course of independent study (repaired)

8/7/2019 COURSE OF INDEPENDENT STUDY (Repaired)

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COURSE OF INDEPENDENT STUDY

A REPORT ON

A STUDY ON THE IMPACT OF CELEBRITY ENDORSEMENT ONBUYING BEHAVIOR OF CONSUMERS AND AS A SOURCE OF BRAND-BUILDING

SUBMITTED BY

SAMARPITA BHATTACHARYA

ROLL NO 09240

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ContentsDECLARATION.........................................................................................................4

ACKNOWLEDGEMENT..............................................................................................5

Objectives of study:.............................................................................................6

Scope of the study:.................................................................................................6

Research Methodology:...........................................................................................6

Data Sources:..........................................................................................................6

Limitation:...............................................................................................................7

Population of the study...........................................................................................7

Sampling Size:.........................................................................................................7

Sampling Technique:...............................................................................................7

Sampling Frame:.....................................................................................................7

DATA PROCESSING..................................................................................................7

Analytical Tools.......................................................................................................8

Executive Summary................................................................................................9

Introduction...........................................................................................................11

'Celebrity Endorsement'........................................................................................12

Difference Between Brand Ambassador & Brand Face..........................................12

Scope of Celebriity Endorsement:.........................................................................13

Impact Regions of Celebrity Endorsement............................................................14

Compliance, Identification & Internalization..........................................................15

Effectiveness of Celebrity Endorsers.....................................................................16

Brand Image Formation & Brand Preference.........................................................17

Sturcture of Indian automobile sector and some facts:...........................................................19

Data analysis and interpretation:.....................................................................................21

Findings:................................................................................................................36Conclusion:............................................................................................................37

Recommendations:......................................................................................................38

cases.....................................................................................................................39

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Bibliography..........................................................................................................43

Appendix...............................................................................................................44

Questionnaire........................................................................................................45

Questionnaire

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DECLARATION

I, Samarpita Bhattacharaya, hereby declare that the work presented herein is

genuine work done originally by me and has not been published or submitted

elsewhere for the requirement of a degree programme. Any literature, data orworks done by others and cited within this dissertation has been given due

acknowledgement and listed in the reference section.

_______________________

(Student's name & Signature)

_______________________

(Registration No.) 09240Date:__________________

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ACKNOWLEDGEMENT

It has been a great pleasure for me to work on this project. My sincere thanks tot.Director Kamal

Ghosh Ray for giving me an opportunity to work on this project whereby I was given an

exposure to study the impact of celebrity endorsement as a source of brand building and onconsumers buying behavior in automobile Industry which helped me to increase the span of our

knowledge and developed my thinking on more practical lines. I thank him for his guidance and

support throughout the time when I was working on this project. I am also thankful to dean

under whose valuable guidance I learnt a lot and which will help me out in the coming days.

I express my sincere thanks to my parents, friends who encouraged me throughout

this project and always with me.

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Objectives of study:

The objectives of the study are as follows:

To identify the influence of celebrity endorsement on consumer buying behavior.

To study celebrity endorsement as a source of brand-building.

To find which type of celebrity persona is more effective.

Scope of the study:As due to time constraint it is very difficult to cover the entire sectors so I decided to

cover automobile sector. I am covering automobile sector as whole and not concentrating

on any particular category.

Research Methodology:

Research Design:

A research design is an arrangement of conditions for collection and analysis of Data in a

manner that aims to combine relevance to the research purpose with Economy in procedure. It

constitutes the blueprint for collection, measurement and analysis of data.

My research design will be exploratory research design.

Data Sources:In dealing with any real life problem it is often found that data at hand are inadequate,

and hence, it becomes necessary to collect data that are appropriate. The researcher cancollect data either through primary source or secondary source.

a) Primary data: These are those data which are collected afresh and for the first

time, and thus happen to be original in character. I will be using the structured

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questioners.

b) Secondary data: These are those which have already been collected by someone

else and which have already been passed through the statistical process. I will

collect it from the sources like internet, published data etc.

Limitation:There are following constraints of the study which can be explained as:-

The time of research was short due to which many fact has been left untouched

The Area undertaken in research in hyderabad only. But to do a completer research

a wide area is required, so the area is also a constraint of the study.

Sample for the study taken is of only 100 consumers. Which can also act as a

constraint in the study.

While collecting data some of the respondents are not willing to fill the questionnaire, so they

might not fill their true behavior. This can also be a constraint of the study.

Population of the studyYouth (Male) of Hyderabad will be included in population.

Sampling Size:It is the total number of respondents targeted for collecting the data for the research. Sample size

of 100 persons will be taken for this research.

Sampling Technique:Random sampling technique will be used in this research project.

Sampling Frame:Frame is the list of respondents.

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DATA PROCESSINGDaily data will be entered into MS-Excel sheets. After the exhaustion of the specified

geographical area this data will be analyzed using simple graphical and tabulationtechniques. The data sheets mentioned here will be attached in the annexure of the report.

Analytical ToolsAfter collection of data another work necessary for any data collector is to correctly analysis that

data. So statistical tolls helps us to correctly analysis the data .As I will using here the software

named SPSS for analysis of the data XLSTAT.I will use following statistical tools:

Hypothesis Testing

Chi-square test will be used when the set of observed frequencies obtained after experimentation

have to be supported by hypothesis or theory. The test is known as X2- test of goodness of fit

and is used to test if the deviation between observation (experiment) and theory may be

attributed to chance (fluctuations of sampling).2 also enables us to explain whether or not two

attributes are associated or related to each other. To test the goodness of fit : It helps to test

goodness of fit by using null and alternate hypothesis.

STATISTICAL TOOLS TO BE USED

1. Chi Square Test

Procedure:

(1) Set up the null hypothesis that there is no significant difference

between the observed and expected value.

(2) We compute the value of CHI- square by using the formula

CHI-square = 2= (( Oi- Ei)2/Ei)

O- Observed value

E-Expected value

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Degree of freedoms=(R-1)(C-1)

Level of significance=5

Executive Summary

India is a country where people love to live in dreams. They worship celebrities. Celebrities may

be Cricket stars like Sachin Tendulkar, Mahinder Singh Dhoni or Film Stars like Salman Khan,

John Ebrahim. They treat them as God. Marketers use this very preposition so as to influence

their target customers may be existing or potential ones. For this they rope in these celebrities

and give them whopping amount of money. They believe that by doing this they can associate

their products with their target customers. This is called celebrity endorsement. But do this

celebrity endorsement acts as a source of brand-building and have impact over the purchasing

behavior of customers in case of automobiles? For this I decided to conduct this vary research

and objectives of my research are:

To identify the influence of celebrity endorsement on consumer buying behavior.

To study celebrity endorsement as a source of brand-building.

To find which type of celebrity persona is more effective.

Lot of researchers has done extensive research work regarding celebrity endorsement, its

influence over customers purchasing decisions. After studying the whole literature related

to celebrity endorsement I found a gap in the study. This gap was whether celebrity endorsementacts as a source of brand-building. So I decided to undertake research on this particular aspect.

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This research is limited to Hyderabad City only due to various constraints like time available,

scarcity of resources etc. From this we can make an attempt to generalize the result to the whole

universe. After conducting research it was found that brand name and celebrity endorser are the

two key factors that play an important role in affecting purchase intention. Majority of the people

want to see their favorite celebrity endorsing their brands.

During our research an important factor revealed that mostly people want to see male celebrities

endorsing automobile vehicles rather than female. This fact is also supported by advertisement of

glamour motorbike which have baseline Definitely male. This particular advertisement created

hot spaces at Cannas festival. There are large no. of mediums of persuasion but celebrity

endorsement is an effective mode of persuasion.

People love to see sports stars endorsing automobile vehicles than that of bollywood

stars. This particular aspect is mainly supported by the fact that in India where Cricket is religion

and with the success of IPL-1 cricketers like Gautam Gambhir,Ishant Sharma are able to displace

big film stars like Hrithik Roshan for advertisements of Coca-Cola. Another important fact

which came into existence was majority of people follow their favorite celebrity while making a

new purchase everytime. Beside this one major factor come into existence that mostly

respondents were able to recognized the celebrity used in various advertisement. So in this brand

recall test, mostly positive results were found. One open-ended question was also included about

suggestion. From that it was concluded that mostly people want that instead of spending huge

amount of money onto celebrities company should come out with some schemes so as to lure

their customers. So it can be concluded that for a small extent Celebrity endorsement acts as a

source of brand-building but company should follow integrative approach so as to build strong

brands.Beside celebrity endorsement they should run certain schemes so as to provide value to

the customer and to build strong brand.

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Introduction

There are large no. of brands available in the market. Some are very familiar and rest are

somewhat. What are the things that distinguish those from rest? It may be brand name,

advertisement, royal heritage and may be celebrity endorser who endorse them. e.g. Raid and

Taylor has the rich heritage of ropping in various cascades of James Bond 007 as their brand

endorser and it has helped them strongly to build there brand. Businesses have long sought to

distract and attract the attention of potential customers that live in a world of ever-increasing

commercial bombardment. Everyday consumers are exposed to thousands of voices and images in

magazines, newspapers, and on billboards, websites, radio and television. Every brand attempts to

steal at least a fraction of an unsuspecting person's time to inform him or her of the amazing and

different attributes of the product at hand. Because of the constant media saturation that most

people experience daily, they eventually become numb to the standard marketing techniques. The

challenge of the marketer is to find a hook that will hold the subject's attention. Also from a

marketing communications (marcoms) perspective, it is vital that firms design strategies that help

to underpin competitive differential advantage for the firm's product orservices. Accordingly,

marcom activities back-up other elements in the marketing mix such as designing, branding,

packaging, pricing, and place The term Celebrity refers to an individual who is known to the

public (actor, sports figure,entertainer, etc.) for his or her achievements in areas other than that of

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the product class endorsed (Friedman and Friedman, 1979). This is true for classic forms of

celebrities, like actors (e.g., Amitabh Bachchan, Shahrukh Khan, Rani Mukherjee Aamir Khan and

Pierce Brosnan), models (e.g., Mallaika Arora, Lisa Ray, Aishwarya Rai, Naomi Campbell,

Gisele Buendchen, etc), sports figures (e.g., Sachin Tendulkar, Zaheer Khan, Sourav Ganguly,

Anna Kournikova, Michael Schumacher, Steve Waugh, etc), entertainers (e.g., Cyrus Broacha,

Oprah Winfrey, Conan O'Brien), and pop-stars (e.g., Madonna, David Bowie) - but also for less

obvious groups like businessmen (e.g., Donald Trump, Bill Gates) or politicians. Celebrities

appear in public in different ways. First, they appear in public when fulfilling their profession,

e.g., Vishwanathan Anand, who plays chess in front of an audience. Furthermore, celebrities

appear in public by attending special celebrity events, e.g., award ceremonies, inaugurations or

world premieres of movies. In addition, they are present in news, fashion magazines, and

tabloids, which provide second source information on events and the 'private life' of celebrities

through mass-media channels (e.g., Smriti Irani being regularly featured in various publications).

Last but not least, celebrities act as spokes-people in advertising to promote products and

services, which is referred to celebrity endorsement.

'Celebrity Endorsement'McCracken's (1989) definition of a celebrity endorser is, "any individual who enjoys public

recognition and who uses this recognition on behalf of a consumer good by appearing with it inan advertisement (marcoms), is useful, because when celebrities are depicted in macrons, they

bring their own culturally related meanings, there to, irrespective of the required promotional

role." Friedman and Friedman (1979) found empirical evidence that, in the promotion of

products high in psychological and/or social risk, use of celebrity endorser would lead to

greater believability, a more favorable evaluation of the product and advertisement, and a

significantly more positive purchase intention. Thus, companies use celebrities to endorse their

products, however, there are deeper attributes that are involved in celebrity endorsement.

Celebrities might endorse as a brand ambassador or a brand face. Some time people have this

habit of relating this vary term of celebrity endorsement with brand face. But this is not so.

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Difference Between Brand Ambassador & Brand Face

A Brand Ambassador would be one who is not only a spokesperson for the brand or is just

appearing as a testimonial for the brand's benefits. He/she is an integral part of the brand persona

and helps to build an emotional, which goes beyond just appearing on TV commercials .He takes

up the cause of a Brand Champion and is associated with every aspect related with the brand.

What is more, there is a significant difference between making just an endorsement for say, a

shampoo or an automobile, and being that brand's alter ego. Both parties take the latter far more

seriously to the deal. So a brand ambassador would be involved in press releases, he/she would

be actively participating in any sales promotion, sporting the Brand all the while. For example,

Fardeen Khan is the brand ambassador for Provogue while he remains a brand face for Lux Body

Wash.

On the other hand, a Brand Face would be the current celebrity who is just used as a tool

to increase brand recall and is only appearing in the advertisement. It is usually seen that

a brand face is a temporary contract and is very short term at times. An example would be

Sona Chandi Chawanpryash using Sourav Ganguly for a while in its commercials. Brand

faces are easily forgotten and fades away with the campaign's end.

The motive behind total branding may be decocted as an attempt to amalgamate diverse

activities to win customer preference. Apropos to this context, the topic Impact of celebrity

endorsement on overall brand, is a significant one. The crescendo ofcelebrities endorsing

brands has been steadily increasing over the past years. Marketersovertly acknowledge the

power of celebrities in influencing consumer-purchasing decisions. It is a ubiquitously

accepted fact that celebrity endorsement can bestow specialattributes upon a product that it

may have lacked otherwise. But everything is not hunkydory;celebrities are after all mere

mortals made of flesh and blood like us. If a celebrity can aggrandize the merits of a brand,

he or she can also exacerbate the image of a brand

Celebrity endorsements are impelled by virtue of the following motives:

Instant Brand Awareness and Recall.

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Celebrity values define, and refresh the brand image.

Celebrities add new dimensions to the brand image.

Instant credibility or aspiration PR coverage.

Lack of ideas.

Convincing clients.

Scope of Celebriity Endorsem ent:The use of testimonials by advertisers dates back to the 19th century when medicines were

patented. Firms have been juxtaposing their brands and themselves with celebrity endorsers (e.g.,

athletes, actors) in the hope that celebrities may boost effectiveness of their marketing.The

increasing number of endorsements throws a valid question to the consumers. Is there a science

behind the choice of these endorsers or is it just by the popularity measurement? What are the

reasons which lead to impact of celebrity endorsement on brands? 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.

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Impact Regions of Celebrity Endorsement

While brand marketers with positive experiences would tend to believe that celebrity

endorsements work and some would disagree, but one would be sure that the magnitude of its

impact is difficult to measure even if sales figures are at our disposal. However, we can

understand why it works and the impact regions of celebrity endorsement.

The illustrations below explain the same: -

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How Celebrity Endorsements Influence the Consumer

The basis for the effectiveness of celebrity-endorsed advertising can be linked toKelman'sprocesses of social influence as discussed by Friedman and Friedman.According to Kelman,

there are three processes of social influence, which result in an individual adopting the attitude

advocated by the communicator:

Compliance, Identification & Internalization

These latter two processes are particularly applicable to celebrity-endorsed advertising.

Compliance infers that another individual or group of individuals influences an individual causehe or she hopes to achieve a favourable reaction from this other group. This process of social

influence is not directly applicable to celebrity advertising because there is little, if any,

interaction between the celebrity and the consumer.

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Identification applies to the situation wherein the individuals emulate the attitudes or behaviour

of another person or group, simply because they aspire to be like that person or group. This

process is the basis for referent power. It was found that celebrities are more commonly liked

than a typical consumer spokesperson.

Internalization as a process of social influence is said to occur when individuals adopt the

attitude or behaviour of another person because that behaviour is viewed as honest and sincere

and is congruent with their value system. The effectiveness of celebrity advertising traditionally

has not been strongly linked to this process, as a celebrity's reason for promoting a product can

just as easily be attributed by the consumer to an external motive (i.e., payment of fee) as to an

internal motive (i.e., the celebrity's true belief in the value and benefit of the product). An

important issue of concern relates to the development of a strategy for use in Celebrity

Advertising, which benefits from the dramatic impact of dual support of both the identification

and internalization processes of social influence. Celebrities are well-liked, but the techniques

that can be used to enhance their credibility as spokespeople, and therefore, tie-in more closely

with the internalization process needs to be looked into.

Effectiveness of Celebrity Endorsers

A study conducted by Charles Atkin and Martin Block focussed on alcohol advertising and

young audience to examine the impact of celebrity advertising in terms of social effects of

advertising. The sponsoring Company is the underlying source of any advertising message, but

the individual models depicted in the advertising serve as the more visible communicator in

many cases. The most thoroughly studied source quality is credibility. Research conducted by

social psychologists over the past 30 years demonstrates that a source perceived as highly

credible is more persuasive than a low credibility sender (Hovland and Weiss, 1951; McGuire,

1969; Hass, 1981). The sources that companies use to present their advertising message typically

attempts to project a credible image in terms of competence, trustworthiness or dynamism.Celebrity endorsers are considered to be highly dynamic, with attractive and engaging personal

qualities. Audience may also trust the advice given by some famous person, and in certain cases,

celebrities may even be perceived as competent to discuss the product. Friedman, Termini and

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Washington cite a 1975 study showing that celebrities are featured in 155 of prime-time TV

commercials. A later survey reported that this proportion was up to 20% (Advertising Age,

1978). The most widely used celebrities are sports figures, actors or other types of entertainers.

There are several reasons why a famous endorser may be influential: -

They attract attention to the advertisement in the cluttered stream of messages

They are perceived as being more entertaining

They are seen as trustworthy because of apparent lack of self-interest.

The final element is due to the wide-spread attribution that major stars do not really

work for the endorsement fee, but are motivated by genuine affection for the product (Kamen et

al, 1975). Despite the use of famous endorsers, there is little published evidence regarding the

effectiveness. In one experiment, an advertisement for a fictitious brand of Sangria wine featured

an endorsement attributed to either a celebrity (actor - Al Pacino), a professional expert, the

Company President, a typical consumer and no source (Friedman, Termini and Washington,

1977). College students read the ad and gave the ad 0-10 scales of believability, probable taste,

and intent to purchase. Across these three measures, the celebrity condition produced the highest

scores. While the 'no-source' control group had a purchase intention rating of 2.7, the subjects

exposed to the actor scored 3.9. Believability was rated 2.8 by control subjects versus 4.1 by

those seeing the celebrity endorsement. For taste, the baselines of 4.0 compares to the celebrity

group score of 5.6. None of the other three endorsers were as influential as the celebrated person

Brand Image Formation & Brand Preference

Having a congruent image between the brand and celebrity does not guarantee any

positive effect on consumers' brand preferences. The fundamental question is - what a

brand image really does to consumers? Baran and Blasko explained, "Since most

products aren't special, most advertising does all that so-called image stuff... There's no

information about the product, there's only information about the kind of people who

might be inclined to use the product. The view is echoed by Feldwick (1991)

who has suggested that the subjective experience of using a brand can be different from

the subjective experience of using an identical product without the brand reassurance. In

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the case of using celebrity advertising to build brand image, the effects are examined with

a social psychological framework.

Before we can scrutinize the effects of celebrity endorsement on the overall brand, we

have to ferret the implicit nuances that act as sources of strong brand images or values: -

Experience of Use: This encapsulates familiarity and proven reliability.

User Associations: Brands acquire images from the type of people who are seen using them.

Images of prestige or success are imbibed when brands are associated with glamorous

personalities.

Belief in Efficiency: Ranking from consumer associations, newspaper editorials, etc.

Brand Appearance: Design of brand offers clues to quality and affects preferences.

Manufacturers Name & Reputation: A prominent brand name (Sony, Kelloggs, Bajaj,

Tata) transfers positive associations. The celebritys role is the most explicit and profound in

incarnating user associations among the above mentioned points. To comprehend this, let us

analyze the multiplier

effect formula for a successful brand: -

S=P* D*AV -- the multiplier effect

Where

S is a Successful Brand

P is an Effective Product

D is Distinctive Identity

AV is Added Values

The realm of the celebritys impact is confined to bestow a distinctive identity and

provide AV to the brand; the celebrity does not have the power to improve or debilitate

the efficiency and features of the core product. Thus, we are gradually approaching an

evident proposition claiming, "The health of a brand can definitely be improved up to

some extent by celebrity endorsement. But one has to remember that endorsing a

celebrity is a means to an end and not an end in itself."

An appropriately used celebrity can prove to be a massively powerful tool that magnifies

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the effects of a campaign. But the aura of cautiousness should always be there. The fact

to be emphasised is that celebrities alone do not guarantee success, as consumers

nowadays understand advertising, know what advertising is, and how it works. People

realize that celebrities are being paid a lot of money for endorsements and this knowledge

leads them to cynicism about celebrity endorsements.

Sturcture of Indian automobile sector and some facts:

Structure:

The Indian automobile industry can be broadly classified into:

2 /3 Wheelers

Passenger Cars

Commercial Vehicles (LCV/HCV/MCV)

UV (Utility vehicles)

Tractors

The models in the car market can be fitted to different segments as given

below:

Category Models

Economy segment (upto Rs

0.25mn)

Maruti Omni, Maruti 800 etc.

Mid-size segment (Rs 0.25-0.45

mn)

Fiat Uno, Hyundai Santro, tata

Indica, Maruti Alto etc.

Luxury car segment (Rs 0.45- Tata Indigo, Honda City,

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1mn) Mitsibushi Lancer, Ford Ikon, Opel

Astra, Hyundai Accent & others

Super luxury segment

(above Rs

1mn)

Mercedes Benz & other

imported

models

The economy segment has a very large foothold over the Indian

automobilemarket as compared to the mid-size and luxury segment.

Segment Market Share (%)

Economy 90.2

Mid-size and luxury 9.8

Source: SIAM/ Auto Car India

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Data analysis and interpretation:

1.Occupation of respondent:

Occupation %tage

Business Class 25

Service Class 25

Student 30

Others 20

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Interpretation:From this pie-chart it is clear that majority of the respondents are students and rest of the

share is occupied by service and business class.

2. Age of the respondent:

AGE %AGE

18-25 30

26-32 20

33-39 30

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Above 40 20

Interpretation:This pie-chart depicts that mostly respondents are young and while rest are above 25years

3.Gender of the respondent:

GENDER %GE

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MALE 65

FEMALE 35

Interpretation:

This pie-chart depicts that 65% of the respondents are female and 35% are males.

4.Type of Vehicle:

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Vehicle %tage

Two-wheeler 45

Four-wheeler 35

Both 25

Interpretation:

This pie-chart depicts that 45% of the people have two-wheeler and 35% of the people

have four-wheeler and rest 20% have both two-wheeler and four-wheeler.

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5.Factors affecting purchase intention:

Factors %AGE

Price 20

Opinion-leader 15

celebrity endorser 35

Interpretation:

This pie-chart depicts that 35% of the people consider celebrity endorser while going for

the purchase, followed by brand name-with 30%.,opinion leader 15% and 20% people

consider price. Brand name usually covers all aspects like functional aspects viz.mileage, speed

etc. As people usually are more interested towards well known brands and if these brands are

advertised by famous celebrity it creates an huge impact.

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6.Like to see any celebrity endorsing your brand:

PREFERNCE %AGE

Yes 55

No 25

Cant say 20

Interpretation:

This pie-chart clearly indicates that 55% of the respondents want their products to be

advertised by celebrities, 25% dont want and 20% of the respondents werent sure. So,

this clearly shows how much important these celebrities are in the daily life of common

man.

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7.Male v/s Female celebrity endorser:

HYPOTHESIS TESTING

Step1: State Hypothesis:

Ho: Female celebrity endorser is more effective than that of male. .

Ha: Female celebrity endorser isnt more effective than that of male.

Step 2: Set the Rejection criteria:DF = 5-1 = 4At alpha .05 and 4 degrees of freedom, the crtitical value from the chi squaredistribution

table is 9.49

Frequency Observed

Preference Male Female Row Total

Strongly Agree 25 05 30

Agree 05 15 20

Indifferent 10 10 20

Disagree 5 10 15

Strongly Disagree 10 05 15

Column Total 55 45 100

Frequency Expected

Preference Male Female Row Total

Strongly Agree 55*30/100=16.5 45*30/100=13.5 30

Agree 55*20/100=11 45*20/100= 9.0 20

Indifferent 55*20/100=11 45*20/100= 9.0 20

Disagree 55*15/100= 8.25 45*15/100=6.75 15

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Strongly Disagree 55*15/100= 8.25 45*15/100=6.75 15

Column Total 55 45 100

-Calculation

Preference Male Female

Strongly Agree (25-16.5)2/16.5 (5-13.5)2/13.5

Agree (5-11)2/11 (15-9)2/9

Indifferent (10-11)2/11 (10-9)2/9

Disagree (5-8.25)2/8.25 (10-6.75)2/6.75

Strongly Disagree (10-8.25)2/8.25 (5-6.75)2/6.75

Chi-Square

Preference Male Female

Strongly Agree 4.38 5.35

Agree 3.27 4

Indifferent 0.09 0.11

Disagree 1.28 1.56

Strongly Disagree 0.37 0.45

= 20.85Interpretation:As the Chi-square test statistics 20.85 exceeds the critical value of 9.49 hence null

hypothesis is rejected and hence we reached at the result that our alternative hypothesis is

accepted. It is confirmed after the analysis that male celebrity endorser are more effective

than that of female celebrity.

8.Celebrity endorser as an effective method of persuasion:

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Preference %age

Strongly Agree 45

Agree15

Indifferent 10

Disagree 20

Strongly Disagree 10

Interpretation:

This chart depicts that mostly people agree that Celebrity endorsement is an effective tool

of persuasion. 45% of people strongly agree that celebrity endorsement is an effective

tool of persuasion and 20% of people disagree that it is one of the tool.

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HYPOTHESIS TESTING

Step1: State Hypothesis:

Ho: Celebrity endorsement is not an effective tool of persuasion to facilitate

customer to go for purchase. .Ha: Celebrity endorsement is an effective tool of persuasion to facilitatecustomer to go for purchase.

Step 2: Set the Rejection criteria:DF = 5-1 =At alpha .05 and 4 degrees of freedom, the critical value from the chi squaredistributiontable is 9.49Step 3: Compute the Test Statistics: = (O-E)2/E

Preference Observed Expected O-E (O-E) (O-E)/E

Strongly

Agree

45 20 25 625 31.25

Agree 15 20 -5 25 0.25

Indifferent 10 20 -10 100 5

Disagree 20 20 0 0 0

Strongly

Disagree

10 20 -10 100 5

= 41.5

Interpretation:

As the Chi-square test statistics 41.5 exceeds the critical value of 9.49 hence null hypothesis is

rejected and hence we reached at the result that our alternative hypothesis is accepted. Hence it

can be concluded that celebrity endorsement is and effective tool of persuasion to facilitate

customer to go for purchase.

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9.Celebrity endorsement affects my purchase decision while goingfor the purchaseof automobile products.

Preference %age

Strongly

Agree

30

Agree 15

Indifferent 10

Disagree 35

Strongly

Disagree

10

Interpretation:

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This chart depicts that 45% of the people agree strongly or simply on the fact that their

automobile purchase is being affected by celebrity endorsement,10 % of the people remain

indifferent and 45% of the people disagree with this fact.

HYPOTHESIS TESTING

Step1: State Hypothesis:Ho: Celebrity endorsement doesnt affect purchase decision of automobileproducts..Ha: Celebrity endorsement affects purchase decision of automobileproducts.

Step 2: Set the Rejection criteria:DF = 5-1 = 4

At alpha .05 and 4 degrees of freedom, the critical value from the chi squaredistributiontable is 9.49

Step 3: Compute the Test Statistics: = (O-E)2/E

Preference Observed Expected O-E (O-E) (O-E)/E

Strongly

Agree

30 20 10 100 10

Agree 15 20 -5 25 1.25

Indifferent 10 20 -10 100 5

Disagree 35 20 15 225 11.25

Strongly

Disagree

10 20 -10 100 5

= 32.5

Interpretation:

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can be concluded that celebrity endorsement affects purchase decision of automobile products.

10.Celebrity persona you like most:

prefernce %age

Bollywood stars 55

Sports star 25

None of the above 20

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HYPOTHESIS TESTING

Step1: State Hypothesis:Ho: People like to see bollywood stars endorsing their brand thansports star. .

Ha: People like to see sports stars endorsing automobile products than thatof bollywoodstars.

Step 2: Set the Rejection criteria:DF = 5-1 = 4At alpha .05 and 4 degrees of freedom, the critical value from the chi squaredistributiontable is 9.49

Step 3: Compute the Test Statistics: = (O-E)2/E

Celebrity

persona

Observed Expected O-E (O-E) (O-E)/E

Bollywood

stars

55 33.3 21.7 470.89 14.14

Sports star 25 33.3 -8.3 68.89 2.06

None of

the above

20 33.3 -13.3 176.89 5.31

= 21.51

Interpretation:



can be concluded that people like to see sports stars endorsing their products rather than

bollywood stars.

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11. You follow your favorite celebrity while purchasing new

automobile every time:

Response %tage

Every time 40

Rarely 25

Never 35

Interpretation:

This pie-chart depicts that 40% of people follow their favorite celebrity every times while

going for the purchase of new automobiles. That means frequency is pretty large. On the other

hand 25% of the people rarely follow their favorite celebrity. While 35% of the people doesnt

follow any celebrity for purchasing any of the automobile vehicle everytime.

12. Identify the following ads regarding various automobileproducts:

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More Car par car

The sun-shine car .

Why should boy have all the fun?..

What role you goanna play?

Interpretation:

Out of 100 respondents, 30 were able to identify the celebrity in whole 4 ads,

30 were able to identify 3, 20 were able to identify 2 and 10 were there who

identified only 1 of the ad. 10 people were there who werent able to identify

even a single celebrity. Majority of the respondent were quite familiar with

Priyanka Chopras Why should boy have all the fun? So majority of the

respondents were able to recognize the celebrity used in the advertisement

so it clearly tells that celebrity endorsement act as source of brand-building.

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Findings:After completing survey I found that:

Brand name and celebrity endorser are two factors that people consider before making a

purchase intention of automobile vehicle.

Maximum number of people wants to see celebrity endorsing their automobile vehicles that

means they have high involvement with the celebrities.

One of the abstract finding of the survey was regarding peoples orientation towards gender

biasness. This finding clearly indicated that people like to see male celebrities endorsing

automobiles than that of female celebrities.

Most no. of people believe that celebrity endorsement is an effective mean of persuasion i.e. it

convey the message clearly to the target audience regarding product offerings and persuade them

to go for the purchase.

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It was found that celebrity endorsement have an impact over the purchase of automobile

products. As large no. of people surveyed confirmed this fact.

It was found that while making every new purchase of an automobile most no. of people

follow celebrity endorser while rest of them denied this fact.

The results of brand recall were astonishing most no. of people were able to recognize the

celebrities endorsing the given advertisement. So it showed that celebrity endorsement is a

source of celebrity endorsement.

Conclusion:Despite the obvious economic advantage of using relatively known personalities as

endorsers in advertising campaigns, the choice of celebrities to fulfill that role has

become common practice for brands competing in today's cluttered media environment.

There are several reasons for such extensive use of celebrities. Because of their high

profile, celebrities may help advertisements stand out from the surrounding clutter, thusimproving their communicative ability. A brief assessment of the current market situation

indicates that celebrity endorsement advertising strategies can, under the right

circumstances, indeed justify the high costs associated with this form of advertising.

But it would be presumptuous to consider celebrity endorsement as a panacea for all

barricades. Celebrity endorsement if used effectively, makes the brand stand out,

galvanizes brand recall and facilitates instant awareness. To achieve this, the marketer

needs to be really disciplined in choice of a celebrity. Hence the right use of celebrity can

escalate the Unique Selling Proposition i.e. it can act as a source of brand-building of a

brand to new heights; but a cursory orientation of a celebrity with a brand may prove to

be claustrophobic for the brand.

It was found that people love to see celebrities endorsing their brands so the involvement

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of common man is pretty high with these celebrities. So marketers should use the right

celebrity matching with the product. During survey it was found that male celebrities are

considered to be better celebrity endorser than that of their female counterparts. This is

because lots of research regarding consumers behavior towards automobile indicates that

people view automobile as female so in order to attract the attention of target customers

they preferably use male celebrity endorser. Also it was found that people love to see

sports stars endorsing their automobile than bollywood stars. This is because of the fact

in India Cricket is very famous and people worship players like Sachin Tendhulkar,

Kapil Dev, Sourav Ganguly etc. So they love to see these players endorsing their

automobiles. At last I just want to say A celebrity is a means to an end, and not an end in

him/her.

Recommendations:

After studying impact of celebrity endorsement on buying behavior of customers in automobile

sector and as a source of brand-building I want to suggest following recommendations:

From study it was found that respondents were able to recognize the Priyanka Chopras

advertisement Why should boys have all the fun This advertisement was designed on such an

idea that everyone can recognize the brand of Scotty Pepp easily. So instead of hiring any

celebrity companies should try to create such nice innovative idea and then match the suitabilityof celebrity with the idea. This is also supported by the fact that Todays era is of Gen X their

taste changes very fast and wants fresh material.

This study reveals that celebrity endorsement act as a source of brand-building but it isnt the

complete solution. Company cant rely only on celebrity endorsement to sell their products but

they should follow an integrative approach so as to generate good sales volumes. They should

provide more schemes to their customers in order to sell their products.

One of the important recommendations that I want to give is that during this slowdown period

companies are cutting their advertisement expenditure but they shouldnt do this. This is because

this slowdown provide them an opportunity to differentiate themselves from their competitors.

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This is also supported by the researches. One of the research explained that during 1960s

recessions 290 global companies increased their advertisement expenditure and their sales

increased by whopping 300%. Some of the companies are well established brand name todays

like IBM, Microsoft, 3M etc.

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CASE: CELEBRITIES - TO USE OR NOT TO USE

Situation 1: Cadbury has always come up with sweet, emotional, clutter breaking commercials.

Who can forget the lady dancing on the cricket pitch to celebrate her boyfriend's century. But

when the company was hit with the worm controversy it had to rope in the national icon Amitabh

Bachchan.He embodied the values of Cadbury as a brand and connected with all of India

-mothers, teenagers, children, media persons and trader partners. The 'infomercial' that followed

had Bachchan first voicing his own 57 concerns, and then assuring consumers that his doubts

had been satisfactorily laid to rest (after the factory visit).This reinstated customer faith in

Cadbury and sales have now touched pre-worm crisis days.

Situation 2: Asian Paints will always be remembered for its 'Mera wallah cream' campaign and

more recently the 'Wah Sunil babu' campaign. There have been very forgettable celebrity

endorsements from Akshaye Khanna and Saif Ali Khan in the past (probably people were notable to visualize stars painting their own walls). This is a case of a company whose non-celebrity

commercials have done way better than their celebrity campaigns in terms of recall and message

delivery.

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Cases

1. Sharukh Khan - Mayur Suitings (Positive Impact)

Sharukh Mayur Khan is how this product came to be known, Sharukh brought to the product

his persona of high class lifestyle, giving the consumer the belief to aspire and good clothing a

sure way to reflect the aspiration. The ad shows a great fit between what the product stands for,

what the consumer expects and what the celebrity means to the consumer, hence explaining the

strong impact in sales and brand recall.

2. Dharmendra - Rajdoot Motorcycles (Positive Impact)

This strong man from yester years, still resonates as the only brand ambassador, who managed to

sell a motorcycle in each and every corner of India in the 80s. Dharmendras image of being a

brawny man, hailing from the rustic roots of India, gave Rajdoot motorcycles the perfect brand

ambassador it was looking for. He not only gave to the product a sturdy and robust image, butalso brought to the product trust and honesty which it was trying to build in its first time buyers.

3. Amitabh Bachchan (Cluttered Identity)

Our framework argues that exclusivity makes the product-celebrity association stronger thereby

making the product resonates with the qualities of the celebrity. In cases where the celebrity

endorses multiple products, he dilutes his equity.Theres no better example in the Indian industry

than Amitabh Bachchan who endorses ICICI Bank, Cadbury, Versa, Dabur, Rin, Parker Pens,

Pepsi, Nerolac Paints and many more. In each of the cases the ads use some or the other attribute

of Amitabh to endorse the product, but makes no strong link in the minds of the consumer.

Hence in the end the consumer is lost and has difficulty identifying, what does Amitabh really

stand for?

4. Rani Mukherjee - Hero Cycles (Negative Impact)

Rani Mukherjee endorsing a cycle makes a case where the celebrity is used only for her

popularity without looking for Brand celebrity fit. Cycles in India are generally used by men and

the target segment belongs to low income group. By using Rani, the consumers could

not be assured of the products qualities and could not relate the product to the ambassador.

Hence, the consumers were not motivated towards the product and the ad was called back,

thereby emphasizing the need for a brand-celebrity fit.

5. Hutch - The Child and the Dog (Created Spokesperson)

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Hutch managed to grab the attention of the consumers, by not using a celebrity. The child and

dog campaign came across as a fresh initiative at endorsing a product. The child and dog have

had a very high brand recall as they represent only Hutch and have been created by the company

according to the needs of the product and the message. It communicates to the consumer, We

are there, wherever you are and that too unobtrusively. The protagonist says all of the above

and creates a strong bond with the consumer.

6. Mohammad Azharuddin - Britannia (Change of the Celebrity

Image)

Mohammad Azharuddin, at the peak of his career was a brand ambassador for an assortment of

products. But the match-fixing case besmirched his image and all of the products started

disassociating their endorsements from him. Thus, a product is sold on basis of the qualities of

the endorser and with a change in the inherent value system of the celebrity; the

bond with the consumer is lost.

7. Narain Karthikeyan - Jordan / Formula 1 Racing (EnteringInternational Markets)

A celebritys endorsement through various cultural and social roadblocks is one of the critical

applications of our model; Narain is a case in point. The popularity of F1 as a sport in India owes

its genesis to use of Narain as a brand ambassador of the sport. His image and persona has been

used by the sport and the Jordan team to create brand awareness in India.

8. Sachin Tendulkar - Fiat Palio (Financial Viability)

Sachin Tendulkar was paid a huge sum of Rs. 12 Crore to endorse Fiat Palio, even though

Tendulkar as a brand could command such an exorbitant amount. Its for the company to

evaluate if the returns generated by the endorsement would commensurate the initial spend. In

this case due to excessive spending and failure of the product to take-off the advertisements had

to be withdrawn.

There is an increasing challenge to the marketing manager to develop and implement an

integrated marketing communication (IMC) plan to realize the true value of the celebrity

endorsements. There is a gradual shift from the traditional approach of showing celebrities in

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advertisement to making them the spokes-person of the brand. Companies have taken celebrity

endorsement to next level by projecting brands as a way of life. Smart companies are

using their brand ambassadors in other mediums such as movies to promote their brands.

E.g., Amitabh Bachchan, who endorses the financial instruments of ICICI Bank, is shown as a

branch-manager of ICICI Bank in the movieBaghban. Wooing the key existing and potential

target customers is the trait of a successful promotion strategy. However, the marketing manager

should be able to offer significant value propositions in the services / products offered to the

customers. Thus, one needs to integrate celebrity endorsement with other marketing programs

and ensure that the celebrity attributes align with the overall brand or company. Companies that

succeed in developing such an integrated IMC plans is the one to succeed in the long-term.

Bibliography:REFERENCES:

Philip A.Stroke(2009), "impact of celebrity endorsement on stockprices",Journal of Consumer Research, Vol. 14 No.March, pp.471-82.

Roy, Shubhadip (2007), "Consumers perceptual space and Indiancelebrities inrelation to brand attributes", Journal of Business Research, Vol. 37 No.1,pp.71-84.

Shimp (2007), "Celebrities as spokesperson", Journal of Retailing, Vol. 76No.2,pp.175-91.

Tellis (1998) "Celebrity endorsement in highly involved regime", Journalof

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the Academy of Marketing Science, Vol. 16 No.4, pp.74-94. Lang and Goodwill (1997), PSA- Do they really work? OxfordPress, Oxford, .

Freiden(1994), "Celebrity endorser as credible spokesperson", Journal of

Marketing Research,, Vol. 11 No. May, pp.156-63

WEBSITES:www.marketingmania.in/india.htmhttp://en.wiki.wikipedia.com/indian_industrywww.managementparadise.com/consumerbehaviour_celebrityendorsement_automobiles.htm http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=&id=acf176cd-6f53-42b6-a47b-72e34341cfe1&&Headline

http://www.businessweek.com/innovate/content/feb2008/id20080227_377233_page_2.htmhttp://www.telegraphindia.com/1081007/jsp/opinion/story_9933949.jsp

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APPENDIX

Questionnaire

Dear Respondents,I, Samarpita Bhattacharya, student of MBA,I am conducting a survey onImpact ofcelebrity endorsement on buying behavior of customers and as a source ofbrandbuilding. For this purpose I need your cooperation in fulfilling thisquestionnaire. It will

take few minutes of your precious time. It is make sure that informationobtained is forgeneral purpose only.

1) Name of the respondent

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9) Male endorser is more effective as compared to female endorser. Ratethisstatement.

Strongly agree Agree

Indifferent Disagree Strongly disagree

10) Celebrity endorsement affect my purchase decision while purchasingautomobilevehicles Rate this statement.

Strongly agree Agree Indifference Disagree

Strongly disagree

11) Out of the following celebrity persona whom do you like most? Bollywood Stars Sports star None of above

12) Do you follow your favorite celebrity while purchasing a new vehicleevery time?

Every time Rarely

Never

13) You are required to identify the following ads regarding variousautomobileproducts:

More Car par car The sun-shine car . Why should boy have all the fun?.. What role you goanna play?

14)Any suggestion..

Thanks for your valuable Contribution

course of independent study (repaired)

Documents