Impact of product endoresement strategies on brand loyalty. Case study of Fan Milk Ghana limited

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July, 2015
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Product endorsement Strategies have been established as strategies use for advertising in recent time. It has become a trend and perceived as a winning formula for product marketing and brand loyalty most especially with celebrities. Debatably by many scholars on the use of product endorsement strategies to be a score to brand loyalty. Some are of the view that the use of advertising feature such as celebrity as an endorser of a brand is not worth it because of the riskiness. Others too see it as of great importance most especially celebrity endorsement which have a positive influence on the credibility, message recall, memory and finally on the purchase intentions of the customer. In view of this, it is therefore very imperative to carry out a research in this area in order to establish the impact of product endorsement strategies on brand loyalty within Fan milk Ghana Limited. The Objective of the study premised on this assertion sough to examine the product endorsement strategies adopted by Fan milk Ghana Limited to examine customers perception about the effectiveness of product endorsement strategies adopted by Fan milk Ghana Limited and to analyze the impact of product endorsement on brand loyalty within Fan milk Ghana Limited. The study employed the mixed research design, taking into consideration both quantitative and qualitative approaches to achieving the objectives of the research. Data was gathered from management and non management (Staff) and consumers of Fan Milk Limited. A sample size of one hundred and fifty five (155) respondents was chosen for the investigation; comprising administration (5) and non-administration (50) and customers (100). Findings from the study revealed majority of the respondent did indicate that celebrity endorsement was one of the endorsement strategy adopted by the company. Also, few indicated that sponsorship was again an endorsement strategy adopted by the company; where it was revealed that the sponsorship strategy had the potential of increasing brand loyalty. Similarly, some also indicated that, donor as an endorsement strategy was patronized by the company with very few as low 8% agreeing on breaking news. On the perception of consumers’ perception about the effectiveness of the product endorsement strategies by the company, respondents strongly agreed that celebrity endorsement strategy was effective in achieving an increased brand loyalty of product. According to the regression model, product endorsement strategies have an impact on brand loyalty. The product endorsement strategies were statistically significant at p-value of 0.05. Also the product endorsement strategies had a predictive power (R2) of 0.666 approximately 67 percent chance of predicting brand loyalty which was moderate. Lastly, majority of respondents have had 6-10 years of relationship with Fan Milk Ghana whiles those between 1 to 5 years is about 32 % with few having 11years and above existence. Some of the challenges revealed by the study were Lack of Credibility (Brand Measurement Survey on Celebrities), Corporate Social Responsibility issues, among others. The study thus recommends that companies as well as celebrities should embark on corporate social responsibility to also increase the ambiences it has in the economy. Furthermore, advertising agencies need to be circumspect in choosing a celebrity to endorse a product. Also, companies and advertising agencies should make it a priority as part of their core values to embark on total quality management and standardisation in the production and delivery goods and services to achieve good word of mouth. These in addition to the other recommendations if effectively implemented are expected to address the challenges and achieve the objectives set by the study.
A thesis submitted to the Department of Corporate Strategy and Marketing Kwame Nkrumah University of Science and Technology School of Business in partial fulfilment of the requirements for the degree of Master of Business Administration (Strategy Management and Consulting -Option).