Tag Archives: Shahrukh Khan

Expensive celebrity endorsements & inflation

Q1. Have you ever bought something just because your favourite celebrity was endorsing it?
Q2. Have you *not* bought something that *you wanted*, because a celebrity you disliked, was endorsing it?

If you said a “YES” for any of the questions above, you can go back to what you were doing before coming to this article; sorry – but this blog further, is not for you!

Celebrities charging a few lakhs for endorsement deals are passé; multi-crore deals are routine.

Aamir Khan’s in the news, ofcourse. Other than the success of 3idiots, he’s supposedly basking in the glory of making Rs.30-35 crores, being an “idiot”… A *damn* smart “idiot” though! 😉 Obviously, the success of 3idiots should’ve dug a deeper hole in UAE’s Etisalat’s pockets. Aamir is already endorsing a few others, like TataSky, Toyota Innova, CocaCola & Parle G. So more than movies, he’s obviously minting better with the ad deals. Now, why would he want to do more than 1 movie in an year? Eh?! 😉 He needs the time to do ads!

(contd. below)


Luxury chocolate gifts from Hotel Chocolat

Recently, we heard Shahrukh sign-up a new deal with DishTV for Rs.10 crores. We also heard Shahrukh Khan (SRK) received Rs.5 crores for a 10 minute (flying) visit to a marriage reception somewhere in Haryana. (No brand endorsement there, but he did “endorse the marriage”, mind it!)… So, didn’t DishTV get him real cheap? Eh?! SRK could’ve made that much in 2 marriages, or by even staying for 20 minutes in just one marriage instead!) 😉

Do you remember that most trade analysts had estimated the “brand value” of Amitabh, Abhishek & Aishwarya, after the Abhi-Ash marriage, to be around Rs.800 crores?! Unfortunately, I don’t suppose any of the “3bachchans” are milking their true “brand values” though, except maybe for the recent Lux ad series where, we heard, they were paid Rs.16 crores in all (package-deal).

There would be tons of such “crore-lories”! (FYI: lorie in hindi = lullaby)
Note: We’re not talking about broken multi-million dollar deals… The Woody Goody Tiger?! 😉

So, why do brands signup celebrities?

– To help the brand to gain (instant?) recognition (piggyback’ing on the celebrity’s following)
– To (supposedly) inherit the celebrity’s trust amongst the people (fans/followers & others too)
– To ensure easy, quick & sustained brand recall (Who said: “Go get it!” – and for which brand? Got it? :P)

Then?

– The brand gets the identification & recognition, it’d strived for (Unless, that celebrity is embroiled in a controversy or a scandal, a-la Woods!)
– The brand’s sales shoot-up (Everybody wants it? Huge demand, supply supply supply!)

After the initial promotional period, the product’s demand would shortly stabilise (typically reduce, but stablise… So supply stabilises too.). Of course, this assumes the product was good indeed.

Economics…

Now, most important, how would the brand’s company make back the money it paid the celebrity? (Aah elementary Dr.Watson, and did you think they actually liked the celebrity?)

Options (Choose one or more):

– The cost of the product is hiked (Ouch!)
– The cost of the product remains the same, but the quality is deteriorated a little, to save manufacturing costs
– The cost of the product remains the same, but the quantity in the packaging is reduced (Chhota pack?)

(Similarly applies to subscriptions & services too)

By opting for any 1 or more of the listed (and/or unlisted) options from above, the company would stealthily inflate the cost of the product to the consumer. (Sab ganda hai par dhanda hai yeh!)

And in turn, it is finally us – the consumers – who end up footing the endorsing celebrity’s bills! And we don’t stop there, we continue to pay it everytime we buy/subscribe to the endorsed product.

Typically about 30-60% of the marketing budget of companies is allocated for celebrity endorsements. So – if the companies could come up with some better method to gain recognition, build trust & cultivate brand recall in their consumers – the cost of the products could be reduced by atleast 30%.

So the next time you drink a CocaCola® Coke with a Parle® G biscuit in hand, after coming back from your office in your Toyota® Innova and switch on your TataSky® SetTopBox to pay & watch 3idiots – remember you’ve been made one too!