Effectiveness of Celebrity Endorsement Advertising in Chinese Marketplace. Wenqian Gan B. A.

Transcription

1 Effectiveness of Celebrity Endorsement Advertising in Chinese Marketplace By Wenqian Gan B. A A dissertation presented in part consideration for the degree of MA Marketing 1

2 Abstract Celebrity endorsement is as the most prevalent advertising technique and strategy nowadays used in Chinese marketing communication to create positive effects in the minds of Chinese consumers, since competition of Chinese market has rapidly and increasingly intensified. In the meantime, celebrity endorsement in advertising has managerial significance, as it can be an effective competitive weapon in mature and saturated markets in order to support brand image and differentiate products form competitors. As little academic literatures have written in terms of effectiveness of celebrity endorsement in advertising within Chinese context, the main aim of my dissertation is to study the effectiveness of celebrity endorsement as a promotional technique within the Chinese marketplace through exploring the extent to which the celebrity endorsement influences Chinese consumer behaviours, identifying what factors that young Chinese consumers think of significantly influence effectiveness of celebrity endorsement, evaluating cultural influences to both Chinese consumers and selected celebrities as endorsers for marketers, and clarifying different attitude and perception to both Western and domestic celebrities endorsers existed among different young consumers groups due to such as differences of age and gender. This dissertation conducts a primary qualitative research method among Chinese young consumers to critically evaluate and provide insights with respect to effectiveness of celebrity endorsement in Chinese commercials based on previous academic literatures. 2

3 Table of Contents Title page..1 Abstract...2 Table of Contents.3 Acknowledgement 6 Chapter One: Introduction Background to Topic Research Objectives Structure of the Dissertation. 8 Chapter Two: Research Context Historical Development of Chinese Celebrities Present Development of Chinese Celebrities Situation and Types of Celebrity Endorsers that are Favoured by Chinese Consumers Influences of Celebrity Endorsed Commercials in China...12 Chapter Three: Literature Review Historical Development of Celebrity Endorsement Celebrity Endorser versus Non-Celebrity Endorsers in terms of Effectiveness in Advertisements Advantages and Disadvantages of Celebrity Endorsement Strategy Models on Celebrity Endorsement Strategy The Source Credibility Model The Source Attractiveness Model The Product Match-Up Hypothesis The Meaning Transfer Model Additional Factors Predicting the Effectiveness of Celebrity Endorsement Advertisements 31 3

4 3.6 Impacts of Different Cultural Values on Implementation of Celebrity Endorsement Dimensions of Cross-Cultural Differences between Western and Asian Countries Cross-Cultural Comparison between US and Korea..35 Chapter Four: Methodology Comparison Qualitative Research and Quantitative Research Qualitative Interview Research Sample Analysis and Discussion Guide Celebrity versus Non-Celebrity Endorsements in Chinese Commercial Advertising Testing Effectiveness of Source Model Testing the Product Match-Up Hypothesis Testing Meaning Transfer Model Testing Correspondent Inferences Concepts Assessing Impacts of Cultural Values on the Effectiveness of Celebrity Endorsement Data Analysis Techniques...48 Chapter Five: Findings and Analysis Reasons of Chinese Consumers Performance to Celebrities and Impressive Memory to Celebrity Endorsed Commercials Impact of Celebrity versus Non-Celebrity Endorsement in Chinese Commercials Degree of Effectiveness with respect to Celebrity Endorsed Advertising Consumers Attention Focus Reactions to Celebrity Endorsement Advertising Results of Testing Effectiveness of Source Models

5 5.3.1 Comparison between Major Factors in Two Source Model Translation from Feeling to Purchase Intention and Behaviour Gender Impact to Effectiveness of Celebrity Endorsed Advertising Results of Testing the Product Match-Up Hypothesis Evaluation Impact on Match-Up between Celebrity Endorser and Product Evaluation Effectiveness on Types of Product Match-Up with Celebrity Endorsers Results of Testing Meaning Transfer Model Results of Testing Correspondent Inferences Concepts Results of Assessing Impact of Cultural Value on the Effectiveness of Celebrity Endorsement 64 Chapter Six: Discussion 67 Chapter Seven: Conclusion..73 References..79 5

6 Acknowledgement This dissertation has been successfully completed on time, the following persons that I particularly need to express my devoted acknowledgement include: Firstly, my supervisor, Ms Sally Mckechnie, who offers valuable and patient guidance and assistance in providing suggestions for preliminary reading in my dissertation topic, outlining an appropriate structure, and tackling specific problems encountered in the course of my research. Secondly, my family, who always support my study both in psychologically and economically especially during writing the dissertation Thirdly, my research participants, who provide me substantial significant personal opinion and viewpoint in my dissertation to assist me collecting useful and relevant information and finishing my work smoothly. 6

7 Chapter One: Introduction Background to topic Use of celebrities as part of marketing communications strategy is a common practice for major firms in supporting brand image. Firms have invested large sums of money to align their brands and corporate images with celebrity endorsers qualities such as attractiveness, likeability, and trustworthiness (Atkin and Block, 1983) in order to underpin competitive differential advantage for a firm s products or services (Erdogan, 1999). Furthermore, celebrities serve not only to create and maintain attention, but also to achieve high recall rates for marketing communication messages in today s highly cluttered environments (Croft, et al 1996; Friedman and Friedman 1979; Kamen, et al, 1975; Kamins et al 1989; Ohanian 1991; O Mahony and Meenaghan, 1997). Meanwhile, selecting celebrity endorsers have managerial significance. A right celebrity endorsement strategy can be an effective competitive weapon in mature and saturated markets in order to differentiate products form competitors, since there is a heavy advertising clutter and almost no room for actual product differentiation in markets (Erdogan, 1999). However, at times, celebrity qualities may be inappropriate, irrelevant, and undesirable so as to select a right celebrity endorser becoming a challenge for many firms. Thus, it is necessary from consumer perspective to address a major question: how can companies select and retain the right celebrity among many competing alternatives and manage this resource, as well avoiding potential pitfall? More significantly, the most attractive reason that I choose this topic is that celebrity endorsement is as the most prevalent advertising technique and strategy nowadays used in Chinese marketing communication to create positive effects in the minds of Chinese consumers, since competition of Chinese market has rapidly and increasingly intensified. Research objectives The main aim of my dissertation is to study the effectiveness of celebrity endorsement as a promotional technique within the Chinese marketplace. The research objectives are to explore the extent to which the celebrity endorsement influences Chinese consumer behaviours, to 7

8 identify what factors that young Chinese consumers think of significantly influence effectiveness of celebrity endorsement, to evaluate cultural influences to both Chinese consumers and selected celebrities as endorsers for marketers, and to clarify different attitude and perception to celebrities endorsers who are both from domestic and western countries among different young consumers groups due to such as differences of age and gender. Structure of the dissertation The dissertation will include five main chapters, which include research context, literature review, methodology, analysis, and discussion, in addition to introduction and conclusion. The research context chapter incorporates general backgrounds with respect to historical and present development of celebrity endorsed advertising, current situation and types of celebrity endorsers, and influences of celebrity endorsement in Chinese market will be introduced. The literature research chapter includes historical development of celebrity endorsement; celebrity endorsers versus non-celebrity endorsers in terms of effectiveness in advertisements; advantages and disadvantages of celebrity endorsement strategy; four models on celebrity endorsement strategy, which are source credibility model, source attractive model, product match-up hypothesis, and meaning transfer model; additional factors predicting the effectiveness of celebrity endorsement advertisements; and impacts of different cultural values on implementation of celebrity endorsement. As the almost research in the previous academic literatures in terms of celebrity endorsement concentrate on the Western countries, even though a few of literature focus on other Asian countries such as Singapore and Korea, very little academic article has been written about this topic in the Chinese context. In my following content, I will conduct a research to fill this gap through investigating effectiveness of celebrity endorsement in Chinese marketplace. Then, the methodology chapter will justify qualitative interview research methods that I am going to use in my research through comparing qualitative and qualitative research and examine differences of qualitative interview from other qualitative methods. For the research sample, I will examine that reasons that why the young adults, who are age range between 20 and 30 years old, are chose. Importantly, interview questions will be listed to justify the literature review content. 8

9 Following, I am going to analyse the results that I obtain from my interviewees through in-depth qualitative face-to-face interviews in the analysis chapter. Finally, in the discussion chapter, I am going to discuss analysed results associating with literature review and emphasise what new findings and viewpoint will be received comparing with academic literature. Chapter Two: Research Context Before reviewing academic literatures in terms of effectiveness of celebrity endorsed advertising and conducting a research from Chinese young consumers perspective to examine effectiveness of celebrity endorsed commercials in Chinese marketing communication, general backgrounds with respect to historical and present development of celebrity endorsed advertising, current situation and types of celebrity endorsers, and influences of celebrity endorsement in Chinese market will be illustrated. Historical development of Chinese celebrities in marketing communication A number of years ago, when China was beginning to open market to the world, the economy and society had undergone fundamental changes. At that time, many Western marketing experts were suspicious that whether celebrities are as important and appealing as Western countries consumers to Chinese consumers, because there is substantial difference between Western and Chinese cultures, in which Chinese cultures more emphasize the group whereas the Western cultures emphasize on the individual (Scarry, 1997). However, as the Chinese economy has become more market-oriented, and disposable incomes of Chinese consumers have readily risen, competition in Chinese market has been fierce, so that marketers eagerly seek an effective strategy of marketing communication in order to appeal potential consumers and satisfy their needs. Therefore, following the lead of foreign marketers, more and more Chinese companies have adopted celebrities in their advertising in order to differentiate their products from other brands. More surprisingly, Scarry (1997) argued that many companies that discover specific celebrities and create symbolic marketing imagery may be more likely 9

10 to become market leader in China. Originally, after celebrities were introduced as a popular strategy in marketing communication, Scarry (1997) classified four specific image types that may have a strong influence on consumer behaviour and purchasing patterns. First type was elders, particularly those deceased ancestors. In the late 19 th and 20 th centuries, they were respected, because ancestral spirits were thought to determine a family s fortune or not. For example, much of success of Maotai liquor can be attributed to the fact that it was the preferred drink of Enlai Zhou. Second type was the modern tycoon such as Hutchison Whampoa founder Kashing Li. The tycoons attract consumers who eagerly snap up luxury goods like imported cars, clothes, watches, and alcoholic beverages. The third type is Chinese athletes, who have won medals in numerous Olympic events. They have been considered as celebrities by many Chinese companies, in order to appeal the emerged Chinese middle class, who pursuit material wealth. Fourthly, as Chinese parents adore and pamper their children, the fourth image is new generation of sibling-less Chinese children or little emperors. Present development of Chinese celebrities in marketing Along with continuously changes of China s celebrities who appeal Chinese potential and new generation of consumers, in spite of the importance of athletes, tycoons, and other celebrities in marketing products in China, Chinese film and entertainment celebrities also appear increasingly as sponsors of product (Scarry, 1997). At beginning, only few US companies have used entertainers in their advertisement in China market. For example, US company, Procter & Gamble Co. employed Chinese-American tennis professional Michael Chang in advertising at end of 19 th centuries. Meanwhile, more recently, P&G selected Xuejuan Luo who was an Olympic gold medallist to endorse Rejoice in Chinese commercials. Afterwards, celebrity endorsements are widely favoured by local brands as a common way to gain widespread brand and product recognition (Liu, 2005). For example, in IT industry, Founder Technology Co. has adopted famous entertainers and model, Na Yu, to endorse its products in order to embody a fashion vanguard image in the severe competitive IT market. Importantly, this strategy has obtained well marketing effects (Computer Information Newspaper, 2006). Furthermore, lots of companies have extensive utilised celebrities such as 10

11 entertainers, singers, and athletes to endorse their product brands in order to promote their popularity in markets. For instance, movie star, Bingbing Fan, endorses internet game; singer, Lingyin Zhang, endorses TCL laptop; football star, Ronaldinho, endorses Lenovo desktop computer. Even nowadays, when consumers switch on TV, no matter channels they watch, they can see celebrity endorsed advertisings that extensively and frequently emerge. The types of endorsed products are diverse including shampoo, sports shoes, mobile phone, medicine, and toilet papers. Hence, according to results of report that were conducted by Millward Brown company, proportion of Chinese companies that adopt celebrities as endorsers in commercials is situated at the third of the world, which is only lower than Japan and Korea (New Marketing, 2006). However, in terms of advertising itself, how the effects and quality of celebrity endorsed advertising are, which is uncertain and unknown (New Marketing, 2006). Situation and types of celebrity endorsers that are favoured by Chinese consumers According to investigation of 1,000 residents in Beijng, Dalian, Guangzhou, Qingdao, and Shanghai to rank their favourite celebrities, results of the investigation showed that nineteen of the top 20 celebrities nominated were entertainer, in which Michael Chang was the only athlete mentioned by respondents, and eight of the celebrities on the list were Hong Kong or Taiwan superstars who endorse for cosmetics firms in advertising. Curiously, topping the list was Hong Kong superstar, Dehua Liu. The number two was Chinese actress Li Gong, who acted film of Raise the Red Lantern. (Scarry, 1997) In meanwhile, more recently, according to a survey that are conducted in 2005 to rank top 20 celebrities who are the most favoured by Chinese consumers, the top ten celebrities are those movie and music stars, who are popular in Chinese market for a long time, in which the most youngest ones who are Bozhi Zhang and Yanzi Sun have been engaged in celebrity career for 5 years. This results illustrated that brand value of celebrities need time to accumulate, so as to be familiar and liked by consumers. Furthermore, results of this survey showed the influence strength of celebrities from mainland China is much weak than celebrities who are from Hong Kong and Taiwan areas. Only three celebrities who are from mainland China are ranked into the top 20 celebrities. They are movie star, Wei Zhao, and athletes, Ming Yao and 11

12 Xiang Liu. This comparison demonstrated that there are big distance between celebrities from mainland China and celebrities who are from Hong Kong and Taiwan districts. (New Marketing, 14/05/2006) Influences of celebrity endorsed commercials in China Based on a research in Chinese market showed, 27.1% marketers hope to utilise celebrities endorsed commercials supporting their products or brands in market (Wang, 2006). Meanwhile, based on investigation to consumers in certain area, 49.41% of consumers who purchase the advertised product are led by celebrity endorsed commercials, comparing with 31.26% of consumers who buy the advertised product are guided by non-celebrity endorsed commercials (Wang, 2006). Thus, these results of investigation showed that commercials that are endorsed by celebrities do have substantial influences to consumers. However, according to index report of Zero Point Research & Consultation Co., which conducted an investigation in terms of public influence strength of Chinese celebrities advertising in year 2005 indicated, influence strength index of Chinese celebrity advertising obtained score 65.9, which only passed qualified level in overall results. Importantly, this report illustrated effects of that different brands adopted celebrity to endorse in advertising are not much effective. (Yuan, 2005) All in all, although celebrity endorsement in advertising as marketing communication strategy in China market has followed western countries to launch, the speed and scope of its development are very rapid and extensive. Meanwhile, celebrities who might be chose to endorse a product in advertising have changed over time. Nowadays, entertainers, singers, and athletes who especially come from Hong Kong and Taiwan districts have been widely and popularly adopted to endorse various products especially in commercials. Significantly, celebrity endorsement in advertising that widely existed as widespread strategy of marketing communication has substantially influenced Chinese consumers attitudes, perception and behaviour to advertised product, howbeit, how effectiveness of celebrity endorsed advertising is has not been stressed and classified. 12

13 Chapter Three: Literature Review Aim of this chapter is to extensively and deeply review previous academic empirical literatures in terms of effectiveness of celebrity endorsed advertising. Hence, following contents will include historical development of celebrity endorsement, celebrity endorsers versus non-celebrity endorsers in terms of effectiveness in advertisements, advantages and disadvantages of celebrity endorsement strategy; four models on celebrity endorsement strategy, additional factors predicting the effectiveness of celebrity endorsement advertisements, and impacts of different cultural values on implementation of celebrity endorsement. Historical development of celebrity endorsement The use of celebrities in marketing communications is not a recent phenomenon (Kaikati, 1987). Celebrities have been endorsing products since the late 19 th century, when Queen Victoria was in association with Cadbury s Cocoa (Sherman, 1985). Then, due to emergence of cinema, the scope of endorsement as an advertising technique was extended, even though its popularity nowadays is mainly owing to the growth of commercial radio in the 1930s and to commercial television in the 1950s (McDonough 1995). However, during that period, supply of stars that are potential endorsers was limited (Kaikati, 1987), because it was viewed suspiciously that stars should invest their prestige on the shining cathode ray tube as mere brand presenters so that advertisers were restricted in their search for stars that were exactly right (Erdogan, 1999). The situation changed from the late 1970s, supply of stars has increased as a result of the deflowering of most virgin celebrities who had previously refused to cloud their image with endorsements (Thompson, 1978). Remarkably, as the number of films and television has increased, shame in commercial exploitation has faded, which therefore makes advertiser greater choice in the celebrity selection process (Erdogan, 1999). Subsequently, utilising celebrities as endorsers in marketing communication activities have clearly risen (see Figure 1). In 1979, celebrity endorsers use in commercials was estimated as one in every six advertisements (Howard, 1979). By 1988, estimates were one in five 13

14 (Motavalli, 1988). By 1997, around 25% of all US-based commercial utilise celebrities (Shimp, 1997). Furthermore, from a UK perspective, a report in Marketing (February 1 st, 1996) indicated that advertising, which used celebrities was a key to gaining national headlines. From monetary perspective, Lane (1996) estimated that US companies paid more than $1 billion to athletes for endorsement deals and licensing rights in Thus, Erdogan (1999) states that utilising celebrities within commercials has reached a level that it can be accepted as a fairly common marketing communication strategy. Figure 1: Estimates of utilising celebrity endorsers in all commercials Source: Erdogan, B.Z (1999) Celebrity endorsement: A literature review, Journal of Marketing Management, 15, p292 Celebrity endorsers versus non-celebrity endorsers in terms of effectiveness in advertisements When selecting an endorser to represent a product, marketers can either choose a celebrity or create spokespersons (Tom et al, 1992). A marketer who creates spokespersons can have greater control on their development through giving them characteristics that are both effective with the target audience and congruent with desirable characteristics of the endorsed product. Conversely, marketers who use a celebrity as a spokesperson have limited such control, instead, marketers have to select celebrities whose characteristics make them effective with the target audience and whose public persona matches with advertised product. (Tom et al, 1992) Consequently, Tom et al (1992) proved that created endorsers were more 14

15 effective in congruity with the endorsed product than celebrity endorsers. Tom et al (1992) explained their results by the classical conditioning paradigm. According to this paradigm (see Figure 2), in marketing communication contexts, consumers learn the association between the unconditioned stimulus (e.g. song or endorser) and the conditioned stimulus (e.g. the product) through repeated exposure. This association is much stronger with original material (created spokesperson) than with popular material (celebrity endorser) is not just linked to a promoted product, but with many other things. In other words, linkage is weak between the popular material and the product because of these other associations, whereas the linkage in terms of original material is stronger due to the unique linkage. Figure 2: Classical conditioning paradigm in marketing communications context Source: Tom et al (1992) The use of created versus celebrity spokesperson in advertisements, The Journal of Consumer Marketing, 9 No 4, p50 In the meanwhile, Mehta (1994) found that there were no statistically significant difference in attitudes towards advertising brand and intentions to purchase endorsed brand between celebrity and non-celebrity endorsement situations, however, there are differences in cognitive responses between receivers. In the non-celebrity conditions, receivers more concentrated on the brand and its features whereas in the celebrity condition receivers focused on the celebrity in the advertising. In contrast, Atkin and Block (1983) and Petty, et al (1983) found that 15

16 celebrity endorsers produced more positive attitudes towards advertising and greater purchase intentions than a non-celebrity endorser. Furthermore, both studies conducted by Agrawal and Kamakura (1995) and Mathur et al (1997) demonstrated the effectiveness of use of celebrity endorsers in terms of economic worth perspective. Agrawal and Kamakura (1995) analyze the market value effects associated with the announcements of 100 celebrity endorsement contracts. Their results suggest that celebrity endorsement contracts are generally viewed as a worthwhile investment in advertising. In addition, in their research, a related issue is the potential source for the positive value that the endorser creates for his or her client firm. For products endorsed at the early stages of their life cycles, the source of positive value may simply reflect and acceleration in establishing the products. However, for products endorsed in mature markets, positive value will likely be created by gaining market share from competitors. Thus, creation of positive value by an endorser for his or her client firm in this environment implies that some loss of value will occur for firms with completion products. Meanwhile, Mathur et al (1997) attempted to evaluate the impact of celebrity endorsement contracts on the expected profitability of a firm by using Event Study Methodology, which is used in order to identify the valuation effects of marketing decisions, and provided compelling evidence that a major celebrity endorser has the potential to profoundly influence the profitability of endorsed products. An excellent example that uses young celebrities as endorsers is Pepsi Co. although Michael Jackson made a disaster for Pepsi Co; it had acquired 8% increase in sales in 1984, and the first year of its contract with Mr. Jackson in a industry where a 1% rise in sales is equivalent to millions of dollars (Gabor et al, 1987). Even though Pepsi Co. had many bad experiences with its celebrity endorsers such as Michael Jackson who alleged child abuse and Madonna whose album called Like a Prayer, which upset the Catholic Church causing problems for Pepsi Co, it has still used celebrity endorsers such as the Janet Jackson and Mariah Carey. More recently, it was criticised that advertising traditionally uses idealised examples of celebrity that link the brand to an image, which render that consumer complain that the ideals are unattainable and such images are a bad influence. As a result, Unilever decided to promote Dove by using ordinary people to beat Lux, which is a long-established brand that has 16

17 traditionally positioned itself as a luxury product by introducing a touch of Hollywood glamour in the form of Sex in the City star Sarah Jessica Parker recently (Marketing Week, 2006). In addition, the market research company Mintel has reported that three out of five adults are bored with celebrities and a further one in five is celebrities-resistant (Charlie, 2005). However, Oxfam refused this report. For example celebrity co-ordinator, Claire Lewis says that once the pictures of celebrities were released, the organization s Make Trade Fair website got more than a million hits. As well, Sharon Stone, who emphasizes the point, raised $1milllion to rescue Tanzanian children at risk of malaria in five minutes. (Charlie, 2005) Consequently, Erdogan (1999) concluded that celebrity endorsers are more effective than non-celebrity endorsers in generating all desirable outcomes including attitudes towards advertising and endorsed brand, intentions to purchase, and in fact actual sales, when companies utilise celebrities whose public persona match with the products and target audiences and who have not endorsed products previously. Advantages and disadvantages of celebrity endorsement strategy Firstly, Erdogan (1999) briefly illustrated potential advantages and disadvantages of celebrity endorsement strategy and some preventive tactics in Table 1 below. 17

18 Table 1: Pros and Cons of Celebrity endorsement strategy Potential Advantages Potential Disadvantages Preventive Tactics Assisting product marketing and increased attention Overshadow the brand Pre-testing and careful planning Image polishing Public controversy Buying insurance and putting provision clauses in contracts Brand introduction Brand repositioning Underpin global campaigns Image change and overexposure Image change and loss of public recognition Expensive Explaining what is their role and putting clause to restrict endorsements for other brands Examining what life-cycle stage the celebrity is in and how long this stage is likely to continue Selecting celebrity who are appropriate for global target audience, not because they are hot in all market audience Source: Erdogan, B.Z (1999) Celebrity endorsement: A literature review, Journal of Marketing Management, 15, p295 Mathur et al (1997) state a variety of reasons that firms use celebrity endorsers including that firms may feel that the life experiences of endorsers fit the advertising message, that the endorser has high appeal with the firm s target consumer group, or that the endorser s universal appeal makes the advertising universal. Besides, recent technological innovations such as remote control television, video control systems, and cable and satellite diffusion have served to increase consumer power over programmed advertisements, which make advertising more challenging (Croft et al, 1996). Meanwhile, celebrities can help advertisements stand out from surrounding clutter so as to improve communicative ability by cutting through excess noise in a communication process (Sherman, 1985). 18

19 Surprisingly, in the recent decade, virtual celebrities endorsed products or services such as computer game have received extraordinarily well economic effects for both product companies and real celebrities. For instance, since the world first met adventuress Lara Croft in video game in the ten years, she has become a pop culture icon, so that today Lara Croft is a billion-dollar brand and the inspiration behind music videos, comic books, amusement park attractions and endorsements for products, ranging from hot pants to energy drinks (Market Wire, 2006). In addition, celebrity endorsement can bring out several positive effects. They are that advertisements become believable (Kamins et al, 1989), message recall is enhanced (Friedman and Friedman, 1979), recognition and perception of brand names is improved and attitudes about products with low purchase involvement are affected (Petty et al, 1983; Till et al, 2006), positive attitudes about brands result (Kamins et al, 1989), and distinct personalities and appeals for products and brands are created (McCracken, 1989 & Dickenson, 1996). Moreover, celebrity endorsements are believed to generate a greater likelihood of customers choosing the endorsed brand (Heath et al, 1994; Kahle and Homer, 1985; Ohanian, 1991). As a result, the use of celebrity endorsements is an advertising strategy that should enhance the marginal value of advertisement expenditures and create brand equity by means of the secondary association of a celebrity with a brand (Keller, 1993). Meanwhile, research indicates that celebrity endorsements can result in more favourable advertisement ratings and product evaluations (Dean and Biswas, 2001). Notably, some of the most difficult aspects of global marketing to grasp are host countries cultural roadblocks such as time, space, language, relationships, power, risk, masculinity, femininity and so on (Mooij, 1994; Hofstede, 1984). Under this situation, celebrity endorsements are a powerful device by which to enter foreign markets; and celebrities with world-wide popularity can help companies break through many such roadblocks (Erdogan, 1999). For instance, Pizza Hut International increased its global market share through utilising global celebrities such as supermodels Cindy Crawford and Linda Evingelista. On the other hand, there are also many potential disadvantages and hazards in utilising celebrities as endorsers as a part of marketing communication strategy. Firstly, benefits of using celebrities can reverse markedly if they, for example, suddenly change image, drop in 19

20 popularity, get into a situation of moral turpitude, lose credibility by over-endorsing or overshadow endorsed products (Cooper, 1984; Kaikati, 1987). Secondly, negative information about a celebrity endorser not only influences consumers perception of the celebrity, but also the endorsed product (Klebba and Unger, 1982; Till and Shimp, 1995). Thirdly, another common concern is that consumers will focus their attention on the celebrity and fail to notice the brand being promoted (Rossiter and Percy, 1987). Fourthly, celebrities who are blamed for negative events such as accidents can have detrimental influence on the products they endorse (Louie and Obermiller, 2002). Besides, Mowen and Brown (1981) argue that if a celebrity s image ties in with many brands/products, impact and identity with each product may lessen since the relationship between the celebrity and a particular brand is not distinctive. This can not only compromise the value of the celebrity in the eyes of star s fans (Graham, 1989), but also can make consumers overtly aware of the true nature of endorsement that has less to do with brand/product attributes, and more to do with generous compensation for the celebrity, leading consumers to overt doubt about their motives, so as to cause the negative influences on consumer attitudes and purchase intentions among the multiple products endorsed by celebrities (Cooper, 1984; Tripp et al, 1994). Models on Celebrity Endorsement Strategy As selecting celebrity endorsers is not an easy task, many scholars have attempted to construct models to assist selecting of celebrity endorsers. Hovland et al (1953) conceptually contributed one of the earliest models, which is Source Credibility Model. Subsequently, the Source Attractiveness Model (McGuire, 1985), the Product Match-Up Hypothesis (Forkan, 1980; Kamins, 1989, 1990), and the Meaning Transfer Model (McCracken, 1989) was presented through empirically researches in turn. The Source Credibility Model and Source Attractiveness Model are categorised under the generic name of Source Models since these two models basically inform and reflect research of the Social Influence Theory/Source Effect Theory, which argues that various characteristics of a perceived communication source may have a beneficial effect on message receptivity (Kelman, 1961; Meenaghan, 1995). 20

21 The Source Credibility Model The source credibility model views that the effectiveness of a message depends on perceived level of expertise and trustworthiness in an endorser (Hovland and Weiss, 1951; Hovland, et al, 1953; Dholakia and Sternthal, 1977; Ohanian, 1991; Solomon, 1996; Lafferty and Goldsmith, 1999; Lafferty et al, 2002), which means that information from a credible source (e.g. celebrity) can influence beliefs, opinions, attitudes, and/or behaviour via a process called internalisation, which occurs when receivers accept a source influence in terms of their personal attitude and value structures (Erdogan, 1999). Trustworthiness refers to the honesty, integrity and believability of an endorser depending on target audience perceptions (Erdogan, 1999). Advertisers capitalise on the value of trustworthiness by selecting endorsers who are widely regarded as honest, believable, and dependable (Shimp, 1997). Smith (1973) argues that consumers view untrustworthy celebrity endorsers as questionable message sources regardless of their other qualities. Friedman, et al (1978) addressed that trustworthiness is the major determinant of source credibility and then tried to discover that likeability was the most important attribute of trust. Thus, they recommended advertisers to select personalities who are well liked when a trustworthy celebrity is desired to endorse brands. However, Ohanian (1991) found that trustworthiness of a celebrity was not significantly related to customers intentions to buy an endorsed brand. Furthermore, Desphande and Stayman (1994) confirmed the hypothesis that endorser s ethnic status could affect endorser trustworthiness and brand attitudes, because people trust endorsers who are similar to them. Their findings implied that when targeting particular ethnic groups such as Africans and Asians, ethnic background should be carefully evaluated. Expertise is defined as the extent to which a communicator is perceived to be a source of valid assertions and refers to the knowledge, experience or skills possessed by an endorser. Hovland et al (1953) and Ohanian (1991) believed that it does not really matter whether an endorser is an expert, but all that matters is how the target audience perceives the endorser. However, Aaker and Myers (1987) advocated a source/celebrity that is more expert to be more persuasive and to generate more intentions to buy the brand (Ohanian, 1991). Hence, expert sources influence perceptions of the product s quality (Erdogan, 1999). Meanwhile, Speck et al (1988) found that expert celebrities produced higher recall of product information 21

22 than non-expert celebrities, even though the difference was not statistically significant. Moreover, celebrities professional accomplishments and expertise may serve as a logical connection with the products, and consequently make the endorsement more believable to consumers (Till and Busler, 2000). In addition, many researchers advocated that a message recipient s initial opinion is an important determinant of influence through utilising the cognitive response theory (Karlins and Abelson, 1970; Harmon and Coney, 1982; Stenthal, et al, 1978). This theory supports that if individuals have a positive predisposition toward the message issue, a source who lacks credibility can be more persuasive than a high credibility source, since those favouring the advocacy will feel a greater need to ensure that a position with what they agree is being adequately represented (Aaker and Myers, 1987). Conversely, if individuals have a negative disposition, a high credibility source is more persuasive than a less credible source since the highly credible source is thought to inhibit individuals own thought activation and facilitate acceptance of message thoughts. Consequently, Erdogan (1999) concluded that findings in source credibility studies are equivocal; meanwhile, what factors construct source credibility and what factors are more important than others in certain situations is still ambivalent. Moreover, Pornpitakpan (2003) criticised that major problems of this model are that most of these research finding did not evaluate the reliability and validity of their scales to measure source credibility and that the different operationalizations made it difficult to compare results across studies. Measuring source credibility in selecting celebrity Based on above criticism, it is quite reasonable to make sense that a source s credibility is totally subjective, but research shows that in spite of individual preferences, a high degree of agreement exists among individuals (Berscheid et al, 1971). Patzer (1983) developed the Truth-of-Consensus method to assess a source s credibility and attractiveness. The method is based on the foundation that individual s judgements of attractiveness and credibility are naturally subjective, but these judgements are shaped through Gestalt principles of person perception rather than single characteristics. Notably, on the basis of extensive literature review and statistical tests, Ohanian (1990) constructed a tri-component celebrity endorser credibility scale, (see Table 2) which assumes 22

23 that credibility and effectiveness of celebrity endorsers is associated with given characteristic dimensions, even though McCracken (1989) argued that the celebrity world consists of much more just attractive and credible individuals. Table 2: Source Credibility Scale Attractiveness Trustworthiness Expertise Attractive-Unattractive Trustworthy-Untrustworthy Expert-Not Expert Classy-Not Classy Dependable-Undependable Experience-Inexperienced Beautiful-Ugly Honest-Dishonest Knowledgeable-Unknowledgeable Elegant-Plain Reliable-Unreliable Qualified-Unqualified Sexy-Not Sexy Sincere-Insincere Skilled-Unskilled Source: Ohanian, R (1990) Construction and validation of a scale to measure celebrity endorser s perceived expertise, trustworthiness and attractiveness, Journal of Advertising, p39-52 More recently, Pornpitakpan (2003) conducted a research to verify the Ohanian s (1990) celebrity endorsers credibility scale through using four Chinese celebrities as stimuli and 880 Singaporean undergraduates as respondents, and therefore concluded that the Ohanian s scale can be used to minimize the chance of costly mistakes in choosing inappropriate celebrities. The Source Attractiveness Model Advertisers have chosen celebrity endorsers on the basis of their attractiveness to gain from dual effects of celebrity status and physical appeal (Singer, 1983). Meanwhile, research showed that physically attractive endorsers are more successful at changing beliefs (Baker and Churchill, 1977; Chaiken, 1979; Debevec and Kernan, 1984).and generating purchase intentions (Friedman et al, 1976; Petroshius and Schuman, 1989; Petty and Cacioppo, 1980) than those unattractive individuals. Hence, McGuire (1985) conducted an empirical research to contend that the effectiveness of a message depends on similarity, familiarity and liking for an endorser. The McGuire (1985) model holds that sources who are known to, liked by, and/or similar to the consumer are attractive and, persuasive. The source attractiveness model also rests on social psychological research (McCracken, 1989). Meanwhile, Cohen and Golden (1972) suggested that physical 23

24 attractiveness of an endorser determines the effectiveness of persuasive communication through a process called identification, which is assumed to occur when information from an attractive source is accepted as a result of desire to identify with such endorsers. Petty and Cacioppo (1980) conducted attractiveness of endorsers in terms of a shampoo advertisement to comprehend effectiveness of advertising message types. In 1983, Petty et al replicated the earlier study in Their findings emphasize the interaction between involvement level and endorser type. Under low-involvement conditions, the endorser type had a significant impact on attitudes towards the product even though no impact was found on behavioural intentions. With respect to recall and recognition measures, findings indicated that exposure to celebrity endorsers increased recall of the product category only under low-involvement conditions. Besides, the endorser type manipulation revealed that celebrities had marginally significant impact on brand name recall over typical citizens. Patzer (1985: p30) stated that physical attractiveness is an informational cue; involves effects that are subtle, pervasive, and inescapable; produces a definite pattern of verifiable differences; and transcends culture in its effects. Patzer argues that people usually inflate their own attractiveness so that attractive endorsers should be more effective than average looking endorsers. Kahle and Homer (1985) operated celebrity physical attractiveness and likability and measured attitude and purchase intentions on the same product: Edge razors. Findings indicated that participants exposed to an attractive celebrity liked the product more than participants exposed to an unattractive celebrity. Recall for the brand was greater both in attractive and likeable celebrity conditions. However, unlikeable celebrities unexpectedly performed better on recognition measures than likeable and attractive celebrities. Meanwhile, findings proved that an attractive celebrity created more purchase intentions than unattractive celebrity, but conversely an unlikeable celebrity produced more intentions to buy the product than a likeable celebrity. Quite significantly, studies by Cabalero (1989) and Till and Busler (1998) demonstrate that positive feelings towards advertising and products do not necessarily translate into actual behaviour or purchase intentions. A possible reason for the lack of celebrity endorsers effect on intentions to purchase is that celebrity endorsement seems to work on the cognitive and 24

25 affective components of attitudes rather than the behavioural components (Baker and Churchill, 1977; Fireworker and Fiedman, 1977). In terms of gender impact between endorsers and target audiences, Debevec and Kernan (1984) found that attractive female model generated more enhanced attitudes than attractive male models across both genders and particularly among males. Conversely, Cabalero et al (1989) found that males showed greater intentions to buy from male endorsers and females hold greater intentions to purchase from female endorsers. Furthermore, Baker and Churchill (1977) found a rather unexpected interaction among female models, product type and intentions to purchase products among male subjects. For instance, when the endorsed product was coffee, an unattractive female model created more intentions to buy the product than her attractive counterpart among males, whereas when it was perfume or aftershave, males reacted more positively to an attractive female model. However, Petroshius and Schulman (1989) found that endorsement gender had no impact on attitudes towards advertisements and no major impact on intentions to buy products. Consequently, based on above disparate and controversial arguments, there is no consistent and coherent direction in terms of gender interactions between endorsers and target audiences to aid practitioners. In brief, it is apparent that attractive celebrity endorsers enhance attitudes and recall towards advertising and brands than unattractive celebrity endorsers, however there is no consistent agreement in relation to creating purchase intentions, even though a few studies found that celebrities can create purchase intentions. The Product Match-Up hypothesis Forkan (1980) and Kamins (1990) conducted empirical experiment to test the Product Match-up Hypothesis, which contends that messages conveyed by celebrity image and the product message should be congruent for effective advertising. The determinant of the match between celebrity and brand depends on the degree of perceived fit between brand such as brand name and attributes and celebrity image (Misra, 1990). Advertising a product via a celebrity who has a relatively high product congruent image leads to greater advertiser and celebrity believability (Levy, 1959; Kamins and Gupta, 1994; Kotler, 1997). Importance of proper match-up between celebrities and products has been emphasised. From 25

26 practitioner s perspective, a senior vice president of a leading beverage company states that celebrities are an unnecessary risk unless they are very logically related to products (Watkins, 1989). Another practitioner quoted by Bertrand and Todd (1992) argued that if there is a combination of an appropriate tie-in between the company s product and the celebrity s persona, reputation or the line of work that the celebrity is in, advertisers can get both the fame and the tie-in working for them. Meanwhile, many studies report that consumers also expect congruity between celebrity endorsers perceived images and their endorsed products (Callcoat and Phillips, 1996; Ohanian, 1991; O Mahony and Meenaghan, 1997). Otherwise, Evans (1988) argued that if celebrities do not have a distinct and specific relationship to the product they endorse, the use of celebrities could produce the Vampire effect, which occurs when the audience remembers the celebrity, but not the product or service. Meanwhile, the absence of connection between celebrity endorsers and products endorsed may lead consumers to the belief that the celebrity has been bought to endorse the product/service (Erdogan, 1999). Significantly, the proper match-up between a celebrity and a product has been based on celebrity physical attractiveness, and the match-up hypothesis predicts that attractive celebrities are more effective when endorsing products used to enhance one s attractiveness (Kahle and Homer, 1985; Kamins, 1990). Research also identifies that characteristics of a celebrity interact positively with the nature of the product endorsed (Friedman and Friedman, 1979; Kamins, 1990; Lynch and Schuler, 1994). Choi and Nora (2005), who used a cognitive approach that focuses on consumers attributions of celebrity endorsement motives, emphasised that the level of celebrity and product congruence will influence celebrity endorsement effectiveness through the process of consumer attributions of the celebrity s motive for associating him or herself with the particular product and the subsequent effect of these attributions on the consumer evaluations of the endorser, the advertising, and the brand involved in the endorsements. Surprisingly, Kamins and Gupta (1994) found that the match-up between a celebrity endorser and the endorsed brand also enhances the celebrity endorser s believability and attractiveness. Furthermore, the match-up hypothesis is important for credibility and favourable attitudes (Till et al, 2006). Friedman and Friedman (1978) found that celebrity endorsers are more appropriate where 26

27 product purchases involve high social and psychological risk. Meanwhile, Kamins (1989) and Kamins, et al (1989) found that celebrity endorsers were able to generate desired effects on high financial and performance risk products/services such as management consultation and computers. Conversely, Callcoat and Phillips (1996) reported that consumers are generally influenced by endorsers if products are inexpensive, low-involving and few differences are perceived among available brands. As a result, these contradictory arguments lead to the conclusion that advertising is a powerful mechanism of meaning transfer that virtually any product can be made to take any meaning (McCraken s 1987; O Mahony and Meenaghan, 1997). The almost studies in terms of evaluating celebrities endorser and endorsed products/brands are using consumer samples. Only one study by Miciak and Shanklin (1994) investigation considered advertising practitioners when choosing celebrity endorsers based on a small sample including 21 agencies and 22 company practitioner. Remarkably, more recently, Erdogan et al (2001) investigated a larger sample that is the 300 largest British advertising agencies (Campaign, 1997) to consider important celebrity characteristics from the practitioner s perspective when selecting an endorser by conducting exploratory interviews and a mail survey. Their findings provide implications for both theory and practice. At the theoretical level, the research firstly shows that managers do not see celebrities as unidimensional individuals such as attractive and credible when selecting celebrity endorsers, because celebrities are different from unknown endorsers as they represent a variety of meanings that are drawn from the roles they assume in television, film, politics, and so on (McCracken, 1989). Secondly, managers have implicitly incorporated the findings of product match-up hypothesis research in their decision-making. On the other hand, for practitioners, as none of the advertising agencies had any written documentation regarding celebrity endorsement strategy, Erdogan et al (2001) set the criteria through providing a possible check list of factors in Table 3 below, when practitioners select celebrity endorsers. 27

28 Table 3 Check-List of Factors for Selecting Celebrity Endorsers Erdogan et al (2001) Selecting celebrity endorser: the practitioner s perspective, Journal of Advertising Research, Vol 41, No 3 p44 However, DeSarbo and Harshman (1985) argue that neither the source credibility and attractiveness nor the match-up research is adequate in providing a heuristic for appropriate celebrity endorser selection, although the Match-Hp Hypothesis extends beyond attractiveness and credibility towards a consideration and matching of the entire image of the celebrity with the endorsed brand and the target audience. The Meaning Transfer Models McCracken (1989) organized a empirical research evaluating effectiveness of the endorser depends upon the meaning the person brings to the endorsement process in part. McCracken (1989) and Brierley (1995) pointed out that the number and variety of the meanings contained in celebrities are very large, which include status, class, gender, and age and personality and lifestyle types, more importantly, the cultural meanings existing in a celebrity go beyond the person and are passed on to the products. Fortini-Campbell (1992) argues that products just like people have personalities, and claims that people consume brands with personality characteristics like their own or ones they aspire to possess in celebrities. Similarly, according to Fowles (1996), advertisers rationale for hiring celebrities to endorse products is that people consume images of celebrities, and 28