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selected by companies amid various industries as company marketing objectives. This was
accomplished through the use of a systematic review of relevant studies, to be discussed
later. We analyzed the efficacy and associated risk of each method in achieving identified
outcomes. We then identified resulting managerial implications of these findings.
Marketing Methods
Celebrity Endorsement
Celebrity endorsement is the act of publicly showing approval and use of a product or
service, typically in exchange for money. Ideally, the luminary endorsement influences
consumer purchase behavior through the process of identification (Dwane & Abhijit, 2001).
Approximately 25% of companies engage in endorsement deals annually to create a
connection between a celebrity and their product or service in order to build brand equity
and drive sales (Austad, 2004; Cornwell, 2011). Endorsement is particularly popular in the
athletic industry due to the desire for companies to associate their sports gear with the
fastest and strongest competitors, yet, its prevalence also spans into non-sports related
industries.
In 2009, endorsement contracts topped USD 4.2 billion for companies such as Nike and
Adidas (Carrillat, d’Astous, & Christianis, 2014). The rivalry between these athletic-gear
titans began years earlier, highlighted in 1992 with the Barcelonan Olympics. Prior to the
games, Nike targeted several players on the U.S.’s new basketball “Dream Team.” For the
first time the U.S. team included professional as well as college athletes. Despite Adidas’s
claim as official sponsor, Nike managed to employ six Olympians on the US team to endorse
their brand. Robert McGee, editor of Sporting Goods Intelligence, stated: “Basketball is the
largest portion of the athletic footwear business, and with Nike having these six Olympians
in ads, they should increase their dominance” (Kiersh, 1992). Nike sales topped USD 1 billion
for the first time in Nike history over the period from June – November 1992, directly
reflecting the promotional prowess of the Olympic Games and their successful
endorsements (Nike, 1992). Not only did their celebrity endorsers win the gold and create
hype for the Nike brand, they also managed to diminish Reebok’s presence in the event by
covertly covering up the Reebok insignia on their USA team uniforms during several photo
opportunities.
As of 2013 after 20+ years of embedding endorsement associations in the minds of the
consumer, Nike holds a 59% share of the U.S. sneaker market (Powell, 2014). (See Exhibit 1)
Nike has not only increased the size of their share, but the value as well. This can be
attributed to the establishment of customer loyalty through subsequent endorsement deals.
These deals have the potential to influence consumers in a way unknown to other types of
broader-based marketing, due to the element of human connection. The case of Michael
Jordan is one example of this successful connection. Despite his retirement, the loyalty that
former NBA player Michael Jordan has built among his fan base continues to drive sales. In
2013, the Air Jordan brand earned USD 2.25 million in sales (Badenhausen, 2014). This
customer loyalty signifies a long term benefit associated with endorsement deals, and the
increased brand enhancement that comes hand in hand with increased loyalty (see Exhibit
1). Interestingly, it has been reported that Jordan originally wanted to sign with Adidas
coming out of college, yet the German based company turned down the opportunity.
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