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Written Analysis and Communication

Group Assignment No 1 Research Proposal INFLUENCE OF ADVERTISEMENTS ENDORSED BY
CELEBRITIES ON CONSUMER BUYING BEHAVIOUR

Submitted by 1. Mansi Doshi (121330) 2. Namit Mehta (121333) 3. Soumya Naithani (121363) Section: C Institute of Management, Nirma University November 5, 2012

CONTENTS:
1. Introduction 2. Literature review 3. Methodological discussion 4. Expected result 5. Reference

INTRODUCTION:

BACKGROUND
The Advertisements belong to the Media and Communications Industry i.e. it is a form of communication. As defined by most sources it is a form of communication for marketing and used to encourage and persuade an audience to continue or to take some new action. Celebrity endorsement can be defined as the use of celebrities in order to increase their sales or/and to recall value of a brand. Research has shown that the use of celebrities in advertisements can have a positive influence on the credibility, message recall, memory and likeability of the advertisements and finally on purchase intentions.(Menonet al.2001). In our research we will be selecting a celebrity who is a prominent personality and we will research the effects on the buying behaviour after his endorsements. The companies that will be interested in this research are all those companies who advertise their products on television and want to take celebrity endorsements as an approach of advertising. Companies like kurkure who juhi chawala endorses, Tag Heure watches- Shah Rukh khan, etc. these companies already indulge in celebrity endorsements. Such a personality is sorted to be taken up for our research. This research will be beneficial to them because it will give them an insight into how celebrity endorsements influence the viewers or the current buyers and how it induces buying behaviour and eventually the sales of that particular product. The decision makers in such companies are the head of the marketing team, The Marketing manager. The decision that this research will help them to take is whether it will be advantageous for the company to use celebrity endorsers for their Add campaign.

CONCEPTUAL FRAMEWORK:
Celebrity endorsements has become the most famous and the most efficient way of advertising and it almost guarantees success in all cases because the influence of celebrities esp. Movie Stars on the
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general public has increased to tremendous amounts. It is a very current, on-going trend to have the celebrity be the face of the product. This trend is successful because the influence not only limits to advertisements. For eg. If Salman Khan has a particular style in a film then it trends to become a fad so if he endorses a brand then according to the general observed behaviour that is bound to induce a buying behaviour. These days celebrities are associated with the product on the basis of the type of the product matching with the celebrity and also a certain status symbol is also attached with it. For eg. Sachin Tendulkar for Boost because it is an energy drink associated with sports and who is a better sports person than Sachin Tendulkar. Such analogies are associated to strengthen the brand image and thus the sales.

RATIONALE:
Our purpose for doing this research is to establish a relationship between the celebrity endorsement and the buying behaviour. To provide concrete evidence as to how an advertisement endorsed by a celebrity induces the buying behaviour and thus the sales.

RESEARCH OBJECTIVE
1. Evaluating how the celebrity who has endorsed the product induced the buying behaviour in the consumers who watched the advertisement that is how the ad influenced the consumer to purchase the product. 2. How well does the celebrity connect with the product he endorses because this is an important factor.

LITERATURE REVIEW
The paper by Doss aims at examining the attitude of the brand and the transference of that image on the celebrity endorser. In all research papers, the effect of the celebrity on the endorsed product is studied but this paper studies the reverse relationship. Celebrity endorsements are the most widely used strategy where celebrities are used as a promotion tool. These endorsements can have celebrities giving expert opinions, being a spokesperson for a product, or just being associated with the product. ( McKraken et al. 1989). The credibility of celebrity endorsers is considered to consist of three constructs: attractiveness, trustworthiness and expertise (Ohanian, 1990). So according to the transfer theory, there will be an association transfer (De Mooij, 2005) or a meaning transfer (Mc Kraken, 1989) through the direct relationship between the celebrity and the product. The Page 3 of 11

relationship process is thought to allow the celebrity to transfer his/her perceived qualities to the actual product. So to test the above mentioned constructs, in total 8 hypotheses were constructed where the attitude of a poorly and positively brand, were tested each on the following characteristics: attractiveness, trustworthiness, expertise and finally total credibility. It was observed that the attitude towards a negative brand significantly influenced the perceived attractiveness. So it implies that a poorly viewed brand influences all the above constructs and additionally the negative brand significantly influenced the total credibility. In the second analysis, the attitude towards the positive brand did not significantly influence the perceived attractiveness. Thus, it was observed that the positively perceived brand does not the attractiveness or the trustworthiness of a poorly perceived celebrity. But the attitude towards the positive brand did significantly influence the perceived expertise. So to sum up the positively perceived brand does influence the expertise and overall credibility of a poorly perceived celebrity. The purpose of this research by Kamins, Brand, Hoeke and Moe is to examine celebrities that use a two-sided format in which the celebrity spokesperson makes both positive and negative statements regarding the advertised product. It is designed to enhance both the celebrity effectiveness and over all advertising effectiveness by increasing perceived credibility. The study compares the two-sided format to the one-sided format where the celebrity only makes positive claims about the product. Although previous studies have found the individuals to be likeable or attractive, but these favourable perceptions have not consistently carried over to enhance measures of believability and purchase intentions. Friedman and Friedman (1979) found empirical evidence that in promotion of products high in psychological risk or social risk, use of a celebrity endorser would lead to a greater believability, a more favourable evaluation of the product and advertisement, and a significantly more positive purchase intention than advertisements using an expert or typical consumer endorser. According to Tripp, Jenson and Carlson the celebrity endorsers takes on meanings that carry from ad to ad, does endorsing multiple products affect those assigned meanings such that the consumer perceives the celebrity to be less credible and less likeable?( Kaikati, 1987?) . This research aims to study the consumer perceptions and favourable attitudes towards ads and brands if multiple endorsements are involved. Also what effect does it have on the purchase decisions. The research states that they are yet to learn how consumers evaluate the endorser, ad and brand when introduced to the multiple product endorsers through ad exposure. The results of the study showed that reactions to multiple product endorsers versus single product endorsers tented to be prefaced with the adjective more. While informants thought the more money caused celebrities to endorse more than one product, this motive did not necessarily reflect negatively on the endorser. Also there were no signs where there was any negative image being Page 4 of 11

created or perception towards the celebrity, products, or ads, of multiple product endorsers. Over all, it can be said that the effect and perception was positive. According to Biswas, Hussain and ODonnell,it has been estimated that one quarter of all advertisements employ a celebrity spokesperson to endorse a product or brand (Shimp, 1997) to the extent that it is a global phenomenon today. They are used to stimulate purchase and influence the buying behaviour. This is like a persuasive communication. According to Mc Cracken(1989), celebrities transfer meanings to brands. Using a celebrity can help in brand recall, increase sales and help in global marketing. Credibility and attractiveness are two important components of advertising. If the source is credible and attractive the result is more effective. A person may link these attributes with the product. The more similarity between the endorsee and the product, the more believable is the product. It has been noted that advertisements can be perceived differently by people from different cultures. Hence, it is important to understand the similarities and differences in different cultures. Advertisements that reflect the culture of the society are more persuasive. Hofstedes model (1980) identified four dimensions to assist in differentiating cultures: power distance, individualism, masculinity, and uncertainty avoidance to assist marketers to understand cross cultural differences. It is important to understand the local cultural in order to succeed. The example taken in this article is of India and the U.S. it was found that though the impact of using a celebrity is same for both the cultures, the way it affects their perceptions is different. According to Spilski and Groeppel the influence of the persona created by celebrities in their fictional character. When people see a celebrity, they usually link him with his fictional character. According to McCracken (1989, 312), a celebrity known from fictional media is a composite of his or her fictional roles. People dont connect with a celebritys personal qualities but his fictional characteristics. It is believed that a persons image exists beyond the program and and actually influence a consumers real world. Research on media context effects has found that "consumers' reactions to advertising are affected by their response to the program or print material in which the advertising is inserted" (Wang and Calder 2006, 151). The popularity or acceptance of the character has a great impact. Consumers tend to built a parasocial relationship with a character and regard them as a friend/counsellor. This increases the credibility of the product as the viewers accept the advice of the celebrity. Such a strategy of influencing the viewers through a fictional character is successful because the character is already in their minds and helps them reconnect easily. When an advertisement overlaps with a film scene like an extension, it is more popular. Such a media has three positive effects on a consumer, the phasic arousal reactions to the advertisement, the evaluation of the endorser, and the evaluation of ad characteristics. This means that it will generate a positive response in comparison to the situations where a non-fictional character is used.

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A person is exposed to many advertisements every day and every brand tries its best to grab attention of the potential customers. It uses different strategies to create awareness about their brand and the product it offers. Celebrity endorsement is one such way. The usage of celebrities in Indian advertising has increased phenomenally in the last 5 years. Celebrity endorsement is used as a strategy for bridging the gap of effective communication between the marketers and the consumers. [1]According to McCracken (1989), a celebrity could be defined as, any individual who enjoys public recognition and who uses this recognition when they appear in the advertisement in front of the consumers. According to (Kamen, Azhari and Kragh, 1975), a celebrity spokesperson may play multiple roles like that of a spokesperson, endorser, provider of a testimonial, or an actor. A spokesperson represents the company or brand like a salesman, while an endorser is associated with the brand even though he may not be an expert in the product category of the brand. In case of testimonials, the superiority of the product is attested by an individual or the personal experience of the celebrity. Lastly, the celebrity actor is only a character in a dramatic presentation in the advertisement. According to Atkin and Block (1983), celebrity endorsers have been found to produce more positive responses towards advertising and greater purchase intentions. Theory and practice proves that use of celebrities in advertising generates lots of publicity and attention (Ohanian, 1991). Dean and Biswas (2001) in their study indicate that celebrity endorsement can result in more favorable advertisement ratings and product evaluations. According to the article,A body of literature shows that using a celebrity can capture consumers attention (Thwaites, 1995), enhance a message recall at purchasing time (Friedman and Friedman 1979),make the advert more effective (Freiden, 1984), help to overcome cultural differences between countries (Junokaite et al, 2007), create positive emotion toward the endorsed product (Solomon, 2002), shorten the time in creating a company credibility (Wentz, 2002; Gabor et al, 1987), shorten the introduction stage of a new product and accelerate the growth one (Dickenson, 1996), generate more profits for campaigns (Mathur et al 1997), generate positively twice public relations than non celebrity product endorsement (Pringle & Binet, 2004) and leverage a company brand through the attention that a company obtains from public relations (Erdogan et al. 2001). Inspite of the above stated advantages, it is not clear if the effects are all positives. These unclear findings pose a serious challenge for the companies and proper research needs to be done before making a decision. Scholarly research conducted by Miciak and Shanklin (1994) concluded that only one out of five commercials that included celebrity endorsers came up to advertisers' strategic expectations. It is also noted that the cost spent on these celebrities may not justify the result.
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According to Clark & Horstman, (2003), if a consumer observes the advertisement of two products of same category but of different firms, one having a celebrity endorsement and the other without celebrity endorsement, they believe that the celebrity endorsed product would be of higher value and would invite more purchases than noncelebrity endorsed one. There are certain parameters that determine the success of celebrity endorsement like credibility, profession, values, attractiveness, popularity, etc. India uses celebrity endorsement as a winning formula today. It helps the companies to retain their consumers. But the selection of a celebrity with less familiarity doesnt help the brand. So it is important to find a familiar and a popular face that can effectively help in creating a positive impact on the buying behavior of consumers.

METHODOLOGICAL DISCUSSION
RESEARCH DESIGN a. SAMPLING PLAN
1. Sampling Unit- Adults 2. Sampling Size- Thirty

b. INSTRUMENTS We will be using questionnaires for our research. c. DATA COLLECTION METHOD We will be mailing the questionnaires to the
respective parties to collect the data.

d. METHODS The survey takers answers will be the primary data. e. DATA ANALYSIS METHODS ANOVA or regression.

EXPECTED RESULT
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RESEARCH PROBLEM
1. Management dilemma- here the dilemma is quite of the marketing team, which is whether to use celebrity as an endorser of their product or not? This can be a very serious decision as firstly it involves huge costs as every celebrity charges huge sums for such endorsements and also the brand image of the company has to be kept in mind, whether the image of the company matches with that of the celebrity. Will this endorsement be successful and will it truly increase the sales of the company or strengthen the brand recall. Will it hamper the brands image in any way? Celebrity endorsers need not necessarily be from Bolly/Hollywood, they can be sports stars, athletes, business tycoons in short they need to be a famous personality and also an expert in their respective field. These are some of the crucial questions that the team has to answer before arriving at a decision. 2. The research will be effective when the dilemma can be solved using the research outcomes or analysis.

REFERENCE

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1. Atkin C and Block M (1983), Effectiveness of Celebrity Endorsers, Journal of Advertising Research, Vol. 23, No. 1, pp. 57-61. 2. Alnawas Ibrahim,May 2010, Vol 2, No1, Lecturer Department of Marketing, AL-Zaytoonah Private University of Jordan, Faculty of Economics and Administrative Sciences. 3. Agrawal Pradeep, Research Scholar, Faculty of Management Studies, Banaras Hindu University, Varanasi. 4. Biswas, A., Olsen, J. E., & Carlet, V. (1992). A comparison of print advertisements from the United States and France. Journal of Advertising, 21(4), 7381. 5. Dean D and Biswas A (2001), Third-Party Organization Endorsement of Products: An Advertising Cue Affecting Consumer Pre-Purchase Evaluation of Goods and Services, Journal of Advertising, Vol. 30, No. 4, pp. 41-57. 6. De Mooij, Marieke (2005), Global Marketing and Advertising: Understanding Cultural 7. Douglas, S. P., & Craig, C. A. (1997). The changing dynamic of consumer behavior: implications for crosscultural research. International Journal of Research in Marketing, 14, 379395. 8. Dubey S.K, Associate Professor, Faculty of Management Studies, Banaras Hindu University, Varanasi. 9. Friedman. Hershey, Salvatore Termini and Robert Washington (1977), "The Effectiveness of Advertisements Utilizing Four Types of Endorsers," Journal of Advertising, (Summer), 22-24. 10. Groeppel-Klein, Andrea (2005), "Arousal and consumer in-store behavior," Brain Research Bulletin, 67 (5), 428-437. 11. Groeppel-Klein, Andrea and Dorothea Baun (2001), "The Role of Customers' Arousal for Retail Stores-Results from An Experimental Pilot Study Using Electrodermal Activity as Indicator," in Advances in Consumer Research, Vol. 28, ed.Mary C. Gilly and Joan MeyersLevy, Provo, UT: Association for Consumer Research, 412-419. 12. Hofstede, G. (1997). Cultures and organizations: software of the mind. New York: McGraw-Hill. 13. Hofstede, G. (1980).Cultures consequences; international differences in work-related values. Beverly Hills, CA:Sage Publications.Paradoxes, (2nd ed.). Thousand Oaks: Sage Publications. 14. Kamen, J M; Azhari, A C and Kragh, J R (1975). What a Spokesman Does for a Sponsor, Journal of Advertising Research, 15(2), 17-24. 15. Kamins, Michael A. (1985). "The Effect of TwoSided Appeals Upon Post-Trial Evaluation Advertiser Credibility, and the Disconfirmation Level." in Proceedings of the Twelfth Annual International ResearcK Seminar in Marlcering, Aix-En-Provence. France 86-108. 16. Kaikati. Jack G. (1987). "Celebrity Advertising; A Review and Synthesis." Internalional Journal of Advertising, 6(2), 93-105. 17. McCracken, G (1989). Who is the Celebrity Endorser? Cultural Foundation of the Endorsement Process, Journal of Consumer Research, 16(3), 310-321. Page 9 of 11

18. McCracken, G. (1986). Culture and consumption: a theoretical account of the structure and movement of the cultural meaning of consumer goods. Journal of Consumer Research, 1(June), 7184. 19. McCracken, G. (1989). Who is the celebrity endorser? Cultural foundations of the celebrity endorsement process.Journal of Consumer Research, 16, 1012 20. McCracken, Grant (1989), "Who is the Celebrity Endorser?Cultural Foundations of the Endorsement Process," Journal of Consumer Research, 16 (December), 310-321 21. Ohanian R (1991), The Impact of Celebrity Spokespersons Perceived Image on Consumers Intention to Purchase, Journal of Advertising Research, Vol. 4, No. 2, pp. 4654. 22. Ohanian, Roobina (1990), Construction and Validation of a Scale to Measure Celebrity 23. Shimp, T. E. (1997). Advertising, communication and supplemental aspects of integrated marketing communication, ed 4. Fort Worth, TX: The Dryden Press. 24. Spiegel Online (2004), Wallander auf der Spur," http://www.spiegel.de/reise/aktuell/ 0, 1518,293571, OO.html, 02.04.2004. 25. Wang, Jing and Bobby J. Calder (2006), "Media Transportation and Advertising," Journal of Consumer Research, 33 (September), 151-162

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To Whom It May Concern:

We, Mansi Doshi, Namit Mehta and Soumya Naithani, hereby declare that this assignment is our original work and is not copied from anyone/anywhere. If found similar with sources, we take complete responsibility of action taken thereof by WAC Team.

Signature Name: Mansi Doshi (121330) Namit Mehta (121333) Soumya Naithani (121363) Section: C

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