Full Project – THE IMPACT OF CELEBRITY ENDORSEMENT ON CONSUMER CHOICE OF PRODUCT

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CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Celebrity branding or celebrity endorsement is a form of advertising campaign or marketing strategy which uses a celebrity’s fame or social status to promote a product, brand or service, or to raise awareness about an issue. Traditionally, the concept of celebrity can be understood as a well-known person recognized by the public and considered a role model for society (McCracken, 1989), due to professional competences or physical appearance (Kahle and Homer, 1985). Very famous actors, models, athletes and singers are all considered celebrities (Friedman and Friedman, 1979). Knowing the influence that celebrities exert over consumers, companies are increasingly investing in their use in advertising, to persuade consumers (McNamara, 2009).

Studies in marketing have been conducted to investigate how celebrity endorsement impacts consumer purchase intentions (Wei and Lu, 2013). Also, several authors have investigated a series of related factors, such as the effect of celebrity endorsement on product recall, the effect of the credibility and expertise of the celebrity endorsement and the effect of celebrity image (Amos et al., 2008).

The use of advertising went through a major phase of change over many years, from classical to modern view. In the modern days, marketers are developing strategies using various appeals including sexual, emotional, humour, etc. (Belch and Belch, 2001). The motive behind formulating such strategies is to gain high brand exposure, attention, interest, desire and action (Belch and Belch, 2001). In order to do this, marketers employ well known and famous personalities in other word celebrities. As McCracken, (1989) stated that celebrities tend to create greater effect on the consumers choice of product. McCracken, (1989) further states that celebrity endorsement advertising is a ubiquitous feature of modern marketing.

According to Silvera and Austad, (2004) Celebrities are people who enjoy public recognition among a large group of people and possess distinctive qualities like attractiveness and trustworthiness. Many big brands have recognised the importance of celebrity endorsements as marketing communication tool (Soderlund, 2003). Celebrity Endorsements is a billion dollar industry in today‘s era. (Kambits et al., 2002). Marketers spend huge amount of money on celebrity endorsement contracts annually (Katyal, 2007) it shows that celebrities play an important role in the advertising industry.

According to Jefkins F. (2000), advertising is a practical affair which differs with marketing; marketing drives products and services to the customers while advertising drives customers to the product or services. Patley, (2004) states that advertising is promotion of goods or services for public and its goal is drawing attention of people and showing favourable light to them.Considering the prices companies are willing to pay and the effect it has on consumers choice of product, celebrity endorsements appears to be a very popular advertising tool in the modern day marketing (McCracken 1989; Belch 2001; Soderlund 2003).

1.2 Statement of the Problem

The exploration of this research topic is motivated by several factors. It seeks to examine whether celebrity endorsement in advertisements works and how it works. It also aims to identify attributes of celebrity endorsers and attributes of celebrity endorsement advertisements that are most appealing to target audience. This research work also seeks to examine audience’s perceptions about how celebrity endorsements in advertisements work. Every advertisement aims to create awareness and arouse interest in the minds of customers. Celebrity Endorsement is one of these power tools by which advertisers try to leverage the image and identification of the celebrity to promote a brand. This makes the advertisement lively, attractive, interesting, but attention getting as well because audience takes the celebrity as a role model and in turn these celebrities impact their lives. Advertisers try to hire such celebrities for endorsement who are not only attractive but credible as well. The all-embracing purpose of this research work is to increase additional concerned of changed factors which are particularly associated to behavior of consumers, brand image, consumer prescription by advertising.

1.3 Objectives of the Study

The Primary objective of this work is to study the impact of celebrity endorsement on consumer choice of product with reference to Seven-Up Bottling Co. Plc., and to examine awareness, appeal and relevance in setting up of the promotional strategies as well as to test the celebrity impact on consumers. Based on this primary objective, other supporting objectives are set as presented below

1. To explore and examine the current state of consumers perception about celebrity endorsements.
2. To examine the impact of celebrity endorsement on choice of product.

3.To analyze the perception of students and professionals about the celebrity endorsement.

4.To find out the relationship between celebrity endorsement and customer choice of product.

5. To analyze that which factor of celebrity attracts more to the public.

1.4 Research Questions

The study seeks to address the following questions;

1. What is the impact of celebrity endorsements on consumers choice of product?
2. To what extent is the relationship between celebrity endorsement and choice of product?
3. What is the relationship among the celebrity attributes?

1.5 Research Hypotheses

The following research hypotheses will be tested for the purpose of this research work:

Hypotheses One

H0: There is no impact of celebrity endorsement on choice of product.

H1: There is an impact of celebrity endorsement on choice of product.

Hypotheses Two

H0: There is no any relationship between celebrity endorsement and choice of product.

H1: There is a relationship between celebrity endorsement and choice of product.

1.6 Significance of the Study

This research work will help firms understanding the importance of celebrity endorsement in advertisement. It will also enable them structure their adverts and brands to make them more appealing in order to influence consumers choice of product. The final aim of every advertising strategy is to instigate the actual behaviour of the targeted audience, whether purchase intention or actual consumption (Sharma et al. 2008). If an advertising strategy fails to achieve the same, the million naira spent are not worth it.

Academically, this research work will be helpful in understanding the perception and attitude of Nigerian consumers towards celebrity endorsements which may reveal some interesting insights and directions for future research. It is also believes that conducting this research work will enhance the valuable personal knowledge of the researcher about the subject and experience for future career applications.

1.7 Scope and Limitations of the Study

The scope of this research work is within the Impact of Celebrity Endorsement on Consumer choice of product with a case study of Seven-Up Bottling Company Plc.

The research project has got three limitations. One is given the unavoidable and that is the limitation of time. The project being a student project needs to be completed within aspecified period set by the University and therefore one compromises can be made in this respect. The second limitation is regarding the availability of financial resources as the researcher being a student, will also be faced by the researcher. Finally, the difficulty faced by the researcher in collecting various questionnaires from respondents. Effort will be made to best possible output by staying within the limited resources of time and finance.

1.8 Definition of Terms

Advertising“is any paid form of non-personal presentation and promotion of goods, services, or ideas by an identified sponsor.”

Advertising Media: – Is the channel through which advertising message is delivered to the target audience: (Example magazine, radio, television), (Stanton, 1981).

Advertising Budget: – “This refer to the total percentage of allocate for advertisement program in the organization it could be annually, quarterly or monthly base” (Kotler and Keller 2005).

Consumer: – “A person who use anything made by the producer” (Miller, 1961).

Consumer Buying Behavior: – is the sum total of a consumer’s attitudes, preferences, intentions, and decisions regarding the consumer’s behavior in the marketplace when purchasing a product or service.

Product: – Anything that can be offered to the market for attention.

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