Impact Of Celebrity Endorsements On Consumers Brand Marketing Essay

This report is a research proposal which deals with the marketing area of brand management. In brand management we have selected the topic from the celebrity endorsement tool and advertisement. Our topic of research is “Impact of celebrity endorsements on consumers’ brand perception and buying behavior.” We would take a product similar product from sports area and analyze the affect of having celebrity endorse one product and what the other product relative performance without celebrity endorsement.

We also analyze consumers’ behavior, impact on sales, and brand equity for the same. The present research will give us insight into the consumer behavior to the products acceptance with celebrity impact on its perception. Study will give the layout of strategy that might be adopted in taking decision about advertising a brand with or without having celebrity in it. We will also explore risks vs. returns, advertising goals what an advertiser have in mind, and celebrity and brand image in the literature review section.

In today’s cut-throat competition the marketing industry has been revolutionized. The past brand communication was based on storytelling and mouth of word. Nowadays, brands have been revolutionized to represent customers’ wants, trends, and responsiveness. On the other hands new strategies have been introduced to increase sales, influence customers behavior, brand equity, and profit margins. Customers have adopted the bands as fashion for self expression, realization, and identity. As the trends have changes so does the strategies to deal with the same by the brand managers.

A Celebrity is a popular figure in the public which is well known of having some specialty or skill. They enjoy the public recognition and mostly skilled in their respective fields. The examples of such personalities are; sports figures, entertainers, and singers etc. they have particular attributes like; special skills, attractive personality, standard life style, larger than the image life, and even demigod status at some places. Celebrities generally differ in social norms and life style and enjoy higher level of recognition and fanfare.

An Endorsement is channel of communication where a celebrity acting as brand’s spokesperson and certifies brand’s claim by giving his support to validate it. It uses its personality, popularity, status, and appeal to endorse the product. In a wide spread local and international competing brands, celebrity endorsements are thought to provide differentiation or edge needed (Martin Roll, 2006). So the celebrity endorsement is the use of celebrities with an objective to increase the sales/value of a brand.

Examples of celebrity endorsements are: Tiger Woods for Tag Heuer; Edu Manano for Lucky Me; Britney Spears for Skechers; Alicia Silverstone for Kamiseta; Bata Reyes for San Minguel Beer. According to an estimate 20% of all commercials use some form of celebrity endorsement. Bryant is reported to have signed a deal with athletic footwear giant Nike worth $45 million over the five years. Some other sponsors willing to pay mega bucks are Spalding, Coca Cola, and McDonald’s. On the other hand sponsors are skittish about endorsers who turn to controversies (Ong, 2003).

After Hollywood superstar Tom Cruise wore a pair of Ray-ban 1952 ‘Wayfarers’ in the blockbuster, Risky Business, the annual sales of Wayfarers rose from 18,000 to 260,000 in 1983. Similarly it was due to his endorsement that Ray-bans are now the best selling sunglasses in the world (Ltd, 2007).

The author (KHATRI, 2006) concludes that celebrity endorser is a indeed solution to all marketing problems. He believes that it is today’s popular approach in advertising which should be carefully blended to strategically taking its benefits and making brands. It mostly works but could also be disaster even having appealing stars in ad campaigning if it lacks powerful or workable idea. It present excerpts from Cyber media research which concludes;

Over 80% of the viewers remembered the celebrity but forget about the brand,

Different endorsers appeal to different segments or geographic groups of customers,

Research presented that ads without celebrity had good chance of being successful as against those having them.

This field of study lacks the frameworks or models in practice so we main focus will be theoretical constructs.

Risks Vs Returns

Before decide to contact a celebrity for your ad campaigns it is necessary to evaluate merits and demerits of such a move.

Risks

People remember celebrity not Brand: Celebrity overshadows the brand as a person tends to remember celebrity not product or brand.

Endorser credibility: Educated customers are well aware of celebrity’s credibility, having indicted or notorious behaving endorsers do more harm than good.

Celebrity attachment: Once a brand is known by or attaches a celebrity it becomes difficult to promote it in the future without that celebrity.

A mismatch: Some celebrities are better off with products they look naturally related with; otherwise a mismatch does not give a strong message.

Poly-endorsements: multiple endorsements clutter a product with number of celebrities while the product itself looks empty or weak.

Returns

Awareness: Research shows that consumers have higher recall of the message endorsed by the celebrities.

Brand loyalty: Customers having loyalty to the celebrity also attached emotionally to the brands they promote.

Quick Recall: Customers tends to hasten up for the products with celebrity endorsements and can relate the brands with endorsers and spread the message to their area of influence.

Imitation: Celebrities have become the role models for copying them by followers in every aspect of their lives. So they start using products as fashion as they them doing the same.

Advertising Goals

In order to understand the role of celebrity endorsements we need to understand the goals of communication of the advertisers which they tend of try to communicate about their brands to the customers (Pad, 2010).

Firstly, advertisers are tasked to promote market growth which is usually taken as zero.

Second, advertisers have to persuade the consumers to buy a certain product or avail an intended service.

Third is the business perspective goal, which is to choose a relevant celebrity for target product to be promoted.

Celebrities add new dimensions to the brand image and could help convincing the clients of the brand.

Lastly, advertisers see celebrities as a source of free publicity. They include local or domestic heroes in their endorsement portfolio. For instance when an athlete becomes champion, will be followed by media and press and thus becomes free source of publicity.

Advertisers have been using celebrity endorsements in advertisements, prints campaigns and promotions for the reason that if properly done they sell the products. They get viewers or consumers attention but the selling of product depends upon the right selection of the celebrity and idea which works and have masses appeal. Ideal this would be the person in whom the consumers of product or service have trust and they want to believe. But the problem is the celebrities like other members of the society do not have integrity and appeal that the consumers or advertisers have expected from it. Celebrities in advertisement are driving vehicle and are expected to continue to be so in the next millennium as well. There will be no shortage of the talent to fill in the old ones but doing it right is the biggest challenge. The right answer is the one which could result in better consumers’ response, higher sales, and profits (Jeney, 2010).

Celebrity & Brand Image

In order to select a celebrity for a given product, there should be an optimal match between celebrity and brand image. Here are some parameters which should be considered for the same (Katyal, 2010):

Celebrity personal character is not controversial

It fits with the image of the product

What is the cost of acquiring a celebrity and if it is worth it

Is there any controversy risk attached after the ad campaigns launched

How much the celebrity is popular?

Does celebrity appeal is local or regional and what is product or service appeal in the same context as local or regional

Is the celebrity credible? Provide with the statesmanship so that consumer of the product tend to believe him/her.

If the celebrity is a brand user?

What is celebrity profession? Does it matches to have a natural match to the product and appeal to the consumers. For example, celebrity figure from sport is natural to promote sports related stuff and footwear.

Are you concerned about celebrity previous endorsements, for example; previously endorsed competitor brands or have endorsed multiple products in the same product line?

What values celebrity is associated with the product? If a celebrity is put in a role to propagate the human service cause does he/she be social worker or figure.

Does target audience want to believe in the celebrity for the target product to be advertised or message to be conveyed.

After advent of television, cable television, and internet, advertisement industry got revolutionized. New trends and format were introduced for rapid and technical way to impress the public and numerous items, products and services became the household names. Television though invented in 1920’s became commercial medium in 1950’s. This happen when a price of the television sets began to approach affordable range of average person. Print and Radio had to take back seat to give a way to the new technologies. Now the commercials could be broadcasted with sight, sound, and motion. First time in the history advertisers saw huge potential of multimedia technologies which could give higher gains in sales and profits provided right tools and ideas were selected. Cable television channel introduced channels like MTV for young music lovers, ESPN for sports enthusiasts and Food Networks for people with love of cooking. These new channels were attractive and fun for advertisers who wish to target certain audience for example; entertainment, sports, or food (Sample, 2010).

Industry Background

Volney B. Palmar was first advertising agency started in 1841 in Philadelphia. Advertisement became wide spread mainly with the dedicated sections of advertisement in the newspapers and magazines. For the basic need to create selling material, the advertisement companies were born. The trend spread like a wild fire in only New York City alone there were 20 advertising agencies by 1861. Radio became a commercial medium in 1920s. Later on television changed everything which became commercial medium in 1950’s. For the first time commercials were telecasted with Sight, Sound, and Motion (Sample, 2010).

Lot of discussion had been made on the importance of brand management in an increasingly competitive and diverse media marketplace. By the last two decades celebrity endorsements are being used yet another tool for brand communication. In the past Newspapers, Magazines, Radio, Television, Cable, and Outdoor advertising have been popular for the same.

Advertising industry is multibillion dollar market. It can also make fortunes for the company promoting the products for business gains, making brand names, huge profits, and public awareness. The best example of this is Michael Jordan whose endorsements have contributed $10 billion to the economy in advertising campaigns for Cock, Nike, and McDonald’s (Pad, 2010).

In 2000 Tiger Woods negotiated a five years contract with Nike worth $125 million. Tennis player and Wimbledon champion, Venus Williams, has signed a five years contract worth $40 million. Some other successful endorsements have been; Dunlop – John McEnroe, Adidas – Prince Naseem Hamed etc (Katyal, 2010).

Aim and Objectives

Aim or purpose of research

The aim of the research is to study the impact of celebrity brand endorsements on consumers’ brand perception and buying behavior. We plan to compare two near equal companies/brands with and without celebrity brand endorsement. We analyze and study the impact of such a scenario on companies’ sales and brand equity in each case.

Research Questions

What is the impact of celebrity endorsements on consumers’ brand perception?

How the celebrity could impact the user buying behavior and thus the sales?

Objectives

The objectives of this research are:

To analyze the impact of celebrity endorsements on the brand image

To study the impact of celebrity endorsements on the purchasing behavior

To determine its impact on sales

To find the impact of celebrity endorsements on brand equity

Proposed Subject Area of Research

The brand endorsement belongs to the business area of brand management. It further down belongs to the broader area of marketing research. Brand management is an application of marketing techniques to a specific product, product line, or brand. It aims to increase product’s perceived value to the client and thus improve the brand franchise or brand equity. It may also increase the sales as comparison to the competing products with similar features. It can also enable manufacturer to charge more for the product so as a result increasing the sales but also profit margin and higher return to the stakeholders at the same time.

Research Methodology

In this section we will explain the research method we will follow throughout the research. Mainly we will give our two types of data sources to be used for research and four stages of the data analysis method. The proposed method of research would help us proceed in a systematic way. This is designed in such a manner that will help us achieving our research aim and objectives. This step by step research would also help us to divide our objectives in subtasks. Their mappings with time line will follow allow us to be flexible with subtasks and meeting our objectives within time limited.

An approach based on blend of both qualitative and quantitative research methods will be utilized for this research at the same time ensuring a certain amount of triangulation.

Secondary data sources will comprise of Brand book authors and marketing guru; (Jordan McAuley, 2010), (Lynn R. Kahle, 2006), (Jordan McAuley, 2010), and (Pringle, 2003).

Selected electronic Articles and Publications, relating to Brand management and Marketing will also be sourced from authors’ homepages and electronic databases. However news articles and encyclopedias sources would be ignored to ensure the quality and integrity of the research. This will help us meeting the quality and research objectives accordingly. There will be two main data sources to carry out our research in a systematic way. First data sources would be primary and would consist of raw data in the form of input obtained from the questionnaire. The second data source is secondary data sources based upon raw data from primary data sources. These two data sources are explained below.

Primary data will be collected with the help of carefully designed questionnaire to understand the customer views on parameters of celebrity endorsements on sales, customer behavior, brand perception, buying behavior, and brand equity; with or without celebrity endorsements. Advertisements on television and news papers would be viewed as brands being endorsed. The same parameters would be tested for brand endorsement from a pop singer or a sports figure to study the effect they have on specific segments of customers. We intent to choose television commercials for the purpose of analyzing the merits and demerits of the celebrity endorse advertisement in the sports industry.

The questionnaire would be distributed on locations at London School of Business & Finance (LSBF) and UK shopping centers. For participant to be eligible to take part in the process he/she should have one heard or saw the advertisement. A sample of 100 buyers at both locations with total of 200 is planned to reach. The samples would be carefully selected for having both young and old age buyers. Interviewer will administer questionnaire to ensure the validity of the data.

From collection of raw data of questionnaire and interviews, to the data analysis using SPSS Package would be carried out in four stages. Each stage is gives a specific task which is to carry out research in a systematic way. This method would be help us in dividing each tasks in subtasks so that the important phase of research analysis could be carried out in an accurate way possible which is less erratic to the extent possible. These four stages of our research method are highlighted below with corresponding details as well of each task.

Now each one of four stages of the research method are explained below in step wise manner:

First-Stage

In the first stage data is to be generated by the questionnaires includes personal data such as age and occupation etc. Furthermore in order to build a profile of those who heard or seen the advertisement at least once we will use Microsoft Excel© spread sheets. We will than develop behavioral data on two types; one on the product and company itself and on the sports celebrity used relate advertisement and without celebrity. Second would comprise of buyers history on purchasing the product and the future behavior to purchase the similar product in the questionnaire form. In devising the questions for the above mentioned questionnaire SPSS package and consumers feed would also be used as per need.

Second-Stage

Data from the above questionnaire with buyers with positive gesture towards product in term of past preference of the product or future intention to buy the same will be selected for the second stage of the analysis. This will give us the filtered data for the quality of the further analysis. In order to further reduce the biasness we will ask filtered consumers for their willingness to participate in the interview. Volunteers would provide contact details and their participation for further proceedings.

Three-Three

In stage three a further sample of 30 respondents would further are drawn to participate in the semi structured interviews. The selection of semi structured interviews method is done due to the fact that it will allow us to ask questions other than written pre-determined questions in the questionnaire form. This give researcher the flexibility to explore some issue in more details if needed while administering the questionnaire. These interviews are supposed to last for 15-29 minutes. This will allow us to generate a very useful data which is in accordance with the outline set in the aims and objectives section. This flexibility would produce a high quality data from the previous stage as respondents will be free to give their opinion and thoughts in more detail on the relevant part of the research. This will also help us explore their individual accounts of their experience with the same as well as their motivation to buy the product.

Final-Stage

In the final stage of data analysis we will use the SPSS package to analyze the questions generated by the questionnaire. This will also help us designing target questions in the questionnaire which represent the objectives of the research and are in line with the research outline.

So by following the above research methodology into carrying out research we hope to get into the complexity of the research buyer behavior with certain level of accuracy and quality. We suppose to get insight into the celebrity endorsement driven advertisement in particularly UK and meeting our research objectives at the same time. This will answer our research questions and explore the way how the research methods can be used to carry out the same.

This research will give us insight into general consumer behavior and impact on the sales of a particular brand which could be further expanded in specialized research area in the future. In future research someone can address the limitations of our research by considering larger data sample and covering wide variety of other factors as well.

Time-Line

In this section we present week-wise task list of our research. We will try to follow this schedule with its spirit but we also expect unwanted delays. For unexpected delays we can allocate or deduct time from other tasks and incase of time expected to run short we shell start some task in parallel with another. It is also to be highlighted that literature review is continues process which may modify or improve our tasks and respective time. The total duration is expected to be 6 months and plus 2 weeks for unexpected delays at the end of completion. Thus a tentative outlines of tasks with expected time taken by each is given in table 1:

The possible resources would be helpful in research can be asked for from our university administration. These resources may include books highlighted in the research methodology to be obtained by the library and SPSS package for the purpose of the research from the administration. In case of books and journals which are not available in hard copy we are open to explore electronics copies in case provided otherwise. We would need our teacher’s continues guidance in this regards.