Abstract
Advertising is one of the most important tools of marketing communication. Due to a proliferation of advertising messages, marketers are increasingly depending on well-known celebrities to make their advertising messages stand out in the marketplace so as to effectively reach the intended audiences. The purpose of this study is to find out the benefits of Pepsi’s use of celebrities as the dominant marketing strategy and risks involved and whether this is a viable strategy.
Celebrity endorsements are effective because they are able to draw the attention of people to a particular Company’s advertising messages as they add credibility to these messages and are able to rapidly build a brand’s image amongst others. There are dangers in using celebrities and these include the high financial risk involved, the risk of negative publicity should the celebrity engage in negative behavior and the lack of strategic match between the brand’s qualities and the celebrity’s image. These risks can be managed through proper screening and evaluation before contracting the celebrity as well as strict contract terms.
Introduction
Each year Companies commit billions of dollars to celebrities as payments for advertisements for their particular products or brands in the anticipation that the advertisement and celebrity image will lead to prosperous brand growth. Current statistics indicate that 25% of all TV commercials in the US are celebrity endorsements (Erdogan Baker and Tagg, 2001; Solomon, 2009), 10% of the global advertising budget involves celebrity endorsements while 25 % of all American companies use celebrities in the marketing communications (Shimp, 2000). In 2001 for instance, US Companies paid $897 million to sports personalities to endorse their products (Clarke, Cornwell and Pruitt, 2002). In 2003, Nike spent $1.44 billion on celebrities alone all over the world (Fink, Cunningham and Kensinki, 2004). In 2006, between 2 to 3 billion dollars was spent on celebrities in advertising in the US alone (White, Goddard & Wilbur, 2009).
The use of celebrities to endorse products and services has been a popular strategy among major global Companies worldwide which has effectively increased product sales. This strategy has been extensively used by successful companies such as Nike and PepsiCo. It is estimated that Nike grossed over $10 billion in revenues as a result of Michael Jordan’s endorsement of their products over the course of his career (Erdogan et al, 2001). While PepsiCo attributed a 2% growth in global market share in 1996 to Spice Girls’ endorsement (Farell and Frame, 1997)
An endorser is a person, character or organization that speaks or appears in an ad in support of a product or service; this can be as a spokesperson or as a model (Farell and Frame, 1997).
The endorsement can be done by a person in their capacity as an expert, celebrity or lay endorser. A lay endorser unlike a celebrity is a relatively unknown person who represents a typical user who has the common user appeal. The use of an endorser in advertising is for purposes of influencing the consumer in using the product of a company like Pepsi.
According to Murkerjee (2009), a celebrity is a person who is widely known because of their attractive personality, extraordinary skills or special skills. Most celebrities are role models in their fields and usually come from entertainment, athletics, TV, the corporate world, politics, education, social advocacy, or religious leaders (Hsu and McDonald, 2002). Companies such as Pepsi invest heavily in this strategy because, in a highly competitive environment characterized by a high proliferation of brands and cluttered media space, celebrity endorsement can provide the competitive edge needed to win the consumers as well as ensure distinct differentiation of their products (Roll, 2006).
Thus, celebrity endorsement is “one of the channels of brand communication in which a celebrity acts as the brand’s ambassador and authenticates the brand’s claim and position by extending his/her personality, popularity, stature in the society or expertise in the field to the brand” (Roll, 2006). Thus, celebrity endorsement is defined as a written or spoken statement which is part of an ad lauding the virtue of some product that would appeal to the customers and how they relate to the celebrities themselves, through using the brand. Companies invest heavily in this strategy because, in a highly competitive environment characterized by a high proliferation of brands and cluttered media space, celebrity endorsement can provide a distinct differentiation of products (Roll, 2006). Marketers hope that the chosen celebrity’s image and personality will match the product’s personality leading to a more popular and famous brand just like the stars representing them. Indeed, McCracken (1989) emphasizes that for an endorsement to be successful, the brand image must match the image of the celebrity. Examples of celebrities who have successfully advertised products include Britney Spears, Spice Girls and David Beckham for Pepsi, Venus Williams for Reebok, Jessica Simpson for Proactive Solution and Jamie Lee Curtis for Activia yogurt (McCracken,1989). Others are Madonna, Demmi Moore and Halle Berry who have appeared for Versace, Sharon Stone who has appeared for Dior, Jennifer Lopez and Uma Thurman endorsement of Luis Vuitton, Jessica Parker for GAP and Julia Roberts for Gianfranco Ferrer (McCracken,1989).
Hypothesis
The purpose of this paper is to establish whether the benefits of celebrity endorsements used by PepsiCo are worth the risks involved. My hypothesis is that there are significant benefits to any Company like PepsiCo that relies on celebrities to endorse its products; these benefits include enhancing the brand image, equity, appeal, credibility, easier brand recall and recognition amongst others. All this will positively influence consumers to become regular users of their products.
Theoretical Framework
It is widely accepted that celebrity endorsement brings credibility to advertising messages. This is because celebrities are widely known and respected for possessing extraordinary abilities. Advertising using celebrities are considered to be more credible than those without (Atkins and Block; Kammin and Gupta, 2001). Endorsements also work because they draw customers’ attention to a product in a cluttered media space in which there is a high level of brand proliferation all vying to capture the client’s attention (Erdogan et al, 2001). Personality endorsements enable products to overcome the challenges of a cluttered market or media. And because celebrity personalities are loved and admired by the people (McCutcheon, Lynn, Lange & Houran, 2002) their endorsement of products creates a psychographic connection between the brand and the market.
Some celebrities establish an intimate connection with particular groups of people in their work based on special interest, racial background, religious beliefs, political inclination or involvement in a cause. The endorsement of a brand by such a celebrity attracts followers or members of specific market niches (Schickel, 1985). A celebrity may enhance the value of a brand by bringing on their own distinct image to the brand. This can create, enhance or change a brand image (Debever, Iyer and Erdogan 2001). Celebrities are not always successful in endorsing products and this has made market specialists insist that the brand ambassadors must be well selected because of the financial and reputational risks involved. For example, Bill Cosby did not succeed in his endorsement of E.F. Hutton and Texas Industries. Also, Madonna was engaged by Pepsi as its celebrity endorser but because of the controversy surrounding her, the ad was pulled off after just one airing, yet it had cost millions of dollars to produce.
Before assigning a brand to a celebrity, Michael Roll (2006) proposes the following three steps one, consider the attractiveness of the celebrity. An attractive endorser is likely to receive a positive response from the listeners. Attractiveness could be in physical appearance, intellect, athletic ability or lifestyle.
The credibility of celebrity: For a celebrity to be believed he must be credible (Roll, 2006). The credibility of a celebrity greatly enhances the credibility of an advertisement and the acceptance of the message by customers.
Compatibility between the celebrity and the brand; for endorsement to be effective, the brand attributes and the characteristics of the celebrity should be similar; this includes identity, personality, positioning, and lifestyle among others.
Literature Review
The culture of consumerism that exists today is thought to be the primary reason why celebrities are used in advertisements. Consumerism is defined as the preoccupation of the society with the acquisition of goods which is driven by a popular belief that it is self-gratifying to consume goods enmass (Gibbons, 2006). The Dictionary of English Language (2009) defines consumerism as ‘the theory that a progressively greater consumption of goods is economically beneficial’. John Gibbons (2006) a Sports coach for the Kansas City Royals baseball team writes in his book ‘Art and Advertising’ that the practice of using celebrities in advertisements requires consumer choices to be made not so much on the basis of the use or exchange value of the product, but on the basis of its worth in terms of symbolic value or cultural capital’. This indicates that using celebrities in advertisements is basically shifting the consumer’s purchase of a product towards what the celebrity symbolizes to them rather than buying the product for what it is.
The celebrity concept first emerged towards the end of the 20th century and emanated from the convergence of media and capitalism (Kurzmann, Anderson, Clinton, Moloney, Silver, Van Ryn and Lee, 2007). The use of celebrity endorsement in advertising has been growing since the 1970s (Agrawal and Kamakura, 1995) and it has been used as a strategy to gain attention among the advertisements clutter. Celebrity endorsements are also considered to be more entertaining and trustworthy (Atkins and Block 1983). According to Pattis (2004) in his book the ‘evolution of advertising’, advertising is used to promote a particular idea or cause.
Thus advertisements are used to inform the public about the goods and services available in the marketplace and also to create a favorable public image for the advertiser and add that advertising is increasingly becoming important and powerful, especially with the developments in technology (Pattis, 2004). According to him, advertising and media are complementary to each other and both are indispensable in today’s world.
The theory behind the use of celebrities as representatives by companies such as Pepsi is for the target audience to form a correlation between the product and stars from the various media appearances the celebrity has been involved in. In fact, it is claimed that the culture of using celebrities in advertising stems from the belief that pairing a product with a well-respected celebrity improves the perception of the brand by consumers (Kamins and Gupta, 1994). Thus, linking pleasant, loveable images such as celebrities to a brand may result in favorable brand attitude and usage (Priluck and Till, 2004).
According to Katyal (2009), the advantages of using celebrity endorsements include ensured attention, public relations coverage, associative benefit, psychographic and demographic connections, and global appeal which can also compensate for the lack of innovative ideas. Celebrities also add credibility to the advertising messages claims and increase the retention of the ad in the brain, popular celebrities are loved and using them may provide a positive effect that can be transferred to the brand (Kammin and Gupta, 1994).
McCracken(1989) states that the positive effects of using celebrities as endorsers are well known; celebrity endorsers draw attention to the advertisements they appear in and the associative brands compared to those without celebrity personalities. Thus, celebrities help ads to break through the surrounding and the cluttered media space. McCracken (1989) says that in addition to attention, celebrities bring their own distinctive personality and images to the advertisement and the associated brand. The image they bestow on products and brands can enhance, change or create a brand image (Debevec, Iyer and Erdogan, 1986)
One of the classical explanations of using celebrity endorsement is described by Ohanian who had been able to show that there are positive effects of using celebrities on the advertisement and on brand evaluation (1990). According to Ohanian, celebrities add credibility to ad messages because of their high profile, wide recognition, special abilities and achievements. Celebrities are thought to be more credible than non-celebrity endorsers, thus they greatly influence the attitudes of consumers towards the brand and influence consumer behavior (Ohanian, 1990).
Ohanian (1991) explains how credibility in the advertisement is established; in his source credibility model, he explains that the credibility of the source is the most important factor that influences the persuasiveness of the message. The model identifies three new characteristics of a sender that makes him credible. These are; the perceived expertise of the source i.e. knowledge, skills and experience of using the brand, the second characteristic is trustworthiness and the last is attractiveness (Ohanian, 1991). These are characteristics that celebrities possess. Celebrities are also widely known (Speck, Schumer and Thomson, 1988) as they are successful in their career and their achievements bring them recognition and popularity that make them attractive to consumers. It is clear that the influence of celebrities on consumer behavior is primarily because they are perceived to be credible and consumers do not expect celebrities to engage in false brand endorsements.
Besides credibility, celebrities embody unique admirable qualities in their personality which they transfer to the products they endorse (McCracken, 1989). And since celebrities are iconic figures who the consumers adore and emulate, the endorsements of celebrities are adopted by consumers who hope that by consuming the endorsed products their lives will be similar to those of the celebrities. As such the image of the celebrities plays a pivotal role in the endorsement process as consumers are willing to adapt their ideas and lifestyles of the celebrities with the hope they can become like them.
According to McCracken (1989), there is a three-step process through which celebrities’ endorsements influence attitudes and behavior. McCracken’s three-stage meaning transfer model explains the various processes of celebrity endorsement. (McCracken, 1989). Consumers will attach value and meaning to what and how they see a celebrity through the media. In the second stage, the celebrity image is transferred to products such as Pepsi Cola through advertisements and endorsements and finally, the values and lifestyles of celebrities are passed on to consumers through purchase and consumption (McCracken, 1989). This model explains why companies use celebrities to promote their products.
The products and services that consumers purchase reflect their unique individuality and lifestyle (Belk, 1986). The lifestyle of the celebrity is usually attractive, exemplary and inspirational. Thus the products celebrities endorse are adopted by customers whose aspirations are to be unique and excellent just like those celebrities (Peter and Olson, 1995).
The influence of celebrities on consumers can also be attributed to their position as role models. Young people especially look up to celebrities as referents (Bush, Martin and Bush, 2004) and are considered role models because of their extraordinary abilities, special skills, outstanding performances or their unique lifestyles. They are role models, especially for the youth and are easily able to exert influence on consumers even though in reality they are socially and physically distant (Cocanougher and Bruce, 1971).
Kelman’s theory of social behavior (Kelman, 1961) explains that some individuals seek to be identified with another person through conforming to the behavior advocated by that individual. Such a person will derive satisfaction from their belief that they are like that person in some respect. Some consumers will create imaginary relationships with famous people, which further influence their behavior, lifestyles and decision choices. This phenomenon is called intimacy at a distance (Horton and Wohl, 1956) whereby individuals tend to form the illusion of close personal relations with celebrities which ultimately influences their behavior.
According to Hamish and Pringle (2005), there is four ‘F’ ineffective endorsements; these are fit, fame, facets and finances. Fit is the extent to which the products and celebrity’s characteristics match each other. Fame is the sheer scale of the star’s recognition, the higher it is the better the effect. Facets represent the number of ways that a celebrity can promote a brand besides appearing in the advertisement. According to Hamish and Pringle (2005), a celebrity can promote a product like Pepsi Cola in their role as a customer, sponsor, employee, by giving testimonials, as an owner of the company or through placements. Placement occurs when a product appears in films or movies in a positive way that is likely to influence the audience’s opinion. The last F is financed and it implies that huge amounts of money are involved in hiring celebrities which in turn can result in good returns to the company.
An endorsement can fail if the characteristics of a product do not match those of the endorser. Studies have shown that endorsements are effective when there is a commonality between the celebrity and the brand being endorsed (Misra and Beaty 1990). This theory is called the match-up hypothesis (Kammin 1990). Match up occurs when highly relevant attributes of the brand ambassador are consistent with the highly relevant attributes of the brand (Mistra and Beaty, 1990) When the level of match between the brand and endorser is high, brand recall, affection, attitude towards the brand increase as well as credibility to the advertising messages (Kammin and Gupta, 1994)
Despite the immense benefits of using a celebrity, the heavy cost of engaging them and the associated risks of failure presents a financial risk to marketers. Using a celebrity is an unnecessary risk unless the strategic match between them and the product is strong (Murphy, 1990). The reputation of a celebrity may come into question and this can affect any product that he or she is advertising and the popularity of a celebrity may wane if the celebrity’s performance in a professional capacity weakens or fail. Finally, a celebrity may endorse too many brands which leads to overexposure and confusion; this happens when a celebrity endorses one product and use another creating doubts over the authenticity of the brand’s claim and a lack of strategic match between a product image and the celebrity image. In some instances, the claims of a celebrity may not be believed by customers who may suspect the celebrity is endorsing a product just for the money and all this will pose risks.
Another factor that may affect celebrity endorsement is negative publicity which can arise if the celebrity is involved in a scandal or negative acts. These can cause customers’ attitudes to become negative and extend this negativity to associated brands (Till and Shimp, 1998). Till et al (2008) advocate for celebrities who are engaged in high blame situations to be dismissed before they negatively affect the brand. However, celebrities in low blame situations can be retained (Louie and Obermiller, 2002).
Whereas the strategy used by PepsiCo of using celebrity endorsers involves risks, the process has proven to be profitable and research has shown that the return on market value increased on average by up to 0.44% immediately on the announcement that a celebrity endorser has been engaged (Agrawal and Kamakura, 1995).
Methodology
There are three types of research approaches that have been used; these are exploratory, descriptive and explanatory. Research made in this report is exploratory since information is in a new field of knowledge in which we have limited knowledge and it is descriptive because the information used in this research is extracted from already existing studies. It is both descriptive and explanatory because it outlines what the concept of celebrity endorsement is, how the concept is used, the process involved and the benefits and risks of the strategy. The research conducted in this report is deductive in nature because the information is extracted from existing and already present theories and study cases. Theories developed by marketers throughout the years were used to evaluate the data and form meaningful knowledge.
Research Strategy
The research was carried out in two main ways; a Case study of Pepsi and a semiotic analysis of a Pepsi ad. The use of a case study in this research was selected as the best method because other methods such as surveys and experimentation were found to be inappropriate. Also, it was noted that Pepsi has successfully and extensively used celebrities in their marketing communications over a long period of time. The Company has experienced major successes and failures in using this strategy and therefore an analysis of the company would give us a deeper understanding of this area of celebrity endorsements. A semiotic analysis of Pepsi ads was chosen in order to look beyond the visual pictures and figures of the ads and to obtain a deeper understanding of how Pepsi creates and transfers meaning from ads to consumers.
Data Collection and Analysis
Appropriate data was collected from documented sources from books, journals, magazines and the internet while additional data was acquired through observation of past and present Pepsi ads. A qualitative approach was used in analyzing the data found in the research; the quantitative approach was found to be unsuitable because the study did not intend to analyze any numerical figures. The data collected from theories were appropriately analyzed using qualitative techniques and findings described in words. This approach enabled us to obtain a deeper understanding of the concept of celebrity endorsements.
A Case Study of Pepsi
Pepsi is a carbonated soft drink that is produced and marketed by PepsiCo. It is widely available in many countries of the world and is sold in restaurants, shops, schools, and bars among other places through vending machines and other channels. It was developed by Caleb Bradham in New Bern, North Carolina in 1898 at his home. It is thought that he gave it the name Pepsi-Cola because it included the digestive enzyme Pepsin and Kola nuts in its formula. PepsiCo Inc is listed on the New York Stock Exchange and is a Fortune 500 company and is headquartered in New York. The Company employs over 285,000 employees all over the world and its annual revenue exceeded US$60 Billion in 2009 out of which $4Billion is from the sale of Pepsi (Pepsi.com, 2011). The company mainly manufactures and produces soft drinks, carbonated or otherwise (Pepsi.com, 2011). The other brands manufactured by the company include Quakers Oats, Gatorade, Frito-Lay, Sobe, Naked, Tropicana, Mountain Dew, Mirinda and 7-up (Pepsi.com, 2011). Ms. Indra Krishnamurthy Nooyi has been the CEO of the company and has focused on retaining market leadership in the soft drink food industry. The Company is at the forefront of manufacturing healthy snacks using environmentally friendly techniques and this is captured in its philosophy “Performance with Purpose” (Pepsi.com, 2011).
History
The product acquired its trademark on June 16, 1903; it is then that it officially acquired the name Pepsi-Cola. The product was developed by Bradham as a bubbly drink that would relieve dyspepsia and boost energy. In 1903, the Company was moved from its house to a rented warehouse and sales grew steadily from that year onwards. In 1904, the product was sold in bottles for the first time and in 1905 it acquired its first logo, which would be changed again in 1926 and 1929 (Pepsi.com, 2011).
The Company would change ownership during the Great Depression after it suffered bankruptcy; this was after its assets were auctioned and Roy Megargel acquired Pepsi’s trademark. The company changed ownership after eight years and was owned by Charles Guth, who also owned the candy manufacturing company, Loft Inc and a number of retail stores (Pepsi.com, 2011). The Company was already distributing Coca-Cola products in its retail shops although it was experiencing difficulties getting good terms from Coca-Cola. The new owner used his company’s chemists to reformulate the recipe of Pepsi-Cola and make it more attractive to the market (Pepsi.com, 2011).
It was Charles Guth who revitalized the company through a mixture of smart packaging, pricing and radio advertising which gained popularity during the depression years boosting the company’s position and profitability (Pepsi.com, 2011). In the 1940s the Company targeted the untapped black community in America through targeted advertising and sales effort. This was during the height of racial segregation in America and though the strategy yielded rewards as the Company’s market share exceeded Coca-Cola’s for the first time, it faced serious challenges and threats from racists. As a result, the company had to forsake its marketing activities targeting blacks for fear of alienating its white customers.
When the TV age came into America, the company hired a young actress Polly Bergen to promote its products who sang the company’s famous classic theme song ‘Hits the Spot’ (Pepsi.com, 2011). The Company continued to use artists to sing theme songs in a TV advertisements for many years such as Joanie Summers, The Jacksons up and Britney Spear who is the most recent; this is the origin of Pepsi’s use of celebrity endorsement strategy.
In 1975, Pepsi introduced the Pepsi Challenge in which a blind tasting campaign pitched Pepsi against rival Coca-Cola products which resulted in most of the participants claiming that Pepsi was better tasting than Coca-Cola and Pepsi took advantage of these results by engaging in a media campaign that that was very effective (Pepsi.com, 2011). In 1996, the Company introduced the Pepsi Stuff marketing campaign, which was a loyalty reward campaign where customers accumulated points through purchases and would redeem them for items such as caps, T-shirts, denim, jackets and bags. This campaign was also very successful and was cited in 2002 by Promo Magazine as one of the ‘Ageless Wonders’ that helped redefine marketing promotion (Pepsi.com, 2011).
The rivalry between Pepsi and Coca-Cola has redefined the global soft drink market and Coca-Cola is the market leader while Pepsi Cola follows closely. According to the Beverage Digest report of 2008, PepsiCo’s market share in the US stood at 30.8% while its rival Coca-Cola had a 42.7% market share. Globally Coca-Cola dominates in most parts except in India, Saudi Arabia, Pakistan, Dominican Republic, Guatemala and some areas of Canada, where Pepsi is the favorite drink.
Semiotic Analysis of a Pepsi Ad
The main purpose of advertising is to sell products, but the advertisement not only sells the product but also markets the future image of the product. Semiotic analysis analyses the process through which meaning is created and transferred through signs and symbols contained in advertisements (Sonia and Solomon, 2008). Sonia and Solomon (2008) state that advertisements work characteristically by substituting signs for things and in reading those signs people discover the values and desires that the advertiser seeks to exploit. By using these subtle signs to signify a thing that is important to a reader, the advertised product becomes a representation of everything a reader desires to become (Sonia and Solomon, 2008).
This is the Latest Pepsi Ad and it features Sophia Vergara a Colombian Born US actress and was launched by Pepsi during the New York Fashion Week in February 2011 and it is mainly targeted toward women (Pepsi.com, 2011). It is a full-color advertisement and appeared in magazines, newspapers, the internet, outdoor billboards and posters.
The advertisement has the following main signifiers. 1) A woman, who is slim, very beautiful and she is stylishly dressed in a fashionable blue top and a wide-brimmed blue hat. Her skin is tanned, smooth and evenly toned.2) A slim tall soda can with the logo of Pepsi appears at the center of the ad and the logo of Pepsi and the name Diet Pepsi are written on it. 3) The words ‘the new skinny can’ appear at the bottom right end of the ad and they are written vertically. 4) The ad is set on a sky blue color background.
The following were identified as being signified in the advertisement. The image of a beautiful woman whose face and body are partially hidden is a curiosity causing event that is developed with the hope that the target audience will be sufficiently enticed to view the ad closely and that in the process their attention will be drawn to the fashionable, slim diet Pepsi can. The woman is sipping a drink of Diet Pepsi from a can using a straw and she looks cool and sexy. The whole image of the ad signifies that Diet Pepsi is different from other soft drinks and in the process portrays Diet Pepsi as a drink that is cool, sexy, beautiful, and fashionable is used for health-conscious people.
The beautiful woman in the ad is identified as Sophia Vergara a well-known Colombian-born US actress and celebrity. She has won several major awards and was nominated for Oscar award in 2011 for various acting roles on TV and Film. She is acclaimed to be amongst the 62 of the top 100 most beautiful women in the world by maxim magazine. The appearance of the beautiful, slim and fashionable celebrity signifies that diet Pepsi does not cause obesity or health problems and associates the product with riches and fame.
The dressing and looks of the beautiful woman are associated with the lifestyle of rich and famous people. The stylish blue top, wide brim blue hat and tanned skin is associated with a holiday at sunny beaches or in tropical locations. This is the lifestyle of a successful person.
The can of Pepsi appears at the center of the ad, it is the intention of the advertiser that it be the center of the attention and not the celebrity or any other signs. The new can is clearly annotated with a Pepsi Logo and the brand name Diet Pepsi so that viewers can identify the product. The new can is shown as being long, shiny, well designed and stylish. It is a first of its kind in the soft drink industry and is targeted at women who perceive being slim and tall as vogue. The can have water droplets towards it upper side and not at the bottom where a person is likely to hold it. The droplets are at the top where the can opening is; this signifies the ability of the drink to quench thirst.
The words appearing in the ad; ‘the new skinny can’ are written vertically on the right end of the can and their height adds to the attention of the viewer and contributes to the height of the new can (Pepsi.com, 2011).
The blue background on which the ad appears indicates that Diet Pepsi is a cool refreshing drink that is able to quench thirst. The Diet Pepsi name and logo is for the clear identification of the product in the ad.
Myths and Meanings
We can infer from the advertisement that if a person takes diet Pepsi; they are unlikely to be obese or suffer from a health problem. This is a significant message in a western country where obesity is prevalent and carbonated soft drinks such as Coke and Pepsi are often suspected to be the main causes. It also connects Diet Pepsi to feminism, fashion, style, media, and showbiz. We can also infer from the advertisement that Diet Pepsi is a drink for cool and sexy people like Ms. Sophia Vergara, if a consumer takes Diet Pepsi, it will be a reflection of their uniqueness, their success and their sexuality. People aspiring to be successful and attractive should adopt the drink as it is the drink for successful, sexy people.
Discussion of findings
Pepsi’s Experience of Celebrities’ Endorsements
The first recorded endorsement of Pepsi by a celebrity goes back to 1909 when automobile race pioneer Barney Oldfield endorsed Pepsi in a radio advertisement where he described it as ‘A bully drink, refreshing, invigorating, and a fine bracer before a race’ (Pepsi.com, 2011). This delicious and healthful theme would be used by the Company over the next twenty years up to 1930. In the 1950s, the Company’s spokesperson was Joan Crawford who happened to be the wife of PepsiCo president Alfred Steele from 1955-to 1959. She also served on the board of directors of Pepsi from 1959-to 1973. In the 1960s the Company changed its focus and strategy and started focusing on the post-war baby boom population with messages of youthfulness. Joanie Sommers a young upcoming actress was its ambassador who went on to sing two popular commercial songs ‘Its Pepsi, for those who think young’ and ‘Now you see it, now you don’t, oh Diet Pepsi’ (Pepsi.com, 2011). But it was not until the 80’s that the company fully benefitted from celebrity endorsement when it hired Michael Jackson among other celebrities as we shall see in the following section.
The power of celebrity endorsement was experienced in marketing at new levels and Pepsi realized that it could connect with the youth more effectively by signing up hot celebrities to endorse its products. It was then that the company engaged Michael Jackson as its ambassador from 1984 to 1993 during which he produced many commercials and was involved in many world tours in which Pepsi was being promoted. As it would turn out, the contract was terminated when Michael Jackson was accused of molesting children at his Ranch.
In 1990, Ray Charles was its ambassador for the Diet Pepsi brand; he featured in a campaign called ‘You Got the Right One Baby’ (Pepsi.com, 2011). In 2001, Britney Spears was signed on as the spokesperson for Pepsi where she made an advertisement with Pink and Beyonce for Pepsi (Pepsi.com, 2011). Christina Aguilera another famous musician was signed on in 2005 probably because she had previously endorsed Coca-Cola (Pepsi.com, 2011). Later on, Aretha Franklin was Pepsi’s spokesperson in 1998 while Janet Jackson was signed in on the Ask for More campaign.
Globally, the company signed on celebrities like Sakis Rouvas in Greece, Shakira in the Dominican Republic, Show Luo, Leslie Cheung, Jay Chou, Aaron Kwok, Louis Koo, Fave Wong and Kelly Chang in Asia as well as the Pakistan cricket team as it endorsers in Pakistan (Pepsi.com, 2011). In India, the company has used film, sports, and TV personalities as its brand ambassadors; they include ex miss world Aishwarya Rai, former model Mahima Chaudhary, and other celebrities such as Akshay Kumar, Shahid Kapur, Amitabh Bachnan, Shahrukh Khan, Kajol Rani Mukherjee, Saif Ali Khan, Fardeen Khan, Sachin Tendulkar amongst others.
The Pepsi Company has had serious problems with celebrity endorsement in its history. Most of them have been musicians or film personalities but Michael Jackson was the first truly international star the company hired and who turned out to disappoint the most. Together with his brothers, the Jackson 5, Michael advertised Pepsi in an ad that was featuring his song Billie Jean and this was wildly successful. In the development of his second ad though there was an accident that resulted in his hair being burned. This generated a lot of negative publicity about the star which negatively affected the brand. This showed how bad management of an ad production can hurt the star and the associated brand. Though the negative publicity was overcome and Michael Jackson would go on to endorse the brand for many more years, the contract was terminated when Michael Jackson was accused of sodomy and child molestation. Another troubled endorser was David Bowie who had produced a Pepsi ad together with Tina Turner and promoted the brand on his world tours.
After two years in 1989, Pepsi’s attempt to find another spokesperson flopped when it engaged Madonna as its endorser. The Pepsi ad included Madonna’s hit song ‘Like a Prayer’ which elicited serious negative reaction,s especially from the Catholic Church who considered the song immoral (Pepsi.com, 2011). The advertisement was aired only once though it cost ten million dollars to produce. Other celebrities who caused negative reactions include musician Ludacris whose ads were boycotted due to his style of music that promoted crime, drugs and immorality and Kanye West whose engagement with the company was suspended after he made negative comments against the then US President George Bush in 2006 (Pepsi.com, 2011).
Theories of Celebrity Endorsements
There are two theories that explain how endorsements work in influencing people’s attitudes and buying behavior. These are; McCracken’s meaning transfer model and Ohanian’s source credibility model.
Ohanian’s Source Credibility Model
This theory was developed by Ohanian in 1991, according to him, advertising is persuasive communication by nature and for persuasion to be achieved the claims contained in advertising must be credible. This is achieved through the use of credible persons to relay such messages. Celebrities are widely accepted as credible sources because of their wide recognition, high profile in society, special abilities and extraordinary achievements. The credibility of the spokesperson depends on the perception of the viewer; according to Ohanian, there are three qualities that make the source credible; these include perceived attractiveness, expertise and trustworthiness (Ohanian, 1991).
Attractiveness refers to physical attractiveness, intellectual abilities, unique personality and admirable lifestyle; according to Ohanian, viewers perceive someone to be attractive based on three things, similarity, familiarity and likeability (Ohanian in 1991). The similarity is where a viewer identifies with certain characteristics of the celebrity with their own while familiarity is when the viewer perceives that they intimately know the celebrity and this is achieved through the various media appearances that a celebrity makes (Ohanian, 1991). Liking occurs when a viewer admires a celebrity, their image, lifestyle, achievements, etc.
Trustworthiness is the believability of a claim that a person makes. When a claim is made and is believable, the viewer or listener is likely to accept the message and internalize it as their own. Celebrities are generally perceived to be trustworthy because of the position they hold in society as it is believed that they are unlikely to engage in false claims (Ohanian, 1991).
Expertise refers to the knowledge, skills and experience that the source possesses on the subject and the credibility of the message is enhanced when the source has considerable experience in the subject area (Ohanian, 1991). For example, an athlete endorser has considered an expert in sports-related products and the level of belief is likely to be high if they endorse sports products. An endorser who is perceived by the audience as an expert on a given subject is more persuasive in shaping the opinion of the audience than one who is perceived not to be.
McCracken Meaning Transfer Model
McCracken developed a theory to explain how celebrity endorsement works through the transfer of meaning from a celebrity to products and ultimately to the consumer. According to McCracken, the meaning transfer process is a three-stage process. In the first stage, a relatively unknown person acquires importance and value through various appearances in the media. People attach significance to the individual from the cues that they perceive about the person from mass media. Through repeated appearances in mass media, the individual acquires an iconic popular position in society and they become respected by the society because of their qualities, abilities and achievements (McCracken, 1989).
In the second stage, celebrity transfers their values and images onto products through endorsements and association with the products (McCracken, 1989). In this stage, the product’s characteristics become similar to those of the celebrity. Finally, in the last stage meaning is transferred from the products to end-users through purchase and consumption. Therefore in three stages the values, lifestyles and image of a celebrity move from the celebrity to the consumer. As previously mentioned and because of this, marketers hire celebrities to endorse their products with the hope that customers will be attracted to the image and value of the celebrity and will acquire these through the use of the company’s products (McCracken, 1989). The following diagram captures this process perfectly.
Benefits of using a celebrity in marketing communications
An endorser is a person, character or organization that speaks for or appears in an advertisement in support of the advertisement or its claim as a spokesperson or as a model user (McCracken, 1989). An endorser can either be an expert, celebrity or lay user.
On the other hand, an expert is an individual or organization that is perceived by society as having substantial knowledge in a particular field (McCracken, 1989). For example doctors, engineers, and lawyers among others. A celebrity is an individual who is widely known for their achievement in other fields other than the appearance in advertisements of the product they are associated with (McCracken, 1989). Celebrities are thus effective endorsers because they are respected, and because people admire their achievements, and lifestyle and desire to be associated with them. Lay endorsers are relatively unknown individuals who appear in ads representing ordinary users. They are used because of their common user appeal.
Companies use celebrities because they provide a competitive advantage in the marketplace besides other many reasons. For one, their appearance in an advertisement, adds credibility to claims made by advertisers. Secondly, celebrities provide a competitive advantage directly by helping advertisements of particular brands to stand out in the environment and in a media space that is cluttered with so many advertisements and this enhances brand recognition, awareness and recall. Thirdly, celebrities are able to build the image of a brand quickly and at a lower cost by influencing the opinion of the masses favorably. The attitude formation by people towards brands associated with brands is positive because they respect, admire and adore these celebrities, their achievements and lifestyles. Advertisers also believe that consumers will buy brands that are associated with celebrities because people wish to become like those celebrities and often will imitate their choices. Finally, marketers also believe that celebrities bring their unique and strong personalities and image to the product thus making the product attractive to consumers (McCracken, 1989).
Dangers of using a celebrity in marketing communications
There are disadvantages and risks of using celebrities; these include the high costs of engaging them. Most celebrities understand their power and ability to influence a brand’s performance in endorsements and regularly ask for a high fees before they sign up for an endorsement. Consumers are now aware of the process of endorsements and may question the intentions of a celebrity in endorsing a product whether the endorsement is made because the celebrity believes in the brand or because of the monetary reward. The most critical risk in using celebrity endorsements is that a celebrity may suffer from negative publicity arising from their negative public or social behavior. This may affect their credibility and this will eventually affect the brands they associate with.
A celebrity may also endorse one brand but may be found to be using another which may create doubts about the brand they endorse. Some celebrities endorse too many brands and this may cause confusion because when a celebrity appears in too many different ads the power of their endorsement is likely to be diminished. There is also a danger that the celebrity’s fame may decline and eventually be extinct, this may drag down the image of brands they are associated with especially if other celebrities arise and they endorse competing brands.
There is a potential that a celebrity may overshadow a brand in an endorsement which may result in the attention in advertisements shifting from the brand to the celebrities image, this is called the ‘Vampires effect’ (McCracken, 1989). Care has to be taken to ensure that the brand remains at the center of any endorsement activities. Finally, the strategic match in the characteristics of the brand and the image of the celebrity may be lacking and this may make the endorsement effort fail.
For effective endorsement therefore the connection between the brand and the celebrity image should be congruent.
How to manage the risks in celebrity endorsements
The risks of using celebrities can be reduced through the following strategies, Properly screening celebrities before signing them up to ensure that they are trustworthy because effective endorsements depend on credibility. These can be achieved by hiring professional celebrity auditing and grading companies that generate Q-rates that determine the suitability of a celebrity and their risk level. Companies should also ensure that the characteristics of the celebrity match the image of the brand because a lack of congruence can result in a less effective yet expensive endorsement. In order to minimize the impact of a celebrity failure, companies should engage celebrities for a short contract period and renew them if their behavior and contribution are significant.
Companies should also include exit clauses in their contract with celebrities that guarantee them the right not to pay all or part of the contract sum in the event a celebrity fails. In order to avoid the risk of celebrity overshadowing a product, the brand should be at the center of all advertising activities and not the celebrity. Pepsi has successfully done this as we have already seen in the ad which featured Sophia Vergara; her body and face were partially covered whereas the can of Pepsi was at the center of the advertisement. This limits the focus on the celebrity and instead the attention of the consumers is effectively drawn to the brand.
Because hiring a celebrity is an expensive investment, companies should utilize them in other ways besides advertisements to promote the product. These include using them in publicity events or appearing as customers, sponsors and employees or as an owner of the company. All these are platforms through which celebrities can promote a company.
Limitations of the Study
The area of celebrity endorsement is very wide. Because of time and resources limitation, I have been forced to limit my focus to the specific area of the question of this study; whether is Pepsi’s strategy of using celebrity endorsement, is worth considering the risks involved. As such the findings of this research study might not be generalized widely to apply in most other cases of celebrity endorsement.
Recommendation for Further Research
I recommend that the following areas be researched more in future researches studies; the effectiveness of a celebrity’s endorsements on different demographic segments such as age, gender, religious groups, race, ethnic groups and nationalities among others. Also, crisis management techniques when a celebrity is involved in events create negative publicity. More research is also needed to compare the effectiveness of celebrity endorsers against non-celebrity endorsers.
Conclusion
Companies engage celebrities to endorse their products because they are able to provide a competitive advantage by adding credibility to advertising messages and by drawing attention to a brand’s marketing communications. Credibility is the most important factor in advertising and many celebrities are considered to be credible. The credibility of an advertising claim depends on how attractive; trustworthy an endorser is as well as the level of expertise on the subject matter.
The underlying concept of using celebrities to endorse products is to create a desirable image in brands by transferring the celebrity images to products that influence the consumers to use the product as we have already seen. According to this research, trustworthiness is the most important characteristic of a celebrity and it should be the most important factor considered when hiring a celebrity. The match between a product’s characteristics and the image of the celebrity is also important. Finally, there are dangers in using a celebrity to endorse a company product but through careful screening and evaluation and continuous monitoring, a celebrity role can contribute positively in brand building activities as well as stimulating sales.
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