Project

Impact of celebrity endorsement and influencer marketing on consumer

perception of brands, and how it impacts their purchase decision

Group No: 09
Praveen Kumar PGP10101
Shanaz Begum PGP10047
Mrunalinee Koli PGP10024
Anisha Gogoi PGP10069
Tanvi Rane PGP10041
Manvendra Singh PGP10030
Abstract
This study shows that perception of customers
towards celebrities and endorsement becomes a
trend that influences such consumer behaviour.
How should a company segment, target and
position their marketing strategy by taking into
consideration celebrity public image, brand
image, impact of celebrities in brand recognition,
attitude toward celebrity endorsement along with
demographic factors. The research focuses on
customers who have shown a very different and
fascinating way to identify celebrities and stars.
This paper is focused on examining the
perception of consumers about celebrity
endorsements, examining celebrity attributes that
are likely to influence consumer purchase
intentions and finally the impact of celebrity
endorsements on their purchase intention. In a
place like India where stars and cricketers are
idolized and watched, advertisers will see this
opportunity to sell their goods and build a broader
customer base.
Introduction
Owing to the competitive environment in which
a company operates, having an effective
communication strategy is definitely one of the
key issues to take care of in order to enthrall
consumers, and there are a number of
communication strategies, which allow the
advertisers to reach their target. The use of
celebrities as interpreters is becoming an
increasingly common strategy in the
advertisement industry. Kotler and Keller (2006)
defined celebrity endorsement as a particular
scheme used by marketers to advertise a product
from a platform through which consumers can
associate themselves with the brand value from
the perspective of the celebrity personnel.
The exercise of celebrity endorsements has
proliferated with time. A pervasive element of
the advertising industry, the celebrity
endorsement business has become a multi-
million industry in India. Celebrity and
influencer endorsements have become a trend in
advertising and are perceived as a very effective
one. They are often seen as key leaders who drive
a brand’s message to promote content that
appeals to a large target audience. Marketers have
continuously switched between both in an
attempt to attract more consumers and get more
brand presence. In our research, we will study the
consumers’ perception (mostly millennials) to
see what factors influence them while making a
purchase decision. Of celebrities and influencers,
who are consumers more likely to trust and
believe? Do they believe in the expertise of
influencers or do they find them trustworthy? We
will also see which of them is more suitable
across various platforms and try to identify the
segment preferences
Companies are spending a considerable chunk of
money on advertisements. Studies have shown
that consumers’ perceptions and intentions to buy
a product are affected by the personality and
image of a person or the celebrity associated with
the brand or, more specifically, the product.
In the early 21st century, most companies used
celebrity endorsement to advertise and influence
individuals. In a market with a very rapid
expansion of local, regional, and international
brands, celebrity endorsement was believed to
equip brands with a distinct perception and a
differentiating factor.
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."
Area of recognition, level of fame, product
category, promoted brand, and target consumers
are all weighed while choosing the celebrity.
Celebrity endorsement has been established as a
winning formula for the purpose of product
marketing and brand building.
However, with changing dynamics, companies
have shifted from traditional celebrity endorsers
to social media influencers (Vloggers, Tiktokers,
Youtube, and Instagram personalities).
Influencer marketing emphasizes the use of
influencers to drive a brand’s message to reach
the target segment and in this age of digital era,
they have emerged as a dynamic third party
endorser. Also, in recent years, they have
established themselves as potential endorsers,
through digital platforms like Instagram,
Youtube, by generating a range of buzzwords as
compared to other marketing strategies. Possible
reasons for this shift can be huge costs invested
on celebrities and a larger base that influencers
have gained in the market. However, the
effectiveness of these mediums on the consumer
process and buying behavior is not well
understood.
Therefore, we aim to identify this process and all
variables impacting the consumers’
perception of a product/brand, if it is endorsed by
a celebrity or an influencer as well as
understanding how the changing environment is
opening other alternatives for communication
through endorsement and how consumers believe
in the ads or products through the different types
of endorsements or communication. We are also
trying to understand how much information
consumers expect to get about the product from
the ads and what makes it more believable for
them.
With this research, we also plan to understand
how the advertisements, especially the
endorsements play a role during the whole
consumer purchasing decision process. We aim
at understanding and identifying the stages in
which this theory impacts the whole decision the
most and the effectiveness of the impact.
Literature review
Consumer purchase decisions entrails concepts
from psychology, sociology, anthropology,
history and economics. This means that, when
developing products that consumers would
obtain value from, marketers require a good
understanding of how consumers perceive their
purchase decisions. The number of potential
influences on consumers is boundless. It
embraces a number of factors both internal and
external which can affect the decision-making
process as a person works through his purchase
decision and celebrity endorsements have an
important role to play in them.
Available literature on the effect of celebrity
endorsers provides direction on how value is
transferred by celebrities to consumers for the
promotion of a brand and to create awareness for
the brand.
The utilization of celebrities in marketing
communication can be explained on the basis on
the following:
● Celebrity endorsements increase the
attention paid to an advert.
● Celebrities are generally attractive,
which aids persuasion when the perceived value
to be derived from a product is attractiveness-
related.
● Celebrities are often well-liked and
hallowed, thus possibly leading to identification
and consumer persuasion in an attempt to derive
some type of relationship with the celebrity.
● Celebrity endorsements may also lead
media weight to have an impact on sales.
Atkin and Block's study of celebrity endorsers
(1983) suggest that there are numerous
explanations for why a famous endorser may be
dominant. First, such a representative attracts
recognition toward the commercials in the world
of messy flow of communication. In addition to
that, celebrities are also conventionally
distinguished as being greatly active individuals
with strikingly likeable traits (Kamins et al.
1989).
The source credibility theory proffered by
Hovland, Janis and Kelly (1963) states that
people or receivers are more likely to be
persuaded when the source presents itself as
credible. Perceived expertise and trustworthiness
of the source affect source credibility (Cornan et
al. 2006). Consumers on a daily basis aspire to be
like celebrities or people with higher or
prominent social presence and status as they have
assumed a role model status in the eyes of the
consumer. This explains the relationship between
source credibility and the product attractiveness
which mostly translates into higher sales.

Source credibility is also influenced by source
attractiveness which focuses on an endorser's
physical attributes or characteristics and directly
influences the effectiveness of an endorsement.
Numerous past research have found a positive
correlation between source attractiveness,
consumer attitude as well as purchase intention
(Petty et al. 1983; Erdogan 1999). Thus source
credibility is a multi-dimensional concept that
serves as a means for the receiver of the
information to rate the source or transmitter of the
communication in relation to the information.
A fitting relationship between the spokesperson
and the product or ‘match up’ is a factor affecting
source credibility. Schlecht (2003) explained that
the match up hypothesis specifically suggests
that the effectiveness of using a celebrity
spokesperson depends on the existence of a “fit”
between the endorser and endorsed brand. There
ought to be a significant connection between the
endorser and product/ service. The ‘who’ and
‘what’ is not enough to cover the ‘match-up’
(Shrimp 2000).
Theoretical frameworks
Celebrity endorsement theory:
● there are few management based theories such
as the match-up theory and the meaning transfer
theory which tackle celebrity-product
congruence and celebrity activation while
discarding his qualities and given managers
control over decisions.
● there are few source based theories such as
source credibility theory and source
attractiveness theory can be considered. Those
stipulate that the celebrity controls his
characteristics while the advertising agency and
brand manager have no significant control.
Models explaining celebrity endorsements:
Match-up theory indicates the fit between
celebrity endorser and consumer and suggests
that there must be a fit between the consumer and
celebrity. This theory promotes the congruence
between the product and endorser in terms of
image, expertise, and/or attractiveness. A
celebrity who maintaining a congruent image
with the product will lead to better advertisement
and credibility Till and Busler (1998, 2000)
surveyed attractiveness versus expertise as a
relevant match-up factor and proposed that
expertise is better suited for matching products
with a celebrity endorser despite attractiveness
having a level of significance. When the
consumer is able to relate with the celebrity, he is
able to relate his personality and ends up
believing that the product is fit for him also as the
celebrity promotes the product.
Meaning transfer theory describes the flow of
transfer of meaning from celebrity to brand and
finally to the consumer. The Meaning Transfer
Model examines the topic from a cultural
perspective. According to the meaning transfer
mode (McCracken, 1986; 1989), celebrities
develop a persona in the society assisted by their
statuses and images that are promoted by the
media. The society then assigns certain meanings
to them and endorsements will transfer these
meanings to a company, brand or product,
because of which consumers will be convinced to
make a purchase of the product “in the hope of
transferring some of these meanings to their own
lives” (Amos et al., 2008: 208). The celebrity
transfers his achievement and values to the
product and then through advertisement, the
product conveys them to the consumer.
Social learning theory proposed by Bandura
(1963) has been widely applied in
communication and advertising fields (Bush et al.
2004). It justifies that socialization agents via
either direct or indirect social interaction aid an
individual to derive motivation and consequently
exhibit favorable attitude (Subramanian and
Subramanian 1995; Moschis and Churchill
1978). This theory has been previously adopted
by various marketing studies to understand
consumer consumption behaviour via various
socialisation agents such as celebrities, family, or
peers (Kotze 2001; Clark et al. 2001; Martin and
Bush 2000). Makgosa (2010) revealed that social
learning theory is capable of convincingly
explaining the impact of celebrities on
consumption behaviour as well as providing a
contextual foundation in understanding social
media influencers which shapes audience
attitudes and decision-making through the use of Respondents Demographic Profiles
social media somehow similar to a celebrity
endorsement.
Demographic Frequency Percentage
Source attractiveness model is based on four
dimensions; “familiarity” (knowledge of source Gender
through exposure),“similarity” (resemblance
between the source and the audience),
Male 64 37.4%
“likeability” (affection for source based on its
physical appearance or behavior), and Female 107 62.6%
“attractiveness”. Accordingly, the effectiveness
of the message through celebrity endorsements Age
through a process called ‘identification’ depends
on these dimensions. Familiar, likeable and/or
similar sources are often seen as more attractive 15-20 14 8.2%
and persuasive.
21-30 156 91.8%
Source credibility theory states that the
30+ 0 -
effectiveness of a message depends on the
perceived level of expertise and trustworthiness Education Level
of an endorser. Information from a credible
source can influence the beliefs, opinions,
attitudes and/or behaviours of receivers through High school 6 3.5%
a process called ‘internalization’, which occurs
when they embrace the source influence in terms Undergraduate 78 45.6%
of their personal attitude and value structures.
Because the celebrity endorser is the primary Postgraduate 86 50.3%
source of information, their credibility is an
important consideration for the advertiser. Higher 1 0.6%
than
postgraduate
Methodology
Survey Details
The survey questionnaires were distributed to
respondents amongst the students of IIM Rohtak
Through the primary research conducted we tried
for data collection. The demographic profile to assess the impact of celebrity endorsement and
constituted the first section of the questionnaire. influencer marketing on consumer perception of
A total of 171 responses were collected.
brands by measuring factors as endorser
trustworthiness, level of relatableness, and
Attitude towards celebrities, social media
awareness of local influencers. We also assessed
influencers, and the effects of them endorsing a
which factors amongst price, celebrity endorser,
product over consumer buying behaviour was
quality, value for money and aesthetics influence
measured through 5 point semantic differential decision making the most.
scales: strongly disagree, disagree, neutral, agree,
strongly agree. We also aimed to find the factors
which a consumer considers while purchasing a
product such as price, quality, aesthetics, and
value for money, celebrity endorsement through
a 5-point semantic scale of lowest preference to
highest preference
Research Questions
RQ1: Can attitude towards celebrity
advertisements/endorsements be explained in
terms of age/gender/education level?
RQ2: What are the underlying dimensions that
explain a consumer’s choice of brand and how
are they affected by the type of endorsements?
(celebrity/influencers)
RQ3: Does demographic variables have an
impact on brand recall?
RQ4: How does influencer marketing play a role
in brand perception and does it differ from
celebrity endorsement
RQ5: Is celebrity attractiveness more effective
than influencer attractiveness when it comes to
remembering the brand ( Brand Recall)?
RQ6: Do social media platforms and their usage
affect the consumer buying decision
RQ7 : How does celebrity image (perception)
determine your attitude toward brands?
STUDY 1: ASSESSING THE EFFECT OF
DEMOGRAPHIC VARIABLES TOWARDS
THE PERCEPTION OF BRANDS AND
THEIR ENDORSEMENTS
As we aim to understand the effect of gender
difference on consumer perception towards
products and importance of brands and there, we
have asked 171 people about the importance of
brand while choosing the products and we
measured how gender plays a role in their
behaviour. We started with questions like
whether they think brand is important at all for
the products they buy and then we moved on to
their perception and preference of brands based
on endorsements. Then we moved on to asking
them to rate the statements like “I prefer brands
with celebrity endorsements”.
Here we see that the presence of a brand does
affect the purchasing behaviour of the
consumers. When we segregate based on
genders, the behaviour is similar irrespective of
the gender. So we conclude that brand plays an
important role while purchasing any product
and the companies should focus on creating
brand images and perception through their
communication to increase the brand recall.
STUDY 2: UNDERSTANDING CONSUMER
PERCEPTION FOR ADVERTISEMENTS
USING CELEBRITY ENDORSEMENTS
After understanding that consumers differentiate
the products based on the
Brands and the communication they receive, we
aim to understand the consumer perceptions of
brands based on the type of endorsements and the
effectiveness of celebrity endorsements
We have asked questions like whether they
would prefer products promoted by celebrities
that have good image, whether they think
celebrity image helps them trust the brand and
product quality and does celebrity endorsement
helps them in recalling the advertisements and
attracting their attention towards the brand or
advertisements.
We asked the respondents to rate these statements
on a likert scale of 1-5 on how much they agree
on the statements to give us an understanding of
how these endorsements are affecting the
consumer behaviour and perception.
 perception of the product or brand image. So
One-Sample Statistics
brands should focus on celebrity endorsements
when they want to improve and leverage these
factors.
Std. Std.
Mea Devia Error
N n tion Mean STUDY 3: ASSESSING HOW CELEBRITY
I prefer 171 2.60 1.098 .084
ENDORSEMENTS HAVING A LONGER
products RECALL ON CONSUMER MINDS IS
endorsed by AFFECTED BY DEMOGRAPHIC
a celebrity VARIABLES
who has a
good image
As we have observed that consumers remember
celebrity endorsement for a longer time, we aim
Celebrity 171 3.38 1.159 .089 to understand what the effects of demographic
icons variables like gender are, education level and age
improve on the fact that consumers tend to remember
product
image
celebrity endorsements for a longer period of
time. Does this effect vary with demographic
changes or is constant.
I prefer 171 2.37 1.023 .078
brands that
use celebrity Tests of Between-Subjects Effects
endorseme
nts

Dependent Variable: I remember celebrity

Presence of 171 2.55 1.086 .083
advertisements for a long time
celebrity in
endorseme
nt gives me Type
a positive III
feeling to Sum
buy the of Mean
product Squar Squar
Source es df e F Sig.

Corrected 18.497 11 1.682 1.21 .281

a
Model 5
I pay more 171 2.84 1.139 .087
attention to
the
advertiseme
Intercept 140.54 1 140.5 101. .000
nts that use
6 46 541
celebrity
icons
Gender 5.415 1 5.415 3.91 .050
I remember 171 3.47 1.185 .091 2
celebrity
advertiseme Agegroups 3.887 2 1.944 1.40 .249
nts for a 4
long time

Educationle 9.763 3 3.254 2.35 .074

vel 1
Here, we were able to see that the effect varied
from factor to factor and celebrity endorsements
had a significant effect on the ad recall and
Gender * .030 1 .030 .022 .883 customers, it is important to understand customer
Agegroups awareness of influencers and how it is related to
their preference of endorser. In this study we aim
to understand if the consumer's awareness and
their ability to relate well with them affects their
Gender * 4.399 2 2.199 1.58 .207
Education 9
choice of brand being endorsed by influencers
Level

Agegroups * 6.927 2 3.463 2.50 .085

Education 2
Level

Gender * .000 0 . . .
Agegroups *
Education
Level

Error 220.07 15 1.384

6 9

Total 2295.0 17
00 1

Corrected 238.57 17
Total 3 0 When tested using correlation with respect to
these 2 factors, it showed that both of them have
some effect on the consumer choice and
awareness has a greater impact. So, if consumers
a. R Squared = .078 (Adjusted R Squared = .014)
are more aware of the influencers and brands
select such influencers where people can relate to
them, it has a positive impact on brands.
From the given analysis, we find that the effect of
demographic variables do not vary much t on the
ad recall, but gender has a slight effect with p STUDY 5: HOW DO CONSUMERS DIFFER
value =0.05So we can conclude that demographic IN TERMS OF THEIR AFFINITY TO
variables do not have an effect on whether CELEBRITIES AND INFLUENCERS
consumers can remember celebrity endorsements
for a long time or not We aim to understand how behaviour and
STUDY 4: ASSESSING THE PREFERENCE perception varies towards celebrity endorsers and
OF PEOPLE TO SELECT BRANDS influencers for consumers. We asked the
ENDORSED BY INFLUENCERS BASED consumers about how much can they relate with
ON THEIR AWARENESS LEVEL celebrities and influencers and based on their
responses we were able to see the difference
Consumer brands perception and image varies
with the celebrity endorsements and it has a
significant effect on their buying process and
purchase intention. As consumers are now being
educated on various platforms and a lot of
influencers started to come up educating the
 whether with the change of endorser, they tend to
change the products. We tried to see if there was
a relationship between those.
Paired Samples Statistics

Std. Std.
Mea Devia Error
n N tion Mean

Pair I identify 2.26 171 1.014 .078

1 with/
relate
more
with
celebritie From the given analysis, we could see that there
s was a significant difference between customers
that switched and the ones that do not. Even
I identify 2.88 171 1.241 .095 though high time was spent on social media, with
with/ the change of endorsers, customers did not switch
brands.
relate
This gives the conclusion that brands should not
more focus on changing the endorsers from time to
with time, but creating a long lasting impact on the
influence consumer minds. If the customers can relate well
rs with the endorser and the ad, they tend to be loyal
to the brand.

We can see from the analysis that none of the

factors had the value on the higher side, but when
compared, influencers had a better response than
the celebrities. If at all managers want their
brands to be endorsed by someone they can use
influencers for that.
STUDY 6: HOW DOES USAGE OF SOCIAL
MEDIA INFLUENCE TO CHANGE
BRANDS BY CHANGING THE AD
Given that consumers have access to social
media, the celebrity and influencer news, the
online advertisements, we are assuming that the
presence and activeness in social media
influences the decision of consumers to select or
switch brands. So we asked respondents how
much time they spend on social media and also
STUDY 7: ASSESSING THE VARIABLES
CONSUMER LOOK FOR IN
ENDORSEMENTS AND REDUCING
THESE TO FACTORS
Understanding that people relate with the
endorsers and that influences their purchase
decision, we have seen how endorsements can
help in remembering the advertisements and
creating a preference for the brands. There are
certain factors that make the consumers attract an
endorsement or advertisement. We asked the
consumers about their preferences on various
variables like, the type of celebrity or endorser
themselves, aesthetics of the advertisement, the
awareness given, the expert advice provided and
the features being communicated, to understand
which variables do they prefer most in any kind
of endorsement.
Based on our analysis, these factors were reduced
to two components - one where the focus is on
type of endorsement and aesthetics whereas other
included the product features, awareness, and
expert advice.
We can say that there are two types of consumers,
ones who prefer flamboyance and are attracted
towards that, ones who prefer information and
details. Mangers could segment these consumers
and target them by using the type of endorsement
they prefer.
Based on the results, the managers can decide the
type of endorser based on their target consumers.
STUDY 8: HOW GENDER AFFECTS THE
TYPE OF ENDORSER PEOPLE PREFER
Understanding the impact of celebrities and
influencers on consumer behaviour, and how the
perception differs as well as the effect of
demographic variables on these behaviours and
segregating all the factors into two components,
now we aim to understand the preference of the
type of endorsers and how does the gender
variable impact these preferences.
and leverage these factors. We can conclude that
demographic variables do not have an effect on
whether consumers can remember celebrity
endorsements for a long time or not.We can see
from the analysis that none of the factors had the
value on the higher side, but when compared,
From the given analysis, we can see that the
females prefer the common man endorsing a
product in the advertisement while males prefer a
sports personality. So managers can take an
informed decision based on the type of brands
and products, and the target consumers, keeping
in mind that they can relate with the brands and
the product through the endorsements
Managerial Implications
We were able to see that the effect varied from
variables to factor and celebrity endorsements
had a significant effect on the ad recall and
perception of the product or brand image. So
brands should focus on celebrity endorsements
when they improve
influencers had a better response than the
celebrities.. If at all managers want their brands
to be endorsed by someone they can use
influencers for that. Brands should not focus on
changing the endorsers from time to time, but
creating a long lasting impact on the consumer
minds. . If the customers can relate well with the
endorser and the ad, they tend to be loyal to the
brand. Based on our analysis, these factors were
reduced to two components - one where the focus
is on type of endorsement and aesthetics whereas
other included the product features, awareness
and expert advice.the managers can decide the
type of endorser based on their target consumers.
From the given analysis, we can see that the
females prefer the common man endorsing a
product in the advertisement while males prefer a
sports personality. So managers can take an
informed decision based on the type of brands
and products, and the target consumers, keeping
in mind that they can relate with the brands and
the product through the endorsements.
Conclusion
1) Study concludes that demographics
factors are not prominent in celebrity or
influencer endorsements.
2) The result also emphasizes that the
factors considered while purchasing has an
influence, as women focus more on look,
aesthetics and celebrity endorsement while men
prefer more about price, value of money and the
quality of the product.
3) We can also conclude that endorsers
should not be changed very often and managers
should stick with the one.
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