Celebrity Endorsement - Study Cricle-030410

Impact of Celebrity Endorsements on Consumer

brand preference

Shifali MandhaniaStudy Circle

03/04/2010 1Celebrity Endorsement

Introduction

Growth of Celebrity Endorsements

Celebrity, brand and consumer

Advantages

Disadvantages

Objectives and Methodology


Agenda

Introduction

03/04/2010 Celebrity Endorsement 3

Who is a celebrity ??

`Enjoy public recognition Experts of their respective fieldsWider influence in public life & societal domain.


Celebrity Endorsement

According to Friedman and Friedman, a “celebrity endorser” is an individual who is known by the public for his or her achievements in areas other than that of the product class endorsed”.

Celebrity endorsement is a special type of advertisement which includes a famous person from film fraternity, athletes, sports, modeling world etc


The root of the concept

One of the early examples is Queen Victoria’s endorsement of Cadbury’s Cocoa

In India from late1970’s and early 80’s brands started being endorsed by celebrities

Late Jalal Agha -Pan parag

Tabassum -Prestige pressure cooker

Sunil Gavaskar -Dinesh suitings

Kapil Dev -Palmolive shaving cream

HLL has used Hindi film stars to endorse their beauty soap LUX since the fifties.


Celebrity Endorsement in India

Phase 1: The Pioneering Phase (1950-1980)

This phase was characterized by: -

1. Limited channels of communication

2. Demand exceeded supply

3. Due to heavy governmental regulations, only few big companies, from their global experience, could introduce the concept of celebrity endorsement.

Phase 2: The Growth Phase (1980-1990)

The introduction of television added a variable effective medium of

communication. Indian stars going global with events like Asiads

and World Cup victory.


Phase 3: Globalisation

In highly competitive markets, the following realities about brand management exist: -

1.Product differentiating factors are duplicable and imitable.

2.All long existing and successful brands imbue their products with a

meaning.

Celebrity Endorsement in India cont..


Growth of Celebrity Endorsements


Growth of celebrity endorsements

A Celebrity Endorsement Survey conducted by IMRB (India Market Research Bureau) and public relations firm IPAN states that 86 per cent Indians remember advertisements because of the celebrities that endorse them. Since 2003, celebrity endorsement volume on television has gone up by more than six times

A study by AdEx India, a division of TAM Media Research, finds that there has been 49 per cent growth in celebrity endorsement ad volumes on TV during 2007 compared to 2006


On an average, companies are spending 0.7 per cent of their annual brand sales volume on celebrity endorsements and a whopping 35 per cent on media buying (grown to almost 60 per cent )-Percept Talent Management

A Ficci report points out 60% of Indian brands use celebrities in some form or the other; a steep climb from 2001, when only 25% of brands needed such razzle-dazzle. Ficci also estimates that marketing managers spend roughly Rs 600 crore every year in the form of endorsement fees paid to celebrities.

Growth of celebrity endorsements


Snapshot on Celebrity Endorsement on TV during H1 '09

Maximum share contributed by the Bollywood personalities in overall celebrity endorsement .

Highest number of advertisers endorsed by 'MS Dhoni’.

'Cellular phone service' was the top category in celebrity endorsement .

'Airtel Cellular Phone Service' had the maximum share of the celebrity endorsement ad volumes.

(One-in-four advertisements currently features a celebrity, versus one-in-eight 10 years ago)

Source Indiantelevision.com's AdEx India Analysis


Way forward

Celebrity management firms like Globosports and World Sports Group say the celebrity endorsement market is estimated to clock a healthy growth in 2009-10.

Senior executives at these firms say while there is no organised agency to track the deal size of the endorsements, the market size is expected to grow 15 to 17 per cent in 2010.

Endorsements by film stars, estimated at around Rs 150 crore (Rs 1.5 billion) and growing at 25 per cent.


Celebrities, Brands & Consumers


The process of Celebrity Endorsement

The Meaning Transfer Model- McCracken (1989)03/04/2010 15Celebrity Endorsement

Impact of a Brand on consumer purchase decision


Problem recognition

Information search

Generation of alternatives

Evaluation of alternatives

Purchase decision

Post Purchase decision

Brand Preference

Why do Consumer prefer celebrity endorsed products ?

Every day consumers needs someone to look upon-emulate

A consumer who observes messages for two different firms - one product message containing the celebrity and other not,

believes that the product with celebrity endorsement will have more purchase and so be of higher value (Clark & Horst man 2003)

Source attractiveness – Physical appearance, Personality, Likeability and Similarity

Creates a connect (eg Vishwanath Anand –NIIT)

In India, the majority of the population is rural and at the bottom of the pyramid. This segment responds to the pull of a large idea and to the pull of a visible celebrity.


How Celebrity Endorsements Influence the Consumer

According to Kelman - Three process of social influence which results in an individual adopting the attitude advocated by the communicator

Compliance

Identification

Internalization


Celebrity and a Brand

Surveys suggest that compared to any other types of endorsers, famous people achieve a higher degree of attention and recall. They increase awareness of a company's advertising as well as help in retention of message in the psyche of the audience. They can also help the company in reducing their expenditure on Media and other forms of publicity

Eg : S Kumars- Hrithik Roshan. They have reckoned that they spent 40-50%less on media, ad recall was 70%.


Parameters for compatibility between the celebrity and brand image

The success of a brand through celebrity endorsement is a cumulative of the following 14 attributes. Greater the score of the below parameters, greater are the chances of getting close to the desired impact Source www.esnips.com


Parameters cont…

Celebrity-Target Audience MatchSmriti Irani endorsing the WHO recommended ORS Campaign in India

Celebrity ValuesShabana Azmi campaigning for AIDS Awareness, Amitabh Bachchan & Shahrukh Khan campaigning for Pulse Polio or Aishwarya Rai appearing in the Donate Eyes campaign are few examples

Costs of Acquiring the CelebritySachin Tendulkar’s Rs. 2.0-2.5 crores,AR. Rehman- AirTel Rs. 1.75 crores, Shahrukh Khan’s- Rs. 2.5-3.0 crores, Aishwarya Rai- Rs. 1.25 crores


Parameters cont…

Celebrity Regional Appeal Factors

R. Madhavan endorsing Pepsi in southern India

Celebrity-Product Match

Cyrus Broacha –MTV & Aishwarya Rai & Nakshatra

Celebrity Controversy Risk

Salman Khan, Azharuddin

Celebrity Popularity

Tara Sharma &Simone Singh, Agni Diamonds & Raima Sen Vs HPCL- Sania Mirza


Parameters cont…Celebrity Physical Attractiveness

John Abraham endorsing Wrangler and Timex Sunglasses

Celebrity Credibility- successful campaigns saved the brand image of Cadbury’s

Multiple Endorsements-

Sachin Tendulkar people recall Pepsi, TVS Victor and MRF, but might not remember brands like Britannia and Fiat.

Whether Celebrity is a Brand User

PETA philosophy


Advantages of Celebrity Endorsements


Advantages of Celebrity Endorsements

•Establishes Credibility: this is especially true in case of new products.•Attracts Attention•Higher degree of recall• Associative Benefit•Mitigating a tarnished image•Psychographic Connect•Rejuvenating a stagnant brand•Demographic Connect•Mass Appeal•Celebrity endorsement can sometimes compensate for lack of innovative ideas


Advantages of Celebrity Endorsements (contd..)

• Belief in efficiency and new appearance that will result in at least trial usage.

• Signing up stars for endorsements is a time-tested strategy and has been effectively even for social messaging

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.


Dis-advantages of Celebrity Endorsements


Causes of failure

1. Improper Positioning –

Amitabh and Abhishek Bachchan in Maruti Versa.

2.Brand -Celebrity Disconnect-

Shahrukh khan endorsing lux beauty soap

3. Clutter Flutter

In India , we have too many brands chasing too few celebrities.

Eg.- Amitabh endorsing Reid& Taylor, Dabur, Cadbury, Parker Pens, Nerolac paints, ICICI, Hajmola, Tide, etc


Causes of failure cont..

4. Dissatisfaction with the product quality/performance

eg: Sachin endorsing FIAT PALIO, but due to poor fuel efficiency of the car ,its sales took a beating.

5. The vampire effect

Brand is overshadowed in the overwhelming presence of the star.

eg: Britney spears in Pepsi ad.

Castrol commercial featuring Rahul Dravid

6. The reputation of the celebrity may derogate after he/she has endorsed the product

7. Celebrities endorsing one brand and using another


Is it smart to use celebrity endorsements for branding?

Idea First

A celebrity’s presence in the ad should be contextual (eg : Sachin Tendulkar –Boost

The compatibility of values of the brand and that of the celebrity.


Celebrity endorsements – Do’s and Dont’s

Consistency and long-term commitment

Three prerequisites to selecting celebrities

Celebrity–brand match

Constant monitoring

Selecting unique endorsers

Timing

Brand over endorser

Celebrity endorsement is just a channel

Celebrity ROI.

Trademark and legal contracts


Conclusion

Studies indicate that celebrity endorsement has worked well in some consumer segments while failing in others. Few celebrities have been more successful than those with almost parallel fame. So the role of celebrity endorsement in the advertising space is equivocal and cannot be seen as a assured strategic tool to win profits, market share, revenues, etc.

Whether Celebrity endorsement has a positive or a negative impact on the brand is a debate that is open to interpretation.


Objectives for study

To know the impact of celebrity endorsement on consumer brand preference

To study and understand whether celebrity endorsements work


Methodology

Data:•Primary

Primary data will be collected through questionnaire, observation and interview•Secondary

The secondary data is being collected from various books, reports, Journals (National & International), magazines, articles, websites and other sources.

Sampling size

Sample size: 500 persons of the city will be interviewed for this research.

Sampling Design

Convenient and Stratified sampling

Area of study

The study will be conducted on the people of Hyderabad.


Hypothesis

Ho: Celebrity endorsement does not have a impact on the consumer brand preference

Ha: Celebrity endorsement has a impact on the consumer brand preference


Thank you


Celebrity Endorsement - Study Cricle-030410

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