Friday, August 24, 2012

"What happens when a celebrity endorses too many brands?"

Author: S. Arun Kumar, Assistant Professor, SMOT School of Business, Chennai

Companies employ celebrities in order to increase the brand awareness, sales and to gain the trust of their customers. They act as brand ambassadors to propagate the good will of the brand to the masses. When their favorite stars endorse for a particular brand, the celebrity fans have a liking towards the brand or would like to associate with the brands for various reasons. This is the strategy followed by many companies globally since 1940s and the practice slowly gained popularity in India after 1980s. In recent years companies started using ‘Celebrity endorsement as a marketing strategy’ to push the products into the market and to pull the customers.

Money spent by the companies on Brand Ambassadors

The companies invest from some lacs to many crores on their brand ambassadors. The people in the list ranges from TV and film actors, models, sports stars, entertainers, pop stars, businessmen etc. Depending upon their distinctive identity; PR coverage; instant credibility and number of fans, the celebrities are quoted price deals for endorsing the brands. Dhoni was stuck by deal worth Rs.210 crores (2.1 billion) with Rhiti Sports Management. Amir Khan, Sharuk Khan, Abishek, Kareena Kapoor, Deepika Padukone, Ranbir, Priyanka Chopra are some of the preferred celebrities in Btown. Their price deals ranges from 5 crores to around 20 crore depending on the tenure. 

Personality Values vs. Brand Attributes

Finding the right celebrity is a challenge for the marketers while they choose the brand ambassadors. Though endorser has certain restrictions and agreement with the company, he or she can endorse any other brand which is not related to the same brand or its competitor’s brand. In such cases the celebrity endorses to multiple brands and over a period of time the brand equity also gets diluted due to poor brand recall. There are many brands that have failed in the market in spite of the brands being endorsed by well known celebrities. Examples are Maruti Versa which was endorsed by Amitabh Bachan was a failure product in the market. The same actor is being roped in for Force ONE and the product is struggling in the market to sell.

Examples :

Yamaha – John Abraham

Personality Values
Brand Attributes
For Youth
Passion For Bikes

Reebok- Bipasha Basu

Personality Values
Brand Attributes
For Fitness
Healthy Life
Perfect Body Shape
Figure Conscious
Sports Person
Sports Shoe

Sony Vaio- Kareena

Personality Values
Brand Attributes
Good Models / Colors
Slim Finish
Light Weight  
Light Weight
Zero Figure
Stylish and trendy
Good Designs
A celebrity endorsing too many brands

What happens a when a particular celebrity endorses for more than one brand? Customers lose trust in the brands as well as the celebrity. For instance, in 1980s Kapil Dev was endorsing brands like Boost and Palmolive shaving cream. Customers started gaining trust in those brands due to the valuable contributions made by the player for the Indian cricket team. The brand associations of the personality with the brand were more as Kapil Dev was endorsing to very few products matching his personality. But nowadays celebrities like MS Dhoni, Sachin, Deepika Padukone etc endorse themselves to more than 7-8 brands. Customers ultimately lose the brand connect and the brands lose their unique identity. MS Dhoni has endorsed to more than ten brands like Aircel, GE Money, Pepsi, Ashok Leyland, Orient Fans, Reebok, Siyarams, Cello etc. It increases the personal identity of the player MS Dhoni as a brand but not the product or the brand’s identity.
Is customer still the king or being fooled?

The companies are ready to pay in millions for their brand ambassadors to pull and attract customers. When the companies shell out huge money for ads and other campaigns, these costs are carried along with the price tag of the product. The burden again falls on the customer. Does the customer get any added benefit from the Shampoo if Katrina or someone is endorsing? The customer is fooled by showing convincing ad campaigns with celebrities and the millions spent on brand ambassadors are being imposed on the customer.

Friday, August 10, 2012

‘Going green’ not only COOLS the globe but also your pocket

Author: S. Arun Kumar, Assistant Professor, SMOT School of Business, Chennai

Global warming has become a serious threat to all the nations across the globe. Both developing and the developed nations have taken stern environment-friendly measures benefiting the people and the planet. Companies started focusing on the 3BL, (people, planet, profit) which is referred as triple bottom line.  Here are some of the suggestions, save money by going green.

Save your fuel costs on cars: 

Though diesel vehicle may seem to be cost effective, however on long term basis petrol, CNG and LPG cars incur less maintenance costs. 

Avoid giving rapid acceleration and sudden breaks : saves 10%

Switch of the engine when it needs to be idle for more than 1minute : saves 10%

Drive the vehicle between 65-70 Kmph : saves 10% 

In highways drive the vehicle between 100-110 Kmph : Increases 2 Kmpl

Press clutch pedal only when needed

Check air filter, oil filter, engine oil and tyre pressures regularly

Make your home green

A survey says that eco friendly homes save up to Rs.1,000 per month on an average. The money saved if invested can earn 15% per year which amounts to Rs.27.24 lac in 25 years

Using solar panels can cost 50k to 3 lac, but it can cut down your costs by Rs.12,000 – 15,000 on your electricity bills per annum

Using CFL can make you save Rs.30 for every 100 lighting hours

Use star rated products for electrical appliances

Implement rain water harvesting

Using cycle to nearby places

Home Gardening

Cultivate organic farming in the limited space available

Start your own kitchen garden 

Plant saplings on good occasions (birthday, wedding anniversary)

Usage of technology

Use online transactions to pay your bills

Avoid the usage of paper to the maximum extent

Use the apps in your mobile effectively 

Reduce, Recycle, Re-use the office waste

Avoid using plastics

Carry jute bags from your home for purchasing your daily grocery

Educate your friends, family and relatives to reduce plastic usage

Strictly avoid dumping of plastics and e-wastes on empty lands