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    Impact of celebraity endorsment Impact of celebraity endorsment Document Transcript

    • COURSE OF INDEPENDENT STUDY A REPORT ON“A STUDY ON THE IMPACT OF CELEBRITY ENDORSEMENT ONBUYING BEHAVIOR OF CONSUMERS AND AS A SOURCE OF BRAND-BUILDING” SUBMITTED BY SAMARPITA BHATTACHARYA ROLL NO – 092401|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 ......................................................................................................................................... 462|Page
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    • DECLARATIONI, “Samarpita Bhattacharaya”, hereby declare that the work presented herein isgenuine work done originally by me and has not been published or submittedelsewhere for the requirement of a degree programme. Any literature, data orworks done by others and cited within this dissertation has been given dueacknowledgement and listed in the reference section._______________________(Students name & Signature)_______________________(Registration No.) 09240Date:__________________5|Page
    • ACKNOWLEDGEMENTIt has been a great pleasure for me to work on this project. My sincere thanks tot.Director KamalGhosh Ray for giving me an opportunity to work on this project whereby I was given anexposure to study the impact of celebrity endorsement as a source of brand building and onconsumers buying behavior in automobile Industry which helped me to increase the span of ourknowledge and developed my thinking on more practical lines. I thank her for her guidance andsupport throughout the time when I was working on this project. I am also thankful to deanunder 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 throughoutthis 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 tocover automobile sector. I am covering automobile sector as whole and not concentratingon any particular category.Research Methodology:Research Design:A research design is an arrangement of conditions for collection and analysis of Data in a mannerthat aims to combine relevance to the research purpose with Economy in procedure. It constitutesthe 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 cancollect data either through primary source or secondary source.a) Primary data: These are those data which are collected afresh and for the firsttime, and thus happen to be original in character. I will be using the structuredquestioners.b) Secondary data: These are those which have already been collected by someoneelse and which have already been passed through the statistical process. I willcollect 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 researcha 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 aconstraint in the study? While collecting data some of the respondents are not willing to fill the questionnaire, so theymight not fill their true behavior. This can also be a constraint of the study.Population of the studyYouth (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 sizeof 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 PROCESSINGDaily data will be entered into MS-Excel sheets. After the exhaustion of the specifiedgeographical area this data will be analyzed using simple graphical and tabulationtechniques. The data sheets mentioned here will be attached in the annexure of the report.8|Page
    • Analytical ToolsAfter collection of data another work necessary for any data collector is to correctly analysis thatdata. So statistical tolls helps us to correctly analysis the data .As I will using here the softwarenamed SPSS for analysis of the data XLSTAT.I will use following statistical tools:Hypothesis TestingChi-square test will be used when the set of observed frequencies obtained after experimentationhave to be supported by hypothesis or theory. The test is known as X2- test of goodness of fitand is used to test if the deviation between observation (experiment) and theory may beattributed to chance (fluctuations of sampling).χ2 also enables us to explain whether or not twoattributes are associated or related to each other. To test the goodness of fit : It helps to testgoodness of fit by using null and alternate hypothesis.STATISTICAL TOOLS TO BE USED1. Chi –Square TestProcedure:(1) Set up the null hypothesis that there is no significant differencebetween the observed and expected value.(2) We compute the value of CHI- square by using the formulaCHI-square = Σ χ2=Σ (( Oi- Ei)2/Ei)O- Observed valueE- Expected valueDegree of freedoms=(R-1)(C-1)Level of significance=59|Page
    • Executive SummaryIndia is a country where people love to live in dreams. They worship celebrities. Celebrities maybe 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 influencetheir target customers may be existing or potential ones. For this they rope in these celebritiesand give them whopping amount of money. They believe that by doing this they can associatetheir products with their target customers. This is called celebrity endorsement. But do thiscelebrity endorsement acts as a source of brand-building and have impact over the purchasingbehavior of customers in case of automobiles? For this I decided to conduct this vary researchand 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, itsinfluence over customers purchasing decisions. After studying the whole literature relatedto celebrity endorsement I found a gap in the study. This gap was whether celebrity endorsementacts 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 wholeuniverse. After conducting research it was found that brand name and celebrity endorser are thetwo key factors that play an important role in affecting purchase intention. Majority of the peoplewant to see their favorite celebrity endorsing their brands.During our research an important factor revealed that mostly people want to see male celebritiesendorsing automobile vehicles rather than female. This fact is also supported by advertisement ofglamour motorbike which have baseline “ Definitely male. This particular advertisement createdhot spaces at Cannas festival. There are large no. of mediums of persuasion but celebrityendorsement is an effective mode of persuasion.10 | P a g e
    • People love to see sports stars endorsing automobile vehicles than that of bollywoodstars. This particular aspect is mainly supported by the fact that in India where Cricket is religionand with the success of IPL-1 cricketers like Gautam Gambhir,Ishant Sharma are able to displacebig film stars like Hrithik Roshan for advertisements of Coca-Cola. Another important factwhich came into existence was majority of people follow their favorite celebrity while making anew purchase everytime. Beside this one major factor come into existence that mostlyrespondents were able to recognized the celebrity used in various advertisement. So in this brandrecall test, mostly positive results were found. One open-ended question was also included aboutsuggestion. From that it was concluded that mostly people want that instead of spending hugeamount of money onto celebrities company should come out with some schemes so as to luretheir customers. So it can be concluded that for a small extent Celebrity endorsement acts as asource of brand-building but company should follow integrative approach so as to build strongbrands.Beside celebrity endorsement they should run certain schemes so as to provide value tothe customer and to build strong brand.11 | P a g e
    • IntroductionThere are large no. of brands available in the market. Some are very familiar and rest aresomewhat. 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 andTaylor has the rich heritage of ropping in various cascades of James Bond 007 as their brandendorser and it has helped them strongly to build there brand. Businesses have long sought todistract and attract the attention of potential customers that live in a world of ever-increasingcommercial bombardment. Everyday consumers are exposed to thousands of voices and images inmagazines, newspapers, and on billboards, websites, radio and television. Every brand attempts tosteal at least a fraction of an unsuspecting persons time to inform him or her of the amazing anddifferent attributes of the product at hand. Because of the constant media saturation that mostpeople experience daily, they eventually become numb to the standard marketing techniques. Thechallenge of the marketer is to find a hook that will hold the subjects attention. Also from amarketing communications (marcoms) perspective, it is vital that firms design strategies that helpto underpin competitive differential advantage for the firms 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 thepublic (actor, sports figure,entertainer, etc.) for his or her achievements in areas other than that ofthe product class endorsed (Friedman and Friedman, 1979). This is true for classic forms ofcelebrities, like actors (e.g., Amitabh Bachchan, Shahrukh Khan, Rani Mukherjee Aamir Khan andPierce 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 OBrien), and pop-stars (e.g., Madonna, David Bowie) - but also for lessobvious groups like businessmen (e.g., Donald Trump, Bill Gates) or politicians. Celebritiesappear 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, celebritiesappear in public by attending special celebrity events, e.g., award ceremonies, inaugurations orworld premieres of movies. In addition, they are present in news, fashion magazines, andtabloids, which provide second source information on events and the private life of celebritiesthrough 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 andservices, which is referred to celebrity endorsement.Celebrity EndorsementMcCrackens (1989) definition of a celebrity endorser is, "any individual who enjoys publicrecognition and who uses this recognition on behalf of a consumer good by appearing with it inan advertisement (marcoms), is useful, because when celebrities are depicted in marcoms, theybring their own culturally related meanings, there to, irrespective of the required promotionalrole." Friedman and Friedman (1979) found empirical evidence that, in the promotion ofproducts high in psychological and/or social risk, use of celebrity endorser would lead togreater believability, a more favorable evaluation of the product and advertisement, and asignificantly more positive purchase intention. Thus, companies use celebrities to endorse theirproducts, 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 thishabit of relating this vary term of celebrity endorsement with brand face. But this is not so.Difference Between Brand Ambassador & Brand FaceA Brand Ambassador would be one who is not only a spokesperson for the brand or is justappearing as a testimonial for the brands benefits. He/she is an integral part of the brand personaand helps to build an emotionale, which goes beyond just appearing on TV commercials .Hetakes up the cause of a Brand Champion and is associated with every aspect related with thebrand. What is more, there is a significant difference between making just an endorsement forsay, a shampoo or an automobile, and being that brands alter ego. Both parties take the latter farmore seriously to the deal. So a brand ambassador would be involved in press releases, he/shewould be actively participating in any sales promotion, sporting the Brand all the while. Forexample, Fardeen Khan is the brand ambassador for Provogue while he remains a brand face forLux Body Wash.On the other hand, a Brand Face would be the current celebrity who is just used as a tool13 | P a g e
    • to increase brand recall and is only appearing in the advertisement. It is usually seen thata brand face is a temporary contract and is very short term at times. An example would beSona Chandi Chawanpryash using Sourav Ganguly for a while in its commercials. Brandfaces are easily forgotten and fades away with the campaigns end.The motive behind total branding may be decocted as an attempt to amalgamate diverseactivities to win customer preference. Apropos to this context, the topic “Impact of celebrityendorsement on overall brand”, is a significant one. The crescendo of celebrities endorsingbrands has been steadily increasing over the past years. Marketers overtly acknowledge thepower of celebrities in influencing consumer-purchasing decisions. It is a ubiquitouslyaccepted fact that celebrity endorsement can bestow special attributes upon a product that itmay have lacked otherwise. But everything is not hunkydory; celebrities are after all meremortals 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 brandCelebrity 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 werepatented. 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.Theincreasing number of endorsements throws a valid question to the consumers. Is there a sciencebehind the choice of these endorsers or is it just by the popularity measurement? What are thereasons which lead to impact of celebrity endorsement on brands? The success of a brand14 | P a g e
    • through celebrity endorsement is a cumulative of the following 14 attributes. Greater the score ofthe below parameters,greater are the chances of getting close to the desired impact.Impact Regions of Celebrity EndorsementWhile brand marketers with positive experiences would tend to believe that celebrityendorsements work and some would disagree, but one would be sure that the magnitude of itsimpact is difficult to measure even if sales figures are at our disposal. However, we canunderstand 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 ConsumerThe basis for the effectiveness of celebrity-endorsed advertising can be linked toKelmansprocesses 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 attitudeadvocated by the communicator:Compliance, Identification & InternalizationThese latter two processes are particularly applicable to celebrity-endorsed advertising.Compliance infers that another individual or group of individuals influences an individual causehe or she hopes to achieve a favourable reaction from this other group. This process of socialinfluence 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 behaviourof another person or group, simply because they aspire to be like that person or group. This16 | P a g e
    • process is the basis for referent power. It was found that celebrities are more commonly likedthan a typical consumer spokesperson.Internalization as a process of social influence is said to occur when individuals adopt theattitude or behaviour of another person because that behaviour is viewed as honest and sincereand is congruent with their value system. The effectiveness of celebrity advertising traditionallyhas not been strongly linked to this process, as a celebritys reason for promoting a product canjust as easily be attributed by the consumer to an external motive (i.e., payment of fee) as to aninternal motive (i.e., the celebritys true belief in the value and benefit of the product). Animportant issue of concern relates to the development of a strategy for use in CelebrityAdvertising, which benefits from the dramatic impact of dual support of both the identificationand internalization processes of social influence. Celebrities are well-liked, but the techniquesthat can be used to enhance their credibility as spokespeople, and therefore, tie-in more closelywith the internalization process needs to be looked into.Effectiveness of Celebrity EndorsersA study conducted by Charles Atkin and Martin Block focussed on alcohol advertising andyoung audience to examine the impact of celebrity advertising in terms of social effects ofadvertising. The sponsoring Company is the underlying source of any advertising message, butthe individual models depicted in the advertising serve as the more visible communicator inmany cases. The most thoroughly studied source quality is credibility. Research conducted bysocial psychologists over the past 30 years demonstrates that a source perceived as highlycredible 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 typicallyattempts to project a credible image in terms of competence, trustworthiness or dynamism.Celebrity endorsers are considered to be highly dynamic, with attractive and engaging personalqualities. 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 andWashington cite a 1975 study showing that celebrities are featured in 155 of prime-time TVcommercials. 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 reallywork for the endorsement fee, but are motivated by genuine affection for the product (Kamen etal, 1975). Despite the use of famous endorsers, there is little published evidence regarding theeffectiveness. In one experiment, an advertisement for a fictitious brand of Sangria wine featuredan endorsement attributed to either a celebrity (actor - Al Pacino), a professional expert, theCompany 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 highestscores. While the no-source control group had a purchase intention rating of 2.7, the subjectsexposed to the actor scored 3.9. Believability was rated 2.8 by control subjects versus 4.1 bythose seeing the celebrity endorsement. For taste, the baselines of 4.0 compares to the celebritygroup score of 5.6. None of the other three endorsers were as influential as the celebrated personBrand Image Formation & Brand PreferenceHaving a congruent image between the brand and celebrity does not guarantee anypositive effect on consumers brand preferences. The fundamental question is - what abrand image really does to consumers? Baran and Blasko explained, "Since mostproducts arent special, most advertising does all that so-called image stuff... Theres noinformation about the product, theres only information about the kind of people whomight 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 fromthe subjective experience of using an identical product without the brand reassurance. Inthe case of using celebrity advertising to build brand image, the effects are examined witha social psychological framework.Before we can scrutinize the effects of celebrity endorsement on the overall brand, we18 | 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 glamorouspersonalities.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 inincarnating user associations among the above mentioned points. To comprehend this, let usanalyze the multipliereffect formula for a successful brand: -S=P* D*AV -- the multiplier effectWhereS is a Successful BrandP is an Effective ProductD is Distinctive IdentityAV is Added ValuesThe realm of the celebrity’s impact is confined to bestow a distinctive identity andprovide AV to the brand; the celebrity does not have the power to improve or debilitatethe efficiency and features of the core product. Thus, we are gradually approaching anevident proposition claiming, "The health of a brand can definitely be improved up tosome extent by celebrity endorsement. But one has to remember that endorsing acelebrity 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 magnifiesthe effects of a campaign. But the aura of cautiousness should always be there. The factto be emphasised is that celebrities alone do not guarantee success, as consumersnowadays understand advertising, know what advertising is, and how it works. Peoplerealize that celebrities are being paid a lot of money for endorsements and this knowledge19 | 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, tatamn) 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 imported1mn) models20 | P a g e
    •  The economy segment has a very large foothold over the Indian automobilemarket as compared to the mid-size and luxury segment.Segment Market Share (%)Economy 90.2Mid-size and luxury 9.8 Source: SIAM/ Auto Car India21 | P a g e
    • Data analysis and interpretation:1.Occupation of respondent: Occupation %tage Business Class 25 Service Class 25 Student 30 Others 2022 | P a g e
    • Interpretation:From this pie-chart it is clear that majority of the respondents are students and rest of theshare is occupied by service and business class.2. Age of the respondent:AGE %AGE18-25 3026-32 2033-39 30Above 40 20Interpretation:This pie-chart depicts that mostly respondents are young and while rest are above 2523 | P a g e
    • years3.Gender of the respondent:GENDER %GEMALE 65FEMALE 35Interpretation: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 %tageTwo-wheeler 45Four-wheeler 35Both 25Interpretation:This pie-chart depicts that 45% of the people have two-wheeler and 35% of the peoplehave four-wheeler and rest 20% have both two-wheeler and four-wheeler.25 | P a g e
    • 5.Factors affecting purchase intention:Factors %AGEPrice 20Opinion-leader 15celebrity endorser 35Interpretation:This pie-chart depicts that 35% of the people consider celebrity endorser while going forthe purchase, followed by brand name-with 30%.,opinion leader 15% and 20% people26 | P a g e
    • consider price. Brand name usually covers all aspects like functional aspects viz.mileage, speedetc. As people usually are more interested towards well known brands and if these brands areadvertised by famous celebrity it creates an huge impact.6.Like to see any celebrity endorsing your brand:PREFERNCE %AGEYes 55No 25Cant say 2027 | P a g e
    • Interpretation:This pie-chart clearly indicates that 55% of the respondents want their products to beadvertised 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 commonman.7.Male v/s Female celebrity endorser:HYPOTHESIS TESTINGStep1: 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 = 4At alpha .05 and 4 degrees of freedom, the crtitical value from the chi square distributiontable is 9.49Frequency ObservedPreference Male Female Row TotalStrongly Agree 25 05 30Agree 05 15 20Indifferent 10 10 20Disagree 5 10 15Strongly Disagree 10 05 15Column Total 55 45 100Frequency ExpectedPreference Male Female Row TotalStrongly Agree 55*30/100=16.5 45*30/100=13.5 30Agree 55*20/100=11 45*20/100= 9.0 20Indifferent 55*20/100=11 45*20/100= 9.0 20Disagree 55*15/100= 8.25 45*15/100=6.75 15Strongly Disagree 55*15/100= 8.25 45*15/100=6.75 15Column Total 55 45 100Χ²-CalculationPreference Male FemaleStrongly Agree (25-16.5)2/16.5 (5-13.5)2/13.528 | P a g e
    • Agree (5-11)2/11 (15-9)2/9Indifferent (10-11)2/11 (10-9)2/9Disagree (5-8.25)2/8.25 (10-6.75)2/6.75Strongly Disagree (10-8.25)2/8.25 (5-6.75)2/6.75Chi-SquarePreference Male FemaleStrongly Agree 4.38 5.35Agree 3.27 4Indifferent 0.09 0.11Disagree 1.28 1.56Strongly Disagree 0.37 0.45Χ²= 20.85Interpretation:As the Chi-square test statistics 20.85 exceeds the critical value of 9.49 hence nullhypothesis is rejected and hence we reached at the result that our alternative hypothesis isaccepted. It is confirmed after the analysis that male celebrity endorser are more effectivethan that of female celebrity.8.Celebrity endorser as an effective method of persuasion:Preference %ageStrongly Agree 45Agree 15Indifferent 10Disagree 20Strongly Disagree 1029 | P a g e
    • Interpretation:This chart depicts that mostly people agree that Celebrity endorsement is an effective toolof persuasion. 45% of people strongly agree that celebrity endorsement is an effectivetool of persuasion and 20% of people disagree that it is one of the tool.HYPOTHESIS TESTINGStep1: State Hypothesis:Ho: Celebrity endorsement is not an effective tool of persuasion to facilitate customer to go forpurchase. .Ha: Celebrity endorsement is an effective tool of persuasion to facilitate customer to go forpurchase.Step 2: Set the Rejection criteria:DF = 5-1 =At alpha .05 and 4 degrees of freedom, the critical value from the chi square distributiontable is 9.49Step 3: Compute the Test Statistics: χ² = Σ (O-E)2/EPreference Observed Expected O-E (O-E)² (O-E)²/EStrongly 45 20 25 625 31.25Agree30 | P a g e
    • Agree 15 20 -5 25 0.25Indifferent 10 20 -10 100 5Disagree 20 20 0 0 0Strongly 10 20 -10 100 5Disagree χ²= 41.5Interpretation:As the Chi-square test statistics 41.5 exceeds the critical value of 9.49 hence null hypothesis isrejected and hence we reached at the result that our alternative hypothesis is accepted. Hence itcan be concluded that celebrity endorsement is and effective tool of persuasion to facilitatecustomer to go for purchase.9.Celebrity endorsement affects my purchase decision while going for the purchaseof automobile products.Preference %ageStrongly 30AgreeAgree 15Indifferent 10Disagree 35Strongly 10Disagree31 | P a g e
    • Interpretation:This chart depicts that 45% of the people agree strongly or simply on the fact that theirautomobile purchase is being affected by celebrity endorsement,10 % of the people remainindifferent and 45% of the people disagree with this fact.HYPOTHESIS TESTINGStep1: State Hypothesis:Ho: Celebrity endorsement doesn’t affect purchase decision of automobile products. .Ha: Celebrity endorsement affects purchase decision of automobile products.Step 2: Set the Rejection criteria:DF = 5-1 = 4At alpha .05 and 4 degrees of freedom, the critical value from the chi square distributiontable is 9.49Step 3: Compute the Test Statistics: χ² = Σ (O-E)2/EPreference Observed Expected O-E (O-E)² (O-E)²/EStrongly 30 20 10 100 10AgreeAgree 15 20 -5 25 1.25Indifferent 10 20 -10 100 5Disagree 35 20 15 225 11.25Strongly 10 20 -10 100 532 | P a g e
    • Disagree χ²= 32.5Interpretation:As the Chi-square test statistics 32.5 exceeds the critical value of 9.49 hence null hypothesis isrejected and hence we reached at the result that our alternative hypothesis is accepted. Hence itcan be concluded that celebrity endorsement affects purchase decision of automobile products.10.Celebrity persona you like most:prefernce %ageBollywood stars 55Sports star 25None of the above 2033 | P a g e
    • HYPOTHESIS TESTINGStep1: State Hypothesis: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 bollywoodstars.Step 2: Set the Rejection criteria:DF = 5-1 = 4At alpha .05 and 4 degrees of freedom, the critical value from the chi square distributiontable is 9.49Step 3: Compute the Test Statistics: χ² = Σ (O-E)2/ECelebrity Observed Expected O-E (O-E)² (O-E)²/EpersonaBollywood 55 33.3 21.7 470.89 14.14starsSports star 25 33.3 -8.3 68.89 2.06None of 20 33.3 -13.3 176.89 5.31the above χ²= 21.51Interpretation:As the Chi-square test statistics 21.51 exceeds the critical value of 9.49 hence null hypothesis isrejected and hence we reached at the result that our alternative hypothesis is accepted. Hence itcan be concluded that people like to see sports stars endorsing their products rather thanbollywood stars.11. You follow your favorite celebrity while purchasing new automobile every time:Response %tageEvery time 40Rarely 2534 | P a g e
    • Never 35Interpretation:This pie-chart depicts that 40% of people follow their favorite celebrity every times whilegoing for the purchase of new automobiles. That means frequency is pretty large. On the otherhand 25% of the people rarely follow their favorite celebrity. While 35% of the people doesn’tfollow 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 toidentify 3, 20 were able to identify 2 and 10 were there who identified only 1 of the ad. 10 peoplewere there who weren’t able to identify even a single celebrity. Majority of the respondent were35 | P a g e
    • quite familiar with Priyanka Chopra’s “ Why should boy have all the fun?” So majority of therespondents were able to recognize the celebrity used in the advertisement so it clearly tells thatcelebrity 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 apurchase intention of automobile vehicle.Maximum number of people wants to see celebrity endorsing their automobile vehicles thatmeans they have high involvement with the celebrities.One of the abstract finding of the survey was regarding people’s orientation towards genderbiasness. This finding clearly indicated that people like to see male celebrities endorsingautomobiles than that of female celebrities.Most no. of people believe that celebrity endorsement is an effective mean of persuasion i.e. itconvey the message clearly to the target audience regarding product offerings and persuade themto go for the purchase. It was found that celebrity endorsement have an impact over the purchase of automobileproducts. 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 ofthe finding revealed that people admire sports player as better celebrity persona than that ofbollywood actor/actress. It was found that while making every new purchase of an automobile most no. of peoplefollow celebrity endorser while rest of them denied this fact.The results of brand recall were astonishing most no. of people were able to recognize thecelebrities endorsing the given advertisement. So it showed that celebrity endorsement is asource of celebrity endorsement.37 | P a g e
    • Conclusion:Despite the obvious economic advantage of using relatively known personalities asendorsers in advertising campaigns, the choice of celebrities to fulfill that role hasbecome common practice for brands competing in todays cluttered media environment.There are several reasons for such extensive use of celebrities. Because of their highprofile, celebrities may help advertisements stand out from the surrounding clutter, thusimproving their communicative ability. A brief assessment of the current market situationindicates that celebrity endorsement advertising strategies can, under the rightcircumstances, indeed justify the high costs associated with this form of advertising.But it would be presumptuous to consider celebrity endorsement as a panacea for allbarricades. Celebrity endorsement if used effectively, makes the brand stand out,galvanizes brand recall and facilitates instant awareness. To achieve this, the marketerneeds to be really disciplined in choice of a celebrity. Hence the right use of celebrity canescalate the Unique Selling Proposition i.e. it can act as a source of brand-building of abrand to new heights; but a cursory orientation of a celebrity with a brand may prove tobe claustrophobic for the brand.It was found that people love to see celebrities endorsing their brands so the involvementof common man is pretty high with these celebrities. So marketers should use the rightcelebrity matching with the product. During survey it was found that male celebrities areconsidered to be better celebrity endorser than that of their female counterparts. This isbecause lots of research regarding consumer’s behavior towards automobile indicates thatpeople view automobile as female so in order to attract the attention of target customersthey preferably use male celebrity endorser. Also it was found that people love to seesports stars endorsing their automobile than bollywood stars. This is because of the factin 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 theirautomobiles. At last I just want to say A celebrity is a means to an end, and not an end inhim/her38 | P a g e
    • Recommendations:After studying impact of celebrity endorsement on buying behavior of customers in automobilesector 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’sadvertisement “Why should boys have all the fun” This advertisement was designed on such anidea that everyone can recognize the brand of Scotty Pepp easily. So instead of hiring anycelebrity companies should try to create such nice innovative idea and then match the suitabilityof celebrity with the idea. This is also supported by the fact that Today’s era is of Gen X theirtaste changes very fast and wants fresh material. This study reveals that celebrity endorsement act as a source of brand-building but it isn’t thecomplete solution. Company can’t rely only on celebrity endorsement to sell their products butthey should follow an integrative approach so as to generate good sales volumes. They shouldprovide 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 periodcompanies are cutting their advertisement expenditure but they shouldn’t do this. This is becausethis 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’srecessions 290 global companies increased their advertisement expenditure and their salesincreased by whopping 300%. Some of the companies are well established brand name todayslike IBM, Microsoft, 3M etc.39 | P a g e
    • cases CASES40 | P a g e
    • CASE: CELEBRITIES - TO USE OR NOT TO USESituation 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 boyfriends century. Butwhen the company was hit with the worm controversy it had to rope in the national icon AmitabhBachchan.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 followedhad Bachchan first voicing his own 57 concerns, and then assuring consumers that his doubts hadbeen satisfactorily laid to rest (after the factory visit).This reinstated customer faith in Cadburyand sales have now touched pre-worm crisis days.Situation 2: Asian Paints will always be remembered for its Mera wallah cream campaign andmore recently the Wah Sunil babu campaign. There have been very forgettable celebrityendorsements from Akshaye Khanna and Saif Ali Khan in the past (probably people were notable to visualize stars painting their own walls). This is a case of a company whose non-celebritycommercials have done way better than their celebrity campaigns in terms of recall and messagedelivery.Cases1. Sharukh Khan - Mayur Suitings (Positive Impact)”Sharukh Mayur Khan” is how this product came to be known, Sharukh brought to the producthis persona of high class lifestyle, giving the consumer the belief to aspire and good clothing asure 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 thestrong 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 tosell a motorcycle in each and every corner of India in the 80’s. Dharmendra’s image of being abrawny man, hailing from the rustic roots of India, gave Rajdoot motorcycles the perfect brandambassador it was looking for. He not only gave to the product a sturdy and robust image, butalso 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 therebymaking the product resonates with the qualities of the celebrity. In cases where the celebrityendorses multiple products, he dilutes his equity.There’s no better example in the Indian industrythan 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 attributeof 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 reallystand for?4. Rani Mukherjee - Hero Cycles (Negative Impact)Rani Mukherjee endorsing a cycle makes a case where the celebrity is used only for herpopularity without looking for Brandcelebrity fit. Cycles in India are generally used by men andthe target segment belongs to low income group. By using Rani, the consumers couldnot 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 anddog campaign came across as a fresh initiative at endorsing a product. The child and dog havehad a very high brand recall as they represent only Hutch and have been created by the companyaccording to the needs of the product and the message. It communicates to the consumer, “Weare there, wherever you are and that too unobtrusively.” The protagonist says all of the above andcreates a strong bond with the consumer.6. Mohammad Azharuddin - Britannia (Change of the CelebrityImage)Mohammad Azharuddin, at the peak of his career was a brand ambassador for an assortment ofproducts. But the match-fixing case besmirched his image and all of the products starteddisassociating their endorsements from him. Thus, a product is sold on basis of the qualities ofthe endorser and with a change in the inherent value system of the celebrity; thebond 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 criticalapplications of our model; Narain is a case in point. The popularity of F1 as a sport in India owesits genesis to use of Narain as a brand ambassador of the sport. His image and persona has beenused 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 thoughTendulkar as a brand could command such an exorbitant amount. It’s for the company toevaluate if the returns generated by the endorsement would commensurate the initial spend. Inthis case due to excessive spending and failure of the product to take-off the advertisements hadto be withdrawn.There is an increasing challenge to the marketing manager to develop and implement anintegrated marketing communication (IMC) plan to realize the true value of the celebrityendorsements. There is a gradual shift from the traditional approach of showing celebrities inadvertisement to making them the “spokes-person” of the brand. Companies have taken celebrityendorsement to next level by projecting brands as a way of life. Smart companies areusing 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 abranch-manager of ICICI Bank in the movie Baghban. Wooing the key existing and potentialtarget customers is the trait of a successful promotion strategy. However, the marketing managershould be able to offer significant value propositions in the services / products offered to thecustomers. Thus, one needs to integrate celebrity endorsement with other marketing programsand ensure that the celebrity attributes align with the overall brand or company. Companies thatsucceed 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 inrelation 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 ofthe Academy of Marketing Science, Vol. 16 No.4, pp.74-94. Lang and Goodwill (1997), “PSA- Do they really work?” Oxford UniversityPress, Oxford, . Freiden(1994), "Celebrity endorser as credible spokesperson", Journal ofMarketing Research,, Vol. 11 No. May, pp.156-63WEBSITES: www.marketingmania.in/india.htm http://en.wiki.wikipedia.com/indian_industry www.managementparadise.com/consumerbehaviour_celebrityendorsement_automobiles.htm http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=&id=acf176cd-6f53-42b6-a47b-72e34341cfe1&&Headline http://www.businessweek.com/innovate/content/feb2008/id20080227_377233_page_2.htm http://www.telegraphindia.com/1081007/jsp/opinion/story_9933949.jsp44 | P a g e
    • AppendixAPPENDIX45 | P a g e
    • QuestionnaireDear Respondents,I, Samarpita Bhattacharya, student of MBA,I am conducting a survey on “Impact ofcelebrity endorsement on buying behavior of customers and as a source of brandbuilding”. For this purpose I need your cooperation in fulfilling this questionnaire. It willtake few minutes of your precious time. It is make sure that information obtained is forgeneral purpose only.1) Name of the respondent……………………2) What is your occupation?Business ClassService ClassStudentOthers3) What is your age?18-2526-3232-39More than 404) What is your gender?MaleFemale5) What type of vehicle do you currently own?Two-wheelerFour-wheelerBoth6) What factor affects your buying behavior toward this purchase?PriceOpinion-leaderCelebrity endorserBrand name7) Do you like to see any celebrity endorsing your brand on television?YesNoCan’t say8) “Celebrity endorsement is an effective tool of persuasion of buying vehicle” Ratethis statement.Strongly agreeAgreeIndifferenceDisagreeStrongly disagree9) “Male endorser is more effective as compared to female endorser.” Rate thisstatement.Strongly agreeAgreeIndifferent46 | P a g e
    • DisagreeStrongly disagree10) “Celebrity endorsement affect my purchase decision while purchasing automobilevehicles” Rate this statement.Strongly agreeAgreeIndifferenceDisagreeStrongly disagree11) Out of the following celebrity persona whom do you like most?Bollywood StarsSports starNone of above12) Do you follow your favorite celebrity while purchasing a new vehicle every time?Every timeRarelyNever13) You are required to identify the following ads regarding various automobileproducts:“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