1 A RESEARCH REPORT ON “A Study on the Effect of Celebrity Endorsement on customer buying behavior with special reference to Lenovo Laptop” Submitted in partial fulfillment for the award of degree MASTER OF BUSSINESS ADMINISTRATION Chhattisgarh Swami Vivekananda Technical University Bhilai (C.G) India Approved by- Guided By- Dr. Souren Sarkar Mr. Rishi Tripathi Head of the Department Assistant Professor SHRI SHANKARACHARYA GROUP OF INSTITUTIONS Faculty of Management Studies Approved by AICTE (Managed by ShriGangajali Education Society, Bhilai) JUNWANI, BHILAI – 490020 (C.G.) INDIA
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1
A
RESEARCH REPORT
ON
“A Study on the Effect of Celebrity Endorsement on
customer buying behavior with special reference to Lenovo
Laptop”
Submitted in partial fulfillment for the award of degree
MASTER OF BUSSINESS ADMINISTRATION
Chhattisgarh Swami Vivekananda Technical University Bhilai (C.G) India
Approved by- Guided By-
Dr. Souren Sarkar Mr. Rishi Tripathi
Head of the Department Assistant Professor
SHRI SHANKARACHARYA GROUP OF INSTITUTIONS
Faculty of Management Studies Approved by AICTE
(Managed by ShriGangajali Education Society, Bhilai)
JUNWANI, BHILAI – 490020 (C.G.) INDIA
2
TABLE OF CONTENTS
i. DECLARATION 2
ii. CERTIFICATE 3
iii. ACKNOWLEDGEMENT 4
iv. TABLE OF CONTENTS 5
1. INTRODUCTION 6-8
2. COMPANY PROFILE 9-11
3. LITERATURE REVIEW 12-22
4. RESEARCH METHODOLOGY 23-26
5. DATA ANALYSIS AND RESULTS 27-32
6. FINDINGS 33-34
7. RECOMMENDATIONS 35-36
8. LIMITATIONS 37-38
9. CONCLUSION 39-40
vi. REFERENCES 41-42
3
CHAPTER- 1
INTRODUCTION
4
INTRODUCTION
Everyday consumers are exposed to thousands of voices and images in magazines,
newspapers, and on billboards, websites, radio and television. Every brand attempts to steal at
least a fraction of a person’s time to inform him or her of the amazing and different attributes of
the product at hand. The challenge of the marketer is to find a hook that will hold the subject’s
attention. In helping to achieve this, use of celebrity endorsers is a widely used marketing
strategy. In this modern age, people tend to ignore all commercials and advertisements while
flipping through the magazines and newspapers or viewing TV. But even then, the glamour of a
celebrity seldom goes unnoticed.
Thus, Celebrity Endorsement in advertisement and its impact on the overall brand is of
great significance. In this process, the companies hire celebrities from a particular field to feature
in its advertisement campaigns. The promotional features and images of the product are matched
with the celebrity image, which tends to persuade a consumer to fix up his choice from a variety
of brands. Although this sounds pretty simple, but the design of such campaigns and the
subsequent success in achieving the desired result calls for an in-depth understanding of the
product, the brand objective, choice of a celebrity, associating the celebrity with the brand, and a
framework for measuring the effectiveness. Companies invest large sums of money to align their
brands and themselves with endorsers. Such endorsers are seen as dynamic with both attractive
and likeable qualities and companies plan that these qualities are transferred to products via
Marcum activities. Furthermore, because of their fame, celebrities serve not only to create and
maintain attention but also to achieve high recall rates for Marcum messages in today’s highly
cluttered environments. Similarly every product has an image. The consumer tries to consume a
brand which has the maximum fit with his/her own personality/image. The celebrity endorser fits
in between these two interactions, where he tries to bring the image of the product closer to the
expectation of the consumer, by transferring some of the cultural meanings residing in his image
to the product. Indian advertising started with the hawkers who used to call out their wares right
from the days when cities and markets first began. With this evolved a strategy that tried to
benefit from the emotional attachment of the admirers or the fans of the celebrities; in the form
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of celebrity endorsement. In the report, I have focused on the impact of Celebrity
Endorsement on on customer buying behavior with special reference to Lenovo Laptop
“Brand” is the most valuable asset of any firm. The general belief among advertisers is that
brand communication messages delivered by celebrities and famous personalities generate a
higher appeal, attention and recall than those executed by non-celebrities. The quick message-
reach and impact are all too essential in today’s highly competitive environment. A brand should
be cautious when employing celebrities to ensure promise, believability and delivery of the
intended effect. As the celebrities traverse from a mere commercial presence to public welfare
message endorsements, a whole new dimension is added to this process and helps us in achieving
a holistic view of the impact which celebrities generate in every sphere and segment through
their well-versed endorsements. Celebrities have also been in demand having succeeded in being
effective by rising above the clutter & grabbing the attention and focus of the consumer. They
also succeed in creating an aspiration in the minds of the consumer to acquire what their favorite
celebrity endorses.
6
CHAPTER - 2
COMPANY
PROFILE
7
Lenovo markets its products directly to consumers, small to medium size businesses,
and large enterprises, as well as through online sales, company-owned stores (in China only),
chain retailers, and major technology distributors and vendors.
Lenovo Group Ltd. is a Chinese multinational technology company with headquarters in Beijing,
China, and Morrisville, North Carolina, United States. It designs, develops, manufactures and
sells personal computers, tablet computers, smartphones, workstations, servers, electronic
storage devices, IT management software and smart televisions. In the second quarter of 2013
Lenovo was the world's largest personal computer vendor by unit sales. It markets the ThinkPad
line of notebook computers and the ThinkCentre line of desktops.
Lenovo has operations in more than 60 countries and sells its products in around 160 countries.
Lenovo's principal facilities are in Beijing, Morrisville and Singapore, with research centers in
those locations, as well as Shanghai, Shenzhen, Xiamen, and Chengdu in China, and Yamato in
Kanagawa Prefecture, Japan. It operates a joint venture with EMC, LenovoEMC, which sells
network-attached storage solutions. It also has a joint venture with NEC, Lenovo NEC Holdings,
which produces personal computers for the Japanese market.
Lenovo was founded in Beijing in 1984 as Legend and was incorporated in Hong Kong in 1988.
Lenovo acquired IBM's personal computer business in 2005 and agreed to acquire its Intel-
based server business in 2014. Lenovo entered the smartphone market in 2012 and as of 2014
is the largest vendor of smartphones in Mainland China. In January 2014, Lenovo agreed to
acquire the mobile phone handset maker Motorola Mobility from Google.
Lenovo is listed on the Hong Kong Stock Exchange and is a constituent of the Hang Seng China-
Affiliated Corporations Index, often referred to as "Red Chips".
In 2009, Lenovo was the fourth largest vendor of personal computers in the world The
Company is the largest seller of PCs in China, with a 28.6% share of the China market, according
to research firm IDC in July, 2009. It reported annual sales of $14.9 billion for the fiscal year
ending 2008/2009.
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In India :
Lenovo has gained significant market share in India through bulk orders to large companies and
government agencies. For example, the government of Tamil Nadu ordered a million laptops
from Lenovo in 2012 and single-handedly made the firm a market leader. Lenovo distributes
most of the personal computers it sells in India through five national distributors such as Ingram
Micro and Redington
Given that most smartphones and tablets are sold to individuals Lenovo is pursuing a different
strategy making use of many small state-centric distributors. Amar Babu, Lenovo's managing
director for India, said, "To reach out to small towns and the hinterland, we have tied up with
40 regional distributors. We want our regional distributors to be exclusive to us. We will, in
turn, ensure they have exclusive rights to distribute Lenovo products in their catchment area."
As of 2013, Lenovo had about 6,000 retailers selling smartphones and tablets in India. In
February 2013, Lenovo established a relationship with Reliance Communications to sell
smartphones. The smartphones carried by Reliance have dual-SIM capability and support both
GSM and CDMA. Babu claims that the relative under-penetration of smartphones in India
represents an opportunity for Lenovo.
Lenovo has assembled a team of senior managers familiar with the Indian market, launched
mobile phones at all price points there, and worked on branding and marketing in order to
build market share. As of February 2014, Lenovo claims that its sales of smartphones in India
have been increasing 100% per quarter while the market is only growing 15-20% over the same
period. Lenovo did marketing tests of its smartphones in November 2012 in Gujarat and some
southern cities, where Lenovo already had a strong presence. Lenovo's strategy has been create
awareness, maintain a broad selection of phones at all price points, and developing distribution
networks. Lenovo partnered with two national distributors and over 100 local distributors. As of
February 2014, more than 7,000 retail outlets in India sold Lenovo smartphones. Lenovo has
also partnered with HCL in order to setup 250 service centres in 110 cities
In India, where Lenovo is relatively unknown, Lenovo grants distributors exclusive territories,
but allows them to sell computers from other companies. Lenovo uses its close relationships
with distributors to gain market intelligence and speed up product development.