Impact Of Celebrity Endorsement On The Business Performance - Samples

Question: Discuss about the Impact Of Celebrity Endorsement On The Business Performance Of Retail Industry. Answer: Introduction Involvement of celebrity in the business promotion is a good practice for rendering the business performance in comparison to the other performers in the same market segments (Appiah Missedja, 2016). However, actors and athletes serve as the celebrity in product promotion. Despite the high cost, celebrity endorsement is used rapidly in the recent years in the business industry. This research study deals with the impact of celebrity endorsement on business performance of the retail sectors. However, critical factors of celebrity endorsement and its effect have evaluated in this study. Apart from this aim and objectives of such study has discussed in this section. Background of the Study The marketers to develop a contract for celebrity endorsement have spent the enormous amount of money in every year. However, they think that celebrities are the good spokespeople and are able to influence the people towards the product or service (Reimann Reisinger, 2017). According to the marketers by involving celebrity in the advertisement process, they will be able to get a valuable position in their customers mind. However, the brand gets the touch of glamour by celebrity endorsement. In today's era, the celebrity endorsement is considered as the billion-dollar industry. On the other hand, celebrity endorsement is associated with the high risk and high reward. Problem Statement Use of the celebrity in the advertisement process to promote products or service is a common trend in the recent years (Mckenzie Chiliya Chikandiwa, 2016). However, the business organizations need to motivate the customers towards their new products however, many customers overlook the innovation of an organization. Hence, it is a big issue for such organizations to improve their brand image in the customer domain. However, advertising of the products through the celebrity easily influence the customers towards such products, as a result, the sales have been increased. Hence, celebrity endorsement is a good practice to maximize sales revenue generation as well as the customer loyalty for an organization. However, if the customers see that their favorite celebrity advertises a new product or service then they are easily motivated by them and become interested in the products. As a result, the issues of improving the product image on the customer mind will be reduced through the celeb rity endorsement (Haque, 2016). Research aim The aim of the current study is to evaluate the impact of celebrity endorsement on the business performance in the context of retail sectors. Research objectives To understand the significance of celebrity endorsement in the product promotion through advertisement To identify the potential factors of celebrity endorsement To evaluate the effect of celebrity endorsement on the business activities in context of retail industry To provide recommendations to bring improvement in the celebrity involvement in product advertising Research Questions What are the important aspects of celebrity endorsement that need to be considered by the retail industry? What are the potential impacts of the celebrity involvement in the advertising process? Why has involvement of celebrity in the product promotion been increasing rapidly? What are the recommendations to improve the celebrity endorsement process? Literature review This literature review section reveals an evaluation of the role of celebrity endorsement in influencing the consumers towards the product of an organization. However, the involvement of the celebrity on the advertisement process leaves a positive impact on the sales of the retail industry. Hence, this literature review gives an overview of the celebrity endorsement and its effect on retail business. Conceptual Framework Figure 1: Conceptual Framework (Source: Created by Researcher) Notion of celebrity endorsement The advertisement is a process to attract the consumers towards the product or service of an organization. Endorsers use celebrity to improve the brand image as well as to promote their products. Trustworthiness and likeability are the basic properties of celebrity endorsement. Hence, to gain the consumer trust marketers hire the celebrity to advertise their products (Azevedo, 2016). Celebrity endorsement is a process through which the top celebrities are hired by the business industries to against high price for the advertisement of the products. In this process, celebrities influence the people by showing the importance of the products or service in their life. In the fashion industry celebrity, branding is used to gain the customer attention and to maximize the sales revenue generation. Potential factors of celebrity branding Trustworthiness is a big factor of celebrity endorsement that allows the organization to hire celebrities for their product promotion. However, people have a trust on their famous celebrities that influence them positively to purchase a product or service that is advertised by the celebrity (Khamis, Ang Welling, 2017). Marketers of the retail industries are aware very well about such thought of consumers that leads them to hire celebrities by offering them the high price for the advertisement of their branding. Matching of the celebrities with the target audience is another factor that influences the celebrity endorsement practice in the retail industry (Jimnez-Zarco, Gonzlez-Gonzlez Gonzlez-Rodrigo, 2016). However, every industry has a target market and every people have their favorite celebrities. Hence, the marketers try to hire the popular celebrity that will match with their target audience, as it will enhance the product promotion. Expertise is another factor of celebrity endorsement as people think that a celebrity possesses more knowledge for a fashion item as they are associated with the fashion world (Fillis, 2015). This concept leads the business organizations to hire the celebrity for the advertisement of their products. Celebrities who use the brand are good for the advertisement for such specific brand (Khamis, Ang Welling, 2017). However, if the celebrity uses a brand then this specific brand always tries to hire such celebrity for their advertisement. However, such specific celebrity will be reliable for their product as well as for such organization. Attractiveness is a crucial factor of celebrity branding, however; the style of a celebrity attracts their fans. Hence, people have a common wish to look their celebrity by adopting their styles. This factor influences the marketers to advertise their products through involving the celebrity as it may attract the customers easily and influences the buying behavior of the consumers (Azevedo, 2016). Models of Celebrity endorsement Application of Meaning Transfer Model in context of Celebrity endorsement Celebrity endorsement process can be evaluated by the transfer model as this model highlights on the basic elements of the celebrity endorsement (Prentice et al., 2017). This model includes culture, consumption, and endorsement, as these are the basic elements of such model. An advertisement process for a particular brand and for a particular product will be meaningful by the involvement of the celebrity. In order to influence the people and to change their purchasing behavior, the celebrities are considered as the strong endorsers rather than the anonymous actors. Consumption process is a method of searching new objects by the consumers. Application of the transfer model is helpful for the retailers to select reliable celebrities those are perfect for their product promotion through advertisement. This model enables the marketers to choose the celebrities those are able to develop a meaningful communication with the customers based on the product feature (Nelson Deborah, 2017). The source credibility model of celebrity endorsement According to this model in delivery of a meaningful message depends on the credibility of the endorser (Ding, Y., Qiu, 2017). Among the several factors of persons credibility, trustworthiness and perceived expertise are the vital factors of endorser credibility. Perceived expertise insists the people, changes their perceptions regarding the products, and delivers the reliable message to them. On the other hand, trustworthiness refers to the believability, integrity, and honesty of the endorser that is based on the perspectives of the consumers. However, by applying this model the retail marketers are able to improve their celebrity endorsement process in the context of product promotion. Evaluation of the effect of celebrity endorsement on the performance of retail business Celebrity endorsement leaves a great impact on the sales revenue generation of a business. According to Portia, Li, and Philip, (2017), celebrity branding has been increasing rapidly in the recent years despite the rising price in the business industry. However, the increase of the media coverage is the prime factor of celebrity branding. However, according to the research, it has been found that celebrities those are hired by the different brands have more demand. As a result, the business organizations need to pay the high price to hire such celebrity for their advertisement. This high cost often affects the sales as well as the profitability of the business as the hiring cost of the celebrity becomes more than the product price. On the other hand, the involvement of celebrity enhances the sales in the context of any business. As for example, Volvo has hired Swedish football star Zlatan Ibrahimovic for the advertisement of Volvo model XC70. This celebrity branding was a great approach for such organization that gave it high profit from sales. Therefore, Nike has got $2 million from its sales by hiring Tiger Wood for the advertisement of their products (do Vale Matos, 2017). Hence, it can be said that celebrity endorsement increases the sales for the retail sectors and other organizations. Purchasing behavior of the individuals is a practice of searching a suitable object that they want to purchase among the different alternatives (Zhou Tainsky, 2017). Hence, celebrity branding is one of the crucial ways to influence the buying behavior of the consumers regarding any product or service. Since the 19th century, the use of a famous person in business promotion is continuing. In the recent years, the mass media plays an important role to deliver messages regarding a brand by the advertisement of celebrity. However, the opinion of the community can be changed by the celebrity branding as the famous person possesses distinctive trait and high repute. On the other hand, eye-catching personality and style of the celebrity easily gain the attention of the consumers and influence their purchasing decision. Celebrity branding influences the brand image, as it is the most popular tool of the advertisement (Roy et al., 2017). However, fashion products, households, food, and beverages are the main products of retail sectors. There is a good relationship between the fashion market and the famous person. Hence, the involvement of the celebrity in the advertisement process of fashion industry improves the brand image of an organization. Retailers use the celebrity endorsement as a promotional technique to enhance their brand value. Celebrity creates the buzz that allows the retailers to make their brand famous in the public domain. On the other hand, celebrity delivers meaningful messages and organizational promise to the customers that enhance the customer loyalty and their expectations. This also improves the brand image of an organization. Discussion of the challenges faced by the marketers during celebrity endorsement The retailers and the other industries use celebrity branding to create brand awareness in the public domain. However, often this celebrity branding affect the business of an organization as the marketers spend huge resources to hire the celebrity to endorse their service or products (Knoll Matthes, 2017). Both government and non-government organizations use celebrity branding to deliver messages to the public and to influence their attitudes. Marketers invest huge money to align their product and service. Hence, celebrity endorsement includes the high cost that is the big challenge for the small business. On the other hand, often misleading of information occurs due to celebrity branding that may affect the brand image. Therefore, popular celebrities are not available this is the great issue of hiring celebrities for the product promotion. Celebrity branding influences the brand preference of the consumers. Unleashing the power of the celebrities to generate the brand image easily gains the attention of the consumers (Zhou Tainsky, 2017). However, it is very common for the consumers to buy product form the particular brand that they prefer to use. However, such preference comes from the celebrity branding. However, if the consumers watch their favorite celebrities in advertising a brand then they become interested towards such brand. Keeping this in mind the marketers launch new product or brand and hire the popular celebrity for the advertisement. Research Methodology This current research study focuses on the secondary information analysis. Hence, secondary data collection method has been selected in this study. Different government journals, company websites, and articles are selected to collect secondary information. However, inclusion and exclusion criteria have been used to select articles from the various databases. Secondary data analysis gives authentic and reliable information on the topic (Bergkvist, 2017). Hence, data are collected by reviewing different reliable articles. Positivism philosophy has been selected in this research methodology to gain better marketing knowledge over the impact of celebrity endorsement on business. Therefore, the deductive approach has been selected in this methodology. Deductive approach is associated with the hypothesis and selection of theories (Dwivedi, Johnson McDonald, 2015). Hence, for this research, the deductive approach is appropriate as it highlights on the theoretical evidence. In this study, the researcher has selected the descriptive design method as it makes a relationship between the objectives and the findings. Probability sampling method has been used in this study and the data are collected through the secondary data collection technique. However, some ethical considerations are also done in this methodology. Data should be obtained from the valid sources and no manipulation can occur while representing the data. Findings of the secondary analysis Secondary analysis includes the collection of secondary information from different valid articles. Article review is the main part of the secondary analysis (Chan, Leung Luk, 2013). However, from the above secondary analysis in the literature review section, it has found that celebrity branding is crucial for the retail business to enhance their brand awareness. Therefore, it can be said in the recent years to gain competitive advantages celebrity branding is essential. However, trustworthiness, attractiveness, expertise and celebrity matching with the target audience are the major factors that influence the marketers to hire the celebrity for the advertisement of their brand. Celebrity endorsement influences the purchasing behavior of the consumers. For the improvement of brand image, celebrity branding plays an important role. It has been received from the secondary analysis that celebrity branding leaves a big impact on the sales revenue generation. Therefore, brand preference of consumers is associated with the advertisement through celebrity. Apart from the positive impact of the celebrity endorsement, it has been received that several challenges are associated with celebrity branding. One of the most important is increasing the cost of hiring the celebrity (Arsena, Silvera Pandelaere, 2014). Therefore, misleading of information regarding the product is another vital challenge of celebrity endorsement. Discussion of the findings from literature review According to the above literature review, it has been received from the findings, that celebrity is a common and popular trend in the business industry (Fleck, Michel Zeitoun, 2014). It has found that trustworthiness is a big factor of celebrity endorsement as if the customers cannot rely on the messages of celebrity then they will not be able to purchase the products. On the other hand, style of the celebrities attracts the customers most towards a brand. Therefore, there is a belief in the people that their famous persons have depth knowledge about the fashion products, as they are associated with the glamour world, which leads them to change their buying behavior. However, application of transfer model and credibility model enable the marketers to understand the celebrity endorsement process and its significance in the business. Purchasing behavior of the individuals can be influenced through the celebrity branding as if the consumers watch their favorite persons in promoting a new brand then they easily attracted to this brand (McCormick, 2016). According to the above findings, celebrity branding is an effective tool of marketing that enhances the sales of an organization by motivating the customers. Improvement of the brand image is also associated with the celebrity branding as celebrities act as the spokespersons to communicate with the brand. Famous persons deliver the product related messages in the consumer domain that increase the brand loyalty. Apart from this, it is important for the markers to cope with the rising cost of celebrity endorsement to utilize it properly to maximize the business performance. From the above findings, it has been received that celebrity branding is significant in generating brand awareness and brand value in the customer domain while it includes some barriers also. Wrong product information often reaches to the public domain through the celebrity branding is the organizations fail to give proper product information during the advertisement. This issue related to celebrity branding affects the business performance of the retail sectors. Recommendations To make a proper contract for a certain period with celebrities: Establishment of a contact with the celebrity for a certain period can be helpful for the business organization. However, marketers have to invest more for the celebrity branding and often the celebrity change their demand based on their popularity. This may lead the business organizations to face a huge loss. Hence, development a contract will resist the celebrity to change their demand and they are able to work with an organization as per the contract rule. To provide specific product information during the celebrity branding: the marketers should give clear information to the celebrities regarding the product or service during its advertisement. This will reduce the misleading of product information through the celebrity branding in the public domain. To give the proper presentation: The marketers need to arrange proper presentation during their product promotion through celebrity endorsement. This will influence the consumers towards the particular brand, as they will get the clear idea about the brand. Conclusion The entire piece of work highlights on the different aspects of the celebrity branding and its effect on the business performance in the retail industry. However, the celebrity endorsement is significant for the business organization to increase their brand awareness. On the other hand, it also influences the consumers and their decision-making process while purchasing a product. Interest regarding a product grows in the customer mind by watching the advertisement that is generated by their celebrities. Apart from this, some challenges also occur to the organizations during the celebrity branding that they need to overcome. References Appiah, M. K., Missedja, K. (2016). 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