Celebrity Licensing and Celebrity Endorsements

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Indian advertisements has been flooded with plethora of celebrities endorsing several brands. But then why celebrity licensing is lacking behind in India. My research paper touches what are the reasons of its popularity among other countries except in India. Also the reasons behind why they are still in a nascent stage in India

Text of Celebrity Licensing and Celebrity Endorsements

  • 1. Title of the Project: In War with Celebrity Licensing a comparative study between celebrity endorsing and celebrity licensing. Name: PALAK AGARWALA Course: B.B.A. (Hons.) Specialization: MARKETING Roll no.: 32 Room no.: 34 Current year: THIRD YEAR Academic session: 2012 - 2013 Professor Guide: PROF. D. SEN
  • 2. 2 A comparative study on Celebrity Licensing and Endorsing Strategy BY Palak Agarwala Submitted to the St. Xaviers College (Autonomous), in Partial Fulfillment of the Requirement for the Degree of Bachelors in Business Administration at the University of Calcutta. April 2013 Date of Submission: April 24, 2013.
  • 3. 3 ACKNOWLEDGEMENT It would have been impossible for me to complete this project if it were not for Professor D. Sen, my project Guide, who extended a lot of help during the crucial stage of my project. In all likelihood, I might have finished the project by myself, but Sirs guidance made the journey a lot more informative, interesting and a lot easy for me. I express my thanks to Rev. Father Dominic Savio, Sj, Vice Principal of, St. Xaviers College, Kolkata, Professor Amitava Roy, the Dean of our BBA Dept., for showing confidence in the students and giving us the chance to do project papers. My deep sense of gratitude to all the respondents who showed keen interest in my survey. I would like to give them my heartfelt thanks for obliging my survey and giving true, unbiased opinion to my questions. It was for their active support feedback without which my survey would not have been successful. I also acknowledge my colleagues, who spent their precious time in providing feedback and helping me in my survey. I extend my thanks to all my other faculty members and the above mentioned faculties who have taught us the level of professionalism, dedication and discipline it takes for one to complete a project.
  • 4. Lastly, but not the least, I thank my parents, my family and my friends for their immense support and help. 4 THANK YOU.
  • 5. 5 TABLE OF CONTENTS Sl. No. PARTICULARS Page No. 01 Executive Summary 06 02 Introduction 08 03 In contract with celebrity Licensing and Celebrity Endorsement i. Talking About History ii. In Conversation with Celebrity Endorsing iii. Signing Celebrity Licensing 10-19 04 Let the War Begin i. Licensing contract v/s Endorsement Agreement ii. In Return iii. Trust who? iv. Impact on brands v. Lack of modern and organized sector 20-28 05 Every Cloud has a Silver Lining i. The categories that are yet to be explored ii. Fascination for Dead Celebrities 29-31 06 My Research- Objective of the study 32-33 07 Research Methodology 34-36 08 Processing 37-46 09 Lets Find out, What we Found Out 47-49 10 All is Well that Ends Well 50-52 11 bibliography 53 12 Appendix 54-57
  • 6. 6 EXECUTIVE SUMMARY Celebrity endorsements are a time-honored marketing tool. The theory is that borrowing some of a celebrity's star power will create both an awareness of, and an interest in, a given product. Apparently, the strategy works: A 2011 study published in the Journal of Advertising that looked at athletes' support for brands found that such endorsements produced a 4% growth in revenue (about $10 million a year in added sales of the branded products), and a 0.25% rise in stock returns. The marketers want to choose a celebrity who evokes positive emotions in your target market. They want someone who has a broad appeal, someone who creates buzz, someone who is likeable. At the same time marketers want someone who is a good fit or has some expertise with the product. This gives credibility to the company and as well as ad to the celebrities connect with the audience. The world is witnessing a fast evolving market with a rush of competitive products entering in every day. Customers are in a quandary discerning which is best amongst them as all are equally good. They need more than just motivation and words of the salesman to build confidence in the product. Amongst popular marketing gimmicks to attract consumers, endorsements by popular celebrities top the list. In close heels is Celebrity Licensing, which is emerging as the most lucrative business in recent times given the fact that 9 out of every 10 people would vouch for a product whose identity has a seal of their favourite idol. Further, it has been predicted that celebrity licensing is all set to rule the next era of the marketing concept. Celebrity licensing can be used either to position a new product in the market or to broaden the market of an already existing product and can be either Deceased Celebrity Licensing or Licensing of Living Celebrities. In theory, these arrangements seem appealing and very attractive, to study the reality of the market, a small survey had been conducted which will depict the true picture of the society we live in. Consumer reaction can never be predicted or compared within the consumer groups. The survey tries to understand the perception of the consumer towards an
  • 7. advertising campaign, the launch of the line of merchandising the products under their own brand name. Through this project we can understand the reasons behind the popularity of the celebrities. The objective behind the marketers entering into agreements with the celebrities, is largely due to the emotional appeal the celebs have on the consumers. They have become the influencers and trendsetters for the consumers, specially the youth of India, who are aged between 15-25 years of age. There is huge scope of expansion in terms of product categories and the market. People can never get exhausted of watching celebrities nor can the products will ever end. The right strategy, organized retail sector, right time and opportunity can make any campaign successful. Be it licensing or endorsing. There should be the right celebrity, the image, the quality which definitely affects a consumers repeat purchase decision, all paly major roles in the success of a campaign. 7
  • 8. 8 INTRODUCTION Brand licensing is a well-established business, both in the area of patents and trademarks. The process of creating and managing contracts between the owner of a brand and a company or individual who wants to use the brand in association with a product, for an agreed period of time, within an agreed territory; Licensing has been used by brand owners to extend a trademark or character onto products of a completely different nature. Trademark licensing has a rich history in American business, largely beginning with the rise of mass entertainment such as the movies, comics and later television. Mickey Mouse's popularity in the 1930s and 1940s resulted in an explosion of toys, books, and consumer products with the lovable rodent's likeness on them, none of which were manufactured by the Walt Disney Company. This process accelerated as movies and later television became a staple of American business. The rise of brand licensing did not begin until much later, when corporations found that consumers would actually pay money for products with the logos of their favorite brands on them. McDonalds play food, Burger King t-shirts and even ghastly Good Humor Halloween costumes became commonplace. Brand extensions later made the brand licensing marketplace much more lucrative, as companies realized they could make real dollars renting out their equity to manufacturers. Celebrity branding, soon become phenomenal, which took the form of celebrities attending PR events, appearances in advertisements and several other promotional activities. In recent times given the fact that 9 out of every 10 people would vouch for a product whose identity has a seal of their favorite idol. The popularity of celebrities has always been a tool for marketers to promote their products through advertisements and PR events. Licensing Celebrities to use their fame and name to start up a new product has gained success in the recent decade. Today, celebrities are not only endorsing big brands but are also entering licensing contracts wherein, the celebrity allows the licensee to use his brand image and name for promotion of his products, with due active participation in wake of the promotion of the product. In return, he would
  • 9. be entitled to a royalty fee. The contract is the medium of negotiation for them. In India, the scenario is still a little different. We see advertisements and many events where the celebrities are seen promoting products of big brands and sometimes, new brands. But, we do not come across many examples of celebrity licensed products. There can be several reasons behind it. The celebrities may