The Impact Of Celebrity Endorsement Customers Buying Behaviour Marketing Essay

Published Date: 23 Mar 2015

This literature review aims to provide a comprehensive account of the different theories which will provide frameworks for answering market research questions relating to "The impact of celebrity endorsement on a customer's buying behavior" and using celebrities in advertising and endorsing different products. Various Theories selected within this literature review are those which constitute a core of consumer buying behavior theory in relation with the marketing principles. In particular, the literature is also reviewed which genuinely examines the influence and impact of celebrities in advertising and endorsing various consumer products.

McCracken's (1989) defines a celebrity as, "any person who enjoys a public recognition and who utilises this recognition on behalf of any consumer product by coming along with it in an advert." As per (Friedman and Friedman, 1979), a celebrity is an individual who is a 'Globally famous and renowned icon' among populace in cosmopolitan societies. He can be an entertainer to the public, a movie superstar, a television actor or a sportsman, etc owning special entertaining qualities respectively. Friedman and Friedman also found empirical evidences that, in advertising and promotion of products which are high in psychological and/or social risk, use of celebrity endorser can lead to an authentic believability and a more favourable assessment of the product and the advertisement, which can significantly lead to a more positive purchase intention by the customer. (Cool Avenues, 2005). Various studies suggests that the overall cost of attracting new customers in the market is much higher as compared to retaining existing ones, thus companies must both seek to develop an effective and efficient communication with their existing consumers along with attracting potential customers utilizing its marketing mix. As an outcome 'below-the-line' promotional models have very well established themselves as an integral component of marketing mixes with advertisings being the main dominant communication tool for the companies with their customers. (Lanman, 2003). Unsurprisingly modern marketers conduct an intense consumer buying behavior research. Researches conducted along with these lines are in order to interpret and understand their base target customers better than their competitors and as a result allowing strategic marketing mixes to work more effectively and efficiently for the companies, (Jobber, 2001). Advertisers for promoting their respected product gather mileage and attention awareness among their consumers through unique product launch, high profile inauguration ceremonies. AD agencies uplift the product with all hyped celebrity endorsement for easy and quick sale, ensuring the promptness of their product supply in the domestic as well as in the international markets. Celebrities also help in generating extensive PR leverage for the brands. In the fashion business, celebrity endorsement for endorsing any product is often used for fashion goods, as fashion items rely heavily on a strong brand image from a cultural perspective. Celebrities are considered to be more useful in expressing a fashion idea to the customers in a more direct way, (Bohdanowicz & Clamp, 1994). On a contrary, Solomon (2003) argues that a consumer buying behavior is dynamic, which means that the entire buying behavior or purchasing decision process of the customers is complex which can be influenced by many factors viz. reference groups, product loyalty along with other social and cultural factors. (Oxbridge Writers, 2010).

Advertising or endorsing a product through a celebrity has consumed almost more than the double of the market in Japan as compared to America. Various Celebrities in United States of America occupy approx. 25% of the product advertisements (Stephens and Rice, 1998), where as in Japan the figure just mounts up to 70% (Kilburn, 1998). Celebrity endorsements have several benefits, like building credibility and getting attention of the public, which can translate into higher sales. Basically, celebrity endorsements are being preferred for almost every kind of product categories, like hotels, toiletries, telecom, razor blades, soft drinks and hard drinks among others. (Meri News, 2006). Celebrity endorsements is a billion $ unpredictable game by any of the multi-national firm or even small scale industry in this modern era of cut throat competition (Kambitsis et al., 2002). The pinnacle is the prime target of the advertisers to make a product attractive along with appeasing for its consumers. An explanatory study dictates that for any 'Popular branding' of a product along with utilizing its product manifesto, various prominent names bulge up in the head for making them the 'Brand Ambassadors' with companies inline viz. Pioneer, Accenture, Palmolive, Hyundai etc. Huge amount of money for sighing up a celebrity is a herculean task for a company but yet this approach has done wonders in bringing stability and credibility and turning it into the form of higher sales in the market. (Byrne. A, 2003). Globally, companies have been juxtaposing themselves and their brands with various celebrities. Some of the successful ongoing global endorsements can be:

• Pepsi - Endorsing celebrities have been the bedrock of Pepsi's advertising campaign. Over the decades, Pepsi has used and still continues to utilise a number of celebrities for its general market which includes Shaquille O'Neal, Britiny Spears, Wyclef Jean, Busta Rhymes and Mary J. Blige.

• Nike - The Company signed famous golfer Tiger Woods in 1996 and have seen a revenue growth of $50 million. In 2000 Tiger Woods renegotiated a 5 year contract with Nike estimated at $125 million.

• Reebok - Venus Williams, famous tennis player and Wimbledon champ has signed a 5 year contract with Reebok International Inc. worth $40 million. (Chillibreeze, 2010).

In1995, U.S. Multi-nationals paid more than 1 billion $ to 2000 athletes for endorsement contracts for enhancing their sales, which means that approx. 10% of the expenditure on corporate sponsorships was spent on this particular promotion strategy. Famous combination of basketball star celebrity Michael "Air" Jordan along with Nike has become the sports products business euphemism for "a perfect fit". By the early 1993, 1 out of 3 pairs of athletic shoes sold in the U.S. were produced by Nike, with "Air Jordan" shoes and apparels contributing more than 200 million $ of sales in a year to the Nike empire.

The crescendo of Indian celebrities endorsing various brands has been steadily mounting over the past 3-4 decades. Marketers overtly acknowledge the intense power of celebrities in influencing a customers buying decision. Crores of rupees flown per year on celebrity endorsement contracts gives a clear picture that celebrities like superstar Shah Rukh Khan, Amitabh Bachchan and cricketer Sachin Tendulkar, M.S. Dhoni play an important and vital role for the Indian advertising industry. In India from late 1970's to the early 1980's, a new trend in Indian advertising commenced, when celebrities started endorsing various brands. Hindi film and Television stars along with famous sports personalities were roped in to endorse various prominent brands. Advertisements started featuring movie stars like Tabassum (Prestige cookers), Late Jalal Agha (Pan Parag) , Ravi Shastri along with Vivian Richards (Vimal), Sunil Gavaskar (Dinesh Suitings) and the legend Kapil Dev (Palmolive Shaving cream) became common. (Indian MBA, 2008). The trend still continues today with Shahid Kapoor endorsing VIP bags, Abhishek Bachchan promoting Idea cellular, M.S. Dhoni boosting up the sales of Boost energy drink and many more. The famous cricketer Sachin Ramesh Tendulkar endorses everything right from Visa to Adidas, Cannon to music systems and Palio to Pepsi. Whether it is King Khan of Bollywood endorsing Navratan hair oil advert or Radhe of Tere Naam promoting Chlormint, one approving nod of a celebrity face can be transformed into billions for the company. (Meri News, 2009). As surveyed by IPAN-IMRB and related theories conducted considering males and females ageing 16-45 years from the metros, mid sized cities and towns, 'Shah Rukh Khan's' name as a brand ambassador were supported by nearly 17% of the masses. AdEx India, a division of TAM media research has discovered that celebrity endorsement mounted up to 49% in 2007 as compare to the year 2006. Considering the overall accountability of celebrity endorsements, the stars from film industry has increased a huge share of 81% on a condition that a male celebrity should be athletic or 'Macho' by nature and female celebrity should be stunning, elegant and gorgeous enough to attract youth in movies and consumers in commercials. This kind of growth curvature can tilt to any side of popularity for the advertisers marking sales to skyrocket 6 times to 10 times in a line with maximum figures of advertisements telecast in a particular year round the clock. AdEx India has acquired an advertising vol. of high share on television for celebrity endorsement at some point in H1 in the year 2008. (Appendix-1). The 'Airtel Cellular Phone Service' or the Bharti Cellular group has positioned as the top brand for product endorsement along with 'Parachute's after shower wet look Gel' gaining momentum, topped the chart list of various brand endorsed by celebrities on the electronic medium during h1 in the year2008. (Appendix-2).

The alignment or alliance to a brand becomes an easy task for the advertisers to invest quite huge and handsome pay structure for the product endorsement. The legacy of 'window dressing' by well known or popular imagery is indeed a direct method of association or connection of message conveyed by the celebrity to the consumers. (Ohanian. R, 1991). Brand switching is the fiercest threat for advertisers basically due to the presence of rival product brands in the market. The alliance of strong linking of brand helps in fortifying and strengthening the brand equity along with generating awareness among the consumers on a large massive scale. Tenacity of scandals in a celebrity's life personality has always effected the endorsement and its advertising of a brand. However, companies today have adopted various new techniques for the endorsements by using individuals who are not celebrities but can be the substitute characters in place of the original ones which can be harmonious characters absolutely fitting for any particular brand and directly target the audiences. (Tom et al. 1992). Mehta (1994), with its renowned theory, explained that It is the variations in choices and tastes of consumers with some glued to a particular brand whereas others just mesmerized by the 'celebrity image' promoting and endorsing their personality or any other forms of dialogue - delivery styles or patterns accept the endorsement in that way. (Atkin & Block, 1983). Another study of 'Celebrity Endorsement' emphasizes primarily over refurbishing or renovating the image of a brand for launching a product quite conveniently in the home or domestic markets, so that even the lost image might turn the brand to re-position itself automatically sometimes. (Petty et al, 1983). As according to Zafer Erdogan (1999), over exposure of celebrity triggers-in when a single endorser tries to endorse multiple products of well-known 'brands'. Dwane Hal Dean considered the effects of 3 extrinsic adverts cues viz. 3rd party endorsement, brand popularity on brand / manufacturer and event sponsorship evaluation. The study observed that endorsement thoroughly affected only the product variables (i.e. quality & uniqueness) and 1 image variable (i.e. esteem). The 3rd party endorsement can be hence be perceived as a sign of the product quality. Goldsmith et al assessed the effect and impact of an endorser and corporate credibility on the attitude towards the advert, the attitude towards the brand along with customer's buying decision process or purchase intentions. Figure of 152 adult consumers were surveyed through questionnaires who viewed a fictitious advert of a Mobil Oil Firm. They rated the credibility of the company, the credibility of the ad's endorser, and attitude towards the advert and the brand followed by a buyer's purchase intentions. It resulted that corporate credibility had its strongest impact on the brand whereas endorser's credibility had its strongest effect and impact on Advert. The research suggests that corporate credibility do plays an important and vital role in consumers' reactions and attitudes towards advertisements and brands. (Indian MBA, 2007).

This literature review has presented an exhaustive list of different research work within marketing or a summary of various past researches concerning the impact of celebrity endorsements. The literature review will serve as a guide to the various critical theoretical assumptions or hypothesis which will underpin the research work and will form a fundamental basis for the proposed research. In a nutshell, the current market scenario indicates, that the powerful impact of celebrity endorsement advertising strategy under the right conditions or circumstances indeed justifies the high costs and expenditures associated with it. It generates a connection that forces a customer to buy a product; however, it is quite essential for advertisers to be conscious of the multifarious processes underlying celebrity endorsement.

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