The concept of celebrity endorsement is frequently used by the marketers for promoting

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1 Abstract The concept of celebrity endorsement is frequently used by the marketers for promoting their brand and thus enhances sales and ultimately increase market share. Celebrities are widely used in various advertisements in the present media world and most of them are evaluated positively by the viewers. Due to this mostly positive evaluation, some become curious about what exactly happens to the negative side of the concept which every element in this world bears. Thus it has been decided to conduct a study on the negative impact of celebrity endorsement or evaluate the impact of a negative celebrity press on the perception of brand by the consumers. Another reason for the interest is to sort out which factors or characteristics of a celebrity are most important in consumer s perception when a negative scandal affects the celebrity s image. The purpose of this research study is to evaluate whether the process of celebrity endorsement is still effective or not and to measure the degree of relationship that a celebrity s persona has with his or her creditability after the impact of a scandal. In the section of the literature review, various previous studies have been dealt with that provide clarification about certain important aspects of the concept of celebrity endorsement: brand, consumer and celebrity. A very comprehensive approach towards the entire process has been presented through the use of both qualitative and quantitative data. Qualitative data has been gathered from both questionnaire and historical data while quantitative data collection has been through questionnaire. The data collected, both qualitative and quantitative, have been analysed and findings have been presented with the help of 1

2 various charts and figures and off course with the help of statistical tools. In the concluding part of the paper, the research findings have been presented in a compact form so that the readers can generate insights from the research very clearly. Along with this, few critiques and recommendations have also been included. The future prospects of research in this area have also been mentioned that can drive the reader towards its future applications. 2

3 Chapter 1. Introduction 1.1. Background and Statement of the Problem Nowadays, the process of Celebrity Endorsement has attracted enormous deliberation on whether it really adds value to the process of brand building for the company or is it just another instrument of making the brand more attractive and noticeable in the minds of the consumers. It has been noticed that, although the brand is promoted by a well known personality of the country or region, there are many instances that have shown the negative impacts of this process on the brand image. The society where people live nowadays is over communicated by the exploitation of media. Due to the explosion of media vastly, a person on an average sees 1000 ads per day in an over populated country. Each family in the country has at least one television set and thus is exposed to such number of advertisement. The most interesting fact about these figures is that the viewer forgets 80 % of the information gathered in just 24 hours. Due to this, the marketers initiated the solution of positioning through celebrity endorsement. But is the solution perfect for enhancing the sales of a company? Or is the idea of celebrity endorsement creating an impact on the people s consumption nature? 3

4 The study will be taken up in order to discover the relationship between the process of creating brand image through celebrity endorsements and the level of effectiveness that they produce in the market. The attractiveness of consumers toward products endorsement by celebrity and endorsement by an expert or a simple man will be evaluated so that the effectiveness of celebrity endorsement at present times can be measured Rationale and Purpose of the Study Until mid 2009, proficient golfer Tiger Woods earned $100 million per year as income from endorsement. But on November 27, 2009 after he was involved in a car crash and information about his damaged personal life was exposed by the media; several sponsors either dropped him from the contracts or stopped featuring him. As a result the personal traits of the celebrity affected the stock market to a wide extent. The market value of the sponsors associated with Tiger Woods decreased substantially in relation to the market value of those companies that were not associated with Tiger Woods. This reveals strong connection between celebrity endorsement and stock prices showing negative impact on consumer s perception (Knittel & Stango, 2010). Many instances like the one mentioned above has resulted in doubting the impact of celebrity endorsement of brands. The result of impacts of issues such as the personal characteristics of the celebrity affects the popularity, acceptation and ultimately earnings of the firm concerned. 4

5 For achieving competitive advantage in the market, firms are now in a state of dilemma whether to include celebrity in the advertisements or go with the average Joe. In the research both quantitative and qualitative data had been collected and analysed to arrive at the most validate and reliable research study. Various statistical tools have been used to analyse the data collected with the help of questionnaires. The objective of the study has been totally complied with respect to finding whether the celebrity s personal characteristics help in regaining their credibility after the negative press Research Problems and Objectives As mentioned in the above chapter, the celebrity endorsement in the recent market has started to show negative impact on the perception of consumers about the brand. The problem of using celebrities in conveying message to the consumers is that people start to associate personal characteristics of the celebrity with the product or the brand. For example, the Siyaram Silk Mills Ltd., an Indian based company withdrew its ad campaign of J. Hampstead in the year 2000 after its key celebrity endorser Hansie Cronje became the most hated sportsman within a night (ICMR, 2010). In addition to the above negativities of celebrity endorsements, there are also instances when an ad campaign has left controversial issues regarding its impact on the consumers. For example, various controversies evolved when Pfizer launched the educational ad campaign in the year 2000 featuring Jarvik. But despite the debate, 5

6 there were some analysts who supported the ad campaign mentioning that due to this ad Pfizer s revenue earning went up to a considerable degree (ICMR, 2010). The differences in views from various analysts influenced to take up this research proposal and based on the objectives designed for the study, the entire study has been conducted. The overall objective of the research study is to measure the level of attraction that the consumers feel towards the advertisements depicted by celebrity and also those depicted by a simple man or experts. The main motto behind the measurement is to determine the most desirable form of advertisement to the consumers in recent times. The defined objectives of the research are: To examine whether consumers feel more enticed to purchase certain products endorsed by a celebrity or one that is featured with an excerpt or the average Joe To determine whether a celebrity s persona post bad press plays a factor in their credibility thereafter To identify what factors and which aspects of negative news weigh more importance in affecting the endorsed product 6

7 1.4. Significance and Contribution of Research It is the consumer that provides major portion of a producer s output in a market-driven capitalist economy. The motivating factor to the consumers has remained a topic of discussion till the recent times. Various scholars and researchers have studied and found out that the rational consumers, in order to know about the products, first seek information about the various features of the product before purchasing. Most of their desired sought information can be made available through advertisements. But evidences have been observed that showed advertisements fail to provide the real information to the potential consumers. One best way to get rid of this loophole is to use proper endorsers in the advertisements (Busler, 2002). Pertaining to the above essentialities of advertisements, it is rigorously important for the marketers to understand the best endorsers for an advertisement. In the past during the 20 th century and up to mid 2000s, brand endorsements by celebrity had been very popular; but during the recent times due to the personal characteristics of the celebrities, the popularity of such an approach has reduced. The study s objectives directly aim solution for those marketers who continuously face problems of identifying appropriate endorsers for their product. Along with the fulfilment of above objectives, the negative impact of using celebrities in an act will also be measured. Moreover, the role of a celebrity in evolving himself as an effective endorser for a brand after certain negative impacts can also be measured from the research study. In this part, the personal features of the endorser have to be 7

8 evaluated. In the process of determining all these factors, the most important ones that play a negative role in affecting the product, can be identified by the marketer. Thus, the contribution of the research paper is immensely important in the field of marketing, where in the recent world celebrities are mostly preferred by advertisers and then this preference faces debate due to various prevailing conditions of the market Target Audiences The most important beneficiaries of this research paper are supposed to be the advertisers who at present face the dilemma of whether to use the celebrity endorsement for their brand or not. The research is to provide a probing towards the effectiveness of celebrity endorsements towards influencing consumers behaviour. The research will be of benefit for the product advertising team, product developer team and off course the Chief Executive Officer of the companies that use advertising as a promotional tool. 8

9 1.6. Scope of the Research The research study was performed with the students taking higher education in Hong Kong between the age group The students are taken because they believed to be enduring the characteristics of the entire public in Hong Kong. The sample in the research selected is the students gathered in the canteen area of University of Hong Kong. The population is chosen because they are believed to be acknowledging the power of celebrities. Also they possess a very strong contemplation process for analysing such a topic. The research has been conducted by collecting data from a group that understands the notion of using celebrity endorsements effectively and also the bad implications of it Structure of the Dissertation Chapter 1 of this research set the basics and underlying principle of the research problem under certain market conditions. Conceptual frameworks and literature reviews have been depicted in Chapter 2. In Chapter 3, Research methods have been described consisting of the most appropriate methods of analysing the data collected from the sample. In the chapter of research methods, the initial exploratory research situations to identify the traits of measuring preference have been depicted. In chapter 4, data collected from the sample as well as the findings of the research have been presented. Chapter 5 provides a concluding section of the research by winding up the 9

10 results and also mentioning implications of the research conducted. In this segment, future opportunities in the research have been discussed too. Chapter 2. Literature Review 2.1 Background The way of making and using advertisement has transformed over past 150 years. The changes were towards the modern school of thought from the classical perceptions. According to the modern advertising strategies, certain changes are required to bring on the aspects of fear, emotional, humour and shock (Severn & Belch, 1990). The primary reason behind these appeals is to convey the information that an organisation seeks to deliver to gain higher brand recognition and awareness among the huge audience. However, while implementing these appeals presence of known or unknown person is required in the advertisement to convey the message of the organisation to the target audience. According to the McCracken (1989), the consumer buying behaviour can be influenced by the presence of a well known person. He also stated that celebrity endorsement advertisement can be recognized as an omnipresent feature of the modern marketing concept. The concept of celebrity endorsement is renowned among the marketers as it 10

11 has a significant impact on the audiences. This influences the brand image of the organisations. According to the Erdogan & Et. Al (2001), consumers have a tendency to possess a perception that information coming from a known communicator has more similarities with their life style and interest in comparison to the unknown persons. Recent trends reveal that celebrities are increasingly endorsed. Historical data discloses that before ten years, out of eight advertisements only one showed celebrity but the scenario has been transformed to 20-25% in the United Kingdom and the United States (Shimp, 2000). A major transformation has been noticed in Japan which drafted 70% changes (Money & Et. Al., 2006). According to Choi and Et. Al. (2005), there is a change of 57% in celebrity endorsement in Korea over the ten years period. Ohanian (1991) and few other researchers, have addressed the reason behind this drastic changes. They have determined few aspects that a celebrity can create such as creation of brand awareness, brand equity, recall and brand attitudes, purchase intensions and emotional attachment to celebrities. Previously several researches were conducted in the similar field that revealed five chief themes and those are: Celebrity Attractiveness (Debevec & Kernan, 1984) Celebrity Meaning Transfer (McCracken, 1989) Celebrity Impact on Brands and Consumers (Ohanian, 1991) Celebrity Product Match-up (Kamins, 1990) 11

12 Celebrity Credibility (klebba & Unger, 1982). Most of the studies in this field have been on the western culture and two new concepts have been evolved. They are vampire effect and hot potato effect. These two concepts can be discussed now. Vampire effect refers to a situation when the consumer recognises and remembers the endorsing celebrity instead of the brand. It implies that the celebrity gain fame and publicity from the advertisement and beat the brand image of the product endorsed or the main purpose of the advertisement do not get benefited (Ohanian, 1991). The concept of the hot potato effect is quite different from the vampire effect. It denotes a situation when marketers drop the celebrities who are embroiled in scandals (Money & Et. Al., 2006). Few studies were also been conducted in the eastern culture and the outcome that had been revealed is that multiple brands have been endorsed by a single celebrity (Roy, 2006). At the same time researches based on China disclose that celebrities have positive impact on the materialistic values and viewing of advertisements in China (Chan & Zhang, 2007). 12

13 2.2 Theories of Celebrity Endorsement In this section of the literature theory major theories and models of consumer theories on celebrity endorsement will be reviewed Meaning Transfer While formulating advertisement campaign, a company needs to determine the message that it will present to the target market or in simple terms what the endorsed product should say or to convey to the target audience. Secondly, the advertisers has to understand that how the meaning can be conveyed in communication activities in a better manner. To present the meaning a company can choose a spokesperson to endorse the product (McCracken, 1989). It is a recognised fact that celebrities develop a particular image over the time therefore they can endorse a product in an effective manner. Moreover, celebrity selection is a crucial task of the advertisers. The theory of meaning transfer lies here. The intention is to formulate a message that can represent an effective relationship between the chosen elements and the image of the celebrity. This is the final stage of the meaning transfer. The main motto is that a customer can find the cultural meaning contained in the people. Contexts and object of the advertisement are also consisted in the product or service. McCracken (1989), have further stated that a well crafted advertisement is able to bring this fundamental metaphoric transference. 13

14 Figure1: The Meaning Transfer Model Objects Persons Context Role 2 Role 3 Celebrity Stage 1 Celebrity Product Product Consumer Stage 2 Stage 3 14

15 Figure 1. Source: McCracken (1989) Source Models For developing a proper idea regarding the effect of the chosen communicator, basically two distinct explanations has been used and those are credibility and the attractiveness of the sources used (Sternthal & Et. Al., 1978). In this note, Ohanian (1990) have stated that the trustworthiness of the source is determined by their evident honesty, sincerity, dependability and reliability. Hovland & Et. Al. added that apart from trustworthiness, expertise has also a positive impact on the effectiveness of the communicator where it has been assumed that the source is capable of creating correct assertions. Ohanian (1990) have appended one more aspect in addition with expertise and trustworthiness that can increase the impact of the message conveyed. The aspect proposed by the author is attractiveness of the source. He stated that attractiveness can be in the state of elegance, classiness and beauty. Goldsmith and Et. Al. (2000) have opposed the logic of Ohanian and argued that attractiveness is not applicable or cannot be considered to organizational credibility. The model of source credibility developed by Ohanian can be presented in a graphical format. 15

16 Figure 2: The Source Credibility Model Similarity Familiarity Likeability Attractiveness Experts Expert Experienced Knowledgeable Qualified Trustworthiness Skilled Dependable Trustworthy Honest Reliable Sincere Figure 2. Source: Adapted from Ohanian (1990) 16

17 2.2.3 Product Match-Up Model In this model it has been recognised that the congruence between the attributes of the product consisted of advertisement and the characteristics of the chosen spokesperson of that advertisement (kamins & Gupta, 1994). While establishing the match-up between the product and the communicator, clarity regarding the attributes in which the two aspects should have a close resemblance, is required. However, the evident outcome while applying the product match-up model in a celebrity endorsement is that it will engage a firm using a competing company as a spokesperson. It would apparently be impossible and raise a question regarding the applicability of the model into the B2B endorsement. 2.3 Contract Issues in Celebrity Endorsement Contract issues play a significant role in case of celebrity endorsement. Contract issues can be considered as the main aspect of differentiation between the celebrity and general person endorsements. In the section of the literature review an article written by Wood and Bruce on top ten contract issues of celebrity endorsements will be referred in order to discuss the issues. 17

18 Scope of services is an issue which mainly refers to the types of service and number of service days. Types of service encompass three aspects and those are personal appearances, interviews and production. Number of service days is a crucial factor for the celebrities as they work in a very schedule. The concerning factors are whether travel is included in the service, if yes then it will be consecutive or not. Apart from these factors, notices and scheduling, key dates, production delays, confirmation of bookings and delays can be undertaken within the issue of number of service days. The second issue is the media and it encompasses public relations, archive, involvement of new media and others. According to the authors, territory is another issue and it can be regarding geographic and digital territory and of usage pattern. Contract term is also a matter of concern. It not only refers to the initial terms but also includes production timelines, usage and run-off periods. The most important among the top ten issues is exclusivity and it mainly encompasses quirks and SAG/AFTRA scale multiple. Quirks can be the personal products of the celebrity; it can be used in TV shows and movies, charitable events and handling competitive products. The authors have indicated approval as an issue, which takes into account liaisons and process, editing, consultation and others. While preparing the contacts, morals should be properly taken care of. Morals can consist of many attributes and all those should be accurately monitored. The major attributes are research and reputation, morality and moral turpitude, reality and remedy. While dealing with a celebrity, a company needs to manage the compensation issues with utmost priority. Compensation can be monetary and non-monetary. Non-monetary compensation refers the usage of vehicles, wardrobes and vacations. Apart from these two aspects, agent commission, payment 18

19 schedule, tax consequence can also be considered under the compensation. The authors have regarded SAG/AFTRA as another matter of concern. The other nitpicky stuffs are right to credit, advance expenses, reimbursement, security and entourage (Wood & Bruce, n.d.). 2.4 Reason of Letting-down the Effect of Celebrity Endorsement Certain welcoming facts regarding the celebrity endorsement have been discussed in the above phases of literature review but it cannot be assured that all celebrity endorsements will be successful. The reasons behind the failure of celebrity endorsements will be discussed in this part of the paper. According to the Vijaivargiya and Gupta, there are basically five causes of minimizing the effect of the celebrity endorsement. Firstly, improper positioning of the celebrities can have a negative impact on the audiences. The sense of the advertisement and the message that the company wants to convey can be inversely taken by the targeted audience. Brand connection is other vital factor that needs to be taken care of while selecting the celebrity. The personality or the demographic characteristics of the celebrity is essential to have a strong connection with the brand that he/she can successfully represent the brand. It can be better understood with an example. A male celebrity cannot be suitable for an advertisement which is targeted to ladies customers. Dissatisfaction with the 19

20 performance or the quality of the products can also reduce the effect of the celebrity endorsement. It implies that a poor quality product can attract a customer only at the time of first purchase of the product but retention of the product cannot be ensured with celebrity endorsement. The authors have indicated that while designing an advertisement, the advertisers should avoid such factors that can generate scepticism in consumers mind regarding the product or service. It has also a relationship with the selection of celebrity. According to the authors the brand should not outshine the overwhelming charisma of the star. Choosing a celebrity who is associated with several other brands is not a right decision as the appeal of the message that the company want to convey can be misunderstood or create confusion to the customers (Vijaivargiya & Gupta, n.d.). 2.5 Effect of Celebrity Endorsement in Hong Kong The research is based on Hong Kong therefore, it is very important to demonstrate the concept of celebrity endorsement in context to Hong Kong. Three previously conducted study on the similar topic can provide insights on the celebrity phenomenon. Dubelaar and Et. Al. (2007), had conducted a study, based on 192 professionals and small business owners in Hong Kong. The research was on the image-fit of Bruce Willis and Orlando Bloom on Swatch and Breitling watches. Farm and Waller (2006) had also conducted a research which had a qualitative approach and it engaged participants aged years on likeable advertisement in Jajarta, Shanghai, Mumbai, Bangkok 20

21 and Hong Kong. The finding of this research study reveals that likeable advertisements in Hong Kong possesses escapism and fun attributes of a celebrity, for example, features, humour and entertainment factors. However, the outcome of the studies were not able to determine the popular celebrities among the Hong Kong youth, effect of the celebrity endorsements on brand decisions and reliability of the multiple brand endorsements. Apart from these two studies, one research had been conducted in the year 2007, with the aim of extending the five previous celebrity research themes in context of Hong Kong. The research was focused on students and especially non-advertising students. The study found that the actors and singers in Hong Kong have a great influence on the students of the nation on brand decisions (Ling & Et. Al., 2008). 2.6 Advantages of Celebrity Endorsement It has been revealed from several researches that over 20% of the TV advertisements encompass celebrities. It has been also disclosed that the advertisers pay a higher amount for their services (Belch & Belch, 2001). Evidences show that the celebrities, who are highly respected and liked by the consumers are paid more by the advertisers (Shimp, 2003). 21

22 According to the perception of the advertisers, popular celebrity can influence the feelings and the purchase behaviours of the consumers. They further believe that appearances of the celebrities in the advertisements have a positive impact on the consumers persuasion regarding a product (Belch & Belch, 2001). It can be considered as the signboard to the products quality and significantly enhance the reputation of a brand. In this note, it can be stated that celebrity endorsement can further attract the attention of the consumers towards the markets where inspiration to select between the products is not only low but also difficult. On the basis of this fact, it can be stated that the money, advertisers pay to the celebrities for this purpose is mostly justified. There are loads of reasons for what celebrity endorsement can be considered as a good investment. According to Till (1998), a celebrity can increase brand equity. He further stated that attitude of a consumer towards a brand can be affected or changed by the presence of a celebrity. He feels that a celebrity can freshen, add and contribute to a new dimension for a brand. In agreement with the following aspects, Kaikati (1987) has added that with the presence of the world s renowned celebrities, culture road block can be manipulated. According to Abbot and Et. Al. (2001), celebrities are able to develop brand credibility within a short time period. In this note Mullikin and Petty (2006) have added their view. They feel that appearance of celebrity in advertisement can generate independent credibility to the advertisements. Atkin and Block (1983) have expressed their suggestions that celebrities can help the advertisements to be prominent among the 22

23 surrounding clutter and thus the advertisements can enhance the communicative abilities. According to Wright (2000), advertisers have a perception that consumers purchase products engaged with the people they respect and admire. He further states that celebrity endorsement can strengthen competitive differential advantage over the competitors. Kamins and Et. Al. (1989) believes that celebrities can make the advertisements realistic. Celebrities are also useful to enhance recognition of the brand names (Petty & Et. Al., 1983). Along with these merits, they can also help a company to increase the message recall (Friedman & Friedman, 1979). 23

24 2.7 Disadvantages of Celebrity Endorsement According to Hsu and McDonald (2002), consumer might be sceptical about the fact that endorsers can really consume the product or service that they endorse. He indicates that there is confusion with the celebrity endorsement. He believes that, on the one hand, multiple celebrity endorsement can create confusion among the consumers while on the other hand; single endorser for a particular product can be taken as boredom. Tripp and Et. Al. (1994) feels that the celebrity associated with several brands possess less credibility from the consumers. A celebrity blamed for negative events might be having harmful impact on the products and services they endorse. Even a contradicting image of the endorsed brand can be created if the celebrity changes his or her image or loses fame. Rossiter and Percy (1997), has included an important aspect while discussing the drawbacks of the celebrity endorsement and that is vampire effect or celebrity vamping. He states that these concepts can be perceived if endorsing celebrity is too gorgeous and can draw attention of the consumers away from the product. Till and Shimp (1998) jointly possess a view that the effectiveness of the endorser can be abridged when there is a inverse relationship or bad fit between the product and the endorsing celebrity. 24

25 2.8 Celebrity Endorsement: Risk vs. Returns Celebrity endorsement can have both positive and negative effects. From the above discussions and reviews of the literature it is quite evident that an advertiser can gain returns out of the advertisement and at same time they have to bear risk. To demonstrate the risk and return analysis of the celebrity endorsement, an article written by Dr. Puja Khatri has been undertaken. At first, the returns of the celebrity endorsement will be discussed and thereafter risk associated with the topic will be analysed. Returns Develop Awareness: Especially the new brands get benefited if a celebrity endorses it. It not only attracts the attention of the customers but will be able to create inquisitiveness among the consumer as well. Higher level of message recall is possible for the products endorsed by the celebrities. Emotional Connection: Few world renowned celebrities are there who commands great admiration among the general people and thus they can positively persuade their fans. Accelerate the Bonding: The communication process can be hastened up and the relationship building process can be accelerated through the presence of the celebrities. 25

26 Means of Brand Different Ion: Celebrity endorsement can be considered as the differentiation policy. Through engaging a celebrity for the first time in the industry a company can gain competitive advantage over its competitors. Source of Imitation: It is a recognized fact that celebrities tend to be the role models and idols for the target audience that is the consumers and they start using those product and services as the name of the particular celebrity they admire is connected with the brand. Enhance Brand Image: The authenticity and the credibility attached with a celebrity have been coupled with the brand when he endorses it which is quite adequate to enhance the brand image. Risks Necessary Evil: According to the author once a brand rides the back of famous celebrity, it becomes difficult for the brand to promote their message in absence of a star. It implies that celebrity activity tends to be the addiction for the consumers and the brand and the task of identifying a better substitute becomes more difficult. Doubt regarding the creditability of the Celebrity for the Competent Customer: The truth is that recently the marketing endorsements have to deal with the knowledgeable and competitive customer who has started to raise their voice of opinion regarding their 26

27 perception about a particular brand. The knowledgeable customers are smart enough to understand that celebrities are highly paid for stating good things about the brand. Conflicting Image: The authors have found out that a mix match between the product and the image of credibility can damage the brand image. Absence of synergy between the product category and the celebrities own image can make the endorsement strategy futile. Influence of Moral Violation on Brands: Involvement of the endorsing celebrity in any kind of moral violation and scandals can drop down the brand image, irrespective of the matter that the issue is just a rumour or fact. Multiple Endorsements: The author has regarded poly endorsement as a celebrity clutter. It creates the confusion among the consumers if an endorsing celebrity is associated with multi-brands and multiple products (Khatri, 2006). 2.9 Summary of the Chapter The core topic of the study is the negative impact of the celebrity endorsement. The main objective is to determine that whether the celebrities endorsements are still effective or not. Considering this objective this reviews of literature has been conducted. Even the effect of endorsers demographic profile on the scandals has also been taken into account. Before discussing any attributes, it is necessary to idealize the background 27

28 of the concept and to perceive the global approaches. Therefore, background of the celebrity endorsement has been discussed and a global view has been presented. To strengthen the impact of the literature reviews, the existing theories and models of the concept have been demonstrated. The study is primarily on the impact of the celebrity endorsement. Therefore, merits and demerits of the topic have to be discussed. Moreover, issues regarding the contracts and the celebrity endorsement have also been demonstrated. The study has been generally conducted in Hong Kong. Therefore, it is necessary to encompass the overview and present scenario of celebrity endorsement in Hong Kong. Risk and return analysis of the concept has also been undertaken. The outcome of the overall analysis is that celebrity endorsement is evidently essential and effective. Even over ten years time frame a huge transformation has been noticed in the engagement of celebrities, but the companies are now dealing with more knowledgeable audiences. For them quality of the product is the decision making criterion and not the celebrity involvement. Therefore, it can be concluded that though there are possibilities of certain emerging risks in near future from the competitive customers, the celebrities are still valued by the consumers. 28

29 Chapter 3: Research Method In this chapter, the methods of research for finding the results will be determined for providing an idea of the steps conducted in the process of the study. The steps include all the processes from the research problem to the ultimate outcome Identifying Research Attributes In the preliminary stage of introducing the research, secondary research (desk research) has been applied. In this part of the research paper, the reason for depicting celebrities in ads has been identified so that the intention of the marketer can be understood for presuming their modes of making the consumers accept the brand. The reasons for which the advertisers go for celebrity endorsement for marketing their brand consist of the following: The process of promoting a brand through celebrity endorsement increases the attention of the consumers Due to the general attractiveness of the celebrities, general persuasion of consumers regarding social acceptance and others become convenient 29

30 The above are the reasons on the part of advertisers for including celebrity endorsement as a mode of promoting, but consumers persuasion is different. The consumers are found to be influenced by the ads only when aspects of the celebrities resemble their own. (Escalas & Bettman, n.d.). List of data that measures impact of celebrity endorsement on the consumer s perception of brand has been collected from various sources. The main data are: Published materials of the sponsors associated with an instance of negative impact of celebrity endorsements Published data of researchers on the effect of celebrity endorsements after bad press affect the persona of the celebrity The industry data shows that consumers associate the brands by keeping them in the position of the celebrity who depicts it. For example, an ad demonstrating a brand by David Beckham will make a consumer feel like an athletic; and thus the consumers perceives brand in that way. 30