LOVELY PROFESSIONAL UNIVERSITY DEPARTMENT OF MANAGEMENT A STUDY ON THE IMPACT OF CELEBRITY ENDORSEMENT ON BUYING BEHAVIOR OF CONSUMERS A ND AS A SOURCE OF BRAND-BUILDING

Submitted to Lovely Professional University In partial fulfillment of the requir ements for the award of degree of MASTER OF BUSINESS ADMINISTRATION Submitted by: Sandeep Sharma Registration No.2020070484 Supervisor: Miss Yogita Sahni Designation: Lecturer (LSB) DEPARTMENT OF MANAGEMENT LOVELY PROFESSIONAL UNIVERSITY PHAGWARA (2009)

LOVELY PROFESSIONAL UNIVERSITY DEPARTMENT OF MANAGEMENT TO WHOMSOEVER IT MAY CONCERN This is to certify that the project report titled A study on the impact of celebrity endorsement on buying behavior of people and as a source of brand-building carried out by Mr. Sandeep Sharma, S/o Sh. Suresh Sh arma has been accomplishned under my guidance & supervision as a duly registered MBA student of the Lovely Professional University, Phagwara. This project is be ing submitted by him in the partial fulfillment of the requirements for the awar d of the Master of Business Administration from Lovely Professional University. His dissertation represents his original work and is worthy of consideration for the award of the degree of Master of Business Administration. _________________ __________________ (Name & Signature of the Faculty Advisor) Title: ____________ __________________ Dare: ______________________________ Date:

LOVELY PROFESSIONAL UNIVERSITY DEPARTMENT OF MANAGEMENT DECLARATION I, Sandeep Sharma, hereby declare that the work presented herein is ge nuine work done originally by me and has not been published or submitted elsewhe re for the requirement of a degree programme. Any literature, data or works done by others and cited within this dissertation has been given due acknowledgement and listed in the reference section. _______________________ (Student's name & Signature) _______________________ (Re gistration No.) 2020070484 Date:__________________

ACKNOWLEDGEMENT It has been a great pleasure for me to work on this project. My sincere thanks t o Lect. Miss Yogita Sahni for giving me an opportunity to work on this project w hereby I was given an exposure to study the impact of celebrity endorsement as a source of brandbuilding and on consumers buying behavior in automobile Industry which helped me to increase the span of our knowledge and developed my thinking on more practical lines. I thank her for her guidance and support throughout th e time when I was working on this project. I am also thankful to Mr. Varun Naiye r and Mr. Mandeep Singh Saini under whose valuable guidance I learnt a lot and w hich will help me out in the coming days. I express my sincere thanks to my parents, friends who encouraged me throughout this project and always with me.

Executive Summary India is a country where people love to live in dreams. They worship celebrities . Celebrities may be Cricket stars like Sachin Tendulkar, Mahinder Singh Dhoni o r Film Stars like Salman Khan, John Ebrahim. They treat them as God. Marketers u se this very preposition so as to influence their target customers may be existi ng or potential ones. For this they rope in these celebrities and give them whop ping amount of money. They believe that by doing this they can associate their p roducts with their target customers. This is called celebrity endorsement. But d o this celebrity endorsement acts as a source of brand-building and have impact over the purchasing behavior of customers in case of automobiles? For this I dec ided to conduct this vary research and objectives of my research are: To identif y the influence of celebrity endorsement on consumer buying behavior. To study c elebrity endorsement as a source of brand-building. To find which type of celebr ity persona is more effective. Lot of researchers has done extensive research wo rk regarding celebrity endorsement, its influence over customers purchasing deci sions. After studying the whole literature related to celebrity endorsement I fo und a gap in the study. This gap was whether celebrity endorsement acts as a sou rce of brand-building. So I decided to undertake research on this particular asp ect. This research is limited to Jalandhar City only due to various constraints like time available, scarcity of resources etc. From this we can make an attempt to generalize the result to the whole universe. After conducting research it wa s found that brand name and celebrity endorser are the two key factors that play an important role in affecting purchase intention. Majority of the people want to see their favorite celebrity endorsing their brands.

During our research an important factor revealed that mostly people want to see male celebrities endorsing automobile vehicles rather than female. This fact is also supported by advertisement of glamour motorbike which have baseline Definit ely male. This particular advertisement created hot spaces at Cannas festival. T here are large no. of mediums of persuasion but celebrity endorsement is an effe ctive mode of persuasion. People love to see sports stars endorsing automobile vehicles than that of bolly wood stars. This particular aspect is mainly supported by the fact that in India where Cricket is religion and with the success of IPL-1 cricketers like Gautam Gambhir,Ishant Sharma are able to displace big film stars like Hrithik Roshan fo r advertisements of Coca-Cola. Another important fact which came into existence was majority of people follow their favorite celebrity while making a new purcha se everytime. Beside this one major factor come into existence that mostly respo ndents were able to recognized the celebrity used in various advertisement. So i n this brand recall test, mostly positive results were found. One open-ended que stion was also included about suggestion. From that it was concluded that mostly people want that instead of spending huge amount of money onto celebrities comp any should come out with some schemes so as to lure their customers. So it can b e concluded that for a small extent Celebrity endorsement acts as a source of br and-building but company should follow integrative approach so as to build stron g brands.Beside celebrity endorsement they should run certain schemes so as to p rovide value to the customer and to build strong brand.

Chapter-1

1.1.1Introduction to the subject: There are large no. of brands available in the market. Some are very familiar and rest are somewhat. What are the things that distinguish those from rest? It may be brand name, advertisement, royal heritage and may be celebrity endorser who endorse them. e.g. Raid and Taylor has the ri ch heritage of ropping in various cascades of James Bond 007 as their brand endo rser and it has helped them strongly to build there brand. Businesses have long sought to distract and attract the attention of potential customers that live in a world of ever-increasing commercial bombardment. Everyday consumers are expos ed to thousands of voices and images in magazines, newspapers, and on billboards , websites, radio and television. Every brand attempts to steal at least a fract ion of an unsuspecting person's time to inform him or her of the amazing and dif ferent attributes of the product at hand. Because of the constant media saturati on that most people experience daily, they eventually become numb to the standar d marketing techniques. The challenge of the marketer is to find a hook that wil l hold the subject's attention. Also from a marketing communications (marcoms) p erspective, it is vital that firms design strategies that help to underpin compe titive differential advantage for the firm's product or services. Accordingly, m arcom activities back-up other elements in the marketing mix such as designing, branding, packaging, pricing, and place The term Celebrity refers to an individu al who is known to the public (actor, sports figure, entertainer, etc.) for his or her achievements in areas other than that of the product class endorsed (Frie dman and Friedman, 1979). This is true for classic forms of celebrities, like ac tors (e.g., Amitabh Bachchan, Shahrukh Khan, Rani Mukherjee Aamir Khan and Pierc e Brosnan), models (e.g., Mallaika Arora, Lisa Ray, Aishwarya Rai, Naomi Campbel l, Gisele Buendchen, etc), sports figures (e.g., Sachin Tendulkar, Zaheer Khan, Sourav Ganguly, Anna Kournikova, Michael Schumacher, Steve Waugh, etc), entertai ners (e.g., Cyrus Broacha, Oprah Winfrey, Conan O'Brien), and pop-stars (e.g., M adonna, David Bowie) - but also for less obvious groups like businessmen (e.g., Donald Trump, Bill Gates) or politicians.

Celebrities appear in public in different ways. First, they appear in public whe n fulfilling their profession, e.g., Vishwanathan Anand, who plays chess in fron t of an audience. Furthermore, celebrities appear in public by attending special celebrity events, e.g., award ceremonies, inaugurations or world premieres of m ovies. In addition, they are present in news, fashion magazines, and tabloids, w hich provide second source information on events and the 'private life' of celeb rities through mass-media channels (e.g., Smriti Irani being regularly featured in various publications). Last but not least, celebrities act as spokes-people i n advertising to promote products and services, which is referred to celebrity e ndorsement. 'Celebrity Endorsement' McCracken's (1989) definition of a celebrity endorser is, "any individual who enjoys public recognition and who uses this re cognition on behalf of a consumer good by appearing with it in an advertisement (marcoms), is useful, because when celebrities are depicted in marcoms, they bri ng their own culturally related meanings, thereto, irrespective of the required promotional role." Friedman and Friedman (1979) found empirical evidence that, i n the promotion of products high in psychological and/or social risk, use of cel ebrity endorser would lead to greater believability, a more favorable evaluation of the product and advertisement, and a significantly more positive purchase in tention. Thus, companies use celebrities to endorse their products, however, the re are deeper attributes that are involved in celebrity endorsement. Celebrities might endorse as a brand ambassador or a brand face. Some time people have this habit of relating this vary term of celebrity endorsement with brand face. But this is not so. Difference Between Brand Ambassador & Brand Face A Brand Ambassa dor would be one who is not only a spokesperson for the brand or is just appeari ng as a testimonial for the brand's benefits. He/she is an integral part of the

brand persona and helps to build an emotionale, which goes beyond just appearing on TV commercials He takes up the cause of a Brand Champion and is associated w ith every aspect related with the brand. What is more, there is a significant di fference between making just an endorsement for say, a shampoo or an automobile, and being that brand's alter ego. Both parties take the latter far more serious ly to the deal. So a brand ambassador would be involved in press releases, he/sh e would be actively participating in any sales promotion, sporting the Brand all the while. For example, Fardeen Khan is the brand ambassador for Provogue while he remains a brand face for Lux Body Wash. On the other hand, a Brand Face woul d be the current celebrity who is just used as a tool to increase brand recall a nd is only appearing in the advertisement. It is usually seen that a brand face is a temporary contract and is very short term at times. An example would be Son a Chandi Chawanpryash using Sourav Ganguly for a while in its commercials. Brand faces are easily forgotten and fades away with the campaign's end. The motive behind total branding may be decocted as an attempt to amalgamate div erse activities to win customer preference. Apropos to this context, the topic Im pact of celebrity endorsement on overall brand, is a significant one. The crescen do of celebrities endorsing brands has been steadily increasing over the past ye ars. Marketers overtly acknowledge the power of celebrities in influencing consu mer-purchasing decisions. It is a ubiquitously accepted fact that celebrity endo rsement can bestow special attributes upon a product that it may have lacked oth erwise. But everything is not hunkydory; celebrities are after all mere mortals made of flesh and blood like us. If a celebrity can aggrandize the merits of a b rand, he or she can also exacerbate the image of a brand. If I may take the libe rty of rephrasing Aristotles quote on anger, Any brand can get a celebrity. That i s easy. But getting a celebrity consistent with the right brand, to the right de gree, at the right time, for the right purpose and in the right way... that is n ot easy. Celebrity endorsements are impelled by virtue of the following motives: Instant Brand Awareness and Recall.

Celebrity values define, and refresh the brand image. Celebrities add new dimens ions to the brand image. Instant credibility or aspiration PR coverage. Lack of ideas. Convincing clients. Scope of Celebriity Endorsement: The use of testimonials by advertisers dates back to the 19th century when medic ines were patented. Firms have been juxtaposing their brands and themselves with celebrity endorsers (e.g., athletes, actors) in the hope that celebrities may b oost effectiveness of their marketing.The increasing number of endorsements thro ws a valid question to the consumers. Is there a science behind the choice of th ese endorsers or is it just by the popularity measurement? What are the reasons which lead to impact of celebrity endorsement on brands? The success of a brand through celebrity endorsement is a cumulative of the following 14 attributes. Gr eater the score of the below parameters, greater are the chances of getting clos e to the desired impact.

Impact Regions of Celebrity Endorsement While brand marketers with positive experiences would tend to believe that celeb rity endorsements work and some would disagree, but one would be sure that the m agnitude of its impact is difficult to measure even if sales figures are at our disposal. However, we can understand why it works and the impact regions of cele brity endorsement. The illustrations below explain the same: -

How Celebrity Endorsements Influence the Consumer The basis for the effectivenes s of celebrity-endorsed advertising can be linked to Kelman's processes of socia l influence as discussed by Friedman and Friedman. According to Kelman, there ar e three processes of social influence, which result in an individual adopting th e attitude advocated by the communicator: Compliance, Identification & Internali zation These latter two processes are particularly applicable to celebrity-endor sed advertising. Compliance infers that another individual or group of individua ls influences an individual cause he or she hopes to achieve a favourable reacti on from this other group. This process of social influence is not directly appli cable to celebrity advertising because there is little, if any, interaction betw een the celebrity and the consumer. Identification applies to the situation wher ein the individuals emulate the attitudes or behaviour of another person or grou p, simply because they aspire to be like that person or group. This process is t he basis for referent power. It was found that celebrities are more commonly lik ed than a typical consumer spokesperson. Internalization as a process of social influence is said to occur when individuals adopt the attitude or behaviour of a nother person because that behaviour is viewed as honest and sincere and is cong ruent with their value system. The effectiveness of celebrity

advertising traditionally has not been strongly linked to this process, as a cel ebrity's reason for promoting a product can just as easily be attributed by the consumer to an external motive (i.e., payment of fee) as to an internal motive ( i.e., the celebrity's true belief in the value and benefit of the product). An i mportant issue of concern relates to the development of a strategy for use in Ce lebrity Advertising, which benefits from the dramatic impact of dual support of both the identification and internalization processes of social influence. Celeb rities are well-liked, but the techniques that can be used to enhance their cred ibility as spokespeople, and therefore, tie-in more closely with the internaliza tion process needs to be looked into. Effectiveness of Celebrity Endorsers A stu dy conducted by Charles Atkin and Martin Block focussed on alcohol advertising a nd young audience to examine the impact of celebrity advertising in terms of soc ial effects of advertising. The sponsoring Company is the underlying source of a ny advertising message, but the individual models depicted in the advertising se rve as the more visible communicator in many cases. The most thoroughly studied source quality is credibility. Research conducted by social psychologists over t he past 30 years demonstrates that a source perceived as highly credible is more persuasive than a low credibility sender (Hovland and Weiss, 1951; McGuire, 196 9; Hass, 1981). The sources that companies use to present their advertising mess age typically attempts to project a credible image in terms of competence, trust worthiness or dynamism. Celebrity endorsers are considered to be highly dynamic, with attractive and engaging personal qualities. Audience may also trust the ad vice given by some famous person, and in certain cases, celebrities may even be perceived as competent to discuss the product. Friedman, Termini and Washington cite a 1975 study showing that celebrities are featured in 155 of prime-time TV commercials. A later survey reported that this proportion was up to 20% (Adverti sing Age, 1978). The most widely used celebrities are

sports figures, actors or other types of entertainers. There are several reasons why a famous endorser may be influential: They attract attention to the adverti sement in the cluttered stream of messages They are perceived as being more ente rtaining They are seen as trustworthy because of apparent lack of self-interest. The final element is due to the wide-spread attribution that major stars do not really work for the endorsement fee, but are motivated by genuine affection for the product (Kamen et al, 1975). Despite the use of famous endorsers, there is little published evidence regarding effectiveness. In one experiment, an adverti sement for a fictitious brand of Sangria wine featured an endorsement attributed to either a celebrity (actor - Al Pacino), a professional expert, the Company P resident, a typical consumer and no source (Friedman, Termini and Washington, 19 77). College students read the ad and gave the ad 0-10 scales of believability, probable taste, and intent to purchase. Across these three measures, the celebri ty condition produced the highest scores. While the 'no-source' control group ha d a purchase intention rating of 2.7, the subjects exposed to the actor scored 3 .9. Believability was rated 2.8 by control subjects versus 4.1 by those seeing t he celebrity endorsement. For taste, the baselines of 4.0 compares to the celebr ity group score of 5.6. None of the other three endorsers were as influential as the celebrated person Brand Image Formation & Brand Preference Having a congrue nt image between the brand and celebrity does not guarantee any positive effect on consumers' brand preferences. The fundamental question is - what a brand imag e really does to consumers? Baran and Blasko explained, "Since most products are n't special, most advertising does all that so-called image stuff... There's no information about the product, there's only information about the kind of people who

might be inclined to use the product." (p.13). This view is echoed by Feldwick ( 1991) who has suggested that the subjective experience of using a brand can be d ifferent from the subjective experience of using an identical product without th e brand reassurance. In the case of using celebrity advertising to build brand i mage, the effects are examined with a social psychological framework. Before we can scrutinize the effects of celebrity endorsement on the overall brand, we hav e to ferret the implicit nuances that act as sources of strong brand images or v alues: Experience of Use: This encapsulates familiarity and proven reliability. User Associations: Brands acquire images from the type of people who are seen us ing them. Images of prestige or success are imbibed when brands are associated w ith glamorous personalities. Belief in Efficiency: Ranking from consumer associa tions, newspaper editorials, etc. Brand Appearance: Design of brand offers clues to quality and affects preferences. Manufacturers Name & Reputation: A prominent brand name (Sony, Kelloggs, Bajaj, Tata) transfers positive associations. The ce lebritys role is the most explicit and profound in incarnating user associations among the above mentioned points. To comprehend this, let us analyze the multipl ier effect formula for a successful brand: S=P* D*AV -- the multiplier effect Wh ere S is a Successful Brand P is an Effective Product D is Distinctive Identity AV is Added Values

The realm of the celebritys impact is confined to bestow a distinctive identity a nd provide AV to the brand; the celebrity does not have the power to improve or debilitate the efficiency and features of the core product. Thus, we are gradual ly approaching an evident proposition claiming, "The health of a brand can defin itely be improved up to some extent by celebrity endorsement. But one has to rem ember that endorsing a celebrity is a means to an end and not an end in itself." An appropriately used celebrity can prove to be a massively powerful tool that magnifies the effects of a campaign. But the aura of cautiousness should always be there. The fact to be emphasised is that celebrities alone do not guarantee s uccess, as consumers nowadays understand advertising, know what advertising is, and how it works. People realize that celebrities are being paid a lot of money for endorsements and this knowledge leads them to cynicism about celebrity endor sements. Automobile marketing in India: The competitive nature of the automobile industry has prompted the companies to take up new and innovative marketing strategies to thwart the competition. The B segment of cars is the segment which sees maximum competition as the consumer h as a number of models to choose from and it's the volumes which drive the margin s. All the companies as a part of their marketing strategy offers a range of veh icles in all the segment to make sure that the customer is driving one of their vehicles only. Advertisements on the Audio visual medium are a rage as it gives the car makers an opportunity to flaunt their cars. Flashy cars can be demonstra ted on television but when it comes to the finer prints of the cars, print and o nline media comes to the rescue. The online medium offers a greater flexibility to the car companies since they come with a lot of interactive features like dem onstrating the interiors of the car with its salient features. The print medium on the other hand provides an opportunity to the car makers to explain the funct ion of a car in detail. Celebrity endorsements and testimonial advertisements ha ve come a long way and they are also doing their bit to sell the cars. Super sta r Shahrukh Khan has been associated

with Hyundai Motor Company for a long time and he comes regularly on television to promote the Santro car. Similarly Ford has roped in Junior Bachan for the pro motion of the latest offering from the company Ford Fiesta. On a similar note Sa if Ali Khan and Rani Mukherjee is shown chasing each other with a Chevrolet aveo . Aamir Khan who is considered to be one of the most talented actors in the indu stry is frequently seen changing roles on screen to promote the Toyota Innova, a car which is generations ahead of its predecessor Toyota Qualis. Cricketers hav en't been left behind in the race of promoting cars; Fiat Palio had received a g reat thrust when the promotion of the car was taken up by the batting maestro Sa chin Tendulkar.In addition to the publicity and advertisement which is done by t he companies there are certain innovative strategies which are taken up by the c ompanies to beat the competition from time to time. 1.1.2Evolution of subject: T he celebrities get huge amount of money to endorse the product which actually cr eats recall-value for the product like Coca Cola Aamir Khan Tag Heuer Shahrukh K han Cadbury chocolate Amitabh Bachan The adding up of any celebrity with any bra nd may not always increase the sales volume but if somehow the image of the prod uct damaged, celebrity endorsing helps in recovering the image. Like when Cadbur y Indias reputation as a safe chocolate was almost gone due to the worm controver sy, they used Amitabh Bachan in a commercial assuring the audience about the qua lity of the Cadbury. Similarly when Pepsi & Coke was infected by the Pesticides controversy, Pepsi used both SRK & Sachin Tendulkar for damage control & coke us ed Aamir Khan for image recovery. Not all products go with the image of all cele brity. It depends on the matching of attributes between the product & the celebr ity. In the age of Sunil Gavaskar & Kapil Dev, Gavaskars attributes matched with the products which were being used by the

higher society people & Kapil devs attributes matched with products that were for common man. This means Gavaskar was much trustworthy for the advertisement of p en & cans and Kapil Dev had gone for shaving cream & bicycles. Kapils advertiseme nt of Palmolive Ka Jawab nahi in a slightly hariyanvi style is still a legend am ong the Indian advertisements. Sachin Tendulkar is the first celebrity in India whose mass appeal is so high that he can endorse product for any section of the society. The filmstars before year 2000 has limited endorsement and didnt explore the advertising market of India but post 2000 the scenario has changed.Amitabh Bachan after KBC got huge popularity among the masses & his popularity is being used by various products from Reid & Taylor to Parker. But during his hay day as a superstar in the 80s, he never endorsed anything. Another success story is SRK who is currently endorsing more than 35 products & earned more money from endor sement than his last 2 super hit films Chak DE INDIA & OSO. The cricketers are a lso not in the backyard. After wining the T-20 World Cup Indian cricket players also got few numbers of endorsements Dhoni, Yuvraj & Zaheer Khan grabbed few end orsements but in terms of numbers they are much less than the actors. With the c hange in strategy of PepsiCo India to promote their Youngistaan campaign they didnt renew their contract with players like Sachin and Sourav. Instead they have tak en rising actors like Ranbir Kapoor and Deepika Padukone to promote their produc t. This incident also indicates that the cricketers are loosing their endorsed p roducts to the filmstars. One exception is Sania mirza, in spite of all controve rsies, off-form and injuries she is able to survive in the advertisement world. Apart from Big B, SRK and Aamir Khan some other stars also make their own mark i n the endorsement market like Hrithik Roshan, Saif Ali Khan, Kareena Kapoor, Pri yanka Chopra and Katrina Kaif. The problem in the endorsement market is that her e glamour plays a big role. That is why Abhinav Bindra, the only Indian to win a Gold Medal in the Olympics gets only Samsung as the only product to endorse whe reas filmstars gets offers from various companies to endorse their products. Bra nd V/s Celebrity Sometimes the celebrity is more highlighted than the products, making no recall value of the product. When Rahul Dravid advertised for Castrol, the brand gets overshadowed by

the celebrity & that is also a wrong choice of celebrity. Dravid is never famous for racing & when he promotes the product, if gives a wrong signal to the custo mers. The product can use Narain Karthikeyan to endorse it which will give some reliability to the product. Some success story Cadbury India used Amitah Bachan not only to recover their image from worm controversy but also to establish itse lf as the leading company in the Indian chocolate market. Aamir Khans ad campaign Thanda Matlab Cocacola was also a huge hit. Not only that the company uses the su perstars to come out from the pesticides controversy. Dabur brings in Amitabh Ba chan in the stagnant chawanprash market which brings in boost in market and help s Dabur to remain the market leader. The Lux Story The Lux Soap in its 75 yrs jo urney as a product always used a Film Celebrity to promote the product with the most catchy lines Lux meri Khubsurti Ka raaj. They used a huge number of celebriti es from the beginning to promote their product & in their 75 years celebration a dvertisement campaign; they used SRK as the main endorser who has said the famou s Lux mera Khubsurti ka raaj along with Hema Malini, Sridevi & Kareena Kapoor. Tha t is the first time a male celebrity endorsed a female product in India. Some Co ntroversies When SRK promoted Emamis Fair & Handsome cream. It was highly critici zed as saying that if a star with SRKs stature promote whiteness cream then actua lly we are advocating for racism saying black is bad & white is gold. And how SR K could can endorse such products as there will be a huge impact among the masse s regarding the skin colors. A person must be judged by his/her qualities & not by his/her skin color. But what we basically forgot that stars get money to endo rse products & we shouldnt eye washed by the advertisement & there is no point in criticizing a celebrity for endorsing product like Fair & Handsome. Shilpa Shet ty & Romanov Vodka.

Shilpa Shetty also hardly criticized for promoting alcohol. As being a celebrity she must be a responsible citizen & a responsible citizen should never promote alcohol. Celebrity branding is all right as long as the celebrity conducts himse lf in a good manner but if something wrong happens it will affect the image of t he product also. When Salman Khan got warrant for killing endangered dear Thumbs Up has no option but to replace him. So the product and the celebrity remain good as long as both of them remain individually good. The main problem of celebrity branding is that when a particular product is known to the common people with t he effect of the celebrity, it is very difficult to separate the product from th e star. Like Coca-Cola - Aamir Khan, Cadbury- Amitabh Bachan, Santro-SRK. Now, i f any one of the company want to change their endorser they have to redesign the product to let out their product from the shadow of the old campaign. In case o f celebrity marketing another problem also arise, that no separate brand value g rows up for the product unless and until the product is extraordinary. The produ ct is known in the name of the celebrity. Sometimes if the attributes of the cel ebrity doesnt matches with the product, it also gives a negative attribute to the product endorsed. Like in a Survey study it is found that people locates Amitab h Bachan with Asian Paints the most but in reality Amitabh endorsed Nerolac pain ts and Nerolacs biggest competitor is Asian paints. So there are certain positive as well as negative points in celebrity branding in India. As a producer of the product the company always wants to minimize the negative sides of the celebrit y endorsement and maximize the positive impact of the celebrity endorsement. Thi s clearly raises a question what impact celebrity endorsement have on people in case of automobiles and whether it acts as a source of brand-building? 1.2.1 Objectives of study: To identify the influence of celebri The objectives of the study are as follows: ty endorsement on consumer buying behavior. To study celebrity endorsement as a source of brand-building. To find which type of celebrity persona is more effect ive.

1.2.2 Need of the study: After going through various sources like magazines, newspapers, websites I found that lot of research work has undertaken by researcher regarding impact of cele brity endorsement. But there was a gap in the research regarding whether celebri ty endorsement act as a source of brand-building. So there is a need to discover this fact. So I decided to work on this particular aspect. 1.2.3 Scope of the study: As due to time constraint it is very difficult to cover the entire sectors so I decided to cover automobile sector. I am covering automobile sector as whole and not concentrating on any particular category. The study is limited to Jalandhar City only. 1.2.4 Research Methodology: Research Design: A research design is an arrangement of conditions for collectio n and analysis of Data in a manner that aims to combine relevance to the researc h purpose with Economy in procedure. It constitutes the blueprint for collection , measurement and analysis of data. My research design will be exploratory resea rch design. Data Sources: In dealing with any real life problem it is often foun d that data at hand are inadequate, and hence, it becomes necessary to collect d ata that are appropriate. The researcher can collect data either through primary source or secondary source. a) Primary data: These are those data which are col lected afresh and for the first time, and thus happen to be original in characte r. I will be using the structured questioners. b) Secondary data: These are thos e which have already been collected by someone else and which have already been passed through the statistical process. I will collect it from the sources like internet, published data etc.

Population of the study Youth (Male) of Jalandhar will be included in population . Sampling Size: It is the total number of respondents targeted for collecting t he data for the research. Sample size of 100 persons will be taken for this rese arch. Sampling Technique: Random sampling technique will be used in this researc h project. Sampling Frame: Frame is the list of respondents. DATA PROCESSING Dai ly data will be entered into MS-Excel sheets. After the exhaustion of the specif ied geographical area this data will be analyzed using simple graphical and tabu lation techniques. The data sheets mentioned here will be attached in the annexu re of the report. Analytical Tools After collection of data another work necessa ry for any data collector is to correctly analysis that data. So statistical tol ls helps us to correctly analysis the data .As I will using here the software na med SPSS for analysis of the data XLSTAT. I will use following statistical tools : Hypothesis Testing Chi-square test will be used when the set of observed frequ encies obtained after experimentation have to be supported by hypothesis or theo ry. The test is known as X2test of goodness of fit and is used to test if the de viation between observation

(experiment) and theory may be attributed to chance (fluctuations of sampling).2 also enables us to explain whether or not two attributes are associated or relat ed to each other. To test the goodness of fit : It helps to test goodness of fit by using null and alternate hypothesis. STATISTICAL TOOLS TO BE USED 1. Chi Squa re Test Procedure: (1) Set up the null hypothesis that there is no significant d ifference between the observed and expected value. (2) We compute the value of C HI- square by using the formula CHI-square = 2= (( Oi- Ei)2/Ei) O- Observed value E- Expected value Degree of freedoms=(R-1)(C-1) Level of significance=5

Chapter-2

2.1 History of Automobile Industry: The automobile as we know it was not invented in a single day by a single invent or. The history of the automobile reflects an evolution that took place worldwid e. It is estimated that over 100,000 patents created the modern automobile. Howe ver, we can point to the many firsts that occurred along the way. Starting with the first theoretical plans for a motor vehicle that had been drawn up by both L eonardo da Vinci and Isaac Newton. In 1769, the very first self-propelled road v ehicle was a military tractor invented by French engineer and mechanic, Nicolas Joseph Cugnot (1725 - 1804). Cugnot used a steam engine to power his vehicle, bu ilt under his instructions at the Paris Arsenal by mechanic Brezin. It was used by the French Army to haul artillery at a whopping speed of 2 1/2 mph on only th ree wheels. The vehicle had to stop every ten to fifteen minutes to build up ste am power. The steam engine and boiler were separate from the rest of the vehicle and placed in the front (see engraving above). The following year (1770), Cugno t built a steam-powered tricycle that carried four passengers. In 1771, Cugnot d rove one of his road vehicles into a stone wall, making Cugnot the first person to get into a motor vehicle accident. This was the beginning of bad luck for the inventor. After one of Cugnot's patrons died and the other was exiled, the mone y for Cugnot's road vehicle experiments ended. Steam engines powered cars by bur ning fuel that heated water in a boiler, creating steam that expanded and pushed pistons that turned the crankshaft, which then turned the wheels. During the ea rly history of self-propelled vehicles - both road and railroad vehicles were be ing developed with steam engines. (Cugnot also designed two steam locomotives wi th engines that never worked well.) Steam engines added so much weight to a vehi cle that they proved a poor design for road vehicles; however, steam engines wer e very successfully used in locomotives. Historians, who accept that early steam powered road vehicles were automobiles, feel that Nicolas Cugnot was the invento r of the first automobile.

The automotive industry has certain trends it has to follow, just like fashion d esigners and musical composers. In times of recession and decreasing sales there is less room to take chances and manufacturers are prone to follow the common p attern as a safer bet rather than releasing a controversial product or idea that might or might not be successful. However throughout the automotive industry's history, great innovators have "boldly gone where no man has gone before" to set new trends which have dynamically altered the industry as a whole. 1880's & ear ly 1900's About hundred years ago -The first motor car was imported -Import duty on vehicl es was introduced. -Indian Great Royal Road (Predecessor of the Grand Trunk Road ) was conceived.

First car in 1840. motor car to import

brought in India by a princely ruler in 1898. Simpson & Co established -They were the first to build a steam car and a steam bus, to attempt manufacture, to build and operate petrol driven passenger service and American Chassis in India.

Railways first came to India in 1850's In 1865 Col. Rookes Crompton introduced p ublic transport wagons strapped to and pulled by imported steam road rollers cal led streamers. The maximum speed of these buses was 33 kms/hr.

From 1888 Motors Spirit attracted a substantial import duty. In 1919 at the end of the war, a large number of military vehicles came on the roads. In 1928 assem bly of CKD Trucks and Cars was started by the wholly owned Indian subsidiary of American General Motors in Bombay and in 1930-31 by Canadian Ford Motors in Madr as, Bombay and Calcutta In 1935 the proposals of Sir M Visvesvaraya to set up an Automobile Industry were disallowed.

1942 Hindustan Motors Ltd incorporated and their first vehicle was made in 1950.

In 1944 Premier Automobiles Ltd incorporated and in 1947 their first vehicle was produced. In 1947 the Government of Bombay accepted a scheme of Bajaj Auto to r eplace the cycle rickshaw by the auto and assembly started in a couple of years under a license from Piaggio. Manufacturing Programme for the auto and scooter w as submitted in 1953 to the Tariff Commission and approved by the Government in 1959.

In 1953 the Government decreed that only firms having a manufacturing programme should be allowed to operate and mere assemblers of imported CKD units be asked to terminate operations in three years.

Only seven firms namely Hindustan Motors Limited, Automobile Products of India L imited, Ashok Leyland Limited, Standard Motors Products of India Limited., Premi er Automobiles Limited, Mahindra & Mahindra and TELCO received approval. M&M was manufacturing jeeps. Few more companies came up later.

Government continued with its protectionism policies towards the industry. In 19 56, Bajaj Tempo Ltd entered the Indian market with a programme of manufacturing Commercial Vehicles, and Simpson for making engines. 1960's In sixties 2 and 3 Wheeler segment established a foothold in the industry. Escor ts and Ideal Jawa entered the field in the beginning of sixties. Association of Indian Automobile Manufacturers formally established in 1960. Standard Motors Pr oducts of India Ltd. moved over to the manufacture of Light Commercial Vehicles in 1965. 1970's Major factors affecting the industry's structure were the implementation of MRTP Act, FERA and Oil Shocks of 1973 and 1979.

During this decade there was not much change in the four wheeler industry except the entry of Sipani Automobiles in the small car market. Oil Shock of 1973 quic kened the process of dieselization of the Commercial Vehicle segment. Three othe r companies, namely, Kirloskar Ghatge Patil Auto Ltd, Indian Automotive Ltd and Sen & Pandit Engg products Ltd entered the market during 1971-75. They ultimatel y withdrew in early eighties.

During the seventies the economy was in bad shape. This and many specific proble ms affected the Automobile Industry adversely. 1980's - The period of liberalized policy and intense competition First phase of liberalisation announced. Unfair practices of monopoly, oligopoly etc slowly disappeared. Liberalisation of the protectionism policies of the Gov ernment. Lots of new Foreign Collaborations came up in the eighties. Many compan ies went in for Japanese collaborations. Hindustan Motors Ltd. in collaboration with Isuzu of Japan introduced the Isuzu truck in early eighties. ALL entered in to collaboration with Leyland Vehicles Ltd. for development of integral buses an d with Hino Motors of Japan for the manufacture of W Series of Engines.

TELCO after the expiry of its contract with Daimler Benz, indigenously improved the same Benz model and introduced it in the market. Government approved four ne w firms in the LCV market, namely, DCM, Eicher, Swaraj and Allwyn. They had coll aborations with Japanese companies namely, Toyota, Mitsubishi, Mazda and Nissan respectively.

In 1983 Maruti Udyog Ltd was started in collaboration with Suzuki, a Japanese fi rm.

Other three Car manufacturers namely, Hindustan Motors Ltd., Premier Automobiles Ltd., Standard Motor Production of India Ltd. also introduced new models in the market.

At the time there were five Passenger Car manufacturers in India - Maruti Udyog Ltd., Hindustan Motors Ltd., Premier Automobiles Ltd., Standard Motor Production of India Ltd. and Sipani Automobiles.

Ashok Leyland Ltd. and TELCO were strong players in the Commercial Vehicles sect or. In 1983-84 Bajaj Tempo Ltd. entered into a collaboration with Daimler-Benz o f Germany for manufacture of LCVs. Important policy changes like relaxation in M RTP and FERA, delicensing of some ancillary products, broad banding of the produ cts, modifications in licensing policy, concessions to private sector (both Indi an and Foreign) and foreign collaboration policy etc. resulted in higher growth / better performance of the industry than in the earlier decades.

1990's Mass Emission Norms were introduced for in 1991 for Petrol Vehicles and in 1992 for Diesel Vehicles.

In 1991 new Industrial Policy was announced. It was the death of the License Raj and the Automobile Industry was allowed to expand.

Further tightening of Emission norms was done in 1996. In 1997 National Highway Policy has been announced which will have a positive impact on the Automobile In dustry. The Indian Automobile market in general and Passenger Cars in particular have witnessed liberalisation. Many multinationals like Daewoo, Peugeot, Genera l Motors, Mercedes-Benz, Honda, Hyundai, Toyota, Volvo and Fiat entered the mark et.

Various companies are coming up with state-of-art models of vehicles. TELCO has diversified in Passenger Car segment with Indica. Despite the adverse trend in t he growth of the industry, it is resolutely trying to meet the challenges. Various issues of critical importance to the industry are b eing dealt with forcefully. 2.1.1 Growth and Landmarks of automobile industry in India : The automobile industry, one of the core sectors, has undergone metamorphosis wi th the advent of new business and manufacturing practices in the light of libera lization and globalization. The sector seems to be optimistic of posting strong sales in the next couple of years in view of a reasonable surge in demand. The I ndian automobile market is gearing towards having international standards to mee t the needs of the global automobile giants and become a global hub. Players are strategizing to consolidate their position and gradually increase market penetr ation with the launch of new models, targeting different segments. Since the sec tor is price driven, huge investment is envisaged to remain competitive through cost advantage, for which indigenization is highly important. The product become s dearer if it is manufactured using imported parts. IT in the automobile sector plays a crucial role.. Some players are working towards development of efficien t production systems that control the entire production process with high precis ion and accuracy. Such systems working on real time operating systems allow effi cient control of different parts of manufacturing and production. It is essentia l to leverage skills of different engineering disciplines to build these kinds o f integrated systems. Analysts foresee high scope in the electronics for auto se ctor and expect the retailing of such electronics products to contribute a major chunk of future revenues. The government is increasing the research and develop ment (R&D) fund for the automobile industry over and above the Rs 1400 crores ea rmarked for eight years. All laboratories in the country researching on automobi le technology, such as BHEL which is developing cell technology as alternative f uel, have also been brought together through the setting up of a national R & D working group. The group is working out a plan to link all major

laboratories across the country to give a thrust to automotive research. Indian automobile sector being a driver of product and process technologies, and has be come a excellent manufacturing base for global players, because of its high mach ine tool capabilities, extremely capable component industry, most of the raw mat erial locally produced, low cost manufacturing base and highly skilled manpower Not only a large number of world manufacturers have set up production bases in I ndia but also a large number of foreign companies are collaborating with the aut o component suppliers and vendors. Indian Automobile Components Industry has bee n making rapid strides towards achievement of world-class Quality Systems by imb ibing ISO 9000/QS 9000 Quality Systems whereby the Indian Automotive industry ha s become more competitive in the export market due to its technological and qual ity advances, so much so that in quality conscious markets such as Europe and Am erica, it is emerging as a major player, based on its performance. India today e xports: Engine and engine parts, electrical parts, drive transmission & steering pats, suspension & braking parts among others. The sector is striding inroads i nto the rural middle class after its inroads into the urban markets and rural ri ch. It is trying to bring in varying products to suit requirements of different class segments of customers. States like Rajasthan, Uttar Pradesh, Maharashtra, Andhra Pradesh and West Bengal are vying to woo global players with proposals in cluding heavy tax exemptions and to create a more investor friendly regime, each state is proposing to provide all regulatory clearances at express speed. The G overnment should promote Research & Development in automotive industry by streng thening the efforts of industry in this direction by providing suitable fiscal a nd financial incentives. The current policy allows Weighted Tax Deduction under I.T. Act, 1961 for sponsored research and in-house R&D expenditure. This will be improved further for research and development activities of vehicle and compone nt manufacturers from the current level of 125%. In addition, Vehicle manufactur ers will also be considered for a rebate on the applicable excise duty for every 1% of the gross turnover of the company expended

during the year on Research and Development carried either in-house under a dist inct dedicated entity, faculty or division within the company assessed as compet ent and qualified for the purpose or in any other R&D institution in the country . This would include R & D leading to adoption of low emission technologies and energy saving devices. Government will encourage setting up of independent auto design firms by providing them tax breaks, concessional duty on plant/equipment imports and granting automatic approvalAllocations to automotive cess fund creat ed for R&D of automotive industry shall be increased and the scope of activities covered under it enlarged.

2.1.2 Sturcture of Indian automobile sector and some facts: Structure: The Indian automobile industry can be broadly classified into: 2 /3 Wheelers Pa senger Cars Commercial Vehicles (LCV/HCV/MCV) UV (Utility vehicles) Tractors The models in the car market can be fitted to different segments as given below: Category Economy segment (upto Rs 0.25mn) Mid-size segment (Rs 0.25-0.45 mn) Lux ury car segment (Rs 0.45- 1mn) Models Maruti Omni, Maruti 800 etc. Fiat Uno, Hyundai Santro, tata Indica, Marut i Alto etc. Tata Indigo, Honda City, Mitsibushi Lancer, Ford Ikon, Opel

Astra, Hyundai Accent & others & other imported models

Super luxury segment (above Rs 1mn)

Mercedes Benz

The economy segment has a very large foothold over the Indian automobile market as compared to the mid-size and luxury segment. Segment Economy Market Share (%) 90.2 9.8

Mid-size and luxury Source: SIAM/ Auto Car India Increased urbanisation, low pricing policies, improvement in products and techno logy have fuelled demand for 4-wheelers. The markets are clearly segmented betwe en economy models and premium models. The easy availability of finance and incre ased levels of disposable incomes has led to higher demand for premium models. R ural areas have also become an exciting market to cater to. The growth of the ec onomy has also resulted in a shift in consumer preferences in each of the segmen t. Gradual shift can be seen in buyers from mopeds to economy scooters, from eco nomy scooters to premium and from premium to motorcycles.

Figure -Structure of Passenger Vehicle Market (India)

The passenger car segment has seen rapid growth on the back of rise in disposabl e income, increased availability of consumer finance, and reduction in excise an d customs duties. Post-1991, this segment has seen maximum foreign investment. T here is a clear segmentation of passenger cars based on price and size. While th e lower and medium range cars (Maruti, Ford, Cielo) have been moderately success ful, luxury cars such as Mercedes have found the going tough.

The CV segment is directly linked to industrial production and foreign trade and is therefore subject to cyclical fluctuations of the economy. The demand for CV s is related to growth in movement of goods transported and freight rate levels, both of which are linked to level of production.

Demand for utility vehicles and tractors come from rural India. These vehicles h ave witnessed steady demand growth over the past few years due to successive mon soons, better procurement prices, improved irrigation facilities, and availabili ty of finance.

A strong in-house R&D capability allows a manufacturer to develop and introduce products at lower prices, thus saving costs of importing technology. However, In dian companies spend very little on R&D.

Availability of quality components is another factor that determines smooth prod uction without bottlenecks. High rejection rate of auto components has prompted several global majors like Ford, to get their international suppliers 2.1.3 The Landmark of Indian automobile sector: 1928- The first imported car was seen on Indian roads 1942- Hindustan Motors inc orporated 1944- Premier automobiles started 1948- First car manufactured in Indi a 1953- The Government of India decreed that only those firms which have a manuf acturing program should be allowed to operate 1955- Only seven firms, namely, Hi ndustan Motors Limited, Automobile Products of India Limited, Ashok Leyland Limi ted, Standard Motors Products of India Limited. Premier Automobiles Limited, Mah indra & Mahindra and TELCO received approval. 1960 - 1970 - The two, three wheel er industries established a foothold in the Indian scenario. 1970 - 1980 - Not m uch change was witnessed during this period. The major factors affecting the ind ustry were the implementation of the MRTP Act (Monopolies and Restrictive Trade Practices Act), FERA (Foreign Exchange Regulation Act) and the Oil Shock of 1973 and 1979. 1980 - 1990 - The first phase of liberalization was announced by the Govt. -With the liberalization of the Government's protectionist policies, the a dvantages hitherto enjoyed by the Indian car manufacturers like monopoly, oligop oly, slowly began to disappear.

1991 - Under the Govt.'s new National Industrial Policy, the license raj was dis pensed with, and the automobile industries were allowed to expand freely. 1993 With the winds of liberalization sweeping the Indian car market, many multinati onals like Daewoo, Peugeot, general Motors, Mercedes-Benz and Fiat came into the Indian car market. 1997 - The National Highway Policy was announced which will hopefully have a positive impact on the automobile industry. The Government also laid down the emission standards to be met by car manufacturers in India in the coming millennium. There were two successively stringent emission levels to be met by April 2000 and April 2005, respectively. These norms were benchmarked on the basis of those already adopted in Europe, hence the names Euro I (equivalent to India 2000) and the Indian equivalent of Euro II. 1999 - The Honble Supreme C ourt passed an order directing all car manufacturers to comply with Euro I emiss ion norms (India 2000 norms) by the 1st of May, 1999 in National Capital Region( NCR) of Delhi. The deadline was later extended to 1st June, 1999 2004 - Tata Mot ors becomes the first Indian auto company to be listed on the New York Stock Exc hange 2008- Tata Motor becomes the first auto company to produce worlds smallest car Nano. 2.1.4 Major player in Indian automobile sector: Jagdish Khattar. Y.S. Kim. Ratan Tata. S.G. Awasthi. The four men are peers. Eac h has unequivocally established himself as one of the winners in the first round of the car wars. Between them, they control almost 80% of the Rs 30,500-crore I ndian automobile market. The battle royale in the Indian car market has entered the next phase. As the dust and excitement of the dozens of new models introduce d in the past one year settles down, the winners have pulled way ahead of the al so-rans. One old assumption has been vindicated -- that over 80% of the Indian c ar market is still confined to the small, sub-Rs 4 lakh models. And those mid-si ze and bigger models can only provide the icing on the cake, not the cake itself to any manufacturer.

Maruti found out that price is no longer the most important factor in winning ca r battles. Daewoo's Awasthi admits candidly that he learnt precisely the opposit e lesson -- that price does matter. Kim of Hyundai found out the hard way that y ou could get your pricing and value equation just right and still land up with e gg on your face if you tried to cut corners in the technology game. Ratan Tata l earnt that providing an internationally designed car with a great value proposit ion didn't get you far if you couldn't provide global quality standards. Both th e Indica and the Matiz had to upgrade their engines in less than one year after launch, the Honda City had to bring in both a new body and a more powerful engin e, and Hyundai had to start offering a new variant with the power steering optio n barely a year after it hit the market. From now on, the battle is expected to get more vicious. In 1999-2000, the car market bounced back from the recession b y showing a 55.83% growth! But now, no one expects the market to grow by more th an 10-15% per annum. The really big volume gains will come from wresting market share away from rivals rather than because the market itself is growing exponent ially. These are the major players in Indian automobile sector: . Hyundai: Daewoo Motors India Telco Hindustan Motors Mitsubishi Motors Ashok Le yland Swaraj Mazda Mahindra & Mahindra Tata Motors

Maruti Ud

Chapter -3

1. Philip A. Stroke (2009): The use of celebrity endorsement as a part of market ing communication strategy has been gaining popularity over the past years. Moni es paid out by firms on endorsement contracts are estimated to be 10% to 25% of total advertising expenditures. However, empirical evidences on the effect of en dorsement announcements on the stock prices performance of frims has been mixed at best. We analyze the share market perception of celebrity endorsement using a unique sample of 102 announcements. Stock returns and trading volumes depends u pon the level of press attention. Endorsements that appear in a major newspaper show higher average return and larger trading volume changes at announcement dat e than those announced on the corporate website only. 2. Subhadip Roy (2007): Th is study raises three questions and attempts to provide tentative explanations f or them. The first two questions relate to locating, in the consumer's perceptua l space, the relative position of Indian celebrities and brands on a set of pers onality attributes. The third question relates to determining the fit between th e celebrity and the brands endorsed by her/him. The results suggest that consume rs differentially rank both celebrities and brands. Specifically, Amitabh Bachch an ranks high on five personality attributes, and brands such as Pepsi and Coke rank high on four personality attributes. The study further shows that although celebrities may endorse several brands, their personality does not fit well with the personality of the brand they endorse. Evidence offered here supports the b asic assumptions of the celebrityproduct congruence model. 3. Shimp(2007): A rece nt estimate indicates that almost 20 percent of all advertisements worldwide use celebrity spokespersons. The general belief among advertisers is that messages delivered by celebrities provide a higher degree of appeal, attention, and possi bly message recall than those delivered by non-celebrities. Marketers also claim that celebrities affect the credibility of the claims made, increase the memora bility of the message, and may provide a positive effect that could be generaliz ed to the brand. 4. Goldsmith et al.(2002): They assessed the impact of endorser and corporate credibility on attitude toward-the-ad, toward the-brand and purcha se intention. 152 adults consumers were surveyed who viewed a fictitious adverti sement for Mobil Oil company. They rated the credibility of the ads endorser, the credibility of the company

and attitude towards the-ad, attitude towards brand and purchase intention. It wa s observed that endorser credibility had its strongest impact on advertisement w hile corporate credibility has its strongest impact on brand. 5. Solomon et al. (2002) also talk about celebrities being most effective in situations involving high social risk, where the buyer is aware of the impression peers will have of him or her. According to him, a celebrity endorser is relatively more effective for products high in psychological or social risk, involving elements as good ta ste, selfimage, and opinion of others, compared to a normal spokesperson. Expert o pinions were considered most useful when the product endorsed was perceived to i nvolve high, financial, performance, or physical risk. 6. Kambitsis et al., 2002 ) Celebrity endorsement is a billion dollar industry today with companies signin g deals with celebrities hoping that they can help them stand out from the clutt er and give them a unique and relevant position in the mind of the consumer. The reasons for using celebrity endorsement involves its potential to create awaren ess, positive feelings towards their advertising and brand. Advertisement featur ing celebrity endorsement is often also perceived to be entertaining. 7. Pettitt (2000) : Advertising is heavily used in process of personality creation. This f ollow logically from the fact that personalities are particularly important for brand building. They provide unique associations with the brand and these associ ations acts as a stimulus for the customer to link their personality with the br and. 8. McGuire et al.(1999): Expertise is the perceived knowledge that the sour ce possesses, while trustworthiness is the degree to which the source is conside red to be honest, ethical and believable. Both components are positively related to credibility, but the influence of one component can offset the effects of th e other. For example, a spokesperson that is viewed as knowledgeable will be ine ffective if he or she is perceived as lacking trustworthiness. 9. Henry(1999): H enry indicates that good PSAs are ones that are empathetic, meaning they build tr ust with their audience or a sense of caring about the problem. He goes on to say that a good radio PSA is one that creates a mental picture of the subject with sound effects and a strong, credible spokesperson. In another article, he mentio ns that more than

11,000 radio stations in the USA, and around two-thirds of them use PSAs. It is also in accordance with Bonk et al. (1999). 10. Dwane Hal Dean (1999): He studie d the effects of 3 extrinsic cues viz. Third party endorsement, event sponsorshi p and brand popularity on brand/manufacturer evaluation. It was observed that en dorsement significantly affected only product variables (quality and uniqueness) and one image variable (esteem). The third party endorsement hence may be prece ived as a signal of product quality. 11. Sheth et al. (1999) argue that percepti on is shaped by the stimulus characteristics (objects, brands, stories etc.), th e context in which it is delivered (social, cultural), and the customer characte ristics (knowledge, experience, expertise). It is within these stages that a con sumer will either recognize a fit between a celebrity and a product/brand, or re ject this connection on different grounds. Memory is structured as an associativ e network. When this happen the brand and the celebrity become parts of each oth ers association set . 12. Till and Shimp(1998): Other research suggests that cel ebrity endorsements might vary in effectiveness depending on other factors like the fit between the celebrity and the advertised product. 13. Tellis (1998) argues that consumers in a high-involvement situation might actually be offended by th e use of celebrity to endorse the brand. He also suggests that when there seem t o be perceived high differences among competing brands, the consumer will percei ve it as a high-involvement situation and put extra emphasis on information abou t the product more than being influenced by celebrity endorsers. 14. Lang and Go odwill (1997): PSAs are broadcasted by media outlets in the public interest at n o cost to nonprofit organizations. According to them, Public service announcement s are a vital tool in generating awareness for critical issues while dispensing important information for many non-profit organizations. If produced correctly an d distributed to the appropriate media outlets, PSAs help educate, inform, and m otivate various publics on a variety of topics and issues (PSAs: Do They Really Work?).

They,wrote that PSAs deal with life-and-death issues. They urge us to think about people with desperate conditions, act to help those in need and support causes that can change the world. 15. Freiden(1994) :He concluded that celebrities are p articularly effective spokespersons because they are viewed as highly trustworth y, believable, persuasive, and likeable. A credible spokesperson is, other thing s being equal, more effective than a less credible spokesperson. 16. King (1991) argues that a good strategy to build strong brand equity is to create an origina l metaphor for the brands personalityThey talk about the factors involved in build ing a brand such as: Presence, Relevance, Differentiate, Credibility, and Imager y. The credibilityfactor especially has been looked at by several researchers in celebrity endorsement The same has presence and also to some extent imagery and differentiate. Relevance in this context can be looked at as a result of succes s in the other areas, as it concerns being perceived as relevant for the consume r. 17. Obanian(1990): developed a source credibility measure that operationalize s credibility as consisting of the underlying dimensions of expertise, trustwort hiness and attractiveness. The expertise and trustworthiness dimensions are esse ntially identical to those identified in previous research and discussed above. However, the attractiveness dimension, unlike previous conceptualizations, is de fined as the physical attractiveness of the source to the listener, and to a less er extent, the emotional attractiveness of the source (Bearden and Netemeyer, 199 9, p. 301). The advantage of this conceptualization lies in part in the extensiv e scale validation procedure undertaken by Ohanian. 18. Friedmen et al.(1976):Us ing advertisements with celebrities and non-celebrities for a fictitious brand o f sangria wine, found that the celebrity version of the advertisement had higher scores on probable taste, advertising believability, and purchase intention the three dependent variables. However, the wine was a fictitious brand, and the ce lebrity simply brought recognition to the name.The paucity of research comparing celebrity with non-celebrity spokespersons highlights the need for continued in vestigation into this area. It is important for advertisers to clearly understan d both the pros and cons of using such

individuals to represent their products, causes, or organizations; and ultimatel y the advertisers must assess the effectiveness of such a message. 19. Triandis (1971): Attractiveness has been conceptualized in terms of similarity, familiari ty, and likeability. Similarity refers to the perceived resemblance between the spokesperson and the audience. Familiarity represents the amount of knowledge th at the audience has about the spokesperson. Likeability refers to affection for the spokesperson based on physical appearance, behavior or other personal traits . 20. Hovland et al. (1953): In encoding the message in the context of celebrity endorsement, perhaps the most important decision to be made, besides choosing w hether or not to use celebrity endorsers at all, is the choice of celebrity. Muc h research has been made in this area and several models have been made to expla in and assist in the celebrity endorsement selection process.

Chatpter-4

Data analysis and interpretation: 1.Occupation of respondent: Occupation Business Class Service Class Student Others %tage 25 25 30 20 %tage 20% 25% Business Class Serv ice Class Student 30% 25% Others Interpretation: From this pie-chart it is clear that majority of the respondents are students and rest of the share is occupied by service and business class. 2 . Age of the respondent: Age 18-25 26-32 33-39 Above 40 %tage 30 20 30 20

No. of respondent 35 30 25 20 No. of respondent 15 10 5 0 18-25 26-32 33-39 Abov e 40 Interpretation: This pie-chart depicts that mostly respondents are young and whi le rest are above 25 years. 3.Gender of the respondent: Gender Female Male %tage 65 35 35% Female Male 65%

Interpretation: This pie-chart depicts that 65% of the respondents are female an d 35% are males. 4.Type of Vehicle: Vehicle Two-wheeler Four-wheeler Both %tage 45 35 20 20% 45% Two-wheeler Four-wheeler Both 35% Interpretation: This pie-chart depicts that 45% of the people have two-wheeler a nd 35% of the people have four-wheeler and rest 20% have both two-wheeler and fo ur-wheeler. 5.Factors affecting purchase intention: Factors Price Opinion-leader celebrity endorser %tage 20 15 35

Brand name Factor 30 20% 30% Price Opinion-leader celebrity endorser 15% 35% Brand name Interpretation: This pie-chart depicts that 35% of the people consider celebrity endorser while going for the purchase, followed by brand name-with 30%.,opinion leader 15% and 20% people consider price. Brand name usually covers all aspects like functional aspects viz.mileage,speed etc. As people usually are more inter ested towards well known brands and if these brands are advertised by famous cel ebrity it creates an huge impact. 6.Like to see any celebrity endorsing your bra nd: Preference Yes No Can't say %tage 55 25 20

20% Yes No 55% 25% Can't say Interpretation: This pie-chart clearly indicates that 55% of the respondents wan t their products to be advertised by celebrities, 25% dont want and 20% of the re spondents werent sure. So, this clearly shows how much important these celebritie s are in the daily life of common man. 7.Male v/s Female celebrity endorser: HYP OTHESIS TESTING Step1: State Hypothesis: Ho: Female celebrity endorser is more e ffective than that of male. Ha: Female celebrity endorser isnt more effective tha n that of male. Step 2: Set the Rejection criteria: DF = 5-1 = 4 At alpha .05 an d 4 degrees of freedom, the crtitical value from the chi square distribution tab le is 9.49 Frequency Observed .

Preference Strongly Agree Agree Indifferent Disagree Strongly Disagree Column To tal Male 25 05 10 5 10 55 Female 5 15 10 10 5 45 Frequency Expected Row Total 30 20 20 15 15 100 Preference Strongly Agree Agree Indifferent Disagree Strongly Disagree Column To tal Preference Strongly Agree Agree Indifferent Disagree Strongly Disagree Prefe rence Strongly Agree Agree Indifferent Disagree Strongly Disagree Male 55*30/100=16.5 55*20/100=11 55*20/100=11 55*15/100= 8.25 55*15/100= 8.25 55 Male (25-16.5)2/16.5 (5-11)2/11 (10-11)2/11 (5-8.25)2/8.25 (10-8.25)2/8.25 ChiSquare Male 4.38 3.27 0.09 1.28 0.37 Female 45*30/100=13.5 45*20/100= 9.0 45*20/100= 9.0 45*15/100=6.75 45*15/100=6.7 5 45 - al ulation Female Row Total 30 20 20 15 15 100 (5-13.5)2/13.5 (15-9)2/9 (10-9)2/9 (10-6.75)2/6.75 (5-6.75)2/6.75 Female 5.35 4 0.11 1.56 0.45

= 20.85 Interpretation: As the Chi-square test statistics 20.85 exceeds the critic al value of 9.49 hence null hypothesis is rejected and hence we reached at the r esult that our alternative hypothesis is accepted. It is confirmed after the ana lysis that male celebrity endorser are more effective than that of female celebr ity. 8.Celebrity endorser as an effective method of persuasion: Preference Stron gly Agree Agree Indifferent Disagree Strongly Disagree Degree of preference %age 45 15 10 20 10 10% 20% 45% Strongly Agree Agree Indifferent Disagree Strongly Disagree 10% 15% Interpretation: This chart depicts that mostly people agree that Celebrity endor sement is an effective tool of persuasion. 45% of people strongly agree that cel ebrity endorsement is an effective tool of persuasion and 20% of people disagree that it is one of the tool.

HYPOTHESIS TESTING Step1: State Hypothesis: Ho: Celebrity endorsement is not an effective tool of persuasion to facilitate customer to go for purchase. Ha: Cele brity endorsement is an effective tool of persuasion to facilitate customer to g o for purchase. Step 2: Set the Rejection criteria: DF = 5-1 = 4 At alpha .05 an d 4 degrees of freedom, the critical value from the chi square distribution tabl e is 9.49 Step 3: Compute the Test Statistics: = (O-E)2/E Preference Strongly Agr ee Agree Indifferent Disagree Strongly Disagree = 41.5 15 10 20 10 20 20 20 20 -5 -10 0 -10 25 100 0 100 0.25 5 0 5 Observed 45 Expected 20 O-E 25 (O-E) 625 (O-E)/E 31.25 . Interpretation: As the Chi-square test statistics 41.5 exceeds the critical valu e of 9.49 hence null hypothesis is rejected and hence we reached at the result t hat our alternative hypothesis is accepted. Hence it can be concluded that celeb rity endorsement is and effective tool of persuasion to facilitate customer to g o for purchase.

9.Celebrity endorsement affects my purchase decision while going for the purchas e of automobile products. Preference Strongly Agree Agree Indifferent Disagree Strongly Disagree %age 30 15 10 35 10 Degree of Preference 10% 30% Strongly Agree Agree Indifferent 35% 10% 15% Disagree Strongly Disagree Interpretation: This chart depicts that 45% of the people agree strongly or simp ly on the fact that their automobile purchase is being affected by celebrity end orsement,10 % of the people remain indifferent and 45% of the people disagree wi th this fact. HYPOTHESIS TESTING Step1: State Hypothesis: Ho: Celebrity endorsem ent doesnt affect purchase decision of automobile products. .

Ha: Celebrity endorsement affects purchase decision of automobile products. Step 2: Set the Rejection criteria: DF = 5-1 = 4 At alpha .05 and 4 degrees of freed om, the critical value from the chi square distribution table is 9.49 Step 3: Co mpute the Test Statistics: = (O-E)2/E Preference Strongly Agree Agree Indifferent Disagree Strongly Disagree = 32.5 15 10 35 10 20 20 20 20 -5 -10 15 -10 25 100 22 5 100 1.25 5 11.25 5 Observed 30 Expected 20 O-E 10 (O-E) 100 (O-E)/E 10 Interpretation: As the Chi-square test statistics 32.5 exceeds the critical valu e of 9.49 hence null hypothesis is rejected and hence we reached at the result t hat our alternative hypothesis is accepted. Hence it can be concluded that celeb rity endorsement affects purchase decision of automobile products. 10.Celebrity persona you like most: Celebrity persona Bollywood stars Sports star None of the above %tage 55 25 20

Degree of preference 20% Bollywood stars Sports star 55% 25% None of the above Interpretation: This pie-chart depicts that majority of people like to see bolly wood stars to endorse their brands and 25% of them sports star. While remaining 20 % dont want to any celebrity endorsing their brand. HYPOTHESIS TESTING Step1: State Hypothesis: Ho: People like to see bollywood stars endorsing their brand t han sports star. . Ha: People like to see sports stars endorsing automobile products than that of b ollywood stars. Step 2: Set the Rejection criteria: DF = 5-1 = 4 At alpha .05 an d 4 degrees of freedom, the critical value from the chi square distribution tabl e is 9.49 Step 3: Compute the Test Statistics: = (O-E)2/E

Celebrity persona Bollywood stars Sports star None Observed Expected O-E (O-E) (O-E)/E 55 25 33.3 33.3 33.3 21.7 -8.3 -13.3 470.89 68.89 176.89 14.14 2.06 5.31 = 21.51 of 20 the above Interpretation: As the Chi-square test statistics 21.51 exceeds the critical val ue of 9.49 hence null hypothesis is rejected and hence we reached at the result that our alternative hypothesis is accepted. Hence it can be concluded that peop le like to see sports stars endorsing their products rather than bollywood stars . 11. You follow your favorite celebrity while purchasing new automobile every t ime: Response Every time Rarely Never %tage 40 25 35

Response 35% 40% Every time Rarely Never 25% Interpretation: This pie-chart depicts that 40% of people follow their favorite celebrity every times while going for the purchase of new automobiles. That mean s frequency is pretty large. On the other hand 25% of the people rarely follow t heir favorite celebrity. While 35% of the people doesnt follow any celebrity for purchasing any of the automobile vehicle everytime. 12. Identify the following ads regarding various automobile products: More Car pa r car The sun-shine car . Why should boy have all the fun?.. spondents, 30 were able to identify the celebrity in whole 4 ads, 30 were able t o identify 3, 20 were able to identify 2 and 10 were there who identified only 1 of

Wh

the ad. 10 people were there who werent able to identify even a single celebrity. Majority of the respondent were quite familiar with Priyanka Chopras Why should boy have all the fun? So majority of the respondents were able to recognize the c elebrity used in the advertisement so it clearly tells that celebrity endorsemen t act as source of brand-building.

Findings: After completing survey I found that: Brand name and celebrity endorse r are two factors that people consider before making a purchase intention of aut omobile vehicle. Maximum number of people wants to see celebrity endorsing their automobile vehicles that means they have high involvement with the celebrities. One of the abstract finding of the survey was regarding peoples orientation towa rds gender biasness. This finding clearly indicated that people like to see male celebrities endorsing automobiles than that of female celebrities. Most no. of people believe that celebrity endorsement is an effective mean of persuasion i.e . it convey the message clearly to the target audience regarding product offerin gs and persuade them to go for the purchase. It was found that celebrity endorse ment have an impact over the purchase of automobile products. As large no. of pe ople surveyed confirmed this fact. In country like India were Cricket is a religion and cricketers are worshiped as God. One of the finding revealed that people admire sports player as better cel ebrity persona than that of bollywood actor/actress. It was found that while mak ing every new purchase of an automobile most no. of people follow celebrity endo rser while rest of them denied this fact. The results of brand recall were aston ishing most no. of people were able to recognize the celebrities endorsing the g iven advertisement. So it showed that celebrity endorsement is a source of celeb rity endorsement.

Chapter-5

5.1 Summary: Celebrity endorsement is a method employed by marketers as a promot ional tool so that people can associate themselves with the product as they asso ciate themselves with the celebrity endorser. Companies spend huge amount of mon ey to rope in such celebrities so as to endorse their brands. They generally det ermine their effectiveness by measuring ROI. Lot of studies conducted on celebri ty endorsement but no one clearly indicated whether it can act as a source of br and-building. So a research was conducted on this particular aspect. It wasnt pos sible to concentrate this study on the entire sectors so automobile sector was s elected. Primary data was collected through structured questionnaire and samplin g unit was Jalandhar city. Secondary sources were also used in the beginning so as to gain an insight of the problem. After carrying it was found that male cele brities are better than that of female celebrities. People love to see sportsper son endorsing automobile than that of bollywood stars. It was found that celebri ty endorser affects people intention regarding purchase of the automobile and ce lebrity endorsement acts as a source of brand-building.

5.2 Conclusion: Despite the obvious economic advantage of using relatively known personalities as endorsers in advertising campaigns, the choice of celebrities to fulfill that role has become common practice for brands competing in today's cluttered media environment. There are several reasons for such extensive use of celebrities. Because of their high profile, celebrities may help advertisements stand out from the surrounding clutter, thus improving their communicative abil ity. A brief assessment of the current market situation indicates that celebrity endorsement advertising strategies can, under the right circumstances, indeed j ustify the high costs associated with this form of advertising. But it would be presumptuous to consider celebrity endorsement as a panacea for all barricades. Celebrity endorsement if used effectively, makes the brand stand out, galvanizes brand recall and facilitates instant awareness. To achieve this, the marketer n eeds to be really disciplined in choice of a celebrity. Hence the right use of c elebrity can escalate the Unique Selling Proposition i.e. it can act as a source of brand-building of a brand to new heights; but a cursory orientation of a cel ebrity with a brand may prove to be claustrophobic for the brand. It was found t hat people love to see celebrities endorsing their brands so the involvement of common man is pretty high with these celebrities. So marketers should use the ri ght celebrity matching with the product. During survey it was found that male ce lebrities are considered to be better celebrity endorser than that of their fema le counterparts. This is because lots of research regarding consumers behavior to wards automobile indicates that people view automobile as female so in order to attract the attention of target customers they preferably use male celebrity end orser. Also it was found that people love to see sports stars endorsing their au tomobile than bollywood stars. This is because of the fact in India Cricket is v ery famous and people worship players like Sachin Tendhulkar, Kapil Dev, Sourav Ganguly etc. So they love to see these players endorsing their automobiles. At l ast I just want to say A celebrity is a means to an end, and not an end in him/h er.

5.3 Limitation: There are following constraints of the study which can be explai ned as: The time of research was short due to which many fact has been left untou ched The Area undertaken in research in Jalandhar only. But to do a completer re search a wide area is required, so the area is also a constraint of the study. S ample for the study taken is of only 100 consumers. Which can also act as a cons traint in the study? While collecting data some of the respondents are not willi ng to fill the questionnaire, so they might not fill their true behavior. This c an also be a constraint of the study.

5.4 Recommendations: After studying impact of celebrity endorsement on buying be havior of customers in automobile sector and as a source of brand-building I wan t to suggest following recommendations: From study it was found that respondents were able to recognize the Priyanka Chopras advertisement Why should boys have al l the fun This advertisement was designed on such an idea that everyone can recog nize the brand of Scotty Pepp easily. So instead of hiring any celebrity compani es should try to create such nice innovative idea and then match the suitability of celebrity with the idea. This is also supported by the fact that Todays era i s of Gen X their taste changes very fast and wants fresh material. This study re veals that celebrity endorsement act as a source of brand-building but it isnt th e complete solution. Company cant rely only on celebrity endorsement to sell thei r products but they should follow an integrative approach so as to generate good sales volumes. They should provide more schemes to their customers in order to sell their products. One of the important recommendations that I want to give is that during this slowdown period companies are cutting their advertisement expe nditure but they shouldnt do this. This is because this slowdown provide them an opportunity to differentiate themselves from their competitors. This is also sup ported by the researches. One of the research explained that during 1960s recessi ons 290 global companies increased their advertisement expenditure and their sal es increased by whopping 300%. Some of the companies are well established brand name todays like IBM, Microsoft, 3M etc.

Chapter-6

Bibliography: REFERENCES: Philip A.Stroke(2009), "impact of celebrity endorsemen t on stock prices", Journal of Consumer Research, Vol. 14 No.March, pp.471-82. R oy, Shubhadip (2007), "Consumers perceptual space and Indian celebrities in relat ion to brand attributes", Journal of Business Research, Vol. 37 No.1, pp.7184. S himp (2007), "Celebrities as spokesperson", Journal of Retailing, Vol. 76 No.2, pp.175-91. Goldsmith et al.(2002): Celebrity endorser vis--vis corporate credibili ty, Media Tech Foundation, Flemington, NJ Solomon et al. (2002) "Celebrity endors ement in risk regime", Communication Research, Vol. 30 No.5, pp.483-503. Kambits is et al., (2002) The National Bullying Survey 2002: The Results, availableat:ww w.bullying.co.uk/nationalsurvey/thenationalbullyingsurvey_results .pdf (accessed 28 february 2009), . Pettit (2000), Building Strong Brands, Free Press, Boston, MA., McGuire et al.(1999), "Expertise and trustworthiness in relation to credul ityCelebrity endorsement", Quarterly Journal of Austrian Economics, Vol. 3 No.1, pp.63-78 Henry(1999) "Role of PSAs in USAs Radio market", European Journal of Mar keting, Vol. 34 No.1/2, pp.156-75. Dwane Hal Dean (1999)Managing Brand Equity: C apitalizing on the Value of a Brand Name for manufacturer prospective, The Free Press, New York, NY, Sheth et al. (1999)"Celebrity endorsement in relation to pe rception and stages of consumer adoption for celebrity endorsement ", Advances i n Consumer Research, Vol. 20 No.1, pp.463-8 , Till and Shimp(1998) Celebrity endo rsement-a different prospective, The Journal of Consumer Affairs, Vol. 27 (1), pp . 55-65.

Tellis (1998) "Celebrity endorsement in highly involved regime", the Academy of Marketing Science, Vol. 16 No.4, pp.74-94. Journal of Lang and Goodwill (1997), PSA- Do they really work? Oxford University Press, Oxfor d, . Freiden(1994), "Celebrity endorser as credible spokesperson", Journal of Marketi ng Research,, Vol. 11 No. May, pp.156-63 King (1991), "Determinants of strong br and equity: a behavioral analysis", The Journal of Product and Brand Management, Vol. 6 No.5, pp.315-24. Obanian(1990): "The role of emotions in marketing", Jou rnal of the Academy of Marketing Science, Vol. 27 No.2, pp.184-206. Friedmen et al.(1976), The power of brand, Journal of Business, Vol. 23 pp.71-80. Triandis (1 971),"Relationship between attractiveness,similarity,familiarity and likeability ", Advances in Consumer Research, Vol. 18 No.1, pp.445-52 Hovland et al. (1953), Whom to chose as celebrity?, New York, NY, pp.53556. WEBSITES: www.marketingmania .in/india.htm http://en.wiki.wikipedia.com/indian_industry www.managementparadis e.com/consumerbehaviour_celebrity endorsement_automobiles.htm http://www.hindust antimes.com/StoryPage/StoryPage.aspx?sectionName=&id=ac f176cd-6f53-42b6-a47b-72 e34341cfe1&&Headline http://www.businessweek.com/innovate/content/feb2008/id2008 0227_377233_pa ge_2.htm http://www.telegraphindia.com/1081007/jsp/opinion/story_ 9933949.jsp

APPENDIX

Questionnaire Dear Respondents, I, Sandeep Sharma, student of MBA, am conducting a survey on Im pact of celebrity endorsement on buying behavior of customers and as a source of brand building. For this purpose I need your cooperation in fulfilling this ques tionnaire. It will take few minutes of your precious time. It is make sure that information obtained is for general purpose only. 1) Name of the respondent 2) What i our occupation? Business Class Service Class Student Others 3) What is your age? 18-25 26-32 32-39 More than 40 Female 5) What type of vehicle do you currently own

4) What is your gender? Male ? Two-wheeler Four-wheeler

Both 6) What factor affects your buying behavior toward this purchase? Price Opinionleader Celebrity endorser Brand name 7) Do you like to see any celebrity endorsi ng your brand on television? Yes No Cant say 8) Celebrity endorsement is an effective tool of persuasion of buying vehicle Rate this statement. Strongly agree Agree Indifference Disagree Strongly disagree 9) Male endorser is more effective as compared to female endorser. Rate this stateme nt. Strongly agree Agree Indifferent

Disagree

Strongly disagree

10) Celebrity endorsement affect my purchase decision while purchasing automobile vehicles Rate this statement. Strongly agree Agree Indifference Disagree Strongl y disagree 11) Out of the following celebrity persona whom do you like most? s Sports star None of above Bollywood Star

12) Do you follow your favorite celebrity while purchasing a new vehicle every t ime? Every time Rarely Never 13) You are required to identify the following ads regarding various automobile products:

More Car par car The sun-shine car . Thanks for your valuable Contribution

Why should boy have all the fun?