TABLE OF CONTENTS

CHAPTER

SUBJECT

PAGE NO.

Ch.# 1.0 Ch.# 2.0 2.1 2.2 2.3 2.4 2.5 2.6 Ch.# 3.0 3.1 3.2 Ch.# 4.0 4.1 4.2 4.3 4.4 4.5 Ch.# 5.0

Introduction.. Research Methodology. Primary Objective. Hypothesis Research Design.. Sample Design. Scope of the Study.. Limitations Critical Review of Literature. Communication Theories.. Models in Celebrities Endorsement Brand, Celebrity and Consumer Brand. Celebrity... Celebrity Endorsement.. Celebrity and Brand. Understanding Consumer Behavior. The Advantages and Disadvantages of using Celebrities as endorsers 29

7 10 11 12 12 13 14 14 15 16 21

31 32 33 34 34

39 47 51 60 63 67 70 74

Ch.# 6.0 Ch.# 7.0 Ch.# 8.0

Celebrity Endorsement- An Indian Perspective Findings and Analysis Suggestions. Conclusion

Ch.# 9.0

Bibliography and References Annexure.

Ch.# 10.0

Case Study

Impact of Celebrity Endorsement

ABSTRACT

The use of celebrities endorsing brands has been steadily increasing over the past 20 years or so. Marketers visibly acknowledge the power of celebrity in influencing buyer's purchase decision and thereby extending the market share of the company. They believe that likeability or a favorable attitude towards a brand is created by the use of a celebrity. Different kinds of celebrities are used for endorsement purpose, but two of the most common types are entertainers and sports persons.

The purpose of this study is to understand the kind of impact these endorsements have on consumers and there by on the brands. In order to achieve this purpose three research questions have been considered:

Why and when do brands use celebrities as endorsers? What are the risks involved in celebrity endorsements? What impact does celebrity endorsements have on consumer behavior?

Research uses primary source of data. The research tools applied for the analysis of data were mainly statistical tools. The scope of the research is limited to the responses of 100 people living in Delhi NCR region. On the basis of analysis and the interpretations of the results obtained certain recommendations and conclusions have been derived from the research.

The main limitation of this research is that the scope of this research is limited to the response of 100 people who will be filling the questionnaire and thus cannot be generalized for the whole population.

CHAPTER-1.0

INTRODUCTION

1.0 INTRODUCTION

It is a known fact that the best endorsements achieve an eclectic balance between the product (brand) and the celebrity. Giving a brand a 'face' is more than just a marketing strategy to increase sales or gain market share, it is a decision that can change the future of the brand forever.

Choice of the celebrity, hence, is of utmost importance and is usually done based on many different parameters - appeal, looks, popularity or even just a fantasy figure to endorse a brand.

In today's highly competitive markets, big brands are at logger-heads when it comes to products, each having a similar product to that of a rival. Where does one brand gain that quintessential advantage - advertising, service, promise of trust, or even the all important price factors? Advertising seems to be the best platform where brands prefer to compete on - right from hiring the best advertising agencies to getting the biggest celebrities.

The general belief among advertisers is that brand communication messages delivered by celebrities and famous personalities generate a higher appeal, attention and recall than those executed by non-celebrities. The quick message-reach and impact are all too essential in today's highly competitive environment.

India is a country where people are star-struck by film stars, cricketers, politicians, and even criminals. Why? Populations of 1 billion and ticking, everyday people need something or someone to look up to. A sense of security, admiration, comfort, familiarity, and above all, someone they aspire to be at some hidden level in their lives. And clever marketers leverage this very celebrity appeal and are successfully carrying out their jobs by giving the bottom lines of all the brands what they want - profit, market share and even recall.

Now, despite the potential benefits derived from celebrity endorsements, they increase a marketer's risk manifolds and should be treated with full attention and aptitude. A brand 5

should be cautious when employing celebrities to ensure promise believability and delivery of the intended effect. The growing importance of mythical characters as celebrities and their sway over the target segments are ample proof of public demand for icons to look up to. As the celebrities traverse from a mere commercial presence to public welfare message endorsements, a whole new dimension is added to this process and helps us in achieving a holistic view of the impact which celebrities generate in every sphere and segment through their well-versed endorsements.

At the end of the day, the questions that need to be answered are: does a company benefit from a celebrity endorsement? Does anyone buy a product because a Bollywood or TV actor/actress stands up and reads a script in somewhat convincing manner? Are their distinctions in how consumers perceive these types of endorsements and respond to them? What happens when a celebrity endorser gets involved in a public scandal, or worse, dies? Will the product lose consumer support or perish?

CHAPTER-2.0

RESEARCH METHODOLOGY

2.1 PRIMARY OBJECTIVE 2.2 HYPOTHESIS 2.3 RESEARCH DESIGN 2.4 SAMPLE DESIGN 2.5 SCOPE OF THE STUDY 2.6 LIMITATIONS

2.0 RESEARCH METHODOLOGY

Research Methodology is the analysis of the principles of methods, rules, and postulates employed by a discipline, the development of methods, to be applied within a discipline and a particular procedure or set of procedures. It is the maneuver of doing research of particular problem. This includes type of research, sampling method and data collection sources etc.

2.1 PRIMARY OBJECTIVE The primary objective of this research is to analyze the effect of Celebrity Endorsement on Consumer Behaviour.

SECONDARY OBJECTIVE The secondary objectives of this research are as follows: 1. To examine why does the brand uses the celebrities as endorsers 2. To find out when does the brand uses the celebrities as endorsers 3. To find what are the various risk involved in using celebrities as endorsers 4. To examine whether Celebrity endorsement leads to brand enhancement or not 5. To find whether consumer focuses on their needs and cost factor or gets carried away by brands enhanced by the famous people 6. To find the motivating factors that affects the buying decision of a consumer?

2.2 HYPOTHESIS (H0)1 = Celebrity Endorsement does cast an impact on consumer buying behaviour through advertisements. (H1)1 = Celebrity Endorsement does not cast an impact on consumer buying behaviour through advertisements.

2.3 RESEARCH DESIGN A research design is the plan, structure and strategy of investigation conceived so as to obtain to research problem and control variances. It is the specification of methods and procedures for acquiring the information needed. It is overall operational pattern or framework of the 8

project that stipulated what information is to be collected and from which source and by what procedure.

Research design provides the glue that holds the research project together. A design is used to structure the research, to show how all of the major parts of the research project -- the samples or groups, measures, treatments or programs, and methods of assignment -- work together to try to address the central research questions.

Type of research design- DESCRIPTIVE The research is descriptive in nature. In this project report, firstly primary data was collected regarding how a celebrity can help a consumer in identification of a product. A questionnaire was then drafted for the same, to understand the psyche of the customers to know their needs, expectations and their attitude, their liking and disliking and their views and comments about Celebrity Endorsement and towards the brand that they see on various media mode.

On the basis of analysis of the result collected from the survey, certain conclusions have been derived, which are clearly mentioned in detail in the later part of this project report.

2.4 SAMPLE DESIGN Sample design is about choosing how many elements (businesses, people etc) to include in a survey in order to provide a good basis for measuring economic and social phenomena. Estimation is about producing aggregate information from data collection in samples. It includes calculating quality measures based on sampling (sampling errors).

The procedure by which a few subjects are chosen from the universe to be studied in such as way that the sample can be used to estimate the same characteristics in the total is referred to as sampling.

The data collected is in the form of a questionnaire as primary data and certain studies which have already been conducted are also considered which will be used as secondary data.

Type of sample design- CONVEYNCE The research is to be based on non probability sampling technique which attempts to obtain a sample of convenience element. The survey conducted involves a sample of 100 elements.

2.5 SCOPE OF THE STUDY The research conducted attempts to find out the effect of celebrity endorsement on consumer buying decision. In order to achieve this purpose a survey has been conducted which include 100 elements from Delhi NCR region. Thus the scope of the study is limited to the response of 100 elements only.

2.6 LIMITATIONS Research project are hindered in their smooth flow by some unforeseen problems. The problems arise in the form of constraints with time and scope of study. Some of the limitations in the course of research are as follows Sampling error- the research included a small sample size, which can not determine the characteristics of the total population. Limited time- since we are restricted to just four months to cover the work, which is less to undergo the entire study. At times the information given by the respondents were found to be contradicting in nature. Also, sometimes the respondents were reluctant to give their time in order to fill the questionnaire.

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CHAPTER-3.0

CRITICAL REVIEW OF LITERATURE

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3.1

COMMUNICATION THEORIES: 3.1.1 The one step communication model 3.1.2 The two step flow model 3.1.3 Elements of communication

3.2

MODELS IN CELEBRITY ENDORSEMENT 3.2.1 Source Credibility Model 3.2.2 Source Attractiveness Model 3.2.3 Product Match-up Model 3.2.4 Meaning Transfer Model

When researchers first began to study mass communication, they thought that media was allpowerful. They developed the ONE STEP FLOW also called the HYPODERMIC NEEDLE MODEL. In this model, media is seen as a powerful hypodermic needle that injects information directly into the mind of the masses, which are eager to receive it. This way the masses would know what they were told to know and do what they were told to do through the power of mass communication.

MEDIA

The "hypodermic needle theory" implied mass media had a direct, immediate and powerful effect on their audiences. In the 1940s and 1950s mass media were perceived as a powerful influence on behavior change. Several factors contributed to this "strong effects" theory of communication, including: the fast rise and popularization of radio and television, and the emergence of the persuasion industries, such as advertising and propaganda.

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3.1.2 THE TWO STEP FLOW MODEL By the year 1940, researchers realized that there was more to simple mass communication cause and effect model. They became aware that while people do get some of their information from the media directly, it wasnt the media alone that made them act.

While the mass communication does have some effect, the strongest influence comes from the interpersonal communication, especially from the people which the researchers called opinion leaders.

An opinion leader as a peer to whom others turn for information and influences the opinion of others. Opinion leaders gather the information from the media and other resources, synthesize it, think about it and pass it on to others.

This was shown in the TWO STEP FLOW MODEL developed by KATZ and LAZARFELD in 1955. This model shows information flowing from the media to opinion leaders and from them to the masses.

The above model shows that the information does not flow directly from the text into the minds of its audience unmediated but is filtered through "opinion leaders" who then communicate it to their less active associates, over whom they have influence. The audience then mediates the information received directly from the media with the ideas and thoughts

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expressed by the opinion leaders, thus being influenced not by a direct process, but by a two step flow.

The idea of opinion leader became very important, especially for professional communicators who were trying to influence the opinions and actions of large number of people. There are two types of opinion leaders: Formal opinion leaders are people whose opinion is valued because they hold an important office or position for example film stars, sports celebrities, politician etc Informal opinion leaders are people who just have a strong influence on the opinions of their peers.

When a celebrity endorses a product through a mass medium, the form of communication is considered to be interpersonal as he or she seems to influencing the customer directly into purchasing a product by giving his or her opinion about it. Since people relate to such celebrities and are deeply impacted by their endorsements, these celebrities can easily be categorized as opinion leaders. Therefore there are cases where people get lured into buying a product without knowing its true characteristics.

3.1.3 THE COMMUNICATION PROCESS AND ITS ELEMENTS:

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The above diagram represents the actual communication process. As can be seen there eight elements to any communication process. They are explained below: SENDER: The sender is the source from where the information originates. There can be many people involved in originating the information; it can range from 1-2 individuals to a large organization depending upon the type of communication process involved ENCODING: The message so generated by the sender has to be passed to the receiver. The process of putting thought into symbolic form is called as encoding. MESSAGE: The message is the actual idea which the sender wants to transmit to the receiver. The message can be verbal or non verbal. It should be such that it is easily understandable and transmittable through the channel of communication being used. CHANNEL: A channel is the medium through which the message is send by the sender to the receiver. The channel used can be audio, visual or audio visual medium. The channel used should be in accordance to the message. DECODING: The message so sent by the sender has to be transferred into a form which is easily understandable by the receiver. The decoding of the message greatly depends upon the social environment RECEIVER: The receiver is the person/persons to whom the message is directed at. In mass communication receivers are large in number and thus are self directed. RESPONSE and FEEDBACK: Response is a set of reactions that the receiver has after being exposed to the message. Feedback is an important part of the communication process, as without it the sender would not be able to make out if the receiver has been able to interpret the message in the way it was intended. And on this basis sender modifies his/her message. NOISE: Noise is the unplanned hindrances in the way of the communication process due to which receiver receives a different message then that send by the sender. Noises can be of three kinds: semantic, environmental and mechanical.

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3.2 MODELS IN CELEBRITY ENDORSEMENTS Whilst there is a growing interest in the literature regarding celebrity endorsement, most of the work can be classified into the following four theory areas. These include Source Credibility Model, Source Attractiveness Model, Match up Proposition and Meaning Transfer Model.

3.2.1 SOURCE CREDIBILITY MODEL Source Credibility in a broad sense, refers to a communicators positive characteristics that affect the receivers acceptance of a message (Ohanian 1990, p. 41) and rests on the research in social psychology. The Source Credibility Model is generally considered to have two main dimensions; namely Trustworthiness (the audience's degree of confidence in and degree of acceptance of the speaker and the message) and expertness (the extent to which a communicator is perceived to be a source of valid assertions). This model suggests that the effectiveness of a message depends upon how the consumers perceive the endorser (Hovland et al. 1953).

Previous research established a link between expertise and persuasiveness. An expert celebrity tends to be more persuasive and generates a higher willingness to buy the brand by consumers. Furthermore, research has also demonstrated the positive effect of trustworthiness on attitude change. In a research study McGinnies and Ward (1980) found that an expert a trustworthy source generated the strongest opinion change by consumers and the trustworthy communicator was persuasive whether an expert or not (Ohanian 1990). Till and Busler (2000) found the expertise dimension to be more important than physical attraction as a match-up factor. Kamins, et al. (1989) indirectly supported source credibility model. In their study, enhanced credibility and effectiveness was reflected in overall higher ratings on perceived quality of service and respondents also revealed greater purchase intentions.

It should be noted that it is often difficult to define source credibility in exact terms. This is because of different operationalisations and use of different labels and terminology such as ethos, prestige, reputation, authority and competence by different researchers and authors (Ohanian 1990 p. 41). Ohanians (1990) study is considered to be a key research paper in the 16

area of celebrity endorsement. Her three factors fifteen-item credibility scale has been widely accepted and replicated by other researchers. Using two exploratory and two confirmatory samples, Ohanian (1990) developed a fifteen-item semantic differential scale to measure perceived expertise, trustworthiness and attractiveness. Four celebrities and four products were selected and to purify and validate the scale. The whole study was divided in two stages.

In the exploratory stage, after assessing the level of familiarity (with Madonna and John McEnroe), respondents were asked to evaluate 72 semantic differential items. These were reduced to 27 items representing three dimensions (expertise, trustworthiness and attractiveness) by factor analysis. Finally, in order to obtain a practical size of five items per factor, the items with the lowest item-to-total correlations were eliminated while maintaining an acceptable level of reliability. In the confirmatory analysis, five items per subscale (total of 15 items) along with some other validation items were used to assess the final scales reliability and validity. Two adult samples (138 and 127) and two different celebrities (Linda Evans and Tom Selleck) were used to support the generalizability of the scale. Following table represents the final three dimensions source credibility scale.

Source: Construction and Validation of a Scale to Measure Celebrity Endorsers Perceived Expertise, Trustworthiness, and Attractiveness; Ohanian (1990). Table 2.1 Source-Credibility Scale

3.2.2 SOURCE ATTRACTIVENESS MODEL Source Attractiveness Model; considered to be a component of the source valance model (McGuire 1985) and draws on the research in social psychology. The source attractiveness 17

model is mainly based on four dimensions; namely familiarity (knowledge of source through exposure), likeability (affection for source based on his/her physical appearance or behaviour), similarity (resemblance between the source and the audience), and attractiveness. It suggests that effectiveness of the message depends on these four dimensions. Sources that are familiar, likeable and/or similar to the consumers are attractive and to this extent persuasive (Ohanian 1990).

Empirical findings posit that physical attractiveness is one of the key factors in an individuals initial judgment of another individual as well as influencing attitude change (Baker and Churchill 1977; Caballero and Pride 1984; Chaiken 1979; Joseph 1982; Mills and Aronson 1965). Attractive models led to more favorable attitudes toward the advertisement and stronger purchase intentions. Physical attractiveness of the celebrity endorser was found to influence subject recall, product attitudes and purchase intention to a greater extent than endorser likeability or level of product involvement (Kahle and Homer 1985).

3.2.3 PRODUCT MATCH-UP MODEL The Celebrity-Product Match proposition holds that in order to make an advertisement effective, there should be congruence between the product and the celebrity in terms of characteristics such as image, expertise or attractiveness. The Match-up model states that attractive endorsers are more effective when promoting products used to enhance ones attractiveness (Kamins 1990) and that the impact will not be significant in the case of an attractiveness unrelated product. Findings for the research studies conducted by Baker and Churchill (1977), Friedman and Friedman (1979), Joseph (1982) and Kahle and Homer (1985) demonstrated consistent results.

Kahle and Homer (1985) found that in the case of attractiveness related products, the use of physical attractive celebrities increased subject recall, product attitudes, and purchase intention. However, they did not demonstrate that an attractive celebrity is less effective when endorsing a product not used to enhance ones attractiveness, such as home computers. Kamins (1990) set up a full test of the match-up proposition. He paired attractive and unattractive celebrities with either attractiveness related or unrelated products. He paired a 18

celebrity with a product and found interaction effect between attractiveness and product type. Predicted interaction was found for spokesperson credibility and attitude toward the advertisement but not for brand attitude or purchase intention. Erdogan et al. (2001) investigated practitioners perspective and found that while selecting celebrity endorsers, managers considered a number of factors. Consistent to meaning transfer model (McCracken 1989), managers view the celebrity as a multidimensional personality with a bundle of meanings. Moreover, the study demonstrated that there should be a proper fit between celebrity characteristics and product types. Implicitly, they supported the product-match up proposition. Agencies considered congruence, credibility, profession, popularity, and obtainability issues to be more important while deciding upon a celebrity. They also rated trustworthiness and expertise more important in the case of technical/attractiveness-unrelated product (Erdogan et al. 2001). On the other hand, they indicated that celebritys physical attractiveness, familiarity and likeability were more important for a non-technical or attractiveness-related product.

Till and Busler (1998, 2000) examined attractiveness versus expertise as a relevant match-up factor and found a general attractiveness effect on brand attitude and purchase intent but no match-up effect was found based on attractiveness. Based on their findings, Till and Busler proposed that though attractiveness is important, expertise is more appropriate for matching products with a celebrity endorser.

3.2.4 MEANING TRANSFER MODEL McCracken (1989) addressed the endorsement process from a cultural perspective. He argued that the endorsement process depends upon the symbolic properties of the celebrity endorser and the celebrity served the endorsement process by taking on the meanings that then carry from advertisement to advertisement. McCracken has described the Celebrity Endorsement process as a special instance of a more general meaning transfer (McCracken 1986; McCracken 1989). In the model, cultural meanings move through a conventional path to individual consumers. Meanings begin as something inherent and resident in the culturally constituted, physical, and social world. Meanings move from culturally constituted world to consumer goods through advertising and fashion systems and than it is transferred to 19

individual consumer through the efforts of the consumer. Thus, meaning keeps on circulating in the consumer society (McCracken 1986; McCracken 1989).

McCracken (1989)s meaning transfer theory has direct implications for the celebrity endorsement process. He argues that for the purpose of communication, a celebrity has a set of fictional roles and when consumers respond to celebritys specific characteristic, they are in fact responding to a very particular set of meanings. A celebrity is a persuasive communicator not only because of being attractive or credible but also because he/she has made up certain meanings the consumer finds compelling and useful. The effectiveness of the endorser depends upon the meanings he or she brings to the endorsement process.

McCracken has described the whole Meaning Transfer Process in three stages. As shown in figure in the initial stage, the meanings generated from distant movie performances, political campaigns, or athletic achievements and performance, reside in celebrities themselves. In the second stage, meanings are transferred to the product through advertisement and the endorsement process. In the third stage the meanings are transferred from the product to the consumer where the properties of the product become the properties of the consumer (McCracken 1989).

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3.3 CELEBRITY ENDORSEMENT STRATEGY Marketers generally use individuals who have achieved some form of celebrity status for their companies to serve as spokespersons. Most of the people that are hired by any company to pitch their products or services are popular people that can be movie stars, entertainers, athletics, or pop-stars, and occasionally a politician or some other well-known public figure may be used (Belch & Belch, 2001). Further, when a company decides upon using an endorsement strategy for their marketing communication tool, the main focus lies in exposing their brand (Kotler, Armstrong, Saunders, & Wong, 2001).In an endorsement strategy a new sort of product is given a new brand name that is unique for that product (Riezebos, 2003).along with the unique brand name, companies also get provided with the name of an endorser. In such case, the endorser is a celebrity and function is endorsement which means an approval or support that can be seen as a guarantee or recommendation to the consumers. According to Riezebos (2003) it is only advisable to use endorsers for brands if there is a high level of brand-added value. This means that the name of the endorser should be clearly visible next to the name of the branded article.

Companies have jointly been using their brands and their own name, through the use of celebrity endorsers, in a hope that celebrities might boost effectiveness of their marketing attempts in the long-term (Belch & Belch, 2001).Basically, a company is trying to send various types of information to their target audience.

In order to be able to develop an effective advertising and promotional campaign, a company has to select their endorser who are appropriate to different channels and media (Till & Shimp, 1998),such as source, message, and receiver (Belch & Belch, 2001).Thus, the brand can be seen as the message the company is trying to send to their audience. Moreover, the source which is intended to send this message in an endorsement strategy becomes the celebrity and the receiver in the communication process becomes the consumer (Belch & Belch, 2001)

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CHAPTER-4.0

BRAND, CELEBRITY AND CONSUMER

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4.1 B RAND 4.2 CELEBRITY 4.3 CELEBRITY ENDORSEMENT 4.3.1 Types of Celebrity Endorsements 4.4 CELEBRITY AND BRAND 4.4.1 Celebrity Brand Compatibility 4.5 UNDERSTANDING CONSUMER BEHAVIOUR 4.5.1 Consumer Decision Making Process 4.5.2 Impact of Brand on Consumer Decision Making Process

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4.0 BRAND, CELEBRITY AND CONSUMER

4.1 BRAND: Brand is the proprietary visual, emotional, rational and cultural image that a consumer associates with a company or the product. Few examples to clarify its meaning are Amul utterly butterly delicious; Coke thanda matlab coca-cola; Pepsi Yeh dil mange more; Kurkure- Masti bole to kurkure.

The above examples convey one message that when people watch these advertisements a connection is created which results in people wanting to go for the experience of buying. People feel that by using the brand, they will receive certain traits or characteristics that they otherwise do not have, thus generating sense of fulfillment.

Advertisements enforce what exactly the brand stands for and what to expect by its consumption and also what all factors, features and attributes makes it better and different from its competition. Advertisements force people to think about what they see or hear. This gets enhanced when a celebrity endorses the brand. The subjective intangible feelings of a customer become objective and tangible in the form of celebrity and the level of expectations rises.

4.2 CELEBRITY: Celebrities are people who enjoy public recognition and are the experts of their respective fields having wider influence in public life and societal domain. Attributes like attractiveness, extraordinary life style or special skills, larger than life image and demigod status can be associated with them.

Celebrities appear in public in different ways. They appear in public when fulfilling their professional commitments or they appear in public by attending special celebrity events. Celebrities have universal presence and appeal, and are present everywhere, in news, fashion shows and magazines, tabloids and above all advertisements.

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4.3 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.

Thus, companies use celebrities to endorse their products; however, there are deeper attributes that are involved in celebrity endorsement. Celebrities might endorse as a brand ambassador or a brand face.

4.3.1 Types of Celebrity Endorsements Celebrity branding has many aspects. A slight change in the type of branding used can result in either a great success or a dismal failure. Celebrity branding falls into five general categories:

Testimonial: The celebrity acts as a spokesperson for the brand. Imported: The celebrity performs a role known to the audience. Invented: The celebrity plays a new, original role. Observer: The celebrity assumes the role of an observer commenting on the brand. Harnessed: The celebrity's image is integrated with the ad's storyline.
4.4 CELEBRITY AND BRAND: According to Advertising research companies that actors bring reliability and trust in the brand and above all, they help in increasing the sales revenues. Celebrity endorsements are powerful.

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This power is offered by the following elements, which also creates a 'Top of the Mind Position'. Instant Awareness, knowledge about the brand and easy recall. Values and image of the brand is defined, highlighted and refreshed by the celebrity. The celebrity adds new edge and dimension to the brand. Credibility, trust, association, aspiration and connectivity to brand. Belief in efficiency and new appearance that will result in at least trial usage.

4.4.1 Celebrity and Brand Compatibility: A celebrity is used to impart credibility and aspirational values to a brand, but the celebrity needs to match the product. A good brand campaign idea and an intrinsic link between the celebrity and the message are musts for a successful campaign. Celebrities are no doubt good at generating attention, recall and positive attitudes towards advertising provided that they are supporting a good idea and there is an explicit fit between them and the brand. On the other hand, they are rendered useless when it comes to the actual efficiency of the core product, creating positive attitudes to brands, purchase intentions and actual sales.

Certain parameters that postulate compatibility between the celebrity and brand image are:

Celebritys fit with the brand image. CelebrityTarget audience match Celebrity associated values. Costs of acquiring the celebrity. CelebrityProduct match. Celebrity controversy risk. Celebrity popularity. Celebrity availability. Celebrity physical attractiveness. Celebrity credibility. Celebrity prior endorsements. Whether celebrity is a brand user. 26

4.5 UNDERSTANDING CONSUMER BEHAVIOUR Consumer Behavior is the study of how people buy, what do they buy, when do they buy and why do they buy. It blends elements from psychology, sociology, socio-psychology, anthropology and economics. It tries to understand the buyer decision-making process, both individually and in groups. It studies the characteristics of individual consumers such as demographics, psychographics, and behavioral variables in an attempt to understand people's wants and also assess influences on the consumer from various groups such as family, friends, reference groups, and society in general.

The study and knowledge of consumer behavior is essential to the firms as it helps them to improve their marketing strategies and product offerings. Following are some of the important issues that have significant influence on consumer's psyche that affects their buying behaviour: The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products); The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media); Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome; How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer. Their Age, Religion, Culture, Income, informal group and Referent Group.

4.5.1 Consumer Decision Making Process:

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The above process is explained here:

The first step to consumer buying process starts with problem recognition or with an unsatisfied need of a consumer. Something, that a consumer would like to have or purchase in order to attain satisfaction. This need can be Psychological, attitudinal or Physiological.

The next stage includes the ability to purchase, level of involvement, people whose opinion will count and other relevant details that will help in optimizing the consumer satisfaction.

Based upon information search various alternatives are generated i.e. which brand or product is affordable to the consumer, where will it be comfortably available and in comparison to other brands or products how better or economical it is.

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The next stage is the Evaluation stage which takes into consideration cost benefit analysis and based upon maximum value or utility per rupee spend, consumer decides or shortlist the product or brand. This is the decision and confirmation stage where the consumers prepares him for the purchase of a particular brand and give preference to one and only one over and above the others.

Next stage in the consumer decision making process is the purchase when the consumer finally goes to the market and looks for the brand or the product, physically verifies it and purchases it. Last stage is the post purchase Evaluation in which the customer justifies his consumption or purchase decision. He tries to find out whether his purchase decision was right or not. Companies make a lot of effort to tackle this situation successfully and they want the customer to be satisfied with their product.

The last stage may result into three situations: Satisfaction where customer is satisfied as he got expected results but this does not necessitates the repeat purchase by the consumer. Dissonance where the consumer is not satisfied as he got less utility or less than expected result from the consumption or product performance. Delight where the consumer gets more than expected satisfaction and utility and this will assure the repeat purchase and creation of brand loyalty.

4.5.2 Impact of Brand on Consumer Decision Making Process Research studies have proven that known products and names are sold more than unknown ones. Therefore, a known brand or an optimally exposed brand will find more recognition and buyers in the market in comparison to completely unknown or unexposed brand. Recognition of brand and its significance along with the traditional factors plays a very significant role in consumer decision-making process.

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The above given model explains the important role that a brand plays in three different stages of consumer's purchase decision making. A consumer start collecting data or information about his favorite brand, than he keeps his favorite as one of the alternatives and he evaluate his selected brand against all available options and on finding it suitable or best among all options, based upon a qualitative and quantitative evaluation he ultimately purchases the selected or favorite brand.

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CHAPTER-5.0

THE ADVANTAGES AND DISADVANTAGES OF USING CELEBRITY AS ENDORSERS

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5.0 THE ADVANTAGES AND DISADVANTAGES OF USING CELEBRITY AS ENDORSERS

The Argument for Celebrity Endorsement Brands have been leveraging celebrity appeal for a long time. Across categories, whether in products or services, more and more brands are banking on the mass appeal of celebrities. As soon as a new face ascends the popularity charts, advertisers queue up to have it splashed all over. Witness the spectacular rise of Sania Mirza and Irfan Pathan in endorsements in a matter of a few months. The accruement of celebrity endorsements can be justified by the following advantages that are bestowed on the overall brand:

Establishment of 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. We had the Shah Rukh-Santro campaign. At launch, Shah Rukh Khan endorsed Santro and this ensured that brand awareness was created in a market, which did not even know the brand.

Ensured Attention: Celebrities ensure attention of the target group by breaking the clutter of advertisements and making the ad and the brand more noticeable.

PR Coverage: is another reason for using celebrities. Managers perceive celebrities as topical, which create high PR coverage. A good example of integrated celebrity campaigns is one of the Worlds leading pop groups, the Spice Girls, who have not only appeared in advertisements for Pepsi, but also in product launching and PR events.

Time Saving: Celebrity is able to build brand credibility in a short period of time. Higher Degree of Recall: People tend to commensurate the personalities of the celebrity with the brand thereby increasing the recall value. Golf champion Tiger Woods has endorsed American Express, Rolex, and Nike. Actress Catherine ZetaJones is used by T-Mobile and Elizabeth Arden. 007 Pierce Brosnan promotes Omega, BMW, and Noreico.

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Associative Benefit: A celebritys preference for a brand gives out a persuasive message - because the celebrity is benefiting from the brand, the consumer will also benefit.

Mitigating a Tarnished Image: Cadbury India wanted to restore the consumer's confidence in its chocolate brands following the high-pitch worms controversy; so the company appointed Amitabh Bachchan for the job. Last year, when the even more controversial pesticide issue shook up Coca-Cola and PepsiCo and resulted in much negative press, both soft drink majors put out high-profile damage control ad films featuring their best and most expensive celebrities. While Aamir Khan led the Coke fight back as an ingenious and fastidious Bengali who finally gets convinced of the product's `purity,' PepsiCo brought Shah Rukh Khan and Sachin Tendulkar together once again in a television commercial which drew references to the `safety' of the product indirectly.

Psychographic Connect: Celebrities are loved and adored by their fans and advertisers use stars to capitalize 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.

Providing Testimony: Another benefit of using celebrity endorsers is that s/he can provide testimony for a product or service, particularly when the product has contributed to their celebrity. The more familiar an endorser, the more likely consumers are to buy the endorsed product.

Rejuvenating a Stagnant Brand: With the objective of infusing fresh life into the stagnant chyawanprash category and staving off competition from various brands, Dabur India roped in Bachchan for an estimated Rs 8 crore.

Celebrity endorsement can sometimes compensate for lack of innovative ideas.

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The Argument Against Celebrity Endorsement

The Reputation of the Celebrity May Derogate After he/she has Endorsed the Product: Pepsi Cola's suffered with three tarnished celebrities - Mike Tyson, Madonna, and Michael Jackson. Since the behaviour of the celebrities reflects on the brand, celebrity endorsers may at times become liabilities to the brands they endorse.

The Vampire Effect: This terminology pertains to the issue of a celebrity overshadowing the brand. If there is no congruency between the celebrity and the brand, then the audience will remember the celebrity and not the brand. Examples are the campaigns of Dawn FrenchCable Association and Leonard RossiterCinzano. Both of these campaigns were aborted due to celebrities getting in the way of effective communication. Another example could be the Castrol commercial featuring Rahul Dravid.

Inconsistency in The Professional Popularity of The Celebrity: The celebrity may lose his or her popularity due to some lapse in professional performances. For example, when Tendulkar went through a prolonged lean patch recently, the inevitable question that cropped up in corporate circles - is he actually worth it? The 2003 Cricket World Cup also threw up the Shane Warne incident, which caught Pepsi off guard. With the Australian cricketer testing positive for consuming banned substances and his subsequent withdrawal from the event, bang in the middle of the event, PepsiCo - the presenting sponsor of the World Cup 2003 - found itself on an uneasy wicket

Multi Brand Endorsements: by the same celebrity would lead to overexposure: The novelty of a celebrity endorsement gets diluted if he does too many advertisements. This may be termed as commoditisation of celebrities, who are willing to endorse anything for big bucks. Example, MRF was among the early sponsors of Tendulkar with its logo emblazoned on his bat. But now Tendulkar endorses a myriad brands and the novelty of the Tendulkar-MRF campaign has scaled down.

Celebrities Endorsing one Brand and Using another (competitor): Sainsburys encountered a problem with Catherina Zeta Jones, whom the company used for its recipe advertisements, when she was caught shopping in Tesco. A similar case 34

happened with Britney Spears who endorsed one cola brand and was repeatedly caught drinking another brand of cola on tape. Mismatch Between the Celebrity and the Image of the Brand: Celebrities manifest a certain persona for the audience. It is of paramount importance that there is an egalitarian congruency between the persona of the celebrity and the image of the brand. Each celebrity portrays a broad range of meanings, involving a specific personality and lifestyle. Madonna, for example, is perceived as a tough, intense and modern women associated with the lower middle class. The personality of Pierce Brosnan is best characterized as the perfect gentlemen, whereas Jennifer Aniston has the image of the good girl from next door.

35

CHAPTER-6.0

CELEBRITY ENDORSEMENT- AN INDIAN PERSPECTIVE

36

6.0 CELEBRITY ENDORSEMENT- AN INDIAN PERSPECTIVE

The latter part of the '80s saw the burgeoning of a new trend in India brands started being endorsed by celebrities. Hindi film and TV stars as well as sportspersons were roped in to endorse prominent brands. Advertisements, featuring stars like Tabassum (Prestige pressure cookers), Jalal Agha (Pan Parag), Kapil Dev (Palmolive Shaving Cream) and Sunil Gavaskar (Dinesh Suitings) became common. Probably, the first ad to cash in on star power in a strategic, long-term, mission statement kind of way was Lux soap. This brand has, perhaps as a result of this, been among the top three in the country for much of its lifetime.

In recent times, we had the Shah Rukh-Santro campaign with the objective of mitigating the impediment that an unknown Korean brand faced in the Indian market. The objective was to garner faster brand recognition, association and emotional unity with the target group. Star power in India can be gauged by the successful endorsement done by Sharukh for three honchos- Pepsi, Clinic All Clear and Santro. Similarly, when S Kumars used Hrithik Roshan, then the hottest advertising icon for their launch advertising for Tamarind, they reckoned they spent 40 - 50 per cent less on media due to the sheer impact of using Hrithik. Ad recall was as high as 70 per cent, and even the normally conservative trade got interested.

In the Indian context, it would not be presumptuous to state that celebrity endorsements can aggrandize the overall brand. We have numerous examples exemplifying this claim. A standard example here is Coke, which, till recently, didn't use stars at all internationally. In fact, India was a first for them. The result was a ubiquitously appealing Aamir cheekily stating Thanda matlab Coca Cola. The recall value for Nakshatra advertising is only due to the sensuous Aishwarya. The Parker pen brand, which by itself commands equity, used Amitabh Bachchan to revitalize the brand in India. According to Pooja Jain, Director, Luxor Writing Instruments Ltd (LWIL), post Bachchan, Parker's sales have increased by about 30 per cent.

India is one country, which has always idolized the stars of the celluloid world. Therefore it makes tremendous sense for a brand to procure a celebrity for its endorsement. In India there is an exponential potential for a celebrity endorsement to be perceived as genuinely relevant, 37

thereby motivating consumers to go in for the product. This would especially prove true if the endorser and the category are a natural lifestyle fit like sportspersons and footwear, KapilSachin and Boost or film stars and beauty products.

SOME GLOBAL EXAMPLES: Globally, firms have been juxtaposing their brands and themselves with celebrity endorsers. Some successful ongoing global endorsements are as follows:

Celebrity endorsements have been the bedrock of Pepsi's advertising. Over the years,
Pepsi has used and continues to use a number of celebrities for general market and targeted advertising, including Shaquille O'Neal, Mary J. Blige, Wyclef Jean, and Busta Rhymes, who did a targeted campaign for their Mountain Dew product.

George Foreman for Meineke. He has also sold more than 10 million Lean Mean Fat-Reducing Grilling Machines since signing with the manufacturing company.

James Earl Jones for Verizon and CNN. Nike golf balls, since the company signed Tiger Woods in 1996, have seen a $50
million revenue growth. Nike's golf line grossed more than $250 million in annual sales. In 2000 he renegotiated a five-year contract estimated at $125 million.

Other successful endorsements like NikeMichael Jordan, DunlopJohn McEnroe,

AdidasPrince Naseem Hamed, and so on.

Venus Williams, tennis player and Wimbledon champion has signed a five-year $40
million contract with sportswear manufacturer Reebok International Inc.

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CHAPTER-7.0

FINDINGS AND ANALYSIS

39

AGE PROFILE

Age group 18-25yrs 25-35 yrs 35-50 yrs Above 50 yrs

Percentage of people 66% 28% 6% 0

This research project is based on the responses of people belonging to the age group of 18 to 25 years of age, around 28% belongs to the age group of 25 to 35 years of age and only 6% belongs to the category of 35 to 50 years of age group.

Therefore this research project is based on the perception of youth. That is how the consumer belonging to this age group reacts to the celebrity endorsement strategies taken by the companies. GENDER PROFILE
PERCENTAGE

52%

48%

MALE FEMALE

The number of respondents taken to fill this questionnaire has been equally divided into males and females, so that there is no biasness between the responses. Due to this reason perceptions of both the gender have been taken into consideration.

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ARE ADVERTISEMENTS INFORMATIVE?

10%

yes no

90%

According to the survey done it can be inferred that most of the consumers feel advertisements are very informative, whether they are in any form i.e. media, newspaper, magazines etc. Majority of people thinks that advertisement helps them to get the brief information about the product even before its launch. As a result it influences their buying decision to some extent.

WHAT FACTORS AFFECT A CONSUMER BUYING DECISION

Motivating factors to buy a product
120 100 80 60 40 20 0 Most important factor 2nd important f actor 3rd important f actor 4th important factor least important factor
% of respondents

celebrity endorsement Latest trends Discounts and off ers Quality Price

degree of im portance

According to the survey, it can be concluded that majority of consumers (44%) give utmost importance to quality while going for a particular product, followed by price, discounts, offers etc. While celebrity endorsement is the least important feature that most of the consumers (44%) consider while making their purchase decision. Thus latest trends and celebrity

41

endorsement does not play such an important role in influencing a consumers buying decision as compared to other factors.

DOES CELEBRITIES CAST IMPACT?

Do celebrities cast impact through advertisement

12%

yes no

88%

From the above chart it can be concluded that celebrities cast impact through advertisement. 88% of respondents feel that Celebrities ensure attention of the target group by breaking the clutter of advertisements and making the ad and the brand more noticeable. Besides this, people perceive celebrities as topical, which create high PR coverage.

Thus the above graph proves that in the Hypothesis, Null Hypothesis is accepted, that is Celebrity Endorsement does cast an impact on consumer buying behaviour through advertisements. And Alternate Hypothesis is rejected.

IF YES, THEN HOW?

if yes, how?

20%

Attracts attention
50%

Build desire to have a product initiate an action to buy a product

30%

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Attracting attention, building desire to have a product and initiating an action to buy a product are the various basis through which celebrities cast impact through advertisement. Majority of the respondents are of the view that celebrities attract the attention of their target group. People tend to commensurate the personalities of the celebrity with the brand thereby increasing the recall value. Whereas 26% people think that celebrity of their choice build desire in them to make a purchase. Some stars have a universal appeal and therefore prove to be a good bet to generate interest among the masses.

CELEBRITIES HELP IN INCREASING THE MARKET SHARE?

Do celebrities help in increasing the market share of the company

14%

52% 34%

Always sometimes Never

On the basis of the survey it can be inferred that celebrities helps in increasing the market share of the company. 52% of people support this point. Besides this, it also helps in rejuvenating a stagnant brand. Whereas, 34% of people thinks the other way round. According to them they (celebrities) not always help in increasing the share of company i.e. the reputation of the celebrity may derogate after he/she has endorsed the product.

DOES CELEBRITIES USE THE PRODUCT THEY ENDORSE?

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Do celebrities use the product they endorse

6%

12%

yes no cant say

82%

According to the responses in the questionnaire, 82% of the respondents believe that celebrities do not use the product that they endorse. 12% of them believe that the celebrities does use the products so endorsed by them in their daily lives. And 6% are not sure whether the celebrities use the products they endorse or they do not. Thus we can conclude that in todays world consumers are educated and do not get carried away by the celebrities they see endorsing the product. IS IT ETHICAL TO ENDORSE A PRODUCT NOT USED BY CELEBRITIES?
if no, is it ethical?

15, 37%

no yes
26, 63%

This chart shows whether the consumers believe that when celebrities do not use the product they endorse then is it ethical for them to endorse such a product. The majority of the people believe that is 63% of them say it is not ethical for celebrities to do such a thing. And only 37% says it is ethical. 44

Thus it can be inferred that most of the consumers are infect against the wrong perception that celebrities try to make in the mind of the consumers. They say that it is not morally correct on the part of the celebrities to do such a thing.

DOES INVESTMENT MADE IN CELEBRITIES ACTUALLY BENEFIT THE COMPANY?

companies investing huge money for using celebrities help them in increasing their total revenue?

16%

somewhat agree somewhat disagree

84%

The above chart explains that when companies invest huge amount of money for using celebrities, does according to the consumers it actually help the companies to increase their total revenue. Majority (i.e 84%) somewhat agrees to the fact that the celebrities does help in increasing the total revenue of the company from their endorsements. A small percentage (i.e. only 16%) somewhat disagree to this statement. This small number of people does not agree

45

and thus say that investing such huge amounts in celebrities are not necessary if their products are good enough. WHICH OF THE CELEBRITIES ARE MOST AFFECTIVE?
what kind of celebrity are most affective?
100% 80% percentage 60% 40% 20% 0% Sports person Filmstar TV star Politician

Not affective affective very affective

celebrity

The above chart explains what kinds of celebrities are most affective in endorsing the products. Film stars are the ones who have the most prominent impact on the buying behaviour of the consumers. Next comes the sports persons who easily connect to the people and have power to change the purchasing decisions. T.V stars are not very affective but they do have some impact, may be because people see them on television daily and thus becomes a part of their lives. The least affective celebrities are the politicians who hardly have any impact on the consumers. We can say that people do not perceive politicians as topical which creates high PR coverage.

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GENDER WISE MOTIVATING FACTORS

Number of respondents

16 14 12 10 8 6 4 2 0 Price as most Quality as Discounts & important most important offers as most important Latest Trends as most important Celebrity endorsement as most important

Male Female

Motivating factors to buy a product

If we segregate the consumers into male and female and then see what factors motivates them the most then we can say that for both males and females Quality is the utmost important factor to buy a product. Then while price is the second most important factor for males, discounts and offers are considered by females. And for males discounts and offers are not

47

even considered while purchasing the product. While for both males and females celebrity endorsements have been the least motivating factor.

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CHAPTER-8.0

SUGGESTIONS

49

8.0 SUGGESTIONS Companies must try and use a celebrity whose personality matches the brand attributes and branding strategy. Only a good match helps to enhance the brand value. Companies should avoid using a celebrity who is endorsing many brands simultaneously. In such a case the consumers get confused and may fail to associate the celebrity with the brand. Moreover using a multi brand endorser does not influence the rate of brand recall as much. Companies should try and focus on the product quality, price, and promotional schemes rather than primarily focusing on the Celebrity. As per the research the consumers give more importance to these factors as compared to the celebrity endorsing the product. Since celebrities are better at attracting attention than leading to purchase behavior, companies must also keep this factor in mind while choosing a celebrity. Though the intelligent consumer of today understands that the celebrity endorsing a product does not necessarily use it, the percentage of such consumer is small. Also most people feel it is unethical to proclaim such a thing. Hence a company must be careful that a celebrity endorsing product A is not seen publicly using the competing brand. This may lead to negative publicity. When it comes to celebrities, Film stars and Sports persons have a greater impact on public as compared to Television stars and Politicians. As the image of politicians and T.V stars is frequently variable they may hamper the brand image. Companies must be careful to use politicians and T.V stars for selective brands whose target audience is influenced essentially by such celebrities. While using celebrities to endorse a product the cost factor should always be kept in mind. The revenue might not be as high as the cost incurred in using a particular celebrity. While planning the advertising, the company must make sure that the celebrity does not overpower the brand. In all advertising messages and PR activities the brand must be highlighted more than the celebrity. 50

The aim of any promotional activity is enhancement of the brand. The celebrity must act according to the brand and the branding must not change according to the celebrity as they may prove fatal to the products individual image in the long run.

While choosing a celebrity, only his present must not be considered. Celebrities in general have a long term effect on brands hence a conscious decision must be made considering their past, present and gazing into their future projects and actions.

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CONCLUSIONS

52

CONCLUSIONS

In India today, the use of celebrity advertising for companies has become a trend and a perceived winning formula of corporate image-building and product marketing.

Advertisement is a medium through which a brand gets a personality and endorsers are perceived as the personalities of the brand. Therefore, as it is essential to bring a synergy between an individual's outfit and his personality, the same way it is essential to bring a synergistic effect between the brand and the endorser

Brands rely on celebrities for the following reasons: Credibility: Approval of a brand by a star fosters a sense of trust for that brand among the target audience 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.

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 product. There is a demographic and psychographic connection between the stars and their fans. Demographic connection establishes that different stars appeal differently to various demographic segments i.e. age, gender, class, geography etc., while psychographic connection establishes that stars are loved and adored by their fans. Some stars have a universal appeal and therefore prove to be a good bet to generate interest among the masses. Another invaluable benefit from celebrity endorsements is the public relation opportunities.

Selecting a celebrity involves a lot of financial risk. At some point in the decision to use celebrity endorsers, advertisers have to consider the cost effectiveness of their choice. The 53

endorser who appears to have the highest potential, tend to be the most popular, and therefore, the most expensive to hire as an endorser. The demand for entertainment and sports celebrities has increased, and these individuals are sometimes very expensive to use as endorsers. In this situation, the advertiser must decide whether the celebrity is worth the investment.

The impact of an endorser cannot be sustainable in all product categories and in all the stages of brand life cycles. It really depends upon the type of product. If it is a 'functional brand', then the product itself is the hero. Here any celebrity association with the brand without corresponding performance of the product will not be sustainable. While in case of 'image brands', like the categories of soaps, soft drinks, cigarettes etc., where it is difficult to distinguish between the products, celebrity endorsements help to distinguish between the brands at an emotional level.

It would be difficult to judge the direct effect of celebrity endorsement on the sales or profits of the company. On Amitabh Bachchan endorsing RIN, HLL could not comment much on its sales and that though Dabur healthcare products' sales had improved. Similarly, there are also cases wherein there was a dramatic change in the sales figure after the endorsements. For example, Celebrity endorsement helped Head & Shoulders promote their brand and within a year they became market leaders with over 45% market share.

A celebrity does help in increasing brand sales, but only if he/she is selected carefully and used effectively. The personality of the brand and the celebrity have to complement each other and the selection of the celebrity is, therefore, very important.

With the help of the literature we have managed to close the knowledge gap and created a literature review about Celebrity Endorsement. In broad terms one can conclude that endorsement does work, consumers do respond to an endorsement of a product by a celebrity. The fact of associating a product with a well-known individual acts to increase the positive view of the consumer. The potential benefits from endorsement for the brand owner are clear, so long as the links are indisputable and match links in the consumer's mind.

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CHAPTER-9.0 BIBLIOGRAPHY AND REFERENCES

55

9.0 BIBLIOGRAPHY AND REFERENCES

1) Belch, G.E., & Belch, M.A. (2001). Advertising and Promotion: An integrated Marketing Communications Perspective (5thed.). Boston: Irwin/MaGraw-Hill. 2) Kotler, P., Armstrong, G., Saunders, J., & Wong, V. (2001).Principles ofMarketing. Prentice Hall: Harlow 3) Kotler, P., Bowen, J., and Makens, J. (1999) Marketing for Hospitality and Tourism,2nd Ed., Upper Saddle River: Prentice Hall Inc. 4) Kotler, P. (1997), Marketing management: analysis, planning, implementation, and control, 9th Ed., London: Prentice Hall International. 5) Kotler, P. (1984), Marketing essentials, London: Prentice-Hall 6) Riezebos, R., Kist, B., Koostra. G. (2003), Brand Management. A theoretical and practical approach. Prentice Hall 7) Till, B.D., & Schimp, T.A. (1998).Endorsers in Advertising: The case of Negative Celebrity Information: Journal ofAdvertising,27 8) http://www.rediff.com/money/2003/dec/05guest.htm, Country Manager - Discovery, Ogilvy and Mather India 9) Aaker, David A. (1996), Building Strong Brands. New York, NY: The Free Press. 10) Daneshvary, Rennae and R. Keith Schwer (2000), "The Association Endorsement and Consumers' Intention to Purchase," Journal of Consumer Marketing, 17 (3), 203-213. 11) Friedman, Hershey H. and Linda Friedman (1979), "Endorser Effectiveness by Product Type," Journal of Advertising Research, 19 (5), 63-71. 12) McCracken, Grant (1989), "Who Is the Celebrity Endorser? Cultural Foundations of the Endorsement Process," Journal of Consumer Research, 16 (3), 310-321. 13) http://www.thehindubusinessline.com/2008/04/09/stories/2008040950750500.htm 14) http://www.marketingprofs.com 15) http://www.brandchannel.com 16) http://papers.ssrn.com 17) http://hull.aug.edu/thoughtLeadership/research/Amos-Holmes-Strutton-IJA-2008.pdf 18) advertising.about.com/od/celebrityendorsements/Celebrity_Endorsements.htm 19) www.merinews.com/catFull.jsp?articleID=183 56

20) http://www.businessweek.com/smallbiz/content/nov2008/sb20081114_106175.htm 21) http://www.ingentaconnect.com/content/westburn/jmm/1999/00000015/00000004/art0 0005 22) http://lifestyle.in.msn.com/fashion/article.aspx?cp-documentid=1671484 23) http://www.indianmba.com/Faculty_Column/FC706/fc706.html 24) http://www.ibsaf.org/icfai_books/Celebrity_Endorsements_Perspectives_%20and_Cas es.html 25) http://www.indiantelevision.com/tamadex/y2k8/sep/tam38.php 26) http://www.theindiastreet.com/celebrity-endorsement

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ANNEXUERS

58

QUESTIONNAIRE

Name Income Gender Age Occupation

: : : : : 18-25yrs 25-35yrs 35-50yrs above 50yrs

1) Do you think Advertisement informative?

Yes

No

2) What is a motivating factor to buy a product? Rank the below according to your preference (keeping 1 as the highest and 5 as the lowest).

Price

Quality

Discounts and offers

Latest Trends

Celebrities endorsing the product

Any other______________________________

3) According to you do Celebrities cast impact through Advertisements?

Yes

No 59

4) If Yes?

Attracts Attention

Build Desire to have the product

Initiate an action to buy the product

5) Does Celebrities helps in increasing the market share of the company?

Yes

No

6) What do you think, do celebrities themselves uses the product they endorses?

Yes

No

7) If No, do you think is it ethical to do such a thing?

Yes

No

8) Do you think companies investing huge money for using celebrities help them in increasing their total revenue?

Yes

No

9) What kinds of celebrity are most affective?

Very Affective

Affective

Not Affective

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Sports Person Film Star TV star Politician

10) According to you what are other risks involved in using celebrity as endorsements?

CHAPTER-10.0

CASE STUDY

61

10.0 CASE STUDY THE SIYARAM CELEBRITY ENDORSEMENT EXPERIENCE "We have enough of film stock for a whole year. Unfortunately we can't use them anymore." - N Gangadhar, General Manager (Marketing), Siyaram Silk Mills, commenting on the withdrawal of the J Hampstead advertisement campaign, in April 2000. The Cronje Scandal In April 2000, the New Delhi police unearthed one of the biggest scandals ever to hit the world of cricket. While investigating a local corruption case, officials recorded phone conversations between Hansie Cronje (Cronje), the captain of the South African cricket team, and Sanjeev Chawla, a London-based Indian businessman. The conversation in the tapes seemed to implicate both men in illegal betting on a match played in February 2000 in India. After initial denials, Cronje conceded that he had accepted $ 15,000 to fix the match. The news shocked both cricket fans and the media alike - Cronje's face was smeared with black paint on posters across the country. Siyaram Silk Mills Ltd. (Siyaram), one of India's leading textile companies, was also affected badly by this controversy. Hansie Cronje was one of the key celebrity endorsers for Siyaram's J.Hampstead brand of clothing. The campaign featuring Cronje had been running on the print, electronic and outdoor media from March 2000. Siyaram and its advertising agency, Percept, watched in dismay as their celebrity endorser turned into an internationally hated sportsman overnight. The issue raised a heated debate in corporate and media circles regarding the perils of using celebrity endorsement. Percept sources commented, "This mess is horrible." Union Minister of State for Information and Broadcasting Arun Jaitley, who was also president of the Delhi District Cricket Association, said the Delhi police would take the 62

scandal to its ''logical end''. ''The tapes have proved beyond doubt the involvement of the South African skipper,'' What happens when models turn 'villains'? Why did the advertisers choose Cronje & Co? How much were they paid? These and more questions surfaced. Siyaram pulled down all the billboards featuring the entire South African team across the country. The J.Hampstead campaign was completely withdrawn, almost 20 days before it completed its scheduled run on hoardings and television. The 'match-fixing' scandal seemed all set to force Siyaram and other Indian companies to rewrite the rules of using celebrity endorsement as an integral part of their media plans. Background Note Siyaram was a part of the Siyaram Poddar Group of companies, which had a turnover of $ 209 billion in 2000-01. The group, founded in 1954, was into the textile (yarns, fabrics and garments), paper/paperboards and tyre (rubber tyres and tubes) businesses. While Govind Rubber Ltd. (GRL) was into the auto and bicycle tyres and tubes business, Balkrishna Industries Ltd. (BIL) was into the manufacturing of paperboards, tyres/tubes and synthetics. Siyaram's businesses comprised fabrics and readymade garments. Its popular brands included Oxemberg (shirts, trousers and jeans) and J.Hampstead (wool fabric). Siyaram was incorporated in June 1978 as a private limited company and was converted into a public limited company in 1980. Siyaram Finance, its subsidiary, was into the financial services business. Siyaram manufactured and marketed textiles, cotton, woollen synthetics and synthetic blends the main product being polyester blended worsted2 fabrics. In July 1993, Siyaram came out with a Rs 153 million rights issue to part-finance a Rs 165 million expansion-cum-modernization project. While the family held 23% of the Rs 51 million equity, foreign collaborators, financial investors and the public held 26%, 22% and 8% respectively. Siyaram had a strong presence in the lower and medium segment of the domestic suitings market. The company had three manufacturing plants situated at Thane and Raigad in Maharashtra and Silvassa in the union territory of Dadra & Nagar Haveli, producing over 27.5 million meters of fabrics annually. Siyaram had a 4% market share in the Rs 50 billion suitings and shirtings market.

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The other players included Vimal, Mayur, Raymond, Digjam, Gwalior and Reid & Taylor etc. Siyaram retailed its products through 25 exclusive showrooms, besides its distributor network of about 400 wholesale dealers and 50,000 retailers across the country. (The number of exclusive showrooms was to be increased to 75 by August, 2002.) The company also exported its products to Europe, South America, South Africa, the Far East and the Gulf countries. Siyaram's sales increased from Rs 20 million in 1978 to Rs 3252.6 million in 2000-01. Siyaram was one of the few non-FMCG companies in India that was known for its lavish advertisements. The 'Coming Home To Siyaram' campaign was reported to be one of Indian advertising's costliest campaigns. The 'Coming Home To Siyaram' advertisements were much talked about for being of much longer duration than the usual advertisements, and also for the huge budgets Siyaram set aside for them. The company believed that good commercials helped it to effectively position its suitings on a global platform. Siyaram officials said the company's focus on marketing was responsible to a great extent for its growth over the years. Percept had conceptualized the 'Coming Home to Siyaram' campaign in the early 1990s. Over the years, the campaign established the brand's association with 'true love for the motherland,' by showing successful men maintaining lasting, strong ties with their families. Analysts commented that the campaign was largely responsible for Siyaram's high brand recall and positive consumer feedback. As part of its brand-building initiatives, Siyaram also organized major sporting events like the triangular cricket series Siyaram's Cup, 1997 and Siyaram's Celebrity Soccer 1998. The company also held Siyaram fabric shows, aimed at increasing awareness among its target audience about the company's range of products. For 2001-02, Siyaram had increased its advertising and promotion budget to Rs 300 million from the 2000-01 level of Rs 200 million. The J.Hampstead Story J.Hampstead was a very popular suiting brand in Europe, renowned for its premium 100% wool suitings woven from rich natural fibers like merino wool, cashmere and woolsilk. In 1995, Siyaram tied up with J.Hampstead for marketing its suitings in India. The company imported the fabric from Italy. It was priced in the range of Rs 1,500-1,600 per meter. In September 1997, Siyaram decided to begin manufacturing the brand at its plants with technical assistance from J.Hampstead. 64

The product was slightly different from the imported version and was priced in the range of Rs 275-1000 per meter. Explaining the reason for the decision, Gangadhar said, "The imported J Hampstead faced two problems: that of maintenance and price. The imported product had to be dry-cleaned and steam-ironed. The Indian fabric can be hand washed." Siyaram earmarked around Rs 50 million for the marketing, sales and promotion of J Hampstead. The first phase of this promotion was in the form of commercials featuring Indian tennis superstars Leander Paes and Mahesh Bhupati. These commercials with the positioning line, 'The finest fabric in the world,' were aimed at positioning the brand in the premium segment. In September 1999, Siyaram held a tennis carnival to promote J.Hampstead, where several Hindi film stars were invited to play tennis with the brand ambassadors. Soon after, Siyaram faced problems with the tennis duo when they decided to break their partnership, reportedly due to personal problems. However, the company continued running the advertisements. Company officials justified this, claiming that the 'sport was bigger than the players.' In February 2000, Siyaram signed the South African cricket team for promoting the brand. The multi-media promotion was spread over television, satellite channels, print, outdoor and point of purchase advertising. Gangadhar said, "We have taken this opportunity to associate ourselves with the number one ranked cricket team as they will be popular in the coming series of cricket matches. And this will enable the brand to be globally focused. The idea of such a campaign is also to send the message that the product is of international quality. In India where cricket is almost a religion, these models can be easily identified by both the masses as well the classes." Siyaram had decided to use the South African team on the recommendation of Percept. Gangadhar said, "All along, the South African team had a clean image. So we had signed up the entire team and not just one individual. When they were coming to Bombay (for the match), we thought it was a very good opportunity and so decided to shoot with them for the ads." Shailendra Singh, Joint Managing Director, Percept, said, "Our brief is to project J Hampstead as a global fashion brand. It is a high fashion brand that is successful and sincere. Consciously, we thought that Hansie Cronje has a 82% success rate and nine years' experience as a captain." The advertisements featured the entire South African team wearing the J 65

Hampstead premium suitings. Within a month of the campaign being released in the national media, the Cronje controversy surfaced. Siyaram continued to run the advertisements in newspapers for a few days after the scandal broke. However, the company decided to withdraw the campaign completely soon after. Gangadhar denied that the Hampstead brand image had been affected. He said, "I have had calls from well-wishers who say that no one could have anticipated this. We do things right and in the right spirit. And if something goes wrong all we can do is make amends for it. The brand is bigger than any individual." A Percept official said, "Thankfully, the campaign was not centered on one single player but the entire team. Hence it is not so bad after all. We are also recovering from the incident." He added, "We have used multiple personalities for the ad. We have not focussed just on Cronje. It is the entire 14-member South African team that we have signed up. So, we never let the personality become the brand itself." Siyaram's strategy of opting for multiple brand endorsements seemed to have diluted the impact of the scandal on the brand. The company began working on a new series of commercials featuring the Leander/Mahesh duo, but dropped them as the brand ambassadors in October, 2000. Though company sources denied that they had given up the celebrity endorsement route for J.Hampstead, the perils of celebrity endorsement began to be seriously examined by Indian companies and advertising agencies. The Aftermath Cronje had to resign from the South African team and was barred from playing cricket ever again. In South Africa, the Spur Restaurant Chain in Johannesburg ended a multi-million grand-advertising contract with Cronje. The controversy heated up in the next few weeks, with many more Indian and international cricket players being named as parties to illegal match fixing. It was reported that the Board of Control for Cricket in India (BCCI) and the Mumbai/Dubai underworld were also involved in the scandal. There were even rumors of South Africa and India suspending diplomatic ties. The Indian companies who sponsored cricket matches and utilized cricket players as endorsers were however, reported to be unfazed by the developments. Asserting that the J.Hampstead association with sports (and cricket) would continue, Singh commented, "Let's not kill the sport for one moronic guy."

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By the end of the year, the Cronje scandal seemed to have died a natural death and cricket sponsorship by Indian corporates continued. Siyaram meanwhile, revealed its plans to achieve a turnover of Rs 4 billion for the fiscal 2001-02. J.Hampstead's contribution to the turnover was expected to rise from Rs 400 million in 1999-00 to Rs 750 million. J Hampstead, the readymade garment wear from Siyaram Silk Mills was considering productspecific campaigns shortly after. The purpose was to support the new launches scheduled for Diwali season. The company planed to launch three-four products under the J Hampstead range. Percept Advertising was still doing the creatives. However, the company continued with the Leander Paes, Mahesh Bhupati ad. Soon the news of the Indian tennis champs separation started to become big. Now with Mahesh Bhupati and Leander Paes breaking ties, the question was will the company withdraw that particular ad too? Percept's joint managing director Shailendra Singh said: ``Even as they have disassociated themselves, we don't see any reason as to why we will withdraw this particular ad. It is a matter of associating ourselves with the game of tennis.'' In September 2001, the company launched a new campaign for J.Hampstead, with the new baseline 'One World One Fabric.' The campaign did not feature any sport or celebrity. Instead, international models were featured to reinforce the fabric's global appeal. Media analysts were quick to point out that having learnt its lessons from the Leander/Bhupati and Cronje issues, Siyaram was deliberately trying to 'play it safe' this time around by avoiding celebrity endorsements for J.Hampstead. The Celebrity Endorsement Issue: Celebrity endorsements began way back in the 19th century with UK's Queen Victoria endorsing Cadbury's Cocoa. Using celebrities for promotion has been a common marketing communications strategy, practiced globally. Marketers believe celebrity endorsers are more effective than non-celebrity endorsers in generating actual sales from the customers, and positively influence the consumption of the products they are associated with. The fact that celebrities remain in constant media focus helps create high recall rates for the commercials that feature them.

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Their attractive qualities are transferred to the product being promoted. Some of the main reasons for companies using celebrity endorsers are given in the following table. Celebrity advertisements stand out amidst the other advertisements They facilitate attention getting Celebrity values define and refresh the brand image Celebrities add new dimensions to the brand image Celebrities give the brand instant credibility The use of celebrities gives the brand enhanced PR coverage The use of celebrities make it easier for the agencies to convince clients about the campaign's success However, selecting the right celebrity endorsers is usually a tough task. A wrong choice can ruin the image of a brand. The acceptance of an advertisement message is largely determined by the attractiveness of the celebrity presenting the message. Also, the message conveyed by the celebrity must match the product message. Relevance is a very important factor in celebrity endorsements. If there is very little fit between the celebrity and the brand personae, the advertisement could prove counter-productive. Interestingly, the selection of Hansie Cronje for J.Hampstead was criticized on these very grounds by an executive from the advertising agency Ogilvy & Mather. He said, "Cronje is such a casual chap and he looks so awkward and uncomfortable in a suit." The man behind the popular Pepsi ads, filmmaker Prahlad Kakkar said, "J Hampstead is a perfect example of using a celebrity without a script." Following table shows the celebrity selection criterias which must be followed. Celebrity availability Celebrity physical attractiveness Celebrity credibility Celebrity prior endorsements Whether celebrity is a brand user Fit with the advertising idea Celebrity-Target audience match Celebrity values Costs of acquiring the celebrity Celebrity-Product match 68

Celebrity profession Celebrity popularity

Celebrity controversy risk

In India, celebrity endorsements are believed to be particularly useful as the average consumer reportedly identifies more strongly with celebrities than in other countries. Film stars and sports personalities (especially cricket players) are immensely popular among the masses. This has encouraged the widespread use of celebrities in advertisements over the decades. The Lux Story is famous in the world of bran endorsement. The Lux Soap in its 75 yrs journey as a product always used a Film Celebrity to promote the product with the most catchy lines Lux meri Khubsurti Ka raaj. They used a huge number of celebrities from the beginning to promote their product & in their 75 years celebration advertisement campaign; they used SRK as the main endorser who has said the famous Lux mera Khubsurti ka raaj along with Hema Malini, Sridevi & Kareena Kapoor. That is the first time a male celebrity endorsed a female product in India. A popular star can help immensely in improving brand image and recall. But the same star can cause major problems for the brand if he or she lands in trouble either in their careers or in their personal lives. Pepsi faced this problem with two of its most popular celebrity endorsers pop singers Michael Jackson and Madonna. In 1989, right after Pepsi aired the first Madonna commercial, the singer released her sexually explicit and reportedly anti-Christianity music video 'Like A Prayer' on Music Television. The video led to widespread protests against the singer and Pepsi had to pull out the advertisement after airing it just twice. Michael Jackson was signed by Pepsi in 1983 in what was the largest individual sponsorship deal in history. In 1993, Michael Jackson was charged with child abuse. Though the charges were not proved, Pepsi had to pull out of the contract after unprecedented media outrage against the brand's association with the singer. When Shahrukh Khan(SRK) promoted Emamis Fair & Handsome cream. It was highly criticized as saying that if a star with SRKs stature promote whiteness cream then actually we are advocating for racism saying black is bad & white is gold. And how SRK could endorse such products as there will be a huge impact among the masses regarding the skin colors. A 69

person must be judged by his/her qualities & not by his/her skin color. But what we basically forgot that stars get money to endorse products & we shouldnt eye washed by the advertisement & there is no point in criticizing a celebrity for endorsing product like Fair & Handsome. Shilpa Shetty was also hardly criticized for promoting alcohol. As being a celebrity she must be a responsible citizen & a responsible citizen should never promote alcohol. Celebrity branding is all right as long as the celebrity conducts himself in a good manner but if something wrong happens it will affect the image of the product also. When Salman Khan got warrant for killing endangered dear Thumbs Up has no option but to replace him. So the product and the celebrity remain good as long as both of them remain individually good. The problem of celebrity branding is also that when a particular product is known to the common people with the effect of the celebrity, it is very difficult to separate the product from the star. Like Coca-Cola - Aamir Khan, Cadbury- Amitabh Bachan, Santro-SRK. Now, if

any one of the company want to change their endorser they have to redesign the product to let out their product from the shadow of the old campaign. Another peril associated with celebrity endorsement is the 'vampire effect,' when the celebrity overshadows the brand. Also, whether the celebrity endorsing a brand actually uses the brand or not is an issue of concern. For instance, if a celebrity endorsing Pepsi is seen drinking Coke, it can reflect very badly on the brand being endorsed. Celebrity endorsements could become a 'double-edged sword' for most companies. Some brands did manage to fly high by the use of a good celebrity. Cadbury India used Amitah Bachan not only to recover their image from worm controversy but also to establish itself as the leading company in the Indian chocolate market. Aamir Khans ad campaign Thanda Matlab Cocacola was also a huge hit. Not only that the company used the superstar to come out from the pesticides controversy. Dabur brought in Amitabh Bachan in the stagnant chawanprash market. He brought back boost in market and helped Dabur to remain the market leader. Conclusion:

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So there are certain positive as well as negative points in celebrity branding in India. A producer of a product, the company, always wants to minimize the negative sides of the celebrity endorsement and maximize the positive impact.

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