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IMPACT OF CELEBRITY ENDORSEMENT ON CONSUMER BEHAVIOR AND SALES VOLUME OF AN ORGANIZATION: A CASE STUDY OF GLOBACOM

CHAPTER ONE

INTRODUCTION

1.1       Background to the Study

In today’s world, celebrities are being treated as a role model, people are changing their living style related with their favorite celebrity. This thing creates a great impact on the buying behavior of the persons. This attracts the customers and ultimately increases the company productivity. Celebrities are not always creating any kind of effect on persons mind in terms of buying. But mostly it gives a great impact on perception of choosing any product. We are always thinking that if our favorite celebrity is using them. Then we should use that to be like them (Khatri 2016).

From last 150 years advertising is changing in different phases from the classical to modern. These days, the best strategy used by marketers to influence customers is by showing celebrities with their products. It includes different appeals like, exciting, absurdity, sexual etc. Belch, and Belch, (2012) acknowledged that the main aim of formulating such strategies is to get high brand revelation, longing, concentration and curiosity. To do so, marketers attach famous personalities with their products. McCracken (2014) stated that these famous personalities had great influence on the consumer’s buying behavior that’s why it becomes the most attractive tool of advertising now a day. The major aim to do advertising and adopt this strategy is to influence customers towards the products (Ohanian, 2011).

In recent years most adverts on television has a celebrity that projects the products or services by way of using the product and with this, has influence on the buyers and customers of these products and services and thus the sales volume of an organization. Celebrity endorsements are now common place in the advertising world. Celebrity endorsements influence brand image through a transfer of meaning from the endorser to the brand. According to Patrick Bishop (2010), a Marketing Expert, “when you get a celebrity to endorse your company or sign licensing agreement, you benefit from customer awareness of the property, which could include the perception of the quality, educational value or a certain image. If a celebrity is endorsing or the business is selling the product of a well-known person or entity, then people assume they must be a good company to deal with.”

This research is specifically on celebrity endorsement and the influences it has on consumer behavior of an organization. Customers’ attitude regarding brands and products are well enhanced by celebrities, but whether it generates repeat purchase intention and brand loyalty is not so clear (Byrne & Whitehead 2013). However, there is no evidence proving that the usage of celebrity endorsement will achieve increase of sales when compared to a non-use of celebrity endorsement. In fact, consumers might pay more attention to celebrities in advertisements than the actual product endorsed, which is not the marketers’ intention. As in most Globacom advertisements, physically attractive celebrities are especially recognized. They might exert a magnetic power to consumers resulting in a behavioural purchase instead of true brand commitment. But whether or not the purchase behaviour will become repetitive is less clear (Byrne & Whitehead, 2013).

1.2       Statement of the Problem

Celebrity endorsement has become multi-million industries in the world today, marketers endorse celebrities with their products and brands in advertisement to increase their sales and change the perception of the viewer’s regarding their brand, which positively impacts on their buying behavior. However, the problem of whether or not celebrity endorsement greatly influences consumers’ buying behavior has been a cause of worry especially as many organizations use celebrities and still not do too well in terms of sales. This study is thus an effort to explore the effectiveness of the use of celebrity endorsements in advertisements and its influence on consumers’ purchasing decision and also to examine the link between celebrity endorsement and consumers’ subscription to Globacom Nigeria.

1.3       Objectives of the Study

The major objective of this study is to determine the impact of celebrity endorsement on consumers’ buying behavior. Specifically, the study is designed to:

i.  Determine the effect of celebrity endorsement on consumers’ subscription to Globacom Nigeria.

ii.  Determine the relationship between celebrity endorsement and consumers’ subscription to Globacom Nigeria.

1.4       Research Questions

The following research questions are formulated to guide the study;

i.  To what extent does celebrity endorsement influence consumers’ subscription to Globacom Nigeria?

ii.  What is the relationship between celebrity endorsement and consumers’ subscription to Globacom Nigeria?

1.5       Research Hypotheses

The following null hypotheses were formulated;

Ho1: Celebrity endorsement has no significant effect on consumers’ subscription to Globacom Nigeria.

H02: There is no relationship between celebrity endorsement and consumers’ subscription to Globacom Nigeria.

1.6       Significance of the Study

This study would be of immense benefit to organizations who are in a state of dilemma on whether or not to subscribe to celebrity endorsement in promoting its product or service. The study will also be beneficial to managers of industries, directors of organizations and all relevant stakeholders who are interested in this research.

1.7       Scope of the Study

This study is on the effect of celebrity endorsement on consumer behavior. The study was conducted in Uyo, Akwa Ibom state. It is limited to Globacom subscribers in Uyo.

1.8       Limitations of the Study

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.9       Definition of Terms

Celebrity: Celebrity is one who has attained a higher rank in a society and is famous. Celebrity is a known person who has made it above others to become famous, successful or remarkable in the opinion of people.

Endorsement: This refers to approval given by a known personality who uses or has used a product and testifies to the potency of such product in an advertisement for other consumers.

Consumer: These are people who purchase and use goods or services to satisfy their particular needs or wants.

Buying Behaviour: This refers to the way that people behave when they buy things, such as what they buy, where and when they buy and how much they spend.

Brand Image: Is the current view of the customers about a brand. It can be defined as a unique bundle of associations within the minds of target customers. It signifies what the brand presently stands for. It is a set of beliefs held about a specific brand.

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