MANAGEMENT SLANT

  • Celebrities, ceos, and founders differ in their ability to influence perceived advertisement effectiveness in the service sector.
  • When the identity badge of ceos and founders is signaled to consumers through their title, ceos and founders are more effective endorsers than celebrities.
  • For new products, advertisements portraying founders are more effective than those portraying ceos and celebrities.
  • For existing products, ceos are perceived as better endorsers than founders and celebrities.

INTRODUCTION

Numerous chief executive officers (ceos) and founders have endorsed the brands of their respective companies, such as Dave Thomas for ¬≠Wendy’s, Lee Iacocca for Chrysler, and Frank Perdue for Perdue Farms. Empirical studies exploring the effectiveness of the ceo versus another spokesperson, however, are scant and provide mixed results (Reidenbach and Pitts, 1986). Recent scandals associated with celebrities such as Tiger Woods have resulted in the deterioration of the value of brands affiliated with such spokespersons. In contrast, ceos’ engagement with customers over social media has been found to be influential in strengthening consumer relationships with companies (Fetscherin, 2015; Men and Tsai, 2016), enhancing purchase intention (Dávila and Trendel, 2010) and loyalty toward companies (Fetscherin, 2015), and also regaining trust after a brand crisis (Oliveira and Murphy, 2009; Sohn and Lariscy, 2012).