Tiger Woods' endorsement deals were terminated by a host of sponsors, including Accenture, Gillette, AT&T, and General Motors. What are the reasons for these companies dropping Woods from their promotional efforts?

What will be an ideal response?

Celebrities are likely to be effective when they are credible or personify a key product attribute. Tiger Woods' personal problems have resulted in the erosion of his credibility as a product's spokesperson. The three most important sources of a spokesperson's credibility are expertise, trustworthiness, and likability. Following revelations about his personal life and his past indiscretions, his trustworthiness (how objective and honest the source is perceived to be) was negatively affected and also his likability (the source's attractiveness). The most highly credible source would score high on all three dimensions—expertise, trustworthiness, and likability. Scoring high on only one or two dimensions would still negatively affect his credibility. Also, the principle of congruity implies that communicators can use their good image to reduce some negative feelings toward a brand but in the process might lose some esteem with the audience. The converse also holds true, i.e. a product's positive brand image is likely to be hit by virtue of being associated with a communicator with a negative image.

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A recommended way of using anger to your advantage while negotiating is to

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An American manufacturer with its corporate headquarters in New York City is purchasing goods

from a French supplier. Which of the following statements is true regarding the exchange rate risk for this contract? A) The American company will bear all of the exchange rate risk if the contract is denominated in dollars. B) The French company will bear all of the exchange rate risk if the contract is denominated in dollars. C) Both companies could bear exchange rate risk if the contract is denominated in British pounds. D) Both B and C are correct.

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