BUSINESS STUDIES ipmi

According to Indonesian Cosmetic Association


INTRODUCTION
The beauty industry in Indonesia is rapidly growing along with the increasing number of brands every year. According to the Indonesian Cosmetics Association (2019), domestic cosmetic manufacturers have developed 153 companies, bringing the total cosmetic business in Indonesia to 760 brands. Throughout the year, skincare product has always dominated the beauty industry as skincare product contributed the most to the overall revenue in a year, accounting for 38% or equivalent to IDR 25 trillion compared to other beauty (Statista, 2019).
It is found that there is a link between role models and beauty industry. Markplus, Inc. and Zap Clinic (2020) discovered that 45 percent of the total respondents considered Indonesian and foreign celebrities to be their role models in the world of beauty. This surely cannot be separated from the fact that the in�luence of many businesses invests to adopt celebrity endorsements as their advertising strategy (Baniya, 2017). As mentioned by Leonnard & Alicia (2021) the use of brand ambassadors or celebrity endorsement to represent the brand is also a way to compete with other brands. In recent years, Parc (2021) mentioned that the collaboration between brands and Korean pop artists has brought the eye of the public. The celebrity endorsement between brands and Korean celebs has been bene�iting businesses by increasing the awareness from fans and sometimes even being sold out. Due to the rising popularity of Korean popular culture in Indonesia, several local brands implemented a marketing plan that uses Korean celebrities as Brand Ambassadors and Endorsers. Depicted to Kumparan (2022) there are at least twelve brands at the moment that pursue a Korean star as their celebrity endorser from 2019 to 2022, in which �ive of them come from skincare brands.
Somethinc is one of the skincare brands that settle a celebrity endorsement using K-star. As for their �irst-ever Korean celebrity endorsement project, Somethinc of�icially announced its collaboration with NCT Dream (South Korean boy group).

Celebrity Endorsement
Celebrity endorsements are de�ined as an agreement between a well-known individual (a celebrity) and a company (e.g., a brand) to use the celebrity to promote a product and or services (Bergkvist & Khou, 2016). According to Ha and Lam (2016) factors determining celebrity endorsement falls into two, source based theory and management based theory. The source based theory is considering source credibility and source attractiveness. The credibility of the celebrity endorsements in�luences consumers' attitudes toward advertisements. A prior study has found that celebrity's credibility, trust and expertise increases a positive attitude toward brands . While source attractiveness is determined by the celebrity's familiarity, likeability, and relation to the consumer. By using a well-known and attractive faces transforms the advertisement into a pleasant experience for its target audience. On the other hand, the management based theories consist of the brand match-up theory and the meaning transfer theory. For Brand Match-up refers to the characteristics of a celebrity and brand attributes should be matched. This helps brands achieve the main goal of advertising which is to successfully convey the meaning of the advertisement (Baniya, 2017).

Perceived Product Quality
According to Keller and Swaminathan (2020) Perceived Product Quality (PPQ) is the perception of customers towards the product overall quality as compared to another possible option on the market. As stated by Keller (2020) the dimensions of perceived product quality are, product performance, product feature, product reliability, product durability and product aesthetics.
Customers believe that the aforementioned dimensions often de�ine quality and, in turn, in�luence attitudes and behavior on a brand. Ultimately, past studies show that PPQ is able to in�luence buying behavior (Das, 2014;Yazdanifard, 2015).

Brand Loyalty
Brand Loyalty can be depicted from the behavior of the customers who feel satis�ied with the product by willing to pay a premium from a company with a good reputation while also buying other product lines and eventually recommend it to their relatives (Leonnard et al, 2021). Furthermore, Leonnard (2018) classi�ied brand loyalty into two, �irstly the attitudinal loyalty which covers emotional commitment and switching cost. Secondly, Behavioral loyalty refers as a loyalty of consumers who make purchases.
This type of loyalty can be representative as the intention to repurchase and word-of-mouth (WOM).

Relationship between Celebrity Endorsement and Perceived Product Quality
It has been proven by previous studies celebrity endorsement has a positive impact on perceived product quality. This is supported by a study done by Kanwar and Huang (2021) they discovered the positive effect of celebrity endorsement toward perceived quality of an Indian cosmetics brand.
A study done in South Korea has shown that celebrity endorsement attributes (familiarity and expertise) has a positive impact on perceived product quality (Kim et al., 2018). Thus, the hypothesis in this study are as follow:

Research Population and Sample
This study's population involved the consumers of Somethinc skin care brand who have purchased the products and been exposed to the celebrity endorsement which is the NCT as the celebrity endorser. However, the total population of this study is unknown. Therefore, a Structural Equation Modeling (SEM) will be used to analyze this study.
The minimum amount of SEM is 100 samples (Ghozali, 2014

Descriptive Statistic
This section describes the data based on the collected data. Mean and standard deviation of each indicator are being further analyzed to assess descriptive statistics. Based on average interval value from Durianto (2004), it is cover as follows:

Convergent Validity -Loading Factor
According to Sekaran & Bougie (2016), in testing convergent validity, it can be assessed based on outer loadings or also known as loading factors.
The expected loading value is not lower than 0.7 (Ghozali, 2016).

Convergent Validity -Average Variance Extracted (AVE)
Average Variance Extracted is the second analysis of convergent validity. AVE is used to �ind discriminant validity for each construct and latent variable. Ghozali and Latan (2014) stated that the value of AVE must be > 0.5.
From Table 6 it can be depicted that all AVE of the variables are above 0.5. Thus, the validity of the variables is considered acceptable.

Discriminant Validity -Cross Loading
The use of discriminant validity is to ensure that each indicator of each latent variable is different from other variables (Ghozali, 2016

Composite Reliability
Composite reliability is considered preferable in estimating the internal consistency of a construct (Ghozali, 2016). The value of composite reliability considered acceptable if it is between the value of 0.60 and 0.70, and the value between 0.70 to 0.95 indicate a satisfactory level of reliability (Hair et al., 2017).

Cronbach's Alpha
Cronbach's alpha is a method of measuring internal consistency; it is interpreted as the number between 0 and 1 (Tavakol & Dennick, 2011). The benchmark for Cronbach's alpha is at the value of 0.7 and above. In summary, all variables scored above 0.7. Thus, this study has an acceptable value of Cronbach's alpha.

Predictive Relevance (Q²) Results
According to Hair et al. (2013) the predictive relevance (Q²) recognized as a predictive International Journal of Business Studies Vol. 7 No. 1 (February 2023) relevance. If the value of Q2 above the value of 0 means that the model has a predictive relevance.
Hair et al (2011)  Based on the calculation above, the suf�icient predictive relevance of this study is 33.1%, which is accepted as it is score above the value of 0.

Hypothesis Testing Results
Hypothesis testing is the �inal statistical analysis of this study. In this section, the method measures whether the hypotheses are supported or not supported. To begin with, the hypothesis testing is �irst measured through path coef�icient value (see Figure 3) or also known as original sample Results and Hypothesis Results can be seen in Figure 3 and Table 4.17 respectively.

DISCUSSION
The �irst hypothesis of this study is Celebrity  Future research is suggested to expand the study to a wider area of other cities in Indonesia in order to get more diverse data and include more antecedent with the following variables: Purchase