Impact of celebraity endorsment

COURSE OF INDEPENDENT STUDY

A REPORT ON

“A STUDY ON THE IMPACT OF CELEBRITY ENDORSEMENT ON
BUYING BEHAVIOR OF CONSUMERS AND AS A SOURCE OF BRAND-BUILDING”

SUBMITTED BY

SAMARPITA BHATTACHARYA

ROLL NO – 09240

1|Page

Contents
DECLARATION ........................................................................................................................................... 5
ACKNOWLEDGEMENT ............................................................................................................................... 6
Objectives of study: .............................................................................................................................. 7
Scope of the study: ................................................................................................................................... 7
Research Methodology: ............................................................................................................................ 7
Data Sources: ............................................................................................................................................ 7
Limitation: ................................................................................................................................................. 8
Population of the study ............................................................................................................................ 8
Sampling Size: ........................................................................................................................................... 8
Sampling Technique: ................................................................................................................................. 8
Sampling Frame: ....................................................................................................................................... 8
DATA PROCESSING .................................................................................................................................... 8
Analytical Tools ......................................................................................................................................... 9
Executive Summary................................................................................................................................. 10
Introduction ............................................................................................................................................ 12
'Celebrity Endorsement' ......................................................................................................................... 13
Difference Between Brand Ambassador & Brand Face .......................................................................... 13
Scope of Celebriity Endorsement: ........................................................................................................... 14
Impact Regions of Celebrity Endorsement ............................................................................................. 15
Compliance, Identification & Internalization .......................................................................................... 16
Effectiveness of Celebrity Endorsers ...................................................................................................... 17
Brand Image Formation & Brand Preference ......................................................................................... 18
Sturcture of Indian automobile sector and some facts: ........................................................................... 20
Data analysis and interpretation: ............................................................................................................. 22
Findings: .................................................................................................................................................. 37
Conclusion: .............................................................................................................................................. 38
Recommendations: .................................................................................................................................. 39
cases ........................................................................................................................................................ 40
Bibliography ............................................................................................................................................ 44
Appendix ................................................................................................................................................. 45
Questionnaire ......................................................................................................................................... 46

2|Page

DECLARATION

I, “Samarpita Bhattacharaya”, hereby declare that the work presented herein is
genuine work done originally by me and has not been published or submitted
elsewhere for the requirement of a degree programme. Any literature, data or
works done by others and cited within this dissertation has been given due
acknowledgement and listed in the reference section.

_______________________

(Student's name & Signature)

_______________________

(Registration No.) 09240
Date:__________________

5|Page

ACKNOWLEDGEMENT

It has been a great pleasure for me to work on this project. My sincere thanks tot.Director Kamal
Ghosh Ray for giving me an opportunity to work on this project whereby I was given an
exposure to study the impact of celebrity endorsement as a source of brand building and on
consumers buying behavior in automobile Industry which helped me to increase the span of our
knowledge and developed my thinking on more practical lines. I thank her for her guidance and
support throughout the time when I was working on this project. I am also thankful to dean
under whose valuable guidance I learnt a lot and which will help me out in the coming days.

I express my sincere thanks to my parents, friends who encouraged me throughout
this project and always with me.

6|Page

Objectives of study:

The objectives of the study are as follows:
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.

Scope of the study:
As due to time constraint it is very difficult to cover the entire sectors so I decided to
cover automobile sector. I am covering automobile sector as whole and not concentrating
on any particular category.

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

7|Page

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 Jalandhar 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.

Population of the study
Youth (Male) of Jalandhar 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.

DATA PROCESSING
Daily data will be entered into MS-Excel sheets. After the exhaustion of the specified
geographical area this data will be analyzed using simple graphical and tabulation
techniques. The data sheets mentioned here will be attached in the annexure of the report.

8|Page

Analytical Tools
After collection of data another work necessary for any data collector is to correctly analysis that
data. So statistical tolls helps us to correctly analysis the data .As I will using here the software
named SPSS for analysis of the data XLSTAT.
I will use following statistical tools:
Hypothesis Testing
Chi-square test will be used when the set of observed frequencies obtained after experimentation
have to be supported by hypothesis or theory. The test is known as X2- test of goodness of fit
and is used to test if the deviation between observation (experiment) and theory may be
attributed to chance (fluctuations of sampling).χ2 also enables us to explain whether or not two
attributes are associated or related to each other. To test the goodness of fit : It helps to test
goodness of fit by using null and alternate hypothesis.

STATISTICAL TOOLS TO BE USED
1. Chi –Square Test
Procedure:
(1) Set up the null hypothesis that there is no significant difference
between the observed and expected value.
(2) We compute the value of CHI- square by using the formula
CHI-square = Σ χ2=Σ (( Oi- Ei)2/Ei)
O- Observed value
E- Expected value
Degree of freedoms=(R-1)(C-1)
Level of significance=5

9|Page

Executive Summary

India is a country where people love to live in dreams. They worship celebrities. Celebrities may
be Cricket stars like Sachin Tendulkar, Mahinder Singh Dhoni or Film Stars like Salman Khan,
John Ebrahim. 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 this
celebrity endorsement 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 vary 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.

Lot of researchers has done extensive research work regarding celebrity endorsement, its
influence over customers purchasing decisions. After studying the whole literature related
to celebrity endorsement I found a gap in the study. This gap was whether celebrity endorsement
acts as a source of brand-building. So I decided to undertake research on this particular aspect.

This research is limited to Hyderabad City only due to various constraints like time available,
scarcity of resources etc. From this we can make an attempt to generalize the result to the whole
universe. After conducting research it was found that brand name and celebrity endorser are the
two key factors that play an important role in affecting purchase intention. Majority of the people
want to see their favorite celebrity endorsing their brands.

During our research an important factor revealed that mostly people want to see male celebrities
endorsing automobile vehicles rather than female. This fact is also supported by advertisement of
glamour motorbike which have baseline “ Definitely male. This particular advertisement created
hot spaces at Cannas festival. There are large no. of mediums of persuasion but celebrity
endorsement is an effective mode of persuasion.
10 | P a g e

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 everytime. 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. From that it was concluded that mostly people want that instead of spending huge
amount of money onto 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.

11 | P a g e

Introduction

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? It may be brand name,
advertisement, royal heritage and may be celebrity endorser who endorse them. e.g. Raid and
Taylor has the rich heritage of ropping in various cascades of James Bond 007 as their brand
endorser and it has helped them strongly to build there brand. 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. Every brand attempts to
steal at least a fraction of an unsuspecting person's time to inform him or her of the amazing and
different attributes of the product at hand. 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. Also from a
marketing communications (marcoms) perspective, it is vital that firms design strategies that help
to underpin competitive differential advantage for the firm's product orservices. Accordingly,
marcom activities back-up other elements in the marketing mix such as designing, branding,
packaging, pricing, and place The term 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 (Friedman and Friedman, 1979). This is true for classic forms of
celebrities, like actors (e.g., Amitabh Bachchan, Shahrukh Khan, Rani Mukherjee Aamir Khan and
Pierce Brosnan), models (e.g., Mallaika Arora, Lisa Ray, Aishwarya Rai, Naomi Campbell,
Gisele Buendchen, etc), sports figures (e.g., Sachin Tendulkar, Zaheer Khan, Sourav Ganguly,
Anna Kournikova, Michael Schumacher, Steve Waugh, etc), entertainers (e.g., Cyrus Broacha,
Oprah Winfrey, Conan O'Brien), and pop-stars (e.g., Madonna, David Bowie) - but also for less
obvious groups like businessmen (e.g., Donald Trump, Bill Gates) or politicians. Celebrities
appear in public in different ways. First, they appear in public when fulfilling their profession,
e.g., Vishwanathan Anand, who plays chess in front of an audience. 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 on events and the 'private life' of celebrities
through mass-media channels (e.g., Smriti Irani being regularly featured in various publications).
12 | P a g e

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." 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. Some time people have this
habit of relating this vary term of celebrity endorsement with brand face. But this is not so.

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

13 | P a g e

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 fades 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. Apropos to this context, the topic “Impact of celebrity
endorsement on overall brand”, is a significant one. The crescendo of celebrities endorsing
brands has been steadily increasing over the past years. Marketers overtly acknowledge the
power of celebrities in influencing consumer-purchasing decisions. It is a ubiquitously
accepted fact that celebrity endorsement can bestow special attributes upon a product that it
may have lacked otherwise. But everything is not hunkydory; celebrities are after all mere
mortals made of flesh and blood like us. If a celebrity can aggrandize the merits of a brand,
he or she can also exacerbate the image of a brand

Celebrity endorsements are impelled by virtue of the following motives:
 Instant Brand Awareness and Recall.
Celebrity values define, and refresh the brand image.
Celebrities add new dimensions to the brand image.
 Instant credibility or aspiration PR coverage.
 Lack of ideas.
Convincing clients.

Scope of Celebriity Endorsement:
The use of testimonials by advertisers dates back to the 19th century when medicines were
patented. Firms have been juxtaposing 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

14 | P a g e

through celebrity endorsement is a cumulative of the following 14 attributes. Greater the score of
the below parameters,greater are the chances of getting close to the desired impact.

Impact Regions of Celebrity Endorsement

While brand marketers with positive experiences would tend to believe that celebrity
endorsements work and some would disagree, but one would be sure that the magnitude of its
impact is difficult to measure even if sales figures are at our disposal. However, we can
understand why it works and the impact regions of celebrity endorsement.
The illustrations below explain the same: -

15 | P a g e

How Celebrity Endorsements Influence the Consumer
The basis for the effectiveness of celebrity-endorsed advertising can be linked toKelman's
processes of social influence as discussed by Friedman and Friedman.According to Kelman,
there are three processes of social influence, which result in an individual adopting the attitude
advocated by the communicator:

Compliance, Identification & Internalization

These latter two processes are particularly applicable to celebrity-endorsed advertising.
Compliance infers that another individual or group of individuals influences an individual cause
he or she hopes to achieve a favourable reaction from this other group. This process of social
influence is not directly applicable to celebrity advertising because there is little, if any,
interaction between the celebrity and the consumer.
Identification applies to the situation wherein the individuals emulate the attitudes or behaviour
of another person or group, simply because they aspire to be like that person or group. This

16 | P a g e

process is the basis for referent power. It was found that celebrities are more commonly liked
than a typical consumer spokesperson.
Internalization as a process of social influence is said to occur when individuals adopt the
attitude or behaviour of another person because that behaviour is viewed as honest and sincere
and is congruent with their value system. The effectiveness of celebrity advertising traditionally
has not been strongly linked to this process, as a celebrity's reason for promoting a product can
just as easily be attributed by the consumer to an external motive (i.e., payment of fee) as to an
internal motive (i.e., the celebrity's true belief in the value and benefit of the product). An
important issue of concern relates to the development of a strategy for use in Celebrity
Advertising, which benefits from the dramatic impact of dual support of both the identification
and internalization processes of social influence. Celebrities are well-liked, but the techniques
that can be used to enhance their credibility as spokespeople, and therefore, tie-in more closely
with the internalization process needs to be looked into.

Effectiveness of Celebrity Endorsers

A study conducted by Charles Atkin and Martin Block focussed 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. Research conducted by
social psychologists over the past 30 years demonstrates that a source perceived as highly
credible is more persuasive than a low credibility sender (Hovland and Weiss, 1951; McGuire,
1969; Hass, 1981). The sources that companies use to present their advertising message typically
attempts to project a credible image in terms of competence, trustworthiness or dynamism.
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. Friedman, Termini and
Washington cite a 1975 study showing that celebrities are featured in 155 of prime-time TV
commercials. A later survey reported that this proportion was up to 20% (Advertising Age,

17 | P a g e

1978). 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: -
o They attract attention to the advertisement in the cluttered stream of messages
o They are perceived as being more entertaining
o They are seen as trustworthy because of apparent lack of self-interest.
o The final element is 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 (Kamen et
al, 1975). Despite the use of famous endorsers, there is little published evidence regarding the
effectiveness. In one experiment, an advertisement for a fictitious brand of Sangria wine featured
an endorsement attributed to either a celebrity (actor - Al Pacino), a professional expert, the
Company President, a typical consumer and no source (Friedman, Termini and Washington,
1977). College students read the ad and gave the ad 0-10 scales of believability, probable taste,
and intent to purchase. Across these three measures, the celebrity condition produced the highest
scores. While the 'no-source' control group had a purchase intention rating of 2.7, the subjects
exposed to the actor scored 3.9. Believability was rated 2.8 by control subjects versus 4.1 by
those seeing the celebrity endorsement. For taste, the baselines of 4.0 compares to the celebrity
group score of 5.6. None of the other three endorsers were as influential as the celebrated person

Brand Image Formation & Brand Preference

Having a congruent image between the brand and celebrity does not guarantee any
positive effect on consumers' brand preferences. The fundamental question is - what a
brand image really does to consumers? Baran and Blasko explained, "Since most
products aren't special, most advertising does all that so-called image stuff... There's no
information about the product, there's only information about the kind of people who
might be inclined to use the product. The view is echoed by Feldwick (1991)
who has suggested that the subjective experience of using a brand can be different from
the subjective experience of using an identical product without the brand reassurance. In
the case of using celebrity advertising to build brand image, the effects are examined with
a social psychological framework.
Before we can scrutinize the effects of celebrity endorsement on the overall brand, we

18 | P a g e

have to ferret the implicit nuances that act as sources of strong brand images or values: -
Experience of Use: This encapsulates familiarity and proven reliability.
 User Associations: Brands acquire images from the type of people who are seen using them.
Images of prestige or success are imbibed when brands are associated with glamorous
personalities.
Belief in Efficiency: Ranking from consumer associations, newspaper editorials, etc.
Brand Appearance: Design of brand offers clues to quality and affects preferences.
 Manufacturer’s Name & Reputation: A prominent brand name (Sony, Kellogg’s, Bajaj,
Tata) transfers positive associations. The celebrity’s role is the most explicit and profound in
incarnating user associations among the above mentioned points. To comprehend this, let us
analyze the multiplier
effect formula for a successful brand: -

S=P* D*AV -- the multiplier effect
Where
S is a Successful Brand
P is an Effective Product
D is Distinctive Identity
AV is Added Values

The realm of the celebrity’s impact is confined to bestow a distinctive identity and
provide AV to the brand; the celebrity does not have the power to improve or debilitate
the efficiency and features of the core product. Thus, we are gradually approaching an
evident proposition claiming, "The health of a brand can definitely be improved up to
some extent by celebrity endorsement. But one has to remember that endorsing a
celebrity is a means to an end and not an end in itself."
An appropriately used celebrity can prove to be a massively powerful tool that magnifies
the effects of a campaign. But the aura of cautiousness should always be there. The fact
to be emphasised is that celebrities alone do not guarantee success, as consumers
nowadays understand advertising, know what advertising is, and how it works. People
realize that celebrities are being paid a lot of money for endorsements and this knowledge

19 | P a g e

leads them to cynicism about celebrity endorsements.

Sturcture of Indian automobile sector and some facts:
Structure:

 The Indian automobile industry can be broadly classified into:

 2 /3 Wheelers

 Passenger Cars

 Commercial Vehicles (LCV/HCV/MCV)

 UV (Utility vehicles)

 Tractors

 The models in the car market can be fitted to different segments as given below:

Category Models
 Economy segment (upto Rs  Maruti Omni, Maruti 800 etc.
0.25mn)
 Mid-size segment (Rs 0.25-0.45  Fiat Uno, Hyundai Santro, tata
mn) Indica, Maruti Alto etc.
 Luxury car segment (Rs 0.45- 1mn)  Tata Indigo, Honda City,
Mitsibushi Lancer, Ford Ikon, Opel
Astra, Hyundai Accent & others
 Super luxury segment (above Rs  Mercedes Benz & other imported
1mn) models

20 | P a g e

 The economy segment has a very large foothold over the Indian automobile
market as compared to the mid-size and luxury segment.

Segment Market Share (%)
Economy 90.2
Mid-size and luxury 9.8
 Source: SIAM/ Auto Car India

21 | P a g e

Data analysis and interpretation:
1.Occupation of respondent:

Occupation %tage

Business Class 25

Service Class 25

Student 30

Others 20

22 | P a g e

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 %AGE
18-25 30

26-32 20

33-39 30

Above 40 20

Interpretation:
This pie-chart depicts that mostly respondents are young and while rest are above 25

23 | P a g e

years

3.Gender of the respondent:
GENDER %GE

MALE 65

FEMALE 35

Interpretation:

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

24 | P a g e

4.Type of Vehicle:

Vehicle %tage

Two-wheeler 45

Four-wheeler 35

Both 25

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.

25 | P a g e

5.Factors affecting purchase intention:

Factors %AGE

Price 20

Opinion-leader 15

celebrity endorser 35

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

26 | P a g e

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:

PREFERNCE %AGE

Yes 55

No 25

Cant say 20

27 | P a g e

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.

7.Male v/s Female celebrity endorser:

HYPOTHESIS TESTING

Step1: State Hypothesis:

Ho: Female celebrity endorser is more effective than that of male. .
Ha: Female celebrity endorser isn’t more effective than that of male.

Step 2: Set the Rejection criteria:
DF = 5-1 = 4
At alpha .05 and 4 degrees of freedom, the crtitical value from the chi square distribution
table is 9.49

Frequency Observed

Preference Male Female Row Total
Strongly Agree 25 05 30
Agree 05 15 20
Indifferent 10 10 20
Disagree 5 10 15
Strongly Disagree 10 05 15
Column Total 55 45 100

Frequency Expected

Preference Male Female Row Total
Strongly Agree 55*30/100=16.5 45*30/100=13.5 30
Agree 55*20/100=11 45*20/100= 9.0 20
Indifferent 55*20/100=11 45*20/100= 9.0 20
Disagree 55*15/100= 8.25 45*15/100=6.75 15
Strongly Disagree 55*15/100= 8.25 45*15/100=6.75 15
Column Total 55 45 100
Χ²-Calculation

Preference Male Female
Strongly Agree (25-16.5)2/16.5 (5-13.5)2/13.5

28 | P a g e

Agree (5-11)2/11 (15-9)2/9
Indifferent (10-11)2/11 (10-9)2/9
Disagree (5-8.25)2/8.25 (10-6.75)2/6.75
Strongly Disagree (10-8.25)2/8.25 (5-6.75)2/6.75
Chi-Square

Preference Male Female
Strongly Agree 4.38 5.35
Agree 3.27 4
Indifferent 0.09 0.11
Disagree 1.28 1.56
Strongly Disagree 0.37 0.45

Χ²= 20.85
Interpretation:
As the Chi-square test statistics 20.85 exceeds the critical value of 9.49 hence null
hypothesis is rejected and hence we reached at the result that our alternative hypothesis is
accepted. It is confirmed after the analysis that male celebrity endorser are more effective
than that of female celebrity.

8.Celebrity endorser as an effective method of persuasion:

Preference %age

Strongly Agree 45

Agree 15

Indifferent 10

Disagree 20

Strongly Disagree 10

29 | P a g e

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.

HYPOTHESIS TESTING


Ho: Celebrity endorsement is not an effective tool of persuasion to facilitate customer to go for
purchase. .
Ha: Celebrity endorsement is an effective tool of persuasion to facilitate customer to go for
purchase.

DF = 5-1 =
At alpha .05 and 4 degrees of freedom, the critical value from the chi square distribution
table is 9.49
Step 3: Compute the Test Statistics: χ² = Σ (O-E)2/E

Preference Observed Expected O-E (O-E)² (O-E)²/E
Strongly 45 20 25 625 31.25
Agree

30 | P a g e

Agree 15 20 -5 25 0.25
Indifferent 10 20 -10 100 5
Disagree 20 20 0 0 0
Strongly 10 20 -10 100 5
Disagree
χ²= 41.5

Interpretation:
As the Chi-square test statistics 41.5 exceeds the critical value of 9.49 hence null hypothesis is
rejected and hence we reached at the result that our alternative hypothesis is accepted. Hence it
can be concluded that celebrity endorsement is and effective tool of persuasion to facilitate
customer to go for purchase.

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

Preference %age
Strongly 30
Agree

Agree 15
Indifferent 10
Disagree 35

Strongly 10
Disagree

31 | P a g e

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.

HYPOTHESIS TESTING

Ho: Celebrity endorsement doesn’t affect purchase decision of automobile products. .
Ha: Celebrity endorsement affects purchase decision of automobile products.

DF = 5-1 = 4
table is 9.49


Preference Observed Expected O-E (O-E)² (O-E)²/E
Strongly 30 20 10 100 10
Agree
Agree 15 20 -5 25 1.25
Indifferent 10 20 -10 100 5
Disagree 35 20 15 225 11.25
Strongly 10 20 -10 100 5

32 | P a g e

Disagree

χ²= 32.5

Interpretation:
can be concluded that celebrity endorsement affects purchase decision of automobile products.

10.Celebrity persona you like most:

prefernce %age
Bollywood stars 55
Sports star 25
None of the above 20

33 | P a g e

HYPOTHESIS TESTING

Ho: People like to see bollywood stars endorsing their brand than sports star. .
Ha: People like to see sports stars endorsing automobile products than that of bollywood
stars.

DF = 5-1 = 4
table is 9.49


Celebrity Observed Expected O-E (O-E)² (O-E)²/E
persona
Bollywood 55 33.3 21.7 470.89 14.14
stars
Sports star 25 33.3 -8.3 68.89 2.06
None of 20 33.3 -13.3 176.89 5.31
the above
χ²= 21.51

Interpretation:
can be concluded that people like to see sports stars endorsing their products rather than
bollywood stars.

11. You follow your favorite celebrity while purchasing new automobile every time:

Response %tage

Every time 40

Rarely 25

34 | P a g e

Never 35

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 everytime.

12. Identify the following ads regarding various automobile products:

“More Car par car…………………”
“The sun-shine car ……………….”
“Why should boy 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 of the ad. 10 people
were there who weren’t able to identify even a single celebrity. Majority of the respondent were

35 | P a g e

quite familiar with Priyanka Chopra’s “ Why should boy have 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.

36 | P a g e

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 celebrity endorsement have an impact over the purchase of automobile
products. As large no. of people surveyed confirmed this fact.

 In country like India were Cricket is a religion and cricketers are worshiped as God. One of
the finding revealed that people admire sports player as better celebrity persona than that of
bollywood actor/actress.

 It was found that while making every new purchase of an automobile most no. of people
follow celebrity endorser while rest of them denied this fact.

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.

37 | P a g e

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.
But it would be presumptuous to consider celebrity endorsement as a panacea for all
barricades. Celebrity endorsement if used effectively, makes the brand stand out,
galvanizes 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. So marketers should use the right
celebrity matching with the product. During survey it was found that male celebrities are
considered to be better celebrity endorser than that of their female counterparts. This is
because lots of research regarding consumer’s behavior towards automobile indicates that
people view automobile as female so in order to attract the attention of target customers
they preferably use male celebrity endorser. Also it was found that people love to see
sports stars endorsing their automobile than bollywood stars. This is because of the fact
in India Cricket is very famous and people worship players like Sachin Tendhulkar,
Kapil Dev, Sourav Ganguly etc. So they love to see these players endorsing their
automobiles. At last I just want to say A celebrity is a means to an end, and not an end in
him/her

38 | P a g e

Recommendations:
After studying impact of celebrity endorsement on buying behavior of customers in automobile
sector and as a source of brand-building I want to suggest following recommendations:
 From study it was found that respondents were able to recognize the Priyanka Chopra’s
advertisement “Why should boys have all the fun” This advertisement was designed on such an
idea that everyone can recognize the brand of Scotty Pepp easily. So instead of hiring any
celebrity companies should try to create such nice innovative idea and then match the suitability
of celebrity with the idea. This is also supported by the fact that Today’s era is of Gen X their
taste changes very fast and wants fresh material.

 This study reveals that celebrity endorsement act as a source of brand-building but it isn’t the
complete solution. Company can’t rely only on celebrity endorsement to sell their products but
they should follow an integrative approach so as to generate good sales volumes. They should
provide more schemes to their customers in order to sell their products.

 One of the important recommendations that I want to give is that during this slowdown period
companies are cutting their advertisement expenditure but they shouldn’t do this. This is because
this slowdown provide them an opportunity to differentiate themselves from their competitors.
This is also supported by the researches. One of the research explained that during 1960’s
recessions 290 global companies increased their advertisement expenditure and their sales
increased by whopping 300%. Some of the companies are well established brand name todays
like IBM, Microsoft, 3M etc.

39 | P a g e

cases

CASES

40 | P a g e

CASE: CELEBRITIES - TO USE OR NOT TO USE
Situation 1: Cadbury has always come up with sweet, emotional, clutter breaking commercials.
Who can forget the lady dancing on the cricket pitch to celebrate her boyfriend's century. But
when the company was hit with the worm controversy it had to rope in the national icon Amitabh
Bachchan.He embodied the values of Cadbury as a brand and connected with all of India -
mothers, teenagers, children, media persons and trader partners. The 'infomercial' that followed
had Bachchan first voicing his own 57 concerns, and then assuring consumers that his doubts had
been satisfactorily laid to rest (after the factory visit).This reinstated customer faith in Cadbury
and sales have now touched pre-worm crisis days.

Situation 2: Asian Paints will always be remembered for its 'Mera wallah cream' campaign and
more recently the 'Wah Sunil babu' campaign. There have been very forgettable celebrity
endorsements from Akshaye Khanna and Saif Ali Khan in the past (probably people were not
able to visualize stars painting their own walls). This is a case of a company whose non-celebrity
commercials have done way better than their celebrity campaigns in terms of recall and message
delivery.
Cases
1. Sharukh Khan - Mayur Suitings (Positive Impact)
”Sharukh Mayur Khan” is how this product came to be known, Sharukh brought to the product
his persona of high class lifestyle, giving the consumer the belief to aspire and good clothing a
sure way to reflect the aspiration. The ad shows a great fit between what the product stands for,
what the consumer expects and what the celebrity means to the consumer, hence explaining the
strong impact in sales and brand recall.
2. Dharmendra - Rajdoot Motorcycles (Positive Impact)
This strong man from yester years, still resonates as the only brand ambassador, who managed to
sell a motorcycle in each and every corner of India in the 80’s. Dharmendra’s image of being a
brawny man, hailing from the rustic roots of India, gave Rajdoot motorcycles the perfect brand
ambassador it was looking for. He not only gave to the product a sturdy and robust image, but
also brought to the product trust and honesty which it was trying to build in its first time buyers.
3. Amitabh Bachchan (Cluttered Identity)

41 | P a g e

Our framework argues that exclusivity makes the product-celebrity association stronger thereby
making the product resonates with the qualities of the celebrity. In cases where the celebrity
endorses multiple products, he dilutes his equity.There’s no better example in the Indian industry
than Amitabh Bachchan who endorses ICICI Bank, Cadbury, Versa, Dabur, Rin, Parker Pens,
Pepsi, Nerolac Paints and many more. In each of the cases the ads use some or the other attribute
of Amitabh to endorse the product, but makes no strong link in the minds of the consumer.
Hence in the end the consumer is lost and has difficulty identifying, what does Amitabh really
stand for?
4. Rani Mukherjee - Hero Cycles (Negative Impact)
Rani Mukherjee endorsing a cycle makes a case where the celebrity is used only for her
popularity without looking for Brandcelebrity fit. Cycles in India are generally used by men and
the target segment belongs to low income group. By using Rani, the consumers could
not be assured of the product’s qualities and could not relate the product to the ambassador.
Hence, the consumers were not motivated towards the product and the ad was called back,
thereby emphasizing the need for a brand-celebrity fit.
5. Hutch - The Child and the Dog (Created Spokesperson)
Hutch managed to grab the attention of the consumers, by not using a celebrity. The child and
dog campaign came across as a fresh initiative at endorsing a product. The child and dog have
had a very high brand recall as they represent only Hutch and have been created by the company
according to the needs of the product and the message. It communicates to the consumer, “We
are there, wherever you are and that too unobtrusively.” The protagonist says all of the above and
creates a strong bond with the consumer.
6. Mohammad Azharuddin - Britannia (Change of the Celebrity
Image)
Mohammad Azharuddin, at the peak of his career was a brand ambassador for an assortment of
products. But the match-fixing case besmirched his image and all of the products started
disassociating their endorsements from him. Thus, a product is sold on basis of the qualities of
the endorser and with a change in the inherent value system of the celebrity; the
bond with the consumer is lost.

7. Narain Karthikeyan - Jordan / Formula 1 Racing (EnteringInternational Markets)

42 | P a g e

A celebrity’s endorsement through various cultural and social roadblocks is one of the critical
applications of our model; Narain is a case in point. The popularity of F1 as a sport in India owes
its genesis to use of Narain as a brand ambassador of the sport. His image and persona has been
used by the sport and the Jordan team to create brand awareness in India.
8. Sachin Tendulkar - Fiat Palio (Financial Viability)
Sachin Tendulkar was paid a huge sum of Rs. 12 Crore to endorse Fiat Palio, even though
Tendulkar as a brand could command such an exorbitant amount. It’s for the company to
evaluate if the returns generated by the endorsement would commensurate the initial spend. In
this case due to excessive spending and failure of the product to take-off the advertisements had
to be withdrawn.

There is an increasing challenge to the marketing manager to develop and implement an
integrated marketing communication (IMC) plan to realize the true value of the celebrity
endorsements. There is a gradual shift from the traditional approach of showing celebrities in
advertisement to making them the “spokes-person” of the brand. Companies have taken celebrity
endorsement to next level by projecting brands as a way of life. Smart companies are
using their brand ambassadors in other mediums such as movies to promote their brands.
E.g., Amitabh Bachchan, who endorses the financial instruments of ICICI Bank, is shown as a
branch-manager of ICICI Bank in the movie Baghban. Wooing the key existing and potential
target customers is the trait of a successful promotion strategy. However, the marketing manager
should be able to offer significant value propositions in the services / products offered to the
customers. Thus, one needs to integrate celebrity endorsement with other marketing programs
and ensure that the celebrity attributes align with the overall brand or company. Companies that
succeed in developing such an integrated IMC plans is the one to succeed in the long-term.

43 | P a g e

Bibliography:
REFERENCES:

 Philip A.Stroke(2009), "impact of celebrity endorsement on stock prices",
Journal of Consumer Research, Vol. 14 No.March, pp.471-82.

 Roy, Shubhadip (2007), "Consumer’s perceptual space and Indian celebrities in
relation to brand attributes", Journal of Business Research, Vol. 37 No.1, pp.71-
84.

 Shimp (2007), "Celebrities as spokesperson", Journal of Retailing, Vol. 76 No.2,
pp.175-91.

 Tellis (1998) "Celebrity endorsement in highly involved regime", Journal of
the Academy of Marketing Science, Vol. 16 No.4, pp.74-94.
 Lang and Goodwill (1997), “PSA- Do they really work?” Oxford University
Press, Oxford, .

 Freiden(1994), "Celebrity endorser as credible spokesperson", Journal of
Marketing Research,, Vol. 11 No. May, pp.156-63

WEBSITES:
 www.marketingmania.in/india.htm
 http://en.wiki.wikipedia.com/indian_industry
 www.managementparadise.com/consumerbehaviour_celebrity
endorsement_automobiles.htm
 http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=&id=ac
f176cd-6f53-42b6-a47b-72e34341cfe1&&Headline
 http://www.businessweek.com/innovate/content/feb2008/id20080227_377233_pa
ge_2.htm
 http://www.telegraphindia.com/1081007/jsp/opinion/story_9933949.jsp

44 | P a g e

Appendix

APPENDIX

45 | P a g e

Questionnaire
Dear Respondents,
I, Samarpita Bhattacharya, student of MBA,I 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) What is your occupation?
Business Class
Service Class
Student
Others
3) What is your age?
18-25
26-32
32-39
More than 40
4) What is your gender?
Male
Female
5) What type of vehicle do you currently 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
Indifferent

46 | P a g e

Disagree
Strongly disagree
10) “Celebrity endorsement affect my purchase decision while purchasing automobile
vehicles” Rate this statement.
Strongly agree
Agree
Indifference
Disagree
Strongly disagree
11) Out of the following celebrity persona whom do you like most?
Bollywood Stars
Sports star
None of above
12) Do you follow your favorite celebrity while purchasing a new vehicle every time?
Every time
Rarely
Never
13) You are required to identify the following ads regarding various automobile
products:
“More Car par car…………………”
“The sun-shine car ……………….”
“Why should boy have all the fun?…………………..”
“ What role you goanna play?……………………………”
14) Any suggestion…………………………………………………………..
…………………………………………………………………………….
…………………………………………………………………………….
“ Thanks for your valuable Contribution”

47 | P a g e

Impact of celebraity endorsment

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (19)

Similar to Impact of celebraity endorsment

Similar to Impact of celebraity endorsment (20)

More from samarpita27

More from samarpita27 (13)

Recently uploaded

Recently uploaded (20)

Impact of celebraity endorsment