Advertising and Globalization Advertising and globalisation in India

Wellington, New Zealand

http://www.sasnet.lu.se/EASASpapers/7LynneCiochetto.pdf

The article reviewed focuses on India and contemporary advertising however uses the history of the industry's development in India and a discussion of the broader international trends in marketing for context. The introduction of advertising in India has impact the society and the various cultures found in India on multiple fronts. During the 1990's, advertising in India has seen a massive expansion; especially in regards to foreign advertisements. As India has steadily developed from an underdeveloped country to a more modern economy.

With this development, India has attracted a host of international companies who have entered the market. However, compared to other rapidly developing economies like China, India has also focused on developing domestic industries and has often implemented protectionist policies early in its development. This has also had major implications on the development of the marketing industry in India. This analysis will provide an overview of the article followed by an analysis of some of the marketing trends in India.

Article Summary

The article breaks down the state of marketing in India into multiple sections and factors. After a brief introduction, the research presents a background on marketing in India that includes the political and economic context for this industry first. The perspective on the current state of marketing and advertising begins with the period following India obtaining its independence from Britain.

"After independence from Britain in 1947 India had the classic profile of the 'underdeveloped country': small elites, large numbers of peasants and a predominantly rural population, high poverty levels, high mortality rates and low life expectancy, poor nutrition and an economy dominated by agriculture and exports of primary products." (Ciochetto, 2004)

Since its independence, India has been subjected to major...

However, India maintained this policy of isolationism and economic protectionism behind trade barriers for over 2 decades and did not play a major role in the internationalisation of the world economy that took place before the 1980s and global trade was avoided and the entry of foreign companies was not encouraged (Ciochetto, 2004). Therefore, the introduction of advertisements in India was not as comparatively fast as other popular targets for direct foreign investment.
India's social profile is also cited as a barrier to the spread of advertisements. Some of the social conditions that have stagnated the industry have included low amounts of disposable income as well as the purchasing profiles of many demographic groups. The upper class of Indians were the only demographic that had enough disposable income to buy international products such as electronics, telephones, disposable goods, among many examples provided. However, by 2002, this social profile had evolved and nearly half of durable goods were sold in rural markets.

Although advertisements first appeared in India in the nineteenth century, the advertising industry was slow to take hold in India. In fact, the total Indian advertising revenue in the 1950s was estimated to be under a million dollars USD (Ciochetto, 2004). However, Advertising expenditure grew at nearly 15% a year in the 1980s to reach $U.S. 896 million by the end of the decade according to one source provided. The massive expansion of the advertising industry brought many changes for domestic and international players in this market.

"In 1999 there were about 400 advertising agencies in India employing about 18,000 people. 15 of the top 20 advertising agencies have affiliations or joint ventures with foreign agencies who are among the top international agencies and most of them are American in origin, 12…