EFFECTIVENESS OF USING CELEBRITY ENDORSERS IN THE ADVERTISEMENTS OF PHILIPPINE-BRANDED MOBILE DEVICES

AS PERCEIVED BY THE STUDENTS OF CAVITE STATE UNIVERSITY CAVITE CITY CAMPUS: AN EVALUATION

An Undergraduate ThesisProposal Submitted to the Faculty

of Department of ManagementCavite State University

Cavite City Campus

In partial fulfillmentof the requirements for the degree

Bachelor of Science in Business Management major in Marketing Management

MARY NESTHER NATAVIOJULY 2013

Republic of the PhilippinesCAVITE STATE UNIVERSITY

Cavite City Campus

DEPARTMENT OF MANAGEMENT

An Undergraduate Thesis Proposal of: MARY NESTHER NATAVIO

Proposed Title: EFFECTIVENESS OF USING CELEBRITY ENDORSERS IN THE ADVERTISEMENTS OF PHILIPPINE-BRANDED MOBILE DEVICES AS PERCEIVED BY THE STUDENTS OF CAVITE

STATE UNIVERSITY CAVITE CITY CAMPUS: AN EVALUATION

A P P R O V E D

Panelist 1 Date Panelist 2 Date

Panelist 1 Date Panelist 2 Date

Adviser Date Technical Critic Date

FRINZE AL A. BERNAL VICTORIANO N. RODILDepartment Head Date RDE Coordinator Date

LILIBETH P. NOVICIO, PhD ___________ Campus Dean Date

STUDY ON THE IMPACT OF MOBILE PHONE PRODUCTS’ CELEBRITY ENDORSEMENTS ON THE BUYING BEHAVIOR OF STUDENTS OF CAVITE

STATE UNIVERSITY CAVITE CITY CAMPUS

Mary Nesther Natavio

An undergraduate thesis manuscript presented to the faculty of Department of Management, Cavite State University – Cavite City Campus, Cavite City in partial fulfillment of the requirements for graduation for the degree of Bachelor of Science in Business Management major in Marketing with Contribution No.___________________. Prepared under the supervision of Mr. Paulo Albaniel.

INTRODUCTION

Every day, we are bombarded by the advertisements of the products wherein

celebrities are present. This use of celebrity endorsers to promote consumer goods is a

marketing tactic that dates back to the mid-nineteenth century.

Roll said that a celebrity endorsement is a channel of brand communication in

which a celebrity acts as the brand’s spokesperson and certifies the brand’s claim and

position by extending his/her personality, popularity, stature in the society or expertise in

the field to the brand (Roll). So over the years, many companies have been investing on

many celebrities like Michael Jordan for Nike, Britney Spears for Pepsi, etc. that costs

millions of dollars. However, there are still who names celebrity advertisement as

ineffective and would deny its persuasiveness. But contrary to some marketers and even

some people’s statement, there is still an abundant evidence that indicates otherwise. As

mentioned in the study The Impact of Celebrity Endorsements on the Buying Behavior of

Rowan University Students Age 18-24 of Reginald Esangbedo from Rowan University,

recent studies show that sales for some brands increased by up to 20% after execution of

a celebrity endorsement campaign. And, according to Anita Elberse, associate professor

at Harvard Business School, “some companies have seen their stock increase by 0.25%

on the day the deal was announced” (Crutchfield). And in addition, in year 1984, after the

success of his blockbuster album, Thriller, Michael Jackson signed on as the new face of

Pepsi; this historic deal led to a spike in Pepsi’s sales and an increase in market share

(Herrera).

Currently, mobile phone products are one of the most popular products being sold

and innovated today. Statistics have been found that Philippines emerged as the fastest

growing market for smartphones in Southeast (philstar.com). By the data released by

GfK, one of the largest research companies in the world, it showed that smartphone take-

up rate in the Philippines reached 146 percent, faster than Thailand’s 140 percent,

Vietnam’s 118 percent and Indonesia’s 30 percent. The Ipsos Media Atlas Philippines

Nationwide Urban 2011-2012 survey also yield results that showed 30 percent of the

Philippine urban population nationwide saying that mobile phones are necessities in life

and 21 percent saying they plan to use their mobile phones more often

(technology.inquirer.net).

It is no wonder, with the statistics stated above, that the local mobile phone brands

Cherry Mobile, MyPhone and Torque are doing ways to widen much more their market

share in the country. And of the obvious strategies they have been doing is the use of

celebrity endorsers. As stated in the website of Cherry Mobile, their lineups of brand

ambassadors include John Lloyd Cruz, Kim Chiu, Robin Padilla, Willie Revillame, Anne

Curtis and Sarah Geronimo. Meanwhile Torque and MyPhone also have their own

endorsers. For Torque, Billy Crawford, Carla Abellana, Luis Manzano and Iya Villania

are representatives while Karthryn Bernardo, Daniel Padilla, Enrique Gil, Karen Reyes,

Ryan Boyce, Julia Montes, Martin del Rosario, Sam Conception, Janine Gutierrez,

Derrick Monasterio, Bea Binene, Barbie Forteza, and many more were the faces of

MyPhone. This use of such numbers of endorsers for the said product just shows that in

general, they do work.

This research would focus on the impact today of celebrities to the buying

behavior of the students with regards to the mobile phone products stated above. Do

celebrity endorsements really help the company that hired them? Do they really help in

purchase decision of the students of Cavite State University Cavite City Campus or not?

Statement of the Problem

The main purpose of the study was to analyze the impact of mobile phone

products’ celebrity endorsements on the buying behavior of students of Cavite State

University Cavite City Campus.

Specifically, the study aimed to answer the following questions:

1. What is the demographic profile of the students of Cavite State University

Cavite City Campus with regards to:

1.1. Age;

1.2. Gender;

1.3. Year and course;

1.4. Civil Status;

1.5. Weekly allowance/Monthly Salary/Income (if applicable)

2. What are the attributes of the celebrities that influence students on their

purchase decisions of mobile phones in terms of:

2.1. Credibility

2.2. Attractiveness

2.3. Public Image

3. Does celebrity endorsement have impact on the buying behavior of students of

Cavite State University Cavite City Campus in terms of:

3.1. Attention

3.2. Interest

3.3. Desire

3.4. Action

Importance of the Study

People see celebrities every day, whether in television or magazine. They often

set as the role model of others for they are being idolized by their appearance and by their

characters that is seen by the public. This study provides information about the impact of

mobile phone products’ celebrity endorsements on the buying behavior of students of

Cavite State University Cavite City Campus.

The study is mostly beneficial to the manufacturers and makers of mobile phone

products. They will be able to have a better idea of attributes that matters most to

consumers in the group being studied.

This study would be mostly beneficial to the future researchers, specifically for

the Cavite State University Cavite City Campus students as this manuscript was done by

one of their fellow students. This paper would serve as their reference towards better

study of the same or related field that they would like to pursue.

The study also will be significant to the present and future marketers and

advertisers. Knowing whether celebrity endorsement have an impact or not on the buying

behavior of the students will give them information if they should use it as one of their

advertising strategy.

The study will also benefit on the celebrities themselves. They will be able to

know the reasons why they are effective or not on their endorsements of their mobile

phones. Through this, they can make themselves better in their future endorsements and

as well as careful on their actions.

Lastly, the study is also beneficial to the consumers of the mobile phones.

Whether they themselves are affected by the endorsements or not, they will have a better

understanding as to why others are affected or not by such endorsements. Additional

knowledge will be acquired.

Objectives of the Study

This study was conducted to know the impact of mobile phone products’

celebrity endorsements on the buying behavior of students of Cavite State

University Cavite City Campus.

Specifically, the study aimed to:

1. Determine the demographic profile of the students of Cavite State University

Cavite City Campus with regards to:

1.1 Age;

1.2 Gender;

1.3 Weekly allowance;

1.4 Year, section and course;

1.5 Civil Status;

1.6 Job and monthly salary/income (if applicable)

2. Determine the attributes of the celebrities that influence students on their

purchase decisions in terms of:

2.1 Credibility

2.2 Attractiveness

2.3 Public Image

3. Determine whether celebrity endorsements have impact on the buying

behavior of students of Cavite State University Cavite City Campus in terms

of:

3.1 Attention;

3.2 Interest;

3.3 Desire;

3.4 Action

Research Hypothesis

Celebrities do not have any impact on the buying behavior of students of Cavite

State University Cavite City Campus. The students are not persuaded to buy the mobile

phone products that are endorsed by its celebrities.

Time and Place of Study

The study was conducted within the period from July 2013 to February 2014. The

study was mannered within the premises of Cavite State University – Cavite City

Campus. The participants are the students enrolled in Cavite State University Cavite City

Campus in the year 2013, first semester.

Scope and Limitation of the Study

The research focused on the impact of mobile phone products’ celebrity

endorsements on the buying behavior of students of Cavite State University Cavite City

Campus. In line with this, the data is limited only to the information provided by the

respondents (students) as well as the gathered data by the researcher. The mobile phone

products that are included in the study are the products of Cherry Mobile, MyPhone

Mobile and Torque Mobile phones which are locally assembled mobile phones.

Conceptual Framework

The study was made in order to know the impact of mobile phone

products’ celebrity endorsements on the buying behavior of students of Cavite

State University Cavite City Campus.

Figure 1 illustrates the conceptual framework on the relationship of the celebrity

endorsement to the buying behavior of students of Cavite State University Cavite City

Campus.

Figure 1. Research paradigm of the study regarding the impact of mobile phone

products’ celebrity endorsements on the buying behavior of students of Cavite State

University Cavite City Campus.

Demographic Profile of Cavite State University Students

Age Gender Year, section and course Civil status Job (if applicable) Weekly school

allowance/Salary

Impact of the celebrity endorsements of mobile phone products in terms of:

Attention Interest Desire Action

Attributes of Celebrity endorsers 1. Credibility2. Attractiveness3. Public Image

Buying behavior of students of Cavite State University Cavite City Campus

Recommendation

Theoretical Framework

Howard developed the first consumer decision-model in 1963 (Du

Plessis,Rousseau et al. 1991). This model was developed further in 1969 by Howard and

Sheth to become the ‘Theory of Buyer Behaviour’ (or Howard and Sheth Model)

(Howard and Sheth 1969). It provides “a sophisticated integration of the various social,

psychological and marketing influences on consumer choice into a coherent sequence of

information processing” (Foxall 1990 p.10). The authors interest was in constructing a

comprehensive model that could be used to analyse a wide range of purchasing scenarios,

and as such the term ‘buyer’ was preferred over ‘consumer’ so as to not exclude

commercial purchases (Loudon ANDDella Bitta 1993).

Input variables are the environmental stimuli that the consumer is subjected to,

and is communicated from a variety of sources. Significative stimuli are actual elements

of products and brands that the buyer confronts (Loudon ANDDella Bitta 1993), while

symbolic stimuli refers to the representations of products and brands as constructed by

marketers through advertising and act on the consumer indirectly (Foxall 1990) (Howard

ANDSheth 1969). Social stimuli include the influence of family and other peer and

reference groups. The influence of such stimuli is internalised by the consumer before

they affect the decision process.

Definition of Terms

To provide a better understanding on some of the terms used in this study,

the following were defined.

Celebrity. Refers to a widely known person

Mobile phone. A mobile phone (also known as a cellular phone, cell phone, and

a hand phone) is a device that can make and receive telephone calls over a radio

link while moving around a wide geographic area.

Endorse. To approve, support, or sustain.

Attractive. Pleasing to the eye or mind especially through beauty or charm

Local. Of or belonging to or characteristic of a particular locality or

neighbourhood

Product. A commodity offered for sale.

Credible. Capable of being believed.

Match. Be compatible, similar or consistent; coincide in their characteristics.

Brand. A name given to a product or service.

REVIEW OF RELATED LITERATURE

In this chapter, supporting information will be discussed. The importance of

having the demographic profile included in the study is explained. The celebrity

endorsement will be further explored with the use of several determinants. This section

describes which factors a celebrity should have to be a solid endorser. The factors

included in this paper are the Meaning Transfer Model, Match-Up Hypothesis, Source

Credibility Theory and Attractiveness. This section will also give some information about

the mobile industry in the country and as well as of the mobile phone brands used in the

study;CherryMobile MyPhone and Torque.

Demographic Profile

Demographics or demographic data refers to selected population characteristics as

used in government, marketing or opinion research, or the demographic profiles used in

such research. Commonly-used demographics include race, age, income, disabilities,

mobility (in terms of travel time to work or number of vehicles available), educational

attainment, home ownership, employment status, and even location. Distributions of

values within a demographic variable, and across households, are both of interest, as well

as trends over time. Demographics are frequently used in economic and marketing

research.

Marketers typically combine several variables to define a demographic profile. A

demographic profile (often shortened to "a demographic") provides enough information

about the typical member of this group to create a mental picture of this hypothetical

aggregate. For example, a marketer might speak of the single, female, middle-class, age

18 to 24 demographic.

Marketing researchers typically have two objectives in this regard: first to determine what

segments or subgroups exist in the overall population; and secondly to create a clear and

complete picture of the characteristics of a typical member of each of these segments.

Once these profiles are constructed, they can be used to develop a marketing strategy and

marketing plan. (Klauke, A. (2000) Coping with Changing Demographics an analysis of

the effect of changing demographic patterns on school enrollments and education.)

Source Credibility Theory

Credibility is “the extent to which the recipient sees the source as having relevant

knowledge, skills, or experience and trusts the source to give unbiased, objective

information” (Belch & Belch, 1994, page 189). Source credibility suggests that the

effectiveness of a message depends on the "expertness" and "trustworthiness" of the

source (Hovland, Janis, and Kelley, 1953; Sternthal, Dholakia, and Leavitt 1978). The

central goal of advertising is the persuasion of customers i.e., the active attempt to change

a modify consumers attitude towards the brands (Soloman, 2002). The creditability of the

advertisement is immense. Credibility is particularly important when people have a

negative attitude towards the brand and powerful arguments are needed to inhibit the

counter arguing and positively influence the attitude towards the brand.

Researchers and scholars in marketing communication have identified three

components as making up the credibility construct: knowledge or expertise,

trustworthiness, and appearance or attractiveness (Baker and Churchill, 1977; Joseph,

1982; Kahle and Homer, 1985; Maddox and Rogers, 1980).

Principle of Attractiveness

The concept of attractiveness does not only entail the physical attractiveness.

Attractiveness also entails concepts such as intellectual skills, personality properties, way

of living, athletic performances and skills of endorsers (Erdogan, 1999). Celebrities can

be attractive because they established for example great sport performances and people

have great respect for their achievement and therefore are attracted to them. Physical

attractiveness suggests that a celebrity determines the effectiveness of persuasion as a

result of that consumers wanting to be like the endorser and wanting to identify

themselves with that endorser (Cohen & Golden, 1972). On the other hand, there are

examples of celebrities who are considered less attractive, but do represent the image the

company wants to create and have. When the match-up between brand and celebrity is

present, attractiveness becomes less important and therefore the company might choose a

less attractive celebrity. There are huge numbers of physical attractive celebrities who

endorse a product. An example is David Beckham for the Armani brand. The majority of

people are attracted by David Beckham. Men want to be associated with the soccer player

and fashion man David Beckham, while woman are physically attracted by his

appearance because David Beckham always looks fashionable and has great athletic

performances. He is extremely credible and attractive and has a high degree of similarity;

people want to be like him.

The Meaning Transfer Model

Anthropologist and corporate consultant Grant McCracken (1989) created a three-

stage model to help explain meaning transfer as it relates to celebrity endorsement deals.

The effectiveness of the endorser depends on the meaning the celebrity is bringing into

the endorsements process and the brand. In the first stage in his model, the meaning

connected with the famous persons makes them the endorser to the product or brand.

Thus, the meanings attributed to the celebrity become associated with the brand in the

consumers. Secondly, in the consumption process, the customer acquires the brands’

meaning. The third stage of the model explicitly shows the importance of the consumer’s

role in the process of endorsing brands. It is the stage where the consumer acquires the

brand meaning after they purchased the product.

The Match-Up Hypothesis

The match-up hypothesis specifically suggests that the effectiveness depends on

the existence of a “fit” between the celebrity and endorsed brand (Till and Buster, 1998:

Khatri, 2006). The model emphasizes that the physical attractiveness of a celebrity

endorser will enhance evaluations of the products characteristics only if the

characteristics of the product “match-up” with the image conveyed by the celebrity.

Marketers must match the product or company’s image to the features of the target

market, and the personality of the celebrity, in order to establish effective messages and

the determinant of the match between celebrity and brand depends on the degree of

perceived association between brand (brand name, attributes) and celebrity image

(Khatri, 2006; Okorie, 2010). A seminal study in the development of this hypothesis was

conducted in 1973 by consumer behavior experts Rabindra Kanungo and Sam Pang.

Their study, which paired 8 male and female non-celebrity models with a selection of

products, found that the effect of the models varied depending on the product with which

they were paired (Till and Busler).

Celebrity Scandals

Previous celebrity endorsement and scandal studies (Edwards & Ferle, 2009; Fink

et al., 2009; Johnson, 2005; Money et al., 2006; Till & Shimp, 1998; White et al., 2009)

found that many firms worried whether a celebrity endorser’s scandal might have a

negative impact on their brand evaluations. Even though each study had different settings

and somewhat different results, these previous studies commonly found that consumer’s

brand evaluations, such as brand attitude, image, and purchase intention, were seriously

affected by the celebrity endorser’s scandal or negative information (Park, Phua, Xia

2011).

Association of the celebrity with a controversy or ill-behavior can cause negative

impact to the endorsements. Any act on the part of the endorser that gives him a negative

image among the audience and goes on to affect the brands endorsed. The brand, in most

instances, takes a bashing. Ann Green (2009), senior vice president at Millward Brown,

said, "In the past few years, we have seen a slight decline in the use of celebrity

endorsements and that is in part due to the risk associated as well as the necessary

investment."

The AIDA Model

Designed by Strong, AIDA model involves Attention, Interest, Desire and Action.

The recipient of a message moves from awareness to Interest and again to desire to reach

the level of satisfaction - the purchase of the product. The advertiser should draw the

attention of the consumers to create desire to buy the product. In the beginning of the

advertisement the attention of the potential customer should be drawn. Now, interest

should be aroused and held through the advertising process. Interest leads to desire.

Customers can satisfy their wants or desires by purchasing goods. The AIDA model is

adopted by advertisers indirectly or directly adopting different messages and media.

Mobile Phone Industry in the Philippines

More Filipino consumers are moving into the "mobile life" with increasing usage

of mobile devices and majority of them consider mobile phones their most important

piece of technology, the latest market survey by TNS showed. According to the "Mobile

Life 2013," a survey conducted by world's leading customized research company TNS

that looks into the mobile lifestyle and usage of 38,000 respondents globally including

500 Filipinos, technology is changing and shaping consumers' mobile usage and

expectations among Filipinos. The survey examines how people are interacting through

their mobile devices and takes a peek at their mobile lifestyle. Of the 500 sample survey

conducted for Metro Manila from November, 2012 to January this year, 64 percent of

respondents believe that a mobile phone is their most important piece of technology. This

is higher than the 54 percent average across 43 countries surveyed by TNS (Manila

Bulletin).

Also, based on the data posted at Wikipedia website, Philippines got the top 10

spot in the list of countries that have the most number of mobile phone in use. The

information seen on the said website was from BuddeComm, an independent research

and consultancy company, focusing on the telecommunications market and its role within

the digital economy.

MyPhone, Cherry Mobile and Torque

These three brands offer local mobile phones with high end features but cheap

price. Most of them started with 3 mobile phones in the beginning. But today, these

locally made mobile phones has been gaining wide acceptance in the country. Currently,

they these mobile phones has been releasing their newest product innovations like the

Iceberg of MyPhone, Omega HD 2.0 of Cherry Mobile and Droidz Quad of Torque that

can be compared with the internationally acclaimed phones.

MyPhone entered the mobile phone industry with only 3 models and 15 dealers

distributing its products nationwide during its first year, 2007. Currently, the company

holds more or less 20 mobile phones (mix of smartphone and feature phone).

(myphone.com.ph).

Cherry Mobile, one of the most popular among the three, started in 2009 as a

mobile phone brand with only four units to showcase. In just a span of three years,

Cherry Mobile now carries more than 100 handsets, and is most preferred local handset

in the entry-level market (cherrymobile.com.ph).

Torque, was launched in December 2008, Torque is one of the best-selling local

brands of cheap but trendy phones in the Philippines today as the features of Torque

phones rival those that high-end phones offer (torque.com.ph).

METHODOLOGY

This chapter deals about how the researcher conducted her study regarding the

impact of mobile phone products’ celebrity endorser to the buying behavior of the

students of Cavite State University Cavite City Campus.

Research Design

Descriptive method was used in the research. The kind of descriptive technique

that was used is the survey method where-in participants answered the questions

administered through interviews or questionnaires. After participants answered the

questions, researcher described the responses given.

The use researcher selected this method due to the reason that descriptive method

gives meaning to the quality and standing of facts that are going on. It also gives better

and deeper understanding of phenomenon on the basis of in-depth study of the

phenomenon.

Analytical method was also used in the study. The reason is to analyze the

information given by the participants.

Sources of Data

The researcher used the partial enumeration sampling procedure in selecting the

total number of respondents of her study. The population of the students of Cavite State

University Cavite City Campus was from the registrar office.

Table 1. Sample Size of Population of students of Cavite State University Cavite City

Campus

COURSE NUMBER OF STUDENTS

BS Business Management 75

BS Information Technology 118

BS Computer Science 24

BS Hotel and Restaurant Management 46

BS Elementary Education 20

BS Secondary Education and Elementary Education 46

Associate in Computer Technology 26

Basic Seaman Training Course 11

TOTAL 346

Primary data was used in the study. The data came from the prepared set of

questionnaires of the researcher. The secondary data were taken from sources such as

book, journal, internet, newspaper, magazines, and other thesis dissertations.

Data Gathering Procedures

The researcher went to the registrar office to have the total number of students in

the campus. It was posted there and available to all students and faculty members who

would need the information. After having the population of the campus, sample size of

the data were computed to have the total number of her respondents.

After getting the total number of her respondents, the researcher proceeds on

making the survey questionnaire. She went over on other thesis dissertations related to

her study, searched the internet and ebook files as reference, and as well as made her own

variation of questions to be used in the study. The question was then analyzed by her

instructor. After the instructor’s approval, the researcher went on to have her study. The

questionnaires and interview were also done personally.

The researcher also searched the internet, library, and other thesis dissertations

available online and in the campus library, books, and newspapers to have the secondary

data she used in her study. She compiled all the useful information she got and then

choose which is the most appropriate and much understandable for her study.

Data Analysis

The researcher used the descriptive method to obtain first hand data from the

respondents so as to formulate rational and sound conclusions and recommendations for

the study. Analytical method was also used for reasoning out the result and interrelations

of the impact of celebrity endorser to the buying behavior of students of Cavite State

University Cavite City Campus with respect to mobile phone products. Different

formulas were also used to interpret the results of the study such as percentage, mean,

weighted mean, etc. Such formulas will help in understanding the answers of the

participants which is very important in answering the researchers questions.

Statistical Treatment of Data

The following formulas were used for the study.

Percentage. It was used to determine quantitative relation to whole response.

Formula:

Where:% - percentage

f – frequency

n – number of respondents

Mean. It was used to determine the average result of each question on the

questionnaire.

Formula:

Where:

- the mean of the set of x values

- the sum of all x values

n - number of x values

Weighted mean. This was used to get the average of all questions and to

determine the degree of agreement of the respondents on each questions.

Formula:

Where:

- weighted mean

- the weight of x

- score of responses

- the sum of products of X and W

- the sum of the weight of X

Table 1.Conversion of Weighted Means into Verbal Interpretations.

Research Instrument

The questionnaire was prepared by the researcher. The study of Mr. Reginald

Esangbedo, The Impact of Celebrity Endorsements on The Buying Behavior of Rowan

University Students Age 18-24, serves as the basis of the questionnaires prepared.

Modifications were made to make the questionnaires more appropriate for the study. It

was divided into three parts wherein the first part was about the students’ information

which includes the demographic profile of the students like age, gender, course, year and

section, weekly allowance, job and monthly salary or income (if necessary). The second

part consists of the questions that are about the use of local mobile phone companies of

celebrities. Lastly, the part three of the questionnaire was about the attributes of celebrity

endorsers, the negative and positive.

Respondents will answer the questionnaires on the first and second part by

checking the appropriate space for that will serve as their answer, while the third part,

students will rate the questions with the ratings that will vary from 4 – 1. 4 will have an

Weighted Mean Verbal Interpretation

4.21 – 5.00 Excellent

3.41 – 4.20 Very Satisfactory

2.61 – 3.40 Satisfactory

1.81 – 2.60 Good

1.00 – 1.80 Fair

interpretation as strongly agree, 3 as agree, 2 as disagree and 1 as strongly disagree.