This research examines how the announcement of a celebrity endorsement contract with a brand can influence consumers’ judgment of its future growth in a market. Using both behavioral experiments and an event study analysis, we find that when the brand is perceived to be technology-focused (versus marketing-focused), the information about the celebrity contract can lead consumers to view the brand’s future as less promising. Furthermore, we identify consumers’ inferences about the quality of the brand as a psychological factor underlying this effect. This paper provides evidence that star-marketing can sometimes signal management’s misjudgment about resource allocation for a brand, which unduly invests in celebrity marketing at the expense of quality improvement for the product.
Jang, Hojoon and Lee, Kyoungmi
"The Dark Side of Star Marketing,"
Asia Marketing Journal: Vol. 20
, Article 4.
Available at: https://amj.kma.re.kr/journal/vol20/iss3/4