“CELEBRITY ENDORSEMENT AFFECTING CONSUMER’S ATTITUDE TOWARD THE ADVERTISEMENT AND PURCHASE INTENTION” DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MARSTER IN BUSINESS ADMINISTRATION SUBMITTED BY BHANU PRATAP SINGH (107/MBA/105054) UNDER THE SUPERVISION OF DR. Srabanti Mukherjee DEPARTMENT OF MBA DAY Indian Institute of Social Welfare and Business Management "Management House” CONTENTS [Bhanu Pratap Singh - IISWBM] Page 1
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“CELEBRITY ENDORSEMENT AFFECTING CONSUMER’S ATTITUDE TOWARD THE
ADVERTISEMENT AND PURCHASE INTENTION”
DISSERTATION
SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF
MARSTER IN
BUSINESS ADMINISTRATION
SUBMITTED BY
BHANU PRATAP SINGH
(107/MBA/105054)
UNDER THE SUPERVISION OF
DR. Srabanti Mukherjee
DEPARTMENT OF MBA DAY
Indian Institute of Social Welfare and Business Management
"Management House”
CONTENTS
[Bhanu Pratap Singh - IISWBM] Page 1
Certificate
Acknowledgement
Preface
CHAPTER ONE: INTRODUCTION
1.1 Consumer Behavior
1.2 Buying Behavior
1.3 Decision Process
1.4 Advertising
1.5 Celebrity Endorsement
1.6 Successful Endorsements/ Endorsers
1.7 Forms of Celebrity Endorsements
1.8 Perspectives to Endorsement
1.9 Risks Involved in Celebrity Endorsement
1.10 Methods to Reduce Risk in Celebrity Endorsement
CHAPTER TWO: LITERATURE REVIEW
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Need of the study
3.2 Objectives of the study
3.3 Research Methodology
3.4 Managerial Implications
3.5 Limitations
CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATION
CHAPTER FIVE: CONCLUSION
Bibliography
Annexure
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Chapter One
INTRODUCTION
A challenge faced by companies is how to influence the purchasing behavior of consumers
through celebrity endorsement. For more than fifty years the advertising industry
has been using celebrity endorsement, Marilyn Monroe and Marlène
Dietrich are famous examples (Iddiols, 2002). Research has shown that
the use of celebrities in advertisements can have a positive influence on
the credibility, message recall, memory and likeability of the
advertisements and finally on purchase intentions (Menon, 2001;
Pornpitakpan, 2003; Pringle and Binet, 2005; Roy, 2006). Today – no
doubt inspired by the declining effectiveness of the different marketing
communications (Blondé and Roozen, 2006) - the advertising industry is
willing to pay the increasing rewards the celebrities are asking (the costs
of the spot with Nicole Kidman for Channel V amount to 7.5 million Euro;
David Beckham for Adidas $160 million; Gilette $68 million and Pepsi
$25.5 million; Tiger Woods for Nike’s golf advertisements $18 million).
The crescendo of celebrities endorsing brands has been steadily increasing over the past
years. Marketers overtly acknowledge the power of celebrities in influencing consumer-
purchasing decisions. It is a ubiquitously accepted fact that celebrity endorsement can bestow
special attributes upon a product that it may have lacked otherwise. But everything is not
hunky-dory; celebrities are after all mere mortals made of flesh and blood like us. If a
celebrity can aggrandize the merits of a brand, he or she can also exacerbate the image of a
brand.
“Any brand can get a celebrity. That is easy. But getting a celebrity matching with the right
brand, to the right degree, at the right time, for the right purpose and in the right way... that is
not easy.”
“The health of a brand can definitely be improved up to some extent by celebrity
endorsement. But one has to remember that endorsing a celebrity is a means to an end and not
an end in itself.”
1.1 CONSUMER BEHAVIOR
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It can be defined as the process and activities people engage in when searching for, selecting,
purchasing, using, evaluating and disposing of product and services so as to satisfy their
needs and desires. Company's success in influencing purchase behavior depends in large part
on how well they understand consumer behavior. Companies need to know the specific need
customers are attempting to satisfy and how they translate into purchase criteria. They need
to understand how customers make purchase decision.
1.2 BUYING BEHAVIOR
Consumer decision-making varies with the type of buying decision they make. Companies
need to understand how customers make purchase decisions. The decision to buy toothpaste,
a tennis racquet, a personal computer and a new car are al]-different. Complex and big-ticket
item products are likely to take more time as compared to impulse product. Consumer buying
behavior depends upon the degree of differences along the brands.
1. Complex Buying Behavior:
Consumers engage in complex buying behavior when they are highly involved in purchase
and are aware of significant differences among brands. This is usually the case when the
product is expensive, bought in frequently, risky and highly self-expressive. Typically the
consumer does not know much about the product category and has much to learn. For
example person buying a personal computer knows what attributes he is looking for.
Consumer buying behavior involves a three-step process. First, the buyer develops beliefs
about the product. Second, he/she develops attitudes about the product. Third, he/she makes a
thoughtful purchase choice.
2. Dissonance: Reducing Buyer Behavior:
Sometimes the consumer is highly involved in a purchase but sees little difference in the
brands. The high involvement is based on the facet that the purchase is expensive, infrequent
and risky. In this case the buyer will shop around to learn what is available but fail quickly,
perhaps responding primarily to good price or to purchase convenience. For example carpet
buying is a high-involvement decision because carpeting is expensive and self-expressive yet
the buyer may consider most carpet in a given price range to be the same. After the purchase,
the consumer might experience dissonance that stems from noticing certain dissatisfying
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features of the carpet or hearing favorable thing about other carpets. The consumer will be
alert to information that justifies his/her decision.
3. Habitual Buying Behavior:
Many products are bought under conditions of low consumer involvement and in the absence
of significant brand differences. Consider salt, consumer has little involvement in this product
category. They go to the store and reach for the brand. If they keep reaching for the same
brand it is out of habit not out of strong brand loyalty. There is good evidence that consumers
have low involvement with most low cost, frequently purchased products. With low
involvement products, consumer behavior does not pass through the normal belief, attitude
and behavior sequence. Consumers do not search extensively about the brands.
4. Variety -Seeking Buying Behavior:
Some buying situations are characterized by low consumer involvement but significant brand
differences. The consumers often do a lot of brand switching. Think about cookies,
consumers have some beliefs about cookies; they choose a brand of cookies without much
evaluation, while the evaluation about the product is made during consumption. Next time the
consumer may reach for another brand out of boredom or for a different taste. Brand
switching occurs for the sake of variety rather than out of dissatisfaction.
1.3 DECISION PROCESS
Smart companies always research the buying decision involved in the product category. They
ask the consumers their consumers that how they make their brand choices and how satisfied
they are at purchase. The consumer passes through five stages as following:
• Problem Recognition.
• Information Search.
• Evaluation Alternative.
• Purchase Decision.
• Post Purchase Behavior.
Clearly the buying process starts long before the actual purchase and has consequences
afterwards. The model implies that consumer passes sequentially through five stages in
buying a product. But this is not the case, especially with low involvement purchase.
Consumer may skip or reverse some stages. Thus women buying her regular brand of
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toothpaste go directly from the need for toothpaste to the purchase decision, skipping
information search and evaluation. But a consumer interested in buying laptop will pass
through all the stages stated above.
1.4 ADVERTISING
Half the money I spend on advertising is wasted; the trouble is, I don't know which half" -
John Wanamaker. father of modern advertising.
Advertising is an important social phenomenon which both stimulates consumption and
economic activity and models lifestyles and a- certain value orientation. Consumers are
confronted with substantial daily ‘doses of advertising’ in multimedia. Every one seems to
hold an opinion about various aspects of advertising ranging from amusement and admiration
to cynism and condemnation. On one hand advertising is appreciated enough to be the subject
of TV talk shows and comedy skits, to have reels of award winning commercial play in
theatres to have its art and slogans to worn proudly on clothing and to hear advertising
phrases become the idiom of everyday speech. On the other hand, consumers fear covert
manipulation and subliminal techniques and often complain about advertising clutter,
banality, sexism, predation of children and continuing proliferation into newer media and
venues.
Advertising is defined according to Kotler as:"any paid form of non-personal presentation
and promotion of ideas, goods or services by an identified sponsor". The paid aspect of the
definition means that space -or tome for an advertising message must be bought, while the
non-personal aspect means that advertising involves mass media such as TV, radio,
magazines, newspapers and billboards that can transmit a message to a large number of
individuals often at the same time. Advertising is the best-known form of promotion because
it can be a very cost-effective method of communicating with large audiences and it can be
used to create brand images, enabling the seller to repeat a message many times. Also it is
quite pervasive (Belch and Belch, 2001).
Advertising plays a critical role in capitalist economies in creating demand for industrial
output. Thus, advertising clients are predominantly profit-seeking corporations. In 1997, in
the U.S. alone, over $175 billion USD was spent on advertising. Non-profits are not typical
advertising clients, and rely upon free channels, such as public service announcements. While
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advertising can be seen as necessary for economic growth, it is not without social costs.
Unsolicited Commercial Email and other forms of spam have become so prevalent as to have
become a major nuisance of users of these services, as well as being a financial burden on
internet service providers. Advertising is increasingly invading public spaces, such as
schools, which some critics argue is a form of child exploitation. One scholar has argued that
advertising is a toxic by-product of industrial society which may bring about the end of life
on earth.
Main features of advertising are:
• It can be very cost -effective method for communicating with large audience.
• Advertising can be used to create brand image and symbolic appeals for a company or
a brand, a very important capability for companies selling products and services that
are difficult to differentiate on functional attributes.
• Advertising is ability to strike a responsive chord with the consumer when
differentiation across other elements of marketing mix is difficult to achieve. The
nature and purpose of advertising differ from one industry to another and/or across
situations. The targets of organisations advertising efforts often vary, as do
advertising's role and function in the marketing program. One advertiser may seek to
generate immediate response or action from the customer; another may want to
develop awareness or a positive image for its product or services over a period of
time.
1.4.1 Advertising Objectives
Advertising objectives can be classified according to whether their aim is to inform, persuade
or remind. These advertising objectives are of three types:
l. Informative Advertising:
This type of advertising is basically in the pioneering stages of the product category. Its
objective is to build primary demand. For example, the yoghurt industry initially had to
confirm consumers of yoghurt's nutritional benefits. E.g. telling the market about a new
product or suggesting new uses for a product.
2. Persuasive Advertising:
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This type of advertising is used in the competitive stage. Here the objective is to build
selective demand of a particular brand. For example, Chivas Regal attempts to persuade its
customers that it provides better taste and status than other brands of scotch whiskey. E.g.
telling the market about a new product or suggesting new uses for a product.
3. Reminder Advertising:
This type of advertising is important for mature products i.e. the products that have an
established market already. The objective of advertising here is to remind people to purchase
a particular brand. For example, expensive four colour ads of Coca Cola in magazines are
intended to remind people to purchase Coca Cola,
Another example: reminding customers of the product should it be needed in the near future.
Volkswagen often reminds consumers of the reliability of their product. Now the 5M's of
advertising are:
• Mission- What is the advertising objective?
• Money-How much amount could be spent?
• Message-What message would it convey?
• Media-What media should be used?
• Measurement-How are the results going to be evaluated?
1.4.2 Advertising and Consumer Behavior
Through researches various models have come up that describe the various facts of consumer
behavior. These models suggest how the consumers behave in response to a particular
marketing communication and why do they behave so. The market researchers tried to
understand the response process and the manner in which these communications work
(especially advertising). There are three critical intermediate effects between advertising and
the desired effect of advertising (purchases) these include cognition, the thinking dimensions
of a person's response: affect the feeling dimension; and experience which is a feedback
dimension based on the outcomes of product purchasing and usage. They conclude that
individual responses to advertising are mediated by factors such as motivation and ability to
process information, which can radically alter the individual's response to advertising. It is
suggested that the effects of advertising should be evaluated using these dimensions, with
some intermediate variables more important than other depending factors such as product
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category, stage of the product life cycle, target audience, competition and the impact on other
marketing-mix components.
1.4.3 Application of the reference group concept
Some advertisers to communicate with their markets use Reference group appeals very
effectively. People or group situations with a target audience are used to promote goods and
services by subtly inducing the prospective consumer to identify with the pictured user of the
product or service. This identification may be based on admiration (an athlete), on aspiration
(a celebrity or way of life), on empathy (with a person or a situation), or on recognition (a
person real or stereotypical or of a situation). Five major types of reference group appeals are:
• Celebrity Appeals.
• Expert Appeals.
• Common Man Appeals.
• Executive Appeals.
• Trade or Spokes-character Appeals.
These appeals as well as less frequently employed appeals are often pperationalized in the
form of testimonials or endorsements. In the case of common man they may be presented as
slice-of-life commercials.
Celebrities particularly movie stars, TV personalities, popular entertainers, sports icons
provide a very common type of reference group appeal. Reference group appeals to the loyal
followers and too much of the general public, celebrities represent an idealization of life that
most people imagine they would love to live. Advertisers spend enormous sums of money to
have celebrities promote their products, with the expectation that the reading or viewing
audience will react positively to the celebrities association with the product.
Those advertisements featuring celebrities are rated more positively. This is especially true
among teenagers, who are more likely to project the celebrities' credibility to the advertising
message and the endorsed product.
1.5 CELEBRITY ENDORSEMENT
Celebrity endorsements pull in hundreds of crores every year, and are widely preferred by
companies to promote their products. Using celebrities for endorsing brands has become a
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trend for building the brands as well as the company's image. Who are these celebrities? And
what does celebrity endorsement mean? A celebrity is a person who is well recognized by the
public, and has a reputation for his/her expertise in his/her chosen silos. Sports persons and
film stars fit the bill perfectly. Promotion of a company's products through these celebrities is
termed as celebrity endorsement. The company makes use of the celebrity's characteristics
and qualities to establish an analogy with the products specialties with an aim to position
them in the minds of the target consumers. Celebrity endorsement, thus, is one of the
powerful tools adopted by companies/companies to consolidate their brand(s) in the crowded
marketplace. Consumers prefer to own a brand that has a good reputation, and when someone
like a famous film star or a sport star is associated with that particular brand, it is obvious that
the consumers will get attracted to it, because the consumer wants to maintain some status,
and feels that using a brand promoted by a star can satisfy that longing.
Celebrity Endorsement in India
Phase 1: The Pioneering Phase (1950-1980)
This phase was characterized by: -1. Limited channels of communication2. Demand exceeded supply3. Heavy regulation and governmental regulationssome bigger companies from their global experience introduced the concept of celebrity endorsement. HLL has used Hindi film stars to endorse their beauty soap Lux since the fifties.
Phase 2: The Growth Phase (1980-1990)
The introduction of television added a variable effective medium of communication. Indian stars going global with events like Asiads and World Cup victory. Vimal, Thums-Up, Gwalior and Dinesh are some of the other brands that used star-appeal in the early days of mass advertising. There was a spurt of advertising, featuring stars like Tabassum (Prestige Pressure-cooker), Jalal Agha (Pan Parag Pan-masaala), Kapil Dev (Palmolive Shaving Cream) and Sunil Gavaskar (Dinesh Suitings).
Phase 3: Globalisation
In highly competitive markets, the following realities about brand management exist: -1. Product differentiating factors are duplicable and imitable. 2. All long existing and successful brands imbue their products with a meaning.
1.5.1 Why Celebrities?
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There is a myth that celebrity endorsement is used to give a brand advantage over its
competitors. However, choosing a celebrity for this purpose requires considerable amount of
calculations. There should be something common between the brand and the celebrity
promoting it. Let us come to the main question as to why companies use celebrities to
promote their brands. Is there a real need to associate a celebrity with the product? Yes seems
to be the resounding answer. This is because a company needs to create awareness and
interest in the consumers mind when it unveils a new brand or product. To be successful,
brands need to convince consumers that they carry a different image and value from other
competing products. In other words, brands have to show their true personality to the
potential consumer(s).
An effective way to do this is through celebrity endorsements. As MG Parmeswaran,
executive director of FCB Ulka says, "As advertising professionals, we recommend celebrity
endorsements when the case is justified. There are many cases where you need to use the
celebrity to break out of a category clutter. At times, celebrity endorsement is used to build
credibility to the brand offer." People always wish to see their favorite stars and companies,
and advertisers are quick to capitalize on such ideas. Endorsement of a product/service by a
celebrity gives out the message that it is as authentic and credible as the celebrity is. The urge
that people have of enjoying the same recognition and status like their favorite stars is often
the main reason for the increasing use of celebrities for products/services endorsement.
Celebrities increase brand awareness and define values and new dimensions of the brand.
Companies use this approach to capture mind and market spaces for their brands. The
underlying reason for any celebrity endorsement has to be more sales, with more consumers
using the brand. The more effective the process is in raking up more and more moolah, the
more successful the celebrity is that is the bottom line.
There is a flurry of ads on the television, the radio, and even in theatres these days, and most
of these ads feature either film stars or cricketers, or both. As a result, it is becoming
increasingly tough to ensure that one's share of voice is heard. Using a celebrity in an ad is,
therefore, doubly effective, in that it captures a definite mind share of the prospective
consumer, and if the features and attributes of the brand match with those of the celebrity, the
brand will surely hit gold. Rahul Dravid is considered the most dependable batsman in the
Indian team, and he transfers this characteristic of reliability and dependability to the brand(s)
he endorses. The reason why Castrol uses Dravid to promote its engine oil seems to be
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logical, as the company wants to convey to the target customers that Castrol is dependable,
and gives the vehicle a long life.
1.5.2 History of Celebrity Endorsement
Since radio became commercial in the late 20s and from the first flickering of TV screens in
the late 40s, celebrities have done commercials.
The advent of celebrity endorsements in advertising in India began when Hindi film and TV
stars as well as sportspersons began encroaching on a territory that was, until then, the
exclusive domain of models. One of the first sports endorsements in India was when Farokh
Engineer became the first Indian cricketer to model for Bryl cream. The Indian cricket team
now earns roughly Rs. 100 cr. through endorsements. There was a spurt of advertising,
featuring stars like Tabassum (Prestige Pressure Cookers), Jalal Agha (Pan Parag), Kapil Dev
(Palmolive Shaving Cream) and Sunil Gavaskar (Dinesh Suitings).
1.5.3 Is it smart to use Celebrity Endorsements?
Stars, who are known to shape destinies, cast an enormous influence. No, we're not talking
about astrology here. We're referring to the powerful effect of celebrities on destinies of
brands. One approving nod from a famous face can translate into millions in brand sales.
Perhaps that's why the world over, companies have been using stars to endorse everything,
from food to food chains, from soft and hard drinks to health drinks, from clothes and
accessories to cars (and the tyres on which they run). Even political parties are awestruck by
the charisma of stars.
Such is the magnetism of celebrities in this country that in the recent general elections, major
political parties fielded a record number of film stars and cricketers to contest from important
constituencies around the country.
Celebrity endorsements are very expensive. Therefore their use in an ad should be justified.
In other words, the message strategy for a brand should strongly warrant the use a known
face in an idea. Sadly, very often the celebrity is hired first and an idea is then weaved around
his or her presence.
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A celebrity's presence in the ad should be contextual. When cricket player Sachin Tendulkar
declares, "Boost is the secret of my energy," it doesn't seem out of context. Internationally,
Nike's association with Michael Jordan is legendary and also logical. Celebrity endorsements
work best when the celebrity is not introducing the brand. When the product already has a
strong identity and a USP that is well established, then a celebrity can come in and give the
brand an added fillip and generate some more interest value. However, what is of paramount
importance is to find a complete fit between the values of the brand and the values of the
celebrity. One needs to create a unique situation or story that links the celebrity to the
product.
Celebrity Endorsements as a strategy signing up stars for endorsements is a time-tested
strategy and has been effectively used by some of the top brands in the world including Nike
and Pepsi, In India too, HLL has used Hindi film stars to endorse their beauty soap Lux since
the fifties. Vimal, Thrums Up, Gwalior and Dinesh are some of the other brands that used
star-appeal in the early days of mass advertising. And who can forget Kapil 'Palmolive' Dev?
Star endorsements have several benefits, key among them being building credibility,
fostering trust and drawing attention... any or all of which can translate into higher brand
sales. So how does one decide whether to put a celebrity in an ad? Ideally, this should be
dictated by the communication idea. Celebrity endorsements should be used when the case is
justified. There are many cases where you need to use the celebrity to break out of a category
clutter. At times celebrity endorsement is used to build credibility to the brand offer.
Most experts concur that, when used judiciously, celebrity endorsements can be an effective
strategy. And there are many examples of good and bad use of celebrities. Actor Amitabh
Bachchan, who has been used by some companies like Parker Pens and ICICI Home Loans
remarkably well while some others have been unable to exploit his Big B status too well.
Shah Rukh Khan's endorsement of Hyundai Santro too seems to have worked well.
In a test of the match up hypothesis, Kamins (1990) demonstrated that the positive impact of
a celebrity endorser depends in part on proper fit between the celebrity and the product. Some
evidence even suggests that Wall Street values the use of celebrity endorsers - Agrawal and
Kamakura's (1995) analysis of stock price movements showed that press releases announcing
celebrity endorsement contracts resulted, on average, in a .44% excess return (Journal of
Advertising, July 1997). Yet, there are some who don't have much conviction in star
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endorsements. Some people think that to be really successful, a brand needs to have a strong
identity of its own. It should ideally not piggyback on the identity of a celebrity and hope to
achieve success. Celebrity endorsements are capable of manifesting both favorable and
adverse effects for the brands with which they associate.
1.5.4 Six uses of Celebrity Endorsements
• Establishes Credibility: Approval of a brand by a star fosters a sense of trust for that
brand among the target audience- this is especially true in case of new products.
The role of a celebrity endorser in an advertising campaign is, without doubt, linked
to the reputation of the celebrity. If the reputation is damaged, more often than not for
reasons other than professional ,then the quality of his reputation does suffer
articulacy if it is to do with his (or her) public behavior.
Example: Dyna ad by Katrina Kaif
• Attracts Attention: Celebrities ensure attention of the target group by breaking the
clutter of advertisements and making the ad and the brand more noticeable.
Example: Shahrukh khan in pespi, Hrithik Roshan in Sony Erricson
• Associative Benefit: A celebrity's preference for a brand gives out a persuasive
message - because the celebrity is benefiting from the brand, the consumer will also
benefit.
Example: Amitabh Bachchan in ‘Dabur Chwyanprash’.
• Psychographic Connect: Stars are loved and adored by their fans and advertisers use
stars to capitalize on these feelings to sway the fans towards their brand
Example: Dhoni in Aircell
• Demographic Connect: Different stars appeal differently to various demographic
segments (age, gender, class, geography etc.).
Example: Amitabh Bachchan with child in Dadur Honey, Sunny Deol in Lux cozi ad.
• Mass Appeal: Some stars have a universal appeal and therefore prove to be a good
bet to generate interest among the masses.
Example: Sharukh khan And Amitabh Bachchan in Polio Promotion, Amir Khan in Atithi Devo
Bhawa.
1.5.5 Mechanism and Theories of Celebrity Endorsement
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Celebrity endorsements give a brand a touch of glamour and the hope that a famous face will
provide added appeal and name recognition in a crowded market. In the battle for the mind,
you get the customer excited by showing him a known face, and an effective demand is
created. In short it helps increase the recall value of the brand. A piece of research states that
the target audience age group of 15-30 gets influenced first by cricketers, then Bollywood
stars and only then music, festivals and food.
According to Source Credibility Theory, acceptance of the message depends on 'Bxpertness'
and Trustworthiness' of the source. Expertness is defined as the perceived ability of the
source to make valid assertions. Trustworthiness is defined as the perceived -willingness of
the source to make valid assertions. Audience acceptance increases with the expertness of the
source and the ability of the audience to evaluate the product.
According to Source Attractiveness Theory, which is based on social psychological research,
the acceptance of the message depends on familiarity, likeability and similarity, familiarity is
the audience's knowledge of the source through exposure; likeability is the affection for the
source's physical appearance and behavior while similarity is the resemblance between source
and receiver. This theory explains the message acceptance in two ways: Identification and
Conditioning. Identification is when the receiver or the target audience of the communication
begins to identity with the source's attractiveness, and hence tends to accept his opinions,
beliefs, habits, attitudes etc. On identification, a quote from Bijou Kurien, COO, Titan, "We
decided on Aamir because we wanted someone who is a bit iconic, who is style-conscious
himself, and somebody who cuts across both sex and age group, between urban and rural
India. A celebrity is one who is moldable and who is not over-exposed". Conditioning is
when the attractiveness of the source is supposed to pass on to the brand after regular
association of the source with the brand.
Grant McCracken has criticized the previous two theories and proposed the Meaning
Transfer Theory, The theory explains that a celebrity encodes a unique set of meanings which
if well used can be transferred to the endorsed product. Such a transfer takes place in three
stages - encoding meanings, meaning transfer, meaning capture (Figure 1).
I. Encoding Meanings: Each celebrity has a unique set of meanings, which can be
listed by age, gender, race, wealth, personality or lifestyle. In this way, the
celebrities encode a set of meanings in their image. For example Preity Zinta can
be seen as a lively, charming, bubbly, witty and enthusiastic.
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II. Meaning Transfer: This stage transfers those meanings to the product. When
skillfully portrayed, celebrities can communicate this image more powerfully than
lay endorsers.
III. Meaning Capture: This assumes that consumers purchase products not merely for
their functional value but also for their cultural and symbolic value. The theory
says that consumers buy the endorsed product with the intention of capturing
some of the desirable meanings with which celebrities have passed on to the
product. This is more eminent in lifestyle products like clothes, perfumes, cell
phones etc.
Does celebrity endorsement really work? Theoretically yes, because the qualities associated
with the endorser are associated with the brand and the brand therefore remains at the top of
the consumer's mind. However one needs to realize that the impact of an endorser cannot be
sustainable in all product categories and in all the stages of brand life cycles. It really depends
upon the type of product. If it is a 'functional brand', then the product itself is the hero. Here
any celebrity association with the brand without corresponding performance of the product
will not be sustainable. While increase of' image brands', like the categories of soaps, soft
drinks, cigarettes etc., where it is difficult to distinguish between the products, celebrity
endorsements help to distinguish between the brands at an emotional level. A research
conducted by Synovate, a global market research firm, revealed that 47% people would be
more likely to buy a brand that was endorsed by their favorite celebrity.
Pepsi Co. has used a variety of celebrities including Aishwarya Rai, Hrithik Roshan, Amitabh
Bachchan, Kareena Kapoor, Rahul Khanna, Fardeen Khan, Sachin Tendulkar etc. Amongst
advertisements featuring celebrities, Pepsi tops the heap with the highest recall of 70%, while
archrival Coke is lower across all markets with 52% recall. This proves that Pepsi has really
exploited the use of celebrities in their advertisements and has worked.
Hindustan Lever's 'Lux' soap in India has been using popular film actresses to endorse the
soap since its launch four decades ago implying that they owe their stunning looks to the
brand. This consistent message hence reinforces the brand values and has been successfully
able to position the soap rightly as the 'beauty soap".
It would be difficult to judge the direct effect of celebrity endorsement on the sales or profits
of the company. On Amitabh Bachchan endorsing RIN, an HLL spokesperson says that it
was too early to gauge the success of 'Rin1 in terms of sales and that though Dabur healthcare
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products' sales had improved, the increase could not be solely attributed to him. Similarly,
there are also cases wherein there was a dramatic change in the sales figure after the
endorsements. For example Rahul Malhotra, Associate Director Marketing, P&G India
quotes "Certainly, it has helped us promote our brand 'Head & Shoulders'. Last year, we were
ranked as No. 2 and this year we are market leaders in this segment with over 45% market
share".
D. Garg, Vice-President (Marketing), Dabur India Ltd quotes, "A celebrity does help in
increasing brand sales, but only if he/she is selected carefully and used effectively. The
personality of the brand and the celebrity have to complement each other and the selection of
the celebrity is, therefore, very important."
1.5.6 SCOPE OF CELEBRITY ENDORSEMENT:
The use of testimonials by advertisers dates back to the 19th century when medicines were
patented. Firms have been juxtaposing their brands and themselves with celebrity endorsers
(e.g., athletes, actors) in the hope that celebrities may boost effectiveness of their marketing.
The increasing number of endorsements throws a valid question to the consumers. Is there a
science behind the choice of these endorsers or is it just by the popularity measurement?
What are the reasons which lead to impact of celebrity endorsement on brands? The success
of a brand through celebrity endorsement is a cumulative of the following 14 attributes.
Greater the score of the below parameters, greater are the chances of getting close to the
desired impact.
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Figure: 1
1.5.7 Positive Impacts of Celebrity Endorsement on the Brand
Approval of a brand by a star fosters a sense of trust for that brand among the target audience.
This is especially true in case of new product. Celebrities ensure attention of the target group
by breaking the clutter of advertisements and making the advertisement and the brand more
noticeable. A celebrity's preference for a brand gives out a persuasive message and hence,
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because the celebrity is benefiting from the brand, the consumer will also benefit. There is a
demographic and psycho graphic connection between the stars and their fans. Demographic
connection establishes that different stars appeal differently to various demographic segments
i.e. age, gender, class, geography etc., while psycho graphic connection establishes that stars
are loved and adored by their fans. Some stars have a universal appeal and therefore prove to
be a good bet to generate interest among the masses. Another invaluable benefit from
celebrity endorsements is the public relation opportunities.
Dwane Hal Dean studied the effects of three extrinsic advertisement cues viz. third party
endorsement, event sponsorship and brand popularity on brand / manufacturer evaluation. It
was observed that endorsement significantly affected only product variables (quality and
uniqueness) and one image variable (esteem). The third party endorsement hence may be
perceived as a signal of product quality.
Goldsmith et al. assessed the impact of endorser and corporate credibility on attitude-toward
the-ad, attiiude-toward-the-brand, and purchase intentions. 152 adult consumers were
surveyed who viewed a fictitious advertisement for Mobil Oil Company. They rated the
credibility of the ad's endorser, the credibility of the company, and attitude-toward-the-ad
(Aad), attitude-to ward-the-brand (AB), and purchase intentions. It was observed that
endorser credibility had its strongest impact on Aad while corporate credibility had its
strongest impact on AB. The findings suggest that corporate credibility plays an important
role in consumers' reactions to advertisements and brands, independent of the equally
important role of endorser credibility.
Looking at the effect of celebrity endorsement on the wealth of a company a classic example
of Michael Jordan can be used. At the time of rumors of Michael Jordan returning to NBA in
1995, he was endorsing products of General Mills (Wheaties), McDonalds (Quarter
Pounders, Value Meals). Nike (Air Jordan) and Quaker Oats (Gatorade). Study conducted by
Mathur et al. associated with Jordan's endorsements shows that the anticipation of Jordan's
return to NBA. And the related increased visibility for him resulted in increase in the market
adjusted values of his client firms of almost 2 percent, or more than $1 bn in stock market
value. From this study one can observe that the major celebrity endorser with rumors or
otherwise has a tremendous potential to influence the profitability of endorsed products.
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Semi-partial endorsement indicates that when a company uses famous characters from any
TV soaps for brand endorsements, consumers tend to relate to the character that he or she
plays in the soap and hence can attract more credibility. For example, Smriti Irani who plays
Tulsi' in a famous soap has garnered a lot of support from the middle-class housewife today.
If she would endorse a brand, there would be more relativity and credibility. It can be said
about Priya Tendulkar who used to play the character of Rajani.
1.5.8 Negative impacts of Celebrity Endorsement on the brand
More often talked about is the extreme usage of a celebrity called 'lazy advertising', that is
inadequate content masked by usage of a celebrity. A good example is the use of Boris
Becker by Siyaram and Steve Waugh by ANP Sanmar. Also as said earlier, associating with a
star, in itself does not guarantee sales. There is also the fear of Brand-celebrity disconnect
which points out that if the celebrity used represents values that conflict with the brand
values, the advertising would create conflict in the minds of the target audience.
Clutter in brand endorsements is very prominent these days and such kind of over-exposure
can be bad for the brand as the recall value drops by a huge margin. A popular drawback of
celebrity endorsement is the 'Vampire Effect' or the celebrity overshadowing the brand. Some
viewers forget the brand that a celebrity is approving. Others are so spellbound by the
personality of the celebrity that they completely fail to notice the brand being advertised.
Two new drawbacks can be seen these days what companies call Celebrity Trap and
Celebrity Credibility. Celebrity trap is when the celebrity becomes an addiction for the
marketing team and the task to find substitutes becomes more and more difficult, leading to
surfeit of celebrities. Celebrity credibility refers to skepticism by the consumers regarding the
celebrities, especially when there is anything negative regarding the celebrity associated with
the brand in the news, then brand is bound to be affected. For example, Air Jordan's
generated revenue sales of $130 million in the first year. The sales dropped miserably in the
second year when Jordan missed 62 games due to a broken foot. Another main worry of the
advertisers is that their celebrity endorser would get caught in a scandal or an embarrassing
situation.
Multiple product endorsement also has a negative impact on customers' purchasing
intentions. Tripp et al. investigated the effects of multiple product endorsement by celebrities
on customers' attitudes and intentions. They found that the number of products a celebrity
endorses negatively influences consumer perception of the endorser and the advertising itself.
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It was suggested that when as many as four products are endorsed, celebrity credibility and
likeability, as well as attitude towards the ad, may attenuate.
• Dean, D. H. (1999). Brand Endorsement, Popularity and Sponsorship as advertising cues affecting consumer pre- purchase attitudes. Journal of Advertising, 28(3), pp. 1-2.
• Ferris, K. O. 2004. "The Moral Order of Celebrity Sightings." Journal of
Contemporary Ethnography 33:236-64.
• Friedman, Milton and Rose Friedman, Free to Choose, (New York: Harcourt, Brace and Jovanovich, 1979).
• Friedman, H. H. and Friedman, L. (1979), "Endorser Effectiveness by
Product Type," Journal of Advertising Research, 19 (5), 63-71
• Giles, D. 2000. Illusions of Immortality: A Psychology of Fame and Celebrity. New
York: St. Martin's Press.
• Horton, D. and R. R. Wohl. 1956. "Mass Communication and Parasocial Interaction:
Observations on Intimacy at a Distance." Psychiatry 19:215-29.
• Kahle, L. R., and Homer, P. M. (1985), "Physical Attractiveness of the Celebrity Endorser: A Social Adaptation Perspective," Journal of Consumer Research, 11 (March), 954-961.
• Keller, K. L., (1993), "Memory Retrieval Factors and Advertising Effectiveness" in Advertising Exposure, Memory, and Choice, ed. Andrew A. Mitchell, Hillsdale, NJ: Lawrence Erlbaum Associates, pp. 11-48.
• Leets, L., G de Becker, and H. Giles. 1995. "FANS: Exploring
Expressed Motivations for Contacting Celebrities." Journal of
Language and Social Psychology 14:102-23.
• Mc Cracken, G. (1989). Who is the Celebrity Endorser? Cultural
Foundations of the Endorsement Process. Journal of Consumer
Research, Vol. 16, pp. 310- 321.
• Quian Quiroga, R., L. Reddy, G Kreiman, C. Koch, and I. Fried. 2005. "Invariant
Visual Representation by Single Neurons in the Human Brain." Nature 435:1102-07.
• Schickel, R. 1985. Intimate Strangers: The Culture of Celebrity. Garden City, NY:
Doubleday.
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QUESTIONNAIRE
Dear respondents,This questionnaire carries data on which study will take place on the topic “Celebrity endorsement affecting consumer’s attitude toward the advertisement and purchase intension for a product”. Your view will be of immense value and through this I can find the change in attitude by seeing advertisement.
1. What are the motivating factors when you plan to buy mobiles or cars?(a) Discounts and offers [ ] (b) Fewer prices [ ](c) Latest models and trends [ ] (d) Celebrity endorsing the product [ ]
2. Do you believe products specifically advertised by the celebrities are of good quality?Yes [ ] No [ ] 50% [ ] Not sure [ ]
3. What is the most persuading factor to purchase the following products?
(a) Motor vehicle?Brand Name [ ] Celebrity [ ] Luxury [ ] Self Esteem [ ]
(b) Clothing Brand Name [ ] Celebrity [ ] Status [ ] Cost [ ]
4. Companies are investing large amounts of money for using celebrities; do you think its helping them to increase their total revenue?Yes [ ] No [ ] Don’t know [ ]
5. Does the presence of mega star like Shahrukh Khan, Amitabh Bacchan or Aishwariya Rai in an advertisement encourage you to purchase the product or service?
Yes [ ] No [ ] Not sure [ ]
6. Do you believe the celebrities also use those products which they themselves endorse?Yes [ ] No [ ] Not sure [ ]
7. What type of celebrity endorsement persuades you personally to purchase products? Film star [ ] Famous personalities [ ]Cricketer [ ] Politician [ ]
8. Please rate the following celebrities as a brand endorser:-(a) Aishwariya Rai for L’OrealExcellent [ ] Good [ ] Average [ ]Poor [ ] Can’t [ ]
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(b) Hritik Roshan for coca cola and hero honda karizma Excellent [ ] Good [ ] Average [ ]Poor [ ] Can’t rate [ ](c) Sushmita Sen for Olay creams Excellent [ ] Good [ ] Average [ ]Poor [ ] Can’t rate [ ]
(d) Juhi Chawla for Kurkure-Excellent [ ] Good [ ] Average [ ]Poor [ ] Can’t rate [ ]
(e) Amitabh Bachan for Cadbury chocolates-Excellent [ ] Good [ ] Average [ ]Poor [ ] Can’t rate [ ]
(f) Shah Rukh Khan for Airtel and PepsiExcellent [ ] Good [ ] Average [ ]Poor [ ] Can’t rate [ ]
(g) Saif Ali Khan for Lays and Chevrolet Excellent [ ] Good [ ] Average [ ]Poor [ ] Can’t rate [ ]
(h) Aamir Khan for Tata Sky and SamsungExcellent [ ] Good [ ] Average [ ]Poor [ ] Can’t rate [ ]
(i) Katrina Kaif for slice Excellent [ ] Good [ ] Average [ ]Poor [ ] Can’t rate [ ]
(j) John Abraham for Garnier and Castrol Excellent [ ] Good [ ] Average [ ]Poor [ ] Can’t rate [ ]
9. What do you value the most when purchasing a product?Price of the product [ ] Celebrity endorsement [ ]Quality of the product [ ] Value for money [ ]
10. Does celebrity endorsement help in brand promotion?Yes [ ] No [ ] Not sure [ ]
11. Does it affect company if celebrity’s image defer?Yes [ ] No [ ] Not sure [ ]
12. What means of advertisements persuades you the most to purchase a product?Television [ ] Radio [ ] Newspaper [ ]
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Magazines [ ] Internet [ ]
13. What do you think is the reason for the companies to choose celebrity endorsement for promoting their products?Easy recognition of product [ ] Can’t generate new ideas [ ]to be able to increase sales and profit [ ] to compete strongly [ ]