Impact Of Celebrity Endorsement On Consumer Purchase Intention Marketing Essay

Published Date: 23 Mar 2015

Celebrity endorsement has become a modern day staple of advertisement strategies, used to create distinctive competencies in increasingly competitive industries. This is especially the case with the telecom sector of Pakistan, which is one of the country's most profitable industries and thus the level of competition is fierce and companies often resort to celebrity endorsement to impact consumer purchase intention. This research study aims to study the nature of the relationship between celebrity endorsement variables and purchase intention.

The use of previous studies in this field has created a common set of variables that combine to form the celebrity endorsement factor and as such these variables have been extracted from the literature review. The identified variables are: 'image-fit', 'brand recognition', 'likeability', 'trustworthiness' and 'attractiveness'.

The research primarily used a quantitative method for analysis as the author wanted the results to be less subject to the author's own intuition and thus his own bias. This analysis was obtained from questionnaires and formed the basis of the data used to regress the variables with each other.

Overall, the regression and cross tabulation results concluded that all five variables had a significant impact on purchase intention with 'brand recognition' and 'trustworthiness' being given the highest value by consumers in terms of affecting their purchase intention.

Acknowledgements

I would like to express my gratitude to all those who helped me during the whole of my project. I gratefully acknowledge the help of my supervisor, Professor Fareedy who has offered me invaluable advice throughout the project. He has spent time and energy to aid in the completion of this project and none of this would have been possible without his patient instructions, insightful criticisms and expert guidance.

I would also acknowledge the enormous support and advice received from my dear friend, Ammar Hameed, without whom this thesis would not have been of the quality that it is now.

Table of Contents

Chapter I: Overview

Introduction

Advertisement plays a vital role in the economy; it is the foundation upon which this fast paced world learns what's new and available. To sell a product in the competitive global market has become a challenging task. Homogenous products and brands make it difficult to choose from. Minor tweaks in design and voila a new product is ready for the shelves.

However advertisement is major difference between the brands and their products and services. In order to survive in this trade, companies require sales to increase which would establish a label for the company seemingly creates a sense of belonging between the consumer and the product. This sense of belonging is awakened in the hearts of the purchasers by going along with celebrity endorsements where consumers can relate to their favorite celebrity that leads on to influencing demand for that brand's product or service.

When relating to celebrities, it is vital that companies choose celebrities who are up in the popular rating hence strengthening the scope of accomplishment in gaining market share for the particular brand, product or a service. It can be said that the popularity and the association of the celebrity with the brand has a direct relationship. As the popularity level goes up, so does the image of the brand in question.

The basic idea of the endorsement is quite simple. General consensus is that people like celebrities, if those celebrities say that they like a product or a service naturally people will like what they like. It is as if by magic celebrities transfer their popularity from themselves to the products. Endorsement also might symbolize quality or any other related virtue. In order to sell a product we need to advertise and what could be better than to advertise on the shoulders of already successful sales i.e. celebrities.

It is thus that this research project seeks to understand the how celebrities, and specifically their attributes affect, both positively and negatively, the purchase intention of the consumers and hence the title: Impact of celebrity endorser's attributes on consumer purchase intention

Background

The history of celebrity endorsement of products dates back to the 1760s. Josiah Wedgwood, the founder of the Wedgwood brand of pottery and chinaware, also called the father of the modern brand '; he used royal endorsements with regard to his brand to create a sense of aura and position the brand in such a way as to exceed its value in comparison to the value created by the product and services offered. The cigarette industry signed on entertainment personalities and used them in its ads in 1905.

Since radio became commercial in the late 20s and the invention of TV screens in the 40s, celebrities have done commercials. Western culture has always flocked to the notion of a 'celebrity driven' culture; whereby celebrities dictate the trends of the post-modern materialistic culture. Endorsements help the companies to gain strength in the market in order to be part of the consumers' purchase basket. By doing so, sunrise companies prosper and develop into bug giants. Celebrities have a growing interest of the consumer population hence that image and aura is used in relation to a brand to influence the purchase decisions of people all around. This mechanism allows for change in tastes and interests with regard to the celebrity endorsement.

Aristotle once said, "Any brand can get a celebrity that is easy; but getting a celebrity consistent with the right brand to the right degree at the right time for the right purpose and in the right way; that is not easy.

Significance of the Study

The usage of famous ambassadors or celebrities in the department of marketing intervention and communications is growing since the late 1970's and has exalted to a percentage of nearly 25% at the end of the 1990's. Some researches show a positive direct economic effect of these famous endorsements despite they are very expensive. It ought to be of greath worth to the companies to know what product/brand goes with which celebrity in light of the expected outcome. Celebrity endorsements amount to millions of dollars in investments and the investment has to be on the mark to produce fruitful results. However to ensure soundness of the investment, appropriate time and money is alloted to the marketing department to match the product with the celebrity keeping in view the popularity ranking of the celebrity in question with forecasted predictions of his/her future public stance. This research measures the "Impact of celebrity endorser's attributes on consumer purchase intention" to keep a check on the consumer's behavior patterns in relation to the associated celebrity endorsement. However, Although, marketing strategies if well directed could improve the message getting across thus creating a suitable link between the brand and the celebrity. In light of this, the planning process of the message and the brand equity management should cater to the celebrity appropriately.

The research itself would focus on Lowe & Rauf's client, Nestle and how celebrity endorsements affect consumer purchase behavior and brand equity for milk. The milk industry in Pakistan is an ever growing industry with multiple competitors and multiple ad agencies vying to create effective communication channels for these brands. Milkpak for the first time in Pakistan is not the market leader and as such the use of celebrity endorsement is an effective way of readdressing that balance.

Time Frame

The time frame for this research project is 5 months, starting from August and ending in December.

Research Proposal Submission (August 2012)

Revisions to Proposal (1st September 2012)

Literature Review (1st September 2012)

Hypothesis Generation (1st September 2012)

Theoretical Framework (1st September 2012)

Methodology (1st September 2012)

Data Collection (22nd September 2012)

Data Compilation (6th October 2012)

Data Analysis (13th October 2012)

Results and Findings (20th October 2012)

Final Submission (3rd November 30th 2012)

Resources

Zakria Fawad (Account Manager, Nestle) served as the primary source of reference as he handles the Nestle and Stylo accounts within the firm.

Prior case studies generated by Lowe and Rauf also served to help gather further information of the research topic and as such was a useful resource.

The GM, Anwar Kabir, was the secondary source of information, providing further insight as to the workings of the firm at a macro level.

Chapter II: Lowe & Rauf

Lowe & Rauf

Lowe & Rauf, Pakistan is an affiliate of Lowe and Partners international, which itself is a unit of Interpublic Group, one of the four biggest advertisement companies in the world.

Situated in Karachi, Lowe & Rauf firsts established itself in Pakistan in 1951 as an in-house agency of Unilever and gradually morphed into an independent company after a decade. This new independent company was called R-Lintas and was headed by Mr. Rauf who saw it grow and morph into one of the key players in Pakistan's advertising industry.

In the mid '90s, R-Lintas opened its doors to the Lahore market as well and has been thriving ever since in the city, creating many memorable campagins for some of the largest players in the industry, including but not limited to: Lux, Dalda, Nestle, Unilever Foods, Unilever Non Foods.

In 2003, R-Lintas was taken over by Lowe and Partners International and was changed to Lowe & Rauf Pakistan ever since with a new philosophy that focuses on fusing local ideas into everyday products that is known in its offices as, "Populist Creativity".

Mission Statement: Populist Creativity - engage the many not the few to achieve top client satisfaction

Vision Statement: To create the most significant, cultural and profitable IMCs in Pakistan

Clients: Surf Excel, Walls, Nestle (all products), Mitchells, Rexona, Knorr, GFC fans and Stylo shoes. The Lahore office specifically caters to Nestle, GFC, Mitchells and Stylo.

The most famous campaigns include:

'Kha Badami' for Walls

'Daagh tau achay hotay hain' for Surf Excel

'Commander Safeguard' for Safeguard

'Rio Biscuits from Rio' for Peak Freans

Goals & Objectives (2012)

Continuous and stringent current client satisfaction for the next 3 years

Develop effective communication channels with current client affiliates

Increase research into changing consumer expectations based on the past 5 years

Build and sustain corporate relationship with overseas subsidiaries

Create IMC programs that consistently challenge, innovate and surprise

Attract top industry clients whose contract terms with rivals are about to be expired

IMC Services Offered

IMC Strategy Formulation

TVC Campaign Planning, Creation & Execution

Print Media Campaign Planning, Creation & Execution

Digital Media Campaign Planning, Creation & Execution

Media Production

Media Buying

Public Relations Strategy & Press Releases

Market Research

Organizational Structure

The Interpublic Group of Companies sits at the top of the chart with Lowe & Partners followed by the local agency, Lowe & Rauf, within Lowe & Rauf, the Lahore office and the Karachi office function independently, with differing clientele. The Karachi office has eight different departments which include: Account Service, Account Planning, Creative, Finance, Media Buying, Production, Human Resource and Research. The Lahore office shares these resources for some functions, while running independently for others and thus it has smaller set of departments. It has a separate, Account Service, Creative, Media Buying and Production department, while the rest are shared with the Karachi office.

Organizational Chart

[Source: Lowe & Rauf, Pakistan (2012). Organizational Structure, People & Procedures Manual, pp. 3]

Functional Departments

Account Service Department: This department acts as a liaison between the agency and the client. It is responsible for maintaining the client portfolio along with working with the creative department and the client to ensure that information flows smoothly and to maintain a good working relationship with the client so that future work can also be brought in. The account services department, typically the account executive works to create a creative brief, which forms as the basis upon which the creative department comes up with ideas.

Account Planning Department: The role of the account planning department is fundamentally to formulate a strategy that will drive all campaign objectives forward in a manner that is consistent with the agency's goals as well as the client's needs and the consumer perception of the brand in question. It is thus the most important department in the agency. Account planners frequently work with the research department because it is based on the information provided by the research team that they form their strategy and plans.

Creative Department: The creative department is responsible for coming up with ideas for all campaigns. They use the creative brief provided by the account service department and use that to create print and TVC advertisements. The concepts created by this department are related back to the account service department which shows them to the client for approval. Often creative need to come up with multiple concepts because clients can be finicky and choosy.

Media Production Department: The media production department is responsible for producing the TVC or print idea that the creative department has come up with. Once the final idea for the advertisement has been approved by the client, this department works with the creative department to create the advertisement so that a final form can be aired on television or published in newspapers, magazines etc.

Media Buying Department: The media buyers use their sources and contacts to purchase advertising space wherever required at the cheapest rate possible. It is thus important to have a very low turnover rate within this department as one of the major ways through which lower rates are gained are through the media buyers' contacts. These people also need to be aware of costs with regards to different locations, timings special occasions so that they can act upon it quickly, before the competition.

Human Resource Department: The Human Resource Department, like any HR dept. at any organization is responsible for the planning and managing of personnel within the organization. This department mostly uses internet and websites to satisfy personnel needs, however sometimes newspaper advertisements might also be used.

Market Research Department: The market research department is constantly in contact with consumers of different clients to understand how, when and why are consumer perceptions changing with regards to new campaigns and changes to brand. They also track brand health and measure equity if the client desires.

Finance Department: Like with any other organization, the finance department controls all costs and cash associated with the firm at all levels.

Market Strategy and USP

Lowe & Rauf follow a differentiation strategy in that their services are slightly expensive than most of the competition, however they make up for it by providing efficient services, that are uniquely creative as well as the fact that they are one of the fastest agencies in terms of creating campaigns.

That is their major differentiating factor as well as the fact that they are highly experienced in FMCG goods and have a very successful portfolio with Surf Excel, Walls, Nestle, etc.

USP: Their unique selling proposition is the fact that they can create 'uniquely creative' advertisement campaigns within 10 days.

Financial Statements

Lowe & Rauf Income Statement

 

2009

2010

Sales

Rs. 22,145,385

Rs. 37,275,400

Direct Cost of Sales

0

0

Other Production Expenses

0

0

Total Cost of Sales

0

0

 

 

 

Gross Margin

22,145,385

37,275,400

Gross Margin %

100.00%

100.00%

Expenses

 

 

Payroll

9,965,423

16,773,930

Sales and Marketing and Other Expenses

3,321,808

5,591,310

Depreciation

0

0

Leased Equipment

0

0

Utilities

110,000

110,000

Insurance

0

0

Rent

1,110,000

1,110,000

Payroll Taxes

1,494,813

2,516,090

Other

0

0

 

 

 

Total Operating Expenses

16,002,044

26,101,330

 

 

 

Profit Before Interest and Taxes

6,143,341

11,174,071

EBITDA

6,143,341

11,174,071

Interest Expense

491,467

893,926

Taxes Incurred

1,535,835

2,793,518

 

 

 

Net Profit

4,116,038

7,486,627

Net Profit/Sales

18.59%

20.08%

[Source: Lowe & Rauf, Pakistan (2012). Financial Statements, People, & Procedures Manual, pp. 17]

Lowe & Rauf Cash Flow Statement

 

2009

2010

Cash Received

 

 

 

 

 

Cash from Operations

 

 

Cash Sales

5,536,346

9,318,850

Cash from Receivables

15,501,770

26,092,780

Subtotal Cash Received

21,038,116

35,411,630

 

 

 

Expenditures

 

 

 

 

 

Expenditures from Operations

 

 

Cash Spending

10,939,820

18,414,048

Bill Payments

5,890,672

9,915,256

Subtotal Spent on Operations

16,830,493

28,329,304

 

 

 

Additional Cash Spent

 

 

Long-term Liabilities Principal Repayment

2,100,000

2,100,000

Purchase Other Current Assets

0

0

Purchase Long-term Assets

0

0

Subtotal Cash Spent

18,930,493

30,429,304

 

 

 

Net Cash Flow

2,107,623

4,982,326

Cash Balance

10,522,869

15,505,195

[Source: Lowe & Rauf, Pakistan (2012). Financial Statements, People, & Procedures Manual, pp. 18]

Lowe & Rauf Balance Sheet

 

2009

2010

Assets

 

 

Current Assets

 

 

Cash

10,522,869

15,505,195

Accounts Receivable

5,787,578

8,527,857

Other Current Assets

1,331,100

1,331,100

Total Current Assets

17,641,547

25,364,152

 

 

 

Total Long-term Assets

0

0

Total Assets

17,641,547

25,364,152

 

 

 

Liabilities and Capital

 

 

 

 

 

Current Liabilities

 

 

Accounts Payable

1,157,516

1,705,571

Current Borrowing

0

0

Other Current Liabilities

0

0

Subtotal Current Liabilities

1,157,516

1,705,571

 

 

 

Long-term Liabilities

10,055,682

14,457,567

Total Liabilities

11,213,197

16,163,138

 

 

 

Paid-in Capital

12,700,000

12,700,000

Retained Earnings

2,155,612

-3,987,641

Earnings

4,116,038

7,486,627

Total Capital

6,428,350

9,201,014

Total Liabilities and Capital

17,641,547

25,364,152

 

 

 

Net Worth

6,428,350

9,201,014

[Source: Lowe & Rauf, Pakistan (2012). Financial Statements, People, & Procedures Manual, pp. 19]

Chapter III: Industry & Competitors

Local Industry

Pakistan's media network has gained new benchmarks as compared to yesteryears. Once being an agriculturally dominated, Pakistan has developed in this aspect. Cable and television being accessible to wherever there is electricity and road side billboards being the hub of advertisement. Be it radio, television, billboards or internet, advertisement market of Pakistan has expanded its outreach whereby it is now creating alliance with celebrities from overseas and setting aside endorsements as per the requirement of the current times. This opportunity of hiring non- Pakistani celebrities for brand image reaches new popularity levels that were previously held by Pakistani entertainers. Pakistan is increasingly following in the footsteps of the Western world by adopting a celebrity driven culture; where latest trends, fashions and ideas are modeled after various celebrities. History is witness to the fact that investments in celebrity endorsements in Pakistan have increased rapidly in the last decade or so hence increasing the quality of competition as well promoting innovation in marketing strategies as well as product development.

This chain of events have allowed Pakistan to grow in the positive direction hence creating awareness and increasing knowledge of the general public by means of massive advertisement projects in relation to gaining total strength of the consumer population. Huge investments require similar increases in revenue.

Brand image once embossed within the consumers then the companies get their safe haven until they reap the fruit of their own mistakes. Thus companies are increasingly using celebrities to endorse their brands by either publicly using their product or appearing in advertisements for said products.

The aim is to increase sales of the product by getting consumers to change their purchase behavior and buying more of the product (either by consuming it in greater quantity or buying more of the product). However celebrity endorsement does not automatically guarantee greater success, nor is the effectiveness same for every brand of a particular celebrity.

Thus it becomes important for organizations to understand how celebrity endorsement affects their brand. The purpose of this thesis is to study the impact that celebrity endorsement has on a brand as well as the factors that determine the effectiveness of the endorsement for the brand in order to maintain successful brand recognition.

Competitor Analysis

The local Pakistani advertising industry is brimming with a multitude of advertising agencies and each day it seems a new one is opening up around the corner. However, most of the top agencies in Pakistan have been around for decades and have a stable client base with which they operate and conduct their business with.

Orient McCann: McCann-Erickson is an affiliate of the Interpublic Group of Companies and is a multinational advertising agency with some of the largest and lucrative clients in the world. McCann Erickson combined with a local corporation, Orient in 1996 to form Orient McCann in Pakistan. It soon established itself as one of the best agencies in Pakistan and currently has the highest market share with major clients as Habib Bank, KFC and L'Oreal.

Synergy Advertising: Synergy Advertising has made a name for itself in recent years by winning the award for the best print advertisements in Pakistan. It has also gained strides by roping in Moiblink as its client along with Engro Polymer and NBP. Synergy is the second largest advertising service in Pakistan today.

JWT: JWT, another international company with significant backing has been in the industry for over 20 years and has some of the most loyal client base in the industry. JWT prides itself on providing discounts and other deals to its clients, which are unmatched in the industry. Its major clients include Bank Alfalah and Asiatic Bank.

Interflow: Interflow was established in Pakistan in 1979 and was initially slow to get off the ground. However over the last 10 years it has consistently performed well and with international clients such as Samsung and LG, it continues to build its reputation in the market.

Manhattan International: Manhattan International is one of the few advertising agencies, certainly the only recognizable agency in Pakistan that is actively affiliated with its international office. Most other agencies, including Lowe & Rauf are independent organizations with the same set of rules and principles; however Manhattan's strongest point is that it can take the help of its international counterparts for campaigns and that is why they are strong in Pakistan, even though they have been here for a very short duration. Their biggest client at the moment is PIA.

Pak Media Com: Pak Media Com's claim to fame has been one intensely popular campaign that has made them famous on the circuit. That campaign is the recent Ufone advertisements which have taken the industry by storm. Deemed to be the most recognizable and most appreciated advertisements amongst teenagers and young adults, these advertisements have put Pak Media Com on the map.

Midas: Midas has started relatively recently in Pakistan and has been able to get the Indus Motor Company as their clients, along with a recent contract with Samsung post 2012, once their partnership with Interflow expires. This has made them a prominent player in Pakistan's increasingly competitive advertising landscape.

Evernew Entertainment: Evernew Entertainment has been around for over 20 years but has slowly seen a decline in its client base with the emergence of new players in the industry. It still has a few significant clients, such as Dawlance, which make them a worthy competition even now.

Mindshare Pakistan: Just like Evernew, Mindshare has also been in operation for a long time but has a dwindling client base, however with Nokia still in their portfolio, they are deemed significant enough by the other agencies.

Argus Advertising: Argus Advertising is not a large firm (as compared to the others on this list) but they have a very large, very profitable client in Sony. Although their client base is limited, the presence of Sony in their portfolio has been the envy of many Pakistani advertising agencies.

Competitor Form Sheet

[Source: Lowe & Rauf, Pakistan (2012). Financial Statements, People, & Procedures Manual, pp. 21]

Financial Ratio Comparison

Lowe & Rauf with Argus & Ever new

Ratio Analysis

 

Lowe & Rauf

Argus

Evernew

Sales Growth

9.60%

7.20%

11.40%

Percent of Total Assets

 

 

 

Accounts Receivable

32.17%

42.06%

35.75%

Other Current Assets

7.20%

5.74%

3.41%

Total Current Assets

100.00%

100.00%

100.00%

Total Assets

100.00%

100.00%

100.00%

Current Liabilities

5.89%

6.46%

5.42%

Long-term Liabilities

57.60%

34.46%

13.63%

Total Liabilities

63.49%

40.93%

19.05%

Net Worth

36.51%

59.07%

80.95%

Percent of Sales

 

 

 

Sales

100.00%

100.00%

100.00%

Gross Margin

100.00%

100.00%

100.00%

Selling, General & Administrative Expenses

106.55%

85.91%

74.60%

Advertising Expenses

21.25%

16.22%

15.09%

Profit Before Interest and Taxes

-2.60%

22.01%

37.23%

Main Ratios

 

 

 

Current

16.97

15.47

18.45

Quick

16.97

15.47

18.45

Total Debt to Total Assets

63.49%

40.93%

19.05%

Return on Net Worth

-29.16%

72.40%

80.99%

Return on Assets

-10.65%

42.77%

65.56%

Additional Ratios

Year 1

Year 2

Year 3

Net Profit Margin

-6.55%

14.09%

25.40%

Return on Equity

-29.16%

50.68%

56.69%

Activity Ratios

 

 

 

Accounts Receivable Turnover

3.79

4.6

2.9

Collection Days

56

78

82

Accounts Payable Turnover

12.05

12.17

12.3

Payment Days

27

26

29

Total Asset Turnover

1.63

2.13

1.81

[Source: Lowe & Rauf, Pakistan (2012). Financial Statements, People, & Procedures Manual, pp. 17]

Chapter IV: Literature Review

Literature Overview

From a marketing perspective, it is important to understand each and every aspect that has an impact on the brand (and product). Hence there are innumerable studies that have dedicated themselves to understanding the factors that lead to an increase in marketing effectiveness and leading to the ultimate aim of greater purchases and greater brand equity.

Celebrity endorsement is one such factor that impacts purchase behavior and as such there have been studies that have been dedicated to not only studying the impact of this variable but also how it can be utilized to increase marketing effectiveness as well as the precautions that must be taken into account. The following reviews consist of studies relevant to this study.

Celebrity Endorsement - Hidden Factors to Success

There are many considerations that need to be taken into account when choosing a certain celebrity to serve as the image of the company or to promote the brand in other ways.

A conjoint technique is concerned with how people make choices between products and services in combination with what attracts them. This analysis determines the factors that attract consumers rather than asking the consumers themselves and is thus considered a useful tool.

Dimed et.al in their research, 'Celebrity Endorsement - Hidden Factors to Success' list key variables which determine the effectiveness of celebrity endorsement, these are, 'trust', 'expertise', 'similarity', 'likeability', 'meaning transfer', and 'fit'. Although other factors are also identified, they are not deemed as important in the minds of the consumers (based on the research conducted through consumer profiling) and thus are eliminated in the final results, listing these as the six most important variables that companies need to take into account when choosing a celebrity to go along with their brand image.

The purpose of the study was to understand the importance placed by consumers on various aspects of a celebrity endorser's physicality and or personality. However beyond these factors., the researchers were interested in the negative aspects of celebrity endorsement and how it can affect the company or the product's image and the considerations that need to be taken into account when hiring a celebrity, along with suitable means to handle negative publicity in case this occurs.

The basic research methodology used is both qualitative and quantitative. Quantitative methods, in terms of data collected via sampling procedures and qualitative methods in terms of conjoint analysis so that research can be better conducted. It is concluded that both approaches complement each other and hence must be used to completely understand the overall significance of the factors that consumers take into account.

In terms of sampling, non-probability sampling is deemed viable as it is cheaper and less time consuming. Among non-probability sampling procedures, a quota technique is used to fulfill the purpose of this study, with focus groups and questionnaires forming the bulk of the methods of data collection. The assumption upon which the data is collected is the willingness and ability of consumers to clearly identify factors associated with the overall celebrity image that result in negative publicity.

The authors further go on to explain how negative information may affect endorsement effectiveness and the ways in which companies cope with such difficulties. It is stated that negative publicity in terms of the celebrity's personal life may or may not affect consumer willingness to purchase but it differs from case to case and as such each case should be treated individually.

The final conclusion suggests ways in which these variables affect consumer willingness to purchase the product or service in a holistic manner as well as using these variables in isolation to study the effects of each. The hypothesis show that the consumers' willingness to buy products or services are affected by individual celebrities in accordance with the image of the brand.

The key finding was that the consumer's perception of these celebrities differ in different cases. Finally it is concluded that trust and meaning transfer are considered to be the most important variables.

Celebrities: The Linking Pin between Brands & Customers

Agrawal and Dr. Dubey in their research analyze how celebrity endorsements play a part in the process of brand building through understanding the landscape of advertising. Real life examples are used to understand the relationship between the power of celebrity endorsement and how it affects the brand.

The basic use of celebrity endorsement initially is for brand recall and recognition which eventually lead to increased sales.

The 'Elaboration Likelihood Model' (EML) is proposed which suggests that consumers scrutinize what the product offers and its features in important situations and for products that have a larger impact on their lives, such as medical equipment as opposed to soft drinks.

Essentially, celebrity endorsements are important in areas where there is high psychological or social risk where one's image is important. This can be anything from a car to one's attire to the type of hair gel one uses. The two major reasons for celebrity endorsement as per this model are to increase attractiveness of the selling proposition to the consumers along with a change in attitude.

Once the reasons for celebrity endorsement are selected, the author moves on to establish a framework for what attributes and features make celebrity endorsement effective.

The research proposes an action plan where the results of partnership with a celebrity should be result driven and that the celebrities have the ability to connect with the brand's target audience, rather than the other way around. The author points out that too many brands try to make their brand appeal to the celebrity's target audience which is not an effective advertising or branding policy.

The key then becomes that there should be a strong image fit between brand and celebrity and if that is low, the partnership should be eliminated even if the celebrity in question is extremely popular.

Some situations occur where celebrity fit may be high but the overall attractiveness proposition of the celebrity may be low with the target audience, for these situations it is best to endure with the celebrity for a while to see whether there is improvement in results or not rather than immediately terminating the partnership. According to the author, this is one of the mistakes that are made by most brands.

If the corporation realizes that there is success (even if moderate), the partnership should be extended early so that the maximum utility in terms of cost benefit can be achieved.

Companies should also be aware that a competitor analysis is necessary for celebrities as well, just like with brands. This would help to ensure that the best celebrity is chosen as well a cost benefit analysis of all the major celebrities to select the best possible one.

The research then moves on to one of the core issues with celebrity endorsement: most good celebrities endorse multiple brands and as such this results in clutter, something that also occurs with corporations' ads due to the intensity of the competition.

It is outlined that first the impact of said clutter must be measured, to analyze whether the brand of the celebrity is diluted or not. If he or she is already endorsing multiple brands and research shows that consumers do not recall which advertisements the celebrity appears in, it is best to forgo the partnership with that celebrity in favor of another, one who appears in less ads or even if he or she does appear in a large amount of advertisements, is still distinct enough for the partnership to be effective for both celebrity and brand.

The last reason that brands need to take care of is the fact that the celebrity does not overshadow the brand itself which would result in great exposure for the celebrity but would not translate to increased sales or a greater purchase intention for consumers.

The authors state that there are a number of risks associated with celebrity endorsement and then go on to list and describe each:

Financial Risk:

Cost benefit analyses are extremely important when getting a celebrity to endorse your brand and as such one of the biggest risks is that the return on investment (ROI) is not fulfilled. One of the risks is that using a high profile celebrity, the burden always shifts to price and thus onto consumers, which may impact overall sales and negate the increase from endorsement.

Overexposure:

As has been stated previously, one of the major issues with celebrities is that they endorse multiple brands and that negates their effect on the consumers' minds and the partnership with each brand. Research shows that the impact of the celebrity is diluted when he or she endorses more than four brands and the best celebrities these days endorse more than 25 brands a year.

Negative Publicity:

When celebrities are strongly associated with the brand, any negative publicity for the celebrity impacts the brand as well. This is one of the risks for a brand in being associated with a celebrity.

Overshadowing:

The power of the celebrity is so large that consumers tend to focus on the celebrity rather than the actual brand that he or she is endorsing in the advertisement.

Overuse:

A number of celebrities used to appeal to multiple markets at the same time may result in dilution of brand meaning and thus confusing the consumers and reducing the impact of this high cost method of increasing purchase intention.

Extinction:

There is always risk that the brand may not need the celebrity after a period of time but if the contract if for a larger duration, this may be a drain on the capital of the firm.

Agrawal and Dubey conclude by proposing a symbiotic model which identifies six effects of the celebrity endorsement process:

Mutualism: The celebrity benefits from the brand and the brand benefits from the celebrity for the partnership to create a mutually beneficial partnership. This is the ideal partnership.

Commensalism: Either the celebrity or the brand benefits from the partnership while the other does not. Normally if the celebrity benefits, the endorsement is considered a failure while if the brand benefits, it is still considered a success but corporations should be wary as these kinds of partnerships only help in the short-term and go on to become unsuccessful in the long run.

Parasitism: In this scenario, either the celebrity or the brand is benefitted but the other is actively harmed as opposed to no gain no loss. Needless to say these partnerships are very short lived.

Neutralism: Neither party is benefitted nor harmed from the partnership; although some corporations may see a lack of active failure as a reason to prolong the partnership, however they must refrain from doing so.

Amensalism: In this scenario, either the celebrity or the brand is harmed but the other does not gain from the partnership rendering the partnership useless for the corporation.

Competition: Both the celebrity and brand are harmed through their partnership; although this takes place rarely, this has the potential to be destructive to the image of the brand as well as the career of the celebrity.

This is an important study with context to this thesis as it outlines the factors and attributes needed along with the risks and pitfalls associated with celebrity endorsement and the analysis is done so bearing in mind the subcontinent, making the context of the study invaluable to this research and is one of the major aspects of the undergoing research to identify the key attributes needed in a celebrity.

Consumer Opinion towards Celebrity and Non celebrity Advertisement

The article talks about different types of endorsers that may influence the demand of a certain product, brand or service. The idea is to understand how these different type of endorsers affect consumer opinion and in turn purchase behavior with relation to different product types. These different types of endorsers are listed as: celebrity, typical consumer, professional expert or the company president. Factors such as motivation to buy the product, its attractiveness, reliability and credibility are used as the basis to test how these types of endorsers affect consumer opinion.

It is seen that for general, undifferentiated products, the use of celebrities result in the highest rating using the factors that have been mentioned. The study notes that celebrities act as a competitive edge for the product, thus justifying the expensive price tag that usually accompanies the use of celebrities in their advertisements.

Typical consumers were generally favored for advertisements which were technological in nature, with consumers responding to such endorsers with a medium return. It was noted that due to the low cost associated with such an endorser, the medium return was justified and thus a good option.

Professional experts were highly rated in technological fields as well as the healthcare profession in terms of doctors, dentists ,etc. They were the highest rated type of endorser for such fields as well as the lowest rated in generic fields where celebrity endorsement was considered much more effective.

The use of company presidents was generally seen to have a small impact unless in times of crisis and image problems for the business. It was seen that such an endorser was more effective for overall brand image and company goodwill rather than individual products or services.

However each type of endorsement brings some extra value to the matter, the study undertaken concludes that no matter what type of endorser, their advertisements brought higher believability, higher taste expectations and greater intent to purchase. A research conducted by Smita Sharma "Celebrity Endorsement-is it the only Recipe for Marketers", says that nearly all products and services benefit the use of celebrity endorsement and the overall benefit far outweighs the actual cost.

Generic factors that result in successful advertisement are listed with general effectiveness of advertisement measured in terms of sales turnover, ad recall and recognition as well as ad approval rating. These are later applied to endorsements and whether these factors were enhanced by endorsement.

Celebrities bring with them the increase in consumer awareness, brand recall, brand association. Celebrities also enhance reach ability of the product message.

Impact of Celebrity Qualities on Purchase Intention

This study by Margaret J. Wellington compared ads with endorsers to an ad with no endorser to see which was more effective in an advertisement. For the study, a fictitious type of wine was used and the study was conducted based upon it.

The study created two types of advertisements, one with a celebrity and one without and used focus groups as their test subjects. These groups were shown both advertisements and were told to rate both advertisements and both wines.

Consistently, the results showed that the use of celebrity resulted in much higher scores, with consumers showing a higher purchase intention, greater believability in the advertisement as well the ad being much more memorable.

However it was noted that there should be a perfect fit between the brand and celebrity to create a proper association and clarity and due to the high volume of celebrity endorsed advertisements, the message itself could be lost in the sea of competition unless the message itself if powerful and the celebrity's star power is higher than that of the celebrity used by the competition.

It was also deemed important that the celebrity image match the positioning of the brand and the company. The reason is that this results in higher association and greater believability and thus becomes imperative that not just any celebrity be used but the right ones be chosen and invested in so that they become brand ambassadors.

Lastly, it was found that consumers now look at celebrities as entertainers also, not as mere models. So, the advertising campaigns should send a clear message of entertainment. This means that the advertisement campaigns should be lively and serve to fit with the brand and the celebrity image; advertisements which contrast with one of the two, would only serve to confuse the message and hence result in a weak advantage in terms of increasing consumer purchase intention.

Five important factors -(Reach of product message, Motivation to buy the product, Attractiveness, Reliability and Remembrance) were used to compare the opinion of consumers towards Celebrity and Non celebrity Advertisement.; on all factors, celebrity endorsement advertisements scored higher.

It is these factors that help to create groundwork for this research as they help to establish the key variables needed for a theoretical framework.

The Right Athlete for the Right Brand - Key to Successful Brand Building

Athletes today earn huge sums of money through sponsorship and product endorsements. These athletes are highly sought after based on the premise that this investment (paying the celebrity) would in turn bring about higher returns for the brand (through increased sales) that would justify the initial investment.

Christopher Conway, in his paper, "The Right Athlete for the Right Brand - Key to Successful Brand Building" explores the effects of athletic endorsement from the first stage to the last and identifies through research, the key attributes needed for the endorsement to work.

The paper provides important insights into the qualities needed for successful endorsements and since athletes are one of the major celebrity endorsers in Pakistan due to cricket, this serves as an important aspect of celebrity endorsement.

The initial process of celebrity endorsement starts with the celebrity creating exposure for the brand. Since athletes are a known brand themselves, the product can increase its own awareness within the minds of its target market by linking itself to the brand of the athlete.

Once this has taken place, the natural consumer purchase behavior is seen to take place within consumers (as researched by Conway) and the five steps in the consumer behavior research model take into effect, with consumers bringing the product into their consideration set and then evaluating as an alternative to their regular product usage and then finally making a decision as to purchase it or not.

The effect of the endorsement yields the three key buzzwords for any brand: strong awareness, favorable opinion, unique association. This, more often than not, according to Conway leads to increased, measurable sales.

Once the impact a successful endorsement can have on a brand is established, Conway comes to the crux of the paper, which deals with the attributes that make a celebrity a good brand endorser.

Essentially these have been broadly categorized into two components: On-field attributes and off-field attributes.

The first category is made up of five distinct qualities which are:

Performance

Natural Skill

Style

Records

Potential

The inclusion of these qualities in the paper is justified through the examples of Michael Jordon and Maria Sharapova, with the brand in question being Nike. Michael Jordon was endorsed by Nike when he was at the height of his powers in the game of basketball and was the perfect athlete in the sense that he had performances to back him up, he had the grace, posie and style of the best in the game, and he had an abundance of natural skill and multiple championship records.

The partnership between Jordon and Nike resulted in Jordon becoming one of the most recognizable sportsmen on the planet, not just in the USA and Nike became the leading manufacturer in sportswear (not just basketball shoes).

The other example is that of Maria Sharapova, who became a brand endorser for Nike when she was 14. Nike saw the potential in this pre-teen girl and within 3 years she became one of the most famous women in Tennis, thus justifying the initial investment for Nike when she was not so famous.

The second category of attributes that are needed within an athlete are the off-field attributes he or she possesses. These comprise of the following:

Personality

Attractiveness

Role Model

Celebrity-Fan Relationship

Uniqueness

Based on Conway's research, these are the five most significant attributes that a sports celebrity must possess to go along with his on-field attributes. Conway suggests that the presence of all of these in an athlete is unnecessary but the greater the number of these attributes that a celebrity possesses, the greater his success chances as an endorser and the subsequent effect it will have on the brand's sales.

Conway also suggests that if a sports celebrity is recognizable enough, the off-field attributes matter more than the on-field ones and cites the example of David Beckham for proof.

Beckham, doesn't play in any major football leagues anymore, however due to his immense popularity, good looks and a likeable personality, is a far better endorser than Drogba, who does not match Beckham's off-field attributes.

Conway concludes by stating that the right combination of attributes, those that closely match the brand's positioning should be the focus of any corporation when choosing a celebrity endorsement for its brand to increase sales.

Impact of celebrity advertisement on customer's brand perception

Qurat-ul-Ain Zafar and Mahira Rafique published their study on the impact of celebrity advertisement on customer's brand perception by investigating the impact through the celebrity's source credibility, physical attractiveness and congruence on brand perception (along with purchase intention).

The basic premise or the hypothesis of the research states that the above three factors (physical attractiveness, source credibility and celebrity / brand congruence all positively affect consumer purchase intention.