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Article Summary The Use of Celebrity Endorsements Can Be a Good Way

question 224

Multiple Choice

Article Summary
The use of celebrity endorsements can be a good way to promote a brand, as long as the brand fits the celebrity. The article discusses three reasons why a company should use celebrity endorsements:
1. Celebrities have a large range of followers, giving them the ability to build brand equity which created product differentiation to consumers.
2. Companies can reach a global audience since celebrities have worldwide fan bases, and an endorsement can link the product to a celebrity's skills, making fans feel closer to and more like the celebrity.
3. Celebrity endorsements increase consumers' awareness of a product, since consumers are more likely to remember an ad linked to a celebrity.
However, not all celebrities are the right fit for all products. Endorsements can backfire if the celebrities are promoting something they would never use, giving the impression of nothing more than a sponsored advertisement.
Source: Erika Warne, "Why Brands Should Use Celebrity Endorsements," weareanthology.com, April 20, 2017.
-Refer to the Article Summary.One explanation for the increase in product sales because of celebrity endorsements is that people seem to receive ________ from goods they believe are popular.

Grasp fundamental financial ratios and their applications in financial analysis (e.g., debt-to-equity ratio, current ratio).

Recognize the factors influencing a private company's decision to report under IFRS in Canada.

Distinguish between the financial reporting choices available to private enterprises in Canada.

Understand the assumptions underlying accounting principles such as the Historical Cost Principle.

Definitions:

Income Statement

A report detailing a business's income and expenditures throughout a given time frame, which ultimately reveals a profit or deficit.

Sales

The exchange of goods or services for money, representing revenue for a company.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Functional Currency

The main currency used by a business or unit within a business to conduct its day-to-day transactions.