PRODUCT AND BRAND MANAGEMENT
TERM PAPER
ON

CELEBRITY ENDORSEMENT

SUBMITTED TO:SUBMITTED BY:-

Dr. AnurupaB.Singh,
Progra...
CELEBRITY ENDORSEMENT
“Beauty is a greater recommendation than any letter of introduction”
-Aristotle
Abstract
Aristotle said, “Beauty is a greater recommendation than any letter of introduction.” This
couldaptly summarize w...
Introduction
Everyday consumers are exposed to thousands of voices and images in magazines,
newspapers, and on billboards,...
Strategic Positioning and effective communication are the two most important “mantras”
guiding brand success in today’s co...
Actor: A Celebrity may be asked to present a product or service as a part of character
enactment rather than personal test...
a moreeffective and coordinates mechanism than messages targeted at separatecustomer groups
with common messages. A custom...
(B) The Match-up Hypothesis:
Several Research studies have examined the congruency betweencelebrity endorsers and
brands t...
survey of the television viewer. The basic rating called aQ rating, is obtained by dividing the
number who rated as “one o...
message and the role ofthe celebrity in selling the brand. The celebrity activity becomes
anaddiction and the task to find...
c) Quick Connect: The communication process tends to hasten up dueto the more
presence of a celebrity. This is because the...
References
Ohanian, Roobina (1991), “The Impact of Celebrity spokespersons” Perceived
Imageon Consumers’ Intention to purc...
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Transcript of "Report on Celebrity Endorsement"

  1. 1. PRODUCT AND BRAND MANAGEMENT TERM PAPER ON CELEBRITY ENDORSEMENT SUBMITTED TO:SUBMITTED BY:- Dr. AnurupaB.Singh, Programme Coordinator, MBA (M&S) Gurjot S. Khalsa-112C34 Sai Praveen -112D23 SumitNandal -112D27 MehakKalra -112E10 PalashVerma -112E35 MBA GEN. 2012-14
  2. 2. CELEBRITY ENDORSEMENT “Beauty is a greater recommendation than any letter of introduction” -Aristotle
  3. 3. Abstract Aristotle said, “Beauty is a greater recommendation than any letter of introduction.” This couldaptly summarize why innumerable products are endorsed by celebrities, with or without a significant need or benefit from the same. Similarly every product has an image. The consumer tries to consume a brand which has themaximum fit with his/her own personality/image. The celebrity endorser fits in between thesetwo interactions, where he tries to bring the image of the product closer to the expectation of theconsumer, by transferring some of the cultural meanings residing in his image to the product. Now, despite the potential benefits derived from celebrity endorsements, they increase amarketer’s risk manifolds and should be treated with full attention and aptitude. A brand 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 overthe 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 newdimension is added to this process and helps in achieving a holistic view of the impact whichcelebrities generate in every sphere and segment through their well-versed endorsements.
  4. 4. Introduction Everyday consumers are exposed to thousands of voices and images in magazines, newspapers, and on billboards, websites, radio and television. Every brand attempts to steal at least a fraction of a person’s time to inform him or her of the amazing and different attributes of the product at hand. The challenge of the marketer is to find a hook that will hold the subject’s attention. In helping to achieve this, use of celebrity endorsers is a widely used marketing strategy. In this modern age, people tend to ignore all commercials and advertisements while flippingthrough the magazines and newspapers or viewing TV. But even then, the glamour of a celebrityseldom goes unnoticed. Thus, celebrity endorsement in advertisement and its impact on theoverall brand is of great significance. In this process, the companies hire celebrities from aparticular field to feature in its advertisement campaigns. The promotional features and images ofthe product are matched with the celebrity image, which tends to persuade a consumer to fix uphis choice from a variety of brands. Although this sounds pretty simple, but the design of suchcampaigns and the subsequent success in achieving the desired result calls for an in-depthunderstanding of the product, the brand objective, choice of a celebrity, associating the celebritywith the brand, and a framework for measuring the effectiveness. Every product has an image. The consumer tries to consume a brand which has the maximum fit with his/her own personality/image. The celebrity endorser fits in between these two interactions, where he tries to bring the image of the product closer to the expectation of the consumer, by transferring some of the cultural meanings residing in his image to the product.In India advertisers pour croresof rupees every year into celebrity advertising. Think of Sachin Tendulkar -he means Pepsi in soft drinks, Boost in malted beverages, Fiat Palio in cars, TVS victor in two wheelers, Colgate Total in toothpaste, Britannia in Biscuits, Visa in credit cards, Airtel in mobile services and many more brands.
  5. 5. Strategic Positioning and effective communication are the two most important “mantras” guiding brand success in today’s competitive marketing environment. Corporate are ensuring all possible efforts to promote their brands and to grab the customer’s mind share. The impetus is on attracting the customer’s attention and developing positive associations not just to influence recall but also to induce trial and eventually effect purchase decisions in a market where advertising plays a vital role in coordinating consumer purchases, it becomes pertinent for companies to induct all possible measures to influence, motivate and inculcate desire to purchase, in the customer through an effective advertising campaign. Who is a celebrity? Celebrities are people who enjoy public recognition by a large share of a certain group of people whereas attributes like attractiveness, extraordinary lifestyle are just examples and specific common characteristics cannot be observed though it can be said that within a corresponding social group celebrities generally differ from the social normand enjoy a high degree of public awareness (Schlecht, 2003).This is true for classic forms of celebrities like actors (ex Sharukh khan, Amitabh Bachhan), models (John Abraham,MalaikaArora, DiyaMirza) Sports athletes (ex. Sachin Tendulkar, SaniaMirza) entertainers (BarkhaDutt, ShekharSuman) and Pop Stars (Mika, DailerMehndi) but also for less obvious groups like businessmen (ex DirubhaiAmbani) or politicians (Laloo Prasad Yadav) Besides these there are fictional celebrities like Ronald McDonald, Fido dido, Gattu, AmulGirl, Pillsbury doughboy and the like. Celebrities appear in public in different ways. A firm that decides to employ a celebrity to promote its products or services has a choice of using the celebrity as : Testimonial: If the celebrity has personally used a product or service and is in a position to attest its quality,then he or she may give a testimonial citing its benefits. For instance AishwaryaRai endorses Lux by testifying the quality of the product as it forms a part of her consumption basket. Endorsement: celebrities often lend their names to ads for product or services for which they may or may not be the experts For instance SachinTendulkar has been endorsing the Palio brand of Fiat.
  6. 6. Actor: A Celebrity may be asked to present a product or service as a part of character enactment rather than personal testimonial or endorsement. For instance SwetaTiwari of “Prerna fame” (KasuatiZindagiki) enacts as a housewife for Nirma’s ad campaign. It has nothing to do with her on screen or off-screen image In fact she just enacts the characterand expectations of a normal housewife from a detergent bar. Spokesperson: A celebrity who represents a brand or company over extended periods of time often in print and TV ads as well as in personal appearances is usually called a company’s spokesperson. (Schiffman and Kanuk, 1997)The reason for using celebrities a spokesperson goes back to their huge potential influences. Compared to other endorsers, types,famous people achieve a higher degree of attention and recall. Using a celebrity in advertising is therefore likely to positively affect consumer’s brand attitude and purchase intentions. Why Endorsements? Celebrity Endorsements act as a credible means of “money burning”.This is because this is a world of products for which the value a consumerobtains from purchasing any given variety. This could be for reasons of social standing-People want to wear the “right” clothes, drink the “right” beverages and use the “right” fragrances. Specifically a consumer thatobserves messages for two different firm’s products, one product’s message containing a celebrity endorsed and the other not, believes the celebrityendorsed product will have more purchases and so be of highervalue.(Clark &Horstman, 2003) Celebrity endorsement is more likely to be observed for those productshaving a high price-production cost margin and on a large customer base.In short, celebrity endorsements are more typical for nationally marketedproducts then for local or niche market products and for products such asrunning shoes, soft drinks and the like for which the price cost marginsare apparently large. Promoters of certain products require co-ordination over multiplecustomer groups different age, income, education groups or groups in different location. Example, Credit Card. With a product of this sort acommon set of advertising messages communicated to all custom is
  7. 7. a moreeffective and coordinates mechanism than messages targeted at separatecustomer groups with common messages. A customer in one groupreceiving a message knows that customer in other groups are also receivingthe message. The challenge with common message is of significant audiencereach in the various customer groups at low cost. Because the celebrity isrecognizable globally, it is a low cost way to achieve cross group coordination(Clark &Horstman, 2003). Selecting the best endorser Any promotional campaign needs several issues to be addressed to, therebyempowering promotional planners to know how decisions about thedifferent controlled or independent variables of the communication processthat influence the stages of the response hierarchy in persuading thereceiver. Several models have been developed that give insight toindependent variable effecting celebrity endorsement and hence itsefficacy. Two important ones are: (A) Source creditability and attractiveness: The effectiveness of a message depends on the perceived expertiseand trustworthiness of an endorser. The central goal of advertising is thepersuasion of customers i.e., the active attempt to change a modifyconsumers attitude towards the brands (Soloman, 2002). Hence in orderto convince the target audience of the attractiveness of the company’sbrand. The creditability of the advertisement is immense. Pursuing acelebrity-endorsed strategy enables advertisers to project a credible imagein terms of expertise, persuasiveness, trustworthiness and objectiveness.(Till and Shimp, 1998).Source attractiveness refers to the endorsers physical approachpersonality, likeability, and similarity to the receiver, thus to the perceivedsocial values of the source (Soloman, 2002) Trustworthiness refers to thehonesty and integrity of the spokesperson. The model basically focuses on the belief that persons who perform well on one dimension are assumedto excel on others as well. However, as proved by Ohanian (1991) in herstudy each source has different effects on consumer’s brand perceptionthereby making it necessary to pursue a systematic strategy of celebrityspokesperson selection.
  8. 8. (B) The Match-up Hypothesis: Several Research studies have examined the congruency betweencelebrity endorsers and brands to explain the effectiveness of using famouspersons to promote the brands (Till and Buster, 1998), (Till and Shimp, 1998)Results show that a number of celebrity endorsements proved verysuccessful, whereas other completely failed.The match-up hypothesis specifically suggests that the effectivenessdepends on the existence of a “fit” between the celebrity spokespersonand endorsed brand (Till and Buster, 1998). Though Oharian (1991)acknowledges a popular person’s ability to create awareness and initialinterest for an advertisement she concludes that this may not necessarilychange consumer’s attitude towards the brands. The model emphasizes that the physical attractiveness of a celebrity endorser will enhanceevaluations of the products characteristics only if the characteristics ofthe product “match-up” with the image conveyed by the celebrity. Hencean extension beyond attractiveness and creditability towards aconsideration has to be done in terms of making the entire image of thecelebrity with the endorsed brand. Brand Endorsement is a way to get thebrand noticed amidst the clutter that is there in the market place. Synergyis therefore required between brand and celebrity. The celebrity actuallyhelps in accelerating the brand image formulation process. At the sametime advertisement argue that celebrities come with loads of liabilities thatare hard to ignore. The decision of selecting the best endorser is thus a pertinent issuefixed by marketers & adventures for their brand promotion. Advertiserspoint out to the 3Cs that enjoy mass adulation in Indian sub continental,Cricket, Cinema and Curry. In fact Mr. JaydeepDasgupta, Associatebranch Director-Mumbai, Mudra feels that branding plays a key role in creating a celebrity aura. Today Cricketer and Film stars are groomed tobe brand themselves and hence are marketed well. In other words, thecelebrity himself/herself should be a strong brand and the attributes ofthe celebrity brand should match the attribute of the product brand beinghighlighted. To help select a celebrity endorser, many companies and theiradvertising agencies rely on Q ratings that are commercially availablefrom a New York based firm known as marketing, evaluates Inc.(Belch &Belch). This firm annually determines a familiarity and likeability ratingof top male & female personalities (and cartoon characters) based on amail questioners
  9. 9. survey of the television viewer. The basic rating called aQ rating, is obtained by dividing the number who rated as “one of myfavorites” by those who indicated that they were “totally familiar” withthe personality. The survey is widely used by marketers and agencies toselect celebrity endorsers and is used by T.V. Network and Hollywoodproducers to cast their shows & movies. All efforts to select an ideal celebrity as a brand endorseris able toinfuse and bring about a change in the fortunes of a brand. Besides this itis important to judge the compatibility of the endorser with the productand acceptance of the individual buy the target audience before selectingthe stage endorsers. Endorsement: Risk vs. Returns The basic assumption underlying celebrity endorsement is that thevalue associated with the celebrity is transferred to the brand and thereforehelp create an image that can be easily referred by consumers.Consequently by association the brand can very quickly establish thecreditability get immediate recognition and improve sales. However, thereare many risks associated with such endorsers. The brand could slide downjust as quickly as it moved up the consumers mind. There are many casesof brands failing in the market place despite famous celebrities endorsingthem. Risks a) Celebrity overshadows the brand: In certain cases where the celebrityvalues category benefit and brand values are not closely linked. Thereare chances that the celebrity is remembered more than a brand.Cyber media research study reveals that 80% of the respondentsapproached for research remembered the celebrity but could notrecall the brand being endorsed. b) Necessary Evil: Marketing have felt that once the brand rides theback of celebrity it becomes difficult to promote it without the star asit becomes difficult to separate the role of
  10. 10. message and the role ofthe celebrity in selling the brand. The celebrity activity becomes anaddiction and the task to find substitute becomes more and moredifficult. c) Celebrity creditability a question mark for the competent customer: Today’smarketing endorsement has to deal with a competitive and knowledgeable customer who has begun to voice his opinion abouttheir perception about endorsing a brand. Celebrity is said to befool the public as he is paid to sell and communicate good things aboutthe brand. Hence the question of creditability of the celebrity beingchosen to protect the brand is becoming pertinent. d) Conflicting Image: A mix match between the image of the credibilityand the product can damage both. Unless there is a synergy between celebrity’s own image and that of product category the strategy ofendorsement is rendered futile. e) Multiple Endorsements: The poly endorsement has led to a celebrityclutter. A Celebrity endorsing multiple products and multi brands in acategory have left the customer confused and have led to dilution in the celebrity’s value. f) Influence of Celebrity scandals and moral violation on brands: A numberof entertainers and athletes have been involved in activities that couldembarrass the companies whose products the endorsed. When the endorser’s image is finished,it actually leads to a greater fall in imagefor the brand. For instance Azharuddin was charge with bettingand match fixing, which created negative feeling and repulsivethoughts among people for the products he was endorsing. Returns a) Build Awareness: A new brand can benefit greatly if a celebrityendorses it. It can attract the customer’s attention and inquisitivenessto see what product is being endorsed. Research has shownconsumers have a higher level of message recall for products thatare endorsed by celebrities. b) Connects Emotionally: Some celebrities like Shahrukh Khan, AmitabhBachchan command great adoration among people. Such celebritiescan positively influence their fans etc. a great extents and henceend to even connect with the brand emotionally because of theirstar enduring it.
  11. 11. c) Quick Connect: The communication process tends to hasten up dueto the more presence of a celebrity. This is because the star carryingthe message tends to click with the customer more. Because oflikeability, recall attractiveness and creditability thereby helping thecompany to clearly and quickly pass on the message to the targetcustomers. d) Means of Brand different ion: Using a celebrity is a source of branddifferentiation. In a category where a brands is suing a celebrity thefirst that picks one up could use it differently itself in the market thesame was done by Boost in the malted beverage category. e) Source of Imitation and hence inducing increased product usage: Celebritiesactually tend to become models or idols for the target audience whotend to start using the product just because the celebrity name isattached with it. For instance, Lux has been used by many as it is abeauty soap recommended by the beauty queen, AishwaryaRai. f) Better Brand Image: the use of celebrities could also bring in positiveimage among the masses for brand. The credibility and authenticityattached with Amitabh Bachchan has inculcated trust for ICICI, NerolacPaints and many others. Conclusion An assessment of current market situation indicated that celebrityendorsement and advertising strategies if correctly blended in terms ofmarrying the strengths of the brands with the celebrity’s quality indeedjustify the high cost associated with this form of advertising. However,advertising needs to be aware of the complex processing underlyingcelebrity processing endorsement by gaining clarity on described conceptsof celebrity source creditability and attractiveness, match-up hypothesis,multiple product endorsement etc. Marketer has to decide how far the benefits outweigh the risks associated. Advertisers agree that celebrityendorsement does not itself guarantee sales. It can create a buzz and makea consumer feel better about the product, which in turn has to come toexpectation of customers as a real star by delivering the promise. Therehave been instances where the endorsement or real consumers have startedworking better than celebrity endorsers. In fact much research needs tobe done on customer testimonials, which tend to induce better creditabilityand helps in carving the competent, rational, knowledgeable customer oftoday who is said to be the real hero.
  12. 12. References Ohanian, Roobina (1991), “The Impact of Celebrity spokespersons” Perceived Imageon Consumers’ Intention to purchase, “Journal of advertising Research, 31(1),46-53. Daneshvary, Rennal and R.KeithSchwer (2000) “The Association endorsement andConsumers Intention to purchase,” Journal of Consumer Marketing, 17(3), 203-213. Clark, Robert C. and Horstman, Ignatius J. (2003) Celebrity Endorsents (www.bu.edu/e.con/seminar/micro/pdffav) celebendorse.bu.pdf “Is celebrity advertising effective Business Standards” Dec 05, 2003(Christina, Schlecht) New York Jun 17,2003www.global <http://www.global>brands.org/research/working/celebrity-brarely.pdf Tom, Gail, Rebecca Clark, Laura Elmer, Edward Greech, Joseph Maselli, Jr. andHarmonaSandhar (1992), “The use of created versus celebrity spokespersonin advertisements”, Journal of consumer Marketing, 9(4), 45-51 Menon, M.L.Boons and H.Rogers, “Celebrity Advertising: An assessment or relative effectiveness” Mimeo 2001. Misra,S and S,. Beatty, “Celebrity spokesperson and Brand Congruence”. Journal ofBusiness Research, 21 (1990) pp159-173. Rateni, Prachi (2005), “Riding the wave,” Brwach. Hindustan Times Jan30, 2005.Pg.4-10,“Truth About celebrity ads,” Business World, 12 April, 2004 (Cyber media researchstudy) Till, Brian D. and Michael Buster (1998),”Matching Products with Endorser:Attractiveness Versus Expertise,” Journal of Consumer Marketing, 15(6), 576-58

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