Critical analysis of advertising and globalisation

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 transformations in its social, political, and economic structure.

After some companies began to enter the Indian market through international expansion efforts, the first wave of advertising began to emerge in the country. 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 out of 15." (Ciochetto, 2004)

Much of the growth of the industry also depended upon environmental factors such as the development of technology. According to the World Bank radio ownership is more than television, radio ownership being 119 per 1,000 people, in 1995, 120 per 1,000 in 2002, while television ownership was 61 per 1,000 in 1995 and 83 per 1,000 in 2002 (2003) (Ciochetto, 2004). Since most advertisements from international firms are centered on the use of technology to consumer media, the state of infrastructure in India at the time prevented international companies to place ads in the manner in which they were accustomed.

Advertising in India has been concentrated on the 2 key media: print and television, with India reflecting the same worldwide trends, with print on the decline and television on the ascendency, and advertising is targeted at the groups that can be reached through those media (Ciochetto, 2004). Thus, once India started to become more modernized, more companies could access the market through its media. Outdoor advertising was also another form of marketing that gained substantial market share for some types of products. Furthermore, the development of the advertising industry has had a large impact on the culture.

"These increases in advertising expenditure and the promotion of foreign products have impacts on culture, through the undermining of traditional habits and behaviours, the creation of new wants and desires, often for products like softdrinks that have no nutritional benefit, and also by strategies that rework cultural values and beliefs. The roles of men, women and children are changing, traditional places within home and family, concepts of beauty, identity and personal cleanliness are undergoing major change. The overall impact of massive increases of foreign company advertising is the acceleration of India into the culture and ideology of consumerism, the expansion of foreign businesses into India and the export of profits to foreign corporations." (Ciochetto, 2004)

Article Analysis

India is a diverse nation that is divided into twenty five states and seven territories (Maps of India, 2011). Among these various territories, there are sixteen major languages spoken while estimates of regional languages and local dialects exceed a thousand (Gomes, 2011). Because of the massive amount of diversity that can be found in India, it is often hard to make generalizations that can describe the countries primary trends accurately. For example, marketing took root in the country in different places under substantially different rates of integration. However, another source of standardization and globalization for India has come through education and India has focused its higher education segment on technology and engineering among other specializations. Thus, education can be a source of the integration of Western values and cultural items in modern India.