Successful Celebrity Endorsement in Real World - Essay Example

Contents Introduction 4 Reasons for Success 5 Values 5 Perceived Quality 6 Brand Loyalty 7 Brand Association 7 Brand Awareness 8 Advantages that Companies Obtained from his endorsements. There were a lot of benefits obtained from successful endorsements of Beckham; some of them are listed below: 8 Association with Real Madrid 10 Celebrity Endorsement 11 Examples of Successful Celebrity Endorsement in Real World 12 Advantages and Disadvantages of Celebrity Endorsements 14 Recommended Alternative Promotion Tool 15 Conclusion 16 List of Figures Figure 1: The four component values of a brand (adapted from: Hunter, E. (2009)) 6 Figure 2: Statistical representation of Nike Golf Balls Sales before and after Tiger Woods Endorsement (Data derived from ABC-CLIO, 2010) 13 Introduction David Beckham was undoubtedly one of the most famous soccer players of the world in from late 90s to early 21st century. His good looks together with his ability to score with free kicks made him a star and a large number of fans in Asian and European countries. He has been one of the highest sought celebrities for endorsements by various brands and companies for their products. Beckham started his career as a trainee with Manchester United which was quite popular in the UK. Soon, Beckham made an impression by his exceptional play his free kicks and the ability to bend the ball anywhere in air. Beckham, married to ex-member of the pop group Spice Girls’ Victoria Adams, became one of the most popular celebrity couples of the time. They were admired by a tremendously large number of fans and were considered as fashion icons for youth. Beckham’s most popular endorsements include Pepsi, Vodafone, Nike, Brylcreem and Marks and Spencer. According to (HUNTER, 2009, p34-36) the value of Beckham’s brand was estimated to be over 200 million pounds. Great hype in media was created when Beckham got shifted from Manchester United to Real Madrid in 2003. However, this transfer was basically because of his commercial appeal instead of his game skills. In the following document we will analyse the reasons for successful endorsements by Beckham, the values and the principles which were followed in the endorsements and which led to those tremendous successes. Besides, the advantages and the disadvantages will be discussed that companies obtain from these endorsements. The case of Real Madrid will be analysed deeply and discussed in a separate section followed by the concept of celebrity endorsements in general and the benefits that can be achieved by celebrity endorsements by a company. Reasons for Success There are generally three reasons for a customer to buy an endorsed product or service which are: quality of the product of service, quantity and price of the product or service and thirdly because of the endorser. David Beckham was sought for a large number of product or service endorsements in the late 90s era and the beginning of 21st century. He was undoubtedly one of the most successful endorsers of that era and the reasons of his success were many. He was not only a stylish soccer player but his popularity was increased due to his marriage with a famous pop star Victoria of former music band Spice Girls. His good looks, pleasant personality and his outclass performance in soccer had made him a style icon for not only the youth but also the middle-aged customers. Values When a product or a service is endorsed by a celebrity, there are certain valued and principles that need to be followed in order to attract a larger customer base and eventually result in a positive and fruitful endorsement. According to the AAKER model, there are four basic values or principles associated to a brand. They are described in the figure below: Figure 1: The four component values of a brand (adapted from: Hunter, E. (2009)) Perceived Quality According to (LAHUSEN, 1996, p23) perceived quality of a brand can be defined as the customer’s opinion based on judgment of a product’s overall performance and superiority. However, (KATHLEEN, 2000) says that every customer will go through five stages of a purchase of which the primary and most important aspect is perceiving quality of the product or service followed by availability, price, quality and marketing. The perceived quality of David Beckham’s brand was found to be really high because of several reasons like his bend-free kicks in the game, scoring ability from different angles of the field and ability to deliver pin point crosses. He also had a decent family man image as he did not smoke and was not a regular user of alcohol. This is the reason of his popularity in the Far East as according to their culture a man who has family ties and bonds was considered to be more authentic and reliable. Brand Loyalty Brand loyalty is the extent of loyalty and faithfulness of customers association with a brand. This can be measured with the number of purchases and repetitive purchases. (BUSLER, 2010, p119) Brand loyalty was found to elevate tremendously among not only the existing customers but also attracted a lot of new customers because of a strong public image of Beckham. For example, Brylcreem hair gel was considered to be only for elderly people but since Beckham endorsed it, the potential young customers were attracted towards it and now Brylcreem is famous in every age group. Brand Association Brand association according to (BUSLER, 2010, p122) can be defined as the set of attributes of a product or a service that are seeded in the minds of the customers through advertisements, word of mouth publicity and promotional schemes. In order to build positive and fruitful brand associations, a product should be desirable, marketable and durable. Beckham’s association Real Madrid made him a definite choice for the companies wishing to endorse their products. For example, Beckham’s personal endorsement with Adidas was in news for a long time though Manchester United was a sponsor of Nike which was a big rival. His shoes were specially designed for him to be worn in his soccer matches. Brand Awareness In the field of marketing, the concept of brand awareness is the ability to measure how much famous the brand is locally and internationally. It is generally expressed as a percentage consisting of a market. Creating awareness of a brand is a definite tool of advertisements especially when a new product is introduced. Beckham was successful in creating tremendous brand awareness among the masses during his 10 years career with Manchester United, 3 years at Real Madrid and 10 Years with English national team. His fans not only admired him for his good looks and pleasant family personality but also more importantly because of his exceptional play. For a long time, people blindly followed what Beckham’s style which was casual and fashionable. Beckham became a trend setter for the people in fashion and style. Advantages that Companies Obtained from his endorsements. There were a lot of benefits obtained from successful endorsements of Beckham; some of them are listed below: Increase in Sales The sales of the companies grew enormously when Beckham endorsed their products like Meiji, Adidas and others New Markets The endorsements targeted a lot of customer segments like soccer lovers, fashion lovers (due to his unique style) and pop music fans (due to his marriage to a former pop star Victoria of Spice Girls). Not only was this he also loved by the black people as he used chunky jewellery which got famous all around the globe particularly among the black people. (PARMENTIER, 2011) Improved Credibility The credibility of companies increased due to these endorsements as there was a time when Adidas was more preferred than Nike due to Beckham’s endorsement. Since people trusted him and believed in his skills, they started following his styles blindly. Association with Real Madrid David Beckham was paid $41.3 million by Real Madrid and the price was well justified as Beckham did not only exhibit his exceptional qualities in the game but also became a successful endorser due to his strong personality. He was also of a great advantage to Real Madrid when products like T-shirts, Soccer kits and mugs for Real Madrid were marketed. Important to note that many Asian fans watch the game only because of their favourite players hence, the number of fans from Manchester United was drastically shifted to Real Madrid. Not only the viewers and the fan count were increased for Real Madrid but also the product sales increased tremendously. According to many analysts at least 5 million fans were shifted to Real Madrid out of 17 Million, which is definitely a big number. One more reason for the price being justified was that Beckham’s individual and personal endorsements did not conflict with that of Real Madrid. Important to note, that this was not the case when he was associated to Manchester United. For example, Beckham was a personal endorser of Nike whereas Manchester United supported Adidas which was a rival of Nike. Before Beckham, Real Madrid was far better than Manchester United in terms of the game, but from a commercial perspective, Real Madrid lagged behind. For this purpose, Beckham’s addition to Real Madrid was found to be beneficial for marketing and promotion purposes. Beckham was not transferred to Real Madrid due to his game skills and a pleasant personality but due to his successful endorsement experiences in the past. Beckham’s addition to Real Madrid improved the commercial presence of celebrities for Real Madrid and improved profitability to a much higher extent. However, if critically analysed, the 32 years old player has not much of a soccer career left but his commercial appeal is expected to sustain for many more years. Celebrity Endorsement Celebrity endorsement can be defined as the form of marketing or promotion campaign which involves a well-known person in order to promote the product or a service. Endorsing products using celebrities is not a new concept in today’s competitive business world however, in the beginning the celebrities and famous personalities were not comfortable enough associating with a brand with a fear of losing their fan base. With the passage of time and with some pioneer celebrities to endorse products, the 21st century started with a boom in celebrity endorsements. Marketing a product or a service using celebrity endorsement, enables a company to gain instant popularity, recognition and creditability from the large fan base of the celebrity. It assists in cutting down the advertising efforts and spreads the message quite effectively in the entire world. It has been observed that the marketed product or service is believed to possess the qualities and values which are possessed by the endorser. But, for a company it is very crucial to select the right celebrity for the right product. While selecting a celebrity for a product, the most important thing to consider is that the celebrity must not be involved in too many endorsements. One of the most important reasons why celebrity endorsements are so popular these days is because in today’s competitive world there is a large number of products being marketed to the consumers daily and in order to stand out in the market, celebrity endorsement is an effective tool. It is obvious that a person watching his favourite celebrity in an advertisement tends to remember the product for a long time and may even be convinced to purchase it. Hence, celerity endorsement has been found to be beneficial when attracting new customers. For example, if a product is believed to be associated to cater the needs of particular age groups, the people of other ages would not be ready to use it. In this case the company can endorse the product with a celebrity of a different age group in order to convince the potential customers of different age groups. When selecting the right celebrity for endorsing a product, it is important that the celebrity has some kind of relationship with the product for example skin care products should be endorsed by celebrities having flawless skin. Examples of Successful Celebrity Endorsement in Real World As an example, Nike golf balls have experienced a tremendous growth in revenue of $50 million after they signed Tiger Woods as their endorser. More than $250 million were grossed annually by Nike golf balls (STARN, 2011). The following figure illustrates the sales of Nike Golf balls from February 1999 to April 2010. Important to note that Tiger Wood endorsed Nike golf balls in June 2000: Figure 2: Statistical representation of Nike Golf Balls Sales before and after Tiger Woods Endorsement (Data derived from ABC-CLIO, 2010) Where x-axis is the time intervals from Feb 1999 to April 2010 and y-axis is the number of Nike golf balls sold in 1000s. It is evident from the data that there was a tremendous increase in sales in Nike Golf Balls after the endorsement with Tiger Woods. Important to note that the popularity of Nike golf balls increased as soon as Tiger Wood endorsed it and the sales kept going high and high with the passage of time. More and more people were convinced to buy the Nike Golf Ball products and the popularity ratio reached higher than that of the biggest rival Titleist. Angelina Jolie, the top paid actress of Hollywood, is famous for her charitable activities and for her beauty. She was signed for the endorsement of the luxury fashion house, Louis Vuitton for their advertising campaign. Jolie earned about $10 million from the endorsement deal. Luis Vuitton’s value campaign continued for around 18 months which included other celebrities besides Angelina Jolie, who were famous for their humanitarian efforts. Similarly, there have been various celebrities involved in endorsing different kinds of products like Chuck Norris has been associated with The Total Gym Home Fitness System, Rihana with Cover Girl, Robert De Nero with American Express Catherine Zeta Jones with T-Mobile and the list goes on. Advantages and Disadvantages of Celebrity Endorsements There are various advantages and disadvantages of a celebrity endorsement. The basic advantage from a company’s point of view is that the brand is able to gain instant popularity and recognition, whereas from the celebrity’s perspective he/she is able to gain more popularity by becoming available and approachable to the common people. The company is able to get more attention from the media when a celebrity is involved with its products’ endorsements. An effective celebrity endorsement is found to be helpful when the company aims at reviving an old product which is not so common in the current market due to which the sales is decreased. With a celebrity involvement, the brand image is refreshed and renovated in the minds of the customer. An added advantage for the celebrity is increased income as most of the celebrities are paid large amounts for endorsing products. (VEEN, 2009) Among the few disadvantages of celebrity endorsement, the most significant is that at times the strong personality holder celebrities gain more popularity and fame than the product itself, which results in no gain for the company. There is also a risk for the celebrity to endorse products which he/she does not wish to. Over-exposure for the celebrity is harmful which loses his appeal. On one hand, endorsing products gives less time to the celebrity to concentrate on his/her actual career while on the other hand the reputation of the celebrity is at stake together with the company’s. Celebrity endorsement is an expensive tool for the company. Moreover, the company faces the risk that if the celebrity does not continue to perform well, the company’s reputation can change which may result in decline in market share. Recommended Alternative Promotion Tool As a new tactic for the David Beckham’s brand, sponsorship would be a wise option. There is however, a small difference in sponsorships and endorsements. Endorsements do not always involve money to be paid to the celebrity whereas in sponsorship the entire money comes from the sponsor. Sponsorship is a kind of agreement between the two parties. The sponsor has to prove money and services for which the sponsored entity offers rights of association in exchange. Beckham has practically no career left in soccer but he is still the most favourite celebrity for the marketers who are dying to get access of him in order to promote their brands and products. If Beckham becomes the sponsor of a soccer event or a fashion event, people are expected to make it a blast. Using sponsorships in sports can also be used to reach a wider audience, and to create goodwill. There are numerous advantages if Beckham makes use of sponsorships for promotion which are: creating positive publicity, shaping consumer attitudes, enhancing company’s image and affecting sales positively. Recently for the London Olympics 2012, Beckham signed a sponsorship with Adidas and surprised the audience with his appearance at the Stratford City Shopping Centre. The fans were allowed to take pictures with him, which really helped Adidas in a way of bringing awareness to the common people and brining a good name for the company. The public sponsorship with Adidas was found to be really fruitful for both the company and Beckham. According to this unique deal, Beckham gets a cut of every boot sold at Adidas. Not only this, a percentage of sales is also provided to the star from clothes and shin pads that he endorsed personally earlier. Because of the public sponsorship deal with Adidas, the spokesperson from Adidas says that the Olympics 2012 helped them push sales up to 15% (to €3.5bn) due to sponsorship activity, in its second quarter. Moreover, Adidas declared that the sales will continue to increase in the coming years with the help of new product launches and sponsorship deals. (Adidas Group Annual Reports, 2012) Conclusion It has been observed that in today’s world the consumers try to follow their favourite celebrities blindly. They want to eat, drink, drive, wear and use the products that are used by their favourite celebrities. Hence, for this purpose celebrity endorsement has become a trend to attract potential customers. However, important to note that celebrity endorsement is an expensive marketing tactic, as the reputation of the celebrity is also on stake with the reputation of the marketed product. So, a comprehensive plan should be made while choosing this mode of marketing in order to increase profitability. Many companies use this tool to differentiate themselves from their competitors. Celebrity endorsement often has positive and fruitful outcomes like improved product’s or company’s credibility, increase in sales and maintaining a good public image. Endorsements are reaching to its limits in the recent years but not every endorsement is being effective and successful enough. The purpose of this paper was to study and analyse the concepts of celebrity endorsements with a deeper insight to the David Beckham brand. It has been concluded that David Beckham has been one of the most successful endorsers whether Nike or Brylcreem, Marks and Spencer or Vodafone, any product or service that was endorsed by Beckham, was appreciated by the people and became more and more popular among the masses. This eventually proved to be beneficial for both Beckham and the companies. Reasons behind Beckham’s success were the values and principles that he followed which not only made him an absolute choice by the companies for their product endorsements, but also an icon for the people. References ABC-CLIO. (2010). Tiger Woods. ADIDAS GROUP http://www.adidas-group.com/en/investorrelations/reports/annualreports.aspx Retrieved on [February 9th, 2013]. 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INTERNATIONAL JOURNAL OF SPORTS MARKETING AND SPONSORSHIP. 6, 189-199. Read More