Homework answers / question archive / While contracting with celebrities to endorse a company's brand adds to the competitive power of its product offering vis-a-vis the offerings of rivals, one of the big risks in deciding how much a company can afford to bid for an upcoming celebrity is Copyright @ by Glo-Bus Software, Inc

While contracting with celebrities to endorse a company's brand adds to the competitive power of its product offering vis-a-vis the offerings of rivals, one of the big risks in deciding how much a company can afford to bid for an upcoming celebrity is Copyright @ by Glo-Bus Software, Inc

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While contracting with celebrities to endorse a company's brand adds to the competitive power of its product offering vis-a-vis the offerings of rivals, one of the big risks in deciding how much a company can afford to bid for an upcoming celebrity is Copyright @ by Glo-Bus Software, Inc. Copying, distributing, or 3rd party website posting isexpressly prohibited and constitutes copyright violation. O misjudging whether the company will have adequate cash flows to pay the contracted amount to the celebrity and potentially having to cut dividend payments to shareholders to generate added cash to cover the required contract payments. O underestimating how much to cut spending on advertising to help cover some/most of the contractual payments to the celebrity, thus resulting in lower profits than could have been earned. O underestimating how much the number of branded pairs sold will increase, not shipping enough pairs to distribution warehouses to avoid lost sales, and thereby earning less profits RRRRRRRRRR than could have been earned from celebrity endorsement contracts. overestimating the size of the gains in branded sales volume and revenue that the company is likely to realize should it be the winning bidder and, therefore, bidding more than the celebrity's endorsement turns out to be worth. O overestimating how much the company will be able to raise the prices it charges for branded footwear (should it be the winning bidder).