This literature review explores how celebrity endorsement influences a customer’s purchasing behavior. Its objective is to offer an extensive analysis of various theories that can be applied to address market research inquiries regarding the utilization of celebrities in advertising and product endorsements. The theories highlighted in this review are essential for comprehending consumer buying behavior and marketing principles.
The literature reviews the influence and impact of celebrities in advertising and endorsing consumer products. McCracken’s (1989) defines a celebrity as a person who uses their public recognition to promote consumer products in advertisements. According to Friedman and Friedman (1979), a celebrity is a globally famous and renowned icon among people in cosmopolitan societies.
According to Cool Avenues (2005), individuals with special entertaining qualities, such as being an entertainer, movie superstar, television actor, or sportsman, can captivate the public. Friedman and Friedman’s research supports the use of celebrity endorsers in advertising and promoting products with high psychological and/or social risk. They found that this can increase the authentic believability and favorable assessment of both the product and the advertisement, ultimately leading to a more positive purchase intention by customers.
It is suggested by various studies that attracting new customers in the market is more expensive than retaining existing ones. Therefore, companies should focus on developing effective communication with existing consumers while also attracting potential customers through marketing. As a result, below-the-line promotional models have become an essential part of companies’ marketing mixes, with advertising being the dominant communication tool. Modern marketers conduct extensive research on consumer buying behavior to better understand their target customers and improve the effectiveness of strategic marketing mixes. Advertisers promote their products through unique product launches and high-profile inauguration ceremonies to gain attention and awareness among consumers.
AD agencies use celebrity endorsement to enhance the appeal of products and boost sales in both domestic and international markets. Celebrities also play a crucial role in generating extensive PR coverage for brands. In the fashion industry, celebrity endorsement is commonly employed to promote fashion goods, as these items heavily rely on a strong brand image from a cultural standpoint. Celebrities are perceived to be more effective in conveying fashion concepts directly to customers (Bohdanowicz & Clamp, 1994).
Contrarily, according to Solomon (2003), consumer buying behavior is a complex process influenced by various factors such as reference groups, product loyalty, and social and cultural factors. Advertising a product using celebrities has been more successful in Japan than in America, with celebrities appearing in approximately 70% of product advertisements in Japan compared to only 5% in the United States (Kilburn, 1998; Stephens and Rice, 1998). Celebrity endorsements have numerous advantages, including building credibility, attracting public attention, and potentially increasing sales. Celebrity endorsements are commonly used for a wide range of product categories including hotels, toiletries, telecom, razor blades, soft drinks, and alcohol (Meri News, 2006; Oxbridge Writers, 2010).
The use of celebrities for endorsements is a highly unpredictable strategy in the competitive business world, whether it be by large multinational corporations or smaller industries (Kambitsis et al. , 2002). Advertisers strive to make their products appealing to consumers, and one way to achieve this is by using popular celebrities as brand ambassadors. Companies like Pioneer, Accenture, Palmolive, Hyundai, and others have benefited from associating their products with well-known figures. Despite the hefty cost of signing a celebrity, this approach has proven to be effective in establishing credibility and increasing sales. Global companies have been aligning themselves with various celebrities to promote their brands. Pepsi is a notable example, as they have utilized numerous celebrities in their advertising campaigns over the years, such as Shaquille O’Neal, Britiny Spears, Wyclef Jean, Busta Rhymes, and Mary J. (Byrne. A, 2003).
Blige. • Nike – The Company signed famous golfer Tiger Woods in 1996 and have seen a revenue growth of $50 million. In 2000 Tiger Woods renegotiated a 5 year contract with Nike estimated at $125 million. • Reebok – Venus Williams, famous tennis player and Wimbledon champ has signed a 5 year contract with Reebok International Inc. worth $40 million. (Chillibreeze, 2010). In1995, U. S. Multi-nationals paid more than 1 billion $ to 2000 athletes for endorsement contracts for enhancing their sales, which means that approx. 10% of the expenditure on corporate sponsorships was spent on this particular promotion strategy.
Nike and Michael “Air” Jordan, the basketball superstar, have collaborated to achieve tremendous success in the sports products industry. By the early 1993, Nike had captured a significant share of the athletic shoe sales market in the U.S. Their “Air Jordan” shoes and apparel were immensely popular, generating more than $200 million in yearly sales. Over the past few decades, there has been a growing inclination towards Indian celebrities endorsing various brands, as marketers acknowledge their influential effect on customers’ purchasing decisions.
In India, the advertising industry highly values celebrities such as Shah Rukh Khan, Amitabh Bachchan, Sachin Tendulkar, and M. S. Dhoni. These celebrities have endorsement contracts worth millions of rupees annually. This trend began in India during the late 1970s to early 1980s when different brands started seeking endorsements from famous actors in Hindi cinema and television, as well as popular sports personalities.
Advertisements featuring movie stars like Tabassum (Prestige cookers), Late Jalal Agha (Pan Parag), Ravi Shastri (Vimal) with Vivian Richards, Sunil Gavaskar (Dinesh Suitings), and Kapil Dev (Palmolive Shaving cream) became common, according to Indian MBA (2008). This trend continues today, with Shahid Kapoor endorsing VIP bags, Abhishek Bachchan promoting Idea cellular, and M. S. Dhoni boosting the sales of Boost energy drink, among others. Additionally, the renowned cricketer Sachin Ramesh Tendulkar endorses various products such as Visa, Adidas, Cannon, music systems, and Palio to Pepsi.
According to an article from Meri News in 2009, celebrity endorsements have the power to generate billions for companies. Whether it’s King Khan of Bollywood endorsing Navratan hair oil or Radhe of Tere Naam promoting Chlormint, the approval of a celebrity can have a significant impact. A survey conducted by IPAN-IMRB examined males and females aged 16-45 from various areas such as metros, mid-sized cities, and towns. The results revealed that nearly 17% of the respondents supported Shah Rukh Khan as a brand ambassador. AdEx India, a division of TAM media research, also found that celebrity endorsements increased by 49% in 2007 compared to 2006.
When it comes to celebrity endorsements, the film industry has seen a significant increase of 81%. However, there are certain expectations for the types of celebrities that are chosen. For males, they should be athletic or ‘Macho’, while females should be stunning, elegant, and gorgeous to attract youth in movies and consumers in commercials. This trend in celebrity endorsements has resulted in a dramatic increase in sales for advertisers, with figures skyrocketing 6 to 10 times higher than in previous years.
AdEx India acquired a substantial amount of television advertising volume for celebrity endorsement in the first half of 2008 (Appendix-1). The Bharti Cellular group’s ‘Airtel Cellular Phone Service’ emerged as the leading brand for product endorsement, closely followed by ‘Parachute’s after shower wet look Gel’, which gained significant popularity. These brands topped the list of various brands endorsed by celebrities on television during the first half of 2008 (Appendix-2).
Advertisers find it easy to align or form an alliance with a brand by investing a substantial amount of money in product endorsements. The practice of using well-known or popular imagery serves as a direct way for celebrities to convey a message and connect with consumers. This technique, also known as ‘window dressing’, helps establish a strong association between the brand and the celebrity. However, advertisers face a major challenge of brand switching from consumers, mainly due to the presence of competing products in the market.
The strong connection between brands helps to reinforce and strengthen brand equity, while also creating widespread consumer awareness. The presence of scandals in a celebrity’s personal life has historically affected brand endorsement and advertising. However, companies have now started using non-celebrities who can serve as suitable substitutes for the original endorsers, representing the brand effectively and targeting specific audiences. (Tom et al., 1992). Mehta (1994) explained that consumer preferences and tastes differ, with some being loyal to a specific brand and others being influenced by the celebrity image and their delivery style. (Atkin & Block, 1983).
According to a study on ‘Celebrity Endorsement’ by Petty et al (1983), the primary focus is on improving the brand’s image in order to successfully launch a product in domestic markets. This can even help restore a lost image and reposition the brand. Zafer Erdogan (1999) states that celebrity overexposure occurs when a single endorser promotes multiple products from well-known brands. In a study by Dwane Hal Dean, the effects of three external advertising cues on brand evaluation were examined: third-party endorsement, brand popularity, and event sponsorship. The study found that endorsement only significantly influenced product variables (quality and uniqueness) and one image variable (esteem). Third-party endorsement can be seen as an indication of product quality. Goldsmith et al explored the impact of endorser and corporate credibility on attitudes towards advertisements, attitudes towards the brand, and customer buying decisions or purchase intentions.
A total of 152 adult consumers were surveyed through questionnaires after viewing a fictitious advert from Mobil Oil Company. They were asked to rate the credibility of the company, the credibility of the ad’s endorser, their attitude towards the advert and the brand, and their intentions to make a purchase. The results showed that corporate credibility had the strongest impact on the brand, while endorser’s credibility had the strongest effect on the advert. This research suggests that corporate credibility plays a crucial role in consumers’ reactions and attitudes towards advertisements and brands (Indian MBA, 2007).
This literature review provides an extensive compilation of previous research studies related to celebrity endorsements in marketing. It serves as a comprehensive summary of previous works and will guide the theoretical assumptions and hypotheses for the proposed research.
In summary, the existing market situation suggests that under the appropriate conditions, celebrity endorsement as an advertising strategy has a significant influence, which validates the substantial costs and expenses involved. It establishes a bond that compels customers to make a purchase. Nevertheless, advertisers must recognize the numerous intricate processes involved in celebrity endorsement.
(Word Count – 2100) REFERENCE LIST 1.
The impact of celebrity endorsements on overall brand preferences and advertising effectiveness is discussed in various sources. Cool Avenues (2005) examines this impact, with the article available at http://www.coolavenues.com/know/mktg/neha_taleja3.php. Meri News (2006) also explores how famous brands benefit from celebrity endorsement, with the article accessible at http://www.merinews.com/article/famous-brands-benefit-from-celebrity-endorsement/183.shtml. Another Meri News article from 2009 discusses how celebrity endorsements are a boon to advertising and can be found at http://www.merinews.com/article/celebrity-endorsements-boon-to-advertising/15789756.htm. Petty et al’s paper from 1983 titled “Central and Peripheral Routes to Advertising Effectiveness: The Moderating Role of Involvement” delves into this topic as well, published in The Journal of Consumer Research, Vol. 10(12), Pg. 135-146. Finally, Chillibreeze (2010) provides insights on the impact of celebrity endorsement on a brand, which can be accessed at http://www.chillibreeze.com/articles/Celebrity-endorsement.asp. Indian MBA (2008) also contributes to understanding the effect of celebrity endorsements on consumer brand preferences [source unavailable].
