Project Report on Impact of celebrity Endorsement on Consumer Buying Behavior
Subject: Consumer Behavior

Submitted to: Prof. Kunal Mankodi

2013

Amrut Mody School of Management
10/5/2013

Submitted By:
Shivam Bhatt: A 02
Maitree Patel B 35
Krupa Raval B 44
Pramoda Tadvi B 66

Table of Contents Problem Statement: 3 Objectives: 3 Research Design: 4 Qualitative Research Analysis 5 Conclusion 11

Problem Statement:

To study whether the celebrity endorsements carry any direct or indirect effect on the purchasing behaviour of the consumer.
Objectives:
* To identify how is celebrity endorsed advertisement perceived. * To explore customer perception towards Brand Ambassadors promoting specific product or services. * To find which type of celebrity persona is more effective. * To study the reliability of companies on brand ambassadors for enhancing the sale of their products. * To identify whether the celebrity endorsement actually leads to purchasing.

Research Design:
Research Design consists of the methodology and procedures used to conduct a particular research. On the basis of the data collected and objectives stated, we need to do exploratory research.
Exploratory Research:
Exploratory research is conducted for a problem that has not been clearly defined. Here in this project, we are trying to find the impact of the celebrity endorsement; this is the problem statement which tries to gain insights about the same.
Sample Size:
The total number of respondents that would be interviewed for this research is 11 people from varied fields.
Data Collection Technique:
The primary research technique that is used is Depth Interviews. This technique is selected as the topic is subjective in nature and these techniques of qualitative research would provide a much of the required information and even more of the data can be collected while conducting an interview.
Scope:
The research is applicable only on Ahmedabad city. The respondents have a wide scope as they belong not only to youth but people who fall under the age group of 16 to 40 years who are actually the decision makers.
Limitations:
The research is not on a wide scale thus generalizations based on the results of this research are not possible.

Qualitative Research Analysis

Interviews:
It was necessary to conduct interviews for this topic as it is subjective. Moreover, the objective is to know the impact of celebrity endorsement on the consumer buying behaviour and how the celebrity endorsements are perceived by the public.
So, it becomes important here that what people think about celebrity endorsements and the best way to know that is face to face interaction i.e. Interview.
The following people were respondents for the interview process:

Sr. No | Names | Profession | Brand-Celebrity Awareness | 1 | Ujjaval Vaidya | Student | Yes | 2 | Jitendra Motwani | Businessman | Yes | 3 | Sachin Parmar | Builder | Yes | 4 | Naimesh Bhatt | Accountant | Yes | 5 | Krupal Goletar | Student and DJ | Yes | 6 | Bhagyashree Manani | Engineer | Yes | 7 | Heta Bhatt | Businesswoman | Yes | 8 | Apexa Patel | Student | Yes | 9 | Shamina Ansari | Professor | Yes | 10 | Vidhi Shah | Student | Yes | 11 | Rajshree Patel | Housewife | Yes |

The analysis and summary of the interaction with the above people is discussed ahead which is as follows:

1. Understanding of Celebrity Endorsement and Examples: * All the respondents were familiar with the term. Some of them mentioned few words and their ideas to explain the term and few directly started with the examples to explain the meaning of the term celebrity endorsement. * The majority of the participants felt that celebrity endorser as a known figure to the general mass endorsing a product or service. * The interesting part comes when the examples started coming on. * The most common example was Amitabh Bacchan and different brands associated with him such as Maggie, Cadbury Dairy Milk, and Gujarat Tourism etc. * The others include Salman Khan, Shahrukh Khan, Ranbir Kapoor, Priyanka Chopra, Parineeti Chopra, Anushka Sharma, Katrina Kaif, Shilpa Shetty, Kajol, Virat Kohli, Sachin Tendulkar and last but not the least M S Dhoni. * The above examples give clear idea that popularity and stardom matters a lot in the advertising world and proves celebrity endorsement to be the most noticeable and retained mode of advertising.

2. Attractiveness of Celebrity Advertising: * Majority of the responses were positive in favour of the celebrity advertisement. Celebrity Advertisement draws their attention immediately compared to non celebrity advertisement. * Couple of respondents cited that celebrity advertising did not attract them more because for them it depended on the product and its features being advertised and not the celebrity who’s advertising. * The respondents used few words such as ‘definitely’, ‘obviously’, ‘surely’, ‘curiosity’, ‘exciting’ which shows the assertiveness of respondents for celebrity advertisement. * One of the respondents gave 3 examples of the same celebrity endorsing three different brands and her craze to purchase any product endorse by that celebrity. * Thus, it can be said that definitely celebrity advertisements are more attractive than non celebrity advertisement.

3. Issues Pertaining to Celebrity Endorsement: * Celebrity’s Attractiveness having a direct impact on the product: * The participants took time and could not give a concrete answer to this. From the responses to this question, it can be said that celebrity’s attractiveness had some impact on the product, but not every time. * This question was required lot of probing and then the responses started to turn positive. Purchase intentions of participants are guided by the attractive celebrity in the advertisement. If the celebrity is attractive then the ad stays in the mind of the consumer and the consumers tend to watch and recall them again and again which results in consumer purchasing the brand or the product/ service. * Few respondents mentioned with the examples such as Virat Kohli’s ad for Fastrack Sunglasses and Bags reflects his style, she has the same bag and sunglasses which were shown in the ad.

* Product Match Up- Connection between Celebrity and Product: * Almost all the participants agreed instantly to the fact that there should be a connection between the brand/product/service and the celebrity endorser. They said that the product which they are endorsing should be from the field they belong to. Most of the participants did not hesitate in giving example to back their argument, which again here proves that celebrity advertisements can easily be recalled. * The most common example here was Shahrukh Khan advertising for Lux Beauty Soap ad. This is pathetic. On the contrary, Amitabh Bacchan endorses Parker Pens which makes sense. Because he is well read and he himself writes and he belongs to the family of writers/authors. * A contradictory view becomes necessary here to be mentioned that if you take Sachin he can sell anything, because that’s his value. In India, celebrities are idolised and worshipped, thus whatever they endorse their fans will accept them and buy the particular product/service.

* Multiple Product Endorsement: * All the participants agreed unanimously on the single fact that celebrity endorse multiple products just for the money, without really being bothered about the product and does it even match up to them. Every single participant used words or phrases such as we know for what they are doing it for, it’s just for the money, they don’t really care and it’s the money which makes them do it. * Therefore a justification for a unanimous reasoning can be derived stating that there is so much multiple celebrity endorsement taking place on the Indian television and half of them are so ridiculously matched-up with certain celebrities that its creates more humour than anything else. * This analysis goes in accordance with Redenbach (2005) research which suggests that if a celebrity endorses for four and above brands/products then it the celebrity’s credibility and trustworthiness become a point of concern. Journal of Celebrity Endorsement by Redenbach) * Related to the Multiple Product Endorsement, the participants were asked whether celebrities endorsing multiple products create negative publicity/ impression. * The crux of the various replies of participants is sometimes the over-exposure of the same celebrity creates negative publicity and discussion (may be positive or negative) in the eyes of consumers.

* Economic Assessment of the Celebrity: * Most of the participants were confused when asked them this question of whether they would justify the large amounts paid to the celebrity to endorse product/brand. Most of the participants were not aware and did not have any idea of the amounts paid to the celebrity. They just knew that the celebrities charged a very larger amount to endorse a particular product/brand. It can be drawn from the response received that even though the people had no clue of the amounts paid, they more or less felt that since the celebrity’s name, status and credibility is been used, it was ok on the celebrity’s part to charge them money.

4. Celebrity Endorsements having an impact on their purchase decisions: * Majority of the respondents felt that celebrity endorsement does not affect their purchase decision. A few further cited that it depends on the product, usage of the product, need of the product and time at which the product is advertised. * We can also relate this thing with Reach, Frequency and Impact which depicts consumer behaviour towards particular product or service irrespective of any celebrity. The medium which is used to publicize the product shapes the pattern of buying and perception about the product. Frequency describes how many times the consumer leads to encounters with the product; this may also impact the buying decision as this brand recall. The Impact describes as to the results of reach and frequency, has the advertisement mould the behaviour and perception of the consumer and how well the consumers relates to the product or service. * They claim that they would not buy the product/service just because some celebrity is endorsing. The product has to be good and useful to consumer and then only will they go and purchase the product/service being advertised. * For example, Pepsi Blue for World Cup 2003, Lays with Different Regional Flavours in IPL 5 were the products promoted by many celebrities and were a failure which shows that celebrity endorsement can fail even in things which generally are purchased just because of impulsive buying decision. The simple reason behind this is the products were not that good and suffered negative word-of-mouth. * The other example can be Tata Tea “ Jaago reh campaign”. * To summarise all the views, it can be said that the assurance and credibility of celebrity which create trustworthiness about the product and then only it impacts purchase decisions.

5. Celebrities actually use the product? * Almost all the participants agreed that the celebrities do not in reality use the products they endorse. They may be using very few products endorsed by them. It shows that the consumers are not fools. * For example, Madhuri Dixit endorses Xpert Dishwashing bar, but she definitely does not use that. Shahrukh Khan endorsing Lux, i10, he too does not use them. * On the other hand, it was also cited by one of the respondents that Aamir Khan is the only celebrity who actually uses the product that he endorses. * Most people while watching and ad tend to believe that the celebrity endorsing a particular product tends to use the product, but they also know that it may not be the case always.

6. Vampire Effect: (Celebrity overshadows the brand or product) * It has happened with all the respondents that they just remembered the celebrity and not the brand and product in concern. * For example, at the time of her come back Madhuri Dixit endorsed Xpert Dishwashing Bar, and none of the respondent could remember the brand name. * Many of the respondents even confessed that their attention is grabbed by the celebrity rather than the product which clearly states that the celebrities generally overpower the product.

7. Too much celebrity advertising on TV? * All the respondents agreed unanimously that there is so much of celebrity advertising on the TV today and it gets irritating sometimes. * But when we started discussing more on the topic, the view changed that in a way it was okay for time-pass and some entertainment. Also one mentioned that, celebrity advertising is more important for the brand as it attracts huge mass which is not that well educated.

Conclusion

In conclusion, celebrity advertising has evolved much over the years, from actually volunteering an act in commercials for charity to charging a large fee and to singing celebrities for yearly contracts. Today celebrity endorsements have become an immensely competitive industry and grown far ahead from its inception. With reference to Indian context, where stars are given Dummy-God like status, it’s an interesting and powerful weapon, if used carefully.