research methodology on effect of celebrity endorsements

Celebrity Endorsement &

Its Effect on Consumers

What is Celebrity Endorsements

• A form of brand or advertising campaign that

involves a well known person using their fame to

help promote a product or service.

• Social media such as Twitter have become

increasingly popular mediums for celebrities to

endorse brands and influence purchasing behaviour.

NEED FOR CELEBRITY ENDORSEMENT

• It increases the sale

• Attract more attention of

consumers

• Celebrity add new

dimension to the brand

The Benefits of Celebrity

Endorsements

• Build brand equity

• Help people remember ads

• Make people believe the product

contributes to superstar status

• Stand out

The Risks of Celebrity

Endorsement

• Images change

• Celebrities become overexposed

• Celebrities can overshadow brands

Why are advertisers ready to pay crores for

endorsements?

The reason is “Install Recall” which ensures

immediate focus to the brand.

Why do brands, during losses, sign celebrities to

endorse?

Companies use celebrities to come out of losses,

basically when a brand needs to lift itself to come

out of losses.

Objectives of the research

• To understand how does celebrity endorsements

have an impact on customers buying habits

• To understand what makes the company or ad

agency select a particular celebrity for their product

• To understand what makes a celebrity take a

particular brand for endorsing

Methodology Part 1

Primary Survey

The primary survey was carried out in three different

sections:

• Consumers

• Celebrity

• Advertisement agencies - Ogilvy & Mather

Lowe Lintas

FCB ULKA

ConsumersQUESTIONNAIRE

1. Gender•Male•Female

2. What is your age?•Below 20 years•Between 20 to 49 years•Above 50 years

3. Which of the following influences you to buy a product?•Celebrity endorsement•Price •Quality

4. Rate the media that affects your buying power for the product-

Very Effective

1

Effective

2

Neutral

3

Average

4

Ineffective

5

TV and/or Radio

Print media

On the shelf

Word of mouth

5. Rate the impact of the celebrity endorsing the product-Strong Impact Weak Impact

1 2 3 4 5

6. Would you stop buying the product if your favourite celebrity stops endorsing it?+2 - Definitely+1

0 - Maybe-1-2 - Never

7. Did it affect your buying decision for the SAME PRODUCT, when -Celebrity WASN’T Endorsing Celebrity STARTED Endorsing 3 2 1 0 1 2

8. Rate if negative publicity about your preferred celebrity influences your purchasing decision-+2 - Doesn’t influence at all+1

0 - Neutral-1-2 - Influences heavily

9. Do you believe that the celebrities also use the products which they endorse?•Yes•Not Sure•No

10. How does your preferred celebrity and a specific brand they endorse affect the buying decision of the product

Strongly Agree

1

Agree

2

Neutral

3

Disagree

4

Strongly Disagree

5

He/She has a positive impact on the

product

He/She can relate to consumers

He/She suits the brand image

He/She has knowledge about the

product and brand

Ad Company

QuestionnaireQ1. What is the primary reason to choose a particular celebrity/model for endorsing a product?

0

0.5

1

1.5

2

2.5

3

Requirement of the script

Budget Brand Popularity Any Other

2

0

3

0

Attributes

Q2. How do you judge if the celebrity is worth the money?

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Popularity Acting Skills Connection with the target audience

Any Other

1 1 1

0

Celebrity Worth

Q3. What market research tool does your company use before framing an Advertisement?

0

0.5

1

1.5

2

2.5

3

Qualitative Technique

Questionnaire + CG Method

Account Planning

Any Other

Market Research Tool

Q4. Do you think the celebrity/model influences the consumers’ purchasing decision?

0

0.5

1

1.5

2

2.5

3

Yes Partially, to some extent

No

Celebrity Influence

Q5. Do you feel that selecting high-profile celebrities creates more impact than general advertisement models?

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

Yes Partially, to some extent

No

Impact of High Profile Celeb over Regular Model

Celebrity

• Sunil Vishrani a.k.a. Chattri Man of TIDE Washing Powder

Advertisement.

• He was interviewed on aspects like how

does an advertisement affect the

celebrity/model (himself), on what basis

does the company select the

celebrity/model for an advertisement

and many more.

Methodology Part 2

Research Analysis through

SPSS

Which of the following

influences you to buy a

product-

Quality

Celebrity endorsement

Price

PURCHASE INFLUENCE

Rate the media that affects

your buying power for the

product75

3

31

1722 24

33

23

3

29

1521

0

20

12

22

0

24

9

17

0

10

20

30

40

50

60

70

80

TV and/or Radio Print Media On the Shelf Word of Mouth

Media Channels

Very Effective Effective Neutral Average Ineffective

One Sample T-Test

One-Sample Statistics

N Mean Std. Deviation Std. Error Mean

Celebrity_Impact 100 2.1100 1.03372 .10337

One-Sample Test

Test Value = 2t df Sig. (2-

tailed)Mean

Difference95% Confidence Interval of the

Difference

Lower Upper

Celebrity_Impact 1.064 99 .290 .11000 -.0951 .3151

Ho= The mean rating given for the celebrity impact on the product is

2 (i.e. Good Impact)

Ha= The mean rating given for the celebrity impact is not equal to 2.

At 5% level of significance, the α value is 0.05 & the significant value is 0.290. Since the

significant value is higher than the α value, we accept our null hypothesis & conclude that the

mean rating given for the celebrity impact on the product is 2, i.e. the celebrity has a good

impact on the product.

Paired Sample T-Test

Paired Samples Test

Paired Differences t df Sig. (2-tailed)

Mean Std. Deviation

Std. Error Mean

95% Confidence Interval of the

Difference

Lower Upper

Pair 1 Before_Endorsing - After_Endorsing .6400 1.03005 .10301 -.84438 -.43562 -6.213 99 .000

Ho= There is no significant difference between the buying decision of the customer

before & after the celebrity endorsed the product.

Ha= There is a significant difference between the buying decision of the customer

before & after the celebrity endorsed the product

At 5% level of significance, the α value is 0.05 & the significant value is 0.000. Since, the

significant value is less than the α value, we reject our null hypothesis & conclude that there is a

significant difference between the purchase intention of the customer before & after the

celebrity endorsed the product

Descriptive Statistics

Mean Std. Deviation NLoyalty 1.0200 .99473 100

Negative_Publicity 1.1200 .89081 100

Correlations

Loyalty Negative_Publicity

Loyalty

Pearson Correlation 1 .225*

Sig. (2-tailed) .024

N 100 100

Negative_Publicity

Pearson Correlation .225* 1

Sig. (2-tailed) .024

N 100 100

*Correlation is significant at the 0.05 level (2-tailed).

There is a weak correlation between loyalty of the customer & negative publicity of the celebrity which means that the loyalty of the customer towards the product is not affected by the negative publicity of the celebrity.

Correlation

Conclusion• Primary Reason by Ad company to chose a celebrity is Requirement of the

script & Brand Popularity (relatable to the public)

• Celebrity is worth the money is decided by their Popularity (Mass appeal) and Connection with the target audience

• Television/ Radio Ad and On-the-shelf are the most effective mode of influencing for purchasing a product

• Customers find strong impact of the celebrity for the product they endorse

• Change in purchase intention of customers before & after the celebrity endorsed the particular product

• Loyalty of the customer towards the product is not affected by the negative publicity of the celebrity.

BIBLIOGRAPHY

• www.google.co.in

• www.ogilvy.com

• www.lowelintas.com

• www.fcbulka.com

• www.Wikipedia.com

PRESENTED BY:

• Abhishek Shinde

• Abhishek Bhatt

• Divya Gandhi

• Karen D’souza

• Ketaki Misra

• Kirk Coutinho