Wednesday, April 10, 2013

Celebrity Endorsements: Poster Boys & Divas Of Real Estate

Celebrity endorsement, as a marketing strategy, has gone viral amongst Indian real estate companies today. From master blaster Sachin Tendulkar to Bollywood diva Sonam Kapoor – celebrities can be seen endorsing a whole lot of real estate entities and their projects. But does it really work to the point of boosting sales? 

What is so common among cricketing icons like Sachin Tendulkar, M S Dhoni, Yuvraj Singh, and Bollywood beauties like Deepika Padukone, Sonam Kapoor, Kajol and their male counterparts like Akshay Kumar, Ajay Devgan, Mohanlal and Mammootty? 
Well, these — and many more — celebrities from sports, Bollywood and glamour world are today the poster boys and divas of different realty firms, which are keen to encash upon their pan-Indian appeal and familiarity. From selling fast moving consumer goods to dream homes, the concept of brand ambassadors has become a rage in the country. It has emerged as a lowest common denominator item in advertising, to act as a kind of warrantor as well as differentiator in an uncertain and ‘me-too’ market. 

So much so that real estate companies are roping in brand ambassadors to improve their brand connect, even if celebrities have no brand fit. For, the immediate objective of these developers is celeb-linked awareness building. They feel the endorsement news reaches the customers at a much faster pace than any other communication modes and creates an instant impact. 

While film actress Sushmita Sen happens to be the brand icon of Assotech Ltd, it is Mahendra Singh Dhoni in the case of Amrapali Group. Former actress Twinkle Khanna aka Tina, has joined the Supertech bandwagon to endorse their ORB project — a circular shaped 40-storeyed luxury homes development at Sector 74, Noida. After quitting her film career more than a decade ago, Twinkle has taken upon herself the design of this 50-acre property. 

The reigning diva of Hindi film industry, Kangna Ranaut, has been roped in by Ajnara India to endorse its projects and in the case of Prateek Group, not one but two celebs are enhancing its brand image — Rajeev Khandelwal and Prachi Desai. Another real estate entity, Krrish Group has roped in dusky damsel Bipasha Basu to endorse its recently launched first project — Provence Estate in Gurgaon with apartments of an average area of 5,800 sq ft. 

Some developers have chosen to pick regional celebrities for adding zing to their advertisement campaigns. Of late, two Kolkata-based real estate companies have roped in Bong celebrities — Konkona Sen Sharma in the case of the Eden Group projects and celebrated musician Bickram Ghosh and his actor wife Jaya Seal for Paharpur Pragnya Realty to endorse its upcoming project in Barrackpore. Significantly, the Ghosh couple happens to have also invested in a property in the company’s first project, Genxx Valley in Behala, located on the southern fringes of Kolkata. Well, the list of popular icons endorsing real estate companies is long-drawn, with newer faces being added to it, frequently.

Brand Versus Icon 
It seems to have become difficult to market a real estate project without the endorsement of celebrities these days. With property prices touching the roof, real estate developers are pulling out all stops to lure customers. However, is selling a property costing `1 crore, as easy as selling a beauty product costing `50? Aren’t the basic parameters of transparency, credibility and honest delivery getting undermined in this process? 

Says Ambi M G Parameswaran, executive director & CEO, Draftfcb+Ulka, “Real estate companies are trying the last trick in the book. In a parity market with a lot of clutter, a well-known celebrity can, of course, help a brand get recall and recognition. FMCG brands have been resorting to this trickery for many years. The big difference is the fact that FMCG products are, by and large, low involvement purchases. Apartments, on the other hand, are very high involvement purchases, so using celebrities for selling homes is at best a risky exercise.” 

India being a celebrity-obsessed nation, celebrities can work in the realty sector just like in any other space. The main reason for more realty players to opt for celebrities is the expected rise in real estate prices. While an educated or savvy buyer may not be influenced by such exercises, but even in that circle, a buyer inclined towards films or sports wouldn’t mind getting swayed away by the star power. 

Anil Kumar Sharma, CMD, Amrapali Group disagrees that that real estate firms bank more on celebrity endorsement than the important parameters of good quality, value for money and timely delivery. “I strongly believe that brand ambassador and company’s goodwill are intertwined. As Dhoni has to keep performing well as the captain of Indian cricket team, in the same way, we have to keep alive our customers’ trust by providing them properties in a given time-frame, fulfilling all parameters,” says Sharma. 

So, do consumers really get influenced by the presence of brand ambassadors, while finalising their property purchase decision? “Frankly, we won’t buy a flat simply by seeing a celebrity as its ambassador. Of course, homes are a lifetime investment and there are many other factors that one has to look into before investing one’s hard earned money. We would want to invest with a credible developer who has a clean balance sheet and track-record. We adore Sachin Tendulkar, but that doesn’t mean that we will blindly buy a home endorsed by him,” say Hanoosh Kodakkat and Fariha H, an NRI couple living in UAE. 

Likewise, Realty Plus quizzed over 50 customers looking to invest in real estate across India. Majority of them said that it would make little impact if a project is endorsed by a celebrity or not. They said that real estate is purely a different ball game and it is not advisable to invest lakhs or crores of rupees, simply charmed by brand ambassadors, when it is a known fact that they are paid for their job. 

Disregarding Brand Fit 
At another level, more often than not, the celebrity is remembered, while the brand is forgotten. “One must find out whether the brand positioning fits the usage of a celebrity or is it a forced affair? Sometimes, the credibility factor also is diminished by using an incongruous star. If the project has many USPs and salient features, spend the budget to communicate these features rather than wasting it on paying some star,” says Kunal Banerji, president marketing at M3M. 

But, celebrity endorsement has started to fit in, as far as real estate industry is concerned, claims RK Arora, CMD, Supertech Ltd. “In my view, such endorsements help you gain the required attention of customers in the face of cut-throat competition, but still, the desired credibility comes from quality construction, good value for money and timely delivery of the project. We were more than satisfied with the response we received for ORB, which was endorsed by Twinkle Khanna.” Ananta Singh Raghuvanshi, director, DLF Homes strikes a balanced view, saying, “Irrespective of the industry, the power of celebrities in influencing the consumer’s purchase decision cannot be underestimated. It is an accepted fact that celebrity endorsement can bestow special attributes upon a product. However, if a celebrity can enhance the merits of a brand, in changing times, a reverse has been seen too. Moreover, the aspirational PR coverage and instant brand recall can invest a developer with a temporary credibility only.” 

A Selling Proposition? 
It is a moot question whether in today’s real estate market, cluttered with celebrity brand ambassadors, the buzz created by them ultimately helps clear up piling inventories and boosting sales. 

Says Prashant Tiwari, MD, Prateek Group, “The so-called marketing mania works only for a new company which is little, or not at all, recognised. For creating a buzz about themselves or any new project which they might be planning to launch, these kinds of players suddenly hire the services of a brand ambassador. But the growth in sales can never be achieved by simply hiring famous faces.” 

Agrees Pranav Ansal, chairman, Ansal API, “Roping in a celeb can help a company to grab the initial attention but ultimately it’s the 4P’s (price, product, place, positioning) that help to boost property sales. When a buyer makes a decision to invest in a project — quality, price and delivery top his list and if the product doesn’t meet these yardsticks, no amount of celeb value can influence the buyer’s decision.” 

Good Strategy For Expansion 
Once a nascent concept, celebrity endorsement has today become the trendsetter in the country’s real estate market. In Delhi-NCR alone, there are over 20 firms which rely upon celebrities to market their properties. While the trend is quite prevalent in Western and Northern parts of the country, Southern and Eastern regions have just a few celebrity-endorsed real estate firms and projects. 

These variations apart, big real estate players have deep pockets and a face with pan-India appeal may help them when they expand their footprints. 

Says Honey Katiyal, CEO, Investors Clinic, “Delhi–NCR based real estate developers are enrolling celebrities as their brand ambassadors for encashing their national status. With the expansion of real estate sector, the customer base has grown manifold, which has underlined the need to reach out to customers in a way that they become confident enough to buy houses, which normally cost a lifetime’s savings.” Katiyal’s company has ace cricketer Yuvraj Singh, now also an epitome of a courageous battle against disease, as its brand ambassador. 

Pune-based company Amit Housing has recently signed master blaster Sachin Tendulkar as brand ambassador in a high-ticket deal, reportedly running into several crores. Does the company — with projects mostly in Pune or surrounding areas — really need Sachin’s iconic stature to sell projects regionally? 

Reasons out Katiyal, “Celebrities choose the brand they promote very carefully. They bring in their rapport and goodwill to the company and help in giving initial boost to its services/products. Beyond that, however, what matters is the strength and performance of the company.” 

Affordable Versus Luxury Segment 
Though high net worth individuals (HNIs) love to flaunt the luxury status of their homes, buying a home is an important investment that a middle-class family makes, which hinges upon value for money, appreciation potential and location of the property. While the concept of brand ambassadors does enjoy a degree of traction in ultra-luxury residential projects, there has been a “lack of success” when it comes to promoting mid-income housing projects through brand ambassadors in regional markets. 

In southern India, where there is a greater fan following for film stars than other regions, there are just a few companies which have roped in a celebrity to sell their projects. 

Bengaluru-based Oceanus Group has Mollywood star Mohanlal to endorse its projects. The company, which has several projects in Kerala, recently offered special discounts to celebrate the star’s birthday. Another Mollywood star Mammootty endorses Kochi-based real estate firm Pearl Infra, while cricketer S Sreesanth is the face of Mather Projects. 

Avers Dr JMA Bruno-Mascarenhas, author of medical books, based in Chennai, “Here, I don’t think the trend is so prevalent. If I see a celebrity endorsing a project I would think that it will be overpriced because of the endorsement and may not further consider it. In South, people are more concerned about the basic parameters of realty development.” 

Says Jim Phillip, assistant regional manager, ICICI Prudential Insurance, Kochi, looking to invest in residential real estate in the city, “Celebrity endorsement would definitely enhance the brand recall of a project. But when it comes to buying it, celebrity factor will have little influence over buyers like me.” 

In the Eastern region of the country too, the market is extremely conservative where purchases are made by common sense, irrespective of brand ambassadors. 

Glamour’s Grey Spots 
Recently, well-known singer Yesudas was in a soup for allegedly promoting a Kochi-based real estate company called ‘Apple A Day Properties’ whose promoters are presently evading the arm of law after misappropriating investors’ money. 

This is one of the grey areas of celebrity endorsement: fraudulent advertisements endorsed by celebrities. Shouldn’t the so-called brand ambassadors be held liable for issues like cheating in real estate or financial products? 

This is what Bollywood actress Genelia D’Souza had to face when she was recently summoned by the Andhra Pradesh High Court to explain her role as brand ambassador in the controversial real estate project called ‘Anjaniputra.’ 

The episode points to the vexatious issue of dealing with cases of cheating involving a real estate project endorsed by a brand ambassador. While there are no easy answers to these questions, consumers must tread a cautious path while firming up their property purchase decisions. 

Passing On The Cost? 
While the celebs are fuelling a new trend in the realty space, their endorsements — be it at project level or company level — won’t come for cheap. Is the huge endorsement fee again a burden on the customer’s pocket? What will a customer get, if the project has or not been endorsed by a celebrity? Of course, only a home to live! 

“Be it realty or any other segment, the fees charged by brand icons generally do not vary much. The cost depends on the type of celeb a company chooses. An SRK, Amitabh or Dhoni will cost more than someone like Neil Nitin Mukesh or Kailash Kher. One may get a reasonable rate from brand ambassadors for good, recognised national brands as compared to brands that aren’t very popular where the celeb may charge a premium,” says Das Blah, managing director, KWAN Entertainment. At times, says he, compensations are made in terms of property packages. “If an icon that has charged `5 crore, is offered a property worth `2 crore, I don’t think he will decline, given the ever-rising real estate prices.” 

Interestingly, few listed companies are keen about doing promotional activities using celebrities. 

Behind The Veil 

While having celebrities to endorse a product might lead to an increase in property costs, another debatable issue pertains to the use of real estate endorsements by celebrities as a channel to route and park their unaccounted wealth. 

“Today, many real estate companies are associated with people who have black money and other benami operations. Unlike Swiss Banks these days, properties are the best place to park your unaccounted wealth away from the glare of income tax sleuths. Yes, when a celebrity is roped in, there is obviously a brand connect but more than it, there are other hidden aspects to the deal as well,” explains a Delhi-based police official, who did not wish to be named. But, none of the developers we interviewed shared any financial details regarding their particular deal with their celebrity icon. 

Anil Kumar Sharma of the Amrapali Group strongly denies the possibility of any behind-the-scenes transactions. “It’s an irrelevant question, there is nothing dubious involved in any of our deals with a celebrity. We spend money on marketing where these costs are included. The price of property remains the same and there are less chances of price appreciation because of brand ambassador.” “The ambassadors are chosen at the company level to boost its brand equity rather than selling just one project. It is done because a brand has to be associated with the overall vision of the company, which is always kept in mind in all the projects,” observes Katiyal, declining to share his company’s deal size with Yuvraj Singh. 

Rakesh Mahajan, director, Nirala Developers, voices a similar view, “We are using our brand ambassador at the corporate level as we want to register ourselves in the mind of consumer as a brand rather than promoting a single project. Brand endorsement at the company level works better because once you have registered your brand then it becomes comparatively easier to promote respective projects.” 

Explains Prashant Tiwari of Prateek, “Whenever we hire a celebrity we only pay them their fees. We don’t offer them any stake in our project. In our company, the fund for celebrity endorsement is a part of the budget which we allocate for media promotions and advertisements. This spend is 1-2 per cent of our turnover.” 

Rounding Off 
As for the overall efficacy of celebrity endorsement as a marketing strategy, no amount of it can help resolve a credibility issue like a negative image on delivery, quality and consistency of a real estate offering. The developer community has to steadfastly follow the basic rule of transparency, credibility and honest delivery as branding helps only when these parameters are ensured. In the ultimate analysis, a real estate entity’s brand name plays the most significant role, besides other aspects. The consumers have come of age and no amount of celebrity endorsement can woo them if the product lacks substance. 
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