Influence of celebrity brand endorsement on buying behavior of the indian soft drink consumers Acknowledgment

Impact of Celebrity Endorsement on buying behavior of the consumer

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2.8 Impact of Celebrity Endorsement on buying behavior of the consumer

Many studies have already been conducted to frame the impact of celebrity endorsement on the consumer buying behavior. Glimpse of those studies is given here. Those days had become now history when brands were limited and just their tag lines were enough or publicity, e.g. “Thanda matlab Coca-Cola” This tag line used by coca Cola India reaped enough profit for the company along with the brand recognition. At higher stages of lifecycle, there increase the intensity of competition in the market. In such circumstances, in order to sustain and being competitive, company’s try to use any means for proving its product superior to their competitors. At this stage they have a very effective tool in their hands, such as celebrity endorsement. Such association of brands with the celebs makes their products popular as well as unique in the eyes of the consumers (Erdogan, 2010).

Using a celebrity in any ad is just like building a bridge between the consumer and the producer. To target the consumers, producers select the celebrity suiting their product image. For instance, a life insurance company will tend to have a celebrity according to their product demand, say for a pension plan, they would prefer a celebrity in the age of 60 or above where as for a children plan will target the individuals in the age of 28 years and above (Clemente N. Mark, 2002).

The most important factors which will be going to decide the effectiveness of promotion by endorsement is the endorser’s credibility and personality because these two factors will reflect the product’s quality and reliability. E.g. cement companies choose such personalities, who possess a strong and powerful personality, for endorsement like Amitab Bachan for Ambuja Cement, Javed Akhtar for Jaypee Cement, Om Puri and many others. There are many concrete reasons for having celebrity endorsement by companies but the most crucial is to grab high appeal and proper message delivery in the ad. By this, they tend to segregate their target customers Kulkarni & Gaulkar, 2005).

Celebrity endorsement is extremely vital and the very basic tool for product promotion. Nowadays it has become a fashion for the product marketing and brand building. Though, it seems simple to select a celebrity but it is quite complicated to establish a sturdy relationship between the product and the endorser. Better brand image and higher profits are two fruits of celebrity endorsement (Vijay, 2011).

To achieve the full potential of celebrity endorsement, brands use different models, this highlights the need for a convergence between the pragmatic and theoretical approaches of brand building and effective advertisement. This strategy has gained the momentum in last decades or so showing the importance of celebrity-brand match and the various roles played by them as brand-associates. Certain ideas like 'diminishing celebrity utility', like 'positioning by association' and the Multiplier Effect, show the triangular relationship between the brand consumer and the celebrity.

Indians are star-struck by film stars, politicians, cricketers and even by criminals. Have we ever thought the reason behind this? A population of over 121 crore (India Cencus Report, 2011.), among them every day people look up for something and someone admirable. Emotions like security, admiration, comfort, familiarity, and above all aspiration af the lives are to be associated in order to get them fulfilled. And the witty marketers leverage this awful celebrity appeal and are successfully doing the jobs capturing market share, profit and even recall. But the endorsement should not sound like a gimmick to the audiences, due to the too much star power. E.g. Amitabh doing ad of Tide, seems like publicity stunt only as the consumer are pretty sure of tide not being used by him.

Now, in spite of the potential benefits resulting from celebrity endorsements, they enlarge a marketer's threat manifolds and should be treated with full attention and propensity. A brand needs to be cautious when employing celebrities to ensure believability and delivery of the proposed outcomes (Byrne, Whitehead and Breen, 2003).

Proof of public demand for icons to look up to is the growing importance of legendary characters as celebrities and their influence over the target segments. As the celebrities cross from a sheer commercial presence to public interests message endorsements, a complete new aspect is added to this course and helps us to have a holistic vision of the impact which celebrities cause in every sphere and segment through their knowledgeable endorsements. The most vital thing to keep in mind is that putting a celebrity in an ad is not an idea in itself. Unfortunately, that’s how most celebrities are being used in Indian advertisements, where they are used just like a prop. Preferably, there must be an idea that relates the celebrity to the product and finally make an appeal to the consumer. 

Presence of a celebrity in the ad should be appropriate. Celebrity endorsement does not guarantee a fool-proof success. The celebrity endorsement strategy must be incorporated with the target market characteristics along with the other elements such as product designing, packaging, branding, and pricing.

2.9 Indian Soft Drink Industry

The 50-bn-rupee soft drink industry in India is growing at the annual rate of 6 to 7%. Around 95% market share is being occupied by Coke and Pepsi combined through franchisees or by self presence. Campa Cola is having 1% share, and the rest is divided among the local players. In India, about 110 soft drink producing units (60% being owned by Indian bottlers) are running, providing employment to about 125,000 people. This market further segregated in two distinct segments such as cola and non-cola drinks. 62% share is claimed by the cola segment, while the non-cola segment includes drinks with orange and mango flavors, cloudy lime, clear lime, and soda.

In India the per capita consumption of soft drinks is around 5 to 6 bottles, which is quite les as compared to the other Asian countries. This industry also supports in the growth of other industries like glass, sugar, refrigeration, Paper and transportation. Soft drinks and aerated drinks were regarded as the products for the middle class and the affluent one in past. But this assumption is no more valid. Such drinks are consumed by all excluding those who cannot pay for any drink. An NCAER study has shown that 91% soft drink sales revenue comes from the lower, middle and upper middle classes. As per the industry estimates, the beverage market should raise with just double rate that of the GDP growth. In short the Indian Soft drink market should grow by 12% whereas it is presently growing at a rate of 6%.

India proved to be perhaps the toughest battle feild for the Cola giants. Presence of Coca-Cola, the world’s number one player in the soft drink industry, in India can be traced a long time back in collaboration with and Indian producer. Then the Indian market was dominated by some local brands, with Limca at the top. Cola flavor was the largest selling flavor claiming a market share of 40%, lemon flavors’ with 30% and other orange drinks with 19% share of the market. Till 1977, Coca-cola remained the leader. But backed by some industrial reforms introduced by FERA i.e. Foreign Exchange Regulatory Act, Coca cola have to take foot back from Indian market. After 16 years, in 1993, Coca cola made a comeback.

Mean while PepsiCo was trying to enter in to Indian market. In between late 80’s and early 90’s, PepsiCo started struggling to an entry in the Indian market. Exit of coke, was a good symbol for PepsiCo. Delhi based pure drinks, launched Campa-cola, just to benefit from coca cola’s exit. By the end of 1970 Campa cola was the only cola flavored drink in the market. In1980, Parle, launched ThumsUp who was another major Indian player. Thumbs Up is a very popular soft-drink in India. Thums up being called as soft drink was opposed by the rest industry as it has a strong flavor. For over a decade, Parle led the Indian soft-drinks market, with its reaching a peak of 70% in1990. Coca-Cola reentered in India after the economic liberalization era, but that time world’s number two players had already established themselves in the industry. Coca Cola changed the strategy and acquired the well flourishing soft drink company Parle. Since then it has been a fight between two American giants, rest were only the peripherals of the two MNC’s. The third biggest player of the world, i.e. Cadbury Schweppes, also tried its fate but Coca Cola swallowed it.

Currently, Coca-Cola is operating all the way through 35 plants and 16 franchisees throughout the country, whereas PepsiCo with 20 plants and 7 more franchisees i.e. 23. Market share of Coca-Cola amounts to be 51%, whereas Pepsi has a share of 46%. There exists a great dispute for the market share claims.

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