15589322 sandeeps fine project on celebrity endorsement as a source of brand building

7/29/2019 15589322 Sandeeps Fine Project on Celebrity Endorsement as a Source of Brand Building

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LOVELY PROFESSIONAL UNIVERSITY DEPARTMENT OF MANAGEMENT

A STUDY ON THE IMPACT OF CELEBRITY ENDORSEMENT ON BUYING BEHAVIOR OF CONSUMERS AND AS A SOURCE OF BRAND-BUILDING

Submitted to Lovely Professional University In partial fulfillment of the requirements for the award of degree of MASTER OF BUSINESS ADMINISTRATION

Submitted by: Sandeep Sharma Registration No.2020070484

Supervisor: Miss Yogita Sahni Designation: Lecturer (LSB)

DEPARTMENT OF MANAGEMENT LOVELY PROFESSIONAL UNIVERSITY PHAGWARA (2009)


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TO WHOMSOEVER IT MAY CONCERN This is to certify that the project report titled Astudy on the impact of celebrity endorsement on buying behavior of people and asa source of brand-building carried out by Mr. Sandeep Sharma, S/o Sh. Suresh Sharma has been accomplishned under my guidance & supervision as a duly registeredMBA student of the Lovely Professional University, Phagwara. This project is being submitted by him in the partial fulfillment of the requirements for the award of the Master of Business Administration from Lovely Professional University.His dissertation represents his original work and is worthy of consideration forthe award of the degree of Master of Business Administration. _________________

__________________ (Name & Signature of the Faculty Advisor) Title: ______________________________ Dare: ______________________________

Date:


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DECLARATION I, Sandeep Sharma, hereby declare that the work presented herein is genuine work done originally by me and has not been published or submitted elsewhere for the requirement of a degree programme. Any literature, data or works doneby others and cited within this dissertation has been given due acknowledgementand listed in the reference section.

_______________________ (Student's name & Signature) _______________________ (Registration No.) 2020070484 Date:__________________


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ACKNOWLEDGEMENTIt has been a great pleasure for me to work on this project. My sincere thanks to Lect. Miss Yogita Sahni for giving me an opportunity to work on this project whereby I was given an exposure to study the impact of celebrity endorsement as asource of brandbuilding and on consumers buying behavior in automobile Industrywhich helped me to increase the span of our knowledge and developed my thinkingon more practical lines. I thank her for her guidance and support throughout the time when I was working on this project. I am also thankful to Mr. Varun Naiyer and Mr. Mandeep Singh Saini under whose valuable guidance I learnt a lot and which will help me out in the coming days.

I express my sincere thanks to my parents, friends who encouraged me throughoutthis project and always with me.


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Executive SummaryIndia is a country where people love to live in dreams. They worship celebrities. Celebrities may be Cricket stars like Sachin Tendulkar, Mahinder Singh Dhoni or Film Stars like Salman Khan, John Ebrahim. They treat them as God. Marketers use this very preposition so as to influence their target customers may be existing or potential ones. For this they rope in these celebrities and give them whopping amount of money. They believe that by doing this they can associate their products with their target customers. This is called celebrity endorsement. But do this celebrity endorsement acts as a source of brand-building and have impactover the purchasing behavior of customers in case of automobiles? For this I decided to conduct this vary research and objectives of my research are: To identify the influence of celebrity endorsement on consumer buying behavior. To study celebrity endorsement as a source of brand-building. To find which type of celebrity persona is more effective. Lot of researchers has done extensive research work regarding celebrity endorsement, its influence over customers purchasing decisions. After studying the whole literature related to celebrity endorsement I found a gap in the study. This gap was whether celebrity endorsement acts as a source of brand-building. So I decided to undertake research on this particular aspect. This research is limited to Jalandhar City only due to various constraintslike time available, scarcity of resources etc. From this we can make an attemptto generalize the result to the whole universe. After conducting research it was found that brand name and celebrity endorser are the two key factors that playan important role in affecting purchase intention. Majority of the people wantto see their favorite celebrity endorsing their brands.


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During our research an important factor revealed that mostly people want to seemale celebrities endorsing automobile vehicles rather than female. This fact isalso supported by advertisement of glamour motorbike which have baseline Definitely male. This particular advertisement created hot spaces at Cannas festival. There are large no. of mediums of persuasion but celebrity endorsement is an effective mode of persuasion.

People love to see sports stars endorsing automobile vehicles than that of bollywood stars. This particular aspect is mainly supported by the fact that in Indiawhere Cricket is religion and with the success of IPL-1 cricketers like GautamGambhir,Ishant Sharma are able to displace big film stars like Hrithik Roshan for advertisements of Coca-Cola. Another important fact which came into existencewas majority of people follow their favorite celebrity while making a new purchase everytime. Beside this one major factor come into existence that mostly respondents were able to recognized the celebrity used in various advertisement. So in this brand recall test, mostly positive results were found. One open-ended question was also included about suggestion. From that it was concluded that mostlypeople want that instead of spending huge amount of money onto celebrities company should come out with some schemes so as to lure their customers. So it can be concluded that for a small extent Celebrity endorsement acts as a source of brand-building but company should follow integrative approach so as to build strong brands.Beside celebrity endorsement they should run certain schemes so as to provide value to the customer and to build strong brand.


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Chapter-1


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1.1.1Introduction to the subject: There are large no. of brands available in themarket. Some are very familiar and rest are somewhat. What are the things thatdistinguish those from rest? It may be brand name, advertisement, royal heritageand may be celebrity endorser who endorse them. e.g. Raid and Taylor has the rich heritage of ropping in various cascades of James Bond 007 as their brand endorser and it has helped them strongly to build there brand. Businesses have longsought to distract and attract the attention of potential customers that live ina world of ever-increasing commercial bombardment. Everyday consumers are exposed to thousands of voices and images in magazines, newspapers, and on billboards, websites, radio and television. Every brand attempts to steal at least a fraction of an unsuspecting 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 subject's attention. Also from a marketing communications (marcoms) perspective, it is vital that firms design strategies that help to underpin competitive differential advantage for the firm's product or services. Accordingly, marcom activities back-up other elements in the marketing mix such as designing,branding, packaging, pricing, and place The term Celebrity refers to an individual who is known to the public (actor, sports figure, entertainer, etc.) for hisor her achievements in areas other than that of the product class endorsed (Friedman and Friedman, 1979). This is true for classic forms of celebrities, like actors (e.g., Amitabh Bachchan, Shahrukh Khan, Rani Mukherjee Aamir Khan and Pierce Brosnan), models (e.g., Mallaika Arora, Lisa Ray, Aishwarya Rai, Naomi Campbel

l, Gisele Buendchen, etc), sports figures (e.g., Sachin Tendulkar, Zaheer Khan,Sourav Ganguly, Anna Kournikova, Michael Schumacher, Steve Waugh, etc), entertainers (e.g., Cyrus Broacha, Oprah Winfrey, Conan O'Brien), and pop-stars (e.g., Madonna, David Bowie) - but also for less obvious groups like businessmen (e.g.,Donald Trump, Bill Gates) or politicians.


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Celebrities appear in public in different ways. First, they appear in public when fulfilling their profession, e.g., Vishwanathan Anand, who plays chess in front of an audience. Furthermore, celebrities appear in public by attending specialcelebrity events, e.g., award ceremonies, inaugurations or world premieres of movies. In addition, they are present in news, fashion magazines, and tabloids, which provide second source information on events and the 'private life' of celebrities through mass-media channels (e.g., Smriti Irani being regularly featuredin various publications). Last but not least, celebrities act as spokes-people in advertising to promote products and services, which is referred to celebrity endorsement. 'Celebrity Endorsement' McCracken's (1989) definition of a celebrityendorser is, "any individual who enjoys public recognition and who uses this recognition on behalf of a consumer good by appearing with it in an advertisement(marcoms), is useful, because when celebrities are depicted in marcoms, they bring their own culturally related meanings, thereto, irrespective of the requiredpromotional role." Friedman and Friedman (1979) found empirical evidence that, in the promotion of products high in psychological and/or social risk, use of celebrity endorser would lead to greater believability, a more favorable evaluationof the product and advertisement, and a significantly more positive purchase intention. Thus, companies use celebrities to endorse their products, however, there are deeper attributes that are involved in celebrity endorsement. Celebritiesmight endorse as a brand ambassador or a brand face. Some time people have thishabit of relating this vary term of celebrity endorsement with brand face. Butthis is not so. Difference Between Brand Ambassador & Brand Face A Brand Ambassador would be one who is not only a spokesperson for the brand or is just appeari

ng as a testimonial for the brand's benefits. He/she is an integral part of the


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brand persona and helps to build an emotionale, which goes beyond just appearingon TV commercials He takes up the cause of a Brand Champion and is associated with every aspect related with the brand. What is more, there is a significant difference between making just an endorsement for say, a shampoo or an automobile,and being that brand's alter ego. Both parties take the latter far more seriously to the deal. So a brand ambassador would be involved in press releases, he/she would be actively participating in any sales promotion, sporting the Brand allthe while. For example, Fardeen Khan is the brand ambassador for Provogue whilehe remains a brand face for Lux Body Wash. On the other hand, a Brand Face would be the current celebrity who is just used as a tool to increase brand recall and is only appearing in the advertisement. It is usually seen that a brand faceis a temporary contract and is very short term at times. An example would be Sona Chandi Chawanpryash using Sourav Ganguly for a while in its commercials. Brandfaces are easily forgotten and fades away with the campaign's end.

The motive behind total branding may be decocted as an attempt to amalgamate diverse activities to win customer preference. Apropos to this context, the topic Impact of celebrity endorsement on overall brand, is a significant one. The crescendo of celebrities endorsing brands has been steadily increasing over the past years. Marketers overtly acknowledge the power of celebrities in influencing consumer-purchasing decisions. It is a ubiquitously accepted fact that celebrity endorsement can bestow special attributes upon a product that it may have lacked otherwise. But everything is not hunkydory; celebrities are after all mere mortalsmade of flesh and blood like us. If a celebrity can aggrandize the merits of a b

rand, he or she can also exacerbate the image of a brand. If I may take the liberty of rephrasing Aristotles quote on anger, Any brand can get a celebrity. That is easy. But getting a celebrity consistent with the right brand, to the right degree, at the right time, for the right purpose and in the right way... that is not easy. Celebrity endorsements are impelled by virtue of the following motives: Instant Brand Awareness and Recall.


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Celebrity values define, and refresh the brand image. Celebrities add new dimensions to the brand image. Instant credibility or aspiration PR coverage. Lack ofideas. Convincing clients.

Scope of Celebriity Endorsement:The use of testimonials by advertisers dates back to the 19th century when medicines were patented. Firms have been juxtaposing their brands and themselves withcelebrity endorsers (e.g., athletes, actors) in the hope that celebrities may boost effectiveness of their marketing.The increasing number of endorsements throws a valid question to the consumers. Is there a science behind the choice of these endorsers or is it just by the popularity measurement? What are the reasonswhich lead to impact of celebrity endorsement on brands? The success of a brandthrough celebrity endorsement is a cumulative of the following 14 attributes. Greater the score of the below parameters, greater are the chances of getting close to the desired impact.


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Impact Regions of Celebrity EndorsementWhile brand marketers with positive experiences would tend to believe that celebrity endorsements work and some would disagree, but one would be sure that the magnitude of its impact is difficult to measure even if sales figures are at ourdisposal. However, we can understand why it works and the impact regions of celebrity endorsement. The illustrations below explain the same: -


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How Celebrity Endorsements Influence the Consumer The basis for the effectiveness of celebrity-endorsed advertising can be linked to Kelman's processes of social influence as discussed by Friedman and Friedman. According to Kelman, there are three processes of social influence, which result in an individual adopting the attitude advocated by the communicator: Compliance, Identification & Internalization These latter two processes are particularly applicable to celebrity-endorsed advertising. Compliance infers that another individual or group of individuals influences an individual cause he or she hopes to achieve a favourable reaction from this other group. This process of social influence is not directly applicable to celebrity advertising because there is little, if any, interaction between the celebrity and the consumer. Identification applies to the situation wherein the individuals emulate the attitudes or behaviour of another person or group, simply because they aspire to be like that person or group. This process is the basis for referent power. It was found that celebrities are more commonly liked than a typical consumer spokesperson. Internalization as a process of socialinfluence is said to occur when individuals adopt the attitude or behaviour of another person because that behaviour is viewed as honest and sincere and is congruent with their value system. The effectiveness of celebrity


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advertising traditionally has not been strongly linked to this process, as a celebrity's reason for promoting a product can just as easily be attributed by theconsumer to an external motive (i.e., payment of fee) as to an internal motive (i.e., the celebrity's true belief in the value and benefit of the product). An important issue of concern relates to the development of a strategy for use in Celebrity Advertising, which benefits from the dramatic impact of dual support ofboth the identification and internalization processes of social influence. Celebrities are well-liked, but the techniques that can be used to enhance their credibility as spokespeople, and therefore, tie-in more closely with the internalization process needs to be looked into. Effectiveness of Celebrity Endorsers A study conducted by Charles Atkin and Martin Block focussed on alcohol advertising and young audience to examine the impact of celebrity advertising in terms of social effects of advertising. The sponsoring Company is the underlying source of any advertising message, but the individual models depicted in the advertising serve as the more visible communicator in many cases. The most thoroughly studiedsource quality is credibility. Research conducted by social psychologists over the past 30 years demonstrates that a source perceived as highly credible is morepersuasive than a low credibility sender (Hovland and Weiss, 1951; McGuire, 1969; Hass, 1981). The sources that companies use to present their advertising message typically attempts to project a credible image in terms of competence, trustworthiness or dynamism. Celebrity endorsers are considered to be highly dynamic,with attractive and engaging personal qualities. Audience may also trust the advice given by some famous person, and in certain cases, celebrities may even beperceived as competent to discuss the product. Friedman, Termini and Washington

cite a 1975 study showing that celebrities are featured in 155 of prime-time TVcommercials. A later survey reported that this proportion was up to 20% (Advertising Age, 1978). The most widely used celebrities are


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sports figures, actors or other types of entertainers. There are several reasonswhy a famous endorser may be influential: They attract attention to the advertisement in the cluttered stream of messages They are perceived as being more entertaining They are seen as trustworthy because of apparent lack of self-interest. The final element is due to the wide-spread attribution that major stars do notreally work for the endorsement fee, but are motivated by genuine affection forthe product (Kamen et al, 1975). Despite the use of famous endorsers, there islittle published evidence regarding effectiveness. In one experiment, an advertisement for a fictitious brand of Sangria wine featured an endorsement attributedto either a celebrity (actor - Al Pacino), a professional expert, the Company President, a typical consumer and no source (Friedman, Termini and Washington, 1977). College students 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. While the 'no-source' control group had a purchase intention rating of 2.7, the subjects exposed to the actor scored 3.9. Believability was rated 2.8 by control subjects versus 4.1 by those seeing the celebrity endorsement. For taste, the baselines of 4.0 compares to the celebrity group score of 5.6. None of the other three endorsers were as influential asthe celebrated person Brand Image Formation & Brand Preference Having a congruent image between the brand and celebrity does not guarantee any positive effecton consumers' brand preferences. The fundamental question is - what a brand image really does to consumers? Baran and Blasko explained, "Since most products aren't special, most advertising does all that so-called image stuff... There's noinformation about the product, there's only information about the kind of people

who


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might be inclined to use the product." (p.13). This view is echoed by Feldwick (1991) who has suggested that the subjective experience of using a brand can be different from the subjective experience of using an identical product without the brand reassurance. In the case of using celebrity advertising to build brand image, the effects are examined with a social psychological framework. Before wecan scrutinize the effects of celebrity endorsement on the overall brand, we have to ferret the implicit nuances that act as sources of strong brand images or values: Experience of Use: This encapsulates familiarity and proven reliability.User Associations: Brands acquire images from the type of people who are seen using them. Images of prestige or success are imbibed when brands are associated with glamorous personalities. Belief in Efficiency: Ranking from consumer associations, newspaper editorials, etc. Brand Appearance: Design of brand offers cluesto quality and affects preferences. Manufacturers Name & Reputation: A prominentbrand name (Sony, Kelloggs, Bajaj, Tata) transfers positive associations. The celebritys role is the most explicit and profound in incarnating user associationsamong the above mentioned points. To comprehend this, let us analyze the multiplier effect formula for a successful brand: S=P* D*AV -- the multiplier effect Where S is a Successful Brand P is an Effective Product D is Distinctive IdentityAV is Added Values


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The realm of the celebritys impact is confined to bestow a distinctive identity and provide AV to the brand; the celebrity does not have the power to improve ordebilitate the efficiency and features of the core product. Thus, we are gradually approaching an evident proposition claiming, "The health of a brand can definitely be improved up to some extent by celebrity endorsement. But one has to remember that endorsing a celebrity is a means to an end and not an end in itself."An appropriately used celebrity can prove to be a massively powerful tool thatmagnifies the effects of a campaign. But the aura of cautiousness should alwaysbe there. The fact to be emphasised is that celebrities alone do not guarantee success, as consumers nowadays understand advertising, know what advertising is,and how it works. People realize that celebrities are being paid a lot of moneyfor endorsements and this knowledge leads them to cynicism about celebrity endorsements.

Automobile marketing in India:The competitive nature of the automobile industry has prompted the companies totake up new and innovative marketing strategies to thwart the competition. The Bsegment of cars is the segment which sees maximum competition as the consumer has a number of models to choose from and it's the volumes which drive the margins. All the companies as a part of their marketing strategy offers a range of vehicles in all the segment to make sure that the customer is driving one of theirvehicles only. Advertisements on the Audio visual medium are a rage as it givesthe car makers an opportunity to flaunt their cars. Flashy cars can be demonstrated on television but when it comes to the finer prints of the cars, print and o

nline media comes to the rescue. The online medium offers a greater flexibilityto the car companies since they come with a lot of interactive features like demonstrating the interiors of the car with its salient features. The print mediumon the other hand provides an opportunity to the car makers to explain the function of a car in detail. Celebrity endorsements and testimonial advertisements have come a long way and they are also doing their bit to sell the cars. Super star Shahrukh Khan has been associated


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with Hyundai Motor Company for a long time and he comes regularly on televisionto promote the Santro car. Similarly Ford has roped in Junior Bachan for the promotion of the latest offering from the company Ford Fiesta. On a similar note Saif Ali Khan and Rani Mukherjee is shown chasing each other with a Chevrolet aveo. Aamir Khan who is considered to be one of the most talented actors in the industry is frequently seen changing roles on screen to promote the Toyota Innova, acar which is generations ahead of its predecessor Toyota Qualis. Cricketers haven't been left behind in the race of promoting cars; Fiat Palio had received a great thrust when the promotion of the car was taken up by the batting maestro Sachin Tendulkar.In addition to the publicity and advertisement which is done by the companies there are certain innovative strategies which are taken up by the companies to beat the competition from time to time. 1.1.2Evolution of subject: The celebrities get huge amount of money to endorse the product which actually creats recall-value for the product like Coca Cola Aamir Khan Tag Heuer Shahrukh Khan Cadbury chocolate Amitabh Bachan The adding up of any celebrity with any brand may not always increase the sales volume but if somehow the image of the product damaged, celebrity endorsing helps in recovering the image. Like when Cadbury Indias reputation as a safe chocolate was almost gone due to the worm controversy, they used Amitabh Bachan in a commercial assuring the audience about the quality of the Cadbury. Similarly when Pepsi & Coke was infected by the Pesticidescontroversy, Pepsi used both SRK & Sachin Tendulkar for damage control & coke used Aamir Khan for image recovery. Not all products go with the image of all celebrity. It depends on the matching of attributes between the product & the celebrity. In the age of Sunil Gavaskar & Kapil Dev, Gavaskars attributes matched with

the products which were being used by the


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higher society people & Kapil devs attributes matched with products that were forcommon man. This means Gavaskar was much trustworthy for the advertisement of pen & cans and Kapil Dev had gone for shaving cream & bicycles. Kapils advertisement of Palmolive Ka Jawab nahi in a slightly hariyanvi style is still a legend among the Indian advertisements. Sachin Tendulkar is the first celebrity in Indiawhose mass appeal is so high that he can endorse product for any section of thesociety. The filmstars before year 2000 has limited endorsement and didnt explorethe advertising market of India but post 2000 the scenario has changed.AmitabhBachan after KBC got huge popularity among the masses & his popularity is beingused by various products from Reid & Taylor to Parker. But during his hay day asa superstar in the 80s, he never endorsed anything. Another success story is SRKwho is currently endorsing more than 35 products & earned more money from endorsement than his last 2 super hit films Chak DE INDIA & OSO. The cricketers are also not in the backyard. After wining the T-20 World Cup Indian cricket playersalso got few numbers of endorsements Dhoni, Yuvraj & Zaheer Khan grabbed few endorsements but in terms of numbers they are much less than the actors. With the change in strategy of PepsiCo India to promote their Youngistaan campaign they didntrenew their contract with players like Sachin and Sourav. Instead they have taken rising actors like Ranbir Kapoor and Deepika Padukone to promote their product. This incident also indicates that the cricketers are loosing their endorsed products to the filmstars. One exception is Sania mirza, in spite of all controversies, off-form and injuries she is able to survive in the advertisement world.Apart from Big B, SRK and Aamir Khan some other stars also make their own mark in the endorsement market like Hrithik Roshan, Saif Ali Khan, Kareena Kapoor, Pri

yanka Chopra and Katrina Kaif. The problem in the endorsement market is that here glamour plays a big role. That is why Abhinav Bindra, the only Indian to win aGold Medal in the Olympics gets only Samsung as the only product to endorse whereas filmstars gets offers from various companies to endorse their products. Brand V/s Celebrity Sometimes the celebrity is more highlighted than the products,making no recall value of the product. When Rahul Dravid advertised for Castrol,the brand gets overshadowed by


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the celebrity & that is also a wrong choice of celebrity. Dravid is never famousfor racing & when he promotes the product, if gives a wrong signal to the customers. The product can use Narain Karthikeyan to endorse it which will give somereliability to the product. Some success story Cadbury India used Amitah Bachannot only to recover their image from worm controversy but also to establish itself as the leading company in the Indian chocolate market. Aamir Khans ad campaignThanda Matlab Cocacola was also a huge hit. Not only that the company uses the superstars to come out from the pesticides controversy. Dabur brings in Amitabh Bachan in the stagnant chawanprash market which brings in boost in market and helps Dabur to remain the market leader. The Lux Story The Lux Soap in its 75 yrs journey as a product always used a Film Celebrity to promote the product with themost catchy lines Lux meri Khubsurti Ka raaj. They used a huge number of celebrities from the beginning to promote their product & in their 75 years celebration advertisement campaign; they used SRK as the main endorser who has said the famous Lux mera Khubsurti ka raaj along with Hema Malini, Sridevi & Kareena Kapoor. That is the first time a male celebrity endorsed a female product in India. Some Controversies When SRK promoted Emamis Fair & Handsome cream. It was highly criticized as saying that if a star with SRKs stature promote whiteness cream then actually we are advocating for racism saying black is bad & white is gold. And how SRK could can endorse such products as there will be a huge impact among the masses regarding the skin colors. A person must be judged by his/her qualities & notby his/her skin color. But what we basically forgot that stars get money to endorse products & we shouldnt eye washed by the advertisement & there is no point incriticizing a celebrity for endorsing product like Fair & Handsome. Shilpa Shet

ty & Romanov Vodka.


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Shilpa Shetty also hardly criticized for promoting alcohol. As being a celebrityshe must be a responsible citizen & a responsible citizen should never promotealcohol. Celebrity branding is all right as long as the celebrity conducts himself in a good manner but if something wrong happens it will affect the image of the product also. When Salman Khan got warrant for killing endangered dear ThumbsUp has no option but to replace him. So the product and the celebrity remain goodas long as both of them remain individually good. The main problem of celebritybranding is that when a particular product is known to the common people with the effect of the celebrity, it is very difficult to separate the product from the star. Like Coca-Cola - Aamir Khan, Cadbury- Amitabh Bachan, Santro-SRK. Now, if any one of the company want to change their endorser they have to redesign theproduct to let out their product from the shadow of the old campaign. In case of celebrity marketing another problem also arise, that no separate brand value grows up for the product unless and until the product is extraordinary. The product is known in the name of the celebrity. Sometimes if the attributes of the celebrity doesnt matches with the product, it also gives a negative attribute to theproduct endorsed. Like in a Survey study it is found that people locates Amitabh Bachan with Asian Paints the most but in reality Amitabh endorsed Nerolac paints and Nerolacs biggest competitor is Asian paints. So there are certain positiveas well as negative points in celebrity branding in India. As a producer of theproduct the company always wants to minimize the negative sides of the celebrity endorsement and maximize the positive impact of the celebrity endorsement. This clearly raises a question what impact celebrity endorsement have on people incase of automobiles and whether it acts as a source of brand-building?

1.2.1 Objectives of study:The objectives of the study are as follows: To identify the influence of celebrity endorsement on consumer buying behavior. To study celebrity endorsement as asource of brand-building. To find which type of celebrity persona is more effective.


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1.2.2 Need of the study:After going through various sources like magazines, newspapers, websites I foundthat lot of research work has undertaken by researcher regarding impact of celebrity endorsement. But there was a gap in the research regarding whether celebrity endorsement act as a source of brand-building. So there is a need to discoverthis fact. So I decided to work on this particular aspect.

1.2.3 Scope of the study:As due to time constraint it is very difficult to cover the entire sectors so Idecided to cover automobile sector. I am covering automobile sector as whole andnot concentrating on any particular category. The study is limited to JalandharCity only.

1.2.4 Research Methodology:Research Design: A research design is an arrangement of conditions for collection and analysis of Data in a manner that aims to combine relevance to the research purpose with Economy in procedure. It constitutes the blueprint for collection, measurement and analysis of data. My research design will be exploratory research design. Data Sources: In dealing with any real life problem it is often found that data at hand are inadequate, and hence, it becomes necessary to collect data that are appropriate. The researcher can collect data either through primarysource or secondary source. a) Primary data: These are those data which are collected afresh and for the first time, and thus happen to be original in character. I will be using the structured questioners. b) Secondary data: These are thos

e which have already been collected by someone else and which have already beenpassed through the statistical process. I will collect it from the sources likeinternet, published data etc.


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Population of the study Youth (Male) of Jalandhar will be included in population. Sampling Size: It is the total number of respondents targeted for collecting the data for the research. Sample size of 100 persons will be taken for this research. Sampling Technique: Random sampling technique will be used in this research project. Sampling Frame: Frame is the list of respondents. DATA PROCESSING Daily data will be entered into MS-Excel sheets. After the exhaustion of the specified geographical area this data will be analyzed using simple graphical and tabulation techniques. The data sheets mentioned here will be attached in the annexure of the report. Analytical Tools After collection of data another work necessary for any data collector is to correctly analysis that data. So statistical tolls helps us to correctly analysis the data .As I will using here the software named SPSS for analysis of the data XLSTAT. I will use following statistical tools: Hypothesis Testing Chi-square test will be used when the set of observed frequencies obtained after experimentation have to be supported by hypothesis or theory. The test is known as X2test of goodness of fit and is used to test if the deviation between observation


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(experiment) and theory may be attributed to chance (fluctuations of sampling).2also enables us to explain whether or not two attributes are associated or related to each other. To test the goodness of fit : It helps to test goodness of fitby using null and alternate hypothesis. STATISTICAL TOOLS TO BE USED 1. Chi Square Test Procedure: (1) Set up the null hypothesis that there is no significant difference between the observed and expected value. (2) We compute the value of CHI- square by using the formula CHI-square = 2= (( Oi- Ei)2/Ei) O- Observed valueE- Expected value Degree of freedoms=(R-1)(C-1) Level of significance=5


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Chapter-2


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2.1 History of Automobile Industry:The automobile as we know it was not invented in a single day by a single inventor. The history of the automobile reflects an evolution that took place worldwide. It is estimated that over 100,000 patents created the modern automobile. However, we can point to the many firsts that occurred along the way. Starting withthe first theoretical plans for a motor vehicle that had been drawn up by both Leonardo da Vinci and Isaac Newton. In 1769, the very first self-propelled road vehicle was a military tractor invented by French engineer and mechanic, NicolasJoseph Cugnot (1725 - 1804). Cugnot used a steam engine to power his vehicle, built under his instructions at the Paris Arsenal by mechanic Brezin. It was usedby the French Army to haul artillery at a whopping speed of 2 1/2 mph on only three wheels. The vehicle had to stop every ten to fifteen minutes to build up steam power. The steam engine and boiler were separate from the rest of the vehicleand placed in the front (see engraving above). The following year (1770), Cugnot built a steam-powered tricycle that carried four passengers. In 1771, Cugnot drove one of his road vehicles into a stone wall, making Cugnot the first personto get into a motor vehicle accident. This was the beginning of bad luck for theinventor. After one of Cugnot's patrons died and the other was exiled, the money for Cugnot's road vehicle experiments ended. Steam engines powered cars by burning fuel that heated water in a boiler, creating steam that expanded and pushedpistons that turned the crankshaft, which then turned the wheels. During the early history of self-propelled vehicles - both road and railroad vehicles were being developed with steam engines. (Cugnot also designed two steam locomotives with engines that never worked well.) Steam engines added so much weight to a vehi

cle that they proved a poor design for road vehicles; however, steam engines were very successfully used in locomotives. Historians, who accept that early steampowered road vehicles were automobiles, feel that Nicolas Cugnot was the inventor of the first automobile.


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The automotive industry has certain trends it has to follow, just like fashion designers and musical composers. In times of recession and decreasing sales thereis less room to take chances and manufacturers are prone to follow the common pattern as a safer bet rather than releasing a controversial product or idea thatmight or might not be successful. However throughout the automotive industry'shistory, great innovators have "boldly gone where no man has gone before" to setnew trends which have dynamically altered the industry as a whole. 1880's & early 1900's

About hundred years ago -The first motor car was imported -Import duty on vehicles was introduced. -Indian Great Royal Road (Predecessor of the Grand Trunk Road) was conceived.

First car brought in India by a princely ruler in 1898. Simpson & Co establishedin 1840. -They were the first to build a steam car and a steam bus, to attemptmotor car manufacture, to build and operate petrol driven passenger service andto import American Chassis in India.

Railways first came to India in 1850's In 1865 Col. Rookes Crompton introduced p

ublic transport wagons strapped to and pulled by imported steam road rollers called streamers. The maximum speed of these buses was 33 kms/hr.

From 1888 Motors Spirit attracted a substantial import duty. In 1919 at the endof the war, a large number of military vehicles came on the roads. In 1928 assembly of CKD Trucks and Cars was started by the wholly owned Indian subsidiary ofAmerican General Motors in Bombay and in 1930-31 by Canadian Ford Motors in Madras, Bombay and Calcutta In 1935 the proposals of Sir M Visvesvaraya to set up anAutomobile Industry were disallowed.

1942 Hindustan Motors Ltd incorporated and their first vehicle was made in 1950.


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In 1944 Premier Automobiles Ltd incorporated and in 1947 their first vehicle wasproduced. In 1947 the Government of Bombay accepted a scheme of Bajaj Auto to replace the cycle rickshaw by the auto and assembly started in a couple of yearsunder a license from Piaggio. Manufacturing Programme for the auto and scooter was submitted in 1953 to the Tariff Commission and approved by the Government in1959.

In 1953 the Government decreed that only firms having a manufacturing programmeshould be allowed to operate and mere assemblers of imported CKD units be askedto terminate operations in three years.

Only seven firms namely Hindustan Motors Limited, Automobile Products of India Limited, Ashok Leyland Limited, Standard Motors Products of India Limited., Premier Automobiles Limited, Mahindra & Mahindra and TELCO received approval. M&M wasmanufacturing jeeps. Few more companies came up later.

Government continued with its protectionism policies towards the industry. In 1956, Bajaj Tempo Ltd entered the Indian market with a programme of manufacturingCommercial Vehicles, and Simpson for making engines.

1960's

In sixties 2 and 3 Wheeler segment established a foothold in the industry. Escorts and Ideal Jawa entered the field in the beginning of sixties. Association ofIndian Automobile Manufacturers formally established in 1960. Standard Motors Products of India Ltd. moved over to the manufacture of Light Commercial Vehicles

in 1965.

1970's

Major factors affecting the industry's structure were the implementation of MRTPAct, FERA and Oil Shocks of 1973 and 1979.


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During this decade there was not much change in the four wheeler industry exceptthe entry of Sipani Automobiles in the small car market. Oil Shock of 1973 quickened the process of dieselization of the Commercial Vehicle segment. Three other companies, namely, Kirloskar Ghatge Patil Auto Ltd, Indian Automotive Ltd andSen & Pandit Engg products Ltd entered the market during 1971-75. They ultimately withdrew in early eighties.

During the seventies the economy was in bad shape. This and many specific problems affected the Automobile Industry adversely.

1980's - The period of liberalized policy and intense competition

First phase of liberalisation announced. Unfair practices of monopoly, oligopolyetc slowly disappeared. Liberalisation of the protectionism policies of the Government. Lots of new Foreign Collaborations came up in the eighties. Many compan

ies went in for Japanese collaborations. Hindustan Motors Ltd. in collaborationwith Isuzu of Japan introduced the Isuzu truck in early eighties. ALL entered into collaboration with Leyland Vehicles Ltd. for development of integral buses and with Hino Motors of Japan for the manufacture of W Series of Engines.

TELCO after the expiry of its contract with Daimler Benz, indigenously improvedthe same Benz model and introduced it in the market. Government approved four ne

w firms in the LCV market, namely, DCM, Eicher, Swaraj and Allwyn. They had collaborations with Japanese companies namely, Toyota, Mitsubishi, Mazda and Nissanrespectively.

In 1983 Maruti Udyog Ltd was started in collaboration with Suzuki, a Japanese firm.


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Other three Car manufacturers namely, Hindustan Motors Ltd., Premier AutomobilesLtd., Standard Motor Production of India Ltd. also introduced new models in themarket.

At the time there were five Passenger Car manufacturers in India - Maruti UdyogLtd., Hindustan Motors Ltd., Premier Automobiles Ltd., Standard Motor Productionof India Ltd. and Sipani Automobiles.

Ashok Leyland Ltd. and TELCO were strong players in the Commercial Vehicles sector. In 1983-84 Bajaj Tempo Ltd. entered into a collaboration with Daimler-Benz of Germany for manufacture of LCVs. Important policy changes like relaxation in MRTP and FERA, delicensing of some ancillary products, broad banding of the products, modifications in licensing policy, concessions to private sector (both Indian and Foreign) and foreign collaboration policy etc. resulted in higher growth/ better performance of the industry than in the earlier decades.

1990's

Mass Emission Norms were introduced for in 1991 for Petrol Vehicles and in 1992for Diesel Vehicles.

In 1991 new Industrial Policy was announced. It was the death of the License Rajand the Automobile Industry was allowed to expand.

Further tightening of Emission norms was done in 1996. In 1997 National HighwayPolicy has been announced which will have a positive impact on the Automobile Industry. The Indian Automobile market in general and Passenger Cars in particularhave witnessed liberalisation. Many multinationals like Daewoo, Peugeot, General Motors, Mercedes-Benz, Honda, Hyundai, Toyota, Volvo and Fiat entered the market.


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Various companies are coming up with state-of-art models of vehicles. TELCO hasdiversified in Passenger Car segment with Indica. Despite the adverse trend in the growth of the industry, it is resolutely trying to

meet the challenges. Various issues of critical importance to the industry are being dealt with forcefully.

2.1.1 Growth and Landmarks of automobile industry in India :The automobile industry, one of the core sectors, has undergone metamorphosis with the advent of new business and manufacturing practices in the light of liberalization and globalization. The sector seems to be optimistic of posting strongsales in the next couple of years in view of a reasonable surge in demand. The Indian automobile market is gearing towards having international standards to meet the needs of the global automobile giants and become a global hub. Players arestrategizing to consolidate their position and gradually increase market penetration with the launch of new models, targeting different segments. Since the sector is price driven, huge investment is envisaged to remain competitive throughcost advantage, for which indigenization is highly important. The product becomes dearer if it is manufactured using imported parts. IT in the automobile sectorplays a crucial role.. Some players are working towards development of efficient production systems that control the entire production process with high precision and accuracy. Such systems working on real time operating systems allow effi

cient control of different parts of manufacturing and production. It is essential to leverage skills of different engineering disciplines to build these kinds of integrated systems. Analysts foresee high scope in the electronics for auto sector and expect the retailing of such electronics products to contribute a majorchunk of future revenues. The government is increasing the research and development (R&D) fund for the automobile industry over and above the Rs 1400 crores earmarked for eight years. All laboratories in the country researching on automobile technology, such as BHEL which is developing cell technology as alternative fuel, have also been brought together through the setting up of a national R & Dworking group. The group is working out a plan to link all major


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laboratories across the country to give a thrust to automotive research. Indianautomobile sector being a driver of product and process technologies, and has become a excellent manufacturing base for global players, because of its high machine tool capabilities, extremely capable component industry, most of the raw material locally produced, low cost manufacturing base and highly skilled manpowerNot only a large number of world manufacturers have set up production bases in India but also a large number of foreign companies are collaborating with the auto component suppliers and vendors. Indian Automobile Components Industry has been making rapid strides towards achievement of world-class Quality Systems by imbibing ISO 9000/QS 9000 Quality Systems whereby the Indian Automotive industry has become more competitive in the export market due to its technological and quality advances, so much so that in quality conscious markets such as Europe and America, it is emerging as a major player, based on its performance. India today exports: Engine and engine parts, electrical parts, drive transmission & steeringpats, suspension & braking parts among others. The sector is striding inroads into the rural middle class after its inroads into the urban markets and rural rich. It is trying to bring in varying products to suit requirements of differentclass segments of customers. States like Rajasthan, Uttar Pradesh, Maharashtra,Andhra Pradesh and West Bengal are vying to woo global players with proposals including heavy tax exemptions and to create a more investor friendly regime, eachstate is proposing to provide all regulatory clearances at express speed. The Government should promote Research & Development in automotive industry by strengthening the efforts of industry in this direction by providing suitable fiscal and financial incentives. The current policy allows Weighted Tax Deduction under

I.T. Act, 1961 for sponsored research and in-house R&D expenditure. This will beimproved further for research and development activities of vehicle and component manufacturers from the current level of 125%. In addition, Vehicle manufacturers will also be considered for a rebate on the applicable excise duty for every1% of the gross turnover of the company expended


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during the year on Research and Development carried either in-house under a distinct dedicated entity, faculty or division within the company assessed as competent and qualified for the purpose or in any other R&D institution in the country. This would include R & D leading to adoption of low emission technologies andenergy saving devices. Government will encourage setting up of independent autodesign firms by providing them tax breaks, concessional duty on plant/equipmentimports and granting automatic approvalAllocations to automotive cess fund created for R&D of automotive industry shall be increased and the scope of activitiescovered under it enlarged.

2.1.2 Sturcture of Indian automobile sector and some facts: Structure: The Indian automobile industry can be broadly classified into: 2 /3 Wheelsenger Cars Commercial Vehicles (LCV/HCV/MCV) UV (Utility vehicles) Tractors Themodels in the car market can be fitted to different segments as given below:

Category Economy segment (upto Rs 0.25mn) Mid-size segment (Rs 0.25-0.45 mn) Luxury car segment (Rs 0.45- 1mn)

Models Maruti Omni, Maruti 800 etc. Fiat Uno, Hyundai Santro, tata Indica, Maruti Alto etc. Tata Indigo, Honda City, Mitsibushi Lancer, Ford Ikon, Opel


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Astra, Hyundai Accent & others Super luxury segment (above Rs 1mn) Mercedes Benz& other imported models

The economy segment has a very large foothold over the Indian automobile marketas compared to the mid-size and luxury segment. Segment Economy Market Share 90.2 9.8

Mid-size and luxury Source: SIAM/ Auto Car India

Increased urbanisation, low pricing policies, improvement in products and technology have fuelled demand for 4-wheelers. The markets are clearly segmented between economy models and premium models. The easy availability of finance and increased levels of disposable incomes has led to higher demand for premium models. Rural areas have also become an exciting market to cater to. The growth of the economy has also resulted in a shift in consumer preferences in each of the segment. Gradual shift can be seen in buyers from mopeds to economy scooters, from economy scooters to premium and from premium to motorcycles.

Figure -Structure of Passenger Vehicle Market (India)


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The passenger car segment has seen rapid growth on the back of rise in disposable income, increased availability of consumer finance, and reduction in excise and customs duties. Post-1991, this segment has seen maximum foreign investment. There is a clear segmentation of passenger cars based on price and size. While the lower and medium range cars (Maruti, Ford, Cielo) have been moderately successful, luxury cars such as Mercedes have found the going tough.

The CV segment is directly linked to industrial production and foreign trade andis therefore subject to cyclical fluctuations of the economy. The demand for CVs is related to growth in movement of goods transported and freight rate levels,both of which are linked to level of production.

Demand for utility vehicles and tractors come from rural India. These vehicles have witnessed steady demand growth over the past few years due to successive monsoons, better procurement prices, improved irrigation facilities, and availability of finance.


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A strong in-house R&D capability allows a manufacturer to develop and introduceproducts at lower prices, thus saving costs of importing technology. However, Indian companies spend very little on R&D.

Availability of quality components is another factor that determines smooth production without bottlenecks. High rejection rate of auto components has promptedseveral global majors like Ford, to get their international suppliers

2.1.3 The Landmark of Indian automobile sector:1928- The first imported car was seen on Indian roads 1942- Hindustan Motors incorporated 1944- Premier automobiles started 1948- First car manufactured in India 1953- The Government of India decreed that only those firms which have a manufacturing program should be allowed to operate 1955- Only seven firms, namely, Hindustan Motors Limited, Automobile Products of India Limited, Ashok Leyland Limited, Standard Motors Products of India Limited. Premier Automobiles Limited, Mahindra & Mahindra and TELCO received approval. 1960 - 1970 - The two, three wheeler industries established a foothold in the Indian scenario. 1970 - 1980 - Not much change was witnessed during this period. The major factors affecting the industry were the implementation of the MRTP Act (Monopolies and Restrictive TradePractices Act), FERA (Foreign Exchange Regulation Act) and the Oil Shock of 1973

and 1979. 1980 - 1990 - The first phase of liberalization was announced by theGovt. -With the liberalization of the Government's protectionist policies, the advantages hitherto enjoyed by the Indian car manufacturers like monopoly, oligopoly, slowly began to disappear.


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1991 - Under the Govt.'s new National Industrial Policy, the license raj was dispensed with, and the automobile industries were allowed to expand freely. 1993 -With the winds of liberalization sweeping the Indian car market, many multinationals like Daewoo, Peugeot, general Motors, Mercedes-Benz and Fiat came into theIndian car market. 1997 - The National Highway Policy was announced which willhopefully have a positive impact on the automobile industry. The Government alsolaid down the emission standards to be met by car manufacturers in India in thecoming millennium. There were two successively stringent emission levels to bemet by April 2000 and April 2005, respectively. These norms were benchmarked onthe basis of those already adopted in Europe, hence the names Euro I (equivalentto India 2000) and the Indian equivalent of Euro II. 1999 - The Honble Supreme Court passed an order directing all car manufacturers to comply with Euro I emission norms (India 2000 norms) by the 1st of May, 1999 in National Capital Region(NCR) of Delhi. The deadline was later extended to 1st June, 1999 2004 - Tata Motors becomes the first Indian auto company to be listed on the New York Stock Exchange 2008- Tata Motor becomes the first auto company to produce worlds smallestcar Nano.

2.1.4 Major player in Indian automobile sector:Jagdish Khattar. Y.S. Kim. Ratan Tata. S.G. Awasthi. The four men are peers. Each has unequivocally established himself as one of the winners in the first roundof the car wars. Between them, they control almost 80% of the Rs 30,500-crore Indian automobile market. The battle royale in the Indian car market has enteredthe next phase. As the dust and excitement of the dozens of new models introduce

d in the past one year settles down, the winners have pulled way ahead of the also-rans. One old assumption has been vindicated -- that over 80% of the Indian car market is still confined to the small, sub-Rs 4 lakh models. And those mid-size and bigger models can only provide the icing on the cake, not the cake itselfto any manufacturer.


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Maruti found out that price is no longer the most important factor in winning car battles. Daewoo's Awasthi admits candidly that he learnt precisely the opposite lesson -- that price does matter. Kim of Hyundai found out the hard way that you could get your pricing and value equation just right and still land up with egg on your face if you tried to cut corners in the technology game. Ratan Tata learnt that providing an internationally designed car with a great value proposition didn't get you far if you couldn't provide global quality standards. Both the Indica and the Matiz had to upgrade their engines in less than one year afterlaunch, the Honda City had to bring in both a new body and a more powerful engine, and Hyundai had to start offering a new variant with the power steering option barely a year after it hit the market. From now on, the battle is expected toget more vicious. In 1999-2000, the car market bounced back from the recession by showing a 55.83% growth! But now, no one expects the market to grow by more than 10-15% per annum. The really big volume gains will come from wresting marketshare away from rivals rather than because the market itself is growing exponentially. These are the major players in Indian automobile sector: Mar. Hyundai: Daewoo Motors India Telco Hindustan Motors Mitsubishi Motors Ashok Leyland Swaraj Mazda Mahindra & Mahindra Tata Motors


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Chapter -3


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1. Philip A. Stroke (2009): The use of celebrity endorsement as a part of marketing communication strategy has been gaining popularity over the past years. Monies paid out by firms on endorsement contracts are estimated to be 10% to 25% oftotal advertising expenditures. However, empirical evidences on the effect of endorsement announcements on the stock prices performance of frims has been mixedat best. We analyze the share market perception of celebrity endorsement using aunique sample of 102 announcements. Stock returns and trading volumes depends upon the level of press attention. Endorsements that appear in a major newspapershow higher average return and larger trading volume changes at announcement date than those announced on the corporate website only. 2. Subhadip Roy (2007): This study raises three questions and attempts to provide tentative explanations for them. The first two questions relate to locating, in the consumer's perceptual space, the relative position of Indian celebrities and brands on a set of personality attributes. The third question relates to determining the fit between the celebrity and the brands endorsed by her/him. The results suggest that consumers differentially rank both celebrities and brands. Specifically, Amitabh Bachchan ranks high on five personality attributes, and brands such as Pepsi and Cokerank high on four personality attributes. The study further shows that althoughcelebrities may endorse several brands, their personality does not fit well withthe personality of the brand they endorse. Evidence offered here supports the basic assumptions of the celebrityproduct congruence model. 3. Shimp(2007): A recent estimate indicates that almost 20 percent of all advertisements worldwide usecelebrity spokespersons. The general belief among advertisers is that messagesdelivered by celebrities provide a higher degree of appeal, attention, and possi

bly message recall than those delivered by non-celebrities. Marketers also claimthat celebrities affect the credibility of the claims made, increase the memorability of the message, and may provide a positive effect that could be generalized to the brand. 4. Goldsmith et al.(2002): They assessed the impact of endorserand corporate credibility on attitude toward-the-ad, toward the-brand and purchase intention. 152 adults consumers were surveyed who viewed a fictitious advertisement for Mobil Oil company. They rated the credibility of the ads endorser, thecredibility of the company


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and attitude towards the-ad, attitude towards brand and purchase intention. It was observed that endorser credibility had its strongest impact on advertisement while corporate credibility has its strongest impact on brand. 5. Solomon et al.(2002) also talk about celebrities being most effective in situations involvinghigh social risk, where the buyer is aware of the impression peers will have ofhim or her. According to him, a celebrity endorser is relatively more effectivefor products high in psychological or social risk, involving elements as good taste, selfimage, and opinion of others, compared to a normal spokesperson. Expert opinions were considered most useful when the product endorsed was perceived to involve high, financial, performance, or physical risk. 6. Kambitsis et al., 2002) Celebrity endorsement is a billion dollar industry today with companies signing deals with celebrities hoping that they can help them stand out from the clutter and give them a unique and relevant position in the mind of the consumer. Thereasons for using celebrity endorsement involves its potential to create awareness, positive feelings towards their advertising and brand. Advertisement featuring celebrity endorsement is often also perceived to be entertaining. 7. Pettitt(2000) : Advertising is heavily used in process of personality creation. This follow logically from the fact that personalities are particularly important forbrand building. They provide unique associations with the brand and these associations acts as a stimulus for the customer to link their personality with the brand. 8. McGuire et al.(1999): Expertise is the perceived knowledge that the source possesses, while trustworthiness is the degree to which the source is considered to be honest, ethical and believable. Both components are positively relatedto credibility, but the influence of one component can offset the effects of th

e other. For example, a spokesperson that is viewed as knowledgeable will be ineffective if he or she is perceived as lacking trustworthiness. 9. Henry(1999): Henry indicates that good PSAs are ones that are empathetic, meaning they build trust with their audience or a sense of caring about the problem. He goes on to saythat a good radio PSA is one that creates a mental picture of the subject withsound effects and a strong, credible spokesperson. In another article, he mentions that more than


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11,000 radio stations in the USA, and around two-thirds of them use PSAs. It isalso in accordance with Bonk et al. (1999). 10. Dwane Hal Dean (1999): He studied the effects of 3 extrinsic cues viz. Third party endorsement, event sponsorship and brand popularity on brand/manufacturer evaluation. It was observed that endorsement significantly affected only product variables (quality and uniqueness)and one image variable (esteem). The third party endorsement hence may be preceived as a signal of product quality. 11. Sheth et al. (1999) argue that perception is shaped by the stimulus characteristics (objects, brands, stories etc.), the context in which it is delivered (social, cultural), and the customer characteristics (knowledge, experience, expertise). It is within these stages that a consumer will either recognize a fit between a celebrity and a product/brand, or reject this connection on different grounds. Memory is structured as an associative network. When this happen the brand and the celebrity become parts of each others association set . 12. Till and Shimp(1998): Other research suggests that celebrity endorsements might vary in effectiveness depending on other factors likethe fit between the celebrity and the advertised product. 13. Tellis (1998) arguesthat consumers in a high-involvement situation might actually be offended by the use of celebrity to endorse the brand. He also suggests that when there seem to be perceived high differences among competing brands, the consumer will perceive it as a high-involvement situation and put extra emphasis on information about the product more than being influenced by celebrity endorsers. 14. Lang and Goodwill (1997): PSAs are broadcasted by media outlets in the public interest at no cost to nonprofit organizations. According to them, Public service announcements are a vital tool in generating awareness for critical issues while dispensing

important information for many non-profit organizations. If produced correctly and distributed to the appropriate media outlets, PSAs help educate, inform, and motivate various publics on a variety of topics and issues (PSAs: Do They ReallyWork?).


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They,wrote that PSAs deal with life-and-death issues. They urge us to think aboutpeople with desperate conditions, act to help those in need and support causesthat can change the world. 15. Freiden(1994) :He concluded that celebrities are particularly effective spokespersons because they are viewed as highly trustworthy, believable, persuasive, and likeable. A credible spokesperson is, other things being equal, more effective than a less credible spokesperson. 16. King (1991)argues that a good strategy to build strong brand equity is to create an original metaphor for the brands personalityThey talk about the factors involved in building a brand such as: Presence, Relevance, Differentiate, Credibility, and Imagery. The credibilityfactor especially has been looked at by several researchers incelebrity endorsement The same has presence and also to some extent imagery anddifferentiate. Relevance in this context can be looked at as a result of success in the other areas, as it concerns being perceived as relevant for the consumer. 17. Obanian(1990): developed a source credibility measure that operationalizes credibility as consisting of the underlying dimensions of expertise, trustworthiness and attractiveness. The expertise and trustworthiness dimensions are essentially identical to those identified in previous research and discussed above.However, the attractiveness dimension, unlike previous conceptualizations, is defined as the physical attractiveness of the source to the listener, and to a lesser extent, the emotional attractiveness of the source (Bearden and Netemeyer, 1999, p. 301). The advantage of this conceptualization lies in part in the extensive scale validation procedure undertaken by Ohanian. 18. Friedmen et al.(1976):Using advertisements with celebrities and non-celebrities for a fictitious brand of sangria wine, found that the celebrity version of the advertisement had higher

scores on probable taste, advertising believability, and purchase intention thethree dependent variables. However, the wine was a fictitious brand, and the celebrity simply brought recognition to the name.The paucity of research comparingcelebrity with non-celebrity spokespersons highlights the need for continued investigation into this area. It is important for advertisers to clearly understand both the pros and cons of using such


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individuals to represent their products, causes, or organizations; and ultimately the advertisers must assess the effectiveness of such a message. 19. Triandis(1971): Attractiveness has been conceptualized in terms of similarity, familiarity, and likeability. Similarity refers to the perceived resemblance between thespokesperson and the audience. Familiarity represents the amount of knowledge that the audience has about the spokesperson. Likeability refers to affection forthe spokesperson based on physical appearance, behavior or other personal traits. 20. Hovland et al. (1953): In encoding the message in the context of celebrityendorsement, perhaps the most important decision to be made, besides choosing whether or not to use celebrity endorsers at all, is the choice of celebrity. Much research has been made in this area and several models have been made to explain and assist in the celebrity endorsement selection process.


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Chatpter-4


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Data analysis and interpretation:1.Occupation of respondent:Occupation Business Class Service Class Student Others %tage 25 25 30 20

%tage

20%

25% Business Class Serv ice Class Student

30%

25%

Others

Interpretation: From this pie-chart it is clear that majority of the respondentsare students and rest of the share is occupied by service and business class. 2. Age of the respondent:Age 18-25 26-32 33-39 Above 40 %tage 30 20 30 20


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No. of respondent 35 30 25 20 No. of respondent 15 10 5 0 18-25 26-32 33-39 Above 40

Interpretation: This pie-chart depicts that mostly respondents are young and while rest are above 25 years. 3.Gender of the respondent: Gender Female Male %tage65 35

35% Female Male 65%


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Interpretation: This pie-chart depicts that 65% of the respondents are female and 35% are males.

4.Type of Vehicle: Vehicle Two-wheeler Four-wheeler Both %tage 45 35 20

20% 45% Two-wheeler Four-wheeler Both 35%

Interpretation: This pie-chart depicts that 45% of the people have two-wheeler and 35% of the people have four-wheeler and rest 20% have both two-wheeler and four-wheeler. 5.Factors affecting purchase intention:

Factors Price Opinion-leader celebrity endorser

%tage 20 15 35


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Brand nameFactor

30

20% 30% Price Opinion-leader celebrity endorser 15% 35% Brand name

Interpretation: This pie-chart depicts that 35% of the people consider celebrityendorser while going for the purchase, followed by brand name-with 30%.,opinionleader 15% and 20% people consider price. Brand name usually covers all aspectslike functional aspects viz.mileage,speed etc. As people usually are more interested towards well known brands and if these brands are advertised by famous celebrity it creates an huge impact. 6.Like to see any celebrity endorsing your brand:Preference Yes No Can't say %tage 55 25 20


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20%

Yes No 55% 25% Can't say

Interpretation: This pie-chart clearly indicates that 55% of the respondents want their products to be advertised by celebrities, 25% dont want and 20% of the respondents werent sure. So, this clearly shows how much important these celebrities are in the daily life of common man. 7.Male v/s Female celebrity endorser: HYPOTHESIS TESTING Step1: State Hypothesis: Ho: Female celebrity endorser is more effective than that of male. Ha: Female celebrity endorser isnt more effective than that of male. Step 2: Set the Rejection criteria: DF = 5-1 = 4 At alpha .05 and 4 degrees of freedom, the crtitical value from the chi square distribution table is 9.49 Frequency Observed .


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Preference Strongly Agree Agree Indifferent Disagree Strongly Disagree Column Total

Male 25 05 10 5 10 55

Female 5 15 10 10 5 45 Frequency Expected

Row Total 30 20 20 15 15 100

Preference Strongly Agree Agree Indifferent Disagree Strongly Disagree Column Total Preference Strongly Agree Agree Indifferent Disagree Strongly Disagree Preference Strongly Agree Agree Indifferent Disagree Strongly Disagree

Male 55*30/100=16.5 55*20/100=11 55*20/100=11 55*15/100= 8.25 55*15/100= 8.25 55Male (25-16.5)2/16.5 (5-11)2/11 (10-11)2/11 (5-8.25)2/8.25 (10-8.25)2/8.25 Chi-Square Male 4.38 3.27 0.09 1.28 0.37

Female 45*30/100=13.5 45*20/100= 9.0 45*20/100= 9.0 45*15/100=6.75 45*15/100=6.75 45 -

al

ulation Female

Row Total 30 20 20 15 15 100

(5-13.5)2/13.5 (15-9)2/9 (10-9)2/9 (10-6.75)2/6.75 (5-6.75)2/6.75 Female 5.35 40.11 1.56 0.45


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= 20.85 Interpretation: As the Chi-square test statistics 20.85 exceeds the critical value of 9.49 hence null hypothesis is rejected and hence we reached at the result that our alternative hypothesis is accepted. It is confirmed after the analysis that male celebrity endorser are more effective than that of female celebrity. 8.Celebrity endorser as an effective method of persuasion: Preference Strongly Agree Agree Indifferent Disagree Strongly DisagreeDegree of preference

%age 45 15 10 20 10

10% 20% 45% Strongly Agree Agree Indifferent Disagree Strongly Disagree 10% 15%

Interpretation: This chart depicts that mostly people agree that Celebrity endorsement is an effective tool of persuasion. 45% of people strongly agree that celebrity endorsement is an effective tool of persuasion and 20% of people disagreethat it is one of the tool.


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HYPOTHESIS TESTING Step1: State Hypothesis: Ho: Celebrity endorsement is not aneffective tool of persuasion to facilitate customer to go for purchase. Ha: Celebrity endorsement is an effective tool of persuasion to facilitate customer to go for purchase. Step 2: Set the Rejection criteria: DF = 5-1 = 4 At alpha .05 and 4 degrees of freedom, the critical value from the chi square distribution table is 9.49 Step 3: Compute the Test Statistics: = (O-E)2/E Preference Strongly Agree Agree Indifferent Disagree Strongly Disagree = 41.5 15 10 20 10 20 20 20 20 -5-10 0 -10 25 100 0 100 0.25 5 0 5 Observed 45 Expected 20 O-E 25 (O-E) 625 (O-E)/E31.25 .

Interpretation: As the Chi-square test statistics 41.5 exceeds the critical value of 9.49 hence null hypothesis is rejected and hence we reached at the result that our alternative hypothesis is accepted. Hence it can be concluded that celebrity endorsement is and effective tool of persuasion to facilitate customer to go for purchase.


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9.Celebrity endorsement affects my purchase decision while going for the purchase of automobile products.

Preference Strongly Agree Agree Indifferent Disagree Strongly Disagree

%age 30 15 10 35 10

Degree of Preference

10% 30% Strongly Agree Agree Indifferent 35% 10% 15% Disagree Strongly Disagree

Interpretation: This chart depicts that 45% of the people agree strongly or simply on the fact that their automobile purchase is being affected by celebrity endorsement,10 % of the people remain indifferent and 45% of the people disagree with this fact. HYPOTHESIS TESTING Step1: State Hypothesis: Ho: Celebrity endorsement doesnt affect purchase decision of automobile products. .


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Ha: Celebrity endorsement affects purchase decision of automobile products. Step2: Set the Rejection criteria: DF = 5-1 = 4 At alpha .05 and 4 degrees of freedom, the critical value from the chi square distribution table is 9.49 Step 3: Compute the Test Statistics: = (O-E)2/E Preference Strongly Agree Agree IndifferentDisagree Strongly Disagree = 32.5 15 10 35 10 20 20 20 20 -5 -10 15 -10 25 100 225 100 1.25 5 11.25 5 Observed 30 Expected 20 O-E 10 (O-E) 100 (O-E)/E 10

Interpretation: As the Chi-square test statistics 32.5 exceeds the critical value of 9.49 hence null hypothesis is rejected and hence we reached at the result that our alternative hypothesis is accepted. Hence it can be concluded that celebrity endorsement affects purchase decision of automobile products. 10.Celebritypersona you like most: Celebrity persona Bollywood stars Sports star None of theabove %tage 55 25 20


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Degree of preference

20%

Bollywood stars Sports star 55% 25% None of the above

Interpretation: This pie-chart depicts that majority of people like to see bollywood stars to endorse their brands and 25% of them sports star. While remaining20 % dont want to any celebrity endorsing their brand. HYPOTHESIS TESTING Step1:State Hypothesis: Ho: People like to see bollywood stars endorsing their brand than sports star. .

Ha: People like to see sports stars endorsing automobile products than that of bollywood stars. Step 2: Set the Rejection criteria: DF = 5-1 = 4 At alpha .05 and 4 degrees of freedom, the critical value from the chi square distribution table is 9.49 Step 3: Compute the Test Statistics: = (O-E)2/E


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Celebrity persona Bollywood stars Sports star None

Observed

Expected

O-E

(O-E)

(O-E)/E

55 25

33.3 33.3 33.3

21.7 -8.3 -13.3

470.89 68.89 176.89

14.14 2.06 5.31 = 21.51

of 20

the above

Interpretation: As the Chi-square test statistics 21.51 exceeds the critical value of 9.49 hence null hypothesis is rejected and hence we reached at the resultthat our alternative hypothesis is accepted. Hence it can be concluded that people like to see sports stars endorsing their products rather than bollywood stars. 11. You follow your favorite celebrity while purchasing new automobile every time: Response Every time Rarely Never %tage 40 25 35


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Response

35% 40% Every time Rarely Never

25%

Interpretation: This pie-chart depicts that 40% of people follow their favoritecelebrity every times while going for the purchase of new automobiles. That means frequency is pretty large. On the other hand 25% of the people rarely follow their favorite celebrity. While 35% of the people doesnt follow any celebrity forpurchasing any of the automobile vehicle everytime.

12. Identify the following ads regarding various automobile products: More Car par car The sun-shine car . Why should boy have all the fun?..spondents, 30 were able to identify the celebrity in whole 4 ads, 30 were able to identify 3, 20 were able to identify 2 and 10 were there who identified only 1of


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the ad. 10 people were there who werent able to identify even a single celebrity.Majority of the respondent were quite familiar with Priyanka Chopras Why shouldboy have all the fun? So majority of the respondents were able to recognize the celebrity used in the advertisement so it clearly tells that celebrity endorsement act as source of brand-building.


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Findings: After completing survey I found that: Brand name and celebrity endorser are two factors that people consider before making a purchase intention of automobile vehicle. Maximum number of people wants to see celebrity endorsing theirautomobile vehicles that means they have high involvement with the celebrities. One of the abstract finding of the survey was regarding peoples orientation towards gender biasness. This finding clearly indicated that people like to see malecelebrities endorsing automobiles than that of female celebrities. Most no. ofpeople believe that celebrity endorsement is an effective mean of persuasion i.e. it convey the message clearly to the target audience regarding product offerings and persuade them to go for the purchase. It was found that celebrity endorsement have an impact over the purchase of automobile products. As large no. of people surveyed confirmed this fact.

In country like India were Cricket is a religion and cricketers are worshiped asGod. One of the finding revealed that people admire sports player as better celebrity persona than that of bollywood actor/actress. It was found that while making every new purchase of an automobile most no. of people follow celebrity endorser while rest of them denied this fact. The results of brand recall were astonishing most no. of people were able to recognize the celebrities endorsing the given advertisement. So it showed that celebrity endorsement is a source of celebrity endorsement.


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Chapter-5


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5.1 Summary: Celebrity endorsement is a method employed by marketers as a promotional tool so that people can associate themselves with the product as they associate themselves with the celebrity endorser. Companies spend huge amount of money to rope in such celebrities so as to endorse their brands. They generally determine their effectiveness by measuring ROI. Lot of studies conducted on celebrity endorsement but no one clearly indicated whether it can act as a source of brand-building. So a research was conducted on this particular aspect. It wasnt possible to concentrate this study on the entire sectors so automobile sector was selected. Primary data was collected through structured questionnaire and sampling unit was Jalandhar city. Secondary sources were also used in the beginning soas to gain an insight of the problem. After carrying it was found that male celebrities are better than that of female celebrities. People love to see sportsperson endorsing automobile than that of bollywood stars. It was found that celebrity endorser affects people intention regarding purchase of the automobile and celebrity endorsement acts as a source of brand-building.


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5.2 Conclusion: Despite the obvious economic advantage of using relatively knownpersonalities as endorsers in advertising campaigns, the choice of celebritiesto fulfill that role has become common practice for brands competing in today'scluttered media environment. There are several reasons for such extensive use ofcelebrities. Because of their high profile, celebrities may help advertisementsstand out from the surrounding clutter, thus improving their communicative ability. A brief assessment of the current market situation indicates that celebrityendorsement advertising strategies can, under the right circumstances, indeed justify the high costs associated with this form of advertising. But it would bepresumptuous to consider celebrity endorsement as a panacea for all barricades.Celebrity endorsement if used effectively, makes the brand stand out, galvanizesbrand recall and facilitates instant awareness. To achieve this, the marketer needs to be really disciplined in choice of a celebrity. Hence the right use of celebrity can escalate the Unique Selling Proposition i.e. it can act as a sourceof brand-building of a brand to new heights; but a cursory orientation of a celebrity with a brand may prove to be claustrophobic for the brand. It was found that people love to see celebrities endorsing their brands so the involvement ofcommon man is pretty high with these celebrities. So marketers should use the right celebrity matching with the product. During survey it was found that male celebrities are considered to be better celebrity endorser than that of their female counterparts. Th

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