The Hindu Business Line : Beyond surrogate advertising

SURROGATE ADVERTISING IS quite rightly frowned upon as it is but a cynical attempt at promoting products that public policy decrees is not in society's interest. But the Government should guard against any over-zealous interpretation of what constitutes surrogate advertising so as not to hurt legitimate efforts at brand extension. Given the integrated nature of markets, brand promotion has become an elaborate exercise, often extending across national boundaries. Consequently, it has become a costly affair.

The only way the corporate effort in this regard can be sustained is by spreading the risk across products though not all may bear fruit immediately. And if the trademark pertains to a legitimate FMCG product with clear business plans, though drawing inspiration from a product under regulatory restriction, a rigid interpretation of surrogate advertising may well kill the prospect of a brand ever acquiring a stature beyond the product with which it was associated initially. Indian companies may suffer an additional handicap compared to their global counterparts. They are relatively small and cannot so easily generate the enormous resources required for building brands. In contrast, brands recognised as distinctive trademarks or top corporate labels were surely built painstakingly over decades with huge outlays. The challenge of nurturing a powerful consumer brand is daunting, which is why global FMCG majors fiercely protect their successful labels created over time through huge investments.

Leveraging trademarks and umbrella branding are proven corporate strategies, as evident from the success of LG and Samsung brands across segments, from chemicals, telecom, consumer electronics to consumer durables. The Tata brand — arguably India's most respected across segments — now straddles many nationally and internationally renowned products and services, and aims to emerge the largest from the country. Strong trademarks mean a combination of positive product attributes, mainly reliability and quality. Branding decisions for new product categories have to consider the appropriateness of the fit between the product and the trademark, in terms of association, attribute and connotation. And here, the government is free to put companies under a scanner to determine if their umbrella branding strategy is transparent and genuine. But brand extension across products should be permitted, except when the purpose clearly is to encourage consumption of a product whose promos are prohibited by law.

The Government's efforts to promote the `Made in India' label should, therefore, be through a regulatory framework which will help Indian companies build, strengthen and sustain international competencies, and not through blanket bans on brand extensions. There is a need to understand the value inherent in successful Indian brands, as Intellectual Property Rights and intellectual capital can offer the keenest competitive edge to any nation. Optimal leveraging of valuable trademarks goes well with the Government's vision of promoting the `Made in India' label through various export promotion schemes, and nothing should be done to disturb this.

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