A RESEARCH REPORT

ON

IMPACT OF CELEBRITY ENDORSEMENTS

ON BRAND PREFERENCE

BY

PAYAL RAI

(MMM)FIRST SEM (2014 – 2015)

IN PARTIAL FULFILLMENT OF

MASTER OF MARKETING MANAGEMENT

UNIVERSITY OF PUNE

CERTIFICATE

This is to certify that Miss. PAYAL RAI of NEVILLE WADIA College has successfully completed the

research work in partial fulfillment of requirement for the award of Master of marketing

management prescribed by the University of Pune.

This research is the record of authentic work carried out during the academic year

2014-2015

Research Guide Principal

DECLARATION

I, Miss.PAYAL RAI hereby declare that this Research is the record of authentic work

carried out by me during the academic year 2014-2015 and has not been submitted to

any other University or Institute towards the award of any degree.

Signature of the student

(PAYAL RAI)

ACKNOWLEDGEMENT

For the development of this research work, I feel deep sense of gratitude to each and

every person who has directly or indirectly supported me for the same. Each one is important

to me on a personal basis. In particularly, I would like to thank Mr. Darashah Sir for his

guidance and support through the completion of the research project. I would also like to

extend my sincere thanks to Mr. Vikas Dole would like to thank my friends for their valuable

support in editing the final copy of the research.

Finally, I must mention that I am grateful to all my teachers and friends who have been

a driving force and also a constant source of inspiration and helped me in fulfilling my research

questionnaires.

PAYAL RAI

INDEX

TOPIC PAGE NO1: Executive summary 8-212: Objectives or aim 213:Research Methodology 224: Limitations of the project 235: Data Analysis 24-366: My idea to take from this research 377: Conclusion 388: Bibliography 39

IMPACT OF CELEBRITY ENDORSEMENTS ON

BRANDS

ABSTRACT

India is a country where people love to live in dreams. They worship celebrities. Celebrities may be Cricket stars like Sachin Tendulkar, Mahindra Singh Dhoni or Film Stars like Salman Khan, Aishwarya Rai. They treat them as God. Marketers use this very preposition so as to influence their target customers may be existing or potential ones. For this they rope in these celebrities and give them whopping amount of money. They believe that by doing this they can associate their products with their target customers. This is called celebrity endorsement.But do these celebrity endorsements acts as a source of brand-building and have impact over the purchasing behavior of customers in case of automobiles? For this I decided to conduct this research and objectives of my research are:

To identify the influence of celebrity endorsement on consumer buying behavior.

To study celebrity endorsement as a source of brand-building.

To find which type of celebrity persona is more effective

During our research an important factor revealed that mostly people want to see male celebrities endorsing automobile vehicles rather than female.

People love to see sports stars endorsing automobile vehicles than that of bollywood stars.

This particular aspect is mainly supported by the fact that in India where Cricket is religion and with the success of IPL-1 cricketers like Gautam Gambhir , Ishant Sharma are able to displace big film stars like Hrithik Roshan for advertisements of Coca-Cola.

Another important fact which came into existence was majority of people follow their favorite celebrity while making a new purchase every time.

Beside this one major factor come into existence that mostly respondents were able to recognized the celebrity used in various advertisement.

So in this brand recall test, mostly positive results were found.

One open-ended question was also included about suggestion.

Celebrities Company should come out with some schemes so as to lure their customers.

So it can be concluded that for a small extent Celebrity endorsement acts as a source of brand-building but company should follow integrative approach so as to build strong brands.

Beside celebrity endorsement they should run certain schemes so as to provide value to the customer and to build strong brand.

INTRODUCTION TO THE SUBJECT

There are large no. of brands available in the market. Some are very familiar and rest are somewhat. What are the things that distinguish those from rest?

Businesses have long sought to distract and attract the attention of potential customers that live in a world of ever-increasing commercial bombardment. Everyday consumers are exposed to thousands of voices and images in magazines, newspapers, and on billboards, websites, radio and television.

Because of the constant media saturation that most people experience daily, they eventually become numb to the standard marketing techniques. The challenge of the marketer is to find a hook that will hold the subject's attention.

Celebrity refers to an individual who is known to the public (actor, sports figure,entertainer, etc.) for his or her achievements in areas other than that of the product class endorsed. This is true for classic forms of celebrities, like actors (e.g., Amitabh Bachchan, Shahrukh Khan, Rani Mukherjee Aamir Khan and many more), models (e.g., Mallaika Arora, Lisa Ray, Aishwarya Rai, etc), sports figures (e.g., Sachin Tendulkar, Zaheer Khan, SouravGanguly, Anna Kournikova, Michael Schumacher, Steve Waugh, etc), entertainers (e.g.,Cyrus Broacha, Oprah Winfrey), and pop-stars (e.g., Madonna) -but also for less obvious groups like businessmen (e.g. Bill Gates) or politicians.

Celebrities appear in public in different ways. First, they appear in public when fulfilling their profession

Furthermore, celebrities appear in public by attending special celebrity events, e.g., award ceremonies, inaugurations or world premieres of movies. In addition, they are present in news, fashion magazines, and tabloids, which provide second source information o nevents and the 'private life' of celebrities through mass-media channels (e.g., Smriti Irani being regularly featured in various publications). Last but not least, celebrities act as spokes-people in advertising to promote products and services, which is referred to celebrity endorsement.

'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, there to, irrespective of the required promotional role."

Difference Between Brand Ambassador & Brand Face

A Brand Ambassador would be one who is not only a spokesperson for the brand or is just appearing as a testimonial for the brand's benefits.

He/she is an integral part of the brand persona and helps to build an emotionale, which goes beyond just appearing on TV commercials. He takes up the cause of a Brand Champion and is associated with every aspect related with the brand

. What is more, there is a significant difference between making just an endorsement for say, a shampoo or an automobile, and being that brand's alter ego.

Both parties take the latter far more seriously to the deal. So a brand ambassador would be involved in press releases, he/she would be

actively participating in any sales promotion, sporting the Brand all the while. For example, Fardeen Khan is the brand ambassador for Provogue while he

remains a brand face for Lux Body Wash. On the other hand, a Brand Face would be the current celebrity who is just used as

a tool to increase brand recall and is only appearing in the advertisement. It is usually seen that a brand face is a temporary contract and is very short term

at times. An example would be Sona Chandi Chawanpryash using Sourav Ganguly for

a while in its commercials. Brand faces are easily forgotten and fade away with the campaign's end. The

motive behind total branding may be decocted as an attempt to amalgamate diverse activities to win customer preference.

Who is a celebrity?

What is Celebrity Endorsement?

WHY CELEBRITY?

The use of celebrities in order to increase the sales and/or recall value of the brand is called

celebrity endorsement.

Aristotle’s quote

“Any brand can get a celebrity. That is easy. But getting a celebrity consistent with the right brand, to the right degree, at the right time, for the right purpose and in the right way... that is not easy.”

Celebrity Endorsement are impelled by virtue of the following motives

Greater believability

Favourable evaluation of the product

Positive purchase intention

Who endorses what?

Name of the celebrity brands

Mahendra Singh Dhoni TVS, aircel, Pepsi, Boost

Shah Rukh Khan Pepsi, Hyundai, Tag Heuer, Dish Tv

Kareena Kapoor Sony Vaio, Anne French,head &shoulder, fiama di vills

Katrina Kaif Olay,veet,slice,pantene,nakshatra diamonds

Hrithik Roshan Hero Honda,Acer,reliance gsm

Amitabh Bachan Dabur chyawanprash, parker pens,navratna oil etc

1 instant brand awareness and recallcelebrity values refresh and define, the brand image

2 celebrities add new dimensions to the brand imageinstant credibility

3 lack of ideasconvincing clients

Scope of Celebrity Endorsement:

Firms have been just aposing their brands and themselves with celebrity endorsers (e.g., athletes, actors) in the hope that celebrities may boost effectiveness of their marketing. The increasing number of endorsements throws a valid question to the consumers. Is there a science behind the choice of these endorsers or is it just by the popularity measurement? What are the reasons which lead to impact of celebrity endorsement on brands? The success of a brand through celebrity endorsement is accumulative of the following 14 attributes. Greater the score of the below parameters, greater are the chances of getting close to the desired impact.

CELEBRITY CERDIBILITY

Effectiveness of Celebrity Endorsers

CELEBRITY PROFESSION FIT WITH THE ADVERTISING

IDEA

CELEBRITY PHYSICAL ATTRACTIVENESS

WHETHER CELEBRITY IS A BRAND USER

CELEBRITY VALUES MULTIPLE ENDORSEMENTS

CELEBRITY AVAILABILITY CELEBRITY CONTROVERSY

RISK

COSTS OF ACQUIRING THE CELEBRITY CELEBRITY-PRODUCT MATCH

CELEBRITY REGIONAL APPEAL FACTORS

CELEBRITY-TARGET AUDIENCE MATCH

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CELEBRITY POPULARITY

A study conducted by Charles Atkins and Martin Block focused on alcohol advertising and young audience to examine the impact of celebrity advertising in terms of social effects of advertising. The sponsoring Company is the underlying source of any advertising message, but the individual models depicted in the advertising serve as the more visible communicator in many cases. The most thoroughly studied source quality is credibility. Celebrity endorsers are considered to be highly dynamic, with attractive and engaging personal qualities. Audience may also trust the advice given by some famous person, and in certain cases, celebrities may even be perceived as competent to discuss the product. The most widely used celebrities are sports figures, actors or other types of entertainers. There are several reasons why a famous endorser may be influential: -

They attract attention to the advertisement in the cluttered stream of messages  They a re perce ived as  be ing more  en te r ta in ing  They are seen as trustworthy because of apparent lack of self -interest.  The   f ina l  e lement   i s  due   to   the  wide-spread attribution that major stars do not

really work for the endorsement fee, but are motivated by genuine affection for the product .

S=P* D*AV

--the multiplier effect WhereS is a Successful BrandP is an Effective ProductD is Distinctive IdentityAV is Added Values 

Celebrity endorsements on Automobile marketing in India:

The competitive nature of the automobile industry has prompted the companies to take up new and innovative marketing strategies to thwart the competition. Advertisements on the Audio visual medium are a rage as it gives the car makers an opportunity to flaunt their cars. Celebrity endorsements and testimonial advertisements have come a long way and

they are also doing their bit to sell the cars. Super star Shahrukh Khan has been associated with Hyundai Motor Company for a long time and he comes regularly on television to promote the Santro car. Similarly Ford has roped in On a similar note Saif Ali Khan and Rani Mukherjee is shown chasing each other with a Chevrolet aveo.

Celebrity endorsements on other products

The celebrities get huge amount of money to endorse the product which actually creates recall-value for the product like Tag  –Heuer – Shahrukh Khan

C o c a   C o l a   - A a m i r   K h a n

Cadbury chocolate –Amitabh Bachan

The adding up of any celebrity with any brand may not always increase the sales volume but if somehow the image of the product damaged, celebrity endorsing helps in recovering the image.

When Pepsi & Coke was infected by the Pesticides controversy, Pepsi used both SRK & Sachin Tendulkar for damage control & coke used Aamir Khan for image recovery. Not all products go with the image of all celebrity. 

Amitabh Bachan after KBC got huge popularity among the masses & his popularity is being used by various products from Reid & Taylor to Parker.

Brand V/s Celebrity

Sometimes the celebrity is more highlighted than the products, making no recall value of the product. When Rahul Dravid advertised for Castrol, the brand gets overshadowed by the celebrity & that is also a wrong choice of celebrity.  Some success story

Some Controversies

Cadbury India used Amitabh 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 uses the superstars to come out from the pesticides controversy. Dabur brings in Amitabh Bachan in the stagnant chawanprash market which brings in boost in market and helps Dabur to remain the market leader.

When 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 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 & Romanov Vodka

OBJECTIVES OF STUDY:

The objectives of the study are as follows:

To identify the level of influence of celebrity endorsement on consumer buying behavior.

To study the importance of celebrity endorsement as a tool for brand-building.

The factors to be considered while establishing a celebrity- to-brand fit

 

Shilpa Shetty 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. 

NEED OF THE STUDY:

After going through various sources like magazines, newspapers, websites I found that lot of research work has undertaken by researcher regarding impact of celebrity endorsement. But there was a gap in the research regarding whether celebrity endorsement act as a source of brand-building. So there is a need to discover this fact.

RESEARCH METHODOLOGY:

RESEARCH DESIGN:

A research design is an arrangement of conditions for collection and analysis of Data in a manner that aims to combine relevance to the research purpose with Economy in procedure. It constitutes the blueprint for collection, measurement and analysis of data. My research design will be exploratory research design.

Data Sources:

In dealing with any real life problem it is often found that data at hand are inadequate, and hence, it becomes necessary to collect data that are appropriate. The researcher can collect data either through primary source or secondary source.

Primary data

These are those data which are collected a fresh and for the first time, and thus happen to be original in character. I will be using the structured questioners. 

Secondary data:

These are those which have already been collected by someone else and which have already been passed through the statistical process. I will collect it from the sources like internet, published data etc.

 Population of the study

Citizens of Pune will be included in population.

Sampling Size:

It is the total number of respondents targeted for collecting the data for the research. Sample size of 100 persons will be taken for this research.

Sampling Technique:

Random sampling technique will be used in this research project.

Sampling Frame:

Frame is the list of respondents.

LIMITATION

There are following constraints of the study which can be explained as:-

The time of research was short due to which many fact has been left untouched

The Area undertaken in research in Pune only. But to do a completer research a wide area is required, so the area is also a constraint of the study.

Sample for the study taken is of only 100 consumers. Which can also act as a constraint in the study?

While collecting data some of the respondents are not willing to fill the questionnaire, so they might not fill their true behavior. This can also be a constraint of the study.

Data analysis and interpretation:

1. Occupation of respondent:

Occupation %tage

Business classService classStudentsOthers

25253020

25%

25%30%

20%

%tagebusiness class service class student others

Interpretation:

From this pie-chart it is clear that majority of the respondents are students and rest of the share is occupied by service and business class.

2. Age of the respondent:

Age %tage18-25 30

26-32 20

32-39 30

Above 40 20

18-25 26-32 32-39 Above 400

5

10

15

20

25

30

35

No. of respondent

No. of respondent

Interpretation:

This pie-chart depicts that mostly respondents are young and while rest are above 25years.

3. Gender of the respondent:

GENDER %TAGE

MALE 65

FEMALE 35

35%

65%

genderMALE FEMALE

Interpretation:

This pie-chart depicts that 65% of the respondents are female and 35% are males.

4. Type of Products:

Products %tage4 wheeler 352 wheeler 45Both 20

35%

45%

20%

vehicle

4 wheeler2 wheelerboth

Interpretation:

This pie-chart depicts that 45% of the people have two-wheeler and 35% of the people have four-wheeler and rest 20% have both two-wheeler and four-wheeler.

5. Factors affecting purchase intention:

Factors %tage

Price 20Opinion leader 15Celebrity endorser 35Brand name 30

20%

15%

35%

30%

Purchase

priceopinion leadercelebrity endorserbrand name

Interpretation:

This pie-chart depicts that 35% of the people consider celebrity endorser while going for the purchase, followed by brand name-with 30%.,opinion leader 15% and 20% people consider price. Brand name usually covers all aspects like functional aspects viz. mileage, speed etc. As people usually are more interested towards well known brands and if these brands are advertised by famous celebrity it creates an huge impact.

6. Like to see any celebrity endorsing your brand:

Preference %tage

Yes 55No 25Can’t say 20

55%

25%

20%

preference

yes no can't say

  Interpretation:

This pie-chart clearly indicates that 55% of the respondents want their products to be advertised by celebrities, 25% don’t want and 20% of the respondents weren’t sure. So, this clearly shows how much important these celebrities are in the daily life of common man.

8. Celebrity endorser as an effective method of persuasion:

Preference %tage

Strongly Agree 45Agree 15

Indifferent 10Disagree 20

Strongly Disagree 10

45%

15%

10%

20%

10%

preference

strongly agree agree indifferentdisagree strongly disagree

Interpretation:

This chart depicts that mostly people agree that Celebrity endorsement is an effective tool of persuasion. 45% of people strongly agree that celebrity endorsement is an effective tool of persuasion and 20% of people disagree that it is one of the tool.

9. Celebrity endorsement affects my purchase decision while going for the purchase

of automobile products.

Preference %tage

Strongly agree 30Agree 15

Indifferent 10Disagree 35

Strongly disagree 10

30%

15%10%

35%

10%

degree of preference

strongly agreeagreeindifferntdisagreestrongly disagree

Interpretation:

This chart depicts that 45% of the people agree strongly or simply on the fact that their automobile purchase is being affected by celebrity endorsement,10 % of the people remain indifferent and 45% of the people disagree with this fact.

10. Celebrity persona you like most:

Celebrity persona %tage

Bollywood stars 55

Sports stars 25

Others 20

55%

25%

20%

celebrity persona

bollywood stars sports star none of the above

Interpretation:

 This pie-chart depicts that majority of people like to see bollywood stars to endorse their  brands and 25% of them sports star. While remaining 20 % don’t want to any celebrity endorsing their brand.

11. While purchasing a new vehicle do you believe what the brand endorsers communicate?

Response %tage

everytime 40

rarely 25

never 35

40%

25%

35%

response

everytime rarely never

Interpretation:

This pie-chart depicts that 40% of people follow their favorite celebrity every times while going for the purchase of new automobiles. That means frequency is pretty large. On the other hand 25% of the people rarely follow their favorite celebrity. While 35% of the people doesn’t follow any celebrity for purchasing any of the automobile vehicle every time.

12. Identify the following taglines of various automobile products:

“More Car par car…………………”

“The sun-shine car ……………….”

“Why should boys have all the fun?…………………..”

“ What role you goanna play?……………………………”

 

Interpretation:Out of 100 respondents, 30 were able to identify the celebrity in whole 4 ads, 30 were able to identify 3, 20 were able to identify 2 and 10 were there who identified only 1 ofthe ad. 10 people were there who weren’t able to identify even a single celebrity. Majority of the respondent were quite familiar with Priyanka Chopra’s “ Why should boyhave all the fun?” So majority of the respondents were able to recognize the celebrity used in the advertisement so it clearly tells that celebrity endorsement act as source of  brand-building.

Questionnaire

Dear Respondents, I, Payal Rai, student of MMM, am conducting a survey on “Impact of celebrity endorsement on buying behavior of customers and as a source of brand building”. For this purpose I need your cooperation in fulfilling this questionnaire. It will take few minutes of your precious time. It is make sure that information obtained is for general purpose only.

1) Name of the respondent……………………

2 ) W h a t i s y o u r o c c u p a t i o n ?  

Business Class

Service Class

Student

Others

3 ) W h a t   i s   y o u r   a g e ?

18-25

26-32

32-39

More than 40

4 ) W h a t   i s   y o u r   g e n d e r ?

Male

Female

5) What type of vehic le do you cur ren t ly own?

Two-wheeler 

Four-wheeler 

Both

6) What factor affects your buying behavior toward this purchase?

Price

Opinion-leader 

Celebrity endorser 

Brand name

7) Do you like to see any celebrity endorsing your brand on television?

Yes

No

Can’t say

8) “Celebrity endorsement is an effective tool of persuasion of buying vehicle” Rate this statement.

Strongly agree

Agree

Indifference

Disagree

Strongly disagree

9) “Male endorser is more effective as compared to female endorser.” Rate this statement.

Strongly agree

Agree

Disagree

Findings:After completing survey I found that:

Brand name and celebrity endorser are two factors that people consider before making a purchase intention of automobile vehicle.

Maximum number of people wants to see celebrity endorsing their automobile vehicles that means they have high involvement with the celebrities.

One of the abstract finding of the survey was regarding people’s orientation towards gender biasness. This finding clearly indicated that people like to see male celebrities endorsing automobiles than that of female celebrities.

Most no. of people believe that celebrity endorsement is an effective mean of  persuasion i.e. it convey the message clearly to the target audience regarding product offerings and persuade them to go for the purchase.

It was found that while making every new purchase of an automobile most no. of people believe that what the celebrity endorser speaks the truth.

The results of brand recall were astonishing most no. of people were able to recognize the celebrities endorsing the given advertisement. So it showed that celebrity endorsement is a source of celebrity endorsement.

Customers are very sensitive about matching the celebrity brands to make it more believable.

CONCLUSION

Despite the obvious economic advantage of using relatively known personalities as endorsers in advertising campaigns, the choice of celebrities to fulfill that role has become common practice for brands competing in today's cluttered media environment.

There are several reasons for such extensive use of celebrities. Because of their high profile, celebrities may help advertisements stand out from the surrounding clutter, thus improving their communicative ability.

A brief assessment of the current market situation indicates that celebrity endorsement advertising strategies can, under the right circumstances, indeed justify the high costs associated with this form of advertising.

Celebrity endorsement if used effectively, makes the brand stand out, brand recall and facilitates instant awareness.

To achieve this, the marketer needs to be really disciplined in choice of a celebrity.

Hence the right use of celebrity can escalate the Unique Selling Proposition i.e. it can act as a source of brand-building of a brand to new heights; but a cursory orientation of a celebrity with a brand may prove to be claustrophobic for the brand.

It was found that people love to see celebrities endorsing their brands so the involvement of common man is pretty high with these celebrities.

Bibliography

1. Websites

www.wikipedia.com

www.youtube.com

2. Books

Research Methodology

Dr. Kirti Gupta (Nirali publications)

Research Methodology

Thakur publications

Philip Kotler, Kerin Lane Keller: Marketing Management, 2008

3. Search Engine

www.google.com