THE IMPACT OF ENDORSER CREDIBILITY ON BRAND CREDIBILTY: THE MODERATING EFFECT OF INVOLVEMENT INTO THE PRODUCT CATEGORY. A Thesis

Transcription

1 THE IMPACT OF ENDORSER CREDIBILITY ON BRAND CREDIBILTY: THE INTO THE PRODUCT CATEGORY A Thesis Presented to the Faculty of ISM University of Management and Economics in Partial Fulfilment of the Requirements for the Degree of Master of International Marketing by Izabelė Žvinytė May 2017

2 2 Abstract This research aims to examine the impact of endorser credibility on brand credibility, taking into account the moderating effect of involvement into the product category. Besides the primary goal of the thesis, other relationships are going to be explored as well: the relationship between brand credibility and brand loyalty; the direct and indirect effects of endorser credibility on brand loyalty. The proposed relationships were developed using associative network memory model, brand signalling theory, and elaboration likelihood theory. Quantitative research was conducted in order to test the proposed links. The results suggest that endorser credibility has a direct positive impact on brand credibility. It was found that endorser credibility brand credibility relationship did not vary when involvement into the product category is present. Moreover, the research supported the positive impact of brand credibility on brand loyalty, in addition to, the existence of direct and indirect relationships between endorser credibility and brand loyalty. On behalf of the previous findings, the study demonstrates why managers benefit from investing in a celebrity endorsement strategy as there is a positive impact on the endorsed brand. This is explained by the findings of the research that demonstrate the positive relationship between endorser credibility, brand credibility, and brand loyalty. In general, this research paper is one of the few to test the relationship between endorser credibility and brand credibility. Additionally, the study captures Lithuanian consumers and shows that they are aware of celebrity endorsement strategy and its impact on brands. Due to issue of generalizability, empirical results may not be reliable and future research is needed. Keywords: endorser credibility, brand credibility, involvement into product category, brand loyalty, associative network memory model, brand signalling theory

3 3 Table of Contents List of Figures... 6 List of Tables... 7 Introduction... 9 Literature Review Brand Credibility Defining Brand and Brand Credibility Why Brand Credibility Matters? Endorser Credibility Defining Endorser and Celebrity Endorser Criteria for Celebrity Endorser Why Celebrity Endorsement Matters? Involvement into the Product Category Key Hypotheses Development The Relationship Between Endorser Credibility and Brand Credibility Associative Network Memory Model Brand Signaling Theory Involvement into the Product Category: Impact on Endorser Credibility Brand Credibility Link Elaboration Likelihood Theory The Relationship Between Brand Credibility and Brand Loyalty The Relationship Between Endorser Credibility and Brand Loyalty Additional Hypotheses The Relationship Between Engagement with Celebrities and Endorser Credibility... 40

4 4 The Relationship Between Familiarity with Endorser and Endorser Credibility Research Methodology Conceptual Model Research Design and Method Data Collection Method Sampling Process and Sample Size Data Analysis Method Variables and Measurement Scales Endorser Credibility Construct Brand Credibility Construct Involvement into the Product Category Construct Brand Loyalty Construct Engagement with Celebrities Construct Endorser Familiarity Construct Empirical Research Data Collection and Demographics Reliability Analysis Descriptive Statistics Normality Analysis Homoscedasticity Correlation Linearity Hypotheses Testing Model

5 5 Model Model Summary of Empirical Research Findings Discussion Implication of the Study and Contribution to the Literature Managerial Implications Limitations and Recommendations Conclusion References Appendices

6 6 List of Figures Figure 1. The effectiveness of celebrity endorsement Figure 2. Conceptual model of the research Figure 3. Illustration of Model Figure 4. Illustration of Model

7 7 List of Tables Table 1 Final Hypotheses List Table 2 Construct of Endorser Credibility Table 3 Construct of Brand Credibility Table 4 Construct of Involvement into the Product Category Table 5 Construct of Brand Loyalty Table 6 Construct of Engagement with Celebrities Table 7 Construct of Endorser Familiarity Table 8 Descriptive Statistics of Respondents: Gender and Age Table 9 Internal Consistency and Reliability Test Results Table 10 Summary of Descriptive Statistics: Constructs Table 11 Descriptive Statistics of Nationality Table 12 Descriptive Statistics of Endorsers Table 13 Descriptive Statistics of Brands Table 14 Tests for Normality Table 15 Interpretation of Correlation Results Table 16 Results of Spearman Correlation Table 17 Moderated Mediation Model Summary (Outcome - Brand Credibility) Table 18 Summary of the Hypotheses Test Results: H1 and H Table 19 Moderated Mediation Model Summary (Outcome - Brand Loyalty) Table 20 Summary of the Hypotheses Test Results: H3 and H Table 21 Moderated Mediation Model (Direct and Indirect Effects) Table 22 Moderated Mediation Model (Index) Table 23 Mediation Model (Total Effects)... 74

8 8 Table 24 Mediation Model (Outcome Brand Credibility) Table 25 Mediation Model (Outcome - Brand Loyalty) Table 26 Mediation Model (Total, Direct, and Indirect Effects) Table 27 Summary of the Hypotheses Tests Results: H Table 28 Model 3: ANOVA Table 29 Model 3 Summary Table 30 Model 3: Linear Regression Coefficients Table 31 Summary of the Hypotheses Tests Results: H6a and H6b Table 32 Summary of the Hypotheses Tests Results... 81

9 9 Introduction Relevance of the Topic The use of celebrity endorsement has been a popular trend around the globe (Erdogan, 1999; Keller, 2003) dating back to the 19th century (Erdogan, 1999). Companies invest large sums of money to have celebrity endorsers in their advertisements hoping to achieve returns on their investments (Erdogan, 1999; Roozen & Claeys, 2010). The popularity of celebrity endorsement is reflected in numbers. Currently, in the United States every one out of four commercials use celebrity endorsers (Euromonitor International, 2017). In Germany the number is lower, representing 16%. In the meantime, the celebrity culture is more prominent in Asian economies (Euromonitor International, 2017). To be specific, 48% of all Japanese commercials feature a celebrity endorser (Hetsroni, 2012). Moreover, celebrities appear in 50% of all Korean commercials. The mismatch between Western and Asian economies is linked with cultural differences (Hetsroni, 2012). Asian countries prefer emotional and symbolic appeals expressed by celebrity endorsers while Western economies are more informationoriented (Hetsroni, 2012). Nowadays, celebrities are used not only for traditional marketing campaigns of consumer goods but also for political purposes as indicated by Morin, Ivory and Tubbs (2012). According to Popkin (1991), voters use shortcuts to gather information about the campaigns. In other words, voters use celebrity endorsers as a credible source of information about political candidates. An example of celebrity endorsement in political surroundings could be Oprah Winfrey which endorsed Barack Obama, a candidate for the 2008 presidential elections in the United States (Pease & Brewer, 2008). The use of celebrity endorsers in the advertisements is not that popular strategy in Lithuania (Valentinaitienė, 2016) compared to the United States or Asian countries. Even though this phenomenon is less frequent in Lithuania there are famous cases where celebrities

10 10 are included in local advertising campaigns (e.g. Benediktas Vanagas as endorser for Aras, Agnė Jagelavičiūtė Rasa, Arvydas Sabodis Lidl). Athlete celebrities, such as basketball player Arvydas Sabonis or swimmer Rūta Meilutytė, are found to be the most frequently used in the advertisements (Valentinaitienė, 2016). This is true because athletes have a positive image and are known locally. Celebrities are chosen based on their similarities with the endorsed brand. For example, Arvydas Sabonis together with the endorsed brand Lidl shares similar values: aspiration for traditions, importance of family, healthy and qualitative food. It has been observed that celebrity endorsers have positive impact on sales (Valentinaitienė, 2016). The reasoning behind is that, celebrity endorsers capture attention to the brand. On the other hand, not all celebrity endorsements are successful (Valentinaitienė, 2016). For example, a famous Lithuanian tenor Merūnas Vitulsikas was chosen to endorse the cheap food retail chain Norfa. Mismatch between a celebrity's image and a brand s image resulted in unsuccessful campaign. In general, in Lithuanian market, there is lack of celebrities that could be used as endorsers for brand (Valentinaitienė, 2016). Credibility of the endorser is a key determinant in the effectiveness of advertisement (Ohanian, 1990). In this paper the credibility of celebrity endorser will be described on the basis of source-credibility model developed by Ohanian (1990). According to this model, perceived attractiveness, trustworthiness and level of expertise determine the credibility of the endorser (Ohanian, 1990). Credible celebrity endorser influences purchase intentions (Wang, Cheng & Chu, 2013, Muda et al, 2014) and increases sales (Elberse & Verleun, 2012; Muda, et al, 2014). Besides that, celebrity endorser used in advertising leads to positive attitude towards the advertisement (Aziz, Ghani and Niazi, 2013; Knoll & Matthes, 2016; Muda et al, 2014; Saeed et. al, 2014). In addition, it has been observed that celebrity endorser has a favourable impact on the

11 11 endorsed brand and brand credibility (Cornwell, Pappu & Spry, 2011). The term brand credibility stands for the believability of the product information contained in a brand, which requires that consumers perceive that the brand has the ability (i.e., expertise) and willingness (i.e., trustworthiness) to continuously deliver what has been promised (Erdem & Swait, 2004, p. 192). As stated by Erdem and Swait (1998), brands that invest more resources into marketing activities, for example, advertising, experience higher brand credibility. Since celebrity endorsement is a marketing activity, it seems that credibility of an endorser should positively influence the brand. In other words, credibility of the celebrity should lead to higher brand credibility. The associate network memory model and brand signalling theory are used to draw the relationship between two variables. Associative network memory model describes human memory on the basis of nodes and associations (Keller, 2003). Nodes stand for the information while associations indicate links related to that information (Keller, 2003). At the beginning, nodes of the celebrity and the brand are unconnected (Shimp & Till, 1998). They become linked through endorsement process. Each of these nodes possess their own associations (Cornwell, Pappu & Spry, 2011). While celebrity endorser and the brand are repeatedly paired, they become a part of each other s association set (Shimp & Till, 1998) through endorsement process (Dwivedi, Johnson & McDonald, 2015). Over the time, two nodes are linked in such a way that thinking of the brand would activate celebrity node and vice versa (Shimp &Till, 1998). The basic assumption of this model is that associations related to the celebrity, are transferred to the brand. As a result, the credibility of an endorser will subsequently transfer to the brand. In the meantime, brand signalling theory explains how credibility of endorser could be transferred to the brand, so that the following becomes credible as well (Cornwell, Pappu & Spry, 2011). Based on the founders of brand signalling theory (Erdem & Swait, 1998),

12 12 advertisement strategy, including endorsement, contributes to creating brand signals. In turn, brand signals create brand credibility. All in all, credible endorser has an impact on brand credibility. Additionally, brands that dedicate more resources for marketing activities are considered more credible. As a result, brands that employ celebrity endorsement strategy should experience higher brand credibility. Based on two models the following relationship is established: the credibility of a celebrity endorser will positively impact the credibility of the endorsed brand. Besides the direct relationship between endorser credibility and brand credibility, there are moderating effects that could potentially strengthen the relationship. All in all, by analysing the impact of celebrity endorsement on the brand presented in the advertisements, it is important to take into account the involvement into the product category. However, the impact of level of involvement on endorser credibility brand link is contradictory in the literature. On the one hand, academic literature supports arguments that celebrities are appropriate for high-involvement situations (Atkin & Block, 1983; Friedman & Friedman, 1979). Attractiveness of endorser may increase customers involvement in the case when high involvement products lack qualitative selling arguments (Kahle & Homer, 1985). On the other hand, celebrities are more appropriate for low-involvement situations (Cacioppo & Schumann, 1983; Petty, Roozen & Claeys, 2010; Saleem, 2007). According to academic scholars (Petty, Cacioppo & Schumann, 1983; Saleem, 2007), characteristics of endorser play a dominant role in the advertisements of low-involvement products. While purchasing low involvement products consumers have a limited amount of time to process the presented information (Erdem & Swait, 2004). In the meantime, in the context of high-involvement products consumers decisions are influenced by cognitive processing of information that requires argumentation (Miniard et al, 1991; Zhang & Zinkhan, 2006). Elaboration likelihood model is used to explain

13 13 the moderating role of involvement into the product category. Even though the primary goal of the thesis is to explore the relationship between endorser credibility and brand credibility, the paper contributes to the academic literature by exploring the relationship between endorser credibility, brand credibility and brand loyalty. Brand signalling theory is also used to draw the relationship between brand credibility and brand loyalty. According to brand signalling theory, consumers are uncertain about product quality (Erdem & Swait, 1998). They face risks and uncertainty that arise from information asymmetry (Jeng, 2016). Brands that are credible increase perceived quality, reduce perceived risk, lower information cost (Erdem & Swait, 1998) and in turn contribute to creating high expected utility to customers. All in all, increased perceived expected utility leads to customer satisfaction that could potentially result in loyal behaviour. Based on theoretical insights, it is expected that brand credibility should have a direct positive impact on brand loyalty. Moreover, associative network memory model explains the direct and indirect link between endorser credibility and brand loyalty. This model indicates that celebrity endorsement strategy encourages brand awareness, including brand recall and brand recognition. This condition is needed in order to build brand loyalty (Aaker, 1991; Keller, 2003). Thus, it is expected, that endorser credibility should have direct and indirect effects on brand loyalty. Research Question and Goal All in all, the central research question is the following: what impact does endorser credibility have on brand credibility taking into account the involvement into the product category? Therefore, the primary goal of the research is to test what impact does the endorser credibility has on brand credibility taking into account the moderating effect of involvement into the product category. Following this research, product involvement should moderate the relationship between endorser credibility and brand credibility. Besides the primary goal of the

14 14 research, other relationships are going to be explored: the relationship between brand credibility and brand loyalty; the direct and indirect effect of endorser credibility on brand loyalty. Objectives of the Thesis: To examine literature review in reference to endorser credibility, brand credibility, brand loyalty, and involvement into the product category; To prepare conceptual model; To conduct empirical research of consumers in order to gain insights of the hypothesized relationships: the impact of endorser credibility on brand credibility, considering the moderating impact of involvement into the product category; the relationship between brand credibility and brand loyalty; the direct and indirect effect of endorser credibility on brand loyalty; To present empirical findings that will enhance understanding of the relationship between endorser credibility; brand credibility, and brand loyalty; To discuss contribution to the academic literature, managerial implications, limitations and future recommendations. Research Design: The paper applies quantitative research design. This design is chosen as it seeks to test hypotheses and examine relationships between variables (Malhotra, 2007). Besides, quantitative design allows to make inferences from the sample about the population (Malhotra, 2007). Finally, the chosen design type ensures generalizability and reliability of the findings (Conrad & Serlin, 2011). Scientific Novelty of the Research: The endorser credibility-brand credibility link is relatively new in academic

15 15 literature. Only a few academic articles explored the relationship between two variables in terms of credibility (Cornwell, Pappu & Spry, 2011; Wang, Kao & Ngamsiriudom, 2017). The relationship between endorser credibility and brand credibility taking into account the moderating variable of involvement into the product category has not been explored so far in academic scholars; The moderating effect of involvement into product category is measured using a continuum scale. It is a relatively new way to measure involvement construct; Even though the relationship between brand credibility and brand loyalty has been studied in academic literature, the results are based on the sample from customers of service providers (Alam, Arshad & Shabbir, 2012; Sweeney & Swait, 2008). The empirical findings of this research paper are based on the sample from customers of fast moving consumer goods; There are no academic scholars that use brand credibility as a mediator to measure the relationship between endorser credibility and brand loyalty; Academic articles regarding endorser-brand link are mainly based within the US market. Little has been known about the celebrity endorsement within the Baltic region. Sequence of the Thesis: The paper consists of four parts: Literature review. This section examines academic literature in terms endorser credibility, brand credibility, and brand loyalty; Research methodology. In this part of the paper conceptual model as well as hypothesized links are introduced. In order to test the presented relationships,

16 16 quantitative method is used. To be specific, survey method is employed in order to gather primary data. The respondents of the survey are of Lithuanian origin. All constructs are measured on seven point Likert scale; Empirical research. The section starts by presenting descriptive statistics of the data. Then, reliability and validity of each construct is considered. Thirdly, assumptions for running the regressions are tested, including normality and correlation. Finally, hypotheses testing is performed; Discussion. Based on the findings of the empirical research, the final part of the paper covers contribution to the academic literature, managerial implication of the findings, limitations of this paper, and recommendations for future research.

17 17 Literature Review The following chapter presents the literature review regarding brand credibility, endorser credibility and involvement into the product category. Brand Credibility The following section covers literature in terms of definition of brand and brand credibility. Additionally, it presents arguments why credibility is a key component of a successful brand. Defining Brand and Brand Credibility The brand is identified by logo, name, symbol, or design (Keller, 2003). Those tools are used to differentiate one seller from others and stand out from competitors (Keller, 2003; Kotler, 1997). In other words, brands help to distinguish the same products or services provided by separate companies. In addition, the existence of brands solves the complex decision making process (Keller, 2003; Kotler & Keller, 2008). On the side of consumers, brands lower search costs for products and act as a risk-handling device (Keller, 2003). Credibility is an important tool to overcome the perceived risk and, in turn, build a strong brand. As a result, brand credibility is a central concern of this research paper. Moving on, the brand is considered credible if it has the ability to deliver its promises. Besides its ability, the brand should be willing to do so (Erdem & Swait, 2004). In other words, the brand should have expertise and trustworthiness (Erdem & Swait, 2004). Expertise is related to brand innovativeness while trustworthiness is the ability of the brand to keep customer s interests in mind (Keller, 2013). According to Erdem and Swait (2004), expertise and trustworthiness are being formed through continuously performed marketing activities (Erdem & Swait, 2004). As stated by Erdem and Swait (1998), brands that invest more resources into marketing activities, for example, advertising, experience higher brand

18 18 credibility. Additionally, higher brand credibility is linked with coherency in marketing activities and structure in marketing strategies (Baek, Kim, & Yu, 2010). All in all, it seems that brand credibility is built through brand investments as well as consistency in the marketing strategy (Baek, Kim, & Yu, 2010). In the meantime, Keller (2013) adds the third dimension to two dimensional definition - likability, which stands for the brand that is fun and worth spending time with. However, this paper rests on two dimensional definition of brand credibility. Why Brand Credibility Matters? Brand credibility could have positive impact on consumers as well as company owners. Academic literature (Aaker, 1991; Erdem & Swait, 1998; Keller, 2003; Sweeney & Swait, 2008) provides arguments that brand credibility could bring advantages: it contributes to overcoming asymmetric and imperfect information present in the market, builds brand equity, facilitates favourable purchase intentions. Most importantly, brand credibility contributes to creating brand loyalty. To start with, brand credibility acts as a tool to overcome asymmetry of information present in the market (Erdem & Swait, 2004). Consumers do not have all the information about the products and brands. When this problem of asymmetric and imperfect information arises, the consideration set of consumers is affected. To be specific, consumers face risks and uncertainty regarding the brands and choose those brands with higher brand credibility (Erdem & Swait, 1998). All in all, it means that credible brands create benefits to consumers by reducing information gathering costs, perceived risks and uncertainty. Secondly, according to the research of Erdem and Swait (1998), brand credibility contributes to building and managing brand equity. Brand equity, which is seen as value to customers, is created by lowering or eliminating perceived risks and uncertainty (Erdem &

19 19 Swait, 1998). In other words, credible information, creates consumer-based brand equity which is appreciated by consumers. On the contrary, Keller (2003) adds conflicting arguments. Brand equity is formed through brand associations and brand image (Keller, 2003). In addition, brand equity is not the result of lower perceived risk and smaller information gathering and processing costs. Thirdly, brand credibility facilitates favourable purchase intentions. Brand credibility which is used as a signal for product and service quality (Erdem & Swait, 1998), increases customers confidence (Baek, Kim, & Yu, 2010). Confidence is linked with positive evaluation of the product. As a consequence, a highly credible brand could have a favourable influence on customers purchase intentions (Wang & Yang, 2010). Likewise, Aaker adds (1991) that besides higher perceived quality other two constructs, including lower information gathering costs and lower risks associated with the product, contribute to favourable purchase intentions. In their research paper, Wang and Yang conclude (2010) that brand credibility contributes to purchase intentions through important moderators: brand awareness and brand image. Erdem and Swait (2004) explain favourable purchase intention through brand signalling theory. According to the theory, brand credibility increases perceived expected utility which is distinguished by favourable purchase intention. The impact of brand credibility on purchase intention was confirmed in airline sector (Jeng, 2016) and automobile industry (Wang & Yang, 2010). Finally, brand credibility has a positive effect on loyalty. This relationship is empirically justified in the academic literature (Alam, Arshad & Shabbir, 2012; Sweeney & Swait, 2008). Trust, which is an important component of credibility, is a key to building longterm customer relationships (Sweeney & Swait, 2008). Besides, Alam, Arshad and Shabbir (2012) add that perceived quality also leads to customer loyalty. In turn, trustworthiness and

20 20 perceived quality, expressed through brand credibility, contributes to building customer loyalty. This is particularly relevant for industries with high retention rate such as banks, telecommunications, and Internet services (Sweeney & Swait, 2008). Those companies are able to create long-term relationship with their users by providing perfect and accurate information. In such a way, service providers are satisfied as it is cheaper for them to maintain the existing customers than to attract the new ones (Sweeney & Swait, 2008). Additionally, satisfied and loyal customers generate positive word of mouth that could potentially bring more customers to service providers (Ghorban & Tahernejad, 2012). Moreover, Alam, Arshad and Shabbir (2012) explored how religion orientation moderates the link between brand credibility and brand loyalty. However, no justification for the moderation effect was found (Alam, Arshad & Shabbir, 2012). Endorser Credibility The following section starts by introducing definition of the endorser. Then, it presents the main types of endorsers and discusses their differences. Thirdly, advantages and disadvantages of using endorsement as a strategy would be presented. Finally, the section explains why endorser credibility is a key criterion for selecting the endorser. Defining Endorser and Celebrity Endorser It this section definitions of endorser as well as celebrity endorser are introduced. Mittelstaedt and Riesz (2000) define endorser as a particular figure used for the advertisement campaign. Endorsers typically express their favourable attitude towards the product or service (Mowen, 1980) in order to make the advertising campaign convincing. Based on the literature review, there are three types of endorsers: regular' consumers, experts and celebrities (Friedman, Termini & Washington, 1976). They differ in terms of their characteristics. Regular or typical consumers as endorsers tend to be similar

21 21 to consumers: they have general knowledge of the endorsed product, and their credentials are used for the advertisements (Freiden, 1984; Friedman, Termini & Washington, 1976). In addition, companies use regular consumers to build characters that are connected with the brand and product (Roozen & Claeys, 2010). As a result, brand becomes the central focus of the consumer, not the endorser (Roozen & Claeys, 2010). In the meantime, experts, in other words professionals, have superior knowledge about the endorsed product (Friedman, Termini & Washington, 1976). Their profession is used for the advertisements as a source of credibility. Thirdly, celebrity endorsers are famous for reasons not linked with the advertised products. Based on their achievement on particular areas, they are distinguished by sportspeople, artists, singers, writers, etc. According Biswas, Biswas, and Das (2006), celebrity endorsements are more frequent compared to expert endorsements, even though their use is on the increasing trend. In addition, celebrity endorsers are considered to be more effective in comparison with other types as they have distinguishable personality that can be transferred to the product (McCracken, 1989). Biswas, Biswas, and Das (2006) add that the effectiveness of each type of endorser differs in terms of advertised product. To be specific, products that are expensive, more involving, durable and more technologically advanced should be promoted by expert endorsers. In the meantime, celebrity endorsers should be used for low-involvement product categories. The reasoning behind is that celebrity endorsers act as peripheral cues that do not require extensive assessment of information and cognitive thinking as supported by elaboration likelihood theory (Bhagyashree & Sandip, 2015). As it was stated before, celebrities are the most popular type of endorsers. The term celebrity endorser stands for an individual who appreciates recognition and, in turn, uses this recognition for the advertising purposes (McCracken, 1989). Using celebrities for the advertisements is a famous marketing technique as chosen endorsers draw attention to the

22 22 brand and shape the perception of the brand (Keller, 2003). According to Dahlén et al. (2010), celebrity endorsement could be either explicit or implicit. The former stands for a clear partnership between celebrity and the brand, where celebrity makes a statement of endorsement. In the later one, celebrities create association of a high quality by using endorsed products. Criteria for Celebrity Endorser Altogether, there is no dominant theory in academic literature that explains the criteria for the selection of celebrity endorser. However, the most frequently used is source credibility model developed by Ohanian (1990). According to this model, credibility of the source is composed of three key characteristics: trustworthiness, expertise, and attractiveness. All of these dimensions are the key in advertisement effectiveness. Besides source-credibility model, others theories would be introduced that cover the endorser selecting criteria. To start with, literature supports sources credibility model (Barnes et al, 2012; Cornwell, Pappu & Spry, 2011; Ohanian, 1991). Based on the origins of the model, the effectiveness of the communication between the source (endorser) and receiver depends on two factors: trustworthiness and expertise (Hovland &Weiss 1951). Trustworthiness and expertise have to be perceived by the receiving public (Erdogan, 1999). The source may influence believes and attitudes of the receiver through internalisation process, which occurs when value structures are accepted (Erdogan, 1999). In this model, trustworthiness is defined as confidence in the source (Hovland & Weiss, 1951; Ohanian, 1990). In other words, individual should possess characteristics of honesty and integrity to be considered trustworthiness (Erdogan, 1999). In the meantime, expertise is related to endorser s knowledge, skills and know-how (Erdogan, 1999; Fleck, Korchia & Le Roy, 2012). Recent academic articles add one more dimension to two-dimensional sources credibility which is

23 23 attractiveness (Ohanian, 1990), defined as physical appearance (Fleck, Korchia & Le Roy, 2012). The importance of attractiveness has increased over time as more celebrities are used for advertisements (Ohanian, 1990). All in all, there are three main determinants of source credibility which are attractiveness, experience and trustworthiness. The pioneer researcher of the source-attractiveness model McGuire (1959), indicates that the effectiveness of the communication between the source (endorser) and receiver depends on three dimensions: familiarity, likability, and similarity. Familiarity stands for the knowledge about the endorser through the process of exposure, likability - is evaluation of physical attractiveness and behaviour, and similarly - is congruence between the endorser and the receiver (McCracken, 1989, Catli, Korkmaz & Sertoglu, 2014, Erdogan, 1999). Endorsers that are familiar, similar and likeable to the receivers are considered to be attractive and, in turn, persuasive (McCracken, 1989). According to Erdogan (1999), attractiveness is not bound by physical appearance. Receivers could link attractiveness to intellectual skills as well as personality traits. Thirdly, it is believed that the effectiveness of the celebrity endorsement depends on the fit between the celebrity and the brand. This is known as the match-up theory developed by Kahle and Homer (1985). The founders of this theory, Kahle and Homer (1985), focused their research on the congruence between endorser and the product taking into account the attractiveness of the endorser. In general, this theory predicts that in order for the advertisement to be effective, there should the congruence between the celebrity and the product/brand on the attractiveness basis (Kahle & Homer, 1985). To be specific, the greatest fit between the celebrity and the brand occurs when the endorser as well as the brand are attractive (Fleck, Korchia & Le Roy, 2012). This relationship is acknowledged in academic scholars (Austad & Silvera, 2004; Fleck, Korchia & Le Roy, 2012; Keel & Nataraajan, 2012). Other authors

24 24 introduce conflicting arguments. To support this statement, Till and Busler (1998) claim attractiveness is not a significant predictor, adding that expertise of the endorser provides better fit compared to physical attractiveness. Additionally, Lee argues (2000) that absence of congruence may produce positive outcome as consumers tend to process information in a more intense way. Finally, the meaning transfer theory introduced by McCracken (1989) elaborates on how the meaning is transferred from the endorser to the consumer. According to McCracken (1989) the meaning transfer occurs in three stages. Firstly, the image of the celebrity is created. Celebrities compared to non-celebrities add value to advertisements in a different way as they have a unique configuration of meanings. In other words, non-celebrity spokespersons possess features created by the company while celebrity endorsers have developed characteristics throughout the years (Erdogan, 1999). Moreover, celebrities have more power to deliver those meanings to the audience (McCracken, 1989). In the second stage, the meaning is transferred from endorser, celebrity, to the product. In this stage, the advertisement should emphasise those associations of the celebrity that are relevant to the product (Keller, 2003). In other words, relevant meanings of the celebrity are being transferred to the product through the communication tool (Keller, 2003). Finally, the meaning is transferred from the product to the consumer (McCracken, 2003). Why Celebrity Endorsement Matters? Using celebrities for endorsement is a common marketing strategy. However, there advantages (Knoll & Matthes, 2016; Muda et al, 2014) and costs (Erfgen, Zenker & Sattler, 2015; Shimp & Till, 1998; Um, 2013) associated with this technique. The outcomes of using celebrity endorser can be described using advertising effectiveness model developed by Laving and Steiner (1961) and adapted to the endorsement

25 25 context by Grewel et al (1997). According to this model, endorsement affects three different psychological dimensions: the cognitive, the affective, and the behaviour (Knoll & Matthes, 2016). In other words, celebrity endorser used in adverting should lead to positive attitude towards the brand, positive attitude towards the advertisement, and favourable purchase intentions (Muda et al, 2014). Each of these dimensions are discussed separately with respect to academic literature. Figure 1. The effectiveness of celebrity endorsement. Source: Grewel et al (1997) The cognitive dimension stands for the increased awareness of the endorsed brand. Celebrity endorsers act as triggers that draw attention and interest to the brand (Keller, 2003). In addition, Muda, Musa and Putit (2012) state that the use of celebrities in advertising is a tool to stand out from competition present in media environment. For example, Pizza Hut was able to increase global presence by using famous people such as Cindy Crawford for its marketing strategies (Erdogan, 1999). Chi, Yeh and Tsai (2011) and Friedman and Friedman (1979) add that celebrity endorsers evoke greater brand recall. The reasoning behind is that consumers recognise celebrity endorsers as people they know (Chi, Yeh & Tsai, 2011). As a consequence, they tend to evaluate positively brands endorsed by famous people. Secondly, affective dimension stands for the response to the advertisement due to

26 26 involvement of the celebrity. Consumer response, in other words, evaluation of the advertisement, could be favourable or unfavourable (Saeed et. al, 2014). As stated by Aziz, Ghani and Niazi (2013) and Muda et al (2014) the use of credible celebrity endorser leads to positive attitudes towards the advertisement. Physical attractiveness, trustworthiness, and expertise of the endorser are positively related to attitude towards the advertisement (Saeed et. al, 2014). The results are the same for both: celebrity endorser and non-celebrity. However, the strength of the relationship is stronger for celebrity endorser. In other words, celebrity endorser has higher impact on consumers attitude towards the advertisement compared to noncelebrity (Saeed et. al, 2014). According to Knoll & Matthes (2016), attitudes towards the advertisement increases with the higher congruence between the celebrity and the endorser object. Finally, behaviour dimension indicates that celebrity endorsement could evoke changes in behaviour such as purchase intentions. The positive link between celebrity endorsements and purchase intentions have been observed in the literature (Muda et al, 2014; Wang, Cheng & Chu, 2013). Positive attitude towards the brand and the advertisement are important variables that determine changes in purchase decision-making process (Muda et al, 2014). According to Ohanian (1991), expertise matters for the intention to buy while trustworthiness and attractiveness are insignificant factors. The reasoning behind is the following: trustworthiness is not considered to be a legitimate factor as endorsers are paid for the advertisement (Ohanian 1991). In the meantime, most of the endorsers chosen for the advertisement are attractive, as a result, attractiveness, is also not an influential factor in determining purchase behaviour (Ohanian, 1991). On the other hand, Kahle and Homer (1985) provide contrasting arguments indicating that purchase intension is determined by the attractiveness of the source. Moreover, Catli, Korkmaz, and Sertoglu (2014) state that three

27 27 dimensions, including expertise, trustworthiness and attractiveness, are related to favourable buying intentions in Turkey. The relationship is the same in the case of Singaporean market (Pornpitakpan, 2014). In addition, a study conducted by Harvard Business School concluded that a famous celebrity endorser could increase sales (Elberse & Verleun, 2012). Furthermore, Elbe's and Verleun indicated (2012) that professional athletes as celebrity endorsers have the most significant impact on sales compared to other types of endorsers. Even though it appears that there is a positive link between celebrity endorsement and the brand, there are also disadvantages related to this link. To start with, the celebrity could be overused for the advertisements. It means that the celebrity becomes associated with too many brands so that the unique association between the famous figure and endorsed brand is lost. As a result, the effectiveness of the endorsement is questionable (Tellis, 2004). Additionally, it results in negative evaluation of the celebrity. To be specific, celebrities could be perceived as less credible as they seek for financial returns (Austad & Silvera, 2004; Erdogan, 1999). In other words, consumers form an opinion that celebrities engage in advertisements due to the monetary benefits and do not have true interest in the product or service. Secondly, the celebrity used in advertisement campaign could overshadow the endorsed brand. In academic literature, this is described as the vampire effect (Erfgen, Zenker & Sattler, 2015). It happens when consumers remember the celebrity and not the advertised brand (Belch & Belch, 2001). This is common when there is no fit between the advertised brand and celebrity (Erfgen, Zenker & Sattler, 2015). To sum up, the higher the congruence between the brand and the celebrity endorser, the lower the vampire effect (Erfgen, Zenker & Sattler, 2015). As a result, Erfgen, Zenker, and Sattler (2015), suggest to use unknown endorsers to increase brand recall.

28 28 Finally, celebrity endorsement is a risky stagey as it could damage the image of the endorsed brand. McCracken (1989) indicates that this could happen knowing that the meanings of celebrities are transferred to the brand through endorsement process. For example, professional golf player, Tiger Woods, during the period of was an endorser for such brands as Nike, General Motors and American Express. In 2009 he become involved in infidelity and this was highly publicized. Negative information about the player forced companies to terminate endorsement contracts with him (Akturan, 2011) as they experienced decline in stock value (Um, 2013). Besides unacceptable behaviour, other features could damage the brand such as change of physical appearance, and decline in professional accomplishments (Keel & Nataraajan, 2012). Um adds (2013) that reaction depends on the level of consumers commitment to the brand. Low commitment leads to more negative evaluation of the brand when negative information appears. Moreover, negative information may have impact not only a particular brand but the whole product category, for example, competitors (Carrillat, d'astous, & Christianis, 2014). To be more specific, when brand is surrounded by negative information, it affects similar brands in a negative way and dissimilar brands in a positive way (Dahlen & Lange, 2006). Involvement into the Product Category To start with, there is no single accepted definition of involvement (Fill, 2005). As of Zaichkowsky (1985), and Wu and Wang (2011), involvement is related to an individual relevance of the product. The degree of relevance varies in terms of personal interest, or values. According to Fill (2005), involvement depends on the risks perceived by consumers. In general, product involvement is based on personal evaluation (Martin, 1998). To be specific, what is considered by one as high involvement product could be seen as low involvement product by other (Martin, 1998). Despite this fact, there are recognised

29 29 characteristics of low and high involvement products. Thus, in this section I present what differences are between low and high involvement products. According to Antil (1984), consumers less frequently purchase high involvement products compared to low involvement (Antil, 1984). In addition, high involvement products are more expensive and complex (Antil, 1984). High involvement products are more demanding in terms of decision making. To be specific, they require more time and effort in terms of information search. This is linked with higher perceived risks and monetary costs (Martin, 1998). In other words, if the wrong purchasing decision is made, it involves large costs and wasted time. Additionally, high involvement products have emotional appeal as well as symbolic meaning to customers. In this case, high involvement product could be wedding rings, photographs, photo albums, collections (Martin, 1998). According to Martin (1998), high involvement products are evaluated not on product related features but on emotional dimension. For example, high involvement products could have nostalgic value linked to previous experience. In addition, high involvement products are those that are socially visible and enhance consumer s sense of self. Based on this argument, Martin (1998) in his research paper investigated product categories by involvement levels and came to the conclusion that high involvement products are the following: clothing, shoes, automobiles, jewellery, watches. Martin argues (1998) that high involvement products are those that help to achieve important goals. For example, sport and fitness equipment is a high involvement product for the athlete as it plays important role in reaching personal aspirations. Consumers more frequently purchase and repurchase low involvement products compared to high involvement (Antil, 1984). Low involvement products are inexpensive. Based on finding of Martin (1998), the median price for high involvement product is US$50 in comparison with US$4 of low involvement product. In addition, low involvement products do

30 30 not require complex decision making regarding their purchase. In other words, low involvement products do not involve complicated cognitive thinking. According to Martin (1998), low involvement products are: books, magazines, food products, beverages, health and beauty aids, and paper products. Purchase of low involvement products are more influenced by price changes or number of advertisement compared to high involvement type of products. In other words, heuristics influence purchase of low involvement products ant not brand personality, which has impact on high involvement products. The classification of products into low and high involvement depends on the risk perception during the purchase process. Based on Friedman and Friedman (1979), there are four categories of risk perception: psychological, financial, social and operational. Psychological risks stand for the congruence between the product and self-image. Financial risk is linked with product price. Social risk is related with not belonging to the right reference group. Finally, operation risk indicates whether a product operates in the right way. Products that have low financial and operational risks are considered to be low involvement products (Roozen & Claeys, 2010).

31 31 Key Hypotheses Development This part of the paper introduces scientific theories, that propose a clear relationship between variables introduced in the previous section. Based on the theories, hypotheses are being formed. The Relationship Between Endorser Credibility and Brand Credibility The previous section presented the literature review regarding the relationship between celebrity endorser and brand covered in the literature. It is clear that there are different arguments in favour of positive (Knoll & Matthes, 2016; Muda et al, 2014) and negative (Erfgen, Zenker & Sattler, 2015; Um, 2013; Shimp & Till, 1998;) relationship between two variables. Associate network memory model and brand signalling theory are used to illustrate a positive direct relationship between endorser credibility and brand credibility. Associative Network Memory Model Associative network memory model explains the relationship between endorser credibility and brand credibility. This theory suggests that consumers memory is the associations network (Krishnan, 1996) composed of nodes and associations (Keller, 2003). Nodes stand for the information while associations are viewed as links between different nodes (Keller, 2003). To be specific, if brand and celebrity represent different nodes, then associations indicate the strengths of the link between two nodes. Before the endorsement process, the link between the celebrity endorser and the brand is weak. The association between the celebrity and the brand is strengthened through endorsement process as both nodes are paired repeatedly (Shimp & Till, 1998). Besides, each of the nodes have different associations (Keller, 2003), that could be positive and negative (Krishnan, 1996). Associations are formed over time (Krishnan, 1996) and they could reflect personal experience (Krishnan, 1996). After the endorsement process, the celebrity and the brand becomes a part of each other s association

32 32 set. It indicates that when celebrity node is activated, brand node is also affected. This also works the other way round meaning that thinking of the brand would activate celebrity node and vice versa (Shimp &Till, 1998). All in all, it can be concluded that if endorser is perceived as credible, the credibility dimension will subsequently transfer to the brand. The credibility of a celebrity endorser will positively impact the credibility of the endorsed brand. Brand Signaling Theory Brand credibility term has its roots in brand signalling theory. Brand signalling theory explains what conditions form brand credibility (Erdem, Swait &Valenzuela, 2006). Based on brand signalling theory, credibility of a brand is defined as a signal (Erdem &Swait, 1998). According to Erdem and Swait (1998), marketing activities, that companies have control of, form the brand signals. Brand signals are particularly important in markets where asymmetric and imperfect information is present. Such market is a threat to customers as it increases perceived risk and uncertainty about the products delivered by the brands (Erdem & Swait, 1998). The problem of asymmetric and imperfect information in the market could be solved partially by information processing and gathering. In other words, before making a decision, consumers gather information as they seek to eliminate risks related to product quality (Erdem, Swait & Valenzuela, 2006). However, consumers face costs while trying to eliminate uncertainty and perceived risk. For example, both information-gathering costs as well as information-processing costs could include expenditures in monetary terms. All in all, credible brands simplify decision making process due to elimination of consumers perceived risks and information gathering and processing costs. Besides, credible information provided by the firm, increases consumers trust and confidence (Erdem & Swait, 1998). As stated by Erdem and Swait (1998), brand credibility increases perceived quality, decrease consumer perceived risk and information costs. All of

33 33 these contribute to higher consumer utility (Erdem & Swait, 1998). In addition, those brands that manage to deliver credible promises, experience return on their investments as indicated by Erdem and Swait (1998). As a result, companies experience inner motivation to provide truthful information in order to recover costs and increase returns. In addition, advertising which is a type of brand signal also could be used to perform this task of providing information to consumers (Baek, Kim, & Yu (2010). Customers evaluate advertisements by the amount of investments as they act as a proxy for quality and credibility of the company (Baek, Kim, & Yu, 2010; Erdem & Swait, 2004). Additionally, investments are seen as brand s long-term commitment and fulfilment of promises (Erdem, Swait &Valenzuela, 2006). It becomes risky for the companies to provide not credible information as investments would be foregone. Erdem, Swait and Louviere add (2001) that not truthful information will have impact on long-run future sales and, in turn, expenditures would not be recovered. All in all, marketing activities, such as endorsements, create brand signals (Erdem & Swait, 1998) which contribute to brand credibility. It means that brand credibility is influenced in a positive way when credible endorser is involved. To summarize, two theories, including associative network memory model and brand signalling theory are used in order to draw the relationship between endorser credibility and brand credibility. The basic idea of associate network memory model is to explain the memory structure of consumers (Keller, 2003; Shimp & Till, 1998). According to this model, memory consists of separate nodes that are connected by links (Keller, 2003). Nodes are defined as stored information while links stand for the strength of associations between nodes (Keller, 2003). Till, Stanley & Priluck (2008) used the principles of this model to explain that celebrity endorser and brand could be linked over time. In this case, celebrity and brand represent

34 34 different nodes. After the endorsement process, both nodes become interlinked through associative links (Shimp & Till, 1998). After the link is build, celebrity and brand becomes a part of each other s association set (Shimp & Till, 1998). Thus that feelings towards the celebrity, including positive and negative, could be transferred to the brand (Shimp & Till, 1998).In the meantime, brand signalling theory developed by Erdem and Swait (1998) indicates what creates brand credibility. They state that brands as signals could provide information in the market which is defined by asymmetry and imperfection. In other words, signals help brands by overcoming asymmetric and imperfect information. It means that brand signals decreases information costs, increases perceived quality and decreases perceived risks (Erdem & Swait, 1998). Marketing activities, such as endorsements, create brand signals (Erdem & Swait, 1998). The most important dimension of brand signal is credibility (Erdem & Swait, 1998). It seems that endorser, which is defined as a brand signal, should be credible in order to contribute to the brand. All in all, it seems that the feature of credibility of the endorser could be transferred to the brand. Additionally, the more credible the endorser, the more credible the brand. Based on associative network memory model and brand signalling theory both constructs, including endorser credibility and brand credibility could be linked. The credibility of a celebrity endorser will positively impact the credibility of the endorsed brand. In accordance with theoretical arguments, the following hypothesis could be made: H1: Endorser credibility has a direct positive impact on brand credibility Involvement into the Product Category: Impact on Endorser Credibility Brand Credibility Link Involvement into the product category is a relevant moderator as this plays an important role in information processing path (Petty & Cacioppo, 1986). To start with, literature review

35 35 shows that there is no consensus about the impact of the type of involvement on endorser credibility-brand credibility link. On the one hand, high-involvement products should be endorsed by celebrities to influence the brand (Friedman & Friedman, 1979; Kahle & Homer, 1985). On the country, literature supports view that celebrity endorsers should be used for lowinvolvement products to have impact on the brand (Petty, Cacioppo & Schumann, 1983; Roozen & Claeys, 2010; Saleem, 2007). Therefore, the presented relationship deserves a closer look. On one hand, academic literature supports view that celebrities are appropriate for highinvolvement products (Kahle & Homer, 1985). Attractiveness of the endorser affects information processing and can have impact on changes of attitudes (Kahle & Homer, 1985). According to Kahle and Homer (1985), the attractiveness of the celebrity increases involvement of the consumer. In addition, attractiveness of the endorser could overshadow weak arguments provided in the advertisement (Kahle & Homer, 1985). To be specific, attractive endorser becomes source of information not arguments (Kahle & Homer, 1985). So it seems that attractive endorsers should be used for high involvement products that lack qualitative selling arguments (Kahle & Homer, 1985). Friedman and Friedman (1979) add that attitude towards the brand depends on the category of products. To be specific, celebrities should endorse products that possess relevant features for high involvement products such as social and psychological risk (Friedman & Friedman, 1979). One the one side, literature argues that celebrity endorsers are insignificant for highinvolvement products and should be used for low involvement products (Petty, Cacioppo & Schumann, 1983; Roozen & Claeys, 2010; Saleem, 2007). With low-involvement products, consumers spend a limited amount of time for reviewing the advertisement (Kahle & Homer, 1985). As a result, visual impression of celebrity endorser is a key to obtain information (Kahle

36 36 & Homer, 1985). In other words, for low involvement products, celebrity endorser is a powerful tool to determine attitudes towards the product (Petty, Cacioppo & Schumann, 1983) Elaboration Likelihood Theory As the impact of involvement into product category on endorser credibility-brand credibility link has been introduced, it is important to look at theoretical insights behind those arguments. Elaboration likelihood theory seeks to explain how attitudes change and information is being processed. According to Petty, Cacioppo and Schumann (1983), there are two different ways to persuasion: via central route and via peripheral. Both routes involve different amount of message elaboration and, in turn, involvement (Sengupta, Goodstein, & Boninger, 1997). Which route would be chosen depends on person s motivation and ability. A person could have either high or low elaboration likelihood (Petty, Cacioppo & Schumann, 1983). Under the central route, persuasion results from the quality of arguments provided. This type of route requires intensive processing of the message. In other words, people carefully evaluate information presented by using a high level of message elaboration. During the elaboration process, arguments provided in the advertisement becomes linked with the object so that attitude is constant over time (Sengupta, Goodstein, & Boninger, 1997). So it seems that when elaboration likelihood is high, central route should be effective. In the meantime, under the peripheral route, customers pay attention to peripheral elements, including positive and negative cues (Petty, Cacioppo & Schumann, 1983). For example, the peripheral element could be the celebrity endorser. In addition, people rely on heuristic elements when processing the information provided. Heuristic elements could be credibility or attractiveness of the endorser. Information provided by peripheral route does not require intensive processing and is evaluated based on general impressions. As peripheral route

37 37 does not require deep evaluation of the message, celebrity endorser may not be linked with endorsed product in consumer s long-term memory (Punyatoya, 2011; Sengupta, Goodstein, & Boninger, 1997). It means that formed attitudes are not stable over time. All in all, when elaboration likelihood is low, then peripheral route is more effective. In a manner corresponding to elaboration likelihood model, the involvement into the product category has an impact on the endorser credibility - brand credibility link. In other words, involvement is expected to act as a moderator in the relationship between endorser credibility and brand credibility. The moderating role of involvement into product category is acknowledged in the literature (Park, Lee & Han, 2007). All in all, it is expected that: H2: Involvement into the product category moderates the relationship between endorser credibility and brand credibility The Relationship Between Brand Credibility and Brand Loyalty Brand credibility is expected to have a positive impact on brand loyalty. Brand loyalty is commitment to the brand that results in repeated purchases (Alam, Arshad & Shabbir, 2012). According to Keller (2003), brand loyalty is defined as the strength of the psychological bond between the customer and the brand. Loyal behaviour is desirable to companies due to the following benefits. Firstly, it is cheaper to maintain the loyal customer that to attract a new one. In other words, marketing expenses are reduced substantially with the large number of loyal customers. Secondly, loyal customers are constant revenue drivers as they already have an established trust relationship with the brand. Loyalty itself is not only about repeated purchases, it also includes the dimension of attitudinal attachment, sense of community, and active engagement (Keller, 2003). It means that customers are eager to invest their resources, including time and energy, to be a part of the brand (Keller, 2003). According to brand signalling theory, consumers are uncertain about product quality.

38 38 They face risks and uncertainty that arise from information asymmetry (Jeng, 2016). Brands that are credible increase perceived quality, reduce perceived risk, lower information cost (Erdem & Swait, 1998) and in turn contribute to creating high expected utility to customers. All in all, increased perceived expected utility leads to customer satisfaction that could potentially result in loyal behaviour. Besides, trustworthiness, which is one of the components of brand credibility, plays an important role in brand loyalty (Sweeney & Swait, 2008). According to Garbarino and Johnson (1999), trust is a key factor for successful relationship. Long-term relationships between brands and customers are achieved by providing accurate information in the market (Sweeney & Swait, 2008). When asymmetric information is present in the market, customers experience uncertainty (Erdem & Swait, 2004). Brand signals that are trustworthy eliminate uncertainly. The impact of brand credibility on loyalty commitment was studied by Sweeney and Swait (2008). According to their findings, retail banks and telecommunication service providers are able to create long-term relationship with their users by providing perfect and accurate information. The relationship between brand credibility and customer brand loyalty was supported by Alam, Arshad, and Shabbir (2012). Besides the direct effect, academic scholar incorporated religious orientation (Alam, Arshad & Shabbir, 2012). The above presented arguments suggest the positive direct link between brand credibility and brand loyalty. In other words, the more credible the brand, the higher is the brand loyalty. This statement leads to the next hypotheses that will be tested in this research: H3: Brand credibility has a direct positive impact on brand loyalty The Relationship Between Endorser Credibility and Brand Loyalty The direct relationship between endorser credibility and brand loyalty is explained by already introduced associative network memory model. According to the model, nodes of

39 39 endorser and the brand are linked in such a way that they become a part of each other s association set (Keller, 2003; Shimp & Till, 1998). To be specific, thinking of the celebrity activates brand node while thinking of the brand activates celebrity node (Keller, 2003; Shimp & Till, 1998). A credible endorser will be more strongly associated with the brand in consumers memory. Moreover, associative network memory model suggests that celebrity endorsement facilitates brand awareness, including brand recall and brand recognition. In turn, through endorsement process brand could become top of mind in a specific product category (Keller, 2013). This condition is needed in order to build brand loyalty, which is one of the key building blocks of customer based brand equity (Aaker, 1991; Keller, 2003). Based on these arguments, it seems that if credible endorsers are associated with the endorsed brands, it is expected that endorser credibility could directly affect brand loyalty. Moreover, established brand have their own credibility dimension, meaning that the relationship between endorser credibility and brand loyalty is mediated through brand credibility. It is expected that indirect effect between endorser credibility and brand loyalty exists. As a result, the following hypotheses are proposed: H4: Endorser credibility has a direct positive impact on brand loyalty. H5: Brand credibility mediates the relationship between endorser credibility and brand loyalty. Additional Hypotheses Besides the key hypotheses of the research, literature review suggests additional relationships that could be tested in this research. Even though they are not the scope of the paper, they provide supplementary information for marketing literature. The following section introduces the link between familiarity with endorser and endorser credibility. Additionally, the relationship between engagement with celebrities and endorser credibility is covered.

40 40 The Relationship Between Engagement with Celebrities and Endorser Credibility Engagement with celebrities stands for the special bond between a consumer and the celebrity (Kowalczyk et al, 2016). Additionally, Kowalczyk et al. (2016) add that engagement with celebrities could be expressed through liking a celebrity on social media. People become engaged with celebrities in order to achieve self-realisation and get life direction (Lee, Scott & Kim, 2008). According to Thomson (2006) people become engaged with celebrities as such kind of emotional attachment leads to satisfaction. It could seem that celebrities appear as distant personalities. However, with the emergence of technologies, the gap between celebrities and followers was tightened (Kowalczyk et al, 2016). Current technologies enable the communication between celebrities and their fans (Kowalczyk et al, 2016). Previously, the engagement with celebrities was based on information on traditional media sources such as appearance on television, radio or newspapers (Kowalczyk et al, 2016). The relationship between engagement with celebrities and endorser credibility could be explained using attachment theory. The main idea of this theory is to explain how human beings form long-term relationships. Attachment theory is commonly used to assess the relationship between consumers and celebrities (Thomson, 2006) which does not have to be reciprocal. One-sided relationship is desirable in order to increase self-satisfaction. Besides, consumers engaged with celebrities perceive them as genuine and open. As a result, a strong emotional attachment between celebrity and consumer is established (Kowalczyk et al, 2016). Thus, consumers that are engaged with celebrities identify themselves with celebrities values (Kowalczyk et al, 2016). Accordingly, the following hypothesis is offered: H6a: Engagement with celebrities has a direct positive impact on endorser credibility

41 41 The Relationship Between Familiarity with Endorser and Endorser Credibility McGuire (1959) defines endorser familiarity as the knowledge of the source formed through exposure. Familiarity mirrors the direct and indirect experience with the source (Kent & Allen, 1994). According to McCracken (1989), familiar endorsers have impact on consumers due to their identifiable personality. It explains why large companies such as Nike favours celerity endorser rather than regular customers. However, Belch and Belch (2001) add that companies have to carefully analyse what knowledge does the celebrity evoke to consumers before conducting an advertising campaign. In general, customers can be separated into different groups depending on their familiarity with brands, products (Simonin & Ruth, 1989) or endorsers (Doyle, Pentecost & Funk, 2014). There are consequences related to the degree of familiarity. First of all, the degree of familiarity affects information processing and evaluation (Simonin & Ruth, 1989). It is believed, that familiar things tend to be evaluated more positively and their associations tend to be stable over time (Simonin & Ruth, 1989). Secondly, familiarity influences brand recall and recognition (Samu, S., Krishnan, H., & Smith, R. (1999). Finally, familiarity plays a role in consideration set, which, in turn, has impact on decision making (Doyle, Pentecost & Funk, 2014). The impact of familiarity with endorser on endorser credibility could be explained by already introduced source attractiveness model developed by McGuire (1959). According to the model, the effectiveness of communication between two parties depends on three dimensions: familiarity, likeability and similarity. Endorsers that are familiar to the receivers are considered persuasive (McCracken, 1989). Based on these arguments, it seems that familiarity with endorser has impact on endorser credibility. In turn, the following hypothesis is proposed: H6b: Familiarity with endorser has a direct positive impact on endorser credibility

42 42 Research Methodology This section of the paper provides a detail description of research methodology. Firstly, the conceptual model as well as hypothesized relationships are introduced. Secondly, the paper provides reasoning for the chosen research design and methods. Then sampling process and sample size justification is described. Thirdly, this section introduces the steps for the data analysis that would be followed in the empirical part. Finally, scale development process of each construct is described. Conceptual Model The conceptual framework presented in Figure 2 summarizes key and additional hypotheses presented in the Hypotheses Development part. According to the illustration of conceptual model (Figure 2), key relationships are the following. Firstly, Endorser Credibility has a direct positive impact on Brand Credibility. The relationship between those two variables is moderated by Involvement into the Product Category. Moreover, Brand Credibility and Brand Loyalty are linked in a positive way as well. Moving on, Endorser Credibility has a direct impact on Brand Loyalty. Additionally, Endorser Credibility has an indirect effect on Brand Loyalty through Brand Credibility. Key relationships showed in Figure 2 are based on the associative network memory model, brand signalling theory and elaboration likelihood model. Associative network memory model as well as brand signalling theory draw the direct relationship between endorser credibility and brand credibility. Associative network memory model explains how endorsers and brands could be linked over time (Keller, 2003). In the meantime, brand signalling theory explains how credibility of endorser could be transferred to the brand, so that the following becomes credible as well (Cornwell, Pappu & Spry, 2011). In addition, elaboration likelihood model is used to explain what role the

43 43 moderating variable, in this case, involvement into the product category, plays in the relationship between endorser credibility and brand credibility (Erdem & Swait, 1998). Brand signalling theory is also employed to understand the relationship between brand credibility and brand loyalty. The direct and indirect relationships between endorser credibility and brand loyalty are elaborated through associative network memory model. As this model suggests, endorser credibility facilitates brand recall and recognition that are the pre-requites for creating brand loyalty (Keller, 2013). Finally, additional hypotheses, which focus on the predictors of endorser credibility rest on the theoretical explanations that come from source-attractiveness theory as well as attachment theory. All in all, each of the constructs would be elaborated separately in this part of the research. Figure 2. Conceptual model of the research. Prepared by the author of the thesis. Conceptual model was created based on the arguments that come from academic literature. Additionally, all discussed hypotheses have support that come from theoretical background. In turn, Table 1 shows the final list of hypotheses.

44 44 Table 1 Final Hypotheses List H1: Endorser credibility has a direct positive impact on brand credibility H2: Involvement into the product category moderates the relation between endorser credibility and brand credibility H3: Brand credibility has a direct positive impact on brand loyalty H4: Endorser credibility has a direct positive impact on brand loyalty H5: Brand credibility mediates the relationship between endorser credibility and brand loyalty H6a: Engagement with celebrities has a direct positive impact on endorser credibility H6b: Familiarity with endorser has a direct positive impact on endorser credibility Note. Prepared by the author of the thesis. Research Design and Method There are three common approaches to collect primary data and conduct research: quantitative, qualitative and mixed methods (Williams, 2007). This research paper applies quantitative method (Williams, 2007). The chosen research method aims to test specific hypotheses and examine the relationship between variables (Malhotra, 2007). Additionally, this type of research design has a formal process and is structured (Malhotra, 2007). Quantitative research method is chosen due to several advantages. Firstly, this approach allows to quantify the data and make conclusions from the sample about the population (Malhotra, 2007). Secondly, this type of research methods allows to maximize objectivity, generalizability and reliability of findings (Conrad & Serlin, 2011). Thirdly, collected data can be analysed using statistical tools, which is objective and provides more accurate information

45 45 (Malhotra, 2007). There are two classifications of quantitative research: descriptive and causal (Malhotra, 2007). In this paper, causal analysis is applied. Causal design seeks to obtain evidence of causeand-effect relationship (Malhotra, 2007). In other words, this type of research method explores the interaction between independent and dependent variables (Williams, 2011). In this case, research paper seeks to determine the impact of the endorser credibility on brand credibility taking into account the moderating effect of involvement into the product category. Data Collection Method In this research paper, the survey method is used. The goal of the survey method is to gather information from respondents by asking to fill in the questionnaire. According to academic literature, survey design is preferable due to the following reasons. Firstly, survey design is cost effective and saves times for the researcher (Dörnyei & Taguchi, 2009). Secondly, survey design enables for straightforward data analysis and easy transfer to statistical software which is particularly relevant for the empirical part (Dörnyei & Taguchi, 2009). Thirdly, responses are anonymous so respondents are more willing to participate in the survey (Fricker & Schonlau, 2002). Moreover, Fricker and Schonlau (2002) add, that survey method generates higher response rate compared to other methods. Due to the presented advantages, the research paper employees survey method to gather primary data. Moreover, the survey is conducted using the Internet as it allows for moderate to high flexibility of data collection (Malhotra, 2007). Internet survey is low cost and high speed compared to high cost and moderate speed in-home interviews (Malhotra, 2007). Additionally, there is none interviews bias, which is present in questionnaires conducted by the telephone (Malhotra, 2007). Moreover, this type of data collection is preferable by individuals as it is easy to understand (Creswell, 2002). Online survey is created using

46 46 Indicated survey tool is useful due to its ability to track IP addresses, in order to have different respondents in the sample. Additionally, it allows easy transfer of data to statistical software. Questionnaire of the survey is based on two parts. The first part measures the constructs of the conceptual model. The second part of the questionnaire focuses on respondents demographic characteristics, including age and gender. The questionnaire is originally in English. It is translated in Lithuanian in order to be accessible to respondents. Parallel translation technique is used in designing the questionnaire. This type of translation technique employs different translators who provide independent translations of the questionnaire (Usunier & Lee, 2009). Therefore, the results are compared in order to reach the consensus among the translations (Usunier & Lee, 2009). The full survey questionnaire that is used for gathering the primary data is provided in the Appendix A, Table A.1. Sampling Process and Sample Size Target population is determined by previous studies related to celebrity endorsement. Aziz, Ghani and Niazi (2013) define target population as MBA students aged from 25 to 30 years old while Austad and Silvera (2004), Catli, Korkmaz and Sertoglu (2014), Choi and Rifon (2012) choose university students in general. According to Euromonitor International (2017), celebrity influence is prominent across all age groups being the most apparent among younger generation. Trendy celebrities impact younger generation while more enduring celebrities affect older target (Euromonitor International (2017). As a result, the target population aged between 18 to 44 years old is chosen. All in all, there are people aged from 18 to 44 in Lithuania (see Appendix B, Table B.1, Table B.2). The sample of this research paper was calculated using the above indicated population. Besides, the sample size calculation is based on 95 percent confidence level and a 6.61 percent confidence interval. All in all, the sample size used for this research is bound by 210 people.

47 47 For similar studies, investigating endorser credibility and brand credibility relationship, the sample size is approximately respondents (Cornwell, Pappu & Spry, 2011; Mishra & Mishra (2014). Additionally, academic articles studying the impact of endorser credibility on other determinants such as buying intention choose the similar size of the sample (La Ferle & Choi, 2005). Non-probability sampling technique is used instead of probability sampling. Even though non-probability sampling is being criticized for being non-representative of the population as it is based on the personal judgment, this type of sampling also provides advantages (Malhotra, 2007). Supporting arguments are the following: probability sampling is costly and takes longer compared to non-probability sampling (Malhotra, 2007). Out of available non-probability sampling techniques, judgmental sampling is used. Judgmental sampling is desirable due to the following reasons. It is low cost, convenient, and not time consuming (Malhotra, 2007). In order to perform judgmental sampling, the survey was shared among different university students, including undergraduate and graduate, and companies having relatively young employee s age. Data Analysis Method Collected quantitative data will be analysed using statistical software SPSS. This software is a popular tool which is widely used in marketing research (Malhotra, 2007). In order to test the hypotheses and relationships between constructs the following tests would be performed. Firstly, descriptive statistics of the data would be provided. Secondly, internal consistency and reliability of the scales would be tested using Cronbach s Alpha. Thirdly, assumptions for linear regression would be analysed (normality, correlation). Finally, regression analysis would be used in order to access the relationship between constructs.

48 48 Variables and Measurement Scales. Measurement scales regarding endorser credibility, brand credibility, brand loyalty and involvement into product category have been taken from other academic scholars. Each of them would be presented separately. Endorser Credibility Construct In this research paper, Endorser Credibility is an independent variable. It acts as a dependent variable for the following hypotheses testing: H6a and H6b. Ohanian (1990) defines endorser credibility as positive features of the source that influence receiver s acceptance of the message. Endorser credibility consists of three dimensions: expertise, trustworthiness and attractiveness (Ohanian, 1990). Expertise and trustworthiness is recognised by source credibility model (Hovland &Weiss 1951) while attractiveness by the source attractiveness model (McGuire, 1985). The dimension of attractiveness to measure endorser credibility has been added recently. The reasoning behind is that attractiveness has become an important attribute in endorser selection criteria over the years (Ohanian, 1990). Trustworthiness stands for the degree of confidence and acceptance of the message of the speaker (Ohanian, 1990). To be specific, Miller and Baseheart (1969) indicate that the more trustworthy the person, the more effective the message. In the meantime, the second dimension of source credibility is expertise. It is defined as the degree of endorser s knowledge, skills and know-how (Erdogan, 1999; Fleck, Korchia & Le Roy, 2012). According to Crisci and Kassinove (1973), the higher the perceived level of expertise of the communicator, the higher compliance with the advice and the higher purchase intention. Expertise, as well as trustworthiness, has impact on attitude change (Ohanian, 1990). The third dimension is related to physical attractiveness (Ohanian, 1990). The scale for measuring endorser credibility is taken from Ohanian (1990). According

49 49 to Ohanian (1990) this scale demonstrates high reliability and validity. Additionally, this scale is widely acknowledged by the academic scholars (Erfgen, Zenker, & Sattler, 2015; Cornwell, Pappu & Spry, 2011). Ohanian developed a three-component scale based on theoretical and empirical background (1990). Each dimension, including expertise, trustworthiness and attractiveness is measured on a series of items (Ohanian, 1990). To be specific, endorser credibility is measured using a 15-item scale. It means that all three scales, expertise, trustworthiness and attractiveness consist of five items that are measured on 7-point semantic differential scales. Cronbach s alpha of this measure is equal to 0.88 which is larger than the standard of 0.7 (Churchill 1979). In this research paper, endorser credibility is measured on 7- point Likert scale. Table 2 Construct of Endorser Credibility Construct Original item Adopted to structural model Endorser Attractiveness: Attractiveness: Credibility. Attractive unattractive Attractive unattractive Source: Classy not classy Classy not classy Ohanian Beautiful ugly Beautiful ugly (1990) Elegant plain Elegant plain Translation to Lithuanian Patrauklumas: Patraukli/-us - nepatraukli/-us Madinga/-as - nemadinga/-as Graži/-us - negraži/-us Elegantiška/-as paprasta/-as Expertise: Expert not an expert Experienced inexperienced Knowledgeable unknowledgeable Qualified unqualified Skilled unskilled Trustworthiness: Dependable undependable Honest dishonest Reliable unreliable Sincere insincere Trustworthy untrustworthy Note. Prepared by the author of the thesis. Brand Credibility Construct Expertise: Expert not an expert Experienced inexperienced Qualified - unqualified Knowledgeable unknowledgeable Trustworthiness: Dependable undependable Honest dishonest Sincere insincere Trustworthy untrustworthy Ekspertiškumas: Ekspertė/-as - ne ekspertė/-as Patyrusi/-ęs - nepatyrusi/-ęs Turinti/-is žinių neturinti/-is žinių Kvalifikuota/-as nekvalifikuota/-as Patikimumas: Priklausoma/-as - nepriklausoma/-as Garbinga/-as - nesąžininga/-as Nuoširdi/-us - nenuoširdi/-us Patikima/-as - nepatikima/-as In this research paper, brand credibility is a dependent variable as its variation depends

50 50 on endorser credibility. Additionally, it acts as a mediator between endorser credibility and brand loyalty. As stated by Erdem and Swait (2004), brand credibility consists of expertise and trustworthiness. The former stands for the ability and the later for the willingness to deliver what has been promised (Erdem & Swait, 2004). Two dimensions, expertise and trustworthiness, is the result of past and present marketing activities and strategies (Erdem & Swait, 2004). The scale to measure brand credibility is retrieved from brand signalling theory developed by Erdem and Swait (2004). Brand credibility is measured using seven items, encompassing two dimensions: expertise and trustworthiness (Erdem & Swait, 2004). Each item is evaluated on a 7-point Likert scale, where 1 equals to Strongly Disagree and 7 indicates Strongly Agree. Cronbach s alpha of this measure is equal to Table 3 Construct of Brand Credibility Construct Original item Adopted to structural model Brand Expertise: Credibility. This brand reminds me of Source: someone who s competent and Erdem & knows what he/she is doing Swait (2004) This brand has the ability to deliver what it promises Trustworthiness: This brand delivers what it promises This brand s product claims are believable Over time, my experience with this brand have led me to expect it to keep its promises, no more and no less This brand has a name you can trust This brand doesn t pretend to be something it isn t Expertise and trustworthiness: This brand reminds me of someone who s competent This brand delivers what it promises This brand has a name you can trust This brand doesn t pretend to be something it isn t Translation to Lithuanian Ekspertiškumas ir patikimumas Šis ženklas yra kompetetingas Šis ženklas suteikia tą, ką buvo pažadėjęs Šis ženklas yra patikimas Šis ženklas nesistengia būti tuo ko nėra Note. Prepared by the author of the thesis.

51 51 Involvement into the Product Category Construct Involvement into the product category is a moderating variable. It is defined as consumer s interest in the product. It differs due to individual reasons that could be the following: personal values and needs, or the self-concept (Zaichkowsky, 1985). Wu and Wang contribute (2011) to this topic by adding that involvement is relevance the individual has towards the product. In general, Petty and Cacioppo (1986) state involvement plays an important role in information processing. To be specific, when involvement is high, it leads to careful evaluation of arguments and considerable level of thinking (Petty & Cacioppo, 1986). In the meantime, under low involvement conditions, heuristic elements are more relevant (Petty & Cacioppo, 1986). In the nineties, involvement with products, in other words, enduring involvement, received considerable attention from academic scholars (Rodgers & Schneider, 1993). By that time Zaichkowsky (1985) developed 20-items scale to assess the involvement or interest in product category. The developed scale is also called Personal Involvement Inventory, PII (Zaichkowsky, 1985). However, this scale was criticized for being not applicable to measure advertisement effectiveness, for being too long, and for the inability to capture emotional and cognitive types of involvement (Zaichkowsky, 1994). Due to criticism, the presented scale was further revised by Zaichkowsky (1994) to come up with a 10-item scale to measure product involvement. However, the proposed scale is criticized due to being one-dimensional. In the meantime, Laurent and Kapferer (1985) suggest using an involvement profile rather than a single involvement level. In other words, Laurent and Kapferer (1985) propose a multidimensional scale rather than one-dimensional (Zaichkowsky, 1994). This measurement approach is known as Consumer Involvement Profile, CIP. the CIP scale is made of 5

52 52 dimensions, including intersect, pleasure, sign, risk probability, and risk importance. The CIP scale comprises the total 16 items, where each item is measured on a 7-point Likert scale. Items range from totally disagree to totally agree. According to Laurent and Kapferer (1985), the scale is appropriate for any product category. Due to its simplicity and applicability this scale is chosen for this paper. In this research paper, the sub-dimensions of interest, pleasure and risk probability are taken into account. All of these dimensions have Cronbach s alphas above 0.7. Table 4 Construct of Involvement into the Product Category Construct Original item Adopted to structural model Translation to Lithuanian Involvement into the Product Category. Source: Laurent & Kapferer (1985) Interest: I attach great importance to. interests me a lot. leaves me totally indifferent. Pleasure: It would give me pleasure to purchase. When you buy, it is a bit like giving a gift to yourself. Having is a pleasure for me. Sign: You can tell someone about a person by the (s)he picks out. The you buy tells a little about you. The I buy shows what type of man/woman I am. Risk Probability: When you purchase, you are never certain you made the right choice. Whenever you buy, you never really know whether it is the one you should have bought. When I can select from several, I always feel a bit at a loss in making my choice. Interest: I attach great importance to this product (service) This product (service) interests me a lot. This product (service) leaves me totally indifferent. Pleasure It would give me pleasure to purchase this product (service). When you buy this product (service), it is a bit like giving a gift to yourself. Having this product (service) is a pleasure for me. Risk Probability: When you purchase this product (service), you are never certain you made the right choice. Whenever you buy this product (service), you never really know whether it is the one you should have bought. Choosing this product (service) is rather complicated. Susidomėjimas: Ši prekė (paslauga) man yra svarbi Ši prekė (paslauga) mane labai domina. Šiai prekei (paslaugai) aš neabejingas. Pasitenkinimas: Jaučiu pasitenkinimą pirkdamas šią prekę (paslaugą). Kai perku šią prekę (paslaugą), jaučiuosi tarsi kažką dovanočiau sau. Man malonu turėti šią prekę (paslaugą). Rizikos tikimybė: Kai perku šią prekę (paslaugą) niekada nesu tikras, ar padariau teisingą sprendimą Kai perku šią prekę (paslaugą) niekada nežinau, ar pasirinkta prekė (paslauga) yra ta vienintelė, kurią turėjau pasirinkti. Priimti sprendimą įsigyti šią prekę (paslaugą) man yra gana sudėtinga.

53 53 Choosing is rather complicated. Risk Importance: When you choose a, it is not a big deal if you make a mistake. It certainly is annoying to purchase that doesn t meet my needs. I would be really upset if, after I bought some I found I had made a poor choice. Note. Prepared by the author of the thesis. Brand Loyalty Construct Brand Loyalty is dependent variable in this research. There is no consensus in academic literature regarding measures of loyalty. However, after reviewing the academic literature, it seems that brand loyalty is usually classified into two categories: attitudinal and behavioural (Odin, Odin, & Valette-Florence, 2001). According to Day (1969), brand loyalty is a multidimensional construct, which takes into consideration favourable attitude towards the brand as well as repeated purchasing behaviour. True brand loyalty occurs when two dimensions are taken into account (Day, 1969). As a result, brand loyalty could be defined as preference towards the brand that results in repeated purchases (Oliver, 1997). Each of these categories have separate measurement scales. On the one hand, literature favours scales that measure behavioural loyalty (Odin, Odin, & Valette-Florence, 2001). Behavioural loyalty is related to repeated purchase behaviour (Keller, 2013; Odin, Odin, & Valette-Florence, 2001). Repeated purchases are essential for bottom-line profit results (Keller, 2003). On the other hand, arguments in favour of attitudinal loyalty is provided. Keller adds (2013) that brand loyalty is more than repeated purchase and should be defined in a broader

54 54 context. In other words, there should be a strong personal attachment to the brand (Keller, 2013). In this research paper, both dimensions, including attitudinal loyalty and behavioural loyalty are combined into a single measure to assess brand loyalty. Brand loyalty measure is combined of five items measuring attitudinal loyalty as well as three items to account for behavioural loyalty. All items are retrieved from the academic scholars of Chaudhuri and Holbrook (2001), Oliver (1997), Pritchard, Havitz, and Howard (1999), and Sirdeshmukh, Singh, and Sabol (2002). Each of them is evaluated on a 7-point Likert scale, ranging from 1 = totally disagree to 7 = totally agree. This scale for measuring brand loyalty is applied for academic articles assessing the relationship between brand credibility and brand loyalty (Alam, Arshad & Shabbir, 2012; Taylor, Celuch, & Goodwin, 2004).

55 55 Table 5 Construct of Brand Loyalty Construct Original item Adopted to structural model Brand Loyalty. Source: Chaudhuri & Holbrook (2001); Oliver (1997); Pritchard, Havitz, & Howard (1999), Sirdeshmukh, Singh, & Sabol (2002) Attitudinal loyalty I use the brand I am evaluating because it is the best choice for me I consider myself to be a loyal patron of the manufacturer of the brand I am evaluating I am committed to the manufacturer of brand I am evaluating In the future, I would be willing to pay a higher price for the brand from the manufacturer of brand I am evaluating I consider the manufacturer of the brand I am evaluating as my first choice Attitudinal loyalty I use this brand because it is the best choice for me I consider myself to be a loyal patron of this brand. I am committed to the manufacturer of this brand. In the future, I would be willing to pay a higher price for this brand. Behavioral loyalty I intent to purchase the items from the manufacturer of the brand I am evaluating in the future Translation to Lithuanian Požiūrio lojalumas Aš naudoju šį prekinį ženklą, nes tai - geriausias pasirinkimas Aš esu lojali/-us šiam prekiniam ženklui. Aš jaučiuosi įsipareigojusi/-ęs šiam prekiniam ženklui. Net jei prekės ženklas šiek tiek pabrangtų, aš ir toliau jį rinkčiausi. Behavioral loyalty Ateityje tikiuosi pirksiu šį prekės ženklą. Behavioral loyalty I intend to keep buying the brand I am evaluating I would not switch to a competitor, even if I had a problem with the products/services of the manufacturer of brand I am evaluating I intent to purchase the items from the manufacturer of the brand I am evaluating in the future Note. Prepared by the author of the thesis. Engagement with Celebrities Construct Engagement with celebrities is an independent variable for H6a testing. Engagement with celebrities stands for the special bond between a consumer and the celebrity (Kowalczyk et al, 2016). Additionally, the construct of engagement with celebrities seeks to understand the view of celebrities in relation to the self (Sprott, Czellar &Spangenberg, 2009). In order to capture consumer engagement with celebrities, the scale of Rubin and Perse (1987) is chosen. The original scale developed by Rubin and Perse (1985) is composed of 20 items. Later, the

56 56 scale was revised to come up with 10 items (Rubin & Perse, 1987) each measured on 7-point Likert scale. Each of the scales have acceptable levels of Cronbach alphas: 20 items scale has alpha of 0.93 while 10 items The shorter scale is chosen in order to avoid repetition of similar questions. The original scale is designed to measure intensity among newscasters and soap opera characters (Kim, Ko & Kim, 2015). Table 6 Construct of Engagement with Celebrities Construct Original item Adopted to structural model Engagement with Celebrities. Source: Laurent & Kapferer (1985) I feel sorry for my favourite newscaster when he or she makes a mistake. The newscaster makes me feel comfortable, as if I am with friends. I see my favourite newscaster as natural, down to earth person. I look forward to watching my favourite newscaster on tonight s news. If my favourite newscaster appeared on another television program, I would watch that program. When my favourite newscaster reports a story, he or she seems to understand the kinds of things I want to know. If there were a story about my favourite newscaster in a newspaper or magazine, I would read it. I miss seeing my favourite newscaster when he or she is on vacation. I would like to meet my favourite newscaster in person. I find my favourite newscaster to be attractive. I feel sorry for my favourite newscaster when he or she makes a mistake. The newscaster makes me feel comfortable, as if I am with friends. I see my favourite newscaster as natural, down to earth person. I look forward to watching my favourite newscaster on tonight s news. If my favourite newscaster appeared on another television program, I would watch that program. When my favourite newscaster reports a story, he or she seems to understand the kinds of things I want to know. If there were a story about my favourite newscaster in a newspaper or magazine, I would read it. I miss seeing my favourite newscaster when he or she is on vacation. I would like to meet my favourite newscaster in person. I find my favourite newscaster to be attractive. Translation to Lithuanian Man gaila mėgstamos įžymybės, jei jai/jam kažkas atsitinka. Man patinka mėgstamos įžymybės asmenybė Manau, kad mėgstama įžymybės turi gerą charatkerį. Man patinka stebėti mėgstamą įžymybę per televiziją. Žiūrėčiau laidas, kuriose dalyvauja mėgstama įžymybė. Sutampa mano ir mėgstamos įžymybės požiūris į tam tikrus dalykus. Skaitau straipsnius, kurie susiję su mėgstama įžymybe. Pasigendu mėgstamos įžymybės, kai nematau jos/jo žiniasklaidoje. Norėčiau susipažinti su mėgstama įžymybe. Manau, kad mėgstama įžymybė yra patraukli. Note. Prepared by the author of the thesis.

57 57 Endorser Familiarity Construct Familiarity with Endorser is an independent variable for H6b testing. The construct of endorser familiarity seeks to measure the degree of knowledge of the source (Erdogan, Baker, & Tagg, 2001; McGuire, 1959). The scale to assess the endorser familiarity is adopted from Kent and Allen (1994). The scale is designed initially to capture brand familiarity but it is also applied in the context of endorser familiarity (Cornwell, Pappu & Spry, 2011). The reasoning behind is that existing endorser familiarity scales are more applicable for experimental designs (Simonin & Ruth, 1989) rather than surveys. The chosen scale of Kent and Allen (1994) is composed of three items evaluated on 7-point Likert scale. Table 7 Construct of Endorser Familiarity Construct Original item Adopted to structural model Familiarity Concerning brand X, I am Concerning this celebrity, I with familiar am familiar Celebrity. Concerning brand X, I am Concerning this celebrity, I Source: experienced am experienced Kent & Concerning brand X, I am Concerning this celebrity, I Allen (1994) knowledgeable am knowledgeable Translation to Lithuanian Gerai žinau šią įžymybę. Dažnai pastebiu šią įžymybę. Daug žinau apie šią įžymybę. Note. Prepared by the author of the thesis.

58 58 Empirical Research The aim of this section is to test the validity of the proposed hypotheses. In order to do so, several steps are followed. The section starts by looking at the descriptive characteristics of the data. Secondly, reliability and validity of each construct is considered using calculation of Cronbach s alphas. Thirdly, assumptions of regression are tested, including normality of variables, homoscedasticity, correlation between variables, and the presence of linear relationships. Based on that, regression analysis is performed and conclusions regarding hypotheses are made. Data Collection and Demographics The survey was carried out during March 28 th - April 14th, The questionnaire was shared among undergraduate and graduate students as well as different companies, having relatively young employee s age. This enabled to gather data from participants with different characteristics. In total 211 respondents participated in the survey (Table 8). 123 out of 211 were women (58.3 percent) while 88 out of 211 (41.7 percent) were men. Distribution by gender more or less matches statistics of population of Lithuania. According to data of Lithuanian Department of Statistics, Lithuanian population consists of 54 percent of women and 46 percent of men. As a result, the gathered data is reasonable since the results indicate that there are more women than men. In terms of age, the majority of respondent fall within age group, representing 53.1 percent. In the meantime, the second largest age group is under 24 years old (35.1 percent). The youngest respondent is 19 years old. The third largest age group is between (7.1 percent). The lowest age groups are the following: between that has 7 respondents (3.3 percent), age group and 65 and older, each one having 1 response (0.5 percent). Based

59 59 on the results indicated in Table 8, it seems that the gathered respondents data goes in line with the proposed sample frame. To be specific, the sample mainly consists of respondents aged between (95.3%) while the sample frame was population aged between years old. Table 8 Descriptive Statistics of Respondents: Gender and Age Criteria Number of respondents Percentage Combined Percentage Gender Female ,3 Male 88 41,7 Age Under , , , , ,5 65 and older 1 0, ,3 4,7 Note. Prepared by the author of the thesis. Reliability Analysis Each of the constructs were measured using scales adopted from different academic scholars. They were translated to Lithuanian language based on Parallel translation technique. Even though scales demonstrate high reliability in their original language and format, it is important to check reliability of each scale. One of the most common techniques to assess internal consistency and reliability is to calculate Cronbach s Alpha of each construct (Santos, 1999). According to Gliem and Gliem (2003), Cronbach s Alpha above 0.7 is considered acceptable. Table 9 illustrates the summary of the results. All of the constructs have acceptable level of Cronbach s Alpha, which is above 0.7. Thus, it means that all items used to measure a

60 60 particular construct are consistent and reliable. Table 9 Internal Consistency and Reliability Test Results Variable Cronbach's alpha based on Standardized Items Endorser Credibility.881 Brand Credibility.895 Involvement into the Product Category.866 Engagement with Celebrities.876 Familiarity with Endorser.790 Brand Loyalty.876 Note. Prepared by the author of the thesis. Descriptive Statistics Table 10 presents the descriptive statistics of each construct used in this empirical research. Each of the constructs were evaluated on 7-pont Likert scale. 1 stands for totally disagree while 7 represents totally agree. Table 10 Summary of Descriptive Statistics: Constructs Standard Mean Deviation Endorser_Credibility Brand_Credibility Involvement Engagement Familiarity Brand_Loyalty Valid N (listwise) Note. Prepared by the author of the thesis. Based on the results provided in Table 10, it appears that respondents perceive indicated celebrities as credible (mean is 4.9 out of 7). Moreover, respondents feel familiar with

61 61 celebrities they indicated. It is supported by relatively high mean of Familiarity construct (5.00). Additionally, those people that participated in the survey are more or less engaged with celebrities in general. The mean for Engagement with Celebrities construct is In the meantime, indicated brands are considered to be more credible than indicated celebrities. The construct of Brand Credibility has a mean of 5.44 out of 7 available. Looking at the construct of Involvement into the Product Category, it appears that respondents have the average level of involvement in the product category advertised by the celebrity. The construct of Involvement received the mean of 3.65 and standard deviation of Analysing the construct of Brand Loyalty indicates that people are not loyal to indicated brands. To be specific, Brand Loyalty construct got the mean of 3.35 with standard deviation of The mean number is considered to be low by comparing with 7 Likert scale. The standard deviation of this construct is the highest out of all constructs. It means that data points are spread out over a wide range of values. In addition, it is interesting to look at differences between local and worldwide endorsers (Table 11). It appears that worldwide celebrates are perceived as more credible compared to local ones. To be specific, the mean for local celebrities in terms of credibility is 4.69 (with standard deviation of 1.10) while the mean for worldwide celebrities is higher, representing 5.05 (with standard deviation of 1.11). The same is true for the perception of brand credibility. Conclusion is the following, brands endorsed by worldwide celebrities appear to be more credible as the mean is larger (5.56 with standard deviation of 1.25) compared to brands advertised by local figures (mean is 5.27 and standard deviation is 1.36).

62 62 Table 11 Descriptive Statistics of Nationality Endorser_Credibility Brand_Credibility Nationality N Mean Std. Deviation N Mean Std. Deviation Local Worldwide Total Note. Prepared by the author of the thesis. Besides, it was found that Ardvydas Sabonis was the most frequently indicated celebrity (Table 12). It goes in line with literature review, stating that athletes are common in Lithuanian advertisement campaigns due to their positive and appealing image (Valentinaitienė, 2016). Category Others include those celebrities that were mentioned once or twice. Table 12 Descriptive Statistics of Endorsers Frequency Percent Others Arvydas Sabonis Agne Jagelavičiūtė Eva Longoria Angelina Jolie Christiano Ronaldo David Beckham George Clooney Selena Gomez Blake Lively Andrius Užkalnis Lionel Messi Merūnas Vitulskis 2.9 Indrė Stonkuvienė Jenifer Lopez Lebron James Neymar Jr Brand Pitt Zlatan Ibramovic 2.9 Benediktas Vanagas 2.9 Cara Delevingne 2.9 Antonio Banderas 2.9 Gabrielė Martirosaitė 2.9

63 63 Gintarė Gurevičiūtė 2.9 Ieva Mackevičienė 2.9 Mantas Kalnietis 2.9 Total Note. Prepared by the author of the thesis. Moreover, out of all indicated brands the most frequently mentioned were the following: Lidl (33 responses), Loreal (21 responses), and Rasa (11 responses). Other brands that were frequently mentioned are Nike, Guerlain, Chanel, Dior and Nespresso. All in all, those mentioned brands together account for nearly 50 percent of all responses (49.8%). Table 13 Descriptive Statistics of Brands Frequency Percent Others Lidl Loreal Rasa Nike Guerlain Chanel Dior Nespresso CR Pantene H&M Dormeo Gillette Adidas Avon Deichman Givenchy Vytautas Armani Total Note. Prepared by the author of the thesis. Normality Analysis In order to run linear regression, variables should have normal distribution

64 64 (Osborne & Waters, 2002). There are several available tools to check for normality, including visual interpretation of data plots or Kolmogorov-Smirnov test (Jason & Waters, 2002). Based on the results of two tests designed to check normality (Kolmogorov-Smirnov test and Shapiro- Wilk test), all variables do not have normal distribution (Table 14). P-value of each variable is less than the significance level (5 percent). In order to make variables normally distributed, transformations (log and square root) were used to make data to conform to normality. However, transformation showed no improvement. Another option to make variables more normally distributed, is to detect and remove outliers. However, in this case it is not desirable to remove them, as this transformation does not lead to better outcome: variables do not indicate normal distribution. All in all, it appears that variables cannot be improved and are therefore used in their original form. It is important to take this limitation into account as it could distort analysed relationships. Table 14 Tests for Normality Kolmogorov-Smirnov a Shapiro-Wilk Statistic df Sig. Statistic df Sig. Endorser_Credibility 0, ,001 0, ,000 Brand_Credibility 0, ,000 0, ,000 Involvement 0, ,000 0, ,000 Engagement 0, ,000 0, ,000 Familiarity 0, ,000 0, ,000 Brand_Loyalty 0, ,000 0, ,000 a. Lilliefors Significance Correction Note. Prepared by the author of the thesis. Homoscedasticity Another assumption of linear regression is the presence of homoscedasticity. Homoscedasticity occurs when error term has a constant variance (Malhotra, 2007). If this is

65 65 not true, heteroscedasticity occurs. In order to check if the problem of heteroscedasticity exists, scatterplots are used. Scatterplot includes a visual examination of a plot of the standardized residuals (the errors) by the regression standardized predicted value. Looking at the figures (see Appendix C, Table C.1 - Table C.4), it is clear that there is some pattern in the data. Additionally, residuals are not evenly scattered around 0. As a result, the null hypothesis (residuals are homoscedastic), is rejected, supporting the presence of heteroscedasticity. It is important to take into account this issue as hypothesis testing may become unreliable. Correlation The purpose of correlation is to test the degree of linear associations between variables. Linear regression can be performed when there is a linear relationship between dependent and independent variables. As normality tests indicated that variables of the research paper are not normally distributed, it is better to use Spearman s correlation instead of Pearson s correlation (Lee, Cho & Kim, 2010). The latter one is not appropriate as an assumption of normality is not met: variables do not show normal distribution. In order to test the relationship between variables, correlation tests are performed. Lee, Cho, and Kim (2010) suggest the following interpretation of correlation. Correlation value between.00 and.19 is considered to be very weak while values between.20 and.39 indicate weak relationship. Group of signals for moderate correlation. Finally, correlation values between.60 and.79 are regarded to be strong while values above 0.8 signal very strong correlation. In order to visually illustrate the relative size of correlation different colours are used (Table 15).

66 66 Table 15 Interpretation of Correlation Results Correlation Results Interpretation Very weak correlation Weak correlation Moderate correlation Strong correlation Very strong correlation Note. Prepared by the author of the thesis. Table 16 indicates the correlation matrix of key dimensions. The findings of the Spearman s correlation matrix are the following: (1) The weak relationship is between Endorser Credibility and Brand Credibility (correlation is equal to 0.389); (2) There is a strong relationship between Brand Credibility and Brand Loyalty (0.669); (3) Endorser Credibility and Brand Loyalty results in a weak correlation (0.361); (4) Engagement with Celebrities and Endorser Credibility has a moderate relationship (0.410); (5) Familiarity with Endorser construct correlates with Endorser Credibility in a week way (0.224).

67 67 Table 16 Results of Spearman Correlation Endorser_ Brand_Cr Involveme Brand_Lo Engageme Familiarit Credibility edibility nt yalty nt y Endorser_ Correlation 1,000,389 **,287 **,361 **,410 **,224 ** Credibility Sig. (2-tailed),000,000,000,000,001 Brand_Cr Correlation,389 ** 1,000,446 **,669 **,184 **,123 edibility Sig. (2-tailed),000,000,000,007,075 Involveme Correlation,287 **,446 ** 1,000,590 **,295 **,129 nt Sig. (2-tailed),000,000,000,000,061 Brand_Lo Correlation,361 **,669 **,590 ** 1,000,261 **,045 yalty Sig. (2-tailed),000,000,000,000,516 Engageme Correlation,410 **,184 **,295 **,261 ** 1,000,324 ** nt Sig. (2-tailed),000,007,000,000,000 Familiarit Correlation,224 **,123,129,045,324 ** 1,000 y Sig. (2-tailed),001,075,061,516,000 **. Correlation is significant at the 0.01 level (2-tailed). Note. Prepared by the author of the thesis. Thus, it can be concluded that the assumption for correlation is met. The coefficients of correlation results are significant and positive between the analysed variables. It means that regression analysis could be performed to test the hypothesized links. Linearity In order to test if linear relationship between variables exist, scatterplots are presented (see Appendix D, Table D.1 Table D.5). It is a tool to gain an impression about the nature of relationship between variables. The graph illustrating the relationship between Endorser Credibility and Brand Credibility indicates that there is a positive linear relationship between variables. However, R 2 indicates that only 17.3% of variability in the construct of Brand Credibility can be explained by changes in Endorser Credibility. The remaining 82.8% are explained by other factors. The second scatterplot draws the relationship between Brand Credibility and Brand Loyalty. The coefficient of determination R 2 shows that 42.4% of the variability in Brand Loyalty is

68 68 explained by Brand Credibility. There is a clear trend how brand loyalty changes with respect to changes in brand credibility. Based on the results, illustrating the relationship between Endorser Credibility and Brand Loyalty, it appears that Endorser Credibility explains variation in Brand Loyalty. To be specific, R 2 shows that 13% of the variability in Brand Loyalty is explained by Endorser Credibility. Finally, there are linear relationships between Endorser Credibility and its predictors. Engagement with celebrities explain 16.3% variation in Endorser Credibility. In the meantime, Familiarity with endorser shows 3% variability in Endorser Credibility construct. Thus, it can be concluded, that the assumption of linearity, needed for regression analysis is supported, as there are linear relationships between variables. Following that, hypotheses testing could be performed. Hypotheses Testing The aim of the previous section was to test assumptions for running regression analysis: normality of variables, correlation between variables and linearity. Statistical tools did not manage to fix the problem of absence of normality. In the meantime, correlation analysis and scatterplots indicated that there is a statistically significant relationship between the independent and dependent variables. The regression analysis was performed in three models. Model 1 (Moderated Mediation model) was used to test H1, H2, H3, H4, and H5. Model 2 (Mediation model) is used to supplement the hypothesis testing of H5. Finally, Model 3 was used to test H6a and H6b. The overall quality of the models was examined by looking at R-square value and p value. Significance of regression coefficients was tested using p value.

69 69 Model 1 The following section covers Model 1 which is used to test the following hypotheses: H1, H2, H3, H4, and H5. The hypothesized relationship is illustrated in Figure 3. Figure 3. Illustration of Model 1. Prepared by the author of the thesis. According to the illustration of model 1 (Figure 3), Endorser Credibility has a direct impact on Brand Credibility. Besides, this relationship is moderated by Involvement into the Product Category. Brand Credibility has impact on Brand Loyalty. Additionally, Endorser Credibility has a direct and indirect effect on Brand Loyalty. The indirect relationship is mediated by Brand Credibility. In order to test the hypotheses, SPSS PROCESS macro was used (see Haynes, 2013, Appendix E, Table E.1) PROCESS breaks the generated output into several models. The first generated models checked if moderation effect exists (Table 17 and Table 19). Another model is designed to see if mediation effect is present (Table 21). The final output of the results provides an index for moderated mediation (Table 22).

70 70 Table 17 Moderated Mediation Model Summary (Outcome - Brand Credibility) Outcome BC Model Summary R R-sq MSE F df1 df2 p 0,5312 0,2821 1, ,2151 3, ,0000 0,000 Model coeff se t p LLCI ULCI constant 5,4792 0, ,2748 0,000 5,3209 5,6374 EC 0,3519 0,0813 4,3273 0,000 0,1915 0,5122 I 0,3063 0,0578 5,3018 0,000 0,1924 0,4202 int_1-0,0683 0,0494-1,3825 0,1683-0,1658 0,0291 Note. Prepared by the author of the thesis. Table 17 summarizes the moderation effect of Involvement into the Product Category. The overall significance of the model is justified. R-square of the model is and p value approximates zero. In order for the moderation effect to exists, the following assumptions should be satisfied: Endorser Credibility should affect Brand Credibility, Involvement into the Product Category should effect Brand Credibility, the interaction term, which is Endorser Credibility*Involvement, should affect Brand Credibility. According to Table 17, Endorser Credibility has a direct positive impact on Brand Credibility as p value is within the acceptable significance level (p =< 0.05). Confidence intervals, including lower and upper intervals, do not cross 0 which also indicates that the relationship is significant (95% [0.1915, ]). Moreover, Involvement into the Product Category also has a direct positive effect on Brand Credibility. In this case p value is approximately equal to 0. Lower confidence interval equals to while upper confidence interval is equal to The interaction term, int_1, is non-significant, b = , 95% [ , ], t = , p =

71 71 To sum up, conditions for moderation are not satisfied, meaning that the relationship between Endorser Credibility and Brand Credibility is not moderated by Involvement into the Product Category. Thus, the generated model supports H1, indicating that there is a positive direct effect of endorser credibility on brand credibility. In the meantime, the model fails to provide statistical support for H2, stating that involvement into the product category moderates the relationship between endorser credibility and brand credibility (Table 18). Table 18 Summary of the Hypotheses Test Results: H1 and H2 Hypotheses Results H1: Endorser credibility has a direct positive impact on brand credibility Supported H2: Involvement into the product category moderates the relation between Rejected endorser credibility and brand credibility Note. Prepared by the author of the thesis. Table 19 illustrates the relationship between Endorser Credibility, Brand Credibility and Brand Loyalty. The overall model is significant. R-square of the model is 0.433, p =< 0. Table 19 Moderated Mediation Model Summary (Outcome - Brand Loyalty) Outcome BL Model Summary R R-sq MSE F df1 df2 p 0,6583 0,4333 1, ,1321 2, ,0000 0,000 Model coeff se t p LLCI ULCI constant -0,851 0,4277-1,9899 0,0479-1,6941-0,0079 BC 0,7715 0, ,0329 0,0000 0,6199 0,9231 EC 0,1605 0,0781 2,0569 0,0409 0,0067 0,3144 Note. Prepared by the author of the thesis. Based on the output of Table 19, it appears that Endorser Credibility has a direct positive impact on Brand Loyalty. In this case p = 0.04 which is below the acceptable level of 0.05.

72 72 Coefficient of Endorser Credibility is equal to , t (208) = Additionally, Brand Credibility appears to be a significant predictor of Brand Loyalty (p =< 0). Coefficient is equal to , t (208) = Thus, it can be concluded that the model supports H3, which states that brand credibility has a direct positive impact on brand loyalty. Besides, the model provides statistical evidence for the support of H4, which indicates that endorser credibility has a direct positive impact on brand loyalty (Table 20). Table 20 Summary of the Hypotheses Test Results: H3 and H4 Hypotheses Results H3: Brand credibility has a direct positive impact on brand loyalty Supported H4: Endorser Credibility has a direct positive impact on brand loyalty Supported Note. Prepared by the author of the thesis. Based on Table 21, it appears that mediation effect exists. In other words, the direct effects differ from indirect effects. This is true as the effect size of direct effects of Endorser Credibility on Brand Loyalty (0.1605) differs compared to the size of indirect effects of Endorser Credibility on Brand Loyalty (0.3472; ; ). In spite of that, the mediation effect of Brand Credibility on the relationship between Endorser Credibility and Brand Loyalty should be tested separately using the template of Hayes Model 4 (Hayes, 2013).

73 73 Table 21 Moderated Mediation Model (Direct and Indirect Effects) Direct effect of X on Y Effect SE t p LLCI ULCI 0,1605 0,0781 2,0569 0,0409 0,0067 0,3144 Conditional indirect effect(s) of X on Y at values of the moderator(s): Mediator I Effect Boot SE BootLLCI BootULCI BC -1,4365 0,3472 0,0748 0,2096 0,5051 BC 0,0000 0,2715 0,0612 0,1621 0,4014 BC 1,4365 0,1957 0,0867 0,0375 0,3815 Note. Prepared by the author of the thesis. Table 22 indicates the index of moderated mediation. Based on the output provided in Table 22, 0 is within the confidence interval (95% [ , ]. It implies that there is no moderated mediation. Table 22 Moderated Mediation Model (Index) Mediator Index SE(Boot) BootLLCI BootULCI BC -0,0527 0,0369-0,1300 0,0155 Note. Prepared by the author of the thesis. Model 2 The mediation effect of Brand Credibility on the relationship between Endorser Credibility and Brand Loyalty is tested using the template of Hayes Model 4 (see Hayes, 2013, Appendix E, Table E.2). The output of SPSS confirms that Brand Credibility acts as a mediator between Endorser Credibility and Brand Loyalty. This is true as the following conditions are satisfied: Endorser Credibility predicts Brand Loyalty, Endorser Credibility predicts Brand Credibility,

74 74 Endorser Credibility and Brand Credibility together predict Brand Loyalty (Brand Credibility should predict Brand Loyalty; Endorser Credibility no longer predicts Brand Loyalty). Table 23 shows results to test the first assumption. The generated model is significant as R square = , p =< 0. Table 23 Mediation Model (Total Effects) Outcome: BL Model Summary R R-sq MSE F df1 df2 p 0,3605 0,1300 2, ,2277 1, ,0000 0,0000 Model coeff se t p LLCI ULCI constant 0,7276 0,4816 1,5109 0,1323-0,2218 1,6771 EC 0,5342 0,0956 5,5882 0,0000 0,3458 0,7227 Note. Prepared by the author of the thesis. Table 23 indicate that Endorser Credibility predicts Brand Loyalty. Endorser Credibility is significant predictor of Brand Loyalty as p value approximates 0, b = , t (209) = Thus, the first assumption for mediation is met. Table 24 provide results to test the second assumption. As seen from Table 24, the overall model is significant as R square = , p =< 0.

75 75 Table 24 Mediation Model (Outcome Brand Credibility) Outcome: BC Model Summary R R-sq MSE F df1 df2 p 0,4163 0,1733 1, ,8227 1, ,0000 0,0000 Model coeff se t p LLCI ULCI constant 3,0684 0,3686 8,3242 0,0000 2,3417 3,7950 EC 0,4844 0,0732 6,6199 0,0000 0,3401 0,6286 Note. Prepared by the author of the thesis. According to Table 24, Endorser Credibility predicts Brand Credibility. The coefficient of Endorser Credibility is equal to , t (209) = , p =< Thus, the second assumption for mediation is met. Eventually, Table 25 generates outcome to test the final assumption. The R square of the model is and p value approximates 0. Table 25 Mediation Model (Outcome - Brand Loyalty) Outcome: BL Model Summary R R-sq MSE F df1 df2 p 0,6583 0,4333 1, ,5282 2, ,0000 0,000 Model coeff se t p LLCI ULCI constant -1,6396 0,4496-3,6468 0,0003-2,5259-0,7532 BC 0,7715 0, ,5519 0,0000 0,6274 0,9156 EC 0,1605 0,0851 1,8873 0,0605-0,0072 0,3282 Note. Prepared by the author of the thesis. Based on Table 25, Brand Credibility predicts Brand Loyalty. b = , t (208) = , p <= 0. Endorser Credibility no longer predicts variable Brand Loyalty. b = , t (108) = , p = 0.06 (above the significance level). Thus, the final condition for mediation

76 76 is satisfied. Brand Credibility predicts Brand Loyalty, and Endorser Credibility no longer predicts Brand Loyalty. To sum up, all conditions were satisfied for the mediation effect to exists. Additionally, confidence intervals of indirect effects model predict that Brand Credibility mediates the relationship between Endorser Credibility and Brand Loyalty. To be specific, confidence intervals, including lower and upper intervals, do not cross 0 which also indicates that the relationship is significant (95% [0.2452, ]). Table 26 Mediation Model (Total, Direct, and Indirect Effects) Total effect of X on Y Effect SE t p LLCI ULCI 0,5342 0,0956 5,5882 0,0000 0,3458 0,7227 Direct effect of X on Y Effect SE t p LLCI ULCI 0,1605 0,0851 1,8873 0,0605-0,0072 0,3282 Indirect effect of X on Y Effect Boot SE BootLLCI BootULCI BC 0,3737 0,069 0,2452 0,5163 Note. Prepared by the author of the thesis. All in all, statistical output showed that H5 is supported. In other words, Brand Credibility mediates the relationship between Endorser Credibility and Brand Loyalty (Table 27). Table 27 Summary of the Hypotheses Tests Results: H5 Hypotheses H5: Brand Credibility mediates the relationship between endorser credibility and brand loyalty Note. Prepared by the author of the thesis. Results Supported

77 77 Model 3 Figure 4 illustrates the graphical relationship between independent and dependent variables and hypothesized link. Model 3 illustrates what impact Engagement with celebrities and Familiarity with Endorser has on Endorser Credibility. Figure 4. Illustration of Model 3. Prepared by the author of the thesis Table 28 indicates results of ANOVA. ANOVA tells whether the model significantly predicts the outcome variable (Fiedl, 2013). In this case, F is , which is significant at p =< As a result, it can be concluded that the regression model is an accurate prediction of Endorser Credibility. Table 28 Model 3: ANOVA Regression Sum of Squares df Mean Square F Sig. 42, ,460 20,165,000 b Residual 220, ,064 Total 263, a. Dependent Variable: Endorser_Credibility b. Predictors: (Constant), Familiarity, Engagement Note. Prepared by the author of the thesis. Overall, adjusted R square of the model is relatively low, representing It means, that Engagement with Celebrities together with Familiarity with Celebrities explain 15.5% variation in Endorser Credibility (Table 29).

78 78 Table 29 Model 3 Summary Std. Error Model R R Square Adjusted R Square of the Estimate 1.404a a Predictors: (Constant), Familiarity, Engagement Note. Prepared by the author of the thesis. According to Table 30, Engagement with Celebrities appears to be a significant explanation of Endorser Credibility (b = 0.387, p =< 0). In the meantime, Familiarity with Celebrity, does not have an impact on Endorser credibility. This is evidenced by the insignificant p value. In other words, the p value of this construct in above the acceptable alpha level, which is 0.05 (5%). Table 30 Model 3: Linear Regression Coefficients Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta (Constant) Engagement Familiarity a Dependent Variable: Endorser_Credibility Note. Prepared by the author of the thesis. Thus, it can be summarized that the following hypothesis is supported: engagement with celebrities has a direct positive impact on endorser credibility (H6a). In the meantime, H6b, stating that familiarity with endorser has a direct positive impact on endorser credibility, is rejected (Table 31).

79 79 Table 31 Summary of the Hypotheses Tests Results: H6a and H6b Hypotheses H6a: Engagement with celebrities has a direct positive impact on endorser credibility H6b: Familiarity with endorser has a direct positive impact on endorser credibility Note. Prepared by the author of the thesis. Results Supported Rejected Summary of Empirical Research Findings In this chapter, the conclusions regarding gathered data were made. The use of statistical procedures enabled to address research questions and observe the set hypotheses. In order to test reliability of each scale, Cronbach s alphas were run for each of the constructs. All values fell in the satisfactory level, which is above 0.7, suggesting internal consistency and reliability. Through descriptive statistics, the study found that respondents in the sample had the highest score for Brand Credibility construct (mean of 5.44 out of 7-point Likert scale). In the meantime, Endorser Credibility has the score of Involvement construct together with Brand Loyalty construct has the lowest results. Involvement stands for 3.65 and Brand Loyalty for Additional constructs, including Engagement and Familiarity results in the following values: 4.35 and Spearman s matrix of correlation indicates that there is a positive relationship between analysed variables. To be specific, the correlation between Endorser Credibility and Brand Credibility stands for In the meantime, the correlation between Brand Credibility and Brand Loyalty equals to Endorser Credibility and Brand Loyalty results in the correlation that equals to Finally, the correlation between Engagement with celebrities and Endorser Credibility equals to while Familiarity with endorser correlates with Endorser Credibility in a weak way as correlation coefficient represents Besides

80 80 correlation matrix, the relationship between variables was illustrated using scatterplots. In general, correlation analysis confirmed that there are relationships between the independent and dependent variables of the research. Moving on, the empirical part of the paper was based on three models. Model 1 was designed to test key hypotheses of the research (H1, H2, H3. H4, H5). Model 2 was used to supplement the hypothesis testing of H5. One of the confirmed hypothesis is that Endorser Credibility positively affects Brand Credibility. Another hypothesis, indicating that Involvement into the Product Category moderates the relationship between Endorser Credibility and Brand Credibility, was rejected. It was confirmed that Brand Credibility has impact on Brand Loyalty. Moreover, Endorser Credibility was found to have direct and indirect effect on Brand Loyalty as presented relationships were significant. Brand Credibility was used a mediator between Endorser Credibility and Brand Loyalty. Model 3 were designed to test H6a and H6b. Model 3 indicated the predictors of Endorser Credibility construct. Looking at the predictors of Endorser Credibility, it was confirmed that Engagement with celebrities has a positive direct impact on Endorser Credibility while Familiarity with Endorser appeared to be a non-significant predictor. As the summary of the hypotheses tests results indicate, H1, H3, H4, H5, and H6a are supported (Table 31). It means, that findings of this research paper goes in line with presented theoretical expectations that are defined in a conceptual research model. In the meantime, H2 and H6a are rejected. There are valid arguments, that are presented in Discussion part, why the proposed relationships fail to meet statistical significance.

81 81 Table 32 Summary of the Hypotheses Tests Results Hypotheses Results H1: Endorser credibility has a direct positive impact on brand credibility Supported H2: Involvement into the product category moderates the relation between Rejected endorser credibility and brand credibility H3: Brand credibility has a direct positive impact on brand loyalty Supported H4: Endorser Credibility has a direct positive impact on brand loyalty Supported H5: Brand Credibility mediates the relationship between endorser credibility Supported and brand loyalty H6a: Engagement with celebrities has a direct positive impact on endorser Supported credibility H6b: Familiarity with endorser has a direct positive impact on endorser Rejected credibility Note. Prepared by the author of the thesis.

82 82 Discussion The main goal of this study was to examine the relationship between Endorser Credibility and Brand Credibility, taking into account the moderating effect, of Involvement into the Products Category. Additionally, the direct and indirect relationships between Endorser Credibility and Brand Loyalty were studied as well. The discussion of the research findings is based on the following aspects. Firstly, implications of the study and contribution to the Literature are presented. Secondly, managerial implications are introduced. The final part of the section acknowledges limitations and future research recommendations. Implication of the Study and Contribution to the Literature The first research goal was to examine the relationship between Endorser Credibility and Brand Credibility. According to the research findings, there is a direct positive relationship between Endorser Credibility and Brand Credibility. Hence, this relationship provides support for H1 of the thesis. This relationship is relatively new in academic literature. In other words, this relationship has been addressed only for a couple of times in the previous research (Cornwell, Pappu & Spry, 2011). Consistent with Cornwell, Pappu and Spry (2011) and Wang, Kao and Ngamsiriudom (2017), a relationship between Endorser Credibility and Brand Credibility was found to be significant and positive. All in all, the relationship between Endorser Credibility and Brand Credibility contributes to celebrity endorsement and branding research topics. H2 predicted the relationship between Endorser Credibility and Brand Credibility taking into account the moderating effect of Involvement into the Product Category. The moderating variable of Involvement was included due to the recommendations of previous academic articles studying the impact of celebrity endorser on the brand (Cornwell, Pappu & Spry, 2011; Erfgen, Zenker & Sattler, 2015; La Ferle & Choi, 2005). This examined

83 83 relationship between Endorser Credibility and Brand Credibility taking into account the moderating variable of Involvement into the Product Category, has not been explored so far in academic scholars. Besides, the scale measuring Involvement into Product Category is a continuum. This is a new approach to measure involvement on a continuum basis instead of separating products into two groups: low or high involvement. It is recommended to apply continuum scale as there is no universal agreement on clear distinction between high and low involvement. In general, product involvement is based on personal evaluation (Martin, 1998). To be specific, what is considered by one as high involvement product could be seen as low involvement product by other (Martin, 1998). However, results of the research indicate that Involvement into the Product Category fails to moderate the relationship between Endorser Credibility and Brand Credibility. This is hypothesised in H2, meaning that the hypothesis is rejected. According to McClelland and Judd (1993), it is common to detect statistically reliable interaction effects in the experimental studies, while non-experimental research papers frequently fail to find theorized moderator effects. It is easier to achieve moderation effect in experimental studies due to the following reasons: experimental design studies produce less model errors compared to non-experimental studies (McClelland & Judd, 1993). If there are errors in measuring independent variable and moderating variable, errors are even exacerbated when interaction term is created (independent variable*moderator) (McClelland & Judd, 1993). In experimental design studies, researches have some power to control measurement errors. Besides, other factors, such as nonlinearity of independent variable and moderating variable, are known to create difficulties in the detection of moderator effects (McClelland & Judd, 1993). Thirdly, results of the research confirmed the positive direct relationship between Brand Credibility and Brand Loyalty. This was hypothesized in H3. Such conclusions strengthen past

84 84 research findings that explore the link between Brand Credibility and Brand Loyalty (Alam, Arshad & Shabbir, 2012; Sweeney & Swait, 2008). Even though this relationship has been studied in academic literature, the current study provides additional findings. Results for previous studies (Alam, Arshad & Shabbir, 2012; Sweeney & Swait, 2008) were based on samples gathered from customers of service providers, including retail banking and long distance telephone company. The current study enhances understanding by focusing on products instead of services. As a result, those findings are valuable contribution in understanding brand credibility and brand loyalty link. The outcome of H4 shows that Endorser Credibility has a direct positive impact on Brand Loyalty. In this research paper Brand Loyalty is defined not only by purchase intention but also by emotional attachment to the brand. According to Day (1969), brand loyalty is a multidimensional construct, which takes into consideration favourable attitude towards the brand as well as repeated purchasing behaviour. True brand loyalty occurs when two dimensions are taken into account (Day, 1969), including attitudinal and behavioural (Odin, Odin, & Valette-Florence, 2001). It means, that each of these categories have separate measurement scales, which is applied in this research paper. Current academic scholars separately explore the relationship between celebrity endorsement and sub-dimensions of brand loyalty. To be specific, this academic paper uses one construct to assess Brand Loyalty. Other academic papers look distinctly at brand purchase intention (Wang, Cheng & Chu, 2013; Wang, Kao & Ngamsiriudom, 2017; Wang & Yang, 2010) and attitude towards the brand (Bergkvist, Hjalmarson, & Mägi, 2016; Bhatt, Jayswal & Patel, 2013; Pradhan, Duraipandian, & Sethi, 2016). There are present academic scholars that asses two constructs, including brand purchase intentions and favourable attitude towards the brand, but does not define it as brand loyalty (Erfgen, Zenker & Sattler, 2015; McCormick, 2016).

85 85 Besides the direct effect of Endorser Credibility on Brand Loyalty, the indirect effect between variables exists as well. In this case, Brand Credibility mediates the relationship between Endorser Credibility and Brand Loyalty. This relationship is presented in H5 and the empirical research provides support for this hypothesis. Even though Brand Credibility is frequently used as the mediator between two variables (Anridho & Liao, 2013; Cornwell, Pappu & Spry, 2011), there are no academic scholars that use this mediator to measure the relationship between Endorser Credibility and Brand Loyalty. As a result, the empirical findings that support the proposed hypothesis provide useful contribution to academic literature related to celebrity endorsement, brand credibility and loyalty. H6a and H6b studied what impact did the Engagement with Celebrities together with Familiarly with Endorser had on Endorser Credibility. Based on the research findings, it appeared that Endorser Credibility has a direct positive impact on Endorser Credibility. In the meantime, H4b failed to validate that Familiarly with Endorser has a direct positive impact on Endorser Credibility. The paper contributes to academic literature as both construct, including Engagement with Celebrities as well as Familiarity with Endorser, are gaining attention due to the increasing importance of social media. To be specific, with the emergence of technologies, the gap between celebrities and followers was tightened (Kowalczyk et al, 2016). Current technologies enable the communication between celebrities and their fans (Kowalczyk et al, 2016). Besides, social media becomes and important advertising channel. As a result, Engagement with Celebrities together with Familiarity with them are relevant as never have been before. Besides, empirical evidence extends the academic literature related to source credibility. Based on source credibility theory, different academic scholars elaborated how source credibility affects attitudes towards the advertisement (Aziz, Ghani and Niazi, 2013;

86 86 Knoll & Matthes, 2016; Muda et al, 2014; Saeed et. al, 2014), towards the brand, and purchase intentions (Muda et al, 2014). The findings of current research paper add that endorser credibility also contributes to brand credibility. Additionally, while the majority of academic articles related to source credibility focuses on attitude towards the advertisement, attitudes towards the brand and purchase intentions, this research paper focuses on key aspects of the strong brand, which is brand credibility. Moreover, academic literature regarding the effectiveness endorsement strategy and its impact on brands are mainly based within the US market. As a result, little has been known about the perception of celebrity endorsement within the Baltic region. The research findings suggest that respondents are aware of endorsers present in Lithuania. Lithuanian celebrities, including Arvydas Sabonis together with Agnė Jagėlavičiūtė were the most often indicated by the respondents. Additionally, indicated endorsers are considered to be credible. However, worldwide celebrities were mentioned more often, meaning that local endorsers are not that well rooted in consumers minds compared to worldwide celebrities endorsing brands such as L Oréal, Nike, or Chanel. Managerial Implications In accordance with empirical findings, the study identifies the following managerial implications. Firstly, based on literature review, credibility is an important tool to build strong brand, as it overcomes perceived risk. This is important as a strong brand is competitive advantage for the company. The findings of the research paper indicate that Endorser Credibility contributes to building Brand Credibility. It means that selecting an effective endorser contributes positively to building brand credibility. In general, the study demonstrates why managers benefit from investing in a celebrity endorsement strategy by evaluating how a celerity endorser

87 87 affects the strength of the brand in the image of customers. Brand managers can be more confident in selecting credible celebrity endorsers because of their ability to enhance brand credibility. Secondly, the findings of the paper confirm, that selecting an effective celebrity is a risky step as it has impact on the endorsed brand. If an endorser has high levels of credibility it is desirable for a brand to form an alliance with the celebrity. Thus, managers choosing celebrities for advertisement campaign should take into account the potential impact on the endorsed the brands. This is explained by the findings of the research that demonstrated positive relationship between endorser credibility and brand credibility. The current study reveals that brand credibility is related to brand loyalty. To be specific, the findings of the research paper show that credibility of the brand has a direct and positive impact on brand loyalty. That is, the higher the brand credibility, the higher the loyalty of the brand. Knowing how to maintain and improve brand credibility are significant for brand loyalty. Companies that are able to signal trust and quality through credible brands are able to create long-term relationships with their customers. This is particularly sensitive for industries with high retention rates, such banks or telecommunications (Sweeney & Swait, 2008). Therefore; managers should be aware of factors such as brand credibility as it affects brand loyalty. Research findings indicate that there is an indirect effect of endorser credibility on brand loyalty. The relationship between two variables flows through brand credibility. Such findings explain managers how celebrity endorsement contributes to brand loyalty. In other words, it adds clarity and transparency on celebrity endorsement strategy in general. The research findings illustrate what determines endorser credibility. As the findings of the paper confirm, engagement with celebrities has a positive impact on endorser credibility.

88 88 It means that managers should be aware those customers that are engaged with celebrities as they perceive endorser more credible. Limitations and Recommendations There are several limitations of this research paper that could be adopted for future academic studies. To start with, the primary limitation of the study is linked with the generalizability of the findings. The gathered primary data takes into account population aged years old. The results of the research are bounded by the choice of the respondent group. The use of all age groups could have revealed different results. Additionally, all respondents were of Lithuanian origin. Therefore, findings may not be applicable to other markets. Based on the limitations of the study, the recommendation for the future research would be to replicate the model with older respondents. Besides, the analysis could be performed across different markets in order to generate additional external validity of the research findings. Besides, it recommended to have larger sample, that could potentially provide more significant results. Additionally, the sample was gathered using non-probability sampling technique. As a consequence, the representativeness of the sample is limited. Future research should investigate the separate effectiveness of local celebrities and worldwide celebrities on the relationship between Endorser Credibility and Brand Credibility. An important finding of this research is that local as well as worldwide celebrities are successful in building brand credibility. However, worldwide celebrities are considered as more credible compared to local ones. As previously mentioned, brands, endorser by worldwide celebrities are considered to be more credible than endorsed by local famous figures. Future research could investigate if worldwide celebrity would have a stronger impact on brand credibility compared to local celebrity.

89 89 Moreover, other scales to measure each construct could be retrieved. Even though current scales demonstrate reliability and validity expressed by significant Chronbach s alphas, responses represent low variation as responses are skewed towards 5-7 in 7 point Likert scale. The reasoning behind could be the fact that some of the items in the scales were not translatable to Lithuanian language. It means that the scale fails to capture conceptual equivalence. As a result, questionnaire used in the original form could resolve this issue.

90 90 Conclusion All in all, it can be concluded that research goals were successfully completed. Firstly, the literature review has been performed. It enabled to analyse previous research in the field of endorser credibility, brand credibility, involvement into product category, and brand loyalty. Based on previous academic scholars, the conceptual model was built. The constructed model proposed the following key relationships: the positive impact of endorser credibility on brand credibility, the moderating effect of involvement into the product category on endorser credibility brand credibility link, the positive influence of brand credibility on brand loyalty, the direct and indirect relationship between endorser credibility and brand loyalty. Besides, additional relationships were explored: the impact of engagement with celebrities on endorser credibility and the effect of familiarity with endorser on endorser credibility. Secondly, the empirical analysis was conducted in order to validate the proposed relationships. This allowed to answer the main research question whether endorser credibility has impact on brand credibility taking into account the moderating effect of involvement into the product category. Lastly, empirical research results showed that there is a positive direct effect of endorser credibility on brand credibility. However, involvement into the product category appeared as insignificant moderator between endorser credibility brand credibility link. Meanwhile, brand credibility was found to be positively related to brand loyalty. The outcome of empirical findings supported that there is direct and indirect effect of endorser credibility on brand loyalty. Engagement with celebrities showed influence on endorser credibility while familiarity with endorser appeared as insignificant predictor of endorser credibility. In general, the research findings showed that results are consistent with theoretical expectations. Moreover, confirmed relationships are relatively new in the academic literature. As the empirical findings

91 91 support the proposed hypothesis, results of the thesis provide useful contribution to the academic literature related to celebrity endorsement, brand credibility and brand loyalty. Results of this research are of interest to both managers and company owners. To be specific, celebrity endorsement strategy should be employed in order to build strong brand. It was found that employing a credible endorser contributes positively to brand credibility. Additionally, the research finding suggested that brand credibility has a positive direct impact on brand loyalty. Knowing how to maintain and improve brand credibility are significant for brand loyalty. It means that managers and company owners should focus on building credibility of the brand if they want to have loyal customers. Although this research has been able to provide valuable contribution to academic literature, the findings of the research should not be taken for granted. To be specific, the generalizability of the findings of this research are questionable. Representativeness of the population is rather limited due to non-random sampling technique. Moreover, the research results are bounded by the choice of the respondent group and their Lithuanian origin. As a result, further research should take into account the proposed recommendations.

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105 105 Appendices Appendix A Questionnaire Table A.1 Questionnaire in English and Lithuanian Take a moment to think about the advertisement in which celebrity is endorsing the product or service. Picture this advertisement in your mind. Susikaupkite ir prisiminkite reklamą, kurioje įžymybė pristato prekę ar paslaugą. 1 Name of celebrity Užrašykite įžymybės vardą ir/ar pavardę (tik vieną). 2 Endorsed brand Užrašykite prekinį ženklą, kurį pristato Jūsų pasirinkta įžymybė. 3 Endorsed product (service) Užrašykite prekę ar paslaugą, kurią pristato Jūsų pasirinkta įžymybė. While answering the below indicated questions think of the celebrity you indicated before. Please indicate the extent of agreement with following statements, where 1 means totally disagree and 7 means totally agree. Toliau atsakinėdami į klausimus galvokite apie įžymybę, kurią užrašėte. Vertinimui naudokite 7 balų skalę, kur 1 reiškia visiškai nesutinku, 7 reiškia visiškai sutinku. Ohanian (1990) Attractive 7 Patraukli/-us Classy 7 Madinga/-as Beautiful 7 Graži/-us Elegant 7 Elegantiška/-as Expert 7

106 106 Ekspertė/-as 6 Experienced Patyrusi/-ęs 7 Knowledgeable Turinti/-is žinių Qualified 8 Kvalifikuota/-as 9 Dependable Priklausoma/-as 10 Honest Garbinga/-as Sincere 11 Nuoširdi/-us Trustworthy 12 Patikima/-as While answering the below indicated questions think of the celebrity you indicated before. Please indicate the extent of agreement with following statements, where 1 means totally disagree and 7 means totally agree. Toliau atsakinėdami į klausimus galvokite apie įžymybę kurią užrašėte. Įvertinkite, kiek sutinkate su šiais teiginiais. Vertinimui naudokite 7 balų skalę, kur 1 reiškia visiškai nesutinku, 7 reiškia visiškai sutinku. Kent & Allen (1994) 1 2 Concerning this celebrity, I am familiar Gerai žinau šią įžymybę. Concerning this celebrity, I am experienced Dažnai pastebiu šią įžymybę. 3 Concerning this celebrity, I am knowledgeable Daug žinau apie šią įžymybę

107 107 While answering the below indicated questions think of the brand you indicated before. Please indicate the extent of agreement with following statements, where 1 means totally disagree and 7 means totally agree. Toliau atsakinėdami į klausimus galvokite apie prekinį ženklą, kurį užrašėte. Įvertinkite, kiek sutinkate su šiais teiginiais. Vertinimui naudokite 7 balų skalę, kur 1 reiškia visiškai nesutinku, 7 reiškia visiškai sutinku. Erdem & Swait (2004) This brand reminds me of someone who s competent 1 7 Šis ženklas yra kompetetingas This brand delivers what it promises 2 7 Šis ženklas suteikia tą, ką buvo pažadėjęs This brand has a name you can trust 3 7 Šis ženklas yra patikimas This brand doesn t name pretend to to be something it isn t 7 Šis ženklas nesistengia būti tuo, ko nėra Spears & Singh (2004) 1 Definitely not buy/definitely buy it Ateityje tikiuosi pirksiu šį prekės ženklą. Chaudhuri & Holbrook (2001); Oliver (1997); Pritchard, Havitz, & Howard (1999), Sirdeshmukh, Singh, & Sabol (2002) 1 2 I use this brand because it is the best choice for me Aš naudoju šį prekinį ženklą, nes tai geriausias pasirinkimas I consider myself to be a loyal patron of this brand. Aš esu lojali/-us šiam prekiniam ženklui. 3 I am committed to the manufacturer of this brand. Aš jaučiuosi įsipareigojusi/-ęs šiam prekiniam ženklui. 4 In the future, I would be willing to pay a higher price for this brand. Net jei prekės ženklas šiek tiek pabrangtų, aš ir toliau jį rinkčiausi While answering the below indicated questions think of the product (service) you indicated before. Please indicate the extent of agreement with following statements, where 1 means totally disagree and 7 means totally agree.

108 108 Toliau atsakinėdami į klausimus galvokite apie prekę ar paslaugą, kurią užrašėte. Įvertinkite, kiek sutinkate su šiais teiginiais. Vertinimui naudokite 7 balų skalę, kur 1 reiškia visiškai nesutinku, 7 reiškia visiškai sutinku. Laurent & Kapferer (1985) I attach great importance to this product (service) 1 7 Ši prekė (paslauga) man yra svarbi This product (service) interests me a lot. 2 7 Ši prekė (paslauga) mane labai domina This product (service) leaves me totally indifferent. 3 7 Šiai prekei (paslaugai) aš esu neabejingas It would give me pleasure to purchase this product (service). 4 7 Jausčiau pasitenkinimą pirkdamas šią prekę (paslaugą) When you buy this product (service), it is a bit like giving a gift to yourself. Kai perku šią prekę (paslaugą), jaučiuosi tarsi kažką dovanočiau sau. Having this product (service) is a pleasure for me. Man malonu turėti šią prekę (paslaugą). When you purchase this product (service), you are never certain you made the right choice. Kai perku šią prekę (paslaugą) niekada nesu tikras, ar padariau teisingą sprendimą. Whenever you buy this product (service), you never really know whether it is the one you should have bought. Kai perku šią prekę (paslaugą) niekada nežinau, ar pasirinkta prekė (paslauga) yra ta vienintelė, kurią turėjau pasirinkti. Choosing this product (service) is rather complicated. Priimti sprendimą įsigyti šią prekę (paslaugą) man yra gana sudėtinga Please indicate the extent of agreement with following statements, where 1 means totally disagree and 7 means totally agree. Įvertinkite, kiek sutinkate su šiais teiginiais. Vertinimui naudokite 7 balų skalę, kur 1 reiškia totally disagree and 7 means totally agree. Rubin & Perse (1987)

109 I feel sorry for my favorite celebrity when he or she makes a mistake Man gaila mėgstamos įžymybės, jei jai/jam kažkas atsitinka. My favorite celebrity's personality makes me feel comfortable, as if I am with friends Man patinka mėgstamos įžymybės asmenybė. I see my favorite celebrity as a natural, down to earth person. Manau, kad mėgstama įžymybės turi gerą charakterį. I look forward to watching my favorite celebrity on television. Man patinka stebėti mėgstamą įžymybę per televiziją. I would watch programs that featured my favorite celebrity, even if I didn't regularly watch the program. Žiūrėčiau laidas, kuriose dalyvauja mano mėgstama įžymybė. When my favorite celebrity is interviewed, he or she seems to understand the kinds of things I want to know. Sutampa mano ir mėgstamos įžymybės požiūris į tam tikrus dalykus. If there were a story about my favorite celebrity in a newspaper or magazine, I would read it. Skaitau straipsnius, kurie susiję su mėgstama įžymybe. I miss seeing my favorite celebrity when he or she is not in the media. Pasigendu mėgstamos įžymybės, kai nematau jos/jo žiniasklaidoje. I would like to meet my favorite celebrity in person Norėčiau susipažinti su mėgstama įžymybe. I find my favorite celebrity to be physically attractive. Manau, kad mano mėgstama įžymybė yra patraukli. Appendix B Population Size Table B.1 The Size of Population Age group Population

110 and over Source: Lithuanian Department of Statistics Table B.2 The size of Population of Interest Age group Population Source: Lithuanian Department of Statistics

111 111 Appendix C Regression Assumptions: Homoscedasticity Table C.1 Dependent Variable: Brand Credibility, Independent Variable Endorser Credibility Note. Prepared by the author of the thesis. Table C.2 Dependent Variable: Brand Loyalty, Independent Variable Brand Credibility Note. Prepared by the author of the thesis.

112 112 Table C.3 Dependent Variable: Endorser Credibility, Independent Variables Engagement with Celebrities, Familiarity with Endorser Note. Prepared by the author of the thesis. Table C.4 Dependent Variable: Brand Loyalty, Independent Variable Endorser Credibility Note. Prepared by the author of the thesis.

113 113 Appendix D Linear Relationships Between Variables Table D.1 Linear Relationship Between Endorser Credibility and Brand Credibility Table D.2 Linear Relationship Between Brand Credibility and Brand Loyalty

114 114 Table D.3 Linear Relationship Between Endorser Credibility and Brand Loyalty Table D.4 Linear Relationship Between Engagement with Celebrities and Endorser Credibility

115 115 Table D.5 Linear Relationship Between Familiarity with Endorser and Endorser Credibility