Académique Documents
Professionnel Documents
Culture Documents
Submitted By:
2011-2012
Submitted TO:
JAIDEV MEENA
Jaya pareek
Nidhi Tak
CERTIFICATE
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.
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. Were 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
thats 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:
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.
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
REVIEW OF LITERATURE
51-75
RESEARCH METHODOLOGY
76-79
76
76
77
77-78
78
78
79
81-95
Limitation of study
SWOT analysis
99-100
Conclusion
99-100
8.
Recommendation/ suggestion
101
9.
Appendix
102-103
Bibliography
104-106
10.
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
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.
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 early90s. 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.
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
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.
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.
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 companys 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.
Carbonated drinks:
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.
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. floz), 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
10
mL variants of the slim cans have been introduced by Red Bull more recently. Cans
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.
11
Producers:
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
Embotelladora Don Jorge S.A.C.: (Peru), producers of Agua Vida (mineral water),
Click(fruit drink), Isaac Kola and Per Cola
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)
12
Europe
. 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
13
give consumers the same hydration as water, with added vitamins.Sports drinks and
functional beverages both work similarly to the vitamin waters, with particularvitamins,
antioxidants and other ingredients specified for athletics and other functions.
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 livers 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 bodys natural metabolism, with
ingredients Polygonum Cusidatum and EGCG from green tea specified to support the
bodys 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
14
sponsorship,
Red Bull
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
Fanta
15
Coca-Cola
Hansen Natural
PepsiCo
Red Bull
Dr Pepper Snapple
Cott Corp
Rockstar
National Beverage
Source: Nestle
UK
The UK's Top 10 Soft Drinks Manufacturers by take-home sales value in 2009
Coca-Cola Enterprises
Red Bull
AG Barr
GlaxoSmithKline
Innocent Drinks
Danone
Gerber Foods
16
Tropicana UK (PepsiCo)
Nestle Waters
Red Bull
Lucozade (GlaxoSmithKline)
Robinsons (Britvic)
Schweppes (Coca-Cola)
Pepsi (Britvic)
Actimel (Danone)
Tropicana (PepsiCo)
Volvic (Danone)
Starbucks
Ocean Spray
Tchibo
Glaxo SmithKline
Nescafe
Sunny Delight
Innocent Drinks
Lipton
Folgers
Nestea
Cott Corp
Fanta
Japan Tobacco
AmBev
17
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.
18
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.
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.
19
Type
Public
Industry
Food
Beverages
Founded
Founder(s)
Donald M. Kendall
Herman W. Lay
Headquarters
Area served
Worldwide
Key people
Indra Nooyi
(Chairperson and CEO)
Products
Pepsi
Diet Pepsi
Mountain Dew
Aquafina
Sierra Mist
Lipton Teas
7up (outside the U.S.)
Mirinda
Tropicana Products
Naked Juice
Gatorade
20
Operating
income
Net income
Total assets
Total equity
Employees
294,000 (2010)[2]
Divisions
Traded as
NYSE: PEP
S&P 500 Component
Website
PepsiCo.com
21
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 Brads drink. It was
this doctors potion that was to become Pepsi Cola in 1898, and eventually,
Pepsi in 1903.
22
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
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 todays youth.
23
2.
3.
24
4.
Corporate Governance
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.
25
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.
1.
Indra K. Noo
Massimo d'Amore
2.
John Compton
Eric Foss
Zein Abdalla
Saad Abdul-Latif
27
History:
Origins
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.
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.
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 PepsiCos 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
29
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.
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.
30
Pepsi Max
Tostitos tortilla chips
Sierra Mist
Fritatos corn chips
Walkers potato crisps
Source: 2009 Annual Report[29]
$20b
$0
$5b
$10b
$15b
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 companys net
revenues came from North and South America, 16 percent from Europe and 13 percent
from Asia, the Middle East and Africa.
and snack sales in North and South America combined contributed 48 percent of
PepsiCos net revenue in 2009.
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 PepsiCos acquisition of the Quaker
Oats Company in 2001, manufactures, markets and sells Quaker Oatmeal, Rice-ARoni, 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 PepsiCos 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 Maras
Gamesa.
PepsiCos Latin America Foods (Spanish: Snacks Amrica 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
Amrica 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.
32
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 PepsiCos 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 WimmBill-Dann Foods in December 2010.
33
Corporate governance:
Headquartered in Purchase, New York, with research and development headquarters in
Valhalla, New York, PepsiCos 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 Ibargen, 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.
34
Headquarters
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.
35
Charitable activities:
36
Sustainability practices:
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 PepsiCos 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 companys
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 PepsiCos 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 companys 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
37
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]
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.
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 companys per-unit
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 socalled 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 PepsiCos 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 companys
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 lesshealthy 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.
39
Ingredient changes:
Public health advocates have suggested that there may be a link between the ingredient
makeup of PepsiCos 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, PepsiCos 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
40
and marketing of products that do not meet its nutrition standards, to children under the
age of 12.
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
41
Guiding Principles:
We uphold our commitment with six guiding principles.
42
43
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
45
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
Beverages
PepsiCo Indias 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.
46
Foods
PepsiCos 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 Lays Potato Chips,
Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and
Lehar brands. The companys high fibre breakfast cereal, Quaker Oats, and low fat and
roasted snack options enhance the healthful choices available to consumers. Frito Lays
core products, Lays, 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.
47
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 PepsiCola 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
48
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
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.
49
Asia
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.
50
LITERATURE REVIEW
Celebrity Endorsement
Erdogan (1999) in his article describe that
with
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
51
52
Endorsement objectives
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 companys advertising, creating a positive feeling towards the brand. Thus using a
celebrity in a companys advertising is likely to have a positive impact on the
consumers brand perception and purchase decision. One of the main reason behind
53
the popularization of celebrity used in advertisements is the companys belief that the
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 celebritys
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).
the potential of serving a valuable role in enhancing a brands competitive position and
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 Ambanis 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 consumers symbolic union
with its aspirational reference group
Menon
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 consumers 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 ones 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. (OMahony and Meenaghan, 1998).
56
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)
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
fit well with the personality of the brand they endorse. Evidence offered here supports
the basic assumptions of the celebrityproduct congruence model.
Celebrity endorsement: A strategic promotion perspective by Dr.KhatriPuja,Faculty
member
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.
3k47f44qq0fjug7q
says that
Are celebrity
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
61
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
consumers 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
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
64
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, InakiGibaja, 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
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
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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, TomRoberts, Dexter
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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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
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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.
PepsiCos yongistaan advertisement another trendsetter in yhe youth marketing arena
by KISHLOY ROY This study explain Pepsis 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
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paper is to test
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-alliancelike 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,
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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 persons
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
individuals
behavior,
appearance,
attitude
and
beliefs,
and
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 brands user imagery.
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Research Methodology:
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.
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.
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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:
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 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.
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respondents
100
Student
40
Business class
20
Service class
20
Other
20
20
40
student=40
business class=20
service class=20
other=20
20
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
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Age:
respondents
100
18-25yr
40
30
26-32 yr
30
33-40 yr
30
40
18-25 yr=40
26-32 yr=30
33-40=30
30
Interpretation:
This pie-chart depicts that mostly respondents are young and while rest are above 25
years.
80
Respondents
100
(b) juice
Soft drink
50
(c) others
Juice
45
Others
5
5
50
45
soft drink=50
juice=45
other=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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Respondents Pepsi
coca cola
Local brands
Not specify
100
40
10
45
__
5
10
pepsi=45
45
cocacola=40
local brand=10
not specify=5
40
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
100
yes
65
No
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.
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Respondents Friends
100
15
Advertisements
35
Opinion leader
15
Other
20
other=20
opnion leader=15
advertisement=35
friends=30
10
20
30
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
100
25
20
84
Celebrity
endorsement
40
Others
15
40
35
30
25
20
15
10
5
0
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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Respondents
100
Yes
60
Cant say
15
No
25
15
25
yes=60
60
no=25
cantsay=15
.
Interpretation:
This pie-chart clearly indicates that 60 of the respondents want their products to be
advertised by celebrities, 25 dont want and 15 of the respondents werent sure. So
This clearly shows how much important these celebrities are in the daily life of
common man.
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25
Brand
20
Quality
20
Taste
25
35
celebrity endorsement=35
brand=20
20
quality=20
20
taste=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. ..
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Do you think celebrity endorsement work as an effective tool of persuasion for Pepsi?
Respondents
Strongly agree
Agree
Disagree
100
50
30
20
20
strongly agree=50
50
agree=30
disagree=20
30
.
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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Respondents
100
Bollywood stars
55
Sports stars
25
Experts
20
20
bollywood star=55
55
25
sports star=25
experts=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 % dont want to any celebrity
Endorsing their brand they want experts for their advice.
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m.s.dhoni
65
Dont know
5
Sehwag
10
70
60
50
40
30
20
Series1
10
0
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 dont 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
Respondents
100
Yes
65
No
35
35
yes=65
no=35
65
.
Interpretation:
This pie-chart depict that 65 respondents agree that endorsement of Pepsi by their
favorite celebrity make them loyal toward Pepsi and 35 dont agree with this.
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Respondents
100
Good
40
Average
35
Should improve
25
25
40
good=40
average=35
should improve=25
35
Interpretation:
This pie-chart depict that 40 out of 100 respondents ranked endorsement of Pepsi good
And 35 respondents satisfy with Pepsis endorsement whereas 25 want some
improvement in celebrity endorsement.
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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 peoples 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.
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.
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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
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.
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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:
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
target segment, and there is always a charisma associated with the celebrities who are
reigning and topical.
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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 bran d.
This was the starting point of the celebrity plane for Pepsi
This is because lots of research regarding consumers 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 Todays 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 isnt the complete solution. Company cant 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
shouldnt 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 1960s recessions 290
global companies increased their advertisement expenditure and their sales
increased by whopping 300%. Some of the companies are well established
brand name todays 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
(c)Service class
(d) Other
Q.2
(b) Juice
(c)Other
(c)Local brand
Q.3 Do you collect any information or take advice to make your purchase decision ?
(a) Yes
(b) No
(b) Advertisement
(c)
Opinion leader
(a) Price
(b) Quality
(c)Celebrity endorsement
(d) other
(b) No
(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
(c) Experts
(b)M.S. Dhoni
(c)sehwag
Yes
(b) No
(b) Average
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Bibliography:
REFERENCES:
McGuire et al.(1999), "Expertise and trustworthiness in relation to credulityCelebrity endorsement", Quarterly Journal of Austrian Economics, Vol. 3 No.1,
Lang and Goodwill (1997), PSA- Do they really work? Oxford University
Press, Oxford, .
.
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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
..
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