Delhi needs celebrity endorsements

Delhi needs celebrity endorsements

Author | exchange4media News Service | Monday, Feb 02,2004 6:22 AM

Delhi needs celebrity endorsements

Take 1— “My husband wears branded shirts, I don’t remember the name right now.” Take 2— “My son wears jeans, yes, they are branded, I think they are called FLU?” Take 3—“My children wear branded t-shirts, the foreign ones, you know.” You would be justified in thinking that the above responses belong to some town near Muzzafarnagar, well, you’d be way off, because these responses come from Delhi, West Delhi to be precise, where one of the companies I consult with was conducting research on apparel brands, where 42 per cent of the population is SEC A/B, where you’d expect a minimum level of awareness about brands. After all, 78 per cent of households in that area have television sets.

Instead, we found that while most of these households aspired to use brands, both for apparel as well as for durables, most in that part of Delhi were not able to recall any brand names, nor were they able to come up with any pointers such as the logo shape, the advertisement, or show any association with the brand name. This was surprising given the kind of advertising support given to promoting apparel brands through TV and print in cities like Delhi. This lack of awareness possibly had to do with lack of purchasing power, but then some kind of store-bought clothes were being purchased and while this itself marked a drastic shift from getting them stitched from the tailor, the buck stopped there.

As a matter of fact, our findings seem to tie in with what Sudershan Banerjee found when conducting research in the urban markets for his tobacco-free bidi brand Vardaan. For example, the managing director and CEO of Dalmia Consumer Care found that thirtytwo per cent of all bidis sold in India are consumed in the six key metros (four plus Hyderabad and Bangalore). Statistics also show that nearly 28 per cent of Lal Dant Manjan’s sales take place in urban markets (and we are talking about a tooth powder here!) One conclusion we come to, when evaluating the above, is that a large part of urban India thinks rural, which was Mr Banerjee’s point.

Further, analysis by Indicus Analytics of CSO data provides some more food for thought. In the case of West Delhi, 2.5 lakh households of the 4.5 lakh households are SEC C, D and E. In fact, for Delhi as a whole this category comprises 15 lakh households or 58 per cent of Delhi’s total population. If this is the market reality of Delhi, imagine the situation in other parts of India, Uttar Pradesh for example. So, what is a marketer to do? Well, it makes one wonder that perhaps the only way of registering a brand is, possibly through celebrity endorsements. Then perhaps all the cricketers endorsing consumer durables makes sense, because it is the best way of de-mystifying a brand, by bringing it down to the lowest common denominator, and there is none lower than cricket! Then perhaps the sudden rash of Amitabh Bachchan endorser ads (Nerolac Paints and NDTV for one) makes sense. Real data seems to show this anyway. For example, Dabur Chyawanprash is a brand that is being endorsed by the Big B, and from an Agencyfaq report, by all accounts this has revived the category and the brand. According to ORG Marg retail data on Agencyfaqs, the chyawanprash category which was showing negative growth till October 2003 has recorded a growth of 3.8 per cent in November 2003 compared with a -18.7 per cent recorded in October 2003. Specifically, Dabur Chyawanprash has gained in market share, which is up from 62.4 per cent to 66.8 per cent. Himalaya too has gained in the category, possibly at the expense of some other brands like Zandu and Baidyanath. It remains to be seen whether the growth is sustained, simply because consumption of this product goes up during winter anyway. The issue still remains as to whether all the money is worth it.

When you look at a rough cut math of this, lets assume Amitabh cost Dabur Rs 1 crore. And we know that a 1 kg bottle of chyawanprash costs Rs 169, with a 12 per cent margin to the retailer (my Gopalee chemist in South Extension market says he buys the bottle for Rs 148) and an assumed margin of three-five per cent for the distributor (he would buy the bottle from Dabur for Rs 140), means that Dabur would possibly make Rs 17-20 on the product after all overheads are deducted. This means Dabur needs to sell at least 5 lakh bottles of the stuff to just break-even on the cost of that endorser.

A very interesting point that Gopaljee brought up as I was discussing the margins with him, and that seems to support my point above, is that Dabur has cut down retailer margins for chyawanprash from 20 per cent to 12 per cent ever since Big B started endorsing the brand over the last three months or so. The fact that it has brought down his margins by Rs 12 from a purchase price of Rs 136 to Rs 148 has got him cut up enough to propose I buy Shivananda’s chyawanprash because they have three products—for kids, mid-age and aged people and you know how can kids be given the same product as adults, after all their digestion is different, their needs are different!

In the case of the Versa that Maruti Udyog got the Bachchan father-son duo to endorse for some huge sum, for instance, the expenditure was clearly a huge waste since the product bombed. Essentially, with government policy ensuring diesel costs 35 per cent less than petrol does, (globally, the prices are more or less the same), it made a lot more economic sense for transporters to use diesel SUVs (that offered more mileage per litre of fuel) instead of the Versa.

So, while poor awareness of brands does make a strong case for celebrity endorsements, it’s important to look at detailed cost-benefit numbers as well.

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