1.0 Background

1.1 Background of the industry

Sri Lankan FMCG markets are growing; this is primarily driven by the growth of the income levels of the consumers leading to higher demand for these products. Sri Lanka has seen an FMCG spending growth of 9% in 2016 (WARC, 2017). It is also vital to note that US$500 million is spent by the Sri Lankan companies on advertising and the contribution of the FMCG companies to the advertising space is high (Nielsen, 2017). This shows that the role of the FMCGs and advertising has a close relationship. However, the FMCG market spaces are highly competitive. This is due to the fact that there are many local as well as regional companies investing in the market space with a view to benefitting from the right outcomes.

Celebrity advertising is one of the prominent strategies that these companies use (Sridevi, 2014). This is due to the fact that celebrities have developed their image and the brand will be able to benefit from this developed image of the celebrities. This allows the companies to appeal to the consumer decision-making process as they seek to associate themselves with the values of the celebrity who is attached with the FMCG product available in the market. This shows that celebrity advertising currently remains one of the important tools at the disposal of FMCG companies.

1.2 Problems and boundaries

Sri Lankan companies also spend on celebrity endorsement activities; while the exact amount spent on such advertisements is not known, the fact that FMCG companies have to use celebrity endorsement indicates that they have to incur an added cost. This is a growing problem for the companies in a market in which the products are competing on a price basis. The companies have to make sure that they maintain the prices low to meet the competitiveness.

This shows that there is a clear need to explore the role of the FMCG celebrity endorsement and identify if this is actually effective. If this is not effective, that shows the companies could use alternative approaches which are less costly, and that should make sure the overall overhead expenses are reduced. Thus, the research will be able to indicate how effective the celebrity endorsement is on increasing the sales of FMCG items in Sri Lanka.

1.3 Significance and rationale

The study has a high level of practical as well as academic significance; there are limited research available on this area of discussion. The role that the celebrities play in the context of the FMCG market is largely unknown. Thus, the study will be able to close this gap and add to the body of knowledge on FMCG marketing in Sri Lanka. Further, the study has to be able to provide practical insights that are valuable for FMCG companies. This is another aspect of insights that will provide beneficial results to the parties. Thus, the study will be able to provide useful insights about the impact of celebrity endorsement on improving the sales.

1.4 Research question

The research question indicates the area in which there is a knowledge gap; the question allows this knowledge gap to be filled in line with the needs of the provided situations. It is important that the research question is an area of importance that requires a clear answer, yet without the research, the actual answer is not known (Calvert, 2013).

Does celebrity endorsement of the fast moving consumer goods in Sri Lanka lead to increased sales of such products?

The specific research questions that are raised based on the above discussion can be identified as follows:

• Does celebrity endorsement of the FMCGs allow them to increase overall awareness of the product in the market?
• Does celebrity endorsement of FMCG products contribute to increasing the consumer interest in these products?
• Does celebrity endorsement of FMCGs contribute to increasing consumer desire to purchase a product?
• Overall, how effective is celebrity endorsement in the context of driving sales of the FMCG sector?

1.5 Research objectives and conceptual framework

1.5.1. Objectives

• To identify the usage of celebrity endorsement in the context of the FMCG marketing in the Sri Lanka.
• To identify the impact such celebrity endorsement creates on the buyer behavior.
• To identify how to develop further steps to improve the overall effectiveness of the celebrity advertising.

1.5.2. Concepts and measures

2.0 Research methodology

The study has to be conducted in a manner in which the information collected remains accurate. The development of an appropriate methodology would enhance the quality of the information available. Thus, the methodology has to develop to maximize the accuracy levels affiliated with the study.

2.1 Research design

2.1.1. Deductive or inductive

The study develops a conceptual framework and evaluates the nature of the relationship between the variables. Thus, evaluation of the appropriate relationships between the variables will take place (Fourie, 2014). This indicates that hypotheses are developed and tested through the study. Thus, the study is a deductive study.

2.1.2. Exploratory or conclusive

The study has to reach a set of conclusions affiliated with the end results; the end result should indicate the nature of the relationships between the variables. Thus, the study has to be conclusive in nature (Morris, 2006). While the findings could change over a period of time, it is important to note that as a cross sectional study, the findings remain conclusive.

2.2 Research strategy

The research strategy has to be developed in line with the nature of the data requirements; in this instance, the study has to collect data that facilitates the testing of the hypotheses. In order to collect the required data, the study has to interview the customers. The best approach to conduct interviews is surveys as they should reveal the appropriate insights affiliated with the discussion. Thus, the research strategy is based on surveys.

2.3 Research instruments

Questionnaires are used for conducting the research. Structured questionnaires are the most suitable for this purpose due to the fact that they provide insights to the areas of discussion (Wellstead, 2013). As the study is quantitative, the information that is collected from the structured questionnaires would be appropriate due to the fact that they are focused on the required area and can be further manipulated using various statistical approaches. Once the initial questionnaire is developed, a set of 5 pilot studies will be conducted with a view to improving the questionnaire. The final version of the questionnaire would thus have a high level of reliability on the information provided.

2.4 Sample plan

2.4.1. The population

The users of the FMCG products of the country are the main parties who would have to participate in the research; it is clear that the total population of the country has a well-known level of exposure to the consumption of the FMCG products. They are also likely to be exposed to media and other promotion efforts taken by these FMCG companies. This shows that the population for the study is very large and is almost close to all the people in the country.

2.4.2. Sample size

When the sample size is calculated, an appropriate estimation has to be carried out based on the size of the population as well as the other important factors. The following formulae can be used for the given purpose.

n = N

1+Ne²

n= Sample size

N=Total population

e=Sample error

The population in this case is the population of the country and can be considered to be around 20 million; the confidence level that is associated with the study is expected to be around 95%. This should indicate the size of the sample that has to be used for the study.

n = 20,000,000 / 1+ (20,000,000) (0.05)2

n = 20,000,000 / 50,000

n = 400

Thus, the above estimation highlights that the sample size should be 400 provided that the confidence level is at 95% and the population size is around 20 million. Therefore, the above aspects remain important for the discussion. Thus, a sample of 400 is selected based on the contacts as random approaches are not possible due to the large sample size and lack of a clear sample frame.

2.5 Data types and collection methods

The above discussion has facilitated the identification of the appropriate data collection methods for the study. It is further important to make sure that more details are identified associated with the data collection and analysis approaches. Such activities will enhance the quality of the outcomes that are being discussed.

2.5.1 Sources of data required

2.5.2. Research strategies for data collection

The study has to collect primary data; the data has to be collected from the respondents who are the users of the FMCG products in the market. This shows that the data is quantitative in form and has to be directly collected from the respondents. The study uses a structured questionnaire for the purpose of collecting the required information for the study. In order to measure each of the attributes, the study uses the Likert scale. The following table indicates the Likert scale that is used in this context.

Thus, the above aspects indicate how the data collection is structured and how each of these areas could contribute to the collection of the required data items.

3.0 Research design and data analysis

Appropriate steps have to be taken to make sure that the collected data is analyzed in line with the needs of the study. This should provide a set of indications as to the nature of the links between the variables and how one variable could impact the behavior of the other variable.

3.1 Conceptual table

3.2 Analysis tools

In order to analyze the data, the study has to use appropriate software; there are several types of software that are available for the purpose. In this instance, the study would use MS Excel, which is a basic spreadsheet software that provides the analytical capabilities coupled with the SPSS which is a data analysis software. These two should be used as the appropriate tools in the study context.

3.3 Ethical considerations

3.4 Timeline and Gantt Chart

3.4.1. Timeline of the study

3.4.2. Gantt chart

3.5 Expected research outcomes

3.5.1 Expected primary outcome and other significant outcomes

The study will indicate to which extent the celebrity advertising element is effective. This will highlight if the celebrity advertising actually contributes to the increase of sales for the companies. Thus, the companies will be able to develop the right approaches that will maximize the outcomes from the celebrity advertising activities.

3.5.2 Research barriers and limitations

The study would provide useful insights related to the triggering of purchase action due to the celebrity endorsement of FMCG products in the markets. It is also important to note that the sample might not be representative and this could act as a barrier to the generalization of the findings. Further, the study uses certain statistical models and they might have limitations in place. It is also important to note that accuracy of the findings is dependent on the information provided by the respondents and testing of such insights might also prove to be difficult.

References

Calvert, P., (2013). “Research Methods in Information”. The Electronic Library, Vol. 31 Issue: 5, pp.682-683.

Fourie, I., (2014). “Research Methods in Information”. Aslib Journal of Information Management, Vol. 66 Issue: 6, pp.702-703.

Morris, A., (2006). “Provision of research methods teaching in UK LIS departments”. New Library World, Vol. 107 Issue: 3/4, pp.116-126.

Nielsen, (2017). 2016; The year that was, [online] Available at: https://lmd.lk/wp-content/uploads/2017/02/Nielsen-Sri-Lanka-2016-Review.pdf, [Accessed October, 2017].

Sridevi, J., (2014). Effectiveness of Celebrity Advertisement on Select FMCG – An Empirical Study. Procedia Economics and Finance, Volume 11, 2014, Pages 276-288.

WARC, (2017). Emerging markets take over half of FMCG spend. [online] Available at: https://www.warc.com/NewsAndOpinion/News/Emerging_markets_take_over_half_of_FMCG_spend/38722, [Accessed October, 2017].

Wellstead, P., (2013). 2016 THE YEAR THAT WAS, “Research Methods: Information, Systems and Contexts”. Library Review, Vol. 62 Issue: 8/9, pp.635-636.

Bibliography

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