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. Economists refer to an increase in sales due to celebrity endorsements as being the result of

network externalities.

the endowment effect.

social influence.

the ultimatum game.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. Economists refer to an increase in sales due to celebrity endorsements as being the result of

network externalities.

the endowment effect.

social influence.

the ultimatum game.