SYNOPSYS REPORT

On

“Impact of celebrity endorsement on consumer

buying behaviour in FMCG sector”

Towards partial fulfillment of

Bachelor of Business Administration

Guided by: Submitted by :

______________
_________________

________________ VI Semester

Roll No.________

Session
 DECLARATION

I do hereby declare that all the work presented in the research report
entitled “Impact of celebrity endorsement on consumer buying behaviour
in fmcg sector” is carried out and being submitted at the school of
management for the award of Bachelor of Business Administration (P), is
an authentic record of Mirza Danish Baig. The work is carried out under the
guidance of Mr. ________________ (faculty guide). It hasn’t been submitted
at any other place for any other academic purpose.

Mirza Danish Baig

 ACKNOWLEDGEMENT

I acknowledge my utmost gratitude to Mr. __________ faculty guide, for his

special interest and generous guidance throughout the project work.

I am indebted to all my respondents who despite their limitations and pressure

on time gave me good response in filling up of questionnaire.

I am thankful to my friends, family members and relatives for providing the

support that I needed during my project.

I sincerely hope that the labor I have put in making this project will be
appreciated.

Mirza Danish Baig

 ABSTRACT:

The consumer behaviour plays an important role in marketing of fast moving

consumer goods. This behaviour is affected by various factors. In the present era of
globalisation needs and wants of consumers changes with time. The fast moving
consumer goods (FMCG) sector contributes a lot to the growth of India’s GDP.
Therefore it is neccesary to identify the changes in consumer buying behaviour towards
FMCG products. The motive of this paper is to identify the factors affecting consumer
buying behviour towards FMCG products and finally effecting their decision making
process. The data for this study has been collected through questionnaire and findings
have been theoretically presented. The paper reveals that consumer behaviour is largely
effected by place, product, price, promotion, physiological and pshycological factors.
However effect of these factors also differ from product to product.
 EXECUTIVE SUMMARY

The project talks about the effectiveness of celebrity endorsement in building

brands with special reference to FMCG sector. The first few pages talk about
the introduction and objectives of the study. This is followed by details about
FMCG Sector. This part consist of FMCG Introduction, Industry characteristics,
Key Players, Salient Features and SWOT Analysis of the FMCG industry.

Next comes the detail about celebrity endorsements in FMCG sector. This part
consists of Introduction to Celebrity endorsements, why customers accept the
celebrities, Uses of celebrity endorsements, Reasons why celebrity endorsement
may not work, Benefits of celebrity advertisements and Theories of celebrity
endorsement.

Next comes the survey, the purpose of which is to find out uses of celebrity
endorsement those translate into higher brand recall of FMCG Products and to
understand the reason behind the attitudes of consumer towards all those FMCG
Products which are endorsed by the celebrities. The last part consists of
findings, conclusion and bibliography. The questionnaire has been annexed to
the report.
 CONTENTS

S.No. Chapter Name

Declaration

Acknowledgement

Abstract

Executive Summary

1 Introduction

2 Literature Review

3 Objective of Study

4 Research Methodology

5 Limitations

6 Conclusion

References
 INTRODUCTION

The society that we live in can not only be called secular or democratic, it
should be more appropriately termed as over-communicated these days. There
are around 130 television channels in India broadcasting over 3 million
television commercials each year in India. The media-explosion can thus be
easily demonstrated. Moreover, people forget 80% of the information in just 24
hours! 'Celebrity Endorsement' for the brand is solution to it.

Celebrities are involved in endorsing activities since late nineteenth century.

The advent of celebrity endorsements in advertising in India began when Hindi
film and TV stars as well as sportspersons began encroaching on a territory that
was, until then, the exclusive domain of models.

Celebrity endorsement is an important tool which is able to influence Indian

consumer buying behavior. In India, celebrities are being increasingly used in
marketing communication by marketers to lend personality to their products.
With the visual media becoming more popular the use of celebrities in the TV
media has increased. Celebrities create headlines. Their activities and
movements are being closely watched and imitated. What they endorse sell like
hot cakes. It is not surprising therefore that using celebrities in advertisements
has become common practice.

In India especially, it is not difficult to look for the reasons as to why companies
are increasingly using celebrities. Indians always love their heroes and heroines.

Consumers like advertisements more if they are admirers of the celebrities in

the advertisements. When a consumer likes the celebrity in the advertisement,
he or she is more likely to accept what the celebrity says about the advertised
product and therefore will develop more positive feelings toward the
advertisement and the brand itself. Famous celebrities are able to attract
attention and retain attention by their mere presence in the advertisements.

In the midst of the advertisement clutter, the advertisements that celebrities

endorse also achieve high recall rates. When people see their favored reference
group members or celebrities in the advertisements, they pay more attention to
them.

Celebrities may also help reposition products. A product with sagging sales
needs some boosting and in this, Indian celebrities can help by way of they
endorsing the product concerned.

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. Celebrity endorsements are today seen as a powerful
mechanism for brand awareness and sales. A host of celebrities including film
stars, cricket and lately tennis icons have been endorsing a range of products
from FMCG’s, automobiles to jewellery to apparel and watches. Several brands
have also appointed celebrities as their brand ambassadors to continuously
promote their brands and associate the brands with the excellence and attributes
that the celebrities are associated with.

'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."

Friedman and Friedman (1979) found empirical evidence that, in the promotion
of products high in psychological and/or social risk, use of celebrity endorser
would lead to greater believability, a more favorable evaluation of the product
and advertisement, and a significantly more positive purchase intention.

Scope of Celebriity Endorsement:

The use of testimonials by advertisers dates back to the 19th century when
medicines were patented. Firms have been juxtaposing their brands and
themselves with celebrity endorsers (e.g., athletes, actors) in the hope that
celebrities may boost effectiveness of their marketing.The increasing number of
endorsements throws a valid question to the consumers. Is there a science
behind the choice of these endorsers or is it just by the popularity measurement?
What are the reasons which lead to impact of celebrity endorsement on brands?
Greater the score of the below parameters, greater are the chances of getting
close to the desired impact.
 INTRODUCTION TO FMCG INDUSTRY

India is one of the largest emerging markets, with a population of over one
billion. India is one of the largest economies in the world in terms of purchasing
power and has a strong middle class base of 300 million.

The Fast Moving Consumer Goods (FMCG) sector is the fourth largest sector in
the economy with a total market size in excess of Rs 60,000 crore. This industry
essentially comprises Consumer Non Durable (CND) products and caters to the
everyday need of the population.

Product Characteristics

Products belonging to the FMCG segment generally have the following

characteristics:

• They are used at least once a month

• They are used directly by the end-consumer

• They are non-durable

• They are sold in packaged form

• They are branded

India - a large consumer goods spender

An average Indian spends around 40 per cent of his income on grocery and 8
per cent on personal care products. The large share of fast moving consumer
goods (FMCG) in total individual spending along with the large population base
is another factor that makes India one of the largest FMCG markets.
Rapid urbanisation, increased literacy and rising per capita income, have all
caused rapid growth and change in demand patterns, leading to an explosion of
new opportunities. Around 45 percent of the population in India is below 20
years of age and the young population is set to rise further. Aspiration levels in
this age group have been fuelled by greater media exposure, unleashing a latent
demand with more money and a new mindset.

Industry Segments

The main segments of the FMCG sector are:

• Personal Care: oral care; hair care; skin care; personal wash (soaps);
cosmetics and toiletries; deodorants; perfumes; paper products (tissues, diapers,
sanitary); shoe care.

Major companies active in this segment include Hindustan Lever; Godrej

Soaps, Colgate-Palmolive, Marico, Dabur and Procter & Gamble.

• Household Care: fabric wash (laundry soaps and synthetic detergents);

household cleaners (dish/utensil cleaners, floor cleaners, toilet cleaners, air
fresheners, insecticides and mosquito repellants, metal polish and furniture
polish).

Major companies active in this segment include Hindustan Lever, Nirma and
Reckitt & Colman.

• Branded and Packaged Food and Beverages: health beverages; soft drinks;
staples/cereals; bakery products (biscuits, bread, cakes); snack food; chocolates;
ice cream; tea; coffee; processed fruits, vegetables and meat; dairy products;
bottled water; branded flour; branded rice; branded sugar; juices etc.
Major companies active in this segment include Hindustan Lever, Nestle,
Cadbury and Dabur.

• Spirits and Tobacco: Major companies active in this segment include ITC,
Godfrey Philips, UB and Shaw Wallace

FMCG Industry Characteristics

Branding: Creating strong brands is important for FMCG companies and they
devote considerable money and effort in developing bands. With differentiation
on functional attributes being difficult to achieve in this competitive market,
branding results in consumer loyalty and sales growth.

Distribution Network: Given the fragmented nature of the Indian retailing

industry and the problems of infrastructure, FMCG companies need to develop
extensive distribution networks to achieve a high level of penetration in both the
urban and rural markets. Once they are able to create a strong distribution
network, it gives them significant advantages over their competitors.

Contract manufacturing: As FMCG companies concentrate on brand

building, product development and creating distribution networks, they are at
the same time outsourcing their production requirements to third party
manufacturers. Moreover, with several items reserved for the small-scale
industry and with these SSI units enjoying tax incentives, the contract-
manufacturing route has grown in importance and popularity.

Large unorganized sector: The unorganised sector has a presence in most

product categories of the FMCG sector. Small companies from this sector have
used their locational advantages and regional presence to reach out to remote
areas where large consumer

products have only limited presence. Their low cost structure also gives them an
advantage.
FMCG Key Players

There is a strong MNC presence in the Indian FMCG market and out of the top
10 FMCG companies; four are multinationals while two others have significant
MNC shareholdings.

MAJOR PLAYERS

• Hindustan Lever Ltd.

• I T C Ltd.
• Nirma Ltd.
• Nestle India Ltd.
• Britannia Industries Ltd.
• Colgate-Palmolive (India) Ltd
• Godfrey Phillips India Ltd.
• Dabur India Ltd.
• Smithkline Beecham Consumer Healthcare Ltd
• Godrej Soaps Ltd.
• Marico Industries Ltd
• Cadbury India Ltd
• Procter & Gamble Hygiene & Health Care Ltd.
• Reckitt & Colman Of India Ltd
• I S P L Industries Ltd.

Among the major companies, Hindustan Lever has a strong presence in the
food, personal care and household care (detergents) sectors; ITC is the market
leader in cigarettes; Nirma has a strong presence in the detergent market; Nestle
and Britannia are active in the food sector and Colgate has a strong presence in
the oral care segment.

FMCG Salient Features

The FMCG sector is a key component of India’s GDP and is a significant direct
and indirect employer. It is the fourth largest sector in the economy and is
responsible for five per cent of total factory employment in the country. The
sector also creates employment for three million people in downstream
activities, much of which is disbursed in small towns and rural India.

Unlike the perception that the FMCG sector is a producer of luxury items
targeted at the elite, in reality the sector meets the everyday needs of the masses,
across the country. Low-priced products contribute the majority of the sales
volume and lower income and lower middle-income groups account for over 60
per cent of the sector’s sales. Moreover, rural markets account for 56 per cent of
total domestic FMCG demand and FMCG outlets reach more villages than any
other basic facility such as primary schools or bus facilities.

The FMCG sector has several other salient features. It has strong links with
agriculture and 71 per cent of sales come from agro-based products; it is a
significant value creator with a market capitalisation second only to the IT
sector and it is a key contributor to the exchequer.

CELEBRITY ENDORSEMENTS IN FMCG SECTOR

In the world of advertising and marketing communication, celebrity

endorsement has grown in gigantic leaps to reach a level where it has spawned a
separate industry in itself.

Celebrity Endorsement is a rapidly growing industry that is, by conservative

estimates, worth more than Rs. 150 Crore today.
Today, there is a regrettable shift in the emphasis of the advertisement moving
from highlighting the core promise of the brand to exhibiting the charisma of
the brand ambassador. Celebrity endorsement gives a brand an instant value and
personality package which otherwise would have taken years and millions of
dollars - to establish, with far less guarantee of results. A celebrity does help in
increasing brand sales, but only if he/she is selected carefully and used
effectively to add value to a brand. There must be a relevant and recognizable
match of values of the celebrity and the brand as perceived by consumers.

The four primary endorser’s types are:

• Celebrities
• Experts
• Typical satisfied customers
• Announcers.

Celebrity endorsements of brands

Brand- a brand is a name, a sign, or a symbol such as a trademark or logo that

identifies a product or service and differentiates it from similar products or
services. It is different from a product, in that the product performs a task for
the user while the brand adds value and covers the source of the product
protecting the customer, producer from competitors who would attempt to
provide products that seem to be identical. Marketers use a whole lot of tactics
to draw the consumer’s attention to their brand - one of these is getting
celebrities to endorse the products.

Who are celebrities?

Popular personalities who enjoy public recognition amongst a huge slice of a

particular segment of the population or the entire population are celebrities.
Invariably, their very presence conveys the message “I’m rich, famous, talented,
beautiful, and intelligent and you aspire to be like me. I actually think this
product is great. Why don’t you buy it and become like me?” The product is
made attractive by the association with the person whom customers want to be
like and admire and it is this association that caused the compulsive desire to
purchase and use it.

A celebrity may be the embodiment of the company’s image. When celebrities

endorse a brand, customers become aware of the product/service such that they
totally believe and trust that the purchases will meet their requirements and
expectations but all this provided there is a proper fit between the chosen
celebrity and the brand.

Celebrities give the perception of quality products and services. Once quality
branding is in place, brand extensions are possible i.e. customers might easily
be persuaded to try their other products and services. Another factor that
requires a thought is the media to be used to advertise the product/service.

Celebrities have the advantage of publicity and the attention getting power
required for any successful advertising campaign. Most celebrities also enjoy
enormous goodwill. The associations made with them also help the product they
are endorsing. The mind as a defence against the volume of today’s
communications screens and rejects much of the information offered to it. In
general the mind accepts only that which matches prior knowledge or
experience. In the midst of today’s cluttering, it becomes all the more important
for the advertiser to capture the attention of the consumer. Instinctive changing
of channels is prevented if the first few seconds of the advertisement manage to
grip the audience’s attention.

Celebrity endorsers are that s/he can provide testimony for a product or service,
particularly when the product has contributed to their celebrity. The relationship
can increase a consumer's belief and trust in the product and its benefits. The
more familiar an endorser, the more likely consumers are to buy the endorsed
product.

Types of Advertisements

There are various ways in which one can go about advertising for their product.
Some of the ways include-

Television advertising/Music in advertising

A commercial advertisement on television (usually abbreviated to TV

commercial, ad, ad-film) is a span of television programming produced and paid
for by an organization, which conveys a message, typically to a market, a
product or a service. Advertising revenue provides a significant portion of the
funding for most privately owned television networks.

Infomercials

An infomercial is a long-format television commercial, typically five minutes or

longer. The word "infomercial" is a portmanteau of the words "information" and
"commercial". The main objective of an infomercial is to create an impulse
purchase, so that the target sees the presentation and immediately buys the
product through the advertised toll-free telephone number or website.

Radio Advertising

Radio advertisements are broadcasted as radio waves to the air from a

transmitter to an antenna and a thus, to a receiving device. Airtime is purchased
from a station or network in exchange for airing the commercials. While radio
has the limitation of being restricted to sound, proponents of radio advertising
often cite this as an advantage.
Online Advertising

Online advertising is a form of promotion that uses the Internet and World Wide
Web for the expressed purpose of delivering marketing messages to attract
customers. An ad server delivers online ads.

Domain Name Advertising

Domain name advertising is most commonly done through pay per click search-
engines; however, advertisers often lease space directly on domain names that
generically describe their products.

Product Placements

Covert advertising is when a product or a brand is embedded in entertainment

media. For example, when an actor in a film is using a particular brand of cell
phone or soft drink and the brand name is clearly visible.

Press Advertising

Press advertising describes advertising in a printed medium such as a

newspaper, magazine, or trade journal. This encompasses everything from
media with a very broad readership base, such as a major national newspaper or
magazine, to more narrowly targeted media such as local newspapers and trade
journals on very specialized topics.

Bill Board Advertising

Billboards are large structures located in public places, which display

advertisements to pedestrians and motorists. Most often, they are located on
main roads with a large amount of passing motor and pedestrian traffic;
however, they can be placed in any location with large amounts of viewers,
such as on mass transit vehicles and in stations, in shopping malls or office
buildings, and in stadiums.
Celebrity Branding

This type of advertising focuses on using celebrity power, fame, money and
popularity to gain recognition for their products and promote specific stores or
products. Advertisers often advertise their products, for example, when
celebrities share their favorite products or wear clothes by specific brands or
designers. Celebrities are often involved in advertising campaigns such as
television or print ads to advertise specific or general products.

Customer Generated Advertising

This involves getting customers to generate advertising through blogs, websites,

wikis and forums, for some kind of payment.

Aerial Advertising

Using aircraft, balloons or airships to create or display advertising media.

Skywriting is a notable example.

Advertisements in India

In Western countries, celebrity endorsements have limited impact on consumers

while purchasing a product. However, in India, the scenario is a bit different as
celebrities are almost idolized here, resulting in highly impactful and effective
celebrity endorsements. We all know that there are many media of advertising
any product. But in recent times celebrity branding is gaining popularity. There
are many advertisements that we see daily in our lives that have some or the
other celebrity trying to sell a particular product, on our television sets, radio,
newspapers or billboards.

The positive acceptance of celebrity endorsements is quite pervasive and it’s not
surprising that more than 50% of commercial ads portray them. These celebrity
endorsements expedite brand-recall which influences customer behaviour and
purchase. In 2014, a study conducted over 7 years found that the television
commercial is still the most effective mass-market advertising format.

The popularity of celebrities in advertisements is decreasing by the day. People

these days need more than just celebrities, to buy a particular product. They
focus more on the quality and specifications of particular products before
buying them. They just don’t blindly buy the product because their favorite
celeb or movie star or television star is in the advertisement. A new survey
conducted by research agency IMRB (Indian Market Research Bureau) and
public relations outfit should make marketers sit up and wonder that whether all
those big bucks spent in roping in brand ambassadors are having the desired
impact. The Celebrity Endorsement Survey, conducted over 2019 respondents
across 12 metros and small towns in India, claims that 86 per cent of the
respondents say the most prominent ad that they remember has a celebrity in it,
but only 3 per cent feel that celebrity endorser of a brand affects their buying
decision. However, small towns and South India are somewhat more inclined
towards celebrities. Also 55% of the people don’t believe that the celebrities use
the products that they endorse. It also states that 78% of the people buy products
because of the quality of the product, whereas, only 3% of the people buy
products because of the celebrity that endorses them.

The promotional features and image of the product is closely integrated with the
personality of the celebrity, to convey a message to the customers to fix their
choices while purchasing a product. Although this seems to be simple, the
success of celebrity-endorsed products depends on the effective framework of
the ad campaigning. The company uses the creditability of the celebrity, to
make products creating a niche in the market and establish itself as a brand. The
celebrity's role is most prominent in personifying the product to his/her image
and helps it reach the customers.
Advertisers need to be cautious when using celebrity advertising, as they are
not believable in certain instances and hence may not deliver the intended
effect. This is certainly true of those celebrities who are seen as endorsing many
types of products across a wide spectrum. It would seem that for some classes
of products, person-on-the-street type of advertising might be just as effective if
not more So, than those that use celebrities.

Why customers accept the celebrities…

Messages delivered by well-known celebrities achieve a high degree of

attention and recall for consumers.

Celebrity Expertise perceived relevant – Expertise is the knowledge that the

communicator seems to possess to support the claims made in the
advertisements. A well known face would obviously speak for more expertise
than an ordinary one.

Celebrities are perceived Trustworthy – Trustworthiness refers to the

customer’s confidence in the source for providing information in an objective
and honest manner. People are more likely to trust the quality of a trustworthy
celeb endorsed brand over a non-endorsed one.

Ambitious psyche: People ape the celebrities in their day-to-day activities and
many even dream to become like a celebrity some day. Some know they
wouldn’t become as good as the celebrities but sharing common belongings
makes them feel better.

Physical Attraction: Consumers tend to perform positive stereotypes about

such people. Physically attractive people are more successful in changing
beliefs than non-attractive people.
Uses of Celebrity Endorsements

• Establishes Credibility: Approval of a brand by a star fosters a sense of

trust for that brand among the target audience- this is especially true in
case of new products.
• Attracts Attention: Celebrities ensure attention of the target group by
breaking the clutter of advertisements and making the ad and the brand
more noticeable.
• Associative Benefit: A celebrity’s preference for a brand gives out a
persuasive message - because the celebrity is benefiting from the brand,
the consumer will also benefit.
• Psychographics Connect: Stars are loved and adored by their fans and
advertisers use stars to capitalise on these feelings to sway the fans
towards their brand.
• Demographic Connect: Different stars appeal differently to various
demographic segments (age, gender, class, geography etc.).
• Mass Appeal: Some stars have a universal appeal and therefore prove to
be a good bet to generate interest among the masses.

Reasons why celebrity endorsements may not work

• Improper positioning:
Associating with a star, however big he or she may be, in itself does not
guarantee sales. The most it can do is generate interest in the product or
create a buzz around it.
• Brand-celebrity disconnect:

If the celebrity used represents values that conflict with the brand values and
positioning, the advertising will create a conflict in the minds of the target
audience who may reject the proposition.
• Clutter Flutter:

In recent times, there has been such a deluge of celebrity endorsements that it
has led to the very clutter that it aimed to break. This over-exposure can be bad
for the brand. “We seem to have just 2 ½ celebrities in a country of 1 billion
people which is a terrible tragedy. Consequently, each celebrity is called upon
to push maybe a dozen brands or so. Which is great for the celebrity but I think
it is pretty daft for the brand because the impact of the celebrity reduces as the
number of brands he endorses increases.” Unfortunately in India, we have too
many brands chasing too few celebrities.

• Dissatisfaction with product quality/performance

You cannot sell an ordinary product just by making a celebrity endorse it. In
fact, if anything, the product will fail faster because the presence of the celebrity
will create a buzz and more people will know about the “ordinariness” of the
product. Unfortunately using a celebrity seems to be the easy way out of a
parity product situation.

• Confusion/ Scepticism

The use of celebrities can be confusing. Some viewers forget brand that a
celebrity is approving. Others are so spellbound by the personality of the
celebrity that they completely fail to notice the product/brand being advertised.
The brand is overshadowed in the overwhelming presence of the star. In some
cases, a celebrity can give rise to scepticism because it might be a bit too much
for the masses to believe that the celebrities who are rich and can afford the best
in the world are actually using a mass product being advertised on television
Benefits of celebrity advertising -- the four Qs:

• Quick saliency:

It gets cut through because of the star and his attention getting value. Dabur has
ensured high saliency for its brand with the inclusion of Amitabh Bachchan in
its advertising.

• Quick connect:

There needs to be no insight but the communication connects because the star
connects. Sachin, Shah Rukh and their ilk's ensure an easy connect for Pepsi
with the youth.

• Quick shorthand for brand values:

The right star can actually telegraph a brand message fast without elaborate
story telling. Kapil Dev and Sachin Tendulkar seem to have done that
successfully for Boost in the early '90s. And helped to differentiate it in the
malted beverages market.

• Quick means of brand differentiation:

In a category where no brand is using a celebrity, the first that picks one up
could use it to differentiate itself in the market. Boost did it in the malted
beverage category.

Theories of Celebrity Endorsement

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..
Source Credibility Theory:

According to this theory acceptance of the message depends on 'Expertness' and

Trustworthiness' of the source. Expertness is defined as the perceived ability of
the source to make valid assertions. Trustworthiness is defined as the perceived
willingness of the source to make valid assertions. Audience acceptance
increases with the expertness of the source and the ability of the audience to
evaluate the product.

Source Attractiveness Theory:

According to this theory which is based on social psychological research, the

acceptance of the message depends on familiarity, likeability and similarity.
Familiarity is the audience's knowledge of the source through exposure;
likeability is the affection for the source's physical appearance and behavior
while similarity is the resemblance between source and receiver. This theory
explains the message acceptance in two ways: Identification and Conditioning.
Identification is when the receiver or the target audience of the communication
begins to identify with the source's attractiveness, and hence tends to accept his
opinions, beliefs, habits, attitudes etc.

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.

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 skill fully 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.
 LITERATURE REVIEW

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.

According to Source Credibility Theory, acceptance of the message depends

on'Expertness' and Trustworthiness' of the source. Expertness is defined as the
perceived ability of the source to make valid assertions. Trustworthiness is
defined as the perceived willingness of the source to make valid assertions.
Audience acceptance increases with the expertness of the source and the ability
of the audience to evaluate the product. According to Source Attractiveness
Theory, which is based on social psychological research, the acceptance of the
message depends on familiarity, likeability and similarity. Familiarity is the
audience's knowledge of the source through exposure; likeability is the affection
for the source's physical appearance and behavior while similarity is the
resemblance between source and receiver. This theory explains the message
acceptance in two ways: Identification and Conditioning. Identification is when
the receiver or the target audience of the communication begins to identify with
the source's attractiveness, and hence tends to accept his opinions, beliefs,
habits, attitudes etc.

On identification, a quote from Bijou Kurien, COO, Titan, "We decided on

Aamir because we wanted someone who is a bit iconic, who is style-conscious
himself, and somebody who cuts across both sex and age group, between urban
and rural India. A celebrity who is mouldable and who is not overexposed".
Conditioning is when the attractiveness of the source is supposed to pass on to
the brand after regular association of the source with the brand. Grant
McCracken6 has criticized the previous two theories and proposed the 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.

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.

Celebrity endorsement can be key to marketing success

There's no denying the fact that marketing chiropractic can be challenging. The
public has long been exposed to negative reports about it from the medical and
drug industries, as well as from well-meaning but uninformed consumer
advocates. They've heard chiropractic jokes on sit-coms and warnings on the
nightly news. To market chiropractic in general — and your practice in
particular — you must first overcome lingering fears, ignorance and skepticism
that keep people from coming to your office. One of the most powerful ways to
surmount these obstacles is to use a celebrity endorsement. When you tell
people that chiropractic can help them, they may or may not believe you. After
all, you have a vested interest in selling your services. But when celebrities say
that chiropractic has helped them, and it could help others, people tend to listen
— and believe. After all, most people assume "he wouldn't say it if it weren't
true." As Marketing expert Patrick Bishop — co-author of "Money Tree
Marketing: Innovative Secrets That Will Double Your Small-Business Profits in
90 Days or Less" — noted:

"When you get a celebrity to endorse your company or sign a licensing

agreement, you benefit from customers' awareness of the property, [which]
could include the perception of quality, educational value or a certain
image."

"Studies show that using celebrities can increase consumers' awareness of

the

ad, capture [their] attention and make ads more memorable"

If you're not convinced yet of the effectiveness of celebrity endorsements, here's

what Jonathan Gaines, president and CEO of top marketing firm DMS
Strategies has to say:

"High-profile endorsements from athletes and celebrities will set you apart
from your competitors, and you can become a contender in the playing
field a celebrity spokesperson can work for companies of all sizes."

Fit with the Advertising Idea

Marketers now seek to adopt 360 degree brand stewardship in which the brand
sees no limits on the number of contact points possible with a target consumer.
Advertising ideas, thus, revolve around this approach, and the celebrity
endorsement decisions are made through these strategic motives. One of the
most successful celebrity endorsement campaigns which reflect the fit between
the brand and the 360 degree advertising fit is Fardeen Khan and Provogue.
Provogue's positioning in the apparel market is of a young, active, partygoing,
attention-grabbing brand and so is Fardeen Khan. The conjunction between the
two has been immensely impact and brand managers have utilized this
endorsement through 360 degree reinforcement. Provogue Lounge and
extensive phased insertions in print in selective publications reaching out to
their target audience has made it as one of the highest recalled celebrity
endorsement. Similarly, Richard Gere's recent endorsement for VISA in India
has gained acclaim due to its innovativeness and consumer connects. Brand
marketers say that

research reveals that Richard Gere was the most popular face across the Asia
Pacific region, and would also fit into the persona of the brand meeting their
communication objective to enhance VISA's brand leadership and consumer
preference, and the motive to continue the "All it Takes" empowerment
platform featuring international celebrities.

Celebrity-Target Audience Match

Smriti Irani endorsing the WHO recommended ORS Campaign in India. Indian
mothers can

associate with Smriti Irani through the facets she projects on screen or in regular
life which helps develop a connect with the target audience since mothers
medicate their children with ORS. The in serial placement of the campaign in
"Kyunki Saas Bhi Kabhi Bahu Thi" has won it an award from PR Week.
Similarly, Irfan Pathan endorsing Hero Cycles has gained the brand immense
recall and embarked through the positive association between the consumer and
the brand.

Celebrity Values

Celebrity branding is all about the transfer of the value from the person to the
product he endorses or stands for. There are two concerns here. The first is how
long this could last. Can the person maintain his popularity (i.e., his
performance or status ranking)? The lifecycle of celebrity popularity varies a
lot. The second concern is his private life - personal integrity. If he is implicated
in any kind of scandal, that would ruin the brand. "Who would want to use
Michael Jackson to brand their product?"

Tabu endorsing Tetra Packed Milk, Shabana Azmi campaigning for AIDS
Awareness, Amitabh Bachchan & Shahrukh Khan campaigning for Pulse Polio
or Aishwarya Rai appearing in the Donate Eyes campaign are few examples,
whichreflect the transfer of celebrity values to the brand, creating an impact that
generates recall.

Celebrity-Product Match

Cyrus Broacha is the brand ambassador for MTV since both the celebrity and
the brand are considered as friendly, young, mood-boosting, humorous and
outspoken. MTV's brand personality overlaps Cyrus Broacha's image as a
brand. Some more examples of compatible celebrity product match in which
celebrity brand attributes get transferred to the brand and increases the brand
equity is of Mallaika Arora & Freshizza from Pizza Hut, Govinda & Navratan
Tel, Sanjay Dutt & Elf Oil, Sunny Deol & Lux Undergarments, Aishwarya Rai
& Nakshatra, etc.
Celebrity Controversy Risk

The perfect example here is of Salman Khan and the controversy in which he
crushed a man to death with his Pajero when he was driving under the influence
of alcohol.

Celebrity Physical Attractiveness

Bipasha Basu' physical attractiveness and her connect with the brand makes
Levis Strauss's campaign through celebrity in India, John Abraham endorsing
Wrangler and Timex Sunglasses are some examples which portray the
celebrities' physical attractiveness that helps create an impact.

Celebrity Credibility

The most important aspect and reason for celebrity endorsement is credibility.
Most experts believed that the most important dimensions of credibility are
trustworthiness and prowess or expertise with regard to the recommended
product or service. One of the most obvious reasons of Amitabh Bachchan
endorsing plethora of brands is the credibility of the celebrity and his
recognition across consumers.

To site one of the most successful campaigns in which the celebrity's credibility
has had an indelible impact on the brand and has saved the brand is of
Cadbury's. After the worm controversy, Amitabh Bachchan's credibility infused
into the brand through the campaign, helping it to get back on track. The
campaign has won an award for the same.
Multiple Endorsements

The case of multiple endorsements, both in terms of a single brand hiring

multiple celebrities and that of a single celebrity endorsing multiple brands, is
often debated. At times, consumers do get confused about the brand endorsed
when a single celebrity endorses numerous brands. The recall then gets reduced
and reduces the popularity of the brand. Not many people can remember all the
brands that a celebrity endorses and the chances of losing brand recall increases
if the celebrity endorses multiple brands. For example, in case of Sachin
Tendulkar people recall Pepsi, TVS Victor and MRF, but might not remember
brands like Britannia and Fiat. Similarly, for Amitabh Bachchan, consumers
remember ICICI, Pepsi, Parker Pens, Pulse Polio and BPL. They might get
confused in the endorsement of Nerolac or Asian Paints. Thus, for multiple
endorsements where the same celebrity endorses several brands, it boils down to
the strength of the brand and the advertising content.

Whether Celebrity is a Brand User

One of the strongest platforms to discuss this is through NGOs. Various

celebrities endorse NGOs and social causes since they believe in the social
message that they need to convey to the audience. One of the most successful
campaigns has been executed by PETA in which celebrities like Shilpa Shetty,
Amisha Patel, Yana Gupta, Sheetal Malhar, and Mahima Choudhary Claimed to
believe in PETA's philosophy, and thereby endorse the brand. On the other
hand, while some would understand that Amitabh Bachchan would have never
used Navratan Tel, the target audience that the brands wants to reach out to will
be ready to believe that he used the oil and his endorsement thereby creates an
impact
How Celebrity Endorsements Influence the Consumer

The basis for the effectiveness of celebrity-endorsed advertising can be linked

to Kelman's processes of social influence as discussed by Friedman and
Friedman. According to Kelman, there are three processes of social influence,
which result in an individual adopting the attitude advocated by the
communicator:

Compliance, Identification & Internalization

These latter two processes are particularly applicable to celebrity-endorsed

advertising.

Compliance infers that another individual or group of individuals influences an

individual cause he or she hopes to achieve a favourable reaction from this other
group. This process of social influence is not directly applicable to celebrity
advertising because there is little, if any, interaction between the celebrity and
the consumer.

Identification applies to the situation wherein the individuals emulate the

attitudes or behaviour of another person or group, simply because they aspire to
be like that person or group. This process is the basis for referent power. It was
found that celebrities are more commonly liked than a typical consumer
spokesperson.

Internalization as a process of social influence is said to occur when

individuals adopt the attitude or behaviour of another person because that
behaviour is viewed as honest and sincere and is congruent with their value
system. The effectiveness of celebrity advertising traditionally has not been
strongly linked to this process, as a celebrity's reason for promoting a product
can just as easily be attributed by the consumer to an external motive (i.e.,
payment of fee) as to an internal motive (i.e., the celebrity's true belief in the
value and benefit of the product).

Friedman & Friedman(1979) explains The term ―celebrity‖ refers to an

„individual who is known to the public, such as actors, sport figures,
entertainers‟ and others of the like for his or her achievement in areas other than
that of the product class endorsed. Copper (1984) explained that the general
belief among advertisers is that advertising messages delivered by celebrities
provide a higher degree of appeal, attention and possibly message recall than
those delivered by no celebrities. Marketers also claim that celebrities affect the
credibility of the claims made, increase the memo ability of the message, and
may provide a positive effect that could be generalized to the brand. (Ohanian
1991) The use of (by corresponding standards) attractive people is common
practice in television and print advertising, with physically attractive
communicators having proved to be more successful in influencing customers‟
attitudes and beliefs than unattractive spokespersons. Menon (1998) examined
the effectiveness of advertisement endorsed by celebrities and normal person. In
this paper he examined the effectiveness by using the multivariate analysis. In
the advertisements for Milk, believability, knowledge, appearance and liking for
the celebrity were highly correlated to each other and also with purchase
intentions. For advertising with non-celebrity spokesperson, credibility was
highly correlated to advertising believability, which was in turn correlated to
purchase intentions. For advertisements about Pepsi-Cola significant
correlations were identified between credibility and knowledge and between
advertising believability and purchase intentions. Celebrity appearance,
knowledge, liking, and credibility of the celebrity were also highly correlated
with advertising believability. At the same time, liking for the celebrity and
advertising believability were both correlated with purchase intentions. For
advertising execution that involves non-celebrities, the analysis indicates that
appearance, credibility and knowledge were highly correlated with advertising
believability. At the end he concluded that advertisers need to be cautious when
using celebrity advertising as they are not believable in certain instances and
hence may not deliver the intended effect. This is certainly true of those
celebrities who are seen as endorsing many types of products across a wide
spectrum. It would seem that for some classes of products, person-on-the-street
type of advertising might be just as effective if not more so than those that use
celebrities. Laferty and Goldsmith (1999) finds that Endorser credibility is one
of the most frequently used methods in advertising to influence consumers‟
attitudes and purchase intentions. Corporate credibility, or the reputation of the
firm, is another source of credibility identified in marketing that can influence
these cognitions. They examined these two sources of credibility to assess their
impact on attitude-toward-the-ad, attitude-toward-the-brand, and purchase
intentions. between-subjects factorial design was used. One hundred women
students were shown one of our mock magazine ads. The results indicated that
both credibility types influence attitudetoward- the-ad and attitude-toward-the-
brand, but corporate credibility alone appears to have a significant influence on
purchase intentions. Moreover, whereas endorser credibility seems to have a
greater influence on attitude-toward-the-ad, corporate credibility seems to have
a greater influence on attitude-toward-the-brand and on purchase intentions.
(Dinesh Kumar Gupta, 2007) The effectiveness of using a celebrity to endorse a
firm's product can generally be improved by matching the image of the celebrity
with the personality of the product and the actual or desired self concept of the
target market.
 OBJECTIVES OF THE STUDY

To understand the concept of FMCG products.

To know and understand the scope of marketing FMCG products in

India.

To identify the factors affecting consumer buying behaviour and

consumer decision making process.

To conclude and suggest strategies for effective marketing of FMCG

products.
 RESEARCH METHODOLOGY

TYPES OF RESEARCH DESIGN

1) Exploratory Design.
1) Descriptive Design.
2) Causal Design.
In this research study the Descriptive research design has been used.

DESCRIPTIVE RESEARCH DESIGN

Descriptive research also known as statistical research, describes data and
characteristics about the population or phenomenon being studied. It basically
deals with everything that can be counted and studied. Descriptive research is
pre planned and structured. A descriptive design requires clear specification of
the WHO, WHAT, WHEN, WHERE, WHY and WAY (the six Ws) of the
research.
The objective is to know the Percentage (%) of phenomenon in population.
 All perceptual studies are come under Descriptive study.
 Where Comparison between two variables is done that is descriptive
research.
 In this design the variables are being predicted.

METHODS OF DATA COLLECTION

There are two types of data collection methods which are as following:-
1) Primary Research
1) Secondary Research
PRIMARY RESEARCH
Primary Research (also called Field Research) involves the collection of data
that does not already exist. This can be through numerous forms, including
Questionnaires & Telephone Interviews amongst others.

SECONDARY RESEARCH
Secondary research (also called desk research) involves the summary, collation
and/or synthesis of existing research rather than primary research, where data is
collected from, for example, research subjects or experiments.
In doing this research the both methods are being used.
 The Questionnaires are being prepared and filled by the people who are
investing in FMCG Sector.
 The Secondary data is being collected from different magazines,
newspaper & Journals. For the Literature of review certain online journals has
also been collected.
In doing this research the Questionnaire is used to collect the data.
SAMPLE
A subgroup of the elements of the population selected for participation in the
study.

SAMPLING UNIT
It is a basic unit containing the elements of the population to be sampled.
The sampling unit in this research is all the people of Lucknow who invest in
Stock Market

SAMPLE SIZE
It refers to the number of elements to be studied in a study/research.
The Sample Size for this study is 100.
Scope of the Research

For the purpose of this study, only advertisements featuring Bollywood actors
have been taken into consideration. Also, only advertisements in televisions,
radios, magazines and newspapers have been considered. This is a study done to
check whether celebrity endorsements affect buying behavior of the people and
to check whether there is a shift in their behavior because of celebrity
endorsements. This research uses both primary and secondary sources of data to
come to conclusions. The primary data was collected through questionnaires.
The sample size of the survey was 100 people. The questionnaire was circulated
to people living in and around Lucknow. The secondary sources of data include
information available on websites, other research papers and magazines. Some
of the findings of the research have been shown in the form of graphs and pie
charts.
 DATA ANALYSIS

Greatest Factor Influencing in Purchase of a Product

The Frequency with which People See Celebrities in

Advertisements
Whether the People Found the Claims Made by the Celebrities
Believable

The Percentage of People who Believe that the Celebrity using the
Product is Believable or Not
The Likelihood of People buying a Product, which a Celebrity
Endorses.

The Probability of people Switching Products because of a

Celebrity Endorsement
Effectiveness of Ads with Celebrities over those without them

Whether People are Able to Associate the Ad with the Celebrity

Are people able to identify the product because of the celebrity
associated with it
 LIMITATIONS

Subsequent to the objective analysis of the data collected we would like to

summarise the Findings of the study and state as under.
For analyzing the buying decisions of the respondents in respect of select
FMCG products viz. chocolate Bar, Milk, Edible oil, Bath Soap &
Shampoo, we had used nine Factors like Price, Availability, Quality, Taste,
and Attractiveness of the Packages, Quantity, Ingredients Brand and
Influence by Media. The basis of decision making was measured on 3 point
likert scale as Most Important, Important & Not Important.
In respect of Chocolate Bar, Taste was considered to be the most important
factor while Availability & Media Influence as consider as next important
factor.
In case of Milk, Quality was considered to be the most important factor and
Ingredients i.e. Fat content was considered to be the next important factor.
In case of Edible Oil, Quality was considered to be the most important factor,
while Taste and Packing were next important factors.
In case of Bath Soap, Availability, Brand and Media Influence were
considered to be most important factors, while Ingredients was next
important factor.
In case of Shampoo, Brand was considered to be the most important factor
while Quality and Ingredients was considered to be the next important
factors.
Regarding purchase preference of the respondents in respect of the selected
FMCG products, for buying chocolate Bar & Milk, people prefer Small
Shops while for Edible Oil, Bath Soap and Shampoo people prefer Super
Markets due to wider choice.
Regarding Monthly expenses on select FMCG products, maximum
 respondents spend Rs. 100/- to Rs.200/- on purchase of Chocolate Bars, on
Milk it is Rs.500/- to Rs.800/-, on Edible Oil it is Rs.200/- to Rs.300/-, on
shampoo it is Rs.100/- to Rs.200/-. Hence it is seen the customers
spending on Milk is maximum while Edible oil is next in the list and
Chocolate Bar is the last in the list.
Regarding frequency of buying, people buy Chocolate bar and Milk on
daily basis, while items like Edible oil, Bath soap and Shampoo is
purchased on weekly or monthly basis.
Regarding sale promotional tools influencing the buying decisions of the
respondents. It was found that cash discount, free gifts, gift vouchers and
hampers were highly influential tools. However the contest/coupons were
the least influencing factor.
Regarding media influence on the buying decisions, Television was found to
be highly influencing media the next were Newspapers and Magazines,
surprisingly internet and Hoardings were considered to be least influencing
medias.

CONCLUSION
People don’t believe such ads because the celebrities these days are endorsing
any product as long as it pays a lot. People tend to lose faith in such products
and in the long run the actor. The popularity and the credibility of the actors
play a very important role in convincing people. Since, actors these days
endorse a lot of products people are losing their faith in them. Even though the
impact of celebrity endorsements focus on business growth, the brands without
celebrities and popular personalities have been equally received by the
customers. The attractive advertising campaign and product tag lines and
captions have a major influence on the customers to avail these products.
Despite dependence on celebrity endorsements, few brands have embedded
their image on consumers' psyche as the most consistent source.

This is particularly strong in few aspects like:

• Body-care products like Himalaya and Dove

• Cosmetics like VLCC products, Lotus

• Beverages like Tata tea, three roses tea

• Washing powders and detergents like Ghadi, Tide, and Ariel

• TV sets like Onida.

The customers buy the products on the basis of the product’s quality and the
consistency of the quality. So, what the marketers need to do is, find a way that
is more suitable. Have advertisements that are meaningful from the point of
view of the consumers and do not add to the cost of the product. Because the
celebrities endorse more than one product, brand recall for people becomes
difficult for the consumers. But, we can see that celebrity advertising is not
going to go away any time soon but the impact on the buying behavior of
people because of it is reducing considerably. Taking a lesson from the above-
mentioned brands, marketers can also have normal people, who do not belong to
the glamour industry, in their advertisements. The marketers need to make ads
that are more believable and use celebrities in their ads more carefully and after
a lot of thought.

REFERENCES
Books:

 Beri G.C: “Marketing Research” Tata Mc Graw-Hill Publishing

company Ltd.
 Third Edition, 2003.
 Schiffman & Kanuk (1997) “Consumer Behaviour”, 6th
Eddition, PHI, pp.215-223.
 Marketing Management Philip Kotler 12e

Web Sites:

www.thedayaftertomorrow.com
www.synovate.com
www.magindia.com
www.blonnet.com
www.rediff.com – article by Country head, O&M India
indiainfoline.com – article 'Celebrity Endorsements in brands
 Consumers' Attitude and Intentions", Journal of Advertisement Research,
Vol 20,
 www.financialexpress.com
 http://www.iimb.ernet.in
 http://usdrinc.com/downloads/Celebrity-Endorsements.pdf
 http://business.rediff.com