Varun Synopsis

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School of Management

Major Research Project

Synopsis

On

³CelebrityEndorsementandits Impact on Consumersof India´

Faculty Guide Submitted by:

VarunWadhwa(2009-2011)



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Contents

1. Introduction ....................................................................................................... 3

1.1 Relationship between a Celebrity & a Brand ......................................................... 5

2. LITERATURE REVIEW ................................................................................... 8

3. RESEARCH OBJECTIVE ................................................................................. 9

4. RATIONALE STUDY«««««««««««««««««««««««

5. RESEARCH METHEDOLOGY.......................................................................10

5.1 Hypothesis .................................................................................................................. 10

5.2 Sampling & the Study............................................................................................... 10

5.3 Collection of Data...................................................................................................... 10

6. TOOLS OR DATA ANALYSIS .......................................................................10

7.REFERENCES ..................................................................................................11



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1. 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 marcom activities. Furthermore,

because of their fame, celebrities serve not only to create and maintain attention but also to

achieve high recall rates for marcom messages in today¶s highly cluttered environments.

Similarly every product has an image. The consumer tries to consume a brand which has themaximum 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 theconsumer, by transferring some of the cultural meanings residing in his

image to the product.



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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 of

celebrity endorsement. In the report, I have focused on the impact of celebrity endorsement

on the overall process of brand building and also tried to define: how to make celebrity

endorsement a win-win situation for both the brand and the brand-endorser. ³Brand´ 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.



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1.1 Relationship between a Celebrity & a Brand

To understand how consumers associate celebrities to brands is well documented by a research

study by Anderson (1976); Collins & Loftus (1975); Rumelhart, Hinton & McClelland (1986). In

their study, associative learning principles were based on a conception of memory as a network consisting of various nodes connected by associative links. In the research context, celebrities

and brands both represent nodes, which initially are unconnected but become linked over time

through the endorsement process. When a consumer thinks about a brand, the link with the

celebrity node is animated to a certain level through spreading activation (Anderson 1983a). The

joint activation of brand and celebrity provides a path over which one's evaluation of the

celebrity has an opportunity to transfer to the brand. The key to the process is the simultaneous

activation of the brand and celebrity nodes. Negative information about the celebrity activates

the celebrity node, which then activates the brand node to some degree and allows reduced

evaluation of the celebrity to transfer to the brand. Studies by Noffsinger et al. (1983) and Judd

et al. (1991) provide empirical evidence demonstrating that attitudes can be affected in such a

way.



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It is also important to view the consumer in their social and cultural setting to further see how

celebrity endorsements increase sales and impact brands over time. Celebrities usually form a

very good example of a reference group appeal. This is particularly beneficial to a marketer and

a brand who can cash in on the success of the star and, hence, push his brand. People who idolize

their celebrities, hence, have a biased affinity to the brand their favorites endorse. As time passes

on, they believe that they by adopting the brand that their celebrity endorses are becoming more

like them. Celebrities can be used in four ways namely: testimonial, endorsement, actor and

spokesperson. An appropriately used celebrity can prove to be a massively powerful tool that

magnifies the effects of a campaign. But the aura of cautiousness should always be there. The

fact to be emphasized is that celebrities alone do not guarantee success, as consumers nowadays

understand advertising. They know what advertising is and how it works. People realize that

celebrities are being paid a lot of money for endorsements and this knowledge makes them

cynical about celebrity endorsements.

The four Qs:

Quick saliency: It gets cut through because of the star and his attention getting value.

GoodlassNerolac 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. KapilDev 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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And PreityZinta does all the above four for Perk -- connecting with the youth and reinforcing the

brand's youthful, spontaneous, energetic values.

In general celebrity endorsements are impelled by virtue of the following motives:

� Instant Brand Awareness and Recall.

� Celebrity values define, and refresh the brand image.

� Celebrities add new dimensions to the brand image.

� Instant credibility or aspiration PR coverage.

� Lack of ideas.

� Convincing clients.



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2. LITERATURE REVIEW

Although past research documents a general tendency for consumers to believe in the purity of

the motives of celebrity endorsers, it is likely that this tendency varies substantially both across

consumers and across endorsers. For example, Tripp showed that celebrities who endorse several

products are viewed as less credible endorsers than those who endorse only a single product. also

demonstrated that celebrities who are blamed for negative events (e.g. accidents) can have

detrimental effects on the products they endorse. In short, the effectiveness of a celebrity

endorser is dynamic, dependent on the celebrity, the product, and perhaps even societal

conditions at the time and place where the advertisement is shown. As such, it could be fruitful

to abandon the use of traditional measures of the celebrity endorser's trustworthiness or

credibility in general in favor of directly measuring the degree to which individuals evaluate the

celebrity as liking the endorsed product after viewing the advertisement. Such evaluations fit

under a class of judgment that has been referred to as ³correspondent inferences´ Correspondent

inferences more generally refer to any judgment in which observers use an individual's behavior

(e.g. an endorser saying that she loves Cheerios cereal) to infer congruent dispositions in that

individual (e.g. inferring that the endorser actually does love Cheerios cereal).

We propose that correspondent inferences are a direct measure of a celebrity's credibility in the

specific context of the advertisement, and thus should predict consumers' attitudes toward the

advertised product. H1. =Correspondent inferences will be positively associated with attitudes

toward the advertised product. Another interesting question in this context is whether consumers

will tend to make correspondent inferences about celebrity endorsers. Early social psychological

work in attribution theory suggests not ± a large endorsement fee should be viewed as a strong

incentive toward endorsement behavior, and thus observers should doubt that endorsements

reflect true liking for the product on the part of the endorser. However, research indicating that

celebrities are especially credible and trustworthy endorsers (e.g. Freiden, 1984) suggests that

consumers might believe celebrities like the product regardless of endorsement fees.

Furthermore, research examining a phenomenon called ³correspondence bias´ suggests that

observers are biased such that they tend to attribute behavior to personal characteristics of the

individual performing that behavior (e.g. liking for the product) even when situational factors

(e.g. endorsement fees) are sufficient to fully explain the behavior.



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3. RATIONALE STUDY



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4. RESEARCH OBJECTIVE

To study the impact of celebrity endorsement on consumer buying behavior.

4.1SUB-OBJECTIVES:

a) To understand consumer perception of the celebrities in advertisements.

b) To understand the effectiveness of celebrity endorsement.

5. RESEARCH METHEDOLOGY

5.1Hypothesis

H0: There is no significant impact of Celebrity Endorsement on Consumer buying behavior in

India.

5.2 Sampling & the Study

The Sample size of 100 customers will be collected from different areas.

5.3 Collection of Data

a) For data collection, I developed a well defined questionnaire as a research instrument,

consisting questions aimed to measure the consumers perception, their liking and disliking

and their views and comments about Celebrity Endorsement

b) Secondary Data will be collected from articles and journals.

6.TOOLS OR DATA ANALYSIS

Appropriate test will be applied later accordingly.



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7.REFERENCES

BOOKS:

1. Agrawal and Kamakura (1995) July, "The Economic worth of celebrity endorsers: An

event study analysis", Journal of Marketing, Vol 59, 56-62

2. Positioning: A battle for mind - Jack Trout and Al Ries

3. Tellis, Effective Advertising: Understanding When, How, and Why Advertising works

4. McCracken, Grant (1989), "Who is the Celebrity Endorser?" Journal of Consumer Research, 16 (December), 310-321.

5. Dean (1999), "Brand Endorsement, popularity, and Event Sponsorship as advertisingcues affecting consumer Pre purchase attitude", Journal of Advertising , Volume XXVIII, Number 3, 1-12

6. B. ZaferErdogan, Michael J. Baker and Stephen Tag (2001) June, "Selecting Celebrity

Endorsers: The Practitioner's Perspective", Journal of Advertising Research, 39-48

7. Tripp, Jensen and Carlson (1994) March, "The Effect of Multiple Product Endorsements

by Celebrities

WEB REFERENCES:

1. Article: ³The naked truth of celebrity endorsementÁuthor: Angela Byrne, Maureen Whitehead, Steven Breen.

2. Article: ³Celebrity Branding: not as glamorous as it looks´

Author: Chris Grannell and RuwanJayawardena.

3. Article: ³Celebrities Impact on BrandingÁuthor: Centre on Global Brand Leadership Columbia Business School

(Christina Schlecht)

4. Article: ³Selecting Celebrity Endorsers: The Practitioner's PerspectiveÁuthor: B. ZaferErdogan, Michael J. Baker, Stephen Tagg



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5. www.rediff.com ± article by Country head, O&M India

6. indiainfoline.com ± article 'Celebrity Endorsements in brands

7. http://timesofindia.indiatimes.com/articleshow/1507842.cms

8. http://www.merinews.com/catFull.jsp?articleID=18

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