celebrity endorsement - study cricle-030410
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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
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Agenda
Introduction
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Who is a celebrity ??
`Enjoy public recognition Experts of their respective fieldsWider influence in public life & societal domain.
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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
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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.
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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.
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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..
03/04/2010 8Celebrity Endorsement
Growth of Celebrity Endorsements
03/04/2010 Celebrity Endorsement 9
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
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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
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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
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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.
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Celebrities, Brands & Consumers
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The process of Celebrity Endorsement
The Meaning Transfer Model- McCracken (1989)03/04/2010 15Celebrity Endorsement
Impact of a Brand on consumer purchase decision
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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.
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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
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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%.
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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
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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
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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
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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
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Advantages of Celebrity Endorsements
03/04/2010 Celebrity Endorsement 24
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
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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.
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Dis-advantages of Celebrity Endorsements
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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
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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
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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.
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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
03/04/2010 31Celebrity Endorsement
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.
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Objectives for study
To know the impact of celebrity endorsement on consumer brand preference
To study and understand whether celebrity endorsements work
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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.
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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
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Thank you
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