FMCG sector Effectiveness of celebrity endorsement in building brands with special reference to FMCG sector.doc

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TABLE OF CONTENTS

1. Executive summary……………………………………………………………5

2. Introduction……………………………………………………………………6

3. Objectives……………………………………………………………………..8

4. Literature Review……………………………………………………………...9

5. FMCG

About FMCG Sector…………………………………………………………13

FMCG Introduction……………………………………………………...14

Industry characteristics…………………………………………………..17

Key Players………………………………………………………………18

Salient Features…………………………………………………………..19

SWOT Analysis………………………………………………………….20

6. About Celebrity endorsements……………………………………………….21

Introduction to Celebrity endorsements………………………………….22

Why customers accept the celebrities……………………………………25

Uses of celebrity endorsements………………………………………….26

Reasons why celebrity endorsement may not work……………………27

Benefits of celebrity advertisements……………………………………..29

Theories of celebrity endorsement ………………………………………30

7. Research methodology ………………………………………………………32

8. The Survey…………………………………………………………………...33

9. Findings……………………………………………………………………...55

10. Recommendations……………………………………………………………57

11. Limitations …………………………………………………………………..58

12. Conclusions…………………………………………………………………..59

13. Bibliography…………………………………………………………………61

14. Annexure……………………………………………………………………..62

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EXECUTIVE SUMMARY

The project talks about the effectiveness of celebrity endorsement in building brands

with special reference to FMCG sector.

The first few pages talk about the introduction and objectives of the study.

This is followed by details about FMCG Sector. This part consist of FMCG

Introduction, Industry characteristics, Key Players, Salient Features and SWOT

Analysis of the FMCG industry.

Next comes the detail about celebrity endorsements in FMCG sector. This part

consists of Introduction to Celebrity endorsements, why customers accept the

celebrities, Uses of celebrity endorsements, Reasons why celebrity endorsement may

not work, Benefits of celebrity advertisements and Theories of celebrity endorsement.

Next comes the survey, the purpose of which is to find out uses of celebrity

endorsement those translate into higher brand recall of FMCG Products and to

understand the reason behind the attitudes of consumer towards all those FMCG

Products which are endorsed by the celebrities.

The last part consists of findings, conclusion and bibliography. The questionnaire has

been annexed to the report.

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INTRODUCTION

We currently live in a society that can be called as over communicated. The explosion

of various forms of media had made life difficult for marketeers giving them more

opportunities to reach out to the target group. But the real question is “How to break

the clutter”. The nation currently has more than 400 television channels that broadcast

more than 300 million commercials every year. Catching the attention of the

consumer and then influencing the purchase decision is a huge challenge. This precise

problem has given rise to the “Celebrity endorsement phenomena”

Celebrities have been endorsing products since the evolution of media. In India they

are predominantly dominated by Bollywood and sports persona (Cricketers getting the

lions share).

Celebrity endorsement is an important tool which is able to influence Indian

consumer buying behavior. In India, celebrities are being increasingly used in

marketing communication by marketers to lend personality to their products. With the

visual media becoming more popular the use of celebrities in the TV media has

increased. Celebrities create headlines. Their activities and movements are being

closely watched and imitated. What they endorse sell like hot cakes. It is not

surprising therefore that using celebrities in advertisements has become common

practice.

In India especially, it is not difficult to look for the reasons as to why companies are

increasingly using celebrities. Indians always love their cricket and bollywood.

Consumers like advertisements more if they are admirers of the celebrities in the

advertisements. When a consumer likes the celebrity in the advertisement, he or she is

more likely to accept what the celebrity says about the advertised product and

therefore will develop more positive feelings toward the advertisement and the brand

itself. Famous celebrities are able to attract attention and retain attention by their mere

presence in the advertisements.

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In the midst of the advertisement clutter, the advertisements that celebrities endorse

also achieve high recall rates. When people see their favored reference group

members or celebrities in the advertisements, they pay more attention to them.

Celebrities may also help reposition products. Products with sagging sales needs

some boosting and in this, Indian celebrities can help by way of they endorsing the

product concerned.

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.

Celebrity endorsements are today seen as a powerful mechanism for brand awareness

and sales. A host of celebrities including film stars, cricket and lately tennis icons

have been endorsing a range of products from FMCG’s, automobiles to jewellery to

apparel and watches. Several brands have also appointed celebrities as their brand

ambassadors to continuously promote their brands and associate the brands with the

excellence and attributes that the celebrities are associated with.

How is FMCG different from other products / services from endorsement point of

view:

- There is no POS presence of the celebrity advertisement always so the

recall becomes a very important factor to influence purchase

- Most of the products are of low involvement and the customer does not

spend considerable amount of the time researching about the product.

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The four primary endorser’s types are:

Celebrities

Experts

Typical satisfied customers

Announcers.

Celebrity endorsements of brands

Brand- a brand is a name, a sign, or a symbol such as a trademark or logo that

identifies a product or service and differentiate it from similar products or services. It

is different from a product, in that the product performs a task for the user while the

brand adds value and covers the source of the product protecting the customer,

producer from competitors who would attempt to provide products that seem to be

identical.

Marketers use a whole lot of tactics to draw the consumer’s attention to their brand -

one of these is getting celebrities to endorse the products.

Who are celebrities?

Popular personalities who enjoy public recognition amongst a huge slice of a

particular segment of the population or the entire population are celebrities.

Invariably, their very presence conveys the message “I’m rich, famous, talented,

beautiful, intelligent and you aspire to be like me. I actually think this product is great.

Why don’t you buy it and become like me?”

The product is made attractive by the association with the person whom customers

want to be like and admire and it is this association that caused the compulsive desire

to purchase and use it.

A celebrity may be the embodiment of the company’s image. When celebrities

endorse a brand, customers become aware of the product/service such that they totally

believe and trust that the purchases will meet their requirements and expectations   but

all this provided there is a proper fit between the chosen celebrity and the brand.

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Celebrities give the perception of quality products and services. Once quality

branding is in place, brand extensions are possible i.e. customers might easily be

persuaded to try their other products and services. Another factor that requires a

thought is the media to be used to advertise the product/service.

Celebrities have the advantage of publicity and the attention getting power required

for any successful advertising campaign. Most celebrities also enjoy enormous

goodwill. The associations made with them also help the product they are endorsing.

The mind as a defense against the volume of today’s communications screens and

rejects much of the information offered to it. In general the mind accepts only that

which matches prior knowledge or experience.

In the midst of today’s cluttering, it becomes all the more important for the advertiser

to capture the attention of the consumer. Instinctive changing of channels is prevented

if the first few seconds of the advertisement manage to grip the audience’s attention.

Celebrity endorsers is that s/he can provide testimony for a product or service,

particularly when the product has contributed to their celebrity. The relationship can

increase a consumer's belief and trust in the product and its benefits. The more

familiar an endorser, the more likely consumers are to buy the endorsed product.

Forms of celebrity endorsement: 

A celebrity can endorse brands in different ways based on the purpose, the

advertisement media and the appeal to be generated. The product could be

commercial ones or non-commercial ones (social advertising). Following types of

endorsement forms have been identified to be heavily in use at present:

As spokespersons, e.g., Amitabh Bachchan in KBC.

In print and electronic advertisements, e.g., Shah Rukh Khan in Omega

and Pepsi.

In outdoor media like hoardings, e.g., Aishwarya Rai in Lux in some

parts of North India.

As brand ambassadors, e.g., Fardeen Khan in Provogue, and finally

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The use of brands by celebrities in movies, e.g., Hero Cycles, Paas Paas

and Coke in Yaadein. 

Why customers accept the celebrities…

Messages delivered by well-known celebrities achieve a high degree of attention

and recall for consumers.

Celebrity Expertise perceived relevant – Expertise is the knowledge that the

communicator seems to possess to support the claims made in the advertisements. A

well-known face would obviously speak for more expertise than an ordinary one.

Celebrities are perceived Trustworthy – Trustworthiness refers to the customer’s

confidence in the source for providing information in an objective and honest

manner. People are more likely to trust the quality of a trustworthy celeb endorsed

brand over a non-endorsed one.

Ambitious psyche: People ape the celebrities in their day-to-day activities and

many even dream to become like a celebrity some day. Some know they wouldn’t

become as good as the celebrities but sharing common belongings makes them feel

better.

Physical Attraction: Consumers tend to perform positive stereotypes about such

people. Physically attractive people are more successful in changing beliefs than

non-attractive people.

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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.

Attracts Attention: Celebrities ensure attention of the target group by

breaking the clutter of advertisements and making the ad and the brand more

noticeable.

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.

Psychographics Connect: Stars are loved and adored by their fans and

advertisers use stars to capitalise on these feelings to sway the fans towards

their brand.

Demographic Connect: Different stars appeal differently to various

demographic segments (age, gender, class, geography etc.).

Mass Appeal: Some stars have a universal appeal and therefore prove to be a

good bet to generate interest among the masses.

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Reasons why celebrity endorsements may not work

Improper positioning:

Associating with a star, however big he or she may be, in itself does not guarantee

sales. The most it can do is generate interest in the product or create a buzz around it.

Brand-celebrity disconnect:

If the celebrity used represents values that conflict with the brand values and

positioning, the advertising will create a conflict in the minds of the target audience

who may reject the proposition.

Clutter Flutter:

In recent times, there has been such a deluge of celebrity endorsements that it has led

to the very clutter that it aimed to break. This over-exposure can be bad for the brand.

“We seem to have just 2 ½ celebrities in a country of 1 billion people which is a

terrible tragedy. Consequently, each celebrity is called upon to push maybe a dozen

brands or so. Which is great for the celebrity but I think it is pretty daft for the brand

because the impact of the celebrity reduces as the number of brands he endorses

increases.” Unfortunately in India, we have too many brands chasing too few

celebrities.

Dissatisfaction with product quality/performance

You cannot sell an ordinary product just by making a celebrity endorse it. In fact, if

anything, the product will fail faster because the presence of the celebrity will create a

buzz and more people will know about the “ordinariness” of the product.

Unfortunately using a celebrity seems to be the easy way out of a parity product

situation.

Confusion/ Skepticism

The use of celebrities can be confusing. Some viewers forget brand that a celebrity is

approving. Others are so spellbound by the personality of the celebrity that they

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completely fail to notice the product/brand being advertised. The brand is

overshadowed in the overwhelming presence of the star. In some cases, a celebrity

can give rise to skepticism because it might be a bit too much for the masses to

believe that the celebrities who are rich and can afford the best in the world are

actually using a mass product being advertised on television

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Benefits of celebrity advertising -- the four Qs:

Quick saliency:

It gets cut through because of the star and his attention getting value. Dabur has

ensured high saliency for its brand with the inclusion of Amitabh Bachchan in its

advertising.

Quick connect:

There needs to be no insight but the communication connects because the star

connects. Sachin, Shah Rukh and their ilk's ensure an easy connect for Pepsi with

the youth.

Quick shorthand for brand values:

The right star can actually telegraph a brand message fast without elaborate story

telling. Kapil Dev and Sachin Tendulkar seem to have done that successfully for

Boost in the early '90s. And helped to differentiate it in the malted beverages

market.

Quick means of brand differentiation:

In a category where no brand is using a celebrity, the first that picks one up could

use it to differentiate itself in the market. Boost did it in the malted beverage

category.

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Theories of Celebrity Endorsement

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..

Source Credibility Theory:

According to this theory acceptance of the message depends on 'Expertness' 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.

Source Attractiveness Theory:

According to this 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 identify with the

source's attractiveness, and hence tends to accept his opinions, beliefs, habits,

attitudes etc.

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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.

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.

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.

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OBJECTIVE

To find out the effectiveness of celebrity endorsement in building brands with special

reference to FMCG sector and also measure the recall of the endorsements (TV Ads)

in various categories of FMCG within the age group of 25-35 (young adults)

Note : This study primarily focuses on TV watching audience

Sub- Objectives:

To find if the buying behavior is influenced by the celebrity endorsement

Category wise analysis of the

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Literature Review:

The literature review focus on 3 aspects

o Under what circumstances does celebrity endorsement succeed?

o What are the dis advantages of celebrity endorsement

o Relationship between the celebrity’s personal traits and the purchasing

behavior of the customers

1) The vampire effect: When do celebrity endorsers harm brand

recall?

Authors: Carsten Erfgen a, Sebastian Zenker b, Henrik Sattler c

Summary: The author talks about the negative effects of celebrity endorsements

and suggests ways about choosing celebrities without affecting the brand image of the

product. Although many brand managers favor the use of celebrities in

advertisements, others worry that celebrities overshadow the brand and thus impair

brand recall. Practitioners refer to this overshadowing as the vampire effect, defined

as a decrease in brand recall for an advertising stimulus that features a celebrity

endorser versus the same stimulus with an unknown but equally attractive endorser.

Because there is no agreement about whether this overshadowing really exists, this

research analyzes the existence of the vampire effect and its moderators in a series of

experiments with a total of 4,970 respondents. The results provide important insights

into how to avoid the vampire effect by creating appropriate conditions, such as high

endorser–brand congruence or a strong cognitive link between the celebrity and the

brand. Surprisingly, brand familiarity does not significantly moderate the effect.

Methodology :

An exhaustive research has been conducted with 4970 respondents about the aspects

of the celebrity which may lead to positive or negative (denigrate) brand image using

the following parameters.

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2. Article: “Breaking through the Clutter in Media Environment: How

Do Celebrities Help?”

Author: Mazzini Muda, Rosidah Musa & Lennora Putit

Summary: The author primarily talks about the celebrity power leads to three

outcomes:

(1) attention :which breaks through the advertising clutters and makes the endorsed

brand more noticeable to target audience;

(2) credibility :which conveys a sense of trust for endorsed brands

(3) persuasion :which sends a persuasive message to target audience to adopt the

endorsed brand

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The paper talks about the “Celebrity – Product match up “ hypothesis which is the

congruence between the personality of the brand and the personality of the celebrity.

It talks about the correlation in the purchase behavior to the personality match of the

celebrity. He also talks about the brand manager’s psychology in selecting a brand

manager. This is because the first question that a brand manager must pose when

selecting an endorser is

“Will the target market relate positively to this endorser?”

Having a clear concept of what to communicate to target audience alone is not

sufficient to be successful in advertising. Advertisers must also do well in the next

step, which is to choose the right media and vehicle to place their ads so that the

message will be smoothly channeled and reached the intended audience. However,

this is easily said than done as nowadays the media environment is highly saturated

with many messages, commercial and non-commercial that want to grab a piece of

consumers’ attention pie.

3. Article: Effects of multiple endorsements and consumer–celebrity

attachment on attitude and purchase intention

Author: Jasmina Ilicic , Cynthia M. Webster

Summary: This study examines consumer–celebrity attachment within multiple

endorsement situations. A 2 x 2 factorial design manipulates attachment strength to

the celebrity and endorsement situation while controlling for celebrity attractiveness,

familiarity and match-up. Results show strong attachment to a celebrity encourages

positive attitude towards the advertisement and brand regardless of the number of

endorsements. A significant interaction effect is found for purchase intention,

suggesting that both attachment and the number of endorsements influence likelihood

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of purchase. When consumers are more attached to a celebrity and view that celebrity

endorsing multiple brands, this negatively impacts their purchase intention. Yet, when

consumers have a weak attachment, their purchase intention is increased with multiple

endorsements.

Methodology :

The researchers have created two “new” celebrities out of TV stars who have enough

popularity and visibility among the consumers to remove the biases that people have

towards regular celebrities who endorse multiple products.

Consumer attachment to a celebrity does impact consumer attitude towards the

ad, brand and purchase intentions. Attachment to a celebrity has a significant role in

explaining consumer attitude. Consumer attachment to a celebrity results in higher

attitude towards the ad and attitude towards the brand the celebrity endorses,

regardless of whether the celebrity is seen endorsing a single brand or multiple

brands.

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4. Article: Celebrity Advertisement on Select FMCG – An Empirical

Study

Author: Dr. J. Sridevi A

Summary : The practice of celebrity endorsements has proliferated over time. In the

past decade celebrity advertisement has been the most prevalent and successful form

of advertising. Reason for this is that celebrities are considered to demonstrate a

number of dynamic personality. Now days it has become a pervasive element of

advertising industry especially in India. The present research begins with the review

of existing literature available on effectiveness of celebrity endorsements which

provides an insight into the research topic. The data is collected through a

questionnaire a quantitative method is used for this research to investigate the opinion

of the consumer towards celebrity advertisements on selected fast moving consumer

products. The data is collected through a questionnaire method with a sample size of

500 consumers and analyzed with statistical tools such as percentage analysis and

parametric T test. Finally, the results of the study prove that celebrity advertisements

have a positive effect on the consumers of FMCG. The aim throughout this study is to

present the relevant academic theory determining the effectiveness of celebrity

advertisement on selected FMCG.

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5. Article: “The wealth effects associated with a celebrity endorser:

The Michael Jordan phenomenon”

Author: Lynette Knowles Mathur, Ike Mathur, Nanda Rangan.

Summary: On March 9, 1995, rumors began to circulate on Wall Street that a

minor league baseball player was going to try his luck at shooting hoops

for the Chicago Bulls of the National Basketball Association (NBA).

Normally, rumors of this nature are of dubious significance for the

sports teams involved. They are even of less significance for firms that

seek to establish and maintain their presence in the marketplace through

the use of celebrity endorsements for their products. In this particular

instance, however, the enthusiasm expressed by the Bulls' players at the

prospects of having this minor league baseball player on the court with

them was outdone by the investors in a select group of firms. This minor

league baseball player was none other than Michael Jordan, whom many

would consider to be among the most talented basketball players of all

time.

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FAST MOVING CONSUMER GOODS SECTOR

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FMCG >> Introduction >>

India is one of the largest emerging markets, with a population of over one billion.

India is one of the largest economies in the world in terms of purchasing power and

has a strong middle class base of 300 million.

The Fast Moving Consumer Goods (FMCG) sector is the fourth largest sector in the

economy with a total market size in excess of Rs 60,000 crore. This industry

essentially comprises Consumer Non Durable (CND) products and caters to the

everyday need of the population.

Product Characteristics

Products belonging to the FMCG segment generally have the following

characteristics:

They are used at least once a month

They are used directly by the end-consumer

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They are non-durable

They are sold in packaged form

They are branded

India - a large consumer goods spender

An average Indian spends around 40 per cent of his income on

grocery and 8 per cent on personal care products. The large share

of fast moving consumer goods (FMCG) in total individual spending

along with the large population base is another factor that makes

India one of the largest FMCG markets.

Change in Indian consumer profile

Consumer profile

Source: statistical outline of India

1999 2001 2006

Population (millions) 846 1,012 1,087

Population <25 yrs of age 480 546 565

Urbanization (%) 26 28 31

Rapid urbanisation, increased literacy and rising per capita income, have all caused

rapid growth and change in demand patterns, leading to an explosion of new

opportunities. Around 45 percent of the population in India is below 20 years of age

and the young population is set to rise further. Aspiration levels in this age group have

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been fuelled by greater media exposure, unleashing a latent demand with more money

and a new mindset.

Industry Segments

The main segments of the FMCG sector are:

Personal Care: oral care; hair care; skin care; personal wash (soaps);

cosmetics and toiletries; deodorants; perfumes; paper products (tissues,

diapers, sanitary); shoe care.

Major companies active in this segment include Hindustan Lever; Godrej Soaps,

Colgate-Palmolive, Marico, Dabur and Procter & Gamble.

Household Care: fabric wash (laundry soaps and synthetic detergents);

household cleaners (dish/utensil cleaners, floor cleaners, toilet cleaners, air

fresheners, insecticides and mosquito repellants, metal polish and furniture

polish).

Major companies active in this segment include Hindustan Lever, Nirma and

Reckitt & Colman.

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Branded and Packaged Food and Beverages: health beverages; soft drinks;

staples/cereals; bakery products (biscuits, bread, cakes); snack food;

chocolates; ice cream; tea; coffee; processed fruits, vegetables and meat; dairy

products; bottled water; branded flour; branded rice; branded sugar; juices etc.

Major companies active in this segment include Hindustan Lever, Nestle,

Cadbury and Dabur.

Spirits and Tobacco: Major companies active in this segment include ITC,

Godfrey Philips, UB and Shaw Wallace

  FMCG >> Industry Characteristics >>

Branding: Creating strong brands is important for FMCG companies and they devote

considerable money and effort in developing bands. With differentiation on functional

attributes being difficult to achieve in this competitive market, branding results in

consumer loyalty and sales growth.

Distribution Network: Given the fragmented nature of the Indian retailing industry

and the problems of infrastructure, FMCG companies need to develop extensive

distribution networks to achieve a high level of penetration in both the urban and rural

markets. Once they are able to create a strong distribution network, it gives them

significant advantages over their competitors.

Contract manufacturing: As FMCG companies concentrate on brand building,

product development and creating distribution networks, they are at the same time

outsourcing their production requirements to third party manufacturers. Moreover,

with several items reserved for the small-scale industry and with these SSI units

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enjoying tax incentives, the contract-manufacturing route has grown in importance

and popularity.

Large unorganized sector : The unorganised sector has a presence in most product

categories of the FMCG sector. Small companies from this sector have used their

locational advantages and regional presence to reach out to remote areas where large

consumer products have only limited presence. Their low cost structure also gives

them an advantage. 

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FMCG >> Key Players >>

There is a strong MNC presence in the Indian FMCG market and out of the top 10

FMCG companies; four are multinationals while two others have significant MNC

shareholdings.

Major players

Hindustan Lever Ltd.

I T C Ltd.

Nirma Ltd.

Nestle India Ltd.

Britannia Industries Ltd.

Colgate-Palmolive (India) Ltd

Godfrey Phillips India Ltd.

Dabur India Ltd.

Smithkline Beecham Consumer Healthcare Ltd

Godrej Soaps Ltd.

Marico Industries Ltd

Cadbury India Ltd

Procter & Gamble Hygiene & Health Care Ltd.

Reckitt & Colman Of India Ltd

I S P L Industries Ltd.

Among the major companies, Hindustan Lever has a strong presence in the food,

personal care and household care (detergents) sectors; ITC is the market leader in

cigarettes; Nirma has a strong presence in the detergent market; Nestle and Britannia

are active in the food sector and Colgate has a strong presence in the oral care

segment.

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FMCG >> Salient Features >>

The FMCG sector is a key component of India’s GDP and is a significant direct and

indirect employer. It is the fourth largest sector in the economy and is responsible for

five per cent of total factory employment in the country. The sector also creates

employment for three million people in downstream activities, much of which is

disbursed in small towns and rural India.

Unlike the perception that the FMCG sector is a producer of luxury items targeted at

the elite, in reality the sector meets the every day needs of the masses, across the

country. Low-priced products contribute the majority of the sales volume and lower

income and lower middle-income groups account for over 60 per cent of the sector’s

sales. Moreover, rural markets account for 56 per cent of total domestic FMCG

demand and FMCG outlets reach more villages than any other basic facility such as

primary schools or bus facilities.

The FMCG sector has several other salient features. It has strong links with

agriculture and 71 per cent of sales come from agro-based products; it is a significant

value creator with a market capitalisation second only to the IT sector and it is a key

contributor to the exchequer.

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Research Methodology

The primary objective of the

Research Design: Descriptive

Sampling Technique: Convenience Sampling

Sample Size: 100 (Only taking into account people who spend more than 2 hrs on

television every day)

Sample Units: Individuals within the age group of 25-35 who are residing in metros

Data Collection Methods:

Primary Data: Structured Non Disguised Questionnaire

Secondary Data: Newspapers, Magazines, Internet

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FINDINGS

Celebrity endorsements add to remembering the ads and have higher brand

recall or top of the mind recall.

Amongst FMCG advertisements featuring celebrities, Hindustan Lever's 'Lux'

soap tops the heap with the highest recall of 42% because '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'9

Coke has really exploited the use of celebrities in their advertisements and has

worked as it has 32% recall rate.

The target audience age group of 25-35 like celebrity endorsed FMCG Ads

over other ads.

Bollywood still has the strongest presence in any list of celebrity

endorsements.

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Consumers perceive the brand as having superior quality because it has been

endorsed by a credible source. This makes endorsement as one of the indictors

of quality for any brand.

Consumers perceive that celebrities add value to the product but its not that

they’ll buy a product just because they like an Ad.

Target audience perceive that celebrity advertisements carry some authenticity

and their purchase decision is influenced by them to a major extent.

The target audience age group of 25-35 gets influenced first by Bollywood

stars and then by kids in the ads of FMCG products

The qualities associated with the endorser are associated with the brand and

the brand therefore remains at the top of the consumer's mind.

Consumers find celebrities very appealing, very exciting, somewhat

persuasive, neither informative nor un- informative and neither credible nor

non-credible in the ads of FMCG Product.

FMCG advertisements featuring celebrities had left an impact on 75% the

target group at some point of time because of attractiveness of the celebrities.

Consumers are more likely to purchase a celebrity endorsed product because

celebrities draw attention to the brand.

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RECOMMENDATIONS

Celebrities should be used for FMCG’S because they ensure attention of the

target group by breaking the clutter of advertisements and making the

advertisement and the brand more noticeable.

Celebrity endorsement will be more effective when used consistently over

time to increase the strength of the link between the celebrity and endorsed

brand.

When selecting a celebrity endorser for FMCG, choose a celebrity who is not

already strongly associated with another product.

Celebrity endorser can be used to effectively reinforce and/or create an image

for a FMCG product.

Celebrity endorsement can be more effective for less familiar brands and when

consumers have limited knowledge about the product.

The issue of matching the values of the celebrity with the brand values is also

very important, i.e. getting the right celebrity to endorse the right brand.

Consumers perceive the brand as having superior quality because it has been

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endorsed by a credible source. This makes endorsement as one of the indictors

of quality for any brand

The over popularity of the celebrity sometimes overshadows the brand. If the

celebrity is involved in multiple endorsements, it tends to create confusion

among consumers and hence negatively affects the perception of the

advertisement and the brand so this should be avoided.

LIMITATIONS

1. The responses of the respondents may be biased.

2. The sample size was small and may not represent the whole universe.

3. At time the questions had to explained to the respondents due to their

ignorance that could have influenced their views.

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CONCLUSION

Celebrity endorsement really work 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 incase 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.

People would be more likely to buy a brand that was endorsed by their favorite

celebrity. 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, because

the celebrity is benefiting from the brand, the consumer will also benefit. There is a

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demographic and psychographic 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 psychographic

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.

Whether Celebrity endorsement has a positive or a negative impact on the brand is a

debate that is open to interpretation. But till the time the corporate world continues to

foot fancy bills of celebrity endorsers and till consumers continue to be in awe of the

stars, the party is not likely to break up

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BIBLIOGRAPHY

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ANNEXURE

Questionnaire on customer perception towards Celebrity

Endorsement

Personal profile

Name:

Gender:

Age:

1.Which advertisement in FMCG Sector can you recall?

2.What makes you remember the above-mentioned advertisement?

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a) Good Product

b) Famous celebrity

c) Information

d) Humor

e) Any Other (Please specify)

3. Which advertisements for FMCG products you like the most?

a) Celebrity endorsed ads

b) Common person endorsed ads

c) Kids Endorsed ads

d) Animated ads

f) Any Other (Please specify)

4. According to you, who makes best celebrity endorser for FMCG products?

a) Sports Person

b) Film star

c) Politicians

d) TV Stars

e) Kids

f) Animated stars

g) Any Other (Please specify)

5. Rate the following statements on the scale of 5 – 1 (in reference to FMCG

products)

5 – Strongly Agree, 4 – Agree, 3 – Disagree, 2 – Strongly Disagree, 1 - Don’t Know

a) Celebrities add value to the product.

b) You are more likely to purchase a product if you like an ad.

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c) Products endorsed by celebrities carry some authenticity.

d) Purchase decision is influenced by celebrity endorsement.

e) Celebrity endorsements have higher brand recall.

f) Celebrities get people to make a better choice.

g) Celebrities get people to make a foolish choice.

h) Celebrities in advertisements add to remembering the ads.

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6. Rate the statement “CELEBRITIES IN THE ADVERTISEMENTS OF FMCG

PRODUCTS”

Very Somewhat Neither Somewhat Very

Informative Uninformative

Appealing Unappealing

Persuasive Non-

Persuasive

Credible Non-Credible

Exciting Non-Exciting

7.(i) Did any FMCG advertisement by famous celebrity left an impact on you at any

point of time?

a) Yes b) No

(ii) If yes, Please specify the reason….

a) Attractiveness of celebrity

b) Trustworthiness of celebrity

c) Expertise of celebrity

d) Any Other (Please specify)

8.(i) Would you like to purchase a FMCG product that is endorsed by a famous

celebrity?

a) Yes b) No

(ii) If yes, what is the most likely reason from the following?

a) Celebrities spread awareness of the product

b) Celebrities draw attention to the brand

c) Celebrities gives the perception of quality products

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d) Celebrities persuade the customers

e) Celebrities have mass appeal

f) Any Other (Please specify)

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