Multiple Celebrity Endorsement
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Multiple Celebrity Endorsement An empirical study looking at the Effectiveness of Multiple Celebrities Endorsing a Single Brand, while taking the role of Repetition and Type of Fit into account. Master Thesis of Elise Tijssen Student number: 5947057 Date: 24-06-2016 MSc Business Administration – Marketing Faculty of Economics and Business Supervisor: R.E.W. Pruppers STATEMENT OF ORIGINALITY This document is written by student Elise Hyacintha Sylvia Tijssen who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents. ABSTRACT The use of celebrity endorsement is a popular advertising strategy, nowadays. Especially, since the digital era made the celebrity lifestyle a lot more transparent. Most companies use multiple celebrities to endorse their brand. However, little research has been done to this phenomenon. Based on the associative learning theory, this research also investigates the role of repetition in a celebrity endorsement context. According to this theory, repeated pairings between two stimuli are needed to establish a strong link between the two. The third variable that is investigated in this research is type of fit. Derived from the brand extension theory, two types of fit are distinguished: substitute fit and complementary fit. A substitute fit between endorsers represents two endorsers that express the same association of the brand. A complementary fit represents two endorsers that both fit the brand, but express other associations of the brand and have no overlapping associations with each other. An experiment was conducted to test the hypotheses. To test model generalizability, the study was conducted with two different product categories: clothes and watches. The results show that repeated exposures of one endorser work, as well as different endorsers with a substitute fit. Therefore, this research demonstrated the added value of repetition. Finally, the complimentary fit between the endorsers appeared to be perceived by consumers as a misfit. The concept of complementarity of brand associations on an abstract level appeared to be more complex than initially was thought. The main findings were found in both product categories. That implies that the findings are not specific to a product category, but apply to different categories. TABLE OF CONTENT 1. Introduction 1 1.1. Celebrity endorsement 1 1.2. Multiple celebrity endorsement 2 1.3. Problem definition 3 1.4. Delimitations of the study 4 1.5. Theoretical contribution 5 1.6. Managerial contribution 5 1.7. Research outline 6 2. Brands as associative networks 7 2.1. Brand associations 7 2.2. Customer-Based Brand Equity 9 2.3. Connecting associative networks 10 3. Leveraging secondary brand knowledge 11 3.1. Sources of secondary brand knowledge and fit 11 3.2. Celebrity endorsement as source of secondary brand knowledge 14 3.3. Endorser-brand fit 15 4. Celebrity endorsement 17 4.1. Advantages and risks of celebrity endorsement 17 4.2. Single celebrity endorsing multiple brands 17 4.3. Multiple celebrities endorsing a single brand 18 4.4. Repetition in a celebrity endorsement context 20 4.5. Endorser brand fit and multiple celebrity endorsement 21 4.5.1. Type of fit 22 5. Hypotheses & Conceptual framework 23 5.1. Hypotheses 23 5.2. Conceptual framework 27 6. Method 28 6.1. Research design 28 6.2. Qualitative pre-test 30 6.3. Quantitative pre-test 34 6.4. Main study 43 7. Results 48 7.1. Data preparation 48 7.2. Sample profile 48 7.3. Reliability analyses 50 7.4. Control variable checks 51 7.5. Manipulation checks 54 7.6. Hypotheses testing 69 7.7. Additional analyses 75 8. Discussion 78 8.1. Interpretation of results 78 8.2. Implications 84 8.2.1. Theoretical implications 84 8.2.2. Managerial implications 86 9. Conclusion 89 9.1. Summary and answer to the research question 89 9.2. Limitations 90 9.3. Recommendations for future research 91 Literature 93 Appendix 97 1. Example pre-test questionnaire 97 2. Pre-test results 105 3. Example main study questionnaire 106 4. Output manipulation checks 119 5. Output hypotheses testing 130 6. Output additional analyses 136 1. INTRODUCTION 1.1. Celebrity endorsement The use of celebrities to endorse products, services, or brands is a way of marketing that has been done for decades (Erdogan, 1999). McCracken (1989) defined a celebrity endorser as “any individual who enjoys public recognition and who uses this recognition on behalf of a consumer good by appearing with it in an advertisement” (p.310). In 1983, Michael Jackson changed the game in the advertising world by signing a five-million-dollar contract with Pepsi to be the endorser of the successful ‘New Generation Campaign’. This endorsement deal meant that the pop star was tied to brand for ten years. Regarding money, this deal shattered the record of any other endorsement deal that was ever made (Herrera, 2009). Today, the money Pepsi and other companies spend on celebrity endorsement is even much higher. In 2012, Beyoncé signed an endorsement deal with Pepsi for 50 million dollars (Makarechi, 2012). Even though celebrity endorsement is an incredibly expensive way to create awareness and equity for a brand, it appears a profitable advertising strategy. Just the announcement of an endorsement deal of a company with a celebrity already has a positive effect on stock returns of the endorsed brand (Agrawal & Kamakura, 1995). Six months after the endorsement deal announcement, stock returns of brands that pair up with athletes increase with an average of four percent (Elberse & Verleun, 2012). Today, celebrity endorsement is viewed as a worthwhile investment in advertising (Misra & Beatty, 1990; Agrawal & Kamakura, 1995; Erdogan, 1999; Elberse & Verleun, 2012). Celebrity endorsement has been investigated by many. Most of this research builds upon the assumption that brands and celebrities can be seen as associative networks. When a celebrity is used to endorse a brand, those associative networks become linked to each other. Associations attributed to celebrity endorsers transfer from the celebrity endorser to the endorsed brand and vice versa, when the endorser and the product are combined in one advertisement (Gwinner, 1997). This way, secondary 1 brand knowledge can be leveraged. For example, if a consumer sees Lionel Messi in an advertisement of an Adidas shoe, the associations that the consumer has of Messi are transferred to the Adidas shoe. For this reason, it is important that companies do not randomly pick a celebrity to endorse their brand. A company should pick an endorser that has the associations they want to associate with the brand. In other words, there must be a fit between the endorser and the brand. This is in line with the match-up hypothesis (Kamins, 1990), which suggests that celebrity endorsement is only effective if the endorser has a congruent fit with the endorsed product or brand. This fit is a key factor in the success of celebrity endorsement in advertising (Hsu and McDonald, 2002). 1.2. Multiple celebrity endorsement Many companies elect to have more than one celebrity endorsing their brand. Rolex is a good example of a single brand using multiple endorsers. At one point in time, they used 42 athletes to endorse their watches (Rice, Kelting & Lutz, 2012). With the high amounts of money spent on endorsement deals, it is important for companies to know if using multiple celebrity endorsers is an effective way of advertising. Surprisingly, very little empirical research has been done to the effectiveness of using multiple celebrities to endorse a single brand, compared to using only one endorser (Rice, Kelting & Lutz, 2012; Hsu & McDonald, 2002). However, there are two exceptions: Hsu & McDonald (2002) and Rice et al. (2012) investigated ‘multiple celebrity endorsement’. Still, many questions are unanswered, as the results of both of these researches cannot be generalized to all advertising that uses multiple celebrity endorsers. The research of Hsu and McDonald (2002) examined the multiple endorser strategy with a case study about the ‘Milk Moustache Campaign’. This campaign aimed to “change consumer attitudes that caused decline in per capita consumption of milk and increase public awareness of nutritional facts” (Hsu & McDonald, 2002, p. 21). The campaign was used to create awareness for a certain category of 2 consumption, but not to advertise a brand or product. Furthermore, the research of Rice et al. (2012) showed results that suggested that multiple celebrity endorsement is effective. However, their research could not exclude that the effect they found is a result of repetition. The present study investigates the importance of repetition in the context of multiple celebrity endorsement. In particular, the study will answer the question whether the usage of multiple celebrity endorsers across different ads is favorable for a brand while the number of exposures remains the same. Rice et al. (2012) used multiple endorsers that expressed the same association in their research. However, one may question the benefit of multiple endorsers if every celebrity endorser communicates the same story. Multiple endorsers across different ads could prevent audience boredom. It prevents consumers getting tired of seeing the same endorser repeatedly. Despite that, could it not be more valuable for a brand to use multiple celebrity endorsers communicating different elements of the brand? That way, more aspects of the brand can be covered. Multiple brands use this strategy. Take Puma for example: Usain Bolt and Rihanna are both celebrity endorsers for the Puma brand. Usain Bolt probably adds the association of expertise to the brand, which may make Puma credible as a sports brand.