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Proposal “Do celebrities’ endorsement affects the customer purchase decisions?” By: Sakina Alwedaee | 20090242 Table of Contents Abstract ........................................................................................................................................................ 3 Introduction .................................................................................................................................................. 3 Literature Review ......................................................................................................................................... 4 Research Methodology ................................................................................................................................ 7 Research Design ....................................................................................................................................... 7 Primary Research.................................................................................................................................. 8 Secondary Research ............................................................................................................................. 9 Data Analysis .......................................................................................................................................... 10 Limitations of the research .................................................................................................................... 10 Schedule, Required Resources and Budget ............................................................................................... 11 Reference .................................................................................................................................................... 12 Page 2 of 12 Abstract The field of influential marketing has been greatly explored in context of celebrity endorsement and its use in marketing. The current study focuses on exploring the effect of celebrity endorsement on consumer choices of purchases. The study will adopt a qualitative methodology for the research and focuses to address the questions raised to explore the research topic. This proposal will be conducted in order to preface for the study and research; it contains a general introduction about the effect of the celebrities’ endorsement on the customer choices, a clear research question and related hypothesis. As well, a literature review for an existing relevant researches and a detailed methodology section about how to collect the researches data and evaluated them. The conclusion includes realistic forecast of the cost, time and resources needed for such a study. Introduction Marketing has emerged from being a skill to a science where a large number of different factors are considered in context of their impact on consumer behaviour and the choices that consumers make in relation to consumption patterns. In this regard, the marketing experts have been studying a number of external factors that influence consumer in decision-making and include factors like celebrity endorsement, brand loyalty, brand personality and image and the overall trend in the market, to name a few. However, among these, celebrity endorsement is one of the most prominent and visible tactic that has been used by marketers for modifying consumer behaviour positively to boost the consumption and hence the sales of the given product. Celebrity endorsement represents a unique form of advertisement campaign for brands where celebrities are engaged and their fame and repute is used as a platform for promoting the given product or service. The most common products that extensively use celebrity endorsements include perfumes, clothing, sports gear, personal hygiene and cosmetics. It is to be noted the celebrity endorsements are very common in form of television advertisements, launching ceremonies and such other marketing event. The most common type of celebrity endorsement, also known as celebrity branding is through nominating a Page 3 of 12 celebrity as a brand ambassador. This allows the marketing company to use the status of the celebrity to market its product or service, wherein the model appears are promotional figure. Bahrain is always trying to be up-to-date with the improvements that would keep the renaissance in a high level. Thus, Bahrain tracks the international and local competition especially in business sector in order to develop the economy. For example, related to the celebrities’ endorsement effect on the customer decision; Bahrain uses this strategy in most of the businesses to attract customers and raise their financial sector which lead the other sectors. This strategy is very clear in which the customer could notice the celebrities’ advertisements in everywhere in posts and banners form on the walls and doors of shops and streets. The research aim of this thesis/dissertation is “Do celebrities’ endorsement affects the customer purchase decisions?”. In simple words, the research paper focuses on exploring the impact of celebrity endorsement on the choices that the customers make regarding purchases. It is to be noted that celebrity endorsement is one of the most common forms of influential marketing and its relation to consumer choices has widely been explored and established in different researches. In order to study the hypothesis “Consumer purchase model changes or influence with celebrity involvement for products”; a detailed research has been conducted and evaluated carefully to cover all the hypothesis’s aspects. Literature Review Friedman and Friedman (1979) researched the concept of celebrity and celebrity endorsement in marketing perspective and arrived at a definition that a natural person who gains public attention and audience due to participation in entertainment (art, sports or other) or any like achievement. However, Copper (1984) explored some general beliefs among advertisers and found that messages delivered by celebrities are considered to be highly reliable by the audience, adding to the credibility of the brand as well as the business. In addition, Copper (1984) explained that marketers have a belief that messages delivered by celebrities are more likely to be recalled, get attention of the audience and brings positive behaviour from the consumers. Celebrity endorsement is commonly used in television and print advertisement; Page 4 of 12 however, the impact of celebrity endorsement versus non-celebrity involvement was studied by Menon (1998). He adopted a multivariate analysis to establish a model explaining the phenomena. The focus on his study was on Milk (a food item) and the attributes he tested include believability, knowledge, appearance and liking for celebrity in the advertisements. In addition to this, Laferty and Goldsmith (1999) extended their study in exploring the endorser credibility that has direct link with consumers’ attitude and purchase decisions. However, the author found that corporate credibility i.e. image of the business or firm also plays a vital role in addition to celebrity endorsement. However, in this context, a conclusive research was conducted by Gupta (2007) who pointed out that credibility due to celebrity endorsement is linked with the advertisement, while corporate credibility affects the brand image and thus purchase intentions. Celebrity endorsement is studied extensively as an important topic in influential marketing. In this context, the research conducted by Anjum et al. (2012) defined celebrities in context of influential marketing as individuals who are appraised in public due to their involvement in arts, sports, entertainment or such areas. The definition was derived from the work of Friedman and Friedman (1979). The authors pointed out that marketers have a general belief that the message delivered by celebrities in advertisement has a higher impact in terms of appeal, attention and possibility of recall, as compared with other messages. The authors also pointed out that there exists an established belief in marketers that celebrity endorsement results in creating a reliable image of the product, add credibility to the producer and increase memorability of the message. Exploring the link between sales and celebrity endorsed advertisements, the authors found that businesses use celebrities for enhancing their image, expand brand awareness, establish recall retention and improve their credibility in eyes of customers. The study also concluded that celebrity endorsement results in higher sales and thus, a higher market share is achieved, due to higher consumer confidence, favourable buying pattern for the given product and higher demand. This is based on the consumer perception that the product is reliable because celebrities are trustable and knowledgeable. Francis and Yazdanifard (2013) identified that celebrity endorsements form the baseline of marketing strategies in various industries especially personal care products, foods and retail Page 5 of 12 sector. Focusing their study in US and Asian continent, the author found that celebrity endorsement changes the consumer decision regarding consumption to a considerable extent. This makes celebrity endorsement a profitable activity for retail sector to associate a celebrity to their advertisement. The positive impact on brand awareness achieved through the celebrity endorsement results in higher demand from the customers, an indication of change in consumer behaviour due to changed consumer perception stemming at the celebrity influence, image, and likeness. While exploring the advent of celebrity involvement, Choi and Berger (2009) indicated that form the start of 21st century, the trend of globalization and internationalization has resulted in emergence of celebrities as global icons, representing power and status. With emergence of political, cultural and social power, celebrities enjoy strong influence on consumer choices, but there are differing trends across the globe. The Western celebrities are well known as compared with the regional celebrities. Exploring the difference between celebrity endorsement between US and Asia, the authors found that while western celebrities were well known, the local celebrities have a lower trust rating. However, the authors also concluded that celebrity endorsement is becoming a high pace trend in the Asian countries. In addition, various researchers such as Balakrishan and Kumar (2011), Doss (2011) and Sola (2012) found that the level of satisfaction experienced by a consumer in consuming a product is higher when a celebrity endorser is there. This results in the fact that consumers are willing to pay higher price for that product due to attachment of a premier perception. This premier perception is due to the positive, reliable and respected image added due to celebrity endorsement. However, these authors also indicated that although, other factors like lifestyle of consumer, preferences, disposable income and other socio-economic factors play a vital role in such decision-making but it was found that in spite of the fact that the endorsers perceived image and the brand attribute fails to match, the credibility for the brand is positively perceived. However, the most important thing that is to be noted that celebrity endorsement has two main dimensions recognized in literature by the above researchers i.e. entertainmentbased motivation and the intense attachment motivation. The entertainment-based motivation originates from the liking or admiration that general public or a particular class of consumers Page 6 of 12 have towards a given celebrity. However, the intense attachment motivation relates to the perception of being attached to a given personality or the feelings of belongingness towards the celebrity. Both of these motivations are different and is based on feelings of the consumer towards the endorser. In addition to this, Jain (2008) explored the negative impacts of celebrity endorsement and found that it limits effective communication of a given product, thus pushing the product in the background while highlighting the celebrity. This creates a challenge for marketers not to over emphasize the product or the celebrity in advertisement. Till and Shimp (1198) found that celebrity involvement results in a cost in terms of increased advertisement costs and hence, decrease the profitability and if the celebrity shifts to a rival brand, this brings a purely negative impact on the previous brand. In addition, Erdogan (1999) found that involvement of celebrities in high profile scandals could also affect the brand equity and image. Research Methodology The research methodology chapter explains the model and approach adopted by the researcher to collect, analyse, process and present the data to find answers to the research questions raised in previous sections. The purpose of research methodology is to define research techniques, research paradigm and data collection methods to achieve research aim. An important thing to be noted here, that the appropriateness of research methodology has direct impact on the success of research. The proposed research methodology for the current research is given hereunder; Research Design Research design explains the central approach that a researcher adopts for collecting data in order to find answer to research questions. The research design may include descriptive design, experimental, non-experimental, meta-analysis, case study or other such methods. However, since the broader research topic of the current research is more of a descriptive nature and is given as “Do celebrities’ endorsement affects the customer purchase decisions?”, the Page 7 of 12 important variables that are closely related include consumer purchase pattern, repurchase decision, and use of celebrity in advertisements. However, the previously identified variables are qualitative in nature, and thus, a pure quantitative approach is not applicable. In order to collect information regarding the given variables, there are two main methods of data collection i.e. primary method of research and secondary method of research. It is to be noted that primary research includes all such methods where the researcher collects data directly from the subjects. These methods include interviews and surveys. Another method of data collection is the secondary research where the researcher collection data from the work already done by other institutions, individuals or bodies. In context of the current research, the research design comprises of both primary and secondary methods of data collection to achieve effectiveness to address research aim. A comprehensive research design will enable the researcher to take into account different methods of data collection in order to ensure comparison and generation of new knowledge. An important thing to note here is that primary research will enable the researcher to collect data from the sample population that is highly relevant and could be used to explore the relations and models establish in theory (identified through secondary research) to address research question. Through this composite methodology, the researcher is able to develop insight to the data collected by exploring the links between the variables to be similar or different from that established in literature. Primary Research As mentioned that the research will adopt both primary and secondary data collection. The primary method of data collection in current context involves questionnaire based survey, in accordance with the limitations faced by the researcher. As well, interviews could also be used as a source of primary data collection. However, the limitations like noise, extended time requirements and difficulty to expand the research sample to a certain minimum number, questionnaire-based survey is adopted. Page 8 of 12 The Questionnaire The questionnaire that will be used in survey shall comprise of 5 or 6 short questions that are under MCQs format and are close ended. The researcher has developed unique legend/criteria given with the questionnaire to help the participant in responding to the question. The questions included in the questionnaire are designed to explore insights to the various research questions and partially enable the researcher to apply different tools such as statistical or graphic analytical tools to study trends in the responses. Research Population Sample The survey questionnaire will be circulated among total of 150 participants comprising of men, women (on equal basis) including Bahraini nationals and expatriate with 80% local to 20% foreigners. This will allow the research to take into account gender diversity as well as cultural variables, which can form the basis for future research in the same context. It is to be noted that 150 participants will be selected on random basis, and age-based stratification will be done to make the sample reflect the whole of the Bahraini population. The questionnaire is planned to be distributed among the participants through various channels such as softcopies will be emailed to the participants and where possible, a hard copy will also be delivered. In addition, the questionnaire contains an ethical statement declaring the purpose of the survey, the roles and responsibilities of the researcher as well as the participant to meet the ethical requirements of such research. Secondary Research The secondary method of data collection includes internet based research in online libraries such as Wiley, Science Direct and others to identify the researches done previously that are in line or related to the current research topic. The research will be conducted using certain key words and after collection of a number of research papers, each of them will be scanned to shortlist those that are highly relevant to any of the research questions or research objectives. Page 9 of 12 Key words and phrases Influential marketing; Celebrity endorsement; Celebrity advertisement; Consumer behaviour and influential marketing; Celebrities and consumption pattern Data Analysis As described previously, the questionnaire will contain MCQs that are developed and marked under a specific manner enabling the respondents to suit the right answer that could be translated to quantitative values. Data analysis techniques include use of Excel based functions for graphs and mathematical calculations. Limitations of the research Since the research relates to social perspective, the research is subject to the limitations to which social researches are exposed to. The common limitations of the research include time, finance and human resource. Moreover, an important consideration in context of the research is use of referencing system to cite the information used in the research. The referencing system adopted in the current research is APA referencing style. Page 10 of 12 Schedule, Required Resources and Budget The following time, resources and cost are scheduled for the current research. ACTIVITY RESOURCES TIME SCHEDULE Cost Submission of Proposal Time, Human resources. By 22 December, 2014 No cost Finalization of Proposal Time, Human resources. 31 December, 2014 No cost Drafting Research Time, Human resources. 15 January, 2015 No cost Time, Human resources. 31 January, 2015 No cost Questionnaire Sampling the population of individual and companies No cost for soft copy, assuming 75 hard copy, assuming 0.25 Questionnaire time Time, Human resources. 28 February, 2015 fils per paper (0.25*75= 18.75 BHD) Data extraction Time, Human resources. 10 April, 2015 No cost Data processing Time, Human resources. 20 April, 2015 No cost Assessment and Time, Human resources. 30 April, 2015 No cost Introduction – Draft Time, Human resources. 15 May, 2015 No cost Literature Review - draft Time, Human resources. 31 May, 2015 No cost Methodology Time, Human resources. 10 June, 2015 No cost Findings and Evaluation Time, Human resources. 20 June, 2015 No cost conclusion and Time, Human resources. 30 June, 2015 No cost Time, Human resources 07 July, 2015 No cost evaluation Recommendations Submission and Monetary Page 11 of 12 Reference Anjum, D. B., Dhanda, S. K., & Nagra, S. (2012). Impact of Celebrity endorsed advertisements on consumers . Asia Pacific Journal of Marketing and Management Review, 1(2), 22-33. Balakrishan, L., & Kumar, S. C. (2011). Effect of Celebrity Based Advertisement on the purchase attitude of consumers towards durable products (a study with reference to the city of Chennai). World Review of Business Research, 1, 98-112. Choi, C. J., & Berger, R. (2009). Ethics of Celebrities and Their increasing influence in 21st Century Society. Journal of Business Ethics, 91, 313-318. Cooper, M. (1984). Can Celebrities really sell products? Marketing and Media Decisions, 19(1), 64-65. Doss, S. (2011). The transference of brand attitude: the effect on the celebrity Endorser. Journal of Management and Marketing Research, 23, 5-87. Erdogan, B. Z. (1999). Celebrity Endorsement: A literature review. Journal of Marketing Management, 15, 291-314. Friedman, H. H., & Friedman, L. (1979). Endorser Effectiveness by Product type. Journal of Advertisement Research, 19(5), 67-71. Jain, R. S. (2008). A study on the impact of Celebrity Endorsement on Indian Customers' Purchase Decisions. London: University of Nottingham. Lafferty, B. A., & Goldsmith, E. R. (1999). Corporate Credibility's Role in consumers' Attitudes and Purcahse Intentions When a High versus a low credibility endorser is used in the Ad. Journal of Business Research , 44(2), 109-116. Sola, O. A. (2012). The impact of Celebrity Endorsement on Strategic Brand Management. International Journal of Business and social Science, 3, 141-145. Till, B. D., & A., S. T. (1998). Endorsers in Advertising: The case of negative celebrity information. Journal of Advertising, 27, 67-82. Page 12 of 12