impact of celebrity endorsements on brands project report

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IMPACT OF CELEBRITY

ENDORSEMENTS ON

OVERALL BRAND

{Searching for the Right Match}


CONTENTS P.N O .

1. ITRODUCTION 2

2. SYNOPSIS 4

3. DEFINING THE MEANING & SCOPE OF THE TOPIC 7

4. IMPORTANT CELEBRITY ATTRIBUTES 9

5. THE NEED FOR CELEBRITY ENDORSEMENT 10

6. SCOPE OF CELEBRITY ENDORSEMENT 11

7. IMPACT OF CELEBRITY ENDORSEMENT 13

8. THE PROCESS OF CELEBRITY ENDORSEMENT 18

9. RISKS ASSOCIATED WITH CELEB. ENDORSEMENT 21

10. CELEBRITY SELECTION 22

11. CELEBRITY ENDORSEMENT: THE ISSUES INVOLVED 24

12. FRAMEWORK OF ENDORSEMENT PROGRAM 26

13. WHY CELEBRITY ENDORSEMENT FAILS? 32

14. KINDS OF CELEBRITY-HOOD 40

15. RESEARCH & ANALYSIS 42

16. CASES ANALYSIS USING THE FRAMEWORK 55

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17. CONCLUSION 58

18. REFERENCES 67

INTRODUCTION

The modern world of marketing communication has become colorful and inundated with advertisements, and it is hard to get noticed. It is an uphill task for the designer of an advertising campaign to differentiate itself from others and attract viewers’ attention.

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. The challenge of the marketer is to find a hook that will hold the subject’s attention.In helping to achieve this, use of celebrity endorsers is a widely used marcom strategy.

In this jet age, people tend to ignore all commercials and advertisements while flipping through the magazines and newspapers or viewing TV. But even then, the glamour of a celebrity seldom goes unnoticed. Thus, celebrity endorsement in advertisement and its impact on the overall brand is of great significance. In this process, the companies hire celebrities from a particular field to feature in its advertisement campaigns. The promotional features and images of the product are matched with the celebrity image, which tends to persuade a consumer to fix up his choice from a plethora of brands. Although this sounds pretty simple, but the design of such campaigns and the subsequent success in achieving the desired result calls for an in-depth understanding of the product, the brand objective, choice of a celebrity, associating the celebrity with the brand, and a framework for measuring the effectiveness.

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Companies invest large sums of money to align their brands and themselves with endorsers. Such endorsers are seen as dynamic with both attractive and likeable qualities and companies plan that these qualities are transferred to products via marcom activities. Furthermore, because of their fame, celebrities serve not only to create and maintain attention but also to achieve high recall rates for marcom messages in today’s highly cluttered environments.

Aristotle said, “Beauty is a greater recommendation than any letter of introduction.” This could aptly summarize why innumerable products are endorsed by celebrities, with or without a significant need or benefit from the same.

Similarly every product has an image. The consumer tries to consume a brand which has the maximum fit with his/her own personality/image. The celebrity endorser fits in between these two interactions, where he tries to bring the image of the product closer to the expectation of the consumer, by transferring some of the cultural meanings residing in his image to the product.

“The model of Celebrity Endorsement”, is essentially based on the theoretical framework of Classical Conditioning given by Pavlov.

Upfront, this seems like a very effective weapon in mature and saturated markets, which differentiates products from those of the

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competitors by clearing the clutter and reaching the consumer. But is the impact so significant, or are the celebrities themselves adding to the clutter?

Through this paper we primarily try to evaluate the impact of any celebrity endorsement campaign on the brand by analyzing it through our “Impact-Analysis Framework” consisting of - brand, consumer and the celebrity as well as the interactions between the Consumer - Endorser and Brand - Endorser.

And finally, is the investment in a celebrity commensurate to the returns earned by the company?

If the world were full of all wise men and all wise women; we would have never heard of a term called “advertisement” . And then good products would have found the right customers and grown to prosperity. Firms would have worked out a mathematical formula to sell and succeed. But the buying process isn’t rational; and so is this world.

Indians are die-hard movie and sport buffs; and this aspect of the consumers has invited the concept of “Celebrity Endorsement” to the world of advertisement. The purpose of this paper is to analyze the role of Celebrity Endorsement in the process of brand-building by taking appropriate examples from the advertising landscape.

SYNOPSIS

“Successful branding programs are based on the concept of singularity. The objective is to create in the mind of the prospect the perception that there is no other product on the market quite like your product.”

- Al Ries & Laura Ries

Indian advertising started with the hawkers who used to call out their wares right from the days when cities and markets first began. With this evolved a strategy that tried to benefit from the emotional attachment of the admirers or the fans of the celebrities; in the form of celebrity endorsement.

Paper tries to understand the process of consumer psychology and impact of celebrity endorsement on the overall process of brand building. The in-depth study of various models brings to light

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the complexities pertaining to celebrity endorsement. A symbiotic model has been proposed to define: how to make celebrity endorsement a win-win situation for both the brand and the brand-endorser. “Brand” is the most valuable asset of any firm. Any thoughtless adventure can be like the Sword of Damocles. It’s the “strong idea” of promotion which is a more strategic means of brand-building; which can be an economical alternative over celebrity endorsement.

“It doesn’t matter how new an idea is; what matters is how new it becomes.”

- Elias Canetti

“If you’re trying to persuade people to do something, or buy something, it seems to me you should use their language, the language in which they think.”

- David Ogilvy

This paper rifles through the concept of celebrity endorsement and provides insights on what it is and how the increasing number of endorsements, throw 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 reasons which lead to impact of celebrity endorsement on brands?

Through research and analysis, this paper emerges with a 14-point model which can be used as blue-print criteria and can be used by brand managers for selecting celebrities, and capitalizes the celebrity resource through 360 degree brand communication since our research proposes it as the foundation brick of the impact of celebrity endorsement. Our study reveals that the impact of celebrity endorsement is proportional to the 14 factors discussed in the model.

The success of a brand through celebrity endorsement is a cumulative of the 14 attributes. Greater the score of the below greater are the chances of getting close to the desired impact.

The general belief among advertisers is that brand communication messages delivered by celebrities and famous personalities generate a higher appeal, attention and recall than those executed

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by non-celebrities. The quick message-reach and impact are all too essential in today’s highly competitive environment.

We put forward certain ideas like ‘positioning by association’, ‘diminishing celebrity utility’ and the Multiplier Effect which show the triangular relationship between the brand, the consumer and the celebrity.

Now, despite the potential benefits derived from celebrity endorsements, they increase a marketer’s risk manifolds and should be treated with full attention and aptitude. A brand should be cautious when employing celebrities to ensure promise believability and delivery of the intended effect. The growing importance of mythical characters as celebrities and their sway over the target segments are ample proof of public demand for icons to look up to. As the celebrities traverse from a mere commercial presence to public welfare message endorsements, a whole new dimension is added to this process and helps us in achieving a holistic view of the impact which celebrities generate in every sphere and segment through their well-versed endorsements.

Celebrities have also been in demand having succeeded in being effective by rising above the clutter & grabbing the attention and focus of the consumer. They also succeed in creating an aspiration in the minds of the consumer to acquire what their favorite celebrity endorses.

However, the above might be too simplistic a solution for multitudes of marketing problems in the real world. Hence to analyse how effective any Celebrity Endorsement campaign is, we need to look at the various factors which impact its success. Through this paper, we have developed an analytical structure called “Impact-Analysis Framework” comprising three main factors - Brand, Consumer, Endorser and the interaction between Brand - Endorser and Consumer-Endorser.

Further, we apply our framework to a series of celebrity campaigns to gauge the reasons for the success and failures of each to check the validity of our model. In our analysis, we also came across factors which have impacted campaigns in very specific terms and hence cannot be generalized; to elucidate the same, we have

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presented analysis of some of these unique cases which have been marked by diverse outcomes.

DEFINING THE MEANING & SCOPE OF THE TOPIC

BRANDING & CELEBRITY ENDORSEMENT

Today, use of celebrities as part of marketing communication strategy is fairly common practice for major firms in supporting corporate or brand imagery.

What is a Brand?

Jack Welch, the former CEO of General Electric, once said, “Our most valuable assets are our intangible assets.” The intangible asset he was referring to is a brand. The Dictionary of Business & Management defines a brand as: “a name, term, sign, symbol, or design, or a combination of them, intended to identify goods or services of one seller or a group of sellers and to differentiate them from those of competitor”.

DEFINITION OF CELEBRITIES

Celebrities are people who enjoy specific public recognition by a large number of certain groups of people. They have some characteristic attributes like attractiveness, extraordinary lifestyle or special skills that are not commonly observed. Thus, it can be said that within a society, celebrities generally differ from the common people and enjoy a high degree of public awareness.

According to Friedman and Friedman, a “celebrity endorser is an individual who is known by the public for his or her achievements in areas other than that of the product class endorsed”. Compared

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to other endorser types, famous people always attach a greater degree of attention, recall and loyalty.

According to Melissa St. James, a doctoral fellow and marketing instructor at The George Washington University, “Studies show that using celebrities can increase consumers’ awareness of the ad, capture [their] attention and make ads more memorable.”

In this age of intense competition, where capturing a position in the consumers’ mind space is extremely tough, celebrity endorsements give an extra edge to the companies for holding the viewers’ attention. Celebrities can catalyze brand acceptance and provide the enormous momentum that brands require by endorsing the intrinsic value to the brand.

“The term Celebrity refers to an individual who is known to the public (actor, sports figure, entertainer, etc.) for his or 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, Aishwarya Rai,, Preity Zinta, Aamir Khan and Pierce Brosnan).

Models (e.g., Mallaika Arora, Milind Soman, Naomi Campbell, etc),

Television Personalities (Husain, Smriti Irani),

Sports figures (e.g., Sachin Tendulkar, Sania Mirza, Anna Kournikova, Michael Schumacher, Tiger Woods, etc),

Entertainers (e.g., Cyrus Broacha, Oprah Winfrey,),

And pop-stars (e.g., Madonna, Shakira).

But also for less obvious groups like businessmen (e.g., Vijay Mallya, Bill Gates) or politicians.Clebrities 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 special celebrity events, e.g., award ceremonies, inaugurations or

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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 featured in various publications). Last but not least, celebrities act as spokes-people in advertising to promote products and services, which is referred to celebrity endorsement.

IMPORTANT CELEBRITY ATTRIBUTES

While selecting a celebrity as endorser, the company has to decide the promotional objective of the brand and how far the celebrity image matches with it. The selection is in fact a collaboration, from which both the company and the celebrity gains.

The most important attribute for a celebrity endorser is the trustworthiness. The target audience must trust that a celebrity carries a particular image and it must match with the product.

The second attribute in order of importance is likeability. The celebrity also must be accepted as a popular icon by a large cross section of the audience.

Similarity between the target audience and the celebrity is the third important attribute. A person well-known in a society can have greater impact than a celebrity of a different world. If the endorser and receiver have similar needs, goals, interests and lifestyles, the position advocated by the brand communication is better understood and received. Similarity is also used to create a situation where the consumer feels empathy for the person shown in the commercial. The bond of similarity between the endorser and the receiver increases the level of persuasiveness.

Apart from that, expertise is also believed to be another important attribute.

Definition of Celebrity Endorsement

According to Friedman & Friedman, a “celebrity endorser is an individual who is known by the public for his or her achievements in areas other than that of the product class endorsed.” So, in the Coco-Cola advertisement; actor Amir Khan is the celebrity

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endorser for the product or brand called Coke, and this process is referred to as Celebrity Endorsement. Celebrities might endorse as a brand ambassador or a brand face.

Difference between Brand Ambassador & Brand Face

A Brand Ambassador would be one who is not only a spokesperson for the brand or is just appearing as a testimonial for the brand’s benefits. He/she is an integral part of the brand persona and helps to build an emotionale, which goes beyond just appearing on 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 all the while. For example, Fardeen Khan is the brand ambassador for Provogue while he 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 face is 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. Brand faces are easily forgotten and fades away with the campaign’s end

THE NEED FOR CELEBRITY ENDORSEMENT

The charisma of the celebrities almost always entices people and their words are worshipped by a lot of people. Their influence also goes on the political front, where they are invited for political endorsement. Eg. Hema Malini for B.J.P. , Govinda for Congress , Amitabh Bachchan for S.P..When actor Shah Rukh Khan endorses Santro-Zip drive; the consumers are made to think that he is giving his opinion to go for this car. Similarly, actress Rani Mukherjee has turned the tables for Bata’s ladies footwear brand called Sundrop as sales increased by a whooping 500%.

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Celebrity endorsements are impelled by virtue of the following motives: -

Instant Brand Awareness and Recall

Celebrity values define, and refresh the brand image

Celebrity adds new dimensions to the brand image

Instant credibility or aspiration PR coverage

Lack of ideas

Convincing clients

WHY COMPANIES USE CELEBRITIES - THE CELEBRITY EDGE

Psychological Factors: Celebrities generally satisfy the 'esteem needs' of an individual. For example a movie actress is expected to possess a flawless skin and a blemish free face. Her fans want to know the secret of her beauty, so she becomes a natural endorser for beauty related products (cosmetics, soaps, powder).

propping Up Awareness and Trust Levels: Rahul dravid - bob To Communicate a Certain Message about the Company: Sachin Tendulkar as brand ambassador gave it the desired facelift and image for the launch of 'Victor' Value for Money: To Position their Brand Distinctively: Lux worldwide has positioned itself as the 'soap the filmstars use'. From Leela Chitnis to Aishwarya Rai, all top actresses have modeled for Lux. Celebrity Standing for a Single Brand:Think Zakir Hussain and you are reminded of 'Wah Taj' Taj Mahal tea. Ditto with A. R. Rahman for Airtel.

SCOPE OF CELEBRITY ENDORSEMENT

The use of testimonials by advertisers dates back to the 19th

century when medicines were patented. Firms have been

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juxtaposing their brands and themselves with celebrity endorsers (e.g., athletes, actors) in the hope that celebrities may boost effectiveness of their marketing and/or corporate communication attempts for at least a century. One of the early example is Queen Victoria’s endorsement of Cadbury’s Cocoa (Sherman, 1985). It was not until the 1920s, however, that advertisers used famous people for product endorsements.

Actresses Joan Crawford, Clara Bow and Janet Gaynor were among the first celebrities to promote products (Fox, 1984). At that time, the rationale given by advertising agencies for using celebrities was “the spirit of emulation” (Fox, 1984, p.90). About a decade ago, one in three television commercials used celebrities’ endorsements (Business Week, 1978), and today this advertising approach appeared to be on the increase across all media types (Sherman, 1985 and Levin, 1988). Friedman (1977) found that celebrities are featured in 15 percent of the prime-time television commercials. In the United States, it was reported that about 20% of all television commercials feature a famous person, and about 10% of the dollars spent on television advertising are used in celebrity endorsement advertisements (Advertising Age, 1987; Sherman, 1985). Thus, celebrity endorsement has become a prevalent form of advertising in United States and elsewhere.

Today, the use of celebrity advertising for companies has become a trend and a perceived winning formula of corporate image building and product marketing (Media, July-August 1997). This phenomenon is reflected by the recent market research findings that 8 out of 10 TV commercials scoring the highest recall are those with celebrities’ appearances .

Celebrity Endorsement in India

Phase 1: The Pioneering Phase (1950-1980) this phase was characterized by: -1. Limited channels of communication2. Demand exceeded supply3. Heavy regulation and governmental regulationssome bigger companies from their global experience introduced the concept of celebrity endorsement. HLL has used Hindi film stars to endorse their beauty soap Lux since the fifties.

Phase 2: The Growth Phase (1980-1990) the introduction of television added a variable effective medium of

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communication. Indian stars going global with events like Asiads and World Cup victory. Vimal, Thums-Up, Gwalior and Dinesh are some of the other brands that used star-appeal in the early days of mass advertising. There was a spurt of advertising, featuring stars like Tabassum (Prestige Pressure-cooker), Jalal Agha (Pan Parag Pan-masaala), Kapil Dev (Palmolive Shaving Cream) and Sunil Gavaskar (Dinesh Suitings).

Phase 3: GlobalisationIn highly competitive markets, the following realities about brand management exist: -1. Product differentiating factors are duplicable and imitable. 2. All long existing and successful brands imbue their products with a meaning.

IMPACT OF CELEBRITY ENDORSEMENT

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 reasons which lead to impact of celebrity endorsement on brands?

Through research and analysis, this paper develops a 14 point model, which can be used as a blueprint criterion which can be used by brand managers for selecting celebrities, and capitalizes the celebrity resource through 360 degree brand communication, since our research proposes it as the foundation brick of the impact of celebrity endorsement. Our study reveals that the impact of celebrity endorsement is proportional to the 14 factors discussed in the model.

The success of a brand through 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.

Fit with the Advertising Idea

One of the most successful celebrity endorsement campaigns which reflect the fit between the brand and the 360 degree advertising fit is Fardeen Khan and Provogue. Provogue’s

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positioning in the apparel market is of a young, active, party-going, attention-grabbing brand and so is Fardeen Khan. The conjunction between the two has been immensely impactful and brand managers have utilised this endorsement through 360 degree reinforcement.

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Celebrity-Target Audience Match

Smriti Irani endorsing the WHO recommended ORS Campaign in India. Indian mothers can associate with Smriti Irani through the facets she projects on screen or in regular life which helps develop a connect with the target audience since mothers medicate their children with ORS.

Celebrity Values

Tabu endorsing Tetra Packed Milk, Shabana Azmi campaigning for AIDS Awareness, Amitabh Bachchan & Shahrukh Khan campaigning for Pulse Polio or Aishwarya Rai appearing in the Donate Eyes campaign are few examples, which reflect the transfer of celebrity values to the brand, creating an impact that generates recall.

Costs of Acquiring the Celebrity

Recently, a newspaper report showed how cola firms had gone beyond their advertising budgets to get the best celebrities. Small firms that use celebrities’ services run greater risks if they invest large amounts. Although nobody is willing to say exactly how much celebrities get paid, industry sources say Sachin Tendulkar’s price is believed to be between Rs. 2.0-2.5 crores per endorsement, and musician A. R. Rehman, who had signed up with AirTel, is believed to have picked up Rs. 1.75 crores. Film-star Hrithik Roshan was rumored to have picked up Rs. 2 crores for the Fly With Hrithik campaign to push Close-Up, and Shahrukh Khan’s rate seems to be between Rs. 2.5-3.0 crores. Aishwarya Rai apparently picks up Rs. 1.25 crores for an endorsement and the Indian cricket captain Saurav Ganguly is believed to get between Rs. 90 lakh to Rs. 1.5 crores, while film-star Aamir Khan apparently makes Rs. 1.5 crores per endorsement.

Celebrity Regional Appeal Factors

R. Madhavan endorsing Pepsi in southern India or Sachin Tendulkar endorsing in India are few examples of how celebrities are chosen to reach out to target audiences for brands in regional markets.

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Celebrity-Product Match

Cyrus Broacha is the brand ambassador for MTV since both the celebrity and the brand are considered as friendly, young, mood-boosting, humorous and outspoken. MTV’s brand personality overlaps Cyrus Broacha’s image as a brand.

Some more examples of compatible celebrity product match in which celebrity brand attributes get transferred to the brand and increases the brand equity is of Govinda & Navratan Tel, Aishwarya Rai & Nakshatra, etc.

Celebrity Controversy Risk

The perfect example here is of Salman Khan and the controversy in which he crushed a man to death with his Pajero when he was driving under the influence of alcohol. Also, any act on the part of the endorser that gives him a negative image among the audience and goes on to affect the brands endorsed. The brand, in most instances, takes a bashing.

Celebrity Popularity

Celebrity Brand association like Garnier endorsed Tara Sharma & Simone Singh, Agni Diamonds & Riama Sen don’t get much brand recall, and even if they do, its difficult to attribute it to the celebrities’ endorsing the brand.On the other hand, HPCL has had increased popularity and share of voice due to the endorsement of the brand through Sania Mirza.

Celebrity Availability

In case of various brands, there are situations in which they prefer to go without a brand face, since there is no brand-fit between the celebrities available and the brand. Also, due to multiple endorsements by certain celebrities, brands refuse to adopt celebrity endorsement since they fear dilution of the brand image.

Celebrity Physical Attractiveness

John Abraham endorsing Wrangler and Timex Sunglasses are some examples which portray the celebrities’ physical attractiveness that helps create an impact.

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Celebrity Credibility

The most important aspect and reason for celebrity endorsement is credibility. In a research carried out among 43 ad agencies and companies, most experts believed that the most important dimensions of credibility are trustworthiness and prowess or expertise with regard to the recommended product or service. One of the most obvious reasons of Amitabh Bachchan endorsing plethora of brands is the credibility of the celebrity and his recognition across consumers.

To site one of the most successful campaigns in which the celebrity’s credibility has had an indelible impact on the brand and has saved the brand is of Cadbury’s. After the worm controversy, Amitabh Bachchan’s credibility infused into the brand through the campaign, helping it to get back on track. The campaign has won an award for the same.

Multiple Endorsements

Not many people can remember all the brands that a celebrity endorses and the chances of losing brand recall increases if the celebrity endorses multiple brands. For example, in case of Sachin Tendulkar people recall Pepsi, TVS Victor and MRF, but might not remember brands like Britannia and Fiat. Similarly, for Amitabh Bachchan, consumers remember ICICI, Pepsi, Parker Pens, Pulse Polio and BPL. They might get confused in the endorsement of Nerolac or Asian Paints. Thus, for multiple endorsements where the same celebrity endorses several brands, it boils down to the strength of the brand and the advertising content.

Whether Celebrity is a Brand User

Various celebrities endorse NGOs and social causes since they believe in the social message that they need to convey to the audience. One of the most successful campaigns has been executed by PETA in which celebrities like Shilpa Shetty, Amisha Patel, Yana Gupta, Sheetal Malhar, Mahima Choudhary claimed to believe in PETA’s philosophy, and thereby endorse the brand.

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IMPACT REGIONS OF CELEBRITY ENDORSEMENT:

The illustrations below explain the same: -

Source: Adopted from TOM et al, 1992.

THE PROCESS OF CELEBRITY ENDORSEMENT

The process of celebrity endorsement is more of meaning translation & meaning application. A deeper insight into this complex process is provided by the following theory.

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The Meaning Transfer Model

McCracken, the author to this model, has suggested that, “The effectiveness of the endorser depends, in part, upon the meaning he or she brings to the endorsement process.” The celebrities’ effectiveness as endorsers stems from the cultural meanings with which they are endowed. It is a three-stage process of meaning transfer that involves the formation of celebrity image, transfer of meaning from celebrity to the brand, and finally, from the brand to the consumer.

Figure 1: The Meaning Transfer Model

To explain it with the help of an example, we can take the case of Rahul Dravid and Castrol. The cricket icon is seen as “Mr. Dependable”. And when he endorses Castrol, an image of “dependability” is tagged on to the brand under promotion.

Culture

The celebrities deliver meanings with extra subtlety, depth and power than anonymous models. Celebrities offer demographic information with special precision and configurations of range of personality and lifestyle meanings. They evoke the meanings in their persona with greater vividness and clarity.

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Celebrities actually own their meanings because they have created them on the public stage by dint of intense and repeated performance. They pass these meanings into advertisements through meaning transfer process. Preity Zinta, for example, is perceived as a fun-loving, vivacious and modern Indian woman.

Endorsements

The meaning transfer model proposes that the marketing / advertising firm at first should determine the symbolic properties sought for the product. Thereafter, they should consult a host of celebrities and their associated meanings. Finally, after considering budget and availability constraints, the celebrity should be chosen to represent the appropriate symbolic properties. The chosen celebrity will have some meanings associated with it which is not sought after for the product. The advertisement program should take care about keeping the unwanted meanings out of the evoked set and capture only the salient meanings. The advertisement must be designed to highlight the essential similarity between the celebrity and the product.

Consumption

Consumers constantly search for the object world which gives them access to workable ideas of demography, personality, lifestyle and culture. McCracken suggests that this stage of the model is most complex, as consumers must claim, exchange, care for and use the consumer goods to appropriate its meanings.

Celebrities play a major role in this stage as they have created their own self, which makes them exemplary and inspirational figure to the consumers. Consumers try to emulate the celebrities admired by them and try to find out the meaning in the similar fashion. Celebrities bring the dramatic roles, fashioning cultural meanings into a practicable form.

In the endorsement process, they make these meanings available in the material form to the consumers who are keen to bring a self from them. Thus, celebrities become an essential partner to the meaning transfer process because they vividly demonstrate the process by which the meanings can be assembled.

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“If commerce is the engine of our economy, then advertising is the spark. Responsible advertisers are the drivers who keep us on the right track, leading to a richer, more benevolent society.”

RISKS ASSOCIATED WITH CELEBRITY ENDORSEMENT

The concept of “Total Branding” is slowly emerging and many companies are focusing on that. They are emphasizing on their best practices, customer relationship management, and employee training and knowledge management. Internal brand management, under which the company ensures that employees and channel partners are convinced about the brand, is becoming particularly important, for they are the ones who have to deliver. Thus, the celebrity endorsement can be considered only as a carrier of what’s inside.

Besides, while designing an ad campaign, one should also keep in mind that the overuse of some extremely popular celebrities often tends to confuse consumers and reduce the utility of celebrity endorsement. Another argument against celebrity endorsement involves the behavior of the celebrity. The marketing function of a company should also understand that brands should assume a much greater space than the celebrities, because their association may be temporary but the brands are permanent.

The various risks associated with celebrity endorsements are as follows: -

•Negative publicity - If the celebrity is strongly associated with the brand then the occurrence of the negative publicity can spill over the brand.. E.g., Salman Khan lost his endorsement deal with Thumbs-Up after his infamous incidents like buck-killing and rash-driving.

•Overshadowing - When celebrity endorser is used, the risk of consumers focusing on the celebrity and not on the brand exists.

•Overexposure - This risk arises when the celebrity chooses to endorse several different products simultaneously which might leave the consumers confused. E.g., Sachin Tendulkar endorses several brands such as MRF, TVS Victor, Pepsi, Fiat, Boost, etc.

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•Overuse - Sometimes the company can use many different celebrities to appeal to different market segment. But multiplicity of endorser might blur the image.

•Extinction - The favorable response obtained by a particular brand may weaken over time if the brand gets significant exposure without the association of the celebrity. If the celebrity contract is for a considerable period of time, then it can lead to draining out capital without proper return.

•Financial Risk - The decision for hiring an expensive endorser may not be always feasible if there is a poor brand fit.

Therefore, for celebrity endorsements to work effectively there are some fundamental ground rules: -

Clear brand promise and brand personality. The communication objectives for the campaign should be

frozen.

Focus must be on the synergy between the brand and the celebrity image

Establish explicitly what the celebrity is going to communicate

CELEBRITY SELECTION

There are various scientific ways in which the right celebrity is selected for the product endorsement, which are discussed here after

Stereotyping

Tellis defines stereotypes as perceptions and depictions of individuals based on simplistic, biased image of the group to which they belong, rather than on their own individual characteristics. For example: its better to select celebrities who say are teens for chocolate advertisements and females for detergent ads, etc.

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The TEARS Model

The attributes highlighted by the acronym “TEARS” are gauged for celebrity selection. These are: -

•Trustworthiness: For example - Legendary actor Amitabh Bachchan who is an icon of trust; promoting ICICI Bank.

•Expertise: For example - Golfer Tiger Woods for a sports brand.

•Attractiveness: For example - Tennis player Anna Kournikova who earns 10 Million dollars per year in just endorsement.

•Respect: For example - Former Miss World Aishawarya Rai and the Eye donation campaign.

•Similarity: For example - a child artist promoting a chocolate brand.

A celebrity scoring high on all the above attributes can turn out to be a good endorser for the brand under question.

The No TEARS Model

The “No TEARS” approach is a tool for managers and their advertisers how to go about selecting celebrities so as to avoid the pitfalls from making an unwise decision. It gauges the following information: -

• Celebrity & audience match up,

• Celebrity & brand match up,

• Celebrity credibility,

• Celebrity attractiveness,

• Cost consideration,

• A working ease and difficulty factor,

• An endorsement saturation factor,

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• A likelihood-of-getting-into-trouble factor

Selecting the right celebrity does more than increasing sales; it can create linkages with the celebrities’ appeal, thereby adding new dimension to the brand image. Research conducted by Katherine Eckel has revealed that “celebrities can get people to make a better choice but cannot influence people to make a foolish choice”.

The success of celebrity endorsement in India can be sought from a market research conducted earlier which found that 8 out of 10 TV commercials scored the highest recall were those with celebrity appearances. A few examples: Sachin Tendulkar - Adidas, Sourav Ganguly - Britannia, Leander Paes & Mahesh Bhupati - J. Hampstead, Shah Rukh Khan - Pepsi, Sushmita Sen - Epson, and Aishwarya Rai - Coke.

CELEBRITY ENDORSEMENT: THE ISSUES INVOLVED

There are several factors to consider before resorting to celebrity endorsement. There is no single formula to win in the world of marketing. A company must analyze the prospect of endorsement from 360 degrees, prior to product promotion.

Price vs. Profit

The most important issue is that of return on investment (ROI). Companies need to perform a cost-benefit analysis prior to endorsement. The process of gauging the effectiveness of endorsement on the overall brand is but difficult. The companies expect to bring, in the long run, future sales, revenues and profit from the present investments on celebrity endorsement. Celebrity endorsement is an expensive means of brand promotion and the price burden almost always shifts on to the consumers; if not, then it narrows the companies’ profit.

Multiple Brand Endorsement vs. Multiple Celebrity Endorsement

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In the advertising landscape, we find either a celebrity endorsing multiple brands or multiple celebrities being used to endorse a single brand.

Sachin Tendulkar, for example, in 2002 endorsed 12 brands (including Pepsi, Boost, Colgate Total, Gillette, Britannia Tiger, Fiat Palio, TVS Victor, Fiat Sienna, MRF, Adidas, Visa Cards and Home Trade). Tripp et al, says that the endorsement of as many as four products negatively influences the celebrity spokesperson’s credibility and likeability.

Figure 3: Multiple Brand Endorsement (Shah Rukh Khan)

Also, the use of multiple celebrities to endorse a brand may hinder the meaning transfer process, and thus, lead to confusion among the consumers.

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Figure 4: Multiple Celebrity Endorsement (Adidas & Hyundai Santro)

FRAMEWORK TO MAKE EFFECTIVE CELEBRITY ENDORSEMENT PROGRAM

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Figure 2: Evolution of Celebrity Endorsements

The action plan should be able to answer the following key questions: -

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Are the celebrity endorsements programs result driven? How to quantify the value generated by the celebrity

endorsements?

Are customers able to connect the brand with the celebrity?

One can gauge the performance of celebrity endorsement marketing program across the various stages of development (Refer to Figure 2). We have attempted to prepare a framework to build a more effective celebrity endorsement program

1. Align Celebrity Endorsement With Business Objectives.

The attributes of the celebrity should be intrinsically valuable and aligned with the product, brand and company. Figure 3 suggests strategies to be adopted by a company depending on its brand positioning and the brand fit with the celebrity.

• If the brand-celebrity attribute fit is slow, then the company should adopt “Eliminate or avoid” strategy. The consumers are unlikely to connect between the brand and the celebrity, and the recall value is likely to be very low; defeating the entire purpose of signing the celebrity. This is what happened when Goodlass Nerolac Paints roped in Amitabh Bachchan as their brand ambassador.

• When the positioning of the brand is high but the fit with the celebrity is low, the company should adopt a “Monitor and evaluate” strategy. The company should continuously track the effectiveness of the celebrity endorsement through surveys, monitoring the sales, etc. Though Parker pens had a positioning of premier pens, the early advertisements (Refer Annexure 1) with Amitabh Bachchan showed low brand-celebrity fit.

• When the positioning has not been effective, but the fit with the celebrity is high, the company should adopt the strategy of “Keep and enhance”. The company has to spot the opportunities to leverage the celebrity investment and to find more better and effective ways to communicate with the target audience. The celebrity attributes align with the company’s brand, strategic business objectives and primary customer segment. The Narain Karthikeyan - J K Tyres relationship works well in this category.

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Figure 3: Brand-Celebrity Attribute Fit Matrix

• In the ideal quadrant when the positioning effectiveness is high and celebrity fit with the brand is also high, the company should follow the strategy of “Grow and partner”. In case of Coke, the brand has firmly established the “Thanda” position in the minds of the consumer, with Aamir Khan playing the perfect role.

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By situating potential celebrity on the matrix, companies can manage the celebrities as portfolios - re-distributing the resources and marketing efforts to those celebrities with the greatest potential to increase value, while eliminating those that prove too costly.

2. Measure and Quantify Performance

The company should have proper metrics in place such as increase in sales, brand awareness and customer preference, to measure the effectiveness and the impact of celebrity endorsement in the short and long term.

The relationship between the endorsement costs and the benefits is explained further in Figure 4. The endorsement costs are primarily driven by the endorsement fees and promotion outlays. The benefits that accrue from such a relationship can be categorized into two components: -

• Value of Hard Assets: The benefits derived from the hard assets are those that have a clear market value such as increased sales and increase in brand equity. These are the tangible benefits that a company derives from its endorsement strategy.

• Value of Association: Association value is derived from the target customers who associate the company / brand with the celebrity. These are the intangible benefits that the company will accrue in the long-term.

There are ways to quantify the potential value of hard assets and association value against their impact on company’s celebrity endorsement by looking at the following categories: -

• Incremental Sales: Companies can quantify the effect of the celebrity programs on sales by performing year-to-year or quarter-to-quarter sales comparisons for targeted consumers, geographic regions, or specific product lines. Primary research can also be done to reveal the impact of the celebrity on target customer’s propensity to purchase.

Brand Recognition : One of the objectives of celebrity endorsement is to increase brand awareness. However, the companies use popular, though incorrect, survey approach by asking the respondent which celebrity endorsed their brand.

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Instead, they should ask the respondent the brands associated with the celebrity. By gauging the top-of-mind recall can enable the company to find out if a connection is made between the brand and celebrity.

Customer Loyalty : Customer churn can be measured in fixed intervals before and after the celebrity campaign period to determine the impact of celebrity on customer retention. Additionally, primary research can be conducted to evaluate changes in the customer loyalty, customer preferences, etc.

3. Selection and Renewal of Contract With Celebrities

The ability to align goals and measure the value of brand-celebrity fit is the first step in obtaining optimal value from a celebrity endorsement. Value is also derived by revisiting the celebrity portfolio to determine ways to reduce costs and increase benefits.

Additionally, a company can increase its benefits by re-examining (and altering, if needed) its promotion strategy to create deeper brand association, identify new celebrities that are capable of achieving company goals and negotiate for additional rights from the existing contracts. A large extent of this can be successful if the company can develop and execute coordinated, preplanned negotiation strategy which will enable it to improve the contractual fees and media commitments stipulated in the contract, as well as the amount and benefits conferred on the company. A few guidelines for formulating a well-defined negotiation strategy would include:

• Understand the Competition of Celebrity: Except for few venerable celebrities; most of the celebrities quote their price in expectation of negotiation. The company should benchmark the contractual fees and benefits against that of comparable celebrities to ensure the package is equivalent.

• Understand ‘Celebrity’ Clutter: There could be a degree of clutter with the celebrity endorsing many more brands and companies. This clutter can impede the ability of the company to capture the image and awareness required to generate value from the endorsement. The company needs to understand the risk associated with the signing of such celebrity and need to devise strategic opportunities to stay clear of the clutter.

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Figure 4: Endorsement Cost-Value Relationship

• Include Value-in-Kind Payments : Companies can reduce their risk and endorsement costs by substituting out-of-pocket cash payments with value-in-kind, which can be traded at market price.

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• Protection Against Ambush Marketing: Ambush marketing (or adjacent marketing) is the reality of the day and the marketing managers need to be creative to stay one step ahead of the competition. For instance, Amitabh Bachchan was shown drinking Thumbs-Up in the hindi movie Kaante , when he is actually brand ambassador for Pepsi.

WHY CELEBRITY ENDORSEMENT FAILS?

There maybe cases where brands are not able to take-off even after the backing of celebrities. And this leads to speculations in the Ad World on the soundness of celebrity endorsement as an effective communication strategy.

Negative impacts of Celebrity Endorsement on the brand

A popular drawback of celebrity endorsement is the 'Vampire Effect' or the celebrity overshadowing the brand16. Some viewers forget the brand that a celebrity is approving. Others are so spellbound by the personality of the celebrity that they completely fail to notice the brand being advertised. Two new drawbacks can be seen these days what marketers call Celebrity Trap and Celebrity Credibility17. Celebrity trap is when the celebrity becomes an addiction for the marketing team and the task to find substitutes becomes more and more difficult, leading to surfeit of celebrities. Celebrity credibility refers to skepticism by the consumers regarding the celebrities, especially when there is anything negative regarding the celebrity associated with the brand in the news, then brand is bound to be affected.

The Reasons

According to leading management thinker, Dr. Seamus Phan, “Many celebrity endorsements fail because they identify a celebrity they like in an emotive and un-researched manner and then try to create advertising to force-fit the celebrity into the creative concept.” Therefore, the advertisers must associate the celebrity to the advertisement and not vice versa. Thinking on the similar lines, the advertisers shouldn’t identify the brand to associate with the celebrity but do vice versa.

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The success of celebrity endorsement also depends upon the capacity, knowledge, experience, and qualification to talk about the product. Failure may be attributed to improper positioning (Example: Amitabh Bachchan, Abhishek Bachchan & Maruti Versa), negative perception after use of product / service (inferior products), misapprehension of the meaning of the endorsement, etc.

“The philosophy behind much advertising is based on the old observation that every man is really two men - the man he is and the man he wants to be.”

- William Feather

The Solutions

As discussed, celebrity management is very crucial to avoid the brand-celebrity disconnect, and subsequently, brand failures. If the consumers have questions in their minds regarding the quality or performance of the product then even God cannot save the brand. The obvious solution to the problem of overshadowing is to make sure that both the advertisement and the celebrity are focused on the brand or product. To avoid any bad publicity arising out of celebrity defames, companies may resort to multiple celebrity endorsement. For Example: Pepsi while capitalizing on the popularity of cricket and films in India used several cricketers and film stars in their ads. So when Azharuddin and Jadeja got embroiled in the match-fixing controversy, Pepsi severed its association only with these stars, but its relationship with cricket continued.

The Symbiotic Model

Based on our understanding of the celebrity endorsement process, we can propose our own model taking cue from the biological kingdom. There are various symbiotic relationships that can exist between two organisms. Similarly, we can visualize two entities “brand” and “celebrity”. To achieve a perfect success, there should be absolute symbiosis between the two entities. There may be one of the six effects to the celebrity endorsement process: -

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Celebrity endorsement is a complex process of balancing your risk with your gains.

“The pure and simple truth is rarely pure and never simple.”

- Oscar Wilde

Figure 2: The Symbiotic Model

• Mutualism (M): Both help each other (Example: Tata and Narayan Karitiken ,Amir Khan and Titan)

• Commensalism (C1): Only one among them is benefited (Example: A failed endorsement)

• Parasitism (P): One is benefited; other is harmed (Example: Azharuddin and Pepsi. Also, Home Trade & Shah Rukh Khan, Sachin Tendulkar)

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• Neutralism (N): None of them benefited or harmed (Example: Amitabh Bachchan, Abhishek Bachchan and Maruti Versa)

• Amensalism (A): Only one of them is harmed; other unaffected

• Competition (C2): Both are harmed

IMPACT-ANALYSIS FRAMEWORK

According to our study, the effectiveness of celebrity endorsers is not independent, but is moderated by several factors like - celebrity attractiveness and credibility, product-celebrity match, message and product type, level of involvement, number of endorsements by celebrities, target receiver characteristics and overall meanings (e.g. personality, values, standards) attached to celebrities. Besides these factors, environmental factors, regulative issues and compatibility with overall marketing strategy also influence the impact of the endorser.

We focus our study on the following categories .

The targeted consumer The celebrity endorser

The product

None of these factors can independently achieve a positive impact on the consumer; hence there exists an indispensable need for these factors to have certain characteristics and a tactical fit amongst themselves.

Along with factors which directly impact, we also study the following influencers which have an indirect effect on the way an endorsement is perceived –

Market Environment

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Overall Marketing strategy

Regulative Issues

A. Factors

I. Product

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Not every brand can and should be endorsed by celebrities. The brand’s image, personality & the buying involvement of the customer would determine whether or not a celebrity endorsement would be effective and also identify its endorser.

Research has proved that consumers would react more favourably to celebrity endorsers as against experts or typical - consumer endorser in products which are high on psychological and / or social risk. The celebrity creates a positive image and significantly impacts consumer’s intention-to-buy. Also, for products having aspiration value e.g. premium watches, cars, the celebrity creates the aura of elitism. Furthermore, products with high financial, performance or physical risk such as mutual funds, medical equipments, are evaluated more favorably when endorsed by a professional expert rather than by a celebrity. For products which are low in all five types of risk, typical consumer - endorsers are most effective since the consumers can relate to the character (Hershey H. Friedman and Linda Friedman).

II. Endorser

An Endorser can be defined as, “Any individual who enjoys public recognition and who uses this recognition on behalf of a consumer good by appearing with it in an advertisement”. The following inherent qualities in the endorser usually impacts the brand -

Credibility of image / Trustworthiness (Honesty, Integrity, Believability)

Competence / Expertise (in relation to the product)

Dynamism

Likeability

Attractiveness

Impact of Celebrity on the Brand

Plethora of research has tried to explore the effects that a celebrity exhibits. Celebrity endorsements: -

Creates and helps in retaining attention of the targeted audience.

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Achieves high brand recall in an environment with multitude of products.

Transfers of qualities associated with the celebrity to the product.

Perceived as entertaining .

Portrays trustworthiness due to lack of apparent interest

III. Consumer

Consumer is the factor being wooed by the company/product using the endorser. Hence, both the product & the endorser need to meet the expectations of the consumer, thus making it critical to understand consumer reactions to a given stimulus and product category in differing circumstances.

B. Interactions

I. Consumer - Endorser (C-E Interaction)

Sudden change of the celebrity image Drop in popularity of the celebrity

Loss of credibility due to over-endorsing

Disappearance of celebrity out of media flashlight

II. Brand - Endorser (B-E Interaction)

Every brand has a personality and the traits found in the brands should be reflected in the celebrity too. A mismatch leads to confused audience and lack of brand recall.

Worse, in some cases it might even lead to association of the celebrity with the competitors brand (e.g., Nerolac Paints where Amitabh Bachchan being a brand endorser of Nerolac paint was perceived to be associated with Asian Paints).

Is Celebrity Endorsement Always the Best Method for Promoting a Brand?

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Companies in many cases, prefer not to use a celebrity, but instead go ahead with a spokesperson which has been tailor made for the product by the company. The following are the advantage of such a strategy: -

• Control: Companies control the created spokesperson as it has been built in conformity with the brand and target audience, and hence can be ensured with a consistent image. Unlike in case of celebrities where the celebrity’s persona both present and past have been created over the years.

• Single utilization of created endorsers: Such spokespersons are exclusive for a brand and hence avoiding any brand conflict.

• Association over a long time period: The spokesperson creates a permanent image by a long and steady association.

• Focus more on brand and its features: In Non-Celebrity advertisements the main focus is on the brand and its characteristics while in celebrity the focus sometimes shifts entirely to the celebrity’s features and their aura & hence the medium fails in carrying the main message across.

Examples of such endorsement are Gattu - Asian Paints, Fido-Dido - 7Up, Hutch - Boy.

C. Influencers

I. Market Environment

It indirectly impacts the effectiveness of a campaign. Celebrity campaigns create stronger impact in saturated markets as products lack differentiation and clutter is huge. E.g., Indian soft drink industry heavily depends on celebrity endorsement for promotion.

II. Marketing Strategy

Both single celebrity endorsing multiple products and multiple celebrities endorsing single product at the same time reduces association of product and celebrity and reduces impact (e.g., Pepsi - where multiple celebrities are endorsing the product at the same time which takes the brand away from getting associated/

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dependent on any celebrity. Hence, impact is also influenced by the marketing strategy followed by the company.

III. Regulative Issues

Promotion of products like Beverages and Cigarettes is tightly regulated by authorities who impact the effectiveness of celebrity endorsement (e.g., Beverages in India are being promoted using surrogate advertisements and hence a celebrity endorses a secondary product of the brand and not the primary product- Ajay Devan for Bagpiper Soda). This reduces the effectiveness of the campaign.

KINDS OF CELEBRITY-HOOD - THEIR IMPACT ON BRANDS

(1) Product Placements

While the movie 'Taal' brandished Coke bottles unabashedly,

(2) Celebrities Co-Owning the Brand

Madhuri Dixit and Emami 'Beauty secrets by Madhuri' range

(3) Fictional Heroes

Shaktimaan has sold Parle-G, and Popeye single-handedly revived the consumption of spinach in the US.

(4) No More but Celebrities Still

Campaigns created around a dead personality was the 'Kar lo duniya muthi mein' campaign for Reliance featuring Dhirubhai Ambani

(5) Page 3 Celebrities

(6) Celebrities for a Cause

The Pulse Polio campaign being coordinated by UNICEF for the Ministry of Health and Family Welfare had Amitabh Bachchan and Sachin Tendulkar

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(7) Spoofing

Mirinda spoofed the Hutch puppy (a celebrity in its own right).

(8) MascotsRonald McDonald, the Amul girl

(9) Men are from Mars, Women from Venus

John Abraham lends his rugged image to Yamaha bikes while Priety Zinta lends her cute dimples to peddle Scooty.

(10) Celebrities Lending their Name to Brands

Sharukh Khan, Amitabh Bachchan and Rekha have perfumes named after them

(11) Company Owners Being Celebrities

Vijay Mallaya and Richard Branson who are walking talking celebrities and endorse their own brands through their extravagance, their flamboyant lifestyle

(12) Political Leaders

The 'India Shining' campaign from the BJP and the 'Congress ka haath aam aadmi ke saath' campaign from the Congress with Vajpayee and Sonia Gandhi lending their faces

(13) Using a Social Proposition Built Within the Brand

The Surf campaign done by Revathy and Shabana Azmi (in the south and north respectively) which stressed on the prudent usage of valuable water was a social proposition cleverly inter-woven in the brand.

(14) Duration of Usage - Promotional or Long Term Strategy

Short-term example is the Rani Mukherjee campaign for Bata which is believed to have helped boost sales for the ladie's footwear brand, Sundrop, by a whopping 500 per cent. The same Rani Mukherjee has a longer association with Fanta and Munch.

(15) Stealth Advertising

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Since a cynical public no longer believes that celebrities actually use the products they endorse in commercials. Revlon launched an online marketing campaign targeting female customers via chat rooms talking about who Revlon's new face would be. Consequently the announcement of Halle Berry as Revlon's new face was met with great anticipation.

(16) Foreign Celebrities

Jackie Chan doing a Discover commercial or a Boris Becker doing a Siyaram commercial

(17) Unintentional Celebrity Endorsements

The year before the late Princess Diana bought an Audi, they sold just about five hundred pieces in the UK. The following year sales figures were close to ten thousand mark. John Abraham haybusa

SELECTION OF CELEBRITY

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RESEARCH & ANALYSIS

The purpose is to provide the marketers with a quantitative method for selection of the right celebrities to optimize the outcome for their advertising campaigns. We have developed three matrices, which are: -

Celebrity Positioning Matrix , which gives the popularity and image details of a personality in the market

Product Positioning Matrix , which is the direct consequence of the brands competitive strategy

Area Correlation Matrix , which is the overall measure of match of brand and celebrity

These two matrices are used to develop two variables: -

Celebrity Effectiveness Index

Total Area Correlation Score

The two variables can be used to decide on the appropriate celebrity for the brand. The model also helps in minimizing the cost with optimization of effect.

The study is done in two stages, exploratory research involving personal interviews and focused group discussion followed by primary data collection and analysis.

Model Development

For the purpose of our study, we divided all companies and brands into twelve categories mentioned below: -

1. Creator / Innovator: Products or personalities famous for disruptive, architectural, modular or incremental innovations, e.g., White Goods2. Caregiver: Personalities or products which give the perceived benefit of security and care, e.g., Insurance Companies 3. Jester: Personalities or products positioned for fun and

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frivolous activities, e.g., Wafers4. Magician: Personalities or products which claim to produce results which are unexpected, e.g., Hair oils for enhancing growth5. Hero: Personalities or products that prompt courageously action, e.g., Red & White Bravery Awards.6. Ordinary Guy: Personalities or products that have slice of life execution format, e.g., Peter England7. Lover: Personalities or products that claim tender care, e.g., Beauty Soaps8. Innocent: Personalities or products that retain and renew faith, e.g., Johnson & Johnson9. Sage: Personalities or products for guidance and opinion, e.g., Newspaper10. Outlaw: Personalities or products that encourage to break the rules, e.g., Jeans11. Explorer: Personalities or products that claim self enhancement through exploration, e.g., Jeeps12. Ruler: Personalities or products that show how to exert control, eg., Tires

Archetype matrix for brands and celebrities:

Creator/Innovator Caregiver Jester Magician Hero Ordinary Guy Lover Innocent Sage Outlaw Explorer Ruler

Variables Developed

Celebrity Effectiveness Index (CEI): This is a parameter defined to evaluate the effectiveness of a personality to interact with customer and create desired impact. It is the sum of average score of each archetype for a personality.

Area Correlation Index of Brand and CEI: This we have defined as the weighted product of corresponding archetypes of brands and celebrities.

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HypothesisH1: A brand-celebrity area coefficient is positively related to audience brand-celebrity connection.

The concepts developed can be used by celebrity clients for effective decision making. The objective of a client can be described as follows: -

To maximize area correlation of the brand-celebrity rectangle subjected to: -1. Minimum Costs 2. Minimum Risks

The details of the variable in the above-mentioned objectives are described below: -

Costs Associated:1. Endorsement fees 2. Feature establishing costs 3. Feature enhancement costs 4. Feature sustaining costs

Risks Associated:1. Mismatch risk 2. Celebrity feature transition risk 3. Celebrity feature mortality risk

The steps involved in testing of hypothesis are as follows: -Step 1: Calculate CEI for celebrities and companies Step 2: Calculate area correlation matrix for the same Step 3: Compare the success of the campaign with the area correlation matrix

Methodology

Calculation of Celebrity Effective IndexRespondents were given a name of a celebrity and asked to rate the personality as against the archetypes defined earlier. The sampling was convenience sampling and sample size of hundred for each celebrity.

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Ten celebrities were selected for the purpose. The selection was based on three distinct focused group discussions done with SEC A, B, C Category of members with 10 members each. The top ten most frequent celebrities recalled or recollected as brand ambassadors were chosen for the further studies.

Methodology

Primary survey was conducted to list down the brand against the above-mentioned ten celebrities. The most

frequent reply was recorded. The brands were then subjected to archetype scoring, and area correlation was

calculated. From secondary data, other endorsees, if existing, were recorded and the process was repeated. For this other endorsee, the least frequent or

non-existing celebrity was selected from the list of CEI calculation celebrities.

Celebrity BrandAlternate Celebrity*

Amitabh Bachchan

Polio Shah Rukh Khan

Shah Rukh Khan

Santro Preeti Zinta

Sachin Tendulkar

TVS Victor Brett Lee

Saurav GangulySona Chandi Chavanprash

Mohammed Kaif

Rahul Dravid Hutch None

Hrithik RoshanTamarind (S.

Kumars)None

Aishwarya Rai Nakshatra Katrina KaifKareena Kapoor Airtel A. R. Rehman

Saif Ali Khan Ruffle Lays Nawab PataudiPreeti Zinta Pepsi Yuvraj Singh

* The celebrity that was recollected the least by respondents.

Results

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Celebrity Effectiveness Index (CEI)

The ten celebrities and the survey results are as follows: -

1. Amitabh Bachchan : CEI = 55

Creator/Innovator 2 Caregiver 8 Jester 3Magician 6 Hero 8 Ordinary Guy 1Lover 5 Innocent 3 Sage 8Outlaw 1 Explorer 2 Ruler 8

2. Shah Rukh Khan : CEI = 54


3. Sachin Tendulkar: CEI = 53


4. Saurav Ganguly: CEI = 42

Creator/Innovator 6 Caregiver 5 Jester 2

Magician 3 Hero 7 Ordinary Guy 1

Lover 2 Innocent 2 Sage 2

Outlaw 1 Explorer 6 Ruler 5

5. Rahul Dravid: CEI = 45


6. Hrithik Roshan: CEI = 50


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Magician 3 Hero 8 Ordinary Guy 1Lover 6 Innocent 8 Sage 3Outlaw 1 Explorer 4 Ruler 5

7. Aishwarya Rai: CEI = 49


8. Kareena Kapoor: CEI = 46


9. Saif Ali Khan: CEI = 44


Magician 3 Hero 6 Ordinary Guy 4

Lover 7 Innocent 2 Sage 2

Outlaw 1 Explorer 2 Ruler 2

10. Preeti Zinta: CEI = 49


Thus, CEI calculation was made for the ten celebrities. The CEI is quantitative measure of: -1. Popularity2. Image and positioning

Brand Positioning Index for Brands

Polio Eradication Campaign:

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Santro:


TVS Victor:


Sona Chandi Chavanprash:


Hutch:


Tamarind (S. Kumar's):


Nakshatra:


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Airtel:


Ruffle Lays:


Pepsi:


Thus, the calculation is analogous to CEI but is for companies or products. The outcome is the direct reflection of company's positioning strategy.

Alternate Celebrity CEI Calculation

1. Brett Lee : CEI = 45


2. Mohammed Kaif : CEI = 35


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3. Katreena Kaif : CEI = 35


4. A. R. Rehman : CEI = 38


5. Nawab Pataudi : CEI = 31


6. Yuvraj Singh : CEI = 37


Calculation of Area Correlation

The corresponding cells of brand and celebrity are multiplied to calculate what we term as Brand-Celebrity Area Correlation.

The following table shows the results of above mentioned ten brands: -

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BrandSuccess Celebrity

Failure Celebrity

Polio 224 162 Santro 263 215 TVS Victor 277 186 Sona Chandi Chawanprash

177 92

Hutch 200 - Tamarind 186 - Nakshatra 234 100 Airtel 247 148 Lays 190 70 Pepsi 186 155

We term the celebrity with maximum recall as successful celebrity and with minimum recall as failure celebrity.

Conclusions & Recommendations of survey

The test of Hypothesis 1 shows that it is 100% accepted for the ten cases presented. Thus, we can say that area correlation matrix is a good predictor of success of a campaign. Moreover, the CEI is also a good predictor of popularity of the celebrity. Brands generally will have lower CEI than

Personalities due to deliberate attempts to have strong positioning to fight competition and develop competitive advantages.

The following recommendations are made to brand managers and account managers: -

1. The cost of an endorsement will be a positive correlated function of CEI2. The popularity of the campaign is a function of area correlation matrix3. If the right match is found between the brand and

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celebrity, popularity of the campaign can be optimized4. The cost of the campaign can be reduced by involving celebrities with high polarized archetype value which matches with the brand

Limitations

The CEI and area correlation are highly time dependent. The image and archetype of a personality is often volatile and may change with time. The use of the method involves:-

1. Repeated surveys for CEI calculations.2. Keeping track of celebrity activities.3. Continuous search for new and emerging celebrities.

Appendix

Brand CelebrityUnaidedAssociati

on

Comptibilty

Index

Trait Fit

Index

Thums-up

Salman Khan 93 93 100

Coke Hrithik Roshan

83 100 50

Adidas Sachin 73 85 25

Samsung Tabu 54 68 25

Source: Cognito FCB ULKA 2002

Table 1: Compatibility Index & Trait Fit Index of 4 Brands

Aspect of Brand

Image Celebrity Product

Attractiveness Elegance

Renuka Shahane

Whisper

Beauty Madhuri Dixit Emami

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Classy Saif & Tiger Pataudi

Asian Paints-Royale

Stylish Fardeen Khan

Provogue

Amitabh Bachhan

Reid & Taylor

Trustworthiness

Honest Tarun Tejpal Tehelka

Reliable Sachin Tendulkar

TVS Victor

Expertise

Knowledge

Sachin & Sehwag

Reebok

Qualified Naina Balsavar

Shampoo

CASES ANALYSIS USING THE FRAMEWORK

To test the contribution of an endorser in the light of various factors, interactions and influencers we apply the following criteria and see if the results agree with the proposed model -

Increased Brand Awareness (In terms of recall of copy points, ad ratings)

Attitude towards the brand

Purchase intent of the consumer

Believability in the message being conveyed

CASE: CELEBRITIES - TO USE OR NOT TO USE

Situation 1: Cadbury has always come up with sweet, emotional, clutter breaking commercials. Who can forget the lady dancing on the cricket pitch to celebrate her boyfriend's century. But when the company was hit with the worm controversy it had to rope in the national icon Amitabh Bachchan.He embodied the values of Cadbury as a brand and connected with all of India - mothers,

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teenagers, children, media persons and trader partners. The 'infomercial' that followed had Bachchan first voicing his own concerns, and then assuring consumers that his doubts had been satisfactorily laid to rest (after the factory visit).This reinstated customer faith in Cadbury and sales have now touched pre-worm crisis days.

Situation 2: Asian Paints will always be remembered for its 'Mera wallah cream' campaign and more recently the 'Wah Sunil babu' campaign. There have been very forgettable celebrity endorsements from Akshaye Khanna and Saif Ali Khan in the past (probably people were not able to visualize stars painting their own walls). This is a case of a company whose non-celebrity commercials have done way better than their celebrity campaigns in terms of recall and message delivery.

Cases

1. Sharukh Khan - Mayur Suitings (Positive Impact)

”Sharukh Mayur Khan” is how this product came to be known, Sharukh brought to the product his persona of high class lifestyle, giving the consumer the belief to aspire and good clothing a sure way to reflect the aspiration. The ad shows a great fit between what the product stands for, what the consumer expects and what the celebrity means to the consumer, hence explaining the strong impact in sales and brand recall.

2. Dharmendra - Rajdoot Motorcycles (Positive Impact)

This strong man from yester years, still resonates as the only brand ambassador, who managed to sell a motorcycle in each and every corner of India in the 80’s. Dharmendra’s image of being a brawny man, hailing from the rustic roots of India, gave Rajdoot motorcycles the perfect brand ambassador it was looking for. He not only gave to the product a sturdy and robust image, but also brought to the product trust and honesty which it was trying to build in its first time buyers.

3. Amitabh Bachchan (Cluttered Identity)

Our framework argues that exclusivity makes the product-celebrity association stronger thereby making the product resonates with

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the qualities of the celebrity. In cases where the celebrity endorses multiple products, he dilutes his equity.

There’s no better example in the Indian industry than Amitabh Bachchan who endorses ICICI Bank, Cadbury, Versa, Dabur, Rin, Parker Pens, Pepsi, Nerolac Paints and many more. In each of the cases the ads use some or the other attribute of Amitabh to endorse the product, but makes no strong link in the minds of the consumer. Hence in the end the consumer is lost and has difficulty identifying, what does Amitabh really stand for?

4. Rani Mukherjee - Hero Cycles (Negative Impact)

Rani Mukherjee endorsing a cycle makes a case where the celebrity is used only for her popularity without looking for Brand-celebrity fit.

Cycles in India are generally used by men and the target segment belongs to low income group. By using Rani, the consumers could not be assured of the product’s qualities and could not relate the product to the ambassador. Hence, the consumers were not motivated towards the product and the ad was called back, thereby emphasizing the need for a brand-celebrity fit.

5. Hutch - The Child and the Dog (Created Spokesperson)

Hutch managed to grab the attention of the consumers, by not using a celebrity. The child and dog campaign came across as a fresh initiative at endorsing a product. The child and dog have had a very high brand recall as they represent only Hutch and have been created by the company according to the needs of the product and the message. It communicates to the consumer, “We are there, wherever you are and that too unobtrusively.” The protagonist says all of the above and creates a strong bond with the consumer.

6. Mohammad Azharuddin - Britannia (Change of the Celebrity Image)

Mohammad Azharuddin, at the peak of his career was a brand ambassador for an assortment of products. But the match-fixing case besmirched his image and all of the products started disassociating their endorsements from him.

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Thus, a product is sold on basis of the qualities of the endorser and with a change in the inherent value system of the celebrity; the bond with the consumer is lost.

7. Narain Karthikeyan - Jordan / Formula 1 Racing (Entering International Markets)

A celebrity’s endorsement through various cultural and social roadblocks is one of the critical applications of our model; Narain is a case in point. The popularity of F1 as a sport in India owes its genesis to use of Narain as a brand ambassador of the sport. His image and persona has been used by the sport and the Jordan team to create brand awareness in India.

8. Sachin Tendulkar - Fiat Palio (Financial Viability)

Sachin Tendulkar was paid a huge sum of Rs. 12 Crore to endorse Fiat Palio, even though Tendulkar as a brand could command such an exorbitant amount. It’s for the company to evaluate if the returns generated by the endorsement would commensurate the initial spend. In this case due to excessive spending and failure of the product to take-off the advertisements had to be withdrawn.

CONCLUSION

There is an increasing challenge to the marketing manager to develop and implement an integrated marketing communication (IMC) plan to realize the true value of the celebrity endorsements. There is a gradual shift from the traditional approach of showing celebrities in advertisement to making them the “spokes-person” of the brand. Companies have taken celebrity endorsement to next level by projecting brands as a way of life. Smart companies are using their brand ambassadors in other mediums such as movies to promote their brands.

E.g., Amitabh Bachchan, who endorses the financial instruments of ICICI Bank, is shown as a branch-manager of ICICI Bank in the movie Baghban.

Wooing the key existing and potential target customers is the trait of a successful promotion strategy. However, the marketing manager should be able to offer significant value propositions in the services / products offered to the customers. Thus, one needs

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to integrate celebrity endorsement with other marketing programs and ensure that the celebrity attributes align with the overall brand or company. Companies that succeed in developing such an integrated IMC plans is the one to succeed in the long-term.

Annexure 1: Story Board of Parker Beta

Amitabh Bachhan gets a warm welcome at an Annual Function of a college. As he acknowledges the delirious students... ... around him, a young girl breaks across and runs up to him. “One autograph please,” she pleads. He obliges smilingly.

He scrawls his signature across the page and stops to examine the pen. Turning the page, he signs on afresh and clarifies, “Dost shost ke liye.”

He repeats his action and adds, “Bhai shai.” The girl is dumbstruck and nods wordlessly. One more and he adds, “Padosi to honge.”

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Yet another page succumbs, ‘Chachi wachi. What a great pen!” The girl just nods her assent.

He repeats his action and adds, “Bhai shai.” The girl is dumbstruck and nods wordlessly. One more and he adds, “Padosi to honge.” Yet another page succumbs, ‘Chachi wachi. What a great pen!” The girl just nods her assent.

MVO: “New Beta from Parker. Dil chahe likhte jaayen.” The shot of the auditorium, now deserted... ... except for the girl and her idol. He continues to sign as she dozes next to him, “Doodh wala, paper wala, dhobhi...”

Through analysis and research, this paper brings forth the following insights: -

Celebrity endorsements do work in the Indian scenario. The level and the magnitude of the effect vary with the celebrity and the product category but most endorsements have a favourable impact.

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The consumer looks for a variety of aspects from the endorsement like the credibility and likeability of the endorser. Credibility also means the fit between the brand and the celebrity.

Multiple endorsements do clutter the minds of the consumer.

When one endorser endorses many brands, then the recall of the endorsement depends entirely on the power of the brand. There are definitely some brands that go unnoticed and the recall for those stands is at a bare minimum. The company in that case can heighten the advertising content because that grabs a special place in the mind space of the consumer.

It is not just the financial gains from the endorsements that matter to the celebrity. They also look for the fit with the brand and what the endorsement might do to their image.

Professional performance of the endorser is important in deciding the success of the endorsement. However, the bad performance should be stretched so as to make sense to the audience.

More than the bad performance in the professional field, it is the association of the celebrity with a controversy or ill-behaviour that causes negative impact to the endorsements. During the match fixing scandal in India, the commercials featuring Ajay Jadeja and Mohammed Azharuddin were all taken off air so that they did not have a negative effect on the brand.

The celebrities’ accessibility, regional appeal factors, popularity, attractiveness, belief system are some other important platforms, which are raised when we study the impact of celebrity endorsement on brands.

Studies indicate that celebrity endorsement has worked well in some consumer segments while failing in others. Few celebrities have been more successful than those with almost parallel fame. So the role of celebrity endorsement in the advertising space is equivocal and cannot be seen as a assured strategic tool to win profits, market share, revenues, etc.

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Consumers can identify the clear difference between a good script and a good brand idea. For example, while Pepsi’s Sachin and Bachchan (kite flying) ad was seen as one with a good script, Coca-Cola’s Thanda Matlab... was seen as an insightful and strong brand idea. For all the flak it drew in its vainglorious attempts to run down competition, Thumbs-Up was seen as the only example of seamless linkage between brand positioning and brand celebrity.

Celebrities do not make brands but ideas do. Celebrity endorsement is also one of the ideas. If not then brands would have vanished when the hype and hoopla around the celebrities faded. Thus, the need of the hour is to focus less on your Return-on-Investment, and think more in terms of your Return-on-Ideas.

“There is one thing which is stronger than all the armies of this world, and that is an idea whose time has come.”

- Victor Hugo

As has been identified in the analysis framework, the impact of any Celebrity endorsement campaign depends on three factors - Brand, Customer and Endorser as well as the interrelationship between -

Brand and Endorser (B-E Interaction) Consumer and Endorser (C-E Interaction)

Hence, a celebrity is required to have not just a certain minimum level of qualities, but there should also be a tactical fit between the constituting elements of the model. As has been seen in the cases, celebrity endorsement can impact brands in both positive and negative manner. It has acted as a panacea for companies such as Cadbury’s during the phase when the brand was on the verge of losing its hard owned equity in the same time also has been used effectively in making the Anti-Polio Campaign a grand success.

Therefore, before designing any promotion, one must study how each of the factors involved complement and fit in with the other’s requirement. However, a number of brands have been built without celebrity endorsement. For some of their brands, Hindustan Lever and Procter & Gamble do not believe in celebrity endorsement because they think that consumers, especially housewives, are

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more likely to identify with a lay person on screen than a celebrity. Procter & Gamble launched its 'Rejoice' brand in India with testimonials from ordinary women in their TV advertising. Few more examples of this will be Lifebuoy, Wheel, Dettol, Close Up, Fevicol etc.

FACTS AND FIGURES :-

Approximately 60-70% of all television commercials feature famous people.

Aishwarya Rai had once endorsed 'Fuji-Film' camera rolls. The company made an agreement with her to endorse their camera rolls. But, Aishwarya's magic did not work there and they had to terminate the contract.

Amitabh Bachhan (AB) was seen endorsing Maruti's Versa Car. The AB factor worked wonders as far as generating curiosity was concerned but the actual product couldn't meet the expectations of people, and hence, the endorsement strategy didn't work. He has been used very effectively by Parker Pens, ICICI Bank and Cadbury's to name a few.

Bata's sales doubled soon after they adopted Rani Mukherjee as their brand ambassador.

Magic Johnson lost his endorsement deals when he announced in 1991 that he's HIV-positive. It wasn't until July 2003 that he landed his first endorsement deal since the announcement.

Ticket sales at Wimbledon are known to have shot up significantly for all matches featuring the latest 'sex-symbol' on the circuit - Anna Kournikova. An average player who is yet to win even a single tennis tournament, Anna is known to have earned far more from endorsements than her tennis career could ever have given her

49 per cent growth in Celebrity endorsement advertising volumes on TV during 2007 compared to 2006.

Celebrities from Film Industry lead with 81 per cent share of overall Celebrity endorsement advertising pie on TV during 2007.

'Aerated Soft Drink' was the top category with maximum advertising volumes of Celebrity endorsement during 2007.

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Celebrity endorsement on TV saw a whopping growth of six times during 2007 over 2003

'Shahrukh Khan' had maximum number of advertisers in his kitty during 2007.

Film Celebrities had the largest chunk i.e. 81 per cent share of overall Celebrity endorsement on TV during 2007.

Sports and TV personalities took the second and third rank with 14 per cent and 5 per cent share respectively during 2007.

Film Actors accounted for 50% share followed by Film Actress and Sportsmen with 31 per cent and 14 per cent share of Celebrity endorsement on TV during 2007.

V olume Growth in Celebrity endorsement on T.V.

Share of Celebrity Profession on TV during 2007.

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Share of Top 10 Categories with Celebrity endorsement advertising volumes.

Top 10 categories share aggregates to 40 per cent of total advertising volumes of Celebrity endorsement on TV during 2007.

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'Aerated Soft Drink', 'Cellular Phone Service' and 'Toilet Soaps' were at the top three positions of top 10 categories with maximum advertising volumes of Celebrity endorsement on TV during 2007.

Top three Celebrities Visibility per day on Television through commercials in 2007.

During 2007 top three position of maximum visible celebrity on TV was occupied by Film Actors viz. Saif Ali khan, Shahrukh Khan, Amitabh Bachchan.

(1 April, 2008)

(Analysis from AdEx India - A Division of TAM Media Research)


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http://www.indiantelevision.com/tamadex/y2k8/apr/tam14.php

REFERENCES

Bibliography :

Positioning: A battle for mind - Jack Trout and Al Ries Erdogan (1999), "Celebrity Endorsement: A Literature

Review", Journal of Marketing Research, 15, 291-314 Hindu Business Line, 2003,Tellis, Effective Advertising:

Understanding When, How, and Why Advertising works McCracken, Grant (1989), "Who is the Celebrity Endorser?"

Journal of Consumer Research, 16 (December), 310-321. Business Standard, May 13, 2005 Dean (1999), "Brand Endorsement, popularity, and Event

Sponsorship as advertising cues affecting consumer Pre purchase attitude", Journal of Advertising, Volume XXVIII, Number 3, 1-12

Goldsmith, Lafferty and Newell (2000), "The Impact of Corporate Credibility and Celebrity Credibility on Consumer Reaction to Advertisements and Brands", Journal of Advertising, Volume XXIX, number 3, 43-54

L. K. Marhur, I. Mathur and N. Rangan (1997) June, "The Wealth Effects Associated with a Celebrity Endorser: The Michael Jordan Phenomena", Journal of Advertising Research,

B. Zafer Erdogan, Michael J. Baker and Stephen Tag (2001) June, "Selecting Celebrity Endorsers: The Practitioner's Perspective", Journal of Advertising Research, 39-48

Tripp, Jensen and Carlson (1994) March, "The Effect of Multiple Product Endorsements by Celebrities on Consumers' Attitude and Intentions", Journal of Advertisement Research, Vol 20, 535-547

Agrawal and Kamakura (1995) July, "The Economic worth of celebrity endorsers: An event study analysis", Journal of Marketing, Vol 59, 56-62

Aaker, David A. (1996), Building Strong Brands. New York, NY: The Free Press.

Daneshvary, Rennae and R. Keith Schwer (2000), "The Association Endorsement and Consumers' Intention to Purchase," Journal of Consumer Marketing, 17 (3), 203-213.

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Friedman, Hershey H. and Linda Friedman (1979), "Endorser Effectiveness by Product Type," Journal of Advertising Research, 19 (5), 63-71.

McCracken, Grant (1989), "Who Is the Celebrity Endorser? Cultural Foundations of the Endorsement Process," Journal of Consumer Research, 16 (3), 310-321.

Websites:

www.thedayaftertomorrow.com www.synovate.com – 2003 www.indiantelevision.com www.magindia.com www.blonnet.com www.rediff.com – article by Country head, O&M India indiainfoline.com – article 'Celebrity Endorsements in

brands. www.coolavenues.com

For more Notes, Presentations, Project Reports visit a2zmba.blogspot.com hrmba.blogspot.com mbafin.blogspot.com

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The End

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impact of celebrity endorsements on brands project report

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