When Scandals Meet Sponsorships: Can an Apology Salvage a Star's Brand Value? As Ranveer Singh faces public backlash, his controversy reignites a crucial question: how much can a single misstep shake a celebrity's brand equity and can an apology truly repair the damage?

Ranveer Singh recently drew attention when people reacted negatively to his parody of Rishabh Shetty's film 'Kantara'. This incident has ignited conversations on social platforms, within the entertainment sphere, and among those involved in marketing. While his box office success (especially for his upcoming film Dhurandar) is important for him, his status as a celebrity represents more than just box office revenues and profits. The controversies surrounding him present significant business challenges to all individuals in the industry, including brands and managers. The main question facing those in marketing is whether or not an apology can reverse the effects of an incident on the equity associated with a celebrity's brand.

The equity that is associated with a celebrity is based upon the trust, consistency and perception of the celebrity by the public. Therefore, when there is a last minute addition to a celebrity's list of controversies (e.g., an inappropriate joke, a provocative statement regarding politics or race, a socially unacceptable endorsement), this reaction will negatively impact their ability to sign new endorsement deals; get new endorsement contracts; or generate goodwill or support from the public.

Recent examples from Bollywood illustrate the business impact of having a public controversy:

Aamir Khan (and his respective brand partners) suffered significant backlash as a result of his statement regarding "intolerance" in India when this comment received enormous backlash from the public. This led to the unexpected termination of a sponsorship agreement between him and the online retailer, Snapdeal.

Many brand partners have withdrawn or terminated their sponsorship agreements as a result of a significant change in public opinion regarding an organisation or person.

The Apology Game: Redemption or Damage Control?

Due to public relations challenges, celebrities issue apologies via social media or make charitable gifts or some combination of these actions. The question remains - do these efforts actually return lost brand equity back to the celebrity? Multiple factors help to determine whether an apology is effective, they include sincerity, timing, a series of restored endorsements and the overall brand strategy for recovering lost equity.

For example: If the apology is given quickly and is deemed sincere, many brands will remain confident that the heat will pass by and continue to support them. But where there are long-term business and brand identity links between a celebrity and a brand, companies may stop or stop their endorsement of the celebrity altogether if the market reaction demonstrates a continued basis of distrust towards the celebrity.

Additionally, modern consumers are more aware than ever, thanks to the rise of social media and its ability to make things go viral overnight. This has resulted in a growing need to rebuild trust after it has been broken.

Brand Strategy in Crisis: What Happens Behind the Scenes

When controversies arise, brands and their marketers tend to perform an internal investigation into their business dealings, generally without fanfare. Typical steps involved in such investigations include:

* Reevaluating the relationship of the celebrity's reported character to the brand's beliefs, values, and principals, etc.

* Assessing the likelihood of negative reactions from customers, as well as any potential financial and/or legal exposure associated with being linked or connected to the celebrity, and/or any potential brand damage.

* Determining when to stop running advertising or promotional campaigns, change messaging about the brand or stop working with the celebrity through termination of contract, etc.

Some brands choose to stay the course and withstand negative publicity, believing in the longevity of the controversy, or that the celebrity involved continues to hold enough marketplace influence to warrant continued sponsorship or endorsement. For other brands, it may make sense to sever ties and move on as quickly as possible, or minimize potential damage to the brand. Regardless of which decision a brand makes, the term "celebrity able" will continue to be evaluated as it relates to potential celebrity associations with brands.

Why Bollywood stars are always susceptible to large-scale fallout

Bollywood actors and actresses, in particular, are faced with intense pressure due to the tremendous financial investment associated with being a star in the industry. Not only is their "brand equity" a direct reflection of the success (or failure) of their films or their productions, but the public perception of the stars is an equally critical factor in establishing brand equity in the first place. As more Bollywood stars find their place in the entrepreneurial and global arena, the way they conduct business, communicate with fans, and interact with other companies is becoming increasingly important.

For many Bollywood stars, such as Ranveer Singh, who are also successful brand builders and are currently affiliated with multiple brands, a single misstep could significantly impact their opportunity to build and participate in new and different collaborative endeavors andor achieve global ambitions.

Can Apology Salvage the Brand?

An apology isn't typically sufficient. However, to help restore the value of a brand, you need a series of consistent decisions regarding your PR approach plus commitment to being sensitive and responsible.

Being transparent and honest will help rebuild your trust level with some people, especially if the brand believes in the idea of turning-around or redeeming itself. Additionally, having an "after-effects" period where the celebrity is not involved in any other scandals, has a positive approach, and aligns with the brand's values is helpful. Ultimately, however, what is also needed to build long-term equity in your brand is the consistent execution of your responsibilities and being culturally aware and credible both in public and in your personal life.

For both businesses and celebrities, their reputations are the most susceptible to damage and are the most valuable commodity.