This document is a comparative study by Palak Agarwala on celebrity licensing and endorsement strategies, submitted as part of a Bachelor’s degree in Business Administration. It explores the effectiveness of celebrity endorsements in marketing, detailing their influence on consumer behavior and brand perception, while discussing the rising trend of celebrity licensing. The study includes research methodology and a survey assessing consumer attitudes towards celebrity branding, indicating significant market potential for both endorsement and licensing tactics.

1. Title of the Project:
In War with Celebrity Licensing–
a comparative study between celebrity endorsing and
celebrity licensing.
Name: PALAK AGARWALA
Course: B.B.A. (Hons.)
Specialization: MARKETING
Roll no.: 32
Room no.: 34
Current year: THIRD YEAR
Academic session: 2012 - 2013
Professor Guide: PROF. D. SEN

2. 2
A comparative study on
Celebrity Licensing and Endorsing Strategy
BY
Palak Agarwala
Submitted to the St. Xavier’s College (Autonomous),
in Partial Fulfillment of the Requirement for the Degree of
Bachelors in Business Administration
at the
University of Calcutta.
April 2013
Date of Submission: April 24, 2013.

3. 3
ACKNOWLEDGEMENT
It would have been impossible for me to complete this project if it were
not for Professor D. Sen, my project Guide, who extended a lot of help
during the crucial stage of my project. In all likelihood, I might have
finished the project by myself, but Sir’s guidance made the journey a lot
more informative, interesting and a lot easy for me.
I express my thanks to Rev. Father Dominic Savio, Sj, Vice Principal of,
St. Xavier’s College, Kolkata, Professor Amitava Roy, the Dean of our
BBA Dept., for showing confidence in the students and giving us the
chance to do project papers.
My deep sense of gratitude to all the respondents who showed keen
interest in my survey. I would like to give them my heartfelt thanks for
obliging my survey and giving true, unbiased opinion to my questions. It
was for their active support feedback without which my survey would not
have been successful.
I also acknowledge my colleagues, who spent their precious time in
providing feedback and helping me in my survey.
I extend my thanks to all my other faculty members and the above
mentioned faculties who have taught us the level of professionalism,
dedication and discipline it takes for one to complete a project.

4. Lastly, but not the least, I thank my parents, my family and my friends for
their immense support and help.
4
THANK YOU.

5. 5
TABLE OF CONTENTS
Sl. No. PARTICULARS Page No.
01 Executive Summary 06
02 Introduction 08
03
In contract with celebrity Licensing
and Celebrity Endorsement
i. Talking About History
ii. In Conversation with Celebrity
Endorsing
iii. Signing Celebrity Licensing
10-19
04
Let the War Begin…
i. Licensing contract v/s Endorsement
Agreement
ii. In Return…
iii. Trust who…?
iv. Impact on brands
v. Lack of modern and organized sector
20-28
05
Every Cloud has a Silver Lining
i. The categories that are yet to be
explored
ii. Fascination for Dead Celebrities
29-31
06
My Research-
• Objective of the study
32-33
07 Research Methodology 34-36
08 Processing… 37-46
09 Let’s Find out, What we Found Out… 47-49
10 All is Well that Ends Well… 50-52
11 bibliography 53
12 Appendix 54-57

6. 6
EXECUTIVE SUMMARY
Celebrity endorsements are a time-honored marketing tool. The theory
is that borrowing some of a celebrity's star power will create both an
awareness of, and an interest in, a given product. Apparently, the
strategy works: A 2011 study published in the Journal of Advertising
that looked at athletes' support for brands found that such endorsements
produced a 4% growth in revenue (about $10 million a year in added
sales of the branded products), and a 0.25% rise in stock returns.
The marketers want to choose a celebrity who evokes positive emotions
in your target market. They want someone who has a broad appeal,
someone who creates buzz, someone who is likeable. At the same time
marketers want someone who is a good fit or has some expertise with the
product. This gives credibility to the company and as well as ad to the
celebrities connect with the audience.
The world is witnessing a fast evolving market with a rush of competitive
products entering in every day. Customers are in a quandary discerning
which is best amongst them as all are equally good. They need more than
just motivation and words of the salesman to build confidence in the
product.
Amongst popular marketing gimmicks to attract consumers,
endorsements by popular celebrities top the list. In close heels is
Celebrity Licensing, which is emerging as the most lucrative business in
recent times given the fact that 9 out of every 10 people would vouch for
a product whose identity has a seal of their favourite idol. Further, it has
been predicted that celebrity licensing is all set to rule the next era of the
marketing concept.
Celebrity licensing can be used either to position a new product in the
market or to broaden the market of an already existing product and can be
either Deceased Celebrity Licensing or Licensing of Living Celebrities.
In theory, these arrangements seem appealing and very attractive, to
study the reality of the market, a small survey had been conducted which
will depict the true picture of the society we live in. Consumer reaction
can never be predicted or compared within the consumer groups. The
survey tries to understand the perception of the consumer towards an

7. advertising campaign, the launch of the line of merchandising the
products under their own brand name.
Through this project we can understand the reasons behind the popularity
of the celebrities. The objective behind the marketers entering into
agreements with the celebrities, is largely due to the emotional appeal the
celebs have on the consumers. They have become the influencers and
trendsetters for the consumers, specially the youth of India, who are aged
between 15-25 years of age.
There is huge scope of expansion in terms of product categories and the
market. People can never get exhausted of watching celebrities nor can
the products will ever end. The right strategy, organized retail sector,
right time and opportunity can make any campaign successful. Be it
licensing or endorsing. There should be the right celebrity, the image, the
quality which definitely affects a consumers repeat purchase decision, all
paly major roles in the success of a campaign.
7

8. 8
INTRODUCTION
Brand licensing is a well-established business, both in the area of patents
and trademarks. The process of creating and managing contracts between
the owner of a brand and a company or individual who wants to use the
brand in association with a product, for an agreed period of time, within
an agreed territory; Licensing has been used by brand owners to extend a
trademark or character onto products of a completely different nature.
Trademark licensing has a rich history in American business, largely
beginning with the rise of mass entertainment such as the movies, comics
and later television. Mickey Mouse's popularity in the 1930s and 1940s
resulted in an explosion of toys, books, and consumer products with the
lovable rodent's likeness on them, none of which were manufactured by
the Walt Disney Company.
This process accelerated as movies and later television became a staple of
American business. The rise of brand licensing did not begin until much
later, when corporations found that consumers would actually pay money
for products with the logos of their favorite brands on them. McDonalds
play food, Burger King t-shirts and even ghastly Good Humor Halloween
costumes became commonplace. Brand extensions later made the brand
licensing marketplace much more lucrative, as companies realized they
could make real dollars renting out their equity to manufacturers.
Celebrity branding, soon become phenomenal, which took the form of
celebrities attending PR events, appearances in advertisements and
several other promotional activities. In recent times given the fact that 9
out of every 10 people would vouch for a product whose identity has a
seal of their favorite idol. The popularity of celebrities has always been a
tool for marketers to promote their products through advertisements and
PR events. Licensing Celebrities to use their fame and “name” to start up
a new product has gained success in the recent decade.
Today, celebrities are not only endorsing big brands but are also entering
licensing contracts wherein, the celebrity allows the licensee to use his
brand image and name for promotion of his products, with due active
participation in wake of the promotion of the product. In return, he would

9. be entitled to a royalty fee. The contract is the medium of negotiation for
them.
In India, the scenario is still a little different. We see advertisements and
many events where the celebrities are seen promoting products of big
brands and sometimes, new brands. But, we do not come across many
examples of celebrity licensed products. There can be several reasons
behind it. The celebrities may not want to commit to one licensee as it has
certain predefined restrictions. Or maybe manufacturers are conservative
in their marketing approach.
In this study, we are going to evaluate the positive and negative aspects
of being in an endorsement agreement or celebrity licensing agreements.
We will analyse several examples of celebrity licensing abroad and in
India. Understand the various maneuvers of being in such a contract.
My research study will emphasize on the consumer insight and their
beliefs about their favorite celebrities in advertisements and their
response towards the launch of products by the celebrities themselves.
My research study will help gather the reasons why the celebrity
endorsements are such a hit with the marketers and the advantages of
Indian celebs engaging in licensing activities.
9

10. 10
In Contract
with
CELEBRITY LICENSING
And
CELEBRITY
ENDORSEMENTS

11. 11
Talking About History…
Celebrity Branding can take several different forms, from a celebrity
simply appearing in advertisements for a product, service or charity, to a
celebrity attending PR events, creating his or her own line of products or
services, and/or using his or her name as a brand. The most popular forms
of celebrity brand lines are for clothing and fragrances. Many singers,
models and film stars now have at least one licensed product or service,
which bears their name.
More recently, advertisers have begun attempting to quantify and qualify
the use of celebrities in their marketing campaigns by evaluating their
awareness, appeal, and relevance to a brand's image and the celebrity's
influence on consumer buying behavior.
For example, Omnicom agency Davie Brown Entertainment has created
an independent index for brand marketers and advertising agencies that
determines a celebrity’s ability to influence brand affinity and consumer
purchase intent. According to the Wall Street Journal, the Davie-Brown
Index (DBI) will "enable advertisers and ad-agency personnel to
determine if a particular public figure will motivate consumers who see
them in an ad to purchase the product advertised."
Celebrity branding is a global phenomenon and it assumes paramount
importance in countries like India where celebrities are given the status of
demi Gods by the masses. There is a certain correlation between
successful celebrity branding and brand endorsements.

12. 12
In Conversation with Celebrity
Endorsing…
Technically, Celebrity endorsement is the use of celebrities in order to
increase the sales and or recall the value of particular brand. Any
individual who enjoys public cognition and who uses this cognition on
behalf of a consumer good is said to be a part of an endorsement
campaign.
The world is witnessing a fast evolving market with a rush of competitive
products entering in every day. Customers are in a quandary discerning
which is best amongst them as all are equally good. They need more than
just motivation and words of the salesman to build confidence in the
product. Amongst popular marketing gimmicks to attract consumers,
endorsements by popular celebrities top the list.
Many people idolize certain celebrities for their sporting achievements,
appearance, or other talents. Advertisers often use this to sell products
that claim to have a particular effect.
As we all know, actor Ranbir Kapoor is considered as the Youth Icon of
India, call it a media hype or his talent which gave him the title, but
anything he does, the youngsters would try to copy and do thing like him
to be called or referred to, as him. The advertisers of Pepsi, very well
know about this image of Ranbir Kapoor, so he becomes the obvious
choice for Pepsi Campaigns, be it “Hai Yeh Youngistan Meri Jaan”
campaign (Darling, this is the land of Youngsters campaign) or the recent
campaign – “Oh Yes Abhi!” campaign (Right here Right Now campaign).
The audiences can easily connect with the emotions delivered by the
celebrity. The presence of the actor increases the brand recognition, for
consumers well remember, which brand he was endorsing for, for the ads
show what their idols are like in real life.
Before the 1990’s, not many actors or other celebrities like sportsmen or
musicians were seen in advertisements on television or in the product’s
marketing campaigns. Nor the advertisers and marketers were interested
in any such agreements. But at the turn, of 1990, when the government
allowed liberalization and globalization policies, that foreign products
started entering the Indian Market, increasing the competition in the
market. Now, the competition was not only with the domestic players but

13. also international products, which was cheaper and were of better quality.
To stay in competition, the marketers spent heavily on advertisement and
promotional campaigns. This meant getting famous, popular and those
celebrities who can influence the audience. In India where actors are
worshipped, companies spent crores in these campaigns, to not only
promote their products, but also to create an emotional bonding with the
products and the celebrities.
Table 1.: The list of the most popular celebrities into endorsements and
the name of the companies they endorse for.ce
CELEBRITIES COMPANIES THEY ENDORSE FOR
Salman Khan Thumbs up, Suzuki, Relaxo footwear, Yatra.com,
Wheel
Shahrukh Khan Tag Hueur, Pepsodent, Nerolac Paints, Sona
Chandi Chyavanprash, Belmonte, Dish TV, Lux.
Katrina Kaif Nakshatra, Lux, Veet, Berger Paints, Slice,
Pantene, Godrej, Olay, Titan Raga and Panasonic
M. S. Dhoni Aircel, Pepsi, Boost, Sony bravia, Reebok, Big
bazaar fashion
Virat Kohli Cinthol, Emami Fair and Handsome, Celkon
Mobiles, Flying Machine
Kareena Kapoor Sony, Philips, Alpenlibe, Limca, Lakme, Lavie
bags
13

14. 14
Evaluating the Pros and Cons…
There are a number of reasons why celebrity endorsements in advertising
are so common. A celebrity endorsement can help build trust with current
and potential customers, increase the chances of the brand being
remembered, and attract a new type of audience. Endorsements also may
increase the consumer's desire for a product. This is often achieved by
implying that the particular celebrity is successful, talented, or attractive
at least partly because of the product.
Endorsements are a common tool among manufacturers of retail
products. There are a number of reasons for this, but one of the most
important is credibility and trust. Many people hold certain celebrities
in high regard, so an endorsement of a product instantly increases the
amount of trust the consumer has in the brand. This can sometimes work
against the brand, however, if the celebrity starts to receive negative
press.
Another important reason why celebrity endorsements are so common in
advertising is brand recall. There are a huge number of products being
marketed to consumers all the time, so it’s essential for a brand to find a
way to stand out in the crowd and be remembered. If a customer sees an
advertisement involving his or her favorite celebrity endorsing a
particular product, then his or her chances of remembering that product
are greatly increased. (From the findings of my survey, every 4 out of 5
respondents could note down 5 brands, which there favorite celebs were
endorsing, out of those 5 brands some had even consumed as many as all
the brands.)
Celebrity endorsements also are useful for attracting new customers to a
brand that otherwise may not have held any interest for the consumer. If,
for example, a product has traditionally been marketed to elderly people,
then people in other age brackets may be reluctant to try it. A brand can
try to rectify this problem by using a celebrity who is associated with a
particular age group or demographic.
Many people idolize certain celebrities for their sporting achievements,
appearance, or other talents. Advertisers often use this to sell products
that claim to have a particular effect. Skin care products, for example, are
commonly endorsed by an attractive celebrity with seemingly perfect
skin. Recently, actresses like Kajol and Madhuri Dixit has been seen
endorsing anti-ageing cream brands. These ads have not only been

15. accepted positively, but also the impact on sales of the product has seen a
marvelous. Since, the way advertisers have portrayed these actors in late
30’s having same problems like any ordinary women. This call for
women to use the product and have a skin like that of a young wench, has
been widely adored.
There are a variety of other effects of celebrity endorsements in
advertising. A brand that gains a high-profile celebrity's endorsement
may, for example, receive greater media coverage than if it had run a
standard advertising campaign. The best illustration of this theory can be
proved by the campaign which Cadbury had started in India, after few
chocolate bars of Cadbury’s Dairy Milk was found with worms. The
company initiated a campaign where, the most renowned actor, Amitabh
Bachchan, was seen visiting the factory where the bars where made,
tasted it and confirmed that it is safe to be eaten by kids. This campaign,
was instantly appreciated and the market for Cadbury was regained. This
is the power of a celebrity, where the people believe what the celebrities
say. There is a trust involved with these celebrities, such as in this case of
Amitabh Bachchan saying that “if I can eat, you too can”, gives the
audience seeing him, a satisfaction and a conformity, that yes it is safe
and edible.
A celebrity endorsement also can help to bring an older product, perhaps
with consistently decreasing sales, into the modern day. Endorsements
don’t always have a positive effect, however, which is why it’s essential
to choose a celebrity who is likely to have the desired effect on the
product’s target audience.
Not all that glitters is Gold…
Often the desire of a celebrity to promote a company or his product has
been the most common marketing tools of all the times. But at times, this
desire can be very expensive, when the celebrity is caught in infamous
limelight. Recently, when the Indian Cricket Team Captain, M. S. Dhoni
was involved in controversial losses, there were talks of him resigning his
captaincy. This was a blow on the marketers, trying to save their brand
image, many brands cancelled the contracts with the skipper. This
resulted in Captain’s total brand endorsements to fall form 43 brands to
only 26.
Here’s the problem, Most companies are cannot afford huge cost and
losses when situations like these occurs. If the product is of a smaller
15

16. company, or a nonprofit organization, and their entire strategy is built
around one person giving the exposure it needs, it can mean that there is a
trouble. Big trouble. The safer bet is to go the grassroots path. Build
brand loyalty through old-fashioned means like high-quality products, a
strong brand, and effective customer service. Make lots of people want to
talk about you rather than paying one person to talk about you. But,
again, this takes time, and with the increasing competition among the
domestic and international marketing, this is can be a opportunity loss.
The problem of distrust is another disadvantage when it comes to a
celebrity endorsing it. It was noticed that an actress endorsing a particular
cola brand, was seen drinking the brand’s competitor cola brand. When
the pictures of her were released her fans were very disappointed. It also
affected the cola brand image. The audience is emotionally connected
with their celebrities and if the celebrities are seen not doing what they
say, leaves the audience disappointed and deceived. Thus, at times it
becomes very important for the advertisers and celebrities to take care of
those situations. Due to these reasons, the consumers are left with a doubt
in their minds that whether they actually use it or it is just the way of
earning extra money.
When a celebrity agrees to appear in an advertisement, it is expected that
the celebrity will also be present at other promotional events. At times,
the celebrity may have to travel cities to promote products, thus the whole
expenses of the celeb travelling, lodging and other additional expenses
are all borne by the company, which is then put on the consumer only.
16

17. 17
Signing Celebrity Licensing…
Celebrity Licensing is an agreement wherein, the name of a celebrity is
used, with permission through a properly signed contract to be used on
various merchandise, services or to launch a new product. These kind of
agreements are most popular in clothing and fragrances. Recently, many
actors, especially many sports personalities, have started their own line of
gyms and restaurants, which are either partnered by them, mainly using
the licensing contracts.
Celebrity licensing has taken off in a big way in the past decade making it
one of the most lucrative sales avenues for licensors of recent times, and
it looks set to stay this way. The world we live in is consumed with
celebrity status. It’s become a way for licensors and retailers to target pre
teens and teens, a notoriously difficult audience to reach. As a result of
this, licensing agreements and celebrity image rights have become big
business in terms of generating revenue. Such agreements might involve
granting third parties the rights to use a celebrity’s name, image and
brand in connection with product endorsement and related commercial
ventures.
Merchandise opportunities are phenomenal, going way beyond traditional
items such as t shirts, key rings and mugs. All manner of licensees will
want to get involved in a celebrity licence, making all kinds of items;
from electricals to licensed make up. Lead times are short, so auditing is
vital to check licensees honour their obligations to retailers. With
increased opportunities to merchandise, licensors must ensure they keep a
handle on all activity. With celebs and in particular music stars,
giveaways, competitions, promotions and new launches are
commonplace. Retain full control of how many products are being given
away and where they are going. It’s easy for licensors and licensees to
lose sight of this when a big star is hitting the headlines and demands are
high.
The text book example of such an agreement is the hard work that the
American actor, singer and entrepreneur Hilary Duff has done to promote
her line of merchandise – STUFF FROM DUFF. At the age of 17, (now
25) she launched her line if clothing and cosmetics with the above name.
She knew her target audience well, the girls aged between 6-14 and
aimed squarely at them. If a consumer would go to her site, she will find
her wearing her own brand clothes and giving advice which pieces to mix

18. and match. Her licensing agent Bravado ensure that her looks and the
clothes are in sync. This has been one of the most successful licensing
agreements in recent years, though David Beckhem’s Homme brand is a
huge success all over the world.
Counting Merits and Demerit…
Celebrities have long sought to license their names and likenesses in an
effort to garner additional revenue and to extend their presence to new
product categories. Traditionally, retailers sought out celebrity licensed
products because a celebrity’s name on a product would serve to
differentiate it and make it more attractive to consumers. At the same
time, manufacturers looked favourably on celebrity products because they
could charge higher prices for those items than for generic products.
Due to the plethora of newly-minted reality television stars in and around
the world, there are now more ‘celebrities’ seeking licenses than ever
before.
However, at the same time, the global recession has made celebrity
licensing more difficult and challenging. With so many retailers either
cutting back or going out of business, there are now more celebrities
fighting over reduced shelf space in retail. As a result, the marketplace is
simply overcrowded with celebrity brands, making it harder and harder
for celebrities to get new deals.
Though these types of licensing agreements are more common abroad,
than in India. The concept is yet to set in, in India. Though, the
Bollywood actor Shahrukh Khan tried to launch his range of merchandise
under the brand name of Ra.One, but failed to capture market. (this will
be discussed in later chapters in details.)
Price is a relative term. For a country like India where middle class
people are dominant in income group, not many people can afford
premium products. Though the 5% rich class are better off than many in
the whole world, but the dominant middle class cannot be avoided. For a
upper middle class person Rs. 1000 will be accounted as affordable, for a
rich person it will be seen as a meager amount, whereas, the middle class
it will be counted as “priced indulgence”. So, the strategic pricing is
necessary in India to survive and capture market share in the competitive
market.
18

19. 19
LET
THE
WAR
BEGIN…

20. 20
The Licensing Contract v/s The Endorsement
Agreements
A celebrity when agrees to a particular company to promote its product,
the company (marketer) and the celebrity enters into a legal contract. The
few features of a general contract may include:
• The time period of the contract it will be effective till. Usually
these time periods are relative and short. They are mostly based on
the campaign they are running. If the campaign is successful they
may renew their contracts or may just appoint another celebrity and
also change their campaigning strategy.
For instance, the Pepsi, India’s best Cola brand, launches different
campaigns as per the events happening in India. When Indian
Cricket team was up for the World Cup, they launched campaigns
with the sports celebrities like, M.S. Dhoni, Gautam Gambhir,
Virat Kohli and likes. Whereas, currently all the ads of Pepsi have
Ranbir kapoor promoting the campaign to drink Pepsi whenever
you want, it doesn’t matter where you are or which IPL team is
winning.
• The agreement lays down the terms and conditions, which the
celebrities will follow as well as the company shall comply with. It
also states the payments and expenses that the company will borne
in continuation of the contract.
Usually, in these agreements, the travel expenses of the celebrity, to
promote the products, is borne by the company themselves. The
Celebrities is always at the upper hand here, as the company and the
celebrity all know that their campaigns are based on the image and
popularity of the celebrity. Thus, the agreement leaves very low scope of
negotiations.
Also, there is no binding on the celebrity to endorse any other products or
from other product line from a rival company. For an example, Katrina
Kaif who endorses Mazaa, a mango drink, which is a product of Coca
Cola, can endorse Pepsi, the cola drink of Pepsico. Both being rival
companies.
Now, if we turn our attention towards the Licensing contracts, which is
more organized in comparison to any other arrangement. The contracts
have clauses, which helps the manufacturer negotiate with the celebrities

21. keeping the tap on the latter. In these arrangements, the celebrities are
bounded by several terms and conditions, that does not give them full
freedom to do as they feel apt.
Some of the issues discussed in these contracts different from the
endorsement agreements are-o
A clause for public appearances: This clause obligates the
celebrity to wear or use the products is essential. Also, the celebrity
would have to wear or use the product or promote the services
wherever possible, including in advertisements, at public
appearances and award shows. A favourable provision for the
manufacturer would be the following: “Celebrity shall be actively
involved in promoting the licensed products (whether requested or
not by licensee) and wherever reasonably practicable and
appropriate, shall publicly wear or use the licensed products,
particularly at public events, shows and appearances.”
o The Moral Cause:It is essential that the manufacturer requires the
celebrity to maintain his or her public goodwill through appropriate
public conduct. An entire licensing programme can be tarnished
from the celebrity’s inappropriate conduct, which could end up
costing the manufacturer millions of dollars. There are many ways
to structure the morals clause. One such example is: “Celebrity
agrees to conduct herself with due regard to public conventions and
morals, and agrees that she will not do or commit any act or thing
that materially degrades her in society or brings her into public
hatred or contempt, or that shocks public morals or decency in her
community or otherwise substantially and materially devalues the
value of this license grant. Any criminal indictment or legal
complaint filed with a court for a felony involving moral turpitude
by Celebrity shall be deemed a material breach of this agreement
by the licensor. The licensor’s violation of this paragraph shall
constitute a material breach of this agreement.”
21

22. 22
In Return…
The major difference in these two types of arrangement is of the payment
clause and their remuneration. In endorsement agreements, there is no
industry fixed percentage or amount that a celebrity will get. The
amounts are negotiable and range from lakhs of rupees to crores,
depending on the popularity and image of the celebrity in consideration.
Table 2: The table below depicts the fees the few celebrities
charge to appear in an advertisement and promotional
campaigns.
Aamir Khan Rs 14 cr
Shah Rukh Khan Rs 10 cr
Amitabh Bachchan Rs 8 cr
Salman Khan & Ranbir Kapoor Rs 8 cr
Hrithik Roshan & Akshay Kumar Rs 6 cr
Aishwarya Rai Rs 4 cr
Katrina Kaif, Priyanka Chopra, Deepika
Rs 3 cr
Padukone, Kareena Kapoor
Sonam Kapoor Rs 1.25 cr to 1.5 cr
Anushka Sharma Rs 75 L to 1 cr
Genelia DSouza, Sonakshi Sinha Rs 75 L to 1 cr
It is clear from the above table that the fees charges vary from person to
person, male to female, sports star to movie stars.
At the same time, when a celebrity enters a licensing agreement, there is
industry specific amount of percentage. Each industry has developed
certain set of parameters in which most deals fall. There might be
differences based on the type of licensed property, for example, the types
of properties for royalty purposes are usually broken into art, celebrity,
character/entertainment, collegiate, corporate, designer, event and sports.
Each of those general categories will often have a different range of

23. royalties rates. For example, when licensing for a scrapbook album
covers, the royalty rates would be in the following ranges: Art 6-10%;
Celebrity 3-7%; Character/Entertainment 8-12%; Collegiate 6-8.5%;
Corporate 5-8%; designer 3-7%; Event 10-15% and Sports: 8-10%.
23

24. 24
Trust Who...?
As we had earlier discussed the problem of distrust among the audience,
when a celebrity endorses a product. The audience is not sure whether
they actually use the products they advertise for. There is a preconceived
notion that the celebrities are so rich and popular why would they buy or
use products, which can be used by a mass.
Also, there has been past instances where a celebrities were seen
endorsing a product in television and few days after, were seen using the
rival company’s product. This not only disgusts the audience but also
diminishes the brand image of the products. The celebrity loses the trust
and so does the company, which the celebrity was associated with.
These trust issues can be resolved through licensing agreements. As the
public appearance clause states they are obligated to wear, promote and
talk about it to any event and shows they go to. Thus, promoting their
products. The best example of this case is the line of clothing from Hilary
Duff – Stuff from Duff and Paris Hilton Bags and Accessories, by Paris
Hilton herself. They not only appear in advertisements and campaigns.
But also involve themselves actively. They have been seen wearing their
own range of clothes and accessories in several events. This gives the
audience who are seeing them a sigh of relief that yes, they use the
things, which they advertise or promote for.
The best instance I can think of is of our very own, former Indian Cricket
Team Captain Saurav Ganguly’s restaurant, Caught and Bowled. The
restaurant has been popularized in the name of the cricketer. From the big
name attached to it, we can perceive that the restaurant will be good in
ambience and taste. At the same time, the restaurant does offer the same.
The perks of visiting this restaurant is that you can be lucky enough to
spot Saurav Ganguly and his cricketer friends dining with you adjacently!

25. 25
Impact on Brands…
Usually, in both the arrangements be it, Celebrity endorsements or
Celebrity Licensing agreements, the whole campaign is based on the
celebrity. The image, popularity, attitude, and presence of the celebrity all
of it decides the fate of the campaign. The success of the campaign
hugely depends on the celebrity. Now, if anything happens during the
campaign, where the negative publicity of the celebrity starts doing the
round. The company has no other way, other than to discontinue their
endorsement campaign. This is because, if the celebrity is involved in any
thing, which is against his image, then not only his name, but also the
company’s goodwill and product’s brand name suffers.
Though, is a little safer and the losses are less and can be recovered,
when one is in a licensing agreement. This is due to the moral clause, we
talked about in previous pages. The clause binds them, and breach of
such contract will mar the image of the celebrity more than the
manufacturer’s. This is because the brand name used for the product is of
the celebrity’s and not of the manufacturers’. The promotions are done on
the name of the celebrity as his/her line of merchandise.
One could certainly have argued a couple of weeks ago that Nike’s
relationship with “the blade runner” Oscar Pistorius was a match made in
heaven. Pistorius made a name for himself during the 2012 London
Olympics. He was the first double amputee to race and he performed
admirably. Stories about how he inspired many other physically
challenged athletes were the talk of the summer.
Pistorius had been hosting a Nike ad at his site that said, “I am the bullet
in the chamber.” This ad went well with the spirit of the sports company
Nike as well as with the sportsperson.
That was all well in the past now. On Valentine’s Day, Pistorius was
arrested for the murder of his girlfriend, who was found shot inside his
fortified house.
In perhaps, the most cringe-worthy incident of celebrity endorsements
gone wrong. Not surprisingly, Nike pulled this ad immediately.
Will anyone hold Nike responsible for using Pistorius as a celebrity
endorser? Probably not. It was a match made in heaven. His Olympics

26. performance seemed to embody Nike’s “Just do it” attitude. And how
could they have known such a terrible thing would happen?
At this hour, the company’s image also suffers, if the celebrity in the
campaign is involved in such activities. But not all celebrities are like
him.
At the same time, the manufacturers involved in licensing agreements are
safer. Because if anything happens like this. The image of the celebrity
suffers more than the manufacturer, as the brand name is of the celebrity
himself. The manufacturer can now appoint a new licensor, who would
agree to launch his or her brand of cloth line. And again the company is
back in the market, with the losses recovered from the celebrity, itself.
26

27. 27
Lack Of Modern And Organized Retail Sector
In India, a country that treats its celebrities Gods, it would seem logical to
develop robust celebrity brand licensing programmes. In fact, Amitabh
Bachchan, arguably the most famous celebrity to grace Indian cinema,
was forward thinking enough to launch his own branded products in the
late 1990’s. However, because of the lack of modern or organized retail
and other significant issues, it met with little success. But with the
modern retail is now growing faster, its high time to introduce such
programmes.
We have a retail store for Paris Hilton’s bags and accessories, but there
are no Indian Celebrity retail stores.
Shahrukh Khan, launched his range of toys, children’s merchandise as
well as video games. Even after heavy promotions and publicity, the
campaign was a failure. One of the reasons can be that the movie flopped.
This was the major set back. Also, the distribution was not well
organized. Even after the big name of Shahrukh Khan attached to the
merchandise, it was not of a big success. The reasons behind such a
failure, has been a matter of study for many market researchers. It can be
blamed on the distribution channel, or on the lack of persuasion skill of
the celebrity to attract the consumers or we can also put it as the
consumers are not yet ready to buy these kinds of products; and are happy
with the celebrities in the endorsements.

28. 28
Every
Cloud
Has
A
Silver
Lining…

29. 29
The categories that are yet to be explored…
There is no category untouched as licensing is spreading its wings to all
possible product range be it lifestyle products, health and wellness
category, real estate, hospitals, toys, school stationeries, entertainment or
corporates etc.
Though, there are few product categories like Entering restaurants and
premium cafes, video games and toys, liquor brands, Accessories like
watches and training schools for sports or acting schools.
Fascination for Dead Celebrity…
Marilyn Monroe, Elvis Presley, Yves St. Laurent and Michael Jackson
are supposedly the biggest selling dead celebrities.
This year, Michael Jackson took the No.1 spot on Forbes Top Earning
Dead Celebrity 100 with gross earnings of $ 275 million. Coming in at
No.2 is Elvis Presley with 60 million $.
Well, the dead celebrity ranks change each year and in most cases they
are like old wine that betters with age. Moreover, lot also depends on how
the celebrity has died. For example, if a celebrity dies a tragic death and
at a young age, there is lot of immediate sympathy in the air which the
business could cash on. Marylyn Monroe and Michael Jackson died
young and abruptly, leaving us asking for more.
Through licensing, we are not only keeping them alive but also paying
ode to them. Let us see how the dead celebrities can benefit the
manufacturers.
Advantages of Licensing a Dead Celebrity
Less interference as the celebrity is dead.
Consistency in image. For example: A living celebrity who loses
his market due to a personal problem also loses his credibility.
Emotional Bubble encashment (Like in Michael jackson’s case) the
markets want to see him everywhere.
Disadvantages
No in- person endorsement.
No support in terms of material and assets (Limited assets).
Advantages of Licensing a Living Celebrity
In- person endorsement.

30. 30
Support in terms of material and assets.
Disadvantages
Interference.
Personal problems may affect his market.
The advantage of having a dead celebrity client is that there is no direct
interference from them. And their popularity is more than the living
celebrities thus the legends are consistent in the market. Whereas in the
case of living celebrities, they interfere a lot, and their personal problems
can have a direct impact on their salability, for example take Lindsay
Lohan who is having a tough time recently with her addiction.
But in India, currently, celebrity licensing is rampant but mostly it the
game of Cricketers and Bollywood stars. Well, whether dead or alive,
celebrity licensing doesn’t stop to lure us.

31. 31
MY
RESEARCH -

32. 32
OBJECTIVE OF THE STUDY
Ø To understand the popularity of celebrities in marketing brands.
Ø To understand how celebrity endorsements have become the
common marketing strategy all around the world.
Ø To understand the trend, fashion and lifestyle of the youth of India.
Ø To get a brief idea of how Celebrity Licensing works.
Ø To know the impact of celebrity endorsements on the audience.
Ø To know the effect of advertisements and campaigns on the youth
especially.
Ø To find out if celebrities can be called influencers.
Ø To know the benefits of celebrity licensing and endorsing.
Ø To note the reasons of failure of Celebrity Licensing in India.
Ø To find out the scope of expansion in India.
Ø To note the benefits the consumers will get from such agreements.
Ø To know the scope for merchants, manufacturers and retailers in
India.

33. 33
Research
Methodology
Used…

34. 1. DESCRIPTION OF RESEACRH
DESIGN AND PROCEDURES USED:
34
Ø A topic was selected and defined.
Ø A method study was determined.
Ø Population size was determined.
Ø Out of which a sample size was selected.
Ø A survey was conducted among the selected sample size.
Ø The feedback was recorded with the help of statistical tools and
instruments.
Ø The recorded data was then, analyzed and represented using
charts and figures.
Ø Secondary data was collected from various sources, for
example, internet, and was compared with my research analysis.
Ø Conclusion was made and scope of expansion was determined.

35. 35
2. SOURCES OF DATA:
A. NATURE OF DATA
v PRIMARY DATA was collected from the people of
Kolkata.
v SECONDARY DATA was collected from magazines and
internet.
B. POPULATION
v Teens between the ages 13-17 years.
v Youngsters between the ages of 18-25.
C. SAMPLING
v 65 teens from the age group of 13-17 years.
v 67 youngsters who are in the age group of 18-25 years.
D. SAMPLING PROCEDURE
v CONVINIENT SAMPLING method has been selected, as
constraints like:
Ø Time constraint
Ø Cost constraint, and
Ø More importantly, being the lone person doing the
survey, there was a Labor constraint.
v I have tried to be unbiased in my research work. I have not
restricted my work to the people I know, but have included
Ø Students from our college, St. Xavier’s College,
Kolkata;
Ø My housing complex, Mani towers.
Ø For the survey of youngsters I had posted the
questionnaire on the internet.

36. Processing…
36

37. 37
Part 1: Celebrity Endorsements:
Q: A celebrity on a television advertisement
attracts you to the product/brand?
Response
0
5.8
10.3
66.6
17.3
Strongly
Disagree
Disagree
Neutral
Agree
Ø When the consumers were asked if a celebrity in a television ad
attracts them, 66.6 % people agreed upon this saying that yes, they
are attracted towards the ad when a known face is endorsing it.
Ø Whereas, none of the respondents, disagreed with the fact, though a
fraction of people said they were unaffected, by who is there in the ad,
but the content of the ad was more important.

38. Q: Do you think celebrity advertisements help
you remember brand and to be interested in it?
Ø 70.7% people agreed that celebrity advertisements help them
remember brand and to be interested in it. Whereas, 23.7%
people strongly agreed that celebs in an ad helps them recollect and
associate better with brands than other ads on television or print
media.
Ø But there was not even one respondent who could disagree with the
fact that the celebrity presence does makes it easier for the
consumers to remember the brands.
38
0
5.6
70.7
23.7
Response
Strongly
Disagree
Disagree
Nuetral
Agree
Strongly
Agree

39. 39
Q: Will you purchase the product/brand just
because of the endorsing celebrity?
30
25
20
15
10
5
0
Very
Unlikely
Responses
Unlikely
Neutral
Likely
Very
Likely
Responses
Ø The above bar graph makes it very clear that around 50% people
would buy a product just because of the celebrity association
with the product.
Ø The majority of the people, who said they would buy any product
due to a celebrity in the ad, were majorly agreed upon by the
respondents in the age group of 15-18 years of age.
Ø Whereas, the majority of respondents saying no to such purchases
were all above the age of 20, who would indulge in more
thoughtful and planned purchases, than random purchases.

40. 40
Q: Do you really believe celebrities use the
products they endorse for?
40
35
30
25
20
15
10
5
0
Responses
Very
Unlikely
Unlikely
Neutral
Likely
Very
Likely
Responses
Ø The above chart shows that majority of the people do not trust the
celebrities that they really use the products, they endorse.
Ø Though, the teenagers believe that celebrities do use the products
they endorse for. The majority of respondents believing the
celebrities were majorly teens of age 15-18.

41. 41
Q: Does your purchase decision change if the
celebrity is associated with a negative
publicity?
Responses
0
5
10
15
20
25
30
35
Very
Likely
Likely
Neutral
Unlikely
Very
Unlikely
Responses
Ø When the consumers were questioned about the effect on their
purchase decision if their celebrities were involved in negative
publicity, 33.3% respondents were neutral to such situations.
Ø The majorly differences appeared in the opinion of the teenagers
again. Some said they would stop using it, others where unaffected
by any such publicity, they would buy the product anyway.

42. Part 2: Celebrity Licensing
Q: What type of product would you prefer – the
one which is endorsed by a celebrity(option A),
or the one which is celebrities own line of
products (option B),
(for example, Homme perfumes by David
Beckham)?
42
48.8
Responses
51.2
Option
A
Option
B
Ø 48.8% respondents believed that they would purchase the
product, licensed by their favorite celebrities.
Ø Whereas, the rest were happy with the celebrities endorsing a
particular brand.

43. 43
Q: Does these products have an emotional
impact on you?
70
60
50
40
30
20
10
0
Very
Unlikely
Responses
Unlikely
Neutral
Likely
Very
Likely
Responses
Ø The respondents agreed that these products had an emotional
impact on them. Since, it had an association with a celebrity
specially one of their favorites.
Ø Though, the respondents above the age of 18, did not agree that
they were emotionally attached to a particular celebrity that they
could affect their purchase decision.

44. Q: Do you think that use of products or services
like, Paris Hilton Bags and Accessories, Britney
Spears Perfume by Elizabeth Arden and such
products, add to your status?
0
Responses
28.6
50
14.3
7.1
Strongly
Disagree
Disagree
Neutral
Agree
Strongly
Agree
Ø More than 50% respondents agreed that the licensed products
add value to their status, if they purchase it.
44
Ø But, as high as 28.6% respondents did not feel the same as others
and said they do not add to status, they are just like any other
products in the market.

45. Q: Will you pay a premium price for product just
because it has the brand name of your favorite
celebrity?
20.2
Ø The trend in here is same as, when it comes to being emotionally
attached to the celebrity and the product associated with it.
Ø The 50% respondents did not mind paying extra amount to
posses such products, because these were the line of products
by their favorite celebrities.
45
11.1
18.7
22.2
27.8
Responses
Very
Unlikely
Unlikely
Nuetral
Likely
Very
Likely

46. 46
Lets Find
Out,
What We
Found
out…

47. 47
Findings of the survey:
§ From the analysis of the survey, it is very palpable that consumers
are attracted to an advertisement, when they spot any celebrity in
the same. Thus, they take notice of the product and subconsciously
register them. This helps in brand recall when they are making a
buying decision.
§ The presence of the celebrity in a promotional event interests them
to take part in them and also to consider buying the product.
§ This largely explains why the celebrity endorsements are so
common in Indian marketing campaigns.
§ The teens play the most important role as a buyer, as they are more
emotionally attached to hero-worshipping, be it male or female.
They are attracted to their favorite celebs and will do anything to
copy them.
§ Connecting with brands is very easy when celebrities are endorsing
it.
§ These findings tell us that celebrity licensing too can work in India,
where majority of population are under the age of 25 and these are
the people who are mostly affected by the celebrity presence in
their buying behavior.
§ Keeping them in mind, the manufacturers can launch merchandise
to fit their taste, image of the celebrity and with the on going
trends.
§ The problem of distrust exists among the users. As high as 35%
respondents said they did not trust the celebrity when it came
to they using the products themselves.
§ The people in India are not opinionated about a product being
endorsed or licensed. But yes, they prefer a celebrity being
associated with the product.
§ The licensed product, if launched in an organized in a proper,
organized sector, the people will pay any price for it, for they see it
as a mean to be seen as their celebrity. It adds to their status. When
celebrity is launching a range of merchandise as its own, it is
perceived as they are using it in their daily life too, as it is their

48. favorite. Anything favorite to a celebrity is a favorite to his or her
fan.
§ Also, when the respondents were asked whom they would want to
launch their lien of products, around 80% people ranked movie
starts as the celebrities that should have their own range of
merchandise followed by the sportspersons.
§ These facts and figures makes it clear that celebrity licensing has
full scope to flourish in recent times, as India being a country
where celebrities are worshipped, their line of product should
succeed as people are waiting for such products. Only issues like
retail sector and other distribution channels needs to worked up
again.
§ When respondents were asked to give feedback on repeat
purchases, nearly 90% of the people said that quality, utility
derived from the product and the right price, would affect their
repeat purchase decision. Due to the influence of the celebrity they
might try it once, but the repeat purchase would come down to the
factors like price and benefits one could enjoy from such a product.
48

49. 49
All
Is
Well
That
Ends
Well…

50. Conclusion
The whole process of starting and till the completion of the project has
been a learning process for me. Through this research project, I got the
opportunity to understand the various marketing tools that companies
have been indulging in to promote their products and services.
The growing competition among the plethora of brands, new horizons
like licensing and similar marketing strategies are being explored, giving
consumers more of each product. Since past two decades consumers have
been exposed to several domestic and international brands, they did not
expect they would at the time of independence. Today, the demand is not
as high as the number of products available in the market.
The only way to stay in the market is to innovate new ideas, strategies to
capture the market share before their competitors do. The advertisers play
an important role developing these strategies. They are the people who
decide how the message the company wants to give to the audience will
be sent. The conceptualization of the message and then putting it into a
small audio-visual is very important. Then comes the role of celebrity.
In India, the celebrity is the biggest influencers and opinion and reference
groups. They can persuade and influence people. They are the
trendsetters. Every consumer has a role model, and when a consumer sees
his role model, an actor or a sportsperson advertising a product asking to
try and feel like him or her, and become like them; they are
subconsciously attracted to such products. The consumers wants to get
the feel of being like the role model, and when they see their celebrities
talking about a product they use, they instantly made up their that they
have to invest in that particular brand of person.
Advertisers and marketers cash upon the emotional side of the consumers
and try to change their buying behavior. The history of such advertising
has shown that celebrities have a more positive effect on the consumers
than an unknown person in an ad. The advertisers show the celebrity in
such a way that people are convinced that it would give them happiness
and worth.
This has lead to the concept of licensing their names of famous and
popular celebrities – dead or alive, alike. It gives a safer and more
organized retailing to the manufacturer. The losses are much more less in
licensing agreements, as the celebrity and the manufacturer are both
50

51. bounded by a contract and thus are at the safest position, when it comes
to branding and image consulting.
We can never find a perfect way to sell a product, but we can improvise
certain strategies to market our products. We can never say that this
strategy is the best strategy it will never fail. Globally, celebrity brand
licensing is very popular and there have been many successful stories,
which we can study. But, in India, they have failed to capture that market,
which the marketers have been expecting it to. There can never be perfect
thumb rule for anything, it all depends on how consumers perceive and
act.
With this I would like to conclude my research paper.
51

52. 52
BIBLIOGRAPHY
§ Shah, S 2012, 'Tapping Bollywood Glam' Retailer, March-April
2012, pg. 113.
§ Ferdinand, J 2012, ‘Risk And Benefits of Celebrity Licensing’
Retailer, January 2013, pg. 85
§ Unknown, ‘Royalties Rates: Not as simple As you may think!’,
www.jjkaufman.com/articles/royaltyrates.htm
§ Clayman, M 2013, ‘the Problem with Celebrity Endorsements
and Influencers’,
www.claymanmarketingcommunications.wordpress.com/201
3/02/20/the-­‐problem-­‐with-­‐celebrity-­‐endorsements-­‐and-­‐
influencers/
§ Seth,
S,
‘The
Fame
Game’,
http://www.licenseindia.com/fame_game.php
§ Unknown,
2010,
‘Brand
Licensing’,
http://en.wikipedia.org/wiki/Brand_licensing
§ Other
than
this,
the
references
has
been
taken
from
various
presentations
and
research
articles
I
came
across
while
collecting
secondary
data
for
my
project,
special
mention
to
the
presentation
‘Luxury
Connect’
by
Hubspot
company.

53. 53
APPENDIX
Given below is the sample questionnaire which were given to
respondents to gather information about the consumers perception
towards the celebrity endorsements and celebrity brand licensing.
Questionnaire Part - 1
1. What is your gender?
Male Female
2. How old are you?
Under 18 Between 18-25
3. A celebrity on a television advertisement attracts you to the
product/brand?
• Strongly disagree
• Disagree
• Neutral
• Agree
• Strongly agree
4. Do you think celebrity advertisements help you remember brand
and to be interested in it?
• Strongly disagree
• Disagree
• Neutral
• Agree
• Strongly agree

54. 54
5. Do you want to purchase the product/brand after watching
celebrity endorsement?
• Very unlikely
• Unlikely
• Neutral
• Likely
• Very Likely
6. Will you purchase the product/brand just because of the endorsing
celebrity?
Very unlikely
Unlikely
Neutral
Likely
Very likely
7. Will you decide to buy the product with celebrity endorsements
without getting to know more about it?
• Very unlikely
• Unlikely
• Neutral
• Likely
• Very likely
8. Do you really believe celebrities use the products they endorse for?
• Strongly disagree
• Disagree
• Neutral
• Agree
• Strongly Disagree

55. 55
9. Does your purchase decision change if the celebrity is associated
with a negative publicity?
• Very unlikely
• Unlikely
• Neutral
• Likely
• Very likely
10. What reason would you give for repeat purchase of such
endorsed products/brands?

56. 56
Questionnaire Part -2
3. What type of product would you prefer –
• the one which is endorsed by a celebrity, or
• the one which is celebrities own line of products,
(for example, Homme perfumes by David Beckham)
4. According to you a celebrity should start their own range of
products rather than endorsing it?
• Strongly disagree
• Disagree
• Neutral
• Agree
• Strongly agree
5. According to you, what kind of celebrity are best for starting their
own range of products: (please rank them)
Business leaders
Athletes/ sportsperson
Movie stars
Famous models
Singer/ musicians
Political figures
6. Does these products have an emotional impact on you?
• Strongly disagree
• Disagree
• Neutral
• Agree
• Strongly agree

57. 57
7. Can the name of the celebrity affect your buying decision?
• Very unlikely
• Unlikely
• Neutral
• Likely
• Very likely
*
8. Do you think that use of products or services like, Paris Hilton
Bags and Accessories, Britney Spears Perfume by Elizabeth Arden
and such products, add to your status?
• Strongly disagree
• Disagree
• Neutral
• Agree
• Strongly agree
9. Will you pay a premium price for product just because it has the
brand name of your favorite celebrity?
• Very Unlikely
• Unlikely
• Neutral
• Likely
• Very Likely