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SEM1 1.06 • PI – Explain the role of endorsements in sport/event marketing Endorsements • Endorsement is an action made by a celebrity, athlete, or well-known person to promote, advertise, and create publicity for a Company or Product. • Testimonial (statement or advertisement), by a user of the product proclaiming the product’s benefits • Appearance (association), is an action whereby the endorser appears at an event. The celebrity does not have to do or say anything but consumers believe they like the product Endorsements • Endorsements should help the product or company reach their target market. Ex: Michael Jordan and Basketball Shoes • Endorsements don’t always make sense, but celebrities can help sell any product. Ex: The George Foreman Grill Methods that celebrities can endorse products • Product endorsement campaigns – (combination of advertising and appearances) • Allow their name to be used on products • Written or verbal testimonials • Allow use of their photo with or on the product in advertising and packaging • Manufacturers can benefit from the ‘halo effect' - some of the celebrity's glamour rubs off on the product • Consumers are more likely to try and use a product that a celebrity endorses Endorsements • Advantages to the Athlete/Celebrity: • • • • Large supplement to income Free merchandise Ex: Jordan made $60 million in 2010. He retired in 2003! http://www.cbssports.com/mcc/blogs/entry/22748484/32215986 • Endorsements are legal and binding contracts and the company and celebrity must adhere to the details Click Link for details: Ronaldinho loses Coca-Cola deal after drinking Pepsi in public Endorsements • Advantages to the Company or Product through affiliation with athlete or celebrity : – Enhanced company image – Increased Brand Awareness – Increased Sales – Penetration into new Markets Endorsements • Disadvantages to the Company or Product through affiliation with Athlete or Celebrity: – Loss of sales and reputation if endorser becomes involved in a scandal – Loss of sales due to poor performance of endorser Nike drops Lance Armstrong Tiger and Rory, play poorly, Miss Cut