Celebrity Endorsement - A Case Study On Pepsi

SU
UMMM
MER
R PR
ROOJE
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. Bhhawana 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

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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?
4. What is Managing Public Relation?

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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.

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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
when describing the collected data in words.
Research Strategy
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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
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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.

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Table of Content
Sr No. Topic Page No.

1. Marketing Management 7
1.1 Introduction 7
1.2 History 10
2. Developing an Advertising Program 14
I Setting the advertising objectives 16
II Decision on advertising budget 18
III Choosing the advertising message 21
IV Deciding on media 24
V Evaluating advertising effectiveness 31
3. Celebrity Endorsement 33
3.1 A brief Introduction 33
3.2 Essentials of celebrity endorsement 37
3.3 Theories 40
4. Publicity 52
5. Empirical Data: Case Study of Pepsi 59
6. Data Analysis 66
7. Conclusion 69
8. Future Prospect 72
9. Appendices 73
10. References 74

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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.
While making an ad you should remember that consumers buy a product because they need it. So
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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.
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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
and is avvailable in 125 marketss and is thee number tw
wo brand of premium
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
problem was not diminishing
d - 175 drunnk drivers continued
c too be
arrested every
e week in
i the Repubblic.
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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.
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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.

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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.
In June 1836, French newspaper La Presse is the first to include paid advertising in its pages,
allowing it to lower its price, extend its readership and increase its profitability and the formula
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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.
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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 non-
profit 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
passage of the Communications Act of 1934 which created the Federal Communications
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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.
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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.
Marketing through the Internet opened new frontiers for advertisers and contributed to the "dot-
com" boom of the 1990s. Entire corporations operated solely on advertising revenue, offering
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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.
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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.

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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 b sent? Meedia: What media should be
messaage should be
used? Meeasurement: How shouldd the results is evaluatedd?
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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

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

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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
advertising, and the sales subsequently achieved. There are however a number of factors that can
be considered in setting the advertising budget.
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There are five specific factors to consider when setting the advertising budget. They are as
follow:
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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

may require greater expenditure on advertising to differentiate it from its competitors.
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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.
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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
track the actual advertising expenditure.
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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
four types of rewards with the three types of experience generates 12 types of advertising
message.
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For Example, the appeal “get clothes cleaner” is a rational-reward promise following results-of-
use experience. The phrase “real gusto in a great light beer” is a sensory-reward promise
connected with product-in-use experience.
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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
Gillette: The best a man can get
agency dose not likes to go to the expense of creating
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
The message’s impact depends not only on what is said, but often more important, on how it is
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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
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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 Creative Copy

7-Up is not a cola The Un-Cola (7-Up)
Milk is good for you Got Milk? (Milk industry)
Our technology can help you do almost Where do you want to go today? (Microsoft)
anything
No hard sell, just a good car. Drivers Wanted (Volkswagen)
We don’t rent as many cars so we have to do We try harder
more for our costumers
Red Roof Inns offer inexpensive lodging “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.
Larger- sized ads gain attention, though not necessarily by as much as their difference in cost.
Four-color illustration increases ad effectiveness and ad cost.
ASB, NOIDA
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
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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
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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
household is exposed to the message.
Impact (I): The quantitative value of an exposure through a given medium.

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SUMMER
R PROJECT*
*2008-11

R
Relation betw
ween producct trial
ratte and audiennce awareneess level

Relationshhip between audience

awarenesss level and exposure
e
reachh and frequenncy
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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.
Medium Advantages Limitation

Newspapers Flexibility; timeliness; good local Short life; poor reproduction
market coverage; broad quality; small “pass along’
acceptance; high believability audience
Television Combines sight, sound and High absolute cost; high clutter;
motion; appealing to the senses; fleeting exposure; less audience
high attention; high reach selectivity
Direct Mail Audience selectivity; flexibility; Relatively high cost; “junk
no ad competition within the mail” image
same medium; personalization
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Radio Mass use; high geographic and Audio presentation only; lower
demographic selectivity; low cost attention than television; no
standardized rate structure,
fleeting exposure
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Magazines High geographic and Long ad purchase lead time;

demographic selectivity; some waste circulation; no
credibility and prestige; high guarantee of position
quality reproduction; long life;
good pass along readers
Outdoor Flexibility; high repeat exposure; Limited audience selectivity;
low cost; low competition creative limitation
Yellow Excellent local coverage; high High competition; long ad
Pages believability; wide reach; low purchase lead time; creative
cost limitations
Newsletters Very high selectivity; full control; Cost could run away
interactive opportunities; relative
low cost
Brochures Flexibility; full control; can Overproduction could lead to
dramatize messages run away costs
Telephone Many users; opportunity to give a Relative high cost unless
personal touch volunteers are used
Internet High selectivity; interactive Relatively new media with a
possibilities; relatively low cost 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
inexpensive. What counts is the cost-per-thousand exposures
Given the abundance of media, the planner must first decide how to allocate the budget to major
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media type.
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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.
Micro Scheduling problem calls for allocating advertising expenditures within a short
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period to obtain maximum impact.
In launching a new product, the advertisers have to choose among ad continuity, concentration,
flighting, and pulsing.
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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
A company has to decide how to allocate its advertising budget over space as well as over time.
ASB, NOIDA
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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
consumers’ minds and heart and ultimately, a share of market.
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SUMMER
R PROJECT*
*2008-11

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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
golf before. Moreover, golf being a very elite game, it was generally considered that a brand like
ASB, NOIDA
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.
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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.
For Example
Omnicom agency Davie Brown Entertainment has created an independent index for brand
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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."
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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
can have a wide appeal across ages, ethnic groups and nationalities. Good examples of fictional
character are Kellogg’s Tony the Tiger and the Energizer Bunny.
ASB, NOIDA
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
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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.
There are many reasons for such a happening. The next section addresses this issue.
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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
products instant personality and appeal. This is because the use of a famous person
ASB, NOIDA
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.
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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
ASB, NOIDA
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
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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
over the other.
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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
consumer.
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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
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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
meanings unused. Furthermore, it must capture only the meanings it wishes to obtain from the
ASB, NOIDA
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
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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.
Celebrities are proof that the process works. Celebrities have been where the consumer is going.
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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
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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
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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.
♣ Brand introduction
ASB, NOIDA
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.
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♣ 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


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
attitude towards the add Because the consumer has a hard time remembering what brand the
celebrity stands for, the consumer also starts to question if the celebrity really likes the
ASB, NOIDA
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.
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♣ 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
handsomely but it can just as easily mean a disaster f or the company since they have no
control of how the celebrity behaves.
ASB, NOIDA
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♣ 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
become famous again which can damage the image of the company they are endorser for.
ASB, NOIDA
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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
and consumer thinking about Nike when thinking of Michael Jordan. Repeated pairing of
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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


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
endorser is an unconditioned stimulus, and the brand or product would b e the conditioned
stimulus. When the endorser is repeatedly associated with the brand, the attractiveness of
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the endorser is supposed to pass to the brand.
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♣ 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
The way to decrease the chances of overshadowing the advertising executions should be
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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
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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,
national sales meetings and other significant publicity events.
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♣ 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
like them. The Q rating answers the question of popularity among those familiar with him
or her . Q ratings are a good way for companies to avoid hiring big celebrities that aren’t
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popular among their target audience. This also makes Q ratings a good method to filter
celebrities for a company.

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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
PR departments perform the following five functions:
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SUMMER
R PROJECT*
*2008-11

Many companies aree turning to marketing
m puublic relationns (MPR) to directly suppport corporaate or
product promotion
p an
nd image making. The old
o name forr MPR was publicity. MPR
M goes beeyond
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
B
Building thee corporate image
i in a way
w that reflects favorrably on its product
As the power
p of mass
m advertissing weakenns, marketinng managerss are turningg more to MPR.
M
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wareness andd brand knoowledge, for both

Companiies found it particularly effective inn building aw
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


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
may not be truthful.

ASB, NOIDA
56 | P a g e


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
Arrange a speech or talk
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Make an analysis or prediction

Conduct a poll or survey
Issue a report
Take a stand on a controversial subject
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Arrange for a testimonial

Announce an appointment
Invent then present an award
Stage a debate
Organize a tour of your business or projects
Issue a commendation
ASB, NOIDA
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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
retail storres, restauraants, schools, cinemas annd from vendding machinnes. The drinnk was first made
m
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
foods andd lifestyles is part of Nooyi's "Perforrmance Withh Purpose" philosophy.
p
In Octobber 2008, Pep

psi announcced they wouuld be redessigning its loogo and re-bbranding manny of
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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
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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 Depression-
D in large parrt due
to financial losses incurred by sppeculating onn wildly flucctuating sugaar prices as a result of World
W
War I. Assets
A were sold
s and Royy C. Megarggel bought thhe Pepsi traddemark. Eighht years later, the
companyy went bankrrupt again. Pepsi's
P assetss were then purchased
p byy Charles Guuth, the Pressident
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of Loft Inc. Loft was a candy manufacturer

m r with retail stores that contained
c sooda fountains. He
sought too replace Co
oca-Cola at his
h stores' fouuntains afterr Coke refussed to give him
h a discouunt on
syrup. Guuth then had
d Loft's chem
mists reformuulate the Peppsi-Cola syruup formula.
60 | P a g e

SUMMER
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*2008-11

PepsiCo gained entry

y to India inn 1988 by crreating a joiint venture with
w the Punnjab governm
ment-
owned Punjab Agro Industrial Corporation
C (
(PAIC) and Voltas Indiaa Limited. This
T joint veenture
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
younger post-war gen
neration as consumers,
c w the sloggan “Now Itt’s Pepsi, forr those who think
with
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.
0’s Pepsi had used Hollyywood starleet Joan Craw
Althoughh in the 1950 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, highh-
budget 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,
Remo Feernandez and
d Mahima Chaudhary.
C T
They came up
u
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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


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,
Bob Woolmer, Younus Khan, Kamran Akmal, Adnan Sami, Reema Khan, Call, and Vital Signs.
Pepsi has its biggest market in the Indian Subcontinent therefore it keeps in mind the that
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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


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"
1975-1977: "Have a Pepsi Day"
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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!"
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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
2007-2008: "More Happy"/"Taste the once that's forever young" (Michael Alexander)
ASB, NOIDA
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
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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
like the pesticides cases, it makes commercials and news saying it’s absolutely safe for drinking.
ASB, NOIDA
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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.
Audience characteristics
Previous research indicates that the use of celebrity endorsement depends on the underlying
ASB, NOIDA
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


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
ASB, NOIDA
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


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
frequently changing their brand ambassador.
ASB, NOIDA
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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.
The overall risk awareness of areas such as overexposure, overuse, and overshadowing
ASB, NOIDA
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


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.
Implications
Using celebrity endorsers is a good way to r each a target audience since they can
ASB, NOIDA
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.
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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
using the product and characteristics that match the product.
ASB, NOIDA
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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
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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
Kotler.
ASB, NOIDA
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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
Signing Film Personality by Anmol News
ASB, NOIDA
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Bacchelor off Businesss Adminisstration (General)

Previous studies in the area of celebrity endorsement have focused on how

1. How can the factors inducing a company’s choice of celebrity endorsement as a

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

4. What is Managing Public Relation?

they describe risk reduction.

Sr No. Topic Page No.

Advertising is a form of communication that typically attempts to persuade potential customers

Advertiseer include not

Since its launch in 1979,

Developing an advertising program is a five-step process:

1. Setting advertising objective

product, or re-launch / up-date of an existing product.

or indirectly comparing its product to that of its competitors.

$ Remind or Reinforce: Reminder Advertising is used to maintain interest and awareness

5. Product Substitutability: A product very similar to other products on the market

Theme Creative Copy

Advertisers must not:

$ Make false claims

This again has four components. They are:

1. Deciding on reach, frequency and impact

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

reachh and frequenncy

Medium Advantages Limitation

Magazines High geographic and Long ad purchase lead time;

 Circulation: The number of physical units carrying the advertising.

Several adjustments have to be applied to cost-per-thousand measure.

1. The measure should be adjusted for audience quality

period to obtain maximum impact.

 Continuity is achieved by scheduling exposures evenly throughout a given period

Communication-effect research seeks to determine whether an ad is communicating effectively.

Celebrity branding is a global phenomenon and it assumes paramount importance in developing

Endorsement is a channel of brand communication in which a celebrity acts as the brand’s

3.2 Essentials of celebrity endorsements

McCracken’s meaning transfer model

Erdogan’s source credibility model

♣ Negative celebrity information

♣ Overexposure and overuse

♣ Managing celebrity endorsers

♣ The source attractiveness model

the endorser is supposed to pass to the brand.

Innfluencing specific target group

wareness andd brand knoowledge, for both

CHOOSING MESSAGES ANS VEHICLES

IMPLEMENTING THE PLAN AND EVALUATING RESULTS

Make an analysis or prediction

Arrange for a testimonial

In Octobber 2008, Pep

its produucts by early 2009. In 20009, Pepsi, Diet

are the only

It was firrst introduced in North Carolina

In 1903, Bradham moved

In 1931, the Pepsi-C

of Loft Inc. Loft was a candy manufacturer

PepsiCo gained entry

In 1961 Pepsi had redefined

When Peepsi came in India, it hadd already creeated havoc in

with seveeral ads whiich focused mainly on the

Some famous Pepsi advertising campaign involving celebrities were:

1961-1963: "Now It's Pepsi for Those Who Think Young"

1977-1980: "Join the Pepsi People (Feeling Free)"

Circulation: The number of physical units carrying the advertising.

Continuity is achieved by scheduling exposures evenly throughout a given period