I began with this advertisement:
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I cropped out and enlarged the beach scene. Then I ran a Gaussian filter over it to smooth out the "jaggies" produced by enlarging the picture:
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I filtered the mask with a Gaussian filter to eliminate jaggies and placed it with the picture of the coffee cup:
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I positioned the coffee cup and then masked out the space within the coffee cup handle. The mask was created by saving a contour of the inside of the cup handle, inverting the mask with a filter, and then applying a Gaussian filter:
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I added the ship:
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The result was:
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I scaled the ship down and added the lip of the cup using the mask below to look as if the ship were sitting in the coffee cup:
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The result was:
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