THE IMPACT OF CELEBRITY ENDORSEMENT

ON STRATEGIC BRAND

MANAGEMENT

 

SUBMITTED BY:

Dinesh Bargotra (12-MBA-13)

GaganDeep Singh Isher (14-MBA-12)

Reitesh Chandan (34-MBA-13)

Sahil Malhan (38-MBA-13)

BRAND POSITIONING Success or failure of a product depends upon the

customers. How the customers perceive the product and what

they feel about the product is therefore crucial to the success of the organisation.

Positioning is how brand is unique and relevant for consumers.

Example: Godrej launched Ezee brand ‘ special clothes and delicate

garments’. Biggest worries of customers were shrinkage and colour

fading. Ezee’s unique pH neutral formulation addresses these

problems. Tagline: GARAM KAPDE RAHEN NAYE JAISE

POSITIONING STATEMENTS A message that communicates the brand image to consumers. Short, one benefit and addresses the target market’s number 1

problem. Unique, believable, and important or the target market will

ignore you and your product. The template of the choice of the positioning statement was

authored by Geoffrey Moore and is as follows: For ( target customers) Who ( have the following problem) Our product is a ( describe the product or solution) That provides ( cite the breakthrough capability) Unlike ( reference competition) Our product/ solution ( describe the key point of competitive

difference) Example: Positioning statement of Nirula:

Nirula’s is a warm, contemporary, accessible, eating place for families including children and young adults, serving the widest variety of Indian and International food, beverages and desserts, at affordable prices.

POSITIONING STRATEGIES

SEGMENTATION•Consumer-based

•Buying situation-based

TARGETING•Evaluate•Select

SELECTING THE STRATEGY

ANALYSIS OF DIFFERENTIATION

POSSIBLITIES •PODS AND POPS

Situational analysisChanging consumer

trends IDENTIFICATION OF BRAND BENEFITS

Competitor analysis

ENDORSEMENT

A testimonial, a written or a spoken statement endorsing, advertising or promoting a product.

PEOPLE ENDORSEMENT

Rs. 1000 crore business( Economic Times 2010) Well known people and celebrities associate

themselves with the brand to promote it. Sports personalities, actors, etc. Useful association with the brand image is

important. Example: Godfrey Philips India’s initiative

Blood donation drive with rotary club. In the words of Nita kapoor ( Executive Vice

President, Marketing and Corporate Affairs) “ The reason we were able to collect so much blood units was the celebrity endorsement actor Preity Zinta.

Example: United Arab Emirates based telecommunication

service provider signed an endorsement deal with Aamir Khan for Rs. 35 crore.

Company feels people are bound to associate the firm’s product being genuine and best in the class.

RISKS IN CELEBRITY ENDORSEMENT

Example : Tiger Woods Accenture, ATT, Gatorade division of PepsiCo,

Gillette division of P & G, Golf Digest and Tag Heuer dropped him off after TIGER WOODS SCANDAL.

CELEBRITY ENDORSERS

Money seekers: endorse any decent brand if the price is right. Concepts like brand fit donot bother them Example: Shah Rukh Khan, Akshay Kumar

Image fits brand seekers: True to their image attribute Example: Aamir Khan

Interchangeable: Small stars who don’t generally have a positioning. Example: Neil Nitin Mukesh

CELEBRITIES MAKING HUGE MONEY

Mahendra Singh Dhoni overtook all the endorsers in January to June 2010 and endorsed brands of 24 companies. Sighned a Rs. 24 Crore endorsement contract with the UB group and 29 crores for Maxx mobiles.

Shah Rukh Khan endorsed 16 and Sachin Tendulkar endorsed 15 firm’s brands.

Sports endorsement market approximately Rs. 200 crore

WHY USE CELEBRITIES?

Take advantage of a celebrity’s “equity”

Break through media clutter

Establish instant credibility

Take advantage of a celebrity’s current media exposure

…AND WHY NOT TO…

Because your competitors are

Because ad agency thinks it’s impressive

To rub elbows with your favorite star

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A celebrity can bring unprecedented value to your cause or organization, just by association.

They key is knowing who to choose and how to use them to achieve your organizational goals.

Reese Witherspoon became the first Global Ambassador for Avon and her support of the fight against breast cancer has been enormously successful.

SOME SUCCESSFUL CELEBRITY CAMPAIGNSTake note

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Sports lend themselves to endorsement deals, as people associate the professionals and the products they use with their success.

Be sure your spokesperson is someone with a clean record and, if you can tell, a clean and bright future. Brands can be trashed by the bad behavior of their big money mouthpiece.

Forbes called him a “good looking, clean-cut, articulate, scandal-free golf whiz “

Multiple deals with Nike dating back to 2001

Fit is precise

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Sometimes drama, or controversy, is exactly what your brand is looking for.

In the case of Carl’s Jr, the fast food chain didn’t have much to lose when they signed the drama queen to star in their sultry commercial. Her name alone would bring flocks of people to YouTube to watch…and they’ve got her in a bikini on all fours!

CKE sought Paris for their “luxury” burger

Some concern over FCC indecency scare

Paris’ was one of several racy ads featuring women and the burgers

Profits increased by $1 billion that year

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Obama on Larry King Live

Kindle

Kentucky Grilled Chicken

Book Club

Downside: questions arise

Oprah is someone who clearly doesn’t need the money that comes with endorsing new products, which likely adds to her credibility. Her viewers truly believe that if she is vouching for it, it must be top notch.

While someone like this may not be interested in your paid support, feel free to send her one of each to try out!

Same strategy applies to critics and media – just make sure your product doesn’t suck!

SOME NOT-SO-SUCCESSFUL CELEBRITY CAMPAIGNSTake serious note

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Even a celebrity as “do-gooder” as Michael Phelps can spell disaster for any feel-good organization.

Keep in mind that behavior that’s seemingly ok for normal people is not ok for your spokesperson.

Set ground rules and detail them explicitly in your contracts (often called “moral clauses.” And always have an out!

Hottest new athlete of recent years

Brought fame to the normally mundane sport of swimming

Allegations of marijuana use (backed by scandalous photos) ruined his image

Kellogg’s pulled the deal

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Even if your spokesperson hits a bump in the road, it doesn’t mean they are out for good.

Many celebrities and spokesmen have rebounded from bad press and gone on to bigger and better endorsement deals.

1991 announced he had contracted HIV during an extramarital affair

Was one of the biggest names in sports at the time

Had deals with Converse, Spalding sports goods, Pepsi, Nestlé and KFC worth nearly $12 million

Not one of the renewed their contract the next year

2003 landed first big endorsement deal with Lincoln Mercury

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See a trend?

Drug use and otherwise deviant behavior is the key cause behind most celebrity endorsement deals gone awry.

Again, choose your image wisely. They represent you in everything they say, do wear, project, and stand for.

2005 images of the model snorting cocaine hit the press

H&M, Chanel, and Burberry all dropped her as their spokes model

One year out of rehab, Calvin Klein, Dior, David Yurman, Louis Vuitton, and Burberry all signed her for even more lucrative deals

IMPLEMENTATION

Connection is crucial!

Limit overexposure if possible

Use multiple media

Build in a cancellation policy

Measure before and after

BRAND POSITIONING BY ENDORSEMENT The use of celebrities in marketing communications has

become the practice of the major companies in the emplacement of the brand in the mind of consumers.

Firms are making vast investments in hiring celebrities for positioning of brands by making organizations with endorser qualities such as trustworthiness, attractiveness and expertise.

With too many products flooding the market, companies find it difficult to differentiate their products based on their inherent product features.

To make the advertisement more attractive and avoid the media clutter, companies use celebrities to endorse their products.

The demand for instant recall, brand awareness, and emotional bonding with customers has made celebrity endorsements the latest trend.

Celebrities add new dimensions to a brand. As a result of the increase in celebrity advertisements in various media, India has become a celebrity-obsessed society.

Brand positioning is a major decision in marketing that seeks to build an image of a product in consumer’s mind.

Kotler (2002) aptly defined “positioning as the act of designing the company’s offering and image to occupy a meaningful and distinct position in the mind of the target customers”(p.308).

Celebrity endorsement is an easy way to connect with consumers.

Celebrities enjoy public recognition and they can use this recognition on behalf of a product by appearing in an advertisement for the product (McCracken, 1989).

Strong celebrities can help the consumers to connect with the brand and lead them to retail outlets to purchase the brand.

Celebrities can reduce the time for consumer to move from awareness to action.

Companies are making use of celebrity endorsers widely for market communication and huge investments to align their brands and themselves with endorsers .

Such endorsers are seen as dynamic in terms of attractiveness and appealing qualities.

Celebrities serve not only to create and maintain attention, but likewise to achieve high recall for the stigma because of their fame in a todays’ highly cluttered environment of marketing communication messages.

Today the market situation is highly flooded with global brands which force the organizations to use celebrities The use of celebrities is not a late phenomenon but Celebrities have been supporting the brand since the late nineteenth century

As an example, in year 1883, an English actress, Lillie Langtry, who endorsed for Pears

Soap Further indicated the former days of utilization involves Queen Victoria in association with Cadbury's Cocoa. Celebrities endorsers' use in commercials was estimated as one in every six advertisements around 1979

Around 25% of all US-based commercials utilise celebrities Further indicated by that, in the monetary value of celebrity endorsement it is estimated that US companies paid more than $ 1 billion to sports celebrities.

LUX

Lux is one of the most trusted brands in India. Indian celebrities Leela Chitnis, Aishwarya Rai, and Priyanka Chopra have endorsed Lux soap.

It is probably the only brand that has had an endorsement from nearly 50 Indian film stars.

The brand promise has evolved from “the beauty bar of film stars” to “brings out the star in you

Television commercial highlighted the freshness and beauty of Lux soap to the target audience.

Positioning strategies require that the brand answer the following questions convincingly: Who am I? (the brand’s identity, lineage, or family). What am I? (the functional capabilities of the brand). For whom am I? (the consumer segment that the

brand serves best). Why me ? (powerful reasons to choose this brand

rather than an alternative brand). Strong brand position means that the brand has a unique,

credible, sustainable, and valued place with the customers. Brand has the capacity to capture the imagination.

The brand name is what most people remember and recall. Sharply positioned brands stand out from the competition.

The quality of a product, prices charged, methods of distribution, image, communication tactics, and other factors create positioning and are, in turn, affected by the brand’s position.

Brand's positioning constitutes not only a powerful factor contributing to its identification but also an equally powerful instrument of differentiation.

Good positioning statement should satisfy two requirements: (a) It should reflect the brand’s competitive

advantage, and (b) it should motivate customers to action. The

positioning statement for a brand represents how the company wants customers to think and feel about the brand.

Branding is about the process of building a brand. Branding and positioning are like two sides of the same coin in that one without the other does not have the same effect .

Advertising is one of the most frequently used and powerful communication strategies to build a brand.

The central task of advertising is to place the brand in the desired position in the consumers’ mind.

Use of celebrity rather than non celebrity endorsers in advertisements leads to higher believability, a more favorable evaluation by consumers of the product and advertisements, and a significantly higher intention among consumers to purchase the product.

Celebrity endorsements act as signposts to quality and can significantly enhance brand reputations.

Consumers who use products that are associated with celebrities get a little bit extra in terms of imagery, aspiration, and entertainment, factors that often just may be enough to tip the balance in favour of one brand over its competitors on the supermarket shelf or in an Internet search engine return.

Celebrities may be successful in drawing the consumers’ attention piquing their interest or desire, and penetrating the target customers’ perceptual mapping.

The seven likeable attributes: ‘entertaining,’ ‘warmth’, ‘strong/distinctive/sexy’, ‘soft sell’, ‘relevant to me’,‘trendy/modernity/stylish’, and ‘status appeal’.

The attitude toward the television commercials was attributed to general Indian values, family values and adherence to religious principles/tenets/beliefs.

THANKYOU

QUESTIONS?