Celebrity Endorsements – I

I came across this article through a friend the other day. It refers to a study that states that tiny psychological effects in advertisements can have potentially enormous impact on demand, more of an impact than price. That is, a letter offering short term financial loans receives more interest when there is a picture of a smiling lady on the corner even if the rate of interest is higher than those on letters sent out to some other customers without the picture. This result set me thinking on a slightly deviant track.

To what extent do celebrity endorsements influence potential customers? There are two different aspects to this that come to my mind immediately.

One is about using a product to fulfill an aspiration like

• A shampoo, expecting to have beautiful hair or soft hair or dandruff free hair (endorsed by film stars like Priyanka Chopra, Shilpa Shetty and Kareena Kapoor)
• A face cream or lotion, expecting to look Fair & Lovely
• A soap (for a long time, Lux has been endorsed by beautiful Bollywood actresses)

Here, the impact on the buying behavior is quite apparent and expected too.

The other aspect is more relevant to this post. This is when the product to be purchased is purely, or almost purely functional. For instance, if a person is looking at buying a financial product, say, a mutual fund or a life insurance policy, how much importance does he give to ‘who’ is endorsing the product?

Will I choose to take a housing loan from HDFC Bank as against SBI if, hypothetically speaking, Aamir Khan endorses it. Of course, the fact that someone as famed as Aamir chooses to bank with HDFC might be a tipping point. But, I would also rationally know that Aamir is not part of my sample set really when it comes to housing loans, as, he has perhaps never taken one. I might be able to relate to the advertisement much better if a tie and suit wearing, 25 year old consultant endorses it, for, that is what I am. I might aspire to be as rich as Aamir someday, but that is not the same kind of aspiration as aspiring to have beautiful hair like Shilpa Shetty and a flawless, pearl like complexion like Sonam Kapoor (L’Oreal). In the case of a housing loan, an Aamir Khan has no context with me.

There are real life examples to this kind of endorsement. Aviva Life Insurance signed Sachin Tendulkar as their brand ambassador in 2007. I vaguely remember seeing him in some advertisements, but these days, I do not even see advertisements on Aviva Life on TV, forget Sachin in the ads. However, a quick search on the Aviva website reveals that they have launched an Aviva Sachin Century plan, a unit linked savings cum protection plan. I do suspect that any Tom, Dick or Harry would have sufficed to endorse the Aviva Life advertisement as long as the message was sent across. A child plan endorsed by a normally salaried father who is looking at the benefit from real terms when the child turns 18, a protection plan by a bread winner who does not want his family to suffer lest something happens to him. Doesn’t that represent the target set more rightly when compared to larger than life heroes and crorepati cricket stars endorsing it?

However, an article here states that the trend is on towards celebrity endorsements for financial products. It is a matter of time before we learn how successful these advertisements will be in boosting the sale of the life insurance products and mutual funds they plan to publicize. Will they boost up the revenues of film stars and sports stars further or bring about a realisation of a different kind in the marketing departments of these companies?

Health and all that

MSWord throws up vigorous as a synonym for health. The fight between these two health drinks too has been vigorous, to say the least.   

The war has been on for a long time. Horlicks is a Glaxo brand that moved under the GSK umbrella which was formed out of Glaxo and Smithkline Beecham. Interestingly enough, Complan was brought to India by Glaxo and later taken over by Heinz Foods.   

In the past decade or so, there has been many a tiff between Horlicks and Complan. In 2004, there was a HC directive to Complan to telecast its advertisement after deleting the cup marked ‘H’. The advertisements showed a bigger cup and a smaller cup, marked ‘C’ and ‘H’ respectively.    

Horlicks was initially targeted at older people and used to be positioned as a ‘great family nourisher’. But, with increasing competition, it started introducing new flavors specifically targeting children. Thus began the fire. If Complan claimed that it made kids taller, Horlicks claimed to make kids taller, stronger and sharper.   

The latest from the Horlicks stable has been a comparative advertisement which blatantly shows the Complan packet and claims that Horlicks provides more value for lesser money (INR 128) while Complan provides less value at a far greater price (INR 174).   

Within a few days time, Complan has made a come back with both printed advertisements and TVCs comparing the two drinks, Complan and a blue colored bottle (Horlicks whose name was not shown). It concluded with the Complan Mom asking the ‘blue colored bottle’ Mom, “Do you want to give your kid a sub-standard drink just because it is cheap? Think about it.”   

Seeing the Horlicks advertisement, I was back to the age old question of legality of the advertisement in question. Talking to a few people, I did realize that, whatever be the legality, the point had been conveyed, the damage done. But, Complan has made quite a quick comeback. It has tried to turn its Achilles heel, the price, as rightly aimed at by Horlicks, to its favor. It has strived to reach out to the psyche of those consumers who feel that higher price translates into better quality and lower price inevitably means that the product would be of poor quality.   

I do not think this story is going to end any time soon. There will be more to see. It would be interesting to watch what more than comparative advertising will these two health drink giants come up with to capture significant share of the market. Or, as is the case with all free markets, will a new competitor eat into both their pies while expanding the market size too?