CASE ASSIGNMENT - Livestrong (Chapter 12) Livestrong is currently one of the mos

Question

CASE ASSIGNMENT - Livestrong (Chapter 12)
Livestrong is currently one of the most visible and active charities in the world. It is consistently praised as resoundingly efficient and accountable; Charity Navigator recently gave Livestrong a rating of four stars (its highest) and a score of 64 out of 70 for its financial responsibility and its transparency. However, all is not well at Livestrong. For years, cyclist and cancer survivor Lance Armstrong has been the face of Livestrong—a living symbol of the organization’s commitment to empowering cancer patients to live to the fullest. Hundreds and thousands of individuals have given to Livestrong or bought a yellow wristband because they were inspired by Armstrong’s bravery in overcoming cancer and reaching the pinnacle of sporting success.
However, Armstrong is now a tainted symbol. After a thorough investigation, the United States Anti Doping Agency presented a mountain of evidence showing that Armstrong not only used performance-enhancing drugs during his career, but that he was in charge of a systematic doping program that pressured teammates to use drugs as well. Based on this evidence (and later confirmed by Armstrong’s own admission), the USADA banned Armstrong from competing in any of its events, and the International Cycling Union stripped him of all seven of his Tour de France titles. Lance Armstrong was now no longer a symbol of triumph or perseverance; in most eyes, he was simply a cheater who got caught.
In the midst of this professional disgrace, Armstrong decided that he would step down as chairman of Livestrong. Though he would continue to be a member of Livestrong’s board, he would no longer have a role as its public face as he did for the past 15 years. This is, of course, was a huge blow to the organization, which lost its founder—and its best fundraiser.
QUESTIONS
If celebrity endorsements cost companies so much money, why do companies risk so much of that money on celebrities who might eventually suffer some major downfall?
As with celebrity pro golfer Tiger Woods who publicly “fell from grace” and now has multi-million dollar product endorsement deals, should Lance Armstrong also be offered future endorsement deals as well in your opinion? CASE ASSIGNMENT - Livestrong (Chapter 12)
Livestrong is currently one of the most visible and active charities in the world. It is consistently praised as resoundingly efficient and accountable; Charity Navigator recently gave Livestrong a rating of four stars (its highest) and a score of 64 out of 70 for its financial responsibility and its transparency. However, all is not well at Livestrong. For years, cyclist and cancer survivor Lance Armstrong has been the face of Livestrong—a living symbol of the organization’s commitment to empowering cancer patients to live to the fullest. Hundreds and thousands of individuals have given to Livestrong or bought a yellow wristband because they were inspired by Armstrong’s bravery in overcoming cancer and reaching the pinnacle of sporting success.
However, Armstrong is now a tainted symbol. After a thorough investigation, the United States Anti Doping Agency presented a mountain of evidence showing that Armstrong not only used performance-enhancing drugs during his career, but that he was in charge of a systematic doping program that pressured teammates to use drugs as well. Based on this evidence (and later confirmed by Armstrong’s own admission), the USADA banned Armstrong from competing in any of its events, and the International Cycling Union stripped him of all seven of his Tour de France titles. Lance Armstrong was now no longer a symbol of triumph or perseverance; in most eyes, he was simply a cheater who got caught.
In the midst of this professional disgrace, Armstrong decided that he would step down as chairman of Livestrong. Though he would continue to be a member of Livestrong’s board, he would no longer have a role as its public face as he did for the past 15 years. This is, of course, was a huge blow to the organization, which lost its founder—and its best fundraiser.
QUESTIONS
If celebrity endorsements cost companies so much money, why do companies risk so much of that money on celebrities who might eventually suffer some major downfall?
As with celebrity pro golfer Tiger Woods who publicly “fell from grace” and now has multi-million dollar product endorsement deals, should Lance Armstrong also be offered future endorsement deals as well in your opinion? CASE ASSIGNMENT - Livestrong (Chapter 12)
Livestrong is currently one of the most visible and active charities in the world. It is consistently praised as resoundingly efficient and accountable; Charity Navigator recently gave Livestrong a rating of four stars (its highest) and a score of 64 out of 70 for its financial responsibility and its transparency. However, all is not well at Livestrong. For years, cyclist and cancer survivor Lance Armstrong has been the face of Livestrong—a living symbol of the organization’s commitment to empowering cancer patients to live to the fullest. Hundreds and thousands of individuals have given to Livestrong or bought a yellow wristband because they were inspired by Armstrong’s bravery in overcoming cancer and reaching the pinnacle of sporting success.
However, Armstrong is now a tainted symbol. After a thorough investigation, the United States Anti Doping Agency presented a mountain of evidence showing that Armstrong not only used performance-enhancing drugs during his career, but that he was in charge of a systematic doping program that pressured teammates to use drugs as well. Based on this evidence (and later confirmed by Armstrong’s own admission), the USADA banned Armstrong from competing in any of its events, and the International Cycling Union stripped him of all seven of his Tour de France titles. Lance Armstrong was now no longer a symbol of triumph or perseverance; in most eyes, he was simply a cheater who got caught.
In the midst of this professional disgrace, Armstrong decided that he would step down as chairman of Livestrong. Though he would continue to be a member of Livestrong’s board, he would no longer have a role as its public face as he did for the past 15 years. This is, of course, was a huge blow to the organization, which lost its founder—and its best fundraiser.
QUESTIONS
If celebrity endorsements cost companies so much money, why do companies risk so much of that money on celebrities who might eventually suffer some major downfall?
As with celebrity pro golfer Tiger Woods who publicly “fell from grace” and now has multi-million dollar product endorsement deals, should Lance Armstrong also be offered future endorsement deals as well in your opinion?

Explanation / Answer

Celebrity endorsements definitely has its huge advantages 1.It converts the huge fan-base of the celebrities, turn to the product , which their hero/heroine endorse . Consequently, the sale of the product peaks atleast some further time ,in future,within which the company can recoup major costs involved . 2..Boosts the image & credibility of the product as the buyers trust that the celebrity will not mislead them by advertising a product which will lower down their imagealso, in case of any false mame-overs & claims 3.One-celebrity,one-product norm makes the product stand-out & reach millions in no time ,without much effort. But all the above, come with heavy baggage: 1. First & foremost it is highly expensive--so the company has to weigh the costs & benefits (in the form of increased sales) and see if they can afford or if it's worth all these dollars. 2.There is the possibility that the image of the celebrity may overshadow the product itself --that the celebrity's image occupies more centre-stage in the minds of the people than the product intended for advertisement. 3..Also the fact that the entire ad-show depends on the character & conduct in the personal as well as professional life of that particular celebrity.Any sort of malignmemt to the afore-said, affects the product's prospects also. In light of the above pros & cons to the idea of celebrity endorsements 1.The companies concerned, should involve celebrities , as far as possible, those with near-clean, personal & professional records , so that the company's contract is not jeopardised in any manner , at any stage during the pendency of the agreement. 2..Adequate care should be taken to endorse the product with the help of the right person, as it is ultimately,the shareholders'money ,goodwill & stake involved . 3.. Also it is not advisable to continue with a celebrity whose image has become questionable after certain confirmed charges --as that may give rise to unnecessary & unwanted rumours & that in itself might push the customers to the competitors' products. 4..So, there should be some clause inserted in the agreement itself ,that allows for rescinding the contract , in the event of any untoward incident, that is capable of pushing down the image of the celebrity, happens mid-way. In conclusion,it follows that celebrity endorsements should be done with much care and diligence ,not only for the huge amount of money involved in the decision,but also for the goodwill and stake of the company as a whole.

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