Do Celebrity Endorsements help consumers move-up the consumption ladder for luxury brands?

Endorsement of luxury brands by celebrities is not a new phenomenon. The role of celebrities in influencing modern culture as well as consumption patterns is gaining prominence. Celebrities act as arbiters of style, taste and public opinion all over the world. The celebrity endorsement enables brand managers to catch attention, add credibility and numerous intangible benefits to the brand in a way which are perhaps difficult to be attained through any other form of advertising.

The celebrity culture has followers across Asia. In Japan and South Korea, 70 per cent of commercials use a celebrity. However, the phenomenon is picking up in India and China where it has acquired momentum in a relatively short span of time. Celebrity power has taken off very rapidly in India, and firms are vying with each other to secure contracts for their brands with Bollywood actors and sportspersons. The Indian luxury goods market is not only unique but also a challenging one for international luxury brands seeking to establish their presence here. The luxury market was earlier driven primarily by the preferences of these ultra-rich households. However, in the recent past, rising incomes and aspirations have created a new segment of typically upper middle class aspirers who are potential luxury buyers. By launching entry-level luxury brands for this potential segment, luxury brands try to help these consumers move up the ‘consumption ladder’ by customizing the shopping experience. This is a significant opportunity for brands for establishing strong consumer relationships. Celebrities can be perhaps one of the ways companies can use to connect with the customer.

An article from the ‘Journal of Creative Communications’ makes a contribution to understanding Indian luxury market by exploring the relationship between brand equity dimensions and celebrity endorsements. This study shows the significant positive role of celebrity endorsements in creating brand equity by influencing brand awareness and brand associations. Brand awareness is first essential step in consumer purchase process. Therefore, the target market has to be made aware of a firm’s brand(s). This can be achieved through advertising or other form of communication. However, a celebrity along with the firm’s brand name will not only improve the likelihood of brand recall but also infuse the brand with charisma of the celebrity.

Managers need to understand that effectiveness of brand awareness is only up to a certain limit beyond which organizations need to build associations which are strong, favourable and unique in the potential customer’s mind so as to ensure brand purchase. This illustrates the importance of marketing of the brand beyond simply awareness and understanding simultaneously the important role of brand associations for building brand equity. Celebrities may, thus, help in generating consumer attention and recall of advertising campaigns if there is an appropriate fit between the brand and the celebrity. A proper congruence between the celebrity and the luxury brand can help not only a brand stand out of the clutter but also in better brand recall.

Register now to read full article!