Integrated Marketing Communications

Department of Business and Industrial Management

Impact of Celebrity Endorsement on buying behavior of Consumers

(Automobile Sector)

Submitted to : Dr. Manisha Panwala Submitted by: Bhavik Desai (7) Rushabh Doshi (8)

MBA (F.T.) Sem. 3rd (Marketing)

IntroductionThere are large no. of brands available in the market. Some are veryfamiliar 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 endorsers 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 their brand. Businesses have long sought to distract and attract the attention of potential customers that live in a world of ever-increasing commercial bombardment.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 EndorsementMcCracken'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 in an advertisement (marcoms), is useful, because when celebrities are depicted in marcoms, they bring their own culturally related meanings, thereto, irrespective of the required promotional role."

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 emotionale, 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.

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

Celebrity endorsements are impelled by virtue of the following

motivesInstant Brand Awareness and Recall.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.

Automobile marketing in India:The competitive nature of the automobile industry has prompted the companies to take up new and innovative marketing strategies to thwart the competition. The B segment of cars is the segment which sees maximum competition as the consumer has a number of models to choose from and it's the volumes which drive the margins

Celebrity endorsements and testimonial advertisements have come a long way and they are also doing their bit to sell the cars. Super star Shahrukh Khan has been associated with Hyundai Motor Company for a long time and he comes regularly on television to promote the Santro car. Similarly Ford has roped in Junior Bachan for the promotion of the latest offering from the company Ford Fiesta.

On a similar note Saif Ali Khan and Rani Mukherjee is shown chasing each other with a Chevrolet aveo. Aamir Khan who is considered to be one of the most talented actors in the industry is frequently seen changing roles on screen to promote the Toyota Innova, a car which is generations ahead of its predecessor Toyota Qualis.Cricketers haven't been left behind in the race of promoting cars; Fiat Palio had received a great thrust when the promotion of the car was taken up by the batting maestro Sachin Tendulkar.In addition to the publicity and advertisement which is done by the companies there are certain innovative strategies which are taken up by the companies to beat the competition from time to time.

Brand V/s CelebritySometimes the celebrity is more highlighted than the products, making no recall value of the product. When Rahul Dravid advertised for Castrol, the brand gets overshadowed by the celebrity & that is also a wrong choice of celebrity. Dravid is never famous for racing & when he promotes the product, if gives a wrong signal to the customers. The product can use Narain Karthikeyan to endorse it which will give some reliability to the product.Cadbury India used Amitabh Bachchan not only to recover their image from worm controversy but also to establish itself as the leading company in the Indian chocolate market. Aamir Khan’s ad campaign ‘Thanda Matlab Cocacola’ was also a huge hit. Not only that the company uses the superstars to come out from the pesticides controversy. Dabur brings in Amitabh Bachan in the stagnant chawanprash market which brings in boost in market and helps Dabur to remain the market leader.

Research Methodology

Objectives of Study:

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.Sampling Type:Here the type of sampling is non-probability convenience sampling.

Research Design:From amongst the three research design i.e. Exploratory research design, descriptive research design and causal research design, the researcher has used 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 can collect data either through primary source or secondary source.

a) Primary data: These are those data which are collected for the first time, and thus happen to be original in character. Here primary data is the structured questionnaire. b) Secondary data: These are those which have already been collected by someone else and which have already been passed through the statistical process. The researcher has collected it from the sources like internet, published data etc.

Sample Size:Here the sample size is 50 respondents.

Data Analysis and Interpretation

Occupation of Respondents

16%

28%40%

16%

No. of respondents

Business ClassService ClassStudentsOthers

Business Class 8Service Class 14Students 20Others 8

Interpretation 40 % students are affected by celebrity endorsements whereas business class people are least affected by celebrity endorsements which only 16 % of the entire sample size.

Age

Age of Respondents

No. of Respondents

18-25 2026-32 1133-39 740 or above 12

40%

22%

14%

24%

No. of Respondents

18-2526-3233-3940 or above

Interpretation 40 % of the respondents are between the age 18-25 whereas people between 33-39 are of only 14 % of the entire population.

Gender

56%44%

No of Respondents

MaleFemale

GenderNo of Respondents

Male 28Female 22

50

Interpretation56 % of the respondents were females and 44 % are males.

Vehicle Owners

Type of Vehicle

No. of Respondents

Two-Wheeler 23Four-Wheeler 11Both 16

50

46%

22%

32%

No. of Respondents

Two-WheelerFour-WheelerBoth

Interpretation46 % of respondents have two-wheelers and only 22 % of the respondents have four wheelers.

Factors affecting purchase intention

Factors affecting purchase intention

No. of Respondents

Price 24Opinion-leader 6Celebrity endorser 19Brand Name 16

37%

9%

29%

25%

No. of Respondents

PriceOpinion-leaderCelebrity endorserBrand Name

Interpretation37 % of the respondents said that price was the major factor in purchase intention.29 % was affected by celebrity endorsers in buying the product.

Would like to see any celebrity endorsing your brand

No. of respondents

Yes 31No 12Can't Say 7

62%24%

14%

No. of respondents

YesNo Can't Say

Interpretation62 % of the respondents would like to see their favorite celebrities endorsing the product where as only 24 % of the respondents would not like to see their endorsements.

Celebrity Personnel you like the most

Bollywood Star 32Sports Star 16None of The above 2

64%

32%

4%

No. of Respondents

Bollywood StarSports StarNone of The above

Interpretation64 % of respondents would like Bollywood star’s endorsing their product where as only 32 % want sports stars’ endorsing the products of their choice.

You follow your favorite celebrity while purchasing new automobile

Everytime 20Rarely 18Never 12 40%

36%

24%

No. of Respondents

EverytimeRarelyNever

Interpretation40 % of the respondents follow their favorite celebrity while purchasing automobile where as 36 % rarely follow their favorite celebrity.

Male v/s Female Celebrity Endorser

Step1: State Hypothesis:H0: Female celebrity endorser is more effective than that of male. H1: Female celebrity endorser isn’t more effective than that of male.

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

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

Frequency Observed

Preference Male Female Row totalStrongly Agree 11 10 21Agree 8 7 15Indifferent 5 3 8Disagree 2 2 4Strongly Disagree 1 1 2Total 27 23 50

Frequency expected

Preference Male Female Row totalStrongly Agree 11.34 9.66 21Agree 8.1 6.9 15Indifferent 4.32 3.68 8Disagree 2.16 1.84 4Strongly Disagree 1.08 0.92 2Total 27 23 50

Chi Square Calculation

Preference Male FemaleRow total

Strongly Agree -0.059964727 0.070393375Agree -0.024691358 0.028985507Indifferent 0.314814815 -0.913043478Disagree 1.703703704 0.173913043Strongly Disagree -0.148148148 0.173913043

Total Chi Square = 1.319876

Interpretation:As the Chi-square test statistics 1.32 does not exceeds the critical value of 9.49 hence nullhypothesis is accepted and hence we reached at the result that our H1 isaccepted. It is confirmed after the analysis that female celebrity endorser are more effectivethan that of male celebrity.

Celebrity endorsement affects my purchase decision while going for the purchase of automobile products.

Step1: State Hypothesis:Ho: Celebrity endorsement doesn’t affect purchase decision of automobile products. H1: Celebrity endorsement affects purchase decision of automobile products.

Step 2: Set the rejection criteria:DF= 5-1 = 4At alpha .05 and 4 degree of freedom, the critical value from the chi square distribution table is 9.49

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

(O-E)*(O-E)/E

Strongly Agree 15 10 5 25 2.5Agree 8 10 -2 4 0.4Indifferent 5 10 -5 25 2.5Disagree 17 10 7 49 4.9Strongly Disagree 5 10 -5 25 2.5Total 12.8

Interpretation:As the Chi-square test statistics 12.8 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 affects purchase decision of automobile products.

Celebrity endorsement affects my purchase decision while going for the purchaseof automobile products.

Step1: State Hypothesis:

Ho: Celebrity endorsement doesn’t affect purchase decision of automobile products.H1: Celebrity endorsement affects purchase decision of automobile products.

Step 2: Set the rejection criteria:DF= 5-1 = 4At alpha .05 and 4 degree of freedom, the critical value from the chi square distribution table is 9.49

Preference Observed Expected O-E

(O-E)*(O-E)

(O-E)*(O-E)/E

Strongly Agree 15 10 5 25 2.5Agree 8 10 -2 4 0.4Indifferent 5 10 -5 25 2.5Disagree 17 10 7 49 4.9Strongly Disagree 5 10 -5 25 2.5Total 12.8

Interpretation:As the Chi-square test statistics 12.8 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 affects purchase decision of automobile products.

Celebrity persona you prefer the most

Step1: State Hypothesis:

Ho: People like to see SPORT stars endorsing their brand than bollywood star. H1: People like to see bollywood stars endorsing automobile products than that of sport starstars.Step 2: Set the Rejection criteria:DF = 5-1 = 4At alpha .05 and 4 degrees of freedom, the critical value from the chi square distributiontable is 9.49

Celebrity Persona Observed Expected (O-E)(O-E)*(O-E)

(O-E)*(O-E)/E

Bollywood Star 32 18.33 13.67 186.8689 10.19476268

Sport Star 16 18.33 -2.33 5.4289 0.296235679

None of the Above 2 18.33 -16.33 266.6689 14.54828151

25.03927987

Interpretation:As the Chi-square test statistics 25.04 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 people like to see Bollywood stars endorsing their products rather than sport stars.

Findings• 40 % students are affected by celebrity endorsements whereas business class people are least affected by celebrity endorsements which only 16 % of the entire sample size.• 40 % of the respondents are between the age 18-25 whereas people between 33-39 are of only 14 % of the entire population.• 56 % of the respondents were females and 44 % are males.• 46 % of respondents have two-wheelers and only 22 % of the respondents have four wheelers.• 37 % of the respondents said that price was the major factor in purchase intention 29 % was affected by celebrity endorsers in buying the product.• 62 % of the respondents would like to see their favorite celebrities endorsing the product where as only 24 % of the respondents would not like to see their endorsements.• 64 % of respondents would like Bollywood star’s endorsing their product where as only 32 % want sports stars’ endorsing the products of their choice.• 40 % of the respondents follow their favorite celebrity while purchasing automobile where as 36 % rarely follow their favorite celebrity.• As the Chi square test statistics is 1.32 which does not increase the expected value of 9.49 hence null hypotheses is not rejected. Thus H0 is accepted.

Conclusion

•Price 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 people’s orientation towards gender biasness. This finding clearly indicated that people like to see female celebrities endorsing automobiles than that of male 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.•In country like India where people worship Bollywood actors as god. One of the finding revealed that people admire Bollywood actors as better celebrity persona than that of sports stars.•People usually follow their favorite celebrity for a new purchase. So we can say that the influence of celebrity is a bit high for new purchase.

Bibliography

•www.marketingmania.in/india.htm

•http://en.wiki.wikipedia.com/indian_industry

•www.managementparadise.com/consumerbehaviour_celebrityendorsement_automobiles.htm

•http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=&id=ac f176cd-6f53

-42b6-a47b-72e34341cfe1&&Headline

•http://www.businessweek.com/innovate/content/feb2008/id20080227_377233_page_2.htm

•http://www.telegraphindia.com/1081007/jsp/opinion/story_9933949.jsp

•http://www.chillibreeze.com/articles/Celebrity-endorsement.asp

•http://advertising.about.com/od/celebrityendorsements/Celebrity_Endorsements.htm

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