Indian Streams Research Journal Vol - I , ISSUE - V [ August 2011 ]

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ISSN:-2230-7850

Article :IMPACT OF CELEBRITY ENDORSEMENTS ON OVERALL BRAND Author :Prof. Dr. G. L. Pedhiwal[Smt.L.R.T. College of Commerce, Akola] Abstract Today 'Celebrity Endorsement' has become a trend and perceptible as a winning formula for product marketing and brand building. It has been established as one of the trendiest tools of promotion in recent time. It is easy to choose a celebrity but it is tough to establish a strong association between the product and the endorser. Firms invest huge amounts as advertising expenditure for hiring the right celebrity. However there lies uncertainty with respect to the returns that the company might be able to garner for the brand. Consumers perceive the brand as having superior quality because it has been endorsed by a credible source. This makes endorsement as one of the indictors of quality for any brand. Corporate credibility along with endorser credibility plays a significant role in the attitude of the consumer towards the brand and the advertisement respectively. Successful branding programs are based on the concept of singularity. The objective is to create in the mind of the prospect the perception that there is no other product on the market quite like your product. Objective The objective of this project is to investigate whether celebrity endorsement, act as a source of effective brand management, have impact over the purchasing behavior of customers, evaluate associated factors that contribute to the success or failure of the endorsement and explore what the concept represents in terms of new knowledge. For this I decided to conduct this very research and the objectives of my research are: 1 To do a study and analysis as to why and when brands use celebrities as endorses and what kind of risks are involved? 2 To identify the influence of celebrity endorsement on consumer buying behavior.

Indian Streams Research Journal Vol - I , ISSUE - V [ August 2011 ]

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ISSN:-2230-7850

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

Research Hypotheses This research considered following Hypothesis Hypothesis No.1:- To find out whether celebrity endorsement is effective tool to persuade consumers in their buying decision Keyword Celebrity Endorsement, Celebrity Credibility, Brand Personality, Brand Image.

Introduction An Indian family has at least one television set and a consumer is exposed to around 3000 ads per day. Likewise, there are more than hundreds of television channels in India broadcasting over 3 million television commercials each year in India. The media-explosion can thus be easily demonstrated. More over, people forget 80% of the information in just 24 hours! Just imagine the plight of the marketer to make his brand shout over the deafening clutter of all the brands! Some where in the 80s, an Indian marketer found the solution, 'Celebrity Endorsement' for the brand! Since then, Indian advertising has metamorphose hosed into a strategic tool that enhances sales, siphons more profits and helps in the process of brand-building and product promotion. With this evolved a strategy that tried to benefit from the emotional attachment of the admirers or the fans of the celebrities in the form of celebrity endorsement. It does help in creating instant awareness and visibility; but for a cost. This paper tries to look beyond the obvious benefits that might be derived out of celebrity endorsement. It tries to understand the process of consumer psychology and impact of celebrity endorsement on the overall process of brand building. Mechanism and Theories of Celebrity Endorsement Grant McCracken has explained in his Meaning Transfer Theory. The theory explains that a celebrity encodes a unique set of meanings which if well used can be transferred to the endorsed product. Such a transfer takes place in three stages encoding meanings, meaning transfer, meaning capture (Figure 1).

Indian Streams Research Journal Vol - I , ISSUE - V [ August 2011 ]

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ISSN:-2230-7850

I. Encoding Meanings: Each celebrity has a unique set of meanings, which can be listed by age, gender, race, wealth, personality or lifestyle. In this way, the celebrities encode a set of meanings in their image. For example Preity Zinta can be seen as a lively, charming, bubbly, witty and enthusiastic. II. Meaning Transfer: This stage transfers those meanings to the product. When skillfully portrayed, celebrities can communicate this image more powerfully than lay endorsers. III. Meaning Capture: This assumes that consumers purchase products not merely for their functional value but also for their cultural and symbolic value. The theory says that consumers buy the endorsed product with the intention of capturing some of the desirable meanings with which celebrities have passed on to the product. This is more eminent in lifestyle products like clothes, perfumes, cell phones etc.

Defining a 'Celebrity' Celebrities are people who enjoy public recognition by a large share of a certain group of people. Whereas attributes like attractiveness, extraordinary lifestyle or

Indian Streams Research Journal Vol - I , ISSUE - V [ August 2011 ]

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ISSN:-2230-7850

special skills are just examples and specific common characteristics cannot be observed, it can be said that within a corresponding social group, celebrities generally differ from the social norm and enjoy a high degree of public awareness. 'Celebrity Endorsement' McCracken's (1989) definition of a celebrity endorser is, "any individual who enjoys public recognition and who uses this recognition on behalf of a consumer good by appearing with it in an advertisement (marcoms), is useful, because when celebrities are depicted in marcoms, they bring their own culturally related meanings, thereto, irrespective of the required promotional role. Scope of Celebrity Endorsement 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 and/or corporate communication attempts for at least a century. Three of humankind's greatest inventions (cinema, radio, and television) have extended the scope of endorsement as an advertising technique. Today, use of celebrities as part of marketing communications strategy is fairly common practice for major firms in supporting corporate or brand imagery. Today, the use of celebrity advertising for companies has become a trend and a perceived winning formula of corporate image building and product marketing (Media, July-August 1997). Celebrity Selection There are various scientific ways in which the right celebrity is selected for the product endorsement; the following figure shows how celebrity is selected for endorsing

Indian Streams Research Journal Vol - I , ISSUE - V [ August 2011 ]

!ommerce

ISSN:-2230-7850

Framework to Make Effective Celebrity Endorsement Program

Indian Streams Research Journal Vol - I , ISSUE - V [ August 2011 ]

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ISSN:-2230-7850

One can gauge the performance of celebrity endorsement marketing program across the various stages of development refer to following figure where attempt had been made to prepare a framework to build a more effective celebrity endorsement program

Celebrity Endorsements Framework The action plan should be able to answer the following key questions: 1 2 3 Are the celebrity endorsements programs result driven? How to quantify the value generated by the celebrity endorsements? Are customers able to connect the brand with the celebrity?

The Need for Celebrity Endorsement The appeals of the celebrities almost always attract people and their words are worshipped by a lot of Indian people. The business firms, thus, resort to celebrity endorsement to perk up brand recall and product sales. This has now become a trend and is being perceived as a strategic means of brand building exercise. The Elaboration Likelihood Model (EML) suggests that consumers will scrutinize claims more in important situations (say, life saving drugs) than in unimportant ones. So, for almost similar products like Coke and Pepsi, it makes sense to use endorsement.

Impact of Celebrity Endorsement The concept of celebrity endorsement has become a rage in India as well, with every company trying to rope in a brand ambassador of sorts for their brands. The increasing number of endorsements throws a valid question to the consumers. Is there a science behind the choice of these endorsers or is it just by the popularity measurement? What are the reasons which lead to impact of celebrity endorsement on brands? Through research and analysis, this paper develops a 14 point model,

Indian Streams Research Journal Vol - I , ISSUE - V [ August 2011 ]

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ISSN:-2230-7850

which can be used as blueprint criteria which can be used by brand managers for selecting celebrities, and capitalizes the celebrity resource through 360 degree brand communication, since our research proposes it as the foundation brick of the impact of celebrity endorsement. Our study reveals that the impact of celebrity endorsement is proportional to the 14 factors discussed in the model. The success of a brand through celebrity endorsement is a cumulative of the following 14 attributes. Greater the score of the below parameters, greater are the chances of getting close to the desired impact.

Research Methodology

Questionnaire based sample analysis was the base of this study. A well framed set of questioned were circulated to the target personnel or some interviews were

Indian Streams Research Journal Vol - I , ISSUE - V [ August 2011 ]

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ISSN:-2230-7850

conducted over telephone, even few of them were face-to-face the research design adopted in the study will be exploratory in nature Collection of Data: - Data was collected through primary source and secondary source. Sample unit: - Akola City Sample size: - Sample sizes of 50 persons were taken for this research. Sampling Technique: - Random sampling technique was used in this research project. Questionnaires: - A structured questionnaires was formulated and than applied to gather information with the aid to solve the objective of the study. Data Processing: - Data was entered into MS-Excel Sheet and than analyzed by using simple techniques of graphical and tabulation Hypothesis Testing: - Chi-square tests were used to set observed frequencies obtained after experimentation that have supported by hypothesis or theory. The test is known as X2 test of goodness of fit and is used to test if the deviation between observati on (experiment) and theory may be attributed to chance (fluctuations of sampling). 2 also enables us to explain whether or not two attributes are associated or related to each other. To test the goodness of fit: - It helps to test goodness of fit by using null and alternate hypothesis.

1. Celebrity endorser as an effective method of persuasion:Preference 23 7 5 10 5

Strongly Agree Agree Indifferent Disagree Strongly Disagree

Indian Streams Research Journal Vol - I , ISSUE - V [ August 2011 ]

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ISSN:-2230-7850

Interpretation: - This chart depicts that mostly people agree that Celebrity endorsement is an effective tool of persuasion. 46% of people strongly agree that celebrity endorsement is an effective tool of persuasion and 20% of people disagree that it is one of the tool. HYPOTHESIS TESTING :- Step1: State Hypothesis: Ho: Celebrity endorsement is not an effective tool of persuasion to facili tate customer to go for purchase.. Ha: Celebrity endorsement is an effective tool of persuasion to facilitate customer to go for purchase. Step 2: Set the Rejection criteria: DF = 5-1 = 4, At alpha .05 and 4 degrees of freedom, the critical value from the chi square distribution table is 9.49

Indian Streams Research Journal Vol - I , ISSUE - V [ August 2011 ]

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ISSN:-2230-7850

Step 3: Compute the Test Statistics: = (O-E) /E

Preference Strongly Agree Agree Indifferent Disagree Strongly Disagree

Observed 23 7 5 10 5

Expected 10 10 10 10 10

O-E 13 -3 -5 0 -5

(O-E) 169 9 25 0 25

(O-E)/E 16.9 0.9 2.5 0 2.5 = 22.8

Interpretation: As the Chi-square test statistics 22.8 exceeds the critical value of 9.49 hence null hypothesis is rejected and we arrived at the conclusion that the alternative hypothesis is accepted. Hence it can be concluded that celebrity endorsement is an effective tool of persuasion to facilitate customer to go for purchase. Limitation of the study This study is conducted in Akola city. For the purpose of this paper exploratory research was undertaken. A diminutive number of related journal articles were reviewed. This research had a relatively small sample size; there is a need for confirmatory research with a larger sample testing hypotheses derived from the findings presented in this paper. Another limitation of research is that our findings for non inspirational celebrities are not significant. Another primary limitation is related to the generalization of the research results. Most important generalization issue is related to sample. Conclusion

Indian Streams Research Journal Vol - I , ISSUE - V [ August 2011 ]

!ommerce

ISSN:-2230-7850

Celebrity endorsements give a brand a touch of glamour and the hope that a famous face will provide added appeal and name recognition in a crowded market. In the battle for the mind, you get the customer excited by showing him a known face, and an effective demand is created. In short it helps increase the recall value of the brand .Successful celebrity/brand partnerships have resulted in significant gains in income for brand owners. This study shows that consumers report higher self-brand connections for brands with images that are consistent with the image of a celebrity that they aspire to be like, particularly in the case when the image of the celebrity and the brand match. It was found that people love to see celebrities endorsing their brands, so the involvement of common man is pretty high with these celebrities. So marketers should use the right celebrity matching with the product. Study also examines how self-brand connections are formed. Celebrity endorsement effects are moderated by brand symbolism, such that brands that communicate something about the user yield stronger effects than brands that do not. This finding is an important demonstration that consumers are motivated by their self-needs to utilize brand associations derived from celebrity endorsement in a contingent fashion to construct and present their self-identities and lastly in one sentence would like to conclude whether Celebrity endorsement has a positive or a negative impact on the brand still it is a debate and is open to interpretation. But till the time the corporate world continues to foot fancy bills of celebrity endorsers and till consumers continue to be in awe of the stars, the party is not likely to break up.

Reference L. K. Marhur, I. Mathur and N. Rangan (1997) June, "The Wealth Effects Associated with a Celebrity Endorser: The Michael Jordan Phenomena", Journal of Advertising Research Goldsmith, Lafferty and Newell (2000), "The Impact of Corporate Credibility and Celebrity Credibility on Consumer Reaction to Advertisements and Brands" B. Zafer Erdogan, Michael J. Baker and Stephen Tag (2001) June, "Selecting Celebrity Endorsers: The Practitioner's Perspective": www.blonnet.com http://www.justtollywood.com/viewnews.php?id=0000002407

Indian Streams Research Journal Vol - I , ISSUE - V [ August 2011 ]

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ISSN:-2230-7850

www.indiantelevision.com www.rediff.com article by Country head, O&M India http://economictimes.indiatimes.com www.telegraphindia.com/1100727/jsp/.../story_12729775.jsp www.businessweek.com/smallbiz/.../sb20081114_106175.htm