2 LITERATURE REVIEW

This chapter aims to comprehensively review the existing research done in the area of celebrity endorsements in order to get the better understanding of the research subject. The content of the chapter includes concepts and meaning of celebrity, celebrity endorser, celebrity endorsements, celebrity versus non-celebrity endorsements, positive and negative aspects of celebrity endorsements, consumer buying behaviour, models for celebrity endorsements, celebrity endorsement an Indian perspective and theoretical model for the research.

2.1 Concept and Meaning 2.1.1 Celebrity "A sign of a celebrity is that his name is often worth more than his services. Daniel J Boorstin Celebrities are people who enjoy public recognition and who often have distinctive attributes such as attractiveness and trustworthiness. (McCracken 1989; Silvera and Austad 2004). The term celebrity refers to an individual who is known to the public, such as actors, sport figures, entertainers and others for their achievements in their respective areas other than the product endorsed by them (Friedman and Friedman, 1979:63). Boorstin in 1961 specified the most important quality of being a celebrity i.e. not being forgotten and known by people for their well-knowness. According to McCracken (1989), It can include people from movies, television, sports, politics, business, artists and persons from the military. Whereas, In this modern age of marketing, Celebrities may also be an animated character like Fred Flintstone, or an animal (Miciak and Shanklin, 1994).

2.1.2 Celebrity Endorser 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 . Kamins (1989), defined celebrity endorser as an individual who is known to the public for his or her achievements in areas other than that of the product endorsed. While Stafford et al., 2003 gave a clear definition by defining celebrity endorser as, a famous person who uses public recognition to recommend or co-present with a product in an ad.

Celebrities are often hired by advertisers to lend their personality to a product or brand (Kaikati, 1987). The use of celebrities has been widely used as it could provoke attitudinal and emotional reactions (Kanungo and Pang, 1973) than a non-celebrity endorser (Atkin & Block, 1983; Petty and Cacioppo 1983). Therefore celebrities who are placed as models and are seen as in support of the product and / or its claim are known as endorsers (Tellis, 1998). In order to be effective a celebrity endorser should have the credibility to attract attention Miciak and Shanklin 1994) increase awareness of the endorsed product (Wilson, 1997) and influence the purchase decision of the targeted audience (Ohanian, 1991).

2.1.3 Celebrity Endorsement Celebrity endorsements is been accepted to be a ubiquitous feature of modern day marketing (McCracken 1989). It has also been seen that one quarter of all advertisement use/feature a celebrity to endorse a product or brand. This validates the effectiveness of Celebrity endorsements as a means of persuasive communication. It has the potential to enhance audience attentiveness, make the ad more memorable, credible, and desirable and add glamour to the endorsed product (Spielman, 1981). Early Research has found that celebrities are more effective than other types of endorsers , such as the professional expert, the company manager, or the typical consumer (Friedman and Friedman, 1979). Using celebrity endorsers, companies may easily crack into consumers symbolic association to an aspirational reference groups, as celebrit y endorsers are perceived as dynamic, attractive and likable (Assael, 1984; Atkins and Block, 1983; Kamins, 1990). The use of celebrities in advertisements is not a new phenomenon (Kaikati, 1987). Celebrity endorsement, as a marketing practice, has a very distinguished history. In the eighteenth century, a famous potter Josiah Wedgwood pioneered in using celebrities to his advantage. Once when Queen Charlotte began to use his products, Wedgwood capitalised on his new status by referring himself as the Potter to Her Majesty (Dukcevich, 2004). For instance one of the early examples involves Queen Victoria associating with Cadbury Cocoa (Sherman, 1985). McCracken (1989) further conceptualised Endorsement process in different endorser roles and endorsement types. Celebrity Endorser can take the role as an expert, as a spokesperson associated with a product, or as an aspirational figure with no particular knowledge or relationship with, the product. There can be four types of Endorsement; Explicit (I endorse

this product), Implicit (I use this product), Imperative (You should use this product), or copresentational mode (merely appearing with the product) 2.2 Celebrities as a form of Inspirational Reference Group From a theoretical perspective, Celebrities are classified in the category of heroes as reference groups and opinion leaders. They are recognised as effective endorsers due to their symbolic aspirational reference group associations (Assael 1984, Solomon and Assael 1987). Celebrities as heroes have the potential to influence the cognitive processes of consumers (Wilkes and Valencia 1989). The relationship between values and heroes can be bidirectional. Celebrities can shape and refine existing cultural meaning and encourage the reform of cultural values and categories (Biswas et al. 2009). Therefore by using celebrity endorsers, companies may tap into consumers symbolic association to an aspirational reference groups, as they are perceived as dynamic, attractive and likable (Assael, 1984; Atkins and Block, 1983; Kamins, 1990). Celebrities, particularly movie stars, TV personalities, popular entertainers and sports legends, provide a very common type of reference group appeal (Schiffman and Kanuk 2004). Consumers tend to form an attachment to any object that strengthens ones self identity or desired image, renders feelings of connectedness to a group or a personality and perhaps the most common example of this form are the celebrities (OMahony and Meenaghan, 1998). The power of the celebrities lies in their ability to influence the consumers, even though they are physically and socially far from a common consumer (Choi & Rifon, 2007). Based on the meaning transfer model by McCrackens (1989) that brands endorsed by celebrities are a source of symbolic brand meaning. It can be said that consumers connect the symbolism associated with the celebrity and the brands they endorse, transferring these meanings from the brand to themselves by actively using those brands (Escalas and Bettman 2005). Consumers are likely to accept meanings from the brands endorsed by a celebrity whom they perceive as similar to themselves or whom they aspire to be like. For instance, a consumer may consider himself to be athletic and fashionable, like David Beckham, who currently endorses many brands, including Adidas and Police. Due to his aspiration to look like Beckham he may choose to buy an Adidas gear and wear Police watches. As a result, he may form a self-brand connection to these brands endorsed by Beckham (Schiffman and Kanuk 2004).

2.3 Celebrity versus Non-Celebrity Endorsements According to Seno & Lukas (2007), Celebrities are more effective than other type of endorsers such as the company manager, typical consumer and the professional expert etc. Companies possess great control over created spokespersons since they develop these characters. They can build characters which are consistent with their brands and target audiences, and ensure that these characters are exclusively endorsing only one particular product (Tom, et al. 1992). On the contrary, companies hold limited control over the celebrity endorsers, since they have created their public persona themselves over the years. Previous research on celebrity endorsement reveals that celebrity endorsers produced more positive attitudes towards advertising and greater purchase intentions than a non-celebrity endorser (Atkin and Block 1983; Petty et al. 1983; Ohanian 1991). On the contrary, Mehta (1994) argued that there were no statistically significant differences in attitudes towards advertising, brand and purchase intention on endorsed brand between celebrity and non-celebrity endorsements. However, differences were found in cognitive responses generated by respondents. In a research Tom et al.'s (1992) proved that created endorsers are more effective than celebrity endorsers on the classical conditioning paradigm. According to this paradigm, (see Figure-1), consumers learn the association between an unconditional stimulus (celebrity endorser) and a conditional stimulus (product) through repeated exposure. The association is much stronger with original material (created spokesperson) than with popular material because the popular material (celebrity endorser) is not just linked to a promoted product but with many other things as well. In other words, the bond between the created celebrity and the product is strong because it is unique and exclusively endorsing only one product. Whereas, the bond between the celebrity endorser and product is weak due to its multiple endorsements/associations (Erdogan 1999). Agrawal and Kamakura (1995) and Mathur, Mathur and Rangan (1997) conducted two different studies to assess the economic worth of celebrity endorsement contracts on the expected profitability of a firm. The authors used Event Study Methodology, which is used to identify the valuation effects of marketing decisions (Mathur, et al. 1997). Surprisingly, outcomes from both of the studies emphasised on the effectiveness of use of celebrity endorsers (Erdogan 1999).

2.4 Celebrity Endorsement as a Marketing Communication tool From marketing communication perspective, it has become more important for firms to design strategies which provide competitive differential advantage to its products and services. It attempts to create positive effects in the mind of consumers. In order to achieve this, Celebrity endorsement is a commonly used marketing communication strategy (Erdogan, 1999). Companies spend large amount of money to endorse their brands through these celebrities. These celebrity endorsers are perceived and gifted with dynamic, attractive and likeable qualities (Atkin and Block 1983) and companies try to align these qualities to their products through marketing communication strategies. Many researchers believe that an advertisement featuring a celebrity delivers a higher degree of appeal, attention, recall rate and possibly purchase compared to the ads without celebrities (Cooper, 1984; Dean and Biswas, 2001) and thereby contributing substantial positive impact on financial returns for the companies (Farrell et al. 2000; Endorgan, 2001).. There is much research being done on celebrity endorsers both in the academic literature (Endorgan, 2001; Atkins and Block, 1983; Friedman et al., 1977) as well as trade journals (Anonymous, 1989, 1996). Most of the research revealed the efficiency of celebrity endorsements (Cooper, 1984; Dean and Biswas, 2001, Atkins and Block, 1983; Friedman et al., 1977) but in some cases, celebrity endorsements just dont work everytime (Misra and Beatty, 1990). In fact, many commercials using such celebrity endorsers do not live up to the advertisers expectations (Miciak and Shanklin, 1994). Initially, implementing this strategy came out to be a no-risk/all-gain or win-win situation, but like another marketing communication strategy, there are potential hazards involved too. There are various potential risks also involved while implementing this strategy which can also lead to severe results. In other words, celebrity endorsement strategy can be a two-edged sword, which may create and destroy a brand. Therefore, we will explore the positive and negative aspects of celebrity endorsement.

2.5 Positive aspects of Celebrity Endorsement The increasing competition between firms in order to attract more consumers towards their products has encouraged marketers to use celebrities to endorse their products. Moreover, recent technological advances in the media such as DTH, video control systems, cable and satellite television has increased consumer power over programmed advertisement and made advertising more challenging (Croft et al. 1999). It is also perceived that the featuring a

renowned celebrity helps in solving the problem of over communication that is becoming more and more prevalent these days (Kulkarni & Gaulakar, 2005). Marketers to ease this threat and attract more consumer attention towards their products and advertisements use celebrity endorsement strategy. Due their well knowness, celebrities help advertisements to stand out from the surrounding clutter by appearing in them, increasing the communicative ability by cutting through excess noise in a communication process (Sherman 1985). Hiring a famous celebrity as their brand endorser may also help improving the image for a tarnished company. Celebrity Endorsement may also help in restoring or polishing a companys image (Erdogan, 1999 For most of the multi-national companies while expanding to different countries may face some issues like cultural 'roadblocks' such as time, space, language, relationships, power, risk masculinity, femininity and many others (Mooij 1994; Hofstede 1984). Celebrity endorsements can be a powerful device to enter foreign markets. Hiring a world famous celebrity or a celebrity from the expanding country may help companies to overcome many such issues. For Instance, Pepsi Co Intemational increased its market share in India by Endorsing through famous celebrities and crickets such as Shahrukh Khan, MS Dhoni, Kareena Kapoor etc. It is been experienced that the products endorsed by celebrities help them to standout and take more notice while shopping due to their improved level of product recall (Bowman 2002). Advertisements featuring a celebrity make a strong impact on the learning style and memory of a consumer which is an important aspect of marketing communication success. Celebrities often make the ad more memorable in the mind of the consumer even if there is no immediate need of the advertised product. Marketers use this advantage of information storage in the minds of the consumers which can be readily retrieved at the time of shopping or when the need arises (Schultz & Barnes, 1995). All these arguments lead to the conclusion that celebrity endorsements likely to have a positive effect on consumer buying behaviour (Goldsmith, Lafferty and Newell 2000; Mathur, Mathur & Rangan 1997)

2.6 Negative aspects of Celebrity Endorsement Despite the various benefits of celebrity endorsements, there are still many potential risks involved in using celebrities to endorse their products as a part of a marketing communication strategy for a company. Negative information and publicity concerning the celebrity is one of the major risks associated with the celebrity endorsement. There can be other factors as well

which may lead to serious consequences for instance suddenly changed image, drop in popularity, moral issues, losing credibility by over endorsing, or overshadow endorsed products or vampire effect (Cooper 1984; Kaikati 1987). Negative information about a celebrity endorser not only impacts consumers' perception about the celebrity, but also the endorsed product (Klebba and Unger 1982; Till and Shimp 1995) and may also ruin the brand reputation (Till 1996). In fact many companies have paid a very big price over the celebritys misdeeds. For instance PepsiCo suffered with three stained celebrities - Mike Tyson, Madonna, and Michael Jackson (Katyal 2007). Companies have faced serious embarrassment when their spokesperson or celebrity endorsers were deeply involved in a controversy (Erdogan 1999). Sometimes in an advertisement, consumers fail to focus on the product being endorsed due to the glamour and popularity of the celebrity, hence fails to promote the brand (Rossiter and Fercy 1987). As Cooper (1984) said "the product not the celebrity must be the star." Overshadowing or commonly termed as the vampire effect occurs when the celebrity endorser occurs in the presence of multiple other stimuli which all competes to form a link with the celebrity endorser. (Till 1996). It leads to lack of clarity for the consumer. (Evans 1998). The major issue arises out of this problem is that consumers fail to notice the brand being endorsed because they are more focussed over the celebrity (Erdogan 1999). Overexposure is a common issue among highly demanded and well recognized celebrity endorsers because every major company wants to hire them to endorse their brands which ultimately leads to making the consumer more confused and unable to recall correctly as to which brand the celebrity stands for. (Tripp et.al. 1994). Another important issue concerning the celebrity endorsement is that sometimes most famous celebrities often indulge in endorsing much different type of products and services just for the sake of their greed for money. For example Shahrukh khan endorses more than 20 different brands from hair oil to automobiles. Solomon et al. (2002) referred this as the hired gun problem, where the spokesperson is perceived as endorsing the product only for the sake of money. If a celebrity lends his image to various brands by appearing in advertisements it also has less impact on the consumers mind and the message being delivered since the relationship between the celebrity and the endorsed brand is not distinctive (Mowen and Brown 1981). This may not also disappoint the celebrity fans (Graham 1989) but also make the consumers aware of the real fact of endorsements that celebrities are endorsing the products just for the huge amount of money they get and has nothing to do with the product attributes or product

being endorsed (Cooper 1984; Tripp, et al. 1994). Many researchers have also proposed that negative information about a celebrity not only influences consumers' perception for the celebrity, but also the product endorsed by him (Klebba and Unger 1982; Till and Shimp 1995). There are some other new limitations being faced these days called Celebrity Trap, Celebrity Credibility and Celebrity Clutter. Celebrity trap is when it becomes difficult for marketers to separate the role of the message and the role of the celebrity in selling the brand and when celebrity becomes an addiction for the marketing team. It becomes more and more difficult to find the substitute. Celebrity credibility has become questionable these days. Consumers have now become aware of the fact that celebrities are endorsing brands just for the sake of money. The credibility which celebrities used to possess in the past is bound to decrease if a celebrity begins to appear and endorses a brand in every possible category (Patel 2009). Celebrity Clutter is when each celebrity endorses multiple products and multi-brands in a category, make the customer more confused. It make consumer to make comparisons such as whether this celebrity is bigger or that one to make product choices. Pepsi is endorsed by Shahrukh Khan and Coca Cola by Amir Khan. Celebrity endorsers have now become a liability to the brand they endorse (Till and Shimp,1998) as there are decreasing returns associated with celebrities (Agrawal and Kamakura 1995). Some researchers also referred celebrities as a puppet in the hands of marketers implying that they perceive the celebrities to be fake and lying, while endorsing certain brands (Temperley & Tangen, 2006).

2.7 Multiple Celebrity Endorsements Hsu and McDonald (2002) defined multiple celebrity endorsement as the use of two or more celebrities in an advertising campaign. According to him, multiple celebrity endorsement can further be classified under two different parts based on how celebrities are featured in ads. First scenario is where two or more celebrities appear together in an advertisement to endorse a product. Secondly, different celebrities appear in a series of advertisement separately to endorse the same product. Multiple celebrity endorsement is not a new phenomenon for marketers in the advertising industry. Some of the big brands include Nike, Adidas and American Express. The milk mustache campaign is another major example featuring than 100 celebrities to promote milk consumption since 1995 (Hsu and McDonald 2002). In context to India, For instance, Pepsi has been endorsed by Sachin Tendulkar, Aamir Khan, Amitabh Bachchan, Rahul Dravid, Shahid kapoor, kareena kapoor, Ranbir Kapoor, Deepika Padukone etc (Khatri,2006). According to Hsu and McDonald (2002) p.25, "Multiple

celebrity endorsement advertising may help the advertiser to build a sense of consensus, avoid audience boredom and appeal to multiple audiences". Erdogan and Baker (1999) in their research argued that it is useful for the marketers to use multiple celebrities for endorsing a particular brand because it can reach out and appeal to its entire target audience. However, the use of multiple celebrities might create a confusion about the brands identity in the consumers mind and therefore it should be assured that each and every celebrity possesses compatible meanings that are sought for brands (Erdogan and Baker, 1999 p. 13). For instance LOreal endorses its product line according to the celebrity attributes and the meanings associated with them (Redenbach, 2005). The greatest fear for marketers while using multiple celebrities is that today consumers are more aware, educated and knowledgeable about the use of celebrity endorsements. It may lead them to think that celebrities are endorsing the brands just for the sake of money and doesnt really care about the product, which might negatively affect the consumers buying behaviour (Belch and Belch, 2001). In a research by Redenbach (2005) argued that endorsing four different brands/products influences the celebritys trustworthiness, expertise and likeability. Because the celebrity instead of focusing on one brand, endorses multiple brands and which eventually lacks distinctiveness (Redenbach, 2005). There is also a possibility that using so many different celebrities might overshadow the brand and lead to Vampire effect. People might just remember the celebrities but not the brand/product being endorsed/advertised (Hsu and McDonald, 2002).

2.8 Consumer Buying Behaviour In todays dynamic and competitive environment, customers are continuously exposed to various different brands through different marketing strategies. Consumer behaviour is an important and complex area for marketers as different people have different needs. As stated by Lancaster et al. (2005) that satisfaction of consumer needs is the ultimate goal for a business; thus the marketers job is to accurately identify the customer needs and accordingly develop product that satisfies their wants. Therefore, it is very critical for marketers to have a proper understanding of consumer buying behaviour. Perner (2009) defined consumer behaviour as "The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society." According to Perner (2009) knowledge of consumer buying

behaviour helps marketers in developing their marketing strategies by understanding the psychology of the consumers as how a) They think, feel, differentiate, and select between different brands or products. b) How the consumer is influenced by his or her environment (e.g., culture, family, signs, media); c) The behaviour of consumers while shopping or making purchase decisions; d) How consumer motivation and decision strategies differ between products that differ in their level of importance; and e) How marketers can adapt and improve their marketing campaigns and strategies to reach the consumer more effectively. Furthermore, it is not only important to identify and satisfy the customers need, but it is also critical to know that as to why customer needs that? It gives marketers a better understanding of consumer behaviour which ultimately helps them in satisfying customer needs efficiently and increasing customer loyalty towards their products and services (Zeithami 1985).

2.9 Types of Consumer Buying Behaviour According to Assael (1981), There are there are four type of consumer buying behaviours that can affect the purchase decision making of a consumer based on the level of consumerproduct involvement, interest in a product, situation and difference between the products available. The four type of models are explained as under

Complex buying behaviour: It usually takes place when the customer is highly involved in the product purchase decision. The high product involvement occurs when product to be bought is expensive, infrequently bought, and highly expressive. Since, these types of products are not bought frequently the consumer doesnt know much about the products and observes substantial differences among the brands available for instance buying a luxury sedan. Consumers make this type of buying decisions very carefully after collecting a lot of information about the product features, quality and performance. According to Assael (1981), Consumers tend to experience cognitive dissonance while making such complex product decisions due to increased risk perception in this type of buying behaviour. There are certain risks also involved while making such decisions for

example high may result in monetary loss, highly expressive product nature may lead to psycho-social loss and lack of product knowledge will result in increased uncertainty. From a marketing perspective, marketers need to make sure that they use the effective differentiation strategies to stand out the product from other brands available. And also, try to educate the customers about the importance, application and features of the product offered.

Dissonance-reducing buying behaviour: It occurs when the buyer is highly involved with the product purchase and observes little difference among the options available. After buying the product, the consumer tends to gather the favourable information about the purchased product that assures and validates his product purchase decision. By doing this the customer tries to reduce the dissonance or losses involved in the purchase. This type of buying behaviour involves establishment of trust, belief and attitude towards a brand. However the customer may also end up with time loss, or more likely, psychological loss and social loss. It happens due to the difference between actual purchase performance and expected purchase performance of the product.

Habitual buying behaviour: In occurs when the consumer buy the same product on regular basis over a period of time. Under habitual buying behaviour consumer product involvement is low and there is little difference between the brands available, for instance buying salt, sugar etc. The consumers buy these products out of their habit or due to their trust or brand loyalty. According to Scott (2007) consumers dont go through the process of belief, attitude and purchase decision nor look for deep information and compare the available products. Consumer buy the brands they have used and aware of. However, It is interesting to see marketers constantly trying to move these type of product especially (FMCG products) from a low involvement to a higher involvement status by differentiating them on various bases like health, safety etc. . For instance marketers are involved in developing low calorie sugar cholesterol free oil etc. and selling them at higher prices.

Variety seeking behaviour: This type of consumer behaviour originates if the customer is not happy with its earlier product purchase or out of the boredom. It specially happens with the consumers who like to shop around and try-out with different type of products. In this buying behaviour consumerproduct involvement is low but the differences among the brands are significant. These types of consumers change their brand frequently, not due to dissatisfaction, but out of boredom.

Variety seeking behaviour is identified as a key determinant factor for brand switching in consumer product category (Scott 2007). According to Assael (1981) consumers having variety seeking consumer behaviour purchase the brands which have higher degrees of perceived risk associated with them and are generally not perceived as brand loyal.

2.10 Consumer Buying Behaviour in India Since, Indias economic liberalization policies were introduced in 1991; Eliminated import licensing restrictions and reduced tariffs has led many foreign companies to enter the Indian market. India has always been a lucrative and large market for US brands and advertising (Bellman 2007). One of the most challenging concepts in the marketing is to deal with understanding the consumer behaviour. Consumer behaviour is affected by a lot of variables, ranging from personal motivations, needs, attitudes and values, personality characteristics, socio-economic and cultural background, age, sex, professional status to social influences of various kinds exerted by family, friends, colleagues and society as a whole (Shukla and Devi 2010). The study on Indian consumer behaviour has helped marketers in formulating and implementing strategies to reach the Indian consumers effectively. India is a huge country comprising 28 states and population over one billion people. From the market perspective, Indian consumer market is divided under various segments based on class, status, and income of consumers. Three-fourths of Indias population lives in rural areas, contributing around one-third of the national income. Hence, the recent emergence and development of the rural market is an opportunity for marketers in India (Matrade 2005). There has been a drastic change noticed in Indian consumer behaviour to what it used to be few decades back. Today Indian consumer wants to lead a life full of luxury and comfort. Indian consumers dont just want the availability of products; they also want better service and ambience. Purchasing power of people in India is rising very sharply. As a result, the market for luxury products in India is also climbing at a surprising rate (Shukla and Devi 2010). The Indian consumers are noted for the high degree of value and family orientation (Hofstede 1980). This value orientation has labelled Indians as one of the most sensitive consumers in the world. Even, big brands in India design a unique pricing strategy in order to grab a share of the Indian market. This family orientation extends not only to family but to friends as well and also influences the decision making. It is also been noticed that brands those tend to support family values are popular and easily accepted in the Indian market. Due its culture,

Indian consumers possess high priority for values of nurturing, care and affection (Matrade 2005). Hence, people easily get influenced by the brands communicating through the feelings and emotions. In a study by Hofstede (1980), India has a high power distance (77) as compared to United States (40) and United Kingdom (35). Indian consumers strictly follow their culture, tradition and values, as a result foreign companies are forced to give an Indian touch to their products and services offered in India. For instance McDonalds, Pizza Hut, Pepsi, Coca Cola and many other brands changed their offerings in order to expand in India (Shukla and Devi 2010). As a result of the increasing literacy rate and increasing western exposure through satellite television, fashion magazines and newspapers, there is a significant increase in consumer awareness. This awareness has made the Indian consumers more selective for the quality of the products/services by shopping in retail supermarkets Big Bazaar etc. The consumer tends to purchase from a place where his/her feedback is more valued. The Indian consumers are price sensitive and prefer to buy value for money products (Matrade 2005). Indian consumers consider price as an indicator for quality of a product as they feel that the product is expensive due to its high quality. Its also been noticed that Indian consumer buying behaviour is influenced by freebies. People tend to buy the products if there is something given for free along with it (Matrade 2005 Matrade (2005) divided Indian consumers in three different segments i.e. The Socialites, The Conservatives and the Working women. Socialites are the people belonging to the upper class of the society. They prefer to shop in expensive specialty stores, and spending a good amount of money on leading a luxurious life. They always try to differentiate themselves from others by purchasing expensive and exclusive products. Socialites are observed to be very brand insistent and would only opt for the best available in the market irrespective of money. On the contrary, The conservatives are referred to the middle class people. The conservative segment is said to be the true reflection of the Indian culture and society. Middle class people are traditional and thoughtful in their towards their purchase decisions. They spend more time with family and focus more on savings than spending. They are slow decision makers because they refer to a lot of sources before making any purchase and always look for durability and functionality of the product. The working woman segment saw a tremendous growth in the late nineties. They are independent and not bound to anything monetary wise. This segment has been the target for the marketers. Working women have their own diverse perceptions in purchase decision making and factors those appeal to them.

Today, Indian market has transformed from a sellers market to buyers market. The increased consumer power has fierce the competition in the market. This has led to the price war and has forced the companies to maintain product quality to sustain in the highly competitive market like India.