Why Do Companies Use Celebrity Endorsement?
According to business consultant Martin Roll, endorsement is a marketing channel for communicating a brand through a celebrity spokesperson. A communication channel is any means through which a company communicates its offerings to consumers.
Celebrity endorsement is a promotional tool that boosts brand awareness. It is a way of enhancing credibility and gaining visibility for brands. Celebrities are well-known people and a celebrity endorsement can make a brand stand out. Many companies have successfully leveraged celebrity endorsements to result in increased business.
Typically, celebrity endorsement is associated with large companies. Increasingly, smaller and lesser known companies are reaching out to celebrity influence’s to promote their brands. Celebrity endorsement builds credibility and can expose a brand to new markets.
The celebrity effect is the ability of famous people to influence others. Companies can use that star power and influence to boost their own products and services. Celebrities can add credibility and glamour to a brand.
How Does Celebrity Endorsement Influence Consumers Purchasing?
Celebrity endorsement is the promotion of a product or service by a celebrity. For example, a professional athlete might endorse a specific brand of athletic footwear. That athlete would then appear in commercials advertising that particular footwear. They would also wear that brand of footwear during matches or games. This is a classic example of celebrity advertisement.
Nike is well known for celebrity endorsements of athletic footwear. They have had multiple successful celebrity endorsement campaigns. Whether it is basketball or golf, Nike has seen considerable gains from endorsements from athletes such as Michael Jordan and Tiger Woods.
Celebrity endorsements are powerful in part because of large celebrity networks. Celebrities are able to reach a lot of people through different mediums. Celebrities can reach people through television, traditional media and also social media. The other major reason they are so powerful is because of the celebrity effect.
With investments in Bumble and Holberton School, Priyanka Chopra is a regular on the investor circuit
Deepika Padukone invested in health food brand Epigamia, while Hrithik Roshan has backed Cultfit.
The most recent instance was Aishwarya Rai Bachchan’s investment in Ambee
Investors from the glamorous world of Bollywood are doing their bit for the startup ecosystems. However, beyond being brand ambassadors, Bollywood celebrities have also taken turns in betting on startups in various sectors. While some have taken turns to be investors, some others have started up their own businesses as well.
The trend is not a surprise. Over the last few years, Hollywood celebrities including the likes of Ashton Kutcher, Snoop Dogg, Nas, Jay-Z, Justin Timberlake, among others, have shown off their penchant for tech by backing various startups.
In India, the trend of startup investments began quite some time back. From Amitabh Bachchan to Rani Mukherjee, the next generation of celebrity-turned-investor has names such as Priyanka Chopra, Deepika Padukone and more.
Bollywood actress Deepika Padukone began her investor journey with a multi-crore strategic partnership with Mumbai-based FMCG health-food brand Epigamia. The investment by Padukone comes as an extension of the recently closed Series C round of funding led by Verlinvest, Danone Manifesto Ventures, and DSG Consumer Partners.
Epigamia was launched in 2015 by Rohan Mirchandani, Uday Thakker, Ganesh Krishnamoorthy, and Rahul Jain as a Greek yoghurt brand and expanded its portfolio to include artisanal curd, snack packs, Indian sweets, and smoothies.
Rohan Mirchandani, cofounder, Epigamia said the actress’s massive appeal aligns with the health-conscious youth of India that the brand is hoping to reach. “Our shared set of core values and beliefs is what drew us together and this bonding principle, along with Deepika’s involvement in our products and brand, will be extremely valuable for us,” he said.
Do Indian stars change your interest toward the product when you see advertisements?
There are 10% male and 12% female strongly agree that Indian stars change interest toward the product and
22% male and 12% female less agree. While 35% male and 20 female respond interest change does not toward product that introduced by Indian stars.
The term ‘celebrity’ refers to a famous person. These famous persons are mostly associated with sports and entertainment fields. When any company or manufacturer uses celebrity fame in advertisement to promote a product or service, it is called celebrity endorsement.
A person may become celebrity by their controversial actions, lifestyle, richness, and connection to a famous person,through media attention
Celebrity endorsement is the most popular way of advertising in present times.
It has a very popular trend and winning formula for marketing and brand building.
Today we see a lot of celebrities supporting and endorsing many products and telling that this is right product for consumer / customer. In the new age people tend to ignore all kind of advertisements in the magazines and newspapers or
television. But thereafter, the glamour of a celebrity can’t be ignored. So using
celebrity in advertisement is the most successful tool for keeping the customers to stay with the product.
People are also attracted by celebrity living style, beauty and talent; therefore people are more influenced by celebrity. Advertisers often use celebrities in advertising because of their famous attributes (beauty, talent, athleticism, power, etc.) that often represent the attractions desired for the brands they endorse. In fact celebrities are the most influential icons that people admire.
Among the most common reasons why companies use celebrities to endorse their products, are- increased attention, shining image, brand introduction, brand
Advertisers pay a lot of amount to celebrities and hope they will create magic tothe product and service and make them successful. So advertisers think that this is the most successful idea to impress people and make them aware of their product.
Furthermore, consumers may like the brand because they like the celebrity who endorses it.
The history of celebrity endorsement of products began from 1760 by
“Wedgwood”. “Murad Cigarettes” used Fatty Arbuckle and Harry Bulger to promote its product in 1905 (Celebrity Endorsement–Throughout the Ages,
British actress “Lillie Langtry” appeared on package of Pears soap in 1893.
And she became the first celebrity endorser. Celebrity endorsement is using a well-known person’s face.The importance of using a credible source in a company marketing communications has been a widely researched topic for decades. This research has focused on celebrity endorsers.
Concepts of Celebrity.
Celebrities indicate popular fame and public attention in the media. It is usually applied to a person or group of people or occasionally, to animals or fictional
entities. Celebrity status is often associated with wealth and fame and can often provide opportunities to make money.
“Celebrity” refers to an individual who is known to the public (actor, sports figure, entertainer, etc.) for achievements in areas other than that of the product class endorsed.
“Celebrity is an omnipresent feature of society, blazing lasting impressions in the memories of all who cross its path”. In words of Banyte et al. (2011), Celebrity endorsement is a prevailing advertising technique.
Communicators are more successful in changing beliefs than are unattractive communicators.
Receivers may perceive in an endorser like personality properties, lifestyle, athletic prowess and other good character. In modern era, people are eager to attraction and so most advertisements use attractive models.
Credibility- The word “credibility” refers to the tendency to believe or trust someone. When an information source such as an endorser, is perceived as credible the source can change attitudes through a psychological process.
Two important qualities of endorser credibility are expertise and trustworthiness. Expertise refers to the knowledge, experience or skills an endorser as they relate to the communications topic.
Hence, sport persons considered to be experts when it comes to the endorsement of those products which are related to sports. Trustworthiness refers to the integrity and honesty of a source.
Endorser’s trustworthiness depends primarily on the audience’s perception
of his or her endorsement motivations. Trustworthiness can turn customer’s perception in to positive thought and promotes more favorable attitudes towards the advertised brand.
What factors motivate you when you purchase a product?
More than 30% male and female purchase product due to latest trend, 20% male and 25% purchase that famous star endorse the product. While, less price and quality respond ratio is equal
As a general rule, marketing and promotion of any product and service is a battle for eyeballs, and firms have to strike the right combination of the two. Any company that does not listen to the market requirements of its customers is unlikely to succeed. Fmcg/Telecom companies are no different.
In spite of Indian telecom and film industries not developing a value-added partnership in all these years, Indian film content has reached the global market, through wireless telecommunication network. This is in part because India produces the largest number of films in the world – around 2,000 motion pictures per year compared to less than 1,000 in Hollywood.
Ever wondered why the Board of Cricket Control of India (BCCI) became one of the richest and most powerful sport administrative bodies in the world? It is because India has a population of 1.3 billion, and hence 1.3 billion pairs of potential eyeballs for watching cricket on television.
We are the largest cricket-watching market segment in the world, and the BCCI, owning the content broadcasting rights to 1.3 billion pairs of eyeballs, will always call the shots on how the game’s shows are run in the world. Of course, it helps that we play good cricket. But even when our playing prowess was below par compared to nations such as England, the BCCI was still the most powerful governing body among all cricket-playing countries. This is the power of eyeballs.
Remember the days when shampoo bottles endorsed by film stars were affordable only to the elite high-income earners on the top end of the pyramid? Then, the late Prof CK Prahlad taught Indian consumer goods manufacturing companies about the power of the lower end of the pyramid, where there is a much larger market.
Shampoo and other fast-moving consumer goods, such as packaged foods, started arriving in smaller quantities in Rs-5 satchels, and everyone from coolies on the street to the richest in the society could use the same product – either from the Rs-5 satchel or the Rs-500 full bottle.
As legendary consultant and author Prof Peter Ducker said “Marketing and innovation are the only two entities in a business that add any value, everything else is cost”, the innovation through telecom-film industry partnership could make India the superpower of the world market of content, since we already have the richest, the most diverse and the most colorful cultural fabric on the planet.
For product innovation in content, India has already become the “go-to place” for film producers across the world, in technology-driven areas such as computer graphics, animations, virtual reality contents for films and interactive film story-based game products.
Many of the ancillary content products of a film, such as the Batman game, have shelf life beyond the box office days of the film, and through continuous innovation, these products could well become a bigger product than the original film itself.
In a Mobile First World, how can Fmcg and Film Stars grow their business?
With India having one of the lowest film screen density in the world – around 10 screen per million people compared to Unites State America’s 124 and China’s 90 film screens per million people, the so-called stars could manipulate and control the value chain structure.
The mother of all disruptions is about to take place in both the conventional film industry and the telecommunication industry.
The new India belongs to young innovators and dreamers, and disruption is the norm in any growth industry.
The panic merchants will be replaced by dream merchants and good storytellers will be propelled into the world market with various forms of India’s rich content.
The traditional custodians of the telecom and film content industries need to de-familiarize themselves with the comfort zone of their respective industry symmetry.
Covert Advertising (Advertising in Movies) – Covert advertising is a different kind of advertising. A product or a brand is visible/show in some entertainment activity and television channels like movies, television shows or sports.
This type of advertising is not commercial advertising as such use in the entertainment but the brand or the product is easily showcased in the entertainment show. For example ‘Nokia Lumia’ mobile phone was shown by ‘Shahrukh Khan’ in the movie ‘Chennai Express’.
An another example of covert advertising, In movie ‘Mission Istanbul’ in
which ‘Mountain Dew’ soft drink was promoted with a punch line “Darr ke aagey jeet hain”.
Advertisers promote their product as celebrity choice.
Every time we see this ad while watching a movie.
Many people do not watch movies.
Many viewers don’t understand it is promotion or something else.
Limited area approach
A product endorsement indicates that someone likes or approves a product.
Generally, product endorsements are requested from people who are very well
known, allowing companies to advertise their products with statements as used by
an actor or an actress.
The idea of product endorsement is quite ancient. For example- many companies
have been advertising themselves as by appointment to the England royal family
since a long time, At the time of purchasing a product, consumers are often
imagining who endorses it, wealthy or famous person.
The consumer wants to become affiliated to the person who endorses it.
Modern product endorsements can come with contracts worth substantial amounts of money.
Product endorsement doesn’t say that a product is always good. It only means
that the company has engaged with a big name for his work its public relations.
Some endorsements take the form of written testimonials, where individuals write
about how the product makes changes in daily lives. Earlier, such testimonials were often printed on the product packaging directly. Companies also use photographs of well-known people on their products to make a visual connection between the endorser and the product.
Four Types of Endorsements:
Explicit (person endorses the product)
Implicit (person uses the product)
Imperative (person impel the product)
Co presentational (merely appearing with the product)
The term ‘celebrity’ refers to a famous person.These famous persons are mostly
associated with sports and entertainment fields. When any company or
manufacturer uses celebrity fame in advertisement to promote a product or
service, it is called celebrity endorsement. A person may become celebrity by
their controversial actions, lifestyle, richness, and connection to a famous person,
through media attention.
Do you think Indian famous stars in advertisements are good factor?
However graph represents that majority of respondents agree that famous star an important factor in ads especially they like the Indian film industry famous stars.
Do Celebrity Endorsements Increase FMCG Sales?
Celebrity endorsements and branding can significantly increase sales. Signing a celebrity endorsement can cause the value of stocks to rise and increase sales by about 4 percent, according to Social Media Week. Social media has been a major factor recently in driving product sales. That is in large part because social media can provide curated glimpses into the daily lives of celebrities.
Nike is a great example of using celebrity endorsements to boost sales. The 1984 Nike Air Jordan campaign was one of the most successful celebrity endorsements in history. 25 years later in 2009, the Nike Jordan brand dominated 75 percent of basketball shoe sales and 10.8 percent of overall shoe sales in the United States.
Why Do Advertisers Use Celebrities to Endorse FMCG Products?
Celebrity advertisement drives the sales of many products. These days, a celebrity advertisement can tap into the social media following of celebrities. That is direct access to thousands of eyes for a product in addition to the credibility of a celebrity endorsement. Social media is especially useful in reaching younger generations.
Social media offers a glimpse into the lives of celebrities. The celebrity effect of seeing a star using a product on social media can thrust a brand into the limelight overnight. That is why so many brands are clamoring to promote their products through celebrity advertisement.
Celebrities are familiar faces that we associate with familiar characteristics. People are inclined to trust a recommendation or endorsement from a known public figure. We feel like we personally know celebrities and we trust them.
Why the Fmcg goods consumer is sometimes fickle in their choice?
A recent study magnifies that celebrity endorsement is not always significant in influencing and its undertaken factors such as brand positioning, brand Communication, identity, brand equity, brand awareness, brand image and brand personality in case of Indian small towns.
Since FMCG’s are low involvement products, celebrities do influence the attitude of consumers towards brand but as the rural consumer is different from urban consumers in terms of their lifestyles and the kind of choices they made is also endorsement on Rural and Urban areas with different from urban consumers.
Therefore celebrity reference to FMCG endorsement does not guarantee for sales. The results are frequently inconsistent wherein consumers might have a favorable disposition towards celebrities, but it does not necessarily always translate into purchase intentions.
Consumer perception in Product & Brand and behavior is not affected by celebrity endorsement Results indicate that there is a need to rethink about practicing celebrity endorsement in Indian small towns.