Price: 2000 Naira (BSC, MSC)

ABSTRACT

In a bid to produce and market their goods and services in the most successful manner, most business organizations resort to the use of celebrity advertising to realize their goals and objectives. This research work under took an indepth study on the use of celebrity endorsement for effective celebrity brand advertisement. The research was prompted by the need for firms to produce quality products, select celebrities that are most apprpropriate for their brands’ endorsement and also the need for them to monitor celebrities’ activities, especially considering huge amount used in enrtering into contract with the company. The selected beverage firms studied were 7Up bottling company and NBC ltd in southeast geo-political zone of Nigeria. Today most consumers are exposed to alternative products and firms strive to employ the most effective methods, strategies and programmes to ensure consumers remain loyal to their brands. In order to achieve this, the use of celebrity endorsement has become a winning formular, especially for beverage firms. Ccelebrities posess certain attributes that are transferred to the brands via endorsement .The question now is, are these qualities actually transferred through the process of endorsement, or are they just formalities without having any positive influence on their targeted consumers. This led us to formulatie objectives and hypotheses, which include, to determine the extent of perception of consumers of beverages on the use of celebrity advertising for brand endorsement; to a certain the significant relationship between the celebrity advertising and brand preference of beverage industry in Southeast; determine the extent to which celebrity endorsement influences consumers preference of firms’s brands; determine the extent to which celebrity advertising facilitate brand switch, and finally to ascertain the match of celebrity personality on the endorsed brands of the beverages in south-East Nigeria. The researcher adopted discriptive research, while primary data was collected from the respondents through the use of questionnaire, and the secondary data, was through related text books, internet material, journals, etc. Two population sizes were used, with sample size of 400 and 94 for consumers and management respectively as derived from Taro Yamane and proportionate sample sizes. The reliability test was measured using cronbach Alpha coefficient method, while T .test, PPMC and chi square were used in testing the hypotheses. Tables, simple percentages and charts were used to present and analyzed data. The result revealed that; the perception of consumers of beverages on the use of celebrity advertising for brand endorsement in south-East Nigeria was significant (F = 19.376, P

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study The contemporary society is characterized with globalization and competition, because most consumers are exposed to alternative product and these propel business organizations to employ the most effective methods, strategies and programmes in producing and marketing their products and services. In a bid to produce and market these products successfully to attract customers’ attention, advertising campaign managers have to differentiate themselves from others to achieve this objective. The challenge of the marketer is to find the hook that will hold consumers attention. Fortunately, the use of celebrity endorsement has been found as a veritable tool and an effective strategy. Every day, consumers are exposed to thousands of images and voices on television, radio, magazine, newspapers, websites and billboards and every brand attempt to steal atleast, a person’s unsuspecting time to inform him of the amazing attribute of their brands. Nwosu (2006) also observed that contemporary society is characterize with great quantities of not just products, but brands of uncountable numbers, not just from the domestic market, but also from the globalizing market of the world. All these occur in a world with dwindling disposable income, unprecedented increase in consumer expectation, consumer movements, government tight regulation and increase in monetization of virtually all facets of human endeavor. In the face of all these, consumers are becoming more discerning than ever, and firms not only communicate to the target market, but do it in most persuasive manner to achieve the desired goal, which is a positive change in both attitude and behavior of the target audience. In this conventional time, people tend to ignore all commercials and advertisements while flipping through magazines, newspapers, or viewing television, but even then, the glamour of a celebrity seldom goes unnoticed. The use of celebrity endorsement for advertisement and its subsequent influence of a company’s brand are of great significance.Companies hire celebrities from particular fields to feature in their advertisement campaigns because these endorsers are seen as being dynamic with both attractive and likeable qualities and companies use their activities to transfer these qualities to their products, by matching the images of the products with the celebrities images, which tend to persuade consumers to fixed their choices from numerous and competing brands. Huge sum of money are invested on celebrities by companies to enable them align themselves with these endorsers whose qualities are transferred into these brands for huge profit. Furthermore, because of their fame, celebrities not only serve to create and maintain attention, but also help achieve high recall rate for these brands. No wonder, Aristotle said, “Beauty is a greater recommendation than any form of introduction” Every brand has an image and the consumer try to consume brands that have maximum fit with their personality image. The celebrity endorser fit in between these two interactions where he tries to bring the image of the product closer to the expectation of the consumer by transferring some of the cultural meanings residing in his image to the product with the purpose of entrusting these products that worked for him over to his fans. Celebrity endorsement is powerful, and this strenght is offered by the Instant awareness, knowledge about the brand and easy recall of the beauty and elegance of the celebrity endorser via the endorsement. Also Values and image of the brand is defined, highlighted and refreshed by the celebrity which add new edge and dimension, credibility, trust, association, aspiration and connectivity to brand belief, efficiency and new appearance that will result in at least, trial usage. 1.4 Statement of the Problem Celebrity endorsement is a tool for consumer exposure in the areas of information, education, and persuasion for the patronage of a firm’s products and services. Undoubtedly, the expectation of every meaningful business organization is to thrive successfully in a competitive business environment.This can only be achieved via gaining market acceptance and brand preference. Consumers always approach the market place with well defined and established sets of taste and preferences (Hoyer and Brown, 1990). This makes it difficult to position products in already flooded market. Gone are the days that producers will always say,”consumers, beware” We are in the era that consumers say,”producers beware’This is because there are so many alternative and competing brands crying out to be heard and noticed and it is only dynamic marketers who understand costomers’ supremacy can make headway in this competition and succeed. Today, consumers are educated and well informed about their needs, and firms employ the best strategies to ensure consumers prefer and remain loyal to their brands. Consumers can be manipulated by positioning what they want to see, feel or hear, at the right time, in the right place and at the best manner so as to create a positive impact in the minds of consumers. Brands with celebrity endorsement can only receive attension when such brand is perceived as having a good quality by consumers.This brings us to the first problem of this work which is inability of firms to produce quality products to boast their brand. Most marketers do not seem to care about consumers’ wellbeing when producing their products; they seem to be operating in the era of production concept, when, whatever is produced is shifted to the market for consumers, their confident is that since well celebrated celebrity will endorse the product, it must be given attension, but they seem to forget that consumers are educated and also know that these celebrites are paid huge amount of money to advertise thsee products. Although celebrities are full of cultural meanings and aura, and they also transfer this aura to the product via endorsement, it is only when a quality product is produced that this great influence can be achieved. The second problem this research seeks to solve is the problem of celebrity ‘over shadowing.’ Most celebrity advertising experience this because of lack of ‘fit’ between the celebrity, endorsed brand and the target consumers. Celebrity over shadowing occurs when the attention of the advertisement shifts from the brand to the celebrity. Many celebrity endorsements fail because marketers identify celebrities they like in an emotive and unresearched manner, and then create advertisments to force-fit the celebrities into the creative concept. Hawkins et al (2001), insist that using a celebrity unrelated to the product shift the attention of the customers to the celebrity, rather than the brand and this affect the intended message negatively. Examples can be seen in Osuofia’s mismatch adverts in some of the products he endorsed, which include; harpic toilet cleaner, Antigal antiseptic soap, Emjay tomato paste etc.In Nigera, we are gender sentitive and when a wrong gender is used, especially for advert, it shifts the attention from the brand to the celebrity and also reduces the image of the endorser, the brand and the firm. The final problem this research seeked to solve is inadequate monitoring of the celebrities’ activities to know either when the celebrities are being over used or when there is a scandal on any of these celebrities also, whether they are actually using the products they are endorsing. Over use of a particular celebrity causes celebrity trap. And this a situation where celebrity becomes an addiction for the marketing team and the task to find substitute become more difficult, leading to surfeit of celebrity. Again, if a celebrity has a scandal, the integrity of such celebrity is at risk because such scandal can be transferred to the brand, making it difficult to get consumers’ attention on such brand.Some celebrities endorse one brand and use another. Adequate monitoring has to be mounted on these celebrities, because a celebrity’s use of a competitor’s brand means the competitor’s brand has a better quality, and that’s a bridge of contrct which can cause brand switching of customers to the competitors’ brands. It is against these backdrops that the influence which celebrity endorsement has on brand preference became the focus for this research works. 1.5 Objectives of the Study The broad objective of this study is to determine the influence of celebrity endorsement on consumer’s brand preference of sellected beverage brands in southeast, Nigeria. The specific objectives however include; 1. To determine the extent of perception of beverage consumers on the use of celebrity for product endorsement in south east, Nigeria. 2. To ascertain the significant relationship between celebrity advertising and brand preference in the beverage industry in southeast, Nigeria. 3. To determine the extent to which celebrity endorsement influences consumers’ preference towards a company’s brand in southeast, Nigeria. 4. To determine the extnt to which celebrity advertising facilitates brand switch by beverages consumers in south east Nigeria. 5. To ascertain the match of celebrity personalities on the endorsed brands of beverage 1.4. Research Questions To achieve objectives of this study, answers to the following questions will be sought for: (1) To what extent do consumers of beverages in south east, Nigeria have same perception of the use of celebrity endorsement for a company’s product? (2) What is the relationship between celebrity advertising and brand preference in beverage industry in south east, Nigerian? (3) To what extent does celebrity endorsement influence consumers’ preference towards a company’s brand in south east, Nigeria? (4) To what extent can celebrity endorsement facilitate brand switch in Nigeria beverage industry? (5) To what extent is celebrity personality, a match to the endorsed brand in south east Nigeria beverage industry? 1.5. Research Hypotheses The following hypotheses were formulated and tested at 0.5 level of significance. (1) Celebrity endorsement does not significantly have same impact on consumers’ perception towards a company’s brand in south east Nigeria beverage industry. (2) Celebrity endorsement does not have any significant relationship between celebrity advertising and the endorsed brand in south east Nigeria beverage industry. (3) Celebrity endorsement does not have a significant influence on consumers’ preference towards a company’s product in south east Nigeria beverage industry. (4) Celebrity endorsement does not significantly facilitate brand switch in south east Nigeria beverage industry. (5) There is no significant relationship between the match of celebrity personality and the endorsed brand in south east Nigeria beverage industry. 1.6. Scope of the study The scope of this study is beverage industry in south east Nigeria, and the firms studied were 7 Up Bottling Company, makers of 7Up soft drink, Pepsi, Miranda, etc and Nigeria bottling Company ltd, makers of coca cola soft drink, Fanta, etc. The theoretical scope is the various influences celebrity endorsement has on consumers’ brand preference. 1.7. Significance of the Study It is imperative to carry out this study as to have a detailed understanding of the influence of celebrity endorsement on the behavior of consumers in terms of the way they prefer and choose their brands. The finding of this study will be of immense benefit to the following; the companies and their stakeholders, advertising agencies; consumers of beverage products; the government, researchers and students. The findings of this study will provide Seven-Up Bottling Company and NBC plc better ideas on how best to explore advertising techniques in positioning and repositioning their products in the minds of their customers. By this, they will be able to develop effective advert programs and also digress towards other elements, including production of quality products, selection of the most appropriate celebrity for their products, knowing when to hire celebrity, and being sensitive to know when to terminate such contract. The advertising agencies will benefit from this study because; it will give them ample opportunities to understand consumer behavior (consumer buying process and determinants of consumer behavior) and with the acquired knowledge, they will be able to match the appropriate brand with the appropriate celebrity, and also know the right appeal that influences consumers’ attitude towards the advertised brands. To the consumers, the study will provide them with the best criteria of selecting brands, among numerous alternatives. It will also provide guide to consumers, as well as enable them to be more meticulous, especially while going through the adoption process of anticipating, acquisition, actualization and accommodation. This ways, consumers become more familiar with their ideal products and probably build their brand preference based on awareness and assurance of the brand’s quality. To the researchers and students in marketing, and other related disciplines, this study will stand as a good research topic and material, if they intend to expand their frontier of knowledge. More interestingly, the findings will contribute to the existing literature in relation to the influence of celebrity endorsement and brand preference criteria by consumers. It will also bridge the existing gap in the previous findings. And in our dynamic world, this study becomes a platform for academic pursuit of excellence. 1. 8. Limitations of the Study For a study of this nature, the researcher would have wished to collect as much data as possible, to cover the entire nation, but constraints in collecting larger data and other constraints were met but the researcher was able to manage these constraints, and came up with something wonderful. 1.9. Definition of Terms For the purpose of this study, the researcher uses operational definitions, which are the definition of terms in line with the researched topic. These operational words include; Advertising – Advertising is the message which is communicated through the media, paid for by an identified sponsor and directed to a target audience with the aim of imparting vital information about a company’s product and services. Advertising Agencies – Advertising agencies are professional firms that plan, create and place advertisements into the media houses, on behave of its clients. Consumer Behavior – consumer behavior are the behaviors consumers/buyers display in searching for, buying, using, evaluating and disposing of products, services and idea, which they expect, will satisfy their needs and wants. Persuasion – Persuasion is any instant, in which there is an active attempt to change a person’s mind. Perception – Perception simply refers to how one sees or views a company and its offerings. Brand – Brand is a name, term, sign, symbol or design or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. Celebrity Advertising – Celebrity advertising is the use of a public figure’s likeness for the purpose of selling a product or service. Celebrity – Celebrities are people who enjoy specific public recognition by large number of certain group of people. Brand Image – Brand image refers to the schematic memory of brand. It contains the target market’s interpretation of the product’s attributes, benefits, usage situation, users, and manufacturer/marketer’s characteristics. Brand Equity – Brand equity is the value customers assign to a brand, above and beyond the functional characteristics of the product. Brand Preference – Brand preference is the selective demand for a company’s brand rather than its product. The degree to which consumer prefers one brand to another. Advertising Frequency – Advertising frequency is the number of times, within which a specified time period, an average person or household is exposed to advertisement. Celebrity Trap – Celebrity trap happens when the celebrity becomes an addiction for the marketing team and the task to find substitute becomes difficult, leading to surfeit of celebrity. Celebrity Credibility – Celebrity credibility refers to the skepticism by the consumers regarding celebrity, especially when there is anything negative about the celebrity association with the brand in news. Source Credibility – A credible source in communication is one that is believed or perceived to, Possess the necessary ability for what it is being said, is trust worthy, objective and honest, is likeable and attractive. Celebrity Fit – Celebrity fit is when a celebrity personality matches the product he is endorsing. Overshadowing – Overshadowing is when the attention of the consumer shift from the brand to the celebrity endorsing the brand. 1.10. Profile of Selected Beverage Firms Profile of Seven-up Bottling Company The seven-up bottling company Plc is one of the largest independent manufacturers and distributors of all the well known and widely consumed brand of soft drinks in Nigeria. Their brands include, Pepsi, seven-up, Miranda, team, mountain dew, which are produced and marketed in their manufacturing plants. Their products are also marketed through their two hundred distribution centers that are spread all over Nigeria. They have three thousand, five hundred employees. A Lebanese, Mohammed El-Khali, who came to Nigeria for the first time in 1926, founded the company. Mohammed is the father of the company’s current chairman, Faysal El-Khali. The company metamophosized from a very successful transport business, in a bid to diversify the largest transport company in the entire West Africa On October 1st 1960, Nigeria experienced the birth of soft drink giant, as the first bottle of seven-up rolled out from the factory located at Ijora. As at today, the company has its headquarters in Beirut and operationally base in three African countries which include: Nigeria, Tanzania and Ghana. Mission and Vision of Seven-up Bottling in Nigeria (a) Vision To be the most admired and innovative company in Nigeria (b) Mission Inspire and refreshes a youthful life-style core value Commitment and Ownership: Our people will describe the company as “our company”, reflecting the entrepreneurial spirit and sense of ownership, caring and rewarding, as the people in the company experience a feeling of brotherliness and freshness in their relationship with one another in building the organization. Teamwork: each of the employees recognizes the value of the skills, ability and cooperation between relevant persons and units, towards denelering seamless and superior values. Integrity: Our people are reputed for uprightness and high ethical standards. Trust: The management has confidence that employees will act in the best interest of the company. Employees also believe that management will not harm them, but will do everything positive to protect and further their interest. Profile of Nigeria Bottling Company Ltd The Nigerian Bottling Company Ltd was incorporate in November, 1951, as a subsidiary of A.G Leventis group with the franchise to bottle and sell Coca-Cola products in Nigeria. Production began in 1953 at a bottling facility in Ebutte Meta, and over the years, production capacity has grown and it presently has thirteen bottling facilities and over eighty distribution warehouses, located across the country. Since production started, NBC Ltd has remained the largest bottler of non alcoholic beverages in the country, in terms of sales volume, with about 1.8 billion bottles sold per year, making it the second largest market in Africa. Today, it is a part of the coca cola Hellenic Bottling Company, one of the NBC Company’s largest anchor bottler, worldwide. Coca-cola Hellenic operates in twenty-eight countries and serves more than five hundred and sixty million consumers and with 2.1 billion unit cases sales in 2009. NBC Company is driven by over six hundred employees, a culture of passion for excellence, sophisticated technology and the best distribution network in the country. With thirteen high performing bottling plants, over eight deports, and over two-hundred thousand sales outlets nation-wide. The company supply some of the most ubiquitous and best known brands, including, coca-cola, fanta, sprite, Schweppes, Eva water and 5-alive. Evolution of Beverage Industry. The industry began in mid 1900‟s with leading companies like Pepsi Co. and Coca- Cola controlling the beverage business sector with sweetened soft drinks and carbonated soda water. American audiences attached excitement and convenience to these popular drinks, and a variety of soft drink brands began to originate, such as Dr.Pepper, Sprite, etc. The beverage industry has undergone rapid expansion over the last decade. The only obstacle for these beverage companies was the high number of calories and sugar levels their drinks contained; a drawback for health-conscious consumers. A soft drink (also called pop, soda, coke, soda pop, fizzy drink, or carbonated beverage), is a non-alcoholic beverage that typically contains carbonated water, a sweetening agent, and a flavouring agent. The sweetening agent may be sugar, high-fructose corn syrup, or a sugar substitute (in the case of diet drinks). A soft drink may also contain caffeine or juice and products such as energy drinks, Kool-Aid, and pure juice are not considered to be soft drinks. Other beverages not considered to be soft drinks are hot chocolate, hot, tea, coffee, milk, milkshakes, and schooled. Small amounts of alcohol may be present in a soft drink, but the alcohol content must be less than 0.5% of the total volume, if the drink is to be considered non-alcoholic. Widely sold soft drink flavours are cola, lemon-lime, root beer, orange, grape, vanilla, ginger ale, fruit punch, sparkling lemonade, squash, and water. Soft drinks may be served chilled or at room temperature they are rarely heated. The first marketed soft drinks (non-carbonated) in the, Western world appeared in the17th century. They were made from water and lemon juice sweetened with honey. Carbonated drinks made without any alcohol are called Soft Drinks. They are also known as Coke/Soda/Pop etc. Hot chocolate, teas, coffee etc are usually excluded from this classification. They are sold in a variety of sizes and manner. In the U.S., they are often sold in two-litre bottles, one litre plastic bottles, 24 and 20 US fluidounce bottles and in 12 US fluid ounce cans. Packaging is also available in many different quantities In Nigeria, 1.5 litre bottles, 35 CL and 50 CL bottles and cans are sold. At times, the fizzy soft drinks are served as fountain drinks in which carbonation is added to a concentrate immediately prior to serving. In Europe, plastic and glass bottles of sizes2, 1.5, 1, 0.5, 0.35, 0.33 litres, aluminium cans of 0.33, 0.35, and 0.25 litres are popular. Almost all soft drinks are made of refined sugars. Hence, they are often criticized for causing obesity and other health related problems. A link to problems of sleep, bones, and teeth has been proven by many studies. Market Structure: The soft drink industry is a global marketing phenomenon; in essence, it is simply a blended water drink with sweeteners, flavours and additives. The success in advertising and marketing this product lays in convincing billions of consumers to drink these, instead of straight water or other less expensing alternatives. The brand recognition of this industry is extraordinarily high. In 2002, world sales exceeded US$193 billion, in contrast with fruit sales which were just US $69 billion which made the global consumption to be currently in excess of 327 billion litres. Pepsi and Coca-Cola, between them, hold the dominant share of the world market. Cadbury Schweppes follows a close third. Coca-Cola has approximately half of the world market share and sells 4 out of the top 5 soft drink brands in the world. Coca-Cola sales for 2006 reached US $24.1 billion. It has profit margins of 20% and a 2 market capitalization of US $130 billion. Pepsi sales stood at US $36 billion but this also includes snacks and other foods. Some analysts view the definition of soft drinks incomplete and wish to add ready to drinks also, to this industry. If they are added as well, these would add another 1.3 billion servings to 50 billion servings for these drinks. World Market: Global sales of soft drinks exceed 327 billion litres and are valued at more than US$393 billion annually. North America, Europe and Japan are the most mature markets for global soft drinks. Coco Cola and PepsiCo Inc have significant control over the global soft drinks market and both have similar business organizations and processes worldwide. The industry includes other than the soft drink manufactures themselves, the bottlers and various raw material suppliers. Suppliers of cans, plastic and glass bottles are included in this category. Globally, the soft drinks majors continue to face challenges. One key global trend is a move away to healthier drinks, which may put some pressure on yearly growth in sales of soft drinks. The push to diet beverages have been well covered by the major producers – with sales of diet Coke and diet Pepsi still strong. A recent trend is the rise in popularity of sports drinks. Bottled water has also experienced very strong growth. Finally the quality of water used in the manufacture of soft drinks poses serious issues for the industry. Major players are working on the issue as water scarcity becomes a global issue. Industry Players: The Coca-Cola Company .Coca Cola is the number one brand globally and has been for over 40 years and is sold in virtually every country of the world. The successful expansion that began in World War II has continued unabated up to this date. Now, the company has more than 400 brands in its portfolio. PepsiCo Inc. Pepsi-Cola was created in 1898 in New Bern, North Carolina, by druggist Caleb D.Brad ham. PepsiCo Inc. holds about one-third of the U.S. market and is the second largest soft drink major in the world. It owns Frito-Lay snacks and other businesses. Pepsi soft drinks include brands such as Pepsi, Diet Pepsi, Slice, Mountain Dew and Mug Root Beer. Beverage is a liquid specifically prepared for human consumption, the production, marketing and distribution of non alcoholic and generally carbonated flavored and sweetened water based beverage, illustrate its importance as a remedy for various ailments, especially digestion. This history of beverage also illustrates the importance of business innovations such as product development, franchising and mass marketing, as well as the evolution of customer tastes and cultural trends. Many, long believed that natural mineral waters held medical qualities and flavored them as alternative to often polluted common drinking water. By 1772, British chemist, Joseph priestly invented a means to synthetically carbonate water, and commercially manufacturing of artificial mineral water began with Jacob Schweppes’s business in Geneva, in the 1780’s and in London in the 1790’s. The first known US manufacturer of soda water, as it was known, was Yale university chemist, Benjamin Silliman, in 1807, though Joseph Hawkins of Baltimore Secured its patent for the equipment to produce the drink, two year later. In Nigeria, beverage form part of the society’s culture. Most people hardly eat without taking beverage. This has been recorded as one of the reasons for the high growth of beverage industry. According to Ola, (2001), beverage industries are among the fastest growing sectors in Nigeria manufacturing sector. They contribute about 28% of manufacturing value added (MVA) and also provide direct employment for over 3000 persons. With significant consumption of beverage, there remain tremendous growths in the industry. There are now about fifteen breweries producing more than forty brands of beverages in Nigeria. In addition, there are five brands of stout, seven brands of malt drink and over ten brands of mineral drinks (Uduji and Nnabuko, 2008). In 2001, an estimated five billion letters of beverage were consumed in the country, (Risa, 2006). In the 80’s, Nigeria beverage industries experienced severe difficulty in production because of restrictions on the importation of barley malt, then, Nigeria resorted to locally substitution of barley malt, which improved the capacity utilization rate in 2000, (Elesho,2001). Since then, there has been a tremendous increase in the industry, as it has shown a strong growth over the last ten years, owning to the stable economic climate, changing demography, and greater number of people migrating to urban areas etc. These contributed to the thriving demand for the country’s product. The products are fast becoming an essential part of the national diet, particularly, in the urban areas. Nigeria rank second in the business monitor international recently launched for sub-Sahara African, behind South Africa. 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