Impact of Celebrity Endorsement of Pepsi

A Project Study Report On “Impact of celebrity endorsement on Brand Equity of Pepsi” Submitted in partial fulfillment for the Award of degree of Master of Business Administration

Submitted By:

2011-2012

Submitted TO:

JAIDEV MEENA

Jaya pareek

Year - 2nd year [IVth Sem.]

Nidhi Tak

POORNIMA SCHOOL OF MANAGEMENT ISI-2, RIICO Institutional Area, Goner Road, Sitapura, Jaipur.

CERTIFICATE

Poornima School of Management

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.

Dr. Vandana Sharma Director, PSOM

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. We‟re 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 that‟s 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: 

To identify the influence of celebrity endorsement on consumer buying behavior.



To study celebrity endorsement as a source of brand- for pepsi



To find which type of celebrity persona is more effective.

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.

Marketers pay millions of Dollars to

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

3

REVIEW OF LITERATURE

51-75

4

RESEARCH METHODOLOGY

76-79

4.1. Title of study

76

4.2. Duration of the project

76

4.3. Objective of the project

77

4.4. Type of research

77-78

4.5. Sample size , method of selecting sample

78

4.6. Scope of study

78

5

Analysis and interpretation

79

6

Facts and finding

81-95

7

Limitation of study

8

SWOT analysis

99-100

9

Conclusion

99-100

8.

Recommendation/ suggestion

101

9.

Appendix

102-103

Bibliography

104-106

10.

Introduction to the industry: Background: The industry began in mid 1900‟s with leading companies like Pepsi Co. and Coca Cola controlling the beverage business sector with sweetened soft drinks and carbonated soda water. American audiences attached excitement and convenience to these popular drinks, and a variety of soft drink brands began to originate such as Dr.Pepper, Sprite, etc. The beverage industry has undergone rapid expansion over the last decade. The only obstacle for these beverage companies was the high number of calories and sugar levels their drinks contained; a drawback for health-conscious consumers. A soft drink (also called pop, soda, coke, soda pop, fizzy drink, or carbonated beverage) is a non-alcoholic beverage that typically contains carbonated water, a sweetening agent, and a flavoring agent. The sweetening agent may be sugar, highfructose corn syrup, or a sugar substitute (in the case of diet drinks). A soft drink may also contain caffeine or juice. Products such as energy drinks, Kool-Aid, and pure juice are not considered to be soft drinks. Other beverages not considered to be soft drinks are hot chocolate,hot,tea,coffee,milk,milkshakes,and schooled. Small amounts of alcohol may be present in a soft drink, but the alcohol content must be less than 0.5% of the total volume. If the drink is to be considered non-alcoholic. Widely sold soft drink flavors are cola, lemon-lime, root beer, orange, grape, vanilla, ginger ale, fruit punch, sparkling lemonade, squash, and water. Soft drinks may be served chilled or at room temperature. They are rarely heated. The first marketed soft drinks (non-carbonated) in the Western world appeared in the 17th century. They were made from water and lemon juice sweetened with honey. In 1676, the Companies des Lemonades of Paris was granted a monopoly for the sale of lemonade soft drinks. Vendors carried tanks of lemonade on their backs and dispensed cups of the soft drink to thirsty Parisians.

1

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

2

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.



Floats: soft drink with scoops of ice-cream



Soda: another term for soft drink



Pop: another U.S. term for soft 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 early„90s. 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.

Soft Drink Production area The market preference is highly regional based. While cola drinks have main markets in metro cities and northern states of UP, Punjab, Haryana etc. Orange flavored drinks are popular in southern states. Sodas too are sold largely in southern states besides sale through bars. Western markets have preference towards mango flavored drinks. Diet coke presently constitutes just 0.7% of the total carbonated beverage market.

3

Growth promotional activities The government has adopted liberalized policies for the soft drink trade to give the industry a boast and promote the Indian brands internationally. Although the import and manufacture of international brands like Pepsi and Coke is enhanced in India the local brands are being stabilized by advertisements, good quality and low cost.

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

a

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.

4

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.

5

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 company‟s 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.

6

Trends and Recent Developments Private labels are becoming more prominent. Private Labels are brands owned by stores and retailed through them. These private label manufacturers are retailing their brands very aggressively these days. Although, lowering of prices is an open option for the soft drink majors, it reduces their profits. Private labelers offer heavier discounts and sales are increasing. In 2007, a new issue is the lack of recycling of plastic bottled water containers. Although the trend to bottled water is high, environmentalists point out many of these are simply filtered tap water and that the discarded bottles are causing environmental damage. The fallout among consumers is unclear at mid-point 2007. After nearly a year of deliberation, Cadbury has finally announced a date for the demerger of its US soft drinks arm, American Beverages. Although it appears to make sense to separate this group from the company's confectionery operations, the separation could leave Cadbury vulnerable to a takeover, which its turnaround plan may be unable to prevent. The de-merger, which was first announced as a possibility back in March 2007, will now take place in May and will see the creation of Dr Pepper Snapple Group as a separate entity with a listing on the New York Stock Exchange and its own management team. The confectionery arm is to be renamed Cadbury plc and will be listed in London.

7

Carbonated drinks:

Soft drinks displayed on supermarket shelves. In late 18th century, scientists made important progress in replicating naturally carbonated mineral waters. In 1767, Englishman Joseph Priestley first discovered a method of infusing water with carbon dioxide to make carbonated water which has 3.4 mg in the drink when he suspended a bowl of distilled water above a beer vat at a local brewery in Leeds, England. His invention of carbonated water, (also known as soda water), is the major and defining component of most soft drinks. Priestley found water thus treated had a pleasant taste, and he offered it to friends as a refreshing drink. In 1772, Priestley published a paper entitled Impregnating Water with Fixed Air in which he describes dripping oil of vitriol (or sulfuric acid as it is now called) onto chalk to produce carbon dioxide gas, and encouraging the gas to dissolve into an agitated bowl of water. Another Englishman, John Mervin Nooth, improved Priestley's design and sold his apparatus for commercial use in pharmacies. Swedish chemist Torbern Bergman invented a generating apparatus that made carbonated water from chalk by the use of sulfuric acid. Bergman's apparatus allowed imitation mineral water to be produced in large amounts. Swedish chemist Jöns Jacob Berzelius started to add flavors (spices, juices and wine) to carbonated water in the late 18th century.

8

Soft drink bottling industry Over 1,500 U.S. patents were filed for either a cork, cap, or lid for the carbonated drink bottle tops during the early days of the bottling industry. Carbonated drink bottles are under great pressure from the gas. Inventors were trying to find the best way to prevent the carbon dioxide or bubbles from escaping. In 1892, the "Crown Cork Bottle Seal" was patented by William Painter, a Baltimore, Maryland machine shop operator. It was the first very successful method of keeping the bubbles in the bottle.

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.

9

Soft drink packaging :

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. fl oz), 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



Ajegroup: (Peruvian origin, operates in 14 countries, now headquartered in Mexico), producers of Big Cola, Cielo (mineral water), Cifrut (fruit juice), Free Tea, Free World Light (referred to locally as Free Light), Kola Real, Oro, Pulp (nectar), Sporade (sports drink) and Volt (energy drink)



AmBev: (Brazil, operates in 14 countries, owned by Anheuser-Busch InBev), the largest bottler of Pepsi Cola products outside the United States, also produces Guarana Antarctica, Soda Limonada, Sukita, H2OH! and Guara!



Corporación José R. Lindley S.A.: (Peru), producers of Aquarius (flavored water), Burn (energy drink), Coca-Cola, Crush, Fanta, Frugos (nectar), Inca Kola, Kola Inglesa, Powerade (energy drink), San Luis (mineral water) and Sprite



Embotelladora Don Jorge S.A.C.: (Peru), producers of Agua Vida (mineral water), Click(fruit drink), Isaac Kola and Perú Cola



Embotelladora Latinoamericana S.A. (ELSA): (Colombia), producers of Cyro, Liv(mineral water), RC Cola and Ship



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.

A relatively new functional beverage company is Function Drinks, located in Redondo Beach, California. Function distributes their products through MD Drinks, Inc. The company began in 2004,with an orthopedic surgeon Dr. Alex Hughes, a graduate from UCLA Medical School. While in school, Hughes realized that many of the powerful, all-natural ingredients used to treat patients in medical facilities were available to the public, yet not widely recognized or known-about. Soon after his epiphany, Hughes began working on a company that would incorporate these ingredients into beverages that could be available to the public. The company instantly gained a strong following of people, full ofactive and health-conscious consumers. Function Drinks offers a line of eight beverages, each with a unique function and flavor.

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 liver‟s 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 body‟s natural metabolism, with ingredients Polygonum Cusidatum and EGCG from green tea specified to support the body‟s 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

recognition among target consumers through a variety of promotional strategies and advertising methods, including television commercials, celebrity

sponsorship,

promotion through in-store displays, demonstrations, and through social media websites. The Top Selling Soft Drinks Companies Worldwide The Top 10 Soft Drinks Companies in 2009 by market share Coca-Cola (& bottling partners)

Red Bull

PepsiCo (& bottling partners)

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

Diet Mtn Dew (PepsiCo)

Mtn Dew (PepsiCo)

Diet Dr Pepper (Dr Pepper Snapple)

Dr Pepper (Dr Pepper Snapple)

Fanta

Source: Beverage Digest The Top 10 Carbonated Soft Drinks Manufacturers in the US in 2010 by volume

15

Coca-Cola

Hansen Natural

PepsiCo

Red Bull

Dr Pepper Snapple

Big Red Soda

Cott Corp

Rockstar

National Beverage

private label & other

Source: Beverage Digest The Top 10 Bottled Water Brands Worldwide by sales in 2008 Nestle Pure Life (Nestle Waters) ($3.8bn)

Crystal Geyser (CGWC) ($1.5bn)

Dasani (Coca-Cola) ($2.9bn)

Volvic (Danone) ($1.4bn)

Aquafina (PepsiCo) ($2.8bn)

Arrowhead (Nestle Waters) ($1.3bn)

Poland Spring (Nestle Waters) ($2.1bn)

Perrier (Nestle Waters) ($1.1bn)

Evian (Danone) ($1.9bn)

S Pellegrino (Nestle Waters) ($1.1bn)

Source: Nestle

UK The UK's Top 10 Soft Drinks Manufacturers by take-home sales value in 2009 Coca-Cola Enterprises

Red Bull

Britvic Soft Drinks

AG Barr

GlaxoSmithKline

Innocent Drinks

Danone

Gerber Foods

16

Tropicana UK (PepsiCo)

Nestle Waters

The UK's Top 10 Soft Drinks by take-home sales value in 2009 Coca-Cola

Red Bull

Lucozade (GlaxoSmithKline)

Ribena (Glaxo SmithKline)

Robinsons (Britvic)

Schweppes (Coca-Cola)

Pepsi (Britvic)

Actimel (Danone)

Tropicana (PepsiCo)

Volvic (Danone)

Source: Britvic/Nielsen ScanTrack Britvic's 2010 report on the UK Soft Drinks market

Other Non-Alcoholic Beverage Companies & Brands Profiled in Adbrands Unilever

Starbucks

Ocean Spray

Tchibo

Britvic Soft Drinks

Glaxo SmithKline

Nescafe

Sunny Delight

Procter & Gamble

Innocent Drinks

Lipton

Folgers

Nestea

Cott Corp

Fanta

Japan Tobacco

AmBev

17

The soft drink industry is so profitable An industry analysis through Porter‟s Five Forces reveals that market forces are favorable for profitability. Defining the industry Both concentrate producers (CP) and bottlers are profitable. These two parts of the Industries are extremely interdependent, sharing costs in procurement, production, marketing and distribution. Many of their functions overlap; for instance, CPs do some bottling, and bottlers conduct many promotional activities. The industry is already vertically integrated to some extent. They also deal with similar suppliers and buyers. Entry into the industry would involve developing operations in either or both disciplines. Beverage substitutes would threaten both CPs and their associated bottlers. Because of operational overlap and similarities in their market environment, we can include both CPs and bottlers in our definition of the soft drink industry. In 1993, CPs earned 29% pretax profits on their sales, while bottlers earned 9% profits on their sales, for a total industry profitability of 14% . This industry as a whole generates positive economic profits

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

2 Introduction to the organization : PepsiCo

Type

Public

Industry

Food Beverages

Founded

Delaware - June 8, 1965 reincorporated in North Carolina – 1986

Founder(s)

Donald M. Kendall Herman W. Lay

Headquarters

Purchase, Harrison, New York

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

Quaker Oats Company Lay's Doritos Cheetos Walkers snack foods Fritos Tostitos Revenue

US$ 57.838 billion (2010)[2]

Operating income

US$ 8.332 billion (2010)[2]

Net income

US$ 6.338 billion (2010)[2]

Total assets

US$ 68.153 billion (2010)[2]

Total equity

US$ 21.476 billion (2010)[2]

Employees

294,000 (2010)[2]

Divisions

PepsiCo Americas Foods; PepsiCo Americas Beverages; PepsiCo Europe; PepsiCo Asia, Middle East & Africa

Traded as

NYSE: PEP S&P 500 Component

Website

PepsiCo.com

PepsiCo, Incorporated (NYSE: PEP) is a Fortune 500, American global corporation

21

Pepsi - Yeh Hai Youngistan Meri Jaan

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 Brad‟s drink. It was this doctor‟s 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 today‟s youth.

23

PepsiCo is a world leader in convenient snacks, foods and beverages.

1. Solid Philosophy, Solid Company Creating a Better Tomorrow for Future Generations

2.

Our Mission and Vision At PepsiCo, we believe being a responsible corporate citizen is not only the right thing to do, but the right thing to do for our business.

3.

PepsiCo Values & Philosophy Our Values & Philosophy are a reflection of the socially and environmentally responsible company we aspire to be. They are the foundation for every business decision we make.

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.

World-Class, Muscular Brands PepsiCo is home to hundreds of brands around the globe. Listed here are some of our most recognized. More »

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.

3

Indra K. Noo

Massimo d'Amore

Chairman and CEO, PepsiCo

CEO, PepsiCo Beverages Americas

2.

4

John Compton

Eric Foss

CEO, PepsiCo Americas Foods

CEO, Pepsi Beverages Company

5

6

Zein Abdalla

Saad Abdul-Latif

CEO, PepsiCo Europe

CEO, PepsiCo Asia, Middle East, Africa 26

PepsiCo, Incorporated (NYSE: PEP) is a Fortune 500, American global corporation headquartered in Purchase, Harrison, New York, with interests in the manufacturing, marketing and distribution of grain-based snack foods, beverages, and other products. PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company and Frito-Lay, Inc. PepsiCo has since expanded from its namesake product Pepsi to a broader range of food and beverage brands, the largest of which include an acquisition of Tropicana in 1998 and a merger with Quaker Oats in 2001 - which added the Gatorade brand to its portfolio as well. As of 2009, 19 of PepsiCo's product lines generated retail sales of more than $1 billion each,[4] and the company‟s products were distributed across more than 200 countries, resulting in annual net revenues of $43.3 billion. Based on net revenue, PepsiCo is the second largest food & beverage business in the world.[5] Within North America, PepsiCo is ranked (by net revenue) as the largest food and beverage business. Indra Krishnamurthy Nooyi has been the chief executive of PepsiCo since 2006, and the company employed approximately 285,000 people worldwide as of 2010. [6] The company‟s beverage distribution and bottling is conducted by PepsiCo as well as by licensed bottlers in certain regions.[7] PepsiCo is a SIC 2080 (beverage) company.

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.

Acquisitions and divestments: Between the late-1970s and the mid-1990s, PepsiCo expanded via acquisition of businesses outside of its core focus of packaged food and beverage brands; however it exited these non-core business lines largely in 1997, selling some, and spinning off others into a new company named Tricon Global Restaurants, which later became known as Yum! Brands, Inc.. PepsiCo also previously owned several other brands that it later sold, in order to allow it to return focus to its primary snack food and beverage lines, according to investment analysts reporting on the divestments in 1997. Brands 28

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 PepsiCo‟s 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.

Products and brands Largest PepsiCo Brands (based on 2009 retail sales) Brand Pepsi Mountain Dew Lay's potato chips Gatorade Diet Pepsi Tropicana beverages 7UP (outside U.S.) Doritos tortilla chips Lipton teas (PepsiCo/Unilever partnership) Quaker foods and snacks Cheetos Mirinda Ruffles potato chips Aquafina bottled water

30

Pepsi Max Tostitos tortilla chips Sierra Mist Fritatos corn chips Walkers potato crisps Source: 2009 Annual Report[29] $20b

$0

$5b

$10b

$15b

PepsiCo‟s product mix as of 2009 (based on worldwide net revenue) consists of 63 percent foods, and 37 percent beverages. On a worldwide basis, the company‟s current products lines include several hundred brands that in 2009 were estimated to have generated approximately $108 billion in cumulative annual retail sales. The primary identifier of companies' main brands within the food and beverage industry are those which generate annual sales exceeding $1 billion, and 19 of PepsiCo's brands met this description as of 2009: Pepsi-Cola, Mountain Dew, Lay's, Gatorade, Tropicana, 7Up, Doritos, Lipton Teas, Quaker Foods, Cheetos, Mirinda, Ruffles, Aquafina, Pepsi Max, Tostitos, Sierra Mist, Fritos, and Walker's.

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 company‟s net revenues came from North and South America, 16 percent from Europe and 13 percent from Asia, the Middle East and Africa.

PepsiCo Americas Foods PepsiCo Americas Foods consists of the company‟s food and snack operations in North and South America. This operating division is further segmented into Frito-Lay North America, Quaker Foods & Snacks, Sabritas, Gamesa and Latin America Foods. Food 31

and snack sales in North and South America combined contributed 48 percent of PepsiCo‟s 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 PepsiCo‟s 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 PepsiCo‟s 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 Marías Gamesa. PepsiCo‟s Latin America Foods (Spanish: Snacks América 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 América 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 Americas Beverages: This division contributed 23 percent of PepsiCo‟s net revenue as of 2009, [29] and involves the manufacture (and in some cases licensing), marketing and sales of both carbonated and non-carbonated beverages in North, Central and South America.[38] The main brands distributed under this division include Pepsi, Mountain Dew, Gatorade, 7UP (outside the U.S.), Tropicana Pure Premium orange juice, Sierra Mist, SoBe Lifewater, Tropicana juice drinks, AMP Energy, Naked Juice and Izze. Aquafina, the company‟s bottled water brand, is also marketed and licensed through PepsiCo Americas Beverages. PepsiCo also has formed partnerships with several beverage brands it does not own, in order to distribute these or market them with its own brands.[1] As of 2010, its partnerships include: Starbucks (Frappuccino, DoubleShot and Iced Coffee), Unilever‟s Lipton brand (Lipton Brisk and Lipton Iced Tea), and Dole (licensed juices and drinks).

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 PepsiCo‟s 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

PepsiCo Asia, Middle East & Africa : The most recently created operating division of PepsiCo covers Asia, the Middle East and Africa In addition to the production and sales of several worldwide Pepsi-Cola, Quaker Foods and Frito-Lay beverage and food product lines (including Pepsi and Doritos), this segment of PepsiCo‟s business markets regional brands such as Mirinda, Kurkure and Red Rock Deli, among others. While PepsiCo owns its own manufacturing and distribution facilities in certain parts of these regions, more of this production is conducted via alternate means such as licensing (which it does with Aquafina), contract manufacturing, joint ventures and affiliate operations. PepsiCo‟s businesses in these regions, as of 2009, contributed 13 percent to the company‟s net revenue worldwide.

Corporate governance: Headquartered in Purchase, New York, with research and development headquarters in Valhalla, New York, PepsiCo‟s 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 Ibargüen, 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:

Headquarters of Pepsi-Cola Venezuela (ES) PepsiCo has maintained a philanthropic program since 1962 called the PepsiCo Foundation, in which it primarily funds “nutrition and activity, safe water and water usage efficiencies, and education,” according to the foundation‟s website. In 2009, $27.9 million was contributed through this foundation, including grants to the United Way and YMCA, among others. In 2009, PepsiCo launched an initiative which the company calls the Pepsi Refresh Project, in which individuals submit and vote on charitable and nonprofit collaborations. The main recipients of grants as part of the refresh project are community organizations with a local focus and nonprofit organizations, such as a high school in Michigan which as a result of being selected - received $250,000 in 2010 towards construction of a fitness room for high school students. Following the Gulf of Mexico oil spill which occurred in the spring of 2010, PepsiCo donated $1.3 million to grant winners in determined by popular vote. As of October, 2010, the company had provided a cumulative total of $11.7 million in funding, spread across 287 ideas of participant projects from 203 cities in North America. In late 2010, the refresh project was reported to be expanding to include countries outside of North America in 2011.

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 PepsiCo‟s 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 company‟s 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 PepsiCo‟s 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 company‟s 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.

Packaging and recycling: Environmental advocates have raised concern over the environmental impacts surrounding the disposal of PepsiCo‟s bottled beverage products in particular, as bottle recycling rates for the company‟s products in 2009 averaged 34 percent within the U.S. The company has employed efforts to minimize these environmental impacts via packaging developments combined with recycling initiatives. In 2010, PepsiCo announced a goal to create partnerships that prompt an increase the beverage container recycling rate in the U.S. to 50 percent by 2018. One strategy enacted to reach this goal has been the placement of interactive recycling kiosks called “Dream Machines” in supermarkets, convenience stores and gas stations, with the intent of increasing access to recycling receptacles. The use of resin to manufacture its plastic bottles has resulted in reduced packaging weight, which in turn reduces the volume of fossil fuels required to transport certain PepsiCo products. The weight of Aquafina bottles was reduced nearly 40 percent, to 15 grams, with a packaging redesign in 2009. Also in that year, PepsiCo brand Naked Juice began production and distribution of the first 100 percent post-consumer recycled plastic bottle.

Energy usage and carbon footprint: PepsiCo, along with other manufacturers in its industry, has drawn criticism from environmental advocacy groups for the production and distribution of plastic product packaging, which consumed an additional 1.5 billion gallons of petrochemicals in 2008. These critics have also expressed apprehension over the production volume of plastic packaging, which results in the emission of carbon dioxide. Beginning largely in 2006, PepsiCo began development of more efficient means of producing and distributing its 38

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 company‟s 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 PepsiCo‟s 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 company‟s 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 PepsiCo‟s 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, PepsiCo‟s 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

Performance with Purpose At PepsiCo, we're committed to achieving business and financial success while leaving a positive imprint on society - delivering what we call Performance with Purpose. Our approach to superior financial performance is straightforward - drive shareholder value. By addressing social and environmental issues, we also deliver on our purpose agenda, which consists of human, environmental, and talent sustainability.

41

Guiding Principles: We uphold our commitment with six guiding principles.

We must always strive to: 1. Care for our customers, our consumers and the world we live in. We are driven by the intense, competitive spirit of the marketplace, but we direct this spirit toward solutions that benefit both our company and our constituents. Our success depends on a thorough understanding of our customers, consumers and communities. To foster this spirit of generosity, we go the extra mile to show we care. 2. Sell only products we can be proud of. The true test of our standards is our own ability to consume and personally endorse the products we sell. Without reservation. Our confidence helps ensure the quality of our products, from the moment we purchase ingredients to the moment it reaches the consumer's hand. 3. Speak with truth and candor. We tell the whole story, not just what's convenient to our individual goals. In addition to being clear, honest and accurate, we are responsible for ensuring our communications are understood. 4. Balance short term and long term. In every decision, we weigh both short-term and long-term risks and benefits. Maintaining this balance helps sustain our growth and ensures our ideas and solutions are relevant both now and in the future. 5. Win with diversity and inclusion. We embrace people with diverse backgrounds, traits and ways of thinking. Our diversity brings new perspectives into the workplace and encourages innovation, as well as the ability to identify new market opportunities.

42

6. Respect others and succeed together. Our mutual success depends on mutual respect, inside and outside the company. It requires people who are capable of working together as part of a team or informal collaboration. While our company is built on individual excellence, we also recognize the importance and value of teamwork in turning our goals into accomplishments.

43

About PepsiCo India PepsiCo entered India in 1989 and has grown to become the country‟s largest selling food and Beverage Company. One of the largest multinational investors in the country, PepsiCo has established a business which aims to serve the long term dynamic needs of consumers in India. PepsiCo nourishes consumers with a range of products from treats to healthy eats that deliver joy as well as nutrition and always, good taste. PepsiCo India‟s expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP, 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, Tropicana 100% fruit juices, and juice based drinks – Tropicana Nectars, Tropicana Twister and Slice, non-carbonated beverage and a new innovation Nimbooz by 7Up. Local brands – Lehar Evervess Soda, Dukes Lemonade and Mangola add to the diverse range of brands. PepsiCo‟s foods company, 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 Lay‟s Potato Chips, Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and Lehar brands and the recently launched „Aliva‟ savoury crackers. The company‟s high fibre breakfast cereal, Quaker Oats, and low fat and roasted snack options enhance the healthful choices available to consumers. Frito Lay‟s core products, Lay‟s, 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. The group has built an expansive beverage and foods business. To support its operations, PepsiCo has 36 bottling plants in India, of which 13 are company owned and 23 are franchisee owned. In addition to this, PepsiCo‟s Frito Lay foods division has 3 state-of-the-art plants. PepsiCo‟s business is based on its sustainability vision of making tomorrow better than today. PepsiCo‟s commitment to living by this vision every day is visible in its contribution to the country, consumers and farmers. 44

.

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 India‟s 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

PepsiCo‟s 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 Lay‟s Potato Chips, Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and Lehar brands. The company‟s high fibre breakfast cereal, Quaker Oats, and low fat and roasted snack options enhance the healthful choices available to consumers. Frito Lay‟s core products, Lay‟s, 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

Celebrity endorsement of Pepsi: Celebrities have been paid to advertise for Pepsi products. United States NASCAR driver Jeff Gordon who runs a Pepsi paint scheme at Talladega Superspeedway and Auto Club Speedway. Joan Crawford was married to PepsiCo president Alfred Steele from 1955 to 1959 (his death), and was advertising executive and

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

Use of celebrities as part of marketing

communications strategy is a fairly common practice for major firms in supporting corporate or brand imagery. Firms invest significant monies in juxtaposing brands and organizations

with

endorser qualities such

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

and Meenaghan (1997/98), consumers' response to endorsement messages is linked to relatedness, which means that the more the athlete is related with the product, the more effective the endorsement is. This largely emphasizes the importance of elite-level athletes as endorsers for athletic shoe companies (producing sport specific products), which are unquestionably the largest spenders on endorsements. On the other hand, when an athlete has an endorsement-deal with a producer of nonsport specific products it is crucial that there is an appropriate "image match" between the athlete or the sport in which he's involved and the brand. For example, for a company such as Mercedes it would be appropriate to sponsor a golf player, because of the shared perceptual characteristics (Milne & McDonald, 1999). Many of today's top professional athletes have signed sport specific endorsement contracts with sport apparel companies (Tedeschi, 1995). Beside Michael Jordan, other examples of high profile celebrity endorsers include Tiger Woods, Andre Agassi, Pete Sampras and Renaldo for Nike, Shaquille O'Neal for Reebok, Earvin "Magic" Johnson for Converse, Donovan Bailey for Adidas and Lindford Christie and Merlene Ottey for Puma. In Europe the most eminent cases are situated in soccer: del Pierro, Zidane, Beckham and Kluivert as the showpieces of Adidas and Alan Shearer as the holder of a multi-million contract with Umbro. Some international sport celebrities have their own signature line of products, specifically designed to their individual characteristics and preferences. Again, the "Air Jordan" brand of Nike, characterized by the magic number 23 and the image of a dunking basketball player instead of the 'Swoosh' symbol, can be considered to be the best example. Through a careful promotional campaign, Nike made its "Air Jordan" range of athletic footwear the biggest selling athletic shoe of all time (Amis et al., 1997). Other signature products include the idiosyncratic golden spikes of Johnson, Renaldo‟s 'R9 Mercurial' soccer boots and the diverse apparel and footwear lines inspired by the personalities of Sampras, Agassi and Woods. Endorsement as a marketing strategy :

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 company‟s advertising, creating a positive feeling towards the brand. Thus using a celebrity in a company‟s 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 company‟s 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 celebrity‟s 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).

Alperstein 1991says that “Traditional celebrity endorsements are as well established as the concept of celebrity itself.”(Anonymous, 2007).Celebrities influence on consumers appears to be larger than ever before. When used effectively celebrity endorsers have 54

the potential of serving a valuable role in enhancing a brand‟s 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 Ambani‟s 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 consumer‟s symbolic union with its aspirational reference group Menon

describe that Reference groups among consumers are viewed as being a

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 consumer‟s 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 one‟s 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. (O‟Mahony and Meenaghan, 1998).

56

Pros of celebrity endorsement Academic researchers have conducted sufficient empirical research to express the benefits of product endorsement, in addition to the intuitive arguments that rationalize this practice.Till and Shimp, 1998 says that It is observed that the presence of a renowned persona helps in solving the problem of over communication that is becoming more and more prevalent these days Kulkarni & Gaulankar, 2005)

says that The increased consumer power over

programmed advertisement has made advertising has made advertising more challenging. To ease this threat and to help create and maintain consumer attention to advertisements celebrity endorsement strategy is seen to be advantageous. Celebrities have the potential of helping the advertisements stand out from the surrounding clutter, guiding towards a improved communicative ability by cutting through excess noise in a communication process( Sherman 1985). Also one probable solution in the face of tarnished company image is the hiring of a celebrity to restore it. Celebrity Endorsement assists in the image polishing of the company‟s image Erdogan, 1999 in his theory says that A stream of studies identifies the attributes such trustworthiness, similarity, likableness, expertise that cause a celebrity to stand as a persuasive source which in turn creates a sense of certainty.(Mustafa 2005). It is shown by research and experience that consumers are highly ready to spend and more comfortable , when products that relate to their desired image is endorsed by celebrities. (Internet World 2001) as it helps them to take more notice of celebrity endorsements and improve their level of product recall. Bowman 2002 says that Another reason for the use of celebrity endorsement is because it has a strong impact on the learning style and memory which is critical to marketing communication success. This is because most consumers are not in a purchasing situation when they come into contact with the brand message. Schultz & Barnes, 1995 Marketers make use of celebrity endorsements as they lead to better information storage in the minds of the consumers which can be readily retrieved when the purchasing situation dose arise 57

Selecting the „Right‟ celebrity Shimp (2000) put forward five factors in order of decreasing importance namely, (1) the celebrity credibility, (2) celebrity and audience match-up, (3) celebrity and brand match up,(4) celebrity attractiveness, and (5) miscellaneous considerations, which were considered by advertising executives while making their celebrity-selection decisions. Models and 20 concepts were constructed by scholars to draw the liaison between celebrities, the brand they endorsed and the perception of the people related to the product. Khatri, 2006 says that One of the earliest models was the Source Credibility Model by Hovland et al. (1953). Apart from this there were 3 additional models recognised by Erdogan (1999) which were the Match-up Hypothesis by Forkan (1980), the Source Attractiveness Model by McGuire (1985) and the Meaning Transfer Model by McCraken (1989). The following part will take a closer look at the stated considerations and the associated models. Celebrity Endorsement – Indian Perspective Celebrities are involved in endorsing activities since late nineteenth century Erdogan, 1999 says that The latter part of the '80s saw the mushrooming of a new trend in India; brands started being endorsed by celebrities (Katyal, 2007) says that The advent of celebrity endorsements in advertising in India began when Hindi film and TV stars as well as sportspersons began making inroads on a territory that was, until then, the exclusive domain of models Kulkarni and Gaulkar, 2005 describe that One of the first sports endorsements in India was when Farokh Engineer became the first Indian cricketer to model for Bryl cream (Kulkarni and Gaulkar, 2005). Probably Lux the soap brand has managed to realize and made it synonyms with celebrity endorsement in India till date (Katyal, 2007).

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)

shows the increase in celebrity

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

Exploring the relationship between Celebrity endorser

effects and advertising effectiveness A quantitative synthesis of effect size Clinton Amos, Holmes,David Strutton give a theory in This study provides a quantitative summary of the relationship between celebrity endorser source effects and effectiveness in advertising. The Kruskal-Wallis nonparametric test is used to identify the most influential celebrity endorser source effects on effectiveness. The role of celebrity/product fit, interaction effects, sample type, study setting, and country of study are also included as moderators. Results suggest negative celebrity information can be extremely detrimental to an advertising campaign. The source credibility model composed of celebrity trustworthiness, celebrity expertise, and celebrity attractiveness appears to capture the three most influential source effects on purchase intentions, brand attitudes and attitudes towards the advertisement. An Exploratory Study in Celebrity Endorsements by Subhadip Roy This study raises three questions and attempts to provide tentative explanations for them. The first two questions relate to locating, in the consumer's perceptual space, the relative position of Indian celebrities and brands on a set of personality attributes. The third question relates to determining the fit between the celebrity and the brands endorsed by her/him. The results suggest that consumers differentially rank both celebrities and brands. Specifically, Amitabh Bachchan ranks high on five personality attributes, and brands such as Pepsi and Coke rank high on four personality attributes. The study further shows that although celebrities may endorse several brands, their personality does not 59

fit well with the personality of the brand they endorse. Evidence offered here supports the basic assumptions of the celebrity–product congruence model. Celebrity endorsement: A strategic promotion perspective by Dr. Khatri Puja, Faculty member

Apeejay School of Management, Dwarka, in her research explains that The

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

Impact of Celebrity Endorsement on Consumer Buying Behaviour and Brand Building study by Dinesh Kumar Gupta , 2007 explain that 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. 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 the 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.

The Value of Celebrity Endorsements: A stock Market Perspective Alexander Molchanov

- Ecole Doctorale Sciences de Gestion

says that

Are celebrity

endorsements worthwhile investments in advertising„ To answer this question we 60

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

endorsementsclosely match the incremental costs due to such contracts. Further, we investigate if the announcement date return depends on a number of characteristics that are often used in the endorsement literature. As a result, we find that endorsements of technology industry products coincide with significant positive abnormal returns around the announcement dates. Finally, we find weak support for the match-up hypothesis between celebrities and endorsed products.

The Effectiveness of Celebrity Endorsement in India : Rajni Surana 2008 research that practice of celebrities being used for rendering services other than performing their actual job as either an actor or an athlete, such as endorsements has proliferated over time. Despite the cost and the risks involved with this technique of advertising, it is been used quite extensively in the present era. The instrument of celebrity endorsement has nowadays become a pervasive element in advertising and communication management. India as a country is known for loving its stars. The Indians idolize their boll wood actors and cricketers. The advertisers see this as an opportunity to grab and work on so as to expand their operations and promote their product. This dissertation focuses on examining the perception of these Indian Consumers about the celebrity endorsement process and the subsequent impact on their purchase decisions,

61

The Impact of Corporate Credibility and Celebrity Credibility on Consumer Reaction to Advertisements and Brands: Goldsmith, Lafferty and Newell (2000), "The Impact of Corporate Credibility and Celebrity Credibility on Consumer Reaction to Advertisements and Brands says 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. Nord and Peter 1980 says that There are many factors which interact to explain the effectiveness of celebrity endorsement. Vicarious learning is a behaviour modification concept through which consumers‟ behaviours are influenced by observing the actions and consequences of others This is seen in celebrity endorsement with companies frequently endorsing celebrities who possess aspirational qualities and who may be seen engaging in desired behaviors and receiving product benefits. This results in consumers exhibiting desired behaviors learned through observation. Sarah Ulmer, an Olympic Gold medalist, and her endorsement of McDonalds healthy options menu in New Zealand is an example of the use of an aspiration celebrity to influence behaviors. The celebrity‟s effectiveness stems from their symbolic asp rational reference group associations Solomon and Assael1987, as cited in Byrne, Whitehead and Breen 2003 Reference groups provide points of comparison through which the consumer may evaluate attitudes and behavior, with the typical consumer symbolically aspiring to identify with this group by purchasing the product endorsed by the celebrity(Kamins 1990).Initial studies used „source models‟ to explain the effects of celebrity endorsers. In particular, the source credibility model (Hovland and Weiss 1951) and the source attractiveness model (McGuire 1985) have been validated by many scholars. Thesemodelspropose that celebrities owe their effectiveness to their credibility and attractiveness, which includes elements such as expertise, trustworthiness, familiarity, similarity and likeabilityofthe source (McCracken 1989). This is similar to Tom et al‟s (1992) suggestion that celebrities‟ ability to influence consumers lies in their possession of various types of power(expert, reverent, 62

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 consumer‟s 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

Study on Impact of Celebrity Endorsements on Brand Image byDebiprasad Mukherjee 2009 says that Celebrity endorsement has been established as one of the most popular tools of advertising in recent time. It has become a trend and perceived as a winning formula for product marketing and brand building. It is easy to choose a celebrity but it is tough to establish a strong association between the product and the endorser. While the magnitude of the impact of celebrity endorsement remains under the purview of gray spectacles, this paper is an effort to analyze the impact of celebrity endorsements on brands. Objective of this article is to examine the relationship between celebrity endorsements and brands, and the impact of celebrity endorsement on consumer's buying behavior as well as how consumer makes brand preferences. This paper proposes a 20 point model which can be used as blue-print criteria and can be used by brand managers for selecting celebrities and capitalizing the celebrity resource through 360 degree brand communication which, according to this paper, is the foundation of the impact of celebrity endorsement. Celebrity endorsement is always a two-edged sword and it has a number of positives - if properly matched it can do wonders for the company, and if not it may produce a bad image of the company and its brand.

The Impact of Celebrity-Product Incongruence on the Effectiveness of Product Endorsement.:research paper byLee, Jung-Gyo

this 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 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

The measurement and

determinants of brand eqiuity : A financial in This paper presents a technique for estimating a firm's brand equity that is based on the financial market value of the firm. Brand equity is defined as the incremental cash flows which accrue to branded products

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 65

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

Focuses on Yao Ming, who is going into his third season

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.

66

And Hello, A-Listers! Article by Haines-Stiles, Sasha in this they say that celebrities who are endorsing products. After an unlikely move into infomercials, what's next for A-list celebrities? Regular commercials. Some of the biggest names in entertainment now clamor for the profile (and cash) afforded by a TV ad--and that's good news for marketers. Ten years ago it took many millions of dollars to coax a major star into an endorsement deal, but today's glut of high-profile spokesmen has resulted in bargains to be had. P. Diddy took less than $1 million to hitch a ride in a Pepsi truck in his much-ballyhooed Super Bowl spot. Here is a look at some star-studded alliances: Catherine Zeta-Jones: T-Mobile. $20 million for four years as the face of the wireless phone company. Nicole Kidman: Chanel. $8 million for one-year ad run with serious Oscar pedigree (Baz Luhrmann directed). Brad Pitt: Heineken. $5 million for one ad's overseas run; $1 million more for its sole U.S. airing in this year's Super Bowl. Pepsi Makes a Date with Destiny's Child: by

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

STAR POWER: article by Bruss, JillSource Focuses on the celebrity endorsements to beverage products in the United States. Details on marketing strategy of Pepsi company; Factors affecting the effectiveness of celebrity endorsements; Influence of celebrity to brand and the campaign execution; Information on the marketing approach of 7 UP campaign.

67

“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. PepsiCo‟s yongistaan advertisement another trendsetter in yhe youth marketing arena by KISHLOY ROY This study explain Pepsi‟s 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

68

image would produce more favorable responses to advertisements than either a complete match or an extreme mismatch PATRICIA Source in his research of PEPSICO‟S NEW GENERATION Profiles Roger Enrico, the new chief executive officer of PepsiCo. Enrico the pioneer of the use of celebrities to endorse soft drinks; The former president of Pepsi-Cola USA; A look at his background and childhood in Minnesota; His 1990 heart attack; The possibility that Enrico will unload PepsiCo‟s restaurants; Anticipation of major management changes. Lord, Kenneth R. Putrevu, Sanjay examines the relationship between dimensions of celebrity endorser credibility (attractiveness, expertise, trustworthiness) and consumer motivation (informational and transformational). Studies 1 and 2 reveal celebrity expertise and trustworthiness are the primary determinants of informational processing, while attractiveness is the principal variable driving transformational processing. The third study finds that teenage consumers, though affected by informational and transformational motivations, are less likely than adults to discriminate between attractiveness, trustworthiness, and expertise, forming their judgments instead on the basis of a one-dimensional perception of celebrity credibility. Mutel, Glen present Pepsi spots top list of ads covered by press ArticleReports on the press coverage won by sportsman David Beckham's advertising campaigns for soft drink company Pepsi Co. Other advertisements which got adequate press coverage; Advertisements which did not feature any celebrity and yet made to top rankings; Effect of the presence of celebrities in the advertising campaigns. Mark Britt explain Pepsi to be soft drinks' big blue. Reports that Pepsi-Cola Co. plans to phase in a new, blue can design, similar in appearance to its Pepsi Max packaging, to its worldwide market. The success of Pepsi Max in Europe; Plans for a contoured can, which presents some shipping and handling difficulties; Plans for a splashy, celebrityfilled advertising campaign to support the new blue can.

69

EFFECT OF ENDORSEMENT ON PRODUCT: Pepsi Makes Heavy Play In Sports Marketing Field. the article presents an interview with Ralph Santana, who is vice-president of sports, media, and interactive marketing at Pepsi-Cola North America. In the article Santana discusses sports marketing, activation and the pros and cons of athlete endorsements. Santana explains that athlete and celebrity endorsements are important depending on the product. When asked about the challenges facing sports marketing, he explains that the space has become crowded and difficult to break through. Rohit Suresh Jain 2007-2008 A Study on the Impact of Celebrity Endorsement on the Indian Consumers‟ Purchase Decision: in this A dissertation presented in part consideration for the degree of “MA Marketing”. The focus of this dissertation is to understand the impact of celebrity endorsement on the consumers purchase decision. The research focuses on the Indian consumers who have shown a very different yet interesting way of recognising celebrities and stars. In a place like India where stars and cricketers are idolised and looked up to, marketers can see this opportunity promote their products and create a wider consumer base. The study uses a qualitative research style to collect data, using interviews as the form of data collection method. This research helps providing how celebrity endorsement impacts on the Indian consumers purchase decision Eisend, Martin Viadrina Tobias say that Immediate and delayed advertising effects of celebrity endorsers' attractiveness and expertise The article presents research on the effectiveness of endorsements by celebrities in advertising. Delayed effects of celebrity endorsements on consumers are considered, applying an affective-cognitive framework to compare delayed effects versus the immediate effects of a celebrity's attractiveness to consumers and perceived expertise on consumer attitudes towards brands and brand name products. It is found that while the attractiveness of a celebrity had the most immediate effect on those attitudes, perceived expertise provided the longest-lasting positive effect on consumer attitudes.

70

White, Darin W.Goddard, Lucretia1Wilbur, Nick

say that The effects of negative

information transference in the celebrity endorsement relationship

paper is to test

empirically the impact of negative information about a celebrity spokesperson on consumers' perceptions of the endorsed brand. In addition, it is the first study to examine the reverse relationship: the impact of negative information about the brand on the celebrity endorser. - The present study provides a starting-point for further research, on negative information transference in the celebrity endorsement relationship. Practical implications - It is crucial that retailers be aware of the risks associated with using celebrities to endorse their stores and products. Given that these results provide tentative support for the commonly held belief that a decline in the celebrity's image can impact the image of the brand, it is important that retailers carefully choose an endorser who currently has a good image and will likely be able to uphold this image in the future. Originality/value - The paper introduces and empirically examines one explanation of how negative information may impact the celebrity advertising process. Tripp, Thomas D. Jensen in their paper on The Effects of Multiple Product Endorsements by Celebrities on Consumers' Attitudes and Intentions investigated the effects of number of products endorsed by a celebrity and number of exposures to the celebrity on consumers' attitudes and purchase intentions. In study 1, using print ads as the Stimuli, the results revealed that, as the number of products endorsed increases consumers' perceptions of celebrity credibility, celebrity likability and attitude toward the ad become less favorable. These results were independent of the number of exposures to the celebrity. Study 2 explored underlying attribution processes associated with consumers' perceptions of multiple product endorsers using depth interviews. The findings are discussed from attribution and repetition theory perspectives. Stallen, Mirre present the paper on Celebrities and shoes on the female brain: The neural correlates of product evaluation in the context of fame.The present study investigates which processes underlie the effect of fame on product memory and purchase intention by the use of functional magnetic resonance imaging methods. We find an increase in activity in the medial orbitofrontal cortex (mOFC) underlying the processing of celebrity–product pairings. This finding suggests that the effectiveness of 71

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, 72

the incongruity between self-image and the image projected by an advertisement is found to correlate to postpurchase dissonance in the purchasers of lipstick. A follow-up study tracks satisfaction and repeat purchase intentions, and through structural equation modeling, it is established that although satisfaction is not related directly to dissonance, repeat purchase is dependent upon both satisfaction and dissonance. Celebrity endorsement in highly involved regime: Tellis (1998) says that Despite the obvious economic advantage of using relatively known personalities as endorsers in advertising campaigns, the choice of celebrities to fulfill that role has become common practice for brands competing in today's cluttered media environment. There are several reasons for such extensive use of celebrities. Because of their high profile, celebrities may help advertisements stand out from the surrounding clutter, thus improving their communicative ability. 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 awarenes

Brand Personality Creation through Advertising: MAXX Working Paper 2001-01, February 2nd, 2001 Brand Personality is one of the core dimensions of brand equity. Brand personality refers tothe emotional side of a brand image. It is created by all experiences of consumers with abrand, but advertising plays a dominant role in personality creation. In this paper we explore the mechanism that builds brand personality with the help of advertising. We integrate advertising models with the theory of brand personality. Our integrated framework leads to a number of propositions that set an agenda in this field. In building our framework we incorporate theories from the fields of marketing (brand equityand advertising), communication science and psychology (personality).

73

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 person‟s 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”

Guilford, 1973, Human personality traits are determined by multi-dimensional factorslike the

individual‟s

behavior,

appearance,

attitude

and

beliefs,

and

demographiccharacteristics. Based on the trait theory, researchers have concluded that there are five stablepersonality dimensions, also called the „Big Five‟ human personality dimensions (Batra,Lehmann & Singh, 1993). The „Big Five‟ human personality dimensions areExtraversion/introversion, Agreeableness, Consciousness, Emotional stability, and Culture.Based on these human personality dimensions, Jennifer Aaker (1997) identifies the new „ BigFive‟ dimensions related to brands. These are Sincerity, Excitement, Competence,Sophistication, and Ruggedness. The brand personality dimensions correspond to three of the „Big Five‟ human personality dimensions J. Aaker, 1997 Agreeableness and Sincerity both capture the idea of warmthand acceptance. Extraversion and Excitement both include the notions of sociability,energy,and activity, while Consciousness and Competence both connote responsibility,dependability, and security. The other two brand personality dimensions differ from any ofthe „Big Five‟ of human personality.

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 74

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 brand‟s user imagery.

75

Research Methodology:

Title of the study: “Impact of celebrity endorsement on brand equity of Pepsi”

Duration of the project: The project duration was a semester long project

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.

Need of the study: After going through various sources like magazines, newspapers, websites I found that

lot of research work has undertaken by researcher regarding impact of celebrity

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.

76

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.

77

Sampling Technique: Convenience sampling technique will be used in this research project.

Scope of study: 

Scope of celebrity endorsement is very vast in this competitive world to increase brand awareness among people. celebrity endorsement by Pepsi make Pepsi market leader in soft drink segment



Study on celebrity endorsement effect on brand equity of pepsi describes endorsement of Pepsi and its impact on Pepsi which can useful for future strategies.



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 establish a more definite correlation between celebrity impact on brand equity and relation with customer's psychology.



To carry out study on other possible aspect of endorsements.



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.

78

Data analysis and interpretation: Occupation:

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

79

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

which category of products you like most? (a) Soft drink

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.

81

if soft drink than which product you prefer mostly?

Respondents Pepsi

coca cola

Local brands

Not specify

100

40

10

5

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

82

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.

83

if yes than which factor affects you most?

Respondents Friends 100 15

Advertisements 35

Opinion leader 15

Other 20

other=20

opnion leader=15

advertisement=35

friends=30

0

.

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.

85

Do you like to see any celebrity endorsing your brand?

Respondents 100

Yes 60

Can‟t 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 don‟t want and 15 of the respondents weren‟t sure. So This clearly shows how much important these celebrities are in the daily life of common man.

86

what comes in your mind when you go for Pepsi?

Respondents Celebrity endorse 100 35

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. ..

87

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.

88

in case of Pepsi celebrity persona you like most?

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 % don‟t want to any celebrity Endorsing their brand they want experts for their advice.

89

Who is brand ambassador of Pepsi?

Respondents Ranveer kapoor 100 20

m.s.dhoni 65

Don‟t 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 don‟t 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

is celebrity endorsement make you loyal toward Pepsi

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 don‟t agree with this.

91

How you rank endorsement of pepsi?

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 Pepsi‟s endorsement whereas 25 want some improvement in celebrity endorsement.

92

Fact and Findings: After completing survey I found that:

 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 people‟s 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. 93

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.

94

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.

95

In low-involvement products, it has almost become a trend to use celebrity appeals. This may be more effective if the brand pioneers celebrity usage. Though consumers are getting use to the celebrity clutter, there is always a novelty appeal that a celebrity could generate by being the first to be associated with a brand in the category. But is a leader in instant coffee (chicory-based) and all along it has been using the filter taste as its proposition. BBIL's Green. A celebrity used across product categories is likely to be less effective than a celebrity who starts with a few categories. Consumers tend to lose interest in the celebrity because of over-exposure. Besides that celebrity could dilute the credibility associated with his own image by the dilution of image created by diverse products. Celebrity image should fit in with the brand image or personality (as started earlier). A brand of jeans used a Western film celebrity (who is better known among middle-aged adults) while attempting to target youngsters. The target segment should be able to identify with the celebrity. Sometimes the celebrity used may be too sophisticated for the target segment and the very concept of reference groups may not be reflected if this happens. Bombay Dyeing used a celebrity (for men's suiting) who may have been above the identification plane of the target segment. There may be an alternative of creating a "Common-man appeal" for products like detergents and celebrities may have to be used carefully weighing a number of factors. Surfs Lalitaji typifying a middle class housewife may have been more effective than a glamorous celebrity for a product like detergent, which is for the mass market. A "common-man appeal" brings in spontaneous identification with the commercial. The consumer feels a person like him or her is benefit the and hence identify with the brand. Ariel used this appeal with its candid camera technique. When there are already a number of celebrities in the category, a new brand attempting the celebrity route may not be the best alternative. With a proliferation of celebrities in

96

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

97

Conclusion:

Despite the obvious economic advantage of using relatively known personalities as endorsers in advertising campaigns, the choice of celebrities to fulfill that role has become common practice for brands competing in today's cluttered media environment. There are several reasons for such extensive use of celebrities. Because of their high profile, celebrities may help advertisements stand out from the surrounding clutter, thus improving their communicative ability.

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.

98

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 consumer‟s 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.

99

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 Today‟s 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 isn‟t the complete solution. Company can‟t 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 shouldn‟t 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 1960‟s recessions 290 global companies increased their advertisement expenditure and their sales increased by whopping 300%. Some of the companies are well established brand name today‟s like IBM, Microsoft, 3M etc.

100

Appendix Questionnaire

Name: Phone: Age

:

(A) 18-25 yr

(b) 26-32 yr

(c) 33-40 yr

Occupation: (a)Student

(b) Business class

(c)Service class

(d) Other

Q.1 which category of products you like most ? (a)Soft drink

Q.2

(b) Juice

(c)Other

if soft drink than which product you prefer most ? (a)Pepsi

(b) Coco cola

(c)Local brand

(d) Not specify

Q.3 Do you collect any information or take advice to make your purchase decision ? (a) Yes

(b) No

Q.4 If yes than which factor affects you most? (a)Friends

(b) Advertisement

Q.5 which factor related to product affects you most? 101

(c)

Opinion leader

(a) Price

(b) Quality

(c)Celebrity endorsement

(d) other

Q.6 DO you like to see any celebrity endorsing your brand? (a)Yes

(b) No

(c) Can‟t say

Q.7 What comes in your mind when you go for Pepsi? (a)Celebrity

(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

Q.9 in case of Pepsi celebrity persona you like most? (a) Bollywood star Q.10

(b) Sprts star

(c) Experts

Who is brand ambassador of Pepsi ? (A) Ranveer kapoor

(b)M.S. Dhoni

(c)sehwag

(d) Don‟t know

Q.11 is celebrity endorsement make you loyal toward Pepsi ? (a)

Yes

(b) No

Q.12 how you rank endorsement of Pepsi? (a)Good

(b) Average

Q.13 any suggestion?

Thanks for your cooperation

102

(c) Should improve

Bibliography: REFERENCES: 

Philip A.Stroke(2009), "impact of celebrity endorsement on stock prices", Journal of Consumer Research, Vol. 14 No.March .



Roy, Shubhadip (2007), "Consumer‟s perceptual space and Indian celebrities in relation to brand attributes", Journal of Business Research, Vol. 37 No.1,



Shimp (2007), "Celebrities as spokesperson", Journal of Retailing, Vol. 76 .



Goldsmith et al.(2002): “Celebrity endorser vis-à-vis corporate credibility,” Media Tech Foundation, Flemington, NJ



Solomon et al. (2002) "Celebrity endorsement in risk regime", Communication Research, Vol.



Kambitsis et al., (2002) The National Bullying Survey 2002: .



Pettit (2000), Building Strong Brands, Free Press, Boston, MA.,



McGuire et al.(1999), "Expertise and trustworthiness in relation to credulityCelebrity endorsement", Quarterly Journal of Austrian Economics, Vol. 3 No.1,



Henry(1999) "Role of PSA‟s in USA‟s Radio market", European Journal of Marketing, .



. Dwane Hal Dean (1999)Managing Brand Equity: Capitalizing on the Value of a Brand Name for manufacturer prospective, The Free Press, New York, NY,



Sheth et al. (1999)"Celebrity endorsement in relation to perception and stages of consumer adoption for celebrity endorsement ", Advances in Consumer



Till and Shimp(1998) “Celebrity endorsement-a different prospective”, The Journal of Consumer Affairs, Vol. 27 (1..



Tellis (1998) "Celebrity endorsement in highly involved regime", Journal of the Academy of Marketing Science, Vol. 16 No.4, .



Lang and Goodwill (1997), “PSA- Do they really work?” Oxford University Press, Oxford, .



Freiden(1994), "Celebrity endorser as credible spokesperson", Journal of

. 103

.



King (1991), "Determinants of strong brand equity: a behavioral analysis", The Journal of Product and Brand Management, Vol. 6 No.5



Obanian(1990): "The role of emotions in marketing", Journal of the Academy of Marketing Science, Vol. 27 No.2.



Friedmen et al.(1976), “ The power of brand”, Journal of Business, Vol. 23



Triandis (1971),"Relationship between attractiveness,similarity,familiarity and

.

likeability", Advances in Consumer Research, Vol. 18 No.1. 

Hovland et al. (1953), “Whom to chose as celebrity?”, New York, NY, .



Author: Erdogan, Zafer B. Source: Journal of Marketing Management, Volume 15, Number 4, May 1999 , .

Brand Equity (Economic Times) may 28 2008 Advertising and Sales Promotion strategy by Gerard J. Thellis. Advertising Excellence by Bovee, Thill Dovel and Wood. Advertising Principles and Practice, 2nd Edition by Williom wells, Vohn Burnett, Sandra Muriarty. Advertising Promotion and supplemental Aspect of Integrate marketing Communication, 4thedition by Shimp. Consumer behavior by Robert East Consumer Behavior, 6th Edition, by Lean G. Sehiffman and Leslic lazan Kanuk.Copeland, R., Frisby, W., & McCarville, R. (1996). Understanding the Sport Sponsorship Process From a Corporate Perspective. Journal of Sport Management, 10,

104

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

Magazines and articles: 

Marketing mastermind july 2008



Advertising express may 2009



Stargazing editorial. CMO magazine P-1, June 2005



Massey News Article



Strategic Marketing – Times of India group article

..

105