he Ifs & Buts of Celebrity Endorsements Apr 29,2013 email print pdf inShare20 CommentsGlobally, ‘celebrity endorsement’ is a very powerful marketing tool, employed by firms to build their brand equity. In India, the Lux soap is known to have been endorsed way back in 1941 b y the then famous film actress Leela chitnis. The introduction of celebrity endorsement in Indian TV advertising is marked by the commercials of 80’s featuring Kapil Dev, Sunil Gavaskar and Tabassum endorsing various consumer products. So, the potential of this concept has been well acknowledged, and tried and tested on the Indian soil for over 70 years now. Why Endorse? The compelling reasons for companies to yield a strategic position to celebrity endorsement in their marketing schemes vary. Very frequently celebrities are roped in during new brand introductions. The basic idea remains to cash on the popularity, credibility and mass appeal of the celebrities which is expected to help raise awareness of the brand, generate positive associations for it, and build purchase intention among its prospective customers. Sometimes, it’s merely a reactionary step meant to nullify the impact of celebrity endorsement exercised by a competitor. The last decade also witnessed a novel application of celebrity endorsements for crisis management, manifested brilliantly in the Cadbury case to weather the ‘worm’ storm.What are Frequently Endorsed? Among the industries that have generously employed this marketing tool, and have reaped healthy dividends are those representing FMCG, consumer durables, automobile, construction, healthcare and gems and jewellery among others . Top 10 Categories in Celebrity Endorsements on TV during Jan-Dec 2010 Rank Top Categories1 Shampoos 2 Toilet Soaps
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celebrity needs to be accentuated. In the minds of consumers, this kind of product is
usually placed as an aspirational one and the focus is more on emotional appeal. But
when there is a repeat purchase or low involvement product, the functional benefits
tend to be highlighted more. Hence, to add to the believability factor, the celebs areusually made to resemble a common citizen representing shared points of pain and
happiness.
Rocketing Endorsement Fees
Financially, celebrity endorsement is a costly proposition for most companies. With
contract fees crossing Rs 1 crore for top celebrities in India, due diligence needs to be
carried out to closely estimate the expected returns on investment (ROI). It is thus
better advised to take professional help before a company takes a call on celebrity
endorsements.
How are Celebrities Valued?
In the US, the brand value of a celebrity is indicated by some popular indices
like Q score (a function of favourite and familiarity) and Davie-Brown Index
(DBI) (a function of appeal, influence and trust.).
In addition, a number of renowned publishing houses like TIME, Forbes and
Businessweek also come up with their Power & Influence lists every year. In
India, several publications like Filmfare and India Today release similar lists
valuing celebrities on expertise, likability and trustworthiness factors. After
valuation, most of the endorsement deals are carried out through celebrity
agents and expert ad agencies.
Top Celebrities Expertise Endorsement Fee Aamir Khan Actor Rs 3♦5 crore