Sandeep's Fine Project On Celebrity Endorsement As A Source of Brand Building

LOVELY PROFESSIONAL UNIVERSITY
DEPARTMENT OF MANAGEMENT
A STUDY ON THE IMPACT OF CELEBRITY ENDORSEMENT ON

BUYING BEHAVIOR
OF CONSUMERS AND AS A SOURCE OF BRAND-BUILDING
Submitted to Lovely Professional University

In partial fulfillment of the requirements for the award of degree of
MASTER OF BUSINESS ADMINISTRATION
Submitted by: Supervisor:

Sandeep Sharma Miss Yogita Sahni
Registration No.2020070484 Designation: Lecturer (LSB)
PHAGWARA
(2009)
TO WHOMSOEVER IT MAY CONCERN
This is to certify that the project report titled” A study on the impact of celebrity
endorsement on buying behavior of people and as a source of brand-building carried
out by Mr. Sandeep Sharma, S/o Sh. Suresh Sharma has been accomplishned 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.
___________________________________
(Name & Signature of the Faculty Advisor)
Title: ______________________________
Dare: ______________________________
Date:
DECLARATION
I, “Sandeep Sharma”, 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.
_______________________
(Student's name & Signature)
_______________________
(Registration No.) 2020070484
Date:__________________
ACKNOWLEDGEMENT
It has been a great pleasure for me to work on this project. My sincere thanks to
Lect. Miss Yogita Sahni for giving me an opportunity to work on this project whereby I
was given an exposure to study the impact of celebrity endorsement as a source of brand-
building and on consumers buying behavior in automobile Industry which helped me to
increase the span of our knowledge and developed my thinking on more practical lines. I
thank her for her guidance and support throughout the time when I was working on this
project. I am also thankful to Mr. Varun Naiyer and Mr. Mandeep Singh Saini under
whose valuable guidance I learnt a lot and which will help me out in the coming days.
I express my sincere thanks to my parents, friends who encouraged me throughout

this project and always with me.
Executive Summary
India is a country where people love to live in dreams. They worship celebrities.
Celebrities may be Cricket stars like Sachin Tendulkar, Mahinder Singh Dhoni or Film
Stars like Salman Khan, 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.
But do this celebrity endorsement acts as a source of brand-building and have impact
over the purchasing behavior of customers in case of automobiles? For this I decided to
conduct this vary research and objectives of my research are:
 To identify the influence of celebrity endorsement on consumer buying behavior.
 To study celebrity endorsement as a source of brand-building.
 To find which type of celebrity persona is more effective.
Lot of researchers has done extensive research work regarding celebrity endorsement, its
influence over customers purchasing decisions. After studying the whole literature related
to celebrity endorsement I found a gap in the study. This gap was whether celebrity
endorsement acts as a source of brand-building. So I decided to undertake research on
this particular aspect.
This research is limited to Jalandhar City only due to various constraints like time
available, scarcity of resources etc. From this we can make an attempt to generalize the
result to the whole universe. After conducting research it was found that brand name and
celebrity endorser are the two key factors that play an important role in affecting
purchase intention. Majority of the people want to see their favorite celebrity endorsing
their brands.
During our research an important factor revealed that mostly people want to see male
celebrities endorsing automobile vehicles rather than female. This fact is also supported
by advertisement of glamour motorbike which have baseline “ Definitely male. This
particular advertisement created hot spaces at Cannas festival. There are large no. of
mediums of persuasion but celebrity endorsement is an effective mode of persuasion.
People love to see sports stars endorsing automobile vehicles than that of bollywood
stars. This particular aspect is mainly supported by the fact that in India where Cricket is
religion and with the success of IPL-1 cricketers like Gautam Gambhir,Ishant Sharma
are able to displace big film stars like Hrithik Roshan for advertisements of Coca-Cola.
Another important fact which came into existence was majority of people follow their
favorite celebrity while making a new purchase everytime.
Beside this one major factor come into existence that mostly respondents were able to
recognized the celebrity used in various advertisement. So in this brand recall test, mostly
positive results were found. One open-ended question was also included about
suggestion. From that it was concluded that mostly people want that instead of spending
huge amount of money onto celebrities company should come out with some schemes so
as to lure their customers. So it can be concluded that for a small extent Celebrity
endorsement acts as a source of brand-building but company should follow integrative
approach so as to build strong brands.Beside celebrity endorsement they should run
certain schemes so as to provide value to the customer and to build strong brand.
Chapter-1
1.1.1Introduction to the subject:
There are large no. of brands available in the market. Some are very familiar and rest are
somewhat. What are the things that distinguish those from rest? It may be brand name,
advertisement, royal heritage and may be celebrity endorser who endorse them. e.g. Raid
and Taylor has the rich heritage of ropping in various cascades of James Bond 007 as
their brand endorser and it has helped them strongly to build there brand. Businesses have
long sought to distract and attract the attention of potential customers that live in a world
of ever-increasing commercial bombardment. Everyday consumers are exposed to
thousands of voices and images in magazines, newspapers, and on billboards, websites,
radio and television. Every brand attempts to steal at least a fraction of an unsuspecting
person's time to inform him or her of the amazing and different attributes of the product
at hand. Because of the constant media saturation that most people experience daily, they
eventually become numb to the standard marketing techniques. The challenge of the
marketer is to find a hook that will hold the subject's attention.
Also from a marketing communications (marcoms) perspective, it is vital that firms

design strategies that help to underpin competitive differential advantage for the firm's
product or services. Accordingly, marcom activities back-up other elements in the
marketing mix such as designing, branding, packaging, pricing, and place The term
Celebrity refers to an individual who is known to the public (actor, sports figure,
entertainer, etc.) for his or her achievements in areas other than that of the product class
endorsed (Friedman and Friedman, 1979). This is true for classic forms of celebrities, like
actors (e.g., Amitabh Bachchan, Shahrukh Khan, Rani Mukherjee Aamir Khan and Pierce
Brosnan), models (e.g., Mallaika Arora, Lisa Ray, Aishwarya Rai, Naomi Campbell,
Gisele Buendchen, etc), sports figures (e.g., Sachin Tendulkar, Zaheer Khan, Sourav
Ganguly, Anna Kournikova, Michael Schumacher, Steve Waugh, etc), entertainers (e.g.,
Cyrus Broacha, Oprah Winfrey, Conan O'Brien), and pop-stars (e.g., Madonna, David
Bowie) - but also for less obvious groups like businessmen (e.g., Donald Trump, Bill
Gates) or politicians.
Celebrities appear in public in different ways. First, they appear in public when fulfilling
their profession, e.g., Vishwanathan Anand, who plays chess in front of an audience.
Furthermore, celebrities appear in public by attending special celebrity events, e.g., award
ceremonies, inaugurations or world premieres of movies. In addition, they are present in
news, fashion magazines, and tabloids, which provide second source information on
events and the 'private life' of celebrities through mass-media channels (e.g., Smriti Irani
being regularly featured in various publications). Last but not least, celebrities act as
spokes-people in advertising to promote products and services, which is referred to
celebrity endorsement.
'Celebrity Endorsement'
McCracken's (1989) definition of a celebrity endorser is, "any individual who enjoys
public recognition and who uses this recognition on behalf of a consumer good by
appearing with it in an advertisement (marcoms), is useful, because when celebrities are
depicted in marcoms, they bring their own culturally related meanings, thereto,
irrespective of the required promotional role."
Friedman and Friedman (1979) found empirical evidence that, in the promotion of
products high in psychological and/or social risk, use of celebrity endorser would lead to
greater believability, a more favorable evaluation of the product and advertisement, and a
significantly more positive purchase intention.
Thus, companies use celebrities to endorse their products, however, there are deeper
attributes that are involved in celebrity endorsement. Celebrities might endorse as a brand
ambassador or a brand face. Some time people have this habit of relating this vary term
of celebrity endorsement with brand face. But this is not so.
Difference Between Brand Ambassador & Brand Face
A Brand Ambassador would be one who is not only a spokesperson for the brand or is
just appearing as a testimonial for the brand's benefits. He/she is an integral part of the
brand persona and helps to build an emotionale, which goes beyond just appearing on TV
commercials
He takes up the cause of a Brand Champion and is associated with every aspect related
with the brand. What is more, there is a significant difference between making just an
endorsement for say, a shampoo or an automobile, and being that brand's alter ego. Both
parties take the latter far more seriously to the deal. So a brand ambassador would be
involved in press releases, he/she would be actively participating in any sales promotion,
sporting the Brand all the while. For example, Fardeen Khan is the brand ambassador for
Provogue while he remains a brand face for Lux Body Wash.
On the other hand, a Brand Face would be the current celebrity who is just used as a tool
to increase brand recall and is only appearing in the advertisement. It is usually seen that
a brand face is a temporary contract and is very short term at times. An example would be
Sona Chandi Chawanpryash using Sourav Ganguly for a while in its commercials. Brand
faces are easily forgotten and fades away with the campaign's end.
The motive behind total branding may be decocted as an attempt to amalgamate diverse
activities to win customer preference. Apropos to this context, the topic “Impact of
celebrity endorsement on overall brand”, is a significant one. The crescendo of
celebrities endorsing brands has been steadily increasing over the past years. Marketers
overtly acknowledge the power of celebrities in influencing consumer-purchasing
decisions. It is a ubiquitously accepted fact that celebrity endorsement can bestow special
attributes upon a product that it may have lacked otherwise. But everything is not hunky-
dory; celebrities are after all mere mortals made of flesh and blood like us. If a celebrity
can aggrandize the merits of a brand, he or she can also exacerbate the image of a brand.
If I may take the liberty of rephrasing Aristotle’s quote on anger, “Any brand can get a
celebrity. That is easy. But getting a celebrity consistent with the right brand, to the right
degree, at the right time, for the right purpose and in the right way... that is not easy.”
Celebrity endorsements are impelled by virtue of the following motives:
 Instant Brand Awareness and Recall.
 Celebrity values define, and refresh the brand image.
 Celebrities add new dimensions to the brand image.
 Instant credibility or aspiration PR coverage.
 Lack of ideas.
 Convincing clients.
Scope of Celebriity Endorsement:
The use of testimonials by advertisers dates back to the 19th century when medicines
were patented. Firms have been juxtaposing their brands and themselves with celebrity
endorsers (e.g., athletes, actors) in the hope that celebrities may boost effectiveness of
their marketing.The increasing number of endorsements throws a valid question to the
consumers. Is there a science behind the choice of these endorsers or is it just by the
popularity measurement? What are the reasons which lead to impact of celebrity
endorsement on brands? The success of a brand through celebrity endorsement is a
cumulative of the following 14 attributes. Greater the score of the below parameters,
greater are the chances of getting close to the desired impact.
Impact Regions of Celebrity Endorsement
While brand marketers with positive experiences would tend to believe that celebrity
endorsements work and some would disagree, but one would be sure that the magnitude
of its impact is difficult to measure even if sales figures are at our disposal. However, we
can understand why it works and the impact regions of celebrity endorsement.
The illustrations below explain the same: -

How Celebrity Endorsements Influence the Consumer
The basis for the effectiveness of celebrity-endorsed advertising can be linked to

Kelman's processes of social influence as discussed by Friedman and Friedman.
According to Kelman, there are three processes of social influence, which result in an
individual adopting the attitude advocated by the communicator:
Compliance, Identification & Internalization
These latter two processes are particularly applicable to celebrity-endorsed advertising.
Compliance infers that another individual or group of individuals influences an

individual cause he or she hopes to achieve a favourable reaction from this other group.
This process of social influence is not directly applicable to celebrity advertising because
there is little, if any, interaction between the celebrity and the consumer.
Identification applies to the situation wherein the individuals emulate the attitudes or
behaviour of another person or group, simply because they aspire to be like that person or
group. This process is the basis for referent power. It was found that celebrities are more
commonly liked than a typical consumer spokesperson.
Internalization as a process of social influence is said to occur when individuals adopt

the attitude or behaviour of another person because that behaviour is viewed as honest
and sincere and is congruent with their value system. The effectiveness of celebrity
advertising traditionally has not been strongly linked to this process, as a celebrity's
reason for promoting a product can just as easily be attributed by the consumer to an
external motive (i.e., payment of fee) as to an internal motive (i.e., the celebrity's true
belief in the value and benefit of the product). An important issue of concern relates to
the development of a strategy for use in Celebrity Advertising, which benefits from the
dramatic impact of dual support of both the identification and internalization processes of
social influence. Celebrities are well-liked, but the techniques that can be used to enhance
their credibility as spokespeople, and therefore, tie-in more closely with the
internalization process needs to be looked into.
Effectiveness of Celebrity Endorsers
A study conducted by Charles Atkin and Martin Block focussed on alcohol advertising
and young audience to examine the impact of celebrity advertising in terms of social
effects of advertising. The sponsoring Company is the underlying source of any
advertising
message, but the individual models depicted in the advertising serve as the more visible
communicator in many cases. The most thoroughly studied source quality is credibility.
Research conducted by social psychologists over the past 30 years demonstrates that a
source perceived as highly credible is more persuasive than a low credibility sender
(Hovland and Weiss, 1951; McGuire, 1969; Hass, 1981).
The sources that companies use to present their advertising message typically attempts to
project a credible image in terms of competence, trustworthiness or dynamism. Celebrity
endorsers are considered to be highly dynamic, with attractive and engaging personal
qualities. Audience may also trust the advice given by some famous person, and in
certain cases, celebrities may even be perceived as competent to discuss the product.
Friedman, Termini and Washington cite a 1975 study showing that celebrities are
featured in 155 of prime-time TV commercials. A later survey reported that this
proportion was up to 20% (Advertising Age, 1978). The most widely used celebrities are
sports figures, actors or other types of entertainers. There are several reasons why a
famous endorser may be influential: -
They attract attention to the advertisement in the cluttered stream of messages
They are perceived as being more entertaining
They are seen as trustworthy because of apparent lack of self-interest.
The final element is due to the wide-spread attribution that major stars do not really
work for the endorsement fee, but are motivated by genuine affection for the product
(Kamen et al, 1975).
Despite the use of famous endorsers, there is little published evidence regarding
effectiveness. In one experiment, an advertisement for a fictitious brand of Sangria wine
featured an endorsement attributed to either a celebrity (actor - Al Pacino), a professional
expert, the Company President, a typical consumer and no source (Friedman, Termini
and Washington, 1977). College students read the ad and gave the ad 0-10 scales of
believability, probable taste, and intent to purchase. Across these three measures, the
celebrity condition produced the highest scores.
While the 'no-source' control group had a purchase intention rating of 2.7, the subjects
exposed to the actor scored 3.9. Believability was rated 2.8 by control subjects versus 4.1
by those seeing the celebrity endorsement. For taste, the baselines of 4.0 compares to the
celebrity group score of 5.6. None of the other three endorsers were as influential as the
celebrated person
Brand Image Formation & Brand Preference
Having a congruent image between the brand and celebrity does not guarantee any
positive effect on consumers' brand preferences. The fundamental question is - what a
brand image really does to consumers? Baran and Blasko explained, "Since most
products aren't special, most advertising does all that so-called image stuff... There's no
information about the product, there's only information about the kind of people who
might be inclined to use the product." (p.13). This view is echoed by Feldwick (1991)
who has suggested that the subjective experience of using a brand can be different from
the subjective experience of using an identical product without the brand reassurance. In
the case of using celebrity advertising to build brand image, the effects are examined with
a social psychological framework.
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: -
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 to cynicism about celebrity endorsements.
Automobile marketing in India:
The competitive nature of the automobile industry has prompted the companies to take up
new and innovative marketing strategies to thwart the competition. The B segment of cars
is the segment which sees maximum competition as the consumer has a number of
models to choose from and it's the volumes which drive the margins.
All the companies as a part of their marketing strategy offers a range of vehicles in all the
segment to make sure that the customer is driving one of their vehicles only.
Advertisements on the Audio visual medium are a rage as it gives the car makers an
opportunity to flaunt their cars. Flashy cars can be demonstrated on television but when it
comes to the finer prints of the cars, print and online media comes to the rescue.
The online medium offers a greater flexibility to the car companies since they come with
a lot of interactive features like demonstrating the interiors of the car with its salient
features. The print medium on the other hand provides an opportunity to the car makers
to explain the function of a car in detail.
Celebrity endorsements and testimonial advertisements have come a long way and they
are also doing their bit to sell the cars. Super star Shahrukh Khan has been associated
with Hyundai Motor Company for a long time and he comes regularly on television to
promote the Santro car. Similarly Ford has roped in Junior Bachan for the promotion of
the latest offering from the company Ford Fiesta. On a similar note Saif Ali Khan and
Rani Mukherjee is shown chasing each other with a Chevrolet aveo.
Aamir Khan who is considered to be one of the most talented actors in the industry is
frequently seen changing roles on screen to promote the Toyota Innova, a car which is
generations ahead of its predecessor Toyota Qualis.
Cricketers haven't been left behind in the race of promoting cars; Fiat Palio had received
a great thrust when the promotion of the car was taken up by the batting maestro Sachin
Tendulkar.In addition to the publicity and advertisement which is done by the companies
there are certain innovative strategies which are taken up by the companies to beat the
competition from time to time.
1.1.2Evolution of subject:
The celebrities get huge amount of money to endorse the product which actually creats
recall-value for the product like
Coca Cola - Aamir Khan
Tag – Heuer – Shahrukh Khan
Cadbury chocolate – Amitabh Bachan
The adding up of any celebrity with any brand may not always increase the sales volume
but if somehow the image of the product damaged, celebrity endorsing helps in
recovering the image. Like when Cadbury India’s reputation as a safe chocolate was
almost gone due to the worm controversy, they used Amitabh Bachan in a commercial
assuring the audience about the quality of the Cadbury. Similarly when Pepsi & Coke
was infected by the Pesticides controversy, Pepsi used both SRK & Sachin Tendulkar for
damage control & coke used Aamir Khan for image recovery.
Not all products go with the image of all celebrity. It depends on the matching of
attributes between the product & the celebrity. In the age of Sunil Gavaskar & Kapil
Dev, Gavaskar’s attributes matched with the products which were being used by the
higher society people & Kapil dev’s attributes matched with products that were for
common man. This means Gavaskar was much trustworthy for the advertisement of pen
& cans and Kapil Dev had gone for shaving cream & bicycles. Kapil’s advertisement of
Palmolive Ka Jawab nahi in a slightly hariyanvi style is still a legend among the Indian
advertisements. Sachin Tendulkar is the first celebrity in India whose mass appeal is so
high that he can endorse product for any section of the society. The filmstars before year
2000 has limited endorsement and didn’t explore the advertising market of India but post
2000 the scenario has changed.Amitabh Bachan after KBC got huge popularity among
the masses & his popularity is being used by various products from Reid & Taylor to
Parker. But during his hay day as a superstar in the ‘80s, he never endorsed anything.
Another success story is SRK who is currently endorsing more than 35 products & earned
more money from endorsement than his last 2 super hit films Chak DE INDIA & OSO.
The cricketers are also not in the backyard. After wining the T-20 World Cup Indian
cricket players also got few numbers of endorsements Dhoni, Yuvraj & Zaheer Khan
grabbed few endorsements but in terms of numbers they are much less than the actors.
With the change in strategy of PepsiCo India to promote their ‘Youngistaan’ campaign
they didn’t renew their contract with players like Sachin and Sourav. Instead they have
taken rising actors like Ranbir Kapoor and Deepika Padukone to promote their product.
This incident also indicates that the cricketers are loosing their endorsed products to the
filmstars. One exception is Sania mirza, in spite of all controversies, off-form and
injuries she is able to survive in the advertisement world.
Apart from Big B, SRK and Aamir Khan some other stars also make their own mark in
the endorsement market like Hrithik Roshan, Saif Ali Khan, Kareena Kapoor, Priyanka
Chopra and Katrina Kaif.
The problem in the endorsement market is that here glamour plays a big role. That is why
Abhinav Bindra, the only Indian to win a Gold Medal in the Olympics gets only Samsung
as the only product to endorse whereas filmstars gets offers from various companies to
endorse their products.
Brand V/s Celebrity
Sometimes the celebrity is more highlighted than the products, making no recall value of
the product. When Rahul Dravid advertised for Castrol, the brand gets overshadowed by
the celebrity & that is also a wrong choice of celebrity. Dravid is never famous for racing
& when he promotes the product, if gives a wrong signal to the customers. The product
can use Narain Karthikeyan to endorse it which will give some reliability to the product.
Some success story

Cadbury India used Amitah Bachan not only to recover their image from worm
controversy but also to establish itself as the leading company in the Indian chocolate
market.
Aamir Khan’s ad campaign ‘Thanda Matlab Cocacola’ was also a huge hit. Not only that
the company uses the superstars to come out from the pesticides controversy.
Dabur brings in Amitabh Bachan in the stagnant chawanprash market which brings in
boost in market and helps Dabur to remain the market leader.
The Lux Story
The Lux Soap in its 75 yrs journey as a product always used a Film Celebrity to promote
the product with the most catchy lines ‘Lux meri Khubsurti Ka raaj’. They used a huge
number of celebrities from the beginning to promote their product & in their 75 years
celebration advertisement campaign; they used SRK as the main endorser who has said
the famous ‘Lux mera Khubsurti ka raaj’ along with Hema Malini, Sridevi & Kareena
Kapoor. That is the first time a male celebrity endorsed a female product in India.
Some Controversies
When SRK promoted Emami’s Fair & Handsome cream. It was highly criticized as
saying that if a star with SRK’s stature promote whiteness cream then actually we are
advocating for racism saying black is bad & white is gold. And how SRK could can
endorse such products as there will be a huge impact among the masses regarding the
skin colors. A person must be judged by his/her qualities & not by his/her skin color.
But what we basically forgot that stars get money to endorse products & we shouldn’t
eye washed by the advertisement & there is no point in criticizing a celebrity for
endorsing product like Fair & Handsome.
Shilpa Shetty & Romanov Vodka.
Shilpa Shetty also hardly criticized for promoting alcohol. As being a celebrity she must
be a responsible citizen & a responsible citizen should never promote alcohol.
Celebrity branding is all right as long as the celebrity conducts himself in a good manner
but if something wrong happens it will affect the image of
the product also. When Salman Khan got warrant for killing endangered dear ‘Thumbs
Up’ has no option but to replace him.
So the product and the celebrity remain good as long as both of them remain individually
good. The main problem of celebrity branding is that when a particular product is known
to the common people with the effect of the celebrity, it is very difficult to separate the
product from the star. Like Coca-Cola - Aamir Khan, Cadbury- Amitabh Bachan,
Santro-SRK. Now, if any one of the company want to change their endorser they have to
redesign the product to let out their product from the shadow of the old campaign. In case
of celebrity marketing another problem also arise, that no separate brand value grows up
for the product unless and until the product is extraordinary. The product is known in the
name of the celebrity. Sometimes if the attributes of the celebrity doesn’t matches with
the product, it also gives a negative attribute to the product endorsed. Like in a Survey
study it is found that people locates Amitabh Bachan with Asian Paints the most but in
reality Amitabh endorsed Nerolac paints and Nerolac’s biggest competitor is Asian
paints. So there are certain positive as well as negative points in celebrity branding in
India. As a producer of the product the company always wants to minimize the negative
sides of the celebrity endorsement and maximize the positive impact of the celebrity
endorsement.
This clearly raises a question what impact celebrity endorsement have on people in case
of automobiles and whether it acts as a source of brand-building?
1.2.1 Objectives of study:
The objectives of the study are as follows:
 To identify the influence of celebrity endorsement on consumer buying behavior.
 To study celebrity endorsement as a source of brand-building.
 To find which type of celebrity persona is more effective.

1.2.2 Need of the study:
After going through various sources like magazines, newspapers, websites I found that lot
of research work has undertaken by researcher regarding impact of celebrity
endorsement. But there was a gap in the research regarding whether celebrity
endorsement act as a source of brand-building. So there is a need to discover this fact. So
I decided to work on this particular aspect.
1.2.3 Scope of the study:
As due to time constraint it is very difficult to cover the entire sectors so I decided to
cover automobile sector. I am covering automobile sector as whole and not concentrating
on any particular category. The study is limited to Jalandhar City only.
1.2.4 Research Methodology:
Research Design:
A research design is an arrangement of conditions for collection and analysis of Data in a
manner that aims to combine relevance to the research purpose with Economy in
procedure. It constitutes the blueprint for collection, measurement and analysis of data.
My research design will be exploratory research design.
Data Sources:
In dealing with any real life problem it is often found that data at hand are inadequate,
and hence, it becomes necessary to collect data that are appropriate. The researcher can
collect data either through primary source or secondary source.
a) Primary data: These are those data which are collected afresh and for the first
time, and thus happen to be original in character. I will be using the structured
questioners.
b) Secondary data: These are those which have already been collected by someone
else and which have already been passed through the statistical process. I will
collect it from the sources like internet, published data etc.
Population of the study
Youth (Male) of Jalandhar will be included in population.
Sampling Size:
It is the total number of respondents targeted for collecting the data for the research.
Sample size of 100 persons will be taken for this research.
Sampling Technique:
Random sampling technique will be used in this research project.
Sampling Frame:
Frame is the list of respondents.
DATA PROCESSING
Daily data will be entered into MS-Excel sheets. After the exhaustion of the specified
geographical area this data will be analyzed using simple graphical and tabulation
techniques. The data sheets mentioned here will be attached in the annexure of the
report.
Analytical Tools
After collection of data another work necessary for any data collector is to correctly
analysis that data. So statistical tolls helps us to correctly analysis the data .As I will
using here the software named SPSS for analysis of the data XLSTAT. I will use
following statistical tools:
Hypothesis Testing
Chi-square test will be used when the set of observed frequencies obtained after
experimentation have to be supported by hypothesis or theory. The test is known as X2-
test of goodness of fit and is used to test if the deviation between observation
(experiment) and theory may be attributed to chance (fluctuations of sampling).χ2 also
enables us to explain whether or not two attributes are associated or related to each other.
To test the goodness of fit : It helps to test goodness of fit by using null and alternate
hypothesis.
STATISTICAL TOOLS TO BE USED
1. Chi –Square Test
Procedure:
(1) Set up the null hypothesis that there is no significant difference
between the observed and expected value.
(2) We compute the value of CHI- square by using the formula
CHI-square = ∑ χ2=Σ (( Oi- Ei)2/Ei)
O- Observed value
E- Expected value
Degree of freedoms=(R-1)(C-1)
Level of significance=5
Chapter-2
2.1 History of Automobile Industry:
The automobile as we know it was not invented in a single day by a single inventor. The
history of the automobile reflects an evolution that took place worldwide. It is estimated
that over 100,000 patents created the modern automobile. However, we can point to the
many firsts that occurred along the way. Starting with the first theoretical plans for a
motor vehicle that had been drawn up by both Leonardo da Vinci and Isaac Newton.
In 1769, the very first self-propelled road vehicle was a military tractor invented by
French engineer and mechanic, Nicolas Joseph Cugnot (1725 - 1804). Cugnot used a
steam engine to power his vehicle, built under his instructions at the Paris Arsenal by
mechanic Brezin. It was used by the French Army to haul artillery at a whopping speed
of 2 1/2 mph on only three wheels. The vehicle had to stop every ten to fifteen minutes to
build up steam power. The steam engine and boiler were separate from the rest of the
vehicle and placed in the front (see engraving above). The following year (1770), Cugnot
built a steam-powered tricycle that carried four passengers.
In 1771, Cugnot drove one of his road vehicles into a stone wall, making Cugnot
the first person to get into a motor vehicle accident. This was the beginning of bad luck
for the inventor. After one of Cugnot's patrons died and the other was exiled, the money
for Cugnot's road vehicle experiments ended.
Steam engines powered cars by burning fuel that heated water in a boiler, creating
steam that expanded and pushed pistons that turned the crankshaft, which then turned the
wheels. During the early history of self-propelled vehicles - both road and railroad
vehicles were being developed with steam engines. (Cugnot also designed two steam
locomotives with engines that never worked well.) Steam engines added so much weight
to a vehicle that they proved a poor design for road vehicles; however, steam engines
were very successfully used in locomotives. Historians, who accept that early steam-
powered road vehicles were automobiles, feel that Nicolas Cugnot was the inventor of
the first automobile.
The automotive industry has certain trends it has to follow, just like fashion
designers and musical composers. In times of recession and decreasing sales there is less
room to take chances and manufacturers are prone to follow the common pattern as a
safer bet rather than releasing a controversial product or idea that might or might not be
successful. However throughout the automotive industry's history, great innovators have
"boldly gone where no man has gone before" to set new trends which have dynamically
altered the industry as a whole.
1880's & early 1900's
 About hundred years ago

-The first motor car was imported
-Import duty on vehicles was introduced.
-Indian Great Royal Road (Predecessor of the Grand Trunk Road) was conceived.
 First car brought in India by a princely ruler in 1898.
 Simpson & Co established in 1840.
-They were the first to build a steam car and a steam bus, to attempt motor car
manufacture, to build and operate petrol driven passenger service and to import
American Chassis in India.
 Railways first came to India in 1850's
 In 1865 Col. Rookes Crompton introduced public transport wagons strapped to
and pulled by imported steam road rollers called streamers. The maximum speed
of these buses was 33 kms/hr.
 From 1888 Motors Spirit attracted a substantial import duty.
 In 1919 at the end of the war, a large number of military vehicles came on the
roads.
 In 1928 assembly of CKD Trucks and Cars was started by the wholly owned
Indian subsidiary of American General Motors in Bombay and in 1930-31 by
Canadian Ford Motors in Madras, Bombay and Calcutta In 1935 the proposals of
Sir M Visvesvaraya to set up an Automobile Industry were disallowed.
 1942 Hindustan Motors Ltd incorporated and their first vehicle was made in 1950.
 In 1944 Premier Automobiles Ltd incorporated and in 1947 their first vehicle was
produced.
 In 1947 the Government of Bombay accepted a scheme of Bajaj Auto to replace
the cycle rickshaw by the auto and assembly started in a couple of years under a
license from Piaggio. Manufacturing Programme for the auto and scooter was
submitted in 1953 to the Tariff Commission and approved by the Government in
1959.
 In 1953 the Government decreed that only firms having a manufacturing
programme should be allowed to operate and mere assemblers of imported CKD
units be asked to terminate operations in three years.
 Only seven firms namely Hindustan Motors Limited, Automobile Products of
India Limited, Ashok Leyland Limited, Standard Motors Products of India
Limited., Premier Automobiles Limited, Mahindra & Mahindra and TELCO
received approval. M&M was manufacturing jeeps. Few more companies came
up later.
 Government continued with its protectionism policies towards the industry.
 In 1956, Bajaj Tempo Ltd entered the Indian market with a programme of
manufacturing Commercial Vehicles, and Simpson for making engines.
1960's
 In sixties 2 and 3 Wheeler segment established a foothold in the industry.

 Escorts and Ideal Jawa entered the field in the beginning of sixties.
 Association of Indian Automobile Manufacturers formally established in 1960.
 Standard Motors Products of India Ltd. moved over to the manufacture of Light
Commercial Vehicles in 1965.
1970's
 Major factors affecting the industry's structure were the implementation of MRTP
Act, FERA and Oil Shocks of 1973 and 1979.
 During this decade there was not much change in the four wheeler industry except
the entry of Sipani Automobiles in the small car market.
 Oil Shock of 1973 quickened the process of dieselization of the Commercial
Vehicle segment.
 Three other companies, namely, Kirloskar Ghatge Patil Auto Ltd, Indian
Automotive Ltd and Sen & Pandit Engg products Ltd entered the market during
1971-75. They ultimately withdrew in early eighties.
 During the seventies the economy was in bad shape. This and many specific
problems affected the Automobile Industry adversely.
1980's - The period of liberalized policy and intense competition
 First phase of liberalisation announced.

 Unfair practices of monopoly, oligopoly etc slowly disappeared.
 Liberalisation of the protectionism policies of the Government.
 Lots of new Foreign Collaborations came up in the eighties. Many companies
went in for Japanese collaborations.
 Hindustan Motors Ltd. in collaboration with Isuzu of Japan introduced the Isuzu
truck in early eighties.
 ALL entered into collaboration with Leyland Vehicles Ltd. for development of
integral buses and with Hino Motors of Japan for the manufacture of W Series of
Engines.
 TELCO after the expiry of its contract with Daimler Benz, indigenously improved
the same Benz model and introduced it in the market.
 Government approved four new firms in the LCV market, namely, DCM, Eicher,
Swaraj and Allwyn. They had collaborations with Japanese companies namely,
Toyota, Mitsubishi, Mazda and Nissan respectively.
 In 1983 Maruti Udyog Ltd was started in collaboration with Suzuki, a Japanese
firm.
 Other three Car manufacturers namely, Hindustan Motors Ltd., Premier
Automobiles Ltd., Standard Motor Production of India Ltd. also introduced new
models in the market.
 At the time there were five Passenger Car manufacturers in India - Maruti Udyog
Ltd., Hindustan Motors Ltd., Premier Automobiles Ltd., Standard Motor
Production of India Ltd. and Sipani Automobiles.
 Ashok Leyland Ltd. and TELCO were strong players in the Commercial Vehicles
sector.
 In 1983-84 Bajaj Tempo Ltd. entered into a collaboration with Daimler-Benz of
Germany for manufacture of LCVs.
 Important policy changes like relaxation in MRTP and FERA, delicensing of
some ancillary products, broad banding of the products, modifications in licensing
policy, concessions to private sector (both Indian and Foreign) and foreign
collaboration policy etc. resulted in higher growth / better performance of the
industry than in the earlier decades.
1990's
 Mass Emission Norms were introduced for in 1991 for Petrol Vehicles and in
1992 for Diesel Vehicles.
 In 1991 new Industrial Policy was announced. It was the death of the License Raj
and the Automobile Industry was allowed to expand.
 Further tightening of Emission norms was done in 1996.

 In 1997 National Highway Policy has been announced which will have a positive
impact on the Automobile Industry.
 The Indian Automobile market in general and Passenger Cars in particular have
witnessed liberalisation. Many multinationals like Daewoo, Peugeot, General
Motors, Mercedes-Benz, Honda, Hyundai, Toyota, Volvo and Fiat entered the
market.
 Various companies are coming up with state-of-art models of vehicles.
 TELCO has diversified in Passenger Car segment with Indica.
Despite the adverse trend in the growth of the industry, it is resolutely trying to
meet the challenges. Various issues of critical importance to the industry are being
dealt with forcefully.
2.1.1 Growth and Landmarks of automobile industry in India :
The automobile industry, one of the core sectors, has undergone metamorphosis with the
advent of new business and manufacturing practices in the light of liberalization and
globalization. The sector seems to be optimistic of posting strong sales in the next couple
of years in view of a reasonable surge in demand.
The Indian automobile market is gearing towards having international standards to meet
the needs of the global automobile giants and become a global hub. Players are
strategizing to consolidate their position and gradually increase market penetration with
the launch of new models, targeting different segments. Since the sector is price driven,
huge investment is envisaged to remain competitive through cost advantage, for which
indigenization is highly important. The product becomes dearer if it is manufactured
using imported parts. IT in the automobile sector plays a crucial role.. Some players are
working towards development of efficient production systems that control the entire
production process with high precision and accuracy. Such systems working on real time
operating systems allow efficient control of different parts of manufacturing and
production. It is essential to leverage skills of different engineering disciplines to build
these kinds of integrated systems.
Analysts foresee high scope in the electronics for auto sector and expect the retailing of
such electronics products to contribute a major chunk of future revenues. The
government is increasing the research and development (R&D) fund for the automobile
industry over and above the Rs 1400 crores earmarked for eight years. All laboratories in
the country researching on automobile technology, such as BHEL which is developing
cell technology as alternative fuel, have also been brought together through the setting up
of a national R & D working group. The group is working out a plan to link all major
laboratories across the country to give a thrust to automotive research.
Indian automobile sector being a driver of product and process technologies, and has
become a excellent manufacturing base for global players, because of its high machine
tool capabilities, extremely capable component industry, most of the raw material locally
produced, low cost manufacturing base and highly skilled manpower Not only a large
number of world manufacturers have set up production bases in India but also a large
number of foreign companies are collaborating with the auto component suppliers and
vendors.
Indian Automobile Components Industry has been making rapid strides towards
achievement of world-class Quality Systems by imbibing ISO 9000/QS 9000 Quality
Systems whereby the Indian Automotive industry has become more competitive in the
export market due to its technological and quality advances, so much so that in quality
conscious markets such as Europe and America, it is emerging as a major player, based
on its performance. India today exports: Engine and engine parts, electrical parts, drive
transmission & steering pats, suspension & braking parts among others.
The sector is striding inroads into the rural middle class after its inroads into the urban
markets and rural rich. It is trying to bring in varying products to suit requirements of
different class segments of customers.
States like Rajasthan, Uttar Pradesh, Maharashtra, Andhra Pradesh and West Bengal are
vying to woo global players with proposals including heavy tax exemptions and to create
a more investor friendly regime, each state is proposing to provide all regulatory
clearances at express speed.
The Government should promote Research & Development in automotive
industry by strengthening the efforts of industry in this direction by providing suitable
fiscal and financial incentives.
The current policy allows Weighted Tax Deduction under I.T. Act, 1961 for
sponsored research and in-house R&D expenditure. This will be improved further for
research and development activities of vehicle and component manufacturers from the
current level of 125%.
In addition, Vehicle manufacturers will also be considered for a rebate on the
applicable excise duty for every 1% of the gross turnover of the company expended
during the year on Research and Development carried either in-house under a distinct
dedicated entity, faculty or division within the company assessed as competent and
qualified for the purpose or in any other R&D institution in the country. This would
include R & D leading to adoption of low emission technologies and energy saving
devices.
Government will encourage setting up of independent auto design firms by providing
them tax breaks, concessional duty on plant/equipment imports and granting automatic
approvalAllocations to automotive cess fund created for R&D of automotive industry
shall be increased and the scope of activities covered under it enlarged.
2.1.2 Sturcture of Indian automobile sector and some facts:
Structure:
 The Indian automobile industry can be broadly classified into:
 2 /3 Wheelers
 Passenger Cars
 Commercial Vehicles (LCV/HCV/MCV)
 UV (Utility vehicles)
 Tractors
 The models in the car market can be fitted to different segments as given below:
Category Models
 Economy segment (upto Rs  Maruti Omni, Maruti 800 etc.
0.25mn)
 Mid-size segment (Rs 0.25-0.45  Fiat Uno, Hyundai Santro, tata
mn) Indica, Maruti Alto etc.
 Luxury car segment (Rs 0.45- 1mn)  Tata Indigo, Honda City,
Mitsibushi Lancer, Ford Ikon, Opel
Astra, Hyundai Accent & others
 Super luxury segment (above Rs  Mercedes Benz & other imported
1mn) models
 The economy segment has a very large foothold over the Indian automobile
market as compared to the mid-size and luxury segment.
 Segment  Market Share (%)

 Economy  90.2
 Mid-size and luxury  9.8
 Source: SIAM/ Auto Car India
Increased urbanisation, low pricing policies, improvement in products and technology

have fuelled demand for 4-wheelers. The markets are clearly segmented between
economy models and premium models. The easy availability of finance and increased
levels of disposable incomes has led to higher demand for premium models. Rural areas
have also become an exciting market to cater to.
The growth of the economy has also resulted in a shift in consumer preferences in each of
the segment. Gradual shift can be seen in buyers from mopeds to economy scooters, from
economy scooters to premium and from premium to motorcycles.
 Figure -Structure of Passenger Vehicle Market (India)


 The passenger car segment has seen rapid growth on the back of rise in disposable
income, increased availability of consumer finance, and reduction in excise and
customs duties. Post-1991, this segment has seen maximum foreign investment.
There is a clear segmentation of passenger cars based on price and size. While the
lower and medium range cars (Maruti, Ford, Cielo) have been moderately
successful, luxury cars such as Mercedes have found the going tough.
 The CV segment is directly linked to industrial production and foreign trade and
is therefore subject to cyclical fluctuations of the economy. The demand for CVs
is related to growth in movement of goods transported and freight rate levels, both
of which are linked to level of production.
 Demand for utility vehicles and tractors come from rural India. These vehicles
have witnessed steady demand growth over the past few years due to successive
monsoons, better procurement prices, improved irrigation facilities, and
availability of finance.
 A strong in-house R&D capability allows a manufacturer to develop and
introduce products at lower prices, thus saving costs of importing technology.
However, Indian companies spend very little on R&D.
 Availability of quality components is another factor that determines smooth
production without bottlenecks. High rejection rate of auto components has
prompted several global majors like Ford, to get their international suppliers
2.1.3 The Landmark of Indian automobile sector:
1928- The first imported car was seen on Indian roads
1942- Hindustan Motors incorporated
1944- Premier automobiles started
1948- First car manufactured in India

1953- The Government of India decreed that only those firms which have a
manufacturing program should be allowed to operate
1955- Only seven firms, namely, Hindustan Motors Limited, Automobile Products of
India Limited, Ashok Leyland Limited, Standard Motors Products of India
Limited. Premier Automobiles Limited, Mahindra & Mahindra and TELCO
received approval.
1960 - 1970 - The two, three wheeler industries established a foothold in the Indian
scenario.
1970 - 1980 - Not much change was witnessed during this period. The major factors
affecting the industry were the implementation of the MRTP Act (Monopolies
and Restrictive Trade Practices Act), FERA (Foreign Exchange Regulation Act)
and the Oil Shock of 1973 and 1979.
1980 - 1990 - The first phase of liberalization was announced by the Govt. -With the
liberalization of the Government's protectionist policies, the advantages hitherto
enjoyed by the Indian car manufacturers like monopoly, oligopoly, slowly began
to disappear.
1991 - Under the Govt.'s new National Industrial Policy, the license raj was dispensed
with, and the automobile industries were allowed to expand freely.
1993 - With the winds of liberalization sweeping the Indian car market, many
multinationals like Daewoo, Peugeot, general Motors, Mercedes-Benz and Fiat
came into the Indian car market.
1997 - The National Highway Policy was announced which will hopefully have a
positive impact on the automobile industry. The Government also laid down the
emission standards to be met by car manufacturers in India in the coming
millennium. There were two successively stringent emission levels to be met by
April 2000 and April 2005, respectively. These norms were benchmarked on the
basis of those already adopted in Europe, hence the names Euro I (equivalent to
India 2000) and the Indian equivalent of Euro II.
1999 - The Hon’ble Supreme Court passed an order directing all car manufacturers to
comply with Euro I emission norms (India 2000 norms) by the 1st of May, 1999
in National Capital Region(NCR) of Delhi. The deadline was later extended to 1st
June, 1999
2004 - Tata Motors becomes the first Indian auto company to be listed on the New York
Stock Exchange
2008- Tata Motor becomes the first auto company to produce world’s smallest car “
Nano”.
2.1.4 Major player in Indian automobile sector:
Jagdish Khattar. Y.S. Kim. Ratan Tata. S.G. Awasthi. The four men are peers. Each has
unequivocally established himself as one of the winners in the first round of the car wars.
Between them, they control almost 80% of the Rs 30,500-crore Indian automobile
market.
The battle royale in the Indian car market has entered the next phase. As the dust and
excitement of the dozens of new models introduced in the past one year settles down, the
winners have pulled way ahead of the also-rans. One old assumption has been vindicated
-- that over 80% of the Indian car market is still confined to the small, sub-Rs 4 lakh
models. And those mid-size and bigger models can only provide the icing on the cake,
not the cake itself to any manufacturer.
Maruti found out that price is no longer the most important factor in winning car battles.
Daewoo's Awasthi admits candidly that he learnt precisely the opposite lesson -- that
price does matter. Kim of Hyundai found out the hard way that you could get your
pricing and value equation just right and still land up with egg on your face if you tried to
cut corners in the technology game. Ratan Tata learnt that providing an internationally
designed car with a great value proposition didn't get you far if you couldn't provide
global quality standards. Both the Indica and the Matiz had to upgrade their engines in
less than one year after launch, the Honda City had to bring in both a new body and a
more powerful engine, and Hyundai had to start offering a new variant with the power
steering option barely a year after it hit the market.
From now on, the battle is expected to get more vicious. In 1999-2000, the car market
bounced back from the recession by showing a 55.83% growth! But now, no one expects
the market to grow by more than 10-15% per annum. The really big volume gains will
come from wresting market share away from rivals rather than because the market itself
is growing exponentially. These are the major players in Indian automobile sector:
 Maruti Udyog Ltd.
 Hyundai:
 Daewoo Motors India
 Telco
 Hindustan Motors
 Mitsubishi Motors
 Ashok Leyland
 Swaraj Mazda
 Mahindra & Mahindra
 Tata Motors
Chapter -3
1. Philip A. Stroke (2009): The use of celebrity endorsement as a part of marketing
communication strategy has been gaining popularity over the past years. Monies paid out
by firms on endorsement contracts are estimated to be 10% to 25% of total advertising
expenditures. However, empirical evidences on the effect of endorsement announcements
on the stock prices performance of frims has been mixed at best. We analyze the share
market perception of celebrity endorsement using a unique sample of 102
announcements. Stock returns and trading volumes depends upon the level of press
attention. Endorsements that appear in a major newspaper show higher average return
and larger trading volume changes at announcement date than those announced on the
corporate website only.
2. Subhadip Roy (2007): This study raises three questions and attempts to provide
tentative explanations for them. The first two questions relate to locating, in the
consumer's perceptual space, the relative position of Indian celebrities and brands on a set
of personality attributes. The third question relates to determining the fit between the
celebrity and the brands endorsed by her/him. The results suggest that consumers
differentially rank both celebrities and brands. Specifically, Amitabh Bachchan ranks
high on five personality attributes, and brands such as Pepsi and Coke rank high on four
personality attributes. The study further shows that although celebrities may endorse
several brands, their personality does not fit well with the personality of the brand they
endorse. Evidence offered here supports the basic assumptions of the celebrity–product
congruence model.
3. Shimp(2007): A recent estimate indicates that almost 20 percent of all advertisements
worldwide use celebrity spokespersons. The general belief among advertisers is that
messages delivered by celebrities provide a higher degree of appeal, attention, and
possibly message recall than those delivered by non-celebrities. Marketers also claim that
celebrities affect the credibility of the claims made, increase the memorability of the
message, and may provide a positive effect that could be generalized to the brand.
4. Goldsmith et al.(2002): They assessed the impact of endorser and corporate
credibility on attitude toward-the-ad, toward –the-brand and purchase intention. 152
adults consumers were surveyed who viewed a fictitious advertisement for Mobil Oil
company. They rated the credibility of the ad’s endorser, the credibility of the company
and attitude towards –the-ad, attitude towards brand and purchase intention. It was
observed that endorser credibility had its strongest impact on advertisement while
corporate credibility has its strongest impact on brand.
5. Solomon et al. (2002) also talk about celebrities being most effective in situations
involving high social risk, where the buyer is aware of the impression peers will have of
him or her. According to him, a celebrity endorser is relatively more effective for
products high in psychological or social risk, involving elements as good taste, self-
image, and opinion of others, compared to a “normal” spokesperson. Expert opinions
were considered most useful when the product endorsed was perceived to involve high,
financial, performance, or physical risk.
6. Kambitsis et al., 2002) Celebrity endorsement is a billion dollar industry today with
companies signing deals with celebrities hoping that they can help them stand out from
the clutter and give them a unique and relevant position in the mind of the consumer. The
reasons for using celebrity endorsement involves its potential to create awareness,
positive feelings towards their advertising and brand. Advertisement featuring celebrity
endorsement is often also perceived to be entertaining.
7. Pettitt (2000) : Advertising is heavily used in process of personality creation. This
follow logically from the fact that personalities are particularly important for brand
building. They provide unique associations with the brand and these associations acts as a
stimulus for the customer to link their personality with the brand.
8. McGuire et al.(1999): Expertise is the perceived knowledge that the source possesses,
while trustworthiness is the degree to which the source is considered to be honest, ethical
and believable. Both components are positively related to credibility, but the influence of
one component can offset the effects of the other. For example, a spokesperson that is
viewed as knowledgeable will be ineffective if he or she is perceived as lacking
trustworthiness.
9. Henry(1999): Henry indicates that good PSAs are ones that are empathetic, “meaning
they build trust with their audience or a sense of caring about the problem”. He goes on to
say that a good radio PSA is one that creates a mental picture of the subject with sound
effects and a strong, credible spokesperson. In another article, he mentions that more than
11,000 radio stations in the USA, and around two-thirds of them use PSAs. It is also in
accordance with Bonk et al. (1999).
10. Dwane Hal Dean (1999): He studied the effects of 3 extrinsic cues viz. Third party
endorsement, event sponsorship and brand popularity on brand/manufacturer evaluation.
It was observed that endorsement significantly affected only product variables (quality
and uniqueness) and one image variable (esteem). The third party endorsement hence
may be preceived as a signal of product quality.
11. Sheth et al. (1999) argue that perception is shaped by the stimulus characteristics
(objects, brands, stories etc.), the context in which it is delivered (social, cultural), and the
customer characteristics (knowledge, experience, expertise). It is within these stages that
a consumer will either recognize a fit between a celebrity and a product/brand, or reject
this connection on different grounds. Memory is structured as an associative network.
When this happen the brand and the celebrity become parts of each others association set
.
12. Till and Shimp(1998): Other research suggests that celebrity endorsements might
vary in effectiveness depending on other factors like the “fit” between the celebrity and
the advertised product.
13. Tellis (1998) argues that consumers in a high-involvement situation might actually be
offended by the use of celebrity to endorse the brand. He also suggests that when there
seem to be perceived high differences among competing brands, the consumer will
perceive it as a high-involvement situation and put extra emphasis on information about
the product more than being influenced by celebrity endorsers.
14. Lang and Goodwill (1997): PSAs are broadcasted by media outlets in the public
interest at no cost to nonprofit organizations. According to them, “Public service
announcements are a vital tool in generating awareness for critical issues while
dispensing important information for many non-profit organizations”. If produced
correctly and distributed to the appropriate media outlets, PSAs help educate, inform, and
motivate various publics on a variety of topics and issues (PSAs: Do They Really Work?).
They,wrote that PSAs “deal with life-and-death issues. They urge us to think about
people with desperate conditions, act to help those in need and support causes that can
change the world”.
15. Freiden(1994) :He concluded that celebrities are particularly effective spokespersons
because they are viewed as highly trustworthy, believable, persuasive, and likeable. A
credible spokesperson is, other things being equal, more effective than a less credible
spokesperson.
16. King (1991) argues that a good strategy to build strong brand equity is to create an
“original metaphor for the brands’ personality”They talk about the factors involved in
building a brand such as: Presence, Relevance, Differentiate, Credibility, and Imagery.
The credibilityfactor especially has been looked at by several researchers in celebrity
endorsement The same has presence and also to some extent imagery and differentiate.
Relevance in this context can be looked at as a result of success in the other areas, as it
concerns being perceived as relevant for the consumer.
17. Obanian(1990): developed a source credibility measure that operationalizes
credibility as consisting of the underlying dimensions of expertise, trustworthiness and
attractiveness. The expertise and trustworthiness dimensions are essentially identical to
those identified in previous research and discussed above. However, the attractiveness
dimension, unlike previous conceptualizations, is defined as the “… physical
attractiveness of the source to the listener, and to a lesser extent, the emotional
attractiveness of the source” (Bearden and Netemeyer, 1999, p. 301). The advantage of
this conceptualization lies in part in the extensive scale validation procedure undertaken
by Ohanian.
18. Friedmen et al.(1976):Using advertisements with celebrities and non-celebrities for a

fictitious brand of sangria wine, found that the celebrity version of the advertisement had
higher scores on probable taste, advertising believability, and purchase intention – the
three dependent variables. However, the wine was a fictitious brand, and the celebrity
simply brought recognition to the name.The paucity of research comparing celebrity with
non-celebrity spokespersons highlights the need for continued investigation into this area.
It is important for advertisers to clearly understand both the pros and cons of using such
individuals to represent their products, causes, or organizations; and ultimately the
advertisers must assess the effectiveness of such a message.
19. Triandis (1971): Attractiveness has been conceptualized in terms of similarity,
familiarity, and likeability. Similarity refers to the perceived resemblance between the
spokesperson and the audience. Familiarity represents the amount of knowledge that the
audience has about the spokesperson. Likeability refers to affection for the spokesperson
based on physical appearance, behavior or other personal traits.
20. Hovland et al. (1953): In encoding the message in the context of celebrity
endorsement, perhaps the most important decision to be made, besides choosing whether
or not to use celebrity endorsers at all, is the choice of celebrity. Much research has been
made in this area and several models have been made to explain and assist in the celebrity
endorsement selection process.
Chatpter-4
Data analysis and interpretation:
1.Occupation of respondent:
Occupation %tage
Business Class 25
Service Class 25
Student 30
Others 20
%tage
20% 25%
Business Class
Serv ice Class
Student
30% Others
25%
Interpretation:
From this pie-chart it is clear that majority of the respondents are students and rest of the
share is occupied by service and business class.
2. Age of the respondent:
Age %tage
18-25 30
26-32 20
33-39 30
Above 40 20
No. of respondent
35
30
25
20
No. of respondent
15
10
0
18-25 26-32 33-39 Above 40
Interpretation:
This pie-chart depicts that mostly respondents are young and while rest are above 25
years.
3.Gender of the respondent:

Gender %tage
Female 65
Male 35
35%
Female
Male
65%
Interpretation:
This pie-chart depicts that 65% of the respondents are female and 35% are males.
4.Type of Vehicle:
Vehicle %tage
Two-wheeler 45
Four-wheeler 35
Both 20
20%
45% Two-wheeler
Four-wheeler
Both
35%
Interpretation:
This pie-chart depicts that 45% of the people have two-wheeler and 35% of the people
have four-wheeler and rest 20% have both two-wheeler and four-wheeler.
5.Factors affecting purchase intention:
Factors %tage
Price 20
Opinion-leader 15
celebrity endorser 35
Brand name 30
Factor
20%
30%
Price
Opinion-leader
celebrity endorser
15% Brand name
35%
Interpretation:
This pie-chart depicts that 35% of the people consider celebrity endorser while going for
the purchase, followed by brand name-with 30%.,opinion leader 15% and 20% people
consider price. Brand name usually covers all aspects like functional aspects
viz.mileage,speed etc. As people usually are more interested towards well known brands
and if these brands are advertised by famous celebrity it creates an huge impact.
6.Like to see any celebrity endorsing your brand:
Preference %tage
Yes 55
No 25
Can't say 20
20%
Yes
No
55% Can't say
25%
Interpretation:
This pie-chart clearly indicates that 55% of the respondents want their products to be
advertised by celebrities, 25% don’t want and 20% of the respondents weren’t sure. So,
this clearly shows how much important these celebrities are in the daily life of common
man.
7.Male v/s Female celebrity endorser:
HYPOTHESIS TESTING
Step1: State Hypothesis:
Ho: Female celebrity endorser is more effective than that of male. .
Ha: Female celebrity endorser isn’t more effective than that of male.
Step 2: Set the Rejection criteria:

DF = 5-1 = 4
At alpha .05 and 4 degrees of freedom, the crtitical value from the chi square distribution
table is 9.49
Frequency Observed
Preference Male Female Row Total
Strongly Agree 25 5 30
Agree 05 15 20
Indifferent 10 10 20
Disagree 5 10 15
Strongly Disagree 10 5 15
Column Total 55 45 100
Frequency Expected
Preference Male Female Row Total
Strongly Agree 55*30/100=16.5 45*30/100=13.5 30
Agree 55*20/100=11 45*20/100= 9.0 20
Indifferent 55*20/100=11 45*20/100= 9.0 20
Disagree 55*15/100= 8.25 45*15/100=6.75 15
Strongly Disagree 55*15/100= 8.25 45*15/100=6.75 15
Column Total 55 45 100
Χ²-Calculation
Preference Male Female
Strongly Agree (25-16.5)2/16.5 (5-13.5)2/13.5
Agree (5-11)2/11 (15-9)2/9
Indifferent (10-11)2/11 (10-9)2/9
Disagree (5-8.25)2/8.25 (10-6.75)2/6.75
Strongly Disagree (10-8.25)2/8.25 (5-6.75)2/6.75
Chi-Square
Preference Male Female
Strongly Agree 4.38 5.35
Agree 3.27 4
Indifferent 0.09 0.11
Disagree 1.28 1.56
Strongly Disagree 0.37 0.45
Χ²= 20.85
Interpretation:
As the Chi-square test statistics 20.85 exceeds the critical value of 9.49 hence null
hypothesis is rejected and hence we reached at the result that our alternative hypothesis is
accepted. It is confirmed after the analysis that male celebrity endorser are more effective
than that of female celebrity.
8.Celebrity endorser as an effective method of persuasion:

Preference %age
Strongly Agree 45
Agree 15
Indifferent 10
Disagree 20
Strongly Disagree 10
Degree of preference
10%
20% Strongly Agree

45%
Agree
Indifferent
Disagree
Strongly Disagree
10%
15%
Interpretation:
This chart depicts that mostly people agree that Celebrity endorsement is an effective tool
of persuasion. 45% of people strongly agree that celebrity endorsement is an effective
tool of persuasion and 20% of people disagree that it is one of the tool.
HYPOTHESIS TESTING
Ho: Celebrity endorsement is not an effective tool of persuasion to facilitate

customer to go for purchase. .
Ha: Celebrity endorsement is an effective tool of persuasion to facilitate customer to go
for purchase.

DF = 5-1 = 4
At alpha .05 and 4 degrees of freedom, the critical value from the chi square distribution
table is 9.49
Step 3: Compute the Test Statistics: χ² = ∑ (O-E)2/E
Preference Observed Expected O-E (O-E)² (O-E)²/E
Strongly 45 20 25 625 31.25

Agree
Agree 15 20 -5 25 0.25
Indifferent 10 20 -10 100 5
Disagree 20 20 0 0 0
Strongly 10 20 -10 100 5

Disagree
χ²= 41.5
Interpretation:
accepted. Hence it can be concluded that celebrity endorsement is and effective tool of
persuasion to facilitate customer to go for purchase.
9.Celebrity endorsement affects my purchase decision while going for the purchase
of automobile products.
Preference %age
Strongly Agree 30
Agree 15
Indifferent 10
Disagree 35
Strongly Disagree 10
Degree of Preference
10%
30%
Strongly Agree
Agree
Indifferent
35% Disagree
Strongly Disagree
15%
10%
Interpretation:
This chart depicts that 45% of the people agree strongly or simply on the fact that their
automobile purchase is being affected by celebrity endorsement,10 % of the people
remain indifferent and 45% of the people disagree with this fact.
HYPOTHESIS TESTING
Ho: Celebrity endorsement doesn’t affect purchase decision of automobile products. .
Ha: Celebrity endorsement affects purchase decision of automobile products.
DF = 5-1 = 4
table is 9.49
Preference Observed Expected O-E (O-E)² (O-E)²/E
Strongly 30 20 10 100 10
Agree
Agree 15 20 -5 25 1.25
Indifferent 10 20 -10 100 5
Disagree 35 20 15 225 11.25
Strongly 10 20 -10 100 5

Disagree
χ²= 32.5
Interpretation:
accepted. Hence it can be concluded that celebrity endorsement affects purchase decision
of automobile products.
10.Celebrity persona you like most:
Celebrity persona %tage
Bollywood stars 55
Sports star 25
None of the above 20

Degree of preference
20%
Bollywood stars
Sports star
55%
None of the above
25%
Interpretation:
This pie-chart depicts that majority of people like to see bollywood stars to endorse their
brands and 25% of them sports star. While remaining 20 % don’t want to any celebrity
endorsing their brand.
HYPOTHESIS TESTING
Ho: People like to see bollywood stars endorsing their brand than sports star. .
Ha: People like to see sports stars endorsing automobile products than that of bollywood
stars.
DF = 5-1 = 4
table is 9.49
Celebrity Observed Expected O-E (O-E)² (O-E)²/E
persona
Bollywood 55 33.3 21.7 470.89 14.14

stars
Sports star 25 33.3 -8.3 68.89 2.06
None of 20 33.3 -13.3 176.89 5.31

the above
χ²= 21.51
Interpretation:
accepted. Hence it can be concluded that people like to see sports stars endorsing their
products rather than bollywood stars.
11. You follow your favorite celebrity while purchasing new automobile every time:
Response %tage
Every time 40
Rarely 25
Never 35
Response
35%
40%
Every time
Rarely
Never
25%
Interpretation:
This pie-chart depicts that 40% of people follow their favorite celebrity every times while
going for the purchase of new automobiles. That means frequency is pretty large. On the
other hand 25% of the people rarely follow their favorite celebrity. While 35% of the
people doesn’t follow any celebrity for purchasing any of the automobile vehicle
everytime.
12. Identify the following ads regarding various automobile products:
“More Car par car…………………”
“The sun-shine car ……………….”
“Why should boy have all the fun?…………………..”
“ What role you goanna play?……………………………”
Interpretation:
Out of 100 respondents, 30 were able to identify the celebrity in whole 4 ads, 30 were
able to identify 3, 20 were able to identify 2 and 10 were there who identified only 1 of
the ad. 10 people were there who weren’t able to identify even a single celebrity.
Majority of the respondent were quite familiar with Priyanka Chopra’s “ Why should boy
have all the fun?” So majority of the respondents were able to recognize the celebrity
used in the advertisement so it clearly tells that celebrity endorsement act as source of
brand-building.
Findings:
After completing survey I found that:
 Brand name and celebrity endorser are two factors that people consider before
making a purchase intention of automobile vehicle.
 Maximum number of people wants to see celebrity endorsing their automobile

vehicles that means they have high involvement with the celebrities.
 One of the abstract finding of the survey was regarding people’s orientation
towards gender biasness. This finding clearly indicated that people like to see
male celebrities endorsing automobiles than that of female celebrities.
 Most no. of people believe that celebrity endorsement is an effective mean of

persuasion i.e. it convey the message clearly to the target audience regarding
product offerings and persuade them to go for the purchase.
 It was found that celebrity endorsement have an impact over the purchase of
automobile products. As large no. of people surveyed confirmed this fact.
 In country like India were Cricket is a religion and cricketers are worshiped as
God. One of the finding revealed that people admire sports player as better
celebrity persona than that of bollywood actor/actress.
 It was found that while making every new purchase of an automobile most no. of
people follow celebrity endorser while rest of them denied this fact.
 The results of brand recall were astonishing most no. of people were able to
recognize the celebrities endorsing the given advertisement. So it showed that
celebrity endorsement is a source of celebrity endorsement.
Chapter-5
5.1 Summary:
Celebrity endorsement is a method employed by marketers as a promotional tool so that

people can associate themselves with the product as they associate themselves with the
celebrity endorser. Companies spend huge amount of money to rope in such celebrities so
as to endorse their brands. They generally determine their effectiveness by measuring
ROI. Lot of studies conducted on celebrity endorsement but no one clearly indicated
whether it can act as a source of brand-building. So a research was conducted on this
particular aspect. It wasn’t possible to concentrate this study on the entire sectors so
automobile sector was selected.
Primary data was collected through structured questionnaire and sampling unit was
Jalandhar city. Secondary sources were also used in the beginning so as to gain an insight
of the problem.
After carrying it was found that male celebrities are better than that of female celebrities.
People love to see sportsperson endorsing automobile than that of bollywood stars. It was
found that celebrity endorser affects people intention regarding purchase of the
automobile and celebrity endorsement acts as a source of brand-building.
5.2 Conclusion:
Despite the obvious economic advantage of using relatively known personalities as

endorsers in advertising campaigns, the choice of celebrities to fulfill that role has
become common practice for 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.
But it would be presumptuous to consider celebrity endorsement as a panacea for all

barricades. Celebrity endorsement if used effectively, makes the brand stand out,
galvanizes brand recall and facilitates instant awareness. To achieve this, the marketer
needs to be really disciplined in choice of a celebrity. Hence the right use of celebrity can
escalate the Unique Selling Proposition i.e. it can act as a source of brand-building of a
brand to new heights; but a cursory orientation of a celebrity with a brand may prove to
be claustrophobic for the brand.
It was found that people love to see celebrities endorsing their brands so the involvement
of common man is pretty high with these celebrities. So marketers should use the right
celebrity matching with the product. During survey it was found that male celebrities are
considered to be better celebrity endorser than that of their female counterparts. This is
because lots of research regarding consumer’s behavior towards automobile indicates that
people view automobile as female so in order to attract the attention of target customers
they preferably use male celebrity endorser. Also it was found that people love to see
sports stars endorsing their automobile than bollywood stars. This is because of the fact
in India Cricket is very famous and people worship players like Sachin Tendhulkar,
Kapil Dev, Sourav Ganguly etc. So they love to see these players endorsing their
automobiles. At last I just want to say A celebrity is a means to an end, and not an end in
him/her.
5.3 Limitation:
There are following constraints of the study which can be explained as:-
 The time of research was short due to which many fact has been left untouched
 The Area undertaken in research in Jalandhar only. But to do a completer research
a wide area is required, so the area is also a constraint of the study.
 Sample for the study taken is of only 100 consumers. Which can also act as a
constraint in the study?
 While collecting data some of the respondents are not willing to fill the
questionnaire, so they might not fill their true behavior. This can also be a
constraint of the study.
5.4 Recommendations:
After studying impact of celebrity endorsement on buying behavior of customers in
automobile sector and as a source of brand-building I want to suggest following
recommendations:
 From study it was found that respondents were able to recognize the Priyanka
Chopra’s advertisement “Why should boys have all the fun” This advertisement
was designed on such an idea that everyone can recognize the brand of Scotty
Pepp easily. So instead of hiring any celebrity companies should try to create such
nice innovative idea and then match the suitability of celebrity with the idea. This
is also supported by the fact that Today’s era is of Gen X their taste changes very
fast and wants fresh material.
 This study reveals that celebrity endorsement act as a source of brand-building but
it isn’t the complete solution. Company can’t rely only on celebrity endorsement
to sell their products but they should follow an integrative approach so as to
generate good sales volumes. They should provide more schemes to their
customers in order to sell their products.
 One of the important recommendations that I want to give is that during this
slowdown period companies are cutting their advertisement expenditure but they
shouldn’t do this. This is because this slowdown provide them an opportunity to
differentiate themselves from their competitors. This is also supported by the
researches. One of the research explained that during 1960’s recessions 290
global companies increased their advertisement expenditure and their sales
increased by whopping 300%. Some of the companies are well established brand
name todays like IBM, Microsoft, 3M etc.
Chapter-6
Bibliography:
REFERENCES:
 Philip A.Stroke(2009), "impact of celebrity endorsement on stock prices",

Journal of Consumer Research, Vol. 14 No.March, pp.471-82.
 Roy, Shubhadip (2007), "Consumer’s perceptual space and Indian celebrities in
relation to brand attributes", Journal of Business Research, Vol. 37 No.1, pp.71-
84.
 Shimp (2007), "Celebrities as spokesperson", Journal of Retailing, Vol. 76 No.2,
pp.175-91.
 Goldsmith et al.(2002): “Celebrity endorser vis-à-vis corporate credibility,”
Media Tech Foundation, Flemington, NJ
 Solomon et al. (2002) "Celebrity endorsement in risk regime", Communication
Research, Vol. 30 No.5, pp.483-503.
 Kambitsis et al., (2002) The National Bullying Survey 2002: The Results,
availableat:www.bullying.co.uk/nationalsurvey/thenationalbullyingsurvey_results
.pdf (accessed 28 february 2009), .
 Pettit (2000), Building Strong Brands, Free Press, Boston, MA.,
 McGuire et al.(1999), "Expertise and trustworthiness in relation to credulity-
Celebrity endorsement", Quarterly Journal of Austrian Economics, Vol. 3 No.1,
pp.63-78
 Henry(1999) "Role of PSA’s in USA’s Radio market", European Journal of
Marketing, Vol. 34 No.1/2, pp.156-75.
 Dwane Hal Dean (1999)Managing Brand Equity: Capitalizing on the Value of a
Brand Name for manufacturer prospective, The Free Press, New York, NY,
 Sheth et al. (1999)"Celebrity endorsement in relation to perception and stages of
consumer adoption for celebrity endorsement ", Advances in Consumer Research,
Vol. 20 No.1, pp.463-8
 , Till and Shimp(1998) “Celebrity endorsement-a different prospective”, The
Journal of Consumer Affairs, Vol. 27 (1), pp. 55-65.
 Tellis (1998) "Celebrity endorsement in highly involved regime", Journal of
the Academy of Marketing Science, Vol. 16 No.4, pp.74-94.
 Lang and Goodwill (1997), “PSA- Do they really work?” Oxford University
Press, Oxford, .
 Freiden(1994), "Celebrity endorser as credible spokesperson", Journal of
Marketing Research,, Vol. 11 No. May, pp.156-63
 King (1991), "Determinants of strong brand equity: a behavioral analysis", The
Journal of Product and Brand Management, Vol. 6 No.5, pp.315-24.
 Obanian(1990): "The role of emotions in marketing", Journal of the Academy of
Marketing Science, Vol. 27 No.2, pp.184-206.
 Friedmen et al.(1976), “ The power of brand”, Journal of Business, Vol. 23
pp.71-80.
 Triandis (1971),"Relationship between attractiveness,similarity,familiarity and
likeability", Advances in Consumer Research, Vol. 18 No.1, pp.445-52
 Hovland et al. (1953), “Whom to chose as celebrity?”, New York, NY, pp.535-
56.
WEBSITES:
 www.marketingmania.in/india.htm
 http://en.wiki.wikipedia.com/indian_industry
 www.managementparadise.com/consumerbehaviour_celebrity
endorsement_automobiles.htm
 http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=&id=ac
f176cd-6f53-42b6-a47b-72e34341cfe1&&Headline
 http://www.businessweek.com/innovate/content/feb2008/id20080227_377233_pa
ge_2.htm
 http://www.telegraphindia.com/1081007/jsp/opinion/story_9933949.jsp
APPENDIX
Questionnaire
Dear Respondents,
I, Sandeep Sharma, student of MBA, am conducting a survey on “Impact of

celebrity endorsement on buying behavior of customers and as a source of brand
building”. For this purpose I need your cooperation in fulfilling this questionnaire. It will
take few minutes of your precious time. It is make sure that information obtained is for
general purpose only.
1) Name of the respondent……………………
2) What is your occupation?
Business Class
Service Class
Student
Others
3) What is your age?
18-25
26-32
32-39
More than 40
4) What is your gender?
Male
Female
5) What type of vehicle do you currently own?
Two-wheeler
Four-wheeler
Both
6) What factor affects your buying behavior toward this purchase?
Price
Opinion-leader
Celebrity endorser
Brand name
7) Do you like to see any celebrity endorsing your brand on television?
Yes
No
Can’t say
8) “Celebrity endorsement is an effective tool of persuasion of buying vehicle” Rate

this statement.
Strongly agree
Agree
Indifference
Disagree
Strongly disagree
9) “Male endorser is more effective as compared to female endorser.” Rate this

statement.
Strongly agree
Agree
Indifferent
Disagree
Strongly disagree
10) “Celebrity endorsement affect my purchase decision while purchasing automobile

vehicles” Rate this statement.
Strongly agree
Agree
Indifference
Disagree
Strongly disagree
11) Out of the following celebrity persona whom do you like most?
Bollywood Stars
Sports star
None of above
12) Do you follow your favorite celebrity while purchasing a new vehicle every time?
Every time
Rarely
Never
13) You are required to identify the following ads regarding various automobile
products:
“More Car par car…………………”
“The sun-shine car ……………….”
“Why should boy have all the fun?…………………..”
“ What role you goanna play?……………………………”
14) Any suggestion…………………………………………………………..
…………………………………………………………………………….
…………………………………………………………………………….
“ Thanks for your valuable Contribution”

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LOVELY PROFESSIONAL UNIVERSITY

A STUDY ON THE IMPACT OF CELEBRITY ENDORSEMENT ON

Submitted to Lovely Professional University

Submitted by: Supervisor:

TO WHOMSOEVER IT MAY CONCERN

I express my sincere thanks to my parents, friends who encouraged me throughout

 To identify the influence of celebrity endorsement on consumer buying behavior.

 To study celebrity endorsement as a source of brand-building.

 To find which type of celebrity persona is more effective.

Also from a marketing communications (marcoms) perspective, it is vital that firms

Difference Between Brand Ambassador & Brand Face

Scope of Celebriity Endorsement:

The illustrations below explain the same: -

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

Compliance, Identification & Internalization

These latter two processes are particularly applicable to celebrity-endorsed advertising.

Compliance infers that another individual or group of individuals influences an

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

Effectiveness of Celebrity Endorsers

They attract attention to the advertisement in the cluttered stream of messages

They are perceived as being more entertaining

They are seen as trustworthy because of apparent lack of self-interest.

Brand Image Formation & Brand Preference

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

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

Automobile marketing in India:

Some success story

 To study celebrity endorsement as a source of brand-building.

 To find which type of celebrity persona is more effective.

1.2.3 Scope of the study:

1.2.4 Research Methodology:

1880's & early 1900's

 About hundred years ago

 In sixties 2 and 3 Wheeler segment established a foothold in the industry.

1980's - The period of liberalized policy and intense competition

 First phase of liberalisation announced.

 Further tightening of Emission norms was done in 1996.

2.1.1 Growth and Landmarks of automobile industry in India :

2.1.2 Sturcture of Indian automobile sector and some facts:

 Segment  Market Share (%)

 Source: SIAM/ Auto Car India

Increased urbanisation, low pricing policies, improvement in products and technology

 Figure -Structure of Passenger Vehicle Market (India)

1928- The first imported car was seen on Indian roads

1942- Hindustan Motors incorporated

1944- Premier automobiles started

1948- First car manufactured in India

18. Friedmen et al.(1976):Using advertisements with celebrities and non-celebrities for a

3.Gender of the respondent:

5.Factors affecting purchase intention:

6.Like to see any celebrity endorsing your brand:

7.Male v/s Female celebrity endorser:

Step 2: Set the Rejection criteria:

8.Celebrity endorser as an effective method of persuasion:

20% Strongly Agree

Ho: Celebrity endorsement is not an effective tool of persuasion to facilitate

Step 2: Set the Rejection criteria:

Preference Observed Expected O-E (O-E)² (O-E)²/E

Strongly 45 20 25 625 31.25

Indifferent 10 20 -10 100 5

Strongly 10 20 -10 100 5

Preference Observed Expected O-E (O-E)² (O-E)²/E

Indifferent 10 20 -10 100 5