Vlasic soon filed for bankruptcy on the other hand

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immediately raising the prices. Vlasic soon filed for bankruptcy. On the other hand, when Foot Locker cut Nike’s orders by 200 million to protest their prices, Nike went a different route than Vlasic. Nike cut their allocation to Foot Locker by 400 million and customers became frustrated that they couldn’t find the shoes they wanted. However, Nike had kept good relations with other distributing channels (among them was Finish Line), and people began to shop elsewhere for Nike products. Therefore, Foot Locker had a substantial decrease in sales. Foot Locker ended up acquiescing to Nike’s demands. The article put an emphasis on the fact that, “companies routinely overinvest in price promotions and underinvest in advertising, new product development, and new forms of distribution” (p.106). Many brands are focusing more on promotion and the short-term view of their product rather than spending more on creating
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awareness of their brand and the distributors who will be selling their product. This could be due partly to the fact that long term effects are harder to measure when gauging the success of a brand. Short-term effects are paid more attention to because they are more tangible. There has been growing evidence that long term effects show much more potential than short term, however, “most analysts focus on quarterly figures to value firms and advise clients” (p.109). A lot of evidence shows that short-term orientation disintegrates a brand’s ability to compete in the marketplace. Therefore, the only way for a brand to maximize its full potential is to focus on long-term orientation.
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  • Spring '11
  • Staff
  • long term effects, Foot Locker, short-term view

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