“A STUDY ON THE EFFECT OF CELEBRITY

ENDORSEMENT ON THE BRAND IMAGE OF PEPSI IN LPU”

Submitted to Lovely Professional University

In partial fulfillment of the requirement for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Group No.
87

Submitted By: Roll No. Registration No.

Pardeep Yadav------------RR-1803-A-08---------------10810219
Abhishek Kumar----------RR-1803-A-11---------------10804922
Ruchi Sodhi---------------RR-1808-A-12----------------10804521
Haziq Mushtaq-----------RR-1803-A-18----------------10800085

Submitted To:

Ms. Malika Rani

DEPARTMENT OF MANAGEMENT

LOVELY PROFESSIONAL UNIVERSITY

PHAGWARA

(2010)

1
 TO WHOM SO EVER IT MAY CONCERN

This is to certify that the project report title “A study on the effect of celebrity Endorsement on the
brand image of Pepsi in lovely Professional University” carried out by Mr. Pardeep Yadav has been
accomplished under my guidance & supervision as a duly registered MBA student of the Lovely
Professional University, Phagwara. This project is being submitted by him in the partial fulfillment of
the requirements for the award of the Master of Business Administration from Lovely Professional
University.
His dissertation represents his original work and is worthy of consideration for the award
of the degree of Master of Business Administration.

Ms. Malika Rani

Date: 03/05/2010

2
 DECLARATION

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

Pardeep Yadav

(Reg. No:-10810219)

Date: - 03/05/2010

3
 TO WHOM SO EVER IT MAY CONCERN

This is to certify that the project report title “a study on the effect of celebrity Endorsement on the
brand image of Pepsi in lovely Professional University” carried out by Mr. Abhishek Kumar has
been accomplished under my guidance & supervision as a duly registered MBA student of the Lovely
Professional University, Phagwara. This project is being submitted by him in the partial fulfillment of
the requirements for the award of the Master of Business Administration from Lovely Professional
University.
His dissertation represents his original work and is worthy of consideration for the award
of the degree of Master of Business Administration.

Ms. Malika Rani

Date: 03/05/2010

4
 DECLARATION

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

Abhishek Kumar

(Reg. No:- 10804922)

Date: - 03/05/2010

5
 TO WHOM SO EVER IT MAY CONCERN

This is to certify that the project report title “a study on the effect of celebrity Endorsement on the
brand image of Pepsi in lovely Professional University” carried out by Ms. Ruchi Sodhi has been
accomplished under my guidance & supervision as a duly registered MBA student of the Lovely
Professional University, Phagwara. This project is being submitted by him in the partial fulfillment of
the requirements for the award of the Master of Business Administration from Lovely Professional
University.
Her dissertation represents his original work and is worthy of consideration for the award
of the degree of Master of Business Administration.

Ms. Malika Rani

Date: 03/05/2010

6
 DECLARATION

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

Ruchi Sodhi

(Reg. No:- 10804521)

Date: - 03/05/2010

7
 TO WHOM SO EVER IT MAY CONCERN

This is to certify that the project report title “a study on the effect of celebrity Endorsement on the
brand image of Pepsi in lovely Professional University” carried out by Mr. Haziq Mushtaq has been
accomplished under my guidance & supervision as a duly registered MBA student of the Lovely
Professional University, Phagwara. This project is being submitted by him in the partial fulfillment of
the requirements for the award of the Master of Business Administration from Lovely Professional
University.
His dissertation represents his original work and is worthy of consideration for the award
of the degree of Master of Business Administration.

Ms. Malika Rani

Date: 03/05/2010

8
 DECLARATION

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

Haziq Mushtaq

(Reg. No:-10800085)

Date: - 03/05/2010

9
 PREFACE

Without practical training, management education is meaningless so long with the theory; practical training is

provided to management students to expose them to the actual working environment of any organization. Such

project study provides a frame work of knowledge relating to the concepts and practices of the assigned topics

in the organization. The project study is an integral part of the course. In this the student is in the position to

analyze the integral working of an organization with mature eyes and understand the dynamics in a much better

manner. This particular project has been conducted within the premises of Lovely Professional University

(Punjab). The basic purpose was to know the relation between celebrity endorsement and brand image and

celebrity endorsement and its impact on consumer behavior.

10
 ACKNOWLEDGEMENT

We sincerely feel that the credit of this project report could not be narrowed to only one individual as
the whole work is outcome of integrated efforts of all those concerned with it through whose
cooperation and effective guidance we could achieve its completion.

We wish to place our profound indebtness and deep sense of obligation to Miss Malika Thakral,
lecturer Lovely Professional University for providing us with the opportunity to work on such an
interesting topic. We also want to pay our gratitude and sincere thanks to our esteemed Mam for being
supportive during the entire tenure of this project report.

When emotions are involved words fail to mean. Our heart full of sincere gratitude to our parents, who
have supported, encouraged and helped us throughout our lives and academic career.

PARDEEP YADAV

ABHISHEK KUMAR

RUCHI SODHI

HAZIQ MUSHTAQ

11
TABLE OF CONTENTS PAGE NO

 Executive Summary.-----------------------------------------------------------------------------[15]
 History.--------------------------------------------------------------------------------------------[15]
 Introduction.--------------------------------------------------------------------------------------[16]

Classical Conditioning Model.--------------------------------------------------------[17]

Branding & Celebrity Endorsement.---------------------------------------------[18]
Definition of Celebrities.---------------------------------------------------------------[18]

 Need, Scope and Objectives of the study.----------------------------------------------------[19-21]

 Review of literature.-----------------------------------------------------------------------------[22-28]
 Impact Of Celebrity Endorsements On Overall Brand--------------------------------------[29]
 The need for celebrity endorsement------------------------------------------------------------[30]
 The process of celebrity endorsement----------------------------------------------------------[31]
 Celebrity selection--------------------------------------------------------------------------------[31-33]
 Benefits of celebrity endorsements-------------------------------------------------------------[33-34]
 Why Celebrity endorsements fails--------------------------------------------------------------[34-35]

The solutions-------------------------------------------------------------------------------[35]

 Research Methodology.--------------------------------------------------------------------------[37]
 Analysis and interpretation-----------------------------------------------------------------------[39-58]
 Conclusion------------------------------------------------------------------------------------------[57-58]
 References.-----------------------------------------------------------------------------------------[59-60]

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 LIST OF CHARTS

S.N. CHART TITLE PAGE NO.

1. Chart no.1 38

2. Chart no.2 39

3. Chart no.3 40

4. Chart no.4 41

5. Chart no.5 42

6. Chart no.6 43

7. Chart no.7 44

8. Chart no.8 45

9. Chart no.9 46

10 Chart no.10 47

11 Chart no.11 51

12 Chart no.12 54

13 Chart no.13 56

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 LIST OF TABLES

Sr. No. Table Name Page No.

1. Table 1 38

2. Table 2 39

3. Table 3 40

4. Table 4 41

5. Table 5 42

6. Table 6 43

7. Table 7 44

8. Table 8 45

9. Table 9 46

10 Table 10 47

11 Table 11 48

12 Table 12 49

13 Table 13 50

14 Table 14 50

15 Table 15 51

16 Table 16 52

17 Table 17 52

18 Table 18 53

19 Table 19 53

20 Table 20 54

21 Table 21 55

22 Table 22 55

23 Table 23 56

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 EXECUTIVE SUMMARY

India is a country where people love to live in dreams. They worship celebrities. Celebrities which
might be cricket stars like Sachin Tendulkar, Mahinder Singh Dhoni or Film Stars like Shah Rukh
Khan or John Ebrahim They treat them as God. Marketers use this very preposition so as to influence
their target customers may be existing or potential ones. For this they rope in these celebrities and give
them whopping amount of money. They believe that by doing this they can associate their products
with their target customers. This is called celebrity endorsement.

Aristotle said, “Beauty is a greater recommendation than any letter of introduction.” This could
aptly summarize why innumerable products are endorsed by celebrities, with or without
a significant need or benefit from the same. Similarly every product has an image. The consumer tries
to consume a brand which has the maximum fit with his/her own personality/image. The celebrity
endorser fits in between these two interactions, where he tries to bring the image of the product closer
to the expectation of the consumer, by transferring some of the cultural meanings residing in his image
to the product. 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.

HISTORY

Celebrities are involved in endorsing activities since late nineteenth century. 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 Farooq Engineer became the first Indian cricketer to model
for Bryl cream. The Indian cricket team now earns roughly Rs. 100 crore through endorsements. There
was a spurt of advertising, featuring stars like Tabassum (Prestige Pressure Cookers), Jalal Agha (Pan
Parag), Kapil Dev (Palmolive Shaving Cream) and Sunil Gavaskar (Dinesh Suitings).

15
 INTRODUCTION

Everyday consumers are exposed to thousands of voices and images in magazines, newspapers, and on
billboards, websites, radio and television. Every brand attempts to steal at least a fraction of a person’s
time to inform him or her of the amazing and different attributes of the product at hand. The challenge
of the marketer is to find a hook that will hold the subject’s attention. In helping to achieve this, use of
celebrity endorsers is a widely used marketing strategy.

Pepsi too in this regard has always tried to tap the young
segment of India through their promotions. Beginning from
the famous “Ahaa” series of ads to the “Yah Dil Mange
More” to today’s “Youngistan Meri Jann”, Pepsi has
always made ads to attract the youth. They have
always chosen the young stars, may not be established, as a
face of young India. So the main reason of using Dhoni is
same in case of the latest Youngistan Meri Jann ads. Pepsi is
an intelligent brand which attaches itself with fun and
enjoyment. It also shows its daring attitude, mischievous
behaviour and outgoing nature.

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

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

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

16
In this report, we have focused on the impact of celebrity endorsement on brand image and also tried
to find out how celebrity endorsements affect the buying behavior of the customers. “Brand” is the
most valuable asset of any firm.

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

The classical conditioning paradigm can be used to understand the effectiveness of celebrity
endorsement. This is the process through which “a previously neutral stimulus, by being paired with an
unconditioned stimulus, comes to elicit a response very similar to the response originally elicited by
the unconditioned stimulus”. In a marketing context, consumers learn the association between an
endorser (unconditioned stimulus) and a product (conditioned stimulus) through repeated exposure.

17
 BRANDING & CELEBRITY ENDORSEMENT
Today, use of celebrities as part of marketing communication strategy is fairly common
practice for major firms in supporting corporate or brand imagery.

What is a Brand?

A brand is a name, sign, symbol, slogan or anything that is used to identify and distinguish a specific
product, service, or business. Brand is the image of the product in the market. Some people distinguish
the psychological aspect of a brand from the experiential aspect. The experiential aspect consists of the
sum of all points of contact with the brand and is known as the brand experience. The psychological
aspect, sometimes referred to as the brand image, is a symbolic construct created within the minds of
people and consists of all the information and expectations associated with a product or service.

People engaged in branding seek to develop or align the expectations behind the brand experience,
creating the impression that a brand associated with a product or service has certain qualities or
characteristics that make it special or unique. A brand is therefore one of the most valuable elements in
an advertising theme, as it demonstrates what the brand owner is able to offer in the marketplace. The
art of creating and maintaining a brand is called brand management. Orientation of the whole
organization towards its brand is called brand orientation.

DEFINITION OF CELEBRITIES

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

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 NEED AND SCOPE OF THE STUDY

The Need of This Study

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. E.g. Hema Malini for B.J.P., Govinda for Congress, Amitabh Bachchan for S.P.

The need of this study is to have a deeper understanding of the concept of “celebrity endorsement”.
Since we all are from marketing background, we have gone through various concepts relating to
marketing but this was one of the concepts that we had not studied very thoroughly. Hence, when we
were given a chance to undertake a project report we took this as our project so as to get better
acquainted with the same. Also, since in the current scenario the use of celebrity endorsement is
regularly increasing, we wanted to have better understanding of the same.

WHY COMPANIES USE CELEBRITIES - THE CELEBRITY EDGE

 Psychological Factors: Celebrities generally satisfy the 'esteem needs' of an individual. For

example a movie actress is expected to possess a flawless skin and a blemish free face. Her

fans want to know the secret of her beauty, so she becomes a natural endorser for beauty

related products (cosmetics, soaps, powder).

 propping Up Awareness and Trust Levels: Rahul dravid – bob

 To Sachin Tendulkar as brand ambassador gave it the desired facelift and image for the launch

of 'Victor'

 Value for Money:

 To Position their Brand Distinctively: Lux worldwide has positioned itself as the 'soap the

filmstars use'. From Leela Chitnis to Aishwarya Rai, all top actresses have modeled for Lux.

 Celebrity standing for a Single Brand: Think Zakir Hussain and you are reminded of 'Wah

Taj' Taj Mahal tea. Ditto with A. R. Rahman for Airtel.

19
 SCOPE OF THE STUDY

Region Scope

The scope of this study, as far as the area is concerned, is limited to Lovely Professional University
Campus only. Due to time and other resource constraints we have limited our scope of study to this
particular area and hope to focus entirely on this available niche segment.

Topic scope

We have limited the scope of our study to only one brand i.e. Pepsi. Pepsi our the past few years has
spent heavily on celebrity endorsements and this provides us with the opportunity to have a better
understanding of the topic since we will be able to get a lot of secondary data regarding the same
matter of concern.

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 OBJECTIVES

Previous studies in the area of celebrity endorsement have focused on how consumers react to
celebrity endorsement but there is limited research available when it comes to how companies use
celebrity endorsement and how they work to reduce the risks involved in celebrity
endorsement.
Our main concern will be to get the most satisfactory answer to the following question:

 To find the effects of celebrity endorsement on brand image of Pepsi in lovely professional

university.

 To understand the effects of celebrity endorsement on the buying behavior of individuals at

LPU towards Pepsi.

21
 REVIEW OF LITERATURE

Biswas S, Hussain M, O'Donnell K (2009) in their research topic “Celebrity Endorsements in

Advertisements and Consumer Perceptions: A Cross-Cultural Study” say that there is a positive,
although moderate, impact of celebrity endorsements on attention and exposure of consumers.
Implications for marketers as well as suggestions for future research are discussed. The article is of the
view that although there is considerable risk in endorsing celebrities for products and services, the
firms need to analyse the various factors that can reduce such risks and hence increase the likeability
of transfer of leverage of the brand image from the celebrity to the products and services.

Article URL :

http://www.informaworld.com/smpp/content~content=a909857169~db=all~jumptype=rss

__________________________________________________________________________________

Dix S, Pougnet S (2009) in their research article “Bend it like Beckham”: the influence of sports
celebrities on young adult consumers have found that Athlete role model endorsers have a positive
influence on young adults' product switching behaviour, complaint behaviour, positive word-of-mouth
behaviour and brand loyalty. This confirms the assumption that sports celebrities are important
socialisation agents and can have significant impact on purchase intentions and behaviours. This
research provides useful insight into the influence of athlete endorsers on young adults and suggests
athletes have a positive influence on young adults' behavioural intentions in switching products,
generating word-of-mouth and establishing brand loyalty.

Article URL: http://www.emeraldinsight.com/10.1108/17473611011025993

__________________________________________________________________________________

Elberse A (2009) in her article “Risks and rewards of celebrity endorsements” found that sales for
brands in a variety of consumer-product categories jumped an average of 4 percent in the six months
following the start of an endorsement deal, even after controlling for advertising expenditures and
other factors that could be expected to drive up sales. Why does celebrity endorsements work as well
as they do? One obvious explanation is that celebrities help firms to tap into their fan base. They open
new markets. Consider tennis star Maria Sharapova, one of today's most sought-after -- and, as our
research shows, most effective -- endorsers: The mere fact that Sharapova promotes fashion label Cole
Haan may encourage her most devoted fans to visit its shops, allowing Cole Haan to perhaps attract a
younger and more diverse demographic.

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Article URL:
http://www.cnn.com/2009/OPINION/12/16/elberse.athlete.endorsements.tiger.woods/index.html

___________________________________________________________________________________

Goddard L, Wilbur N (2009) in their study “the impact of negative information about a celebrity
spokesperson on consumers' perceptions of the endorsed brand” provide a starting-point for
further research on negative information transference in the celebrity endorsement relationship. It is
crucial that organisations be aware of the risks associated with using celebrities to endorse their stores
and products. Given that these results provide tentative support for the commonly held belief that a
decline in the celebrity's image can impact the image of the brand, it is important that retailers
carefully choose an endorser who currently has a good image and will likely be able to uphold this
image in the future.

Article URL: http://www.emeraldinsight.com/10.1108/09590550910948556

_____________________________________________________________________________________

Mukherjee D (2009) in his research topic “Impact of Celebrity Endorsements on Brand Image” is
of the view that Celebrity endorsement has been established as one of the most popular tools of
advertising in recent time. It has become a trend and perceived as a winning formula for product
marketing and brand building. It is easy to choose a celebrity but it is tough to establish a strong
association between the product and the endorser. While the magnitude of the impact of celebrity
endorsement remains under the purview of gray spectacles, this article is an effort to analyze the
impact of celebrity endorsements on brands. Objective of this article is to examine the relationship
between celebrity endorsements and brands, and the impact of celebrity endorsement on consumer's
buying behaviour as well as how consumer makes brand preferences. Celebrity endorsement is always
a two-edged sword and it has a number of positives - if properly matched it can do wonders for the
company, and if not it may produce a bad image of the company and its brand.

Article URL: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1444814

__________________________________________________________________________________

Strout R (2008) in his case material “Pepsi and Madonna” examines the use of entertainment
personalities in advertising commercial products through the example of Pepsi's use of Madonna. It
illustrates how companies try to tie the success of the artist to their product. The paper demonstrates
the need for clear evaluation of the celebrity endorser, their public image, and if the relationship
between the artist and the product applies to the advertising rules. When Pepsi picked Madonna, the

23
choice turned out to be too hot to handle. The $5 million campaign featuring the extravagant vocalist
had to be scrapped because of its links to Madonna's highly controversial "Like a Prayer" music
video."

Article URL: http://www.bloggingstocks.com/2008/07/21/spokesperson-fiasco-5-madonna-preaches-

to-pepsi/

__________________________________________________________________________________

David H. Silvera, Austad B (2008) in their research topic “Factors predicting the effectiveness of
celebrity endorsement on brand image” have examined whether consumers infer that celebrity
endorsers like the products they endorse, and presents a model using these inferences and other
characteristics of the endorser to predict attitudes toward the endorsed product. Participants in two
experiments examined written endorsement advertisements and were asked to infer the extent to which
the endorser truly liked the advertised product and to rate the endorser's attractiveness, similarity to
themselves, and knowledge of the product. Attitudes toward the advertisement, the endorser and the
product were also measured. The resulting model indicated that product attitudes were predicted by
inferences about the endorser's liking for the product and by attitudes toward the endorser.

Article URL: http://www.emeraldinsight.com/10.1108/03090560410560218.

__________________________________________________________________________________
The authors Kamins A M, (ET all) (2008) have examined celebrity endorsements in advertising using
a two-sided framework, in terms of the internalization and identification processes of social influence.
The two-sided execution was designed to increase a viewer's perception of advertiser credibility by
including a discussion of a limitation of the advertised service. Results show that when compared to a
traditional one-sided celebrity endorsement, the two-sided communication elicited significantly higher
advertising credibility and effectiveness ratings, higher evaluation of the sponsor in terms of perceived
overall quality of service, as well as a significantly greater intention to use the advertised service.
These findings suggest that the use of a celebrity appeal in a two-sided form is an effective advertising
strategy.

Article URL: http://www.jstor.org/pss/4188716

__________________________________________________________________________________
Katyal S (2008) in his article “Impact of Celebrity Endorsement on A Brand Image” talks that
despite the obvious economic advantage of using relatively unknown personalities as endorsers in
advertising campaigns, the choice of celebrities to fulfil that role has become common practice for

24
brands competing in today's cluttered media environment. There are several reasons for such extensive
use of celebrities. Because of their high profile, celebrities may help advertisements stand out from the
surrounding clutter, thus improving their communicative ability. A brief assessment of the current
market situation indicates that celebrity endorsement advertising strategies can, under the right
circumstances, indeed justify the high costs associated with this form of advertising.

Article URL: http://www.chillibreeze.com/articles/Celebrity-endorsement.asp

__________________________________________________________________________________

Daneshvary R, Schwer K (2008) in their research article “The association endorsement and
consumers’ intention to purchase’ have examined the effect of the Professional Rodeo Cowboys
Association’s (PRCA) endorsement of products on consumers’ purchase intentions. Survey data were
collected from 1,456 respondents attending six rodeos across the USA. Binary logit regression
revealed that individuals who attended rodeo frequently and those with less than a college degree were
the most likely to accept the association endorsement. The findings are explained within the social
influence framework.
Article-URL:
http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Article&hdAction=lnkhtml
&contentId=856354
__________________________________________________________________________________

Duncan A (2007) in his research paper “Companies Ditch Celebrity Endorsements” says that
celebrities were too big and the Pepsi brand didn't get the promotion out of the ad campaign that the
stars were getting. Instead, Pepsi's putting the spotlight on its product and replacing the "Joy of Pepsi"
campaign with the endorsement-free "Pepsi. It's the Cola." campaign Many companies are shying
away from big names and dumping celebrity endorsements altogether. Powerful execs say their brand
is overshadowed by the likes of high-profile celebs.

Article URL: http://advertising.about.com/cs/advertising/a/endorsements.htm

__________________________________________________________________________________

25
Zafer B (2007) in his article “Celebrity endorsement: a literature review” indicates that the
effectiveness of celebrity endorsers is moderated by a number of factors, including product-celebrity
alignment and target receiver characteristics. Celebrity endorsement can be effective in distinguishing
a company's products or services from those of its competitors, but research has produced mixed
results regarding the choice of celebrity.

Article URL:

http://www.faqs.org/abstracts/Business/Celebrity-endorsement-a-literature-review-Green-marketing-
multiplier-for-appropriate-technology-tran.html

_________________________________________________________________________________

(Business Review) (2006) titled as “A-list celebrity endorsements are failing to dazzle consumers
“A new survey published by the AccountAbility think tank and the National Consumer Council (NCC)
questioned consumers over their shopping habits and how they judged manufacturers' products and
ethnical responsibility. It concluded that the most trustworthy sources of information were considered
to be packaging, followed by consumer watchdog groups and then personal recommendation from
family and friends. Celebrity product endorsement fared particularly badly - an outcome that
producers and marketers will need to take heed of at a time when their reliance on such methods of
promotion is extremely strong; one-in-four advertisements currently features a celebrity, versus one-in-
eight 10 years ago. In this context, the 'cult of celebrity' is weakening, as consumers begin to seek out
brands that are more closely associated with ideas of corporate responsibility and trust.

Article-URL:-
http://www.foodreview.com/comment/alist_celebrity_endorsements_are_failing_to_dazzle_consumers
_comment
__________________________________________________________________________________

Joshi V (2006) in his article “The Impact of Celebrity Endorsements on Consumer Brand
Preferences” indicates that celebrity endorsement advertising strategy can under the right
circumstances indeed justify the high costs associated with this form of advertising. The use of
celebrity for endorsements create a very favourable impact on the consumer and it creates a connect
which forces a consumer to purchase a product. However, as several failures show, it is essential for
advertisers to be aware of the complex processes underlying celebrity endorsement. Modern day
consumers are well educated and smart, they know celebrities are being paid for these endorsements
and this knowledge makes consumers rather more cynical about the product and celebrity

26
endorsements. Majority of the consuming population also knows what is advertising and how it
actually works and this knowledge of consumer makes the task of celebrity endorsement all the more
difficult and challenging for the advertising companies and the sponsors.

Article URL: http://www.indianmba.com/Faculty_Column/FC706/fc706.html

__________________________________________________________________________________
Erdogan (2005), "Celebrity Endorsement: A Literature Review", Journal of Marketing Research,
15, 291-314) writes that product endorsement is a form of testimonial from someone which indicates
that they like or approve of a product. Commonly, product endorsements are solicited from people
who are socially prominent, allowing companies to advertise their products with statements like as used by
such-and-such an actress, or the official product of company/event X. 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.

_________________________________________________________________________________

Brian D. Till (2005) in his research article “Using celebrity endorsers effectively: lessons from
associative learning” is of the view that the use of celebrity endorsers in advertising is wide-spread –
as much as 20 percent of all advertising use some type of celebrity endorser. Marketers invest
significant dollars in securing the promotional support of well-known individuals. Associative learning
principles are presented as a useful framework for understanding how celebrity endorsers can be used
more effectively. Principles such as repetition, overshadowing, blocking, belongingness, association
set size, and extinction are introduced and linked to specific managerial suggestions for improving the
use of celebrity endorsers.

Article URL:http://www.emeraldinsight.com/10.1108/10610429810237718

__________________________________________________________________________________

Diana S, Bryan A. (2003) in their research paper ”The equity effect of product endorsement by
celebrities” suggest that both endorser image and brand image serve as mediators in the equity-
creation process of celebrity product endorsement. The theoretical perspective adopted in this study is
that celebrity product endorsement is a form of co-branding. This study outlines a conceptual
framework that can be used to organise and guide future research into how celebrity product
endorsement creates equity for both the endorsed product-brand and the endorsing celebrity.

Article URL: http://www.emeraldinsight.com/10.1108/03090560710718148

27
Hsu C, McDonald D (2001) in their research article” An examination on multiple celebrity
endorsers in advertising” say that Celebrity endorsement advertising is a prevailing advertising
technique. Some marketers choose to utilize multiple celebrities to promote their products or brands.
Nevertheless, it is surprising that so little research has focused on this phenomenon. This research
discusses advantages and potential concerns of multi-celebrity endorsement advertising and documents
the actual use of multiple celebrity endorsers in the Pepsi campaign in the USA. Overall, the findings
have been that the Pepsi ads have matched their celebrities’ gender, age and type of cola attributes in
appealing to their female/male, teen/adult consumers. The results support that fit between the endorsed
product and various celebrities is a key factor for using multiple celebrity endorsers in advertising.

Article URL: http://www.emeraldinsight.com/10.1108/10610420210419522

__________________________________________________________________________________

Martin J (2000) in his research paper “Is the athlete’s sport important when picking an athlete
to endorse a non sport product” tells that businesses will spend millions of dollars associating their
products with athletes through product endorsements. Finding the “best” athlete to make the
endorsement is a crucial decision. Several theoretical perspectives suggest that the sport from which
the athlete comes may be an important factor in producing a favourable consumer response. In a study
conducted to investigate the effects of the type of sport on endorsement evaluations, results indicated
that the image of the sport, independent of the athlete, can contribute significantly to the consumer’s
response to an endorsement. The image of the sport can enhance, or detract from, the effects of the
personality and appearance of the athlete making the endorsement. These findings suggest the
managers should consider the sport, as well as the athlete carefully, when picking a product
spokesperson.

Article URL: http://www.emeraldinsight.com/10.1108/07363769610152581

__________________________________________________________________________________

28
 IMPACT OF CELEBRITY ENDORSEMENTS ON OVERALL BRAND

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

Al Ries & Laura Ries

Indian advertising started with the hawkers who used to call out their wares right from the days when
cities and markets first began. Since then, Indian advertising has metamorphosed into a strategic tool
that enhances sales, siphons more profits and helps in the process of brand-building and product
promotion. With this evolved a strategy that tried to benefit from the emotional attachment of the
admirers or the fans of the celebrities; in the form of celebrity endorsement. It does help in creating
instant awareness and visibility; but for a cost.

"Brand" is the most valuable asset of any firm. Any thoughtless adventure can be like the Sword of
Damocles. It's the "strong idea" of promotion which is a more strategic means of brand-building;
which can be an economical alternative over celebrity endorsement.

"It doesn't matter how new an idea is; what matters is how new it becomes."

Elias Canetti

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

David Ogilvy

29
 THE NEED FOR CELEBRITY ENDORSEMENT

The charisma of the celebrities almost always entices people and their words are worshipped by a lot
of people. Their influence also goes on the political front, where they are invited for political
endorsement. 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.

The Elaboration Likelihood Model (EML) suggests that consumers will scrutinize claims more in
important situations (say, life saving drugs) than in unimportant ones. So, for almost similar products
like Coke and Pepsi, it makes sense to use endorsement. Also, Friedman & Friedman have shown that
a celebrity relative to a non-celebrity spokesperson would be more effective for products high in
psychological or social risk, involving such elements as good taste, self-image, and opinion of others.
For example, when actor Shah Rukh Khan endorses Santro-Zip drive; the consumers are made to think
that he is giving his opinion to go for this car.

Two reasons why advertisers need celebrity endorsement are to increase the credibility &
attractiveness of their advertisement. This is solely to affect consumers' attitude towards their brand.
To justify this hypothesis, we can take the example of former Miss Universe Sushmita Sen who helped
the Epson brand of printers achieve instant recognition; even with the established giants like Hewlett-
Packard and Wipro in the running. Similarly, actress Rani Mukherjee has turned the tables for Bata's
ladies footwear brand called Sundrop as sales increased by a whopping 500%.

THE PROCESS OF CELEBRITY ENDORSEMENT

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

The Meaning Transfer Model

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

30
 Figure 1:

The Meaning Transfer Model

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

CELEBRITY SELECTION

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

Stereotyping

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

31
 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 Aishwarya Rai and the Eye donation campaign.
Similarity: For example - a child artist promoting a chocolate brand.

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

THE NO TEARS MODEL

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

celebrity & audience match up,

celebrity & brand match up,

celebrity credibility,

celebrity attractiveness,

cost consideration,

a working ease and difficulty factor,

an endorsement saturation factor,

a likelihood-of-getting-into-trouble factor

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

32
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.

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 catergories: -

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.

33
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 2:

ENDORSEMENT COST-VALUE RELATIONSHIP

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.

WHY CELEBRITY ENDORSEMENT FAILS?

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

34
 THE REASONS

According to leading management thinker, Dr. Seamus Phan, "Many celebrity endorsements fail
because they identify a celebrity they like in an emotive and un-researched manner and then try to
create advertising to force-fit the celebrity into the creative concept." Therefore, the advertisers must
associate the celebrity to the advertisement and not vice versa. Thinking on the similar lines, the
advertisers shouldn't identify the brand to associate with the celebrity but do vice versa. The success of
celebrity endorsement also depends upon the capacity, knowledge, experience, and qualification to talk
about the product. Failure may be attributed to improper positioning (Example: Amitabh Bachchan,
Abhishek Bachchan & Maruti Versa), negative perception after use of product / service (inferior
products), misapprehension of the meaning of the endorsement, etc.

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

William Feather

Another reason for the celebrity endorsement to turn against the brand is due to "Overshadowing".
This happens when the celebrity is larger than the brand being endorsed. And unfortunately, though
the celebrity generates higher levels of attention among viewers, the impression is not always strongly
linked to the advertised brand.

Finally, brand may also fail to get noticed given a recent negative publicity of the celebrity endorser.
Example: Michael Jordan 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.

THE SOLUTIONS

As discussed, celebrity management is very crucial to avoid the brand-celebrity disconnect, and
subsequently, brand failures. Proper market research should be carried out and right positioning
strategies should be in place. If the consumers have questions in their minds regarding the quality or
performance of the product then even God cannot save the brand. There shouldn't be any ambiguity or
confusions when showing the celebrity in the advertisement. The obvious solution to the problem of
overshadowing is to make sure that both the advertisement and the celebrity are focused on the brand
or product. To avoid any bad publicity arising out of celebrity defames, companies may resort to

35
multiple celebrity endorsement. For Example: Pepsi while capitalizing on the popularity of cricket and
films in India used several cricketers and film stars in their ads. So when Azharuddin and Jadeja got
embroiled in the match-fixing controversy, Pepsi severed its association only with these stars, but its
relationship with cricket continued.

36
 RESEARCH METHODOLOGY

Research Design
Our study is descriptive in nature since we are doing a study with already existing information and
want to have further insights into the same by collecting primary data.

Sampling Area: Extent refers to the geographical area where there is a scope of population. The
extent of the study is only the campus area of Lovely Professional University.

Sampling Design: For the selection of the respondents, Convenient Sampling has been used.

Scaling Technique: likert scale has been used while framing the questionnaire.

Sample size: Sample size is the size of sample drawn from the population which is the true
representative of the research. 200 respondents who are studying in Lovely Professional University
have been contacted.

SOURCES OF DATA

 Primary data:
Questionnaire
Personal interview

 Secondary data:
Books
journals
Internet websites

HYPOTHESIS

 HO: Celebrity Endorsements has a positive impact on the brand image of the product.

 HA: Celebrity Endorsements has no impact on the brand image of the product.

 HO: Celebrity endorsement has a positive impact on consumer buying behavior.

 HA: Celebrity endorsement has no impact on the consumer buying behavior.

37
 Q1] ARE YOU AWARE OF THE BRAND PEPSI?

Table 1 showing the % age of people aware about PEPSI

CUMULATIVE
FREQUENCY PERCENT VALID PERCENT PERCENT

Valid YES 200 100.0 100.0 100.0

Chart 1

According to the data collected from the questionnaire, it was found that the brand awareness of PEPSI

was very high and all the respondents contacted said that they knew about the brand PEPSI.

38
 Q 2] HAVE YOU EVER DRINK PEPSI?

Table 2 showing the number of respondents who have drink PEPSI at least
once

VALID CUMULATIVE
FREQUENCY PERCENT PERCENT PERCENT

VALID YES 200 100.0 100.0 100.0

Chart 2

All the respondents contacted said that they have, at least once drank PEPSI in their lives. Hence, the

percentage of people is 100% out of the population that we have taken i.e 200.

39
 Q 3] HOW MUCH YOU ARE CONCERNED ABOUT YOUR CHOICE OF DIFFERENT
BRANDS OF COLD DRINKS?

Table 3 showing the concerned level of respondents regarding various brands

VALID CUMULATIVE
FREQUENCY PERCENT PERCENT PERCENT

HIGHLY CONCERNED 107 53.5 53.5 53.5

SOME-WHAT CONCERNED 51 25.5 25.5 79.0

Valid
NEUTRAL 42 21.0 21.0 100.0

Total 200 100.0 100.0

Chart 3

According to the survey it was found that all most all the respondents were concerned about the choice

of brands and no one gave their response in negative or disagreed with the fact that they don’t give

preference to the type of the brand they are purchasing. This represents the rational attitude and

behavior of the respondents that they try to look in for certain characteristics and features of the

product before purchasing the same.

40
 Q 4] IDENTIFY THE BRAND FROM THE TAGLINE GIVEN?

Table 4 showing the awareness level of respondents regarding various brand tag
lines

CUMULATIVE
FREQUENCY PERCENT VALID PERCENT PERCENT

PEPSI 60 30.0 30.0 30.0

SPRITE 35 17.5 17.5 47.5

THUMS UP 44 22.0 22.0 69.5

VALID
COCA
61 30.5 30.5 100.0
COLA

TOTAL 200 100.0 100.0

Chart 4

The main purpose of posing this question was to know the awareness level of the repondents regarding

the various cola brands available in the market place. The results that we got showed that COCA

COLA and PEPSI were highly recalled from their tag lines while sprite had the least brand recall. This

41
clearly signifies that PEPSI and COCA COLA have been successfully been able to distinguish and

create a positive image of their brands with respect to other brands in the same product category.

Q 5] IDENTIFY THE BRANDS ENDORSED BY THE CELEBRITIES.

Table 5 showing the knowledge level of respondents regarding celebrity

endorsement

CUMULATIVE
FREQUENCY PERCENT VALID PERCENT PERCENT

COCA
64 32.0 32.0 32.0
COLA

THUMS UP 44 22.0 22.0 54.0

VALID PEPSI 61 30.5 30.5 84.5

SPRITE 17 8.5 8.5 93.0

SLICE 14 7.0 7.0 100.0

TOTAL 200 100.0 100.0

Chart 5

Again here the purpose of posing this question was to know the knowledge respondents had regarding
the celebrities endorsing various cola products. The purpose was also to know whether the respondents
were aware of the concept of celebrity endorsement and how much importance they gave to it because
one who is aware of the concept of celebrity endorsement will have effect of the same on his attitude
and buying behavior.
The results that we were able to get showed that celebrities endorsing PEPSI and COCA COLA brands
were highly recalled as compared to SPRITE and THUMS UP. As is clear from the table almost 32 %

42
respondents were able to recognize the celebrities endorsing PEPSI and COCA COLA while 22 % for
THUMS UP, 8% and 7% for SPRITE and SLICE respectively.
Q 6] IMPORTANCE OF PRICE FACTOR WHILE PURCHASING PEPSI.

Table 6 showing the importance of price while purchasing PEPSI

VALID CUMULATIVE
FREQUENCY PERCENT PERCENT PERCENT

HIGHLY
46 23.0 23.0 23.0
UNIMPORTANT

UNIMPORTANT 51 25.5 25.5 48.5

NEUTRAL 63 31.5 31.5 80.0

VALID
IMPORTANT 24 12.0 12.0 92.0

HIGHLY
16 8.0 8.0 100.0
IMPORTANT

TOTAL 200 100.0 100.0

Chart 6

This question was put forward to the respondents so as to know the degree and level of importance

they give to price while purchasing PEPSI and it was found that price was not a major factor in

determining the purchasing of PEPSI. More than 50% of the respondents said that they don’t consider

43
price as a factor when going for the purchase of PEPSI. However, some 20% respondents were of the

view that they do consider price as an essential criteria before purchasing PEPSI.

Q 7] IMPORTANCE OF QUALITY FACTOR WHILE PURCHASING PEPSI

Table 7 showing the importance of quality while purchasing PEPSI

VALID CUMULATIVE
FREQUENCY PERCENT PERCENT PERCENT

HIGHLY
10 5.0 5.0 5.0
UNIMPORTANT

UNIMPORTANT 10 5.0 5.0 10.0

VALID NEUTRAL 60 30.0 30.0 40.0

IMPORTANT 63 31.5 31.5 71.5

HIGHLY IMPORTANT 57 28.5 28.5 100.0

TOTAL 200 100.0 100.0

Chart 7

The next question was regarding the quality factor and the importance individuals give before

purchasing PEPSI. In our study we found that the quality was ranked as one of the most important

factors as is clear from the table too that shows that more than 58% of respondents ranked quality as an

important factor. Comparing the quality factor with price we can say that individals tend to pay higher

44
price or do not pay attention to the price being charged if it is to relate with the quality of the product

being purchased

I IMPORTANCE OF AVAILABILITY FACTOR WHILE PURCHASING PEPSI

Table 8 showing the importance of availability while purchasing PEPSI

VALID CUMULATIVE
FREQUENCY PERCENT PERCENT PERCENT

HIGHLY
18 9.0 9.0 9.0
UNIMPORTANT

UNIMPORTANT 54 27.0 27.0 36.0

NEUTRAL 52 26.0 26.0 62.0

VALID
IMPORTANT 66 33.0 33.0 95.0

HIGHLY
10 5.0 5.0 100.0
IMPORTANT

TOTAL 200 100.0 100.0

Chart 8

Regarding the availability factor we received some mixed response from the respondents. Some 33%

ranked it an important factor while 27% ranked it as unimportant. From these observations we can

conclude that individuals tend to be neutral regarding the availability of PEPSI and can forgo it if not

available. This also refers to the fact that since there are similar substitutes available in the market

45
place hence, individuals at times tend to forgo their favourite drink and can go for other cola drink.

Hence, the availability factor is not considered an important factor as compared to other factors such as

quality and price.

Q 9] IMPORTANCE OF TASTE FACTOR WHILE PURCHASING PEPSI

Table 9 showing the importance of taste while purchasing PEPSI

VALID CUMULATIVE
FREQUENCY PERCENT PERCENT PERCENT

HIGHLY
10 5.0 5.0 5.0
UNIMPORTANT

UNIMPORTANT 10 5.0 5.0 10.0

NEUTRAL 60 30.0 30.0 40.0

VALID
IMPORTANT 63 31.5 31.5 71.5

HIGHLY
57 28.5 28.5 100.0
IMPORTANT

TOTAL 200 100.0 100.0

Chart 9

The taste factor was also ranked as an important factor for the purchase of PEPSI. Again, about 58% of

the respondents were of the view that they do consider the taste factor before purchasing PEPSI. If we

compare the taste and quality factor we see a positive relationship exists between the two. Both these

46
factors got almost the same rankings and measures when doing the survey. Hence, we can say that

price, taste and quality are the factors that individuals do keep in mind before going for the purchase of

PEPSI.

Q 10] IMPORTANCE OF CELEBRITY ENDORSING FACTOR

WHILE PURCHASING PEPSI

Table 10 showing the importance of Celebrity Endorsement while purchasing

PEPSI

PERCEN VALID CUMULATIVE

FREQUENCY T PERCENT PERCENT

HIGHLY
UNIMPORTAN 17 8.5 8.5 8.5
T

UNIMPORTAN
23 11.5 11.5 20.0
T
VALID
NEUTRAL 52 26.0 26.0 46.0

IMPORTANT 61 30.5 30.5 76.5

HIGHLY
47 23.5 23.5 100.0
IMPORTANT

TOTAL 200 100.0 100.0

Chart 10

47
Regarding the importance of celebrities on the purchasing behavior of the consumers, the survey that

we conducted showed that presence of celebrities in advertisements had a positive impact on the

purchasing behavior as most i.e. 50% suggested that presence of celebrities plays an important role in

buying PEPSI. Also 26% gave neutral suggestions regarding the same. However, some 19% were of

the converse opinion i.e. they believed that presence of celebrities does not induce them to buy or

purchase PEPSI.

To conclude the set of questions that followed from 6-A to 6-E, we can say that the most important

factors that individuals keep in mind are quality, taste and presence of celebrities. Quality and taste

factors define the rational behavior and attitude of the respondents while celebrity endorsement

signifies the gratification of the esteem needs of the respondents. Purchasing the products endorsed by

celebrities satisfies the esteem needs of respondents and hence forms an important factor while

purchasing PEPSI.

__________________________________________________________________________________

Q 11] CELEBRITY ENDORSEMENT HELPS IN BUILDING THE BRAND IMAGE OF

PEPSI AS COMPARED TO OTHER MEANS OF PROMOTIONS.

Table 11 showing the impact of celebrity endorsement on brand image

GENDER

MALE FEMALE TOTAL

STRONGLY AGREE 21 22 43
Celebrity endorsement AGREE 33 35 68
helps in building the
NEITHER AGREE
brand image of PEPSI 21 17 38
NOR DISAGREE
as compared to other
means of promotions. DISAGREE 17 12 29

STRONGLY DISAGREE 8 14 22
TOTAL 100 100 200

48
 CHI-SQUARE TESTS

Table 12 showing the Chi-square results for impact of celebrity

endorsement on brand image

ASYMP. SIG. (2-

VALUE DF SIDED)

Pearson Chi-Square 3.002a 4 .558

Likelihood Ratio 3.028 4 .553

Linear-by-Linear Association .028 1 .868

N of Valid Cases 200

According to our study we found that most of the respondents were of the view that including

celebrities in advertisements increases the brand image of the product being endorsed [PEPSI in our

case]. The value of the Chi-Square test that we received on applying the same delivered a value of .558

which indicates that it is more than the standard 0.05 level of significance. Hence, we accept our null

hypothesis which states, “that there is a positive relationship between celebrity endorsement and

brand image” and reject our alternate hypothesis. Hence, we conclude that there exists a positive

relationship between celebrity endorsement and brand image.

49
 Q 12] CELEBRITY ENDORSEMENT ALWAYS HAS THE POSITIVE
EFFECT ON THE BRAND IMAGE OF THE PRODUCT.

Table 13 showing whether celebrity endorsement always has the positive effect
on brand image

GENDER

MALE FEMALE TOTAL

STRONGLY AGREE 12 14 26

Celebrity endorsement AGREE 5 13 18

always has the positive NEITHER AGREE NOR

20 24 44
effect on the brand DISAGREE
image of the product. DISAGREE 40 30 70

STRONGLY DISAGREE 23 19 42

TOTAL 100 100 200

Chi-Square Tests

Table 14 showing the results for, whether celebrity

endorsement always has the positive impact

ASYMP. SIG.
VALUE DF (2-SIDED)

Pearson Chi-Square 5.883a 4 .208

Likelihood Ratio 6.016 4 .198

Linear-by-Linear
2.758 1 .097
Association

N of Valid Cases 200

Although most of the respondents responded negatively to this question but when we applied the Chi-

Square test we found that the value we got varied significantly from the standard (0.05) level of

significance which means that the null hypothesis is accepted and the alternate hypothesis is rejected

Hence, we can say that celebrity endorsement always has positive impact on the brand image.

50
 Q13] MALE CELEBRITIES LEAVE GREATER IMPACT THAN FEMALE
CELEBRITIES WHILE ENDORSING PEPSI.

Table 15 showing the comparison between male and female celebrities and their
respective impact on brand image.

Cumulative
Frequency Percent Valid Percent Percent

STRONGLY AGREE 45 22.5 22.5 22.5

AGREE 48 24.0 24.0 46.5

NEITHER AGREE NOR

41 20.5 20.5 67.0
Valid DISAGREE

DISAGREE 29 14.5 14.5 81.5

STRONGLY DISAGREE 37 18.5 18.5 100.0

Total 200 100.0 100.0

Chart 11

The results that we got when we surveyed about which gender leave greater impact on consumers

revealed that male celebrities advertising for PEPSI leave a greater impact than female ones. This can

be also justified from the fact that the current advertisement featuring Sanjay Dutt and Ranbir Kapoor

for PEPSI are coming on the television sets all over India.

51
 Q 14] YOU BUY PEPSI BECAUSE YOUR FAVOURITE CELEBRITY ENDORSES THE
PRODUCT.

Table 16 showing the results for the reason for buying PEPSI

GENDER

MALE FEMALE TOTAL

STRONGLY AGREE 9 11 20

AGREE 18 28 46
You buy PEPSI because
NEITHER AGREE NOR
your favourite celebrity 31 26 57
DISAGREE
endorses the product.
DISAGREE 31 26 57

STRONGLY DISAGREE 11 9 20

TOTAL 100 100 200

Chi-Square Tests

Table 17 showing the chi square results of the reason for

buying PEPSI

ASYMP. SIG.
VALUE DF (2-SIDED)

Pearson Chi-Square 3.451a 4 .485

Likelihood Ratio 3.470 4 .482

Linear-by-Linear
2.006 1 .157
Association

N of Valid Cases 200

On analyzing the chi square value we found that the value got [.485] differs significantly from the

standard level of significance i.e. 0.05. Hence, we accept the null hypothesis which states that celebrity

endorsement has a positive impact on consumer buying behavior and reject the alternate hypothesis

which states that celebrity endorsement does not have any effect on the consumer buying behavior.

52
 Q 15] YOU WILL SHIFT FROM PEPSI TO ANOTHER BRAND IF YOUR FAVOURITE
CELEBRITY STOPS ENDORSING IT.

Table 18 showing whether respondents will shift from PEPSI to other brand

GENDER

MALE FEMALE TOTAL

STRONGLY AGREE 27 22 49

You will shift from PEPSI AGREE 28 33 61

to another brand if your NEITHER AGREE NOR

25 19 44
favourite celebrity stops DISAGREE
endorsing it.
DISAGREE 15 18 33

STRONGLY DISAGREE 5 8 13

TOTAL 100 100 200

Chi-Square Tests

Table 19 showing the chi square results for shifting

behavior of respondents.

ASYMP. SIG.
VALUE DF (2-SIDED)

Pearson Chi-Square 2.703a 4 .609

Likelihood Ratio 2.714 4 .607

Linear-by-Linear
.668 1 .414
Association
N of Valid Cases 200

Since our null hypothesis regarding the impact of celebrity endorsement on consumer buying behavior
has been accepted, due to the value of chi square test [which =.609] turning out to be more than the
standard level of significance i.e. 0.05. So, as has been also stated by most of the respondents that they
will shift from PEPSI if their favourite celebrity stops endorsing the product, we can state that most of
the respondents will shift from PEPSI to other brand if their favourite celebrity starts endorsing some
other cola brand. This statement is also in line with our null hypothesis which has already being
accepted.

53
 Q 16] PRESENCE OF CELEBRITIES IN PEPSI HAS CHANGED YOUR
PERCEPTION REGARDING THE BRAND.

Table 20 showing the results for the impact of celebrity endorsement on perception of
respondents

VALID CUMULATIVE
FREQUENCY PERCENT PERCENT PERCENT

STRONGLY AGREE 20 10.0 10.1 10.1

AGREE 48 24.0 24.1 34.2

NEITHER AGREE NOR

39 19.5 19.6 53.8
DISAGREE
VALID
DISAGREE 48 24.0 24.1 77.9

STRONGLY
44 22.0 22.1 100.0
DISAGREE

TOTAL 199 99.5 100.0

MISSING SYSTEM 1 .5
TOTAL 200 100.0

Chart 12

When the respondents were asked about whether the presence of celebrities has changed their

perception regarding PEPSI or not, the results obtained showed a mixed response of strong agreement

to strong disagreement.

54
 Q 17] THE RECENT ADVERTISEMENT OF PEPSI HAS INCREASED YOUR CONSUMPTION OF PEPSI.

Table 21 showing the results for the recent impact of advertisement made by
PEPSI

GENDER

MALE FEMALE TOTAL

STRONGLY AGREE 9 11 20

The recent advertisement AGREE 18 28 46

of PEPSI has increased NEITHER AGREE NOR

31 26 57
your consumption of DISAGREE
PEPSI.
DISAGREE 31 26 57

STRONGLY DISAGREE 11 9 20

Total 100 100 200

Chi-Square Tests

Table 22 showing the chi square results for impact of recent

advertisement made by PEPSI

ASYMP. SIG.
VALUE DF (2-SIDED)

Pearson Chi-Square 3.451a 4 .485

Likelihood Ratio 3.470 4 .482

Linear-by-Linear
2.006 1 .157
Association

N of Valid Cases 200

As our null hypothesis regarding the impact of celebrity endorsement on the purchasing behavior of
consumers has already been accepted and that we have rejected the alternate hypothesis we can state
that the resent advertising of PEPSI has increased the consumption level of the respondents. As we can
also check the same from the value which is= .485. Since the value is more than the standard level of
significance 0.05, we can easily conclude that the recent advertisement has increased the consumption
of PEPSI among the respondents.

55
Q 18] You strongly recommend that companies should use celebrities in their
advertisements.

Table 23 showing the results for the recommendation provided by the respondents.

VALID CUMULATIVE
FREQUENCY PERCENT PERCENT PERCENT

STRONGLY AGREE 59 29.5 29.5 29.5

AGREE 45 22.5 22.5 52.0

NEITHER AGREE NOR

59 29.5 29.5 81.5
Valid DISAGREE

DISAGREE 20 10.0 10.0 91.5

STRONGLY DISAGREE 17 8.5 8.5 100.0

Total 200 100.0 100.0

Chart 13

From the data that we collected we were able to know that the respondents strongly believed that

Companies should go for the use of celebrities in their advertisements. The use of celebrities, as has

been proved and observed not only enhances the brand image but also increases the consumption

pattern of the individuals.

56
 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.

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.

57
Companies that succeed in developing such an integrated IMC plans is the one to succeed in the long-
term.

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

- Victor Hugo

58
 BIBLIOGRAPHY

BOOKS REFERED
 Philip Kotler (2008), Marketing Management 12th Ed, New Delhi, Pearson Education, PP34-
42
 Kotler, Philip and Pfoertsch (2006) Waldemar, 12th Ed, New Delhi, Pearson publication, PP
56-66
 Shah .K and D’Souza .A (2009) Advertising and Promotions :An IMC Perspective 11th Ed,
New Delhi ,TMH Publications, PP359-366

Journal:-
 Zafar .B , “Celebrity endorsement: a literature review” (July 2008 ) Journal of Marketing
Management, ICFAI, 27-35

 Erdogan "Celebrity Endorsement: A Literature Review", (1999) Journal of Marketing

Research, 291-314)
 McCracken, Grant (1989), "Who is the Celebrity Endorser?" Journal of Consumer Research,
16 (December), 310-321.

Websites:-
 Mukherjee D, AUG-2008,“Impact of Celebrity Endorsements on Brand Image”
Available at:- http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1444814

 Kamins A M and Michael A.K, Celebrity Endorsements in Advertising, 11th JUN-2006

Economic Times, At www.economictimes.com/11june2006/celebrityendorsement.

 Biswas S, Hussain M, O'Donnell K “Celebrity Endorsements in Advertisements and

Consumer Perceptions: A Cross-Cultural Study” (2009)
,www.chillibreeze.com/articles/Celebrity-endorsement.asp.

 David H. Silvera and Austad B (2007) “Factors predicting the effectiveness of celebrity
endorsement on brand
image”(Aug,2007)www.emeraldinsight.com/10.1108/03090560410560218.

 Katyal S , “Impact of Celebrity Endorsement on A Brand Image”

Jan21,2009,www.chillibreeze.com/articles/Celebrity-endorsement.asp

59
 Daneshvary R, Schwer K “The association endorsement and consumers’ intention to purchase’
(2006),
www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Article&hdAction=lnkht
ml&contentId=856354.

 Elberse.A “Risks and rewards of celebrity endorsements” (2009),

www.cnn.com/2009/OPINION/12/16/elberse.athlete.endorsements.tiger.woods/index.html.

 Elberse.A “Risks and rewards of celebrity endorsements”

(2009),www.cnn.com/2009/OPINION/12/16/elberse.athlete.endorsements.tiger.woods/index.ht
ml

 Joshi V “The Impact of Celebrity Endorsements on Consumer Brand Preferences”

(2008),www.indianmba.com/Faculty Column/FC706/fc706.html

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 QUESTIONNAIRE

Dear Sir/Madam,

We are conducting this survey as a part of our MBA programme from Lovely Professional University.
The purpose of this survey is to study the “Impact of Celebrity Endorsement on brand Image of
PEPSI”. Please spare some time to answer the following questions. Your responses shall be used for
the purpose of research only and shall be kept confidential.

Q 1] Are you aware of the brand PEPSI?

A] Yes B] No

Q 2] Have you ever drink PEPSI?

A] Yes B] No

Q 3] How much you are concerned about your choice of different brands of cold drinks?
A] Highly concerned B] Some-what concerned C] Neutral D] Least
E] None concerned.

Q 4] Identify the brands from the taglines mentioned below?

A] Yeh hai youngistaan meri jaan ___________________________
B] Seedi Baat, No bakwaas, Clear hai ________________________
C] Taste the thunder ______________________________________
D] Thanda Matlab _______________________________________

Q 5] Which soft drink brands do the following celebrities endorse?

A] Aamir Khan ______________________________________
B] Akshay Kumar ____________________________________
C] Ranbir Kapoor ____________________________________
D] Malika Sherawat __________________________________
E] Katrina Kaif _______________________________________

61
Q 6] Which factors are important while you are purchasing PEPSI?
Where 5=highest and 1= lowest and others being the intermediate values
ATTRIBUTES 5 4 3 2 1
Price
Quality
Availability
Taste
Celebrity
endorsing

Q7) Please answer the following questions. Against each statement, 5 alternatives are given, which
you may tick. After reading each statement carefully, please tick the corresponding block as per your
belief. For example, if you strongly disagree with the statement, tick the block ‘1’. If you are
undecided, tick the block ‘3’ and for others, you may tick the block, from ‘5 to 1’ depending on how
you feel about the statement.

INDEX:

1= Strongly Agree 2= Agree 3= Neither Agree Nor Disagree 4= Disagree 5= Strongly Disagree

Sr. 5 4 3 2 1
No
STATEMENT

Celebrity endorsement helps in building the brand image of PEPSI

as compared to other means of promotions.

Celebrity endorsement always has the positive effect on the brand

image of the product.

Male celebrities leave greater impact than female celebrities while

endorsing PEPSI.

You buy PEPSI because your favourite celebrity endorses the

product.

You will shift from PEPSI to another brand if your favourite

celebrity stops endorsing it.

62
 Presence of celebrities in PEPSI has changed your perception
regarding the brand.

The recent advertisement of PEPSI has increased your

consumption of PEPSI.

You strongly recommend that companies should use celebrities in

their advertisements.

Please also provide the following information about yourself:

Name:_____________________________Address:______________________________

Phone/Mobile:_____________________ E-mail_Id: ______________________________

Age: 18-22

22-30

30-36

Thanks for your co-operation.

63