Effect of Celebrity Endorsements on Dimensions of Customer-based Brand Equity: Empirical Evidence from Indian Luxury Market

Abstract

Brand equity is a brand’s incremental value due to its name. It has been long argued that brand equity must be the ultimate criterion of success in brand management because brand equity contributes both to long-term sales and long-term profits. Celebrity endorsement has gained prominence as a popular resource for marketing strategies among many firms. This research aims to empirically test the role of celebrity endorsements in the brand equity formation process. This study explored the relationship between celebrity endorsements and four dimensions of brand equity of Aaker’s (1991) brand equity model in Indian luxury products market. Data were collected through a shopping mall intercept survey of 202 respondents in the cities of Delhi, Gurgaon, Faridabad, Noida and Chandigarh. Exploratory factor analysis was used for reducing the number of scale items while regression was used to test the proposed hypotheses. The results show a positive and significant effect of celebrity endorsements on two brand equity dimensions, that is, brand awareness and brand associations, but celebrity endorsements do not have any significant influence on other two dimensions, that is, perceived quality and brand loyalty. We finally discuss the implications—both theoretical and managerial—before providing directions for future research.