Celebrity endorsement is a great and quick way to have impact on the customers. In India the craze of celebrities are very high, people want to know about them, what they are doing which brands they are endorsing, the connection is established by the companies with that celebrity and it leads to better response from customers.
celebrity endorsement is a good idea but the problem comes when one star is endorsing many brands. This leads to poor brand recall. For example take example of MS Dhoni, he endorses close to 15-16 brands but how many do you remember now..may be 5-6 pepsi, aircel, tvs... i am not able to recall others...
one of the problems of celebrity endoresment is inconsistency in the professional popularity of the celebrity. The same happened during cricket world cup 2007 when Indian cricket team bowed out in the first round itself. The popularity dratically reduced leading to advertisers removing advertisements with cricketers..
sometimes reputation of the celebrity is tarnished after endorsing a product. This affect the brand also. For example pepsi had roped in Mike Tyson for the commercial but his image took a beating which affected Pepsi also.