Celebrity Endorsements - The Dilemma

The previous blog on ‘Nano marketing by Tata Motors’ deals with the advertisements in the automobile industry. In this blog I would like to debate on Celebrity branding in any industry. What is celebrity branding? Is it really required? How to make it work?

Q . What is celebrity branding?

Advertising promotes a product, service or event to its target audience. A target audience is the portion of the general public that products, services or events were created for to fill a desire or need in the marketplace.¹

Commercial advertisers often seek to generate increased consumption of their products or services through branding, which involves the repetition of an image or product name in an effort to associate related qualities with the brand in the minds of consumers.

Celebrity branding is a type of branding, or advertising, in which a celebrity uses his or her status in society to promote a product, service or charity ².

Q . Is Celebrity Branding really required? Does it work?

Yes. I would like to quote Sriram Vadlamani’s statement in his blog : ‘Otherwise companies will not spend that much amount on the stars day in and day out. ³’

If companies are spending so much why do we even question about the worth of celebrity branding. The following are the vintage ads that I liked the most.

1. Doodh Doodh (Psr featured in facebook) – This ad actually got me to drink milk over soft drinks.

2. Hutch You and I – This ad created waves and hutch came into the Indian market with a bang.

3. Zoozoo – The best ads of 2008.

4. Nescafe (Psr featured in facebook) – I have atleast a glass of coffee a day

5. 7 up ads by fido dido – I liked the creativity in these ads.

An ad need not get you to buy the product for you may not even fall in their target market segment. But, given a choice you will recommend these brands over others. These are the ads that I would remember forever. None of my selected vintage ads have any celebrties in them. On other hand, there are many issues in getting the brand promoted by celebrities like celebrity brand mismatch, rumours, multiple endorsements and hefty pay checks.

Celebrity Brand Mismatch:

Tiger woods and Buick - The brand personalities of Buick and Tiger go together like oil and water. Buick is an older person’s car (Tiger is less than half the age of the average buyer.) Tiger is very young, very cool and at the top of his game. You imagine him driving a Bentley, a Mercedes or a Lexus ⁴.

Rumours:

Type ‘Shah Rukh Khan has Tata Sky’ in Google. Many sites show up saying Shah Rukh uses Tata Sky promoted by Aamir Khan rather than Dish TV. This might be a rumour but it shows that celebrities don’t even use the brands they endorse. An issue like the above one can spread in hours through viral marketing and news media and hurt the brand.

Multiple Endorsements:

Celebrities nowadays are endorsing too many brands. Amitabh Bachchan and Shah Rukh Khan endorse around 20 brands. Amitabh Bachchan endorses - Cadbury's chocolate ( Cadbury's Diary Milk), Dabur hajomola candies and dabur Chyavanaprash ( medicine), Reid & Taylor ( suitings), Emami boroplus ( cream), ICICI bank, Pepsi Cola, Doordarshan ( Television network), Nerolac Paints, Polio drops ( govt. ad),Maruti versa ( car), Parker pens. We find it difficult to what personality or what character does brand portray? Other than Reid & Taylor, Cadbury's and Parker pens- which show style and brand being vintage - other brands - a lot of them, its difficult to know what they associate. Even for an MBA student like me it becomes difficult to recollect all the brands endorsed by a celebrity.

Celebrities Hefty Prices:

Rs 6 crore for Saif and Kareena (Saifeena like Brangalina) for Airtel Hello tunes ⁵. Rs 25 crore for Abhishek and Aishwarya for soap commercial ⁶. The zoozoo ads on the other hand costs Rs 3 crore ⁷. The entire marketing for Nano costed Rs 2 crore.

The above issues and the hefty pay checks raise the question about the requirement of celebrities. Imagine you are a new entrant into a market and want people to become conscious about your brand or you are a player in an undifferentiated product. How will you make people aware of your brand in the quickest time possible? The two ways that I can think of are celebrity branding or innovative advertising (Viral marketing comes into play once consumers test your product and is less effective in undifferentiated products). Innovative advertising is much more risky than celebrity branding and it is not easy to be innovative. Celebrity mismatch has a less powerful effect than matched celebrity brand endorsement ⁸. So how do you ensure that the celebrity and brands match with eachother.

Q. How to match celebrity brand endorsement?

Celebrity brand endorsements works if:

1. The brand can be readily associated with the celebrity’s personality. For e.g. Sports players endorse Nike and Adidas. Sachin Tendulkar’s ‘Boost is the secret of my energy’ ad was one ad will actually let people in India to try out Boost.

2. Exclusivity of the celebrity. E.g. Rehman does only selected ads but the impact is huge. His presence and music direction for Airtel had much more worth than Shah Rukh Khan.

3. Longevity of the Celebrity. The longer the celebrity associates with the brand, the more credible is the belief that the celebrity too uses the brand. E.g. Sachin and MRF tyres.

4. Celebrity using the endorsed brand. This probably has the highest weightage. If the celebrity uses the brand he endorses it shows that he believes in what he had said in the advertisements.

I believe celebrity endorsements are required but should be properly matched with the brand. There should be exclusivity and the celebrities interest in the brand should be genuine and not just for the hefty pay checks. A celebrity promotes a brand and the brand inturn promotes the celebrity.

Bibliography

1. http://www.wisegeek.com/what-is-advertising.htm

2. http://en.wikipedia.org/wiki/Celebrity_branding

3. http://trak.in/tags/business/2009/05/03/do-celebrities-really-help-a-brand/

4. http://ries.typepad.com/ries_blog/2007/07/celebrity-endor.html

5. http://www.livemint.com/2009/02/05230309/8216Saifeena8217-the-Rs.html

6. http://movies.indiatimes.com/News-Gossip/News/Aishwarya-Abhishek-paid-25-crores/articleshow/5076092.cms

7. business.rediff.com/.../slide-show-1-welcome-to-the-world-of-zoozoos.htm

Other links.

8. http://elab.vanderbilt.edu/research/papers/Connecting%20with%20Celebrities%20-%20Celebrity%20Endorsement,%20Brand%20Meaning,%20and%20Self-Brand%20Connections%20%5BEscalas,%20Bettman%5D.pdf

9. http://ezinearticles.com/?Do-We-Need-Another-Celebrity-Fragrance?&id=2208581

10. http://www.scribd.com/doc/19233410/Celebrity-Endorsements

11. http://timesofindia.indiatimes.com/opinion/edit-page/Do-celebrity-endorsements-help-sell-products/articleshow/1507840.cms

12. http://www.merinews.com/article/famous-brands-benefit-from-celebrity-endorsement/183.shtml

13. http://advertising.about.com/

14. http://www.indianmba.com/Faculty_Column/FC706/fc706.html

Nano Marketing by Tata Motors

The Head of Car Product Group (Tata Motors), Mr. Nitin Seth spoke about the marketing strategies followed at Tata Motors for Nano during his presentation at SJMSOM, IIT Bombay. According to Nitin Seth, Tata Motors unlike other players never advertises using celebrities and it relies on trust of the people and quality of the product. Tata Nano, the most awaited product in the Indian market was endorsed with a meager budget of Rs 2 Crores. The profit margin for Nano is so less that marketing had to be done within strict budget lines. Yet, the campaign as we know proved to be highly successful. As, I could understand from the talk, the following are the strategies followed by Tata Motors marketing team:

1. Viral Marketing – The use of social networks for marketing a product has become a powerful tool. Among the social networking sites. Twitter is predominant. Tata Motors used the power of social networking to the maximum extent.
2. Retail Outlets – Tata is a conglomerate of 98 separate companies. The marketing team of Tata Motors had the Nano cars displayed at the West Side and Croma outlets leading to more vigilance and less cost.
3. Selling through SBI – Mr. Nitin Seth selected SBI over malls and other banks for the selling his Tata Nano. The reasoning behind this is malls are still seen as an upper middle class segment and Nano had a different target segment. Similar is the case with ICICI.
4. Front Page Ticker and RK Laxman – Tata Motors got the ‘News Digest’ to be renamed as ‘Nano Digest’ on the front page of Times and also got a ticker running on the front page for 10 days with a few lakhs cost. Even RK Laxman pictured Nano in his cartoons. This is a much cheaper means when compared to the Rs 50 Lakhs for a full front page ad in Times of India.
5. Nano Break – Radio stations readily agreed to the requests from Tata Motors and called their breaks Nano breaks.

The above strategies followed by Mr. Nitin Seth are indeed innovative. They created a lot of recognition for the brand. But, I believe beyond the five strategies the following has had a larger impact:

1. Cost of the car – Though Nano was never advertised as cheap car, it has been known as the Rs 1 Lakh car. The pricing of the car has played a major role in marketing the product.
2. Ratan Tata – People in India rely on Ratan Tata. The Tata’s are a part of the Indian history and share a unique bond with the people of India. Hence Ratan Tata’s word on no-compromise (quality shall be on par) car has had a huge impact.
3. Media Coverage – The relatively cheap price of Nano has attracted a large media affair. The singur incident only lead to increased vigilance for Nano. Added to this, the skepticism of lots of critics that Nano can never be launched at Rs 1 Lakh.

Mr. Nitin Seth criticized other players for using celebrities in their ads which according to him never works out. I partly agree with Mr. Nitin Seth that cars are luxurious products where impact is more on testing the product than the advertisements. We never buy a car because Shah Rukh Khan drove it. But, Shah Rukh Khan might drive half a million people to test the product. Celebrities are required to provide the initial push to the consumers. Secondly, viral networking and the internet are important tools but they hardly penetrate the Indian rural market which accounts for a greater proportion of the population. Tata Motors having the rich Indian history it has never really requires huge marketing budgets. Mr. Nitin Seth’s approach proved successful for Nano but his criticism for other automobile players is tactless. If I want to launch a car like Reva, I need brand ambassadors to take my message of the electric car through. Only then people will even consider testing the car. Indian consumer is becoming more knowledgeable and conscious with the products he purchases but I believe Celebrities (like Amitabh, Shah Rukh Khan, and Sachin) still play a role in dragging him towards the product.

Nano achieved in Rs 2 Crores what most other car players cannot achieve with a budget of Rs 10 Crores or more. But, it was not marketing that should take the entire credit. It is a combination of Tata as a historical brand, trust on Ratan Tata and Marketing.