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Effectiveness of Celebrity Endorsements in context to FMCG sector

Prepared byAakash Goswami Pratik Negi Palak Sheth Rinku gurecha Alpesh Borisa Chetan Rawal

What is FMCG?
Fast Moving Consumer Goods (FMCG), are the products that are sold quickly at relatively low cost. They generally sell in large quantities, so the cumulative profit on such products can be large. Examples: toiletries, soap, cosmetics, teeth cleaning products, shaving products and detergents, as well as other non-durables such as glassware, light bulbs, batteries, paper products and plastic goods.

Introduction to FMCG sector

4th largest sector in the economy A total market size in excess of US $13.1 billion Some of the best known examples of Fast Moving Consumer Goods companies include Procter & Gamble, HERO Group, ColgatePalmolive, H. J. Heinz, Cadbury's, Reckitt Benckiser, Sara Lee, Nestl, Unilever, Coca-Cola, Pepsi, Wilkinson.

Introduction to FMCG sector

It was found out that food and beverages contributed about 36%, which was the maximum in overall TV ad pie of FMCG sector, followed by 26% of personal care products and 13% by hair care. Top advertisers in Indian market are HUL (Hindustan Unilever), Procter-Gamble.

Objectives
To know the impact of celebrity endorsements on brands w.r.t. FMCG sector To know whether celebrity endorsements increase the sales of the company To know and understand whether celebrity endorsements work in India

Hypothesis
Celebrity endorsements does not always have a positive effect on the brand It do has an effect on the sales of the company Celebrity endorsements attracts the customer towards the brand.

Credibility
It is the ability to inspire belief or trust. Thus the consumers accept something as true, if their favorite celebrity endorses any product.

Ensured Attention
The celebrity might bring a polite, considerate or affectionate act. Hence the interest of general consumers increases in a particular product if a celebrity endorses it.

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Higher Degree of Recall

Celebrity endorsement forces the buyers to remember something or bring something back to mind. Eg. When you go for buying kurkure, you recall juhi chawla, may it be Balaji chataka pataka or original kurkure.

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Mitigating a tarnished Image

A celebrity may help in rebuilding the image of a brand. Eg. When coca-cola was image was tarnished by calling it the cold-drink containing pesticides, Aamir Khan helped it to reshape it.

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Psychographic Connect
A celebrity may also help a product in affecting the psychological profiles of potential buyers. Hence it directly affects the marketing strategy. Eg. LUX as a beauty soap.

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Associative Benefit
Just by getting associated to a product, a celebrity may push the sales of any product.

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Rejuvenating a stagnant brand

A stagnant brand can also be extra promoted with the help of celebrities who are popular.

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Disadvantages

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The reputation of the celebrity may derogate after he/she has endorsed the product
A celebritys image may also get tarnished after he/she endorses any product.

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Celebrity becomes bigger than the brand

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Inconsistency in the professional popularity of the celebrity

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Multi brand endorsements by the same celebrity would lead to confusion

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Mismatch between the celebrity and the image of the brand

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When should the celebrities be used?

1. Instant brand awareness and recall 2. Celebrity values define and refresh the image of a brand 3. Lack of ideas to promote a brand 4. Convincing powers of celebrities help a lot

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Conclusion
Celebrity endorsements does not always have a positive effect on the brand Multi endorsements do clutter in the minds of consumer Celebrity endorsements if used effectively facilitates instant recall

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