Impact Of Celebrity Endorsement On Consumer Behavior And Sales Volume Of An Organization

Project and Seminar Material for Marketing

Abstract

This study aims to examine the impact of celebrity endorsement on consumer behavior and sales volume of an organization. Data for this study was collected from the respondents by means of structured questionnaires that were self administered and field surveys through responses to questions in the questionnaire served as the main source of primary data for the study. It is further concluded that the celebrity endorsement has reasonable impact on customers as per their attitude and buying intention. It has also been highlighted that celebrity endorsement advertisements boosting up the sales and purchase of product, people like to buy the products more if endorsed by the celebrity and it shows that today’s customer is aware and influenced by media. The results of this study bring practically important results for marketers to consider when choosing a celebrity for an advertisement.

Chapter One

Introduction

1.1 Background of the Study

In recent years most adverts on television has a celebrity that projects the products or services by way of using the product and with this, has influence on the buyers and customers of these products and services and thus the sales volume of an organization. Basically, a celebrity is described as any famous and influential person that is admired and much spoken about by most people in a society. 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” McCracken (1989). The use of celebrities has been adopted by various organizations in advertising products and services. Celebrity endorsements are now common place in the advertising world. Celebrity endorsements influence brand image through a transfer of meaning from the endorser to the brand. Communication activities establish a pattern of connectivity between the image of the celebrity and the image of the brand. According to Patrick Bishop (2000), a Marketing Expert, “When you get a celebrity to endorse your company or sign licensing agreement, you benefit from customer awareness of the property, which could include the perception of the quality, educational value or a certain image. If a celebrity is endorsing or the business is selling the product of a well-known person or entity, then people assume they must be a good company to deal with.” Both entities represent nodes in a cognitive network,whose connectivity can establish contingency between the two entities (Till, 1998; Till et al., 2008).

Marketers must understand what happens to the buying decision of the customer when the cultural meanings of celebrities are disgraceful. This is because the customer purchasing and using the product endorsed by the celebrity can obtain some of those meanings and use them in constructing a satisfying self- control. This research is specifically on celebrity endorsement and the influences it has on consumer behavior and sales volume of an organization. Customers’ attitudes regarding brands and products are well enhanced by celebrities, but whether it generates repeat purchase intention and brand loyalty is not so clear (Byrne & Whitehead 2003).However, there is no evidence proving that the usage of celebrity endorsement will achieve increase of sales when compared to a non-use of celebrity endorsement. In fact, consumers might pay more attention to celebrities in advertisements than the actual product endorsed, which is not the marketers intention. As in most pampers advertisements, physically attractive celebrities are especially recognized. They might exert a magnetic power to consumers resulting in a behavioural purchase instead of true brand commitment. But whether or not the purchase behaviour will become repetitive is less clear (Byrne & Whitehead, 2003).

1.2 Statement of the Problem

The problem of whether or not celebrity endorsement greatly influences consumer behavior and sales volume has been a cause of worry especially as many organizations use celebrities and still not do too well in terms of sales.

1.3 Objectives of the Study

The following are the aims and objectives of embarking on this study

To examine the impact of celebrity endorsement on consumer behavior.
To examine the impact of celebrity endorsement on sales volume of an organization volume of an organization
To make recommendations on the use of celebrities in the endorsement of products and services.

1.4 Research Questions

Does celebrity endorsement influence consumer behavior towards a particular product or service?
Does celebrity endorsement influence the sales of a product or service?
Are there ways the ways celebrity endorsements influence consumer behavior?

1.5 Research Hypotheses

Ho: there is no significant relationship between celebrity endorsement and sales volume of an organization
Hi: there is a significant relationship between celebrity endorsement and sales volume of an organization
Ho: Celebrity endorsement does not influence consumer behavior
Hi: Celebrity endorsement does not influence consumer behavior

1.6 Significance of the Study

This study would be of immense benefit to organizations who are in a state of dilemma on whether or not to subscribe to celebrity endorsement of its product or service.

The study will also be beneficial to captains of industries, managers and directors of organizations and all relevant stakeholders who are interested in this research.

1.7 Scope / Limitations of the Study

This study is on the impact of celebrity endorsement on consumer behavior and sales volume of an organization.

Limitations of Study

1. Financial constraint

Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

2. Time constraint

The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.8 Definition of Terms

Celebrity:

A famous person or the state of being famous

Endorsement:

A statement made in an advertisement usually by a famous or important person saying that they use and like a particular product.

Consumer:

A person who buys goods or uses services.

Chapter Five

Summary, Conclusion and Recommendations

5.1 Summary of Findings

The objectives of this study were;

To examine the impact of celebrity endorsement on consumer behavior.
To examine the impact of celebrity endorsement on sales volume of an organization volume of an organization.
To make recommendations on the use of celebrities in the endorsement of products and services.

Findings from the study revealed that majority of the respondents are of the opinion that there is a significant relationship between celebrity endorsement and sales volume of an organization and that celebrity endorsement influences consumer behavior.

5.2 Conclusion

This research concluded that the Celebrity endorsed advertisements are more attractive than the non-celebrity endorsed advertisements. Respondents also voted that the best medium for watching the advertisements is TV and then Internet. It is further concluded that the highest relationship existed between the perception and the buying behavior. The lowest relationship is, between celebrity attractiveness and the perception. There is a significant relationship among all attributes of the celebrity. It is finally concluded that there is a significant relationship between celebrity endorsement and buying behavior. Respondents clearly conveyed that they do purchase those products and services, which are endorsed by the celebrities. Results show that the celebrity endorsement has reasonable impact on customers as per their attitude and buying intention. Physical attractiveness, credibility and congruence of the celebrity with the reference to endorsed advertisement all have impact on customer perception about the advertised product. It has also been highlighted that celebrity endorsement advertisements boosting up the sales and purchase of product, people like to buy the products more if endorsed by the celebrity and it shows that today’s customer is aware and influenced by media.

5.3 Recommendations

Celebrity endorsements has changed the way advertising used to be few decades ago. It is been accepted to be a ubiquitous feature of modern day marketing (McCracken 1989). The use of celebrity endorsers in the promotion and the sales of products have much influence on customers of organizations concerned. However, some respondents are not influenced by celebrities in adverts. Celebrity endorsement is an expensive engagement and must be planned carefully in order for firms adopting it to gain profitability. As a result a greater understanding of consumers ‘reactions towards celebrity endorsements can help marketers to use it more effectively. It is important that firms that have tarnished images turn to this sort of promotion because celebrities aid advertisement to effectively stand out from the other surrounding clutter. From managerial perspective, the outcomes of this study bring practically important results for marketers to consider when choosing a celebrity for an advertisement.

The following recommendations are suggested:

Organizations are encouraged to intensify the use of celebrities to promote their products;
Organizations should also critically assess the right personality of celebrities for the promotion of their products;
Organizations involved should conduct cost benefit analysis to be sure if the use of a celebrity is worth the amount to be paid for the services of the celebrity;
Companies should critically assess to see if the use of celebrities is really necessary so as to avoid misallocation of resources.
In order to avoid image change and the corresponding loss of public recognition that is associated with celebrity endorsement, a firm should examine a celebrity’s life cycle stage at the time of the endorsement;
To justify paying heavily for a celebrity endorser firms should select celebrities who enjoy wide audience.

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