A PROJECT REPORT ON IMPACT OF ADVERTISEMENTS AND CELEBRITY ENDORSEMENTS ON CONSUMER PERCEPTION AND BUYING BEHAVIOUR

Submitted in partial fulfillment of the requirements of the MBA Degree Course of Bangalore University Submitted By GARIMA PALIWAL 06XQCM6026 Under the Guidance and Supervision Of Prof.S. HEMANTH KUMAR
Faculty

M.P.BIRLA INSTITUTE OF MANAGEMENT Associate Bharatiya Vidya Bhavan # 43, Race Course Road Bangalore-560001 2006-2008

STUDENT DECLARATION

I hereby declare that the project undertaken by me and the report titled Impact of advertisements and celebrity endorsements on consumer perception and behaviour submitted to Bangalore University in partial fulfillment of the requirements for the award of the degree of Masters of Business Administration, is my original work and not submitted for the award of any other Degree/Diploma of any University.

Place: Bangalore Date: April 2008

Name : GARIMA PALIWAL Reg no: 06XQCM6026

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GUIDES CERTIFICATE
THIS IS TO CERITFY THAT THE PROJECT WORK TITLED

Impact of advertisements and celebrity endorsements on consumer perception and behaviour

IS A BONAFIDE WORK CARRIED OUT BY GARIMA PALIWAL IN PARTIAL FULFILLMENT OF THE REQUIREMEMNT FOR THE AWARD OF M.B.A-MARKETING UNDER MY GUIDANCE AND DIRECTION.

Prof. S. Hemanth Kumar Faculty MP Birla Institute of Management

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PRINCIPALS CERTIFICATE

This

to

certify

that

this

report

is

the

result

of

project work number

undergone by Ms.Garima Paliwal

bearing

the register

06XQCM6026, under the guidance and supervision of Prof. S. Hemanth Kumar, Faculty, MPBIM, Bangalore. This has not formed a basis for award of any degree/diploma for any university.

Bangalore (Dr.Nagesh.S.Malavalli) Date:

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ACKNOWLEDGEMENT

I would like to thank my project guide Prof.S.Hemanth Kumar and our principle Dr.N.Malavalli,, whose contribution was insightful and helped me, to get well acquainted to the project intricacies. I would also like to thank various people who have been instrumental in providing me the information required without which I couldnt have completed my project.

GARIMA PALIWAL 06XQCM6026

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CONTENTS: I. Research extract II. Chapter one: Introduction History Brand a layman perspective Celebrity Celebrity and a brand Why brand ambassadors Does celebrity endorsement really work? III. Chapter two: Research Design Introduction Problem Statement Objective of the research Scope of the study Methodology Sample size and description Source of data collection Instrumentation techniques Hypothesis used Limitations IV. Chapter three: Concept of branding and consumer behaviour A. BRANDING Brand Branding and brand asset management Building an effective brand strategy Objectives of brand strategy B. Consumer Behaviour Consumer decision making process Traditional factors affecting consumer decision making Impact of brand on consumer purchase decisions

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V. Chapter Four: Impact of celebrity on overall brand Endorsement Celebrity as brand ambassador Source of credibility Mechanisms and Theories of celebrity endorsement Establishing a perfect match Positive aspects of celebrity endorsement Risks involved with celebrity endorsement Breaking the clutter Which one to bet on idea or brand Ethical issues involved in celebrity endorsement VI. Chapter Five: Analysis and interpretations Analysis through tables and graphs Hypothesis testing VII. Chapter Six: Findings, suggestions and conclusion Findings Recommendations and suggestions Conclusion VIII. Bibliography IX. Annexure: The questionnaire

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LIST OF FIGURES, TABLES AND GRAPHS I. List of figures:

S.NO. 1. 2. 3. 4. 5. 6. 7. 8. Figures Sources of data collection Components of a brand Brand is more than a product Consumer Decision making process Traditional factors affecting consumer decisions Impact of brand on purchase decision Traditional factors and brand preference Celebrity and brand endorsed

II.

List of tables: S.NO.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

Tables
Age profile of the sample Gender profile of the sample Educational profile of the sample Occupational profile of the sample Most preferred mode of entertainment Type of product Source of product information Factors influencing buying decisions Favourite Brand ambassador Do you like watching ads? Ads a source of need recognition Ads an influence to buy products Celebrity influences to buy product Celebrity endorsement creates product image

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15. 16. 17. 18. 19. 20. 21.

Will you purchase product endorsed by bigger celebrity Endorsement assures quality Celebrity uses product they endorse Celebrity endorsement influences consumer perception Types of ads Hypothesis Calculation of Chi-square

III.

List of Graphs: S.NO.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

Graphs
Age profile of the sample Gender profile of the sample Educational profile of the sample Occupational profile of the sample Most preferred mode of entertainment Type of product Source of product information Factors influencing buying decisions Favourite Brand ambassador Do you like watching ads? Ads a source of need recognition Ads an influence to buy products Celebrity influences to buy product Celebrity endorsement creates product image Will you purchase product endorsed by bigger celebrity Endorsement assures quality Celebrity uses product they endorse Celebrity endorsement influences consumer perception Types of ads Favourite Advertisement

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RESEARCH EXTRACT
INTRODUCTION
Celebrity endorsement has attracted immense debate on whether it really contributes to the brand building process or whether it is just another tool to make the brand more visible in the minds of the customers.

OBJECTIVE:
The objective of the study is: o To analyze the impact of advertisements and brand endorsements on consumer perception. o To find out whether celebrity endorsement has any impact on the purchase behavior o To find the importance of celebrity endorsement. o To study faults in celebrity endorsement.

METHODOLOGY
A research study will be carried in order to examine the various facets of celebrity endorsements and the impact of brand ambassadors on the consumer behavior and perception towards a product. A thorough literature survey will be done and a survey among the common public will be conducted to arrive at a conclusion.

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CONCLUSION:

A brief assessment of the current market situation indicates, that celebrity endorsement advertising strategy can under the right circumstances indeed justify the high costs associated with this form of advertising. The use of celebrity for endorsements create a very favorable impact on the consumer and it creates a connect which forces a consumer to purchase a product. However, as several failures show, it is essential for advertisers to be aware of the complex processes underlying celebrity endorsement.

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CHAPTER 1 INTRODUCTION

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INTRODUCTION
Today 'Celebrity Endorsement' has attracted immense debate on whether it really contributes to the brand building process or whether it is just another lazy tool to make the brand more visible in the minds of the consumers. Although it has been observed that the presence of a well-known personality helps in solving the problem of over-communication that is becoming more prominent these days, there are few undesirable impacts of this practice on the brand. The theories like 'Source Credibility Theory, Source Attractiveness Theory and Meaning Transfer Theory' provide a basis on which the methodology of celebrity endorsement works and also explains how the process of the celebrity endorsement influences the minds of the consumers. Firms invest huge amounts as advertising expenditure for hiring the right celebrity. However there lies uncertainty with respect to the returns that the company might be able to garner for the brand. The issue of matching the values of the celebrity with the brand values is also very important, i.e. getting the right celebrity to endorse the right brand. Consumers perceive the brand as having superior quality because it has been endorsed by a credible source. This makes endorsement as one of the indictors of quality for any brand. Corporate credibility along with endorser credibility plays a significant role in the attitude of the consumer towards the brand and the advertisement respectively. On the other hand, the over popularity of the celebrity sometimes overshadows the brand. If the celebrity is involved in multiple endorsements, it tends to create confusion among consumers and hence negatively affects the perception of the advertisement and the brand. Hence, to say clearly whether the practice of celebrity endorsement impacts positively or negatively to the brand still remains a debate.

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We hear of Brand Ambassadors the Big-B had stirred up a controversy with his being a Brand Ambassador of one of the Indian states. Our cricket icons like Sachin Tendulkar or Sourav Ganguly or Rahul Dravid or M S Dhoni are roped in by the MNCs to serve as Brand Ambassadors for some product or the other. Similar is the case with Shah Rukh Khan or Aamir Khan or Juhi Chawla or the Devgans. Brand Ambassadors are celebrities of the day who play a major role in influencing your purchase decisions. It is human psychology to hesitate from experimenting with the unknown. In private life, we ask around to get opinions of friends and relatives who have used the brand. This is where the Brand Ambassadors enter the scene.... Their role is to talk about the product in such glowing terns that you shelve your doubts and go in for it. The affinity for a particular brand is imbibed in us from childhood - the message is carried forward from generation to generation. This is the brand loyalty and is of a permanent nature. It helps the product to maintain its identity even in turbulent periods examples are brands of ice creams, chocolates or energy giving drinks or cold drinks. We have grown up with them and since we were satisfied, we recommended it to our children who, in turn recommended it to theirs. The Brand Ambassadors have to merge with the new philosophies of life. Kids fifty years back used to dream of being the drivers of the Fire Engine or the Train today, they dream of being pilots of supersonic fighter planes or spaceships. Therefore, in keeping with the changing times, the old Brand Ambassadors make way for the new. The crescendo of celebrities endorsing brands has been steadily increasing over the past 20 years or so. Marketers overtly acknowledge the power of celebrity in influencing buyer's purchase decision. They have firm believe that likeability or a favorable attitude towards a brand is created by the use of a celebrity. The crore of rupees spent per year on celebrity endorsement contracts show that celebrities like Amitabh Bachchan, Sharukh khan and Sachin Tendulkar play an important role for the advertising industry. It is an established fact that celebrity endorsement can bestow unique features or special attributes upon a product that it may have lacked otherwise. M P BIRLA INSTITUTE OF MANAGEMENT 14

History
Celebrities are involved in endorsing activities since late nineteenth century. The advent of celebrity endorsements in advertising in India began when Hindi film and TV stars as well as sportspersons began encroaching on a territory that was, until then, the exclusive domain of models. One of the first sports endorsements in India was when Farokh Engineer became the first Indian cricketer to model for Bryl cream. The Indian cricket team now earns roughly Rs. 100 crore through endorsements. There was a spurt of advertising, featuring stars like Tabassum (Prestige Pressure Cookers), Jalal Agha (Pan Parag), Kapil Dev (Palmolive Shaving Cream) and Sunil Gavaskar (Dinesh Suitings).

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Brand- A layman perspective

Brand is the proprietary visual, emotional, rational and cultural image that you can associate with a company or the product. Few examples will bring home the meaning i.e. Amul - utterly butterly delicious; Coke thanda matlab coca-cola; Pepsi Yeh dil mange more; Kurkure- Masti bole to kurkure and Daewoo ka India. These examples convey one message that when people watch advertisement a connect is being created and result is that people go for experience of buying. People feel by using the brand they will portray certain traits or characteristics that otherwise they do not have. This generates a certain level of emotional affiliation and a sense of fulfillment. It is this emotional relationship with brands that make them so powerful. Advertisements enforces what exactly the brand stands for and what to expect by its consumption and above all what factors, features and attributes makes it better from competition. Advertisements along with other marketing efforts generate expectations and feelings in a customer and force them to think when they see or hear the brand name. This Thinking process and emotional bonding gets more mature and relevant when a celebrity endorses the brand. The subjective intangible feelings of a customer become objective and tangible in the form of celebrity and the level of expectations will rise. The customer will start to perceive himself in the reference frame of the celebrity after the brand or the advertised product has been purchased or consumed by him.

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CELEBRITY
Celebrities are people who enjoy public recognition and mostly they are the experts of their respective fields having wider influence in public life and societal domain. Attributes like attractiveness, extraordinary life style or special skills, larger than life image and demigod status can be associated with them. It is safe to deduce that within a corresponding social group celebrities generally differ from the social norm and enjoy high degree of public awareness. Celebrities appear in public in different ways. To start, they appear in public when fulfilling their professional commitments example: Mahendra Singh Dhoni, who played cricket in front of an audience in Twenty-Twenty World Cup. Furthermore, celebrities appear in public by attending special celebrity events, example: the movie award nights; special screening; world premiers of movies or for social causes. These celebrities have universal presence and appeal, they are present everywhere, in news, fashion shows and magazines, tabloids and above all advertisements.

Celebrity and a Brand

Star power in India can be gauged by the successful endorsements done by Shahrukh Khan (Pepsi, Hyundai Santro, Sunfeast, and Navratan etc.), Amitabh Bachchan, Sachin Tendulkar, Rahul Dravid, Hrithik Roshan and the others. The inevitable question is, if and how the lively interest of the public in the rich and famous can be efficiently and effectively used by companies to promote their brands and consequently to increase their sales revenues.

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This fact can be brought out by using certain examples i.e. Mr. Amitabh Bachchan promoting Cadbury chocolates after the fiasco of infestation when the image of Cadbury India went very low in the eyes of people. Soon the company found a perfect fit and a reliable celebrity to transmit the correct message and help regenerating the lost trust. The fit between the product and celebrity is evident as Mr. Bachchan and Cadbury chocolates both have tested troubled times and still they stand tall and the love and trust they both share with the people all across India. This is a live example of how a celebrity brought certain attributes to a product like chocolate. Actor Sharukh khan has also endorsed diversified products. His endorsement basket is ranging from Hyundai Santro to Sunfeast biscuits on one hand and from Compaq computers to Videocon electronics on the other. According to Advertising research companies both the actors are doing well and the ad spent on both by the companies is increasing at a phenomenal rate, so does their basket of endorsements. These actors bring reliability and trust in the brand and above all, they help in increasing the sales revenues. Celebrity endorsements are powerful, has become evident from the above two examples but, why is it so? This power is offered by the following elements, which * Instant also creates a 'Top about of the the brand Mind and Position'. easy recall.

Awareness,

knowledge

* Values and image of the brand is defined, highlighted and refreshed by the celebrity. * * The celebrity trust, adds new edge and dimension and to the to brand. brand. Credibility, association, aspiration connectivity

* Belief in efficiency and new appearance that will result in at least trial usage.

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WHY BRAND AMBASSADORS

There is a management saying that when the product is good you no longer have to be a very good marketer. But the saying is soon becoming outdated. There are many product categories and many brands flooded in the market in each category. Hence attributes like quality, value for money alone does not count. There has to be an effective media to make the product reach the customer. The media here can be termed as the celebrity who endorses the product. When a product is being endorsed by a famous celebrity then it will result in better brand recall and better brand awareness. People also start associating their status symbol to that of the product that they consume and the celebrity associated with it. Hence in many ways the company can capitalize on celebrity endorsement. That is the reason why companies shell out millions to promote their product with the celebrities.

DOES CELEBRITY ENDORSEMENT REALLY WORK

Does celebrity endorsement really work? Theoretically yes, because the qualities associated with the endorser are associated with the brand and the brand therefore remains at the top of the consumer's mind. However one needs to realize that the impact of an endorser cannot be sustainable in all product categories and in all the stages of brand life cycles. It really depends upon the type of product. If it is a 'functional brand', then the product itself is the hero. Here any celebrity association with the brand without corresponding performance of the product will not be sustainable. While incase of 'image brands', like the categories of soaps, soft drinks, cigarettes etc., where it is difficult to distinguish between the products, celebrity endorsements help to distinguish between the brands at an emotional level. A research conducted by Synovate7, a global market research firm, revealed that 47% people would be more likely to buy a brand that was endorsed by their favorite celebrity.

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Pepsi Co. has used a variety of celebrities including Aishwarya Rai, Hrithik Roshan, Amitabh Bachchan, Kareena Kapoor, Rahul Khanna, Fardeen Khan, Sachin Tendulkar etc. Amongst advertisements featuring celebrities, Pepsi tops the heap with the highest recall of 70%, while arch rival Coke is lower across all markets with 52% recall. This proves that Pepsi has really exploited the use of celebrities in their advertisements and has worked. Whether Celebrity endorsement has a positive or a negative impact on the brand is a debate that is open to interpretation. But till the time the corporate world continues to foot fancy bills of celebrity endorsers and till consumers continue to be in awe of the stars, the party is not likely to break up. And in the chapters to come it can be learnt more on this grounds and at the end interpretation is on impact of brand ambassadors towards their perception and purchase behavior of customer.

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CHAPTER 2 RESEARCH DESIGN

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INTRODUCTION
The research is being conducted in order to analyze the influence an advertisement or a celebrity endorsement has on the buying behaviour of the customer. This is to analyze whether the big money invested on these tools of promoting a product are as effective or not. Therefore, following research design is developed to assess the same.

PROBLEM STATEMENT
The study is conducted to know whether the glamorous advertisements and celebrity endorsements have an impact on the purchase behavior of the consumer and whether these marketing tools help in creating a product image or brand identity among potential buyers. Therefore, the problem statement is to measure the impact of advertisements and brand ambassadors in consumer behavior

OBJECTIVE OF THE RESEARCH

To study the impact of advertisements on consumer behavior. To study the impact of celebrity endorsements towards perception and purchase behavior of products. To study the need of celebrity endorsements in product promotion. To study faults in celebrity endorsement. To find out whether celebrity endorsement constitutes for brand recall and brand awareness.

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SCOPE OF THE STUDY

The study was conducted to know impact of advertisements on the consumer. Due to time and resource constraints, this study is focused in Bangalore. The study is based on random sampling method but the opinion from all walks of like have been collected to arrive at a proper conclusion. This study helps us to know what are the consumer expectations towards advertising and their subsequent consumer behavior in response to the advertisements

METHODOLOGY
A research study was done in order to examine the various facets of celebrity endorsements and the impact of brand ambassadors on the consumer behavior and perception towards a product. A survey was conducted among the general public with a sample to arrive at several conclusions regarding the impact of advertisements and brand ambassadors towards the purchase behavior of the consumer.

SAMPLE SIZE AND DESCRIPTION

A sample size of 100 consumers of all ages and demographic segments was considered in order to arrive at final conclusion. Random sampling is been done as impact of advertisements and endorsements is not confined to any particular segment of group and it would have been inappropriate if so was not done. As,it would not have provided a complete perspective towards the analysis.

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SOURCE OF DATA COLLECTION

Data can be classified in to two classifications. They are Primary data and secondary data: 1. Primary Data: Primary data are the data that are collected to help solve problem or take advantage of an opportunity on which a decision is pending. It can be collected through telephone, personal interview and structured questionnaire. 2. Secondary Data: Secondary data are data that were developed for some purpose other than helping to solve the problem at hand. Secondary data can be collected through following methods. The researcher has used structured scientific questionnaire and personal interview for collection of primary data from retailers and consumers. Secondary data collection

Internal sources 1. Accounting records 2. Sales force reports 3. Internal experts 4. Miscellaneous reports

External sources 1. Computerize base 2. Government experts 3. Directories 4. External experts data

Data has been collected from both primary and secondary sources. Primary data is collected by the questionnaires and personal observation. Secondary data is collected by the referring to several journals, books, internet, magazines, etc

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INSTRUMENTATION TECHNIQUES
The questionnaire technique is used for the survey and the reasons for using this approach are It covers wide area. It is not an expensive affair. Original data could be obtained. It is free from all bias. Easy to tabulate and understand

TOOLS USED FOR HYPOTHESIS

The chi-square test is used to identify the relation between advertisement and consumer perception. A chi-square test is any statistical hypothesis test in which the test statistic has a chi-square distribution when the null hypothesis is true, or any in which the probability distribution of the test statistic can be made to approx. a chi-square distribution as closely as desired by making sample size large enough.

LIMITATIONS
o Limited scope in terms of area i.e. only Bangalore o Time constraint o Analysis and interpretation has to be made under the assumption that data is accurate. o Hesitation of the general public to respond.

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CHAPTER 3
CONCEPT OF BRANDING AND CONSUMER BEHAVIOR

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BRANDING
BRAND A brand is a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors.

A strong brand comprises of:

Image: visual perception that supports brand and consumer preference. Benefits: Consequences of your branding Differentiation: Distinction from competition Quality: Impacts consumer satisfaction, return business, growth Pricing: A component of value and suggestion of quality Distribution: availability implies (non) exclusivity Presence: Visibility in media leads to brand recognition

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A Brand is more than a Product

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BRANDING AND BRAND ASSET MANAGEMENT

Brand management is still in a nascent stage even though brands are a business asset. At present, in many cases, the tendency is to manage products, which happen to have a name. Yet brand management involves different and specific reasoning and approaches. Till date the management books and marketing bibles have not yet assimilated the full implication of the brand revolution. Marketing books focus on the process of launching new products, when marketing the brand is considered merely as a tactical and final decision, which is developed through communication such as advertising, packaging and the logo. Yet the reality of the situation is very different. From now on companies will be faced with the strategic issues of whether or not growth should come about through existing brands by developing their sphere of activity or through new brands. Classic strategy models talk about product portfolios, whereas in reality companies have to manage their brand portfolios. Several companies have product managers but few have brand managers. This may cause problems in so far as more and more brands are being extended to more and more differentiated products, resulting in the delegation of the management of value to several decision centers. In the medium term this may diminishbrand equity because decisions are taken without any integration of the decision centers. The brand is not the product but it gives the product meaning and defines its identity in both time and space. Companies are discovering that this brand equity has to be managed, nourished and controlled.

BUILDING AN EFFECTIVE BRANDING STRATEGY

What constitutes a brand strategy? Organizations undertake a .branding. process yet the net outcome closely resembles a public relations face-lift. Why does this occur? One possibility might be the framework that guides the process. Another may simply be the viewpoint of the agency or consultant that is employed. In any case, valuable money is spent each year on brand strategy endeavors and frequently the outcome does not yield the tangible results organizations are seeking.

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What is a Branding Strategy? David Aaker implies the .objective of a branding is to create a business that resonates with customers.. Aaker also suggests this process must involve an analysis from three perspectives: customer, competitor, and self analysis. Another expert suggests a .Brand strategy is the process whereby the offer is positioned in the customer.s mind to produce a perception of advantage (David Arnold, 1992)..

OBJECTIVES OF THE BRAND STRATEGY:

It is imperative to understand that branding is not about getting your target market to choose you over the competition, but it is about getting your prospects to see you as the only one that provides a solution to their problem. The objectives that a good brand will achieve as a result of branding exercise: Deliver the message clearly confirms your credibility connects your target prospects emotionally motivates the buyer Concrete User Loyalty To succeed in branding the organization must understand the needs and wants of their customers and prospects. You do this by integrating your brand strategies through your company at every point of public contact. The brand must reside within the hearts and minds of customers, clients, and prospects. It is the sum total of their experiences and perceptions, some of which you can influence, and some that you cannot. A strong brand is invaluable as the battle for customers intensifies day by day. It's important to spend time investing in researching, defining, and building thier brand. After all, the brand is the source of a promise to your consumer. It's a foundational piece in your marketing communication and one you do not want to be without.

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CONSUMER BEHAVIOUR
Consumer behaviour is the study of how people buy, what they buy, when they buy and why they buy. It blends elements from psychology, sociology, sociopsychology, anthropology and economics. It attempts to understand the buyer decision-making process, both individually and in groups. It studies characteristics of individual consumers such as demographics, psychographics, and behavioral variables in an attempt to understand people's wants. It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general. The study and knowledge of consumer behavior helps firms and organizations to improve their marketing strategies and product offerings. Following are the important issues that have significant influence on consumer's psyche and their ability to take decisions:

The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products); The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media); The behavior of consumers while shopping or making other marketing decisions; Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome; How consumer motivation and decision strategies differ between products that differ in their level of importance or interest that they entail for the consumer; and

How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer. Their Age, Religion, Culture, Income, informal group and Referent Group.

Understanding these issues helps us adapt our strategies by taking the consumer into consideration.

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CONSUMER DECISION- MAKING PROCESS

Problem Recognition Information Search Identification Of Alternatives Evaluation Of Alternatives Purchase Decision

Post Purchase Behavior

Process starts with problem recognition or with an unsatisfied need that a consumer would like to attain satisfaction. To satisfy the given need what all are the components that should be taken into consideration and how we can maximize the satisfaction is the next stage. In this stage, we will cover ability to purchase, level of involvement, people whose opinion will count and other relevant details that will help us in optimizing satisfaction. Based upon information search we will generate various alternatives. Evaluation stage will look like cost benefit analysis and based upon maximum value or utility per rupee spend, we will decide or shortlist the product or brand. This is the decision and confirmation stage where the consumers prepares himself for the purchase of a particular brand and give preference to one and only one over and above the others. Next comes the purchase when the consumer will finally go to the market and look for the brand or the product, physically verifies it and purchases it. Last is the post purchase Evaluation in which the customer wants to justify his consumption or purchase decision. M P BIRLA INSTITUTE OF MANAGEMENT 32

Traditional Factors affecting consumer decision making

There are several factors that affect consumer's decision to purchase a brand and a product. These factors though at time are not very much visible but they make an impact and affects sales of a product or brand up to a great extent. The table below shows some of these factors. Demographics (age, gender, Income etc.) Heredity and Home Environment Family Life Cycle Life Changing Events Cultural Environment Social Environment Situational Environment

Impact of a Brand on consumer purchase decision

Research studies have proven that known products and names are sold more than unknown ones. Therefore, a known brand or an optimally exposed brand will find more recognition and buyers in the market in comparison to completely unknown or unexposed brand. Recognition of brand and its significance along with the traditional factors plays a very significant role in consumer decisionmaking process. More or less every consumer has a brand preference and given the affordability and societal norms, each buyer would like to buy and consume one of the highly acceptable, recognizable, and reputed brands.

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The above given model explains the important role that a brand plays in three different stages of consumer's purchase decision making. A consumer start collecting data or information about his favorite brand than he keeps his favorite as one of the alternatives and he evaluate his selected brand against all available options and on finding it suitable or best among all options based upon a qualitative and quantitative evaluation he will ultimately purchase the selected or favorite brand.

Traditional Factors
Consumer Final Product Choice

Brand Preferences

Purchase Decision Process

The diagram above explains how various traditional factors along with brand preference interact during purchase decision process and finally results into a consumer's final product choice or ultimate purchase.

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CHAPTER 4
IMPACT OF CELEBRITY ENDORSEMENT ON THE OVERALL BRAND

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ENDORSEMENT
The celebrity, whether an expert or not, merely agrees to the use of his or her name and image in the promotion of the product is endorsement. Celebrity endorsement has been recognized as "a ubiquitous feature of modern marketing". Celebrity appeal is prevalent as a method of persuasive communication. There is so much clutter in the market that companies are constantly looking at ways to cut through it. Corporates believe celebrity endorsements are the easy way out, with their mass appeal. However there are chances of their Backfiring if there is a basic mismatch between the star personalities and the brands in question.

Celebrity as brand ambassadors

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. An example will bring more clarity, When S Kumars, a known textile brand entered into readymade garments business they used Hrithik Roshan, then the hottest advertising icon for their launch advertising for TAMARIND, now one of the premium readymade brands. They reckoned that they have spent 40-50 percent less on media due to sheer impact of using hottest star like Hrithik. The Ad recall was as high as 70 percent and the campaign can be termed as a great success. Celebrities also create positive feelings towards brands, connect user to brand and are perceived by consumers as more entertaining. Using a celebrity in advertising or for any, other type of communication for brand building is likely to positively affect consumers' brand preference, brand attitude, brand association and purchase intentions. To ensure positive results, however,

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it is critical for advertisers to have a clear understanding of consumer's reactions and reinforcement of celebrity endorsement. The impact of celebrity endorsement on any brand as well as on consumer's purchase decision is very critical.

Source Credibility
Central goal of advertising is the convincing of consumers and persuasion to purchase, the ultimate objective, though not openly spoken, is to some how attract consumers to the market offering of the company, generating positive attitude, reinforce positive association and ultimately to generate sales, may be a trial purchase. At later stages, the sponsor may work towards creating a brand loyalty but generating initial sales or increasing the existing sales is the primary objective. In this respect, the credibility of an endorser along with advertisement plays an important role in convincing the target audience of the attractiveness of the company's brand and generates sales. Pursuing a celebrity endorsement strategy enables advertisers to project a credible image in terms of expertise, persuasiveness, trustworthiness, and objectiveness. To create effective messages, celebrity advertisers also have to consider the attractiveness of the spokesperson. Source attractiveness refers to the endorser's Physical appearance, Personality, Likeability and Similarity to the receiver, thus to the perceived social value of the source. This behavior mainly goes back to halo effect, whereby persons who perform well on one dimension example: physical attractiveness or top professional performance, social status are assumed to excel on other levels as well i.e. happiness and coolness. This is evident from the use of Fardeen Khan, modern, dynamic, outgoing and smart personality for Provogue; he translates the modernism of the brand well. Titan uses Aamir Khan in his different avatars for communicating to the public that their watches are as reliable and passionate as Aamir is for films. Both Fardeen and Aamir carry the message well and enhance the credibility of the brand they endorse.

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Mechanism and Theories of Celebrity Endorsement

Celebrity endorsements give a brand a touch of glamour and the hope that a famous face will provide added appeal and name recognition in a crowded market. In the battle for the mind, you get the customer excited by showing him a known face, and an effective demand is created. In short it helps increase the recall value of the brand. A piece of research states that the target audience age group of 15-30 gets influenced first by cricketers, then Bollywood stars and only then music, festivals and food. According to Source Credibility Theory, acceptance of the message depends on 'Expertness' and Trustworthiness' of the source. Expertness is defined as the perceived ability of the source to make valid assertions. Trustworthiness is defined as the perceived willingness of the source to make valid assertions. Audience acceptance increases with the expertness of the source and the ability of the audience to evaluate the product. According to Source Attractiveness Theory, which is based on social psychological research, the acceptance of the message depends on familiarity, likeability and similarity. Familiarity is the audience's knowledge of the source through exposure; likeability is the affection for the source's physical appearance and behavior while similarity is the resemblance between source and receiver. This theory explains the message acceptance in two ways: Identification and Conditioning. Identification is when the receiver or the target audience of the communication begins to identify with the source's attractiveness, and hence tends to accept his opinions, beliefs, habits, attitudes etc. On identification, a quote from Bijou Kurien, COO, Titan, "We decided on Aamir because we wanted someone who is a bit iconic, who is style-conscious himself, and somebody who cuts across both sex and age group, between urban and rural India. A celebrity, who is moldable and who is not over-exposed". Conditioning is when the attractiveness of the source is supposed to pass on to the brand after regular association of the source with the brand.

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Grant McCracken has criticized the previous two theories and proposed the Meaning Transfer Theory. The theory explains that a celebrity encodes a unique set of meanings which if well used can be transferred to the endorsed product. Such a transfer takes place in three stages encoding meanings, meaning transfer. I. Encoding Meanings: Each celebrity has a unique set of meanings, which can be listed by age, gender, race, wealth, personality or lifestyle. In this way, the celebrities encode a set of meanings in their image. For example Preity Zinta can be seen as a lively, charming, bubbly, witty and enthusiastic. II. Meaning Transfer: This stage transfers those meanings to the product. When skillfully portrayed, celebrities can communicate this image more powerfully than lay endorsers. III. Meaning Capture: This assumes that consumers purchase products not merely for their functional value but also for their cultural and symbolic value. The theory says that consumers buy the endorsed product with the intention of capturing some of the desirable meanings with which celebrities have passed on to the product. This is more eminent in lifestyle products like clothes, perfumes, cell phones etc.

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Establishing a Perfect Match

Research proves that a spokesperson especially for a service product or organization (ICICI- First Amitabh Bachchan, now Shahrukh Khan) interacts with the type of brand being advertised. These stars communicate the value of the product and transform an ordinary service into a miracle solution for all problems of an ordinary customer. According to Friedman and Friedman (1979), a famous relative to a 'normal' spokesperson is more effective for products high in psychological or social risk, involving such elements as good taste, self-image, and opinion of others. Several research studies have examined the congruency between celebrity endorsers and brands to explain the effectiveness of using famous persons to promote brands. In India, a brand called Reid & Taylor presented its perfect example when they first launched their advertising campaign featuring James Bond fame of the time Mr. Pierce Brosnan along with the tagline 'BOND WITH THE BEST' but the James Bond idea did not worked and the company was not happy with the results. As a last resort, company introduced Mr. Amitabh Bachchan as Reid & Taylor man, a man propagating the brand for special occasion and for very special people in life. The commercial from the initial days got good response and did extremely well as people were able to connect with Mr. Bachchan and the values he was propagating. Another such example of a perfect match can be Vishwanathan Anand endorsing NIIT campaigns. Contrary to only favorable outcomes, there are several examples where the product, even the entire campaign collapsed due to heavy weight celebrity as the agency or the ad failed to establish the relationship between the endorser and the product. Keeping the focus only on success, where the product and the celebrity were a perfect match, following are few examples: M P BIRLA INSTITUTE OF MANAGEMENT 40

Celebrity Endorser

Company / Product *Dabur *Cadbury *Reid and Taylor * Parker * Santro * Videocon * Sunfeast * Pepsi * Kurkure * Taj mahal tea * Titan * Coke * Toyota Innova * Nakshatra * Lux * Fanta * Nestle Munch * Whirlpool and Tata indicom

Amitabh Bachchan

Shahrukh Khan

Juhi Chawala Ustad Zakir Hussain Aamir Khan

Aishwarya Rai Rani Mukherjee Kajol and Ajay Devgan

The campaigns are not only basking with the glory of success stories, but there is considerable number of failures as well. Assuming that a person just have to be famous to represent a successful brand, however, would be incorrect and may turn out to be a very dangerous preposition resulting into a big calamity for the entire advertising campaign or the brand.

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Positive impacts of celebrity endorsement on a brand

Approval of a brand by a star fosters a sense of trust for that brand among the target audience. This is especially true in case of new product. Celebritiy ensures attention of the target group by breaking the clutter of advertisements and making the advertisement and the brand more noticeable. There is a demographic and psychographic connection between the stars and their fans. Demographic connection establishes that different stars appeal differently to various demographic segments i.e. age, gender, class, geography etc., while psychographic connection establishes that stars are loved and adored by their fans. Another invaluable benefit from celebrity endorsements is the public relation opportunities. Endorsement may be perceived as a signal of product quality.

Risks involved with celebrity endorsements The celebrity may sometimes overshadow the product i.e. Vampire
Effect.

The celebrity may be overexposed which reduces his or her credibility. The target audience may not be receptive to the celebrity endorser. The celebritys behavior may pose a risk to the company. Use of a celebrity may be sometimes considered as Lazy Advertising
Celebrity Trap: Celebrity trap is when the celebrity becomes an addiction for the marketing team and the task to find substitutes becomes more and more difficult, leading to surfeit of celebrities. Celebrity endorser would get caught in a scandal or an embarrassing situation. Involves high cost.

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BREAKING THE CLUTTER

When the objective is to break the clutter among the deluge of advertisements, the impact on the brand will depend on the kind and quality of the message conveyed to the consumer. The celebrity is used to garner attention. Further the celebrity chosen must be so popular among the general public.Aamir khans association as mentioned earlier is one such good example. It has helped Coca Cola to break the clutter.

WHICH ONE TO BET ON: THE IDEA OR THE BRAND

Celebrity endorsement is mainly carried out for better brand recall and better brand awareness. There are many soft drink brands flooded in the market and umpteen numbers of advertisements to promote it. Hence consumers get sick of these advertisements. Hence to make the consumer look on the advertisement, it must be innovative or use a charming celebrity and the rest will be done. But when the advertisement is both innovative and the celebrity is charming, then its likely that the advertisement will become a very big hit. Advertising agencies use famous icons to get the job done. They are paid a lot to do it. Trustworthiness, likeability, attractiveness and personality of the celebrity endorser play an important role in attracting attention to both the endorsement and the brand, fulfilling a requirement in successful advertising.

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ETHICAL ISSUES INVOLVED IN CELEBRITY ENDORSEMENT

When the pesticide issue rocked the country and the cola companies were in affix to set the sales graph right they had to do lot of home work.They knew that the tarnished image can be only rebuilt with the celebrity endorsement as they posses high trustworthiness among the general public. But some of the celebrities were fearing on the ethical grounds. Gopi chand, The famous Badminton player was offered at the time of pesticide issue a huge sum to endorse one of the soft drink brands, which he refused to do on ethical grounds. But later the companies roped in famous celebrities and showcased to the public that the soft drink brand can be consumed as there is no harm in doing so.

ALL MARKETERS ARE LIARS Seth Godin, in his famous book .all marketers are liars. says a very different line of idea for selling products. He says that all the marketers are liars and a perfect marketer must know to address the irrational wants of the consumer. Any advertisement can tell about the features that the product has and any agency can do it. Further people are least interested in hearing to it. Rather fantasize him and address that his irrational wants will be fulfilled after he buys the brand. That it.s shown in an advertisement that a boy gets a Girlfriend after he consumes a particular brand of soft drink may look ridiculous. But it actually clicks. The above thought can be best materialized by effectively using a brand ambassador. Because the message is easily reached. He would be earlier in no mood to watch an advertisement or see a print advertisement if it were ordinarily done. But now it looks different. It can fantasize him to a different world. But brand Gurus say that it results in better brand recall and better brand awareness. The purpose is clearly served with the help of the celebrity that is used to endorse the product.

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CHAPTER 5 ANALYSIS AND INTERPRETATION

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AGE PROFILE OF THE SAMPLE

The profile of the respondents include a sample size of 100, between the age group of 15- 55 and above. The break-up of respondents in their respective age groups, as well as the number (percentage) of respondents in each group is set below: No. of Age Group 15-25 25-35 35-55 55 and above TOTAL respondents 38 23 26 13 100 Percentage 38 23 26 13 100

Table 1: Age profile of the sample

13% 38% 15-25 25-35 26% 35-55 55 and above 23%

Graph 1. Age profile of the sample ANALYSIS: The sample includes 38% of respondents from the age group of 1525. Also 23% from age group of 25-35, 26% from 35-55 and the rest 13% from respondents above 55 years of age. INFERENCE: People from all the age groups had their opinion about advertisement therefore shows the reach of advertisements towards all age groups.

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GENDER PROFILE
The opinion of both the genders was considered to arrive at an unbiased and holistic conclusion. No. of Gender Male Female Total respondents 49 51 100 Percentage 49 51 100

Table 2: Gender profile of the sample

51%

49%

Male Female

Graph 2: Gender profile ANALYSIS: The sample consists of almost equal number of men and women being 49% and 51% respectively. It will therefore give a fair perspective for conclusion. INFERRENCE: The gender profile of respondents, from the graph and table above, helps to have a clear and precise understanding of the respondents, whose perceptions and preferences on the positioning of advertisements in the television media, have been collected for the purpose of this project.

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EDUCATIONAL PROFILE OF THE SAMPLE

Qualification School Graduation Post Graduation Total

No. of respondents 16 42 42 100

Percentage 16 42 42 100

Table 3: Educational profile of the sample

42%

School Graduation Post graduation 16% 42%

Graph 3: Educational profile of the sample ANALYSIS: From the table and the figure above, sample consists of 42% of graduates, 42% of post graduates and 16% of people who are either school going or could not continue education after schooling. INFERENCE: The sample mostly has been confine to the educated consumer as they are more aware, alert and responsive to various aspects and dimensions of the project.

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OCCUPATIONAL PROFILE OF THE SAMPLE

OCCUPATION SELF EMPLOYED EMPLOYED STUDENT HOUSEWIFE TOTAL

NO. OF RESPONDENTS 19 21 47 13 100

PERCENTAGE 19 21 47 13 100

Table 4: Occupational profile of the sample

13%

19% Self employed employed 21% student housewife

47%

Graph 4: Occupational Profile

ANALYSIS: The sample includes 19% self employed consumers, 21% employed or service class consumers, 47% students and the rest 13% housewives. INFERENCE: People from all walks of life constitute the sample size as occupation is directly related to the income and with income comes the purchasing power and the ability to buy. Therefore, it was important to have the opinion of people from different work environment.

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1. MODE OF ENTERTAINMENT
The preference of mode of entertainment is needed to be analyzed as major chunk of advertisements are done through such mediums. These include Television, radio, magazines, newspaper, internet which highly paid advertising medium. Most of the respondents have selected more than one option for this statement. The following table and graph shows the most preferred means of entertainment among common people:

Mode of entertainment Television Radio Magazines and newspapers Internet Others TOTAL

No. of respondents 61 9

Percentage 61 9

18 30 11 129

18 30 11

Table 5: Preferred mode of entertainment

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70 60 50 40 30 20 10 0
Television Radio Magazines & Newspapers Internet Others

61

30 18 9 11

Graph 5: Most preferred mode of entertainment ANALYSIS: We are all aware of the fact that, today the most preferred means of entertainment for the people from all walks of life is television. And the survey also justifies that. From the table and the figure above, 61 people out of 100 said that they like watching television, 9 prefer watching radio, 18 read magazines and newspapers, 30 are internet savvy and 11 are not concerned with any of such medium. INFERENCE: For advertisements and specifically celebrity endorsed ads the most preferred mode is television. And people also opine that they like watching television the most. Therefore, the huge investment done over the ads and celebrity endorsements is justified to a large extent. Also, advertisements on radio, magazines and newspapers and internet are reaching people as they are also preferred by public. Hence, it can be concluded that, advertisements on television is the most effective way to reach the audience followed by internet and magazines and newspapers.

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2. TYPE OF PRODUCT
Type of product here signifies branded or non branded product. This is an important factor to be analyzed as people who prefer buying non branded product will not be affected by advertisements of branded products and the celebrity endorsing those branded product. Type of product Branded product Non-Branded product Both TOTAL No. of respondents 58 23 19 100 Percentage 58 23 19 100

Table 6: Type of product

19% Branded Non branded 23% 58% Both

Graph 6: Type of product sample prefers to use ANALYSIS: From the table above and the graph, majority of the respondents prefer using branded products i.e. 58% wherein there are a few people who still prefer buying non-branded products which around 23% of the sample size. A considerable no. of 19% of the sample size prefer using both branded as well as non branded products. INFERENCE: The minority that would not prefer buying branded product will not have any effect of advertisements and celebrities endorsing the product. The factors that will affect their buying decisions is would be price, quality etc.

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3. SOURCE OF PRODUCT INFORMATION

Source of product information means the way in which a consumer apprehends the availability of a product in the market. Each respondent had made more than one choice on this account as well:

Source of product information Advertisements Word of mouth Window shopping Others TOTAL No. of respondents 71 44 36 8 129 Percentage 71 44 36 8 129

Table 7: Source of product information

80 60 44 40 20 0 36 71

8
Advertisements Word of mouth Window Shopping Others

Graph 7: Source of product information 71% of the sample opines that their main source of product

ANALYSIS:

information is advertisement, which is followed by 44% of the sample also opting for word-of-mouth followed by 36% opting for window shopping. INFERENCE: From the facts and information above, it can be inferred that advertisement affects the knowledge of a consumer about a product. It is a major source of product information for the consumer and an important source of product promotion for the producer. It is an advertisement which makes the consumer aware of the availability of the product in the marketplace.

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4. FACTORS INFLUENCING BUYING DECISION

Whether advertisements, brands and ambassadors are factors that influence the buying decisions of a consumer and the other factors that are considered before purchasing a product is also an important aspect of the analysis.

Factors influencing buying decision Brand ambassadors Advertisements Brand Price Quality TOTAL No. of respondents 16 13 29 50 48 156 Percentage 16 13 29 50 48

Table 8: Factors influencing buying decision

50 45 40 35 30 25 20 16 15 10 5 0 Brand Ambassadors Advertisements Brand 13 29

50

48

Price

Quality

Graph 8: Factors Influencing Buying Decisions

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ANALYSIS: From the above table and graph it is prominent that 50 people out of 100 in the sample consider price as a factor before buying a product followed by quality which was opted by 48 people as the most influential factor. Brand influences the purchase decision of 29, followed by brand ambassadors, 16, and advertisements being the least influential as 13 people consider advertisement for buying decision making. INFERENCE: Though, advertisement was the major source of product information to the consumer yet it is not the most influential factor in purchase decision making. The factors that affect the buying decisions are price and quality i.e. a product will be purchased only after considering the price and quality. Brand and brand ambassadors are also the factors that are considered by some of the respondents.

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5. FAVOURITE BRAND AMBASSADOR

This question was asked to the sample in order to analyze the brand ambassador that is most influential and to know that if they were to advertise a product will they choose a celebrity or not. Celebrity Shahrukh Khan Amitabh Bachchan Sachin Tendulkar Other Celebrities NONE TOTAL No. of respondents Percentage 28 15 15 9 33 100 28 15 15 9 33

Table 9: Favorite Brand Ambassador

35 30 25 20 15 10 5 0 Shahrukh Amitabh Sachin Other Celebrity None 15 15 9 28 33

Graph 9: Favorite brand ambassador ANALYSIS: 38% respondents opted not to choose any celebrity where as 28% people opted for Shahrukh Khan as favourits brand ambassador followed by Amitabh and Sachin with 15% each and 9% opted for other celebrites. INFERENCE: Shahrukh Khan is the most effectual of the brand ambassadors among the sample. Out of 100 about 67% respondents will choose a celebrity to endorse their product, justifies the fact that celebrity endorsement is a handy tool for promotion.

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6. DO YOU LIKE WATCHING ADVERTISEMENTS

The following data was collected through the survey:

Do like watching ads YES NO SOMETIMES TOTAL

No. of respondets 28 22 50 100

Percentage 28 22 50

Table 10: Do you like watching ads

Yes 28% Sometimes 50% No 22% Yes No Sometimes

ANALYSIS: The data depicts that 50% of the sample likes watching advertisements sometimes, 28% of the people like watching advertisements while 22% of people do not like watching advertisements at all. INFERENCE: Therefore, from the data collected it can be concluded that majority of the sample likes watching advertisements though not always but the no. of people who do not like watching ads at all is very minimal.

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7. ADVERTISEMENT: A SOURCE OF NEED RECOGNITION

Advertisements are a source of product information but are they a source of need recognition for the consumers.

Advertisement a source of need recognition YES NO SOMETIMES TOTAL No. of respondents 27 17 56 100 Percentage 27 17 56 100

Table 11: Are ads source of need recognition

27% Yes No Sometimes 17%

56%

Table 11: Source of need recognition ANALYSIS: 27% of the sample agrees that advertisements are a source of need recognition for them. 17% of the sample disagrees with the statement while 56% sometime find advertisement as the source of need recognition. INFERENCE: Therefore, it can be concluded from the above data that most of them felt that advertisement make people realize that they have the need of a product.

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8. ADS: INFLUENCE TO BUY PRODUCT

The main purpose of advertisement is to promote product in the eyes of the customer and to influence the consumer to buy the product among the rest to the brands of the competitor. Therefore, it is important to get the view of the consumer if they really get influenced to buy a product through advertisements.

Ads influence to buy a product Yes No Sometimes TOTAL

No. of respondents 17 23 60 100 Percentage 17 23 60 100

Table 12: Ads influence to buy a product

17% Yes No 60% 23% Sometimes

Graph 12: Ads influence to buy a product ANALYSIS: 60% of the sample said that sometimes they get influenced to buy a product from ads and 17% opine that ads definitely influence them for a product purchase but 23% totally disagree with the statement. INFERENCE: Though most of the people agree with the statement but there is still a considerable amount of 23% that disagree with it.

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9. CELEBRITY ENDORSEMENT INFLUENCE TO BUY A PRODUCT

Celebrity are a influence

No. of respondents

Percentage 8 52 40 100

Yes No Sometimes TOTAL

8 52 40 100

Table 13: Celebrity Influence to buy a product

Yes No Sometimes

Graph 13: celebrity influence to buy a product ANALYSIS: 8% of the sample agrees that celebrity influence them to buy a product and 40% opine that sometimes celebrity influence them in opting for a product but majority i.e. 52% of the sample size absolutely disagree with the statement. INFERENCE: Though celebrities are influential in many aspects of life of common public but according to the findings they are not an influence on the buying decision of a consumer.

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10. CELEBRITY ENDORSEMENTS CREATE PRODUCT IMAGE

The celebrity is used to endorse a product in order to communicate to the consumer about the product. But once a celebrity is attached to a brand both the celebrity and the brand go synonymous and the credibility is at stake. So it is essential to analyze the impact of celebrity on the product image. The data regarding the same can be analyzed as under:

Endorsements create product image YES NO SOMETIMES TOTAL

No. of respondents 44 16 40 100 Percentage 44 16 40

Table 14: Endorsements create product image

40%

44%

Yes No Sometimes

16%

Graph 14: Endorsements create product image

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ANALYSIS: 44% respondents believe that celebrity endorsing a product creates a brand image of the product while 16% completely disagree with the statement. Also, there are 40% people who opine that celebrity and product image sometimes go hand-in-hand. Therefore, it can be surmised that majority believes that celebrity endorsing a product provides an image in the minds of consumer. INFERENCE: More than just communicating or informing the consumer about the product, a celebrity endorsement is done in order to create a brand equity by using the popularity of the celebrity which will in turn give a certain amount of guarantee about the product and the brand to the consumer.

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11. PURCHASE DECISION ON THE BASIS OF ENDORSEMENT

When the respondents were asked, whether they will purchase a product on the basis of endorsement or will you choose a product just because it is endorsed by bigger celebrity, the following data was collected: YES NO MAY BE TOTAL 14 36 50 100 14% 36% 50%

Table 15: Will you purchase a product endorsed by a bigger celebrity

14 50 36 Yes No Sometimes

Graph 15: Will you purchase a product endorsed by a bigger celebrity ANALYSIS: According to 50% of the sample they might purchase a brand which has a bigger celebrity featuring in its ads but the same may not be necessary always. 36% of the sample disagrees with the fact that there is any relation between a celebrity and their purchase requirements. Though, a considerable 14% said that they purchase product if it is endorsed by a bigger celebrity. INFERENCE: From the above figure and data we can conclude that people wont purchase any product for the reason that it is being endorsed by a bigger celebrity.

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12. ENDORSEMENT ASSURES QUALITY:

People endorsing a product will be big names. So it was an aspect to be questioned that whether they assure quality of the product.

Endorsement assures quality

No. of respondents 40 25 35 100

Percentage 40 25 35

YES NO SOMETIMES TOTAL

Table 16: Endorsement assures quality

35%

40%

Yes No Sometimes

25%

Graph 16: Endorsement assures quality ANALYSIS: According to the survey, 40% people believe that celebrity endorsement is an assurance of quality and 35% opine that it may be an assurance of quality but the same may not be true in all circumstances whereas 25% of the sample completely disagree with the statement. INFERENCE: It will not be wrong to say that the prestige of the celebrity is also on the stake while they endorse some products. So people tend to believe that they will only use or endorse the products that are good quality and are effective.

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13. CELEBRITIES ACTUALLY USE PRODUCTS THEY ENDORSE

Generally, the advertisements that are seen give a notion that the celebrity actually uses the product he or she is endorsing. And theoretically, they are supposed to use them. So do people believe that the celebrity actually uses the product? Celebrity uses the product YES NO SOMETIMES TOTAL No. of respondents 6 67 27 100 Percentage 6 67 27

Table 17: Celebrities actually use the products they endorse

6% 27% Yes No Sometimes 67%

Table 17: Celebrities actually use the products they endorse ANALYSIS: In the opinion of 67% of the sample the celebrities dont use the products they endorse whereas only 6% of the sample agrees with the statement. 27% of the consumers are not bothered about whether the celebrity uses the products or not. INFERENCE: It is quite clear from the graph and the data above that the consumer is smart enough not to believe in the gimmicks of the advertising media. They know the fact that both the brand ambassadors as well as the advertiser are serving their own purposes. Therefore, they out rightly reject the phenomena of celebrities using the endorsed products.

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14. CELEBRITY ENDORSEMENT INFLUENCES CONSUMER PERCEPTION

Celebrities, no doubt, are a source of inspiration for many but are they playing any kind of role in influencing the behavior of a consumer or perception towards any product or commodity they are endorsing. The following data can be analyzed for the same:

Endorsements influence perception YES NO SOMETIMES TOTAL No. of respondents 48 11 41 100 Percentage 48 11 41 100

Table 18: Celebrity influences consumer perception

41% 48%

YES NO SOMETIMES

11%

Graph 18: Celebrity influences consumer perception

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ANALYSIS: 48% of the sample agrees that a celebrity influences the perception of common people and 41% support them saying that even they sometimes get to change their perception about the products through celebrity endorsements. But 11% of the sample refuses to agree that celebrities have any influence on their perception. INFERENCE: It can be concluded from the data above that celebrities are an influence on the perception of the people though not much but they have at least a small part to play where the perception of the common people is concerned.

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15. FAVOURITE ADVERTISEMENT

Here the advertisements have been classified into two: celebrity ads and non celebrity ads and the response of the respondents have thus been divided into two for the analysis. This facet was analyzed in order to find the kind of ads people prefer watching (celebrity or non celebrity). It was analyzed to find what kind of advertisements has a better impact on consumer.

Ads Celebrity ads Non Celebrity ads TOTAL

No. of respondents 34 66 100

Percentage 34 66

Table 19: Type of Advertisements

Celebrity Ads Non celebrity ads

Graph 19: Type of Advertisements ANALYSIS: Celebrity endorsed products ads are preferred by 34% of the sample, whereas 66% prefer watching ads that have common people communicating the product information. INFERENCE: People prefer watching non celebrity ads more as they are more real and a common consumer can identify more with ads featuring family, kids and other such people rather than the glamorous, unrealistic and loud ads featuring celebrities which they know are just to attract their attention.

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GRAPH 20: FAVOURITE ADVERTISEMENTS

8 7 6 5 3 2 1 0
Amul Fevicol TOI

Surfexcel Virgin PEPSI Mobile Fevicol Hutch Happydent Airtel

Favourite ads

4 Amul

TOI

Surfexcel

Airtel

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HYPOTHESIS TESTING
Defining the hypothesis:
Ho: Celebrity endorsement influences consumer perception and brand image H1: Celebrity endorsement has no influence on consumer perception and brand image

The Test: The observed values are as follows:

Particulars Influences Perception Influences brand image Total

Yes 48 44 92 Table 20

No 11 16 27

Sometimes 41 40 81

Total 100 100 200

Calculation of null hypothesis: The total no. of items is 3. So degree of freedom is: Degree of freedom = (No. of items-1) = 3-1=2 Level of significance = 5% So, the null hypothesis value for D.O.F 2 and level of significance 5% is = 5.991

Calculation of alternate hypothesis: Expected value (E) = Row total*column total/grand total

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Calculation of chi-square value:

Observed (o) 48 11 41 44 16 40 TOTAL Therefore,

Expected (E) 46 13.5 40.5 46 13.5 40.5 O-E 2 -2.5 0.5 -2 2.5 -0.5 (O-E)2 4 6.25 0.25 4 6.25 0.25 (O-E)2/E 0.087 0.463 0.0062 0.087 0.463 0.0062 1.1124

Chi-square = 1.1124

The value of chi- square 1.1124 is lesser than 5.991, therefore we accept the null hypothesis

Therefore, from the hypothesis testing we can conclude that celebrity endorsements influences consumer perception.

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CHAPTER 6:
FINDINGS, SUGGESTIONS AND CONCLUSION

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FINDINGS
The most preferred means of entertainment is television as 61 people out of 100 said that they like watching television, 9 prefer watching radio, 18 read magazines and newspapers, 30 are internet savvy and 11 are not concerned with any of such medium. People prefer using branded products these days as 58% of the sample agree with that wherein there are a few people who still prefer buying nonbranded products which around 23% of the sample size. 19% prefer both kinds of products. 71% of the sample opines that their main source of product information is advertisement, which is followed by 44% of the sample also opting for word-of-mouth followed by 36% opting for window shopping. The factor that influences the purchase decision the most are price and quality rest all are secondary. Shahrukh Khan is the most effectual of the brand ambassadors among the sample. Out of 100 about 67% respondents will choose a celebrity to endorse their product, justifies the fact that celebrity endorsement is a handy tool for promotion. 50% of the sample likes watching advertisements sometimes, 28% of the people like watching advertisements while 22% of people do not like watching advertisements at all. 27% of the sample agrees that advertisements are a source of need recognition for them. 17% of the sample disagrees with the statement while 56% sometime find advertisement as the source of need recognition. 60% of the sample said that sometimes they get influenced to buy a product from ads and 17% opine that ads definitely influence them for a product purchase but 23% totally disagree with the statement.

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44% respondents believe that celebrity endorsing a product creates a brand image of the product while 16% completely disagree with the statement. Also, there are 40% people who opine that celebrity and product image sometimes go hand-in-hand.

According to the survey, 40% people believe that celebrity endorsement is an assurance of quality and 35% opine that it may be an assurance of quality but the same may not be true in all circumstances whereas 25% of the sample completely disagree with the statement.

In the opinion of 67% of the sample the celebrities dont use the products they endorse whereas only 6% of the sample agrees with the statement. 27% of the consumers are not bothered about whether the celebrity uses the products or not.

48% of the sample agrees that a celebrity influences the perception of common people and 41% support them saying that even they sometimes get to change their perception about the products through celebrity endorsements. But 11% of the sample refuses to agree that celebrities have any influence on their perception.

Only 34% people, according to the survey, prefer watching ads featuring celebrities while the rest i.e. the majority prefers watching ads which are closer to reality and not glamour.

ABSTRACT
From the analysis, it has been found that people are influenced by celebrities to a large extent but only when the advertisements talk sense. That is, consumer today is smart enough to decide on his own what will eventually benefit his interest. People also like watching ads but ads which are entertaining. The most preferred media of entertainment is television and the most influential brand ambassador is Shahrukh Khan. large extent. Therefore, it will not be wrong to say that advertisements and endorsements effect the perception of the consumer to a

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SUGGESTIONS AND RECOMMENDATIONS

To stand out of the clutter in this world of promotion, advertising and competition celebrity endorsements can be a handy tool. The celebrity can be used to create a brand image, brand identity and brand recall among the customers. There are umpteen number of products and every product has to create an image in the mind of the customer and that is possible through advertising and to a large extent also by celebrity endorsements. But followings aspects should be considered: The communication objectives of the campaign should be clearly defined and efforts should be concentrated on achieving those. A perfect match should be established between the brand and the celebrity endorsing the brand. The source of credibility of both the brand and the ambassadors should not be hampered. Television is the most preferred mode of entertainment so the major chunk of advertisements should be done through TV so as to increase the reach. Advertisements should be telecasted during the time slots in which the most popular shows or programs are on air like, cricket match, popular daily soaps, awards and concerts etc. to avoid zipping and zapping People prefer watching entertaining advertisements so even if there is celebrity endorsing a product, the entertainment aspect should not be neglected. Positioning of the product is another aspect that should be considered for making an advertisement and choosing a brand ambassador. Once when these criteria are met, endorsements can work as a force multiplier. This can prove to be a very effective and will have a great impact on the consumer. M P BIRLA INSTITUTE OF MANAGEMENT 75

CONCLUSION
A brief assessment of the current market situation indicates, that celebrity endorsement advertising strategy can under the right circumstances indeed justify the high costs associated with this form of advertising. The use of celebrity for endorsements create a very favorable impact on the consumer and it creates a connect which forces a consumer to purchase a product. However, as several failures show, it is essential for advertisers to be aware of the complex processes underlying celebrity endorsement. It has been proved from the discussion that celebrity endorsements are a powerful and useful tool that magnifies the effect of a campaign but the word of caution to be followed seriously; celebrities alone do not guarantee success nor does a great advertising campaign or the best possible product. It is the combination of several factors and elements that work together for the success of a brand and its acceptance in the minds of consumers as well as for its market offering. Modern day consumers are well educated and smart, they know celebrities are being paid for these endorsements and this knowledge makes consumers rather more cynical about the product and celebrity endorsements. Majority of the consuming population also knows what is advertising and how it actually works and this knowledge of consumer makes the task of celebrity endorsement all the more difficult and challenging for the advertising companies and the sponsors. Indian companies both advertising and product offering companies have top make an effort to overcome this ever-mounting challenge. Whether Celebrity endorsement has a positive or a negative impact on the brand is a debate that is open to interpretation. But till the time the corporate world continues to foot fancy bills of celebrity endorsers and till consumers continue to be in awe of the stars, the party is not likely to break up.

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BIBLIOGRAPHY:
Most of the information gathered is through primary research Google.com Advertising and promotions by George E. Belch & Michael A. Belch Marketing Management by Philip Kotler Consumer Behaviour by Leon G. Schiffman and Leslie Lazar Kanuk Various other websites

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ANNEXURE
THE QUESTIONNAIRE:
NAME: Age: Sex: Marital status: OCCUPATION: EDUCATION: 1. ------------------------------------------------------------------- 15-25 Male Single Self Employed Student 25-35 35-55 55 and above

Female Married Employed Others --------------------------

School Graduation Post Graduation Others --------------------------

Most preferred means of entertainment: Television Radio Magazines or newspapers Internet Others-------------------------------------------------You will prefer to buy: a branded product a non branded product Window shopping

2. 3.

The source of product information for you is: Advertisements Word-of-mouth Others---------------------------

4. 5.

Factor that influences your buying decisions: Brand Ambassadors Advertisements Brand

Price Quality

A celebrity you will choose to endorse your product: Sachin Tendulkar Shahrukh Khan Amitabh Bachchan Other celebs------------------- None Do you like watching advertisements? Yes No Sometimes Advertisement is one of the sources of need recognition: Yes No Sometimes You get influenced to buy a product through advertisements: Yes No Sometimes

6. 7. 8.

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9.

In your opinion, other people get influenced to buy a product through advertisements: Yes No May be You get influenced to buy a product through celebrity endorsement: Yes No Sometimes Do you think a celebrity endorsement creates a product image or a brand identity? Yes No Sometimes Will you choose a brand endorsed by a bigger celebrity? Yes No May be Celebrity endorsement ensures quality of a product: Yes No Sometimes Do you think that a celebrity endorsing a product actually uses the product? Yes No May be People relate more to a product or an advertisement if it is endorsed by a celebrity: Yes No May be Do you think a celebrity endorsement influences consumer perception? Yes No Sometimes

10. 11.

12. 13. 14.

15.

16.

17. Which is your favorite advertisement? Why?? ------ -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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