Donald Trump’s recent comments generated a lot of controversy around the world. It will be time before we know if his comments will hurt his quest for US presidency.
However, Trump’s comments carry a financial cost. A Dubai based retail chain has decided to suspend the sale of home furnishing products that carry the Trump name. The CEO of the Landmark group expressed, “In light of the recent statements made by the presidential candidate in the U.S. media, we have suspended sale of all products from the Trump Home décor range.” Mr. Trump is a wealthy man, and he will probably not feel the financial impact of his comments. However, the staff and people associated with Trump Home décor range could suffer financially.
Businesses have a choice to make; whether to use celebrities to endorse and advertise their products or use models who are not celebrities? The recent events suggest that celebrity endorsements could come with a lot of risk. The example of Mr. Trump does highlight the risk of linkage to celebrities for marketing products, especially if their comments don’t go down well with the people.
In India, recently, actor Aamir Khan was in news regarding his statements on intolerance, “Kiran and I have lived all our lives in India. For the first time, she said, should we move out of India?” His comments set off a strong reaction on the social media. While there were some people who supported him, there was also a sizeable population who felt outraged by his comments. Snapdeal, an online store that Mr. Khan endorses found itself under attack. Some suggested they stop using Snapdeal, while others suggested giving it a low rating. The reaction was strong enough for Snapdeal to distance itself from Mr. Khan’s comments. If Snapdeal was to lose customers, it would have little impact on the financial status of Mr. Khan. However, the impact could be strong for the employees and others with economic interests tied to the online portal. Globally, a number of companies have been forced to cancel endorsement contracts with Lance Armstrong and Tiger Woods, after they found themselves embroiled in scandals.
When a celebrity signs a contract to endorse a product, he owes to the eco-system of the business providing the service or selling the product. There could be a conflict between their duty to promote a product, and their political ambitions or desire to express agreement in favour of a cause or an idea.
To err is human, but the mistakes made by celebrities hurt not just their image but also the brand and lives associated with it. Companies need to be careful before taking on a celebrity endorser.