Celebrity Scandals and their Impact on Brand Image: A Study among Young Consumers

Table of Contents

Abstract

List of Figures

List of Tables

1.Introduction
1.2. Background and Importance of the Topic
1.1. Problem Statement and Disposition of the Paper

2. Branding
2.1. What is a Product?
2.2. What is Branding?
2.3. The Importance of Strong Brands
2.4. Brand Equity
2.4.1. Building a Strong Brand: The CBBE Model
2.4.2. Brand Building Implications: The CBBE Model
2.5. Brand Image
2.6. Brands and Young Consumers

3. Celebrity Endorsements
3.1. What is a Celebrity?
3.2. What is Celebrity Endorsement?
3.3. Celebrity Endorsement as an Effective Advertising Tool to Boost Brand Image
3.3.1. Celebrity Endorser Selection
3.3.2. Celebrity Endorsement Selection Models
3.3.2.1. Source Credibility Model
3.3.2.2. Source Attractiveness Model
3.3.2.3. Match-Up Hypothesis
3.3.2.4. Co-Activation Theory
3.3.3. Implications and Limitations of Models
3.4. Celebrity Endorser Scandals: Drawback or Boost for the Brand Image
3.5. Celebrity Scandals and their Impact on Young Consumers

4. Methodology
4.1. Introduction
4.1.1. Research Objective
4.1.2. Research Approach to Empirical Study
4.2. Data Collection
4.2.1. Quantitative Research
4.2.2. Complications with Questionnaires
4.2.3. Assessing Validity
4.2.4. Reliability Testing
4.2.5. Questionnaire Design
4.2.6. Pilot Study
4.3. Sample Group and Execution of the Study
4.4. Data Analysis
4.5. Limitations
4.6. Conclusion

5. Data Analysis and Findings
5.1. Survey Results
5.1.1. Socio-Demographic Factors
5.1.2. Brands and Young Consumers
5.1.3 Celebrity Endorsements
5.1.4. Kate Moss Incident
5.2. Discussion of Results

6. Conclusion and Future Work
6.1. Limitations and Future Research

Reference List

Appendices

Appendix A - Survey

Appendix B - Chi Square Test

List of Figures

Figure 2.1: Best Global Brands

Figure 2.2: Customer-Based Brand Equity

Figure 2.3: Mercedes Benz Advertisement

Figure 3.1: Michael Jordan

Figure 3.2: Penelope Cruz

Figure 3.3: Donald Trump

Figure 3.4: Penelope Cruz

Figure 3.5: Kobe Bryant

Figure 3.6: Olsen Twins

Figure 3.7: Tiger Woods

Figure 3.8: Kate Moss

Figure 5.1: Gender

Figure 5.2: Personal Image I

Figure 5.3: The Importance of Brands

Figure 5.4: Reasons for Brand Consumptions

Figure 5.5: Brands as a Tool to reinforce ones Personal Image

Figure 5.6: The Importance of Celebrities

Figure 5.7: Celebrity Image

Figure5.8: Negative Information about Celebrities

Figure 5.9: Post scandal Perception of Brands and Celebrities

Figure 5.10: Instant Termination of Brand Consumption

Figure 5.11: Reasons for Instant Termination of Brand Consumption

Figure 5.12: False Allegations and Post Perception of Brand and Celebrity

Figure 5.13: Personal Image II

Figure 5.14: Particpants and Managers I

Figure 5.15: Particpants and Managers II

Figure 5.16: Personal Image III

List of Tables

Table 5.1: Age Distribution

Table 5.2: Nationality of Participants

Abstract

Celebrity endorsements can be seen as a powerful and effective advertisement tool to cut through today’s thick media clutter, grab the attention of consumers by underpinning a brand’s image. The use of celebrities as a spokesperson for products and brands has been steadily increasing over the past decades. Celebrity Endorsements are perceived as a ubiquitous feature of modern marketing. Especially young consumers, who are considered to be brand conscious as well as regarded to idolise their favourite celebrities are a prime target of celebrity endorsements. Despite the many benefits celebrity endorsements entail, companies must also be aware of the potential drawbacks it brings along. Particularly celebrity endorser scandals are perceived to have an impact on a brand’s image. Owing to the steady growth of celebrity endorsements as an effective advertisement tool to boost a brand’s image, and to the fact that young consumers will remain the prime target of celebrity endorsements, this dissertation aims at investigating the impact of celebrity scandals on the brand image perception of young consumers. Based on a critical literature review, the author develops a conceptual and theoretical framework, in which this dissertation is set. An empirical study by means of an online survey distributed among 222 participants was conducted. Findings demonstrate that the brand image is hardly affected due to celebrity endorser scandals. However, the findings also reveal that felonies such as murder may lead to instant termination of consumption of a brand. The results of this research study provide some novel and useful insights into celebrity scandals and their impact on brands image, which can be used as guidelines for practitioners and as a starting point for further research.

Declaration of Originality

“I hereby declare that this thesis has been composed by myself and has not been presented or accepted in any previous application for a degree. The work, of which this is a record, has been carried out by myself unless otherwise stated and where the work is mine, it reflects personal views and values. All quotations have been distinguished by quotation marks and all sources of information have been acknowledged by means of references including those of the Internet.

I agree that the University has the right to submit my work to the plagiarism detection service TurnitinUK for originality checks.”

1. Introduction

1.2. Background and Importance of the Topic

In this day and age global business has become increasingly competitive. Many companies find themselves in fierce competition for market share within their local and global market.To remain competitive and successful in the long run companies must develop a sustainable competitive advantage over their competitors (Dess et al., 2009).

Branding is frequently used by many companies with the purpose of differentiating their product offerings by using, e.g. distinct packaging or logos such as the Nike “swoosh” or the crocodile used by Lacoste. Particularly nowadays, branding is widely considered as a key marketing priority for the majority of companies (Aaker and Joachimsthaler 2000; Kapferer 2005). Possessing a unique brand can have many advantages for a company such as customer loyalty, charging premium price and repeat purchases, which result in higher profits and subsequently higher market share. All the advantages, which a strong brand possesses, can contribute to a valuable form of competitive advantage, which is known as brand equity. Brand equity refers to the added value that a strong brand offers its consumers in the marketplace. Brand equity can be increased by creating a strong image around a brand (Jobber, 2007; Kurtz et al., 2009). Brand image is created by generating strong, favourable and unique associations, which shall reside in the mind of the consumer, and shall ultimately ease the purchase decision of the consumer (Bergen et al., 1988; Jobber, 2007). Brands and the image, which they can convey should be regarded as powerful assets that must be carefully developed and managed (Kotler and Armstrong, 2005).

Through advertisements, the image of a certain brand may be reinforced. Throughout the history of advertising, but especially in recent years, the use of celebrities as spokespersons for a brand, i.e. celebrity endorsements, has been gaining steady importance among marketers and companies.According to Belch and Belch (2001) more than 20 percent of all worldwide TV commercials feature celebrities. In Japan, for instance, seventy percent of all TV commercials use celebrities to endorse their products (Kilburn, 1998) and in the United Kingdom, one in five marketing campaigns feature celebrities (Erdogan et al., 2001; Shimp, 2000).Kahle and Homer (1985), Kamins (1989) and Ohanian (1991) state that using celebrities to advertise a certain brand is more effective than any other form of advertising, which may justifies the overall increase of celebrities used in advertising. Benefits of using celebrity endorser may be the instant recognition, recall, and the overall awareness of the brand, celebrity image may positively influence the image of the brand etc. In terms of celebrity endorsements one of the best examples may be Michael Jordan, who endorsed brands such as Nike, Coke, Wheaties, McDonald's, Hanes, WorldCom, Oakley, Gatorade etc. who approximately contributed 10 $ billion dollars to the US economy during his NBA career, which lasted for 14 years (Fortune, 1998).

Despite of the many benefits celebrity endorsements may offer, there are also many drawbacks that celebrity endorsements bring along such as the celebrity being involved in multiple endorsement deals, therefore not exclusively representing one company and its product or brand, which may decrease the level of trust and credibility of the brand.Moreover, the huge financial aspect of celebrity endorsements per se. For example, Nike spent 40 million US Dollars on Tiger Woods to endorse the products for their advertising campaign (Agrawal and Kamakura, 1995; Bailey, 2007).

Building and developing strong brands and a positive image around a brand, which eventually should reside in the consumer’s mind, often takes companies years of hard work and effort. However, all the effort and hard work put into building strong brands may be destroyed in a blink of an eye, due to a public scandal of the celebrity endorser. Miciak and Shanklin (1994), for instance, point out , “Erratic behaviour that offends customers is too much of a risk for a company to hazard This is the greatest fear of execs Involved in advertising and almost impossible to control."

What a company subsequently must ask itself, is whether it was worthwhile to contract a celebrity to endorse their brand, or not!?Celebrities involved in public scandals are not a new phenomenon. Many companies, which have used celebrities in the past may at some stage, had to deal with the antics of the celebrity endorsing their brand. Well known examples include the case of Kate Moss, who endorsed, e.g. Burberry and H&M, and was accused of snorting cocaine in public, orTiger Woods, who endorses multiple brands such as Nike, Tag Heuer, Gatorade etc, and was accused of adultery.Nowadays,companies are extremely concerned when it comes to protecting their brand image as maintaining a positive brand image is essential. Companies want to know all about the past and the current situation of the celebrity’s life and the majority of the contracts contain “Morality Clauses” in order to ensure that their brand image is not damaged(Miller, 1994; Stanley, 2010).

Particularly young consumers (age 18-30) representa prime target group of celebrity endorsements (Bailey, 2007). On the one hand, young consumers are generally considered to be extremely brand conscious. Brands are consumed to socially fit in or to distinguish oneself from other individuals (Piacentini and Mailer, 2004). Moreover, especially young consumers, consume brands to establish and express their self identity and to convey a certain image to other individuals (Yalkin and Elliot, 2006). On the other hand, young consumers are often obsessed with celebrities and subsequently idolisethem. According to Yue & Cheung (2002) celebrity worship has become a common trend around the world. Edward et al. (2003) argues that young consumers often have unique relationships with their favourite celebrities, look up to them and view their behaviour as guidelines for future actions.As a result, marketers and companies have captured the opportunity of the obsession for brands and celebrities of young consumers and encourage them to predominatly consume the products endorsed by their favourite celebrity (Adler et al., 1980; Ross et al.; 1984; Yue and Cheung, 2002; Edward et al., 2003).

1.1. Problem Statement and Disposition of the Paper

With young consumers being extremely brand conscious and being the prime target group of marketers and companies in terms of celebrity advertising it is shown that especially young consumer react positively towards brands and celebrity endorsements. In contrast, very little is known how particularly the target group of young consumers responds to public scandals of the celebrity endorser. Furthermore, it is essential to gain insight if their attitude respectively their perception towards a brand is negatively influenced and if so to what extent the brand image from their point of view is damaged after a celebrity endorser had been involved in a public.

There is a considerable amount of research into celebrity endorser scandals and their impact of brand image (e.g. Till and Shimp, 1998; Louie et al., 2001; Louie and Obermiller; 2002, Money et al., 2006; and Bailey, 2007). However, the majority of research conducted does not answer the research objective of this dissertation. Merely the research study ofBailey (2007), addresses negative information about celebrities and their impact on young consumers, in particular. However, Bailey’s (2007) study showed limitations as well as strongly recommended and encouraged further research.

There are still many research avenues concerning the topic, which have yet to be answered respectively find academic proof. According to Bailey (2007) young consumers will remain the prime target group of celebrity endorsements. Subsequently, the aim of this dissertation is to present new insights into the impact of celebrity endorser scandals on the brand image perception among young consumers. Moreover, this dissertation shall particularly facilitate the decision-making process (whether to terminate the contract or not), of companies and marketers, who encounter issues, e.g. a celebrity endorser scandal, with their celebrity endorser, but also as a guideline for companies, which may want to use celebrity endorsements as a form of advertising in their future.

In part one of this dissertation, the literature review shall provide the reader with a conceptual and theoretical framework in which this dissertation is set. It is subdivided into two parts. The first part of the literature review (i.e. part 2, table of contents) deals with the importance of branding. It gives an overview about the definition of branding, how strong brands can be developed, and the benefits of possessing strong brands, i.e. brand equity. After essential terminology will have been defined, the relationship of young consumers and brands will be explained. The second part of the literature review (i.e. part 3, table of contents) deals with celebrity endorsements. Firstly, the term celebrity as well as the term celebrity endorsements will be defined. Secondly, the effectiveness of celebrity endorsements as an effective advertisment tool to boost brand image will be explained as well as the impact of celebrity endorser scandals on brand image. At the end of this chapter, the impact of celebrity scandals and their impact on the perception of the brand image of young consumers will be examined. In addition, prior research studies conducted will be presented within the last part of the literature review.

The methodology chapter is dedicated to the research approach taken towards this dissertation. Firstly, the research objective of this dissertation is stated, followed by the research approach to the empirical study. Moreover, various research hypotheses, which shall be tested in the empirical part of this dissertation, will be developed. Then, questionnaire design, the pilot study conducted, and the sample group and execution of the large empirical study of 222 participants, which was conducted via an internet-mediated questionnaire, will be explained. Finally, the tools applied for the data analysis and the limitations of the methodology will be presented.

The findings chapter shall give the reader an overview of the findings gathered through the empirical study. These findings will be firstly presented and supported through figures and tables and will subsequently be analyzed and evaluated against the background of the research hypotheses, existing literature and prior research studies.

In the conclusions and recommendations chapter a final conclusions, which summarise the main findings of the empirical study conducted by the author as well as the findings from the literature review and prior research studies will be presented. Moreover, the author will give suggestions for further research.

2. Branding

2.1. What is a Product?

In order to define the term branding it is vital to firstly define the term product. Generally speaking, a product is defined as “anything which is capable of satisfying customer needs”(Jobber, 2007) . Lamb et al. (2009) define a product as “everything, both favourable and unfavourable, that a person receives in exchange” . Most people, usually divide the term product into tangible and intangible assets, with the former being the product and the latter being a service. However, it is crucial to notice that a car, which would be regarded as a tangible asset therefore a physical product , is not just tangible as it also provides a service, which is being capable of driving from A to B. Thus, a car, for example, would include both, i.e. being a tangible asset (physical product) as well as an intangible asset also known as a service product . As a result a service or an idea can consequently be regarded as a product as well (Jobber, 2007; Lamb et al., 2009). To simplify the following chapters only the term product will be utilised. As aforementioned this could be a good, service or an idea.

2.2. What is Branding?

In our time many companies find themselves in fierce competition with their rivals for market share. They are faced by many challenges and hence need to find a way to successfully overcome these obstacles and ultimately maintain or improve their competitive position within a market. In order to be competitive and most importantly remain competitive over time, companies try to develop a sustainable competitive advantage over their competitors. According to Dess et al. (2009) subsequent factors are required in order to sustain a competitive advantage:

1) Organizational resources need to be valuable
2) Rarity of resource
3) Inimitability of resource
4) Little or no possibility of substitution

As a consequence, many companies attempt to distinguish their product offerings from the offerings of the competition with the aim of developing a sustainable competitive advantage by creating a unique brand for their product offerings(Sengupta, 2005). Branding is widely considered as a key marketing priority for the majority of companies (Aaker and Joachimsthaler 2000; Kapferer 2005). Jobber (2007) describes branding as the process in which a company develops a distinctive name, logo, packaging and design for its product. Well known examples may be the Nike “swoosh”, the prancing horse of Ferrari, or the crocodile used by Lacoste. Acunto (2002) for example states that branding can be defined as “the creation of conviction in a buyer or user as to the viability; desirability and endorseabilty of a product, service or entity”.

John Stewart, co-founder of Quaker Oats once said: “If this business were split up, I would give you the land, the bricks and mortar, and I would keep the brands and trademarks and I would fare better than you”

A former CEO of McDonald’s agrees to the aforementioned statement by quoting: “If every asset we own, every building and every piece of equipment were destroyed in a terrible natural disaster, we would be able to borrow all the money to replace it very quickly because of the value of our brand...the brand is more valuable than the totality of all these assets” (Armstrong et al., 2009)

As Kotler and Armstrong (2005) argue brands should be seen as powerful assets that must be carefully developed and managed.

Branding helps a company to give its product offering a unique brand image, which enables consumers to develop positive associations with the brand, which eventually eases the purchase decision of the consumer (Jobber, 2007).

2.3. The Importance of Strong Brands

According to Ehrenberg, Goodhardt and Barwise (1990) strong brands can reap substantial benefits for a company. Strong brands enable the company to charge premium prices as well as sustain high and stable sales and profits through brand loyalty. In addition, strong brands can be utilized as a barrier to competition; as a result companies are less vulnerable to newly developed brands and competing brands. Moreover, brands can be seen as a quality certification and are generally more trusted than conventional products. They can be used as a base for product extension, customers react more favourably to price increases, and consumer perceptions of a product are usually influenced positively due to strong brand names (Jobber, 2007; Keller, 2001; Ehrenberg, Goodhardt and Barwise, 1990; Hoeffler and Keller, 2003).

Many firms attempt to build strong brands in order to reap substantial benefits and develop a strong and solid foundation for their operations and product offerings. However, Keller (2001) states that building strong brands is not always easy and subsequently can be a difficult undertaking.

Companies must be aware of how they can develop a strong brand, and more importantly which factors need to be considered that make a brand strong.

It can be said that strong brands are those that are superior to their rival brands as stated by(Jobber, 2007). One has to distinguish firstly between the core product and the augmented product. A core product can be, e.g. toothpaste that should clean teeth and protect them against tooth decay. But, any toothpaste should enable the consumer to achieve that. Therefore companies attempt to develop brands, which they do by augmenting the core product, i.e. augmented product. Augmentation of the core product may be the quality and design, packaging, brand name and image etc. of the product. This can put the augmented product into a unique position, which marketers refer to as “the brand”(Jobber, 2007).

2.4. Brand Equity

Before delving into the section of how a company canbuild a strong brand, the factors that make a brand strong will firstly be examined. In this context scholars have coined the term brand equity. According to Jobber (2007) strong brands possess brand equity. Brand equity has to be distinguished between customer-based brand equity and proprietary-based brand equity. Within this dissertation solely customer-based brand equity is from magnitude. Armstrong et al. (2009) define customer-based brand equity as “the positive differential effect that knowing the brand name has on customer response to the product or service” . In contrast, Keller (2002) defines customer-based brand equity as “the differential effect that brand knowledge has on consumer response to the marketing of that brand”.

Positive customer-based brand equity implies that customers act more favourably towards a certain brand upon identification of the brand than they would if the brand was not identified, e.g. Coca Cola vs. Pepsi (Jobber, 2007; Glynn and Woodside, 2009). Conversely, negative customer-based brand equity may happen to occur as well, which in fact leads consumers to react less favorably towards a certain brand than they would if the brand was not identified(Jobber, 2007). As a result positive brand equity can be considered an extremely valuable asset(Francese, 2002). Interbrand, a consulting firm specialised in the field of brands, released the best global brands in 2009, depicted in figure 2.1., which are all rich in brand equity.

Figure 2.1:Best Global Brands 2009

illustration not visible in this excerpt

Source: http://www.interbrand.com/best_global_brands.aspx?langid=1003

According to Armstrong et al. (2009) and Interbrand (2009) positive brand equity can provide a company with many competitive advantages such as high consumer brand awareness, lower price sensitivity, which in fact enables the company to charge premium prices, e.g. loyal Coca Cola drinkers are willing to pay 50% premium as well as Volvo drivers that are willing to pay up to 40% premium, a base for brand extension opportunities, e.g. Coca Cola used its strong brand equity to introduce Diet Coke and Coke Zero, higher brand loyalty among consumer, and so forth (Jobber, 2007; Armstrong et al., 2009) . Ultimately it can be said that strong brand equity creates a profitable set of loyal customers towards their favorite brand (Armstrong et al. 2009; Elliott and Percy, 2007).

2.4.1. Building a Strong Brand: The CBBE Model

The Customer-Based Brand Equity Model is a comprehensive approach, which was developed by Kevin Lane Keller (2001, 2008, 2009) one of the most widely notable research leaders in the field of strategic brand management and marketing. The CBBE Model can be regarded as a creative, cohesive, well grounded, up to date and an actionable approach to building strong brands respectively strong brand equity. Brand equity is fundamentally determined by the brand knowledge created in the mind of the consumer (Keller, 2001). According to Janiszweski and van Osselaer (2000) the power of brands resides in the mind of the consumers, which may be all the thoughts, positive and negative feelings, experiences, perceptions, images etc. towards a certain brand, which can be seen as a set of associations. Brand knowledge can be subdivided into two crucial components, i.e. brand awareness and brand image. Kotler and Pfoertsch (2010) define brand awareness as “the ability of possible consumers to remember that a special brand belongs to a special product”. In contrast Keller (2008) defines brand awareness as “the ability to recall or recognize the brand under different conditions”. Brand image can be defined as “consumer perceptions of and preferences for a brand, as reflected by the various types of brand associations held in consumers’ memory” (Keller, 2008).

In contrast, Chan-Olmsted (2006) defines brand image as a “unique set of associations within the target customers’ mind that characterizes what the brand stands for and implies the brand’s promises to them”.

The CBBE Model is utilized to address how strong brands should be built in terms of consumer knowledge structure. It consists of four different steps , “where each step is contingent on successfully achieving the previous step” (Keller,2001).

1) Ensuring identification of the brand with customers and an association of the brand in customers’ minds with a specific product class or customer need.
2) Firmly establishing the totality of brand meaning in the minds of customers by strategically linking a host of tangible and intangible brand associations.
3) Eliciting the proper customer responses in terms of brand-related judgment and feelings.
4) Converting brand response to create an intense, active loyalty relationship between customers and the brand.

In addition, Keller (2001) uses six different brand building blocks, which can be seen in figure 2.2.as the foundation of a strong brand. These six brand-building blocks are interrelated with the aforementioned four steps. The left hand-side of the pyramid can be seen as the rationale steps towards brand building, whereas the right-hand side can be regarded as the emotional steps towards brand building. Reaching the top of the pyramid is the ultimate goal to create strong brand equity, but this may only be achieved if the right blocks are utilized (Keller, 2008).

Figure 2.2: Customer - Based Brand Equity Model

illustration not visible in this excerpt

Source: http://brandandbutter.files.wordpress.com/2010/01/cbbe_model.gif

1) Brand salience is how easily and often customers think of the brand under various
purchase or consumption situations.
2) Brand performance is how well the product or service meets customers’ functional needs.
3) Brand imagery describes the extrinsic properties of the product or service, including the ways in which the brand attempts to meet customers’ psychological or social needs.
4) Brand judgments focus on customers’ own personal opinions and evaluations.
5) Brand feelings are customers’ emotional responses and reactions with respect to the brand.
6) Brand resonance refers to the nature of the relationship customers have with the brand and the extent to which they feel they’re ‘in sync’ with the brand.

In order to reach the pinnacle of the pyramid it is inevitable for companies to firstly create a solid foundation on which resonance can ultimately be built. Companies are most likely to reap the benefits of brand resonance if they are capable of firstly creating:

1) proper salience and breadth and depth of awareness.
2) firmly established points-of-parity and points-of-difference.
3) positive judgments and feelings that appeal to the head and the heart.

2.4.2. Brand Building Implications: The CBBE Model

The CBBE Model is a comprehensive model in terms of brand building. If applied correctly it can be considered as a tool to build strong and successful brands. Strong brands usually excel in all six brand-building blocks. However, still the most significant and subsequently the most essential brand-building block can be found at the top of the pyramid, i.e. brand resonance. Brand resonance appears if all other brand building blocks happen to be in sync with the needs, wants and desires of a customer. As Keller (2001) states : “brand resonance reflects a completely harmonious relationship between customers and the brand” . Examples of brand with high resonance are Harley Davidson, Apple and eBay (Keller, 2009). Generally speaking, companies must be aware of the fact that by creating the right identity as well as meaning for their brand customers consequently believe that the specific brand is relevant to them and may even become advocates of the brand, thus share their experiences with others, i.e. word of mouth promotion for the brand. To simplify, the ultimate goal of every company, which applies the CBBE model, should be to reach the pinnacle of the pyramid, i.e. brand resonance of the six brand-building blocks, in order to build strong brand equity (Keller, 2001, 2008)

2.5. Brand Image

Within the CBBE Model brand awareness and brand image are highlighted as being two important components of brand knowledge as well as sources to create strong brand equity. Particularly, a positive brand image can increase brand equity if it entails strong, favourable and unique associations towards a certain brand (Keller, 2003; Jobber, 2007). According to Jobber (2007) a product’s brand image is created by using the four different elements of the marketing mix, i.e. product, promotion, price, and place. For example a Mercedes car offers a high level of product quality such as reliability, durability and comfort. A particular advertising campaign – promotion (Figure 2.3) may strengthen the image of the brand by transferring a message of elegance, prestige and high status connotations. A high price shall justify the product quality as well as its uniqueness as not everyone will be able to afford a Mercedes car. Furthermore, additional post-purchase service offers offered by a smart modern dealership may lead the customer to think highly of brand and its image (Jobber, 2007).

Figure 2.3: Mercedes Benz Advertisement

illustration not visible in this excerpt

Source: http://4.bp.blogspot.com/_FoXyvaPSnVk/SGFSqOxAOqI/AAAAAAAAvaE/0k7RObAp35o/s400/Mercedes_SL_Talk.jpg

If a company is able to create a positive image around its brand it is more likely to reap the benefits of, e.g. repetitive purchases and hence increases its brand equity (Jobber, 2007).

2.6. Brands and Young Consumers

Worldwide mass consumption has increased significantly, particularly in countries of the western hemisphere. As a result brands have proliferated immensely and have become central to the formation of our identities (Baudrillard, 1998; Belk, 1988; Elliott &Wattanasuwan, 1998). As Kasser&Kanner (2003) state “As a consuming population we have formed deep emotional bonds with our brands, to the extent that they now determine who we are and how we are perceived” . Nowadays, consumers are influenced immensely by socio-culture pressures to consume and acquire goods (Hill & Stephens, 1997). Saxton (2005) has named this state “hyperconsumerism”, which according to him not only pressures adults to consume excessively, but particularly children and adolescents/young consumers.

Brands and their image play an important role, when it comes to hyperconsumerism as especially young consumers demand for brands (Achenreiner, 1997). Young consumers are often exposed to immense peer pressure and frequently have to deal with bullying. As a result brands are consumed excessively. According to Piacentini and Mailer (2004) particularly young consumers consume branded products or wear branded clothes to socially fit in respectively to be able to survive socially. As abovementioned peer pressure, but also reference groups, which can be defined as “a group of people that influences an individual’s attitude or behavior” (Jobber, 2007) can influence the brand perception as well as purchase behaviour of a young consumer significantly. Reference groups may be family members, friends or colleagues from work, which, depending upon on group norms and expectations, may influence their members enormously (Jobber, 2007). As a consequence, Rose and DeJesus (2007) state that particularly young consumers with a high degree of belongingness are on the one hand predisposed to materialistic tendencies and as a result try heavily to fit in into their surroundings. Often friendships are formed by the criteria of which shoes are worn (Elliot and Leonard, 2004) and by not fitting into a certain group young consumers may be excluded from social life. Yalkin and Elliot (2006) therefore argue that young consumers use brands “to establish and express their identity” and further to reinforce their self-identity (Piacentini and Mailer, 2004). “Symbolic consumption”, a term coined by Piacentini and Mailer (2004) has been recently gaining extreme importance and signifies that by using products and brands one attempts to socially distinguish oneself as well as tries to develop and communicate identity. For example, particularly low income adolescents as well as those who are unemployed normally consume brands excessively to disguise their damaged self-identity (Elliott & Leonard, 2004). By such a high degree of peer pressure and the need for belongingness one can notice that brands in general as well as the company’s respectively product’s brand image can be regarded as extremely vital. As a consequence, human beings start paying attention to brands from a very early age onwards, but particularly when reaching their adolescence. As Chaplin &Roedder-John (2005) state “material possessions become a more salient part of an individual’s self-concept when reaching adolescence”. Furthermore, a relationship is formed with the brand (Ji, 2002) and the demand for brands increases. Particularly from their adolescence onwards young consumers start associating brand images with social status, group affiliations and personality traits and hence use them to express their transition from adolescence to adulthood. As Chang (2005) states “adolescents and young adults can project a self-image, which is often idealized-to others”.

3. Celebrity Endorsements

3.1. What is a Celebrity?

There have been celebrities throughout history, for example, the victors in the ancient Olympics as well as the gladiators; famous knights, e.g. Sir Lancelot, Nell Gwynn, the actress and mistress of Charles II as well as Lady Hamilton were as famous and of much interest such as Tiger Woods, Michael Jordan, and David Beckham etc. today (Broughton, 2010).

The term itself celebrity was firstly coined by Boorstin (1962) in his famous book “The Image: a Guide to Pseudo Events in America”. Boorstin (1962) defines a celebrity as: “a person who is known for his well-knownness”. However, Gabler (1998) argues that Boorstin’s definition is not fully true for the reason that Boorstin defined the term celebrity at a time, where generally famous people were considered being the ones, who were also the great, which in fact meant that fame had already been an accomplishment. Gabler (1998) moreover argues that in the past and still today there are many people in public, who have yet not accomplished anything of significance, but still managed to somehow become famous. A great examples, that Gabler (1998) mentions in his book “Life the movie: how entertainment conquered reality”, is what he calls the “ZsaZsa Factor”, referring to the famous ZsaZsa Gabor, who became a celebrity after marrying actor George Sanders and subsequently started a very brief movie career. Despite of the brief movie career, her status was, due to her marriage to George Sanders, catapulted into being an extremely enduring celebrity. As a result, Gabler (1998) defined the term celebrity as: “human entertainment” . What Gabler (1998) meant by the definition is: “a person who, by the very process of living, provided entertainment for us”. According to him such a person could be a television star, actor, singer, athlete etc. who lives to usually fill the gossip columns and magazines. A more current definition may be the one stated by Patel (2009), who defines the term celebrity as: “a person who is well recognized by the people and has a good reputation in the people’s mind and in the society” . In contrast, Dhotre and Bhola (2010) define celebrities as “ any famous, popular public figure or respected personality in the society from any field. Mostly celebrities are from the world of films, television or sports”.

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