IMPACT OF CELEBRITY ENDORSEMENT ON CONSUMER BEHAVIOR AND SALES VOLUME OF AN ORGANIZATION

CHAPTER ONE

INTRODUCTION

1.1      Background of the study

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. Basically, a celebrity is described as any famous and influential person that is admired and much spoken about by most people in a society. A celebrity endorser is “any individual who enjoys public recognition and who uses this recognition on behalf of a consumer good by appearing with it in an advertisement” McCracken (1989). The use of celebrities has been adopted by various organizations in advertising products and services. 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. Communication activities establish a pattern of connectivity between the image of the celebrity and the image of the brand. According to Patrick Bishop (2000), 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.” Both entities represent nodes in a cognitive network,whose connectivity can establish contingency between the two entities (Till, 1998; Till et al., 2008). Marketers must understand what happens to the buying decision of the customer when the cultural meanings of celebrities are disgraceful. This is because the customer purchasing and using the product endorsed by the celebrity can obtain some of those meanings and use them in constructing a satisfying self- control. This research is specifically on celebrity endorsement and the influences it has on consumer behavior and sales volume of an organization. Customers’ attitudes 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 2003).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 pampers 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, 2003).

1.2      Statement of the problem

The problem of whether or not  celebrity endorsement greatly influences  consumer behavior and sales volume has been a cause of worry especially as many organizations use celebrities and still not do too well in terms of sales.

1.3      Objectives of the study

The following are the aims and objectives of embarking on this study

1. To examine the impact of celebrity endorsement on consumer behavior.
2. To examine the impact of celebrity endorsement on sales volume of an organization volume of an organization
3. To make recommendations on the use of celebrities in the endorsement of products and services.

1.4      Research questions

1. Does celebrity endorsement influence consumer behavior towards a particular product or service?
2. Does celebrity endorsement influence the sales of a product or service?
3. Are there ways the ways celebrity endorsements influence consumer behavior?

1.5   Research hypotheses

Ho: there is no significant relationship between celebrity endorsement and sales volume of an organization

Hi:there is a significant relationship between celebrity endorsement and sales volume of an organization

Ho: Celebrity endorsement does not influence consumer behavior

Hi:Celebrity endorsement does not influence consumer behavior

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 of its product or service.

The study will also be beneficial to captains of industries, managers and directors of organizations and all relevant stakeholders who are interested in this research.

1.7   Scope/Limitations of the study

This study is on the impact of celebrity endorsement on consumer behavior and sales volume of an organization.

Limitations of study

1. 1.        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).
2. 2.        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.

1.8   Definition of terms

Celebrity:A famous person or the state of being famous

Endorsement:A statement made in an advertisement usually by a famous or important person saying that they use and like a particular product.

Consumer:A person who buys goods or uses services.