Effect Of Celebrity Based Advertisements

Published Date: 02 Nov 2017

Research Project presented to

MPSTME, NMIMS

In Partial Requirement of the Fulfillment of the Degree MBA(Tech)

By:

Ankit Mehta

217

Year of graduation: 2013

TABLE OF CONTENTS

Abstract:

In the present era of information explosion and media influence, advertisements play a major role in changing the settled perception or thinking, which is otherwise called attitude, of the consumer and also the consumption pattern of the society in general. Across the world, celebrities have been used for a wide variety of brands. The crescendo of celebrities endorsing brands has been steadily increasing over the past years. Marketers overtly acknowledge the power of celebrities in influencing consumer purchase decisions. This study focuses on identifying the influence of celebrity endorsements on the purchase attitude of the consumers. It is a ubiquitously accepted fact that celebrity endorsement can bestow special attributes upon a product or service that it may have lacked otherwise.

Introduction

Advertisement plays a major role in every walk of life. The divergent sections of the society may need advertisement for a variety of reasons from information sharing to consumer persuasion to decision making. There is a potential for a direct casual link between the attitude towards an advertisement and the attitude and behavior towards a product. The feelings engendered by an advertisement can create or influence an attitude towards the advertisement directly, as well as indirectly, through assessments of the quality of the advertisement's exceptional characteristics. In fact, some researchers believe that attitude to the advertisement really has two different components; an affective one, reflecting the direct effect of the feelings evoked by the advertisement, and a second more cognitive one, reflecting how well is the advertisement made and how useful is the advertisement. It is important, in understanding how an advertisement ultimately affects consumer attitude.

Limitations of the Study

Due to time constraint, the study is confined to Mumbai city only. The study has been conducted based on the responses of the selected respondents of Mumbai city. Hence the inferences, findings of the analysis need not hold good totally for Mumbai city as a whole or the country at large. The study covered only select durable products. It did not include any non – durable products to limit the scope of the study.

Literature Review

Celebrity usage in advertisements is one of the topical strategies of many brands; the purpose of such usage may be for getting attention, for prolonged association, or for the purpose of recall. This study purports to consider the application of the AIDA theory. As such it proceeds to analyze the impact of celebrities in influencing the consumers to purchase the durables.

Celebrity Endorsements act as a credible means of spending money. This is because this is a world of products for which the value a consumer obtains from purchasing any given variety. This could be for reasons of social standing-People want to wear the "right" clothes, drink the "right" beverages and use the "right" fragrances. Specifically a consumer that observes messages for two different firm’s products, one product’s message containing a celebrity endorsed and the other not, believes the celebrity endorsed product will have more purchases and so be of higher value. (Clark & Horstman, 2003) Celebrity endorsement is more likely to be observed for those products having a high price-production cost margin and on a large customer base. In short, celebrity endorsements are more typical for nationally marketed products then for local or niche market products and for products such as running shoes, soft drinks and the like for which the price cost margins are apparently large.

The concern of marketing today is that, whether celebrity endorsement affects consumer brand attitudes or not. Madhurkar Sabnavis, Country Manager- Discovery O & M points out that multiple endorsements affect the endorser creditability as people known that a celebrity is paid to sell the product. The endorsements of as many as four products negatively influence the celebrity spokesperson’s credibility (expertise trustworthiness) and likeability. Reasons may be found in the lack of distinctiveness, with one famous person enduring several products instead of concentrating on and representing one specific brand. On the other hand, research has suggested that celebrity endorsed has potential positive effect like transfer of positive brand images and shaping of consumer’s response when more than four products are endorsed.

Brand Endorsement is a way to get the brand noticed amidst the clutter that is there in the market place. Synergy is therefore required between brand and celebrity. The celebrity actually helps in accelerating the brand image formulation process. At the same time advertisement argue that celebrities come with loads of liabilities that are hard to ignore. The decision of selecting the best endorser is thus a pertinent issue fixed by marketers and adventures for their brand promotion. In other words, the celebrity himself/herself should be a strong brand and the attributes of the celebrity brand should match the attribute of the product brand being highlighted.

Advertisers often select endorsers as a promotional strategy to communicate the attributes of their product or brand. Today, this advertising approach appeared to be on the increase across all media types (Sherman, 1985 and Levin, 1988). The study from H. Friedman and L. Friedman (1979) defined that celebrity endorser is an individual who is known to the public (actor, sports figure, entertainer, etc) for his or her achievements in areas other than that of the product class endorsed.

The study of Perception of Advertising and Celebrity Endorsement shows that using a well-known celebrity as an endorser could help to improve the subjects‟ rating of the commercial. Therefore, it is advisable for companies to consider using a well-known celebrity as an endorser rather than nameless spokesperson. However, the advertising practitioner should also recognize that the use of a well-known personality, who can create initial interest and attention for an advertisement, does not necessarily result in attitude changes towards the product. As well, the study from Till and Busler(1998) presents evidence that positive feelings towards advertising and products do not necessarily translate into actual behavior or purchase intentions. A possible reason mentioned from the study (Baker and Churchill 1977) is that celebrity endorsement seems to work on the cognitive and affective components of attitudes rather than the behavioral components. Furthermore, the Debevec and Keman (1984) found that attractive female models generated more enhanced attitudes than attractive male models across both genders, but particularly among males.

The study of cultural effects on celebrity endorsement (Grant McCracken 1989) conducts that the attractiveness and credibility of celebrity is not the identical measurement that makes endorsement work. It indicates that celebrities are highly individualized and complex bundles of cultural meaning, which could be transferred from the celebrity to the product and from the product to the consumer. This result is consistent with the previous study regarding perception of advertising and celebrity endorsement. It also concludes that the credibility of celebrities is significantly different among different ethnic groups. Selecting the appropriate celebrity is important to enhance the credibility of the advertisement.

Another study conducted on endorser effectiveness by product type (H. Friedman and L. Friedman 1979) confirms that celebrity endorser does not impact a high- priced image to the product. Regardless of the type of product, the celebrity endorser is most effective in sustaining brand name and recall of the advertisement. Thus, if brand name and advertisement recall are most desirable, advertisers should use a celebrity as an endorser.

In addition, multiple product endorsements weaken the effects of celebrity to the product (Carolyn Tripp and Thomas D. Jensen 1994). The study concludes that the number of products a celebrity endorses, apart from the number of exposures to the celebrity endorser, negatively influences consumer perceptions of the endorser and advertising itself. It suggests that as many as four products, the endorsed celebrity credibility and likeability, as well as attitude toward the ad, may attenuate.

Taking cue from the above study, the present study is initiated and is exploratory in nature. It attempts to evaluate the influence of celebrities on the buyer behavioral pattern of consumers and their purchase decision in Mumbai over durable products.

Theory of Celebrity Endorsement

Grant McCracken has explained in his Meaning Transfer Theory. The theory explains that a celebrity encodes a unique set of meanings which if well used can be transferred to the endorsed product. Such a transfer takes place in three stages – encoding meanings, meaning transfer, meaning capture

I. Encoding Meanings: Each celebrity has a unique set of meanings, which can be listed by age, gender, race, wealth, personality or lifestyle. In this way, the celebrities encode a set of meanings in their image. For example Preity Zinta can be seen as a lively, charming, bubbly, witty and enthusiastic. 



II. Meaning Transfer: This stage transfers those meanings to the product. When skillfully portrayed, celebrities can communicate this image more powerfully than lay endorsers.

III. Meaning Capture: This assumes that consumers purchase products not merely for their functional value but also for their cultural and symbolic value. The theory says that consumers buy the endorsed product with the intention of capturing some of the desirable meanings with which celebrities have passed on to the product. This is more eminent in lifestyle products like clothes, perfumes, cell phones etc.

Commerce_IMPACT_OF_CELEBRITY_ENDORSEMENTS1.jpg

Impact of Celebrity endorsement

Celebrity target audience - Smriti Irani endorsing the WHO recommended ORS Campaign in India

Celebrity Values - Tabu endorsing Tetra Packed Milk, Shabana Azmi campaigning for AIDS awareness, Amitabh Bachchan & Shahrukh Khan campaigning for Pulse Polio

Costs of Acquiring the Celebrity - Sachin Tendulkar’s price is between Rs. 2.0-2.5 crores per endorsement. Shahrukh Khan’s between Rs. 2.5-3.0 crores. Aishwarya Rai Rs. 1.25 crores. Aamir Khan Rs. 1.5 crores

Celebrity Regional Appeal Factors - R. Madhavan endorsing Pepsi in southern India or Sachin Tendulkar endorsing in India, Roger Federer for Rolex world wide are few examples of how celebrities are chosen to reach out to target audiences for brands in regional markets.

Celebrity-Product Match - Cyrus Broacha is the brand ambassador for MTV. Aishwarya Rai & Nakshatra.

Celebrity Popularity – Celebrity Brand association like Garnier endorsed Tara Sharma & Simone Singh, Agni Diamonds & Riama Sen don’t get much brand recall

Celebrity Controversy Risk – Salman Khan car crash incident

Celebrity Physical Attractiveness - John Abraham endorsing Wrangler and Timex Sunglasses are some examples which portray the celebrities’ physical attractiveness that helps create an impact

Celebrity Credibility - The most important aspect and reason for celebrity endorsement is credibility. In a research carried out among 43 ad agencies and companies, most experts believed that the most important dimensions of credibility are trustworthiness and prowess or expertise with regard to the recommended product or service.

Example - After the worm controversy, Amitabh Bachchan’s credibility infused into the brand through the campaign, helping it to get back on track. The campaign has won an award for the same.

Multiple Endorsement - Not many people can remember all the brands that a celebrity endorses and the chances of losing brand recall increases if the celebrity endorses multiple brands. For example, in case of Sachin Tendulkar people recall Pepsi, TVS Victor and MRF, but might not remember brands like Britannia and Fiat. Similarly, for Amitabh Bachchan, consumers remember ICICI, Pepsi, Parker Pens, Pulse Polio and BPL

Advantages and Disadvantages of Celebrity endorsements

Advantages

Increased attention

Image polishing

Brand introduction

Brand repositioning

Disadvantages

Overshadow the brand

Public controversy

Image change and overexposure

Loss of public recognition

Expensive

The questions that then arise are: 


1. What is the consumers‟ attitude towards celebrity endorsed advertisements?

2. What effects does celebrity endorsed advertisements pertaining to durable products have on consumers‟ purchase attitude?

This study is focused on the following objectives:

To identify the factors that motivates and affects the purchase attitude of
consumers at Mumbai.

To analyze factors which influence the purchase attitude of consumers at 
Mumbai.

To assess the extent of influence created by celebrity endorsed 
advertisements for consumer durables and to ascertain the consumer responses.

Research Methodology

For further study on this research paper, I have taken a survey of a group of people from Mumbai. I will make a survey form on the topics below. The respondents will be asked to evaluate the survey questions on a scale of 5. On the basis of their reply I will find out the conclusion of each topic.

A) Product Information Enhancement Through Celebrity Endorsement

B) Motivating Factors

C) Influence of Celebrity Endorsement

D) Influence of Celebrity Endorsed Product on Purchase

E) Purchase Attitude Change

A. Product Information Enhancement Through Celebrity Endorsement

Advertisement creates awareness about the product

Celebrity endorsed ad captures the consumers attention

Celebrity endorsed ad creates a long lasting impact in the consumers mind.

Words of endorsement about the product from a favorite celebrity is accepted as testimonial by the consumers

Information about a product from a celebrity reinforces its credibility

Consumers have a better brand recall at point of purchase when celebrities are present in the ad

B. Motivating Factors

Need

Price

Product utility

Product appearance

Celebrity’s convincing endorsement

Life style

Peer group

Financial credit

Offers during season

Esteem in ownership

C. Influence of Celebrity Endorsement

Favorite celebrity’s presence in ad

Celebrity’s vouching of the product’s features and quality

Convincing factor of the price comfort zone of the product

Overall impact on the ad due to celebrity’s presence

Ad induces purchase attention

Edge over the competing brand of the product

D. Influence of Celebrity Endorsed Product on Purchase

Cars

Washing machines

Air conditioners

Televisions

Mobiles

DTH service

Soaps and shampoo

Cosmetics

E. Purchase Attitude Change

Satisfied feel of the right choice of the product after endorsed by a celebrity

Truth in testimonials given through endorsements

Celebrity endorsed ads creates better brand recognition

Celebrity based ads carry more weightage

The depth of celebrity endorsement for a product gives way to make the best choice among the existing alternatives

Celebrity endorsed product enhances quality assurance

Source of Primary Data

The primary data for this research paper has been obtained through an online survey that was conducted via a google docs survey form. The data was then afterwards tabulated and converted into pie charts for an easier analysis of the results. This online form was disseminated through channels such as email, facebook, etc.

A hard copy format of this survey was then distributed to an older range of respondents via printed survey materials. The questionnaire is attached as Appendix.

Analysis of Primary Data

Product Information Enhancement Through Celebrity Endorsement

The questions from the survey that fall under this category are: -

Celebrity endorsed advertisement captures your attention?

Major(62%) respondents agree that celebrity endorsement captures their attention. This is a very positive response for the advertisers.

You have a better brand recall at the point of purchase when celebrities are present in the advertisements.

Major(61%) respondents agree that they have a better brand recall at the time of purchasing the actual product.

Words of endorsement about a durable product from favorite celebrity is accepted easily by you?

It can be concluded that the respondents moderately agree that the celebrities are favorite in their advertisements and such advertisements create awareness about the durables. Apart from this, the study also discloses that celebrity endorsed advertisements create a lasting impact in consumers‟ minds, considering such endorsements as a testimonial for the products, re-inforcing the product credibility and leading to better brand recall at the point of purchase.

B) Motivating Factors

The questions from the survey that fall under this category are: -

Price comparison becomes less necessary when a celebrity endorses to the quality of products.

73% of the respondants disagree to the above question. This implies that price still remains an important factor to the product. Even if the best celebrity is endorsingthe product price still remains the dominant factor.

A product that is endorsed by a celebrity must be better than other brands.

61% of the respondants disagree that the product that is endorsed by a celebrity is better than other brands. This means the public does their research and buy the product, they do not blindly follow the endorsee’s words.

C) Influence of Celebrity Endorsement

The presence of a celebrity in an advertisement is likely to be influential in the purchase of a product. To this extent, a favorable celebrity’s presence and convincing testimonial given by such a celebrity may persuade the consumer to purchase the product.

The questions from the survey that fall under this category are: -

If your favorite celebrity is endorsing the product, you will be tempted to try that product.

49% agree that they will be tempted to try the product and only 23% disagree. This is a favorable reply for the sellers. Celebrity endorsed advertisement create an overall impact by inducing a purchase intention ultimately convincing the durable’s promising performance,

After I see a celebrity using a product, i feel that my current products is not performing as good as the product which is endorsed by the celebrity

57% of the respondents disagree to the above question. This implies that crowd is not provoked to purchase just because the celebrity is endorsing a similar product.

D) Influence of Celebrity Endorsed Product on Purchase

An advertisement with a celebrity endorsement is likely to be one of the factors that persuade a consumer to purchase a product. Taking into account the five durables, which have been considered for the purpose of the study, the degree of influence of celebrity on the durable product is measured by this question

Which products are most influenced by celebrity endorsements?

According to the analysis, it has been found that celebrity endorsement for mobiles and cars are highly influential. As far as washing machines, air conditioners, televisions and DTH services are concerned, they register only moderate significance.

E) Purchase Attitude Change

Products that were advertised earlier without a celebrity endorsement definitely will show a change in the consumer’s mindset if the product were to be endorsed by a celebrity. This obviously will show its impact through a change in the purchase attitude of the consumer.

The questions from the survey that fall under this category are: -

Although my current product is working properly, celebrity endorsements guide me to start looking for a new product.

34% of the respondants agree vs 36% disgree, I feel 34% agree is a very positive response for this question. This means that celebrities help the public to follow a new trend in durable products.

When I see a celebrity using a product, I tend to compare them with my current product.

The response of agree and disagree is same (40%).

Findings of the Study

a) Celebrity endorsement enhances product information and creates awareness among consumers. It helps them to recall the brands of the durable products.

b) The consumers of durable products have their motivational sources from need and product utility. The study revealed that the celebrity’s convincing endorsement motivates them to materialize the purchase of durables.

c) The consumers are induced significantly by the celebrity endorser when the target is on quality and price.

d) The purchase attitude is influenced by the celebrity endorsement factors, product evaluation and brand recognition.

Conclusion

The world of today is changing fast. India is no exception. Especially after the opening up of the economy, the pace of change that India and its people are experiencing in their socio-cultural milieu is mind-boggling. India, with its wide diversity, offers a fascinating scope to study the host of changes, which developmental activities have brought about in its social and economical framework. While it is possible to get some estimates of the macro changes taking place in India, it is impossible to get any accurate measures of the subjective experiences that proceed, accompany or follow such changes. However, the fact remains that the profile of the Indian market is vastly different from what it was earlier. Although these changes are difficult to measure at the micro level, nevertheless, they have been of great significance to marketers. Any marketer is keen in closely monitoring the changes in terms of numbers and specially keeping regular track of the changing pattern of consumers‟ aspirations and competitive actions.

Recommendation for advertising industry

Rather than focus on providing entertainment and humor, we should shift some of our efforts to provide an educational platform for consumers. Educate the audience about the specific personal benefits provided by your products. Or, educate the audience about critical factors in your industry and authentically associate your brand with that platform. Look at what Apple has done with its Genius Bar. By helping its customers more effectively use Apple products, it empowered brand ambassadors. Few emotions are more influential than empowerment. It has directly created loyalty, brand differentiation and increased revenue. To create an educational platform, look at the problem that your products solve then look at the holistic experience for consumers when faced with that problem to find an opportunity for educating your audience with authenticity.

Questionnaire

Survey on the effects of Celebrity Based Advertisements on the Purchase Attitude of Consumers towards Durable Products (cars, washing machine, television, etc).

* Required

Which products are most influenced by celebrity endorsements *

Cars

Washing Machine

Air conditioners

Televisions

Mobiles

DTH service

Celebrity endorsed advertisement captures your attention? *

Strongly Agree

Agree

Not Sure

Disagree

Strongly Disagree

If your favorite celebrity is endorsing the product, you will be tempted to try that product. *

Strongly Agree

Agree

Not Sure

Disagree

Strongly Disagree

When i see a celebrity using a product, i tend to compare them with my current product. *

Strongly Agree

Agree

Not Sure

Disagree

Strongly Disagree

After i see a celebrity using a product, i feel that my current products is not performing as good as the product which is endorsed by the celebrity *

Strongly Agree

Agree

Not Sure

Disagree

Strongly Disagree

You have a better brand recall at the point of purchase when celebrities are present in the advertisements. *

Strongly Agree

Agree

Not Sure

Disagree

Strongly Disagree

Words of endorsement about a durable product from favorite celebrity are accepted easily by you? *

Strongly Agree

Agree

Not Sure

Disagree

Strongly Disagree

Although my current product is working properly, celebrity endorsements guide me to start looking for a new product. *

Strongly Agree

Agree

Not Sure

Disagree

Strongly Disagree

Price comparison becomes less necessary when a celebrity endorses to the quality of products. *

Strongly Agree

Agree

Not Sure

Disagree

Strongly Disagree

A product that is endorsed by a celebrity must be better than other brands. *

Strongly Agree

Agree

Not Sure

Disagree

Strongly Disagree