Celebrity Endorsement- A Case Study On Pepsi

SU UM MM MER R PR RO OJE ECT T ASSB Man naging g Adveertisingg, Celeebrity Endorrsemen nts as a Strateg S gy and Publiccity Case Sttudy of Pepsi P

Nishan N nt Jayaaswal 460 08A 42 Under th he Guidan nce of Mrs. Bh hawana Gupta G

Bacchelor off Businesss Adminisstration (General) Amitty Schooll of Busin ness, Noid da Amityy Universsity

SUMMER PROJECT*2008-11   

Acknowledgement 

  After eight weeks of dedicated hard work, I am proud to have finally completed my summer project. Working with this project has given me valuable insight on how is an advertisement developed and how celebrity endorsement is used as a strategy for marketing in general and in Pepsi. First of all I would like to thank my project mentor Mrs Bhawana Gupta who has given me valuable support and guidance on my project topic and in academic writing through out the past eight weeks. I also present my appreciation to my brother Shwaitang Singh, David Sandin and Patrick Widmark for providing me with the data necessary to conduct this study. Finally I would like to thank my supportive family and friends for always being there throughout this project and making it possible.  

Nishant Jayaswal  

ASB, NOIDA 

         

1 | P a g e    

SUMMER PROJECT*2008-11   

Abstract   

Objective of the Project

Previous studies in the area of celebrity endorsement

have focused

on how

consumers react to celebrity endorsement but there is limited research available when it comes to how companies use celebrity endorsement and how they work to reduce the risks involved in celebrity endorsement. Our main concern will be to get the most satisfactory answer to the following question: 1. How can the factors inducing a company’s choice of celebrity endorsement as a

promotion tool are described? 2. How can the risks involved for a company in celebrity endorsement are

described? 3. How can the risk reduction methods adopted by a company in celebrity

endorsement be described?

ASB, NOIDA 

4. What is Managing Public Relation?

2 | P a g e    

SUMMER PROJECT*2008-11   

Limitations 

There are many aspects within the research area of celebrity endorsement. The topic selected for this research falls into a broad area. Therefore, limits of both time and resources have led me to focus on some specific questions, namely on the corporate perspective on why companies use celebrities and the risk with it and how they describe risk reduction.    

ASB, NOIDA 

 

3 | P a g e    

SUMMER PROJECT*2008-11   

Methodology  Types of Researches: Exploratory Research Descriptive Research Explanatory Research The study is exploratory since we have limited knowledge about the area we will do research in. The study is also descriptive since we are doing a study with already existing information.

Research Approach When conducting research there are different ways to address the topic. I will present and give the reason for the way we chosen to approach our study.  My study is deductive since our frame of reference is based on existing theories. I based my empirical data studies on theories and used them to form a base on how to analyze the collected data. In this study I chose the qualitative approach in order to be able to deal with research problem and research questions stated for the thesis, the qualitative approach is suitable since I want to obtain a deeper understanding on how factors induce companies to use celebrity endorsers in their marketing communication, and how the risks involved can be described and measures to decrease them. A quantitative approach is not suitable because I don’t want to analyze the data in numbers. Therefore a qualitative study is the best approach for me

Research Strategy In our study an experiment was not suitable strategy since we don’t have control over behavioral events. Survey is not suitable either because we don’t use the questions what, where, how many or how much. Archival records are not suitable either since we are not 4 | P a g e    

ASB, NOIDA 

when describing the collected data in words.  

SUMMER PROJECT*2008-11   

answering question such as how many and ho w much. We are looking at present time therefore history strategy is not suitable. The case study is generally superior when answering how and why questions about a specific topic and when control over the relevant behavior is not required and when research focus is on contemporary events. We will use a case study as research strategy because it is the most suitable. By this we think that we will be able to obtain a deeper understanding of our research area. The research is also based on present occurrences, which are motives to using case studies.  

Data Collection I had to choose a mix of Documentation; mine own observation; and physical artifacts.

Sample selection After selecting the suitable research strategy we have to our case study chosen a company that use celebrity endorsement in their marketing activities. The company that we have chosen for our case study is Pepsi. To find a suitable company for our case study we searched the web and looked in magazines for companies that were using celebrities as endorsers. After looking at Pepsi market communications we decided that they would be a good company for our research.  

ASB, NOIDA 

 

5 | P a g e    

SUMMER PROJECT*2008-11   

Table of Content  Sr No. Topic 1. Marketing Management 1.1 Introduction 1.2 History 2. Developing an Advertising Program I Setting the advertising objectives II Decision on advertising budget III Choosing the advertising message IV Deciding on media V Evaluating advertising effectiveness 3. Celebrity Endorsement 3.1 A brief Introduction 3.2 Essentials of celebrity endorsement 3.3 Theories 4. Publicity 5. Empirical Data: Case Study of Pepsi 6. Data Analysis 7. Conclusion 8. Future Prospect 9. Appendices 10. References  

ASB, NOIDA 

 

Page No. 7 7 10 14 16 18 21 24 31 33 33 37 40 52 59 66 69 72 73 74

6 | P a g e    

SUMMER PROJECT*2008-11     

1. Managing Advertisement  1.1 Introduction Advertising is any paid form of nonpersonal presentation and promotion of ideas, good or services by any identified sponsor. Advertising is a form of communication that typically attempts to persuade potential customers to purchase or to consume more of a particular brand of product or service. While now central to the contemporary global economy and the reproduction of global production networks, it is only quite recently that advertising has been more than a marginal influence on patterns of sales and production. The formation of modern advertising was intimately bound up with the emergence of new forms of monopoly capitalism around the end of the 19th and beginning of the 20th century as one element in corporate strategies to create, organize and where possible control markets, especially for mass produced consumer goods. Mass production necessitated mass consumption, and this in turn required a certain homogenization of consumer tastes for final products. At its limit, this involved seeking to create ‘world cultural convergence’, to homogenize consumer tastes and engineer a ‘convergence of lifestyle, culture and behaviors among consumer segments across the world. Advertising is the most important tool to grow your business. In fact, it not only helps your business to grow. Advertisement is necessary also for the establishment of a business. A great advertising strategy reflects a number of things starting from the company's objective to business

consideration, budget to brand development efforts and so on.

your ad must appeal to the rational faculty of a consumer. On the other hand the consumers choose one brand though several brands of the same product category exist in the market. The emotional self of a consumer dictates this. The best ad is one, which combines both reason and emotion to drive a sale. 7 | P a g e    

ASB, NOIDA 

While making an ad you should remember that consumers buy a product because they need it. So

SUMMER R PROJECT* *2008-11   

Advertiseer include not n only buusiness firm m but also museum, chharitable orrganizations,, and governm ment agenciees that direcct messagess to target public. Adss are cost effective e waay to disseminnate messagees, whether to build braand image for f Coca- Cola C or to educate peopple to avoid harrd drug. Adv vertising is used u by busiinesses and non-profit n organizationss to communnicate messagess about them mselves, theiir products, services, annd causes. Advertising A iss used to infform, persuadee and remind d the audiennce, two exaamples of addvertising caampaigns wiith very diffferent objectivees are included here. $ Absolut A Vod dka Absolut Vodka is th he third largeest internatioonal premiuum spirit in the t world wo brand of premium and is avvailable in 125 marketss and is thee number tw vodka woorldwide. Since its launch in 1979, 1 Absollut has achieeved significant worldw wide sales growth, from f 10,000 nine-liter caases to 7.5 million m nine-lliter cases inn 2002. It is hardd to tell thee Absolut sttory withoutt mentioningg the markeeting: The Absolut advertising campaign haas been runnning for moore than twennty years, and has followed a carefully developed strategy. s Sinnce the lauunch with 'Absolut Perfection' in 1980, soome seven hundred Abbsolut ads have h been producedd. In 1999, Advertising A A listed thhe Absolut advertising Age a c campaign am mong the tenn best advertisinng campaign ns of the tweentieth centuury. $ 'S Shame' - Reepublic of Irreland anti drink d drivin ng campaiggn In 2000 Drink driverrs in Irelandd had killed 800 people in the previous five yearrs and desp pite perceptiions to the contrary the drink drivving - 175 drunnk drivers continued problem was not diminishing d c too be

Researchh showed that young drrivers were a high-risk category onn the roads andd very susceeptible to thee effects of alcohol. a At the t legal lim mit, an 18 - 34 3 year old driver d is three times t more likely to beecome invollved in a craash than if he or she had h consumeed no alcohol. With W men caausing almosst nine out of o ten alcohol-related serrious and fataal road crashhes. 8 | P a g e    

ASB, NOIDA 

arrested every e week in i the Repubblic.

SUMMER PROJECT*2008-11   

Shame, an IR£500,000 anti drink driving campaign released just prior to Christmas 2000, aimed to confront drink drivers head on. This hard-hitting and uncompromising, sixty seconds commercial depicts graphically the potential consequences of drink driving and the terrible shame associated with it. It has been embargoed until after the 9 pm watershed on some television channels. Following its launch, research showed the campaign achieved: 86% awareness, a 36% improvement in zero alcohol safe driving perceptions, a 36% decline in the acceptability of driving after one drink, and an increased perception that drink driving is ‘extremely shameful’ among the target audience.

Many advertisements are designed to generate increased consumption of those products and services through the creation and reinvention of the "brand image". For these purposes, advertisements sometimes embed their persuasive message with factual information. Every major medium is used to deliver these messages, including television, radio, cinema, magazines, newspapers, video games, the Internet, carrier bags and billboards. Advertising is often placed by an advertising agency on behalf of a company or other organization. Organizations that frequently spend large sums of money on advertising that sells what is not, strictly speaking, a product or service include political parties, interest groups, religious organizations, and military recruiters. Non-profit organizations are not typical advertising clients, and may rely on free modes of persuasion, such as public service announcements.  

  ASB, NOIDA 

 

9 | P a g e    

SUMMER PROJECT*2008-11   

1.2 History Egyptians used papyrus to make sales messages and wall posters. Commercial messages and political campaign displays have been found in the ruins of Pompeii and ancient Arabia. Lost and found advertising on papyrus was common in Ancient Greece and Ancient Rome. Wall or rock painting for commercial advertising is another manifestation of an ancient advertising form, which is present to this day in many parts of Asia, Africa, and South America. The tradition of wall painting can be traced back to Indian rock art paintings that date back to 4000 BCE. As the towns and cities of the Middle Ages began to grow, and the general populace was unable to read, signs that today would say cobbler, miller, tailor or blacksmith would use an image associated with their trade such as a boot, a suit, a hat, a clock, a diamond, a horse shoe, a candle or even a bag of flour. Fruits and vegetables were sold in the city square from the backs of carts and wagons and their proprietors used street callers or town criers to announce their whereabouts for the convenience of the customers. As education became an apparent need and reading, as well printing developed, advertising expanded to include handbills. In the 17th century, advertisements started to appear in weekly newspapers in England. These early print advertisements were used mainly to promote books and newspapers, which became increasingly affordable with advances in the printing press; and medicines, which were increasingly sought after as disease ravaged Europe. However, false advertising and so-called "quack" advertisements became a problem, which ushered in the regulation of advertising content. As the economy expanded during the 19th century, advertising grew alongside. In the United States, the success of this advertising format eventually led to the growth of mail-order advertising.

allowing it to lower its price, extend its readership and increase its profitability and the formula was soon copied by all titles. Around 1840, Volney Palmer established a predecessor to advertising agencies in Boston. Around the same time, in France, Charles-Louis Havas extended the services of his news agency, Havas to include advertisement brokerage, making it the first French group to organize. At first, agencies were brokers for advertisement space in newspapers. 10 | P a g e    

ASB, NOIDA 

In June 1836, French newspaper La Presse is the first to include paid advertising in its pages,

SUMMER PROJECT*2008-11   

N. W. Ayer & Son was the first full-service agency to assume responsibility for advertising content. N.W. Ayer opened in 1869, and was located in Philadelphia. At the turn of the century, there were few career choices for women in business; however, advertising was one of the few. Since women were responsible for most of the purchasing done in their household, advertisers and agencies recognized the value of women's insight during the creative process. In fact, the first American advertising to use a sexual sell was created by a woman – for a soap product. Although tame by today's standards, the advertisement featured a couple with the message "The skin you love to touch". In the early 1920s, radio equipment manufacturers and retailers who offered programs in order to sell more radios to consumers established the first radio stations. As time passed, many nonprofit organizations followed suit in setting up their own radio stations, and included: schools, clubs and civic groups. When the practice of sponsoring programs was popularized, each individual radio program was usually sponsored by a single business in exchange for a brief mention of the business' name at the beginning and end of the sponsored shows. However, radio station owners soon realized they could earn more money by selling sponsorship rights in small time allocations to multiple businesses throughout their radio station's broadcasts, rather than selling the sponsorship rights to single businesses per show. This practice was carried over to television in the late 1940s and early 1950s. A fierce battle was fought between those seeking to commercialize the radio and people who argued that the radio spectrum should be considered a part of the commons – to be used only non-commercially and for the public good. The United Kingdom pursued a public funding model for the BBC, originally a private company, the British Broadcasting Company, but incorporated as a public body by Royal Charter in 1927. In Canada, advocates like Graham Spry were likewise able to persuade the federal government to adopt a public funding model, creating the Canadian Broadcasting Corporation. However, in the United States, the capitalist model prevailed with the Commission. To placate the socialists, the U.S. Congress did require commercial broadcasters to operate in the "public interest, convenience, and necessity". Public broadcasting now exists in the United States due to the 1967 Public Broadcasting Act which led to the Public Broadcasting Service and National Public Radio. 11 | P a g e    

ASB, NOIDA 

passage of the Communications Act of 1934 which created the Federal Communications

SUMMER PROJECT*2008-11   

In the early 1950s, the DuMont Television Network began the modern trend of selling advertisement time to multiple sponsors. Previously, DuMont had trouble finding sponsors for many of their programs and compensated by selling smaller blocks of advertising time to several businesses. This eventually became the standard for the commercial television industry in the United States. However, it was still a common practice to have single sponsor shows, such as The United States Steel Hour. In some instances, the sponsors exercised great control over the content of the show - up to and including having one's advertising agency actually writing the show. The single sponsor model is much less prevalent now, a notable exception being the Hallmark Hall of Fame. The 1960s saw advertising transform into a modern approach in which creativity was allowed to shine, producing unexpected messages that made advertisements more tempting to consumers' eyes. The Volkswagen ad campaign—featuring such headlines as "Think Small" and "Lemon" (which were used to describe the appearance of the car)—ushered in the era of modern advertising by promoting a "position" or "unique selling proposition" designed to associate each brand with a specific idea in the reader or viewer's mind. This period of American advertising is called the Creative Revolution and its archetype was William Bernbach who helped create the revolutionary Volkswagen ads among others. Some of the most creative and long-standing American advertising dates to this period. The late 1980s and early 1990s saw the introduction of cable television and particularly MTV. Pioneering the concept of the music video, MTV ushered in a new type of advertising: the consumer tunes in for the advertising message, rather than it being a by-product or afterthought. As cable and satellite television became increasingly prevalent, specialty channels emerged, including channels entirely devoted to advertising, such as QVC, Home Shopping Network, and ShopTV Canada.

com" boom of the 1990s. Entire corporations operated solely on advertising revenue, offering everything from coupons to free Internet access. At the turn of the 21st century, a number of websites including the search engine Google, started a change in online advertising by emphasizing contextually relevant, unobtrusive ads intended to help, rather than inundate, users. This has led to a plethora of similar efforts and an increasing trend of interactive advertising. 12 | P a g e    

ASB, NOIDA 

Marketing through the Internet opened new frontiers for advertisers and contributed to the "dot-

SUMMER PROJECT*2008-11   

The share of advertising spending relative to GDP has changed little across large changes in media. For example, in the U.S. in 1925, the main advertising media were newspapers, magazines, signs on streetcars, and outdoor posters. Advertising spending as a share of GDP was about 2.9 percent. By 1998, television and radio had become major advertising media. Nonetheless, advertising spending as a share of GDP was slightly lower—about 2.4 percent. A recent advertising innovation is "guerrilla marketing", which involve unusual approaches such as staged encounters in public places, giveaways of products such as cars that are covered with brand messages, and interactive advertising where the viewer can respond to become part of the advertising message. This reflects an increasing trend of interactive and "embedded" ads, such as via product placement, having consumers vote through text messages, and various innovations utilizing social network services such as MySpace.

 

ASB, NOIDA 

 

13 | P a g e    

SUMMER R PROJECT* *2008-11   

2. Deveelopin ng an Adveertisin ng Pro ogram m   In develooping a prog gram, markeeting manageer must alwaays start by identifying the t target market m and buyeer motives. Then they can make five major decisions inn developinng an adverttising program,, known as “the five Ms” M Mission: What are the t advertisiing objectivees? Money: How much can be spent?? Message: What W messaage should be b sent? Meedia: What media should be

ASB, NOIDA 

used? Meeasurement: How shouldd the results is evaluatedd?

14 | P a g e    

SUMMER PROJECT*2008-11   

Before launching an Advertising campaign, the organization must make several key decisions, in terms of the objectives, budget, and strategy. Developing an advertising program is a five-step process: 1. Setting advertising objective 2. Establish a budget that takes into account stage in product life cycle, market share and consumer

base,

competition

and

clutter,

advertising

frequency

and

product

substitutability 3. Choose the advertising message, determine how the message will be generated, evaluate alternative message for desirability, exclusiveness and believability and execute the message with the most appropriate style, tone, words, and format and in social responsible manner 4. Decide on the media by establishing the ads desired reach, frequency, and impact and then choosing the right media that will deliver the desired result in terms of circulation, audience, effective audience, and effective ad-exposed audience 5. Evaluate the communication and sales effect of advertising  

ASB, NOIDA 

 

15 | P a g e    

SUMMER PROJECT*2008-11   

I. Setting the Advertising Objective   Advertising is one part of the promotional mix, and therefore advertising objectives will be set in line with overall Promotional and Marketing Objectives, which in turn will relate to the organizations’ overall Corporate Objectives. In general, however, there are three main categories of advertising objectives a business might set itself in terms of whether it seeks to Inform, Persuade or Remind the target audience. $ Inform: Informative advertising, seeks to tell the market about the product, explain how the product works, provide information on pricing, and build awareness of both the product and the company. Such objectives are normally pursued at the launch of a new

Example: The Dyson Contra rotator: The Dyson Contra rotator™ is the only 2-drum wash action washing machine on the market. A key objective for Dyson is to inform the market about this unique product, explaining how the product works, and its advantages over normal washing machines.

product, or re-launch / up-date of an existing product. $ Persuade: Here objectives are to encourage the target audience to switch brands, make the purchase, and create a preference in the market for the product as opposed to its competition. Advertising of this nature is required in highly competitive markets, where a range of products competes directly with each other. In such circumstances businesses

Example: Halifax 'Who gives you Extra' Campaign: The Halifax 'Who gives you Extra' campaign has been an extremely successful example of Comparative Advertising, used to Persuade savers to switch Banks. In a highly competitive market, the aim of the work is to show the extra value the bank delivers to customers across a range of financial services, and was produced by the Delaney Lund Knox Warren & Partners agency.

16 | P a g e    

ASB, NOIDA 

often seek to differentiate their product through Comparison Advertising – either directly

SUMMER PROJECT*2008-11   

or indirectly comparing its product to that of its competitors.

$ Remind or Reinforce: Reminder Advertising is used to maintain interest and awareness of a well-established product in the market, often in the latter stages of its product life cycle. It is often used at the Point-of-Purchase to remind consumers of the Brand. Such advertising is used by the likes of Coca-Cola and other leading brands, to maintain their position in the market. Its aims to convince current purchaser that they have made the right choice. Automobile ads often depict satisfied customers enjoying special features of their new car. The advertising objective should emerge from a thorough analysis of the current marketing situation. If the product class is mature, the company is the market leader, and brand usage is low, the proper objective should be to stimulate the usage. If the product class is new, the company is not the market leader, but the brand is superior to the leader, then the proper objective is to convince the market of the brand superiority.  

ASB, NOIDA 

 

17 | P a g e    

SUMMER PROJECT*2008-11   

II. Deciding on the Advertising Budget  How dose the company know if it is spending the right amount? Some critics charge that large, consumer packaged-goods firm tend to overspend on advertising as a form of insurance against not spending enough, and that industrial companies underestimate the power of the company and product image building and tend to under respond. Although advertising is treated as current expense, part of it is really an investment that a builds up intangible asset called brand equity. New brands in a global marketplace have little chance of rivaling established brands. To create a brand from scratch requires huge investments. The process may take years, and its probability of success is slim. Empirical research has shown that massive sums spent on advertising are not always justified by short-term sales. The return on this investment is translated into other less tangible brand awareness, image, and loyalty. When $5million is spent on capital equipment, the equipment may be treated as five-year depreciable asset and only one fifth of the cost is written off in the first year. This treatment of advertising reduces the company’s reported profit and therefore limits the number of new product launches a company can undertake in one year. When $5 million is spent on capital equipment, the equipment may be treated as five year depreciable asset and only one fifth of the cost is written off in the first year. When $5 million is spent on advertising to launch a new product, the entire cost must be written off in the first year. The treatment of advertising reduces the company’s reported profit and therefore limits the number of new product launches a company can undertake in any one year. Having identified advertising objectives, the advertising budget must be set. Determining exactly how much a business should spend on advertising to achieve the desired level of sales, is more an art than a science. Commonly, the decision is based on experience of expenditure on be considered in setting the advertising budget. There are five specific factors to consider when setting the advertising budget. They are as follow:

18 | P a g e    

ASB, NOIDA 

advertising, and the sales subsequently achieved. There are however a number of factors that can

SUMMER PROJECT*2008-11   

1. Stage in the Product life cycle: New products typically receive large advertising budgets to build awareness and to gain consumer trial. New products in the 'Launch' stage of their Product Life Cycle, will normally require greater expenditure on advertising to create product awareness, and encourage consumers to trial the product. Established brands usually are supported with lower advertising budget as a ratio to sales.  Whilst products that have reached 'Maturity' in their product life cycle, will often require smaller advertising budgets to achieve the level of sales required.

2. Market share and Consumer base: High- market- share brands usually require less advertising expenditure as percentage of sales to maintain share. To build share by increasing market size requires larger expenditure. On a cost- per- impression basis, it is less expensive to reach consumer of a widely used brand than to reach consumer of low share brands.

3. Competition and clutter: The number of competitors in the market, and their expenditure on advertising competing products, will influence a business to spend to a similar or higher degree.  In a market with a large number of competitors and high advertising spending, a brand must advertise more heavily to be heard. Even simple clutter from advertisements not directly competitive to the brand creates a need for heavier advertising.

4. Advertising frequency: The numbers of repetitions needed to put across the brand’s message to consumer has an important impact on the advertising budget.

5. Product Substitutability: A product very similar to other products on the market Brands in a commodity class (cigarettes, beer, soft drinks) require heavy advertising to establish a differential image. Advertising is also important when a brand can offer unique physical benefits or features.

19 | P a g e    

ASB, NOIDA 

may require greater expenditure on advertising to differentiate it from its competitors. 

SUMMER PROJECT*2008-11   

Marketing scientists have built a number of advertising- expenditure models that that consider these factors. Vidale and Wolfe’s model called for a larger advertising budget, the higher the sales response rate, the higher the sales decay rate (the rate at which consumer forgets the advertisement and the brand), and the higher the untapped sales potential. Unfortunately, this factor leaves out other important factors, such as the rate competitive advertising and the effectiveness of the company’s ads. John Little proposed an adaptive- control method for setting the advertising budget. Suppose the company has set an advertising- expenditure rate based on its most current information. It spends this rate in all market except in the subsets of 2n markets randomly drawn. In n test market the company spends it at a lower rate, and in the other n market it spends at a higher rate. This procedure will yield information about the average sales created by the low, medium, and high rates of advertising that can be used to update the parameters of sales- response function. The updated function can be used to determine the beat advertising- expenditure rate for the next period. If this expenditure is conducted in each period, advertising expenditures will closely

ASB, NOIDA 

track the actual advertising expenditure.

20 | P a g e    

SUMMER PROJECT*2008-11   

III. Choosing the Advertising Message  Advertising campaigns vary in creativity. William Bernbach observed: “The facts are not enough…. Don’t forget that Shakespeare used some pretty hackneyed plots, yet his message came through with great execution.” Still even great execution must be updated before it gets outdated. Advertisers go through a four steps to develop a creative strategy: 1. Message Generation 2. Message Evaluation and Selection 3. Message Execution 4. Social Responsibility Review

Message Generation  Advertising People have proposed different theories for creating an effective message. Rosser Reeves of the Ted Bates Advertising Agencies favored linking the brand directly to a single benefit. Leo Burnett and his agency preferred to create a character that expressed the product’s benefits. Whatever method is used, creative people should talk to consumer, dealers and experts. Some creative people use a deductive framework for generating advertising messages. John Maloney proposed one framework. He saw buyer as expecting one of four types of rewards from the product: rational, sensory, social, or ego satisfaction. Buyers might visualize these rewards from result-of-use experience, product-in-use experience or incidental-to-use experience. Crossing the message. For Example, the appeal “get clothes cleaner” is a rational-reward promise following results-ofuse experience. The phrase “real gusto in a great light beer” is a sensory-reward promise connected with product-in-use experience. 21 | P a g e    

ASB, NOIDA 

four types of rewards with the three types of experience generates 12 types of advertising

SUMMER PROJECT*2008-11   

How many alternative ad themes should the advertiser create before making a choice? The more ads that are independently created, the higher the probability of finding an excellent one. Yet the more time spent on creating alternative ads, the higher the costs. Under the present commission system, the agency dose not likes to go to the expense of creating

Gillette: The best a man can get

and presenting ads. Fortunately, the expense of

Is an example of a message which 

creating rough ads is rapidly falling due to computers.

draws attention to the brand’s 

An ad agency department can compose many

position as the market leader, and the 

alternatives ads in short time by drawing from

emphasis it places on quality, 

computer files containing stills and video images.

reminding and reassuring the  audience, with use of celebrity  endorsement 

Message Evaluation and Selection   A good ad normally focuses on one core selling proposition. The advertiser should conduct market research to determine which appeal works best with its target audience.

Once an

effective appeal is found, the advertiser should prepare a creative brief, typically covering one or two pages. It is an elaboration of the positioning statement and includes: key message; target audience; the promise; and the media to be used. All the team members working on the campaign need to agree on the creative brief before investing in costly ads.

Message Execution   

said. Some ads aim for rational positioning and other for emotional positioning. The choice of headlines and copy can make a difference in impact. In preparing an ad campaign, the advertiser usually prepares a copy strategy statement describing the objective, content, support, and tone of the desired ad. Any message can be presented in 22 | P a g e    

ASB, NOIDA 

The message’s impact depends not only on what is said, but often more important, on how it is

SUMMER PROJECT*2008-11   

number of execution style: slice-of-life, lifestyle, fantasy, mood or image, musical, personality symbol, technical expertise, scientific evidence, and testimonial. “Marketing insight: Celebrity Endorsements as a Strategy” focuses on the use of testimonials. The communicator must choose an appropriate tone for the ad. Memorable and attention-getting words must be found. The themes listed on the left would have had much less impact without the creative phrasing on the right.

Theme 7-Up is not a cola Milk is good for you Our technology can help you do almost anything No hard sell, just a good car. We don’t rent as many cars so we have to do more for our costumers Red Roof Inns offer inexpensive lodging

Creative Copy The Un-Cola (7-Up) Got Milk? (Milk industry) Where do you want to go today? (Microsoft) Drivers Wanted (Volkswagen) We try harder “Sleep cheap at Red Roof Inns”

Creativity is specially required for headlines. There are six basic types of headlines: 9 News (“New Boom and More Inflation Ahead… and What You Can do About it”) 9 Question (“Have You Had It Lately”) 9 Narrative (“They Laughed When I Sat Down at the Piano, but Then I started to Play!”) 9 Command (“Don’t Buy until You Try All Three”) 9 1-2-3 ways (“12 Ways to Save on Your Income Tax”) 9 How-what-why (“Why They Cant Stop Buying”) Format elements such as ad size, color, and illustration will affect an ad’s impact as well as its cost. A minor rearrangement of mechanical elements can improve attention getting power. Four-color illustration increases ad effectiveness and ad cost. In addition the tone of the advertisement will need to be established, which can be either positive or negative. The advert may therefore promote positive feelings of fun, contentment, and happiness or take on a more negative, somber, or even threatening tone. Unfortunately the reality 23 | P a g e    

ASB, NOIDA 

Larger- sized ads gain attention, though not necessarily by as much as their difference in cost.

SUMMER PROJECT*2008-11   

of advertising is such that recent research has claimed that even the best planned and executed advertisements may only be noticed by less than 50% of the audience, and only approximately 30% will actually recall the main message of the advert.

Ads are more effective when there message is congruent with their surrounding. People are more likely to believe a TV or radio to become more positively disposed towards the brand when the ad is placed within a program they like. In recent times critics have bemoaned the spate of bland ads and slogans and in particular the frequent use of the no referential “it,” as in “Coke is it”; Nike’s popular “just do it”. Why do so many ads look or sounds like? This is because many companies want comfort, not creativity.”

Social Responsibility Review  Advertisers and their agencies must be sure their “creative” advertising dose not oversteps social and legal norms. Most marketers work hard to communicate openly and honestly with consumers. Still abuses occur, and public policy makers have developed a substantial body of laws and regulations to govern advertising. Advertisers must not: $ Make false claims $ Demonstrate falsely $ Indulge into bait-and-switch advertising that attract buyer under false impression    ASB, NOIDA 

 

24 | P a g e    

SUMMER PROJECT*2008-11   

VI. Deciding on Media   After choosing the message, the advertiser’s next task is to choose media to carry it. The steps here are deciding on desired reach, frequency, and impact; choosing among major media types; selecting specific media vehicles; deciding on media timing; and deciding on geographical media allocation. Then the results of these decisions need to be evaluated. This again has four components. They are: 1. Deciding on reach, frequency and impact 2. Choosing among major media types 3. Selecting specific vehicles 4. Deciding on media timing 5. Deciding on geographical allocation

Deciding on Reach, Frequency and Impact  Media selection is finding the most cost effective media to deliver the desired number and types of exposures to the target audience. The new task is to find out how many exposures, E*, will produce a level of audience awareness of A*. The effect of exposures on audience awareness depends upon on the exposures’ reach, frequency and impact. Reach (R): The number of different persons or households exposed to a particular media schedule at least once during a specified time period. Frequency (F): The number of times within the specified time period that an average person or

Impact (I): The quantitative value of an exposure through a given medium.    

25 | P a g e    

 

ASB, NOIDA 

household is exposed to the message.

SUMMER R PROJECT* *2008-11   

R Relation betw ween producct trial

 

ratte and audiennce awareneess level                    

Relationshhip between audience

 

 

reachh and frequenncy

ASB, NOIDA 

 

awarenesss level and exposure e

26 | P a g e    

SUMMER PROJECT*2008-11   

The above figures show the relationship between audience, awareness and reach. Audience awareness will be greater, higher the exposures’ reach, frequency and impact. The relationship between reach, frequency, and impact is captured in the following concepts: $ Total number of exposures (E): This is the reach times average frequency; that is, E = R xF $ Weighted number of exposures (WE): This is the reach time average frequency times average impact that is WE = R x F x I The media planer has to figure out the most cost effective combination of reach, frequency, and impact. Reach is most important when launching new products, flanker brand extensions of well known brands, or infrequently purchased brands; or going after an understood target market. Frequency is most important where there is a strong competitor, a complex story to tell, high consumer resistance, or a frequent purchase cycle.

Choosing among media types    The media planner has to know the capacity of major media types to deliver reach, frequency, and impact. The major advertising media along with their costs, advantages and limitation are profiled below.

27 | P a g e    

Limitation Short life; poor reproduction quality; small “pass along’ audience High absolute cost; high clutter; fleeting exposure; less audience selectivity Relatively high cost; “junk mail” image Audio presentation only; lower attention than television; no standardized rate structure, fleeting exposure

ASB, NOIDA 

Medium Advantages Newspapers Flexibility; timeliness; good local market coverage; broad acceptance; high believability Combines sight, sound and Television motion; appealing to the senses; high attention; high reach Direct Mail Audience selectivity; flexibility; no ad competition within the same medium; personalization Mass use; high geographic and Radio demographic selectivity; low cost

SUMMER PROJECT*2008-11   

Magazines

Outdoor Yellow Pages Newsletters

Brochures Telephone Internet

High geographic and demographic selectivity; credibility and prestige; high quality reproduction; long life; good pass along readers Flexibility; high repeat exposure; low cost; low competition Excellent local coverage; high believability; wide reach; low cost Very high selectivity; full control; interactive opportunities; relative low cost Flexibility; full control; can dramatize messages Many users; opportunity to give a personal touch High selectivity; interactive possibilities; relatively low cost

Long ad purchase lead time; some waste circulation; no guarantee of position Limited audience selectivity; creative limitation High competition; long ad purchase lead time; creative limitations Cost could run away Overproduction could lead to run away costs Relative high cost unless volunteers are used Relatively new media with a low number of users in some countries

 

Media planners make their choice among media by considering the following variables: •

Target-audience media habits: For example, radio and television are the most effective media for reaching teenagers

•

Product characteristics: Media types have different potentials of demonstration, visualization, explanation, believability, and color.

•

Message characteristics: Timeliness and information content will influence media choice.

•

Cast: Television is very expensive, whereas newspaper advertising is relatively

Given the abundance of media, the planner must first decide how to allocate the budget to major media type.     28 | P a g e    

ASB, NOIDA 

inexpensive. What counts is the cost-per-thousand exposures

SUMMER PROJECT*2008-11   

Selecting specific vehicles  The media planner must search for the most cost effective vehicles within each chosen media type. In making choices, the planner has to rely on measurement services that provide estimates of audience size, composition, and media cost. Audience has several possible measures: ™ Circulation: The number of physical units carrying the advertising. ™ Audience: The number of people exposed to the vehicle has pass-on readership, then the audience is larger than circulation. ™ Effective audience: The number of people with target audience characteristics exposed to the vehicle. ™ Effective ad exposed audience: The number of people with target audience characteristics who actually saw the ad Several adjustments have to be applied to cost-per-thousand measure. 1. The measure should be adjusted for audience quality 2. The exposure value should be adjusted for the audience-attention probability 3. The exposure value should be adjusted to the magazine’s editorial quality 4. The exposure value should be adjusted for the magazine’s ad placement policies and extra services  Deciding on media timing 

In choosing, the advertiser faces both a macro scheduling and micro scheduling problem. ™ Macro scheduling problem involves scheduling the advertising in relation to seasons and business cycle. period to obtain maximum impact.   In launching a new product, the advertisers have to choose among ad continuity, concentration, flighting, and pulsing.

29 | P a g e    

ASB, NOIDA 

™ Micro Scheduling problem calls for allocating advertising expenditures within a short

SUMMER PROJECT*2008-11   

™ Continuity is achieved by scheduling exposures evenly throughout a given period ™ Concentration calls for spending all the advertising money in a single period ™ Flighting calls for advertising for some period, followed by a hiatus with no advertising, followed by a cycle is relatively infrequent and with seasonal items ™ Pulsing is continuous advertising at low weight levels reinforced periodically by waves of heavier activity.

Deciding on geographical allocation 

ASB, NOIDA 

A company has to decide how to allocate its advertising budget over space as well as over time.

30 | P a g e    

SUMMER PROJECT*2008-11   

V. Evaluating advertising Effectiveness  Good planning and control of advertising depends on measure of advertising effectiveness. Yet the amount of fundamental research on effectiveness is appallingly small. Most measurement of advertising effectiveness deals with specific ads and campaigns. Most of the money is spent b agencies on pretesting ads, and much less is spent on evaluating their effectiveness. Most advertisers try to measure the communication effect of an ad – that is its potential effect on awareness, knowledge, or preference. They would also like to measure the ad’s sales effect. Communication-effect research seeks to determine whether an ad is communicating effectively. Called Copy Testing, it can be done before the ad is put into media and after it printed or broadcast. There are three major methods of advertising pretesting. The consumer feedback method ask consumer for their reaction to a proposed ad. Portfolio test ask consumer to view or listen to a portfolio of advertisements taking as much as they need. Consumers are than asked to recall to all ads and their content, aided or unaided by the interviewer. Laboratory test use equipment to measure by physiological reactions- heartbeat, blood pressure, pupil dilation, galvanic skin response, perspiration- to an ad; or consumer may be asked to turn a knob to indicate their moment-to-moment liking or interest while viewing sequence material. The sale impact is easiest to measure in direct marketing situations and hardest to measure in brand or corporate image building advertising. Companies are generally interested in finding out whether they are overspending or under spending on advertising. A company’s share of advertising expenditures produce a share of voice that earns a share of

ASB, NOIDA 

consumers’ minds and heart and ultimately, a share of market.

31 | P a g e    

SUMMER R PROJECT* *2008-11   

 

ASB, NOIDA 

 

32 | P a g e    

SUMMER PROJECT*2008-11   

3. Celebrity Endorsements   3.1 A brief introduction Shahrukh Khan, Mahendra Singh Dhoni, Amir Khan, Sachin Tendulkar, these names have become symbols of the role of endorsers in advertising. Firms spend millions of dollars to sign up celebrities to endorse their products. This is not a recent phenomenon and goes way back in time to the late nineteenth century. From a marketing communication perspective it is important that companies design strategies to create competitive differ entail advantages for the company’s products or services. Marketing activities back up other elements in the marketing mix such as product design, branding, packaging, place and pricing in order to create positive awareness in the minds of the consumers. To achieve this, the use of celebrity endorsers is widely used as a marketing communication strategy. For Example 

Nike is known around the world for being one of the most iconic brands. It was recently ranked as the world’s 31st most valuable brand in terms of its brand value – USD10.8 billion – by the annual Business Week’s global top 100 brand survey. In spite of many market maneuvers (such as the recent merger between Adidas and Reebok), Nike has remained the leader in its category. Nike is also very well known for another aspect and that is its consistent use of celebrities to endorse the brand. In fact one of the most successful collaborations between a brand and a celebrity is that of Nike and Michael Jordan. So successful was the collaboration that Nike and Jordan launched a new brand variant called the Air Jordan line of sport shoes. Nike pulled off a very similar coup in the sports industry when it joined forces with the ace golfer Tiger Woods to enter the golf category with its apparel, equipment and accessories. Nike had no experience in Nike would not be very successful. This might have probably been true had Nike chosen the traditional path to building its equity in the golfing arena. But Nike chose to associate with the best golfer in the world and have him endorse the brand. As is known today, Nike has emerged highly successful in golf. 33 | P a g e    

ASB, NOIDA 

golf before. Moreover, golf being a very elite game, it was generally considered that a brand like

SUMMER PROJECT*2008-11   

This channel now being used by many brands around the world raises some crucial questions about ways brands are built and also about the impact such collaborations have on branding. Is associating with a leading celebrity the easiest way to build a brand? Should celebrity endorsement be the principal channel of brand communications? How can brands decide on potential brand endorsers? What are the advantages and disadvantages of such endorsements? Is celebrity endorsement always beneficial to the brand? How a celebrity does enhance a brand image?

Celebrity branding is a type of branding, or advertising, in which a celebrity uses his or her status in society to promote a product, service or charity. Celebrity branding can take several different forms, from a celebrity simply appearing in advertisements for a product, service or charity, to a celebrity attending PR events, creating his or her own line of products or services, and/or using his or her name as a brand. The most popular forms of celebrity brand lines are for clothing and fragrances. Many singers, models and film stars now have at least one licensed product or service which bears their name. Lately there has been a trend towards celebrity voice-overs in advertising. Some celebrities have distinct voices which are recognizable even when they not present on-screen. This is a more subtle way to add celebrity branding to a product or service. And example of such an advertising campaign is Sean Connery voice-over for Level 3 Communications. More recently, advertisers have begun attempting to quantify and qualify the use of celebrities in their marketing campaigns by evaluating their awareness, appeal, and relevance to a brand's image and the celebrity's influence on consumer buying behavior.

Omnicom agency Davie Brown Entertainment has created an independent index for brand marketers and advertising agencies that determine a celebrity’s ability to influence brand affinity and consumer purchase intent. According to the Wall Street Journal, the Davie-Brown Index (DBI) will "enable advertisers and ad-agency personnel to determine if a particular public figure will motivate consumers who see them in an ad to purchase the product advertised." 34 | P a g e    

ASB, NOIDA 

For Example 

SUMMER PROJECT*2008-11   

Celebrity branding is a global phenomenon and it assumes paramount importance in developing countries like India where celebrities are given the status of demy Gods by the masses. There is a certain correlation between successful celebrity branding and brand endorsements. Endorsers can be categorized into three broad classes, namely experts, lay endorsers and celebrities. Each of them has special characteristics and roles in the communication process. Experts are individuals or organizations that the target population perceives as having substantial knowledge in a particular area. Typically experts are chosen because of the knowledge they have gathered through experience, training or study. Lay endorsers are unknown individuals or characters that may be real or fictional and are (initially at least) unknown. They are selected to closely resemble the target segment, enabling the target segment to identify with the endorser and the message. Lay endorsers can generally be characterized as the anonymous voice-over in audio and video ads. In such cases, the target audience may not visualize an explicit person as endorser, but may treat the speaker as the voice of the advertiser announcing the advertiser’s position. Celebrities are defined as individuals who are known to the public as an actor, sports figure, or entertainer for his or her achievements in areas other than that of the product class endorsed. Celebrities used as endorsers are in general found to be attractive and likeable by the audience. The term celebrity itself need not exclude individuals who may be controversial or disliked by the general population for example MS Dhoni for Pepsi, as long as they are used carefully to convey a certain image. Pepsi has for example always promoted its drinks to the younger generation and therefore Dhoni fits into that model even though her personal characteristics. Celebrities can also be fictional, developed by advertisers to be used as spokespersons for their brand. Friendly personifications of animals or fantasy characters character are Kellogg’s Tony the Tiger and the Energizer Bunny. The three categories of endorsers are not mutually exclusive. Sustained and effective use of lay endorsers over time may make them celebrities in their own right way. Also some individuals could belong to more than one category depending on the product they endorse. Because sport celebrities frequently endorse sport equipment as well as other 35 | P a g e    

ASB, NOIDA 

can have a wide appeal across ages, ethnic groups and nationalities. Good examples of fictional

SUMMER PROJECT*2008-11   

products, there may be an especially large overlap in classifying endorsers from the world of sports as experts or celebrities. Based on the discussion above it shows that endorsers from all the three categories can be classified as celebrities due to the circumstances. According to Belch & Belch more than 50 percent of all TV commercials feature celebrities, and advertisers pay hundred s of millions of dollars for their services Endorsement is a channel of brand communication in which a celebrity acts as the brand’s spokesperson and certifies the brand’s claim and position by extending his/her personality, popularity, stature in the society or expertise in the field to the brand. In a market with a very high proliferation of local, regional and international brands, celebrity endorsement was thought to provide a distinct differentiation. But over the years, many aspiring brands in Asia have jumped on to this celebrity endorsement bandwagon. Even though endorsements have taken on a quasi-industry stature, there is hardly any hugely successful collaboration as those of Nike’s.

ASB, NOIDA 

There are many reasons for such a happening. The next section addresses this issue.

36 | P a g e    

SUMMER PROJECT*2008-11   

3.2 Essentials of celebrity endorsements The goal of advertising is to present information to potential customers. This information, it is hoped, will result in customer adopting more favorable attitudes toward the advertised product or service. These attitudes, in return should result in a greater probability of the customer purchasing the advertised product or using the service than if customers had not been exposed to the advertisement. The reason why companies should use celebrity endorsers that celebrities are effective endorsers because of their symbolic inspirational reference group association. Reference groups provide points of comparisons through which the consumer may evaluate attitudes and behavior . One of the reasons for using celebrity endorsement depends on the characteristics of the audience. The use of celebrity is probably more effective in low – involvement conditions, such as buying cologne. When buying a product with high involvement conditions celebrity endorsement wouldn’t be that effective. When buying high involvement products the customer often wants information about the product instead of famous people that endorse it. Celebrity endorsement is a good way to enter foreign markets, because celebrities with global popularity can help a company to reach out with a message over the whole world. This is because celebrities often have the same image over the whole world and by that they can help companies break through the barriers when it comes to cultural roadblocks such as time, space, language, relationships, power, risk, masculinity, femininity . Celebrities have the potential to hold viewers’ attention and penetrate the clutter of brief and numerous advertising spots that compete for the audience attention. Celebrities can be chosen to endorse a new product since this strategy can pay huge dividends by giving This is because the use of a famous person

makes it easier to reach consumers’ attention. Celebrities can be hired when positioning strategies has failed to reach interest from consumers. Hiring a celebrity endorser can give the product the new desired position on the market.

37 | P a g e    

ASB, NOIDA 

products instant personality and appeal.

SUMMER PROJECT*2008-11    Risks in celebrity endorsement 

There are not only benefits when it comes to celebrity endorsement; there are several risks involved for companies that use celebrity endorsers. Controversial celebrities may do as much or more to alienate customers as they do to attract them. The company that chooses to use celebrity has no control over the celebrities future behavior. Any negative news about a celebrity may reduce the celebrity’s allure, and therefore the appeal of the brand the celebrity has endorsed. When a star is on the rise, the media will glorify him or her; when he or she is on a slump, the media seem to gloat over it. Problem arise when celebrities are involved in incidents that change, or even damage his or her reputation. This can be everything from accidents that hinder the endorser to perform to exposure for substance abuse. It has been shown that negative information about a celebrity endorser not only influences consumers’ perception of the celebrity but also the endorsed product . There are several examples of this and one of them are Pepsi and Michael Jackson, which had endorsement contract, but after the child molestation allegations Pepsi instantly terminated the contract . there are many potential risks in celebrity endorsements as a part of the company’s market communication campaigns. The benefits of celebrity endorsement can reverse markedly if the celebrity suddenly change image, drop in popularity, get into a situation of moral turpitude, lose credibility or overshadow the endorsed products. It is important for companies to do a genuine research before selecting celebrity to reduce the risks that is involved within celebrity endorsement. It is very important that companies chose celebrities that induce credibility and attractiveness towards the target audience. Based on the discussion above there are benefits that induce companies to use celebrity endorsement in their promotion activities but there are also risks that come with it.

Even though to an observer it may seem that Nike’s success is totally based on Tiger Wood’s association with the brand, nothing can be far from the truth. As a brand, Nike has established a very strong brand identity and a brand personality over the years. What Nike did was to use celebrity endorsement as one of the main channels of communicating its brand to a highly focused set of customers. So, Nike’s association with Tiger Woods was one of the parts of an 38 | P a g e    

ASB, NOIDA 

 

SUMMER PROJECT*2008-11   

entire branding process that Nike has been practicing consistently. Contrary to this, most of the brands in Asia that have used celebrity endorsements have used it as the main brand building tool. Before any brand signs on a celebrity, they should consider three main aspects. ♣

Attractiveness of the celebrity: This principle states that an attractive endorser will have a positive impact on the endorsement. The endorser should be attractive to the target audience in certain aspects like physical appearance, intellectual capabilities, athletic competence, and lifestyle. It has been proved that an endorser that appears attractive as defined above has a grater chance of enhancing the memory of the brand that he/she endorses.

♣

Credibility of the celebrity: This principle states that for any brand-celebrity collaboration to be successful, the personal credibility of the celebrity is crucial. Credibility is defined here as the celebrities’ perceived expertise and trustworthiness. As celebrity endorsements act as an external cue that enable consumers to sift through the tremendous brand clutter in the market, the credibility factor of the celebrity greatly influences the acceptance with consumers.

♣

Meaning transfer between the celebrity and the brand: This principle states that the success of the brand-celebrity collaboration heavily depends on the compatibility between the brand and the celebrity in terms of identity, personality, positioning in the market vis-à-vis competitors, and lifestyle. When a brand signs on a celebrity, these are some of the compatibility factors that have to exist for the brand to leverage the maximum from that collaboration.

Even though these three major principles must be adhered to by companies, practically it might be difficult to find celebrities that satisfy all these three conditions. Depending on the nature of the brand and the kind of product being used, companies can selectively emphasize one factor

 

39 | P a g e    

ASB, NOIDA 

over the other.

SUMMER PROJECT*2008-11   

Theories  Factors inducing choice of celebrity as company’s promotion strategy 

McCracken’s meaning transfer model  

McCracken (1989)

has developed the meaning transfer

model,

which is a rich and

comprehensive description of the meaning movement and the endorsement process. The central premise of the meaning transfer model is that a celebrity encodes a unique set of meanings that can, if the celebrity is well used, be transferred to the endorsed product. The model is built upon the more general process of meaning transfer and consists of three stages. In the first stage ”culture”, the meaning exist in the celebrities themselves. In stage two ”endorsement”, the meaning is transferred when the celebrity enters into an advertisement with a product. Some of the meanings of the celebrity are now also meanings of the product. In

the third and final stage ”consumption”, the meaning moves from the product to the

Stage 1: According to McCracken (1989) celebrities are very different from anonymous models (or anonymous actors) that are normally used to bring meanings to the advertisement. Celebrities deliver meanings of extra subtlety, depth and power. It is clear that advertisements can 40 | P a g e    

ASB, NOIDA 

consumer.

SUMMER PROJECT*2008-11   

undertake meaning transfer without the aid of celebrities. Anonymous actors and models are charged with meaning, and obviously, they are available at a fraction of the cost. The question is then, why celebrities should be used for an advertisement. How does the celebrity “add value” to the meaning transfer process? What special powers and properties does the e celebrity bring to the advertisement, to the product, and, finally to the consumer?

Celebrities offer all

these meanings with special precision. Celebrities also offer a range of personality and lifestyle meanings that a model cannot provide. Finally, celebrities offer configurations of meaning that models can never possess. According to McCracken (1989) it is proven that celebrities are more powerful endorsers When compared to anonymous actors and models. Celebrities have particular configurations of meanings that cannot be found elsewhere and that makes them more powerful media than anonymous actors and models. Celebrities evoke the meanings in their

persona with

greater vividness and clarity. Celebrities draw these powerful meanings from the roles they assume in their television, movie, military, athletic, and other careers.

Indeed, these

careers act very many like large advertisements, as Stage 1 of the figure shows. Each new dramatic role brings the celebrity into contact with a range of objects, persons, and contexts. Out of these objects, persons, and contexts are transferred meanings that then reside in the celebrity. When the celebrity brings these meanings into an advertisement, they are, in a sense, merely passing along meanings with which they have been charged by another meaning transfer process.

Stage 2: It can be said that the choice of particular celebrities are based on the meanings they symbolize and on a sophisticated marketing plan. Once the celebrity is chosen, an advertising campaign must then identify and deliver the Meanings to the product. It must capture all the meanings it wishes to obtain from the celebrity and leave no relevant celebrity. By that, care must be taken to see that these unwanted meanings are kept out of the evoked set. To accomplish that, the advertisement will be filled with people, objects, context, and a copy that have the same meaning as the celebrity. The advertisement will sometimes operate on the meanings of the celebrity, and may even modestly help them 41 | P a g e    

ASB, NOIDA 

meanings unused. Furthermore, it must capture only the meanings it wishes to obtain from the

SUMMER PROJECT*2008-11   

change and celebrities have been known to exploit this effect by choosing their endorsement to tune their image . McCracken continues to say that the advertisement must be designed to suggest the essential similarity between the celebrity and the product so that the consumer will be able to take the last step in the meaning transfer process. In theory, copy testing is used to measure whether the advertisement succeeds in this regard. When assurance is forthcoming, the second Stage of transfer is complete and the advertisement is put before the consumer. The consumer suddenly sees the similarity between the celebrity and the product, and is prepared to accept that the meaning in the celebrity is in the product .  Stage 3: Consumers constantly survey the object world for goods with useful meanings. They use them to furnish certain aspects of the self and the world. The material world of consumer goods offers a vast inventory of possible selves and thinkable worlds. Consumers are constantly rummaging here. This final stage of the transfer process is complicated and sometimes difficult. The meaning of the object does not merely lift off the object and enter into the consumer’s concept of self and word. By this way,

no automatic transfer

of meaning nor any automatic

transformation of the self. Celebrities play a role in the final stage of meaning transfer because they have created the self. They have done so in public, in the first stage of the meaning transfer process, out of bits and pieces of each role in their careers. The entire world has watched them take shape Consumers have looked on as celebrities have selected and combined the meanings contained in the objects, people, and events around them. The self created is almost always attractive and accomplished and celebrities build selves well. The constructed self makes the celebrity a kind of exemplary, inspirational figure to the consumer. Consumers are themselves constantly moving symbolic properties out of consumer goods into their lives to construct aspects of self and world. They have done in Stage 1 what the consumer is now laboring to do in Stage 3 of the meaning transfer model.   McCracken argues that this, in a wide aspect, advocate how celebrity endorsement operates as a process of meaning transfer. It is a review of each of the three stages in this process, considering 42 | P a g e    

ASB, NOIDA 

Celebrities are proof that the process works. Celebrities have been where the consumer is going.

SUMMER PROJECT*2008-11   

in turn how meaning moves into the persona of the celebrity, how it then moves for m the celebrity into the product, and finally how it moves from the product into the consumer. Therefore celebrities are, by this account, the key player s in the meaning transfer process.

Erdogan’s source credibility model The source credibility model is based on the premise that the effectiveness of a message depends on the perceived level of expertise and trustworthiness in an endorser. Information from a credible source,

for example a celebrity, can influence beliefs, opinions, attitudes and/or

behavior through a process called internalization, which occurs when receivers accept a source influence in terms of their personal attitude and value structures. Audiences are likely to perceive a source as an expert. To the extent they perceive the source as knowledgeable about the issue. Several studies have shown that it perceives as more knowledgeable than itself on the issue. Trustworthiness is the willingness of the source to make honest claims. A source is likely to make an honest claim if it has no vested interest in the outcome or is not under pressure to slant the evidence. Buyers would consider most advertisers to have a vested interest in stating the claims of their products. By choosing an independent spokesperson in an ad helps to reduce this perceived bias. However, audiences generally know that spokespersons are paid. The effectiveness of the endorsement then depends on whether the audience’s prior perception of the endorser as trustworthy over comes any perceived bias that arises from the audience’s knowledge of payment. If the receiver of an ad’s message finds the source of the ad sufficiently credible, they will adopt the opinion or attitude and then integrate with the new opinion or message with their belief system. As mentioned earlier this process is called internalization. 

ASB, NOIDA 

 

43 | P a g e    

SUMMER PROJECT*2008-11   

Benefits of using celebrity endorsement  ♣ Increased attention Today it is easier for consumer to choose what advertise commercials they want to see by changing the channel on the TV or record TV programs without commercials. It has become more important for companies to get consumer s attention and get them to stay and watch the advertisement . Therefore it is a good way to use celebrity’s endorsement because celebrities have the capacity to hold viewers attention and penetrate the clutter of brief and numerous advertising spots that compete for audience attention. Celebrities also makes the advertise stand out from the rest and therefore improving the communicative ability by cutting through excess noise in a communication process.

♣ Image polishing If a company’s image has suffered and is going in the wrong direction others that the companies had in mind, celebrity endorsement can be a good way to polish the image of the company since the celebrities own image which is known by the public will be transferred to the product an in that way give the product or brand a new image.

When introducing a new brand or product a company can choose to make the new product designed around the personality of a celebrity. This is a good way to receive instant personality and appeal. When the product is launched the consumer immediately understands the image of the celebrity and pushes that image over to the product. 44 | P a g e    

ASB, NOIDA 

♣ Brand introduction

SUMMER PROJECT*2008-11   

♣ Brand repositioning If the positioning of a product or brand does not work as the company had hoped for celebrity endorsement can be a good way to repositioning the product or brand by giving the brand a new image through the endorser.  

ASB, NOIDA 

 

45 | P a g e    

SUMMER PROJECT*2008-11   

Risks involved in celebrity endorsement. 

In this section I will present theories that explain what kinds of risks that celebrity endorsement can bring to the company that uses it.

♣ Negative celebrity information One of the risks of using celebrity endorsements is that the celebrity hired for the process can receive negative information or publicity. Negative information can be spread from the endorser to the company and by that way affect the company in a negative way. This is because companies want their consumers to associate the brand with the e celebrity. When negative information about the celebrity comes out, this may lower the evaluation of the celebrity, which in return reflects back to the endorsed brand through the associative link established between celebrity and company.

♣ Overexposure and overuse Overexposure is an important issue because when celebrities are famous they

often

endorse several products. If a celebrity’s image ties in with several different brands, the connection between the celebrity and a specific brand becomes blurry and the distinction between them disappears. It is negative when celebrities endorse several products because this negatively influences consumer’s perception of endorser credibility and likeability and the celebrity stands for, the consumer also starts to question if the celebrity really likes the brand or if it is only doing it because of the money. It is important for companies not to overuse celebrity endorsement because this have the same affect as using to a celebrity that is endorsing several different products.

46 | P a g e    

ASB, NOIDA 

attitude towards the add Because the consumer has a hard time remembering what brand the

SUMMER PROJECT*2008-11   

♣ Overshadowing

Overshadowing is also an important issue because consumers might focus their attention on the celebrity instead of the product that is being promoted. This often occurs when celebrities are endorsing multiple products.

Therefore it’s important that the celebrity

spokesperson will attract attention and enhances the sales message without overshadowing the product. Theories states that overshadowing occurs when companies tries to establish relationships (associative links) between stimuli that already have a strong relationship with other stimuli. Over shadowing occurs when the favorable stimulus (celebrity endorser ) occurs in the presence of multiple other stimuli that which all compete to form a link with the favorable stimulus (celebrity endorser). The company certainly intends for an associative link to develop between the celebrity and the endorsed brand, instead the celebrity endorser is most likely to build a link with the predominant stimulus, which might not be the featured brand in the ad execution.

♣ Investment risk

It is a big financial risk for companies to invest

in celebrity endorsement. The cost of hiring

celebrities as endorser s cost in some cases several millions of dollar to endorse a single product. This makes it a hug e financial risk since companies have no control over the actions of the celebrity and that the e use of a celebrity is a high-risk decision. A good choice can pay off control of how the celebrity behaves.

47 | P a g e    

ASB, NOIDA 

handsomely but it can just as easily mean a disaster f or the company since they have no

SUMMER PROJECT*2008-11   

♣ Extinction

Celebrities may disappear from the media flashlight during a market campaign, which is a disaster because this means that the attractiveness that the celebrities are suppose to bring to the company disappears . If this happens celebrities often tries to change their image to

ASB, NOIDA 

become famous again which can damage the image of the company they are endorser for.

48 | P a g e    

SUMMER PROJECT*2008-11   

Methods to reduce risk in celebrity endorsement 

This section deals with theories concerning how using models to match celebrities to products and services can prevent risks within celebrity endorsement.

♣ Reducing risk There are several ways in which companies can ensure against some surprises that can occur when using celebrity endorser s. Companies should start with a properly screening of candidates to ensure that they are buying the right image, and that the  risk with the celebrity contract is worth the potential risk for damage. Companies can also set up contracts that have a moral clause. A moral clause is a legal statement that gives companies the option to terminate a contract with a partial fee or no fee at all. These clauses often state that if the celebrity becomes involved in any situation or occurrence, which in the company’s reasonable opinion, subjects Talent or Company to ridicule, contempt or scandal.

♣ Managing celebrity endorsers

Companies must establish a link between the endorser and the brand or product. When an associative link is built between the celebrity and the brand each is then part of the other association set, a group of concepts, which are meaningfully related to a target brand. One good example of this is consumers thinking of Michael Jordan when thinking about Nike the two stimuli is a key to associative learning process, because repeated repetition of the pairing of two stimuli increases confidence that the presence of one stimulus predicts the presence of the other stimulus. Within a celebrity endorser context, repeated pairings of the endorser, increases consumer’ s recognition that the brand is a good predictor of the 49 | P a g e    

ASB, NOIDA 

and consumer thinking about Nike when thinking of Michael Jordan. Repeated pairing of

SUMMER PROJECT*2008-11   

presence of the celebrity, strengthening the link between the brand and the celebrity. Companies often use a celebrity endorser sporadically or opportunistically either at the whim of the client or the agency. Payback on the investment in celebrity endorsement comes from using the celebrity regularly over time. Such repetition both strengthens the associative link for those consumer already aware of the of the celebrity endorsement as well increase the pool of consumer who begin to become aware of the link between the brand and the celebrity. If companies don’t use the chosen celebrity consistently it will weaken the benefit from using the endorser.

♣ The source attractiveness model

The source attractiveness is a model that has been explained by several authors through the years. The source attractiveness model posits that the acceptance of a message depends on the attractiveness of the source, which in turn depends on three central attributes: familiarity, likeability, and similarity. Familiarity is the audience’s knowledge of the source because of prior exposure to it. Likeability is the audience’s positive regard for the source because of its physical appearance and behavior and similarity is the resemblance between the source and the receiver. The higher a source rates on each o f these attributes, the more acceptable and attractive it will be. There are two explanations to how attractiveness affects the message acceptance: Identification and conditioning. Identification means that the receiver off the message begins to see himself or herself as similar to the source because of the latter’s attractiveness. Because of that the receiver becomes willing to accept the opinions, beliefs, attitudes or behavior of the source. Conditioning means that the stimulus. When the endorser is repeatedly associated with the brand, the attractiveness of the endorser is supposed to pass to the brand.

50 | P a g e    

ASB, NOIDA 

endorser is an unconditioned stimulus, and the brand or product would b e the conditioned

SUMMER PROJECT*2008-11   

♣ Match up To create an effective endorsement between a celebrity and a brand it is important that there is brand–celebrity congruency when it comes to facilitate the development of an associative link. When there is a perceived fit between the brand and celebrity, there is a greater probability of building an associative link. Because a poor fit between celebrity and brand is suggested the primary cause of failed celebrity endorsement. The greater the perceived fit between the celebrity and the brand the more quickly the associated link between the two can be expected to develop. The choice of celebrity should fit with the association the brand either currently has or plausible could have. When the choice of associations the company believes the celebrity has are associations that the brand’s target associations for any given celebrity. It is therefore necessary, to test the possible use of any celebrity fits current associations,

then

the

celebrity

serves

to

reinforce

existing

associations. If

the

associations/image of the celebrity fit the desired associations that the brand could plausibly have, then the celebrity serves to create association for the brand. However there is not only important that the celebrity has a fit towards the brand and image, companies must also consider that the celebrity has a fit towards the target audience. It is important that the audience actually has of the celebrity. Different groups of people may have different celebrity with the brand’s target group to ensure that the image/associations the celebrity has in the minds of the tar get audience are meaningful, positive and consistent with the company’s expectations.

♣ Overshadowing

single- minded in communicating the brand-celebrity pairing. The brand and the celebrity should be the two strongest elements in the ads Ad executions which are cluttered with superfluous exceptional devices, distract from the brand celebrity pairing is weakening the potency of the celebrity endorser. The like hood of forming an associative link between the 51 | P a g e    

ASB, NOIDA 

The way to decrease the chances of overshadowing the advertising executions should be

SUMMER PROJECT*2008-11   

celebrity and the brand increases when there are few other competing elements in the advertisement.

♣ Overexposure

When celebrities are endorsing several products blocking can occur which refers to the reluctance of a favorable stimulus (celebrity endorser) to form a strong link with another stimulus when the favorable stimulus (celebrity endorser) already has a strong association with a previous stimulus. When a celebrity already is strongly associated with a brand they will not form associative links with other brands. Therefore companies should avoid using celebrities that are already endorsing several other brand s to which they have a strong connection.

♣ Extinction

To reduce the risk of extinction companies should expand their use of celebrity endorsement. Because it is unrealistic to expect that every time a consumer encounters a brand the celebrity endorser image also will be present. Therefore companies should work to get endorser s more integrated into the marketing mix. Although most commonly used in advertising, celebrity endorsers can be effective in promotion activities, such as giving away related items or trips, which tie into the celebrity. The celebrity could also be used at large trade shows,

ASB, NOIDA 

national sales meetings and other significant publicity events.

52 | P a g e    

SUMMER PROJECT*2008-11   

♣ Financial risk

Companies must decide how cost effective their choice of celebrity is. The celebrity with the highest potential is often also the most expensive one. Companies should therefore look for a lesser-known person that fits into the message of the brand and appeals to the target audience.

♣ Q-ratings

It is important that consumer s sees the celebrity as person with credibility and attractiveness and that the celebrity is an effective media person. For celebrity to be credible, consumers must perceive them to be trustworthy and have the expertise to speak about a product or service. The reasoning is that the more credible and attractive a celebrity is the more persuasive he or she will be as endorser. Therefore companies are starting to use the Q- value to estimate how good their brand is together with a specific celebrity endorser. To find out how effective an endorser might be questionnaires are sent out to individuals that are asked to answer two simple questions: Have you heard of this person? The second question is: I f you have, do you rate him or her; poor, fair, good, very good or one of your favorites’? The Q rating is then calculated by dividing the percentage of the total sample rating the celebrity ‘as one of your favorites’ by the percentage of sample who knows the celebrity. A celebrity may not be widely recognized but he or she can still attain a high Q rating as individuals who do recognize the celebrity also likes the celebrity. On the other hand a celebrity may be widely recognized but still have low Q rating since the respondents may not or her . Q ratings are a good way for companies to avoid hiring big celebrities that aren’t popular among

their target audience. This also makes Q ratings a good method to filter

celebrities for a company.    

53 | P a g e    

 

ASB, NOIDA 

like them. The Q rating answers the question of popularity among those familiar with him

SUMMER PROJECT*2008-11   

4. Publicity  Publicity is the deliberate attempt to manage the public's perception of a subject. The subjects of publicity include people (for example, politicians and performing artists), goods and services, organizations of all kinds, and works of art or entertainment. From a marketing perspective, publicity is one component of promotion. The other elements of the promotional mix are advertising, sales promotion, and personal selling. Promotion is one component of marketing. There is a fine line between marketing and publicity, but keep in mind that they are two different things. They should work hand in hand. Marketing considerations include such things as the price of your product, and its title or name, and how to distribute it. Marketing should begin long before the book or product reaches the hands of the public. Publicity is the processes of letting people know that you’re marketing some-thing. Not only must the company relate constructively to customers, suppliers, and dealers but it must also relate to a large number of interested publics. A public is any group that has an actual or potential interest in or impact on a company’s ability to achieve its objectives. Public Relation (PR) involves a variety of programs designed to promote or protect a company’s image or its individual products. Most companies have a public relation department that monitors the attitudes of the organization’s publics and distributes information and communications to build goodwill. The

ASB, NOIDA 

PR departments perform the following five functions:

54 | P a g e    

SUMMER R PROJECT* *2008-11   

   m puublic relationns (MPR) to directly suppport corporaate or Many companies aree turning to marketing p an nd image making. The old o name forr MPR was publicity. MPR M goes beeyond product promotion simple puublicity and plays an impportant part in the follow wing tasks:

A Assisting in the launch of new prooduct A Assisting in repositioning a markeet product Innfluencing specific target group D Defending products p whhich have enncountered public probblems

As the power p of mass m advertissing weakenns, marketinng managerss are turningg more to MPR. M Companiies found it particularly effective inn building aw wareness andd brand knoowledge, for both new andd established d products. MPR is allso effectivee in blanketting local communities c s and reaching specific gro oups. In seveeral cases MP PR proved too be more coost effective than advertiising. Nevertheeless, it mustt be planned jointly withh advertisingg. Gillette is a trendsetterr here. 55 | P a g e    

ASB, NOIDA 

B Building thee corporate image i in a way w that reflects favorrably on its product

SUMMER PROJECT*2008-11     

In considering when and how to use MPR, management must establish the marketing objectives, choose the PR messages and vehicles, implement the plan carefully, and evaluate the results. The main tools of MPR are described as under:  

•

Publications

•

Events

•

Sponsorship

•

News

•

Speeches

•

Public- service activities

•

Identify Media   

The advantages of publicity are low cost, and credibility (particularly if the publicity is aired in between news stories like on evening TV news casts). New technologies such as weblogs, web cameras, web affiliates, and convergence (phone-camera posting of pictures and videos to websites) are changing the cost-structure. The disadvantages are lack of control over how your releases will be used, and frustration over the low percentage of releases that are taken up by the media. Publicity draws on several key themes including birth, love, and death. These are of particular interest because they are themes in human lives which feature heavily throughout life. In television serials several couples have emerged during crucial ratings and important publicity times, as a way to make constant headlines. Also known as a publicity stunt, the pairings may or

     

56 | P a g e    

ASB, NOIDA 

may not be truthful.

SUMMER PROJECT*2008-11   

ESTABLISHING OBJECTIVES MPR can build awareness by placing stories in the media to bring attention to a product, service, person, organization, or idea. It can hold down the promotion cost because MPR costs less than direct- mail and media advertising. MPR is increasingly borrowing the techniques and technology of direct- response marketing to reach target audience members one-on-one. CHOOSING MESSAGES ANS VEHICLES The MPR manager must identify or develop interesting stories about the product. PR ideas include hosting major academic conventions, inviting expert or celebrity speakers, and developing news conferences. Each event is an opportunity to develop a multitude of stories directed at different audiences. IMPLEMENTING THE PLAN AND EVALUATING RESULTS MRP’s contribution to the bottom line is difficult to measure, because it is used along with other promotional tools. The three most commonly used measures of MPR effectiveness are number of exposures; awareness, comprehension, or attitude change; and contribution to sales and profits. But the publicist cannot wait around for the news to present opportunities. They must also try to create their own news. Examples of this include: Contest Art exhibitions Event sponsorship Make an analysis or prediction Conduct a poll or survey Issue a report Take a stand on a controversial subject 57 | P a g e    

ASB, NOIDA 

Arrange a speech or talk

SUMMER PROJECT*2008-11   

Arrange for a testimonial Announce an appointment Invent then present an award Stage a debate Organize a tour of your business or projects

ASB, NOIDA 

Issue a commendation

58 | P a g e    

SUMMER R PROJECT* *2008-11   

5.  Empir E rical  Data:  Casee  Stu udy  of   Pepsi is a soft drink produced and a manufacctured by PepsiCo. It is sold in manny places suuch as m retail storres, restauraants, schools, cinemas annd from vendding machinnes. The drinnk was first made in the 1880s by ph harmacist Caaleb Bradhaam in New Bern, Nortth Carolina. The brandd was trademarrked on Junee 16, 1903. There have been manyy Pepsi variaants produceed over the years since 1898. PepsiCo o, Incorporaated (NYSE E: PEP) is a Fortune 500, 5 Americcan multinattional corporatiion headquarrtered in Purrchase, NY with w interestts in manufaccturing and marketing m a wide variety of o carbonateed and non-ccarbonated beverages, b a well as salty, as s sweet and grain-bbased snacks, and a other foods. Besides the Pepsi-Cola brandss, the compaany owns thhe brands Quuaker Oats, Gaatorade, Frito o-Lay, SoBee, Naked, Trropicana, Coopella, Mounntain Dew, Mirinda andd 7up (outside the t USA). Indra Kriishnamurthy y Nooyi, chief executivee of PepsiCoo since 2006, has focused on maintaaining the comppany's leadeership in thee snack food industry by b being onn the forefroont of markketing healthier snacks and striving forr a net-zero impact on the t environm ment. This foocus on healthier

psi announcced they wouuld be redessigning its loogo and re-bbranding manny of In Octobber 2008, Pep its produucts by early 2009. In 20009, Pepsi, Diet D Pepsi annd Pepsi Maax began usinng all lowerr-case fonts for name brand ds, and Diet Pepsi Max was re-brannded as Pepssi Max. The brand's bluee and red globee trademark became a seeries of "sm miles," with the t central white w band arcing a at diffferent angles deepending on the productt. Currently, as of June 2009, 2 Pepsi Wild Cherryy and Pepsi ONE 59 | P a g e    

ASB, NOIDA 

foods andd lifestyles is part of Nooyi's "Perforrmance Withh Purpose" philosophy. p

SUMMER R PROJECT* *2008-11   

are the only o productts still usingg the 2003 Pepsi P designn. Countries such as Auustralia and India continue to use the old o design on o all packagging. Diet Pepsi P Wild Cherry, C Diet Pepsi Limee, and Diet Pepssi Vanilla reeceived the redesign.

It was firrst introduced in North Carolina C in 1898 by Caleeb Bradham who made it at his pharm macy which soold the drink k which was known backk then as "B Brad's Drink"", and was laater named Pepsi P Cola possibly due the digestive enzyme e pepssin and kola nuts used inn the recipe. Bradham soought to create a fountain drink d that waas delicious and a would aid a in digestion and boosst energy. In 1903, Bradham moved m the boottling of Peppsi-Cola from m his drugsttore into a reented warehhouse. That yeaar, Bradham sold 7,968 gallons of syrup. The next year, Pepsi P was sold s in six-oounce bottles, and a sales increased to 199,848 gallonss. In 1926, Pepsi P receiveed its first loggo redesign since the original design of o 1905. In 1929, the logo l was chhanged againn. In 1929, automobile race pioneer Barney B Oldffield endorsed Pepsi-Coola in newsppaper ads ass "A bully drink...refres d shing, invigoratting, a fine bracer b beforee a race". In 1931, the Pepsi-C Cola Companny went bankkrupt duringg the Great DepressionD in large parrt due to financial losses incurred by sppeculating onn wildly flucctuating sugaar prices as a result of World W companyy went bankrrupt again. Pepsi's P assetss were then purchased p byy Charles Guuth, the Pressident of Loft Inc. Loft was a candy manufacturer m r with retail stores that contained c sooda fountains. He oca-Cola at his h stores' fouuntains afterr Coke refussed to give him h a discouunt on sought too replace Co syrup. Guuth then had d Loft's chem mists reformuulate the Peppsi-Cola syruup formula.

60 | P a g e    

ASB, NOIDA 

A were sold s and Royy C. Megarggel bought thhe Pepsi traddemark. Eighht years later, the War I. Assets

SUMMER R PROJECT* *2008-11   

PepsiCo gained entry y to India inn 1988 by crreating a joiint venture with w the Punnjab governm mentC ( (PAIC) and Voltas Indiaa Limited. This T joint veenture owned Punjab Agro Industrial Corporation marketedd and sold Lehar Pepsi until u 1991, when w the usee of foreign brands b was allowed; a PeppsiCo bought out o its partneers and endeed the joint venture v in 1994. 1 Otherss claim that firstly Pepsii was banned from fr import in India, in 1970, for haaving refusedd to release the list of itts ingredients and in 1993, the ban was w lifted, with w Pepsi arriving onn the markeet shortly affterwards. These T controverrsies are a reminder of "India'ss sometimess acrimonioous relationnship with huge multinatiional compaanies." Indeeed, some arggue that PepssiCo and Thhe Coca-Cola Company have "been maajor targets in i part becaause they aree well-knownn foreign coompanies thaat draw plennty of attention." In 1961 Pepsi had redefined r its target auddience, recognizing the importancee of securingg the neration as consumers, c w the sloggan “Now Itt’s Pepsi, forr those who think with younger post-war gen young” defining d youth as a sttate of mindd rather thaan actual agge. Over thhe years, Peepsi’s campaignns continued to evolvee in order to capture the post-waar baby booom demograaphic constantlly revolving advertising campaigns around the notion n of yoouthful imaggery and lifestyle. Althoughh in the 1950 0’s Pepsi had used Hollyywood starleet Joan Craw wford at the forefront off their companyy, it wasn’t until u 1984 when w Pepsi used celebrityy, Michael Jackson J whoo also appealled to their dem mographic, that t the marrketing poweer of a celebbrity was nooticed by the company. This idea provved to be ex xtremely successful and since then, it’s i no secreet that Pepsi pay the ‘hoottest’ celebritiees at the tiime to appeear in glam morous, highhbudget coommercials. When Peepsi came in India, it hadd already creeated havoc in i internatioonal

markeet

with

t the

Michaeel

Jacksonn’s

advertiseement with one o the greaatest supersttar already as a its spokees person, it cashed in Amir A Khan, Juhi J Chawalla, with seveeral ads whiich focused mainly on the t age grouup of 16-25. Pepsi has been b known to target yooung audiencce where cellebrity have huge impacct and where the there is a large markeet for their drrink. Pepsi used u target marketing m inn the hopes that t a celebrity’s fan base will be lureed and conssume their favored fa celebbrity’s ‘colaa of choice’ with 61 | P a g e    

ASB, NOIDA 

Remo Feernandez and d Mahima Chaudhary. C T They came up u

SUMMER PROJECT*2008-11   

them. Celebrity based advertising works because of society’s subconscious desire to emulate celebrity image and lifestyle, "There's a fantasy — we almost want to live their lives," said brand consultant Michael Watras. Using celebrities at the forefront of your company is risky business, as not only can celebrities become superseded by another celebrity’s stardom overnight, but the continual ‘capture and release’ process of obtaining the celebrity in their prime and hiring a new ‘celeb’ who has since become the ‘hottest’ tabloid target, prompts high acquisition costs for Pepsi to not only fund the advertising campaign, but to secure new consumers. Where a new company would crumble under this sort of venture, Pepsi, an established multi-billion dollar company has a proven track record of succeeding using this high-cost marketing idea. This we can see also. David Beckham, Britney Spears, Shakira, Enrique, Christina Aguilera, Janet Jackson and Maria Carey were all picked up by Pepsi when they were at the top of their career. Even in India this fact can be seen, after starting up with Amir Khan as its frontline endorser it changed it to the new fame: Shahrukh Khan who got into the limelight due to his craze in the young audience. Pepsi continued with him for over a decade till recently when his contract was not extended as Pepsi believed that he did not fit into their “Youngistan” campaign. Besides Shahrukh Khan, Pepsi also brought in Indian Cricketers like SachinTendulkar, Mohammed Azzarudin, Ajay Jadeja, Kapil Dev, Sourav Ganguly, and Rahul Dravid and lot of other Indian celebrities like Amitabh Bachan, Ashwariya Rai, Kajol, Rani Mukherjee, Priyanka Chopra, Saif Ali Khan, Karrena Kapoor and Preity Zinta. The new Youngistan campaign holds the newer generation stars like Ranbir Kapoor, Deepika Padukone, John Abraham, M S Dhoni, Yuvraj Singh and almost whole of the Indian Cricket Team. In Pakistan, Pepsi sponsors the Pakistan cricket team and many Pakistani celebrities and personalities have been spokespersons for the brand includding, Junaid Jamshed, Shoaib Akhtar,

Pepsi has its biggest market in the Indian Subcontinent therefore it keeps in mind the that celebrities have great influence on the people’s mind and thus invest a lot of amount in cashing on such big names.

62 | P a g e    

ASB, NOIDA 

Bob Woolmer, Younus Khan, Kamran Akmal, Adnan Sami, Reema Khan, Call, and Vital Signs.

SUMMER PROJECT*2008-11   

Interestingly Pepsi does not disclose product pricing in any of its marketing campaigns. “Endorsement of a product/service by a celebrity gives out the message that it is as authentic and credible as the celebrity is. The urge that people have of enjoying the same recognition and status like their favorite stars is often the main reason for the increasing use of celebrities for products/services endorsement. The celebrity endorsement of the product, rather than its price, is intended to speak for its worth. This means that the price does not need to be considered as a factor in determining quality. Only recently it started giving out its price in the Pepsi My Can Advertisement. To assist with the “celebrity” theme, Pepsi achieves optimum positioning of advertising, by placing vending machines and Pepsi fridges in areas where their target market socialises and interacts. This strategy is designed to put Pepsi at a distinct advantage in terms of competing for the attention of a target market, whose obsession with celebrity culture ensures exposure. The intended market for such campaigns includes both males and females between the ages of 15 to 25 and thus, product availability is dependant on such demographics. For this reason Pepsi products can be found in such locations as cyber cafés, high schools and fast food outlets. This is also demonstrated by the company’s focus on sporting celebrities. Pepsi’s celebrity marketing transcends the various advertising mediums, as Pepsi will use the celebrities in not only a high budget television advertisement, but also for print and radio ads and in some cases even licensing an artist’s song which in-turn becomes the ‘Pepsi song’ for that particular campaign. Some famous Pepsi advertising campaign involving celebrities were: 1961-1963: "Now It's Pepsi for Those Who Think Young" 1963-1967: "Come Alive, You're in the Pepsi Generation". 1969-1975: "You've Got a Lot to Live, and Pepsi's Got a Lot to Give" 1977-1980: "Join the Pepsi People (Feeling Free)" 1980-1981: "Catch That Pepsi Spirit" David Lucas composer 1981-1983: "Pepsi's got your taste for life" 1983-1984: "Pepsi Now! Take the Challenge!" 63 | P a g e    

ASB, NOIDA 

1975-1977: "Have a Pepsi Day"

SUMMER PROJECT*2008-11   

1984-1991: "Pepsi. The Choice of a New Generation" (commercial with Michael Jackson, featuring Pepsi version of Billie Jean) 1986-1987: "We've Got The Taste" (commercial with Tina Turner) 1987-1990: "Pepsi's Cool" (commercial with Michael Jackson, featuring Pepsi version of Bad) 1990-1991: "You got the right one Baby UH HUH" ( sung by Ray Charles for Diet Pepsi ) 1991-1992: "Gotta Have It"/"Chill Out" 1992-1993: "Be Young, Have Fun, Drink Pepsi" 1993-1994: "Right Now"Van Halen song for the Crystal Pepsi advertisement. 1994-1995: "Double Dutch Bus" Pepsi song sung by Brad Bentz. 1995: "Nothing Else is a Pepsi" 1995-1996: "Drink Pepsi. Get Stuff." Pepsi Stuff campaign 1996-1997: "Pepsi:There's nothing official about it" 1997-1998: "Generation Next" - with the Spice Girls. 1998-1999: "It's the cola" (100th anniversary commercial) 1999-2000: "For Those Who Think Young"/"The Joy of Pepsi-Cola" (commercial with Britney Spears/commercial with Mary J. Blige) 1993-1996: "Aazadi dil ki" 2003: "It's the Cola"/"Dare for More" (Pepsi Commercial) 1997-2000: "Yeh Pyas Hai Badi" 2000- 2003: Yeh Dil Mange More 2004: Oye bubbly 2006-2007: "Why You Doggin' Me"/"Taste the one that's forever young" Commercial featuring Mary J. Blige 2008: "Yeh hai Youngistaan Meri Jaan!" 2008: "Pepsi Stuff" Super Bowl Commercial (Justin Timberlake) 2008: "Рepsi is #1" Тv commercial (Luke Rosin) 2008: "Pepsify karo gai!" Commercial 64 | P a g e    

ASB, NOIDA 

2007-2008: "More Happy"/"Taste the once that's forever young" (Michael Alexander)

SUMMER PROJECT*2008-11   

2008-2009: "Something for Everyone." 2009-present: "Refresh Everything" and (during many commercials) "Every Generation Refreshes The World" Pepsi applied a number of publicity stunts to market its product. It has been in news for all its celebrity endorsements and the news related to it. Like the one in which Michael Jackson burnt his hair while shooting for commercial to Shahrukh Khan saying that he drinks more Pepsi then water in a day to the “What’s Up Youngistan” show on MTV to its latest contest for the World T20 Cup. Pepsi also sponsors many events like the Cricket World Cups, National Football League in USA and World Concerts. It also associates itself with many teams like Pakistan cricket team and local IPL and NBA teams etc. At times when it comes in news for bad reasons

ASB, NOIDA 

like the pesticides cases, it makes commercials and news saying it’s absolutely safe for drinking.

65 | P a g e    

SUMMER PROJECT*2008-11   

6. Data Analysis       Factors inducing Pepsi choice of celebrity endorsement as company’s promotion strategy

McCracken’s meaning transfer model stage 1 McCracken brings up meaning as one of the primary reasons why a company uses celebrities in advertising. Celebrities deliver meanings of extra subtlety, depth and power that anonymous models not deliver. They have a unique configuration of meanings that cannot be found elsewhere which makes them powerful compared to anonymous models. Pepsi’s experience is in line with theory in regard to this, but consider the image of the famous celebrities who has performed very good results in their field as the most important reason why the company uses celebrities. Pepsi fits into this theory in some aspects like lifestyle meanings; in their case the meaning comes,

as discussed earlier , from the celebrities

professional results in their sport activities and their healthy lifestyle.

The source credibility model Erdogan discusses the source credibility model, which is based on the premise that the effectiveness of a message depends on perceived level of expertise and trustworthiness in an endorser. Information form a credible source can influence and help the receivers to accept the message. In this case Pepsi has always been using celebrities who is currently in fame and popular among its target audience.

Previous research indicates that the use of celebrity endorsement depends on the underlying characteristics of the audience called audience characteristics. Pepsi targets the general public’s social insecurities and in doing so insinuates that use of the product will heighten their social status and improve their image. The celebrity marketing of Pepsi products is successful because of the influence celebrities have over the general public and in particular, Pepsi’s target market.. 66 | P a g e    

ASB, NOIDA 

Audience characteristics

SUMMER PROJECT*2008-11   

As long as consumers want to be like their favorite stars they will continue to buy the product that they endorse and since we live and have lived in a celebrity obsessed culture for some time, it looks as though Pepsi’s marketing idea will continue to be a ‘cash cow’.

Risks involved in celebrity endorsement

Negative celebrity information There is a risk that the celebrity endorser can receive negative information and publicity which can be transferred to the brand through the endorser . Pepsi has faced this problem and they have been able to manage it well for e.g.: Pepsi had to take care of their social responsibilities, when consumers were outraged over the latest celebrity to join the Pepsi team – controversial rapper Ludacris. His ‘thug’ image made consumers uncomfortable with his association with Pepsi, and as the number of consumers concerned by this was quite extensive; his advertisement was pulled off air.

Overexposure and overuse Overexposure and overuse is an important risk to consider when using celebrity endorsers. There is a risk that consumers do not see the connection between the brand and endorser if he or she is endorsing too many products. Pepsi have been using its strategy well by keep changing with time. It keeps on having new spokesperson as soon as he comes to fame and ends the contract as soon as some other person comes in frame.

Overshadowing is a risk that companies must be aware of when using celebrity endorser in marketing campaigns. This often occur when companies try to establish a link between a celebrity and company when the endorser are already sponsoring several other brands. The

67 | P a g e    

ASB, NOIDA 

Overshadowing

SUMMER PROJECT*2008-11   

over shadowing effect will result in that the consumer just sees the celebrity instead of the product. Pepsi started using celebrity endorsement as its strategy when it had already become a huge brand in itself. Due to it’s rivalry with Coca Cola it had gained its own reputation. Still the ads where made in such a manner that Pepsi were always the central point and everything else surrounding it. Investment risk Pepsi dose face a huge commercial risk but since it always uses it wisely and cash in upon good opportunity it saves a lot of money there. But they need to take such risk so as to influence their target audience. The can afford such huge investment because their only competitor is Coke. They always have to work in manner where they can get an edge over the other.

Extinction Pepsi have been very particular about it. They have kept in mind this theory and have been

ASB, NOIDA 

frequently changing their brand ambassador.

68 | P a g e    

SUMMER PROJECT*2008-11   

7. Conclusion  Q. How can the factors inducing a company’s choice of celebrity endorsement as a promotion tool be described?

Celebrity endorser s are used to increase the attention to the advertised product and break through the media noise. Companies take benefits of the positive meaning

and values provided by a

celebrity when using celebrity endorsement, and by that transfer the meaning

and

values to the endorsed products. Celebrity endorsers are used for low involvement products Use of celebrity endorsers builds up trustworthiness between the product and the celebrity.

Q. How can the risks involved for a company in celebrity endorsement be described?

The main risk with using celebrity endorsers is their indulgence in shameful activities.

are low at Pepsi. They have kept strict guidelines to avoid such elements to occur. The economic risk involved in celebrity endorsement is high, but worth it because of the attention achieved in media by using celebrity endorsers and to give competition to

69 | P a g e    

ASB, NOIDA 

The overall risk awareness of areas such as overexposure, overuse, and overshadowing

SUMMER PROJECT*2008-11   

Coca Cola. Q. How can the risk reduction methods adopted by a company in celebrity endorsement be described?

To base the choice of celebrity endorser more on trustworthiness than attractiveness. But Pepsi has a different set of ideals and it is in a different kind of market where it has to project its product attractively.

To ascertain that the celebrity endorser matches the image of the entire organization. Pepsi has to keep in mind the campaign it is running and chose a celebrity according to the demand of the campaign.

For Pepsi use of short-term legal contracts will help prevent some of the risks involved in celebrity endorsement.

The risk of overshadowing and overexposure are important factors to manage when dealing with celebrity endorsement. This is to gain as much as possible from the relationship and avoid the effect of the risks.

Using celebrity endorsers is a good way to r each a target audience since they can transfer meanings and beliefs. An extended use of the celebrity endorsers besides print media and other advertisements regarding the endorsed product is recommended since this will strengthen the associative link between the product and the endorser. 70 | P a g e    

ASB, NOIDA 

Implications

SUMMER PROJECT*2008-11   

Our research indicates that not enough evaluation is done when it comes to the choice of celebrity endorser. It is then recommended that when selecting which celebrity to sign for a sponsorship, a deeper screening of the target audience’ s perception of the values, attitudes and characteristics of the celebrity be undertaken.

When working with celebrity endorsement it is important to view and face all the e risk aspects involved in celebrity endorsement. Therefore it is important to carefully develop a strategy of how to prevent all the risk s and how to manage them if they occur.

Trustworthiness is important when selecting celebrity endorsers.

Companies are

recommended to choose celebrities that have strong connections to the product both by

ASB, NOIDA 

using the product and characteristics that match the product.

71 | P a g e    

SUMMER PROJECT*2008-11   

8. Future Prospect   

During the course of the project several questions aroused which should be dealt in future. Some of them are as follow:

Risk involved for the celebrity while endorsing any brand. Comparative research concerning how consumers perceive the celebrity endorsers against non-celebrity endorsers in Indian Market. Research

within

crisis

management

in

connection

to

celebrity

endorsement and what to do when a crisis occur . Research on cultural aspects as gender, age, religion, nationality and how celebrity endorsement is affected by these factors.  

ASB, NOIDA 

 

72 | P a g e    

SUMMER PROJECT*2008-11   

9. Appendices  

Case Study on Pepsi Vs Coca Cola Pg 609 Sales Promotions, Marketing Management by Philip Kotler. Pg 620 Direct Marketing, Marketing Management by Philip

ASB, NOIDA 

Kotler.

73 | P a g e    

SUMMER PROJECT*2008-11   

10. References   Marketing Management by Philip Kotler, Pearson Education 2003 Website: Wikipedia.org Roozen, Material paper from escp-eap.eu conferences on marketing 2008 Five thing marketers can learn from celebrity branding, from corporate –eye .com The stages of Developing advertising, form associated content article Branding celebrities brand endorsement and brand leader article from venture public .com Celebrity endorsement paper from Lulea University of technology Pepsi Celebrity endorsement, article from the free essay .com Impact of Celebrity endorsement on overall brand article from The Hindu Business Line Publicity- How to publicize your book by Suzi Prokell Shahrukh and Dhoni top brands pushes TV, May 07 2009 , The Sunday Indian

ASB, NOIDA 

Signing Film Personality by Anmol News

74 | P a g e