CASE – 2 COMPETING AGAINST DEVARAPALLI SUDARSHAN

BLING (1810069)

1. “Clearly the status quo isn’t working, and Song is right to consider a change. However,
celebrity endorsements are risky, and I would advise him to proceed very carefully”,
says Martin Ganz, the VP, Hong Kong, and Macao, of Breguet, a division of the Swatch
Group. Why celebrity endorsements are risky? Explain. If they are risky, why so many
companies use celebrities to endorse their brands? Discuss elaborately.
The main risk involved in any celebrity endorsements is the celebrity might
overshadow the product itself. The fame and recognition of celebrity is so high, people won’t
even recognise the product they are endorsing. This will result in waste of money for the
product’s company.
The next one is, the lifestyle and values of celebrity might not resonate with the
functionality and usage of the product. For example, SRK endorsing navaratna oil. Everyone
knows he is not using the product. At least if they had used upcoming but famous actor it
would have been better.
The endorser might do something bad in the public or to the society or does
something illegal or which is not ethical, then it will have direct impact and backlash for the
product he/she is endorsing. For example, when Tiger Woods infidelity came out to public
there was a huge negative effect on Nike, the company he was endorsing at that time.
Reasons for using celebrity endorsements:
1. To increase the visibility and awareness of the product among the consumers.
2. If a brand is introducing a new product, celebrity endorsement will help at least in
trying the product because they might have faith on celebrity.
3. To maintain the theme and value that the product stands for.
4. Using a famous person in a region/state/demographic, if the product is being launched
in that region/state/demographic for the first time.
5. To help in repositioning the product according to the current trends and expectations
of the consumers.
 CASE – 2 COMPETING AGAINST DEVARAPALLI SUDARSHAN
BLING (1810069)

2. Assume that everybody agrees to go with the second direction (out of the possible
two directions)—the endorsement deal with Changchang Gao. Kelman's source
attributes identify three attributes of successful marketing communications sources:
Source credibility, Source attractiveness, and Source power. With the limited
information given about Changchang in the case, analyze and evaluate these three
attributes of Changchang -- in other words, on which of these three
attributes Changchang scores high and scores low? Her influence would be through
compliance? Internalization? Or something else? Explain.
Credibility:
Assuming Changchang is a very famous person in the country and resonates with
the values and lifestyle of this luxury watch company. Even thought she is famous, as the
watches define luxury, they are probably costly. As a result, her credibility would help in at
least achieving the consumer go the shop and try. But will be difficult in converting the
customer in to consumer. Hence the credibility is medium.
Attractiveness:
As I said earlier, Changchang has high visibility among her hardcore fans and
followers. This in turn increases the visibility and attractiveness among the followers.
Assuming, the followers of Changchang are the target market of the watch company. Hence
the attractiveness is high.
Power:
Changchang has high power among her followers. So, this gives her the ability to
influence her followers in trying new clothes, accessories etc. She can directly advise her
followers to buy these watches. So, she has power regarding the impact of these watches
among consumers. Again, the assumption here is that the company’s target market resonates
with the followers of Changchang.
 CASE – 2 COMPETING AGAINST DEVARAPALLI SUDARSHAN
BLING (1810069)

3. McCracken criticized the source credibility and source attractiveness models and
proposed an alternative meaning transfer model. Apply this model to Changchang and
explain how she would possibly influence the target audience.
McCracken says that R&S company watches are meant for older consumers but not young
millennials. And Changchang is probably (it is against my assumption in 2nd question) a young
woman who got to fame by appearing in social media. So according to McCracken, there is a
mis match between the values and lifestyle of Changchang and the watch company. So
according to McCracken the possibility of influence is very less for Changchang