measuring trust in advertisement through celebrity endorsement

8/14/2019 Measuring trust in advertisement through Celebrity endorsement

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Marketing Management II

A

Project Report On

Measuring trust inadvertisements throughcelebrity endorsements

MBA II Semester

ICFAI Business School, Hyderabad Page 1


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CONTENTS

1. Executive Summary 3

2. Literature Review 4

3. Hypothesis formulation 6

4. Research Methodology & model testing

4.1) Research Methodology 6

4.2) Model 6

4.3) Sampling method 6

4.4) Sources of data 74.5) Rationale behind selection of variables 7

4.6) Pre-testing of questionnaire 9

4.7) Reliability check of the questionnaire 10

5. Data Analysis

5.1) Regression Results 11

5.2) Correlation matrix 13

5.3) Descriptive Statistics 14

5.4) Factor Analysis used

5.4.1) Kaiser & Bartletts test 16

5.4.2) Communalities 16

5.4.3) Total Variance Explained 17

5.4.4) Scree Plot 19

5.4.5) Component matrix 20

5.4.6) Rotated Component matrix 21

5.4.7) Correlated common factors 21

6. Conclusion 22

7. Questionnaire 23



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1.E xecutive summary

Advertisements have become an important point of focus among the

companies as well as customers. Companies use advertisement as a means

of communication to influence customers to purchase a product, to createbrand awareness, for positioning their products and also to create a point of

differentiation. With the help of advertisements companies can bring forth

the unique selling propositions (USPs) of their product which influences the

purchasing decision of the customers. Apart from all these an important

purpose of advertisement is to earn the trust of the customers.

Advertisements can be done through print media or by using electronic

media. In the year 2007, an amount of $385 million was spent worldwide in

advertisements. Companies use creativity, tag lines and also use celebrities

for endorsing their products just to earn the trust of customers. Celebrityendorsement is yet another promotional strategy that companies use to

attract customers and also they use the referent power of the celebrities to

build up trust about the product. But the main question lies that whether the

spending of such huge amounts on advertisements is able to win the trust of

the customers. This is a wide field to study upon, so we have generalized the

study of measuring trust in advertisement by taking a specific area in

advertisements done through celebrity endorsements. In our project we will

study that whether advertisement which uses celebrities are able to earn the

trust of the consumers.



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2.Literature Review

The multidimensional nature of trust in advertising include beliefs and

feelings about objects, willingness to use knowledge as the basis for action

.This was researched by a number of scholars like McAllister in

1995,Moorman, Desphand, and Zaltman in 1993. Significant literature

indicates that for the existence of trust it is essential for the affective

processes and the behavioral intention of trust, along with cognitive beliefs

to be present as studied by Johnson and Grayson 2005.

A lot of considerate discussions of credibility or attitude toward advertising in

the advertising literature has been done. Credibility has been conceptualized

and measured in three forms: source credibility (i.e., trustworthiness,

expertise, and attractiveness of endorsers and advertisers) (done by Lafferty

and Goldsmith 1999; Ohanian 1990); ad content credibility (i.e.,

perceptions that ad claims are truthful and believable) (done by Beltramini

and Evans 1985; OCass 2002); and advertising credibility. Advertising

credibility (ACRED) has been conceived and studied as the perception of the

truthfulness and believability of advertising. According to Lutz, advertising

trustworthiness is created by a subsystem of three constructs (i.e., ad claim

discrepancy, advertiser, and advertising credibility) and is an predecessor ofattitude toward the advertisement.

The multistage research model adopted after Churchill (1979) and

Gerbing and Anderson (1988) showed the perspective of the rational



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model of advertising, specifically emphasizing on the relationships between

trust in advertising and, advertising credibility (ACRED) and also attitude

toward advertising in general (AG), taking the assumption that developmentof an ad-trust measure is important for both operational and practical

reasons. Most researchers agree that trust results from trustworthiness(e.g.,

McAllister 1995; Moorman, Deshpand, and Zaltman 1993) and the strength

and security of a trusting relationship (e.g., Rempel, Holmes, and Zanna

1985).Nowadays company are building this trusting relationship with the

help of celebrity endorsement. Various ways have been put into practice to

measure the advertising credibility; these include non diagnostic single item,

multiple item scale or subscales to measure advertising in general. In the

year 1998 Obermiller and Spangenbert introduced advertising skepticismwhich is the tendency towards disbelief in ad claims. Some literatures are of

the view that trustworthiness is one of two basic underlying components of

credibility while there are others to support the view that there are various

factors affecting trust, like confidence, competence benevolence, and

reliability. However most of behavioral and social science research indicates

that trust is more than just credibility.

Friedman and Friedman in 1979 observed that the product which contains

high social risk and\or psychological risk, using celebrity endorser brings in

greater trustworthiness along with a positive purchase intention among thecustomers. It was found from the studies done by IPAN-IPMR pan-

India ,86% of the respondents recalled the most prominent ad as having a

celebrity in it, but only 3% felt that the celebrity endorser affected their

buying decision.This shows how much people trust the advertisements which

is done through celebrity endorsements.

According to Tripp et.al(1994), when a celebrity endorses one or two

products, customers find the advertisement as well as the product more

trustworthy than if the celebrity endorses more than two products as theyare not able to relate to the image and credibility of the product. According

to Miciak and Shankalin(1994)companies consider the credibility as the

primary reason for selecting a spokesperson and the most important of the

credibility is the trustworthiness. Schudson in 1984, adopted the rational



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model perspective. The basic idea of this model is that it believes that the

primary function is to inform the consumers about a product and to help

them weigh one consumption choice against the other premise but for this tobe effective it is important that customers should have trust on the ads so

that it helps in their decision making.

A lot of researches and studies have been done in this field.We will research

on a specific area that whether the advertisements done through celebrity

endorsement is able to build up trust or people see it as a mere promotional

stratergy of the companies.That is our study will cater to whether people

trust advertisements using iconic personalities to promote their products or

not.

3.Hypothesis formulation

Hypothesis:Trust in a brand is dependent on variables such as(qualityassurance,celebrity likability,brand loyalty, celebrity competence,

reliability,confidence in celebrity, willingness to rely, credibility, brand-switching, repurchase frequency)

4.Research Methodology & Model Testing:

4.1 Research Methodology: Based on the literature Reviews, we willfind dependence of the variables listed in our model equation on consumer

brand preference and find how significant are the variables on the dependent

variable by running a regression between the dependent and independentvariables.

4.2 Model: Y (Brand Trust) = f (quality assurance,celebritylikability,brand loyalty, celebrity competence, reliability,confidence in



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celebrity, willingness to rely, credibility, brand-switching, repurchase

frequency).

4.3 Sampling Method:

We have done Convenient Sampling for our sample size of 153 respondents.

In convenience sampling, the selection of units from the population is based

on easy availability and/or accessibility. Convenience Sampling uses those

who are willing to volunteer.We did not have any information regarding the

normal distribution of the population targeted, making it impossible for us to

calculate the sample size statistically. Therefore we assumed the basic

thumb rule, which says that

SIZE OF SAMPLE= (NO OF VARIABLES)*10

This sampling technique is used because of time and cost constraint in

accessing a wider population.

For this we collected responses from our friends in the college, faculty and

outstation friends from other colleges and working in various organizations

through the net.

4.4 Sources of data:

A questionnaire (Appendix A) was prepared consisting of questions dealing

with variables like quality, celebrity likability, brand loyalty and other

important variables related to the Brand Trust of consumers while buying a

product. The questionnaire consisted of 11 questions covering 10 variables

that we wanted to check. Along with manual paper based survey, an online

survey was also conducted to collect the data. The questionnaire was sent to

the people and their responses were collected and saved

It was a primary data collection exercise done through questionnaire filling

based on a likert scale of 1 to 5.

4.5 Rationale behind selection of variables:



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Trust According to Kelman 1961 and Ohanian 1990 trustworthiness isone of the two basic underlying components of credibility of advertisement.

Trust is considered to be synonymous to accuracy or integrity in advertising.Existing conceptualizations enables one to study the various aspects of

studying trust in advertising.

Reliability according to Doney and Cannon1997 and McAllister 1995reliability is one of the several factors which reflect the credibility of an

advertisement. It is also included among the factors of trust that have been

most frequently identified by scholars. This is an important factor which will

tell how much the advertisement will be trusted so that there is high

probability of product repurchase.

Brand Loyalty- According to Bloemer and Kasper, brand loyalty implies adeep commitment a customer has towards the product due to the loyalty

created by the advertisements . They supported this point by rendering a

clear distinction between repeat purchases and actual brand loyalty. In their

research they published that a repeat purchase behaviour is the actual

rebuying of a brand.Brand loyalty will lead to increase of sales hence is a

parameter to measure trust in advertisements.

Brand Switching According to Sandage and Leckenbey in 1980,usefulness is similar to attitude toward advertising as institution and affect is

close to global attitude toward advertising in

general leading to more trust thus increasing the usefulness of

advertisement. This further leads to curbing brand switching as the customer

develops the trust in the product through the advertisement.

Competence- According to Butler and Cantrell 1984, competence is

parallel to usefulness, a major trust factor in the research of trust. It is oneof the seven factors that is considered for trust definition according to Lewis

and Weigert 1985.Competence of celebrity, i.e. his/her knowledge,

expertise, personality will either attract consumers and make them develop



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trust on the product or will not develop likings for the product as the

consumer might not have any likings for the celebrity.

Hence this is an important parameter for measuring trust in advertisementswhich are done through celebrity.

Brand loyality & Repurchase Intention:

According to this study (Youjae Yi *, Suna La Seoul National University)

loyalty influences the relationship between customer satisfaction (CS) and

repurchase intention (RPI). The study introduces adjusted expectations,

which are expectations updated after consumption experience. . The results

show that adjusted expectations can mediate the effect of CS on RPI. The

results also indicate that processes underlying the CS-RPI link are different

between low-loyalty and high-loyalty customers route, which reflects the

indirect path from CS to RPI via adjusted expectations, has a greater impact

for nonloyals than for loyals. CS is found to have no direct influence on RPI

for low-loyalty customers.

Confidence- The relationships among brand familiarity, confidence inbrand evaluations, brand attitudes, and purchase intention affect buying

decision. According to this research paper(Michel Laroche Chankon Kim), the

empirical results show that familiarity with a brand influences a consumer's

confidence toward the brand, which in turn affects his/her intention to buy

the same brand. In addition, a consumer's attitude toward a specific brand

depends on familiarity with the brand.

Celebrity Credibility-

Consumers usually perceive celebrities as a credible source of information

about the product or firm they endorse.(Goldsmith 2000). One can explain

source credibility as endorser positive characteristics that affect the

receivers acceptance of a message .The messages effectiveness depends on



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the perceived level of expertise & trustworthiness associated within endorser

(Erdogan 1999) .Expertise & trustworthiness when considered together are

presumed to be constituents of source credibility

Celebrity likeablity-Likeability/attractiveness is an important indicator of effectiveness as per the

celebrity endorsement literature. However attractiveness is multi-

dimensional in nature. It consists of many characteristics such as physical

attractiveness, personality & athletic ability. According to some authors

physical attractiveness of celebrities is a predictor of advertising

effectiveness (Till & Busler 2000). Attractive celebrities are usually perceived

more favourably on various personality traits compared to the less attractive

counterparts (Kahle & Homer 1985; Eagly 1991). According to Joseph

(1982) attractive endorsers have a more positive effect on the products they

endorse compared to the less attractive endorsers.

4.6 Pre- testing of Questionnaire:

It refers to testing the questionnaire on a small sample of respondents

selected on a convenient basis that is not divergent from the actual

respondents. We tested the initial questionnaire on a small sample size of 40respondents (REASON - Newer editions of several textbooks cited by

Prescott and Soeken (1989) offer limited guidance with respect to sample

size for pilot studies. Burns and Grove (2005) and Polit and Beck (2004)

make no specific recommendations. Others recommend obtaining

approximately 10 participants (Nieswiadomy, 2002) or 10% of the final

study size (Lackey & Wingate, 1998), the final decision to be guided by cost

and time constraints as well as by size and variability of the population)and

there were some flaws and problems that were identified.

The team distributed the questionnaire and stayed in the vicinity while it was

being filled out. The pilot test group was asked to tell any member of the

research team if they encountered any problem while filling out the

questionnaire or had any suggestions of improving it. After each student



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completed the questionnaire it was given back to a member of the research

team. Since these questionnaires were handed-out to test the validity of the

survey the results were not coded or inputted for analysis. These resultswere used to ensure to the research team that the questionnaire was in

proper order to conduct our primary testing.

The major flaws that we came up after doing pilot testing, were the

sequencing of questions and phrasing of the questions so that the

respondents could understand what responses to give.Subsequently the

flaws were rectified by changing the wordings of some of the questions to

which few respondents reported having problem in interpreting the question

and we boiled down to the final questionnaire which was used for the data

collection.

4.7 Check for the Reliability of the questionnaire:

The questionnaire was checked for its reliability by doing pilot testing using

40 respondents. Reliability testing was done by using Cronbachs Coefficient

Alpha. This checks for inter variable consistency. The widely-accepted social

science cut-off is that alpha should be .70 or higher for a set of items to be

considered a scale. (G. David Garson).

Cronbachs alpha calculated using SPSS showed a value 0.746.

Reliability Statistics

.746 11

Cronbach's

Alpha N of I tems

Since the obtained value is greater than 0.7 hence the questionnaire

prepared is valid.



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5.Data Analysis:

From the responses collected by the questionnaire, we first ran a

regression between the dependent variable BRAND TRUSTand independent

variables quality assurance,celebrity likability,brand loyalty, celebrity

competence, reliability,confidence in celebrity, willingness to rely, credibility,

brand-switching, repurchase frequency.

5.1 Regression Results:

The regression results showed that the significance value 0.007 of the F

statistics is smaller (smaller than 0.05) so the independent variables do

explain the variation in the dependent variables.

ANOVAb

28.207 10 2.821 2.549 .007a

158.234 143 1.107

186.442 153

Regression

Residual

Total

Model1

Sum of

Squares df Mean Square F Sig.

Predictors: (Constant), REPURCHASE_FREQUENCY, BRAND_LOYALTY,

RELIABILITY, COMPETENCE, BRAND_SWITCHING, CREDIBILITY, QUALITY_

ASSURANCE, CONFIDENCE, WILLINGNESS_TO_RELY, CELEBRITY_

LIKEABILITY

a.

Dependent Variable: TRUSTb.

Model Summary

.389a .151 .092 1.05192 .151 2.549 10 143 .007

Model

1

R R SquareAdjustedR Square

Std. Error ofthe Estimate

R SquareChange F Change df1 df2 Sig. F Change

Change Statist ics

Predictors: (Constant), REPURCHASE_FREQUENCY, BRAND_LOYALTY, RELIABILITY, COMPETENCE, BRAND_

SWITCHING, CREDIBILITY, QUALITY_ASSURANCE, CONFIDENCE, WILLINGNESS_TO_RELY, CELEBRITY_LIK

a.



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Ours is a Cross-sectional Data since the responses gathered from the

individuals are independent of time i.e. they do not change with time .Theadjusted R square which explains the linearity between the dependent and

independent variables was found to be 0.092.

Then the variation inflation factor (VIF) was checked for all the

variables.

C o e f f i c i e n t sa

2 .0 2 0 .4 4 6 4 .5 2 6 .0 0 0 1 .1 38 2 .9 0 2

.0 7 4 .0 9 3 .0 7 1 .7 9 4 .4 2 9 -. 1 1 0 .2 5 8 .7 4 9 1 .3 36

.0 6 1 .1 0 1 .0 6 2 .6 1 0 .5 4 3 -. 1 3 8 .2 6 1 .5 8 1 1 .7 22

.0 7 9 .0 8 0 .0 7 8 .9 8 1 .3 2 8 -. 0 8 0 .2 3 8 .9 3 8 1 .0 66

-. 1 1 0 .0 8 1 -. 1 1 8 -1 .3 5 4 .1 7 8 -. 2 7 1 .0 5 1 .7 8 1 1 .2 80

.0 5 5 .0 9 0 .0 5 6 .6 1 1 .5 4 2 -. 1 2 4 .2 3 4 .7 0 9 1 .4 11

.1 9 8 .0 9 0 .2 0 6 2 .2 0 1 .0 2 9 . 02 0 .3 7 5 .6 7 6 1 .4 80

.0 9 9 .0 9 9 .0 9 8 .9 9 6 .3 2 1 -. 0 9 7 .2 9 5 .6 1 4 1 .6 30

.0 9 4 .0 8 0 .1 0 8 1 .1 8 3 .2 3 9 -. 0 6 3 .2 5 1 .7 1 6 1 .3 97

-. 1 4 8 .0 9 2 -. 1 5 2 -1 .6 0 6 .1 1 0 -. 3 2 9 .0 3 4 .6 6 1 1 .5 14

.0 9 9 .0 9 4 .1 0 3 1 .0 5 1 .2 9 5 -. 0 8 7 .2 8 5 .6 1 5 1 .6 27

(Cons tan t )

Q UA L IT Y _A S S U RA N C E

CE LE B RI T Y _L IK E A B ILIT Y

B RA ND _L O Y A LT Y

C O M P E T E N C E

RE LI A B ILI T Y

CO NF ID E N CE

W ILLIN G NE S S _TO _RE LY

CR E DIB IL ITY

B RA ND _S W IT CH IN G

RE P UR C H A S E _

F R E Q UE N CY

M ode l

1

B S t d. E rro r

U n s t a n d a r d i z e d

Coe f f i c ien t s

B eta

S tanda rd iz ed

C o e f f i c i e n t s

t S ig . L o w er B o u n dUpp e r B ound

95% Con f idenc e I n te rv a l f o r B

T o leranc e V IF

Co l l inear i ty S ta t is t i

D epend en t V a r iab le : TR U S Ta .

All the VIF values for all the variables were found to be less than 5.Since VIF

< 5 so according to this result there was no problem of muticollinearity with

the independent variables and hence multivariable regression can be used.



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5.2 Correlation Matrix

Now the correlation matrix was checked and it showed that the variables

are significant.From the correlation matrix, we can infer that there is certain

amount of correlation between few variables (ex. Celebrity likability and

brand switching). The aim of the factor analysis is to club these variables

which are correlated into a group of factors.



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C o r r e l a t i o n M a t r i x

1 .0 0 0 . 3 2 0 . 1 5 1 . 0 4 5 .2 1 5 .2 0 4 .2 4 7 - .0 2 0 . 3 2 3 . 3 9 2

.3 2 0 1 .0 0 0 . 0 2 3 . 1 4 6 .3 6 6 .3 8 6 .3 5 3 .2 7 4 . 4 7 6 . 4 6 8

.1 5 1 . 0 2 3 1 .0 0 0 -.0 1 8 .0 5 1 - .1 1 1 .0 6 1 - .1 1 7 . 0 8 2 . 0 1 9

.0 4 5 . 1 4 6 - .0 1 8 1 .0 0 0 .1 2 6 .2 1 8 .2 5 9 .4 2 5 . 1 1 1 . 2 1 9

.2 1 5 . 3 6 6 . 0 5 1 . 1 2 6 1 .0 0 0 . 2 5 8 .4 6 5 .0 5 0 . 3 5 3 . 1 7 3

.2 0 4 . 3 8 6 - .1 1 1 . 2 1 8 .2 5 8 1 . 0 0 0 .3 9 7 .2 9 1 . 3 0 2 . 4 4 3

.2 4 7 . 3 5 3 . 0 6 1 . 2 5 9 .4 6 5 .3 9 7 1 . 0 0 0 .2 2 5 . 4 2 7 . 3 3 9

- .0 2 0 . 2 7 4 - .1 1 7 . 4 2 5 .0 5 0 .2 9 1 .2 2 5 1 .0 0 0 . 1 3 3 . 2 5 7

.3 2 3 . 4 7 6 . 0 8 2 . 1 1 1 .3 5 3 .3 0 2 .4 2 7 .1 3 3 1 . 00 0 . 2 4 7

.3 9 2 . 4 6 8 . 0 1 9 . 2 1 9 .1 7 3 .4 4 3 .3 3 9 .2 5 7 . 2 4 7 1 . 00 0

. 0 0 0 . 0 3 1 . 2 9 2 .0 0 4 .0 0 6 .0 0 1 .4 0 2 . 0 0 0 . 0 0 0

.0 0 0 . 3 8 8 . 0 3 6 .0 0 0 .0 0 0 .0 0 0 .0 0 0 . 0 0 0 . 0 0 0

.0 3 1 . 3 8 8 . 4 1 0 .2 6 4 .0 8 6 .2 2 8 .0 7 4 . 1 5 5 . 4 0 6

.2 9 2 . 0 3 6 . 4 1 0 .0 6 0 .0 0 3 .0 0 1 .0 0 0 . 0 8 6 . 0 0 3

.0 0 4 . 0 0 0 . 2 6 4 . 0 6 0 .0 0 1 .0 0 0 .2 6 9 . 0 0 0 . 0 1 6

.0 0 6 . 0 0 0 . 0 8 6 . 0 0 3 .0 0 1 .0 0 0 .0 0 0 . 0 0 0 . 0 0 0

.0 0 1 . 0 0 0 . 2 2 8 . 0 0 1 .0 0 0 .0 0 0 .0 0 3 . 0 0 0 . 0 0 0

.4 0 2 . 0 0 0 . 0 7 4 . 0 0 0 .2 6 9 .0 0 0 .0 0 3 . 0 5 0 . 0 0 1

.0 0 0 . 0 0 0 . 1 5 5 . 0 8 6 .0 0 0 .0 0 0 .0 0 0 .0 5 0 . 0 0 1

.0 0 0 . 0 0 0 . 4 0 6 . 0 0 3 .0 1 6 .0 0 0 .0 0 0 .0 0 1 . 0 0 1

Q U A LIT Y _A S S U RA N C E


B R A N D_ LO Y A LT Y

CO M P E T E N CE

RE L IA B IL I TY

CO N F ID E N CE

W IL LI N G N E S S _T O _R E LY

CR E D IB ILI T Y

B R A N D_ S W IT CHI N G

RE P U R C H A S E _

FR E Q UE N CY

Q U A LIT Y _A S S U RA N C E


B R A N D_ LO Y A LT Y

CO M P E T E N CERE L IA B IL I TY

CO N F ID E N CE

W IL LI N G N E S S _T O _R E LY

CR E D IB ILI T Y

B R A N D_ S W IT CHI N G

RE P U R C H A S E _

FR E Q UE N CY

C orre la t ion

S ig . (1 - ta i led)

Q UA LI T Y _

A S S UR A NC E

CE LE B RITY _

L IK E A B IL I TY

B RA ND _

LO Y A LT Y

CO M P E T

E NC E R E LI A B ILIT Y

C O N FID E

N C E

W ILL IN G NE S

S _T O _R E LYC RE DIB IL IT Y

B RA ND _

S W IT C H IN G

RE P U RC HA

E _

FR E Q UE NC

5.3 Descriptives Statistics:



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The Descriptive Statistics obtained show that as for example the mean of

credibility of endorser is more than 3 we can say that more people go for

credibility of the endorser rather than giving much preference to qualityassuarance.It implies that if the mean value is less than 3, i.e. more the

observed value away from the neutral position of 3 more the weightage

assigned by the buyer to that variable while buying the product.

Descriptive Statistics

2.7208 1.05717 154

2.6364 1.10742 154

3.2727 1.09229 154

2.8961 1.18360 154

2.3442 1.11660 154

2.7208 1.15185 154

2.8312 1.09548 154

3.1364 1.26320 154

2.1753 1.13836 154

2.7922 1.15286 154

QUALITY_ASSURANCE

CELEBRITY_LIKEABILITY

BRAND_LOYALTY

COMPETENCE

RELIABILITY

CONFIDENCE

WILLINGNESS_TO_RELY

CREDIBILITY

BRAND_SWITCHING

REPURCHASE_

FREQUENCY

Mean Std. Deviation Analysis N



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5.4 Factor Analysis used

Now after verifying the appropriateness of the use of Factor Analysis, we

proceed to the detailed analysis of the data using Factor Analysis in our final

testing for the initial 153 respondents.

Statistics used under Factor Analysis

Method of Factor Analysis:Principal component analysis

Details of Descriptive:

Initial Solution

Coefficients

KMO & Bartletts test of sphericity

Details of Extraction:

Correlation matrix

Eigen values >1

Scree Plot

Details of Rotation:

Varimax and Rotated Solution

Details of Option:

Exclude case list wise



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5.4.1 Kaiser-Meyer-Olkin (KMO) and Bartlett's Test

Again, to justify the use of Factor Analysis in this situation we go for Kaiser-

Meyer-Olkin (K.M.O.) & Bartletts test of sphericity.

KMO and Bartlett's Test

.777

326.664

45

.000

Kaiser-Meyer-Olkin Measure of Sampling

Adequacy.

Approx. Chi-Square

df

Sig.

Bartlett's Test of

Sphericity

Bartletts test of sphericity tests whether the correlation matrix is an identity

matrix or not and since the significance value in our case is less than 0.05 so

it is not an identity matrix and we can use factor analysis.

Kaiser-Meyer-Olkin (K.M.O.) which tests whether the intraset correlations

are high, and since its value is greater than 0.6 so the sample is adequate

and factor analysis is justified.

5.4.2 Communalities

It is the explained variance of an item or the variance that the items &

factors share in common. With higher values indicating that the extracted

factors explain more of the variance of an individual item. In the Initial

column a value of 1.00 indicates the standardized variances. Values in theextraction column explain the percentage of variance explained in the

dependent variable ex. 54.6% of the variance is explained by the likability.



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Communalities

1.000 .458

1.000 .546

1.000 .265

1.000 .471

1.000 .394

1.000 .485

1.000 .506

1.000 .640

1.000 .503

1.000 .453

QUALITY_ASSURANCECELEBRITY_LIKEABILITY

BRAND_LOYALTY

COMPETENCE

RELIABILITY

CONFIDENCE

WILLINGNESS_TO_RELY

CREDIBILITY

BRAND_SWITCHING

REPURCHASE_

FREQUENCY

Initial Extraction

Extraction Method: Principal Component Analysis.

5.4.3 Total Variance Explained

T o t a l V a r i a n c e E x p l a i n e d

3 .2 8 9 3 2 .8 9 4 3 2 .8 9 4 3 . 2 8 9 3 2 .8 9 4 3 2 .8 9 4 3 .0 3 3 3 0 .3 2 6 3 0 .3 2 6

1 .4 3 3 1 4 .3 2 7 4 7 .2 2 2 1 . 4 3 3 1 4 .3 2 7 4 7 .2 2 2 1 .6 9 0 1 6 .8 9 6 4 7 .2 2 2

.9 8 5 9 .8 5 4 5 7 .0 7 6

.9 8 3 9 .8 3 5 6 6 .9 1 0

.7 1 2 7 .1 1 8 7 4 .0 2 9

.6 6 3 6 .6 2 8 8 0 .6 5 7

.5 8 8 5 .8 8 1 8 6 .5 3 8

.5 0 2 5 .0 1 9 9 1 .5 5 7

.4 7 8 4 .7 7 9 9 6 .3 3 6

.3 6 6 3 .6 6 4 1 0 0 .0 0 0

C o m p o n e n t

1

2

3

4

5

6

7

8

9

1 0

T o t a l % o f V a r ia n c eCum u la t i ve % T o t a l % o f V a r ia n c eC u m u la t i ve % T o t a l % o f V a r ia n c eCu m ulat iv e %

I n it ia l E i ge n v a lu e s E x t ra c t io n S u m s o f S q u a re d L o a d in g sRot a t ion S um s o f S qua red Lo ad i

E x t rac t ion M e thod : P r i nc ipa l Com ponent A na ly s i s .

From the above Eigen Value Table, we can see that the Eigen values of the

first two variables are > 1. This shows that the first two factors explain the

total variance to a great extent. We also see that the first 2 factors

cumulatively account for more than 47% of the variation



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Percentage of variance explains the variance accounted for by each specific

factor or component, relative to the total variance in all the variables. As

factor one with Eigen value 3.289 explains the variance which equals to32.894 and Cumulative % explains the total variance explained by the

factor when more than one variance is taken into consideration by adding

their individual variance as here three factors are taken into consideration

which cumulatively accounted for nearly 47 % of variance and hence only

these many factors are worth considering.

In the Rotation sums of squared loadings we can see that the percentage

of variance explained is now approximately evenly distributed amongst the

four factors as compared to the values previously in the Initial Eigen

values table.



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5.4.4 Scree plot

It helps the researchers decide the number of factors that should be

retained. Scree plot is a plot of the eigen values against the no. of factors in

order of Extractions that there are only two factors whose Eigen value is

more than 1 so we consider these two factors



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987654321

Component Number

3

2

1

0

Eigenvalue

Scree Plot



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5.4.5 Component Matrix

Component Matrixa

.505

.734

.513-.552

.567

.664

.709

-.671

.650

.671

QUALITY_ASSURANCE


BRAND_LOYALTYCOMPETENCE

RELIABILITY

CONFIDENCE

WILLINGNESS_TO_RELY

CREDIBILITY

BRAND_SWITCHING

REPURCHASE_

FREQUENCY

1 2

Component


2 components extracted.a.

The above component matrix contains the coefficients/factor loadings, which

represent the correlations between the factors and the variables. The

component matrix cannot be used to infer anything about the variables.

Because we cannot take a component or two on which maximum loadings

are associated but we want an equally distributed result so that we can

devise an appropriate strategy for that component based on our result and

hence we now decide to rotate the component matrix. Here, we have athumb rule that if the correlation is greater than 0.4, then it would imply

that the factor and the variable are closely related and hence in the above

component matrix we have suppressed the loadings which are less than 0.5

so as to clearly bring out the significant loadings.



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Thus, in lieu of the above difficulty, we use the Rotated Component/Factor

Matrix which has been formed using the Varimax method. In this matrix,

the same variable would not be correlated with more than one factor. TheRotated Component/Factor Matrix would look as follows:

5.4.6 Rotated Component Matrix

Rotated Component Matrixa

.637

.715

.664

.626

.537

.679

.785

.709

.604

QUALITY_ASSURANCE


BRAND_LOYALTY

COMPETENCE

RELIABILITY

CONFIDENCE

WILLINGNESS_TO_RELY

CREDIBILITY

BRAND_SWITCHING

REPURCHASE_

FREQUENCY

1 2

Component


Rotation Method: Varimax with Kaiser Normalization.

Rotation converged in 3 iterations.a.

Thus by rotating the component matrix we have distributed the percentageof variance across all the components.



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5.4.8 Correlated common factors: Initially we can group theextracted variables as shown (factor naming done) -

Factor 1

Factor 2

The factor naming was done such that the variable with the highest loading

for a particular factor is reflected in the factor name while accounting forother variables too with that factor name.For example the second factor had

the highest loading of 0.785 and so the factor name of celebrity influence

reflectes this variable of celebrity credibility and takes into account the

celebrity competence too.

6.Conclusion

Through our analysis we have come to the conclusion that the three factors

that influence the Brand Trust of the consumers while buying a product are-

Brand Perception Consumers are giving importance to the qualityof the product as well as the celebritys likability or reputation

endorsing the product. Their trust is also affected by the willingness to

buy the product. Also more is the consumer loyal towards a particular

brand more he is tempted to buy that product again and again

because of the trust developed for that brand i.e. brand switching will

be minimized once the consumer develops trust in the celebrity

endorsed brand.

Celebrity Influence Consumers are also giving importance to thecompetence and the credibility of the celebrity endorsing the product


Brand Perception

Celebrity Influence


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Brand loyalty will be developed for a brand by giving quality products

as well as having a celebrity who can establish a perfect congruity

between the product he is endorsing and the consumers at mass.Hence a company while devising any marketing campaign must take

into account the celebritys influence on the consumers.

7.Questionnaire

Kindly fill in the following questionnaire for Market Research assignment.Thank You for the same.

The following questions must be answered on a scale of 1 to 5 with:1-->Strongly disagree2-->Disagree3-->Neither disagree nor agree4-->Agree5-->Strongly agree

* RequiredTop of Form

1. Advertisements affect my Purchasing decision *

1 2 3 4 5



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Strongly disagree Strongly agree

2. Products that celebrity endorses assure quality *

1 2 3 4 5


3. You will buy a product because your favorite celebrity endorses it *

1 2 3 4 5


4. If your favorite product is endorsed by a celebrity you dont like, you will still trust theadvertisement *

1 2 3 4 5


5. You prefer a celebrity endorsed product as against a non-celebrity endorsed product *

1 2 3 4 5


6. If your favorite celebrity endorses the product which you dont like, you will buy the product.*

1 2 3 4 5


7. Aamir Khans presence in Coca-Colas ad has brought back my trust after the pesticide scam *1 2 3 4 5




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8. Given for a same product category, I will trust the advertisement which is endorsed by acelebrity.(eg :- For the product shampoo will you go with Dove or Sun Silk) *

1 2 3 4 5


9. The credibility of the endorser affects your buying decision *

1 2 3 4 5


10. Since the time Deepika Padukone has become the Brand ambassador of BSNL, your trust in

BSNL has increased *

1 2 3 4 5


11. Celebrity endorsement do impact your rebuying decision for a particular product *

1 2 3 4 5


0


measuring trust in advertisement through celebrity endorsement

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