries to point out the advantages so if you think about this product later, you will buy our brand

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Either directly or indirectly comparative, positive or negative, and seeks “to associate or differentiate the two competing brands”

The Federal Trade Commission (FTC), United States, defined comparative advertising as “advertisement that compares alternative brands on objectively measurable attributes or price, and identifies the alternative brand by name, illustration or other distinctive information.”

COMPARATIVE ADVERTISING

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ADVERTISEMENT COMPARINGHORLICKS WITH COMPLAN

To degrade the competitor’s brand on the basis of value proposition the competitive brand is offering

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Comparative advertisement ofJet Airways, Kingfisher Airlines and Go

Air

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WHY COMPARATIVE ADVERTISEMENT..??

Due to liberalisation and globalisation of economy, and dismantling of “License-permit” system, entry into production and services is no more barrier and so the thrust of competition has shifted to aggressive and vigorous promotion of products and services.

In a competitive environment, every representation of a product or service, is based on its comparison with those of the competitors and so is not about “what we are” but “ what others are not”.

These practices raise questions about truthfulness and fairness of representation of products and services. 16

Indian courts have traditionally allowed advertisers ample leeway when making puff statements about their products.

Even untrue claims about a product are often allowed, with the line being drawn only at disparagement or slander of another producer or its goods.

As a result, puff statements regularly feature in comparative advertising and, over time, the courts have developed a set of principles to assess the legitimacy of such claims.

EMERGENCE OF REGULATIONS FOR COMPARATIVE

ADVERTISING IN INDIA

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Monopolies and Restrictive Trade Practices Act, 1969, (MRTP) was enacted to prevent monopolies and restrictive trade practices in the economy.

In 1984, the MRTP Act was amended to add a chapter on Unfair Trade Practices and provided a basis upon which a claim could be made against disparagement of goods.Section 36 A of the Act lists several actions to be an ‘unfair trade practice’.

The provision which pertains to comparative representation is contained in Section 36 A(1)(x)

EMERGENCE OF REGULATIONS

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According to Section 36-A(1)(x) 'unfair trade practice' means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provisions of any services, adopts any unfair method or unfair or deceptive practice including any of the following practices, namely :-

the practice of making any statement, whether orally or in writing or by visible representation which, gives false or misleading facts disparaging the goods, services or trade of another person.

The MRTP Act created a body called the “DGIR” and a judicial body called the “MRTPC”

Then it was repealed by the Competition Act 2002.

EMERGENCE OF REGULATIONS

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In addition to the Monopolies and Restrictive Trade Practices Act, the Trademarks Act 1999 (Section 28(9) –notified with effect from September 15 2003, mandates that the use of a registered trademark by an advertiser results in infringement if it: takes unfair advantage of the mark’s reputation; is contrary to honest practice in industrial or commercial matters; is detrimental to the mark’s distinctive character; or damages the reputation of the trademark.

EMERGENCE OF REGULATIONS

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The “Advertising Standards Council of India(ASCI)” specifies that comparative advertisement is permissible if:-The aspects of the products compared are clearThe comparisons do not confer artificial advantages on the advertiserIt is factual and substantiableThe consumer is unlikely to be misleadThere is no unfair denigration of the competing product. 

INDIA’S ATTITUDE TOWARDS COMPARATIVE

ADVERTISEMENT

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In effect, self-praise is allowed; slander is not.

Defamation of competitors and their products is not permissible under Indian laws

It is also held that direct reference to another product’s inferiority cannot be carried in an advertisement.

INDIA’S ATTITUDE…..

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At the same time, the courts have ruled that if a competitor makes the consumer aware of his mistaken perception about a product, the plaintiff cannot complain against such action.

Comparative advertising is allowed only if it is done within certain permissible limits, along pre-defined parameters.

Advertisers must in that case be cautious and careful before targeting their competitor’s products.

INDIA’S ATTITUDE….

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INADEQUACY OF RULES AND REGULATIONS

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Dispute related to the television commercial of Volini pain reliever manufactured by Ranbaxy Laboratories.

The Gujarat High Court held that the advertisement disparaged Paras Pharmaceuticals Ltd’s product, as the inferior product depicted in the advertisement, bore uncanny resemblance to the packaging of moov.

MOOV VS VOLINI CASEPARAS PHARMACEUTICALS LTD. VS

RANBAXY LABORATURIES LTD.

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The Commission elaborated the meaning of the provision:

In order to bring home a charge under clause (x) of section 36A(1) it must be established that the disparagement is of the goods, services or trade of another.

The words "goods of another person" have a definite connotation. It implies disparagement of the product of an identifiable manufacturer.

REGAUL VS UJALARegaul Blue India Ltd. v/s Jyothi Laboratories

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The MRTPC was of the view that

“Colgate has been in the business of manufacturing and selling toothpaste in India for more than 50 years and the word toothpaste has become synonymous with Colgate over the years.”

The Commission in addition noted that the jingle in the background was a familiar one of Colgate. The comparative product in the television commercials could, thus, be identified as Colgate dental cream.

Thus, it became a case of comparative advertisement and a claim was made of disparagement of Colgate’s products.

New Pepsodent v/s Colgate CaseHindustan Unilever Limited v/s Colgate Palmolive

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As Finance Minister and one of the early architects of liberalization, Chidambaram rightly highlights:

“A world class legal system is absolutely essential to support an economy that aims to be world class. India needs to take a hard look at its commercial laws and the system of dispensing justice in commercial matters in order to ensure fair trade.”

FM on regulations for comparative advertisement

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No….

To summarize the interpretation of the Commission, an advertisement could disparage other products and yet, it would not be a case of ‘disparagement’ so long as the disparaged product is not identifiable.

The conflicting claims would need to be assessed in the context of the constitutional provisions on the Fundamental Rights, privileging the freedom to speak.

Is the law adequate to prevent unfair trade practices?

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The opening up of the economy, on its own, is not going to create and sustain competition. An appropriate law, adequate enforcement, strong infrastructure, and a quick dispute settlement mechanism would be needed to sustain competition.

In the absence of it, we would only be regressing from a ‘license permit raj’ to the ‘jungle rule of the marketplace.’

Is the law adequate.....?

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Do comparative ads help the brand?

It is most often seen in markets and categories that are price-sensitive or where a benefit/attitudinal upper hand by brand is the key to winning consumer votes in a crowded me too category. Consumers today need instant, ready-to-consume information on products and services. Comparative advertising helps them make informed choices.

This, of course, assumes that comparative advertising does not misrepresent the facts.

Rohit Ohri,

Managing Partner

JWT India.31

Do comparative ads help the brand?

Some brands want to build their images around controversy and ambush in which case, it may still be strategically correct. Still, there is no research that shows consumers like a name-caller anymore than they like a brand that seeks to connect with them in a positive way.

Lynn D’souza

Chairman and CEO,

Lintas Media Group

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Advantages of Comparative advertising

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There is a danger that once undertakings address the merits and inadequacies of competing goods or services, they may be tempted to denigrate them or derive unfair advantages from such inaccurate comparisons.

Commercial relationships may be exposed to the constant threat of unfair practices.

The risk of consumer confusion and deception through Comparative advertising occurs in the following situations,

•When advertisers of two or more competing  brand make substantiated but irreconcilable product claims.

•When there are incomplete comparisons.

RISK OF COMPARATIVE ADVERTISING

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While it is true that comparative advertising is a two-sided tool, with both potential and dangers (if misused).

It can develop into a powerful tool for the marketer as well as  for consumers if handled with restraint and good judgement.

Avoiding any negative references to competitive products and showing both products in a fair and equal manner will ensure that  dual mission of comparative advertising is accomplished – that of educating the consumer and selling the product.

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