Impact of Celebrity

Endorsements on Consumer
brand preference

Shifali Mandhania
Study Circle

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Agenda

Introduction

Growth of Celebrity Endorsements

Celebrity, brand and consumer

Advantages

Disadvantages

Objectives and Methodology

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 Introduction

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 Who is a celebrity ??

`Enjoy public recognition

Experts of their respective fields
Wider influence in public life & societal domain.

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

Celebrity endorsement is a special type of advertisement

which includes a famous person from film fraternity,
athletes, sports, modeling world etc

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The root of the concept

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

Cocoa

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

Late Jalal Agha -Pan parag

Tabassum -Prestige pressure cooker
Sunil Gavaskar -Dinesh suitings
Kapil Dev -Palmolive shaving cream

HLL has used Hindi film stars to endorse their beauty soap LUX since the
fifties.
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Celebrity Endorsement in India
Phase 1: The Pioneering Phase (1950-1980)
This phase was characterized by: -
1. Limited channels of communication
2. Demand exceeded supply
3. Due to heavy governmental regulations, only few big companies,
from their global experience, could introduce the concept of celebrity
endorsement.

Phase 2: The Growth Phase (1980-1990)

The introduction of television added a variable effective medium of
communication. Indian stars going global with events like Asiads
and World Cup victory.

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Celebrity Endorsement in India cont..

Phase 3: Globalisation
In highly competitive markets, the following realities about brand
management exist: -

1.Product differentiating factors are duplicable and imitable.

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

meaning.

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 Growth of Celebrity Endorsements

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 Growth of celebrity endorsements

A Celebrity Endorsement Survey conducted by IMRB (India Market

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

A study by AdEx India, a division of TAM Media Research, finds that

there has been 49 per cent growth in celebrity endorsement ad
volumes on TV during 2007 compared to 2006
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 Growth of celebrity endorsements
On an average, companies are spending 0.7 per cent of their annual brand sales
volume on celebrity endorsements and a whopping 35 per cent on media buying
(grown to almost 60 per cent )-Percept Talent Management

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

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Snapshot on Celebrity Endorsement on TV
during H1 '09
Maximum share contributed by the Bollywood personalities in overall
celebrity endorsement .

Highest number of advertisers endorsed by 'MS Dhoni’.

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

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

(One-in-four advertisements currently features a celebrity, versus one-in-eight

10 years ago)
Source Indiantelevision.com's AdEx India Analysis

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Way forward

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

Senior executives at these firms say while there is no organised agency

to track the deal size of the endorsements, the market size is expected to
grow 15 to 17 per cent in 2010.

Endorsements by film stars, estimated at around Rs 150 crore (Rs 1.5

billion) and growing at 25 per cent.

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 Celebrities, Brands & Consumers

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The process of Celebrity Endorsement

The Meaning Transfer Model- McCracken (1989)

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 Impact of a Brand on consumer purchase decision

Problem recognition

Information search

Brand Generation of alternatives

Preference
Evaluation of alternatives

Purchase decision

Post Purchase
decision

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Why do Consumer prefer celebrity endorsed products ?

Every day consumers needs someone to look upon-emulate

A consumer who observes messages for two different firms - one product
message containing the celebrity and other not,
believes that the product with celebrity endorsement will have more
purchase and so be of higher value (Clark & Horst man 2003)

Source attractiveness – Physical appearance, Personality, Likeability and

Similarity

Creates a connect (eg Vishwanath Anand –NIIT)

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

According to Kelman - Three process of social influence

which results in an individual adopting the attitude advocated
by the communicator

Compliance

Identification

Internalization

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Celebrity and a Brand

Surveys suggest that compared to any other types of endorsers,

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

Eg : S Kumars- Hrithik Roshan. They have reckoned that they spent

40-50%less on media, ad recall was 70%.

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Parameters for compatibility between the
celebrity and brand image

The success of a brand through celebrity endorsement is a cumulative of the following 14 attributes. Greater the score of the below parameters, greater
are the chances of getting close to the desired impact Source www.esnips.com
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Parameters cont…
Celebrity-Target Audience Match
Smriti Irani endorsing the WHO recommended ORS Campaign in
India

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

Costs of Acquiring the Celebrity

Sachin Tendulkar’s Rs. 2.0-2.5 crores,AR. Rehman- AirTel Rs. 1.75
crores, Shahrukh Khan’s- Rs. 2.5-3.0 crores, Aishwarya Rai- Rs. 1.25
crores

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Parameters cont…
Celebrity Regional Appeal Factors
R. Madhavan endorsing Pepsi in southern India

Celebrity-Product Match
Cyrus Broacha –MTV & Aishwarya Rai & Nakshatra

Celebrity Controversy Risk

Salman Khan, Azharuddin

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

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Parameters cont…
Celebrity Physical Attractiveness
John Abraham endorsing Wrangler and Timex Sunglasses

Celebrity Credibility- successful campaigns saved the brand image of

Cadbury’s

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

Whether Celebrity is a Brand User

PETA philosophy

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 Advantages of Celebrity
Endorsements

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

• Belief in efficiency and new appearance that will result in

at least trial usage.

• Signing up stars for endorsements is a time-

tested strategy and has been effectively even for social
messaging

Friedman and Friedman (1979) found empirical evidence that, in the promotion of products high in
psychological and/or social risk, use of celebrity endorser would lead to greater believability, a more
favorable evaluation of the product and advertisement, and a significantly more positive purchase
intention.

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 Dis-advantages of Celebrity
Endorsements

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Causes of failure
1. Improper Positioning –
Amitabh and Abhishek Bachchan in Maruti Versa.

2.Brand -Celebrity Disconnect-

Shahrukh khan endorsing lux beauty soap

3. Clutter Flutter
In India , we have too many brands chasing too few celebrities.
Eg.- Amitabh endorsing Reid& Taylor, Dabur, Cadbury, Parker Pens,
Nerolac paints, ICICI, Hajmola, Tide, etc

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Causes of failure cont..

4. Dissatisfaction with the product quality/performance

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

5. The vampire effect

Brand is overshadowed in the overwhelming presence of the star.
eg: Britney spears in Pepsi ad.
Castrol commercial featuring Rahul Dravid

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

7. Celebrities endorsing one brand and using another

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Is it smart to use celebrity endorsements for
branding?

Idea First

A celebrity’s presence in the ad should be contextual (eg :

Sachin Tendulkar –Boost

The compatibility of values of the brand and that of the

celebrity.

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Celebrity endorsements – Do’s and
Dont’s
Consistency and long-term commitment
Three prerequisites to selecting celebrities
Celebrity–brand match
Constant monitoring
Selecting unique endorsers
Timing
Brand over endorser
Celebrity endorsement is just a channel
Celebrity ROI.
Trademark and legal contracts
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Conclusion

Studies indicate that celebrity endorsement has worked well in some

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

Whether Celebrity endorsement has a positive or a negative impact on the

brand is a debate that is open to interpretation.

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Objectives for study

To know the impact of celebrity endorsement on

consumer brand preference

To study and understand whether celebrity

endorsements work

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Methodology
Data:
•Primary
Primary data will be collected through questionnaire, observation and interview
•Secondary
The secondary data is being collected from various books, reports, Journals (National &
International), magazines, articles, websites and other sources.

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

Sampling Design
Convenient and Stratified sampling

Area of study
The study will be conducted on the people of Hyderabad.

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Hypothesis

Ho: Celebrity endorsement does not have a impact on

the consumer brand preference

Ha: Celebrity endorsement has a impact on the

consumer brand preference

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 Thank you

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