I hate dishes made of brinjal... or for that matter bitter gourd... or lady’s finger! But it’s really funny that every second day, when I start for office, I always end up getting either of these brilliant dishes for lunch – and subsequently for dinner too. This is despite the fact that I most patiently “advice” our intemperate ‘trade union’ cook, who’s been with us for years, about what food I prefer! So when recently my patience gave way, I decided to inform Mr. Cook once and for all that I was a kid no more and that he should realise he’s preparing food for the group editor of a leading magazine house! “You’re no celebrity that I should cook special meals,” he replied disdainfully without sparing me a glance, “and even if you were, do I get paid more?”
...Ouch!!! Though I slinked away at that moment, the question was pertinent. Does an association with celebrities really add to a company’s worth? Would an association with, say, the world’s best golfer Tiger Woods (associated with TAG Heuer, Accenture, Nike, American Express, Gatorade, GM...) increase shareholders’ value of the respective firms? Would Shahrukh ‘endorsing’ movies to products to – as we mention in our flap cover story – IPL increase their reach? “Definitely not,” said a marketing ‘expert’ I met at one of the conferences recently. “It’s not the celebrity, but the product’s realistic worth and value that ensure a company’s profitability!” My research team finally got my intellectual ship sailing; and here was what they gave me!
Professors Robert Clark (HEC Montreal) and Ignatius Hortsmann (University of Toronto), in their academic paper titled Celebrity Endorsements provided experimental evidence that definitely “celebrities enhance product recall... They enhance consumer perception of product value... Consumers value more highly a product endorsed by a celebrity than one without a celebrity endorsement.” Another world-class and path breaking statistical paper from the Marketing Science Institute by Amit Joshi and Dominique Hanssens (Advertising Spending and Marketing Capitalization), after analysing data collected over a decade for five PC manufacturers – Apple, Compaq, Dell, HP, and IBM – proved quantitatively and conclusively that when celebrities endorsed brands by appearing in its advertising or even by visiting retail locations and special events, shareholders and prospective investors immediately ensured the firm’s future earnings potential appreciated. Even ‘fast food’ brands like McDonald’s had their “market-adjusted values” increase phenomenally simply because of endorsements from celebrities like Michael Jordan! After analysing 110 high-profile celebrity endorsements, Professors Kamakura (University of Pittsburg) and Agrawal (California State University) concluded in their paper (The Economic Worth of Celebrity Endorsers) that while a growing number of firms are investing in celebrity endorsements to enhance the value of advertising dollars and build brand equity, the average impact of these announcements on stock returns is definitively positive. In summary, that celebrity endorsement contracts are viewed as “worthwhile investments in advertising.” Proving the same were Miciak & Stanlin who, through their benchmark work, showed that having a celebrity on board positively affects stock returns. They quote, “Celebrity endorsements work so well that (now, globally) about 20% of all TV commercials feature a celebrity.”
The writing on the CEO manual is clear: If you had money to invest and had a choice between giving the best of the best quality to the consumer, versus providing normally good quality that is endorsed by a celebrity – categorically go for the latter! Most coincidentally, last fortnight, while I was on a sponsored tour of India’s costliest and most sought after tourist train, the Palace on Wheels, many American and European tourists on the train told me (wide-eyed) that I decidedly resemble, hold your breath, Tiger Woods! After initial disbelief, and after repeated confirmations, I became almost blindingly confident that perhaps I do look like the Tiger! Not wasting a minute when I returned home after the trip, I caught hold of my supercilious swaggering cook and this time ranted off remorselessly about the fact that people now even considered me a celebrity, Tiger Woods! For the first time, I saw semblance of a little respect in his eyes. Not that it mattered, but I knew I had hit it where it mattered the most! I now could at least demand a trite better meal than what I was getting. And better it did get! The next day, instead of just one dish that I generally used to get, I got three – brinjal, bitter gourd and lady’s finger!!! I finally got the equation right – When Tiger Woods wants food, he orders from outside!