In the light of recent events with celebrities receiving flak for their choice of endorsements, 99acres.com analyses the influence and impact of celebrity endorsements in the real estate market.
Celebrity endorsements are a big draw not only in the real estate market, but for any brand building exercise wherein the company is wanting to strengthen its market position. Celebrities add an element of glamour and act as potent marketing tools for brands. Such celebrity tie-ups are usually seen with developers having a national presence, wanting to capitalise on the consumers’ attachment to or interest in particular celebrities. Celebrity endorsements also help to create goodwill for the brand by being associated with a trustworthy and popular figure.
According to industry experts, celebrity endorsements have a great influence over home buyers and investors. The faces of celebrities have a large-scale recognition and make home buyers feel familiar with any product their favourite celebrity is associated with. “This is especially the case with India, where we practically live and breathe Bollywood and cricket,” comments Pawan Jasuja, Director, Finlace Consulting Pvt Ltd. So, if home buyers find a familiar face associated with a real estate project, they automatically place a part of their trust in their name, thereby, impacting their buying decision. According to Manoj Kumar Singh, Chairman, Mangalya Group, "In a market like Delhi NCR which is flooded with a large number of projects, it is hard for prospective buyers to recall the available projects or developers. In such a case, brand ambassadors can positively impact the real estate market by creating a brand recognition."
Manju Yagnik, Vice Chairperson, Nahar Group, further explains, “For the real estate brand or project that is endorsed by a celebrity, the initial impact is phenomenal as it attracts the desired visibility for the project.” However, that is not the biggest or only factor impacting sales.
While experts agree that endorsements can provide a boost in the first phase of a project sale, they add that eventually the quality of construction and brand name of the developer will help sustain sales and brand salience. Real estate is not a small purchase unlike fashion or other low capital investment markets. Home buying decisions, therefore, should not be made solely on the basis of who endorses a project.
While experts are confident that consumers are smarter these days, they still point out that due diligence is a must for any prospective buyer. Buyers and investors should research the developer’s track record in terms of quality, deadlines and carry out other important background checks before entering into any realty transaction.
Punishment proposed for endorsements
The recent proposal by the government to hold celebrities accountable for their endorsements and misleading advertisements had raised a pertinent question about the role of celebrities in influencing sales. Yagnik states that a celebrity only lends a glamour quotient to the product in order to increase its visibility. She believes that it would be wrong to punish a celebrity endorser if the brand falters in its deliverables to customers. “The responsibility of the product or its performance and delivery rests with the owners of the product or the custodians of the product and as such holding a celebrity liable for a developer’s wrongdoings would not be entirely fair,” she adds.
On the other extreme of the opinion spectrum is Jasuja, who believes celebrities should choose brands carefully or face the consequences of their decisions. There has been a rise in the number of cases of home buyers being victimised due to misleading advertisements and brand endorsements. While there are many cases in which the celebrity endorsers may not be aware of any mischief by the developers and promoters, it is still important to carry out a due diligence on the reputation of the brand you are endorsing and have a know how about any fraud or forgery being committed by the builder.
Word of caution for celebrities
It is the moral responsibility of anybody advertising or advocating the purchase or use of any product to use his common sense before associating his name with a brand. Experts advise celebrities to do a thorough background check on builders before endorsing them. “This is pivotal because their association will not only affect the customers’ buying decisions significantly but can also mar the reputation of the celebrity,” Jasuja explains.
There is still a sizeable section of our country’s population which blindly trusts celebrities and buys something just because their favourite personality is promoting it. Hence, celebrities should take into consideration the massive responsibility which comes with endorsing a real estate project, since people often pump their life’s savings while buying a property.