A DISSERTATION REPORT

ON

“IMPACT OF CELEBRITY ENDORSEMENT

ON SPORTS BRAND NIKE”

BY
LUCKY DEWANGAN
20201011

GUIDED BY
DR PRANJALI UNKULE

1
 DECLARATION
This is to declare that I “Lucky Dewangan” student of International School of
Business and Media, batch 2020-2022 has given original data and information to the
best of my knowledge in this Dissertation on the project titled “Impact Of Celebrity
Endorsement On Sports Brand Nike” is a record of independent work carried out by
me under the guidance and supervision of Dr Pranjali Unkule towards the partial
fulfilment of requirement for the PGDM program.

Lucky Dewangan (2020)

Date – 20th February, 2022

2
 ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to Dr Pranjali Unkule as who

gave me the golden opportunity to do this wonderful project on the topic, “Impact Of
Celebrity Endorsement On Sports Brand Nike” which also helped me in doing a lot
of Research and I came to know about so many new things I am really thankful to them.

I am over whelmed in all humbleness and gratefulness to acknowledge my depth to all

those who have helped me to put these ideas, well above the level of simplicity and into
something concrete.

Thanks, and Regards,

Lucky Dewangan

3
 INDEX

S. No. Topic Page No.

1 EXECUTIVE SUMMARY 5-6

2 INTRODUCTION 7-10

3 LITERATURE REVIEW 11-13

4 REPORT OBJECTIVE & METHODOLOGY 14-16

5 FINDINGS & ANALYSIS 17-19

6 RECOMMENDATION & CONCLUSION 20-23

7 LIMITATIONS 24-25

8 REFERENCES 26-30

4
EXECUTIVE SUMMARY

5
Executive Summary
Celebrity endorsements are constantly growing and increasing in popularity in marketing campaigns
and especially in the marketing of sports brands. The aim of this research is to study celebrity
endorsements and to determine the impact it has on consumers’ perceptions of the sports brands and
the Nike brand in particular.

The sample size consisted of 378 students from Pune. They completed the questionnaire compromising
of 9 sections. The sampling method that was used in this study was the simple random sampling
method. A probability sampling technique was used to achieve a higher generalisation of results.
Section A of the questionnaire was based on the biographical particulars of respondents. Section B to
Section I of the questionnaire pertains to questions dealing with the sub-dimensions of this study. The
Validity and Reliability of the questionnaire was assessed using Factor Analysis and Cronbach’s
Coefficient Alpha respectively. Descriptive and Inferential statistics was employed to generate the
results of the study.

The literature study revealed that celebrity endorsements play an important role in the marketing of
sports brands, even though the cost of using a celebrity as an endorser is high. It also highlighted the
importance of choosing the correct endorser for the brand. If the endorser behaves in a negative manner,
this behaviour impacts on the perceptions that consumers have of the brand. Therefore marketers need
to select their endorsers correctly. Marketers need to be aware that if a celebrity endorsement does not
go according to plan, they need to know how to respond appropriately in order to prevent this from
harming the image and perceptions of the brand in the minds of the consumers.

6
INTRODUCTION

7
Introduction
This chapter will introduce the topic of this research which is “The Impact of Celebrity Endorsements
on the Nike Sports Brand”. Furthermore, the essential aspects of the study such as the problem
identification, the problem statement, the aim and objectives, the significance as well as rationale of
the study also form part of this chapter.

An important aspect of a sports brands marketing campaign includes celebrity endorsements.

According to McCracken (cited in Belch & Belch, 2012), a celebrity endorser is “an individual who
enjoys public recognition and who uses this recognition on behalf of a consumer good by appearing
with it in an advertisement”. This helps the brand increase its awareness and popularity amongst its
target market and the fans of that celebrity.

Sports brands use sports athletes that excel at a particular code of sport and one who has a favourable
image. This is effective due to the fact that sports brands sell sportswear and apparel for various
sporting codes. The public will see what brand their favourite sports star uses, and will want to buy that
same brand. This element of a marketing campaign is generally a powerful tool to marketers, however
if the celebrity is not chosen correctly or if he or she behaves in an incorrect manner, then it can have
a negative effect on the brand.

The behaviour of endorsers causes people to develop perceptions of the respective brand. These
perceptions may be positive or negative and these perceptions ultimately affect the revenue of that
particular company. This will be analysed and discussed in further detail. The benefits of celebrity
endorsements will also be discussed. It will be contrasted by the controversies surrounding celebrity
endorsements that Nike has experienced in recent years. This study will also cover various cases where
Nike faced diverse situations and it will also discuss how they responded from a brand point of view.
Merits and demerits of 2 celebrity endorsement will be analysed in detail and this research also aims
to show the impact of celebrity endorsements on consumers’ perceptions of sports brands such as Nike,
Adidas, Reebok and Puma.

8
BACKGROUND OF THE STUDY

In recent times, the use of celebrity endorsers or brand ambassadors has become more popular than
ever (Sabunwala, 2013). Sports brands have the perception that endorsements are an attractive strategy
to increase brand image, to change consumer’s perceptions, and to build strong brand loyalty.

Sport stars transfer their image and character to the brand. This allows consumers to associate the
celebrity to the brand. In order for the campaign to be effective, there are three characteristics that the
endorser needs to convey to the consumers. According to Byrne, Whitehead and Breen (2003) these
are; credibility, attractiveness and power, where credibility is denoted by knowledge, skills and
expertise regarding the product or services attractiveness and comprises of familiarity, likeability and
similarity, and power enables the endorser to affect the consumer. Celebrity endorsements are regularly
used in the promotion of sports brands. By using sports stars as endorsers in the marketing of these
sports brands, the corporation links the skills, attractiveness and attributes that are generally related
with famous sports men or women (Sabunwala, 2013). These endorsements give customers something
to relate to in that they purchase the specific product and find similarities with the endorsing celebrity.

Although previous research has been conducted concerning celebrity endorsements, there is limited
literature and discussion about the impact of celebrity endorsements on consumers’ perceptions of
sports brands with particular reference to Nike (Hoekman, 2011). Even though it may be effective, it
is important to test the impact on consumers’ perceptions of the brand. It is also not known whether the
negative publicity of celebrities can cause consumers to develop negative perceptions about the brand,
thus affecting the demand for these brands therefore this study aims to assess this.

Therefore, the aim of this study is to determine the impact of celebrity endorsements on consumers’
perceptions of sports brands with particular reference to Nike.

FOCUS OF THE STUDY

The study aims to explore the impact of celebrity endorsements on consumer’s perceptions of the Nike
sports brand. It will also explore the marketing reasoning for using endorsements as a marketing tool
and discuss the effectiveness and possible consequences, if any, which could possibly occur.

The magnitude to which the demographics of consumers effect their perceptions of the Nike brand is
also explored. This will illustrate the different impact that celebrity endorsements may have on
consumers with different demographical backgrounds and it will also show how consumers of different

9
demographical backgrounds develop different perceptions about the brand. Furthermore, Nike
endorsers and their impact on the brand will also be discussed.

RATIONALE OF THE STUDY

Nike did not run any television commercials until 1982 (Americana Persona, 2008). Previously, they
focused on sponsorships and celebrity endorsements. This comprised of professional athletes as well
as college teams. Tiger Woods, Oscar Pistorius and Lance Armstrong, who were all endorsers of Nike,
have behaved in an improper manner. These incidents were brought to consumers’ attention by various
media. This negative behaviour of these celebrities might have caused consumers to develop a negative
perception towards Nike. This may lead consumers to stop or decrease their purchases of Nike products
and to purchase rival brands like Adidas, Reebok or Puma.

The impact of celebrity endorsements on consumers’ perceptions of sports brands is a current topic as
the number of athletes who significantly deviate from their image has increased, however athlete
endorsements are very popular especially amongst sports 4 brands. According to Dimed (2005), if
behaviour like this constantly occurs from celebrities, consumers may develop negative perceptions
about the brand. It is of interest to the researcher that if customers develop negative perceptions about
the brand, how will this impact the brand and will the brand reduce or eliminate the use of celebrity
endorsements.

10
LITERATURE REVIEW

11
Literature Review
Marketing tends to adopt new and different modes of promoting their product, and marketers are in
search of different and unique means to attain the whole new level of active and persuasive
advertisements and promotion. Celebrity endorsement is one of these means to persuade the consumer.
Today the marketers recognize it properly that celebrities play a significant role in order to make the
Ads more compelling and convincing (CHOI and Rifon, 2007).

According to Schlecht (2003) term ‘celebrity’ can be defined as, “Celebrities are people who enjoy
public recognition by a large share of certain group of people”. And Kurzman et al, (2007) states:
“Celebrity is an omnipresent feature of society, blazing lasting impressions in the memories of all who
cross its path”. Danieal.J.Boortish defines: “A sign of a celebrity is that his name is often worth more
than his services”. Celebrities are individuals who relish public gratitude and acknowledgement, and
who frequently possess unique traits like Charm and Credibility (McCracken, 1889; Silvera and
Austad, 2004).

The term ‘Celebrity’ denotes a person who is popular among people such as actors, sportsperson,
entertainers and others who have accomplishments in their respective fields besides the product they
endorsed (Friedman and Friedman, 1979). McCracken (1989) defined celebrity endorser as: “Any
individual who enjoys public recognition and who uses this recognition on behalf of a consumer good
by appearing with it in an advertisement”. While Stafford et al, (2003) gives a definition of endorsers
as, “A famous person who uses public recognition to recommend or co-present with a product in an
ad”. During all these years, many researchers have proposed theories in order to know the means that
makes celebrity endorsement productive and fruitful. Along with several theories proposed, many of
them also studies all the elements that be a factor in celebrity endorsements and what kind of impression
they have on buyers conduct (Esangbedo, 2011). Celebrity endorsement is been assumed to be an
“omnipresent attribute of today’s advance marketing” (McCracken, 1989).

Advertisers utilize celebrity to persuade the buying choice of their customers and it gives them great
edge for revenue or high yields of sales (Raval and Tanna, 2014). Sellers spend huge volume of money
yearly on celebrity endorsement agreements built on faith that celebrities are great representative for
their product or brands. Currently Celebrity endorsement is considered as a billion dollar industry
(Katyal, 2007). Different companies endorse celebrities in faith that by utilizing them they can achieve
distinctive and significant place in the minds of customers (Kambitsis et al, 2002). Celebrity

12
endorsement is progressively being utilized by different companies irrespective of the product category
(Temperley & Tangen, 2006). Mostly brands are living their life without using a celebrity or brand
personality. Honestly, solely dependence on brand will only give disappointment as brand itself could
never talk, walk or even get snapped. But if you utilize a celebrity in an effective manner then it could
give the product and company the ultimate and instantaneous glamor, oomph and ambition (Mukherjee,
2009). D. Reeder (Greenlight L.A) said: “People’s fascination with celebrities isn’t going away. The
use of celebrities is here to stay. But in what form is the open question”.

According to Reynolds (2000) celebrity endorsement can enhance the charm & enchant of a brand.
When celebrities are used in an effective manner, they have the ability to play worthful role in
improving brand’s competitive perspective and increasing brand equity (Alperstein, 1991). The
application of celebrity endorsement is so productive that it has now become an industry. There are
advertising businesses that are specialize in assessing the stock value of the celebrities and assisting
brands couple their products with the suitable celebrity (Esangedo, 2011). While developing of
promotional program, it’s compulsory the plan adopted should have significant concentration on
unique and different message regarding the product in order to persuade the positive attitude and
improved buying behavior towards brand (Lafferty & Goldsmith, 2004). The idea of customer behavior
is of acute importance in the promotion of goods and services, because customer’s behavior fluctuate
a lot. Hence a clear realization of customer’s conduct help companies in discovering what matters to
the customers, and proposes the significant effects on customers purchase decisions. This helps sellers
to supply goods & services according to the need of the target market (Dzisah & Ocloo, 2013). Loudon
& Bitta (1994) defined consumer behavior as; “The decision process and physical activity individuals
engage in when evaluating, inquiring, using or disposing of goods and services”.

Because of their popularity, celebrities not only gains attention but also get high recall rates for
marketing messages in today’s immensely chaotic atmosphere (Kasana and Chaudhary, 2014).
Customers purchase conduct has always been a significant part of the literature study of effect of
advertising with respect to its usefulness (Aizen, 2002). Mostly customers buying behavior is
determined by likes and dislikes of customers regarding the marketing of the product which has been
advertised (Smith et al, 2002). According to Aaker (1996) Brand face and celebrity endorsement is
seen as the fundamental component of effective marketing.

13
 OBJECTIVES
&
RESEARCH
METHODOLOGY

14
Objectives

⮚ To discover and investigate the current state of consumer’s perception about celebrity
endorsements on nike

⮚ To understand the effectiveness of celebrity endorsement.

⮚ To identify the key factors which may influence consumer’s buying behaviour through
celebrity endorsements.

⮚ To examine the impact of celebrity endorsements on consumer’s purchase intentions of

products of nike.

⮚ To draw a meaningful conclusion from the study.

Research Methodology

Research Design

The purpose of this research is to explore the impact of celebrity endorsement on consumer buying
behavior, so the exploratory research has been undertaken. In an exploratory research, the relationship
between variables has been established. So as to explain the relationship between variables, it highlight
on analysing the situation or problem

Conceptual Framework

The key purpose of this research is to find out the impact of celebrity endorsement on consumer buying
behavior. A conceptual framework was adopted, which is presented in Figure.1. It is designed in order
to clearly understand the relationship between independent variables as related to dependent variable
of the study. On the left hand side, there are present all the independent variables including gender,
attractiveness, credibility, endorsement type (celebrity vs noncelebrity), multiple celebrity endorsement
and multiple product endorsement. While on the right hand side the only single dependent variable
‘consumer purchase intentions’ is present.

15
Population

All those individuals which are concerned in making statistical inferences is the target population. So
all the male and female individuals , over the age of 15 are included in the target population for the
study.

Sample

A small part of something intended as representative of the whole population.

Sampling Technique

According to Tustin, Ligthelm and Martinsn (2005), the alternative sampling is of two types’
probability and non-probability sampling techniques. The sampling of this study consists of
nonprobability and convenience sampling technique is being used.

Sample Size

The sample used for this study is mainly young audience with educational background of high school,
under graduate and Masters Degrees. In this survey 165 individuals has participated. But some
responders has not finished the questionnaire and some responses were invalid so it reduces the sample
size to 150. According to Sekaran (2003) that for most of the researches the sample size larger than 30
and less than 500 is suitable. So the sample used in this study is also considered appropriate.

Data Collection

It is important for a researcher to collect all the needed information and data from the relevant and
representative people in order to gain desired outcomes. Primary data has been collected by using a
structured questionnaire. The data was collected from the males and females some high school and
college students as well.

16
FINDINGS
&
ANALYSIS

17
ANALYSIS

The empirical findings of this study illustrated that there is a positive relationship between celebrity
endorsements and consumers perceptions of sports brands. There is also a positive relationship amongst
the relationship between celebrity behaviour and consumers purchase of sports brands.

According to the findings of the study it can be inferred that there is a significant positive relationship
between the credibility of a brand and the consumer’s likeness to purchase the brand. This study has
found that celebrity endorsements can be used to improve the credibility of a brand. Hence, celebrity
endorsements can be used to increase consumers purchase intentions.

Furthermore, there is a significant positive relationship to show that celebrity endorsements are an
effective marketing tool for brand recognition and brand recall. The findings illustrate that celebrity
endorsements can be used in a marketing strategy in order to improve brand recognition and increase
brand recall.

The findings illustrate that there is a significant positive relationship between celebrity’s behaviour/
image and consumer’s purchase of sports brands. When endorsers behave in a positive manner, this is
likely to influence the purchase of a brand. Conversely, when endorsers behave in a negative manner,
this does not impact on the purchase intent of a consumer in a negative manner. Furthermore, when an
athlete endorser performs well in their respective code of sport, this is shown to influence the purchase
decision of a brand in a positive manner.

According to the findings of the study it can be implied that there is a significant positive relationship
between celebrity endorsements and consumers perceptions. When a celebrity endorsement goes
according to plan it has a positive impact on consumer’s perceptions. Additionally, when an endorser
performs well in their respective code of sport, this has a positive impact on consumer’s perceptions of
the particular brand that they endorse and leads consumers to think of the brand in a positive manner.

However, the findings of this study illustrate that negative behaviour of the endorser does not influence
consumers to think negatively about the brand. Additionally they will still purchase the respective
product or brand. However, it should be noted that this was the case for this study and may differ from
another research.

18
In terms of respondent’s perceptions of Nike, it was found that Nike uses effective celebrities. This is
important for the endorsement deal to be successful. By ensuring that an effective celebrity is used for
the endorsement deal, this increases the chance of success of the endorsement deal. Furthermore, it was
found that Nike also has managed their endorsement deals well. There were 58% of respondents who
agreed that Nike uses effective celebrities. This was followed by 29% of respondents who said that
Nike sometimes uses effective celebrities while only 13% said that Nike does not use effective
celebrities. So it is evident that endorsements and Nike endorsements in particular are effective as
discussed previously and that Nike also uses effective celebrities.

This study has discussed a few endorsement deals that did not go according to plan however Nike has
managed them correctly when they did go wrong in order to prevent consumers from developing
negative perceptions of the brand and to prevent the reputation of the brand being tarnished. This is
further substantiated as the three most important factors respondents liked about Nike was the
reputation of the brand followed by reasonable price and brand availability respectively.

It is in the marketer’s best interest to ensure that the endorser is suitably matched with the brand, the
product and the physiognomies of that particular target market. Observed individualities of endorsers
relative to the brand they are endorsing have been shown to be a noteworthy aspect that determines
their success (Belch and Belch 2012).
19
Erfgen. et al (2015) agrees with the findings of this study in that Nike uses effective endorsers. One of
their most successful endorsement deals was with Tiger Woods to endorse their golf range and not
Nike in general. In doing this, they were able to match the product, the target market and the endorser,
this allowed them to have one of the most significant sports endorsement deals in history (Erfgen. et
al, 2015).

For an endorsement deal to be effective, it needs to be beneficial to the brand as well as the endorser.
In the case of celebrity endorsement, the brand concerned needs to ensure that the celebrity chosen has
values that are in line with that particular brand. Not all celebrities or athletes are suitable for a specific
brand. Hence there needs to be a good fit between the brand and the endorser.

20
21
RECOMMENDATIONS
AND
CONCLUSIONS

22
RECOMMENDATION:
In order to assure that consumers have a positive perception of the brand, marketers need to pay
attention to their target market as well as select their endorsers carefully. Although, brand marketers
cannot predict the future behaviour of their endorsers, they will need to screen their potential endorsers
in detail. They should also have a contingency plan and manage the endorsement deal correctly should
an endorsement deal not go as planned.

Celebrity endorsement as an element of a brands marketing strategy is generally a winning formula,

however the high costs of celebrity endorsements needs to be also considered. This study has shown
that when an endorsement deal is successful, it is worth the high costs.

If a brand uses a celebrity endorser, that does not match-up with the brand or if the endorser behaves
in an ethical manner, this will have an adverse effect and lead to consumers developing negative
perceptions about the brand. Therefore marketers need to do their research and be careful when
selecting an endorser to ensure a good match.

However, if a brand choses the endorser correctly, and assuming that the endorser continues to conduct
themselves in an appropriate manner, this could be a possible winning formula.

In terms of respondent’s perceptions on positive effects of celebrity endorsements, it was found that
celebrity endorsements are an effective marketing tool for marketers and sports brands in particular.
Celebrity endorsements were found to be successful in order to improve brand recall amongst
consumers. It also can be used to build and improve credibility of the brand. Marketers can also use it
to increase brand recognition.

In terms of respondent’s perceptions on the negative effects of celebrity endorsements, non-celebrity

endorsers can also be effective. If this occurs the return on investment of a celebrity endorser may not
be as good as the non-celebrity endorser, as the noncelebrity endorser will cost much less. One of the
main negative effects of celebrity endorsements are the high costs. This study supported by other
research found that the benefits of celebrity endorsements outweigh these high costs. Furthermore it
was found that when an endorser behaves in a negative manner, this will not have a great impact on
consumer’s perceptions of the brand. This is beneficial to marketers and sports brands because if their
endorser behaved in a negative manner, this will have little impact on consumer’s perceptions of the
brand.

23
In terms of respondents perceptions of the relationship between a celebrities behaviour/image and
consumers purchase of sports brands, it was found that an endorsers positive behaviour is likely to
influence a consumers purchase of the brand concerned. However, negative behaviour of an endorser
is not likely to influence the purchase of a brand negatively. This result is favourable for marketers and
sports brands as they should be selecting endorsers who perform well and behave in a positive manner.
This in turn should enable marketers to be able to influence a consumer’s purchase decision of a brand
by using a celebrity endorser

In terms of respondent’s perceptions of the positive perceptions of celebrity endorsements, it was found
that celebrity endorsements have a positive impact on the perceptions of consumers towards sports
brands. This study also found that when an endorser performs well, this leads to consumers thinking
positively about the brand concerned.

In terms of respondent’s perceptions of sports brands, the most favourite brand was Adidas and this
was followed by Nike. Respondents found that Nike and Adidas endorsers were successful in
influencing their purchase decision. It was also found that Nike has the most effective endorsements.
This is evident as Nike has endorsement deals with many successful athletes in various codes of sport.

In terms of respondent’s perceptions of Nike, it was found that Nike uses effective celebrities. This is
important for the endorsement deal to be successful. By ensuring that an effective celebrity is used for
the endorsement deal, this increases the chance of success of the endorsement deal. Furthermore, it was
found that Nike also has managed their endorsement deals well. This study has discussed a few
endorsement deals that did not go according to plan; however Nike has managed them correctly when
they did go wrong in order to prevent consumers from developing negative perceptions of the brand
and to prevent the reputation of the brand being tarnished. This is further substantiated as the three
most important factors respondents liked about Nike was the reputation of the brand followed by
reasonable price and brand availability respectively.

24
CONCLUSION

This final chapter of this study has highlighted some of the recommendations that marketing
professionals need to take cognizance of when using endorsements as part of their marketing strategy
in order to achieve the desired outcome and benefits of using an endorser.

The recommendations from the results of this study were illustrated and when applied effectively by
marketing professionals and sports brands, has the ability to improve the impact of celebrity
endorsements on consumer’s perceptions of sports brands. It will provide support and assistance to
marketers in order to use celebrity endorsements in their marketing campaigns and to be more effective.
Furthermore, recommendations for future research were discussed with an outline of the empirical
findings of the study.

As discussed previously, in the opening chapter, the key point of this study was to determine the impact
of celebrity endorsements on consumers perceptions of the Nike sports brand. Additionally, the
challenge was to ascertain the degree to which celebrity endorsements impact consumer’s perceptions,
the feasibility of endorsements and the possible harm that endorsements may cause.

The empirical findings of the study consequently specify that celebrity endorsements do impact on
consumers perceptions of the Nike sports brand and sports brands in general. Furthermore, the study
also specifies that there is a significant relationship between the dimensions that were explored in this
study. Additionally, conferring to the empirical findings of the study, it can be inferred that celebrity
endorsements has a greater influence as a marketing tool to improve brand recall, to improve credibility
as well as to increase brand recognition. After reflecting upon the above-mentioned, the purpose of this
study has been fulfilled.

25
LIMITATIONS

26
Limitations:

• The time and resources were limited for the study.

• In most of the cases responders have very limited knowledge regarding celebrity endorsement.

27
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28
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