CELEBRITY

ENDORSEMENTS

Submitted by:

Dileep Bajaj 10DM-000 [email protected]

Himaja Venkateswara 10DM-063 [email protected]

Anshul Jain 10IT-006 [email protected]

Karan Grover 10IB-000 [email protected]

Gayatri Iyer 10FN-000 [email protected]

Submitted to:
Dr. Gunjan Malhotra

Prof-Business Statistics

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 Institute of Management Technology, Ghaziabad

INTRODUCTION

Celebrity endorsement is a special type of advertisement which includes a famous

person from film fraternity, athletes, and sports, modelling world etc. It helps in promoting
the product brand and also increasing the sales of the product. Celebrity endorsement not
only has developed in recent years, it is being used from the past for promoting the product.
This type of marketing strategy is used to promote the product and has proved in itself a boon
in advertising world. It is mainly used to influence the consumer who comes across these
advertisements as it is accessed in the consumers mind for many days even after the
advertisement. Celebrity endorsement has not always helped in promoting the product but it
has been developed considerably over the years. It is very expensive to endorse a celebrity for
a product but in the long run it has helped in increasing the sales of the product. Celebrities
are also interested in endorsing themselves in the product as they get compensation for it and
their image is been developed considerably. Businesses have long sought to distract the
attention of the potentials customers that live in a world of ever increasing commercial
bombardment. Everyday consumers are exposed to thousands of voices and images in
magazines, news paper, and on billboards, websites, radio and television. Every brand
attempts to steal 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 for subject‘s attention. Also from
the marketing communications perspective, It is vital that firms design strategies that help to
underpin competitive differential advantage for the firm‘s product or services.

The term celebrity refers to an individual who is known to the public (actor figure,
entertainer, etc.) for his or her achievements in the areas other than that of the product class
endorsed. Celebrities appear in public in different ways-

First, they appear in public when fulfilling their profession, e.g., Viswanathan Anand, who
plays chess in front of the audience.

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Secondly, celebrities appear in public by attending special celebrity events, e.g., award
ceremonies, Inauguration or world premieres of movies.

Thirdly, they are present in news, fashion, magazines and tabloids, which provide second
information on events and the private life of celebrities through mass media channel (e.g.,
Kaitrina Kaif is being regularly featured in various publications).

Lastly, celebrities act as spokes-people in advertising to promote products and services,

which is referred to celebrity endorsement.

Celebrity is a person who has excelled in his / her field of action or activity. In our
day to day activity, we perform many acts, may at home, at work place, on field in sports, in
social life. Queen of Chambal valley was very famous, but was terror before her surrender
to police. But she never becomes celebrity. But an actress Ms Seema Biswas who acted in
film on "Bandit Queen” became very famous and a Celebrity. They pull crowds with their
presence only. If it is understood that Amitabh Bachchan is coming for shooting a film, to a
particular location on a particular day , then there is big commotion in that area. Police
worry about law and order situation, even young generation throng there in big nose to have
glimpses of Amitabh Bachchan and even wait since early morning leaving aside their.
Celebrities are people who enjoy public recognition by a large share of a certain group of
people. Whereas attributes like attractiveness, extraordinary lifestyle or special skills are
just examples and specific common characteristics cannot be observed, it can be said that
within a corresponding social group, celebrities generally differ from the social norm and
enjoy a high degree of public awareness.

The dawn of 21st century saw the phenomenon of celebrity endorsement gaining
prominence in our country. Multinationals as well as domestic companies are going the
extra yard to sign up leading Bollywood stars for endorsing their brands.

In recent times, we had Shahrukh Khan- Santro campaign with the objective of
overcoming the hindrance that an unknown Korean Company Hundai Motors faced in
Indian Market. The objective was to earn faster brand recognition, association and
emotional unity with the target group.

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 'MS Dhoni' leads among the celebrities in terms of endorsing number of advertisers
on TV during H1 '2010. 'Shahrukh Khan' and 'Sachin Tendulkar' were at the second
and third place endorsing for #16 and #15 advertisers respectively during H1 '2010

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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. Heavy regulation and governmental regulations

Some bigger companies from their global experience introduced the concept of celebrity
endorsement. HLL has used Hindi film stars to endorse their beauty soap Lux since the
fifties.

Phase 2: The Growth Phase (1980-1990)

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The introduction of television added a variable effective medium of communication. Indian
stars going global with events like Asiads and World Cup victory. Vimal, Thums-Up,
Gwalior and Dinesh are some of the other brands that used star-appeal in the early days of
mass advertising. There was a spurt of advertising, featuring stars like Tabassum (Prestige
Pressure-cooker), Jalal Agha (Pan Parag Pan-masaala), Kapil Dev (Palmolive Shaving
Cream) and Sunil Gavaskar (Dinesh Suitings).

Phase 3: Globalization
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.

LITERATURE REVIEW

Writing a literature review is about understanding a topic, what has already been
done how it has been researched by other authors and what the key issues are. Literature
review is the selection of available documents, both published and unpublished. In our theory
we are only studying published documents.

 Extensive research has been undertaken into the use of celebrities to endorse a
particular company and its products or services. This research indicates that the
effectiveness of celebrity endorsers is moderated by a number of factors, including
product-celebrity alignment and target receiver characteristics. Celebrity endorsement
can be effective in distinguishing a company's products or services from those of its
competitors, but research has produced mixed results regarding the choice of
celebrity.
(http://www.faqs.org/abstracts/Business/Celebrity-endorsement-a-literature-review-
Green-marketing-multiplier-for-appropriate-technology-tran.html#ixzz0xEhmNS1C)
 Involving a celebrity does not guarantee success. According an article in the March
2009 issue of Marketing Mastermind, Celebrity endorsements are used extensively
today by a variety of brands.However, the presence of a celebrity alone cannot attract
today’s smart consumers who can discriminate and judge the brand with or without
the association of celebrities. Hence the organisations must also strengthen their
brands so that the celebrity power may not overshadow brand power. In the long run

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 product performance and services offered always stand ahead of the selling power of
celebrities.
 The celebrity should have universal appeal .The success of Wynn Telecom is
testimony to that. According to Naved Chaudhary the CMO of the brand ,the key is to
effectively utilise the celebrity .He should be someone who can cut across masses and
classes and still have a mass appeal.
 The celebrity should not be bigger than the brand.An article in the July issue of 4Ps
Business and Marketing gives a very effective example. Vikas Jain,Business
Director,Micromax shares says”People may sometimes forget the brand but not the
celebrity .They’ll come to the store asking Woh Akshaywala phone dena”
 The celebrities should be decolonised. Even today in most FMCGS the stuff from
abroad is perceived to be superior(4Ps Business and Marketing, July 2010).Brands
have to realise that the Indian minds have to decolonised and seduced with reasons to
buy celebrity merchandises that better be convincing both on the ground and in the
mind.
 The controversies that the celebrities get into might affect the brand image .The Tiger
Woods incident has given enough food for this thought. According to the January
2010 issue of 4Ps Business and Marketing Tiger lost out of 5 big endorsers within a
month .Though the celebrity ensures brand recall the public might start associating the
controversy with the brand which might go against it.
 The world’s biggest brands do not have celebrity brand ambassadors. Enhancing the
life of the customer and providing a competitive advantage guarantees success. IBM,
Google, Intel, Microsoft do not need anyone endorsing them (4Ps Business and
Marketing, Jan 2010)
 Celebrity Management is in India is still at a very nascent stage. This is why perfect
match between brand and celebrity is missing(The Economic Times) .It is ultimate the
consumers who lose out.
 Celebrities do not use the product that they endorse. An internationally renowned
basketball star is shown in a perfectly framed piece of film footage. He is lighted
heroically; he glides down the court, slams home a dunk, turns to the camera and
says:
 "I couldn't have done it without my [insert brand name of shoe or energy drink]. And
the funny thing is, they told me that they couldn't pay me any money for this
commercial. [Brand name of competing shoe or competing energy drink] offered me
$40 million over 10 years to tell you that I like their [shoe or energy drink], but the
fact is I like this [shoe or energy drink] better. That's why I'm telling you to buy it --
because I buy it, too, and with my own money."
 The athlete would likely be declared clinically insane. The world doesn't work that
way (CNN.com)
 Brands are not loyal with their ambassadors and people as a result are not faithful to
the brand.
 “Two years ago Louis Vuitton hired Jennifer Lopez to promote its status handbags,
then replaced her less than a year later with starlets including Diane Kruger and
Scarlett Johansson. Now it has ushered them out and enlisted Uma Thurman to appear
in ads for its cherry-emblazoned monogram bags”(nytimes.com).
 There is a disadvantage of the same celebrity endorsing multiple brands. We can’t say
that a celebrity may be effective endorser of a product cannot. For instance Bill Cosby
was an effective endorser for Coca Cola with $25 million contract (Advertising Age,

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 1986) but could not produce an impact on the performance of E.F Hulton and Texas
Instruments. (Britanica.com)

Research Gaps:
Celebrity endorsements play a very important role in convincing the customer
today. However there are numerous ads and numerous celebs. Brands are not loyal with their
ambassadors and this often sends wrong signals to the consumers. The same celebrity
advertising for a cola brand and a car also is confusing. There are also problems like the
celebrity overgrowing the brand and most of times the brand not having an overall effect on
the consumer.
We want to probe further and bridge the gap between the celebrity and the brand .We will do
this by finding out which factors affect our consumers the most. We also want to find out
which factors actually affect the purchase decision of the final buyer.

OBJECTIVES

 To identify the Trends and Challenges involved in using Celebrities for brand
endorsement.
 To identify the influence of celebrity endorsement on consumer buying behaviour
 To study celebrity endorsement as a source of brand building
 To research the various dimensions of celebrity endorsements and quantify which of
them is prominent
 To establish a relationship between consumer behaviour and celebrity endorsement

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). χ2 also enables us to explain
whether or not two attributes are associated or related to each other.

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To test the goodness of fit:
It helps to test goodness of fit by using null and alternate hypothesis.

STATISTICAL TOOLS TO BE USED

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 = Σ χ2=Σ (( Oi- Ei)2/Ei)

Where,
O- Observed value
E- Expected value
Degree of freedoms=(R-1)*(C-1)

Level of significance=5

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. Our 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 can collect
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. We will be using the structured questioners.

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b) Secondary data: These are those which have already been collected by someone else and
which have already been passed through the statistical process. It is collected from the
sources like internet, published data etc.

Sampling Technique:
We have used Random Sampling Method in this research project.

Population of the study

We conducted the survey randomly at different places

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.

LIMITATIONS

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
 Sample for the study taken is of only ** 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 have filled their true behaviour. This can also be a constraint of the
study

Data Analysis

Question 1: To what extent does the celebrity world interest you?

 Greatly
 Considerably
 Moderately
 Not at all

Observations:

Frequenc
Label y

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 Greatly 7
Considerabl
y 25
Moderately 31
Not at all 7
TOTAL 70

Frequency
7 7

Greatly
Considerably
Moderately
Not at all
25
31

Testing:

Confidence Interval for a Proportion

Frequenc Proportio
Label y n
Greatly 7 0.1
Considerabl
y 25 0.3571429
Moderately 31 0.4428571
Not at all 7 0.1
TOTAL 70 1

Hence, we can say that the proportion of the sample that is interested by the celebrity world is
0.9
(1 - Proportion of “Not at all” category)

Confidence Interval Calculation

Significance Level Chosen = 5 %

Z-Value at 5% Significance Level, z = 1.96
Proportion of sample that is interested by celebrity world, p = 0.9
Sample size, n = 70

Upper Confidence Interval = 0.9702

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Lower Confidence Interval = 0.8297

Conclusion: It can be said with 95% confidence that 82.97% to 97.02% of the population is
interested by the celebrity world.

Question 2: To what extent do the following external factors contribute to your

purchase decision?

 Family- Extremely Moderate Little

None
 Friends- Extremely Moderate Little None
 Media- Extremely Moderate Little None
 Celebrities- Extremely Moderate Little None

Observations:

Extremel Moderat
Factors y e Little None Total
Family 31 23 13 3 70
Friends 9 45 13 3 70
Media 8 27 25 10 70
Celebrities 5 12 33 20 70
Total 53 107 84 36 280

Family Friends

Extremely Extremely
Moderate Moderate
Little Little
None None

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 Media Celebrities

Extremely Extremely
Moderate Moderate
Little Little
None None

Testing:

Ho: External Environment does not have an effect on purchase decision

H1: External Environment has a considerable effect on purchase decision

Chi-Square Test

Actual Frequencies
Moderat
Factors Extremely e Little None Total
Family 31 23 13 3 70
Friends 9 45 13 3 70
Media 8 27 25 10 70
Celebrities 5 12 33 20 70
Total 53 107 84 36 280

Expected Frequencies
Moderat
Factors Extremely e Little None Total
Family 13.25 26.75 21 9 70
Friends 13.25 26.75 21 9 70
Media 13.25 26.75 21 9 70
Celebrities 13.25 26.75 21 9 70
Total 53 107 84 36 280

Chi Square Calculation

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 fo fe fo-fe (fo-fe)^2 (fo-fe)^2/fe
31 13.25 17.75 315.0625 23.77830189
23 26.75 -3.75 14.0625 0.525700935
13 21 -8 64 3.047619048
3 9 -6 36 4
9 13.25 -4.25 18.0625 1.363207547
45 26.75 18.25 333.0625 12.45093458
13 21 -8 64 3.047619048
3 9 -6 36 4
8 13.25 -5.25 27.5625 2.080188679
27 26.75 0.25 0.0625 0.002336449
25 21 4 16 0.761904762
10 9 1 1 0.111111111
5 13.25 -8.25 68.0625 5.136792453
12 26.75 -14.75 217.5625 8.13317757
33 21 12 144 6.857142857
20 9 11 121 13.44444444
Chi
      Square 88.74048137

Degrees of Freedom= (4-1)*(4-1) = 9

Significance Level Chosen= 1%

Critical Value of Chi Square corresponding to 1% Sig. Level and 9 dof = 21.66

Chi Square as per calculation = 88.74

Since the value of calculated chi square is greater than the critical value,

We reject Ho and accept H1

Conclusion : External environment like family, friends, media and celebrities do have a
considerable effect on purchase decision of an individual

Question 3: What characteristics of a celebrity are most important when endorsing a

brand?
 Trustworthiness- Extremely Important Moderately Important Little Important
Not Important
 Attractiveness- Extremely Important Moderately Important Little
Important Not Important
 Expertise- Extremely Important Moderately Important Little Important
Not Important
 Familiarity- Extremely Important Moderately Important Little Important
Not Important

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Observations:

Extremel Moderate
Characteristi y ly Little Not
Total
c Importa Importan Importa Importa
nt t nt nt
Trustworthine
33 26 6 5 70
ss
Attractiveness 27 26 13 4 70
Expertise 20 31 13 6 70
Familiarity 31 28 7 4 70
Total 111 111 39 19 280

Trustworthiness Attractiveness

Extremely
Extremely
Important
Important
Moderately
Moderately
Important
Important
Little
Little Important
Important
Not Important
Not Important

Expertise Familiarity

Extremely Extremely
Important Important
Moderately Moderately
Important Important
Little Little
Important Important
Not Important Not Important

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 Testing:

Calculation of Weighted Means

Extreme Moderate
Characteristi ly ly Little Not
Label
c Importa Importan Importa Importa Weighted
nt t nt nt Total Mean
Frequenc
33 26 6 5
y 70  
Trustworthine Weighta
3 2 1 0
ss ge    
0.747619
99 52 6 0
f*w 157 05
Frequenc
27 26 13 4
y 70  
Weighta
Attractiveness 3 2 1 0
ge    
0.695238
81 52 13 0
f*w 146 1
Frequenc
20 31 13 6
y 70  
Weighta
Expertise 3 2 1 0
ge    
0.642857
60 62 13 0
f*w 135 14
Frequenc
31 28 7 4
y 70  
Weighta
Familiarity 3 2 1 0
ge    
0.742857
93 56 7 0
f*w 156 14

Conclusion: Trustworthiness and Familiarity are the most important characteristics of

a celebrity when endorsing a brand.

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Question 4: To what extent do the following attributes of a celebrity catch your
attention in an advertisement?
 Beautiful- Very High High Average Low Very Low
 Classy- Very High High Average Low Very Low
 Sexy- Very High High Average Low Very Low
 Attractive- Very High High Average Low Very Low

Observations:

Very Averag Very

Attributes High Low Total
High e Low
Beautiful 23 30 15 2 0 70
Classy 30 33 6 1 0 70
Sexy 16 31 17 4 2 70
Attractive 23 32 11 3 1 70
Total 92 126 49 10 3 280

Beautiful Classy

Very High Very High

High High
Average Average
Low Low

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 Sexy Attractive

Very High Very High

High High
Average Average
Low Low
Very Low Very Low

Testing:

Calculation of Weighted Means

Characteristi Very Averag Very Tota Weighted

Label High Low
c High e Low l Mean
Frequenc
23 30 15 2 0 70
y  
Beautiful Weightag
5 4 3 2 1  
e  
f*w 115 120 45 4 0 284 0.811428571
Frequenc
30 33 6 1 0 70
y  
Classy Weightag
5 4 3 2 1  
e  
f*w 150 132 18 2 0 302 0.862857143
Frequenc
16 31 17 4 2 70
y  
Sexy Weightag
5 4 3 2 1  
e  
f*w 80 124 51 8 2 265 0.757142857
Frequenc
23 32 11 3 1 70
y  
Attractive Weightag
5 4 3 2 1  
e  
f*w 115 128 33 6 1 283 0.808571429

Conclusion: Advertisements consisting of "Classy" celebrities primarily catch the

attention of viewers

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 MANAGERIAL IMPLICATIONS

The report was linked to specific managerial suggestions regarding more effective use of celebrities to
enhance brand equity:
 Celebrity endorsements will be more effective when used consistently over time to increase the
strength of the link between the celebrity and the endorsed brand.
 Celebrity endorsements will be more effective when the ad execution is simple, clean, and free of
irrelevant design elements. Focus on the celebrity and the brand together.
 Celebrity endorsements will be more effective when using a celebrity who is not already strongly
associated with another product or service.
 Celebrity endorsements will be more effective when using a celebrity with a high “fit”,
“congruence”, or “belongingness” with the endorsed brand.
 Celebrity endorsers can be used to effectively reinforce and/or create an image for a product or
service.
 Test potential brand/celebrity combinations to ensure that the impression and image of the
celebrity is positive for the target audience.
 Celebrity endorsements will be more effective for less familiar brands
 Celebrity endorsers will be more effective for brands for which consumers have limited
knowledge/facts.
 Celebrity endorsers will be more effective when integrated across the elements of the marketing
mix.
 Caution in choice of celebrity endorser is warranted given the potential risk of tarnishing the
brand’s image

BIBLIOGRAPHY

[1] Meenal Dhotre(2009),”Celebrity endorsements on Indian Television”,Marketing

Mastermind,Vol 9,17-20

[2] Supriya Patra and Saroj.K.Datta(2010) ,”Celebrity Endorsement in India-Emerging

Trends and Challenges”,Journal of Marketing and Communication,Vol 5,16-23

[3]Monojit Lahiri(July 2010), “Bollywood Stars’ merchandise fails to ignite sales”,4Ps

Business and Marketing,Vol 5 Issue 14,50-51

[4] Deepak Rajan Patra(Jan 2010),”You Fumble and I say Good Bye”, 4Ps Business and
Marketing,Vol 5,Issue 1,38

[5]Surbhi Chawla(July 2010),”Playing it on Celebrities”,4 Ps Business and Marketing Vol 5

Issue 13 ,38-39

[6] Ayesha Farooq and Nazia Khan (2007),”Celebrity Endorsement and Consumer
Behaviour”, Journal of Indian Management and Strategy ,Vol 12 No 4,42-46

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[7] Bob Greene, 2010,”Are Celebrity Endorsements worthless”,
http://edition.cnn.com/2010/OPINION/04/04/greene.endorsements.celebrities/index.html

[8]ET Bereau, Feb 2010,”Celebrity Management is still evolving in India”

http://economictimes.indiatimes.com/features/brand-equity/Celebrity-management-is-still-
evolving-in-India/articleshow/5529633.cms
[9] Fareeda Saleem, 2008, “Impact Of Gender And Age On Single And Multiple Celebrities
Endorsements”
http://www.britannica.com/bps/additionalcontent/18/35601956/IMPACT-OF-GENDER-
AND-AGE-ON-SINGLE-AND-MULTIPLE-CELEBRITIES-ENDORSEMENTS

[10] Indiantelevision.com's AdEx India Analysis, July 2010,”Overview of Celebrity

endorsements on TV during H1 2010”
http://www.indiantelevision.com/tamadex/y2k10/july/tam30.php

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[11] Mythili Bhusnurmath, 2010,”Celebrity endorsements can be a double edged sword”
http://economictimes.indiatimes.com/policy/Celebrity-endorsements-could-be-a-two-edged-
sword/articleshow/5870233.cms

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