Celebrity Endorsements

Today, while reading Warren Buffett's letters to his shareholders, the first thing that struck my mind was the characteristics of a celebrity endorser.

Read the letters @ http://www.berkshirehathaway.com/letters/2009ltr.pdf

Who would be a better endorser than the CEO of the company himself. He is the most credible person in the company. He has highest knowledge about the company's products and knows the needs that those products fulfill.

Now this brings us to the question, that if such a celebrity is already present than why do companies go for actors and players.

Well, there can be many reasons, but the two most important reasons I can think of are:

Product characteristics and Awareness in general public.

By product characteristic I mean that, if you want Celebrity for a sport shoe ad, it will definitely be a sport person and not a fat CEO. Similarly for a beauty product it would be a good looking model and not a person with big, fat glasses.

Another important point here is awareness in public, this is important because we believe only them whom we know. If we don't know someone how can we believe him, what will be the basis of credibility.

But, the second problem can be solved; by giving more and better exposure to the CEO a company's PR department can have a potent tool. This can be done in many ways, depending on the business again and this will increase the credibility of business as a whole which might positively effect the perception towards products.

Its not a completely new idea. Many CEOs are doing it, unknowingly though.

For eg. can't a person say that Kingfisher's products will fall in premium category just by knowing about Vijay Mallya or Virgin's products will attract the younger audiences by knowing about Richard Branson. Or can't people just invest in the stocks Warren Buffet invests in, they can and they do.

But still there are only very few examples, the reason being, CEOs are infamous for filling their pockets and leaving shareholders and customers empty handed.

This is perfectly described in the famous joke :

there were 3 CEOs in a plane. To test them, they were told that the engine in this plane was made by their company. 2 of them immediately got down out of fear, but one didn't. When he was appreciated about his confidence in his company's products, he said: Well, yes I have full confidence in my company's products, I knew if it was from my company, it would never have started.

So, if companies are able to develop trust in public for their CEOs, they can be an effective and efficient tool to not only attract customers but also shareholders.

Marketing research as a tool for promotion and selling

When my friend told me to join his group for promoting his event I was very happy. There was somebody who thought that I can help him, I can make a difference.

First, let me tell you what the problem was. My friend is organizing a Video- game competition in our college and though there are many people who love playing games the registration for the contests were very less and the reasons were unknown.

When I thought about this I was really confused as I could understand only one reason for people not registering, the lack personalized approach. Now what is that; well that means that they were not contacting any one, they had their posters, e- mails and a small counter in the mess, which led to the big mess that they were in.

So, I had only one conclusion in mind, they needed a personalized approach but were there any other problems or not, I had no idea.

And this is when the idea clicked; a survey for promotion and selling.

The initial idea was of a survey to identify what types of games people wanted and the reasons why people were not interested. There were 2 possible approaches i.e. online research i.e. online form and Personalized research. The latter seemed costly and more time consuming initially but gradually the advantages were clear.

Personalized research gave the advantage of contacting more people and getting their attention while in online research there was a chance that many wont even look at the content of mail.

Hence a personalized approach was necessary. Also this approach would help in generating curiosity in mind of respondent. Now this can be understood by need for closure.

According to the theory of consumer behavior every person has a need for closure i.e. they want to see the ending. Do you remember when u started a book and you wanted to know what happens in the end of story or climax of a movie. Similarly we all have the need for closure.

So, when someone knows about an event that is going to happen they would like to know more about it. when they know more about it they will talk more about it and this gives you a good word of mouth. Which might help in getting more registrations.

A good way to generate a positive word-of-mouth.

And I always thought the sole reason that products with a prior research done, perform well coz they know what people want.

May be the reason is just that people want to know what the product is all about.