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Paper Topic:

Dissertation title: Celebrity Endorsements in Marketing Sportswear.

Running Head : Celebrity Endorsement

Celebrity Endorsement in Sportswear Marketing - Significance , Ethical Concerns and Influence on Consumer Behavior

[Writer 's Name]

[Institute 's Name]

Table of Contents

Abstract

Introduction

Key Objectives of Study

Need and Significance of Study

Literature Review

Celebrity Endorsement for Products Marketing -Significance and Impact on Consumer Behavior

Celebrity Endorsement in Sportswear Marketing - Issues and Trends

Celebrity Endorsement and the Ethical Concerns

Research Design

Research Question /Problem Statement

Research Hypothesis

Research Methodology

Case Study - Significance and Relevance to the

Research Objective

Method for Developing Case Study

Sources for Data Collection

Abstract

The dissertation aims at the objective of studying and understanding a commonly practiced marketing strategy of brand promotion i .e Celebrity Endorsement . In this regard the main emphasis of the dissertation is on the significance of celebrity endorsement in relation of marketing sportswear . Its impact on consumers ' behavior and psychology will also be analyzed . The dissertation will also provide an insight of ethics in this context . In to get deep insight over these issues and to have some practical evidences from the field , the dissertation also presents the case study of a renowned sportswear brand so that the marketing strategies adopted and executed by the company can be cited to explain the significance and effects of using celebrity in the marketing of the sportswear . The case study is presented by employing the secondary resources including research journals , company records , news archives and

Introduction

Endorsement is a product announcement channel , in which a celebrity executes as the brand 's representative , certifies the brand 's status and claim by extending his or her individuality , figure in the society reputation and capability in the field to the brand . In the highly competitive market place of today 's the companies and marketers always look towards the ways through which they can attract maximum number of target consumers and can increase the sales and popularity of their product . In this situation the celebrity endorsement in the marketing campaigns has appeared as a significant and effectively proven marketing tool that can grab the attention of the consumers towards certain brand or product and can influence their behavior as well . Thus the companies now days are paying much attention to the endorsement of celebrities in their marketing plans

The sportswear industry likewise all other industries is also facing high competition and new brands are emerging and making their place in the market supported by the technological advancement and globalization In this situation the sportswear manufacturing companies are also facing challenges in form of high competition and these companies are also designing unique and effective strategies to assure their success through the establishment of their brand identity in the market place

The phenomenon of celebrity endorsement works effectively for the sportswear companies as well because people find it quite relevant to see the sports stars or any other celebrity marketing for the sportswear products . The endorsement of celebrities has become a common marketing tool for the sportswear industry and at present there are number of celebrities in different parts of the world that are engaged in contract with different sportswear companies and they work for the promotion of these brands and products

This dissertation is aimed at explaining the significance and effectiveness of endorsing celebrities in the marketing of the sportswear products and its impact on the consumer behavior and brand building process . In this regard the looks at the historical perspective of celebrity endorsement for the marketing of different products to explain how companies realized the importance of celebrity endorsement and how this strategy benefited them in turn of increased sales and brand popularity . Moreover the also looks at the ethical perspective of the entire issue because the companies and the celebrities engaged in the marketing of the brand often face such situation where the moral norms and ethical principles have leading role to play . Thus the dissertation achieve all these objectives by conducting review of the available literature related with the and also by presenting the case studies of three leading sportswear manufacturing brands to trace the impact of the celebrity endorsement on their sales

1 .1 Key Objectives of Study

The dissertation is aimed at understanding and explaining explicitly the significance and effectiveness of celebrity endorsement in the marketing of sportswear products . In this regard while focusing mainly on the sportswear products the dissertation is aimed at achieving following key goals

To understand and explain the significance and effectiveness of celebrity endorsement for the promotion of brands and products

To explain the role of celebrity endorsement in building brand identity

To explain the effectiveness of celebrity endorsement in influencing the consumer behavior

To identify the core ethical issues and problems associated with the endorsement of celebrities in the marketing of products

To collect practical evidences from the business world to prove the effectiveness of celebrity endorsement in rising the sales and popularity of the sports brands

1 .2 Need and Significance of Study

The issue of celebrity endorsement is gaining importance as the competition is rising in the industry and there is great need that the social scientist must explain and prove the significance and practical benefits of celebrity endorsement in the marketing o sportswear . Thus in response to this need the dissertation strives to cover all the important issues related with the and also collect some evidences from the business world to further clarify that how the celebrity endorsement has worked for the promotion and identity building of sportswear brands . There are numerous research studies conducted so far (e .g . Daniella et al , 2002 Tripp et al , 1994 Solomon and Michael , 2002 etc ) that have highlighted the importance of celebrity endorsement for the marketing of products however of the study highlighted this issues along with the ethical considerations . Thus this outcome of this dissertation will provide an opportunity to have deep insight over the issue and will also provide some valuable facts and figures that can help the companies in determining their policies regarding the celebrity endorsement in the marketing and advertisement activities

2 . Literature Review

2 .1 . Celebrity Endorsement for Products Marketing -Significance and Impact on Consumer Behavior

Christina Schlecht writes that celebrities are those people who possess public recognition . Their general attributes such as attractiveness and extraordinary lifestyle are just a few examples . It is observed that within corresponding social group celebrities usually differ from the social norm and possess a high degree of public awareness (Schlecht Christina , n .p , 2003 ) Daniella et al (2002 ) further explain that the celebrities have great influence on the decision making of the consumers and it is believe that when a celebrity engage him /herself in the promotion of certain brand of the sportswear , the reputation , name and fame of the celebrity is linked with that particular brand and people are convince to look at that particular product brand based on the appealing and admirable qualities of the celebrities the product is supported and promoted among the general public (Daniella et al , p19 2002

Daneshvary at al (2000 ) explains that many of the celebrities are playing the roles of the brand ambassadors of different brands and it shows the increase in the trend of celebrity endorsement for the marketing purpose . The celebrities now days not only just act as a model to promote a certain product but they adopt well planned strategy so that they can work to maximize the popularity of the product and in this way they also rise their own popularity as well as brand equity because the successful endorsement of a celebrity in the marketing of a product pave new ways for the celebrity in terms of new agreements and deals (Daneshvary at al , p203 , 2000

Tripp et al (1994 ) pointed out that the companies and the marketers now see the celebrities as a vehicle that allows them to easily reach and influence their target consumers . People use to associate the product with certain personality and in this situation the companies are well aware that they must build up an emotional connection of the brand with the consumers and the personalities of the celebrities help the marketers in doing so (Tripp et al , p535 , 1994 ) Walker et al (19920 revealed that in the highly competitive market place of today the companies have the main task of influencing the behavior of the consumers and for this the image and attractions of the celebrity can help the companies a lot that 's why the markers have assumed that for successful marketing of their products celebrity endorsement is a key strategy that can bring them success in terms of increased sales and brand popularity (Walker et al , p69 , 1992

Linda Flood (2002 ) pointed out that the trend of using the fame and reputation of the celebrities to promote particular brand and product is not a new concept but even as far back as 1870s there are some examples where the companies make contracts with the celebrities so that they can promote their product . In 1870 Mark Twain did the publicity for the Remington typewriter by saying that he composed Tom Sawyer using this typewriter and as a result there was increase in the sales of the typewrite . In the same way Henry Ward Beecher appeared in the advertisement of Waltham watches in weekly Harper . The trend of endorsing celebrities in the advertising campaigns gets momentum as the time passes . In 1905 comedians Harry Bulgerinitsads and Fatty Arbuckle were enforced in the advertisement of Murad Cigarettes . This marketing strategy proved to be attractive for the consumers and due to the benefits and improved sales of the product due to celebrity endorsement the companies keep on endorsing the celebrities for the marketing of their brands . It is estimated that in US the companies enjoy three times better effectiveness in their selling process as a result of endorsing celebrities in the marketing campaigns (Linda Flood , p1 , 2002

Ohanian and Roobina (2006 ) revealed that the trend of celebrity endorsement in the marketing is rising and also proving significant for the brand that 's why the celebrities are also getting good money offers to make contract with different companies to promote their products . The researchers estimated that in Ireland the celebrities are getting above ?5 ,000 and ?200 ,000 for the advertisement of the brands and there is increase in this amount as the popularity and significance of the celebrity enforcement is proving to have great impact on the company sales (Ohanian and Roobina , p46 , 2006 ) Till and Busler (2004 ) revealed that use of celebrities to market the product is an effective but at the same time very expensive way they can quickly rise the pro of the brand that 's why most of the advertisement messages are now days filled with the close ups of different celebrities promoting different brands (Till and Busler , p576 , 2004

Joseph at al (1992 ) explains that the celebrity endorsement in the advertisements is led by a simple phenomenon that when a company recognizes that its potential and existing consumers like a celebrity it offers that celebrity some amount of money against which he or she promote that product and the consumers after watching the celebrity in different ads and pictures feel close with the celebrity and convince to buy the product of that particular brand . In this way the consumers are admired by the personality of the celebrity and the company enjoys rise in the sales of the products (Joseph at al , p45 , 1992

2 .2 Celebrity Endorsement in Sportswear Marketing - Issues and Trends

Sports create celebrities . People usually want to associate with these celebrities and star athletes . Most of the sports stars apparently achieve success with their intense effort and remarkable skill . Sports stars possess many of the personal attitudes society admires Advertisers have tapped into the phenomenon by endorsing sports celebrities to promote products of different forms , from shoes to underwear . Sportswear marketing is a fastest developing area of marketing communication . It presents a different style of communicating with consumers which not necessarily follows all of the rules of other classifications of marketing communication (Burnett Menon , 1993 Jones , Bee , Burton Kahle , 2004 . Solomon and Michael (2002 ) explain that the use of celebrities and specially the sports starts has become a very common as well as very successful marketing tool for the sportswear companies now days and there is higher degree of involvement of the celebrities in the marketing of these brands . It is now common to observe that many of the celebrities use to wear the products of different sportswear manufacturing companies on as well as off screen and this trend is strengthening the relationship between celebrities and the manufacturers of the sportswear (Solomon and Michael , p87 , 2002

Linda Flood (2002 ) pointed out that at present there are many celebrities in different countries that are taking part in the advertising and marketing campaigns of the sportswear for example in 2002 Irish songbird Samantha Mumba signed the deal with one of the leading sportswear manufacturer company Reebok ' and against an undisclosed sum of money he agreed to act as the new face of Reebok in Ireland and in the Britain . In the same way the members of West life that was a popular pop musical band signed deal with Adidas and against 420 ,000 they engage them in an agreement to use the sportswear of the company in their world tour . Microsoft signed an agreement with Robbie Williams and for stg ?500 ,000 sponsorship he decided to promote the console of the X-Box games in his world tour (Linda Flood , p1 , 2002 ) In the same way the Female athlete Venus Williams , tennis player and Wimbledon championship winner in 2002 signed a contract for five years worth 40 million with the sportswear manufacturer company Reebok International in the year 2002 (Hsu et al , p19 , 2002

The marketing experts believe that the enforcement of the celebrities has a positive impact on the sportswear brand that mostly results in the greater awareness among the public about the brand name and its products . Thus the marketing experts prefer to use the celebrities to influence the behaviors of the consumers (Linda Flood , p1 , 2002 ) The significance of celebrity inducement in the marketing campaigned has proved beneficial and effective in rising the overall sales of the product . The sales statistics of many of the sportswear company confirm that the endorsement of celebrities has resulted in the increased sales of their product for example in the year 2001 famous celebrity David Beckham signed an agreement with the police sunglasses to promote the product against the amount of stg ?1 million-a-year and by the end of the year the company recorded around 50 percent rise in the sales . In the same way Adidas also recorded rise in the sales after the signing the deal with England capital for stg ?3 million-a-year . Christina Minor (2003 ) pointed out that the an interesting figure related to the sportswear industry indicates that 80 percent of the athlete wear market in make up by the women that buy apparels for themselves or others . In this situation the marketers are also noticing that the attention of the women can be easily captured by endorsing celebrities in the sportswear advertisements and as a result tennis star Anna Kournikova , athlete sisters Venus and Serena Williams and golf pro Annika Sorenstam can be commonly seen in the advertisements of different sportswear brands (Christina Minor , n .p , 2003

2 .3 Celebrity Endorsement and the Ethical Concerns

Friedman at al (1999 ) revealed that the growing trend of celebrity endorsement in the sportswear and other products marketing have given birth to the issue of ethical and moral concerns as well and it is also very essential that the markets and the celebrities must care about the moral perspectives of the entire scenario . There are some companies that use to do contracts with the celebrities just to compete with other companies in endorsing expensive celebrity and that celebrity might not have link with the target consumers of the brand but to give the impression of endorsing the most expensive celerity the companies might do this mistake and there are no fixed measures , rules or regulations that can prevent the company to do so

At the same time another ethical issues arises when the celebrity acting as the brand ambassador of certain product in engage in some negative type of activity and as a result the company also suffer from loss in reputation . This is because there are no rules to stop the celebrity to get engage in certain activity that can harm the image of the brand also . Thus the companies have to be very careful in selecting and endorsing the celebrities in the marketing activities of their brand

Kehle et al (2005 ) explains that despite the increased trends of celebrity endorsement in the marketing activities , it is very essential that the companies have to remain careful in making a long term contract with any of the celebrity because it may cause problem for them as a result of decline in the celebrity popularity or good reputation . For example Pepsi signed contract with Michael Jackson against 20 million to sponsor his world tour but after very short time he was charged with the allegation of child abuse and the contract came to an end . In the same way Mike Tyson did a contract with Pepsi but son he was found accused of assaulting his then wife Robin Givens . These are the example from which the companies shave to learn the lesson that the celebrity endorsement is not always beneficial but it might cause the company loss in good will due to some act of the celebrity (Kehle et al , p945 , 2005

The president of Atlanta-based Continental Group of Companies Henry Rischitelli also suggested that there must be mortal clauses in written form that can help both the companies and the celebrities in securing their reservations on the moral and ethical issues related with the advertisement of the brands and the endorsement of the celebrity . These morality clauses are also very essential because they can allow a company to void a contractual relationship with an endorsement partner in a legal and court enforceable way and also clarify the matters related with the clarification and declaration for Refunds of all inactivated prepayments must be declared and rights to liquidate inventory that can 't be pulled from shelves after you terminate the pact . The endorser must also agree any legal proceedings take place in arbitration . Smart marketers include cure periods in the contracts These periods allow a celebrity some specific amount of time to cure the problem . Many times allegations are not found . Sometimes media reports are based on unreliable sources . In some other cases , a public image has been badly tarnished and there is no way to cure a situation

3 . Research Design

The dissertation is aimed at unfolding various aspects of celebrating endorsement in the sportswear marketing , its significance , influence on consumer behavior and ethical concerns . In to achieve all of these above mentioned objectives , the dissertation employs qualitative research methodology and the key goals of the dissertation are achieved through conducting two qualitative researches . This approach implies the search of information which aims to interpret , investigate and understand the phenomenon through an inside perception (Patel Tebelius , 1987 ) Thus , we can understand that our research is qualitative . The posed research questions have provided the answers which could not be measured in numbers . The main objective of this research is to develop an understanding of celebrity endorsement in marketing , the qualitative approach suits us better

As per requirement and main aimed of the dissertation it is observe that the quantitative research will not be as helpful as the qualitative research because there is need of proving the issue through supporting them with solid evidences and logics and in this regard the qualitative research can be the appropriate approach . Berg (1989 ) has identified that the qualitative research could be of many types and the researcher or the social scientists have to select from these methods according to the requirement of their . The different methods of conducting qualitative research include case study , literature review , natural experiment , participant observation , interviews based , secondary analysis of data or the combination of these . Each of these strategies has got its own advantages and disadvantages depending on the following conditions

Type of research questions

The investigator 's control over the actual behavioral events

Degree of focus on contemporary events

The objective of this thesis is to have a better understanding of celebrity endorsement and its impacts on several attributes . Thus , we do not need to have control over behavioral events . So our research strategy could be the experiments available to us through varied sources . We have taken case studies of different celebrities and organizations into our account to discuss the subject matter of our analysis

For this dissertation it is found that the research objective would be best achieve by employing combination of qualitative research methods and two methods secondary analysis of data and case study ' are selected as the research methods for conducting the study

3 .1 . Research Question /Problem Statement

The research study is focused on studying the significance effectiveness and role of celebrity endorsement on the sportswear brand marketing and in this regard the research is aimed at finding out the answers of following research questions

What is the significance of celebrity endorsements in marketing strategy

What ethical aspects to be considered while endorsing a celebrity

What is the role of celebrity endorsement in the building the brand identity and influencing the consumer behavior

3 .2 . Research Hypothesis

In the light of the research objectives and the research questions there are following research hypotheses that are to be tested in the light of the findings of the research study

Hypothesis I

Celebrity endorsement has positive impact on the brand image and reputation of the company

Hypothesis II

Celebrity endorsement influences (both negatively and positively ) the behavior and decision making of the consumers

Hypothesis III

Celebrity endorsement increases the popularity and sales of the sportswear product

3 .3 . Research Type and Method

In to decide the type of the research it is necessary to understand the main types of the researches so that this understanding can help in determining that which type of research will be the most appropriate type for this dissertation . Following are the main types of the researches

Exploratory Research : According to Reynolds this type of research stands for the investigator just to look around regarding the needed phenomenon , for developing suggestive ideas (Reynolds , 1971 . Its main objective is to collect maximum information related to a specific problem . This type of research is usually conducted for uncommon problems or when the available information is not much reliable and absolute . This technique is most suitable for conducting interviews

Descriptive Research : The purpose of this type of research is to provide a of different phenomenon related to different individuals events and situations . The main objective is to build up empirical generalizations (Reynolds , 1971 ) It is commonly used for searching secondary data for well structured problems (Aaker Day , 1990

Explanatory Research : Its purpose is to build up precise theory which is used to describe the empirical generalizations (Reynolds 1971 .On this basis empirically tested hypotheses are formulated by the researchers (Patel Tebelius , 1987 . This type of study is effective to focus cause and affect relationship

The research questions of this study clearly indicate that this thesis is basically descriptive , but to an extent exploratory and explanatory as well . Descriptive in the sense that we intend to describe the research area and to draw conclusions on the basis of data collected . It is exploratory in the sense that it aims at gathering maximum information related to a specific problem . Moreover when we give answers to the research questions in the light of our findings we actually create a relationship among different variables . Thus the study is partly explanatory also

The research is a qualitative study that is done through employing two methods . The secondary analysis of data is selected to have deep insight over all the issues related with the like the historical perspective of celebrity endorsement in the marketing , ethical concerns and benefits that the companies commonly enjoy as a result of contracting with a celebrity for the marketing of their brand or product . Miles (1994 ) has explained that the secondary analysis of data basically helps to reanalyze the data that is already compiled by other researchers and organizations to meet the requirements of their own study or data base . Thus it is found that the secondary analysis of data is a significant method of conducting qualitative research as it allows to conduct the review and analysis of the secondary data and to have a critical look at the existing researches and documents related with the . It is the summary and analysis of the existing information . The secondary analysis of data is conducted for the dissertation to get a deep insight of the issues covered in the dissertation and to collect information about celebrity endorsement in the marketing activities specifically for the marketing of the sportswear products

In addition to this the dissertation also present the case studies of top sportswear brand to provide information about their marketing strategies of endorsing celebrities and the effects of these strategies on the popularity , brand stability and sales of their products . Thus case study is another qualitative research method employed in the dissertation along with the secondary analysis of data because these two were found as the most appropriate methods to achieve the decided objectives of the dissertation

3 .4 . Case Study - Significance and Relevance to the Research Objective

The main research method selected for the dissertation is Case Study i .e . the study will make extensive use of the case study as a research method . In this regard the top 5 brands of sportswear companies will be selected and their marketing strategies focusing on the celebrity endorsement will be studied and the effects of these strategies on the sales , popularity and consumer behavior will also be studied with the help of the facts and figures maintained by the companies it self and the research indexes and journals

Case study is a common method that is used by the researchers for many years to analyze contemporary real-life situations and it is a significant tool that helps in gaining understanding of a complex issue or object . Robert Yin (1984 ) explains that case study is an empirical study that aims at investigating any contemporary phenomenon in its real life style context (Yin , 1984 ,

. 23 . Keeping in view the significance of case study it is found that it is a relevant method for studying the celebrity endorsing strategies and effects of these strategies on the top three sportswear brands of the world specifically those operating in UK . The choice of selecting case study as the most suitable method of conducting this research is further confirmed in the light of the following important functions pointed out by Yin (1994 ) point out that a case study can perform for a research

It explains complex causal links in real-life interventions

It describes the real-life context in which the intervention has occurred

It describes the intervention itself

It explores those situations in which the intervention being evaluated has no clear set of outcomes (Yin ,p24 , 1994

The case study can be single or multiple as in this dissertation we are going to study the celebrity endorsement patterns and their effects adopted by three sportswear brands that 's why it is going to be a multiple case study

3 .5 . Method for Developing Case Study

The case study is decided to be a multiple case study in which there are three sportswear manufacturing companies are selected and then studied with regards to the celebrity endorsement and its effects in the sales and brand identity of these companies . In to develop the case studies the first step is the selection of the companies dealing in the manufacturing of the sportswear so that these companies can be studied with regard to celebrity endorsement for marketing . For the selection of these three companies the international company 's index is reviewed and top three sportswear product manufacturing companies are selecting from the list with regard to their annual revenues and company position . The three companies selected for the case study are as followed

Adidas

Reebok

Nike

After selecting the companies the next step was to decide the time period that will be studied to find he evidences about the effects of celebrity endorsement by these companies . Thus it was decided that all the marketing strategies adopted and implemented by these three companies during the last 30 years will be studied so the time period was decided (1988-2008 . It was decided that in these 30 days all the marketing strategies adopted by these companies will be studied and those involving the endorsement of the celebrities will be sorted out Three lists will be prepared for each of these three companies that will contain the names of the celebrity endorsed by these three companies the time period for which the contract with these celebrities was made and the amount of money (if available ) for which the celebrity agreed to promote that brand

This list will provide a quick view over the celebrity endorsements made by these three companies and the time period for which these celebrities work for the promotion of these brands . In the next step the performances of these three companies in terms of profitability , sales and general popularity will be studied in the specific time periods when there was a celebrity endorsed in the marketing of the brand . This performance will be compared and evaluated with the performance of the company within the years when there was no celebrity or another celebrity endorsed by the company . In this way the analysis of the performance of these companies will be made and then compared with each other t find out that which of the company has endorsed the celebrity to get maximum benefits and which step has captured the people attention and influenced their behavior

In addition to this an overview of the entire time period i .e . the decided 30 years will also be made and any case related with the ethical issue is found happened in these years then it will also be discussed and the way company deal with the issue will also e analyzed to have further insight over one of the main objective of the research

3 .6 . Sources for Data Collection

Yin (1994 ) identified that in to present a case study it is very important that data should be collected from six different sources These sources are

Documents

Archival records

Interviews

Direct observation

Participant-observation

Physical artifacts

However it was also clarified by the research that it is not necessary that in each case study all of the above mentioned sources must be used however some of them are generally followed in many of the case studies For this research the newss , company records , direct observations and documents are selected the main sources for the data collection Moreover to conduct the secondary analysis of data books , research journals , magazines and web based information portal are accessed and information is collected from these sources to conduct the secondary analysis of data

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