The Impact of Celebrity Endorsements on

Consumer Brand Preferences

By: Arti Trivedi Pranay Prakash Srivastava Lal Jitendra Singh

Shwetank Singhal Anil Kr. Ransom
Table of Contents
 
Problem Statement ……………………………………………… 1
Sampling technique &
sampling target population ……………………….………. 2
Objectives statement …………………………………………… 3
Methodology …………… ……………………………………… 4
Charts…..…………………………………………………………….. 6
Data Analysis……………………………………………………… 7
Findings…………………………………………………………….. 8
Conclusion………………………………………………………… 9
Summary and managerial implications……………. 10
Limitations………………………………………………………… 11
SYNOPSIS
“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.”
- Al Ries &
Laura Ries

“Brand” is the most valuable asset of any firm. It’s the

“strong idea” of promotion which is a more strategic
means of brand-building; which can be an economical
alternative over celebrity endorsement.
Definition of Celebrity Endorsement

According to Friedman & Friedman, a “celebrity

endorser is an individual who is known by the public
for his or her achievements in areas other than that of
the product class endorsed.” So, in the Coco-Cola
advertisement; actor Aamir Khan is the celebrity
endorser for the product or brand called Coke, and this
process is referred to as Celebrity Endorsement.
Celebrities might endorse as a brand ambassador or a
brand face.
 The increasing celebrity culture

• Celebrity for social endorsing

Polio drops

• Celebrity endorsing the politics.

• Using sports star as celebrity endorser.

 1.Problem statement

The study will examine the relationship between

celebrity endorsements and brands, and the impact of
celebrity endorsement on consumer's buying behavior
as well as how consumer makes brand preferences.

.
 2.Sampling Technique

• Convenience Sampling

Sample Target Population

• Target market of between 18 to 30 years of IIITA

Students
• Target rural market near Allahabad
• Sample size-100
 3.Objective Statement
do these stars really help a brand by increasing its sales?

can they really have an Impact on the person's

consumption pattern, thereby changing his brand preference?

How an advertisement featuring a celebrity can influence

consumers buying decision and can create an association
between a brand and a common man?
4)Methodology-

Primary data collection method

“Method-Questionnaire”

Secondary data collection method

Assumption-
It is assumed that data collected here is unbiased and
pure.
Questionnaire

1. Why do you buy a product of particular brand?

2. How much a “Brand Ambassador” motivates you to buy a new product?

3. Whenever you watch any new product advertisement featuring your

favorite celebrity in it, you decide to buy it

4. You are using a particular brand for very longer time duration now a
celebrity starts endorsing a brand which is close competitor of your brand.
And you admire this celebrity a lot .Would you like to switch?
 
5. Generally you buy the brands for what purpose?

6. How much extra money you are willing to pay for purchasing a celebrity
endorsed product.
 Secondary Method-

1)Internet search, using online resources to gather data

for research purposes.

2)News Papers and Magazines, journals and other

similar periodicals.

Sources-
-Hindu Business Line, 2003 - www.indiantelevision.com
-www.magindia.com
-Business Standard, May 13, 2005
-www.rediff.com – article by Country head, O&M India
Analytical tools used

Bars
Cor-relation
Pie charts
 5.Charts
Why do you buy a product of particular brand?
71
80 58
60
40 26
16 17 12
20
0

Urban Population
Rural Population
While buying a branded commodity what do you
feel that you are paying for?
60 53
52
50
40
40

30 25
22
20
8
10
Urban Population
0
y y d
it n an
od pa br
Rural Population
m om e
m C th
co e g
e th si
n
Th or r
a) d do
an en
br ty
e ri
Th le
b
b) ce
e
Th
c)
How much extra money you are willing to pay for purchasing
a celebrity endorsed product.
70 64

60

50
37
40 34
27
30
17
20 11
8 Urban
10 2 Population
0
Rural
0 00 00 g Population
50 10 10 hin
pt
o
to ot
U han N
0
a) 50 e
t d)
b) or
M
c)
How much a “Brand Ambassador” motivates you to
buy a new product?

60 54

47
50

40
31
29
30 Urban Population
22
Rural Population
17
20

10

0
a) A lot b) Up to Certain c) Not at all
extent
  2004 2005 2006 2007 2008 2009
   

Annual Family Income(of

an average middle class
family) 200000 210000 225000 240000 265000 280000

                   
Expenses on Branded
Products 2% 2.50% 2.50% 2.60% 2.80% 2.82%

   

Cor-relation between family income and 0.880895

expenses on branded products  

   
 7.Data Analysis and Major findings
 Research studies have proven that known products and names are sold more than
unknown ones

 Rural Population is more inclined towards “Brand Ambassador "than urban

population.

 People generally prefer to stick with their brands .

 More Conscious towards satisfaction and value for money.

 Willing to pay Upto Rs 1000 more to buy celebrity endorsed products..

 Urban Population is paying more for celebrity endorsed product.

 Celebrity endorsed products-Style statement

A common man feels that a celebrity helps the brand to
increase their total sales and hence revenue.

Celebrity also helps in increasing overall market share

Effects of brand ambassador differs from different

products.

In final Decision value for money matters the most for a
consumer and celebrity does not have a significant role in
it.
Influence of celebrity endorsee on purchase
decision
Agree

11% Disagree
15%
42% Strongly Agree

6%
Strongly
Disagree
26%
Undecided
Factors influencing consumer buying behavior
 Consumer's psyche and their ability to take decisions
 Traditional Factors affecting consumer decision making
 External influences on consumer behavior
 There is a demographic and psychographic connection between the
stars and their fans like age, gender and affection
 Multiple product endorsement also has a negative impact on
customers' purchasing intentions
 Society affects the buying behavior
Match up between Fame, popularity(but
Brand Image and brand should be Trustworthiness
celebrity Image reliable)

Celebrity Chosen Physical Expertise

Attractiveness

Process of choosing Celebrity

Success-

Ried and Taylor –Amitabh Bachchan

Tata Sky-Aamir Khan
Kurkure-Juhi Chawla
NIIT-Vishwanathan Anand

Reasons-Source Credibility, Establishing a Perfect Match, Celebrity Persona

,Emotional Attachment and Transferring the Meaning.

Failure-

Fiat Palio-Sachin Tendulkar

Castrol-Rahul Dravid
Nerolac Paints-Amitabh Bachchan
World Space satellite radio service-A.R.Rahman

Reasons-Improper positioning, Brand Celebrity disconnect, Clutter-Flutter and

dissatisfaction with product quality/performance
 Reid and Taylor-A caselet

 In India, a brand called Reid & Taylor presented its perfect example when they
first launched their advertising campaign featuring James Bond fame of the
time Mr. Pierce Brosnan along with the tagline 'BOND WITH THE BEST'
but the James Bond idea did not worked and the company was not happy with
the results.

 company introduced a family ad where children are celebrating there parents

silver wedding anniversary and they are out with their father to purchase a suit
for him. Even this commercial did not work.

 company introduced Mr. Amitabh Bachchan as Reid & Taylor man, a man
propagating the brand for special occasion and for very special people in life.
The commercial from the initial days got good response and did extremely
well as people were able to connect with Mr. Bachchan and the values he was
propagating.
 Tarun Joshi, Communications Custodian, Reid & Taylor said, "Amitabh
Bachchan is an icon with universal appeal and has helped us to reach out to the
real 'Bharat.' In fact, agents and retailers have told us that already customers
have started asking about the 'Amitabh wali suiting.'“
 8.Conclusion

The use of celebrity for endorsements create a very favorable impact on the
consumer and it creates a connect which forces a consumer to purchase a
product

It is essential for advertisers to be aware of the complex processes

underlying celebrity endorsement.

Celebrity endorsements are a powerful and useful tool that magnifies the
effect of a campaign but the word of caution to be followed seriously;

• celebrities alone do not guarantee success nor does a great

advertising campaign or the best possible product. It is the
combination of several factors and elements that work together for
the success of a brand and its acceptance in the minds of consumers
as well as for its market offering
9.Summary and Managerial Implications

Celebrity endorsements will be more effective when-

used consistently over time

Ad design is simple and relevant.

If celebrity is not strongly associated with any other

product.

Celebrity’s image and potential is positive.

If used for less familiar brands.

 10.Limitations

Area bound study

Restricted sample population
Size of sample
Biasness
Thank you