Impact of Brand Ambassadors On

Impact of brand ambassadors on Purchase behaviour of soft drinks

Impact of brand ambassadors on

Purchase behaviour of soft drinks

A dissertation submitted in partial fulfillment of the requirement of Postgraduate Degree in Master of Business Administration of Bangalore University

Submitted by:

KRISHNA RAO S

Register no. :

04 XQCM 6043

UNDER THE GUIDANCE OF

Prof. Nandini Vaidyanathan (Adjunct faculty-MPBIM)

2005 2006

MP Birla Institute of Management

Associate Bharatiya Vidya Bhavan

BANGALORE 560 001.

M P Birla institute of Management

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DECLARATION

I hereby declare that this research work embodied in this entitled dissertation Impact of brand ambassadors on Purchase behaviour of soft drinks has been carried out by me, under the guidance of

Prof .Nandini Vaidyanathan, Adjunct faculty, MPBIM, Bangalore

I also declare that this dissertation has not been submitted to any University or Institution for the award of any Degree or diploma.

PLACE: Bangalore

DATE:(Krishna Rao)


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PRINCIPALS CERTIFICATE

This is to certify that this report is the result of Dissertation work done by Mr. Krishna Rao S bearing Reg No 04XQCM6043, under the guidance and supervision of Prof Nandini Vaidyanathan. This has not formed a basis for the award of any other Degree/Diploma for any other University/Institution.

PLACE: BangaloreDr.Nagesh Mallavali

DATE:(Principal MPBIM)


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GUIDES CERTIFICATE

This is to certify that this report is the result of Dissertation work done by Mr. Mr. Krishna Rao S bearing Reg No 04XQCM6043, under my guidance and supervision. This has not formed a basis for the award of any other Degree/Diploma for any other University/Institution.

PLACE: BangaloreProf.Nandini Vaidyanathan

DATE:(Adjunct faculty -MPBIM)


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ACKNOWLEDGEMENT

I am grateful to many people whose timely help and guidance has helped me to conduct this research successfully.

I would also like to express my thankfulness to Dr.Nagesh Mallavalli, Principal M.P.Birla Institute of Management for giving me an opportunity to pursue this project.

I take immense pleasure to express my heart-felt gratitude to Prof. Nandini Vaidyanathan for her guidance and supervision.

I also wish to thank all those respondents who were patient enough in giving answer to my questionnaire.

Finally, I would like to extend my grateful thanks to all my friends and faculty members of MPBIM, Bangalore whose assistance has a lot to me personally for the completion of this research.

PLACE: Bangalore

DATE:(Krishna Rao)


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EXECUTIVE SUMMARY

The MBA course offered by the Bangalore University has its own unique syllabus which requires its MBA students to undertake a dissertation project during the fourth semester. The purpose of this dissertation project is to enable the students to appreciate and understand the nuances of the practical world vis--vis the theoretical input administered during regular academic sessions. This helps in creating Managers who are equipped with the experience of linking the theoretical inputs with those of practical exposure and come out with creative solutions / ideas in enhancing the business.

In partial fulfillment of MBA degree of Bangalore University, I took up a Dissertation project titled Impact of brand ambassadors on Purchase behaviour of soft drinks. India is soon adapting to marketing products with a blend of celebrity endorsement. Hence, I thought it would be a right time to take such a project and present the findings of what impact it has made. I have also specified in the end of the dissertation the road for further study, which other interested persons, can take up a project and augment to the findings of this project.


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CONTENTS

CHAPTER

1.

2.

3.

4.

5.

6.

7.

PARTICULARS

PAGE

No.

INTRODUCTION

12

RESEARCH DESIGN

16

CONCEPT OF BRANDING

20

IMPACT OF CELEBRITY ENDROSEMENT ON

30

THE OVERALL BRAND

SOFT DRINKS INDUSTRY: AN OVERVIEW

40

IMPACT OF BRAND AMBASSADORS IN SOFT

51

DRINK INDUSTRY

ANALYSIS AND INTERPRETATION

SUMMARY OF FINDINGS,

59

8.

9.

10.

106

RECOMMENDATIONS AND CONCLUSION

ANNEXURE115

BIBLOGRAPHY117


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LIST OF TABLES AND CHARTS:

CHART

TITLE

NO.

CHART SHOWING GENDER SPLIT UP

CHART SHOWING BRAND RECALL

CHART SHOWING COMPARISION BETWEEN TOTAL NUMBER OF RESPONDENTS AND THE PERCENTAGE OF PEOPLE WHO COULD ASSOCIATE IT WITH THE CELEBRITY

CHART SHOWNG BRAND AMBASSADOR AND CHANCES OF BUYING

CHART SHOWING CELEBRITY ENDORSEMENT AND CHANCES OF VIEWING A TELEVISION AD

CHART SHOWING CELEBRITY ENDORSEMENT AND CHANCES OF VIEWING A PRINT AD

CHART SHOWING CHANCES OF RECOMMENDING A SOFT DRINK BRAND IF ENDORSED BY THEIR FAVORITE CELEBRITY

CHART SHOWING CHANCES OF RESTRAINING A FRIEND/COLLEAGUE FROM BUYING A SOFT DRINK BRAND IF ENDORSED BY THEIR HATED CELEBRITY

CHART SHOWING CHANGE IN PURCHASE BEHAVIOUR AFTER A NOT-SO-FAVORITE BRAND AMBASSADOR STARTED ENDORSING THE BRAND




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CHART

TITLE

NO.


CHART SHOWING CHANGE IN PURCHASE BEHAVIOUR AFTER A NOT-SO-FAVORITE BRAND AMBASSADOR STARTED ENDORSING THE BRAND

CHART SHOWING PREFERENCE AMONG TWO BRANDS HAVING SAME ATTRIBUTES WHEN ENDORSED BY THEIR FAVORITE CELEBRITY

CHART SHOWING PREFERENCE OF PURCHASE OF A SOFT DRINK AFTER IT BECAME POPULAR DUE TO CELEBRITY ENDORSEMENT

CHART SHOWING ASSOCIATION OF RESPONDENTS BETWEEN BRAND AMBASSADOR AND STATUS SYMBOL

CHART SHOWING THE IMPORTANCE OF BRAND AMBASSADOR

CHART SHOWING MAJOR REASONS FOR THEIR SHIFT FROM THE PREVIOUS BRAND

CHART SHOWING ASSOCIATION AND EFFECTIVENESS OF AISHWARYA ROY ENDORSING COCA COLA

CHART SHOWING ASSOCIATION AND EFFECTIVENESS OF AAMIR KHAN ENDORSING COCA COLA


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CHART

TITLE

NO.

CHART SHOWING ASSOCIATION AND EFFECTIVENESS OF RAJYAVARDHAN RATHORE ENDORSING COCA COLA

CHART SHOWING ASSOCIATION AND EFFECTIVENESS OF SHAHRUKH KHAN ENDORSING PEPSI

CHART SHOWING ASSOCIATION AND EFFECTIVENESS OF KAREENA & PRIYANKA ENDORSING PEPSI CAFECHINO

CHART SHOWING ASSOCIATION AND EFFECTIVENESS OF JOHN ABRAHAM ENDORSING DIET PEPSI

CHART SHOWING ASSOCIATION AND EFFECTIVENESS OF MALIKA SHARAWAT ENDORSING 7UP

CHART SHOWING ASSOCIATION AND EFFECTIVENESS OF SANIA MIRZA ENDORSING SPRITE

CHART SHOWING ASSOCIATION AND EFFECTIVENESS OF TRISHA ENDORSING FANTA

CHART SHOWING ASSOCIATION AND EFFECTIVENESS OF ASIN ENDORSING MIRINDA

CHART SHOWING ASSOCIATION AND EFFECTIVENESS OF AKSHAY KUMAR ENDORSING THUMPS UP


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CHAPTER 1

INTRODUCTION


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INTRODUCTION

Today 'Celebrity Endorsement' has attracted immense debate on whether it really contributes to the brand building process or whether it is just another tool to make the brand more visible in the minds of the consumers. Although it has been observed that the presence of a well-known personality helps in solving the problem of over-communication that is becoming more prominent these days, there are few undesirable impacts of this practice on the brand. The theories like 'Source Credibility Theory, Source Attractiveness Theory and Meaning Transfer Theory' provide a basis on which the methodology of celebrity endorsement works and also explains how the process of the celebrity endorsement influences the minds of the consumers. Firms invest huge amounts as advertising expenditure for hiring the right celebrity. However there lies uncertainty with respect to the returns that the company might be able to garner for the brand. The issue of matching the values of the celebrity with the brand values is also very important, i.e. getting the right celebrity to endorse the right brand. Consumers perceive the brand as having superior quality because it has been endorsed by a credible source. This makes endorsement as one of the indictors of quality for any brand. Corporate credibility along with endorser credibility plays a significant role in the attitude of the consumer towards the brand and the advertisement respectively. On the other hand, the over popularity of the celebrity sometimes overshadows the brand. If the celebrity is involved in multiple endorsements, it tends to create confusion among consumers and hence negatively affects the perception of the advertisement and the brand. Hence, to say clearly


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Impact of brand ambassadors on Purchase behaviour of soft drinks whether the practice of celebrity endorsement impacts positively or

negatively to the brand still remains a debate

WHY BRAND AMBASSADORS

There is a management saying that when the product is good,

you no longer have to be a very good marketer. But the saying is soon becoming outdated. There are many product categories and many brands flooded in the market in each category. Hence attributes like quality, value for money alone doesnt count. There has to be an effective media to make the product reach towards the customer. The media here can be termed as the celebrity who endorses the product. When a product is being endorsed by a famous celebrity then it will result in better brand recall and better brand awareness. People also start associating their status symbol to that of the product that they consume and the celebrity associated with it. Hence in many ways the company can capitalize on celebrity endorsement. That is the reason why companies shell out millions to promote their product with the celebrities.

DOES CELEBRITY ENDORSEMENT REALLY WORK

Does celebrity endorsement really work? Theoretically yes, because the qualities associated with the endorser are associated with the brand and the brand therefore remains at the top of the consumer's mind. However one needs to realize that the impact of an endorser cannot be sustainable in all product categories and in all the stages of brand life cycles. It really depends upon the type of product. If it is a 'functional brand', then the product itself is the hero. Here any celebrity association with the brand


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Impact of brand ambassadors on Purchase behaviour of soft drinks without corresponding performance of the product will not be sustainable. While incase of 'image brands', like the categories of soaps, soft drinks, cigarettes etc., where it is difficult to distinguish between the products, celebrity endorsements help to distinguish between the brands at an emotional level. A research conducted by Synovate7, a global market research firm, revealed that 47% people would be more likely to buy a brand that was endorsed by their favorite celebrity.

Pepsi Co. has used a variety of celebrities including Aishwarya Rai, Hrithik Roshan, Amitabh Bachchan, Kareena Kapoor, Rahul Khanna, Fardeen Khan, Sachin Tendulkar etc. Amongst advertisements featuring celebrities, Pepsi tops the heap with the highest recall of 70%, while arch rival Coke is lower across all markets with 52% recall. This proves that Pepsi has really exploited the use of celebrities in their advertisements and has worked.

Whether Celebrity endorsement has a positive or a negative impact on the brand is a debate that is open to interpretation. But till the time the corporate world continues to foot fancy bills of celebrity endorsers and till consumers continue to be in awe of the stars, the party is not likely to break up. And in the chapters to come it can be learnt more on this grounds and at the end interpretation is on impact of brand ambassadors towards their perception and purchase behavior of soft drinks.


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CHAPTER 2

RESEARCH DESIGN


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PROBLEM STATEMENT

To study the impact of celebrity endorsement towards the purchase behavior of soft drinks.

On the basis of this problem statement, the following specific objectives have been crystallized.

OBJECTIVE OF THE RESEARCH

To identify whether celebrity endorsement has any impact in the purchase behavior of soft drinks.

To find out the importance of celebrity endorsement in the promotion of a product.

To find out whether celebrity endorsement constitutes for brand recall and brand awareness.

To identify the fissures and faults in celebrity endorsement.

RESEARCH DESIGN

The research study first examines the various facets of celebrity endorsements and the impact on the purchase behavior of the soft drinks. A thorough literature survey has been made in light of all the things surrounding the celebrity endorsement. Then a survey is taken among the general public with a sample to arrive at several conclusions regarding the impact of brand ambassadors towards the purchase behavior of soft drinks.


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SAMPLE SIZE

The chosen sample size is of 100 consumers of soft drinks between the ages 17-30.

SAMPLE DESCRIPTION

The data taken for study is a convenient sample representing the youth of today, so that a proper conclusion can be reached. The target is youth aged between 17-30

INSTRUMENTATION TECHNIQUES

The questionnaire technique is used for the survey and the reasons for using this approach are

It covers wide area

It is not an expensive affair

Original data could be obtained

It is free from all bias

Easy to tabulate and understand

COLLECTION OF DATA

Data has been collected from both primary and secondary sources. Primary data is collected by the questionnaires and personal observation. Secondary data is collected by the referring to several journals, books, internet, magazines, etc,


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LIMITATION

The data is restricted to Bangalore

Time constraint

Results are purely based on primary information

The analysis and interpretation is made under the

assumption that data are accurate


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CHAPTER 3

CONCEPT OF BRANDING


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BRANDING

BRAND

A brand is a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors.

REVOLUTION OF THE CONCEPT OF BRAND:

INCUBATION OF THE CONCEPT OF BRAND EQUITY:

The 1980 marked a turning point in the conception of brands. Management came to realize that the principal asset of a company was in fact its brand names. A lot of writing followed this incubation of the idea of Brand Equity, or the financial value of the brand. In fact, the emergence of brands in activities, which previously had resisted or were foreign concepts e.g. in Industry, banking, the service sector etc vouched for the new importance of brands. This is confirmed by the importance that so many distributors place on the promotion of their own brand.

A strong brand is comprised of:


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Image visual perception that supports brand and consumer preference

Benefits consequences of your branding

Differentiation your distinction from the competition

Quality impacts customer satisfaction, return business, growth

Pricing a component of value and suggestion of quality

Distribution availability implies (non)exclusivity

Presence visibility in media leads to brand recognition

Brands vary in the amount of power and value they have in the market place. David Aaker distinguished five levels of customer attitude towards their brand, from lowest to highest namely:

Customers will change brands, especially for price reasons.

Customer is satisfied. No reason to change the brand.

Customer is satisfied and would incur costs by changing brand.

Customer values the brand and sees it as a friend

Customer is devoted to the brand.

Brand equity is highly related to how many of a brands customers are in classes 3, 4 and 5.Moreover it is also, related, according to Aaker, to the degree

Brand name recognition

Perceived quality of brand

Strong mental and emotional association

Other assets such as patents, Trademarks and emotional associations. Brand Equity is therefore an intangible asset i.e. it cannot be seen, tasted, heard or smelled before it is bought.


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Example:

According to a study conducted in 2006, about 84 percent of the market value of ten of the leading FORTUNE 500 companies was attributed to intangible assets. Similarly an indicative analysis by the agency Price Waterhouse Coopers, of listed companies with a turnover of more than Rs. 100 crores, identified 25 companies which in todays market command a market value which is more than 4.5 times the book value of tangible assets.

A Brand is more than a Product

Chart: Chart showing that a Brand is more than a product

BRANDING AND BRAND ASSET MANAGEMENT

Brand management is still in a nascent stage even though brands are a business asset. At present, in many cases, the tendency is to manage products, which happen to have a name. Yet brand management involves


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Impact of brand ambassadors on Purchase behaviour of soft drinks different and specific reasoning and approaches. Till date the management books and marketing bibles have not yet assimilated the full implication of the brand revolution. Marketing books focus on the process of launching new products, when marketing the brand is considered merely as a tactical and final decision, which is developed through communication such as advertising, packaging and

the logo. Yet the reality of the situation is very different. From now on companies will be faced with the strategic issues of whether or not growth should come about through existing brands by developing their sphere of activity or through new brands. Classic strategy models talk about product portfolios, whereas in reality companies have

to manage their brand portfolios. Several companies have product managers but few have brand managers. This may cause problems in so far as more and more brands are being extended to more and more differentiated products, resulting in the delegation of the management of value to several decision centers. In the medium term this may diminish brand equity because decisions are taken without any integration of the decision centers. The brand is not the product but it gives the product meaning and defines its identity in both time and space. Companies are discovering that this brand equity has to be managed, nourished and controlled.

THE EVOLUTION OF THE CONCEPT OF BRAND

IDENTITY

BRAND IDENTITY

It is the common element sending a single message amid the wide

variety of its products, actions and slogans.


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Brand identity is a recent concept; however researchers have already delved into the concept of corporate identity by the late 80s so to simply put it

CORPORATE IDENTITY

It is what helps organization, or a part of it; feel that it truly exists and that it is a coherent and unique being, with a history and a place of its own, different from others. Thus we can infer that an identity means being true to yourself, driven by a personal goal that is both different from others and resistant to change. Thus a brand identity will be clearly defined once the following questions are answered:

What is the brands particular vision and aim?

What makes it different?

What need is the brand fulfilling?

What is its permanent nature?

What are its values?

What are the signs, which make it recognizable?

This type of official document would help better brand management in the medium term, both in terms of form and content, and so better address future communication and extension issues.

Why speak of identity and not image?

Brand image is on the receivers side. Image research focuses on the way in which certain groups perceive a product, a brand etc. The image refers to the way in which these groups decode all of the signals emanating from the product, services and communication covered by the brand. Identity is on the senders side. The purpose in this case is to specify the brands meaning, aim and self-image. Image is both the result and


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Impact of brand ambassadors on Purchase behaviour of soft drinks interpretation thereof. In terms of brand management identity precedes

image. Before projecting an image to the public,

we must know exactly what we want to project.

Branding is raising new questions for managers:

How many brands do we need?

How do we manage our brand portfolio?

What extensions can we give the brand and which products and services could and should these encompass?

Into what areas should we not extend the brand even if you expect it to sell?

Going too far may weaken brand equity. How do we manage brands over time and keep them up to date, as technology, products and customers change?

How do we change while still staying the same?

How do we manage coherently and benefit from the synergy of a range of products sold under a single brand?

How do we optimize image in the relationship between products and their brand?

How far can a brand be extended geographically?

Does it have the potential to become a homogeneous global brand in all countries?

Several companies have the same name as their brand (e.g. Coca-cola, Pepsi, etc) so what is the difference between managing a brand image, a corporate image and an institutional image?

Given that brands have a value, how can this be measured so as to survey and control it?


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Impact of brand ambassadors on Purchase behaviour of soft drinks xiii. Should it be included on the balance sheet to indicate its true economic value to shareholders, investors and financial partners?

These are some very crucial questions that requires significant amount of attention from the brand management perspective, for a long time the answers to these questions were found intuitively and the decisions made on a trial and error basis. However, now these questions are addressed based upon some latest strategic models that have evolved based

upon continuous and persistent research that continues to be undertaken in this field. Another impediment to brand management is that too often brands are examined through their component parts: the brand name, its logo, design or packaging, advertising or sponsorship, the level of image and brand awareness and a more recently evolved concept of financial valuation. Real brand management, however, begins much earlier, with a strategy and a consistent, integrated vision.

BUILDING AN EFFECTIVE BRANDING STRATEGY

What constitutes a brand strategy?

Organizations undertake a branding process yet the net outcome closely resembles a public relations face-lift. Why does this occur? One possibility might be the framework that guides the process. Another may simply be the viewpoint of the agency or consultant that is employed. In any case, valuable money is spent each year on brand strategy endeavors and frequently the outcome does not yield the tangible results organizations are seeking.


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What is a Branding Strategy?

David Aaker implies the objective of a branding is to create a business that resonates with customers Aaker also suggests this process must involve an analysis from three perspectives: customer, competitor, and self analysis. Another expert suggests a Brand strategy is the process whereby the offer is positioned in the customers mind to produce a perception of advantage (David Arnold, 1992).

OBJECTIVES OF THE BRAND STRATEGY:

It is imperative to understand that branding is not about getting your target market to choose you over the competition, but it is about getting your prospects to see you as the only one that provides a solution to their problem.

The objectives that a good brand will achieve as a result of branding excercise:

Deliver the message clearly

Confirms your credibility

Connects your target prospects emotionally

Motivates the buyer

Concrete User Loyalty

To succeed in branding the organization must understand the needs and wants of their customers and prospects. You do this by integrating your brand strategies through your company at every point of public contact.


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The brand must reside within the hearts and minds of customers, clients,

and prospects. It is the sum total of their experiences and perceptions,

some of which you can influence, and some that you cannot.

A strong brand is invaluable as the battle for customers intensifies day by day. It's important to spend time investing in researching, defining, and building thier brand. After all, the brand is the source of a promise to your consumer. It's a foundational piece in your marketing communication and one you do not want to be without.

For example, in case of soft drinks the market is flooded with brands and an organization must spend time investing in researching, defining, and building their brand


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CHAPTER 4

IMPACT OF CELEBRITY

ENDROSEMENT ON THE

OVERALL BRAND


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IMPACT OF CELEBRITY ENDROSEMENT ON THE

OVERALL BRAND

Celebrity endorsements are an omnipresent feature of present day marketing. The modern corporation invests significant amounts of money to align itself and its products with big-name celebrities in the belief that they will (a) draw attention to the endorsed products/services and (b) transfer image values to these products/services by virtue of their celebrity profile and engaging attributes. The consumer of today is becoming smarter and takes well informed decisions

He is not easily swayed by the charms of his favorite celebrity be it a film star or a sportsperson. This makes Marketing Communications using celebrity endorsements all the more challenging.

Since this field is very vast, the paper looks at important factors driving the celebrity's impact on the brand such as Attribute Matching, Celebrity Power, Effect of Cardinality, Choice of Media Vehicle, Brand Risks posed by Celebrities and the ultimate fight of Brand Vs Celebrity

Before we draw conclusions on how celebrity endorsements impact the brand, some important questions that mandate an answer are: -

How do you quantify the effectiveness of a celebrity endorsement? What metrics determine the success of a celebrity endorsement? What parameters do you consider?


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INTRODUCTION

Celebrity endorsement has been recognized as "a ubiquitous feature of modern marketing". Celebrity appeal is prevalent as a method of persuasive communication. There is so much clutter in the market that companies are constantly looking at ways to cut through it. Corporates believe celebrity endorsements are the easy way out, with their mass appeal. However there are chances of their Backfiring if there is a basic mismatch between the star personalities and the brands in question.

FACTORS DRIVING THE CELEBRITY'S IMPACT ON

THE BRAND

ATTRIBUTE MATCHING

Impact of the celebrity used on the brand will be determined by the process chosen to select the celebrity for the concerned product. The kind of celebrity chosen will depend on the objective of endorsing and the kind of product. Attribute matching is one of the most important factors when it comes to choosing a celebrity for the above objectives and also has a positive or negative impact on a brand.

A) OBJECTIVE OF ENDORSING

Breaking the clutter: When the objective is to break the clutter among the deluge of advertisements, the impact on the brand will depend on the kind and quality of the message conveyed to the consumer. The celebrity is used to garner attention.


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To match the attributes:

Endorsement for this particular reason might give you the brand recall hence having significant positive impact on the brand. The celebrity should be used to catch the attention of the viewer and associate him/her with the brand.

Celebrity used to represent or pass on attributes: The use of celebrity in such a situation should be linked with the objective and the strategies of the organization promoting the product. If the objective is to portray leadership then the celebrity chosen should reflect the same or else there would be no impact or possibly a negative impact on the brand.

Example:

When a spotsman,lets say Dhoni who is believed to consume 2 liters of milk everyday and who is so conscious about health endorses any healthy drink then it makes more sense.

To achieve the objectives of the communication, attribute match-up should be done with great care. The steps are as below: -

clearly define the objective

Identify attributes of the product and the celebrity

Match the attributes of the product Vs personality and decide which attributes need to be transferred from the celebrity to the product

Decide the right media for the communication


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Design the right kind of advertisement considering the factors like exposure of the celebrity, his image, other brands endorsed and attributes already exploited.

B) KIND OF PRODUCT

Apart from objective the kind of product is also important when it comes to matching the right attributes. For example: If it's a high involvement product, the right message from the celebrity will have a significant impact and a consumer might wait for sometime if the product is not available readily. On the other hand if it's an impulse product an attractive celebrity might play a big role depending upon the availability of the brand at the outlet when the consumer wants to buy it. So it becomes the integrated work of a supply chain to support the positive affects of the celebrity endorsement.

CELEBRITY POWER

Tom et al. (1992) suggest that celebrities possess different types of social powers - expert power, referent power, legitimate power, coercive power and reward power - that enable them to have an effect on consumers. Apart from that a celebrity attains a power to influence the consumers by his/her various attributes. We shall classify these attributes into: -

Source Credibility

Source Attractiveness

Source credibility: It is the extent to which the recipient perceives the source as having relevant knowledge and/or experience and therefore trusts the source to give unbiased information. From a study by Hovland


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Impact of brand ambassadors on Purchase behaviour of soft drinks and Weiss, credibility has two components (refer exhibit) has two components that effect believability and persuasiveness: -

ExpertiseTrustworthiness

Source Attractiveness: Society throughout the ages has determined that particular features of persons are attractive. It is therefore to be expected that physical attractiveness as a source attribute would affect the receptivity of the message. Two discrete elements of source attractiveness are generally identified by researchers:

Likeability

Similarity.

Trustworthiness, likeability, attractiveness and personality of the celebrity endorser play an important role in attracting attention to both the endorsement and the brand, fulfilling a requirement in successful advertising. Once attention had been gained, other source characteristics could come into play and have a more persuasive impact on the audience. The source characteristics with the greatest impact on consumers' intention to purchase were those of credibility and expertise.

THE EFFECT OF CARDINALITY

The following observations can be made regarding number of celebrities and brands endorsed:

1 Celebrity 1 Brand - The association between the two would be high but this also has a flipside as in over dependence on one celebrity for brand success


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1 Celebrity n Brands - The audience may perceive the celebrity to possess little focus and may not be able to recall the combination. But different brands may be harnessing different attributes of the celebrity, in which case it is either baneful or beneficial to the celebrity depending on what effect overexposure has on him. This case would again lead to confusion in the minds of the audience who may fail to correlate the advertisement with the brand.

The effectiveness of the celebrity endorsement in such cases will depend on how effectively the advertiser correlates and projects the attributes of the celebrity and passes on to his product. From a study (Tripp, Thomas and Carlson, 1994) it was observed that a celebrity who endorses more than one brand is generally perceived to be more credible with the consumers than a celebrity who endorses only a single brand but on the other hand the perceived likeability of a celebrity who endorses multiple brands is lower than celebrity who endorses only one brand. On the other hand, consumers might become skeptical and accuse them of slack endorsements. So this tradeoff should be handled by the advertiser efficiently and effectively.

n celebrities 1 Brand - The brand is at an obvious advantage if all the n celebrities are in the scene simultaneously. But sometimes these celebrities need to have a strong interlinking factor amongst them as in "The Indian Cricket Team" endorsing Samsung, "Film stars with Youth Appeal" Preity Zinta, Saif Ali Khan and Rahul Khanna for Lays. Nevertheless, multiple celebrities in distinct active endorsements may lead to low recall among the targets. According to the attribution theory (Kelley, 1967), people assign causality to events on the basis of either their own behavior or the behavior of others. In the context of celebrity


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Impact of brand ambassadors on Purchase behaviour of soft drinks endorsement advertising, consumers might ask whether an endorser recommends a product because he/she actually believes the positive characteristics of the product (an internal attribution) or because he/she is paid for endorsing it (an external attribution). Since consensus is one of the attribution cues, using multiple celebrities may create a consensus and help advertisers to positively affect consumer perception. A brand has a wide range of consumers and sometimes the use of multiple celebrities is needed to cover the whole target audience, though it must be made sure that each celebrity's values reflects core brand values. Studies have shown that multiple celebrities help marketers reduce audience boredom which may be caused by a single celebrity. However it should be assured that "each and every celebrity possesses compatible meanings that are sought for brands".

CHOICE OF MEDIA VEHICLE

The effectiveness of the celebrity depends to a great extent on the media vehicle. Celebrities are of various types and are brands in themselves. If the celebrity is a model, in which case "looks" are the attention grabbers, then the print medium would probably be almost equally effective as television. But if the celebrity's character is to be portrayed, wherein audience identify with the celebrity not by mere looks but by talent or ideology, as in a sportsperson or a social activist, it makes more sense to project him or her on television to leverage on maximum impact

BRAND RISKS POSED BY THE FAMOUS

The celebrity may cease to denote the same set of brand values after a point in time. Cases are aplenty wherein a celebrity endorsing a brand has been accused of nefarious activities. To quote a few instances,


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Salman Khan (Thums Up), OJ Simpson (Hertz car) and Mike Tyson (Pepsi) were all subject to allegations. They were not only accused of tarnishing their brand image, but also that of the product.

A contradictory testimony to this conventional belief is Martha Stewart Living Omnimedia (MSO). When people had started to tire of Martha's "perfect" home-maker image and the Company turnover was plummeting, the imprisonment of Martha rejuvenated the brand MSO and culminated in a shining stock value. This leaves us to ponder whether infamy spells bad omen for a brand or if it depends on the mindset of the target population.

However such surprises are few in number. There have been plenty of reminders for marketers in recent months of the potential danger of aligning their brand with a personality. Halos are easily tarnished and golden boys - and girls - can slip up and instantly lose their sparkle. While things do not always turn out too badly for the person concerned, the brands they were endorsed by can find it harder to make people forget their alliance. To avoid some of these risks, some Companies safely go in for cartoon characters or dead celebrities.

Another risk is the transference of unintended meanings to a product through a celebrity endorsement. Celebrities and products have numerous attributes, and there may be congruity on certain ones and incongruity on others. In the selection of a celebrity endorser, one has to consider not only the product attributes that are to be established, but also the broader meanings associated with an endorser. Although the endorser may have certain attributes that are desirable for endorsing the product, he or she may also have other, even more closely associated


37

Impact of brand ambassadors on Purchase behaviour of soft drinks attributes that are inappropriate for a specific product For instance, marketers of bath towels who want to promote only the luxurious and sexy nature of their towels may be indifferent to the selection of Madonna or Christie Brinkley as an endorser. However, using this narrow definition may result in the selection of Madonna, which would also transfer a low-class meaning to the product. The totality of the endorser's symbolic meaning should be considered.

As a Concluding remark, Celebrity endorsements may not always give a positive return on expectation. Product endorsements for international brands must be managed cautiously. Also, using celebrities has been commoditized now to the extent that the same people are chased. Quite often, having a celebrity in an advertisement in a meaningless fashion without developing a clear strategy leads the celebrity to act as a vampire to the brand proposition so that the advertisement is remembered; not the brand name. The larger question is how to make best use of celebrity advertising. People who have done this successfully such as Lux using film stars in India and Nike using well-known American sportsmen are two great examples wherein the celebrities act as a support to the main advertising communication. No wonder these two examples use celebrity endorsement as a core part of their advertising and the brand has grown in importance and improved in terms of its quality over time. Celebrity Endorsement should be a strategic decision taken after weighing all the risks associated with it.


38


CHAPTER 5

SOFT DRINKS INDUSTRY:

AN OVERVIEW


39


A soft drink is a drink that does not contain alcohol, as opposed to hard drinks, that do. In general, the term is used only for cold beverages. Hot chocolate, tea, and coffee are not considered soft drinks. The term originally referred exclusively to carbonated drinks, and is still commonly used in this manner

MAJOR SOFT DRINK BRANDS:

Of late, there will be almost very few people who dont know brand names like Coca Coal or Pepsi. The soft drinks industry is cluttered with many brands and the companies are struggling to maintain their market share. They resort to several marketing strategies to entice the customers towards them. Some of the famous soft drink brands are

Coca colaFanta

MirandaThumbs up

Pepsi7UP

SpriteFanta

MirandaThumbs up

There has been a war going on between these brands and several strategies has rather confused consumers to buy a brand rather than making him loyal towards the brand. As a result brand loyalty is soon fading among the brands available in the market and he is loyal to more than one brand.

To retain a customer the companies undertake several strategies like pricing strategy, advertising strategy, etc.But one welcome trend that


40

Impact of brand ambassadors on Purchase behaviour of soft drinks companies have seen is that the volumes is increasing and as a result the market penetration is going up.

CHINA VERSUS INDIA: SOFT DRINK INDUSTRY

China is the bigger market. And the beverage brands operating here are doing better in China in terms of profitability. And just last year, the growth rate in China has been higher than India. China has a national policy on FDI, and all the provinces get right in line. The market looks spectacular. The economy looks spectacular. It looks like a clean New York transplanted into China many times over.

It will be infact a pipe dream for India to reach that level. But not that it is Unacheivable.The scene is so, because we have a democratic regime and everything has to go through a consensus process. Also, our core infrastructure is aged, and we can replace all of them if there is enough political will. But the growth of India will catch up with that of China in the next two or three years. The administration now is rolling out the welcome mat for FDI and that will yield in the long term.

MARKETING STRATEGIES OF SOFT DRINK BRANDS:

Creating a brand is a time-consuming process because it involves organizational commitment and orchestrating the resources in the right manner and channel for building the brands image in the mind of consumers. In other words, branding creates predictability. Its about creating a relationship with consumers. What the brand does today should help you anticipate what it will do tomorrow.


41


Promotion, on the other hand, is a short-term phenomenon. ACT NOW is the definition of sales promotion; tomorrow will be too late!

Whether it is price reduction, larger packaging, a tie-in with another product, a coupon or some other incentive, it is temporary. Does this mean that you shouldn't run promotional campaigns? What should happen is this: Promotions should help build a strong brand.

Building a brand works towards building a strong consumer base. Think beyond coupons, giveaways and free trials! Sales promotions can attract a different audience and encourage people to try a product for the first time. You have the opportunity to influence peoples perceptions of a brand, and then, through on-going activity, retain those customers.

Marketers must recognize where sales promotions fit into the marketing mix and what goes beyond the promotion. There should be a synergy between brands and promotions. For example, when the cola war was intense and the market was cluttered with many soft drink brands the companies came up with pricing strategy, which is reducing the price to Rs 5, it worked. It gave good results to the companies.

The companies which posses the brands have understood that an ideal promotion should result in increasing short-term sales and building the brand in the long run. There is nothing as such a winning promotion, its all how the people perceive it. For example, many of the marketers comment that the concept of Pepsi TV in which Pepsi Advertises itself recommending people to consume Pepsi while watching television seems ridiculous. But some people like it. Hence its all perception.


42


The companies keep changing their strategies to suit the consumers

mind. Brand ambassadors, in that aspect come handy for brand recall and

Brand Awareness.

PESTICIDE ISSUE: THE DEATH KNELL FOR SOFT

DRINK BRANDS

The following is the report released by Centre for Science and Environment alleging that there is pesticide content in soft drinks which rocked the nation completely.

After bottled water, its aerated water that has plugged the purity test. In another expos, Down To Earth has found that 12 major cold drink brands sold in and around Delhi contain a deadly cocktail of pesticide residues. The results are based on tests conducted by the Pollution Monitoring Laboratory (PML) of the Centre for Science and Environment (CSE). In February this year, CSE had blasted the bottled water industrys claims of being pure when its laboratory had found pesticide residues in bottled water sold in Delhi and Mumbai.


43


This time, it analyzed the contents of 12 cold drink brands sold in and around the capital. They were tested for organochlorine and organophosphorus pesticides and synthetic pyrethroids all commonly used in India as insecticides.

The test results were as shocking as those of bottled water.

All samples contained residues of four extremely toxic pesticides and insecticides: lindane, DDT, malathion and chlorpyrifos. In all samples, levels of pesticide residues far exceeded the maximum residue limit for pesticides in water used as food, set down by the European Economic

Commission (EEC). Each sample had enough poison to cause in the long term cancer, damage to the nervous and reproductive systems, birth defects and severe disruption of the immune system.

WHAT WE FOUND

Market leaders Coca-Cola and Pepsi had almost similar concentrations of pesticide residues. Total pesticides in all PepsiCo brands on an average were 0.0180 mg/l (milligramme per litre), 36 times higher than the EEC limit for total pesticides (0.0005 mg/l). Total pesticides in all Coca-Cola brands on an average were 0.0150 mg/l, 30 times higher than the EEC limit.

While contaminants in the Dil mange more Pepsi were 37 times higher than the EEC limit, they exceeded the norms by 45 times in the Thanda matlab Coca-Cola product.

Mirinda Lemon topped the chart among all the tested brand samples, with a total pesticide concentration of 0.0352 mg/l


44


.

The cold drinks sector in India is a much bigger money-spinner than the bottled water segment. In 2001, Indians consumed over 6,500 million bottles of cold drinks. Its growing popularity means that children and teenagers, who glug these bottles, are drinking a toxic potion.

PML also tested two soft drink brands sold in the US, to see if they contained pesticides. They didnt.

The question, therefore, is: how can apparently quality-conscious multinationals market products unfit for human consumption?

CSE found that the regulations for the powerful and massive soft drinks industry are much weaker, indeed non-existent, as compared to those for the bottled water industry. The norms that exist to regulate the quality of cold drinks are a maze of meaningless definitions. This "food" sector is virtually unregulated.

The Prevention of Food Adulteration (PFA) Act of 1954, or the Fruit Products Order (FPO) of 1955 both mandatory acts aimed at regulating the quality of contents in beverages such as cold drinks do


45

Impact of brand ambassadors on Purchase behaviour of soft drinks not even provide any scope for regulating pesticides in soft drinks. The

FPO, under which the industry gets its license to operate, has standards

for lead and arsenic that are 50 times higher than those allowed for the

bottled water industry.

Whats more, the sector is also exempted from the provisions of

industrial licensing under the Industries (Development and Regulation) Act, 1951. It gets a one-time license to operate from the ministry of food processing industries; this license includes a no-objection certificate from the local government as well as the state pollution control board, and a water analysis report. There are no environmental impact assessments, or sitting regulations. The industrys use of water, therefore, is not regulated.

It is clear that the regulations have been designed in total disregard for public health. But what is unfortunate is that the global players two giant corporations, who swear by the principles of corporate responsibility and global standards have been caught in the act, taking


46

Impact of brand ambassadors on Purchase behaviour of soft drinks advantage of the weak and nonsensical regulatory standards in India. Or, may we say, by fixing the standards to compromise our health.

The above given is the complete report given by CSE and as a result of which there were several controversies regarding whether to allow soft drinks in our country to continue or not was triggered. The sale of carbonated water (soft drinks) was badly hit.

COLA WARS

Cola Wars is the term used to describe the campaign of mutually-targeted television advertisements and marketing campaigns between Coca-Cola and Pepsi-Cola.

CHART SHOWING MARKET SHARE

OF SOFT DRINKS

Coca-Cola

1%

2%

Pepsi

36%

Regional Brands

others

61%

Whether its business or product strategies or the critical distribution game plan, the arch-rivals are taking roads that do not meet.

Of late, in one of the interviews with Business Line Indra Nooyi, the president and CFO of PepsiCo commented The cola wars are alive and kicking. That's what makes us both great companies. True to the words of Indra Nooyi, the cola wars have stayed for decades and several strategies were implemented by both the companies to woo customers.


47


Global cola war is age old. They both have been fighting tooth and nail to gain the market share. Some people have even compared that to two kindergarden school children fighting it out in the road. Lets come to another phase of the coal wars. With the sweltering April-July summer months now under way in India, the country's version of the global cola wars, featuring perennial combatants PepsiCo and Coca-Cola, is heating up fast. With health consciousness on the rise, the health-drinks business has picked up as well, with several players, including the aforementioned

colagiants,wadingintothefray.

One of the most visible battle fronts in India's cola wars is celebrity endorsements, and Pepsi and Coke have rolled out the biggest categories of celebrities in the country, film stars and cricketers, signed up as brand ambassadors at humongous cost. Their well-known faces are splashed on billboards and newspaper pages, even as television spots roll out by the dozens featuring the stars. The Coke-Pepsi rivalry is so intense that there is a fight to win ad space at every shop, bus-stop stall and roadside eatery. Each transnational company marks out its territory in either bright red or blue, the colors associated with the two brands.

Top film stars Kareena Kapoor, Shahrukh Khan, Aishwarya Rai, Amitabh Bachchan, Rani Mukherjee, Priyanka Chopra, Akshya Kumar, Aamir Khan and cricketers Rahul Dravid, Sachin Tendulkar, Virender Sehwag, Irfan Pathan and many more have been offered contracts that are sometimes worth more than their earnings from films or cricket. According to reports, Aamir Khan's contract for Coca-Cola is worth more than $4 million over three years. For that money, Aamir sets aside a few days every year for the commercials. Shahrukh Khah, who rivals Aamir in the movies, charges a similar amount for Pepsi, while among


48

Impact of brand ambassadors on Purchase behaviour of soft drinks the ladies, Aishwarya Rai leads with more than $2 million.

Coca-Cola is reported to have roped in the maximum number of 15 celebrities, followed by eight for Pepsi. Other brands such as Thums Up (Coca-Cola's local brand) have three, while 7Up (a Pepsi brand) has Yana Gupta and, this year, the hot Mallika Sherawat.

The advertising strategies have changed over the years, moving on from print ads to TV commercials to promotions at restaurants, events, the Internet, contests, and tie-ups with shops and movie theaters. India's total advertising market (print plus TV) is more than $2.5 billion, with print ads accounting for 45% of the total.

There will strategies, and there will celebrities and the war will continue for the ages to come. The onus is on the part of the companies to showcase their features and woo the customers towards them.


49


CHAPTER 6

IMPACT OF BRAND

AMBASSADORS IN SOFT

DRINK INDUSTRY


50


SOFT drinks, chocolates, biscuits, paints, cars, tyres, scooters, suitings, footwear, watches, pens, hair oil, chyawanprash, insurance packages, diamonds, liquor, photo films ... The list could go on. It appears that, of late, corporate India does not want to sell anything to the consumer without using either a movie star or a sports hero.

If we are rapidly turning the pages of glossy magazine or channel surfing, an advertisement featuring Aiswarya Rai or Aamir

Khan for coca-cola or shahrukh Khan for Pepsi its sure we will slow down. Then again, we might find the exasperating ad lines or jingles buzzing in our head all the day. Celebrity endorsements ensure that the product lingers I the memory long after the advertisement has been seen and phrases like Thanda matlab coca-cola or Yeh Dil Maange More are often discussed in informal circles. Such is the power of celebrities that they are increasingly finding their way in almost all then product lines in the business world. Before really getting into the discussion of what impact have the brand ambassadors made towards softdrink brands,lets have a overview on

DO CELEBRITY ENDORSEMENTS HELP SELL

PRODUCTS?

What is more insulting to the consumer: A celebrity who thinks you should buy anything he endorses or the marketing gurus who expect you to buy their product just because of the presence of a celebrity in the ad?

The cult of celebrity endorsements does a disservice both to the brand as


51

Impact of brand ambassadors on Purchase behaviour of soft drinks well as the consumer. A brand which is confident of its positioning in the

marketwillnotrequiretheservicesofacelebrity.

A strong brand identity would not really need a big name to help advertise it. After all, the only person who benefits from celebrity

endorsementisthecelebrityhimself.

Celebrities are used supposedly to stand out from the clutter, but these days it's the celebrities themselves who are adding to that clutter. Take any big star like Amitabh Bachchan or Shah Rukh Khan.

It's likely that one will recall them with their overwhelming personalities and not the product they were paid big bucks to endorse. End result: Celebrity becomes richer and there is little recall for the brand.

As the consumer has matured advertisers can no longer fool the consumer by sticking in a celebrity to push up sales. With celebrities themselves becoming akin to commodities willing to put their names to just about any product, the consumer today is smart enough to distinguish between a genuine endorsement and a case of poor brand-and-celebrityfit.

This skepticism in the mind of the consumer can be further aggravated if there is a complete disconnect between the product and the celebrity.

By placing a celebrity in an ad without thinking through as to whether there is any synergy between the two is lazy advertising. A company also runs the risk of a celebrity losing his shine overnight especially if he has


52


run-inswiththelaw,alaSalmanKhan.

As a gimmick, celebrity endorsements have lost their luster. It's time then for advertising and marketing professionals to come up with some real ideas rather than depending on celebrities to sell products.

BRAND AMBASSADORS AND SOFT DRINKS:

Brand ambassadors have ruled the soft drinks industry. Their presence has become inevitable that the companies now feel without the celebrities the brand cannot be promoted. Name a icon, let it be shahrukh Khan or Amair khan, Aiswarya Rai or Priyanka Chopra from Tinsel Town, or Sachin Tendulkar or Sania Mirza from Sports arena, they are now a face of some brand or another.

Last year, when the controversial pesticide issue shook up Coca-Cola and PepsiCo and resulted in much negative press, both the top brands sat with fingers crossed. Both soft drink majors put out high-profile damage control ad films featuring their best and most expensive celebrities. While Aamir Khan led the Coke fight back as an ingenious and fastidious Bengali who finally gets convinced of the product's `purity,' PepsiCo brought Shah Rukh Khan and Sachin Tendulkar together once again in a television commercial which drew references to the `safety' of the product indirectly.

The success that the Aamir Khan thanda matlab commercial brought Coca-Cola is universally acknowledged. A creation of Prasoon Joshi, National Creative Director, McCann-Erickson, the ad has been exported to foreign markets as well. The way that the soft drink companies carried


53

Impact of brand ambassadors on Purchase behaviour of soft drinks away the pesticide controversy makes the common public feel that, Is he

made gullible?

BRAND AMBASSADORS: SAFE BET FOR THEIR SOFT

DRINK BRANDS?

Points out R. Bal Krishnan, Executive Creative Director, Lowe, "It depends on how well or how badly brands use celebrities. Sometimes, a good brand uses a celebrity ineffectively, and there are times when a smaller brand does extremely well with good use of a celebrity endorser." As for overkill, Balki says, "It is not that the consumer gets tired or confused about the same star endorsing various products. If an ad film is told well with a differentiated story, it works. Otherwise, it doesn't. It is as straightforward as that."

Lets take the example of Aamir Khans Association with Coca Cola. It

clicked. The association had a positive correlation. In this case the brand used the celebrity effectively. But in some cases people may feel that the association is not proper and rather the brand value has gone down after such an association with the celebirity.Sometimes a bad spell can also affect the brand value.

The following attributes can be discussed

TESTIMONIALS

If the celebrity has personally used the product, that is the soft drink brand that he endorses and is in apposition to attest to its quality, he or she may give a testimonial citing its benefits.for example,in one of the interviews with Aamir Khan,he told that he consumes only Coca Cola


54

Impact of brand ambassadors on Purchase behaviour of soft drinks and not any other brand. This in some way or other will augment the sale of the brand.

SPOKESPERSON

A celebrity who represents a soft drink brand over an extended period of time, often in print and television advertisements and in personal appearances, becomes the spokesperson of the brand. For example, Sania Mirza who endorses Sprite is the spokesperson of the brand and she must like Sprite, which will add value to the brand.

BREAKING THE CLUTTER

When the objective is to break the clutter among the deluge of advertisements, the impact on the brand will depend on the kind and quality of the message conveyed to the consumer. The celebrity is used to garner attention. Further the celebrity chosen must be so popular among the general public.Aamir khans association as mentioned earlier is one such good example. It has helped Coca Cola to break the clutter.

WHICH ONE TO BET ON: THE IDEA OR THE BRAND

Celebrity endorsement is mainly carried out for better brand recall and better brand awareness. There are many soft drink brands flooded in the market and umpteen numbers of advertisements to promote it. Hence consumers get sick of these advertisements. Hence to make the consumer look on the advertisement, it must be innovative or use a charming celebrity and the rest will be done. But when the


55

Impact of brand ambassadors on Purchase behaviour of soft drinks advertisement is both innovative and the celebrity is charming, then its

likely that the advertisement will become a very big hit.

Advertising agencies use famous icons to get the job done. They are

paid a lot to do it. Trustworthiness, likeability, attractiveness and

personality of the celebrity endorser play an important role in attracting

attention to both the endorsement and the brand, fulfilling a requirement

in successful advertising.

ETHICAL ISSUES INVOLVED IN CELEBRITY

ENDORSEMENT

When the pesticide issue rocked the country and the cola companies were in affix to set the sales graph right they had to do lot of home work. They knew that the tarnished image can be only rebuilt with the celebrity endorsement as they posses high trustworthiness among the general public. But some of the celebrities were fearing on the ethical grounds. Gopi chand, The famous Badminton player was offered at the time of pesticide issue a huge sum to endorse one of the soft drink brands, which he refused to do on ethical grounds. But later the companies roped in famous celebrities and showcased to the public that the soft drink brand can be consumed as there is no harm in doing so.

ALL MARKETERS ARE LIARS

Seth Godin, in his famous book all marketers are liars says a very different line of idea for selling products. He says that all the marketers are liars and a perfect marketer must know to address the irrational wants of the consumer. Any advertisement can tell about the


56

Impact of brand ambassadors on Purchase behaviour of soft drinks features that the product has and any agency can do it. Further people are least interested in hearing to it. Rather fantasize him and address that his irrational wants will be fulfilled after he buys the brand. That its shown in an advertisement that a boy gets a Girlfriend after he consumes a particular brand of soft drink may look ridiculous. But it actually clicks.

The above thought can be best materialized by effectively using a brand ambassador. Because the message is easily reached. He would be earlier in no mood to watch an advertisement or see a print advertisement if it were ordinarily done. But now it looks different. It can fantasize him to a different world. But brand Gurus say that it results in better brand recall and better brand awareness. The purpose is clearly served with the help of the celebrity that is used to endorse the product.


57


CHAPTER 7

ANALYSIS AND

INTERPRETATION


58


INTERPRETATION AND ANALYSIS (From hypothesis)

FAVORITE BRAND AMBASSADOR

AND CHANCES OF BUYING

Chances of buying

No. of

respondents

Very less

47

Less

11

Neutral

32

High

8

Very high

2

Ho: There is no significant difference between brand ambassadors and expected number of respondents to buy the soft drinks. (Ps = P)

H1: There is significant difference between brand ambassadors and expected number of respondents to buy the soft drinks. (Ps > P)

Ps: sample population;

Ps = 0.58

P : expected population

P

= 0.20

Level of significance 5%

Ztab

=1.645 (one tailed test)

Test stastistic

Z =

| P Ps |

PQ / n


59


DATA: P =0.20Ps =0.58n =100

PQ / n = 0.04

TEST: Z cal = | .2 058 |

9.5

0.04

Since Z cal > Z tab, Ho is not accepted.

That is Ps > P

INTERPRETATION:

This means that the sample observed is more than that of expected. Generally due to brand endorsement it is expected that less should be unlikely to buy the brand and more should be likely to buy the brand. This means that the consumers in the case of soft drinks give much importance to other attributes like quality, value for money etc.


60


UDY

BRAND AMBASSADORS AND

ADVERTISEMENT REACH AMONG CUSTOMERS

Chances of buying

No. of

respondents

Very less

4

Less

4

Neutral

23

High

41

Very high

28

Ho: There is no significant difference between impact of brand ambassadors and expected number of respondents viewing the soft drinks advertisement. (Ps = P)

H1: There is significant difference between impact of brand ambassadors and expected number of respondents viewing the soft drinks advertisement. (Ps < P)


Ps = 0.69


P

= 0.80


Ztab


Test stastistic

Z =

| P Ps |

PQ / n

DATA: P =0.80

Ps =0.69

n =100


61


PQ / n = 0.04

TEST: Z cal = | .8 0.69 |

2.75

0.04


That is Ps < P

INTERPRETATION

This means that the sample observed is less than that of the expected. The companies which use brand ambassadors and celebrities to endorse their brand expect large number of people to view the ad. Although 69 % is very good proportion, by the test it is less than the expected/hence some creativity should also be coupled with celebrities to make the advertisements more reachable.


62


RECOMMENDATION AMONG THEIR

FRIENDS/COLLEAGUES

Chances of

No. of

recommending

respondents

Most unlikely

40

Unlikely

35

Neutral

13

Likely

9

Most likely

3

Ho: There is no significant difference between brand ambassadors and expected number of respondents unlikely to recommend the brand. (Ps = P) (The persons that the company expects that they are

unlikely to recommend being small).

H1: There is significant difference between brand ambassadors and expected number of respondents unlikely to recommend the brand. (Ps >P)


Ps = 0.75


P

= 0.20


Ztab


Test stastistic

Z =

| P Ps |

PQ / n

DATA: P =0.20

Ps =0.75

n =100


63


PQ / n = 0.04

TEST: Z cal = | .2 0.75 |

13.75

0.04


That is Ps > P.

INTERPRETATION:

The company always expects that the number of people unlikely to recommend the brand should be less, or in other words, there should be large number of persons who should recommend the brand. In case of soft drinks this can be seen that there is no such trend. This means that people give importance to other factors. And they think that they can recommend a brand only after they are thoroughly satisfied. Hence attribute like satisfaction can be considered for recommendation of a brand.


64


BRAND AMBASSADORS AND DETRACTORS

Chances of

No. of

recommending

respondents

Most unlikely

62

Unlikely

25

Neutral

9

Likely

2

Most likely

2

Ho: There is no significant difference between brand ambassadors and expected number of respondents not detracting someone from buying. (Ps =P)

H1: There is significant difference between brand ambassadors and expected number of respondents not detracting someone from buying. (Ps < P)


Ps = 0.85


P

= 0.80


Ztab


Test stastistic

Z =

| P Ps |

PQ / n

DATA: P =0.80

Ps =0.85

n =100


65


PQ / n = 0.04

TEST: Z cal = | .8 0.85 |

1.25

0.04

Since Z cal < Z tab, Ho is accepted.

That is Ps = P.

INTERPRETATION:

In this case the observed number of people from the sample who say that they will not detract is more than that of the observed. This is a good sign. Hence it implies that the respondents will not detract another person because their hated celebrity endorses the product.


66


IMPORTANCE OF BRAND AMBASSADOR

Importance

No. of

respondents

Most important

8

Important

51

Neutral

22

Less important

19

Not at all important

0

Ho: There is no significant difference between observed and expected number of respondents who think that brand ambassadors are important. (Ps =P)

H1: There is significant difference between observed and expected number of respondents who think that brand ambassadors are important. (Ps < P)


Ps = 0.81


P

= 0.80


Ztab


Test stastistic

Z =

| P Ps |

PQ / n

DATA: P =0.80

Ps =0.85

n =100


67


PQ / n = 0.04

TEST: Z cal = | .80 0.81 |

0.25

0.04

Since Z cal < Z tab, Ho is accepted.

That is Ps = P.

INTERPRETATION:

It is obvious from the analysis that there is no significant difference between observed and expected number f respondents who think that brand ambassadors are important. The rules of marketing are changing. Although companies use several strategies to make products reach the people, brand ambassadors also constitute one of the important attributes.


68


INTERPRETATION AND ANALYSIS

(From graphs and charts)

A questionnaire was prepared keeping in mind all the criteria to assess the impact of celebrity endorsement towards purchase behavior of soft drinks and the data is analyzed for interpretation of results

Sample size: 100

Gender

Sample size

Male

54

Female

46

Total

100

GENDER SPLIT UP

GENDER SPLIT UP

46%

Male

54%

Female

Most of them were students, as the study was done with a convenient sampling. The students community are from various states who under go their education at Bangalore and they are from different states so that the sample represents different taste and preferences to get an unbiased result.


69


BRAND RECALL OF SOFTDRINKS

With the response from the sample population the brand recall is being

analyzed. It was asked to mention top six brands which they like from

which such information is being taken up.

BRAND RECALL

NAME

NUMBER

OF THE BRAND

OF MENTIONS

Coca-cola

97

Pepsi

96

Sprite

87

Mirinda

85

7up

80

Fanta

83

Thumpsup

90

Mountain Dew

63

Limca

65

Others*

61

*others include brands like Mazza,Slice

CHART SHOWING BRAND RECALL

100

90

Coca-cola

MENTIONS

80

Pepsi

70

Sprite

60

Mirinda

50

7up

40

Fanta

OF

Thumpsup

NUMBER

30

20

Mountain Dew

10

Limca

Others*

0

BRANDS UNDER STUDY


70


BRAND AND CELEBRITY ASSOCIATION

The respondents were asked to specify top 6 brands that come to their mind and in the order of preference and also asked to specify the name of the brand ambassador of the soft drink brand if they know. And the response was as follows

NAME

Percentage of people who

OF THE BRAND

could associate with

celebrities

Coca-cola

58

Pepsi

54

Sprite

50

Mirinda

40

7up

53

Fanta

36

Thumpsup

49

Limca

30


120

RESPONDENTS

100

80

60

40

NO.OF

20

0

i

te

a

up

a

la

p

ta

s

o

p

i

d

u

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BRANDS

h

C

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TOTAL NO.OF

RESPOSDENTS

PERCENT OF PEOPLE WHO ASSOCIATED WITH BRAND AMBASSADOR


71


FAVORITE BRAND AMBASSADOR

AND CHANCES OF BUYING

The respondents were asked what the chances are of buying a soft drink brand if it is endorsed by their favorite icon. And the response was as follows:

Chances of buying

No. of

respondents

Very less

47

Less

11

Neutral

32

High

8

Very high

2


BRAND AMBASSADOR AND

CHANCES OF BUYING

8%

2%

Very less

Less

47%

32%

Neutral

High

Very high

11%


72


INTERPRETATION:

It is obvious from the above chart that above 47% of the respondents say that the chances are very less that they will buy a soft drink brand when it is endorsed by their favorite icon while 11% say the chances are less, and 32% remain neutral. On the other hand about 8% say that their favorite icon influences them in buying the brand to high extent and about 2% say that it influences to very high extent. Since the majority say that celebrity endorsement doesnt influence them to buy the soft drinks they have in mind also other attributes like quality, value for money etc.


73


UDY



The respondents were asked what the chances that they will view a television ad of a soft drink brand if it is endorsed by their favorite icon. And the response was as follows:

Chances of buying

No. of

respondents

Very less

4

Less

4

Neutral

23

High

41

Very high

28

CHART SHOWING CELEBRITY ENDORSEMENT AND CHANCES OF

VIEWING A TELEVISION AD

BRAND AMBASSADOR AND

TELEVISION AD VIEWING CHANCES

4%

4%

28%

23%

Very less

Less

Neutral

High

Very high

41%


74


INTERPRETATION:

From the chart it can be clearly seen that about 28% of respondents say that there is a very high and 41% high chances of viewing a television ad, given the ad is featured with their favorite icon. Advertisement is one of the important modes for brand awareness and brand recall. Hence if the celebrity endorsement can do that effectively, then it will have a positive influence on the buying behavior. On the other hand only 4% say that there is less chance of viewing and again another 4% say that there is very less chance of viewing. And the remaining 23% remain neutral.


75


UDY



The respondents were asked what the chances that they will see a print ad/hoarding of a soft drink brand if it is endorsed by their favorite icon. And the response was as follows:

Chances of buying

No. of

respondents

Very less

2

Less

9

Neutral

17

High

51

Very high

19

CHART SHOWING CELEBRITY ENDORSEMENT AND

CHANCES OF VIEWING A PRINT AD

BRAND AMBASSADOR AND PRINT AD/HOARDING

VIEWING CHANCES

2%

9%

19%

17%

Very less

Less

Neutral

High

Very high

53%


76


INTERPRETATION:

From the chart it can be clearly seen that about 19% of respondents say that there is a very high and 51% high chances of viewing a print ad or a hoarding, given the ad is featured with their favorite icon. Advertisement is one of the important modes for brand awareness and brand recall. Hence if the celebrity endorsement can do that effectively when, then it will have a positive influence on the buying behavior. On the other hand only 9% say that there is less chance of viewing and another 2% say that there is very less chance of viewing. And the remaining 17% remain neutral.


77


BRAND AMBASSADORS AND SOFT DRINK BRAND

RECOMMENDATION AMONG THEIR

FRIENDS/COLLEAGUES

The respondents were asked what are the chances that they will recommend a soft drink brand to their friends/colleague/spouse because their favorite icon endorses it. And the response was as follows:

Chances of

No. of

recommending

respondents

Most unlikely

40

Unlikely

35

Neutral

13

Likely

9

Most likely

3

Chart showing chances of recommending a soft drink brand if endorsed by their favorite celebrity

3%

9%

13%

35%

40%

Most unlikely

Unlikely

Neutral

Likely

Most likely


78


INTERPRETATION:

From the chart it is obvious that about 40% respondents say that they are most unlikely and 35% unlikely to recommend the brand if endorsed by their favorite icon. On the other hand 9% of respondents are likely and 3%most unlikely to recommend the brand. This can be interpreted that although they like the brand for several reasons, most of them may recommend the brand taking into consideration some other attributes but not celebrity endorsement. For example the consumer can find quality as one of the important attribute and hence can recommend a soft drink brand. About 13% remain neutral in the response.


79


BRAND AMBASSADORS AND DETRACTORS

The respondents were asked what are the chances that they will restrain their friends/colleague/spouse from buying a soft drink because the brand is endorsed by their hated icon. And the response was as follows:

Chances of

No. of

recommending

respondents

Most unlikely

62

Unlikely

25

Neutral

9

Likely

2

Most likely

2


2% 2%

9%

Most unlikely

62%

Unlikely

Neutral

25%

Likely

Most likely


80


INTERPRETATION:

From the chart it is obvious that about 62% respondents say that they are most unlikely and 25% unlikely to restrain their friend/colleague from buying a soft drink brand when it is endorsed by their hated icon. On the other hand only 2% of respondents are likely and another 2% most unlikely not to detract. This can be interpreted that most of the respondents have the idea that they wont restrain somebody from buying asoft drink brand because it is endorsed by their hated icon. About 9% remain neutral in the response.


81


CHANGE IN PURCHASE BEHAVIOUR AFTER A NOT-

SO-FAVORITE BRAND AMBASSADOR STARTED

ENDORSING THE BRAND

The respondents were asked, after their not-so-favorite icon started endorsing the soft drink that they consume did their purchase behavior change and their response was as follows

ATTRIBUTE

No. of

(Did they feel

respondents

like...)

Shifting to another

2

brand

Remain in same in

42

any case

Not sure

2

Do not care about

54

these attributes

CHART SHOWING CHANGE IN PURCHASE BEHAVIOUR

AFTER A NOT-SO-FAVORITE BRAND AMBASSADOR

STARTED ENDORSING THE BRAND

RESPONDENTS

100

90

80

70

60

50

40

30

NO.OF

20

10

0

ATTRIBUTES1

Shifting to another brand

Remain in same in any case

Not sure

Do not care about these attributes


82


INTERPRETATION:

It can be interpreted from the above chart that about 54 respondents (54%) do not care about attributes like change in brand ambassador. While about 42 respondents (42%) say that they will remain in the same soft drink brand in any case. Hence it can be said that change in the brand ambassador doesnt have much effect as only1% say that they will shift if such a change happens.


83


BRAND AMBASSADOR AND PREFERENCE AMONG

TWO BRANDS HAVING SAME ATTRIBUTES

The respondents were asked whether they will prefer to buy a particular brand among two brands having same attributes because that brand is endorsed by their favorite celebrity. And their response was as follows

Chances of

No. of

preference

respondents

Most unlikely

31

Unlikely

17

Neutral

20

L

Documents

Impact of Brand Ambassadors On