Factors For Successful Brand Endorsements Marketing Essay

Published Date: 23 Mar 2015

As even innovative, differentiated products can be imitated quickly, it is difficult to establish a unique position on the market. The risks involved in establishing a new brand are high, with a failure rate of around 85 percent. Due to this "successful brands provide quality assurances to consumers and can be leveraged to introduce new brands/products" or to endorse existing brands/products. This is usually done through line and brand extensions [2] - which have been discussed in the previous chapters of this paper.

An alternative to this procedure is brand endorsement or co-branding, "a branding strategy where two or more brands will be combined sometimes in one single product". However, not only brands can be endorsers, also celebrities or third party organizations can provide support to a brand. When it works, brand endorsement has the potential to achieve synergy effects that rely on the unique strengths of each contributing brand, celebrity or organization. [3] 

Because brand endorsement can be done in several ways, this chapter of the paper will examine just three types of endorsements: through other brands, through people or celebrities and through third party organizations. Due to the special relevance of the brand architecture, the main focus will be concentrated on endorsement through other brands or corporate brands.

4.1 Definition

Many different terms have been used to refer to cooperative brand marketing activities e. g., co-branding, brand alliances, joint branding, symbiotic marketing and last but not least, brand endorsement. In this paper the terminology of Rao and Ruckert (1994) will be adopted "in which cooperative branding involves two or more individual brands, products and/or other distinctive proprietary assets. These brands can be represented physically (e.g., bundled packages) or symbolically (e.g., in advertisements) by the association of brand names, logos or other proprietary assets of the brands." [4] Referring to this definition cooperative brand marketing can take a variety of forms including bundled products, true product combinations (e.g., branded whiskey/cola combination), component or ingredient branding (e.g., DuPont Teflon) or joint sales promotions (e.g., buy one brand, get the second brand free). [5] Apart from this brand endorsement also describes how a corporate brand alternatively umbrella brand or any other brand provides support and credibility to the driver brand's claims. For example Gillette is an endorser for the driver brand Fusion razors or Kellog's is an endorser for Frosties. [6] But also the support of Renault for its subsidiary Dacia falls under the definition for brand endorsement.

4.2 Types of Endorsements

As stated previously there are several possibilities to endorse a brand. The most important ways are illustrated in figure 1 and will be examined next.

Figure 1: Types of endorsements

4.2.1 Through other brands

"A new product can become linked to an existing corporate or family brand that has its own set of associations. An existing brand can also leverage associations by linking itself to other existing brands from the same or different company." [7] This occurs when two or more existing brands are combined into a joint product or are marketed together in some fashion.

When thinking of corporate brands "the primary role for these endorsers is to reassure the customer that the product will deliver the promised functional benefits because the company behind the brand is a substantial, successful organization that would only be associated with a strong product" [8] . The endorser might have special credibility with respect to certain areas of expertise (such as Honda in small engines or Hewlett-Packard in industrial equipment) or it could have a broad umbrella effect (such as GE or Gillette). In these cases a driver brand is endorsed by a corporate brand (e.g., Hewlett-Packard is the endorser for the driver brand Laser Jet or General Mills is the endorser for the driver brand PopSecret). [9] A special case of this strategy is ingredient branding, which involves creating brand equity for materials, components or parts that are necessarily contained within other branded products (e.g., Betty Crocker baking mixes with Hershey's chocolate syrup). In some cases the secondary brand is always an ingredient, what is not marketed as a separate product to the end consumer (e.g., DuPont Teflon or Intel Microprocessor). [10] 

Figure 2: DuPont's Ingredient Branding Strategy

Apart from this, different companies as well as subsidiary companies merge together to form brand or advertising alliances. An interesting example is the "Swatchmobile". In this case DaimlerChrysler's Mercedes Benz unit agreed to manufacture the Smart Car, which is small and low cost, and designed and named after the colorful and fashionable lines of Swatch watches. Another company which has forged licensing and co-branding partnerships is General Mills (e.g. General Mills Pokemon Rolls, General Mills Hawaiian Punch Fruit Snacks). [11] Another recent example for such an endorsement, as mentioned before, is the advertisement campaign of Dacia which is strongly endorsed by their parent company Renault.

4.3.2 Through celebrities

Beside brand endorsement through other brands, a product may also be promoted by using well-known people. "The rationale behind these strategies is that a famous person can draw attention to a brand and shape the perceptions of the brand by virtue of the inferences that consumers make based on the knowledge they have about the famous person." [12] Due to this reason, a celebrity endorser has to be selected very carefully. The endorser has to be seen as "credible in terms of expertise, trustworthiness and likeability or attractiveness, as well as having specific associations that carry potential product relevance" [13] . Some prominent examples of celebrity endorsements are Tiger Woods endorsing Nike, Britney Spears endorsing Skechers or Nicole Kidman endorsing Chanel. Endorsements are not only carried out by celebrities. There are also spokespersons such as chairmen or CEO's that can be endorsees. For instance, Lee Iacocca was seen as a feisty, patriotic symbol for Chrysler automobiles or Dave Thomson was an effective pitchman for his Wendy's restaurant chain because of his down-home, unpretentious, folksy style and strong product focus. [14] An actual example of a CEO who has shaped the image of a brand to a large extent is the innovative and charismatic founder of Apple Inc. Steve Jobs.

4.3.3 Through events and organizations

Another option to leverage secondary brand knowledge to build brand equity is through event sponsorship or third-party sources. "The main means by which an event can transfer associations is on the basis of various dimensions of credibility." A brand may seem more likable, trustworthy or expert when becoming linked to an event. Sponsored events can endorse a brand by improving brand awareness, adding new associations, or by improving the strength, favorability and uniqueness of existing associations. [15] Various examples are "Kodak - the official film of the 1996 Olympics" or Coca-Cola as long term sponsor of the World Cup.

Finally, it should be noted that a brand can also be endorsed by linking the brand to various third-party sources. For example, the Fair Trade seal is seen as a mark of humanity or the Good Housekeeping seal has been seen as a mark of quality for decades. Endorsements from leading magazines (e.g., PC magazine), organizations (e.g., National Health Organization, American Medical Association) and experts can improve perceptions and attitudes towards brands as well. [16] 

4.3 Effects of Brand Endorsements

Linking the brand to some other entity -to an existing brand, related person, event or organization - may create a new association with the brand to the entity as well as affecting existing brand associations. These effects can be positive or negative and are summarized in figure 2.

Opportunities

Threats

Use of (image) spillover-effects

Loss of control

Leverage of equity

Risk of brand equity dilution

Reduce costs of product/brand introduction

Negative feedback effects

Expand brand meaning into related categories

Lack of brand focus and clarity

Source of additional revenue

Organizational distraction

Table 1: Opportunities and threads of brand endorsements and co-branding [17] 

The main advantage of brand endorsement is that a company can easily leverage the equity of one successful brand to another through the usage of spillover-effects. "As a result greater sales can be generated from the existing target market as well as open additional opportunities with new consumers and channels." Also the cost of product introduction can be reduced "because two images are combined, accelerating potential adoption". Finally the brand meaning can be expanded into other categories and be used as a source of additional revenue. General Electric and Virgin are very successful examples of such mega umbrella brands that unify their diversified businesses under one brand to leverage brand equity in to all areas. [18] 

Figure 3: Virgin - A mega umbrella brand

But there are also multi-facetted risks of brand endorsements. A brand endorsement can result in "a loss of control that arises from becoming aligned with another brand in the minds of consumers".

Furthermore consumer expectations are likely to be high because of the direct association with one or even two successful brands. For instance, when Renault endorses Dacia, customers will probably have the same expectations on Dacia cars as on Renault cars. Renault will be perceived as a quality guarantor for Dacia in the mind of the customers. Unsatisfactory performance of Dacia could have negative repercussions for the Renault brand. [19] 

The risk of brand dilution is another pitfall of brand endorsement. If a brand is used to enter in a multitude of markets by endorsing many diverse products, there will be a risk of over exposure that would dilute the transfer of any association what would result in a lack of brand focus and clarity. The same is significant for celebrities as well as event and organizational endorsements. Britney Spears appeared in ads or promotions for Pepsi, Clairol, McDonald's, Skechers, Polaroid, Sweet16.com, Youtopia.com and Got Milk? within one single year as you can see graphic 2. This effectiveness and uniqueness as an endorser has been lost. Another pitfall is mismatching between the celebrity and the brand (e.g., patriotic US-American Oscar Winner George C. Scott as endorsee for the French Renault car). [20] 

Figure 4: Britney Spears' endorsement portfolio

4.4 Factors for successful brand endorsements

Pitfalls mentioned previously means that, brand endorsements need to be well planned keeping several aspects in mind. Based on the previously mentioned spillover and leverage effects, it has been possible to identify the criteria for success, through empirical findings.

The most important requirement is that there is a logical fit between the brands. According to the empirical findings of Esch, it is not logical to combine a luxury brand with a cheap brand. This "brand fit" is therefore a required basis for an endorsement strategy, because it guarantees the credibility of the brand combination. [21] Simonin and Ruth used a survey, what consisted of a main study (n=350) and two replication studies (n=150, n=210), to empirical back up, if there is an overall perception of fit or cohesiveness between the two brands, the alliance will be evaluated more favorably than conditions in which the brands and their associations are inconsistent or incompatible: "brand fit is related positively to attitudes toward the brand endorsement or brand alliance". [22] 

This logical fit can be extended to the product fit perceived by the consumers. The product fit describes the similarity between the products that have been sold under the name of the brand so far. According to Esch an average product fit is the ideal starting position for a brand alliance because here from a complementary endorsement of both brands works best. An extremely high or poor product fit leads however to a less positive evaluation of the brand alliance. Again Simon and Ruth support this thesis in there study by suggesting: "product fit is related positively to attitudes toward the brand endorsement or alliance". [23] 

Another factor that has impact on the success of a brand endorsement is the complementarity in respect of relevant end product properties. According to an empirical study of Park et al. brand alliances with complement features are judged more positively in the eyes of the consumers. [24] 

Figure 5: Hierarchy of successful brand endorsements

For example Fisher-Price and Compaq teamed up to introduce a set of jointly branded Wonder Tools software and computer accessories targeting kids and their parents. Reflecting the complementarity of the strategy, ads stressed: "Nobody Knows Fun Like Fisher-Price, Nobody Knows Computers Like Compaq." In this brand alliance both brands have been endorsed through each other in a very positive way because brand fit, product fit and complementarity existed. [25] 

In conclusion, it has to be said that the endorsement concept is driven by the header brand and supported by the modifier brand (e.g., "Slim-Fast chocolate cake mix by Godiva" or "Dacia, brought to you with Renault technology"). Referring to the first case Slim Fast is the modifier brand and Godiva is the header brand. Still, to create a strong brand endorsement, it is important that both brands entering the agreement have adequate brand awareness. Thus, a necessary but not sufficient condition for success is that the two brands separately have some brand equity. But when a company uses an umbrella brand to promote a new product, the new brand does not necessarily need equity (e.g., Gillette Sensor). When the product Gillette Sensor razors were introduced, the brand Sensor had no equity at first and was endorsed by the umbrella brand Gillette to provide credibility and special consumer awareness. [26] According to this, Simonin and Ruth found out that: "Brands less (more) familiar than their partners will experience stronger (weaker) spillover effects than their partners." [27] Therefore Dacia clearly enjoys the reinforcement by Renault in the western markets and not Renault by Dacia. Also Sensor enjoyed the reinforcement by its corporate brand Gillette.

The same logical fit must also be observable when using celebrity endorsements or third party endorsements. It is important to choose a well-known and well defined celebrity whose associations are relevant to the brand and likely to be transferable. [28] 

5 Ethic Aspects

Because the ethic issue has become more and more important especially in a time where sustainability and liability play important roles, we briefly would like to discuss the ethical aspects of brand endorsements.

When talking about the ethical aspects of brand endorsements, a particular question will be evoked: "Is brand endorsement by medical associations ethical?"

Medical associations all over the world (e.g., Indian Medical Association, British Heart Association, American Medical Association, British Dental Association, American Dental Association) have endorsed a number of commercial products over the years. In return the associations received large sums of money from the endorsed companies. Alone the United Kingdom's market has over 40 food products that have seals or endorsements from health charities or medical associations.

Figure 6: Seal of the "British Dental Association"

In many cases the associations had to withdraw from these endorsement contracts following public pressure. [29] E.g. "the American Medical Association (AMA) paid Sunbeam Corporation US$ 9.9 million to avoid a suit for breach of contract when the company pulled out of a five-year, multi-million-dollar endorsement deal. The AMA was to endorse Sunbeam's blood pressure monitors, humidifiers and other products, but the association withdrew from the deal after being criticized because it had no plans to test the products. The chief executive of the AMA resigned following protest over this case". [30] 

Referring to such a case, the endorsement can be seen as a deception of the consumers. The associations and also the endorsed companies had just followed their personal instinct.

These incidents can also be related to typical brand endorsement and celebrity endorsement. Companies that endorse low quality products with a high quality, recognizable brand, deceive the customers as well as famous persons who give their name for low quality or even hygienic questionable or unsecure products.

6 Conclusion

To close this chapter we briefly want to outline the core facts of brand endorsements according to the main findings of Simonin/Ruth, Leutheusser/Kohli/Suri and Esch.

At first it has to be said that brand endorsement of various types significantly affect the respective partnering brand, celebrity or organization. These spillover effects do not necessarily affect the partners equally. Brands less familiar than their partners experience stronger spillover effects than their partners. This leads to the fact that the partners do not contribute equally to the alliance. [31] 

Furthermore a brand endorsement can only be successful when keeping the factors brand fit, product fit and complementarity in mind. Another essential key factor, and maybe the most important one is, a satisfactory performance of the endorsed product in the eyes of the consumer. When the endorsed product fails not only the product itself will be experience image damage. The damaged image can also spillover to the endorser. Due to this fact an endorsement agreement has to be negotiated carefully because the endorser always gives a quality assurance to the consumer by endorsing another product. [32] 

But when keeping all these pitfalls and effects in mind, brand endorsement can be an attractive alternative to brand extensions. Existing brand equity can easily be leveraged to reinforce another brand what increases sales such as brand awareness because the customer base of the endorser is potentially available to the endorsed product. [33] But when doing so you have to keep in mind that brand endorsements of the same product category can end up in cannibalism. These leverage effects are shown in graphic 4. Overall, in times of increasing competition, the endorser endows the brand with special awareness and thus lower product or brand introduction costs and provides furthermore credibility to both: customers and retailers. [34] 

Figure 7: How brand equity can be leveraged