It is very late for me to write on sweat equity at this point of time after all the drama got over at the end of this year IPL3. Actually it is a non-cricketing term used in this year ipl off the field. so i took time for research activities on sweat equity and i am blogging it.
Put it simply,sweat equity are shares issued by a company to its employees or directors at a discount or for consideration other than cash.Every company can issue sweat equity.It is to reflect the value of services which an executive or an employee adds to his/her organization( present,past & future )
"Coming up with compelling plots a little bit inspiration and a lot of sweat equity"
Now coming to the recent controversies surrounding this so-called "sweat equity". Rendezvous consortium,an unregistered venture had won the franchise for the Kochi team which will take part in ipl4.It offered 4.75% stake in the kochi team (70 crore) to Dubai-based businesswoman,Sunanda Pushkar,a friend of Sashi tharoor.this started the sweat equity controversy.
According to rules,a company can issue sweat equity shares only on the completion of a year after being entitled to commence its business.(REndezvous started in august 2009,IPL auction March 2010).Issuance of sweat equity shares during a year cannot exceed 15% of paid up equity share capital or 5-crore whichever is higher.A separate resolution has to be passed.
The issue of sweat equity to Sunanda Pushkar is illegal& is in clear violation of companies act.the penalty though may be a paltry fine .
Thanks to sweat equity controversy as the people can know about a new term
Today there has been much debate whether celebrities are necessary to promote a brand.the entire debates surrounds around whether it really contributes to the brand building process or whether it is just another lazy tool to make the brand more visible in the minds of the consumers.consumers perceive a brand as having superior quality when it is endorsed by a credible source. On the other hand, the over popularity of the celebrity sometimes overshadows the brand.
Next is the most interesting one.
Multiple product endorsement----
If the celebrity is involved in multiple endorsements, it tends to create confusion among consumers and hence negatively affects the perception of the advertisement and the brand. Hence, to say clearly whether the practice of celebrity endorsement impacts positively or negatively to the brand still remains a debate.
And also if the celebrity endorses in the same segment category multiple times ,the situations become much worse,
( MS dhoni ,the Indian captain endorsed Aircel, Micromax in the mobile segment category at the same time(IPL season 3 for Micromax & previously for Aircel). Genelia d souza endorses Garnier,Virgin mobiles,Margo,Fanta et al.Superstar Amitabh Bachchan endorses multiple brands like Pepsi, Mirinda, ICICI, BPL, Parker pens, Nerolac, Dabur, Reid & Taylor, Maruti Versa, Hajmola, Tide, Cadbury and a few social messages.
In the above examples, are the brand ambassadors really endorses the product? Are they money-minded? Are they not true to what they are doing? Are the marketers or the company (fools) to give hefty money to them?
the answer will be" YES"
It has worked in some cases, while in some cases it has not.
Cost spent-
The budget or cost is an important factor for celebrity endorsement21. Depending on the status of the celebrity, remuneration could run into millions of rupees for several years or may also include a profit sharing plan. Imagine An AD featuring Aishwarya Rai & Abhishek bachan ? How much will it cost?
A Perfect Lesson
HUL never had a brand ambassador to endorse its products. only NOT-SO-POPULAR person appear and endorse the product( Lifebuoy, Wheel, Dettol, Close Up, Fevicol et al)
Did Apple have any brand ambassadors? Certainly not. And they wont.
Steve Jobs is a great marketer. he starts with customers in the mind. he designs products which makes life easier for them.
Positive Impacts
Approval of a brand by a star fosters a sense of trust for that brand among the target audience. This is especially true in case of new product
The re-entry of Cadbury---
cadbury was once protested by millions of people in the world due to its Nickel presence. the company did some aggressive marketing strategies to come out of the dark. they apponinted Amitabh bacchan as brand ambassador and succeeded in it.
The question of the hour is whether brand ambassadors are required. the answer is simple . Marketers have to think whether to follow the footsteps of steve jobs,HUL or the failed Micromax. Before investing lots of money in selecting& paying money to celebrities, think of customers.what will make their lives better? what tools can we create to make their lives better?
Day before yesterday i had an interactive session in my class discussing a case about cavinkare head Mr.Ranganathan. my professor gave valuable inputs about having a direct contact with a customer and getting the insights and building a brand. so i thought is advertising nescessary? y cant company's go & hve direct contact with customers & get their feedbacks? y shud they spend hell a lot of money in advertising and other related stuff?
OPPURTUNITIES GIVE CHOICES,CHOICES GIVE CONFUSIONS
Ranganathan's story more or less is a learning lesson to all business conglomerates.the best marketing insight can be from common sense & directly knowing the customer. so,businesses have to rethink their strategies
Is TV the right medium?
today in this competitive world there are lots of channels lined up. each key player in the industry launches new channels these days.this has given marketers a headache. they are now scratching their heads thinking which channels to advertise their products. And with the invention of remote, people dont have time watching those ads. if they watch cricket in between overs they change next channel(Infact I Do the same thing). this brings a question to all our minds .Is TV the right medium?
Use of Celebrities
some marketers have succeeded in promoting their products through various celebrities.i still have a doubt whether this celebrity principle work or not. today one celebrity endorses for 2-3 brands. is it fair on their part? then hw can consumers remember? MS Dhoni endorses Aircel,Micromax ( same mobile segment category)
Genelia D Souza Jaane Tu Jaane Na Fame - Fanta,Virgin Mobile,Fasttrack,Garnier,Margo and so on
secs- Commercial
I got really bored and pissed off wen i watched a 10 sec commercial of JK lakshmi cement. it was irrelevant, nothing described about the product.Infact a women came from swimming and endorsed the product ( Hope u can understand hw the commercial would be). some of the commercials are comical,unbelievable,putting down the customer. very few ads actually boosts a brand's image. some dont
OverExposure
IPL fever has ended. hw many brands have overexposed? wenever anyone went to see a match its not cricket that they are watching. infact lots of brands painted in merchandisers,walls,scoreboards and so on. this kills the brand image . customers get bored & annoyed.
In these days of information technology,social medias are becoming popular. Facebook,Twitter are becoming the target for marketers to promote their products.
so the need of the hour is grass root common sense marketing. things to be followed are brand royalty through services directing to customers,entrepreneurship in marketing.
I have been busy with my mid-term exams and also the T20 world cup which started on april 30. i have been stuck to TV watching cricket when my favourite team south africa was batting yesterday. but unfortunately they lost. ok,let me come to the point. i read an article about why businesses should invest in social media.
social media wen comes to our mind reminds of chatting and the so-called time passing stuff. but businesses have introduced a new definition for social media.they have decided to invest in it and promote their products via Orkut Buyukkokten's orkut,mark zuckerberg's facebook, jack dorsey's twitter.
There is hundred's of reasons why businesses are flooding money in these networking sites. social media may very well be the most powerful weapon you have when it comes to increasing revenue for your business.let me discuss the advantages of it
1.Brand awareness
those are the old days wen businesses used the services of newspapers,bill boards,TV's et al. but now everything is replaced by new and innovative expansion which is called social media. Reaching those audiences usually cost millions of dollars each year, meaning large corporations with that type of capital had a sizable advantage over small and medium-sized businesses in those medias. Social Media has changed all of that.
2.cheaper than traditional form of advertising-
As i said earlier those are the old days were Tv's, bill boards played such a significant role in promoting a product.And for many companies it costs more than a billion a year.To run an effective social media(SM) campaign, it takes a ton of time and knowledge. If you can’t afford to have an accredited SM employee run your campaign, it’s in your best interest to outsource it entirely.
3.create buzz-
When it comes time to launch a new product or service, the companies who have put time and resources toward establishing themselves in SM now have an immediate audience to help spread the word. This has been a powerful vehicle for a lot of companies, and one that is sorely missed by those waiting for the SM fad to fade away
4.Blogs, message boards and forums, especially if you’re in a niche market, allow for communication and interaction. If you’re able to give good advice and provide value, people will begin to trust your opinion and look to you for answers.( INFACT I CAME TO KNOW ABOUT IPAD ONLY THROUGH A BLOG)
5. With SM, getting feedback and gauging the temperature of your consumer-base is easier and cheaper than ever. SM gives business owners the ability to listen to their customers in real time and make adjustments accordingly.
6. Whether you’re a small business or large corporation, you have access to the same tools and same opportunities to go viral and reach millions of consumers. just open aa facebook account or a twitter account and u will come to know how advantageous it is to your business.
7. Facebook profiles and pages, Blog sites, individual blog Posts, Twitter, Myspace, Linked In, etc., have the potential to make their way to the homepages of Google, Yahoo and so on. Taking advantage of these numerous points of entry can mean A LOT to the bottom line of your business.
instead of spending ur money in a 10-15 second commercial and spending huge bucks of money,businesses can spend money in social networking sites. only god will only know hw far social media is going to develop more in the next 6-10 months
