The effect of celebrity endorsement on Customer usage behavior

in the case of Dashen bank

By
Eyuael Solomon

Thesis submitted to the school of graduate studies college of Business and Economics and
social sciences Unity University in the partial fulfillment of the degree of master in Business
Administration Specialization in marketing

October 2020
 ACKNOWLEDGEMENT

First and foremost, I would like to thank God for all the blessings I have received from him that
enabled me to be where I am today.

I would like to express my appreciation to my advisor TarkegnDea (Ph.D.), who has given me
his invaluable advice, guidance, and encouragement from the beginning up to the end the study.

My deepest gratitude goes to my father for his love and moral support and for being in my whole
life. I would like also to thank my friends who have helped me to complete this study by
providing moral support and their invaluable suggestions.

Finally, I offer my regards to those that were involved in administering the questionnaires,
without their help this research would not have been possible.
 Chapter One

INTRODUCTION

1.1. Background of the Study

Business success in the 21st century is complex that businesses need advertisement by endorsing
celebrities their product. This is because of many advertisements released to users. Hence
companies have problem in selecting celebrities for their product which produced for their
consumers. According to [CITATION Bel03 \l 1033 ] celebrity’s effectiveness as an endorser depends
on the culturally acquired meanings he or she brings to the endorsement process. Each celebrity
contains many meanings, including status, class, gender, and age as well as personality and
lifestyle.
Any business firms prosper if and only if it attracts and keep consumers who are willing to pay
for its product. This implies that advertisements for goods and services must be attractive that
catches mind of consumers, should be smart to catch users mind. As [ CITATION Par11 \l 1033 ] states
that, although the audience is getting smarter and smarter and the modern day consumer is
getting resistant to the exaggerated claims made in a majority of advertisements, advertisers are
focused on celebrities and their popularity for advertising their products.
Consumers need to be aware of goods, on way to address the features of the goods and services
companies need advertisement. As (Hassan, 2014)Advertisement is “the art of persuasion’’ that
is mainly concerned to create awareness about what is being offered with ultimate objective to
persuade towards buying.
Advertisement is one way to communicate with the customers. In order to address customers’
companies can use different strategies. One of the method could be the use of celebrity (Khatri,
2006) Celebrities are people who enjoy public recognition by a large share of a certain group of
people whereas attributes like attractiveness, extraordinary lifestyle are just examples and
specific common characteristics cannot be observed though it can be said that within a
corresponding social group celebrities generally differ from the social norm and enjoy a high
degree of public awareness.
In many companies there are endorses of product, who are famous public figures. This is strategy
for the firms to advertise their product according to[ CITATION Ahm15 \l 1033 ] celebrity endorsement
is the Promotion strategy to attract the customers. By analyzing the current market, now it’s
become the need of the marketers to use the different famous personalities to relate with their
brands to create unique identity of the brand and to do famous his company’s brand or product,
which results high expenditure for the company to use that strategy, however nowadays it is used
to be a powerful strategic tool to get maximum profit.
Consumer behavior is the decision process and physical activity engaged in when evaluating,
acquiring, using or disposing of goods and services. As [ CITATION Gir12 \l 1033 ]Consumer buying
behavior is the study of how people buy, what they buy, when they buy and why they buy. It
attempts to understand the buyer decision-making process, both individually and in groups.

In any advertisement firms must attract their customers to purchase their product. They must
insure the conveyed message should be convincing to users. As [ CITATION Kha06 \l 1033 ] stated, the
effectiveness of a message depends on the perceived expertise and trustworthiness of an
endorser. The central goal of advertising is the persuasion of customers.
In most literature advertising with celebrities is most acceptable for consumers to use the
endorsed products. The advertisements have impact on customers’ perception to their attitude,
buying behavior and to enhance using products endorsed by celebrities.
Most agreed that advertisement endorsed by celebrities can affect the buying behavior of the
consumers. This is becoming common strategy to firms, endorsing celebrities to advertise the
products and services they provide to the consumers, as result to share the market and to get
profit out of the advertisement.

Currently, the use of celebrities as part of marketing communications strategy is a fairly common
practice for major firms in supporting corporate or brand imagery.

Giving a brand 'face' is more than just a marketing strategy to increase sales or gain market
share. A truly designed celebrity endorsed commercial can change the future of the brand forever
and as celebrities enjoy Specific image, high profile, public recognition a company can bank on
this while this face opens his/her mouth on behalf of the company product produced consumer
by appearing with it in an advertisement [ CITATION Bel03 \l 1033 ] . Nowadays, in Ethiopia In order
to get high market share of product some of the organization become adaptive with their brands
are endorsed by celebrities for creating awareness and motivating there customer’s. The main
purpose of this paper is to investigate the effect of celebrity endorsement in usage of the service
by customers.

In today’s competitive world consumers are exposed to thousands of voices and images in
magazines, newspapers, and on billboards, websites, radio and television. Advertisers attempt to
steal at least a fraction of a person's time to inform him or her of the amazing and different
attributes of the product at hand. Because of the constant media saturation that most people
experience daily, they eventually become numb to the standard marketing techniques. The
challenge of the marketer is to find a hook that will hold the consumer’s attention such as media
message content and the hooks that can hold the consumer’s attention are the celebrities.
In marketing, different tools are used to promote the product and make the consumer aware of it.
Among all these tools, celebrity endorsement is one of the most emerging, successful and
effective tool. Advertisement is “the professional persuasion‟‟ that is convene to create
awareness about what is being offered. Advertising is integral part of the society and economic
systems for both consumers and businesses. It helps to deliver carefully prepared messages to
target audiences thus facilitating marketing programs of the products and services of most
organizations. Today celebrity endorsement has become one of the most popular forms of
advertising (Choi, 2007)cited by[ CITATION Ape13 \l 1033 ]. Flipping through the various television
channels, print media and radios or social media consumers find quite a number of
endorsements.
In Ethiopia, although there are no statistics available to show the prevalence of the practice, the
use of celebrity endorsement in advertisement is increasing. Hence, this study aimed to examine
the effect of celebrity endorsement on customers’ usage behavior: the case of Ethiopian banking
industry.

In Ethiopian banking industry is witnessed in engaging celebrities to endorse its products.

However, the practice of celebrity endorsement did not get the attention of many researchers in
Ethiopian context. This fact has also been one of the reasons why the researcher becomes
motivated to choose the topic area. Hence, it is important to examine the effect of celebrity
endorsement on customers’ usage behavior: the case of Ethiopian banking industry.
Today, celebrity endorsement is being seen as more and more essential part in an integrated
marketing communication strategy. Every marketer wants to use it. However, there is also a
great risk behind the use of the celebrities. The celebrity personality should match with the
products personality of target market and with the society. Today, the attitude, taste, preferences
and buying pattern of consumers are changing rapidly and consumers are becoming more literate
and aware of the products that they use to fulfill their needs and wants. Today, celebrity
endorsement is a very successful and commonly practiced strategy for major firms to create and
improve company’s brand image [ CITATION Gir12 \l 1033 ].
1.2. Statement of the problem

In today’s world the celebrities are being treated as a role model. People are changing their living
style related with their favorite celebrity. This thing creates a great impact on the buying
behavior of the persons [ CITATION Ahm15 \l 1033 ].

To get the attention of their customers’ towards their product and service companies use different
advertisement mechanisms, this is done to overcome their competitors. According to [ CITATION
Ape13 \l 1033 ] the aim behindany message is to achieve the purpose for which it was conceived.
Companies, civil society organizations and government agencies spend billions of money
annually placing one form of advertisement or the other in the media.
Celebrities are people who enjoy public recognition by a large number of people and enjoy a
high degree of public awareness . An endorsement on the other hand is a testimonial in a
marketing communication which could be a written or spoken statement in favor of a product
and is given by a party other than the maker of the product (Hassan,2014). Celebrity
endorsement is an advertising strategy whereby companies use people of public recognition as
spokespersons for their product. However, any advertisement has big budget, advertisement can
succeed only if the advertisement gets the attention and communication well. Advertisers are
accountable for the money they spent on this promotion.
They expect customers’ attraction to the promotion they release through the media, According to
[CITATION Oha \l 1033 ] Construction and Validation of a Scale to Measure Celebrity Endorsers'
Perceived Expertise, Trustworthiness, and Attractiveness. Given the large sums of money spent
on celebrity advertising, advertisers should use the scale as an integral part of their effectiveness
testing and tracking.
Celebrity endorsements area popular marketing communication’s strategy globallyYet, there is
limited understanding of how celebrity endorsements influence consumers‟ motivation and
awareness towards the product and its service of an endorsed brand

The above mentioned studies have found the effect, impact and relationship between celebrity
endorsement on consumer behavior and purchase intention. However, this study explores the
impact of celebrity Endorsement in creating awareness and motivation to utilize the service of
Ethiopian Banking industry.
In the case of Ethiopia, there are three studies conducted by AlemBayu in 2014 (unpublished
MA thesis) on consumers' perception towards celebrity source credibility in Ethiopian context
using student samples. Other BahiruDemisse (2015) (unpublished MA thesis) on the effect of
celebrity endorsement on consumers’ attitude and purchase intention: the case of Ethiopian
banking industry. However, the first research used only student population which may not
represent the wider consumer population. The second focused only in the consumers’ purchase
intention and their attitude on celebrity endorsement. Other research done by Elias Seife (2016)
(unpublished MA thesis), on Factors affecting the effectiveness of celebrity endorsed
advertisement of Ethiopian banking industry. In his finding all attributes of celebrity
endorsement except physical attractiveness have positive and significant effect on the purchase
intention.
In Ethiopian banking industry is witnessed in engaging celebrities to endorse its products.
However, the practice of celebrity endorsement did not get the attention of many researchers in
Ethiopian context. This fact has also been one of the reason why the researcher becomes
motivated to choose the topic area. Hence, it is important to examine the effect of celebrity
endorsement on customers’ usage behavior: the case of Ethiopian banking industry. Therefore
this research tries to answer to find answer the following questions?

1.3 Basic Research Questions

 What is the existing practice in the area?
 To what extent banking sector use appropriate celebrity endorsed ad
 Is there r/ship b/n celebrity endorsement and customer usage behavior?
 To what extent celebrity endorsement affect customer usage behavior ?

1.3.1 Hypothesis of the study

Hypothesis of the research will be based upon the concepts of ohanian source of credibility
model and product celebrity match
H1): - Perceived Expertise of the celebrity has positiveinfluence on customers’usage behavior.
H0 Perceived Expertise of the celebrity has negativeinfluence on customers’usage behavior
H2): - Perceived Trustworthiness of the celebrity has positive influence oncustomers’ usage
behavior.
H02): - Perceived Trustworthiness of the celebrity has negative influence oncustomers’ usage
behavior

H3): - Perceived Attractiveness of the celebrity has positive influence oncustomers’ usage
behavior.
H03Perceived Attractiveness of the celebrity has positive influence oncustomers’ usage behavior.
H4): - Perceived Product/Celebrity Match has positive influence on customers’behavior.

H04): - Perceived Product/Celebrity Match has positive influence on customers’behavior.

1.4 Objectives of the study

1.4.1General objective of the study
The main objective of the study is to examine the overall effect of celebrity endorsements in
customer usage of the service of dashen bank

1.4.2 Specific objective

 To identify the existing practice of celebrity endorsement in the banking industry.
 To examine the attractiveness, trustworthiness, expertise and familiarity of celebrity can
affect awareness and motivation of customers to utilize the service of the banks.
 To identify the relationship between the celebrity endorsement and Customer awareness
and motivation to utilize the banks service.
1.5 Significance of the study
The study has practical significance for commercial banks, advertisement agencies and
marketing practitioners of the sector by examining the effect of celebrity endorsement on
customers’ usage behavior: the case of Ethiopian banking industry. This study also identifies the
dominant celebrity endorsement factor on customers’ usage behavior, therefore marketing
practitioners of the industry benefited by considering this dominant effect while selecting
celebrities to endorse their banks.
This research work will help to know the impact of celebrity endorsement on customers’ usage
behavior in the banking industry. It will be of significance to those who do not have knowledge
about celebrity endorsement and consumers buying behavior which are effective advertising
strategies

1.6 Delimitation/scope of the study

The study was confined to the celebrity endorsements on dashen bank in Addis Ababa. In
addition, it is only celebrity endorsed advertisements made on TV and print media was used in
order to facilitate the data collection. In terms of variable selection, in expanding the original tri-
component
[ CITATION Oha \l 1033 ]source of credibility scale with the indicator of perceived ‘expertise’,
‘trustworthiness’, ‘attractiveness’. In addition to this it uses the match up-hypothesis.

1.7 Organization of the Paper

The research paper consistedof five chapters. The first chapter is the introductory chapter and
contains statement of the problem, research questions, and objective of the study, significant of
the study, scope of the study and limitation of the study. The assessment of the theoretical
foundations and relevant literatures were presented in chapter two. The third chapter dealt with
the methodology used in the research activity. Data analysis and interpretation of the research
results were discussed in Chapter four. The final chapter covered the discussion of results,
conclusions and recommendations. In addition other sections, namely, list of references and
annexes are also parts of the research framework.
 Chapter Two
Review of Related Literature
2.1 Introduction

Advertising is a very strong component of business in any society. It possesses pervasive and
persuasive power though primarily designed by firms in order to create awareness about goods
and services [ CITATION Ape13 \l 1033 ].

The advertising market has become more cluttered and competitive now and everywhere. To
highlight their brand, advertisers are turning to celebrities as endorsers. They are willing to invest
significant amount of monies to juxtapose their brands with celebrity’s attributes like
attractiveness, expertise and trustworthiness. They believe that the celebrity’s qualities might
transfer to their brand, thus produce favorable campaign results [CITATION Mud11 \l 1033 ].

This chapter presents the review of existing literatures in the area of celebrity endorsements in
order to acquaint readers with better understanding of the subject matter. Which incorporates the
theoretical review, empirical review and finally, the chapter also presents the conceptual
framework of the study.

2.1.1.1 Theoretical Background for Celebrity Endorsement

Celebrities are those who have high level of attractiveness special skills, knowledge, life styles
and due to these they are different from ordinary peoples and they are also highly recognized by
the people, [ CITATION Sul15 \l 1033 ]. Celebrities are popular people who have been found to be
highly effective in product promotion.

According [ CITATION Ahm15 \l 1033 ] defines Celebrities are inviters who invite the people to buy
the product or service with enormous power in Ads than any other due to their credibility and
distinctive position that leads towards intention to buy.
2.1.1.2 Understanding the Meaning of Celebrity Endorsement

In large many advertisements are released every day to the customers. The advertisements may
be on the print media or could be in entertainment. However, consumers may not capture the
massage as they read or see, as to capture their users’ companies endorse celebrities for the
product in the advertisement.

If consumers find a particular spokesperson annoying or untrustworthy, they are less likely to
accept what this source has to say. Of course, source-related thoughts are not always negative.
Receivers who react favorably to the source generate favorable thoughts, or source bolsters. As
you would expect, most advertisers attempt to hire spokespeople their target audience likes so as
to carry this effect over to the message [ CITATION Bel03 \l 1033 ].
According to [ CITATION Kha06 \l 1033 ] categorize celebrities in four major forms of celebrity
endorsement. Companies could adjust their advertisement campaign, in order to get the attention
of their customers.

Testimonial: If the celebrity has personally used a product or service and is ina position to attest
its quality, then he or she may give a testimonial citing its benefits.

Endorsement: celebrities often lend their names to ads for product or servicesfor which they
may or may not be the experts.

Actor: A Celebrity may be asked to present a product or service as a part ofcharacter enactment
rather than personal testimonial or endorsement.

Spokesperson: A celebrity who represents a brand or company over extended periods of time
often in print and TV ads as well as in personal appearances is usually called a company’s
spokesperson.

2.1.1.3 Advertisement
Major intend of each commercial is to create attentiveness and stimulate interest in consumer’s mind.
Today almost every company from different industries uses advertisement as their basic tool to
encourage their goods and services, because it’s the best way to convey information to the huge
public in an effective and efficient manner [ CITATION Oha \l 1033 ]. According to [CITATION Kha061 \l
1033 ] stated, in advertising, people of prominence and, owners can be used and their experiences and

satisfaction received can be projected through conversation and, by giving their impression to the
general public and non-owners of the product.

The matching of the celebrity with the brand might looks simple but development of those
advertisements which have the desired match of brand attributes with the characteristics of the
celebrity and then achieving success in the form of the achievement of desired results of the
advertising campaigns requires detailed understandings of the objectives which company has made
for the brand, choice of the appropriate celebrity for the brand and development of the appropriate
basis for measuring the success of the brand (Sultan,2015).

2.1.1.4 Celebrity advertising

Consumers’ in the modern age are reading and seeing many advertisements. Which they do not
remember it, companies as result endorse celebrities to promote products. Consumers are getting
smarter that companies need to address right advertisement for the users. According to
(Parmar,2014) the modern day consumer is getting resistant to the exaggerated claims made in a
majority of advertisements; advertisers are focused on celebrities and their popularity for
advertising their products.
In this era of rapidly emerging information technology and communication, consumers are very
much exposed to advertisements anytime and anywhere. Customers are exposed to thousands of
ads in magazines, billboard hoardings

Using celebrities in advertisement

In the mind of customers, using endorsers in an advertisement has an impact. Celebrity and non-
celebrity advertisement both have effect on perception of the consumer. In using celebrities’
consumers have become more critical of the advertisement. They take the meaning from writing
in multiple different ways so the advertiser should present truth in their images, they should not
mislead the consumer [ CITATION Ape13 \l 1033 ].

To be effective, advertisers must find a unique way to break through the ad clutter and provide the
audience with sufficient motivation to pay attention and engage in higher order processing of ad
messages.

One of the popular strategies of creatively breaking through the clutter is by using celebrities to
endorse the company’s brand in the advertisement. Celebrities are popular people who have been
found to be highly effective in product promotion [ CITATION Mud11 \l 1033 ].

Many consumers aspire to share values and lifestyle of celebrities as models of success as they
imitate and even impersonate celebrities’ behavior to enhance their own self-esteem. Such
imitations include the way celebrities live, dress, communicate and most importantly, the brands
of products they choose and use [ CITATION Als06 \l 1033 ]. For these reasons, advertisers are willing
to spend a lot of money to have celebrities endorse their brands.

Advantage and Disadvantages of Celebrity Endorsement

Companies in these days want to gain market share through their advertisement campaign. In
doing this they endorse celebrities to promote products they produce to consumers. According to
(Parmar, 2014)Celebrity endorsement is the way to maximize advertising effectiveness. Popular
celebrities like athletes and film stars are considered as god by their lovers, but it is essential for
marketers to establish the link between a product and celebrity by considering the type of
product.

“The importance of celebrity endorsers does not lie in the fact that they are used by firms who
wish to increase revenue, but in how these celebrities add value to a company, brand or product”
(Amos, et al., 2008)cited by [ CITATION Dzi13 \l 1033 ] . Sadly, celebrity advertisers sometimes do not
reach the company’s expectations. Celebrity advertising has many advantages and disadvantages.
With all the social media prevalent in modern society, celebrities can reach new heights of fame
that were unthinkable in the past.

When talking about the advantages of celebrity advertising, one advantage is more clear and
obvious than the rest. In simple terms, celebrity advertising influences consumer purchases.
Consumers see a celebrity on an advertisement and think, “If this product works for this
celebrity, then it can work for me” (Hassan, 2014).
Celebrities can also increase brand awareness. If a brand is struggling to get its name out or is not as
powerful a name as the company would like, using a celebrity can be extremely resourceful.
“Celebrities are eye-catching; there’s a pure awareness factor that makes you stop and look at an
advertisement because you recognize the spokesperson” [ CITATION Kha06 \l 1033 ]. Because of this, a
celebrity can make one brand stick out over a competitor. When a person goes food shopping, more
often than not, they do not know much about many brands. However, when they see a celebrity
they do know about and like on the front of the packaging, they are more likely to pick that
brand.

Although positive and valuable in many respects, celebrity advertising is a risky venture and can
have negative effects. One disadvantage of celebrity advertising is consumer skepticism. Many
times, the celebrity endorsing a product will not relate to the product well [ CITATION Ahm15 \l
1033 ]. Another common issue in celebrity advertising is multiple endorsements. Multiple
endorsements can cause problems in two ways. First, a celebrity can endorse multiple brands

A person can see a celebrity they dislike and completely disregard the product. The product
could be exactly what they need but because they dislike the celebrity endorsing it, they will
never buy it.

2.1.1.5 Consumer Behavior

According to [ CITATION Kha061 \l 1033 ] Consumer behavior reflects the totality of consumers’
decisions with respect to the acquisition, consumption, and disposition of goods, services,
activities, experiences, people, and ideas by (human) decision-making units. As [ CITATION Dzi13 \l
1033 ]stated consumer behavior involves much more than understanding what products a
consumer buys. It embraces factors, which can affect the decision-making process as a person
works through the purchase decision. The number of potential influences on consumer behavior
is limitless.

Consumer behavior can be illustrated as the analysis of a procedure through which consumers in
a form of individual or groups try to identify their requirements, select the most appropriate
product, service, idea or experience in order to make them satisfy (Sultan, 2015).

2.1.1.6 Consumer Behavior

According to [ CITATION Ahm15 \l 1033 ] Consumer behavior reflects the totality of consumers’
decisions with respect to the acquisition, consumption, and disposition of goods, services,
activities, experiences, people, and ideas by (human) decision-making units. As [ CITATION Dzi13 \l
1033 ] stated consumer behavior involves much more than understanding what products a
consumer buys. It embraces factors, which can affect the decision-making process as a person
works through the purchase decision. The number of potential influences on consumer behavior
is limitless.

Consumer behavior can be illustrated as the analysis of a procedure through which consumers in
a form of individual or groups try to identify their requirements, select the most appropriate
product, service, idea or experience in order to make them satisfy (Sultan, 2015).

2.1.1.6.1 AIDA

The AIDA Model is in fact an acronym for attention, interest, desire and action and describes a
cognitive journey of a consumer that travels through four main stages. This model can be
approached as a tool to encourage action by stimulating the purchase of a certain product or
service [ CITATION Hac15 \l 1033 ].

The AIDA: A model is presented for measuring the effectiveness of advertising.

This model includes four stages:

A. Attract the attention: to attract attention (and awareness) to mean thatbefore you sell
something you need to attract his attention. For the attention of people, there are many ways.
As for big title, controversial or shocking content can be ways to attract visits to our
promotional message (Barry & Howard, 1990).
B. Generate interest in the client: This means that demonstrating productfeatures and benefits,
people get interested in their product. Music and promoted language should be fit as well
with experience and attitudes of customers. In addition to promoting the client's target
language, to speak, Layout and content of the customer must also be correct and acceptable
(Barry & Howard, 1990).
C. To create enthusiasm: in the people that is very important Advertiser mustknow how to
target customers think the advertising message must be able to convince customers that the
intention is to introduce and supply of goods, Customer needs will be fulfilled (Barry &
Howard, 1990)cited by[ CITATION Ape13 \l 1033 ].

D. The last step is to end the acquisition. Purchase or sale at this stage of the customer you
want to know about buying, and to take its final decision to end the process. The advertiser
must be able to give them reassurance that the decision was correct and also That people
should be able use words to
2.2.6. Celebrity Endorsement Models

In most advertisement using celebrity has advantage for the firms. By using such known
individuals, it is easy to catch customers mind. It does not mean that these celebrities have
positive perception on consumers towards the endorsed brands. Marketers should select
celebrities carefully in order to have positive image of the products they offer.

2.2.6.1. Source Credibility Model

The source-credibility model resulted from a landmark study by Hovland and his associates
(1953)cited by [ CITATION Oha \l 1033 ]. They analyzed the factors leading to the perceived credibility
of the communicator and concluded that two factors namely, expertness and trustworthiness-
underscore the concept of source credibility [ CITATION Oha \l 1033 ].
Expertise: - As [ CITATION Oha \l 1033 ] explain expertise is defined as the extent towhich a
communicator is perceived to be a source of valid assertions. It refers to the knowledge,
experience or skills possessed by an endorser.
 Trustworthiness: - According to [ CITATION Oha \l 1033 ] the trust paradigm
incommunication is the listener's degree of confidence in, and level of acceptance of, the
speaker and the message. As [ CITATION Hac15 \l 1033 ] describes it is refers to the honesty,
integrity and believability of an endorser. It depends on target audience perceptions.

As [ CITATION Hoy08 \l 1033 ], in many marketing messages, information is presented by a

spokesperson, usually a celebrity, an actor, a company representative, or a real consumer. In a
sales situation, the salesperson is a spokesperson for the company and the offering. Both the
credibility of these sources and the credibility of the company influence consumers’ attitudes.
As[ CITATION Bel03 \l 1033 ] stated Information from a credible source influences beliefs, opinions,
attitudes, and/or behavior through a process known as internalization, which occurs when the
receiver adopts the opinion of the credible communicator since he or she believes information from
this source is accurate.

2.1.1.7 Ohanian’s Source Credibility Model

As of [ CITATION Oha \l 1033 ] discusses, both the source-credibility model of Hovland, et al. (1953),
and the attractiveness model of McGuire (1958) were used in defining the dimensions of source
valence. Expertise and trustworthiness as suggested by Hovland, et al. (1953) (also as the
credibility dimension of the McGuire source-valence model), and attractiveness were used as
hypothesized dimensions of source attributes.

Trustworthiness: - According to [ CITATION Oha \l 1033 ], trustworthiness is thelistener's degree of

confidence in, and level of acceptance of, the speaker and the message. In conclusion (Ohanian,
1990) stated trustworthiness of the communicator (celebrity) is an important construct in
persuasion and attitude-change research.
Therefore, a reliable measurement of this construct requires a series of items, rather than the
typical single item commonly used to measure the variable as a trustworthy-untrustworthy
dichotomy refers to the honesty, integrity and believability of an endorser. It depends on target
audience perceptions.

Advertisers capitalize on the value of trustworthiness by selecting endorsers who are widely
regarded as honest believable, and dependable reasoned that trustworthiness is the major
determinant of source credibility and then tried to discover which source attributes are correlated
with trust their findings showed that likeability was the most important attribute of trust

Expertise: - As [ CITATION Hoy08 \l 1033 ] define expertise as the degree to whichthe endorser is
perceived to have the adequate knowledge, experience or skills to promote the product. [ CITATION Oha
\l 1033 ] An expert source exhibited more agreement with the advocated position than did those

exposed to a low-expertise source. Source expertise in persuasive communication generally indicates

that the sources perceived expertise has a positive effect on attitude change.

Expertise is defined as the extent to which a communicator is perceived to be a source of valid

assertions. It refers to the knowledge, experience or skills possessed by an endorser. It does not
really matter whether an endorser is an expert; all that matters is how the target audience
[ CITATION Hoy08 \l 1033 ] perceives the endorser.

Expert sources influence perceptions of the product's quality. A source/celebrity that is more
expert has been found to be more persuasive and to generate more intentions to buy the brand
[ CITATION Oha \l 1033 ].

2.1.1.7.1 Source Attractiveness Model

The source-attractiveness model has its origins in the social psychological research and is a
component of the "source valence" model of McGuire according to [ CITATION Oha \l 1033 ]. In this
model The attractiveness model contends that the effectiveness of a message depends on source's
"familiarity,"" likability,"" similarity, and "attractiveness" to the respondent.
  Similarity: - is a supposed resemblance between the source and the receiver ofthe
message, while

 Familiarity: - refers to knowledge of the source through exposure.

 Likability: - is affection for the source as a result of physical appearance,behavior, or

other personal traits
 Advertisers have chosen celebrity endorsers on the basis of their attractiveness to gain
from dual effects of celebrity status and physical appeal. In order to discern the
importance of attractiveness, one only has to watch television or look at print
advertisements. Most advertisements portray attractive people.

2.1.1.8 The Product/Celebrity Match-up Hypothesis

The perfect congruence between endorser and product may lead to great endorser believability
through identification process and favorably influence consumer attitudes toward ads and
products as well as buying behavior.
The “Celebrity-Product Match-Up” proposition holds that in order to make an advertisement
effective, there must be congruence or fit between the product and the celebrity in terms of
characteristics such as image, expertise (Sultan, 2015) some celebrity endorsements work better
than others due to a natural match between the celebrity and the product in terms of cultural
meanings and images.

According to (Kahle,1985) cited by[ CITATION Ahm15 \l 1033 ] , the Match-up Hypothesis of
celebrity endorser selection fits well with Social Adaptation Theory. According to this theory,
the adaptive significance of information will determine its impact Similarly, (Kamins, 1990)cited
by [ CITATION Bah15 \l 1033 ] , argues that an attractive models inclusion in an advertisement may in
some consumer minds intrinsically prompt the idea that use of a brand endorsed by a celebrity
will enhance attractiveness as it did for the celebrity, hence, provide adaptive information.
2.2. Empirical Research finding

Several research studies have examined the congruency between celebrity endorsers and brands
to explain how celebrities help in promoting brands. Although, there are few empirical estimates
of the effect of celebrity endorsement on consumers buying behavior; it is clear that celebrities
have the ability to influence the behavior of their fans in other arenas.

In one experiment, an advertisement for a fictitious brand of Sangria wine featured an

endorsement attributed to a celebrity, a professional expert, a Company President, a typical
consumer and a college student read the ad and gave the ad 0-10 scales of believability, probable
taste, and intent to purchase. Across these three measures, the celebrity condition produced the
highest scores [ CITATION Fri79 \l 1033 ].

[ CITATION Ahm15 \l 1033 ] Conducted on Impact of Celebrity Endorsement on Consumer Buying

Behavior. The results show that the celebrity endorsement has reasonable impact on customers as
per their attitude and buying intention.
Physical attractiveness, credibility and congruence of the celebrity with the reference to endorsed
advertisement all have impact on customer perception about the advertised product. It has also
been highlighted that celebrity endorsement advertisements boosting up the sales and purchase of
product, people like to buy the products more if endorsed by the celebrity and it shows that
today’s customer is aware and influenced by media.
According to (Hassan, 2014) conducted research on, influence of celebrity endorsement on
consumer purchase intention for existing products: a comparative study, they found that as for
expertise is concerned Pakistani celebrities are considered to be more expert, motivating the
consumers to buy because they know the preferences of consumers due to belongingness to the
same country. Due to this know how they act in a way which gives more realistic emotional
effect in ads. Addition to this Pakistani celebrity usually rely on emotions in Ads which is also an
expert technique as that Pakistani people make most of decision on emotional basis for family
and friends.

According to [ CITATION Als06 \l 1033 ], they conducted research on, celebrity endorsement: a
congruity measure of personalities, the research shows that congruence between a celebrity and a
brand is an important concept, while considering the pre-attitude toward the ad featuring a
celebrity endorsing a brand. In a narrow sense the study put forwards the empirical evidence for
the general belief that, Endorser and the Brand must have congruence between their
personalities.

In the African context,[ CITATION Oye14 \l 1033 ],in his study conducted on Nigerian Telecom Industry,
found that the celebrities’ perceived trustworthiness, expertise, and attractiveness have significant
influence on the celebrities’ effectiveness on advertisements. On the other hand, the study on
processed food and soft drinks industry and the results of the study showed that both trustworthiness
and expertise have positive effect on consumers purchase

According to [ CITATION Bah15 \l 1033 ] has conducted research on the Effect of Celebrity
Endorsement on Consumers’ Attitude and Purchase Intention The result shows that consumers
have positive attitude towards the celebrity endorsed bank advertisements. In addition, celebrity
endorsements (measured by the attributes of attractiveness, expertise, trustworthiness, and
product/celebrity match) have positive influence on the attitude consumers have towards the
endorsed brand and their purchase intention. Although all the attributes have positive influence
on the consumers’ attitude and purchase intention, product/celebrity match and expertise have
the highest influence on consumers’ attitude towards the brands while physicalattractiveness and
trustworthiness have the highest influence on purchaseintention.

2.3 Conceptual Framework of the study

For this study, the conceptual frame work adopts concepts of Ohanian’s source of credibility
model, McGuire’s source of attractive model, and product/celebrity match.

Expertise
Expertise

Trustworthiness
Trust worthiness
Customer usage behavior

Physical Attractiveness
Physical Attractiveness

Product/celebrity match
Product/celebrity
match

Source: Adopted and modified (Sultan, 2015)

Figure 1: Conceptual Framework of the Study
2.4. Hypothesis of the Study

Hypothesis of this research will be based up on the concepts of Ohanian’s source of credibility
model, McGuire’s source of attractive model, and product/celebrity match.

Term expertise is defined as “the extent to which a communicator is perceived to be a source of

valid assertions” In order to persuade recipients of information endorser’s expertise has
encouraging effect on receivers [ CITATION Oha \l 1033 ]. (Belch & Belch, 1994) said that
information receivers have strong belief upon the person who is practical having related
knowledge,
expertise in advocating area. Endorser with high knowledge and skills has strong power of
recommendation as compare to the endorsers with low expertise [ CITATION Ahm15 \l 1033 ].

Celebrity expertise is one of the reasons in order to find out its influence on recipients of
information . If the celebrity advocating the product has strong knowledge and experience, then
he/she will ultimately have differential power to pursue due to strong believability.
H1): - Perceived Expertise of the celebrity has positiveinfluence on customers’usage behavior.
H0 Perceived Expertise of the celebrity has negativeinfluence on customers’usage behavior

H2): - Perceived Trustworthiness of the celebrity has positive influence oncustomers’ usage
behavior.
H02): - Perceived Trustworthiness of the celebrity has negative influence oncustomers’ usage
behavior

H3): - Perceived Attractiveness of the celebrity has positive influence oncustomers’ usage
behavior.
H03Perceived Attractiveness of the celebrity has positive influence oncustomers’ usage behavior.
H4): - Perceived Product/Celebrity Match has positive influence on customers’behavior.

H04): - Perceived Product/Celebrity Match has positive influence on customers’behavior.

 Chapter Three
Research Design and Methodology

3.1. Chapter Overview /Introduction

This chapter discusses the research methodology used for conducting this research. The
population and sample of the study, the type of data collected and the instruments used, methods
of data analysis, and finally, ethical issues related to the study was explained and justified.

3.1.1 Research design

Research Design refers to aset of methods and procedures that describes research variables. The
research was conducted under explanatory research methodsince explanatory method is where a
researcher has an idea or has observed something and seeksto understand more about it. An
explanatory research project is an attempt to lay the groundwork that will lead to future studies
or to determine if what is being observed might be explained by currently existing theory and it
attempt to connect ideas to understand cause and effect means researchers want to explain what
is going on.In addition,an explanatory research method helps to use both quantitative and
qualitative measurement methods. The quantitative measurement helps to use statistical method
of measurement in order to analyze and interpret what the researcher collectedthrough
distributing close ended questionnaire. The qualitative measurement helps to interpret
ideasgatheredthrough interview and open ended questionnaire. The researcher usedexplanatory
research method in order to explain the effect of celebrity endorsement in creating awareness and
motivating consumers towards buying their services.
3.1.2. Sampling design

In drawing the samples, non-probability convenience sampling method was used where
customers intercepted at the branches of dashen bank branches until the required sample size was
reached.

3.1.2.1 Target Population

Since the main objective of the study is to examine the overall effect of celebrity endorsements
on customers’ usage behavior, ideally the target population of the study were Ethiopian
customers. The target populations for the study were customers of the Ethiopian banking
industry in Addis Ababa. The target population of the study can be considered as infinite
population hence, there are customers of banks that utilize banking services without opening
accounts (i.e. without registering to the bank’s customer database).

3.1.2.2 Sampling procedure

This research used Convenience sampling, according to (Mark Saunders, 2009) involves
selecting haphazardly those cases that are easiest to obtain for your sample, such as the person
interviewed at random in a shopping center for a television program or the book about
entrepreneurship you find at the airport. The sample selection process is continued until the
research required sample size has been reached.

3.1.2.3 Source of Data

For this paper the researcher used both primary and secondary data, in order to facilitate the
research.

3.1.2.3.1 Primary source

This research used primary data. From primary data collection techniques, a survey method of
data collection is appropriate for celebrity endorsement and customers’ usage behavior and it
will be employed for this research.

3.1.2.3.2 Secondary source

The study used secondary sources of data from different research articles, books and other
publications to review literatures in the area of celebrity endorsement and to construct conceptual
frame work for the study.

3.1.3 Data Collection methodology

The primary data was collected through questioner, from the users of the banking service. And
secondary data was collected from relevant books, articles, journals and other relevant materials
which help to build the research idea.

3.1.3.1 Data collection instrument

The study mainly adopts [ CITATION Oha \l 1033 ] a tri-component source of credibility scale to
measure celebrity endorsers from the perspective of trustworthiness, expertise and attractiveness
and the product/celebrity match-up hypothesis.
The questionnaire prepared in line with the objectives of the study mentioned above and it will
be organized in three sections. The first section was designed to obtain the demographic
information of the respondents. The second section inquired how respondents perceive the
celebrity endorser on the three dimensions of “expertise”, “trustworthiness”, and “physical
attractive” and the measures of “product/celebrity match”. Questions related to customers’ usage
behavior using items of “I use the service of the bank because I am well aware of the service
endorsed by the celebrity”. “I use the service of the bank because of the expertise,
trustworthiness, the Physical Attractiveness and Perceived congruence (fit) between the celebrity
and the brands of the celebrity”. I found the advertisement by the celebrity to be personally
relevant for me. I will use the service of the bank endorsed by the celebrity, also interview
question were prepared beforehand so as to get clear picture of the problem hand

3.2 Data Analysis Methods

The data from the survey was entered and all analyses were performed with the Statistical
Package for the Social Sciences (SPSS version 23). Descriptive analysis used to organize and
summarize the demographic data of the respondent which include age, gender, educational level,
occupation, and the responses of items of the questionnaires.
On the other hand, multiple regression analysis used to measure the effect of celebrity
endorsement as measured by "expertise", "trustworthiness", "physical attractiveness", and
"celebrity/product congruence or match" on customers’ usage behavior.

That is, the attributes of celebrity endorsements “expertise", "trustworthiness", "physical

attractiveness", and "celebrity/product congruence or match" are the independent variables while
“customers’ usage behavior is the dependent variables. These relationships are expressed in the
following regression equations.

Eq.1........Y1 = β0 + β1X1 + β2X2 + β3X3 + β4X4 + e, where

Y1 – Customers’ usage behavior

X1 - perceived expertise

X2 - perceived trustworthiness

X3 - perceived physical attractiveness

X4 - perceived celebrity/product fit

In addition, correlation analysis was used to see if there is any correlation between the
independent and the dependent variable to test whether there is or not significant difference
between public and private bank in endorsement in celebrity endorsement of the brand. To test
the hypothesis, the researcher used T-test. These is because of there are two groups to analyze.

3.4 Validity and Reliability

3.4.1 Validity

Validity determines whether the measuring instrument truly measures what it was intended to
measure or how truthful the research results are. To measure the validity of results, we consider
the theory and the measuring instrumentused [ CITATION Cre03 \l 1033 ]. To assure validity, the
questionnaires are designed on the basis of previous studies questionnaires and review of related
literatures.
All the questioners derived from relevant literature to ensure validity of the questionnaire. The
questioners will be adopting form previous research works that are related to this research.

3.4.2 Reliability

After coding and entry of data into SPSS version 23, the first analysis conducted was to check the
reliabilities of the scales used in the data collection instrument. According to (Saunders,2009),
reliability is the extent to which your data collection techniques or analysis procedures will yield
consistent findings. It can be assessed by posing the following three questions. Cronbach-alpha, a
widely used measure of internal consistency, was run using SPSS 21 version and all of the scales
used for this study are found to be reliable as their respective alpha values are higher than 0.6, and
for most closer to 1. The Cronbach’s - alpha of each scale is presented in the following table.

Table . 1Reliability Test

Measurement Scale Cronbach’s’ Alpha No. of Item

Expertise 0.793 5
Trustworthiness 0.702 5
Physical Attractiveness 0.714 5
Product/Celebrity Match Hypothesis 0.705 4
Customers’ Usage Behavior 0.760 7
Cumulative 0.7348 26

3.5 Research Ethics

This study is governed by the general rules of research ethics in such a way that respondents
were requested to provide information on voluntary basis, there were prior communication about
the purpose of the study, and confidentiality of the information was guaranteed. Moreover, the
investigator was abided by the rules and regulations of the University and had conducted the
study on the basis of objective judgment.
Chapter Four
Data analysis and interpretation

4.1 Introduction
In this chapter, the data collected through survey are analyzed using statistical tool of SPSS
Version 23. First, the survey response rate and the reliability of the scales used are
discussed followed by discussion on the respondent's profile, their usage behavior using
descriptive statistical tools. Finally, the results of the principal component analysis and
multiple regression analysis are presented.

4.2. Normality
The normality of the population distribution is the basis for making statistical inferences
about the sample drawn from the population (Kothari, 2004). Most studies, which involve
statistical procedure, work under the assumption that observations have normal
distribution. Any violation of the normality rule may lead to overestimation or
underestimation of the inference statistic (Marczyk, et al., 2005). In order to examine
normality one has to measure each variable’s skewness, which looks at lack of symmetry of
distribution, and kurtosis, which looks at whether data collected, are peak or flat with
relation to normal distribution (Marczyk, et al., 2005).

Descriptive Statistics
Skewness Kurtosis
 Expertise 0.491 -0.168
Trustworthiness 0.332 -0.299
Physical Attractiveness -0.701 0.253
Congruence Fit 0.634 -0.305
Usage Behavior -0.22 -0.477
The above table describes the level of skewness and kurtosis for the five constructs, which
constitute 26 variables. The general rule-of-thumb for test of normality varies depending on the
nature of the research. The common one mostly suggested mentioned in literature for both
kurtosis and skewness to be between -2 and +2 (George, 2010). As indicated in the table above,
skew and kurtosis measures for this study are well within that range between -1 and +1 values.
Therefore, the data for this study is normally distributed.

4.3. Survey Response Rate

The 384 questionnaires were administered in the month of august and customers were
intercepted at the main branches of the selected banks at convenience. However, a total of 360
questionnaires were collected, of which 34 were incomplete. Thus, 326 questionnaires were
found to be usable and ready for analysis.

General Demographic Respondents Profile

Respondents Age and Gender

Respondents Profile

Frequency Percent
18-30 134 41.1%
Age 31-40 181 55.5%
 41-50 10 3.1%
51 and above 0 0
Total 326 326
Gender Male 172 52.7
Female 154 47.3
Total 326 100
Occupation Student 128 39.3
Business owner 196 60.1
Other 2 2
Total 326 100

Out of the total 326 respondents, 134 of them fall in the age category of 18-30 comprising
41.1% followed by those in the age category of 31-40 with 186 respondents (55.5 %).
Respondents with the age group of 41-50 were very small constituting 10(3.1%). Since people
under the age category of 18-30 and 31-40 follow the media very closely, the increasing number
respondents from these age categories will have positive effect to the result of the study. On the
other hand, looking at the distribution of the respondents in terms of gender, male respondents
(52.7%) are higher than the female respondents (47.3%). However, it can be said that both male
and female respondents are fairly represented in the study.
Descriptive statistics of general information

Usage Behavior

To know the usage behavior of the respondents, five items were used anchored with bipolar
adjective of “Strongly Disagree/Strongly Agree”. The result of the survey reveals that
respondents have shown their intention to use the services of the celebrity endorsed bank.
Table Descriptive Statistics of consumer usage behavior
Customers’ Usage Behavior Mean Standard
Score Deviation

I use the service of the bank because I am well aware of the 3.4479 1.210
service endorsed by the celebrity.
I use the service of the bank because of the expertise of 3.7055 1.225
the celebrity.
 I use the service of the bank because of the trustworthiness 3.1963 1.14144
of the celebrity.
I use the service of the bank because of the Physical 3.9969 1.175
Attractiveness of the celebrity.
I use the service of the bank because of the Perceived 3.5092 1.11696

congruence (fit) between the celebrity and the brands of the

Celebrity.
I found the advertisement by the celebrity to be personally 2.9528 1.23405
relevant for me
I will use the service of the bank endorsed by the celebrity 3.1595 1.12552
Average 3.0307 1.175
Source: Survey Result (September,2020)

The mean score value of the overall level of customers’ usage behavior is 3.03 which falls just
above the cut of point 3.00. This means customers of the bank exhibit good usage behavior. The
standard variation of the overall level of customers’ usage behavior is 1.177 which is high
standard deviation, shows that the data is wide spread meaning customers gave variety of
opinion and low standard deviation means customers have close opinion.
Celebrity Attributes

The mean score value of the overall level of expertise is 3.06 which falls above just the cut of
point 3.00. This means customers of the bank exhibit high response on expertise of the celebrity.
The standard deviation of the overall level of customers’ usage behavior is 1.082 which is high
standard deviation, shows that the data is wide spread meaning customers gave variety of
opinion and low standard deviation means customers have close opinion
The mean score value of the overall level of Trustworthiness is 3.010 which falls above the cut
of point 3.00. This means customers of the bank exhibit high response on trustworthiness of the
celebrity. The standard variation of the overall level of customers’ usage behavior is 1.022 which
is low standard deviation, shows that the data is spread meaning customers gave variety of
opinion and low standard deviation means customers have close opinion.
The mean score value of the overall level of physical attractiveness is 3.65 which falls well
above the cut of point 3.00. This means customers of the bank exhibit high response on physical
attractiveness of the celebrity. The standard variation of the overall level of customers’ usage
behavior is 1.12 which is high standard deviation, shows that the data is wide spread meaning
customers gave variety of opinion and low standard deviation means customers have close
opinion.

The mean score value of the overall level of Congruence fit is 2.52 which falls below the cut of
point 3.00. This means customers of the bank exhibit neutral response on congruence fit of the
celebrity. The standard variation of the overall level of customers’ usage behavior is 1.21 which
is high standard deviation, shows that the data is wide spread meaning customers gave variety of
opinion and low standard deviation means customers have close opinion.

Descriptive Statistics of Celebrity Effectiveness

Measures of Celebrity Effectiveness Mean Score Standard Deviation

Expertise
Not an expert/Expert 3.18 1.07
Inexperienced/Inexperienced 2.4847 1.07
Un-knowledgeable/Knowledgeable 3.626 1.02
Unqualified/Qualified 2.334 1.15
Unskilled/Skilled 3.7975 1.10
Average 3.07 1.082
Trustworthiness
Undependable/Dependable 3.5951 1.163
Dishonest/Honest 2.18 0.98
Unreliable/Reliable 3.32 0.83
Insincere/Sincere 3.887 1.05
Untrustworthy/Trustworthiness 2.07 1.09
Average 3.010 1.022
Physical Attractiveness
Unattractive/Attractive 3.22 0.986
Not Classy/Classy 3.86 1.08
Ugly/Beautiful 2.28 1.11
plain/Elegant 3.60 1.14
Not Sexy/Sexy 2.66 1.305
 Average 3.65 1.12
Product/Congruence fit
Not compatible/Compatible 2.06 1.33
Bad fit/Good fit 3.05 1.121
Irrelevant/Relevant 3.13 1.119
Bad Match/Good Match 1.84 1.129
Average 2.52 1.21

THE RELATIONSHIP BETWEEN CI AND CBB

4.5 Correlation coefficient between independent and dependent variables

Componen Initial Extraction Sums of Squared
t Eigenvalues Loadings Rotation Sums of Squared Loadings
Tota
l % of Cumulative Total % of Cumulative Total % of Cumulative
Variance % Variance % Variance %
1 4.134 7.705 31.463 31.463 31.463 31.463 2.864 31.463 31.463

2 2.995 1.997 8.155 39.618 8.155 8.155 2.670 8.155 39.618

3 2.419 1.848 7.546 47.164 7.546 7.546 2.662 7.546 47.164

4 1.249 1.495 6.104 53.268 6.104 6.104 2.599 6.104 53.268

5 1.114 1.465 5.981

6 .867 1.178 4.809

7 .812 1.088 4.443

8 .748 .965 3.940

9 .704 .921 3.763

10 .670 .858 3.506

11 .566 .771 3.150

12 .544 .678 2.768

13 .487 .602 2.459

14 .462 .576 2.351

15 .395 .528 2.158

16 .323 .515 2.103

17 .219 .469 1.915

18 .149 .424 1.732

.405 1.654
19 .144
As can be seen from the table, the first component accounts for 31.468% of the total variance while the
second, third and fourth components accounts for 7.546%, 6.104% of the total variance, respectively.
That means, about 45.118% of the total variance in the data is attributable to these four factors and the
remaining fifteen factors together account 54.118% of the variance.
 Component
1 2 3 4

Undependable/Dependable .642 .251 .102

Dishonest/Honest .552 .171
Unreliable/Reliable .767 .148
Insincere/Sincere .826
Untrustworthy/Trustworthiness .796 .188 -.123
Not an expert/Expert .107 .698
Inexperienced/Inexperienced .107 .691
Un-knowledgeable/Knowledgeable .765
Unqualified/Qualified -.125 .175 .692
Unskilled/Skilled .285 .648
Unattractive/Attractive .706
Not Classy/Classy .727
Ugly/Beautiful .766
plain/Elegant .711
Not Sexy/Sexy .674
Not compatible/Compatible .293 .621 .142 .237
Bad fit/Good fit .229 .795
Irrelevant/Relevant .101 .821 .174
Bad Match/Good Match .195 .843 .162

The items Honest”, “Reliable”, “Trustworthy”, “Sincere”,and“Dependable”were highly loaded to

Component1 while the items “Knowledgeable”, “Experienced”, “Skilled”, “Expert”, and “Qualified”
were loaded to Component 4 . Similarly, the items “Beautiful”, “Elegant”, “Sexy”, “Attractive”, and
“Classy” were highly loaded to Component 3 and finally, items “Good fit”, “Relevant”, “Compatible”,
and “Good Match” loaded to Component 2.

Correlation Analysis
The Relationship between the Study Variables

The correlation matrix with the dependent and independent variables allows assessing the
strength of the association between the variables of interest i.e. it allows to test the hypotheses.
The level of association as measured by Pearson’s correlation coefficient (r) falls between -1.0
and +1.0, which indicates the strength and direction of association between the two variables.

If the correlation result of two variables lies between -1 and 0, the two variables are negatively
related, if the correlation result lies between 0 and 1, they are positively related, and if the
correlation is 0, this means that there is no relation between the two variables.When r=+1, it
implies that there is a perfect direct relationship between the variables, when r=-1, it implies that
there is a perfect negative/inverse relationship between the variables, when r is in between 0.10-
0.29, it implies that the variables have weak relationships, when the value of r is in between 0.3-
0.49, it implies that the variables have moderate relationship, and when the value of r becomes
greater or equal to 0.5, it indicates that the relationship is strong. Correlation is significant at the
level 0.01 (1-tailed). The correlation matrix for the overall sample is provided in the table below.

Expertise Trustworthine Physical Congruence Usage

Fit
ss Attractiveness Behaviour
Expertise Pearson 1
Correlation
Trustworthiness Pearson ** 1
.655
Correlation
Physical Pearson ** ** 1
.279 .211
Attractiveness Correlation
Congruence Fit Pearson ** ** .062 1
.367 .408
Correlation
Usage Behavior Pearson .422** .478** -.152** .696** 1
Correlation
The above correlation table displays the relationship between various constructs of the study.
The relationship of celebrities perceived congruence fit and customers’ usage behavior correlate
with each other. The association between the two variables is statistically significant and
positive since the r value of 0.696 is greater than 0.50. From this it can be said that increased
congruence fit would result in increased customers’ usage behavior.
The relationship of customers’ usage behavior and trustworthiness, expertise value is also shown
in the above correlation matrix to be moderate and positive. The r value is 0.478 and 0.422
respectively. From this it can be said that increased trustworthiness and expertise would result in
moderate increase on customers’ usage behavior

Multiple Regression Analysis

Multiple regression analysis was conducted with the aim of identifying the relationship of the
celebrity effectiveness measures with customers buying behavior of the endorsed bank to use the
services of the banks. The four components extracted through factor analysis were used as
independent variables expertise, trustworthiness, physical attractiveness and congruence fit
whereas customers’ usage behavior was used as dependent variable. The necessary conditions
required for the regression analysis along with the results of the analysis is discussed in this
section.

I. Requirements for Regression Analysis

The two most important conditions to be fulfilled before conducting regression analysis are the
adequacy of the sample size and non –existence of correlation among the independent variables.

The size of the sample has a direct effect on the statistical power of the significance testing in
multiple regressions, which refers to the probability of detecting statistically significant R-square
or a regression coefficient at a specified significance. it is also suggested the sample size (the
number of cases) to be at least 20 times more than the number of independent variables, as a rule
of thumb, in order to get the desired level of statistical power. Given this rule of thumb, the
number of cases used for this study (340 respondents) is well over the required criteria.

Results of the Regression Analysis

Regression analysis was conducted to examine the effect of the independent variables (physical
attractiveness, expertise, trustworthiness, and product/celebrity match) on the dependent
"customers’ usage behavior".
Effect of Celebrity Endorsement on Usage Behavior

For the regression equation involving customers’ usage behavior, the R-square value of the model is
given by 0.602 and the adjusted R square is 0.597. As (Saunders, et al., 2009) sates The coefficient
of multiple determination (R2) indicates the degree of the goodness of fit for your estimated multiple
regression equation. It can be interpreted as how good a predictor your multiple regression equation
is likely to be. (McDaniel. & Gates, 2013) states, the adjusted R2 statistic (which takes into account
the number of independent variables in your regression equation) is preferred by some researchers as
it helps avoid overestimating the impact of adding an independent variable on the amount of
variability explained by the estimated regression equation.

The R2 and adjusted R2 values of 0.602 and 0.597 respectively both indicated that there was a
goodness of fit of the regression model. It also means that over 60 per cent of variance in the
dependent variable (customers’ usage behavior) can be explained by the regression model.
Model Summary and Associated ANOVA

Table --------ANoVA
Sum of Mean
Model Squares df Square F Sig.
b
1 Regression 136.362 4 34.090 126.792 .000
Residual 90.071 335 .269
Total 226.433 339
a. Dependent Variable: Usage Behavior Y
b. Predictors: (Constant), Congruence_Fit_X4, Physical Attractiveness,
Expertise_X1, Trustworthiness_X2

Model Summary
Std. Error Change Statistics
Adjusted of the R Square Sig. F
Model R R Square R Square Estimate Change F Change df1 df2 Change
a
1 .776 .602 .597 .51853 .602 126.792 4 335 .000
In multiple regressions, the t-test is used to find out the probability of the relationship between
each of the individual independent variables and the dependent variable occurring by chance. In
contrast, the F-test is used to find out the overall probability of the relationship between the
dependent variable and all the independent variables occurring by chance . The Analysis of
Variance (ANOVA) indicates that the F value of 126.79 with significance level of 0.000 and
since the observed significant is less than 0.05.

Table 4.10 presents the coefficients of the regression equation, which shows that all the
independent variables (physical attractiveness, expertise, trustworthiness, and product/celebrity
match) have positive relationship with the dependent variable (customers’ usage behavior).

Model Unstandardized Standardize t Sig 95.0% Collinearity

d . Confidence
Interval
Coefficients Coefficients for B Statistics
B Std. Beta Lower Upper Toleranc VI
Error Bound Bound F
e
(Constant) 1.07 .166 6.478 .000 .747 1.398
2
Expertise_X1 .176 .052 .158 3.359 .001 .073 .279 . 1.860
538
1 Trustworthiness_X2 .226 .053 .199 4.231 .001 .121 .331 . 1.860
538
Physical -.330 .043 -.274 -7.608 .001 -.415 -.244 . 1.090
Attractiveness X3 918
Congruence_Fit_X .594 .040 .573 15.01 .001 .516 .671 . 1.229
4 2 814

The predicted equation for customers’ usage behavior is given as;

Y= 0.176X1 + 0.226X2 - 0.330X3 + 0.594X4 +1.072

From the above regression equation, it can be inferred that, as the expertise of the celebrity
increases by one unit, customers’ usage behavior will increase by 0.176 units. From the result it
can be said that there is a positive relationship between expertise & consumers’ usage behavior.
An increase in the Trustworthiness by one unit would result in an increase in customers’ usage
behavior by 0.226 unit of value. From the result it can be said that there is a positive relationship
between trustworthiness & consumers’ usage behavior. As the physical attractiveness of the
celebrity increases by one unit, customers’ usage behavior will decrease by -0.330 units. From
the result it can be said that there is a negative relationship between physical attractiveness &
consumers’ usage behavior.Cognitive models appear to be more relevant where the individual
perceives there to be a high risk associated with the product (these are sometimes referred to as
high involvement products). This risk may take the form of one this is a financial commitment,
e.g. car, house, pension plan, etc.;

.
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