A

Project Study Report

On

“Impact of celebrity endorsement on Brand Equity of Pepsi”

Submitted in partial fulfillment for the

Award of degree of

Master of Business Administration

Submitted By: 2011-2012 Submitted TO:

JAIDEV MEENA Jaya pareek

Year - 2nd year [IVth Sem.] Nidhi Tak

POORNIMA SCHOOL OF MANAGEMENT

ISI-2, RIICO Institutional Area, Goner Road, Sitapura, Jaipur.

CERTIFICATE

Poornima School of Management

This is to certify that Mr.JAIDEV MEENA student of MBA 4th semester from Poornima

school of management, Jaipur had completed its project report on the topic of “IMPACT

OF CELEBRITY ENDORSEMENT ON BRAND EQUITY OF PEPSI” under the

supervision of Ms.Jaya Pareek,Mrs Nidhi Tak .faculty member DMS PGC.

To best of my knowledge report is original and has not been copied or submitted

anywhere else. It is an independent work done by him.

Dr. Vandana Sharma

Director, PSOM

Declaration

Hereby I declare that the project report entitled “IMPACT OF CELEBRITY

ENDORSEMENT ON BRAND EQUITY OF PEPSI” submitted for the degree of MBA is

my original work and the project report has not formed the basis for the award of any

diploma, degree, associated ship, fellowship or similar other title. It has been not

submitted to any other university or institution for the award of any degree or diploma.

JAIDEV MEENA

MBA 2nd year 4th sem

Preface

Stars, who are known to shape destinies, cast an enormous influence. We’re referring

to the powerful effect of celebrities on destinies of brands. One approving nod from a

famous face can translate into millions in brand sales. People love to live in dreams.

They worship celebrities. Celebrities may be sports stars like Sachin Tendulkar,

Mahindra Singh Dhoni,Roger Federer.Ronaldo and tiger woods’ or Film Stars like tom

cruise, bredd pitt, Salman Khan, John Abraham. They treat them as God. . Perhaps

that’s why the world over, companies have been using stars to endorse everything, from

food to food chains, from soft and hard drinks to health drinks, from clothes and

accessories to cars. For this they rope in these celebrities and give them whopping

amount of money. They believe that by doing this they can associate their products with

their target customers. This is called celebrity endorsement. But do this celebrity

endorsement acts as a source of brand-building and have impact over the purchasing

behavior of customers in case of automobiles? For this I decided to conduct this vary

research and objectives of my research are:

To identify the influence of celebrity endorsement on consumer buying behavior.

To study celebrity endorsement as a source of brand- for pepsi

To find which type of celebrity persona is more effective.

Secondary data used for this study are article of different authors, experts articles on this study, magazines, market survey of pepsi, interview with distributers and Internet. The main key elements of this study are as marketing strategies, product endorsement, celebrity endorsement, marketing mix and advertising. Brand equity, Brand image, Celebrities’, Product endorsement etc.

Conclusion of this study is that Whether Celebrity endorsement has a positive or a negative impact on the brand is a debate that is open to interpretation. But till the time the corporate world continues to foot fancy bills of celebrity endorsers and till consumers continue to be in awe of the stars, the party is not likely to break up and this help companies to earn more profit and increase brand equity.

Acknowledgement

I express my sincere thanks to my project guide, Ms.Jaya Pareek Mrs. Nidhi Tak

madam, faculty department of management studies, for guiding me right from the

inception till the completion of the project. I sincerely acknowledge them for extending

their valuable guidance, support for literature, critical reviews of project and above all

the moral support they had provided to me with all stages of this project.

I would also like to thanks Mr. R. K. Agarwal (advisor, PGC) and Mr. Abhayjeet Singh (Asst.

dean) of college DMS, PGC for their help and cooperation throughout our project,

JAIDEV MEENA

EXECUTIVE SUMMARY:

The field of consumer behavior is the study of individuals, groups or organizations and

the processes they use to select, secure, use and dispose of product, services,

experiences, or ideas to satisfy needs and impacts that these processes have on the

consumer and society. And understanding the consumer behavior is the prime and

toughest task in front of every marketer. There are a lot of factors, which influence

consumer buyer behavior. This study aimed at to understand the influence of celebrity

endorsement on consumer buying behavior. Marketers pay millions of Dollars to

celebrity endorsee hoping that the stars will bring their magic to brand they endorse and

make them more appealing and successful. But all celebrity glitter is not gold.

Celebrity sources may enhance attitude change for a variety of reasons. They may

attract more attention to the advertisement than would non-celebrities or in many cases,

they may be viewed as more credible than non-celebrities. Third, consumers may

identify with or desire to emulate the celebrity. Finally, consumer may associate known

characteristics of the celebrity with attributes of the product that coincide with their own

needs or desire. The effectiveness of using a celebrity to endorse a firm's product can

generally be improved by matching the image of the celebrity with the personality of the

product and the actual or desired serf concept of the target market.

What therefore seems relevant by the study is that, yes, definitely celebrity endorsee

influence consumer buying behavior and brand building but while using celebrity

endorsee, marketer has to take care of all the aspect that whether they brought

personality and image of celebrity matches or not, whether celebrity endorsee has deep

penetration among the masses or not, whether he is considered as credible source or

not etc.

INDEX

S.NO CONTENT PAGE NO.

1. INTRODUCTION TO INDUSTRY 1-19

2. INTRODUCTION TO ORGANIZATION 20-50

3 REVIEW OF LITERATURE 51-75

4RESEARCH METHODOLOGY

76-79

4.1. Title of study 76

4.2. Duration of the project 76

4.3. Objective of the project 77

4.4. Type of research 77-78

4.5. Sample size , method of selecting sample 78

4.6. Scope of study 78

5 Analysis and interpretation 79

6 Facts and finding 81-95

7 Limitation of study

8 SWOT analysis 99-100

9 Conclusion 99-100

8. Recommendation/ suggestion 101

9. Appendix 102-103

10. Bibliography 104-106

Introduction to the industry:

Background:

The industry began in mid 1900’s with leading companies like Pepsi Co. and Coca

Cola controlling the beverage business sector with sweetened soft drinks and

carbonated soda water. American audiences attached excitement and convenience

to these popular drinks, and a variety of soft drink brands began to originate such as

Dr.Pepper, Sprite, etc. The beverage industry has undergone rapid expansion over

the last decade.

The only obstacle for these beverage companies was the high number of calories

and sugar levels their drinks contained; a drawback for health-conscious consumers.

A soft drink (also called pop, soda, coke, soda pop, fizzy drink, or carbonated

beverage) is a non-alcoholic beverage that typically contains carbonated water, a

sweetening agent, and a flavoring agent. The sweetening agent may be sugar, high-

fructose corn syrup, or a sugar substitute (in the case of diet drinks). A soft drink may

also contain caffeine or juice. Products such as energy drinks, Kool-Aid, and pure juice

are not considered to be soft drinks. Other beverages not considered to be soft

drinks are hot chocolate,hot,tea,coffee,milk,milkshakes,and schooled.

Small amounts of alcohol may be present in a soft drink, but the alcohol content must

be less than 0.5% of the total volume. If the drink is to be considered non-alcoholic.

Widely sold soft drink flavors are cola, lemon-lime, root beer, orange, grape, vanilla,

ginger ale, fruit punch, sparkling lemonade, squash, and water. Soft drinks may be

served chilled or at room temperature. They are rarely heated.

The first marketed soft drinks (non-carbonated) in the Western world appeared in the

17th century. They were made from water and lemon juice sweetened with honey. In

1676, the Companies des Lemonades of Paris was granted a monopoly for the sale

of lemonade soft drinks. Vendors carried tanks of lemonade on their backs and

dispensed cups of the soft drink to thirsty Parisians.

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Carbonated drinks made without any alcohol are called Soft Drinks. They are also

known as Coke/Soda/Pop etc. Hot chocolate, teas, coffee etc are usually excluded

from this classification. They are sold in a variety of sizes and manner. In the U.S.,

they are often sold in two-liter bottles, one liter plastic bottles, 24 and 20 US fluid

ounce bottles and in 12 US fluid ounce cans. Packaging is also available in many

different quantities

In Japan, 1.5 liter bottles, 500 mL and 350 mL bottles and cans are sold. At times,

the fizzy soft drinks are served as fountain drinks in which carbonation is added to a

concentrate immediately prior to serving. In Europe, plastic and glass bottles of sizes

2, 1.5, 1, 0.5, 0.35, 0.33 liters, aluminum cans of 0.33, 0.35, and 0.25 liters are

popular. Almost all soft drinks are made of refined sugars. Hence, they are often

criticized for causing obesity and other health related problems. A link to problems of

sleep, bones, and teeth has been proven by many studies.

Market Structure:

The soft drink industry is a global marketing phenomenon. In essence, it is simply a

blended water drink with sweeteners, flavors and additives. The success in

advertising and marketing this product lies in convincing billions of consumers to

drink these instead of straight water or other less expensing alternatives. The brand

recognition of this industry is extraordinarily high. In 2002, world sales exceeded US

$193 billion. In contrast, fruit sales were just US $69 billion. Global consumption is

currently in excess of 327 billion liters.

Pepsi and Coca-Cola, between them, hold the dominant share of the world market.

Cadbury Schweppes follows a close third. Coca-Cola has approximately half of the

world market share and sells 4 out of the top 5 soft drink brands in the world. Coca

Cola sales for 2006 reached US $24.1 billion. It has profit margins of 20% and a

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market capitalization of US $130 billion. Pepsi sales stood at US $36 billion but this

also includes snacks and other foods.

Some analysts view the definition of soft drinks incomplete and wish to add ready to

drinks also, to this industry. If they are added as well, these would add another 1.3

billion servings to 50 billion servings for these drinks.

Industry Definitions :

Fizzy drinks: drinks injected with carbon dioxide at high pressure are called Fizzy

drinks.

Floats: soft drink with scoops of ice-cream

Soda: another term for soft drink

Pop: another U.S. term for soft drinks

Coke: a derivative and brand name of Coca-Cola, often used as a label for soft drinks

in general.

Market Metrics:

Soft drink market size for FY00 was around 270mn cases (6480mn bottles). The

market witnessed 5- 6% growth in the early‘90s. Presently the market growth has

growth rate of 7- 8% per annum compared to 22% growth rate in the previous year.

The market size for FY01 is expected to be 7000mn bottles.

Soft Drink Production area

The market preference is highly regional based. While cola drinks have main markets

in metro cities and northern states of UP, Punjab, Haryana etc. Orange flavored

drinks are popular in southern states. Sodas too are sold largely in southern states

besides sale through bars. Western markets have preference towards mango

flavored drinks. Diet coke presently constitutes just 0.7% of the total carbonated

beverage market.

3

Growth promotional activities

The government has adopted liberalized policies for the soft drink trade to give the

industry a boast and promote the Indian brands internationally. Although the import

and manufacture of international brands like Pepsi and Coke is enhanced in India the

local brands are being stabilized by advertisements, good quality and low cost.

U.S. Market

The U.S. is closely linked with soft drinks with Coca Cola being an American in much

of the world. About 500 soft drinks companies operate in the U.S. Annual sales of

refreshments total approximately US $88 billion, of which three quarters are soft drink

sales. There are about 500 soft drink bottlers in the United States.

Soft drink companies manufacture and sell beverage syrups which are essentially

bases to bottling operators that then add sweeteners and/or carbonated water to

produce the final product. Independent bottlers work under license with various soft

drink manufacturers and are generally allotted specific territories to serve.

Manufacturers not only provide the bottlers with syrups and bases, but also often

provide other business services such as product quality control, marketing,

advertising, and engineering as well as financial and personnel training.

In return, the bottlers furnish the required capital investment for land, buildings,

machinery, equipment, trucks, bottles and cases. As noted previously, the soft drink

industry distributes and sells its product in two primary forms: packaged and fountain

service. In fountain service, the soft drink product is dispensed and served in cups in

restaurant or other retail oriented location with a food service station.

Coke, Pepsi and Cadbury Schweppes control over 91% of the U.S. market share.

They employ about 63,000 people in the U.S.

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World Market:

Global sales of soft drinks exceed 327 billion liters and are valued at more than US

$393 billion annually. North America, Europe and Japan are the most mature

markets for global soft drinks. Coco Cola and PepsiCo Inc have significant control

over the global soft drinks market and both have similar business organizations and

processes worldwide. The industry includes other than the soft drink manufactures

themselves, the bottlers and various raw material suppliers. Suppliers of cans, plastic

and glass bottles are included in this category.

Globally, the soft drinks majors continue to face challenges. One key global trend is a

move away to healthier drinks, which may put some pressure on yearly growth in

sales of soft drinks. The push to diet beverages have been well covered by the major

producers – with sales of diet Coke and diet Pepsi still strong. A recent trend is the

rise in popularity of sports drinks. Bottled water has also experienced very strong

growth. Finally the quality of water used in the manufacture of soft drinks poses

serious issues for the industry. Major players are working on the issue as water

scarcity becomes a global issue.

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Industry Players:

The Coca-Cola Company

Coca Cola is the number one brand globally and has been for over 40 years It is sold

in virtually every country of the world. The successful expansion that began in World

War II has continued unabated up to this date. Now, the company has more than 400

brands in its portfolio. Tab, produced in 1963 was one of the company’s landmark

marketing successes.

PepsiCo Inc.

Pepsi-Cola was created in 1898 in New Bern, North Carolina, by druggist Caleb D.

Brad ham. PepsiCo Inc. holds about one-third of the U.S. market and is the second

largest soft drink major in the world. It owns Frito-Lay snacks and other businesses.

Pepsi soft drinks include brands such as Pepsi, Diet Pepsi, Slice, Mountain Dew and

Mug Root Beer.

Cadbury Schweppes

Cadbury Schweppes PLC is the number three global soft drink producer. The

portfolio includes Squirt, La Casera, TriNa, Spring Valley, and Wave. It has cornered

more then 17% of the world market. Total sales exceed US $12.9 billion.

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Trends and Recent Developments

Private labels are becoming more prominent. Private Labels are brands owned by

stores and retailed through them. These private label manufacturers are retailing

their brands very aggressively these days. Although, lowering of prices is an open

option for the soft drink majors, it reduces their profits. Private labelers offer heavier

discounts and sales are increasing.

In 2007, a new issue is the lack of recycling of plastic bottled water containers.

Although the trend to bottled water is high, environmentalists point out many of these

are simply filtered tap water and that the discarded bottles are causing environmental

damage. The fallout among consumers is unclear at mid-point 2007.

After nearly a year of deliberation, Cadbury has finally announced a date for the de-

merger of its US soft drinks arm, American Beverages. Although it appears to make

sense to separate this group from the company's confectionery operations, the

separation could leave Cadbury vulnerable to a takeover, which its turnaround plan

may be unable to prevent.

The de-merger, which was first announced as a possibility back in March 2007, will

now take place in May and will see the creation of Dr Pepper Snapple Group as a

separate entity with a listing on the New York Stock Exchange and its own

management team. The confectionery arm is to be renamed Cadbury plc and will be

listed in London.

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Carbonated drinks:

Soft drinks displayed on supermarket shelves.

In late 18th century, scientists made important progress in replicating naturally

carbonated mineral waters. In 1767, Englishman Joseph Priestley first discovered a

method of infusing water with carbon dioxide to make carbonated water which has

3.4 mg in the drink when he suspended a bowl of distilled water above a beer vat at

a local brewery in Leeds, England.

His invention of carbonated water, (also known as soda water), is the major and

defining component of most soft drinks. Priestley found water thus treated had a

pleasant taste, and he offered it to friends as a refreshing drink. In 1772, Priestley

published a paper entitled Impregnating Water with Fixed Air in which he describes

dripping oil of vitriol (or sulfuric acid as it is now called) onto chalk to produce carbon

dioxide gas, and encouraging the gas to dissolve into an agitated bowl of water.

Another Englishman, John Mervin Nooth, improved Priestley's design and sold his

apparatus for commercial use in pharmacies. Swedish chemist Torbern Bergman

invented a generating apparatus that made carbonated water from chalk by the use

of sulfuric acid. Bergman's apparatus allowed imitation mineral water to be produced

in large amounts. Swedish chemist Jöns Jacob Berzelius started to add flavors

(spices, juices and wine) to carbonated water in the late 18th century.

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Soft drink bottling industry

Over 1,500 U.S. patents were filed for either a cork, cap, or lid for the carbonated

drink bottle tops during the early days of the bottling industry. Carbonated drink

bottles are under great pressure from the gas. Inventors were trying to find the best

way to prevent the carbon dioxide or bubbles from escaping. In 1892, the "Crown

Cork Bottle Seal" was patented by William Painter, a Baltimore, Maryland machine

shop operator. It was the first very successful method of keeping the bubbles in the

bottle.

Production:

Soft drink production

Soft drinks are made by mixing dry ingredients and/or fresh ingredients (e.g. lemons,

oranges, etc.) with water. Production of soft drinks can be done at factories, or at

home.

Soft drinks can be made at home by mixing either a syrup or dry ingredients with

carbonated water. Carbonated water is made using a home carbonation system or by

dropping dry ice into water. Syrups are commercially sold by companies such as

Soda-Club.

Ingredient quality:

Of most importance is that the ingredient meets the agreed specification on all major

parameters. This is not only the functional parameter, i.e. the level of the major

constituent, but the level of impurities, the microbiological status and physical

parameters such as color, particle size, etc.

9

Soft drink packaging :

USsoftdrinkcontainersin2008.

8, 12, 20, 24 oz and 2L sizes are shown in a can and in glass and plastic bottles.

In the United States, soft drinks are sold in a large number of different sizes including

500 mL (16.9 U.S. fl oz), 1 liter, 1.5L, 2 liter, 3L, and in 8, 12, 14, 16, 20 and 24 U.S.

fluid ounce plastic bottles, 12 U.S. fluid ounce cans, and short eight-ounce cans.

Some Coca-Cola products can be purchased in 8 and 12 U.S. fluid ounce glass

bottles. Jones Soda and Orange Crush are sold in 16 U.S. fluid ounce (1 U.S. pint)

glass bottles.

Cans are packaged in a variety of quantities such as six packs, 12 packs and cases

of 24, and 36. With the advent of energy drinks sold in eight-fluid-ounce cans in the

U.S., some soft drinks are now sold in similarly sized cans. It is also common for

carbonated soft drinks to be served as fountain drinks in which carbonation is added

to a concentrate immediately prior to serving. Containers have deposits in a few

states.

In Europe, soft drinks are typically sold in 2, 1.5, 1-liter, 500 mL plastic or 330 mL

glass bottles; aluminum cans are traditionally sized in 330 mL, although 250 mL slim

cans have become popular since the introduction of canned energy drinks and 355

mL variants of the slim cans have been introduced by Red Bull more recently. Cans

10

and bottles often come in packs of six or four. Several countries have standard

recyclable packaging with a container deposit, typically ranging from € 0.15 to 0.25.

The bottles are smelted, or cleaned and refilled; cans are crushed and sold as scrap

aluminum.

In Australia, soft drinks are usually sold in 375 mL cans or glass or plastic bottles.

Bottles are usually 390 mL, 600 mL, 1.25 or 2 liter. However, 1.5 liter bottles have

more recently been used by the Coca-Cola Company. South Australia is the only

state to offer a container recycling scheme, recently having lifted the deposit from 5

cents to 10 cents. This scheme is also done in the Philippines; people usually buy

glass bottles and return them in exchange for a small amount of money.

In Canada, soft drinks are sold in 237 mL (8.3 imp fl oz) and 355 mL (12.5 imp fl oz)

aluminum cans and 591 mL (20.8 imp fl oz), 710 mL (25.0 imp fl oz), 1 L (35.2 imp

fl oz), 1.89 L (66.5 imp fl oz), and 2 L (70.4 imp fl oz) plastic bottles. The odd sizes

are due to being the metric near-equivalents to 8, 12, 16, 20, 24 and 64 U.S. fluid

ounces. This allows bottlers to use the same-sized containers as in the U.S. market.

This is an example of a wider phenomenon in North America.

Brands of more international soft drinks such as Fanta and Red Bull are more likely

to come in round-figure capacities. In India, soft drinks are available in 200 mL and

300 mL glass bottles, 250 mL and 330 mL cans, and 600 mL, 1.25 L, 1.5 L and 2 L

plastic bottles.

Producers:

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In every area of the world there are major carbonated beverage producers, however

a few major North American companies are present in most of the countries of the

world, such as Pepsi and Coca Cola.

Producers by region : North America

Pepsi co.

Coca Cola

RC Cola

South America

Ajegroup: (Peruvian origin, operates in 14 countries, now headquartered in Mexico),

producers of Big Cola, Cielo (mineral water), Cifrut (fruit juice), Free Tea, Free World

Light (referred to locally as Free Light), Kola Real, Oro, Pulp (nectar), Sporade

(sports drink) and Volt (energy drink)

AmBev: (Brazil, operates in 14 countries, owned by Anheuser-Busch InBev), the

largest bottler of Pepsi Cola products outside the United States, also produces

Guarana Antarctica, Soda Limonada, Sukita, H2OH! and Guara!

Corporación José R. Lindley S.A.: (Peru), producers of Aquarius (flavored water),

Burn (energy drink), Coca-Cola, Crush, Fanta, Frugos (nectar), Inca Kola, Kola

Inglesa, Powerade (energy drink), San Luis (mineral water) and Sprite

Embotelladora Don Jorge S.A.C.: (Peru), producers of Agua Vida (mineral water),

Click(fruit drink), Isaac Kola and Perú Cola

Embotelladora Latinoamericana S.A. (ELSA): (Colombia), producers of Cyro,

Liv(mineral water), RC Cola and Ship

Pepsico Inc Sucursal Del Peru: (Peru), producers of Pepsi Cola, Seven Up, Triple

Kola, Concordia, San Carlos (mineral water), Evervess, Gatorade (sports drink) and

Adrenalina Rush (energy drink)

Europe

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. Perrier

East Asia

Ramune

Australia

Bundaberg

As consumers became more health educated and aware of their nutritional intake,

large beverage companies acted quickly with the creation of the “diet”, no-calorie

soda in 1959 (Bells). The diet, or “light” soft drinks kept American audiences content

for a number of years because they offered what was thought to be a healthier

alternative to soft drinks with the same great taste. More recently, however,

consumers have become aware that even these “diet” drinks contain unnatural and

unhealthy nutritional

ingredients.

For the last decade, industry leaders have been forced to switch their focus from

sweetened soft drinks and calorie-free diet drinks to healthier, natural beverages. Health

conscious consumers have lost interest in beverages with unnatural ingredients and

have begun focusing on beverages that offer more than just hydration.

The latest trend in the beverage market is functional, healthy drinks. Industry leaders

haveintroduced vitamin-enhanced waters, sports beverages, energy drinks, and

functional beverages.

All of these beverages offer healthy alternatives to soft drinks, with the added bonus of

incorporating specificingredients targeted for different functions. Energy drinks have

high levels of caffeine and Vitamin C tokeep consumers alert and awake, while offering

different varieties such as caffeine-free and zero-sugaradded. Vitamin-enhanced waters

give consumers the same hydration as water, with added vitamins.Sports drinks and

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functional beverages both work similarly to the vitamin waters, with particularvitamins,

antioxidants and other ingredients specified for athletics and other functions.

A relatively new functional beverage company is Function Drinks, located in Redondo

Beach, California. Function distributes their products through MD Drinks, Inc. The

company began in 2004,with an orthopedic surgeon Dr. Alex Hughes, a graduate from

UCLA Medical School.

While in school, Hughes realized that many of the powerful, all-natural ingredients used

to treat patients in medical facilities were available to the public, yet not widely

recognized or known-about. Soon after his epiphany, Hughes began working on a

company that would incorporate these ingredients into beverages that could be

available to the public. The company instantly gained a strong following of people, full

ofactive and health-conscious consumers. Function Drinks offers a line of eight

beverages, each with a unique function and flavor.

The line includes: Urban Detox, Shock Sports, Braniac, Alternative Energy, Night Life,

Vacation and Light Weight. The strongest seller is Urban Detox, which comes in Prickly

Pear or Goji Berry flavors, incorporates a combination of “prickly pear extract and the

“smog-scrubbing” super-antioxidant N-Acetyl Cesteine” in order to “support healthy

lungs and sinuses in the face of particulate airborne pollution. These same ingredients

support the liver’s efforts in combating hangovers” as well (Functiondrinks.com).

Another prominent seller is Light Weight, available in Blueberry Raspberry, Pink

Grapefruit, and Acai Pomegranate.

This specific drink functions to speed up the body’s natural metabolism, with

ingredients Polygonum Cusidatum and EGCG from green tea specified to support the

body’s natural calorie burning engine (Functiondrinks.com)

As this beverages market increases, the competition among industry producers will also

rise. Industry leaders have grown to their market and size because of their unique

products and aggressive marketing skills. They have successfully achieved brand

recognition among target consumers through a variety of promotional strategies and

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advertising methods, including television commercials, celebrity sponsorship,

promotion through in-store displays, demonstrations, and through social media

websites.

The Top Selling Soft Drinks Companies

Worldwide

The Top 10 Soft Drinks Companies in 2009 by market share

Coca-Cola (& bottling partners) Red Bull

PepsiCo (& bottling partners) Danone

Nestle Kirin

Suntory Asahi Breweries

Dr Pepper Snapple Ito En

USA

The Top 10 Carbonated Soft Drinks Brands in the US in 2010 by volume

Coke Sprite

Diet Coke Diet Pepsi 

Pepsi-Cola Diet Mtn Dew (PepsiCo)

Mtn Dew (PepsiCo) Diet Dr Pepper (Dr Pepper Snapple)

Dr Pepper (Dr Pepper Snapple) Fanta

Source: Beverage Digest

The Top 10 Carbonated Soft Drinks Manufacturers in the US in 2010 by volume

Coca-Cola Hansen Natural  

PepsiCo Red Bull

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Dr Pepper Snapple Big Red Soda

Cott Corp Rockstar

National Beverage private label & other

Source: Beverage Digest

The Top 10 Bottled Water Brands Worldwide by sales in 2008

Nestle Pure Life (Nestle Waters) ($3.8bn) Crystal Geyser (CGWC) ($1.5bn)

Dasani (Coca-Cola) ($2.9bn) Volvic (Danone) ($1.4bn)

Aquafina (PepsiCo) ($2.8bn) Arrowhead (Nestle Waters) ($1.3bn)

Poland Spring (Nestle Waters) ($2.1bn) Perrier (Nestle Waters) ($1.1bn)

Evian (Danone) ($1.9bn) S Pellegrino (Nestle Waters) ($1.1bn)

Source: Nestle

UK

The UK's Top 10 Soft Drinks Manufacturers by take-home sales value in 2009

Coca-Cola Enterprises Red Bull

Britvic Soft Drinks AG Barr

GlaxoSmithKline Innocent Drinks

Danone Gerber Foods

Tropicana UK (PepsiCo) Nestle Waters

The UK's Top 10 Soft Drinks by take-home sales value in 2009

Coca-Cola Red Bull

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Lucozade (GlaxoSmithKline) Ribena (Glaxo SmithKline)

Robinsons (Britvic) Schweppes (Coca-Cola)

Pepsi (Britvic) Actimel (Danone)

Tropicana (PepsiCo)  Volvic (Danone)

Source: Britvic/Nielsen ScanTrack

Britvic's 2010 report on the UK Soft Drinks market

Other Non-Alcoholic Beverage Companies & Brands Profiled in Adbrands

Unilever Starbucks

Ocean Spray Tchibo

Britvic Soft Drinks Glaxo SmithKline

Nescafe Sunny Delight

Procter & Gamble Innocent Drinks

Lipton Folgers

Nestea Cott Corp

Fanta Japan Tobacco

AmBev  

The soft drink industry is so profitable

An industry analysis through Porter’s Five Forces reveals that market forces are

favorable for profitability. Defining the industry Both concentrate producers (CP) and

bottlers are profitable. These two parts of the Industries are extremely interdependent,

sharing costs in procurement, production, marketing and distribution. Many of their

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functions overlap; for instance, CPs do some bottling, and bottlers conduct many

promotional activities. The industry is already vertically integrated to some extent. They

also deal with similar suppliers and buyers. Entry into the industry would involve

developing operations in either or both disciplines. Beverage substitutes would threaten

both CPs and their associated bottlers. Because of operational overlap and similarities

in their market environment, we can include both CPs and bottlers in our definition of

the soft drink industry. In 1993, CPs earned 29% pretax profits on their sales, while

bottlers earned 9% profits on their sales, for a total industry profitability of 14% .

This industry as a whole generates positive economic profits

Rivalry:

Revenues are extremely concentrated in this industry, with Coke and Pepsi, together

with their associated bottlers, commanding 73% of the case market in 1994. Adding in

the next tier of soft drink companies, the top six controlled 89% of the market. In fact,

one could characterize the soft drink market as an oligopoly, or even a duopoly between

Coke and Pepsi, resulting in positive economic profits. To be sure, there was tough

competition between Coke and Pepsi for market share, and this occasionally hampered

profitability.

For example, price wars resulted in weak brand loyalty and eroded margins for both

companies in the 1980s. The Pepsi Challenge, meanwhile, affected market share

without hampering per case profitability, as Pepsi was able to compete on attributes

other than price.

Substitutes:

Through the early 1960s, soft drinks were synonymous with “colas” in the mind of

consumers. Over time, however, other beverages, from bottled water to teas, became

more popular, especially in the 1980s and 1990s. Coke and Pepsi responded by

expanding their offerings, through alliances (e.g. Coke and Nestea), acquisitions (e.g.

18

Coke and Minute Maid), and internal product innovation (e.g. Pepsi creating Orange

Slice), capturing the value of increasingly popular substitutes internally.     

Proliferation in the number of brands did threaten the profitability of bottlers through

1986, as they more frequent line set-ups, increased capital investment, and

development of special management skills for more complex manufacturing operations

and distribution. Bottlers were able to overcome these operational challenges through

consolidation to achieve economies of scale. Overall, because of the CPs efforts in

diversification, however, substitutes became less of a threat.

2 Introduction to the organization :

PepsiCo

19

Type Public

IndustryFoodBeverages

FoundedDelaware - June 8, 1965reincorporated in North Carolina – 1986

Founder(s)Donald M. KendallHerman W. Lay

Headquarters Purchase, Harrison, New York

Area served Worldwide

Key peopleIndra Nooyi(Chairperson and CEO)

Products

PepsiDiet PepsiMountain DewAquafinaSierra MistLipton Teas7up (outside the U.S.)MirindaTropicana ProductsNaked JuiceGatoradeQuaker Oats CompanyLay'sDoritosCheetosWalkers snack foodsFritosTostitos

Revenue US$ 57.838 billion (2010)[2]

20

Operating income

US$ 8.332 billion (2010)[2]

Net income US$ 6.338 billion (2010)[2]

Total assets US$ 68.153 billion (2010)[2]

Total equity US$ 21.476 billion (2010)[2]

Employees 294,000 (2010)[2]

Divisions

PepsiCo Americas Foods; PepsiCo Americas Beverages; PepsiCo Europe; PepsiCo Asia, Middle East & Africa

Traded asNYSE: PEPS&P 500 Component

Website PepsiCo.com

PepsiCo, Incorporated (NYSE: PEP) is a Fortune 500, American global corporation

21

Pepsi - Yeh Hai Youngistan Meri Jaan

Brand History

Pepsi is a hundred year old brand loved by over 200 million people worldwide. The

largest single selling soft drink brand in India is the ubiquitous'socialiser'at every

occasion.

Youngistaan loves it. 200 million people worldwide love it. But what has made

Pepsi the single largest selling soft drink brand in India is actually a formula

concocted a century ago in a far away continent.

1886, United States of America. Caleb Bradman, the man with a plan, got on to

formulate a blockbuster digestive drink and decided to call it Brad’s drink. It was

this doctor’s potion that was to become Pepsi Cola in 1898, and eventually,

Pepsi in 1903.

Pepsi has always played on the front foot and since its inception has come out

with revolutionary concepts like Diet, 2L bottles, recyclable plastic cola bottles

and the enviable My Can.

Brand Advantage

22

Pepsi has become a friend to the youth and has led many youth cultures.

Youngsters over the generations have grown up with Pepsi and share an

emotional connect with it, unlike any other cola brand. Be it parties, hangouts, or

just another day at home, a day is never complete without the fizz of Pepsi!

Pepsi, Cricket and Bollywood have been joined at the hip since the beginning.

Shah Rukh Khan, Sachin Tendulkar, Saif Ali Khan, Amitabh Bachchan, Kareena

Kapoor, Priyanka Chopra, Virender Sehwag, M. S. Dhoni, John Abraham, Ranbir

Kapoor and Deepika Padukone are a few celebrities who will go any length for a

chilled Pepsi.

The Pepsi My Can is undoubtedly the most popular cola pack of all times. It is

not just a pack but a style statement for today’s youth.

PepsiCo is a world leader in convenient snacks, foods and beverages.

1. Solid Philosophy, Solid Company

23

Creating a Better Tomorrow for Future Generations

2.

Our Mission and Vision

At PepsiCo, we believe being a responsible corporate citizen is not only the right thing to do, but the right thing to do for our business.

3.

PepsiCo Values & Philosophy

Our Values & Philosophy are a reflection of the socially and environmentally responsible company we aspire to be. They are the foundation for every business decision we make.

4.

Corporate Governance

24

PepsiCo has adopted strict corporate standards that govern our operations and ensures accountability for our actions. Learn more about the processes and policies guiding our business.

World-Class, Muscular Brands

PepsiCo is home to hundreds of brands around the globe. Listed here are some of our most recognized. More »

Our Leadership

PepsiCo is a company full of strong, talented individuals starting with the company leadership. Get to know the inspiring people helping lead PepsiCo on its 'Performance with Purpose' journey.

25

1. 3

Indra K. Noo Massimo d'Amore

Chairman and CEO, PepsiCo CEO, PepsiCo Beverages Americas

2. 4

John Compton Eric Foss

CEO, PepsiCo Americas Foods CEO, Pepsi Beverages Company

5 6

Zein Abdalla Saad Abdul-Latif

CEO, PepsiCo Europe CEO, PepsiCo Asia, Middle East, Africa

PepsiCo, Incorporated (NYSE: PEP) is a Fortune 500, American global corporation

headquartered in Purchase, Harrison, New York, with interests in the manufacturing,

marketing and distribution of grain-based snack foods, beverages, and other products.

26

PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company and Frito-Lay,

Inc. PepsiCo has since expanded from its namesake product Pepsi to a broader range

of food and beverage brands, the largest of which include an acquisition of Tropicana in

1998 and a merger with Quaker Oats in 2001 - which added the Gatorade brand to its

portfolio as well.

As of 2009, 19 of PepsiCo's product lines generated retail sales of more than $1 billion

each,[4] and the company’s products were distributed across more than 200 countries,

resulting in annual net revenues of $43.3 billion. Based on net revenue, PepsiCo is the

second largest food & beverage business in the world.[5] Within North America, PepsiCo

is ranked (by net revenue) as the largest food and beverage business.

Indra Krishnamurthy Nooyi has been the chief executive of PepsiCo since 2006, and the

company employed approximately 285,000 people worldwide as of 2010.[6] The

company’s beverage distribution and bottling is conducted by PepsiCo as well as by

licensed bottlers in certain regions.[7] PepsiCo is a SIC 2080 (beverage) company.

History:

Origins

27

The recipe for Pepsi, the soft drink, was first developed in the 1890s by a New Bern,

North Carolina pharmacist and industrialist, Caleb Bradham, who named it "Pepsi-Cola"

in 1898. As the cola developed in popularity, he created the Pepsi-Cola Company in

1902 and registered a patent for his recipe in 1903. The Pepsi-Cola Company was first

incorporated in the state of Delaware in 1919. Ownership of this company traded hands

several times throughout the 1920s and 1930s, and in the early 1960s its product line

expanded with the creation of Diet Pepsi and Mountain Dew.

Separately, the Frito Company and H.W. Lay & Company - two American potato and

corn chip snack manufacturers - began working together in 1945 with a licensing

agreement allowing H.W. Lay to distribute Fritos in the Southeastern United States. The

companies merged to become Frito-Lay, Inc. in 1961. In 1965, the Pepsi-Cola Company

merged with Frito-Lay, Inc. to become PepsiCo, Inc., the company it is known as at

present. At the time of its foundation, PepsiCo was incorporated in the state of

Delaware and headquartered in Manhattan, New York. The company's headquarters

were relocated to its still-current location of Purchase, New York in 1970, and in 1986

PepsiCo was reincorporated in the state of North Carolina.

Acquisitions and divestments:

Between the late-1970s and the mid-1990s, PepsiCo expanded via acquisition of

businesses outside of its core focus of packaged food and beverage brands; however it

exited these non-core business lines largely in 1997, selling some, and spinning off

others into a new company named Tricon Global Restaurants, which later became

known as Yum! Brands, Inc.. PepsiCo also previously owned several other brands that

it later sold, in order to allow it to return focus to its primary snack food and beverage

lines, according to investment analysts reporting on the divestments in 1997. Brands

formerly (no longer) owned by PepsiCo include: Pizza Hut, Taco Bell, KFC, Hot 'n Now,

East Side Mario's, D'Angelo Sandwich Shops, Chevys Fresh Mex, California Pizza

Kitchen, Stolichnaya (via licensed agreement), Wilson Sporting Goods and North

American Van Lines.

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The divestments concluding in 2007 were followed by multiple large-scale acquisitions,

as PepsiCo began to extend its operations beyond soft drinks and snack foods into

other lines of foods and beverages. PepsiCo purchased the orange juice company

Tropicana Products in 1998, and merged with Quaker Oats Company in 2001, adding

with it the Gatorade sports drink line and other Quaker Oats brands such as Chewy

Granola Bars and Aunt Jemima, among others.

In August 2009, PepsiCo made a $7 billion offer to acquire the two largest bottlers of its

products in North America: Pepsi Bottling Group and PepsiAmericas. In 2010 this

acquisition was completed, resulting in the formation of a new wholly owned subsidiary

of PepsiCo, Pepsi Beverages Company. Also in late 2010, the company made its

largest international acquisition when it purchased a majority stake in Wimm-Bill-Dann

Foods - a Russian food company which produces milk, yogurt, fruit juices and dairy

products.

Competition:

The Coca-Cola Company has historically been considered PepsiCo’s primary

competitor in the beverage market, and in December 2005, PepsiCo surpassed The

Coca-Cola Company in market value for the first time in 112 years since both

companies began to compete. In 2009, the Coca-Cola Company held a higher market

share in carbonated soft drink sales within the U.S. In the same year, PepsiCo

maintained a higher share of the U.S. refreshment beverage market, however, reflecting

the differences in product lines between the two companies. As a result of mergers,

acquisitions and partnerships pursued by PepsiCo in the 1990s and 2000s, its business

has shifted to include a broader product base, including foods, snacks and beverages.

The majority of PepsiCo's revenues no longer come from the production and sale of

carbonated soft drinks. Beverages accounted for less than 50 percent of its total

revenue in 2009. In the same year, slightly more than 60 percent of PepsiCo's beverage

sales came from its primary non-carbonated brands, namely Gatorade and Tropicana.

PepsiCo's Frito-Lay and Quaker Oats brands hold a significant share of the U.S. snack

food market, accounting for approximately 39 percent of U.S. snack food sales in 2009.

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One of PepsiCo's primary competitors in the snack food market overall is Kraft Foods,

which in the same year held 11 percent of the U.S. snack market share.

Products and brands

Largest PepsiCo Brands (based on 2009 retail sales)

Brand

Pepsi   

Mountain Dew   

Lay's potato chips   

Gatorade   

Diet Pepsi   

Tropicana beverages   

7UP (outside U.S.)   

Doritos tortilla chips   

Lipton teas (PepsiCo/Unilever partnership)

  

Quaker foods and snacks   

Cheetos   

Mirinda   

Ruffles potato chips   

Aquafina bottled water   

Pepsi Max   

Tostitos tortilla chips   

Sierra Mist   

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Fritatos corn chips   

Walkers potato crisps   

Source: 2009 Annual Report[29]              $0               $5b              $10b              $15b       $20b

PepsiCo’s product mix as of 2009 (based on worldwide net revenue) consists of 63

percent foods, and 37 percent beverages. On a worldwide basis, the company’s current

products lines include several hundred brands that in 2009 were estimated to have

generated approximately $108 billion in cumulative annual retail sales.

The primary identifier of companies' main brands within the food and beverage industry are those which generate annual sales exceeding $1 billion, and 19 of PepsiCo's brands met this description as of 2009: Pepsi-Cola, Mountain Dew, Lay's, Gatorade, Tropicana, 7Up, Doritos, Lipton Teas, Quaker Foods, Cheetos, Mirinda, Ruffles, Aquafina, Pepsi Max, Tostitos, Sierra Mist, Fritos, and Walker's.

Areas of business :

The structure of PepsiCo's global operations has shifted multiple times in its history as a

result of international expansion, and as of 2010 it is separated into four main divisions:[30] PepsiCo Americas Foods, PepsiCo Americas Beverages, PepsiCo Europe, and

PepsiCo Asia, Middle East and Africa. As of 2009, 71 percent of the company’s net

revenues came from North and South America, 16 percent from Europe and 13 percent

from Asia, the Middle East and Africa.

PepsiCo Americas Foods

PepsiCo Americas Foods consists of the company’s food and snack operations in North

and South America. This operating division is further segmented into Frito-Lay North

America, Quaker Foods & Snacks, Sabritas, Gamesa and Latin America Foods. Food

and snack sales in North and South America combined contributed 48 percent of

PepsiCo’s net revenue in 2009.

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Frito-Lay North America, the result of a merger in 1961 between the Frito Company and

the H.W. Lay Company, produces the top selling line of snack foods in the U.S. Its main

brands in the U.S., Canada and Mexico and include Lay's and Ruffles potato chips,

Doritos tortilla chips, Tostitos tortilla chips and dips, Cheetos cheese flavored snacks,

Fritos corn chips, Rold Gold pretzels, Sun Chips and Cracker Jack popcorn. Products

made by this division are sold to independent distributors and retailers, and are

transported from Frito-Lay's manufacturing plants to distribution centers, principally in

vehicles owned and operated by the company.

Quaker Foods North America, created following PepsiCo’s acquisition of the Quaker

Oats Company in 2001, manufactures, markets and sells Quaker Oatmeal, Rice-A-

Roni, Cap'n Crunch and Life cereals, as well as Near East side dishes within North

America. This division also owns and produces the Aunt Jemima brand, which as of

2009 was the top selling line of syrups and pancake mixes within this region.

Sabritas and Gamesa are two of PepsiCo’s food and snack business lines

headquartered in Mexico, and they were acquired by PepsiCo in 1966 and 1990,

respectively. Sabritas markets Frito-Lay products in Mexico, including local brands such

as Poffets, Rancheritos, Crujitos and Sabritones. Gamesa is the largest manufacturer of

cookies in Mexico, distributing brands such as Emperador, Arcoiris and Marías

Gamesa.

PepsiCo’s Latin America Foods (Spanish: Snacks América Latina) operations market

and sell primarily Quaker- and Frito-Lay-branded snack foods within Central and South

America, including Argentina, Brazil, Peru and other countries in this region.[36] Snacks

América Latina purchased Peruvian company Karinto S.A.C. including its production

company Bocaditas Nacionales (with three production facilities in Peru) from the

Hayashida family of Lima in 2009, adding the Karito brand to its product line, including

Cuates, Fripapas, and Papi Frits.

PepsiCo Americas Beverages:

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This division contributed 23 percent of PepsiCo’s net revenue as of 2009, [29] and

involves the manufacture (and in some cases licensing), marketing and sales of both

carbonated and non-carbonated beverages in North, Central and South America. [38] The

main brands distributed under this division include Pepsi, Mountain Dew, Gatorade,

7UP (outside the U.S.), Tropicana Pure Premium orange juice, Sierra Mist, SoBe

Lifewater, Tropicana juice drinks, AMP Energy, Naked Juice and Izze. Aquafina, the

company’s bottled water brand, is also marketed and licensed through PepsiCo

Americas Beverages.

PepsiCo also has formed partnerships with several beverage brands it does not own, in

order to distribute these or market them with its own brands. [1] As of 2010, its

partnerships include: Starbucks (Frappuccino, DoubleShot and Iced Coffee), Unilever’s

Lipton brand (Lipton Brisk and Lipton Iced Tea), and Dole (licensed juices and drinks).

PepsiCo Europe:

PepsiCo began to expand its distribution in Europe in the 1980s, and in 2009 it made up

16 percent of the company's global net revenue. Unlike PepsiCo’s Americas business

segments, both foods and beverages are manufactured and marketed under one

umbrella division in this region, known as PepsiCo Europe. The primary brands sold by

PepsiCo in Europe include Pepsi-Cola beverages, Frito-Lay snacks, Tropicana juices

and Quaker food products, as well as regional brands unique to Europe such as

Walkers crisps, Copella, Paw Ridge, Snack-a-Jack, Duyvis and others. PepsiCo also

distributes the soft drink 7UP in Europe via license agreement. epsiCo's European

presence expanded with its acquisition of Russian juice and dairy product brand Wimm-

Bill-Dann Foods in December 2010.

PepsiCo Asia, Middle East & Africa :

33

The most recently created operating division of PepsiCo covers Asia, the Middle East

and Africa In addition to the production and sales of several worldwide Pepsi-Cola,

Quaker Foods and Frito-Lay beverage and food product lines (including Pepsi and

Doritos), this segment of PepsiCo’s business markets regional brands such as Mirinda,

Kurkure and Red Rock Deli, among others. While PepsiCo owns its own manufacturing

and distribution facilities in certain parts of these regions, more of this production is

conducted via alternate means such as licensing (which it does with Aquafina), contract

manufacturing, joint ventures and affiliate operations. PepsiCo’s businesses in these

regions, as of 2009, contributed 13 percent to the company’s net revenue worldwide.

Corporate governance:

Headquartered in Purchase, New York, with research and development headquarters in

Valhalla, New York, PepsiCo’s Chairman and CEO is Indra Nooyi.[40] The board of

directors is composed of eleven outside directors as of 2010, including Ray Lee Hunt,

Shona L. Brown, Victor Dzau, Arthur C. Martinez, Sharon Percy Rockefeller, Daniel

Vasella, Dina Dublon, Ian M. Cook, Alberto Ibargüen, James J. Schiro and Lloyd G.

Trotter. Former top executives at PepsiCo include Steven Reinemund, Roger Enrico, D.

Wayne Calloway, John Sculley, Michael H. Jordan, Donald M. Kendall, Christopher A.

Sinclair and Alfred Steele.

On October 1, 2006, former Chief Financial Officer and President Indra Nooyi replaced

Steve Reinemund as Chief Executive Officer. Nooyi remained as the corporation's

president, and became Chairman of the Board in May 2007, later (in 2010) being

named #1 on Fortune's list of the "50 Most Powerful Women" and #6 on Forbes' list of

the "World's 100 Most Powerful Women". PepsiCo received a 100 percent rating on the

Corporate Equality Indexreleased by the LGBT-advocate group Human Rights

Campaign starting in 2004, the third year of the report.

Headquarters

34

PepsiCo headquarters

The PepsiCo headquarters are located in Purchase, Harrison, New York. It was one of

the last architectural works by Edward Durell Stone. It consists of seven three story

buildings. Each building is connected to its neighbor through a corner. The property

includes a sculpture garden with 45 sculptures. Works include those of Alexander

Calder, Henry Moore, and Auguste Rodin. Westchester Magazine stated "The buildings’

square blocks rise from the ground into low, inverted ziggurats, with each of the three

floors having strips of dark windows; patterned pre-cast concrete panels add texture to

the exterior surfaces." In 2010 the magazine ranked the building as one of the ten most

beautiful buildings in Westchester County.

At one time PepsiCo had its headquarters in 500 Park Avenue in Midtown Manhattan,

New York City. In 1956 Pepsico paid $2 million for the original building. PepsiCo built

the new 500 Park Avenue in 1960. In 1966 Mayor of New York City John Lindsay

started a private campaign to convince PepsiCo to remain in New York City. In 1967

PepsiCo announced that it was moving to 112 acres (45 ha) of the Blind Brook Polo

Club in Westchester County. After PepsiCo left the Manhattan building, it became

known as the Olivetti Building.

Charitable activities:

35

Headquarters of Pepsi-Cola Venezuela (ES)

PepsiCo has maintained a philanthropic program since 1962 called the PepsiCo

Foundation, in which it primarily funds “nutrition and activity, safe water and water

usage efficiencies, and education,” according to the foundation’s website. In 2009,

$27.9 million was contributed through this foundation, including grants to the United

Way and YMCA, among others.

In 2009, PepsiCo launched an initiative which the company calls the Pepsi Refresh

Project, in which individuals submit and vote on charitable and nonprofit collaborations.

The main recipients of grants as part of the refresh project are community organizations

with a local focus and nonprofit organizations, such as a high school in Michigan which -

as a result of being selected - received $250,000 in 2010 towards construction of a

fitness room for high school students. Following the Gulf of Mexico oil spill which

occurred in the spring of 2010, PepsiCo donated $1.3 million to grant winners in

determined by popular vote. As of October, 2010, the company had provided a

cumulative total of $11.7 million in funding, spread across 287 ideas of participant

projects from 203 cities in North America. In late 2010, the refresh project was reported

to be expanding to include countries outside of North America in 2011.

Sustainability practices:

36

According to its 2009 annual report, PepsiCo states that it is “committed to delivering

sustainable growth by investing in a healthier future for people and our planet”, which it

has defined in its mission statement since 2006 as “Performance with Purpose”.

According to news and magazine coverage on the subject in 2010, the objective of this

initiative is to increase the number and variety of In PepsiCo’s CEO Indra Nooyi made a

trip to India to address water usage practices in the country, prompting prior critic Sunita

Narain, director of the Centre for Science & Environment (CSE), to note that PepsiCo

"seem(s) to be doing something serious about water now." According to the company’s

2009 corporate citizenship report, as well as media reports at the time, the company (in

2009) replenished nearly six billion liters of water within India, exceeding the aggregate

water intake of approximately five billion liters by PepsiCo’s India manufacturing

facilities.

Water usage concerns have arisen at times in other countries in which PepsiCo

operates. In the U.S., water shortages in certain regions resulted in increased scrutiny

on the company’s production facilities, which were cited in media reports as being

among the largest water users in cities facing drought - such as Atlanta, Georgia.[67][68] In

response, the company formed partnerships with non-profit organizations such as the

Earth Institute and Water.org, and in 2009 began cleaning new Gatorade bottles with

purified air instead of rinsing with water, among other water conservation practices.[69] In

the United Kingdom, also in response to regional drought conditions, PepsiCo snacks

brand Walkers' reduced water usage at its largest potato chip facility by 45 percent

between the years 2001 and 2008. In doing so, the factory employed machinery which

captured the water naturally contained in potatoes, and used that water to largely offset

the need to bring in outside water to the factory.

As a result of water reduction practices and efficiency improvements, PepsiCo in 2009

saved more than more than 12 billion liters of water worldwide, compared to its 2006

water usage. Environmental advocacy organizations including the Natural Resources

Defense Council and individual critics such as Rocky Anderson (mayor of Salt Lake

City, Utah) voiced concerns in 2009, noting that the company could conserve additional

water by refraining from the production of discretionary products such as Aquafina.[73]

37

The company maintained its positioning of bottled water as “healthy and convenient”,

while also beginning to partially offset environmental impacts of such products through

alternate means, including packaging weight reduction.

Packaging and recycling:

Environmental advocates have raised concern over the environmental impacts

surrounding the disposal of PepsiCo’s bottled beverage products in particular, as bottle

recycling rates for the company’s products in 2009 averaged 34 percent within the U.S.

The company has employed efforts to minimize these environmental impacts via

packaging developments combined with recycling initiatives. In 2010, PepsiCo

announced a goal to create partnerships that prompt an increase the beverage

container recycling rate in the U.S. to 50 percent by 2018.

One strategy enacted to reach this goal has been the placement of interactive recycling

kiosks called “Dream Machines” in supermarkets, convenience stores and gas stations,

with the intent of increasing access to recycling receptacles. The use of resin to

manufacture its plastic bottles has resulted in reduced packaging weight, which in turn

reduces the volume of fossil fuels required to transport certain PepsiCo products. The

weight of Aquafina bottles was reduced nearly 40 percent, to 15 grams, with a

packaging redesign in 2009. Also in that year, PepsiCo brand Naked Juice began

production and distribution of the first 100 percent post-consumer recycled plastic bottle.

Energy usage and carbon footprint:

PepsiCo, along with other manufacturers in its industry, has drawn criticism from

environmental advocacy groups for the production and distribution of plastic product

packaging, which consumed an additional 1.5 billion gallons of petrochemicals in 2008.

These critics have also expressed apprehension over the production volume of plastic

packaging, which results in the emission of carbon dioxide. Beginning largely in 2006,

PepsiCo began development of more efficient means of producing and distributing its

products using less energy, while also placing a focus on emissions reduction. In a

comparison of 2009 energy usage with recorded usage in 2006, the company’s per-unit

38

use of energy was reduced by 16 percent in its beverage plants and 7 percent in snack

plants.

In 2009, Tropicana (owned by PepsiCo) was the first brand in the U.S. to determine the

carbon footprint of its orange juice product, as certified by the Carbon Trust, an outside

auditor of carbon emissions. Also in 2009, PepsiCo began the test deployment of so-

called “green vending machines,” which reduce energy usage by 15 percent in

comparison to average models in use. It developed these machines in coordination with

Greenpeace, which described the initiative as “transforming the industry in a way that is

going to be more climate-friendly to a great degree.”

Product diversity

From its founding in 1965 until the early 1990s, the majority of PepsiCo’s product line

consisted of carbonated soft drinks and convenience snacks. PepsiCo broadened its

product line substantially throughout the 1990s and 2000s with the acquisition and

development of what its CEO deemed as “good-for-you” products, including Quaker

Oats, Naked Juice and Tropicana orange juice. Sales of such healthier-oriented

PepsiCo brands totaled $10 billion in 2009, representing 18 percent of the company’s

total revenue in that year. This movement into a broader, healthier product range has

been moderately well received by nutrition advocates; though commentators in this field

have also suggested that PepsiCo market its healthier items as aggressively as less-

healthy core products

In response to shifting consumer preferences and in part due to increasing

governmental regulation, PepsiCo in 2010 indicated its intention to grow this segment of

its business, forecasting that sales of fruit, vegetable, whole grain and fiber-based

products will amount to $30 billion by 2020. To meet this intended target, the company

has said that it plans to acquire additional health-oriented brands while also making

changes to the composition of existing products that it sells.

Ingredient changes:

39

Public health advocates have suggested that there may be a link between the ingredient

makeup of PepsiCo’s core snack and carbonated soft drink products and rising rates of

health conditions such as obesity and diabetes. The company aligns with personal

responsibility advocates, who assert that food and beverages with higher proportions of

sugar or salt content are fit for consumption in moderation by individuals who also

exercise on a regular basis.

Changes to the composition of its products with nutrition in mind have involved reducing

fat content, moving away from trans-fats, and producing products in calorie-specific

serving sizes to discourage overconsumption, among other changes. One of the earlier

ingredient changes involved sugar and caloric reduction, with the introduction of Diet

Pepsi in 1964 and Pepsi Max in 1993 - both of which are variants of their full-calorie

counterpart, Pepsi. More recent changes have consisted of saturated fat reduction,

which Frito-Lay reduced by 50% in Lay's and Ruffles potato chips in the U.S. between

2006 and 2009.[95] Also in 2009, PepsiCo’s Tropicana brand introduced a new variation

of orange juice (Trop50) sweetened in part by the plant Stevia, which reduced calories

by half.[95] Since 2007, the company also made available lower-calorie variants of

Gatorade, which it calls “G2”.

Distribution to children:

As public perception placed additional scrutiny on the marketing and distribution of

carbonated soft drinks to children, PepsiCo announced in 2010 that by 2012, it will

remove beverages with higher sugar content from primary and secondary schools

worldwide. It also, under voluntary guidelines adopted in 2006, replaced “full-calorie”

beverages in U.S. schools with “lower-calorie” alternatives, leading to a 95 percent

reduction in the 2009 sales of full-calorie variants in these schools in comparison to the

sales recorded in 2004. In 2008, in accordance with guidelines adopted by the

International Council of Beverages Associations, PepsiCo eliminated the advertising

and marketing of products that do not meet its nutrition standards, to children under the

age of 12.

40

In 2010, First Lady Michelle Obama initiated a campaign to end childhood obesity

(entitled Let's Move!), in which she sought to encourage healthier food options in public

schools, improved food nutrition labeling and increased physical activity for children. In

response to this initiative, PepsiCo, along with food manufacturers Campbell Soup,

Coca-Cola, General Mills and others in an alliance referred to as the "Healthy Weight

Commitment Foundation", announced in 2010 that the companies will collectively cut

one trillion calories from their products sold by the end of 2012 and 1.5 trillion calories

Performance with Purpose

At PepsiCo, we're committed to achieving business and financial success while leaving

a positive imprint on society - delivering what we call Performance with Purpose.

Our approach to superior financial performance is straightforward - drive shareholder

value. By addressing social and environmental issues, we also deliver on our purpose

agenda, which consists of human, environmental, and talent sustainability.

Guiding Principles:

We uphold our commitment with six guiding principles.

41

We must always strive to:

1. Care for our customers, our consumers and the world we live in.

We are driven by the intense, competitive spirit of the marketplace, but we direct

this spirit toward solutions that benefit both our company and our constituents.

Our success depends on a thorough understanding of our customers, consumers

and communities. To foster this spirit of generosity, we go the extra mile to show

we care.

2. Sell only products we can be proud of.

The true test of our standards is our own ability to consume and personally

endorse the products we sell. Without reservation. Our confidence helps ensure

the quality of our products, from the moment we purchase ingredients to the

moment it reaches the consumer's hand.

3. Speak with truth and candor.

We tell the whole story, not just what's convenient to our individual goals. In

addition to being clear, honest and accurate, we are responsible for ensuring our

communications are understood.

4. Balance short term and long term.

In every decision, we weigh both short-term and long-term risks and benefits.

Maintaining this balance helps sustain our growth and ensures our ideas and

solutions are relevant both now and in the future.

5. Win with diversity and inclusion.

We embrace people with diverse backgrounds, traits and ways of thinking. Our

diversity brings new perspectives into the workplace and encourages innovation,

as well as the ability to identify new market opportunities.

6. Respect others and succeed together.

Our mutual success depends on mutual respect, inside and outside the

company. It requires people who are capable of working together as part of a

team or informal collaboration. While our company is built on individual

42

excellence, we also recognize the importance and value of teamwork in turning

our goals into accomplishments.

About PepsiCo India

PepsiCo entered India in 1989 and has grown to become the country’s largest selling

food and Beverage Company. One of the largest multinational investors in the country,

43

PepsiCo has established a business which aims to serve the long term dynamic needs

of consumers in India.

PepsiCo nourishes consumers with a range of products from treats to healthy eats that

deliver joy as well as nutrition and always, good taste. PepsiCo India’s expansive

portfolio includes iconic refreshment beverages Pepsi, 7 UP, Mirinda and Mountain

Dew, in addition to low calorie options such as Diet Pepsi, hydrating and nutritional

beverages such as Aquafina drinking water, isotonic sports drinks - Gatorade,

Tropicana 100% fruit juices, and juice based drinks – Tropicana Nectars, Tropicana

Twister and Slice, non-carbonated beverage and a new innovation Nimbooz by 7Up.

Local brands – Lehar Evervess Soda, Dukes Lemonade and Mangola add to the

diverse range of brands.

PepsiCo’s foods company, Frito-Lay, is the leader in the branded salty snack market

and all Frito Lay products are free of trans-fat and MSG. It manufactures Lay’s Potato

Chips, Cheetos extruded snacks, Uncle Chipps and traditional snacks under the

Kurkure and Lehar brands and the recently launched ‘Aliva’ savoury crackers. The

company’s high fibre breakfast cereal, Quaker Oats, and low fat and roasted snack

options enhance the healthful choices available to consumers. Frito Lay’s core

products, Lay’s, Kurkure, Uncle Chipps and Cheetos are cooked in Rice Bran Oil to

significantly reduce saturated fats and all of its products contain voluntary nutritional

labeling on their packets.

The group has built an expansive beverage and foods business. To support its

operations, PepsiCo has 36 bottling plants in India, of which 13 are company owned

and 23 are franchisee owned. In addition to this, PepsiCo’s Frito Lay foods division has

3 state-of-the-art plants. PepsiCo’s business is based on its sustainability vision of

making tomorrow better than today. PepsiCo’s commitment to living by this vision every

day is visible in its contribution to the country, consumers and farmers.

44

.

PepsiCo India and its partners have invested more than USD1 billion since the

company was established in the country.

Employment

PepsiCo India provides direct and indirect employment to 150,000 people including suppliers and distributors

Brand Facts

PepsiCo nourishes consumers with a range of products from tasty treats to healthy eats

that deliver enjoyment, nutrition, convenience as well as affordability

45

Beverages

PepsiCo India’s expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP,

Nimbooz, Mirinda and Mountain Dew, in addition to low calorie options such as Diet

Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic

sports drinks - Gatorade, Tropicana100% fruit juices, and juice based drinks –

Tropicana Nectars, Tropicana Twister and Slice. Local brands – Lehar Evervess Soda,

Dukes Lemonade and Mangola add to the diverse range of brands.

Foods

46

PepsiCo’s food division, Frito-Lay, is the leader in the branded salty snack market and

all Frito Lay products are free of trans-fat and MSG. It manufactures Lay’s Potato Chips,

Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and

Lehar brands. The company’s high fibre breakfast cereal, Quaker Oats, and low fat and

roasted snack options enhance the healthful choices available to consumers. Frito Lay’s

core products, Lay’s, Kurkure, Uncle Chipps and Cheetos are cooked in Rice Bran Oil

to significantly reduce saturated fats and all of its products contain voluntary nutritional

labeling on their packets.

Celebrity endorsement of Pepsi:

Celebrities have been paid to advertise for Pepsi products.

47

United States

NASCAR driver Jeff Gordon who runs a Pepsi paint scheme at Talladega

Superspeedway and Auto Club Speedway. Joan Crawford was married to PepsiCo

president Alfred Steele from 1955 to 1959 (his death), and was advertising executive

and board of directors member from 1959 to 1973.

During the 1960s, Joanie Sommers sang two popular commercial songs ("It's Pepsi, for

those who think young" and "Now you see it, now you don't, oh, Diet Pepsi") for Pepsi-

Cola that were run in commercials and for which she came to be often referred to as

"The Pepsi Girl".

During 1984, Michael Jackson signed a large contract with Pepsi that has since

produced many commercials and world tours through 1993.

During the 1989 Grammy Awards telecast, Pepsi and Puerto Rican singer Chayanne

was featured in the first advertising spot in Spanish language to be broadcast on

national television without dubbing or subtitles.

In the early 1990s, Ray Charles was the star of a Diet Pepsi campaign called "You Got

the Right One, Baby," which was also known as "Uh-huh."

In 2001, Britney Spears became a spokesperson for Pepsi. Spears' contract concluded

with an advertisement with Pink and Beyonce. The ad was made featuring the cover of

the song "We Will Rock You" by Queen.

In 2005, Christina Aguilera was signed to promote the popular drink (she was previously

promoting Coca-Cola in 2000). The campaign featuring Aguilera was released in 2006,

but not in the United States. Some commercials featured singer Elissa, and some with

Aguilera by herself. PepsiCo said in a recent interview that Christina Aguilera has that

'dare for more' approach. Aretha Franklin was also a spokesperson in 1998. And also in

48

1999 Janet Jackson signed on to the original "Ask For More" campaign which featured

a song of the same name written and sung by Jackson.

In 2008, PepsiCo launched the "Cool Tones" campaign. It involved Mariah Carey, Mary

J Blige and The All American Rejects writing and performing ringtones that can be

obtained by purchasing a Pepsi bottle. Carey also recorded a commercial for the

campaign in which she performs one of her original ringtones.

Europe and the United Kingdom

For the 1988 and 1989 seasons, Pepsi was the title sponsor of Suzuki's effort in

motorcycle road racing's premier class, Grand Prix 500cc. The Pepsi livery was a new

addition to grand prix motorcycling, and a change from tobacco sponsors.

During 1988-9, Suzuki also produced a number of road going replicas of the GP bikes,

emblazoned with the same Pepsi signage as the works bikes. Due to the livery's

association with one of Suzuki's riders, the Texan, Kevin Schwantz, riders today are still

producing their own replicas as tribute.[citation needed]

Since 2001, Sakis Rouvas has been a spokesperson in the Greek and Balkan

campaign under contract with the headquarters of United Kingdom, being the only

Greek artist to have ever been proposed to represent the brand.[1]

Latin America

In Latin America, Colombian artists Shakira, and Juanes; Dominican Sammy Sosa, and

Puerto Rican Daddy Yankee have promoted the soft drink. Spanish-speaking Jaci

Velasquez did some commercials. In 2007 RBD promoted the drink in their home

country of Mexico.

Asia

49

As for Asia, celebrity and singers Show Luo, Leslie Cheung, Jay Chou, Aaron Kwok,

Jolin Tsai, Rain, Louis Koo, Nicholas Tse, F4, Faye Wong, and Kelly Chan have

appeared in several different advertisements.

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.

In India, Pepsi first used Aamir Khan, model turned actress Mahima Chaudhary and

model and ex-Miss World Aishwariya Rai to promote its product. Later it used Amitabh

Bachchan, Shahrukh Khan, Kajol, Rani Mukherjee, Saif Ali Khan, Fardeen Khan,

Akshay Kumar, Shahid Kapur (before he entered the movie world), Preity Zinta, John

Abraham, Priyanka Chopra, and Kareena Kapoor as well as the national cricket team.

Australia

In Australia, the trend has been to use local Australian celebrities to promote Pepsi

including Kylie Minogue, Jennifer Hawkins (Miss Universe 2004), Holly Valance, Harry

Kewell, Sonny Bill Williams, Delta Goodrem, Mark Philippoussis and several others.

LITERATURE REVIEW

50

Celebrity Endorsement

Erdogan (1999) in his article describe that Use of celebrities as part of marketing

communications strategy is a fairly common practice for major firms in supporting

corporate or brand imagery. Firms invest significant monies in juxtaposing brands and

organizations with endorser qualities such as attractiveness, likeability, and

trustworthiness. They trust that these qualities operate in a transferable way, and, will

generate desirable campaign outcomes. But, at times, celebrity qualities may be

inappropriate, irrelevant, and undesirable. Thus, a major question is: how can

companies select and retain the 'right' celebrity among many competing alternatives,

and, simultaneously manage this resource, while avoiding potential pitfalls? This paper

seeks to explore variables, which may be considered in any celebrity selection process

by drawing together strands from various literatures.

Athletes and sporting products:

In 1995, U.S. companies paid more than one billion dollars to 2000 athletes for

endorsement deals (Lane, 1996). This means that approximately ten percent of the

expenditure on corporate sponsorships is spent on this specific promotion strategy. The

combination of basketball superstar Michael "Air" Jordan and Nike has become the

sports business euphemism for "a perfect fit" (Amis, Pant & Slack, 1997). By early 1993,

one in three pairs of athletic shoes sold in the United States were made by Nike, with

"Air Jordan" shoes and apparel contributing more than US$ 200 million a year in sales

to the Nike empire (Katz, 1994). Sport specific products and non-sport specific products

According to Veltri and Long (1998), athletes will usually pursue two types of

endorsements: "sport specific products" and "non-sport specific products". Sport specific

products are defined as articles necessary for the athlete to play his or her sport (shoes,

racquets, clothing, etc.). Non-sport specific products include all other products or

services not related to the sport itself (cars, cosmetics, etc.). According to O'Mahony

and Meenaghan (1997/98), consumers' response to endorsement messages is linked to

51

relatedness, which means that the more the athlete is related with the product, the more

effective the endorsement is. This largely emphasizes the importance of elite-level

athletes as endorsers for athletic shoe companies (producing sport specific products),

which are unquestionably the largest spenders on endorsements.

On the other hand, when an athlete has an endorsement-deal with a producer of non-

sport specific products it is crucial that there is an appropriate "image match" between

the athlete or the sport in which he's involved and the brand. For example, for a

company such as Mercedes it would be appropriate to sponsor a golf player, because of

the shared perceptual characteristics (Milne & McDonald, 1999).

Many of today's top professional athletes have signed sport specific endorsement

contracts with sport apparel companies (Tedeschi, 1995). Beside Michael Jordan, other

examples of high profile celebrity endorsers include Tiger Woods, Andre Agassi, Pete

Sampras and Renaldo for Nike, Shaquille O'Neal for Reebok, Earvin "Magic" Johnson

for Converse, Donovan Bailey for Adidas and Lindford Christie and Merlene Ottey for

Puma. In Europe the most eminent cases are situated in soccer: del Pierro, Zidane,

Beckham and Kluivert as the showpieces of Adidas and Alan Shearer as the holder of a

multi-million contract with Umbro.

Some international sport celebrities have their own signature line of products,

specifically designed to their individual characteristics and preferences. Again, the "Air

Jordan" brand of Nike, characterized by the magic number 23 and the image of a

dunking basketball player instead of the 'Swoosh' symbol, can be considered to be the

best example. Through a careful promotional campaign, Nike made its "Air Jordan"

range of athletic footwear the biggest selling athletic shoe of all time (Amis et al., 1997).

Other signature products include the idiosyncratic golden spikes of Johnson, Renaldo’s

'R9 Mercurial' soccer boots and the diverse apparel and footwear lines inspired by the

personalities of Sampras, Agassi and Woods.

Endorsement as a marketing strategy :

Endorsement objectives

52

According to Segers (1992), the majority of Belgian companies are considering sport

sponsorship and athlete endorsements in particular, as a marketing tool to boost

communication with existing and potential consumers. The use of celebrities as a

marketing strategy contributes to brand name recognition and creates a positive

association with the endorsed product (McCarville & Copeland, 1994; McCracken,

1989; Segers, 1992). In general, endorsements may serve both awareness and image

functions as a contribution to brand equity. The value for the sponsorship dollar is

increased as the sponsorship is used as an identity-enhancing vehicle as well as a

name-awareness tool (Milne & McDonald, 1999).

Most of the endorsement objectives can be categorized according to the general

classification scheme of Sandler and Shane (1993). These researchers identified three

broad categories of sponsorship objectives for business: broad corporate objectives

(image based), marketing objectives (brand promotion, sales increase) and media

objectives (cost effectiveness, reaching target markets). A more recent trend identified

by Thwaites, Aguilar-Manjarrez and Kidd (1998) views sponsorship as an effective

mechanism for developing image and awareness through its use as a focus for

community involvement, particularly in support of grassroots initiatives. Consequently,

this new category, community based objectives, should be added to the framework of

Sandler and Shani (1993).

Celebrities as Spokespersons:Companies frequently use spokespersons to deliver their advertising message and

convince consumers of their brands. A widely used and very popular type of

spokesperson is the celebrity endorser (Tom et al., 1992). According to Agrawal and

Kamakura (1995) celebrities make the advertisements believable and enhance the

message in the minds of the consumers. Furthermore, celebrities increase awareness

of a company’s advertising, creating a positive feeling towards the brand. Thus using a

celebrity in a company’s advertising is likely to have a positive impact on the

consumers‟ brand perception and purchase decision. One of the main reason behind

the popularization of celebrity used in advertisements is the company’s belief that the

53

message when delivered by well-know personality will achieve a high degree of

attention and recall (Hainan, 1991). This only happens when there is an appropriate

connection between the celebrity and the product endorsed or when the celebrity’s

represents of some aspect of product endorsed.

Early researches have shown that about 20 percent of all television commercial use

celebrity as their endorsers and increasing competition for seeking consumers‟ attention

has encouraged marketers to use attention- creating media stars to assist in product

marketing (Erdogan, 1999). Marketers believe that using popular celebrity can effect

consumers feeling and their purchase intention and also believe celebrity to influence

consumers‟ persuasion of the product according to the image of it (Belch & Belch,

2001). Use of celebrity as endorsers may have a significant positive impact.

Another very prominent drawback of celebrity endorsements is the „Vampire Effect‟ or

the celebrity overshadowing the brand (Kulkarni and Gaulkar, 2005). This happens

when the audience forgets the brand advertised and concentrates more on the celebrity

endorsing the brand. As Cooper (1984) states in his study, “the product, not the

celebrity, must be the star” Similarly another problem is celebrity greed and

overexposure, when a celebrity becomes an endorser for many diverse products

(Erdogan, 1999).

Tripp et al. (1994) and Redenbach (2005) both investigated and suggested that when

as many as four products are endorsed, celebrity credibility and likeability, as well as

attitude towards the ad, may be taken carelessly.

In conclusion the good match with product and celebrity can make the advertising more

believable, can improve the brand recognition, create a positive attitude towards the

brand name and create a distinct personality for the brand (Agrawal & Kamakura 1997).

Alperstein 1991says that “Traditional celebrity endorsements are as well established as

the concept of celebrity itself.”(Anonymous, 2007).Celebrities influence on consumers

appears to be larger than ever before. When used effectively celebrity endorsers have

the potential of serving a valuable role in enhancing a brand’s competitive position and

54

developing brand equity. Till 1998.Schikel (1985) highlights the subtle yet intense

impact of celebrities on everyday thinking and living. Defined as ‘intimacy at a distance’,

it is seen that individuals have a tendency to form illusions of an interpersonal

relationship with celebrities.

Horton &Wohl 1956 describe that A person who enjoys public recognition from a large

share of a certain group of people and uses this recognition on behalf of a consumer

good by appearing with it in advertisements is known as a celebrity. McCraken 1989

says that They are usually known to the public for their accomplishments in areas other

than the product endorsed by them. Friedman &Friedman 1979 says that This stands

true for classic forms of celebrities such as actors like Shah Rukh Khan, models like

Milan Somen, Sports athletes like Sachin Tendullkar and entertainers like MaliakaArora

Khan but also for less obvious groups such as businessmen like the Ambani’s or

politicians like Rahul Gandhi

Schlecht 2003 say that In India especially, it is not difficult to find motives for the

increasing use if celebrities in advertisements as Indians have always been in awe of

the stars of the celluloid world. Unlike the foreign counterparts they have always

consecrated them and placed a halo behind their heads implying that their celebrities

could do no wrong. (Anonymous, 2001). Indeed, some people are seen to admire,

imitate, and become besotted with their favorite celebrities,

Celebrities as a form of Aspirational Reference Group

From a theoretical perspective, celebrities are considered to be effective endorsers as

because of the presence of their symbolic desirable reference group alliance. Soloman

and Assael, 1987Assael 1984 suggests that the effectiveness of the celebrity

endorsement is present because of its ability to tap into the consumer’s symbolic union

with its aspirational reference group

Menon describe that Reference groups among consumers are viewed as being a

critical source of brand meanings as it helps them to evaluate their believe about the

world particularly with others who share the same beliefs or are similar on relevant

55

dimensions. Consumers form associations between reference groups and the brands

they use and transfer this meaning from brand to self and one 14

Today celebrity endorsement is being seen more and more as an integral part in an

integrated marketing communication strategy. Hamish and Pringle (2004) suggest 3

macro factors present in the market today that in principal justifies the validity of

celebrity endorsement as a promotional strategy. The first factors the increasing

opportunity for interactivity between brands and their consumers. Second is the “era of

consent” situation present today where consumers have more control over the

messages they receive. And lastly is the increasing media fragmentation and

commercial communication clutter.

Temperley and Tangen, 2006 Pappas (1999) examined the value of star power in an

endorsement and pointed towards how a well-designed advertising helped celebrities

convert their star power into brand equity

Celebrities are deemed to be referents by consumers, which refers to imaginary or

actual individuals envisioned to have significant bearing on the consumer’s evaluations,

aspirations and behaviour. The power of the celebrities lies in these influences that they

exert on consumers, even though they themselves are physically and socially distant

from an average consumer

Choi & Rifon, 2007 said that Consumers have a tendency to form an attachment to any

object that reinforces one’s self identity or desired image, renders feelings of

connectedness to a group or to any object that elicit nostalgia, and perhaps the most

vivid example of this form of attachment maybe found in the consumers preoccupation

with the celebrities. (O’Mahony and Meenaghan, 1998).

56

Pros of celebrity endorsement

Academic researchers have conducted sufficient empirical research to express the

benefits of product endorsement, in addition to the intuitive arguments that rationalize

this practice.Till and Shimp, 1998 says that It is observed that the presence of a

renowned persona helps in solving the problem of over communication that is becoming

more and more prevalent these days

Kulkarni & Gaulankar, 2005) says that The increased consumer power over

programmed advertisement has made advertising has made advertising more

challenging. To ease this threat and to help create and maintain consumer attention to

advertisements celebrity endorsement strategy is seen to be advantageous. Celebrities

have the potential of helping the advertisements stand out from the surrounding clutter,

guiding towards a improved communicative ability by cutting through excess noise in a

communication process( Sherman 1985). Also one probable solution in the face of

tarnished company image is the hiring of a celebrity to restore it. Celebrity Endorsement

assists in the image polishing of the company’s image

Erdogan, 1999 in his theory says that A stream of studies identifies the attributes such

trustworthiness, similarity, likableness, expertise that cause a celebrity to stand as a

persuasive source which in turn creates a sense of certainty.(Mustafa 2005). It is shown

by research and experience that consumers are highly ready to spend and more

comfortable , when products that relate to their desired image is endorsed by

celebrities. (Internet World 2001) as it helps them to take more notice of celebrity

endorsements and improve their level of product recall.

Bowman 2002 says that Another reason for the use of celebrity endorsement is

because it has a strong impact on the learning style and memory which is critical to

marketing communication success. This is because most consumers are not in a

purchasing situation when they come into contact with the brand message.

Schultz & Barnes, 1995 Marketers make use of celebrity endorsements as they lead to

better information storage in the minds of the consumers which can be readily retrieved

when the purchasing situation dose arise

57

Selecting the ‘Right’ celebrity

Shimp (2000) put forward five factors in order of decreasing importance namely, (1) the

celebrity credibility, (2) celebrity and audience match-up, (3) celebrity and brand match

up,(4) celebrity attractiveness, and (5) miscellaneous considerations, which were

considered by advertising executives while making their celebrity-selection decisions.

Models and 20 concepts were constructed by scholars to draw the liaison between

celebrities, the brand they endorsed and the perception of the people related to the

product.

Khatri, 2006 says that One of the earliest models was the Source Credibility Model by

Hovland et al. (1953). Apart from this there were 3 additional models recognised by

Erdogan (1999) which were the Match-up Hypothesis by Forkan (1980), the Source

Attractiveness Model by McGuire (1985) and the Meaning Transfer Model by McCraken

(1989). The following part will take a closer look at the stated considerations and the

associated models.

Celebrity Endorsement – Indian Perspective

Celebrities are involved in endorsing activities since late nineteenth century Erdogan,

1999 says that The latter part of the '80s saw the mushrooming of a new trend in India;

brands started being endorsed by celebrities (Katyal, 2007) says that The advent of

celebrity endorsements in advertising in India began when Hindi film and TV stars as

well as sportspersons began making inroads on a territory that was, until then, the

exclusive domain of models

Kulkarni and Gaulkar, 2005 describe that One of the first sports endorsements in India

was when Farokh Engineer became the first Indian cricketer to model for Bryl cream

(Kulkarni and Gaulkar, 2005). Probably Lux the soap brand has managed to realize and

made it synonyms with celebrity endorsement in India till date (Katyal, 2007).

58

Early instance of celebrity endorsing brands in stars featuring like Tabassum (Prestige

Pressure Cookers), Jalal Agha (Pan Parag), Kapil Dev (Palmolive Shaving Cream) and

Sunil Gavaskar (Dinesh Suitings) (Roy, 2006) shows the increase in celebrity

endorsement advertisements since 2003 and 2007. This clearly indicated the growth

and acceptance of celebrity endorsements on the Indian television. In fact, celebrity

endorsement is growing at six times in volume terms between 2003 and 2007.

The equity effect of product endorsement by celebrities: a conceptual framework from a

co-branding perspective

Diana Seno, Bryan A. Lukas Exploring the relationship between Celebrity endorser

effects and advertising effectiveness A quantitative synthesis of effect size

Clinton Amos, Holmes,David Strutton give a theory in This study provides a quantitative

summary of the relationship between celebrity endorser source effects and

effectiveness in advertising. The Kruskal-Wallis nonparametric test is used to identify

the most influential celebrity endorser source effects on effectiveness. The role of

celebrity/product fit, interaction effects, sample type, study setting, and country of study

are also included as moderators. Results suggest negative celebrity information can be

extremely detrimental to an advertising campaign. The source credibility model

composed of celebrity trustworthiness, celebrity expertise, and celebrity attractiveness

appears to capture the three most influential source effects on purchase intentions,

brand attitudes and attitudes towards the advertisement.

An Exploratory Study in Celebrity Endorsements by Subhadip Roy This study raises

three questions and attempts to provide tentative explanations for them. The first two

questions relate to locating, in the consumer's perceptual space, the relative position of

Indian celebrities and brands on a set of personality attributes. The third question

relates to determining the fit between the celebrity and the brands endorsed by her/him.

The results suggest that consumers differentially rank both celebrities and brands.

Specifically, Amitabh Bachchan ranks high on five personality attributes, and brands

such as Pepsi and Coke rank high on four personality attributes. The study further

shows that although celebrities may endorse several brands, their personality does not

59

fit well with the personality of the brand they endorse. Evidence offered here supports

the basic assumptions of the celebrity–product congruence model.

Celebrity endorsement: A strategic promotion perspective by Dr. Khatri Puja, Faculty

member Apeejay School of Management, Dwarka, in her research explains that The

celebrity endorser is a panacea for all marketing woes. It is today a frequently used

approach in marketing for all brand building exercises. The star appeal however needs

to be perfectly blended intelligently and strategically to reap the benefits and make

brands. It serves as an aid to expedite recall and influence purchase. But can also be a

nightmare unless accompanied by a powerful idea, effective and impeccable

positioning.

Impact of Celebrity Endorsement on Consumer Buying Behaviour and Brand Building

study by Dinesh Kumar Gupta , 2007 explain that the field of consumer behavior is the

study of individuals, groups or organizations and the processes they use to select,

secure, use and dispose of product, services, experiences, or ideas to satisfy needs

and impacts that these processes have on the consumer and society. And

understanding the consumer behavior is the prime and toughest task in front of every

marketer. There are a lot of factors, which influence consumer buyer behavior.

What therefore seems relevant by the study is that, yes, definitely celebrity endorsee

influence consumer buying behavior and brand building but while using celebrity

endorsee, marketer has to take care of all the aspect that whether the brought

personality and image of celebrity matches or not, whether celebrity endorsee has deep

penetration among the masses or not, whether he is considered as credible source or

not etc.

The Value of Celebrity Endorsements: A stock Market Perspective Alexander

Molchanov - Ecole Doctorale Sciences de Gestion says that Are celebrity

endorsements worthwhile investments in advertising‘ To answer this question we

60

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analyze a unique sample of 101 announcements made between 1996 and 2008 by

firms listed in the US. Internet is the main medium of communication for these

announcements. We employ event study methodology and document statistically

insignificant abnormal returns around the announcement dates. This finding is

consistent with the notion that the incremental benefits from celebrity

endorsementsclosely match the incremental costs due to such contracts. Further, we

investigate if the announcement date return depends on a number of characteristics that

are often used in the endorsement literature. As a result, we find that endorsements of

technology industry products coincide with significant positive abnormal returns around

the announcement dates. Finally, we find weak support for the match-up hypothesis

between celebrities and endorsed products.

The Effectiveness of Celebrity Endorsement in India :

Rajni Surana 2008 research that practice of celebrities being used for rendering

services other than performing their actual job as either an actor or an athlete, such as

endorsements has proliferated over time. Despite the cost and the risks involved with

this technique of advertising, it is been used quite extensively in the present era. The

instrument of celebrity endorsement has nowadays become a pervasive element in

advertising and communication management. India as a country is known for loving its

stars. The Indians idolize their boll wood actors and cricketers. The advertisers see this

as an opportunity to grab and work on so as to expand their operations and promote

their product. This dissertation focuses on examining the perception of these Indian

Consumers about the celebrity endorsement process and the subsequent impact on

their purchase decisions,

61

The Impact of Corporate Credibility and Celebrity Credibility on Consumer Reaction to

Advertisements and Brands:

Goldsmith, Lafferty and Newell (2000), "The Impact of Corporate Credibility and

Celebrity Credibility on Consumer Reaction to Advertisements and Brands says that

Whether Celebrity endorsement has a positive or a negative impact on the brand is a

debate that is open to interpretation. But till the time the corporate world continues to

foot fancy bills of celebrity endorsers and till consumers continue to be in awe of the

stars, the party is not likely to break up.

Nord and Peter 1980 says that There are many factors which interact to explain the

effectiveness of celebrity endorsement. Vicarious learning is a behaviour modification

concept through which consumers’ behaviours are influenced by observing the actions

and consequences of others This is seen in celebrity endorsement with companies

frequently endorsing celebrities who possess aspirational qualities and who may be

seen engaging in desired behaviors and receiving product benefits. This results in

consumers exhibiting desired behaviors learned through observation. Sarah Ulmer, an

Olympic Gold medalist, and her endorsement of McDonalds healthy options menu in

New Zealand is an example of the use of an aspiration celebrity to influence behaviors.

The celebrity’s effectiveness stems from their symbolic asp rational reference group

associations Solomon and Assael1987, as cited in Byrne, Whitehead and Breen 2003

Reference groups provide points of comparison through which the consumer may

evaluate attitudes and behavior, with the typical consumer symbolically aspiring to

identify with this group by purchasing the product endorsed by the celebrity(Kamins

1990).Initial studies used ‘source models’ to explain the effects of celebrity endorsers. In

particular, the source credibility model (Hovland and Weiss 1951) and the source

attractiveness model (McGuire 1985) have been validated by many scholars.

Thesemodelspropose that celebrities owe their effectiveness to their credibility and

attractiveness, which includes elements such as expertise, trustworthiness, familiarity,

similarity and likeabilityofthe source (McCracken 1989).

This is similar to Tom et al’s (1992) suggestion that celebrities’ ability to influence

consumers lies in their possession of various types of power(expert, reverent,

62

legitimate, coercive, and reward power).McCracken (1989), however, argues that while

the source models are a necessary part of understanding the endorsement process,

they cannot adequately explain the fundamental features of the endorsement process,

and fail to acknowledge that celebrities are highly

BRAND EQUITY:

Analysis of brand recognition study Natasha kashni says that The beverage industry

has been rapidly expanding over the last century, and currently includes avariety of

smaller beverage markets. Functional Beverages have been the newest addition to the

beverage industry and Function Drinks is only one of the major companies operating in

this market segment. The objective of this study is to assess the current level of brand

recognition for Function Drinks among college consumers.

The main focus behind this research is to assist the company increase the level of

consumer’s brand identification for their company and products through various forms of

marketing, advertising, and promotional strategies. It is in the best interest of the

company to analyze the data collected and offer insight that will not only increase the

level of brand identification, but inadvertently Increase the profitability of their company.

“The differental effect of celebrity and expert endorsement on on consumer risk

perception” This article focuses on the effects of celebrity and expert endorsements on

the perception of risk on the part of consumers. It is theorized that expert endorsers will

have a stronger effect than celebrity endorsers in reducing a consumer's sense of risk

regarding high technology-oriented items. An interaction effect between the type of

endorser and consumer knowledge on risk perception is expected. This interaction is

thought to be absent for products with a low-technology orientation. Two studies

demonstrate these findings. In a third study, a stronger effect of expert over celebrity

endorsers for high technology-oriented products is somewhat neutralized for certain

types of perceived risks when there is a strong connection between the celebrity

endorser and the product.

63

Study on Impact of Celebrity Endorsements on Brand Image byDebiprasad Mukherjee

2009 says that Celebrity endorsement has been established as one of the most popular

tools of advertising in recent time. It has become a trend and perceived as a winning

formula for product marketing and brand building. It is easy to choose a celebrity but it is

tough to establish a strong association between the product and the endorser. While the

magnitude of the impact of celebrity endorsement remains under the purview of gray

spectacles, this paper is an effort to analyze the impact of celebrity endorsements on

brands.

Objective of this article is to examine the relationship between celebrity endorsements

and brands, and the impact of celebrity endorsement on consumer's buying behavior as

well as how consumer makes brand preferences. This paper proposes a 20 point model

which can be used as blue-print criteria and can be used by brand managers for

selecting celebrities and capitalizing the celebrity resource through 360 degree brand

communication which, according to this paper, is the foundation of the impact of

celebrity endorsement. Celebrity endorsement is always a two-edged sword and it has a

number of positives - if properly matched it can do wonders for the company, and if not

it may produce a bad image of the company and its brand.

The Impact of Celebrity-Product Incongruence on the Effectiveness of Product

Endorsement.:research paper byLee, Jung-Gyo this study examines how different

degrees of celebrity--product incongruence influence the persuasiveness of celebrity

endorsement. Schema-congruity framework provides the theoretical basis for suggesting

that a moderate mismatch between a celebrity's image and a product's image would

produce more favorable responses to advertisements than either a complete match or

an extreme mismatch. This study also looks at how consumer characteristics, namely

an individual's own levels of enduring involvement with a product category, moderate

schema congruity effects. Two experiments were conducted to test these issues using

two types of match-up factors: physical attractiveness and expertise of a celebrity

endorser. The results show that celebrity endorsements are evaluated more favorably in

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terms of purchase intention when there is a moderate mismatch than when there is

either a complete match or an extreme mismatch..

A Study on the Effect of Cause-Related Marketing on the Attitude Towards the Brand:

The Case of Pepsi in Spain.:by Garcia, Inaki Gibaja, Juan J. Mujika, Alazne Examines the

effect of cause related marketing (CRM) on attitude towards the brand. Effectiveness of

CRM in differentiating brands; Analysis of Pepsi's CRM campaigns in Spain; Factor that

would make CRM campaigns lead to adverse effects.

Simon, Carol J. Sullivan, Mary W. in their research paper of The measurement and

determinants of brand eqiuity : A financial in This paper presents a technique for

estimating a firm's brand equity that is based on the financial market value of the firm.

Brand equity is defined as the incremental cash flows which accrue to branded products

over unbranded products. The estimation technique extracts the value of brand equity

from the value of the firm's other assets. This technique is useful for two purposes. First,

the macro approach assigns an objective value to a company's brands and relates this

value to the determinants of brand equity. Second, the micro approach isolates changes

in brand equity at the individual brand level by measuring the response of brand equity to

major marketing decisions. Empirically, we estimate brand equity using the macro

approach for a sample of industries and companies. Then we use the micro approach to

trace the brand equity of CocaCola and Pepsi over three major events in the soft drink

industry from 1982 to 1986.

Aurgon 2002 presents information on the top sports endorsers in 2002 compiled by

Burns Sports & Celebrities. Golfer Tiger Woods made $70 million last year from

appearances and endorsements. He is the number 1 endorser in terms of popularity

with advertisers and income earned annually, says Burns President Bob Williams. His

past and present endorsements include American Express, Accenture, Buick, EA

Sports, Nike, Rolex, Tag Heuer, Target, and Titleist. Basketball player Michael Jordan

at his peak could pull in $50 million a year in endorsements. Present and past

endorsements of Jordan include, Ball Park Franks, Gatorade, Hanes, McDonald's, MCI

WorldCom, Nike and Rayovac. Tennis trophies have eluded the 22-year-old tennis

player Anna Kournikova, but endorsement deals have not. Her past and present

65

endorsements include Adidas, Berlei's Multiway sports bra and Xbox. Basketball player

Shaquille O'Neal's past and present endorsements include Burger King, Digex,

Electronic Arts, Microsoft, Nestle, Pepsi-Cola, Radio Shack, Reebok, Spalding, Starter

and Taco Bell. Skateboarder Tony Hawk's past and present endorsements include

Activision, Coca-Cola, Diet Mountain Dew, Frito-Lay's Go Snacks, Gatorade, H.J. Heinz

Companies' Bagel Bites and Hot Bites, McDonald's, Pepsi-Cola, Quiksilver.

WOW! YAO!

Lowry, Tom Roberts, Dexter Focuses on Yao Ming, who is going into his third season

with the NBA. The potential of the Houston Rockets center who was born in Shanghai;

His popularity as a spokesman for various products, including Pepsi; How he spent his

24th birthday with coach Anthony Falsone; Idea that he could influence bilateral trade

between the United States and China; The timing for Yao to promote products in China;

His "star power"; Purpose of the two NBA preseason games against the Sacramento

Kings in Shanghai and Beijing; Concern that Yao could be overexposed; Career

highlights with the NBA; Deals he has made in the United States and China; Managers

of the Yao enterprise: Bill A. Duffy, Bill Sanders, John Huizinga, M. Erik Zhang; The

five-year marketing plan of Team Yao; How the team developed at a business school;

Yao Ming's views on his earning power; Indication that he lives in a gated community in

Houston; The agreement he had to make with China in order to play in the U.S.

INSETS: RED STARS RISING;YAO MING;THE YAO EFFECT.

ENDORSEMENT OF PEPSI:

Pepsi seeks healthier brand for Beckham tie-up. (cover story)

by Bokale, Jemima The article reports on the need for Pepsi to find a healthier brand

to be promoted by David Beckham in order to close their global sponsorship deal in

Great Britain. According to the article, the football star could only walk away from the

contract if a suitable brand is found. In addition, it states that Beckham is planning to

introduce his own water brand and a range of healthy products.

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And Hello, A-Listers!

Article by Haines-Stiles, Sasha in this they say that celebrities who are endorsing

products. After an unlikely move into infomercials, what's next for A-list celebrities?

Regular commercials. Some of the biggest names in entertainment now clamor for the

profile (and cash) afforded by a TV ad--and that's good news for marketers. Ten years

ago it took many millions of dollars to coax a major star into an endorsement deal, but

today's glut of high-profile spokesmen has resulted in bargains to be had. P. Diddy took

less than $1 million to hitch a ride in a Pepsi truck in his much-ballyhooed Super Bowl

spot. Here is a look at some star-studded alliances: Catherine Zeta-Jones: T-Mobile.

$20 million for four years as the face of the wireless phone company. Nicole Kidman:

Chanel. $8 million for one-year ad run with serious Oscar pedigree (Baz Luhrmann

directed). Brad Pitt: Heineken. $5 million for one ad's overseas run; $1 million more for

its sole U.S. airing in this year's Super Bowl.

Pepsi Makes a Date with Destiny's Child: by Hein, Kenneth DESTINY'S Child

(Performer) Reports on the deal between Pepsi-Cola Co. and Destiny's Child to

promote the brand. Celebrities who are endorsing the brand; Advertising spending of

the company through November 2003; Lead advertising agency of the company. Pepsi

has been pleased with the partnership with the pop diva, who was one of the top artists

of the year, chalking up five Grammy wins, and has dominated play lists on MTV and

radio. Destiny's Child originally broke up in 2001 as Knowles, Kelly Rowland and

Michelle Williams sought solo efforts

STAR POWER: article by Bruss, JillSource Focuses on the celebrity endorsements to

beverage products in the United States. Details on marketing strategy of Pepsi

company; Factors affecting the effectiveness of celebrity endorsements; Influence of

celebrity to brand and the campaign execution; Information on the marketing approach

of 7 UP campaign.

67

“People have to logically connect a celebrity to a brand,” says Stuart Kirby, national

spokesman for Diageo's Malibu Coconut Flavored Rum. “They have to personally

endorse the brand.” When creating a successful celebrity endorsement it is imperative

to examine the relevance of that person to the brand or group of consumers, Kirby

warns, as it's ineffective to just attach a big name to a product that doesn't make sense.

“The very first step is to look at what the program is sans celebrity,” he says. “You have

to see if it is strong enough, even if there isn't a celebrity involved. You need to have a

fortified, stand-up program that can work alone and be enhanced by a celebrity. “By

adding a celebrity component, you should only enhance a campaign or program, not

overshadow it,” he says.

For Pepsi, teenage idol Spears has fit the profile for attracting a young audience, but as

Spears grows, Pepsi intends to re-image her as more grown up, according to a report in

USA Today. Dawn Hudson, senior vice president of strategy and marketing at Pepsi,

told the paper that “Britney Spears is in transition from kid star to broad-based pop star.

She's going to surprise a lot of people.” After the March 2002 Academy Awards

presentation, Pepsi is expected to roll with a new slew of television spots and print ads,

as well as point-of-purchase materials with Spears on them.

Pepsi advertising, viewed from the client perspective: article by McDonough, John

Presents an interview with Alan Pottasch, the creative consultant for PepsiCo. Thoughts

on the relationship between PepsiCo and its advertising agency, BBDO; Thoughts on

the Pepsi challenge; What the company looks for in terms of celebrity endorsements;

Obligations Pottasch has toward the company; Management decisions he has made,

which have changed the company.

PepsiCo’s yongistaan advertisement another trendsetter in yhe youth marketing arena

by KISHLOY ROY This study explain Pepsi’s advertising. The present study examines

how different degrees of celebrity--product incongruence influence the persuasiveness

of celebrity endorsement. Schema-congruity framework provides the theoretical basis

for suggesting that a moderate mismatch between a celebrity's image and a product's

68

image would produce more favorable responses to advertisements than either a

complete match or an extreme mismatch

PATRICIA Source in his research of PEPSICO’S NEW GENERATION Profiles Roger

Enrico, the new chief executive officer of PepsiCo. Enrico the pioneer of the use of

celebrities to endorse soft drinks; The former president of Pepsi-Cola USA; A look at his

background and childhood in Minnesota; His 1990 heart attack; The possibility that

Enrico will unload PepsiCo’s restaurants; Anticipation of major management changes.

Lord, Kenneth R. Putrevu, Sanjay examines the relationship between dimensions of

celebrity endorser credibility (attractiveness, expertise, trustworthiness) and consumer

motivation (informational and transformational). Studies 1 and 2 reveal celebrity

expertise and trustworthiness are the primary determinants of informational processing,

while attractiveness is the principal variable driving transformational processing. The

third study finds that teenage consumers, though affected by informational and

transformational motivations, are less likely than adults to discriminate between

attractiveness, trustworthiness, and expertise, forming their judgments instead on the

basis of a one-dimensional perception of celebrity credibility.

Mutel, Glen present Pepsi spots top list of ads covered by press ArticleReports on the

press coverage won by sportsman David Beckham's advertising campaigns for soft

drink company Pepsi Co. Other advertisements which got adequate press coverage;

Advertisements which did not feature any celebrity and yet made to top rankings; Effect

of the presence of celebrities in the advertising campaigns.

Mark Britt explain Pepsi to be soft drinks' big blue. Reports that Pepsi-Cola Co. plans to

phase in a new, blue can design, similar in appearance to its Pepsi Max packaging, to

its worldwide market. The success of Pepsi Max in Europe; Plans for a contoured can,

which presents some shipping and handling difficulties; Plans for a splashy, celebrity-

filled advertising campaign to support the new blue can.

69

EFFECT OF ENDORSEMENT ON PRODUCT:

Pepsi Makes Heavy Play In Sports Marketing Field.

the article presents an interview with Ralph Santana, who is vice-president of sports,

media, and interactive marketing at Pepsi-Cola North America. In the article Santana

discusses sports marketing, activation and the pros and cons of athlete endorsements.

Santana explains that athlete and celebrity endorsements are important depending on

the product. When asked about the challenges facing sports marketing, he explains that

the space has become crowded and difficult to break through.

Rohit Suresh Jain 2007-2008 A Study on the Impact of Celebrity Endorsement on the

Indian Consumers‟ Purchase Decision: in this

A dissertation presented in part consideration for the degree of “MA Marketing”.

The focus of this dissertation is to understand the impact of celebrity endorsement on

the consumers purchase decision. The research focuses on the Indian consumers who

have shown a very different yet interesting way of recognising celebrities and stars. In a

place like India where stars and cricketers are idolised and looked up to, marketers can

see this opportunity promote their products and create a wider consumer base. The

study uses a qualitative research style to collect data, using interviews as the form of

data collection method. This research helps providing how celebrity endorsement

impacts on the Indian consumers purchase decision Eisend, Martin Viadrina Tobias say

that Immediate and delayed advertising effects of celebrity endorsers' attractiveness

and expertise

The article presents research on the effectiveness of endorsements by celebrities in

advertising. Delayed effects of celebrity endorsements on consumers are considered,

applying an affective-cognitive framework to compare delayed effects versus the

immediate effects of a celebrity's attractiveness to consumers and perceived expertise

on consumer attitudes towards brands and brand name products. It is found that while

the attractiveness of a celebrity had the most immediate effect on those attitudes,

perceived expertise provided the longest-lasting positive effect on consumer attitudes.

70

White, Darin W. Goddard, Lucretia 1Wilbur, Nick say that The effects of negative

information transference in the celebrity endorsement relationship paper is to test

empirically the impact of negative information about a celebrity spokesperson on

consumers' perceptions of the endorsed brand. In addition, it is the first study to

examine the reverse relationship: the impact of negative information about the brand on

the celebrity endorser. - The present study provides a starting-point for further research,

on negative information transference in the celebrity endorsement relationship. Practical

implications - It is crucial that retailers be aware of the risks associated with using

celebrities to endorse their stores and products. Given that these results provide

tentative support for the commonly held belief that a decline in the celebrity's image can

impact the image of the brand, it is important that retailers carefully choose an endorser

who currently has a good image and will likely be able to uphold this image in the future.

Originality/value - The paper introduces and empirically examines one explanation of

how negative information may impact the celebrity advertising process.

Tripp, Thomas D. Jensen in their paper on The Effects of Multiple Product

Endorsements by Celebrities on Consumers' Attitudes and Intentions investigated the

effects of number of products endorsed by a celebrity and number of exposures to the

celebrity on consumers' attitudes and purchase intentions. In study 1, using print ads as

the Stimuli, the results revealed that, as the number of products endorsed increases

consumers' perceptions of celebrity credibility, celebrity likability and attitude toward the

ad become less favorable. These results were independent of the number of exposures

to the celebrity. Study 2 explored underlying attribution processes associated with

consumers' perceptions of multiple product endorsers using depth interviews. The

findings are discussed from attribution and repetition theory perspectives.

Stallen, Mirre present the paper on Celebrities and shoes on the female brain: The

neural correlates of product evaluation in the context of fame.The present study

investigates which processes underlie the effect of fame on product memory and

purchase intention by the use of functional magnetic resonance imaging methods. We

find an increase in activity in the medial orbitofrontal cortex (mOFC) underlying the

processing of celebrity–product pairings. This finding suggests that the effectiveness of

71

celebrities stems from a transfer of positive affect from celebrity to product. Additional

neuroimaging results indicate that this positive affect is elicited by the spontaneous

retrieval of explicit memories associated with the celebrity endorser. Also, we

demonstrate that neither the activation of implicit memories of earlier exposures nor an

increase in attentional processing is essential for a celebrity advertisement to be

effective. By explaining the neural mechanism of fame, our results illustrate how

neuroscience may contribute to a better understanding of consumer behavior.

Halonen-Knight, Elina1Hurmerinta, Leila describe that Who endorses whom? Meanings

transfer in celebrity endorsement Celebrity endorsement is one of the most popular

forms of marketing, and this study aims to suggest that celebrity endorsement should be

considered as a brand alliance, where meanings and values can transfer from either

partner to the other. This paper seeks to report on an exploratory attempt to identify the

processes involved and explore whether celebrity endorsement should be considered a

brand alliance. Design/methodology/approach - After a review of both celebrity

endorsement and brand alliance literature, a case of meaning transfer process was

examined.

The collaboration between Sainsbury's Supermarkets Ltd and celebrity chef Jamie

Oliver was studied as a case, within which a special episode of negative publicity

emerged and was analysed through newspaper articles. Findings - A model for a

reciprocal meaning transfer process is proposed and the existence of a brand-alliance-

like relationship in the case is established. Originality/value - The paper is the first

qualitative study to examine meaning transfer process in a real life celebrity

endorsement context. It indicates the need for managing celebrity endorsement as a

brand alliance by suggesting that celebrity endorsement should be considered as an

alliance of equals. A model illustrated and supported by a case study is proposed.

 Endorsement Theory: How Consumers Relate to Celebrity Models by Marshall,

Roger1zNa, Woonbong The relationship of image congruity and postpurchase

dissonance has been reported in the advertising literature. The relationship among

dissonance, dissatisfaction, and repeat-purchase behavior is a familiar subject as well.

But the juxtaposition of all three constructs has yet to be fully explored. In this research,

72

the incongruity between self-image and the image projected by an advertisement is

found to correlate to postpurchase dissonance in the purchasers of lipstick. A follow-up

study tracks satisfaction and repeat purchase intentions, and through structural

equation modeling, it is established that although satisfaction is not related directly to

dissonance, repeat purchase is dependent upon both satisfaction and dissonance.

Celebrity endorsement in highly involved regime: 

Tellis (1998) says that Despite the obvious economic advantage of using relatively

known personalities as endorsers in advertising campaigns, the choice of celebrities to

fulfill that role has become common practice for brands competing in today's cluttered

media environment. There are several reasons for such extensive use of celebrities.

Because of their high profile, celebrities may help advertisements stand out from the

surrounding clutter, thus improving their communicative ability. A brief assessment of

the current market situation indicates that celebrity endorsement advertising strategies

can, under the right circumstances, indeed justify the high costs associated with this

form of advertising. But it would be presumptuous to consider celebrity endorsement as

a panacea for all barricades. Celebrity endorsement if used effectively, makes the brand

stand out, galvanizes brand recall and facilitates instant awarenes

Brand Personality Creation through Advertising:

MAXX Working Paper 2001-01, February 2nd, 2001

Brand Personality is one of the core dimensions of brand equity. Brand personality

refers tothe emotional side of a brand image. It is created by all experiences of

consumers with abrand, but advertising plays a dominant role in personality creation.

In this paper we explore the mechanism that builds brand personality with the help of

advertising. We integrate advertising models with the theory of brand personality. Our

integrated framework leads to a number of propositions that set an agenda in this field.

In building our framework we incorporate theories from the fields of marketing (brand

equityand advertising), communication science and psychology (personality).

73

Keller (1998) states that “ brand personality reflects how people feel about a brand,

ratherthan what they think the brand is or does” . The symbolic use of brands is

possiblebecause consumers often give brands human personalities (J. Aaker, 1997).

Consumersperceive the brand on dimensions that typically capture a person’s

personality, and extend thatto the domain of brands. The dimensions of brand

personality are defined by extending thedimensions of human personality to the domain

of brands.One way to conceptualize and measure human personality is the trait

approach, which statesthat personality is a set of traits (Anderson & Rubin, 1986). A

trait is defined as “anydistinguishable, relatively enduring way in which one individual

differs from others”

Guilford, 1973, Human personality traits are determined by multi-dimensional factorslike

the individual’s behavior, appearance, attitude and beliefs, and

demographiccharacteristics. Based on the trait theory, researchers have concluded that

there are five stablepersonality dimensions, also called the ‘Big Five’ human personality

dimensions (Batra,Lehmann & Singh, 1993). The ‘Big Five’ human personality

dimensions areExtraversion/introversion, Agreeableness, Consciousness, Emotional

stability, and Culture.Based on these human personality dimensions, Jennifer Aaker

(1997) identifies the new ‘ BigFive’ dimensions related to brands. These are Sincerity,

Excitement, Competence,Sophistication, and Ruggedness.

The brand personality dimensions correspond to three of the ‘Big Five’ human

personality dimensions J. Aaker, 1997 Agreeableness and Sincerity both capture the

idea of warmthand acceptance. Extraversion and Excitement both include the notions of

sociability,energy,and activity, while Consciousness and Competence both connote

responsibility,dependability, and security. The other two brand personality dimensions

differ from any ofthe ‘Big Five’ of human personality.

According to Jennifer Aaker (1997), this pattern suggests these brand personality

dimensions might operate in different ways or influence consumer preference for

different reasons. Whereas Sincerity, Excitement, and Competence represent an innate

part of human personality, Sophistication and Ruggedness tap dimensionsthat

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individuals desire but do not necessarily haveThe appearance, behavior, attitudes and

beliefs are included in the literature about the ‘Big Five’ human personality dimensions.

Basic demographic characteristics, such as age, gender and social class, are not

included in this literature. A reason for this might be that the basic human demographic

characteristics are visible or relatively easily inferred. The demographic characteristics

of brands, in contrast, are included in the dimensions of brand personality. The10reason

for the inclusion lies with the fact that the demographics of brands often belong to its

most salient personality characteristics (Batra, Lehmann & Singh, 1993). Unlike with

aperson, the gender or the age of a brand is not visible or easily inferred. The

demographics of brand is inferred for example from the brand’s user imagery.

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Research Methodology:

Title of the study:

“Impact of celebrity endorsement on brand equity of Pepsi”

Duration of the project:

The project duration was a semester long project

Objectives of study:

The objectives of the study are as follows:

To identify the influence of celebrity endorsement on consumer buying behavior.

To study celebrity endorsement as a source of brand-building.

To find which type of celebrity persona is more effective for pepsi

To identify is celebrity endorsee advertising more attention getting and

memorable than other kind of advertising.

To identify how is celebrity endorsee advertisement perceived.

To identify that who make the best celebrity endorsee.

Need of the study:

After going through various sources like magazines, newspapers, websites I found

that lot of research work has undertaken by researcher regarding impact of celebrity

endorsement. But there was a gap in the research regarding whether celebrity

endorsement act as a source of brand-building. So there is a need to discover this fact.

So I decided to work on this particular aspect.

76

Type of research:

A research design is an arrangement of conditions for collection and analysis of Data in

a manner that aims to combine relevance to the research purpose with Economy in

Procedure. It constitutes the blueprint for collection, measurement and analysis of data.

My research design is an exploratory research .

Data Sources:

In dealing with any real life problem it is often found that data at hand are inadequate,

And hence, it becomes necessary to collect data that are appropriate.

The researcher can collect data either through primary source or secondary source.

a) Primary data: These are those data which are collected afresh and for the first

Time, and thus happen to be original in character. I will be using the structured

Questioners.

b) Secondary data: These are those which have already been collected by someone

else and which have already been passed through the statistical process. I will

collect it from the sources like internet, published data etc.

.

Sampling Size:

It is the total number of respondents targeted for collecting the data for the research.

Sample size of 100 persons will be taken for this research.

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Sampling Technique:

Convenience sampling technique will be used in this research project.

Scope of study:

Scope of celebrity endorsement is very vast in this competitive world to increase

brand awareness among people. celebrity endorsement by Pepsi make Pepsi

market leader in soft drink segment

Study on celebrity endorsement effect on brand equity of pepsi describes

endorsement of Pepsi and its impact on Pepsi which can useful for future

strategies.

This study leaves an immense scope for carrying out further research in the

following areas:

To carry out similar study from the advertiser’ perspective and comparing that

with the customers’ perspective

To establish a more definite correlation between celebrity impact on brand equity

and relation with customer's psychology.

To carry out study on other possible aspect of endorsements.

To carry out studies in other geographic areas i.e., in other nations and include

all possible industries to find out whether there is any significant difference in the

impact on the customers who are geographically separated.

78

Data analysis and interpretation:

Occupation:

respondents Student Business class Service class Other100 40 20 20 20

40

20

20

20

student=40business class=20service class=20other=20

Interpretation:

From this pie-chart it is clear that majority of the respondents are students and rest of

the share is occupied by service and business class

79

Age:

respondents 18-25yr 26-32 yr 33-40 yr100 40 30 30

40

30

30

18-25 yr=4026-32 yr=3033-40=30

Interpretation:

This pie-chart depicts that mostly respondents are young and while rest are above 25years.

80

which category of products you like most?

(a) Soft drink (b) juice (c) others

Respondents Soft drink Juice Others100 50 45 5

.

.

50

45

5

soft drink=50juice=45other=5

Interpretation:

This pie-chart depicts that 50 of the people like soft drink and 45 people like juice and

rest people like other drink.

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if soft drink than which product you prefer mostly?

Respondents Pepsi coca cola Local brands Not specify

100 45 40 10 5

__

45

40

10

5

pepsi=45cocacola=40local brand=10not specify=5

Interpretation:

This pie-chart depicts that 45 of the people like Pepsi and 40 people like coca cola and

rest people like local brand

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Do you collect any information or take advice before your purchase decision?

Respondents yes No100 65 35

. yes=65 no=35

Interpretation:

This pie-chart depicts that 65 of the people collect information or take any advice before

make any purchase decision and rest not collect any information.

83

if yes than which factor affects you most?

Respondents Friends Advertisements Opinion leader Other100 15 35 15 20

.

friends=30

advertisement=35

opnion leader=15

other=20

0 5 10 15 20 25 30 35 40

Interpretation:

The chart depicts that 35 of the people consider advertisement while going for

The purchase, followed by advice from friends 30,opinion leader 15 and 20 people

Consider other factor..

factor related to product affect you most?

Respondents Price Quality Celebrity

endorsementOthers

100 20 25 40 15

84

.

price=

20

quality=

25

celeb

rity e

ndorsemen

t=40

other=15

05

10152025303540

Series1

Interpretation:

The chart depicts that 40 of the people consider celebrity endorser while going for

the purchase, followed by price-with 20,quality with 25 and 20 people Consider other

factor. As people usually are more interested towards well known brands and if these

brands are advertised by famous celebrity it creates a huge impact.

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Do you like to see any celebrity endorsing your brand?

Respondents Yes No Can’t say100 60 25 15

.

60

25

15

yes=60no=25cantsay=15

Interpretation:

This pie-chart clearly indicates that 60 of the respondents want their products to be

advertised by celebrities, 25 don’t want and 15 of the respondents weren’t sure. So

This clearly shows how much important these celebrities are in the daily life of

common man.

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what comes in your mind when you go for Pepsi?

Respondents Celebrity endorse Brand Quality Taste100 35 20 20 25

.

35

2020

25

celebrity endorsement=35brand=20quality=20taste=25

Interpretation:

This pie-chart depicts that 35 of the people consider celebrity endorser while going for

The purchase, followed by brand name-with 20%., quality with 20 and 25 people

Consider taste of Pepsi. ..

87

Do you think celebrity endorsement work as an effective tool of persuasion for Pepsi?

Respondents Strongly agree Agree Disagree

100 50 30 20

.

50

30

20

strongly agree=50agree=30disagree=20

Interpretation:

This pie chart depicts that mostly people agree that Celebrity endorsement is an

effective tool of persuasion. 50 of people strongly agree that celebrity endorsement is

an effective tool of persuasion and 30 people slightly agree that it work as tool of

persuasion and 20 of people disagree that it is one of the tool.

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in case of Pepsi celebrity persona you like most?

Respondents Bollywood stars Sports stars Experts100 55 25 20

.

55

25

20

bollywood star=55sports star=25experts=20

Interpretation:

This pie-chart depicts that majority of people like to see bollywood stars to endorse their

Brands and 25 of them sports star. While remaining 20 % don’t want to any celebrity

Endorsing their brand they want experts for their advice.

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Who is brand ambassador of Pepsi?

Respondents

Ranveer kapoor m.s.dhoni Sehwag Don’t know

100 20 65 10 5

.ranveer

kapoor=20m.s.dhoni=65 sehwag=10 don’t know=5

0

10

20

30

40

50

60

70

Series1

Interpretation:

The chart depicts that majority of people know that Dhoni is the brand ambassador of

Pepsi whereas 20 say that ranveer kapoor and 10 say that sehwag is the brand

ambassador of pepsi and rest of them don’t know about brand ambassador. So majority

of the respondents were able to recognize the celebrity used in the advertisement so it

clearly tells that celebrity endorsement act as source of brand-building.

90

is celebrity endorsement make you loyal toward Pepsi

Respondents Yes No100 65 35

.

65

35

yes=65no=35

Interpretation:

This pie-chart depict that 65 respondents agree that endorsement of Pepsi by their

favorite celebrity make them loyal toward Pepsi and 35 don’t agree with this.

91

How you rank endorsement of pepsi?

Respondents Good Average Should improve100 40 35 25

.

40

35

25

good=40average=35should improve=25

Interpretation:

This pie-chart depict that 40 out of 100 respondents ranked endorsement of Pepsi good

And 35 respondents satisfy with Pepsi’s endorsement whereas 25 want some

improvement in celebrity endorsement.

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Fact and Findings:

After completing survey I found that:

Brand name and celebrity endorser are two factors that people consider before

making a purchase intention of automobile vehicle.

Maximum number of people wants to see celebrity endorsing their automobile

vehicles that means they have high involvement with the celebrities.

One of the abstract finding of the survey was regarding people’s orientation

towards gender biasness. This finding clearly indicated that people like to see

male celebrities endorsing automobiles than that of female celebrities.

Most no. of people believe that celebrity endorsement is an effective mean of

persuasion i.e. it convey the message clearly to the target audience regarding

product offerings and persuade them to go for the purchase.

It was found that celebrity endorsement have an impact over the purchase of

automobile products. As large no. of people surveyed confirmed this fact.

In country like India were Cricket is a religion and cricketers are worshiped as

God. One of the finding revealed that people admire sports player as better

celebrity persona than that of bolly wood actor/actress.

It was found that while making every new purchase of an automobile most no. of

people follow celebrity endorser while rest of them denied this fact.

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The results of brand recall were astonishing most no. of people were able to

recognize the celebrities endorsing the given advertisement. So it showed that

celebrity endorsement is a source of celebrity endorsement.

Limitation:

There are following constraints of the study which can be explained as:-

the time of research was short due to which many fact has been left untouched

The Area undertaken in research in Jalandhar only. But to do a completer

research a wide area is required, so the area is also a constraint of the study.

Sample for the study taken is of only 100 consumers. Which can also act as a

Constraint in the study?

While collecting data some of the respondents are not willing to fill the

Questionnaire, so they might not fill their true behavior. This can also be a

Constraint of the study.

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SWOT ANALYSIS:

Brand may use celebrities for a variety of reasons. Getting attention may be one of the

reasons to use a celebrity in a category, which is very "crowded" or in a category where

involvement levels are low. Cema, a brand of bulb used a well-known celebrity to gain

attention in a category where a number of brands existed and where differentiation is

hard to achieve. Attention getting leads to recall especially when the consumer is in

need of the product. This recall may lead to trial especially in categories which are low

involvement and which have low unit cost (bulbs, commodities). Jams have a low

penetration in India and involvement levels have been low. NLL uses a sport celebrity

for its 'Jammy' TV commercial.

Celebrities may be used to reinforce a popular brand in the durable category. BPL,

which started off with industrial products, is today one of the top brands I the minds of

consumers. The celebrity is for the reference group, which exerts a significant influence

on the masses (the "follower" groups). The sense of belonging is the association

created with the leading Indian brand in a scenario full of multinational brands. In

consumer behavior terms, the message attempts to bring in a sense of ethnocentrism

Brand may use celebrities to convey an up market image. Pataudi, the cricket celebrity

with the regal touch has endorsed Royale, an up market brand from Asian Paints.Brand

may use celebrities to enhance the brand image in niche markets. Omega is an up

market brand of watches known for its classic appeal all over the world it has only

premium ranges.

A controversial celebrity could also be used to build a brand. Minolta has a number of

camera models. It introduced a model called Rebel that was associated with John

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McEnroe the controversial tennis player. TVS mopeds was associated a film celebrity

well-known in the rural parts of Tamil Nadu in a regional campaign.

In low-involvement products, it has almost become a trend to use celebrity appeals.

This may be more effective if the brand pioneers celebrity usage. Though consumers

are getting use to the celebrity clutter, there is always a novelty appeal that a celebrity

could generate by being the first to be associated with a brand in the category. But is a

leader in instant coffee (chicory-based) and all along it has been using the filter taste as

its proposition. BBIL's Green.

A celebrity used across product categories is likely to be less effective than a celebrity

who starts with a few categories. Consumers tend to lose interest in the celebrity

because of over-exposure. Besides that celebrity could dilute the credibility associated

with his own image by the dilution of image created by diverse products.

Celebrity image should fit in with the brand image or personality (as started earlier). A

brand of jeans used a Western film celebrity (who is better known among middle-aged

adults) while attempting to target youngsters.

The target segment should be able to identify with the celebrity. Sometimes the celebrity

used may be too sophisticated for the target segment and the very concept of reference

groups may not be reflected if this happens. Bombay Dyeing used a celebrity (for men's

suiting) who may have been above the identification plane of the target segment.

There may be an alternative of creating a "Common-man appeal" for products like

detergents and celebrities may have to be used carefully weighing a number of factors.

Surfs Lalitaji typifying a middle class housewife may have been more effective than a

glamorous celebrity for a product like detergent, which is for the mass market.

A "common-man appeal" brings in spontaneous identification with the commercial. The

consumer feels a person like him or her is benefit the and hence identify with the brand.

Ariel used this appeal with its candid camera technique.

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When there are already a number of celebrities in the category, a new brand attempting

the celebrity route may not be the best alternative. With a proliferation of celebrities in

the cola category, one cannot imagine Sport cola (from Cadbury Schweppes) taking the

celebrity route.

When a new concept product is introduced like an electric shaver, new to the Indian

context, selling the product benefits is more important and hence the celebrity route if

attempted has to be implemented on a low-key in a manner that would highlight the

benefits of the product.

The image given by a celebrity to a brand should be sustained with appropriate appeals

over a period of time. Rajdoot was associated with a rugged and tough film celebrity to

appeal to the rural market almost a decade back when Hero Honda was gaining ground.

The appeal was able to sustain Rajdoot, but the image of the bike would have been

strengthened if the initial appeal had been reinforced in the past few years.

Reference group appeals could provide a creative dimension to brands if marketers are

drawn by the rationale of using celebrities rather than by the emotion and excitement of

celebrity usage

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Conclusion:

Despite the obvious economic advantage of using relatively known personalities as

endorsers in advertising campaigns, the choice of celebrities to fulfill that role has

become common practice for brands competing in today's cluttered media environment.

There are several reasons for such extensive use of celebrities. Because of their high

profile, celebrities may help advertisements stand out from the surrounding clutter, thus

improving their communicative ability.

A brief assessment of the current market situation indicates that celebrity endorsement

advertising strategies can, under the right circumstances, indeed justify the high costs

associated with this form of advertising. But it would be presumptuous to consider

celebrity endorsement as a panacea for all barricades. Celebrity endorsement if used

effectively, makes the brand stand out, galvanizes brand recall and facilitates instant

awareness. To achieve this, the marketer needs to be really disciplined in choice of a

celebrity. Hence the right use of celebrity can escalate the Unique Selling Proposition

i.e. it can act as a source of brand-building of a brand to new heights; but a cursory

orientation of a celebrity with a brand may prove to be claustrophobic for the brand.

It was found that people love to see celebrities endorsing their brands so the

involvement of common man is pretty high with these celebrities. So marketers should

use the right celebrity matching with the product. During survey it was found that male

celebrities are considered to be better celebrity endorser than that of their female

counterparts.

Pepsi's brand personality (the kind of human characteristics that could be associated

with the brand) is vibrant, fun-loving, young lively and adventurous. The target segment

is of course, the younger generation. Cricket is a sport, which is widely followed by the

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target segment, and there is always a charisma associated with the celebrities who are

reigning and topical.

Pepsi entered in the 90s and roped in Sachin Tendulkar who was not only a good

performer, but also a celebrity who typified the aspirations of youngsters involved with

cricket. The young age of the celebrity also synergies with the personality of the brand.

This was the starting point of the celebrity plane for Pepsi

This is because lots of research regarding consumer’s behavior towards automobile

indicates that people view automobile as female so in order to attract the attention of

target customers they preferably use male celebrity endorser. Also it was found that

people love to see sports stars endorsing their automobile than bollywood stars. This is

because of the fact in India Cricket is very famous and people worship players like

Sachin Tendhulkar, Kapil Dev, Sourav Ganguly etc. So they love to see these players

endorsing their automobiles. At last I just want to say A celebrity is a means to an end,

and not an end in him/her.

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Recommendations:

From study it was found that respondents were able to recognize the shahrukh

khan advertisement “oye bubbly” This advertisement was designed on such an

idea that everyone can recognize the brand of Pepsi easily. So instead of hiring

any celebrity companies should try to create such nice innovative idea and then

match the suitability of celebrity with the idea. This is also supported by the fact

that Today’s era is of Gen X their taste changes very fast and wants fresh

material.

This study reveals that celebrity endorsement act as a source of brand-building

but it isn’t the complete solution. Company can’t rely only on celebrity

endorsement to sell their products but they should follow an integrative approach

so as to generate good sales volumes. They should provide more schemes to

their customers in order to sell their products.

One of the important recommendations that I want to give is that during this

slowdown period companies are cutting their advertisement expenditure but they

shouldn’t do this. This is because this slowdown provide them an opportunity to

differentiate themselves from their competitors. This is also supported by the

researches. One of the research explained that during 1960’s recessions 290

global companies increased their advertisement expenditure and their sales

increased by whopping 300%. Some of the companies are well established

brand name today’s like IBM, Microsoft, 3M etc.

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Appendix

Questionnaire

Name:

Phone:

Age :

(A) 18-25 yr (b) 26-32 yr (c) 33-40 yr

Occupation:

(a)Student (b) Business class

(c)Service class (d) Other

Q.1 which category of products you like most ?

(a)Soft drink (b) Juice (c)Other

Q.2 if soft drink than which product you prefer most ?

(a)Pepsi (b) Coco cola

(c)Local brand (d) Not specify

Q.3 Do you collect any information or take advice to make your purchase decision ?

(a) Yes (b) No

Q.4 If yes than which factor affects you most?

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(a)Friends (b) Advertisement (c) Opinion leader

Q.5 which factor related to product affects you most?

(a) Price (b) Quality

(c)Celebrity endorsement (d) other

Q.6 DO you like to see any celebrity endorsing your brand?

(a)Yes (b) No (c) Can’t say

Q.7 What comes in your mind when you go for Pepsi?

(a)Celebrity (b) Brand (c)Taste

Q.8 DO you think celebrity endorsement work as an effective tool of persuasion for

Pepsi?

(a) Strongly agree (b) Agree (c) Disagree

Q.9 in case of Pepsi celebrity persona you like most?

(a) Bollywood star (b) Sprts star (c) Experts

Q.10 Who is brand ambassador of Pepsi ?

(A) Ranveer kapoor (b)M.S. Dhoni

(c)sehwag (d) Don’t know

Q.11 is celebrity endorsement make you loyal toward Pepsi ?

(a) Yes (b) No

Q.12 how you rank endorsement of Pepsi?

(a)Good (b) Average (c) Should improve

Q.13 any suggestion?

102

Thanks for your cooperation

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WEBSITES:

www.pepsico.com

www.pepsicioind ltd.com

www.marketingmania.in/india.htm

http://en.wiki.wikipedia.com/indian_industry

www.managementparadise.com/consumerbehaviour_celebrity

endorsement_automobiles.htm

http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=&id=ac

f176cd-6f53-42b6-a47b-72e34341cfe1&&Headline

http://www.businessweek.com/innovate/content/feb2008/id20080227_377233_pa

ge_2.htm

http://www.telegraphindia.com/1081007/jsp/opinion/story_9933949.js

Magazines and articles:

Marketing mastermind july 2008

Advertising express may 2009

Stargazing editorial. CMO magazine P-1, June 2005

Massey News Article

Strategic Marketing – Times of India group article

..

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