100marks project on celebrity endorsement by me

Chapter 1: The Modern World of Marketing

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.

The society that we live in can not only be called secular or democratic, it should be

more appropriately termed as over-communicated these days. There are around 130

television channels in India broadcasting over 3 million television commercials each

year in India. The media-explosion can thus be easily demonstrated. More over,

people forget 80% of the information in just 24 hours! Just imagine the plight of the

marketer to make his brand shout over the deafening clutter of all the brands!

Some where in the 80’s, an Indian marketer found the solution, called as 'Celebrity

Endorsement'. For a long time companies have used well- known public figures,

movie stars and sports personalities to endorse their brands, a sit is widely believed

that these celebrities help to build or reposition brands by extending their personality,

character and popularity to the brands they endorse.

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. In this jet age, people tend to ignore all commercials and advertisements

while flipping through the magazines and newspapers or viewing TV.

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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.

Now Brand endorsement has been covered widely in the branding literature. Brand

Endorsement can be simply defined as a persuasive communications strategy used by

companies to have their products and services represented by a spokesperson. This

can be a paid, a value in kind or an unpaid activity. The main aim of product

endorsement is to persuade consumers to buy a product/ service, to shape their

perceptions toward it and position it more as a lifestyle product or service rather than

solely on its application merits. It is also intended to shape or change perceptions of a

particular brand, increase brand popularity and consumer mind share of the brand,

strengthen brand recall, and highlight differentiation and its uniqueness.

Comprehensive research conducted in this field of marketing communications

suggests that celebrity testimonials do increase advertisements readership. Through

their extensive work in this area, many researchers have concluded that endorsement

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by celebrities has a positive effect on the overall branding and communication and

perception.

Although no study has prove din quantitative terms, any direct relationship between

celebrity endorsement and increase in sales, corporations world wide resort to

celebrity endorsements to create a positive effect.

The concept of brand endorsements and their effect on brand building is derived from

seminal research in the fields of psychology and sociology. The basic premise is quite

simple. With so many products in the market place, it is almost impossible for any

consumer to absorb all the information and process it, and then decipher the

information and evaluate its credibility. In such a scenario, customers seek to simplify

things by depending on cues or easy rules of thumb. These cues can either be intrinsic

or extrinsic and can be communicated through any medium. These simple rules of

thumb help customers to shift through the massive amount of information to make an

informed judgment or develop perceptions about products in the market.

With ever increasing numbers of advertisements and newer ways of communications

being devised, even these cues have become abundant. Thus, a brand endorsed by a

celebrity seems to establish a connection with customers, as many relate to or aspire

to emulate their personalities. A strong brand provides not only the basic functional

benefits but also provides its customers with an identity, a personality to whom they

can relate and who expresses their own beliefs and attitudes.

Using a celebrity to endorse a brand is one such channel for the brand to associate

itself with the unique identity and personality of the celebrity. At another level, a

celebrity endorsement also helps the brand to achieve a wider awareness and better

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recall. It is said that to maximize the returns on brand endorsement, companies must

strive to arrive at a good match between the brand being endorsed and the endorser.

Companies can use celebrities in four different roles, namely as a testimonial, an

endorser, an actor or a spokesman. In a testimonial, the celebrity endorses the

brand based on his/ her personal experience with the brand. As an endorser, the

celebrity vouches for the brand by explicitly associating with the brand. As an actor,

the celebrity becomes part of the story with an implicit endorsement. As a

spokesperson, the celebrity is the official spokesperson for the brand, whereby he/ she

is explicitly identified with the brand and is authorized to express the position of the

sponsor.

In discussing the product type as the basis for deciding the type of endorsement, the

focus is usually on how motivated or involved customers are in processing or

searching for information about the product. Even though, high or low involvement is

relative, products can be classified into these two categories. For example, a less

expensive consumer good like shampoo or soap could be categorized as a low

involvement product, whereas an expensive digital camera which requires in- depth

purchase evaluation could be categorized as a high involvement product.

In discussing the product benefits as the basis for deciding the type of endorsement,

these can be separated in to two types:

Social Benefits.

Functional Benefits.

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Social benefits involve consumers at an emotional level. Not only do they provide

consumers with a stronger bond towards the brand, but they also help them to project

an image, or strengthen self – esteem.

Today, although marketers for products like shampoo try hard to differentiate their

value proposition, they are hardly cleansing hair (a functional benefit). Whether it is

to make hair silkier and smoother or give more volume, the basic premise is all about

making consumers feel good about their hair and therefore about themselves and

improving self- esteem. One of the key reasons for promoting the criticality of

branding is that it allows firms to capture additional values through differentiation,

which can no longer be achieved through mere promotion of product quality and

functionality in today’s competitive landscape.

Based on the above stated factors, endorsements can be broadly classified into four

categories:

Endorsements by ordinary people.

Endorsements by experts in their respective fields.

Endorsements by celebrities.

Mixed endorsements.

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Figure1: Celebrity Benefit Model

The celebrity benefit involvement model combines dimensions and provides useful

guidelines for companies in using endorsements as a viable channel for brand

communications. This model provides useful guidelines to help companies to decide

on the nature of endorsements that they may want to employ. Depending on the

quadrants in which the products lie, companies can make an informed judgment for

their celebrity communication strategy.

Endorsements By Ordinary People

The bottom left quadrant consists of products which provide functional benefits,

with low involvement. For these products, normal consumers can be used as product

endorsers. The many advertisements for shampoos, detergents and so on, where it is

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common to see actual users being interviewed to gauge their opinion and experience

of using that particular product, fall into this quadrant. It has tow main advantages as

per research, one the endorsing consumer belongs to the same community as other

consumers, he/she is presumed to possess a similar lifestyle and product usage and is

therefore in a better position to comment on the suitability of the product for that

community of users, the second advantage is that the endorsing consumer is perceived

to speak the truth as he/ she belongs to the same user community and is perceived to

be more believable than other paid endorsers.

Endorsement By an Expert

The bottom right quadrant represents provide functional benefits with high

involvement. For such products, endorsement by an expert would be a fitting match.

An expert is someone who is seen to possess expertise related to the product class

marketed and is able to give expert advice. Few people would probably argue about

the effectiveness of the endorsement by the Indian Dental Association for Oral B’s

claims. The reason is simple. Customers tend to believe in the knowledge of the

dental association. By the same token, a well known appliance expert can be effective

in endorsing refrigeration equipment, as would be a well respected health practitioner

for health related products. Expert endorsement is more feasible for products with

high functional and physical values.

Celebrity Endorsement

The top left quadrant represents products which provide social benefits with high

involvement. Social benefits include emotional and self- esteem benefits, consumers

would like to see and emulate some well known personalities who use those products

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that they want to purchase. By having a celebrity endorse these categories of products,

consumers are provided with a strong personality and a persona to emulate. A

celebrity can be defined as an individual who is well known by others and for whom

most people have well –developed, trait based impressions.

Mixed Endorsement

The top right quadrant represents products that provide social benefits with high

involvement. High end products like premium luxury cars, the latest mobile phones or

a high end consumer electronic item serve as suitable examples for this quadrant. This

category of goods not only involves a lot of customer deliberation with regard to its

functionality, its technology and design but also gives immense opportunity for

customers to flaunt their personality and convey their beliefs. The nature of these

products necessitates combining different types of endorsers for this category.

Celebrities are used to bolster the self- esteem and image needs of the customers and

experts are used to convey the functional credibility of the products. But in certain

categories like sports goods, the celebrity sports stars themselves double up as experts

as they use the products on a regular basis.

Firms endorse celebrity for a variety of reasons. Studies associated with the market

effect of celebrity endorsement suggest that consumers positively value the use of

celebrity endorsers in the advertisements. Firms invest significant money in putting

together brands and organizations with endorser qualities such as attractiveness,

likeability, and trustworthiness. But today's dynamic market conditions make these

investments unviable.

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Celebrity endorsements have been gaining higher levels of acceptance an important

tool to build brands by creating positive associations and building unique

personalities, effective celebrity branding efforts focus on utilizing celebrity figures

who can help to communicate a brand’s unique value proposition, strengthen its

identity and provide it with a desirable personality.

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Chapter 2: History of Celebrity Endorsements

Businesses have been looking to celebrities to sell their products for almost 100 years.

Today, the market for celebrity endorsements is more competitive than ever. As a

result, many countries, states, and governments have had to make laws and

regulations in order to protect both the consumer and the celebrity.

The earliest dated endorsements of products by celebrities may have even happened

by accident. Kodas Cigarettes began including baseball cards in their packs of

cigars; the Baseball cards were intended as gifts to loyal customers. The most famous

of these is from 1910 of Honus Wagner, worth well over $500,000 in today's market.

As the packaging popularity rose, and people began buying the cigarettes for the

cards, advertisers realized the potential of this new phenomenon. In no time, celebrity

endorsements began to flood the United States.

Up until the early 1930's, athletes were among the biggest celebrity endorsers.

They continued to endorse products through trading cards for anything from bread to

cigars to patent medicines. But, by 1935, a new trend had begun. Celebrities had

actively begun promoting products and businesses. No longer were their

endorsements merely that of an image on a card.

For the next 15 years, until the inception of TV in the American household, athletes

dominated the advertising market. By 1945, celebrity endorsements saw a switch

from athletes to TV & movie personalities. Movie stars, such as Charlie Chaplin,

became the mainstream of American advertising.

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Movie celebrities continued to be the popular choice of product endorsements for the

next 40 years. Then, with the rise of color TV in 1965, the TV celebrity saw a surge in

popularity over the movie screen celebrity.

By 1975, the number of TV spots featuring a celebrity had jumped to one in eight.

The celebrity boom had reached such a large hype that a new industry known as

"celebrity brokering" formed. These "celebrity brokers" still exist today; they are

specialists in matching up advertisers and name performers.

However, by 1985 the trend of the TV/movie star endorser began to fade. In 1984,

Nike discovered the strength and power of advertising in a young, highly talented

basketball player hailing fresh from North Carolina. His name was Michael Jordan.

For the first time in a long time, an athlete had existed that personified an image. “The

image,” Nike believed, would push them into the upper echelon of global mega

brands.

Since Michael Jordan became a superstar in the NBA, advertisers have placed a

stronger emphasis on the athlete endorser. In 1989, Coke employed 59 different

celebrities. Of those 59 celebrities, 48 were athletes. There was also a flux of sporting

goods companies and those products closely associated with sports (i.e. shoes,

clothing) that saw a surge in celebrity advertising. Nearly three-quarters of all

active/sports products were endorsed by athletes.

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During the 1980s, cartoon characters also became popular celebrity endorsers. Fred

Flintstone was among one of the most popular animated celebrities of the 80s.

The advent of celebrity endorsements in advertising in India began when Hindi film

and TV stars as well as sportspersons began encroaching on a territory that was, until

then, the exclusive domain of models.

One of the first sports endorsements in India was when Farokh Engineer became the

first Indian cricketer to model for Brylcream. There was a spurt of advertising in that

era, featuring stars like Tabassum (Prestige Pressure Cookers), Jalal Agha (Pan

Parag), Kapil Dev (Palmolive Shaving Cream) and Sunil Gavaskar (Dinesh Suitings).

In the last few years, an even newer trend with respect to celebrity endorsements has

begun to gain in popularity. Celebrities’ characters are beginning to push

advertisements in their regular shows and movies. Audi has been one of the fore

runners in this new area of celebrity advertising. Audi began advertising one of its

cars in a Seinfeld episode and just recently promoted the new Audi TT convertible in

Mission Impossible 2.

Many other brands which include Beverages, Cigarettes, Automobiles, Tours,

Consumable goods, Durable Goods, Furniture Shops, Soaps, Mobiles, Clothing, etc

are also being used in the regular shows, TV soaps, movies etc. in order to make a

statement in the mind of the consumers and get effective recall value.

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From the accidental inclusion of a baseball card with cigarettes to the recent successes

of in-show advertising, advertisers have focused on the triumph of the celebrity

spokesperson. No matter what the case, celebrity endorsements have proven to be an

enduring success.

Celebrities flood the advertising scene, whereas today, it is not uncommon to see

three well-known celebrities supporting brands in one commercial break alone. For as

long as people will buy Dabur products because of Amitabh Bachchan or dial in to a

new Airtel Sim card because Sharukh Khan told so, the popularity of the celebrity

advertiser will continue to rise, new outlets will be explored and old ones will be

renewed.

(Shahrukh Khan in Pepsi and Airtel Commercials)

(Sachin Tendulkar in Boost Commercial)

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Chapter 3: Celebrity Endorsements

Before starting of with the loads of explanation and in detail aspects of what all goes

in the selection, scanning of celebrities in their endorsements and the product which is

quite adequate for endorsing, let’s take the word Celebrity Endorsement in two

different parts. First let’s know the meaning of the word ‘Celebrity’ and then

‘Endorsement’.

A dictionary meaning of this word ‘Celebrity’ is “a famous person". It’s a person who

has excelled in his field of action or activity. In our day to day activity, we perform

many acts, may at home, at work place, on field in sports, in social life. But these acts

may be daily routine or just "acts" per say giving no extra-ordinary results, not

noticed by anybody surrounding, and not taken into notice by Media.

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.

A celebrity is perceived as GOD by masses. They touch their feet, create idols and

worship, garland their photographs, perform "Yagnyas" for their idols performance,

wait for their "Darshan" in hot sun or heavy rains for hours together, follow fashions

of them - wear similar clothes or have similar hair style as that of celebrity, and on

wrong side even commit suicide if celebrity FAILS to deliver results.

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They have tremendous mass followings. They pull crowds with their presence only. If

it is announced that BIG B (Amitabh Bachchan) is coming for shooting a film, to a

particular location on a particular day, then there is big commotion in that area. Police

worry about law and order situation, even young generation come there in big groups

to have glimpses of BIG B and even wait since early morning leaving aside their other

work, problems, occasions, studies, etc.

Thus we can say that Celebrities are people who enjoy public recognition by a large

share of a certain group of people. Whereas attributes like attractiveness,

extraordinary lifestyle or special skills are just examples and specific common

characteristics cannot be observed, it can be said that within a corresponding social

group, celebrities generally differ from the social norm and enjoy a high degree of

public awareness.

Now let’s know about the word ‘Endorsements’.

Endorsement is a channel of brand communication in which a celebrity acts as the

brand’s spokesperson and certifies the brand’s claim and position by extending his/her

personality, popularity, stature in the society or expertise in the field to the brand. In a

market with a very high proliferation of local, regional and international brands,

celebrity endorsement was thought to provide a distinct differentiation.

The concept of the product endorsement is quite ancient. In England, for example,

several companies have been advertising themselves as “by appointment to the

Queen” for hundreds of years, indicating that they enjoy the patronage of the British

royal family.

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Consumers are often seduced by the idea of purchasing a product which is endorsed

by someone wealthy or famous, as though by buying the product, the consumer also

becomes affiliated with the person who endorses it.

But over the years, many aspiring brands in Asia have jumped on to this celebrity

endorsement bandwagon. Even though endorsements have taken on a quasi-industry

stature, there is hardly any hugely successful collaboration as those of Nike’s. There

are many reasons for such a happening.

A product endorsement doesn't necessarily mean that a product is good. It just means

that the company has managed to work its public relations connections to get a big

name associated with it. While most people and organizations will try out a product

before they agree to endorse it, this isn't always the case, and you shouldn't rely on

endorsements to speak to the quality of the product, especially if you are concerned

about issues like illegal labor or adulterated products.

Endorsements can be made by a wide variety of people. High visibility or well-known

individuals that are good for endorsements include:

Movie stars

Actors and Actresses

Television personalities

Sport Stars

Comedians

Authors

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Entertainers and more

Celebrity endorsements pull in hundreds of crores every year, and are widely

preferred by marketers to promote their products. Using celebrities for endorsing

brands has become a trend for building the brands as well as the company's image.

Sports persons and film stars fit the bill perfectly.

Promotion of a company's products through these celebrities is termed as

celebrity endorsement. The company makes use of the celebrity's characteristics and

qualities to establish an analogy with the products specialties with an aim to position

them in the minds of the target consumers. Celebrity endorsement, thus, is one of the

powerful tools adopted by companies/marketers to consolidate their brands in the

crowded marketplace.

And overall the consumers also prefer to own a brand that has a good reputation, and

when someone like a famous film star or a sport star is associated with that particular

brand, it is obvious that the consumers will get attracted to it, because the consumer

wants to maintain some status, and feels that using a brand promoted by a star can

satisfy that longing.

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".

According to Melissa St. James, a doctoral fellow and marketing instructor at The

George Washington University,

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"Studies show that using celebrities can increase consumer’s awareness of

the ad, capture 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.

Figure2: Brand Equity Model

Celebrity Endorsements affect all the factors in the diagram above and hence are inter

related to major brand characteristics. It is very important to use celebrity

endorsements judiciously in this competitive environment. It can mean having an

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edge over your competitor, increasing your sales to making customers more brand

loyal and the public more attentive towards your brand.

Rise of celebrity culture

The modern mass media has increased the exposure and power of celebrity. Often,

celebrity carries with it immense social capitals that is highly sought after by some

individuals. High paying jobs and other social perks unavailable to most people are

readily available to celebrities, even for wok not connected to the talents or

accomplishment that made them famous.

For example

A retired athlete might receive high ‘speaking fees’ or compensation for public

appearances, despite his talent having been sports, not oratory, while some envy

celebrities, and many aspire to celebrity, some who have attained it are ambivalent

about their status. Often, celebrities cannot escape the public eye, and risk being

followed by fans. As well, child celebrities are notorious for having poor emotional

health in adulthood, and often turn to drug and alcohols abuse when their celebrity (as

it usually does) fades.

Some participants in reality television shows have admitted that they appeared on

these programs with the goal in mind of attain celebrity. Most often they achieve only

‘fleeting celebrity’ with no special figures, has pervaded many sectors of society

including business, publishing, and even academy (the celebrities).

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Only small portions of individuals in any profession can achieve celebrity. For those

who do., the benefit can be substantial –in the form of speaking access. There are

disadvantages as well; however, academics and business leads that become well

known often lose credibility with their colleagues.

In many fields, such as the arts and publishing, a moderate measure of celebrity

(being’ established) It’s necessary before individuals in these sectors are poorly-

compensated though they may be as talented or more so then well compensated,

famous people in he same field.

Why Celebrities only?

There is a myth that celebrity endorsement is used to give a brand advantage over its

competitors. However, choosing a celebrity for this purpose requires considerable

amount of calculations. There should be something common between the brand and

the celebrity promoting it. Let us come to the main question as to why marketers use

celebrities to promote their brands. Is there a real need to associate a celebrity with

the product? Yes seems to be the resounding answer. This is because a company

needs to create awareness and interest in the consumers mind when it unveils a new

brand or product. To be successful, brands need to convince consumers that they carry

a different image and value from other competing products. In other words, brands

have to show their true personality to the potential consumers.

An effective way to do this is through celebrity endorsements. As MG Parmeswaran,

executive director of FCB Ulka says,

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"As advertising professionals, we recommend celebrity endorsements when

the case is justified. There are many cases where you need to use the celebrity to

break out of a category clutter. At times, celebrity endorsement is used to build

credibility to the brand offer."

People always wish to see their favorite stars and marketers, and advertisers are quick

to capitalize on such ideas. Endorsement of a product/service by a celebrity gives out

the message that it is as authentic and credible as the celebrity is. The urge that people

have of enjoying the same recognition and status like their favorite stars is often the

main reason for the increasing use of celebrities for products/services endorsement.

The motive behind total branding may be decoded as an attempt to amalgamate

diverse activities to win customer preference. The crescendo of celebrities endorsing

brands has been steadily increasing over the past years. Marketers overtly

acknowledge the power of celebrities in influencing consumer-purchasing decisions.

It is a ubiquitously accepted fact that celebrity endorsement can bestow special

attributes upon a product that it may have lacked otherwise. But everything is not

hunky-dory; celebrities are after all mere mortals made of flesh and blood like us. If a

celebrity can aggrandize the merits of a brand, he or she can also exacerbate the image

of a brand.

Celebrity endorsements are impelled by virtue of the following motives:

Instant Brand Awareness and Recall.

Celebrity values define, and refresh the brand image.

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Celebrities add new dimensions to the brand image.

Instant credibility or aspiration PR coverage.

Lack of ideas.

Convincing clients.

Let’s take Amitabh Bachchan, who has been used by some companies like Parker

Pens and ICICI Home Loans remarkably well while some others have been unable to

exploit his Big B status too well. Shah Rukh Khan’s endorsement of Hyundai Santro

too seems to have worked well. Parmeswaran says,

“We used cricketers like Rahul Dravid for Castrol in an attempt to break out

of the clutter, as well as have an image rub off of ‘dependability’ on to the brand.”

Yet, there are some who don’t have much conviction in star endorsements. Adrian

Mendonza, Executive VP and Creative Director of Rediffusion DY&R do not

recommend celebrity endorsements because he thinks that to be really successful, a

brand needs to have a strong identity of its own. It should ideally not piggyback on

the identity of a celebrity and hope to achieve success.

Celebrity endorsements are capable of manifesting both favorable and adverse effects

for the brands with which they associate. Now we will see Important Celebrities

Attributes.

Important Celebrity Attributes

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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.

Companies use celebrity endorser because they are considered to have stopping

power, i.e., a celebrity can be a very useful tool to draw attention to advertising

messages in a cluttered media environment. The overall popular image coupled with

exact product-image match enhances the consumer attention resulting in greater brand

recall.

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.

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Before we can scrutinize the effects of celebrity endorsement on the overall brand, we

have to see the implicit nuances that act as sources of strong brand images or values:

Sources of Strong Brand Images or Values

Experience of use: This encapsulates familiarity and proven reliability.

User associations: Brands acquire images from the type of people who are

seen using them. Images of prestige or success are imbibed when brands are

associated with glamorous personalities.

Belief in efficiency: Ranking from consumer associations, newspaper

editorials etc.

Brand appearance: Design of brand offers clues to quality and affects

preferences.

Manufacture’s name and Reputation: A prominent brand name transfers

positive associations.

Creating Brand Insistence

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(Figure3: Brand Insistence)

The Five Drivers of Creating Brand insistences are as follows:

Emotional Connection: Does the Brand connect with people on the

Emotional Level.

Value: Does your brand deliver good value for the price?

Accessibility: do customers and potential customers perceive your brand to be

convenient?

Awareness: Are your target customers aware of your brand?

Relevant Differentiation: Is your brand different and competitive than other

brands?

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. Indian firms have been juxtaposing

their brands with celebrity endorsers in the hope that celebrities may boost

effectiveness of their marketing and/or corporate communication attempts.

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Advantages of a celebrity endorsing a Brand

Brands have been leveraging celebrity appeal for a long time. Across categories,

whether in products or services, more and more brands are banking on the mass

appeal of celebrities. As soon as a new face ascends the popularity charts, advertisers

queue up to have it splashed all over. Witness the spectacular rise of Sania Mirza and

Irfan Pathan in endorsements in a matter of a few months.

The accruement of celebrity endorsements can be justified by the following

advantages that are bestowed on the overall brand:

Establishment of Credibility: Approval of a brand by a star fosters a sense

of trust for that brand among the target audience- this is especially true in case

of new products. We had the Shah Rukh-Santro campaign. At launch, Shah

Rukh Khan endorsed Santro and this ensured that brand awareness was

created in a market, which did not even know the brand.

Ensured Attention: Celebrities ensure attention of the target group by

breaking the clutter of advertisements and making the ad and the brand more

noticeable.

PR coverage: Is another reason for using celebrities. Managers perceive

celebrities as topical, which create high PR coverage. A good example of

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integrated celebrity campaigns is one of the World’s leading pop groups, the

Spice Girls, who have not only appeared in advertisements for Pepsi, but also

in product launching and PR events. Indeed, celebrity-company marriages are

covered by most media from television to newspapers (e.g. The Spice Girls

and Pepsi).

Higher degree of recall: People tend to commensurate the personalities of

the celebrity with the brand thereby increasing the recall value. Golf

champion Tiger Woods has endorsed American Express, Rolex, and Nike.

Associative Benefit: A celebrity’s preference for a brand gives out a

persuasive message - because the celebrity is benefiting from the brand, the

consumer will also benefit.

Mitigating a tarnished image: Cadbury India wanted to restore the

consumer's confidence in its chocolate brands following the high-pitch

worm’s controversy; so the company appointed Amitabh Bachchan for the

job. Two year before, when the even more controversial pesticide issue shook

up Coca-Cola and PepsiCo and resulted in much negative press, both soft

drink majors put out high-profile damage control ad films featuring their best

and most expensive celebrities. While Aamir Khan led the Coke fight back as

an ingenious and fastidious Bengali who finally gets convinced of the

product's `purity,' PepsiCo brought Shah Rukh Khan and Sachin Tendulkar

together once again in a television commercial which drew references to the

`safety' of the product indirectly.

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Psychographic Connect: Celebrities are loved and adored by their fans and

advertisers use stars to capitalize on these feelings to sway the fans towards

their brand.

Demographic Connect: Different stars appeal differently to various

demographic segments (age, gender, class, geography etc.).

Mass Appeal: Some stars have a universal appeal and therefore prove to be a

good bet to generate interest among the masses.

Rejuvenating a stagnant brand: With the objective of infusing fresh life

into the stagnant chyawanprash category and staving off competition from

various brands, Dabur India roped in Bachchan for an estimated Rs 8 crore.

Celebrity endorsement can sometimes compensate for lack of innovative

ideas.

Essentials of celebrity endorsements

Even though to an observer it may seem that Nike’s success is totally based on Tiger

Wood’s association with the brand, nothing can be far from the truth. As a brand,

Nike has established a very strong brand identity and a brand personality over the

years. What Nike did was to use celebrity endorsement as one of the main channels of

communicating its brand to a highly focused set of customers. So, Nike’s association

with Tiger Woods was one of the parts of an entire branding process that Nike has

been practicing consistently. Contrary to this, most of the brands in Asia that have

used celebrity endorsements have used it as the main brand building tool.

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Before any brand signs on a celebrity, they should consider three main aspects:

Attractiveness of the celebrity: This principle states that an attractive

endorser will have a positive impact on the endorsement. The endorser should

be attractive to the target audience in certain aspects like physical appearance,

intellectual capabilities, athletic competence, and lifestyle. It has been proved

that an endorser that appears attractive as defined above has a grater chance of

enhancing the memory of the brand that he/she endorses.

Credibility of the celebrity: This principle states that for any brand-celebrity

collaboration to be successful, the personal credibility of the celebrity is

crucial. Credibility is defined here as the celebrities’ perceived expertise and

trustworthiness. As celebrity endorsements act as an external cue that enable

consumers to sift through the tremendous brand clutter in the market, the

credibility factor of the celebrity greatly influences the acceptance with

consumers.

Meaning transfer between the celebrity and the brand: This principle

states that the success of the brand-celebrity collaboration heavily depends on

the compatibility between the brand and the celebrity in terms of identity,

personality, positioning in the market vis-à-vis competitors, and lifestyle.

When a brand signs on a celebrity, these are some of the compatibility factors

that have to exist for the brand to leverage the maximum from that

collaboration.

Even though these three major principles must be adhered to by companies,

practically it might be difficult to find celebrities that satisfy all these three conditions.

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Depending on the nature of the brand and the kind of product being used, companies

can selectively emphasize one factor over the other.

Celebrity endorsements, of course, come with risks attached. Ad professionals are

united in their opinion that linking a brand with an ambassador, who comes under fire

for objectionable behavior or a bad run, is nightmarish.

Coca-Cola India was caught in a similar situation, when a couple of years ago, one of

its star endorser, Salman Khan, was accused in a couple of cases. A red-faced Coke

subsequently dropped Khan from its endorsement package.

And while the risks abound, corporate say there is little they can do about it. As

Lowe's Balki points out,

"The benefits of star brand endorsements outweigh the risks."

Then again, there is the issue of using good celebrities badly - which also either

backfires completely for the brand, or is a complete waste of money, effort and

resources.

Pointing to recent examples where star ambassadors have been used ineffectively,

Balki mentions the Castrol commercial featuring Rahul Dravid and the currently-on-

air ad film for Adidas which features Sachin Tendulkar and Virender Sehwag.

"While these are few examples where good, high-profile celebrities with lots

of star power have been used badly, on the other hand there is Coca-Cola's thanda

matlab series which makes excellent use of Aamir Khan," adds Balki.

The celebrities' parade in advertising seems to be just for gaining notice ability,

bordering on shame and hypocrisy on part of both the advertisers and celebrities. The

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only person laughing all the way to bank is the celebrity. Shah Rukh Khan was brazen

enough to publicly announce his availability for many more endorsements at Ad Asia.

Akshay Kumar is seen in a bicycle sales promotion ad with a Tiffin box as the offer!

Even though 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. Many of the famous actors and

actresses joined the various political parties or started their own parties in the political

scenario. Actors from Jaya Bachchan, Late Sunil Dutt to Govinda all are seen with

some party or other. In short they are themselves endorsing the political party to gain

popularity and votes for the particular party they operate in.

The business firms, thus, resort to celebrity endorsement to perk up brand recall and

product sales. This has now become a trend and is being perceived as a strategic

means of brand building exercise. Accordingly to the profound Myth, people still live

up to buy products endorsed by their particular celebrity just to have a satisfaction

about the quality and trust worthiness of the product which could in some cases be

false!

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Chapter 4: Mechanism of Celebrity Marketing

Celebrity endorsements give a brand a touch of glamour and the hope that a famous

face will provide added appeal and name recognition in a crowded market. In the

battle for the mind, you get the customer excited by showing him a known face, and

an effective demand is created. In short it helps increase the recall value of the brand.

A piece of research states that the target audience age group of 15-30 gets influenced

first by cricketers, then Bollywood stars and only then music, festivals and food.

Source Credibility Theory

According to Source Credibility Theory, acceptance of the message depends on

'Expertness' and Trustworthiness' of the source. Expertness is defined as the perceived

ability of the source to make valid assertions. Trustworthiness is defined as the

perceived willingness of the source to make valid assertions. Audience acceptance

increases with the expertness of the source and the ability of the audience to evaluate

the product.

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For example, the Chinese prefer A- list celebrities form the West, and after that they

prefer local celebrities to B-list Western celebrities. An example is the popularity of

Cantonese pop artists from Hong Kong, despite their local origins.

Source Attractiveness Theory

According to Source Attractiveness Theory, which is based on social psychological

research, the acceptance of the message depends on familiarity, likeability and

similarity. Familiarity is the audience's knowledge of the source through exposure;

likeability is the affection for the source's physical appearance and behavior while

similarity is the resemblance between source and receiver.

This theory explains the message acceptance in two ways: Identification and

Conditioning. Identification is when the receiver or the target audience of the

communication begins to identify with the source's attractiveness, and hence tends to

accept his opinions, beliefs, habits, attitudes etc.

On identification, a quote from Bijou Kurien, COO, Titan,

"We decided on Aamir because we wanted someone who is a bit iconic, who

is style-conscious himself, and somebody who cuts across both sex and age group,

between urban and rural India. A celebrity is who is moldable and who is not over-

exposed".

Conditioning is when the attractiveness of the source is supposed to pass on to

the brand after regular association of the source with the brand.

A case in point is the Cadbury brand in India, which suffered a major setback when

worms were found in Cadbury chocolates. To counter this negative impact on the

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brand, the company hired Amitabh Bachchan, who is considered as a demi-god in

India, to advertise the chocolates. The charisma and stature of Bachchan in the

mindset was so powerful that the endorsement not only turned around the perceptions

about the brand, but also helped the brand to sell more than it had previously, as

chocolate is low investment product, the attractiveness of Bachchan worked

extremely well with the masses.

Meaning Transfer Theory

Grant McCracken has criticized the previous two theories and proposed the Meaning

Transfer Theory. The theory explains that a celebrity encodes a unique set of

meanings which if well used can be transferred to the endorsed product. Such a

transfer takes place in three stages – encoding meanings, meaning transfer, meaning

capture.

(Figure4: Meaning Transfer Model)

I. Encoding Meanings: Each celebrity has a unique set of meanings, which

can be listed by age, gender, race, wealth, personality or lifestyle. In this

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way, the celebrities encode a set of meanings in their image. For example

Preity Zinta can be seen as a lively, charming, bubbly, witty and

enthusiastic.

II. Meaning Transfer: This stage transfers those meanings to the product. When

skillfully portrayed, celebrities can communicate this image more

powerfully than lay endorsers.

III. Meaning Capture: This assumes that consumers purchase products not merely

for their functional value but also for their cultural and symbolic value. The theory

says that consumers buy the endorsed product with the intention of capturing some of

the desirable meanings with which celebrities have passed on to the product. This is

more eminent in lifestyle products like clothes, perfumes, cell phones etc.

Celebrity brand impact model

Based on the three main endorsement models discussed previously, the celebrity

brand impact model is a framework to measure the level of awareness and impact on

the brand based on the celebrity endorsements.

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Figure5: Celebrity Brand Impact Model

This model measures the degree of meaning transfer between the brand and the

celebrity on one hand, and the attractiveness (and credibility) of the celebrity on the

other.

The result of the framework is evaluated under two parameters: brand awareness and

brand impact. Brand awareness refers to knowledge about the brand. It is customer’s

knowledge about the brand as a result of past actions, interactions and experiences

with the brand. Brand impact is the level of positive spillover of endorser equity onto

the brand being endorsed.

Discussion

Does celebrity endorsement really work? Theoretically yes, because the qualities

associated with the endorser are associated with the brand and the brand therefore

remains at the top of the consumer's mind. However one needs to realize that the

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impact of an endorser cannot be sustainable in all product categories and in all the

stages of brand life cycles. It really depends upon the type of product. If it is a

'functional brand', then the product itself is the hero. Here any celebrity association

with the brand without corresponding performance of the product will not be

sustainable. While incase of 'image brands', like the categories of soaps, soft drinks,

cigarettes etc., where it is difficult to distinguish between the products, celebrity

endorsements help to distinguish between the brands at an emotional level. A research

conducted by Synovate, a global market research firm, revealed that 47% people

would be more likely to buy a brand that was endorsed by their favorite celebrity.

It would be difficult to judge the direct effect of celebrity endorsement on the sales or

profits of the company. On Amitabh Bachchan endorsing RIN, an HLL spokesperson

says that it was too early to gauge the success of 'Rin' in terms of sales and that

though Dabur healthcare products' sales had improved, the increase could not be

solely attributed to him. Similarly, there are also cases wherein there was a dramatic

change in the sales figure after the endorsements. For example Rahul Malhotra,

Associate Director Marketing, P&G India quotes "Certainly, it has helped us promote

our brand 'Head & Shoulders'. Last year, we were ranked as No. 2 and this year we

are market leaders in this segment with over 45% market share".

Positive Impacts of a Celebrity Endorsement on the Brand as per research

Approval of a brand by a star fosters a sense of trust for that brand among the target

audience. This is especially true in case of new product. Celebrities ensure attention

of the target group by breaking the clutter of advertisements and making the

advertisement and the brand more noticeable. A celebrity's preference for a brand

gives out a persuasive message and hence, because the celebrity is benefiting from the

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brand, the consumer will also benefit. There is a demographic and psychographic

connection between the stars and their fans. Demographic connection establishes that

different stars appeal differently to various demographic segments i.e. age, gender,

class, geography etc., while psychographic connection establishes that stars are loved

and adored by their fans. Some stars have a universal appeal and therefore prove to be

a good bet to generate interest among the masses. Another invaluable benefit from

celebrity endorsements is the public relation opportunities.

Dwane Hal Dean studied the effects of three extrinsic advertisement cues viz. third

party endorsement, event sponsorship and brand popularity on brand / manufacturer

evaluation. It was observed that endorsement significantly affected only product

variables (quality and uniqueness) and one image variable (esteem). The third party

endorsement hence may be perceived as a signal of product quality.

Goldsmith et al. assessed the impact of endorser and corporate credibility on attitude-

toward-the-ad, attitude-toward-the-brand, and purchase intentions. 152 adult

consumers were surveyed who viewed a fictitious advertisement for Mobil Oil

Company. They rated the credibility of the ad's endorser, the credibility of the

company, and attitude-toward-the-ad (Aad), attitude-toward-the-brand (AB), and

purchase intentions. It was observed that endorser credibility had its strongest impact

on Aad while corporate credibility had its strongest impact on AB. The findings

suggest that corporate credibility plays an important role in consumers' reactions to

advertisements and brands, independent of the equally important role of endorser

credibility.

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Looking at the effect of celebrity endorsement on the wealth of a company a classic

example of Michael Jordan can be used. At the time of rumors of Michael Jordan

returning to NBA in 1995, he was endorsing products of General Mills (Wheaties),

Mc'Donalds (Quarter Pounders, Value Meals), Nike (Air Jordan), Quaker Oats

(Gatorade) and Sara Lee (Hans Underwear). Study conducted by Mathur et al.

associated with Jordan's endorsements shows that the anticipation of Jordan's return to

NBA, and the related increased visibility for him resulted in increase in the market

adjusted values of his client firms of almost 2 percent, or more than $1 bn in stock

market value. From this study one can observe that the major celebrity endorser with

rumors or otherwise has a tremendous potential to influence the profitability of

endorsed products.

Semi-partial endorsement indicates that when a company uses famous characters from

any TV soaps for brand endorsements, consumers tend to relate to the character that

he or she plays in the soap and hence can attract more credibility. For example, Smriti

Irani who plays 'Tulsi' in a famous soap has garnered a lot of support from the middle-

class housewife today. If she would endorse a brand, there would be more relativity

and credibility. Same can be said about Priya Tendulkar who used to play the

character of Rajani.

Schema-Based Expectancy Theory

A schema is an abstract, cognitive structure that represents some stimulus domain,

e.g., a person, place, event, or thing. It is organized through experience and consists of

a knowledge structure. They can determine what information will be encoded or

retrieved from memory. Schemas are involved in encoding, interpretation, retention,

and retrieval of information. They can influence perceptual cognitive activities

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through the generation of expectancies. In the case of well-known celebrities,

individual would typically have personal relevant schemas (person schemas), acquired

over time. When a celebrity endorses a brand, the characteristics of that celebrity may

be compared with the advertised attributes of the brand by the audience for

congruence or fit with their available person-schema. The degree of congruence

between the new information (the brand attributes) and the existing information (the

celebrity's characteristics) may then influence the level of recall of the new

information.

The Associative Network Model suggests that information inconsistent with an

individual's schema may be quite salient and information will, therefore, be attended

to more closely and be processed more deeply. Therefore, this information would be

conceptually linked to a larger number of items in the memory, compared to a piece

of information that is consistent with the schema.

While the Schema-Pointer + Tag Model proposes that consistent or typical items are

encoded in terms of a "pointer" to a generic schema that contains the typical

components and relationships for that particular knowledge domain. The atypical or

incongruent items are, on the other hand, encoded with a rather distinctive "tag" and

stored as a unique, separate unit. This leads to higher recalling for incongruent items

than for typical items. And empirical researches confirm significantly higher recalling

when the image of the celebrity is congruent with the brand image. Therefore,

celebrity management is very important for the success of any brand.

Celebrity Selection

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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.

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.

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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

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.

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Celebrity endorsement can be a key to marketing success

There's no denying the fact that marketing chiropractic can be challenging. The public

has long been exposed to negative reports about it from the medical and drug

industries, as well as from well-meaning but uninformed consumer advocates.

They've heard chiropractic jokes on sit-coms and warnings on the nightly news.

To market chiropractic in general — and your practice in particular — you must first

overcome lingering fears, ignorance and skepticism that keep people from coming to

your office. One of the most powerful ways to surmount these obstacles is to use a

celebrity endorsement.

When you tell people that chiropractic can help them, they may or may not believe

you. After all, you have a vested interest in selling your services. But when celebrities

say that chiropractic has helped them, and it could help others, people tend to listen —

and believe. After all, most people assume "he wouldn't say it if it weren't true."

As Marketing expert Patrick Bishop — co-author of "Money Tree Marketing:

Innovative Secrets That Will Double Your Small-Business Profits in 90 Days or

Less" — noted:

"When you get a celebrity to endorse your company or sign a licensing

agreement, you benefit from customers' awareness of the property, [which] could

include the perception of quality, educational value or a certain image."

After researching the impact of celebrity endorsements, Melissa St. James, a doctoral

fellow and marketing instructor at The George Washington University concluded,

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"Studies show that using celebrities can increase consumers' awareness of

the ad, capture [their] attention and make ads more memorable" (quoted in

"Celebrity Endorsements," by Kimiko L. Martinez, Entrepreneur's Start-Ups

magazine, May 2001).

Obviously, celebrity endorsements work. In fact, they work so well that about 20% of

all television commercials feature a celebrity.

"Many companies have had considerable success using celebrities as

spokespersons, especially athletes," stated researchers Amy Dyson and Douglas

Turco, in "The State of Celebrity Endorsement in Sport," for the Cyber-Journal of

Sport Marketing.

They found that, in 1995, U.S. companies paid more than $1 billion to 2,000 athletes

for endorsement deals, and that sport endorsers were featured in 11% of all television

advertisements that same year.

Their research shows that one of the advantages to celebrity-based marketing

campaigns is that:

"Famous people hold the viewer's attention. In this era of sound-bytes and

channel surfing, there is a demand for people's time and focus. For instance, a

commercial with the WNBA's Lisa Leslie or NHL's Wayne Gretzky is more likely to

keep a television remote control clicker on the channel versus a commercial with a

local doctor or dentist."

Of course, any marketing material — even with a powerful celebrity endorsement —

must be a combination of both education and sales. It has to convince people that

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chiropractic is a safe and effective health care approach — and that it (and you) can

help them in a very real and direct way. In short, it has to answer the question: "What

can it do for ME?"

Chapter 5: The Global and Indian Scenario

In a world full of faces, the ones' which bolt from the blue are perhaps of the

celebrities. The advertisers are always on the look out for such faces for the purpose

of endorsement. But, the major challenge before them is to find the right faces for

their brands or in other words celebrity management. McCracken quotes, "In the best

of all possible worlds, the marketing or advertising firm first would determine the

symbolic properties sought for the product... It would then consult a roster of

celebrities and the meanings they made available and taking into account budget

and availability constraints would choose the celebrity who best represents the

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appropriate symbolic properties." This suggests that the image of the celebrity must

fit or be congruent with the product which can be explained from the theoretical

perspective using a social cognition framework.

Global Scenario:

Generating Consumer Credibility: New product? An endorsement can signal that

your new product (or product relaunch) is a serious competitor and demands

consideration.

Tiger Woods and Buick is a great example ($40MM, 5 years).

Reinforcing Brand Positioning: Murky brand positioning? Sometimes a celebrity

with a clear persona can reinforce (or redefine) the brand positioning you seek.

Tiger Woods and Nike Golf is a choice example ($105MM, multi-year). Tiger

stands for peak performance and professionalism, just as the Nike Golf brand.

Differentiating in a Crowded Market: Competitors knocking off your product? If

you’re looking to just stand out above the noise, this could be a cheap route (skip

product differentiation!).

A good example is Tiger Woods and…um…well…guess Tiger doesn’t do

these stunt endorsements. How about Burt Reynolds and FedEx?

Identify the Strategy behind These Recent Endorsements:

Jennifer Lopez and Louis Vuitton

Brad Pitt and Heineken

Catherine Zeta-Jones and T-Mobile

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Bottom-line of it all !

Designers: How are you meshing the celebrity’s brand/personality with your

products? How do you create an ad that lifts both players rather than degrades the

value of one or the other?

Strategists: Know why you want to use an endorsement and be clear about your

expectations (and how you’ll measure impact). Understand when it makes sense to

look for multi-year/multi-campaign deals and when you want a single effort.

To make sense of these celebrity endorsements, they all made perfect sense:

Jennifer Lopez and Louis Vuitton: “We both have big saddle bags, I mean

hand bags.”

Brad Pitt and Heineken: “If you drink enough of these, you’ll see how I

confused AJ for JA.”

Catherine Zeta-Jones and T-Mobile: “If I can figure out how to use these

phones, so can you.”

Globally, firms have been juxtaposing their brands and themselves with celebrity

endorsers. Some successful ongoing global endorsements are as follows:

Celebrity endorsements have been the bedrock of Pepsi's advertising. Over the

years, Pepsi has used and continues to use a number of celebrities for general

market and targeted advertising, including Shaquille O'Neal, Mary J. Blige,

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Wyclef Jean, and Busta Rhymes, who did a targeted campaign for their

Mountain Dew product.

George Foreman for Meineke. He has also sold more than 10 million Lean

Mean Fat-- Reducing Grilling Machines since signing with the manufacturing

company.

James Earl Jones for Verizon and CNN.

Nike golf balls, since the company signed Tiger Woods in 1996, have seen a

$50 million revenue growth. Nike's golf line grossed more than $250 million

in annual sales. In 2000 he renegotiated a five-year contract estimated at $125

million.

Other successful endorsements like Nike—Michael Jordan, Dunlop—John

McEnroe, Adidas—Prince Naseem Hamed, and so on.

Venus Williams, tennis player and Wimbledon champion has signed a five-

year $40 million contract with sportswear manufacturer Reebok International

Inc.

Ad Week has put together a list of the top ten celebrity endorsement deals, with

Catherine Zeta Jones topping the list at $20 million from T-Mobile.

The complete list is:

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1. Catherine Zeta-Jones, T-Mobile: $20 million

2. Angelina Jolie, St. John: $12+ million

3. Nicole Kidman, Chanel No. 5: $12 million

4. Jessica Simpson, Guthy-Renker: $7.5 million

5. Gwyneth Paltrow, Estee Lauder: $6+ million

6. Charlize Theron, Dior: $6 million

7. Julia Roberts, Gianfranco Ferre: $5 million

8. Brad Pitt, Heineken: $4 million

9. Scarlett Johansson, L'Oreal: $4 million

10. Penelope Cruz, L'Oreal: $4 million

(As per survey in 2007)

Indian Scenario

SOFT drinks, chocolates, biscuits, paints, cars, tires, scooters, Suitings, footwear,

watches, pens, hair oil, chyawanprash, insurance packages, diamonds, liquor, photo

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films ... The list could go on. It appears that, of late, corporate India does not want to

sell anything to the consumer without using either a movie star or a sports hero.

So, when Cadbury India wanted to restore the consumer's confidence in its chocolate

brands following the high-pitch worm’s controversy, the company appointed Amitabh

Bachchan for the job. Last year, when the even more controversial pesticide issue

shook up Coca-Cola and PepsiCo and resulted in much negative press, both soft drink

majors put out high-profile damage control ad films featuring their best and most

expensive celebrities. While Aamir Khan led the Coke fight back as an ingenious and

fastidious Bengali who finally gets convinced of the product's ‘purity’, PepsiCo

brought Shah Rukh Khan and Sachin Tendulkar together once again in a television

commercial which drew references to the ‘safety’ of the product indirectly.

Or take Dabur India. With the objective of infusing fresh life into the stagnant

chyawanprash category and staving off competition from various brands, Dabur India

roped in Bachchan for an estimated Rs 8 crore. Bachchan, in fact, is the star brand

ambassador for more than one Dabur brand.

But are celebrity contracts, which run into several crores of rupees, actually

justified?

The question is open to interpretation.

The success that the Aamir Khan ‘thanda matlab’ commercial brought Coca-Cola is

universally acknowledged. A creation of Prasoon Joshi, National Creative Director,

McCann-Erickson, the ad has been exported to foreign markets as well.

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But are celebrity ambassadors actually a safe bet for brands? And what about

overkill?

Defending the use of Bachchan in the new Cadbury film, Bharat Puri, Managing

Director, Cadbury India Ltd, says,

"Bachchan has a universal appeal cutting across ages. The initiative is part

of a renewed effort to re-establish the category."

Bachchans’ contract with Cadbury is for a period of two years, and this includes

endorsing and promoting Cadbury chocolates. Even as they maintain that chocolate

sales are now reverting to normal, Cadbury officials admit that sales slipped by about

3-5 per cent, following the worm’s controversy. Apart from the Bachchan ad film,

Cadbury's other attempts at bringing back consumers into its fold include introducing

double packaging for its Cadbury Dairy Milk chocolate - which the company says is

the first such attempt for chocolate packaging in the country.

In addition to the high-profile Bachchan, Dabur India has TV hostess Mandira Bedi as

the brand ambassador for its Vatika hair care range, while Hindi movie star Karishma

Kapoor endorses the Dabur Amla hair oil brand.

Points out Suresh Kumar, Director, Mindspark Consulting, Chennai,

"The cornerstone of any good brand is its intrinsic product quality. For a

celebrity to add value to a brand there must be a relevant and recognizable match of

values of the celebrity and the brand as perceived by consumers."

Framework to Make Effective Celebrity Endorsement Program

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With the cut-throat competition and continuously changing market dynamics, one has

to assess the market conditions and re-evaluate its current marketing strategies such as

its portfolio of celebrity endorsement. The action plan should be able to answer the

following key questions: -

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?

Figure 6: Evolution of Celebrity Endorsements

One can gauge the performance of celebrity endorsement marketing program across

the various stages of development (Refer to Figure 6). We have attempted to prepare a

framework to build a more effective celebrity endorsement program: -

1. ALIGN CELEBRITY ENDORSEMENT WITH BUSINESS OBJECTIVES.

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The attributes of the celebrity should be intrinsically valuable and aligned with the

product, brand and company. Figure 7 suggests strategies to be adopted by a

company depending on its brand positioning and the brand fit with the celebrity.

Figure 7: Brand-Celebrity Attribute Fit Matrix

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.

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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 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.

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.

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.

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2. MEASURE AND QUANTIFY PERFORMANCE

A part of the marketing budget should be allocated to primary and secondary research

to determine the overall return on investment - measuring the real performance of a

celebrity endorsement against the company's business objectives.

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 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: -

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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. 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.

Figure 8: Endorsement Cost-Value Relationship

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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

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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.

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.

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.

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Chapter 6: Successful Celebrity Endorsements for a Brand- An

Indian Perspective

India is one country, which has always idolized the stars of the celluloid world.

Therefore it makes tremendous sense for a brand to procure a celebrity for its

endorsement. In India there is an exponential potential for a celebrity endorsement to

be perceived as genuinely relevant, thereby motivating consumers to go in for the

product. This would especially prove true if the endorser and the category are a

natural lifestyle fit like sportspersons and footwear, Kapil-Sachin and Boost or film

stars and beauty products.

In the Indian context, it would not be presumptuous to state that celebrity

endorsements can aggrandize the overall brand. We have numerous examples

exemplifying this claim. A standard example here is Coke, which, till recently, didn't

use stars at all internationally. In fact, India was a first for them. The result was a

ubiquitously appealing Aamir cheekily stating “Thanda matlab Coca Cola”. The

recall value for Nakshatra advertising is only due to the sensuous Aishwarya. The

Parker pen brand, which by itself commands equity, used Amitabh Bachchan to

revitalize the brand in India.

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Now, the notification about the Government levying an eight per cent service tax on

celebrity brand ambassadors has once again brought celebrity endorsement deals into

the spotlight. While tax consultants believe the celebrity fee should be taxed directly,

several corporate have come to the defense of their endorsers. The debate is over

whether contracts are made exclusive of the tax liability so that the tax burden is on

the corporate and not on the brand ambassador, or whether contracts are framed

inclusive of the tax agreement, which results in the tax liabilities being borne by the

celebrity.

It is a debate that is open to interpretation. So is the question of celebrity endorsement

deals themselves. But till the time the corporate world continues to foot fancy bills of

celebrity endorsers and till consumers continue to be in awe of the stars, the party is

not likely to break up.

The Kings Of Indian Television

Both SRK and Amitabh Bachchan endorse a vast (and bizarrely diverse) array of

products.

Advertisers describe Bachchan as "India's most saleable face." On top of filming nine

movies, last year he advertised everything from Pepsi, pens, hair oil, diamonds, suits,

bank accounts, chocolate, antiseptic cream, batteries, diet supplements and real estate,

to washing powder. These contracts took his annual income to an estimated 190

million rupees, or about $4 million.

In perplexing ad-speak, Khan is "diamond" to Bachchans "gold dust." Khan's list of

endorsements is growing rapidly - embracing Pepsi, as well as Tag Heuer watches,

motorbikes, cellphones, whiskey, suits, Sunfeast Dream Cream Biscuits, Top Ramen

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Curry Smoodles and Frooti drinks - inflating his earnings to approximately 130

million rupees. In 2006, he advertised a total of 21 brands on television.

"Both these men are able to connect across gender, across generation, across the

whole nation. Only the cricketer Sachin Tendulkar comes close to being able to do

that,” said Mr. Agnihotri

Amitabh Bachchan Shahrukh Khan

THE TOP 3

Earnings per minute

Amitabh Bachchan

What: Actor

How much: Rs 361 per minute

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http://newnimproved.blogspot.com/2006/09/earnings-per-minute_28.html

Kaun Banega Crorepati? Apparently, Mr. Bachchan. With more

endorsements and film releases per year than successful actors half

his age, Bachchans take-home last year was around Rs 19 crore -

that's Rs 361 per minute

Shah Rukh Khan

What: Actor

How much: Rs 247 per minute

The King Khan, who started off modestly as a 'Fauji', made about Rs 13 crore last

year.

This included his endorsement deals for Pepsi, Hyundai Santro - and of course,

wetting himself in a bathtub, surrounded by women for HLL's Lux.

Sachin Tendulkar

What: Cricketer

How much: Rs 1,163 per minute

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India's most loved sportsman makes a lot more than most CEOs of Indian companies;

going by his annual remuneration for 2004-2005. Breaking it down, his three-year

contract for endorsements is worth Rs 180 crores. He is also paid Rs.2350000 for a

five-day test match and Rs.250000for one dayers.

A little bit of elementary math: This highest paid cricketer in the world makes around

Rs 61.15 crore a year, or Rs 1,163 per minute.

Now that’s a whopping amount!

Although Sachin Tendulkar makes more than Amitabh Bachchan or Shahrukh Khan

in particulars to his game career but in the World of Endorsements it’s the rule of AB

and SRK!

Is celebrity advertising effective?

As manufacturing companies invest cores of rupees, through advertising agencies,

every year into campaigning their product taking services of celebrities, the question

arises, Is it worth all the money invested and the headaches and problems of

coordinating Celebrities, their availability and Coordinating with many Celebrities if

they are in number in an advertise and managing their Moods and Habits.

Think of Sachin Tendulkar. He is in Pepsi for soft drinks, Boost in malted beverages,

MRF for tyres, Fiat Palio for cars, TVS Victor for two-wheelers, Colgate Total for

toothpastes, Britannia for biscuits, Visa for credit cards and Airtel for mobile services.

Clearly, IT IS an overload of brands and categories associated with one star. Human is

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suposed to have very few selective specialities. Multi Polar Personalities are very very

few.

Hence a single celebrity endorsing. So many products and categories? Is it Effective?

Interestingly, use of "celebrity advertising" is adopted and carried by is big a, few big

and reputed agencies in the field. They perceive celebrity advertising as a solution to

clients problems.

In the advertising world, celebrity advertising is perceived as a substitute for

'Absence of ides’ and felt that there is a compromise in quality etc- and actually

frowned upon. But still it is perused by media. Urban and rural markets behave

differently. In urban markets a “celebrity” is considered as a common man with some

extra ordinary qualities. But in rural markets a “celebrity” is considered a “god”.

He/She is worshipped. You will see their photos garlanded.

They will build temples, create statues, imitate their styles; even commit suicides if

their celebrity fails to perform or deliver desired results can kill somebody if their

sentiments are hurt about their idols. Hence these factors create or destroy a brand.

Hence, a celebrity is selected very carefully. Cricketers are selected based on their

present form, how long they can survive in that competition etc. Hence may be

replaced after few months or years. But some are very long lasting such as sachin

Tendulkar. Celebritis like Kapil Dev is still endorsing products and are in eyes of

public.

The reasons are:

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A client hits upon celebrity as a solution when his agency is unable to present

to him a viable, exciting solution for his communication/marketing problem.

He then feels that the presence of a well-known face is an easy way out.

SOMETIMES A client looks at a USING celebrity AS solution, to follow

competition. A Competitor deploys a celebrity, and in a quick response

counters attack by using similarly powerful celebrity, to combat competitions.

The result is often achieves quick parity. EG. Coke and Pepsi reacting quickly

to each others advertising gimmicks.

A third reason could be, A Particular celebrity is a client's desire to rub

shoulders with the "glitterati". And signing a celebrity is a passport to that.

Most frequently, celebrities are given as 'fate accompli' to the agency. And

scripts are written around them. For example Sahara India has top

personalities from films and sports on the Board of Directors.

It is rare that there is an idea on the table and client and agency mutually agree

that the presence of a celebrity.

There is no doubt that celebrity advertising has its benefits -- the four Qs:

Quick saliency: It gets cut through because of the celebrity and their attention

getting values. Goodlass Nerolac has ensured high saliency for its brand with

the inclusion of Amitabh Bachchan in its advertising.

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Quick connect: There needs to be no insight but the communication connects

because the star connects. Sachin, Shah Rukh and their ilk's ensure an easy

connect for Pepsi with the youth.

Quick shorthand for brand values: The right star can actually telegraph a

brand message fast without elaborate story telling. Kapil Dev and Sachin

Tendulkar seem to have done that successfully for Boost in the early '90s. And

helped to differentiate it in the malted beverages market.

Quick means of brand differentiation: In a category where no brand is using

a celebrity, the first that picks one up could use it to differentiate itself in the

market. Boost did it in the malted beverage category. They become leaders

and remembered for long. Striking first is an advantage.

Scope of Celebrity Endorsement

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

were patented. Firms have been juxtaposing their brands and themselves with

celebrity endorsers (e.g., athletes, actors) in the hope that celebrities may boost

effectiveness of their marketing.

The increasing number of endorsement throws a valid question to the consumer. Is

there a science behind the choice of these endorses or is it just by the popularity

measurement? What are the reasons which lead to impact of celebrity endorsement on

brands?

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Through research and analysis, this paper develops a 14 points model, which can be

used as a blue print criterion which can be used by brand manager 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 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.

Figure9: Attribute Model

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How Celebrity Endorsements Influence the Consumer?

The basis for the effectiveness of celebrity-endorsed advertising can be linked to

Kelman's processes of social influence as discussed by Friedman and Friedman.

According to Kelman, there are three processes of social influence, which result in an

individual adopting the attitude advocated by the communicator.

Compliance, Identification & Internalization

These latter two processes are particularly applicable to celebrity-endorsed

advertising.

Compliance infers that another individual or group of individuals influences an

individual because he or she hopes to achieve a favorable reaction from this other

group. This process of social influence is not directly applicable to celebrity

advertising because there is little, if any, interaction between the celebrity and the

consumer.

Identification applies to the situation wherein the individuals emulate the attitudes or

behavior of another person or group, simply because they aspire to be like that person

or group. This process is the basis for referent power. It was found that celebrities are

more commonly liked than a typical consumer spokesperson.

Internalization as a process of social influence is said to occur when individuals

adopt the attitude or behavior of another person because that behavior is viewed as

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honest and sincere and is congruent with their value system. The effectiveness of

celebrity advertising traditionally has not been strongly linked to this process, as a

celebrity's reason for promoting a product can just as easily be attributed by the

consumer to an external motive (i.e., payment of fee) as to an internal motive (i.e., the

celebrity's true belief in the value and benefit of the product).

An important issue of concern relates to the development of a strategy for use in

Celebrity Advertising, which benefits from the dramatic impact of dual support of

both the identification and internalization processes of social influence. Celebrities are

well-liked, but the techniques that can be used to enhance their credibility as

spokespeople, and therefore, tie-in more closely with the internalization process needs

to be looked into.

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Chapter 7: Brand, Celebrities & Consumers

Figure 10: Factors Impacting a Brand while being viewed by a Consumer in Media

The model above shows the various factors that affect a celebrity endorsed brand

while viewed by a consumer in the media (both TV and print). The central idea is to

show the impact on brand.

The three major parts to a brand being shown are: -

The Product

Advertisement

The celebrity endorsing it

It is important is to study the relationship between these factors and how they together

act for or against the brand.

The product is important, of course, it may fulfill a need, want or a desire. Quality is

quintessential and, hence, nowadays it is understood the product is of highest quality.

So what’s next? The advertisement is important as a good product could see an early

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exit if the advertisement is handled badly, otherwise, a mediocre product which is

tastefully handled goes long way.

Nine uses of Celebrity Endorsements

Establishes Credibility :

Approval of a brand by a star fosters a sense of trust for that brand among the target

audience- this is especially true in case of new products. The role of a celebrity

endorser in an advertising campaign is, without doubt, linked to the reputation of the

celebrity. If the reputation is damaged, more often than not for reasons other than

professional ,then the quality of his reputation does suffer particularly if it is to do

with his (or her) public behavior.

Example: Dyna ad by Katrina Kaif

Attracts Attention:

Celebrities ensure attention of the target group by breaking the clutter of

advertisements and making the ad and the brand more noticeable.

Example: Shahrukh khan in pespi, Hrithik Roshan in Sony Erricson

Associative Benefit:

A celebrity’s preference for a brand gives out a persuasive message - because the

celebrity is benefiting from the brand, the consumer will also benefit.

Example: Amitabh Bachchan in ‘Dabur Chwyanprash’.

Psychographic Connect:

Stars are loved and adored by their fans and advertisers use stars to capitalize on these

feelings to sway the fans towards their brand.

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Demographic Connect:

Different stars appeal differently to various demographic segments (age, gender,

class, geography etc.).

Example: Amitabh Bachchan with child in Dadur Honey, Sunny Deol in Lux

cozi ad.

Mass Appeal:

Some stars have a universal appeal and therefore prove to be a good bet to generate

interest among the masses.

Example: Sharukh khan And Amitabh Bachchan in Polio Promotion

Mitigating a tarnished image:

Cadbury India wanted to restore the consumer’s confidence in its chocolate brands

following the pitch following the high-pitch worm’s controversy; so the company

appointed Amitabh Bachchan for the job. Last year, when the even more controversial

pesticide issues shook up Coca-cola and PepsiCo and resulted in much negative press,

both soft drinks majors put out high –profile damage control ad films featuring their

best and most expensive celebrities. While Aamir Khan, led the coke fight, as an

ingenious and fastidious Bengali who finally gets convinced of the product’s purity.

Similarly PepsiCo brought Shah Rukh Khan and Sachin Tendulkar together once

again in a television commercial which drew references to the ‘safety’ of the product

indirectly.

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Rejuvenating a stagnant brand :

With the objective of infusing fresh life into the stagnant Chyawanprash category and

staving off the competition from various brand , Dabur India roped in Bachchan for

an estimated project of 8 crore.

The FRED Principle

This concept is seen as the foundation of a successful endorser selection.

F is for Familiarity. The target market must be aware of the person, and perceive

him or her as empathetic, credible, sincere and trustworthy.

R is for Relevance. There should be a meaningful link between the advertised brand

and the celebrity endorser, and more important, between the celebrity endorser and

the defined target market. The audience must be able to identify with the person. If

consumers can immediately associate with an endorser, they will feel more

predisposed to accepting, buying and preferring the brand to competition.

E is for Esteem. Consumers must have the utmost respect and confidence for the

celebrity. Amitabh Bachchan & Tendulkar have these. So do Shahrukh Khan, Preity

Zinta, and Kapil Dev among others. The public respect them because of their

distinguished careers and unassailable salesmanship.

D is for Differentiation. The target consumers must see the endorser as a cut above

the rest. If there is no perceived disparity among celebrities, then the strategy will not

work. Michael Jordan is an example of an international celebrity that rises above the

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clutter. This proves to be a huge contributory factor to his effectiveness as an

endorser.

The Fred concept is not a guarantee to success, but it can serve as a guideline

when selecting a spokesperson. Each organization and its objectives are

different, and should be evaluated on an individual basis.

(Aamir Khan endorsing Samsung Mobiles)

When it doesn’t work

In the last decade or so, there has been a spurt in the use of celebrity endorsements.

And with it, there has been an increase in the number of instances of brands failing to

take off in spite of the biggest and brightest stars endorsing it and consequently

leading to speculation about the soundness of celebrity endorsements as a

communication strategy. 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. Often, the finished

advertising is at best contrived, and often, simply laughable. In the end, the brand

suffers from a mismatched concept and celebrity, and millions of dollars are flushed

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away There are several reasons why celebrity endorsements fail to produce the

desired effect, and each of them has to more to do with the core communication

strategy and less with the celebrity’s pull. Celebrities cannot really be blamed if their

endorsements fail to push up the brand sales. Indeed, for it is important to recognize

that celebrities can create interest - whether that interest converts into sales depends

on various factors such as brand-celebrity disconnect, improper positioning, clutter of

celebrities, or even product life-cycle.

As advertisers pour crores of rupees every year into celebrity advertising, the question

arises… is it worth all the money and the headaches of coordinating stars and

managing their tantrums. Think of Sachin Tendulkar. He means Pepsi in soft drinks,

Boost in malted beverages, MRF in tires, Fiat Palio in cars, TVS Victor in two-

wheelers, Colgate Total in toothpastes, Britannia in biscuits, Visa in credit cards,

Airtel in mobile services and Band-aid. Clearly, an overload of brands and categories

associated with one star. (Business Standard, 2003.)

Causes of letdown

Improper positioning :

Associating with a star, however big he or she may be, in it does not guarantee

sales. The most it can do is generate interest about that product or create a

buzz around it. Take the case of Maruti Versa, which was launched amidst a

lot of fanfare about three years ago. In spite of Maruti signing up superstar

Amitabh Bachchan and his son Abhishek Bachchan as brand ambassadors for

Versa, the brand’s sales remained sluggish. To be fair, the Big B magic did

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work and the ads created significant interest, drawing people into the

showroom. But perhaps the positioning itself was faulty as people were

expecting a larger than life car, just like the brand’s ambassador.

Last year, versa being re-positioned as “the joy of traveling together” Versa

has started doing well and has witnessed an upswing since the new

positioning.

Brand-celebrity disconnect:

If the celebrity used represents values that conflict with the brand values and

positioning, the advertising will create a conflict in the minds of the target

audience who may reject the proposition. For instance Toyota, one of world’s

leading auto manufacturing companies. Toyota chose teeny-pop singer Britney

Spears for its brand ‘Soluna Vios’ a family sedan, which is preferred by

married men and women with children. A youth icon like Britney would’ve

been better used by Toyota for a sleek sports vehicle and for Soluna Vios;

Toyota should choose someone like a mature man, Harrison Ford for example.

Clutter Flutter:

In recent times, there has been such a deluge of celebrity endorsements that it

has led to the very clutter of them that it aimed to break. For instance,

Amitabh Bachchan endorses or has endorsed Pepsi, ICICI, BPL, Parker pens,

Nerolac, Dabur, Reid & Taylor, Maruti Versa, Cadbury and a few social

messages too. Bollywood Badshah Shah Rukh Khan endorses Omega, Tag

Heuer, Pepsi, Hyundai, Clinic All Clear and Airtel among other brands has to

his credit more television commercials than feature films since 1992.

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Celebrities endorsing one brand and using another (competitor):

Sainsbury’s encountered a problem with Catherine Zeta Jones, whom the

company used for it recipe advertisement, when she was caught shopping in

Tesco. A similar case happened with Britney Spears who endorsed one cola

brand and was repeatedly caught drinking another brand of cola on tape.

Inconsistency in the professional popularity of the celebrity:

The celebrity may lose his or her popularity due to some lapse in professional

performances. For example, when Tendulkar went through a prolonged lean

patch recently, the inevitable question that cropped up in corporate circles-is

he actually worth it.

Multi brand endorsement by the same celebrity would lead to

overexposure:

The novelty of a celebrity endorsement gets diluted if he does too many

advertisements. This may be termed as commoditization of celebrities, who

are willing to endorse its logo emblazoned on his bat. But now Tendulkar

endorses a Boost brand and the novelty of the Tendulkar-Sunfeast Campaign

has scaled down.

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Risks associated with Celebrity Endorsements

Fame is a fickle and fleeting companion and can ditch the famous at the slightest

provocation. Celebrities, being human, make mistakes. But their mistakes get as much

attention as their celebrity status and this can adversely affect the brands that they are

endorsing. There are a number of examples, both Indian and International, where

scandals and scams involving celebrity endorsers have caused embarrassment to the

brands they endorse. Companies have to make quick decisions when one of their

endorsers comes under fire or their own image could be tarnished.

If a brand continues with the celebrity, it may adversely affect the image of the brand

and consequently, brand sales. If the brand chooses to distance itself with the tainted

celebrity, the huge costs spent on roping in the celebrity and making of the ads may

go down the drain and even then the association of the brand with the celebrity might

by then be so ingrained that the damage is already done.

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Chapter 8: RESEARCH BY ACNielsen

According to a global online consumer survey conducted by leading research

company ACNielsen in 42 markets across the globe, out of a random list of

celebrities Brad Pitt was voted the best male celebrity to endorse six out of a possible

10 product categories, including luxury wear, evening wear, designer lingerie, luxury

perfume, sexy, provocative wear and trendy, cutting edge fashion. Kidman and

Angelina Jolie each received top votes for four of the 10 categories, with Kidman

taking out best celebrity endorsee for designer watches, luxury wear, evening wear

and luxury perfume and Jolie leading for casual wear, designer lingerie, sexy,

provocative wear and designer sonnies.

Other celebrities who held appeal as endorsees were tennis star Maria Sharapova for

sports wear and singer/actress J-Lo for trendy, cutting edge fashion, while consumers

voted actor George Clooney as hottest endorsee of men’s evening wear, Tiger Woods

for designer watches, and David Beckham for sports wear.

In Australia consumers showed their patriotism, with Kidman holding onto top votes

for the same four categories, while Jolie was piped at the post by Kylie Minogue for

lingerie and J-Lo lost her top spot to Minogue for trendy, cutting edge fashion.

And while Pitt maintained his appeal with Aussie consumers, he had to share the title

of best endorsee of casual wear with local talent Russell Crowe, as well as sharing

best endorsee of trendy, cutting edge fashion with Johnny Depp and luxury wear with

George Clooney.

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The ACNielsen survey revealed not only consumers’ endorsee preferences, but also

any potential discord between certain products and celebrities. Russell Crowe, for

example, was one of the least likely celebrities Australian consumers wanted to see

modeling men’s lingerie and, similarly, they had a difficult time associating actor

Jackie Chan with sexy, provocative wear.

Table 1: Female celebrities voted best fashion apparel endorsees

Product category Australia Asia Pacific Global

Casual wear Angelina Jolie Nicole Kidman Angelina Jolie

Designer watches Nicole Kidman Nicole Kidman Nicole Kidman

Luxury wear Nicole Kidman Nicole Kidman Nicole Kidman

Evening wear Nicole Kidman Nicole Kidman Nicole Kidman

Designer lingerie Kylie Minogue Angelina Jolie Angelina Jolie

Luxury perfume Nicole Kidman Nicole Kidman Nicole Kidman

Sexy, provocative wear Angelina Jolie Angelina Jolie Angelina Jolie

Sports wear Maria Sharapova Maria Sharapova Maria Sharapova

Designer sunglasses Angelina Jolie Angelina Jolie Angelina Jolie

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Trendy, cutting edge

fashion

Kylie Minogue Jennifer Lopez Jennifer Lopez

Table 2: Male celebrities voted best fashion apparel endorsees

Product category Australia Asia Pacific Global

Casual wear Brad Pitt David Beckham Brad Pitt

Designer watches Tiger Woods Tiger Woods Tiger Woods

Luxury wear George Clooney Brad Pitt Brad Pitt

Evening wear George Clooney Brad Pitt George Clooney

Designer lingerie Brad Pitt Brad Pitt Brad Pitt

Luxury perfume George Clooney Brad Pitt Brad Pitt

Sexy, provocative wear Brad Pitt Brad Pitt Brad Pitt

Sports wear Tiger Woods Tiger Woods David Beckham

Designer sunglasses Brad Pitt Tom Cruise Brad Pitt

Trendy, cutting edge

fashion

Brad Pitt/

Johnny Depp

Brad Pitt Brad Pitt

ADVERTISING PERSPECTIVE

Here is a complete reversal of opinion. As per study conducted by Agrawal and

Kamaru (1995), of the crores of rupees spent on advertising, only 10% is spent on

endorsers. They further pointed out that customers are more likely to choose goods

endorsed by celebrities than those without such endorsements.

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Celebrity endorsement is quite a topic by itself and one would go on to narrate factors

like mass appeal, good conduct, physical features, high recall value etc, which are

used to evaluate celebrities before getting them to endorse products. Its not just there

talent, dedication, style, hard work or luck that takes one to such dizzy heights - ITS

ALL OF IT TOGETHER.

So, what actually happens is that companies allocate a certain % of their surplus or net

profits as advertising expenditure - say Rs. 20 crore and then based on several other

factors (production etc) fix a price for product. Now if they pay the famous XYZ Rs.

10 crore, they are not increasing their ad budget. They will adjust remaining Rs. 10

crore on less costly media such as print media. So in effect, consumers are not

penalized.

So if Nike gets rich by $200 million by its Air Jordan shoes, cashing on Michael

Jordan’s popularity and so pays him $50 million, is he overpaid?

Past to Present Trends

Firms have been 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).

Three of humankind’s greatest inventions, (cinema, radio, and television) have

extended the scope of endorsement as an advertising technique. Today, use of

celebrities as part of marketing communications strategy is fairly common practice for

major firms in supporting corporate or brand imagery.

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Reasons for celebrity campaigns

Respondents indicated that the biggest challenge in macrons nowadays is how to

stand out—break through ever increasing media clutter. As can be seen in Table-1,

consistent with the academic literature, managers considered that celebrity endorsers

enable messages to overcome this challenge due to their fame and high profile.

An agency CEO stated that every time advertisements appear in television or press,

they interrupt a program or an article. Therefore, they are an intrusion and very few

people positively welcome advertisements though many do not reject them. People

see advertisements as a part of their normal life. But, as an advertiser you have got to

stand out from the crowd and celebrities can potentially achieve this. It was disclosed

that the recent campaign for Ford Puma involving Steve McQueen generated instant

awareness. Actually, the same spot won the best famous person usage award in the

1998 Creative Circle Honours (Campaign 1998).

Celebrity usage trend

Nine respondents felt that there was an increasing usage of celebrities as endorsers,

but four out of nine thought that this increase was in line with the overall growth of

advertising.

Increasing consumer interest in sports and leisure activities was argued to be a reason

for the increasing utilisation, as promotional activities have been simultaneously

moving more towards entertainment as well as product/service selling. Availability of

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far more celebrities (e.g. footballers, rugby players, and comedians) who are willing

to endorse products because they can make a lot of money and gain fame as a result of

endorsements was another reason.

The snowball effect, which occurs when a company uses a celebrity, as others start to

consider using one was given as another reason. Last, but not least the need to stand

out quickly in today’s expensive and cluttered media environment was mentioned as

an additional reason for the increasing usage of celebrities in marcoms.

Managers observing no increase claimed that personalities come and go. They

indicated that certain products (e.g. female skincare products, shampoos, cigarettes)

always had celebrities namely Ronald Reagan for Chesterfield cigarettes and Ian

Botham for Hamlet. They argued that celebrities have got more expensive and

probably more risky since media nowadays digs out the lives of celebrities.

Celebrities were thought to be not enjoying the untouchable status they had in the 60s

and 70s.

Even though managers were only asked to give their opinions on reasons for using

celebrities, effectiveness of celebrity endorsements, and whether there was an

increasing utilisation, most of them also commented simultaneously on potential

pitfalls of this strategy. These responses could lead to the conclusion that managers

are very cautious in selecting celebrity endorsers. Indeed, as it is presented in the

following part, a range of factors are considered in choosing celebrities to endorse

brands.

Selection Criteria and Their Commonality

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In this section, factors considered while deciding on a particular celebrity endorsers

for a campaign and whether these factors’ importance may differ within the UK and

among other countries are explored.

Selection criteria

According to managers, factors

considered while selecting celebrities

vary depending on how celebrities are

utilised; celebrity as the central feature,

or celebrity for the added interest. In the

former case, a campaign can not work

without a particular celebrity (e.g. BUPA

Health Centre used Arsenal’s striker Ian

Right who rapidly recovered from his

injury). On the other hand, in the latter

case an agency can use a variety of

celebrities as the aim is to get added

interest (e.g. One-2-One mobile phone

company used such celebrities as Chris

Evans—John Lenon, and Ian Right—

Martin Luther King, to promote its new

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Fit with the advertising idea

Celebrity—Target audience match

Celebrity values

Costs of acquiring the celebrity

Celebrity—Product match

Celebrity controversy risk

Celebrity popularity

Celebrity availability

Celebrity physical attractiveness

Celebrity credibility

Celebrity prior endorsements

Whether celebrity is a brand user

Celebrity profession

Celebrity Equity membership status

service). Table-3 comprises a list of criteria mentioned in choosing a celebrity

endorser for a campaign in a ranking order.

Table-2 Selection criteria

Execution Issues

This section specifically investigates; types of media used by advertising agencies in

campaigns involving celebrities, opinions of managers concerning utilising celebrities

in integrated marcom campaigns, international transferability of celebrity involved

campaigns in managers’ view, and whether to use one or multiple celebrities in

campaigns.

Media usage with celebrity campaigns

Even though respondents indicated that they have used celebrities in all available

media, television was the main form of utilisation. They maintained that an agency

had to balance expense items in any given campaign budget. As celebrities come with

high price tags, not using them in television seemed unreasonable for managers as it

would be a waste of money due to the fact that press does not bring personalities to

life. Media such as billboards, sponsorship, cinema advertisements, point of sale,

posters, press, PR, and radio are generally used to support television advertisements.

Managers argued that using celebrities in several media was good for getting a return

on investments from celebrity fees. Managers pointed out that many minor celebrities

were used in media such as press and direct mail pamphlets, but major celebrities are

reluctant to commit themselves to media other than television.

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Even though building-up a whole marketing communication campaign around a

celebrity(s) makes complete sense, most celebrities are reluctant to sign such

deals for four reasons.

First, they are very concerned about their exposure. Should they sign a deal for

more than the main media, they know their picture can be stuck all over the

place and they would lose control over their exposure.

Second, they do not want to be too closely associated with a particular product

that may cost them other potential deals.

Third, they are uncomfortable with some media, as they are motionless.

Comedians work well on television since it is animated, which allows

comedians to present their personality. For instance, Henry Enfield is only

comfortable with television and radio because his humour comes into life in

these mediums.

Last, but not least they may be unable to sign for some media as their previous

deals prohibit them. For example; a celebrity might be endorsing an alcohol

brand in print and his/her deal prohibits them to endorse any other products in

print.

In sum, agency managers believed that if a celebrity is good enough for a firm’s front

line, benefits from integration exceed costs. If the celebrity is willing to be involved in

an integrated campaign, integrating campaigns involving celebrities would bring

better results than traditional campaign execution tactics.

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International transferability

In the literature, it has been argued that celebrities with world-wide popularity can

help global marketing communication attempts (Kaikati, 1987). In order to discern

what advertising practitioners think about transferring campaigns involving celebrities

globally or internationally, they were asked to comment on the subject. It should be

noted that the academic dispute on the difference between the terms ‘global’ and

‘international’ was dismissed in order to prevent confusing practitioners. Therefore,

responses should be treated as answers for transferring campaigns to another nation or

nations.

All respondents argued that celebrities were as transferable as their fame world-wide.

With celebrities, agencies try to bring instant shorthand for campaigns. In this respect,

a planning director believed that celebrities with international recognition were more

valuable internationally than nationally as the need for instant shorthand is greater in

the international arena. Of course, transferring campaigns to countries where

celebrities are not known does not make any sense. Most transferable celebrities are

suggested to be film stars because everybody around the world sees their films.

Campaigns involving sports people in world sports such as football, basketball, car

racing and athletics (e.g. Ronaldo, Michael Jordan, Damon Hill, Michael Schumacher,

Carl Lewis), pop stars (e.g. Spice Girls, Paul McCartney, Michael Jackson), and

supermodels (e.g. Cindy Crawford, Linda Evangelista, Naomi Campbell) are also

argued to be transferable. Television stars like all the cast of Friends, and Seinfeld

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may transfer to countries in which their series are run. It was claimed that Ford

Puma’s McQueen advertisement worked well in the western world.

Respondents contended that in deciding to transfer a campaign to other countries the

brand subject of the campaign is an important factor. The more a brand is

international/global, the easier it is to transfer campaigns for the brand. If a brand is

not internationally known and an international celebrity is endorsing the brand, it is

more likely that consumers would remember seeing the celebrity in an advertisement,

but could not remember what the advertising was for (the vampire effect).

Another important point raised was the campaign objective. In order to execute

campaigns internationally, they needed to be developed keeping global objectives in

mind. Developing international campaigns was deemed to be a difficult task because

of cultural differences. International advertisements are about pure endorsement rather

than humor. With international campaigns the cost of acquiring celebrities increases

and the number of suitable celebrities decreases. Agencies have to work out to which

countries a celebrity’s fame transfers and consider the brand’s business within those

countries.

Multiple Brand Endorsement vs. Multiple Celebrity Endorsement

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.

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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.

Multiple Celebrity Endorsement (Adidas & Hyundai Santro)

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.

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The companies have to first clarify their business objectives, brand values and then

decide who the celebrities are who can carry them forward. Otherwise, their can be

unnecessary investments without proper return. So the celebrity endorsement cost has

to be weighed up against the return on marketing investment.

It was argued that answers to the following questions would help agencies in deciding

how many celebrities to utilise for a campaign. Is it better to have different celebrities

who appeal to different people within the target audience? Is one celebrity enough?

How long is the campaign supposed to run? How much money is going to be spent?

What media it is going to be run in?

Using multiple celebrities or a single celebrity partially depends on the time scale a

campaign is using to have impact. If the campaign has a long-term strategy, agencies

would be more careful because potential downsides are much more than potential

upsides. The longer the time scale, the more substantial the brand, and thus, the less

likely a campaign would stay with a particular celebrity. In the case of using multiple

personalities, none of the celebrities may be specifically associated with the endorsed

brand or vice versa. There is a great chance of confusing consumers about the brand’s

identity. In order to prevent this possible confusion, when managers have genuine

reasons and means to utilize more than one celebrity for a particular campaign, they

should make sure every and each celebrity must possess compatible meanings that are

sought for brands.

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.

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The values that display themselves in regrettable behavior could transfer themselves

to the brand. 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.

Further Research Avenues

The above findings have been explored on advertising agency managers’ point of

view regarding celebrity endorsement strategy. Findings revealed that managers see

media clutter as the biggest challenge for marketing communications practitioners

nowadays and utilise a celebrity endorsement strategy to overcome this challenge. A

celebrity campaign to bring desirable campaign results must support a good idea and

there must be an explicit fit between celebrities and brands. While deciding on a

particular celebrity, a range of criteria are reported to be taken into account and these

criteria’s importance was communicated to be very similar in the UK, but it would

differ across countries mainly because of cultural differences.

The most preferred medium for celebrity endorsement strategy was television

although using several media was seen as an effective way to get good return on

investment since celebrity fees are usually high. Accordingly, managers thought

integrated celebrity campaigns were affective, but getting celebrities to sign such

deals was argued to be very difficult. Lastly, managers argued that using multiple

celebrities or a single celebrity depends on the time period over which a campaign is

planned to have impact, campaign budget, and variance in target audience

characteristics.

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Since this research was exploratory and had a relatively small sample size, there is a

need for confirmatory research with a larger sample testing hypotheses derived from

the findings presented in this paper. Moreover, because the research involved

managers working within large advertising agencies, further research involving

managers from all sizes of advertising agencies is needed in order to

confirm/revise/reject the findings. Researchers interested in the subject may wish to

duplicate the research in other countries which may provide a basis for cross-cultural

comparisons of manager’s attitudes towards celebrity endorsement strategy.

Generating Consumer Credibility:

New product? An endorsement can signal that your new product (or product relaunch)

is a serious competitor and demands consideration. Tiger Woods and Buick is a great

example ($40MM, 5 years). I couldn’t tell you much about a Buick even if you put a

gun to my head, but the fact that Tiger is a pitchman makes me think I should give

them a look.

Reinforcing Brand Positioning:

Murky brand positioning? Sometimes a celebrity with a clear persona can reinforce

(or redefine) the brand positioning you seek. Tiger Woods and Nike Golf is a choice

example ($105MM, multi-year). Tiger stands for peak performance and

professionalism, just as I see the Nike Golf brand.

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Differentiating in a Crowded Market:

Competitors knocking off your product? If you’re looking to just stand out above the

noise, this could be a cheap route (skip product differentiation!). A good example is

Tiger Woods and…um…well…I guess Tiger doesn’t do these stunt endorsements.

Tiger Woods (Golf Player)

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Chapter 9: PROJECT SURVEY ANALYSIS

The on field survey taken up on the sample size of a hundred people in the city of

Mumbai resulted in some surprising and some not so surprising findings, based on the

perceptions of the varied respondents, Of course, as aforesaid certain assumptions

have to be made.

People are bored of multiple endorsing celebrities like Amitabh Bachchan, the

results show a drop in their preference to see him endorsing more products at

this age, but the audience still likes him as an eminent personality.

The audience would prefer more modern trends in endorsements like live

promotions by celebrities in busy areas, instead of traditional marketing

concepts and old endorsing techniques. This can be the result of the market

shifting form buyer oriented to consumer/ seller oriented.

Consumers still marginally prefer male celebrities over females, when it

comes to brand endorsements. This may be primarily due to the traits of

toughness and reliability that the male image brings to the product.

Using appropriate endorsement techniques and celebrities judiciously is no

doubt critical in all sectors, but most importantly in those which the consumer

market is vouching for in recent times, like the telecom sector.

The consumers watch out for the company’s image and the use of celebrity

such that he fits the brand values, before deciding on the purchase.

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Profile Of The Respondents

Gender Wise

The market research was administered on a sample of 100 people in the metropolitan

city of Mumbai. Out of these respondents, 53% were male and 47% were female.

(Almost an accurate gender ratio of 1:1). The gender wise break up is given below:

Of the 47% females contributing in the sample size survey of 100, 13 are housewives,

7 are service people working, 21 are students and 4 are professionals, rest 2 are retired

women.

Similarly, of the 53 males, 12 are working service people, 25 are students,10 are

businessmen,5 are professionals and one is a retired personnel.

Composition of Respondents

This above Pie Diagram shows the composition of Males and Females respondents

which are almost equally distributed with 52% of males and 48% of females.

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This shows the composition of the various fields the Female respondents were

comprised of which include Housewives, Service employed, Students, Professionals

and Retired people.

This shows the composition of the various fields the Male respondents were

comprised of which include Service employed, Students, Businessmen, Professionals

and Retired people.

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Age- Group Classification

Age group classification shows that 40 respondents are from the 16-20 age group,38

are from 21-25 age group, 16 are from the 26-30 age group and the remaining 6 are in

the above 30 age

Segregation By Occupation

Of the total number of respondents,5 are professionals having their own independent

profession,12 are service people employed in various government and private

institutes, a major bulk 75 are students while the remaining 5 are housewives and 3

are retired people. The criteria for taking a large number of youth both age group wise

and occupation wise is because of the growing target they are becoming for today’s

companies.

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Lets us now analyze the results of the Questionnaire

Q1. Do you know what is Celebrity Endorsements ?

The answers which were comprised of 95% of respondents know what is Celebrity

Endorsements and 5% were not actually aware of what Celebrity Endorsement meant.

Q2. Do you purchase products by seeing Celebrities ?

The respondents with 82% of telling that they brought products due to Celebrities mainly comprised of Students and Housewives.

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Q3. Who is the most preferred Celebrity Endorser?

As from the chart we can see that Shahrukh Khan stands the most preferred celebrity

followed by Amitabh Bachchan.

Q5. Do you think the brand endorser uses that particular type of brand ?

The majority of the respondents did think that the Celebrities do use the Brands they

promote while 42% said No for the Question

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Q6. Who is the most eminent personality according to you?

Amitabh Bachchan stood first as the most eminent personality according to his stature

and personality followed by Shahrukh Khan and Sachin Tendulkar at 37% and 21%

respectively.

Q7. Who according to you is endorsing brands which suit their personality ?

Amitabh Bachchan received 42% of votes thereby leading the polling results followed

by Shahrukh Khan at 38% and Sachin Tendulkar at 15% and other celebrities at 5%.

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Q8. Which is Your Favourite Brand Category ?

The Brand category included various types out of which Consumer Goods stood at the

top followed by FMCG. Confectionaries were the last with 8% of votes.

Q9. What kind of Endorsement is more appropriate?

Advertisement took the lead in having the most effect on the minds of the consumers

as they are constantly bombarded with the ads on the TV so they leave a much far

impact. While Live Promotions was the last as the impact is more of the Celebrity

rather than the Products.

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Q10. Which Celebrity Gender is most preferred on Screen?

Consumers still marginally prefer male celebrities over females, when it comes to

brand endorsements. This may be primarily due to the traits of toughness and

reliability that the male image brings to the product.

Q11. Who is the most Preferred International Celebrity?

The top list was taken by Brad Pitt with 43% of votes followed by Angelina Jolie at

28%. Recently both were rated as the top celebrities in the US survey of Sexiest

Hollywood Actors

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Q12. Do Non Celebrities affect the consumption pattern of the Brand ?

As the trend of usage of non celebrities is on the rise, it was essential to ask the

consumers what they thought of the impact. The result was that most of them thought

that it doesn’t have any impact or very little impact. Celebrities are still being most

favourite and widely accepted means of promotion.

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Chapter 10: LIMITATIONS AND RECOMMENDATIONS

Negative impacts of Celebrity Endorsement on the brand

More often talked about is the extreme usage of a celebrity called 'lazy

advertising', that is inadequate content masked by usage of a celebrity. A good

example is the use of Boris Becker by Siyaram and Steve Waugh by ANP

Sanmar. Also as said earlier, associating with a star, in itself does not

guarantee sales. There is also the fear of Brand-celebrity disconnect which

points out that if the celebrity used represents values that conflict with the

brand values, the advertising would create conflict in the minds of the target

audience.

Clutter in brand endorsements is very prominent these days and such kind of

over-exposure can be bad for the brand as the recall value drops by a huge

margin. A popular drawback of celebrity endorsement is the 'Vampire Effect'

or the celebrity overshadowing the brand. 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 Credibility. 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

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there is anything negative regarding the celebrity associated with the brand in

the news, then brand is bound to be affected.

Multiple product endorsement also has a negative impact on customers'

purchasing intentions. Tripp et al. investigated the effects of multiple product

endorsement by celebrities on customers' attitudes and intentions. They found

that the number of products a celebrity endorses negatively influences

consumer perception of the endorser and the advertising itself. It was

suggested that when as many as four products are endorsed, celebrity

credibility and likeability, as well as attitude towards the ad, may attenuate.

Superstar Amitabh Bachchan endorses multiple brands like Pepsi, Mirinda,

ICICI, BPL, Parker pens, Nerolac, Dabur, Reid & Taylor, Maruti Versa,

Hajmola, Tide, Cadbury and a few social messages. It has worked in some

cases, while in some cases it has not. D. K. Jain, Chairman and President,

Luxor Writing Instruments Pvt. Ltd, the marketer of the Parker brand said,

"Using Amitabh Bachchan as our brand ambassador has helped in

strengthening our brand image and recall within the target audience".

Tarun Joshi, Communications Custodian, Reid & Taylor said, "Amitabh

Bachchan is an icon with universal appeal and has helped us to reach out to

the real 'Bharat.' In fact, agents and retailers have told us that already

customers have started asking about the 'Amitabh wali suiting.'"

Incase of Nerolac Paints, which was endorsed by Amitabh Bachchan, around

80% of the respondents when asked to associate Bachchan with any paint, did

so with Asian Paints, which is the biggest competitor of Nerolac.

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The budget or cost is an important factor for celebrity endorsement.

Depending on the status of the celebrity, remuneration could run into millions

of rupees for several years or may also include a profit sharing plan. For

example when S. Kumar's used Hrithik Roshan for their launch advertising for

Tamarind, they reckoned they spent 40 - 50 per cent less on media due to the

sheer impact of using Hrithik. Sachin's endorsements got him $18 million over

five years. When Aamir first endorsed Pepsi in 1995, he received Rs 17 lakh

for it; his Coke commercials in 1999 got him Rs 2 crore. Hrithik Roshan in his

highflying days reportedly made over Rs. 20 crore in endorsements and events

by 2001.

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 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.

The late '80s saw the beginning of celebrity endorsements in advertising in

India. Hindi film and TV stars as well as sportspersons began encroaching on

a territory that was, until then, the exclusive domain of models. The key to

understanding how celebrities are brands is how much of an appreciation the

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celebrity adds to that product. This, in fact, mirrors precisely the way in which

a company, product or organisation is separate from the brand that relates to it.

“Celebrity endorsements give a brand a touch of glamour, and the hope that a

famous face will provide added appeal and name recognition in a crowded

market,” says Aparna Nair, a market trade analyst, whose job profile includes

advising about the ‘brand value’ of a celebrity. She believes that in the battle

for the mind, you get the customer excited by showing him a known face, and

an effective demand is created. This would normally work best when the

concerned brand has close substitutes, or has a need for differentiation, or

requires quick entry in a short lifecycle category.

Thus, to sum it up, we can put the disadvantages of a celebrity endorsing a brand

as one approach having a few serious risks, which are highlighted below,

The reputation of the celebrity may derogate after he/she has endorsed

the product: Pepsi Cola's suffered with three tarnished celebrities - Mike

Tyson, Madonna, and Michael Jackson. Since the behaviour of the celebrities

reflects on the brand, celebrity endorsers may at times become liabilities to the

brands they endorse.

The vampire effect: This terminology pertains to the issue of a celebrity

overshadowing the brand. If there is no congruency between the celebrity and

the brand, then the audience will remember the celebrity and not the brand.

Examples are the campaigns of Dawn French—Cable Association and

Leonard Rossiter—Cinzano. Both of these campaigns were aborted due to

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celebrities getting in the way of effective communication. Another example

could be the Castrol commercial featuring Rahul Dravid.

Inconsistency in the professional popularity of the celebrity: The celebrity

may lose his or her popularity due to some lapse in professional performances.

For example, when Tendulkar went through a prolonged lean patch recently,

the inevitable question that cropped up in corporate circles - is he actually

worth it? The 2003 Cricket World Cup also threw up the Shane Warne

incident, which caught Pepsi off guard. With the Australian cricketer testing

positive for consuming banned substances and his subsequent withdrawal

from the event, bang in the middle of the event, PepsiCo - the presenting

sponsor of the World Cup 2003 - found itself on an uneasy wicket.

Multi brand endorsements by the same celebrity would lead to

overexposure: The novelty of a celebrity endorsement gets diluted if he does

too many advertisements. This may be termed as commoditisation of

celebrities, who are willing to endorse anything for big bucks. Example, MRF

was among the early sponsors of Tendulkar with its logo emblazoned on his

bat. But now Tendulkar endorses a myriad brands and the novelty of the

Tendulkar-MRF campaign has scaled down.

Celebrities endorsing one brand and using another (competitor):

Sainsbury’s encountered a problem with Catherina Zeta Jones, whom the

company used for its recipe advertisements, when she was caught shopping in

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Tesco. A similar case happened with Britney Spears who endorsed one cola

brand and was repeatedly caught drinking another brand of cola on tape.

Mismatch between the celebrity and the image of the brand: Celebrities

manifest a certain persona for the audience. It is of paramount importance that

there is an egalitarian congruency between the persona of the celebrity and the

image of the brand. Each celebrity portrays a broad range of meanings,

involving a specific personality and lifestyle. Madonna, for example, is

perceived as a tough, intense and modern women associated with the lower

middle class.

The times have changed, ever since the evergreen 80’s, the market for products

ranging from consumer durables to cosmetics and FMCG’s to various services has

shown an upward trend in growth. There have been many factors contributing to this

linear growth and one most important factor has been the use of celebrities for

marketing various goods and services.

We saw, various companies employing successful celebrity endorsement strategies,

for some it changed the entire feel of the product, whereas for some the case, did

backfire! In proportion to the changing times, now various other strategies are

employed too. The concept of INFILM BRANDING is not new, internationally and

nationally as well, we have ‘n’ number of cases to show the presence of brands in

blockbuster movies, trying to create an impact on the minds of the consumer in some

appropriate or inappropriate scene in the film. Subtleness is the main virtue of

INFILM BRANDING, anything going deep in the limelight, can be a sure turn off for

the audiences, and hence the prospective customers as observed in Subash Ghai’s

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‘Yaadein’ where the soft drink giant Coke, paid a huge amount for branding itself and

used to appear on screen on every third shot.

Well, not just film stars, sports stars are involved big time in endorsements too. The

20-20 World Cup recently, garnered a whooping TRP. Even displacing Indian

favourtie primetime sagas. Every household had their eyes glued to the sports

channel, an ad spot during those times would have fetched a fortune, both for the

company (in terms of returns) and for the channel (in terms of popularity and

revenue). The success of the Indian team and their felicitation ceremony after their

successful campaign in the world cup , added value to the “personality” of the team

players. So it did not come as a surprise when players like M.S. Dhoni, Yuvraj Singh,

Irfan Pathan and even S. Sreesanth experienced a sudden rush in endorsement offers

by various companies. The BCCI sometime back had also lifted the endorsement

restrictions it ha dim posed on players during the team’s bad patch, so now the players

are cashing in on the endorsements. It has been reportedly stated that all the players

who have been signed from the successful T20 campaign, have raked in around Rs.

160 crores as a whole, on brand endorsements itself!

Today various promotional campaigns are held, mostly by international brands in

various domestic markets and in popular places like hyper markets, malls or tourist

spots, where a celebrity portrays a new collection or simply talks about his “next

project”; while a big banner displaying the brand stands out in the background

(Popular strategy for Tag Heuer and Omega, employing SRK and Abhishek Bachchan

for the job, respectively).

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Celebrity endorsements primarily work on the core value of “people’s favourite stars”

claiming testimony for the brand. Sunfeast regarded in the low league of biscuits

initially, gained substantial market share after SRK started appearing in its TVCs. The

same principle works today in the interviews on Television news channels or print

media, where celebrity endorsers are interviewed on the launch of the endorsing

company’s new associated product. Celebrities should also bear in mind the

creditworthiness, reliability and transparency of the company and the brand and other

such intangibles, before they step forward to, portray it to the public, as such they are

no toddlers who are given little toys to play with and would continue to do so just for

the sake of it.

Today celebrity endorsements have gone a bit overboard and the concept of celebrity

marketing is being stretched out of limits. We have lost count of Amitabh Bachchan’s

brand endorsements and Shahrukh following suit! Multiple endorsements can work in

a given scenario sometimes, but in a nation where literacy is growing hand in hands

with economy, people do wonder after doing so many films and so many

endorsements, should Mr. Bachchan stress his health for money at this age, God

willingly they face no scarcity of any means! The teaser campaign by Cadbury made

effective use of the ‘Brand AB’; not only in TVC’s but also in long promotional

articles in print, radio and of course hoardings and sign boards. It can be regarded as

one for the most successful endorsements portrayed by Mr. Bachchan , even at this

age. No doubt the energy and the charisma is still the same, but then it all depends on

using them judiciously, in the right mix of the product and the ‘people’.

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Every time SRK pops out to speak about a particular brand relating to his new film in

the midst of an ongoing serial, there is a high chance of him attracting attention but at

the same time a shade overdone can be a sure turnoff for the audience.

Today even brands of a particular category, market the brands of their same category.

Ekta Kapoor’s serials will always have a scene, where the starcast speaks about her

next upcoming project both on TV and the big screen. The use of celebrities for social

causes has indeed been a helping hand, be it Amitabh Bachchan for Polio

awareness, Sachin Tendulkar for ‘Driving safely’ or Sanjay Dutt promoting

Chickens and poultry after the bird flu scare.

Brands with the right celebrities and strategies will work but the challenge is to only

maintain the right mix of the suitability of the product to the endorser, and at the same

time not to maintain a ‘too repetitive celebrity’. Companies like HLL and P&G often

use the common man from the same background, to endorse house related products

which thus, appeal to the ‘housewife’; who decides on the purchase of such brands for

washing utensils, sanitary and hygienic use, hair care, etc; because she can

communicate well and trust the common person, who is assumed to have the same

background as her, and thus the product becomes automatically reliable.

Whether Celebrity endorsement has a positive or a negative impact on the brand is a

debate that is open to interpretation. But till the time the corporate world continues to

foot fancy bills of celebrity endorsers and till consumers continue to be in awe of the

stars, the party is not likely to break up.

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(Katrina Kaif endorsing Spice Mobiles)

Therefore, for celebrity endorsements to work effectively there are some

fundamental ground rules: -

The brand promise and the brand personality should be clearly articulated.

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

Once these criteria are met, endorsements can work as a force multiplier. A deeper

insight in the impact of celebrity endorsement on consumers' minds can be explained

by the meaning transfer model, explained in the next section.

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CONCLUSION

Celebrity endorsement can be a goldmine or a minefield for a company's brand

building process. There have been extensive studies relating to the process of

celebrity endorsement and brand-building These 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.

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.

"Brand" is the most valuable asset of any company; building its image is, thus, of

paramount importance. Any thoughtless adventure can be like the Sword of Damocles

upon your head. Celebrities do not make brands but ideas do. If the former were true

then brands would have vanished when the hype and hoopla around the celebrities

faded. Celebrity endorsement is also one of the ideas. But, its easy to come up with

new ideas; the hard part is letting go of what worked for you two years ago, but will

soon be out-of-date. Therefore, it is imperative to invest in good ideas; which will

bring good returns. 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.

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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 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.

I would finally end the project with a quote by Brian Philcox

"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."

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QUESTIONNAIRE

Name:

Age:

Gender:

Occupation:

Q1. Do you know what is Celebrity Endorsements ?Yes No

Q2. Do you purchase products by seeing Celebrities ? Yes No

Q3. Who is the most preferred Celebrity Endorser? Amitabh Bachchan Shahrukh Khan MS Dhoni Sachin Tendulkar

Q4. Which Brand do you associate your favourite Celebrity with (in accordance to the above Question):

Q5. Do you think the brand endorser uses that particular type of brand ?Yes No

Q6. Who is the most eminent personality according to you? Amitabh Bachchan Shahrukh Khan Sachin Tendulkar

Q7. Who according to you is endorsing brands which suit their personality ? Shahrukh Khan Amitabh Bachchan Sachin Tendulkar Others:

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Q8. Which is Your Favourite Brand Category ? FMCG’s Consumer Durables Fabrics Mobiles Services Confectionaries

Q9. What kind of Endorsement is more appropriate? Advertisement Print media Inflim Branding Reality Shows Live promotions

Q10. Celebrity Gender most preferred on Screen? Male Female

Q11. Preferred International Celebrity? Catherine Zeta Jones Brad Pitt Angelina Jolie David Beckham

Q12. Do Non Celebrities affect the consumption pattern of the Brand ? Yes No Can’t Say

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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

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,

www.rediff.com – article by Country head, O&M India

indiainfoline.com – article 'Celebrity Endorsements in brands

www.wikipidea.com

The Brand Called You – Peter Montoya (Chapters 3, 5, 6 and 9)

How Asia Builds Strong Brands – Asian Branding strategies (Chapter 4).

AC Neilsen websites.

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http://www.wikipidea.com/

100marks project on celebrity endorsement by me

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