The Impact of Celebrity Endorsements on

Consumer Brand Preferences

By: Arti Trivedi Pranay Prakash Srivastava Lal Jitendra Singh Shwetank Singhal Anil Kr. Ransom

Table of Contents Problem Statement ………………………………………………

1Sampling technique &sampling target population ……………………….………. 2Objectives statement ……………………………………………

3Methodology …………… ……………………………………… 4Charts…..……………………………………………………………..

6Data Analysis………………………………………………………

7Findings…………………………………………………………….. 8Conclusion………………………………………………………… 9Summary and managerial implications…………….10Limitations…………………………………………………………11

SYNOPSIS “Successful branding programs are based on the concept of singularity. The objective is to create in the mind of the prospect the perception that there is no other product on the market quite like your product.” - Al Ries & Laura Ries

“Brand” is the most valuable asset of any firm. It’s the “strong idea” of promotion which is a more strategic means of brand-building; which can be an economical alternative over celebrity endorsement.

Definition of Celebrity Endorsement

According to Friedman & Friedman, a “celebrity endorser is an individual who is known by the public for his or her achievements in areas other than that of the product class endorsed.” So, in the Coco-Cola advertisement; actor Aamir Khan is the celebrity endorser for the product or brand called Coke, and this process is referred to as Celebrity Endorsement. Celebrities might endorse as a brand ambassador or a brand face.

The increasing celebrity culture

• Celebrity for social endorsing

Polio drops

• Celebrity endorsing the politics.

• Using sports star as celebrity endorser.

1.Problem statement

The study will examine the relationship between celebrity endorsements and brands, and the impact of celebrity endorsement on consumer's buying behavior as well as how consumer makes brand preferences.

.

2.Sampling Technique

• Convenience Sampling

Sample Target Population

• Target market of between 18 to 30 years of IIITA Students• Target rural market near Allahabad• Sample size-100

3.Objective Statement

do these stars really help a brand by increasing its sales?

can they really have an Impact on the person's consumption pattern, thereby changing his brand preference?

How an advertisement featuring a celebrity can influence consumers buying decision and can create an association between a brand and a common man?

4)Methodology-

Primary data collection method

“Method-Questionnaire”

Secondary data collection method

Assumption-It is assumed that data collected here is unbiased and pure.

Questionnaire

1. Why do you buy a product of particular brand?

2. How much a “Brand Ambassador” motivates you to buy a new product?

3. Whenever you watch any new product advertisement featuring your favorite celebrity in it, you decide to buy it

4. You are using a particular brand for very longer time duration now a celebrity starts endorsing a brand which is close competitor of your brand. And you admire this celebrity a lot .Would you like to switch?

 5. Generally you buy the brands for what purpose?

6. How much extra money you are willing to pay for purchasing a celebrity endorsed product.

 

Secondary Method-

1)Internet search, using online resources to gather data for research purposes.

2)News Papers and Magazines, journals and other similar periodicals.

Sources--Hindu Business Line, 2003 -

www.indiantelevision.com-www.magindia.com-Business Standard, May 13, 2005-www.rediff.com – article by Country head, O&M India

Analytical tools used

BarsCor-relationPie charts

5.ChartsWhy do you buy a product of particular

brand?

a) You need It

b) Your Favourite Celebrity

endorses it

c) To try it0

10

20

30

40

50

60

70

80

58

16

26

71

1712

Urban PopulationRural Population

While buying a branded commodity what do you feel that you are paying for?

a) T

he co

mm

odity

b) The

brand o

r th

e Com

pany

c) T

he ce

lebri

ty e

ndorsing t

he bra

nd

0

10

20

30

40

50

60

25

53

22

52

40

8

Urban Population

Rural Population

How much extra money you are willing to pay for purchasing a celebrity endorsed product.

a) U

pto

500

b) 5

00 to

1000

c) M

ore

than

100

0

d) N

othi

ng

0

10

20

30

40

50

60

70

27

3734

2

64

1711

8 Urban Popu-lation

Rural Popu-lation

How much a “Brand Ambassador” motivates you to buy a new product?

a) A lot b) Up to Certain extent

c) Not at all0

10

20

30

40

50

60

22

31

47

54

29

17

Urban PopulationRural Population

  2004 2005 2006 2007 2008 2009

   

Annual Family Income(of an

average middle class family) 200000 210000 225000 240000 265000 280000

                   Expenses on

Branded Products 2% 2.50% 2.50% 2.60% 2.80% 2.82%

Cor-relation between family income and expenses on

branded products

   

0.880895 

   

7.Data Analysis and Major findings

Research studies have proven that known products and names are sold more than unknown ones

Rural Population is more inclined towards “Brand Ambassador "than urban population.

People generally prefer to stick with their brands .

More Conscious towards satisfaction and value for money.

Willing to pay Upto Rs 1000 more to buy celebrity endorsed products..

Urban Population is paying more for celebrity endorsed product.

Celebrity endorsed products-Style statement

A common man feels that a celebrity helps the brand to increase their total sales and hence revenue.

Celebrity also helps in increasing overall market share

Effects of brand ambassador differs from different products.

In final Decision value for money matters the most for a consumer and celebrity does not have a significant role in it.

Influence of celebrity endorsee on purchase decision

Agree

Disagree

Strongly Agree

StronglyDisagree

Undecided

42%

26%

6%

15%

11%

Factors influencing consumer buying behavior

Consumer's psyche and their ability to take decisions

Traditional Factors affecting consumer decision

making

External influences on consumer behavior

There is a demographic and psychographic

connection between the stars and their fans like age,

gender and affection

Multiple product endorsement also has a negative

impact on customers' purchasing intentions

Society affects the buying behavior

Match up between Brand Image and celebrity Image

Fame, popularity(but brand should be reliable)

Celebrity Chosen

Physical Attractiveness

Expertise

Trustworthiness

Process of choosing Celebrity

Success-

Ried and Taylor –Amitabh BachchanTata Sky-Aamir KhanKurkure-Juhi ChawlaNIIT-Vishwanathan Anand

Reasons-Source Credibility, Establishing a Perfect Match, Celebrity Persona ,Emotional Attachment and Transferring the Meaning.

Failure-

Fiat Palio-Sachin TendulkarCastrol-Rahul DravidNerolac Paints-Amitabh BachchanWorld Space satellite radio service-A.R.Rahman

Reasons-Improper positioning, Brand Celebrity disconnect, Clutter-Flutter and dissatisfaction with product quality/performance

Reid and Taylor-A caselet

In India, a brand called Reid & Taylor presented its perfect example when they first launched their advertising campaign featuring James Bond fame of the time Mr. Pierce Brosnan along with the tagline 'BOND WITH THE BEST' but the James Bond idea did not worked and the company was not happy with the results.

company introduced a family ad where children are celebrating there parents silver wedding anniversary and they are out with their father to purchase a suit for him. Even this commercial did not work.

company introduced Mr. Amitabh Bachchan as Reid & Taylor man, a man propagating the brand for special occasion and for very special people in life. The commercial from the initial days got good response and did extremely well as people were able to connect with Mr. Bachchan and the values he was propagating.

Tarun Joshi, Communications Custodian, Reid & Taylor said, "Amitabh Bachchan is an icon with universal appeal and has helped us to reach out to the real 'Bharat.' In fact, agents and retailers have told us that already customers have started asking about the 'Amitabh wali suiting.'“

8.Conclusion

The use of celebrity for endorsements create a very favorable impact on the consumer and it creates a connect which forces a consumer to purchase a product

It is essential for advertisers to be aware of the complex processes underlying celebrity endorsement.

Celebrity endorsements are a powerful and useful tool that magnifies the effect of a campaign but the word of caution to be followed seriously;

• celebrities alone do not guarantee success nor does a great advertising campaign or the best possible product. It is the combination of several factors and elements that work together for the success of a brand and its acceptance in the minds of consumers as well as for its market offering

9.Summary and Managerial Implications

Celebrity endorsements will be more effective when-

used consistently over time

Ad design is simple and relevant.

If celebrity is not strongly associated with any other product.

Celebrity’s image and potential is positive.

If used for less familiar brands.

10.Limitations

Area bound studyRestricted sample populationSize of sampleBiasness

Thank you