English 101

English Essay (The Michael Jordan Effect)

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English Essay (The Michael Jordan Effect)

Michael Jordan is deemed to be the greatest basketball player of all time since he managed to attain numerous records than any other person in basketball. Some of the records entailed being the all-time leading scorer within the Chicago Bulls history, leading scorer in the league as well as most consecutive seasons lead scorer of seven seasons (Patel & Basil, 2017). The paper will have examined the implication n regard to the rumored of his return to the basketball, which escalated his value as a leading in an over $2-billion-dollar expansion to the corresponding shareholders. There will be determination on whether the market value gains experienced by the five companies was actually tied to his comeback, or was based on the contemporary market upswing.

Since Jordan was loved by many people, shortly subsequent to his retirement from baseball, media started rumored his return, which led to escalation within the stock prices of the companies that had endorsed Jordan in speculation over his return (Tzoumaka, Tsiotsou & Siomkos, 2016). According to The Los Angeles Times about one week after the initial reports of Jordan’s comeback, advertisers encountered a collective $2.3 billion gain in terms of equity value. This made him to be valued at $2 billion.

The massive implication connected to the rumored of Jordan’s return to the basketball led to escalation of his value to more than $2-billion-dollar expansion to the corresponding shareholders (Tzoumaka, Tsiotsou & Siomkos, 2016). The implication mainly revolved of the market value gains experienced by the five companies on his comeback as well as the contemporary market upswing. There were abnormal returns encountered by the shareholders pertaining to the Jordan's original retirement as well as his successive return to basketball.

Product endorsements undertaken by celebrities are deemed to be a common kind of advertising within the United States. Moreover, celebrities ranging from sports, television, movies and politics typically pitched everything for varied companies, which are normally valued at multimillion dollar. According to Patel and Basil, (2017) celebrity endorsement assist in brand recognition through making advertisements more believable by creating positive attitude toward brands. Moreover, celebrities aid in developing a distinct personality for the underlying endorsed brand. the value of the celebrity endorsements ought to be established within the development of brand equity through secondary association of a celebrity with a brand. Thus, Michael Jordan's retirement and successive return to basketball can be deemed to have had secondary association as well as brand equity (Tzoumaka, Tsiotsou & Siomkos, 2016).

The Michael Jordan effect also made shareholders encountered adverse abnormal returns after the declaration of his retirement and positive excess returns on the rumors on his return. Nevertheless, the positive excess returns following the rumors of Jordan's comeback were solely temporary and disappeared in weeks of the initial rumors (Patel & Basil, 2017). Thus, it can be said that the Michael Jordan effect on the rumors of Jordan's effect have been massively overstated.

In summation, Michael Jordan is more noticeable as well as successful as a basketball player compared to any other minor league baseball player. Thus, his retirement from the basketball led to reduction of brand equity via decreased secondary association amidst Jordan and the corresponding products he endorsed. Moreover, this reduction brand equity resulted in a relatively lower stock price and hence the loss of endorsement value. On the contrary Jordan's return to the basketball had opposite effect in escalating brand equity as well as improving stock price thus The Michael Jordan Effect.

References

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.

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.