Hero MotoCorp has been spending a lot of money on promotion and its recent deal with Tiger Woods comes across as expensive and probably unnecessary.
Post its break-up with its long time partner Honda, Hero has gone very aggressive, spending money like there is no tomorrow. While buying stake in companies like EBR, AVL, Engines Engineering and Magneti Marelli is a good investment, the same can’t be said about the promotional activities of the company. Honda has gone very aggressive in India and to counter the Japanese, Hero has been spending hefty amounts of money on advertisements. Right from being the main sponsor for sporting events (like Kabbadi, Hockey, Football, etc.) to having Alia Bhatt and Ranbir Kapoor on as product ambassadors, Hero has gone on an advertisement onslaught.
All this seemed fine and hiring of new talent from more established companies was also a good sign of things to come from Hero. However, the latest announcement of making ace Golfer Tiger Woods the global brand ambassador has come as a shock. The 4-year deal costed India’s largest 2-wheeler maker a whooping Rs. 250 crores, that’s high considering Nike paid less than that amount when Mr. Woods was on the peak of his career. Furthermore, no one really cares much about Golf in India and if they do, they are unlikely to be Hero customers.
Mr. Pawan Munjal justifies the move saying that roping in Tiger Woods is for global presence and not India as the company wants to be a world player with presence in 50 countries by 2020. Fair enough but why Tiger Woods, probably a footballer would have been an apt choice considering the popularity of the sport. It’s no secret that Hero’s MD is also a big golfer and has hosted dinner for Mr. Woods in the past, they both are good friends. Anyways, Rs. 250 crores isn’t a big amount for Hero, it’s as much as 56,000 Splendor motorcycles and we all know Hero sells close to 2 lakh units of this commuter every month (total sales are upwards of 5 lakh units). Hero should let its bikes do the talking as good products don’t need any brand ambassador to push the sale.
Update – Pawan Munjal has denied the deal amount, stating that the company has paid Tiger Woods much less for the 4-year endorsement. Analysts estimate the deal to be worth Rs. 120 crores, not Rs. 250 crores.
