Introduction Of Celebrity Service In In-Store To Enhance Brand Equity And Increase Revenue Figure

Objective of Introducing Celebrity Service in In-store

The objectives of the present plan of introducing celebrity service in various in stores of the firm is to influence the purchase intentions of the customers and create distinct personality to the particular endorsed brand (Davies & Slater, 2017). In addition to this, the new innovative strategy of introduction of celebrity service intends to augment brand equity and enhance the scheme of message recall by consumers that in turn can positively influence the revenue figure of the firm (Patel & Basil, 2017).

Therefore, in short the strategic objectives of the current innovation plan of the company are as mentioned below:

– To enhance the rate of growth of the company by way of promoting higher use of sports fashion wear

-Utilizing trend settings for the purpose of comprehending purchasing patterns of customers (Ford, 2018)

JD Sports is one of the most well known sports fashion wear company that provides their customers with a wide range of products, an extremely secured shopping experience, superior quality service on broad range of fashion wear for men/women/kids. Management of the company intends to make the firm the most preferred sports fashion wear brand in the UK.   

The sportswear promoted in an innovative way of celebrity service can help in attracting higher number of customers (especially sports lovers, younger generation in general). The introduction of celebrity service in diverse in stores of the company can help in developing instant liking for the products of the company that subsequently can direct the way towards augmented popularity of the firm. The purchasing decision can thus be manipulated by use of the celebrity service and help in enhancement of brand equity of the firm (Scheidt et al., 2018).

The current idea of engaging popular celebrities in different physical stores of the company can be hereby indicated as celebrity endorsements (Chung & Cho, 2017). In essence, not all brands subscribe for endorsement by popular celebrities. In actual fact, it can be hereby observed that individuals idolize different sports celebrities, therefore, when popular celebrities can be witnessed at different physical in stores of the firm, the audiences can be prompted to purchase the product of the company (Arshad et al., 2017). Therefore, in this context, it can be said that engagement of sports celebrities in different in store actions of the company can aid in the process of augmentation of productivity of the firm. In particular, there are positive influences on product sales that cannot be necessarily understated. According to the report provided, it can be hereby mentioned that even one brand endorsement can direct the way towards augmentation of sales by approximately 4% right away. 

Innovative Strategy to Augment Brand Equity

The new product development is one of the essential functions that is constructed by organization in order to provide a guideline with respect to which the company is able to incorporate the innovativeness of the product that is being offered. J.D Sports is a leading sports apparel and sports equipment manufacturing company and the company in order to improve their extent of sales has introduced incremental innovation by endorsing their product with a renowned sports star. The company has incorporated the New Product Development (NPD) framework in order to create an action plan with respect to which this innovation can be incorporated. The first phase is the development of the idea and this is undertaken by the development of the concept and the screening of the same in order to recognize its effectiveness (Potts, & Ratten 2016). The next phase is related to the development process and this is done by undertaking technical assessment on a preliminary basis and this is done in order to have an understanding of the technologies that would be used in order to incorporate this innovation. This is done by undertaking a market analysis so as to understand the effectiveness of the innovation in the market and within the organization (Ratten, 2016). Thereafter, production analysis is undertaken in accordance to the study of the market feasibility and accordingly changes in the rate of production with respect to the incorporation of the innovation can be understood in an effective manner. The last phase is the production phase and this is done by creating an understanding of the product that is developed and assessing the in-house examination of the product prototype in order to understand the effectiveness and the level of satisfaction among the customers (Mahdi et al., 2015). This is done by undertaking a field test among the consumers and thereby understand the changes the innovation has brought in. After all these aspects have been completed a technical review is done in order to provide the knowledge about the effectiveness of the innovation with the help of which the final production is undertaken. The product that is manufactured with the help of the innovation is reviewed on a frequent basis in order to gather the feedback from the customers and understand the effectiveness or the limitations of the products after innovation.      

The technological innovation is done in order to create a benchmark of the present capacity in order to move ahead with the commercialization of the new project. In this scenario, Innovative Diamond is used and accordingly the four indices are assessed in accordance to the innovation that is being incorporated. The market index understands the demands of the customers by assessing the market and implementing the diffusion rates. The innovation index looks to the legal, technical and the engineering issues in order to understand the effectiveness of the prototype in order to bring in changes and initiate the final production (Tzoumaka et al., 2016). The strategy index associates to the planning of the business and compliance to their partnerships and maintain corporate governance in the company. The resource index looks to assess the human resource that is essential, the capital and the financial requirements that is essential in order to introduce the innovation in the operations of the business. The company in this scenario is looking to bring in incremental innovation and therefore has applied the market index in order to understand the demands of the customers and accordingly endorse their product in order to increase their sales and maintain an effective pricing strategy.

Celebrity Endorsements and their Positive Influences on Product Sales

‘Rent Model’ provides a quick screening tool for assessment of risk and return for innovation project. The economic rent is a quantitative analysis of superior return from scarce resources. The three dimension of rent computation are volume of sales, duration of period and rate of margin from the innovation (Prasad, 2018).

The graph above shows prospective return from an innovation project. A depicted above at the initial phase of innovation, it return increases gradually, reaches to the maximum level and then declines gradually.

In context of current innovation project, the rent can be computes using volume, rate and length. 

Volume: Volume of sales during innovation

Rate: Rate of profit from innovation

Length: Length of time over which innovation generates sales

The scores of volume is computed based on the adaptation rate in the market, potential sales prospects and diffusion probability of the projects.

The profit score depends on net profit, gross profit and the role of innovation

Length score is computed depending on the technical base, technological and legal point of view.

Volume = adaptation rate (4) + potential sales (3) + diffusion probability (4) = 4+3+4 = 11 (>7, high)

Rate = gross profit (2) + net profit (2) + role of innovation (1) = 2+2+1 = 5 (<7, low)

Length = technical base (3) + technological view point (3) + legal view point (4) = 3+3+4 = 10 (>7, High)

Based on the computed scores the risk-return matrix is given below

Primary Focus

Internal

The innovation project is thus associated with a high volume over a long period of time. However, the rate of return is relatively low. Hence, the company should focus on improving the internal environment.

There are several processes that are associated to commercialization of the technological innovation and each one of them have been explained as follows:

The innovation is planned according to the readiness of the market to accept the innovation. This is even done by looking at the expectations and the demands of the end users. The technological innovation is done assessing market players who are already existent and thereby create their innovation plans accordingly (Vrontis et al., 2014). This is done by assessing the price market gaps so that effective results can be attained.

The developmental steps is undertaken by assessing the disruptive technologies out of the various kinds of innovation. This will be able to explain the vitality of the disruptive technology (Malik, & Sudhakar 2014). This is essential to create an understanding of the market that can incorporate significant level of innovation. The location of the responsibility for the innovation is assessed in the free and small companies.

New Product Development Framework for Incremental Innovation

The tests are done with the help of which incremental innovation can be targeted and to discover the alternative technology for the absence of skills and finance. The incremental innovation is targeted to the customers who are willing to purchase single products. 

There are several issues that needs to be taken into consideration and this has been due to the fact that the consumer are unable to assess the new innovations and technologies and therefore have very little to offer in accordance to make a comparison with this innovation with other products. However, the company is not facing serious issues with regards to this innovation as the customers are attracted with the strategy of endorsement and thereby there will be a significant rise in the sales and profit level of JD Sports.

The major influences of the new project of celebrity service in various in stores include augmentation of revenue of the firm JD Sports and revenue for different partners of the firm. As such, this new project can help in getting more number of customers from services provided by celebrities and acquiring more number of steps.

Analysis: The revenue figure is expected to increase with little increase in the cost of sales. The sales figure in this case is the incremental sales from the introduction of the innovative project of “celebrity service in physical in stores of the company JD Sports”. 

Conclusion

The competition of the innovation plan that is constructed by JD Sports with respect to the incremental innovation addresses the fact that this company has high level of impact with the incorporation of the plans as it would lead to development of the volume of the production and the length of the overall production even though rate of the effectiveness of the project will be lower. 

Reference list

Arshad, S., Ikram, M., Yahya, M., & Nisar, Q. A. (2017). Does Celebrity Endorsement Influence the Corporate Loyalty: Mediating Role of Corporate Credibility?. International Journal of Social Sciences, Humanities and Education, 1(4), 308-319.

Chung, S., & Cho, H. (2017). Fostering parasocial relationships with celebrities on social media: Implications for celebrity endorsement. Psychology & Marketing, 34(4), 481-495.

Davies, F., & Slater, S. (2017, January). Exploring the Power of Sporting Celebrity Endorsements: A Comparison of Contrasting Sports. In The Customer is NOT Always Right? Marketing Orientations in a Dynamic Business World: Proceedings of the 2011 World Marketing Congress (p. 317). Springer.

Ford, J. B. (2018). What Do We Know About Celebrity Endorsement in Advertising?.

Mahdi, H. A. A., Abbas, M., Mazar, T. I., & George, S. A. (2015). A Comparative Analysis of Strategies and Business Models of Nike, Inc. and Adidas Group with special reference to Competitive Advantage in the context of a Dynamic and Competitive Environment. International Journal of Business Management and Economic Research, 6(3), 167-177.

Malik, A., & Sudhakar, B. D. (2014). Brand positioning through celebrity Endorsement-A review contribution to brand literature. International Review of Management and Marketing, 4(4), 259.  

Patel, P., & Basil, M. (2017, May). The Effects of Celebrity Attractiveness and Identification on Advertising Interest. In Academy of Marketing Science Annual Conference (pp. 579-589). Springer, Cham.

Potts, J., & Ratten, V. (2016). Sports innovation: introduction to the special section. Innovation, 18(3), 233-237.

Prasad, S. K. (2018). Business model for transforming a coal mining asset into a rent generating resource: A study under multiple strategic frameworks. Resources Policy, 55(C), 163-170.

Ratten, V. (2016). The dynamics of sport marketing: Suggestions for marketing intelligence and planning. Marketing Intelligence & Planning, 34(2), 162-168.

Scheidt, S., Gelhard, C., Strotzer, J., & Henseler, J. (2018). In for a penny, in for a pound? Exploring mutual endorsement effects between celebrity CEOs and corporate brands. Journal of Product & Brand Management, 27(2), 203-220.

Tzoumaka, E., Tsiotsou, R. H., & Siomkos, G. (2016). Delineating the role of endorser’s perceived qualities and consumer characteristics on celebrity endorsement effectiveness. Journal of Marketing Communications, 22(3), 307-326.

Vrontis, D., Thrassou, A., Kartakoullis, N. L., & Kriemadis, T. (2014). Strategic marketing planning for football clubs: a value–based analysis. Journal for Global Business Advancement, 7(4), 355-374.

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