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A

Seminar Report – II

Subject Code: 536421(36))

Submitted in the partial fulfillment for the award

of degree of

MASTER OF BUSINESS ADMINISTRATION (MBA)

of

Chhattisgarh Swami Vivekanand Technical UniversityBhilai (C.G.)

Session 2009-11

Guided by Submitted byDR. ANUP GHOSE PANKAJ PATELDesignation : Roll No 5053609110

Enrollment No AE6695MBA - IVSem.Sec.- “A”

DEPARTMENT OF MANAGEMENTDISHA INSTITUTE OF MANAGEMENT AND TECHNOLOGY

(Disha Education Society)Satya Vihar, Vidhansabha-Chandrakhuri Marg, Mandir Hasaud,

Raipur (C.G.)492007

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INDEX

s.no Content Page.no

SEMINAR TOPIC -1

Measuring the impact of celebrity endorsement of

specific advertisement on product selection

1 Introduction 5

2 Celebrity branding & its effect n consumers 5

3 Relationship between a celebrity & a brand 7

4 Scope of acelebrity on incumbent brand 11

6 Compatability of celebrity persona 13

7 Successful celebrity endorsement 138 Celebrity attributes 15

9 Argument for celebrity endorsement 16

10 Argument against celebrity endorsement 18

11 Brand,celebrities & consumers 19

12 Selection of celebrity 20

13 Types of celebrity endorsement 22

14 Facts over the years 23

15 Celebrity endorsement as a strategy 23

16 Objectives of celebrity endorsement 24

17 Brand image and celebrity 25

18 Conclusion 26

INDEX

SEMINAR TOPIC -2

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“ANALYTICAL STUDY OF SMALL

ENTERPRENEUR DEVELOPMENT”

1 Introduction 28

2 Enterpreneurship in india 30

3 Role of enterpreneurship in economic development 36

4 Factors affecting entrepreneurnial growth 37

5 Institutional finance to entrepreneurs 40

6 Conclusion 43

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Choice of the celebrity, hence, is of utmost importance and is usually done based on many

different parameters - appeal, looks, popularity or even just a fantasy figure to endorse a brand.

In today's highly competitive markets, big brands are at logger-heads when it comes to products,

each having a similar product to that of a rival. Where does one brand gain that quintessential

advantage - advertising, service, promise of trust, or even the all important price factors?

Advertising seems to be the best platform where brands prefer to compete on - right from hiring

the best advertising agencies to getting the biggest celebrities. What would be the formula to

success then? Well, a good creative agency, a large enough promotional budget and a huge star

to endorse your brand would definitely ensure in the minds of a brand management team a

feeling of security, success and a triumph over the competitors brand.

The general belief among advertisers is that brand communication messages delivered by

celebrities and famous personalities generate a higher appeal, attention and recall than those

executed by non-celebrities. The quick message-reach and impact are all too essential in today's

highly competitive environment.

The different models applied by brands to achieve the full potential of such endorsements,

highlight the need for a convergence between the theoretical and pragmatic approaches of brand

building and effective advertising. The importance of a celebrity-brand match and the variousroles played by them as brand-associates show the momentum this strategy has gained in the last

decade or so. We put forward certain ideas like 'positioning by association', 'diminishing

celebrity utility' and the Multiplier Effect which show the triangular relationship between the

brand, the consumer and the celebrity.

India is a country where people are star-struck by film stars, cricketers, politicians, and even

criminals. Why? Populations of 1 billion and ticking, everyday people need something or

someone to look up to. A sense of security, admiration, comfort, familiarity, and above all,

someone they aspire to be at some hidden level in their lives. And clever marketers leverage this

very celebrity appeal and are successfully carrying out their jobs by giving the bottom lines of all

the brands what they want - profit, market share and even recall. But how much star power is too

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much? "Does Amitabh really use Tide," asked a 6 year old to her mother. Her mother laughs and

says, "No way, just a gimmick." What does that do to the brand?

Now, despite the potential benefits derived from celebrity endorsements, they increase a

marketer's risk manifolds and should be treated with full attention and aptitude. A brand should

be cautious when employing celebrities to ensure promise believability and delivery of the

intended effect. The growing importance of mythical characters as celebrities and their sway

over the target segments are ample proof of public demand for icons to look up to. As the

celebrities traverse from a mere commercial presence to public welfare message endorsements, a

whole new dimension is added to this process and helps us in achieving a holistic view of the

impact which celebrities generate in every sphere and segment through their well-versed

endorsements.

At the end of the day, do any stakeholders in a company (employees, contractors, customers,

shareholders, communities the company supports with jobs) benefit from a celebrity

endorsement?

Does anyone buy a product because a Bollywood or TV actor/actress stands up and reads a script

in somewhat convincing manner? Are their distinctions in how consumers perceive these types

of endorsements and respond to them?

What happens when a celebrity endorser gets involved in a public scandal, or worse, dies? Will

the product lose consumer support or perish?

The most important thing to remember is that putting a celebrity in an ad is not an idea in itself.

Unfortunately, this is how most celebrities are being used in Indian advertising, where they just

become a prop. Ideally, there should be an idea that makes the celebrity relevant to the product

and the consumer. A celebrity's presence in the ad should be contextual.

Celebrity endorsement cannot guarantee fool-proof success. The celebrity endorsement strategy

must be integrated with target market characteristics, and the other elements of the marketing

mix such as product design, branding, packaging, and pricing. The message execution that will

be mouthed by the celebrity must likewise be made clear and single-minded. You can do this

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cleverly by aligning the spirit of the brand to the product, or by using a celebrity because it

ensures that people will notice you, and hopefully remember what the brand is saying. Smart

associations are ones where the former happens.

Before we go into analyzing success and failure stories of brands, we examine the title once

again and try looking at it extremely minutely.

Relationship between a Celebrity & a Brand

When a consumer thinks about a brand, the link with the celebrity node is animated to a certain

level through spreading activation (Anderson 1983a). The joint activation of brand and celebrity

provides a path over which one's evaluation of the celebrity has an opportunity to transfer to the

brand. The key to the process is the simultaneous activation of the brand and celebrity nodes.

Negative information about the celebrity activates the celebrity node, which then activates the

brand node to some degree and allows reduced evaluation of the celebrity to transfer to the

brand. Studies by Noffsinger et al. (1983) and Judd et al. (1991) provide empirical evidence

demonstrating that attitudes can be affected in such a way.

It is also important to view the consumer in their social and cultural setting to further see how

celebrity endorsements increase sales and impact brands over time. Celebrities usually form a

very good example of a reference group appeal. This is particularly beneficial to a marketer and

a brand who can cash in on the success of the star and, hence, push his brand. People who idolize

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their celebrities, hence, have a biased affinity to the brand their favorites endorse. As time passes

on, they believe that they by adopting the brand that their celebrity endorses are becoming more

like them. Celebrities can be used in four ways namely: testimonial, endorsement, actor and

spokesperson.

Right now the current hot favorite in India is roping in celebrities for social causes like pulse

polio, etc. This has shown to be having a positive effect on the people. In India, Bollywood and

sport personalities rule the mind-space and airwaves.

A recent study by FCB-ULKA was done on celebrity endorsements in India. Here, they

discussed two parameters: Compatibility Index and Trait Index when it came to finding the

relationship between a celebrity and a brand.

Compatibility Index meant that the consumers saw a suitable match between the brand and the

celebrity. Trait Index was based on the match between brand and celebrity personality traits. The

numbers showed that Compatibility Index was more favorable than Trait Index. E.g., Hrithik

Roshan scored high on his Compatibility Index (100) as compared to his Trait Index with Coca

Cola. But the end user being the consumer preferred him. The other startling fact was the high

points 93 and 100 by Salman Khan. But Thums-Up had to drop him after Salman's accident. But

people still associate Thums-Up with the Khan. The other important factor is unaided associationand Salman scored higher than other competition. But in the long run, to protect the brand

image, Salman was dropped. So what is important is the way the customer perceives a brand and

the celebrity, so if the celebrity is favored, it does have a positive influence over the brand. The

other

factor is the sheer image or popularity of the star, if the star's image is larger than life, for

example, for Amitabh Bachchan or Sachin Tendulkar, the Compatibility Index seems to be a

natural collorary.

Taking the millennium superstar Amitabh Bachchan, as an endorser, he fulfills all the FRED

objectives, namely, Familiarity (target market is aware of him, finds him friendly, likeable,

dependable and trustworthy); Relevance (which says that there should be a link between the

endorser and the product as well as between the endorser and the audience); Esteem (the polio

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endorsement, for example, is successful as the masses see him as a credible name-face-voice);

Differentiation (in all his projections, he is seen to be one among the masses, and yet he towers

above them. He is different). His appeal is universal; lesser mortals merely cater to specific

niches. While there may be different reasons, depending on the category, the lifecycle stage in

which the brand is, and the particular marketing mantra being the flavor of the moment, the main

reason is to make the brand stand out and to facilitate instant awareness.

For example, in the much talked about Shah Rukh - Santro campaign, the organization wanted to

overcome the shortcoming of an unknown brand, Korean at that. The objective of the company

was to garner faster brand recognition, association and emotional unity with the target group.

The Santro ad showed the highest recall amongst auto ads, despite average media spends for the

category. Reason being simple - star power paid off.

Another example was the launch of Tamarind by S. Kumar, they reckoned they spent 40-50 per

cent less on media due to the sheer impact of using Hrithik Roshan who was riding on the 'Kaho

Na Pyar Hai' wave of Success. Ad recall was as high as 70 per cent, and even the normally

conservative trade got interested (so while a new brand would normally take 8-10 months for

entry into a Shopper's Stop, Tamarind was prominently displayed within 20 days of launch). But

now looking at the long term effects of Hrithik, his movies began to flop and it may seem a sheer co-incidence that the Tamarind brand died out as well.

Looking on the flip side, the biggest concerns from the advertiser's point of view is that of

'vampiring' - the celebrity being bigger than the brand. Consider the 1980s when Dinesh Suitings

chose Sunil Gavaskar as their brand endorser. Soon it was seen that Gavaskar completely

overshadowed the brand. A similar case was that of Shah Rukh and Mayur Suitings, where post

termination of the contract, the corporate had to vest crucial monies in a campaign where the

sole objective was to wean the brand identity off Shah Rukh Khan. So having a celebrity who

may outshine your product is not such a viable idea is the common consensus.

The other problem is that of duration of endorsement, and a possible mismatch between the

celebrity's life cycle and that of the brand. Owing to unavailability of dates, sometimes long-term

contracts are signed, but the celebrity's life might be over soon. Multiple endorsements are the

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other problem. There is unfortunately a limited pool of celebrities who can resonate with

consumers. So you have the same celebrity endorsing several categories, as in case of Shah Rukh

and Sachin, who are completely over-exposed - one would assume a fair degree of confusion and

little room for credibility, and hence, a possible devaluing amongst customers.

Studying TV and print advertisements, one will realize that either some celebrities are endorsing

several brands or a specific brand is endorsed by different spokespersons. These concepts are

called multiple brand endorsement and multiple celebrity endorsement respectively.

The question is, does this special form of celebrity endorsement affects consumers' brand

attitudes? Following Tripp et al. (1994), the endorsement of as many as four products negatively

influences the celebrity spokesperson's credibility (i.e., expertise and trustworthiness) and

likeability. They further add that these effects are independent of the celebrity, i.e., the

perceptions of even well-liked stars can be influenced. Reasons may be found in the lack of

distinctiveness, with one famous person endorsing several products instead of concentrating on

and representing one specific brand. Though these findings may be valid, it does not

automatically mean that the concept of multiple product endorsement is useless. Further,

research is suggested on potential positive effects, like transfer of positive brand images, and on

the shape of consumers' response when more than four products are endorsed.

The Scope of a Celebrity on the Incumbent Brand

Simply stating, a brand is a differentiated product and helps in identifying your product and

making it stand out due to its name, design, style, symbol, color combination, or usually a mix of

all these

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

ferret the implicit nuances that act as sources of strong brand images or values: -

• Experience of Use: This encapsulates familiarity and proven reliability.

• User Associations: Brands acquire images from the type of people who are seen using

them. Images of prestige or success are imbibed when brands are associated with

glamorous personalities.

• Belief in Efficiency: Ranking from consumer associations, newspaper editorials, etc.

• Brand Appearance: Design of brand offers clues to quality and affects preferences.

• Manufacturer’s Name & Reputation: A prominent brand name (Sony, Kellogg’s,

Bajaj, Tata) transfers positive associations.

The celebrity’s role is the most explicit and profound in incarnating user associations among the

above mentioned points. To comprehend this, let us analyze the multiplier effect formula for a

successful brand: -

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S=P* D*AV -- the multiplier effect

Where

S is a Successful Brand

P is an Effective Product

D is Distinctive Identity

AV is Added Values

The realm of the celebrity’s impact is confined to bestow a distinctive identity and provide AV

to the brand; the celebrity does not have the power to improve or debilitate the efficiency and

features of the core product. Thus, we are gradually approaching an evident proposition

claiming, "The health of a brand can definitely be improved up to some extent by celebrity

endorsement. But one has to remember that endorsing a celebrity is a means to an end and not

an end in itself."

An appropriately used celebrity can prove to be a massively powerful tool that magnifies the

effects of a campaign. But the aura of cautiousness should always be there. The fact to be

emphasised is that celebrities alone do not guarantee success, as consumers nowadays

understand advertising, know what advertising is, and how it works. People realize that

celebrities are being paid a lot of money for endorsements and this knowledge leads them tocynicism about celebrity endorsements.

Compatibility of the celebrity’s persona with the overall brand image

A celebrity is used to impart credibility and aspirational values to a brand, but the celebrity needs

to match the product. A good brand campaign idea and an intrinsic link between the celebrity

and the message are musts for a successful campaign. Celebrities are no doubt good at

generating attention, recall and positive attitudes towards advertising provided that they are

supporting a good idea and there is an explicit fit between them and the brand. On the other

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hand, they are rendered useless when it comes to the actual efficiency of the core product,

creating positive attitudes to brands, purchase intentions and actual sales.

Certain parameters that postulate compatibility between the celebrity and brand image are

• Celebrity’s fit with the brand image.

• Celebrity—Target audience match

• Celebrity associated 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.

Successful Celebrity Endorsements for a Brand - An Indian Perspective

The latter part of the '80s saw the burgeoning of a new trend in India - brands started being

endorsed by celebrities. Hindi film and TV stars as well as sports-persons were roped in to

endorse prominent brands. Advertisements featuring stars like Tabassum (Prestige Pressure

Cooker), Jalal Agha (Pan Parag), Kapil Dev (Palmolive Shaving Cream) and Sunil Gavaskar

(Dinesh Suitings) became common. Of course, probably the first ad to cash in on star power in astrategic, long-term, mission statement kind of way was for Lux soap, a brand which has,

perhaps as a result of this, been among the top three in the country for much of its life-time.

In recent times, we had the Shah Rukh-Santro campaign with the objective of mitigating the

impediment that an unknown Korean brand faced in the Indian market. The objective was to

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garner faster brand recognition, association and emotional unity with the target group. Star

power in India can be gauged by the successful endorsement done by Sharukh for three honchos

- Pepsi, Clinic All Clear and Santro.

Similarly, when S. Kumar's used Hrithik Roshan, then the hottest advertising icon 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. Ad recall was as high as 70 per cent, and even the normally

conservative trade got interested.

Confining to India, 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, internationally didn't use stars at all - 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 brand of pen, which by itself commands equity, used Amitabh Bachchan

to revitalize the brand in India. According to Pooja Jain, Director, Luxor Writing Instruments

Ltd. (LWIL), post-Bachchan Parker's sales have increased by about 30 per cent.

India is one country which has always idolized the species of the celluloid world. Therefore, it

makes tremendous sense for a brand to procure a celebrity for its endorsement. In India, there isan 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 (sports-persons and foot-wear, Kapil-Sachin

and Boost, film stars and beauty products).

Some Global Examples

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

Some successful ongoing global endorsements are as follows: -

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• 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, 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 re-

negotiated 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

Celebrity attributes that influence endorsement effectiveness

Previous research examining the effectiveness of celebrity endorsements has focused primarily

on personal attributes of the celebrity that enhance his or her persuasiveness For example, a

number of researchers have used models in which “source credibility”, typically viewed as a

function of trustworthiness and expertise, is the primary factor determining how influential the

endorser will be Trustworthiness refers to the general believability of the endorser, and is thus

broader but conceptually similar to correspondent inferences about the endorser. Expertise refers

to the product knowledge of the endorser and thus to the validity of his or her claims regarding

the product, and is believed to be a factor that increases persuasiveness above and beyond the

effects of trustworthiness. H3.=Perceived product knowledge of the endorser will be positively

associated with attitudes toward the advertised product.Other researchers have emphasized the

importance of source attractiveness in determining liking for the endorser and thereby increasing

endorsement effectiveness To the extent that attractiveness is an important determinant of

endorsement effectiveness, research based on the matchup hypothesis for a discussion of the

matchup hypothesis in relation to endorser expertise) suggests that its importance is limited by

the degree to which attractiveness “fits” well with the advertised product Thus, for example,

physical attractiveness might be useful when selling cosmetics but not when selling computers.

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Furthermore, although source attractiveness research has focused primarily on physical

attractiveness, attractiveness can also be viewed more generally as a positive attitude toward the

endorser. Such positive attitudes might result from admiration or perceived similarity although

effective advertising is more likely to rely on the admiration component because the influential

power of celebrities is closely connected to their status as role models.

The argument for Celebrity Endorsement

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 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.

• Time saving : Celebrity is able to build brand credibility in a short period of time.

• 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. Actress Catherine Zeta-Jones is used by T-

Mobile and Elizabeth Arden. 007 Pierce Brosnan promotes Omega, BMW, and Noreico.

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1. 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.

2. 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 celebrities getting in the way of effective

communication. Another example could be the Castrol commercial featuring Rahul Dravid.

3. Inconsistency in the professional popularity of the celebrity: The celebrity may lose hisor 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

3. 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.

4.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 Tesco. A similar case happened with

Britney Spears who endorsed one cola brand and was repeatedly caught drinking another

brand of cola on tape.

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5. 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 personality of Pierce Brosnan is best

characterized as the perfect gentlemen, whereas Jennifer Aniston has the image of the

‘good girl from next door’.

Brand, Celebrities & Consumer

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 being the impact on brand. The

three major parts to a brand being shown are: -

The Product

Advertisement

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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

next? The advertisement is important as a good product could see an early exit if the

advertisement is handled badly, and otherwise, a mediocre product which is tastefully handled

goes a long way. Lastly, the celebrity in the advertisement, recall, trust, familiarity are some of

the reasons that they are used. Now consider the interactions of these individual factors. The best

of superstars can be doing the advertisement but if the product is far from the image the star has,

the whole advertisement is a waste. Imagine an Amitabh doing an advertisement for ad for youth

apparel. Well, exceptions can be there but then again it depends on the way it is done.

Believability is of vital importance, the TVS Victor advertisement shows us the bike being

compared to the bat of Sachin and the strokes he plays. (Classically executed advertisement with

the bike and Sachin coming out as winners). The relationship between a product and its

advertisement again can be either dependant or none. In that case, a shock value makes people

remember the brand better and, hence, a possible long term loyalty.

Selection of Celebrity

Anyone who is famous may be the right celebrity. However, the appropriateness of the celebrity

largely depends on the product or service. Most advertisers insist that their celebrity

spokespeople have charisma and current popularity. That is why we see more movie and

television stars, athletes, real-life heroes, and musicians acting as brand ambassadors in the

market.

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The choice of celebrity is critical for the success of the advertisement. The celebrity should have

high recognition, high positive affect, and the image of the celebrity must match with that of the

product. For this reason, famous sportsmen are used to endorse sporting goods: Michael Jordan

& Nike, Tiger Woods and Nike, David Beckham endorses Adidas, etc. While it is totally

inappropriate for movie stars to endorse a sports products.

Celebrity endorsements must be used judiciously. If the celebrity is too famous or too popular,

then the celebrity will overpower the product - i.e., people will remember seeing only the

celebrity and forget the product. This happened when Britney Spears came in a Pepsi

Commercial in 2001. Britney Spears was at the height of her popularity - viewers saw the

advertisement to see Britney Spears and forgot all about Pepsi. In India, Hollywood actress

Dimple Kapadia in a sexy swim wear was used in a Cinthol soap advertisement - People

remember seeing the actress - but the soap was forgotten.

The cost benefit analysis of using celebrity in marketing communications is bit tricky. But the

general belief is that using celebrity is a lot cheaper in building a brand. For example, S.Kumar’s

built the brand "Reed & Taylor’s" as a premier suiting material by having Amitab Bachan in its

advertisements. To achieve the same without a celebrity would have taken longer time & more

money. In a span of less than two years after launch, the brand Reed & Taylor’s" has become the

second largest seller of cloth for men’s suits in India.

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Selection of the right celebrity is crucial. The needs of the brand—rather than the fame of the

celebrity—should be the primary criteria when selecting a celebrity spokesperson. The

celebrity's physical attractiveness, values, and credibility also matter tremendously. However, it

would be suicidal to forget about the target audience.

Types of Celebrity Endorsements

Celebrity branding has many aspects. A slight change in the type of branding used can result in

either a great success or a dismal failure. Celebrity branding falls into five general categories:

• Testimonial: The celebrity acts as a spokesperson for the brand.

• Imported: The celebrity performs a role known to the audience.

• Invented: The celebrity plays a new, original role.

• Observer: The celebrity assumes the role of an observer commenting on the brand.

• Harnessed: The celebrity's image is integrated with the ad's storyline.

Facts over the Years

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

• Aishwarya Rai had once endorsed 'Fuji-Film' camera rolls. The company made an

agreement with her to endorse their camera rolls. But, Aishwarya's magic did not work

there and they had to terminate the contract.

• Amitabh Bachchan (AB) was seen endorsing Maruti's Versa Car. The AB factor worked

wonders as far as generating curiosity was concerned but the actual product couldn't meet

the expectations of people, and hence, the endorsement strategy didn't work. He has been

used very effectively by Parker Pens, ICICI Bank and Cadbury's to name a few.

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

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• Magic Johnson lost his endorsement deals when he announced in 1991 that he's HIV-

positive. It wasn't until July 2003 that he landed his first endorsement deal since the

announcement.

• Ticket sales at Wimbledon are known to have shot up significantly for all matches

featuring the latest 'sex-symbol' on the circuit - Anna Kournikova. An average player

who is yet to win even a single tennis tournament, Anna is known to have earned far

more from endorsements than her tennis career could ever have given her.

Celebrity Endorsements as a Strategy

How Tiger Woods’s endorsement of Accenture is beneficial to the company in sending the

message of high performance. This is just an example of having celebrity endorsement.Marketers of consumer products have long used celebrities to endorse their product - and this has

become a common strategy. I therefore have chosen to write about the theory and the intentions

behind the strategy of using celebrity endorsements

Objectives of celebrity endorsement

Defining the objectives of the advertisements is the first step. In general, there are four major

objectives for any advertisement. Note that not all advertisements need to have all the objectives.

1. Establish the product need

stablishing a need for a product or a product category is the necessary first step. This is

more important in new-to-world category of products In Indian context, consider the

advertisement for Polio Immunization drive - the TV advertisement featured Amitab

Bachan telling that immunization is a must for every child - while people suffering from

polio are shown in the background along with healthy kids. This advertisement used a

celebrity to create the need for polio immunization.

Another good example is Toyota’s advertisement of Innova in India. The TV

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advertisement prominently shows Amir Khan playing different roles while traveling in an

Innova. The different roles - establish the need for such a big car in India. ( Note that

Indian car market is dominated by small cars - which can seat only four adults, Toyota

wanted to establish the need for a 8 seater car in India)

2. Create Brand Awareness

Once the need for a product is established, customers must be able to associate the brand

with the product category. For example iPod is strongly associated with portable MP3

players, Nike with sports shoes etc..

A classic example of this is Nike’s use of Michael Jordan advertising for Nike. This

advertisement instantly created a strong association of Nike with basketball shoes.

3. Set customer expectations

Brand value comes from the customers experience with the product. If the product meets

or beats his expectations, then a positive brand image is created, else a negative brand

image is created. Therefore it is essential to set the customer expectations accordingly.

This is most common in established consumer products - Beauty products, household

cleaning products, food products etc.

4. Create a purchase intention

These are marketing promotion advertisements - Buy one, get one free, or get additionaldiscounts if you buy within a particular date etc.. The sole purpose of such

communication messages is to encourage customers to buy immediately or within a short

period after seeing

Use of celebrity endorsements to create a purchase intention has been very limited. This

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is mainly because such advertisements adversely affect the personality brand value of the

celebrity. Being associated with a discount deal is not favorable image for the celebrity

and the customer.

Brand Image & Celebrity

Research has shown that there are three aspects that influence a customer's attitude and, hence,

the long term impact on the brand - Attractiveness, Trustworthiness and Expertise. The matrix

below shows us the images and the celebrities: -

Aspect of Brand Image Celebrity Product

Attractiveness Elegance Aishwarya Rai Nakshatra Diamonds

Beauty Madhuri Dixit Emami

Classy Saif and Soha Ali Khan Asian Paints-Royale

Stylish Saif Ali Khan Provogue

Amitabh Bachhan Reid & Taylor

Trustworthiness Honest Tarun Tejpal Tehelka

Reliable MS Dhoni TVS Star City

Expertise Knowledge Sachin & Sehwag Reebok

Qualified Rahul Dravid Gillette

CONCLUSION

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Celebrities have always been the easiest way for a new product launch (consumer goods) and

will remain to do so in the near future on account of their mass appeal and a world full of star

stuck loyal fans. But the impact on the brand is much greater than just an advertisement showing

a celebrity.

We have seen that the correct choice of a celebrity can surely increase sales but when it comes to

long term loyalty and impact on the brand. The effect is yet somewhat debatable. In the end, the

product must deliver for the customer, no matter who endorses the product, if the customer does

not see himself getting value from his purchase, he will not buy it. But yes, celebrities over time

can influence the loyalty and make a person friendlier to a brand. Brand and celebrities are here

to stay for a long time and in this age of slick advertising and mass media and unthinkable

budgets, celebrities are having a field day charging huge amounts and making more money thantheir mainstream professions. But then do they really care about the brand? Or is it just the

money? But the bottom line, celebrity endorsements are here to stay.

When Aishwarya Rai appeals to the nation to donate their eyes while she personally pledges

them, she strikes a chord with millions of viewers. Shabana Azmi inspires a sense of tremendous

awe and respect while being shown as visiting HIV patients. No matter how much we raise a hue

and cry over one celebrity being all over the place and marketing just about everything, it still

works for most of us.

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“ANALYTICAL STUDY OF SMALL

ENTERPRENEUR DEVELOPMENT”

ENTREPRENEUR

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INTRODUCTION

The word ‘entrepreneur’ has been taken from the French language where it cradled and

originally meant to designate an organizer of musical or other entertainments. Oxford English

dictionary (in 1897) defined an entrepreneur, “the director or a manager of a public musical

institution, one who ‘get-up’ entertainment, especially musical performance”. In the early 16 th

century, it was applied to those who where engaged in military expedition. It was extended to

cover civil engineering activities such as construction and fortification in the 17 th century. It was

only in the beginning of the 18th century that the word was used to refer to economic aspects. It

this way, the evolution of the concept of entrepreneur is considered over more than four

centuries. Since than, the term ‘entrepreneur’ is used in various ways and various views. These

view are broadly classified into three groups, namely: -

• Entrepreneur as a risk-bearer.

• Entrepreneur as a organizer.

• Entrepreneur as a innovator.

CHARACTERSTICS OF AN ENTREPRENEUR

• Hard work

• Desire for high achievement

• Highly optimistic

• Independence

• Foresight

• Good organizer

• Innovative

FUNCTION OF AN ENTERPRENEUR

• Idea generation and scanning of the best suitable idea.

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• Determination of the business objectives.

• Product analysis and market research.

• Determination of form of ownership/organization.

•

Completion of promotional formalities.• Raising necessary funds.

• Procuring machines and material.

• Recruitment of men.

• Undertaking the business operation.

ENTREPRENEURSHIP

INTRODUCTION

Different authors define entrepreneurship differently, some call it as ‘risk-bearing’, while some

call it as ‘innovating’ and some call it as ‘thrill-seeking’. Let us considered some important

definitions of entrepreneurship: -

In a conference on entrepreneurship held in United States, the term ‘entrepreneurship’ wasdefined as, “it is the attempt to create value through recognition of business opportunities, the

management of risk-taking appropriate to the opportunity, and through the communicative and

management skills to mobiles human, financial and material resources necessary to bring a

project to fruition”.

According to schumpter, “entrepreneurship is based on purposeful and systematic innovation. It

include not the independence businessman but also company directors and managers who

actually carry out innovative function”.

In the above definitions, entrepreneurship refers to the

functions performed by an entrepreneur in establishing an enterprise. Just as management

regarded as what managers do, entrepreneurship may be regarded as what entrepreneur do. In

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other words, entrepreneurship is the act of being an entrepreneur entrepreneurship is the process

involving various actions to be undertaken to establish an enterprise. It thus, a process of giving

birth to new enterprise.

ENTERPRENEURSHIP IN INDIA

CURRENT PERSPECTIVE

In a country like India, social (value system) and cultural issues hold their importance besides

issues related to infrastructure. Any innovation to succeed in our society needs to be accepted by

our value systems and cultural issues. It will not be wrong to say that Dot.com (or any

innovation) will not succeed until and unless a high level of awareness is achieved and the idea

is taken to the common people. An acceptance by the mass in itself is a kind of social

innovation. Further, in our country, where the population is more concerned about making both

ends meet, entrepreneurial activity will achieve sustainability only when support is provided

both at the societal and governmental levels.

SCOPE OF ENTERPRENEURSHIP DEVELOPMENT IN INDIA

In India there is a dearth of quality people in industry, which demands high level of

entrepreneurship development programmer through out the country for the growth of Indian

economy.

The scope of entrepreneurship development in country like India is tremendous.

Especially since there is widespread concern that the acceleration in GDP growth in the post

reforms period has not been accompanied by a commensurate expansion in employment. Results

of the 57th round of the National Sample Survey Organization (NSSO) show that unemployment

figures in 2001-02 were as high as 8.9 million. Incidentally, one million more Indian joined the

rank of the unemployed between 2000-01 & 2001-02. The rising unemployment rate (9.2% 2004

est.) in India has resulted in growing frustration among the youth. In addition there is always

problem of underemployment. As a result, increasing the entrepreneurial activities in the country

is the only solace. Incidentally, both the reports prepared by Planning Commission to generate

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employment opportunities for 10 crore people over the next ten years have strongly

recommended self-employment as a way-out for teaming unemployed youth.

We have all the requisite technical and knowledge base to take up the

entrepreneurial challenge. The success of Indian entrepreneurs in Silicon Valley is evident as

proof. The only thing that is lacking is confidence and mental preparation. We are more of a

reactive kind of a people. We need to get out of this and become more proactive. What is more

important than the skill and knowledge base is the courage to take the plunge. Our problem is we

do not stretch ourselves. However, it is appreciative that the current generations of youth do not

have hang-ups about the previous legacy and are willing to experiment. These are the people

who will bring about entrepreneurship in India.

We can take the example of Vikas Kedia - one of India's most eligible entrepreneurs; he was

barely 21 when he had turned his back on a possible $ 100,000-a-year job. Vikas Kedia, a

graduate from the Indian Institute of Management-Bangalore, is much in demand. He has also

created history of sorts in the IIM circuit by starting his own dot-com company in Bangalore,

now he has his own company which is a California and Kolkata based GRMtech

At present, there are various organizations at the country level & state

level offering support to entrepreneurs in various ways. The Govt. of India & various State

Govts. have been implementing various schemes & programmes aimed at nurturingentrepreneurship over last four decades. For example, MCED in Maharashtra provides

systematic training, dissemination of the information & data regarding all aspects of

entrepreneurship & conducting research in entrepreneurship. Then there are various Govt.

sponsored scheme for the budding entrepreneurs.

Recognizing the importance of the entrepreneur development in economic growth &

employment generation, Maharashtra Economic Development Council (MEDC) has identified

entrepreneurial development as the one of the focus area for Council activities two years ago.

Various Chambers of Commerce & apex institutions have started organizing seminars &

workshops to promote entrepreneurship. Incidentally, various management colleges have

incorporated entrepreneurship as part of their curriculum. This is indeed a good development.

This shows the commitment of the Govt. & the various organizations towards developing

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http://vikas.visitlab.com/

http://vikas.visitlab.com/



entrepreneurial qualities in the individuals.

PROMOTING ENTERPRENEURSHIP

In India, where over 300 million people are living below the poverty line, it is simply impossible

for any government to provide means of livelihood to everyone. Such situations surely demand

for a continuous effort from the society, where the people are encouraged to come up with their

entrepreneurial initiative.

ENCOURAGEMENT AT ATTIDINAL AND SOCIAL LAVEL

In the future, innovation and entrepreneurship needs to be encouraged at Social levels,

Governmental levels and Managerial levels. There must be a social attitude that views

innovations with positive attitude and reject an innovation only when it is not acceptable.

ENCOURAGEMENT AT PHYSICAL LEVEL

At this level the encouragement will refer to two aspects necessary for entrepreneurship to

thrive, one is the provision of venture capital and the other being infrastructural support. A realexample is Export Processing Zones which are performing extremely well when given the

support.

WHAT WILL BE THE QUALITIES NEEDED TO SUCEED IN THIS NEW WORLD?

First and foremost, we need the entrepreneurial spirit. Outside India, this spirit has been very

evident in the IT industry. 35% of the start-ups in Silicon Valley are by Indians. We need to have

similar risk-taking ability within the country as well. Entrepreneurs need more than technical

talent, more than business savvy. What they need is the indefatigable energy and incurable

optimism that enables them to take the road less traveled and converts their dreams into reality.

It is a force that beckons an individual to pursue countless opportunities. Entrepreneurs must

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learn how to overcome the risk of failure, or of vulnerability. The institutions can give them

valuable insights and also support them in this.

INDIAN ENTREPRENEURS

1) Dhirubhai Ambani: A proud son of this glorious state of Gujarat, and a man with long ties

with this wonderful city of Ahmedabad, was the greatest example of this spirit of

entrepreneurship!

In a short span of less than 25 years, and without even the benefit of a formal education,

Dhirubhai Ambani built Reliance, a first generation enterprise, into one of the world’s 200 most

profitablecompanies!

He started out in life, working as a mere petrol pump attendant in Aden, Yemen. He had no

technical knowledge, of any of the businesses he wished to create in India.

He had just five hundred rupees in his pocket, a vision of what he wanted to achieve, an intrinsic

faith in the latent demand potential of the Indian markets, a belief in the capabilities of Indian

people, and a burning desire to succeed!

The end result? He created Reliance, a Rs. 75,000 crore enterprise, in a single lifetime!

2) Azim H. PremjI: In a world where integrity purportedly counts for naught, Azim Hasham

Premji symbolizes just that. The 55-year-old Wipro chairman made international waves in 2000

ever since his group became a Rs 3,500-crore empire with a market capitalization exceeding Rs

500,000 million! If any stargazer had been foolish enough to predict in 1966 that a 21-year-old

Indian at Stanford University would one day achieve all this, he'd have been laughed out of

business. At that juncture, Premji was forced to discontinue his engineering studies in the States

due to the untimely death of his father. Returning to India to take charge of a cooking oil

company, the youth infused new life into the family's traditional mindset and trade.

Despite all the success, the media-shy Premji maintained a low profile, letting his work do all the

talking. Until early last year the media broke the story that Azim Premji had become the second-

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richest man in the world… In spite of his billions, however, he still travels economy class .

3) N.R.Narayana Murthy: An Indian IT chief who's really made it big without dropping his

ethical precepts by the wayside is Nagawara Ramarao Narayana Murthy, Chairman of Infosys.

Born in 1946, Murthy's father was a schoolteacher in Kolar district, Karnataka, India. A bright

student, Murthy went on to acquire a degree in Electrical Engineering from Mysore University

and later studied Computer Science at the IIT, Kanpur, India.

The Infosys legend began in 1981 when Narayana Murthy dreamt of forming his own company,

along with six friends. There was a minor hitch, though-he didn't have any seed money. Luckily,

like many Indian women who save secretly without their husband's knowledge, his wife Sudha-

then an engineer with Tatas-had saved Rs 10,000. This was Murthy's first big break.

The decade until 1991 was a tough period when the couple lived in a one-room house. The

second break came in 1991 when Indian doors to liberalization were flung open… Murthy

grabbed the opportunity with both hands and has never looked back ever since. Today, Infosys is

the first Indian company to be listed on the US NASDAQ.

While working in France in the 1970s, Murthy was strongly influenced by socialism. The bubble

was pricked, however, when he was arrested in Bulgaria on espionage charges. Today, he says:"I'm a capitalist in mind, a socialist at heart." It was this belief in the distribution of wealth that

made Infosys one of the first Indian companies to offer employees stock-option plans. Infosys

now has 400 employees who are dollar millionaires.

Heading a company with the largest market capitalization hasn't changed Murthy's life-style

much. The man still doesn't know how to drive a car! On Saturdays-his driver's weekly his wife

drives off-the Infosys chief to the bus stop, from where he boards a company bus to work!

Incidentally, Sudha Murthy is now chief of the Infosys Foundation, which channels Rs 50

million into charity every year.

Simplicity, humility and maintaining a low profile are the hallmarks of this super-rich

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Bangalorean. And the man is principled to a fault. Murthy's unprecedented wealth has catapulted

him into the public glare. After the kidnapping of Dr Rajkumar by forest brigand Veerappan, the

Home Ministry has sounded out the local government about providing Z-category security to

Murthy and Premji. Both characteristically turned down the offer.

In a letter to the police top brass last month, Murthy said he was a simple man who had no

intentions of annoying his neighbors and disturbing traffic with an intrusive entourage of

security vehicles and personnel.

FUTURE PERSPECTIVE

Entrepreneurship as in the past will determine technical innovations, status of social institutions

and political management systems. On the basis of these factors, we can expect the future to be a

place where basic needs will remain and only the wants will change. India will overcome the

barriers of infrastructure; we will also visualize a strong manufacturing and agricultural sector.

Entrepreneurs and not managers will be in demand, as only they will be equipped to find order in

chaos. The focus of entrepreneurial energy will shift from achieving volume sales to fulfill a

specific requirement. Governance will become more transparent and will be willing to acceptchanges necessary for growth and development. More autonomy will become the basis of all

issues.

The future will see Entrepreneurship as the key driver of economic development Technological

obsolescence will become order of the day and there will be more space for leisure. New

businesses will be credited with providing variety of new jobs in the economy. New and small

business will also develop more than their share of product and service innovation. At one end

we will see the technological upheavals in quick succession and on the other end there will be

social value systems and cultural issues undergoing slow but dynamic transformations.

ROLE OF ENTERPRENEURSHIP IN ECONOMIC DEVELOPMENT

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The role of entrepreneurship in economic development varies from economy to economy

depending upon its material resource, industrial climate and responsiveness of the political

system to the entrepreneurial function. India which itself an underdeveloped country aims at

decentralized industrial structure to militate the regional imbalance in level of economic

development, small-scale entrepreneurship in such industrial structure Plays an important role to

achieve balanced regional development. The important role is as follows: -

• Entrepreneurship promotes capital formation by mobilising the idle saving of the public.

• It provides immediate large-scale employment. Thus, it helps reduce the unemployment

problem in the country i.e., the root of all socio economic problems.

• It helps reduce the concentration the economic power.

• It promotes balanced regional development.

• It stimulates the equitable redistribution of wealth, income and even political power in

the interest of the country.

• It encourages effective resource mobilization of capital and skill which might otherwise

remain unutilized and idle.

• It also induces backward and forward linkage, which stimulates the process of economic

development.

• Last but no means the least; it also promotes country export trade i.e., an important

ingredient to economic development.

Rural entrepreneurship

Like entrepreneurship, rural entrepreneurship also conjures different meaning to different

people. Without semantic, rural entrepreneurship can simply be defined as entrepreneurship

emerging in rural areas in rural entrepreneurship. In other words, establishing industrial units in

the rural areas refers to rural entrepreneurship. Or say, rural entrepreneurship implies rural

industrialsation.

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FACTORS AFFECTING ENTREPRENEURNIAL GROWTH

ECONOMIC FACTORS

• Capital: capital is one of the important prerequisites to establish an enterprise.

Availability of capital facilitates the entrepreneur to bring together the land of one,

machine of another and raw material of yet another to combine them to produce goods.

Capital is, therefore, regarded as lubricant to the process of production.

• Labour: It is noticed that cheap labour is often less mobile or even immobile. And, the

potential advantages of lower-cost labour are negated by the deleterious effects of labour

immobility. It can be dealt by utilizing labour intensive methods. The disadvantages of

high-cost labour can be modified by introduction of labour saving innovation. Thus, it

appears that labour problem can be solved more easily than capital can be created.

• Raw material: The necessity of raw materials hardly needs any emphasis for

establishing any industrial activity and, therefore, its influence in the emergence of

entrepreneurship. In the absence of raw material, neither any enterprise can be

established nor an entrepreneur can be emerged.

• Market: The fact remain that the potential of the market constitutes the major

determinant of probable rewards from entrepreneurial function. If the proof of the

pudding lies in eating, the proof all production lies in consumption, i.e., marketing.

NON- ECONOMIC FACTORS

Social condition

• Legitimacy of entrepreneurship: The proponents of the non-economic factor give

emphasis to the relevance of the system of norms and values within a socio-cultural

setting for the emergence of entrepreneurship. In professional vocabulary, such system is

37



referred to as the ‘legitimacy of entrepreneurship in which the degree of approval or

disapproval granted entrepreneurial behavior influences its emergence. We do also

believe that entrepreneurship will be more likely to be emerging in setting in which

legitimacy is high. But, there are others two who took the opinion that entrepreneurship

can emerge even when entrepreneurial legitimacy is low or even negative provided that

the government action can overcome the negative orientations.

• Social mobility: social mobility involves the degree of mobility, both social and

geographical, and the nature of mobility channels within the system. The opinion that the

social mobility is crucial for entrepreneurial emergence is not unanimous. In contrast,

there is other group of scholars who express the view that the lack of mobility

possibilities promotes entrepreneurship. Some even speak of entrepreneurship coming

through crevices in a social system.

• Marginality: A group of scholars hold a strong view that social marginality also

promotes entrepreneurship. They believe that individuals or groups on the perimeter of a

given social system or between two social systems provide the personnel to assume the

entrepreneurial roles. They may be drawn from religious, culture, ethics, or migrant

minority groups, and their marginal social position generally believed to have psychological effects which make entrepreneurship particularly attractive for them.

• Security: Several scholars have advocated entrepreneurial security as an important

facilitator of entrepreneurial behaviors. We also regard security to be a significant factor

for entrepreneurship development. This is reasonable too because if individuals are

fearful of losing their economic assets or of being subjected to various negative

sanctions, they will not be inclined to increase their insecurity by behaving

entrepreneurially.

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Psychological factors

• Need achievement: According to McClelland, constellation of personality characteristics

which are indicative of high need achievement is the major determinant of

entrepreneurship development. Therefore if the average level of need achievement in a

society is relatively high, one would expect a relatively high amount of entrepreneurship

development in that society.

• Withdrawal of status respect: Hagen believes that the initial condition leading to

eventual entrepreneurial behavior is the loss of status by the group. He postulates that

four types of events can produce status withdrawal:

1. The group may be displaced by force.

2. It may have its valued symbols denigrated.

3. It may drift into a situation of status inconsistency

4. It may not be accepted the expected status on migration in a new society.

Government action

The government by its action or failure to act also does influence both the economic and non-

economic factors for entrepreneurship. The supportive actions of the government appear as the

most conductive of the entrepreneurial growth. This true of the Indian entrepreneurship also. In

the societies where the government was committed to there economic development. One way of

examining the role of government in influencing entrepreneurship may be the extent to which

the government is a competitor with entrepreneurs from private sectors, whether for factors of

production or for market. The grater the extent of this competitive role, the less favorable the

opportunity conditions for private entrepreneurship will be.

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OBJECTIVES OF EDPs

The objective of the Programme is to identify persons with entrepreneurial quality, to motivate

them and to train them through a structured training course so as to enable them to set up their

tiny and small-scale industrial ventures with the assistance available from different agencies. The

programmes undertaken under this Scheme are:-

• Identification, selection and motivation of potential entrepreneurs through intensive

campaign and seminars at a cost of Rs. 5000/- per programme and

• A training course at an expenditure of Rs.20, 000/- for 30 participants for duration of 4

weeks. The financing pattern was set in 1986 and an upward revision is presently under

consideration

COURSE CONTENTS AND CURRICULUM OF EDPs

• General introduction to entrepreneurship.

• Motivation training.

• Management skills.

• Support system and training

• Fundamentals of projects feasibility study.

• Plant visits.

INSTITUTIONAL FINANCE TO ENTREPRENEURS

COMMERCIAL BANKS

The commercial banking structure in India consists of:

• Scheduled Commercial Banks in India

40



• Unscheduled Banks in India

Scheduled Banks in India constitute those banks, which have been included in the Second

Schedule of Reserve Bank of India (RBI) Act, 1934. RBI in turn includes only those banks in

this schedule that satisfy the criteria laid down vide section 42 (6) (a) of the Act.

As on 30th June, 1999, there were 300 scheduled banks in India having a total network of 64,918

branches. The scheduled commercial banks in India comprise of State bank of India and its

associates (8), nationalized banks (19), foreign banks (45), private sector banks (32), co-

operative banks and regional rural banks.

"Scheduled banks in India" means the State Bank of India constituted under the State Bank of

India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary

Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section 3 of the

Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under

section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40

of 1980), or any other bank being a bank included in the Second Schedule to the Reserve Bank

of India Act, 1934 (2 of 1934), but does not include a co-operative bank".

"Non-scheduled bank in India" means a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled bank".

OTHER FINANCIAL INSTITUTION

Industrial development bank of India (IDBI); The Industrial Development Bank of India

(IDBI) was established on July 1, 1964 under an Act of Parliament as a wholly owned subsidiary

of the Reserve Bank of India. In February 1976, the ownership of IDBI was transferred to the

Government of India and it was made the principal financial institution for coordinating the

activities of institutions engaged in financing, promoting and developing industry in the country.

Although Government shareholding in the Bank came down below 100% following IDBI’s

public issue in July 1995, the former continues to be the major shareholder (current

shareholding: 58.47%). During the four decades of its existence, IDBI has been instrumental not

only in establishing a well-developed, diversified and efficient industrial and institutional

structure but also adding a qualitative dimension to the process of industrial development in the

41



country. IDBI has played a pioneering role in fulfilling its mission of promoting industrial

growth through financing of medium and long-term projects, in consonance with national plans

and priorities. Over the years, IDBI has enlarged its basket of products and services, covering

almost the entire spectrum of industrial activities, including manufacturing and services. IDBI

provides financial assistance, both in rupee and foreign currencies, for green-field projects as

also for expansion, modernisation and diversification purposes. In the wake of financial sector

reforms unveiled by the Government since 1992, IDBI evolved an array of fund and fee-based

services with a view to providing an integrated solution to meet the entire demand of financial

and corporate advisory requirements of its clients. IDBI also provides indirect financial

assistance by way of refinancing of loans extended by State-level financial institutions and banks

and by way of rediscounting of bills of exchange arising out of sale of indigenous machinery on

deferred payment terms.

LIFE INSURANCE COPPORATION OF INDIA (LIC) : The Oriental Life Insurance

Company, the first corporate entity in India offering life insurance cover was established in

Calcutta in 1818 by Bipin Behari Dasgupta and others. Europeans in India were its primary

target market, and it charged Indians heftier premiums. The Bombay Mutual Life Assurance

Society, formed in 1870, was the first native insurance provider. Other insurance companies

established in the pre-independence era included. The Corporation, which started its businesswith around 300 offices, 5.6 million policies and a corpus of INR 459 million, has grown to

2,048 offices servicing around 180 million policies and a corpus of over INR 3.4 trillion.

• Bharat Insurance Company (1896)

• United India (1906)

• National Indian (1906)

• National Insurance (1906)

• Co-operative Assurance (1906)

• Hindustan Co-operative (1907)

• Indian Mercantile

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http://en.wikipedia.org/w/index.php?title=Oriental_Life_Insurance_Company&action=edit


http://en.wikipedia.org/wiki/Calcutta

http://en.wikipedia.org/wiki/1818



http://en.wikipedia.org/wiki/Calcutta

http://en.wikipedia.org/wiki/1818



• General Assurance

• Swadeshi Life (later Bombay Life)

COCLUSION

As I m doing an analytical study on small entrepreneurial development I would loke to start this

project with a perspective of it. This perspective includes the introduction of enterpreneur,

enterpreneurship, factors al quality managementeffecting entrepreneurial growth ,

entrepreneurship in india, entrepreneurial development progeam.

After studying the perspective I work on start-up of entreprise. It includes projects, financing of

enterprises, and ownership structure. Here project includes three stages, first is project

identification, secoundly project formulation and last project appraisal.

After this I considered what the various areas from which this enterprise getting support. It

includes financial financial institution , lease, taxation benefits for small enterprises, andgovernment policy for small enterprises.

Management plays a vital role in the development of enterprises. In thid topic I’ll consider what

kind of management is necessary. Nature and scope of business, fundamentals of management,

working capital management, marketing management, human resourse management, total

quality management. The secound last step is the development of enterpreneur. Development is

generally required in small enterprises. Growth strategies and suggestion for industrial sickness.

At the end I have given an case study related to total quality management (TQM).

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Bibliography

Books : enterpreneurship development –s.s. Khanka

Links : www.google.com

www.vikimedia.com

www.mleconsulting.com

Print media : the economic timestimes of india

pankaj patel sr celebrity_endorsement

Documents