European Journal of Business and Management www.iiste.org ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol.8, No.3, 2016 165 The Effects of Celebrity Scandals on the Adoption Process Jacob Odei Addo School of Business, Takoradi Polytechnic, Department of Marketing, P O Box 256, Takoradi – Ghana, Abstract The use of Celebrity Endorsement (CE) in Ghana by Corporations has become a dominate phenomenon in recent years. The introduction of CE makes it possible for Companies to engage a Celebrity as a brand endorser for its products and services. The expectation is that celebrities with their large followers through persuasive powers will attract customers to the brand in question. The study sought to find out how Celebrity Scandals does affect the diffusion of such products and services into societies or markets. Using top, middle and lower level managers of both private and public sector companies of the economy, thousand customers who patronize products and services of these companies were surveyed in Accra where all Companies, Ministries, Institutions and Departments are located. The study used Analysis of variance to test if factors have individual or joint influence on the response variable. It is an instrument for reviewing the goodness of fit of the chosen model. It is used to analyze treatments (factors) means by identifying sources of variability of the data. The study revealed that though CE scandals are disturbing and have several business implications yet it does not move customers away from using the brand. The article further showed that Celebrity scandals do not abrogate the diffusion of product and services into societies. Further, it was revealed that Customers do not buy products and services because of the Celebrity Endorsers but the reality is the benefits they derive from using such products and services. Therefore, CE scandals do not stop diffusion of products and services into societies or markets. Key Words: Scandals, Celebrity, Endorsement, Diffusion 1. Introduction Corporate organizations seem to have realized the enormous benefit of using celebrity endorsement to promote their brands and this has become a new wave of promotion to one’s customer target groups in the market. Quite a number of Celebrities have been involved in a lot of activities that have brought embarrassment to the companies whose products and services they endorsed and themselves. When the endorser’s image is tarnished it actually leads to a greater fall in the image of the brand (Belch & Belch, 2001) and these can receive negative publicity by the media (Till and Shimps, 1998) in the public domain. The nature of these negative events involve incidents that change, or damage the endorser’s reputation, whether innocent or not, but they can damage the reputation of the firm. Typically, these negative events can range widely from accidents that hinder a celebrity’s ability to perform including career ending injuries, exposure to substance abuse (Louie & Obermiller 2002) or could be as serious as criminal charges brought against a celebrity endorser. White et al.(2008) agrees that one of the greatest fears of using celebrities is the possibility of bad publicity arising involving the celebrity endorser – with reference to Miciak and Shamklin (1994), when an endorser’s image becomes ‘tarnished by allegations of illicit, unethical, unusual, or even slightly unconventional behavior’, this instantly creates problems for the endorser. This negative publicity can spread from the endorser to the company and by that way may have a rub off effect on the company’s image in a negative way. This is because companies want their consumers to associate the brand with the celebrity. When negative information about a celebrity comes out, this may lower the evaluation of the celebrity, which in turn reflects on the endorsed brand through the associative link established between celebrity and company (ibid.). Transference theory assumes that “the effect of past relationships (positive and negative) will carry over into future relationships” (Bunker and Ball, 2005). When a negative event occurs, audience gain new information into the celebrity’s bundle of meanings and in turn it will impact the social relational process into the future (ibid). In fact, it has been found that negative information about a celebrity endorser not only influences consumers' perception of the celebrity but also the endorsed product (Klebba and Unger, 1982; Till and Shimp, 1998). This effect was clearly an embarrassment to Hertz, which had utilized O.J. Simpson as their endorser.