Celebrity endorsement

https://www.youtube.com/watch?v=PH_f6qiH-Xc
Cadbury India's four factories in India churn out close to 8,000 tonnes of chocolate and the company sells a million bars
every day. But Bharat Puri, managing director of Cadbury India will never forget the batch of Dairy Milk chocolates
numbered 28F311 manufactured in 2003 at the company's plant in Thane, near Mumbai That was the worm-infested batch
that triggered a crisis for the company that had always prided itself on its squeaky clean image.
To offset the negative impact of the controversy and to re-establish the dominance of Dairy Milk in its category, Cadbury
also signed up Bollywood icon Amitabh Bachchan [ as brand ambassador. With the help of its advertising agency O&M, it
created a campaign which aimed for both rational and emotional appeal. One of the ads showed Bachchan visiting a
Cadbury plant, inspecting the systems and processes and finally consuming a bar of chocolate to be convinced that there's
nothing wrong with the brand.
Indian believed in Big B and he believed in Cadbury. The trust in Cadbury was back and so were the profits. The brand
revived and everything was sweet again. This is the impact of a celebrity in building a brand.
 The success of celebrity endorsement in India can be sought from
a market research conducted earlier which found that 80% of the
TV commercials scored the highest recall were those with
celebrity appearances.
 A few examples:
 Sachin Tendulkar - Adidas,
 Sourav Ganguly - Britannia,
 Leander Paes & Mahesh Bhupati - J. Hampstead,
 Shah Rukh Khan - Pepsi,
 Sushmita Sen - Epson, and
 Aishwarya Rai - Coke.
 The Need Of Celebrities
 Psychological Factors: Celebrities generally satisfy the 'esteem needs' of an individual. For example a movie actress is
expected to possess a flawless skin and a blemish free face. Her fans want to know the secret of her beauty, so she
becomes a natural endorser for beauty related products (cosmetics, soaps, powder).
• Propping Up Awareness and Trust Levels: Rahul Dravid- (Bank of Baroda). •To Communicate a Certain Message about
the Company: Sachin Tendulkar as brand ambassador gave it the desired facelift and image for the launch of 'Victor‘
•Value for Money:
•To Position their Brand Distinctively: Lux worldwide has positioned itself as the 'soap the filmstars use'. From Leela
Chitnis to Aishwarya Rai, all top actresses have modeled for Lux.
• Celebrity Standing for a Single Brand: Think Zakir Hussain and you are reminded of 'Wah Taj' Taj Mahal tea. Ditto with
A. R. Rahman for Airtel.
 Factors To Be Considered

• Celebrity & audience match up,

• Celebrity & brand match up,
• Celebrity credibility,
• Celebrity attractiveness,
• Cost consideration,
• A working ease and difficulty factor,
• An endorsement saturation factor,
• A likelihood-of-getting-into-trouble factor.
 The TEARS Model
The attributes highlighted by the acronym “TEARS” are gauged for celebrity selection.
These are: -
•Trustworthiness: For example - Legendary actor Amitabh Bachchan who is an icon of trust; promoting ICICI Bank.
•Expertise: For example - Golfer Tiger Woods for a sports brand.
•Attractiveness: For example - Tennis player Anna Kournikova who used to earn dollars per year in just endorsement.
•Respect: For example - Former Miss World Aishawarya Rai and the Eye donation campaign.
•Similarity: For example - a child artist promoting a chocolate brand. A celebrity scoring high on all the above attributes
can turn out to be a good endorser for the brand under question.
 The Risks Associated
The various risks associated with celebrity endorsements are as follows: -
•Negative publicity - If the celebrity is strongly associated with the brand then the occurrence of the negative publicity
can spill over the brand.. E.g., Salman Khan lost his endorsement deal with Thumbs-Up after his infamous incidents like
buckkilling and rashdriving
•Overshadowing - When celebrity endorser is used, the risk of consumers focusing on the celebrity and not on the brand
exists.
•Overexposure - This risk arises when the celebrity chooses to endorse several different products simultaneously which
might leave the consumers confused. E.g., Sachin Tendulkar endorses several brands such as MRF, TVS Victor, Pepsi, Fiat,
Boost, etc.
•Financial Risk - The decision for hiring an expensive endorser may not be always feasible if there is a poor brand fit.
•Overuse - Sometimes the company can use many different celebrities to appeal to different market segment. But
multiplicity of endorser might blur the image.
•Extinction - The favorable response obtained by a particular brand may weaken over time if the brand gets significant
exposure without the association of the celebrity. If the celebrity contract is for a considerable period of time, then it can
lead to draining out capital without proper return.
The best advertising campaign
of 2010 was the Vodafone
zoozoo campaign and guess
what it was without a celeb
.Not only this there have been
so many campaigns without a
celeb that have been more
appealing than those with
celebs, Tata motors have not
been using celebs for
endorsements but still it is a
brand emotionally attached to
Indians.
Thank you
Product strategy
 Product strategy
 Designing and delivering a product or service that folder satisfies consumer needs
and wants is a prerequisite for successful marketing.

 This section considered two topics:  

 1) how consumers form their opinions of the quality and value of a product,  and

 2) how marketers can use the relationship marketing perspective in formulating

product strategy and offerings.
 Perceived quality and value

 Perceived quality is a customers’ perception of the overall quality are superior duty
of a product or service compared to alternative sand with respect to its intended
purpose.
 BRAND TANGIBLES
 Research has identified the following general dimensions:

I. Performance:  levels at which the primary characteristics of the product operate (low,
Medium, High or very high)

II. Features:  secondary elements of a product that compliment the primary characteristics

III. Conformance quality:  degree to which the product made specifications and is free of
defects

IV. Reliability:  consistency of performance over time and form purchase to purchase

V. Durability:  expected economic life of the product

VI. Serviceability:  aesop servicing the product

VII. Style and design:  appearance or feel of quality

  BRAND INTANGIBLES

 Product quality depends not only on functional product performance but on broader performance
considerations as well, like speed ,Accuracy and care of product delivery and installation; the
promptness, courtesy, and helpfulness of customer service and training; and the quality of repair
service.

 McKinsey Consulting has put forth  an approach to marketing that it has doubled 3-D marketing.  

 3D marketing emphasizes three product or service benefit dimensions:

I. Functional benefits:  product and performance attributes; value; Quality

II. Process benefits:  ease of access to product information; broad product selection;  simplified/
assisted decision making; convenient transactions; automatic product replenishment

III. Relationship benefits:  value based on personalized service; strong emotional relevance;
Information sharing that creates value exchange; differentiated loyalty rewards.
  Value chain
 Harvard's Michael Porter has proposed the value chain as a strategic tool for identifying ways to create
more customer value.

 The value chain identifies 5 primary value creating activities ( inbound logistics, operations, outbound
Logistics, marketing and sales, and service)  and for support activities that occur throughout this primary
activities (firm infrastructure, Human Resource Management, Technology development, and
procurement).

 According to Porter, firms  can achieve competitive advantages by improving performance and reducing
costs in any or all of these value creating activities.

 Porter notes how firms can create competitive advantages by partnering with other members of the
value chain (suppliers as well as distributors)  to improve the performance of the customer value delivery
system.

 Eg.  Procter and Gamble works closely with retailer such as Wal-mart to ensure that P&G brands can be
quickly and efficiently distributed to stores.
 Relationship marketing

 Relationship marketing is based on the premise that current customers are the
key to long-term brand success.  
 Here are some of the benefits it provides:
1. Acquiring new customers can cost five times as much as satisfying and
retaining current customers
2. The average company loses 10% of its customers each year
3. A 5% reduction in the customer defection rate can increase profit by 25 to
85%, depending on the industry
4. The customer profit rate tends to increase over the life of the retained
customer.
  Mass Customization
 The concept behind mass customization, namely, making products to fit the customers
exact specification,  is an old one, for admin Technology enables company products on
a previously unheard-of scale.
 Eg. Dell computers is now sold directly by the company on the Internet or over the
phone,  helped make it the most successful computer manufacturer after 1990s.
 Eg. Nike enables customers to  put their own personalized message on a pair of shoes
with the NikeID program.  at the NikeID website, visitors can make a customized shoe
by selecting the size, where, and color scheme and affixing  an 8 character personal ID
on their creation.
 Mass customization can offer supply-side benefits too.  retailers can reduce inventory,
saving warehouse space and the expense of keeping track of everything and discounting
left over merchandise.
 Mass customization has its limitations, however,  because not every product is easily
customized and not every product demands customization.
  Aftermarketing
 To achieve the desired brand image,  product strategies should focus on both purchase
and consumption.

 Growing role of marketing, that is marketing activities that occur after customer
purchase.

1. Marketers must develop user manuals that clearly and comprehensively describe both
what the product can do for consumers.

- Easy-to-use instructions has become even more important because they often

required translation into multiple languages.

- Manufacturers are spending more time designing and testing instructions to make them

as user friendly as possible.

2. Creating a well designed Customer Service Department, easily
accessible by a toll free phone number or via the web.
3. After marketing can include the sale of complementary products
that help to make up/enhance the value of the core product.
 Eg.  Hewllett- Packard derive much of their revenue from high
margin post purchase items such as inkjet cartridges, laser toner
cartridges,  and paper specially designed for PC printers.
 -A home PC printer spends much more on consumables over the
lifetime of the machine then on the machine itself
Seven After Marketing Activities
 Loyalty programs
 Loyalty all frequency programs have become one popular means by which marketers can create
stronger ties to customers.

 Some tips for building effective loyalty programs  follow:

a) Know your audience:  most loyalty marketers employee sophisticated databases and software to
determine which customer segment to target with a given program

b) Change  is good:  marketers must constantly update the program to attract new customers and
prevent other companies in their category from developing”  me-too” programs.

c) Listen to your best customers:  suggestions and complaints from top customers deserve careful
consideration, because they can lead to improvements in the program.

d) Engage people:  make customers want to join the program.  once they become members, make
customers “ feel special”  by sending them birthday greetings, special offers, or invitations to
special events.
 Pricing strategy

 Price is the one revenue-generating element of the traditional marketing mix, and price premiums  are
among the most important brand equity benefits of building a strong brand.

Consumer price perception:

 Within any price tier,  there is a range of acceptable prices, called price bands,  that indicate the
flexibility and breadth marketers can adopt in pricing their brands within a trial.

 Some companies sell multiple brands to better compete in multiple categories.

 Value based pricing strategies- attempting to sell the right product at the right price- do better
Matt consumer wishes.

 Eg. At one time,  Hitachi and General Electric (GE)  jointly owned a factory in England that made
identical televisions for the two companies.  The only difference was the brand name on the
television. Nevertheless, the Hitachi televisions sold for a $75 premium over the GE televisions.
Moreover,  Hitachi sold twice as many sets as GE despite the higher price.
Price tiers in the Ice Cream Market
Philip Van-Heusen Brand price Tiers
 Setting prices to build brand equity

 choosing a pricing strategy to build brand equity means determining the

following:
- A method for setting current prices
-A policy for choosing the depth and duration of promotions and discounts