Celebrity Endorsements in Advertising

Celebrity Endorsements in Advertising Celebrity endorsements Abstract The use of celebrity endorsements is becoming increasing popular amongst organisations to aid in advertising their brand in order to gain a competitive advantage. The use of celebrity endorsements are a means of creating awareness of the brand advertised. This investigations main purpose is to explore the influences that celebrity endorsements have on the consumers motivation to purchase, in particular focusing on sports celebrities. Celebrity endorsement have become a widely recognised form of advertising, however there is still some doubt as to whether celebrity endorsements are an effective technique in influencing consumers to purchase. This investigation will conduct essential research by critically analysing the academic literature, whilst undertaking further primary research to establish a broader insight into celebrity endorsement. Findings from the primary research will be analysed and discussed, finally a conclusion will evaluate primary research against the literature review. Introduction The author will present a general understanding of the topic, in the first chapter. Furthermore, the author will also present the problem area, which this study will be based on, followed by the purpose and outline of the study. Nature of the Topic This report will illustrate relevant research and theories on celebrity endorsement and how they are becoming an attractive tool within advertising. The central point of this investigation will focus on whether celebrity endorsement has an impact on consumers motivation to purchase, and will be primarily looking at sports celebrities. This investigation will emphasis on the use of sporting celebrities in advertisements as they have achieved their celebrity status through sporting success as opposed to it being either ascribed or attributed Achieved celebrity derives from the perceived accomplishments of the individual in open competition In the public realm they are recognised as individuals who possess rare talents or skills. (Rojek, 2001) According to industry sources, approximately 20% of all television commercials feature a famous person, and approximately 10% of the dollars spent on television advertising are used in celebrity endorsement advertisements (Sherman, 1985 cited in Agrawal and Kamakura, 1995). Premeaux (2005 cited in Bailey, 2007) suggests the reason why this figure is so high is the ability of the celebrity endorser to get and hold attention with evidence of the positive impact of celebrity endorsers on brand recall. Freiden (1984) concluded that celebrities are particularly effective endorsers because they are viewed as highly trustworthy, believable, persuasive, and likeable. Although celebrities are an increasingly popular tool in advertising, what impact do they have on consumers attitudes? It is the aim of this study to outline whether celebrities have an effect on consumer purchasing behaviour. To investigate this issue, many key areas of celebrity endorsement need to be researched, including consumer buyer behaviour, the effects celebrity endorsements have had on organisations and consumer attitudes in the past, whilst also assessing possible advantages and disadvantages of using celebrity endorsements in promotion techniques. Rationale for Selecting Topic The initial reason this topic was chosen to research was that the author has a particular interest in this aspect of marketing, and how celebrities are becoming an increasingly attractive tool for organisation to promote their brand and how this technique motivates consumers to purchase. Therefore the rationale as to why I chose this topic area is that it is a current and contemporary issue of marketers. It is a marketing communication tool that is used widely across western culture thus being relevant and significant in todays market. Objectives For this investigation, the author has specific aims that include: To reveal whether celebrity endorsements effect consumers purchasing decisions and to what extent. To examine within the literature review the influence of celebrity endorsers compared with normal people. To carry out appropriate research methodology based on the review of literature that will establish whether celebrity endorsements are successful in motivating consumer purchasing behaviour. To analyse findings and conclude whether celebrities do influence consumers motivation to purchase. Structure Chapter Two Literature Review The review of literature will examine past theories and research on celebrity endorsements, outlining relevant areas involving; consumer buyer behaviour, celebrity versus non-celebrity advertising, key attributes organisation require in an endorser and benefits and limitations of using this communication technique. Chapter Three Methodology This chapter will examine both primary and secondary research methods that have been utilised in this study to enable the author to meet the specified aims and objectives. Additionally advantages and disadvantages of each method will be justified Chapter Four Findings, Analysis and Discussion This section will show the results obtained from primary data, which will be analysed and evaluated against theoretical research presented within the literature review. Chapter Five Conclusion This chapter will interpret and evaluate the findings from primary research conducted in conjunction with academic literature. The conclusion will draw deductions on whether celebrity endorsements do influence consumers motivation to purchase. Literature Review This chapter seeks to explore the most crucial attributes that is mostly associated with celebrity endorsement strategy. This in turn, to apply the following attributes in the methodology part of the study. Introduction The aim of this literature review is to give a comprehensive discussion of the range of theories which offer frameworks to aid in answering the research questions in relation to the effects sports celebrity endorsements have on consumer buyer behaviour. Theories are chosen within this chapter as those which form the core of consumer behaviour theory relating to the marketing principles. In particular literature is explored which examines the influence of sports celebrities in advertising products/brands. One way of perceiving marketing is the achievement of business goals through anticipating, meeting and satisfying consumer needs (Blackwell, Miniard and Engel, 2001). Unsurprisingly markets must conduct consumer behaviour research in order to understand their target customer better than other competition and as a result of this it will allow strategic marketing mixes to work more effectively for organisations (Jobber, 2001). Recent studies maintain that attracting new customers has a much higher cost than the retention of existing ones for an organisation thus companies must build up efficient and effective communications with both existing and potential consumers through its marketing mix strategy. As a result below-the-line promotions have established themselves as a major element of the marketing mix, with advertising traditionally being the dominant communication tool for organisations (Lanman, 2003). In terms of using sports celebrity endorsements in advertising, it is often used in advertising that strongly depends on a strong brand image from a social perception. Celebrities can be seen as a useful force in expressing the brand characteristics to consumers in a direct way. However Solomon, Bamossy, Askegaard and Hogg (2010) state that consumer behaviour is dynamic, meaning the entire purchasing decision process is complex. Customers will be influenced by various factors such as reference groups, social effects as well as local cultural factors, these aspects impact on the way in which a consumer will make decisions. Therefore it is important that marketers carry out consumer research and analysis to be aware of important trends and evaluate these aspects. Due to the characteristics related to the purchasing process, this literature review will focus on individual buying behaviour in relation to sports celebrity endorsement. Defining Celebrity Endorsement Marketers usually use individuals who have achieved some form of celebrity status to serve as a spokesperson for their brand. Most celebrities that are hired by an organisation to endorse their product or brand are popular people, television stars, movie actors or famous athletes (Shimp, 2007). Furthermore, when an organisation decides to use an endorsement strategy as their marketing communication method, one of the main focuses lies within exposing the brand (Kotler, Armstrong, Wong and Saunders, 2008). The use of a celebrity endorser can be seen as the source of a message the company wishes to expose to their target audience. According to Belch and Belch (2009), the term source, when talking about the involvement in communicating a marketing message, can occur either be directly or indirectly. Directly can be the celebrity who functions as a spokesperson for the brand and sends out information that the company desires to deliver to their target audience. Alternatively indirectly is when a celebrity does not send the message but draws attention to and/or enhance the appearance of the advertisement. The marketer must select a celebrity that has a good fit with the brand, that is intended to be exposed (Pringle, 2004). Using sports figures as product endorsers has also been shown to be an effective marketing strategy. Endorsement is the use of a sport celebrity by a company to sell or enhance the image of the company, product, or brand. Product endorsement using sport celebrities has been found to impact attitude toward an advertisement (Tripp, Jensen and Carlson, 1994), increase the likelihood of consumers choosing a product or brand (Kahle and Homer, 1985; Kamins, Brand, Hoeke and Moe, 1989), and increase the profitability of a firm (Agrawal and Kamakura, 1995). Product endorsements may be explicit (I endorse this product) or implicit (I use this product) (Seno and Lukas, 2005). The use of athlete endorsements provides an opportunity for companies to associate with attributes not found in other types of celebrities. More specifically, winning, success, teamwork, and community are associations an athlete may offer that other forms of celebrity may not (Jones, Bee, Burton and Kahle, 2004). When an organisation decides to use a celebrity in their endorsement strategy, there are three important source factors that need to be considered, these include; source-credibility, source-attractiveness and source-power (Belch and Belch, 2009). These attributes will be discussed in section 1.8. Consumer Purchasing Process and Motivation As Individuals consumers usually purchase products or services for personal consumption either for private purposes, domestic or a gift means, these can be defined as end users. Blackwell et al (2001) defines the initial step in the consumer decision process as need arousal in relation to the emotional and psychological needs relevant to the individual consumer, this occurs when an individual senses a difference between what they perceive to be the ideal versus the actual state of affairs. However the degree in which a consumer will actively search to resolve need deficiency relies on the perceived importance of the problem and the distinction between desired and current state. If problem recognition is high then information search and evaluation of alternative options are two potential further stages in the process. Motivation occurs when there is a strong desire or need for a particular product or brand that the consumer wishes to satisfy (Foxall, Goldsmith and Brown, 1998). A seri es of stages must be passed through before an ultimate decision is made whether to purchase or not, during this process a brand choice will be made. Branding strategies used by organisations should be aware of factors that may effect an individuals motivation with regards to needs satisfaction when obtaining products/brands through the initial stages of the consumer decision making process. One determinant of the extent a consumer will evaluate a brand is the involvement the product entails; high involvement decisions means there is a need for extensive evaluation and information search (Hawkins et al, 1992). Price is frequently seen as a main indicator of involvement level as individuals spend increasingly more time searching and comparing information and prices. Whereas Schiffman and Kanuk (2009) claim that customer satisfaction depends on the product or service matching consumer expectations. It has been suggested that each member of the household has definable roles within the decision making process which includes: initiator or gatekeeper, influencer, decider, buyer and user (Blackwell et al, 2006 pp. 486). It is unsurprisin g that organisations pursue branding strategies that incorporate reference group influences such as celebrities to create a specific brand image for the consumer. Popularity of Celebrity Endorsement 235 Celebrity advertising has become increasingly popular amongst organisations with the attempt to get consumers to spend. McCracken (1989) recognised that celebrity endorsement is a ubiquitous feature of modern marketing. The number of organisations now using celebrities in their advertising has increased, as according to Stephens and Rice (1998) In the USA, the use of celebrity endorsers have increased from a little over 15 percent to approximately 25 percent of all adverts between 1979 and 1997. However the celebrity heat is even more evident in Japan with around 70 percent of Japanese commercials featuring a celebrity (Kilburn, 1998). Erdogan et al (2001) highlights the rise of celebrity endorsement in the United Kingdom with approximately one in five marketing programs featuring some type of celebrity endorsement. These figures demonstrate the prevalence of the celebrity appeal as a method of persuasive communication (Hsu and McDonald, 2002). Atkin and Block (1983) claim two fundamental reasons why celebrities are increasingly utilised within advertising. Firstly, celebrities are more efficient at attracting attention to an advertisement in the cluttered stream of messages in which consumers are inundated with advertising messages and secondly, celebrities are perceived as more entertaining and seen as trustworthy because of apparent lack of self-interest. Although the number of advertising featuring celebrities has increased and it seems inevitable that it will in the future, there is still a question of whether celebrity endorsement has an impact on consumers behaviour. This topic will be examined further during the next section. Celebrity Adverts Effectiveness in Relation to Consumer Behaviour 430 OGuinn et al (2008 pp 9) states that advertising plays a pivotal role in world commerce and in the way consumers experience and live their lives as it is part of our language and our culture. Advertising is important part of the decision making process as it enables the consumer to learn about products and the availability of that product, if advertising did not exist, consumers would not be aware of any new products on the market. According to McCracken (1989) a consumers are constantly moving symbolic properties out of consumer goods into their lives to construct aspects of self and world. Consumers face various adverts that try to impact the way in which we behave as a consumer. It is imperative that marketers have advertising campaigns that capture the attention of their target market in order to impact on behaviour. This provides an important incentive to use sports celebrities as part of their advertising promotion as celebrities attract consumers attention with their appealing status which organisation feel will benefit the products awareness (Erdogan, 1999). OGuinn et al (2008 pp 349) describes that a celebrity testimonial will increase the adverts ability to attract attention and produce a desire in receivers attempting to emulate or imitate the celebrities in which they admire. Additionally Atkin and Black (1983) emphasize that celebrity endorsers may be influential as celebrity endorsers are considered to be highly dynamic, with attractive and engaging personal qualities. Audiences may also trust the advice provided by some famous persons, and in certain cases celebrities may even be perceived as competent to discuss the product. It is essential that marketers select an appropriate spokesperson to communicate the message of the brand to consumers effectively, as if a celebrity is chosen that is not admired or relatable to the target market this will hinder the advertisements effectiveness. However Assael (1984 cited in Kamins, 1990) suggests that celebrities are effective endorsers because of their symbolic aspirational reference group association. In addition, Kamins (1990) argues that reference groups provide points of comparison through which the consumer may evaluate attitudes and behaviour. Reference groups vary in how consumers perceive their own characteristics and lifestyles, and whether such celebrity advertising may generate these attitudes and behaviour. Schiffman and Kanuk (2004) believes that sports celebrities can be a powerful force in creating interest or actions with regard to purchasing or using selected goods or services. However Foxall and Goldsmith (1998) believe that a celebrity endorsement does not create a strong pre-purchase attitude but can impact and cause change in the consumers perception process. The complexity of consumer buying behaviour is coordinated with a complexity in assessing the effect of sports celebrity advertising on such behaviour Celebrity Vs Non-Celebrity Endorsement 232 Few studies have compared the impact of celebrity advertising with non-celebrity advertising in determining their effectiveness on consumer behaviour. An investigation conducted by Friedman et al (1977) that used advertisements with celebrities and non-celebrities for a fictitious brand of sangria. They found that the celebrity version of the advertisement had higher rates on the dependant variables; probable taste, advertising believability and purchase intention, compared to the non-celebrity version. Additionally, a study done by Gardner and Schuman (1986) revealed that fifty-three percent of respondents reported that sponsorship (endorsements) increases the likelihood of brand purchase. Agrawal and Kamukura (1995) found that on average firms announcing contracts with celebrities experienced a gain of 44 percent in excess returns. Also a study by Atkin and Block (1983) emphasised that advertisements that had celebrities appearing in them had more positive effects on consumers than those with non-celebrities. Previous research indicated the importance celebrity endorsements have on consumer behaviour. Atkin and Block (1983) consider that the effectiveness of celebrity endorsement is due to the fact consumers believe that the celebrity does not really work for the endorsement fee, but are motivated by genuine affection for the product. Moreover, Tripp et al (1994) showed that the number of exposures to a celebrity advertisement negatively influenced consumers intention to purchase. For an advertisement campaign to have the desired effectiveness on consumers behaviour, the selected celebrity must have certain attributes to attract and retain the consumers attention. Vital Attributes of a Celebrity Endorser 66 Marketers try to select individuals whose traits will maximise message influence. The source may be knowledgeable, popular, and/or physically attractive; typifying the target audience; or have the power to reward or punish the receiver in some manner. Kelman (1961) developed three basic categories of source attributes: credibility, attractiveness and power. Each influences the recipients attitudes or behaviour through a different process (Belch and Belch, 2009). Source Attributes and Receiver Processing Model (Belch and Belch, 2009) Credibility 352 Credibility is the extent to which the receiver sees the source as having relevant knowledge, skills experience and trust to give unbiased and objective information (Byrne et al, 2003). Source credibility is used to imply a communicators positive characteristics that will affect the receivers acceptance of a message (Ohanian, 1990). It can be assumed that a communicator (celebrity) can be perceived as knowledgeable and a person with expertise. Furthermore the source needs to be trustworthy, honest, ethical and believable (Belch and Belch, 2009). These two attributes, which a celebrity must have to be a successful endorser in an advertising campaign, are discussed more in-depth below. Expertise: Belch and Belch (2009) states that a spokesperson is often chosen because of their knowledge, experience, and expertise in a particular product or service area. Ohanian (1990, cited in Belch and Belch, 2009) found that the perceived expertise of celebrity endorsers was more important in explaining purchase intentions than their attractiveness or trustworthiness. Ohanian also suggests that the celebrity spokespeople are more effective when they are knowledgeable, experienced and qualified to talk about the product they are endorsing. Source expertise in persuasive communication, indicates generally that the sources perceived expertise has a positive impact on attitude change (Horai et al, 1974). Trustworthiness: In comparison to expertise, a celebrity needs to be trustworthy when endorsing a product or service. This is based on how honest the celebrity is about what they say concerning the brand (Schiffman and Kanuk, 2009). Additionally, Belch and Belch (2009) argues that while expertise is important, the target audience must also find the source (celebrity) believable. Ohanian (1990) maintains that when a celebrity is perceived more trustworthy, the message will be more effective and the receiver will be more integrated. Thus, trustworthiness is the degree of confidence in the communicators intentions to communicate the assertions they consider being most valid (Ohanian, 1990). Belch and Belch (2009, Pp 179) argues that information from a credible source influences beliefs, opinions, attitudes and behaviour through a process called internalisation which occurs when the receiver adopts the opinion of the credible communicator since they believe information from the source is accurate. Once the receiver internalises an opinion or attitude, it become integrated into their belief system and may be maintained even after the source of the message is forgotten. Attractiveness 352 Ohanian (1990) suggests that physical attractiveness is an important cue in an individuals initial judgement of another person. Source attractiveness is related to physical attributes such as: Similarity, Likability and Familiarity (Belch and Belch, 2009). Similarity is a supposed resemblance between the source and the receiver of the message, while familiarity refers to the knowledge of the source through exposure. Likability is affection for the source as a result of physical appearance, behaviour or other personality traits (Belch and Belch, 2009 pp 182). Source attractiveness leads to persuasion through a process of identification whereby the receiver is motivated to seek some type of relationship with the source (celebrity) and thus adopts similar beliefs, attitudes, preferences, or behaviour. Further more if the source (celebrity) changes position, the receiver may also change (Belch and Belch, 2009 pp 182). Marketers acknowledge that receivers of persuasive communications are more likely to attend to and identify with individuals they find likable or similar to themselves. The three attributes similarity, likability and familiarity are explored in more detail below. Similarity: In terms of similarity, Belch and Belch (2009) claims that individuals are more likely to be influenced by a message coming from someone with whom they feel a sense of similarity. If the communicator (celebrity) and receiver have similar needs, goals, interests and lifestyles, the position advocated by the source is better understood and received. Likability: Marketers recognise the value of using spokespeople who are admired: TV and movie stars, athletes, musicians, and other popular figures. Marketers believe that the use of a popular celebrity will favourably influence consumers feeling, attitudes and purchase behaviour. However the company must consider a number of factors when deciding to use a celebrity spokesperson such as over-shadowing the product/brand, being overexposed and the target audiences receptivity and risks to the advertiser (Belch and Belch, 2009) Familiarity: In the celebrity endorsement context, familiarity has been defined as knowledge of the source through exposure (Erdogan, 1999 pp 299). According to Belch and Belch (2009) familiarity can be considered as the level of knowledge a celebrity possess of a brand. When an organisation considers choosing a celebrity for their advertising campaign, they need to analyse the previous knowledge a celebrity has or how they will utilise their knowledge in the exposure stage. Power 103 The final characteristic Kelmans classification is source power. A source has the power when they can actually administer reward or punishment to the receiver. When a receiver perceives a source as having power, the influence process occurs through compliance. The receiver accepts the persuasive influence of the source and acquiesces to their position in hope of obtaining a favourable reaction or avoiding punishment. However the power source characteristic is very difficult to apply in a non-personal influence situation such as advertising. A communicator in an advert cannot apply any sanctions to the receiver or determine whether compliance has occurred (Belch and Belch, 2009) Match-Up Theory 256 From the literature it has become evident that a spokesperson interacts with the type of brand being promoted. According to Friedman and Friedman (1979 cited in Atkin and Block, 1983), a celebrity spokesperson is more effective for products high in psychological or social risks relative to a normal spokesperson; such elements include good taste, self image and opinion of others. Various research investigations have explored the congruency between celebrity endorsers and brands to examine the effectiveness of using celebrities to advertise products/brands. (E.g. Marin, 1996; Till and Busler, 1998; Till and Shimp, 1998). Results have revealed that a number of celebrity endorsement have shown to be very successful whereas others have completely failed, this results in the termination of the respective celebrity communicator (Walker, 1992). However, assuming that an individual just has to be famous to represent a successful spokesperson would be incorrect (Solomon, 2008). The match-up theory suggests that the effectiveness depends on the appropriate match between an endorser and the product/brand (Till and Busler, 1998). Empirical studies on the congruency theory frequently focus on the physical attractiveness of the celebrity endorser (Till and Busler, 1998). According to Kahle and Homer (1985) attractive sources are more effective in terms of attitude change when advertising brands that enhance individuals attractiveness. Although Ohanian (1991) recognises a popular individuals ability to create awareness and initiate desire for an advertisement, Ohanian concludes that this may not necessarily change consumers attitude toward the endorsed brand and that for a celebrity spokesperson to be truly effective, they should be knowledgeable, experienced and qualified to talk about the product. A deeper insight in the complex process of celebrity endorsement is provided by the meaning transfer model, this will be discussed in section 1.12. . Fit Factor 112 The determinant of the match between celebrity and brand depends on the degree of perceived fit between brand (brand name, attributes) and celebrity image (Misra and Beatty, 1990 cited in Erdogan, 1999). Miisra and Beatty (1990) suggest that when a celebrity endorsers a brand, the characteristics of that celebrity may be compared with the advertised attributes of the brand by the audience for congruence or fit with their available person-schema. The degree of congruence between the new information (the brand attributes) and the existing information (the celebritys characteristics) may then influence the level of recall of the new information. Numerous investigation in social cognition have discovered that usually congruent information is remembered better that information incongruent or irrelevant with existing schemas (Cantor and Mischel, 1979; Cohen, 1981; Taylor and Cracker, 1981) Balance Theory 234 This theory works within the framework of cognitive consistency, a principle stating that consumers value harmony among their thoughts and that they are motivated to reconcile incongruent thoughts. The evaluation of an object is affected by how the evaluation will fit with other related attitudes held by the consumer. Thus, balance theory is useful in explaining attitude formation and attitude change. Balance theory (Heider, 1958 cited in Dean, 2002) considers relations among objects the consumer may perceive belong together, linked by association, proximity, similarity, ownership, or common fate. A balance theory explanation of endorsement suggests three elements linked in a triangular relationship: the endorser (celebrity), the product/brand and the consumer. A celebrity may desire to endorse a product/brand, believing that the product/brand is a good strategic fit. This establishes a positive sentiment connection between the celebrity and the brand (one side of the triangle). If t he consumer has pre-existing positive sentiment toward the endorser (the second side of the triangle), it is likely the consumer will form an attitude or change an existing attitude to be positive toward the brand (the third side of the triangle). This occurs because consumers desire harmony in their beliefs, and it would be unstable (unbalanced) to have a positively valued element linked to a negatively valued element. However alternatively the consumer could re-evaluate sentiment toward the brand to make it negative and hold a negative attitude of the endorser; this would also balance (Dean, 2002). Meaning Transfer Model 214 McCracken (1989) explains the effectiveness of celebrity spokespersons by assessing the meanings consumers associate with the endorser and eventually transfer to the brand. Kambitsis et al (2002 pp 160) shares this perspective and found that athletes personality was an important factor when influencing specific target groups, to which such personalities are easily recognisable and much admired. McCracken suggests a meaning transfer model, which is made up of three subsequent stages. Firstly, the meaning related with the celebrity moves from the endorser to the product/brand. Thus, meanings attributed to the celebrity become associated with the brand in the consumers mind. Finally, in the consumption process, the brands meaning is acquired by the customer. The third stage of the model illustrates the significance of the consumers role in the process of celebrity endorsed brands. The meaning tr