The Effect of Using Celebrity Endorser Toward a Luxury Brand - Research Proposal Example

Project Proposal Working title: The effect of using celebrity endorser toward a luxury brand: multi-method approach to studying the impact of endorser on the brand Definition and background context: Celebrity is an individual having wide public following and recognition and celebrity endorser is this individual when he supports a consumer good or a luxury or a non-luxury brand through an advertisement. Brand is an entity that is sought after equally by elite and common people. Endorsements are part of strategic initiatives used by companies to promote a brand and create a niche market equity for the brand being promoted. Background and managerial problem: Celebrity endorsements have been a popular advertising option among some of world's best known brands of recent years. The notable few include Michael Jordan and Nike, George Foreman and The Foreman Grills, Bob Dylan and iTunes/iPod, Madonna and Versac and Jeff Gordon and Tage Heuer. The managerial problem of celebrity endorsements is selection of the correct celebrity to promote a specific brand, and then selection of the correct campaign to run the endorsement. Rational/ justification for the project: The most important justification for doing this project is that celebrity endorsements act as a pervasive method of communication management. While time and again celebrity endorsements as a means to sell a product come under frequent ethical scrutiny, there are many areas that need to be seen in an explorative manner to posit logical discussion in this area. In the process of exploration, this study may well provide an answer on how to handle the managerial problem. Case of Tage Heuer is given in this paper to explain the point briefly. Statement of the topic, aims and objectives: This study aims to investigate the influence the celebrity endorsers have on a luxury brand. It further intends to ascertain how a celebrity endorser exerts direct or indirect influence over the brand and its resulting growth among the consumers. The study would also see whether the attitude the consumers have towards the celebrity gets mediated through the brand. At the end, the study would also check if the celebrity endorser exerts an influence on the purchase intention of the consumer. The study will contribute and draw on the current literature in this field and discuss theories governing the influence. Three primary objectives of the study would be as below: i) Study impact of celebrity endorsements on brands ii) Study impact of celebrity endorsements on consumer purchasing behavior iii) Study comparative effectiveness of non-celebrity endorsements vs. celebrity endorsements Research question: What is the impact of celebrity endorser on a luxury brand and how does it alter consumer’s buying behavior. Literature review: Celebrity endorsements are one of the most practiced forms of advertising in the retail sector today (White et al, 2009). Erdogan et al (2001) have revealed that one-fourth of all television advertisements are aired today to promote brands, and Agrawal and Kamakura (1995) add that these advertisements are paid by ten percent of the advertisers' budget. Katyal (2007) has argued that marketers of luxury as well as other brands prefer celebrity endorsers and make huge investments on the same since they are a sure-shot method of changing the consumer mindset and creating demand for the products. Zabid and Jainthy (2002) study of Perception Advertising and Celebrity Endorsement has revealed that celebrity endorsements help subject improve the rating of the commercial. The influence is created on account of the endorser's image in public which links the brand to as great affluence as that of the endorser. Characteristics of celebrity endorsements as these have doubled the statistics of consumer goods being endorsed by celebrities in the last decade and the trend is on an upward swing. In 1995 one in eight endorsements featured a celebrity; now it one in 4 or sometimes even more. This also has another flip side; while the celebrity endorsements increase the visibility of a brand by influencing a consumer’s pre-purchase attitude; they also help the companies raise their profile to a higher level. Consumers look up to a certain level of congruence between the image of a brand as they perceive it and the type of celebrity who endorses the same (Mohammad and Al Zoubi, 2011). When this congruence occurs as perceived, consumers get attached to the brand since the brand reinforces consumers' desired image and self-identity. Kaikati (1987) has outlined five advantages that come with celebrity endorsements. These include creation of impeccable brand identification, changing an earlier perception of a brand to an impressive one, create a repositioning statement on an existing brand, global positioning or marketing of a brand, and altering consumers' purchase intentions. If the celebrity is attractive, consumers’ attitudes towards the advertisement or the brand advertised increases. Haghirian (2005) has termed this attitude as "individual's mental state in which he or she wants to organize the way he or she wants to either control or perceive the environment". Company's advertising is enhanced by celebrity endorsers, and most of the times celebrity endorsers create a positive feeling in the consumers' minds towards the brands (Solomon, 2002). Consumers' learning approach and memory too are affected by celebrity endorsements and the impact is very strong, which is why this impact acts as a potential trigger to change consumers' perception on a brand and subsequent purchase decisions which, before and in absence of a celebrity getting attached to the brand, do not remain so pronounced. Before the endorsement, consumers might take a message about the brand as a stray and casual one; but after the endorsement, the brand starts registering at the consumer's mind and gets drawn more and more towards it as soon as the advertisement hits yet another time. The brand gets registered in the mental database and when a consumer comes across the brand in a purchasing situation, the instant retrieval of the brand information influences the decision to purchase (Schultz and Brens, 1995). Surana (2008) has argued that the celebrity creates a sense of certainty vis-à-vis a brand since the celebrity becomes a persuasive informer about the brand putting across to the consumer qualities that of expertise, likeability, similarity and trustworthiness. If the endorser is physically attractive, as mentioned above as well, the message is carried across to the consumer in a more effective manner (Khatri, 2006). This is because consumers believe the celebrity as one who could pass on only credible information or information that could be believed (Belch & Belch, 1993). Such endorsements are comprehensively dealt with by principles of balance theory, in which there is a development of this emotional observer-endorser-brand relationship (Mowen, 2000). According to the balance theory in social system, interactions among individuals are characterized by relations, of which sentiment is one of the primary constructs (Wang and Thorngate, 2003). Balance of a social system is established by the existence of overall sentiments as shown by Fritz Heider for the first time in 1946. Heider propounded existence of this balance between the perceiver, an object and another person (Keisler, 1969). In this case perceiver is the consumer, another person is the celebrity endorser and object is the brand. The sentiment could be both positive and negative and that determines why celebrities are chosen over other types of people in endorsing brands. Celebrities fall on the 'likable' side of the balance; so top brands vie for picking the most popular celebrities for endorsements. This is why overall value of the sentiment should be highly positive in creating a fruitful balance between the triad. Greenwald et al (2002) opine that Heider's balance theory dominated 1960s social psychology and is relevant even today. Roozen (2008) has remarked that celebrities are taken as trustworthy communicators since people believe them as "sources of valid assertion". However the fact is of great importance for a consumer to see how "good" or "bad" "fit" is a celebrity for a given brand (Till and Shimp, 1998). A sportsperson of global repute would be an obvious "fit" for an international brand of sports shoes than a fairness cream. A glamorous movie star would definitely be the correct fit for the latter. In all, luxury brands, before they rope in a celebrity endorser, check the process of social influence that endorser-brand relationship will have on consumers. Basil (1996) has argued that celebrity endorser's effectiveness has to be weighed completely before the endorsement has to take off. It is important to see if an individual (which, in this case, would be a consumer) identifies with the endorser. In other words the individual must be either identifying with or accepting the endorser's behavior. When such an association takes place, social influence takes shape of a process of internalization between the endorser and the observer wherein the former's behavior matches the value system of the latter. In such a relationship the latter finds a solution to his or her problem being provided by the former (Daneshvary and Schwer, 2000). But when there is a value mismatch, the endorsement campaigns boomerang. The case of Tag Heuer is a classical example in this regard. Critics have hailed Tag Heuer advertisements as "looking artificial" and models either wearing or displaying watches in a manner so bizarre (Cameron Diaz ad) as if they are wearing the same as knuckle dusters (Celebrityendorsementads.com, n.d.). The company's assertion that it may appear as easy to superimpose the watch that way does not go down well with people who, since centuries, know that watches are ultimately supposed to be worn over wrists than displayed over fingers. Tag Heuer has put millions of dollars into its celebrity campaigns but the bad side of the same has been the luck factor and what could be dubbed as an "unexpected out-of-balance theory" at work. When marketing gurus discuss such points in context, Tiger Woods, the once internationally famous golf professional and now internationally infamous for secret-life revelation and infidelity is linked to Tag Heuer as a matter of quick reflex action. Consumers rewind the endorser's infidelity data quicker than the Tag Heuer wrist watch he once promoted. There are numerous such campaigns which bounced back negatively because the endorsers got shrouded in bad press and negative publicity (Beteau, 2011). Method and approach: Data collection This will be both qualitative as well as quantitative study and the primary information would be collected from a random selection of students from within and outside of the university in the age group of 20-30 years. The students would be from both the genders and all would be fed with questionnaires on luxury brands that are endorsed by celebrities. The number of brands to be discussed would be decided after a preliminary brainstorming through the top 30 brands known nationally and internationally; out of which 15 top brands would be taken up for the development of survey questionnaires. Questionnaire would be developed such that it can establish a link between the results got with respect to these brands to the one which would be the focus on this study. An attempt would be made to select as many numbers of participants for the survey as possible so as to cover a wide spectrum of respondents but in no case should it be less than 400 participants. Questionnaires will be administered to the participants without any external influence. Measures The model that will be followed will use multi-item scales to measure the constructs. In order to measure the questionnaire items, five-point Likert system will be used. These will range from "strongly agree" to "strongly disagree". This will lead to conclusive data on the quantitative side of the study. Help from peer-reviewed journals on management and marketing along with extensive literature review searches will provide insight into the qualitative aspect of the research. Furthermore attitudes towards normal advertisements, advertisements involving celebrities and attitudes towards brands would be measured separately. Pilot studies will be conducted first to measure the reliability of questions in the questionnaire. To calculate the "confidence coefficient", Cronbach method will be used, and value for alpha calculated thereby. This will make sure that the questionnaire which is circulated enjoys necessary reliability and confidentiality. References Agrawal, J. and Kamakura, W.A. (1995), “The economic worth of celebrity endorsers: an event study analysis”, Journal of Marketing, Vol. 59 No. 3, pp. 56-62. Basil, M.D. (1996), “Identification as a mediator of celebrity effects”, Journal of Broadcasting & Electronic Media, Vol. 40, fall, pp. 478-95. Basil, M.D. (1996), “Identification as a mediator of celebrity effects”, Journal of Broadcasting & Electronic Media, Vol. 40, fall, pp. 478-95. Buteau, M. (2011). Tiger Woods Dropped by TAG-Heuer. Bloomberg. Retrieved http://www.bloomberg.com/news/2011-08-08/tiger-woods-dropped-by-tag-heuer-from-watch-endorsement-deal-as-rank-falls.html. Accessed December 02, 2012. Belch, G.E., and Belch, M.A. (1993), “Introduction to Advertising and Promotion: AnIntegrated Marketing Communications Perspective”, Irwin, Homewood, IL. Celebrityendorsementads. com (n.d.). Cameron Diaz, actress, Celebrity Endorsements. Retrieved http://www.celebrityendorsementads.com/celebrity-endorsements/celebrities/cameron-diaz/. Accessed December 02, 2012. Daneshvary, R. and Schwer R.K. (2000), “The association endorsement and consumers intention to purchase”, Journal of Consumer Marketing, Vol. 17 No. 3 2000, pp. 203-213. Erdogan, B.Z., Baker, M.J. and Tagg, S. (2001), “Selecting celebrity endorsers: the practitioner’s perspective”, Journal of Advertising Research, Vol. 41 No. 3, pp. 39-48. Greenwald, Anthony.G, Banaji, Mahzarin.R, Rudman, Laurie.A, Farnharn, Shelly.D, Nosek, Brian.A, and Mellot, Deborah.S. (2002). “A Unified Theory of Implicit Attitudes, Stereotypes, Self-Esteem and Self-Concept”. Psychological Review, 100(1): 3-25. Haghirian, P. and Madlberger, M. (2005), “Consumer attitude toward advertising via mobile devices - an empirical investigation among Austrian users”, in Proceedings of the European Conference on Information Systems, Regensburg, Germany, May 2005. Retrieved is2.lse.ac.uk/asp/aspecis/20050038.pdf. Accessed December 02, 2012. Katyal, S. 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Roozen, I.(2008), “The relative effectiveness of celebrity endorsement for beauty, high- and low involvement product print advertisements”, 7th ed., International Congress “Marketing Trends”, Venetia, Italy, January, p.25. Soloman, M.R (2002), “Conumser Behaviour: Buying, Having and Being”, 5th ed., New Jersey: Prentice Hall. Surana, R. (2008), “The Effectiveness of Celebrity Endorsement in India”, A dissertation presented in part consideration for the degree of MA in Marketing. Till, B.D. and Shimp, T.A. (1998), “Endorsers in advertising: the case of negative celebrity information”, Journal of Advertising, Vol. 27 No. 1, pp. 67-82. White, D.W, Goddard L. and Wilbur, N. (2009), “The effects of negative information transference in the celebrity endorsement relationship”, International Journal of Retail & Distribution Management, Vol. 37 No. 4, pp. 322-335. Wang A(2006). “The Effects of Expert and Consumer Endorsements on Audience Response. J. Advert. Res. 45(04): 402. Zabid AR, Jainthy N, Samsinar MD (2002). “Asia Pacific Management Review. 7(4):78-89 Read More