BRAND ADVERTISING AND CELEBRITY ENDORSEMENT

Effects of Celebrity Endorsement and Brand Advertising on

Consumers' Purchasing Decisions

Abstract

Celebrity endorsement is a widely used tactic in marketing and much research has been done on the selection and effect of celebrity endorsement. This dissertation looks at consumer attitudes and associations towards celebrity endorsement, using the case of NIKE and their latest marketing campaign. An adapted version of metaphor elicitation was undertaken to find major constructs in a sample consisting of University students. Findings from this paper confirm the importance of selection perceived credibility of the spokesperson and image fit, the credibility of the setting, and the dangers of overshadowing and over-endorsement. An interesting finding regards what is referred to as the “Pinocchio factor”, the consumer perceiving the celebrity spokesperson as Pinocchio, where his nose grows when he is not telling the truth. The same “Pinocchio factor” also refers to the problems of controlling a celebrity spokesperson, one of the major flaws in using a celebrity spokesperson in marketing.

Table of Contents

Abstractii

Chapter 1: Introduction1

Background of the Study1

Problem Statement2

Purpose of the Study2

Objective of the Study3

Significance of the Study3

Limitations of the Study5

Chapter 2: Literature Review8

Customer's Perspective on Celebrity Endorsement8

Properly matched Customer's effect10

Consumers' Self Concept12

Brand image14

Symbol, icon and index15

Summary16

Chapter 3: Methodology18

Introduction18

Quantitative Research19

Hypothesis Formulation19

Measures Variable26

Dependent Variable27

Consumer overall evaluation of brand extension27

Independent Variable Fit27

Ownership status29

Experimental design29

Procedure30

Chapter 4: Findings and Discusion33

Evaluation of the endorser35

Hypothesis 1 - the perceived quality of the product36

Hypothesis 2 - credibility and relevance of information38

Hypothesis 3 endorser effect on quality perception39

Hypothesis 4 - the correlation between price and quality40

Hypothesis 5 - the effect of the mismatched endorser41

Chapter 5: Conclusion43

Limitations47

Recommendations47

Implications for corporate brand management and marketing49

Contributions and areas for future research51

Conclusions52

Future Research53

References56

Bibliography87

Appendix: A: Tables94

Appendix B: Questionnaire98

Chapter 1: Introduction

Background of the Study

One possible explanation for the effectiveness of celebrity endorsers is that consumers tend to believe that major stars are motivated by genuine affection for the product rather than by endorsement fees (Atkin and Block, 1983). Freiden (1984) concluded that celebrities are particularly effective endorsers because they are viewed as highly trustworthy, believable, persuasive, and likeable.

In recent years, there has been increased interest in the brand personality construct as its strategic importance has become more apparent. Brand personality is defined as “the set of human characteristics associated with a brand” (Aaker, 1997, p. 347). A distinctive brand personality can help create a set of unique and favourable associations in consumer memory and thus build and enhance brand equity (Keller, 1993; Johnson et al., 2000; Phau and Lau, 2000). As a result, brand personality is considered to be an important factor for the success of a brand in terms of preference and choice (Batra et al., 1993; Biel, 1993).

Indeed, a well-established brand personality can result in consumers having stronger emotional ties to the brand and greater trust and loyalty (Siguaw et al., 1999; Johnson et al., 2000), thus providing an enduring basis for differentiation (Aaker and Fournier, 1995; Halliday, 1996; Haigood, 1999) which is difficult to copy (Aaker, 1996).

A recent estimate indicates that approximately 25 percent of East London commercials use ...