Marketing Management II

A
Project Report On
Measuring trust in
advertisements through
celebrity endorsements

MBA II Semester

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 Marketing Management II

CONTENTS

1. Executive Summary 3
2. Literature Review 4
3. Hypothesis formulation 6
4. Research Methodology & model testing
4.1) Research Methodology 6
4.2) Model 6
4.3) Sampling method 6
4.4) Sources of data 7
4.5) Rationale behind selection of variables 7
4.6) Pre-testing of questionnaire 9
4.7) Reliability check of the questionnaire 10
5. Data Analysis
5.1) Regression Results 11
5.2) Correlation matrix 13
5.3) Descriptive Statistics 14
5.4) Factor Analysis used
5.4.1) Kaiser & Bartlett’s test 16
5.4.2) Communalities 16
5.4.3) Total Variance Explained 17
5.4.4) Scree Plot 19
5.4.5) Component matrix 20
5.4.6) Rotated Component matrix 21
5.4.7) Correlated common factors 21

6. Conclusion 22
7. Questionnaire 23

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1.Executive summary

Advertisements have become an important point of focus among the

companies as well as customers. Companies use advertisement as a means
of communication to influence customers to purchase a product, to create
brand awareness, for positioning their products and also to create a point of
differentiation. With the help of advertisements companies can bring forth
the unique selling propositions (USP’s) of their product which influences the
purchasing decision of the customers. Apart from all these an important
purpose of advertisement is to earn the trust of the customers.

Advertisements can be done through print media or by using electronic

media. In the year 2007, an amount of $385 million was spent worldwide in
advertisements. Companies use creativity, tag lines and also use celebrities
for endorsing their products just to earn the trust of customers. Celebrity
endorsement is yet another promotional strategy that companies use to
attract customers and also they use the referent power of the celebrities to
build up trust about the product. But the main question lies that whether the
spending of such huge amounts on advertisements is able to win the trust of
the customers. This is a wide field to study upon, so we have generalized the
study of measuring trust in advertisement by taking a specific area in
advertisements done through celebrity endorsements. In our project we will
study that whether advertisement which uses celebrities are able to earn the
trust of the consumers.

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2.Literature Review

The multidimensional nature of trust in advertising include beliefs and

feelings about objects, willingness to use knowledge as the basis for action
.This was researched by a number of scholars like McAllister in
1995,Moorman, Desphandé, and Zaltman in 1993. Significant literature
indicates that for the existence of trust it is essential for the affective
processes and the behavioral intention of trust, along with cognitive beliefs
to be present as studied by Johnson and Grayson 2005.

A lot of considerate discussions of credibility or attitude toward advertising in

the advertising literature has been done. Credibility has been conceptualized
and measured in three forms: source credibility (i.e., trustworthiness,
expertise, and attractiveness of endorsers and advertisers) (done by Lafferty
and Goldsmith 1999; Ohanian 1990); ad content credibility (i.e.,
perceptions that ad claims are truthful and believable) (done by Beltramini
and Evans 1985; O’Cass 2002); and advertising credibility. Advertising
credibility (ACRED) has been conceived and studied as the perception of the
truthfulness and believability of advertising. According to Lutz, advertising
trustworthiness is created by a subsystem of three constructs (i.e., ad claim
discrepancy, advertiser, and advertising credibility) and is an predecessor of
attitude toward the advertisement.

The multistage research model adopted after Churchill (1979) and

Gerbing and Anderson (1988) showed the perspective of the rational

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model of advertising, specifically emphasizing on the relationships between

trust in advertising and, advertising credibility (ACRED) and also attitude
toward advertising in general (AG), taking the assumption that development
of an ad-trust measure is important for both operational and practical
reasons. Most researchers agree that trust results from trustworthiness(e.g.,
McAllister 1995; Moorman, Deshpandé, and Zaltman 1993) and the strength
and security of a trusting relationship (e.g., Rempel, Holmes, and Zanna
1985).Nowadays company are building this trusting relationship with the
help of celebrity endorsement. Various ways have been put into practice to
measure the advertising credibility; these include non diagnostic single item,
multiple item scale or subscales to measure advertising in general. In the
year 1998 Obermiller and Spangenbert introduced advertising skepticism
which is the tendency towards disbelief in ad claims. Some literatures are of
the view that trustworthiness is one of two basic underlying components of
credibility while there are others to support the view that there are various
factors affecting trust, like confidence, competence benevolence, and
reliability. However most of behavioral and social science research indicates
that trust is more than just credibility.

Friedman and Friedman in 1979 observed that the product which contains
high social risk and\or psychological risk, using celebrity endorser brings in
greater trustworthiness along with a positive purchase intention among the
customers. It was found from the studies done by IPAN-IPMR pan-
India ,86% of the respondents recalled the most prominent ad as having a
celebrity in it, but only 3% felt that the celebrity endorser affected their
buying decision.This shows how much people trust the advertisements which
is done through celebrity endorsements.

According to Tripp et.al(1994), when a celebrity endorses one or two

products, customers find the advertisement as well as the product more
trustworthy than if the celebrity endorses more than two products as they
are not able to relate to the image and credibility of the product. According
to Miciak and Shankalin(1994)companies consider the credibility as the
primary reason for selecting a spokesperson and the most important of the
credibility is the trustworthiness. Schudson in 1984, adopted the rational

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model perspective. The basic idea of this model is that it believes that the
primary function is to inform the consumers about a product and to help
them weigh one consumption choice against the other premise but for this to
be effective it is important that customers should have trust on the ads so
that it helps in their decision making.

A lot of researches and studies have been done in this field.We will research
on a specific area that whether the advertisements done through celebrity
endorsement is able to build up trust or people see it as a mere promotional
stratergy of the companies.That is our study will cater to whether people
trust advertisements using iconic personalities to promote their products or
not.

3.Hypothesis formulation
Hypothesis: Trust in a brand is dependent on variables such as(quality
assurance,celebrity likability,brand loyalty, celebrity competence,
reliability,confidence in celebrity, willingness to rely, credibility, brand-
switching, repurchase frequency)

4.Research Methodology & Model Testing:

4.1 Research Methodology: Based on the literature Reviews, we will
find dependence of the variables listed in our model equation on consumer
brand preference and find how significant are the variables on the dependent
variable by running a regression between the dependent and independent
variables.

4.2 Model: Y (Brand Trust) = f (quality assurance,celebrity

likability,brand loyalty, celebrity competence, reliability,confidence in
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celebrity, willingness to rely, credibility, brand-switching, repurchase

frequency).

4.3 Sampling Method:

We have done Convenient Sampling for our sample size of 153 respondents.
In convenience sampling, the selection of units from the population is based
on easy availability and/or accessibility. Convenience Sampling uses those
who are willing to volunteer.We did not have any information regarding the
normal distribution of the population targeted, making it impossible for us to
calculate the sample size statistically. Therefore we assumed the basic
thumb rule, which says that

SIZE OF SAMPLE= (NO OF VARIABLES)*10

This sampling technique is used because of time and cost constraint in

accessing a wider population.

For this we collected responses from our friends in the college, faculty and
outstation friends from other colleges and working in various organizations
through the net.

4.4 Sources of data:

A questionnaire (Appendix A) was prepared consisting of questions dealing
with variables like quality, celebrity likability, brand loyalty and other
important variables related to the Brand Trust of consumers while buying a
product. The questionnaire consisted of 11 questions covering 10 variables
that we wanted to check. Along with manual paper based survey, an online
survey was also conducted to collect the data. The questionnaire was sent to
the people and their responses were collected and saved

It was a primary data collection exercise done through questionnaire filling

based on a likert scale of 1 to 5.

4.5 Rationale behind selection of variables:

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Trust – According to Kelman 1961 and Ohanian 1990 trustworthiness is

one of the two basic underlying components of credibility of advertisement.
Trust is considered to be synonymous to accuracy or integrity in advertising.
Existing conceptualizations enables one to study the various aspects of
studying trust in advertising.

Reliability – according to Doney and Cannon1997 and McAllister 1995

reliability is one of the several factors which reflect the credibility of an
advertisement. It is also included among the factors of trust that have been
most frequently identified by scholars. This is an important factor which will
tell how much the advertisement will be trusted so that there is high
probability of product repurchase.

Brand Loyalty- According to Bloemer and Kasper, brand loyalty implies a

deep commitment a customer has towards the product due to the loyalty
created by the advertisements . They supported this point by rendering a
clear distinction between repeat purchases and actual brand loyalty. In their
research they published that a repeat purchase behaviour is the actual
rebuying of a brand.Brand loyalty will lead to increase of sales hence is a
parameter to measure trust in advertisements.

Brand Switching – According to Sandage and Leckenbey in 1980,

usefulness is similar to attitude toward advertising as institution and affect is
close to global attitude toward advertising in
general leading to more trust thus increasing the usefulness of
advertisement. This further leads to curbing brand switching as the customer
develops the trust in the product through the advertisement.

Competence- According to Butler and Cantrell 1984, competence is

parallel to usefulness, a major trust factor in the research of trust. It is one
of the seven factors that is considered for trust definition according to Lewis
and Weigert 1985.Competence of celebrity, i.e. his/her knowledge,
expertise, personality will either attract consumers and make them develop

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trust on the product or will not develop likings for the product as the
consumer might not have any likings for the celebrity.
Hence this is an important parameter for measuring trust in advertisements
which are done through celebrity.

Brand loyality & Repurchase Intention:

According to this study (Youjae Yi *, Suna La Seoul National University)

loyalty influences the relationship between customer satisfaction (CS) and
repurchase intention (RPI). The study introduces adjusted expectations,
which are expectations updated after consumption experience. . The results
show that adjusted expectations can mediate the effect of CS on RPI. The
results also indicate that processes underlying the CS-RPI link are different
between low-loyalty and high-loyalty customers route, which reflects the
indirect path from CS to RPI via adjusted expectations, has a greater impact
for nonloyals than for loyals. CS is found to have no direct influence on RPI
for low-loyalty customers.

Confidence- The relationships among brand familiarity, confidence in

brand evaluations, brand attitudes, and purchase intention affect buying
decision. According to this research paper(Michel Laroche Chankon Kim), the
empirical results show that familiarity with a brand influences a consumer's
confidence toward the brand, which in turn affects his/her intention to buy
the same brand. In addition, a consumer's attitude toward a specific brand
depends on familiarity with the brand.

Celebrity Credibility-
Consumers usually perceive celebrities as a credible source of information
about the product or firm they endorse.(Goldsmith 2000). One can explain
source credibility as endorser positive characteristics that affect the
receivers acceptance of a message .The message’s effectiveness depends on

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the perceived level of expertise & trustworthiness associated within endorser

(Erdogan 1999) .Expertise & trustworthiness when considered together are
presumed to be constituents of source credibility

Celebrity likeablity-
Likeability/attractiveness is an important indicator of effectiveness as per the
celebrity endorsement literature. However attractiveness is multi-
dimensional in nature. It consists of many characteristics such as physical
attractiveness, personality & athletic ability. According to some authors’
physical attractiveness of celebrities is a predictor of advertising
effectiveness (Till & Busler 2000). Attractive celebrities are usually perceived
more favourably on various personality traits compared to the less attractive
counterparts (Kahle & Homer 1985; Eagly 1991). According to Joseph
(1982) attractive endorsers have a more positive effect on the products they
endorse compared to the less attractive endorsers.

4.6 Pre- testing of Questionnaire:

It refers to testing the questionnaire on a small sample of respondents

selected on a convenient basis that is not divergent from the actual
respondents. We tested the initial questionnaire on a small sample size of 40
respondents (REASON - Newer editions of several textbooks cited by
Prescott and Soeken (1989) offer limited guidance with respect to sample
size for pilot studies. Burns and Grove (2005) and Polit and Beck (2004)
make no specific recommendations. Others recommend obtaining
approximately 10 participants (Nieswiadomy, 2002) or 10% of the final
study size (Lackey & Wingate, 1998), the final decision to be guided by cost
and time constraints as well as by size and variability of the population) and
there were some flaws and problems that were identified.

The team distributed the questionnaire and stayed in the vicinity while it was
being filled out. The pilot test group was asked to tell any member of the
research team if they encountered any problem while filling out the
questionnaire or had any suggestions of improving it. After each student

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completed the questionnaire it was given back to a member of the research

team. Since these questionnaires were handed-out to test the validity of the
survey the results were not coded or inputted for analysis. These results
were used to ensure to the research team that the questionnaire was in
proper order to conduct our primary testing.

The major flaws that we came up after doing pilot testing, were the
sequencing of questions and phrasing of the questions so that the
respondents could understand what responses to give.Subsequently the
flaws were rectified by changing the wordings of some of the questions to
which few respondents reported having problem in interpreting the question
and we boiled down to the final questionnaire which was used for the data
collection.

4.7 Check for the Reliability of the questionnaire:

The questionnaire was checked for its reliability by doing pilot testing using
40 respondents. Reliability testing was done by using Cronbach’s Coefficient
Alpha. This checks for inter variable consistency. The widely-accepted social
science cut-off is that alpha should be .70 or higher for a set of items to be
considered a scale. (G. David Garson).

Cronbach’s alpha calculated using SPSS showed a value 0.746.

Reliability Statistics

Cronbach's
Alpha N of Items
.746 11

Since the obtained value is greater than 0.7 hence the questionnaire
prepared is valid.

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5.Data Analysis:
From the responses collected by the questionnaire, we first ran a
regression between the dependent variable BRAND TRUST and independent
variables quality assurance,celebrity likability,brand loyalty, celebrity
competence, reliability,confidence in celebrity, willingness to rely, credibility,
brand-switching, repurchase frequency.

5.1 Regression Results:

The regression results showed that the significance value 0.007 of the F
statistics is smaller (smaller than 0.05) so the independent variables do
explain the variation in the dependent variables.

ANOVAb

Sum of
Model Squares df Mean Square F Sig.
1 Regression 28.207 10 2.821 2.549 .007a
Residual 158.234 143 1.107
Total 186.442 153
a. Predictors: (Constant), REPURCHASE_FREQUENCY, BRAND_LOYALTY,
RELIABILITY, COMPETENCE, BRAND_SWITCHING, CREDIBILITY, QUALITY_
ASSURANCE, CONFIDENCE, WILLINGNESS_TO_RELY, CELEBRITY_
LIKEABILITY
b. Dependent Variable: TRUST

Model Sum m ary

Change Statistics
Adjusted Std. Error of R Square
Model R R Square R Square the Estimate Change F Change df1 df2 Sig. F Change
1 .389a .151 .092 1.05192 .151 2.549 10 143 .007
a. Predictors: (Constant), REPURCHASE_FREQUENCY, BRAND_LOYALTY, RELIABILITY, COMPETENCE, BRAND_
SWITCHING, CREDIBILITY, QUALITY_ASSURANCE, CONFIDENCE, WILLINGNESS_TO_RELY, CELEBRITY_LIKEABILITY

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Ours is a Cross-sectional Data since the responses gathered from the

individuals are independent of time i.e. they do not change with time .The
adjusted R square which explains the linearity between the dependent and
independent variables was found to be 0.092.

Then the variation inflation factor (VIF) was checked for all the
variables.

C o e ffi c i e an ts

U n s t a n d a rd iz e d S ta n d a rd iz e d
C o e f fic ie n t s C o e ff ic ie n t s 9 5 % C o n f id e n c e I n te rv a l Cfoorllin
B e a rit y S ta t is tic s
M odel B S t d . E rro r B eta t S ig . L o w e r B o u n dU p p e r B o u n dT o le ra n c e V IF
1 (C o n s ta n t ) 2 .020 .44 6 4 .5 2 6 .00 0 1.1 38 2 .9 0 2
Q U A L IT Y _ A S S U R A N C E .074 .09 3 .07 1 .7 9 4 .42 9 -. 1 1 0 .25 8 .749 1.336
C E L E B R I T Y _ L I K E A B I L I T.Y0 6 1 .10 1 .06 2 .6 1 0 .54 3 -. 1 3 8 .26 1 .581 1.722
B RA ND_LO Y A LT Y .079 .08 0 .07 8 .9 8 1 .32 8 -. 0 8 0 .23 8 .938 1.066
COM PETENCE -. 1 1 0 .08 1 -. 1 1 8 -1 .3 5 4 .17 8 -. 2 7 1 .05 1 .781 1.280
R E L I A B IL I T Y .055 .09 0 .05 6 .6 1 1 .54 2 -. 1 2 4 .23 4 .709 1.411
C O N F ID E N C E .198 .09 0 .20 6 2 .2 0 1 .02 9 .020 .37 5 .676 1.480
W ILL IN G N E S S _ T O _R E LY
.099 .09 9 .09 8 .9 9 6 .32 1 -. 0 9 7 .29 5 .614 1.630
C R E D IB ILIT Y .094 .08 0 .10 8 1 .1 8 3 .23 9 -. 0 6 3 .25 1 .716 1.397
B R A N D _ S W IT C H IN G -. 1 4 8 .09 2 -. 1 5 2 -1 .6 0 6 .11 0 -. 3 2 9 .03 4 .661 1.514
RE P URCHA SE _
.099 .09 4 .10 3 1 .0 5 1 .29 5 -. 0 8 7 .28 5 .615 1.627
FREQUENCY
a . D e p e n d e n t V a ria b le : T R U S T

All the VIF values for all the variables were found to be less than 5.Since VIF
< 5 so according to this result there was no problem of muticollinearity with
the independent variables and hence multivariable regression can be used.

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5.2 Correlation Matrix

Now the correlation matrix was checked and it showed that the variables
are significant. From the correlation matrix, we can infer that there is certain
amount of correlation between few variables (ex. Celebrity likability and
brand switching). The aim of the factor analysis is to club these variables
which are correlated into a group of factors.

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C o rre l a ti o n M a tri x

RE P URCHA S
Q U A L IT Y _ C E L E B R IT Y _ B R A N D _ C O M P E T C O N F I D E W I L L IN G N E S B RA ND_ E_
A S S U R A N C EL IK E A B I L I T Y L O Y A L T Y E N C E R E L I A B I L IT Y N C E S _ T O _ R E L YC R E D I B I L IT YS W I T C H I N GF R E Q U E N C Y
C o rre la t io n Q U A L I T Y _ A S S U R A N C E 1 .0 0 0 .3 2 0 .1 5 1 .0 4 5 .2 1 5 .2 0 4 .2 4 7 -.0 2 0 .323 .392
C E L E B R I T Y _ L I K E A B I L I T Y .3 2 0 1 .0 0 0 .0 2 3 .1 4 6 .3 6 6 .3 8 6 .3 5 3 .2 7 4 .476 .468
B RA ND_LO Y A LTY .1 5 1 .0 2 3 1 .0 0 0 -.0 1 8 .0 5 1 -. 1 1 1 .0 6 1 -.1 1 7 .082 .019
CO M P E TE NCE .0 4 5 .1 4 6 -.0 1 8 1 .0 0 0 .1 2 6 .2 1 8 .2 5 9 .4 2 5 .111 .219
R E L IA B IL IT Y .2 1 5 .3 6 6 .0 5 1 .1 2 6 1 .0 0 0 .2 5 8 .4 6 5 .0 5 0 .353 .173
C O N F ID E N C E .2 0 4 .3 8 6 -.1 1 1 .2 1 8 .2 5 8 1 .0 0 0 .3 9 7 .2 9 1 .302 .443
W IL L I N G N E S S _ T O _ R E L Y
.2 4 7 .3 5 3 .0 6 1 .2 5 9 .4 6 5 .3 9 7 1 .0 0 0 .2 2 5 .427 .339

C R E D IB I L I T Y -.0 2 0 .2 7 4 -.1 1 7 .4 2 5 .0 5 0 .2 9 1 .2 2 5 1 .0 0 0 .133 .257

B R A N D _ S W IT C H I N G .3 2 3 .4 7 6 .0 8 2 .1 1 1 .3 5 3 .3 0 2 .4 2 7 .1 3 3 1.000 .247
RE P URCHA S E _
.3 9 2 .4 6 8 .0 1 9 .2 1 9 .1 7 3 .4 4 3 .3 3 9 .2 5 7 .247 1.000
FRE QUE NCY
S ig . (1 -ta ile dQ) U A L I T Y _ A S S U R A N C E .0 0 0 .0 3 1 .2 9 2 .0 0 4 .0 0 6 .0 0 1 .4 0 2 .000 .000
C E L E B R IT Y _ LIK E A B IL IT Y .0 0 0 .3 8 8 .0 3 6 .0 0 0 .0 0 0 .0 0 0 .0 0 0 .000 .000
B RA ND_LO Y A LTY .0 3 1 .3 8 8 .4 1 0 .2 6 4 .0 8 6 .2 2 8 .0 7 4 .155 .406
CO M P E TE NCE .2 9 2 .0 3 6 .4 1 0 .0 6 0 .0 0 3 .0 0 1 .0 0 0 .086 .003
R E L IA B IL IT Y .0 0 4 .0 0 0 .2 6 4 .0 6 0 .0 0 1 .0 0 0 .2 6 9 .000 .016
C O N F ID E N C E .0 0 6 .0 0 0 .0 8 6 .0 0 3 .0 0 1 .0 0 0 .0 0 0 .000 .000
W IL L I N G N E S S _ T O _ R E L Y
.0 0 1 .0 0 0 .2 2 8 .0 0 1 .0 0 0 .0 0 0 .0 0 3 .000 .000

C R E D IB I L I T Y .4 0 2 .0 0 0 .0 7 4 .0 0 0 .2 6 9 .0 0 0 .0 0 3 .050 .001
B R A N D _ S W IT C H I N G .0 0 0 .0 0 0 .1 5 5 .0 8 6 .0 0 0 .0 0 0 .0 0 0 .0 5 0 .001
RE P URCHA S E _
.0 0 0 .0 0 0 .4 0 6 .0 0 3 .0 1 6 .0 0 0 .0 0 0 .0 0 1 .001
FRE QUE NCY

5.3 Descriptives Statistics:

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The Descriptive Statistics obtained show that as for example the mean of
credibility of endorser is more than 3 we can say that more people go for
credibility of the endorser rather than giving much preference to quality
assuarance.It implies that if the mean value is less than 3, i.e. more the
observed value away from the neutral position of 3 more the weightage
assigned by the buyer to that variable while buying the product.

Descriptive Statistics

Mean Std. Deviation Analysis N

QUALITY_ASSURANCE 2.7208 1.05717 154
CELEBRITY_LIKEABILITY 2.6364 1.10742 154
BRAND_LOYALTY 3.2727 1.09229 154
COMPETENCE 2.8961 1.18360 154
RELIABILITY 2.3442 1.11660 154
CONFIDENCE 2.7208 1.15185 154
WILLINGNESS_TO_RELY
2.8312 1.09548 154
CREDIBILITY 3.1364 1.26320 154
BRAND_SWITCHING 2.1753 1.13836 154
REPURCHASE_
2.7922 1.15286 154
FREQUENCY

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5.4 Factor Analysis used

Now after verifying the appropriateness of the use of Factor Analysis, we
proceed to the detailed analysis of the data using Factor Analysis in our final
testing for the initial 153 respondents.

Statistics used under Factor Analysis

• Method of Factor Analysis:

Principal component analysis

• Details of Descriptive:
Initial Solution

Coefficients

KMO & Bartlett’s test of sphericity

• Details of Extraction:
Correlation matrix

Eigen values >1

Scree Plot

• Details of Rotation:
Varimax and Rotated Solution

• Details of Option:
Exclude case list wise

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5.4.1 Kaiser-Meyer-Olkin (KMO) and Bartlett's Test

Again, to justify the use of Factor Analysis in this situation we go for Kaiser-
Meyer-Olkin (K.M.O.) & Bartlett’s test of sphericity.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling
Adequacy. .777

Bartlett's Test of Approx. Chi-Square 326.664

Sphericity df 45
Sig. .000

Bartlett’s test of sphericity tests whether the correlation matrix is an identity

matrix or not and since the significance value in our case is less than 0.05 so
it is not an identity matrix and we can use factor analysis.

Kaiser-Meyer-Olkin (K.M.O.) which tests whether the intraset correlations

are high, and since its value is greater than 0.6 so the sample is adequate
and factor analysis is justified.

5.4.2 Communalities
It is the explained variance of an item or the variance that the items &
factors share in common. With higher values indicating that the extracted
factors explain more of the variance of an individual item. In the Initial
column a value of 1.00 indicates the standardized variances. Values in the
extraction column explain the percentage of variance explained in the
dependent variable ex. 54.6% of the variance is explained by the likability.

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Communalities

Initial Extraction
QUALITY_ASSURANCE 1.000 .458
CELEBRITY_LIKEABILITY 1.000 .546
BRAND_LOYALTY 1.000 .265
COMPETENCE 1.000 .471
RELIABILITY 1.000 .394
CONFIDENCE 1.000 .485
WILLINGNESS_TO_RELY
1.000 .506

CREDIBILITY 1.000 .640

BRAND_SWITCHING 1.000 .503
REPURCHASE_
1.000 .453
FREQUENCY
Extraction Method: Principal Component Analysis.

5.4.3 Total Variance Explained

T o ta l V a r ia n c e E x p la in e d

In itia l E ig e n v a lu e s E x t ra c tio n S u m s o f S q u a re d L o a d in gRso t a tio n S u m s o f S q u a re d L o a d in g s

C o m p o n e n t T o ta l % o f V a ria n c C e u m u la t iv e % T o t a l % o f V a ria n c Ce u m u la tiv e % T o t a l % o f V a ria n c C e u m u la tiv e %
1 3 .2 8 9 32.894 3 2 .8 9 4 3.289 3 2 .8 9 4 3 2 .8 9 4 3 .0 3 3 3 0 .3 2 6 3 0 .3 2 6
2 1 .4 3 3 14.327 4 7 .2 2 2 1.433 1 4 .3 2 7 4 7 .2 2 2 1 .6 9 0 1 6 .8 9 6 4 7 .2 2 2
3 .9 8 5 9.854 5 7 .0 7 6
4 .9 8 3 9.835 6 6 .9 1 0
5 .7 1 2 7.118 7 4 .0 2 9
6 .6 6 3 6.628 8 0 .6 5 7
7 .5 8 8 5.881 8 6 .5 3 8
8 .5 0 2 5.019 9 1 .5 5 7
9 .4 7 8 4.779 9 6 .3 3 6
10 .3 6 6 3.664 1 0 0 .0 0 0
E x t ra c tio n M e t h o d : P rin c ip a l C o m p o n e n t A n a ly s is .

From the above “Eigen Value Table”, we can see that the Eigen values of the
first two variables are > 1. This shows that the first two factors explain the
total variance to a great extent. We also see that the first 2 factors
cumulatively account for more than 47% of the variation

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“Percentage of variance” explains the variance accounted for by each specific

factor or component, relative to the total variance in all the variables. As
factor one with Eigen value 3.289 explains the variance which equals to
32.894 and “Cumulative %” explains the total variance explained by the
factor when more than one variance is taken into consideration by adding
their individual variance as here three factors are taken into consideration
which cumulatively accounted for nearly 47 % of variance and hence only
these many factors are worth considering.

In the “Rotation sums of squared loadings “we can see that the percentage
of variance explained is now approximately evenly distributed amongst the
four factors as compared to the values previously in the “Initial Eigen
values” table.

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5.4.4 Scree plot

It helps the researchers decide the number of factors that should be

retained. Scree plot is a plot of the eigen values against the no. of factors in
order of Extractions that there are only two factors whose Eigen value is
more than 1 so we consider these two factors

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Scree Plot

3
Eigenvalue

1 2 3 4 5 6 7 8 9 10

Component Number

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5.4.5 Component Matrix

Component Matrixa

Component
1 2
QUALITY_ASSURANCE .505
CELEBRITY_LIKEABILITY .734
BRAND_LOYALTY .513
COMPETENCE -.552
RELIABILITY .567
CONFIDENCE .664
WILLINGNESS_TO_RELY
.709

CREDIBILITY -.671
BRAND_SWITCHING .650
REPURCHASE_
.671
FREQUENCY
Extraction Method: Principal Component Analysis.
a. 2 components extracted.

The above component matrix contains the coefficients/factor loadings, which

represent the correlations between the factors and the variables. The
component matrix cannot be used to infer anything about the variables.
Because we cannot take a component or two on which maximum loadings
are associated but we want an equally distributed result so that we can
devise an appropriate strategy for that component based on our result and
hence we now decide to rotate the component matrix. Here, we have a
thumb rule that if the correlation is greater than 0.4, then it would imply
that the factor and the variable are closely related and hence in the above
component matrix we have suppressed the loadings which are less than 0.5
so as to clearly bring out the significant loadings.

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Thus, in lieu of the above difficulty, we use the “Rotated Component/Factor

Matrix” which has been formed using the “Varimax” method. In this matrix,
the same variable would not be correlated with more than one factor. The
“Rotated Component/Factor Matrix” would look as follows:

5.4.6 Rotated Component Matrix

Rotated Component Matrixa

Component
1 2
QUALITY_ASSURANCE .637
CELEBRITY_LIKEABILITY .715
BRAND_LOYALTY
COMPETENCE .664
RELIABILITY .626
CONFIDENCE .537
WILLINGNESS_TO_RELY
.679

CREDIBILITY .785
BRAND_SWITCHING .709
REPURCHASE_
.604
FREQUENCY
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 3 iterations.

Thus by rotating the component matrix we have distributed the percentage

of variance across all the components.

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5.4.8 Correlated common factors: Initially we can group the

extracted variables as shown (factor naming done) -

Factor 1
Brand Perception

Factor 2 Celebrity Influence

The factor naming was done such that the variable with the highest loading
for a particular factor is reflected in the factor name while accounting for
other variables too with that factor name.For example the second factor had
the highest loading of 0.785 and so the factor name of celebrity influence
reflectes this variable of celebrity credibility and takes into account the
celebrity competence too.

6.Conclusion

Through our analysis we have come to the conclusion that the three factors
that influence the Brand Trust of the consumers while buying a product are-

• Brand Perception – Consumers are giving importance to the quality

of the product as well as the celebrity’s likability or reputation
endorsing the product. Their trust is also affected by the willingness to
buy the product. Also more is the consumer loyal towards a particular
brand more he is tempted to buy that product again and again
because of the trust developed for that brand i.e. brand switching will
be minimized once the consumer develops trust in the celebrity
endorsed brand.
• Celebrity Influence – Consumers are also giving importance to the
competence and the credibility of the celebrity endorsing the product

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Brand loyalty will be developed for a brand by giving quality products

as well as having a celebrity who can establish a perfect congruity
between the product he is endorsing and the consumers at mass.
Hence a company while devising any marketing campaign must take
into account the celebrity’s influence on the consumers.

7.Questionnaire
Kindly fill in the following questionnaire for Market Research assignment.
Thank You for the same.

The following questions must be answered on a scale of 1 to 5 with:

1-->Strongly disagree
2-->Disagree
3-->Neither disagree nor agree
4-->Agree
5-->Strongly agree

* Required
Top of Form

1. Advertisements affect my Purchasing decision *

1 2 3 4 5

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Strongly disagree Strongly agree

2. Products that celebrity endorses assure quality *

1 2 3 4 5

Strongly disagree Strongly agree

3. You will buy a product because your favorite celebrity endorses it *

1 2 3 4 5

Strongly disagree Strongly agree

4. If your favorite product is endorsed by a celebrity you don’t like, you will still trust the
advertisement *
1 2 3 4 5

Strongly disagree Strongly agree

5. You prefer a celebrity endorsed product as against a non-celebrity endorsed product *

1 2 3 4 5

Strongly disagree Strongly agree

6. If your favorite celebrity endorses the product which you don’t like, you will buy the product.
*
1 2 3 4 5

Strongly disagree Strongly agree

7. Aamir Khan’s presence in Coca-Cola’s ad has brought back my trust after the pesticide scam *
1 2 3 4 5

Strongly disagree Strongly agree

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8. Given for a same product category, I will trust the advertisement which is endorsed by a
celebrity.(eg :- For the product shampoo will you go with Dove or Sun Silk) *
1 2 3 4 5

Strongly disagree Strongly agree

9. The credibility of the endorser affects your buying decision *

1 2 3 4 5

Strongly disagree Strongly agree

10. Since the time Deepika Padukone has become the Brand ambassador of BSNL, your trust in
BSNL has increased *
1 2 3 4 5

Strongly disagree Strongly agree

11. Celebrity endorsement do impact your rebuying decision for a particular product *
1 2 3 4 5

Strongly disagree Strongly agree

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