World over celebrities have been

Exploring Celebrity Licensing as Opposed to Celebrity Endorsement : A Consumer Perspective Payal S. Kapoor* Celebrity licensing is becoming an important tool for the marketers. Marketers are exploring newer ways to involve celebrities in the product development and promotion, in order to create perceivable differentiation in the market. The main purpose of this research is to understand consumer purchase intention and attitude towards celebrity licensed products as opposed to celebrity endorsed products. In that attempt it is evaluated whether consumers recognize and differentiate products that are infused with the personal style and involvement of the celebrity vis-à-vis products where celebrity is only appearing in the advertisement of the brand. Introduction World over celebrities have been effectively, and sometimes ineffectively, used for marketing communication activities of brands. Consumers are surrounded by brands that are associated with celebrities of all types film actors, sports personalities, musicians, business men, experts etc. (Friedman &Friedman, 1979). The attempt of such associations has been to transfer encouraging and favorable impact towards the brand (Atkins & Block, 1983). Marketers are associating brands with celebrities in newer and innovative ways. Celebrity endorsement and Celebrity licensing are two forms in which celebrities are employed for marketing communication activities (Mistry, 2006). Engagement of celebrity licensing form, for the first time, was witnessed by Teddy Roosevelt in 1913, where he offered his name to the Teddy Bear (Anson, 1984). Intuitively celebrity licensing is expected to be grander commitment for the celebrity as it s his or her personal style which flows into the brand, he or she may get involved in the product development, or display of his or her likeness or image against the brand. The brand is directly associated with the celebrity for its quality. Out of the two, celebrity endorsement is more extensively used method (Doss, 2011). India is steadily moving towards becoming a global super, it is expected it will lead the global branding activities. There have been sporadic examples in the recent times where the celebrity is closely involved in cocreation and product development of brands. Examples range from Sachin Tendulkar, the famous Indian cricketer, launching a consumer product brand called Sach in association with Future Group, to HritikRoshan,famous Indian actor, licensing his personal style to clothing brand John Player (Business Standard, 2010) Celebrity licensing is gathering momentum in the marketer s world, however the concept is less talked for its impacts and various facets in the academic literature. It is attempted through this research paper to explore these two forms of celebrity associations in marketing communication. The foremost purpose of this research is to explore, from consumer perspective, celebrity licensed products as opposed to celebrity endorsed products. It is attempted to evaluate whether consumers recognize and differentiate products that are infused with the personal style and involvement of the celebrity vis-à-vis products where celebrity is simply appearing in the advertisement of the brand. Literature Review Celebrity endorsement is well-researched topic in marketing literature. As defined by McCracken(1986), Celebrity endorser is any individual who enjoys public recognition and who uses this recognition on behalf of a consumer good by appearing with it in an advertisement. It has been proposed that celebrity are more effective than expert or a typical consumer, celebrity tend to develop a positive impact on product performance expectation, believability of communication and purchase intent (Friedman & Friedman, 1979). Another researcher has established no significant difference exists in purchase intention and brand attitude for celebrity endorsed and non-celebrity endorsed brands, however difference in cognition responses is observed towards the two (Mehta, 1994). According to the match-up theory, its critical to match up the image, characteristics and personality of the brand with the celebrity. Even the image and personality of the most famous and popular of celebrities may not be transferable to kinds of brands and product categories. As an endorser of a *Doctoral Student (FPM), 3rd Year, Marketing Area, Indian Institute of Management, Indore May - August 2013 Vol. 9 Issue 1 13

brand, a celebrity may adopt different roles. These roles may take a simplified explicit, implicit, imperative or co presenter form(mccracken,1989). Two models Source credibility and source Attractiveness are both categorized together as Source Model (Erdogan, 1999). The source model contends that various perceived characteristics of a communication source may have a favorable effect on message acceptance (Hovland& Weiss, 1951). Source credibility model claims that the impact of the message will depend on the endorser s perceived trustworthiness and expertise (Dholakia&Stemthal, 1977). According to McCracken (1986), Expertness is defined as the perceived ability of the source to make valid assertions. Trustworthiness is defined as the perceived willingness of the source to make valid assertions. Marketers attempt to exploit the value of trustworthiness by opting endorsers who are perceived as honest, believable and dependable. These qualities are expected to flow into the message to the consumer (Shimp, 1997). An endorser who is perceived more of an expert than others is considered to be more persuasive for their claim (Aaker & Myers, 1987). The McGuire (1985) model of source attractiveness holds that sources who are known to, liked by, and/ or similar to the consumer are attractive and, to this extent, persuasive. The model clearly highlights credibility, expertise and attractiveness as three attributes of an effective celebrity. Based on previous work on attractive celebrity it is expected that an attractive endorser will have a positive effect on brand attitude and purchase intentions (Kahle& Homer, 1985). Also based on previous study it is expected that expertise of the celebrity will also have a positive effect on brand attitude and purchase intention (Till &Busler, 1998). Celebrity licensing is another method in which celebrity are used for marketing communication activities (Mistry, 2006).A new trend is emerging in the advertising and marketing arena. Celebrities are donning the hat of strategic co-creators along withpromoting brands. There is very limited academic literature available for Celebrity Licensing. Celebrity licensing, also called as celebrity co-creation is the association of a celebrity with an organization or brand which is much more than being just a brand ambassador. The co-creator is closely involved with the development of the products and is part of all major decisions. Instead of an endorsement fee, the celebrity involved in brand co-creation, usually gets a pie in the revenue of the product (Business Standard, 2010, May 13). New business ventures are launched by celebrities themselves in order to capitalize their own brand values. Legendary singer AshaBhosle is famous not just for her singing but also her cooking. To capitalize on her popularity of culinary skills and fame in general, she has a chain of restaurants called Asha s which has opened its first restaurant at Dubai 1. Nigella Lawson s Living Kitchen range of cooking ware ;Britney Spears perfume, Victoria Beckham s line of fashion clothing are all examples of brands which have been co-created along with celebrity (Randle,2005). As posited by Doss (2011), celebrity licensing is not used very often as it tends to be greater commitment for the celebrity. Since tis the personal style, reputation of Celebrity that flows into the brand, celebrity gets directly responsible for the quality of the product. Research Focus and Methodology The review of literature brings to fore huge gaps in understanding of the Celebrity Licensing concept. The concept has not been evaluated in many of its aspects. It is unclear what bearing attractiveness, expertise and credibility of the licensor- will have over attitude and purchase intention of consumers. The perceived expertise, attractiveness and credibility may be similar or different when the celebrity is an endorser or licensor. The prime research focus is fragmented into the following Research Questions: 1. To examine attitude of consumers for a product that is endorsed by a celebrity versus when the same product is licensed by the celebrity. 2. To examine purchase intention of consumers for a product that is 1 http://www.ashasrestaurants.com/ endorsed by a celebrity versus when the same product is licensed by the celebrity. 3. To examine whether perceived expertise, attractiveness and credibility of celebrity remains same or changes as an endorser or licensor. Variables: Celebrity Attractiveness, Trustworthiness and Credibility (explained in review of literature) Brand Attitude - Brand attitude is the association between an object and the evaluation of the object (Fazio et al., 1989) Purchase Intention - The influence of celebrity perceived image on consumers willingness to purchase the product the celebrity is promoting (Daneshwary&Schwer, 2000) Hypothesis: For the purpose of testing hypothesis a fictitious brand of energy bar called Energy is created and two fictitious scenarios are Scenario 1 (licensor) It is claimed that Sachin s Energy is a new brand of Energy Bar which is developed by a company along with the famous cricketer Sachin Tendulkar. Sachin is the licensor for the brand and he is closely associated with the product development of the brand. Scenario 2 (endorser) It is claimed that Energy is a new brand of Energy Bar which is being promoted by the famous cricketer Sachin Tendulkar. Sachin is the endorser for the brand. Fictitious brand and scenario is created to avoid respondents from getting biased with prior knowledge about existing brands. Based on the research questions following Hypotheses are tested: H1o Mean of brand attitude of Scenario1 is same as the mean of brand attitude of Scenario 2; H1a Mean of brand attitude of Scenario1 is not same as the mean of brand attitude of Scenario 2 14 Journal of Marketing & Communication

H2o Mean of purchase intention of Scenario1 is same as the mean of purchase intention of Scenario 2; H2a Mean of purchase intention of Scenario1 is not same as the mean of purchase intention of Scenario 2 H3o- Mean of celebrity attractiveness for Scenario1 is same as the mean of celebrity attractiveness for Scenario 2; H3a- Mean of celebrity attractiveness for Scenario1 is not same as the mean of celebrity attractiveness for Scenario 2 H4o- Mean of celebrity expertise for Scenario1 is same as the mean of celebrity expertise for Scenario 2; H4a- Mean of celebrity expertise for Scenario1 is not same as the mean of celebrity expertise for Scenario 2 H5o- Mean of celebrity credibility for Scenario1 is same as the mean of celebrity credibility for Scenario 2; H5a- Mean of celebrity credibility for Scenario1 is not same as the mean of celebrity credibility for Scenario 2 Methodology: With genuine lack in literature of celebrity licensing an exploratory research design is followed. Based on the scales for brand attitude, purchase intention of Bruner et. al. (2005) and the literature of celebrity endorsement a three-step process is followed. A basic construct of research is developed followed with a focused group discussion is conducted online with 7 professionals from the advertising and the marketing. Recommendations of this discussion are incorporated and a final Survey Questionnaire was developed. The survey questionnaire has 13 content items and 4 demographics related items. The 13 content items capture the above mentioned variables. Question 5 and 13 capture Celebrity Credibility Question 4 and 11 capture Celebrity Expertise Two sets of survey questionnaire were developed with similar scales for the two scenarios. This questionnaire was administered to through convenience sampling to two different sets of people. Both set comprised of 150 people each. 110 people responded in the first set and 124 responded in the second set. No specific demographics is followed The questionnaire was administered online and it consisted of a cover page and the actual questionnaire. On the cover page a brief description about the Energy energy bar is given. The brief description includes its health contents and utility. The cover page also had an attractive picture of Sachin Tendulkar, short description and his role with the brand. For the Licensor scenario it is mentioned how Sachin Tendulkar is involved in the development of the brand. For endorser scenario Sachin Tendulkar s role as an endorser is explained. Inside the questionnaire items were to be rated by the respondent on a five point likert scale (Appendix -1, 2). After data tabulation and cleaning two sets of data were available for analysis. Group 1 (licensor Scenario) - 99 respondents and Group 2 (Endorser Scenario) - 104 respondents Analysis Table 1 Reliability Test The items are checked for their reliability by conducting Cronbach s Alpha test. It is found all related items have Cronbach s Alpha more than 0.7 (Table 1 and 2). Therefore it is safe to average the items together. Group - 1(Licensor) Reliability Statistics No. of Items Cronbach s Alpha Brand Attitude 0.82 4 Purchase Intention 0.81 3 Attractiveness 0.91 2 Expertise 0.93 2 Credibility 0.84 2 Table 2 Reliability Test Group- 2(Endorser) Reliability Statistics No. of Items Cronbach s Alpha Brand Attitude 0.77 4 Purchase Intention 0.80 3 Attractiveness 0.79 2 Expertise 0.82 2 Credibility 0.78 2 Question 1, 2 and 3 capture Brand Attitude Question 2, 7, 9 and 10 capture Purchase Intention Question 3 and 12 capture Celebrity Attractiveness For both groups Independent Sample T Test is conducted taking statistical significance as.05. Independent sample T Test is selected as the statistical tool as it enables to evaluate the difference in means between two groups. The test was conducted on SPSS version 15. The result of the test is as below: May - August 2013 Vol. 9 Issue 1 15

Table - 3 T Test - Group Statistics Variable Group N Mean Std. Deviation Std. Error Mean Purchase Intention Group 1 (Licensor) 99 2.95.74.07 Group 2 (Endorser) 104 3.15.82.08 Brand Attitude Group 1 (Licensor) 99 3.02.62.06 Group 2 (Endorser) 104 3.38.65.06 Attractiveness Group 1 (Licensor) 99 3.34.96.10 Group 2 (Endorser) 104 3.51.93.09 Expertise Group 1 (Licensor) 99 3.89 1.37.14 Group 2 (Endorser) 104 2.88.82.08 Credibility Group 1 (Licensor) 99 4.08.82.08 Group 2 (Endorser) 104 4.18.77.08 Table - 4 T-Test Result - Independent Samples Test Levene s Test for y Equalit of Variances t-test for Equality of Means F Sig. t df Sig. Mean Std. 95% (2- Difference Error Confidence tailed) Difference Interval of the Difference Lower Upper Purchase Intention Equal variances 2.290.132-1.819 201.070 -.200.110 -.416.017 Equal variances -1.824 200.070 -.200.110 -.416.016 not Brand Attitude Equal variances 1.667.198-3.999 201.000 -.358.090 -.535 -.182 Equal variances -4.004 201.000 -.358.089 -.535 -.182 not Attractiveness Equal variances.741.390-1.301 201.195 -.173.133 -.435.089 Equal variances -1.299 200.195 -.173.133 -.435.089 not Expertise Equal variances 22.772.000 6.395 201.000 1.009.158.698 1.320 Equal variances 6.320 158.000 1.009.160.694 1.324 not Credibility Equal variances.020.888 -.975 201.330 -.109.111 -.328.111 Equal variances -.974 199.331 -.109.111 -.328.111 not 16 Journal of Marketing & Communication

Findings and Discussion Table 5 Hypothesis Testing Result Variable F Value Sig Value from table P value - 2 tailed Result Brand Attitude.198 >.05 Equal variance.000<.05 H1o is rejected Purchase Intention.132>.05 Equal variance.07>.05 H2o not rejected Attractiveness.390>.05 Equal variance.195>.05 H3o not rejected Expertise.000<.05 Equal variance is not.000<.05 H4o is rejected Credibility.888>.05 Equal variance.330>.05 H5o not rejected From Table 3, 4 and 5 findings clearly indicate that though consumer s attitude towards the brand which is endorsed or licensed, is dissimilar, this dissimilarity does not translate to actual purchase intention. Celebrity attractiveness is found to be same for both the scenarios concluding that the celebrity may be equally attractive or unattractive to the consumer of both scenarios. Celebrity expertise perception is found to be dissimilar. Though cannot be said with certainty (as it is beyond the scope of this research) but it is possible that expertise of the celebrity plays a more important role in one of the two. Celebrity credibility is also found to be same for both scenarios concluding that the celebrity is equally credible or not credible for both scenarios. Demographic profile of respondents is mentioned in Appendix 3. To conclude, it can be said that celebrity endorsement and celebrity licensing both have different impact on consumers from the point of view of brand attitude and expertise. This study conveys that consumers develop different attitude towards brands that are only advertised by the celebrity and brands that the celebrity himself is involved in creation. Same is applicable for expertise of celebrity. For the attractiveness variable, it may be possible that celebrity being a sports person is not considered for his attractiveness. Implication to Marketers Celebrity licensing is becoming an important tool for marketing. Many companies are getting into long term tie up with celebrities. This research should give an indication to the marketers that licensing cannot be to be same as endorsement. It is one of the tools for marketing communication and it is most imperative to differentiate it from endorsement. It is difficult to evaluate an advertising campaign without having a clear goal (New Media Age, 2008). Same can be said for celebrity licensing; to expect a tool to display results without fully understand it from all its aspects can prove to be a costly affair. Limitation and Future Research With limited literature about celebrity licensing, construction of basic framework for research proved difficult. Fictitious brand Survey Questionnaire Group 1 (Licensor) Questionnaire 1 On this picture you see Sachin Tendulkar. APPENDIX 1 and scenario is used, respondents may not have be able to relate well with the brand. Though attractiveness was a variable that was getting tested but Sachin Tendulkar is rarely judged for his appearance. The results related to attractiveness may differ if a film star was used for the analysis. Future research needs to be done to build a theoretical base for celebrity licensing. It can be assessed which variable, attractiveness / credibility / expertise or any other, has greater impact on licensing versus endorsement. This study was a very basic study a clear definition and categorization needs to be done on the role and kinds of celebrity licensor. Sachin Tendulkar has been once described as the heartbeat of the nation. He is one of greatest cricketers of all times. For his fans, Sachin Tendulkar is no less than a God therefore It s not an exaggeration to call Sachin Tendulkar one of the biggest celebrity of India today. Sachin Tendulkar has signed up to promote Sachin s Energy energy bar. Sachin s Energy energy bar is a supplemental bar containing cereals and other high energy foods. It s a healthy food when people require quick energy but do not have time. It contains fast-acting carbohydrates to facilitate ultra-quick energy delivery, equal for a meal Sachin Tendulkar has been directly involved in the product development of the Energy energy bar, he will also be the face of the marketing campaign. Please turn to the next page for questionnaire May - August 2013 Vol. 9 Issue 1 17

Sr. No. Item Strongly Agree Agree Neutral Disagree Strongly Disagree 1 I like the brand Sachin s Energy 2 It is likely that I will buy Sachin s Energy 3 In my opinion Sachin Tendulkar is an attractive man 4 In my opinion Sachin is an expert in good health 5 I my opinion Sachin Tendulkar has credibility 6 Sachin s Energy is will be an effective energy bar 7 I would consider purchasing Energy 8 Sachin s Energy, energy bar is needed by all 9 I am interested in purchasing Sachin s Energy as an energy bar 10 I would recommend Sachin s Energy to others 11 In my opinion Sachin Tendulkar is a health expert 12 In my opinion Sachin Tendulkar is good looking 13 In my opinion Sachin Tendulkar is trust worthy Gender: Male Female Age: 20 years or younger 21-25 26-30 31 or older Occupation:- Student Part-time work Full time work Other APPENDIX 2 Survey Questionnaire Group 2 (Endorser) Questionnaire 2 On this picture you see Sachin Tendulkar. Sachin Tendulkar has been once described as the heartbeat of the nation. He is one of greatest cricketers of all times. For his fans, Sachin Tendulkar is no less than a God therefore It s not an exaggeration to call Sachin Tendulkar one of the biggest celebrity of India today. Sachin Tendulkar has signed up to promote Energy energy bar. Energy energy bar is a supplemental bars containing cereals and other high energy foods. It s a healthy food when people require quick energy but do not have time. It contains fast-acting carbohydrates to facilitate ultra-quick energy delivery, equal for a meal Sachin Tendulkar will be endorsing* Energy energy bar, he will be the face of the marketing campaign. Please turn to the next page for questionnaire * Endorser = someone who promotes a product or brand for a company Sr. No. Item Strongly Agree Agree Neutral Disagree Strongly Disagree 1 I like the brand Energy 2 It is likely that I will buy Energy 3 In my opinion Sachin Tendulkar is an attractive man 4 In my opinion Sachin is an expert in good health 5 I my opinion Sachin Tendulkar has credibility 6 Energy is will be an effective energy bar 7 I would consider purchasing Energy 8 Energy, energy bar is needed by all 9 I am interested in purchasing Energy as an energy bar 10 I would recommend Energy to others 11 In my opinion Sachin Tendulkar is a health expert 12 In my opinion Sachin Tendulkar is good looking 13 In my opinion Sachin Tendulkar is trust worthy 18 Journal of Marketing & Communication

Gender: Male Female Age: 20 years or younger 21-25 26-30 31 or older Occupation:- Student Part-time work Full time work Other APPENDIX 3 Demographic profile of respondents: Gender Profile: Age Profile: Occupation Profile: References Aaker, A., Myers, J. (1987). Advertising Management (3rd ed.). Englewood Cliffs, NewJerse., Prentice-Hall, Inc. Atkin, Charles.,& Block, Martin. (1983).Effectiveness of Celebrity Endorsers.Journal of Advertising Research, 23( 1), 57-61.Anson, Weston. (1984). A Licensing Retrospective and Glimpse into the Future. Merchandising Reporter, 3 (5), 4 5. Business Standard (2010). When celebrities co-create brands. Retrieved from http://www.business-standard.com/india/news/when-celebrities-co-create-brands/394668/ Bruner, G.C., Hensel, P.J., & James, K.E. (2005).Marketing scales handbook: A compilation of multi-item measures (Volume 4).Chicago: American Marketing Association. Dholakia, R., &Stemthal, B. (1977).Highly Credible Source: Persuasive Facilitator or Persuasive Liabilities?.Journal of Consumer Research,3 (4),223-232. Doss, S. (2011). The transference of brand attitude: the effect on the celebrity endorsement. Journal of Management and Marketing Research, 7, 1-11 Erdogan, Zafer,B.,(1999).Celebrity Endorsement: A Literature Review. Journal of Marketing Management, 15(4), 291 314 Friedman, H.H., & Friedman, L. (1979).The Effectiveness of Advertisements Utilizing Four Types of Endorsers. Journal of Advertising Research,19 (5), 63-71 Fazio, R.H. Powell., & Williams, C.J. (1989). The role of attitude accessibility in the attitude-to-bahavior process. Journal of Consumer Research,16(Dec),280-288 Hovland, Carl.,& Walter,Weiss. (1952).The Influence of Source Credibility on Communication Effectiveness. Public Opinion Quarterly, 15(winter),635-650. Kahle, L. R., & Homer, M. (1985). Physical Attractiveness of Celebrity Endorser.A Social Adaptation Perspective.Journal of Consumer Research,2(March),954-961. Randle, P. (2005). Celebrity Branding Licensing.Licensing Europe; pp 46-47 McCracken, G. (1986). Culture and Consumption: A Theoretical Account of the Structure and Movement of the Cultural Meaning of Consumer Goods. Journal of Consumer Research, 13(1), 71-84 Mistry, B. (2006).Star Spotting. Marketing, 7(June), 33-34 Mehta,Ablihasha. (1994). How Advertising Response Modeling (ARM) Can Increase Ad Effectiveness.Journal of Advertising Research, 34(3),62-74. McGuire, William, J. (1985). Attitudes and Attitude Change.In: Handbook of Social Psychology, (Eds.) Gardner Lindzey and Elliot Aronson, NY: Random House, 2, 233-346. New Age Media (2008).How can advertising succeed if it does not have a clear goal?.retreived from http://www.nma.co.uk Ross, P. (2006). Hit or Misleading. Marketing Management,15(5), 44-48 Rennae,Daneshvary., R. Keith, Schwer. (2000). The association endorsement and consumers intention to purchase. Journal of Consumer Marketing,17 (3),203 213. Shimp, T. (1997).Advertising, Promotion and Supplemental Aspects of Integrated Marketing Communication,(4th ed.), Fort Worth, Texas: The Dryden Press. Till, B.D., &Busler, M. (1998). Matching products with endorsers: attractiveness versus expertise. Journal of Consumer Marketing,15 (6),576-586. May - August 2013 Vol. 9 Issue 1 19

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