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Impact of Celebrity Endorsement
TABLE OF CONTENTS
CHAPTER SUBJECT PAGE NO.
Ch.# 1.0 Introduction………………………….. 7
Ch.# 2.0 Research Methodology………………. 10
2.1 Primary Objective……………………. 11
2.2 Hypothesis…………………………… 12
2.3 Research Design…………………….. 12
2.4 Sample Design………………………. 13
2.5 Scope of the Study………………….. 14
2.6 Limitations…………………………… 14
Ch.# 3.0 Critical Review of Literature…………. 15
3.1 Communication Theories…………….. 16
3.2 Models in Celebrities Endorsement…… 21
Ch.# 4.0 Brand, Celebrity and Consumer……… 29
4.1 Brand…………………………………. 31
4.2 Celebrity……………………………... 32
4.3 Celebrity Endorsement……………….. 33
4.4 Celebrity and Brand…………………. 34
4.5 Understanding Consumer Behavior…. 34
Ch.# 5.0 The Advantages and Disadvantages of
using Celebrities as endorsers………… 39
Ch.# 6.0 Celebrity Endorsement- An Indian Perspective 47
Ch.# 7.0 Findings and Analysis………………… 51
Ch.# 8.0 Suggestions……………………. 60
Conclusion…………………………… 63
Ch.# 9.0 Bibliography and References………… 67
Annexure……………………………. 70
Ch.# 10.0 Case Study…………………………… 74
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3
ABSTRACT
The use of celebrities endorsing brands has been steadily increasing over the past 20 years or
so. Marketers visibly acknowledge the power of celebrity in influencing buyer's purchase
decision and thereby extending the market share of the company. They believe that likeability
or a favorable attitude towards a brand is created by the use of a celebrity. Different kinds of
celebrities are used for endorsement purpose, but two of the most common types are
entertainers and sports persons.
The purpose of this study is to understand the kind of impact these endorsements have on
consumers and there by on the brands. In order to achieve this purpose three research
questions have been considered:
Why and when do brands use celebrities as endorsers? What are the risks involved in celebrity
endorsements? What impact does celebrity endorsements have on consumer behavior?
Research uses primary source of data. The research tools applied for the analysis of data were
mainly statistical tools. The scope of the research is limited to the responses of 100 people
living in Delhi NCR region. On the basis of analysis and the interpretations of the results
obtained certain recommendations and conclusions have been derived from the research.
The main limitation of this research is that the scope of this research is limited to the response
of 100 people who will be filling the questionnaire and thus cannot be generalized for the
whole population.
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CHAPTER-1.0
INTRODUCTION
5
1.0 INTRODUCTION
It is a known fact that the best endorsements achieve an eclectic balance between the product
(brand) and the celebrity. Giving a brand a 'face' is more than just a marketing strategy to
increase sales or gain market share, it is a decision that can change the future of the brand
forever.
Choice of the celebrity, hence, is of utmost importance and is usually done based on many
different parameters - appeal, looks, popularity or even just a fantasy figure to endorse a
brand.
In today's highly competitive markets, big brands are at logger-heads when it comes to
products, each having a similar product to that of a rival. Where does one brand gain that
quintessential advantage - advertising, service, promise of trust, or even the all important price
factors? Advertising seems to be the best platform where brands prefer to compete on - right
from hiring the best advertising agencies to getting the biggest celebrities.
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.
India is a country where people are star-struck by film stars, cricketers, politicians, and even
criminals. Why? Populations of 1 billion and ticking, everyday people need something or
someone to look up to. A sense of security, admiration, comfort, familiarity, and above all,
someone they aspire to be at some hidden level in their lives. And clever marketers leverage
this very celebrity appeal and are successfully carrying out their jobs by giving the bottom
lines of all the brands what they want - profit, market share and even recall.
Now, despite the potential benefits derived from celebrity endorsements, they increase a
marketer's risk manifolds and should be treated with full attention and aptitude. A brand
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should be cautious when employing celebrities to ensure promise believability and delivery of
the intended effect. The growing importance of mythical characters as celebrities and their
sway over the target segments are ample proof of public demand for icons to look up to. 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.
At the end of the day, the questions that need to be answered are: does a company benefit from
a celebrity endorsement? Does anyone buy a product because a Bollywood or TV actor/actress
stands up and reads a script in somewhat convincing manner? Are their distinctions in how
consumers perceive these types of endorsements and respond to them? What happens when a
celebrity endorser gets involved in a public scandal, or worse, dies? Will the product lose
consumer support or perish?
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CHAPTER-2.0
RESEARCH METHODOLOGY
2.1 PRIMARY OBJECTIVE
2.2 HYPOTHESIS
2.3 RESEARCH DESIGN
2.4 SAMPLE DESIGN
2.5 SCOPE OF THE STUDY
2.6 LIMITATIONS
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2.0 RESEARCH METHODOLOGY
Research Methodology is the analysis of the principles of methods, rules, and postulates
employed by a discipline, the development of methods, to be applied within a discipline and a
particular procedure or set of procedures. It is the maneuver of doing research of particular
problem. This includes type of research, sampling method and data collection sources etc.
2.1 PRIMARY OBJECTIVE
The primary objective of this research is to analyze the effect of Celebrity Endorsement on
Consumer Behaviour.
SECONDARY OBJECTIVE
The secondary objectives of this research are as follows:
1. To examine why does the brand uses the celebrities as endorsers
2. To find out when does the brand uses the celebrities as endorsers
3. To find what are the various risk involved in using celebrities as endorsers
4. To examine whether Celebrity endorsement leads to brand enhancement or not
5. To find whether consumer focuses on their needs and cost factor or gets carried away
by brands enhanced by the famous people
6. To find the motivating factors that affects the buying decision of a consumer?
2.2 HYPOTHESIS
(H0)1 = Celebrity Endorsement does cast an impact on consumer buying behaviour
through advertisements.
(H1)1 = Celebrity Endorsement does not cast an impact on consumer buying behaviour
through advertisements.
2.3 RESEARCH DESIGN
A research design is the plan, structure and strategy of investigation conceived so as to obtain
to research problem and control variances. It is the specification of methods and procedures
for acquiring the information needed. It is overall operational pattern or framework of the
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project that stipulated what information is to be collected and from which source and by what
procedure.
Research design provides the glue that holds the research project together. A design is used to
structure the research, to show how all of the major parts of the research project -- the samples
or groups, measures, treatments or programs, and methods of assignment -- work together to
try to address the central research questions.
Type of research design- DESCRIPTIVE
The research is descriptive in nature. In this project report, firstly primary data was collected
regarding how a celebrity can help a consumer in identification of a product. A questionnaire
was then drafted for the same, to understand the psyche of the customers to know their needs,
expectations and their attitude, their liking and disliking and their views and comments about
Celebrity Endorsement and towards the brand that they see on various media mode.
On the basis of analysis of the result collected from the survey, certain conclusions have been
derived, which are clearly mentioned in detail in the later part of this project report.
2.4 SAMPLE DESIGN
Sample design is about choosing how many elements (businesses, people etc) to include in a
survey in order to provide a good basis for measuring economic and social phenomena.
Estimation is about producing aggregate information from data collection in samples. It
includes calculating quality measures based on sampling (sampling errors).
The procedure by which a few subjects are chosen from the universe to be studied in such as
way that the sample can be used to estimate the same characteristics in the total is referred to
as sampling.
The data collected is in the form of a questionnaire as primary data and certain studies which
have already been conducted are also considered which will be used as secondary data.
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Type of sample design- CONVEYNCE
The research is to be based on non probability sampling technique which attempts to obtain a
sample of convenience element. The survey conducted involves a sample of 100 elements.
2.5 SCOPE OF THE STUDY
The research conducted attempts to find out the effect of celebrity endorsement on consumer
buying decision. In order to achieve this purpose a survey has been conducted which include
100 elements from Delhi NCR region.
Thus the scope of the study is limited to the response of 100 elements only.
2.6 LIMITATIONS
Research project are hindered in their smooth flow by some unforeseen problems. The
problems arise in the form of constraints with time and scope of study. Some of the limitations
in the course of research are as follows-
Sampling error- the research included a small sample size, which can not determine the
characteristics of the total population.
Limited time- since we are restricted to just four months to cover the work, which is
less to undergo the entire study.
At times the information given by the respondents were found to be contradicting in
nature.
Also, sometimes the respondents were reluctant to give their time in order to fill the
questionnaire.
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CHAPTER-3.0
CRITICAL REVIEW OF LITERATURE
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3.1 COMMUNICATION THEORIES:
3.1.1 The one step communication model
3.1.2 The two step flow model
3.1.3 Elements of communication
3.2 MODELS IN CELEBRITY ENDORSEMENT
3.2.1 Source Credibility Model
3.2.2 Source Attractiveness Model
3.2.3 Product Match-up Model
3.2.4 Meaning Transfer Model
When researchers first began to study mass communication, they thought that media was all-
powerful. They developed the ONE STEP FLOW also called the HYPODERMIC NEEDLE
MODEL. In this model, media is seen as a powerful hypodermic needle that injects
information directly into the mind of the masses, which are eager to receive it. This way the
masses would know what they were told to know and do what they were told to do through the
power of mass communication.
MEDIA
The "hypodermic needle theory" implied mass media had a direct, immediate and powerful
effect on their audiences. In the 1940s and 1950s mass media were perceived as a powerful
influence on behavior change. Several factors contributed to this "strong effects" theory of
communication, including: the fast rise and popularization of radio and television, and the
emergence of the persuasion industries, such as advertising and propaganda.
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3.1.2 THE TWO STEP FLOW MODEL
By the year 1940, researchers realized that there was more to simple mass communication
cause and effect model. They became aware that while people do get some of their
information from the media directly, it wasn’t the media alone that made them act.
While the mass communication does have some effect, the strongest influence comes from the
interpersonal communication, especially from the people which the researchers called opinion
leaders.
An opinion leader as a peer to whom others turn for information and influences the opinion of
others. Opinion leaders gather the information from the media and other resources, synthesize
it, think about it and pass it on to others.
This was shown in the TWO STEP FLOW MODEL developed by KATZ and LAZARFELD
in 1955. This model shows information flowing from the media to opinion leaders and from
them to the masses.
The above model shows that the information does not flow directly from the text into the
minds of its audience unmediated but is filtered through "opinion leaders" who then
communicate it to their less active associates, over whom they have influence. The audience
then mediates the information received directly from the media with the ideas and thoughts
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expressed by the opinion leaders, thus being influenced not by a direct process, but by a two
step flow.
The idea of opinion leader became very important, especially for professional communicators
who were trying to influence the opinions and actions of large number of people. There are
two types of opinion leaders:
Formal opinion leaders are people whose opinion is valued because they hold an
important office or position for example film stars, sports celebrities, politician etc
Informal opinion leaders are people who just have a strong influence on the opinions
of their peers.
When a celebrity endorses a product through a mass medium, the form of communication is
considered to be interpersonal as he or she seems to influencing the customer directly into
purchasing a product by giving his or her opinion about it. Since people relate to such
celebrities and are deeply impacted by their endorsements, these celebrities can easily be
categorized as opinion leaders. Therefore there are cases where people get lured into buying a
product without knowing its true characteristics.
3.1.3 THE COMMUNICATION PROCESS AND ITS ELEMENTS:
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The above diagram represents the actual communication process. As can be seen there eight
elements to any communication process. They are explained below:
SENDER: The sender is the source from where the information originates. There can
be many people involved in originating the information; it can range from 1-2
individuals to a large organization depending upon the type of communication process
involved
ENCODING: The message so generated by the sender has to be passed to the receiver.
The process of putting thought into symbolic form is called as encoding.
MESSAGE: The message is the actual idea which the sender wants to transmit to the
receiver. The message can be verbal or non verbal. It should be such that it is easily
understandable and transmittable through the channel of communication being used.
CHANNEL: A channel is the medium through which the message is send by the
sender to the receiver. The channel used can be audio, visual or audio visual medium.
The channel used should be in accordance to the message.
DECODING: The message so sent by the sender has to be transferred into a form
which is easily understandable by the receiver. The decoding of the message greatly
depends upon the social environment
RECEIVER: The receiver is the person/persons to whom the message is directed at. In
mass communication receivers are large in number and thus are self directed.
RESPONSE and FEEDBACK: Response is a set of reactions that the receiver has after
being exposed to the message.
Feedback is an important part of the communication process, as without it the sender
would not be able to make out if the receiver has been able to interpret the message in
the way it was intended. And on this basis sender modifies his/her message.
NOISE: Noise is the unplanned hindrances in the way of the communication process
due to which receiver receives a different message then that send by the sender. Noises
can be of three kinds: semantic, environmental and mechanical.
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3.2 MODELS IN CELEBRITY ENDORSEMENTS
Whilst there is a growing interest in the literature regarding celebrity endorsement, most of the
work can be classified into the following four theory areas. These include “Source Credibility
Model”, “Source Attractiveness Model”, “Match up Proposition” and “Meaning Transfer
Model”.
3.2.1 SOURCE CREDIBILITY MODEL
“Source Credibility” in a broad sense, refers to a communicator’s positive characteristics that
affect the receiver’s acceptance of a message” (Ohanian 1990, p. 41) and rests on the research
in social psychology. The ‘Source Credibility Model’ is generally considered to have two
main dimensions; namely “Trustworthiness” (the audience's degree of confidence in and
degree of acceptance of the speaker and the message) and “expertness” (the extent to which a
communicator is perceived to be a source of valid assertions). This model suggests that the
effectiveness of a message depends upon how the consumers perceive the endorser (Hovland
et al. 1953).
Previous research established a link between expertise and persuasiveness. An expert celebrity
tends to be more persuasive and generates a higher willingness to buy the brand by consumers.
Furthermore, research has also demonstrated the positive effect of trustworthiness on attitude
change. In a research study McGinnies and Ward (1980) found that an expert a trustworthy
source generated the strongest opinion change by consumers and the trustworthy
communicator was persuasive whether an expert or not (Ohanian 1990). Till and Busler
(2000) found the expertise dimension to be more important than physical attraction as a
match-up factor. Kamins, et al. (1989) indirectly supported source credibility model. In their
study, enhanced credibility and effectiveness was reflected in overall higher ratings on
perceived quality of service and respondents also revealed greater purchase intentions.
It should be noted that it is often difficult to define “source credibility” in exact terms. This is
because of different operationalisations and use of different labels and terminology such as
ethos, prestige, reputation, authority and competence by different researchers and authors
(Ohanian 1990 p. 41). Ohanian’s (1990) study is considered to be a key research paper in the
17
area of celebrity endorsement. Her three factors fifteen-item credibility scale has been widely
accepted and replicated by other researchers. Using two exploratory and two confirmatory
samples, Ohanian (1990) developed a fifteen-item semantic differential scale to measure
perceived expertise, trustworthiness and attractiveness. Four celebrities and four products
were selected and to purify and validate the scale. The whole study was divided in two stages.
In the exploratory stage, after assessing the level of familiarity (with Madonna and John
McEnroe), respondents were asked to evaluate 72 semantic differential items. These were
reduced to 27 items representing three dimensions (expertise, trustworthiness and
attractiveness) by factor analysis. Finally, in order to obtain a practical size of five items per
factor, the items with the lowest item-to-total correlations were eliminated while maintaining
an acceptable level of reliability. In the confirmatory analysis, five items per subscale (total of
15 items) along with some other validation items were used to assess the final scale’s
reliability and validity. Two adult samples (138 and 127) and two different celebrities (Linda
Evans and Tom Selleck) were used to support the generalizability of the scale. Following table
represents the final three dimensions source credibility scale.
Source: Construction and Validation of a Scale to Measure Celebrity Endorsers’ Perceived
Expertise, Trustworthiness, and Attractiveness; Ohanian (1990).
Table 2.1 Source-Credibility Scale
3.2.2 SOURCE ATTRACTIVENESS MODEL
Source Attractiveness Model; considered to be a component of the “source valance” model
(McGuire 1985) and draws on the research in social psychology. The source attractiveness
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model is mainly based on four dimensions; namely “familiarity” (knowledge of source
through exposure), “likeability” (affection for source based on his/her physical appearance or
behaviour), “similarity” (resemblance between the source and the audience), and
“attractiveness”. It suggests that effectiveness of the message depends on these four
dimensions. Sources that are familiar, likeable and/or similar to the consumers are attractive
and to this extent persuasive (Ohanian 1990).
Empirical findings posit that physical attractiveness is one of the key factors in an individual’s
initial judgment of another individual as well as influencing attitude change
(Baker and Churchill 1977; Caballero and Pride 1984; Chaiken 1979; Joseph 1982; Mills and
Aronson 1965). Attractive models led to more favorable attitudes toward the advertisement
and stronger purchase intentions. Physical attractiveness of the celebrity endorser was found to
influence subject recall, product attitudes and purchase intention to a greater extent than
endorser likeability or level of product involvement (Kahle and Homer 1985).
3.2.3 PRODUCT MATCH-UP MODEL
The “Celebrity-Product Match” proposition holds that in order to make an advertisement
effective, there should be congruence between the product and the celebrity in terms of
characteristics such as image, expertise or attractiveness. The Match-up model states that
attractive endorsers are more effective when promoting products used to enhance one’s
attractiveness (Kamins 1990) and that the impact will not be significant in the case of an
attractiveness unrelated product. Findings for the research studies conducted by Baker and
Churchill (1977), Friedman and Friedman (1979), Joseph (1982) and Kahle and Homer (1985)
demonstrated consistent results.
Kahle and Homer (1985) found that in the case of attractiveness related products, the use of
physical attractive celebrities increased subject recall, product attitudes, and purchase
intention. However, they did not demonstrate that an attractive celebrity is less effective when
endorsing a product not used to enhance one’s attractiveness, such as home computers.
Kamins (1990) set up a full test of the match-up proposition. He paired attractive and
unattractive celebrities with either attractiveness related or unrelated products. He paired a
19
celebrity with a product and found interaction effect between attractiveness and product type.
Predicted interaction was found for “spokesperson credibility” and “attitude toward the
advertisement” but not for “brand attitude” or “purchase intention”. Erdogan et al. (2001)
investigated practitioner’s perspective and found that while selecting celebrity endorsers,
managers considered a number of factors. Consistent to meaning transfer model (McCracken
1989), managers view the celebrity as a multidimensional personality with a bundle of
meanings. Moreover, the study demonstrated that there should be a proper fit between
celebrity characteristics and product types. Implicitly, they supported the product-match up
proposition. Agencies considered congruence, credibility, profession, popularity, and
obtainability issues to be more important while deciding upon a celebrity. They also rated
trustworthiness and expertise more important in the case of technical/attractiveness-unrelated
product (Erdogan et al. 2001). On the other hand, they indicated that celebrity’s physical
attractiveness, familiarity and likeability were more important for a non-technical or
attractiveness-related product.
Till and Busler (1998, 2000) examined attractiveness versus expertise as a relevant match-up
factor and found a general attractiveness effect on brand attitude and purchase intent but no
match-up effect was found based on attractiveness. Based on their findings, Till and Busler
proposed that though attractiveness is important, expertise is more appropriate for matching
products with a celebrity endorser.
3.2.4 MEANING TRANSFER MODEL
McCracken (1989) addressed the endorsement process from a cultural perspective. He argued
that the endorsement process depends upon the symbolic properties of the celebrity endorser
and the celebrity served the endorsement process by taking on the meanings that then carry
from advertisement to advertisement. McCracken has described the Celebrity Endorsement
process as a special instance of a more general meaning transfer (McCracken 1986;
McCracken 1989). In the model, cultural meanings move through a conventional path to
individual consumers. Meanings begin as something inherent and resident in the culturally
constituted, physical, and social world. Meanings move from culturally constituted world to
consumer goods through advertising and fashion systems and than it is transferred to
20
individual consumer through the efforts of the consumer. Thus, meaning keeps on circulating
in the consumer society (McCracken 1986; McCracken 1989).
McCracken (1989)’s meaning transfer theory has direct implications for the celebrity
endorsement process. He argues that for the purpose of communication, a celebrity has a set of
fictional roles and when consumers respond to celebrity’s specific characteristic, they are in
fact responding to a very particular set of meanings. A celebrity is a persuasive communicator
not only because of being attractive or credible but also because he/she has made up certain
meanings the consumer finds compelling and useful. The effectiveness of the endorser
depends upon the meanings he or she brings to the endorsement process.
McCracken has described the whole Meaning Transfer Process in three stages. As shown in
figure in the initial stage, the meanings generated from distant movie performances, political
campaigns, or athletic achievements and performance, reside in celebrities themselves. In the
second stage, meanings are transferred to the product through advertisement and the
endorsement process. In the third stage the meanings are transferred from the product to the
consumer where the properties of the product become the properties of the consumer
(McCracken 1989).
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3.3 CELEBRITY ENDORSEMENT STRATEGY
Marketers generally use individuals who have achieved some form of celebrity status for their
companies to serve as spokespersons. Most of the people that are hired by any company to
pitch their products or services are popular people that can be movie stars, entertainers,
athletics, or pop-stars, and occasionally a politician or some other well-known public figure
may be used (Belch & Belch, 2001). Further, when a company decides upon using an
endorsement strategy for their marketing communication tool, the main focus lies in exposing
their brand (Kotler, Armstrong, Saunders, & Wong, 2001).In an endorsement strategy a new
sort of product is given a new brand name that is unique for that product (Riezebos,
2003).along with the unique brand name, companies also get provided with the name of an
endorser. In such case, the endorser is a celebrity and function is endorsement which means an
approval or support that can be seen as a guarantee or recommendation to the consumers.
According to Riezebos (2003) it is only advisable to use endorsers for brands if there is a high
level of brand-added value. This means that the name of the endorser should be clearly visible
next to the name of the branded article.
Companies have jointly been using their brands and their own name, through the use of
celebrity endorsers, in a hope that celebrities might boost effectiveness of their marketing
attempts in the long-term (Belch & Belch, 2001).Basically, a company is trying to send
various types of information to their target audience.
In order to be able to develop an effective advertising and promotional campaign, a company
has to select their endorser who are appropriate to different channels and media (Till & Shimp,
1998),such as source, message, and receiver (Belch & Belch, 2001).Thus, the brand can be
seen as the message the company is trying to send to their audience. Moreover, the source
which is intended to send this message in an endorsement strategy becomes the celebrity and
the receiver in the communication process becomes the consumer (Belch & Belch, 2001)
22
CHAPTER-4.0
BRAND, CELEBRITY AND CONSUMER
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4.1 B RAND
4.2 CELEBRITY
4.3 CELEBRITY ENDORSEMENT
4.3.1 Types of Celebrity Endorsements
4.4 CELEBRITY AND BRAND
4.4.1 Celebrity Brand Compatibility
4.5 UNDERSTANDING CONSUMER BEHAVIOUR
4.5.1 Consumer Decision Making Process
4.5.2 Impact of Brand on Consumer Decision Making Process
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4.0 BRAND, CELEBRITY AND CONSUMER
4.1 BRAND:
Brand is the proprietary visual, emotional, rational and cultural image that a consumer
associates with a company or the product. Few examples to clarify its meaning are Amul -
utterly butterly delicious; Coke – thanda matlab coca-cola; Pepsi – Yeh dil mange more;
Kurkure- Masti bole to kurkure.
The above examples convey one message that when people watch these advertisements a
connection is created which results in people wanting to go for the experience of buying.
People feel that by using the brand, they will receive certain traits or characteristics that they
otherwise do not have, thus generating sense of fulfillment.
Advertisements enforce what exactly the brand stands for and what to expect by its
consumption and also what all factors, features and attributes makes it better and different
from its competition. Advertisements force people to think about what they see or hear. This
gets enhanced when a celebrity endorses the brand. The subjective intangible feelings of a
customer become objective and tangible in the form of celebrity and the level of expectations
rises.
4.2 CELEBRITY:
Celebrities are people who enjoy public recognition and are the experts of their respective
fields having wider influence in public life and societal domain. Attributes like attractiveness,
extraordinary life style or special skills, larger than life image and demigod status can be
associated with them.
Celebrities appear in public in different ways. They appear in public when fulfilling their
professional commitments or they appear in public by attending special celebrity events.
Celebrities have universal presence and appeal, and are present everywhere, in news, fashion
shows and magazines, tabloids and above all advertisements.
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4.3 CELEBRITY ENDORSEMENT:
McCracken's (1989) definition of a celebrity endorser is, "any individual who enjoys public
recognition and who uses this recognition on behalf of a consumer good by appearing with it
in an advertisement (marcoms), is useful, because when celebrities are depicted in marcoms,
they bring their own culturally related meanings, thereto, irrespective of the required
promotional role."
Friedman and Friedman (1979) found empirical evidence that, in the promotion of products
high in psychological and/or social risk, use of celebrity endorser would lead to greater
believability, a more favorable evaluation of the product and advertisement, and a
significantly more positive purchase intention.
Thus, companies use celebrities to endorse their products; however, there are deeper attributes
that are involved in celebrity endorsement. Celebrities might endorse as a brand ambassador
or a brand face.
4.3.1 Types of Celebrity Endorsements
Celebrity branding has many aspects. A slight change in the type of branding used can result
in either a great success or a dismal failure. Celebrity branding falls into five general
categories:
Testimonial: The celebrity acts as a spokesperson for the brand.
Imported: The celebrity performs a role known to the audience.
Invented: The celebrity plays a new, original role.
Observer: The celebrity assumes the role of an observer commenting on the brand.
Harnessed: The celebrity's image is integrated with the ad's storyline.
4.4 CELEBRITY AND BRAND:
According to Advertising research companies that actors bring reliability and trust in the brand
and above all, they help in increasing the sales revenues. Celebrity endorsements are powerful.
26
This power is offered by the following elements, which also creates a 'Top of the Mind
Position'.
Instant Awareness, knowledge about the brand and easy recall.
Values and image of the brand is defined, highlighted and refreshed by the celebrity.
The celebrity adds new edge and dimension to the brand.
Credibility, trust, association, aspiration and connectivity to brand.
Belief in efficiency and new appearance that will result in at least trial usage.
4.4.1 Celebrity and Brand Compatibility:
A celebrity is used to impart credibility and aspirational values to a brand, but the celebrity
needs to match the product. A good brand campaign idea and an intrinsic link between the
celebrity and the message are musts for a successful campaign. Celebrities are no doubt good
at generating attention, recall and positive attitudes towards advertising provided that they are
supporting a good idea and there is an explicit fit between them and the brand. On the other
hand, they are rendered useless when it comes to the actual efficiency of the core product,
creating positive attitudes to brands, purchase intentions and actual sales.
Certain parameters that postulate compatibility between the celebrity and brand image are:
Celebrity’s fit with the brand image.
Celebrity—Target audience match
Celebrity associated values.
Costs of acquiring the celebrity.
Celebrity—Product match.
Celebrity controversy risk.
Celebrity popularity.
Celebrity availability.
Celebrity physical attractiveness.
Celebrity credibility.
Celebrity prior endorsements.
Whether celebrity is a brand user.
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4.5 UNDERSTANDING CONSUMER BEHAVIOUR
Consumer Behavior is the study of how people buy, what do they buy, when do they buy and
why do they buy. It blends elements from psychology, sociology, socio-psychology,
anthropology and economics. It tries to understand the buyer decision-making process, both
individually and in groups. It studies the characteristics of individual consumers such as
demographics, psychographics, and behavioral variables in an attempt to understand people's
wants and also assess influences on the consumer from various groups such as family, friends,
reference groups, and society in general.
The study and knowledge of consumer behavior is essential to the firms as it helps them to
improve their marketing strategies and product offerings. Following are some of the important
issues that have significant influence on consumer's psyche that affects their buying
behaviour:
The psychology of how consumers think, feel, reason, and select between different
alternatives (e.g., brands, products);
The psychology of how the consumer is influenced by his or her environment (e.g.,
culture, family, signs, media);
Limitations in consumer knowledge or information processing abilities influence
decisions and marketing outcome;
How consumer motivation and decision strategies differ between products that differ in
their level of importance or interest that they entail for the consumer; and
How marketers can adapt and improve their marketing campaigns and marketing
strategies to more effectively reach the consumer.
Their Age, Religion, Culture, Income, informal group and Referent Group.
4.5.1 Consumer Decision Making Process:
28
The above process is explained here:
The first step to consumer buying process starts with problem recognition or with an
unsatisfied need of a consumer. Something, that a consumer would like to have or purchase in
order to attain satisfaction. This need can be Psychological, attitudinal or Physiological.
The next stage includes the ability to purchase, level of involvement, people whose opinion
will count and other relevant details that will help in optimizing the consumer satisfaction.
Based upon information search various alternatives are generated i.e. which brand or product
is affordable to the consumer, where will it be comfortably available and in comparison to
other brands or products how better or economical it is.
29
The next stage is the Evaluation stage which takes into consideration cost benefit analysis and
based upon maximum value or utility per rupee spend, consumer decides or shortlist the
product or brand. This is the decision and confirmation stage where the consumers prepares
him for the purchase of a particular brand and give preference to one and only one over and
above the others.
Next stage in the consumer decision making process is the purchase when the consumer
finally goes to the market and looks for the brand or the product, physically verifies it and
purchases it.
Last stage is the post purchase Evaluation in which the customer justifies his consumption or
purchase decision. He tries to find out whether his purchase decision was right or not.
Companies make a lot of effort to tackle this situation successfully and they want the customer
to be satisfied with their product.
The last stage may result into three situations:
Satisfaction where customer is satisfied as he got expected results but this does not
necessitates the repeat purchase by the consumer.
Dissonance where the consumer is not satisfied as he got less utility or less than
expected result from the consumption or product performance.
Delight where the consumer gets more than expected satisfaction and utility and this
will assure the repeat purchase and creation of brand loyalty.
4.5.2 Impact of Brand on Consumer Decision Making Process
Research studies have proven that known products and names are sold more than unknown
ones. Therefore, a known brand or an optimally exposed brand will find more recognition and
buyers in the market in comparison to completely unknown or unexposed brand. Recognition
of brand and its significance along with the traditional factors plays a very significant role in
consumer decision-making process.
30
The above given model explains the important role that a brand plays in three different stages
of consumer's purchase decision making. A consumer start collecting data or information
about his favorite brand, than he keeps his favorite as one of the alternatives and he evaluate
his selected brand against all available options and on finding it suitable or best among all
options, based upon a qualitative and quantitative evaluation he ultimately purchases the
selected or favorite brand.
31
CHAPTER-5.0
THE ADVANTAGES AND DISADVANTAGES OF USING CELEBRITY AS
ENDORSERS
32
5.0 THE ADVANTAGES AND DISADVANTAGES OF USING CELEBRITY AS
ENDORSERS
The Argument for Celebrity Endorsement
Brands have been leveraging celebrity appeal for a long time. Across categories, whether in
products or services, more and more brands are banking on the mass appeal of celebrities. As
soon as a new face ascends the popularity charts, advertisers queue up to have it splashed all
over. Witness the spectacular rise of Sania Mirza and Irfan Pathan in endorsements in a matter
of a few months. The accruement of celebrity endorsements can be justified by the following
advantages that are bestowed on the overall brand:
Establishment of 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.
We had the Shah Rukh-Santro campaign. At launch, Shah Rukh Khan endorsed Santro
and this ensured that brand awareness was created in a market, which did not even
know the brand.
Ensured Attention: Celebrities ensure attention of the target group by breaking the
clutter of advertisements and making the ad and the brand more noticeable.
PR Coverage: is another reason for using celebrities. Managers perceive celebrities as
topical, which create high PR coverage. A good example of integrated celebrity
campaigns is one of the World’s leading pop groups, the Spice Girls, who have not
only appeared in advertisements for Pepsi, but also in product launching and PR
events.
Time Saving: Celebrity is able to build brand credibility in a short period of time.
Higher Degree of Recall: People tend to commensurate the personalities of the
celebrity with the brand thereby increasing the recall value. Golf champion Tiger
Woods has endorsed American Express, Rolex, and Nike. Actress Catherine Zeta-
Jones is used by T-Mobile and Elizabeth Arden. 007 Pierce Brosnan promotes Omega,
BMW, and Noreico.
33
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.
Mitigating a Tarnished Image: Cadbury India wanted to restore the consumer's
confidence in its chocolate brands following the high-pitch worms controversy; so the
company appointed Amitabh Bachchan for the job. Last year, when the even more
controversial pesticide issue shook up Coca-Cola and PepsiCo and resulted in much
negative press, both soft drink majors put out high-profile damage control ad films
featuring their best and most expensive celebrities. While Aamir Khan led the Coke
fight back as an ingenious and fastidious Bengali who finally gets convinced of the
product's `purity,' PepsiCo brought Shah Rukh Khan and Sachin Tendulkar together
once again in a television commercial which drew references to the `safety' of the
product indirectly.
Psychographic Connect: Celebrities are loved and adored by their fans and
advertisers use stars to capitalize 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.
Providing Testimony: Another benefit of using celebrity endorsers is that s/he can
provide testimony for a product or service, particularly when the product has
contributed to their celebrity. The more familiar an endorser, the more likely
consumers are to buy the endorsed product.
Rejuvenating a Stagnant Brand: With the objective of infusing fresh life into the
stagnant chyawanprash category and staving off competition from various brands,
Dabur India roped in Bachchan for an estimated Rs 8 crore.
Celebrity endorsement can sometimes compensate for lack of innovative ideas.
34
The Argument Against Celebrity Endorsement
The Reputation of the Celebrity May Derogate After he/she has Endorsed the
Product: Pepsi Cola's suffered with three tarnished celebrities - Mike Tyson,
Madonna, and Michael Jackson. Since the behaviour of the celebrities reflects on the
brand, celebrity endorsers may at times become liabilities to the brands they endorse.
The Vampire Effect: This terminology pertains to the issue of a celebrity
overshadowing the brand. If there is no congruency between the celebrity and the
brand, then the audience will remember the celebrity and not the brand. Examples are
the campaigns of Dawn French—Cable Association and Leonard Rossiter—Cinzano.
Both of these campaigns were aborted due to celebrities getting in the way of effective
communication. Another example could be the Castrol commercial featuring Rahul
Dravid.
Inconsistency in The Professional Popularity of The Celebrity: The celebrity may
lose his or her popularity due to some lapse in professional performances. For
example, when Tendulkar went through a prolonged lean patch recently, the inevitable
question that cropped up in corporate circles - is he actually worth it? The 2003 Cricket
World Cup also threw up the Shane Warne incident, which caught Pepsi off guard.
With the Australian cricketer testing positive for consuming banned substances and his
subsequent withdrawal from the event, bang in the middle of the event, PepsiCo - the
presenting sponsor of the World Cup 2003 - found itself on an uneasy wicket
Multi Brand Endorsements: by the same celebrity would lead to overexposure: The
novelty of a celebrity endorsement gets diluted if he does too many advertisements.
This may be termed as commoditisation of celebrities, who are willing to endorse
anything for big bucks. Example, MRF was among the early sponsors of Tendulkar
with its logo emblazoned on his bat. But now Tendulkar endorses a myriad brands and
the novelty of the Tendulkar-MRF campaign has scaled down.
Celebrities Endorsing one Brand and Using another (competitor): Sainsbury’s
encountered a problem with Catherina Zeta Jones, whom the company used for its
recipe advertisements, when she was caught shopping in Tesco. A similar case
35
happened with Britney Spears who endorsed one cola brand and was repeatedly caught
drinking another brand of cola on tape.
Mismatch Between the Celebrity and the Image of the Brand: Celebrities manifest
a certain persona for the audience. It is of paramount importance that there is an
egalitarian congruency between the persona of the celebrity and the image of the
brand. Each celebrity portrays a broad range of meanings, involving a specific
personality and lifestyle. Madonna, for example, is perceived as a tough, intense and
modern women associated with the lower middle class. The personality of Pierce
Brosnan is best characterized as the perfect gentlemen, whereas Jennifer Aniston has
the image of the ‘good girl from next door’.
36
CHAPTER-6.0
CELEBRITY ENDORSEMENT- AN INDIAN PERSPECTIVE
37
6.0 CELEBRITY ENDORSEMENT- AN INDIAN PERSPECTIVE
The latter part of the '80s saw the burgeoning of a new trend in India– brands started being
endorsed by celebrities. Hindi film and TV stars as well as sportspersons were roped in to
endorse prominent brands. Advertisements, featuring stars like Tabassum (Prestige pressure
cookers), Jalal Agha (Pan Parag), Kapil Dev (Palmolive Shaving Cream) and Sunil Gavaskar
(Dinesh Suitings) became common. Probably, the first ad to cash in on star power in a
strategic, long-term, mission statement kind of way was Lux soap. This brand has, perhaps as
a result of this, been among the top three in the country for much of its lifetime.
In recent times, we had the Shah Rukh-Santro campaign with the objective of mitigating the
impediment that an unknown Korean brand faced in the Indian market. The objective was to
garner faster brand recognition, association and emotional unity with the target group. Star
power in India can be gauged by the successful endorsement done by Sharukh for three
honchos- Pepsi, Clinic All Clear and Santro. Similarly, when S Kumars used Hrithik Roshan,
then the hottest advertising icon for their launch advertising for Tamarind, they reckoned they
spent 40 - 50 per cent less on media due to the sheer impact of using Hrithik. Ad recall was as
high as 70 per cent, and even the normally conservative trade got interested.
In the Indian context, it would not be presumptuous to state that celebrity endorsements can
aggrandize the overall brand. We have numerous examples exemplifying this claim. A
standard example here is Coke, which, till recently, didn't use stars at all internationally. In
fact, India was a first for them. The result was a ubiquitously appealing Aamir cheekily stating
Thanda matlab Coca Cola. The recall value for Nakshatra advertising is only due to the
sensuous Aishwarya. The Parker pen brand, which by itself commands equity, used Amitabh
Bachchan to revitalize the brand in India. According to Pooja Jain, Director, Luxor Writing
Instruments Ltd (LWIL), post Bachchan, Parker's sales have increased by about 30 per cent.
India is one country, which has always idolized the stars of the celluloid world. Therefore it
makes tremendous sense for a brand to procure a celebrity for its endorsement. In India there
is an exponential potential for a celebrity endorsement to be perceived as genuinely relevant,
38
thereby motivating consumers to go in for the product. This would especially prove true if the
endorser and the category are a natural lifestyle fit like sportspersons and footwear, Kapil-
Sachin and Boost or film stars and beauty products.
SOME GLOBAL EXAMPLES:
Globally, firms have been juxtaposing their brands and themselves with celebrity endorsers.
Some successful ongoing global endorsements are as follows:
Celebrity endorsements have been the bedrock of Pepsi's advertising. Over the years,
Pepsi has used and continues to use a number of celebrities for general market and
targeted advertising, including Shaquille O'Neal, Mary J. Blige, Wyclef Jean, and
Busta Rhymes, who did a targeted campaign for their Mountain Dew product.
George Foreman for Meineke. He has also sold more than 10 million Lean Mean Fat--
Reducing Grilling Machines since signing with the manufacturing company.
James Earl Jones for Verizon and CNN.
Nike golf balls, since the company signed Tiger Woods in 1996, have seen a $50
million revenue growth. Nike's golf line grossed more than $250 million in annual
sales. In 2000 he renegotiated a five-year contract estimated at $125 million.
Other successful endorsements like Nike—Michael Jordan, Dunlop—John McEnroe,
Adidas—Prince Naseem Hamed, and so on.
Venus Williams, tennis player and Wimbledon champion has signed a five-year $40
million contract with sportswear manufacturer Reebok International Inc.
39
CHAPTER-7.0
FINDINGS AND ANALYSIS
40
AGE PROFILE
Age group Percentage of people
18-25yrs 66%
25-35 yrs 28%
35-50 yrs 6%
Above 50 yrs 0
This research project is based on the responses of people belonging to the age group of 18 to
25 years of age, around 28% belongs to the age group of 25 to 35 years of age and only 6%
belongs to the category of 35 to 50 years of age group.
Therefore this research project is based on the perception of youth. That is how the consumer
belonging to this age group reacts to the celebrity endorsement strategies taken by the
companies.
GENDER PROFILE
PERCENTAGE
52%48% MALE
FEMALE
The number of respondents taken to fill this questionnaire has been equally divided into males
and females, so that there is no biasness between the responses. Due to this reason perceptions
of both the gender have been taken into consideration.
41
ARE ADVERTISEMENTS INFORMATIVE?
10%
90%
yesno
According to the survey done it can be inferred that most of the consumers feel advertisements
are very informative, whether they are in any form i.e. media, newspaper, magazines etc.
Majority of people thinks that advertisement helps them to get the brief information about the
product even before its launch. As a result it influences their buying decision to some extent.
WHAT FACTORS AFFECT A CONSUMER BUYING DECISION
Motivating factors to buy a product
020406080
100120
Mostimportant
factor
2ndimportant
factor
3rdimportant
factor
4thimportant
factor
leastimportant
factor
degree of importance
% o
f res
pond
ents celebrity endorsement
Latest trends
Discounts and offers
Quality
Price
According to the survey, it can be concluded that majority of consumers (44%) give utmost
importance to quality while going for a particular product, followed by price, discounts, offers
etc. While celebrity endorsement is the least important feature that most of the consumers
(44%) consider while making their purchase decision. Thus latest trends and celebrity
42
endorsement does not play such an important role in influencing a consumer’s buying decision
as compared to other factors.
DOES CELEBRITIES CAST IMPACT?
Do celebrities cast impact through advertisement
88%
12%
yes no
From the above chart it can be concluded that celebrities cast impact through advertisement.
88% of respondents feel that Celebrities ensure attention of the target group by breaking the
clutter of advertisements and making the ad and the brand more noticeable. Besides this,
people perceive celebrities as topical, which create high PR coverage.
Thus the above graph proves that in the Hypothesis, Null Hypothesis is accepted, that is
“Celebrity Endorsement does cast an impact on consumer buying behaviour through
advertisements”. And Alternate Hypothesis is rejected.
IF YES, THEN HOW?
if yes, how?
50%
30%
20%Attracts attention
Build desire tohave a productinitiate an action tobuy a product
43
Attracting attention, building desire to have a product and initiating an action to buy a product
are the various basis through which celebrities cast impact through advertisement. Majority of
the respondents are of the view that celebrities attract the attention of their target group.
People tend to commensurate the personalities of the celebrity with the brand thereby
increasing the recall value. Whereas 26% people think that celebrity of their choice build
desire in them to make a purchase. Some stars have a universal appeal and therefore prove to
be a good bet to generate interest among the masses.
CELEBRITIES HELP IN INCREASING THE MARKET SHARE?
Do celebrities help in increasing the market share of the company
52%34%
14%AlwayssometimesNever
On the basis of the survey it can be inferred that celebrities helps in increasing the market
share of the company. 52% of people support this point. Besides this, it also helps in
rejuvenating a stagnant brand. Whereas, 34% of people thinks the other way round. According
to them they (celebrities) not always help in increasing the share of company i.e. the
reputation of the celebrity may derogate after he/she has endorsed the product.
DOES CELEBRITIES USE THE PRODUCT THEY ENDORSE?
44
Do celebrities use the product they endorse
12%
82%
6%
yesno cant say
According to the responses in the questionnaire, 82% of the respondents believe that
celebrities do not use the product that they endorse. 12% of them believe that the celebrities
does use the products so endorsed by them in their daily lives. And 6% are not sure whether
the celebrities use the products they endorse or they do not. Thus we can conclude that in
today’s world consumers are educated and do not get carried away by the celebrities they see
endorsing the product.
IS IT ETHICAL TO ENDORSE A PRODUCT NOT USED BY CELEBRITIES?
if no, is it ethical?
26, 63%
15, 37% no yes
This chart shows whether the consumers believe that when celebrities do not use the product
they endorse then is it ethical for them to endorse such a product. The majority of the people
believe that is 63% of them say it is not ethical for celebrities to do such a thing. And only
37% says it is ethical.
45
Thus it can be inferred that most of the consumers are infect against the wrong perception that
celebrities try to make in the mind of the consumers. They say that it is not morally correct on
the part of the celebrities to do such a thing.
DOES INVESTMENT MADE IN CELEBRITIES ACTUALLY BENEFIT THE
COMPANY?
companies investing huge money for using celebrities help them in increasing their total
revenue?
84%
16% somewhatagreesomewhatdisagree
The above chart explains that when companies invest huge amount of money for using
celebrities, does according to the consumers it actually help the companies to increase their
total revenue. Majority (i.e 84%) somewhat agrees to the fact that the celebrities does help in
increasing the total revenue of the company from their endorsements. A small percentage (i.e.
only 16%) somewhat disagree to this statement. This small number of people does not agree
46
and thus say that investing such huge amounts in celebrities are not necessary if their products
are good enough.
WHICH OF THE CELEBRITIES ARE MOST AFFECTIVE?
0%
20%
40%
60%
80%
100%
percentage
Sportsperson
Filmstar TV star Politician
celebrity
what kind of celebrity are most affective?
Not affectiveaffectivevery affective
The above chart explains what kinds of celebrities are most affective in endorsing the
products. Film stars are the ones who have the most prominent impact on the buying
behaviour of the consumers. Next comes the sports persons who easily connect to the people
and have power to change the purchasing decisions. T.V stars are not very affective but they
do have some impact, may be because people see them on television daily and thus becomes a
part of their lives. The least affective celebrities are the politicians who hardly have any
impact on the consumers. We can say that people do not perceive politicians as topical which
creates high PR coverage.
47
GENDER WISE MOTIVATING FACTORS
02468
10121416
Price as mostimportant
Quality asmost important
Discounts &offers as most
important
Latest Trendsas mostimportant
Celebrityendorsement
as mostimportant
Motivating factors to buy a product
Num
ber
of re
spon
dent
s
MaleFemale
If we segregate the consumers into male and female and then see what factors motivates them
the most then we can say that for both males and females Quality is the utmost important
factor to buy a product. Then while price is the second most important factor for males,
discounts and offers are considered by females. And for males discounts and offers are not
48
even considered while purchasing the product. While for both males and females celebrity
endorsements have been the least motivating factor.
49
CHAPTER-8.0
SUGGESTIONS
50
8.0 SUGGESTIONS
Companies must try and use a celebrity whose personality matches the brand attributes
and branding strategy. Only a good match helps to enhance the brand value.
Companies should avoid using a celebrity who is endorsing many brands
simultaneously. In such a case the consumers get confused and may fail to associate
the celebrity with the brand. Moreover using a multi brand endorser does not influence
the rate of brand recall as much.
Companies should try and focus on the product quality, price, and promotional
schemes rather than primarily focusing on the Celebrity. As per the research the
consumers give more importance to these factors as compared to the celebrity
endorsing the product.
Since celebrities are better at attracting attention than leading to purchase
behavior, companies must also keep this factor in mind while choosing a
celebrity.
Though the intelligent consumer of today understands that the celebrity endorsing a
product does not necessarily use it, the percentage of such consumer is small. Also
most people feel it is unethical to proclaim such a thing. Hence a company must be
careful that a celebrity endorsing product A is not seen publicly using the competing
brand. This may lead to negative publicity.
When it comes to celebrities, Film stars and Sports persons have a greater impact on
public as compared to Television stars and Politicians. As the image of politicians and
T.V stars is frequently variable they may hamper the brand image. Companies must be
careful to use politicians and T.V stars for selective brands whose target audience is
influenced essentially by such celebrities.
While using celebrities to endorse a product the cost factor should always be kept in
mind. The revenue might not be as high as the cost incurred in using a particular
celebrity.
While planning the advertising, the company must make sure that the celebrity does
not overpower the brand. In all advertising messages and PR activities the brand must
be highlighted more than the celebrity.
51
The aim of any promotional activity is enhancement of the brand. The celebrity must
act according to the brand and the branding must not change according to the celebrity
as they may prove fatal to the product’s individual image in the long run.
While choosing a celebrity, only his present must not be considered. Celebrities in
general have a long term effect on brands hence a conscious decision must be made
considering their past, present and gazing into their future projects and actions.
52
CONCLUSIONS
53
CONCLUSIONS
In India today, the use of celebrity advertising for companies has become a trend and a
perceived winning formula of corporate image-building and product marketing.
Advertisement is a medium through which a brand gets a personality and endorsers are
perceived as the personalities of the brand. Therefore, as it is essential to bring a synergy
between an individual's outfit and his personality, the same way it is essential to bring a
synergistic effect between the brand and the endorser
Brands rely on celebrities for the following reasons: -
Credibility: Approval of a brand by a star fosters a sense of trust for that brand among
the target audience
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.
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. There is a 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.
Selecting a celebrity involves a lot of financial risk. At some point in the decision to use
celebrity endorsers, advertisers have to consider the cost effectiveness of their choice. The
54
endorser who appears to have the highest potential, tend to be the most popular, and therefore,
the most expensive to hire as an endorser. The demand for entertainment and sports celebrities
has increased, and these individuals are sometimes very expensive to use as endorsers. In this
situation, the advertiser must decide whether the celebrity is worth the investment.
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 in case 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.
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, HLL could not comment much on its
sales and that though Dabur healthcare products' sales had improved. Similarly, there are also
cases wherein there was a dramatic change in the sales figure after the endorsements. For
example, Celebrity endorsement helped Head & Shoulders promote their brand and within a
year they became market leaders with over 45% market share.
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.
With the help of the literature we have managed to close the knowledge gap and created a
literature review about Celebrity Endorsement. In broad terms one can conclude that
endorsement does work, consumers do respond to an endorsement of a product by a celebrity.
The fact of associating a product with a well-known individual acts to increase the positive
view of the consumer. The potential benefits from endorsement for the brand owner are clear,
so long as the links are indisputable and match links in the consumer's mind.
55
CHAPTER-9.0
BIBLIOGRAPHY AND REFERENCES
56
9.0 BIBLIOGRAPHY AND REFERENCES
1) Belch, G.E., & Belch, M.A. (2001). Advertising and Promotion: An integrated
Marketing Communications Perspective (5thed.). Boston: Irwin/MaGraw-Hill.
2) Kotler, P., Armstrong, G., Saunders, J., & Wong, V. (2001).Principles ofMarketing.
Prentice Hall: Harlow
3) Kotler, P., Bowen, J., and Makens, J. (1999) Marketing for Hospitality and
Tourism,2nd Ed., Upper Saddle River: Prentice Hall Inc.
4) Kotler, P. (1997), Marketing management: analysis, planning, implementation, and
control, 9th Ed., London: Prentice Hall International.
5) Kotler, P. (1984), Marketing essentials, London: Prentice-Hall
6) Riezebos, R., Kist, B., Koostra. G. (2003), Brand Management. A theoretical and
practical approach. Prentice Hall
7) Till, B.D., & Schimp, T.A. (1998).Endorsers in Advertising: The case of Negative
Celebrity Information: Journal ofAdvertising,27
8) http://www.rediff.com/money/2003/dec/05guest.htm,Country Manager - Discovery,
Ogilvy and Mather India
9) Aaker, David A. (1996), Building Strong Brands. New York, NY: The Free Press.
10) Daneshvary, Rennae and R. Keith Schwer (2000), "The Association Endorsement and
Consumers' Intention to Purchase," Journal of Consumer Marketing, 17 (3), 203-213.
11) Friedman, Hershey H. and Linda Friedman (1979), "Endorser Effectiveness by Product
Type," Journal of Advertising Research, 19 (5), 63-71.
12) McCracken, Grant (1989), "Who Is the Celebrity Endorser? Cultural Foundations of
the Endorsement Process," Journal of Consumer Research, 16 (3), 310-321.
13) http://www.thehindubusinessline.com/2008/04/09/stories/2008040950750500.htm
14) http://www.marketingprofs.com
15) http://www.brandchannel.com
16) http://papers.ssrn.com
17) http://hull.aug.edu/thoughtLeadership/research/Amos-Holmes-Strutton-IJA-2008.pdf
18) advertising.about.com/od/celebrityendorsements/Celebrity_Endorsements.htm
19) www.merinews.com/catFull.jsp?articleID=183
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20) http://www.businessweek.com/smallbiz/content/nov2008/sb20081114_106175.htm
21) http://www.ingentaconnect.com/content/westburn/jmm/1999/00000015/00000004/art0
0005
22) http://lifestyle.in.msn.com/fashion/article.aspx?cp-documentid=1671484
23) http://www.indianmba.com/Faculty_Column/FC706/fc706.html
24) http://www.ibsaf.org/icfai_books/Celebrity_Endorsements_Perspectives_%20and_Cas
es.html
25) http://www.indiantelevision.com/tamadex/y2k8/sep/tam38.php
26) http://www.theindiastreet.com/celebrity-endorsement
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ANNEXUERS
59
QUESTIONNAIRE
Name :
Income :
Gender :
Age : 18-25yrs 25-35yrs 35-50yrs above 50yrs
Occupation :
1) Do you think Advertisement informative?
Yes No
2) What is a motivating factor to buy a product? Rank the below according to your
preference (keeping 1 as the highest and 5 as the lowest).
Price
Quality
Discounts and offers
Latest Trends
Celebrities endorsing the product
Any other______________________________
3) According to you do Celebrities cast impact through Advertisements?
Yes No
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4) If Yes?
Attracts Attention
Build Desire to have the product
Initiate an action to buy the product
5) Does Celebrities helps in increasing the market share of the company?
Yes No
6) What do you think, do celebrities themselves uses the product they endorses?
Yes No
7) If No, do you think is it ethical to do such a thing?
Yes No
8) Do you think companies investing huge money for using celebrities help them in
increasing their total revenue?
Yes No
9) What kinds of celebrity are most affective?
Very Affective Affective Not Affective
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Sports Person
Film Star
TV star
Politician
10) According to you what are other risks involved in using celebrity as endorsements?
CHAPTER-10.0
CASE STUDY
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10.0 CASE STUDY
THE SIYARAM CELEBRITY ENDORSEMENT EXPERIENCE
"We have enough of film stock for a whole year. Unfortunately we can't use them
anymore."
- N Gangadhar, General Manager (Marketing), Siyaram Silk Mills, commenting on the
withdrawal of the J Hampstead advertisement campaign, in April 2000.
The Cronje Scandal
In April 2000, the New Delhi police unearthed one of the biggest scandals ever to hit the
world of cricket. While investigating a local corruption case, officials recorded phone
conversations between Hansie Cronje (Cronje), the captain of the South African cricket team,
and Sanjeev Chawla, a London-based Indian businessman. The conversation in the tapes
seemed to implicate both men in illegal betting on a match played in February 2000 in India.
After initial denials, Cronje conceded that he had accepted $ 15,000 to fix the match.
The news shocked both cricket fans and the media alike - Cronje's face was smeared with
black paint on posters across the country. Siyaram Silk Mills Ltd. (Siyaram), one of India's
leading textile companies, was also affected badly by this controversy. Hansie Cronje was one
of the key celebrity endorsers for Siyaram's J.Hampstead brand of clothing. The campaign
featuring Cronje had been running on the print, electronic and outdoor media from March
2000. Siyaram and its advertising agency, Percept, watched in dismay as their celebrity
endorser turned into an internationally hated sportsman overnight. The issue raised a heated
debate in corporate and media circles regarding the perils of using celebrity endorsement.
Percept sources commented, "This mess is horrible."
Union Minister of State for Information and Broadcasting Arun Jaitley, who was also
president of the Delhi District Cricket Association, said the Delhi police would take the
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scandal to its ''logical end''. ''The tapes have proved beyond doubt the involvement of the
South African skipper,''
What happens when models turn 'villains'? Why did the advertisers choose Cronje & Co? How
much were they paid? These and more questions surfaced.
Siyaram pulled down all the billboards featuring the entire South African team across the
country. The J.Hampstead campaign was completely withdrawn, almost 20 days before it
completed its scheduled run on hoardings and television. The 'match-fixing' scandal seemed
all set to force Siyaram – and other Indian companies – to rewrite the rules of using celebrity
endorsement as an integral part of their media plans.
Background Note
Siyaram was a part of the Siyaram Poddar Group of companies, which had a turnover of $ 209
billion in 2000-01. The group, founded in 1954, was into the textile (yarns, fabrics and
garments), paper/paperboards and tyre (rubber tyres and tubes) businesses. While Govind
Rubber Ltd. (GRL) was into the auto and bicycle tyres and tubes business, Balkrishna
Industries Ltd. (BIL) was into the manufacturing of paperboards, tyres/tubes and synthetics.
Siyaram's businesses comprised fabrics and readymade garments. Its popular brands included
Oxemberg (shirts, trousers and jeans) and J.Hampstead (wool fabric). Siyaram was
incorporated in June 1978 as a private limited company and was converted into a public
limited company in 1980.
Siyaram Finance, its subsidiary, was into the financial services business. Siyaram
manufactured and marketed textiles, cotton, woollen synthetics and synthetic blends – the
main product being polyester blended worsted2 fabrics. In July 1993, Siyaram came out with a
Rs 153 million rights issue to part-finance a Rs 165 million expansion-cum-modernization
project. While the family held 23% of the Rs 51 million equity, foreign collaborators, financial
investors and the public held 26%, 22% and 8% respectively. Siyaram had a strong presence
in the lower and medium segment of the domestic suitings market.
The company had three manufacturing plants situated at Thane and Raigad in Maharashtra and
Silvassa in the union territory of Dadra & Nagar Haveli, producing over 27.5 million meters of
fabrics annually. Siyaram had a 4% market share in the Rs 50 billion suitings and shirtings
market.
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The other players included Vimal, Mayur, Raymond, Digjam, Gwalior and Reid & Taylor etc.
Siyaram retailed its products through 25 exclusive showrooms, besides its distributor network
of about 400 wholesale dealers and 50,000 retailers across the country. (The number of
exclusive showrooms was to be increased to 75 by August, 2002.) The company also exported
its products to Europe, South America, South Africa, the Far East and the Gulf countries.
Siyaram's sales increased from Rs 20 million in 1978 to Rs 3252.6 million in 2000-01.
Siyaram was one of the few non-FMCG companies in India that was known for its lavish
advertisements. The 'Coming Home To Siyaram' campaign was reported to be one of Indian
advertising's costliest campaigns.
The 'Coming Home To Siyaram' advertisements were much talked about for being of much
longer duration than the usual advertisements, and also for the huge budgets Siyaram set aside
for them. The company believed that good commercials helped it to effectively position its
suitings on a global platform. Siyaram officials said the company's focus on marketing was
responsible to a great extent for its growth over the years. Percept had conceptualized the
'Coming Home to Siyaram' campaign in the early 1990s.
Over the years, the campaign established the brand's association with 'true love for the
motherland,' by showing successful men maintaining lasting, strong ties with their families.
Analysts commented that the campaign was largely responsible for Siyaram's high brand
recall and positive consumer feedback. As part of its brand-building initiatives, Siyaram also
organized major sporting events like the triangular cricket series – Siyaram's Cup, 1997 and
Siyaram's Celebrity Soccer 1998. The company also held Siyaram fabric shows, aimed at
increasing awareness among its target audience about the company's range of products. For
2001-02, Siyaram had increased its advertising and promotion budget to Rs 300 million from
the 2000-01 level of Rs 200 million.
The J.Hampstead Story
J.Hampstead was a very popular suiting brand in Europe, renowned for its premium 100%
wool suitings woven from rich natural fibers like merino wool, cashmere and woolsilk. In
1995, Siyaram tied up with J.Hampstead for marketing its suitings in India.
The company imported the fabric from Italy. It was priced in the range of Rs 1,500-1,600 per
meter. In September 1997, Siyaram decided to begin manufacturing the brand at its plants
with technical assistance from J.Hampstead.
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The product was slightly different from the imported version and was priced in the range of Rs
275-1000 per meter.
Explaining the reason for the decision, Gangadhar said, "The imported J Hampstead faced two
problems: that of maintenance and price. The imported product had to be dry-cleaned and
steam-ironed. The Indian fabric can be hand washed." Siyaram earmarked around Rs 50
million for the marketing, sales and promotion of J Hampstead.
The first phase of this promotion was in the form of commercials featuring Indian tennis
superstars Leander Paes and Mahesh Bhupati. These commercials with the positioning line,
'The finest fabric in the world,' were aimed at positioning the brand in the premium segment.
In September 1999, Siyaram held a tennis carnival to promote J.Hampstead, where several
Hindi film stars were invited to play tennis with the brand ambassadors.
Soon after, Siyaram faced problems with the tennis duo when they decided to break their
partnership, reportedly due to personal problems. However, the company continued running
the advertisements. Company officials justified this, claiming that the 'sport was bigger than
the players.' In February 2000, Siyaram signed the South African cricket team for promoting
the brand. The multi-media promotion was spread over television, satellite channels, print,
outdoor and point of purchase advertising. Gangadhar said, "We have taken this opportunity to
associate ourselves with the number one ranked cricket team as they will be popular in the
coming series of cricket matches. And this will enable the brand to be globally focused.
The idea of such a campaign is also to send the message that the product is of international
quality. In India where cricket is almost a religion, these models can be easily identified by
both the masses as well the classes."
Siyaram had decided to use the South African team on the recommendation of Percept.
Gangadhar said, "All along, the South African team had a clean image. So we had signed up
the entire team and not just one individual. When they were coming to Bombay (for the
match), we thought it was a very good opportunity and so decided to shoot with them for the
ads."
Shailendra Singh, Joint Managing Director, Percept, said, "Our brief is to project J Hampstead
as a global fashion brand. It is a high fashion brand that is successful and sincere.
Consciously, we thought that Hansie Cronje has a 82% success rate and nine years' experience
as a captain." The advertisements featured the entire South African team wearing the J
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Hampstead premium suitings. Within a month of the campaign being released in the national
media, the Cronje controversy surfaced. Siyaram continued to run the advertisements in
newspapers for a few days after the scandal broke.
However, the company decided to withdraw the campaign completely soon after. Gangadhar
denied that the Hampstead brand image had been affected. He said, "I have had calls from
well-wishers who say that no one could have anticipated this. We do things right and in the
right spirit. And if something goes wrong all we can do is make amends for it. The brand is
bigger than any individual."
A Percept official said, "Thankfully, the campaign was not centered on one single player but
the entire team. Hence it is not so bad after all. We are also recovering from the incident." He
added, "We have used multiple personalities for the ad. We have not focussed just on Cronje.
It is the entire 14-member South African team that we have signed up. So, we never let the
personality become the brand itself." Siyaram's strategy of opting for multiple brand
endorsements seemed to have diluted the impact of the scandal on the brand. The company
began working on a new series of commercials featuring the Leander/Mahesh duo, but
dropped them as the brand ambassadors in October, 2000. Though company sources denied
that they had given up the celebrity endorsement route for J.Hampstead, the perils of celebrity
endorsement began to be seriously examined by Indian companies and advertising agencies.
The Aftermath
Cronje had to resign from the South African team and was barred from playing cricket ever
again. In South Africa, the Spur Restaurant Chain in Johannesburg ended a multi-million
grand-advertising contract with Cronje. The controversy heated up in the next few weeks, with
many more Indian and international cricket players being named as parties to illegal match
fixing. It was reported that the Board of Control for Cricket in India (BCCI) and the
Mumbai/Dubai underworld were also involved in the scandal.
There were even rumors of South Africa and India suspending diplomatic ties. The Indian
companies who sponsored cricket matches and utilized cricket players as endorsers were
however, reported to be unfazed by the developments. Asserting that the J.Hampstead
association with sports (and cricket) would continue, Singh commented, "Let's not kill the
sport for one moronic guy."
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By the end of the year, the Cronje scandal seemed to have died a natural death and cricket
sponsorship by Indian corporates continued. Siyaram meanwhile, revealed its plans to achieve
a turnover of Rs 4 billion for the fiscal 2001-02. J.Hampstead's contribution to the turnover
was expected to rise from Rs 400 million in 1999-00 to Rs 750 million.
J Hampstead, the readymade garment wear from Siyaram Silk Mills was considering product-
specific campaigns shortly after. The purpose was to support the new launches scheduled for
Diwali season. The company planed to launch three-four products under the J Hampstead
range.
Percept Advertising was still doing the creatives. However, the company continued with the
Leander Paes, Mahesh Bhupati ad. Soon the news of the Indian tennis champs separation
started to become big. Now with Mahesh Bhupati and Leander Paes breaking ties, the question
was will the company withdraw that particular ad too? Percept's joint managing director
Shailendra Singh said: ``Even as they have disassociated themselves, we don't see any reason
as to why we will withdraw this particular ad. It is a matter of associating ourselves with the
game of tennis.''
In September 2001, the company launched a new campaign for J.Hampstead, with the new
baseline 'One World One Fabric.' The campaign did not feature any sport or celebrity. Instead,
international models were featured to reinforce the fabric's global appeal. Media analysts were
quick to point out that having learnt its lessons from the Leander/Bhupati and Cronje issues,
Siyaram was deliberately trying to 'play it safe' this time around by avoiding celebrity
endorsements for J.Hampstead.
The Celebrity Endorsement Issue:
Celebrity endorsements began way back in the 19th century with UK's Queen Victoria
endorsing Cadbury's Cocoa. Using celebrities for promotion has been a common marketing
communications strategy, practiced globally.
Marketers believe celebrity endorsers are more effective than non-celebrity endorsers in
generating actual sales from the customers, and positively influence the consumption of the
products they are associated with.
The fact that celebrities remain in constant media focus helps create high recall rates for the
commercials that feature them.
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Their attractive qualities are transferred to the product being promoted. Some of the main
reasons for companies using celebrity endorsers are given in the following table.
Celebrity advertisements stand out amidst the other advertisements
They facilitate attention getting
Celebrity values define and refresh the brand image
Celebrities add new dimensions to the brand image
Celebrities give the brand instant credibility
The use of celebrities gives the brand enhanced PR coverage
The use of celebrities make it easier for the agencies to convince clients
about the campaign's success
However, selecting the right celebrity endorsers is usually a tough task. A wrong choice can
ruin the image of a brand.
The acceptance of an advertisement message is largely determined by the attractiveness of the
celebrity presenting the message. Also, the message conveyed by the celebrity must match the
product message. Relevance is a very important factor in celebrity endorsements.
If there is very little fit between the celebrity and the brand personae, the advertisement could
prove counter-productive. Interestingly, the selection of Hansie Cronje for J.Hampstead was
criticized on these very grounds by an executive from the advertising agency Ogilvy &
Mather. He said, "Cronje is such a casual chap and he looks so awkward and uncomfortable in
a suit."
The man behind the popular Pepsi ads, filmmaker Prahlad Kakkar said, "J Hampstead is a
perfect example of using a celebrity without a script." Following table shows the celebrity
selection criteria’s which must be followed.
Celebrity availability Fit with the advertising idea
Celebrity physical attractiveness Celebrity-Target audience match
Celebrity credibility Celebrity values
Celebrity prior endorsements Costs of acquiring the celebrity
Whether celebrity is a brand user Celebrity-Product match
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Celebrity profession Celebrity controversy risk
Celebrity popularity
In India, celebrity endorsements are believed to be particularly useful as the average consumer
reportedly identifies more strongly with celebrities than in other countries.
Film stars and sports personalities (especially cricket players) are immensely popular among
the masses. This has encouraged the widespread use of celebrities in advertisements over the
decades.
The Lux Story is famous in the world of bran endorsement. The Lux Soap in its 75 yrs journey
as a product always used a Film Celebrity to promote the product with the most catchy lines
‘Lux meri Khubsurti Ka raaj’. They used a huge number of celebrities from the beginning to
promote their product & in their 75 years celebration advertisement campaign; they used SRK
as the main endorser who has said the famous ‘Lux mera Khubsurti ka raaj’ along with Hema
Malini, Sridevi & Kareena Kapoor. That is the first time a male celebrity endorsed a female
product in India.
A popular star can help immensely in improving brand image and recall.
But the same star can cause major problems for the brand if he or she lands in trouble – either
in their careers or in their personal lives.
Pepsi faced this problem with two of its most popular celebrity endorsers – pop singers
Michael Jackson and Madonna. In 1989, right after Pepsi aired the first Madonna commercial,
the singer released her sexually explicit and reportedly anti-Christianity music video 'Like A
Prayer' on Music Television. The video led to widespread protests against the singer and Pepsi
had to pull out the advertisement after airing it just twice.
Michael Jackson was signed by Pepsi in 1983 in what was the largest individual sponsorship
deal in history. In 1993, Michael Jackson was charged with child abuse. Though the charges
were not proved, Pepsi had to pull out of the contract after unprecedented media outrage
against the brand's association with the singer.
When Shahrukh Khan(SRK) promoted Emami’s Fair & Handsome cream. It was highly
criticized as saying that if a star with SRK’s stature promote whiteness cream then actually we
are advocating for racism saying black is bad & white is gold. And how SRK could endorse
such products as there will be a huge impact among the masses regarding the skin colors. A
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person must be judged by his/her qualities & not by his/her skin color. But what we basically
forgot that stars get money to endorse products & we shouldn’t eye washed by the
advertisement & there is no point in criticizing a celebrity for endorsing product like Fair &
Handsome.
Shilpa Shetty was also hardly criticized for promoting alcohol. As being a celebrity she must
be a responsible citizen & a responsible citizen should never promote alcohol.
Celebrity branding is all right as long as the celebrity conducts himself in a good manner but if
something wrong happens it will affect the image of the product also. When Salman Khan got
warrant for killing endangered dear ‘Thumbs Up’ has no option but to replace him.
So the product and the celebrity remain good as long as both of them remain individually
good.
The problem of celebrity branding is also that when a particular product is known to the
common people with the effect of the celebrity, it is very difficult to separate the product from
the star. Like Coca-Cola - Aamir Khan, Cadbury- Amitabh Bachan, Santro-SRK. Now, if
any one of the company want to change their endorser they have to redesign the product to let
out their product from the shadow of the old campaign.
Another peril associated with celebrity endorsement is the 'vampire effect,' when the celebrity
overshadows the brand. Also, whether the celebrity endorsing a brand actually uses the brand
or not is an issue of concern. For instance, if a celebrity endorsing Pepsi is seen drinking
Coke, it can reflect very badly on the brand being endorsed.
Celebrity endorsements could become a 'double-edged sword' for most companies. Some
brands did manage to fly high by the use of a good celebrity.
Cadbury India used Amitah Bachan not only to recover their image from worm controversy
but also to establish itself as the leading company in the Indian chocolate market.
Aamir Khan’s ad campaign ‘Thanda Matlab Cocacola’ was also a huge hit. Not only that the
company used the superstar to come out from the pesticides controversy.
Dabur brought in Amitabh Bachan in the stagnant chawanprash market. He brought back
boost in market and helped Dabur to remain the market leader.
Conclusion:
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So there are certain positive as well as negative points in celebrity branding in India. A
producer of a product, the company, always wants to minimize the negative sides of the
celebrity endorsement and maximize the positive impact.
