Question

Why do you think demand for a product will often increase if the product is endorsed by a celebrity.And also consider the other side of the question related to the firm.

Many celebrities are paid to endorse products, but celebrity endorsements do come with risks. Once a firm is associated with a celebrity, consumers associate the product with the celebrity. This association can turn negative if the celebrity gets arrested or becomes associated with an embarrassing scandal. Should a company whose celebrity endorser was just arrested be guided by the amount already poured into making featuring the celebrity in its decision about whether or not to cancel the ad campaign?

Answer 1

Raised brand awareness. Yes

Step-by-step explanation:

Using a celebrity for marketing of a product could increase product's demand due to notable consumer saying "if its good enough for him/her its good enough for me". Addition of a celebrity in a campaign especially for new company may add instant credibility to that company's product. This is a way of building and raising brand awareness, but is also a way of positioning the brand or attracting new users. If a celebrity becomes involved in a negative publicity, those companies that don't act, only loose, while those that engage in a situation benefit and come out stronger. Depending on the type of scandal, most companies today look with higher worry at events like this. Moral clauses for this type of things tend to be higher, therefore a company should look at its investment in terms of cost in new celebrity ad.